Vanessa J. Skinner is a shareholder with the firm of Winderweedle, Haines, Ward & Woodman, P.A., where she chairs the firm’s Wills, Trusts & Estates Department. She was recently named one of the Best Lawyers in America in the area of Elder Law for the third consecutive year. She is the host of The Power of Planning Podcast, anchor.fm/thepowerofplanning.
When I tell people I am an elder law attorney, they assume I help people plan for their death. Although that may, in part, be true, elder law is much more than that. It encompasses a variety of planning strategies to help those entering their golden years focus on living, rather than dying. For those who failed to do advance planning, it includes helping their families, often their adult caregiver children, with crisis planning. Here are eight important strategies to consider:
A comprehensive estate plan serves two key purposes — planning for lifetime incapacity and transferring wealth at death. In the absence of such planning, you may find yourself the subject of a guardianship proceeding, and at your death, your assets may be subject to probate and distributed according to your state’s laws, rather than your own wishes.
Asset Protection Planning
After working hard for years to accumulate a certain level of wealth, you want to be sure your assets are not vulnerable to attack by creditors during your retirement. In addition to having sufficient insurance coverage in place, certain types of assets and certain methods of titling assets can afford you better creditor protection.
Retirement Benefits Planning
The passage of federal legislation in 2019 implemented sweeping changes concerning retirement accounts, including provisions designed to assist you in enhancing your retirement savings and others that impact how your retirement accounts may be distributed upon your death. Additional federal legislation is pending that could bring even more changes to the retirement benefits planning landscape.
Avoiding taxes is everyone’s goal. From the income tax consequences of required retirement account distributions to the highest federal estate tax exemptions in U.S. history that are scheduled to sunset at the end of 2025 to the capital gains taxes that can be minimized for those inheriting assets at death, tax planning is inevitably a part of every elder law discussion.
Whether you are motivated by a desire to minimize taxes or to make a positive impact on society, or perhaps you are driven by both, charitable giving planning strategies take many different forms and can be implemented at different times. Charitable contributions can be made during your lifetime or at your death directly to non-profit organizations, or they can be structured through a donor advised fund or charitable trust. A charitable family foundation can also be established.
Government Benefits Planning
If you are like most Americans and find long-term care insurance policy premiums to be cost prohibitive, the reality of skyrocketing costs for long-term care can be quite daunting. You may not have the financial means to pay privately or your may prefer to preserve your nest egg. There are federal and state government assistance programs available that can help with the monthly cost of care. Many of these programs are needs based, and therefore limit eligibility to those with a certain level of assets and income. Planning tools can be implemented to achieve financial eligibility for such programs.
Planning for Remarriage
Remarrying later in life following the death or divorce of a former spouse presents certain unique financial considerations. The couple is often presented with the difficult decision of how to equitably provide for each other and their respective adult children upon their deaths. Concerns of divorce also loom large since separate property is often more significant than marital property. Nuptial agreements are particularly effective in these situations.
As the number of those 65 and older continues to rise, instances of elder abuse and exploitation are becoming more prevalent. Some law enforcement communities have established senior crime units to help prevent this particularly vulnerable population from falling victim to neglect, abuse and financial fraud.
In the months to come, I plan to do a deep dive into each of these areas to spotlight the value in advance planning and the unintended consequences that can result from a failure to plan.
This article is featured in the October 2022 issue of The Growing Bolder Digital Digest.