Annapolis, Maryland Wills, Trusts & Estate Planning

Taking Control After Alzheimer’s By Planning for Care Costs - Annapolis Estate Planning

Facing Alzheimer’s is never easy. The impacts of this condition can be felt in every area of life, and it can be hard to escape the added stress. While there is no easy fix for dealing with the repercussions of Alzheimer’s, there are ways to plan ahead to cope with and cover the costs of care.

Budget for Care and Insurance Costs

Regardless of whether you have a family history of Alzheimer’s, you should still make an effort to prepare for long-term care when planning for the future. Even without an Alzheimer’s diagnosis, long-term care is almost an inevitable part of every senior’s future, so it makes sense to include this kind of care in your financial planning. Doing so helps you avoid unpleasant surprises, like finding out that Medicare will not cover the care you need.

Contrary to popular belief, Medicare offers no financial support when it comes to long-term care. However, if you know this ahead of time, you can plan for other ways to finance these costs. For veterans, there may be additional benefits you can tap into. This may include using a VA long-term care facility or accessing financial resources to help you hire in-home care or modify your home. Another benefit of planning ahead is that you are more likely to afford long-term care coverage. This kind of insurance is not for everyone, but if you know you are at increased risk for Alzheimer’s and you are planning in your 50s, long-term supplements may be more accessible for you.

Though death can be difficult to think about, you should consider planning ahead for when that time comes. Burial insurance can ease the financial burden of loved ones when it’s time to make funeral arrangements. This type of insurance can cover funeral costs and help pay off debt, such as loans and medical bills. Before you purchase a policy, decide on a budget by thinking about the funeral arrangements and any debts you want to be covered.

Know How Alzheimer’s Care Needs Will Progress

Often, the need for long-term care is sudden for seniors. This can make it a little more difficult to find compassionate, affordable care. If you or a loved one is showing signs of Alzheimer’s and have had a medical diagnosis, you are in a position of being able to plan out your care more efficiently. That’s because Alzheimer’s typically follows a predictable path of progression. The level of care needed will follow this same path. During the beginning stages, Alzheimer’s patients can still take care of themselves, but they may have difficulty controlling emotions, staying organized, and interacting with others. At this point, seniors may just need a little extra help around the house with cleaning and other daily tasks.

As the disease advances, however, those with the condition can become a danger to themselves and will need constant care. This can mean living with a family member or hiring a home health aide to provide more stable supervision and assistance. In the final stages of Alzheimer’s, nursing homes or skilled-care facilities are a necessity, and unfortunately, death is also inevitable. Knowing this information can be heartbreaking, but it does help individuals and family members better prepare for the financial strains of Alzheimer’s.

Prepare Yourself and Your Family for the Emotional Costs

Bracing your finances for the costs of Alzheimer’s care can save you and your family a lot of headaches as time passes. The real costs of this devastating disease, however, are those that don’t impact your bank account. Knowing what is ahead can be disheartening, but watching the progression of Alzheimer’s in a loved one can be emotionally draining as well.

So, in addition to putting together a financial strategy, be sure to find ways to manage those complicated emotions. For patients, that may mean going to therapy, finding a support group, or looking for a constructive outlet for your pain and anger. It’s common for seniors to experience depression and anxiety after being diagnosed with the disease, but it’s crucial to your well-being that you seek self-care and support. Self-care is also important for caregivers and loved ones so that they can stay strong throughout this painful journey.

Alzheimer’s can leave individuals and their family members feeling helpless. However, you do have the power to plan for the costs of Alzheimer’s care and prepare for the years ahead. By doing so, you will give everyone peace of mind during a time already filled with pain.

Reference: This post is by guest writer June Duncan, caregiver and author of the upcoming book, The Complete Guide to Caregiving: A Daily Companion for New Senior Caregivers. Books can be purchased at her website, http://riseupforcaregivers.org/.

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Special Needs Planning – Annapolis Estate Planning

It is important to understand the basics of special needs planning, so that you can plan for your child’s future. There are many issues to address, but experienced professionals will be able to help.

Special needs planning is challenging. It’s important to have a strong team to work with. An estate planning attorney with experience in helping special needs families will be able to guide you through the process. They will also likely have access to other professionals to help.

A recent Forbes article, “Special Needs Kids Require Specialized Estate Planning,” says that if you have a child with special needs, it’s critical that you look at your planning options with your estate planning attorney and discuss your child’s health, capabilities and prognosis. You can then customize a plan that works for your child, with as much flexibility as possible.

Those with enough assets often would rather not have their child get any government benefits and will set aside an amount to cover all the child’s living expenses in trust. Since the parents aren’t concerned with government benefits, the trust can be a discretionary trust that will distribute income and principal at the trustee’s discretion for the benefit of the child throughout the child’s life.

If there is a good chance the child will receive government benefits, many parents create special needs trust to supplement (not replace) the government benefits that the child will receive. The trust must be drafted so the child doesn’t become ineligible for the government benefits. These benefits provide for the child’s basic needs like a place to live, so the special needs trust will defray the cost of extras such as trips and entertainment.

If the parents can’t determine if their child will be eligible for government benefits, another option is for the parents to give their current trustees the authority to create a separate special needs trust at the time of the surviving parent’s death. Therefore, if the child is receiving benefits, the trustee can create the trust at that time with the goal of preserving the child’s benefits.

All these trusts can be funded now. The parents can establish the trust and transfer cash or other assets to it, or the trust can be created now and left empty until a parent passes away. At that point, money can move into the trust from the parent’s estate, another trust, or from a life insurance policy.

Some parents elect not to create a trust for their child and to disinherit him completely. The thinking is that the child can be supported solely by government benefits. Others go with a combination approach. They disinherit the special needs child and leave more assets to their other children with the understanding that the other children will care for the special needs child. However, this isn’t a great idea. The siblings have no legal obligation to care for his or her sibling with special needs, just a moral one. If the child who inherited the bulk of the estate gets divorced, the assets are also susceptible to division upon divorce. Finally, the assets are liable to a creditor’s claim if the child is sued.

Give yourself the peace of mind that comes from knowing you have done everything possible to ensure that your special needs child will have what he or she needs when you are no longer here to protect them.

Reference: Forbes (March 27, 2019) “Special Needs Kids Require Specialized Estate Planning”

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Obscure South Dakota Law Puts Kids On the Spot for Aging Parent’s Care - Annapolis Estate Planning

A civil law that has been in place since 1939 is rarely used, but as the cost of long-term care and nursing facilities keeps rising, some experts think it might get dusted off.

South Dakota is one of 29 states that have an adult child payment requirement, commonly known as a “filial law,” that speaks to the responsibility of one person or a group of people to pay for the housing, feeding, and care of family members, reports KSFY.com in its article, “Little-known law forces adult children to pay for nursing home care for parents.”

Elder law experts are taking a look at the idea of using that law as care facilities face the challenges of unpaid nursing home bills.

This filial law in the Mount Rushmore State permits nursing homes to sue the children of patients who don’t pay and makes no reference to whether the families have close relationships, or whether the adult child received any financial assets of the parent.

Advocates of the laws contend that, in certain situations, they give nursing homes a remedy to collect outstanding bills rather than writing off those debts as a loss. These losses can lessen a facility’s ability to provide quality care to all patients. The laws are most commonly enforced when an adult child was given money or assets or misappropriated money from a parent, prior to admission into a nursing home.

Some believe these filial laws uphold a general sentiment in law that there’s a moral responsibility of those who can afford to pay for a family member’s care to do so.

Nursing homes don’t want to be providing long-term care for people who have the ability to self-pay, especially if there’s been inappropriate behavior by an adult child.

There have been opponents in other states who have tried to overturn the laws, basing their arguments on the fact that the statutes are broad and could be applied inappropriately. Critics say that the law is poorly written and could have a negative impact on family members, who may have already exhausted their own resources in trying to care for aging parents.

Reference: KSFY.com (December 20, 2018) “Little-known law forces adult children to pay for nursing home care for parents”

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Talking About Future Care Needs with Parents - Annapolis Estate Planning

It’s great to take a trip home and catch up with family, especially when you live far away.  However, if this is the year that you arrive to find big changes in your aging parents, here’s some help about what your next steps might be.

When nostalgia doesn’t quite match up with reality, it’s time for some challenging conversations with aging parents and, if you have them, your siblings. It’s not an easy topic, according to the article, “Making the best care decisions for aging parents,” from KARE 11 in Minneapolis, but it is better to have the conversation and make the plans for what’s next than it is to bury your head in the sand and pretend that nothing’s wrong.

Many families find this out the hard way. When a parent requires immediate urgent care, the family must jump into “go” mode. It can be overwhelming. There are many options, which range from various levels of in-home care, to independent living, to assisted living and even to skilled nursing care. You should understand the level of care you need and what you can afford.

Unless you qualify for Medicaid, you’ll need to pay for assisted living out of your own pocket. For most of us, this could drain assets in short order. Many people also aren’t planning for long-term care in retirement.

It’s best to plan early. If you're going to buy a long-term care policy, the best time to apply is in your 40s or 50s, when your health is good and the cost is cheaper.

Sit down with an elder law attorney, regardless of your assets, because the laws concerning Medicare and Medicaid are confusing. Every situation is different.

Many people aren’t aware that Medicare doesn’t cover many long-term care services. In fact, that limited benefit is designed to get somebody back to independent living, not help them with basic activities of daily living. Therefore, if it becomes a situation where somebody is going to need help with such basics as dressing, bathing and other activities of daily life for the rest of their life, Medicare is not going to cover it.

If you believe gifting your estate away now will stop you from losing it in the future, remember that most states have a five-year look back period. Any gifts of money or property in the 60 months before applying for Medicaid can be taken back to pay for the program or the applicant will be penalized.

There’s very little about this that is easy for aging parents or adult children. However, planning in advance, in an intelligent and sensitive manner, is better than having to make hard choices in an emergency.

Reference: KARE 11 (Minneapolis) (November 27, 2018) “Making the best care decisions for aging parents”

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Spousal Impoverishment Rules Addressed by House Lawmakers – Annapolis Estate Planning

More than a dozen health care and provider organizations are working with law makers in an attempt to preserve financial protection for spouses of seniors, who are receiving long-term care at home or in community settings under Medicaid.

All the years of saving and planning for retirement, and now your spouse needs the kind of long-term care that you can’t afford, without losing everything you worked so hard to attain. Does that mean the healthier spouse has to live in poverty, even bankrupting themselves, so their loved one can receive Medicaid coverage? Laws were passed to address this in the late 1980s, but they are close to expiring.

Home Health Care News reports in a recent article, “Medicaid Bill Would Prevent Spousal Impoverishment as Route to Home Care Coverage,” that as of August 2018, more than 73 million people combined were enrolled in Medicaid and the Children’s Health Insurance Program (CHIP). Those numbers are from federal Medicaid data; more than 66 million individuals were enrolled in Medicaid, while about 6.5 million were enrolled in CHIP.

In order to prevent self-induced bankruptcy to keep a spouse eligible for Medicaid, Congress created spousal impoverishment rules in the late 1980s. Those rules originally required states to protect part of a married couple’s income and assets to give the “community spouse” adequate living expenses, when determining nursing home financial eligibility. However, states were also given the option to apply the rules to home and community-based services (HCBS) waivers.

Section 2404 of the Affordable Care Act (ACA) changed that and required the spousal impoverishment rules to treat Medicaid HCBS and institutional care the same way. That law is set to expire at the end of December. That means that individual states would once again be the decision-makers, when it comes to spousal impoverishment in home care.

In 2018, all 50 states were applying the spousal impoverishment rules to HCBS waivers, and five states (Arkansas, Illinois, Maine, Minnesota, and New Hampshire) plan to stop applying the spousal impoverishment rules to some or all of their HCBS waivers, if Section 2404 expires at the end of the year.

With support from LeadingAge, the National PACE Association, the National Council on Aging and several other groups, U.S. Representatives Debbie Dingell (D-Mich.) and Fred Upton (R-Mich.) on Friday introduced the Protecting Married Seniors from Impoverishment Act. If the bipartisan piece of legislation passes, it would permanently extend spousal impoverishment protections for Medicaid beneficiaries receiving long-term care in a home or community care setting.

“Our long-term care system is broken,” Rep. Dingell said in a statement. “Seniors and their families already face too many challenges when navigating long-term care, and they should not have to get divorced or go broke, just to be eligible for the care they need.”

It’s not known the level of Congressional support the Protecting Married Senior from Impoverishment Act will get, but the fact that most states plan to continue protections on an optional basis is encouraging, LeadingAge President and CEO Katie Smith Sloan said in a statement.

“As a national organization, LeadingAge has consistently supported federal law establishing protections against spousal impoverishment,” Sloan said. “We support the legislation to extend the current protection.”

LeadingAge in Washington, D.C is an industry association that represents more than 6,000 not-for-profit senior care providers. If the Dingell-Upton bill fails, LeadingAge members in states that don’t plan to continue impoverishment protections will likely be negatively affected.

For several years now, organizations that include NAELA (National Academy of Elder Law Attorneys), AARP and the National Association for Home Care & Hospice, have been working with representatives to keep this protection in place.

Reference: Home Health Care News (November 19, 2018) “Medicaid Bill Would Prevent Spousal Impoverishment as Route to Home Care Coverage”

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300,000 Americans to Gain Medicaid Benefits - Annapolis Estate Planning

Most of those who will be eligible in 2019 are over age 50 and would otherwise have no healthcare.

Ballot measures in three states—Idaho, Nebraska, and Utah—will extend the federal- and state-funded healthcare program to allow access to approximately three hundred thousand low-income Americans.

AARP’s recent article, “Medicaid to Expand in 3 States,” reports that with the passage of ballot measures in those three states, 37 states, including DC, have now expanded the Medicaid program, since the Affordable Care Act (ACA) created the opportunity to offer more people coverage.

The success of the three ballot measures “is a recognition that Medicaid plays an important role in our society for those who are in need and that it’s an issue that has changed a great deal over the past five or six years from a political standpoint,” says John Hishta, AARP senior vice president for campaigns. “I think the voters have led the way in some of these states.”

Montana voters rejected a measure that would have increased tobacco taxes on cigarettes and taxed other tobacco products to pay for the state’s share of Medicaid expansion, veterans’ mental health, and home- and community-based services. Nearly 130,000 low-income residents in that state may now lose their Medicaid eligibility in 2019, if the state Legislature doesn’t act.

The mid-term election results in three other states could have implications for their Medicaid programs as well. Maine’s Democratic Governor-elect Janet Mills supports expanding Medicaid. The state’s voters decided in 2017 to expand the program, but the current governor, Republican Paul LePage, refused to implement the expansion.

Kansas’ Democrat Governor-elect Laura Kelly stated in the campaign that she’d push for legislation to expand Medicaid during her first year in office. In 2017 the Republican-controlled Kansas House of Representatives and Senate passed legislation to extend Medicaid, but the current Governor Sam Brownback vetoed it. The Legislature couldn’t override his veto.

Wisconsin’s Governor-elect Tony Evers says he wants to expand Medicaid, which would provide coverage to at least an additional 80,000 people in that state.

Most of the people who apply for Medicaid work but do not earn enough to afford health insurance. The program allows people between 50—64 years of age to get health care coverage.

Reference: AARP (November 8, 2018) “Medicaid to Expand in 3 States”

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How Does Medicaid Treat College Savings Funds? – Annapolis Estate Planning

Saving for college but needing to receive Medicaid is a complicated equation.

The answer “It depends” is not much of a comfort when considering how college savings accounts will be treated for Medicaid purposes. However, it is, unfortunately, the most accurate answer. There are several factors that must be considered:

1. What type of account you used to set aside the college money;

2. How and when you funded the account; and

3. Whether you still have access to the money.

A recent nj.com article asks, “Will my college savings be counted for Medicaid?” If you can liquidate an account and access the money that you deposited, Medicaid will typically expect you to do so to fund your own care for as long as possible. Another challenge is that Medicaid will always penalize gifts. Odds are good that the funds you added to these college accounts are gifts.

However, there may be an exception: if the account was funded prior to the 60-month lookback period, the applicant can’t be penalized for making a gift.

Let’s examine why the type of account is also important.

If the money was put into a 529 plan, the funds aren’t part of the donor's taxable estate, and the assets aren’t includible. However, if the funds are invested in an account “ITF” (“in trust for”) a grandchild, then the funds would be includible. It its calculations, Medicaid examines all assets in the name of the applicant. Assets held in 529 plans—although the donor's name may be shown as the participant—are deemed to be a gift, when the assets are transferred and, therefore, are no longer the donor's asset.

To be safe, grandparents who set up 529 plans for their grandkids should change the participant to the grandchild's parent or guardian. This entirely disconnects the donor's name with the account.

If the grandparent just added a grandchild's name on one of his savings accounts, then that would be includable. This is true even if it were completed more than 60 months earlier, because it wouldn’t be deemed to be a completed gift.

When it comes to the intersection of college savings and Medicaid, you may need to speak with an elder law attorney who will be able to review how the college savings assets are owned, and whether or not they’ll impact your Medicaid eligibility.

Reference: nj.com (September 19, 2018) “Will my college savings be counted for Medicaid?”

Holden & Campbell, LLC – Annapolis Estate Planning

Feeling Squeezed? You Might be in the “Sandwich” Generation – Annapolis Estate Planning

 

If you’re feeling pressure on two generational sides—caring for aging parents and taking care of children—you’re a member of the Sandwich Generation.

The term “sandwich generation” was added to Meriam Webster’s dictionary in 2006. However, twelve years later, the number of people it describes seems to be on the rise. Sandwich Generation members are raising their children and are responsible for their parents or taking responsibility for their grandchildren and grandparents. Whichever sandwich you’re in, it’s not an easy place to be. Even if your parents or grandparents are financially fine, your time for yourself, your career and your kids is squeezed.

The Press-Enterprise’s article, “3 tips for anyone in the sandwich generation,” offers the following tips to make the “sandwiching” easier on you and your family:

1. Talk About Money Issues. Discuss finances with your children and parents. Perhaps you could go with them to meet with their estate planning attorney. He or she can make sure your parents have all the proper estate planning documents, such as a will, trust, living wills and powers of attorney.

This legal professional will create a plan to lessen or avoid estate taxes and work to ensure that your life's savings and assets are protected from your beneficiaries' creditors after your death, and that your legacy is assured.

Estate planning attorneys are accustomed to working with families and navigating the issues between adult children and their aging parents. There is little chance that yours is a unique situation. It does not mean it is easy, but a skilled attorney will be able to help you and your family deal with whatever situation you face, with dignity and compassion.

2. Get (More) Help. You may get support or assistance to help your parents, your kids, or even yourself. Odds are good that your parents will be reluctant to accept help, so start the process yourself. This could involve hiring a housekeeper for yourself to free up some of your time for things that are more important.

This will give you more time, and your parents won’t feel you are using your finances to assist them. If you have friends and relatives that offer help, take them up on it. Don’t try to do everything yourself.

If your children are old enough, you can also get them involved. Children are surprisingly capable, and sometimes grandparents are more comfortable having grandchildren help with minor chores around the house, where their children’s own actions may seem intrusive.

3. Get Rid of the Guilt. Even a dedicated husband and wife team can’t cover everything. Do the best you can and remember that you do have to set some time and energy aside for yourself.

Reference: (Riverside CA) Press-Enterprise (June 28, 2018) “3 tips for anyone in the sandwich generation”

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Long-Term-Care Insurance Isn’t Dead. It’s Now an Estate-Planning Tool - Annapolis Estate Planning

Hybrid policies, aimed at affluent Americans, offer long-term-care benefits along with potential death benefits.

Last year, after finishing with college tuition for their three children, Jessica Galligan Goldsmith and her husband, James, treated themselves to something she had long wanted: long-term-care insurance.

It hasn’t been cheap. The couple, both lawyers in their mid-50s, will shell out more than $320,000 between them over a decade. For that, they will be able to tap into benefits topping $1 million apiece by the time they are in their 80s, the age when many Americans suffer from dementia or other illnesses that require full-time care.

Plus, the policies pay out death benefits if long-term care isn’t ultimately needed, and most provide 10% to 20% of the original death benefit even if the long-term-care proceeds are fully tapped.

Such policies that combine long-term-care coverage with a potential life-insurance benefit are called “hybrids,” and they are reshaping the long-term-care niche of the U.S. insurance industry just as it had appeared headed for obsolescence, financial advisers say. The Goldsmiths were among 260,000 purchasers last year nationwide of these hybrids, according to industry-funded research firm Limra, far outpacing the 66,000 traditional long-term-care policies sold in 2017.

When long-term-care insurance took off in the 1990s, insurers aimed for the broad middle class of America. The pitch was that policies would save ordinary families from entirely draining their savings, leaning on children or enrolling in the federal-state Medicaid program for the poor. (Medicare pays for nursing-home stays only in limited circumstances.)

Now, many insurers are finding their best sales opportunity with wealthy Americans. Many of these people may be able to afford costly care later in their lives, but they are buying the contracts to protect large estates, advisers say. ​​

Ms. Goldsmith wanted long-term-care coverage partly because her legal specialty is trusts and estates and she has seen families whose seven-figure investment portfolios were devastated by years of care for spouses.

“What felt like a good nest egg” can be hit by “astronomical expenses,” says Ms. Goldsmith, of Westchester County outside New York City. Their policies are from a unit of Nationwide Mutual Insurance Co.

According to federal-government projections, about a quarter of Americans turning 65 between 2015 and 2019 will need up to two years of long-term care. Twelve percent will need two to five years, and 14% will need more than five years. At $15 an hour, around-the-clock aides run $131,400 a year, while private rooms in nursing homes top $100,000 in many places.

Hybrids can cost even more than traditional standalone products because they typically include extra features. There is wide variation across the hybrid category and the type the Goldsmiths bought (known as “asset-based long-term-care”) includes a particularly valuable feature: a guarantee that premium rates won’t increase.

Traditional long-term care policies fell from favor in the mid-2000s after many insurers obtained approval from state regulators for steep rate increases—some totaling more than 100%—due to serious pricing errors. In May, Massachusetts Mutual Life Insurance Co. began applying for average increases of about 77% that would apply to about 54,000 of its 72,000 LTC policyholders. Until this move, MassMutual hadn’t previously asked longtime policyholders to kick in more to better cover expected payouts.

Affluent buyers also can afford to pay for their hybrid policies within 10 years, as many insurers require. However at least one big carrier, Lincoln National Corp. , has begun allowing people in their 40s and early 50s to spread payments over more years, provided they fully pay by age 65.

Besides the death benefit—which is as much as $432,000 on a combined basis for the Goldsmiths—hybrids also include a “return of premium” feature. This allows buyers to recoup much of their money if they want out of the transaction, albeit without interest.

“We call these ‘live, die, change your mind’ policies,” says Natalie Karp, the Goldsmiths’ agent and co-founder of Karp Loshak LTC Insurance Solutions, a brokerage in Roslyn, N.Y.

About a dozen insurers still offer traditional long-term-care policies that typically lack those features. They charge more and provide shorter benefit periods than they did in the past. But Tim Cope, a financial adviser in South Burlington, Vt., for insurance brokerage NFP, says the good news is that “policies continue to pay for much-needed care, and changes in their policy design, pricing and underwriting are an effort to minimize premium increases on recently issued and new policies.”

Many advisers favor standalone and hybrid offerings of three of the nation’s largest and financially strongest insurers: MassMutual, New York Life Insurance Co. and Northwestern Mutual Life Insurance Co.

Ms. Goldsmith says she was attracted to the Nationwide hybrid because it doesn’t require submission of receipts to obtain the long-term-care proceeds. Benefits are payable in cash when a physician certifies a severe cognitive impairment or inability to perform basic activities, such as bathing, eating and dressing. Payments are capped at specified monthly amounts. For the Goldsmiths, the monthly benefit starts at $9,000 per spouse and grows with an inflation adjustment to more than $15,000 in their 80s.

“Receipts are very hard for older people to deal with, especially when stressed by caring for a disabled spouse or being disabled themselves,” Ms. Goldsmith says.

Reference: The Wall Street Journal (June 11, 2018) "Long-Term-Care Insurance Isn't Dead. It's Now an Estate-Planning Tool."

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Everyone Needs to Have an Estate Plan—Here’s Why – Annapolis Estate Planning

You need an estate plan, whether you are rich or poor or somewhere in the middle. Without one, decisions will be made for your family that you may not have wanted.

More than half of all Americans do not have a will, reports Wealth Advisor in the recent article, “The 3 Reasons Why People Do Estate Planning.” Maybe that would change, if people were better able to remove the worry and emotion and address estate planning as the necessary legal preparation to manage or distribute your assets during your life if you should become incapacitated and after your death. Minimizing gift, estate and income taxes are another reason to have an estate plan.

It’s really important to have a will, even if your total assets are minimal. While you can find a will online, you’re much safer visiting with a qualified and experienced estate planning attorney to develop a customized plan that works for you. An estate planning attorney has the in-depth knowledge and skills to make suggestions that will help determine your future asset allocations.

When considering a legacy and to whom and what to leave behind, there are three reasons why people do estate planning: probate fees and tax reduction, asset protection and control and management.

Probate Fee and Tax Reduction. When a person has more than a certain level of assets, they may have to pay state and federal estate taxes, depending upon the value of the accounts and based on where they live (some states have estate taxes, while others don’t). An experienced estate planning attorney can help explain the laws and help you to make wise decisions as to whom, where and when to designate your assets. Working with a legal professional who’s well-versed in estate planning will help you to reduce probate fees and inheritance taxes.

Asset Protection. It’s critical to protect your assets, like safeguarding your assets from spend-down (the process of reducing assets to qualify for Medicaid) in a nursing home situation. That’s a great reason to be proactive and develop an estate plan.

Control and Management. This is a big reason why many families engage in estate planning. Properly done, it eliminates worries and ensures that your final wishes regarding asset distribution are carried out.

Is there another reason to have a will? It will cost more to settle the estate and take longer, if no will is in place. Think of your estate plan as a gift you leave your family to let them know you wanted them to be taken care of after you are gone.

Reference: Wealth Advisor (May 29, 2018) “The 3 Reasons Why People Do Estate Planning”

Holden & Campbell, LLC – Annapolis Estate Planning