Written by:
Daniel M. Surprenant, Esq., CELA*,
Managing Partner, Surprenant & Beneski, P.C.
Within the larger subject of estate planning is the concept of elder law. Essentially, elder law is estate planning that deals with issues more common amongst the senior population. Because they regularly address these issues, elder law attorneys are proficient with the challenges, characteristics, and joys of serving seniors. An elder law attorney is better equipped to analyze and counsel clients as they plan for and experience issues such as dementia and Alzheimer’s disease, loss of mobility, family conflicts, as well as in-home and facility-based care options.
As an elder law client, you may be concerned with issues such as protecting your home and other assets from the high cost of long-term care, minimizing estate taxes, and protecting your child’s inheritance from their own potential divorce or creditors’ claims. You may also be concerned about avoiding the cost and delay of probate court proceedings when you pass, or naming the person you would like to make your medical decisions if you become unable to.
In Massachusetts, private payment for nursing home care can easily reach $14,000 per month, or $168,000 per year. That is a scary number for many clients. A good elder law attorney will walk you through whether, and how, you may be able to protect assets and qualify for Medicaid to pay for your care, legally and in compliance with the complex Medicaid regulations.
An elder law attorney will also guide you in deciding and formalizing who will make your medical and legal decisions when you are no longer able to do so, and help you incorporate flexibility into your plan in case life’s circumstances change. There is no one-size-fits-all solution. Your plan should be driven first by your goals, as well as your assets, circumstances, family, health, and other considerations.
Two clients that appear identical because they have the same assets may have very different estate plans because their goals are very different. Let’s consider the situation of Jack and Betty Holmes, who are 71 and 69 years old, respectively. They are in good health, with three children and five grandchildren. They own a home worth $450,000 and have other assets valued at roughly $500,000.
When their elder law attorney asked about their goals, Jack and Betty expressed concern about protecting their home and assets from the cost of long-term care. They also wanted to avoid the cost and delay of probate, which takes over a year to complete and costs several thousand dollars. Lastly, they wanted to make sure that if one of their children passes, even after their own deaths the child’s inheritance would go to the child’s children, not to an in-law.
An elder law attorney will review various foundational documents, such as a will, durable power of attorney, healthcare proxy, advance directive (also known as a living will), and HIPPA release. Also, the attorney will explain options to protect their home, including trusts, life estate deeds, and outright gifting.
After considering their options, Jack and Betty gravitated toward an irrevocable trust to protect their home from long-term care costs, which enabled them to continue to live in the property, sell the property, change trustees, and change beneficiaries (those who will receive the home when they pass). Jack and Betty were surprised at the flexibility that the planning offered.
Additionally, in their case, the trust was structured to last for the lifetimes of their children so that if a child passed, the trust’s assets would be transferred to the child’s children rather than to the child’s spouse. Lastly, the trust will avoid probate at the death of both Jack and Betty and their children.
In creating their plan, Jack and Betty gained the peace of mind of knowing:
1. They had chosen a trustee who will make important legal and financial decisions if they cannot.
2. The assets in the trust will be protected after Medicaid’s five-year look-back period.
3. Their money will stay in the family.
4. Their family will likely avoid guardianship, conservatorship and probate court proceedings.
Their estate plan will enable them to save and protect potentially hundreds of thousands of dollars and ensure their personal wishes will be followed.
As they say, “timing is everything!” Better results are usually achieved by planning early, rather than late. None of us knows when we may pass, become disabled, need long-term care, or lose a loved one. There are many estate planning and elder law strategies that require formalization well before they are needed. Typically, your plan must in place for five years – the current look-back period in most states –prior to applying for Medicaid in order for your home to protected from the cost of long-term care. Of course, there are exceptions that a good elder law attorney can explain. Some other examples of time-sensitive planning include the use of both spouses’ estate tax exemption for married couples, or the removal of life insurance from your taxable estate. To accomplish these objectives, estate planning documents and strategies must be put in place well before you need them.
The good news is that you can take action to achieve your estate planning goals. An experienced elder law attorney is well-versed in the issues and solutions available for seniors. You will be happy to find that the cost of planning is far outweighed by the savings and protection you provide for your loved ones – not to mention your own peace of mind.
At Surprenant & Beneski, P.C., we focus on achieving client goals in the areas of estate planning, elder law, and special needs planning. Our managing partners are certified elder law attorneys (CELAs) and are perennially listed on the Boston Magazine’s list of Super Lawyers for estate planning and elder law.
* CELA: The National Elder Law Foundation (NELF) is the only national organization accredited by the American Bar Association (ABA) to certify practitioners of elder and special needs law. NELF’s Certified Elder Law Attorney (CELA) designation represents confirmation of a lawyer’s exceptional expertise in the practice of elder and special needs law.
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