Customizing Estate Planning According To Life Phases
Estate planning is far from being a one-size-fits-all process. While many of our documents may be applicable to different types of people, there isn’t a universal template that can accommodate everyone’s unique circumstances. Every person and every family has a different dynamic with their own specific issues.
For instance, I recently met with a couple who has both sets of parents living on their property in guest houses. This arrangement, chosen to help care for their parents while avoiding institutional care, presents complex estate planning challenges in terms of long-term care and equitable distribution of assets after death. It’s a more complicated case, but our goal is to simplify the administration for the family.
Changes in personal status such as being single, married, divorced, having children, retiring, and so on, can significantly impact your estate planning. For example, some clients may initially dismiss the possibility of a future divorce, only to find themselves dealing with it later. Similarly, a recent widow or widower might adamantly insist they’ll never remarry, only to find love again. All of these personal developments directly affect the estate and must be considered in your planning process.
Reviewing And Updating The Estate Plan
While some people believe that a one-time estate planning document will provide lifetime protection, we always encourage our clients to review their plans annually. Most estate planning documents are revocable and amendable, meaning they can be changed or terminated. Exceptions may exist when we create irrevocable documents for specific benefit planning purposes.
It’s crucial to adapt your estate plan as circumstances change over time. We advise clients to review their documents at least once a year or whenever a significant event occurs. This might include a family illness, changes related to children, an unexpected windfall, or an inheritance. Regular consultation and document review are critical components of effective estate planning.
Estate Planning Strategies And Documents For Each Stage Of Life
The foundation of estate planning often begins with a last will and testament. While a will is a crucial document, it’s important to remember that for it to take effect, it must go through the probate process, a legal procedure required for transferring assets after death.
This process may be acceptable for some, but as an estate planning attorney, I’ve found that a basic revocable living trust is often more cost-effective and easier to administer. However, this largely depends on the client’s circumstances. So, start with a will—it’s better than having no will at all, and it’s particularly beneficial to have a properly drafted one. Unfortunately, I’ve encountered numerous deficient wills that were downloaded from the internet.
Alongside a will or a trust, it’s crucial to have powers of attorney for financial and medical decisions. These become invaluable during periods of incapacity, even if they are temporary, such as recovering from a car accident. Someone needs to assist with financial transactions and medical choices during this period. Thus, the fundamental estate planning toolkit should include a last will and testament, a revocable living trust, and powers of attorney.
The Cost Of Long-Term Care In Texas
Long-term care is becoming increasingly expensive. As of now, Medicaid in Texas covers up to $7,200 a month for a semi-private room in a nursing home. However, private rooms are typically costlier, ranging between $8,000 and $9,000 a month. The average cost for long-term care is easily upwards of $5,000 a month. More advanced long-term care, like memory care for dementia patients, can be even more expensive.
To provide some perspective, someone paying $5,000 a month for long-term care is facing an annual cost of $60,000. While some of my clients have the income to cover these costs, many don’t. For a married couple where one person needs long-term care, the question becomes how they will afford those expenses while also maintaining their own livelihood at home.
The cost of nursing home care, especially for an extended stay of three to five years (the average duration), can accumulate to hundreds of thousands of dollars. It’s vital to be prepared for such a substantial expense, which is why we will next discuss planning ahead for potential Medicaid assistance. The average person must factor these costs into their financial planning.
For more information on Different Facets Of Estate Planning In Texas, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (972) 366-7201 today.
