At Kulas Law Group, we receive a wide variety of questions about estate planning and elder law each day. While there are always unique questions in the mix, it often seems that many share common themes. Here are some examples of the types of frequently asked questions we hear as well as answers that can help to shed new light on commonly-shared concerns.
- “Do I Really Need a Will?”
- “Can I Create My Own Will?”
- “Is a Will Enough?”
- “Do I Need a Trust?”
- “Can My Revocable Trust Reduce My Taxes?”
- “Could a Power of Attorney Help Me?”
- “Do I Have to Spend All My Money to Get Medicaid?”
- “What If My Life Circumstances Change?”
Yes, you need a will. Everyone should have at least a Last Will and Testament to help settle his or her affairs. Now, from a purely legal standpoint, you could of course just leave things as they are and allow the state’s intestate succession laws to determine how your assets get distributed, but that might not have the results you’d prefer. Your favorite would-be heirs might receive far less than you’d prefer, while others that you might choose to ignore could receive inheritances that you’d have never left them in a will. Your best bet is to deal with the issue yourself and create that will.
This is another touchy subject for many people. With all the self-created wills and form documents you can find on the internet, many people now believe that there is little need for an attorney. Obviously, you can create your own will, but that doesn’t mean that it will accomplish your goals. And since you probably don’t have the training to know how a valid will needs to be crafted, there’s always the chance that your Last Will ends up being invalidated when you die anyway. Why take that chance?
It could be that all you really need is a simple will when it comes to your asset distribution needs. If your assets aren’t overly complex, then you may not need other tools like trusts. You should, however, consider other planning needs – like an incapacity plan. Everyone should have a will, as well as incapacity documents like a power of attorney for your financial needs, a living will, and an advance directive to ensure that health care decisions are made in accordance with your wishes.
You may or may not need a trust, depending on your situation. If you have no need to avoid probate, have relatively few heirs, and don’t have any special beneficiary or conditions to address, then a simple will may be more than enough to meet your needs. On the other hand, if you have minor children, disabled heirs, pets that need to be cared for when you’re gone, or other unique challenges that need to be addressed, then a trust may be the perfect way to accomplish those goals.
Let’s be clear: revocable trusts won’t provide you any income tax or estate tax benefits – regardless of what you may read or hear in other venues. The fact is that your revocable trust never truly separates you from the assets in the trust, since you can revoke the trust at any time. When the tax agencies see that trust, they see assets that you can choose to access any time you desire – and that means that they view them as part of your estate. Income that is generated by the trust is viewed as your income, and assets within the trust are counted as part of your estate for estate tax purposes. If you’re looking for tax benefits, your best option is to talk to your attorney about an irrevocable trust.
A power of attorney can be a powerful way to protect your interests. Some powers of attorney are great for accomplishing short-term limited goals in cases where you cannot represent your own interests. Others are important for ensuring continuity of decision-making in case you lose the capacity to manage your own affairs. Though you may not need this power under ordinary circumstances, you should make sure that you use it at least once in your life when you create a durable financial power of attorney as part of your incapacitation plan.
You may indeed have to spend down your assets later in life just to qualify for Medicaid benefits to pay for that nursing home stay. When seniors discover that they need nursing home care, they often find that they have too many assets to meet the program’s eligibility standards. That often leaves them spending all their money on care or executing a spend-down to get their assets below those limits. You can preserve and safeguard some of those assets with careful Medicaid planning, especially if you can begin at least five years before you ever apply for benefits.
It’s almost a certainty that your life circumstances are going to change at some point in the years between now and your death. New heirs will be born and others will pass away. That doesn’t change anything where the need for estate planning is concerned, however. You still need to act now to create the plan that’s right for your current and anticipated needs. And then, as your life inevitably changes over time, you can revisit your strategy from time to time to ensure that you update beneficiaries, end or create trusts as needed, modify your will, or make other updates to keep your plan as relevant as possible.
At Kulas Law Group, we can help to guide you through all these complex issues to ensure that your estate planning and elder law needs are properly addressed at every stage of your life. We can help you to better understand how the various components of estate planning can impact your life and legacy, and provide you with strategies that protect your assets and your loved ones. If you’d like to learn more about issues related to this estate planning FAQ or discuss other planning concerns, contact us online or call us today at (772) 398-0720.