Top Three Estate Planning Reasons to Consult an Elder Law Attorney
Elder law involves some traditional estate planning – wills, trusts, and powers-of-attorney. But an elder law attorney uses these devices to fulfill a client’s goals for the future while considering the costs of long-term care.
Make your will more effective. The last will and testament is an important document, but frequently these documents could be used more effectively. As couples age and need more substantial medical care, a more thoughtful approach is needed. Clients should consider if their spouse will really need to inherit all of their wealth. These gifts could be quickly drained by medical and care expenses. Clients should consider bequests to their children, in lieu of those to a spouse, or clients should place a spouse’s bequest in a supplemental needs trust (SNT). SNTs are trusts set up by attorneys in order to maximize available government benefits along with special extras to improve the quality of life and medical care.
Fix your outdated trust. Trusts are a frequently used planning tool. Several decades ago, Living Trusts were estate planning tool of choice for many. However, as the lifetime gift tax exclusion has risen ($5.43 million in 2015), the need for these trusts has diminished. Medicaid considers all assets in a Living or Revocable Trust an available resource that must be spent down before a person can be eligible for long-term care benefits. A better fit for many is a supplemental needs trust (for a beneficiary that is disabled or will need government benefits in the future) or an Irrevocable Trust, however, can make an excellent asset preservation tool. These trusts remove the assets from the grantor’s ownership and, when set up five years in advance, the assets are exempt from Medicaid gift penalties.
You do need powers-of-attorney. Lastly, every individual should have durable powers-of-attorney. These are complicated legal documents that should be drafted by an attorney. In some cases these documents should contain unrestricted gifting powers to aid in Medicaid planning or asset preservation.
Only an attorney can tell you if these devices are right for you, your family, and your circumstances.