In theory, drawing up a will is a great idea. After all, it is a way to plan for who gets your assets after you die. You have cared for a house or car for years and do not want to see your time and hard work go to waste with someone who might not appreciate the assets.
However, wills sometimes provide a false sense of security. The reality for many situations is that comprehensive estate planning is necessary to ensure your heirs end up with the assets you want them to. Here is a look at why.
People are living longer, and while some might stay healthier for longer too, these extended lifespans come with a hefty financial cost. In 1950, Jack might have died of cancer at age 65. Nowadays, Jack might survive cancer at age 65, need to go into a nursing home at age 75, grapple with serious health problems on and off, and die at age 90. The type of care Jack requires does not come cheap. Fortunately, government programs such as Medicaid help ensure that many people do not get left behind. To receive that help, though, you must have a minimum of assets in your name.
So, if Jack at age 72, three years before he goes into a nursing home, draws up a will and leaves his house to his daughter, he risks the house not going to her if he or his family has to sell it for him to qualify for Medicaid (or if it is not sold, he risks the Medicaid program selling it after his death to pay for the costs of the care he incurred). On the other hand, if he starts comprehensive estate planning as early as possible, he can avoid a wide range of scenarios, and his assets can end up with who he wants them to.
That said, it is still worth your while to consult with a lawyer if you have already begun to sell off assets to qualify for Medicaid. Your lawyer may be able to help save some of what is left and figure out a better way to plan financially.