Frequently Asked Questions
What estate planning documents should I have?
A comprehensive estate plan should include a Last Will and Testament (will), a General Durable Power of Attorney (financial power of attorney), a Healthcare Power of Attorney and possibly a trust if recommended. There are other planning tools that an attorney may recommend based on your particular situation, especially as you age and you begin to plan for your long-term care needs.
I am married. Do I need a will?
Yes. Although assets owned jointly between you and your spouse may transfer automatically to your surviving spouse, assets that are owned in your sole name do not automatically transfer to your surviving spouse. Assets that are in your sole name without beneficiary designations would be distributed pursuant to your Will and your final wishes as you designate.
Without a will, those assets may go pursuant to your state’s law which could me your children, parents, or siblings may inherit certain assets. A will would also allow for you to designate your final wishes and beneficiaries should your spouse predecease you or die simultaneously with you. Lastly, creating a will while married could provide you the opportunity to protect assets for the benefit of your spouse after you are gone.
What is the difference between a will and a living will?
A will, also referred to as a Last Will and Testament, is designed to transfer your assets according to your wishes upon your death. A will also names someone to be your Executor, who is the person you designate to carry out your instructions. A will only becomes effective upon your death.
A living will informs others of your preferred medical treatment should you become permanently unconscious, terminally ill or otherwise unable to make or communicate decisions regarding treatment. In conjunction with other estate planning tools, it can bring peace of mind and security while avoiding unnecessary expense and delay in the event of future incapacity.
Do I need a power of attorney now?
You should create a Durable Power of Attorney now in order to be prepared for when you are no longer able to make your own decisions. A Durable Power of Attorney is a document that gives authority to another individual to carry on your financial affairs in the event you become disabled or incapacitated. Without a Durable Power of Attorney, it may be necessary for one of your loved ones, including your wife or adult child, to petition a court to be appointed guardian in order to make decisions for you when you are incapacitated.
What if I don’t have any family to be my power of attorney or executor?
Trustworthiness, good judgment, and availability are the key factors in selecting someone to act as your agent under a Durable Power of Attorney or as your executor under a will. A spouse, adult child, sibling or niece/nephew are often initial choices, however, a good friend whom you can count on to be in close attendance can be a valuable member of your response team, especially if you do not have family available to help or they are distant.
Outside of family and close trusted friends, there are professional agencies who you can name as your agent or as part of your response team to help make decisions on your behalf both financially and medically.
I moved to Indiana, do I need to update my will and power of attorney?
If you have current documents in place those documents are still valid documents if you move to Indiana. However, we always recommend to update your documents to encompass Indiana law for the ease of administration of such documents. We even encourage our clients to review their documents if their health, assets, or family situations change, or at least every 3-5 years to ensure that everything is still according to their wishes, that their designated persons are the same, and the laws have not changed.
Should I have a living trust?
The simple answer is, it depends on your situation. A trust can be a great tool to have if you have assets in your sole name without beneficiary designations or if you just want to avoid probate. Like a will, a living trust is a legal document that provides for the management and distribution of your assets after you pass away.
However, a living trust has certain advantages when compared to a will. Unlike a will, a trust allows for the management of your affairs during your lifetime including in the event that you become incapacitated. A living trust allows for the transfer of assets after death without court interference. With a properly funded living trust, there is no need to undergo a potentially expensive and time-consuming public probate process. In short, a well thought out estate plan using a living trust can provide your loved ones with the ability to administer your estate privately, with more flexibility and in an efficient and low-cost manner.
What is the benefit of long-term care insurance?
Long-term care insurance covers the risk that you may at some point in your life need extra care such as in-home health care, assisted living care or nursing home care by paying for some or all the expenses associated with such care. Long-term care insurance can be a very valuable tool that can help you avoid depleting your estate in order to pay for care costs.
Nursing homes greatly vary in cost depending on the facility type and the geographic area of the country in which the care facility is located. Quality long term care insurance is available at a reasonable price to persons who are young and healthy. Typically purchasing this coverage before age 60 is the best planning strategy.
How do I leave an inheritance to my child of family member with special needs?
You can leave an inheritance for a spouse, child or other family member with special needs to a special needs trust. A well drafted special needs trust can provide management of funds for a special needs individual to be used as you direct as well as protect assets for purposes of government provided benefits such as SSI and Medicaid.
Additionally, an individual with special needs who receives funds such as an inheritance can create their own special needs trust to hold the inheritance and still provide that protection for public benefit programs.
When should a special needs trust be established?
- A testamentary special needs trust is designed to protect assets for the surviving spouse’s long-term benefits under the management of a designated Trustee and is created under the Last Will and Testament of the spouse when they are completing their estate planning.
- A 3rd party special needs trust is a specific trust in which parents or family members of a special needs individual creates provisions to set aside funds which are managed at the discretion of a trustee. This type of trust can be created during the parent or family members estate planning or at the time they wish to fund such trust with inheritance for the special needs individual.
- A 1st party special needs trust is used for a special needs individual who has received a financial windfall either through a legal judgment, settlement, or inheritance and who receives, or may need to receive, public benefits. This type of trust is typically created when the special needs individual receives or will receive shortly such funds.
Do I need guardianship over my loved one?
A guardianship is the name for a judicial proceeding in which someone is appointed by the court to look after the financial and/or personal affairs of another. If a power of attorney for a person’s finances and/or healthcare have not been formed, a guardianship becomes necessary when a person becomes incapable of managing his or her money and property. A guardianship is also necessary when the person is incapable of making decisions about living arrangements or health care.
What is the difference between Medicare and Medicaid?
Although their names are confusingly alike, Medicaid and Medicare are quite different programs. Both programs provide health coverage, but Medicare is an “entitlement” program, meaning that everyone who reaches age 65 and is entitled to receive Social Security benefits also receives Medicare (Medicare also covers people of any age who are permanently disabled or who have end-stage renal disease.).
Medicaid, on the other hand, is a public assistance program that helps pay medical costs for individuals with limited income and assets. To be eligible for Medicaid coverage, you must meet the program’s strict income and asset guidelines. Also, unlike Medicare, which is totally federal, Medicaid is a joint state-federal program. Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive federal money, which pays for about half the state’s Medicaid costs (the state picks up the rest of the tab).
Should I wait until I need Medicaid before seeing an elder law attorney?
No, if you anticipate needing Medicaid at any point in the foreseeable future, it’s prudent to seek the advice of a qualified elder law attorney. There are steps you can take to protect your assets which may not be available when you actually need Medicaid. Some of those steps may include transferring your assets or establishing trusts. An elder law attorney with expertise in Medicaid planning can evaluate your situation and advise you on the most prudent steps to take in order to preserve your rights and maximize benefits.
I have too much money, I won’t ever need or qualify for Medicaid?
Medicaid does have an income and asset limitation requirement for eligibility. However, the average cost of a nursing home stay has greatly increased over the last few years and can range from $8,000-$11,000 a month. Even someone who has a nice nest egg can deplete their savings rather quickly for long term care.
You also want to make sure that if you leave a surviving spouse at home that your care costs do not leave them impoverished. Planning for Medicaid in advance can assist with ensuring that you receive the care you need in a timely manner and that the legacy you intended to leave your loved ones remains intact.
What is VA Aid and Attendance?
The Aid and Attendance pension program provides cash payments to veterans who served during a period of war or conflict to help cover the costs of home care, assisted living and nursing home services. The veteran’s surviving single widow(er)s are also eligible for a cash payment as well.
The Veterans’ Administration (VA) provides a monthly pension for qualified wartime veterans or their surviving spouse who are unable to work due to either a non-service connected disability or age. The Aid and Attendance benefit is part of this pension program. In order to be eligible for the pension, the veteran or veteran’s spouse must meet basic eligibility, disability and financial need tests.
What is probate and how do I avoid it?
When a loved one passes away, his or her estate often goes through a court-managed process called probate or estate administration where the assets of the deceased are managed and distributed. If your loved one owned his or her assets through a properly drafted and funded living trust, it is likely that no court-managed administration is necessary, though the successor trustee needs to administer the distribution of the deceased.
The length of time needed to complete probate of an estate depends on the size and complexity of the estate as well as the rules and schedule of the local probate court. Every probate is unique, but most involve the following steps:
- Filing of a petition with the proper probate court
- Notice to heirs under the will or to statutory heirs (if no will exists)
- Petition to appoint executor (in the case of a will) or administrator for the estate
- Inventory and appraisal of estate assets by the executor/administrator
- Payment of estate debt to rightful creditors
- Sale of estate assets
- Payment of estate taxes, if applicable
- Final distribution of assets to heirs
For more information regarding the above topics or on any of our service areas you may wish to download our Legal Planning Guide.