However, as we have discovered, filling the forms out can be more difficult than it seemed at first glance. First, we applied in the last week of September for a FSA ID which linked to our account at the IRS to allow us to link the FAFSA form (but not as we were later to discover the CSS PROFILE) to our 2015 income tax date as filed. Second, there was the frantic gathering of current information: bank statements, mortgage and car loan information, retirement account values, investment account values, including the 529 accounts and UGMA accounts set up for both the child applying for college and his/her siblings. Third, we set up the FAFSA form and imported the information from the IRS – so far so good.
The trouble arose when, after reading the instructions for the forms multiple times, we discovered we had “special” circumstances that we needed to address. When my mother passed away, she created a testamentary trust primarily for the benefit of my father. However, my brother and I were included as permissible principal beneficiaries. Knowing my mother, it was meant to be “just in case” of a catastrophic emergency. Nonetheless, because I am a permissible beneficiary currently, we have to report one-third of the value of the trust on these forms even though I have no ability to compel a distribution from the trust. Thankfully, my children only have interests in the trust contingent on my prior death, so the trust is considered my asset and not the asset of my child for financial aid. Interestingly, we do not need to report the trust created by my grandfather because my interests in that trust are contingent upon my surviving various family members.
Discerning exactly what had to be reported on the various forms in connection with trust funds was not easy. Ultimately, I gave up and called a financial aid officer at the University of Virginia, because I am an alumna and because my child intends to apply there. I did get the answer I needed. Finally. However, here are a few pointers in regards to eligibility for financial aid:
- Keep in mind that parents’ resources are assessed at a much lower level than assets owned by a student when determining how much the family should contribute towards college. 529 accounts owned by a parent are assessed as an asset of the parent, not as an asset of the student, even if the student is the named beneficiary of the account. Account balances of 529 accounts owned by a grandparent do not get reported on the financial aid form; however, distributions from the account used for the grandchild’s educational expenses are counted as the grandchild’s income for the year of distribution.
- Eligibility for financial aid is heavily based on your income. Although you do get credit for certain obligations, such as a mortgage or a home equity loan secured by your home and on which you are paying, you do not get credit for consumer loans or unsecured debt (such as credit cards). In addition, the contribution that you make towards your retirement account is added back into your adjusted gross income for these purposes.
- The balance of your retirement account is not assessed for these purposes.
- Interests held in trust are assessed as an asset of the beneficiary, even if the restrictions on the trust fund are such that the beneficiary cannot access the funds. However, contingent beneficiaries are ignored.
If you are interested in creating a trust that is meant to be used for your children’s or grandchildren’s college education, the nuances of how the trust is worded may be unimportant. After all, if you are providing a fund from which college expenses are to be paid, then the funds should be so used. On the other hand, if you are creating a trust that is not necessarily meant to fund a college education, as in the case of a trust primarily for the benefit of a surviving spouse, it may be important to assess and think through the ramifications of giving the descendants of your primary beneficiary current access to trust assets. Your decision will be influenced by the specifics of your family situation. Please feel free to make an appointment to discuss these important issues with the attorneys at the Hook Law Center so we can help guide your estate planning decisions.
Ask Kit Kat – Fish Smarts
Hook Law Center: Kit Kat, what can you tell us about how fish think and feel?
Kit Kat: Well, there is a lot to tell, actually. Even very tiny fish have some amazing capabilities. Jonathan Balcombe, director of animal sentience with the Humane Society Institute for Science and Policy has written a new book, entitled What a Fish Knows: The Inner Lives of our Underwater Cousins. It turns out that fish have many things in common with other animals, including us humans. That is why they are such a fascinating subject for research. For example, let’s examine the frillfin goby, which is a fish that lives in intertidal areas. They have the capability of jumping from one tidal pool to another when they sense danger. How do they do that so successfully without being stranded on rocks or caught up in vegetation? Scientists tell us that they can memorize the geography of a particular tidal pool and remember it 40 days later. That knowledge serves them well when they sense they can no longer stay in a specific location.
Another example is the case of groupers and moray eels. These two look nothing alike, but they use their differing physical attributes to work together to hunt for food. The grouper elicits the attention of the eel through the use of a head shake or body shimmy. Then they work as a team. The eel chases their prey into a nook or crevice of a rock. Sometimes, the eel gets to the prey first, and has a delicious meal. However, if unsuccessful, the prey swims out, and is captured by the large-bodied grouper. Another capability which grouper have is a pointing ability. They can actually point with their body position to the eel that prey is nearby. Thus the hunt starts, and they begin their cooperative arrangement to capture food.
For more examples, you might want to read the book. It really is fascinating. As more and more people become aware that fish can think and feel, they will treat them with more respect. That is not to say we shouldn’t continue to enjoy them as a source of our own nourishment, but perhaps we can become a little more careful about how they are harvested. Commercial fishing tends to use large nets over many miles which scoop up whatever is in a particular area, including dolphins, when what they are really after that day might be tuna. Hopefully, we can develop more strategic ways to fish without the collateral damage to others, which are not the intended objects of the fishing operation. The author says another thing anyone can do is, if you see a stranded fish washed up on a beach, pick it up and get it back into the water. We all need a little help once in a while. (“Kinder School of Thought,” All Animals, September/October 2016, p.34-35)
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 Musings on Financial Aid first appeared on SEONewsWire.net.]]>
I often describe proper estate planning for business owners as providing “schock absorbers” during a difficult time. Lets face it, the incapacity or death of a business owner impacts many things: the business, the employees, the family of the owner, other businesses that have contracts with the business, among others. Further complicating matters, is that transitions in ownership of the business (even due to death or incapacity) often trigger legal obligations under documents like leases, franchise agreements, loans, shareholder agreements, and more. Failing to address these obligations in the context of an estate plan can have disastrous results.
So what happens if you fail to plan? Well, it is a similar outcome to driving a care without shock absorbers over a rocky road, you may get through but your car will likely be damaged and the wheels may fall off. To be clear damage from an unplanned transition can impact the owner and the owner’s family, the business, or both. Effective planning means that there are “shock absorbers” on all areas that would be impacted by the death or disability of an owner.
Business succession planning at the business level provides for continuity in the business but may not prevent adverse impact against the business owner’s family. For instance, a business that provides a buyout of an owner’s shares may preserve the business, but an undercompensated buyout may leave the owner’s spouse and family in bad shape financially. In reviewing their estate plan a business owner should closely look at what would happen to their ownership interest in the event of incapacity or death.
Even if an attorney represents a business in which you have an ownership interest, properly integrating any business succession plan with your estate plan requires a comprehensive look at your personal needs and estate planning goals. The estate planning and elder law attorneys at Hook Law Center regularly assist business owners in establishing and implementing their personal estate plans so that they are coordinated with the business’ succession plan. If the opportunity to plan has passed then our attorneys also can help coordinate the aftermath so that the shocks to the individual and business are minimized.
Ask Kit Kat – Furless Fashion
Hook Law Center: Kit Kat, what can you tell us about fashion designers and their use of animal fur in their clothing lines?
Kit Kat: Well, there has been a lot of progress in this area. In 2015 the brand Hugo Boss discontinued its use of fur fashions. Now, there is word that Giorgio Armani will follow suit. In 2008 Armani stopped using fur in all its products, except for rabbit. Now that, too, will be eliminated. There had been and is tremendous pressure on fashion designers to use fur in their collections, especially the high end ones. Fur has traditionally meant elegance and wealth. However, thanks to lobbying efforts by the Humane Society of the United States (HSUS) among others, Armani decided the time had come to eliminate fur and stand up for what he believes is right. PJ Smith corporate engagement manager of HSUS says, ‘Having the leadership of somebody like Armani is very important: One of the cruelest form of fashion is unnecessary now, and you have the biggest name in fashion design saying that.’ Impacting their decision, in part, is the realization that fake fur has become so attractive, and is a great alternative to using the hide of helpless animals. It’s a win-win for all those involved.
So kudos to Mr. Armani! He is a cat lover and has two in his family. We continue to hope that other designers will follow his lead. HSUS and the Fur-Free Alliance, a coalition of 40 organizations from 28 countries, will continue to press their case for fur-free fashion the world over. (“Fashion without fur,” All Animals, September/October 2016, p. 32-33)
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 Planning for Small Business Owners Is Critically Important first appeared on SEONewsWire.net.]]>
What is Universal Design?
Universal Design incorporates subtle, but important, features that benefit disabled individuals of all ages who live in the home. Simple changes such as widened doorways and levered door handles instead of knobs create a more accessible home without detracting from the home’s aesthetics. Additionally, the positioning of cabinetry, switches, and outlets significantly affects a home’s accessibility. The goal of Universal Design is to provide a livable home for individuals in all stages of life and mobility. In addition to older individuals seeking to age in place, these design concepts benefit children and younger disabled individuals.
By using Universal Design principles, a remodeling project will provide more utility while the owner keeps the home, and, because the design is meant to be aesthetically pleasing, the marketability of the home will not be affected. In fact, the home will be marketable to buyers with young children or disabled family members who may not have considered it previously. If accessibility is created without using Universal Design or aesthetically pleasing methods, many prospective purchasers will want to reverse the renovations. Accordingly, the home will likely be less marketable when it is eventually sold.
If you are building a new home or considering remodeling your home to be more accessible, you should consider using professionals familiar with Universal Design concepts. The National Association of the Remodeling Industry (“NARI”) certifies remodelers as Universal Design Certified Professionals (“UDCP”). This certification means that the individual has at least taken a course and passed a test on Universal Design principals. Avoid using remodelers who are not familiar with Universal Design concepts, because they may not think beyond widening hallways and limiting stairs and incorporate aesthetic concerns that many remodels for accessibility simply do not address. Universal Design is mostly felt in the details of the home such as the location of towel hooks, the types of faucets used, and choices in flooring. While any remodeler or contractor can create a wider hallway, if they are unfamiliar with the subtle changes required to make a home truly accessible and aesthetically appealing, the result will be a slightly more functional home that may be less marketable.
If you are considering the significant step of remodeling your home for accessibility concerns, it is likely a good time to review your plan for long-term care and incapacity. Meeting with the estate planning and elder law attorneys at the Hook Law Center can help walk you through what the financial and medical changes you are experiencing mean for your retirement and estate plans.
Ask Kit Kat – Bear 399
Hook Law Center: Kit Kat, what can you tell us about Bear 399?
Kit Kat: Well, this is another interesting story about a female grizzly bear in Grand Teton National Park. Bear 399, as she is known because of the number on her tracking device, is approximately 20 years old. She makes her home in the national park, and has been quite fertile during her lifetime. She has given birth to 3 sets of triplets It is thought that she has had 16 offspring, about half of which are dead due to accidents or straying off park property, and being killed by hunters. This past spring, 399 gave birth to one cub . In June, “Snowy” as the cub was known was killed by a hit-and-run- driver in the park. 399 dragged her to the side of the road, and took her into the brush.
Although one may think that 399 should choose more secluded areas to raise her cubs, there is a reason she has not done so. Given the choice of roadside areas or more hidden areas of the backcountry where male bears could prey on them, she has chosen roadside meadows. Now even 399 may be at risk as she sometimes roans outside of park land. The Wyoming Fish and Wildlife Service in conjunction with the US Fish and Wildlife Service gave only a 30-day comment period this spring when they tried to delist grizzlies from the Endangered Species List. The Humane Society of the US (HSUS) is now suing Wyoming to re-open the comment period. No decision to date has been made. Hearings have also taken place in neighboring Idaho and Montana.
Naturalists want to keep the grizzly listed as endangered, or at a minimum, threatened. Or the bears could be delisted, if the states in the region ban trophy hunting. People advocating for protection say that, in recent years, the grizzly population has plateaued, due to the grizzly’s increasingly difficult search for food. Cutthroat trout and whitebark pine nuts, their favorite foods, are not as plentiful, and they are forced to search further and further away. It is estimated that there are currently 700 grizzlies in the Yellowstone and Grand Teton parks, known as the Greater Yellowstone Ecosystem. A population of 600 is desirable, so that would only allow for a reduction of 100 bears. In the early 70s, when the grizzlies were not protected, there were as few as 136. Stay tuned as naturalists face off with hunters who are advocating for the change. (Karen E. Lange, “Protect Wonderland,” All Animals, July/August 2016, p. 23-29 and All Animals, September/October 2016, p. 14)
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 Home Upgrades to Help Aging in Place first appeared on SEONewsWire.net.]]>