Two Phases of Estate Planning

Let’s talk today about the two phases of Estate Planning. When we begin with a Revocable Living Trust and then move to a Medicaid Irrevocable Trust and which is appropriate and what phase you may be in.

            First a life event brings them into my office whether it’s the birth of child, or contemplating retirement and we’re discussing whether a will or a trust-based estate plan is right for them. I’ll share with them that a trust-based plan allows them to avoid probate, allows them to avoid the 6-12 month process that probate entails, not to mention the legal fees of the probate process.

            I’ll speak with them about how a trust-based plan allows them to avoid litigation and malpractice suits if they are a professional.  And then finally, I’ll discuss with them how trust-based planning allows them to pass their assets on to the next generation, free of concern, of possible divorces with those heirs, that they may never contemplate at that moment.

            Next, as the years progress, we enter into the second phase of estate planning and move into what many law firms call: Elder Law.  Elder law, in its simplest form is securing your assets for you surviving spouse and the next generation and protecting them from the rapid spend down of nursing homes or assisted living.

            Often time in the Richmond to Williamsburg, Virginia area we’re looking at nursing home care of $7-9,000 per month.  Tabulating that over months and years, we suddenly realize it won’t take long to see significant assets depleted quickly. If we’re able in time to capture those assets and put them in the proper trust, a new irrevocable trust, we’re able to secure those assets and protect them from that rapid spin down.

            Realize that Medicaid pays for about 80 % all nursing home and assisted living beds in the country.  But unless your assets are properly protected, they will require you to spend down your assets first before Medicaid commences.  By securing them early, we’re able to ensure that Medicaid needs to pay for that nursing home facility and assisted living care, if we meet early enough.

            I look forward to meeting with your family, whether if you’re in the first or second phase.  Whether you just had a child or are contemplating an active retirement or your entering the Elder Law years and one of you needs assisted living, and we can assist by properly protecting your assets to secure Medicaid pays for that nursing home.

            I look forward to meeting with you and your family.

(Notes)

2 Phases of Estate Planning

2 Phases

Retirement Trust and Elder Law Trust

    (Revocable)

1. Retirement Trust

• Avoid probate
• Protect assets from being taken in litigation
• Preserve assets from divorcing heirs, and being taken by their spouse
• Primary assets to your next generation, via trust, to give the trust the same worth.
• Ensure if incapacitated, the family’s assets are preserved and managed properly.

    (Irrevocable)

2.  Elder Law Trust

• A husband needs assistance with one or more of his daily living activities and the wife can no longer help by herself.
• They need additional help
• The cost of nursing home or assisted living care can cost up to $7500 - $9000 per month
• An Irrevocable Trust can help avoid rapid spend down
• We can convert their Revocable retirement trust into an Irrevocable Elder Care Trust to protect assets
• 80% of beds in nursing homes are funded by Medicaid, a trust will protect assets from spend down.