When is the Right Time to Create an Estate Plan? Now!

A common fallacy about estate planning is that creating an estate plan is a form of planning for death.  The reality is, there is no “Right Time” to create an estate plan, because you never know when you might need it and not having one can be risky business.

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One of the most commonly believed fallacies about estate planning is that creating a plan is a form of planning for death and, as long as you are young or healthy, estate planning is not an immediate priority. Nothing could be further from the truth! As one April 20, 2014 article in the Wall Street Journal reminds readers, “There’s no time like the present to make sure all your estate-planning ducks are in a row.”

Why is this so important and so urgent? Because estate planning is much more than establishing what happens after you die; it is also about documenting a clear set of instructions for what happens if you’re still alive and cannot speak for yourself.

That’s why some estate planning needs are universal. If you are in a serious accident and suffer major injuries that prevent you from managing your affairs, or perhaps from communicating at all, you need to have the proper documents already in place that give the person you want the authority to pay your bills, manage your investments, approve needed medical procedures or even authorize the termination of life-prolonging medical care.

With no plan in place, both you and your assets could be in significant risk. With no will, your assets will be distributed at your death according to your state’s intestacy laws. These laws may give part (or all) of your wealth to an estranged relative, and will definitely give your loved ones to whom you’re not related (either by blood or marriage) absolutely nothing. With no powers of attorney in place, your family may be forced to go to court and pursue a legal guardianship or conservatorship, which can be expensive and stressful, just to make decisions on your behalf. Your doctors may be forced to continue providing you with life-extending care, even though you have no hope of recovery and such care is against your wishes, if you don’t have a living will.

So, why is estate planning important? Because it gives you the ability to take control of a great many decisions both during life and after death. And why act now? Because no one knows for certain what the future may hold, and only a proper plan can give you the assurance that, whatever tomorrow brings, you’ll be prepared and your family will be protected.

This article is published by the Legacy Assurance Plan of America and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com

Reverse Mortgages and Your Estate Plan With Legacy Assurance Plan Bradenton, Florida

What is reverse mortgage and estate plan? Legacy Assurance Plan could help you it better understand. A reverse mortgage may be the right option for some seniors but needs careful consideration before being accepted.

If you watch much TV (beyond premium channels and public broadcasting,) you’ve probably seen commercials marketing reverse mortgages to seniors. Reverse mortgages can offer real benefits to some seniors, depending on their circumstances. However, these reverse mortgages can also come with distinct risks, too. Before you make the decision to take out a reverse mortgage, you should educate yourself on all of the impacts that a reverse mortgage will have, including on your estate plan.

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A reverse mortgage can be very helpful to some seniors. Generally, advisers might suggest a reverse mortgage as a viable option for seniors who have relatively little cash but a lot of equity in their home. The money received for a reverse mortgage can be invaluable to some people. The proceeds of a reverse mortgage may help pay for in-home care, which may allow you or a loved one to avoid, or at least put off, going into a nursing home.

There are downsides, though, as it relates to your estate plan. A reverse mortgage can impact your Medicaid eligibility. Depending on the state where you live, it is possible that your state’s Medicaid agency could view the payments you receive from your reverse mortgage as income and this added “income” could put you above the threshold for continued Medicaid eligibility. Even if your state doesn’t view the payments as income, your state could view a lump-sum or the accumulation of monthly payments received as part of a reverse mortgage as assets that might take you over the allowable maximum for continued eligibility.

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Additionally, there is the scenario in which you die before you pay back the total amount you took out in your reverse mortgage. When that happens, the loan is paid back from the proceeds of the sale of your house. But what if you don’t want to sell your house or you don’t want to leave your loved ones a diminished asset? One way to deal with this is by using life insurance. Buying life insurance for the purpose of having the proceeds cover your outstanding reverse mortgage balance potentially can accomplish two goals. One, this strategy can potentially lower your death tax obligations, as your it lowers the amount of equity you have in your home, so the total amount of your taxable estate (for purposes of death taxes) is reduced by that same amount. Also, this strategy ensures that your loves ones will receive a set amount of inheritance that won’t be impacted by the fluctuations of the real estate market.

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If you’re considering a reverse mortgage, your estate planning professional can help you go over your circumstances and goals and decide if it makes sense for you.

Summary By legacy Assurance Plan: Reverse mortgages can provide clear benefits to some seniors, but also come with their own set of potential drawbacks. A reverse mortgage can help you cover some health care costs and may help you delay going into a nursing home. However, reverse mortgages could, depending on the eligibility rules observed in your state, negatively impact your Medicaid eligibility. They can also reduce the size of your estate that you leave for your loved ones, unless you plan for the payment of this debt after your death (using a vehicle such as life insurance.) Whether a reverse mortgage is right for you and your estate plan depends on the particular facts of your situation.