Comprehensive Estate Planning and Long-Term Care: Insights from Libertas Wealth and Baron Law

Estate planning and long-term care are crucial aspects of financial security that can often be overlooked. Adam Koós of Libertas Wealth Management Group and Dan Baron of Baron Law LLC teamed up to deliver an informative seminar discussing the importance of estate planning, how to avoid probate, and strategies for protecting assets from long-term care costs. This blog post summarizes their key insights.

Who Are the Experts?

Libertas Wealth Management Group, led by Adam Koós, is a fee-only financial planning and investment management firm that focuses on fiduciary services, business transitions, and financial planning.

Baron Law LLC, founded by Dan Baron, specializes in estate planning, elder law, probate, and business succession. With years of experience, Dan provides expert guidance in helping clients plan their legacies while securing their assets.

Why Estate Planning Matters

Estate planning is essential to ensure your wishes are fulfilled, and your family avoids the complex, lengthy, and costly probate process. Without proper planning, a significant portion of your estate could be lost to taxes and legal fees. Dan highlighted the cases of celebrities like Elvis Presley, who lost 73% of his estate due to poor planning, demonstrating how important it is to take action early.

The three main reasons why estate planning is critical are:

• Avoiding probate: Probate can take months or even years, costing families time, money, and stress.
• Minimizing taxes: Proper planning ensures that more of your estate goes to your loved ones and less to the government.
• Protecting assets from long-term care: Nursing homes and long-term care are expensive, and failing to plan for these costs can quickly drain an estate.

Different Levels of Planning

Adam and Dan outlined three levels of estate planning that can be tailored to your specific needs:

• Basic Planning: This includes essential documents like a will, healthcare directives, and financial powers of attorney. Everyone, no matter their age or wealth, should have these documents in place.
• Revocable Trust Planning: For individuals with more substantial assets or dependents, a revocable trust helps avoid probate and provides better control over how and when assets are distributed.
• Long-Term Care Planning: As people live longer, planning for long-term care is essential to avoid depleting your estate. This type of planning helps protect your assets from being consumed by nursing home costs.

Avoiding Probate with Trusts and Powers of Attorney

Dan stressed the importance of avoiding probate—a costly and time-consuming court process that settles an estate. A revocable trust can help bypass probate entirely while ensuring your assets are distributed according to your wishes. Trusts also allow you to protect your beneficiaries from life events such as divorce or financial irresponsibility.

In addition to a trust, it’s crucial to establish powers of attorney for financial and healthcare decisions. This allows someone you trust to manage your affairs if you become incapacitated. Dan shared a real-life example of a family that was unable to make medical decisions for a loved one because they hadn’t established a healthcare power of attorney.

Protecting Assets from Long-Term Care Costs

The cost of long-term care, particularly nursing home expenses, can be staggering, with the average nursing home being over $114,000 per year. Dan explained that 60% of Americans will require long-term care, and without proper planning, families may be forced to “spend down” their assets until they qualify for Medicaid.

An irrevocable trust can be an effective tool to protect assets from being drained by long-term care costs. By placing a home or other significant assets into an irrevocable trust, individuals can shield those assets from Medicaid liens, preserving their estate for their beneficiaries.

Revocable vs. Irrevocable Trusts: What’s the Difference?

Dan discussed the key differences between revocable and irrevocable trusts. A revocable trust allows the grantor to maintain control over their assets, with the flexibility to amend the trust as needed. It’s an excellent tool for avoiding probate and ensuring assets are distributed according to your wishes.

On the other hand, an irrevocable trust is primarily used to protect assets from long-term care costs. Once assets are placed into an irrevocable trust, they cannot be easily accessed or changed. However, this trust ensures that Medicaid cannot claim those assets to cover nursing home costs, making it a powerful tool for those concerned about healthcare expenses.

Combining Financial Planning and Legal Strategies

Adam emphasized that a successful estate plan often combines financial planning with legal strategies. For example, long-term care insurance, used in conjunction with trusts and estate planning, can significantly reduce the burden on a family’s finances. By working with financial advisors and estate attorneys, you can create a comprehensive plan that ensures your assets are protected, and your loved ones are cared for.

Conclusion

Estate planning is essential at every stage of life. Whether you’re just starting out or nearing retirement, it’s never too early or too late to begin planning. From basic wills and powers of attorney to advanced long-term care strategies and trusts, the team at Libertas Wealth Management Group and Baron Law can help you navigate the complexities of estate planning.

For personalized advice or to schedule a consultation, visit LibertasWealth.com or BaronLawColumbus.com to learn more.