How Do I Avoid Unintentionally Disinheriting a Family Member?

How Do I Avoid Unintentionally Disinheriting a Family Member? When an account owner dies, their assets go directly to beneficiaries named on the account. This bypasses and overrides the will or trust. Therefore, you should use care in coordinating your overall estate plan. You don’t want the wrong person ending up with the financial benefits.

The News-Enterprise recent article, “Don’t accidentally leave your estate to the wrong person,” tells the story of the widower who remarried after the death of his first wife. Because he didn’t change his IRA beneficiary form, at his death, his second wife was left out. She received no money from the IRA, and the retirement money went to his first wife, the named beneficiary.

Many types of accounts have beneficiary forms, like U.S. savings bonds, bank accounts, certificates of deposit that can be made payable on death, investment accounts that are set-up as transfer on death, life insurance, annuities and retirement accounts.

Remember that beneficiary designations don’t carry over, when you roll your 401(k) to a new plan or IRA.

You can name as your beneficiaries individuals, trusts, charities, organizations, your estate, or no one at all. You can name groups, like “all my living grandchildren who survive me.” However, be certain that the beneficiary form lets you to pass assets “per stirpes,” meaning, equally among the branches of your family. For example, say you’re leaving your life insurance to your four children. One predeceases you. Without the “per stirpes” clause, the remaining three remaining children would divide the death proceeds. With the “per stirpes” clause, the deceased child’s share would pass to the late child’s children (your grandchildren).

Don’t leave assets to minors outright, because it creates the process of having a court appointed guardian care for the assets, until the age of 18 in most states. Instead, you might create trusts for the minor heirs, have the trust as the beneficiary of the assets, and then have the trust pay the money to heirs over time, after they have reached legal age or another milestone.

You should also not name disabled individuals as beneficiaries, because it can cause them to lose their government benefits. Instead, ask your attorney about creating a special needs or supplemental needs trust. This preserves their ability to continue to receive the government benefits.

It is our goal to provide our clients with the highest level of legal services in the areas of Last Will and Testaments, Living Trust, Irrevocable Trusts, Estate Planning, Probate, Asset Protection, and complete Business Planning. If you or someone you know needs information on Florida estate planning, please contact us today at 239-449-8191 to schedule your free consultation.

Reference: The News-Enterprise (November 30, 2019) “Don’t accidentally leave your estate to the wrong person”

 

What Types of Senior Care is Available for Veterans?

What Types of Senior Care is Available for Veterans?     The U.S. Department of Veterans Affairs offers some funding programs that can help offset the cost of some types of senior care.

U.S. News & World Report’s recent article, “Veteran Benefits for Assisted Living,” explains that many senior living companies try to help many veterans maximize their benefits, which in some cases can significantly reduce the cost of senior living.

Note that the VA won’t pay for a veteran’s rent in an assisted living facility. However, VA benefits may pay for some of the extra services required, like nursing assistance, help with bathing and toileting, and possibly meals.

There are a variety of benefits that may help, based on a vet’s specific service history and eligibility. The most commonly used benefits are the Aid & Attendance Pension. Another common benefit is the Survivor’s Pension for spouses of a deceased veteran with wartime service.

The VA’s Aid & Attendance and Housebound program is part of the pension benefits paid to veterans and survivors. The VA says these benefits are paid, in addition to monthly pension. A vet must satisfy one of the potential conditions, including:

  • Requiring the aid of another person to perform personal functions, like bathing, dressing, eating, toileting, or staying safe from hazards;
  • Being disabled and bedridden, above what would be thought of as recovery from a course of treatment, such as surgery;
  • Being a patient in a nursing home due to physical or mental incapacity; and
  • Having very poor eyesight (5/200 corrected visual acuity or less in both eyes) or a field of vision limited to five degrees or less.

Vets may qualify for these benefits, which are added to the standard monthly pension, when he or she is “substantially confined to your immediate premises because of permanent disability,” the VA says. Eligibility for the program is based on a case by case basis and involves a review by the VA.

It’s important to begin the application process early, rather than waiting for a crisis to occur. Ask an experienced estate planning or elder law attorney to help you and to discuss your options.

It is our goal to provide our clients with the highest level of legal services in the areas of Last Will and Testaments, Living Trust, Irrevocable Trusts, Estate Planning, Asset Protection, and complete Business Planning. If you or someone you know needs information on Florida estate planning, please contact us today at 239-418-0169 to schedule your free consultation.

Reference: U.S. News & World Report (August 12, 2019) “Veteran Benefits for Assisted Living”

 

Next Steps When the Diagnosis is Alzheimer’s

Next Steps When the Diagnosis is Alzheimer’s: We hope to enjoy out golden years, relaxing after decades of working and raising children. However, as we age, the likelihood of experiencing health issue increase. That includes Alzheimer’s disease and other forms of dementia.

Learning that a loved one has Alzheimer’s or other diseases that require a great deal of health care is devastating to the individual and their families. The progressive nature of these diseases means that while the person doesn’t need intensive health care yet, eventually they will. According to an article from Newsmax, “5 Insurance Steps After Alzheimer’s Strikes Loved One,” the planning for care needs to start immediately.

Alzheimer’s Disease International predicts that 44 million individuals worldwide have Alzheimer’s or a similar form of dementia, and 25% of those living with it never receive a diagnosis. Healthcare, including assisted living, memory care and in-home care is expensive. Health insurance is an important component of managing the ongoing expenses of living with Alzheimer’s.

Look at your existing policies. There are different types of coverage, depending on the policy type and company. Review current insurance policies to determine if the level of coverage is acceptable and how much will be required to be paid out-of-pocket. See if there’s existing coverage for long-term care, hospital care, doctors’ fees, prescriptions and home health care.

Maintain those policies. The Patient Protection and Affordable Care Act does offer some protections for those diagnosed with early onset Alzheimer’s. They can now access government subsidies to help them purchase health insurance and the Affordable Care Act prohibits pre-existing condition exclusions and cancellation, because the policyholder is considered high cost.

Look into long-term care insurance. This is a way to protect the patient and the family financially, when the day arrives when long-term care is necessary. When diagnosed with Alzheimer’s, a person isn’t eligible for long-term care insurance.

In addition to verifying and reviewing insurance coverage, there are some additional tasks that every family should address in the early stages of a diagnosis.

Sign an advance directive. This document allows patients to voice how they want their healthcare and decisions handled, before they are no longer capable of making decisions for themselves. In addition, they should have a living will that states their wishes for medical treatment, a designated power of attorney to can make financial decision, and a DNR (Do Not Resuscitate) order, if that is their wish.

Get estate planning done. Time is of the essence, as the estate plan must be completed while the person still has the mental capacity to understand what they are doing. Three documents are necessary: a last will and testament, a power of attorney so that an agent be named can handle finances and a health care power of attorney for health care decisions. An estate planning attorney will be able to work with the family to make any necessary legal preparations.

Reference: Newsmax (June 28, 2019) “5 Insurance Steps After Alzheimer’s Strikes Loved One”

 

 

What Do I Need to Know About Special Needs Trusts?

What Do I Need to Know About Special Needs Trusts? One of the hardest issues in planning for a child with special needs, is trying to calculate how much money it’s going to cost to provide for the child, both while the parents are alive, and after the parents die.

A recent Kiplinger’s article asks How Much Should Go into Your Special Needs Trust?” As the article explains, a special needs trust, when properly established and managed, lets someone with a disability continue getting certain public benefits.

Even if the child isn’t getting benefits, families may still want the money protected from the child’s financial choices or those who may try to take advantage of them. A trustee can help manage the assets and make distributions to the child with special needs to supplement his lifestyle beyond what public program benefits provide.

A child with special needs can have multiple expenses, and the amount will depend on the needs and lifestyle of the family and the child’s capabilities. One of the biggest unknowns is the cost of housing. If the plan is for the child to live in a private group home-type situation, there are options. Some involve the purchase of a condo in a building with services for those with special needs. Many families also add into the budget eating out once a week, computers and phones and other items.

When the parents pass away, this budget will need to increase, because what the parents did for their child must be monetized.

Fortunately, public benefits can usually offset many of the basic costs for a child with special needs. For example, the child may be eligible for Supplemental Security Income (SSI), as well as a Section 8 housing voucher and SNAP food assistance. When the parents retire, SSI is typically replaced with Social Security Disability Insurance (SSDI), which is one-half the parent’s payment.

When the parent dies, this payment becomes three-quarters of that amount. Adult Family/Foster Care may be available. That will depend on the group housing situation.

The child may also be working and bringing in additional income (minus whatever benefits may be offset by this income).

It’s vital to do a complete analysis of the future costs to provide for a child with special needs, so parents can start saving and making adjustments in their planning right away.

The laws on this planning may vary from state to state, so be sure to contact an experienced elder law attorney.

Reference: Kiplinger (June 10, 2019) “How Much Should Go into Your Special Needs Trust?”

 

Long Term Care Decisions Cause Challenges for Families

One year at an assisted living facility in New Hampshire has a median cost of $56,000, and the median annual cost of a semi-private room at a nursing home is $124,000, reports Genworth, a national insurance company known for its annual “cost of care” survey. Have your Long Term Care decisions been made?

Families are often surprised to learn that health insurance and Medicare will pay little, if any, of the costs of long-term care, reports New Hampshire Business Review in the article “The dilemma of long-term care.” Some may try caring for a loved one at home, but this is stressful and often becomes unmanageable. Assisted-living facilities can be wonderful alternatives, if the family can afford them. Long-term care insurance is considered one of the important financial protections as we age, but relatively few people have it.

A growing problem with Medicaid-paid care, is that it can be hard to find a facility that accepts it. Not to mention that the loved one’s assets have to be down to $2,500 (note: this number varies by state), which requires advance planning or becoming impoverished through the cost of care.

Most people have no idea how this part of healthcare works, and then when something occurs, the family is faced with a crisis.

The Department of Health and Human Services projects that as many as 70% of Americans age 65 and older will need long-term care during their lives, for roughly one to three years. Yet little more than a third of all Americans age 40 and older have set aside any money to pay for that care.

There are ways to pay for long-term care, but they require planning in advance. This is something people should start to look into, once they reach 50. The top reason to do the planning: to take the burden of care off of the shoulders of loved ones. From a strictly financial viewpoint, we should all start paying premiums on long-term care as soon as we become adults. However, not everyone does that.

Families pay for long-term care with a mixture of assets:

  • Personal savings provide the most flexibility. This is not an option for many, as one half of American households with workers 55 and older had no retirement savings.
  • Veterans disability benefits can be used for long-term care services, but the non-disability benefits available to veterans are more limited. They may cover in-home services and adult day care, but not rent at an assisted living facility.
  • If a loved one owns a home, they can take out a reverse mortgage and use the lump sum or monthly payout for long-term healthcare needs. The money is repaid, when the home is sold or passed on to an heir.
  • Medicare will pay for some long-term care, but only under very limited conditions. It may cover skilled nursing care in a facility but not the care for daily living activities, including toileting, dressing and others. Coverage is all expenses for the first 20 days in a facility and then there is a daily co-pay of about $170 for the next 80 days, when all coverage stops.
  • Medicaid is the source of last resort, but what many families eventually turn to.

Planning in advance for long-term care is the best option, and while premiums for long-term healthcare may seem expensive, having insurance is better than having no insurance. For many families, watching the costs consume a lifetime of savings is enough of a spur to planning for long-term care. Speak with an elder law attorney about to prepare for long-term care needs, as part of your estate plan.

Reference: New Hampshire Business Review (May 23, 2019) “The dilemma of long-term care”