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How Not to Leave a Mess For Your Children

by Phil Levin, Esq. on June 1st, 2018

For many of our clients, their goal is to not leave a mess for their children, either literally, financially or legally.

The literal type of physical “mess to avoid” is the cluttered house. We have worked with many surviving spouses and adult children who have had the task of cleaning out the family residence of accumulated belongings after the passing of a their family member. So de-cluttering and getting rid of our unnecessary worldly possessions often ranks at the top of the list for reducing or eliminating the literal mess.

Today, we often see that children do not want their parents’ valued china and silverware, which only a generation ago, were often coveted treasures to pass on as a legacy to enjoy. Therefore, we have discovered that asking the children about their desires for specific items of tangible personal property is often a good start in the downsizing process.

Elder Law Estate Plan

Our experience working with many clients to establish a comprehensive estate plan reveals that the financial and legal mess may happen as a result of neglecting to complete a comprehensive Elder Law Estate Plan in the event of a temporary or permanent disability, and upon their passing.

Very often, clients want their spouse, then their children, to step in and take over in the event of a disability, but the spouse or children may be prevented from properly handling both financial, legal, and healthcare decisions without up-to-date Financial and Healthcare Powers of Attorney in place. With the proper estate planning legal documents in place, the client selects the people to be designated as their Financial Agent and Healthcare Agent in order to make vitally important decisions in the event of a temporary or permanent illness, injury, or incapacity, which legal documents serve to completely avoid the costs, delays, and publicity of a formal Guardianship proceeding, wherein a judge appoints your legal Guardian.

By implementing prudent advanced estate planning, you and your family can save time, money, and the complications resulting from the invasion of your privacy which occurs through a Court sanctioned Guardianship proceeding. In addition, by establishing an appropriate Elder Law Power of Attorney, which should contain an unlimited gifting power, clients may indeed be able to protect the majority of their financial assets, from the increasing costs of a nursing home, in the event that ongoing long-term care is required due to a physical and/or mental disability.

The average cost of care in many nursing homes in the northeast is approximately $330 per day, and we regularly see long-term care costs ranging between $12,000 to $18,000 per month, depending upon the facility and level of care required. Therefore, if you have not already planned ahead, by seeking competent financial and legal advice, now is the best time for you, and possibly your children, to consult with an experienced financial advisor and elder law attorney to establish an appropriate financial and estate plan for your family.

Don’t Leave a Mess for Your Children

One of the key ways to not having a personal tragedy become a financial and estate settlement disaster, and not leave a mess for your children, is to take action to plan for the possibility of your disability and demise. In addition to the ongoing stress of taking care of an ill parent, children often must deal with the stress of figuring out the next steps in providing for your care, as well as preserving and protecting your hard-earned money from the potential costs of a nursing home.

Clients can indeed plan ahead to protect their assets by seeking the advice of a financial advisor and purchasing a suitable Long-Term Care insurance policy. In addition, establishing an effective Asset Protection Trust can protect both financial assets and real estate from nursing home costs after five years. As a result, the majority of assets can be passed intact to the children, rather than exposed to the costs of care during life, as well as an Estate Recovery Claim by the Department of Human Services after the passing of a family member.

Organizing your personal, financial, and legal affairs, along with relevant paperwork, is a gift to children. Of course, it is also important to share with specific family members exactly where to find your important financial and legal documents. Since may individuals no longer receive paper statements from their financial institutions, it makes good sense to make a list of your online bank and brokerage accounts, including your user names and passwords. In addition to properly identifying your assets, it also is prudent to make a list of any debts which you owe, along with the people and companies that should be notified in the event of your disability or demise.

Clients have shared with me the discovery of savings bonds, cash, and other valuable property discovered in their Mother or Father’s freezer, as well as unrecorded property, including valuable jewelry, hidden away in shoeboxes and clothing containers. We believe that it is just good practice to place your personal, financial, and legal affairs in good order, to reduce the potential stress for your spouse and and children.

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