Baby Boomers, Pay Attention!

When planning for retirement, boomers need to consider two scenarios: what happens to their estate when they die, and what happens to the estate if they live but aren’t healthy and need to rely on others for assistance on a permanent basis. Creating an estate plan can help protect boomers’ assets and make sure their wishes are played out in the event of death or if they become disabled and need long-term care and support.

Fox Business recently published an article titled "Estate Planning Mistakes Every Boomer Should Avoid." The article reported that the majority of seniors are completely in the dark on one of the biggest financial risks they are facing. That is the catastrophic costs of long-term care.

According to the U.S. Department of Health, 70% of the U.S. population over age 65 will require long-term care, and over 40% will need nursing home care for some period of time. Most people do not have insurance coverage for this risk and believe inaccurately that Medicare covers their long-term care. That is just not the case, and without planning, if care is needed, life savings are quickly wiped out. Fortunately, there are solutions that will protect an individual's assets and income, and at the same allow access to Medicaid benefits. An experienced elder law attorney will have the knowledge and background to provide you with needed advice and the skills to design a strategy that will achieve your goals. A well-drafted estate plan is a wise investment to ensure that your assets are passed to your beneficiaries efficiently—in a manner that avoids conflicts among your heirs and that minimizes costs.

The original article reminds us that an estate plan should take into account the financial risks of health care that may be needed, especially long-term care. If not, you could end up with no assets in the estate, and your fantastic estate plan will be worthless. 

Here are some of the most common long-term care mistakes:

1)     Tying up your money in long-term investments with no liquidity or with a penalty to get to your money.

2)     Not ensuring the adequacy of long-term care insurance benefits, that you have an inflation rider, and that you can afford the premiums.

3)     Make sure that you have proper and adequate advance directives in place (Power of Attorney and a Health Care Proxy). Do not just use standard forms from the Internet.

4)     Mismanagement of your real estate.

5)     Not taking advantage of penalty-free transfers when applying for government benefits like Medicaid, and mistakenly spending down on private pay home or nursing home care.

6)     Staying in an investment instead of diversifying because you do not want to pay capital gains taxes. A good investment strategy should look at the risk of staying in one or two investments that could lose value, especially if you may need funds for your long-term care needs.

Read more in the original article, including the biggest estate planning mistakes. This should get you thinking about your plan and how to you can avoid these mistakes. The way to start is to speak with an experienced estate planning attorney.

You can learn more about this topic as well as other strategies on our website under the tab entitled: elder law planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning. 

Reference: FOX Business (August 21, 2014) "Estate Planning Mistakes Every Boomer Should Avoid"


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We've been putting together as many resources as possible so that we can continue to help:

  • If you’re a current client with a signing appointment or a prospective client with a consultation and would prefer that meeting take place in your own home, we can accomplish that with a little bit of pre-planning on our part and with the addition of a laptop, smartphone, tablet or other computer in your home to facilitate this virtual meeting. For those of you that need to sign legal documents, that too can be accomplished with the use of a webcam (FaceTime etc.), so that we can witness and electronically notarize all of your important legal documents.
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Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.