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East Hanover New Jersey Elder Law Blog

4 assets to include in your will

As you sit down to draft or revise your will, you may have trouble starting. Deciding what happens to your belongings and wealth after you die can be an intimidating task. Additionally, it can be confusing to know what you can–and should–include in your will. 

Your will is going to be unique because your assets, family situation and desires are specific to you. However, there are some general guidelines for what you should consider accounting for in your overall estate plan.

What kinds of advance directives are recognized in New Jersey?

While it is not exactly pleasant to think about, New Jersey residents might want to take the time to consider what end-of-life care they want when they are near death and who they want to make health care decisions on their behalf if they are incapacitated. It can help to legally document these preferences, so that they are upheld when the time comes. To do this, people will need to execute an advance directive. New Jersey recognizes two types of advance directives: instruction directives and proxy directives.

Instruction directives are also referred to as a living will. In this document, a person will detail whether and when they want, or do not want, to have life-sustaining treatment should they be unable to express their preference on the matter. This document serves as a guide to doctors and loved ones who may need to make such decisions per a proxy directive.

What standard should New Jersey guardians use to make decisions?

Being appointed as a guardian over a person should be seen as a last resort, but sometimes if a person is incapacitated, it is necessary. New Jersey recognizes two types of guardianship. One is guardian of the property. This individual takes care of the incapacitated person's financial affairs. The other is the guardian of the person. This individual takes care of the incapacitated person's care planning and non-financial affairs.

The guardian of the person is to help the incapacitated person remain as independent as possible. The guardian of the person must listen to the incapacitated person's opinions, if they can express them, and to act in a way that meets these preferences if it is safe to do so. Guardians will make decisions either by using substituted judgment or the best interest standard.

Medicaid planning and the qualified income trust

People in New Jersey who are in need of nursing home care or other types of assisted living care may be planning on using Medicaid benefits to fund such care. In order to qualify for Medicaid, a person's income must be below a certain level. However, through the use of a Qualified Income Trust it is possible for those with higher incomes to receive Long Term Services and Supports if they are otherwise eligible to do so.

A QIT is a written trust instrument in which a dedicated financial account is established. A person's monthly income that goes above the LTSS income threshold is placed in the QIT account, and thus will not count as income when it comes to determining eligibility for LTSS. However, any money placed in a QIT must be spent every month as determined by the New Jersey FamilyCare Eligibility Determining Agency.

New Jersey residents have options for paying for long-term care

Some people in New Jersey may have given thought to how they will afford the care they may need as they age, and thus have a long-term care insurance policy as part of their estate plan. However, such policies can be expensive, as premiums are constantly increasing. Therefore, it might be worthwhile to consider other alternatives to long-term care insurance.

One option is a "whole-life" insurance policy combined with a rider for chronic medical conditions. With this type of policy, if the policyholder needs nursing home care or another type of long-term care, he or she can utilize the death benefit in their whole-life insurance policy to pay for their care. And, should they pass away before the benefits in their policy are exhausted, their heirs will receive the remaining proceeds under the policy.

3 things to do before you apply for Medicaid

If you require long-term medical care and cannot afford to pay for it or insurance, you may need Medicaid. You could have the desire to apply for Medicaid but feel like the process is confusing and intimidating. Indeed, the application process can be a little difficult to figure out on your own.

However, do not despair or procrastinate applying. You can submit your application and get the coverage you need when you have the right help. Here are a few guidelines to get you started:

Medicaid in New Jersey now covers end-of-life care planning

While it is not exactly a pleasant topic to think about, many people in New Jersey may have opinions on what kind of end-of-life care they receive. Some may not want to remain on life support if they are in a vegetative state. Some may decide that if they are struck by a fatal illness, they want to enter into hospice care. And, some people may want physicians to take every possible step to keep them alive as long as possible.

Leaders at the New Jersey Department of Human Services recognized this issue and have extended the Medicaid program to cover advanced care planning. Patients can fill out advanced directives or Practitioner Orders for Life Sustaining Treatment forms, which are now available online. An electronic database that would make these forms accessible to medical care providers across New Jersey is also in the works.

New Jersey residents may benefit from executing a trust

Some people in New Jersey may think that the only way for them to pass their assets on to their loved ones is to create a will. However, a trust also allows a person to pass down their assets for future generations. Trusts have some advantages that people who are going through the estate planning process will want to keep in mind.

First, trusts can be a good choice for couples with children of any age. If a couple has young children, a trustee can be selected who will take care of the children's financial affairs if both parents pass away before the child is grown. Conditions can also be placed on trust benefits that could help ensure that an adult child who may not be responsible with money will not squander their inheritance away. Special needs trusts can be used to ensure that a disabled child can continue receiving government benefits without having the trust assets counted as financial resources for the purpose of qualifying for government benefits.

Where to turn when guardianship is a last resort

Sometimes, a person in New Jersey suffers from a mental deficiency, such as Alzheimer's or dementia. As a result, they are not capable of making appropriate decisions on their own behalf. When this happens, a legal guardian may need to be assigned for that person.

In New Jersey, the only way a guardianship can be established is if the person in need of a guardian is incapacitated. New Jersey recognizes two types of guardians: guardian of the property, who makes financial decisions on behalf of their charge. and guardian of the person, who makes care planning decisions on behalf of their charge. Either two different people or a single individual can take on these roles. Limited guardianship may also be a possibility if a person has the capacity to make appropriate care decisions on their own behalf, but is unable to handle making financial decisions without help.

Are women prepared for the costs of long-term care?

Most people in New Jersey expect to live long lives. However, many are not prepared legally and financially for their old age. According to one study, this may be especially true for women.

An AARP study of 500 women between 45-years-old to 64-years-old reveals that the majority of respondents do not know what they will need in terms of long-term care, the price of such care and how they will be able to afford it. This is significant, as wives generally live five years longer than their husbands, at which point their assets may already have been depleted. The study concludes that there is a significant need to educate women on how they can execute a long-term care plan.

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