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Smart estate planning

Q&A with local attorney Tonya Palmer

Q: When thinking about estate planning, what’s the most important thing a homeowner should consider?

A: The focus when designing an estate plan for a homeowner is his/her stage of life. Estate planning is not a one-size-fits-all approach; it’s designed around each individual’s goals, lifestyle and needs. Different ages have different situations. One example is the older clients with whom I work whose goal is to protect their homes and other assets from Medicaid, should long-term care become a necessity. With Medicaid, it is such a numbers game and I look into every potential area that we can provide the asset protection the client desires, even in a crisis situation where nursing home admission is imminent. The answer is not to “give away” your assets; it’s proper planning. Giving your assets away means losing control. It’s not safe even if you trust to whom you give your assets. If that person divorces, goes bankrupt or is sued, all the money you transferred is at risk. If you transfer your home to your children, not only will it result in immediate ineligibility in a Medicaid qualification scenario, but it could also trigger a gift tax, resulting in the loss of any property tax exemption and result in your child’s spouse (the “in-laws”) inheriting your home. These things would not necessarily be a concern to someone who is in their 20s or middle-aged.

Q: What is your advice about establishing a trust? Is it right for all homeowners? What are the benefits?

A: It is entirely based on the individual. If someone is in their “forever home,” they may find one type of trust more beneficial than another. The benefits depend on the type of trust an individual wants to establish. That’s part of what makes using an attorney focusing on this area of law so important; there are so many things to consider, and each person may benefit from things another would not. The best advice I can give is to set up a consultation and discuss all your concerns, even if it is something you feel is completely trivial. You and your wishes for your trust matter.

Q: At what age should someone think about setting up a will? Should all homeowners have one?

A: I believe anyone who is of age should have a will because estate planning isn’t about how much money you have, or if you have a home, it’s about protecting what you have for those you love after you’re gone. It ensures what you have gets to the people you love, the way you want, when you want. Someone who is college-aged can use planning if something happens while they are away at school. If proper documents are not in place, their family may not be able to make medical decisions for them or access their financial accounts if an emergency arose. The biggest takeaway is, if you were to die today, are you confident everything will be taken care of the way you wanted? Estate planning is legally ensuring everything will be handled the way you want by providing sufficient instructions. Estate planning really is for everyone. It doesn’t matter if you have $4,000 or $400,000. You still have to plan for the future. Whether it’s to name a guardian for your minor children or to ensure your children don’t blow through your assets if you unexpectedly die or become disabled. Estate planning is your opportunity to provide the ultimate gift to your family, regardless of your age or income. Your family deserves the ability to grieve, not the stress of fighting one another in court.

Q: What are the top three pieces of advice you would give a new homeowner who is not familiar with the ins and outs of estate planning, trusts and/or wills?

A: One of the first things that come to mind is simply having estate planning documents in place. So often we see where someone becomes disabled, incapacitated or passes away and the home can go into foreclosure because no one can access the accounts to pay the mortgage without the necessary documents. Another piece of advice seems simple, but it would be to set up an estate plan so your family doesn’t have to follow the estate plan the State has set up for you. If an individual passes and does not have a will, the State will divide your property based on intestate law. A young couple would be another common thought when considering new homeowners. In that case, if they are engaged, purchase a home and only one of them is listed on the mortgage and deed and that one passes before they can record the marriage certificate, disaster can strike with no estate planning documents in place. The surviving partner under intestate law may not have claim to the home. The last piece of advice would be to talk through everything with an estate planning attorney. We will take every aspect into account, even if it is a bit outside the “typical” planning. So often we see where an individual did have a Will, but not every type of document was considered. If a deed does not reflect the same as a person’s wishes in their estate plan, it can cause everyone else involved a lot of extra cost and stress. Anyone who has recently purchased a home knows that’s a joyous experience, but still very stressful. A life-changing event that creates the need for your estate planning to utilize is certainly stressful on your loved ones, not to mention if not all documents are cohesive.

Estate planning is not a one-size-fits-all approach; it’s designed around each individual’s goals, lifestyle and needs.

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