Our attorneys know how important it is that people of all ages begin their estate planning efforts early. In November 2019, one of our founding attorneys, Terence Ricaforte, gave a presentation at a senior living health and financial expo in Bay Ridge which focused on helping attendees protect their assets, ensure that their property is passed onto their loved ones, and put a plan in place that will last the rest of their lives.
Wise Words From Estate Planning Attorney Terence Ricaforte
Many senior citizens assume that once they have created a last will and testament, their estate planning is complete. This could not be further from the truth. A solid estate plan will include a variety of documents, each one with its own legal merit.
Documents that you should have in place as soon as possible include:
- Financial power of attorney. This simple but vital piece of paper can prevent a financial tragedy for your children and loved ones. You appoint an agent (or co-agents) who can handle your finances, pay bills, change banks, consolidate bills, and make other money-related decisions on your behalf. If you do not appoint a power of attorney and you suddenly become incapacitated, your family members will have to go to court to win the right to assume control of your finances. This can take six months or longer, and all fees and court costs will be paid using (and depleting) your assets.
- Healthcare proxy. A healthcare proxy designates a person who will make life or death medical decisions on your behalf if you become incapacitated. It is also a good idea to include a HIPAA authorization form in your medical record so that your proxy has permission to access your past and future healthcare records.
- Living will. This document gives directions on your wishes for end-of-life treatment, including whether you wish to be resuscitated or kept on life support.
Don’t Depend on Medicare to Pay for a Nursing Home
Medical costs are expected to rise as we age, with the majority of Americans living out the end of their lives in a long-term care facility. While Medicare will pay for doctors and prescriptions, it does not pay for a nursing home—and paying for a nursing home out of pocket could cost tens of thousands of dollars.
On the other hand, Medicare’s sister benefit program Medicaid will pay for a nursing home if you meet certain eligibility requirements, including:
- Assets. An applicant cannot have more than $15,450 in their name.
- Income. If you apply for home care, you must make less than $859 per month ($1,267 per month if you are married). If you intend to enter a nursing home, you are allowed to keep the first $50 of your monthly income. The rest will go to the nursing home facility.
As you may imagine, these income and asset levels are extremely difficult for a person to live on (especially in New York). While you may be tempted to simply “give away” assets by retitling them in a family member’s name, this usually creates additional problems. For one thing, homes that have appreciated in value will be subject to a capital gains tax. If the home becomes part of your family member’s estate, the family member has the right to sell it, or it can be repossessed if the family member is sued or goes into debt.
The best way to ensure eligibility is to create and fund a Medicaid protection trust. If you place your assets and surplus income in a trust, it will be preserved for you for the rest of your life and pass directly to your beneficiaries upon your death. Nearly any kind of property from homes and vehicles to savings accounts can be included in a trust—and funds from the trust can be used to pay for improvements to trust properties. If your home is in the trust and it needs a new roof, trust funds can pay for the expense without jeopardizing your Medicaid eligibility. Best of all, you retain control over the trust during your lifetime, allowing you ownership and access to the things that matter most to you.
If you have questions about your estate plan or need help creating a customized solution for your financial and physical health in retirement, our legal team can walk you through the process and ensure your wishes are respected. Contact us today to speak to an attorney about your life care plan.