DEAR POTENTIAL CLIENT:
All of our clients deal with estate planning issues. However, the majority of our potential clients who are trying to plan (or have already planned their estates) have done so under the traditional notions of estate planning which, unfortunately, leaves them largely exposed to the threat of uncovered long-term care costs.
Traditional estate planning involves preparation of wills or trusts, powers of attorney and advance directives. These documents are generally based on one of two notions. The first notion is that one day you will go to pass away and the estate plan needs to make it easier for your loved ones to administer your estate. Alternatively, the estate plan will ensure that your appointed agents will be able to manage your financial and health care affairs should you face incapacity.
Estate tax avoidance traditionally has been the biggest motivator to move one to engage in estate planning.
Where the law allows estate planning to avoid having to pay estate taxes so assets can be left to family, that motive is easy to understand. However, with estates currently being able to pass along of up to $11.7 million estate-tax free in 2021, this is of less concern.
Other strong reasons we see that clients have for doing estate planning include providing the legal framework necessary to spare loved ones the anxiety and frustrations that can come from pre-death guardianship and death-time probate court proceedings.
There are very key differences between the services elder law attorneys provide versus the death-time focus of traditional estate planning attorneys, differences that potential clients often do not realize when they first approach our office. The elder law focus is significantly different from traditional estate planning concepts and largely concern the client’s quality of life issues.
Most of the traditional estate planning focus does not address the more urgent threat or the real issue of uncovered medical costs and dramatic reduction (or outright complete depletion) of the client’s assets to support quality-of-life goals.
The real threat to most of our potential client’s estates today, therefore, is neither probate nor an estate tax but rather the threat of uncovered long-term care costs.
The reality today is that one of eight people over age 65 and one of two people over age 85 will have to deal with dementia-related incapacities which neither Medicare nor any health insurance will cover. These conditions expose the estate to cover these very expensive and sometimes lengthy chronic care needs.
Today, many estates run the risk of being depleted paying for these costs. Though traditional estate planning includes advance directives for end-of-life planning, more comprehensive planning is needed.
Traditional estate planning does not ask about your day-to-day living preferences if you have a chronic illness nor about your notions of quality-of-life issues. Traditional planning does not ask your chosen agents about their familiarity with long-term care issues nor about their willingness to reach out for assistance in executing their assigned roles.
Genworth Cost of Care Survey Tool
The world’s population is aging at a faster rate than ever before and people are living longer. Every day until 2030, 10,000 Baby Boomers will turn 65 and 7 out of 10 people will require long term care in their lifetime.
Please time to look at the Genworth Cost of Care Survey Tool for yourself.
It is located at: https://www.genworth.com/
Your estate plan is as much about your quality-of-life issues as it is about making sure your heirs and family members will not have to suffer through either the court system or a bureaucracy because of lack of proper legal authority.