Andrew Ewalt's Law Blog

Picking A Guardian For Your Children Part 2

Having selected who will act as the guardian it is also important to consider how your assets should be maintained and utilized for your child's benefit. 

It is a very good idea to leave assets in trust for your child's.  Trusts provide a centralized location for management and control of your assets and directions on how your child should benefit from those assets.   

Here is a list of a few things to consider when thinking about a trust for your child.

1.  Should the guardian also be the trustee?  Is he/she good with money? Often parents separate these functions in order to add a second decision maker to the process.

2.  How restrictive should the distributions to the child be?  Income and Principle? Income only? How much desecration should the trustee have in determining when a distribution should be made.

3.   At what age should the child realize full distribution from the trust?  Often parents structure distribution in stages.  One third at age 21, 25 and 30 is a common structure rather then a lump sum at age 18. 18 is common when no trust is used and a probate court is monitoring a minors assets.  Just think about what you would have done at age 18 with thousands and thousands of dollars....new Ferrari come to mind?

Picking A Guardian For Your Children: Part 1

Have you legally selected who will raise and protect your children if you (and your spouse) die? Have you ever even considered the question? Have you even talked about it? If the answer is "no" or "not really" you are not alone. Many of my clients are just like you.  It is often at the top of their "to-do-list but the truth is that if a parent does not state in their will who they want as guardian the government (a judge) will make that decision.

Here are some things to consider when selecting a guardian:

1.  No one is going to be you.  No one else will have your exact parenting, discipline or style.  Once you get over this obstacle it is easier to make a good decision.

2.  Parents want to make sure that if they were to die, their children will be taken care of. But what if the individuals they choose are not as well off? Can assets be left to the guardian to even things up?

3.  Are the potential guardians emotionally and physically up to the job?  Do they have the time? Adult  siblings and elderly parents may not be the best choice?

4. Will your children have to move or change schools?

5.  Do the guardians have the same moral beliefs?

6.  Are they financially stable?

Will You Lose Your Home If Your Spouse Enters A Nursing Home?

The odds of falling prey to Long-Term Care are staggering. There is a 43% chance that someone age 65 or older will eventually enter a nursing home during his or her lifetime.  On Average most of these nursing home stays will last about 2 1/2 years .  And such care is not cheap. A year in a nursing home can average more than $100,000.00 in Connecticut. Unfortunately, many hold the mistaken belief that Medicare and Medicare Supplemental Insurance will cover their Long-Term Care expenses. At best, Medicare will pay for all or part of the first 100 days of care. That's all.  The lions share of all Long-Term Care cost is paid from the assets of the individuals needing the care.  Because the cost of Long -Term Care can be so Staggering many people are legitimately concerned they will lose everything they have worked so long and so hard to acquire.  What's more troubling is even Medicaid will only begin to help out when an individual has become impoverished meaning an individual only has a net worth of $1,600.00.

However, not all is lost for Connecticut couples facing the prospects of Long-Term Care costs. Medicaid rules also act to protect the spouse living in the community from impoverishment. This means that under the law a community spouse will be able to keep some of his or her assets. In Connecticut a community spouse is allowed to keep among other things the primary residence, an automobile, personal assets and jewelry, household effects and potentially up to more then $100,000.o0 in additional liquid assets. Unfortunate, everything else may be subject to Medicaid spend down requirements.

Hopefully, this information has waylaid your immediate concerns about losing your home and all of your other assets if your spouse needs Long-Term Care in a nursing home. On the other hand, there are many resources that might help increase the total assets that could be preserved. Through the use of a Long-Term Care Insurance Policy or advance planning with the assistance of an elder law attorney, much more, if not all of the couples assets could be protected. Too often people avoid facing the reality of the Long-Term Care threat and avoid taking action while they can still make a difference. Planning in advance is the key to avoiding the devastating effects of the cost of Long-Term Care.

Top 5 Retirement Planning Mistakes

Many of my clients ask my advice regarding their retirement plans and benefits.  Though I am not a financial adviser and as such never make recommendations regarding specific financial/investment options (I do work with many very qualified financial professionals and I do love to make referrals so if you are in the need of a financial adviser in Connecticut please let me know), as an attorney I do work very closely with clients and there retirement plans.  Here are  5 mistakes to avoid regarding your retirement assets.

1. Not understanding your options when you leave a company.

2. Improper or outdated beneficiary designations.

3.  Not understanding the beneficiary's distribution options.

4.   Not taking the required minimum distribution from an IRA when you reach age 70 1/2.

5.  Not having enough money saved for your retirement.

All of these mistakes can be avoided with a little knowledge.  The information you need is available through qualified financial professionals. 

Where To File Important Documents

Every one of us accumulates important documents during our lifetimes, from investment and banking information to our estate and important personal papers.  One of the most important things to consider is where to file these records. 

When it comes to documents such as deeds to property, stock and bond certificates, life insurance policies and estate planning documents such as wills and trust one of the safest places is in the bank safe deposit box. However, keep in mind that unless the box is owned jointly with other individuals or owned in a trust (like a living trust) the contents may become inaccessible if the single owner becomes incapacitated or dies, thus requiring a probate court order for access by family or estate fiduciaires. 

For documents like brokerage statements, tax returns and other personal records these documents can be kept at home.  I often recommend that a fire proof safe or box be purchased (some are rather inexpensive at the local box retail store) to keep important papers at home. They are not 100% guaranteed but do a better job then a shoe box. 

Pre Planning Your Funeral

Many of my clients are starting to consider the option of preplanning (and even prufunding) their funerals.  This can be very important especially for individuals who are faced with long-term care in a nursing home, because the government allows and even encourages the prefunding of funeral expense up to $5,400.00.  Here are some thoughts on why to consider preplanning your funeral. 

1.  Preplanning lets you make your wishes known, so your loved ones won't have to worry. They won't have to wonder if they made the right decisions. 

2.  Preplanning will helps reduce emotional overspending by your family and loved ones from grief or guilt.

3.  Preplanning gives you a chance to personalize your funeral and make it a celebration of your life. Often your family just don't know what you would have wanted.

4.  Prefunding helps relieve you and your family from future financial responsibility.

5.  Peace of mind. 

Amending A Will

Typically, the first stem in estate planning is to prepair a will.  If you do not have a will in place, this requires your immediate attention.

However, lets say you already have a will in place, but your situation has changes in the time since you drafted the will.  In these situations , you may be able to add onto or modify your existing will with a codicil.

In order to be binding, a codicil must be handled with the same legal formalities as a will and should be drafted by an attorney.