Estate Planning Essentials: Act Early to Safeguard Your Future

The Red Wagon Estate Planning & Elder Law Show

Estate planning is not only for older, established homeowners. Jeff explains how to know when it’s the right time to set up powers of attorney and wills. He outlines state laws that will determine how medical decisions and finances will be handled if a person dies or becomes incapacitated without legal documents in place. Then, he ties it all together with a discussion of trusts for asset protection and tax management.

This is a vital discussion for every adult to understand the importance of timing and the different options available for smart, proactive estate planning.

WHAT YOU NEED TO KNOW

(01:01) Everyone age 18+ is deemed an adult in Pennsylvania (PA) and should have a financial power of attorney (POA) in place.

(02:09) If no health care POA is in place, state law determines who can make medical decisions for you.

(02:29) The state can determine who your assets will go to if you die without a will.

(05:19) Do not assume that all your assets will go to your spouse if you die without a will.

(05:35) Do not assume that you’re “too young” to need a power of attorney.

(06:22) Increasingly, 18-year-olds are getting POAs before they go off to college so that their parents can get involved on their behalf if the student suffers a serious illness or injury or needs help with, say, a banking issue or a problem at the school.

(07:37) If no POA is in place at 18, the next best time is when you start making some money. In fact, a financial POA is probably more valuable than a will at this point.

(08:12) Having a POA in place avoids legal guardianship hearings should a loved one become incapacitated.

(11:36) In general, there are two major types of trusts: testamentary trusts (created under a will) and living trusts (including revocable and irrevocable trusts). There are different types of irrevocable trusts (e.g., tax trusts, asset protection trusts).

(15:06) Revocable trusts are taking the place of testamentary trusts. These provide asset protection but need to satisfy the five-year look-back period.

(17:41) If a young person needs long-term care, it is much better to do crisis planning with a financial POA already in place.

(19:36) Get an irrevocable tax trust only if you have more than the federal estate tax amount, which is currently about $26 million for a couple.

(21:19) Do you have a house or about $150,000 in investable assets that you do not rely on for everyday expenses? If yes, consider an asset protection trust.

LINKS AND RESOURCES MENTIONED

A FORK IN THE ROAD: Modern Estate Planning and How Elder Law Is Taking the Other Fork

https://www.amazon.com/FORK-ROAD-Modern-Estate-Planning/dp/1959840827

Bellomo & Associates workshops:https://bellomoassociates.com/workshops/

• Life Care Planning
• The Three Secrets of Estate Planning
• Nuts & Bolts of Medicaid

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