Pass it On: The Importance of Proper Estate Planning

Most people want to leave behind more than just memories.

They want to leave a financial legacy—a foundation that supports the people they care about even after they’re gone. But a legacy doesn’t happen by accident. Without a plan, your lifetime of savings could be lost to taxes, probate costs, or long-term care expenses.

Here’s what every family should know—and do—when it comes to preserving what you’ve built.

Start With Your Spouse

Your number one priority should be the financial well-being of your surviving spouse.

Fortunately, most of your assets titled in your name will pass automatically to your spouse upon your passingonce you pass on. But that’s not the case with non-spouse partners. If you haven’t made it official with a wedding certificate, you should immediately take steps to name your partner as a named beneficiary on financial accounts, and specify what you want them to inherit in your will.

Otherwise, depending on your state, these assets will automatically go to your closest relative. But that may not be what you want.

Second, ensure that your real estate is titled correctly, – especially if you have business partners invested in them. You want your share in the property to pass to your spouse or life partner, not to the other owners of the property.

You should discuss titling with an attorney licensed in your state. This is no place for a “do-it-yourself” approach. You need expert legal help.. .

A solid plan ensures your spouse has what they need—financially and legally—to move forward without unnecessary stress.

You Need a Will—and a Living Will

A will lets you specify “who gets what.”

Without a will, your family won’t get a say. It will be up to your state’s intestate laws. And those laws may not recognize non-spouse partners, or step-children you haven’t adopted, for example. Without a will, you may accidentally disinherit longtime stepchildren.

Or your assets could go to an estranged former spouse or child rather than to the people you want to inherit your financial legacy.

You also need a living will––also called an advance directive.

This document outlines your medical preferences if you become unable to communicate. This includes decisions around life support and end-of-life care.

These basic documents are essential. Without them, your family could face delays, expenses, and heart-wrenching decisions during already difficult times.

Protect Yourself Against Devastating Nursing Home Costs

Few people realize how quickly long-term care expenses can drain a retirement account. According to the Genworth Cost of Care study, a semi-private room in a nursing home can cost more than $100,000 per year.

Medicare doesn’t cover it. If you don’t own long-term care insurance, you’ll need to spend down your own assets to poverty level before you become eligible for Medicaid.

Without proper planning, you could be forced to spend down your assets, even sell your home, just to qualify for Medicaid.

And your state’s Medicaid recovery officials will put a lien on your house and other properties to recoup costs paid for your care before your family can inherit them.

Long-term care insurance (LTCi) helps protect your life savings and your pension against the devastating risk of long-term care costs.

As a client of MediGap Advisors, you have no-charge access to ourYour Personal Benefits Manager––the person who sent you this newsletter––is an experts on long-term care insurance. If you don’t already have coverage in place and would struggle to afford assisted living or nursing home care out-of-pocket, I encourage you to contact your PBM and schedule, and you would have trouble affording assisted living or nursing home care out-of-pocket, I encourage you to contact your PBM and set up a free appointment for a review, needs analysis, and quote.

It’s free… and your family may well thank you for it, later!

Consider Permanent (Cash Value) Life Insurance for Later in Life

Life insurance is by far the most tax-efficient way to pass on wealth.

Death benefits are generally tax-free, and the money is available in days, without going through expensive and lengthy probate courts.

While I’m a strong advocate of term insurance for young families, permanent (cash value) life insurance, such as whole life and universal life insurance, also plays an important role huge proponent of term insurance for young families, permanent (cash value) life insurance, such as whole life and universal life insurance, has an important role to play in estate planning. That’s because while term insurance is designed to expire around age 65-70, permanent insurance is designed to be in force when you actually die.

Permanent life insurance is especially valuable for older Americans. It can provide lifelong protection, pay funeral expenses, help pay estate taxes, if any, or create a legacy for children and grandchildren.

Critical Considerations for Business Owners, Farmers, or Real Estate Investors

Many business owners and farmers face a dilemma: Often, one child wants to take over the family business, farm, or properties. However, the other adult children show no interest or inclination towardsBut the other adult children don’t have any interest or propensity for it.

Life insurance can help “equalize” the estate, —providing liquid cash to one heir while another inherits the family property, for example. The cash allows the heir who wants to take over the business to “buy out” the shares of theirhis or her siblings.

This is better than trying to divide businesses among heirs who can’t or won’t run them, or being forced to sell a business at fire sale prices to split up the inheritance.

But it does take planning. And the sooner you can get life insurance in place to fund the sibling buyouts, the more affordable it will be, and the more options you’ll have. 

Trust Planning

If you have young children, a special-needs loved one, or a family member who struggles with financial stabilityspecial needs loved one, or a family member who struggles with money, a trust is essential.

Trusts let you control how and when your assets are distributed. They can protect beneficiaries from poor financial decisions, predators, and even future divorces or lawsuits.

A trust also keeps your affairs private. And in some cases, they can reduce or eliminate estate taxes by getting assets out of your name. 

Review Everything with an Expert

Estate planning isn’t just about having a will—it’s about creating a coordinated strategy to protect your assets and loved ones. Laws change. So do family dynamics. It’s a good idea to review your plan every few years, especially after major life events.

A Personal Benefits Manager (PBM) can walk you through your options, answer your questions, and help you make the right choices for your family’s future.

Your Estate Planning Checklist

Use this list as a starting point. Make an appointment with a qualified estate planning attorney.

•  Create or update your last will and testament
•  Create or update your living will or advance directive
•  Assign powers of attorney (medical and financial)
•  Review and update beneficiaries on all financial accounts
•  Consider long-term care insurance
•  Get permanent life insurance in place, if possible
•  Plan for estate equalization if assets aren’t easily divided
•  Set up a trust, and identify beneficiaries and trustees
•  Make sure your spouse is protected and informed
•  Review your plan regularly with a financial or estate planning expert

Only an attorney is qualified to write trust documents, power of attorney documents, and advise you on the proper titling of real property.

Also, make an appointment with your PBM, who can help you get any needed insurance in force, and help you ensure your named beneficiaries on life insurance and annuities are correct and reflected in your policy documents.

These processes only take a few hours to complete, in most cases. But estate planning may save your family many thousands of dollars, and prevent a lot of stress and conflict.

Stay tuned for the next edition of the Health and Wealth newsletter, and have a fantastic month!

Here’s to your health and wealth,

Wiley P. Long, III
President – MediGap Advisors

Comfort at Life’s End: A Medicare Hospice Guide