People in the Bay Area tend to be optimists, especially when it comes to their estate planning. First, they believe that whatever assets they have amassed will last them forever, regardless of what life throws at them. More specifically, they often think that they will not get severely incapacitated, will not need long-term care, and that their assets won’t be taxed or caught up in probate. But many years in this business have taught me that none of those are safe assumptions. Ask yourself an honest question—are your assets at risk? Will you run out of money late in life? If you do not have definitive answers to those questions today, you need to speak to an experienced California estate planning attorney. I ask my clients these hard questions and then help them work towards protecting themselves, their loved ones, and their assets for the future. If you have questions about incentive trusts or any other area of estate planning, call experienced Bay Area attorney Linda J. MacKay today at 408-379-9600.
How Will You Pay for Long-Term Care?
Long-term care can devour your savings. Many people erroneously believe that Medicare will pay for a nursing home or long-term care at home. The fact is, it won’t. Medicare only pays for long-term care in a nursing home when you require skilled nursing care administered by professionals. While many people eventually get to that stage, most people spend a decade or more only needing general custodial care such as bathing and meal assistance. That earlier stage of care can completely deplete your savings and investments.
Because Medicare is not a viable option for most people requiring long-term care, two remaining options remain. You can either pay out of pocket, which will quickly eat away at whatever savings you have left or apply for Medicaid coverage. Medicaid coverage is need-based, however, so you will still have to spend down your assets before getting this coverage.
Working with an estate planning attorney can help you avoid having to reduce yourself to poverty to receive the basic care you need in your later years. It is essential to work with an estate planning attorney to set up a trust to protect your wealth before this is an issue, however, as it is often too late to make serious changes if you are already in need of long-term care.
What if You Become Incapacitated?
Regardless of how fit you feel at this moment, you cannot guarantee that you will be healthy and of sound mind until the day you die. Many people become physically or mentally incapacitated. If you become unable to manage your assets due to incapacitation, the courts may appoint a guardian to manage your assets. The guardian will then distribute your assets as he or she sees fit, but not necessarily as you would want your money spent. To avoid this unfortunate situation, you need to have a durable power of attorney, which allows you to control who manages your assets in the event of your incapacitation. This is a simple document to create, but you must sit down with an estate planning attorney to draft it before becoming incapacitated. Too many people put this off and suffer as a result.
Will Your Estate Diminish Because of Unnecessary Probate and Tax Issues?
Many people do not worry about the probate process or post-death taxes. But if you want to retain your assets’ value, you need to be concerned about both. You do not need to have the vast majority of your assets pass through the probate process. This is important because an asset such as a business can languish, fail, and lose all value while trapped in the probate process. Similarly, hefty estate taxes that diminish your estate’s value can also be avoided. In both instances, an experienced estate planning attorney can help you create a trust to avoid both probate and estate taxes.
If You Need Estate Planning Help, Call San Jose Asset Protection Lawyer Linda J. MacKay Today
An experienced estate planning attorney must carefully draft incentive trusts and other estate planning tools if they are going to meet their intended goals. Attorney MacKay has the experience to help you through this challenge and to guide you around pitfalls that snare people who try to handle these issues alone. Contact the Law Offices of Linda J. MacKay today at 408-379-9600. We are standing by to help you with your estate planning questions.