If you find yourself reading this blog post, you must be looking for some information about estate planning. You are definitely in the right place, because we have literally hundreds of posts that you can check out to build on your knowledge. There are also additional resources available on this website.
But for now, you would do well to stay right here. In this piece, we are going to provide five estate planning tips that will make you aware of some facets of the process that can fly under the radar.
Understand Your Options
Far too many people reduce the process of estate planning to the creation of a last will. In some cases, they actually use template, boilerplate documents that they download from the Internet to create last wills. This is a mistake on a number of different levels.
We have recently posted an article about the dangers of DIY planning, so we will not get into that at this time. Our suggestion here is to gather all of the relevant information before you decide that a last will is the right choice as the centerpiece of your estate plan.
The optimal course of action will depend upon the circumstances, but the vehicle of asset transfer that is the most widely used alternative to a last will is the revocable living trust.
When you establish the trust, you name a trustee to administer the vehicle after your passing. In the trust declaration, you instruct the trustee with regard to the way you want the assets distributed.
After you are gone, the trustee would follow your instructions and distribute the assets to the beneficiaries outside of probate. This is a costly and time-consuming legal process that would enter the picture if you use a last will. The avoidance of probate and the ability to consolidate assets are two of the benefits, but there are other reasons why you may want to consider a living trust.
This is just one type of trust, but there are many tools in the estate planning toolkit. The point is, you should understand all the facts so that you can make fully informed decisions.
You Are Not Too Young
Studies are conducted periodically to gauge the estate planning preparedness of American adults. They consistently find that the vast majority of people under the age of 62 do not have any estate planning documents in place.
Clearly, people usually do not pass away when they are in their 30s, 40s, or 50s, but it happens. If you are in this age group, and you have a family or even a single child that is relying on you, estate planning is an absolute must. Income replacement should be a priority, and you should also include the choice of a guardian to care for your child or children if the unthinkable was to take place.
Consider Long-Term Care Costs
A lot of individuals dream about the golden years that they will enjoy after they retire, and this can be one of the best periods of your life if you execute a sound retirement plan. At the same time, you should consider the twilight years that will inevitably follow.
The majority of senior citizens will someday need living assistance, and a significant percentage of them will ultimately reside in nursing homes. Here in Albany where we practice law, the median annual charge for a year a private room in a nursing home is nearly $158,000 according to Genworth Financial.
Medicare does not pay for the custodial care that you would receive in a nursing home. Medicaid will pick up the tab if you can qualify by divesting yourself of assets at least five years before you apply for eligibility. This something to take into consideration when you are planning your estate, because nursing home costs could potentially absorb a significant portion of your legacy.
Include an Incapacity Planning Component
Many people become unable to make sound decisions on their own at some point in time. To account for this, you can include durable powers of attorney to name people to act on your behalf in the event of your incapacitation. You can add a living will to state your life support preferences.
Consult With an Albany Estate Planning Attorney!
Our final tip is the most important one. If you are ready to get serious your estate planning efforts, our doors are open. You can send us a message to request an appointment or give us a call at 518-389-6020.