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The Importance of Updating Your Will

Robin Burner Daleo • Dec 19, 2023

Question:

It’s been fifteen years since we signed our Will. Although our children are grown, we still want them to get everything. Is there any reason to redo it?

Answer:

Great question and one that we are asked often. While it may be the case that the Will is sufficient, there are several reasons that, at a minimum, you should consult with an attorney, have it reviewed, and see whether there is any additional estate planning that you should consider. While a basic Will that leaves everything to each other and then your children may be your ultimate goal, there are specific planning techniques that you can take advantage of to protect your assets.

First, an outright bequest of all your assets to your spouse may not be appropriate. As we age, the chance for long-term care, either at home or in a facility, becomes more of a possibility. When the first spouse dies, it may be necessary for the second one to apply for Medicaid to assist in the cost of home care or nursing facilities. Medicaid is a need-based program that has certain income and asset limits. If all of the assets pass directly to the spouse, this could disqualify them for benefits. A typical planning technique in our practice is to leave assets to a Martial Trust or Supplemental Needs Trust for the benefit of the survivor. This would enable asset protection in the event the survivor needs long-term care.

Second, you may want to consider how you leave your children their inheritance. It is common to leave the bequest outright. This can be problematic if your child is on government benefits, has creditor issues or is going through a divorce. A strategic planning technique is to leave your children their inheritance within a descendance trust. This will offer protection from creditors and divorcing spouses. Also, you have the option of making your children their own Trustee of the Trust or naming a third-party Trustee. Additionally, you may want to consider having a trigger Supplemental Needs Trust within the Will. This will allow inheritance to be protected in the event that one of the beneficiaries becomes disabled and reliant on government benefits. The inheritance will be paid to a Supplemental Need Trust and their government benefits will not be interrupted. The money in the Trust can be used to support their other needs.

Finally, during your consultation it will be prudent to discuss other estate planning – including advanced directives (i.e health care proxy and power of attorney) and setting up a lifetime trust. These additional estate planning documents are crucial in making sure all of your goals and needs are met, including asset protection. As we get older, the goal of estate planning can sometimes change and it is important to review these documents every few years.

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May is National Elder Law Month

by Robin Burner Daleo • 03 May, 2024

May is National Elder Law Month, for that reason we have decided to switch from our normal format and answer a question that we are oftentimes asked in our practice, “What is an Elder Law Attorney and why do I need one?” Answer: Elder Law is a fairly new and unknown area of the law. As baby boomers and their parents’ age, they are living longer and oftentimes, living with chronic medical conditions. As the cost of long term care continues to spiral out of control and families struggle to meet the needs of their aging members, an experienced Elder Law attorney can help you and your family members establish an estate plan that maximizes protection of assets while ensuring that your loved one has the best care available to them should they face a health crisis. While it is always best to plan proactively, Elder Law attorneys are adept at crisis planning and oftentimes can provide a solution which can preserve assets or save taxes where others you have consulted have told you that no solution existed. Elder Law attorneys must be familiar with multiple areas of the law - contract law, estate planning, trusts and estate administration, Medicare, Medicaid, health care insurance regulations, Public Health Law, Mental Hygiene Law, the Internal Revenue Code & State and local tax issues. In each instance the issues that we deal with are fact sensitive and the clients must be willing to give us the information that we need to formulate the Elder Law plan. This in itself is oftentimes a struggle as the clientele that we deal with tends to value privacy and are oftentimes reluctant to divulge information regarding their assets and private family issues. The various disciplines that make up the Elder Law practice are in a constant state of flux. As a result, it requires the Elder Law attorney to spend a great deal of time reading current journals and cases and continuously taking legal education courses. In addition, many Elder Law attorneys meet in informal study groups to read, understand and strategize. As the facts change, there will likely be different solutions for each client. What works for one client may be totally inappropriate for another. For instance, in one day, we may see two different clients, both clients are 86 years old, own their own homes, and need long-term care. Client A has a daughter, age 55 and Client B has a niece age 55. Client A, on the eve of going into a nursing facility, is advised to transfer her home to her caretaker daughter, who lives with her and has lived with her for more than 2 years. The transfer does not make Client A ineligible for Medicaid. Client B cannot follow the same plan because her niece is not her child. There are no exceptions for transfers to caregiver nieces. Because we do not have an exempt transfer available to us for Client B I advise Client B to sell the home and advise her that even though no pre-planning has been done, we will likely be able to save more than sixty percent of her aunt’s assets by engaging in crisis planning. Remember - one size fits all – is not the rule. Your Elder Law plan is personal, fact sensitive and requires a careful review of all of the facts and circumstances. By: Robin Burner Daleo, Esq.