Proper Planning Can Offset the Costs of Long-Term Care

As you grow older, one of your fears may be that you will need to enter a nursing home facility at some point in the future.

Although nursing homes often provide exceptional care to patients, they come at a significant cost — sometimes $100,000 or more per year. This can wipe out your life savings in a matter of months or few short years. Adding to the problem is the fact that the cost of most forms of long-term care are not covered by typical health insurance policies, Social Security Disability or Medicare benefits.

Using an Irrevocable Trust

Fortunately, there are options an experienced estate planning attorney will recommend to plan for the possibility of long-term care. One of the most highly used tools is an irrevocable trust, in which you place a large amount of your assets and property so that they will not be counted as resources when it comes to paying for nursing home care.

If done right, you can qualify for Medicaid benefits to cover most or all of your long-term care costs, while still distributing your wealth to your loved ones based on your wishes. You may also be able to keep your home, even though you will no longer own it.

To that end, one of the downsides to setting up an irrevocable trust is that once you place assets or property into it, you forfeit most control over them. You would name an executor to oversee the assets within the trust while you are still alive, and that person would also be responsible for ensuring the assets are properly distributed to your beneficiaries. This can make some people uncomfortable.

On the other hand, you may continue to draw income from the trust on a regular basis, giving you ample resources to continue your standard of living for the foreseeable future. Irrevocable trusts can be complex entities, so be sure to consult an experienced living trust attorney to learn about your options and if it’s the right tool for you.

Long-Term Care Insurance

An alternative to Medicaid planning is to purchase long-term care insurance, which essentially covers the cost of a nursing home if it becomes necessary for you to seek this type of care in the future.

Long-term care insurance can be expensive, and the costs may vary widely depending on the insurance company and your age. Nevertheless, it’s recommended that you look at a variety of options before settling on a policy. Providers may also deny coverage for those who are in poor health, so you should try to find a policy as early on as possible.

It’s worth noting that the decision to purchase long-term care insurance coverage should not be taken lightly. The choice you make will impact you well into the future, so you should work with a knowledgeable wills and trusts attorney to look at all of your options and determine the best course of action for your situation.

Schedule Your Free Consultation with Our Experienced Estate Planning Attorney

Einheuser Legal, P.C. is an estate planning law firm in Bingham Farms, Michigan. We help families set up wills and living trusts. Attorney Michael Einheuser is an experienced estate planning lawyer serving residents in Bingham FarmsTroy, Farmington HillsRochester HillsSouthfieldWest Bloomfield Township, and Bloomfield Township.

Schedule your Free Consultation today: (248) 398-4665.

How to Give Gifts Through Your Will

As you establish your estate plan, one of your goals may be to provide certain gifts to your family members and friends. While there are some tax benefits to doing this while you are still alive, you may also pass on “testamentary gifts” through your will. Doing so can help your beneficiaries avoid many of the headaches associated with probate.

There are three different categories of testamentary gifts that a Farmington Hills estate planning attorney can help you arrange in your will. The following is a brief overview of each:

  • Specific gift: A specific gift is explicit about which assets or property go to which beneficiaries. You might, for example, specify that a loved one receives a certain collection or a specific piece of furniture you own. You may also use specific gifts to forgive debts others owe to you.
  • General gift: A general gift is not as easy to interpret as a specific gift, which is why individuals usually try to be as specific as possible when creating their wills. An example would be leaving behind “a motor vehicle” for a loved one. If you have more than one vehicle, that instruction might be too vague. Your executor may need to interpret and analyze the will to determine the likely intent behind a general gift.
  • Residuary gift: This is a gift of property left over after the executor has administered the rest of the assets and property. For example, after your loved ones receive all of the specific gifts outlined in your will, the rest of your property goes to a specific person or organization.

How should you leave behind these gifts?

You should discuss with your Rochester Hills estate planning lawyer exactly what gifts you want to leave behind to your beneficiaries, along with the strategies you will use to leave those gifts.

There are a few ways you can leave gifts, including:

  • Making gifts in an exact amount: If you are leaving behind money, you may specify an exact amount of cash — whether it’s for general use or a special purpose.
  • Designate a percentage of your estate to go to charity: You may choose to leave money or property to a charity or cause of your choice. Typically, you will designate the percentage of your estate’s value that will go to the organization in question.
  • Create special types of trusts: Trusts allow you to bypass the probate process and can shield your assets from estate taxes. This can be an important benefit if the value of your estate is hovering around the estate tax exemption limit.

You have the power to decide what will happen to your assets and property after you pass away. Meet with a professional at a Southfield estate planning law firm to guide you through the process.

Schedule Your Free Consultation with Our Experienced Estate Planning Attorney

Einheuser Legal, P.C. is an estate planning law firm in Bingham Farms, Michigan. We help families set up wills and living trusts. Attorney Michael Einheuser is an experienced estate planning lawyer serving residents in Bingham Farms, Troy, Farmington Hills, Rochester Hills, Southfield, West Bloomfield Township and Bloomfield Township.

Schedule your free consultation today by calling (248) 398-4665.