Here’s today’s Facebook Livecast:
A lot of folks call the office to say that they just “want to get their ducks in a row”.
Usually what they mean by this is that they want to do whatever type of planning is necessary to protect them from many of the bad things that they have seen happen to others when they didn’t plan. For sake of our very short blog discussion, we identify the following 3 Bad Things:
- Probate. This is not necessarily bad, but it’s usually something that you want to avoid, if at all possible. Probate is a judicial process (you’re in a Court, which is a clue) and is very time consuming, expensive and not a lot of fun. The Probate process is often required to transfer ownership of assets from one generation to another pursuant to your will or state law. Fortunately, this process can typically be avoided with a little pre-planning that we will talk about in a future blog post.
- “Losing it to the Nursing Home”. This is not the correct phrasing, but it’s the way that most people refer to the spend down process. The truth is that Nursing Homes are the good guys – they just want to be paid. Sometimes Medicare pays for the first several days if you have a qualifying hospital stay first. After this, you start paying out of pocket until you qualify for Medicaid. The trouble is that people often (unnecessarily) spend down everything to qualify for Medicaid assistance to help pay for nursing home care. With proper planning, this can often be avoided.
- Avoiding an Asset Freeze when your loved one loses capacity. I have heard many spouses say, “We have been married for 50+ years. I know what he wants!!!” Yes, that is probably true. But they often find out quickly that they cannot act on their loved one’s behalf without a properly executed power of attorney. If your loved one has an IRA or other assets is his/her own name. You may not be able to access the money to use for their care without a properly prepared power of attorney. When they lose capacity, they lose the power to execute legal documents. In such cases, another Court proceeding, called guardianship may be required. To give the authority to act on your loved one’s behalf. By the way, the same reasoning hold true for inability to make healthcare decisions without good health care documents.