Most estate planning lawyers also focus on elder law, because the two areas of specialization naturally cross over into one another. To look at estate planning first, it is important to take the right steps to make sure that your assets get into the hands of your loved ones in the ideal manner. There are many different ways to go about it, and this is why you should discuss all of your options with a licensed estate planning attorney.
People of relatively ordinary means often assume that a last will is the only estate planning document that they need. In the simplest of cases, a last will can suffice, but there are limitations and hassles involved when a last will is utilized. The main drawbacks stem from the fact that a last will must be admitted to probate, and the estate must be probated by the court before the heirs can receive their inheritances.
This is something that is not going to happen overnight. At minimum, the probate process will take eight or nine months to a year. There are complicated cases that can take considerably longer. Once again, the rightful heirs the estate cannot receive their inheritances while this process is underway, so the time lag is not going to be very welcome.
In addition to the time consumption, there will be diminished inheritances. A number of different expenses will typically accumulate during the probate process. These would include court costs, legal fees, the executor’s payment, appraisal charges, liquidation expenses, and other incidentals. All of these expenses can add up to consume a significant portion of the estate before it is transferred to the inheritors.
Another drawback of probate is the loss of privacy that goes along with it. Probate is a public proceeding, and as a result, probate records are available to anyone who wants to access them. If you are like most people, you have been discreet about the way that you conduct your personal finances. This desire for privacy is naturally going to extend to your estate planning decisions.
There is also the matter of estate challenges. The probate process allows an open window of opportunity for all parties who may want to contest the validity of a last will.
A will contest can drag on and on and extend the already lengthy process of probate.
An alternative to a last will that would facilitate asset transfers outside of probate is the document called a revocable living trust. All of the negatives that we looked at above would be avoided, and there would be added advantages. With a last will, you would be distributing lump sum inheritances to your loved ones.
Some people on your list may not be great money managers, and they could burn through their inheritances too quickly.
Things are different with a revocable living trust. You can provide spendthrift protections by instructing the trustee to distribute limited assets to the beneficiary or beneficiaries over an extended period of time. Though living trusts provide these benefits after you are gone, while you are living, you would maintain complete control of the assets in the trust.
There are other asset transfer vehicles that can be utilized when more complicated circumstances exist. Once again, this is why you should definitely consult with an estate planning attorney so that you can be sure that you are making the right choices.
Incapacity Planning and Legacy Preservation
It is possible that you will become unable to handle all of your own affairs late in your life. To account for this, you can empower decision-makers through the execution of durable powers of attorney. We are using the plural because you can execute one power of attorney for medical decision-making, and another one for financial matters.
If you have a living trust, you could empower a disability to trustee to act as the administrator in the event of your incapacitation. A living will could be added to state your wishes regarding the use of life-sustaining measures like artificial nutrition, respiration, and hydration.
If you were to become mentally and/or physically incapable of taking care of your own activities of daily living, you may require full-time residence in a nursing home. Medicare will not pay for this, and here in the Mount Clemens area, the median cost for a room in a nursing home is over $100,000 a year.
This is the most significant way that elder law is connected to estate planning. To be blunt, if you spend all of your money paying for long-term care, there will be nothing left to pass along to your loved ones. The good news is that Medicaid will pay for long-term care, and elder law attorneys help clients devise strategies that lead to Medicaid eligibility.
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