Most people in the United States do not have estate plans in place, and the lack of preparedness is not confined to very young adults. Less than half of people that are in their 40s and 50s have estate plans, and there are different reasons for their inaction.
One of them is the simple fact that they donât know where to begin, even though they acknowledge the fact that estate planning is important. In this post, we will share the basics.
Create a General Outline
Before you start to dig into the details with regard to the documents you should or should not use, the first step is to create an outline. List all the things that you expect to be able to pass along to your loved ones and think about how you want them to be distributed.
Aside from assets that will be liquid, you may want to carefully consider heirlooms and other items that you would like to pass along. These gifts can be quite meaningful, and some people will give them while they are still alive so they can share the moment with their loved ones.
During this phase, it is wise to honestly consider the life situation and personal tendencies of the people on your inheritance list. There are different ways to facilitate asset transfers, and the right choice for one person may not be appropriate for the next.
Define Your Goals
One thing that is really important to understand is the fact that there is an estate planning solution to satisfy virtually any objective. For example, letâs say that you want to leave an inheritance to a loved one that has a disability. This person is relying on Medicaid for health insurance.
An inheritance would change their financial profile, and they would lose eligibility for Medicaid. Under these circumstances, you could establish a supplemental needs trust. The assets would be used to make the beneficiary more comfortable without impacting benefit eligibility.
If you are concerned about leaving a lump sum inheritance to someone that is not a good money manager, you can include spendthrift protections to protect the principal from the beneficiaryâs creditors. It would also be possible to provide them with limited distributions over an extended period of time.
You can even create a trust that includes incentives to guide a loved one toward positive behavior or away from destructive actions. These are just a few of the examples, but simply put, you donât have to settle for an arrangement that is less than ideal.
Gain an Understanding of Long-Term Care Costs
There is another piece of the puzzle that you may overlook until you understand the facts. Most senior citizens will need living assistance, and 35 percent of elders eventually reside in nursing homes.
Medicare does not pay for the custodial care that these facilities provide, and their rates are exorbitant. Depending on the extent of your resources, a stay in a nursing home could consume a significant portion of your legacy, and it can be doubled for married couples.
There is a solution in the form of Medicaid, but it takes careful planning to qualify because of the low income and asset limits.
Consult With an Estate Planning Attorney
Once you have done all of the above, it is time to bring it all together with the benefit of professional assistance. You can share your objectives with a licensed attorney from our firm, and we can help you put a custom crafted plan in place that is ideal for you and your family.
We know that it can be somewhat disconcerting to discuss personal matters with an attorney they have just met. In fact, this is another one of the major reasons why a lot of people are unprepared.
All of our team members and attorneys chose this field because we care about our neighbors and their families. You will sense that genuine desire to make a difference as soon as you walk through our doors.
If you are ready to set up an appointment, we can be reached by phone at 802-879-7133. There is also a contact form on this site you can use to send us a message.
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