>>(from luvstocraft) So am I understanding correctly that the Living Trust can help protect some of our assets--but just a Will will not do that? >> I'm sorry that I didn't pay more careful attention to some of these questions, and hope it's not too late to get these answers to luv since like her, we live in CA. First off, Living Wills are not legal in CA. The document needed is called the Durable Healthcare power of attorney. All forms since 2009 should include the POLST questions (Physician's Order for Life Sustaining Treatment). Anyone with a DHPoA prior to 2009 should Google and download this 1-page form, fill it out and give a signed copy to your doctor or HMO, ASAP. Second, as pointed out, you need to be careful about which type of Financial Power of Attorney you want. Be especially thoughtful about who is the successor agent should you **and** your spouse become mentally incapable. Make sure that all your financial records are filed properly and are easy to access in an emergency. Now, to wills vs trusts: A will MUST go through probate. This has certain advantages: a will is public record, meaning it's a lot harder (although not impossible) to commit fraud. If you don't have a large estate, there is nothing wrong with using a will. There are two kinds of personal trusts (well, there's many different kinds, but you generally need to have substantial assets to make use of them): Revocable and Irrevocable. In a revocable living trust (RLT), you or whoever is named trustee/co-trustee, own those assets and manage the trust. You can change the terms however and whenever you please. An Irrevocable trust is just that - once set up and funded with assets, it cannot be changed. The trustee is just a manager of the assets. It can't be canceled if you change your mind or your situation changes. You no longer own any of the assets in the trust. It is a permanent legal entity unto itself, until all assets are exhausted. Any trust must be funded; e.g., you must take legal steps to transfer assets to the trust. Just setting up a trust does not mean anything is inside the trust. Trusts do not go through probate. They are a method of passing assets to heirs without the costs of probate. OTOH, speaking as one who served as Executor of a simple estate, I can tell you that even a simple estate or trust takes hours and hours to settle. It is neither easy, nor simple, and when a person is grieving it is extremely exhausting. An Executor of a will gets paid a fee (and in CA, believe me that fee is earned) - but a Trustee NEVER gets paid unless payment, hourly or flat fee or percentage, is specified in the Trust....even though a Trustee can spend just as much personal time, if not more, than any Executor does, on settling an estate. Revocable Living Trusts will NOT save on taxes. They are a conveyance, a means of passing assets more efficiently in certain situations. They do not “protect” anything because that is not their intent. The only thing it will save is the court costs of filing for probate, and the mandated fees to Executor and Attorney from the assessed value of the estate. For example, my MIL has an RLT. Realistically, there was never any need for she and her (now deceased) husband to have one. They have only one son, had only one house, and modest financial assets. It made the transfer of assets to her as the surviving Trustee simpler, but then we had to have a lawyer draw up yet another trust, this time with her and her son (DH) as co-trustees. Had they had a good will drawn up instead, we could have continued with that and spent less half the amount of money it cost, by having her update a will instead of creating a new trust. In comparison, DH and I have a trust. We have no children, and our estate falls under whatever the federal estate tax limit is or is going to be. But because we have no children, our heirs are not directly related to us - and both heirs have siblings who by law would have just as much right to any inheritance. Therefore, we had our trust drawn up with specific language that excludes anyone not named in the trust. We also arranged for the Trustee to be paid on an hourly basis for work done for the estate, because we believe that's fair. I did a little research on the so-called "Medicaid trusts". These are apparently encouraged by certain lawyers who claim they will protect assets from being seized by Medicaid. There is a debate about this subject, and some lawyers say there is no current legal decision that fully supports any trust as being 'untouchable' by Medicaid. Whether this is true or not, I have no idea. A Medicaid trust is Irrevocable - once set up, you have lost all assets you transfer over. It is NOT excused from the Medicaid 5-yr look-back on asset transfers. If Medicaid does decide your trust is a fraud designed to hide assets from them, you would need a lawyer to file suit. And of course, no one should ever set up any trust, Revocable or Irrevocable, without the advice of a lawyer. Even using good forms, such as those available from Nolo Press/Berkeley, can produce a document that does not address all the issues your estate may face...if only because there are things you don't know which may be issues in the future, that the questions of a professional might have avoided. If you use a good estate attorney, they often charge a flat fee for drawing up the RLT, both PoAs, a pour-over will (VERY important) and even transferring the title to your home into the trust. Our attorney spent hours with MIL and with us, both together and separately, to ensure she had a clear picture of what we wanted. Then it was her job to create documents which would enable our wishes to be carried out, when we're no longer able to be there. I apologize for going OT. But these are critical issues that all too many Boomers have left undone for too long. HTH!

We bought LTCI last year at the ages of 49 and 51, and we're glad we did. I did not go into this with eyes half shut. I did uncountable hours of research, attended seminars, talked to people, interviewed agents, etc. I'm the type of person who doesn't allow anyone to talk me into anything - period. We bought a great policy through an A++ rated company, John Hancock. The average age one should buy LTC is 60ish - before health problems begin and the premiums are outrageous if you can even get it with certain conditions. I wasn't waiting 10 years to do so especially since our premiums would double by then even if we remain healthy...but who knows how our health will be in 10 years. Sure, we're healthy now and healthier than our parents were at this age, but no one has a crystal ball to determine how our health and at what age, will affect us. I'm not taking chances knowing DH's parents history. We have no kids or family that will care for us should we need it now or later, and to put 100% burden on the other spouse isn't fair, IMO. And even if we did have kids, who's to say they would want to interrupt their lives to care for sick parents. As cruel as this sounds, I prefer not to care for my mother as she's a difficult one now and she's relatively healthy. This LTC is piece of mind for us. While humans are living longer these days, from my research, it states that a very high percentage of people will require some kind of nursing home facility and the average time is 2.5 years. Should that time come now or later, the insurance is already there to be used. If we were to invest $$ for a rainy day to use toward this, it will take A VERY LONG TIME to match what insurance money is available to us NOW. We hope to never have to use it, but good to know it's in place if we have to, and we're lucky enough to be able to afford it. I realize many cannot. There's much to know about the various companies offering this including their ratings, how their policies work with the options & riders offered, claims stats, etc., and then choosing what is right for each individual. While most people tend to not think about LTC or discount it all together, I really think more people should learn about it and give it serious consideration. (No, I don't sell it). Frankly, IMHO, your sister is wise in thinking about her elder years that way.

I do have power of attorney for my mother, she is in a nursing home now and her house sold and all assets used to pay for the nursing home fees. There is no money left to pay for anything. At $13,000 a month the money goes quickly. Everything is gone which is why we are in the process of getting the medicaid application started. For years I tried to convince her to sell her house and move into a senior apartment, and then, if she declined further, assisted living. She refused to leave her home, and I could not force her. Eventually, there was no choice, but my sister did take her in for a few years until things got to the point where she needed 24 hr a day nursing home care. I can't speak for other elderly folks, but my parents became extremely stubborn as they aged. . We affectionately call Mom our 93 yr old toddler. I've learned a few things from this that I intend to do for my kids. I think its good advice for all parents as they approach old age: Sell my house when I can no longer take care of it. have all my important documents in one place and inform my kids where it is. take good care of my health, lose weight, stay active, keep social activities up so I can stay well and independent longer 4) Inform my kids I don't want them to take me in or assume responsibility of my home or my personal care. We will get our elder care policies so they don't have to worry about it. 5) Have a Power of attorney, will, DNR documents (already done this) My father is still in good health and mentally sharp but he also refuses to sell his house and expects us to do the work on it. But I have learned that its ok to say no, if he wants to remain in his house and has the money to pay for repairs, he is going to have to hire people to do it, we cannot do this anymore. We're tired, we aren't getting any younger either and its time to focus on our own home now. Dad refuses to discuss anything related to his aging, his funeral wishes, where and what he has, etc. I've told him do not choose me as power of attorney or executor if you do not let me know these things now. I don't want any part of trying to dig through this stuff again without any knowledge of where to begin. I told him I will leave it all to his lawyer if he doesn't give me more information. Much as these things are uncomfortable to talk about, the fact is we are all going to die, many of us will need extended care so the people we designate to take charge of these things need to have the information beforehand so they can make the right decisions. Leaving your kids in the dark until something happens is just wrong.

LifeCare have their positives and negatives. Negatives: Expensive. Be sure to find out if or how often they have raised rates on long-time residents. Facility's financial condition. It is rare but HAS happened that a facility will close down. More likely these days, is that a non-profit is bought by a for-profit corp. It's cheaper to buy capacity than build it new. New ownership can and usually will make changes to the facility as it sees fit. Existing tenants aren't going to have a say in most matters; they are basically renters. Arbitration is a standard clause in contracts. Residents and their families have little legal leverage. Make sure you thoroughly understand those nitpicky legal clauses and how they may affect you if your circumstances change (spouse dies; money issues, etc.). Make a list of what is covered and what is not. You do not want nasty financial surprises when you suddenly need Skilled Nursing or Memory Care. Your own research is important. Does the social environment fit your needs and wants? Do you like the food? What auxiliary services are provided/not provided (beauty salon, field trips, scheduled off-site transportation to shopping or doctors' appts., etc.)? What activities are offered, and do you like them? Have you toured the Skilled Nursing Care and/or Memory Units to see how the residents are treated on an everyday basis? Positives: Existing social opportunities. Isolation is more damaging than most people realize. The arrival of the mailman should not be the highlight of your day when you're older, LOL. Someone around to help 24/7. Housekeeping, maintenance, gardening, and (sometimes) laundry are done for you. We do have LTCi. Ours is sponsored by the state pension fund and therefore we have a full-time omsbudman and project care managers assigned to anyone filing a claim. Most seniorcare facilities offer us a substantial discount on both buy-in and rent because of our LTCi policies.