If you missed our first email about Sam and Lily, you can read it below:
Today, we will show what an estate plan really does, and why many seniors find out too late their current plan (or lack of one) leaves them out of options before they are out of breath! In two days, we will show you how our plans can help you avoid that terrible situation. Later, we will show you exactly what we do so that you are protected- without changing your quality of life- and how easy it is to secure these protections with the right partner.
The great news is that we are living longer, more active lives, and we can help you make the most of your years. Most estate plans are focused only on what happens "after;" let's look at those first so we can show you how our plans are different.
You already know that an estate plan is important for you to have, even if you are a middle income family. But many people do not have a good understanding of why, except that a well-meaning lawyer strongly encouraged them to get one. They think of their estate plan as a stack of documents that family members can worry about once they are gone, to divide up personal belongings and money to their children, grandchildren, friends, or charities.
For families with “living trusts,” you were most likely told about how a trust can protect your privacy by avoiding a public probate (review by the court) of your will and “death tax” savings.
These perceptions are correct, but they are not the whole story!
Let's take an example that may sound familiar to you. Meet Sam and Lily. When their children were young, they went to see a local estate planning lawyer who prepared a living trust. This document made sure that, should anything happen to them, the children would be cared for by Sam’s sister. The trust also provided for the children by making distributions for their health, welfare, and education, and made specific bequests for their grandchildren’s future college educations (education was critically important to Sam and Lily because their circumstances did not allow them to finish college). The attorney also prepared powers of attorney so that Sam and Lily could speak on behalf of each other if one person could not act for him or herself.
After 20 years, their last child left the nest and Sam, who had married late in life, turned 62. Sam and Lily did not update their estate plan to reflect their new station in life. Then Sam started to notice work was becoming more difficult and chalked it up at first to simply being ready to retire. But after getting into a minor fender bender in an unfamiliar part of town, Lily insisted he see the doctor. Sam was the first in his family to be diagnosed with early onset Alzheimer's.
He retired soon after, cutting short his working life earlier than he had planned to meet his financial goals in retirement. They figured they would make it work by watching spending and taking Social Security early.
For several years, Lily cared for Sam by herself at first, and with the care of in-home nurses later, paid mostly out of pocket. They found out that Medicare's coverage for this type of care is fairly limited... almost nothing in fact.
The day came when Sam needed around the clock care by skilled nurses. Lily and her children looked for a comfortable long term care Center (nursing home) for Sam, and were shocked to find that even the least expensive options started at $250 per day or $7,500 per month, even though they lived in a modest community.
The facility they chose said that Medicaid (not Medicare, which provides very minimal long term care) was the only alternative to paying out of pocket, but that a person can only become eligible once they “spend down” their money and assets to just $2,000!
Sam and Lily had saved and invested during their working years, and had a paid for home, an insurance policy on their lives, and about $300,000 in retirement and checking accounts. They were doomed to spend almost all of this on Sam's healthcare because they did not have the powerful estate plan they needed, and their powers of attorney were missing critical pieces that could have helped Lily save almost half of their money right then and there.
Lily wondered what she would do after all of the money was spent on Sam’s care, and mentally prepared to live as 86 percent of widows do… impoverished. But there was no choice, and Sam went into the facility for three years before his death.
Lily lived for another 12 years, spending her last year in a nursing home. Her family buried her next to Sam and celebrated her long life and the selfless care she had given to Sam.
When it came time to divide Sam and Lily’s property between the children, their living trust worked just as it was supposed to, with one big flaw. There was nothing left except personal belongings like clothes and their wedding rings to divide!
Devastating healthcare costs had eaten their life’s savings and undermined their desire to help their grandchildren get college educations. It's true that the process of transferring these items was done in privacy and without court intervention or probate as their lawyer had promised, but their chief goals (sharing the fruits of their hard work with their loved ones) had not been met because of healthcare costs.
It didn't have to be this way. Although it is not pleasant to think about how each of us may go, we do know that about one third of people who are aged 65 today will require nursing home care like Sam.
And very, very few people- even those who already have an estate plan- have the powerful plan they really need to ensure that their legacy is preserved, rather than spent on healthcare. That's because many estate planning firms focus on traditional, one size fits all plans and are not educated or qualified to provide plans that prepare for rising healthcare costs.
In two days, we will send another email showing how Sam and Lily’s story would have been different- and how they would have saved hundreds of thousands of dollars- if they had the right plan in place.
If you don't want to wait, call us now for a free planning session at (702) 900-1470. We'll show you how your story can be different from Sam and Lily’s. You can safeguard your money so that you won’t end up out of money and out of options during your lifetime, how to protect your spouse financially in the event of your untimely death, how to help a loved one with college tuition, give to your church or favorite charity, provide for a child or grandchild with special needs, even make sure your pet is taken care of if you become incapacitated, and protect some or all of your estate from the devastating cost of a dread diagnosis.
Put your mind at ease – it costs nothing to find out what options are available to you. You can easily reach us, Jennifer and Valerie, at (702) 900-1470, to book a convenient planning session with us. We spend up to two hours getting to know you and your unique goals so that we can recommend the best strategies for you. Don't wait- our clients tell us what relief they feel after a session with us, often having put it off for much longer than they planned.