Make A Will Month

I recently read that August is National Make A Will Month. I have not received any greeting cards yet, so I figured I would write a blog post to mark the occasion.

Estate planning attorney Gerald M. Condon stated, "You really don't know your children - until they divide their inheritance." Mr. Condon passed away several years ago, but I imagine he was not one to leave anything to chance when he did.

I have written fairly exhaustively on the importance of planning for one's inevitable demise on this blog along with how to get started doing so. However, Mr. Condon brings up an interesting question: How can I assure the transition of assets is seamless when I am gone?

The very simple answer: Plan and Communicate.

Some of the biggest arguments I have witnessed in administration of a decedent's estate deal with tangible personal property that has only sentimental value. The cost of those arguments, in both time and expense, far exceeds any financial value of the item.

Arguments among heirs, especially with respect to items of nominal financial value, could easily have been avoided if the deceased had better communicated their intent. A meeting with a parent and their children while the parent is still alive is a great way to hash out who wants what. At the same time, it is a great opportunity for a parent to set expectations: "You have drained money from me your entire lives, I'm giving everything I own to the animal shelter when I die. I have always liked dogs better than people anyway." Perhaps the direction will be more loving than the example, but setting an expectation is always key.

Also, make sure you have competent people set to take responsibility for Trust/Estate administration when you are gone. Evaluate their capacity to effectively handle assets and understand a somewhat complex process. Jimmy, who is 45, stays out all night, and lives in Mom's basement, may be your oldest and best friend, but he may not be who you want handling your affairs when you are gone.

Finally, point your appointed representatives in the right direction for assistance when the time comes. They very well may need the assistance of an attorney, CPA, land appraiser, auctioneer, banker, etc.

Plan and Communicate.  Seems like a good slogan for life.

Nursing Home Costs: Are You Prepared?

Aging is one of the constants in all of our lives. Even those of us who will never mature still will age.

Very often with aging comes a decline in our functioning. The statistics on the number of people who will require some sort of long-term care during their lifetimes and the projected costs for that care are astounding.

Just a quick Google search reveals that the average cost of long-term care in Illinois is currently $178 per day. (We will take this as fact for the purposes of our example.) On average, that means a year in a long-term care facility in Illinois will cost around $65,000. The projections I have seen say that those costs could increase to anywhere between $10,000–$20,000 per month over the next several years.

So that begs the question: How will people cover these costs? Even if someone has accumulated a significant amount of wealth over the course of their lives, their assets could be exhausted quickly if the projections come to fruition. Basic economics seem to indicate that they probably will.

When planning for the payment of nursing home care, there are typically three groups of individuals: 1) Pre-planners—these are the folks who are hopefully many years ahead of the time when they may require long-term care; 2) Planners—these people have a strong likelihood that they will require long-term care within the next few years; and 3) Nursing facility residents—long-term care is necessary now.

Those who fall into the first two groups have more flexibility with planning, which means they can do more to preserve their assets for future generations. While the options are much more limited for the third group, they can still take steps to preserve their assets.

Long-term care planning is complex, and handling it yourself can cause unintended consequences. What I can guarantee is that, if you do nothing, the nest-egg you have worked hard to acquire could dwindle to almost nothing because of nursing home expenses. It's never too late to contact your attorney and other advisers to plan for your current or future needs.