Elder Law and estate planning go together. Everyone has heard stories of the havoc that is caused when someone with money and property dies without a Will. It’s a reality lawyers see all the time. Not having a Will that clearly expresses your intentions and divides your assets upon death can be a recipe for family trouble.
A Will is a legal document that states your final wishes. It names the beneficiaries of your money and property (and can exclude children or other relatives who you do not want to benefit), and also names your executor, and gives other instructions, for example, regarding the care of minor children or pets.
Without a Will, the default (intestacy) provisions of state law take over, which specify who will benefit from your estate, and the court will approve an administrator. These might not be the same person or persons who you would want to benefit from your estate, or to administer it.
Of course, whether you have a Will or not, a primary concern should be: will I have an estate? Assumptions about what you might leave your spouse, children, or others can be totally upset if you need long term care and have not planned ahead. The cost of care can wipe out your entire life’s savings. Effective Elder Law planning can save all of your cash and assets if you plan early enough, or a substantial portion even if planning is done at the last minute. Typically, an effective Elder Law plan will include a trust as the main instrument of your estate plan.
Even for those clients whose estate plan is implemented by a trust, joint ownership of assets, or designated beneficiaries, a Will is still a good idea. There are a few situations that arise regularly which end up requiring court intervention (probate or administration), and in these cases it makes sense to have a Will in order to assure that your wishes are respected. These situations include:
- You might inadvertently fail to transfer assets to an intended lifetime trust, or die before the trust is funded (especially if transferring a co-op).
- Financial institutions lose beneficiary designations – it happens more often than one would like to believe. Banks get taken over, change computer systems, etc.
- A refund check is issued after the decedent’s death, and cannot be deposited without bringing and estate proceeding and opening an estate account.
- A landlord not giving access to an apartment, or a bank not allowing access to a safe deposit box.
For married couples, Wills are particularly important if Medicaid is in the picture. If, for example, the husband became ill and was receiving Medicaid nursing home care, and the wife died before him without a Will, his Medicaid benefits could be terminated. In order to avoid or minimize this problem, she should have a Will excluding him as a beneficiary of her estate. Otherwise, most or all of her assets would be distributed to him, and undo all of the Elder Law planning that was accomplished.