The 4 Most Important Estate Planning Steps
Most of us don't want to confront our own mortality or would prefer to hold off thinking about it until we reach a certain age or are even confronted by a long-term health issue. But neglecting to prioritize or complete your Estate Plan ultimately means you’re at risk of your family having to endure expensive and stressful guardianship and probate court proceedings. Because we want you and your family to be as prepared as possible, we've written about the four most important estate planning steps below.
4 Most Important Estate Planning Steps
1) Understand Why you Need an Estate Plan and What it Means for you
Aging and ultimately dying without an estate plan can create prolonged and costly results. Without assistance from properly drafted Advanced Directives, Will, and Revocable Trust your family will lack the legal ability and guidance necessary to assist with health care decision-making, asset protection, and the ultimate distribution of your estate. Ultimately, the court can decide who makes the decisions and who will inherit if there is no estate plan in place. These unnecessary court proceedings can generate large legal fees and can take months to resolve.
Most people believe that an estate plan is just having a will, but a successful estate plan is much more than that.
2) Plan in Advance for your Long-Term Care
Failure to plan in advance for long-term care or incapacity issues is one of the most common estate planning mistakes. At a minimum, everyone should have a basic estate plan that includes these four documents:
- A will, which determines how your assets are distributed after your death
- Advanced directives such as a power of attorney, which identifies the individual you would like to make financial decisions on your behalf should you become too ill or incapacitated
- A health care proxy, which identifies the person you want to make health care decisions for you in the event you are unable to do so for yourself
- A living will, which outlines your preferences for end-of-life medical care
In addition, it is important to plan for long-term care and determine how you will pay for it. As people live longer, it is estimated that more than half of those over 65 will need some form of long-term care assistance. The annual costs for nursing home care can range from $140,000 to $240,000 and in-home health care can range from $20 to $35 per hour.
What many people misunderstand is that their health insurance and Medicare will not cover the cost of long-term care, whether at home, in an assisted living facility, or in a nursing home. Fortunately, there are advanced legal strategies that if put in place before the care is needed will allow you to protect your assets and provide you with options to pay for the care.
Once you have created an estate plan, you'll want to review and update it every so often.
3) Revisit Your Plan and Your Beneficiaries Again & Again
Estate planning isn’t a “set it and forget it” legal matter. An estate plan created ten to twenty years ago likely doesn't reflect your current needs. It is important to revisit your estate plan every 3-5 years and make sure it is updated to address changes in the law, major life events that have occurred such as a marriage, divorce, birth of a child/grandchild, death of a family member or beneficiary, change in net wealth or relocation to a new state.
Additionally, your legal documents should be drafted to accommodate potential future life events of your beneficiaries that could jeopardize or negate your wishes. For example, inheritances can be drafted to include modifications in the event one of your beneficiaries goes through a divorce, addiction or financial problems, or modified to provide safeguards for disabled children or grandchildren through supplemental needs trusts.
Estate plans should be built to meet the specific needs and wishes of each family. Hiring an experienced elder law attorney may be the right step in protecting your assets and receiving any benefits you or your loved one may be entitled to.
4) Work With an Experienced Elder Law Attorney
An elder law attorney provides support to seniors and their families by providing valuable information and resources that will impact their access to health care benefits now, and in the future. Because elder law attorneys work hand-in-hand with seniors, they understand their needs and desires while also offering guidance and advocacy through the complex maze of long-term care issues. Devastating and costly mistakes can easily occur when using an online estate planning form or working with an inexperienced attorney. By working with an experienced elder law attorney, you can create a successful estate plan that uses these strategic and advanced legal strategies that communicate your wishes and safeguard your assets without the risks of probate or loss of inheritance due to beneficiary issues, taxation or out-of-pocket costs for long-term care.
To find out more about planning your estate, contact Tully Law Group at 631-424-2800 to set up a free consultation.