Sunday, April 7, 2019

Bonnie Kraham: There’s no reason not to have an estate plan

Studies consistently report that most people have no will or estate plan. A Gallup poll in 2016, in 2017, in 2018 and other surveys confirm that most Americans have not planned. Depending on the study, as many as 60 percent have not done their estate planning.
The reasons most people put off estate planning are many — it’s depressing; I’ll get to it someday; it’s unpleasant to think about death and disability; I’ll leave it up to the kids to take care of everything when I’m gone; I’m too young; it’s only for the wealthy; and on and on.

Much is at risk by not planning — your money, civil liberties and control of your life.

Elder law estate planning covers several protections. Elder law is about protecting assets from nursing home costs and naming people who will manage your affairs if you are incapacitated. Estate planning is about leaving assets to your beneficiaries the way you want, when you want, with the least amount of court costs, legal fees and family disputes over the inheritance (known as will contests.)

Wills are documents used in probate court if you die with assets in your name alone. Many people incorrectly think a will is the most important estate planning document. Few people know that wills are documents used in probate court. As opposed to wills, living trusts avoid probate for the assets in the trust, and save time, money and avoid will contests.

Other important documents are advance directives called powers of attorney and health care proxies/living wills. Ahead of time you name people who will make decisions for you if you are incapacitated. Powers of attorney are for legal and financial decisions. Health care proxies are for medical decisions. Living wills give end of life directions such as resuscitation. If you have not signed your advance directives and become incapacitated, you are at risk of a guardianship proceeding, where a judge appoints a legal guardian for you. You may lose control of your finances, your health decisions, where you live and other civil liberties that are taken for granted. Guardianship proceedings are expensive, time consuming and invasive into your privacy. Everyone 18 and older needs a power of attorney and health care proxy.

The Medicaid Asset Protection Trust (MAPT) protects assets from nursing home costs after the assets have been in the trust for five years. You keep your assets for your family rather than the nursing home. The stakes are high. Nursing homes cost between $12,000 and $18,000 per month in New York.

It is easy to think you are too young for planning. On the contrary, it is recommended that parents of minor children sign wills, powers of attorney and health care proxies/living wills to protect the surviving spouse if one spouse dies, avoid guardianship proceedings and name legal guardians for the minor children.

Bonnie Kraham is an attorney practicing elder law estate planning with Ettinger Law Firm, 75 Crystal Run Road, Middletown.

This column is intended to provide general information, not legal advice.

Full Article & Source:
Bonnie Kraham: There’s no reason not to have an estate plan

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