Paul O. Dillon, Attorney at Law

Who’s On Your Estate Planning Team?

Figuring out when to retire is one of the biggest decisions people make. Engaging with trusted professionals can help you make the best decision for your circumstances. To be sure you’re fully prepared, an aptly-titled article from Kiplinger recommends “The Six People You Need to Talk to Before Retiring—and the Best Questions to Ask.”

A financial planner will help clarify long-term wishes and goals. By working with a financial advisor early on, you’ll have someone to develop a plan for the lifestyle you want in retirement and understand how to get there. When you’re closer to retirement, they’ll help button down your plan and help you make realistic decisions.

An experienced estate planning attorney will ensure that your estate is prepared correctly and your legal affairs are in order, with protection in place if you become incapacitated and after you’ve passed. Even if you don’t expect to leave significant assets to heirs, your family will appreciate your having an estate plan so they aren’t faced with the stressful challenges and costly problems occurring when there is no will. The estate planning attorney will discuss whether you need a trust to protect assets and smoothly transfer assets to beneficiaries.

You’ll also want Power of Attorney and Health Care Proxy documents created specifically to your wishes. These documents allow a person you choose to take care of financial and health matters if you cannot speak on your own behalf. Talk with the estate planning attorney about ensuring that assets are distributed according to your wishes and minimizing estate taxes for heirs.

An insurance broker will help with risk management before and after retirement. They can help with the options for Medicare and health insurance coverage, which can be overwhelming once you leave an employer’s plan. Talk with an insurance agent about long-term care costs and what policies are available. You may need to purchase a hybrid life insurance plan to obtain long-term care insurance. However, long-term care costs are exorbitant, so you should have an LTC policy if possible.

Most people don’t know about working with a senior living advisor. However, they can be invaluable to enhancing the quality of your life in retirement. They help people identify a wide variety of tools and services. For instance, many new tech tools are making it safer for seniors to stay in their homes, local services through various agencies and longevity care options to explore.

Social Security advisors add another layer of knowledge to retirement planning. A Social Security advisor will help determine the best time to take benefits based on your financial situation. There’s more than your age to consider. Death of a spouse, divorce, chronic conditions and disability should be considered when deciding on the best time to take benefits.

Retirees need to have a CPA on their team as well. Balancing withdrawals from tax-advantaged accounts like IRAs or pensions, Social Security benefits, and withdrawals from investment accounts must be planned with taxes in mind. A CPA will help you create a plan for cash flow in retirement.

Americans don’t like to talk about death or money. However, when preparing for retirement, these subjects must be discussed to create a good plan. When you’ve identified your team, don’t hold back. The more information you share with them, the better they can help prepare for an enjoyable retirement.

Reference: Kiplinger (Feb. 27, 2025) “The Six People You Need to Talk to Before Retiring—and the Best Questions to Ask”

Do I Need Estate and Retirement Plans If I Don’t Have Kids?

If you have children, you may not want to depend on them for financial help as you age. However, if it becomes necessary, at least it’s an option. However, if you are one of roughly twenty-three percent of adults in their 50s and twenty-two percent of people in their 60s who never had children, your retirement and estate planning needs to be different.

A recent article from AARP, “How to Plan for Retirement When You Don’t Have Kids,” explains there’s no guarantee, and even if you have children, you’ll need estate and retirement plans.

Having a support team is mission critical. This means having someone who will be able to deal with money and health matters if you can’t because of physical disability or cognitive decline. Think about who is in your extended family or close circle of trusted friends who might serve as your power of attorney or healthcare proxy. Ideally, name someone in relatively good health, possibly younger than you, who lives nearby. Child-free people often have strong bonds with nieces or nephews who are good candidates to be potential caregivers.

An alternative is finding an aging life care professional, sometimes known as a geriatric care manager, to help address health, financial and housing concerns as well as coordinate caregiving and related services for you.

Don’t wait until you need help. Talk with prospective candidates now and meet with an estate planning attorney to start putting plans in motion.

You’ll also want to plan for the possibility of long-term care. The cost of these policies increases as you age, so buying them in your 30s or 40s is ideal. A private room in a nursing home can easily cost as much as $100,000 a year, which can rapidly deplete a nest egg.

Estate planning is different for child-free people. While you may have more disposable income because of not having the financial obligations of children, you may also feel it’s less important to have a legacy. However, you’ll still want a voice in where your assets go after your death.

If you don’t have children and you don’t have a will, the laws of your state will dictate who receives your assets. If you’re passionate about an organization, it won’t receive anything. However, your estranged cousin who lives thousands of miles away and is next-of-kin may inherit your entire estate. If you have ideas about where your assets should go, you’ll want a will.

Creating an estate plan with an experienced estate planning attorney is important for those without and with children. Make an appointment and get this part of your life settled, so you can enjoy your retirement without worry.

Reference: AARP (March 3, 2025) “How to Plan for Retirement When You Don’t Have Kids”

Living Your Best Life Solo? You Still Need an Estate Plan

Whether relying on informal networks of “found” family, trusted friends, or professionals, solo agers must plan for the inevitable aging events. A recent article, “Solo Aging: Planning for Your Best Life,” from The National Law Journal, shares the details.

Most importantly, decisions about health care and end-of-life care need to be documented as part of your estate plan, and a person you trust implicitly needs to be named in the role of your healthcare proxy. You’ll need to make sure they are comfortable in this role and willing to enact your wishes, even if they disagree with them. They will also need to have access to the estate planning documents needed, including a Healthcare Power of Attorney, Living Will, HIPAA Release and any other documents your state may require.

You’ll also want to have a Power of Attorney prepared by an experienced estate planning attorney, naming a primary and a secondary person to manage your financial and legal life if you become incapacitated. If your candidates are around the same age as you, remember they may not be able to act when you need them to, so, if possible, name younger people to serve if they cannot.

Think beyond the basics. Depending upon where you live, you may want to have a POLST (Practitioner Order on Life-Sustaining Treatment) or MOLST (Medical Orders for Life-Sustaining Treatment) to state your wishes regarding life-sustaining treatment. Some people do not wish to have CPR performed on them in the event of a cardiac arrest and have a DNR (Do Not Resuscitate) document.

You’ll want to have a financial care plan to address emergencies. Seniors 65 and older are nearly 70% likely to need some long-term care in the next two or three decades of their life. If you don’t already own a Long-Term Care insurance policy, it’s time to consider whether you can purchase one. These are now often sold as part of a life insurance policy.

A last will and testament is needed to direct the disposition of your possessions after you die. If you don’t have one, your state’s laws will govern who receives your assets. Even if you have a long-standing relationship with a partner or best friend, they have no legal rights to inherit your property. A distant relative may be located by the court and inherit everything you own instead.

A last will is used to name an executor to manage your estate. This person will be responsible for more than distributing your assets. They are also tasked with gathering information about financial accounts, applying for a tax ID number for your estate bank account, gathering assets and placing them into the estate bank account, paying your final taxes, notifying Social Security of your passing, and filing an estate tax return.

Today’s estate plan includes planning for digital assets, so your social media accounts, emails, online photos and videos, gaming, subscriptions, cryptocurrency, and all other digital accounts are managed.

For the solo ager, having an estate plan protects you while you are living and protects your estate after you have passed. It takes some extra steps when compared to the planning done by married people. However, the peace of mind of expressing your wishes is the same, and you deserve this.

Reference: The National Law Journal (Jan. 10, 2025) “Solo Aging: Planning for Your Best Life”

Three Key Steps for Estate Planning When You Don’t Have Children

In many ways, estate planning is relatively simple for people who have children. They expect their adult children to be involved in their care as they age and are usually named beneficiaries of their wills. For those who don’t have children, according to a recent article from The Wall Street Journal, “Estate-Planning Priorities for People Without Children,” estate planning becomes a bit more complicated.

When there are no children, seniors need to face serious questions to prepare for aging, from who will be in charge if I become sick to who is going to be in charge of my funeral. There are three essential matters that single people without children need to address.

Plan for Long-Term Care. One study determined that the average 65-year-old will need about $150,000 for healthcare during retirement. For people with no children, long-term care insurance is something to purchase in mid-life, starting around 40 years old. If no next of kin is available to provide care, the policy can cover some of the costs of home care or care in a nursing facility.

Fewer companies sell long-term insurance today than in the past. However, policies are still available. Many are sold as hybrid policies, incorporating life insurance and long-term care coverage. Others allow policy owners to take out at least part of the money contributed as cash. Some even have a death benefit. Others have an inflation rider to protect against rising costs.

Determine who you can count on for help. Without children, people generally turn to their spouses if they have one, siblings, nieces, or nephews to take on roles like Health Care Proxy or Durable Financial Power of Attorney. The people chosen for these roles can also be friends as long as they are reliable and trustworthy.

If no family members are available, consider a friend or neighbor, preferably someone younger. Often single agers name other single agers for important roles, which leaves them all vulnerable to the possibility of disability or death of their trusted decision makers. Other options include doctors, estate planning attorneys, financial advisers, or a social worker to serve as healthcare proxies. A bill-paying service might be in an excellent position to serve as a Durable POA as long as the relationship is established before it’s needed and the service is ethical.

Power of Attorney and many similar estate planning documents are state-specific, so meet with an estate planning attorney in your state to be sure you have the documents you need and that they are valid. Discuss the roles of the people you pick to eliminate any surprises. A secondary person should consistently be named if the primary POA is unavailable or chooses not to take on the role when the time comes.

Make the executor’s life easier with detailed preparations. This applies to people with children, as well as childless people. Check your beneficiary designations on financial accounts, including life insurance, investments and retirement funds. Write down your wishes for funerals or other types of memorial services. Have an estate planning attorney create a will and a trust, if appropriate, and tell the person you’ve chosen as executor where these documents can be found. Don’t make a difficult job harder by making them search through paper files and your computer to figure out your estate.

Your estate planning attorney will be able to provide guidance about how to address the issues accompanying a child-free life. These extra steps will give you considerable peace of mind.

Reference: The Wall Street Journal (Nov. 12, 2024) “Estate-Planning Priorities for People Without Children”

It’s Not Too Soon for Generation X to Start Estate Planning

Adults born between 1965 and 1980 are often called the “sandwich generation” as they sometimes support older children who are still figuring out who they want to be when they grow up and caring for aging parents. While retirement may feel far away, says a recent article from Kiplinger, “Come as You Are: Wealth Management for Gen X,” it’s on the horizon, and planning for the future should start now.

Some of the tools used for retirement planning include 401(k) plans, which are tax-deferred plans from an employer. If your employer offers matching funds, try to contribute enough to take advantage of the match. You can also use a personal IRA to make tax-free annual contributions.

With changes from the SECURE 2.0 Act, you can open and contribute to a 529 College Savings Account and then roll a portion of unused funds into a Roth IRA once the account has been opened for 15 years and the funds have been in the account for at least five years. There are rollover limits, but this might be a good fit for retirement savings. Commonly, 529 funds are used for various educational purposes, so even if your children are past college, your grandchildren might use them for private school, not just college.

The one constant in life is change, and estate planning documents created when your children were little need to be reviewed and possibly updated. If the last time you thought about your will was when your adult children were born, you should schedule a review with your estate planning attorney. Changes like marriage, divorce, death, financial ups and downs and changes in the tax law all call for updates to wills.

If you don’t have long-term care insurance, now is the time, while you’re still relatively young and healthy enough to be able to buy it. Insurance companies now offer hybrid policies combining life insurance with a long-term care insurance policy rider.

Digital assets are a relatively new asset class requiring estate planning. Speak with your estate planning attorney to be sure your estate plan documents reflect your digital life. If you are active on social media, investing in cryptocurrency, or own an online business, you have digital assets and need to protect them.

Be proactive about estate planning to protect yourself now and your loved ones after you’ve passed. Just as retirement is on the horizon, so are the inevitable events of aging. Make an appointment to see an estate planning attorney to learn your needs, now and in the future.

Reference: Kiplinger (Oct. 7, 2024) “Come as You Are: Wealth Management for Gen X”

What Is Needed for End-of-Life Planning?

Becoming incapacitated or dying without planning isn’t uncommon. Nevertheless, it is harmful to loved ones who are left to address the legal and financial aspects at the same time they are experiencing the grief of loss. What needs to happen is addressed in an article from Twin Cities Pioneer Press, “Your Money: A balanced approach to end-of-life planning.”

End-of-life care is expensive. Costs rise as the person moves through the different stages of illness or age. Medicare doesn’t cover long-term nursing care in a facility or at home, so resources without planned protection will rapidly be exhausted. An estate planning attorney can help the family prepare for these costs, but only when planning takes place in advance.

Once incapacitated, people cannot legally sign and execute legal documents. If the family hasn’t arranged for a Power of Attorney or Medical Proxy to be created while the person is still legally able, the family may be faced with the additional expense of going to court to petition for guardianship and/or conservatorship.

There are five basic estate planning documents to be prepared. While every adult should have these documents, they become more critical when someone is closer to passing.

Last will and testament. A will directs how you want your assets to be distributed upon your passing. It may include personal property, real estate, jewelry, family heirlooms and any other material goods. Note the will becomes a public document when the estate goes through probate, so don’t include any account numbers or information you don’t want to read by others.

Healthcare directives. Privacy laws are strict, and healthcare providers are limited in what they can discuss with spouses and children if the right documents are not in place. A Medical Power of Attorney or Healthcare Proxy is needed for family members to be involved in medical decisions. A HIPAA Release Form should be created to access health care and health insurance records.

Many accounts, including bank and investment accounts, IRAs, SEPs and life insurance policies, have beneficiary designations, where a person or persons are named to receive the asset upon the original owner's death. Make sure these are up to date to reflect the owner’s wishes.

Trusts take assets out of an estate for tax and wealth transfer purposes. The person creating the trust dictates how and when the beneficiaries should receive assets. Distributions can occur over an extended period or when certain conditions are met.

Meet with an experienced estate planning attorney if you or a loved one is ill and may be approaching the end of life. Putting an estate plan in place ensures that wishes are fulfilled and spares the family from having to guess what a loved one would have wanted in their final days.

Reference: Twin Cities Pioneer Press (Oct. 12, 2024) “Your Money: A balanced approach to end-of-life planning”

Should I Give My Kid Their Inheritance Before I Die?

Some wealthy people have publicly declared their intention to give away their wealth before they die to see their philanthropy's impact. However, these people usually don’t have to worry about making ends meet, unexpected medical bills, or expensive home repairs. A recent article, “How to Give an Inheritance While You’re Alive,” from Kiplinger, agrees that more than half of Americans in their 60s will need long-term care services at some point. Don’t rush to give away your kid’s inheritance just yet.

For most people, the solution is transferring wealth through estate planning, using a last will and testament. You won’t need the assets after death; your loved ones will be grateful for the bequest.

However, there are some downsides to hanging on to all of your assets while you’re living. If you’re lucky enough to live into your nineties, your “kids” may be in their sixties or seventies when you die. Their need for help with a deposit to buy a home will be long past.

It’s heart-warming to be able to help your family when they can use the help. You get to see how your hard work has helped the next generation. If you’re involved in charitable causes, a donation while you are living allows you to see the impact of your own giving.

Giving with warm hands or while living isn’t possible for everyone. If you think it might be possible, start by crunching the numbers. How much can you really afford to give away? You’ll need to be very intentional about planning. Just deciding to cut back on spending won’t be enough.

Your estate planning attorney may talk with you about using trusts. Creating and funding a trust means lowering your taxable estate, creating more wealth to pass onto heirs and, if you wish, having the trust distribute assets while you’re living. If you use a living trust, you will be able to change the terms whenever you want. Therefore, if it becomes clear you will need the money, you have access to it.

You’ll also need to determine if you have enough funds to pay for long-term care or if you need to begin planning for Medicaid eligibility. A living trust is countable as an asset for Medicaid. However, a Medicaid Asset Protection Trust is not. Your estate planning attorney will help you plan this out.

Home equity is something Boomers, in particular, should consider when considering paying for long-term care. The proceeds from the sale of your home could cover the cost of long-term care. Another option is taking out a reverse mortgage, which lets you enjoy the equity in your home without selling the property.

In 2024, taxpayers may gift up to $18,000 to as many people as they want without incurring gift taxes or filing a gift tax return. Married couples may give up to $36,000 to as many people as they wish. If this might work with your retirement finances, it’s a good way to reduce your estate tax burden.

There are many strategies for making gifts while you’re living. Take a clear, objective look at how much you’ll need to enjoy your retirement years before making any big decisions. Talk with your estate planning attorney about how to make this happen. Congratulations—you’ll get to see your legacy in action if it's something you can realistically do.

Reference: Kiplinger (September 1, 2024) “How to Give an Inheritance While You’re Alive”

Can You Prepare for the Unexpected in Life?

It often takes a dramatic event, like an accident or illness, to wake us up to the importance of planning for the future. A recent article, “Are you prepared for a life-changing event?” from the Chattanooga Times Free Press, begins with a letter from a reader who experienced a bad car accident. At age 55, he had no plan for long-term care and questioned what he needed to do to protect himself and his family.

Step one in planning to protect the family is to have term, universal, or whole life insurance. Depending upon your financial situation, you likely need personal life insurance in addition to what you receive through employment.

Long-term care is missing from many people’s plans. The best time to purchase a long-term care insurance policy is during your thirties or forties when you are likely in relatively good health. This is usually not the time that people are thinking about long term care, unfortunately. The younger you are, the less costly they will be. Ensure that any policy includes at-home care and care provided in a nursing or other skilled care facility.

You may end up purchasing a life/annuity insurance policy with a provision for long-term care coverage. Since there are fewer and fewer life insurance companies selling long-term care coverage, this may be your best option.

Planning for the future also means having an estate plan prepared by an experienced estate planning attorney. You’ll need a power of attorney for you and your spouse, so you can manage their personal affairs if they are too sick or injured to do so themselves. This is not automatically granted because you are married, so don’t overlook it. If no one is a POA and something happens, you may end up having your affairs managed by someone the court has appointed instead of a loved one.

You’ll also need to have a medical power of attorney, sometimes called a health care power of attorney, so you and your spouse can act on each other’s behalf if you are incapacitated. Being someone’s married spouse used to be enough for this, but not in today’s highly regulated (and litigious) environment.

A living will is tough to contemplate. However, it is a blessing for those you love. This document is used to state your wishes if you should become incapacitated. Do you want to be kept alive by artificial means? In what situations would you want to be resuscitated? Your estate planning attorney can explain the different options to consider.

Your last will and testament is used to distribute property in the event of your death. These documents are state-specific, so you’ll want to work with an attorney in your jurisdiction. They can be combined with trusts to help minimize federal and state estate taxes and control how assets are distributed.

Speak with an experienced estate planning attorney to clarify your wishes and prepare you for the future, in the short and long term.

Reference: Chattanooga Times Free Press (July 6, 2024) “Are you prepared for a life-changing event?”

Do You Need a Medicaid Asset Protection Trust?

The numbers are clear: 70% of Americans expect to need long-term care at some point in their retirement. Many people aren’t aware of the importance of long-term care until they are uninsurable because of health conditions or can’t afford the premiums. How can you plan?

Depending upon where you live and the type of care needed, long-term care costs anywhere from $50,000 to $100,000 per year. With an average stay of two to five years, it’s a hefty financial burden without long-term care insurance, a MAPT, and good planning.

Creating a Medicaid Asset Protection Trust requires the help of an experienced estate planning attorney to be sure you obtain all of the benefits of such a trust. Long-term care costs are one of the biggest financial worries for retirees, as noted in a recent article, “This Trust Can Protect Your Assets From Long-Term Care Costs,” from Kiplinger.

The Medicaid Asset Protection Trust (MAPT) moves money out of your estate into a trust, so it becomes uncountable for Medicaid means-testing purposes. It has to be created and funded at least five years before the applicant can be deemed eligible for Medicaid funding, known as the “Medicaid look-back.”

The trust needs to be set up by an experienced estate planning attorney because there are many fine points to consider. The MAPT won’t serve its intended purpose if it's not set up correctly.

The MAPT must be an irrevocable trust, meaning the grantor (who set up the trust) no longer has access to those assets. This can be a little unnerving. You’ll also want to speak with your estate planning attorney about your plans for the near and distant future. How will you access funds if you’re putting funds into the trust? Who will be able to access them?

This trust will also benefit families with assets closer to the old estate tax levels. In 2024, the gift and estate tax exemptions are still very high—$13.61 million. However, if the law sunsets without Congress acting, the estate tax could revert to around $5 million or lower if the federal government decides more wealth needs to be taxed. Assets in a trust are not part of the taxable estate, so having a trust also protects assets from federal and state estate taxes.

Trusts are also powerful means of controlling asset distribution. Your MAPT could distribute a set amount of money to a beneficiary throughout their lifetime, or a minor grandchild could be given a certain amount after they’ve completed four years of college or achieved a particular goal.

Consult an estate planning attorney to learn how MAPTs work, if they’re right for you, and how to get started.

Reference: Kiplinger (July 11, 2024) “This Trust Can Protect Your Assets From Long-Term Care Costs”

Do Single Childless People Need an Estate Plan?

A single person without children can focus on their personal goals, including philanthropy. However, it takes planning to ensure that their assets are distributed according to their wishes. A recent article, “I’m an Estate Planner: 8 Ways Single and Childfree People Can Manage Their Assets” from AOL, provides tips for singles with no children and notes that they need an estate plan.

One of the challenges facing singles is the need to have an estate plan in place earlier in their lives than marrieds or parents. If the state is unable to identify a next of kin, the state will take the assets as unclaimed. This is probably not what anyone has in mind for their property.

Consider the people and organizations that have meaning for you. Have an estate plan prepared by an experienced estate planning attorney, who will help you clarify who might be a suitable heir. It may be a close friend, charitable organization, niece, or nephew. Remember to update your will as life changes occur.

For some singles, the preferred option is to “die with zero.” The concept is not to leave any generational wealth behind but to live their lives to the fullest, including philanthropy and gifting while they are living. This lets them see the good work done by charities and the benefits to those they choose to give assets to.

A challenge for some singles is identifying a person to serve as their executor, who will administer their estate, including distributing assets, after their death. If no executor is named in a will or there is no will, a court will name an administrator, and assets will be distributed according to the state's laws.

Do single people need to establish trusts? Trusts are extremely useful in the event of incapacity, which no one wants to think about but needs to be addressed. If you become incapacitated, the trustee can use the funds in a trust to keep your bills paid and your household running. There are also trusts used in charitable giving to meet your philanthropic goals or trusts to protect assets if you need long-term care.

Designating people to serve as your Power of Attorney and Healthcare Proxy is especially important for singles with no children. This way, people of your choosing can oversee your day-to-day financial and legal matters and be involved in your medical decisions.

Finally, don’t leave any of this to chance. Have conversations with people you’ve chosen to fulfill various roles, including executor, power of attorney, healthcare proxy and trustee. Make sure that they understand what you are asking them to do, and be sure they are willing to take on the tasks.

A consultation with an estate planning attorney is the first step to implementing a plan.

Reference: AOL (June 7, 2024) “I’m an Estate Planner: 8 Ways Single and Childfree People Can Manage Their Assets”