Listen to Lawrence…Choosing a POA or Executor/Long Term Care Asset Protection

May 5, 2020

Dear clients and friends,

Here are some more of your questions and my responses:

If I choose not to take my 2020 RMD, will there be a penalty in 2021? Is the 2020 amount added on to my 2021 responsibility?

The answer is simple. ALL required minimum distributions (RMDs) in 2020 are eliminated and there is no penalty or deferral until next year. Period! If you already took one this year, it can be returned within 60 days.

What do I do if I don’t have anyone in my life to appoint as a Power of Attorney or Executor?

Most people pick a relative or friend to be their fiduciary, after that, people look to friends. These are the people that (usually) care about you, that you trust, and often do not have to be paid to do the job. If you really have no one in your life appropriate for the job, then a professional can be chosen. We often recommend a bank trust department, accountant or lawyer for the job, all of whom will charge a fee. We often serve as Executor, Trustee and/or agent under a Power of Attorney for our clients. Whichever professional you pick, fees will be determined according to the amount of assets the professional will be managing, usually set at some small percentage, the larger the amount, the lower the percentage.

With the new Medicaid laws, is it too late to protect my assets?

It is never too late to protect your assets from the cost of long term care. I have heard people at the age of 90 say to me that they will “never make it through the five year look back period at their age.” My response is always that all of my 95 year old clients were 90 once. The fact is, we do not know the future but there is no upside for doing nothing. The look back never ends if it never starts. Also, with the new 2 1/2 year look back for Medicaid home care, you have an even better chance to protect your assets if you start the look back now.

I hope this helps.

Please pass this information to your family and friends and continue to keep your questions coming! If you are thinking about it, others are probably thinking about it too, so my answers will no doubt help you and many others. Let’s stay connected.