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5 Reasons You Need an Estate Plan Regardless of Wealth

5 Reasons You Need an Estate Plan Regardless of Wealth



5 Reasons You Need an Estate Plan Regardless of Wealth

There are at least 5 reasons you need an estate plan regardless of whether you are wealthy or not.  This is a popular myth in estate planning, that it’s only for those with a lot of money.  In reality, every adult should have an estate plan and the older you get the more crucial it becomes.

So here is why estate planning and wealth have no connection.

#1  If you have minor children, you need to name guardians for them.  

If you have minor children, I want you to imagine who would take care of them if you were gone.  Aunt Leslie?  What is Aunt Leslie doesn’t want to take care of them or she is gone.  Who is the next option?  Does your partner agree?  The reality is that if you or if you are married, if you and your spouse pass away with minor children, SOMEONE will have to be named guardian for them.  Under Missouri law, anyone can file to become the guardian.  But what if you could have a simple document drafted where you said in advance who you wanted to be the guardian?  That is part of your estate plan.  It’s called a guardianship nomination and we can create the document by itself or make it part of your will.  The best part is that you can discuss it with your chosen guardians in advance, make sure they would accept and then plan for having alternates in case they can’t act.

#2  So you don’t own much, but chances are you own something.  

If you don’t own much, guess what?  You still need an estate plan.  The good news is that it’s a simpler plan.  Say you and your spouse have a home with about $25,000.00 in equity.  You have some small retirement accounts and a car.  Do you really want to have your family spend a lot of time, money and effort navigating their way through probate when you can devise a much cheaper option and have it ready to go in two weeks?  Probably not.  We can draft wills just in case you need them, but if your plan is to give everything to your adult kids equally and the kids get along, we can also probably tell you how to avoid probate easily and potentially without a will.

#3  Who will take care of you if and when you become incapacitated and/or disabled?

We don’t like to think about this, but we’re all going to get old.  Not one of us can avoid this fate and life changes.  But we don’t know when or how our lives will be in twenty or thirty or fifty years.  We just don’t know.  If you become incapacitated, however, life will move along regardless.  Bills will still have to be paid, tax returns must still be filed, banking will still have to be done and decisions and choices that we make every day (and take for granted) will still exist.  But who makes them if you can’t?  Answer:  If you get an estate plan, the agent named in your power of attorney.  Contrary to popular belief your spouse cannot make many decisions for you simply by reason of them being your spouse.  You need a power of attorney for that.  And we’ll plan for your spouse being incapacitated as well by naming alternates.  If you trust your kids (hopefully you do) then we can name them as alternates.  If not, we have a plan for that as well.

#4  Planning for disability / incapacity / health problems.  

If you become incapacitated you might have other problems.  Healthcare decision making.  Who will do that?  Answer:  Your agent as named in your healthcare power of attorney.  Say you’re in a coma for a long period of time, decisions have to be made, medical records have to be reviewed.  This is, of course, regardless of your financial status.  The document that allows this to happen is a healthcare power of attorney.  You absolutely need to have this document.

#5  Have an end of life plan.

Americans are living longer than ever before.  But not necessarily the greatest quality of life at the end of their life.  It’s tough to think about but in the age of Medicare, healthcare is about quantity not necessarily quality.  That could mean that near the end of your life a bunch of procedures are done that are not necessary or that cannot heal whatever health problem you have.  Part of any estate plan should be a living will / advanced directive.  In this document, you give a set of instructions to your healthcare power of attorney as to which treatments that you don’t want if you are terminally ill.  You’re not in that condition today, but by creating this document, you are planning for it in the future.  And the effect it has is that it lets your agent know that it’s okay to withhold these treatments.  Better still, it is not an all or nothing document.  There are provisions that allow you to keep trying treatments as long as they are making progress for you.  If not, then you have informed your agent so know they should be withheld.  No guesses need to be made and they’ll have peace of mind knowing that you went to the trouble of creating a legal document to make it clear what you wanted.  That’s powerful and it’s why you need a healthcare power of attorney and living will / advanced directive.




Caring for Mom and Dad as they age…

Probably one of the best things about being an estate planning and elder law lawyer is that I get to work with and help seniors.  I am often dealing with the adult children of elderly parents as they are suddenly dealing with a crisis with Mom or Dad or a slow evolving process of needing to help them out as they age.

There are two main issues for us to discuss if you are helping an elderly parent.  The first issue we need to discuss is whether Mom and/or Dad have their estate planning in place and updated.  Do they have a will?  Is there a trust?  Have their assets been transferred into the trust?  Is there a recent power of attorney allowing you to make decisions for them (if they want you to do that)?  The cutoff for completing estate planning is competence.  Once a person loses competence, we lose a lot of ability to proactively complete estate planning for them.
There are alternatives.  Without a power of attorney, we’ll have to file a petition for guardianship to have the court appoint you as the legal representative.

We usually see outdated or incomplete estate planning with older clients and that’s why it’s especially important that we tackle this issue first.  Because going forward, those documents have to be done before it’s too late.

The second issue is whether Mom or Dad should stay at home, can move to an independent living facility (the next best thing to being at home), should go to assisted living or must go into skilled nursing.  This largely is going to hinge on their medical condition and whether Mom or Dad wants to move.  If they are going to a facility the question then becomes how are they going to pay for that?  It is one of the unfortunate quirks in our healthcare system that physical ailments (such as heart problems / strokes) are paid for nearly in full by Medicare, regardless of age, but diseases such as Alzheimer’s and other forms of dementia are not covered when they require more extensive and prolonged care for their patient.

Depending on the type of facility, there are a few different ways to pay for long term care.  The first is private pay.  Next and best is long term care insurance.  Then there are government programs such as VA Aid and Attendance and Medicaid.

VA Aid and Attendance is available to veterans and surviving spouses of veterans who have served one day in a war time period, had 90 days of active duty and were discharged honorably, are in need of the “aid and attendance” of another person with the activities of daily living and have limited assets and income.

Medicaid is a federal program administered through the states and is much more stringent in the amount of assets an individual can have (in Missouri, less than $1000.00).

No matter what the circumstances, you will need a competent estate planning and elder law attorney to guide you through the process.  Estate planning and elder law has a lot of moving parts and they are constantly changing.