When you think of elder law, it is essential to think of the four-headed monster. You want to shield yourself from or slay this so-called metaphorical beast. This analogy comes from four big areas of elder law that you should know about but also try to avoid.
Let’s start with the first-headed monster: probate court. There are two types of probate court, disability probate and death probate. Unfortunately, we typically do not get better with age. Therefore, it is a strong likelihood that disability probate could be in the future. However, it can be avoided with adequate disability planning. Proper disability planning includes creating a durable financial power of attorney, health care proxy, medical directives, advanced medical directives, and an expression of your wishes. With these documents, your loved ones can legally step into your shoes and make financial and healthcare decisions if needed.
The second type of probate is death probate. You can frequently avoid probate when you hold assets jointly, husband and wife. Still, all this does is delay or defer probate. When one spouse passes away, there may be no probate court, but once both spouses pass away, everything goes to the probate court. This exacerbates the family’s pain and creates unnecessary legal fees, probate costs, court fees, and attorney fees. In addition, waiting for the probate court to finish everything can take months or even years. There are simple ways to avoid probate court and protect your family.
The second-headed monster is the estate death tax. There’s a federal estate tax, and about 12 states also have a state estate tax. For example, Massachusetts has a state estate tax. Therefore there is a potential that if somebody’s estate is greater than a million dollars, even by just $1, they owe $18,000 to the Massachusetts Department of Revenue. The estate value can include the home, 401K, 403B, IRA, and life insurance. By speaking with an elder law attorney, you can determine if your state has an estate tax, how to prevent your estate from paying it and the federal estate tax, if applicable.
The third-headed monster is financial creditors and predators. As people get older, it is no surprise that they want to do the three P’s: protect, preserve, and pass down what they worked hard for to the people they love the most. However, there is a way to give loved ones a protected gift. This is not to give it outright but instead to put asset protection language in a trust center estate plan that includes the gift. Using this kind of language, what is passed down is protected from times of turmoil, such as a lawsuit, divorce, bankruptcy, and other things beyond their control.
The fourth-headed monster is nursing home or long-term care costs. The cost of long-term care is staggering. In Massachusetts, people are paying $510-$610 a day, which equates to $15,000- $18,000 per month, private pay, for a nursing home. In three years, it is about $540,000. These costs can be reduced or avoided altogether with proper planning.
These are four big areas in elder law. In addition, elder law attorneys also work with Social Security Law, Medicare, Medicaid, and Veterans Benefits planning. Further, they handle elder abuse and neglect cases. There are actually twelve areas or core categories of elder law that I have identified. It is necessary to know information about these areas since, at some point, most, if not all, of them could apply to you or your loved ones.
We specialize in educating and helping you protect what you have for the people you love the most. Contact us to learn more about how we can help.