The Perfect Estate Plan for Baby Boomers?

As an estate planning and elder law attorney, I am becoming increasingly frustrated to see how the long term care system is failing our seniors. I had a conversation with a client this week, who feels that the government programs supporting seniors are broken. My client’s mom is in a nursing home and we are assisting them to get Medicaid eligibility to pay the nursing home. What he said really resonated with me, because people are continuing to go broke due to the long term care system.

In a recent podcast, I discussed the article that was published in the news, about the baby boomers being the wealthiest generation in history. However, 70% of the wealth is concentrated in 7% of the population. Most of the people we work with are the middle-class baby boomers, who are part of the other 93% population. They own their house and have some money in the bank. Most of them have worked for 40-50 years trying to save a nest egg for their retirement. They have been sold this story that they will have healthcare coverage with Medicare when they retire at 65, and believe they will be taken care of should they get sick.

Medicare Won’t Pay for Long Term Care

Unfortunately, Medicare won’t pay for long term care. We help many families every month, going through the process of trying to gain eligibility for Medicaid benefits to pay for long term care. This requires some dramatic legal moves and I can appreciate why my clients feel so frustrated.

On the long term care website, I read that around 70% of baby boomers are going to need some form of long term care if they get dementia or Alzheimer’s. Added to that, 20% of those seniors will need long term care for more than five years. Given the cost of nursing homes in this country, which is $150,000 a year, this is unaffordable for most families.

The Future is Uncertain, But We Can Still Plan

We don’t know what the future holds, and we cannot prevent the likelihood of getting dementia. However, we can take steps to protect ourselves and avoid going broke. If I end up with dementia, I want to make sure my wife has a house to live in and some money in the bank. We meet many families who want to protect themselves from this system, and ask us to advise them. Some people tell us they already have a will and want to know why they need an estate plan. 

I understand their confusion when I advise my clients that they need more than a Will. It is unfortunate that the attorney they worked with previously, only offered them a Will. This could be because they met with attorneys who work with clients that have a high nett worth. They may also have gone to a general practice law firm, who deals with divorces, traffic tickets and Wills, and not estate planning. The attorneys, financial advisors, tax man and nursing homes know that there are ways to avoid seniors going broke, but none of them are doing anything to help.

A Will Is Not Enough

A Will only states who will get your stuff when you pass away. Estate planning is not only about who gets your stuff when you pass away but it helps to provide a sense of security, by protecting your house and money. You have worked for your money, and you should keep it – not the government or the nursing home. I want to ensure you have a peaceful retirement, without worrying about going broke to pay for long term care. If you need more than five years of long term care, you definitely want to protect your assets.

Many of my clients like to use trusts, and I recommend putting your house and some money into an irrevocable asset protection trust. This means that after five years, the house is safe from any claims from the nursing home. You would have to give up access to the equity of the house, assuming of course you won’t need to do a reverse mortgage. You also won’t receive a distribution from the trust. However, you can still live in your home, but the difference is your house is now protected from the nursing home if you get sick.

You Can Avoid Probate

If you have IRA’s, they will need to be beneficiary designated, and will avoid probate. You can put any other money you have that you want access to, in a revocable trust. Having your house in the asset protection trust and money in a revocable trust, will allow you to avoid probate. Your life won’t change, but a large percentage of your net worth is protected from long term care costs. This in my opinion is a much better estate plan for you.

We will help you to establish a Power of Attorney, as well as health care planning. The result of planning like this, is that you don’t have to worry about the nursing home, or probate. We also teach your children, who are the future executors and trustees, about their future roles and responsibilities. Handing legal documents to your adult child and expecting them to know what to do is unfair and unrealistic. 

Do The Right Thing… Get An Estate Plan

To learn more about doing good planning for your family, come to one of our Three Secrets Workshops. I am sure you want to have a good retirement without worrying about anything intercepting your inheritance to your kids. Our free workshops will teach you all you need to know to make informed decisions. You will then be able to have the best estate plan for you and your family. By offering the education in a classroom setting, it makes it more affordable for you to do estate planning. Visit to register for a workshop now.