Estate Planning for Older Adults

Advocacy is an important need of older adults as they strive to preserve their independence and protect their interests.  For example, strong advocacy is needed to: protect life savings, deal with incapacity, find quality long-term care (whether at home, in assisted living or a nursing home), and qualify for government benefits to pay for long-term care (such as Medicaid and VA benefits). Elder Law attorneys use specialized legal tools and strategies to augment the “advocacy power” of older adults facing these situations.

Older adults require specialized estate planning. Classic estate planning focuses on avoiding probate, protecting assets from creditors, reducing taxes, and distributing inheritances.   Older adults today, however, have the added concerns of financial security in post-retirement years, preserving independence and dignity, and having enough money to pay for good quality care.  CMDA’s elder law attorneys help older adults balance all these concerns through comprehensive, holistic planning and precisely tailored estate plan documents.

As people age, their estate plan documents may not be aging with them. Young and middle-aged clients typically engage in planning before there is any hint of a chronic illness or threat to mobility or capacity. Many make the mistake of thinking their legal documents will suffice for every situation. The reality is that legal and estate plan documents need to be tailored to the specific needs of the present season of life. A 75 year-old person with grown children may be less concerned about their children’s inheritances than they are about the implications of a diagnosis of Parkinson’s or dementia.  As people age and transition through the different seasons and circumstances of life, they should make sure that their plans are transitioning with them.

How can older adults make sure they have the right plan and estate documents in place?  

• Plan as early as possible. Too often, older adults wait until a crisis hits before asking an attorney for help. Usually the crisis triggers with symptoms of dementia, onset of a chronic illness or admission to a hospital/rehab unit. At that point, some planning opportunities may no longer be available. Thorough pre-planning can preserve options and reduce complications when a crisis hits a family. An attorney should be contacted as soon as there is a hint of a health problem with long-term implications.
• Update existing estate plan documents. As a rule of thumb, estate plans should be reviewed at least every five years to account for changes in life, assets, and laws.  Older documents may not include important powers needed by older adults for creative problem solving such as allowing transfers of assets between spouses, authority over retirement plans, and the ability to take steps to qualify for Medicaid, VA, and other government benefits.  If important powers are missing, responsible family members may not have authority to make significant decisions or be able to take advantage of legal strategies that could save assets.
• Carefully select caregivers and money managers. A plan is only as good as the persons authorized to execute it. Older adults should carefully select the persons who will act on their behalf, especially when facing the increased likelihood of incapacity. A spouse or the oldest child is not always the best choice. It is important to carefully distinguish between persons who will make good health care decisions and those who will make sound financial decisions. If necessary, two or more persons can serve at the same time. Accountability can be built into documents to reduce the risk of inappropriate decisions and attempt to prevent family squabbles.
• Position for government benefits, if available. Long-term care is extremely expensive, with nursing homes costs averaging between $85,000 and $100,000 per year. Long-term care costs are usually not covered by Medicare or health insurance, and many older adults do not have the personal resources to privately pay for the care they will need.  Public assistance may be available through Medicaid and the VA to help pay for care, but these programs have strict financial and legal requirements. CMDA elder law attorneys routinely guide clients through the confusing legal maze and help them steer clear of mistakes that can jeopardize eligibility for benefits. With advance planning and the help of knowledgeable attorneys, many older adults can position themselves to qualify for the maximum government benefits available to supplement their personal funds, and protect spouses or disabled children from impoverishment.
• Avoid costly mistakes. When faced with a health crisis and the threat of costly care, older adults and their families often make knee-jerk decisions that hurt them financially. Examples of potentially costly mistakes include: giving money/property away; adding children’s names to accounts or deeds; selling assets; buying inappropriate financial products; and acting without legal advice. These and other mistakes can result in unnecessary loss of assets and ineligibility for Medicaid and VA benefits.
• Recognize special planning situations. Some situations require navigating multiple solutions and the attendant, complex legal issues.  An older adult facing any one, or combination of, the following scenarios will benefit greatly from the knowledge and guidance of the elder law team at CMDA:   1.  Married couples where only one spouse needs skilled or nursing home care. 2.  Older adults with fading mental capacity. 3.  Older adults without surviving or dependable family members to oversee their care or manage their assets. 4. Older adults with real estate or business interest with limited cash available to pay for assisted living or nursing home care.
• Build a team of professionals.  The best plans are built from the combined knowledge of an experienced team.  The team may include select family members, attorneys, physicians, care coordinators, and financial advisors. When surrounded by a team, an older adult can face the future with assurance that their needs will be met and decisions will be made in their best interest.

Today’s world presents many threats to the well-being and financial security of older adults.  In order to overcome these challenges it is essential to have up-to-date estate plan documents that are tailored to specific, present needs. The elder law attorneys at CMDA skillfully and compassionately provide older adults and their families with the right plan for the right time.

Norman E. Richards (Gene) is a partner in our Livonia office where he focuses his practice on elder law and estate planning. Drawing on 20 years of experience, his mission is to help clients safely navigate life’s transitions through the skillful, practical, and compassionate application of comprehensive elder law and estate planning services.

As an elder law attorney, Gene guides senior clients in planning for their future care needs. This includes maximizing financial resources to pay for the cost of long-term care. As an estate planning attorney, Gene develops customized legal documents for each client’s unique needs, such as wills, trusts, and power of attorneys; disability and special needs trusts; estate plans for blended families; and business succession plans. 

He may be reached at (734) 261-2400 or nrichards@cmda-law.com.