Happy Valentine’s Day! A day dedicated to celebrating LOVE! Although we typically associate Valentine’s Day with romantic love, we like to celebrate all forms of love. This includes the love we have towards our children, our parents, grandparents, siblings, close friends, and beloved pets. School children routinely exchange cards and candies with their classmates to make everyone feel special.
We celebrate our spouses and partners with chocolates, flowers, poems and cards. While the box of chocolates and the words of affection do not go unnoticed, they just scrape the surface of truly telling someone how you feel. Making someone a part of your estate plan illustrates that you care about them on a much deeper level. Estate planning is cyclical, and the people you provide for now may end up protecting you and your family; even your pets. Here’s how you can add your loved ones to your estate plan.
- Your Spouse
From knowing your favorite foods to your least favorite TV show, you spouse knows a lot about you. But do you know such detailed information concerning each other’s finances? For example, do you have a statement from each financial institution your spouse holds an account with? Have you discussed long-term planning such as who will serve as back-up guardians to your children in case something happens to you? Do you both have a copy of each other’s Last Will and Testament, Revocable Trust, or Power of Attorney? Do you have copies of life insurance policies or 401Ks? If the answer to any of these questions is “NO” then it is time to have a talk. In doing so, you can rest assured that you your hard-earned assets will be taken care of in the hands that know you the most.
Statistics show that many people who have divorced go on to get remarried (approximately 80%). If this happens to be you, it is critical that your estate planning documents are up to date, along with your beneficiary designations at your financial institutions. If your ex-spouse is still an assigned beneficiary, then he or she will inherit that particular asset after you pass away. This will be sticky; it can also land your current spouse in probate court.
- Your Significant Other
Married or not, you still have that person who knows you better than anyone. Your significant other can become your primary beneficiary in your estate plan, but only if you specifically designate them as such. By Florida law, if you are not legally married, then your significant other bears NO legal relationship to you, no matter how many years you live together. This means that if your partner passes away without having created a Will or a Trust listing you as the beneficiary, you have no rights to their bank accounts, home, or insurance policies (unless you were listed as a beneficiary directly on those accounts). Make it official by creating estate planning documents that make provisions for your domestic partner upon your death.
- Your Children
A parent’s job is to love and protect their children. If your child is sick, you rush to bring them medicine. Oftentimes the day to day tasks make us lose sight of the bigger picture. A long-term way of protecting your children is involving them in your estate plan. If they are a minor, you can designate guardians (who your children will live with) for them in your Will in case of your sudden death. Additionally, creating a Revocable Trust is a great way to set limits and guidelines on the ages that your children can inherit your assets after you pass away.
Planning for your child’s education is also a great way to show your dedication to their success. A 529 college savings plan offers both tax benefits and financial aid benefits. There are generally two types of 529 plans: college savings plans and prepaid tuition plans. Make sure to speak with a financial advisor for further details on planning for their education.
- Your Parents
Mom and pop. There comes a point where your parents may require as much attention as your children. As stressful as it can be, helping them get started on an estate plan, and involving them in your own estate plan, is just another act of love.
For an aging individual that may require nursing home care in the future, one should consider a Medicaid Asset Protection Trust. This trust is essentially an irrevocable trust. Your parent will be the “Grantor” creating the trust. They will then assign a “Trustee” to individually manage the trust. You then transfer the parent’s assets into the trust, with the ultimate goal of eventually being able to qualify for Medicaid benefits. The trust assets remain in the trust until their death. When they pass away, the trust assets pass directly to the designated heirs. A great benefit to this trust is that the heirs receive the assets without going through the probate estate administration process with the Court.
Aside from Medicaid Asset Protection Trusts, there are host of other strategies that can assist with Medicaid Planning. Medicaid Planning is the legal term for structuring assets (often involving the use of Trusts, Personal Services Contracts, and other legal documents) in order to qualify the aging individual for Medicaid, with Medicaid in turn helping with the costs for an assisted living facility (“ALF”) or traditional nursing home setting. Beware that Medicaid Planning should ONLY be done with an elder law attorney experienced in this area!
For many of us, our parents are now living in our home. To further protect them, and avoid unnecessary legal procedures, basic estate planning documents such as a Revocable Trust and a Power of Attorney are critical. If, however, a parent has already lost capacity, you may need to petition the Court to create an adult guardianship for them. This will transfer the financial rights of your parent over to you. Make sure to speak with your elder care attorney in further developing this plan.
- Your Pets
Nothing says love like giving your pets a happy home and a happy life. In your estate plan, you can assign a guardian for your pets in case of your unexpected death. You can detail what diet, type of attention, and routine your pets should have once placed under the guardian’s care. You can even set up funds for your pet, which your assigned guardian can use for your pet’s care. These funds can be set up either through a Trust, a bank account, or a life insurance policy for your pets.
With Valentine’s Day on everyone’s minds, it is also important to mind protecting the ones you love. Contact OC Estate and Elder Law at (954) 251-0332 or email@example.com to get started on your free consultation. Our attorneys speak English, Spanish, and Russian.