By Steve Worrall, Elder Care Lawyer, Marietta GA
Based on what I am seeing as a Marietta, Georgia elder law attorney, more and more people are considering pre-planning and pre-paying for their own funeral. For years I have recommended that my clients include their wishes for their final arrangements in their estate plans, but more and more people are bringing it up proactively.
Some of the reasons that people want to take care of their own final arrangements include:
- Saving their loved ones the stress of dealing with this while they are grieving
- Making sure their wishes are carried out
- Setting aside funds and save their family the financial burden
The reasons mentioned above are very honorable, but it is important to do your homework before committing to any pre-paid program. Unfortunately, there have been a number of recent horror stories about pre-paid funerals as of lately.
A recent audit by the California Department of Consumers’ Affairs Cemetery and Funeral Bureau found that one of the state’s largest pre-paid trust programs had misspent at least $12.6 million. That is a lot of money taken from well-meaning, honest people who were just trying to care for their families. (If there is an example from your state, insert here as well).
In addition to worrying about whether the pre-paid funeral industry is using your funds as intended, there are several other pitfalls that need to be considered before investing your money in a pre-paid funeral plan.
For example, if you decide later that you need the money that you invested in the pre-paid funeral plan for reasons such as family emergencies, you can lose a substantial amount of that money in cancellation fees. Further, prepaying for your final arrangements with a life insurance plan can be even costlier. In fact, it is quite possible that you could end up paying a lot more money in monthly payments than your final arrangement will actually cost.
So, if you are trying to ease the burden for your family by planning and paying for your funeral, what are you to do?
That’s easy…talk to an experienced Atlanta area elder attorney!
An attorney can help you preplan and prepy for final arrangements in a way that will be the most cost-effective and ensure that your family won’t have to deal with the stress at a time when they should be dealing with their own grief.
Simply call 770-425-6060 to set up a Peace of Mind Planning Session at no-charge with me, your neighborhood Marietta GA elder lawyer. You’ll be glad you did!
By Steve Worrall, Atlanta GA elder lawyer
As an Atlanta GA elder lawyer, I help people plan for long-term care costs on a regular basis.
Long-term care can include any service that helps people who have a prolonged illness. The illness can be a physical disability or a cognitive impairment such as Alzheimer’s disease or Dementia. The services may include help with activities of daily living, home health care, adult day care, hospice care, nursing home care, or care in an assisted living facility. The level of assistance required can include physical therapy, administration of medication, and help with daily activities such as bathing, eating, and dressing.
Paying for long-term care can be financially devastating to families. Contrary to what many people believe, Medicare coverage will not pay for most of the long-term care they will need if they suffer from a long-term illness. According to the U.S. Department of Health and Human Services, the average costs in the U.S. (in 2009) are:
- $198/day for a semi-private room in a nursing home
- $219/day for a private room in a nursing home
- $3,131/month for care in an Assisted Living Facility (for a one-bedroom unit)
- $21/hour for a Home Health Aide
- $19/hour for a Homemaker services
- $67/day for care in an Adult Day Health Care Center
It’s easy to fall into the trap of thinking that because you are now young and healthy you don’t need to worry about long-term care, but consider this:
- Life expectancy after age 65 has now increased to 17.9 years, up from 1940 when life expectancy after 65 was only 13 extra years. The longer people live, the greater the chance they will need assistance due to chronic conditions.
- 44% of people reaching age 65 are expected to enter a nursing home at least once in their lifetime and 53% of them will stay for one year or longer.
So, the bottom line is that millions of us are going to need long-term care. It is important to put an estate plan in place that will protect your assets if you become disabled. I’ve seen too many instances where a family has waited until a crisis strikes to take action. Most of the time it’s then too late to save their assets and income from the hands of such a facility.
But instead, you can talk to an estate planning attorney now to ensure your bills will be covered in the long-run without losing your house, your assets or other income sources in the process. To get started, simply call me, your neighborhood Atlanta elder law attorney at 770-425-6060 for a free Peace of Mind Georgia Family Treasures Planning Session.
Together we’ll walk through the complicated world of long-term care planning to ensure your family is protected when they need it the most.
By Steve Worrall, Marietta GA probate lawyer
If you are reading this Atlanta area probate and estate planning blog right now, chances are you concerned about what would happen to your assets, investments and total inheritance when you die. I am sure like most people, you want to leave an inheritance to your children in a way that’s safe, secure and free from the red-tape of probate.
Yet what most well-intentioned parents fail to understand is that it is the way their inheritance gets passed down to family members that can have detrimental and life-altering consequences—which are far worse than having money tied up in the Georgia probate courts.
For that reason, I want to share some of my knowledge as an Georgia probate lawyer and give you a brief overview of the 4 ways your inheritance can be passed down to your children and how you can ultimately protect your inheritance from impulse spending, divorce, bankruptcy or poor decision making with proper education and a bit of planning:
- Outright Distribution: An outright distribution is just that, mom and dad die and the children receive their inheritance outright, in one lump sum. Simple, clean, but dangerous. Statistics show that an inheritance will be gone within 18 months of a child receiving it. And it does not matter how old the child is or how much the inheritance. If a child gets divorced or goes bankrupt, the inheritance could be lost.
- Convenience Trust: With this arrangement, the inheritance is distributed to a trust, but the child can withdraw the trust assets at any time and for any reason, just by requesting it. There may be an independent trustee managing the trust, or the child may be their own trustee or co-trustee. Since no one can force the child to withdraw the income and principal from the trust, the convenience trust offers some creditor protection, and perhaps a mental barrier to withdrawing the trust’s assets, but not much else. This also can act as a separate property trust, so that the child’s spouse cannot access the inheritance.
- Step-Distribution: This method is a more commonly used way of leaving money to your heirs. It’s also known as the “speed-bump” approach. With this type of distribution, the inheritance flows into a trust, usually with an independent trustee, which is managed and controlled for the child. At certain intervals in the child’s life, a portion of the trust’s principal is released in a lump sum to the child. For example, one third of the principal is paid to the child at age 30, one third at 35 and the remainder at 40. They still have access to income and principal for health, education and other guidelines you structure, but you can leave your children a powerful message with this type of trust – “don’t blow the inheritance!” The idea is that if they blow it the first time, they may not get any future distributions. This may act as an incentive to the child to manage their money well, but it still adds little asset protection, and once the principal is gone, it’s out of the bloodline and gone forever.
- Lifetime Trust: This type of trust holds and manages the child’s inheritance for the life of the child. An independent trustee is usually chosen to manage the trust and many times the child can serve as co-trustee. Principal and income may be distributed according to various guidelines and incentives that the parent provides in the trust document. These guidelines act as a spigot or faucet: adhere to the guidelines and philosophies of the trust and assets will flow; get into trouble and the trustee can turn the spigot off.
Once the child dies, any remaining assets in the trust can pass to the child’s heirs or other individuals or entities. The lifetime trust provides the most flexible vehicle for values-based legacy planning. It also provides the greatest degree of asset protection, including protections against divorce, bankruptcy and lawsuits such as malpractice or personal injury. This is by far the most popular choice of trust arrangements among my clients, as it provides the greatest amount of asset protection and guidance for beneficiaries throughout their lives.
So now that you have read the 4 most common ways to pass an inheritance on to family members, I encourage YOU today to get clear on how you would like your inheritance distributed when you die. Do you understand the potential consequences of turning your inheritance over to a child not ready for the responsibility? Are you concerned that your money or assets may one day be lost in a messy divorce or bankruptcy proceeding? Are you simply unsure of the best way to protect your money—and your children—when you die?
If so, I would like to extend the opportunity for you to schedule a Peace of Mind Planning Session ($600 value) at no-charge with our office. Here a Marietta GA probate lawyer will help you work through such hard questions and ultimately create a rock-solid plan for distributing your assets in a way that aligns with your core values, but also meets your children’s long-term financial needs.
However, we only have 8 such Sessions available each month, so call (770-425-6060) to immediately schedule an appointment with Marietta GA probate lawyer, Steve Worrall before they are all gone!