Most people do not like to think about getting older, but we all will–and it’s important to plan so that your family is taken care of after you are gone. Below, you will find some of the mistakes commonly made during estate planning, and some tips on Elder Law in Naperville, IL to help you plan for the future.
Not knowing your options as to preserving your assets: Most people are busy with their day to day lives, and don’t give much thought to estate planning. However, if you have a special needs child, failure to plan your estate can result in income and Medicaid benefit loss. To preserve your assets and income, your lawyer can help you establish an SNT (special needs trust). With an SNT, a trustee manages funds on behalf of your disabled child.
Failure to consider tax ramifications: Some parents consider transferring title to their home to one of their children for a dollar, but that can harm more than help. Transferring your home for $1 removes your legal claim to the residence, and any equity is subject to your child’s financial decisions. Depending on location, when your child sells the home, they may pay a capital gains tax of up to 15% on the value increase. By comparison, the inheritance tax is only 4.5%, and probate costs are low.
Not planning for incapacity: Nobody wants to think that they will ever be unable to manage their own affairs, but it happens to many, especially at the end of life. If you are incapacitated and you do not have a durable power of attorney, it’s likely that a relative will have to go to court and become a guardian. Having a durable power of attorney allows you to name someone to manage your affairs when you cannot.
Failing to safeguard assets when long-term care is needed: Many people don’t think about the end of their lives, and many underestimate the cost of nursing home and other long-term care. An attorney that knows Elder Law in Naperville, IL can help you protect your home and other assets, and they can help you plan in a way that suits your estate and your circumstances.
