Living Longer: It’s a Blessing, If You’re Prepared

Here’s some good news: people are living much longer these days! So much so that there’s a new field in estate planning. It’s called Life Care Planning. This type of planning doesn’t focus solely on a “death plan.” Instead, it focuses on using strategies to make the last decade of life a little easier and less stressful.

In this 4-minute video, Attorney David Edwards talks with NewsChannel 20 about the benefits of Life Care Planning. If you’re over 55 and concerned about the challenges you’ll face as you age — from paying for long-term care to protecting your hard-earned assets — you should consider putting together a Life Care Plan. It will give you peace of mind knowing you’ve successfully prepared yourself for the extra years you may experience.

We’d love to help you with this process. Give us a call at 217-726-9200. We can answer questions and help you set up an Initial Meeting. We hope to hear from you soon!

long-term care insurance

Should I Buy Long-term Care Insurance?

The outrageous cost of care is one of the biggest risks to those getting older. This question looms large in the mind of many who are of retirement age…

How will I (we) pay for care costs?

And many clients ask us…

Should we buy long-term care insurance?

There is a lot of confusion and fear around the long-term care insurance industry, but we still believe that long-term care insurance is the #1 best way to protect yourself from exorbitant care costs.

When we see a client who needs care and has long-term care insurance, it is usually a big relief! Their family already has plenty of things to sort out as far as the details of the care and the medical needs that are happening. When it comes to how to pay for it, all they do is sit back and let the insurance company write the checks. It’s a big load off for the family! And they get to focus on other important things during a really difficult time.

There are legal tools, like Nest Egg Trusts and VA and Medicaid benefit planning, that can be used to help plan for care costs. Long-term care insurance is just another financial tool that can be used. Some clients rely mostly on the legal tools and some rely mostly on the financial tool of long-term care insurance. Some clients rely on both types of tools — a kind of “belt and suspenders” approach to planning. We generally believe the more tools you have in the toolbox, the more effectively you can build a planning strategy.

How Does Long-term Care Insurance Work?

The industry has been in flux recently, creating a lot of fear around this topic. Currently, there are two types of long-term care insurance. One is kind of on its way out, and the other is more effectively addressing the problems that have emerged in the industry.

  1. Traditional long-term care insurance. You pay a premium on this policy, and when you need care, the insurance company pays so much a day or so much a month, for so many months OR until a set maximum amount of money is used up. (Some old policies have unlimited benefits, but in more recent years insurance companies have stopped selling the unlimited benefits kind.) With the traditional LTC insurance, what happens if you don’t need care? Do you get your money back? No, the insurance company keeps your money, and you’re out of luck. (Except in very rare and unique policies.)
  2. Hybrid long-term care insurance. This is a life insurance policy that has a special rider to allow you to tap into the money prior to death in order to pay for care. If you don’t end up needing long-term care, then the money goes to your family or beneficiaries just like life insurance would. Most people who buy LTC insurance these days are getting the hybrid type.

There are very few companies still selling traditional policies, and most people prefer the hybrid policies anyway, so there isn’t nearly as much risk as there used to be for the consumer. After some bumpy times, it appears as though the industry has figured out a better way to stay in business and provide a service to clients.

Should I Buy LTC Insurance?

Yes, it is a great idea for most people. If you can qualify medically, and if you can afford it, it is certainly something we urge you to strongly consider. As you age or as you begin to develop more health issues, the policies get more expensive. At some point, you may not be able to get a policy at all.

It is generally a good idea to consider buying LTC insurance in your 50’s or 60’s. It’s not necessarily too late if you’re in your 70’s, but it really depends on your health.

One great thing about LTC insurance is that it provides resources to pay for care at home. Care at home is very limited under Medicaid benefits, and yet the majority of people we speak to have strong preferences about staying at home as long as possible. You can get care at home under VA benefits, but sometimes the VA benefits are not enough to pay for all the care that is needed. A good LTC insurance policy will let you get plenty of care to stay at home as long as possible while you continue to age.

If you don’t qualify for LTC insurance, then you may want to pursue legal options such as a Nest Egg Trust to protect your assets and help you more easily qualify for future benefits that will help pay for care.

If you do qualify for LTC insurance, you may still want to consider a Nest Egg Trust as additional protections.

Over 55 years old? Here are three things you should know about nursing home care.

 

How Do I Check Into LTC Insurance?

If you are interested in checking into LTC insurance, you should chat with your financial advisor who can explain the various policies available. They can tell you some general options and estimated prices based on your situation.

To get more specific pricing and see if you qualify, you will need to go through underwriting. This involves a medical check up (such as taking blood samples, blood pressure, etc.) and also giving the insurance company permission to get copies of your medical history. Once the insurance company has this information, then they can give you a more specific price quote and options, which you can discuss with your financial advisor.

One last thing… WE DO NOT sell insurance. We are a law firm. However, we are familiar with a lot of advisors and can often recommend someone if you don’t have an advisor you’re already working with. Just give us a call at 217-726-9200.

Nest Egg Trusts: A Tool to Protect Your Property and Life Savings

There's a real problem facing Americans over the age of 65 -- the cost of nursing home care. It's expensive and often unavoidable. A lucky few have enough income to cover the $80,000 per year cost. But how does the average person afford it?

Unfortunately, many "spend down" their property and savings so they can qualify for benefits. But...

There is another way.

You may have heard of an irrevocable trust, or what we call a nest egg trust. This common tool helps many families who want to protect assets and plan ahead for future aging and care costs.

Aren't Trusts Just for Wealthy People?

It's a common misconception that trusts are only for the wealthy. However, a nest egg trust is designed for regular, hardworking folks who have saved a bit for retirement. Many families who want to protect assets and plan ahead for future aging and care are deciding that a nest egg trust is the right tool for them.

So, What's a Nest Egg Trust?

A nest egg trust is an irrevocable trust that protects your hard-earned savings and also helps you qualify for care benefits if you need some form of long-term care. There are many different types of trusts, and each depends on a person's goals and situation. But the bottom line is they protect your property and savings so you can get the care you deserve without losing your entire financial legacy. You can read more about trusts and how they work here.

Isn't That Too Good to Be True?

You qualify for Medicaid benefits AND you get to keep your hard-earned savings and assets? Yes, you do, but the nest egg trust involves a trade-off. To protect your assets, you must give up some control of them. What does this mean? It means any assets you put into the trust have some restrictions, so you can't spend them any way you want anytime you want.

Of course, no one wants to give up control of their assets, but many families find that it is well worth the trade-off to protect their financial legacy (and save things like the family farm). They even find that the control they give up is much less than they expected.

How Do I Set Up a Trust -- Isn't It Complicated?

If you were to do it on your own, yes, it would be complicated. But with the help of an experienced and trusted elder law attorney, it's not that complicated. And it's well worth your effort. Properly planning for your future is one of the greatest gifts you can give your loved ones (and yourself!). Knowing your financial legacy is safe gives you a priceless amount of peace of mind.

How Can Edwards Group Help?

In addition to setting up a trust, we will help guide you through making decisions around the trust. We have more than a decade of experience in creating this type of trust for people -- we know the problems to anticipate and address; we know how to make the decision-making process a bit easier; and we know the right questions to ask to make sure YOUR trust works for YOU and your unique family and circumstances. If you think a nest egg trust might be right for you, we encourage you to give us a call at 217-726-9200. We will be happy to review your situation with you and counsel you as to whether a nest egg trust is best for your circumstances and the goals you want to achieve.

To learn more on your own about nest egg trusts, download this FREE resource -- Nest Egg Trusts: A Good Tool to Protect Property and Savings.

save family farm

Over 55 years old? Three things you should know about nursing home care.

You may be a couple decades away from needing nursing home care, but the sooner you can understand and plan for the costs involved, the better.

Here are three truths every senior should know about nursing homes:

 

1. You’ll probably need nursing home care.

The likelihood you’ll need to pay for this type of care is high: 70% of Americans 65 and older will need some form of long-term care, and 35% will spend time in a nursing home.

2. It’s going to be expensive.

The odds that this care will be expensive? 100%.

Nursing homes in Central Illinois cost about $80,000 per year. That’s roughly $6,500 per month! Most people don’t have that type of monthly income during retirement.

3. Without proper planning, you’ll lose your hard-earned life savings.

If you don’t have enough income to cover the cost of care as you age, you will need to use your life savings and other assets to pay for nursing home care. That means your financial legacy, including things like the family farm, could disappear without proper planning.

Thankfully, with proper planning you can prepare, save your legacy, and get the kind of quality care you or your loved one deserves. Here’s one way to do it.

As a response to the challenges of aging in our current time, our firm has developed a process to plan ahead for the last decades of life, when so many people face financial and physical challenges. Life Care Planning looks ahead to the various stages that individuals and families may go through during the aging process, and creates a plan to make navigating that time a little easier and less stressful. Learn more about the 5 Stages of Life Care Planning here. If you’d like to take the first step toward planning, give us a call at 217-726-9200, and we’ll help you schedule your Initial Meeting.

3 Tips for Preserving Your Family History This Thanksgiving

What story from your life or your parents’ life needs to be remembered?

Did your grandmother board a ship at the age of 15 and immigrate to America all by herself? Does your grandfather have great stories about the shenanigans that went on at the family farm? Was your uncle at the liberation of Dachau during World War II? (I have a friend who this is true for, but she was too young to hear about it while he was alive.) Oftentimes families have stories like these, but questions go unasked, answers and conversations about these things aren’t preserved, and adventures are left untold. In our increasingly disjointed society, it’s important for families to share stories.

We want to encourage you to take time this Thanksgiving (and the entire holiday season) — a time when families naturally gather around tables and tell stories — to preserve these stories that make up the unique tapestry of your family. With multiple generations under one roof, it’s a chance to dig into your history and discover what brought you to where you are now.

If you’re among the older generation, don’t be afraid to share your story. If you’re among the younger generation, be sure to actively listen when stories are being told. Turn off the football game for a bit. Put down the smartphones — you have a lifetime to look at screens but a limited time to preserve your past.

The process of telling your story may be uncomfortable at first. Our current culture leaves us ill-equipped for face-to-face interactions and deep conversation, but it’s worth pushing past the discomfort to get to the unique history only your family holds. With the help of the tips below, the discomfort should quickly pass. Here’s how to get the conversation rolling and preserve your parents’ or grandparents’ stories:

  1. Be intentional. Set aside specific time for this. Gather your parents or grandparents around the dining room table and tell them you want to hear their stories.
  2. Start with simple questions. Easy, fun questions break the ice and often lead to great stories. Begin with a few of these:
    • What’s the strangest thing you’ve ever eaten?
    • Did you have a nickname as a kid?
    • Where did you go on vacations as a child?
    • What did you eat for lunch at school?
    • How did you meet mom or dad (or grandma or grandpa)?
  3. Record the conversation. Your smartphone probably already has a recording app (like Voice Memos on the iPhone), so use technology to your advantage. The digital age is great for easily sharing things like photos and recordings. Put your phone in the middle of the table and just let it record. Soon, everyone will forget it’s there, and you’ll have an invaluable souvenir of that moment in time.

If you wish you knew more about your grandparents’ stories, we encourage you to do something about it and start recording some of your unique life experiences so future generations can draw strength and wisdom from what you (or your parents) endured, accomplished, and valued. Family stories encourage us to move boldly in our own lives, helping us to uniquely understand who we are and how we got to where we are.

If you still have the chance to tell your story or to listen to the stories of your elders this holiday season, we don’t think you’ll regret it!! Watch on Facebook and in our upcoming email newsletters for more ideas on preserving your family legacy this holiday season.

If you’re ready to protect your family through effective estate planning and gain peace of mind knowing things will go as smoothly as possible when the time comes, give us a call at 217-726-9200 to schedule your Initial Meeting. We will be happy to help guide you through the process.

A Quick Planning Tip to Get Organized

Getting organized is a key part of the estate planning process. Estate planning simply means you have a plan to handle your finances, your care, and your family when you can’t do it anymore — whether that’s because of sickness or passing away.

Everyone wants to be organized, and some do a better job than others. Most of us have a “system” to help keep track of important papers. And you understand your system better than anyone else! But if you are seriously ill or dead and gone, will others be able to find what they need?

I have a friend whose mother recently passed away unexpectedly. Sadly, like many people, her mother didn’t have a very good system or plan in place. My friend has had a heck of a time tracking things down. One day, out of frustration, my friend posted this to Facebook:

“Reminder-
No matter how old you are – no matter how healthy you think you are –
Put all of your death documents in at least one file folder.
A firebox would be great, but-
FILE FOLDER.”

Ask yourself — if you were gone today, WHO would be trying to track down all of your financial information, and how would they go about doing it? Have you made it hard for them or easy for them?

Planning tip: make sure you have a complete list of all your accounts, property, and everything else you own. This will make it so much easier on your family later. And obviously, putting all these things in a single file folder could be a big help to your loved ones left behind.

Without a complete list (grab this document off our website to give you an idea of what should be on the list), it will mean extra stress for your family at a time when they are already very stressed. A lack of organization can also create extra court expenses and delays. It could also mean that lost accounts may get turned over to the state.

Laura Peffley, our Senior Asset Coordinator, spends 40 hours a week helping people sort out asset information, doing a complete asset report, and then helping them follow up on planning changes!

If you’d like a guide to help organize things and make sure everything fits with your wishes within an effective plan, then give us a call at 217-726-9200. We’d be happy to make an initial appointment for you. Click here to read about what to expect at that initial appointment.

asset protection

How to Protect My Kids From Wild Spending

So, where will your stuff go when you die? Think about it for a minute.

Who will get your stuff and how much will they get?

Will the inheritance you leave make a big difference in their financial lives?

In many cases it will, and it may be a lot more money than they are used to having. Will they be ready to handle it wisely?

If you know your heir is not good with THEIR money now — they don’t save, they don’t budget, they don’t have an emergency fund, they often overdraw their accounts — then what will happen when they inherit YOUR money? Will they handle the inheritance better or worse than their own money?

It’s usually worse.

In our experience, people think that inheritances will last forever, and so they spend it. And then they spend some more. And then one day — when it’s too late — they realize that it’s all gone.

Parents spend a lifetime protecting their kids — from running in the street or touching the stove or making bad choices as teenagers — but many don’t think about how planning at death is another way to protect your kids.

With proper planning, you can set them up to succeed and help protect what you worked so hard for.

If you are concerned that your child (or niece or nephew) is not ready to handle an inheritance, you can set up a system to help them. This system would include a trustee to make decisions about the money you leave, plus a set of instructions about when and how the money can be used.

The goal? To make sure that hard-earned inheritance will last to provide ongoing security, steady income, and maybe even funds for your heirs’ retirement.

If you have concerns about your children’s financial habits, and how that could affect your estate planning, give us a call at 217-726-9200 or keep learning with the following posts:

Have You Ever Paid Off a Child’s Credit Card?

QUIZ: Is My Family Ready for Their Inheritance?

asset protection

3 Real-life Examples of Important Asset Protection

We’ve previously talked about asset protection, but before we jump into some real-life examples, let’s review:

Asset protection is simply protecting the things you own. This could be your house, your savings accounts, your IRAs, farmland, etc. Life is unpredictable, so there are quite a few risks that we all need to think about protecting ourselves from – medical bills, scams, accidents, Acts of God, poor financial decisions, and risky relationships.

Let’s look at three specific types of asset protection you may need to consider…

Three Real-Life Examples of Important Planning for Asset Protection

Medical Bills

While you are healthy and younger, you will hopefully be covered by health insurance that offsets doctor visits and hospital stays. But as you age and need more care, particularly at-home care or care in a nursing home, those things will not be covered by health insurance or Medicare. Without planning, those costs could quickly eat up all your life savings. By planning ahead, you can protect more of your savings and more easily qualify for benefits to help pay for care. Many people don’t think they’ll need this, but statistics show us that 70% of people over the age of 70 will need some kind of care like this, and we also know that 70% of nursing home residents rely on Medicaid to pay the outrageous bills.

Scams or Mismanagement

As you age, you are at greater risk of someone taking advantage of you. Sadly, elder fraud is an increasing issue right now as technology makes it easier and easier to prey on seniors. Fake emails from banks, fake calls from the IRS, Medicare scams, and even those close to you who are supposed to be helping can take advantage of seniors through powers of attorney. Diminished cognitive functioning and memory make it easier to make big financial mistakes. You need to plan ahead so someone you trust can step in when the time comes and protect you if you are unable to do so yourself. Read our series on elder fraud here.

Kids Who Can’t Handle Money

So, what about after you’re gone? If your kids are not prepared to handle their inheritance, they could quickly blow it. (Read our post, “Are Your Kids Ready for Their Inheritance?” to take a quick quiz.) There is planning you can do ahead of time to protect them and make sure their inheritance is there and will last for many years.

If you’d like to learn more, consider attending an upcoming workshop or give us a call at 217-726-9200 to get started.

save family farm

Asset Protection — What Is It and Why Do You Need It

Estate planning can seem complicated, but often it’s just because the vocabulary isn’t familiar. Here is what you need to know about asset protection:

  • What is asset protection?
  • What risks should I protect against?
  • What timelines should I consider when it comes to protecting assets?
  • What tools can I use for asset protection?

What is asset protection?

Asset protection is simply taking steps to plan ahead of time to protect what you’ve worked so hard for all your life.

So, what do we mean by “assets”? Assets are really whatever you OWN. This could be your house, your savings accounts, your investments, IRAs, farmland, personal property, your grandpa’s fishing cabin that’s now in your name – it is simply whatever you posses – no matter how much or how little that may be!

And the important thing to know is that you can take important steps to protect those things you or your family have worked so hard for! This is asset protection.

What kind of risks should I protect against?

We all know how unpredictable life can be. Sometimes, it’s full of curve balls you never see coming. So, what are some of the risks that you should protect against? We see six big categories:

  1. Catastrophic medical bills or healthcare costs (including nursing home care, in-home care or assisted living expenses)
  2. Scams or mismanagement
  3. Accidents or mistakes – for example, a car accident
  4. Acts of God – fire, tornado, hail or wind damage
  5. Poor financial decisions (adult children or their spouses with wild spending habits, gambling or addictions)
  6. Risky relationships (adult children where there is likelihood for divorce and/or abusive or controlling relationships)

Now that you know what asset protection is and what types of situations may call for it, let’s look at specific times during the lifespan and what they have to do with asset protection. Read about three real-life examples of asset protection here.

3 Periods of Life Where You Need Asset Protection

So, what are the timelines you need to consider when it comes to protecting assets?

  1. When you are healthy and still in control. During this time, there are things you can plan for now that you will not be able to do later. It’s much better for you and your family to be proactive during this time.
  2. When you are sick and unable to make decisions. Debilitating strokes and dementia are just two common types of illnesses that keep people from making decisions for themselves. When a debilitating illness happens, you need a trusted family member or friend to help make the decisions you would want made.
  3. After your death. Once you are gone someone else will HAVE to deal with your assets. It may be a spouse or an adult child, but either way, there are things that must be done. It’s better if you’ve planned ahead to make this time easier for them. The hardest thing about this time is that they’ll have to deal with a lot of legal things (and paperwork) WHILE dealing with grief. It’s an incredibly difficult time that is made easier by planning ahead.

Tools for Asset Protection – How Do I Protect My Assets?

There are three categories of tools that we talk about in connection with asset protection:

  1. Financial tools such as insurance can help protect assets. This is a broad area that includes health insurance, long-term care insurance, disability insurance, homeowners insurance and auto insurance.
  2. Personal legal tools such as trusts can also help protect assets. Trusts can help protect assets from risks that are unique to you and your situation or risks that your kids may encounter later.
  3. Business legal tools such as LLCs or corporations can help protect assets like small businesses.

I hope this article has helped you see how relatively simple “asset protection” is, along with how important it is to consider during the planning process. Anytime you see a word pertaining to estate planning that you don’t understand, we encourage you to reach out to us. It is very important to us that the vocabulary of estate planning doesn’t keep you from protecting your family. Keep learning about asset protection with our blog post, “3 Real-Life Examples of Important Asset Protection Planning.”

nursing home medicaid planning

4 Questions to Answer When Facing a Healthcare Crisis

Most people don’t connect estate planning and healthcare issues. However, as people live longer and face the skyrocketing costs of aging in America, a new aspect of estate planning has emerged. We call it “Life Care Planning.” This type of planning addresses the type of care you may need toward the end of life and how to pay for that care.

It is difficult to face, but statistics tell us that 70% of people who reach the age of 70 will need some sort of long-term care (like a nursing home).

The need for long-term care can arise because of stroke, dementia or any number of serious health problems that develop as people age.

4 Questions Every Family Will Have to Answer When Faced With a Health Crisis for an Aging Loved One

When health problems crop up, you and your family will come face to face with the following questions:

  1. How do we pay for good care?
  2. How do we keep the peace in the family during this extremely stressful time?
  3. How do we protect our loved one’s (or our) life savings if the average cost of a nursing home in Central Illinois is $78,000 a year?
  4. How can we take maximum advantage of the help that is available to pay for good care?

Part of what we do in guiding families through this stressful time of life is to help answer these questions by creating a Good Care Roadmap.

We also understand that timing is critical when families are facing serious transition points such as a cancer diagnosis, progressing dementia or a sudden stroke. If you or someone you love is in crisis because of a serious medical issue, we urge you to give our Elder Care Advisors a call today at 217-726-9200. They guide families through this time of life on a daily basis. It’s all they do everyday!

We regularly hear from families who say they can’t imagine getting through this difficult time without the help of an experienced guide. It is one of our greatest pleasures to relieve stress and help get good care for loved ones who are aging!