Sometimes, these changes are subtle or affect only a small number of cases, and thus are not necessarily included in a general informational discussion.
These are further reasons why general discussions can never substitute for concrete, individualized legal advice regarding your specific situation. Individuals who reside in, or who are subject to the laws of other states, should be aware that this Special Report is designed primarily to inform residents of New York State. The laws and rules governing programs for the care of the elderly and disabled may differ in your state.
This disclaimer is governed by the laws of the State of New York. This Special Report is Attorney Advertising. The content of this Special Report reflects the ideas, concepts, and thinking of David A. However, professional writing services were employed in the creation of this Special Report.
Contact Us Today! Good planning equals a more secure and comfortable future. About David A. How will you handle the enormous costs of long-term care for debilitating illness or injury? Search Submit. This means that to be safe, any financial planning should anticipate the possibility that the client will reach age 90 for a single person and age for a couple, unless their health and family history indicates that a shorter life expectancy is likely.
Websites and services exist which can help fine tune the life expectancy predictions for individual clients. I will leave the question of forecasting and planning for expenses and investment returns to the financial planners. My concern is how to protect seniors and their loved ones if bad things happen, such as a need for long-term care, a child needing help due to illness, the loss of a job, or divorce, or bad decisions about investments or re-marriage.
The illness and his care did not greatly deplete her savings because he was lucky enough to qualify for excellent care through the Veterans Administration. However, she went immediately from attending to her husband to pitching in and helping take care of her grandchildren. Her daughter had suddenly become a single parent when she found out that her husband had gambled away their savings and borrowed against their credit cards. The daughter separated from her husband and put her house on the market.
In addition to filling in with child care while her daughter was at work, my client was helping out financially and expecting to contribute to the down payment for a smaller townhouse for her daughter and grandchildren. My client was concerned about what she could afford, whether supporting her daughter would be fair to her other children, and what would happen to money she left her daughter if it came to her in the middle of a divorce or if her daughter died and the money went to her soon-to-be-ex husband.
Fortunately, planning tools are available to clients such as mine and to many others. This outline will describe these tools, which include long-term care insurance, homestead declarations, durable powers of attorney, irrevocable trusts and family protection trusts to protect against creditors, the cost of long-term care, divorce, and other risks of modern life. Basic Estate Planning A. Durable Powers of Attorney, Health Care Proxies, and HIPAA Releases Durable powers of attorney and health care proxies are well-known mechanisms for appointing an agent to act for us in the event we become incapacitated for any reason.
The durable power of attorney delegates the power to make financial and legal decisions and the health care proxy delegates the power to make health care decisions.
In both instances, the execution of either document does not take away our rights to make those decisions ourselves. For those who have not executed a durable power of attorney or a health care proxy, family members may have to seek the court appointment of a guardian if it becomes necessary to make financial, legal, or health care decisions.
This can be an expensive and cumbersome process, especially if family members are in disagreement. It also can interfere with taking necessary steps to protect assets, since most actions under guardianship will need court approval. The appointment of agents under durable powers of attorney and health care proxies are essential to asset protection planning.
Doing so can prevent family strife and save substantial time and money when we need someone to step in for us to make decisions. They are the first step in any estate planning and asset protection plan. While the health care proxy authorizes an agent to make health care decisions for an individual under Massachusetts law, state law does not trump federal law.
Under the federal Health Insurance Portability and Accountability Act of HIPAA , medical professionals may not release health care information to anyone, even a spouse or child, without a release. Some facilities and personnel are more rigid than others in following the letter of this law. The usual practice since enactment of this law has been to include HIPAA releases in durable powers of attorney and health care proxies. But this may not be enough.
First, the client may want to have different people in these roles. Second, she may want to give all family members access to information, but not give them all decision-making authority or responsibility. Third, she may be going into a hospital for a short procedure that would not rise to the level that would trigger a health care proxy, but during which she wants family members to communicate with her medical providers.
For all of these reasons, any modern estate plan needs to include a HIPAA release as well as a durable power of attorney and health care proxy. Revocable Trusts Revocable trusts serve two main purposes: management of assets and avoidance of probate. A trust is a document which sets out the guidelines for managing the property transferred to it. Every trust has one or more trustees who manage the trust property for one or more beneficiaries.
Typically, the grantor or creator of a revocable trust also serves as a trustee and as the principal beneficiary during his life.
The trust will provide for successor trustees in the event of his incapacity and successor beneficiaries in the event of his death. The appointment of a successor trustee can be a simpler way to provide for property management than a durable power of attorney and, for reasons that are difficult to explain, successor trustees are more often accepted by banks and investment firms, which often put up roadblocks to honoring durable powers of attorney.
Revocable trusts also are easier to tailor than durable powers of attorney, permitting the grantor to be very specific about the terms governing the use of the trust property. Finally, revocable trusts avoid probate. It is not as difficult or expensive a procedure as is often described, but it does entail some cost and some delay in the distribution of assets to heirs.
These costs and delays can be avoided through the use of a revocable trust. Joint Accounts Joint accounts at banks or investment firms can serve some of the same functions as durable powers of attorney and trusts.
Joint owners on accounts all have the right to make withdrawals and when one joint owner dies, the account continues to belong to the surviving joint owner or owners. As a result, many seniors use joint accounts as alternatives to powers of attorney, trusts and wills. There are several potential problems with this approach. First, all joint owners are equal owners of accounts. This means that they can legally withdraw money and use it for their own purposes.
It also means that the funds are subject to claims by the creditors of every joint owner in the event of a lawsuit, bankruptcy, or divorce. We have seen many seniors attempt to use joint accounts in this fashion—for instance, setting up three separate joint certificates of deposit for each of their three children. This can be a headache when trying to make sure all three accounts stay equal. The children may equal things out among themselves, but then again, they may not.
Homestead Declarations One of the easiest and cheapest asset protection tools available to seniors and anyone else who owns a home is a declaration of homestead. The homestead protects the equity from lawsuit or in bankruptcy. Typically, however, banks require that a homestead be removed before they will extend a mortgage or refinancing so that their claim will be protected.
Also, the homestead declaration does not survive the death of the homeowner and, thus, will not protect her estate from creditor claims. And it will not protect the proceeds of the sale of a home from claims by creditors. Nevertheless, the homestead declaration is relatively easy and inexpensive to prepare and file and should be recorded by every Massachusetts homeowner. Each registry of deeds will assist homeowners in completing and filing the declarations. Long-Term Care Planning A.
The Risk The greatest financial risk for older Americans is that they may need long-term care. Around-the-clock home care can cost even more.
About Care Homes Residential care homes are shared neighborhood homes for seniors who need a live-in caregiver to assist with activities of daily living, like dressing and bathing. More about care homes. Featured Cities for Care Homes. Veterans Resources VA benefits for long-term care, such as Aid and Attendance benefits, can help eligible veterans and their surviving spouses pay for senior care.
Guide to VA benefits for long-term care. More About Veterans Benefits. About Home Care Home care relies on trained aides to provide companionship and non-medical care for seniors living at home. More about home care. Featured Cities for Home Care.
About Independent Living Independent living facilities offer convenient, hassle-free living in a social environment for seniors who are active, healthy, and able to live on their own.
Complete guide to independent living. Featured Cities for Independent Living. Complete guide to memory care. Featured Cities for Memory Care. About Nursing Homes Nursing homes provide short-and long-term care for seniors who have physical or mental health conditions that require hour nursing and personal care.
Complete guide to nursing homes. Featured Cities for Nursing Homes. About Senior Apartments Senior apartments offer accessible, no-frills living for seniors who are generally active, healthy, and able to live on their own. Some of the most obvious include a scammer pretending to be a loved one in need of immediate financial assistance or scammers who attempt to gather bank account information by pretending that your loved one has won an award or prize.
Make sure that you're aware of the latest scams targeting seniors. You can know everything there is to know about all of the latest scams, but if you don't stay in touch with your loved one, you can't know if they've been targeted.
Make sure you talk to them on a regular basis and check in with their financial situation regularly. The more eyes there are on the money, the better. If one sibling or friend is responsible for all of the financial details, it's much easier for them to get away with financial abuse. Ensure that there are several of you watching so that there are always checks and balances in place to keep your loved one safe.
You should also set up eyes at your loved one's financial institutions and place safeguards in place, including contacts that will notify you if any suspicious activity occurs. You need a financial planner to help you with this one, but you can turn your savings into an annuity that pays your spouse or other loved one a set income each year from the savings you use to buy the annuity.
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