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Why Estate Planning Matters for Baby Boomers’ Senior Living Accommodations

April 12, 2024
Strategies like living trusts and irrevocable trusts help baby boomers protect wealth, support independence and senior residence preferences, and plan for Medicaid approval requirements.

A Senior Housing News article, “New Report Sheds Light on Baby Boomers’ Desired Senior Living Services, Amenities,” cited interesting research on baby boomers and their preferences for senior living accommodations. An estimated 76 million baby boomers are beginning their move into senior living arrangements.

Senior Housing News’ article is based on The American Seniors Housing Association survey of 7,000 people, 80% of whom were baby boomers, surveyed between December 2021 and March 2022 on family and household characteristics, living situations, and where they prefer to live. Over 30% of respondents lived with another person. A large portion of these respondents, almost 60%, indicated a move in the next four years, possibly into a senior living community.

Why Estate Planning Is Important for Baby Boomers

For baby boomers contemplating a move to senior living communities, estate planning strategies can be tailored to suit individual needs and preferences. Estate plans that protect wealth, support independence, and anticipate Medicaid approval requirements will position baby boomers to preserve money when applying for Medicaid, grant trusted individuals the authority to act on their behalf when needed, and pave the way for preferred senior living accommodations.

Estate Planning Strategies to Ease the Senior Residence Transition

A Living Trust:

A living trust is a legal document in which the trust creator, or grantor, transfers property ownership to the trust. Living trusts are advantageous because they allow the grantor access and control over the assets in the trust. They are also in effect while the grantor is alive.

Living trusts are an effective strategy in baby boomer estate planning because they contain a detailed outline of your intentions and wishes in passing your estate to beneficiaries. Additionally, you name or appoint a trustee to manage the trust and distribute the assets to the beneficiaries you named. You can appoint yourself as the trustee to control the property in the trust while you are alive. In this case, you name a successor trustee to take over if you pass away or are incapacitated.

Living trusts protect your assets, including your housing options, as you transition into senior life. They also protect your best interests when you are incapacitated, instructing whoever is managing your trust to pay bills or use the trust’s assets for your care.

An Irrevocable Trust:

An irrevocable trust is similar to a living trust, but there is one main difference. You can’t change it, or changing or canceling it is difficult. One benefit to this type of trust in baby boomer estate planning is its ability to exclude assets from Medicaid’s consideration during approval. Given Medicaid’s low asset threshold, removing income-producing and other assets protects your wealth while allowing you to receive Medicaid. You can use irrevocable trusts for supplemental income since you can name yourself as a beneficiary to receive any gains from the original assets.

Key Takeaways:

  • Baby Boomers and Senior Living: Over 70 million baby boomers will consider moving to age-restricted retirement communities in the next few years.
  • Estate Planning for Baby Boomers: There are estate planning strategies to help baby boomers prepare for the transition to senior living.
  • Living Trust: Living trusts protect your assets as you transition into senior life and your best interests when you are incapacitated.
  • Irrevocable Trusts: One benefit of an irrevocable trust is its ability to exclude assets from Medicaid’s consideration during the approval process.

An estate plan is about preserving wealth, designing a future that reflects your values, and a vision for your senior years. Estate planning is a proactive tool for baby boomers to embark on this new chapter of life with clarity, purpose, and peace of mind.

If you're ready to explore estate planning strategies for your dream retirement, don't hesitate to schedule a consultation with Attorney John Hoffman.

Reference: Senior Housing News (June 27, 2023) “New Report Sheds Light on Baby Boomers’ Desired Senior Living Services, Amenities.”

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