Estate Planning Retirement Golden Years

Guide: Estate Planning for Retirement and the Golden Years

Why Is It So Important to Engage in Estate Planning for Retirement?

Estate planning is important, no matter what your current age, but it is even more important if you are approaching retirement age. If you don’t have an estate plan, rather than others knowing what you want, you are forcing people to guess. Even worse, you may be allowing the state of Ohio to make those decisions for you. When you make others guess what you want, it can be the source of arguments among your family members—something you would not want.

Many people put estate planning off as long as possible—sometimes too long. While it is true that communicating your final wishes can be emotionally draining, when you have an experienced attorney from Lovett & House by your side, you are much less likely to feel intimidated by the complexities of estate planning. While there are many reasons to engage in estate planning for retirement, below are some of the most important reasons:

You choose who receives your assets and possessions. When you have an estate plan, you are wholly in charge of choosing who will inherit your assets. Virtually everyone in the United States has at least some level of assets, even if that only includes personal possessions. Further, virtually every adult would not want their assets and possessions going to certain family members or to the state of Ohio.
The state of Ohio has no say-so over who will inherit your assets. When you have an estate plan, the state of Ohio cannot use the “pre-written” plan they have in place for those with no instructions. This means the state will follow intestate laws currently in place. Currently, Ohio intestate laws dictate that the spouse inherits 100 percent of the decedent’s assets unless the decedent has children or grandchildren from a prior spouse. If there is a child from a previous marriage, the spouse inherits $20,000, then the remainder of the estate is split equally between the spouse and the child from a prior marriage. If there is no spouse, children, or descendants of children, then the parents will inherit, and if there are no living parents, siblings are next in line. Most people would not be satisfied with this arbitrary distribution of their assets.

You can have inheritances given on your timetable. Perhaps you have adult children whom you feel are not quite responsible enough to manage an inheritance, whether due to outside influences, creditor issues, a divorce, or an adult child may simply be unable to manage money at this time in their life. If this is true in your situation, you can add clauses into your estate plan that will not only protect your beneficiaries from themselves but will also protect them from anyone who tries to take advantage.
You can appoint a trustee in your estate plan, who will manage assets designated for your adult children.
You can ensure your loved ones will pay the least amount possible in taxes.
You can ensure there will be no family turmoil associated with your assets. Unfortunately, many families end up in arguments that can last years—or even decades—after the death of a loved one.
If you want your loved ones to have your assets immediately, you can avoid probate via a trust.
You can choose a person you trust to be your executor. This person will pay your debts and expenses, liquidate assets when appropriate, file your last tax return, distribute your assets to the beneficiaries you have chosen, and generally follow Ohio probate procedures and laws.
You can protect your assets from unforeseen creditors.
In the event you become incapacitated, you can avoid a guardianship. One of the very best things you can do with your estate plan is to plan for incapacitation—setting up your estate so that a person of your choice can make financial decisions on your behalf without having to go through the long, often arduous court process of administering a guardianship on your behalf.
You can choose someone to make healthcare decisions for you in the event of incapacitation. While it is certainly hoped you will never require another person to make healthcare decisions on your behalf, it’s much better to plan for such an eventuality, than to avoid the issue. The person you choose will make decisions pertaining to the type of healthcare measures you would want—and those you would not want, even down to making the decision to cease life-sustaining measures.
You can choose to keep your personal financial details private. Once a will goes to probate, it becomes a matter of public record—meaning anyone with even a passing interest in your business can access the details. If you want to ensure all those details remain private, you can execute a revocable living trust.
You can keep your assets in your family should your spouse remarry. Although it’s not something most of us want to think about, there is a fairly good chance that your spouse will remarry after your death. While this is fine—and even expected—if you want to ensure your assets go to your children and grandchildren rather than to your spouse’s “new” family, you definitely want a comprehensive estate plan in place.

What are the Major Priorities in a Retirement Estate Plan?

Even when you are on board with having an estate plan prepared that will fully protect you and your loved ones in your golden years, you still need to prioritize your goals, so you can focus on the most important aspects first. Your estate planning goals in your twenties, thirties, forties, and even fifties, are likely to be much different than your estate planning goals when you are in your sixties, seventies, and beyond. When you are younger, your biggest priority might be to plan for your minor children, should anything happen to you. As you get older, the priorities might shift to the following:

If you have not already engaged in some level of financial planning for your retirement, you should definitely do it now. While it is impossible to accurately plan for how long you might live, and what future medical expenses you might incur, you should always plan for more than you think you will need. In addition to the assistance you will receive from your Ohio estate planning attorney, you might also consider consulting a financial planner to determine the best way to pay for your golden years.
Your next priority might be to avoid or reduce estate taxes, along with mitigating probate expenses to the extent possible. Remember that while life insurance is not considered taxable income, it can be federal estate taxable.
If you have a business, or if you are a partner in a business or a part of a family business, it is crucial that you engage in some business planning when having an estate plan prepared. You would not want the family farm tied up for years in disputes any more than you would want a business you have spent your life building to be surrounded by disagreements. Make sure you engage in some level of succession planning for your business or family business (Will your family business pass down to future generations?)
As important as any other estate planning priority is to ensure you have planned for the unthinkable—your own incapacitation. Of course, nobody wants to think about one day being incapacitated, and unable to handle their own affairs, but illnesses and accidents happen and are almost always unexpected. Make sure your financial affairs and your healthcare decisions would be made by someone you trust when preparing your estate plan.

What Should You Know About Long-Term Care in Ohio?

As the population of the United States continues to age at a faster rate than ever, it is almost a given that more people will require long-term care. In fact, one estimate states that every day until 2030, 10,000 Baby Boomers will turn 65 and that seven out of ten people will require long-term care in their lifetime. The cost of that care varies significantly from one state to another, and even from one city to another within the same state.

In the state of Ohio, as of 2019, hiring a home health aide can run as much as $4,385 per month. An assisted living facility can cost as much as $4339 per month, while a semi-private room in a nursing home facility can cost $6,996 per month, and a private room $7,817 per month. In 2020, most nursing homes in the Miami Valley cost $10,000 or more per month. These numbers may be a bit disheartening, but it is always better to know exactly what you need to plan for. Additional facts regarding long-term care in Ohio include:

In the state of Ohio, there are 978 skilled nursing facilities and 774 assisted living facilities (as of 2019).
It is expected that the number of Ohio residents who are 65 or older will double over the next two decades, and triple by 2040. The number of Ohio residents over the age of 85 is expected to quadruple by 2050.
Medicaid covers almost 60 percent of the costs associated with those in skilled nursing facilities in the state of Ohio.
The state of Ohio has more nursing home residents under the age of 65 than many other states (19.9 percent of all nursing home residents as compared to 17 percent across the United States).
More than half of all Ohio nursing home residents have a medical diagnosis of dementia—another number that is expected to increase.

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What Are End-of-Life Arrangements?

As a part of your Golden Years estate planning efforts, you will address end-of-life arrangements. While these arrangements are very important, they are seldom easy. It is important to look at making end-of-life arrangements as a burden you can take from your loved ones. When loved ones are not forced to try to determine what end-of-life arrangements you would want, they have the time to go through the grieving process—as they should.

End-of-life planning formalizes your wishes regarding the things you want to happen when you reach the final phase of your life—and after. You will make your end-of-life preferences known, including how aggressive you want medical interventions to be. While your end-of-life preferences are certainly for you, even more, they are for your family members who could have widely different beliefs about what would be best for you at the end of your life, as well as the decisions to be made after your death. While certainly not easy, it can be helpful to have “the talk” with family members, particularly if you happen to be facing a terminal diagnosis.

After you’ve discussed the situation with your loved ones, emphasizing the need for end-of-life planning, you might want to bring one or more of your loved ones to your estate planning meeting with your attorney. This will allow the attorney to answer any questions your family members might have. The following basic checklist will help you ensure your end-of-life plan is solidly in place:

Prepare end-of-life planning documents—Decide whether you need a Will, a Trust, or both, then consider a Living Will, a Healthcare Power of Attorney, and/or a Durable Financial Power of Attorney.
Make an inventory of all your assets—The attorney needs to know the “big picture” of your financial situation. Include all real estate and land, savings and checking accounts, investments, stocks, bonds, cash, CDs, Treasury Bills, Corporate assets, jewelry, art or other collectibles, life insurance policies, and retirement or pension plans. A “spoon, knife, fork” level of inventory is not necessary, but details are helpful.
Consider end-of-life housing plans—Will you transition into an assisted living facility, or go straight into a nursing home? What about in-home care?
Memorialize your final wishes concerning burial arrangements and funeral plans—Do you want a “traditional” funeral service, an open or closed casket, a wake, a memorial service, a Celebration of Life service, only a graveside service, or only a scattering of ashes ceremony?
Create your own obituary—While obituaries are often left until a person passes, it doesn’t necessarily have to be that way. Some people choose to write their own obituary and death notice, which includes what they want others to remember about them.

Death can definitely bring sadness to those left grieving, but there is comfort in knowing you took some of the decision-making burdens from your loved ones, making it at least a bit easier.

What is Legacy Planning?

If you believe the best things in life aren’t things, then you already have a pretty good understanding of legacy planning. Of course, there is value in our financial assets, and of course, we want to leave our family members with financial assets after we pass. That being said, there is even greater value in family “treasures.” These treasures can include precious heirlooms that have been passed from one generation to the next, as well as our family history, our beliefs, and even our morals.

When you engage in legacy planning, you leave a clear plan for passing on your legacy. The decisions you make that will ensure responsible behaviors, the core values of your family, and the level of community involvement you find important, are a part of your legacy planning. Even the “stories” that every family has passed down from one generation to another and the life lessons learned by your family through the years are a part of your legacy.

Your Ohio estate planning attorney should not be involved in the “heritage” part of your legacy planning. Although you may want to spend some time gathering information regarding the legacy you want to leave behind, do not do this as part of the planning with the attorney. However, another part of legacy planning in which you should involve the attorney is the more “traditional” estate planning that more people are familiar with. This includes determining to whom you want to leave your property and possessions, who you will leave in charge as executor, who you will choose to make decisions on your behalf should you become incapacitated, and how you want your loved ones to handle your final days and the period of time after your death. Legacy planning can encompass all these things and more!

What Are the Most Important Documents Required for Estate Planning for the Elderly?

The exact documents you will need for your estate plan will depend on your unique situation, however, the following documents are generally used in estate planning for the elderly:

Last Will and Testament—Most of us immediately think of a Will when we think of estate planning, which is natural, as a Will is definitely a significant building block of an estate plan. You can appoint an executor in your Will, who will carry out your stated wishes. A Will is also a good place to list the smaller items you want to leave to your loved ones, even those with little financial value, but great sentimental value. In short, a Will can prevent conflict between your family members after you are gone.
Revocable Living Trust—A Revocable Living Trust is a document that can complement a Will. While the terms of a Will don’t kick in until you die, a Living Trust allows you to use and enjoy your assets during your lifetime, then if you were to become incapacitated, the Living Trust dictates how your assets will be managed, designating a successor trustee to manage them. While a Will must go through probate—meaning your heirs may have to wait for months, or even years to receive their inheritance—a Living Trust can transfer those assets immediately. Since a Will must be probated, it is a public document, available to anyone with an internet. A Living Trust, on the other hand, keeps your business private.
Durable Financial Power of Attorney—If you are unable to take care of your financial affairs (and a business if you have one, or are part of one), it is a mistake to think that your spouse or adult children could simply step in and take care of your financial affairs for you. Although a successor trustee can manage your trust assets in the event of incapacitation (if you have a Living Trust), you will still need a Durable Financial Power of Attorney to grant a person of your choice the ability to conduct business on your behalf (opening or closing accounts on your behalf, paying your bills, collecting rents or other money, or even entering into contracts, if you give him or her that power). It is important that you not wait to have a Durable Financial Power of Attorney prepared on your behalf. By the time you can no longer handle your affairs, you may not be legally able to appoint an agent. The last thing you want is to force your family to go to court and sue you for the right to handle your business affairs.
Healthcare Power of Attorney—While a Durable Financial Power of Attorney specifies who will make financial decisions on your behalf in the event of your incapacitation, a Healthcare Power of Attorney gives a person of your choice the right to make healthcare decisions for you. The person you designate in your Healthcare Power of Attorney will decide on medical treatments, and even when to avoid—or take—heroic measures to keep you alive.

There are many other estate planning documents you could potentially benefit from, so it is important that you talk to your Ohio estate planning attorney to determine which documents are right for your specific situation.

How Does Medicaid Affect Retirement and “Golden Years” Estate Plans?

Many people (wrongly) assume that Medicare will take care of nursing home costs, should they need long-term care. Unfortunately, Medicare Part A will cover only the first 20 days in a Skilled Nursing Facility, providing the individual has been hospitalized for at least three days. When certain requirements are met, Medicare may cover part of the succeeding 80 days in an SNF. This leaves most people who must enter a nursing home or other SNF with few options for paying for this care, other than Medicaid.

Medicaid varies from state to state—as of 2019, Ohio uses two different parameters to assess one’s needs. The monthly Ohio Medicaid income limits are $2,250, while the Ohio Medicaid asset limits are $2,000. You are allowed to have certain possessions as well, and for married couples who are both planning to enter a nursing home, the limits are higher. To be eligible to receive long-term care benefits through Ohio Medicaid, a person must be at least 65 years of age, be disabled, or be blind, and must require a nursing home level of care. He or she must also meet the program’s asset and income requirements. Those receiving Supplemental Security Income may automatically qualify to receive benefits.

There are many things you need to do ahead of time to be eligible for Medicaid to cover long-term healthcare. There are also things you should not do—you should not give away any of your assets or possessions without first speaking to a knowledgeable Medicaid estate planning attorney. Medicaid has a five-year lookback period, meaning your attorney can help you plan ahead so you are not forced to spend everything you have been saving your entire life on nursing home care before Medicaid kicks in.

If you have set up a trust, there are other Medicaid issues to consider. A revocable trust means the person who created the trust can access the principal at any time; therefore, assets are considered an available resource in Medicaid’s needs assessment. An irrevocable trust provides more limited benefits to the creators; therefore, the underlying principal cannot be touched by Medicaid.

What Documents Should You Bring with You on Your First Visit With an Estate Planning Attorney?

Do not wait to see the attorney! Even if you do not have all of the documents the attorney would like to have, do not delay the start of the process. Oftentimes, time is short, and it is more important to get started than it is to plan for a perfect meeting. Here is a list of all of the things it would be best to bring to the first meeting if they are easily available:

A written list of all your concerns or questions so you have all your questions thoroughly answered.
Up-to-date financial statements
Up-to-date retirement account statements
Recent bank statements
Recent investment statements
Mortgage information, or the deed to your house
Pre or post-nuptial agreements
Life insurance policies
Your retirement plan
Any annuity contracts
Contact information for your CPA, financial advisors, etc.
Contact information for medical professionals who treat you
Contact information for family members
Contact information for those you intend to name as executors, trustees, guardians, and agents.
Your basic estate planning goals
Information on the charities you support

However, most people know from memory what the attorney most needs to know. It is better to get started with little information than delaying to try to bring everything to the first attorney meeting.

How Often Should You Update Your Estate Plan?

You should never consider an estate plan a “one and done” task. As your life progresses, you will likely see many changes. You may get married—or divorced—you may have children, you may change jobs, you may see a significant increase in your wealth, or it could take a downturn. You could have grandchildren, or you might need to consider college expenses for children or grandchildren. All of life’s normal changes mean you may need to make changes in your estate plan as well. Generally speaking, you should revisit your estate plan at least every two to four years, or whenever there has been a major change in your life.

What Documents Should You Bring with You When Updating an Existing Estate Plan?

Don’t worry about what you must bring. Most people know from memory what the attorney needs to know. In a perfect world, if you are updating your estate plan because you married, then your attorney would like to see your prenuptial agreement if you have one, and any other pertinent information about your spouse’s family and finances. Whatever situation has caused you to update your existing estate plan, if you could bring any paperwork related to that situation, it would be optimal, but not essential. If you are simply going in for a checkup on your estate plan, you might ask your Ohio estate planning attorney what you need to bring. The most important thing is to get started by making an appointment with the attorney.

Planning for Long-Term Care of a Family Member or Loved One—or Yourself

Whether you are creating a final estate plan, engaging in Medicaid planning, preparing for a nursing home stay, or are interested in estate planning after retirement, it is important that you have a highly experienced Ohio estate planning attorney by your side to guide you through the process. If you are planning for the long-term care of a family member, the situation could be a bit more delicate.

Nobody wants to be told that it’s time to leave their home and go into a long-term care facility, which is why talking about long-term care with a parent is never an easy conversation. Because of this, it is vital that you are prepared when the time comes and are not forced to make hasty decisions on providing your loved one with the care he or she needs. You want to make sure your loved one has the quality of life they deserve while considering financial implications.

Few people can afford long-term care insurance, particularly since the costs increase with age. If there has been little preparation for this moment, you may be forced to make decisions regarding the financial aspects of nursing home care that you would rather not have to make. Don’t panic when you are left to make these decisions for a loved one—speak to a highly knowledgeable Ohio estate planning attorney to have all your questions fully answered.

Why is Having an Experienced Estate Planning Attorney So Important?

When considering whether you need to hire an estate planning attorney it is important to remember just how serious estate planning is. One misplaced or wrong word, or a missing signature, could effectively change the entire intent of an estate planning document. States, including Ohio, are very specific regarding what can and cannot be in a document such as a Will, a Trust, a Financial Power of Attorney, as well as regarding who can and cannot serve as a personal representative.

Thinking you will save a few dollars by preparing your own estate planning documents can result in a rude awakening for your family. Perhaps they might learn your Will, Trust, or other document is not properly prepared and therefore is not valid. This could result in thousands of dollars spent by loved ones to try and untangle the mess. While having an experienced estate planning attorney is always a good idea, it is particularly applicable when you:

Have complex family issues (you are in a second or third marriage)
You own one or more businesses
You have a disabled or impaired family member
A beneficiary is drinking, gambling, or on social security disability
You own real estate in more than one state
You want to leave some of your estate to charity
You have significant retirement assets
You recently lost a spouse or other family member
You have (or don’t have) children
You were recently divorced

As you can see, virtually any life situation can potentially make your estate plan difficult. Therefore, you should always contact an experienced estate planning attorney when creating a final estate plan, estate planning after retirement, estate planning for the elderly, or preparing for a nursing home stay.

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How an Attorney From Lovett & House Can Help

If you are wondering how to prepare for a nursing home stay, are concerned about Medicaid planning, are engaging in estate planning after retirement, or creating a final estate plan, the Lovett & House attorneys have the experience, knowledge, and skills to help you through the process in the very best way possible. Whether you are planning for yourself, a spouse, or a parent our estate planning attorneys will sit down with you, answer all your questions, provide the information you need to make informed decisions, help you figure out what your future planning needs are, and how we can help. We are eager to hear from you and help set your mind at ease while guiding you through the estate planning process.

Contact Lovett & House today at (937) 909-0770 for the very best in estate planning assistance.

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