Estate Planning

How to Plan the Estate for an Unmarried Couple

As a result of record levels of divorces and widows among older Americans, many new partnerships have emerged. The US Census Bureau reports that more than half of all older adults have only married once, opting to stay legally single in their future relationships. Cohabitating can have unforeseen and unintended consequences without a legally recognized civil union, marriage, or domestic partnership certificate. 

For instance, your assets are not mutually inheritable without careful estate planning that includes a “living together contract.” This contract type can be specific and, as an example, cover one transaction, such as purchasing a new home. The contract can also encompass every aspect of your property and finances, including asset distribution in the event of incapacitation, death, or breakup.

Many believe they can address domestic decision-making, such as permissions for owning pets, entertaining guests, even including minor tasks like who will do the dishes in a casual contract, but it is unlikely to be enforced by the courts. If you’re an unmarried couple, it is safer to draw up a comprehensive agreement, enforceable by the courts, that will see you through your lives together. However, you won’t want to co-mingle personal and financial clauses in a single contract as it may render the agreement unenforceable, negating the importance of the contract’s financial clauses. 

For estate planning purposes, a comprehensive living together agreement includes all assets and property owned before the relationship and another for any acquisitions during the relationship. The property and asset division is much like a prenuptial agreement. Remember, joint obligations to a mortgage company or a landlord do not create a contractual relationship or entitle you to a property settlement in the event of death or the parting of ways. With non-marital agreements, each partner should also have a valid will for the state in which they live.

A living together contract often includes rules regarding gifts received, living expenses, property purchases, inheritable rights, and a method for dispute resolution that may arise later, typically through mediation. Having a living together agreement in writing can avoid a host of future legal issues and can be developed in the spirit of two fair-minded individuals clarifying the understanding of a partnership.

Many older Americans prefer not to remarry as it can have consequences to social security income, pension benefit awards, alimony (as part of a divorce settlement), tax consequences, and rights of survivorship. A new spouse’s income may disqualify a child for college financial aid or, in the case of a disabled child, impact the eligibility for government assistance programs.

Because many seniors and near seniors live together in non-legally recognized ways, estate planning can create challenges when partners want to provide for the other after their death.

A legally binding living together contract must work in concert with existing plans for already named heirs. A qualified estate planning attorney can draw up this contract and make necessary changes to current estate plans to avoid future legal conflicts. Like all estate planning documents, the regular review of its content to account for major life changes or preferences is crucial. If you plan to make substantive changes, it is best to be open with your partner and any adult children.

Avoid the possibility of personal and family conflict through open communication channels and mutual understanding. A newer, unmarried partner of a beloved parent may provoke suspicion of intent by adult children. Cohabitating is becoming more popular; however, as states adjudicate separations and inheritance, there is much to consider about planning property and asset control. To protect and provide for your partner and your adult children, consult an estate planning attorney about a living together contract in conjunction with your estate plan to ensure your documents reflect your wishes and are legally enforceable. We hope you found this article helpful. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.

Estate Planning

Getting to Know Creditor Rights and Probate

By avoiding probate through legal methods, you can save taxes, keep your estate out of public view, and avoid needing court approval every step of the way. It can save you time, frustration, and in many cases, significant attorney and court fees. Your personal representative sometimes referred to as an executor, must formally notify all your creditors of your death. This action is one of the first steps in the probate process. Often this is as simple as placing a notice of death in a local newspaper(s) to which creditors respond and file a timely claim to the probate court for estate payment of the said claim.

Outstanding debts typically include credit card payments, mortgage, car payments, insurance, real estate taxes, utility bills, medical and funeral expenses, and other legal debts incurred but not yet paid. The probate timeline for creditors to file a claim varies by state. On average, between three to six months is a creditor’s window of opportunity to submit formal claims to your estate for payment. If there is no contest over the debt, the personal representative will pay the outstanding bill with estate funds; the creditor will receive payment in full, which completes the claim.

Personal representatives, beware. Do not distribute assets to beneficiaries before the balance of the estate’s taxes and all outstanding debts are completely paid or dismissed by the probate court. It is the responsibility of the personal representative to cover all estate expenses, and you may become personally liable for deficiencies in estate debt payments unless beneficiaries return their portions of inheritance to cover those outstanding debts. If you feel you must make a partial distribution to heirs, withhold enough monies to cover all estimated expenses.

If the decedent’s property does not go through the probate process, creditors’ claims remain pursuable for a longer time. Partly this is because there is no legal requirement to notify creditors of a person’s death. By the time a creditor may learn of the death, the debt might be so small they are unwilling to pursue its collection. A creditor may find a tax write-off of bad debt more advantageous than chasing down repayment that is not cost-beneficial.

In other cases, an estate may not have liquid assets yet hold real property with enough value to cover the outstanding debt claim if sold. Valuable inheritable property can be lost to a forced sale to cover creditor claims in probate court. A creditor forcing this type of sale drags out probate proceedings, incurring additional costs. Secured creditors receive priority over unsecured creditors. Banks are the primary secured creditor with which a personal representative may have to contend.

Suppose a person dies with substantial debt and there are limited assets to cover these debts. In that case, the estate is deemed insolvent, and there is a generally accepted prioritization of debt payment by all states. A personal representative should always pay debts in order of a state’s recognized priority list. Otherwise, debts that may be dismissible, pro-rated, or forgiven may receive payment, while secured debts never “go away.” It is essential to understand the priority order for estate debts. Note that these are generalities, and some state laws may prioritize these categories differently.

  1. Administrative costs – Common costs include court fees, filing fees, notice costs, attorney’s fees, and the administrator’s commission.
  2. Family exemptions – Many states will provide for payments helping family members handle their living expenses during the estate’s probate. This family exemption usually gets high priority to lessen financial stress as a family mourns the loss of their loved one.
  3. Funeral and burial costs – These expenses address funeral and burial costs by state law. Costs of cremation, interment, urns, markers, and associated funerary service costs are permissible as part of funeral and burial costs.
  4. Government debts – Income taxes, property taxes, and estate taxes take priority over other debt obligations.
  5. Final medical bills – The decedent’s final sickness or injury receive priority over other unsecured debts. Some hospitals will reduce final medical bills if the newly negotiated amount is paid promptly and in full.
  6. All other claims –  Usually, states do not prioritize these other more general unsecured debts. Some cases permit debt payment based on the filing date of claims, and other times debts may be pro-rated.

Assets such as retirement accounts and insurance proceeds with a designated beneficiary receive different treatment and provide more protection from creditors. The same holds for an irrevocable trust which upon death also provides protection from creditors. A beneficiary designation and specific trust entity can help to shield an estate with a heavy debt burden.

When someone dies, their estate assets must be secured and eventually distributed according to the existing Will or state intestate laws. Another vital function of the estate is for the personal representative to ensure the decedent’s genuine debt obligations receive payment. When an estate has sufficient assets to pay all outstanding debts, payment can occur in any order. If the estate leans to insolvency, the personal representative should withhold asset distribution to heirs until the probate court approves the debt fulfillment priorities. We hope you found this article helpful. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.

Estate Planning

A Lifetime Money Management System for Special Needs Children

Estate planning presents unique challenges when it comes to special needs children. Optimizing your estate to use, enhance, and enrich assets for your special needs child while maintaining their enrollment in public benefits programs requires careful planning. An estate planning attorney can prepare a special needs trust to accomplish these and other goals you have for your child.

A special needs trust can meet strict financial eligibility rules for means-tested assistance programs because the assets held in the trust are not directly available to the child. A trustee provides benefits to the child via the trust. Parents select this trustee with great care because they will act as the child’s money manager, ensuring proper financial supervision after the parents die. A letter of intent is also a powerful tool to guide the trustee to make decisions that best benefit the child’s unique needs.

In most cases, your special needs child will benefit by selecting a non-family member who is independent to act as your special needs trustee. The range of options includes:

  • A parent, sibling, or another relative, which can be risky,
  • An estate planning attorney,
  • A financial institution or a trust company,
  • A non-profit organization, particularly one with special needs experience, or
  • Co-trustees, such as a trust company, acting in conjunction with a family member.

Each option has advantages and disadvantages that require close counsel with your estate planning attorney or financial advisor before selecting your trustee.

The creation of your special needs trust can happen while you are living or at the time of your death. A last will and testament can incorporate creating the trust, known as a testamentary trust. Parents often set up the trust while alive, known as a living trust (inter vivos trust). The living trust has advantages, including the avoidance of probate, the permission for other family members to make trust contributions (usually grandparents), and the opportunity for a co-trustee to experience what it is like to administer the trust.

Whether or not your trust is revocable or irrevocable affects tax consequences. Generally, you’ll want to choose a revocable trust if the goal is to maintain maximum control over the trust and income tax considerations aren’t a concern. Establish an irrevocable trust when there are concerns regarding income tax consequences, particularly if the trust funds exceed one million dollars. In this instance, both federal estate and gift taxes may apply to the trust.

While there is much to consider and decide, the crucial step to providing for your special needs child is to make it legal. Verbally telling your family how to care for your child is insufficient. In the absence of a will, testamentary trust, or living trust, the state in which you live will determine the outcomes of your estate’s distribution. This situation is not a viable option for a special needs child or any of your children.

Receiving proper legal guidance to implement your estate plan using appropriate trusts is crucial to maintaining a healthy lifestyle for your special needs child. Do not attempt to craft these legal documents on your own, use existing forms, or copy some internet template. Each special needs child requires careful considerations that are unique to them and the challenges they face moving forward. With so much at stake, a qualified estate planning attorney with expertise in special needs planning will best suit your wishes and the child’s needs. Protecting public benefits such as Supplemental Security Income (SSI) and Medicaid and establishing a special needs trust through your estate planning can best achieve these goals. We hope you found this article helpful. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.

Estate Planning

Inheritance Income Can Be Provided by Charitable Trusts

An irrevocable charitable trust provides income to heirs while benefiting you or a charity. If you are philanthropically minded with nonessential assets like stocks or real estate, a charitable trust can offer many financial advantages for all those involved. Once in place, a charitable trust is irrevocable even if you experience a personal or business financial loss. There are two primary charitable trust types:

Charitable Lead Trust (CLT) – This trust is designed to distribute a portion of its proceeds to charity for which you receive a tax deduction equal to the payments. The remainder of the principal is distributed among your beneficiaries.

Charitable Remainder Trust (CRT) – This trust grants income to a designated individual by distributing non-income-producing assets first placed in the trust. A charitable donations tax deduction applies to the remaining assets earmarked for the charity. The chosen charity receives the remaining assets at the end of the trust’s term or upon your death.

Each trust type comes with many options to consider and strategies for maximizing its benefits. Both trust types do not require you to choose your charity beneficiary. Instead, you create a donor-advised fund that directs payments from either trust type to your chosen charities. This tactic allows flexibility to change your mind about an existing charity or add a new one.

For income-producing purposes to heirs, a charitable remainder trust provides options from the sale of your non-income-producing assets. For example, purchasing a life insurance policy can have premiums paid by the charitable remainder trust while using residual funds to support philanthropic intentions.

Charitable Remainder Trusts are also known as a split-interest trusts, making payments from income first to the beneficiary or beneficiaries in a set amount with the remaining income supporting the organization, which is the opposite of a Charitable Lead Trust. Often the grantor is the primary beneficiary, with contingent beneficiaries named after the grantor’s death. 

The two ways to receive trust payments in a Charitable Remainder Trust are either a fixed annuity or a percent of trust assets known as a unitrust

In a Charitable Remainder Annuity Trust, it is not permissible to change the annuity amount once the trust is created, so it is best to over-fund rather than not have enough. An annuity trust provides a fixed dollar amount each year even if the trust’s income is less than anticipated.

A Charitable Remainder Unitrust allows receipt of a fixed percentage of the trust’s assets each year. The trust’s value receives an annual appraisal which determines the dollar amount of the set percentage for distribution. This funding method ties income to the trust’s success, providing more in good years and less in years when assets are underperforming. If trust payments are not a significant source of income for beneficiaries, this can be a good option. The IRS requires a minimum five percent distribution of the trust valuation annually.

Work with an estate attorney to design a charitable trust. They can help you determine which charitable trust type is best for you and what assets to place in the trust. An estate planning attorney will help you identify beneficiaries and payment strategies, as well as the value of your tax deduction. Once you draw up the trust document, the assets will be moved to fund the charitable trust unless you create the trust as part of your will.

The charity you seek to benefit may have preferences about how and when to donate. Speak with the organization before creating an irrevocable charitable trust. This trust type can lessen your income, estate, and capital gains taxes by making 501(c)(3) donations to a charity and providing a steady income to heirs. Creating a charitable trust is a practical, multipronged approach to leaving your legacy, permitting the allocation of money for both a charity and your beneficiaries while realizing specific tax advantages. We hope you found this article helpful. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.

Estate Planning, Uncategorized

Living Trusts Have Many Benefits for Seniors

It’s an unfortunate fact that seniors are prime targets for financial abuse and scams. Sadly, the elderly are often taken advantage of by strangers — and sometimes even their own family members. That’s why it’s important that planning is in place to help seniors protect themselves and their assets.

As we age, it can become increasingly difficult to manage our assets. Most of us will, at some point, need assistance with these details to help ensure that our financial and other assets aren’t depleted. If you or an aging loved one are looking for ways to safeguard assets, a Living Trust is often the best way to do so. Living Trusts allow seniors to rest assured that their finances and assets are managed by a trusted person.

What is a Living Trust?

Living Trusts help protect and manage the assets of those who cannot do so themselves due to age, illness, or disability. Many seniors assume that a will is the only protection they need. However, trusts are designed to safeguard the assets of the living, while wills only outline what happens to a person’s assets when the pass away. Furthermore, wills must go before a probate court and taxes must be paid on inheritances, while Living Trusts allow beneficiaries to avoid probate after their loved one’s passing.

To establish a Living Trust the owner, or grantor, places assets within the trust. The grantor then appoints a trustee to manage it and names beneficiaries to receive the assets of the trust when the time comes.

There are different types of Living Trusts. Let’s take a look at each and the ways these trusts can benefit seniors.

Testamentary Trust

A Testamentary Trust protects an elderly person’s assets when a spouse dies. Assets of the deceased are transferred into a trust — enabling the appointed trustee to make all financial decisions regarding those assets. This helps a surviving spouse by protecting him or her from fraud or mismanagement of assets. Trustees can help the surviving senior generate income from remaining assets via sales or investments and take advantage of tax benefits.

Revocable Living Trusts

A Revocable Living Trust safeguards seniors by making it more difficult for non-trustee family members to mismanage money or assets. The grantor (senior) can amend or revoke the trust at his or her own discretion without the consent of the beneficiary. This type of trust allows the grantor to stay in control of assets by either serving as a trustee or appointing one. In this case, the grantor, serving as trustee and beneficiary of the trust, appoints a successor in the event he or she becomes incapacitated or dies. This appointed person is then responsible for the disposal of the trust’s assets.

Irrevocable Living Trusts

An Irrevocable Living Trust is one that cannot be changed or revoked by the trustmaker. This means that the grantor/trustmaker gives up his or her rights to the assets once they are transferred. Seniors over 65 who are eligible for Medicaid often choose to transfer assets into an Irrevocable Living Trust to avoid having to dispose of assets in order to remain eligible for Medicaid coverage or long-term care benefits.  Once assets are in an irrevocable trust, they cannot be counted for Medicaid eligibility purposes, but there could be a penalty for transferring assets to an irrevocable trust.

An elder law attorney can assist in determining the best way to set up this type of trust and how to best transfer assets based on Medicaid stipulations. An Irrevocable Living Trust can provide income for seniors and their spouses. It also protects their property and other assets from being seized to pay for medical costs, without impacting Medicaid eligibility. This type of trust can also remain in place for a surviving spouse after the grantor’s death.

The sooner assets are placed in an Irrevocable Living Trust the better, as a penalty will be assessed by Medicaid during the first 5 years the trust is in existence (if Medicaid is required during that time).

Ultimately, Living Trusts give seniors more control over their assets than a will, allowing them to set parameters and stipulations and appoint a trusted advisor to help them make decisions. If you or your loved one would like more information about setting up a Living Trust, we can help. We hope you found this article helpful. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.

Elder Law, Estate Planning

A Power of Attorney Allows Another Person to Act On Your Behalf

While he awaited the closing on his Texas house, Michael was enjoying his time in Florida. Unfortunately, he took a bad fall and ended up in a Florida hospital. He had his Texas powers of attorney, but the problem was that they were “springing” powers. They were only effective if Michael lost capacity. Michael’s capacity was fine, it’s just that he wasn’t in Texas when an offer on the house came through.

A power of attorney is a legal document that allows someone else to stand in your shoes, to speak, and act on your behalf. A document that is effective immediately – even if you’re perfectly capable of managing your own affairs at the time – is the better choice. Michael should have designated a Texas agent with immediate powers, in a document that was comprehensive enough to authorize the agent to conduct real-estate transactions on Michael’s behalf.

A document like Michael’s, however, that “springs” into life only on incapacity, would not serve him as he needed. And even if Michael had lost capacity, a doctor would still have to certify that he could no longer make his own decisions. This would cause delay and uncertainty when swift action was required instead.

Many are concerned that if they have a power of attorney that is immediately effective, their agent will abuse privileges that aren’t even needed at the time. This is a sign, however, that they don’t trust that person. And after all, it’s better to be alert and aware if such a thing should happen, instead of discovering the problem only when you’ve lost capacity and it’s too late.

An experienced attorney can help you find your way through many such pitfalls. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact us. Please contact our Reno office by calling us at (775) 853-5700.

Estate Planning

The Procedure for Settling an Estate Without a Will

Caring.com reports, despite the COVID-19 pandemic, the percentages of older Americans without a will have remained the same. Remarkably, younger adults with a will show an increase of sixty-three percent compared to pre-pandemic times. This 18 – 34 year old demographic is now sixteen percent more likely to have a will than those 35 – 54 years old. These younger adults typically cite COVID-19 as the impetus to start taking estate planning seriously.

caring.com

Dying without a will (dying intestate) or dying with an invalid will cause logistic problems, becoming financially and emotionally draining on the loved ones you have left behind. In the absence of a will to name an executor, the state will provide a list of people eligible to fill the role. Should probate court be necessary, the court will make a selection based on this list.

Who Will Settle My Estate without a Will?

Typically, states make a surviving spouse or registered domestic partner their first choice. If there is no spouse or partner, then adult children usually follow next on that priority list, then parents or other closest family members related by blood. Further next of kin includes grandparents, grandchildren, aunts and uncles, nieces, and nephews.

There are rare instances where the state can find no next of kin. In this instance, your assets will wind up in the state’s coffers. Suppose your heirs are more distant next of kin. In that case, they may require an affidavit notarizing them to be heirs to the estate property and further documentation requirements to transfer ownership of assets. State intestacy laws encourage reasonable efforts by probate authorities to identify heirs in the absence of a valid will or no will at all.

In all cases, without a will, there must be a petition to the court to appoint a personal representative to settle your debts, final taxes, minor guardianship of children, and distribution of your personal property. In the absence of any legal heirs, the law permits the court to appoint any legally competent person.

What Relationships Are Acceptable for Representation without a Will?

Each state has relationship qualification requirements of intestate succession that may not be as obvious as you think. For instance:

  • Surviving Spouse – must have been legally married to the decedent at the time of death.
  • Legal separation or pending divorce – a judge will determine whether or not the surviving member of the couple is a surviving spouse.
  • Common-law marriage – Very few states recognize common-law marriages, and each state has its own sets of circumstances for approval.
  • Same-sex couples – Same-sex marriage is now legal in all 50 states and has the same rights and responsibilities as all legally married couples. Same-sex registered domestic partners or civil union partners recognition is state law dependent.
  • Adopted children – in all states, legally adopted children inherit from their adoptive parents in the same manner as biological children.
  • Stepchildren – Most states will not include stepchildren who were never legally adopted.
  • Foster children – These children will not usually inherit as foster parenting is not adoption.
  • Children adopted by an unrelated family or adult – Most states recognize that placing a child up for adoption severs the legal tie between them and their birth parents. Under intestate succession laws, neither the child can inherit from the parents nor the parents from the child.
  • Children adopted by a stepparent – Depending on state law, a child adopted by a stepparent may still inherit from their biological parents.
  • Children born after the parent’s death – Any child conceived before a parent’s death but born after (posthumous child) inherits just as children born during the parent’s life.
  • Children born out of wedlock – These children always inherit from their birth mother unless an unrelated family adopts them. To inherit from the father, the child usually must show some paternal proof.

Inheriting under intestate succession laws may require an heir to live a certain amount of time longer than the decedent. Depending on the state, this can be 120 hours, five days, or merely having outlived the decedent for any period of time qualifies them as an heir. If an heir dies, close relatives such as the deceased person’s child may inherit all or some for what their parent would have received. Known as the “right of representation,” these children or grandchildren may be eligible as heirs though it can be complicated to establish depending on state law.

What Could Happen to My Minor Children Without a Will?

If you have minor children having a valid will allow you to name a personal guardian(s). In the absence of a will, a judge will have to appoint an interim guardian until enough information about the situation is gathered to determine the best decision for the welfare of the children.

Depending on your circumstances, a will can be a straightforward document that removes the onus on your surviving loved ones to handle your responsibilities. If you have minor children or substantial assets, your will may be part of a larger estate plan.

Don’t let the state decide who inherits your money and your property. We would be happy to help you figure out a plan that works for you. Please contact our Reno office by calling us at (775) 853-5700.

Elder Law, Estate Planning, Healthcare

Estate Planning: Talking to Your Parents

One of the most challenging topics to discuss with our parents is estate planning. Even broaching the subject can seem daunting. Despite the challenging nature of this subject, it is one of the most important conversations we can have with our parents. Having a thorough estate plan in place can mitigate confusion and anxiety at the end of one’s life and avoid unnecessary legal fees, taxes, and delays in the dispersion of assets.

The first time our estate plans are likely to come into play will be near the end of our lives and involve decisions concerning our health and finances. These can include what type of medical treatment we want, how the elderly will pay for it, how long, or even if we want to be kept on a life support system. Financial decisions can include reducing taxes when our assets are transferred to our heirs.

After we have passed, our estate plans dictate funeral service arrangements, what will happen to our remains, and how our assets will be distributed. Some people want to leave clear instructions while others leave the decision-making up to relatives or close friends. The most important thing to remember is to choose people who are best suited for the tasks we ask them to carry out.

Preparing for your estate planning conversation with your parents will help you broach the subject and make the most of it. Here are some things to consider.

  • Being familiar with the primary estate plan documents and what they are for will allow you to help them create an outline of how they want their estate plan to function. One way to become familiar with the documents is to create an estate plan for yourself. Having your estate plan could also be an excellent way to encourage your parents to create theirs.
  • Involving other family members, such as your siblings, can create a more collaborative environment and help move the process forward more quickly.
  • Starting the estate planning conversation soon is key for ensuring the best plan is in place. If you are unsure how to get the conversation going, you may want to schedule an initial consultation with an estate planning attorney for your parents.

When you are ready to initiate the conversation with your parents, it may help to start by asking them if they already have any estate planning documents, then proceed in the order situations may arise. Some questions to consider are:

  • Do you have any estate plan documents? If so, where do you keep them?
  • Who do you want to make health care decisions for you? Do you want one person to serve as your health care agent at a time, or do you want two or more people to serve simultaneously?
  • What are your medical and end-of-life preferences?
  • After your death, how do you want your tangible and intangible assets distributed? Who do you want to oversee the distribution of your assets?

Since estate planning is a dynamic process and needs to evolve as conditions change, the estate planning conversation will need to be revisited if, for example, people named in the plan pass away or if a property is sold. Though talking about and creating estate plans can seem daunting, it is helpful to emphasize that one of the most valuable aspects of a thoughtful estate plan is that it gives all involved peace of mind as they move through the end of their loved one’s life.

This article offers a summary of aspects of estate planning law. It is not legal advice, and it does not create an attorney-client relationship. For legal advice, you should contact an attorney. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact us. Please contact our Reno office by calling us at (775) 853-5700.

Elder Law, Estate Planning

How Can an Elder Law Attorney Help You?

With the aging Baby Boomer generation and the increased number of international migrants, the senior population of the United States is growing rapidly. Although the US average life expectancy has seen a slight three-year decline, many Americans, men, and women live well into their 80s, 90s, and beyond. An elder law attorney works with seniors, taking a holistic approach to the legal issues people commonly face as they age. These include matters of housing, physical and financial health, estate planning, and more. There are as many issues as there are seniors, as life circumstances are different for everyone. An attorney who specializes in the host of the problems senior citizens face can be a wise investment.

Whether you have a lucrative business and many assets, or a small home with a modest bank account, estate planning can be overwhelming. However, having your affairs in order is a final gift to your family. An estate plan is much more than creating your will though it is generally the first step. There are multiple types of wills, and while most people think of their last will and testament, there are also living wills, joint wills, pour-over wills that work in conjunction with trusts, and more. The type of will(s) you need to best control what happens to you and your assets throughout your life, and your death, are best explained by an elder law attorney. An elder law attorney specializing in estate planning helps you navigate wills, trusts, guardianships, advance medical directives, and the financial management of life insurance policies, annuities, IRAs, and 401ks. All of these can have tax implications for managing and settling your estate.

Government programs on federal and state levels may be available to seniors. Individual qualifications and the application processes can be complicated and confusing, especially when enrolling for the first time. An elder law attorney can help you understand Medicare Part A (hospital, skilled nursing, some home health, and hospice), Part B (medical insurance covering certain services by doctors, preventative services, medical supplies, and outpatient care). Medicare Part C (Medicare Advantage Plans, a private company insurance plan you purchase that dovetails with Medicare) and Part D (covering prescription drugs). If you are a veteran, programs are available through the Veteran’s Administration and can provide you with further and more specialized assistance because of your military service. Veteran program qualifications can be highly complex, so look for an elder law attorney who is accredited by the Veterans Administration.

Medicaid provides health care benefits for low resource and low-income adults, pregnant women, elderly adults, children, and people with disabilities. If you qualify, you may receive both Medicare and Medicaid benefits. Medicaid qualifiers have their healthcare premiums and out-of-pocket medical expenses covered through the program. Medicaid also includes custodial care and addresses long-term care expenses if you begin living in a nursing home. An elder law attorney understands how Medicare and Medicaid can work to your best advantage.

Social Security benefit amounts change depending on the age range you choose to receive your benefit. You can currently apply and qualify for your benefits at 61 and nine months of age; however, the full retirement age for social security is 67, and cashing in early has long-term consequences for your payout. An elder law attorney can help you determine the best age to receive your social security benefits based on your health and financial situation. Suppose you also receive disability benefits before full retirement age or become disabled at that age. In that case, an elder law attorney can ensure you receive the proper benefits based on your condition. 

Long-term care is known to be an expensive proposition whether you are trying to afford long-term care insurance upfront or pay for it out of pocket if you require it in the future. Not addressing the issue of long-term care is a big gamble to your financial well-being. Morningstar reports that 52 percent of Americans turning age 65 will need some long-term care services in their lifetime. An elder law attorney can help you understand policy premiums and how they can increase if you purchase long-term care insurance. They can also guide you through Medicaid planning or estate planning that can help you qualify for the best financial arrangements for long-term care. Sometimes, it is beneficial to spend down your estate to be eligible for Medicaid, and your elder law attorney will know what is required by law to do it properly.

Other issues, such as employment discrimination, elder abuse, elder fraud, even grandparent visitation rights, fall under an elder law attorney’s scope. An attorney who practices elder law has a more comprehensive list of capabilities to help you through your senior years than those attorneys without expertise in this area.

We focus on elder law.  We would be honored to speak to you about how we can help you come up with a comprehensive legal plan covering many of the topics above so you can enjoy your senior years without unnecessary worry. Please contact our Reno office by calling us at (775) 853-5700. We look forward to hearing from you.

Elder Law, Estate Planning

A Good Estate Plan Should Include the Following Five Items

Everyone should plan their estate, but as we age, it becomes even more necessary to do so. Many people avoid estate planning because they do not want to think about the end of life, failing health, or disability. Others believe that an estate plan is only for rich people. However, an estate plan is helpful for the senior adult and their families regardless of overall wealth.

The estate is all the property owned both individually and jointly, including bank accounts, real estate, jewelry, etc., and what is owed. Without an estate plan, it is very difficult to carry out a person’s wishes and can bring on a long, drawn-out probate that can be very expensive for the family. If an estate plan is in place, it can provide peace of mind for the senior adult and their family, as well as protection for the wishes of the senior.

Below are some basic guidelines for what should be included in an estate plan.

1. Will.  A will provides for an executor of the estate, who will take care of managing the estate, paying debts, and distributing property as specified. The distribution of assets can be outlined in the will. This can be as broad or detailed as a person wishes. In a will, beneficiaries and guardians for minor children should be assigned. It may not seem necessary to discuss minor children when discussing seniors and estate planning, but with the rise of grandparents raising grandchildren, this may indeed be an important part of the will. A senior adult can spell out, in the will, how they want their funeral and burial to be carried out as well.

2. Living Will. A living will outline a senior’s wishes for end-of-life medical care. It can include, in as much detail as the senior wishes, what medical treatments the senior would or would not like to have in specific situations. A living will takes the stress of making those decisions off of family members and helps to keep peace in families during times that can be difficult and emotional.

3. Healthcare Power of Attorney. A healthcare power of attorney is also a key part of an estate plan. This legal document provides for someone to legally make healthcare decisions for a senior adult. A durable power of attorney will remain in effect for the senior if the senior becomes unable to make decisions.

4. Financial Power of Attorney. A financial power of attorney names an agent who has the power to act in the place of the senior adult for matters relating to finances. The durable financial power of attorney stays in effect if the senior adult becomes unable to handle their affairs. By having a financial power of attorney in place, the stress and expense of a guardianship can be avoided, and the senior has the final say in who will make decisions relating to finances.

5. Trust. Setting up a trust can be beneficial for the distribution of specific assets or pieces of property. The benefit of a trust is that it does not go through probate, as compared to a will. Property is still distributed at the death of the trustmaker, but it is done without the need of a court.  This also allows for privacy of the trustmaker, where with a will and a probate, all of the deceased person’s assets and the terms of their will are made public.

Having an estate plan is necessary if you or your senior loved one wishes to have a say in what happens at the end of life and with assets after death. Consulting and planning with an elder law attorney will help to ensure that all options are explored and the best possible solution is utilized. The elder law attorney can walk you through all of the necessary parts of the estate plan, provide an explanation, and prepare the paperwork. Elder law attorneys will help take the guesswork out of estate planning.

If you have any questions about something you have read or would like additional information, please feel free to contact our Reno office by calling us at (775) 853-5700.