Elder Law Update – May 2009

“Change You Had Better Believe In”

“The only constant is change, inevitable change, continuing change that is the dominant factor in society today. No sensible decision can be made any longer without taking into account not only the world as it is but the world as it will be.”

No, this was not President Obama stating this, but rather this quote is attributed toIsaac Asimov who died in 1992. This quote illustrates that as we live longer, as our family changes and our needs change, as the law changes, we too must take action to change.

All of our clients are now living in the present and the present has storm clouds on the horizon. This requires our clients to think again. The documents that you created for estate planning purposes when you were 65 may no longer serve the same purpose and worse yet could disadvantageous to you as you move on to possible long-term care.

SAMPLE CASE STUDY:

A woman came into our office and her documents were created roughly 10 years ago by another attorney. Her husband has recently died. The couple back in 1999 created two revocable living trusts, one for each of them. This was a good plan at the time and made perfect sense. The goal at the time was to shelter their estate from estate taxes and avoid probate. At that time, their combined estate was $1 million but the estate tax laws only allowed them to shelter $600,000. So instead of paying estate taxes, they prepared a trust designed to allow each them to shelter $600,000 so that no estate taxes will be paid.

This was marvelous planning at that time, but now…

10 years later, the woman’s husband is deceased, and the surviving widow is now 9 years older and has chronic health issues. Also, there have been tremendous changes in the estate tax laws since she originally did her documents. Each U.S. citizen can now shelter $3.5 million in assets before any estate taxes are due. So the same $1 million in assets are sheltered from estate taxes but over half of those assets (approximately $500,000) are in her husband’s trust. The husband’s trust restricts how wife can use these assets! She cannot change the beneficiaries and the trust not only does not serve her purpose but is now becoming a problem as we look at planning for long term care.

The woman’s Powers of Attorney are no longer adequate. They do not contain all of the tools that we routinely insert in the Powers of Attorney in order to make them effective for any situation involving Long Term Care.

The Question for the Immediate Future:

Have you planned for the issues and costs that will arise in connection with long-term care, either in your own home or at a skilled facility?

Please recall that the greatest threat to most Americans is the cost on long-term convalescent care. Therefore, we urge you to get an update of your estate plan and take into consideration elder law issues and long-term care issues. The Medicaid laws have changed in many states and will shortly be changing in Illinois. It is best to obtain all of the tools necessary through an updated estate plan, long-term care plan and updated Power of Attorney while you are healthy and can deal with these issues.

Our firm wants you to have the most updated and well written documents available so that you and your family can tackle every situation that will arise as more changes come. And come they will! Never doubt it!

This is a Positive Message

I hope you will take this communication as a positive message. In this update we are trying to inform you and the professionals that serve you that there are many steps that can be taken to protect you and your family as well as your assets. If we provide for change we can create a better future for yourselves with more control and thereby provide you with greater peace of mind.

You have our best wishes!

P.S. Also, don’t miss our workshop: “The Elder Care Journey – How to Get Financial Assistance for your Nursing Home Care…Without Selling your Home or Leaving your Family Without a Dime” set for the following dates. Please contact our office at (847) 563-4887 to register.

May 18, 2009 at 6:30 PM

June 11, 2009 at 4:00 PM

June 23, 2009 at 6:30 PM

July 9, 2009 at 4:00 PM

Call (847) 292 1220 to make a reservation in our training room.

– You don’t want to miss this workshop!

Long Term Care Planning Attorneys

The “3 Phase” Lawyers

Legal Counsel Assisting You in the 3 Phases of Your Life:

– Maturing Years – Will, Trust, Taxes, and Asset Protection

– Senior Years – Long Term Care and Nursing Home Protection

– Post Death Years – Estate, Probate, and Trust Administration

“Educate to Motivate”

Anthony B. Ferraro

Attorney-CPA

The Law Offices of Anthony B. Ferraro, LLC

The Estate & Trust, Elder and Asset Protection Law Firm

Columbia Centre I

5600 N. River Road, Suite 764

Rosemont, IL 60018

PH (847) 563-4887

FAX (847) 292-1221

Websitehttp://abferrarolaw.com/

Emailabferraro@abferrarolaw.com

Much of what’s in this update is based on the work of a prominent Florida colleague.

Any tax advice contained in this communication was not intended to be used, and cannot be used, by you (or any other taxpayer) to avoid penalties under the Internal Revenue Code.

The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material. If the context requires, please consider this letter and the enclosed literature to be Advertising Materials.

This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice. You should never attempt Medicaid planning, Estate Planning, Probate or Trust Administration without the advice of competent legal counsel.