Oak Lawn Estate Planning | Elder Law - Planning for Sickness

I know that I have done a Medicaid post previously, but I have received so many calls lately that I thought it would be helpful to add another post with some additional information. If there is more you would like to know about Elder Law, I would encourage you to call and ask your question specifically, or post a comment to the blog if it is of a more general nature. I will start out the advice in this post with the most essential advice I can provide.

PLAN EARLY, DON'T SUFFER, IF YOU WAIT, IT WILL COST YOU

I wish that there was a mountain top I could shout this from. I know that your future poor health is not something that you want to think about, but without proper planning you will pay much more and perhaps receive inferior care. This brings you to the question, what is proper planning? In my humble opinion, proper planning is completing the following tasks long before you are sick.

1. Have a Power of Attorney for Property and a Power of Attorney for Healthcare drafted. These documents will be explained in a future post in more detail, but they are the best first step to take when you are healthy in the event of an emergency.

2. Have a Will drafted that acts as a Pour-Over-Will. A Pour-Over-Will is best described as a back up plan. A Pour-Over-Will does just as the name sounds, it transfers all property into another disposition vehicle. In most cases this is a Trust, which you would have set up in the past. 

3. Have a Trust drafted to hold your assets. There are generally two types of trusts. An Irrevocable Trust is like its own legal entity. This type of trust is to remove assets from your name so that you qualify for governmental benefits. A Revocable Trust is an instrument that will transfer property outside of probate after death. Probate avoidance is critical to speed disposition of property after death, especially is both spouses are ill. 

4. Complete a Medicaid application if you are eligible. I would recommend that you speak to an elder law attorney to help you determine if you are eligible, and if you are not, what steps you can take to become eligible. To find out more on Medicaid, check out my post here on Medicaid Eligibility. 

5. Speak to an Insurance Agent who is knowledgeable in Long Term Care Insurance. I will link to my two previous posts on long term care insurance here. Long Term Care Insurance part 1 and Long Term Care Insurance part 2. I can not stress enough how important it is that you speak to an agent who is very knowledgeable in this unique type of insurance. I would be happy to recommend one if you do not know an agent who handles this type of insurance. The reason you need a specialist in this type of field is because most agents sell very few of these policies and will just read to you the brochure. They have no idea if you are the type of person who can benefit from this policy. They are simply selling what they were told to sell. They have no idea when the product is useful and appropriate. 

6. Draft a Critical Document/ Information List. This is a document that includes all the critical information that loved ones will need in the event of your illness. An attorney with your best interest at heart will provide a comprehensive list of information that you should include in your Critical Document List. Before you decide on an attorney, find out how comprehensive they intend to be. There is more to Illness Planning than just legal documents. 

These six planning tools are important to have completed long in advance of getting sick. My recommendation is to have these tools in place before you turn fifty years old. The likelihood of needing some or all of these tools after fifty is much greater than before fifty. In the case of medicaid planning, you need to have your documents drafted, in some cases, five years before you need care. This is why I stress that proper planning be done well in advance of problems. Better to have things prepared in advance than have their benefit be diminished by waiting until the last minute. 

If you would like to speak to me about these issues, contact me at:

The Law Office of Jonathan W. Cole

5013 W. 95h St.

Oak Lawn, IL 60453

(708) 529-7794

www.jwcolelaw.com

Oak Lawn Estate Planning | Medicaid Planning

You may anticipate that you or a loved one will have to go into a nursing home in the future. You are worried about how you are going to pay for nursing home care. You know it costs between $4,000 and $7,000 a month.  This cost is well beyond the means that most families have saved to cover their medical needs. At $84,000 a year, most families can not keep up with the rising long term care costs. I have already spoken on the benefits of Long Term Care Insurance in an earlier post with a follow up on Long Term Care Insurance in this post. The problem may arise if you are too late to apply for long term care insurance. Long term care insurance is mostly for those who are health now. If you did not get insurance, medicaid planning is the method for you.

Medicaid planning is a very technical type of planning. I will start off the section on Medicaid planning with this warning, you should consult a professional before doing any type of asset transfer. I know you may be skeptical because I am a professional who does Medicaid Planning, but rest assured there is a good reason to go to a professional on this area. If you improperly transfer assets, you could be penalized for up to three times the amount of the asset transfer. This penalty is converted into a period of time and you will be excluded from Medicaid benefits for that many months. The purpose of this post is not to talk about the penalty for an improper asset transfer, but know that the penalty is much greater than it probably should be.

So how does Medicaid planning work? There are assets that are exempt and non-exempt. In order to qualify, you must have a total of non-exempt assets that are below the threshold allowable by Medicaid. This threshold is state specific because each state administrates the federal Medicaid program In Illinois, the Spousal Impoverishment Act allows a community spouse to keep $109,560 in non-exempt assets. It also allows a community spouse to earn a monthly income of $2,739 without having to contribute any of their income to the cared for spouses bills. There are some ways to ensure that your community assets meet this level, but the order of asset transfer must be precise and exact. An "auditor" for Medicaid will look back on any transaction that is made that transfer assets for the five years preceding the application to Medicaid or entry into a nursing home. The key for qualification to medicaid if to transfer assets from non-exempt property to exempt property in a method and manner that will not disqualify you from Medicaid benefits. The problem is if you transfer property in an improper manner, even if the ultimate goal is a proper asset transfer, you will suffer a severe penalty from Medicaid.

The other aspect of Medicaid planning is timely action. If you plan for Medicaid five or more years before you will need it, you will have many more options for transferring your money. You will have a myriad of trusts available to you .These trusts can transfer your assets to anyone you choose. You will not be limited to your spouse or disabled adult children. This is a big advantage for many reasons. You may not have any disabled children and you want to take advantage of tax breaks when giving money to your family. Additionally, you are not limited and under scrutiny with what you do with the money you earned.

If you would like to speak to a professional about Medicaid planning, call me at:

Law Office of Jonathan W. Cole
5013 W. 95th St.
Oak Lawn, IL 60453
(708) 529-7794

Oak Lawn Estate Planning | The Need to Follow Up

The problem with any plan is complacency. With the big three changes always happening, you can not rest on your estate plan forever. The big three being, 1) changes in the laws that effect your estate plan, 2) changes in your assets, and 3) changes in your family structure. In light of this obvious and inevitable change that will occur in the real world, people are stuck believing that their static plan for their assets will be good forever. It is like taking a picture today, only to be curious about why you do not look like this 20 years later.

 The excuses are endless. It costs too much money, it is impossible to know how many changes should prompt me to re-evaluate my plan. I don't have time to update my plan. The list goes on and on. I am always perplexed by the ignorance of people. Good intentions are not enough. You need to take action. If I could yell this any louder, I would lose my voice and my neighbors would be mad at me. You need to take action. If your estate plan provides for your darling two children, who are now both college graduates and getting married themselves, you are long past time. I will give you a rough guide to go by, for determining your re-evaluation period.

No major changes to the big three (see above) - every 7-10 years
A major change to any one of the big three (see above) - every 3-5 years
A major change to any two of the big three (see above) - every 1-3 years
A major change to all of the big three (see above) - see your attorney immediately

If you have a decent relationship with your lawyer, you can probably ask him or her to review your estate plan, and there will be no changes that need to be made or only a minor change. In most cases, this minor change will cost very little and you will now have a current estate plan. In most cases, you would not need to draft a new Will or Trust. All that will be needed is a codicil to your current Will. I can not stress enough how frustrating a stale Estate Plan can be. In some cases, a stale Will or Trust can frustrate the entire purpose that it was meant to support. Please keep you Wills current. As always if you would like to know more about the Will, Trust, and Power of Attorney Process contact:

Law Office of Jonathan W. Cole
5013 W. 95th St.
Oak Lawn, IL 60463
(708) 529-7794

Oak Lawn Estate Planning | More on Long Term Care Insurance

In yesterdays post, I told you how having long term care insurance is one aspect of Estate Planning that is often overlooked. Today I will answe the top five questions I recieve about long term care insurance.

1. What are the odds I will need long term care? The answer is it is probably prettly likely you will need to pay for some long term care. As advances in medical technology increase the average age of the population, the numbers of individuals that that need long term care in increasing by leaps and bounds. A good number of individuals now have major surgery sometime throughout their lives and need to stay at a nursing home or need substantial help to stay at home.

2. Where can long term care services take place? A big falacy is that you must go into a nursing home to get long term care. This is not the facts. You can recieve long term care in a nursing home if you choose, but it is also available in your home or in a community living complex. There is a good deal of flexibility in where your care can take place. It is nice to know that you can be cared for in the comfort and privacy of your own home.

3. Aren't I covered by my medical insurance? As a general rule you are not. Long term care normally is not classified as medical treatment. Insurance companies usually do not cover the type of care that is needed. Hospice might be covered by your medical insurer but general long term care is not.

4. Can't I spend my savings on my care? Of course you can. There is no reason you shouldn't spend all of the money you saved your entire life on caring for yourself. In fact, I would encourage paying your own way and not being a burden on the Government. My suggestion is to purchase the proper insurance to achieve the same results, but still retain your assets. That way you can leave them to your children or favorite chairity. Or if nothing else, you can spend it on your hobby of collecting rare baseball cards.

5. So how does long term care insurance work again? There is a major difference between these two concepts, Medical Care and Activities of Daily Living (ALD). Long term care helps you pay for the ALD's you need when you are sick and recovering. You will need someone to help you get dressed in the morning, make breakfast, clean up after yourself, etc. These are not considered medical treatments but still are necessary to maintin a basic standard of living. Medical care pays for drugs and shots. Long terms care pays for lifes activities, and not just the fun ones.

 I hope this helps you understand the benefits of long term care insurance. Please consider it in your estate planning and call the Law Office of Jonathan W. Cole to get an estate plan in place.

Law Office of Jonathan W. Cole
5013 W. 95th St.
Oak Lawn, IL 60463
(708) 529-7794

Oak Lawn Estate Planning | Long Term Care Insurance

You are probaby asking yourself, "Why is an attorney talking about insurance?" I thought attorneys estate planing was all about Wills, Trusts, Powers of Attorney, and eligibility for State and Federal programs. That may be true for most attorneys, but to have a real comprehensive plan your attorney should consider every aspect of your future. This includes your life insurance, health insurance, IRA and pension, title of your home, finacial future of your children and even your long term care. If your attorney is leaving out a portion of your future, how can you trust him or her to help you plan.

 You future planning is like a boat. You need everything to be right before your boat leaves the dock. Only a fool would have a great hull on a boat but leave without a motor. No one in their right mind would leave the dock without fule for their engine. Who would like to be on the sea with no fresh water? Obviously, no one would think of heading out into the sea with this type of preperation. So why would you accept only partial planning for your future.

Now you know that a comprehensive Estate Plan includes long term care insurance, but what is long term care insurance. The nutshell version of long term care insurance is that it provides funds for you if you become incapacatated and can not take care of yourself. This insurance does not just apply to the elderly. If you were in an accident and needed to be cared for 24 hours a day for a couple years while you are recovering, long term care insurance will cover it. If you develop a disease where you need help injecting yourself and getting dressed. Long term care insurance will cover it. I could go on and on about the benefits of long term care insurance, but I will give you this fact and let you think about it until my next post. The national average annual cost of a private room in a nursing home is over $79,000.00 a year. That is $217 dollars a day. This type of expenditure can quicky depleate the asses of any size estate. Especially if you multiply this cost by two for a married couple.If you would like to have an estate to leave your children, consider long term care insurance as an integral part of your estate plan. Look for more about long term care insurance in upcoming posts.

 If you would like to know more about how to start your own estate plan. Call the Law Office of Jonathan W. Cole to find out how a will trust and power of attorney can get you on the right tract for the future.

Law Office of Jonathan W. Cole
5013 W. 95th St.
Oak Lawn, IL 60463
(708) 529-7794

Chicago Estate Planing | Meeting Your Attorney For The First Time

So after much thought and deliberation, you have decided you need an estate plan. You already know, from my previous post, not to ask "What does a Will Cost?"  The question is, what should you ask and what should you bring into your first meeting? If you have a good attorney, he or she should have already sent you some information. The information may consist of a letter, a questioner, and/ or a financial assessment. I personally send all three to a client before I meet the client for the first time. The letter that I send to a client helps the client know what to expect of the estate planning process. The questioner helps the client get into the frame of mind that is necessary to know who are potential people for testamentary gifts. It also helps the client know what property they have and know about, and what property they have and might have forgotten. It also helps a client understand that the title of property (i.e. the way your deed is titled) is important for estate planning purposes.

 So now you have the proper documentation for your first meeting with your attorney. What else should you have. I have found that the most satisfied clients bring with a small notebook and a pen and ask questions that they have prepared before the meeting and take down my answers. After the meeting with me, they look over their notes and the information I have told them can sink in. By having questions in advance, you can wait until I explain the process to you, and when my explanation is done you can ask any questions that I may have not addressed. Without those preset questions, you may be overwhelmed with other parts of the Estate Planning process and forget to ask some of the questions you wanted to know. Additionally, I usually cover some part of the Estate Planning process that my client never heard of before. By coming prepared with questions and have a notebook to jot down new concepts, you will feel better about your initial consultation and have a more pleasant estate planning process. I would love to hear from you about your estate planning needs in the comments below. If you need an estate plan, contact my office, The Law Office of Jonathan W. Cole, or learn more about Estate Planning on my offices estate planning page. Good luck with your estate plan.

 Jonathan W. Cole