It’s never too early to think about your estate plans.
Estate planning and financial management are critical components of a person’s well-being in old age. Given how important these plans are to maintain your lifestyle, health, and daily needs we’ve answered four common questions about it below.
1. Will I Need Elder Care?
Everyone will need some sort of assistance during their retirement years. However, the level of care that someone needs will vary. To gauge the level you’ll require, begin by assessing your current health and family history. If there are common genetic illnesses, you may need to consider saving for a more intense level of care (for example an assisted living facility or nursing home).
If you don’t have a history of illness and would like to try and stay in your home as much as possible, the level of care you’d need will likely be minimal. But you should still be prepared to plan for things like assistance with daily activities (like driving or getting groceries).
2. Do I Really Need an Estate Plan?
The short answer is yes, everyone should have an estate plan. Many people think that they don’t need to have one because they have no valuable assets, but asset distribution is only one component of an estate plan. Estate plans also outline a person’s final wishes; including a will, any trusts, powers of attorney and health directives that they may have.
3. Should I Consider a Living Trust?
A living trust is another document that should be considered when forming an estate plan. A living trust is created by someone who is still alive and is known as the ‘grantor.’ In the document, the grantor agrees to transfer the title of the listed assets to another person. However, this does not mean the person receives the assets immediately as only upon the death of the grantor will the assets be fully assigned.
One of the main benefits of a living trust is that it does not have to go through probate. This means that the transfer of items tends to be quick, smooth and without additional court costs. Another benefit (depending on the type of living trust) is that grantors could be locked into a tax rate that won’t increase over time which means they will know exactly how much they owe and can better plan for it. The final benefit to a living trust is that it adds an extra layer of protection from creditors and legal challenges as the assets listed in it are protected.
4. How Will I Pay for Elder Care?
Many people avoid discussing elder care plans because they get overwhelmed about the cost of it. But there are a number of tactics that you can use to save for the future. As mentioned above, a living trust is a great way to protect your assets while saving on taxes which can offset some of the financial burden of elder care.
Another great resource is to invest in long-term care insurance which can cover the cost of nursing home or in-home care expenses. There are also plenty of government programs that could offset your monthly spending while in your golden years. Programs like social security, veteran benefits, Medicare or Medicaid should all be explored before taking on the financial burden yourself.
Ultimately, any question regarding estate plans should be talked about with a financial professional. At A.P Accounting and Tax Services, we can talk you through your questions and come up with an end of life plan that suits your needs. So, instead of struggling to manage it on your own, get a plan in order by giving us a call at 407-328-5001.
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