Some people wrongly think that estate planning should be done when they get old. But the truth is, it is never too early to plan. Planning now gives you peace of mind that should something happen to you in the future, you already have things covered.
Think about long term care. If you do not plan early, your hard-earned money will be used to foot your nursing home and medical bills when you get old. Then you wouldn’t have so much left to pass to your loved ones even if you have a will already. To avoid having your estate eating up by the high long term care costs, you need to make strategic plans at least 5 years before hand. This is known as Medicaid and long term care planning.
Medicaid and Long-term care planning
Medicaid and long term care planning is an aspect of estate planning whereby you “spend down” your assets so that what’s left falls below the Medicaid threshold. When you later apply for Medicaid and they verify you only have limited assets, you would qualify for Medicaid. Your nursing home costs and health cate would be paid for by Medicaid.
But if you do that “spend down” – possibly by gifting to loved ones or keeping your assets away in an irrevocable trust – within 5 years of your Medicaid application, you would not be eligible for Medicaid for some time (penalty period). This means your assets will still be used to foot your bills until the penalty period is over. And that is why you need to plan early so that you can save your assets.
Other reasons why you need to plan early
· Your minors can’t inherit property
In New York, children under the age of 18 (minors) cannot inherit property. So if you have kids, how do you ensure they get the kind of life you want for them if something happens to you today?
Through proper planning!
You can leave assets for your children in a will or trust and then name a guardian who will manage these assets for the children’s benefits. When they reach 18, whatever is left of the funds will then be passed on to them.
Death can come at anytime, even before your children turn 18. So you need to plan now rather than wait for later when you get old.
· Saving you and your loved ones from huge estate tax
Across states, there is an amount known as estate tax exemption amount. In New York, this amount is $5.93 million as at 2021. If the estimated value of your estate falls below this amount at the time of your death, you estate can pass to your inheritors tax-free. But if your estate exceeds that value, an amount known as estate tax must be paid to the state of New York.
However, through proper planning, an estate planning attorney in Queens can help you prevent this, ensuring your valuable money goes to your loved ones who deserve it.
· Incapacity can hit at anytime
Incapacity does not only come during old age. Accident can render an adult disabled in incapable of managing their finances or even making personal decisions anymore. Although such things are horrific to think about, the best way to ensure your voice is still heard during such a time is by planning now. You can create powers of attorney and name a competent agent who will manage your financial and health care affairs in the event something happens to you. Your agent is bound by law to always act in your best interests. It’s also a great idea to appoint someone who you know thinks like you and would make the same decisions you would have made.
Our New York estate planning attorneys can help you
Estate plan is important for everyone. It brings peace of mind for the future, and the best time to plan is now.
You shouldn’t wait until you are ready to be put in a nursing facility before making plans. You have to plan long before that time (at least 5 years) in order to save your assets and protect your loved ones. Our New York estate and elder law attorneys can assist you.
Our attorneys are proficient in elder law and estate planning and will help you strategize towards Medicaid eligibility, appropriate gifting, incapacity, tax, and asset transfer among others.
Call us today for expert assistance. Your first consultation is free.
