Elder Law Report
Elder Law Report
Estate Planning Naughty and Nice List: Safeguard Your Legacy with Essential Strategies
Unlock the secrets to ensuring your legacy isn't left to chance with our holiday-inspired guide to estate planning! Elder law attorneys Greg McIntyre and Brenton Begley bring you the "Estate Planning Naughty and Nice List," revealing essential strategies to safeguard your assets and avoid legal pitfalls. Learn why simply having a spouse doesn't automatically grant decision-making powers over your financial and healthcare matters, and discover the proactive steps needed to keep your estate out of probate and secure for future generations.
Our episode sheds light on the power of taking a thorough inventory of your personal relationships and financial assets as the cornerstone of a robust estate plan. From utilizing Lady Bird deeds to creating Medicaid asset protection trusts, we explore how these tools can shield your wealth from unforeseen claims. Britton and I debunk common misconceptions and stress the importance of appointing powers of attorney, ensuring trusted individuals can step in when needed. With professional guidance, you can craft a comprehensive plan that not only protects your family's future but also honors your personal wishes.
Hi, I'm Greg McIntyre, elder Law Attorney. I'm here with my law partner, britton Begley. Hey, britton, hey, good morning. Today we're going to talk about the naughty and nice list. We got Christmas coming up. We turned the corner on Thanksgiving. Now it's a free-for-all to talk about Christmas. Britton, right, christmas time is here. So the estate planning naughty and nice list. Santa has his naughty and nice list. He knows if you've been good or bad. He knows if you've done your estate planning or not, if you planned ahead. This is the estate planning naughty and nice list. So if I were the estate planning Santa Claus, if we were Brenton we are co-Santa Clauses, okay, we just alternate every Christmas, okay.
Speaker 2:All right.
Speaker 1:There you go experience as estate planning and elder law attorneys, also having insight with doing a ton of probate work and doing a ton of benefits qualifications for long-term care, medicaid for nursing home care, special assistance for assisted living or veterans, aid and attendance pension benefit fits to help pay for long-term care right, that informs. That informs all of us. Right, that informs us. It also litigation, you know, that informs us as well. So we're going to give you our naughty and nice list based on that information. Britton, will you take the nice list?
Speaker 2:That's right. So this is all the folks that would receive a present and not a lump of coal.
Speaker 1:Um, so I'm going to do the naughty list first, is that okay? I'm going to do the naughty list first, is that okay? I think the naughty list has to come first.
Speaker 2:Yeah, I think so, I think so, I think you want to know naughty list, that's fine. You want to know?
Speaker 1:So here's the naughty list from state planning, santa Claus. Okay, if you do not have topping the list, if you do not have powers of attorney in place, if you have not appointed a trusted person to handle your legal and financial affairs with a general, durable power of attorney, or your healthcare affairs, if you're in a situation where you cannot make your own healthcare decisions, if you have not appointed that person and you know who those people are in your life that are going to handle those things the best way for you step in your shoes when you need them. If you have not done that, you're on the naughty list. The only reason you stay on the nice list is if you don't have someone in your life that you trust to handle those things, then you stay on the nice list. Is if you don't have someone in your life that you trust to handle those things, then you stay on the nice list. Okay, because if you have someone in your life that you can appoint and you haven't done it, you have left yourself in a position where everything is frozen. No one is appointed to handle healthcare decisions, no one is appointed to handle paying the bills or shifting assets to qualify you for a long-term care benefit if needed, protecting assets you may have failed to protect. You haven't really done the foundational, fundamental things of estate planning and that puts you on the naughty list. You've also put yourself on the naughty list in a really tough position in a corner, where the only way that someone could step in even a spouse, and help you in that situation and manage courts to petition the court or apply to be a guardian. There has to be a hearing as to whether you're competent or not. There might be fighting amongst the family as to who should be the guardian. It's a tough situation to put the family in. It's a tough situation to put yourself in and then, once the court has oversight, your assets may be handled in a way that you don't want them handled. They might be spent down to zero and then you qualify for a benefit right to pay for long-term care.
Speaker 1:If you're in a tough healthcare situation that requires long-term care, you want to avoid guardianships if at all possible and saying that we handle a lot of guardianships, so if you're in that situation, we can help. However, we would like to easily prevent you from getting in that situation. Okay, avoiding probate and what we do, especially on the long-term care side, especially on the elder law side, we see people every day who have failed to plan and come to us to try to save everything and we can do that. We are very good on the benefit side of helping you save everything. However, it's so much better to plan ahead. Avoiding probate and claims from probate is so important because of that. That's why the planning ahead is so important. To avoid the probate and claims from probate is so important because of that. That's why the planning ahead is so important. To avoid the probate.
Speaker 1:The only place in North Carolina where a claim can attach to your estate, to your assets, after you pass away, is through the court probate process. Just in case, as an aside to define probate, which is there's a huge misunderstanding about probate out there. Probate is the only place your will gains any legal power. It's not worth the paper it's written on until it's accepted into a probate court and you or somebody you've appointed are appointed as the executor of this will and then you have power to transfer assets. But before that you have to publish a notice to creditors in the paper for four consecutive weeks and wait 90 days for claims to attach If you've had a long-term care stay and a benefit had to come in and pay for that stay. Like long-term care, medicaid, special assistance, they will attach a claim to your probate estate which will force the house to be brought in within the probate estate and sold to satisfy that claim. And it doesn't get to the next generation. So it's gone.
Speaker 1:We haven't even gotten to the planning ahead part. Part of the planning ahead is avoiding probate, but part of it's saving the house to begin with and avoiding probate at the same time, while doing so in compliance with the long-term care, medicaid and special assistance rules, the benefits rules, all that's possible, and avoiding probate in a long-term care planning situation is paramount. We need the powers of attorney in place for you. We need to avoid probate so we avoid claims and a clawback of assets during the probate or estate administration process if you don't have a will. It's a similar process through the courts. So let's get to planning ahead. We've talked about why we want to avoid probate because we want the assets to actually pass through to the next generation or to whomever you want them to go to. Let's talk about planning ahead a little bit.
Speaker 1:On the NICE down, take inventory of the people in your life. Life lives, life depending on if you're a cat or not, how many lives you have. So taking accounting of the people in your life, the stuff, your assets. Your assets are your retirement, any investment accounts, any money you have in the bank, any insurance that accumulated value or accumulates value. So whole life, insurance, real estate, your home or any other real estate you own Could be other things as well. Cars could be collectibles, could be art. Those are all your assets, and more right and assets could be collectibles, could be art. Those are all your assets, and more right and assets anything tangible, right or the earth or anything built on the earth.
Speaker 1:Okay, so let's look at taking inventory of your assets and the people in your life. When we slow down and do that, then we really just naturally gravitate toward a plan and it's very easy to flush out the plan because then we really solidify our goals. Okay, well, this is my stuff and these are the people I love. What do I want to do with that stuff and who do I want to give it to? Are there any charities? So that's how we start to flush out a plan and in doing so, we want to plan ahead to avoid probate and do that in a way that doesn't conflict with your right or ability to get a benefit, to qualify for long-term care and pay for it.
Speaker 1:Lady Bird deeds, I'd say, would be right at the top of the list of that nice list of planning ahead and protective planning. It's a deed in North Carolina that allows you to protect your home and pass it on to whomever you place on the deed. It could be the next generation, it could be a grandchild. So if you want to protect your house and do so even within a look back period for a benefit three years for assisted living, five years for nursing home care in North Carolina even within that window where it's a no-no to transfer assets, they allow you to put a Lady Bird deed on your primary residence so you can protect your home, and it's that easy residence, so you can protect your home and it's that easy Trust.
Speaker 1:We may want to create a container where you can not only put your house but other real estate too, and maybe investment accounts. You may want to be able to say those aren't my assets, they're protected, I qualify for this benefit instead of having to spend all these down and sell the house and burn through the retirement and guess what? The way we draft the trust? It's a specialized trust, a Medicaid asset protection trust, where you still get to get all the rents off real estate and income off investments dividends and you still don't have to count it as your asset in an application. And we do all this because we have extensive experience in drafting these types of things and putting together these types of protective plans for you, for you and your spouse, if you're single, for you and your family.
Speaker 1:There's so much more Brenton, there is, I think it really. All this, I would say. Planning ahead is paramount, sitting down with an attorney like myself or you or one of our other experienced estate planning and elder law attorneys to engage in this type of planning. So I'm going to turn it over to Brenton Now. I've talked a little naughty and nice here, okay.
Speaker 2:Yeah, I mean.
Speaker 1:But, I'm going to ask you how do I get on the nice list? Like you're naughty, if you don't do all these things, I'm the bad Santa. You be good Santa, yeah, and come in Great movie, by the way, come in and let me know how do you get on the nice list for a state plan?
Speaker 2:Well, it's no surprise, based on the discussion that we've had so far, that getting on the nice list is basically just staying off naughty list, so doing the opposite of what the naughty list you know. So doing the opposite of what the 90 list you know, detailed, right. So, first of all, powers of attorney. Huge, I mean. We talk about planning ahead, and part of planning ahead is putting things like power of attorney in place. But we gave this its own category because it's that big of a deal and because we get pushback when we say you know, get power of attorney in place. So not only is it so important, but we also get this weird pushback right. So one of the things that people say is like well, I have a spouse and so, because I have a spouse, I don't need power of attorney. But that's just flat out wrong.
Speaker 2:If you have a spouse, that person does not, by virtue of the fact that you're married, have the legal authority to make you know decisions on your behalf, whether they're decisions regarding your money, property or your legal rights, or your health care, for that matter, and that's very confusing. A couple of examples that we give a lot when we talk about this is retirement accounts. Those are individual accounts that your spouse has no access to, even if they're beneficiary. Somewhere to God forbid happen to you where you're incompetent, incapacitated, you're vulnerable, in a very vulnerable state where you need long-term care. You're not just vulnerable your money, your property is vulnerable and if it's housed in an account that only you have access to, well, that creates a really sticky situation where that money cannot be accessed to be used to pay for things that are needed or to be moved and protected. So just one good example. Another one is real property. If you are married in North Carolina and you have a piece of real property, generally speaking you have to have your spouse sign off on any deed that you put on the property. So to protect the property with a ladybird deed, to put it in trust, as you were talking about, you have to have the spouse's signature to do that. And if the spouse cannot sign because, again, incompetent and incapacitated, well you got to have power of attorney and without that you have to get the court involved and that's where stuff gets really weird. So that's why we get into power of attorney its own category on the naughty and nice list, and that's why you should absolutely have it to get on that nice list.
Speaker 2:The other thing is generally planning ahead with a professional, and this part's important, because what a lot of people don't realize about the planning process is sitting down with a professional not only helps identify what the plan should be, but it also helps facilitate the plan, you know, generally speaking. So what you had mentioned earlier, greg, is like you know, you take an inventory of all your assets, you take an inventory of all the people in your life and you naturally start to have a plan fall in place, and so part of our process is we want to get all that information at the outset. You know we have information that we request from potential clients when they come in for a consultation. So you know it walks them through that process where, when they sit down with the attorney, they're already prepared to talk about you know what the plan should look like because they've already taken an inventory of the assets, they've already looked at the people in their lives and they have a general understanding of OK, this is what this is who I want to be in charge.
Speaker 1:This is a client come in. Have you ever had a client come in and sit down and they're like I have no, you know, I just don't know what I want to do. I have no idea. So, or it's so complicated. This is so complex, right? What's funny is that because I know the process, because I do it personally with any tough decision or something like that, right, and I will help walk people through it. I know you do too, and I help walk people through it, and I know you do too. It's like, by the time, we flushed out and talked about the people in their lives and the assets, and then it comes to that question well, what would you like to do with this, this, this?
Speaker 1:It locks them into place and they know, right, and then, it's not complicated at all, because we write it out and draw it out.
Speaker 2:And for the professional too. It's clear. I mean, once you take that inventory, once you talk to the client through it, once you walk them through, you know, hey, who do you have in your life? What do you have. It's clear to us, too, what needs to happen. Especially, you know if you don't have certain things in place, if you don't have long current plan for long-term care. Because what we're looking at is we have the benefit of knowledge. I mean, we're also burdened with knowledge. We know how these things work, but we also have the. We make that a benefit in planning and saying, hey, look, we know that 70% of individuals or more will need long-term care at some point in their life, some type of long-term care, whether it's in-home, assisted living or skilled nursing care. And in any event, at any level whether it's in-home, assisted living, skilled nursing it's going to be tens of thousands of dollars a month. So that's something that absolutely needs to be planned for. So sitting down with a professional can really help guide you through what priorities you should have in planning. That's the other big benefit of sitting down with that professional. And that brings me to really the last thing on the list here is you know, these things go hand in hand.
Speaker 2:You mentioned avoiding probate, but also we want to make sure we plan to get some type of benefit to pay for long term care, and so avoiding probate is a big deal. What you want to do is, you know, activating a benefit to pay for long term care. They'll they'll pay for your long term care for the rest of your life but, as you mentioned before, they'll try to go after any asset that is passing through the probate process. So you know, as I say to my clients, we don't want to be, you know, out of the frying pan into the fire, so to speak.
Speaker 2:We want to make sure that we avoid the cost of long-term care by being able to protect the assets during your life, activate a benefit during your life and then also avoid probate, where they can come after the assets to recoup what they paid out for that benefit. So that's what that plan needs to look like. So, if that's how your plan is structured, you know what your priorities are. You've sat down, taken an inventory of your assets and the people in your life and you've set up a balanced plan that allows you to protect your assets during your life and activate a benefit during your life to pay for long-term care that we're all likely to need, and then, on the other side, make sure you avoid probate and protect those assets for the next generation or your spouse. You are on that nice list.
Speaker 1:Good advice, nice Santa, thank you. So together we're both naughty and nice Santa. We can tell you both sides of that. You know this has been the naughty list you want to avoid I mean naughty and nice list of estate planning coming up this Christmas season. You want to avoid the lump of coal in your estate plan? Okay, we'd love to sit down with you and discuss that. Love to sit down with you and discuss that We'd offer a free consult. Hey, no better thing to give yourself or your loved one for Christmas than a great plan that helps protect their heart, money and property. Have peace of mind going in to the season of giving and love and peace. Okay, and love and peace. Okay, you can take advantage of that by calling 1-888-999-6600 or by scheduling online at mcelderlawcom slash scheduling directly on our calendar to take advantage of a free consult to discuss your estate plan today. Thank you, bretton, I appreciate it.
Speaker 2:Absolutely See you. All right, see you.