Funerals can be very expensive here in Marietta, Georgia. Many families pay up to $10,000 (and oftentimes more) for their loved one’s funeral. Hoping to relieve family members from the stress of this financial burden, the idea of paying for funeral expenses in advance using a prepaid funeral contract is growing in popularity. As with any financial decision, you should carefully consider the pros and cons of this investment.
Some of the benefits of prepaid funeral contracts are:
- Your family does not have to deal with the emotional burden of planning your funeral.
- Your family has financial help, and sometimes full payment of your funeral costs.
- Many times you can lock-in the cost of your funeral at today’s price rather than a higher price in the future when the funeral is held.
- You can often pay in installments.
Some of potential risks of prepaid funeral contracts include:
- The funeral home could go out of business.
- You may not be able to get a refund if you change your mind.
- You may not be earning interest on the money you invest.
- You could move or die away from home and your contract may not be transferable.
Before you sign on the bottom line, be sure to talk to a qualified will and estate attorney here in Marietta GA. There may be safer ways to set aside or invest money that will accomplish your goal of taking care of your final arrangements and decreasing the stress on your family. The bottom line is that it is critical to gather as much information as possible before tying up your money with a local funeral home.
If you’d like to talk to our Marietta will lawyers about taking care of your family so they don’t suffer financially at the time of your death, give us a call at 770-425-6060.
Many people believe that it would be easier for their loved ones if they transferred ownership of their home before they need to. Bypassing probate in Cobb County, they believe, will be easiest for everyone. That could be true. However, there are several risks to consider that might harm you or your heirs.
Hazard #1 – You could create tax problems
If you transfer your principle residence you could be disqualified from part or all of the capital gains tax exclusion causing an unnecessary tax liability. This means that if you decide to sell after sharing ownership of your home with your children, they would have to pay capital gains taxes on the increased value of the home. This is really bad news if you’ve lived in your home for many years and the value of the property has significantly increased.
Hazard #2 – House value counts against you if you need Medicaid
If you transfer your house within 5 years of needing Medicaid assistance for a nursing home, you will probably be ineligible. Medicaid has a five year “look back” period where any monetary gifts or property transfers are considered which may take you above the income requirements.
Hazard #3 – Your loved one could get divorced
If you transfer an ownership interest of your home to your child, and then the child gets divorced, your ex-son/daughter-in-law might be entitled to part of the value.
Hazard #4 – Your child could file for bankruptcy
When you share ownership of a home with your child, you also share exposure to one another’s financial problems. If you are moving to an assisted living home and plan to use the equity in your home to pay the rent, you may have a bad surprise if the bankruptcy court demands some or all of the proceeds of the sale to pay your child’s creditors.
Hazard #5 – Something happens to your child
If something unexpected happens to your child and they become incapacitated or predecease you, you could run into real trouble. If, for example, your child becomes disabled and needs Medicaid coverage, he could be ineligible due to his share of the home.
Hazard #6 – Your child is a problem
After you transfer ownership of your home, you must all agree if you decide later to sell the home or even do renovations. If your child doesn’t agree with you, they can stop you. I know that it is hard to imagine your dear son or daughter in this light, but it happens more often than you can imagine.
The bottom line here is that you need to be very careful when considering transferring or sharing ownership of your home with your children. There are several other options but it is important that you work with a qualified estate planning and trust attorney in Marietta GA who knows how to utilize better (and safer) legal strategies to accomplish your goals.
Many people approach estate planning attorneys in order to determine how their assets will be divided among survivors after their death. Unfortunately, a huge number of them don’t take the high likelihood of long-term care into consideration. Elder law attorneys in Atlanta see this situation come up time and again, and it is important to educate clients on the options they have available.
First of all, long-term care is a very likely scenario. People are now living longer than they ever have before. This can be a great thing, but it also means that the period of time in which we cannot fully care for ourselves may be longer, too. More and more people find that they truly need some form of long-term care. In some cases, this can be handled through an in-home healthcare worker rather than in a nursing home, but even that is expensive.
Nursing homes are a common solution when it comes to long-term care, and a good elder law attorney should help you plan for how to make this possibility happen. It’s common for people to think that the government will simply pay for their needs or that a nursing home isn’t any more expensive than renting an apartment. Both ideas are usually untrue.
So, how does one pay for long-term care? Atlanta elder law attorneys typically see four approaches:
- Private Pay – Any care that is needed, from nursing homes to prescriptions drugs (including co-payments or full costs) are covered out of pocket. Elder care services tend to be very expensive, and the costs associated with them are incredibly high. It’s not unusual for assisted-living placements to cost upwards of $8,000 a month. That means that “simple” basics that are required for day-to-day living come out to $96,000 a year.
- Medicare – Medicare is a health insurance program administered through the government. Elder law attorneys work with this program a lot because one of the basic requirements is that you must be over 65 to receive benefits. Many people are surprised to learn that Medicare does not typically cover long-term care. So, even if you qualify for this program, it cannot be used to cover nursing home care or in-home healthcare professionals for more than about 100 days.
- Medicaid – Medicaid is used by those with great financial need, and you must apply and qualify for the benefits. Many people are shocked when their elder law attorney explains that Medicaid is not actually available to everyone, and if you have much by way of assets (even a modest home or a few thousand dollars in the bank), you may not qualify at all. If you hope to qualify for Medicaid, you must prepare several years in advance to protect your assets.
- Long-Term Care Insurance – This type of insurance can help to cover or offset the costs associated with long-term care, such as an in-home healthcare worker or nursing home care. Policies can be somewhat confusing and expensive, so it’s highly recommended to work with an impartial elder law attorney when reviewing potential policies to ensure you understand them and are getting what you expect.
There are many issues to take into consideration when planning for your future, and long-term care is undoubtedly one of the most important. Working with an elder care attorney in Atlanta means that you will understand the options that are available to you and how they apply according to state and federal law. Call us at 770-425-6060 and we can help you examine the approaches that will work best for you and your family.
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.