Longer lifespans increase the chances of some New Jersey residents experiencing disability in their last years of life. The cost of paying a nursing home during those final years could deplete all of a person’s assets. To protect at least a portion of their assets, people could need more than just a will.
Long-term care insurance represents one viable option for asset protection. The premiums paid for the qualifying insurance would be accepted as a deductible medical expense by the Internal Revenue Service. If a person with this insurance needs to enter a nursing home, then the policy would pay expenses to the care provider.
People also should consider the possibility of becoming mentally or physically incapacitated at some point during their elderly years. A living will could set up a person to act as someone’s proxy for decision making about health care. A power of attorney document would establish who takes care of a person’s general affairs.
An estate planning attorney could guide a person through the many decisions necessary for end-of-life planning. An attorney could recommend how to set up legal protections for special family circumstances such as heirs who might have bankruptcy or marital problems. Reduction of tax obligations might also be achieved through gifts or trusts. After an attorney understands the goals of the person, documents such as living wills, powers of attorney or trusts could be written by the attorney. If circumstances change for a person due to divorce, family death, birth or changes in tax law, then the attorney could research strategies for updating the estate plan.