Formerly Estate Planning was seen mostly for the wealthy, but as our Federal and State Estate and Inheritance taxes have decreased or gone away, other variables are now receiving more attention. Individuals are living longer and have more complications that need to be addressed and planned for. Estate Planning today is imperative for everyone.
Here we are concerned with issues that affect us as we and/or our parents age. This includes senior housing and home care, long-term care, guardianships, and powers of attorney documents, as well as the use of Medicare and Medicaid.
Asset Protection planning is an important component of Estate Planning. Your assets can be under attack from decisions you make at work, actions you take both professionally and leisurely as well as from your lifestyle or that of your family.
This can involve making prudent decisions today to protect yourself, your business, and your assets from loss due to lawsuits, creditors or bankruptcy.
Proper planning involves fairly simple steps, such as setting up your business in a limited liability framework including either a corporation or a limited liability company (LLC) to having an adequate amount of insurance or to more sophisticated trust agreements that limit who can get to your assets or to assets you leave to others. Once considered for only the few, I can show you easily accessible plans that will provide you with an abundance of needed protection.
Long-Term Care/Medicaid (TennCare)
As you get older, how are you going to pay for services you need? One of the areas I am seeing more and more of (and it is not just me, it is through-out our country) is the lack of one’s ability to pay for long-term nursing care, which traditional health insurance does not cover. Depending on where you live and the level of care you need, nursing home care can cost from $35,000 to $150,000 a year. The average stay is a little more than three years. Most people end up paying for nursing home care until their personal assets run out, and then they turn to Medicaid to pay the bills.
However with careful planning, we can help you protect your assets, whether for your spouse or for your family. Long-term care insurance is valuable if you are healthy enough to qualify and can afford it. Other methods are available to make sure you are entitled to benefits offered under Medicare and Medicaid.
Medicare is an entitlement program, a federal health insurance program in which most people enroll when they turn 65 years old. There are no financial qualification rules. Medicare has four parts. Part A covers in-hospital care, extended care after a hospital stay, some home health care services and hospice services. Part B covers doctor services but requires both beneficiaries to pay a premium and co-pays. While Part C is optional, it is provided by private companies that contract with Medicare to provide the beneficiary with all of their Part A and B benefits. Finally there is a Part D to cover prescription drugs for beneficiaries.
Medicaid, known in Tennessee as TennCare, is a joint federal-state program subject to certain federal requirements and implemented under the State of Tennessee’s own regulation as to how it is managed. Medicaid/TennCare is not an entitlement program like Medicare but is a form of welfare. Eligibility is determined after a proper application is submitted and has as parts of its components income and estate value limitations as well as certain health standards.
Medicaid Crisis Planning
First of all, you need to know that I can help. This is one of the primary reasons I joined Lawyers With Purpose. I did not like telling people it was too late to help when they, a spouse, or a parent suddenly needed long-term care. After researching to understand this area better, I found that I can provide valuable assistance even if one is already in a nursing home.
Long-term care is expensive, and these costs continue to increase over time. According to the American Association for Long-Term Care Insurance, the annual cost of care will double in the next 20 years, increasing from $73,000 to $131,000. With improved medical care, the average life span of adults also is increasing; this translates into more years of care at increasingly higher rates. Without some sort of financial assistance, these costs could be financially devastating. In fact, your entire life savings could be quickly depleted within a few years of needing long-term care. This is where Medicaid can help.
Qualifying for Medicaid is complicated. There are limits to how much income you can earn, how much in asset value you can have and only certain assets are exempt, but even these assets are not always exempt.
As you can see the need is great but the path to receiving Medicaid is not easy. We can help you navigate through the Medicaid Maze.
Business Succession Planning
Your business may be your most valuable resource, but what happens if you are not there or are suddenly taken out of the picture? Will the income continue? Will the business survive? Planning is critical. Frequently, in fact more often than not, a transfer of a family business does not succeed. However with planning, you can change those percentages where your business is more likely to enjoy success, even if you are no longer able or around.
Aid and Attendance for Veterans
The Department of Veterans Affairs provide a valuable resource known as Aid & Attendance, which if you qualify, can pay you additional funds. To qualify, like other government based benefits, there are several steps you must go through. To be qualified you must have served at least 90 days in the armed forces and at least one of those days must have been during a period our country was at war, but these dates are specified. In addition you must meet certain medical and financial requirements.
Special Needs Estate Planning focuses on providing for the special needs of people with disabilities to provide for certain added elements, but yet do not interfere with government assistance. Care must be taken that the person with disabilities does not lose their eligibility in your effort to help them.
Planning for Minor Children
As with all Estate Planning, the initial question may be what happens if you are no longer around to take care of your young children? If you have funds paid directly to them, will they be able to take care of themselves? Minors are not capable of self-care, so the Court will step in to form a guardianship. But will that guardianship be what you want? Planning can make all the difference.
Healthcare Planning of Legal Age Children
What would happen if your adult child is involved in a bad accident? Would you as the parent be able to get to their records? Would you even be able to find out if they had been admitted to a hospital? The legal consequences may surprise you, since in many cases, the answer is, No. If your adult child is not married, you may want to consider having them execute a Healthcare Power of Attorney in your favor.
In many ways our society can only thrive with gifts to charity. We encourage such giving and play a part in certain foundations to help in this process. You may be surprised in the ways you can give and to know it is not just the wealthy who do so.