Thanksgiving is often a time when family members both young and old come together to eat too much good food and watch too much football. What better time to start a discussion about estate planning than Thanksgiving, when the family is gathered together? Here are five questions to get the conversation started.
- Have you planned for how you will pay for long-term care if it’s needed? Many children find it awkward and uncomfortable to bring up the subject of money with their parents. However, planning ahead for the possibility that a parent will need long-term care is crucial. The cost of long term care, whether at home, in assisted living, or in a nursing home is very high. The monthly cost of a nursing home in Massachusetts is around $12,000 and the cost of round-the-clock care at home is often more than that. Long-term care costs are not generally covered by health insurance (Medicare). These costs are generally paid through a combination of: 1) paying privately for care; 2) long-term care insurance; or 3) Medicaid. Paying privately means that the care recipient simply writes a check for the cost of the care each month. Long-term care insurance is insurance purchased for the purpose of paying for long-term care. Medicaid is the state and federally funded program that will pay for long-term care if a person meets the financial eligibility criteria of the program. In general, this means having not more than $2,000 in so-called countable assets. If you are over age 60 and have never thought about how you would pay for long-term care, now is a good time to explore your options.
- Do you have a Will and Trust to protect your young children if you die? It’s not just older folks who need to think about planning for the future. Many young parents put off estate planning because they’re too busy, they can’t agree on who should be named as guardian for their minor children, or their budgets are tight. However, as parents our job is to protect our children. Making sure that your children are not the subject of a protracted custody battle in the event of your death by choosing the person, or people, who would raise your children if you could not, is a fundamental duty of all parents. Further, many people are surprised to learn that the law considers 18 the perfect age at which to receive an inheritance, regardless of the amount. For many parents, the thought of their child receiving $5,000, never mind $50,000 or $500,000, at age 18 is terrifying. A trust is an excellent way for parents to protect assets for children and designate appropriate stewards (Trustees) to manage the money until the children have matured.
- Do you have a Durable Power of Attorney? A Durable Power of Attorney is a legal document in which the maker (the principal) designates a person (the attorney-in-fact) who will have the authority to manage the principal’s financial affairs. It is used to address the possibility of a future incapacity. Since anyone could experience a period of incapacity regardless of age, every adult, whether age 18 or 88, should have a Durable Power of Attorney. Without a Durable Power of Attorney in place, your family will be forced to pursue a conservatorship through the probate court if you are in an accident or suffer a medical event that renders you unable to pay your bills, manage your investments, file an application for long-term care benefits, sign a tax return, etc.
- Do you have a Health Care Proxy and have you discussed your wishes for care with your Health Care Agent? As with a Durable Power of Attorney, every adult should have an advanced directive designating the person (the Health Care Agent) who is authorized to make health care decisions in the event of incapacity. In Massachusetts, that is called a Health Care Proxy. However, it is not enough to simply sign a Health Care Proxy; you should have a serious discussion with your Health Care Agent regarding your wishes for managing your health care if you are not able to speak for yourself. Many people think of the Health Care Proxy as the “pull the plug” document. However, the reality is that there are many types of decisions that need be made for a person who is incapacitated. These decisions may affect the quality of your final days. A great resource to help you dive deeper into this discussion is Being Mortal by Atul Gawande, M.D. Check it out here and start the conversation.
- When is the last time you reviewed your estate plan with your attorney? As we all know, time rushes by. This seems especially true as we get older. It is not unusual for clients to say, “I can’t believe it’s been 10 years since we were here – it seems like it was just a couple of years ago.” Your estate plan is a work in progress and it needs to be reviewed and updated on a regular basis. Life happens; things change. It may be that issues that were not of concern when the documents were signed are now important. This could include the need for long-term care planning, tax planning, or creditor protection planning for a child who is getting divorced. Ask your parents to take a minute to check the date on their estate plan documents to see when they last updated them with their attorney, and then do the same yourself. If it’s been more than five years, chances are a review is in order.
- Bonus question: Once you’re done covering the hard stuff, you can wrap up with, ”So how ‘bout those Pats?”
To all of our readers from all of us at Samuel, Sayward & Baler LLC, warm wishes for a wonderful Thanksgiving!
Attorney Suzanne R. Sayward is certified as an Elder Law Attorney by the National Elder Law Foundation, a private organization whose standards for certification are not regulated by the Commonwealth of Massachusetts. She is a partner with the Dedham firm of Samuel, Sayward & Baler LLC. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit www.ssbllc.com or call 781/461-1020.