When you are planning for your retirement and the ultimate distribution of your assets to your loved ones after you pass away it is important to make accurate projections with regard to anticipated expenses during your post-work years. We all like to stay positive and expect the best, but if you want to plan intelligently you must do so while being prepared for less than pleasant contingencies as well.
The United States Department of Health and Human Services tells us that about 70% of people who reach the age 65 will someday require long-term care either in the home or at a nursing home or assisted living facility. So the reality is that it is likely that you will someday need this type of care, and the costs are considerable. According to the annual MetLife Mature Market Institute survey the national average for a yearlong residence in a private room in a nursing home was $83,500 in 2010. A year in an assisted-living facility would run you about $40,000 on average.
As you can see, these expenses are an important factor to project into your long-term budget. Below are a few of the ways that people approach the costs associated with long-term care.
Long-Term Care Insurance
You can purchase insurance that will pay for long-term care should you need it at some point in time. The premiums are expensive but the younger you are when you obtain the coverage the more affordable it is.
Medicaid
It is possible for seniors who need long-term care to qualify for Medicaid while still retaining possession of their homes, vehicles, and personal valuables. If you are married and your spouse needs long-term care there are strategies that can be implemented that can enable you to maintain your standard of living and retain your personal assets while your spouse utilizes Medicaid to pay for his or her long-term care needs.
Out-Of-Pocket
Of course, the obvious way to pay for long-term care is to simply take out your checkbook and a pen and write a check. For some people it may take some careful planning to be in this position, but if you are interested in building wealth throughout your life and you get the right advice long-term care expenses should be something that you can absorb. If long-term care insurance has been part of the planning, however, you can both prepare for the need for long-term care and not adversely affect your hard-earned estate.
Those who have begun to take the process of estate planning seriously will invariably find themselves considering the period of time that will precede the actual trigger event. When you engage the services of an estate planning attorney to handle the legalities surrounding the transfer of your assets after you pass away you may want to consider creating a comprehensive plan that also addresses some of the eventualities that you may face toward the end of your life. As unpleasant as it may be for some people to consider, incapacity is one of these contingencies and if you ignore it you do so at your peril.
To evaluate just how likely it is that you may suffer a period of incapacity when you enter your twilight years you need only look at the statistics. According to studies compiled by the Alzheimer's Association, as many as one out of every eight Americans who reach the age of 65 suffer from dementia, most often Alzheimer's Disease. But as you get older, the likelihood of contracting Alzheimer's increases. Some studies indicate that 40% of those who have reached the age of 85, have Alzheimer's disease. Alzheimer's eventually brings dementia along with it, and dementia can inhibit your ability to make sound financial and health care decisions.
This is why it is a good idea to have the appropriate durable powers of attorney in place as a part of your retirement/estate plan. The "durable" power allows the instrument to remain in place should the grantor become incapacitated. Most people will execute both a durable financial power of attorney and a durable medical power of attorney and may name two different attorneys-in-fact, or agents, whose experience or expertise is appropriate for each respective area.
If you don't have the appropriate powers of attorney in place and you were to become incapacitated, interested parties may have to petition the court to appoint a guardian to act in your behalf and you would become a ward of a person you may not have preferred or even a ward of the state. Providing for this in advance will allow a person to choose their own representatives in advance. This is a vital matter that ought to be part of your planning when you are preparing for the latter stages of your life.
There are many "tools" to choose from when establishing your estate plan. One traditional option is the Will. If you research information about Wills you will find Internet marketing sites that will sell you a "one-size-fits-all" template. To hear them tell it, drawing up a Will is a simple matter but there's more to it than meets the eye.
If you pass away leaving a Will as your estate plan your estate will pass through a probate procedure. The probate court will examine your Will to ensure its validity and proper execution. During this process interested parties will have an opportunity to contest your Will. In this case the Court would schedule a hearing to review the matter. Obviously, when you're planning your estate you don't want your will to be contested; you want your wishes to be carried out to the letter.
Each state has different laws surrounding the formalities of drafting and executing a Will and the process of probate. If you were to use some sort of general template as a Will there is no telling whether or not it will wind up being ironclad once it is probated in the State Court. Reno probate lawyers make a career out of working with the probate courts in northern Nevada, and we understand exactly how to construct documents that are specifically targeted for the local Court. Providing for your loved ones after you pass away is a serious matter that requires a an experienced estate planning attorney.
Have you ever wondered about the lives of your ancestors? Many of us have and it is not uncommon for people to spend considerable time and money trying to trace back their roots with varying degrees of success. When you are planning your estate you prepare to pass down things of monetary value to your loved ones, and there is no doubt that remembering your family in this way is very meaningful to them. But you and you alone have another valuable gift that you can choose to give to your loved ones and even the generations yet to come.
This gift is the story of your life, and passing it along can have immeasurable worth to your family in may different ways. Your early memories will paint a vivid picture of where the family came from culturally, ethically, and economically. When you recount stories about your grandmother and they are eventually read by your great-granddaughter, think about how fortifying that is to the fabric of your lineage. In addition, when you write about your personal experiences over the years they will invariably inform your family about the times within which you lived and your perspective on them as an objective participant. Historical accounts such as these are telling, authentic, and hard to come by.
These are great reasons to include your memoirs in your estate, but there is another that probably trumps those. You represent something different to each of your family members depending on your relationship to them. They may never have had a chance to see you as are you truly are in your own mind and your own heart. Your loved ones may find it impossible to imagine you as a child, or as a teenager. When you pass along your life story they get to see you in a more complete light, and opening in this way is as cathartic for you as it is meaningful to your loved ones. Now you have a way of passing on the values as well as the valuables.
While no one likes to think about a time when they're no longer around, we all secretly wonder the same things: Will my spouse have enough to live on when I'm not there? Will I be able to leave a legacy for my children? Will the family home stay in the family, or will it have to be sold to pay off creditors and taxes? This is why estate planning is important and necessary.
Estate planning is simply a way to protect your assets and your loved ones by creating legally valid documents that address a variety of concerns. Do you have a child that has special needs? Then a special needs trust might be the solution for you. This type of trust allows you to provide for a disabled or incapacitated dependent without affecting their eligibility for government-assistance programs. This trust can also be a component of a larger family trust, often called a Living Trust, that shields your assets from probate, minimizes taxes and even provides a way to give your heirs incentives for going to college, getting a job and similar personal growth accomplishments.
A good estate plan will also include a Powers of Attorney which are documents designed to designate someone to step in and speak on your behalf in financial and medical matters. In addition, you should have Advance Directives (a living will and health care power of attorney) that tells your healthcare providers how to handle life support and resuscitation matters.
In a nutshell, your estate plan is something you really can't do without and it's important that you have all of the key essentials. Hire an estate planning attorney! Anderson, Dorn & Rader, Ltd. has experienced estate planning lawyers that you can trust.
