Senior Adults Cope with a Variety of Issues – Let Us Help
Estate planning is light on leveraging your assets and income to address the cost of living with chronic illness and disability, and heavy on old school legal solutions for transfer of assets, minimizing taxes, and controlling or protecting inheritances. Probate of estates created by wills and administration of trusts are about as old school, post mortem estate planning as you can get. Drafting the corresponding old school trusts, whether revocable or irrevocable, or even a will, whether “simple” or “complex”, is again very old school estate planning lawyering.
Elder law is new school, and much more holistic in both its focus, and its solution set. There’s an old saying that if you’re a litigation attorney, all your legal tools in a lawyer tool box look like a lawsuit. Similarly, to an old school estate planning attorney, all your lawyer tools might look like a trust agreement. Elder law attorneys have to look well outside of that tool box for a solution for each client’s own special needs. There’s nothing wrong with properly using trusts, and even the “new generation” of elder law attorneys use plenty of trusts, but again, the focus is on the big picture. The question asked by the estate planner is “what legal solution best fits this client?” The question asked by the elder law attorney is “what is the best possible solution, legal, practical, financial, insurance related, or otherwise, that best fits this client?”
Here’s a non-exclusive list of what clients, being advised by “new school” elder law attorneys, are now considering as advance planning possible solutions for both their future estate planning and elder law needs:
1. Basic will plans, with strong and expansive lifetime documents, such as a broad durable power of attorney, with gifting, Medicaid planning, and trust creation, modification, funding, and termination powers, designed to be used by a spouse, trusted child(ren), or trusted family friend (i.e., the “Consigliere”), to stand in their shoes and act expansively in the event of a future long term care/chronic illness crisis affecting the client.
2. Financial (annuities), health insurance (long term care policy), and life insurance coverage (permanent policies permitting aggressive use of accelerated death benefit in the event of a long term care/chronic illness event). These folks are putting their money where their mouth is to proactively position themself to be in a better that private pay, truly unprepared major future long term care cost crisis at the time of future need. Note that elder law attorneys work with professionals of their client’s choice, or even noted national experts, to fashion a custom solution in this type of approach, and one size definitely does not fit all!
3. Legal preplanning via irrevocable trust creation and funding, spend down strategies, family transfer strategies, conversion to Medicaid exempt, non-countable, and if possible non-recoverable investments, or a combination of the above and other solutions from item 2, above.
4. Spousal refusal planning if only one spouse has or is anticipated to have the long term care/chronic illness need, although this is more of a “Crisis Plan” technique at the time of need, versus a pre-planning strategy, and who knows who might be the victim of a stroke, heart attack, or other unexpected sudden illness or accident?
One challenge is the Deficit Reduction Act of 2005, which was actually enacted in early 2006, and which now has become fully operational in Florida. Candidly, we in the industry don’t have all the Elder Law tools today that we had in 2005. With state and federal budget constraints, you should expect to see more restrictions on Medicaid availability for long term care costs in the future.
“Don’t be a victim of one size fits all planning. Know your legal rights about elder law and estate planning and act accordingly!”