Show #393 Airing Sunday, 7/1/07
Are you adequately prepared to get older? To protect yourself and your family, there are some valuable things you should know, but most seniors don't. Here to test our aging IQ the Einstein of Elder law, my law partner, Jennifer Peck.
Question: You've prepared a list of tips seniors should know but don't. First is avoid the Anna Nicole Smith Scenario.
Answer:After Anna Nicole Smith died earlier this year, it took weeks before she was buried. Her family battled over where and how she should be buried. While Anna Nicole Smith was famous, these family battles over funerals and burials can affect anyone. For example, your spouse may want you buried in Cleveland, next to her, but your kids from a prior marriage may prefer to have you buried in Pennsylvania closer to them. Ohio has a solution to avoid these family battles: you can fill out a "disposition of the body" form, and designate who should make funeral and burial decisions. You can even state your wishes.
Question: Next: What is the most important legal document. My guess is most people will say a will.
Answer:A will is certainly important. But in my view the most important legal document you can make is a financial durable power of attorney. Lots of folks, at some point in life, can no longer handle their financial affairs. Maybe it's an accident, stroke, or dementia. If that happens, and you don't have a financial durable power of attorney, no one may be able to help you.
If you're incompetent, your spouse can't endorse and deposit your checks as they come in; she can't sell your stocks, take money from your IRAs, and she can't sell or refinance the house. But with a financial durable power of attorney, you can authorize someone to handle your finances in times of emergency.
Question: This one's easy. Wills go through probate.
Answer:That's right. Lots of people think a Will avoids probate, but it's just the opposite. There are ways to avoid probate: joint ownership, beneficiary designations, payable on death accounts, and revocable trusts. But Wills do not avoid probate.
Question: Your fourth tip that often slips by seniors is: if you use a will, your child's spouse may wind up with your life savings.
Answer:When you leave an inheritance to your kids, it's theirs. Whether you use a will, or joint owners or beneficiaries on an account, or even a standard trust, when you die the assets belong to your kids. If they get a divorce 10 years later, your child's ex spouse is likely to go after 1/2 your child's money, including the inheritance you left.
When your child dies, all the inheritance may wind up with the spouse. And your child's surviving spouse may remarry, and at death leave everything including the inheritance you left, to the new spouse. Your money may end up with a total stranger, and not your grandkids.
There's only one way to avoid these problems, and that's by using a specialized SAFE Trust. But most people don't know about this tip.
Question: One more: you can still take steps to protect your life savings from nursing home costs.
Answer:Many people think there's nothing they can do to avoid paying their life savings over to a nursing home. And it is true that the laws have changed to make it harder to protect assets. But there are lots of planning tools still available to safeguard your home and savings.
For example, under the new rules we're often using specialized Medicaid promissory notes, Medicaid annuities and Medicaid trusts.
So how many of Jennifer's tips did you know? Be honest! Here's one more tip: to keep up with the latest and best advice, watch Golden Opportunities every week. And if you have questions about Jennifer's tips, give her a call.
