Estate Planning: Where Do You Begin?
In our last post, we started to examine the subject of estate planning preparedness, and we will follow up in this entry.
Estate Planning Preparedness
Caring.com has been conducting surveys each year of the estate planning preparedness of American adults. They say that the only two things in life that are certain are death and taxes. According to these studies, a lot of people ignore one of them.
The 2023 survey was released recently, and it found that 34% of respondents had estate plans in place. They have been conducting the studies for a number of years, and this figure is consistent give or take a point or two.
Curiously enough, 60 percent of the folks that participated stated that they do think that estate planning is important. They just haven’t gotten around to it, and one of the reasons is because they don’t know where to start.
With this in mind, we will share a few basic facts in this post to give you an idea of where you can begin.
Avoid DIY Planning/Look Past Simple Wills
The first thing we would like to establish is the ineffectiveness of the do-it-yourself estate planning downloads that you can buy online. As a layperson, you simply do not have a thorough knowledge of the things that can go wrong.
You may also fall into the “trusts are only for the wealthy” trap.
In reality, there are drawbacks and limitations that you have to accept if you use a will as your primary estate planning vehicle. A trust can be a far superior choice.
The revocable living trust is a device that is much more versatile than a will. It can accomplish more objectives in a simpler, more efficient manner. It is wise to discuss your options with an estate planning attorney before you make any firm choices on your own.
Evaluate Your Retirement Expenditures
Looking ahead to predict your financial position when you are a senior citizen is an imperfect science. Unfortunately, you can’t know the extent of the expenses that you will incur. This being stated, you can certainly get a general idea with different possible outcomes.
One thing that we should highlight here is the looming specter of long-term care costs. More than one third of seniors will spend the last portion of their lives in nursing homes, and these facilities are extremely expensive. We are talking about somewhere in the vicinity of $80,000 for a year in a private room in our area, and Medicare does not pay for long-term care.
There are strategies that you can implement to gain eligibility for Medicaid, which is a government health insurance program that will pay for living assistance. You may want to explore this possibility if you have concerns, and we can show you how to proceed.
Incapacity Planning
One of the reasons why people often reside in nursing homes is because they can no longer make sound decisions due to cognitive impairment. Of course, Alzheimer’s and other sources of incapacity strike people that are not residing in these facilities.
Plus, you could be incapacitated in some way even if you are not suffering from cognitive problems.
To account for this, you can execute documents called durable powers of attorney for health care. One of them can be used to name someone to make medical decisions on your behalf. You can also add a durable power of attorney for financial decision-making.
Getting back to the value of a living trust, if you have one of these devices, you can act as the trustee while you are alive and well. You could name a disability trustee to administer the trust in the event of your incapacity.
Take Action Today!
We have shared some of the basics here, but if you are ready to take the ultimate step, our attorneys are ready to spring into action.
Personalized attention is key, because each situation is different. We can get to know you, gain an understanding of your objectives, and help you develop a custom crafted plan that ideally suits your needs.
You can send us a message to request a consultation appointment. Our Tulsa, OK estate planning office can be reached by phone at 918-615-2700. The number for our Oklahoma City location is 405-843-6100.
After helping his own family deal with a lengthy probate and the IRS following his father’s untimely death in a farm accident, Larry Parman made a decision to help families create effective estate plans designed to reduce taxes, minimize legal interference with the transfer of assets to one’s heirs, and protect his clients’ assets from predators and creditors.
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