An Overview Of Elder Law And Estate Planning
Elder law planning usually begins with a crisis. As the result of a catastrophic illness or disability, a spouse or parent faces admission to a rehabilitation and therapy facility, assisted living facility or nursing home. The spouse/family fears that everything the incapacitated person saved during his or her lifetime may be at risk. The bad news is that the answer is yes; the good news is that it doesn’t have to be.
Macri & Associates, LLC in East Hanover, New Jersey, offer services in all areas of elder law and estate planning. You can read general information about these areas below and reach out to us for more in-depth information about your specific situation.
Asset Preservation / Medicaid Planning
Estate and Tax Planning
Reduced to basics, estate planning is the need for a will, a power of attorney and a health care directive/living will to assure that your “legal house is in order.” If the estate is subject to State or Federal estate taxes, the necessary tax planning will be incorporated into the estate planning. This is the beginning, not the end, of the need for planning.
We next concentrate on life time planning to minimize income and gift taxes on investments while you are alive and to implement asset preservation planning to minimize your lifetime estate from medical spend-down for long-term health care costs.
While estate taxes can take 40 percent and income taxes up to 38 percent, long-term care cost is referred to as the “100 percent tax” since it can exhaust your entire estate.
The above estate, tax and lifetime planning needs use specialized trusts to achieve asset preservation.
To avoid or minimize estate taxes, Macri & Associates, LLC will use “qualified disclaimer” trust provisions in the will to allow establishment of a credit shelter and/or a marital trust for the benefit of the spouse and children. There may be a need for spend thrift trusts for potential beneficiaries who are financially irresponsible; a need for disability trusts for the special needs/care of disabled children or beneficiaries; minor trusts for underage beneficiaries to allow the money to be used for limited purposes until they reach a mature age and the funds are released.
Most tax and estate planning advisers stop there with the tax techniques and leave the residuary of the testamentary estate to the surviving spouse, without addressing the 100 percent tax noted above long time care. Without further protection, the will is the same “sweetheart will” we see on a daily basis whereby one spouse passes the entire estate to their sweetheart/surviving spouse.
Consider these complications of the sweetheart will: What if the surviving spouse is disabled, in a long-term care facility or on public benefits? The inheritance received must be spent on the medical care/facility cost of the surviving spouse and will disqualify him or her from public benefits/Medicaid. In effect, you have made the medical care provider/ facility the beneficiary of your will!
Guardianship And Conservatorship
Our lawyers view guardianship as a last resort, when no other alternative, such as power of attorney, is available. Rushing someone into guardianship without that person’s cooperation can make the process difficult and complex as well as pit child against parent and sibling against sibling.
Prior to beginning our elder/disability focus 24 years ago, we spent 20 years in commercial and residential real estate law. This background is invaluable in preserving homes and other assets as part of the asset preservation process.
Free Lawyer Consultation
For a free initial consultation with Vince Macri, one of only 450 attorneys nationwide certified in elder law (CELA) by the National Elder Law Foundation, call 973-577-6010 or fill out the fee-free contact form on this website. We service New Jersey residents only.