Estate Planning and Elder Law
Almost all families can benefit from having an estate plan of their own, designed and implemented by an attorney who focuses on this area of the law. For well-to-do families, the consequences of not having an estate plan can be financially catastrophic.
So that begs the question, “How does anyone know if they need estate planning?” It’s simple – every adult needs estate planning. So, the question is not whether you need an estate plan, the question is what kind of an estate plan do you need?
Estate planning is not about how much money you have, it’s about protecting what you have for you during your lifetime and for those you love after you are gone. It ensures that what you have gets to the people you love, when you want, the way you want.
Most confusion in estate planning comes from not knowing where to find an individual or company to prepare an estate plan. Many people tell us that they have already done their estate plan with their financial advisor, banker, or CPA. While this is a good starting point, many times it is forgotten that there are two aspects to estate planning – the legal aspect and the financial aspect. Financial advisors, bankers, CPAs, and other financial professionals can assist you with the management and growth of your assets and avoidance of taxes, but they should not assist you with the legal work necessary for estate planning. Proper legal estate planning ensures the necessary legal tools are in place to keep you in control of your assets as long as you are able and when you are not, to put people you trust in control, with sufficient instructions, to guide them on how to use those assets for your benefit or the benefit of the people you love.
In addition, a proper estate plan will not only identify who’s in control and who benefits, but when. Upon your disability you will want to ensure that your loved ones are provided for and that your needs are met as well. Upon your death you’ll be able to identify who receives the benefit and who is appointed to control those assets.
After your death it is much more cumbersome because other parties, i.e. a new spouse, or predators or creditors can attempt to go after your estate. There are also various taxing strategies that can be included in your legal estate plan to minimize or avoid taxes. Remember, we are not only talking about estate taxes, we are also talking about capital gains and ordinary income taxes. You can even provide instructions for your children to inherit in a manner with full use and access without being accessible by their spouses in divorce, or by nursing homes, lawsuits, or other predators and/or creditors. So whether you have a small estate or a large estate, you have worked hard for it. Working with Strong & Hanni in preparing your estate plan will ensure it is there for you until you no longer need it and that it gets to those you love when you are done with it.
The big myth about estate planning and elder law for seniors is that the biggest threat to your estate is taxes or probate. In reality the biggest threat to your assets is the high cost of long-term care. Most, if not all, general estate plans fail to address this threat.
According to the Genworth Survey on Long Term Care Costs published for 2016, the average cost of a private room in a nursing home in the State of Utah is $76,656.00 per year. The average cost statewide for an assisted living facility is $2,950.00 per month. This per month assisted living price does not include any assistance with activities of daily living. Such assistance is usually an additional expense and is paid for à la carte. In Salt Lake County, Utah County, Davis County, Weber County and Cache County these costs are much higher.
With the above numbers in mind, it’s important to understand how elder law differs from traditional estate planning. The majority of the estate plans that we review are what we call traditional estate plans. These plans are typically designed to do three things:
- Minimize estate taxes;
- Avoid probate; and
- Distribute assets from the deceased person to his or her heirs.
Elder law, on the other hand, is general estate planning plus long-term disability and care planning – what we call “longevity planning”. The elder law attorney is not only dealing with your estate plan, but must also think ahead for life care issues in the event that you or your spouse has long-term health care needs during your lifetime and as you move along the long-term care continuum.
It is quite common to see families spend several hundreds of thousands of dollars when both a husband and wife have long-term care needs. The key focus of an elder law attorney is to help families to protect their assets during their lifetime to avoid such a catastrophic loss. You can see how your current plan stacks up to the task of taking care of your long-term care needs. E-mail Kent Brown and request a free nursing home asset protection analysis. In effect, this analysis is a “dry probate” to see if you will have anything to pass on to the next generation.