Tag: Estate Plan

Ensure Your Legacy with an Estate Plan

Have you been putting off creating your estate plan? You’re not alone. It can be intimidating or overwhelming to think about the future. But, once you complete your plan, you’ll enjoy the peace of mind it provides. This year, make it your goal to have an estate plan that fits your needs.

Not sure where to start? Check out these five common questions to learn the basics:
  1. What is an estate plan?

Estate planning is the process of planning for the inevitable. It guides what happens when you are unable to act for yourself due to death or disability.

  1. Who needs an estate plan?

The simple answer is everyone. Estate planning is not only for the rich and famous. Whether you are single or married, with children or without, in your twenties or enjoying your golden years, estate planning is a smart move.

Even families of relatively modest means need to decide who should help with health care and financial decisions, who should care for minor children and when children should receive their inheritance. If you don’t make the decisions, the courts will. Almost everyone needs some form of estate planning, especially those who:

  • Want their estate distributed after their death according to their wishes and not statutory guidelines
  • Have assets that will make them susceptible to high estate taxes
  • Want planned distributions for the benefit of descendants
  • Have heirs who may need responsible financial assistance after their passing
  1. What is the difference between a will and a trust?

Wills and trusts have some similarities. They are both estate planning tools and can work together to create the most complete plan for an estate. The main differences between a will and a trust are:

  • Wills become effective after death, whereas some trusts are effective upon creation
  • Wills direct who receives property upon death and appoint a legal representative to oversee this process, whereas a trust can distribute property prior to death
  • Trusts cover only property placed in the trust, whereas wills cover anything owned solely by the person creating the will
  • Wills are public record, whereas generally a trust remains private.

There are advantages and disadvantages to both wills and trusts, so speak with your attorney about your circumstances to determine which of the options, or what combination of the two, is best for you.

  1. Why should everyone have an estate plan?
  • Preserves the value of your assets
  • Reduces unnecessary taxes and expenses
  • Ensures that your heirs receive what you intended them to receive
  • Manages your assets for you and your heirs in the event of disability or incapacitation
  • Protects your privacy
  1. Where can I go for help?

When you are ready to create your estate plan, it’s important you pick an experienced estate planning attorney who will listen to and understand your wishes. An experienced attorney will be able to help ensure your legacy is protected.

If you are interested in learning more about estate planning and the right strategies for your unique situation, please email us  or call 920-996-0000.

Protecting Your Financial Health from Nursing Home Costs

No one likes to think about getting older, but aging is unavoidable. And, as we mature, taking care of our health and wellness becomes even more important. Chances are, you’re already making good nutrition and exercise choices. But, how would you describe your financial health? Are you protecting your assets with an estate plan?

In 2018, the average cost of nursing home care in Wisconsin was over $8,300 per month. Unfortunately, nursing home expenses are anticipated to continue to rise three times faster than the general rate of inflation.

If you need supportive care from a nursing home because of aging and chronic conditions, it’s important to understand that health insurance or Medicare will not cover these massive costs. Now is the time to be pro-active. Learn how you can receive the care you need and protect your financial health at the same time.

Know your options when it comes to protecting your assets.

It is estimated that nearly half of all people that reach age 65 will need long term care assistance. You have three basic choices for care providers:

In-home care 

While most people prefer to remain in their homes, this isn’t always possible. To help determine if you are a good fit for in-home care, it is crucial to be honest about how much care you truly need. As of 2014, the average annual costs for in-home care in Wisconsin was $50,336.*

Assisted living facility

This type of facility is best suited for older adults who do not require constant care but may need assistance with medication management or other basic tasks. For a one bedroom single occupancy room, the average cost in Wisconsin was $46,200.*

Skilled nursing facility

This type of facility is for people who need medical care or daily therapy services from a registered nurse. It offers care 24/7. For a semi-private room in Wisconsin, the average annual cost was $87,363.*

First things first. Make sure your have a well-drafted estate plan.

Every estate plan needs to address the essentials: a will or trust, financial power of attorney, health care power of attorney, a living will, HIPPA waiver and a marital property agreement. If you have already completed an estate plan, it is important to re-evaluate it every couple of years to determine if it needs any updating, especially if there has been a change in your health. You’ll want to make sure your plan and the representatives listed continue to reflect your wishes. If you have not yet completed an estate plan, this will be your first step to protecting your long-term financial health.

*All prices are based on the 2014 Genworth Cost of Care Survey – Wisconsin.

 Long Term Care Insurance

Another important step is checking into long-term care insurance. Though long term care insurance can be expensive, it will provide a source of payment, in some cases, for in-home care and assisted living (whereas Medicaid will provide payment for only nursing homes).  A long term care policy, in most cases, will give you more options regarding your long term care.

Protecting your assets

Unfortunately, some people will not be eligible for a long term care policy because of finances or health conditions. However, you may still be able to protect some, if not, all your assets from the costs of nursing home using a couple of different strategies.

If you plan far enough ahead, you may be able to protect assets through the use of an irrevocable trust. An irrevocable trust requires you to give up control of the assets transferred to the trust.  However, a properly drafted irrevocable trust generally allows you to minimize taxes, protect your assets from the nursing home and still, in some cases, give you access to the funds.

You might also want to consider asset conversion. Many people mistakenly believe they can’t qualify for Medicaid because they own certain assets. But, the truth is, Medicaid allows for some flexibility.

The following assets will not be considered (or “counted”) by Medicaid.
  • Cash up to $2,000
  • Primary residence given the Medicaid applicant or his/her spouse resides there and the equity value is at $878,000 or less
  • One car at any current market value
  • Personal belongings and household items such as furniture and appliances
  • Pre-paid funeral and burial arrangements
  • Personal property that is essential to a person’s self-support (for example: farm, rental properties or real estate investments)
  • For a married couple, the non-institutionalized spouse can exempt half of the married couple’s countable assets up to a maximum of $126,420 for 2019 and the non-institutionalized spouse’s retirement plans.

Please keep in mind that Medicaid is a complex government program, jointly funded by the state and federal government. The guidelines are complicated and frequently change. The best way to make sure your long-term financial health is protected is to work with an attorney who understands Medicaid and has extensive experience and elder law knowledge. They can take the guesswork out of the estate planning process and give you confidence about your financial future.

Estate Planning Attorney Patrick Furman

About the Author

Patrick Furman is an attorney with Epiphany Law and has been practicing law for over 15 years. He focuses his practice on all aspects of estate, succession, and tax planning as well as probate avoidance, irrevocable and revocable trusts, life insurance, spendthrift and special needs trusts, along with wills, durable powers of attorney and advanced health directives. To learn more about protecting your assets, ask Pat a question.