Is Your Estate Plan Effectively Preparing You For Retirement?

Estate planning accomplishes a number of important goals for individuals, families, and businesses. Having a plan is imperative, but what that looks like will be different from person to person depending on the circumstances.

Many people look at estate planning as a means to pass down assets and money earned over your lifetime. While this is true, it’s only one small piece of a much larger puzzle. An effective plan should also fulfill a number of important goals you yourself have in life.

Estate planning is not just about heirs and beneficiaries – your estate plan should be considered an integral part of your retirement plan.

Qualifying for Government Benefits in Retirement

Do you plan to cover the tens of thousands of dollars that come with long-term care in retirement, or would you rather get most (or all) of it paid for? Medicaid ensures Americans 65 and older have the funds to account for the care needed in retirement.

Nobody automatically qualifies for Medicaid, however. Your estate plan could be the key to preserving eligibility for the program. A Medicaid Asset Protection Trust (MAPT) is a form of irrevocable trust that prevents any assets or accounts held within the trust from being considered in the Medicaid qualification progress.

Medicaid has a five-year “look-back” window for qualification. If you were ineligible at any point during those five years, you will either be ineligible or face an ineligibility penalty before receiving benefits. Establishing and fully funding a MAPT at least five years before you plan to apply for Medicaid is crucial.

Reduce Estate Taxes

Part of marrying your estate and retirement plans is simple accounting. The fewer taxes you pay the more money you have available to you in retirement.

Reducing estate taxes may be as simple as maximizing your gifting, thus providing for loved ones while also lowering the overall value of your estate. High-value estates face significant tax burdens short of working with an experienced Illinois estate planning attorney to maximize this and other tax-saving measures.

Power of Attorney Designations

As we age, our bodies need continued care and attention. The same is true for our finances. We aren’t able to dictate exactly where life takes us, especially when we are reaching the latter stages of life, so having Power of Attorney designations as part of an estate plan accounts for this unpredictability.

Our chosen agent(s) will be able to make financial and medical decisions on our behalf when we are either unable, unavailable, or unwilling to do so ourselves. You can use these designations to delegate or simply as emergency orders in the event of incapacitation.

Work with an Illinois Estate Planning Attorney

The surest way to get the most out of your estate plan and, in turn, your retirement plan, will be to work closely with your estate attorney. At Velazquez Consumer Law, we care about the quality of life our clients are able to enjoy later in life. Connect with us and our team will ensure you have an effective estate plan that provides for your loved ones while providing for your retirement.

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