Estate and Transition Planning

By: Robert Moore, Tuesday, December 27th, 2022

 

Legal Groundwork

As we wind down 2022 and look forward to 2023, there are few changes related to estate planning that will occur in the new year.  The following is a summary of those changes.

 

Annual Gift Exclusion

The annual gift exclusion is the amount that one person can gift to another person with no estate tax implications.  In 2023, the annual exclusion will increase from $16,000 to $17,000.  This means that a person can gift $17,000 to as many people as they wish without causing a gift tax or a reduction of their federal estate tax exemption.  For example, Grandfather gifts $17,000 to each of his three children and seven grandchildren.  Grandfather gifted a total of $170,000 without incurring a gift tax or reducing his federal estate tax exemption.  The gift can be money, real estate, machinery, ownership in a business entity or just about any other asset.

 

Federal Estate Tax Exemption

The federal estate tax exemption is the amount of net worth exempt from estate taxes at death.  If a person dies with a net worth less than the exemption, no estate tax will be owed.  If a person dies with a net worth exceeding the exemption, the amount exceeding the exemption will be subject to a 40% estate tax.  In 2023, the exemption will increase from $12.06 million to $12.92 million. 

To further explain the estate tax exemption, let’s continue the prior example using 2023 values.  Grandfather has a net worth of $13.0 million. If he were to die with this net worth, $80,000 would be subject to estate taxes.  However, after he makes gifts to his children and grandchildren, his net worth is now $12.83 million.  Grandfather’s net worth is now less than the federal exemption, so if he dies, there will be no estate taxes.

 

2032A Limit

The IRS allows eligible farmers to reduce their estate valuation by valuing farmland at agricultural value rather than fair market value.  This reduction in value is non unlimited.  In 2023, the IRS will allow a reduction of $1,310,000, an increase from the 2022 limit of $1,230,000.  Eligibility requires the decedent, among other things, to have been a farmer with at least 50% of their assets being farm assets and at least 25% of their assets being farmland. 

Consider the following example using 2023 values.  Bill was a retired farmer and died with a net worth of $14 million.  He was eligible for 2032A so his estate was entitled to a $1,310,000 reduction.  After applying the section 2032A reduction, Bill’s estate was valued at $12,690,000 which is below the federal estate tax exemption.  By applying 2032A, Bill’s estate is able to avoid estate taxes.

It should be noted that applying 2032A to an estate is complicated and should be done with the assistance of legal counsel.

 

Ohio farm and Planning for the Future of Your Farm Webinar Series title
By: Peggy Kirk Hall, Friday, December 09th, 2022

We're happy to announce our popular “Planning for the Future of Your Farm” webinar series for 2023.  The four-part online series will be on January 23 and 30 and February 6 and 13 from 6:30 to 8:00 p.m. This workshop will help farm families learn strategies and tools for transferring farm ownership, management, and assets to the next generation.

Workshop topics

Here's what the webinar will cover:

  • Developing goals
  • Planning for the transition of management
  • Planning for the unexpected
  • Communication and conflict management during farm transfer
  • Legal tools and strategies
  • Developing your team
  • Getting your affairs in order
  • Selecting an attorney

Workshop faculty

You and your family will learn from two of Ohio's top farm transition experts:

  • Robert Moore, Attorney with our Agricultural & Resource Law Program. If you didn't already know, Robert was in private practice for 18 years before joining our program. He provided legal counsel to farmers and landowners across Ohio on business, farm transition, and estate planning. 
  • David Marrison, OSU Extension Field Specialist in Farm Management. David has been with OSU Extension for 25 years and is nationally known for his teaching in farm succession. He has a unique ability to intertwine humor when speaking about the difficulties of passing the farm on to the next generation. 

Registration

Because of its virtual nature, you can invite your parents, children, and grandchildren to the webinar, regardless of where they live in Ohio or across the United States. The webinar offers an easy way to include all family members in learning about how to develop a plan for the future of your family farm. 

Families must pre-register for the workshop by January 16, 2023 at go.osu.edu/farmsuccession.  We appreciate the support of the Ohio Corn & Wheat Growers Association in sponsoring the workshop and helping us keep the cost at $75 per farm family. The registration includes one printed set of materials that we'll mail to a family member, and other members will have access to electronic copies of the materials.

In-person workshops planned also

Several of our OSU Extension county educators are also hosting day-long in-person versions of the workshop on these dates:

Don't miss out

We hope you'll join us for this important series!  Even if you already have an estate plan or have begun one, this workshop should help you learn more and ensure that you're effectively addressing your goals for the future of your farm and farm family. 

For additional information David Marrison at marrison.2@osu.edu or 740-722-6073.

By: Robert Moore, Wednesday, December 07th, 2022

Legal Groundwork

As 2022 winds down, it’s not too early to start thinking about projects for 2023.  One project, if you have not done so in a while, is to review your estate plan.  Estate plans should be reviewed occasionally and updated as needed.  The following are some items to look at when reviewing an estate plan.

Health Care Power of Attorney.  Check who you have identified as your health care power of attorney.  Is the designated person(s) who you want to act on your behalf and is their address and phone number up to date?  It is also good to have a backup power of attorney in case your primary person is unable or unwilling to serve.

Living Will.  If you have a Living Will, check to be sure the contact person(s) and their contact information is up to date.  Remember that a Living Will is the end-of-life directive that gives permission to a doctor or hospital to withhold or discontinue artificial life support.

Financial Power of Attorney.  You should also check to see who you have designated as your financial power of attorney and make sure their contact information is current.  Do you want to make changes to who will serve as your financial power of attorney?

Wills/Trusts.  These documents determine who will inherit your assets when you pass away.  Review who you have selected for to serve as the executor/trustee and if you should make changes to these designations.  For people with minor children, do you have a guardian named for your children and do you want to make any changes?  Also, review the distribution plan to see if it will work with your current goals and ideas or should you make some changes.

 Balance Sheet and Assets.  We don’t always think about balance sheets with estate plans, but they are a key component of good estate planning.  One issue to address is net worth.  Is your net worth less than the current $12.06 million/person estate tax exemption?  Will your net worth be less than the exemption in 2026 when the exemption reverts to 2017 values (probably around $7 million per person*)?  If you answer no to either of these questions, you should make an appointment with your attorney to address your net worth issue.

The other reason to review your balance sheet and assets is to try to make everything non-probate.  All titled assets can be made non-probate through titling.  Did you buy a new truck or trailer and forget to title it non-probate?  Avoiding probate is relatively easy but it must be done prior to death.  If you have any questions about probate, contact your attorney and review your assets with them.

If you get a chance before 2023 gets too busy, take an hour or two and review your estate plan.  You might be surprised that you have forgotten some of the details of your plan.  Having a good, up-to-date plan is important to make sure that you can pass along assets to your beneficiaries in the most efficient and practical way you can. 

 

*Unless extended by Congress, the estate tax exemption will revert to the 2017 exemption amount which was $5 million.  The amount is indexed for inflation so an exact number cannot be known for 2026 but a reasonable estimate is $7 million.

Posted In: Estate and Transition Planning
Tags: Estate Planning
Comments: 0
Front page of Long-Term Care and the Farm guide
By: Peggy Kirk Hall, Tuesday, November 22nd, 2022

Long-term care costs are a threat to family farms.  In fact, we predict that long-term care costs are the biggest financial threat to farm families, even more so than federal estate taxes.  That’s because long-term care can affect every farm--and when cash or insurance runs out, farm assets may have to be sold to pay for long-term care.  With an increasing elderly population and rising health care costs, the financial pressure of long-term care on family farm succession will probably grow in future years.

What can farm families do to protect farm assets from the risk of long-term care?  Our latest publication by attorney Robert Moore, Long-Term Care and the Farm, addresses this question.  The publication begins with an important first step:  understanding long-term care risk.  What is the chance that a farmer will require long-term care, what kind of care is most common, and what how much will it cost?  Robert presents data and statistics that help us predict the expected type, length, and costs of long-term care services a farmer might require. 

Once we assess long-term care risk, the next important question is how to pay for long-term care while keeping farm assets secure.  Robert explains how Medicare and Medicaid programs can apply to long-term care costs.  He then presents several legal strategies to mitigate long-term care risk and protect farm assets. The guide wraps up with a process a farm family can follow to assess long-term care risk for their individual situation.

It's possible to keep family farmland and the family farm businesses safe from the risk of long-term care.  If long-term care is a concern for your farm family, be sure to read this important new publication and talk with an agricultural attorney about protection strategies. The publication is available at no cost through our funding partnership with the National Agricultural Law Center and the USDA National Agricultural Library.  Read Long-Term Care and the Farm here.

By: Peggy Kirk Hall, Tuesday, November 15th, 2022

Farmland can be a family's most important asset, recognized for both its heritage and financial value.  Here's some proof:  over 1,900 "Century Farms" in Ohio have been in the same family for over 100 years. And 130 of those farms have been in the same family for over two centuries -- testaments to the importance of farmland to Ohio families.

But there are threats that can cause farmland to leave a family despite its value to family members. Long-term care costs, divorce, debt, co- ownership rights, poor estate planning -- these are situations that can put family farmland at risk. The good news is that legal strategies can counter these threats. 

In our new publication, Keeping Farmland in the Family, we offer five legal tools that can help keep farmland in a family:

  • Agricultural or conservation easement
  • Right of First Refusal
  • Long-term lease
  • Limited Liability Company
  • Trust

These legal tools offer a range of protection for family farmland, allowing a family to use a highly restrictive strategy that protects land for many generations or a less restrictive approach that secures land only for a generation or two. Examples provided throughout the publication can help farm families see how different scenarios play out.  The guide does not intend to substitute for individual legal advice, but offers a family a starting point for discussion and decisionmaking with an agricultural attorney. 

Read Keeping Farmland in the Family here.  We were able to produce this publication with financial assistance from the National Agricultural Law Center and the USDA's National Agricultural Library.

 

By: Robert Moore, Friday, November 11th, 2022

Legal Groundwork

According to the last Census of Agriculture, about 87% of farms in Ohio are sole proprietorships.  This means that the vast majority of farms have no formal business structure.  However, we often hear of the need to have a business entity for liability protection, taxes or for a variety of other reasons.  So, how do you know if you need a business entity.

Like most legal answers, it depends.  LLCs and corporations can help with liability protection. These entities prevent the owners from having personal liability for the acts of the entity or anyone acting on behalf of the entity.  For example, if an employee of an LLC causes an accident driving equipment on a roadway, the owners of the LLC will not usually be personally liable.  The assets in the LLC are at risk but not the other assets outside of the LLC.

While LLCs do provide liability protection, they are no substitute for liability insurance.  The most important liability risk management strategy should always be a good liability insurance policy.  LLCs and corporations are good backup plans if the insurance policy does not cover the liability in some way.  Therefore, business entities can help with liability protection, but they are not a necessity like insurance.  Generally, the more owners and employees a business has, the more liability protection benefit an LLC or corporation will provide.

Business entities are often more valuable as a succession planning tool than they are for liability protection.  For example, land that is or will be owned by multiple family members is subject to the risks of partition.  Partition is the process where a co-owner of land forces the land to be sold as a way of “cashing out” their ownership in the land.  Land held in business entities is not subject to partition.  Those who own land with other people should strongly consider an LLC or other entity to protect against partition.

Business entities can be tax management tools as well.  For example, a sole proprietorship can only file taxes as a sole proprietor on a Schedule F or Schedule C.  That same sole proprietorship can convert to an S-Corp which often reduces self-employment tax liability.  Farm and business owners who seek the best fringe benefits such as health insurance and retirement benefits may want to be taxed as a C-Corp.  As these examples illustrate, business entities can provide tax management options that sole proprietorships do not.

Business entities do have several disadvantages.  One is the cost of establishing the entity.  The cost depends on the number of owners, the assets that will be put into the LLC and the terms of the governing document.  Establishing an entity can cost several thousand dollars or more in legal fees. Another disadvantage is managing the entity.  Each entity will need its own bank account, accounting, and tax return.  If an entity is not properly managed, it may not provide the expected liability protection or tax structure.

Liability management, succession planning and tax management are just a few of the many factors that should be considered when deciding if a business entity is worthwhile.  The best course of action is to meet with your attorney and accountant to assess the benefit that a business entity may have for your farm or business.  If the benefits outweigh the disadvantages, then you should strongly consider establishing a business entity.  If benefits do not outweigh the disadvantages, you may not need an entity and that is OK.  Many successful businesses are sole proprietorships and yours can be as well.

By: Robert Moore, Tuesday, October 25th, 2022

 Legal Groundwork        

Every few years, the IRS adjusts the annual gift tax exclusion.  The IRS recently announced that the gift tax exclusion for 2023 will be increased to $17,000.  This means that a taxpayer may gift up to $17,000 to an unlimited number of persons without having to pay gift taxes or reduce their estate tax exemption amount.  Because the gift tax exclusion is available to all individuals, married couples can gift up to $34,000 annually.

For example, Mom and Dad want to gift money to Daughter.  Mom and Dad can each gift $17,000 to Daughter for a total of $34,000.  Daughter is married and Mom and Dad also gift a combined $34,000 to Daughter’s spouse.  Daughter has three children, Mom and Dad can gift to each grandchild as well for a total of $102,000.

As the above example shows, it is possible to gift substantial amounts of wealth to others by gifting.  Mom and Dad are able to gift $170,000 each year to their family using the gift tax exclusion.  None of the gifts will be subject to gift taxes or reduce the estate tax exemption because the gifts are all less than the annual gift exclusion.

Gifts can be made in excess of the annual gift tax exclusion amount.  Gifts exceeding the gift tax exclusion will either cause gift taxes to be owed or will cause the person gifting to have their estate tax exemption reduced by the amount of gift exceeding the annual exclusion.  The lifetime estate tax exemption for 2023 will be $12.92 million, up almost one million dollars from 2022.

Consider the following example. In 2023, Dad gifts $1,017,000 to Daughter.  The annual gift tax exclusion will cause $17,000 to be a free gift with no tax consequences.  The remaining $1 million exceeds the annual gift tax exclusion and thus will reduce Dad’s lifetime estate tax exclusion by $1 million.  Dad’s estate tax exclusion will be reduced from $12.92 million to $11.92 million.

Gifting can be an effective means of transferring wealth to other family members or friends.  Before gifting, be sure to seek advice from tax advisor as to the advantages and disadvantages of gifting.  For a thorough discussion of the implications of gifting, see the Gifting Assets Prior to Death bulletin available at farmoffice.osu.edu.

 

 

Posted In: Estate and Transition Planning
Tags: gift tax
Comments: 0
By: Robert Moore, Thursday, October 20th, 2022

Legal Groundwork

Long-Term Care (LTC) costs can present a significant threat to the viability of farm operations and keeping farmland with the family.  Fortunately, there are a few strategies that can help mitigate the risk of LTC costs.  Before we can know which strategy may be appropriate, assessing the true nature of the LTC risk is critical.   

The risk assessment looks at the potential costs of LTC and the ability of the farm to pay for those costs.  Paying LTC costs is a function of available income and assets that can be liquidated to pay for LTC costs not covered by income.  Generally, the assumption is that farmers will first use savings to pay LTC costs not covered by income, then non-real estate farm assets and then lastly real estate.  That is, the land is the last asset that a farmer will typically spend to pay for LTC costs.

To start the assessment, any coverage from LTC insurance policies should be calculated.  That is, to what extent will any LTC insurance payments cover LTC costs?  Also, keep in mind that most LTC policies have a term limit which should be taken into consideration.  Only LTC costs not covered by insurance payments will need to be further addressed.

Next, a realistic forecast should be made regarding available income.  It is important to keep in mind that if someone is receiving LTC, there is a good chance they will not be able to operate a farm.  So, income should probably be based more on potential retirement income than income from an operating farm or wages.  All available sources of income should be included such as retirement accounts, investments, land rents, and the sale of operating assets. The income forecast needs to be based on after-tax income. 

The income forecast is then compared to potential LTC costs.  The easiest, and most conservative comparison is between income and nursing home costs.  The most expensive type of LTC is a nursing home, so using nursing home costs is a worst-case scenario.  The first question becomes: is income adequate to cover potential LTC costs?

If there is adequate income to pay for LTC costs, other assets are not at risk.  Additionally, no further LTC planning likely needs done.  Assets are only at risk to LTC when income is inadequate to cover the costs.

For many farms, income alone will not pay for LTC costs.  In these situations, the next step is to determine how long savings will cover the deficiency.  By dividing the available savings by the income deficiency, we can determine how many years of LTC will be covered by savings.  If the savings will cover average LTC costs, then all remaining assets are likely protected.

Consider the following example.  Joe is unmarried and a farmer.  He has no LTC insurance.  He forecasts his retirement income to be $50,000 after taxes.  He has $500,000 in savings and investments, $500,000 in machinery and equipment and $2,000,0000 in land.  He assumes that a nursing home will cost $100,000/year.  His income is $50,000 short of covering the nursing home bill.  He will need to use his savings to cover the deficiency.  He can pay for ten years of nursing home costs before his savings is depleted.

The average male will require about 2.2 years of LTC.  Joe can pay for almost five times the average stay by using income and savings.  Joe’s risk analysis shows that if he is willing to use his savings, his farm assets are at low risk of being consumed for LTC costs.  It is unlikely that Joe will need more than ten years of LTC.

Many farms do not have much savings or investments as all the money goes back into the farm.  In these situations, operating assets may need to be liquidated to pay for LTC.  Like the income forecast, available operating assets should be valued as after-tax.

Consider the same example as above but Joe only has $50,000 in savings.  In this scenario, his savings will only pay for one year of LTC.  After that, he will need to sell machinery to help pay for his care.  The machinery will pay for ten years of care.  In this risk analysis, Joe’s savings and machinery are at risk to LTC costs.  However, his land is likely safe unless Joe requires more than ten years of nursing home care, which is unlikely. 

In this situation, Joe may decide that he is not willing to risk his machinery and transfers it to an irrevocable trust or elects some other strategy to protect it from LTC costs.  If he protects his machinery, he will also need to do the same for his land.

If income, savings and operating assets are insufficient to cover LTC costs, then land is at risk.  As stated above, this is almost always the asset most important to farmers and the asset requiring the most protection.  If the risk analysis shows that the land is likely at risk to LTC costs, farmers will often take action to protect the land.  Protecting the land may include gifting to heirs or transferring to an irrevocable trust.

Using the same example again, except Joe quit farming several years ago and does not own any machinery.  Using his savings, he can only pay for one year of LTC before his land is at risk.  Joe decides to gift his land to his children to avoid having to spend it down for LTC.  Joe decided upon an aggressive LTC plan due to his land being exposed to significant risk from LTC.

The examples above use a relatively simple scenario using a single person to explain the concept of risk assessment.  For married couples, the assessment is more complicated because we now have the possibility of two people having LTC costs.  Additionally, not all income can be allocated to LTC if one spouse remains at home with continuing living needs.  The concept of the risk assessment is the same for a single person and married persons, but the actual assessment is more complex for married people.

Until a risk assessment is performed, it is difficult to know what strategy to implement.  When income and/or savings is adequate to cover many years of LTC, there may not be a need for aggressive LTC planning.  If income and savings will only cover LTC for a short period of time, aggressive planning may be needed to protect assets.

An attorney familiar with LTC issues can be helpful with the risk assessment.  Before transferring assets or implementing the plan, an attorney should be consulted.  LTC planning can be complicated and technical.  Implementing the wrong plan can make things even worse.  A small investment in legal fees is worthwhile to be sure your LTC plan is the correct plan for your farm.

 

By: Robert Moore, Thursday, October 06th, 2022

Legal Groundwork

Business entity discounts can be a valuable tool in farm succession planning.  This strategy provides a method of reducing the values of assets that will be in an estate without the need for gifting.   Discounting can be used with any kind of entity; the key is to draft the entity’s controlling agreement to maximize the discount.

Discounting is based on two important factors: lack of marketability and lack of control.  Lack of marketability reflects the disinterest that an outside buyer would have in buying into a closely held entity.  Lack of control reflects the inability of an owner to singularly control the entity.  These two factors overlap somewhat but they essentially measure the discount that would be needed to make an arms-length buyer interested in buying an ownership interest in the entity.

The amount of discount is scrutinized by the IRS.  Owners of entitles have abused the discounting strategy in the past as a scheme to transfer ownership without incurring gift taxes or estate taxes.  A typical discount for an ownership interest that is fully subject to lack of marketability and lack of control may be around 35%.  Discounts in excess of 35% may be challenged by the IRS as excessive.  The discount is usually determined by an accountant or other financial professional that has expertise in determining business entity discounts.

Discounting can best be explained using examples.  Let’s say Mom and Dad own 400 acres of farmland valued at $3 million.  If Mom and Dad were to die with the land titled in their names, the land would be valued at $3 million in their estates.  The land is valued at its full value because either Mom or Dad can cause the land to be sold at any time through partition and they would presumably receive full, fair market value.

Now, let’s say Mom and Dad transfer the land into an LLC.  The LLC’s operating agreement includes the following provisions:

  • Land may not be sold without majority consent of ownership
  • Money cannot be distributed out of the LLC without majority consent
  • The LLC cannot be dissolved without majority consent
  • Ownership may only be transferred to the descendants of Mom and Dad

Additionally, Mom and Dad gift a 0.5% ownership interest to each Son and Daughter.  After the gift, Mom and Dad are each 49.5% owners of the LLC.   Now, neither Mom nor Dad can singularly control anything that happens with the LLC.  Due to the lack of marketability and lack of control created by the terms of the LLC operating agreement and the minority ownership (49.5%), Mom and Dad can expect to receive around a 35% discount on their ownership.

Using discounting, Mom and Dad have reduced the value of their estate by over $1 million by setting up an LLC and transferring their land to the LLC.  At a 40% estate tax rate, Mom and Dad have potentially saved Son and Daughter over $400,000 in estate taxes.  Entity discounts can same many thousands, if not millions, of dollars in estate taxes for some farm families.

The primary downside of using a business entity for discounts is the cost of establishing and maintaining the LLC.  An LLC will need to be established, an operating agreement drafted and deeds executed to transfer the land to the LLC.  Perhaps the initial startup and deed expense will be around $5,000.  The LLC will need to maintain a bank account to collect rent and pay expenses such as real estate taxes.  Additionally, the LLC will be required to file a tax return each year.  While there are startup and maintenance costs for the LLC, the savings in estate taxes usually makes establishing business entity discounts and easy decision.

It should be noted that some presidential administrations have sought to eliminate the entity discounts for family-held businesses.  So, the business entity discount can be abolished with a stroke of a pen at any time.  However,  as long as discounts are available, they can be a very valuable tool in farm transition planning.

For those farmers and landowners who may be concerned about estate taxes, a business entity may be a relatively simple but effective tool to reduce the value of the estate.  An attorney should be included in the process of establishing the LLC to be sure that the necessary provisions are included in the operating agreement to maximize the discount.  Also, a tax advisor should be consulted to ensure a thorough understanding of the tax ramifications of establishing an LLC. 

By: Robert Moore, Tuesday, September 27th, 2022

Legal Groundwork

For people who are concerned about potential long-term care (LTC) costs, LTC insurance may be an option.  Several insurance companies sell these policies that pay out to cover some or all LTC costs.  There are many different types of policies and coverages available.  For example, some coverages may start soon after LTC is needed while some coverages will not begin to pay for a longer period, sometimes as long as one year.  Also, some policies are combined with a death benefit so that the policy holder can be sure that at least some benefit will come from the policy.   The following are some, but not all, of the terms and conditions to consider when exploring a LTC insurance policy:

Duration of Benefits.  Most policies cover at least one year and may cover up to five.  Policies that cover more than five years are no longer available.  Obviously, a longer-term policy is preferable but that must be balanced against the higher premiums.

Benefit Triggers.  The LTC policy will only start to pay out when certain triggers, or conditions, are met.  Before paying out, most policies require the policy holder to need assistance with at least two of the following activities: bathing, dressing, toileting, eating, transferring and continence.  Be sure to understand what conditions are required for payout to be triggered.

Waiting Period.  Policies will include a waiting period.  The waiting period may be a few days or as long as one year.  The longer the waiting period the lower the policy premiums will be.  

Daily Benefit Amount.  A LTC policy will include a daily benefit amount.  Some policies may pay 100% of the daily LTC costs.  Other policies may only cover 50% of the LTC costs.  The policy can be used to cover only that portion of LTC costs that income does not.

Inflation Protection.  Like any cost, LTC costs will increase over time.  Some policies will have inflation adjustment built in and automatically increase over time.  Other policies will offer the holder the ability to increase the coverage to keep up with inflation but this will also increase the premium.  It is important to know what type of inflation adjustment provision is in a policy.

Depending on the type of policy and robustness of coverage, LTC policies can be expensive.  Not everyone will be able to fit LTC policy premiums into their budget.  Also, not everyone is insurable.  People with significant pre-existing health care issues may not be able to obtain a LTC policy.

If a policy can be obtained to cover all LTC costs or at least cover the deficiency that income does not cover, all assets will be protected.  Therefore, the owner can keep all their assets and continue to enjoy and use them for the remainder of their lives.  LTC insurance policies, in many ways, provide the most flexible LTC plan.

It is worthwhile to at least explore incorporating a LTC insurance policy into a LTC management plan.  Many insurance agents and financial advisors can provide free estimates for policies without too much difficulty.  They can also help with a risk assessment to determine what policy may be needed for a given circumstance.  Before assuming that assets must be gifted or transferred to protect them, the possibility of LTC insurance should be explored.

Posted In: Estate and Transition Planning
Tags: long-term care
Comments: 0

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