IT PAYS TO PLAN YOUR ESTATE

Health Care Powers of Attorney

Medicaid Planning

Last Wills and Testament

Revocable (Living) Trusts

Property Powers of Attorney

Medicaid Planning - When considering whether or not you will be able to afford (or how long you can afford) the payment of the costs associated with nursing home care, most individuals (except those who are fairly wealthy) anticipate that the costs of the care will eventually exceed the assets available to the disabled person and his/her spouse. Therefore, most individuals look into qualifying for Medicaid. Medicaid is a federally sponsored program that is "needs based." This means that you must "spend down" almost all of your savings before you will qualify.

Some of the current exemptions (Illinois) which Medicaid allows the applicant to keep are as follows: Prepaid burial plan (up to $4,244 per person) Burial spaces (not to exceed $1,500) Motor vehicle (not to exceed $4,500 in value) Personal property (not to exceed $2,000 in value) $2,000 in cash or equivalent.

Medicaid planning involves gifting of assets before making an application for benefits. The general rule is that a gift must be made at least 60 months prior to applying for benefits - however there are exceptions. Property Powers of Attorney are often utilized to make gifts once a person is no longer competent. However, this area is very complex and ever-changing, so the only way to properly plan for you is to schedule an appointment to discuss your situation.

Living (Revocable) Trusts - Living Trusts are suggested on a regular basis today for individuals to "bypass probate." Living Trusts can also be used to avoid estate taxes by taking the fullest use of the tax laws for individuals with large estates (in excess of $2,000,000). The concept of the trust is relatively simple. You establish a trust (a contract between you and, generally, you) which sets forth the rules for management of your assets while you are alive and a distribution plan when you are gone. The trust will have people you trust to act as trustees in the event of your death or incapacity. Then, should something occur, your successor trustee will be able to manage your trust without the need to go to probate court to obtain the courts' permission.

Health Care Powers of Attorney (HCPA) - A Power of Attorney for Health Care is a document that allows you to appoint a person (agent) to make important medical decisions on your behalf when you are unable to communicate those decisions. You do want a HCPA to keep you out of court!   A health care agent has broader authority than a court-appointed guardian (which you would need in many instances if you do not have this document).  Additionally, the cost to prepare this document are only a fraction of the costs associated with a guardianship.

Why not a Living Will??? An Illinois HCPA is much more effective than a Living Will. In a Living Will you are allowing your doctor to make the decision whether or not to maintain your life sustaining treatment. That is the ONLY authority granted in a Living Will. However, in a HCPA you appoint a trusted family member or friend to make that decision and ANY other medical decisions on your behalf when you are unable to communicate your wishes.
Property Powers of Attorney -  Sometimes referred to as a "durable power of attorney," this document will allow a trusted friend or family member act as your "agent" in the event that you no longer have the capacity to do so.  Instances where an incapacity could occur might include Alzheimer's disease or a severe stroke.  A Property Power of Attorney can also be used for to authorize "gifiting" of your assets for Medicaid planning purposes.  This document can help you avoid the necessity of a guardianship.

Last Will and Testaments -  Long considered the only component of a "simple" estate plan today a Will is only a small part of most plans.  A Will is essential if you have minor children as it is the only way that you can name caretakers (guardians) for your children if you and your spouse are gone.  While a Will does set forth your directives on how you wish to have your property distributed - it does not avoid probate!

 

How much does planning cost?

The true cost comes when you don't take action now ... when you are able to do so. We would all agree that the costs involved with going to court are significant. Therefore, we strongly suggest that you do your planning NOW and stay out of the probate system.

The cost to prepare each of the documents described above vary (for example the cost of a Power of Attorney is usually $100). Your personal situation will determine whether we suggest one or more of the estate planning documents. That is the reason that it is important to meet for an initial consultation ... so that you can learn what you need and why. Then you can make an informed decision and instruct US on which documents YOU wish.

To start the process give our office a call at (708) 371-9500 to schedule an appointment. When you call Colleen will schedule you and confirm that we charge a consultation fee of $100.00. However, should you have documents prepared that exceed $400.00, then the consultation fee will be credited against that amount. You can also email Colleen at Colleen@SmolinskiLtd.com

To begin the preparation of documents, we will ask that you sign an authorization indicating which documents you wish to be prepared. With your authorization we would ask that you tender 50% of the total costs of preparing the documents. The balance is due when the documents are reviewed and signed.

Don't wait to do these important documents!