Planning for Future Care Needs Part 1: Trusts

As we get older, it’s wise to start planning financially for future care needs, not only for ourselves, but for our loved ones as well. No matter how healthy we may be, most of us want the security of knowing, should anything happen to us, our family will be taken care of. Financial or estate planning helps you prepare your assets for safe, legal transfer to those you designate as beneficiaries. Trusts are a common way to ensure your family receives the inheritance you leave behind.

In basic terms, a trust is a legal, written agreement that designates someone to manage your property and gives instructions for what to do with it after your death. Living trusts are established during your lifetime to protect your assets until you pass them on. Lonette Bentley, Executive Director at Clarity Pointe™ Pensacola, a memory care community in Pensacola, Florida, says, “There are many options for estate planning, and living trusts seem to be a popular choice among seniors. Not only do trusts legally secure your property, but you benefit from peace of mind, knowing that your family will receive what you left for them to have.”

The Basics of a Living Trust

According to the AARP® article, “10 Things You Should Know About Living Trusts,” by William J. Lynott, the basic trust involves three parties, including the creator (you), the trustees (who you choose to manage your account), and the beneficiaries (those who receive your assets). Lynott states that it’s wise to name yourself and your spouse as trustees, in order to maintain control over the trust during your lifetime.

A living trust can be revocable or irrevocable. A revocable living trust can be changed or terminated at any time for any reason, as long as you are mentally competent. You stay in control of your assets and are free to change the terms. If you establish an irrevocable trust, the property in it is technically no longer yours, and you can’t make any changes without the beneficiary’s approval.

How a Trust Is Different from a Will

While trusts and wills both dictate legal instructions for how to pass on your assets to your loved ones, they have several differences. The most prominent difference is their cost. Trusts can be very expensive to set up, but they don’t have to go through probate (the process to determine if a will is valid) and can help to minimize estate and gift taxes on the property. On the other hand, wills are not expensive to write up, but probate costs and potential taxes could end up being very high.

Another notable difference is the level of privacy you are granted. A living trust is not accessible by the public, whereas probate records are open to the public. If protecting your privacy is a concern for you, then a trust might be a good option.

Although they are two separate entities with similar purposes, a trust does not replace a will. It only protects whatever assets are put into it. A will is still necessary to communicate how you want the rest of your property distributed.

Is a Trust Right for You?

A trust has many benefits for protecting your property for your loved ones, but it might not be the best plan for everyone. If you have a simple estate and few assets or investments, a will is likely to be sufficient to handle your plans.

In CNN’s “Ultimate Guide to Retirement,” experts suggest that a trust is a good idea if your net worth is at least $100,000 and you have substantial assets, such as real estate. You might also strongly consider establishing one if you have very complicated or specific instructions for how your estate should be distributed. (Various subtypes exist for complex circumstances, such as when multiple marriages and children are involved). The average basic trust can cost you between $1,500 and $3,000, and the price goes up as the agreement gets more complex. In some cases, the cost of the trust itself is not worth the benefits it provides.

When making major financial decisions, it’s important to learn as much about your options as possible. If you could use help deciding whether to consider establishing a trust, speak with a financial advisor who can offer advice on your unique situation.

The Importance of Planning Ahead

“We can’t stress enough how important it is for seniors to plan ahead,” says Bentley. “Having peace of mind for the years ahead shouldn’t be underestimated, but making these plans before they are absolutely necessary can save you and your family a lot of hassle.

“None of us know what the future holds when it comes to our health. Especially for those who are at a higher risk for developing a degenerative disease such as Alzheimer’s or Parkinson’s, planning while you’re healthy is vital to a smooth process. For individuals who wait to make plans, and begin experiencing cognitive impairments that come with memory loss, the responsibility for financial planning has to fall on their spouse or adult children. Their wishes may not be fully acknowledged in their will or trust, and they’ll be putting stress on their family to try and do what they can with their loved one’s assets. It’s best to make your plans while you’re still fully competent so this burden never has to fall on your family.”

A Community You Can Trust

If you would like more information about living trusts or estate planning, feel free to reach out to Clarity Pointe Pensacola for guidance. Our experienced team can help you find information and connect you to valuable resources throughout the community. If you are looking for help on making plans for a loved one with memory loss, we can help you with that, too. We’re happy to assist you and your loved ones with any of your senior living and memory care needs.

Clarity Pointe … Our Difference is Clear

Clarity Pointe’s™ Specialized Memory Care “Living” Neighborhoods are truly changing lives for those with Alzheimer’s disease and other dementias – and for those who love them. At Clarity Pointe, our mission is to ensure our residents lead connected and rewarding lives.

Unlike other providers that offer a secure memory care wing in a skilled nursing or assisted living center, Clarity Pointe Pensacola offers three free-standing, purpose-built memory care communities that are solely and entirely dedicated to memory care assisted living. Our communities blend luxurious surroundings with specialized care that is individualized to each resident and delivered by a compassionate, expert team of professionals.

We stay current on the latest trends and advancements in Alzheimer’s care and implement them into our residents’ care plans. Always moving forward, we combine the latest in evidence-based programming with luxurious, residential living and compassionate respectful care.

For each of our residents, we offer a life that is engaging, fulfilling, inspiring and meaningful.

To learn more about the Clarity Pointe™ Difference, contact us today!