4 Essential Questions for the New Year
So, how are the New Years resolutions going? I heard the fourth week of the year is the hardest since the new resolution is getting a little old and many people don’t continue. If you haven’t done well with your resolutions, or even if you have, here are four very important questions to ask yourself or to ask your aging parent to start off the new year right. If you answer “no” to any of these questions, give us a call.
Four Essential Questions
Elder Law is a broad field with a vast number of issues. However, it seems that, with very few exceptions, the majority of the consults handled by Elder Law attorneys focus on addressing one or more of four essential questions.
1. Is someone appointed to handle your business if you can’t do it yourself?
The attorneys at our firm strongly believe that a thorough durable power of attorney is the most important estate planning document a person can have, whether you’re 18 or 80. It is through the durable power of attorney that you nominate someone to handle your business for you in the event you are not able to do so yourself. The durable power of attorney is the number one tool for avoiding guardianship proceedings in the event of a medical emergency.
2. Are your healthcare documents in order?
We recommend three separate healthcare documents. First, the healthcare power of attorney, like the durable power of attorney, appoints someone to handle your affairs if you’re unable, except this document deals specifically with healthcare matters. It is what authorizes doctors and nurses to speak with your representatives about your diagnosis and treatment when you are unable to manage your healthcare on your own, and it is another valuable tool for staying away from guardianship proceedings. Second, it is wise to execute a HIPAA release form that complies with the federal act governing the release of medical records to ensure your loved ones are not denied access to your medical information. Third, depending on your wishes regarding end of life care, a living will might be appropriate. This document puts in writing the wish held by many individuals that they not be left on life preserving machines if they have been diagnosed as being in a permanent vegetative state. It is not enough that you simply tell your loved ones your opinion on the matter.
3. Do you have an estate plan and does it do what you intend for it to do?
In its most basic sense, an estate plan is simply anything you do to make sure your assets go where you want them to go when you die in the manner in which you want them to go there. I have emphasized in a number of consultations that having a will does not avoid probate; instead, a will is a set of instructions for the probate judge to follow as your estate passes through the court probate process. A trust is like a will, in that it contains your instructions for what is to happen after your death, but a trust does not have to go through probate. I have noted that lifetime deeds can be utilized to avoid probate, but only if they are worded just right – the absence of a few magic words can throw your estate back into probate. And we often advise clients of potentially adverse tax consequences associated with lifetime deeds as compared with inheritances received through a will or a trust.
4. Have you done anything to plan for the high costs of long-term care?
The average cost of a nursing home in Arkansas is just under $5,000 per month. Medicare and private health insurance do not pay for long-term care in a nursing home. Long-term care insurance is an option if you purchase a policy before any major health issues have been diagnosed, but it can be very expensive. Help in affording the high costs of long-term care is also available through a couple of government programs. Veteran’s benefits are available for those who served on active duty during a time of war, or for his or her surviving spouse, if the veteran is deceased. Medicaid is available to veterans and non-veterans alike. However, both of these benefits require some planning, because they both include income and asset restrictions.
Many people think that if they have their assets in a trust, those assets can’t be touched by a nursing home or the state if long-term care is needed. However, if the trust is a standard revocable living trust, nothing could be further from the truth. Assets in a revocable living trust do count against you for both VA and Medicaid purposes. On the other hand, there are certain types of specialty trusts you can use for sheltering assets from the high costs of long-term care. The key is to have accurate information and to plan ahead.
About Justin Elrod
Justin Elrod is a partner of the Elder Law Practice of Whatley and Elrod, and the Managing Attorney of the Bryant and Hot Springs Village, Arkansas offices, serving the legal needs of the elderly in Central and South Arkansas. Justin Elrod has been working in elder law field since 2006, and became Arkansas’ fourth certified Elder Law Attorney in 2012. The Elder Law Practice of Whatley and Elrod is focused on the legal needs of the elderly and their families. Justin Elrod is a regular speaker for Continuing Legal Education seminars teaching other attorneys about elder law and is frequently on radio shows answering live questions about Elder Law.
About the Elder Law Practice of Whatley and Elrod:
The Elder Law Practice of Whatley and Elrod is Arkansas’ largest Elder Law practice, with four locations through the state of Arkansas, in Bryant, Fort Smith, Springdale, and Bella Vista. Todd Whatley and Justin Elrod, the managing partners at the Elder Law Practice, are committed to serving the legal needs of the elderly in Arkansas. Their services include estate planning, creating wills, trusts, avoiding probate, special needs trusts, Medicare, Medicaid, and more. The Elder Law Practice of Whatley and Elrod also focuses in VA benefits, assisting Arkansas veterans in getting the benefits and assistance that they have earned during their time spent serving our country.