April 2015 Bar Bulletin
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April 2015 Bar Bulletin

Financial Planning for a Better Retirement

By Rajiv Nagaich


Fourth in a Series

(First of Three Parts)

As I've covered in previous articles, I consider health our clients' greatest asset and housing our clients' biggest retirement decision and planning opportunity. This article focuses on the financial affairs of a client's life that are important for an elder law attorney to understand.

The key goals an elder law attorney helps clients achieve include helping them protect assets, avoid institutional care and not becoming a burden on others. To that end an elder law attorney often finds that routine financial decisions made by clients hinder planning when a client faces incapacity. For this reason it becomes important for any attorney who wishes to offer elder law services to be familiar with the following financial issues.

Finances and Helping a Client Avoid Institutional Care

With sufficient assets, clients should be able to afford to hire home help and thereby avoid institutional care. So, how much money is enough to help accomplish that? In my experience clients coming to us with less than $1.5 million in net worth or with less than $250,000 in cash assets readily available to cover care costs are vulnerable.

Absent some very unusual situations, clients with a net worth of more than $2 million and sufficient liquid assets as part of that net worth have sufficient assets to afford home care. However, people with means must take steps to avoid becoming the next Casey Kasem, the American radio icon who, despite an $85-million estate, died not in his home in California, but in a hospital in Washington. Having money is no assurance that the money will be used to provide the care the client wants, but that is a different matter.

When it comes to care costs, those with lesser assets would be wise to pay attention to the affordability issue. Those with greater assets may look at it as an optional planning possibility; those with more than $2 million will want to pull together a plan to make sure that their assets will actually be used to care for them the way they hope to be cared for, in addition to addressing estate tax issues.

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