How to avoid probate, save estate taxes, protect assets from nursing home costs
Estate Planning consists of several legal documents created to avoid probate, save estate taxes, protect assets from nursing home costs, and appoint people to act for you during disability.
The main instruments of a plan:
- A revocable living trust (RLT) which avoids probate.
- An irrevocable Medicaid asset protection trust (MAPT). This also avoids probate, but, protects assets from nursing home costs five years after the date of transfer to the trust.
- Inheritance trusts may be added to protect the inheritance from children's divorces, lawsuits and creditors, and to keep the inheritance for the grandchildren rather than in-laws or strangers.
- A power of attorney appoints people to handle your legal and financial affairs to help avoid a guardianship proceeding if you become disabled. Broad gifting powers allow your agents to make gifts, if needed, with the advice of an elder care planning attorney, so that you may qualify for Medicaid.
- A health-care proxy appoints someone to make medical decisions if you no longer can. The living will states that you do not want life support if you're in an incurable condition with no chance of recovery.
At a minimum, your estate plan should be reviewed at least every three years to check for changes in health, finances and other circumstances, and to review any relevant law changes. The goal is to keep the plan current in case of disability or death.Tags: asset protection, elder care, elder care attorney, estate planning, irrevocable trust, revocable trust