As an estate planning and elder law attorney, I often get asked what the difference is between these two types of law. Many of my clients think the only difference is one’s age – if you are 65 or older, it is called elder law and if you are younger than 65, it is called estate planning. Although most of my elder law clients tend to be older, the real difference is the focus of the representation.
Generally, the focus of estate planning is to make sure you have legal documents in place that provide the following: (1) the ability to control your property while you are alive and able, (2) planning for you and your loved ones should you become disabled, and (3) after you die, making sure your assets go to the people you love without unnecessary cost or delay. Usually, these documents include financial and health care powers of attorney, advance directives or living wills, last will and testaments and perhaps, trusts.
Moreover, estate planners may focus on reducing one’s tax liability at death and ensuring that one’s beneficiaries pay as little as possible to Uncle Sam. In that regard, the financial power of attorney usually will have a gifting provision to allow the named agent to give away your assets so at death, your gross estate is below the taxable limit. Similarly, an estate planner may advise a person to set up a revocable living trust in order to avoid probate and its associated costs.
But, what if you suffer a sudden illness or injury, or are diagnosed with a disease that affects your mental capacity and you need the money for your long-term care? If you have gifted your money to a family member or anyone else, it may be gone. Worse still, if you try to apply for Medicaid to help pay for your long-term care, you may be placed under penalty because you gave away all your assets and you may be ineligible for benefits for a period of time. Or, if you have a revocable living trust and you transferred your house to it in order to avoid probate and now you apply for Medicaid, your house will be a countable asset and will have to be sold and the proceeds spent down before you will be eligible for benefits.
This is where an elder law attorney can help. Elder law focuses on long term care planning and how to pay for it. For those of you who read my article regularly, you know that long term care is required when an individual is unable to perform the basic activities of daily living such as bathing, dressing, eating, toileting, walking and transferring, for a period exceeding thirty days. Long term care can include homecare, adult daycare, respite care and assisted living or nursing home services. And, in this area, those types of costs can be daunting – more than $100,000 per year, and most people simply cannot afford to pay that.
Depending on one’s medical condition, one might require long term care but be under the age of 65. For example, if you have a child or a younger adult who is disabled and requires long term care, most likely you would want to consult an elder law attorney to determine what, if any, benefits are available to help pay for that care even though the disabled person may not be elderly.
An elder law attorney not only is able to advise a client about public benefits, including Medicaid and Veteran’s benefits, that may be available to help pay for long term care, but is also able to assist with the qualification and application process. As part of this process, elder law attorneys often engage in asset preservation to protect a client’s assets from the high costs of long term care. This is especially true if there is a dependent spouse or child at home, or if the individual does not have long term care insurance to help pay those costs.
Finally, elder law also encompasses special needs planning. Elder law attorneys are well-versed in the different types of special needs trust that may be available to a disabled individual and can advise which option is the best for a particular client. So, elder law is not just for the elderly.