Aging adults often feel two different kinds of financial pressure. They may worry about running out of savings before they die. They may also worry about whether they can leave behind anything meaningful and valuable for their children, grandchildren or other loved ones.
Estate planning allows people to address both of those financial concerns simultaneously. A good estate plan lets you decide what you want to leave for the people you love and can also help ensure that you connect with the support you need as you age, like Medicaid benefits if you move into a nursing home. You can also take steps to protect your most valuable assets, like your home, from creditor claims.
Medicaid planning and asset protection planning are important steps if you want to have any property left when you die. Unless you address the possible needs for Medicaid coverage and the risks of your personal debt now, you could face claims as you age. Your loved ones could also face those claims before you die.
Your estate has to pay back all of your debt
Your financial obligations do not die with you. If there was a cosigner for any of those debts, that individual is now solely responsible for those accounts. Even if you don’t have a cosigner, the executor of your estate will need to notify your creditors about probate proceedings and pay them back with your assets.
Private creditors like hospitals and credit card companies can make claims against your state. So can Medicaid. If you don’t plan ahead to protect your assets, like your home, everything you own could end up liquidated in probate proceedings to pay your creditors or repay your Medicaid benefits.
Advance planning protects you as you age as well
Being able to qualify for Medicaid when you need it can give you peace of mind. Protecting your home and other property from creditors will make you feel secure as you grow older. Asset protection planning and Medicaid planning as part of a broader estate planning process can give you security now and help protect the legacy that you want to leave when you die.
Thinking about your future needs and the needs of your loved ones can help you create an effective and thorough estate plan.