Life Planning - Finances, Law and Faith Colliton Law Associates, PC Life Transition Services 16 West Market St., Ste. 204 West Chester, PA

Presentation to 50+ Explorers Westminster Presbyterian Church January 28, 2002

Why Plan? Planning is the Gift you give yourself and the next generation. It is an act of love and of faith. It relieves anxiety. It anticipates contingencies while you are still able. It assures that your wishes are known and respected. It relieves burden from your children. It protects assets and maximizes savings n

Why We Do Not Plan n Fear - “I don’t want to think about it so I’ll pretend it can’t happen” n Denial - “If I do not plan for it, it will not happen” n Procrastination - “I’m not old enough yet. Maybe tomorrow” n Negative Attitudes Toward Transitioning - “It’s all downhill from here”

Transitioning - Beginning to Plan n Get organized! - “I know I have it here somewhere” n Simplify! - Do fewer things well n Locate and reconstruct important documents and records n Share the secrets - Tell your family where the rocks are hidden n Share the burden n Give yourself a break n Decide what you want -- “I’ll live here but not there... Mary gets the Grandfather’s clock.”

Transitioning - Intermediate Steps n The 4 legal documents you should not be without n Deciding on insurances - u Health Insurance - Medicare, Medigap, Medicare HMO u Life Insurance - Whole Life and Term u Long Term Care Insurance n Consider How Assets Are Titled n Know your beneficiaries n Budgeting - now and later

Housing Alternatives n Independent Living u Home Health Care (May be provided through LTC Insurance and similar programs) n Assisted Living - Possible attractive alternative - community and care available. Less intensive than SNF. n Continuing Care Community - Increased care as needed. Expense a consideration. n Skilled Nursing Care (SNF)- Medicaid approved facilities eventually allow payment by government.

The Unplanned Estate- Critical and Crisis Transitioning n Critical Transitioning u Immediate need for more secure living arrangement u Participant is not the primary decision maker u Intense family involvement and stress n Crisis Transitioning u Deterioration over months or years u Participant is not the primary decision maker u Participant is at risk of physical harm u Intense family involvement and stress

The Planned Estate - Seamless Transitioning n Participant makes realistic decisions, including living arrangement decisions, in advance - Participates in actual decision making n Participant has executed the necessary legal documents, reviewed his/her insurances, and has a clear idea of his/ her family finances to weather hard times n Participant has shared the burden and shared the secrets

“ Living Estate” - Medicaid Planning n When family member is SNF resident, government can pay under Medicaid after assets are exhausted ($2,400 or less). n Planning to benefit family MUST BEGIN much earlier. (Even when assets exceed $hundreds of thousands). n Some assets - home, car, term life insurance, personal belongings, can be kept. n Spousal impoverishment rules allow community spouse to keep more under formula n Gifting to children is allowed under specific rules n Families cannot be assured of accurate information when dealing with SNF.

Medicaid Planning - The Unplanned v. The Planned Estate n There are sizeable differences between planning and failing to plan where nursing home care is involved - u Without Medicaid Structuring F Begin with $175,000 in liquid assets, plus home, car, furniture, jewelry, personal belongings F Family might spend all but $2,400 on nursing home care and take over 2 yrs. to qualify!. u Planned Estate- With Medicaid Structuring F Begin with $175,000 in liquid assets, plus home, car, furniture, jewelry, personal belongings F Family can shelter approx. $82,500 for spouse at home (community spouse) and about $30,000 for children plus home, car, etc. and qualify in about 6 months!

Decedent’s Estate Planning n Particularly with the higher range estates, estate planning can save significant taxes for the next and succeeding generations n Even for those with less assets, estate planning is critical as a means to decide how assets will be handled during life and after death.

Conclusion n Planning is an act of love- u Begin with where you are. u It is never too early or too late. u Delay narrows but does not eliminate options. u Seek professional help, where needed.