In a perfect world, everyone would establish a long-term care plan well in advance of needing such care, all the necessary finances to pay for any such needs would be in order and everyone in the family would be prepared to help execute that plan at any given moment. But the reality is that most people procrastinate on any type of planning that focuses on the possibility of serious illness or death.
When an unplanned event happens that requires immediate long-term care, and in the absence of an existing plan, long-term care ‘crisis’ planning can help you navigate the days to come. What is Long-term care ‘crisis’ planning? This term is based on the notion that an event occurred that now requires you to make decisions regarding long-term nursing home care, including addressing the cost of such care, in a short period of time.
Your first step might be to seek advice from professionals who are trained in the area of long-term care planning and stay current on the best methods for addressing your situation, as the rules and regulations of Medicaid are complicated and change frequently. Below are a few of the ways a trained professional might help you manage your long-term care crisis situation:
For more information on long-term care crisis planning, contact Davis & McCann, P. A., Dodge City, KS. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and Elder Law. We focus our practice on providing clients with the best legal advice on estate planning, Medicaid and Long-term Care Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate Transactions, 1031 Exchanges, and related matters.
If you’re one of the many small business owners who thinks estate planning is for wealthy, large business owners and executives, perhaps even multi-millionaires, think again.
Regardless of the size of your bank account or the size of your business, estate planning can be beneficial for everyone, especially for the small business owner. For many small business owners, their livelihood and family’s security are largely dependent upon the success of their business. Proper estate planning for small business owners can help protect both personal and business assets from creditors. Part of that planning involves how you choose to organize your business. The business structure you choose can also have a major impact on your taxes. You would be wise to review your business organization options to ensure your current or proposed business structure provides you with the best tax and asset protection.
Here’s a quick look at some of the business organizational options that are available in the state of Kansas:
November is Long-term Care Awareness Month. Statistics show that between 50%-70% of our population who reach age 65 will require long-term care at some point in their life. Losing all of one’s assets to pay for nursing home care is a legitimate concern for people. With the cost of a private room in a Kansas nursing home at approximately $70,000-$90,000 annually, it’s no wonder why senior citizens are looking for help to preserve at least some of their assets for their heirs.
Let’s review some facts about long-term care planning, specifically Medicaid planning. The purpose of Medicaid planning is to preserve your assets and set up your affairs in such a way that the State will pay the majority of your nursing home care costs, if or when the time comes. With good Medicaid planning, you should need only to contribute your income toward nursing home care costs. With Medicaid planning, the goal is to avoid selling your assets to pay for your long-term care. If you have a spouse still living at home, then Medicaid planning may also allow you to preserve income for that spouse rather than paying it to the nursing home.
When married couples consider Medicaid planning, the “best case scenario” is to retain the benefits of all their assets and still have Medicaid pay for nursing home care when the time comes. To accomplish this, all planning and funding should be completed five (5) or more years prior to one of the individuals needing full-time nursing home care. If you have less than five (5) years before an anticipated nursing home admission, other options exist to preserve assets, but those options are more limited and vary, based on circumstances.
A single person can also utilize Medicaid planning, although the percentage of assets preserved may vary, again depending on the circumstances.
Elder law generally, and Medicaid planning specifically, is a complex body of law and an area that sees frequent rule revisions. The application process can be a paperwork nightmare, so having an experienced professional to guide you through the system is advisable. You are not required to use an attorney to plan for possible nursing home admissions. However, most nursing home and social services professionals are not trained to provide sophisticated Medicaid planning advice, which can protect the greatest amount of your assets. Additionally, not just any attorney is qualified to advise you on your long-term care options. Look for an attorney specifically trained in Elder law and Medicaid planning issues to provide you with a plan of action to preserve the greatest amount of your assets, as allowed by law.
If you have questions about Medicaid or long-term care planning, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters.
Real estate encompasses not only one’s primary residence but also other real property such as a vacation home or a rental house. The ideal form of ownership varies depending on the type of real estate you own. Below, we take a look at the different types of real estate and offer advice about the recommended form of ownership for each.
Because your primary residence receives special tax treatment, you should carefully consider how your home is owned. In some states, tenancy by the entirety offers married couples creditor protection from the creditors of one of the spouses (with a possible exception for federal tax liens) while still preserving relevant tax benefits. It also allows automatic transfer of ownership to the surviving spouse upon the death of the first spouse without court involvement. Transferring ownership of the primary residence to a joint revocable trust may also be an option if you live in a state that allows the tenancy of the entirety protection to transfer to the joint revocable trust. Ownership by the trust also means that the real estate will not go through a lengthy, expensive, and public probate process but will instead be handled according to your wishes as specified in the trust document.
If you are single, owning the property in your name allows you to take advantage of tax benefits for primary residences. Transferring ownership to a revocable living trust may also allow you to retain the applicable tax benefits with the added advantage of avoiding the probate process. If asset protection is a major concern during your lifetime, certain types of irrevocable trusts are best suited for your needs but may require you to give up control of the property.
Estate planning—it is an incredibly important tool, not just for the wealthy or those thinking about retirement. On the contrary, estate planning is something every adult should do. It can help you accomplish any number of goals, including appointing guardians for minor children, choosing healthcare agents to make decisions for you should you become ill, minimizing taxes so you can pass more wealth onto your family members, and stating how and to whom you would like to pass your estate to when you die.
While it should be at the top of everyone’s to-do list, it can be an overwhelming topic to dive into. To help you get started, below are some important terms you should know as you think about your own estate plan.
Assets: Generally, anything a person owns, including a home and other real estate, bank accounts, life insurance, investments, furniture, jewelry, art, clothing, and collectibles.
Beneficiary: A person or entity (such as a charity) that receives a beneficial interest in something, such as an estate, trust, account, or insurance policy.
Distribution: A payment in cash or asset(s) to the beneficiary, individual, or entity who is entitled to receive it.
Estate: All assets and debts left by an individual at death.
Fiduciary: A person with a legal obligation (duty) to act primarily for another person’s benefit, e.g., a trustee or agent under a power of attorney. “Fiduciary” implies great confidence and trust, and a high degree of good faith.
We all have reasons for procrastinating when it comes to estate planning. However, before you put this important life decision back on the shelf again, you might want to know a few of the things that can happen to your money and possessions upon your death if you haven’t planned. These Kansas probate rules may encourage you to move just a little quicker to finish or update your estate planning.
Did you know?
These are just a few of the Kansas probate laws that control what happens to your money and property after your death. If you have questions about probate or estate planning matters, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters.
Q: My husband and I have amassed a nice bit of real estate during our marriage. We have been looking at doing an estate plan, but we aren’t sure how to address an issue we have with our son. Our eldest son is in a rocky marriage and none of us are convinced that the marriage will last, although he and his wife have been together for more than 10 years. My husband absolutely does not want our daughter-in-law to inherit any of our property if their marriage does last and our son dies before she does. Is there anything we can do to ensure that our son receives his inheritance, but upon his death, his remaining share would be redirected to our other children? Our other adult children are in stable, long-term marriages. If this was your family, what would you do?
A: You might be surprised to know that this is a fairly common dilemma for families, and it shouldn’t stop you from moving forward with estate planning. Given your situation, you would be a good candidate for a living trust. In a living trust you can easily stipulate that your son’s inheritance be held in an asset protection trust for his lifetime and upon his death, distributed outright or in trust to your other children. You can name a trusted individual to act as trustee over your son’s trust to ensure that distributions to your son are done prudently and in keeping with your wishes.
You may even want to consider putting ALL of your children’s shares into asset protection trusts. Your son may mend his relationship and one of your other children may have an unexpected divorce, bankruptcy or end up in a legal battle with a creditor due to an accident. Without the trust, your child’s inherited share would be vulnerable to their creditors. Additionally, if any of your children were to become disabled, either mentally or physically, and require government benefits, that child’s inherited share, if required to be held in a special needs trust, would be available to your child without preventing them from receiving their benefits.
If you do make the decision to have your children’s inheritance held in trust for them, you may want to talk with them to explain why their inheritance will be administered in this way and the benefits to them. This extra step of transparency can help alleviate possible friction that may arise if your children are under the impression that they will inherit their share outright.
If you have questions about type of estate plan, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters.
Don, age 82, and his wife were married for 45 years before she died. Don had no children but was very close with his extended family. After his wife died, Don revised his estate planning to name his sisters, Rita, age 72, and Catherine, age 78, as the sole beneficiaries of his estate. Rita was never married had no children and Catherine and her husband had 3 children. Don was especially concerned about how Rita might be cared for in her later years as she had no family of her own. He was relieved knowing that she would receive one-half of his approximately $200,000 estate when he died. It gave him peace knowing that she would be able to live a more comfortable life using this inheritance, perhaps going on several nice trips or enjoying a few luxuries.
While this sounded like a wonderful plan, Don didn’t anticipate that Rita’s health would decline rapidly and she would need full-time nursing home care a short time later. Rita qualified to receive Medicaid benefits after only a few short months and she was well cared for in the local nursing home. Don died two (2) years later and his estate was divided between his sisters just as he had instructed. Unfortunately, what Don didn’t understand was that Rita’s share of the inheritance automatically disqualified her from receiving her Medicaid benefits and she was forced to use her inherited money to pay for her nursing home care, instead of using it to make her life more comfortable. Within less than two (2) years, Rita’s inheritance was gone and she had nothing to show for it. Her level of care at the nursing home did not change and she was unable to use the money for any of the things that her brother wanted.
No one can predict the future but if Don had understood that Rita’s inheritance would only be used to pay her nursing home expenses previously being paid by Medicaid, he most likely would have made a different estate planning decision. If Don had revised his estate plan once Rita entered the nursing home to include a Special Needs Trust (SNT) a/k/a Supplemental Needs Trust, for Rita’s benefit, her share of the inheritance could have been held in trust to provide her with the extras that her brother had intended. The Trustee of the SNT would have been able to provide Rita with the things that she wanted or needed to make her life more comfortable, without the trust share disqualifying Rita from receiving Medicaid benefits.
This scenario illustrates why it is so important to review your estate planning regularly with your attorney, at least every 3-5 years. Be sure to inform your attorney if one of your intended beneficiaries is receiving government benefits or may be a recipient in the foreseeable future. By adding language to your estate plan that creates a SNT upon your death, your loved one can be guaranteed to receive their inheritance without disqualification from government benefits.
If you have questions about of special needs planning or any type of estate plan, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters.
Are you unwittingly making mistakes as an Executor of an Estate? If so, you could be in for a legal battle of your own! To help protect you in your role as Executor, we’re sharing a few of the most common mistakes we’ve seen made by Executors, that you’ll want to avoid.
You may find a point in time when your parent needs assistance with their finances. Taking over financial responsibility for a parent can be a touchy topic, but if done properly, can often provide a great sense of relief.
If you have been appointed as your parent’s financial power of attorney and the time has come to begin assisting them, here are a few pointers to ease the transition:
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