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Key part of elderly planning could be long-term care insurance

The statistics for Texas and the rest of the country say that seven out of 10 people over age 65 will need some level of nursing home care at some point. It is an unfriendly topic, one that most would prefer to file away in that special drawer called "procrastination," but the economic figures are so foreboding that it is a topic that needs to be discussed. The fact is that paying for long-term care is such an expensive proposition that many people may be well-advised to consider long-term care insurance.

The harsh details are that nursing home costs generally range from $5,000 to $10,000 per month. That can come to at least $300,000 for an average stay. The bad news is that this tab is not covered by health insurance or Medicare. That is a big chunk of worry to digest at one time, at least for those who do not have ice water flowing through their veins.

Power of attorney may be most effective if made earlier in life

It is prudent to take the steps to create an estate plan early on so that everything will be prepared in case some untimely health problem arises in one's later years. If a person becomes disabled and unable to care for his or her own financial affairs, there are critical estate planning tools here in Texas and in other jurisdictions that should be in place. Thus, for example, a power of attorney giving authority to the maker's chosen representative, if put in place early enough in life, will assure that the right person will be taking care of one's affairs.

Furthermore, a disability that leads to incompetency will be a costly matter for one's estate where there is no power of attorney. It will create a need for a court-appointed guardian of the incompetent's estate, and even if that guardian turns out to be a family member, legal fees and administrative costs will eat up substantial funds. The guardian, even if it is a trusted family member, will have to present costly accountings to the court periodically and, in that way, continue to reduce the funds available.

Sibling rivalries don't mix in the elderly planning process

When siblings are called upon to take care of an elderly parent, the stage is set for conflict, especially where the siblings do not communicate freely and regularly on the problems and issues that may arise. A first issue in elderly planning that often arises in Texas and elsewhere is who will be the primary caregiver. Where one sibling resides close to the ailing parent, that will often be the deciding factor.

Caregiving duties can be divided by schedules and other family needs, but this can only be done with siblings who are communicating and frankly offering their opinions in a free interchange of ideas and information. Other divisions of labor can take place based on what skills each of the siblings possesses, so that a financially capable sibling may take over the financial records and payment of bills through the power of attorney. Another sibling may be more adept at the caregiving aspect of the job.

Estate planning can save substantial funds for one's family

One of the most compelling reasons to do estate planning is that it can save thousands of dollars prior to and after death. However, it's not something to do with some pumped-up forms on the Internet. A Texas resident will always do better by using experienced professional assistance in estate planning matters that involve the application of the law to one's personal and financial circumstances.

After all, estate planning is done at least in part to cover that potential time when a person may become mentally incompetent and unable to act on his or her own behalf to conduct the affairs of daily living. Think about whether it would seem better to have your plans followed according to the terms of your own power of attorney and health care directives in such a situation, or whether you would prefer to have the state take over control of your person and appoint a guardian to act on your behalf. Presumably, you will choose the first option, especially since the appointment of a guardian and the administration of a guardian's affairs may cost you thousands of dollars.

Elderly planning includes discussions about many subjects

When a child is helping an elderly parent with the potential needs of long-term care, it may be critical to get some planning done as soon as possible. This is important in the event of an untimely deterioration in the parent's health, which may make discussions and elderly planning highly problematic. For Texas residents, advance elderly planning can save substantial assets and ease the transition for all concerned.

Subjects like home-care, title to real and personal assets, preferences for payment of bills, legal protections and insurances are all important enough to prioritize. The hardest part may be to break the ice and actually have a discussion that deals with these sensitive issues. There is always the danger of the parent feeling that the child is trying to rush things or is otherwise being uncaring. The situation may call for extraordinarily thoughtful approaches to the subject matter.

Living trusts can be an integral part of wise estate planning

Living trusts can be an essential aspect of a person's estate plan. Estate planning in Texas and everywhere else utilizes a will to dispose of any assets owned at the date of death by the testator, who is the person who made the will. Estate planning uses living trusts to dispose of assets during life with the option of making the transfer of assets either revocable or irrevocable.

The key difference between living trusts and a will is that the transfer of assets during life through a trust vehicle obviates the need to have those assets go through probate upon death. Probate is the legal administration of assets through the decedent's estate, along with paying creditors and disposing of those assets that remain through the dictates of the will. Assets may be taxed in some instances when they go through probate.

Many considerations go into elder law planning for a loved one

According to one specialist on the subject, long-term care in this country has become convoluted and in need of a legal overhaul. Because of the levels of uncertainty built into the system, elder law planning in Texas and elsewhere must take place as early as possible. As previously mentioned, it can be decisively important to have discussions and family meetings with the elderly loved one regarding desirable options.

One of the problems is that it may be necessary for an individual or a couple to spend down their assets well in advance of any period of future disability or incompetence. Somehow, we've inherited a system that demands poverty, so that Medicaid can step in and finance long-term care. Irrevocable trusts and other directed spending can be useful in preserving assets for beneficiaries while becoming positioned for later government aid.

Despite exemptions, taxes remain a component of estate planning

Estate planning with respect to federal estate taxes is fairly easy for most people: the person's estate at death has to be larger than $5.43 million in gross value to be subject to federal tax. Some states, however, collect an inheritance or other type of death tax. Texas does not have an inheritance or other death tax, making estate planning for taxes a fairly easy tax for the average Texas resident.

The current federal and state rules may change in the future, so that it can't be said that the current situation will last. The best thing to do is obtain a consultation with an estate planning attorney to determine whether your situation will involve an actual estate tax based on changes in the law. The relief in death taxes has also created a change in focus for estate planning specialists.

Diagnosis of dementia calls for long-term care plan

When a loved one is struck with the unthinkable, such as a diagnosis of impending Alzheimer's disease or another type of dementia, planning should start immediately if it's not already in place. Unfortunately, both in Texas and throughout the country, the stress and shock of coping with such an overpowering disease is combined with extraordinary medical expenses that few can afford. Therefore, long-term care planning for dementia can bring about substantial benefits, both economically and emotionally.

If planning is not already substantially in place, active planning should start as soon as the diagnosis is received. The foresight of advance planning carries a benefit in addition to financial: the loved one who has received the diagnosis may be able to effectively participate in much of the planning process. The first step may be to get a family meeting and take a look at the expenses and potential expenses involved.

Estate planning is critical for asset control and peace of mind

The federal estate tax does not kick in unless a person's estate is worth more than $5,340,000. Most people do not have to worry too much about the federal estate tax, therefore, when they do their estate planning. However, some states have an inheritance or death tax that applies to estates of a far lower value. Texas currently does not have an inheritance or estate tax, but there is always a possibility of change, so that it is advisable to check with an estate attorney to find out of whether there is an inheritance tax in the state.

For married couples, with proper estate planning, the federal estate tax will not kick in for estates up to $10,680,000. Regardless of whether your estate would be subject to taxes, there are other vital concerns that militate in favor of estate planning. For example, in order to protect your assets and needs for future contingencies, you should make a durable power of attorney, a living will and health care proxies now.

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Austin, TX 78734
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Addison, TX 75001
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