Unfortunately, it’s very common for people to decide to meet with an estate planning lawyer only after seeing the trouble caused after a loved one’s failure to create an estate plan. Having a plan in place ahead of time can make difficult situations much less painful for everyone involved.
So why is it that so many people still avoid creating an estate plan? Aside from the obviously morbid and sometimes unsettling discussions the process requires, many assume that estate planning is too time-consuming and/or expensive. However, setting up an estate plan isn’t quite as complicated as it may seem. Estate planning might be as simple as adding a new beneficiary to your insurance policies, and other assets, or drafting wills and trusts to ensure that all of your last wishes are carried out appropriately.
For those who don’t already have a plan in place, we’ve put together a short list of some of the reasons why asset protection planning is so crucial for you and your loved ones.
1. Protecting Beneficiaries:
Protecting minor beneficiaries is one of the most important reasons that people should consider establishing an estate plan. Every state has laws that require an appointed guardian or conservator to manage a minor’s needs until they become a legal adult at age 18 or 21, depending on the state in which the minor lives.
Folks often assume that their family members will handle their affairs appropriately according to wishes that have been verbally communicated. Unfortunately, it does not always work out that way in times of distress. Taking the time now to designate a trustee for your minor beneficiaries will help prevent disagreements among family members and unnecessary legal expenses after your death.
A comprehensive estate plan will also help protect any of your adult beneficiaries from making poor financial decisions and avoid problems with creditors or overbearing partners that you fear may waste the inheritance or take it in a divorce.
2. Reducing Estate Taxes:
Estate plans are also a great way for people to help curb the loss of value in one’s assets to state and/or federal inheritance or estate taxes. Married couples can reduce and even potentially eliminate estate taxes through basic financial planning strategies and by setting up trusts as a part of their wills. Additionally, an estate planning lawyer can advise both married couples and individuals on a variety of advanced estate planning techniques to minimize or completely eradicate a potentially hefty estate tax bill.
3. Avoiding Probate:
Avoiding probate is definitely one of the most common reasons why people decide to take the time to create a solid estate plan. Without one, the fates of your assets and your loved ones will most likely be decided by attorneys or state and/or federal officials that don’t know you or your family. Probate court is expensive, painfully public, and can delay the transfer of inheritance for several months or longer at a time when your heirs need it most. While most people have never even dealt with probate, several horror stories highlighted in the media has made it common knowledge that we want to avoid it at all costs.
Strong social connections are a vital part of life for most people but, as our estate planning attorneys have seen firsthand, as we age our relationships usually end up changing or disappearing altogether. Unfortunately, a lack of connections to friends, family, and the outside world can cause major problems for senior citizens.
A recently published NPR article highlights the concerns that geriatricians and social service providers across the country have about the impact of loneliness among the elderly. Their worries have real merit, as evidence from several studies show links between emotional isolation in senior citizens to physical inactivity and poor sleep, which can eventually lead to more serious health problems. Even worse, according to the AARP website, the health threat of loneliness and isolation in senior citizens is almost equivalent to smoking 15 cigarettes a day.
Indeed, the article states that studies show that elderly people who feel lonely are at greater risk of high blood pressure, poor immune function, memory loss, strokes, and heart disease. One such study from 2012 showed that 43 percent of people over 60 report feeling lonely. The study also found that senior citizens who felt lonely and isolated had a higher risk of death, even if they didn’t live alone or hadn’t been diagnosed with depression or Alzheimer’s.
Dr. Carla Perissinotto, a UCSF researcher and geriatrician who authored the study said, “If someone reports feeling lonely, they are more likely to lose their independence and are at greater risk of dying solely from being lonely.”
There are several hurdles in helping the elderly overcome loneliness, but one of the most challenging remains safe and reliable transportation options. Once seniors lose the ability to drive, affordable and accessible transportation can be very difficult to find, and those with fragile health conditions or are nervous to leave the house alone end up just staying inside.
Fortunately, there are more efforts being made to help build new social connections and reduce isolation for elderly Americans without them having to take on the risk and burden of traveling outside. These efforts include roommate matching services in various states, non-profit organizations that partner volunteers with senior citizens for visits and check-ins, and call-in hotlines to simply allow users to chat and share their feelings.
The AARP Foundation also recently launched a nationwide online network titled Connect2Affect that allows seniors to learn about the risks of isolation, do a loneliness self-assessment test, and reach out to peers that also feel disconnected.
Although there isn’t much research done about the effectiveness of the outreach programs yet, the AARP, the Gerontological Society of America, and other organizations are hoping to create more awareness and understanding of these issues in the meantime. As chief medical officer of AARP Services Dr. Charlotte Yeh said, “Loneliness is a huge issue we don’t talk enough about.”
As estate planning attorneys that work with senior citizens on a daily basis, we hope that this information can help you or your family member understand the risks of isolation and loneliness, as well as the benefits of building more social connections.
As estate planning attorneys, we know it can be very overwhelming for family members to care for their aging parents or spouse. Between dealing with health issues, grappling with medical insurance and complex financial concerns, it’s understandable that so many people struggle with finding the appropriate elder care. Luckily, there are several federal programs that have been developed to support family caregivers, and a recently published article on the AARP website details the government assistance options that are currently available.
Before researching these programs, we recommend starting a file with useful documents about your parent or spouse’s finances, work history, military background, and overall health. This information will be helpful for you to determine which federal programs you may be able to receive support from. The National Council on Aging’s BenefitsCheckUp program is also another great resource that will ask a few simple questions to help you find appropriate benefits.
Most senior citizens aged 65 or older already have or qualify for health coverage through Medicare, so it’s important for caregivers to understand how Medicare works. The Medicare website clarifies everything, from hospital stays to prescription drugs and medical insurance plans. You’ll also find sections that explain billing terms, which procedures are covered, finding caregiver and financial support services, and information on how to care for someone with a disability or chronic condition.
Medicaid is another health care program for low-income Americans, and is also the nation’s largest payer of nursing homes and independent living services. It is funded by both the federal government and states, so seniors must meet certain eligibility criteria in their state to be entitled to Medicaid benefits. If they do, several states have participant-directed care programs that allow family members to be paid as family caregivers.
If your parent has limited resources and is 65 or older or blind or disabled, they may also qualify for Supplemental Security Income, as well as Extra Help with prescription drug costs through Social Security. If you are a caregiver near retirement age, you may also consider claiming Social Security benefits. However, our estate planning attorneys suggest that you consider speaking to a financial professional before deciding to do so. As Sen. Susan Collins (R-Maine), chairman of the Senate Special Committee on Aging explains, deciding when to claim benefits is “the most important financial decision [most Americans] will ever make.”
The Department of Veteran Affairs also offers information on several veterans benefits and assistance programs to help low-income veterans and family caregivers. One such program, entitled Aid and Attendance, pays qualifying veterans and surviving spouses who need help with daily living activities like eating, dressing, and bathing. Veteran’s benefits planning services are also available through the Veteran-Directed Care program, and gives veterans of all ages the power to hire family members as caregivers and enjoy an at home long-term care plan.
Although in many cases these federal assistance programs do not provide financial aid, they offer a valuable resource for elderly Americans and their caregivers to connect to the information and services that can provide seniors with a higher quality of life.