Elder law attorneys are probably the most overlooked tool for incapacity planning. Beyond providing the legal documents and tools for effectively coordinating decision making and financial management, elder law attorneys provide an experienced concierge in areas most people have not confronted, such as coordination of benefits, hiring of supplemental providers, and coordinating financial planning. Furthermore, elder law attorneys focus on the effective implementation of their documents. Put simply, a power of attorney or other document is false comfort if the document cannot be used effectively when needed.
Aside from attorneys, financial advisors are underutilized as a tool to address incapacity and death. Building a solid relationship with a financial advisor can be an extremely effective way of coordinating assets at death, preventing or mitigating financial exploitation, and budgeting for medical expenses. If you have a financial advisor that you have been working with it is important that your advisor and your attorney are “on the same page” so that your legal and financial plans are coordinated effectively.
Age, dementia, and other issues can cause individuals to be more susceptible to scams or even result in a change in personality. While financial advisors used to limit their focus almost solely to investment return, most are realizing that placing alerts for unusual expenditures and regularly discussing budgeting and other matters with clients. The increased focus on these concerns provides an important service and some protection in the event of incapacity. Frequently, we meet with individuals who have only realized the extent of their cognitive decline due to issues brought up by their financial advisors such as unusual withdrawals, large expenditures, increased purchases, and other general changes in financial behavior.
A third overlooked tool is a trusted CPA. Many individuals think that their income picture in retirement is so simple, that they do not need a CPA to assist in preparing their tax return. However, having returns regularly filed with a CPA provides a quick and easy place for a substitute decision maker or executor to go in the event of incapacity or death, respectively. Furthermore, we frequently see individuals who self-file tax returns miss out on important tax benefits available to older clients, such as deductions for long term care premiums, deductions for healthcare expenses, and “catch-up” contributions to retirement savings. Sometimes we see families who fail to properly plan payments for the benefit of a medically needy family member in order to claim them as a dependent. These benefits quickly justify the cost of using a CPA experienced in income tax planning and filing.
A fourth overlooked set of tools are the multitude of services and applications that have proliferated to address coordination of banking, account, health, and other information. Most banks have created smartphone applications to manage accounts, which is a great help to any family caregiver. Mobile payment platforms for in-home care services prevents the need to trust new caregivers near cash or checkbooks, while delivering instant and direct payment for their services and keeping a clear record for tax and other reporting needs. Password applications provide a digital vault to keep your passwords so that they can be accessed by your substitute decision maker in the event of your incapacity or death (or by you, if you’ve forgotten a password). Other applications can help you (or a trusted loved one) keep track of your finances, health data, and other important information in an easily accessible location. While these services do come at an expense many of them quickly justify their costs in the security, comfort, and protection they provide.
As new products and services develop, we at Hook Law Center are constantly working to stay abreast of changes and trends. By specializing in elder law, our attorneys and staff can assist in more than coordinating your legal plan, we can help find ways for you and your family to smooth the inevitable transition that occurs during illness, incapacity, or death. If you are curious how some of these tools can be used to better serve you or your family members, please call our office to schedule an appointment to discuss your needs.
Ask Kit Kat – Bao Bao Returning Home
Hook Law Center: Kit Kat, what can you tell us about that adorable panda 3-year old who is currently at the Washington, DC National Zoo?
Kit Kat: Well, sadly, Bao Bao, a female giant panda, will soon be leaving Washington, DC and returning to her home country, China. The zoo has not yet set an exact date for the trip, but they are scheduling some goodbye events before she goes. Though born in the United States on Aug. 23, 2013, she will be sent to her home country by the time she turns age 4. Bao Bao’s mother, Mei Xiang, is from China, and by agreement with the China Wildlife Conservation Association, any cub born at zoos in the United States must return to China around the time that they turn 4 years of age. Bao Bao was the first baby panda since 2005 to survive birth at the zoo and thrive. 4 years of age is when a panda is capable of breeding.
Bao Bao has been living an independent life at the zoo since March 2015. She is kept separate from her mother, Mei Xiang. This is to prepare her to lead a solitary life like she would be living, if she were in the wild. Separation usually occurs around the age of 18 months to 2 years.
Preceding Bao Bao was Tai Shan, another panda born on July 9, 2005 at the National Zoo. Tai Shan was returned to China in February 2010. Alas, for a little while, we can enjoy the company of Bei Bei, a male giant panda, born on Aug. 22, 2015. He’s only 1.5 years old now, so we still have time to watch him mature and grow to adulthood. ( Michael E. Ruane, “Bye Bye, Bao Bao,” The Washington Post, Local section, January 18, 2017)
Distribution of This Newsletter
Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Commonly Overlooked Tools for Incapacity Planning first appeared on SEONewsWire.net.]]>
“Dr. Stvan will rely upon her knowledge of linguistics and the teaching of composition particularly with reference to the recognition and avoidance of ambiguity in written documents to testify regarding the conclusions made by an ordinary reasonable speaker of contemporary American English when examining the language of Game 5 of the Fun 5’s scratch-off ticket.
The general substance of Dr. Stvan’s opinions are as follows:
1. One key way the word “that” functions in the English language is to point back to the same noun in the previous sentence. So in game 5, the word “that” in the second sentence refers back to the PRIZE described in the first sentence.
2. There is a pragmatic mechanism in game 5 that relates to the sequencing of the 2 sentences. The reader expects the order of the tasks to be presented in the order in which they occur. So the action mentioned in the first sentence is performed before the action mentioned in the second sentence. In other words, once you do this first action, then this other action will follow.
3. It is clear that the 2 sentences should be read together and neither sentence should be interpreted in isolation.
As to the opinions attributed to Dr. Butters in “Plaintiffs’ Expert Designations ”, I disagree with the opinions and statements set forth in paragraphs paragraph 3, a, b and c.
The methodology used by Dr. Stvan to arrive at her opinions is as follows:
d. My opinions are based upon the application of general principles of the science of linguistics, particularly the branches of linguistics called syntax, discourse analysis, pragmatics and semantics. In addition, I have drawn upon my experience as scholar, teacher, and administrator in university linguistics programs dedicated to the teaching and production of clear and coherent interpretation and writing.
Dr. Stvan might possibly develop additional mental impressions and opinions as additional discovery materials become available for her review. Dr. Stvan will be made available for deposition, if Plaintiffs and/or Intervenors wish to explore the additional mental impressions and opinions. Dr. Stvan specifically reserves the right to offer additional opinions based on any new designations or opinions offered by experts designated by Plaintiffs or Intervenors.”
GTECH has also designated William Abington who is a CPA and Certified Fraud Examiner. GTECH describes his anticipated testimony as follows:
“He may testify regarding the damages claimed by Plaintiffs and Intervenors once they explain the methodology they are using to calculate their alleged damages. Furthermore, Mr. Abington may testify regarding the statistical probability of the alleged prizes and damages sought by Plaintiffs and Intervenors.
Mr. Abington might possibly develop additional mental impressions and opinions as additional discovery materials become available for his review. Once a reasonable time has passed after Plaintiffs and Intervenors have actually disclosed their methodology, Mr. Abington will be made available for deposition, if Plaintiffs and/or Intervenors wish to explore the additional mental impressions and opinions. Mr. Abington specifically reserves the right to offer additional opinions based on any new opinions or explanations offered by experts designated by Plaintiffs or Intervenors.”
by Thomas D. Begley, Jr., CELA
Separate Trust
A separate trust designed specifically to control the retirement account is recommended. It is best that the trust not be part of a revocable living trust or any other trust. A “standalone retirement trust” is preferred.
Professional Trustee
When an IRA is paid to a standalone retirement trust or any other trust, it is important to consider a professional trustee. The rules regarding inherited retirement accounts are complex and family member trustees are often unfamiliar with them. This could cause a loss of important tax benefits. Most family members do not understand the rules regarding required minimum distributions (RMDs), conduit trusts or accumulation trusts. This could cause loss of important tax benefits. If the retirement account is $500,000 or more, it usually makes more sense to name a professional trustee. The professional trustee understands the tax rules and has investment expertise.
A family member could be named as trust protector. A trust protector has the right to monitor the performance of the professional trustee and to remove and replace the trustee with another professional trustee, if the trust protector is not satisfied with the performance of the trustee.
Trust Protector
Under an IRA trust a trust protector can be appointed. The trust protector must be unrelated by blood to the trust beneficiary but may have a personal relationship, such as financial advisor, attorney, CPA, or friend. The trust protector can change a conduit trust to an accumulation trust. This gives the trustee the discretion to accumulate funds.[1]
Conclusion
As Americans rely less on the availability of work-related pensions for their retirement, more of their wealth is found in the tax-deferred retirement accounts that they have funded over the years. As the estate tax exemption grows and becomes less of a concern for most Americans, it becomes increasingly important to understand and plan for minimization of the income taxes that are ultimately payable with respect to these tax-deferred accounts while at the same time maximizing family wealth transfer goals. The standalone IRA Trust is sufficiently flexible that it allows most people to balance their tax and family goals well, offering opportunities for creditor and other beneficiary protections, protection for special needs beneficiaries and spousal planning as well as the possibility of professional management to assist in investing and minimizing income taxes for the beneficiaries.
[1] P.L.R. 200537044; Harvey B. Wallace, II, Retirement Benefits Planning Update, Probate and Property, American Bar Association (May-June 2006); Wealth Preservation Update, Morris Law Group (Mar. 2007), www.law-morris.com.
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In our estate planning and elder law office we do quite a bit of asset protection planning utilizing a variety of different types of trusts, including iPug’s, VAPT’s, MIT’s, FIT’s, CGT’s, IRA Trusts as well as your typical revocable living trusts. Clients are often surprised to learn that the more than one type of trust, let alone the benefits that some of the asset protection trusts offer. It’s not surprising that our clients are surprised, that is why we have LifeCare Planning Workshops weekly to educate our clients (click here to register).
What is a little more surprising is that we often have to educate other financial planners and CPA’s on the different types of trusts, how they work, and their benefits. Occasionally, we get push back from the other professionals, but after walking them through the trusts, analysis and case law they always come back and say “Chris, why haven’t I been sending people your way before??” because they are blown away at the possibilities to help protect their clients from unnecessary taxes, law suits, and long-term care costs. I have no problem with this. In fact, I appreciate it, because it shows a willingness to learn and take the extra step to help their clients.
Estate Planning Attorneys are often Unaware of The Best Asset Protection Trusts
Other attorneys not knowing the best, most cutting edge, most beneficial trusts to provide their clients…that’s what’s surprising. I find that a majority of estate planning lawyers are really doing their clients a disservice by not continuing to educate themselves on the best legal tools to meet their clients needs.
For example, I’d say 95% of the estate plans I review are basic revocable living trusts that say outright distributions at age 25, 30, or 35. What an opportunity of protecting your children you’re missing with this type of trust. You are throwing a pillow case of money at your children that (even if they have a good head on their shoulders) could be lost to bankruptcy, divorce, creditor action, or death. Do you want your hard earned legacy lost because your daughter got divorced? Instead, what if you could leave it to them in a way that they can control it, serve as trustee, and empty the trust at anytime? It’s possible, legal, and court tested. Why more attorneys are taking advantage of the lifetime asset protection opportunity to protect their client’s children from creditors and divorce is beyond me.
Lifetime Asset Protection For You
Another form of trust, sometimes called a Lifetime Asset Protection Trust or iPug (irrevocable pure grantor trust) can build in asset protection for you, during your lifetime, from lawsuits and nursing home costs. Why don’t I see more of these types of trusts around? I think it’s laziness on the part of other estate planning lawyers to search for the best solutions for their clients.
On occasion, I’ve had clients get a second opinion from another lawyer, and invariably the other lawyer isn’t familiar with the planning strategy we’re recommending and says “that won’t work!” Their response isn’t from a position of knowledge, however, it’s from a position of confusion and lack of knowledge.
Which Lawyer is Right?
It’s surprising to me when other estate planning or elder law lawyer’s are not familiar with some of planning options we recommend. Then I have to prove to my client the validity of our planning or of our expertise in the area. Just like doctors have different levels of knowledge on areas of medicine, so do lawyers have different levels of knowledge in areas of law.
For example:
- I am one of a handful of Certified Elder Law Attorneys (the gold standard in estate planning and elder law) in the state of Michigan and the only one in Livingston County.
- I am an adjunct professor of law at WMU Cooley Law School where I teach second and third year law students estate planning, elder law, and the very techniques I use in my practice.
- I teach other attorneys estate planning and elder law across the nation through NBI as well as my own consulting practice.
- My trusts have been tested in court, with the top CPA firms in Michigan, with the VA Administration and with DHHS who administers Medicaid in Michigan.
- I wrote the Caregiver’s Legal Guide to Planning for a Loved One with Chronic Illness
I share that not to impress, but to impress upon you that estate planning, elder law, long-term care, and retirement planning is what we do…and we do it very well. These are things we share when the general family lawyer questions some of our planning techniques. Who do you trust, the attorney who does a little bit of everything, the general estate planning lawyer, or a Certified Elder Law Attorney/Author/Professor?
The post What Your Estate Planning Lawyer Doesn’t Want You to Know about Irrevocable Asset Protection Trusts appeared first on Michigan Estate Planning.
The post What Your Estate Planning Lawyer Doesn’t Want You to Know about Irrevocable Asset Protection Trusts first appeared on SEONewsWire.net.]]>The post How to Make Health Care Decisions for Someone Else first appeared on SEONewsWire.net.]]>By: Bernard A. Krooks, J.D., CPA, LLM (in taxation), CELA, AEP® (Distinguished)
Maybe you’ve been named guardian (of the person) for a family member, colleague, or friend. Maybe you’ve been listed as an agent in a health proxy. Maybe you’re a family member with authority to make health care decisions (New York, like a number of other states, permits family members or others to make most health…
A Michigan Retirement Plan Trust is a specially designed, cutting edge estate planning tool, that may be used as the beneficiary of an IRA or other type of qualified account. It’s a form of stand-alone trust, separate from a revocable living trust. The Retirement Plan Trust (RPT) allows you to maximize income tax deferral and wealth accumulation while also building in an unprecedented level of asset protection.
For Michigan clients who have retirement accounts greater than $150,000, a Retirement Plan Trust makes a lot of sense for a variety of reasons.
Forced Stretch Out of Required Minimum Distributions (RMDs)
Thanks to the 2004, Private Letter Ruling, through a Retirement Plan Trust, your loved ones can now “stretch out” their taxable required minimum distributions (RMDs) over their lifetime, while maintaining all the benefits of a trust if a Retirement Plan Trust is named as a beneficiary. Too often in the past, beneficiaries were named outright to receive the IRAs or 401(k)s and they ended up blowing the stretch out, by taking a lump sum distribution.
Not anymore. The Retirement Plan Trust provides protection and can force the stretch out.
What is a Retirement Plan Trust?
A Retirement Plan Trust is a stand-alone trust created solely to hold retirement accounts. It is a form of revocable trust, but separate from your typical revocable living trust. It is established during the lifetime of the IRA holder and is named as a beneficiary of the IRA (typically after a spouse).
The Retirement Plan Trust is relatively new, so don’t be upset if your financial planner, CPA, or even your estate planning attorney is unfamiliar with it. It is new as of 2004, when there was a private letter ruling from the IRS that allowed it.
How Does the Retirement Plan Trust Work?
First, the IRA owner must set up the Retirement Plan Trust during their lifetime and it must meet the strict IRS requirements. Typically, it is set up as revocable trust, meaning it can be changed at any time. The trust will name beneficiaries, the younger the more powerful the stretch out provisions become.
From there, new beneficiary designations must be completed, naming the Retirement Plan Trust as beneficiary.
Then at the owner’s death, the IRA account is retitled and the RMDs pour into the Retirement Plan Trust and are either paid out or held per it’s terms. The beneficiaries of the account then receive the benefit of both the stretch out as well as the asset protection.
Want to Learn More about the Retirement Plan Trust?
Then request our free Retirement Plan Trust Guide.
The post Michigan Retirement Plan Trust Explained appeared first on Estate Planning Lawyers | Elder Law Attorneys | Brighton | Novi | Livonia Elder Law Attorneys.
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In most divorce cases in most states, you cannot charge estate plans, life insurance beneficiaries, etc., until after your divorce case has been resolved and your divorce judgment has been entered by the court. However, once your divorce is final, you need to take immediate financial and legal steps to reflect your new reality. The following is a checklist of the actions that you need to take:
- Change your name on all of your financial documents, bank accounts, etc.
- Close and/or change the names on all joint accounts.
- Make sure that all credit card bills and loans are paid promptly and closed by you (or your spouse if such bills or loans were designed as their responsibility in the divorce).
- Open a checking and savings account in your name.
- Open a credit card in your name to establish your own credit history.
- Set up and start depositing money into an emergency bank account to cover 6 months of living expenses and don’t ever dip into it.
- Check all of your investment accounts to make sure that the stated ownership of stocks, bonds, mutual funds, annuities, and retirement accounts are correctly listed.
- Change your name with the Social Security department.
- Change your name on your driver’s license.
- Change the title on your automobile(s) into your name if necessary.
- Change your automobile insurance coverage into your name alone.
- Have your spouse’s name take off of the mortgage (or lease). This may be difficult to do without a refinance of the mortgage.
- Make sure that you transfer ownership of all deeds for your real estate and record with your county recorder’s office if not accomplished in the divorce case.
- Change your beneficiaries on all life insurance policies.
- Change beneficiaries on all retirement and pension plans.
- Revise your health insurance coverage, dependent on the terms of your divorce judgment.
- Make sure any Qualified Domestic Relations Orders that need to be done to divide retirement benefits per your divorce judgment get done.
- Contact an estate planning attorney and have a new estate plan done. Be sure to update your medical and financial powers of attorney.
- Speak with a financial advisor if you did not do so prior to concluding your divorce case and determine a financial roadmap for you post-divorce.
- Review your tax withholding allowances and taxes with your CPA, particularly if you are receiving or paying spousal support (alimony), and make any necessary adjustments with your payroll department.
For more information or to schedule a consultation, please contact the Orange County family law firm of The Maggio Law Firm at (949) 553-0304 or at www.maggiolawfirm.com.
