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Olivia K. Smith on Families & Seniors

Living Wills: Ten Things You Need to Know

Filed Under: Estate Planning

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How would you decide how to care for yourself if you were seriously ill or accidentally injured? You don’t have to be old to become incapacitated. A living will, a component of an advance health care directive, can outline your wishes so that your loved ones can make informed decisions about your care in an emergency.

Your living will doesn’t passes assets and property to beneficiaries like a standard will. Instead, it advises your doctors and family about how you want to receive medical care and may limit certain treatments. Your living will can bring your family comfort in times of uncertainty, knowing they understand your healthcare wishes. Creating your living will can bring peace of mind knowing there is a plan for medical emergencies. There are ten things you should know about living wills:

1.    Rules for Living Wills Vary by State

Depending on your residential state, this document may be referred to as an advance directive. Each state has different requirements and procedures for a living will’s creation and execution.

If you spend significant amounts of time in another state, ensure your living will is valid in the second state. Most states (but not all) will accept a living will from another state if it is valid in the state where it was created. Check with your attorney about your state’s rules. If you spend significant time out of the country, you want to know the country’s laws to create a valid living will while there.

2.    Your Living Will is a Binding Legal Document

Do not rely on an informally written document or verbal consent as your living will. Before you become incapacitated, you must document your healthcare wishes in compliance with state law and legally address instances of incapacitation, permanent unconsciousness, or a terminally ill diagnosis.

3.    Medical Doctors Determine the Incidence of Incapacitation

Whether terminally ill, permanently unconscious, unable to communicate, or incapable of making rational decisions due to injury, a medical doctor’s assessment, and usually a second opinion, is the determining factor putting your living will into effect. If you see your doctor regularly, discuss your wishes and living will ahead of time to see if they will comply with your instructions or if there is something to talk through.

4.    You Can Change Your Living Will

You can revoke, revise, or create a new living will at any time. However, simply destroying the old copy complicates the connection it may have to other estate planning documents or files. Your attorney can help you fully and formally revoke or modify your living will correctly.

5.    There is a Difference Between an Advance Directive and a Living Will

There are numerous advance directive document types as it is a broad category of legal instructions regarding your healthcare. The more familiar include a medical power of attorney, living will, and do not resuscitate order (DNR). A living will is a subset of the advance directive specifically expressing medical treatment preferences in the case of terminal illness or incapacitation.

6.    Younger People Need a Living Will

Adults of all ages can benefit from implementing this legal document. Seemingly healthy young individuals can become unexpectedly ill or injured. Procrastinating about creating your living will until you get “old” could leave you in an unfortunate situation after an accident or serious illness.

A living will does more than convey your desire to remove yourself from life support under certain conditions. It can specify treatment and care preferences, including medical techniques and devices you accept (or do not), pain management, and clergy visitation.

7.    You May Appoint a Healthcare Agent

You may choose a healthcare agent. The agent may not be your doctor or medical team to avoid conflict of interest. Nor can they own, manage, or work for the facility where you receive treatment. Often, a family member who you trust with the significant responsibility of handling stressful emergencies will accept this role — review your emergency, critical, and end-of-life care preferences with them.

8.    Have a Healthcare Power of Attorney

This power provides an individual the right to make medical decisions on your behalf if you cannot do so. Appointing a healthcare power of attorney is not the same as your living will, but it is part of the estate planning process.

9.    Will the Medical Staff and My Family Comply with My Living Will?

Ultimately your medical doctor is responsible for your course of treatment. They technically do not have to follow your living will, yet most will. However, in an emergency, your doctor’s choice may override your living will if they feel an ethical obligation to the Hippocratic oath. Talking to your doctor about your choices in advance and sharing access to your medical history with family members using a HIPAA form are your best courses of action to feel secure that everyone will comply with your wishes.

Having a living will is essential to a complete estate plan. Creating this document with your estate planning attorney can bring you and your family peace of mind.

We hope you found this article helpful. If you’d like to discuss your particular situation, please don’t hesitate to reach out. Please contact our Cincinnati office by calling us at 513-771-2444 and schedule a consultation. We look forward to the opportunity to work with you.

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Through Financial Literacy and Discipline, You Can Build Wealth

Filed Under: Estate Planning

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A steady path can over time make you a self-made millionaire if you are part of the millennial generation or younger. It does not require a unique set of skills, specialized knowledge, or even excessive risks. Americans who achieve millionaire and multi-millionaire status using this technique took an average of about 32 years to accumulate multi-million dollar wealth with some achieving it in as early as 18 years. They are called saver-investors, and when you encounter one, at first glance, they might not seem that rich.

Saver-investors typically are ordinary people without any particular advantages in life. They did not come from a wealthy family. Nor did they have unique or advanced skill sets that brought in high salary income. Primarily, investor-savers did not attend elite universities, get advanced degrees, inherit money or own high-end cars, clothes or homes. What saver-investors do have is the disciplined ability to follow two simple rules. The first rule is you must save 20 percent or more of your income and have the discipline to live off of the other 80 percent. The second rule is you must consistently and prudently invest your savings. Prudent investing means doing your homework for each investment vehicle and then continuously monitoring its progress. Typically, a saver-investor puts their money in retirement plans like a 401(k), equities, and real estate and then lets valuations grow.

If the key to building wealth is so simple, then why isn’t everyone rich? Quite simply, it comes down to habits, the financial habits of people. It requires enormous fiscal discipline and a long-term commitment to become a saver-investor. It can require sacrifices, like running a side business or working a second job. John Jacob Astor famously said, “Wealth is largely the result of habit.” Long-term wealth creation is built on the foundation of consistent application of sound financial habits.

One habit is to eliminate distractions by learning how to say no often. If something is not aligning with your goals and dreams and will keep you from moving forward, it is a distraction and should be eliminated. When you do say yes, say it infrequently. Say yes to the things that are directly tied to your goals and dreams. Every day you need to learn something new. Grow your financial literacy and develop new skills. Use this new knowledge or expertise often to maintain and perfect your skills. Save money because it gives your options, empowers you, and gives you freedom. Opportunities are only as good as the financial resources you have to take advantage of them. Surround yourself with other like-minded individuals because social circles influence our feelings, thoughts, and behaviors. Calendar your day by the hours or even half hours to be highly effective. Isolate blocks of time in pursuit of those things that will help you build a foundation for success through financial independence. Finally, develop patience.

Acquiring wealth as a saver-investor takes time. When things get tight in day-to-day life, remember to survive until you thrive. It isn’t good luck that is going to make you wealthy; it is the persistence of good financial habits that will.

Part of living off 80% of your income includes choosing to live a modest life. Warren Buffett famously still lives in his first home purchased in 1958. Drive an ordinary car and wear simple clothes and jewelry. If you have children, send them to public schools. If they need more or better education, then supplement their learning by teaching them or signing them up for free online courses. There has never been a better time for humans to become knowledgeable about how to gain wealth. The internet has put a wealth of information in the palm of our hands. If you genuinely want to be wealthy, then develop good habits, live beneath your means, and employ the saver-investor method.

The next step is to plan to protect your wealth. We hope you found this article helpful. If you’d like to discuss your particular situation, please contact our Cincinnati office by calling us at 513-771-2444 and scheduling a consultation. We look forward to the opportunity to work with you.

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Planning an Estate: The Major Components

Filed Under: Estate Planning

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In an estate plan, assets are distributed in accordance with your wishes, and your loved ones are provided for after your death. It requires organization and strategy and begins with five key legal documents that can address many areas of estate planning concerns.

Proper estate planning can provide tax savings and asset protection so that the bulk of your estate remains intact as it transfers to heirs. These major components of estate planning can be tailored to your individual needs and goals, regardless of the size of your estate. All estate documents must be part of a legally valid and enforceable plan to fulfill your wishes.

Major Components

A robust estate plan involves much more than simply creating a will. An estate planning attorney can help you craft a custom plan using these major components to meet your goals and needs while complying with state and federal laws.

Wills

A will is a legal document outlining how a person’s asset distributions will occur after death. An executor or personal representative named in the will oversees the asset distribution, proper court filings, and final tax returns for the decedent’s estate. When applicable, your will can appoint a guardian for minor children.

Without a will, known as dying intestate, the court implements asset distribution according to your state law which may not align with your intentions. It’s important to note a will only applies to assets owned solely in the name of the person who made the will. Jointly owned assets or those held in a trust pass directly to a designated beneficiary.

Trusts

A trust is a legal arrangement in which a trustee holds and manages assets to benefit one or more beneficiaries. Trusts can help avoid probate, minimize estate taxes, and care for minors or those with special needs. A trust is not subject to public probate proceedings as in the case of a will and provides greater privacy as assets don’t become part of public records.

There are many types of trusts, but the most common is a revocable living trust. It allows the person creating the trust, known as the grantor, to retain control of the assets during their lifetime. Upon the grantor’s death, the assets then transfer to the beneficiaries.

Powers of Attorney

A power of attorney is a legal document appointing someone to act on your behalf if you become incapacitated. This individual can manage your finances, make healthcare decisions, and handle other important matters when you can’t.

There are four types of powers of attorney:

  • A general power of attorney is used when you are healthy and mentally capable.
  • A durable power of attorney is effective upon signature and continues if you become incapacitated.
  • A springing power of attorney only becomes effective if you become incapacitated.
  • A health care power of attorney, surrogate, or proxy allows a person you trust to make health care decisions when you can’t communicate them.

Selecting someone you implicitly trust and know will represent your interests is crucial. They will have significant control over your affairs.

Healthcare Directives

Also known as living wills, advance directives, and other names depending on the state where you live, this combination of legal documents allows you to specify your wishes for medical treatment if you can’t communicate them yourself. The documents enable you to name an individual to follow your instructions and relay medical decisions to family and professionals.

A healthcare directive can include whether you wish to receive life-sustaining treatment, pain management, and other end-of-life care. They provide clarity and peace of mind for you and your loved ones during difficult times.

Beneficiary Designations

Beneficiary designations specify who will receive assets such as life insurance policies, retirement accounts, and other financial accounts after your death. Maintaining updated beneficiary designations is important when life circumstances change, such as divorce, marriage, or the birth of children. These accounts will pass directly to the listed beneficiary.

What if You Don’t Have a lot of Money or Assets?

Even if you don’t think you have enough money or assets, having an estate plan is still important for the following reasons:

●      Guardianship of Minor Children

If you have minor children, it’s critical to designate a guardian if something happens to you, your spouse, or other parent. Without naming a guardian, the court will appoint someone to care for your children; this guardian may not be someone you would select.

●      Healthcare Decision-Making

Even absent significant assets, you may still want to specify your healthcare wishes in the event of incapacity. An advance healthcare directive can help fulfill your wishes and provide clarity for your loved ones during a difficult time.

●      Avoiding Probate

Going through probate can be time-consuming and expensive for those you leave behind. A well-crafted estate plan avoids probate and ensures your accounts and belongings are distributed according to your wishes and outside the public record.

●      Protecting Your Digital Assets

Consider your online presence, including email accounts, social media profiles, digital photos, music, income-producing online storefronts, influencer ad revenue, and cryptocurrencies. More than ever, people have a tremendous presence or income in the digital world. An estate plan can address what will happen to your digital assets after your death.

Do I Need an Estate Planning Attorney?

Given the complexity of estate planning, working with an estate planning attorney is beneficial. An attorney can help you navigate the various components of estate planning and ensure your plan is tailored to your individual needs and goals in compliance with state and federal laws.

Each component of estate planning can affect another. For example, a trust can work with a will to provide for the distribution of assets not covered by the trust. A power of attorney can manage assets, not in a trust, and an advanced healthcare directive can work with a power of attorney to fulfill your healthcare wishes. Creating an estate plan where all facets complement each offers a smooth transition of your estate to loved ones.

An estate planning attorney can also review an existing estate plan routinely or when significant life changes occur. Regular estate planning reviews keep beneficiary designations current. We hope you found this article helpful. If you’d like to discuss your particular situation, please don’t hesitate to reach out. Please contact our Cincinnati office by calling us at 513-771-2444 and schedule a consultation. We look forward to the opportunity to work with you.

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Planning for Medicaid with an Elder Law Attorney

Filed Under: Elder Law, Medicaid Planning

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People with low incomes are eligible for Medicaid health insurance. However, because of the steep costs associated with long-term care, Medicaid planning is a growing trend for individuals with higher net worth as an alternative to spending down assets to qualify for benefits. Individuals can plan to meet eligibility requirements by legally restructuring their financial resources and maximizing their likelihood of being accepted into the Medicaid program.

Common Reasons to Engage in Medicaid Planning

There are many reasons to participate in Medicaid planning, including:

·       Long-term Care Costs

Medicaid can help cover expensive long-term care costs. Medicaid planning can help prepare for the possibility that you or a loved one will need to qualify for benefits to offset costs for long-term care.

·       Protecting Assets

Medicaid has strict eligibility requirements, including limits on the number of assets you possess. Medicaid planning helps restructure these assets to ensure you qualify for health benefits when needed.

·       Estate Planning

Medicaid planning is often a key component of estate planning. By arranging your finances in a way that allows you to qualify for Medicaid, you ensure you have the resources you need to cover long-term healthcare costs while protecting assets for your heirs.

How Prevalent is the Need for Long-term Care?

According to the National Center for Health Statistics, approximately 65,600 regulated long-term care facilities in the US serve more than 8.3 million residents in various long-term care facilities, assisted living facilities, and nursing homes.

The percentage of individuals who will need long-term care is growing rapidly. According to the Administration on Aging (AoA), a division of the US Department of Health and Human Services (HHS), at least 70 percent of people aged 65 today will require some long-term care. This percentage continues to increase with age.

With an average stay of 3.2 years, Americans spend $475.1 billion annually to cover long-term care costs, and projections continue to climb. Medicaid benefits will cover approximately 42 percent of these costs making Medicaid planning crucial for financial solvency in retirement and legacy planning.

A Place for Mom

How to Begin Medicaid Planning

Taking the appropriate steps to legally and ethically protect assets while qualifying for Medicaid benefits is best handled by an elder law attorney in your state. Medicaid is a federal and state partnership program, and following your state’s rules and regulations is crucial to success. However, before engaging with an elder law attorney, you can gather some information to help them with your Medicaid planning strategy:

  1. Becoming familiar with your state laws and eligibility requirements regarding income and assets can streamline your consultation. Your attorney will answer all of your questions.
  2. Compiling a list of all assets, including savings, investments, property, insurance policies, and retirement accounts, can help your attorney determine which assets are exempt from Medicaid’s asset limits.
  3. Gathering information regarding all income sources will help your attorney figure out how much you can earn while still qualifying for benefits.
  4. Researching long-term care insurance policies helps decide whether you can afford to add it to your Medicaid strategy.

How an Elder Law Attorney can Help

After gathering the necessary financial information and any existing estate planning documents, it’s time to meet with your Medicaid planning or elder law attorney.

They will review your financial situation to determine what income and assets count toward Medicaid eligibility and identify any potential issues or challenges. Knowing your unique situation, your attorney can begin developing a custom strategy to comply with Medicaid rules and regulations.

Your Medicaid strategy must complement your estate planning documents and goals. An elder law attorney may amend existing will or trust documents to maximize Medicaid benefits and ensure a healthy spouse living at home has the financial resources they need.

An elder law attorney may recommend transferring assets into a Medicaid asset protection trust. The Medicaid lookback rules make it necessary to start this process at least five years before the need for care. When it’s time to apply for benefits, your elder law attorney helps prepare and submit your Medicaid application.

You or a Loved One are Likely to Need Long-Term Care

Medicaid planning ensures you can afford the care you need. Because Medicaid eligibility is as important as it is complicated, an elder law attorney can ensure you qualify and avoid simple mistakes that result in a denial or delay of benefits. When planning for potential long-term care, the sooner you begin, the more options you have.

We hope you found this article helpful. If you’d like to discuss your particular situation, please don’t hesitate to reach out. Please contact our Cincinnati office by calling us at 513-771-2444 and schedule a consultation. We look forward to the opportunity to work with you.

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Olivia K. Smith, Attorney at Law
Cornetet, Meyer, Rush & Stapleton
123 Boggs Lane
Cincinnati, OH 45246
Phone: 513-771-2444
Fax: 877-483-2119
oksmith@cmrs-law.com