There’s been a lot of talk in the news over whether or not the government should give out benefits, how much, and to whom. But what you don’t hear about is the effect changes to government programs will have on estate planning.
There are many different types of government benefits, from Medicare and Social Security, to veterans’ benefits, to disability and so on. Nearly everyone receives some type of benefit or knows someone who does. They can be important tools for estate planning and come with their own sets of advantages and challenges.
In the past, many estate planning attorneys focused on maximizing the government benefits a person can receive and relying on those benefits to estate plan. The downside is that many benefits require a person to have limited personal assets to qualify (leading some critics to call this form of estate planning “poverty planning.”)
No matter how you feel about benefit programs, the fact is that many have been reduced or cut. Others now have stricter requirements. And while your attorney might have a guess, they can’t tell you what will happen to these programs in the future. Your current estate plan maximizing these benefits may not fully address your needs.
The better choice is to reexamine your plan now. You may find that maximizing government benefits isn’t your best option. Or you may find better ways to maximize those benefits. At the same time you can make sure your estate plan lines up with the rest of your goals.
An effective estate plan is updated with personal developments but also, as in the case with government benefits, with political and legal developments that change how your plan will work. It’s far easier to address these issues now, instead of ending up with an ineffective plan.