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4 WAYS TO PAY FOR LONG TERM CARE

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If you’re like most people, you have concerns about your ability to pay for long term care should you or a loved one need the support of long term care in the future. With nursing homes costing more than $130,000 per year in New York City, your concerns are well founded.

Long term care refers to care in your home, assisted living facility, or a nursing home when you can no longer care for yourself. There are four main ways to pay for long term care; and one of the ways is so limited, we really should call this article, “3 Ways to Pay for Long Term Care.”

1. Private pay

Private pay means that you pay for long term care out of your own savings and/or income stream.

2. Long term care insurance

Long term care insurance pays for your care in a long term care facility such as a nursing home or assisted living facility. It also pays for your care at home.

While the premiums are somewhat hefty, all of what you pay in premiums over the years will likely add up to less than the cost of one year in a nursing home. The average nursing home stay is three years.

3. Medicaid

Medicaid is the government’s health care plan for the poor. If you are eligible, Medicaid will pay for your long term care. Elder law attorneys help families qualify for Medicaid without losing all of their assets.

4. Medicare XXXXXXX

Medicare pays so little of long term care expenses and there are so many qualifications to receive payment that we thought of not even including it in this article. Your best bet is to not count on Medicare and if you receive any long term care benefits, consider it a bonus.

Planning for long term care is part of the estate planning process. Jot down all of your long term care questions and concerns and call our office. Our qualified elder law team helps people just like you.

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The charitable remainder trust is a really interesting tool in your estate planning attorney’s tool belt. It’s so cool that we thought you might find it interesting and want to incorporate it into your estate plan. Here are our thoughts on the charitable remainder trust itself as well as its tax benefits.

  • You set up a trust and donate low basis highly appreciated assets into the trust (yes, there must be some highly appreciated assets out there!)
  • Because a charity doesn’t pay income taxes, when the assets are sold, you do NOT pay any capital gains taxes (tax benefit #1.)
  • You name an IRS recognized charity as the beneficiary of the remainder interest so you receive a federal income tax deduction based upon the remainder interest (tax benefit #2.)
  • The assets you donate to the trust are out of your estate for federal estate tax purposes (tax benefit #3.)
  • Because the assets are out of your estate, there will be no probate fees associated with these assets.
  • You receive an income stream for your life (or the joint lives of you and your spouse) or for a period of years (i.e. 20 years.)
  • The income stream you receive is tiered so it is not straight income and has an overall lower income tax rate (tax benefit #4.)
  • Your charitable remainder trust planning benefits you, your family, and your favorite charity, and not the government.
  • You get to make a gift to a charity during your lifetime, not later.
  • Note that this type of trust is irrevocable, meaning that it cannot be changed or amended.
  • If you transfer real property or otherwise taxable property into the trust, you will no longer pay the taxes on the property (tax benefit #5.)
  • The transfer of the gift into the property is a gift to a charity and thereby does not incur gift tax or eat up any of your lifetime exemption (tax benefit #6.)
  • Because the property is no longer yours, it can’t be taken by creditors. Creditors can attempt to attach the income stream.
  • You become a philanthropist.

If you have any questions about the charitable remainder trust, consult with a qualified estate planning attorney.

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When creating an estate plan, it is important to make sure that it is accurate and effective. Below is a list of some of the common estate planning mistakes that are made. It is in your best interest to speak with an estate planning attorney to start your planning and to take the time to avoid the following mistakes.

  • Putting off planning or not planning at all. Many people wait years to start their estate planning. Taking the time to plan now could make a difference in the future. It is also important to make sure that you have some sort of estate plan in place. No matter how much money you make or how young you are, if you are over the age of 18 you should have a plan in place for the future.
  • Not updating estate planning documents. Everyone should meet with an estate planning attorney every 3 to 5 years to review and revise their plan. If serious life changes occur such as marriage, death or the birth of a new child, you should make sure that you update your planning.
  • Not having a will. A will allows you to appoint a guardian for your minor children, outline how your assets will be distributed after your death and appoint someone to manage and distribute your assets. Without a will, the court or state will determine all of these things. If you do not have a will, your wishes may not be followed.
  • Not hiring an estate planning attorney. Many people attempt to do their own planning in order to save money. It is important to hire an estate planning attorney so that your estate plan fits in with your needs and is legal and error-free. Estate planning is an investment for the future.
  • Not updating beneficiary designations. If you become divorced or experience other significant life changes, you will likely need to update your beneficiary designations for your life insurance policy and retirement accounts. This will enable you to make sure that your assets are given to the right people after your death.

If you have questions about estate planning, consult with a qualified estate planning attorney.

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Many people assume that they do not need estate planning. The truth is everyone needs estate planning! No matter what your life experiences, if you are over the age of 18, you need planning. Take a look at the following list of people who benefit from the use of estate planning. Speak with an estate planning attorney today!

  • Families who have young children
  • Young couples who have just gotten married
  • College students
  • Individuals who want to provide for their loves ones
  • Young professionals who are just beginning their career
  • Families with adult children
  • Individuals with few assets
  • Individuals with extensive assets
  • Retired individuals
  • Couples who are expecting a child
  • Individuals who have preferences about their funeral arrangements
  • Seniors who have recently lost a spouse
  • Individuals who do not have life insurance
  • Recently divorced individuals
  • Couples who have recently adopted a child
  • GLBT individuals
  • Individuals who want to make important medical decisions ahead of time
  • Veterans of the Armed Forces
  • Elderly couples
  • Individuals who own a business
  • Couples who have become separated
  • Same sex couples
  • Individuals with disabled family members
  • Individuals who want to donate to a worthy cause
  • Grandparents who want to make a difference in their grandchildren’s lives
  • Individuals with life threatening illnesses
  • Families who love their pets
  • Parents who want to make sure their children are cared for no matter what
  • Individuals who want peace of mind

As you can see, everyone needs estate planning. With the help of an estate planning attorney, you can invest in a plan that will meet your individual goals. Take the steps needed to prepare for the future today!

If you have any questions about the estate planning process, consult with a qualified estate planning attorney

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JOIN US FOR A FREE WORKSHOP THIS WEEKEND TO LEARN THE FOLLOWING:

Elder Law and Medicaid Planning

Medicaid needs arise when you least expect them. Americans are living longer than before. At the turn of the 20th century, life expectancy was about 47 years. In the 21st Century, life expectancy has doubled. As a result, we face more challenges and transitions in our lives than those who came before us.

PROTECT your life savings.
INCREASE the amount of income of keep.�
AVOID losing your home.
REDUCE or ELIMINATE your nursing home bills and long term care costs.
LEARN about Veteran’s Benefits.

Wills, Trust and Estate Planning

We know you want to pass your wealth to whom you want, when you want, the way you want, at the time of your death. If done correctly, a Estate Plan can help minimize estate taxes for a married couple and allow a trusted person to take over your care and finances during incapacity.

PROTECT your family.
AVOID probate delays and expenses.
SAVE estate taxes. Give your money to your family.
PRESERVE money for children or charitable causes.

Join us at our FREE Workshop this weekend. Our experienced attorneys will give you the information you need.

To register for the seminar, call our office at (718) 793-7000 , or register online!

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Estate planning takes a team effort. This is the perfect idea to plan and schedule important meetings at the same time. This includes scheduling meetings with an estate planning attorney, insurance professional, CPA, and financial advisor. If you take the time to schedule these meetings over the next few weeks, you will be well on your way to beginning to creating the future you want.

1. Don’t let fees stand in your way.

Estate planning works well with the help of other professionals.

While professional fees can be a big concern, this is something that shouldn’t stop you from proper planning. The truth is, you will likely be offered a free or low-cost initial consultation with an estate planning attorney.

Even if you have to pay the attorney’s hourly fee, it is a worthwhile investment.

A CPA will charge by the hour, so fees will depend on your specific needs.

Both insurance professionals and financial advisors are paid through the products that they sell. You will most likely not have to pay a direct fee for their time.

2. Many people need an estate planning attorney and advisors.

Many people assume that only the rich need an estate planning attorney and advisory team. The truth is, everyone needs estate planning and many people can benefit from a team of advisors.

Feel free to ask your estate planning attorney if you are unsure whether you need an advisory team.

3. Be honest and share all information with your attorney.

If you fail to disclose assets to your estate planning attorney in order to avoid paying legal fees, there could be problems in the future.

For example, after you die, you may suffer a loss to state or federal taxes.

By sharing all information and assets, your attorney will be able to create a proper estate plan. You should always be genuine with your professionals.

4. Follow these guidelines when planning meetings:

  • Meet with your estate planning attorney every three to five years. If a law changes or you experience a significant life change, you may need to meet with your attorney sooner.
  • Meet with your CPA twice a year or as recommended.
  • Check in with your financial advisor quarterly.
  • Check in with your insurance professional on a yearly basis.

Call a qualified estate planning attorney and make advisory appointments. This will allow you to have several professionals looking out for your future.

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There are different ways to own property. It is important to understand how each form of property ownership affects your estate plan. Knowing how each ownership impacts your estate plan, can allow you to make better estate planning decisions. Below are descriptions on the three main ways to own property.

Individual Name

  • If you are not married, most of your property will probably be owned in your name.
  • Examples of property with individual ownership include your mortgage deed, car title, and insurance and investment accounts.
  • Assets that are owned by you, individually, are controlled by your will. This guarantees probate.

Joint Ownership

  • Most married couples have most property owned in joint names.
  • Joint ownership is not only for married couples. This can be used with siblings or with an elderly parent and his or her children.
  • A mortgage deed and investment accounts would name two names as owners and say as “joint tenants with right of survivorship.”
  • Both owners have 100% ownership.
  • Jointly owned assets are not controlled by your will or trust. This could lead to unintentional problems such as disinheriting a child.

Tenants in common

  • Tenants in common is a form of ownership that allows two people to own a property, but each person owns a specific share. Each person is able to sell his or her own share.
  • A rental property that lists two people as tenants in common gives each person a 50% ownership (usually.) Each owner is able to sell, devise, or give away his or her share. The other owner will still own his or her 50% share.
  • This type of ownership is controlled by your will. This guarantees probate.

If you have questions about property ownership and how it impacts your estate plan, consult with an experienced estate planning attorney.

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Along with authorizing organ donation with the use of a donor card (often your driver’s license,) you can state your organ donation wishes in your estate planning documents. This can be done in a separate organ donation form.

Take the following things into consideration when considering implementing organ donation into your planning.

By donating organs and tissues, you can help contribute to medical advances as well as save lives.

The following organs are tissue transplants are common:

  • Liver
  • Heart
  • Skin
  • Kidney
  • Lung
  • Bone
  • Connective tissue
  • Pancreas

If you want to contribute to medical science and/or save up to eight lives, you may want to include an organ donor form among your estate planning documents.

With proper planning you can do the following:

  • Choose which organs or tissue that you want donated
  • Decide which organs or tissue you do not want donated
  • What purpose you want your donation to have (research, education, transplant)
  • Decide if you want your entire body donated to medical research

Although you have the ability to specify, most folks simply indicate that they are organ donors without restriction.

Should you be an organ donor?

Choosing whether to be an organ donor is your own personal decision. Take some time to think about your own personal beliefs and values. Know that if you choose to be an organ donor you could make a difference in another person’s life and the medical world.

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If you’re like most people, you may not be familiar with the concept of incapacity planning. Incapacity planning is simply preparing for the time that you may be unable or unwilling to make your own day to day decisions. Estate planning encompasses incapacity planning.

When would I be incapacitated?

Incapacity refers to the time when you would be unable to manage your finances, medical decisions, and day to day affairs.

Who determines that I am incapacitated?

A court can make the competency decision during a guardianship proceeding. But, guardianships are expensive, time consuming, public, and stressful. This process, called “guardianship” or “conservatorship,” is required if you do not have appropriate incapacity planning in place.

It is preferable to have a private determination such as by a “disability panel.” You give instruction for the creation and implementation of such panel in your revocable living trust. The panel typically includes trusted family members and medical professionals.

So, I need a revocable living trust to prepare for incapacity?

In almost all cases, it would be beneficial to have disability provisions in a revocable living trust, financial power of attorney, and health care proxy. This is the three prong approach to incapacity planning.

In the revocable living trust, you provide for the determination of your disability, name disability trustees, and give instruction for your care and the management of your assets during any period of disability.

I need a power of attorney and health care proxy?

You need a financial power of attorney so your named agent can manage your assets and financial affairs and take care of your day to day business. The agent under a financial power of attorney should care about you, be highly organized, a good record keeper, and a good communicator.

You need a health care proxy so that your named agent can make health care decisions for you if you are not able to make those decisions yourself. The agent under a heath care proxy should care about you and have the ability to be assertive with medical professionals, especially doctors.

If you have any questions about incapacity planning, consult with a qualified estate planning attorney.