The Five Steps to an Elder Law Estate Plan

Elder law estate planning provides for (1) your care in the event you become disabled as you age, and who will be in charge of that care, and (2) the passing of your assets on death to whom you want, when you want, the way you want, with the least amount of taxes and legal fees possible. These are the five steps to creating such a plan.

Step One: Understanding the Family Dynamics. Clients often overlook the inestimable value of getting to know the family dynamic. We are firm believers that the social goes first and the legal should serve the social. Too often it is the other way around. Once we understand who’s who and everyone’s interpersonal relations with each other, we are far better able to craft a plan that will work socially as well as legally. The failure to address the social aspects has led to many a plan tearing the family apart.

Step Two: Reviewing the Client’s Assets. IRA’s and other “qualified” assets (i.e. tax deferred) are treated quite differently, on death or disability, from “non-qualified” assets. The determination of the amount and value of all assets, who owns them, and whether they have named beneficiaries are of the utmost importance in planning correctly, including saving legal fees and taxes.

Step Three: Reviewing Existing Estate Planning Documents. Not having been prepared by an elder law attorney, clients’ documents rarely have adequate provisions to take advantage of the many benefits the law provides for our elderly population. Wills instead of trusts have often been prepared either because the client was considerably younger and a trust was not needed or a trust was needed but the general practice lawyer was unfamiliar with the specifics of preparing a trust.

Step Four: Developing the Elder Law Estate Plan. We are now in a position to determine which persons are best suited to handle your legal, financial and medical affairs on disability or death, what type of plan should be used and how the estate should be distributed — keeping in mind the preservation of harmony in the family.

Step Five: Executing and Maintaining the Plan. Legal documents are explained and executed, assets are retitled and beneficiaries on assets changed in keeping with planning objectives. The client is called in to the law firm every three years to ensure the plan meets the client’s current wishes and conforms with any law changes.

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