Cava Faulkner

With people living longer than ever before, more and more seniors require long-term healthcare services in nursing homes and assisted living facilities. However, such care is extremely expensive, especially when it’s needed for extended periods of time.

Traditional healthcare insurance doesn’t cover such services, and though Medicare does pay for some long-term care, it’s quite limited, difficult to qualify for, and requires you to deplete nearly all of our assets before being eligible (or do proactive planning to shield your assets, which we can support you with). To address this gap in coverage, long-term care insurance was created.

Intensive Care

First introduced as “nursing home insurance” in the 1980s, long-term care insurance is designed to cover expenses associated with long-term skilled nursing services delivered in a nursing home, assisted living facility, or other senior care setting, though some of today’s policies cover care delivered in your own home as well.

Such intensive care is required when you are no longer able to care for yourself, often at the end of your life. These policies cover the cost of skilled nursing services that support you with basic self-care tasks, such as bathing, feeding, and using the bathroom.

These are known as activities of daily living (ADLs) and generally include:

• Ambulating (walking or getting around)
• Feeding
• Bathing
• Dressing and grooming
• Using the toilet
• Continence management
• Getting in and out of bed or a chair

Before your coverage kicks in, most policies require that you demonstrate you have lost the ability to engage in at least two or three ADLs. Most policies also have a deductible, or elimination period, which is a set number of days that must elapse between the time you become disabled (eligible for benefits) and the time your coverage kicks in.

Many policies offer a 90-day elimination period, but others can be longer, shorter, or even have no elimination period at all. Of course, the shorter the elimination period, the more expensive the premium.

Additionally, long-term care policies typically come with a predetermined benefit period, which is the number of years of care it will pay for. A benefit period of three to five years, for example, is a quite common duration for such policies. Most policies also come with a cap on the dollar amount of coverage that will be paid for care on a daily basis, known as a daily benefit amount.

Getting Covered

Obviously, the younger and healthier you are when you buy the policy, the cheaper the premiums will be, so the sooner you invest in coverage, the better. In fact, most policies exclude certain pre-existing conditions, so if you wait until you become ill, it can be impossible to find coverage.

For example, if you have any of the following conditions, it generally disqualifies you from obtaining coverage:

• You already need help with ADLs
• You have AIDS or AIDS-Related Complex (ARC)
• You have Alzheimer’s Disease or any form of dementia or cognitive dysfunction
• You have a neurological disease, such as multiple sclerosis or Parkinson’s Disease
• You had a stroke within the past year to two years or have a history of strokes
• You have metastatic cancer
• You have kidney failure

Increasing Premiums, Decreasing Benefits

With the elderly population booming, there has been a surge in demand for long-term care services, which has led to a marked increase in the cost of such policies. At the same time, many insurers have been cutting back on the benefits their policies offer.

Given this, other types of hybrid policies are springing up. One increasingly popular type of hybrid policy combines long-term care insurance with life insurance. With this type of policy, if you don’t use the long-term care benefits, the policy pays a death benefit to your family when you pass away.

If you are looking to purchase long-term care insurance, you should speak with multiple insurance providers and compare their benefits, care options, and premiums. Different companies may offer the same coverage and benefits, but they can vary dramatically in price. Always ask about the insurance company’s history of rate increases, including the amount of the most recent increase.

Choose Wisely

For the best chances of success when shopping for a policy, get help from a fee-only planner, who is not compensated based on your choice of coverage. Or, if you are working with a commissioned agent, meet with a lawyer like us with experience in elder law, who can review the policy terms to ensure it’s a good fit for you before you sign on the dotted line.

When meeting with an insurance provider, you must get answers to following three questions about your policy:

1. How long is the elimination period before the policy begins paying benefits?
2. What capacities, or ADLs, must you lose before coverage kicks in?
3. How many years of care are covered?

Buying long-term care insurance should be a family affair, because you are going to need your family members to advocate for you and file a claim for the policy when you need to use it. Given this, make sure your family knows what kind of policy you have, who your agent is, and how to make a claim.

What’s more, you should pre-authorize the right person to speak to the insurance company on your behalf, and not just rely on a power of attorney. That said, you should definitely have a well-drafted, updated, and regularly reviewed power of attorney on file as well.

Keep Your Policy Updated

Once you are in your 40s, your long-term care policy should be reviewed annually to evaluate new insurance products on the market and update your policy based on your changing needs. Whatever you do, once you have a policy in place, make sure you don’t miss a premium payment, because if you stop paying, even for a short period of time, you’ll lose all of the money you invested and will have no access to the benefits when you need them.

Reach out to us, as your Personal Family Lawyer®, for support in finding the right long-term care policy for your particular situation. Long-term care insurance, along with life insurance, are key components in your estate plan. When combined with the right estate planning vehicles, you can rest assured your family will be protected and provided for no matter what happens to you. Contact us today to learn more.

Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, contact us to schedule your Family Wealth Planning Session. Even if you already have a plan in place, we will review it and help you bring it up to date to avoid heartache for your family. Schedule online today.

A celebrity’s image and likeness can continue to produce considerable income after death. This type of intellectual property is considered part of your estate, and the IRS can tax its value. In the case of pop star Michael Jackson’s estate, that recently meant an IRS bill to the tune of $64.5 million, years after his death, which is about 40% of his likeness’ valuation of $161 million. We can all learn tax lessons from celebrity estate plans.

Michael Jackson’s estate planning fail could certainly have been avoided by using one of these estate-planning strategies that minimize the taxable value of a person’s image and likeness.

Robin Williams made a charitable bequest of his image and likeness to a foundation. It was set up in his name, allowing his estate to get a charitable deduction against the estate tax.

Williams also established a 25-year time ban to prevent any future exploitation of his image. A time restriction lowers the value of a celebrity’s name and likeness because the value is typically lower at the end of the ban than at the date of death.

Some states don’t recognize inheritable postmortem rights to likeness. This means the estate can’t profit from it. Consider your state’s laws when estate planning so you can benefit from any available tax breaks.

On October 15th, nearly two months after the death of Black Panther star Chadwick Boseman, his wife, Taylor Simone Ledward, filed documents with the Los Angeles court seeking to be named administrator of his estate. Earlier this year, Boseman and Ledward were married, and the marriage gives Ledward the right to any assets held in Boseman’s name at his death.

Boseman died at age 43 on August 28th following a four-year battle with colon cancer, and based on the court documents, it seems the young actor died without a will. While Boseman’s failure to create a will is surprising, he’s far from the first celebrity to do so. In fact, numerous big-name stars—Aretha Franklin, Prince, and Jimi Hendrix—all made the same mistake.

What makes Boseman’s story somewhat unique from the others is that it seems likely the young actor put some estate planning tools in place, but it’s possible he didn’t quite finish the job. Based on the number of hit films he starred in and how much he earned for those films, several sources have noted that Boseman’s assets at the time of his death should have been worth far more than the approximately $939,000 listed in court documents.

So what happened to the rest of Bosman’s wealth? Seeing that his death wasn’t a surprise, some commentators have suggested that the bulk of Boseman’s assets passed through private trusts. But if that’s the case, why didn’t he also have a will, which would almost always be created alongside trusts?

We may never know, but you can learn from Boseman’s death and the experience of his wife, Taylor, so you can make the choice to keep your family out of the court process and the public eye, if that’s what you desire for the people you love.

In addition to starring as Marvel Studio’s first African-American superhero, Boseman was famous for playing a number of real-life African-American heroes during his career. His most notable roles included portraying baseball great Jackie Robinson in 42, legendary musician James Brown in Get On Up, and Supreme Court Justice Thurgood Marshall in Marshall.

Boseman continued to work on multiple movies, even after being diagnosed with Stage 3 colon cancer in 2016. Highly protective of his private life, the young star kept his illness a secret from everyone, except for a few friends and family members. His death was a shock not only to his millions of fans, but also his close colleagues.

Indeed, even Black Panther director Ryan Coogler and Da 5 Bloods director Spike Lee reportedly had no idea Boseman was fighting cancer. And Marvel boss Kevin Feige only learned about his diagnosis on the day the actor died.

Boseman and Ledward, a singer who graduated from California State Polytechnic University, started dating in 2015, about a year before his cancer diagnosis. The couple were engaged in October 2019, and were reportedly married in a secret ceremony a few months before he died. Besides his wife, Boseman leaves behind his parents, Leroy and Carolyn Boseman, and two brothers, Derrick and Kevin Boseman. Neither Boseman nor Ledward have children.

Based on court documents, the value of Boseman’s estate subject to $938,500. Yet according to Celebrity Net Worth and other similar sources, Boseman’s total estate was worth much more than that at the time of his death—an estimated $12 million. Given this, it may be that the bulk of the actor’s assets were held in trusts, which aren’t available to the public, and are being handled privately through his attorneys.

Since the majority of Boseman’s estate is not subject, he likely did put a fairly extensive estate plan in place to protect and pass on his financial wealth and other assets to his loved ones. Even so, the fact that he left roughly $1 million in assets unprotected would have been a glaring blind spot in his plan, and this has us curious about what Boseman’s lawyers were thinking, and whether Boseman was properly informed and educated about his planning decisions before his death. Unfortunately, many people, even those who work with fancy lawyers, do not understand their planning decisions, and their family must deal with the resulting consequences when it’s too late.

Because Boseman allegedly died without a will, called intestate, California law governs the distribution of any assets titled in Boseman’s name at the time of his death. Under the state’s intestate succession rules, his surviving spouse is entitled to inherit his estate, and she also has priority to serve as his estate’s administrator. Given the law, it’s almost certain the court will grant Ledward’s request to be appointed administrator of his estate and award her the entirety of the assets titled in his name at the time of his death.

As it stands now, Boseman’s wife must go through the court process to claim her husband’s remaining assets. This not only requires her to go through what could be lengthy court proceedings, but it also opens up her husband’s estate—and her future inheritance—to the public eye, which is something we imagine Boseman would have wanted to avoid.

There is one alternative possibility, which is total speculation on our part, that perhaps there was a will, maybe even created before the 2020 marriage, and the family all agreed not to file it with the court given the marriage and whatever the family may have known about Boseman’s wishes to benefit Ledward. Finally, we also wonder if there is any possibility that  was specifically opened to cut off any future creditor claims against the estate. Once closed, no creditors will ever be able to come after Boseman’s estate in the future.

Given that Boseman likely used trusts to protect most of his assets, we would have recommended Boseman place all of his assets in trusts—either revocable living trusts, irrevocable trusts, or a combination of the two. By doing so, upon his death, those assets would immediately transfer to whomever he named as beneficiaries without the need for court intervention. Moreover, such transfers would happen in private, without Boseman’s assets or his loved one’s being scrutinized in the public eye. Indeed, this is what’s likely happening to the balance of Boseman’s assets that were not listed in court documents.

If trusts were used, we would have expected to see a document called a “pour-over will” created alongside Boseman’s trusts. Because it’s not practical to put some types of assets, such as vehicles, into a trust, and it can be challenging to move every single asset into a trust before you pass away, the pour-over will acts as a backup, and we always include a pour-over will with the estate plans we create for our clients.

Unlike a traditional will, which is used on its own to distribute your entire estate to your beneficiaries upon your death, a pour-over will works in conjunction with a trust. With a pour-over will in place, all assets not held by the trust upon your death are transferred, or “poured,” into your trust through process. From there, those assets are distributed to your beneficiaries as spelled out by the trust’s terms.

Had Boseman created a pour-over will, the remaining $938,500 worth of assets in his estate would have been transferred into a trust and distributed to his family under the terms he laid out in the trust.

Yet, while a pour-over will allows assets not held in trust to be transferred into a trust following your death, the property that passes through the pour-over will must still go through.

To this end, a pour-over will should primarily be used as a backup to a trust, and you should do your best to transfer, or fund, all of your most valuable assets to the trust while you are still alive.

As your Personal Family Lawyer®, we’ll not only help you create the right trusts to hold your assets, we’ll also ensure that your assets are properly funded to your trust throughout your lifetime, which is a service few other lawyers offer.

Next week, we’ll continue with part two of this series on the estate planning lessons to learn from Chadwick Boseman’s untimely death

Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, contact us to schedule your Family Wealth Planning Session. Even if you already have a plan in place, we will review it and help you bring it up to date to avoid heartache for your family. Schedule online today.

Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, contact us to schedule your Family Wealth Planning Session. Even if you already have a plan in place, we will review it and help you bring it up to date to avoid heartache for your family. Schedule online today.