Tags Posts tagged with "Linda M. Toga"

Linda M. Toga

There are a number of questions that must be answered before a determination can be made. Stock photo

By Linda M. Toga, Esq.

Linda Toga, Esq.

THE FACTS: Approximately five years ago, my father remarried and he and his second wife, Mary, purchased a house together. At the time my father told me that he alone paid for the house and that his plan was for the house to pass to me and my sister when he died. My father is now very ill and suffers from advanced Alzheimer’s. He never updated his will, which leaves his entire estate to me and my sister.

THE QUESTION: What is going to happen to the house when he dies? Will my sister and I inherit the house?

THE ANSWER: What happens to the house will depend on a number of factors, including how title is held and whether Mary waived her marital rights in your father’s estate.

HOW IT WORKS: Generally when a married couple buys real property, the property is held jointly as “tenants by the entirety” unless the deed states otherwise. That means that upon the death of the first spouse, the surviving spouse owns the entire property outright. There is no need to have a new deed prepared transferring the property into the name of the surviving spouse since the transfer is automatic “by operation of law.” The surviving spouse need not take any action for ownership of the property to be transferred.

If, however, the deed states that the parties own the property as “tenants in common” or states that the parties each own a specific percentage of the property, the surviving spouse only owns the percentage of the property set forth in the deed. If your father owned the property with Mary as tenants in common, the share of the property owned by your father will pass under his will.

As I mentioned above, how title is held between spouses only addresses part of the question. What is going to happen to the house may also depend on whether Mary waived her marital rights and, if she did not, whether she chooses to exercise her right of election.

Mary may have signed a waiver stating that she was not going to enforce the rights she would have to handle your father’s estate and to receive a one-third share of that estate. Absent such a signed waiver, Mary may exercise her right of election and would be entitled to approximately one-third of your father’s entire estate, regardless of the terms of his will or the manner in which he held property.

For example, if your father owned the property in question jointly with you rather than Mary, and the property was valued at $300,000, Mary could demand that the estate satisfy her right of election by turning over to her assets with a value of $100,000.

Even if the property is held jointly with Mary so that she becomes the sole owner upon the death of your father, Mary can still demand other assets from your father’s estate if the value of the property passing to her by operation of law is not equal to one-third of your father’s total estate. Whether she makes such a demand will likely depend on her own financial health, the size of your father’s estate and her relationship with your father.

Even when there is no waiver, it is not unusual for a surviving spouse to honor the wishes of the decedent and decide against exercising her right of election.

Clearly, there are a number of questions that must be answered before a determination can be made about what will happen to the house when your father dies. Additional questions will arise if Mary decides to exercise her right of election. Under the circumstances, you should seek the expertise of an attorney with experience in estate administration to assist you when the time comes.

Linda M. Toga, Esq. provides legal services in the areas of estate planning and administration, wills and trusts, guardianship real estate, small business services and litigation from her East Setauket office.

Many boomers plan on using their assets to make their golden years golden.

By Linda M. toga, Esq.

Linda M. Toga, Esq.

THE FACTS: My husband and I are in our sixties and have three grown children. All were given the same opportunities growing up, but they did not all take advantage of those opportunities or make wise decisions about their futures. Our two daughters are financially secure and doing very well. Our son, however, has struggled and we expect will continue to struggle to make ends meet his entire life.

My husband and I have accumulated significant assets over the years. We have been generous to our children and have made an effort to treat them all the same despite the differences in their financial well-being.

Despite this fact, my son seems to be under the impression that because he needs more, he is entitled to more. He has made comments on a number of occasions suggesting that since we have the means to make his life easier, we should do so. It is clear that he expects that we will be leaving him a sizable inheritance, perhaps even more than we leave our daughters.

We are bothered by these comments for a number of reasons, not the least of which is that my husband and I are planning on using our hard earned money to travel and, if needed, to cover our health care costs. While we fully expect that all of our children will inherit some money from us, I do not believe that we will be leaving any of them substantial assets.

THE QUESTION: How do we make this clear to our son who seems to think he will see a windfall when we die?

THE ANSWER: You and your husband are not alone in having accumulated significant assets that you hope to spend on yourselves. Many boomers benefited by parents who were conservative savers and cautious spenders. Consequently, these parents often accumulated more wealth than they spent and passed that wealth on to their boomer children.

The boomers, on the other hand, may not have been such conscientious savers. Even if they were, they are finding that they are living longer, may need more money for health care and often believe that they need not leave substantial assets to their children since they did so much for them during their lives.

Like you and your husband, many boomers plan on using their assets to make their golden years golden. That is your right. You earned it. You can spend it. However, if you do not want your son to be surprised or resentful when he does not inherit the kind of money he may expect will be coming his way, the best thing to do is to tell him outright.

Perhaps you can share with him the choices you made over the years that resulted in having a significant nest egg. Then tell him how you hope to spend your hard earned money on yourselves while you enjoy a long and healthy life.

You may discover that the comments he has made about a large inheritance were made in jest and that he isn’t really counting on a windfall. That would be the best scenario.

Even if he expresses disappointment and/or anger, you and your husband should feel better about the fact that you were open and honest with him. He can ignore what you say or he can use what you tell him to better plan for his future. In either case, having the conversation will ensure that when you and your husband pass away, he is not blindsided.

Linda M. Toga provides personalized service and peace of mind to her clients in the areas of elder law, estate administration and estate planning, real estate, marital agreements and litigation. Visit her website at www.lmtogalaw.com or call 631-444-5605 to schedule a free consultation.

by -
2 38

By Linda Toga, Esq.

The Facts: My uncle died without a will. He was never married and has no children. He owned a house and a car and likely died with significant debts. No one in the family wants to handle his estate because they are concerned that they will be personally responsible for paying that debt.

The Questions: Are their concerns valid? What happens if no one steps up to be named administrator?

The Answer: When someone dies without a will, the intestacy statute controls what happens to his or her estate. Generally, someone related to the decedent will petition the Surrogate’s Court in the county where the decedent lived to be named administrator of the estate.

In addition to filing a petition about the decedent, his family and his assets, the petitioner must provide the court with an original death certificate, signed waivers from other family members who are in line to inherit from the estate and, in many cases, a family tree. That family tree is needed to establish that all the relatives who are entitled to notice of the administration proceeding are, in fact, given notice.

Once appointed, the administrator is responsible for marshalling and liquidating the decedent’s assets and depositing the funds into an estate. In your uncle’s case, the administrator would close any bank or brokerage accounts your uncle may have had and arrange for the sale of his house and car. All proceeds would be deposited into an estate account.

The administrator then uses the funds in the account to pay the expenses of administering the estate and the legitimate debts of the decedent. Once those are paid, the administrator is responsible for distributing the balance in the estate account to the appropriate family members based upon the intestacy statute.

Since your uncle did not have a spouse or children, the assets remaining in the estate after the payment of expenses and debts would pass to his parents if they are alive. If they predeceased your uncle, the assets would be distributed to his siblings in equal shares. The administrator has no discretion with respect to distributions. She must follow the provisions of the statute.

The administrator is not personally obligated to pay any of the decedent’s creditors and is reimbursed from estate funds for any expenses she may incur in administering the estate. In addition, the administrator is entitled by law to receive commissions based upon the value of the estate. Since commissions are considered an administrative expense, they are paid before the decedent’s creditors and before distributions are made to family members.

If no one steps up to be named administrator, the county public administrator may be appointed to handle the estate. The Surrogate’s Court would appoint the public administrator who would then handle all aspects of estate administration set forth above. If no one in your family is willing to serve as administrator, any of your uncle’s creditors can petition the Surrogate’s Court to name the public administrator to handle your uncle’s estate. That way the creditors can be sure that they will be paid assuming there are adequate assets in the estate. 

Linda M. Toga, Esq. provides legal services in the areas of estate administration and planning, real estate and litigation from her East Setauket office.

by -
1 1250

By Linda M. Toga

The Facts:
I am an only child, widowed and have no children. I have very specific wishes relating to my funeral and burial.

The Question:
Since I have no parents, spouse, children or siblings, who will be in charge of my remains and responsible for arranging my funeral and burial?

How It Works:
Generally, a person’s parents, spouse or children have the authority to make funeral and burial arrangements for that person. However, since these people do not exist in your case, you should consider naming an agent to make these arrangements for you. 

In New York State there is a statute that allows you to do just that. You may appoint anyone you wish, including a friend, relative or clergy person, to make all the necessary funeral and burial arrangements.

Of course, before naming anyone as your agent for this purpose, you should discuss your wishes with that person to be sure he/she is willing to take on the responsibility of making sure your funeral and burial plans are implemented.

In order to legally appoint someone to control your remains and handle your funeral and burial, you must name your agent in a document titled “Appointment of Agent to Control Disposition of Remains.” I generally refer to the documents as a Disposition of Remains Statement or DRS. 

In the DRS, you not only identify the person who will actually be carrying out your wishes with respect to your funeral and burial, but you can also set forth exactly what those arrangements should be.

For example, you can identify the funeral home you want used, whether you want to be buried or cremated, what music should be played at your wake or if you want a religious grave-side service.

You can be as detailed as you wish, going so far as to set forth what food should be served at any post-burial luncheon  that may be arranged and what clothing and jewelry you want to have on when you are buried.

As an alternative to stating your wishes in the DRS and hoping that your agent is able to make the necessary arrangements, you can preplan your entire funeral and burial with the funeral home of your choice in advance.

If you preplan your funeral, you will have the option of prepaying for the arrangements as well.

That way your agent’s responsibilities will be limited to making arrangements for your remains to be brought to the funeral home and notifying the people who would likely be attending the funeral.

Whatever route you decide to take, you should seek the assistance of an elder law attorney to be sure the DRS is properly prepared and executed.

Linda M. Toga provides legal service in the areas of estate planning, estate administration, Medicaid planning, wills and trusts, marital agreements, small business services, real estate and litigation from her East Setauket office.

by -
0 39

By Linda M. Toga, ESQ.

The Facts: After my mother died, my father transferred his assets into a trust to avoid probate. He frequently told me how pleased he was that everything would pass to me and my sister without having to go to the Surrogate’s Court. After my father died last month, I discovered that he had a bank account that was in his own name. Apparently he did not transfer the funds in the account into a trust account.

The Question: What must I do in order to close the account?

The Answer:  The situation you are facing is very common since it is not at all unusual for people to set up a trust but not transfer all of their assets into the trust. Luckily for you and your sister, closing the account should not be too burdensome.

The steps you must take to close your father’s account depend on the value of the account. If the account has a balance of greater than $30,000, and your father did not have a will, someone must apply to the Surrogate’s Court for letters of administration. Both you and your sister have priority over other family members when it comes to who can serve as administrator.

The petition for letters of administration must include information about the person who is actually applying for the letters in addition to information about your father, your family and the assets over which you are seeking control. You may have to give some people notice that a petition for letters is being filed and you may need to obtain waivers from other people. The Surrogate’s Court also requires an original death certificate and a check to cover the filing fee.

If your father’s account has a balance of greater than $30,000, and he died with a will, the person named as executor in the will should petition the Surrogate’s Court for letters testamentary. Like the petition for letters of administration, the petition for letters testamentary must include information about the petitioner, information about your father and his family and the assets that will pass under the will. The original will and an original death certificate must be included with the petition, in addition to a filing fee.

Depending on who was named in the will, other documents may be needed and you will likely need to give notice of the petition to certain people and obtain waivers from others. If the account is the only asset in your father’s name, the filing fee payable to the Surrogate’s Court for processing the petition, whether it’s for letters of administration or letters testamentary, will depend on the value of the account.

If the value of the account is less than $30,000, you can obtain the Surrogate Court’s permission to close the account by filing with the court an Affidavit in Relation to Settlement of Estate Under Article 13. The filing fee is only $1 and the affidavit is quite straightforward. In completing the affidavit, you will need to provide the name and address of the bank where the account is located, the account number and the balance in the account.

If satisfied with the affidavit, the Surrogate will issue you letters giving you authority to close the account. If you find other assets in your father’s name after filing the affidavit, you will have to file a new affidavit since the authority granted by the court in connection with the filing of an Affidavit in Relation to Settlement of Estate Under Article 13 is limited to the assets described in that affidavit.

To save time and ensure that you are handling the account properly, it is advisable to contact an attorney experienced in estate administration. That way you can be certain that the proper documents will be prepared and filed on behalf of your father’s estate.

Linda M. Toga provides legal service in the areas of estate planning, estate administration, Medicaid planning, wills and trusts, marital agreements, small business services, real estate and litigation from her East Setauket office.

by -
0 48

By Linda M. Toga

The Facts:    I want to leave a significant amount of money to my granddaughter in my will, but I am concerned that she is not particularly good with money.

The Question:  Is there a way I can leave her a bequest but be assured that the money will not be spent foolishly?

The Answer:  Yes, absolutely! Clients frequently express concern that bequests they make in their will may be squandered either because their beneficiaries lack the maturity to handle the funds in a responsible manner or suffer from some sort of substance abuse or addiction that clouds their judgment.

In such circumstances, it is best not to make an outright bequest to the beneficiary but to instead have the funds pass through a testamentary trust that you (the testator) create in your will.

In order to create such a trust in your will, you will need to identify the individuals who are going to be the beneficiaries of the trust, indicate which assets will be held in the trust and name a trustee who will administer the trust. You will also need to set forth the terms of the trust, i.e., how the trust funds are to be used, when distributions will be made to the beneficiaries, whether the trustee has the discretion to withhold or accelerate the distributions, whether distributions are contingent on the performance of the beneficiary and what will happen to the trust assets if the beneficiary dies before the trust terminates.

My clients who want to avoid a beneficiary receiving a large inheritance at an early age generally direct their trustee to distribute all of the trust assets by the time the beneficiary is 30. They sometimes have the trustee make a single distribution of the entire trust corpus at a specific age but, just as often, they spread the distributions out over time. In either case, it appears that the general consensus is that most people have learned to handle money responsibly by the time they reach the age of 30 since most of the testamentary trusts I draft terminate by the time the beneficiary turns 30.

In contrast, clients who have me prepare testamentary trusts for beneficiaries who suffer from substance abuse or addiction often include a provision that directs the trustee to continue making distributions for the lifetime of the beneficiary. Such distributions may be made to the beneficiary directly but, more often than not, the trustee is directed to make payments to third parties on behalf of the beneficiary. For example, the trustee may be directed to pay the beneficiary’s rent or mortgage or to cover the cost of insurance or tuition.

Whether the beneficiary is simply young and inexperienced or dealing with an addiction, my clients generally give their trustee discretion to distribute trust assets to the beneficiary if they believe doing so is in the beneficiary’s best interest.

As mentioned above, a testamentary trust can provide that distributions are conditioned on the performance of the beneficiary. Some people liken this feature to giving the testator the ability to control from the grave.

While that might be true, it should be noted that there are limits to how much control can be maintained from the grave. For example, while a testator can certainly direct his trustee to only distribute the trust assets upon the beneficiary’s graduation from college, he cannot condition distributions on the beneficiary divorcing his/her spouse or only marrying within the faith. Such conditions are against public policy and are unenforceable.

Despite any limitations that might exist, testamentary trusts are incredibly flexible and allow for a great deal of creativity. They can not only protect a testator’s assets from being squandered after his death, but they can protect the beneficiary against his/her own foolishness or bad habits. As such, it would be worthwhile to discuss with an attorney experienced in estate planning whether a testamentary trust is right for you and your granddaughter.

Linda M. Toga provides legal services in the areas of wills and trusts, estate planning and estate administration, marital agreements, small business services, real estate and litigation from her East Setauket office.

by -
0 1356

By Linda M. Toga, Esq.

The Facts:  I created an irrevocable trust a number of years ago. However, my circumstances have changed dramatically, and the trust no longer suits my needs. I want to revoke the trust and sell the assets that are in the trust.

The Question: Although the trust is irrevocable, is there a way it can be revoked?

The Answer: Good news! Fortunately, there are circumstances when an irrevocable trust can, in fact, be revoked. If your needs and goals have changed to the point that the trust no longer serves a useful purpose, you may want to amend or revoke the trust. Whether you are able to do so will depend on the language of the trust document itself and the cooperation of the beneficiaries.

Generally, if all of the beneficiaries are of legal age and competent, they can sign a document giving their consent to the amendment or the revocation of the trust. The beneficiaries’ signatures must be notarized for the amendment/revocation to be effective. If any of the beneficiaries are minors, you will not be able to amend or revoke the trust since minors cannot legally give consent.    

Assuming that you are able to revoke your trust, you will also have to change the title on any trust assets such as real property or motor vehicles that have recorded titles. Accounts held by the trust will also need to be retitled if the trust is revoked. This may or may not need to be done if you simply amend the terms of the trust without removing trust assets.

When amending or revoking a trust, it is very important that the document setting forth the changes to be made to the trust properly identify the trust and the beneficiaries. It is also important that all trust assets be accounted for and properly retitled when appropriate.

To avoid mistakes and problems down the road either with an unhappy beneficiary or with assets that are still held by a trust that no longer exists, it is best to retain the services of an attorney with experience creating and revoking trusts.

Linda M. Toga, Esq. provides legal services in the areas of litigation, estate planning and real estate from her East Setauket office.

by -
0 1259

By Linda M. Toga, Esq.

The Facts: I want to give my children and grandchildren significant cash gifts for the holidays, but I am confused about gift tax liability and about how gifting may impact my future eligibility for Medicaid in the event I need long-term care.

The Question:

Would you explain how gifts are treated for Medicaid and gift tax purposes?

The Answer: As they look ahead to the holidays, many clients call with questions about gifting and its consequences. There is a great deal of confusion surrounding gifts, and clients often assume that gifts that are exempt from gift tax are also exempt transfers under the Medicaid rules. Unfortunately, that is not the case.

When a person applies for Medicaid to cover the cost of care in a nursing home, social services looks at the applicant’s financial records going back five years. Significant gifts, also known as uncompensated transfers, made by the applicant during the five-year look-back period raise a red flag and can lead to a penalty period during which the applicant is denied benefits. While any gift is subject to scrutiny by social services, gifts of $2,000 or more, or a pattern of gifting in smaller amounts, are certain to prompt questions and likely to result in penalties under current Medicaid rules.

In contrast, annual gifts of up to $14,000 to any number of people are exempt from gift tax under the IRA code. Such gifts are essentially under the radar for tax purposes since they need not be reported and have no adverse gift tax consequences. A federal gift tax return only needs to be filed if a donor makes a gift in excess of $14,000 to any one individual in a calendar year.

For example, if someone gifts their son $20,000, the donor will have to report the $6,000 gift on a federal gift tax return that should be filed along with his/her personal income tax return next April. Even then, the donor will not incur any gift tax liability and no gift tax will be due unless and until the donor’s reportable lifetime gifts exceed the federal estate tax exclusion amount in effect at the time.

While the current exclusion amount is $3,125,000 and the figure is scheduled to increase annually for a number of years, it is important to note that the value of reportable lifetime gifts may be added to the value of your estate at the time of your death to determine if federal estate tax will be due. You cannot simply gift away your assets during your lifetime to avoid estate tax.

Based upon the facts set forth above, it is clear that a gift that does not adversely impact a donor’s taxes will likely result in denial of Medicaid benefits for a period of time if the donor applies for Medicaid within five years of making the gift. For this reason, it is important to carefully plan any gifting that you may be considering and to look at the impact that gift will have both on taxes and on your ability to obtain benefits should the need arise.

Linda M. Toga, Esq. provides legal services in the areas of litigation, estate planning and real estate from her East Setauket office. The opinions of columnists are their own. They do not speak for the paper.

by -
1 1429

By Linda M. Toga, Esq.

The Facts: I recently divorced my spouse. I was told that once the divorce was finalized, it won’t matter that my spouse is named as the primary beneficiary of my estate in my will since that designation will essentially be ignored.

The Questions: Is it true that my estate will not pass to my ex-spouse regardless of the fact that he is named as a beneficiary in my will? If so, is there any reason for me to update my will? What other documents, if any, should I revise now that I am divorced?

The Answer:  It is true that under New York law, if you are divorced from your spouse at the time of your death, the bequests made to him in your will will be revoked and your estate will pass as if your ex-spouse predeceased you.

In addition, if you named your ex-spouse as executor, that designation will also be revoked. However, the fact that the bequest to your ex-spouse and his appointment as executor are automatically revoked as a result of your divorce, it is important that you review not only your will but also your power of attorney, health care proxy, life insurance and account beneficiary designations and the title to your real property to ensure that your wishes with respect to your assets and end-of-life care are properly memorialized and honored.

If, for example, your ex-spouse was named in your will as your executor and his sister was named as your successor executor, you may want to revise your will so that no one in your ex-spouse’s family is in charge of your estate. Similarly, if you created a trust in which you named your ex-spouse or someone in his family as a trustee or beneficiary, now that you are divorced you may want to name other people to serve as trustee and to enjoy the benefits of the trust.

As for your power of attorney and health care proxy, if you do not want your ex-spouse to be your agent, you should have new advanced directives prepared. Otherwise the person you named as your successor agent will become your primary agent, leaving no successor agent in the event the primary agent predeceases you. If that were to happen, and you got to the point where you could not make medical decisions and handle your own affairs, a court may be asked to name a guardian to act on your behalf. Clearly the better course of action is for you to update your power of attorney and health care proxy in light of your divorce.

While you are at it, you should also review and, if necessary, update the beneficiary designation on your life insurance policy and retirement plans and remove your spouse as a co-owner on joint accounts and jointly held property. Since some retirement and pension plans are governed by a federal law that preempts the New York law revoking beneficiary designations from taking effect, you may need to obtain your ex-spouse’s consent to change some of your accounts and designations.

While you are making the necessary changes to your accounts, estate planning documents and beneficiary designation forms, you should consider asking your relatives to review their estate planning documents to ensure that their estate plans take into consideration the fact that you are divorced. It is likely that your parents, for example, would want to revise their estate planning documents if they left their estates to you and your ex-spouse, or if they named your ex-spouse as their agent under their powers of attorney.

Although I urge you to review with an experienced estate planning attorney your estate plan, your beneficiary designations and the manner in which your assets are titled in light of your divorce, I generally recommend that clients revise their estate planning documents as soon as a divorce action is commenced. That way if they die before their divorce is finalized, they can be assured that their soon to be ex-spouse will not inherit everything, be in charge of their estate or be in a position to make financial and medical decisions on their behalf in the event of their incapacity.

Linda M. Toga, Esq. provides legal services in the areas of litigation, estate planning and real estate from her East Setauket office.

by -
1 1188

By Linda M. Toga, Esq.

The Facts: I am in my early fifties and in good health but I am concerned about depleting my assets in the event I need to enter a skilled nursing facility. Some of my friends have purchased long-term care insurance and have complained about the cost of their policies.

The Question: Is long-term care insurance a good value?

The Answer: Long-term care insurance can be a good value, but whether it is a good option for you depends on many factors, not the least of which is how much you have to spend on your long-term care and the value of the assets you want to protect.

People between the ages of 55 and 64 account for more than 50 percent of the people who purchase long-term care insurance, and nearly one-fourth of those people purchase the insurance to protect their assets. They are basically buying long-term care insurance to ensure that their assets will pass to their heirs rather than being depleted paying for their care. If you have assets to protect, and have the income to cover the annual premiums, long-term care insurance can be an excellent option for you.

The cost of long-term care insurance is based upon your age when you purchase the policy, the amount of the daily benefit paid by the policy, the term of the coverage, how long you must pay for your care before coverage begins and whether you purchase any riders to the policy such as an inflation rider that effectively increases the daily benefit amount. In order to apply for coverage, you will be required to undergo a physical exam and a mini mental competency test as part of the application process.

The younger you are when you purchase a long-term care insurance policy, the lower your annual premium. For example, a policy with a four-year benefit period that might cost you $2,225 annually if purchased at age 55 will cost over $3,700 annually if purchased at age 65. Although purchasing coverage at age 55 rather than 65 may result in you paying the premium for a longer period of time, when you make a claim, you will likely have paid less for your coverage by buying sooner rather than later.

Using the figures set forth above, if you buy a policy at age 55 and make a claim for benefits at age 85, you will have paid just under $68,000 for coverage. However, if you buy the same policy at age 65 and make a claim at age 85, you will have paid nearly $75,000 for coverage. Clearly, the savings enjoyed by purchasing a policy in your fifties rather than your sixties are significant, as is the peace of mind that comes from knowing your long-term care needs will be met. In addition to saving money, buying a policy when you are younger avoids the risk that you may subsequently develop health issues that preclude you from getting coverage later in life.

Even if you wait until you are 70 to buy long-term care insurance and your health deteriorates somewhat between now and when you purchase a policy, doubling or even tripling the annual premium, the cost of a policy over time will likely be small compared to what you would have to pay to cover your long-term care needs. 

For example, at today’s prices, the average annual cost of a semi-private room in a nursing home on Long Island is at about $155,000. The average stay is three years. That means individuals who do not have insurance or government benefits to cover the cost of long-term care will pay $465,000 over three years for their care. Assuming your long-term care insurance premium is $9,000 and you paid that premium every year until age 85 when you put in a claim for benefits, the total you will have paid for three years of coverage will be $135,000. That’s a $330,000 savings.

Although the examples set forth above do not take into consideration the future value of the money you use to pay your premiums over time, or the case where a person makes a claim after only making one or two annual premium payments, they illustrate why long-term care insurance can be a good value for many people.

Since more than 75 percent of people over the age of 65 will need long-term care at some point in their life, insuring against the risk of depleting savings and not having the assets to pay for care makes sense for many people. Since insurers now offer riders that include money back options and the option of using a death benefit toward long-term care services, even those people who have balked at the idea of buying long-term care insurance because they worry that they may die without making a claim can find a policy that works for them.

Insurance is complicated and everyone’s needs are different. Before buying a long-term care insurance policy, you should discuss your situation with an experienced elder law attorney and a reputable insurance agent with expertise in the area of long-term care insurance. That way you can be sure that the policy you decide upon includes the features that are best suited to your situation.

Linda M. Toga, Esq. provides legal services in the areas of litigation, estate planning and real estate from her East Setauket office.