Malicoat Law, PLC

How to Use a 529 Plan to Pay for the Education of Your Child

Tue, 30 May 2023 05:00:00 GMT

With higher education becoming more expensive every year, families are seeking ways to save. One option is a 529 plan. These investment plans allow families to put money away for a child’s future education expenses and gain tax benefits. While you may discuss your options with a financial advisor, an estate planning attorney can explain how a 529 plan can be part of your estate planning goals or how to contribute to a grandchild’s account

What Are 529 Plans?

A 529 plan is a tax-advantaged savings plan designed specifically for education expenses. They are also referred to as qualified tuition plans and Section 529 plans. Even though these plans are named for Section 529 of the federal tax code, they are administered by the states and the District of Columbia.

A range of investment options are available for 529 plans. The funds in the plans can be used to pay for qualified education expenses, including tuition, fees, room and board, and required books and supplies. The funds can be used at participating accredited colleges, universities, and vocational schools in the United States and even some institutions abroad.

There are two types of 529 plans: education savings and prepaid tuition. Education savings plans work like a typical investment account, allowing families to invest their contributions in mutual funds, exchange-traded funds (ETFs), or other types of investments.

Prepaid tuition plans allow families to purchase credits or units at today’s prices, which can then be used to pay for future college tuition and fees at participating colleges and universities.

How Do 529 Plans Work?

When you contribute to a 529 plan, your money is invested and can grow tax-free as long as it’s used for qualified education expenses. Additionally, many states offer tax deductions or credits for contributions to their state-sponsored 529 plans. Withdrawals from the account for non-qualified expenses may be subject to taxes and a 10% penalty.

One of the biggest benefits of 529 plans is their flexibility. There are no income limits for contributions, and anyone can contribute to the account, including grandparents, aunts, uncles, and family friends. Additionally, the account owner can change the account beneficiary at any time, so if one child decides not to go to college, the funds can be used for another child’s education expenses.

Why Choose a 529 Plan?

There are many reasons why a 529 plan may be a good option for your family’s college savings. Some reasons include:

When Should You Start a 529 Plan?

As with all long-term investment or savings strategies, the earlier you start, the better. Talk with your financial advisor and estate planning attorney to learn about the options available and your goals for the future. Contact us today to schedule an appointment to discuss saving for a child or contributing to your grandchild’s education.

This article offers a summary of aspects of estate planning and financial planning. It is not legal advice or financial advice. It does not create an attorney-client relationship. For legal advice, contact us at 989-495-2555.

The post How to Use a 529 Plan to Pay for the Education of Your Child appeared first on Malicoat Law, PLC .

Talking to Your Children About Inheritance

Tue, 23 May 2023 05:00:00 GMT

It costs a lot to miss out on discussing your adult children’s inheritance with them. Managing their expectations as they make their financial plans and knowing their general inheritance situation will help them make better decisions. These are practical matters of allocating resources for things like housing, retirement, 529 plans, and more.

When children don’t understand your inheritance intentions, it can result in arguments and legal battles among siblings and other heirs after you’re gone. The solution is a mature discussion with your inheritors, sharing details of your estate plan relevant to your child. You can withhold actual numbers by a range, such as enough for a home downpayment, can provide a sense of magnitude without committing to exact amounts.

The Great Wealth Transfer

According to the Federal Reserve , the baby boomers are the wealthiest generation in US history. Baby boomers hold 70 percent of disposable income in the US and spend over $548 billion annually. Forbes cites research firm Cerulli Associates stating that as much as $84 trillion may change hands by 2045, and much of the wealth is from high net-worth baby boomers. Millennials will control five times as much wealth in 2030 as they do today. Are they prepared for responsible stewardship?

Many who currently have substantial wealth have concerns that if their children know the extent of their wealth, it will reduce their motivation for productivity and growing into responsible citizens. Most parents prefer their children to live a “real” life, learning to grow their success independently of their parent’s wealth. However, wealth is relative, and many parents also fear losing their ability to cover retirement, medical expenses, and long-term care, maintaining their quality of life while protecting their legacy. Because of this uncertainty, generally managing the expectations of their children’s future inheritance is better than providing exact amounts. Things can change.

Failure to Prepare

Failing to prepare children for what they may inherit can hinder their ability to handle money wisely. Many suddenly feel separated from their friends, isolated, or even confused about relationships. Others may be wasteful and spend their newfound money irresponsibly. Those who inherit even a modest amount can be just as irresponsible without guidance. BLB&B Financial Advisors cite , “it takes the average recipient of an inheritance just 19 days until they buy a new car!” It’s all too common for some inheritors to go further and splurge on lavish vacations and fast living.

The Conversation

Experts agree it’s important to talk to children about money and wealth during their adult years to help them learn how to manage money and live beneath their means as a lifestyle habit. Imprinting values, the opportunities money can provide, and their hopes of what they want to accomplish with money are good conversation starters. Providing your younger children with a modest sum of money and parental oversight can teach them how to save and invest, spend wisely, and even demonstrate the importance of supporting charities.

Of course, one of the most effective strategies to teach children about values, spending, and investing money is by example. Parents must use their money in a way that reinforces their values. One way to foster a positive relationship within the family is to purchase a vacation home where everyone gathers for summers, holidays, or annual family gatherings. Other techniques involve permitting children to choose charities to support and provide donations. If your children see you living your values, they will likely adopt similar values.

Estate Planning

Talking to your children about inheritance is an integral part of estate planning. Being transparent, fair, and open to their emotions can help ensure a smooth transition of your assets to the next generation. Keep a few things in mind during discussions:

· Timing is Important

Have these conversations when children are mature enough to understand the implications of inheritance. Don’t create unnecessary anxiety or misunderstandings by starting the conversation too early.

· Be Transparent

Be clear about your estate intentions and plans without getting too detailed about the numbers. Being open about your goals and hopes for them can help avoid future conflicts and misunderstandings. Not providing exact numbers keeps your estate planning flexible.

· Consider Fairness

Consider what is fair and equitable when dividing your assets among children. Each child does not necessarily need to have an equal amount. Consider factors such as their financial situations, relationships with you, and levels of need.

· Address Emotions

Inheritance can be an emotional topic for everyone. Acknowledge and address any feelings of anxiety, guilt, or resentment that may arise during the conversations.

How an Estate Planning Attorney Can Help

There are several ways an estate planning attorney can help when organizing your children’s inheritance, including:

1. Legal and Tax Implications

Estate planning attorneys understand the current legal and tax implications of inheritance. Your lawyer can help you navigate complex laws and regulations, ensuring your assets’ distributions are most efficient and tax effective.

2. Drafting Legal Documents

Estate planning attorneys can draft wills, trusts, powers of attorney, and more to help you plan for your children’s inheritance. Tailoring these documents to your specific needs ensures your assets are distributed according to your wishes.

3. Reviewing and Updating Documents

Estate planning attorneys can review your existing planning documents to ensure they are up-to-date and reflect your current wishes. They may also recommend changes based on shifts in your family or financial circumstances. Informing your adult children of substantial changes is crucial in your inheritance conversations.

4. Guiding Asset Protection

Estate planning attorneys can guide strategies to protect your assets from potential creditors or legal claims. They can also help plan for long-term care and other future expenses to keep the bulk of your estate intact for your children.

5. Facilitating Communication

Estate planning attorneys can foster communication between you and your children about your estate planning decisions. These discussions can help prevent future misunderstandings and conflicts.

Summary

While an estate planning attorney can help ensure your children’s inheritance is organized and distributed effectively, parents also play a key role. Parents must educate their children regarding the value of money, what it can and can’t do for them, and have open conversations about their future inheritance. Including your estate planning attorney in some of the more crucial conversations with your children about their inheritance can be effective. Your attorney can address any questions from a legal standpoint and help the discussion to remain fact-based, keeping emotions to a minimum.

Failing to talk to adult children about their inheritance can leave them unprepared to handle even a modest amount and often results in the money being quickly squandered. Help your children to maintain your legacy and your family’s intergenerational wealth for years to come.

This article offers a summary of aspects of estate planning and elder law. It is not legal advice and does not create an attorney-client relationship. For legal advice, contact us at 989-495-2555.

The post Talking to Your Children About Inheritance appeared first on Malicoat Law, PLC .

Estate Planning for Young Families

Tue, 16 May 2023 05:00:00 GMT

Having an estate plan is critical for everyone, but especially for families with minor children if a medical emergency results in incapacitation or death. While it’s difficult to think about what happens to your children if you die, ensuring enough money is available for their needs is necessary for them to flourish. Estate planning can protect your family, name your children’s guardians, and explain how you want your assets distributed.

A caring.com 2023 survey reports two out of three Americans have no estate planning documents. Post-pandemic economic conditions are increasing the need for financial planning, including end-of-life and estate planning. Combining financial goals with estate planning objectives provides for your loved ones and creates a foundation for multigeneration wealth.

Wills

Your will is where you can name a guardian for your minor children. Waiting until a medical diagnosis or health concern to make a will is risky. If you are seriously injured or ill and can’t communicate, it’s too late. Health concerns may also raise issues about your decision-making abilities. Identifying a guardian for your children takes thought, time, and some negotiation with the person who will commit to raising your children should the need arise.

A will is the most common type of estate planning document and can address several other things, such as distributing money and property to loved ones and paying debts. For some people, a will may be all that is required to address what happens after their death.

However, some require additional estate planning documents, like a trust, for greater control and preservation of assets before and after death. Trusts and powers of attorney are especially important for families with children or adults with disabilities, as well as aging parents in need of long-term care. They are particularly important for families with significant estates or loved ones who are prone to miscommunication and disputes. The sooner you begin your estate planning, the better the outcome.

The Estate Planning Process

Estate planning doesn’t have to be overwhelming, but it can be complex. There are some simple steps to get started, including:

Gathering financial and other relevant documents

Even if some of your paperwork is stored online, print a summary copy. Having the documents in front of you provides a bigger picture of what to address today and plan for tomorrow. You may notice gaps in your approach.

Making a will

This legal document outlines how you want your assets distributed after your death, names guardians for your children, specifies how to divide assets among heirs, and names a personal representative or executor.

Designating beneficiaries

Retirement accounts, life insurance policies, and other financial accounts have beneficiary options allowing you to pass assets directly to the named beneficiary. These designations will override any instructions in your will, so keeping them current is important.

Considering a trust

A trust can provide additional protection for your assets and help avoid probate. A trust may be a good option if you have significant assets or a complex family situation.

Creating advance directives

Also known as health care directives, a living will explains your end-of-life wishes for care and treatment, and a health care power of attorney names a trusted person to make medical decisions in the event of incapacitation.

Naming a durable power of financial attorney

This individual can manage your financial affairs if you can’t.

Reviewing and updating your plan

Your estate plan needs periodic review and regular updates to reflect changes in your family situation, assets, and laws.

Seeking professional help

Working with an experienced estate planning attorney can help ensure your plan is comprehensive and tailored to your needs.

Estate Planning Barriers

You might have plenty of time to implement your estate plan, or you might not. We never know when accidents or illnesses may strike. Putting off your estate planning leaves your partner and children at risk.

A 2023 caring.com survey found forty-two percent of people say procrastination is the main reason they don’t have a will or other estate planning documents.

A young family needs to work their way toward financial stability and find ways to protect it. Even if you don’t have significant assets, you can make valuable decisions, such as taking out a life insurance policy to benefit your spouse and children. Young, healthy parents can get term life insurance at reasonable rates.

An estate planning attorney can help you select the most effective life insurance policy. In some cases, they may recommend an irrevocable life insurance trust. A life insurance trust permits life insurance policy proceeds to pour directly into the trust, becoming immediately available to your beneficiary.

How Can an Estate Planning Attorney Help Young Families?

Estate planning attorneys help assess your family’s unique needs and circumstances, creating a customized estate plan addressing your specific goals and concerns. Their experience can help identify potential risks and provide recommendations to minimize them, ensuring all documents complement each other and are legally correct.

Accurately drafting important legal documents, such as your will, trusts, powers of attorney, guardianship, and advance healthcare directives is critical. An estate planning lawyer can ensure these documents are legally binding for the state where you live and accurately reflect your wishes.

For young families, it’s crucial to receive legal advice in areas such as tax planning, asset management, asset protection, and, if appropriate, business succession planning. An estate planning attorney can help you understand the legal implications of your decisions so that you make informed choices.

Your attorney can also plan to routinely review and update your documents with you to reflect changes in your family, finances, or laws. And, in the event of your death, an estate planning attorney can help your family navigate the probate or trust administration process and settle your estate according to your wishes.

It’s in the best interest of a young family to seek the valuable guidance and support of an estate planning attorney to help to navigate simple and complex estate planning needs.

This article offers a summary of aspects of estate planning . It is not legal advice and does not create an attorney-client relationship. For legal advice, contact us at 989-495-2555.

The post Estate Planning for Young Families appeared first on Malicoat Law, PLC .

Taking Good Care of Your Pets Through Pet Trusts

Tue, 09 May 2023 05:00:00 GMT

Pets are one of the greatest joys and comforts in a person’s life, and they are likely considered to be important members of the family. Since you love them, you give them the best life you can. But what if you were suddenly unable to care for them?

Who would care for your pet if you were to die or become incapacitated due to injury or illness? Would they know how to give your pet the same level of care you give them? A good way to ensure your pet is well cared for if something happens to you is to create a pet trust.

Pet trusts have become increasingly popular in recent years as pet owners become more concerned with the care and well-being of their companions. A pet trust is a legal document allowing pet owners to designate a trustee to care for their pets for the rest of their lives.

You can establish a pet trust for any type of pet. The trust can provide for their care in a variety of ways, including food, shelter, veterinary care, and any other needs your pet may have. The trust can also specify any special requests, such as daily walks, grooming, or other preferences.

Benefits of a Pet Trust

One of the main benefits of a pet trust is that it ensures your pet will be taken care of according to your wishes and by someone you trust. This is especially important for owners who have pets with special needs, such as those with medical conditions or behavioral issues. A pet trust can also provide financial support for your pet’s care, so the caregiver doesn’t have to bear the financial burden of caring for your pet.

Creating a Pet Trust

Creating a pet trust is a relatively simple process. First, you’ll choose a trustee responsible for managing the trust and ensuring your pet is cared for according to your instructions. The trustee can be a family member, friend, or even a professional trustee. After you choose a trustee and a successor (backup) trustee, you will choose a caregiver for your pet. The caregiver can be the same person as the trustee.

You will then specify the terms of the trust, including the amount of money set aside for your pet’s care and how that money will be distributed to the caregiver. The trust should also specify any special requests or instructions for the caregiver, as well as a backup plan in case the caregiver is no longer able to care for your pet.

Once the trust is established, you can fund the trust with a lump sum of money or set up regular contributions. The trustee will then manage the trust and ensure your pet is cared for according to your wishes.

Things to Consider about Pet Trusts

A pet trust is a legally binding document, and consulting with an attorney who is knowledgeable about estate planning and pet trusts is important. They can help ensure that the trust is set up properly and that all legal requirements are met.

In addition to the legal issues, there are also practical considerations to keep in mind when setting up a pet trust. For example, you should consider the age and health of your pet, as well as your financial situation. You should also think about the availability and willingness of potential caregivers.

This article offers a summary of aspects of estate planning . It is not legal advice and does not create an attorney-client relationship. For legal advice, contact us at 989-495-2555.

The post Taking Good Care of Your Pets Through Pet Trusts appeared first on Malicoat Law, PLC .

Expediting the Disability Claim Process

Tue, 02 May 2023 05:00:00 GMT

It can take many months for your Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) application to be approved or denied ; first-time applicants are often denied benefits. Wait times for the Social Security Administration’s initial decisions regarding disability claims are increasing significantly at a time when applicants most need benefits. Delays can devastate those who lack other household income or have health problems serious enough to shorten life expectancy.

The Social Security Administration (SSA) can expedite claims processing for disability applications under certain dire personal circumstances, medical conditions, or if an applicant has served in the US military. Even without these qualifications, other steps can be taken to speed up your claim. The first is getting help from a disability attorney.

SSA Quick Disability Determinations (QDD) and Compassionate Allowance (CAL)

Two fast-track processes use technology to identify applicants with the most severe disabilities, expediting decision-making on those cases. These claimants have medical conditions that immediately meet disability standards.

QDD

A computer-based predictive model processes and screens initial applicant claims, identifying cases where medical evidence is readily available and favorable disability determinations are very likely. QDD’s early identification of these cases helps prioritize workload and expedite processing. The SSA provides online information about the QDD process on its Quick Disability Determination page.

CAL

The CAL process can quickly identify diseases and other medical conditions that meet the SSA standards for disability benefits definitions. This reduces wait time for individuals with severe disabilities. The SSA provides online information about the CAL process on its Compassionate Allowances page.

Both programs use text-scanning software to flag potentially eligible applications.

Terminal Illness (TERI)

The SSA identifies those diagnosed with a terminal illness expected to result in death and automatically considers the case for faster processing and determination. Some of the qualifying circumstances and conditions for the TERI program include the following:

Social Security will flag applications listing a TERI qualifying condition.

Presumptive Disability (PD)

The SSA maintains a list of presumptive disability conditions to issue SSI benefits before formally deciding on a disability application. Some conditions may also qualify under TERI, but others, such as intellectual disorders, Down Syndrome, severe spinal injuries, and more, are presumptive disability qualifiers.

If you have one or more conditions on the list, you can receive SSI payments for six months while the SSA processes your case. If your application receives a denial, you may not have to pay back the PD benefits.

Dire Need Case (DRND)

If you lack food, medicine, a place to live, or face imminent foreclosure or eviction, the SSA can expedite application processing as a Dire Need Case.

Those seeking DRND status need to alert Social Security to critical needs. Contact the SSA by phone or submit a “dire need” letter that explains why you require help. Applicants in the appeal process may also seek an expedited hearing on the grounds of dire need.

Military Service

Veterans of the US armed forces can have their claims expedited by the SSA if they qualify as a wounded warrior . A disability must have occurred during active service on or after October 1, 2001, or have a 100 percent permanent and total (P&T) compensation rating from the Department of Veterans Affairs (VA). You must identify yourself as P&T when applying for benefits.

Waive Notice Requirements

If your disability claim is in an appeal pending an administrative law judge hearing, Social Security must notify you of the hearing at least 75 days in advance. You can waive this notice period to schedule your hearing sooner. Fill out the SSA’s Waiver of Timely Written Notice of Hearing, Form HA-510, and return it to the hearing office that handles your case. Waiving the 75-day notice means the time to gather evidence of your disability will be limited to five business days before your hearing date.

On the Record Request

Requesting an on-the-record (OTR) decision can speed up your appeal process by an administrative law judge. By filing an OTR, you believe your file evidence supports your disability claim without testimony from you or an expert witness at your hearing. Contact your nearest Office of Hearing Operations (OHO) to request an OTR decision if you have already filed for an appeal and formally requested a hearing. An administrative law judge will decide to either issue a written ruling approving your claim or proceed to a hearing.

Professional Legal Help

The expertise of a disability attorney is crucial when trying to expedite a disability claim. Your lawyer can help you through the application process, ensuring all required information is properly presented to expedite your claim. If your application is delayed, a disability attorney knows who to talk to at the SSA or the state office evaluating your claim.

This article offers a summary of aspects of elder law . It is not legal advice and does not create an attorney-client relationship. For legal advice, contact us at 989-495-2555.

The post Expediting the Disability Claim Process appeared first on Malicoat Law, PLC .

How Does End-of-Life Planning Work?

Tue, 25 Apr 2023 05:00:00 GMT

Planning for our end-of-life is a difficult topic. Most of us don’t like to think about or discuss it. Without planning, we will have fewer options, and things may not go as well as we would like.

You may wish to pass away in the comfort of your home, but without making proper arrangements in advance, you may end up in a hospital or nursing home. Or you may be kept alive by artificial means for a long period when you would rather pass on.

By planning for your end-of-life care, you can rest easier knowing that you can control what happens.

Things to Consider When Planning for End-of-Life Care

End-of-life experiences differ from person to person. For some people, death comes quickly. For others, the process can take days, weeks, or even months. Sometimes, a person’s body weakens while their mind remains lucid. In other cases, the body continues to function, but the mind fades with dementia. And with a severe illness or accident, a person may be comatose before their body and mind both cease to function.

People who are near the end of their lives generally need care in four areas:

Think about how you want your needs met in these areas and your preference for where you want to receive care. Do you want to spend the end of your life in your home, hospital, or other medical facility? Do you want family and friends with you? Would you prefer to receive care and treatment until the end or for a specified time? How long would you want to receive palliative care for a serious illness, and at what point would you want to begin hospice?

Palliative Care

Palliative care is specialized medical care for people with serious illnesses, such as cancer. In addition to receiving treatment for their serious illness, patients receive palliative care for the symptoms of the illness, the effects of the treatment, or both. An example of palliative care would be a patient treating anemia caused by complications of cancer.

Palliative care enhances the patient’s life by focusing on the quality of their life. Palliative care can be provided anywhere, from hospitals and clinics to skilled nursing facilities or patients’ homes. Some private health insurance providers cover palliative care. Veterans may be eligible for palliative care through the VA. The public may have access to palliative care through Medicaid and Medicare.

Hospice Care

Many people with terminal illnesses reach a point when their treatment is no longer effective. At this stage, they can end the treatment for their terminal illness and switch to hospice care . Like palliative care, hospice care focuses on comfort and quality of life but without trying to cure the terminal illness. The number of patients who choose hospice care is growing. Hospice care also provides support for the patient’s family.

Since hospice care is more of an approach to care than a type of treatment, hospice patients can receive care wherever they are, including in the comfort of their homes. Hospice care may be covered by Medicare, the VA, and health insurance companies. Check with your insurance provider to find out if they cover hospice care.

Communicating Your Wishes

End-of-life planning is a highly personal matter. Take the time to decide what types of treatments and care you want near the end of your life. Give equal consideration to treatments you don’t want to receive. It may help to discuss your wishes and options with your family and an elder law attorney .

Once you’ve made your decisions about end-of-life care, formalize them in the appropriate legal documents. Make sure your loved ones know your wishes and where they can find your legal documents. If you can’t communicate with medical professionals due to serious illness or injury, the people you name as health care agents can promptly make decisions on your behalf.

It’s important to keep your legal documents updated if you change your mind. It’s never too early to plan for end-of-life care or medical emergencies. Contact us today to learn how we can help you and your loved ones plan for the future and gain peace of mind.

Our law firm is dedicated to keeping you informed of issues that affect seniors who may be experiencing declining health. We help you and your loved ones prepare for potential long-term medical expenses and the need to transition to in-home care, assisted living care, or nursing home care.

This article offers a summary of aspects of estate planning and elder law. It is not legal advice and does not create an attorney-client relationship. For legal advice, contact us at 989-495-2555.

The post How Does End-of-Life Planning Work? appeared first on Malicoat Law, PLC .

An Overview of Health Care Directives

Tue, 18 Apr 2023 05:00:00 GMT

It is common for people to communicate their wants and needs, but some people lose this ability as they age, become injured, or become ill. When this happens, they need someone they trust to advocate for them. You can prepare the proper legal documents in advance.

Losing the Ability to Communicate

Unfortunately, there are many ways people can lose their ability to communicate. It can happen suddenly due to a medical incident, such as a stroke. It can also occur due to a coma caused by a head injury or accident.

In some cases, losing the ability to communicate happens gradually, as with Alzheimer’s disease or amyotrophic lateral sclerosis (ALS). In the case of Alzheimer’s, a person’s memory and cognitive abilities deteriorate before their ability to speak is lost. With ALS, the ability to speak usually goes before other cognitive abilities, but each case can be very different.

However it happens, losing the ability to think and communicate is debilitating. It’s better to prepare than end up unable to communicate critical health care wishes.

Health Care Directives or Advance Directives

By drafting and executing the proper advance directives , you can put your health care wishes in writing, including procedures you want or refuse and who will make decisions on your behalf. Health care directives vary from state to state and may be handled differently depending on the law firm. Three common health care or advance directives are a living will, health care power of attorney, and health care instructions.

Living Will

A living will is a legal document that specifies which medical treatments you want or don’t want if you are in a terminal condition, a coma, or a persistent vegetative state. It directs health care providers to cease or refrain from certain medical or surgical treatments. A terminal condition is described as an incurable, irreversible medical condition brought on by disease, injury, or illness. A person has a terminal condition if their attending physician believes with a reasonable degree of medical certainty that they will die from the condition regardless of continued life-sustaining treatment.

Health Care Power of Attorney

You can use a health care power of attorney document to name a person, or persons, to act as your health care agent. Your agent can make health care decisions on your behalf if you can’t make decisions on your own. You can specify if your agent’s ability to make decisions for you is effective immediately or only takes effect once you are incapacitated.

Unlike a living will, you don’t have to be in a terminal condition for your agent to act on your behalf. Choose your health care agent carefully and make sure they know what your wishes are and that they will carry them out.

Health Care Instructions

Health care instructions can be used alone or with a health care power of attorney document. In your instructions, specify what treatments you want or don’t want if you are in a terminal condition, a coma, or a persistent vegetative state. You can also express other health-related wishes, such as instructions for dialysis, blood transfusions, do-not-resuscitate (DNR) orders, and organ and tissue donation.

HIPAA Form

HIPAA stands for Health Insurance Portability and Accountability Act. It’s a privacy rule to protect individuals’ medical records and other personal health information. While it’s generally not considered a health care directive form, it’s often included in a person’s collection of estate planning documents to ensure medical history can be accessed for decision-making.

Sometimes HIPAA language is incorporated into a health care directive document. It’s useful if you want to name people in addition to your health care agents who are allowed to receive your medical records and other personal health information.

Creating Health Care Documents

Talk with your doctor and your family about the types of medical treatments you want and don’t want. And consult with an estate planning attorney to learn about the legal ramifications of health care directives and related documents. An experienced estate planning or elder law attorney can help you create and execute your advance directive documents. Contact us today to schedule a consultation to learn how we can help you plan for your future.

This article offers a summary of aspects of estate planning and elder law. It is not legal advice and does not create an attorney-client relationship. For legal advice, contact us at 989-495-2555.

The post An Overview of Health Care Directives appeared first on Malicoat Law, PLC .

Strategies for Wealth Transfer

Tue, 11 Apr 2023 05:00:00 GMT

Assets or wealth are transferred from one person or entity to another via wealth transfer. The transfer can happen either during your lifetime or after your death. Wealth transfer strategies use various methods to create the most tax-efficient and effective reorganization of assets. Below are some popular wealth transfer strategies.

Gifts

Gift giving involves giving a gift of cash, securities, real estate, or personal property to specific people. The annual gift tax exclusion allows an individual to give up to a certain amount, tax-free, to any number of recipients. In 2023, the annual exclusion is $17,000. This means you can give up to $17,000 per person per year to as many different people as you wish without incurring any gift tax liability. The annual exclusion amount is subject to change, so check with the IRS before making gifts.

Trusts

Trusts are legal entities that can hold and manage assets for the benefit of designated beneficiaries. There are many different types of trusts, including revocable and irrevocable trusts. Revocable trusts allow the creator to retain control of the assets during their lifetime and can be changed or canceled at any time.

Irrevocable trusts, on the other hand, can’t be changed or revoked once established. They can protect assets from creditors, reduce estate taxes, and provide for beneficiaries. Irrevocable trusts are a good option for people who want to qualify for Medicaid benefits and preserve assets from being spent on long-term care . They may also be used for people who have family members with disabilities to offer additional financial support without jeopardizing their government benefits eligibility.

Family Limited Partnerships

A Family Limited Partnership (FLP) is a type of partnership often used to transfer assets within a family while retaining control over them. An FLP is created by transferring assets, such as real estate, stocks, or businesses, into the partnership. The partnership then issues shares to family members, who become limited partners. The general partner, typically the person who created the partnership, retains control over the assets and manages the partnership.

Charitable Giving

Charitable giving is a popular way to transfer wealth and reduce tax liability. By donating assets to a qualified charitable organization, an individual can receive a tax deduction for the value of the donation. Charitable giving can also be structured through a charitable remainder trust (CRT), which allows an individual to donate assets to a trust and receive an income stream for a specified period. After the trust term ends, the remaining assets transfer to the designated charitable organization.

Life Insurance

Life insurance can be a useful tool for transferring wealth to future generations. They can provide tax-free benefits to beneficiaries and pay estate taxes or other expenses. Additionally, life insurance policies can be set up to allow the policy owner to transfer ownership to a trust or another individual.

Finding the Right Strategy

Many different wealth transfer strategies are available, each with advantages and disadvantages. These strategies can have complex tax implications and legal requirements, so working with a professional is important to ensure the transfer is efficient and effective for your unique situation. Consult with a financial advisor, elder law attorney , or estate planning attorney before using any wealth transfer strategy.

The post Strategies for Wealth Transfer appeared first on Malicoat Law, PLC .

Estate Planning Components

Tue, 04 Apr 2023 05:00:00 GMT

Assuring your loved ones are taken care of after you pass away is one of the purposes of an estate plan. It requires organization and strategy and begins with five key legal documents that can address many areas of estate planning concerns.

Proper estate planning can provide tax savings and asset protection so that the bulk of your estate remains intact as it transfers to heirs. These major components of estate planning can be tailored to your individual needs and goals, regardless of the size of your estate. All estate documents must be part of a legally valid and enforceable plan to fulfill your wishes.

Major Components

A robust estate plan involves much more than simply creating a will. An estate planning attorney can help you craft a custom plan using these major components to meet your goals and needs while complying with state and federal laws.

Wills

A will is a legal document outlining how a person’s asset distributions will occur after death. An executor or personal representative named in the will oversees the asset distribution, proper court filings, and final tax returns for the decedent’s estate. When applicable, your will can appoint a guardian for minor children.

Without a will, known as dying intestate, the court implements asset distribution according to your state law which may not align with your intentions. It’s important to note a will only applies to assets owned solely in the name of the person who made the will. Jointly owned assets or those held in a trust pass directly to a designated beneficiary.

Trusts

A trust is a legal arrangement in which a trustee holds and manages assets to benefit one or more beneficiaries. Trusts can help avoid probate, minimize estate taxes, and care for minors or those with special needs. A trust is not subject to public probate proceedings as in the case of a will and provides greater privacy as assets don’t become part of public records.

There are many types of trusts , but the most common is a revocable living trust. It allows the person creating the trust, known as the grantor, to retain control of the assets during their lifetime. Upon the grantor’s death, the assets then transfer to the beneficiaries.

Powers of Attorney

A power of attorney is a legal document appointing someone to act on your behalf if you become incapacitated. This individual can manage your finances, make healthcare decisions, and handle other important matters when you can’t.

There are four types of powers of attorney:

Selecting someone you implicitly trust and know will represent your interests is crucial. They will have significant control over your affairs.

Healthcare Directives

Also known as living wills, advance directives, and other names depending on the state where you live, this combination of legal documents allows you to specify your wishes for medical treatment if you can’t communicate them yourself. The documents enable you to name an individual to follow your instructions and relay medical decisions to family and professionals.

A healthcare directive can include whether you wish to receive life-sustaining treatment, pain management, and other end-of-life care. They provide clarity and peace of mind for you and your loved ones during difficult times.

Beneficiary Designations

Beneficiary designations specify who will receive assets such as life insurance policies, retirement accounts, and other financial accounts after your death. Maintaining updated beneficiary designations is important when life circumstances change, such as divorce, marriage, or the birth of children. These accounts will pass directly to the listed beneficiary.

What if You Don’t Have a lot of Money or Assets?

Even if you don’t think you have enough money or assets, having an estate plan is still important for the following reasons:

· Guardianship of Minor Children

If you have minor children, it’s critical to designate a guardian if something happens to you, your spouse, or other parent. Without naming a guardian, the court will appoint someone to care for your children; this guardian may not be someone you would select.

· Healthcare Decision-Making

Even absent significant assets, you may still want to specify your healthcare wishes in the event of incapacity. An advance healthcare directive can help fulfill your wishes and provide clarity for your loved ones during a difficult time.

· Avoiding Probate

Going through probate can be time-consuming and expensive for those you leave behind. A well-crafted estate plan avoids probate and ensures your accounts and belongings are distributed according to your wishes and outside the public record.

· Protecting Your Digital Assets

Consider your online presence, including email accounts, social media profiles, digital photos, music, income-producing online storefronts, influencer ad revenue, and cryptocurrencies. More than ever, people have a tremendous presence or income in the digital world. An estate plan can address what will happen to your digital assets after your death.

Do I Need an Estate Planning Attorney?

Given the complexity of estate planning, working with an estate planning attorney is beneficial. An attorney can help you navigate the various components of estate planning and ensure your plan is tailored to your individual needs and goals in compliance with state and federal laws.

Each component of estate planning can affect another. For example, a trust can work with a will to provide for the distribution of assets not covered by the trust. A power of attorney can manage assets, not in a trust, and an advanced healthcare directive can work with a power of attorney to fulfill your healthcare wishes. Creating an estate plan where all facets complement each offers a smooth transition of your estate to loved ones.

An estate planning attorney can also review an existing estate plan routinely or when significant life changes occur. Regular estate planning reviews keep beneficiary designations current.

We hope you found this article helpful. If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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Making End-of-Life Plans is a Gift to Your Family

Tue, 28 Mar 2023 05:00:00 GMT

In most cases, people don’t want to think about their own death, so they avoid the subject. However, since they don’t want to discuss it, they don’t make plans for what they want to happen after they die.

More than half of Americans think that end-of-life planning, or estate planning, is at least somewhat important. However, only about one-third of us have a plan in place. Many people believe they don’t need to bother with an estate plan because they think they don’t have enough assets. This plays into the common misconception that you must have a large estate to have an estate plan. Whatever you own, no matter how much or how little, is your estate.

In addition to determining what should happen to your assets, estate planning involves what you want to happen to your body after you are deceased as well as which medical treatments you want or don’t want near the end of your life. Our health-care system is geared toward keeping people alive for as long as possible. Many people, however, don’t want to be kept alive artificially if they are terminally ill. This is one of the decisions you should make in advance so your loved ones won’t have to guess what you want or the state dictates what will happen to you.

Creating a thorough and legally sound end-of-life plan ensures that you will get the medical treatment you want and that your assets will be distributed how you want them to be distributed. Spelling out all your wishes ahead of time will make your end-of-life process much easier for your loved ones by saving them time, money, and energy during the difficult time leading up to and following your passing.

Not only can end-of-life planning be uncomfortable to talk about, but it can also seem daunting to tackle. Fortunately, as with many things in life, the process becomes more manageable when broken down into sections. Here are some things to do to prepare for your estate plan process.

Make Health-Care Decisions

Take same time to think about which medical treatments you want and don’t want if the occasion for them should arise. Do you want to be kept alive artificially for as long as possible? Would you prefer to not be kept alive if treatments for a terminal illness or injury are ineffective? Where would you prefer to spend the last weeks or days of your life? In a hospital? In your home?

These are questions your loved ones should know the answers to in case you become unable to communicate with them. By completing a living will, you can put these wishes in writing and make them official.

Choose a Health-Care Agent

Choosing a health-care agent, and back-up agents, is an important part of the end-of-life planning process. Choose someone who knows you and is familiar with your values and health-care wishes. Make sure the person is the type of person who will carry out your wishes regardless of what others in the family may say.

Choose a Financial Agent

In addition to choosing an agent to make health-care decisions on your behalf you can also choose an agent to make financial decisions on your behalf. These agents can be the same person or different people. Think about who in your life will be able to make decisions that are most aligned with your values.

Pick an Executor

Asking someone to be the executor, also known as a personal representative, of your estate can be a big thing to ask. They will need to petition a probate court to assign them the role of executor. Then they will need to conduct an inventory of your estate, pay bills, taxes, and debts, and then distribute the remaining assets to your heirs.

Think of who would be good for this task. You will want someone who is detail oriented and can follow through with things. Make sure you ask the person if they are willing to be your executor.

Pick a Guardian

If you have minor children, you can name a guardian, or guardians, for them in your will. Give this decision adequate thought since your children’s guardian will be responsible for their health care and education.

Make an inventory

Make an inventory of all your assets that have financial or sentimental value and note who should get which assets. Be as thorough and precise as possible to lessen the chances of family members squabbling over your things after you have passed. Sometimes these lists are incorporated into a will, sometimes they are a separate list.

In the view of the law, pets are considered property. Determine whom your pets should go to after you are gone and put that in your will. Your digital accounts are also considered part of your property. Keep a list of your accounts with usernames and passwords in a secure place and let your executor know where the list is.

Memorial Wishes

Finally, write down any wishes you have for arrangements after you die. Decide what you want to happen to your body after you are deceased. If you want your body cremated, specify what you want to happen to the ashes. Decide what type of funeral service you want. Some people give specific instructions, others largely leave it up to their surviving loved ones.

Now Is the Best Time to Start

It is never too early in your adult life to start putting together your estate plan. Make life easier for your loved ones by starting the process today. An experienced estate planning attorney can guide you through the process.

This article offers a summary of aspects of estate planning and elder law. It is not legal advice and it does not create an attorney-client relationship. If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

The post Making End-of-Life Plans is a Gift to Your Family appeared first on Malicoat Law, PLC .

The History-Making Wealth Transfer

Tue, 21 Mar 2023 05:00:00 GMT

Baby boomers are preparing to leave their legacies through estate plans, putting America on the cusp of the largest wealth transfer in its history. Over the next 25 years, projections estimate $84 trillion will be in motion to create an unprecedented generational wealth transfer.

The post-WWII economic environment allowed the growth of assets during decades of economic prosperity. Rising real estate values, stock markets, and favorable tax policies contributed to the baby boomers’ ability to aggregate significant wealth. These 45 million households will see their generational wealth pass to Generation X and millennial inheritors, dramatically shifting the landscape of American wealth management.

Preparing the Next Generations to Inherit New Wealth

Baby boomers collectively hold thirty to forty trillion in assets, controlling roughly seventy percent of all disposable income. While families of already established generational wealth may have plans in place, much of the upcoming wealth transfer hails from self-made men and women who have avoided discussing estate plans and family fortunes with their heirs. Predictions are that Gen X will inherit about 57 percent of these assets, with millennials inheriting the rest. Yet the mechanisms for inheritance through sound estate planning are missing in many of these family systems.

Wealth management groups and estate planning attorneys posit that inheritors will needlessly lose much of their wealth due to parents who failed to develop comprehensive end-of-life plans. On the other side of the equation, younger generation inheritors must ramp up their knowledge about asset management to grow their inheritance for future generations.

Shifting Perspectives about Money

Generation X and millennials have vastly different financial experiences and attitudes towards money than their parents. On average, while millennials are the highest-earning generation, they have significantly less money, controlling just 5 percent of US wealth in 2021 . They have lower levels of financial literacy, are less likely to own a home, and have less interest in investing in the stock market. They also tend to have higher debt after experiencing two recessions before the age of 40, cost of living increases that outpaced wages, and increasing college tuition and vehicle loans.

New Financial Tools

These younger generations will also change the landscape of financial planning and management. Financial firms will have to bridge the gap of immediate expectation with a generation raised in an era of enormous technological transformation. Smart technology can provide an incrementally higher return on investment through transaction speed alone. Digital financial tools and apps will be the norm, including robot advisors as a convenience for investing.

Protecting Younger Generations with Trusts

Are these younger generations ready to be stewards of generational wealth? Will they see the need to protect this wealth through comprehensive estate planning? To better protect their inheritors’ interests, baby boomer parents can include their children in estate planning goals. The older generation can implement or update an existing plan and guide their inheritors to protect from squandering assets.

Some family systems may find the surest and safest way to protect generational wealth is via trusts. Both revocable and irrevocable trusts can create structure and limit new inheritors’ access to assets. A trust can grow wealth and also save on taxes. The objectives and conditions of a family trust are wide-ranging and easily tailored to a family’s specific needs.

Charitable trusts and charitable remainder trusts can generate income for heirs while protecting assets and favorable tax consequences. There are also asset-protection trusts, testamentary trusts, and special needs trusts. A qualified estate planning attorney will assess the best trust type(s) for you and your family based on your unique set of parameters. With trillions of inheritable dollars in motion over the next twenty-five years in America, proactive estate planning is key to securing generational wealth for your family.

We hope you found this article helpful. If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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Evolving Technology in Senior Care

Tue, 14 Mar 2023 05:00:00 GMT

As technology advances, aging Americans are able to live in their homes longer and with more safety thanks to self-monitored medical devices, telehealth, and smart homes. Elder law and at-home medical technology uses can intersect in several ways. Whether you are a senior looking to stay in your current home or have an aging parent and want to implement systems that create better safety and communication, an elder law attorney can help you craft a plan.

Strategies

Legal Documents

Elder law attorneys can assist older adults when creating legal documents, such as durable powers of attorney and health care proxies, in an online environment. These and other legal documents are crucial to have in place as they authorize someone to make decisions about the older adult’s medical treatment and the use of at-home medical technology.

Meetings with your estate planning or elder law lawyer and family members can happen virtually, and some states now legally recognize e-signatures. Creating these documents without leaving your home benefits seniors with mobility and transportation issues and protects against exposure to infectious diseases.

Privacy and Security

Elder law attorneys can advise older adults on the privacy and security of their personal information and medical data when using at-home medical technology. Secure network communication protocols will keep hackers from stealing your information and ensure the data integrity of communications with medical professionals and entities.

Medicaid Eligibility

Medicaid, the government health insurance program for low-income individuals, may pay for certain at-home medical technology if it’s deemed medically necessary. An elder law attorney can help older adults navigate the Medicaid eligibility process to ensure they receive all the benefits to which they are entitled.

Telehealth services allow Medicaid to reach more seniors at a lower cost than ever. Whether you’re having issues with eligibility, understanding home health services, or selecting home health providers, an elder law attorney can help you understand your Medicaid options .

Long-term care planning

Elder law attorneys can help older adults plan for future needs of long-term care, including using at-home medical technology to help them age in place and maintain their independence for as long as possible. Incorporating at-home medical technology into long-term care planning may include the following:

At-home medical technology is a more affordable option than expensive institutional care. When planning for long-term care, it’s important to consider how technology can help older adults maintain their independence and quality of life.

Guardianship and Conservatorship

In some cases, older adults may be unable to make decisions about their medical treatment or use of at-home medical technology due to cognitive decline or other health issues. Elder law attorneys can assist in appointing a guardian or conservator to make these decisions on behalf of their loved one.

Getting Started

An elder law attorney can help an aging adult, and their family understand what at-home medical technology is available and if government programs will pay for it. Getting seniors to use at-home medical technology can be challenging and generally falls under the direction of the family. There are several strategies to implement to make the process easier:

Many providers make smart home technology for aging adults. The best options depend on the specific needs and preferences of the older adult and compatibility with existing technology and devices. Technology needs will also change with additional health challenges that invariably occur when aging.

Summary

Elder law attorneys can recommend at-home technology so that an aging adult can safely live at home. Family members must participate in the installation of the technologies to ensure their loved one’s security and privacy. Technology alone is not a solution. A support system, including family, friends, lawyers, and healthcare providers, must coordinate efforts in the senior’s best interest.

Whether you need to plan for future at-home health care or already require care management via remote health monitoring, consumer health technology can make senior care more patient-centric, personal, and accessible. Talk with an elder law attorney and see what senior technology strategies can benefit you or your loved one. If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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The Difference Between Revocable and Irrevocable Trusts

Tue, 07 Mar 2023 05:22:00 GMT

Depending on your goals, you can use either revocable or irrevocable trusts in estate planning. However, both trusts are legal arrangements to manage and distribute your property during your lifetime or afterward. The creator of a trust is a grantor who funds it by transferring their assets into the trust and naming beneficiaries.

Key Differences Between Revocable and Irrevocable Trusts

The key differences between these two trust types include:

· Control

A revocable trust allows the grantor to maintain control of the assets during their lifetime and make changes to the trust as needed as long as the grantor is mentally competent. In contrast, an irrevocable trust typically transfers control of the assets to the trust itself or a trustee. This prevents the grantor from making any changes to the trust once it is written and funded, with few exceptions.

· Tax Implications

A revocable trust is generally treated as part of the grantor’s estate for income tax purposes but does not reduce estate taxes. However, an irrevocable trust can be structured to reduce estate taxes by removing assets from the grantor’s estate.

· Creditor Protection

Assets in a revocable trust are generally not protected from the grantor’s creditors. In contrast, assets in an irrevocable trust can receive protection from creditors depending on the trust’s terms.

· Probate

A revocable trust can help avoid probate, the legal process after someone dies to transfer assets to their heirs. Assets held in a revocable trust are generally not subject to probate. An irrevocable trust can also help avoid probate; however, because the grantor gives up control of the trust’s assets, it may be more difficult to change the trust to accommodate changing circumstances.

· Privacy

A revocable trust can provide more privacy than a will since the terms of the trust don’t become part of the public record. An irrevocable trust can also provide privacy, but because it may involve transferring control of the assets to a trustee, it may be more difficult to keep the terms of the trust private.

Each trust type offers benefits and some drawbacks, and the choice between them will depend on the grantor’s specific estate planning circumstances and goals. An estate planning attorney can help determine which trust type is the most appropriate for a particular individual or family.

nerdwallet

When to use a Revocable Trust

In some situations, a revocable trust may be the best option. There are eight circumstances when a revocable trust may be a good choice.

1. Avoiding Probate

One of the primary benefits of a revocable trust is that it can help you avoid probate. Assets in the trust can pass directly to your beneficiaries without the need to involve the court.

2. Incapacity Planning

If you become incapacitated and unable to manage your affairs, the trustee of your revocable trust can step in and manage the assets on your behalf. The trustee can properly manage your financial affairs and carry out your wishes.

3. Privacy

A revocable trust can provide more privacy than a will since the terms of the trust don’t become part of the public record. If you have concerns about your financial affairs becoming public knowledge, create a revocable trust.

4. Flexibility

Modifications or even fully revoking this trust type may occur during your lifetime. If circumstances change, you can make changes to your trust.

5. Blended Families

If you have a blended family, a revocable trust can be a good way to provide for your spouse and children from previous marriages. You can specify how you want your assets distributed and ensure you fulfill your wishes.

6. Special Needs Planning

If you have a child or other beneficiary with special needs, using a revocable trust can provide for their ongoing care and support you after death.

7. Real Estate Ownership in Multiple States

You can avoid ancillary probate in a state other than where you live.

8. Estate Value

This trust is a great choice if your estate is less than that federal estate tax exemption.

When to Use an Irrevocable Trust

In some situations, irrevocable trusts are the better option. There are seven specific circumstances when an irrevocable trust may be a good choice.

1. Estate Tax Planning

You can remove assets from your estate using an irrevocable trust, helping reduce or eliminate estate taxes. Once the assets transfer to the trust, they are no longer legally part of your estate for tax purposes.

2. Creditor Protection

Assets in an irrevocable trust receive protection from your creditors. This can be particularly important if you are in a profession or business that exposes you to liability.

3. Medicaid Planning

If you are concerned about the cost of long-term care and its impact on your estate, an irrevocable trust can transfer assets out of your name and into the trust. Doing so can help you qualify for Medicaid benefits if you need them.

4. Charitable Giving

An irrevocable trust can be a vehicle for charitable giving, allowing you to leave a legacy and support causes that are important to you.

5. Business Succession Planning

If you own a business, an irrevocable trust can transfer ownership to your heirs or to a trustee who can manage the business on behalf of your beneficiaries.

6. Comfort with Permanence

You must be comfortable giving up control of your asset after establishing the trust.

7. Estate Value

This trust is a great choice if your estate value is higher than the federal estate tax exemption, and you want to avoid estate taxes.

It’s important to note that an irrevocable trust isn’t as flexible as a revocable one since you can’t make changes after establishing and funding except in very limited circumstances. However, they can be a powerful tool for achieving specific estate planning goals.

How an Estate Planning Attorney can Help

An estate planning attorney can guide and assist you with revocable and irrevocable trusts to determine which will meet your goals, assets, and other factors. They may provide tax planning advice since trusts have complex tax implications and assets must be transferred efficiently.

Your estate planning attorney can draft the trust documents and ensure proper execution. If you already have a trust, they can review the documents, ensuring they still meet your needs and comply with changes in the law.

If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

The post The Difference Between Revocable and Irrevocable Trusts appeared first on Malicoat Law, PLC .

Inflation Management for Retirees

Tue, 28 Feb 2023 05:00:00 GMT

Americans will continue to experience inflationary highs well into 2023 and beyond without significant course corrections. Bankrate’s Third-Quarter Economic Indicator poll projects inflation will be more significant than previous expectations over the coming twelve to eighteen months. Even in the best economic outcomes for 2023, maximizing allowable benefits to offset inflationary pressures is a smart strategy.

Rising prices may create a gap between your income plans and real bill-paying requirements. Withdrawing higher amounts from retirement savings can affect your retirement plan’s long-term sustainability. When planning bill pay strategies, remember prices typically don’t rise evenly across all sectors. Medical care costs have risen significantly in recent decades yet rose slower than overall inflation at 4 percent in the past year. However, fuel, food, and utility costs are up sharply for the same period.

Targeting a level of growth that exceeds an already accounted-for level of inflation is part of a good retirement strategy. Still, it can’t account for short-term excessive inflationary pressures. Taking distributions in the short term must remain in balance with maintaining long-term investment growth to preserve retirement income. There are steps you can take to achieve this balance.

Budget Review and Adjustment to Short-Term Spending

Finding ways to cut costs is the easiest way to avoid taking increased distributions or asset spending. Conserve energy use in your home and group errands that require car transportation to like locations to reduce gasoline use. In inflationary times, trimming discretionary expenses like dining out, vacations, or home renovation can help your budget. If you are already tightening your budget with these techniques, you may consider picking up some part-time work to close the income gap without upending your retirement planning.

Ensure Proper Wealth Allocations

Historically, stocks averaged annual returns to stay ahead of inflation. A balance of cash, bonds, ETFs , value stocks with dividends, and market sector investment rotations help maintain financial stability in uncertain times.

The S&P 500 is the lowest in a decade, decreasing over 17 percent. However, the Great Recession of 2007-9 saw the index down 38.4%. Historic market trends indicate that bullish investors will return to the stock market by mid-2023. Not assessing historical trends and re-adjusting your portfolio can make you miss a big chunk of the recovery and potential gains.

This graph of model asset allocations from T. Rowe Price’s investment strategy for retirees can help guide retirement investment strategy by general percentages.

T.Rowe Price

Maintain an Appropriate Stash of Cash

Managing short-term income with long-term growth makes a regular review of your plans necessary. Investing is never a set-and-forget process since personal needs change, corporations’ profitability fluctuates, and market realities change according to economic conditions. Particularly in the equities market, investing trends cycle by market sector. Even though inflation will reduce the spending power of cash on hand, cash availability is crucial for those unavoidable and unforeseen expenses.

Generally, a healthy cash position can cover one to two years of expenses in early retirement and keep you from withdrawing from your longer-term investments. This is particularly true when periods of inflation coincide with the declining market value of your investments.

Maximize Your Social Security Benefits

Work longer to obtain the maximum Social Security will pay based on your best thirty-five years of income. Earning more money to pay into the system will yield a larger payout (up to a point) when you claim your benefits. Delay your benefits up to age seventy, and you will receive a higher monthly payment.

During inflationary times, Social Security benefits automatically adjust to ensure purchasing power adjusts for inflation. If you have not yet claimed your benefits , remember the COLA maintains your benefits to adjust for inflation. When you are ready to claim your benefits, there are options depending on if you are married or divorced. Spouses and ex-spouses must carefully consider scenarios, particularly regarding survivor’s benefits, when one spouse predeceases the other. Divorced from a ten-year marriage for a minimum of two years and still single? You may be entitled to file for benefits based on an ex-spouse’s earnings. Bankrate reviews scenarios for Social Security spousal benefits.

Consider Inflation as You Update Broader Financial Plans

Effective retirement strategies rely on accurate estimates of household spending and adaptation to new norms. This number will change yearly, particularly in an inflationary environment. Your retirement strategy will require adjustments depending on personal circumstances, market conditions affecting your investments, and prevailing inflation rates.

As retirement planning links closely to your overall estate and legacy planning, it is crucial to coordinate the two. An estate planning attorney or an elder law attorney can help to ensure any trusts you create will have sustainable funding and make other recommendations about retirement plans and how they affect your estate planning goals.

Working with a financial professional or using financial planning tools while creating your estate plan can provide insights. As inflation continues to present economic challenges for household expenditures, it’s important to review your existing retirement plans regularly, as you do for your estate plan. Ultimately, an appropriate allocation in stocks that receive a regular review in combination with managed spending and flexibility provide the most important tools retirees can implement to fight against long-term inflation.

If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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Having a Valid Will is Essential

Tue, 21 Feb 2023 05:00:00 GMT

The percentage of Americans who have a will is about 33 percent, although more than 50 percent find estate planning important.

caring.com

Those individuals with a will may have moved to a different state or forgot to update their will after life events such as marriage, divorce, births, and deaths, making it ineffective. One of the ways to ensure your will remains valid is to review its contents regularly with your estate planning attorney so that it complies with your state laws and reflects your family situation.

Dying Without a Will

If a will doesn’t meet the state’s legal requirements, it isn’t valid, which is the same as not having a will. Intestate is the legal term describing a person who dies without a will or a valid will. When this happens, determining asset distribution becomes the responsibility of the state probate court. States will follow their current intestacy law, which may not reflect the decedent’s wishes.

The probate court names an administrator to compile a list of assets, pay debts, and address any state and federal taxes that must be paid by the estate.

Then the appointed administrator establishes a hierarchy of inheritors, usually beginning with spouses followed by other close relatives being first in line to receive the decedent’s assets. A court-appointed administrator charges a fee from the decedent’s estate for their services.

The Function of a Valid Will

A will is the most common type of estate planning document. Upon your death, it accomplishes several different things:

When creating their will, many individuals will add advanced directives, trusts, and other documents for a more comprehensive estate plan to manage assets if they are ill, injured, or unable to communicate their wishes.

Legal requirements for writing a will may differ among states but include being 18 years old, having “capacity” or being of sound mind, signing the document, and having two adult witnesses who also provide signatures.

Community Property States, Common Law States, and the Unmarried

Surviving spouses in a community property state are considered joint owners of any maritally acquired property and entitled to at minimum half of the decedent’s estate. However, depending on the court’s determination, they can receive less or more than half or even the entire estate if there are no surviving children or grandchildren.

As of 2022, there are seven common law marriage states plus Washington, DC . Some states will only recognize common law marriages in relationships formed before a certain date. Additionally, some states that don’t permit common law marriage still recognize this marriage type contracted from other states. Speaking with an estate planning attorney to determine your legal status is important.

If you’re in a relationship without legal marital status, the easiest way to provide for your partner is through joint tenants with right of survivorship accounts ( JTWROS ) and payable-on-death accounts ( POD ). These accounts will pass directly to the named beneficiary outside of a will, and the probate process.

Types of Wills

The form and structure of a will may vary:

Each of these wills is a variation of a last will and testatment and leaves instructions to follow after your death. A living will is not a last will and works differently. It outlines preferences about future healthcare treatments while you are alive and unable to communicate your wishes to loved ones or doctors.

Ensure Your Will is Legal

Laws concerning wills vary by state, and knowing your state’s requirements is crucial to create a valid will. Conducting online research and creating your own will can be risky and may not meet your state’s specific laws and regulations. An experienced estate planning attorney can assess your situation and determine what type of will best suits your needs. They provide you with the original will and a copy of the document to store in a safe location. Let your loved ones know where you keep your will and other associated documents.

Review and Update Your Will

You can change, update, or revoke your will at any time if you are of sound mind. Planning to revisit the document annually is a good practice, as major life events create the need to make changes more frequently than you think. If the probate court finds your will invalid, state intestacy laws take over.

If you want to change your will, meet with our estate planning lawyers to maintain your will’s validity and see if any changes to state law will affect your decisions. If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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Medicaid Gifting Penalties

Tue, 14 Feb 2023 05:00:00 GMT

We are living longer than previous generations, so many of us are going to need long-term care as we age. It’s estimated that seven out of ten Americans will need long-term care during their lives.

Long-term care can include care in your home, an assisted living facility, or a nursing home. Some seniors can rely on relatives or friends for some care. For those who don’t have that option, health care professionals can provide the long-term care they need. However, the cost of long-term care is increasing annually. You can estimate the cost of long-term care in your area by using Genworth’s Cost of Care Survey .

Paying for Long-Term Care

Paying for long-term care can quickly drain a person’s savings. Many seniors blow through the assets and retirement savings they have spent their lives accumulating before they can qualify for government assistance. One form of government aid available to all eligible Americans is Medicaid .

Medicaid

Medicaid is a federal and state program that helps cover the costs of many medical needs for those with very limited financial resources. Because the financial limit of assets and income is so low, many people are not eligible. To become eligible, you must have less than the maximum allowable assets and income for five years prior to applying for Medicaid. This five-year period is referred to as the lookback period.

Medicaid Gifting Penalty

People often mistakenly think they can give away their assets, then qualify for Medicaid benefits. This is not how it works. The Medicaid office will impose a gifting penalty based on the value of assets transferred during the five years leading up to the application for benefits. The length of the penalty is calculated by dividing the total amount given away by the average monthly cost of nursing home care in the state or locality where the applicant lives. The number of months calculated is the penalty period the applicant must wait before receiving Medicaid benefits. If, for example, a person gives away $100,000 during the five years leading up to their application for Medicaid and the average cost of nursing home care in their state is $10,000 per month, then the penalty period would be 10 months.

There are exceptions to the gifting rule. Under certain circumstances, a person can make gifts to spouses and siblings, children with disabilities, and children who are caregivers living at home for a specified time with the person needing care. The Medicaid rules are complicated, and the consequences for mistakes can be very costly.

Medicaid Planning

There are options to protect assets and still qualify for Medicaid benefits, but they must be weighed with great care. The earlier you start planning, the better your chance of saving your hard-earned assets. Consult with attorneys who are experienced and knowledgeable in Medicaid law. We can help you qualify and apply for Medicaid while preserving your assets for the next generation.

Our law firm is dedicated to informing you of issues affecting seniors who may be experiencing declining health. We help you and your loved ones prepare for potential long-term medical expenses and the need to transition to in-home care, assisted living care, or nursing home care.

This article offers a summary of aspects of estate planning and elder law. It is not legal advice and does not create an attorney-client relationship. If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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LGBTQIA+ Estate Planning: Why It’s Important

Tue, 07 Feb 2023 05:00:00 GMT

Your assets, your wishes, and the people you love are important to protect regardless of gender identity or sexual orientation. Estate planning allows you to designate your partner, whether you are married or not, as the person who can make decisions for you if you are unable to make them yourself. This offers protection against discrimination by people who may be reluctant to recognize your relationship. You can also provide financial support for your partner in your estate plan.

How RFMA Affects Same-Sex Couples

On December 13, 2022, President Biden signed the Respect for Marriage Act (RFMA). The RFMA requires the recognition of valid same-sex and interracial civil marriages by the US federal government and all US states and territories. Note that this law doesn’t apply to unmarried couples. However, unmarried couples can still get partnership decision-making benefits and privileges by way of a different type of estate planning. However you define your partnership, creating a valid estate plan to protect yourselves is possible and important.

With proper estate planning, married same-sex couples may receive all federal and state benefits of marriage, including unlimited marital deductions for federal estate and gift taxes. By using other legal strategies, unmarried same-sex, transgender, or non-binary couples who can’t receive marital tax benefits can still ensure they will receive the legal right to inherit each other’s assets. They will also be able to make financial and health care decisions for each other.

Trusts for the LGBTQIA+ Community

Whether you’re in a marriage or a similarly committed relationship, a revocable living trust allows you and your partner to nominate each other as trustees of your respective trusts. This will allow you and your partner to manage each other’s financial affairs if one of you becomes incapacitated. A trust is also the best way to ensure your loved one receives the assets and privileges you want them to have. If a same-sex, transgender, or binary couple has children, in which one parent is a biological parent, a trust allows the biological parent to name the other parent as guardian of the children while they are minors if the biological parent were to become incapacitated or die.

Durable Financial Powers of Attorney for the LGBTQIA+ Community

A durable financial power of attorney is an easy way to designate your partner as the person who may handle your financial affairs if you become incapacitated. Durable financial powers of attorney documents vary somewhat from state to state, so it’s important to review and modify this document if you move to a different state.

Advance Health Care Directives for the LGBTQIA+ Community

Executing an advance health care directive allows you to specify medical treatments you want or don’t want. It also allows you to name a person, or persons, to make health care decisions for you if you are unable to make them yourself. An advance health care directive can prevent your biological family members from interfering with your partner’s ability to make health care decisions for you.

Including a HIPAA form with your advance health care directive is important. The form permits health care professionals to disclose pertinent health information and medical records to your partner.

Wills for the LGBTQIA+ Community

A will allows you to name a person to act as executor of your estate after you pass away. An executor is tasked with producing an inventory of your estate, paying all credible debts, paying remaining taxes, and distributing assets to heirs. In your will, you can indicate to whom each asset should be allocated.

If a same-sex, transgender, or binary couple has children, in which one parent is a biological parent of the children, a will addresses guardianship of the children if the biological parent dies while they are still minors. This can help prevent a custody battle between the surviving parent and the children’s biological parent’s family.

Before finishing your estate plan, you should make sure you tie up any loose ends from any previous committed relationships. If you were in a legal union before same-sex marriage was an option, you might be subject to updated state laws that now consider your previous legal union as a lawful marriage. Some states have automatically converted registered civil unions or domestic partnerships into legal marriages.

Prior to the US Supreme Court’s Obergefell v. Hodges ruling in 2015, some same-sex couples married in states that recognized their marriage but then moved to states that did not recognize their marriage. Some of these couples may have split up without legally dissolving their marriage, believing it was no longer valid in their new home state. Many LGBTQIA+ people are unaware they are still married to former partners. This can lead to the possibility of future claims against their estate from a former partner.

Estate Planning is Important for Everyone

Estate planning can be especially beneficial for non-married LGBTQIA+ couples in a committed relationship. If you and your partner have not properly executed adequate estate plans, state laws will, by default, grant rights to biological family members. This may contradict your wishes.

Members of the LGBTQIA+ community have unique needs that can potentially make estate planning more nuanced. We are happy to meet with you to discuss how to properly document your wishes regarding the inheritance of your assets, who can make decisions for you if you’re unable to, and who should care for your minor children if the need arises.

This article offers a summary of aspects of estate planning. It is not legal advice and does not create an attorney-client relationship. If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

The post LGBTQIA+ Estate Planning: Why It’s Important appeared first on Malicoat Law, PLC .

Married Couples Medicaid Compliant Annuities

Tue, 31 Jan 2023 05:00:00 GMT

Generally, annuities pay a fixed annual amount of money to their owners for as long as they live. Most annuities are deferred, meaning the payout doesn’t occur until a later date. However, you can receive immediate payouts if you purchase a Medicaid-Compliant Annuity ( MCA ). When you buy a Medicaid annuity, you give a company a lump sum of cash in exchange for a guaranteed income stream. While only private insurance companies can issue annuities, you may purchase them through banks, financial planners, insurance agents, and brokerage firms.

The Benefits of a Medicaid Annuity

In what circumstances is a Medicaid annuity beneficial? Many Medicaid applicants are denied coverage for long-term care because they have too much money or too many assets. However, Medicaid applicants applying with insufficient funds to pay their nursing home bills can leave a healthy spouse destitute in the short term if paying out of pocket. A Medicaid-compliant annuity can accelerate eligibility for the joint state and federal Medicaid health insurance program, which pays for a person’s medical bills and nursing home care while providing reliable income for the healthy at-home spouse.

To properly plan for a Medicaid-compliant annuity, seek the advice of an elder law attorney who understands your state’s Medicaid rules. There are ordinary immediate payout annuities that are not Medicaid-compliant, so it is critical to receive the correct advice before your purchase. The goal for married couples is for the healthy spouse (the annuity owner) to collect the annuity income while the spouse needing medical benefits from Medicaid-funded extended care and nursing home benefits remains eligible.

Medicaid-Compliant Annuity Requirements

Drawbacks for Medicaid-Complieant Annuities

These Medicaid-compliant annuities are challenging to set up, may not cover all of your assets, and preclude you from accessing them if you require them for future needs. However, because of long-term care’s prohibitive costs, many married couples are willing to accept these potential risks because Medicare does not cover long-term care. The national average for long-term care insurance for a couple both 60 years old is $3,400, and approximately 30 percent of applicants between 60 and 69 are declined coverage.

While that may seem like a lot of money to pay in premiums, if you qualify for the insurance, it pales in comparison to the national estimates of long-term care costs out of pocket. According to Genworth , the cost of long-term care in a 2021 survey cites the following monthly average costs:

annuity.org

Non-Countable Income Stream

Purchasing a Medicaid annuity converts an asset into a monthly income stream for the healthy spouse, and this income does not count toward Medicaid eligibility. Purchasing this annuity type means the couple’s assets do not have to be “spent down” for one to be Medicaid eligible. However, the annuity payments must be completed before the end of the healthy spouse’s life expectancy so that the annuity purchase does not become giftable to heirs.

A Medicaid-compliant annuity will convert liquid assets into a lifelong income stream that helps a healthy spouse maintain their quality of life while the spouse in need of long-term care can still qualify for Medicaid. The Medicaid-friendly annuity requires that it be irrevocable (unchangeable) and non-transferrable to heirs upon your death. Since this purchase must be irrevocable to achieve the goals, it is crucial to meet with an elder law attorney to ensure your selection is the right financial product for your circumstances. A Medicaid-compliant annuity can help both spouses in a marriage to get the resources they need should one require long-term care.

If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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Detecting Elder Fraud

Tue, 24 Jan 2023 05:00:00 GMT

Statistically, fraud is increasing in the senior and near-senior age categories. With more and more people online, scammers are becoming more adaptable and mimicking communications that mimic tech support, government employees, and romantic partners. Seniors are particularly vulnerable groups as they are typically homeowners with substantial financial savings, good credit scores, and trusting natures.

Fraud Statistics from 2019 to 2021

For those in the over 60-year-old category, there was nearly $1.7 billion in losses, a 74 percent increase from 2020, with the average victim losing $18,246 and 3,133 victims losing more than $100,000. Between 2019 to 2020, fraud and identity theft increased by 47 percent, and the recently released FBI 2021 statistics for multiple age categories are alarming.

fbi.gov

The increase in fraud and identity theft since 2019 is 47%, according to the Federal Trade Commission ( FTC ) statistics in the Consumer Sentinel Network Data Book . While younger people were more apt to report losing money to fraud than older people, the median loss of elder individuals was much higher. The top three categories of 2020 scams are identity theft, imposter/fraud scams, and online shopping/negative reviews. They are closely followed by credit bureaus, information furnishers, report users, banks and lenders, and internet services.

Elder Fraud May Be Underreported

Overall, older Americans lost nearly $4 billion to financial scams in 2021, and sadly, seniors are less likely to report losing money to fraudulent schemes. One reason is the older individual may be embarrassed or ashamed of being duped; however, the FBI speculates it could be due to not understanding the reporting process. The FBI Internet Crime Complaint Center is a reporting mechanism for cases of online fraud and other complaints. But the Federal Trade Commission is the main agency collecting scam, fraud, and identity theft reports.

The most common scams, according to the FTC, are:

What We Can Do About It

As percentages for fraud reporting increases with age, it is important to help aging parents and loved ones avoid falling victim. Meeting with an elder law attorney or estate planning lawyer can educate and outline suggestions to handle the monitoring of bank accounts, credit cards, etc., to protect the vulnerable. A financial power of attorney or guardianship may be appropriate to provide a trusted family member or professional financial group the legal access to monitor and manage accounts and quickly identify if there is a problem or suspected financial fraud.

Tech Support Scams

Due to COVID-19, older individuals’ preferences became stay-at-home for health protection, prompting them to go online more frequently, increasing the likelihood of internet scam exposure. The internet of things and all the opportunities it presents, combined with managing apps, software, passwords, updates, and hardware challenges, can create confusion in seniors who are not so savvy about the digital age. Because of these conditions, older adults are six times more likely to report being defrauded through a tech support scam than younger counterparts.

Romance Scams

The highest aggregate financial losses for individuals over 60 years of age occur due to romance scams. Often these older adults experience loneliness, making them easy targets. They may wire transfer money, send gift cards, and make credit card payments to someone they believe is a companion or love interest.

The states most affected by elder fraud (60 or older) rank California first, followed by Florida and Texas, but elder fraud can occur in any state. Educate your loved ones about the most common types of online scams, including:

Many scams are putting older Americans at risk of being defrauded of their money and dignity. The statistics show scam artists are making more money than ever. Establishing a relationship with an older family member or loved one intending to monitor their financial account activity can protect them from losing money. Educating older adults never to give out financial, government ID, or other personal information over the phone or the internet is crucial to protect them. The older you become, the greater the risk of elder fraud. Knowing the possible schemes and planning additional oversight of your financial accounts can help protect your or a loved one from elder fraud. If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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How to Avoid Inheritance Mistakes

Tue, 17 Jan 2023 05:00:00 GMT

Dealing with the death of a loved one and receiving an inheritance is an emotional time. The loss of a loved one is sad but the influx of funds can bring joy or relief. It can be hard to think and plan objectively. After receiving an inheritance, some people blow through it surprisingly quickly. Here are some mistakes people make when inheriting money and how to avoid them.

Not Factoring in Potential Taxes

Depending on the size of the inheritance, you may get bumped into a higher tax bracket than you were previously. You could also be on the hook for capital gains taxes. It is a good idea to talk with a financial advisor or an accountant before you spend any of your inheritance.

Failing to Make a Budget

If you don’t have a budget and are not used to managing money, you may not be prepared to handle a large influx of funds. This could lead to overspending and quickly disappearing inheritance. If you already have a budget, factoring in your new funds will help you see how it will affect your saving and spending strategy.

Spending Too Much

When receiving a large sum of money, it can be easy to think that there is plenty to last. All too often people blow through inheritances by making big ticket purchases, such as cars, boats, or vacations. Even if the purchases don’t seem all that big, the costs add up quickly, especially if items purchased have additional costs, such as maintenance and insurance.

Stay grounded and think about whether or not you really need what you’re thinking of buying. Also consider how much more money you could have in the future if you invest the money instead of spending it now. If you know how much you will inherit before you receive it, you can create a budget to make it last.

Not Paying Off Debts

Paying off debts is the first thing you should do if you inherit a large sum of money. Paying off your mortgage, credit cards, or student loans will give you more freedom to do other things. You will still need to balance the debts you decide to pay with the amount of money you’d like to invest for the future.

Losing Other Income Sources

For people receiving asset-based or income-based government benefits, such as disability payments or Supplemental Security Income (SSI), receiving an inheritance could disqualify them from the benefits. This is something the benefactor needs to plan for before they pass on the inheritance. Establishing and funding the appropriate type of trust will reduce the possibility of this happening.

Not Saving Enough

Suddenly getting a large amount of money can make it easy to think about all the things you can do with it now instead of how you can save and invest for your future. After paying off debts, create an emergency fund with enough money to live on for about six months. Once you have done these two things, start increasing your contributions to your retirement accounts.

Not Getting Expert Advice

An inheritance, especially a big one, can help you achieve financial security and allow you to pursue a dream career or some other life goal. However, an inheritance can vanish surprisingly quickly if not managed well. Before doing anything with your inheritance, consult with a financial advisor, an accountant, and an estate planning attorney. Each of these professionals will help you manage your inheritance wisely and plan for a financially healthy future.

This article offers a summary of aspects of estate planning law. It is not legal advice, and it does not create an attorney-client relationship. If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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What Social Security Benefits Look Like in 2023

Tue, 10 Jan 2023 05:00:00 GMT

More than seventy million people who rely on Social Security’s benefit programs will undergo significant changes in the coming year. Inflation continues to increase daily living costs with higher costs for gasoline, food, utility, rent, and mortgages. Yet real wages have been stagnant for decades to all but the highest-earning households, making basic living costs untenable for an increasing number of workers. Additionally, supply chain problems also increase the prices of available goods. The five changes to Social Security benefits in 2023 will relieve some of the current challenges that inflationary pressures present.

Cost of Living Adjustment (COLA)

Before 1975, Social Security benefit increases were set by legislation. In 1972, congress enacted the COLA provision, and automatic annual COLAs began in 1975. Since then, the COLA has set all SS public benefits increases. This adjustment figure is tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers ( CPI-W ). The COLA ensures that the purchasing power of Social Security benefits programs does not erode due to inflation.

The COLA for 2023 is 8.7 percent and will appear as an increase in benefits payments. According to Bankrate , this adjustment will amount to a $146 increase for the average retired worker receiving Social Security benefits, increasing the average check from $1,681 to $1827. Couples, where both partners receive benefits, will receive an estimated payment increase of $238, increasing the average check from $2,734 to $2,972.

Maximum Taxable Earnings Increase

The Contribution and Benefit Base limit changes annually according to the national average wage index . Usually referred to as the taxable maximum for earnings, the base is $160,200 for 2023. This tax is a funding mechanism for Social Security benefits via the Old Age, Survivors, and Disability Insurance ( OASDI ), more readily known as the Federal Insurance Contributions Act ( FICA ).

W-2 workers have this tax deducted from their paychecks, and 1099 employees pay through the self-employment tax upon federal tax filing. The tax revenue supports the ASI Trust Fund for retirement and the DI Trust Fund for disability. The tax amount typically increases at a 6.2 percent rate meaning more of a worker’s income is subject to tax.

Maximum Social Security Benefit Increase

The maximum Social Security receivable benefit for workers retiring at full retirement age will increase from $3,345 to $3,627 in 2023. This maximum only applies to those who take their benefit at full retirement age, which is 67 for people born after 1960.

Maximum amounts will vary depending on those who retire before full retirement age as benefits reduce in that situation. The situation also applies to those who retire after the full retirement age, a strategy known as maxing out your benefit check. Bankrate cites three main levers to max out your Social Security income: working longer, earning more, and delaying your benefit. All of these strategies will provide you with the maximum retirement benefits.

Increase in Average Benefit for Spouses and Workers with a Disability

In 2023 beneficiaries’ average benefit amounts will increase across the board. This increase includes benefits for widows and widowers, and people with disabilities. According to Bankrate, the figures break out accordingly:

These increases are averages, and individual circumstances will vary. The SSA has a Fact Sheet that can help narrow down your specific situation and describe your benefit change amounts. The SSA will mail COLA notices throughout December to retirement, survivors, and disability beneficiaries, as well as SSI recipients and representative payees. To learn about your increases online, in early December, you can log into your personal My Social Security account in the Message Center under COLA notices. You can read more about the process here .

Social Security Adjusts Earnings Test Exempt Amounts

If you claim retirement benefits before full retirement age and are still producing income, Social Security will withhold some benefits from your check at a certain earned income threshold. The program calls this the retirement earnings test exempt amount, and it can claim a significant chunk of your benefits if you are still working.

In 2023, if you begin collecting Social Security before full retirement age, it is permissible to earn up to $1,770 per month ($21,240 annually) before the SSA will begin to withhold benefits. This withholding is $1 in benefits for every $2 above the limit. This rule applies even when you reach full retirement age but with much more forgiving terms. In 2023 at full retirement age, you can earn up to $4,710 per month ($56,520 annually) before the SSA withholds benefits at a rate of $1 in benefits for every $3 earned above the limit.

These five Social Security benefit increases for the year 2023 can help all beneficiaries, especially those living on fixed incomes, to combat rising prices brought about by increasing inflation and supply chain problems. The cost of living projections for 2023 may increase 2024’s COLA by around ten percent. Uncertainty in the world and financial markets will continue to affect retirement accounts and the lifestyles of aging Americans. The law enacted by Congress in 1972 for automatic increases to Social Security benefits using a COLA helps retirees, survivors, and people with disabilities live financially better lives.

If you are currently receiving Social Security benefits or applying for them, reach out to an elder law attorney or personal injury attorney to understand the best time to apply and how to maximize your benefits.

If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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Plan Ahead to Reduce Probate

Tue, 03 Jan 2023 05:00:00 GMT

The probate process occurs after someone passes away. Probate can be lengthy, complex, and expensive, but good estate planning can mitigate unwanted risks by anticipating and preventing problems before they arise. Sound estate planning can make the probate process run efficiently and smoothly, protecting your estate’s value and legacy, and preserving your family’s well-being.

Probate includes:

Avoiding Probate

An estate planning attorney can structure your estate to minimize or avoid probate entirely. Circumventing probate reduces legal fees for your surviving heirs, protects privacy as probate is part of the public record, and avoids estate tax which can significantly reduce inheritable assets.

Popular Alternatives to Probate

A revocable living trust transfers assets to the trust but allows access to them during your lifetime. This probate-avoidance technique can protect any property you own, including:

A revocable living trust

This trust functions like a will by leaving your property to heirs, but you can change the terms of your trust and the beneficiaries or revoke it while you are still alive. After your death, the property in the trust is in the control of your named successor trustee. They distribute the property to inheritors according to the trust’s instructions without involving probate court.

Life insurance and annuity policies

Death benefits are paid directly to a designated beneficiary upon the death of the insured or annuitant and pass outside of probate. And in some states, for example, Texas , death benefits are exempt from creditor claims for either the insured or beneficiary.

Payable-on-Death ( POD ) accounts or Transfer-on-Death (TOD)

A simple, no-cost strategy to keep money, even large sums, out of probate by designating a beneficiary via the financial institution’s POD paperwork process for all types of bank accounts. A TOD transfer applies to stocks, bonds, and brokerage accounts in the same way. These accounts are not accessible to the beneficiary while you are alive. You can designate beneficiaries on various accounts types, such as:

As the testamentary deposit account owner, you can withdraw money, close the account, or name a different beneficiary at any time. There may be a short waiting period after the designator’s death before the bank or credit union releases funds, but probate is not a requirement.

Depending on where you live, a POD account can also be a:

In most cases, you cannot name an alternate beneficiary, so staying current with the paperwork designating your choice is important. No matter what information is in your will, it can’t override a properly established beneficiary designation.

Joint tenants or joint tenants by the entirety designate real estate

This property designation type has two owners. When one owner dies, the surviving owner automatically owns the property. This ownership is commonly referred to as the right of survivorship and also applies to community property in community property states.

Streamlining the Probate Process

Many states have simplified probate procedures for smaller estates, meaning they are under a certain dollar valuation. Depending on your state’s rules, even if your estate exceeds the definition of a small estate, there may be an avenue to exclude large chunks of assets to lower its size and value.

Many states don’t consider the value of certain properties when evaluating an estate. These property types may include real estate, real estate located in another state, and even motor vehicles. Additionally, many states won’t count the value of a property that doesn’t pass through probate. In essence, probate avoidance can pay double dividends after your death.

When trying to minimize an estate’s value to streamline probate, some states permit you to subtract any amounts owed on a property you don’t fully own. This can make a huge difference. Knowing your state’s definition of a small estate is crucial when creating probate-avoidance strategies. Staying under a certain threshold can simplify probate.

Probate Takeaway

A sound estate plan can circumvent many issues that arise from probate, which may cause a lengthy process and reduce your estate’s value and legacy. Avoid the additional costs of probate, both monetarily and to your family’s well-being. Your estate planning attorney can help you identify the best path to protect your estate from probate.

If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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VA Disability Claims Expedited

Tue, 27 Dec 2022 05:46:00 GMT

SSDI and SSI claims for service members and veterans can be processed more quickly in some cases. The American Association for Retired Persons ( AARP ) provides links covering SSDI and SSI , presenting a current and brief overview of the two programs, including veterans with disabilities. Expedited processing is available to former and current military personnel who qualify.

2 Social Security VA Qualification Categories

The first category is known as Wounded Warriors . You can qualify if your military service was on or after October 1, 2001, and you became disabled during active duty. Your disability or injury does not need to be combat-related. It simply must have occurred during the above time frame during a period of active service.

The second category is 100 percent P&T . To qualify, the Department of Veterans Affairs ( VA ) must deem you fully disabled. Fully disabled means you have a 100 percent permanent and total compensation rating.

Other VA Social Security Criteria

In addition to meeting one, or both of these conditions for fast-tracking, the applications must receive approval under these two definitions:

Online VA Benefits Applications

When applying for a fast-track veteran’s claim, you do not specifically request to expedite the process. Typically, veterans will apply online, and the electronic sharing of medical records with the Department of Defense and the VA is most often automatically flagged for wounded warriors and veterans with 100 percent P&T ratings by the Social Security Administration ( SSA ).

However, the SSA does recommend notifying the agency directly if you were injured on active duty or qualify as P&T. There is an area in the “Remarks” section of the online application for disability benefits. You can also relay the information while speaking to an SSA representative in person or on the phone. Be ready with your VA letter confirming your status to provide to the Social Security Administration.

Claim Approval and Processing

When your claim meets fast-track approval, the SSA state and field offices rush the process to make disability determinations. The length of decision-time depends on alternate factors such as:

Additional Information

It is important to remember that although your application process may receive fast-tracking, a 100 percent P&T rating does not guarantee approval by the SSA for your disability claim. Still, a fast-track status will remain throughout your entire application process. Even if you receive an initial denial for your claim, the SSA will continue to expedite your appeals. It is also important to understand that while you may receive disability benefits from both the VA and Social Security, in some cases, one may affect your eligibility and benefit amounts for the other.

The services of a veteran’s attorney or disability attorney specializing in veteran benefits can guide you through the complexity of applying for and receiving benefits from the VA and Social Security. Even the online process can be lengthy and requires collecting many documents. Your lawyer can assess your unique situation, ensuring the application is complete and helping you receive the most benefits possible during the fast-track process.

There is also a process to expedite claims if you are a veteran living abroad. More information is available on the SSA website . You can find useful information and read through frequently asked questions. However, for the best protection possible to expedite your veteran Social Security disability claim, meet with your veteran disability lawyer, who is familiar with the eligibility and complexity of SSA and VA programs.

If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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The Probate Process With No Will

Tue, 20 Dec 2022 05:36:00 GMT

Intestacy refers to the death of someone without a will. If this happens, a probate court oversees the distribution of the decedent’s assets. Also known as intestate succession, it has similarities to the probate process when a will is present. Still, the terms are not interchangeable—any adult who dies intestate triggers a somewhat different process than a will going through probate.

Do You Have a Will?

Many Americans will face the challenges of their loved one dying without a will. According to Think Advisor, a recent survey finds that 59 percent of men and 72 percent of women do not have a will or estate plan. In another survey, CNBC finds a mere 33 percent of Americans have properly established estate plans. Many individuals feel they do not own enough to necessitate writing a will or negatively perceive estate planning as too complex and expensive. They leave their grieving loved ones to accept the court’s decisions regarding their loved one’s inheritable assets and possessions.

Resolving the Estate

The probate court judge’s primary duty is to oversee the lawful resolution of the decedent’s financial affairs. They will follow state law to select a personal representative as the estate administrator. There is technically no executor as no will was left to execute, yet the estate still must be legally resolved. A loved one can begin the intestacy process by going to the decedent’s county probate court, filing a death certificate, and petitioning to begin probate. They will typically nominate themselves as the administrator, but the probate court judge has the authority to name the estate administrator.

Assets Falling Outside of Probate and the Role of Administrator

Like dying with a will, dying intestate does not affect jointly held accounts and those assets with a designated beneficiary or payable-upon-death status. These may include money market, savings and checking accounts, IRAs, retirement accounts, certificates of deposit (CD), life insurance, and annuity policies. The estate administrator, as appointed by the probate court judge, will perform the functions as required by state law, including:

Under the law, family members may inherit the remaining assets after payment of the estate’s final debts through the estate administration process. The handlers of the administration process may be one person, two or more individuals, a bank, or a law firm. In cases of estates under a certain dollar amount, the administrator may petition the probate court for a simplified version of the probate proceeding.

Standard Probate Proceedings

Though some of the filings and processes are different than probate with a will, the probate court is still actively involved if your loved one dies intestate. The probate court processes may:

Resolve or prevent conflicts – A probate court judge will decide how to answer any legal questions that may arise related to state law. When someone dies without a will, family members often claim certain assets or possessions of the decedent, citing a verbal promise. The estate administrator can avoid becoming the lightning rod of controversy for decision-making since the probate judge makes the final decision. Although this is no guarantee heirs won’t fight things out in court, in most cases, intestate succession laws prevent these disputes.

Legally Transfer Title – Real property like a house, car, truck, or boat, without joint tenancy with right of survivorship or held in trust, requires the probate court to transfer the name on the title. In cases of real estate owned by a couple or shared personal property in a community property state, titles may transfer automatically to the surviving spouse.

Cut off claims by creditors – Once the probate court process starts, creditors have a certain amount of time to bring a claim against the estate. Estate administration can reduce this timeframe in some states to as little as three months so that a creditor can’t approach a family member looking for money months or even a year into the future.

Take money from accounts – If the decedent’s financial accounts are not jointly held or do not have named beneficiaries, or payable-on-death status, a family can’t access the funds in the accounts without the probate process and approval.

Probate Laws Vary by State

In cases of dying intestate, the probate process is similar among all states, but state laws still vary. If you are administering an estate without a will, an estate planning attorney or probate lawyer can help you understand the differences in the probate process. Getting professional legal advice can be well worth the money spent to distribute the decedent’s assets according to state law and properly close the estate. If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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Inflation-Adjusted Social Security Benefits

Tue, 13 Dec 2022 05:32:00 GMT

In 2023, Medicare Part B premiums will be reduced and the cost of living adjustment (COLA) will be the highest in decades. It is being touted as a win for the American people. According to the Social Security Administration, there will be an 8.7 percent cost of living adjustment to benefits, the largest increase in more than four decades. The substantial hike is primarily in response to the highest inflationary pressures the country has seen in four decades. The COLA benefit increase of 8.7 percent also applies to Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) beginning in January 2023.

A Much Needed Benefits Increase

Analyst Mary Johnson who tracks COLA data for The Senior Citizens League ( TSCL ), says, “This may be the first and possibly the last time that beneficiaries today receive a COLA this high.” On average, the upcoming increase for approximately 70 million Americans in Social Security benefits will be more than $140 a month beginning in January, bumping the average benefit to $1808.14. Nearly seven out of ten retirees rely primarily on their Social Security benefits as a primary retirement income source. This increase will provide some relief to offset inflation but still does not keep pace with what Americans have already spent during 2022.

Fallout from Skyrocketing 2022 Inflation

The US inflation rate in 2022 ran as high as 9.06 percent in June and consistently ranked in the 8 percent range. The COLA benefits increase for 2022 was a 5.9 percent increase. Overall, the American consumer on a fixed budget relying heavily on their Social Security benefit lost money to inflationary pressures. Some seniors had to make hard choices or rotate purchases for food, medications, gasoline, and utility bills. The COLA increase comes a year after prices have increased, and the inflation adjustment for 2023 reflects 2022 prices.

The Affect on Medicare Part B Premiums

In the case of Medicare Part B, the premium increase in 2022 was 14.5 percent. Much of the Part B increase was in anticipation of Medicare spending for the new Alzheimer’s drug Aduhelm which some felt was underwhelming in its efficacy. Since then, the expensive drug has seen a price reduction by half. Medicare plans to “pass back” the savings with a reduction in 2023 Part B premiums for beneficiaries. However, 2023 premiums will only decrease monthly by $5.20 to $164.90, which is still well above $148.50 before the jump to $170.10 in 2022. So the premium reduction is because the increase in the previous year was too high.

Taxes Reduce the Actual Amount of Benefits Received

Individuals will continue to receive less overall than inflation because of the growing percentages of benefits being taxed (since 1984). Barrons , which covers US financial data, relevant statistics, and market developments, cites that as much as 85 percent of your benefits can be taxed. This situation is irresponsible governance to those on a fixed income as contributions to Social Security are made with after-tax money. Additionally, this “double tax” situation introduced in the 1980s did not index the thresholds to inflation, resulting in taxation that once only affected about ten percent of Social Security beneficiaries and now affects nearly half.

Benefits Recipients Still Need Help to Understand the Impact of COLA

At best, with the COLA increase and Medicare premium reduction, most fixed-income seniors are looking at a net gain of zero. While the COLA increase reduces the erosion of benefits over time, the possibility of continuing to fall ever farther behind financially is a real risk. The Social Security Administration will mail COLA notices throughout December to retirees, survivors, SSI and disability recipients, and representative payees. To receive the information online, you must access or make a mySocialSecurity account by November 15, 2022.

The Social Security COLA benefit increase for 2023 is a welcome relief for seniors on fixed incomes; it is not the only answer to protecting your retirement years. An elder law attorney is as essential to your retirement planning as a financial advisor and can work together to maximize benefits and protect them. Proactive considerations and updates to existing plans when you are near retirement or in retirement can positively affect your ability to age comfortably. If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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Estate Planning for Farms and Ranches

Tue, 06 Dec 2022 05:47:00 GMT

The succession and estate planning of farm and ranch real estate, livestock, and equipment present unique challenges. There is a common misconception that federal estate taxes threaten farm or ranch property, preventing assets from getting to rightful heirs. Over the past twenty years, legislation has managed to ease the estate tax burden.

According to the current Tax Cuts and Jobs Act (TCJA), tax exemptions will remain at $12.06 million per inheritor until 2026. Although farm assets may require filing a federal estate tax return, debts against assets will lower the final estate value. Depreciation will protect the estate from excessive valuation and taxation.

Assets and Reinvestment Strategies

Farm or ranch assets typically fall into three categories:

Much of the tangible assets come from reinvesting a majority of farm profits back into the business to build capacity and maintain or modernize buildings and equipment. Reinvestment can also expand the operation’s size to capitalize on economies of scale. However, too much reinvestment may unbalance other asset categories, particularly retirement.

Succession Planning

If there is a successor already working in the business, a family farm hand in training to one day run the operation, they might assume there is planning to make business assets affordable and accessible when they take over the farm. Yet, there may also be off-farm heirs, and the owner may include farm assets to serve as an inheritance. So what happens to inheritances if the focus is on the business and retirement assets? Early and careful succession planning is required to determine how best to balance the farm’s business, retirement, and inheritance goals.

Property inheritance is common within farm and ranch families. There is an emotional symbolism attachment to the property transfer from generation to generation. Throughout the years, the farm or ranch may come to symbolize love, trust, power, history, and family rituals. Identifying the right course of action and making estate planning decisions can be a daunting task with so much legacy investment. Because of these emotional attachments and complexities, many farm owners mistakenly do not create a plan.

Why Estate Planning is Important for Farmers and Ranchers

Without estate planning, owners leave the farm subject to the state’s succession plan, where the assets are typically divided equally among the heirs. This equal distribution of farm assets increases the chance that the on-farm successor will not have all the farm assets required for business operation. In time, this situation will impede the farm’s ability to grow or put the business at risk of failing as the on-farm successor must buy sibling inherited farm assets back at near full market value. Most farms do not generate enough cash flow for the successor to purchase the farm assets outright. This situation puts the farm business in the position of having to pay for its assets twice to cash out off-farm heirs’ inheritance.

Statistics Regarding Heirs and Asset Division

Oklahoma State University developed a statistical model comparing probabilities of success rates of various farm inheritance transfer strategies. The lowest success rates and farm failure most often occur when farm assets are divided equally among heirs. As an owner, if you want your farm or ranch legacy to continue as a working business, your estate planning strategy needs to be more creative.

Three guiding principles can help an owner think through fair and practical distribution decisions:

Making the Right Decision

Farm families generally incorporate all three principles to varying degrees. Updating the estate plan may change the decision-making emphasis dependent on fortunes outside the farm, goodwill, and necessity. Like many decisions in life, timing is everything, and your estate planning attorney can readily amend your plan to meet changing challenges and fortunes.

However the farm or ranch owner decides to split assets, one of the most important aspects of estate planning is an honest appraisal of the farm’s financial capacity to continue as a family business and achieve its goals. If the goal is the continuation of the family farm for subsequent generations, then the equal distribution of farm assets is not a tenable solution.

Communication is Critical

The owner generation must communicate expectations to family members, presenting clear goals to ensure a smooth future transition. The more off-farm heirs understand the decision-making process, the better their expectations are managed to reduce the possibility of family conflict after the owner passes. Identifying and documenting near and long-term goals for a farm or ranch business owner and how they affect family heirs often make clearer pathways to success.

An estate planning attorney can take the owner’s goals and financial information and structure an estate plan that will preserve the business without unnecessary family conflict for those heirs who are not in the farm or ranch business. The sooner you begin planning with your lawyer, the easier it will be to accommodate all heirs while preserving the family legacy. Life insurance policies and other techniques can provide inheritable money to off-farm heirs while permitting the farm to continue operation, keeping your legacy intact. If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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Protecting Loved Ones in Nursing Homes

Tue, 29 Nov 2022 05:00:00 GMT

To protect your loved ones residing in nursing homes it is crucial that you advocate for them. Residents in nursing homes and other long-term care facilities are disproportionately affected by the flu, pneumonia, COVID 19, and other contagious diseases. According to the American Family Physician Journal, a flu outbreak in a nursing home often affects 20 percent or more of the residents.

If you have a loved one in a nursing home or other long-term care facility, AARP has identified some specific questions to ask about the facility to help ensure the safety of your family member.

Inquire about vaccinations:

Ask if anyone at the facility has tested positive for any infectious disease recently:

Understand the steps is the facility taking to prevent outbreaks of disease:

Find out if the nursing home helps residents stay in contact with their families and other loved ones:

Determine if the facility regularly communicates important information to residents and their loved ones:

Know if the nursing home is fully staffed with doctors, nurses, aides, and other workers:

Ask about the maintenance of healthy-living programs:

If you have a spouse, parent, sibling, or other loved one living in a nursing home, they depend on you to advocate for their protection and well-being. Asking the right questions helps ensure that their nursing home facility or long-term care services prioritize their health. For legal advice, or to discuss your legal matters, please contact us at 989-495-2555.

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Comparing Estate Planning and Elder Law

Tue, 22 Nov 2022 05:00:00 GMT

When the time comes to plan for your future both medically and financially you may begin to wonder what estate planning and elder law are and how they compare to one another. Estate planning and elder law have some similarities but are two different concepts.

Even though these two types of law are for different stages in life, they are often handled at the same time. This is because many people wait till later in life to start their estate planning process. When an older person creates an estate plan, they may also need some elder law counseling. To better understand the two areas of the legal field, we will look at the solutions they provide, the questions they answer, and how they can work together.

Estate Planning

The main goal of estate planning is to choose legal documents that will determine what will happen to you and your assets once you have passed away or become incapacitated. An estate planning attorney will help you make important decisions, such as:

Durable Powers of Attorney

By using a general durable power of attorney document, you can name a person, or persons, to make financial decisions on your behalf if you are no longer able to do so. Expressing your end-of-life wishes requires designating a person to make healthcare decisions for you by completing a health care directive. By completing a Health Insurance Portability and Accountability Act (HIPAA) form, you will give your health care providers permission to share your medical records with the people listed on your HIPAA form.

Wills and Trusts

In your will, you can name the beneficiaries of your estate as well as a guardian to care for any minor children you may have at the time of your death. You can also name a conservator to manage the money you leave for their benefit. Some people create a trust, or trusts, to hold their assets during their lifetime and after death. They then sign a pour-over will that moves assets into their trust(s) upon death. You can leave instructions concerning your funeral or memorial service and what you want to happen to your remains in your will or a separate document.

Elder Law

Whereas estate planning focuses mostly on what happens after a person dies, the area of elder law focuses on a person’s last years or months. This can include planning for long-term care and applying for government assistance, such as Medicaid, Medicare, and veterans’ benefits, if applicable. Using elder law tools and strategies, an elder law attorney can help you find ways to preserve your assets while preparing to apply for benefits.

Like estate planning, it is best to start the elder law planning process well in advance. To qualify for benefits, such as Medicaid, you may have to sell or transfer ownership of some assets years before applying for benefits. Gifting or transferring assets out of your name must be done according to government requirements, so applying for benefits can be a complicated process. Hiring a skilled attorney can make the difference between receiving benefits quickly or not at all.

Since seniors are at a greater risk for discrimination, neglect, and abuse, elder law attorneys can help seniors and their family members recognize when a senior’s rights are being violated and take legal action to counter and remedy the situation.

Tying Estate Planning and Elder Law Together

It is best to start your estate planning process as soon as possible since the decisions involved could come at any time due to an accident or an illness. Planning for end-of-life care and the benefits associated with it may come later in life, but preparing well in advance lets you legally reduce assets for an extended period to qualify for benefits, like Medicaid.

Even younger families just starting their estate planning process may look at elder law planning at the same time for senior family members’ needs. Some estate planning tools, such as trusts, are often used when helping a parent plan for Medicaid and other government benefits for long-term care expenses. An attorney experienced in both estate planning and elder law can advise you in these areas and help you navigate complicated processes.

This article offers a summary of aspects of estate planning law. It is not legal advice and does not create an attorney-client relationship. For legal advice, or to discuss your legal matters, please contact us at 989-495-2555.

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Government Programs Provide Senior Benefits

Tue, 15 Nov 2022 05:00:00 GMT

Many US seniors today are struggling with financial insecurity due to the inflationary pressures they are being faced with. Aside from cutting back on unnecessary expenses, many retirees or near-retirement individuals should look to existing government programs to possibly qualify to receive assistance and reduce the anxiety many Americans feel living on a fixed income.

The National Council on Aging ( NCOA ) works with thousands of national and local partners to provide tools, resources, advocacy, and best practices for every aging American to have health and financial security. Checking out if you qualify for senior benefits through government programs is easy to do with NCOA’s online BenefitsCheckUp tool.

Wasted Benefits

Every year billions of available dollars in US benefits programs are not claimed because older adults (55 or more) are unsure if they are eligible and, if so, how to apply. No registration is necessary, and requests for information are minimal. Personal data entered into the website will remain confidential, and accessing the database costs nothing. If you hate filling out forms and get confused by all the questions, estate planning and elder law attorneys go through this process every day. Contact them for help. There is rarely an upfront cost for legal help, and you will be in a much better financial position once you begin receiving assistance.

The Online Benefits Check Up

If you complete the benefits check-up online, NCOA will send a confidential report to your mailing address listing the help available to you and how to apply for it. Since 2001 this NCOA program has helped millions of older adults receive help paying for medicine, food, utilities, and more. More than 2,000 benefits programs are in the check-up system, including categories such as:

The online BenefitsCheckUp site helps older individuals identify the federal and state assistance programs for which they can qualify. This NCOA website is newly revamped and permits error corrections and the addition of information if you feel the need to revise your answers. The resulting online individualized Eligibility Results report can be saved in a PDF format to email to yourself, your lawyer, or a trusted family member.

Providing this eligibility information to your elder law or estate planning attorney is a smart strategy. Suppose you already receive disability benefits through SSDI, SSI, or other programs. In that case, adding other government assistance programs may result in unintended and negative consequences that may render you ineligible for benefits you already receive. Your lawyer will know the strategies already in place and how additional programs may affect your current planning.

The chart above shows how many older adults struggled to manage basic expenses even before the inflationary circumstances of late 2021 – 2022 (and predicted beyond). Participation rates in government assistance programs are at a historic low , with a mere low to mid sixty percent of eligible individuals participating.

Benefit take-up rates are low due to program enrollment barriers. Many older adults lack awareness that these benefits exist, and when they do, the application process for many programs can be cumbersome and complex. Additionally, perceived stigma about receiving government assistance and other program misconceptions contribute to lower participation rates.

Ramsey Alwin, NCOA CEO and President, admits , “In today’s economy, inflation is taking a bigger and bigger bite out of people’s incomes.” He adds, “We completely redesigned BenefitsCheckUp to make it even easier … no one should have to choose between paying for medications or food.”

To worry less and age better with more resources at your disposal, explore the NCOA’s BenefitsCheckUp website and learn what is available to you. Before you use the contact information to take the next step to apply, be certain to consult with your elder law or estate planning attorney. All assistance you receive should not interfere with existing plans and help you age successfully. More than 2,000 government benefits programs are available to help you, and it can make the difference between thriving or just surviving. If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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Guardianship of an Elderly Parent

Tue, 08 Nov 2022 05:00:00 GMT

It is common that as our parents age they will lose their ability to make informed decisions regarding their lives. This growing inability may occur due to Alzheimer’s disease, other forms of dementia, mental illness, stroke, brain injury, or other severe health or disability conditions. In the absence of your parent preparing for their elder years via a durable financial and medical power of attorney, guardianship may be needed to protect their best interests.

When There is No Durable Power of Attorney

If your parent did not prepare for this eventuality of requiring legally recognized help, you would not be allowed to create these documents once they are already mentally impaired. With that moment lost, claiming the guardianship of an elderly parent is a process that requires court approval to ensure the protections moving forward represent the best interest of the aging adult.

Medical Requirements for Guardianship

When a parent does not have an estate plan with the power of attorneys, they may bristle at the mere mention of requiring guardianship. Your first step is to obtain a doctor’s letter or physician’s certificate attesting to the patient’s physical abilities and mental acuities. Suppose you meet with resistance to having your parent willingly submit to an evaluation. In that case, you may still apply for guardianship with the court, which can compel your parent to submit to a court-ordered independent medical examination.

When is it Time to Step In and File for Legal Guardianship?

There are signs to recognize, such as lapses in bill payments, lack of healthy foods in the home, or your parent’s insistence they can drive. Driving is imperative to monitor because your parent endangers not just themselves but others. Additional signs it may be time for guardianship include self-isolation, hearing or sight loss, and general forgetfulness, which can lead to injury around stoves, stairs, and other risks.

Application for guardianship is filed with the clerk of superior court and is a fairly standard procedure; however, by state, there are nuances and differences in law and process. If possible, have a medical examination before applying. If not, the court can order one later. The court will begin legal guardianship proceedings to determine if you are fit to be the guardian. This process generally involves assessing any existing conflict of interests, financial responsibility, and even a criminal background check.

Notifying Your Parent and Family of the Proceedings

With the application on file and awaiting court approval, you must notify your parent, the proposed ward, of the application. This notification is a legal requirement and can sometimes create family conflict. A parent’s frantic contact with other family members upon receiving the guardianship documentation is not uncommon. Notifying these family members or others with a right to know is not only a legal requirement but also best discussed before filing. Having family on board to protect your parent with guardianship is best when you mutually agree.

Your Parent’s Right to Representation

The court will appoint an Attorney Ad Litem to represent your parent. This person will legally advocate on your parent’s behalf, representing their needs. The court may also appoint a Guardian Ad Litem , who may not necessarily be a lawyer, to represent the interests of a parent who may be incapacitated. Typically, court hearings occur between 15 and 30 days from the respondent (your parent) being provided the filing for guardianship. It may take longer if the court requests a multidisciplinary evaluation. In this instance, the clerk of the court may appoint an interim guardian whose powers include addressing the respondent’s immediate needs.

A Multidisciplinary Evaluation (MDE)

A thorough evaluation may include medical, psychological, daily life skills, education, social work, vocational rehabilitation, and occupational therapy needs of your parent, the respondent. In the case of an aging parent, the focus tends to remain on medical, psychological, and daily life skill assessments.

After a full assessment of your parent’s unique situation and your application for guardianship, the court will decide based on the best interests of your parent, the ward/respondent. There is a process to appeal the decision, generally filed in writing within ten days of the court’s decision. The appeal will prompt a new hearing before a superior court judge.

Guardianship Laws Vary By State

When applying for guardianship, it is crucial to understand the state laws where you live. Differences in terminology exist between states; some require a guardian to control your parent’s home environment, health care, and day-to-day needs, and a conservatorship which appoints someone to make financial decisions such as paying bills, investment management, and budgeting. Some states will use the terms interchangeably.

The process can take substantial time and money, particularly if family members disagree. Many states give preference to the ward’s spouse, adult children, and other family members as they know the family member and their needs the best. The court may also appoint a professional or public guardian. All court-appointed guardians are entitled to reasonable compensation, although family members or friends typically will not charge for the service. Compensation for guardians must have court approval.

If appointed your parent’s legal guardian, it will be stated in a written court order. You will remain their guardian until your parent dies, the court finds your parent is no longer incapacitated, you die, or the court finds it is in the ward’s best interest to remove you as the guardian or conservator.

Guardianship is the best option if your parent has no appointed durable power of attorney for health care and finances and they need your help due to advancing age, disability or illness. You should consult an estate planning or elder law attorney if you want to establish guardianship for your aging parent. They can guide you through applying for guardianship or conservatorship and help manage your expectations regarding the best care for your parent. If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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Probate: An Overview

Tue, 01 Nov 2022 05:00:00 GMT

If you are looking to minimize or avoid probate altogether an estate planning attorney can help. Probate proceedings are part of the public record and can be very time-consuming and expensive. However, in nearly every case, some probate is necessary, so it is important to understand how to navigate the process.

Probate proceedings seek to validate the decedent’s last will and retitle the estate’s assets into the name of heirs according to the deceased’s wishes. These court-supervised proceedings ensure estate debts are paid and oversee the distribution of assets to heirs.

After losing a loved one, the family will generally come together and hopefully encounter a properly written will and other crucial estate planning documents. Without a well-organized plan, the probate process can take much longer. Family members will be tasked with gathering information necessary for court.

Probate Court Proceedings

The petitioner, usually the estate executor or personal representative, will begin the process by filing a death certificate and a last will to the probate court. It is also useful to produce a list of know creditors and names and contact data of the decedent’s heirs. Smaller estate probate processes and those estates not contested by heirs can usually work through probate fairly quickly and efficiently.

Laws regarding probate are state-specific, and most states set valuation thresholds. If, for instance, an estate value is less than $75,000 and no one contests the will, less formal probate hearings may move more quickly. Since the advent of COVID-19, these court proceedings may even transact over video calls.

For larger value estates, there is a substantial amount of necessary paperwork to validate the will, determine asset distribution, settle disputes, pay off remaining debts, and ultimately close the estate by paying the decedent’s final taxes. A checklist of documents to gather may include:

Probate Proceedings Without a Will

The decedent’s residence states intestacy laws will apply if your loved one dies without a last will ( intestate succession ). All personal property without a beneficiary designation will be subject to the probate process at the court’s direction.

But some assets will avoid the probate process under state property title, state contract, or state trust law. These assets may include:

Cost of Probate

Complex probate processes can be costly and take years to finalize, which is why many individuals retain an estate planning attorney to minimize probate proceedings. Lengthy proceedings can be frustrating for heirs who are rightful beneficiaries but must comply with the probate process. The average cost of probate varies by state; however, five to ten percent of an estate’s value in administrative costs and legal fees is typical. Some estates may lose as much as twenty percent of their value.

Other fees may include executor compensation, court fees for filings and paperwork, and a probate bond. After the probate proceedings are complete, a probate bond may be refunded. The most common reason for high probate costs occurs when beneficiaries contest the will, as ongoing litigation can be expensive. Issues relating to preparing and filing the decedent’s last federal estate tax return and any ensuing audit may also increase the cost of the probate process.

Most individuals will create an estate plan with their lawyer that allows assets to pass outside the probate process, typically through creating a revocable living trust . Depending on your situation, your estate planning attorney may recommend other types of trusts as well as ensure that named beneficiaries on accounts that pass outside of probate are up to date. Regularly reviewing your estate plan with your attorney can help minimize probate court interactions and streamline your heir’s inheritance process. If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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The Trustee’s Role in Trusts

Tue, 25 Oct 2022 21:34:00 GMT

When it comes to estate planning, no matter where you are in the process or whether you’re just starting to consider your options, you probably have questions about how your assets should be distributed. A trust can be a great tool in your estate planning tool kit. A properly created trust can give you and your family more options and privacy than a will.

Unlike a will, a trust will help keep your estate from going through an expensive, time-consuming, and public probate process. If you set up a trust, you still create a will, but it becomes a pour-over will, which moves (pours) your assets into your trust. You can choose from different types of trusts, depending on how and when you want your assets dispersed.

Types of Trusts

There are many types of trusts, but they all establish a financial arrangement between three parties: the trustor(s), the trustee(s), and the beneficiary(ies). The person creating the trust is known as the trustor, grantor, or trustmaker. Trusts can be created by more than one person. The trustor chooses one or more persons or entities to serve as the trustee. The trust is for the benefit of one or more beneficiaries, which can be people or entities, such as charities. For some trusts, the trustor, trustee, and beneficiary are the same person.

Common Types of Trusts

Benefits of Trusts

Trusts provide many benefits. One of the key benefits is transferring assets from the trustor to the trust, so those assets do not have to go through a probate court before reaching the beneficiary. This allows the beneficiary to receive the assets faster and privately. Probate proceedings can last for months, unnecessarily delaying the dispersal of assets. Since court records can be viewed by the public, assets passing through a probate court become public knowledge.

A person can establish a trust that they benefit from during their lifetime. Trusts can also be used to hold and disperse assets to beneficiaries who are minors, who are disabled, or who are otherwise unable to manage the assets. Some trusts are used to remove assets or excess income from a person who is planning to apply for Medicaid benefits if those assets or excess income would prevent them from qualifying for Medicaid coverage. Trusts created for this purpose are usually established at least five years before the trustor plans to apply for Medicaid.

Since estate taxes and gift taxes can eat into the number of assets a beneficiary receives, trusts provide a way to avoid or lessen these taxes. Trusts can protect assets from creditors and family members who may have a different view of how your assets should be dispersed. You may have additional reasons to create a trust for your assets.

The Role of a Trustee

The role of a trustee can vary widely, depending on the nature of the trust, wishes of the trustor, and needs of the beneficiaries. Generally speaking, a trustee manages the trust and the assets it holds and disperses income or principal from the trust in accordance with the terms of the trust. A trustor may grant the trustee broad latitude in distributing assets to the beneficiaries or may impose strict guidelines. For example, a trustee may be allowed to make funds available for the general wellbeing and happiness of the beneficiaries or may only be able to disperse funds for educational purposes.

If the trustor has a beneficiary who has special needs and is receiving benefits from Medicaid, Medicare, or another government program, then the trustee needs to make sure they are dispersing assets without disqualifying the beneficiary from the government program. Some trusts have a special or supplemental needs provision in them, and some are wholly for the person with special needs.

In addition to dispersing the funds of a trust, the trustee also pays any taxes that are owed, records expenses and income, and oversees the physical assets owned by the trust, such as real estate. The trustee may be required to report taxes, expenses, and income to the beneficiaries on a scheduled basis. All these duties will be dictated by the language in the trust.

Choosing a Trustee

In most cases, the trustee of a trust can also be a beneficiary of the trust. One notable example of when a beneficiary cannot be the trustee of their trust is with a special needs trust. For the beneficiary of a special needs trust to qualify for government assistance, they cannot have any control over the assets of their trust or how they are managed and dispersed.

When considering who will be the trustee of your trust, choose a person you can rely on to follow the instructions you lay out in the trust. This person can be a reliable family member, friend, or an entity, such as a bank or trust company. For some trusts, such as a living trust, you can be the initial trustee and select someone else to be the trustee if you become incapacitated or when you die.

More than One Trustee

More than one person can serve as trustee at a time. This can be a good option for when beneficiaries are young. For example, a trustor can allow a young beneficiary to serve as a co-trustee of their trust along with an older trustee until a certain age when the beneficiary can serve as sole trustee.

Choosing the trustee of a trust is an important decision. When you are making this decision, consider the purpose of the trust now and in the future. Consider who will be able to best manage the trust’s assets and the beneficiaries’ needs. An experienced estate planning attorney can help you create the trust, or trusts, that will best suit your needs and select the right trustees.

This article offers a summary of aspects of estate planning law. It is not legal advice, and it does not create an attorney-client relationship. For legal advice, you should contact an estate planning or elder law attorney. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Who is an Executor?

Tue, 18 Oct 2022 21:29:00 GMT

When someone names you executor or personal representative of their estate, they believe you will be trustworthy to handle their assets and affairs after their death. Even though the decedent nominated you to be their executor, you will still need to be appointed to that role by their local probate court. The role of executor is an honorable role that comes with many responsibilities. Below is an overview of what the role entails.

Get a Death Certificate

The first thing you will want to do is get original copies of death certificates. You will need a death certificate to open and close financial accounts, file the decedent’s final tax return, and more. The number of originals you will need varies depending on the complexity of the estate. Some places will accept copies, and others will require the originals. The funeral home should be able to provide the death certificates.

Find the Will

You will need to find the decedent’s original will as well as any other estate planning documents. Read the documents so that you understand what you need to do. If you need help interpreting the documents, you should consult an attorney who is experienced in estate administration and probate. You will need to file the will with the local probate court and petition the court to appoint you as the executor of the estate.

Gather and Inventory Assets

After you have been appointed as the executor by the court, you will use the documents the court gives you to create an Employer Identification Number (EIN) for the estate. You will use this number to open a bank account, so the estate can receive funds and pay bills. Other actions you may need to take include:

This is just a partial list of what the role of executor entails. Each estate is different; therefore, each probate process is unique.

Pay Debts and File Taxes

As the executor, you will need to pay all the debts the estate owes. You may have to reject false claims against the estate and defend the estate in court, if necessary. You will also need to file a final tax return for the decedent and pay any taxes that are owed by the decedent and the estate.

Distribute Assets

After the estate’s debts and taxes have been paid, you can distribute the remaining assets according to the instructions in the decedent’s will or trust. The decedent may have made specific bequests in their will or trust expressing that certain assets to be given to certain family members, friends, or charities.

Close the Probate Case

Throughout the probate process, you should document everything you do in your role as executor. After you have fulfilled your obligations as executor, you will petition the probate court to close out the probate process.

The probate process can be long and tedious, but resources are available, such as The American Bar Association’s Guide to Wills and Estates , that you can use to help guide you. However, you may want to hire an attorney experienced in estate administration and probate to help you with the process or handle everything for you.

If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Fixed Income Tips

Tue, 11 Oct 2022 21:25:00 GMT

You may face additional costs to meet your special needs if you live on a fixed income despite being constrained by your medical condition. And your expenses are always higher than most, from food to medical care and other costs due to living with a disability. But elder law attorneys know that people living with disabilities (or their financial advocates) must learn to effectively manage money wisely to live a life without constant worry.

What is a Fixed Income?

Living on a fixed disability income means your money comes from sources such as the government, work pensions, or other fixed income products such as corporate, treasury, or municipal bonds. The amount of money coming in will not vary monthly except for small incremental government cost of living increases ( COLA ) for programs such as Social Security benefits.

There is something positive to be said about living on a reliable source of monthly income; however, it requires some budgeting skills, especially with rising inflation. Disability income typically includes SSI and SSDI Social Security benefits. Many Americans receive these benefits concurrently, and if they are your primary source of income, you will have to be careful about how you spend money on housing, food, medical costs, and other expenses.

Preparing a Budget

Monthly planning is the most effective tool for managing monthly costs. If you are unsure how to begin a disability budget and understand its financial impacts, visit the Council for Disability Awareness ( CDA ) website to get information on how to proceed using the tracking tool they provide. The tool provides tips on how to stick to a budget.

Tip One

The first tip is the most basic and intuitive. Start saving money today. Accruing a safety net of cash on hand for an emergency that requires immediate access to funds can be a lifesaver. If you never have to use it, that’s great. Determine a comfortable monthly amount to start putting away.

If you can’t imagine how you might save, think of strategies like quitting a costly habit, buying fewer snacks, lowering your thermostat, and cooking your meals instead of eating out. These are cost-cutting measures that people use regardless of the size of their budget. You can put your monthly savings into a bank account or a safe on your property, permitting immediate access if required. The rule of thumb is to pay your savings account before other expenses. Eventually, it becomes an automatic money-saving habit. A few dollars grows to a few hundred and a few thousand in months or years.

Tip Two

Find discounts wherever they exist and take full advantage of them. Organizations and stores provide tremendous discounts for seniors and individuals with disabilities. AARP online is an excellent resource for learning about savings and available discounts. From cutting costs to meal planning or vacationing, AARP has an array of money-saving options for you to explore.

Tip Three

Look into PASS Accounts , an SSI provision to help individuals with disabilities return to work. Although a recipient benefitting from SSI has a $2,000 asset limit, you can save money exceeding this asset limit and remain SSI eligible by opening a PASS account. This account type allows you to set money or resources aside for a specific work goal. The permissible deposits include unexpected gifts of cash from birthdays or tax refunds.

Before returning to work, you may want to consider re-entering the workforce under the rules that will allow you to continue receiving your government benefits. The Social Security Administration’s Ticket to Work offerings can help you get started on the pathway back to work.

Access vocational training webinars, tutorials, and job placement opportunities available to anyone receiving Social Security disability benefits. Ask for counseling regarding benefits to explain how working will affect them. Speaking to a disability benefits lawyer is also advisable to ensure that any new employment and additional income will not jeopardize your existing benefits, home, or other assets.

Tip Four

Search the internet for free services that can help you maximize your savings potential while living on a fixed disability income, including:

Family members, caregivers, or your disability attorney can also help you find local community resources that help people with disabilities on fixed incomes. If you are feeling overwhelmed but know that you must find additional help, reach out to those who can directly provide aid or point you in the right direction. Applying for supplemental income programs or navigating available services to augment your fixed income can be daunting; however, your efforts can greatly increase your resources to improve your quality of life and reduce financial and emotional stress. If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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Life Care Planning Equals Estate Planning plus Elder Law

Tue, 04 Oct 2022 21:23:00 GMT

Elder law and estate planning are often used interchangeably, but there are significant differences between them. While some overlap exists between the two, learning and implementing strategies from both law practice types is crucial to prepare for successful aging and preserve a family legacy.

Estate planning lets families:

Younger people tend to focus on asset protection in their earlier years. They are building their legacy.

Elder law primarily deals with later stages in life and an aging individual’s needs while they are still alive, like:

Seniors worry about protecting their legacy from medical costs, fraud, or abuse. They want to keep the family home for a spouse or the next generation.

What is Estate Planning?

Estate planning is for adults of all ages. An estate plan determines what will happen to assets upon death. An estate planning attorney can use wills and trusts to ensure your wishes are followed. If there are minor children, a will identifies a guardian to guide and protect them through life until they become adults. Naming a guardian for minors is a crucial aspect of a will.

Estate planning lawyers can structure assets and property to help an estate avoid probate. Various revocable and irrevocable trusts can save money on estate taxes, leaving more to beneficiaries. The probate process is slow, can be very costly, and is a public process, so it makes sense to keep as much of your estate out of probate as possible.

Several assets can pass to heirs without being addressed in a will or a trust through beneficiary designations. Insurance plans, IRAs, and 401(k)s are all examples of beneficiary designation account types. Reviewing your designations is crucial upon major life changes, particularly death or divorce. Update your beneficiaries. If they have changed or are deceased, a court will decide the fate of your funds.

If you have a small business, estate planning is also relevant to the business’s future success. A succession plan helps a future business owner or family member to run the business upon your retirement, incapacitation, or death. An estate planning attorney can help structure inheritance using life insurance policies to balance inheritable assets if one adult child is particularly interested in running the business and others are not.

What is Elder Law?

Focused on later stages of life, elder law anticipates future medical needs, including long-term care, to ensure a senior can live a long, healthy, financially secure life. The goal is to develop a plan to pay for future care that meets their comfort level while preserving as many assets as possible. An elder law attorney knows how to help you qualify for Medicaid or other government benefits while keeping a portion of your assets. In addition, they may support you through Medicaid hearings and appeals.

Elder law attorneys can help protect individuals from elder exploitation or abuse as they become older and caring for themselves becomes difficult. Designating a durable power of attorney ( DPOA ) for property and financial affairs and another for health and well-being permits representatives to oversee and protect seniors when they are no longer able. DPOAs are documents used in estate planning. Without a power of attorney, elder law and estate planning can assist with guardianship and conservatorship.

What is Life Care Planning?

As an estate grows in value and minor children become adults, it is important to revisit and amend your estate planning documents. Review them regularly as your life evolves, particularly after marriages, births, divorces, deaths, and substantial changes in finances. You may find yourself straddling the needs of children and aging parents. Estate planning shifts as estate planning attorneys consult with you on elder law matters.

Life care planning protects your assets, health, and legacy at every stage of life and addresses common concerns to avoid potential problems. Proactive planning is the key to living your best life, from raising a family to fears of declining health. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Nursing Home Eligibility Under Medicaid

Tue, 27 Sep 2022 21:21:00 GMT

Those who believe Medicaid planning only involves meeting strict income and asset limits may be surprised. You will also need to prove you need the level of care typically found in nursing homes. These health eligibility rules are valid if you apply for nursing home coverage or a Medicaid waiver program for coverage in your home. Each state has a level of care requirement and its own criteria to determine if you meet the mandated level of care. It can get complicated because eligibility criteria are not always clear.

Determining the level of care necessity usually includes:

The state evaluates the assessment of a Medicaid applicant and, in many cases, will require a doctor’s diagnosis. The assessment generally requires the applicant to answer a series of questions about their abilities to perform activities of daily living and any behavioral issues or cognitive problems. There are further questions regarding the applicant’s family and their ability to provide support.

Understanding Medical Services Covered by Medicare

Medicare still covers the medical services you may need beyond nursing care along with institutional Medicaid. If you need to see a specialist or go to a doctor’s office, Medicare pays first, and Medicaid will cover your remaining costs like copayments, coinsurances, and deductibles. When applying for institutional Medicaid, consider the following:

Nursing home level of care, also known as nursing facility level of care ( NFLOC ), Is not an easily definable term as there is no formal federal definition. Each state has the task of defining the term, and rules are not always consistent from one state to the other. Generally, there are four areas of concern, though not every state considers all four; physical functional ability, medical needs/health issues, cognitive impairment, and behavioral problems.

For those families with a loved one who requires more care than they can provide at home but do not require a high enough level of care to qualify for nursing home admittance, there is an in-between care type typically provided in assisted living. However, Medicaid coverage of this type of assisted living is very limited in numbers.

Nursing homes are experiencing very limited capacity, and waitlists can be years. Medicaid is adapting to provide this coverage type in-home to those applicants who may meet NFLOC Medicaid eligibility requirements but not pose a danger to themselves or others in a home environment. Perhaps using this as a springboard as a potential nursing home residence is waitlisted for full-time care.

Before applying to become eligible for Medicaid nursing home coverage, there is much to consider. Applications that are insufficient or incorrectly filed can create delays, and with limited space available, it can be several years on a waiting list before admittance can take place.

The need is more significant than ever before for long-term care in a nursing home. Meeting your state’s eligibility requirements can be a long and complex series of providing documents, answering questionnaires, having assessments and reviews, and filling out and filing forms. The scope of the project can be overwhelming. To get to your best outcome, don’t wait. Proactive planning with an elder law attorney will help you understand and address all criteria you need to act on to succeed. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Health Care at the End of Life

Tue, 20 Sep 2022 21:19:00 GMT

Even though having open and honest conversations with your family about your mortality is a sobering experience, it is prudent to do so. No one relishes the thought of their demise, and yet with forethought, you can ensure that your estate plan and your healthcare arrangements best reflect your wishes. It is essential to prioritize these discussions with your loved ones and follow up on implementation with your elder law attorney. Careful consideration of how and whom you prefer to handle your medical decisions and proper legal documentation that permits these actions will provide you some peace of mind. If you are unsure of the scope of these discussions, meet first with your attorney, who can provide you with a framework of necessary topics.

Having a Conversation with Family About End-of-Life Care

Preparing to have these conversations will likely lead to thoughtful outcomes that will be extremely beneficial for you and your family. Broach the topic openly with your family and get a sense of how well they handle the delicate topic. Request a specific time a couple of weeks out to provide family members the time for reflection in their own space to process what the meeting will entail. You may have been thinking through this topic far more than your children. It is best to discuss in person, but some family members may live far away, and even if they are local, in the era of COVID-19, your meeting may need to be virtual.

If you can meet in person, opt for a quiet and comfortable space, and whether virtual or not, leave plenty of time for everyone to express themselves fully. As the focal point of the meeting, you should prepare your thoughts and wishes to express them concisely and with some structure to ensure your cover all necessary topics. It is good to speak your thoughts out loud to yourself, even in front of a mirror. Saying words aloud in preparation will help you stay pulled together and address your tenor and tone. Keeping yourself grounded emotionally during this talk is vital to help your family members do the same.

Be prepared for the unexpected in terms of your children’s responses. They may push back on some of your wishes. For example, if you have a medical directive requesting a do not resuscitate ( DNR ) order, your children may have difficulty accepting your perspective. Adult children often have trouble imagining a world without you as they rely on you, and they may fear being the “next” in line to face their mortality. Ultimately your medical care rests in your decision-making hands, but exhibit patience and hear out the requests and wishes of your loved ones. You may have to respectfully disagree with their point of view by re-emphasizing your needs and why they are essential to you.

The Importance of Addressing Your Power of Attorney

Be clear about your power of attorney and power of medical attorney choices in your meeting. You may have already selected these representatives but need to explain your thought process, or you may need to identify who among your loved ones is most capable in these positions. Beyond identifying these willing representatives, you must follow through with the legal documents that will permit them to perform their functions when the time comes.

This conversation is also an opportunity for you to smooth any ruffled feathers about who you choose as legal representatives and shape a future of goodwill among your family members. In concluding the meeting, provide a recap of decisions made so that everyone is clear. Loved ones in emotionally charged discussions may hear things differently, so everyone must understand each other. Always end on a positive note.

After your meeting concludes, it is time to schedule with your estate planning attorney to formalize your plans. Their expertise can guide you, ensuring your wishes are honored. Once all necessary legal documents are in place, your task is complete. If you have a change of heart about a particular decision, you can amend your documents in the future. A routine review of your estate and medical planning is prudent, especially if there are changes within the family system. Proactive planning about your end-of-life care can free you to focus on living today without worrying about tomorrow.

We hope you found this article helpful. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Gifts and Penalties Under Medicaid

Tue, 13 Sep 2022 21:15:00 GMT

Most seniors believe that spending down their assets is the only way to qualify for Medicaid, which helps low-income seniors with limited income and assets afford health care and long-term care. While this is true in some cases, proactive Medicaid planning can protect a substantial portion of your assets if done correctly. The program’s eligibility rules are complicated, as is the application process, so it is best to navigate the process with a specialized Medicaid planning elder law attorney well before you need to tap the benefits.

The general rule is that anyone gifting assets within five years of applying for Medicaid is likely subject to a penalty, making them ineligible for this funded care. This review of past financial history is called the look-back period. The imposition of this penalty is to stop those who transfer their assets without receiving fair value in return. In essence, you cannot gift most of your assets to your children on Wednesday to qualify for Medicaid long-term care on Thursday.

A Medicaid penalty period addresses those individuals who would otherwise be Medicaid eligible but do not pass the five-year look-back rule. Medicaid arrives at the penalty period by dividing the transferred amount by the average private pay cost of a nursing home in your state. The penalty period begins when the person making the transfer either moves into a nursing home, spends down to asset limits for Medicaid eligibility, applies for Medicaid coverage, or has coverage approval excepting for the transfer. There is no limit to the length of a penalty period.

Congress created a significant loophole regarding the transfer penalty for those individuals planning for future Medicaid to help fund their long-term care. Medicaid may revoke the penalty if the transferred asset is returned in full, or the penalty will receive a reduction if the transferred asset is partially returned. This situation is dependent on your resident state as some do not permit partial returns, only giving credit for the total return of assets transferred.

Although it is preferable to address your long-term care planning far in advance of your care requirement, there are still some strategies to employ that avoid spending all of your assets. If you are in a state that permits partial asset return, your elder law attorney can leverage this rule to preserve some of your assets using “half a loaf” strategies. If a Medicaid applicant has excess assets and must spend down to reach the typical $2,000 asset limit, they may be able to preserve some assets as follows:

Gift and cure

If you live in a state that participates in Medicaid partial refunds, this strategy sees the nursing home resident transfer all of their funds to their children or other family members and applies for Medicaid and receives a long period of ineligibility. After the application submission, the children, or whomever, return half of the assets transferred in effect, “curing” half of the ineligibility period. This strategy provides the nursing home resident with the needed funding for care until the remaining penalty period expires, thus receiving Medicaid funding.

Promissory note

This method has a nursing home resident give half of their assets to their children or other family members, lending them the other half using a promissory note that meets Medicaid law requirements. The nursing home resident will then use the monthly loan repayments and any other available income to pay for nursing home costs during the penalty period.

Annuity

Like the promissory note, a nursing home resident gives half of their assets to their children or other family members and uses the remaining money to purchase an annuity. The majority of states do not consider an annuity purchase as a transfer that makes the buyer ineligible for Medicaid.

Remember, not all gifts will trigger Medicaid penalties. For instance, there is never a penalty for gifts given between spouses. This exemption exists because Medicaid combines both spouses’ assets when counting the assets of a spouse who applies for Medicaid long-term care. The law states there is no reason to impose a penalty on such a transfer as a gift between spouses.

There is a child caregiver exemption where an adult child enables you to delay moving into a nursing home, thus allowing the transfer of your home into their name for less than fair market value (essentially free) without resulting in a penalty. This exemption is permissible even when a senior applies for Medicaid within the five-year look-back period.

Another exception to the general rules of eligibility is the creation and funding of a trust for a child who is disabled under the rules of the Social Security Administration. No matter how large the gift, no penalty will ever be attached.

Always seek professional legal advice when creating your long-term care strategy using Medicaid. Applications are rarely successful as a do-it-yourself project, and mistakes can have devastating long-term consequences on a family and their finances. Begin early, well before you anticipate needing long-term care. Become well-informed as best you can and contact a Medicaid specialist elder law attorney to guide you through the application process. Proactive planning and creative but legal strategies can help protect your assets and still provide Medicaid funding for your long-term care. We hope you found this article helpful. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Wills: What They Can and Cannot Do

Tue, 06 Sep 2022 21:10:00 GMT

If you die without a will (intestate), the state will distribute your assets and property based on state law and might not align with your wishes. A will is a legally binding directive stating who will receive your property upon your death. Having a will allows you to appoint a legal representative or executor to carry out your bequests and name a guardian for your children. There is no doubting the importance of having a will, however there are some limitations you should be aware of.

Although a will can be the primary mechanism to transfer property on death, it does not cover all property situations. Some classes of property you are unable to distribute through a will are:

A will does not allow you to avoid probate

By necessity, a will must go through the probate process in order to allow beneficiaries to inherit property. It can take months to get through probate, and it involves expenses like an attorney, executor, and court fees. Also, your will and everything associated with it (property you own, who your beneficiaries are, etc.) becomes part of the public record that anyone can access.

Keep funeral instructions outside of your will

The reality is your funeral may have already taken place before someone finds and reads your will, which can take days, even weeks. If your funeral or memorial service is important to you, the best way to help your family is to pre-plan, making arrangements with a funeral home. You can leave written instructions with the family as to your plans.

Your pets cannot inherit through your will

An animal is legally unable to inherit money or property from you. If you want your pets to be cared for after you die, leave money to a person willing to take care of your animals. The person you select can inherit your pets since a pet is considered property. You can also set up a pet trust or a pet protection agreement, either of which provides for your pet’s care.

Provisions for a child on government benefits are best in a trust

It is best to create a special needs trust to provide for a child with special needs or a child who is receiving government benefits. The trust can hold money for your child’s care without affecting those benefits.

There are ways to circumvent the limitations of a will by creating trusts, setting up pay-on-death accounts, and ensuring a beneficiary is named on all accounts that permit them. Your will is an important component of a comprehensive estate plan, but it can’t do everything. We hope you found this article helpful. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Your Estate Plan Should Be Revised Upon Divorce

Tue, 30 Aug 2022 21:07:00 GMT

It is rare that assets are divided amicably in divorce (especially if there are children involved). While your estate plan may be the furthest thing from your mind during a divorce, without updating your documents, your ex-spouse may receive assets in ways you neither want nor expect upon your death. If you are going through a divorce or are already divorced without revising your estate plan, reviewing and making changes that reflect your current wishes is essential.

Your will is an excellent place to begin. Your estate planning attorney can update your will with a codicil that alters, changes, or subtracts the provisions. However, the many changes resulting from your divorce probably make writing a new will your easiest option. Your more recent will supersedes those written earlier, and your lawyer will include language stating all prior wills are revoked.

Updating Your Will

Your will names an executor (personal representative in some states) who pays the decedent’s final debts and taxes, conducts a discovery of assets to distribute to heirs after probate, and ensures any named guardian of minor children assumes their role. Your lawyer will construct your will’s guardianship of minors to complement the existing divorce decree’s child care arrangement. Your assets in a previous will may no longer be part of your estate and should be removed from the document, adding newly acquired assets where appropriate.

In most states, when you get a divorce after you make your will, any gifts to your former spouse are automatically revoked without affecting the remainder of your will. However, relying on state law to protect your ex-spouse from your inheritable assets is unreasonable. Also, if you do not want your former spouse to inherit your property, you probably don’t want them to be your will’s executor. It is wise to appoint a new executor and an alternate.

Beneficiary Designations

Many assets may pass outside your will through beneficiary designations. These account types include life insurance policies, retirement accounts like 401(k)s and IRAs, POD (payable on death) bank accounts, and TOD (transfer on death) brokerage accounts. Changing the beneficiary is usually fairly simple, but each account may have a different process, so do your research. You may also speak to a benefits consultant with the company holding the account to ensure you remove your ex-spouse and name a new beneficiary.

Certain qualified plans like pensions, 401(k)s, and employer-provided life insurance policies are governed by ERISA (The Employee Retirement Income Security Act). This federal law will override state law deeming a plan administrator must turn funds over to the plan’s documented named beneficiary. If your former spouse is still on the paperwork, they will inherit the account.

Trustees

If you are the grantor of a trust, review the trustee, and if it is your ex-spouse, you will likely want to remove them. There may be exceptions to this trustee removal. For example, some spouses run a business together and may continue to use the trust to manage business assets. A special needs trust for a child may be another instance where an ex-spouse may remain a trustee because of the shared child. Your estate planning attorney can advise you on when to keep an ex-spouse as a trustee.

Real Estate Property

Whether the family home, a vacation beach house, or a lake cabin, real estate property will likely shift ownership in the divorce. Your estate plan will have to remove those properties that you no longer own and change the designations of the remaining properties.

Advance Directive or Living Will

Appoint a new healthcare representative in your living will If your ex-spouse is your current designation. Your estate planning attorney must either revoke your prior living will or make formal changes reflecting your state’s regulations for it to be a legally binding document.

Powers of attorney

If your ex-spouse is your designated durable financial or medical power of attorney, you will want to appoint a new individual(s). A financial power of attorney can designate a trusted family member or friend who you know to be competent and will best represent your interests. If you are ambivalent or unsure about who to turn to, you can select your lawyer or a licensed financial institution that routinely fills these roles.

The person you choose for your durable medical power of attorney must be assertive and strong-willed to advocate for your healthcare wishes when you are no longer able. This individual should live near you, or at least in the same state, as proximity can become critical. You can name the same person as financial and medical power of attorney, but this can represent a lot of time and effort for one individual. In some states, it is not permissible. You may name a family member, friend, or caretaker as your agent.

Depending on your estate plan type, you can make some changes to your will before your divorce is final or immediately upon the divorce filing. Explain to your attorney how you envision the new estate plan. Details of asset and property transfers gained or lost in the divorce can be added. Beneficiaries, executors, guardianship of minor children, property, and powers of attorney all require review and are likely to change. Your estate planning attorney can readily make the changes you desire so that your legacy continues to reflect your wishes accurately. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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What is the Probate Process?

Tue, 23 Aug 2022 21:03:00 GMT

A loss of a close relative is one of life’s most emotionally draining experiences, along with the stress of dealing with the deceased’s estate. This part can be especially overwhelming. The process of proving to a probate court that the deceased’s last will and testament is valid and then administering their estate can be confusing and intimidating. This process is called the probate process, or, simply, probate. There are four basic steps in the probate process.

Step One: Filing with the Court

The first thing to do after a loved one passes away is to find out if they made and signed a last will and testament, usually referred to as a will. If they had a will, the person named as the personal representative, also known as an executor, needs to file a petition with the probate court in the county where the deceased lived. The petition asks the court to formally appoint the executor to act on behalf of the deceased person’s estate.

All the deceased’s heirs and beneficiaries must be notified that the petition has been filed and be allowed to object to the petition or challenge the will. Some states require the petition to be published in a local newspaper of record to also notify potential creditors.

If the deceased person left no will, a petition must be filed in the appropriate probate court by the person seeking to be appointed the estate’s executor. Once the court has appointed an executor, all the legal heirs must be notified of the appointment, and the administration of the estate.

Step Two: Identifying Assets and Debts

After the probate court has appointed the executor, they must identify and disclose all the estate’s assets with a valuation. Assets can include real estate, automobiles, boats, personal property, cash, bank accounts, investments, and intellectual property. The executor has legal control over these assets. If the deceased set up a trust during their lifetime and funded it with assets, those items would be excluded from the probate process and distributed according to the trust’s instructions.

The executor must notify all known creditors of the estate proceeding and must disclose all known debts to the court. Creditors have a specific amount of time to file claims against the estate.

Step Three: Paying the Estate’s Debts

The executor is required to use the estate’s assets to pay off the estate’s debts, which can include loans, mortgages, credit cards, and utility bills. A final tax return must be filed for the deceased person, and any taxes owed must be paid from the estate’s assets.

If enough funds are not available to pay all the estate’s debts, then the executor must sell some of the assets to pay off the debts.

Step Four: Distributing the Estate’s Assets

After all the estate’s debts have been paid, the executor distributes the remaining assets according to the will. If the deceased left no will, then the executor distributes the assets according to state statutes.

Depending on how complex and involved the estate is and how much of a backlog the probate court has, the probate process can take from a few months to years to complete. When choosing the person you want to act as your executor, you will want to pick someone who has good attention to detail, is thorough, and will follow through with the process. It is a good idea to hire an experienced estate planning attorney to help you draft your will and other estate planning documents. They will have all the documents required to support your family members during probate.

This article offers a summary of aspects of estate planning law. It is not legal advice and does not create an attorney-client relationship. For legal advice, please contact us at 989-495-2555.

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Veteran’s PACT Act Passes

Tue, 16 Aug 2022 20:58:00 GMT

It is the largest expansion of health care and benefits for US veterans in more than thirty years with the SFC Heath Robinson Honoring Our Promise to Address Comprehensive Toxics (PACT) Act. The cumbersome name stems from the story of SFC Heath Robinson, who died from a rare form of lung cancer due to toxic exposures after serving as a combat medic. This bill honors his name and the memory of all those lost to toxic exposure during service. The law comprehensively addresses the risk of toxins impacting the health of veterans, their families, and caregivers.

Often, it can take years for these illnesses to manifest due to the increased health risks military servicemembers assume in locations all over the world. This time lag between exposure and disease can make it difficult to establish a direct connection between a veteran’s service and resulting illnesses and disabilities from multiple military environments. The PACT Act charter will bring about the following changes:

Presumptive Conditions

What exactly is a “presumptive condition” due to toxic exposure? A VA disability rating typically connects your military service with proof that your service is directly responsible for your condition to qualify for benefits. However, in some situations, there is now an automatic presumption that your service is responsible for your condition. Laws or regulations determine whether a condition is considered presumptive. Under these circumstances, there is no need to prove your service is responsible. You only need to meet the service requirements for the presumption.

The eras and wars in which a veteran served and their associated benefits eligibility are detailed on this US Department of Veterans Affairs PACT Act resource link . The website also outlines claim filing processes to receive these benefits. If the VA previously denied your claim but now considers your condition falls into the presumptive category, you can submit a supplemental claim for VA review under the PACT Act.

Extended Healthcare Enrollment Periods

In particular, for post-9/11 combat veterans, the PACT Act extends the time period to enroll in VA health care from five to ten years post-honorable discharge. Additionally, there is a one-year open enrollment period for those combat veterans who do not fall within this window of time. These enrollment changes increase the number of veterans able to participate in VA PACT Act benefits without demonstrating a direct service-connected disability. By establishing presumptive conditions and expanding the list of other illnesses, the VA greatly reduces the paperwork and need for medical exams to qualify for and grant access to health care and disability compensation. These changes streamline the process of receiving earned benefits when the timing of this help is everything due to a debilitating illness(es).

VA Secretary Denis McDonough encourages those veterans who think they may be eligible for these benefits to learn more about the PACT Act by visiting this VA resource link or phoning 1-800-MY-VA-411. Benefits associated with the PACT Act became effective on August 10, 2022, when the bill was signed into law.

Claiming Your VA Benefits

Like many VA benefits claims, the process can be daunting even though this law seeks to simplify its approach while increasing the pool of eligible veterans. Correctly filing out and filing forms is crucial to initial application success. Retaining the services of an attorney specializing in veterans’ benefits can help ensure you submit your claim accurately, streamlining receipt of your benefits. This law will deliver much-needed benefits to millions of veterans and their survivors. Upon reviewing the information in the VA links provided, if you are a veteran that falls within these timeframes of war and other post-9/11 combat services, please contact us at 989-495-2555.

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What Is the Right Amount of Inheritance for Each Child?

Mon, 08 Aug 2022 20:55:00 GMT

Even though it is obvious and right to divide assets equally among children in many situations, in some families, having the same inheritance for each child can be inappropriate, deplete the estate’s assets as a result of litigation, or cause other issues after your passing.

While the answers depend on your family circumstances and concerns, be aware of several known scenarios to watch out for as you make your decisions. Without a will, there are sure to be problems between family and loved ones. You may find it difficult to sort out, but creating a will is the responsible thing to do.

Equal? Or Fair and Equitable?

Your estate planning attorney will likely point out that there is a difference between leaving an equal inheritance, where each child receives precisely the same amount, and an equitable inheritance, where you determine what is fair for each child, given their circumstances. The obligation is only to yourself as it is your money and your decision. Should circumstances change, you can amend your will.

Special Needs Children

The first and most obvious inheritance issue happens if the family has a special needs child. After minor guardianship, if your adult special needs child can’t care for themselves, you will want to create a special needs trust. Depending on your financial situation, this trust can take up most of your estate to meet basic living expenses and funds for ongoing medical needs. Siblings will often understand and not be offended by receiving less money. However, it is important to let all children know the arrangements.

This third-party-funded special needs trust can also use life insurance policies to preserve a larger aggregate of the parents’ assets for the rest of the children. The special needs child must receive the necessary financial assistance for functional needs without the risk of losing existing or future government benefits. If the special needs child passes, the leftover trust monies can go to the remaining siblings as secondary beneficiaries.

Caregivers

Another situation that may inspire equitable but not equal inheritance is when one of your adult children acts as your caregiver. Often, this family caregiver is uncompensated for their efforts, works fewer hours in their job, or can’t further their career to fund their social security benefits for their retirement. This situation can have disastrous consequences for the caregiver’s future. Therefore, providing more inheritance to this child can compensate for their family support efforts.

Lifestyles and Financial Circumstances

Your adult children may experience different financial needs during your lifetime. A child who marries and provides grandchildren may need your help funding a down payment on a house for their growing family. If this is not a documented loan with the expectation of repayment, it is wise to consider reducing this child’s inheritance proportional to the financial aid provided earlier. Weddings, grad school, and other life events of your adult children may have created a substantial inequity among the siblings that you want to offset in your will. You can easily address the situation by reducing inheritable cash amounts to the child or children who have already received substantial financial help while you are alive.

Blended Families

Suppose you are a blended family comprised of biological and stepchildren. In that case, managing the expectations of non-biological children who may receive less than natural-born children is a crucial conversation. Honest communication between the parents and writing wills that complement one another brings a sense of fairness to inheritable assets. This will go a long way to avoiding a possible lawsuit. What one stepchild loses in one will, they may gain in their biological parent’s will.

Be of Sound Mind and Free from Undue Influence

If you divide your assets unequally among your children, know that you may be putting your estate plans and children at risk of litigation. Heirs can sue to contest a will, but you can mitigate the likelihood with careful estate planning. An estate planning attorney will be familiar with family dynamics if one inheritor feels slighted. Drafting your will while you are of sound mind and without undue influence from one of your children is a good start. If your other children believe or think they can prove in court that you were subject to another’s manipulative tactics while writing your will, they will likely sue. Do your estate planning earlier in life when it is clear to everyone you know what you want.

Incapacitation

Another legal challenge to your will can be for lack of testamentary capacity . This term means you were unaware or did not understand what you were doing when creating or changing your will. Lack of testamentary capacity may be due to mental illness or a physical condition. Always ensure your will is properly drafted and witnessed by an estate planning attorney to help avoid possible challenges to your will.

No-Contest Clauses

Some states permit a no-contest clause combined with at least a nominal gift that can create an incentive for family members not to challenge your will and any estate trusts. The language in the will (or trust) essentially states that any inheritor who litigates the document as written will forfeit any bequests. While this is not the best option, it may help keep your will intact. The enforceability of these clauses will vary by state, so be sure to talk about it with your lawyer.

A few tips that can help avoid challenges to your will include:

Ultimately this is your money to divide as you wish, and you have every right to do so. However, if your inheritors perceive inequality, they will likely explore legal options to remedy their inheritance. Weighing your children’s temperaments and their relationships with each other will provide insight into whether leaving unequal inheritance poses a risk to your will. Sometimes unequal inheritance may not be worth what you are trying to accomplish. Evaluate your unique family circumstances and financial situation with your estate planning attorney. Doing the work upfront can mitigate issues after you are gone, leaving your family happy and intact. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Helping Seniors Avoid Loneliness

Tue, 02 Aug 2022 20:54:00 GMT

In order to slow the spread of Coronavirus, doctors recommended social distancing and governments prohibited large gatherings of Americans. This prevented all of us from interacting with each other. This isolation held especially true for those seniors who live alone or in long-term health care facilities. Human beings are, by nature, designed for close contact and social interaction. Maintaining human connection, whether it be family or casual acquaintances, can help boost immunity, combat anxiety and stress, and can even lower health risks that are exacerbated by stress like heart attacks and hypertension.

The Association of Health Care Journalists reports that it is critical for older adults’ well-being to maintain social ties. Those seniors who experienced loneliness and social isolation are more likely to develop dementia, more likely to fall, have an increase in hospital readmissions, and an increase in mortality. Because of the COVID-19 pandemic, health care facilities and hospitals across the country had put a pause on in-person visitation. This separation was meant to protect the most vulnerable populations, such as older adults and those individuals with chronic health conditions.

To help your loved ones in a facility or living on their own during this challenging time of COVID-19 Right at Home , a leader in the in-home senior care industry, has some ideas to stay connected to those you love who may still be isolated.

Prolonged loneliness can bring about depression and even dementia. However, social distancing does not have to bring about social disconnection. Employ some of these ideas in the world of your seniors to protect them from isolation. It is crucial to your loved one’s well-being to have direction and routine, hope, and human connection.

We are also using video technology for our meetings so we can continue to help with the planning needs of our community. If you have questions about what you read or would like to discuss planning for you or a loved one, please don’t hesitate to reach out. We would be honored to help. If you would like to discuss your legal matters please contact us at 989-495-2555.

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Hazardous PFAS Exposure in the Military

Tue, 26 Jul 2022 20:50:00 GMT

Military members and their families are becoming sick after being exposed to the contaminant PFAS on US military bases. PFAS contamination is also threatening water supplies nationwide. The slow cleanup process on multiple military bases is receiving attention in the halls of the US Congress, and there is a push for greater accountability. The PFAS eventually seep into groundwater and poison local water supplies outside military bases. In 2021 the city of Dayton, Ohio, sued the Defense Department for polluting its water. In 2019 New Mexico countersued the US Air Force for contaminating its water supply after trying to make the USAF clean up PFAS contamination.

Polyfluoroalkyl Substances (PFAS)

Polyfluoroalkyl substances ( PFAS ) are a large group of human-made chemical compounds pervasive in manufacturing. PFAS are in home products, food packaging, and even our clothing. Exposure to these compounds links to health concerns, including multiple cancers, immune dysfunction, and decreased fertility. Some of the highest concentrations of PFAS in the US are in or near military bases. Speculation connects to the military’s long-time reliance on the firefighting foam AFFF , laden with PFAS. Although the military is phasing out AFFF use, the accumulated chemicals are difficult to remove from the environment, and the damage to human health is already in play.

The Threat to Military Families

Military members and their families are learning that their exposure to these active chemical compounds is thousands of times more toxic than newly released EPA acceptable exposure limits. Like the burn pits of the US military presence in the Afghan region and defoliant Agent Orange before it in Vietnam, PFAS presents a significant health threat. The US Department of Defense has an investment of over $1.5 billion dedicated to PFAS research and cleanup proposals and actions. Some estimates claim more than 98 percent of all Americans’ blood contains some form of PFAS. There is a lot of uncertainty about fixing the issue, helping those already harmed by exposure, and what branches of government are responsible for funding the cleanup and healthcare for the afflicted.

Clean Up Efforts

The Department of Defense, in conjunction with other federal agencies such as the Department of Veterans Affairs, the EPA, the CDC, and more, are heavily investing time and money to accelerate cleanup and resolve uncertainties. However, Richard G. Kidd, Deputy Assistant Secretary of Defense for Environment and Energy Resilience, states , “Based on what we know today, it will take years to define the scope of our cleanup and decades before its complete.”

Decontaminating sites, creating filtration systems to provide safe water, and providing untainted bottled water for drinking are priorities. Wells will be drilled at strategic locations to identify the nature and extent of the groundwater plume. Then the PFAS-laden water will pump through a removal filter and back into the groundwater. This technique is a pump-and-treat process employed to clean up other chemicals in the groundwater for decades. Although the process is effective, it takes a long time, particularly when standard measures are in parts per trillion. The Department of Defense is investing billions in research and development of new technologies to mitigate this lengthy timeline.

Below is a chart illustrating confirmed (purple) and suspected (orange) military sites that are contaminated according to the non-profit Environmental Working Group ( ewg.org ). Today the number of military sites is nearly 700. Non-military sites account for 2,854 locations in fifty states and two territories as of October 2021.

ewg.org

Because contamination levels on military sites tend to be higher by parts per thousand than on civilian sites, the Department of Defense and Veterans Affairs are hustling to determine their level of responsibility to handle the coming onslaught of military service member and veteran claims.

Legislation Addressing PFAS

In March of 2022, Congressman Dan Kildee (D), a co-chair of the bipartisan Congressional PFAS Task Force, introduced new legislation requiring the VA to cover health conditions that link to PFAS contamination at military bases. The bill includes healthcare services and benefits for service members and their families exposed to PFAS. The Veterans Exposed to Toxic PFAS Act ( VET PFAS Act ) will make the VA responsible for PFAS-affected veterans and their families eligible for disability payments and medical care.

Congressman Kildee’s action is the beginning of accountability and action for those service members and families in contaminated environments. Currently, the VA website only addresses PFAS-contaminated locations and studies identifying problems and potential fixes. While this is a good start, a law that funds the human conditions of illness and disability of service members and families is necessary. Your veterans attorney can update you on PFAS veteran assistance and the needed passing of the VETS PFAS Act. Your lawyer’s veteran expertise will help you get the healthcare and benefits you need as soon as they become available. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Conservatorships are Avoided with Durable Powers of Attorney

Tue, 19 Jul 2022 20:48:00 GMT

Conservatorships are legal guardianships over adults. Someone (or several people) can make decisions for the individual. The conservator is the person(s) with the power to make decisions, and the conservatee is the adult who needs help with their financial, health care, living arrangements, and daily affairs due to old age, physical or mental limitations. Some conservatorships are broader than others. For example, some conservators may only have authority over financial decisions, not medical ones.

Common reasons for conservatorship include an adult in a coma, with dementia, or developmental delays. A conservatorship is different from durable powers of attorney. A durable power of attorney is a legal document that adults can set up for themselves if they fear they will lose the capacity to make decisions at some point. They can choose who makes important decisions for them.

Conservators are put in place through court authority to manage the affairs of those who can no longer make their own decisions about health care or finances. Without a durable power of attorney reflecting your wishes, family members may petition a court to appoint a conservator to manage your well-being if you become incapacitated.

What Does Conservatorship Determine?

A “conservator of the estate” guides financial matters while a “conservator of the person” manages personal and medical decisions. In less complex circumstances, one person may be in charge of both estate and personal/medical conservatorships. Both types of conservators follow court supervision and are held accountable to that court.

This court supervision acts as a safeguard, preventing conservators from mismanaging property or taking advantage of those in a conservatorship. The conservator must periodically report the details of their actions to the court. Frequently, courts will require the conservator to seek permission before making major decisions, such as terminating life-support or requiring medications (medical and personal conservatorships) or selling real estate or other property (financial conservatorship). Additionally, a financial conservator must often post a bond as an insurance policy protecting the conservatee’s estate from mismanagement.

Avoiding a Conservatorship

Conservators must serve the conservatees’ best interests and be chosen based on the ability to be competent and trustworthy. Yet conservatorships are often expensive and can be avoided by adequately preparing durable powers of attorney before a physical or mental health crisis occurs. These legal documents provide a template for decision-making based on your wishes by the designated power of attorney(s). In the absence of these documents, the court will often appoint a conservator who is a relative that is available to serve, such as a spouse or adult child.

A conservator will act until the court issues an order ending this responsibility which usually follows:

To avoid an unwanted conservatorship, draft your durable power of attorney while you are young and have all your faculties. Although it is unpleasant to consider, you never know when your life can change drastically. Meet with an elder law attorney to discuss your concerns around potential physical or mental illness. Your chosen representatives will be those you trust to make decisions in your best interest, and you will have peace of mind knowing that future decisions will reflect your wishes. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Why SSI and SSDI Claims Receive Rejection

Tue, 12 Jul 2022 20:34:00 GMT

Before you spend time and effort on the application process for federal Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI), consider some of the major disqualifiers. Eligible individuals can benefit from both programs though they have distinct differences. The major difference is SSI eligibility qualification relies on age, disability, and limited resources and income, while SSDI eligibility determination relies on disability and work credits. In most states, SSI recipients automatically qualify for Medicaid health care coverage, which could result in additional supplementary benefits through your state’s Medicaid program. However, both programs have some common reasons that can disqualify your claim.

Typically most people think about the reasons they should receive benefits without ever considering why they may be denied. Some of the reasons are beyond your control, while other reasons are missteps you can avoid that result in denial. Things to consider include:

Your Income Earnings are Too High

In the case of SSI , the disability benefit for low-income individuals, you cannot exceed the substantial gainful activity ( SGA ) threshold. However, it is permissible to earn more money after your approval. Still, there is a limit of about $1,600 a month on all earned and unearned income for SSI. This dollar amount applies to both application for and collection of benefits. Any time your monthly income exceeds $85, your SSI payment will receive a reduction based on a complex formula. Anything over $1650 per month, and you will no longer qualify.

When you apply for SSDI (the benefits program for workers who paid into the Social Security tax base over multiple years), your claim may be denied if you work above the threshold considered substantial gainful activity. Going over this amount means you earn too much money to be considered disabled. It is permissible to earn a small amount during your application and collecting of SSDI but not over the SGA limit. This limit (for non-blind individuals) was $1310 per month in 2021, and the figure is adjusted annually. It is worth noting income from investments does not count toward the SGA; only work income determines your ability to work.

Your Disability is Not Considered Severe or Won’t Last Long Enough

Qualification for both SSI and SSDI benefits means the Social Security Administration (SSA) must believe your impairment is severe enough to continue for at least 12 months or result in your death. Blind SSI applicants are the only exception to the duration requirement.

Many claims based on bone fractures resulting from acute trauma from accidents are commonly denied since the disability is unlikely to last 12 months. Nearly all bone fractures heal in under a year. If your bone fractures are severe enough and have not healed after six months, you may resubmit your claim as the SSA will likely believe your impairment will last a year. Each case receives an individual evaluation.

If your medical condition is not trauma-related, it must still cause severe limitations of disability to qualify for SSI or SSDI. Most denied claims are due to the applicant’s impairment not being severe enough. You can learn about the disability determination for benefit claims here .

The Social Security Administration Can’t Reach You

Both the SSA and Disability Determination Services ( DDS ) agencies need to be able to communicate with you regarding your application. If they cannot reach you, schedule examinations, appointments, or communicate about critical matters, you will likely be denied benefits. Every day claimants are denied because the SSA cannot locate them. If you opt to name a representative (such as a disability lawyer) to handle your application, you may not have to contact the SSA. However, you most certainly must maintain contact with your disability attorney.

Your Refusal to Cooperate

The SSA requires medical information about your impairment, and if you refuse to release these records, your claim of disability will likely be denied. If you provide medical records, but the SSA deems them incomplete, or you lack a regular doctor for treatment, they will schedule a consultative examination ( CE ) with an SSA doctor. Refusal to accept this exam(s) and requesting a determination of eligibility be based on existing medical records may be cause for denial due to inadequate medical data or failure to comply with a CE. Your attorney also helps you gather the correct medical information according to the requirements.

Your Failure to Follow Prescribed Therapy

If you receive medical treatment, failure to adhere to the doctor’s prescribed therapy when you are able to may cause a denial of disability benefits. Some acceptable medical excuses include:

Some acceptable non-medical excuses include:

Your attorney can review the details of your situation to see if any exclusions apply and collect the necessary documentation.

Your Disability is a Result of a Drug Addiction or Alcoholism (DAA)

If a contributing factor to your disability is DAA, the SSA will deny your claim for benefits. The DDS medical consultant will determine whether you would still be disabled if you ceased using drugs or alcohol. You can read more about DAA determining factors here .

You have a Criminal Conviction

Certain conditions relating to criminal conviction or imprisonment will prevent approval of SSDI.

If these conditions apply to your situation, it is still worth the effort to apply for SSDI benefits. Although you will not receive cash benefits, you may still be granted a benefit-free disability period that freezes your earnings record, preventing the decrease of eventual disability, retirement, or dependents benefits. Talk to a disability attorney if your claim is complicated by these circumstances.

The above conditions do not prevent your receiving SSI disability benefits, although you will be unable to collect them while incarcerated .

You Commit Fraud

Always apply for disability benefits honestly. If you receive them by dishonest means, the SSA may terminate your benefits and choose to prosecute you for fraud. Benefits obtained through fraudulent methods by your representative or someone working for the SSA also may cause the termination of your benefits.

These common reasons stop you from legally obtaining SSI and SSDI benefits. Before you become too involved in applying, be certain you meet the minimum standards for approval. A disability lawyer can help you sort out any issues, avoid missteps, and properly present your case for disability approval. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Your Estate Plan Should Include These Things

Tue, 05 Jul 2022 20:55:00 GMT

What is an estate plan?

According to Meriam Webster, the legal definition of estate planning is “the arranging for the disposition and management of one’s estate at death through the use of wills, trusts, insurance policies, and other devices.”

All adults should plan their estates, but some procrastinate when it comes to estate planning because they feel uncomfortable thinking about their death. Other people believe that estate planning is only for people who are wealthy. However, this is not true. Wealth status and uncomfortable feelings aside, an estate plan is essential for senior adults and their families.

What is included under an estate plan?

The estate is all property owned both individually and jointly if married. The property includes but is not limited to bank accounts, real estate, jewelry, vehicles, family heirlooms, other items of value, and what is owed. The estate plan serves to carry out a person’s wishes regarding the distribution of the estate itself, as well as end-of-life decisions and medical care.

There are five essential components that should be included in an estate plan.

Will

A will is a legal document that manages an individual’s estate once they are deceased. It manages the distribution of assets, names beneficiaries, and appoints guardianship for any dependents or minor children. The will provides for an executor of the estate that will be responsible for the estate management, paying debts, and distributing property as specified. In addition to estate management and guardianship, a senior adult can include specific instructions regarding their funeral or burial service.

Living Will

It’s important to note that a living will differs from a will. A living will is a legal document that outlines a person’s wishes for end-of-life medical care. In the event that an individual cannot communicate or make informed decisions, a living will specifies what medical care, treatments, life-sustaining measures, or organ donation preferences one would or would not want if in a vegetative state or terminal condition. A living will is important for both the individual and the loved ones involved. For the individual, it protects their autonomous wishes. For loved ones, it eliminates the stress that comes with making such important decisions on behalf of someone else.

Health Care Power of Attorney

A power of attorney may also be referred to as a health care proxy. It is a legal document that designates a trusted individual to make medical decisions on behalf of the elder if they are unable to do so.

A power of attorney is utilized if an individual can no longer make informed decisions for themselves, regardless of whether or not they are at the end of life. The individual appointed as power of attorney can make decisions regarding medications, procedures, diagnostic exams, surgical interventions, long-term care management, and end-of-life care matters.

Financial Power of Attorney

The financial power of attorney authorizes someone to act in the place of the senior adult for matters relating to finances. The authorized individual will take over all financial matters if the senior adult cannot handle their own affairs. Financial matters may include but are not limited to paying bills, handling taxes, real estate affairs, and decisions pertaining to investments.

Trust

A trust is a type of relationship where specific property is held by a third party, or trustee, for the benefit of another party, the beneficiary. The trustee holds that property for the beneficiary. The trust-maker still retains legal ownership and control when living. At the time of death, the trustee will distribute the property to the beneficiary.

Setting up a trust can be beneficial for distributing specific assets or pieces of property. With a trust, the distribution of property can be done without the court. It also allows for privacy, whereas a will does not. With a will, the deceased person’s assets and terms of their will are made public. Depending on the specific asset or property, privacy may be preferred.

What now?

An estate plan is necessary for anyone who wants a say regarding their end-of-life care and asset management after death. Having an estate plan in place protects an individual’s wishes and provides peace of mind to all involved.

Consulting and planning with an elder law attorney will help ensure all options are explored and informed decisions are made. Working with an elder law attorney provides guidance and explanations as you or a loved one navigates this process.

If you have questions or would like to discuss your legal matters, please contact us at 989-495-2555.

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How Can an Elder Law Attorney Help You?

Tue, 28 Jun 2022 20:07:00 GMT

An elder law attorney advocates for and creates legal plans for older and disabled individuals in order to help them live a better life. Elder law may include planning for retirement, Social Security, Medicare and Medicaid, long-term care planning, estate planning, guardianships, and more. This specialty of the legal profession is crucial for the well-being of the ever-increasing 65 and older American population.

According to the latest estimates from the U.S. Census Bureau , more than 54 million senior citizens live in the U.S., accounting for some 16.5 percent of the total population. This estimate is expected to grow to roughly 98 million American seniors by 2060. Attorneys who practice elder law will continue to handle the sensitive emotional, physical, and financial planning needs of the aging senior population. Estate planning is not a “set it and forget it” process as new elder law issues regarding family needs and state regulations evolve. Periodic reviews of existing documents will keep your planning up to date in an ever-changing world.

Estate Planning for Seniors

No matter the size of your estate, it can be difficult and emotional to create a comprehensive estate strategy without an elder law attorney’s legal guidance and expertise. Putting your affairs in order is a sobering task and requires more than creating a will.

Estate Planning Documents

You may require trusts for life insurance policies or other assets. You may opt to write an advance health care directive (living will, advance directive, personal directive, medical directive, or advance decision, depending on your state) to specify your medical preferences if you become incapacitated. Naming a durable medical power of attorney may also be appropriate for your situation.

If you have minor children or someone with special needs, you can make provisions for and identify a guardian to care for them. Estate planning can also include naming a durable power of attorney for the financial management of your assets and personal daily financial needs if it becomes a requirement for you.

Your estate plan may include retirement housing preferences to meet changes in living needs from independent living to assisted or long-term care and how to cover those costs. An elder law attorney can also help you navigate decision-making concerning probate and the tax implications of managing and settling your estate, including gift, income, and estate tax matters.

Social Security Benefits

Qualifying and applying for Social Security benefits can begin at 61 years and nine months of age. The current full retirement age to receive benefits is 67. If you receive disability benefits before 67 or become disabled when you reach full retirement age, your benefit structure can be complex to assess. An elder law attorney can ensure you receive the maximum benefits based on your condition.

Medicare Coverage

Medicare is a federal health insurance program available to Americans 65 and older; however, its structure can be confusing and complicated, especially during your initial enrollment. Medicare Part A covers hospitals, skilled nursing facilities, or hospice care, along with some home health care. Medicare Part B covers certain services by doctors, medical supplies, and preventative and outpatient care. Medicare Part C (Medicare Advantage Plans) are insurance plans for purchase through private companies that maintain contracts with Medicare. It covers all your Medicare Part A and B benefits. Medicare Part D specifically covers prescription medications. An elder law attorney who understands the interactions of these programs (federal and private) can advise you on the best and most cost-effective solutions for your situation.

Medicaid Benefits

This federal program provides healthcare benefits to low-income adults, pregnant women, elderly adults, children, and individuals with disabilities. Medicaid also covers custodial care, such as long-term care. Currently, more than four million American senior citizens receive Medicaid coverage. Your finances must be below specific asset and income thresholds to be eligible. An elder law attorney can help you qualify for Medicaid without spending down all of your assets so that you can provide for a spouse and protect a significant portion of your family legacy.

Long-Term Care Insurance

It is no surprise that American seniors want to live independently in their homes for as long as possible. Long-term care is expensive. However, most seniors will require some long-term care during their lifetime, whether in their home or in a nursing facility. Long-term care insurance premiums are based on age, health, and preexisting conditions. If you can afford this option, the earlier you purchase a policy, the better. However, many seniors rely on an elder law attorney to properly plan for Medicaid qualification to ensure the best financial arrangement for long-term care while protecting as much of their assets as possible.

There are other ways that an elder law attorney can advocate for seniors, including protection from employment discrimination, elder fraud or abuse, grandparents’ visitation rights, and more. When meeting with a prospective elder law attorney, be prepared with questions you find appropriate to your circumstances. Questions may include cost, how long they have been practicing elder law, and whether they have a particular area of emphasis, like special needs planning, veterans’ issues, or long-term care planning. You and your elder law attorney can create a comprehensive plan to control your level of comfort as you age. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Avoid These Estate Planning Mistakes

Tue, 21 Jun 2022 20:06:00 GMT

A lot of Americans perceive estate planning as a chore they can do once and then file until they die. However, without realizing the potential consequences, many people will change beneficiaries on their accounts or make gifts during their lifetime that could have enormous unintended consequences on their wills and trusts. Review your estate plan regularly to help to prevent these common mistakes.

Gifting money during your lifetime without changing your will

It is a common practice for people to include cash gifts in their will. Whether money for a favorite nephew or niece, childhood friend or household worker, there can be significant sums of cash for distribution to inheritors listed in your will. Often, family members learn these gifts were already satisfied during your lifetime because they hear the story about the joy it brings to the recipient.

Without modifying your will after gifting cash during your lifetime, the named individual will still get the gift when the will enters probate. Smaller gift amounts may not create issues in an estate but don’t match your intentions. More considerable sums of money can create situations that financially break an estate plan. A court will not know that a gift was satisfied during your lifetime either, and there is no one left to speak to the intention of the will, resulting in a second gifting of cash.

The cash gift is paid again if the inheritor chooses not to be forthcoming. While many in the family will view a lifetime gift as an advance on an inheritance, if the recipient does not agree, you may have to litigate, which can be costly. If you give lifetime gifts of cash and do not intend to give a secondary gift upon your death, change your will after the gift.

Too few assets to fund a trust

If your trust is years old and its overall assets have decreased in value, reviewing the gift provisions outlined in your trust is crucial. You may not have enough assets to pay for all of the gifts. It is not unusual that in flush financial times, people create grand estate plans leaving cash to family and friends and creating trusts for others’ benefit. These good intentions can fall far short of reality in leaner times, leaving some people to receive less than hoped or nothing at all.

In a trust, cash gifts pay out first. For example, if you leave $1,000,000 to your sibling and the rest in trust for your children, but at the time of death, your trust is only worth $1,150,000, the trust will then only contain $150,000 for your children after the payout. This is probably not your intention. Another possibility is your trust provisions don’t get funded because there is no cash to cover them.

Sadly, it will be the lawyer or trustee’s responsibility to advise these recipients of what they were supposed to receive from the trust, but unfortunately, they will not. Regular review of your trust and its goals can avoid this situation. Crafting a trust with realistic goals or making amendments to those goals during less abundant times will keep the trust’s intentions valid and achievable.

Thinking all assets pass through your will

Some people leave a lot of money that they believe satisfies all the gifts listed in their will. They total all their assets, which seems large enough to address all beneficiaries. However, all assets will not pass under the will, which is the difference between probate and non-probate assets .

Probate assets will pass through the decedent’s name into their estate and be distributed according to the will. In contrast, non-probate assets pass outside the will, usually by joint ownership or beneficiary designation. Knowing the difference between the asset classes provides the true value in the estate and receives distribution according to your will. Also, be clear your estate will need to deduct any outstanding debts, expenses, and taxes, which will reduce the probate asset number again.

Joint ownership additions

It is very easy to add an individual as a joint owner with rights of survivorship of an asset such as a bank account or piece of real estate. Yet if your will relies on that asset being part of your estate to pay others (or debts, expenses, and taxes), there may be a problem. Joint ownership can often lead to will contests and lengthy court battles. Before succumbing to the temptation of joint ownership, speak with your estate planning attorney and proceed cautiously so as not to upset the existing estate plan.

Changes to beneficiary designations

Beneficiary designation changes can have unintended consequences on your estate plan. The most common problems occur with changes to beneficiaries in life insurance policies. The policy may be payable to your trust to cover the cost of bequests, pay estate taxes, or shelter monies from estate taxes. Similarly, a retirement account due to an individual but changed to another may result in adverse income tax consequences. You may upend the intention of your estate plan by casually changing a beneficiary designation .

These are some of the more common mistakes people make that can negatively affect your estate planning goals. Regularly review your intentions and legal documents with your estate planning attorney to clarify changes in assets and asset types, lifetime gifts, beneficiary designations, and joint ownership additions. Doing so will keep your legacy as you intend it to be. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Legal Documents You Need to Have

Tue, 14 Jun 2022 20:04:00 GMT

As we age, we are more likely to have diminished mental capacity or declining health, so it is important to create an estate plan to protect ourselves and our loved ones. We need to make sound decisions regarding our finances and healthcare as we age. Putting these five must-have legal documents in place before life becomes too difficult to handle is crucial for your protection and wishes. It is not legally permissible for you to create these documents if you are too far into ill health, and guardianship will become necessary for decision-making on your behalf. Retaining a trusted elder law attorney is the first step to setting these legal guidelines to carry out your wishes.

Will

The will is a legal document that outlines who receives your assets after death. A valid will is critical for adults to possess regardless of age. It is especially true if you have dependent children since your will identifies guardians for them. Without a will, the courts decide who is responsible for raising your children and what happens to your assets. Each state has statutes that prescribe the formalities to observe in making a valid will. Writing, signature, witnesses, acknowledgment, and attestation may vary slightly depending on where you live.

Revocable Trust

This type of trust allows the grantor to amend, add assets to, or terminate the trust for as long as they like or until they can’t manage the trust competently. The grantor names a trustee who will eventually make daily decisions regarding certain assets on behalf of the trust and transfers these assets to beneficiaries upon the grantor’s death. Assets in the trust pass outside of a will and outside of probate. A revocable trust can make a potential guardianship process unnecessary.

A revocable trust is an estate planning tool used to reduce probate fees and delays in asset distribution and protect assets from becoming a matter of public record. You don’t need to have significant assets to benefit from this trust. You can place your home, checking account, life insurance policies, jewelry, or other valuable assets into your trust. Your estate planning lawyer can design your revocable trust to reduce federal estate taxes. A revocable living trust is one of the most important documents for nearly anyone to have in their estate plan.

Medical Directive s or Advanced Directives

This document, also known as an Advanced Directive , is a comprehensive and specific document outlining the wishes of a person’s healthcare choices in anticipation of incapacitation, illness, or end-of-life care. Some individuals want medically heroic measures to remain alive, while others might opt for a peaceful passing and less invasive care. For example, if you want artificial support to breathe or eat via a ventilator or feeding tube, that is an individual choice. A medical directive allows you to state these types of choices.

Most often, individuals prefer to weigh the benefits of medical intervention as it affects their quality of life. One can be alive yet hardly “living.” A medical directive provides clarity and guidance in decision-making for medical teams and family members regarding your ill health, incapacitation, and end-of-life choices for care.

Durable Healthcare Power of Attorney

This document permits the legal transfer of authority to make medical decisions on your behalf. The designee, known as the agent, can determine what medical procedures are allowable on the principal’s behalf in the event of incapacitation. This document differs from a medical directive that only explains your health care wishes. A healthcare power of attorney assigns decision-making power to act on your behalf when you are no longer capable.

The combination of a medical directive and healthcare power of attorney assures you will receive the care you desire. The medical directive serves as the blueprint for your health care decision preferences. The healthcare power of attorney gives the legal authority to effect decisions based on this blueprint..

Power of Attorney for Finances

Depending on how the document is written, this designated agent can make many financial decisions for the principal. They may include overall financial affairs, bill pay, property sale, bank safe deposit boxes, contract for services, property rental, tax audits, and more. There are four basic types of power of attorney :

Before making a selection, it is important to understand the different types of power of attorney and which will be most effective for your situation. Your attorney-in-fact will control your finances, so the agent you select must be someone you trust implicitly. If you do not have a viable candidate for a financial power of attorney, you may consider using your attorney or a licensed fiduciary company.

Speak with your lawyer today to implement these five critical documents in your estate plan. An unexpected adverse health event can happen anytime and at any age. These legal documents will protect your wishes, well-being, and assets at a time when you and your family are at the most vulnerable. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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How Life Insurance is Involved in Your Estate Plan

Tue, 07 Jun 2022 20:02:00 GMT

At first glance, life insurance may not seem to have any bearing on your estate plan, but it can be a crucial part of it. There are numerous other benefits to owning a life insurance policy aside from providing a large sum of money to beneficiaries.

Do not underestimate the importance of having cash funds immediately available in an uncomplicated way. Often the passing of a loved one or family member comes with a string of expenses that often exceed cost expectations. Much of what Americans have resides in investments like 401ks, IRAs, housing, and other illiquid assets with very little cash on hand. Life insurance proceeds protect families from having to force the sale of these assets at unfavorable tax rates. Some inheritable assets come with immediate payment requirements. Homes not fully paid off, cars, and the like can leave families with short-term liabilities requiring cash.

Understanding Estate Planning Strategies with a Life Insurance Policy

One of the more popular estate planning strategies that fit many situations is an irrevocable life insurance trust ( ILIT ). Though a beneficiary or third party cannot rescind the trust, modified, or amended post creation, it still offers heirs several financial and legal advantages. These advantages include asset protection, favorable tax treatment, and assurance beneficiaries use the proceeds in a manner concurrent with the benefactor’s wishes. Typically, life insurance policies are the chief assets held in an ILIT.

Before purchasing a life insurance policy, particularly if you want to create an ILIT, speak with your estate planning attorney regarding potential income and estate tax consequences. If you have an estate large enough, it can be subject to federal and state estate taxes depending on the applicable laws in place at the time of your passing. Your ILIT should be in place before binding a life insurance policy to it. Remember that states have different laws regarding an ILIT; to avoid problems, your ILIT must follow your state’s rules.

Using a Gifting Strategy for your Life Insurance Plan

It is possible to gift an existing life insurance policy to your ILIT. Unfortunately, if you were to die within three years of making the gift, the policy amount can be included in your estate for tax purposes due to a rule known as a “lookback period.” In effect, this isn’t making the policy proceeds taxable, but it adds the policy proceeds amount to the total value of the estate, in turn making it part of your estate subject to taxes. As federal estate tax exemption amounts frequently change, it is prudent to fund your ILIT by purchasing a new policy. Doing so will avoid the possibility of a lookback period.

When using an ILIT, whether or not you are married, use the second to die, survivorship policy, or are single and have an individual policy must be considered. Choosing between variations of permanent life insurance for your ILIT, such as whole standard life, universal life, and variable life insurance, can be confusing, and your estate planning attorney can guide you to your best option.

If you own a business and one adult child will take over the business. Still, other adult children are not interested or involved in the enterprise. The life insurance proceeds can provide the cash to buy out those inheritors’ business interests while leaving the business intact. Blended family systems can also benefit from life insurance payouts to ensure that all children receive an inheritance, not just the children of the last surviving spouse.

Life insurance should be a part of your family estate plan. It can increase the wealth your heirs inherit and provide a ready source of cash for immediate financial obligations after your death. Which form of life insurance best suits your needs will depend on your age and situation. Speak with your estate planning attorney about how a life insurance policy can be an effective way to transfer wealth to your beneficiaries. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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DIY Wills: Problems and Solutions

Tue, 31 May 2022 20:00:00 GMT

If properly written, a will addresses who receives your assets and properties after your death. Your will names a personal representative (executor) who will carry out your wishes. In addition to asset distribution, your executor makes a public notice of your death, files your final taxes, and records your will in probate court. If applicable, they will contact your named guardian(s) to care for your minor children or other dependents.

Many online options exist for creating a Do It Yourself (DIY) will. However, what seems a straightforward process can be fraught with costly errors that will fall to your beneficiaries and devalue your estate. DIY wills can be a reasonable choice in some limited circumstances, but they require careful research to understand state-dependent laws to get things right.

There are several problems common to creating a will by yourself, including:

The Will is Not Legally Binding

Each state has different requirements that constitute a legally binding will. Some basic premises hold, such as being over 18 and having a sound mind and body without being under undue influence or duress. Yet problems arise when overlooking fine print instructions. Some states will accept an oral will, and others require the will to be entirely in the testator’s handwriting. Certain states require notarization, including two witnesses, and some states require three witnesses. Online forms are often outdated and do not reflect current state law. Failure to execute a will with proper forms and in compliance with your state law will invalidate the document in court.

The Will is Unclear

DIY wills are generic templates that offer little guidance about important details. Often, the person making the will references a sibling without including their full name and residential address. There can be multiple brothers or sisters, and the court will not understand your intention. Clarifying these oversights takes time and money for the court to reconstruct your original meaning as best they can. If the court has trouble with vague or confusing descriptions of your property and associated instructions for its dispersal, they may opt not to follow your instructions.

The Will is Unenforceable

It is not permissible to put illegal or impractical conditions on your beneficiaries before receiving their inheritance. Each state has specific laws about what constitutes “illegal or impractical” conditions. For example, you may want to leave money to care for your pet, but a pet cannot legally inherit money. You have to identify a person to receive the money for the care of your pet or create a pet trust.

A Will and a Living Will are Different

A living will is an advance healthcare directive having nothing to do with disseminating property to heirs. If your end-of-life medical care wishes and subsequent funeral arrangements are in your will, the information is unlikely to be read until after your death. A will and a living will are completely different documents, but many people creating a DIY will mistakenly combine them.

A Will Does Not Distribute All of Your Property

Forgetting to provide instructions for every asset and piece of property is a common error in DIY wills. The court will not inventory assets and figure out where they go. Instead, they distribute property according to state intestacy laws, as if you had no will.

A Will Doesn’t Control Everything

Not all property is managed or distributed according to a will. Assets with beneficiary designations are outside of your will and probate court controls. Instead, these assets transfer directly to the named beneficiary.

If you have anything beyond a basic estate or family situation, an estate planning attorney is a better option than a DIY will. A solid estate plan has five key elements: a will, trust(s), power of attorney, healthcare or medical directive, and beneficiary designation. Proper estate planning ensures these legal documents support and complement one another and require regular review to accommodate life changes. You are risking problems for your heirs that can cost them time and money. An improper will can devalue your inheritable estate in probate court and is rarely worth the perceived upfront savings. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Ask Your Elder Law Attorney These Questions

Tue, 24 May 2022 19:56:00 GMT

While estate planning can be difficult and emotional, it is vital to wisely manage your assets and provide for your family members as you age. Your elder law attorney knows how to create an estate plan strategy that addresses these concerns.

Keeping Records and Detailed Instructions

Many people want to ensure orderly asset protection, management, and eventual administration while having flexibility if circumstances change. Wealth preservation is the main priority, and it requires accuracy. Over time, you may have assets in multiple states, and it’s important to document the status of any community or tenant-occupied property. An inventory of small business assets and their dispersal may also be necessary. Often individuals will want to name children as legal guardians if they become incapacitated and take steps to ensure heirs and loved ones are designated as legal beneficiaries of the estate. Detailed instructions reduce conflicts, minimize legal expenses, and reduce taxes to ensure heirs receive the full value of their portion of the estate.

Estate Planning and Elder Law Attorneys

Finding an elder law attorney whose primary focus is estate planning will give you options to achieve your goals. This specialized attorney will be current with changes to legal statutes in your state. An elder law attorney can develop an asset protection strategy, update your estate plan over time, and can administer your estate with greater efficiency. Executing a will or acting as trustee of an estate frequently requires the support of a professional. It also removed the burden from family members.

Core Planning Documents

Comprehensive estate plans have foundational documents, including a will, a trust(s), and health care directives like a living will and other advance health directives. Long-term care planning provisions and specific durable powers of attorney are crucial as in-home and nursing facility costs are the greatest threat to your financial security and family legacy.

Designating Agents to Make Decisions on Your Behalf

It’s best to choose people you trust to make financial and medical decisions while you are still healthy. If you have waited a bit too long to address estate planning documents, it may still be possible to sign legal documents with dementia but not incapacitated. Requisite capacity, even in advanced dementia cases, differs between medical incapacity and legal incapacity. Capacity requirements for each legal document may also vary and are determined by doctors. However, your elder law attorney can assist in understanding and completing proper legal documents, even in the case of dementia.

Questions to Ask an Elder Law Attorney

While this is not an exhaustive list of questions, how they answer and frame them in context to your specific situation will tell you a lot about their knowledge and what it might be like working with them. A sound strategy comes from an attorney who is willing to listen and learn about your family’s needs and goals. A good relationship with your elder law attorney must involve clear communication, options, and ideas that align with your general values.

You will need to provide comprehensive financial information to your elder law attorney and discuss highly personal matters, so trusting your attorney is critical. They will be guiding you through a process that can be both legally and emotionally complex. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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A Guide to Probate

Tue, 17 May 2022 19:53:00 GMT

ABA defines probate as the legal process that formally recognizes a will and appoints a personal representative (executor) to administer the estate for intended beneficiaries. Navigating the probate process will vary according to state law. Therefore, it is good to contact a probate lawyer to determine if the estate is small enough to bypass formal probate, whether the fiduciary must be bonded (this requirement is often waived in the will), and what reports are necessary to prepare.

The Uniform Probate Code

In more recent years, states have tried to simplify their probate procedures. The Uniform Probate Code ( UPC ) consists of laws written by a group of national experts to help standardize and streamline probate, and most states have adopted these standards. Across state lines, the probate process is finally beginning to work more effectively.

Probate Attorneys Help Navigate or Avoid Probate

However, this does not mean you shouldn’t meet with a probate attorney. Individual states still have different monetary thresholds for what constitutes a lower value estate that can bypass part or all of the probate process. Administering complex estates with an attorney’s guidance will be beneficial even if most estate assets already take advantage of estate planning tools designed to bypass probate. The attorney can support the executor or personal representative when providing the local courts with basic information like death certificates, form submissions, and communication with beneficiaries while administering the estate. The goal is to keep the probate process as simple as possible.

The essence of probate involves the following:

Probate Attorneys Help Executors Through Estate Administration

The estate’s personal representative is responsible for initiating court procedures and distributing the assets to named beneficiaries. If the personal representative fails to initiate probate proceedings, any party interested in the estate may initiate probate. Typically, these parties include those who will gain assets from the will, like a beneficiary or a creditor. In the absence of a named personal representative or if they are unwilling or unavailable to administer the estate, the court will appoint one to oversee the probate process. You may hire a probate attorney instead.

The time frames to begin the probate process are state-dependent. They begin at the decedent’s date of death and range from three to twenty or more years. Some states have no time limits for filing a will for probate, like California.

Removing Conflict and Debt Negotiation

Once the gathering and filing of necessary paperwork for the probate process are complete, you may find a disgruntled heir or someone bypassed from the will altogether make a legal challenge to the probate court, perhaps contesting the validity of the will. These legal challenges slow administering the estate, as can handling an estate with excessive debt where property needs to be sold to make good on debt claims. A probate attorney can mediate conflicts that arise by removing emotions from the decisions and negotiate debts.

If the probate process is going to be lengthy, immediate family members can ask the court to release short-term support funds in most states. The reputation of probate is at times well deserved for being time-consuming and expensive.

The probate process can be simple only when heirs agree with the will and the dissemination of property and assets. In that case, the executor provides the local courthouse with the decedent’s last will, a certified copy of the death certificate, a list of names and addresses of heirs, and a list of known creditors.

Maintaining Privacy

If there is disagreement among heirs, it is worth sorting out issues before beginning the probate process to avoid a legal challenge to the will. Once filed, probate proceedings are part of the public record, and most people prefer privacy regarding the death of a loved one and inheritance. However, excessive delay in the probate process will likely create more complex and expensive situations to resolve. If you need to work things out with heirs before beginning probate, it is best to resolve issues, if possible, sooner than later.

Avoiding Probate with Estate Planning Tools

While some probate processes can be extensive, taking multiple years to complete, most probate does not. Many estate planning attorneys help their clients avoid extensive probate through mechanisms such as a revocable living trust . This trust type allows the property in the trust to pass outside of probate. Other ways to avoid probate are titling property with survivorship features or adding beneficiaries on accounts, such as an IRA. Knowledgeable estate planning attorneys use these mechanisms and entities to keep the probate process to a minimum. These entities may include:

Most individuals seek to minimize the probate process when creating their estate plan. This best practice is suitable for larger and more complex estates as probate can become expensive and significantly decrease your estate’s inheritable value. Even smaller value estates using the entities and techniques for direct transfer or property outside of probate can benefit. Talk over your wishes with your estate planning attorney to create a plan that can minimize probate. If you are already a named personal representative and the existing estate plan is murky or without the presence of a will, a probate lawyer can help you assess the best path forward to accomplish the probate process with minimal loss to the estate’s value. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Elder Law versus Estate Planning

Tue, 10 May 2022 19:51:00 GMT

There are some overlaps between estate planning and elder law, but both are equally important to protect yourself and your family. The two terms tend to go hand in hand, but there are some differences. The biggest difference is that elder law planning helps a person during their lifetime, while estate planning activates after your death through already existing wills, trusts, and other legal entities. While the functions are separate, both are equally important for individuals seeking to be more peacefully prepared through effective legal planning.

Many law groups provide both elder law and estate planning services. This overlap of law practice specialties can create confusion, particularly because elder law attorneys also participate in estate planning (elder law estate planning). However, not all estate planning attorneys take part in aspects of elder law.

Elder Law Focuses on Seniors

The concern of elder law is to ensure older adults can live their most healthy, protected, and financially secure lifestyles as they age. Planning may include anticipating future medical needs such as long-term care, qualifying for Medicaid without depleting all assets, creating a living will, and legally naming individuals to guide your medical decision-making if you become incapacitated. In addition to aging seniors, elder law may also focus on the needs of war veterans and individuals with disabilities and assist with conservatorship or guardianship if needed.

Areas of elder law specialization include:

Elder Law May Involve Many Family Members or Caretakers

When practicing elder law, your attorney will often involve your close family and friends to work most effectively. Protecting the aging process of a loved one is usually a multigenerational effort addressing medical, financial, long-term health care needs, emotional support, and day-to-day living needs like shopping, transportation, and going to doctor appointments. These aspects combine to create the most healthy and secure aging environment and lifestyle. Elder law can also address veteran benefits, family home protection, special needs loved ones, estate administration, probate, and long-term nursing home care claims.

Looking at Law from a Senior’s Perspective

Comprehensively, elder law focuses on legal issues, complex regulations, and laws that vary by state that impact seniors. An elder law attorney has a unique understanding of the personal impacts aging brings and how it can physically, socially, and financially affect your loved ones, making them vulnerable. They are familiar with the various circumstances and decisions confronting older loved ones. The approach is holistic. While living, they will assist in navigating legal matters and tap networks of care professionals like social workers, health groups, and psychologists. Designated family members are trusted to help seniors coordinate financial matters and the long-term care they may require.

In truth, elder law is essential to all seniors, not just those with complex life situations, and will require refinement of goals as you age. Whether you want to protect yourself and your assets, address your special needs, a second marriage, high-value estate, or adult children who are financially irresponsible, an elder law attorney can help you manage the processes within the confines of the laws in your state. Elder law in action can protect you from the vulnerabilities that present themselves in your later stage of life.

Estate Planning Basics

Conversely, estate planning concerns asset protection, retirement planning, business succession planning, and distribution of estate assets after your death. Estate planning also concerns minimizing taxes after your die, identifying a personal representative to carry out your estate plan, and navigating legal tasks. Your estate plan also seeks to simplify probate requirements, name guardians for minor children, and prepare long-term assistance for loved ones with special needs.

Essential aspects of a comprehensive estate plan include:

Your estate planning attorney can help guide you as you name your representatives and trustees, identify the right choice of guardian for minor children, identify IRA, 401(k) and life insurance beneficiaries, create business succession plans, guide personal property distribution, and make charitable contributions.

Estate Planning Requires Periodic Review

Estate planning is not a one-time task. Life events may trigger a change in your estate plans, such as buying stocks, selling your current home, purchasing a rental home, getting a divorce or remarrying, losing a loved one, or gaining a new child or grandchild. Reviewing your estate plan frequently is critical.

If you do not develop a complete plan to manage your estate assets after your die, the probate court will take over the process of your property distribution. State intestacy laws will apply in the absence of a will to identify inheritors. If you skip estate planning, you will forgo your opportunity to provide for family and loved ones as intended. With estate planning, you can decide where you want your money to go, who will watch over your minor children, and even the care you prefer if incapacitated via a living will. Estate planning also enables your family to avoid the probate process, which can be lengthy and expensive.

Talk to your family about your needs as you age. Identify an estate planning lawyer who also understands elder care planning in your state. Be sure to find the right fit and establish a trusted and comfortable relationship with them to make plans that address your unique needs and desires for your remaining years. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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There is Much More to a Will Than Transferring Assets

Tue, 03 May 2022 19:49:00 GMT

In Care.com’s annual estate planning survey for 2019, 57% of U.S. adults lack a Last Will & Testament (a “Will”). Participants differed significantly based on factors such as age, race, and education. For example, when broken down generationally, 66% of people aged 65 and older, comprising the Baby Boomer generation and The Greatest Generation, have a Will, better than the overall average. Only 39% of the participants that fell into Generation X and 18% of the Millennial participants have a Will, well below the overall average.

The survey participants that did not have a Will gave many reasons why. The overwhelming answer was that they just had not gotten around to it. This answer was given 52% of the time. The next most common reason, given 22% of the time, was that they did not think they had enough assets to need a Will. The cost of making a Will was given as a reason 6% of the time, which was one of the least given answers.

The survey points out a major flaw in understanding the power of a Will. Most people have a basic understanding that a Will transfers assets you own when you die to the people outlined in your Will. Based on this oversimplified explanation of a reason to have a Will, it is easy to understand why younger people and people who have not yet amassed many assets misbelieve they do not need a Will. Never mind that anyone can die at any time, or that you own more than you realize and you want to have someone named to deal with all your stuff.

More importantly, anyone with a minor child should use a Will to name a Guardian for that child. Whether you are married to or divorced from the child’s other parent, naming a Guardian in case of your death is paramount. If the child’s other parent or adoptive parent is alive and still has parental rights when you die, the child stays with that parent. However, if the child’s other parent is dead or does not have parental rights, then the person nominated as Guardian in your Will is the only person that can stand up in guardianship court and definitively say that you believed your minor child’s custody should transfer to them. Then, since you are making a Will, you might as well also state who should inherit any assets you might own.

Creating a Will is a simple process when you engage experienced attorneys like us. Sometimes you know the best person to care for your child. Sometimes you need help picking between family members, or you do not have family members to choose from. We are not here to just fill out a Will form for you. We are here to help you and guide you through whatever issue is preventing you from making a Will. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Medicaid Planning Protects Your Home

Tue, 26 Apr 2022 19:47:00 GMT

It is likely that your most valuable asset is your home, which is true for many of us. You may want your children to inherit the value of your home when you pass away. However, you may also be concerned about your health, retiring, and the need for lengthy medical care. You have heard that Medicaid can pay for that, but the rules say you can own no more than around $2,000 in assets to be eligible. Now what?

Medicaid Planning Using an Irrevocable Trust

One solution is to take that significant asset, your home, out of your name, while reserving your right to live in it. This can be done with a carefully drafted irrevocable trust. Putting the house in the ownership of a trust could prevent Medicaid penalties and ensure reimbursement of health expenses, depending on your state’s current rules. It all depends on whether your health continues to keep you out of care for the next five consecutive years.

There are numerous other advantages to that kind of trust, one of which is to avoid probate proceedings. Trusts are private agreements that usually require no court supervision. So, signing away valuable property can feel like a big step, but it keeps your living situation unchanged and can really pay off in the long run.

Avoiding Capital Gains Taxes

But suppose, later, you decide to sell the house and move into a smaller place. That could pose a capital-gains tax problem. If the trust hasn’t been carefully drafted, and it (not you) sells the home, the personal-residence exemption would be lost. Capital gains tax could be prohibitive if the house appreciated in value since the date of purchase.

A similar problem arises when it comes time for your children to inherit. If the trust is not carefully drafted to cover this eventuality, your heirs will lose the basis-adjustment tax break. That, too, could cost them dearly. The basis adjustment allows the inherited value of the home, for capital-gains purposes, to be calculated not from the date you originally purchased the home, but from the date your heirs inherit the property.

For example, suppose you paid $100,000 for your house in 1980 and you kept it in good condition. On your passing, the house is worth $300,000. Now suppose the home is titled in the trust name, but the trust wasn’t written carefully to preserve the basis adjustment that would otherwise be allowed for inherited property. If the children sell the home for $350,000 in those circumstances, they would have made a taxable profit of around $250,000.

With the basis adjustment, however, profit would be calculated from the $300,000 mark as of the date of inheritance. This would leave your children with a tax bill on the $50,000 profit, not $250,000. This tax advantage comes from “stepping up” the taxable basis to the market price at the time of inheritance. As a result, your family receives more value by having to pay less taxes.

Protecting Your Assets for Heirs with an Irrevocable Trust

First, the irrevocable trust takes the home out of your name and, instead, titles it to the trust. Medicaid rules view the owner of the property as the trust, not you, and that’s what you want to reduce your assets and qualify for Medicaid assistance.

Next, to preserve the personal residence capital-gains exemption, an irrevocable trust creates what’s known as “grantor trust” tax rules. Current tax rules allow property owned by this kind of trust to remain part of your estate for tax purposes, and exempt from capital gains up to specified value limits, depending on your state and whether you file single or jointly as a married couple.

Even though the trust has ownership, you are still allowed to take the personal-residence exemption. For capital gains, the IRS disregards the trust.

Then, to minimize your heirs’ exposure to capital gains tax in the future, the trust also provides a “limited testamentary power of appointment.” The appointment power permits you to designate someone with the authority to disburse your assets to chosen beneficiaries, provided those beneficiaries are limited to family or charities.

The limited power of appointment allows your assets to pass down to beneficiaries while preserving eligibility for both the tax basis adjustment and Medicaid.

The right estate planning strategies neatly solve Medicaid planning and tax issues by:

Trusts are carefully drafted to comply with current rules regarding ownership and taxes to prepare for Medicaid eligibility and protect your assets for your family.

You may have a will, but it will not be able to protect your assets unless it becomes part of an estate plan that include an irrevocable trust. Bring us your will or estate plan, and let us look it over. If we find that it isn’t Medicaid-qualified, or it lacks provisions for grantor trust or the necessary powers of attorney, don’t worry. An irrevocable trust can be changed. Trusts that fail to account for various contingencies can happen if you don’t know where to find a trusted and reputable estate planning attorney. Many states have passed legislation permitting the modification of trusts for tax reasons, even if the trusts are nominally irrevocable. All parties must consent, or court proceedings would be required, but an expert Estate Planning or Medicaid Planning Attorney knows how to correct these problems efficiently. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Estate Planning for Nontraditional Families

Tue, 19 Apr 2022 19:42:00 GMT

Estate planning is being transformed by changing family structures. As recently as thirty years ago, a traditional family consisted of a husband and wife who married young, bought a home, had children, and worked toward financial stability and security. In 1949, 79.8 percent of American households were married couples, but in 2021 that number declined to 47.3 percent.

The rise of blended families, cohabitating couples, artificial reproductive technology, same-sex marriages, and other trends mean only one-third of American households are “traditional” families. The other two-thirds are non-traditional families experiencing unique needs that challenge current estate planning models.

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More complex family structures tend to avoid estate planning. But the absence of planning leads to an increase of needlessly squandered assets lost to estate taxes and family infighting over an inheritance. Dying without a will (intestate) means your estate will go through probate and follow the state’s intestacy laws that currently don’t favor unmarried partners and step-children. Fortunately, proactive planning with an estate attorney to build a modern plan can provide the best outcomes for the legacy and security of your non-traditional family.

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Blended Families

In particular, if you divorce, remarry, have additional children and grandchildren, or experience other significant changes in your family dynamics, do not delay creating or updating your estate plan. While the decision-making about specific assets, beneficiaries, and transferring wealth during family changes may sound overwhelming, your estate planning attorney is there to guide and support you. Updating your plan can avoid unintended consequences such as strained relationships, wasted financial resources, and more.

Conventional estate planning tends to favor traditional family structures and equal wealth bequests; however, this may not be your intention in a blended family with step-children. Creative solutions that reflect your contemporary family structure can successfully address these issues. Customizing your plan to meet unique needs makes more sense.

Pre- and Post-nuptual Agreements

Clarify your needs using pre and post-nuptial agreements if you intend to remarry. A new spouse needs to be aware of how you intend to distribute your assets to your children, mutual children, spouse’s children, and any other beneficiary. Early on, agreement on critical decisions about estate and gift tax exemptions can prevent future problems. A family law attorney can work with your estate planning attorney to ensure that the agreement structure complements your intentions regarding your estate.

Trusts and Other Strategies

In a blended family, you may consider alternative strategies to transfer wealth. If you choose to remarry, you may promote better family relationships with lifetime gifts to your children rather than after-death bequests. You can also use payable on death accounts which transfer directly to the beneficiary outside of your will and any trusts if necessary.

In the case of trusts, expand and clarify estate planning provisions and potential issues that may easily be overlooked, like:

If your family system is non-traditional, be aware that most US laws and estate planning practices tend to favor a traditional family structure which can leave some of your loved ones overlooked without careful planning. Knowing about these default favoritisms and standards should help you think carefully about specific provisions for your non-traditional family. Open discussions with your family and estate planning attorney will help you craft a better and more representative plan suited to your family. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Digital Estate Planning: 4 Obstacles to Avoid

Tue, 12 Apr 2022 19:40:00 GMT

With the Internet of Things (IoT) intertwined with our lives, identifying and managing the digital property you own is more important than ever. From smart home devices to online investments and bank accounts, we’ve gone way beyond using the internet to email family and social media to connect with friends.

Today, understanding which digital information and accounts you can legally leave to heirs is crucial to protecting your asset values. Laws governing these online assets are changing rapidly; however, legally gaining access to digital assets and encoded financial data can present challenges for anyone other than the original owner.

Four main obstacles will hinder access to a family member’s vital personal data and digital assets:

1. Passwords

Without knowing your passwords, personal representatives and family members may not be able to access your data and property stored on a computer, smartphone, cloud, and online accounts. While experts can easily bypass some passwords, others can be practically impossible, like cryptocurrency.

2. Encryption

Your digitally stored data is often encrypted for an additional layer of protection. Encryption can happen at many levels, from a single file on your device to large amounts of stored information in the cloud. In particular, new smartphone technology may be very difficult to decrypt, so if you have not transferred your data to an external hard drive or USB and shared it with other family members, the digital information may not be accessible.

3. Privacy laws

In general, federal data privacy laws prohibit turning over electronic communications by online account service providers unless you are the owner or have the owner’s legal consent. Therefore, social media sites and digital storage companies may lock down content without legal documentation sharing the circumstances under which trusted friends or family members can access it. Taking a digital service provider to court to retrieve treasured data is generally cost-prohibitive, so lawful consent from the owner is critical.

4. Criminal laws

State and federal laws do not allow unauthorized access to computer systems and private data. These laws protect consumers against identity theft and fraud, but additionally, they create insurmountable obstacles for loved ones to gain access to a decedent’s digital information and assets. If you do not give express permission to your fiduciaries, representatives, or family members in your estate plan, they may never be able to access it.

Ways to Access Digital Assets After a Death

Make a list of your digital assets and include important online accounts (social media, banking, bill pay), passwords, and digital property, including cryptocurrency, money transfer apps, and domain names. Store this list in a secure place and maintain its accuracy. There are free password management apps available to simplify your effort.

Many digital assets you think you own, you may not. For example, we tend to carelessly accept end-user license agreements (EULAs) without understanding that a “purchased” item is a non-transferable license to use but not own the asset.

If you store data in the cloud, it is wise to back it up in another location. Secure online safe deposit boxes or digital vaults tied to your banking institution store identification, legal documents, business contracts, finance, tax, and insurance information. By adding emergency contacts, you allow those individuals to access your documents. After a specific time limit, they will be automatically approved. You may also scan electronic copies of paper records to store on an external hard drive and store in a secure location to keep items updated and permit fiduciary, representative, and family access with fewer obstacles. Relying only on the cloud for backup can create future problems.

Consult with an Estate Planning Attorney

Working with your estate planning attorney, develop legal documents that give consent for online providers to divulge your electronic communication content to legally named individuals. You may want to tailor which people have access to chosen online information rather than a blanket approval.

You may have more digital assets than you think. Aside from social media, banking, and other more common digital assets, remember to include any:

It has become essential to account for your digital property in your estate plan as online lives are pervasive. Laws regarding digital properties and their inheritable promise continue to evolve. Your estate planning attorney can help you understand which online assets need to be part of your plan and how to permit fiduciaries, representatives, and family access legally. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Taking Your Parents to an Assisted Living Facility

Tue, 05 Apr 2022 19:37:00 GMT

You need to match your parents’ needs, budget, and lifestyle with desirable locations when finding the right assisted living facility for them. Research and preparation yield the best results when all parties participate by asking questions and engaging in open and honest conversations about expectations.

When your elderly parents need more help than an in-home caregiver can provide, A Place for Mom recommends taking these six steps to learn about assisted living before committing to relocate your parents. If you are unsure if your parents need help, check for any of these eighteen signs that indicate it is time to intervene for their benefit and safety.

1. Have a conversation with your family.

Where applicable, include all siblings in the first discussion no matter how far away they may live. If you are the driving force behind calling the meeting, be clear about your capacity to participate and provide care.

If you are already your parent’s caregiver, be honest about how challenging the job is and remind them you cannot perform the duties indefinitely without support. Work at the outset to settle any disagreements. Securing family members’ support is key to providing a smooth transition and reduce your workload. Your siblings may surprise you with input or solutions you may not have imagined.

If your parents are unwilling to listen to your proposed shift in their care, find a quiet moment when you can relay your feelings, observations, and concerns. Though your parents may be in denial, you must listen to them and document their apprehensions as well as their preferences. If they remain unmoved, perhaps employ the services of a professional mediator who can provide all involved a voice in a safe and constructive environment.

2. Understand what assisted living can do to help.

Big life changes can bring about significant stress, particularly with the elderly, who tend to be resistant to change. You can evaluate your parents’ needs with an assessment of their activities of daily living (ADLs). Recognize that assisted living encompasses far more than many people realize, although it is not as involved as memory care or nursing homes. Please do some research to understand what assisted living offers and match it to your parents’ requirements. And while healthy skepticism is reasonable, don’t forget to consider the potential benefits assisted living offers. Finally, speak to a local senior living advisor who has expertise in senior care. A Place for Mom offers free advisor services providing personalized advice and recommendations.

3. Make a plan to cover costs for your parents’ care.

Cost may be the most significant determining factor when looking for senior living options. Assess what your family can afford monthly and seek out assisted living communities that match your budget. If you are fortunate, your parents may have savings or long-term care insurance that will help defray the costs. Many families must explore other avenues.

Speak candidly to your parents about their finances . The most successful transition plans are born from open, honest dialogue about the critical factors in their move. Assisted senior living can be costly, so bring everything into the open to reduce stress and avoid surprises. Help your parents to understand the prices and costs of assisted living communities. Understand options for care payment , whether private funding or health care insurance, Medicare, or VA benefits.

4. Virtual tour or pay a visit to a senior living community.

Nothing can replace a trip through an assisted living community. It is better than brochures, photos, reviews, and floor plans. Tour a minimum of three communities that make your short-list. Try to schedule time for your parents to tour as well. Mealtimes can be an excellent time to tour as you can gauge residents’ satisfaction and interaction and the onsite staff. Print out this Community Touring Notes checklist for easy comparison.

5. Consult several and varied sources to determine the best assisted living community.

Talk to as many people as you know to learn from their experiences. Relying on a narrow range of information can lead to bad outcomes. Read senior living community reviews. Learn about your parents’ state regulatory environment , background check requirements, and appropriate agency licensing. Please take advantage of federal programs and speak to the long-term care ombudsman . Their job is to resolve issues related to safety, health, and residents’ rights in senior living communities. Set up a meeting with an elder law attorney as new resident contracts in assisted living communities can be confusing. Understanding the scope of an assisted living community contract is crucial to identifying what is provided and avoid unforeseen or hidden costs. An elder law attorney is best for this contract review as they will typically aspire to higher levels of professional conduct as they serve a vulnerable population.

6. Prepare your parents for the transition to senior living.

Once discussions with your parents are underway, do not delay the move. The more time your parents have to mull things over, the more uneasy they can become about the unknown. Become action-oriented and help them to downsize by consolidating their possessions. Plan and coordinate the move carefully to minimize stress levels for all involved. Senior move managers know what to expect and can help your move run smoothly. Be sure to gather and manage your parents’ legal, medical, financial, and other essential documents to ensure they are not misplaced or lost during the move.

Being compassionate to your parents is vital during this life transition. Involving all family members in a constructive dialogue to create a positive approach to the move is critical. Some parents may make a move with relative ease, while other parents may present more challenges. For the best possible experience, follow these six steps to help your parents move to an assisted living community.

If you or your parents would like to discuss options for paying for long-term care, we would be happy to help, please contact us at 989-495-2555.

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Avoid These Six Estate Planning Mistakes

Tue, 29 Mar 2022 22:41:00 GMT

Sadly, many individuals make costly mistakes without proper advice and guidance from an estate planning attorney. Estate planning ensures that your assets, interests, and those you love are protected after you die. Beyond undermining your intent and diminishing your financial legacy, poor planning can create additional stress to your heirs in their time of grief.

Six common errors frequently happen during the estate planning process. These mistakes often occur because the complete financial picture was not fully considered. It is easiest to avoid estate planning mishaps by knowing what they are before you begin or looking for these errors when reviewing and updating your plan.

Financial procrastination causes problems. While examining your mortality and making end-of-life preparations is not a particularly fun activity, try viewing it as helping and enhancing your loved ones’ future lives while creating a sense of peace during your own.

The need to protect your finances using wills, trusts, and power of attorney (POA) documents is not solely the domain of the elderly. Putting off the drafting of legal documents necessary to protect yourself and your inheritors can lead to disastrous outcomes.

By far, failing to create an estate plan is the most common mistake. Even if you do not have a lot of money, you need a will to protect any minor children you have by naming their guardians. Your will also ensures your asset distribution to heirs is carried out according to your intentions when you die and names a representative to handle debt obligations, final taxes, and other estate administrative duties. Dying without a will or “intestate” can lead to dire consequences.

Outdated wills, forms, and POAs create problems. If you made a will twenty years ago and have not reviewed and updated its contents, chances are many of the details no longer reflect current assets or beneficiaries. Estate planning is not a “set it and forget it” proposition. Reviewing estate planning documents and beneficiary forms every two years is generally adequate, barring a major life change such as divorce, birth, death, remarriage, or relocation to another state.

Beneficiaries without coordination can create expensive oversight. Beneficiary forms for retirement accounts like 401(k)s and IRAs, annuities, and life insurance policies may constitute a significant portion of your estate’s assets. These beneficiary forms are legally binding and will supersede the contents of your will. Failure to update beneficiary forms can lead to an ex-spouse receiving assets that preferably would go to your heirs. Routine checks of all beneficiary designations are best practices for estate planning.

Failing to title trust assets properly can lead to probate. While not everyone requires a trust, those who do must carefully retitle their assets into the name of the trust. Forgetting to add more recently purchased property or opening a new account requires you to title them into the trust to receive trust benefits. Whether real estate, cash, mutual funds, or stocks, if you fail to move the asset into the trust, they become subject to the probate court, possible tax consequences (depending on the trust type), and a public record of these assets.

Life insurance can trigger estate tax. Life insurance can provide heirs with liquidity without the sale of assets and tax consequences when handled correctly. However, if a wealthy individual dies while maintaining ownership of their life insurance policy, they may inadvertently create a tax event for their heirs. Although life insurance death benefits are not subject to state or federal income taxes, any “incident” of ownership by the decedent can create an inheritance tax.

An estate planning attorney can help shelter life insurance proceeds from high-value estates by gifting the policy to an Irrevocable Life Insurance Trust (ILIT) or draft a new trust to purchase a new policy where the trust is the owner and beneficiary. A policy owned by the trust does not create a taxable situation to death benefits. Your attorney’s careful structuring of this trust type is complex but can provide proper protection.

Joint ownership of assets with your children can lead to disastrous consequences. Naming your children as co-owners of assets, even digital, permits their creditors to access your money. The better way to address the situation is to give your adult child power of attorney and assign them as a beneficiary to a payable on death bank or brokerage account. This tactic permits them to access your funds if required during your lifetime. However, it keeps your assets from your child’s estate and away from their potential creditors.

Ultimately the biggest error you can make is not finding the right estate planning attorney to guide you. This specialized attorney receives training on avoiding probate, tax implications, and asset protection if you require long-term care. Proper planning with the right guidance will help you avoid costly estate planning mistakes and protect your family’s future financial well-being. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Planning Your Estate With Life Insurance

Tue, 22 Mar 2022 22:39:00 GMT

In the event of your passing, your loved ones should not have to inherit assets only to discover they can’t access them for cash expenditures. Most retirees’ assets are in homeownership and retirement accounts, requiring a sale to get cash. Life insurance can provide the liquidity needed when managing and distributing your estate assets. Your policies can address final expenses, estate taxes, business ownership, estate equalization, probate, and special purposes depending on your circumstances and the number of assets at hand.

Final Expenses

The average funeral cost in the US is nearly $8000 and somewhat less with cremation. The price becomes even greater when adding a burial plot, vault, or headstone. Even without a funeral service, cremation ranges between $1,000 and $10,000, depending on location, with the average around $4,000.

Some debts of the decedent will become part of the estate’s responsibility. These debts can reduce the remaining assets for your heirs, requiring a cash payout. Creditors may present the estate with outstanding bills and even litigate for payment.

State and federal final income taxes are a requirement. The government will seek payment of any back taxes in addition to those taxes owed in the year in which you die. Life insurance death benefits can help address these final expenses, helping meet the estate’s obligations.

Estate Taxes

The size of the estate affects the state and federal inheritance taxes that may be due. How much and at what rate is a shifting target of late. As thresholds change, so too should efficient tax planning for your legacy. Beneficiaries receive life insurance death benefits tax-free. With the right guidance, these proceeds can be used to offset inheritance taxes and avoid selling estate assets to cover tax obligations.

Business Ownership

If you own a business or are a co-owner, your passing may present substantial challenges for continuing the business, affecting family or business partners. Many start-ups and partnerships establish plans to address these eventualities, often in a buy-sell agreement. This contract outlines how a departing partner or founder’s business shares will be reassigned to other stakeholders or sold. Life insurance is often the financial product employed to fund such an agreement.

Estate Equalization

In the case of multiple heirs, assets often do not divide up easily or equally. For example, a vacation home worth $600,000 may be local and desirable to one heir, while the other two heirs live far away and have no interest in the property. To compensate those heirs who do not want to co-own the property, the heir wishing to retain the property must cash them out $200,000 each. This situation can quickly create a family rift.

As part of an estate plan, life insurance can fill the gap and equalize inheritance among heirs. In this case, one heir would get the property outright, while the other two would receive death benefit proceeds to compensate for their portion of the property value.

Probate Avoidance

Probate court oversees the settlement and distribution of a decedent’s assets. It can be a lengthy, involved, and expensive process even when a general estate plan and will are in place. Life insurance proceeds bypass probate when going to the named beneficiary.

Unlike a public probate process, the payment remains private and tax-free to the beneficiary. Be aware that life insurance death benefits may still be subject to estate tax if the insured had “incidents of ownership” when they died.

Special Purposes: Child Support, Divorce, and More

A life insurance policy earmarked for special purposes can address divorce obligations like child or spousal support. Death benefit proceeds may go to the continuation of support of a loved one like a minor child with special needs or an elderly family member.

Mainly these types of direct purpose policies are part of an established trust. Assets like life insurance policies are held in the trust on behalf of a beneficiary and under the supervision of a trustee to meet obligations providing long-range monetary support in a substantially funded trust.

Your estate planning attorney can identify which trust type will suit your needs. Personal circumstances and goals help define which trust will work best regarding probate, taxes, and more.

Life insurance death benefits can solve many liquidity problems that arise in the dissolution of an estate. These proceeds are typically not subject to income taxes and have uses as wide and varied as the circumstances and goals of the individual creating their estate plan. Your estate planning attorney can advise how to use life insurance properly to serve your beneficiaries. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Unmarried Couples’ Estate Planning

Tue, 15 Mar 2022 22:38:00 GMT

New partnerships are forming among older Americans who have experienced widowhood or divorce (in record numbers). The US Census Bureau reports that more than half of all older adults have only married once, opting to stay legally single in their future relationships. Cohabitating can have unforeseen and unintended consequences without a legally recognized civil union, marriage, or domestic partnership certificate.

For instance, your assets are not mutually inheritable without careful estate planning that includes a “living together contract.” This contract type can be specific and, as an example, cover one transaction, such as purchasing a new home. The contract can also encompass every aspect of your property and finances, including asset distribution in the event of incapacitation, death, or break up.

Many believe they can address domestic decision-making, such as permissions for owning pets, entertaining guests, even including minor tasks like who will do the dishes in a casual contract, but it is unlikely to be enforced by the courts. If you’re an unmarried couple, it is safer to draw up a comprehensive agreement, enforceable by the courts, that will see you through your lives together. However, you won’t want to co-mingle personal and financial clauses in a single contract as it may render the agreement unenforceable, negating the importance of the contract’s financial clauses.

For estate planning purposes, a comprehensive living together agreement includes all assets and property owned before the relationship and another for any acquisitions during the relationship. The property and asset division is much like a prenuptial agreement. Remember, joint obligations to a mortgage company or a landlord do not create a contractual relationship or entitle you to a property settlement in the event of death or the parting of ways. With non-marital agreements, each partner should also have a valid will for the state in which they live.

A living together contract often includes rules regarding gifts received, living expenses, property purchases, inheritable rights, and a method for dispute resolution that may arise later, typically through mediation. Having a living together agreement in writing can avoid a host of future legal issues and can be developed in the spirit of two fair-minded individuals clarifying the understanding of a partnership.

Many older Americans prefer not to remarry as it can have consequences to social security income, pension benefit awards, alimony (as part of a divorce settlement), tax consequences, and rights of survivorship. A new spouse’s income may disqualify a child for college financial aid or, in the case of a disabled child, impact the eligibility for government assistance programs.

Because many seniors and near seniors live together in non-legally recognized ways, estate planning can create challenges when partners want to provide for the other after their death.

A legally binding living together contract must work in concert with existing plans for already named heirs. A qualified estate planning attorney can draw up this contract and make necessary changes to current estate plans to avoid future legal conflicts. Like all estate planning documents, the regular review of its content to account for major life changes or preferences is crucial. If you plan to make substantive changes, it is best to be open with your partner and any adult children.

Avoid the possibility of personal and family conflict through open communication channels and mutual understanding. A newer, unmarried partner of a beloved parent may provoke suspicion of intent by adult children. Cohabitating is becoming more popular; however, as states adjudicate separations and inheritance, there is much to consider about planning property and asset control. To protect and provide for your partner and your adult children, consult an estate planning attorney about a living together contract in conjunction with your estate plan to ensure your documents reflect your wishes and are legally enforceable. For assistance, please contact us at 989-495-2555.

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Powers of Attorney: A Basic Overview

Tue, 08 Mar 2022 22:36:00 GMT

You should include Power of Attorney (POA) documents in your estate planning process. Most states recognize powers of attorney, but each state has its own rules and requirements. The document gives one or more individuals the legal authority to act as your agent or proxy on your behalf. Depending on which POA you choose, the agent’s power may be limited to a particular activity, such as a real estate sale, or cover broader applications.

A Power of Attorney may give permanent or temporary authority and be invoked immediately or be activated by a future event, such as mental or physical disability. The latter is known as a “springing” Power of Attorney. Powers of Attorney may be rescinded, but most states will require written notice of revocation to the named individual or entity.

Some Powers of Attorney are nondurable for the sake of convenience, especially in the case of a single transaction, such as a property sale. Your agent may conduct the sale of a boat or a home described in the POA document. If you are traveling abroad or know you cannot transact this business, a nondurable power of attorney can be greatly beneficial. Once the time period or transaction is complete, the nondurable power of attorney terminates.

A general power of attorney permits the agent to deal with any matters on your behalf that state law allows. Under such an agreement, the proxy may sign checks, handle bank accounts, sell property, manage assets, and file taxes when you are unable. This POA has a wide latitude of authority. Therefore, there needs to be coordination between you and your agent to ensure your best interests are always represented.

The better-known Powers of Attorney are durable and take effect upon incapacitation. The word “durable” means the powers will remain intact even when you can no longer manage your affairs. There are two types of Durable Powers of Attorney. One handles financial matters, and the other manages medical affairs, often called a healthcare directive.

Without these Powers of Attorney in place, a court may need to appoint individuals to act on your behalf upon your incapacitation. Depending on your state laws, these individuals are known as conservators, guardians, or committees. This type of court intervention can be expensive, time-consuming, and is a public proceeding. Most people prefer to keep their matters private by implementing powers of attorney documents in their estate plans to avoid conservatorships.

Financial Power of Attorney

This durable power of attorney permits an agent to manage your financial and business affairs, similar to a general power of attorney. When you become incapable of managing your affairs, the agent’s responsibility is to carry out your wishes to the best of their ability. If the financial power of attorney is also a beneficiary of your estate, they must act with great care to avoid misinterpretation of intent. This document is not just for seniors. An unforeseen illness or unfortunate accident can render a healthy, younger individual incapacitated and in need of financial assistance.

Healthcare Power of Attorney (HCPA)

An HCPA is also known as a healthcare proxy and permits a designated person or agent to make healthcare and medical decisions according to your specific instructions or their best understanding of your wishes. Again, consenting to an HCPA agent for medical care decisions is not only relevant to seniors. An unforeseen illness or accident can render a healthy, younger individual incapacitated, which is why an HCPA is a crucial estate planning document.

The best way to establish powers of attorney is to locate a qualified estate planning attorney. They can help you assess which power of attorney is necessary for your unique situation. They also understand the criteria for identifying the individuals or agents to represent your interests. Delegating general and limited powers to agents can create family strain during the planning stages. An estate planning attorney is familiar with the nuances of these family issues should they arise and how to move forward for all concerned. The biggest benefit of having these matters settled before incapacitation or death is allowing a family to care or grieve for their loved one instead of being bogged down in logistics. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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The Benefits of Living Trusts for Seniors

Tue, 01 Mar 2022 22:34:00 GMT

There is no question that seniors are prime targets for financial abuse and scams. That’s why senior protection plans are so important. As we age, it can become increasingly difficult to manage our assets. Most of us will, at some point, need assistance with these details to help ensure that our financial and other assets aren’t depleted. If you or an aging loved one are looking for ways to safeguard assets, a living trust is often the allow seniors to rest assured that their finances and assets are managed by a trusted person. best way to do so. Living trusts

What is a Living Trust?

Living trusts help protect and manage the assets of those who cannot do so themselves due to age, illness, or disability. Many seniors assume that a will is the only protection they need. However, trusts are designed to safeguard the assets of the living, while wills only outline what happens to a person’s assets when they pass away. Furthermore, wills must go before a probate court and taxes must be paid on inheritances, while Living Trusts allow beneficiaries to avoid probate after their loved one’s passing.

To establish a living trust the owner, or grantor, places assets within the trust. The grantor then appoints a trustee to manage it and names beneficiaries to receive the assets of the trust when the time comes.

There are different types of living trusts. Let’s take a look at each and the ways these trusts can benefit seniors.

Testamentary Trust

A testamentary trust protects an elderly person’s assets when a spouse dies. Assets of the deceased are transferred into a trust — enabling the appointed trustee to make all financial decisions regarding those assets. This helps a surviving spouse by protecting him or her from fraud or mismanagement of assets. Trustees can help the surviving senior generate income from remaining assets via sales or investments and take advantage of tax benefits.

Revocable Living Trusts

A revocable living trust safeguards seniors by making it more difficult for non-trustee family members to mismanage money or assets. The grantor (senior) can amend or revoke the trust at his or her own discretion without the consent of the beneficiary. This type of trust allows the grantor to stay in control of assets by either serving as a trustee or appointing one. In this case, the grantor, serving as trustee and beneficiary of the trust, appoints a successor in the event he or she becomes incapacitated or dies. This appointed person is then responsible for the disposal of the trust’s assets.

Irrevocable Living Trusts

An irrevocable living trust is one that cannot be changed or revoked by the trustmaker. This means that the grantor/trustmaker gives up his or her rights to the assets once they are transferred. Seniors over 65 who are eligible for Medicaid often choose to transfer assets into an Irrevocable Living Trust to avoid having to dispose of assets in order to remain eligible for Medicaid coverage or long-term care benefits. Once assets are in an irrevocable trust, they cannot be counted for Medicaid eligibility purposes, but there could be a penalty for transferring assets to an irrevocable trust.

An elder law attorney can assist in determining the best way to set up this type of trust and how to best transfer assets based on Medicaid stipulations. An irrevocable living trust can provide income for seniors and their spouses. It also protects their property and other assets from being seized to pay for medical costs, without impacting Medicaid eligibility. This type of trust can also remain in place for a surviving spouse after the grantor’s death.

The sooner assets are placed in an irrevocable living trust the better, as a penalty will be assessed by Medicaid during the first 5 years the trust is in existence (if Medicaid is required during that time).

Ultimately, living trusts give seniors more control over their assets than a will, allowing them to set parameters and stipulations and appoint a trusted advisor to help them make decisions. If you or your loved one would like more information about setting up a Living Trust, or would like to discuss your legal matters please contact us at 989-495-2555.

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Probate Litigation Avoidance Tips

Tue, 22 Feb 2022 22:32:00 GMT

Disputes regarding guardianships, conservatorships, trusts, real estate, and gifts may arise during probate litigation. The most successful approach to mitigating or avoiding probate litigation risk is carefully planning for the future. Comprehensive estate plans that are routinely updated, careful consideration and documentation of gifts, and protective measures in the event of incapacity contribute to a challenge-free transfer of your estate assets to heirs.

A great way to avoid probate litigation is with a Revocable Living Trust that permits you to title assets into the trust and manage it until your death. Years of managing your assets within this trust type prove that you handle your finances and property exactly as you intended if a contest is brought before a probate judge. Your competent management greatly reduces the risk of litigation as it demonstrates your mental capacity and financial management capability.

Gift-giving and real estate transfers to your children during your lifetime may open the doors for litigation after you are gone, particularly if these transfers have complex provisions and varying percentages. Consequences for unequal transfer of property or gifts often lead to children feeling the circumstances are unfair. Your adult children may not interpret your underlying future intent. For example, dividing ownership of the family cabin, giving one child eighty percent and the other child twenty.

The same holds for personal gifts like jewelry, baseball cards, or art collections. A parent may promise inheritance of a gift, but you may be inviting future probate litigation without detailing it in a document with your signature. Gift promises and real estate transfers often lead to disputes between siblings, leading to probate litigation.

Incapacity can be a challenging topic for a family to work through. Anyone at any age can become incapacitated by a sudden illness or accident. The thought of relinquishing financial and health care decisions to adult children or other family members can be unsettling. But implementing financial and medical powers of attorney can help avoid future litigation between family members. Nominate a guardian and financial and medical conservators while you have sound decision-making capacity and autonomy. They will be designated in both in your will and durable powers of attorney documents.

You can still make your own healthcare decisions even with a health care proxy or medical power of attorney. They can only make these decisions once a doctor deems you physically or mentally incapacitated. In contrast, a durable financial power of attorney will retain decision-making powers over finances upon signing the document. An estate planning attorney helps you identify the criteria to consider for your specific needs when making decisions for this crucial role. Select both of these representatives well in advance of the unforeseen events that will require their help.

Establish your will and trusts early on as they are vehicles to control and communicate your personal and real property distribution to heirs. Your will protects your family from intestate statutes or laws that govern dying without a will. Your will nominates a personal representative to oversee your estate, the payment of outstanding debts, final taxes, guardianship, and the dispersal of remaining assets.

Note that most states will not consider stepchildren as part of an inheritable estate without a will specifically including them. Without a will naming a representative, most families typically fight over who is best suited to the job. This situation can lead to expensive and time-consuming litigation.

Your will and the naming of financial and medical durable power of attorney representatives are crucial estate planning elements to avoid probate litigation. To guard against litigation more fully, creating a Revocable Trust will preclude court oversight all together except in the case of a challenge. However, if you have been competently overseeing the Revocable Trust, this presents a formidable challenge to contest.

A will, durable medical and financial powers of attorney, and a trust complement to each other to provide a strong defense against probate contests, but it is not guaranteed. However, your estate planning attorney can make provisions for all documents to be unambiguous, increasing the probability of avoiding any potential future litigation. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Surviving Spouse Estate Planning

Tue, 15 Feb 2022 22:26:00 GMT

In the wake of losing a spouse or long-term partner, it can be difficult to think beyond your grief. However, it is crucial to realize you need to make important and timely decisions regarding your finances and personal estate planning. In truth, estate planning is perpetual as it accounts for changes in marriages, deaths, divorces, and births of children and grandchildren. Assuming your spouse left an up-to-date estate plan requiring no further action after their passing can have disastrous consequences.

Your first line of defense to avert problems is scheduling a meeting with your estate planning attorney to review the decedent and your estate in its entirety. It is not uncommon to discover assets you are unaware of, which allow for planning opportunities to transfer tax-free wealth. With the loss of a spouse’s income, uncovering these sorts of assets may also secure a widow or widower’s finances. You may also discover incomplete beneficiary designations, incorrect titling of assets, or an overlooked grandchild if they are newly born into the family.

Your estate planning attorney can also advise you of the decision-making deadlines inherent to your situation. There are some powerful wealth transfer tools available to a surviving spouse. For instance, a spouse may opt to disclaim interest in some of the decedent’s assets in favor of transferring them to other beneficiaries, but this must occur within nine months of the decedent’s date of death.

Inheritance tax laws are in political play. Is there an elimination of the tax-free basis step-up but still a $1 million per person exclusion, and how long will you have to make this adjustment? As a surviving spouse, you have an option to file a federal tax return for that year as a single individual or as a married couple, permitting you to receive the benefit of higher deductions as long as you do not remarry that year.

Regarding the decedent’s estate tax return, a surviving spouse may need to make a portability election maximizing the amount transferred estate-tax-free to the next generation. If the decedent had no revocable trust sheltering assets from the probate process, there are timelines to meet with the probate court. Many more scenarios exist but what is universally true is that a surviving spouse must prioritize assessing the estate plan and finances amidst their grieving.

After a spouse’s passing, much of the attention of legal services focus on administering the decedent’s estate, yet so often, allotting time to develop plans to meet the legal needs of the surviving spouse is often overlooked. Both the decedents and surviving spouses will require review. There are circumstances when wills and trust configurations permit a surviving spouse a “second look” to see if the decedent’s estate plan is still a proper fit for the spouse. Existing estate plan documents in the surviving spouse’s name require review as documents most often require a change of beneficiary or representative since the death of their spouse.

Aside from wills and trusts, some of the most basic estate planning needs for implementation or review moving forward with the surviving spouses documents include:

Durable Powers of Attorney

This individual acts on your behalf for financial matters and is typically between spouses during your lifetime. The surviving spouse must identify another trusted person, replacing the decedent, as their power of attorney and decide if this power is only available in the event of incapacitation or at any time.

Medical Power of Attorney (Health Care Proxies)

Again, if the decedent was your representative, you will have to select an agent in the event of incapacitation or an inability to communicate your health care decisions. There is a possibility of an alternate designation in the health care proxy. If so, review the choice to ensure it is still appropriate or remove them and name a new health care agent. These documents are often on file with your primary care physician, so provide an updated copy to those who may have the old document and be certain they are aware of the change.

HIPAA Release Forms

Even if you have a medical power of attorney, you may still want other family members to discuss your health situation with medical personnel. Strict laws govern the release of your medical information. If you want additional individuals to access your medical records, you must sign a HIPAA release form. This strategy of an additional individual having access to your medical information is useful, particularly when you are still making your own decisions but prefer someone to discuss your medical situation with the doctors. Be sure your primary care provider has a legal copy of this form.

It is not uncommon for an estate planning attorney to understand the financial and legal situation more fully than a surviving spouse. Whatever your level of comprehension of the situation, it is paramount to review and make appropriate changes to best protect yourself as a widow or widower. It is a challenge to review all of this during such an emotional time, but do not delay in creating your best scenario moving forward. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Disruption of Probate by a Creditor

Tue, 08 Feb 2022 22:23:00 GMT

The date of death of the testamentary is usually published in a local newspaper by a personal representative (executor). In part, this information serves as notice to creditors if the decedent has an outstanding debt with them. The personal representative must also make a reasonable effort to notify ascertainable creditors.

Generally, this creditor notification is four months after the probate court issues letters of administration or thirty days after learning about the creditor. If the personal representative does not notify creditors within the state’s allotted time, the probate court may rule the creditor may enter a late claim. This situation may apply to spouses that are creditors and who can claim breach of fiduciary duty against the deceased.

An Estoppel and fraud defense can protect a creditor if a personal representative goes back on their word or makes a seemingly untrue assertion for debt payment. Some personal representatives may lead a creditor to believe the estate will pay an outstanding debt in full without the creditor filing a claim, thus permitting time to pass and creditor deadlines for probate court lapse. The court can estop the personal representative from arguing the claim by the creditor is time-barred though there is usually a one-year statute of limitations for this action.

By law, after administration expenses of the estate and state and federal tax payment for the decedent, certain debts must receive payment via the estate as soon as funds are available. These debts include:

Decedent debt liability does not affect a personal representative unless a creditor can prove estate mismanagement by the administrator. In general, a surviving spouse in a community property state equally owes acquired debt. If there are insufficient funds to repay the debt, a spouse can be liable unless they can prove the debt to be separate. In most cases, any property of a surviving spouse that is separate will remain safe from creditors.

A creditor with a rejected claim by the personal representative of a decedent’s estate may seek the help of a creditor rights law firm to litigate their claim within ninety days of the rejection of the claim. If there is enough evidence to support and validate a creditor claim, a court will enter judgment for the estate to pay the claim to the creditor. At this time, the creditor now has more latitude to pursue the debt collection.

A creditor’s claim is not subject to such stringent timelines when the decedent’s property does not pass through probate. Theoretically, a creditor can track down the property and sue its new owner to satisfy the debt a year or two later. Property distribution without probate has no legal requirement to notify creditors in writing. It is possible for a creditor to not know of the death for years or the property location. If the debt is not large, it may not be worth a creditor’s time to track down the new owners for collection.

Not all debts are equal and valid. A personal representative can negotiate with creditors to lower the debt amount to preserve the maximum amount for beneficiaries and heirs. Fraud does occur, and sometimes companies do not keep accurate records. Any settlement offer must be in writing to protect the estate and all payment data kept in record. In the case of an insolvent estate, the court requires all creditors filing valid claims receive payment under a pro-rata division of estate assets.

Creditors have the right to pursue valid debts against an estate. If you are a personal representative of an estate with significant debt, hiring an experienced probate lawyer will be of great benefit. Your probate attorney will help you observe all deadlines, meet probate code legal requirements, and negotiate with creditors to reduce debt. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555 .

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Life Insurance Trusts and Wealth Management

Wed, 02 Feb 2022 22:19:00 GMT

Due to the threat of lowering the federal estate tax exemption allowance, you may want to rethink how you intend to pass generational wealth on to your heirs. Senate Democrats are proposing to lower the current estate tax exemption from $12.06 million to $3.5 million for individuals and $24.12 million to $7 million for couples. Whether this particular Congressional bill will pass into law is unknown; however, change is likely coming to estate tax exemptions. Even without action by Congress, in 2026, the current rate will sunset and essentially be cut in half to about $6.6 million per individual.

Understanding Irrevocable Life Insurance Trusts and Other Taxations

To address additional inheritance taxation, many look to an irrevocable life insurance trust as a mechanism to reduce estate tax and pay your heirs part or all of the amount your estate will be taxed. The asset of the trust will be one or more life insurance policies. However, beware, as once an irrevocable life insurance trust ( ILIT ) is created, it cannot be rescinded, modified, or amended. There are several important requirements to create and maintain an ILIT properly, and each requirement helps to explain the nature of such a trust.

ILIT’s can own both individual and second to die life insurance policies. All premium payments should come from a bank account owned by the ILIT. The downside to an ILIT is that it is irrevocable. However, your ILIT is a powerful tool that can minimize your estate taxes, avoid gift taxes, protect assets and government benefits, select the timeline of distribution to beneficiaries, and more. If you would like to discuss whether an ILIT may be right for you, please contact us at 989-495-2555.

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Settlements Affecting SSDI and SSI

Wed, 26 Jan 2022 22:16:00 GMT

If you are wondering how a personal injury settlement will affect your Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits or whether you should pursue a personal injury claim at the same time, then you need to consider your situation. However, there is a general short-term answer for both SSDI and SSI:

Both SSDI and SSI programs are under the Social Security Administration ( SSA ). Different eligibility requirements that fit different purposes are why personal injury settlements uniquely affect the two SSA programs. An SSDI program is an “earned benefit,” while an SSI program is “needs-based” for those individuals whose income and assets fall within a defined poverty range. Each benefit receives payments out of a different federal coffer.

Because a personal injury settlement can negatively affect SSI benefits for those with special financial needs and who are disabled, it is prudent to work with an attorney specializing in collecting these benefits before moving forward with a personal injury settlement. The SSA posts the SSI eligibility amounts for 2022 and includes a “monthly maximum federal amount of $841 for an eligible individual, $1,261 for an eligible individual with an eligible spouse, and $421 for an essential person.”

Exceeding these amounts will render you ineligible for SSI because a financial hardship no longer exists. Additionally, because Medicaid benefits are financially need-based, you may be at risk of coverage reduction or losing it altogether. These two circumstances can lead to catastrophic loss of benefits for individuals with no access to private health care insurance or Medicare to cover costs of medical treatment, hospitalizations, and prescription drugs.

There are some legal solutions to avoid loss of SSI benefits via transferring the personal injury settlement funds into a special needs trust. This trust format can protect disabled individuals via a trustee who will manage the trust contents and pay expenses on their behalf. Because the individual does not have direct control over the trust, the SSA does not consider the personal injury settlement compensation affecting SSI eligibility. In essence, it makes the personal injury settlement monies in the special needs trust no longer countable under Medicaid’s rules. There are strict compliance measures regarding these trusts and the disbursements of their assets, so it is essential to consult an experienced attorney to create your special needs trust.

Your qualified attorney can help you understand your personal injury case’s potential worth and how the two program forms, SSDI and SSI, may interact. Your attorney can determine a monthly calculation for a potential personal injury settlement and compare that to the Social Security monthly benefit amount to see where you stand financially.

You must report all personal injury settlements to SSI and Medicaid because your income and assets determine your program benefits, so they must know how much of a settlement you receive. Current rules state you should report your personal injury settlement amount to the SSA within ten days of receiving it.

Key Takeaways

If you receive SSDI benefits –

If you receive SSI benefits –

Finally, if your SSDI benefits are on the higher end of compensation, you may wonder if it is worth pursuing a personal injury claim. Personal injury settlements are no guarantee; however, in some circumstances, a large settlement will mean a significantly higher payment value than SSDI. Settlement negotiations for personal injury cases may include compensation for losses and damages that SSDI cannot cover like:

Extensive rules govern the SSA programs SSI and SSDI. It is difficult to know what to do when facing additional income stemming from a personal injury settlement. Hiring an experienced attorney to navigate the complexities to protect your benefits and receive the full and fair compensation you deserve from a personal injury settlement is in your best interest. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Comparison of Revocable and Irrevocable Trusts

Wed, 19 Jan 2022 22:14:00 GMT

Estate planning involves many different types of trusts; the most common are revocable and irrevocable. Though there are some similarities, these two types of trusts serve different purposes. Both can substitute for a last will and testament as an alternative way to distribute property, though a trust and a will often exist concurrently. Whether a revocable or irrevocable trust works better for your estate plan depends on what you need the trust to do for you.

The most striking difference between the trust types is as defined in the names. A revocable trust permits changes, amendments, and revocations at any time while you are alive and mentally capable of doing so. In contrast, an irrevocable trust does not permit amendments or revocations of any type while you are alive. The only changes to the terms of the trust are as the trust agreement itself defines and allows.

Both trusts, when properly implemented, permit the bypass of the probate process. A revocable and irrevocable trust will survive your death, and your named successor trustee will be able to distribute trust property free from court interference after you die. The trustee may only distribute assets that the trust owns in title to avoid probate.

Why seek to avoid probate? The process is slow and time-consuming, taking anywhere from six months but in most instances one to three years to complete. Although it varies by state, probate can be costly as the court takes a portion of the gross estate in probate fees even before the deceased’s debts are paid. The fee can be as substantial as ten percent. Finally, probate is a public process, and all documents and information will become part of the public record. Estate debts and assets become public records, as are the distributions of assets. Anyone who cares to look up this public record can know which beneficiary received what and often make targets of inheritors for scams or burglaries.

Both trust types help you control property after you die with conditions you outline as to how to use trust assets once you pass away. Conditions are usually age restrictions, punishments for bad behavior, and incentives to promote good behavior. These conditions must not violate public policy. Revocable and irrevocable trusts can set up conditions regarding distribution while you are alive. However, in a revocable trust, if you create the trust, control the trust as trustee, and are the trust beneficiary, you will NOT receive protection from creditors or others who may have a claim against you. This lack of credit protection in a revocable trust is significantly different from an irrevocable trust.

An irrevocable trust can prevent the distribution of assets to certain entities or people, like a long-term care facility or a creditor. The irrevocable trust must be in place and active before protection from the debt accrued to be effective or be within certain time limits to qualify for government programs such as Medicaid. The irrevocable trust creates a legal wall separating you and your assets permitting the shielding from creditors or long-term medical care costs. Asset protection is one of the most useful aspects of an irrevocable trust.

An irrevocable trust is also a vehicle to shield your multi-million dollar wealth from excessive federal estate taxes to preserve generational wealth. 2022 tax exemptions include:

In summary, both trust types can provide estate planning benefits depending on your needs.

Revocable Trust

Irrevocable Trust

Trust types in estate plans are as varied as those individuals seeking to enact them. To best protect your interests and those of your beneficiaries, please contact us at 989-495-2555.

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How to Avoid Medicaid’s Penalty Period

Wed, 12 Jan 2022 22:11:00 GMT

For nursing home care, assisted living, in-home care, or adult foster care, individuals must meet certain income and asset requirements. As a result of these rules, many candidates give away their money and resources to qualify. However, there is a “look-back period” before the individual’s application acceptance, during which time the Medicaid administering agency reviews all individual financial transactions. Transactions in violation of the look-back rules will garner a penalty in the form of time, where the applicant becomes ineligible for Medicaid. This time frame can be months and even years.

Forty-nine of the fifty states have a look-back period of five years (or sixty months). The exception is California, with a thirty-month look-back period. This period of Medicaid ineligibility is a penalty period with no maximum. To determine the penalty period, Medicaid takes the dollar amount of assets transferred and divides it by the daily private patient rate of nursing home care or the average monthly private patient rate.

There are certain look-back exceptions and exemptions, particularly for families in difficult situations. These are very often confusing options and often difficult to implement without the expertise of a Medicaid planning attorney. Certain common mistakes and violations can occur.

Gifts

The federal government’s annual gift tax exclusion amount per recipient is $16,000 in 2022 via the estate and gift tax exemption. However, Medicaid does not consider this transaction exempt from its look-back period. Even birthday gifts or other special occasions like holidays or weddings may result in a Medicaid penalty. Gifting rules change state by state, making things even more complex.

Lack of Documentation

If you transact an asset and receive a value equal to the fair market value without proper documentation, you may violate the rules of the look-back period. This situation is particularly relevant for assets with a government record like boats, motorcycles, or vehicles because of their registration requirements.

Irrevocable Trusts

Many individuals incorrectly assume that an irrevocable trust (sometimes inaccurately called a Medicaid Qualifying Trust) is automatically exempt from the look-back period. Creating an irrevocable trust during the look-back period is considered a gift and a countable asset. Irrevocable trusts created before the look-back period are not countable assets.

Because Medicaid is a federal and state program, look-back rules vary by state. Even the penalty divisor amount varies by state because the average cost of nursing home care varies. Some states calculate using a monthly average penalty divisor, while others use a daily average penalty divisor. In New York, the rules governing asset transfer under fair market value do not include home care, sometimes called community care. Instead, they only apply regarding nursing home care. Pennsylvania will permit an individual to gift $500 per month without violating the Medicaid look-back period. Understanding the nuances and differences between states and Medicaid rules is crucial to successful planning.

Strategies to avoid violating Medicaid look-back rules and avoiding penalties can help families keep some of their assets while still qualifying for Medicaid. A Medicaid planning attorney can help you identify which strategy is best to implement in your circumstance. These strategies can be extremely complex and require professional help. It is easy to have a loved one disqualified, but very difficult to rectify the problem.

Caregiver Agreements

Also referred to as Life Care Agreements, Elder Care Contracts, or Long-term Care Personal Support Services Agreements, the formal agreements permit compensation to the caregiver, spending down assets for services without violating the look-back period. These contracts between a caregiving relative, friend, or older adult permit a senior to receive necessary care that Medicaid does not cover while also providing the caregiver with needed compensation. This contract requires the services of an attorney to ensure its careful drafting.

Medicaid Exempt Annuities

This annuity type is common to avoid violating the Medicaid look-back period. An annuity is a lump sum payment in cash by an individual in return for a monthly payment for the duration of that person’s life or a set number of years. These annuities are Medicaid compliant because they turn assets into income, lowering the assets of the Medicaid candidate below the Medicaid eligibility limit. Some annuities qualify, while others do not, be certain to choose the right product if the goal is Medicaid qualification.

Irrevocable Funeral Trusts

This trust type sets aside a specific amount of money (within state limits) for the sole purpose of funerary and burial costs. This trust helps applicants spend down excess assets without violating the Medicaid look-back period.

Undue Hardship Waiver

Filing an undue hardship waiver request occurs when individuals violate the Medicaid look-back period, but it renders them without basic needs like shelter and food. It is difficult to receive this waiver as there must be an effort to exhaust all avenues of asset recovery, including legal options.

Recuperation of Assets

If previously transferred assets during the look-back period can be recovered, the previous penalty established can be reconsidered. Some states will review all assets transferred to all people. Partial recovery of said assets may shorten the penalty period in some states but not in others. Though the returned assets will put an applicant over the Medicaid asset limit, these assets can then pay for long-term care as the applicant reapplies.

The surest way to avoid violating a look-back period infraction and qualify for Medicaid is to consult a qualified Medicaid planning attorney before you gift or transfer any assets. If a violation has already occurred, a qualified attorney can also offer assistance to rectify what has gone wrong. The best option to avoid the Medicaid penalty period is to plan proactively. If you have questions or would like to discuss your legal matters please contact us at 989-495-2555.

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Will-Making and Undue Influence

Wed, 05 Jan 2022 22:08:00 GMT

Those who become quite elderly or ill are also vulnerable to being manipulated by those who would defraud or steal them. Targeted attacks on vulnerable older people to exert what attorneys deem “undue influence” constitutes elder abuse. It disrupts the older persons’ impulse to provide for loved ones and instead leaves assets to the manipulator. Often, family members do not find out about a change in estate plan until after their loved one has died. Most often, a manipulator will seek to keep last-minute changes of inheritance quiet.

If you believe undue influence was at play regarding the will of your deceased love one, you can take your suspicions to probate court. Proving undue influence can prompt the probate judge to rule that the will and other estate planning documents are invalid. Contesting undue influence is allowable even if there is no regular probate court proceeding to probate the will and distribute estate assets.

A probate judge will look for a claimant to prove that the will either

Undue influence is not the same as meddling or offering unsolicited advice or opinions to an aging family member. As long as a will-maker is mentally and physically independent, they can follow or disregard opinion and advice as they choose. The situation changes when physical frailty or cognitive decline can leave a will-maker susceptible to undue influence. As an example, out of need, an older person might welcome a cousin into their home to provide them care. That older person’s children may have suspicions about the cousin’s motivation or begin to experience estrangement from their loved parent. In this event, direct conversations with the will-maker and their permission to confirm through their attorney that the will and estate documents have not changed may be necessary.

Proving undue influence in probate court will require testimony from people who knew the will-maker well, such as medical doctors and health care providers, caregivers, lawyers, and other advisers, as well as family members. These individuals then testify about what they know regarding the relationship between the deceased individual and the person being accused of exerting undue influence.

caring.com

Because probate courts try to adhere to the last “voice” of the decedent, the best and least expensive way to prevent undue influence is to have an open discussion with your loved one or aging parent. Discuss their estate planning and its impact on all generations in the family well in advance of them becoming vulnerable. According to a survey by Caring.com , only 45 percent of adult children discuss what their parents’ plans are for when they need care. And only 30 percent discuss who will pay for and manage their care. Even during the COVID-19 pandemic, only a small percentage of Americans have the proper estate planning documentation. Acting now to prevent potential abuse is vastly preferable to introducing allegations of undue influence in probate court.

If your loved one is already having difficulty making rational decisions, including estate planning options, for their well-being, seek a guardianship or conservatorship through the courts. Appointing a trusted person will ensure the respect of a loved one’s wishes and prevent undue influence. If they are capable, review existing estate plans and share feelings openly. If no plan exists, encourage your parents to contact an elder law attorney and discuss the need for a will, trust, or both. Understanding and helping loved ones with aging preparations should be a family priority, and open discussion can prevent undue influence.

If you believe a loved one may have been the victim of undue influence (or is currently being influenced) please contact us at 989-495-2555.

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Five Common Estate Planning Mistakes

Wed, 08 Dec 2021 21:21:00 GMT

People spend the first half of their lives trying to achieve financial security and the second half of your life trying to maintain it. This adage is why many people spend substantial time and effort maximizing their legacy goals in their estate plan, ensuring their wishes come to pass. Your life’s work and ability to provide for your family provide a gratifying feeling for you and your heirs. However, your careful planning can go awry when last-minute changes become part of the mix, often guided by advice from well-meaning family and friends but not a professional estate planning attorney.

There are five common errors that people make that will upend your estate planning:

Leaving money to someone while you are alive but not changing your will . Frequently people include cash gifts in their will. For instance, a favorite nephew may inherit $50,000, a childhood friend $100,000, even a housekeeper may receive $10,000 for loyal service. It is quite common when family members meet after a loved one has passed to hear that the deceased has already gifted these particular cash amounts.

The mistake is that the gift is given, yet your will continues to reflect the named individual should be given what has already been received. In the absence of an updated will reflecting the gift, the probate process will still award the individual named the cash amount or, in essence, an additional gift. While some recipients will approach the gift during their lifetime as an advancement on inheritance, others may not agree, and the argument may wind up in court.

Insufficient assets are funding your trust . You may have created your trust years ago, and its assets may have decreased in value and be insufficient to cover the costs of all the gifts associated with your trust. Your good intentions in creating the trust can evaporate, leaving some inheritors short-changed or receiving nothing at all without proper management and preservation of the trust’s assets.

It is good to remember the rule that cash gifts get paid first. For example, if you leave your sister one million dollars and the rest in trust to your children, and you die with assets totaling $1,100,000, your sister will receive her cash outright while only $100,000 will remain in trust for your children. If there is no cash to fund the trust, the trust provisions are zero-sum, and the unlucky heir will have to learn of the unfortunate circumstances.

All assets do not pass through your will . Your estate division is primarily likely to be probate and non-probate assets. Just because you believe your assets’ aggregate is enough to satisfy your gifting, not all assets will pass through the will. You must understand the difference between probate and non-probate assets. Non-probate assets often pass as a beneficiary designation or joint ownership outside of a will. Also, consider the need to deduct any outstanding debts, expenses, and taxes in the valuation of your assets.

You are adding a joint owner of accounts or real estate . Joint ownership seems a simple solution bypassing excessive planning; however, adding a joint owner can create serious problems. Yes, the bank account or piece of real estate will quickly become wholly owned by the survivor, and yet if your will is reliant on that asset to pay other inheritors, debts, expenses, or taxes, there may be a cascade of problems after you die. Adding a joint owner will often lead to will contests and even prolonged court battles, so be sure your estate planning attorney agrees that the option of joint ownership is a sound one in your particular situation.

Changes to your beneficiary designations . If you make changes to your beneficiaries without speaking to your estate planning attorney, you can create all sorts of unintended results. This situation is particularly true in the case of life insurance. For instance, the policy can pay your trust in order to meet bequests, shelter money from estate taxes, or pay those taxes. However, if you change the beneficiary, you will have to designate the money elsewhere to cover the existing bequests and estate taxes. In another case, if you have a retirement account payable to an individual inheritor but you change the beneficiary to your trust, you may create adverse income tax consequences.

These are just five of the more commonplace mistakes that can occur in your estate plan. Sadly, there are many others, and so caution and professional legal advice are crucial. While it is essential to review your estate planning documents regularly and perhaps make changes, it is imperative to do so under the advice of your attorney. What may seem like a harmless amendment or change may create unintended tax consequences, cut someone out of receiving an inheritance, or worse yet, set into motion a lengthy court battle that harms family relationships. Reviewing your estate planning documents ensures that your desired changes will address your new need without negatively impacting your overall intentions. If you’d like to discuss how we can help, please contact our office at 989-495-2555 .

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