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Davidow, Davidow, Siegel & Stern, LLP
Long Island's Elder Law, Special Needs & Estate Planning Firm

Friday, January 30, 2009

10 Reasons to Create an Estate Plan NOW

Many people think that estate plans are for someone else, not them. They may rationalize that they are too young or don't have enough money to reap the tax benefits of a plan. But as the following list makes clear, estate planning is for everyone, regardless of age or net worth.

1. Loss of capacity. What if you become incompetent and unable to manage your own affairs? Without a plan the courts will select the person to manage your affairs. With a plan, you pick that person (through a power of attorney).

2. Minor children. Who will raise your children if you die? Without a plan, a court will make that decision. With a plan, you are able to nominate the guardian of your choice.

3. Dying without a will. Who will inherit your assets? Without a plan, your assets pass to your heirs according to your state's laws of intestacy (dying without a will). Your family members (and perhaps not the ones you would choose) will receive your assets without benefit of your direction or of trust protection. With a plan, you decide who gets your assets, and when and how they receive them.

4. Blended families. What if your family is the result of multiple marriages? Without a plan, children from different marriages may not be treated as you would wish. With a plan, you determine what goes to your current spouse and to the children from a prior marriage or marriages.

5. Children with special needs. Without a plan, a child with special needs risks being disqualified from receiving Medicaid or SSI benefits, and may have to use his or her inheritance to pay for care. With a plan, you can set up a Supplemental Needs Trust that will allow the child to remain eligible for government benefits while using the trust assets to pay for non-covered expenses.

6. Keeping assets in the family. Would you prefer that your assets stay in your own family? Without a plan, your child's spouse may wind up with your money if your child passes away prematurely. If your child divorces his or her current spouse, half of your assets could go to the spouse. With a plan, you can set up a trust that ensures that your assets will stay in your family and, for example, pass to your grandchildren.

7. Financial security. Will your spouse and children be able to survive financially? Without a plan and the income replacement provided by life insurance, your family may be unable to maintain its current living standard. With a plan, life insurance can mean that your family will enjoy financial security.

8. Retirement accounts. Do you have an IRA or similar retirement account? Without a plan, your designated beneficiary for the retirement account funds may not reflect your current wishes and may result in burdensome tax consequences for your heirs (although the rules regarding the designation of a beneficiary have been eased considerably). With a plan, you can choose the optimal beneficiary.

9. Business ownership. Do you own a business? Without a plan, you don't name a successor, thus risking that your family could lose control of the business. With a plan, you choose who will own and control the business after you are gone.

10. Avoiding probate. Without a plan, your estate may be subject to delays and excess fees (depending on the state), and your assets will be a matter of public record. With a plan, you can structure things so that probate can be avoided entirely.

Source: www.elderlawanswers.com

Friday, January 9, 2009

What does the Recession mean for Long-Term Care?

Certainly, the current economic downturn is not going to affect the needs of some seniors for help with activities of daily living. But it could affect where that help is provided -- at home, in assisted living or in a nursing home. And it could affect who provides the care -- a family member or someone who is hired.

Here are a few likely trends:

Most nursing home care and, increasingly, care at home as well, is covered by Medicaid. This is a joint state-federal health care program for people who are "poor" under its complicated rules. Even before the current recession, Medicaid was growing and straining the ability of states to pay the cost. This has caused states to restrict eligibility for benefits. Such restrictions are likely to tighten further.

With fewer people working, more will be available to care for family members at home, perhaps delaying or avoiding the move to assisted living or a nursing home.

With money becoming scarcer for just about everyone, families will be more reluctant to pay for nursing home, assisted living or home care. This may result in more beds and services being available and a decrease in costs. In fact, according to the 2008 MetLife Market Survey of Nursing Home & Assisted Living Costs, over the past year the cost of semi-private rooms in nursing homes increased just 1.1 percent and the cost of private rooms did not change, in contrast to increases that substantially exceeded the inflation rate in most recent years.

We are likely to see bankruptcies of nursing homes and assisted living facilities if they cannot fill their beds as anticipated and if Medicaid and Medicare reimbursement rates are insufficient to cover their expenses. Facility shut downs will be very disruptive to residents as well as to their families.

With alternative jobs less plentiful, the supply of qualified care providers should grow.

Planning ahead is even more important, whether purchasing long-term care insurance, protecting assets to qualify for Medicaid, or simply making one's wishes known ahead of time.

Even prior to the onset of the recession, many more alternatives to nursing home care were being developed, including assisted living, new home care models, community partnership programs, and increased Medicaid coverage of care provided in the community. Anyone providing care for a senior needs to do much more research about the alternatives available.
These changes are not all bad. Fewer Americans working quite as hard as most adults have in recent years should allow more time for us to care for our loved ones and to find the right solutions among the increasing number of care choices available.

A qualified elder law attorney can help your family explore care alternatives and how to pay for them.

Source: www.elderlawanswers.com