Many people see an attorney for estate planning reasons, and we’ll assume that is the reason your parents have gone to see their attorney.
Let’s also assume your parents are in their mid-70s, retired and in fairly good health, although there is a family history of dementia on your mother’s side. They live in their own home and are fairly independent, and have modest net worth that would be far from a taxable estate under the current estate tax rules.
They have not had their estate planning documents reviewed in over 15 years and realize it’s time to do so. Their attorney reviews their existing Will, and without discussing their current health or the health of their children, recommends a revocable living trust to avoid probate and for more efficient management of their assets should one or both of them become incapacitated.
While this may seem like a perfectly appropriate recommendation, there are gaping holes that were not addressed. For example, the couple’s health or health of their children was not discussed. The couple’s age alone warrants a discussion about long-term care, how likely they are to need some type of care (very, according to national statistics), and how they will be able to pay for it. If this is not addressed early on, the couple runs the risk of losing all of their assets and their home to the cost of long-term care. If this is addressed early, the attorney can set up a plan to protect their home and other assets, and one or both may be able to qualify for long-term care insurance.
Regarding the health of their children, if any of their children have been determined disabled according to the Social Security Administration (SSA), then additional planning opportunities exist both for the parents and children. For example, a sole benefit trust could be established for a disabled child and have no negative impact on any current or future government benefits of the child or the parents.
If either parent was a wartime veteran, this opens up a whole new potential income stream to the parents to help fund their care in the future. But if the question isn’t asked or the attorney isn’t aware of the benefits, your parents may never know that there is over $24,000 per year available to them through the VA Pension program.
At Pierro, Connor & Associates, we make sure to have all of the information needed to give you or a loved one proper advice and guidance. We stay up to date on changing laws and government programs to ensure your plan remains the best option for you. Call our estate planning lawyers today for a free consultation.
