How to Protect Your Assets
Executive Director of the Colorado Fund for People with Disabilities Megan Brand says estate planning is essential especially for people who rely on Medicaid or Supplemental Security Income.
By Eliza Marie Somers
We’ve all heard the refrain: Get Your Affairs in Order. Even the National Institute on Aging has a web page dedicated to “getting your affairs in order.”
But how many of us keep putting it off?
If you or your loved one is disabled and receives federal and/or state financial assistance, getting your affairs in order is an urgent matter and should be on the front burner on your to-do list. And don’t rely on the internet for free financial forms.
“There’s a lot of problems with online forms,” said Megan Brand, executive director of Colorado Fund for People with Disabilities. “There’s a difference in power of attorney and durable power of attorney.”
Brand explained a durable power of attorney continues after someone’s death, while other power of attorney documents can end at the time of death or if the person is unable to make their own decisions.
Brand was one of four panelists at the August 12, 2022, Brain Injury Hope Foundation Survivor Series: Tools to Protect Your Future: Financial Health, Trusts, Power of Attorney, Conservatorship, Guardianship, Resources and More.
VP of Engagement and Education
Financial Health Institute
“It (financial planning) is most important for people who rely on SSI (Supplemental Security Income), Medicaid and Waiver Benefits because of a $2,000 resource cap,” Brand continued while stressing the need for a professional to help secure assets as there are numerous trusts with unique features and benefits for different needs.
“There are as many trusts as there are breeds of dogs,” attorney Susie Germany explained. Along with three aspects of financial planning: care planning, financial planning and legal planning that encompass a lot of different areas, Germany explained. “We look at the whole situation.”
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Vice president of programs at the Financial Health Institute Joanne McLain added, “A lot of people assume you need a significant amount of money to have a trust. That’s just not true. It’s a legal paper to help you out.”
A trust allows a transfer of assets without the estate going into probate court, and the court provides the final ruling on the division and distribution of assets to beneficiaries.
If that isn’t enough for you to start estate planning, add in an insurance settlement or an inheritance, because if you deposit a large sum of money in your bank account it can have significant financial repercussions.
“Oh, that can cause all kinds of problems,” said Germany, alluding to a potential loss of Medicaid or SSI benefits.
Another reason to get professional help with estate planning is state laws are different in different situations. “It varies from state to state” was a common refrain from many of the panelists to participants questions. And then there is the constant changing of federal laws.
“The big issue is the constant change in SSI and Medicaid regulations,” Germany explained.
Other Benefits of Estate Planning
An additional aspect of estate planning is a sense of relief families get once their affairs are in order.
“Financial planning can give you a sense of control of your assets,” said Michael Kilgore, vice president of engagement and education at Financial Health Institute. “It can lead to less stress and less worry.”
McLain added, “I work with so many different people who are in vulnerable situations that it can seem like there are very few options. We can help you through all of this. We help people see through the situation and give them the tools to help them get through life.”
Estate planning also allows someone to see the bigger financial picture.
“A lot of people don’t have a handle on their financial situation,” Germany said. “We help you process what you have and help guide you on how to leave things to people. We help you get your arms around your finances.”
And the people that are helping you along the way also get a benefit.
“Seeing the relief on people’s faces makes me passionate about this work,” Germany explained, as the other panelists agreed with the sense of accomplishment helping people plan their estates.
Guardianships are a whole different animal. A guardianship is a legal process utilized when a person can no longer make or communicate safe or sound decisions about his/her person and/or property or has become susceptible to fraud or undue influence.
Guardianships can remove people’s rights in numerous categories, including determining residence, consenting to medical treatment, possessing a driver’s license, the right to marry and even vote. And they differ from state to state.
Vice president of programs at the Financial Health Institute Joanne McLain says a plan of action on your estate is for the best interests of the people you love.
“Guardianships are a last resort,” Germany said. “A guardian has legal authority that is lasting. They prepare reports for the state. It’s more formal, and sometimes it’s necessary.”
Why People Put off Estate Planning
“People tend to put off estate planning like they do a root canal,” Germany said. “People don’t like to thing about losing control. It’s very emotional and psychological.”
“Think about why you are doing estate planning,” McLain said. “You are doing it for the best interests of the people you love.”
“And don’t let fear of the unthinkable stop you,” Germany added. “You don’t have to do everything today – you can do it in little manageable chunks.”
“Change happens in small steps,” Kilgore said.
The cost of estate planning can vary from $2,000-$5,000, and some of the cost can be paid for from a trust when it is funded. And just in case you need motivation, Brand described a case in which she helped a brain injury survivor who received a settlement.
“We were able to help her buy a car and a house from her settlement. It was awesome to see her quickly execute to have a place for her and her children to call a home.”
Resources to get you started
Here is a link to Fiduciary Roles and Responsibilities.