By Evan H. Farr, CELA
Why is it so important for newlyweds to address critical estate planning matters?
In the simplest of terms: life is full of surprises and it can save a lot of money. When love is in the air, it is easy to overlook the devastating consequences of unexpected events such as illnesses, accidents, or tragedy. If no plan exists, family feuds can arise and cost thousands of dollars. The necessity of an estate plan for newlyweds with children is even more important.
Marriage is a romantic notion but carries with it important consequences as well. As unromantic as it may seem to discuss estate planning now is the time if you are a newlywed. The good news is, after these items have been discussed and a plan is in place, it is likely that a huge burden will be lifted off the couple’s shoulders, and an added layer of security will strengthen the union.
Younger Couples Often Take Advantage of a Revocable Living Trust
Contrary to what you may have heard, a “Will” is not the only document – and certainly not the preferable document – to serve as a primary estate planning tool. A Revocable Living Trust has several advantages: it avoids the probate process; it isn’t public; and there are fewer expenses and delays since the probate process is not necessary. A Revocable Living Trust enables a couple to plan estate matters with efficiency and without sacrificing control.
Some Older Couples Prefer a Living Trust Plus™ to Protect Assets from Catastrophic Expenses Associated with Long-Term Care
A Revocable Living Trust protects assets from the expenses of probate, is private, but does not protect assets from the expenses of long-term care while you or your spouse is alive. Since the settlor(s) (creators) of a Revocable Living Trust maintain control and can reach the assets placed in the trust, so can creditors.
Since long-term care insurance is often very expensive (and in some cases, difficult to qualify for), another solution can handle this problem. A Living Trust Plus™ protects assets from the expenses and difficulties of probate as well as the expenses of long-term care. Not only that, but it also protects assets from lawsuits and a multitude of other financial risks.
70% of Americans who live to age 65 will need long-term care at some time in their lives. 50% of all couples and 70% of single persons become impoverished within one year after entering a nursing home. The best estate plan in the world is useless if you wind up in a nursing home, spending all of your money on long-term care.
Some Documents are Important to All Couples
Many people think of a premarital agreement as only dealing with the consequences of divorce. However, the most important reason for a premarital agreement is to determine how the estate will be distributed upon death of a spouse during the marriage.
If you remember the Terri Schiavo case in the headlines several years ago — family members and spouses can fervently dispute an injured person’s intent to live. An Advance Medical Directive can solve these problems. Generally, this document is incorporated into a Medical Power of Attorney.
The Financial Power of Attorney is an essential tool in the event that, due to age, illness, or injury, one is unable to carry on legal and financial affairs. Having a Financial Power of Attorney will generally avoid the need to go through the time consuming, expensive, and publicly embarrassing process whereby someone has to go to court to have that person declared mentally or physically incompetent.
Wedding season is upon us; if you or a family member will be tying the knot this season, then you are aware of the flawless planning required to pull off a successful wedding. It’s an important day, and undoubtedly worth all the effort. But as special as that day may be, proper estate planning lasts a lifetime.
You can schedule a meeting or sign up for a seminar with Mr. Farr by calling 703-691-1888, or online via www.farrlawfirm. The Farr Law Firm is located at 10640 Main St., Suite 200, Fairfax, Va.
Evan H. Farr, is one of the leading Elder Law and Special Needs Planning Attorneys in Virginia and
top Medicaid Asset Protection experts in the U.S.
Evan has more than 23 years of experience creating, updating and modifying detailed and complex trusts to plan for complicated circumstances, and dedicates a large part of his practice to planning for special needs families. Virginia has no procedure for approving certifying