Now more than ever we need to focus on our wellbeing and that of our families. This pandemic serves as a reminder that everyone should have properly executed estate planning documents and a “long term care plan.” As part of this realization, one might be tempted to take “knee jerk” actions that, ultimately, will NOT be in the best interest of you or your loved ones. For example:
- Do Not Resort to “Do it Yourself” Estate Planning Documents. No matter what you have heard, there is no such thing as a “one-size-fits all” estate planning document. We see every day that the attempt to “save money” by drafting your own estate planning documents consistently results in costly attorney intervention after death or incapacity. Estate planning is a highly personal practice; it boils down to much more than names of individuals and numerical values. While it may be tempting to try using a do-it-yourself online estate document service or just writing something up yourself, these poorly drafted documents may only cost you or your heirs additional money in the end. It is impossible to know, without a legal education and years of experience, what the right legal solution is to any situation and what planning opportunities are available.
- Do Not Add Your Children’s Names to Assets. Many people believe that an ‘easy’ way to avoid probate or to enable their children to assist them as they get older is to add their child to their bank accounts or even to the deed to their home. Most of the time this strategy backfires. Your asset could be at risk if: your child gets sued; your child goes through bankruptcy / divorce; your child decides they need the asset for their own well-being; the child is on Medicaid, Disability or SSI; you need nursing home care in the next five years (adding the child will be seen as a penalizing gift and prevent you from Medicaid benefits to help pay for care). There are too many reasons to list, but the above are just a few examples as to why adding children’s names to assets is NOT recommended.
- Do Not Pay Family Members to Provide Care or “Help Out” During This Crisis. If a family member has lost their employment during this crisis, it might be tempting to pay them for caregiving services to an elderly loved one. While this might seem like a “win / win” situation for the family, paying for care to a family member has disastrous effects on the elderly loved. Indeed, should the elder need nursing home care in the next 5 years, the payments to the caregiver are considered a “divestment for less than fair market value” and will result in a penalty. The result: the elder will be prohibited from Medicaid benefits he/she might otherwise be entitled. The only way to avoid this trap is to have a knowledgeable elder law attorney draft a “Caregiver Contract” that complies with Medicaid policy.
Please know that our office is fully available during this time to discuss and prepare your Estate and Long-Term Care plans. While the health of our families, friends, and communities are certainly of the utmost importance to each of us in this unprecedented time, it is important to continue to protect our loved ones through proper estate planning.