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Estate planning, living trust, IRAs and such


momee
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Trying to learn the ins and outs of helping elderly relatives understand the red tape and procedures is like - I don't even know.

 

Do any of you who have had to get involved in estate planning have some resources to help me learn as much as I can?  I've met with a lawyer and am more confused than I was at the beginning.

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Estate planning usually involves a series of documents. There is usually a will and it may indicate that all assets transfer to a trust at death or simply distribute the assets.  Many attorneys recommend "living trusts" which transfer all assets into a trust for the benefit of the relative now- I don't think these are necessary unless there are a huge number of assets.  A  "living will" on the other hand, is a directive for medical care and end of life decisions- totally different document, but part of most estate packages.  A general power of attorney will allow someone else to handle day to day affairs if the person becomes incompetent (kind of like being the vice president).  A health care power of attorney assigns a person to take care of health decisions if the person cannot. 

 

I would search non-profit elder care sites for information on how it all works together. 

 

These look helpful:

http://slh.lsnc.net/files/2011/05/estate-planning1.pdf

http://www.nolo.com/legal-encyclopedia/estate-planning-when-you-re-elderly-ill.html

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The size of the estate  makes a difference in the decisions you make and the documents you need.  

 

I've done this in the past, for our family, but 20 years on, we need to do it over again...different circumstances (no minor child, both of us retired) and I'm getting an estate lawyer.  I think it will be worth it ... for many reasons.  

 

 

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Reading up on it is good, but having a good lawyer who specializes in that area is really important too.

 

Re: living trusts.  It's been a while, and perhaps things differ by state, but when my mother died part of her estate was in a living trust, and part was not. The part that was could be distributed almost right away. The part that was not had to be probated, and that took time and a chunk of $$. 

 

Inherited IRAs can be very tricky with regard to distribution rules.  A lawyer who understands that and can show  you the IRS rules is a must for doing that right. 

 

 

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Second the suggestion of a good estate planning/elder care lawyer.  They are worth their weight in gold!  Also know that every state has different laws regarding probate, etc. so all because one person found it one way in their state it could be very different in another.  I have been through probate in NJ and found NH to be very different.  Also every state has different estate taxes.  With a little planning parents can leave a lot more to their kids than Uncle Sam.

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Don't know anything about estate planning, but PLEASE talk about things like Medical POA and Living Wills. Also, bring up the fact that a Living Will can be reconsidered depending on circumstances.

 

For instance:

 

If a person signs a Living Will that they want to be resuscitated when they are a fairly good health, they may change their minds when they are dealing with a terminal cancer diagnosis, living in daily pain, and facing difficult medical treatments.

 

So a Living Will doesnt have to be something that is signed once and then never reconsidered. It is okay to bring it up again for discussion depending on medical circumstances.

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