I need advice on estate planning, wills and trusts.

I'm 56, divorced, retired military, in my second career, have a mortgage, and a fair amount of life insurance. Some of the life-insurance, paid for through my military retirement, is encumbered by a Financial Settlement from divorcing after 31 years (18 of that in the Military). I'm in a second career (federal government - 14.5 years) and have retirement (federal Employee Retirement System (FERS)) and life insurance (Federal Employee Group Life Insurance (FEGLI). The ex-wife is currently the beneficiary. I now have a partner who I would like to make the beneficiary, but I want to ensure what assets I have are protected and channeled in the direction I want. Shielding assets from taxes and medicaid is also important. Should I be looking at a will or a trust?

Grand Junction, CO -

Attorney Answers (3)

James A Littlepage

James A Littlepage

Estate Planning Attorney - Grand Junction, CO
Answered

Neither a Living Revocable Trust or a Will enables you to protect assets from your ex-wife or from a Medicaid lien.

If you are not under a court order to name your ex-wife as a beneficiary of your life insurance, Colorado law voids the beneficiary designation upon the dissolution of marriage. However, to be on the safe side, I'd still change the beneficiary.

Unless your estate is greater than $5,250,000 your estate will not be subject to the federal estate tax. However, you may want to establish an estate plan than would avoid probate and minimize your exposure to a Medicaid lien. There are also methods available to redistribute assets in order to meet the "spend down" of resources that Medicaid requires.

These are complicated issues and procedures. Your first step is to locate an experienced estate planning attorney who also is knowledgeable about Medicaid Planning.

Legal Disclaimer: James A. Littlepage is licensed to practice law in Colorado, and as such, his answers to Avvo... more
Kelly Scott Davis

Kelly Scott Davis

Trusts Attorney - Cheyenne, WY
Answered

As Attorney Littlepage states, neither a Living Revocable Trust or a Will enables you to protect assets from a Medicaid lien. While an Irrevocable Trust might work for Medicaid protection, provided it is established more than five years before you make application, the terms and conditions that are required are so onerous and restrictive that most people don't want to give up that much control. One of the simplest and best tools for protecting your assets from Medicaid recovery is a durable general power of attornet with unresticted gifting powers. This isn't something you will find on line and I suggest you consult with an experienced elder law attorney to review your options. You are lucky that there are several good ones in Grand Junction.

Christopher Daniel Leroi

Christopher Daniel Leroi

Estate Planning Attorney - Greenwood Village, CO
Answered

It depends. Both devices could work to accomplish your goals. With every estate plan, it needs to be personally drafted for you and so you would want to sit down and talk with an attorney at least by phone. Most of us who do estate planning do so for people across the estate and across the country. David Rich out of Boulder, CO on Avvo is excellent. I have been doing estate planning over the past 22 years. I could give you more names and credentials if you would like.

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