Let’s start by looking at just what an estate is. An estate simply consists of everything you own. Whatever it is, wherever it is, it’s part of your estate.
It’s your house and everything in it. Stocks, bonds, mutual funds. All of your retirement assets.
I got the question down here. What do you have?
One of the first things I do when folks come in to see me to do their estate planning is, I add up the value of all of the assets that they’ve got. Because if your wealth is at a certain level, then that takes our planning in one direction. If you’re not at that level, then we’ve got other options we can consider.
It’s important for me to know what you own, and how you own, and what it’s worth. When I do that adding up of what people own, almost always, people are pleasantly surprised at how much they own. They’re surprised at how much wealth they do control.
Something useful for you to do before the end of this upcoming weekend is, on one sheet of paper, just write down what you own and what it’s worth. Let’s forget about the spoon, knives, forks, everything in the house. Concentrate on your house, your car, your bank accounts, your retirement assets. What are all these things worth?
When you add all those things up, including the death value of the life insurance, I think you’re going to be surprised at how much wealth you control, and that is going to make this one particular point for you. That is, since you control more than what you thought, isn’t it even more important for you to do something now to protect your family?
What is estate planning?
Estate planning is simply a plan for how we’re going to deal with all this stuff. Not just when you pass on, but probably even more importantly, how are we going to handle your affairs while you’re alive, in case something happens to you and you can’t do that yourself?
In fact, the very best estate plans have a few features in common. The very best estate plans deal with your assets so they pass to your heirs without going through probate. In a little while, we’re going to review that probate process from start to finish, and you’re going to see that it’s something you want your family to avoid.
A good plan will help you do that, will help you avoid probate for your family.
A very good estate plan will help you avoid, or at least minimize, federal estate taxes. These come in at very significant, steep rates. They can take a lot of wealth away from your family, and if these apply, you want to know what you can do to minimize that bite on your family.
Furthermore, the very best estate plans deal with your incapacity, so if you can no longer handle your own affairs, you take control. There isn’t going to be somebody employed by a probate court judge to handle your affairs, over which you have no control, and you’ve given him no instructions.
You want to take control of that, and the very best estate plans do that. It’s you taking control to make sure all of these things are happening.
I’m sure you would agree with me it’s important to have a good plan, and I assume that’s why you’re here this evening. Together, we’re going to learn how we can do that for you.
What is Medicaid or long‑term care planning?
You’ll hear me refer to these terms interchangeably, and you’ll also hear me refer to it as nursing home planning. These all mean the same thing, and what we’re discussing here is a means to preserve wealth. This is so we can pay for your long‑term care costs while you’re alive.
What we’re trying to do here is save your home and life savings. We’re going to try to prepare to pay for your expenses for you to stay at home longer. The idea with Medicaid planning is, we want to preserve your wealth as much as possible to take care of you. If you’re here tonight, and you’re concerned about your mom or dad, Medicaid planning is for us to preserve their wealth so you can take better care of them while they’re alive.
The idea with nursing home planning is, we want to make that person’s existence, their day‑to‑day living, as good as possible. We want mom or dad to be as well taken care of for the rest of their life as possible, and we do that by preserving their wealth.
When we do that, we’re also increasing the likelihood that there’ll be wealth left for the family when they pass on. That’s what Medicaid planning is all about.