With uncertainty about when – and even if – Congress will fix the estate tax or pass “permanent” estate and gift tax legislation, there’s a temptation to postpone estate planning. But that’s not a good idea, in part because there are many non-tax reasons for you to talk about estate planning with your clients.
Most of us will need some type of assistance with our daily living activities for at least a while before we die. Care can be provided in your client’s home, in an assisted living facility or in a nursing home.
The planning issue is that all options can be expensive:
At a relatively modest $16 per hour for just 25 hours a week, home health care easily can run over $20,000 per year.
Assisted living facilities can cost more than $25,000 annually, especially in such high-cost communities as the Chicago suburbs.
Nursing home facilities, with round-the-clock care, are easily $70,000 or more a year.
Statistically, 43 percent of Americans age 65 and older will need nursing home care; the average stay is more than two and one-half years. As you likely know, most insurance plans and Medicare do not cover long-term care, which means the cost will need to be paid from your client’s assets. A long-term care insurance policy can help.
Our experience at Huck & Brisske, LLC indicates that many of your clients will be concerned about who will provide the care and where they will receive it. Most may prefer to stay in their home for as long as possible, although others may enjoy the companionship and social aspects of an assisted living facility. However, incapacity can deprive a client of the ability to make her, or his, desires known and implemented.
It’s best for planning to be done while the client can be an active participant.
SPECIAL NEEDS PLANNING
A Special Needs Trust is a critical planning component for families with a special needs person. This trust can provide the ongoing support the special needs individual requires without jeopardizing government benefits.
According to the Census Bureau, there are quite a few special needs situations:
51.2 million Americans have a disability.
About 15 percent of U.S. families have a child with special needs.
15 of every 1,000 children born in the U.S. had an Autism disorder.
The planning issue: Thanks to medical advances, many children with special needs now outlive their parents or caregivers. Planning that does not include specific provisions for the special needs person can have disastrous consequences, including the loss of valuable government benefits.
Planning Tip: A properly constructed trust can include disability provisions that will assure that your client’s desires are (1) clearly expressed and (2) carried out.
INHERITANCE PROTECTION PLANNING
Protecting an inheritance from predators, creditors, divorce or just plain irresponsible spending is an important concern for many parents and grandparents. Fortunately, the attorneys at Huck & Brisske, llc, are skilled in developing trusts that offer clients assurance from these concerns.
The planning issue: Actually, there are two planning issues.
Planning Tip: Insurance on the life of a parent, grandparent or other relative can provide the trust funds necessary to pay for care and extras that are not provided by government benefits.
Many clients believe that their children and grandchildren lack financial skills and therefore may “waste” their inheritance by living too extravagantly – or may be vulnerable to questionable creditor claims and scams.
Difficult economic times increase the likelihood of divorce. Most clients do not want to see their hard-earned money ending up in the hands of a former daughter- or son-in-law.
BLENDED FAMILY PLANNING
More divorce leads to more marriages and blended families – and, for many clients, more concerns that estates are distributed as the client wants.
The planning issue: Each parent in a blended family needs to make certain his, or her, children are protected, especially if the parent leaves a surviving spouse. Failing to develop the proper legal and financial protections can leave some children unintentionally disinherited or, at the very least, create a messy probate battle.
Planning Tip: Your client’s trust can include provisions to protect inheritances from divorce and creditors – and from the beneficiaries themselves.