When you hear about the mistakes that others have made, you get a heads up that will help you avoid the same errors. With this in mind, we are going to look at four common estate planning mistakes in this post.
DIY Estate Planning
You can buy downloads and worksheets from websites that sell legal documents, and they contend that it is simple for you to plan your own estate. In fairness, from a purely legal perspective, a layperson can potentially execute a valid will or trust.
This being stated, do you know why you may want to use a trust instead of a will? Are you aware of the fact that there are many different trusts that can satisfy a wide array of different objectives?
Most people would say no, and this is understandable. You should definitely discuss your options with a licensed estate planning attorney so you can make fully informed choices.
Failure to Address Incapacity
This is not a very pleasant subject to consider, but a significant percentage of elders become unable to make sound decisions at some point in time. Alzheimer’s disease strikes over 30 percent of the oldest old, and this is not the only cause of dementia.
In addition, elder financial abuse is rampant. Billions of dollars are lost annually, and seniors that are cognitively impaired are often victimized.
Outside the realm of financial abuse, if you do nothing to prepare for incapacity, the state could be petitioned to appoint a guardian to act on your behalf. You can avoid this fate and take the matter into your own hands in advance if you develop an incapacity plan.
A durable power of attorney for property can be executed to name an agent to act for you if it ever becomes necessary. If you have a living trust, you can designate a disability trustee to manage the property in the trust in the event of your incapacity.
On the health care front, you should have a living will to state your life-support preferences along with a durable power of attorney for health care decision-making. A HIPAA release should be added to give the agent the ability to speak freely with your doctors.
Outdated Estate Plans
A lot of people procrastinate before they ever put an estate plan in place, and they fall into the same inertia loop when they realize that their plan should be updated. Unfortunately, sometimes they pass away before they take action, and loved ones pay the price.
No Nursing Home Asset Protection Plan
More than one third of seniors will ultimately reside in nursing homes, and Medicare will not cover a stay in a nursing facility or any other type of custodial care.
Unless you have very deep pockets, these expenses can consume a significant portion of your legacy. You can expect to pay about $70,000 at minimum for a year in a nursing home, and costs have been on the rise.
Married people can be impacted by two different sets of nursing home bills, and the average length of stay is one year. There is a solution in the form of Medicaid, but you have to position your assets out of your own name to qualify.
There is a five-year look back period, so divestitures must be completed at least five years before you apply for Medicaid coverage.
Attend a Free Seminar!
You found your way to our site because you are looking for information about estate planning and nursing home asset protection. This is the place to be, because we have ample written resources that you can access free of charge.
Plus, we also offer in person learning opportunities at our seminars. You will learn a lot if you join us, and you can visit our seminar schedule page to see the dates.
Need Help Now?
If you are ready to take action, you can set up an appointment at our Bluffton, SC estate planning office if you call us at 843-815-8580, and you can use our contact form to send us a message.