When is Estate Planning Appropriate?

I recently read an article written by a nationally renowned estate planning attorney who said, “If the elder law attorney can advise clients early enough, . . . they can alleviate later problems.” Yes, that’s true, and we often see the problems of people who don’t get it done right.

A local woman came to me recently because her long-term friend had died six weeks earlier. He had gifted her 50% of his home four or five years ago, and the other 50% of the home was held in his trust to be distributed to her following the man’s death. The problem was that the attorney who prepared the trust wasn’t familiar with elder law rules and Medi-Cal, so now the State of California will seek repayment of his Medi-Cal bill. He had been in the nursing home for about five years prior to his death, so his debt back to Medi-Cal will be around $500,000 to $600,000. The woman who was to get the home will now have to pay the debt to the state if she wants to keep the home for herself. Neither the woman, nor the friend who died, were ever advised that there could be a problem with her getting the rest of the home upon the man’s death. Sad result.

Estate planning and elder law planning are not the same thing. You need to have an estate plan that is prepared with an eye towards elder law needs so that you are protected in the event that certain circumstances arise. It’s like buying your granddaughter a car that has seatbelts and multiple airbags. You hope that the lifesaving features are never needed to save her life in an accident, but you also hope that they’re always working and she’ll be protected in the event of an emergency. That’s why we use those things.

If you drive year after year and never have an accident, then you didn’t need to be wearing your seatbelt all that time. But we wear seatbelts whenever we’re in a car simply because it provides that needed protection “just in case,” and we never know when that just in case event may occur. Do you know of anyone younger than you who had a stroke or suddenly died? It happens, and many people aren’t prepared for it.

Do you have proper estate planning documents in place? Will they work when you need them to work?

A very experienced financial planner called me recently with a serious problem. He had confirmed a few years ago that his client had an estate plan, but the client, now age 82, recently suffered a serious stroke and the documents wouldn’t work as the elder had planned. Stanford Hospital was refusing to release the man to return to his assisted living facility because the elder’s documents were not in order and the elder wasn’t able to make decisions for himself. The elder was being kept at Stanford Hospital and paying the bill there while he was also paying the bill at his assisted living facility. The lack of proper documents left him trapped, and three other attorneys that the financial planner consulted were unable to help the elder.

Don’t leave your future to chance and hope. Take care of yourself and your loved ones. Make sure that you have a quality estate plan in place, and make sure that you understand it.