Top 5 Posts of 2011

One of the core values here at Edwards Group is educating our clients. We strongly believe that the more informed you are, the better we can assist you in making an effective estate plan that will do exactly what it was designed to do. As such, we continually strive to give you helpful information whether it’s through our weekly e-newsletter or our website. Here’s some of our best content from the past year:

Getting Started with Funeral and Burial Wishes

Effective estate planning is about more than just financial issues. Check out this post for 4 steps to get you started and on the right track.

Ask the Attorneys: Medicaid’s Look-back Rule

Are asset gifts to spouses exempt from the 5-year “look back” for Medicaid? As with many things Medicaid, the answer’s not that simple. Read more HERE or call us for an analysis of your unique situation.

What Hollywood Can Teach Us About Estates and Trusts

If you’re like Dave, you just can’t get enough estate planning. In this article, Dave recommends movies and a TV show on the topic.

Common Obstacles to Estate Planning: Pricing

5 common ways estate planning attorneys charge for their services and how it impacts your plan.

Caring For Your Aging Parents

Did you know that 1 in 4 adult children over the age of 50 are involved in caring for adult parents? You are not alone.

If you’ve enjoyed these articles, and still want to learn more, feel free to:

  • Use our SEARCH box in the upper right corner of this site to find more articles on topics of interest to you.
  • RSVP for one of our upcoming workshops by calling (217) 726-9200.
  • Call us and schedule your free initial consultation.

 

Caring for Your Aging Parents

Are you the primary sibling who bears the burden of care for your parents?

Are you concerned about whether your parents’ finances are being handled properly?

Do you think your parents should consider alternative living arrangements (such as assisted living), but they refuse?

Are you doing your best to respect your parents’ independence and wishes but just feel overwhelmed by the responsibility?

In deciding what’s best for your parents, do you feel like you and your siblings are kids again, bickering and driving each other nuts?

If you answered yes to any of these questions, you are not alone! 1 in 4 adult children over the age of 50 in America provide personal care or financial assistance to an aging parent. That’s over 10 million people, and yet, it can feel like a very lonely place to be. There are some great resources out there, like www.AgingCare.com, but it’s also nice to have someone in person with you every step of the way.

At Edwards Group, we are here to help with decisions, planning, documents, even helping families work out the hard to discuss details that are involved with aging parents. Most people deal with these issues once or twice in a lifetime. Our Elder Care Advisors help families with these issues every day. Let us help you. Just give us a call at (217) 726-9200 and ask to speak with an Elder Care Advisor today. You don’t have to be on this journey alone.

Ask the Attorneys: Medicaid’s Look-back Rule

“Are asset gifts to spouses exempt from the 5-year “look back” for Medicaid? –Charles A.

Generally speaking, assets transfers to a spouse are exempt from the 5-year look-back rule. Transferring assets from the Medicaid applicant spouse to the community spouse (the at-home spouse) is part of what we do when completing Medicaid applications for clients.

The rule specifically states that the following transfers are allowed:

  1. A transfer of homestead property to a spouse.
  2. Transfers to a community spouse where the amount transferred does not exceed the Community Spouse Asset Allowance ($109,560).
  3. A transfer of personal effects, household good and one motor vehicle, regardless of the dollar value.

These transfers do not create penalties. However, you must remember that there is an overall asset limit of $109, 560 (plus certain exemptions) in order for a married person to qualify for Medicaid. Therefore, the Medicaid applicant cannot simply transfer all of their assets to the spouse and qualify for Medicaid. The Medicaid department will factor in both spouses’ assets when determining eligibility.

Please remember that this is general advice and each situation is unique. If you have a specific scenario that you would like me to analyze, please contact me and I would be happy to look at the facts in your case. (To read more about upcoming Medicare cuts and how it may affect those in nursing care, click HERE.)

helper; trustee; executor

Every Estate Plan Needs a Good Helper

As you complete your estate plan, you will need to name various “helpers.” These are the people who will carry out your plan when the time comes. When will that time be? When you are disabled or you pass away. These helpers will be there to oversee the legal and financial issues of your estate and will also deal with your loved ones who are benefiting from the plan. You will not be there to help them or make sure they are doing it right. So, you better pick the right person now. (No pressure!) Read 3 Myths About Choosing Helpers here.

How do you pick a good helper for your plan? Here are some places to start:

1. Is the person ready to handle the job? They don’t have to be experts in law, accounting, or investments. However, they will oversee the legal, tax, and financial issues, so it’s best if they aren’t intimidated by those things. They may need to get help from lawyers, accountants, and financial advisors. Will that be overwhelming for them?

2. Can you trust the person to make good decisions? Only in rare cases does someone steal money from an estate or trust. However, in many cases a person messes up because they make poor decisions, or make no decision at all (which really is a decision in and of itself). Ask yourself, “Does this person handle their own money wisely?” Do they spend it well, save themselves, and rely on professionals? Do they listen if someone gives them good advice, or are they too stubborn? Read “7 Types of Helpers to Watch Out For” here.

3. Will the person be placed in a difficult family situation by becoming a helper? This can happen when a sibling has to make decisions for another sibling, or a step-child is put in charge of managing the step mother’s trust after the father’s death. Will the job duties cause conflict or even a broken relationship for the person you choose?

4. How often will the person need to be involved? For instance, if a disabled adult child stays at home after the parent’s death with local caregivers, who will oversee them if the trustee lives out of state? Would a local trustee be a good idea because they can drop in on the caregivers and address daily living details?

5. Is the person nearby? If not, does it matter? In many cases, a trustee who lives out of state may do a good job, especially if their duties are mostly big picture. You should consider whether your trustee will be needed to do things that can only be done in person, for instance – sorting personal property.

6. Should you name an individual or professional, such as a bank? In many cases, a professional trustee easily pays for itself because of proper management and smart investments. It also helps avoid problems that can occur when an unprepared family member serves as trustee.

7. Is it a good idea to name co-trustees? The good thing about having co-trustees is that they can balance each other out. There’s a checks and balances so to speak. The bad thing is that they balance each other out. If they get along, it can work great. If they can’t agree, then we have a deadlock and the possibility that the court may have to resolve the fight. In most cases, when you name 2 co-trustees, there will be one of the trustees who will tend to do more or even most of the work. If that’s the case, why not name that person as the sole trustee and avoid possible conflicts? This can also happen with co-executors — read our post about that here.

Naming a helper or trustee can be a very daunting task, but with this article, you have a good starting point of factors you should consider when selecting someone. Continue learning more with our post, “7 Types of Helpers to Watch Out For” or take our quick Secret Test for Your Named Helper.

As always, we are here to help you create an effective estate plan. You don’t have to do it alone. We’ll guide you along every step of the way. Give us a call at 217-726-9200 and get started today!

Consumer’s Guide to Medicaid 2011

There haven’t been many changes since last year, but our Consumer’s Guide to Medicaid for 2011 is now out. Last year’s edition was one of our most popular downloads of 2010. If you, or anyone you know may be facing a nursing home, then this guide can help you better understand the basic issues at stake. Four basic issues are addressed in our guide:

  1. Assets. What are they, how much can you have and how does it impact your eligibility for Medicaid benefits?
  2. Transfer of Assets. When should you do it, why might you need it, and other important information about how this issue affects Medicaid eligibility.
  3. Income. How much will go towards a nursing home if using Medicaid and what about the spouse who may still be at home?
  4. Spousal Protection. Medicaid law provides special protection for spouses of nursing home residents. What does that mean for the income, assets and other needs of the spouse still living at home?

Download it now:

Consumer’s Guide to Medicaid 2011

The guide is really an introduction to the topic of Medicaid Planning. If you want to know more about this important and popular topic, feel free to check out our very popular Long-term Care Essentials Workshops or contact our client coordinator at 217-726-9200 to set up your free initial consultation where we can discuss your unique situation.

Your Bucket List for Estate Planning: Why a Trust Might Be Right for You

A recent movie with Morgan Freeman and Jack Nicholson inspired a lot of people to think about their bucket list – the things they would like to do before they die. While a trip around the world in a sailboat may seem a lot more exciting and glamorous than estate planning, thinking about what you want at the end of your life financially, and for those you love, can be even more important than achieving your bucket list. Join me as we explore a different kind of bucket list – one that will insure your loved ones, and the things that you’ve worked so hard for, are protected.

What is a trust?
When most people hear the word “trust,” they probably think of families like the Vanderbilts or Hiltons, but trusts are not just for the ultra wealthy. Established during the Crusades in the 12th and 13th centuries to protect the rights of landowners while away on their journey to the Middle East, trusts are still relevant and vitally important to the work I do everyday in helping my clients achieve their goals. You needn’t be a Rockefeller or a wealthy Englishman to benefit from the level of protection that trusts can offer in our modern life.

Why are trusts important?
I want you to think of a trust as a bucket. And what are buckets good for? They are helpful to put stuff in. When you create a trust, you are in essence creating a legal “bucket.” By placing assets like houses, vehicles, timeshares and farmland into that trust “bucket,” you are insuring that those assets will be managed according to your wishes, which will be written in the trust agreement by you and your legal advisor. Unlike a will, trusts can help protect and manage assets while you are still alive, but disabled in some regard.

How are trusts used?
So, how do you put stuff into the trust bucket? By directing assets into it, such as retitling bank or investment accounts, doing a deed to your house or farm, or changing beneficiary designations on life insurance. For everything that is in the trust bucket, you leave a set of instructions written in the trust agreement. You also name someone to carry out those instructions. That person (or bank or trust company) is called the trustee. The person you choose as trustee to manage your trust “bucket” has a fiduciary duty, which is one of the highest duties in the law, to carry out your wishes and do what is best for you – not what is best for them. They have to act in your best interest. If they don’t act properly, they can be taken to court.

The most important thing for your plan is to think about what you want to accomplish. What are your goals – for yourself and your family? Once we choose the goals (and I help clients do this nearly everyday), then we can see what tools will best accomplish those goals. A trust can often be the best tool to carry out goals such as:

  • Avoiding the delay and expense of probate court.
  • Transferring assets privately after death. (As opposed to a will, which is a public document.)
  • Protecting assets from a divorce or lawsuit.
  • Giving clear instructions for managing your money during your disability.
  • Organizing assets so someone else can help manage them.
  • Protecting assets from being used for nursing home costs.
  • Leaving money to someone who is too young or too unwise to handle it by himself or herself.
  • Avoiding estate taxes.
  • Preventing family fights regarding a family farm or business.
  • Balancing the wife and kids in a second marriage.

A trust is just one of the legal tools we at the Edwards Group use to carry out your goals and dreams. Our other tools include wills, powers of attorney, living wills, contracts, and deeds. A trust is one of the best tools we have to carry out your wishes and plan for a time when you might become incapacitated or pass away suddenly.

Remember, a trust is nothing more than a tool. It’s not a magic document. All it can do is carry out the instructions written in it. And the only assets it governs are those you actually put in the “bucket.” Call us today at 217-726-9200 to schedule an appointment and get started on your bucket list!

New Medicaid laws coming: Joshua Becker quoted in State-Journal Register today

On the front page of the Springfield State-Journal Register this morning, there is an article about the new Medicaid law changes and how they will impact families.  Joshua was quoted several times in the article and a big illustration summary of the law, states at the bottom “Source:  Joshua Becker of Edwards Group LLC”.  The reporter, Dean Olsen, came out to our office earlier this week to talk to him about the new law.

Click here to read the SJ-R article quoting Joshua Becker.

Families Face Aging Parents – Trends and Struggles

Aging Trends and Obstacles of Legacy and Control

There are some things going on in our society now that makes aging, and the way families deal with it, different than it used to be. The issues below are things I see my clients facing as we discuss planning for aging and disability.

1. Better healthcare and longer life expectancy. That’s a good thing, right? Yes, but it leads to some challenges. If you live longer, your health issues may cause you to run out of money, your declining health may dramatically reduce your quality of life, or there’s even a chance your children may face declining health or even pass away before you do.

2. Earlier retirement. People are living longer, but retiring earlier. In 1910, the average retirement age was 74 years, meaning people often worked until they passed away or had to quit for health reasons. In 2002, the average retirement age was 62. Isn’t it nice to retire early? Yes, but it also leads to more planning pitfalls, i.e. more years to potentially get bored, lonely, or run out of money.

3. Families are more scattered. I know some people who have several households within the same family living on the same street. This is rare. More common is that parents have children scattered around different cities, different states, or even different ends of the country. When the family is so spread out, what does that mean for the parents as they age and need assistance? The magazine Christianity Today recently had a column (“Honor Thy Father” for Grownups) about honoring your parents by taking care of them in their old age. How does a family do that when there are 1000’s of miles in between? Often it means delegating the day to day assistance to professional care givers or medical personnel.

4. Communication between generations. David Solie’s book “How to Say it to Seniors: Closing the Communication Gap with our Elders” discusses the two main tasks facing older adults: how to maintain control and how to leave a legacy. Those issues can lead to both conflict as well as rewarding and meaningful conversations.

Let’s think about control

As a person ages, they are faced with losing control. Loss of health, friends, social status, ability to work, driving, choosing where they live, and control of money. All these evaporate as the years tick by. As they are already facing these things slipping away, along comes one of their kids. And what is he telling them? Stop driving, move to assisted living, go to the doctor, eat better, etc.

Is it any wonder that the older generation balks at the advice sometimes? Even if the advice is logical and right on target, it is still another threat to their independence and control. The control is already slipping away naturally and then comes a child wanting to (seemingly) speed up that loss. When a child pushes their elderly parent to make the “right” decision about some life circumstance, it can lead to frustration on both sides, with both feeling unappreciated.

Some people learn from experience that trying to convince our elders with logical arguments will get no where when the elder sees it as a threat to their independence and control. The author, David Solie, says we should stop fighting for control and instead be there to assist. When an older person is allowed the room to make a decision they will often come to a conclusion much more quickly than if they were pushed.

Those in the younger generation are constantly pushing forward to the next new thing. Older adults are sometimes faced with hanging on tight to avoid losing what they already have. Remembering each generation’s different perspective will hopefully reduce the frustration and conflict in those already difficult conversations.

Leaving a legacy

Unfortunately, some seniors spend so much energy and effort trying to maintain control that they never get to the second task of aging – reviewing their legacy. Leaving a legacy involves reflecting on life and how we will be (or want to be) remembered. Reflection means slowing down and focusing on past details. True reflection means a lack of urgency about current tasks.

This lack of urgency is another obstacle to a child pushing a parent to make decisions about a new living arrangement or some other decision that “must be made right now.”

For all us overly busy people, measuring our worth on errands done, emails sent, and whether we are caught up on our facebook status, it may be hard to relax and drop our task orientation.

However, when you hear an older person repeating a story or going into exhaustive detail, listen! You might see how the values in the story reflect the legacy that the storyteller wants to leave and how they would like to be remembered.

Getting Old Ain’t for Sissies: 10 Things to Consider As You Get Older

Here are some things to consider for yourself as you look at getting older. They are in no particular order, just my random thoughts from years of working with families facing these situations.

1. Are you having discussions about how you want to be cared for as you get older? Talk about it. Better yet, put your wishes down in legal documents so people are clear what you want.

2. Is your family prepared to handle things without your help, whether financially or otherwise? If not, you better make doubly sure things are set up right, so they get the assistance they need.

3. Have you lined up the financial resources needed if you became disabled? Such as disability insurance (at work or individual), long term care insurance, emergency fund savings. Do you have too much debt? Do you really want to be retired or facing a disability with credit card debt or a mortgage that’s not paid off?

4. Who is going to help you with healthcare decisions? Who will encourage you to go to the doctor? Who will go to the appointments with you to make sure you stay as healthy as you can for as long as you can?

5. Are you spending too much? How does your income, savings, and spending line up if you look out a few years? Have you calculated how your savings will grow or shrink based on your current spending level? or do you need to have a professional help you do that?

6. Are you spending too little? You have worked hard and saved your money. It’s OK to spend some and enjoy yourself by traveling or other things you enjoy. Or, if you truly have more income than you need and can spend, consider using those funds to increase what you leave at death. For instance, if you have IRA distributions you have to take (after age 70.5), use those distributions to pay life insurance premiums. Then leave the life insurance to your loved ones or a charity you believe in. When we run statistical projections for clients considering life insurance, they almost always show that a person leaves more money at death by purchasing life insurance. If you really don’t need the money, parlay it into a bigger chunk with life insurance.

7. Never say never. Transitions and change are difficult. Are you laying down a gauntlet by saying “I never will…”? Instead, make a plan so you can enjoy the most freedom and as full a life as possible for as long as possible.

8. Are you willing to make a transition sooner than necessary so you can avoid losing control? By getting “greedy” and holding on too long, sometimes people can end up losing their independence more quickly. For example, a grandmother leaves the family home earlier than anyone thinks she needs to, and enters a retirement community, where she has less stress of home upkeep, and more social opportunity that keeps her young. Another grandmother waits too long, goes downhill at home by herself, gets hurt by falling, declines by not eating right. Then when she is later forced to move to another living arrangement, she can’t enjoy the people or activities there because of declining health. Remember, there are endless variations to the type of retirement community or assistance a person can choose. Make choices while you still have choices, instead of having those choices made for you in a crisis.

9. Make gifts while you are around to see someone enjoy them. Gifts to your church or charity. Gifts to family (especially of heirlooms where you can share the story behind them). If you can, give some money and things away while you are still healthy so you can see how they bring joy and benefit to those who received it. To learn more about charitable giving, click HERE.

10. The ultimate question. I personally can never think about getting older without thinking about the ultimate question – what is there beyond this life?  I believe that faith in Jesus Christ leads to eternal life.

Living Trust: valuable tool for Disability Planning

It’s my job to use whatever tools will best get the job done for the client. What will work best to build the plan the client wants?

Although it’s not the client’s job to understand all the tools that we use in the plan, most clients end up with a basic understanding of how a living trust works by the time we are done designing the plan.

Living Trust – not just to avoid probate

In most plans, a living trust is the most useful tool to accomplish a lot of important goals. The living trust does help a client avoid probate, if used properly. This has been a big focus over the years by both attorneys and clients. But that’s only the beginning.

Disability Planning: Don’t settle for a “blank check” power of attorney

The living trust is also the best vehicle to help do detailed disability planning. Powers of Attorney typically give a power as a “blank check” with no guidance, but a living trust is different. A living trust allows you to do disability planning that gives a lot of details about how you want to be cared for, who will manage the funds while you are disabled, who can they spend money on during your disability, and who decides whether you are disabled in the first place. The power of attorney simply grants raw power without much guidance about how to use it. A living trust grants similar power but then can give lots of guidance, procedures, preferences, and instructions to be used by those managing your money when you are too sick to do it.

The goal of disability planning within a living trust is to have you and your family cared for during your disability in the same way you would have done it yourself, if you had been able.