When Should You Update Your Estate Plan?

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Once you've created an estate plan, it is important to keep it up to date. You will need to revisit your plan after certain key life events.

Marriage

Whether it is your first or a later marriage, you will need to update your estate plan after you get married. A spouse does not automatically become your heir once you get married. Depending on state law, your spouse may have to share your estate with other relatives. You need a will to spell out how much you wish your spouse to get.

Your estate plan will get more complicated if your marriage is not your first. You and your new spouse need to figure out where each of you wants your assets to go when you die. If you have children from a previous marriage, this can be a difficult discussion. There is no guarantee that if you leave your assets to your new spouse, he or she will provide for your children after you are gone. There are a number of options to ensure your children are provided for, including creating a trust for your children, making your children beneficiaries of life insurance policies, or giving your children joint ownership of property.

Even if you don't have children, there may be family heirlooms or mementos that you want to keep in your family. For more information on estate planning before remarrying, click here.

Children

Once you have children, it is important to name a guardian for your children in your will. If you don't name someone to act as guardian, the court will choose the guardian. Because the court doesn't know your kids like you do, the person they choose may not be ideal. In addition to naming a guardian, you may also want to set up a trust for your children so that your assets are set aside for your children when they get older.
Similarly, when your children reach adulthood, you will want to update your plan to reflect the changes. They will no longer need a guardian, and they may not need a trust. You may even want your children to act as executors or hold a power of attorney.

Divorce or Death of a Spouse

If you get divorced or your spouse dies, you will need to revisit your entire estate plan. It is likely that your spouse is named in some capacity in your estate plan -- for example, as beneficiary, executor, or power of attorney. If you have a trust, you will need to make sure your spouse is no longer a trustee or beneficiary of the trust. You will also need to change the beneficiary on your retirement plans and insurance policies.

Increase or Decrease in Assets

One part of estate planning is estate tax planning. When your estate is small, you don't usually have to worry about estate taxes because only estates over a certain amount, depending on current state and federal law, are subject to estate taxes. For example, the New Jersey estate tax is due on estates as small as $675,000.  As your estate grows, you may want to create a plan that minimizes your estate taxes. If you have a plan that focuses on tax planning, but you experience a decrease in assets, you may want to change your plan to focus on other things. For more information about estate taxes, click here.

Other

Other reasons to have your estate plan updated could include:

• You move to another state
• Federal or state estate tax laws have changed
• A guardian, executor, or trustee is no longer able to serve
• You wish to change your beneficiaries
• It has been more than 5 years since the plan has been reviewed by an attorney

Contact your estate planning and elder law attorney to update your plan.

IRS Issues Long-Term Care Premium Deductibility Limits for 2012

The Internal Revenue Service (IRS) is increasing the amount taxpayers can deduct from their 2012 taxes as a result of buying long-term care insurance.

Premiums for "qualified" long-term care insurance policies (see explanation below) are tax deductible to the extent that they, along with other unreimbursed medical expenses (including Medicare premiums), exceed 7.5 percent of the insured's adjusted gross income.

These premiums -- what the policyholder pays the insurance company to keep the policy in force -- are deductible for the taxpayer, his or her spouse and other dependents. (If you are self-employed, the tax-deductibility rules are a little different: You can take the amount of the premium as a deduction as long as you made a net profit; your medical expenses do not have to exceed 7.5 percent of your income.)

However, there is a limit on how large a premium can be deducted, depending on the age of the taxpayer at the end of the year. Following are the deductibility limits for 2012. Any premium amounts for the year above these limits are not considered to be a medical expense.

Attained age before the close of the taxable year	Maximum deduction for year
40 or less	$350
More than 40 but not more than 50	$660
More than 50 but not more than 60	$1,310
More than 60 but not more than 70	$3,500
More than 70	$4,370

What Is a "Qualified" Policy?
To be "qualified," policies issued on or after January 1, 1997, must adhere to certain requirements, among them that the policy must offer the consumer the options of "inflation" and "nonforfeiture" protection, although the consumer can choose not to purchase these features. Policies purchased before January 1, 1997, will be grandfathered and treated as "qualified" as long as they have been approved by the insurance commissioner of the state in which they are sold. For more on the "qualified" definition, click here.

The Georgetown University Long-Term Care Financing Project has a two-page fact sheet, "Tax Code Treatment of Long-Term Care and Long-Term Care Insurance."

To download it in PDF format, go to: http://ltc.georgetown.edu/pdfs/taxcode.pdf

This article is reprinted with the permission of ElderLawAnswers.com.

Adult Children Losing $3 Trillion in Caring for Aging Parents

Americans who take time off work to care for their aging parents are losing an estimated $3 trillion dollars in wages, pension and Social Security benefits, according to a new MetLife study. Meanwhile, the percentage of adult children providing basic care for their parents has skyrocketed in recent years. 

Nearly 10 million adults age 50 and over care for an aging parent, MetLife says. For the individual female caregiver, the cost impact of caregiving in terms of lost wages, pension and Social Security benefits averages $324,044. For male caregivers, the figure is $283,716. 

The study also identified a dramatic rise in the share of men and women providing basic parental care over the past decade and a half. In 1994, only 9 percent of women and 3 percent of men and were providing care. By 2008, the percentage of women caregivers had more than tripled to 28 percent, while the figure for men had quintupled to 17 percent. "Basic care" is defined as help with personal activities like dressing, feeding, and bathing. Daughters are more likely to provide basic care and sons are more likely to provide financial assistance, the study found. 

"Undoubtedly, the impact of the aging population has resulted in increased need within families for family caregiving support," the study notes. 

At the same time, MetLife found that adult children age 50 and over who work and provide care to a parent are more likely to have fair or poor health than those who do not provide care to their parents. 

The study was based on an analysis of data from the 2008 National Health and Retirement Study (HRS). 

The findings have implications for individuals, employers and policymakers, MetLife says. Individuals, it says, should consider their own health when caregiving and should prepare financially for their own retirement. Employers can provide retirement planning and stress management information and assist employees with accommodations like flex-time and family leave. 

On the policy side, although only a few states mandate paid family and medical leave, "clearly this policy would benefit working caregivers who need to take leave to care for an aging parent," the study concludes. MetLife also notes that the CLASS Act, a voluntary long-term care insurance program that is part of the new federal health reform law, will provide some coverage for long-term care needs as well as raise public awareness of the issue. 

For more on the study, "The MetLife Study of Caregiving Costs to Working Caregivers: Double Jeopardy for Baby Boomers Caring for Their Parents," click here.

Reprinted with permission by ElderLawAnswers.com

A Brief Overview of a Trustee's Dutie

A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a "trustee," holds legal title to property for another person, called a "beneficiary." If you have been appointed the trustee of a trust, this is a strong vote of confidence in your judgment and probity. Unfortunately, it is also a major responsibility. Following is a brief overview of your duties: Fiduciary Responsibility. As a trustee, you stand in a "fiduciary" role with respect to the beneficiaries of the trust, both the current beneficiaries and any "remaindermen" named to receive trust assets upon the death of those entitled to income or principal now. As a fiduciary, you will be held to a very high standard, meaning that you must pay even more attention to the trust investments and disbursements than you would for your own accounts. The Trust's Terms. Read the trust itself carefully, both now and when any questions arise. The trust is your road map and you must follow its directions, whether about when and how to distribute income and principal or what reports you need to make to beneficiaries. Investment Standards. Your investments must be prudent, meaning that you cannot place money in speculative or risky investments. In addition, your investments must take into account the interests of both current and future beneficiaries. For instance, you may have a current beneficiary who is entitled to income from the trust. He or she would be best off in most cases if you invested the trust funds to generate as much income as possible. However, this may be detrimental to the interest of later beneficiaries who would be happiest if you invested for growth. In addition to balancing the interests of the various beneficiaries, you must consider their future financial needs. Does a trust beneficiary anticipate buying a house or going to school? Will she be depending on the trust income for retirement in 15 years? All of these questions need to be considered in determining an investment plan for the trust. Only then can you start considering the propriety of individual investments. Distributions. Where you have discretion on whether or not to make distributions to a beneficiary you need to evaluate his current needs, his future needs, his other sources of income, and your responsibilities to other beneficiaries before making a decision. And all of these considerations must be made in light of the size of the trust. Often the most important role of a trustee is the ability to say "no" and set limits on the use of the trust assets. This can be difficult when the need for current assistance is readily apparent. Accounting. One of your jobs as trustee is to keep track of all income to, distributions from, and expenditures by the trust. Generally, you must give an account of this information to the beneficiaries on an annual basis, though you need to check the terms of the trust to be sure. In strict trust accounting, you must keep track of and report on principal and income separately. Taxes. Depending on whether the trust is revocable or irrevocable and whether it is considered a "grantor" trust for tax purposes, the trustee will have to file an annual tax return and may have to pay taxes. In many cases, the trust will act as a pass through with the income being taxed to the beneficiary. In any event, if you keep good records and turn this over to an accountant to prepare, this should not be a big problem. Delegation. While you cannot delegate your responsibility as trustee, you can delegate all of the functions described above. You can hire financial advisors to make investments, accountants to handle taxes and bookkeeping for the trust, and lawyers to advise you on questions of interpretation. With such professional assistance, the job of trustee need not be difficult. However, you still need to communicate with those you hire and make any discretionary decisions, such as when to make distributions of principal from the trust to one or more beneficiaries. Fees. Trustees are entitled to reasonable fees for their services. Family members often do not accept fees, though that can depend on the work involved in a particular case, the relationship of the family member, and whether the family member trustee has been chosen due to his or her professional expertise. Determining what is reasonable can be difficult. Banks, trust companies, and law firms typically charge a percentage of the funds under management. Others may charge for their time. In general, what's reasonable depends on the work involved, the amount of funds in the trust, other expenses paid out by the trust, the professional experience of the trustee, and the overall expenses for administering the trust. For instance, if the trustee has hired an outside firm for investment purposes, that expense would argue for the trustee taking a somewhat smaller fee. In any case, it makes sense to consult with a professional experienced with trust work who can guide you on what would be normal fees considering all of the circumstances. In short, acting as trustee gives you a wonderful opportunity to provide a great service to the trust's beneficiaries. The work can be very gratifying. Just keep an eye on the responsibilities described above to make sure everything is in order so no one has grounds to question your actions at a later date.

The Five Phases of Retirement Planning

Retirement has changed radically over the last several decades in America. Years ago, you expected to work most of your life for a single, large employer and you then count on a pension. "Retirement planning" meant figuring out how to use your free time. Today, in all likelihood you will be living in retirement on money you, yourself, saved. "Planning" means calculating rates of return and deciphering tax rules. 

This change from institution-funded to self-funded retirement constitutes a dramatic shift of responsibility. In recognition of this shift, ElderLawAnswers has significantly expanded its ElderLaw 101 section on Retirement Planning, providing you with information you can use no matter where you are in the continuum of retirement planning. 

The section begins with an explanation of the stages along that continuum -- the five phases of retirement planning and the key aspects of good planning to be carried out during each phase. Below is a summary.

PHASE I: Accumulation
This period begins when you enter the workforce and begin setting aside funds for later in your life, and ends when you actually retire. If your employer offers 401(k), 403(b), or 457(b) plans, have you signed up and are you contributing the maximum allowed? Did you know that the "new normal" requires retirement savings rates for most Americans to exceed 10 percent? If self-employed, are you shortchanging yourself on Social Security in order to reap tax deductions? 

PHASE II: Pre-Retirement
This phase occurs during the final years of the accumulation phase and should begin when you reach 50 years old or are 15 years away from retiring, whichever happens first. Now is the time to get your plan in place, making sure your finances are lined up correctly for retirement day so nothing will be left to chance. If you work for a company with a benefits specialist, arrange an appointment to become informed about the various ways you can convert your employer retirement savings into a stream of income or an IRA. Consider using a tool known as "scenario planning." Start learning about Social Security and your options for beginning to receive retirement benefits. Familiarize yourself with the basics of Medicare. 

PHASE III: Early-Retirement
This phase lasts from the day you retire until you are 70 years old. (For those who do not plan to retire until well into their 70s, some tasks in this phase may occur later.) A key purpose of this phase is to create a clear communication channel with your family so information can be shared, questions asked and answered, and decisions made in a calm, supportive way. It's also the time to assess how well your finances are working now that you are using your retirement savings. Fine-tune your income and expense projections, taking into consideration how you will meet minimum distribution requirements from your tax-deferred accounts. 

PHASE IV: Mid-Retirement
This phase begins at age 70 and lasts as long as you are able-bodied and high-functioning. Despite your good health, begin looking at what steps you would like your family to take should your condition decline significantly. In most cases your ability to make all your own decisions, care for yourself, engage with the world on your terms, and manage your affairs does not vanish in a split second. It takes courage to dive into a conversation about giving up and transferring control. 

PHASE V: Late-Retirement
This phase begins when your health has taken a turn for the worse and there is little likelihood of it being fully restored. You require significant help to function day to day. The hope is that by this point all the planning done in prior years makes this transition as manageable and life-affirming as possible.

Charitable Remainder Trusts: Income for Life and a Good Deed at Death

Many people like the idea of leaving bequests to favorite charities in their wills. But instead of leaving money to a charity in your will, you can put that money into a charitable remainder trust and collect income while you are still alive. Charitable remainder trusts have many other advantages, including reducing your income and estate taxes and diversifying your assets.

A charitable remainder trust is an irrevocable trust that provides you (and possibly your spouse) with income for life. You place assets into the trust and during your lifetime you receive a set percentage from the trust. When you die, the remainder in the trust goes to the charity (or charities) of your choice

A charitable remainder trust has many benefits:

•At the time you create the trust, you will receive an income tax deduction for charitable giving.

•Any profit from the sale of investments within the trust are not subject to capital gains tax, which means the trustee may have more freedom in managing the assets.

•When you die, the assets in the trust will pass outside your estate and be eligible for the estate tax charitable deduction.

The downside of a charitable remainder trust is that it is irrevocable, meaning once you create the trust, you can't cancel it. While you can't revoke the trust, you may have the ability to change the beneficiary if you decide to give to a different charity. You may also serve as trustee, giving you control over how the trust assets are invested. In addition, note that any income you receive from the trust will be subject to income taxes.

To find out if a charitable remainder trust is right for you, talk to a qualified estate planning or elder law attorney.

LegalZoom Sued for Deceptive Practices

One of the most prominent sellers of do-it-yourself wills and other estate planning documents, is the target of a class action lawsuit in California charging that the company engages in deceptive business practices and is practicing law without a license.


The lawsuit was filed in Los Angeles Superior Court on May 27, 2010, by Katherine Webster, who is the niece of the late Anthony J. Ferrantino and the executor of Mr. Ferrantino's estate.

Knowing that he had only a few months to live, Mr. Ferrantino asked Ms. Webster in July 2007 to help him use LegalZoom to execute a will and living trust. Based on LegalZoom's advertising, Ms. Webster says she believed that the documents they created would be legally binding and that if they encountered any problems, the company's customer service department would resolve them.

But after the living trust documents were created and signed, the financial institutions that held his money refused to accept the LegalZoom documents as valid. Ms. Webster tried to get help from LegalZoom, with no success. Mr. Ferrantino died in November 2007.

Ms. Webster was forced to hire an estate planning attorney, who petitioned the court to allow the post-death funding of the trust. The attorney then had to convince the banks to transfer the funds -- a more difficult task following Mr. Ferrantino's death. The attorney also discovered that the will LegalZoom created for Mr. Ferrantino had not been properly witnessed. All this cost Mr. Ferrantino's estate thousands of dollars.

The lawsuit claims that Ms. Webster and others like her relied on misleading statements by LegalZoom, including that LegalZoom carefully reviews customer documents, that it guarantees its customers 100 percent satisfaction with its services, that its documents are the same quality as those prepared by an attorney, and that the documents are effective and dependable.

"Nowhere in the [company's] manual do defendants explain that using LegalZoom is not the same as using an attorney and that its documents are only 'customized' to the extent that the LegalZoom computer program inputs your name and identifying information, but not tailored to your specific circumstances," the lawsuit states, adding that "the customer service representatives are not lawyers and cannot by law provide legal advice."

Ms. Webster is suing not only on her behalf but on behalf of anyone in California who paid LegalZoom for a living trust, will, living will, advance health care directive or power of attorney. The lawsuit estimates this class embraces more than 3,000 individuals.

"LegalZoom's business is based on nurturing the false sense of security that people do not need to hire a traditional attorney," says San Francisco attorney Robert Arns, one of the attorneys who filed the lawsuit. "The complaint points out that LegalZoom advertises that you don't need a real attorney because its work is legally binding and reliable. That's misleading. Improperly prepared estate planning documents are a ticking time bomb that can result in improper tax consequences and other items that could cost the estate and heirs huge sums."

"LegalZoom preys on people when they're at their most vulnerable, when they are of advanced age or poor health and need a will or a living trust," adds San Francisco elder abuse attorney Kathryn Stebner, Ms. Webster's lead counsel.

One of the defendants named in the suit is LegalZoom co-founder Robert Shapiro, who appears on the LegalZoom Web page and TV ads and who is best-known for being one of O.J. Simpsons attorneys.

This is not the first suit against LegalZoom. In December 2009, a Missouri man who paid LegalZoom to prepare his will sued the company for engaging in the unauthorized practice of law (Janson v. LegalZoom). The lawsuit is also seeking class action status. LegalZoom is trying to have the case removed from Missouri state court to the United States District Court for the Western District of Missouri.

Don't Let Your Life Insurance Trigger An Avoidable Estate Tax

Although your life insurance policy may pass to your heirs income tax-free, it can affect your estate tax. If you are the owner of the insurance policy, it will become a part of your taxable estate when you die. While the federal estate tax is currently zero, the exemption will be $1 million and the rate will increase to 55 percent on January 1, 2011, if Congress fails to act in the interim.

In New Jersey, the estate tax may be triggered for estates exceeding $675,000. You should make sure your life insurance policy won't have an impact on your estate's tax liability.

If your spouse is the beneficiary of your policy, then there is nothing to worry about in the short term. Spouses can transfer assets to each other tax-free. But an en estate tax may be triggered on your spouses death that could have been avoided with proper planning.

If the beneficiary is anyone else (including your children), the policy will be a part of your estate for tax purposes. For example, suppose you buy a $200,000 life insurance policy and name your son as the beneficiary. When you die, the life insurance policy will be included in your taxable estate. If the total amount of your taxable estate exceeds the estate tax exemption, then your policy will be taxed.

In order to avoid having your life insurance policy taxed, you can either transfer the policy to someone else or put the policy into a trust. Once you transfer a policy to a trust or to someone else, you will no longer own the policy, which means you won't be able to change the beneficiary or exert control over it. In addition, the transfer may be subject to gift tax if the cash value of your policy (the amount you would get for your policy if you cashed it in) is more than $13,000. If you decide to transfer a life insurance policy, do it right away. If you die within three years of transferring the policy, the policy will still be included in your estate.

If you transfer a life insurance policy to a person, you need to make sure it is someone you trust not to cash in the policy. For example, if your spouse owns the policy and you get divorced, there may be no way for you to get it back. A better option may be to transfer the life insurance policy to a life insurance trust. With a life insurance trust, the trust owns the policy and is the beneficiary. You can then dictate who the beneficiary of the trust will be. For a life insurance trust to exclude your policy from estate taxes, it must be irrevocable and you cannot act as trustee.

If you want to transfer a current life insurance policy to someone else or set up a trust to purchase a policy, consult with your estate planning law attorney.

What Is Estate Planning?

The definition of Estate Planning is easy: it is a plan for your estate.  Your estate is what you own; it is your stuff. 

If you become mentally incapacitated, perhaps by accident or illness, you can no longer manage your stuff.  You can't buy or sell what you need, pay you bills, or file your taxes.  Someone will have to do this for you.  If you plan for this with Powers of Attoney or Trusts, you get to choose who helps you manage your stuff.  If you don't, a judge will choose someone for you after an expensive court proceeding.  You may not agree with the judges choice and it may be a stranger who is charging you hourly.

When you pass away, the ownership of you stuff must pass to someone else (sorry).  If you plan in advance for this, you get to choose who gets what, when they get it and how they get it.  You even get to avoid taxes that will be due if no planning is done.  You can do this by getting a Will or Revocable Living Trust.  You can also control who gets what with beneficiary designations such as with life insurance and retirement accounts.  Bank accounts can be designated Payable on Death (POD) to your beneficiary.  You can also own an asset jointly with someone else so that they become the sole owner if you die.  If you do not plan in advance, the law sets forth who gets what.

A typical Estate Plan may have a Will, Trust, Financial Power of Attorney, Healthcare Power of Attorney and a Living Will.  This planning is really not so much for you but for your loved ones.  If you have an Estate Plan, check to see if it needs an update.  If you don't have a plan, get one.  Your loved one's will thank you someday.

What Is An Estate?

As an estate planning attorney, the term "estate" has a specific meaning to me.  Yet I am constantly reminded that the term "estate" often means something else to others.  For example, prospective clients often say to me "I don't need estate planning, I only need a Will". 

What does the word "estate" mean to you?  I used to picture a mansion in the English countryside surrounded by a large well manicured lawn behind an iron gate and brick walls.  Law school changed that meaning for me. 

Your estate is simply what you own in your own name or jointly with others.  So your estate may include a house, car, bank accounts and investment accounts like mutual funds or other stocks and bonds.  Your retirement plan, such as an IRA or 401k is part of your estate.  The value of your insurance policy is part of your estate even though someone else is getting the money.  Other estate assets are debts owed to you and the value of any business you may own.  Your estate even includes your "stuff" like the contents of your home.

So we all have an "estate".  You can plan ahead to decide what should happen to your estate should you die or become incapacitated.  There is a term for planning ahead like that, wait ... it is on the tip of my tongue ... Estate Planning!

Interesting Article

PROTECTION FOR DIGITAL ASSETS

Do heirs need to know your online passwords?
Monday, November 16, 2009 5:23 AM
BY TIM GRANT
PITTSBURGH POST-GAZETTE

After an American soldier died in Iraq five years ago, his father wanted to save copies of his son's e-mails sent through a Yahoo account. But the Internet company's privacy policy allowed access by only the soldier, triggering a legal fight.

The case highlights a growing discussion concerning what happens when the owner of a password-protected online account dies. To whom does the account belong? Can digital assets be passed on to heirs?

"If you use a computer, you need to have an estate plan that deals with digital assets and paperless transactions," said Lawrence H. Heller, an estate lawyer in Santa Monica, Calif. "People need to think about how to give their heirs access to information that may be stored online, but without the risk of unauthorized access."

Many important documents and personal treasures once kept in file cabinets and safe-deposit boxes are now stored electronically. Photographs, videos, music, letters and book manuscripts that might have monetary value -- or be priceless to loved ones -- often are saved exclusively on computer drives.

Legal disputes involving digital assets are relatively rare, but as the computer-literate population ages, after-death lawsuits are likely to become more common. "What we are trying to do is anticipate and avoid the problem," Heller said.

Until now, estate planning has primarily focused on tangible assets such as real estate, autos and jewelry and intangible assets such as stocks and bonds.

In exceptional cases, artists and musicians face issues involving copyright, trademark or patent law. But now, anyone who owns a computer could end up dealing with those issues, too.

"If I have created something in the digital universe, it's not free game. I may have a hard time protecting it, but I own it," said Steve Seel, an estate and trust lawyer in Pittsburgh.

Sometimes, heirs don't even know these things exist. As more companies move away from paper, online bank accounts, investment accounts, insurance polices, time shares and frequent-flier miles might become trickier to locate and access if someone dies without telling heirs of their existence.

According to a recent study by HSBC Direct, 49 percent of the online population conducts most of its banking via the Internet.

Meanwhile Internet blogs, as well as MySpace, e-mail and Facebook accounts, could be owned by an even greater percentage of the population.

In a growing number of cases, checking a deceased person's computer or other digital devices is becoming a crucial step in executing an estate.

Executors of estates often get special privileges giving them access to most assets. But privacy laws might prevent Internet companies from releasing username and password information to executors.

If a digital asset is stored on someone else's server, ownership becomes especially complicated. Yahoo mail, for example, has a provision in its user agreement that gives the account owner no right to transfer the ownership. All rights are terminated with the owner's death, and all content can be deleted.

The rules were tested in the high-profile case involving the father of Lance Cpl. Justin Ellsworth, a combat engineer with the Marine Corps who died in Iraq in November 2004. The two men were in constant e-mail contact during the deployment, and when the son died, the father wanted the e-mails from his son's account for sentimental reasons.

But the son had changed his password a few weeks before his death and had not shared it with his dad, who lives in Detroit. It took a five-month legal case to work out an arrangement to release copies of the e-mails.

How do I remain independent in my home without being a burden on my loved ones or having to get assistance?

For reasons ranging from acute illness to long-term health conditions, more than 7.6 million Americans receive in-home care, according to the U.S. Census Bureau. But that number is far greater if you include care given by family members. Informal care is given to an adult family member in 1 in 5 American households, according to the 2004 survey Caregiving in the U.S. The typical caregiver is a 46-year-old woman, who spends about 20 hours a week taking care of her mother, according to the survey, which was paid for by the National Alliance for Caregiving and AARP.

Failing to Plan

Long-term care is not high on the list for most people. It is difficult to imagine you or a loved one aging to the point where intervention is required. In fact, many people do not give it consideration until it happens.

But…I have a will.

Ironically, a will is not enough protection. Long-term planning is referred to as estate planning and it will not only protect you and your loved ones, but it will guide the process for situations that you may not want, or expect.

While in our profession it is difficult to understand why more people do not take the time to learn about estate planning and the benefits of it, is saddens us to see the crisis situations that could be avoided.


I do not want to ever be put in one of those “homes”

Today in the United States there are over 16,000 nursing homes. Nursing homes, also known as skilled nursing facilities, are for seniors who require constant medical care and need significant assistance with the activities of daily living. The goal of care in a nursing home is to help individuals meet their daily physical, medical, social, and psychological needs. Nursing homes are generally stand alone facilities, but some are operated within a hospital or an assisted living community.


Residents of nursing homes generally have high care needs and complex medical conditions that require routine skilled nursing services. Due to the constant care needs of its residents, nursing homes are required by federal law to have a licensed nurse on duty 24 hours a day. Residents typically share a room and are served meals in a central dining area. Residents should have the opportunity to be involved in activities that provide mental, physical, and social stimulation. Be sure to ask about activities offered when you tour the facility.

The average cost of care for nursing home care ranges on average $8000 per month. Cost is determined by the level of care needed, the setting where the care is provided, and the geographic location. Due to the high cost of care, many residents use supplemental funding from the government in the form of Medicare and/or Medicaid.

I have a will, so why do I need an Estate Plan?

Many people mistakenly think that estate planning only involves the writing of a will. Estate planning, however, can also involve financial, tax, medical and business planning. A will is part of the planning process, but you will need other documents as well to fully address your estate planning needs.

Who needs estate planning?
You do—whether your estate is large or small. Either way, you should designate someone to manage your assets and make health care and personal care decisions for you if you ever become unable to do so for yourself.

If your estate is small, you may simply focus on who will receive your assets after your death, and who should manage your estate, pay your last debts and handle the distribution of your assets.

If your estate is large, your attorney will also discuss various ways of preserving your assets for your beneficiaries and of reducing or postponing the amount of estate tax which otherwise might be payable after your death.

If you fail to plan ahead, a judge may be needed to appoint someone to handle your assets and personal care. Your assets then will be distributed to your heirs according to a set of rules known as intestate succession.

Contrary to popular myth, everything does not automatically go to the state if you die without a will. Your relatives, no matter how remote, and, in some cases, the relatives of your spouse will have priority in inheritance ahead of the state.
Still, they may not be your choice of heirs; an estate plan gives you much greater control over who will inherit your assets after your death.

What is included in my estate?
Everything you own is included in your estate. This could include assets held in your name alone or jointly with others, assets such as bank accounts, real estate, stocks and bonds, and furniture, cars and jewelry.

Your assets may also include life insurance proceeds, retirement accounts and payments that are due to you (such as a tax refund, outstanding loan or inheritance).
The value of your estate is equal to the “fair market value” of all of your various types of property—after you have deducted your debts (your car loan, for example, and any mortgage on your home.)

The value of your estate is important in determining whether your estate will be subject to inheritance taxes or estate taxes after your death and whether your beneficiaries could later be subject to capital gains taxes. Ensuring that there will be sufficient resources to pay such taxes is another important part of the estate planning process.