How to Pay for Nursing Home Costs

How do you keep life savings from being depleted by nursing home costs? Read our Nursing Home Crisis Plan Case Study to find out one of the ways we helped a client.

Quick Summary

Mary recently had a stroke and will have to be placed in a nursing facility. She doesn’t want nursing home care to drain all of her savings.

Edwards Group worked to maximize Medicaid benefits as quickly as possible, created a trust to preserve assets, pre-paid funeral costs and preserved more than 50% of Mary’s assets.

Total Savings to Mary and her family: more than $100,000.

Read the full story here.

trust

5 Reasons You Need a Trust

Trusts are a very valuable planning tool. When people think about estate planning, most people think about wills. While wills are the most basic/common tool for estate planning, trusts are an incredibly effective way to plan for things that wills can’t address. Trusts can be used to:

  1. Organize your assets so it’s easier on your family later. (Read about two types of asset organization mistakes here.)
  2. Set out instructions for when you’re not able to make your own decisions — either upon disability (like a stroke) or death.
  3. Keep things private. (All wills are public record.)
  4. Protect assets from creditors, divorces, kids who don’t know how to manage money and even future lawsuits you can’t anticipate (like car accidents).
  5. Reallocate assets to maximize long-term care benefits such as Medicaid or VA benefits.

If you’re ready to get started protecting what you’ve worked so hard for, call us at 217-726-9200 to schedule an initial appointment with one of our attorneys. If you want to learn more without any obligation, our free workshops are a great way to learn about effective planning for every stage of life while finding out why our approach is so unique and effective. Give us a call at 217-726-9200 to RSVP.

What’s Worse Than Probate?

Today we’re going to talk about “What’s worse than Probate?” But first, let’s talk about what probate it exactly.

What is Probate?

Probate is where the judge has to get involved in carrying out an estate after death. This means nothing can be done until the judge signs the order appointing an executor. Wills are designed to go through probate. That’s just how the law works. Probate ALWAYS adds extra expense and delay. Plus, it’s public record.

What’s worse than Probate?

Uncle Fred was getting older. He finally got to the point where he was not able to stay at home any longer. His favorite nephew in Missouri said, “Come live with me.” So Uncle Fred moved to Missouri and enjoyed several years there before passing away. After he was gone, the family realized that he still owned his house in Illinois, so they had to go to probate court in Illinois. Plus, he had moved his bank and investment accounts to Missouri when he went to live with his nephew. So now they were faced with probate court in Missouri, too!

So… what’s worse than Probate? Two probates!!

Anyone with assets in more than one state needs to plan carefully to make their plan work smoothly in each and every state. Watch out for timeshares, vacation homes and ownership in family real estate. If overlooked, all of these could add time, expense and hassle in the form of extra probate for you or your loved ones.

Good planning, especially with a Living Trust, works well across state lines.

You can read more about living trusts on our website by searching “living trusts.” Call us at 217-726-9200 with questions. In the meantime, be sure to sign up for our weekly e-newsletter with estate planning tips and up to date workshop information, or plan to attend an upcoming workshop.

Contain Yourself: Fool Proof Solution to Getting Organized

Why is getting organized so much fun? Well, I should rephrase that. Getting organized is a lot of work. But BEING organized is fun. A while back Michelle and I went to the Container Store in St. Louis. Who would think there is a store with nothing but containers for storing things? And it’s fun to look around in there! The truth is:

  1. We like to be organized.
  2. We usually don’t get organized on our own.
  3. When we do get organized, it doesn’t take us long to slip back into disorganization.

You’ll be glad to hear we have discovered a fool proof method for organizing your financial life, and keeping it that way. Let us help you! There is no doubt that estate planning (as well as peace of mind and happy relationships) rest on good financial decisions and organization. Here is how we help clients in our Dynasty membership program:

  1. Store documents. We keep copies of deeds, bank statements, insurance policies, etc. for us to refer to, but also in case the client needs it.
  2. Identify Problems. We help clients identify problems in their financial life. A good estate plan will not accomplish much if the person’s wealth is poorly invested, incurring extra income taxes, exposed to risks, or confusing to deal with after their death.
  3. Summary Reports. Assets can be scattered everywhere, without any one report to pull them all together. We maintain updated client financial info, and send out an Asset Review Report on a regular basis, asking the client to review.
  4. Reminders. Asset titling and beneficiary designations may seem boring, but they are key to making an estate plan work. We regularly remind and teach our clients what to look for in coordinating their assets.
  5. Warranty. After a client has titled a new asset based on what they learned from us, they send us the written proof. We double check it to see if the asset is properly organized with their estate plan. If not, we help fix it. Once we give it our blessing, they can rest with peace of mind.
  6. Objective advice on important decisions. I don’t invest assets for clients or sell financial products. But I see firsthand the work of dozens of financial advisors as well as the results of our “do it yourself” clients. I am always glad to give feedback on my client’s financial or business decisions. Often, I support the good advice coming from the financial advisor, and help the client understand how it fits into the bigger picture. Once in a while, I protect a client who is being threatened by poor service or advice from another professional.

A great way to learn more about Edwards Group’s unique approach and what the Dynasty program can do for you, is to attend our Wills & Trusts: How to Get Started. Click here to see upcoming dates.

What is probate and why do people want to avoid it?

You may have heard people discuss probate and how horrible it is.  But what in the world is probate?  And why do people want to avoid it?  Probate is, simply, when the court has to get involved to help transfer assets after someone has died.  This court process is set up to make sure things are done properly and the family is aware of what is being done.  As a result, there are several truths about probate that cause many people to want to avoid it:

Public Process  Your last will & testament, as well as the probate court documents, are all public record.  Your nosy neighbor could go to the courthouse, or maybe just look online, to see where you are leaving your assets.  She may also be able to see how much you were worth at death and where you owed debts.

Delay  Because of the court process and various required tasks (petitioning the court, publishing a claim notice, notifying family members, reporting to interested parties), there is additional delay before the estate can be finalized.  At a minimum, probate will usually take 8-10 months, and often takes 18-24 months.

Expense  Because of the additional tasks required by the court process, there is additional expense involved, both in paying the attorney but also in publishing notices and providing reports to the rest of the family.

Reminders to Contest the Will  One of the required probate steps is to notify the family of the last will & testament being admitted to the court.  As part of this notice, all family members (who are legal heirs according to the law) are given notice of the proceedings as well as a reminder that they have the right to challenge the Will.  The notice even gives them the deadline for challenging the Will and basic steps to be taken.  So, the lack of privacy is an issue, not just with the nosy neighbor, but also with the family troublemaker who was purposely left out of the estate plan.

To learn more about wills, trusts and other estate planning issues, check out the Wills and Trusts section of our website.

Make sure you know What a Will DOESN’T Do

What doesn’t a Will accomplish?

A will doesn’t avoid the probate court’s involvement.  In fact, it guarantees a probate if you have a certain type or level of assets. Find out more about probate and why people want to avoid it here.

A will doesn’t protect your assets from nursing home costs prior to your death. Find out more about how to prepare for nursing home costs here.

A will doesn’t cover assets that are owned jointly.  Instead, they will go automatically to the joint owner.

A will doesn’t address any asset with a beneficiary named, such as life insurance or IRA.  Those assets will be transferred to the person named in the beneficiary form. To read more about asset protection, feel free to explore the Asset Protection section of our website.

An effective estate plan will include legal documents, such as a Will, but will also include much more.  Without all the parts of the plan working together, your plan will not work and will leave your family with unnecessary stress later. If you’d still like to know more, check out the Wills and Trusts section of our website, come to one of our *Free* Truth About Estate Planning Workshops or give us a call at (217) 726-9200.

Michael Jackson: King of Pop (and Estate Planning?)

Are you tired yet of hearing about the Michael Jackson saga? One thing for sure, the gossip media should have plenty to talk about for quite a while. It turns out Michael did have a Last Will & Testament after all. (Thanks to those who sent me links to good articles on his estate issues.) Despite the circus atmosphere, Michael’s estate situation gives us some reminders about important planning issues:

1. Wills are public. Usually, there are many issues that are much more important to your family than keeping your estate matters secret. But at the same time, do you really want people to see your private info? And with increasing online access to court records, it will be easier and easier for your neighbor or nosy relative to look at your Will in court records without leaving home.

2. Living Trusts are private. A living trust is a good way to keep your info private at your death. And that’s exactly what Michael did. Look at his Will. It is what we call a “pour over will”, meaning his will doesn’t have much in it except instructions to dump assets at his death into what they are calling his “Family Trust” (which is private and will stay private). So all the gory details about who gets what and when they get it are only in that private document, incorporated by reference into his Will. And it seems to me that Michael’s Will actually included more info than necessary. For instance, I usually would not put something in the Will about disinheriting anyone (as he did with is ex-wife). That kind of info can go in your trust to keep it all private.

3. Asset titling is key. We haven’t seen how this part plays out yet. Even though Michael had a living trust, if he didn’t properly title his assets in that trust before his death, then the probate court will have to do it using his will. Without assets organized properly, he will lose part of the benefits of the living trust.

4. Feeding frenzy? Michael’s death is a media frenzy, but also a money frenzy too. Friends, relatives, business associates, will all be scrambling to take financial advantage. Those who are controlling his assets will be approached by all kinds of people with all kinds of ideas and schemes, all designed to get some money from the estate. Marlon Brando’s estate attorney said people came “out of the woodwork making all sorts of claims” after Brando died. At your death, who will be in charge of your estate and who will be at risk for being taken advantage of?

5. Personal items are important. There is a court dispute over 2,000 personal items. Michael’s mom has control of them, but the real executors want them back. The judge told them to try to work it out. I have seen a lot of hurt feelings and disputes over personal items, sometimes of small dollar value. But sometimes the items of small dollar value have huge sentimental and emotional value. What have you done to make sure your personal items don’t cause a dispute later? What have you done to preserve the stories behind items of emotional value?

6. We never know when. We look at Michael and figure he was living a life on the edge that could lead to an early death. But the fact is that none of us know when our time is up. One thing about estate planning – you need to do it when you don’t need it, because when you need it, it’s too late to do it.

Despite some feeling like the topic has been covered way too well, there is even more we can learn from this situation, including how to choose guardians for your children. Check out Part II of this post here.

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.

Estate Planning: What’s in your tool box?

What tools do you want to use?

Is this the first question that your contractor asks you when you decide to hire him to build a house?

Or, if you’re car stops running and you take it to the mechanic to be fixed, do you quiz him on which tools he plans to use in repairing it?

When you need surgery to save your life, do you make sure you learn all about the different scalpels and various medical instruments to be used by the doctor?

No? You don’t focus on those things?

Well, then why do people focus more on the estate planning tools than on what they want to accomplish with their plan?

Wills, Living Trusts, Powers of Attorney, various other planning or tax strategies. All of these are just tools. Tools in the tool box of an estate planning attorney who is there to help you build the kind of plan you want. If the plan looks and does what you want, then does it really matter what tools were used to get there?

The division of labor is much clearer in some of the other professions – doctor, contractor, mechanic, etc. But with law, it seems that attorneys have fed the confusion by hyping and selling certain “tools” instead of promoting their process of helping clients build a plan that works for them. Sure, some clients want to understand the tools, and that’s fine.

But, remember, the tools are not what’s important. What is important? Having your wishes, goals, and dreams carried out, in a way that allows your wisdom and values to be communicated as well.

My clients are already the experts on what they need to know. They know their families, values, what’s important to them. I am the mechanic with the tool box, and I can use whatever tools are necessary to help you carry out your plan.

So, if you want to work with me on your planning, please keep in mind that we want to focus our energy on the house we are building, not what kind of hammer is being used to build it.

9 Ways to Cause a Dispute After You Die – Probate and Trust Administration Nightmares

Often we get calls from someone who is facing a mess because a loved one died and failed to plan properly. So, my advice is this: If you want to create a mess for your family, don’t leave it to chance. Do it right and plan the mess yourself.

Here are 9 ways you can create a mess after you die…

1. Don’t organize your assets. Assume that what you own will fit in with your legal documents. Somehow, by accident, it will work out.

2. Don’t talk about what you are planning to do. Your wife and your kids (maybe from a previous marriage) can both assume they knew what you wanted. Leave it vague enough so no one really knows, and there is certainly no legal guidance for them. Also be sure to keep your financial situation secret, from your kids and even your wife. They don’t need to know yet.

3. Name an executor or trustee without much thought. Just name the obvious choice, regardless of their track record for honesty or handling money. Even though trustees sometimes run off with the money or mishandle investments, that probably won’t happen to you. Even though the person you chose has never shown themselves to be up to such a task, they will step up and do fine. Right? And certainly don’t ask yourself one of the best questions – “would I trust this person with my checkbook today, while I’m still alive?

4. Don’t pay for professional legal advice. Just do it yourself. Type up (or hand write) your own trust or will. Fill out those IRA beneficiary forms, and even customize them yourself without knowing the law. It’ll work out somehow.

5. Make promises to family members about what you plan to leave them. Then don’t do it that way. They will understand. I’m sure they won’t want to fight in court about whether your wishes were written down wrong or whether you were in your right mind. They will understand that you didn’t keep your promise.

6. Talk about your estate in vague terms. Say things to your wife like, “you will be taken care of” and “you won’t want for anything.” Say things to your kids like, “you will be treated fairly.” Don’t talk specifics, but just talk about generalities, so the people listening to you can
assume what they want to about what you plan to leave to them.

7. Don’t use a professional trustee such as a bank. You don’t want to spend money on something like that, where a professional will know how to get the job done and make sure that your wishes are carried out in a way that’s legal and proper. Much better to leave it to friends or family members who may not exactly know what they’re doing, incurring extra taxes or making messes that need to be cleaned up later.

8. Use your plan to give the family chances to learn to get along better. Create your plan in a way that creates conflict among your loved ones. For instance, name your spouse and a kid from a prior marriage as co-trustees. I’m sure they’ll get along well enough to be able to sort out your estate.

9. Name a family member as a trustee of the funds you leave behind for someone else. Put your trustee in a difficult situation after your death where they have to refuse to give some of your money to another family member, particularly when it’s someone from the other side of the family. And be sure not to give clear guidance about when and how that person should be able to access funds. This will put the maximum pressure on the trustee and increase the hard feelings of the person asking for the money. No matter how the trustee decides, someone will feel either mistreated or pressured.

We are obviously being sarcastic. Sometimes the lack of planning we see can be really frustrating! I’d much rather the Probate/Trust Administration part of our firm not exist. (This is the part of our team that handles issues after someone dies.) Ideally, everyone would do effective planning ahead of time. I say it all the time — bad estate planning breaks up good families.

If you want to be sure none of the above happens to your loved ones, we encourage you to take action today. It’s easy to put this off! But it’s hard (and expensive) to clean up the mess afterwards — and that will be left to your grieving loved ones. What a legacy…

So, give us a call today at 217-726-9200 to set up an Initial Meeting. Your loved ones will be so grateful when the time comes and you can have peace of mind knowing they are protected.