Obtaining and maintaining long-term care insurance is an expensive undertaking, so be sure you gather as much information as possible before you commit to a plan. The following paragraphs contain three things that you should know about long-term care insurance.

First, while purchasing this insurance is not right for everyone, you should know how your care will be paid for if you forgo purchasing insurance but wind up needing long-term care. If this occurs, you will be paying for your care out of your own pocket, for as long as your personal money tree bears fruit. Then, after you’ve dwindled your assets down to $14,000 (although your house isn’t part of this tabulation), you may qualify for Medicaid; if you do, the government will begin to pick up the tab for your care.

Second, the costs associated with this insurance are high; therefore, if you have waited until the last moment to begin building your retirement, or you’re just not sure whether not you can afford even a moderately healthy retirement, then this is one cost that you cannot afford to bear. How expensive is it? If you and your spouse are around 55-years-old, long-term care insurance will cost you anywhere between $2,000 to $6,000 a year, every year, until you either lose or use your coverage.

Third, this is not like ordinary insurance. This insurance requires you to pick a specific amount of coverage, then once the plan pays out that amount, the golden egg disappears and you’re left to pay for care the same way as anyone else would.

The Law Office of Michael Robinson, P.C. is a member of the American Academy of Estate Planning Attorneys.

If you are developing an estate plan and want to make charitable giving a centerpiece of your efforts, you might want to consider creating a family foundation. While most people associate family foundations with wealthy people such as Bill Gates or John D. Rockefeller, people of more moderate means can still take advantage of these tools if they wish to make charitable donations an important element in their estate plans.

Numerous Options

There is no single blueprint to creating a family foundation. If you want to create such a foundation, you will have to discuss your wishes and your options with your attorney. What kind of options? First, you can choose whether you want the foundation to accept donations from the public or to be solely funded by family money.

Second, you can decide whether you wish to remain in control of the foundation or allow the foundation to be run by, for example, a board of directors. You also have to consider what kind of charities you will want the foundation to support and how long you will want the foundation to last.

Significant Benefits

One of the great benefits of creating a family foundation is the ability to control and direct how foundation funds are used. For example, if you want to make a charitable donation to an organization, you don’t always have the option of being able to choose how you want that money spent. With the family foundation, on the other hand, you have the ability to create an organization that will use the money in accordance with strict criteria that you can create.

The Law Office of Michael Robinson, P.C. is a member of the American Academy of Estate Planning Attorneys.

The chances you’ll live in a nursing home at some point in your life rise considerably the older you get. According to the Census Bureau, only about 1% of people between 65 and 70 live in an extended care or nursing home facility, but by the time someone reaches 90, that percentage rises to more than 20%. The prospect of having to pay for such care is not a pleasant proposition, as nursing home costs can easily erode a senior’s assets.

The average cost of nursing home care can easily be $134,000 or more per year. Medicare will only pay for very limited initial extended care costs, and Medicaid will only pay if the person meets very strict income and asset criteria.  Also, unless a person has extended care insurance, most private health insurance plans will not cover any nursing home care costs.

For those concerned about nursing home costs eroding their assets and draining any savings, Medicaid planning is one possible option. Medicaid planning involves structuring your assets so that you meet Medicaid eligibility criteria. Because Medicaid allows for a five-year “look back” time period, it is best to begin your Medicaid planning efforts well before you think you will need nursing home care.

A good Medicaid plan will use a variety of tools to allow you to qualify for the program, including gifts, trusts, and other types of estate planning devices, though planning ahead is very important.

The Law Office of Michael Robinson, P.C. is a member of the American Academy of Estate Planning Attorneys.

Of all the potential problems facing elderly parents and the children who worry about them, one of the more difficult situations to deal with is when an elderly parent, typically a father, falls prey to a financial predator. Often referred to as “gold diggers,” financial predators seek to exploit an elderly parent’s loneliness, isolation, and fear to their own financial gain by promising hope of a new romantic relationship. If you are concerned that your parent might fall victim to financial exploitation, there are some steps you can take.

Talk to your parent about financial powers of attorney

A financial predator often seeks to isolate the elderly person from his or her family in order to more easily gain control of the elderly parent’s finances. If your relationship with your parent is strong, you can ask if he or she is willing to give up at least some financial control by signing over a financial power of attorney. If the parent is unwilling to give you or other family members control over his or her finances, you may be able to convince the parent to give it to a professional financial manager or advisor.

Keep communication open

It’s common for family members to be blindsided when an elderly parent reveals a new romantic relationship with a much younger person. Many times this person is the elderly parent’s caregiver and is in a position to have regular contact with parent. It’s important that if your parent has a caregiver you remain in close contact and keep lines of communication open as much as possible. If your parent begins talking about or hinting at a potentially inappropriate relationship, you can more easily get involved earlier and prevent potential problems.

The Law Office of Michael Robinson, P.C. is a member of the American Academy of Estate Planning Attorneys.

If your parents are like an increasing number of aging Americans, you may be surprised to find out that they are not planning on giving you an inheritance. The results of a recently released survey reveal that more and more parents and grandparents are choosing to skip an inheritance and instead use the wealth they’ve acquired in other ways.

Bank of America’s private wealth management arm, U.S. Trust, recently released survey results that it acquired after speaking to about 640 people who had individual investment assets greater than $3 million. 25% of the respondents stated that they preferred to leave their money to charity or organizations that help deal with social problems rather than leaving it to children or grandchildren.

On the other hand, just over 25% said they wanted to spend the money while they still could, using it for their own enjoyment. A relatively small 7% said that they didn’t believe they would have any money left over to leave behind.

Of those who stated they wished to leave behind an inheritance for their children, many expressed a concern that doing so might compromise their child’s work ethic. Many of these people stated that while they planned on leaving an inheritance, they would not leave their children their entire estate and would only leave something to make their lives a little easier.

The Law Office of Michael Robinson, P.C. is a member of the American Academy of Estate Planning Attorneys.

Executors. Once a person—called a decedent in estate planning and probate circles—dies, someone else has to step in to manage all the property issues. This person is called an executor or personal representative. The executor is responsible for telling all the decedent’s creditors about the death and letting them file claims. If there’s enough property in the estate to cover the debts, the creditors get paid. If there’s not, some of them won’t get their money back. In no event, however, does an executor or decedent’s family have to use his or her own personal property to pay for any estate debts.

Co-Debtors and Community Property. The one exception to other people not being responsible for paying the decedent’s debts is when there are co-debtors. If, for example, a married couple has a joint credit card and one of them dies, the other is still responsible for paying the credit card debt even if that spouse never used the card. Spouses may also be responsible for some debts in community property states. (Talk to your lawyer to find out what a community property state is and how it applies to you.)

Collections Agents. It’s important to know that even though other family members are not obligated to pay the decedent’s debts, that doesn’t mean debt collectors or collections agencies won’t try to convince you that it’s your responsibility. If you’re contacted by a debt collector who tries to get you to pay for an estate debt, contact the estate executor or your attorney right away. The collector’s actions may be illegal, and you need advice about what to do.

The Law Office of Michael Robinson, P.C. is a member of the American Academy of Estate Planning Attorneys.

According to a recent article in the Wall Street Journal, people planning on using Medicaid for long-term care coverage are facing tougher restrictions. In most states, a person cannot be eligible for Medicaid unless he or she has no more than $2,000 worth of investments, excluding a house and a car. This $2,000 limit includes any gifts that person has given for up to five years.

With Medicaid planning you can structure your assets so you can still take advantage of the Medicaid coverage. However, doing so will require some significant planning steps on your part. Here are a couple of tips.

Tip 1: Use a trust.

Because of the timeline involved, if you want to protect your assets and still be able to receive Medicaid long-term care coverage, you will have to create a trust at least five years before you apply for Medicaid. Further, not just any old trust will do, and you must ensure you create an irrevocable living trust that provides for as many protections as possible.

Tip 2: Use insurance.

If you are not sure you will be able to qualify for Medicaid because of the five-year gift period, you can obtain long-term care insurance to cover the interim period. This insurance will cover the five-year gap so at the end of the five-year period you can apply for Medicaid.

The Law Office of Michael Robinson, P.C. is a member of the American Academy of Estate Planning Attorneys.

One of the stranger legal stories to pop up recently is the tale of Floridian and millionaire John Goodman. In 2010, Mr. Goodman was in a fatal car accident that left another man dead. After fleeing the scene, Mr. Goodman was arrested under suspicion of drunk driving and faces criminal charges that could leave him in jail for up to 30 years. He’s also facing a wrongful death lawsuit filed by the family of the crash victim.

Much of Mr. Goodman’s Wells is owned by an irrevocable trust he had previously established to benefit his two teenage children. The trust requires that the children must reach the age of 35 before they can choose how to distribute the more than $400 million trust assets for themselves.

This is where Mr. Goodman’s 42-year-old girlfriend comes in to the story. Mr. Goodman legally adopted his 42-year-old girlfriend late in 2011. Though the adoption is currently being challenged by attorneys for Mr. Goodman’s other two children, because his girlfriend is now legally his child, she too stands to benefit from the trust and is entitled to one third. Also, because she is over the age limit imposed by the trust, she can determine for herself how to use her portion and may even give part of it to Mr. Goodman.

The legal move has drawn much scrutiny, and though it was first seen as a possible way for Mr. Goodman to avoid losing his entire fortune, it appears as if the court will either allow the drunk driving victim’s family to seek the normally untouchable trust funds in their lawsuit, or it may rule that the adoption was fraudulent.

The Law Office of Michael Robinson, P.C. is a member of the American Academy of Estate Planning Attorneys.

If there is one group of people that is most likely to need estate planning services and yet least likely to have a significant presence on the internet, it is seniors. It is perhaps because of this fact that the issue of digital estate planning has not received a lot of attention by either legislators or estate planning lawyers. However, it appears that lawmakers in Nebraska stand ready to reverse this trend and adopt the first kind of legislation that directly addresses digital estate planning issues.

Earlier this week, Nebraska legislators introduced a bill that would allow an estate executor, called the personal representative in Nebraska, to access a Facebook account of a deceased person. The law also includes other types of social media and micro-blogging services in its purview, but essentially grants a personal representative the ability to delete, modify, and otherwise control a social media profile or email account owned by the deceased person.

Though individuals can account for their digital estate assets as a part of their estate plan, there is currently no state that has a specific law that addresses this issue. The Nebraska legislation is the first of its kind, and will likely be succeeded by other laws in other states as the digital estate planning issue continues to gain prominence. For those who do not live in Nebraska, it is important to discuss any digital estate planning concerns you have with your estate planning lawyer.

The Law Office of Michael Robinson, P.C. is a member of the American Academy of Estate Planning Attorneys.

Special needs planning is often a part of a parent or other family member’s estate planning considerations. To ensure that you make adequate financial arrangements through proper estate planning to protect your loved ones with special needs, you may need to draft special estate planning documents. Because of the legal nuances involved in estate planning, setting up a time to discuss your estate plans with our office may be a wise investment.

Setting up a special needs trust may be necessary for your special needs planning. If you are a parent of a child with special needs, including a child with a physical or mental disability requiring long-term care, you may want to consider setting up a special needs trust. You can also establish a special needs trust if you are a sibling, guardian or any other family member with concerns regarding the financial well-being of your ward or family member with special needs.

Many lawyers and judges refer to a “special needs trust” as a “supplemental needs trust.” Regardless of the terminology used, a special needs trust allows you to appoint someone to safeguard your estate assets for the financial well-being and benefit of your special needs child if you are no longer able to take care of him due to mental incapacity or death. You will need to select a trusted individual to serve as the trustee of your special needs or supplemental needs trust and make sure that you discuss your concerns and your child’s needs, including the suitability of your chosen trustee with your estate planning attorney. Your estate planning attorney should review your individual circumstances and your financial expectations regarding your special needs trust documents.

The Law Office of Michael Robinson, P.C. is a member of the American Academy of Estate Planning Attorneys.