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When Should You Begin Estate Planning?

Written by kwmlaw on February 12, 2017. Posted in Kelly & West News.

Estate planning may seem like one of those things you can do “later.” But in truth, it’s never too early to begin thinking about your estate. Life happens, and anything could happen to you or a loved one sooner than expected. The sooner you can sort out your affairs for your surviving family members the better.

What is Estate Planning?

Estate planning is the process of determining what happens when you die or are incapacitated. It can be a tough, sometimes uncomfortable thing to think about, especially when you are in good health, but unfortunately many people overlook this process and when tragedy strikes it is that much harder for their loved ones to manage everything. Generally speaking, the estate planning process involves creating a will and designating a power of attorney and a medical power of attorney. In some cases, estate planning can also include a trust and funeral planning requests.

How to Begin Estate Planning

Assets — The first step in the process is to take stock of all of your assets. These include any investments, your retirement accounts, insurance policies, real estate, business interests and other financially or emotionally valuable items. This would include things such as jewelry, cars, baseball card collections — basically anything that might hold deep personal significance to you.

Will — The next step involves creating a will, which will indicate what you want to happen with those assets after you’ve passed and who should inherit them. This part of the process also involves setting up a fund for any long-term care you might need in an assisted-living facility or nursing home, appointing guardians for your children, or setting up a trust for a child with a disability. You should re-evaluate and update your will often to reflect any changing circumstances in your life such as a new marriage, divorce, or new children and you should consider review your plan at least once every 3-5 years, even without a change in your circumstances to make sure your plan is up to date.

Business & Personal Affairs — During this time, you also want to carefully consider who you would want to handle your business affairs and medical care in the event that you become incapacitated. These individuals would have power of attorney and medical power of attorney if anything were to happen to you. Thus, it is very important that you choose individuals whom you trust and know will respect your wishes.

Next Steps

After making your individual bequests, it is important to sit down and discuss your plans with loved ones. The sooner you clearly outline your intentions to your family and friends, the less likely there will be disagreements that arise after you’ve gone.

Remember that every estate plan is unique. If you would like to begin the process of estate planning, contact us so you can start planning for your future immediately.

How to Protect Your Assets When You Go Into a Nursing Home

Written by kwmlaw on June 7, 2016. Posted in Kelly & West News.

If you have to move into a nursing home or another type of assisted living facility, who will pay the high costs for care? Will you be able to keep any of your money to leave to your family? Or will the government take everything you have?

These questions and many others are often asked by clients who are concerned about their future. The average cost of nursing home care is approximately $6,300 per month. That means even if you have assets, you might be spending through them very quickly — especially if you end up staying in the facility much longer than expected — so proper planning is crucial.

Why Protect Your Assets

In North Carolina, generally speaking Medicaid will pay for nursing home care if you “spend down” your assets so that your “countable assets” do not exceed a house, car and $2,000 in the bank. Once you have met the threshold test, Medicaid will pay the difference between your income and the facility rate for care.

At Kelly & West, we work with clients to design a plan to protect your assets. By making your “countable assets” “non-countable assets” we can work to make sure what you own is not counted by Medicaid and that you qualify for government assistance. For example, you may be allowed to have up to $40,000 in government bonds and these bonds be considered “non-countable assets” or you can use your money to prepay for your funeral arrangements, as long as you have a plan that complies with Medicaid’s rules and regulations.

Photo credit: LendingMemo via Visualhunt / CC BY

Who Will Qualify?

Not everyone will be able to qualify for Medicaid. People with IRAs, stocks, bonds, and other money might not be able to spend down or move it all to a non-countable form in order to qualify.

Also, some people might qualify, but might not want to do this. Many people prefer not to rely on the government for their care, especially since they may receive better care by privately paying for it.

Those who have paid for long-term health care insurance also may not want to obtain government assistance. If insurance is covering the cost of your care, this may leave your assets intact and available to pass to your family. But be careful, not all long-term care insurance contracts provide enough to cover the costs of care. Or, if you have a “traditional” long-term care policy, this could just mean that you are only saving the government money as this would just be considered income to you and may not help you as much as you think.

Make a Plan Now

A lot of people thinking about a nursing home are in their mid-60s and are likely still too young to want that type of care just yet. However, buying long-term care insurance at that age means paying a much higher premium. That’s why many people come to us and discuss these options early. We can develop a plan of action now for when the time comes later. We are happy to talk to you to discuss your options as this can be a great relief to you and you can end up saving your family quite a bit of money, time and headache in the future if you have a plan in place.