PLAN YOUR AFFAIRS TODAY

Orphaned Elders--a growing problem to understand and avoid!

Planning your affairs can help you avoid becoming one of the in 1 in 5 adults 65 and older who are -- or are at risk of being -- identified as an "elder orphans." Being identified as an elder orphan can mean that a very difficult situation is brewing, unless there is someone to explain the reality of being alone and offer some coping strategies. An "elder orphan" knows what it means to be alone, with no family available to help with their caregiving needs. According to the AARP, 23% of older adults will eventually be without a family caregiver. An unknown number of older adults will be added to this group when they are estranged from their adult children. As a result, the number of elders suffering from depression, anxiety and loneliness is sharply increasing and poses significant physical, mental and financial risks.

Too many baby boomers fail to take the time to plan for old age. The reality is, time does not care if we need assistance wherever we are in life, including if we are in the end stages of life (and we cannot die alone unless we want someone else to clean up after us!). Each month we all get another 30 days older and 30 days further from creating essential estate plans. By 2030, all of the current "baby boom" generation will be over 65--and less than half are expected to have sufficient estate plans and documents in place. Why?

I think it is caused by the "Peter Pan" Syndrome: Never get old, never need help, and never become a long-term resident in a nursing home! It is an ostrich-like mindset--with procrastinated thinking--interfering with creating sufficient estate documents. In fact, family members of elder adults (baby boomers) who have a caregiver available often find themselves needing to file formal petitions in Orphan's Court seeking guardianship when a power of attorney would have equally served your needs at a fraction of the cost!).

Failing to plan can be financially damaging and causes financial insecurity. Planning for living a long life, living with injury and living with incompetency often stirs up uncomfortable feelings. There are considerable legal and tax implications for you and your family, your livelihood, your estate and your intended beneficiaries. Failing to plan can be financially devastating and cause irrevocable financial insecurity.

Plan to age gracefully instead. Consider your physical, emotional and spiritual health and needs, and what it will take for you to feel content when you are 93 years old. If you are or become an Elder Orphan, remember how common it is to need assistance with activities of daily living (cooking food, doing laundry, showering, cleaning, shopping, etc.). Plan on creating a committee of your friends who can help. Work on making physical adaptations to your home, like including natural light, gardening, and finding a comfortable living space to live a balanced and healthy long life. We offer check lists to help you consider possible future needs and plan ahead! (Contact Carole Hendrick at carole@attorneyhendrick.com)

Planning ahead includes planning for your own incapacity as well as planning on what your family will do when it is your time to go. Your Will is your last say about anything and everything regarding what to do with your property and other things about you. It is your legal declaration of your wishes regarding the disposition of your belongings to be performed after your death. It often includes a statement about your wishes regarding the disposition of your body in the event you were able to donate organs or donate your body to science. It is a private document until it gets filed with your County Register of Wills Office for "probate." Upon acceptance into the "probate," or the legal administration of your estate, your Will becomes a public document. A Trust is an alternative to a Will--and assets in a Trust avoid probate. A Trust is a very useful tool for planning when you have a prior marriage and/or children from a prior marriage [more on Trusts later].

Your Will is an important legal document, regardless of the value of your estate. If you die without a Will, your property will be distributed in accordance with Pennsylvania’s Intestate Laws. The administration required to distribute your property will be through a court appointed estate administrator–which may or may not be a member of your family or someone you know. If you have no relatives (or your relatives cannot be found) the State will get your property. Dying without a Will can, and most likely will, lead to the distribution of your property in ways you never intended, be more costly in terms of fees and costs and create added emotional strain to your survivors.

Keep in mind that not all assets can be transferred through your Will--which can be very important for your estate plan. Property that is titled as “tenancy by the entireties” or “joint tenancy with right of survivorship” is an asset that is owned by more than one owner and cannot be transferred through a Will. The property will automatically become the property of the surviving owner. Additionally, bank accounts, securities (stocks and bonds), life insurance policies or retirement accounts with a named beneficiary will pass to the named beneficiary and not through your Will. Educate yourself about your assets and remain engaged in knowing about your financial health--with or without a Power of Attorney.

Failing to plan can be financially devastating. At minimum, WRITE YOURSELF A LETTER AND WRITE YOUR WISHES DOWN. Writing out your wishes can be extremely helpful and get you started. The best part is that you will have created something in writing that may help your family one day, and you completed your first step in this important process! The next step will be to contact Carole Hendrick at 610-761-6992 to make a legally enforceable Last Will and Testament or Trust.

Contact an attorney today to assist you in preparing your important estate documents.

Schedule an appointment with Carole Hendrick to discuss your Estate Documents (your Last Will and Testament, Financial Power of Attorney and Medical Power of Attorney/Advanced Directive). about the connection between health insurance, long term nursing care and estate and medicaid planning.

FEDERAL ESTATE TAX CONCERNS

Married couples with estates large enough to warrant concern for the assessment of federal estate taxes should plan to take advantage of the portability of current federal estate and gift tax exclusion of over $36 Million per married couple.

Planning for the estate tax can include creating a Trust so that each spouse’s estate stays under the estate tax exemption threshold. The estate tax exemption has been the source of great political debate and was increased in 2017 to $10M for an individual ($20 M per married couple) for estates established after 2017. In 2024, the exemption increases to $18,000,000.00 (over $36 M per married couple).

IMPORTANT NOTE: The current federal estate tax exemption is scheduled to sunset on December 31, 2025. The tax exemption will be reduced to $5M per individual ($10 M per couple). Adjusted for inflation, the exemption is expected to be reduced to $7 M per individual ($14 M per couple) unless Congress acts to modify the current tax law. Contact Carole Hendrick immediately for more information.