The troubling thing about a crisis is that it could hit at any time. Accident, illness, injury or death, these threats are all too real. Lawyers know that they always arrive hand-in-hand with unexpected legal and financial stresses. The good news is, there are ways to prepare. Here are 4 essential precautionary measures you should take before a crisis ever hits:
1. Get a Last Will and Testament
A will lets you decide who inherits from you. If you die without a will, the state will decide who receives your property and life savings. This happens by statute, without regard to your wishes or your family’s needs. A will lets you decide what happens to your money, real estate and personal belongings after you die. For example, you can choose to leave something to charity or leave your home to a family member. You can use your will to specify your wishes regarding burial, cremation and/or memorial service. It will also ensure a smooth transition of your family business to whomever you choose, in the manner that you choose.
A will not only helps you, it also helps the people you care about. Leaving a will with instructions for your family to follow after your death eases the burden on your loved ones.
2. Get an Power of Attorney
If you become unable to manage your affairs, a power of attorney lets you decide who makes your key financial decisions. If you don’t have a power of attorney in place, a court may have to step in and appoint someone to handle your money, property and investments. This could cost your family thousands of dollars in attorney’s fees and court costs, and the court might not appoint the person you would have chosen. A power of attorney gives you the power to decide who manages your affairs, and under what circumstances, and it is a relatively quick and inexpensive document to obtain.
3. Get an Advance Medical Directive
An advance medical directive is a document that allows you to choose who will make your medical decisions on your behalf. Like a power of attorney, it gives you the ability to choose an agent to handle your decisions. It also lets you make the big, difficult decisions about end-of-life choices in advance. For example, would you want your doctors to continue life-sustaining treatments if you have suffered irreversible damage to your mental functioning? An advance medical directive is a statement of your wishes for the kind of life-sustaining medical intervention you want- or don’t want- if you are no longer able to communicate your wishes.
Knowing your preferences in advance can be extremely important in helping your family through a time of crisis. These decisions are deeply personal, and an advance medical directive allows you to communicate instructions about your health care based on your personal beliefs and values. Without this document in place, a court may step in to appoint a guardian to make medical decisions on your behalf. An advance medical directive ultimately allows you to choose someone who you trust to be in charge of your medical decisions, rather than a guardian appointed by a court.
4. Get a special trust made for Medicaid asset protection
Illness and injury send many aging adults into long-term care facilities. In fact, about 7 out of 10 people over age 65 will need long-term care. The national average cost for a private room in a nursing home is $83,580 a year. A significant portion- 30% of people- will stay in a nursing home for five years or more. Often, a person admitted to a nursing home feels forced to spend down their life savings and sell their house to pay the bills. But it doesn’t have to be this way with a little advance planning.
A Medicaid Asset Protection Trust will help ensure that you can leave an inheritance to your family, protect your savings and property that you've worked your whole life for, and have some extra savings to help ease the last chapter of your life. A Medicaid Asset Protection Trust may sound like a mouthful, but it could save you tens or even hundreds of thousands of dollars down the line. This specialized kind of trust will set you up to protect your assets while at the same time helping you qualify to receive Medicaid assistance to pay for nursing home care.
It's important to be very careful when setting up your trust. The rules of Medicaid qualification are very complex, unforgiving and often misunderstood, which is why only a qualified elder law attorney should set up your Medicaid Asset Protection Trust! A Medicaid Asset Protection Trust is a very special and specific kind of trust. Not just any trust will do, and many estate planning lawyers don’t have Medicaid planning as a tool in their skill set. There are many ways to be disqualified for Medicaid, and only an experienced elder law attorney will be able to assess what’s best for your situation. If you'd like to learn more about this kind of trust, please contact us for a free consultation.
The earlier you start planning, the more you will be able to save. Visit our Medicaid Planning page to learn more.