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This information was provided by Richard H. Hallstrom, Attorney At Law, for Plan-My-Estate.com.
Seniors have particular issues which must be dealt with when creating an effective Estate Plan. Some of these issues concern Estate Taxes, Medicaid Medi-Care, Medi-Cal, and long term healthcare.
Although Estate Planning is particularly important for seniors, it is a much neglected necessity. In fact, thirty-six percent of Americans age 50 and over have made little or no effort toward estate planning. Less than half of Americans age 50-54 have even executed a simple will. Many older Americans are unaware of the many benefits of proper Estate Planning. A properly developed Estate Plan can save you, your spouse and your loved ones a considerable amount of money, time and inconvenience.
One of the most important issues when creating your Estate Plan is to ensure that your plan does not adversely effect your eligibility to receive certain benefits such as Medicaid or Medi-Cal. If you or your loved one may need long term healthcare or nursing home care, then you need to plan carefully so that your assets are not taken to repay the medical costs. A typical living trust will not protect you. More advanced planning is necessary and it is wise to work with an Attorney who understands the issues particular to seniors.
Click here to view a list of Exempt Assets which typically will not be counted against you when determining whether or not you qualify for Medi-Cal or Medicaid coverage.
One important tool available to seniors is the Special Needs Trust. A Special Needs Trust is a type of spendthrift trust that is used to provide benefits to an elderly or disabled person while not effecting the person's eligibility to receive certain types of "need-based" government programs such as SSI and Medi-Cal. The Trust provides money for the "special needs" of the person as a supplement to the assistance received from the government programs.
The "special needs" that the Trust covers can include education, training, transportation, insurance, medical expenses, treatment, rehabilitation, medical equipment, and other necessary expenses.
A Special Needs Trust must be irrevocable and the person who receives the benefits (the beneficiary) cannot control the amount of or frequency of the distributions. Because of this, the government does not include such Trust when calculating the assets of the person in order to determine eligibility for receiving the government assistance.
Special Needs Trusts are typically set up by parents who want to provide care for their elderly parent or disabled child without effecting that parent or child's ability to still receive government assistance. Also, an elderly or disabled person who expects to receive an inheritance, gift or large sum of money will set up a Special Needs Trust for himself so that he will not lose his government assistance once he receives the inheritance, gift or money. It is common for people to leave a disabled or elderly person money in a Will or Living Trust without knowing that such gift will cause the person to lose government benefits.
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