Goals Of Legal Protection

asset-protectionYou wake up one morning and realize you’re 60 years old. Don’t panic: 60 is the new 40. You’re in relatively good health, physically and financially, and you’re nowhere near ready to see Saint Peter just yet. But in the back of your mind, you know you’ve put off making plans. Why? Maybe you’re a procrastinator. If this is you, you’re in good company; 80 percent of people admit to procrastinating from time to time, while 20 percent are chronic procrastinators. Or maybe it was the obituary you read yesterday morning, of someone your own age – a perfect stranger, for that matter – passing away unexpectedly that sparks motivation.

But this morning, you realize it’s time to take action.

After sipping your morning coffee and reading the paper or scanning the Internet for the latest news, you start to second-guess your first decision. Do I really need to do this, and right now? Do I want to spend the money on this? The answers are, yes , yes and yes. There are some simple reasons for legal protection.

  • You have control over your property while you’re alive.
  • You have a say in how you or loved ones are taken care in case you become disabled.
  • You can give what you have, to whom you want, while you’re still alive.
  • Save on professional fees and court costs.
  • Protect your assets if you were to enter a nursing home.

Let’s pretend for a moment: you own a time share in Boca Raton, or have a Honus Wagner baseball card safely tucked away in the safety deposit box. Who do you want to get that after you’re gone? Who do you prefer to get it? Now is the time to make those wishes known. You control your property. You have the say on who gets what, but there is one step you must do. Your wishes need to be in writing.

You might think, well, last Thanksgiving Uncle Lou said I could have the Wagner baseball card. Hearsay doesn’t cut it after you’re gone. Record it, get it notarized. Better yet, put it in a will or have a trust drawn up by a qualified elder law attorney that protects all of your assets: the baseball card, the time share, your permanent home, the car, stock accounts, personal checking account, whatever else you want to put in it.

Let’s keep pretending for a bit. Six months from now, you’re in a car accident, sustaining a brain injury that incapacitates you. You find yourself in a long-term care facility, and the chances of you making a one-hundred-percent recovery aren’t good. If you’re smart and planned ahead, your wishes will be written down somewhere. In legalese, it’s called a living will or advanced directives. That is a set of written instructions that specifically outlines what actions should be taken for your health if you are no longer able to make decisions. You could go a different route and appoint someone (a family member or close friend) your Power of Attorney (POA), a person who knows what your wishes are and will do what’s in your best interests. Realize, your POA may have to make difficult decisions, such as whether to continue medical care if there is no chance of recovery.

Let’s look at another topic in the same train of thought. You have a middle-aged special needs child who lives in an institution. There is the strong possibility that your child will outlive you. What then? There are proper legal tools and measures that can be used that will provide for your child after you are gone. In many cases, it’s in some form of a trust. On a more positive note, you want to set up a modest trust to help pay for the grandchildren’s college education. College is expensive, and this extra bit of money may make a difference. The time to set up that trust is now.

No one likes to pay unnecessary costs or fees. But it’s a reality if some simple steps now to prepare. Do you have a will? How about POA? Those are simple legal documents everyone should have. It might cost a couple of hundred dollars now to have a POA and other legal documents created. But let’s look at what the flip side would be. Without a POA, you don’t have a say as to who handles your estate. It’s up to a judge in a courtroom. And the court-appointed guardian doesn’t know you from Adam, doesn’t know what your wishes are; he’s a clinically-removed third-party representative there to do a job. Remember the Honus Wagner card? There’s the good possibility it could end up with someone other than a family member.

The last thing on your mind is entering a nursing home. No one wants to. But face it, it’s a reality. You have a 50-percent chance of spending sometime in a nursing home. Ninety-percent of nursing home residents are age 65 and older. Depending on your finances, you might be able to private pay for part of your stay, but with average monthly nursing home bills costing $6,000 a month or more, estimates show you could burn through your life savings in 18 months and applying for Medicaid is more of a reality. Ask yourself: how would you rather see get your money, the nursing home or your family? Your family, of course. By taking the time now and seeking out financial and estate planners, you can start protecting your assets so you won’t go broke in a nursing home.

When a person applies for Medicaid, the state studies the applicant’s financial history for the last five years. This is called the Five-Year Look-Back. Any gifts to children, civic groups, etc…, are looked at, and, depending on when it was made, a gift could disqualify a person for Medicaid for months. However, working with financial and estate planners and elder law attorneys who are familiar with revocable and irrevocable trusts, a lot of these problems can be avoided.

There is one underlying theme to this article, and it has to do with pre-planning. Pre-planning eliminates so many problems, but we have a tendency to spend more time planning for our Super Bowl party or the family vacation to Hilton Head than sitting down with a financial or estate planner or elder law attorney and making life decisions. It can’t be reiterated enough how important pre-planning is. Yes, it will cost you money and a few visits to the lawyer’s office to get the documents hammered out, but isn’t it worth it in the long run? Do you really want to burden your family with these issues after you’re gone?

Now that you’ve finished that second cup of coffee, let your fingers do the walking through the old-fashioned print Yellow Pages or visit Google and find an elder law attorney in your area who can take what you need from an idea to reality.