Estate planning is the beginning element of Elder Law. Most attorneys do a good job of Estate Planning which is making sure what you have at death goes to where you want it to go. This is great for most of the population, however, Elder Law estate planning focuses on the needs of the aging population and particularly the needs to protect assets in light of the various issues that can occur in the last years of life: long term care.
Elder Law estate planning focuses on protecting assets. The core of the Elder Law Estate plan is the Power of Attorney for finances and healthcare. This document is THE most important document for the older client. Everyone over the age of 18 needs to do these documents but it is imperative that the older client do this. The chance of spending some time with some level of incapacity is very high as you age. Having a Power of Attorney in place will, in all but very limited circumstances, avoid a guardianship. That is court, expense and humiliation. Also, not just any Power of Attorney will work. The power of attorney that the older client needs is very comprehensive. I essentially recommend a Power of Attorney that will allow the agent to do ANYTHING that needs to be done. Having these powers will allow us to protect your assets in light of the expenses of long term care.
You may be surprised by my recommendation for probate avoidance. First and formost, you don’t want to go through Probate in Arkansas. Probate is the process of getting things out of the name of a deceased person. For example, when a person dies as the sole owner of their home, that home is now “stuck” in that person’s name. The only way to get it “unstuck” is to go to court and have a Judge authorize for it to be moved. Your Last Will and Testament is what tells the Judge what to do with your stuff. It is essentially the “roadmap” through Probate. Having a Last Will and Testament does NOT avoid probate. If you die with things “stuck” in your name, you have to go through Probate, will or no will. Probate is expensive, time consuming and public knowledge. All of which can be easily avoided.
The way to avoid probate is to make sure nothing is “stuck” in your name upon your death. There are two ways to do that. One way is very quick and easy and cheap (and not discussed by most attorneys since there are very little if any attorney’s fees associated with that planning) and there is a way that is very thorough and may be the only way to do what you want, but does cost more (and the preferred method of most attorneys).
This is the cheap and easy way to avoid probate. It’s how the vast majority of my clients avoid probate since it works in their situation. To do this, you simply name a beneficiary to every asset you own. For the home, you do a deed that allows you to live in the house and control the house while you are alive but the property then goes to whomever you designate on the deed at the time of your death. It’s automatic and happens when you draw your last breath. For band and investment accounts, you simply name a Payable On Death (POD) or a Transfer On Death (TOD) beneficiary to each of those accounts. That’s all there is to it to be sure that your assets go very quickly and efficiently to your heirs.
Now, this doesn’t work in certain situations. First, the POD designation is usually equal to all the people you listed on the account as beneficiaries. If you want to do unequal distributions, this plan does not work. This plan also does not account for the death of a beneficiary before you. You can change this at any time but if you do not change it and a beneficiary passes away before you and you wanted their money to go to their heirs, then your plan will not work as planned. Also, the money goes to the heir as their money and is subject to bankruptcy, divorce and lawsuits. If you want to protect the money for the heir, then the only way to do that is with a trust. Also, to ensure that a deceased child’s heirs benefit from your estate, then you will need to do a trust to take into account that possibility.
Revocable Living Trust
I do Revocable Living Trust (RLT) but not as much as I “could” nor as many as most other estate planning attorneys. I always suggest the Beneficiary Designation plan for all clients. However, as state above, that plan does not work for everyone and they need to then do a trust. A trust avoid probate by the assets are no longer owned by you but by the trust therefore nothing is in your name at the time of your death or immediately following your death (when you name the trust as the beneficiary). The trust doesn’t “die”. It carries on to the beneficiaries and is managed by the Trustee, that you designate. I tell families that with a trust the kids can literally sit down after the funeral and start managing your affairs.
Please let me work with you and your family to help you avoid probate but most importantly how to do it that fits your needs.