Incapacity planning is one of the most important parts of estate plans. At the Law Offices of Barton P. Levine, we have helped many clients successfully plan for their future needs. Many Americans will end up needing long-term care. According to the U.S. Department of Health and Human Services, a 65-year-old today has a nearly 70% chance of requiring long-term care services. On average, women need 3.7 years of long-term care, and men require 2.2 years of long-term care. The average cost of long-term care over a person’s lifetime is $172,000. Long-term care facilities frequently charge over $9,000 per month, a fee that many families cannot pay, even those that carefully saved for retirement. The following incapacity planning tips can help you, and your loved ones prepare for the future.
Create a Power of Durable Attorney
In our legal practice, we have seen many clients whose elderly parents have experienced some type of accident or emergency, leading to them needing long-term care. When someone needs long-term care services unexpectedly, family members often feel crunched for time and pressure to quickly get their loved ones’ financial affairs in order. Unfortunately, when a loved one is incapacitated and unable to talk, it can be challenging to track down all of their banking, insurance, and other important financial information. Without a durable power of attorney, banks and other businesses will not let adult children access their parents’ accounts.
Creating a durable power of attorney is one way to make it easier for your loved ones to gather the information they need should you become incapacitated. We have helped many clients create a durable power of attorney in which they appoint an agent to handle their financial affairs in the event they becoming incapacitated. When you create a durable power of attorney, you will rest easier knowing that someone you trust will be able to access your financial accounts and make financial decisions on your behalf.
Create an Advance Directive for Healthcare
Creating an advanced healthcare directive is a must for anyone who is engaging in estate planning. In emergency medical situations, doctors and family members will not know your wishes and desires unless you state them clearly. Do you want doctors to take extraordinary measures in medical emergencies? Would you like pain medication to be administered in end-of-life situations, and if so, how much pain medication would you like to receive? Would you like to be kept alive through artificial means?
All of these are questions that you can address in your advance directive for healthcare. In addition to stating your wishes should you become incapacitated, you can also appoint a health care agent. Your agent will have the legal authority to make medical decisions for you should you become incapacitated. Appointing a healthcare agent can be extremely beneficial, and it can resolve potential conflicts among your loved ones. When they know that you have designated someone you trust to make your decisions for you and that you spelled out your preferences, they will rest easier knowing that your medical team is following your wishes.
Create a Living Trust
Protecting your financial assets is another important part of incapacity planning. Many people utilize revocable living trusts as part of their estate plans. However, there are many different types of trusts, and an experienced estate lawyer will advise you as to which trust makes the most sense for you. When you create a trust and appoint trustees to manage the assets in the trust for the benefit of your chosen beneficiaries, your assets can be passed on outside of the probate process. Using a trust will help your beneficiaries gain access to your assets quickly upon your death. They will not have to go through the arduous and expensive probate process before they can receive the assets you would like to give them.
Prepare for Long-Term Care
As mentioned above, most people will require some type of long-term care in their retirement years. Long-term care costs continue to increase, and many New York long-term care facilities cost over $10,000 a month. Most people end up requiring at least two years of long-term care, and the cost can be astronomical. Taking the time to speak to a lawyer about long-term care planning can help you save your hard-earned assets so you can give them to your loved ones or your preferred charity instead of spending your assets on long-term care costs.
Medicaid benefits will cover necessary stays in long-term care facilities, but qualifying for these benefits is not always easy. Keep in mind that Medicare will not cover a long-term stay in a nursing home. Most private insurances will not cover long-term care stays, either. One way you can protect your assets is to create an irrevocable trust and transfer your assets into the trust. Medicaid does have a five-year look-back period. Any transfers you make in the five years before applying for Medicaid benefits will count against your income level. The sooner you start planning for long-term care costs, the better.
Ideally, you should begin planning five years before you need long-term care services so you can transfer your assets into a trust, protecting the assets from Medicaid’s five-year look-back period. However, we understand that emergencies do occur, and we are prepared to assist clients who need to help their loved ones pay for nursing homes now.
Discuss Your Case with an Experienced Lawyer
At the Law Offices of Barton P. Levine, our experienced estate planning lawyers can help you engage in incapacity planning. We will review your financial situation and talk to you about your goals. We will use our experience in estate planning to help you craft a thorough estate plan. Contact us today to schedule your initial consultation.