Estate Planning and Trusts Blog

What is an ABLE Account?

In this video, Cindy explains what an ABLE Account is and how it may help your disabled loved ones.

Other articles/videos you may find interesting:

Administering a Special Needs Trust

Naming a Family Member as Successor Trustee: Pros & Cons

***Want to learn more about how to protect your family from the government, lawsuits, accidental disinheritance, or nursing homes? Click THIS LINK to book a seat at one of our upcoming fun and educational workshops.***

Unique Veterans Benefits in Your State – 2020

Veterans benefits
Okay, so maybe this doesn’t have much to do with veterans benefits, but I love the statue and he is a veteran. 🙂

I’m a U.S. veteran and so is my husband and two of our children. We have lots of veteran friends and I have a very large number of veteran clients. But I’m constantly surprised at the sheer number and variety of benefits available to veterans – if they know to look for them.

I won’t pretend to know all the benefits provided to Florida veterans, but if you’re interested in learning more for yourself or a loved one, start with this article in which each state mentions their newest or most unique veteran benefit. Then just keep following the links you find in each article to discover more and more…

Other articles you may find interesting:

Will my Illinois Will Work When I Move to Florida?

Simple Safety Tips for Seniors

Would you like to learn more about estate planning, elder law, asset protection planning, probate, and Medicaid planning in an informal, no-obligation setting?

Sign up for one of our free, educational workshops here.

What Happens When a Beneficiary Form Doesn’t Match the Will or Trust?

beneficiary form
Your beneficiary designation forms may booby-trap your estate plan.

What happens when a beneficiary form – whether it’s on a TOD account, an IRA, life insurance, or an annuity – is different from what Mom or Dad wrote in their Will or Revocable Living Trust? Unfortunately, this often isn’t discovered until after Mom or Dad is dead. As this article mentions, generally, what’s on the beneficiary designation form trumps the Will or Trust, even if that wasn’t the intention.

I often hear Mom say “I just put my oldest daughter on my bank/investment account as a beneficiary because I know she’ll split it with the other kids.” Bad juju there. Maybe she would, but as soon as Mom’s dead, that money is legally 100% hers. She could buy a new house, put in a pool, travel to Italy and there’s nothing her siblings could do about it. Maybe she’s incapacitated and her husband is now controlling all of her assets as the Agent on her Durable Power of Attorney and he decides to (legally) use the money to buy a new car, fix the house, etc. Bye, bye inheritance. Or, she’s hit with divorce papers shortly after Mom dies. Oops, if she deposited that money into their joint bank account, it’s now a marital asset that will subject to the divorce.

Beneficiary forms should be used very carefully and reviewed every couple of years because each institution’s rules about what happens if one of those named beneficiaries dies before inheriting is different. Never assume anything. And meet with an estate planning attorney to make sure you have an actual plan, not just a bunch of random documents that may work at cross purposes to each other.

Other articles you may find interesting:

What’s the Difference? Living Will, Health Care Surrogate, DNR

Can Medicaid Take Your Home?

Would you like to learn more about estate planning, elder law, asset protection planning, probate, and Medicaid planning in an informal, no-obligation setting?

Sign up for one of our free, educational workshops here.

Bad Things Happen to Young People, Too

In this video, Cindy discusses why younger people should be sure to have all the legal documents necessary to protect themselves and their loved ones in case something awful happens.

Other articles/videos you may find interesting:

4 Myths About Wills

Naming a Family Member as Successor Trustee: Pros & Cons

***Want to learn more about how to protect your family from the government, lawsuits, accidental disinheritance, or nursing homes? Click THIS LINK to book a seat at one of our upcoming fun and educational workshops.***

Why is This Probate Taking So Long?

Probate
There are many reasons a probate can take 9-24 months from start to finish.

After a loved one dies, her money and property must be distributed to the right people, either according to her Will or the state’s default distribution scheme (found in its “intestacy” statute). While most people want the settlement process to be done ASAP, probate can take between 9 and 24 months. Yes, you heard that right. The time delays create unnecessary stress, especially for families who need access to those accounts or property.

5 Reasons Probate Takes So Long

There are many reasons why the probate process takes so long. Here are five of the most common:
  1. Paperwork. Managing probate-required paperwork can be a monumental undertaking with structured timelines and court-imposed deadlines.
  2. Complexity. Estates with numerous or complicated accounts or property simply take longer to probate, as there are more items to be accounted for and valued.
  3. Probate court caseload. Most probate courts were dealing with high caseloads and limited staff before COVID-19, and it’s worse now.
  4. Challenges to the Will. Heirs, beneficiaries, and those who thought they’d be beneficiaries, can object to and challenge the Will’s instructions and legal requirements. While state law dictates the length of the time period during which they must object, Will challenges can add years to the probate process. Some of the most common challenges include assertions that the Will maker was:
    • Lacking testamentary capacity (i.e., lacking the legal or mental ability to make a Will)
    • Delusional
    • Subject to undue influence (wrongful pressure to do something they didn’t want to do)
    • A victim of fraud
  5. Creditor Notification. The deceased person’s creditors must be notified of the deceased person’s passing and the probating of her estate so they have time to submit any legal claims for debts. This time period also varies from state to state, but it is generally four to nine months (three months in Florida). The bottom line is that, while most state probate laws are designed to keep the process moving along in a timely manner, that’s more of a plan than a reality.

Simply Put, Avoiding Probate with a Trust Is Better

Simply put, had the deceased person created a trust to hold her accounts and property, the long, complicated probate process could have been avoided. By creating and funding a trust, those accounts and property would no longer be viewed as being owned by the deceased person and would not be subject to the supervision of the court. Their distribution would be controlled by the instructions left in the trust agreement. Administering a trust instead of a probate is usually quicker –meaning that beneficiaries receive assets more quickly, costs are reduced, and stress levels are kept to a minimum.

Take Action Now

First, if you need help settling a probate estate, we can help you move the process along and remove some of the burden so you can move on with your life. Second, we can help you make sure you never burden your loved ones the way you’ve been burdened. How? We’ll show you how to avoid probate with a trust. Give us a call today. As an added convenience to our clients, we’re able to meet via phone or video conferencing, if you prefer.

Other articles you may find interesting:

9-Step Guide for a Personal Representative

To Probate or Not to Probate?

Would you like to learn more about estate planning, elder law, asset protection planning, probate, and Medicaid planning in an informal, no-obligation setting?

Sign up for one of our free, educational workshops here.

Want Prison Time? Make an NFA Firearm Without ATF Approval

Prison due to NFA firearms violation
Choosing not to follow NFA firearms laws will change your residence, reduce your clothing options, and remove your gun rights.

I came across this article the other day that combined Florida and federal firearms laws, and it brought to mind all the people who ask me some version of, “If I convert my semi-automatic AR-15 into a fully-automatic machine gun, how’s the ATF ever going to know?”

Well, that’s the nature of breaking the law, isn’t it? “If I kill this person/rob this bank/lie on this federal form, how will anyone ever know?” Each person does a cost-benefit analysis every day when it comes to breaking the law – do the rewards outweigh the potential risks to me? You may decide that speeding is worth the potential ticket risk, but you may draw the line at stealing an Xbox.

This kid, who lived in a dorm on a college campus, said he “didn’t like laws” so he decided not to follow them. He used a drop-in auto sear (DIAS) to turn his AR-15 into an unregistered machine gun (yes, federal law requires that certain so-called “dangerous” firearms be registered with the ATF). He also had 2 other DIAS’s in his possession when he was caught. Federal law says that if you have a DIAS in your possession and you also have a gun that can accept that DIAS, and you didn’t follow the law about registering that gun with the ATF, you have illegal constructive possession of a NFA firearm.

The person who wrote the article is obviously clueless about gun laws (or is just a bad writer), because a casual reader would think this kid is going to prison for having a gun on a college campus. A scary machine gun, no less! Nope. The prohibition about guns on a college campuses is just a state law (second degree misdemeanor, $500 fine, 60 days in jail, no loss of gun rights) but, if you read the article carefully, you’ll see he was arrested by the feds. Violating the National Firearms Act is a federal felony, punishable by 10 years in prison, very large fines, and complete loss of gun rights.

So, how did they find out? Someone tipped off the campus police. Someone will ALWAYS turn you over to the authorities if they know you’re breaking the law and they can use this ammo against you for their convenience or benefit. Was it a jilted girlfriend? A friend who didn’t share his views about guns or the law? Who knows. I’m not defending this guy breaking the law – I’m merely pointing out that when you do choose to break the law, someone will find out at some point.

Play stupid games, win stupid prizes.

Other articles you may find interesting:

What is a Title II or NFA firearm?

Medical Marijuana and Gun Laws: One Toke Over the Line

Would you like to learn more about estate planning, elder law, asset protection planning, probate, and Medicaid planning in an informal, no-obligation setting?

Sign up for one of our free, educational workshops here.

Naming a Family Member as Successor Trustee: Pros & Cons
Be thoughtful when choosing successor trustees for your living trust.

Naming a Family Member as Successor Trustee: Pros & Cons

In this video, Cindy discusses the pros and cons of naming a family member, such as an adult child, as your successor trustee of your revocable living trust.

Other articles/videos you may find interesting:

Don’t Give Your House to Your Kids

Gun Trusts Gone Bad

***Want to learn more about how to protect your family from the government, lawsuits, accidental disinheritance, or nursing homes? Click THIS LINK to book a seat at one of our upcoming fun and educational workshops.***

Administering a Special Needs Trust

Administering a special needs trust isn't for the faint of heart or the disorganized.
Administering a special needs trust isn’t for the faint of heart or the disorganized.

So, you’ve been asked to be the Trustee of a family member’s special needs trust (SNT). Of course, you said yes. But do you really have any idea what your responsibilities will be?

Acting as a trustee of a plain vanilla revocable living trust is pretty easy – you handle bank and investment accounts, sell real estate, and distribute income property to the people named in the document just as you would do in your normal life. There are no special rules or taxes you have to worry about.

But when you’re the trustee of a special needs trust, you have complete responsibility to know Social Security laws inside and out, and you could be held legally and financially responsible if you make a distribution that causes the beneficiary to be kicked off a needs-based government program, such as Medicaid or SSI. If the beneficiary’s medications, without Medicaid, cost $30,000/month, even losing one month of coverage could be financially devastating.

So, are you wondering what you, as a SNT Trustee, can and can’t do? Well, as Trustee, you must control every single cent in the SNT. You mustn’t give the beneficiary of the SNT any money to make purchases for him or herself. Payments for goods and services should be made by you directly to the vendor or provider. A non-refundable, prepaid gift card is permitted as it allows the beneficiary the right to obtain goods or services. In keeping with this principle, a non-refundable airline ticket, or a non-refundable ticket to a show or sporting event would also be permitted. You, as Trustee, may purchase a specific service for the beneficiary, since the service is not easily convertible to cash. For example, payment for any special therapy or training is acceptable.

But an SSI and/or Medicaid recipient may use funds in the SNT to pay for household emergencies such as the repair of a roof or payment of a telephone bill. The Trustee should purchase any household goods or items in the name of the trust and not in the name of the beneficiary. This avoids the possibility that the beneficiary could have control over the goods or items; the appearance of such control could result in a loss of benefits. If a beneficiary receives ownership or control of an asset as the result of the Trustee paying the bill for said asset, this could be deemed as income to the beneficiary, which may disqualify him or her from benefits in the months received.

Here are some types of purchases that can be made by the Trustee of an SNT for the beneficiary and how they would affect the beneficiary’s eligibility for Medicaid and/or SSI:

(a) The purchase of a home, by the Trustee of the SNT, for the beneficiary will not affect his or her benefits if the title to the house is held in the name of the trust. The house will not be deemed a resource of the beneficiary, and would not affect his or her eligibility for benefits. The beneficiary is treated as if he or she is residing in his or her home, and not deemed to be receiving shelter, which would impact eligibility for benefits.

Payments made by the Trustee for the expenses associated with the real property, such as taxes, rent, heat, gas, water, electricity, mortgage, garbage removal and sewer would affect the beneficiary’s eligibility for benefits as they would be considered income to the beneficiary. So, the beneficiary should be able to afford those expenses with his or her other income; consider that when purchasing a home. However, home improvements or renovations are not considered income, and would not affect the beneficiary’s eligibility for benefits;

(b) The Trustee’s purchase of cable TV or satellite TV services, cell or home telephone service, internet service, newspaper and other news related magazines and periodicals will not impact the beneficiary’s eligibility for benefits. The Trustees purchase of computers, computer software and any upgrades for the computer are also permissible expenditures;

(c) The purchase of an automobile for the beneficiary of the SNT will not impact his or her eligibility for benefits.  Additionally, the expenses for the automobile insurance, maintenance and fuel are permitted. However, the purchase of fuel for the automobile can be problematic depending on how payment of the fuel is made. It is recommended that Trustee open a gas company credit card in the name of the SNT that can only be used by the beneficiary for gas purchases;

(d) The Trustee can make unlimited expenditures for the travel and entertainment expenses of the beneficiary. If the beneficiary is unable to travel alone, distributions from the SNT for a travel companion are permitted. However, the payment of a beneficiary’s hotel expenses can be problematic as the argument could be made that they are shelter expenses. However, the argument can be countered if the beneficiary maintains a home;

(e) Household furnishings and furniture, and personal effects can be purchased by the trust; there is no bright-line limit. If the beneficiary wants leather furniture, a 110″ Ultra HDTV, and a surround sound system, the Trustee can purchase those;

(f) Pre-Paid funeral and burial arrangements can be owned by the trust for the benefit of the beneficiary. The arrangements should not be owned by the beneficiary as it could impact SSI benefits;

(g) Legal and Accounting Fees can be paid by the Trustee without impacting the beneficiary’s eligibility for benefits;

(h) The Trustee can purchase clothing for the beneficiary without effecting the beneficiary’s eligibility for benefits. Again, there’s no monetary limit – clothing can be purchased at Goodwill or Saks Fifth Avenue;

(i) The Trustee, without any limitations, can purchase and make payment of durable medical equipment, therapy, medication, alternative treatments, tuition, books, tutoring, and care management – as long as no government program would provide those particular things.

(j) The Trustee can pay the beneficiary’s taxes.

This is NOT a detailed and all-inclusive list; the Trustee is completely responsible for researching Social Security rules and/or hiring professionals or a corporate co-trustee to make sure all the t’s are crossed and i’s dotted. But this should provide you with a better understanding of what the Trustee of a SNT is generally permitted and not permitted to do without affecting the beneficiary’s eligibility for Medicaid and/or SSI as part of the day to day administrator of a SNT.

Being the Trustee of a SNT is a challenging and complicated task; be sure you’re up to it before you agree to serve. If this isn’t for you, make sure the person naming you knows now so he or she can appoint another family member or, better yet, a corporate trustee that handles these SNTs all the time.

Other articles you may find interesting:

Tax Implications of a Medicaid Personal Service Contract

Should I Use a Bank as My Executor Instead of a Family Member?

Would you like to learn more about estate planning, elder law, asset protection planning, probate, and Medicaid planning in an informal, no-obligation setting?

Sign up for one of our free, educational workshops here.