Category: Long Term Care Planning

Navigating Long-Term Care Insurance with Your Houston Elder Lawyer

In our modern era, Americans are living longer, fuller lives. We are fortunate to be getting more and more quality years in the typical lifespan. Of course, there is still a need to plan for accidents, illness, and the eventual possibility that long-term care will be necessary.

Without long-term care insurance, life can become particularly difficult. When costs start mounting up, you will likely have to pay them out of pocket until you are completely broke and have few assets left to pass on to your heirs. Only then will Medicaid kick in. Long-term care insurance can be expensive, but it can end up saving your estate in the long run.

The best way to ensure your needs are met is to be prepared. Your Houston elder lawyer will be able to present you with a variety of options for long-term care insurance and other related considerations. He or she will help you put together a reasonable plan that considers the following:

  • What are you going to need? You may need to do some research to determine what the costs are for long-term care in your area. It is important to have a reasonable idea of what to expect so that you can have enough money to provide for your needs. Remember that costs continually go up, so if you are planning now in middle age, you will need a larger policy to cover the increases due to inflation and other variables.
  • Save money in the long run by planning to pay for the elimination period. By putting aside a reasonable amount of money that will cover expenses between the time that it is determined you need long-term care and when your insurance actually begins to cover it, you can end up with significantly lower premium payments.
  • Work with your Houston elder lawyer to ensure you understand the coverage. Wording and coverage both vary from policy to policy, and you want to ensure that you are getting coverage for exactly what you want. Some policies limit the number of hours a week that you can have care, for instance, which can become problematic if you end up needing to pay for round-the-clock care. You also want to make sure that the policy cannot be canceled or non-renewed when you reach a certain age or become ill.

Your Houston elder care lawyer will have extensive knowledge of what is most beneficial in our area and can help you plan for a future that protects both you and your assets. If you need help getting started, contact our Houston law firm at (281) 218-0880 to schedule a consultation.

 

Houston Elder Lawyer Answers, “When should I start planning for long-term care?”

One of the most frequently asked questions our Houston elder lawyers receive is, “When should we start planning for long-term care?” The short answer is, “Long before you need it!”

When it comes to your home, your health and your finances, you want to be in the driver’s seat. That is why it is so important to plan now for any future care you may need. Even if you have a nice nest egg set aside for retirement, it could quickly become cracked and scrambled if you require a stay in a nursing home or need assisted living. A nursing home stay could easily cost you $6,000 to $12,000 per month. How long would your money last at that rate?

Many people realize that long-term care is a rising concern for elderly individuals. While it is true that most people living in long term care facilities are older, planning for long-term care is not something you should put off. At any point, any one of us could require long-term care. Just one accident could place you in long-term care facility for the reminder of your life.

Unfortunately, we have seen families forced into debt and even bankruptcy to meet the needs of their loved ones. This is why we discuss the need for long-term care insurance with all of our clients. Additionally, we make sure that you have all of the proper legal documents such as powers of attorney and healthcare directives in place in the event something happens to you and someone has to step in and make financial and medical decisions on your behalf.

A solid Medicaid Plan and/or Irrevocable trust may also be a wise idea in order to protect your family’s finances from the grasp of long term-care facilities, without jeopardizing your loved one’s access to benefits such as Medicaid down the road.

When setting up your plan, it is important to meet with an attorney that not just handles estates, but also elder law issues, in order to create a strategy for long-term care that will protect your family and provide total peace of mind.

If you have any questions about a long-term care plan or would like to discuss the documents that you need, contact our Houston elder attorneys at (281) 218-0880.

Trusts from A to Z

Many folks assume that trust funds are only for the rich, however, people in all types of economic circumstances may see a benefit from them. A trust fund is a special legal arrangement that lets a benefactor arrange for certain assets to go to someone else. 11-04-16

Motley Fool’s recent article, “Navigating the World of Trust Funds: Your Quick Guide,” explains that there are various types of trust funds that can serve as useful estate-planning tools. Here’s a rundown of revocable or irrevocable trusts, credit shelter trusts, generation-skipping trusts, and qualified personal-residence trusts.

Revocable trusts. Also known as a revocable living trust, this trust lets you manage your trust during your lifetime. In creating the trust, you can name yourself as the trustee in charge of overseeing its assets. This lets you move assets in and out of the trust as you want or even terminate the trust if your circumstances change. There’s a good deal of flexibility, and a major benefit is that they have the ability to bypass probate. Depending on where you live, probate can be lengthy and expensive. A revocable trust can also reduce the estate tax burden on your beneficiaries.

Irrevocable trusts. This is the opposite of a revocable trust. It can't be altered or terminated without the consent of the trustee and the trust's beneficiaries (and perhaps a judge). When you place assets into an irrevocable trust, you may no longer have any rights to them. The big benefit is saving money on estate taxes. When you transfer assets into an irrevocable trust, they're no longer yours and are excluded from your estate's value for tax purposes. Also, trust assets may be more difficult to access by creditors or anyone who initiates a lawsuit against you. And if you hold assets that you think will really appreciate over time, you can transfer those assets into the trust to remove them from your taxable estate and ensure that any future appreciation on them isn't subject to estate taxes. It’s a serious long-term commitment and may be a good option if you have a larger estate.

Credit shelter trusts. This trust can help wealthy married couples lower their estate taxes by maximizing federal and state exemptions. If you set up a credit shelter trust, the assets in that trust will be transferred to your beneficiaries upon your death, but your spouse can keep his or her rights to the assets contained in the trust for the rest of his or her life. Ultimately, however, those assets won't be counted as part of your spouse's estate. This helps your family take advantage of available tax exemptions. With portability, this trust may not be as useful as it once was. Portability lets the first spouse who dies transfer his or her assets along with the "unused" estate tax exclusion amount to the surviving spouse, who can then apply this enhanced exclusion amount in his or her own estate.

Generation-skipping trusts. This trust is established for the benefit of your grandchildren, as opposed to your children. These trusts are used to avoid estate taxes: if your children inherit your estate directly, then the value of your estate is added to the value of their estate and this could potentially trigger estate taxes when they die. By skipping your children’s generation you may be able to transfer more assets to your family than to the IRS over the long term. The generation-skipping trust is subject to taxes, but it can be structured to reduce estate taxes, allowing affluent families to preserve their wealth for future generations. A big advantage of generation-skipping trusts is that they can help avoid generation-skipping transfer tax.

Qualified personal residence trusts. This trust lets you leave your home to your beneficiaries and decrease your estate taxes. You can transfer your property by deed into the trust while retaining the right to live there for a certain period of time. Once that’s over, your beneficiaries can inherit your home, paying taxes on the value of the home at the time of the deed transfer. A qualified personal residence trust can be useful in locking in a lower value for gift tax purposes. And you can claim a lower value of the gift for your beneficiaries based on their delay in actually receiving the property. But if you die while living in your home, it’ll count as part of your estate and be taxed according to its value at that time.

Trust funds can be a big element in your estate-planning strategy, so talk with a qualified trust attorney to see which type of trust is best for you.

Reference: Motley Fool (Sept. 18, 2016) “Navigating the World of Trust Funds: Your Quick Guide”

Bonehead Mistakes Retirees Need to Avoid

With the excitement of retirement, money can be the last thing you would have on your mind. However, if you have a careless approach to your money, you can be headed for financial pain. 10-25-16

Starts at 60 recently published an article, “Three silly money mistakes retirees can make,” that identifies three big mistakes you could be making with your money as a retiree.

  1. Spending too much, too soon. It can be difficult to fight the urge to spend money when you’ve retired, but spending too much early on in your retirement has severe consequences. Not only does it make your wallet lighter, it also means you don’t get the returns the money could have made for you in the next five, ten or twenty years.

If you’re planning on retiring, plan well in advance. Review your superannuation, pension and savings to create a budget for your retirement. If you’re already retired and spending too much in the early days, see a professional and modify your budget and investments.

  1. Heeding the investment advice of family and friends. While they may only be trying to help, these folks may not be the best people to ask for financial and investment advice. Seek advice from a financial planner or investment advisor.
  2. Failing to plan your estate. Who wants to think about and plan for their death when they are busy enjoying retired life? However, failing to plan your estate could have consequences for your loved ones after you pass away. Without an estate plan, you might not be able to transfer your wealth to your family when you die. Plus, it can create a huge tax bill, meaning less for your spouse and family. Talk with an experienced estate planning attorney and take care of this ASAP.

Reference: Starts at 60 (September 6, 2016) “Three silly money mistakes retirees can make”