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- AlerStallings

If you follow our blog, you understand why you need an estate plan and how it can provide peace of mind for your loved ones when you’re gone. But what about your own peace of mind? How can you be sure your assets are protected against threats to your estate while you’re alive? That’s where asset protection attorneys come in.


Estate Planning vs. Asset Protection

In estate planning, we’re focused on creating wills, trusts, powers of attorney, and other documents associated with end-of-life planning. These legal documents outline who has legal authority to make decisions on your behalf in the event you become incapacitated, what should happen to your assets and property upon death, and who should be the executor of your estate. These documents are all important, but they don’t address how to protect your assets during your lifetime. For that, you’ll need an asset protection attorney.


An asset protection attorney looks at areas where you may be exposed to liability and utilizes legal tools to protect you. When people think of liability, property damage and personal injury are what usually comes to mind. Certainly, you need to be protected against these, but there’s also a major liability many retirees don’t plan for: long-term care.


The Risk of Long-Term Care

As we mentioned in a previous blog post, out-of-pocket medical expenses incurred in the five years prior to death leave one in four seniors bankrupt. That includes long-term care costs. Despite the risk, many retirees remain unprotected.


That’s why you need an asset protection attorney. Like estate planning attorneys, asset protection attorneys utilize trusts, but they use them to shield your assets from creditors, including nursing homes.


Why is this so important?  Because we simply don’t know what the future holds. We don’t know whether you’ll need long-term care, or for how long. Without an asset protection trust, if your long-term care costs exceed your assets, you could lose your home. For many families that’s a devastating possibility.


The Importance of Planning Ahead

An asset protection trust could prevent this situation, but it requires forethought. That’s why talking with an asset protection attorney early on is so important. Asset protection trusts require assets to be held in trust for at least five years to be fully protected. Other options are available if you’re in a situation where your assets are currently at risk. But if you have the luxury of time, being proactive is the best approach.


At AlerStallings, we understand that estate planning and asset protection shouldn’t exist in silos; they go hand in hand. That’s why we take an integrated approach that makes it easier for you and your family to get the protection you need with just one call. Schedule a 15-minute, no-cost, no-obligation consultation with one of our attorneys to learn more.

- AlerStallings

As estate planning and elder care law attorneys, we’ve dealt with a lot of situations—from common ones many of us will experience to more unusual ones. They all have common threads, specifically, key takeaways that could help other clients avoid sticky situations down the line. Here’s how to avoid 10 of the most common estate planning mistakes: 


1. Sending Your Kid to College Without a Healthcare Power of Attorney 

Twin XL sheets? Check. Bin full of snacks? Check. Healthcare Power of Attorney… wait, what? You won’t find it on any college packing list, but it should be. Many students will be living away from home for the first time—whether that’s across town or across the country. In the event of an emergency, your student—who is now over the age of 18—will no longer be treated as a minor. That means you won’t be able to make decisions for them in the event they’re incapacitated. Putting in place a Healthcare Power of Attorney will provide a safety net. 


2. Creating Estate Planning Documents Online 

Millions of others have done it, so what could go wrong? A lot, actually. Algorithms can only do so much. You can still end up using the wrong form or editing the document’s language in a way that contradicts other portions of your estate plan. Plus, should you need representation down the line, you won’t have a relationship with an attorney who can help. Bottom line: think twice before using websites that rhyme with Seagull Doom. 


3. DIY-ing the Population & Execution of Your Estate Planning Documents 

Like #2, we don’t recommend DIY-ing your estate planning offline either. Creating documents really ought to be done by an attorney. And, in order for your documents to be properly executed, you’ll need to have witnesses. There are requirements for who can and can’t serve as a witness and they vary by jurisdiction. An attorney can make sure it’s done correctly.


4. Over-reliance on a Will 

A will alone will not help you avoid probate, nor can it implement a schedule for the distribution of your assets or help you reduce your tax burden. It’s a common misconception that a will is all you need, when in fact, wills have a number of limitations. In many situations, additional estate planning is required to ensure your wishes are carried out as desired. 


5. Working with a Firm That Doesn’t Support What They Create 

Many law firms will sell you the documents you need, but not provide the support necessary to ensure those documents work the way they should. For example, a firm might help you create a trust, but leave you to figure out how to adequately put your assets in it. Or, if you buy assets after the trust is put together, there’s no one you can rely on to help you add them. That’s why we provide no-fee phone calls and lifetime support for the plans we create.  


6. Not Updating Your Estate Plan When Someone Passes Away 

Understandably, updating an estate plan isn’t always on your mind following the loss of someone you love. But unfortunately, having an outdated estate plan only causes more heartache, especially if your beneficiaries, powers of attorney, schedule of assets and other critical documents are no longer correct. Even if you haven’t experienced a loss, it’s still important to revisit your plan at least every five years, because laws and procedures change.  


7. Ignoring the Risk of Long-Term Care Costs 

Most plans don’t address long-term care, which is coincidentally the largest risk to your estate. In fact, 70% of people over the age of 65 will need long-term care. Having a plan for how you’ll address those costs can ensure that a surviving spouse isn’t impoverished or at risk of losing the family home. 


8. Using an Estate Planning Attorney Instead of an Elder Law Attorney 

Estate planning attorneys address what happens after you die. But what about when you’re alive? That’s where an elder law attorney comes in handy. Elder law attorneys can address both scenarios and that’s important as you age. They can help with key issues in retirement, like protecting your assets and helping you access benefits you may be entitled to—like VA benefits or Medicaid. 


9. Not Considering the Age of Your Attorney (in Relation to Your Own Age) 

Simply put, you need an attorney who will be alive when you die. Hiring someone older than you could mean they retire or hand off their practice just when you need them most, leaving you in a lurch if you don’t have a relationship with their replacement.  


10. Creating a Life Estate 

A life estate gives you use of your property during your lifetime, then transfers ownership upon your death to the heir you’ve designated. Some people choose a life estate because it helps them avoid probate. However, life estates have serious drawbacks, like relinquishing your ability to make major decisions regarding your home. Additionally, they lack the tax advantages some of the alternative options offer. Many people don’t realize the government will want its cut in taxes before the property transfers.  


What’s the best way to avoid these mistakes? Working with a trusted attorney who will be there to support you through every season of life. Learn more about how we serve our clients with heart, or get in touch to set up a complimentary phone consultation with one of our caring attorneys. 

- AlerStallings

The adage, “where there’s a will, there’s a way” holds true for many things. But when we’re talking about a will in the sense of a legal document, it has its limitations. So how do you know if a will is sufficient for your estate planning needs? Ask yourself these questions: 


1. Do you need to designate who would care for minor children? 

You can use a will to designate who would care for a minor child in the event of your passing. You can even designate a separate person to manage their financial care. For this purpose, a will is enough. However, if you want to specify how the child should be raised—such as preferences for religion or education—you’ll need a trust.  


2. Do you wish to specify distribution schedules? 

A will can specify who will receive your assets when you pass away, but it won’t control the timing and cadence of distributions, or how the inheritance is handled. If that’s not a concern, a will could be fine. But if you’d like more control, you’ll need a trust. 


With a trust, you can space out distributions so your beneficiaries won’t receive it all at once. Or you can specify that a distribution happen at a specific age or once certain conditions are met. In some cases, you may also specify that the inheritance pass in trust to a second generation—say a grandchild—should something happen to the original beneficiary. These are just a few examples of how a trust can provide a greater measure of control and customization. 


3. Are you hoping to avoid or reduce estate taxes? 

If so, a will won’t do the trick. We all want to maximize what we’re able to provide our heirs. Yet, unfortunately, many families underestimate just how much federal and state taxes can eat into the inheritance they leave behind. If this is a concern for you, there are certain trusts that can reduce or eliminate your tax burden and that of your heirs. Among the options are life insurance trusts and asset protection trusts. More on those here. 


4. Do you want to avoid probate? 

You might have heard that wills can avoid probate, but that’s actually not the case. All wills go through probate. If you really want to avoid probate, you’ll need—you guessed it—a trust.  


Why would you want to avoid probate? It’s expensive, which can cut into the inheritance your loved ones receive. And it can be time consuming, which means your loved ones could experience a delay in receiving what you’ve left them. Further, it’s a public process, where your will must be validated by a judge. People who were not included in your will, but feel they should have been, can contest your wishes. A trust can help you avoid this by making it possible for assets to pass to your heirs privately outside of probate. 



5. Do you have jointly owned property or property with designated beneficiaries? 

There are certain classes of property a will can’t address. One of those is jointly owned property, which is anything that’s owned equally by two or more parties. In this situation, property automatically passes to the other surviving owner, so it cannot be left to someone else in your will. 


Another class of property that you can’t put in a will is anything that already has a beneficiary clearly stated, such as retirement plans, insurance policies, or stocks and bonds set to transfer to someone else upon your death. 


Does that mean for these classes of assets your options for avoiding probate, taxes, and controlling distributions are limited? Not necessarily. If the asset is placed in trust, you could still enjoy the benefits mentioned above.  


If your answers to these questions have you wondering if you might need a trust, we have some resources to help. In our Estate Planning 101 series, we walk you through some of the scenarios where a trust makes sense and explain why. We also recommend you check out our Cheat Sheet to Understanding Trusts in Retirement, which breaks down some of the most common terms you’ll hear and what various types of trusts can and can’t do.  


Finally, while we know the world of trusts can seem complicated, the right attorney can make it much easier to navigate. If you think you may need a trust, or have questions about creating one, we’d be happy to help. Schedule a complimentary phone consultation with one of our attorneys today.  

- AlerStallings

If you’ve read any of our previous articles, you know the importance of having an estate plan. But what happens when you’re not sure if your elderly parents have one? How should you approach the topic with them? 


Chances are estate planning isn’t your family’s preferred Sunday night family dinner topic. And let’s face it: though you may be an adult, your parents will always see you as their child. Taking advice from your kid can be a hard pill to swallow. That’s why it’s important to approach the topic with sensitivity and tact, acknowledging their lifetime of hard work and giving them a gentle nudge in the right direction. To help relieve some stress, read on for our tips.  



Respect Their Desire for Privacy 

Boomers and their children (many of which are millennials) differ in many ways, but one of the starkest contrasts is their openness about money. One study found that while 46% of millennials discuss their finances with their parents, the communication channel doesn’t go both ways. Only 24% of boomers indicated they talk to their kids about their finances.  


For much of their lives, talking about finances was (and for some boomers still is) a taboo topic. Millennials on the other hand, having come of age during the Great Recession, believe that talking about finances can be beneficial. The best advice for bridging this divide is to tread lightly. Understand that you can’t tell your parents what to do; instead, make them want to do it on their own.  



Make It Relatable 

One of the best ways to do that is to keep the conversation relatable but simple. Bring up a real-life example of someone you know—such as a family member or friend—who passed away and discuss how their affairs were handled. If they had an estate plan (or didn’t) talk about the impact of that choice and how things could have been different. It’s a good way to broach the subject without putting your parent on the spot. 



Walk in Others’ Shoes 

Considering the impact estate planning could have on other loved ones can be a powerful motivator. For instance, if something happens to mom, the burden of sorting through matters of their estate would shift to dad (or vice versa). If both pass away without an estate plan, the burden could shift to you. Their estate could be stuck in probate (yes, even with a will), racking up attorney fees, with decisions on inheritance being decided by the court. Your parents may not feel comfortable discussing their finances, but they might feel even less comfortable with the idea of leaving one spouse to go it alone or, in the latter example, leaving you in a lurch.  



Bring the Facts 

Did you know only 44% of adults 55 and older have a will? That’s unfortunate for a couple reasons. First, having an estate plan is crucial for helping you avoid some of life’s most difficult situations. Second, a will is simply not enough to avoid probate or protect you from long-term care costs. Many retirees need additional estate planning to adequately safeguard their assets. 


Estate planning is an emotional process; understanding what’s at stake can be the catalyst to forward motion. Share with your parents any of the above links to start the conversation. Let them know what thoughts it spurred for you and let them share their thoughts as well. If they’re open to estate planning, make it easy for them to follow through. Set up the appointment and let them know that you’ll go with them or drive them there if they want. 


And remember, sometimes less is more. That’s why we offer complimentary 15-minute phone consultations with our caring attorneys, so clients can dip their toe in the water and better understand the process with no obligation. If that feels like a comfortable next step for your family, schedule a time that works best for you. We’d be happy to help.