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A spendthrift trust is typically used to prevent a beneficiary from receiving his or her inheritance all at once. There are several reasons why a grantor (the person who creates the trust) might want to consider such an approach. The most obvious reason is that the grantor believes the beneficiary will quickly squander the inheritance. That is, the beneficiary is a spendthrift.Other reasons to consider a spendthrift trust include:The beneficiary (or the beneficiarys spouse) has many debts and, consequently, the inheritance could be lost to creditorsThe beneficiarys marriage is troubled and seems likely to end in divorceThe beneficiarys friends are spendthrifts (or worse) and have undue influence over the beneficiarys behaviorThe beneficiary is simply not good with moneyThe beneficiary suffers from alcohol or drug addictionHow does a spendthrift trust protect the beneficiarys inheritance in situations like these? First, the beneficiary cannot access the assets in the trust, or promise them to someone else. Thus, creditors and other threats cannot reach the trusts assets either. In addition, since the beneficiarys inheritance can be distributed in specified amounts over time, the entire inheritance cannot be lost all at once. Of course, the portion that is distributed would be vulnerable unless other protective measures are taken.The Role of the TrusteeIt is crucial to choose ones trustee carefully because the terms of the trust give the trustee control over trust assets and their distribution to the beneficiary. Similarly, it is extremely important to outline the trustees authority in detail. Here are some examples of factors to consider when setting the terms of the spendthrift trust:Should the trustee be instructed to make fixed payments according to a specified schedule, or does the trustee have some discretion to choose the amount and timing of distributions?Should the trustee make distributions in cash or provide the beneficiary with goods and services instead?Can the trustee withhold distributions if the beneficiary behaves inappropriately? If so, what types of behavior would trigger the withholding of assets?Given the importance of the trustees role in administering the trust and managing the beneficiarys inheritance, the choice of trustee should not be taken lightly. The decision to serve as trustee should not be taken lightly either. In certain situations, the trustee could very well be performing the role of mentor, or disciplinarian, or even parent. In addition, the trustee can be held legally and financially responsible for failing to follow the mandates of the trust.Other factors to consider when creating a spendthrift trust include how and when the trust will end, what will happen if the beneficiary grows up and develops the maturity to manage the inheritance, and what should be done with trust assets if the beneficiary passes away.If you want to leave a loved one an inheritance but are concerned about his or her ability to manage it, we can help you determine whether a spendthrift trust is a good solution.
For more information on Safe Harbor Law Firm, Click Here.For the vast majority of people considering retirement, one question looms above all others: Have I saved enough to make the dream of retirement a reality? Tough question, given that it is impossible to predict how long we will live and what future costs we might incur (particularly with regard to health care).An article in U.S. News & World Report provided the following strategies for retirees to cut monthly expenses and make their life savings last longer.Pay off your mortgageEliminating monthly mortgage payments is of the best ways to make retirement more affordable. While you will still have to pay taxes and maintenance costs on your home, these expenses are most likely a fraction of your mortgage payments.Downsize your homeWhen your children have moved out and become independent, do you really need that house with several bedrooms in a community with good schools and large yards? Downsizing to a smaller home in a less expensive community can go a long way to increasing your nest egg and lowering your monthly expensesSell one of your vehiclesWhen you and/or your spouse commuted to work every day, each of you probably needed his or her own car. In retirement, you may find this is no longer the case. By selling one of your vehicles, you eliminate the insurance, maintenance and fuel costs associated with it. If you live in or move to a community with excellent public transportation, you might not even need a car at all.Cut your tax billWhile you will need to pay taxes on withdrawals from individual retirement accounts and a 401(k), thoughtfully spacing out your withdrawals can help avoid a large tax bill at years end. Prepaying income tax on retirement savings by using a Roth 401(k) or Roth IRA can reduce your tax liability as well.Avoid high investment feesMany mutual funds and other investments charge high fees. For retirees living primarily off of income from their portfolios, minimizing investment costs is particularly important. Investing in lower-cost funds that meet your objectives means more money in your pocket.Avoid penaltiesWithdrawing money from your retirement account too soon or too late can lead to substantial penalties. In addition, taking Social Security payments as soon as you can reduces your benefits in the long run. You will also be penalized for late enrollment in Medicare Parts B and D.Minimize health care costsWhile none of us can predict our future health care needs, there are some ways to control costs. For example, you could purchase a supplemental policy to Medicare to cover cost-sharing requirements associated with traditional Medicare. Shopping for a new Medicare Part D plan annually can ensure you are getting coverage for medications at the best possible price.Take advantage of senior discountsSenior discounts at restaurants, movies and museums are highly publicized and widely known. Others are not. Don't be afraid to ask for a senior discount.
Prices are soaring. Many peoples monthly bills are increasing faster than the cost of living adjustment. Unfortunately prescription drugs have not been spared in the price increases, and people are having to choose which of their necessary medications they are going to have to give up. Fortunately, some help is on the way - Medicare Part D is an optional plan offered to anyone who qualifies for Medicare, and covers prescription drug charges. There have been many changes to Medicare Part D in 2023, including more vaccines being covered with no out-of-pocket cost to the recipient; lowered or fixed insulin prices; and the creation of the new Extra Help program. The Extra Help program is for low-income individuals (less than $21,870 per year for a single person or $29,580 for a married couple living together) who also have limited resources ($16,660 for a single person or $33,240 for a married couple). If you qualify for Medicaid, Social Security Income, or a Medicare Savings Plan, you automatically qualify for the Part D Extra Help program. Extra Help offers full or partial benefits to the recipient. Starting in January 2024, a further expansion to the Extra Help program will allow an even wider range of seniors to enroll. Currently, the applicants household income must be less than 135% of the federal poverty level. The 2024 change will expand it to more potential recipients by raising that amount to 150% of the federal poverty level. According to the Centers for Medicare and Medicaid Services, this change is expected to benefit more than 300,000 current enrollees who are only receiving partial benefits, who will now be eligible to receive full benefits under the program. There are even more changes coming in 2025 and beyond. According to the Department of Health and Human Services, up to three million seniors could benefit from this Extra Help program, but are not currently enrolled.
One of the first questions many clients ask is whether they need a trust. Its a great question, but it leads to another: What do you want your plan to accomplish? Lets begin with a brief discussion of what trusts are and how they work. Then well explore their benefits, which should give you a better idea of whether a trust is right for you and your family.What is a Revocable Living Trust?There are many different types of trusts and they can accomplish a wide range of goals. However, when most people think about trusts, the one they have in mind is a Revocable Living Trust.A Revocable Living Trust is a legal document that allows the grantor (the person who creates the trust) to take personal assets and transfer them to the ownership of the trust. While the trust technically owns the assets, the grantor can continue to use them as he or she normally would.When a Revocable Living Trust is established, the grantor names a trustee to manage the assets in the trust during the grantors lifetime. Most grantors name themselves as trustee, giving them complete control over the trusts assets. Typically, a successor trustee is also named to take over management of the trust and distribute trust assets after the grantor passes away.What are the benefits of a Revocable Living Trust?One of the primary benefits of a Revocable Living Trust is that it enables assets held in the trust to avoid probate after the grantors death. This allows trust assets to be distributed to heirs quickly. The costs associated with probating the estate are also avoided. In addition, a Revocable Living Trust protects the privacy of the grantor (and beneficiaries) because the trusts provisions are confidential. A Last Will and Testament, on the other hand, is a matter of public record. Anyone can access information about the decedents assets, creditors, debts, and more.Another benefit of Revocable Living Trusts is they not only allow the grantor to control trust assets during life but also after he or she passes away. The grantor can stipulate when, how, and under what circumstances the successor trustee is authorized to distribute trust assets to beneficiaries. This is particularly important if the beneficiaries are not yet mature enough to manage an inheritance on their own, or in situations involving blended families. For example, the grantor could stipulate that children from a first marriage receive assets from the trust, not just the children from a more recent marriage.Revocable Living Trusts can also be used to protect the grantor and the grantors family from a stressful and expensive guardianship proceeding if the grantor becomes incapacitated.As we mentioned earlier, there are many different types of trusts. If one of your primary goals is to protect assets from long-term care costs, creditors, lawsuits, and other threats, an Irrevocable Trust or an Asset Protection Trust may be a much better option then a Revocable Living Trust. If you have a loved one with special needs, a Special Needs Trust can allow you to create a fund for goods and services not provided by Medicaid or Supplemental Security Income while protecting eligibility for these vital programs. A Charitable Trust allows the grantor to set aside money for both a charity and beneficiaries, realize certain tax advantages, and generate an income stream.These are but a few examples of various trusts and what they can accomplish. If youre still not sure whether you need a trust, we welcome the opportunity to explain your options in detail and, if appropriate in your particular circumstances, design and implement the trust thats right for you and your family.
For more information on the author Safe Harbor Law Firm, CLICK HERE.This is the question asked by many snowbirds: Why should I establish Florida residency? Well, there are many reasons people make this choice every year, but it does depend on each individuals situation. Apart from the beautiful Florida weather, Florida has many benefits.Florida has no personal state income tax and no estate tax! Each year, you could be saving thousands of dollars. In addition, Florida has a great deal of creditor protection available. Florida homestead is just one of the many tax and creditor benefits in Florida. Additionally, property such as cash value life insurance and assets held by a business entity can be protected against creditors.If you decide to take the leap and become a Florida resident, you should ensure you take significant steps to establish your new domicile. Those may include filing a declaration of domicile, getting a Florida Drivers License, registering your vehicle in Florida, registering to vote in Florida, notifying tax authorities that you have moved to Florida, applying for the Homestead Exemption in Florida, and updating your estate planning documents to reflect Florida residency.
Approximately 53 million Americans provide unpaid care to another adult, and providing adequate care to a loved one requires over 24 hours per week on average, according to the Caregiving in the U.S. 2020 Report by the National Alliance for Caregivers and AARP. However, caregivers often devote so much time and energy to caring for a loved one that they neglect to take adequate care of themselves. This has become so prevalent that caregiver burnout is now a common term. Caregiver burnout is characterized by physical, emotional, and mental exhaustion that may be accompanied by a change in attitude from positive and caring to negative and unconcerned. Many caregivers even feel guilty if they spend time on themselves rather than on caring for their elderly or ill loved one.If you are a caregiver in your family, you need to recognize the difficulty of what you are undertaking and be aware of the signs that you may be trying to do too much. Ask yourself the following questions to determine if you are approaching burnout:Are you exhausted even after a full nights sleep?Do you seem to catch an unusually large number of colds?Do you feel like your whole life revolves around caregiving, but you dont get any satisfaction from it?Are you always tense or feel like youve lost the ability to simply relax?Are you increasingly impatient with the person in your care?Have you lost interest in activities you once enjoyed?Do you have anxiety about the future?Do you often feel helpless, sometimes even hopeless?If you answered yes to some of these questions and you didnt feel this way until you began serving as a caregiver, you may be approaching burnout. You need to start caring for yourself.First, understand that what you are feeling is not unusual. Caregiver burnout is much more common than you might think. This should come as no surprise given the number of Americans serving as caregivers and the amount of time and energy required to provide adequate care.Here are some steps you can take if you believe you might be suffering from caregiver burnout:Learn as much as you can about your loved ones illness and how to care for it.Recognize your limits and take a more realistic approach to how much time and effort you can give your loved one. Be sure to express those limits to doctors and other family members.Learn to accept how you feel about the responsibilities of being a caregiver, including emotions such as anger, fear, resentment, guilt, helplessness, and grief.Talk to people about your feelings. Confiding in friends and family members can provide a sense of relief and help you overcome feelings of isolation.Ask for help! Needing help doesnt mean you are a bad caregiver. It just means that you cant do it alone and that its completely okay.This last step is particularly important. You are not alone, and support is available from people who understand what you are going through and can help you cope with the stress. You need to do whatever it takes to avoid a sense of isolation. You can find support groups within the community, online, through your physician, and from organizations associated with the health problem of the loved one under your care. Your local chapter of AARP, as well as agencies such as Family Caregiver Alliance, are good places to start seeking help.
When it comes to estate planning, one of the most important decisions you'll make is choosing the individuals who will help you manage your affairs when you either lose capacity or pass away. These individuals, often referred to as your agents, "personal representatives" and/or "executors," will play a crucial role in ensuring that your wishes are carried out and your assets are distributed according to your plan.Choose Someone You TrustThe most important factor in choosing your personal representatives is trust. These individuals will have access to your financial accounts, personal information, and legal documents, so it's crucial that you trust them to act in your best interests, in accordance with your wishes. Consider family members, close friends, or trusted business associates who have a history of being responsible and reliable.Consider Experience and KnowledgeEstate planning can be complex, and it's helpful to choose individuals who have some level of experience and knowledge in financial matters, legal issues, or both. This will help ensure that they can effectively manage your affairs and make informed decisions on your behalf.Multiple RepresentativesThere are pros and cons to appointing multiple representatives. Depending on the complexity of your estate, you may want to appoint multiple agents. For example, you could choose one individual who is knowledgeable about financial matters and another who is familiar with your personal wishes. This can provide a checks and balances system and ensure that your estate is managed effectively. However, more people makes it more likely that disagreements could take place. Also, coordinating multiple schedules sometimes makes the process move a bit slower. This is something you should discuss with your estate planning attorney, to determine which path is best for your plan.Communicate Your DecisionIt's important to communicate your decision to your chosen personal representatives and let them know where they can find your estate planning documents, and which professionals to contact upon your incapacity or death. This will ensure that they are prepared to step in and assist you when needed.Consider a Professional FiduciaryIf you are unable to find someone you trust or if your estate is particularly complex, you may want to consider appointing a professional fiduciary, such as a trust company, bank, or attorney. Professional fiduciaries are trained and experienced in managing estates and can provide a high level of expertise and neutrality. The downside to this option is that they may charge extra fees to serve as a professional in this role.Update Your Estate Plan RegularlyYour life circumstances change over time, and so do the life circumstances for your agents! Your estate plan should mimic that. Review your plan regularly and update it as needed to ensure that your personal representatives are still the right individuals for the job.Choosing the right people to help with your estate plan is a critical part of ensuring that your wishes are carried out smoothly and efficiently. Take the time to consider your options, communicate your decisions, and regularly review your plan to ensure that your estate is in good hands.
In America today, an estimated 40 million individuals selflessly dedicate their time to providing unpaid care for a loved one. This statistic, reported by the National Alliance for Caregivers and AARP, underscores the enormous commitment caregivers make on a day-to-day basis. Often, these devoted individuals spend over 44 hours per week caring for a spouse or partner, a commitment that can take a significant toll on their own wellbeing.This total immersion in caregiving responsibilities often leads to a state known as caregiver burnout, a condition defined by physical, emotional, and mental exhaustion. This exhaustion is often accompanied by a drastic shift in attitude, transforming from a positive, caring demeanor to a negative and indifferent one. Many caregivers become so engrossed in their roles that they feel guilty for spending time addressing their own needs, instead of focusing solely on their elderly or ill loved ones.Recognizing Caregiver Burnout: The Role of an Elder Law AttorneyAs elder law attorneys, we are intimately familiar with the complexities and challenges caregivers face. We believe its crucial for caregivers to recognize the warning signs of burnout, in order to maintain their own health and continue to provide quality care to their loved ones.Ask yourself the following questions:Are you exhausted even after a full nights sleep? Do you seem to catch an unusually large number of colds? Do you feel like your whole life revolves around caregiving but you dont get any satisfaction from it? Are you always tense or feel like youve lost the ability to simply relax? Are you increasingly impatient with the person in your care? Do you often feel helpless, sometimes even hopeless? If youve found yourself answering yes to some or all of these questions, and these feelings have developed since you took on your caregiving role, its possible you are experiencing caregiver burnout.Prioritizing Self-Care: The First Step towards RecoveryRecognizing the signs of burnout is the first step. The next step is taking action to care for yourself. At Safe Harbor Law Firm, our team of experienced elder law attorneys is ready to provide empathetic, professional support during this challenging time.Our approach is both professional and personable, ensuring that we fully understand your unique situation and can provide the most effective guidance. We value your dedication to caregiving and want to ensure you have the necessary resources to care for both your loved one and yourself.Reach Out Today: Let Us Help You Navigate Caregiver BurnoutDont let caregiver burnout control your life. Reach out to us today and lets start the journey towards better self-care together. With our expertise and your dedication, we can navigate through this challenging time and find a path that ensures both you and your loved one receive the care you need.
Approximately 50% of all Americans who reside in nursing homes receive assistance from Medicaid to pay for their care. This is not surprising, given the extraordinarily high cost of long-term care. The real surprise is that half of all Americans dont seek Medicaid assistance to cover nursing home costs. Why not?Perhaps the biggest reason is the preponderance of misinformation about Medicaid, the cost of long-term care, and how to pay for it. Here are just a few examples of the myths surrounding the use of Medicaid to pay for nursing home care:The healthy spouse will be kicked out of the family home when the spouse requiring care moves to a nursing homeThe government will take all of the familys assetsYoull have to live in an old, dilapidated facilityYoull receive inadequate care, or no care at allMyths like these often come from well-meaning family members, friends, and neighbors. While none of them are true, many people believe that they are.Sometimes misinformation is spread by people we assume to be knowledgeable about the subjectnursing home intake staff, caregivers, physicians, nurses, and social workers. They might tell you, for instance, that you are too wealthy to receive assistance from Medicaid. Or that once you have moved to a nursing home its too late to obtain Medicaid assistance to pay for your care. Again, these folks mean well, but their information is often outdated or simply inaccurate. The fact is Medicaid planning is complicated and the rules governing eligibility for various programs are constantly changing. Even attorneys who do not focus on this area of the law may be a source of inaccurate information.Dont let misinformation prevent you from getting the financial assistance you need. Speak to an attorney with extensive experience in helping families obtain Medicaid assistance to pay for nursing home care.
Did you know that in the United States, the median monthly cost of a semi-private room in a nursing home is currently more than $7,900? And the cost of a private room exceeds $9,000 per month! Plus, depending on where you live, costs can even be considerably higher.Making matters worse, costs rise according to the level of care needed and they are expected to continue increasing dramatically in the future. (You can see the current costs for home care, adult day care, assisted living, and nursing home care in your area by visiting https://www.genworth.com/aging-and-you/finances/cost-of-care.html.)Despite the exorbitant costs of long-term care, nearly 70 percent of those over the age of 65 will require long-term care at some point in their lives, and 20 percent will need long-term care for five years or more. Given this, its easy to see why many families exhaust their life savings within a few years of a family member entering a nursing home, and why more than half of all nursing home stays are now funded by Medicaid.But planning for your loved ones future care isnt always easy. If they have already moved into a nursing home, or must enter one in the very near future, and you have been informed that they own too many assets to qualify for assistance from Medicaid then your family is in a Medicaid Crisis situation.Such a situation is indeed a financial crisis for all but the wealthiest families. If you or a loved one is facing a Medicaid Crisis, try to remain calm. Much of the information we hear about Medicaid from friends, relatives, nursing home staff, caregivers, and many others is outdated or incorrect.There is hope! A qualified elder law attorney can help you by assessing your unique case, strategizing the options that are best for you and your family, and obtaining assistance from Medicaid. It is possible to get Medicaid assistance even if you are already in a nursing home or will need to enter one next month, next week, or even tomorrow. Even if you have applied for Medicaid assistance in the past but were rejected, it is entirely possible that a qualified elder law attorney can still obtain the financial assistance you need.Youve worked too hard to lose your life savings to the nursing home. Let an experienced elder law attorney help you secure the financial assistance you need and deserve.
Both Medicare and Medicaid can assist you with your individual long-term care plan. While the two programs sound similar, there are important differences to consider.Lets start with a brief definition of each program. First, its true, both programs provide medical care. However, Medicare is an entitlement program; meaning that everyone who reaches the age of 65 and is eligible to receive benefits from Social Security can also receive Medicare. In contrast, Medicaid is a public assistance program, meaning it is designed to help people with limited income and assets to pay for medical care. Recipients of Medicaid assistance must meet certain income and asset eligibility guidelines.Now, lets look at some of the fundamental differences between the programs.Who Runs Each Program?Medicare is completely run by the federal government, whereas Medicaid is run as a joint, federal-state program. A few states use different names for their Medicaid programs. For example, Medi-Cal in California and MassHealth in Massachusetts.Typically, the federal government pays for approximately one-half of a states Medicaid Program, with the state paying the balance. The eligibility rules will differ from one state to the next. However, in order for the state to receive money from the federal government, the program must adhere to certain federal guidelines.Long-term Care CoverageMedicare, by and large, does not cover long-term nursing home care. For example, Medicare Part A will only cover up to 100 days in a skilled nursing facility for a particular illness, and only after the patient has spent at least three days in a hospital. And, from day 21 to day 100, the individual at the skilled nursing facility must make a copayment of $167.50 per day. Few people actually receive Medicare coverage for the full 100 days, in part because of the copay, and in part, because restrictions and conditions for coverage are quite stringent.In contrast, Medicaid covers long-term nursing home care for people who meet its income and asset limits. It does not matter whether you need assistance for one hundred days, one year, or five yearsMedicaid will pay for the care as long as the recipient is eligible. Given the high cost of nursing home care, the dearth of affordable alternatives, and the restrictions inherent in Medicare coverage, Medicaid is now the single largest payer of nursing home stays in the United States.Do I Qualify For Medicaid?If your income and assets are less than your states guidelines, you are already eligible for assistance. However, if your income and assets exceed state limits, you will have to take the appropriate steps to become eligible. An experienced elder law attorney will be able to determine the best way for you to secure your Medicaid benefits.But be careful! Being eligible is not as simple as giving your stuff away a few weeks before entering a nursing home, expecting Medicaid to pay for your stay. Instead, when you apply for Medicaid, any gifts or transfers of assets made within five years of the date of application will be subject to penalties that delay your benefits. This is known as the look-back period, and the penalty period is determined by dividing the amount transferred by what Medicaid determines to be the average private pay cost of a nursing home in your state. A skilled elder law attorney will be able to guide you through the planning and application process so you can receive your Medicaid assistance as expeditiously as possible.In short, while Medicare can help you afford a short-term stay in a nursing home, Medicaid will be able to pay for your long-term care, if you are eligible. Through early and proper planning, you can obtain assistance from Medicaid to pay for your nursing home care and protect your hard-earned assets in the process.
An I Love You Will is a last will and testament in which the testatorthe person who makes the willleaves everything to his or her spouse. If you have thought about making a will in the past, you likely considered this approach. Perhaps you have already created such a will.While an I Love You Will may be appropriate for certain situations, there are several potential problems you should take into account. First, it could unintentionally disinherit your children. How? Think about what would happen if you passed away and your spouse, who has inherited your assets through the I Love You Will, remarries and creates the same type of will. If your spouse passes away before his or her new spouse, the new spouse would inherit these assets. That is, your children might receive nothing.Of course, an I Love You Will shares the limitations of basic wills in general. For example, if the surviving spouse develops Alzheimers disease or another form of dementia, and no advance directives were created, estate assets may fall under the jurisdiction of a guardianship or conservatorship court. In that case, your wishes and those of your surviving spouse may be thwarted.An I Love You Will also ensures your estate will have to go through probate. The probate process can take several months (or considerably longer) to complete. During the probate process, your spouse may be unable to access estate assets, which could make it difficult to pay expenses such as a mortgage, homeowners insurance, property taxes, automobile loans, credit card bills, and more. In addition, probate is a public process, meaning anyone can discover information about your assets and debts that you would have wanted to remain private. Finally, the costs associated with probating an estate can be significant.An I Love You Will may sound like a good idea, but to ensure your wishes are carried out and your assets are distributed efficiently to your loved ones, you may want to consider a trust-based estate plan. We invite you to contact us at your earliest convenience to discuss your options.
For more information on the author Safe Harbor Law Firm, CLICK HERE.Many people are confused about the difference between a living will and a healthcare power of attorney. A living will specifies life prolonging treatments you do or do not want in the event you either suffer from a terminal illness or are in a permanent vegetative state. It does not become effective unless you are incapacitated and, generally, requires certification by your doctor, and another doctor, that you are either suffering from a terminal illness or have been rendered permanently unconscious. So if you suffer a heart attack, for instance, but do not have a terminal illness or are not in a permanent state of unconsciousness, a living will does not have any effect. You would still be resuscitated, even if you had a living will indicating that you don't want life prolonging procedures. A living will is only used when your ultimate recovery is hopeless.For situations where you are incapacitated and unable to speak for yourself, but your condition is not dire enough to make your living will effective, you should have a health care power of attorney or health care proxy. A health care power of attorney is a legal document that gives someone else the authority to make health care decisions for you in the event you are incapacitated. The person you designate to make these decisions on your behalf will do so based upon what you would want, so of course you must be sure to talk with them in great detail about your wishes.Another way to think about a living willWe sometimes refer to a living will as a Love Letter. What do we mean by that? By making your health care wishes known and clearly describing them to your family, you not only ensure your desires will be carried out, you also spare your loved ones the trauma of having to make a critical medical decision on their own. Even though your ultimate recovery may be hopeless, making critical medical decisions can lead to infighting and permanently damage relationships between family members; stressful battles between hospital staff and family; and haunt your loved ones with guilt for years to come.In effect, a living will is a final, thoughtful expression of love for your family and your hopes for their emotional well-being in the future. Of course, a living will cant do any good unless your physician and loved ones know about it. This may be a very difficult conversation to have, especially with your family, but letting them know what you want, and why, truly lessens their burden and helps them come to terms with your desires in advance and with minimal stress. We have the experience and understanding to counsel you on the best ways to begin such a conversation, and then, design an effective living will capable of ensuring your wishes are carried out and protecting your family emotionally.We invite you to contact us, click the link above, at your earliest convenience to discuss your unique needs and goals.
Many entrepreneurs refer to their business as their baby and rightfully so. Like a child, entrepreneurs nurture their business from an idea through conception, to growth, and maturity. Running a business is much like raising a child. Both require a lot of time, tears, resources, and effort to be successful. People often prepare for what would happen to their children in the event they pass away unexpectedly, however, they dont necessarily consider what would happen to their business and how that would affect their family. While it can be scary to consider, life is uncertain. Creating an effective estate and succession plan is an ongoing process that will change in each phase of the businesss life. Business owners pour blood, sweat, and tears into their business, often struggling and making sacrifices for the company to survive, in an attempt to create a legacy that will provide for themselves and their families. But what happens when they are no longer around to run their business? Entrepreneurs should be aware of the unique issues they face when creating an estate plan. They must take action to ensure their business continues on long after they are gone. Entrepreneurs often think that estate planning and succession goals happen later in life or at maturity of the business. Lets face it, the upkeep of running a business is more than enough to worry about, much less considering ones own mortality in their younger years. In the past, young entrepreneurs and start-up owners were less likely to plan for these things right out of the gate. As we continue to come out of the pandemic, the roles have reversed for the first time in history, allowing 18-34 year olds to take the lead when it comes to creating an estate plan. Often business owners dont consider what would happen to their baby without a leader. What happens after the owner passes away when the court system ties up the business assets for months or even years until your estate is settled? Or even worse, they hand the business over to an unprepared family member. Without a proper estate and business succession plan in place, these scenarios are entirely likely. Successful estate and succession planning requires a team of professionals. The team should include an estate planning attorney, accountant, financial planner, and an insurance agent. An important first step in creating the plan is consulting with an estate planning attorney and then ensuring that all of the professionals are in communication with one another in order to accomplish their succession goals.
In the realm of estate planning, married couples have traditionally used "sweetheart wills" to leave assets to each other. A sweetheart will describes any joint or separate will where spouses leave everything to each other, and then typically to their children, or other joint agreed upon beneficiaries. However, it's essential to consider both the advantages and drawbacks before deciding if a sweetheart will is the right choice for you and your family. ProsSimple & Affordable: Sweetheart wills are relatively simple and cost-effective to create. They provide an uncomplicated framework for couples who wish to leave their assets to each other.Mutual Trust and Understanding: By creating a joint will, couples demonstrate trust and a shared understanding of their wishes. This can strengthen the bond between partners as they navigate their financial future together.Streamlined Decision-Making: Sweetheart wills typically simplify decision-making processes for surviving spouses. Assets are transferred smoothly, reducing the potential for legal disputes or family conflicts ConsLack of Flexibility: Sweetheart wills may lack the flexibility required to adapt to changing circumstances. Life is dynamic, and a joint will may not account for unforeseen events such as divorce, estrangement, or significant changes in financial situations.Limited Control: Joint wills can limit an individual's control over their assets after their partner's death. This may be a concern if the surviving spouse wishes to change beneficiaries or modify the distribution of assets.Potential for Disputes: In some cases, joint wills can lead to disputes between family members, especially if beneficiaries disagree with the distribution outlined in the will. This can strain relationships and lead to legal challenges.Tax Implications: Depending on the size and nature of the estate, sweetheart wills may not be the most tax-efficient option. Individual circumstances, such as estate tax laws and exemptions, should be carefully considered to minimize tax implications.In conclusion, while sweetheart wills can be a touching expression of commitment and trust, they are not without their challenges. Couples should carefully weigh the pros and cons, taking into account their unique circumstances, values, and long-term goals. Seeking professional legal advice is crucial to ensuring that the chosen estate planning strategy aligns with individual and shared objectives.
A growing portion of the older population wants to stay in their homes as long as possible. This is known as aging in place and has several benefits when it is appropriate for the individual. However, there are some other care concerns to consider when deciding whether someone is at the point of needing additional help.Comfort and FamiliarityMost people want to remain in their homes because of the comfort, familiarity, and memories within it. Moving into assisted living or a nursing home is a big change for anyone, but especially for a senior who feels the loss of their independence during this transition. Remember that, when it is safe for them to stay there, someones home can support their overall mental and physical health.If staying in the same place is important to your loved one, look for ways to ease your mind while also protecting their independence. Is there a neighbor or friend who can check on them each week? Can you drop in every other weekend to make sure things are going well?Safety ConcernsMany adult children or other loved ones start thinking about these issues because theyre concerned over safety. Triggering events prompting a conversation about additional care needs include a loved one beginning to show signs of dementia or suffering one or more physical incidents like a fall in their home.Your Time and ProximityAs a family member, its natural to want to do everything you can to care for a loved one. Caregiving, however, can be very difficult and time consuming. It can be even more challenging if you dont live nearby. If your time and that of other family members can no longer support a loved one, a nursing home or assisted living may be the answer.FinancesWhether or not your loved one owns their home is the first consideration. Ongoing mortgage payments are just part of the puzzle. It can be hard for people to part with their home, but maintenance concerns and costs can be problematic. Evaluate the age of appliances and yard maintenance required, too. At some point a home might be more trouble than its worth to the occupant.Medical Support NeededIf a loved one only needs help with light housekeeping or meal preparation, they may not need to move to another location, especially a nursing home. Local organizations or a part-time hire could help with these needs while allowing your loved one to stay in their home.However, if they have more advanced medical needs or challenges with multiple activities of daily living, in-home care from a medical professional could bridge the gap. For more advanced situations, a nursing home might be appropriate.There are other care options along the spectrum in between care services provided by family and a nursing home. Part-time help from someone local such as a nurse, in-home care providers, assisted living, and adult day care are just a few. For someone who needs extra support but does not require the support of a formal nursing home, these options are well worth exploring.
Filial Responsibility Laws, also known as Filial Support Laws, are relatively unknown. More than half of US states (including Puerto Rico) could hold adult children financially responsible for their parents long-term care. If your parents live in one of the following states, you could be held legally responsible for their healthcare: Alaska, Arkansas, California, Connecticut, Delaware, Georgia, Indiana, Kentucky, Louisiana, Massachusetts, Mississippi, Montana, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, and West Virginia.At one point, 45 US states had statutes that left adult children responsible for their parents nursing home care. After Medicaid was established in 1965, many states repealed these laws. The filial law system was adopted from Englands Poor Laws, a set of social measures meant to support low income citizens that could not afford care. Medicaid and Social Security helped to reduce the need for these laws.While filial laws are rarely enforced, the rising cost of healthcare and longer life expectancies increase the likelihood of elderly individuals outliving their savings, which could rekindle these laws implementation. If your parents live in a state with filial responsibility laws and they start to accumulate healthcare bills they cannot afford, the provider may be within their rights to sue you for payment, and win. Some states can even extend criminal penalties to children who deny covering care. For example, according to North Carolina law, refusal to support your parents could result in a Class 2 misdemeanor that could earn you up to 120 days in jail.If a parent becomes eligible for Medicaid, then the government will pay for nursing home care in most cases, and these laws become irrelevant. The Medicaid Estate Recovery Program (MERP) will sometimes try to recover the cost through the recipients estate after death. However, Medicaid does not require that adult children contribute directly to their parents care. In cases where the child and parent share assets, such as joint bank accounts or jointly owned real estate, the state may take action against these assets when trying to recover long-term care costs.The best way to avoid issues with these laws is to get involved with your parents financial planning to ensure they have a plan to pay for long-term care themselves. An estate planning and elder law attorney can help create a plan to protect your parents assets while alleviating you of your filial responsibility. It is also important for families to consult with an attorney when applying for Medicaid or when beginning to plan Medicaid strategies, such as changing asset ownership or spending down assets.
Last Will & TestamentA Last Will and Testament is an essential legal document that allows you to accomplish a number of important goals. You can name your beneficiaries and specify the assets you want them to receive; name a guardian for your minor children; and choose the person you want to settle your estate (known as the Executor).In short, a Will helps ensure your wishes are carried out after you pass away. However, it does not ensure that your wishes regarding your finances and medical care will be followed if you become incapacitated. For that you will need other essential documents.Power of Attorney for Health CareA Power of Attorney for Health Care, also known as a Health Care Proxy, allows you to name a person you trust to make health care decisions on your behalf if you are no longer able to make them on your own. Medical decisions covered by your Power of Attorney for Health Care can include choice of doctors and other health care providers; types of treatments; long-term care facilities; end-of-life decisions, such as the use of feeding tubes; and do not resuscitate orders.Power of Attorney for FinancesSimilar in concept to the Power of Attorney for Health Care, a Power of Attorney for Finances allows you to designate another person to make decisions about your finances, such as income, assets, and investments, when you can longer make them yourself.By choosing your decision-makers in advance through powers of attorney, you and your loved ones can avoid the expense, stress, delays, and potential for family infighting associated with a court-ordered guardianship proceeding.Living WillA Living Will allows you to express your wishes regarding what medical treatments you want, or do not want, in an end of life situation. A Living Will differs from a Power of Attorney for Health Care in that it details your specific wishes, whereas a Power of Attorney for Health Care allows someone else to make health care decisions for you. Another benefit of a Living Will is that it spares your loved ones from having to make difficult decisions about your care without knowing what you would have wanted.HIPAA ReleaseA HIPPA Release lets you choose who can receive information about your medical condition. Hospitals and medical providers can be prosecuted for violating the Health Insurance Portability and Accountability Act (HIPAA) if they reveal your medical information to people not named in your HIPPA Release.To ensure your wishes are carried out while you are alive and after you pass away, your estate plan should include all of the legal documents mentioned above.Of course, estate planning can help you accomplish many other goals as well. For example, with a Revocable Living Trust your estate wont have to go through probate. This will expedite the distribution of estate assets to loved ones and keep your financial information private. A Revocable Living Trust also allows you to stipulate when and under what conditions your heirs will receive their assets, which is useful if you think your children are not yet mature enough to handle an inheritance. Other tools, such as an Irrevocable Trust, can protect your assets against threats like long-term care costs, divorce, creditors, lawsuits, and more.We invite you to contact us at your earliest convenience to discuss your unique planning needs and goals.Contact an Experienced Florida Estate Planning AttorneyIf you have additional questions or concerns regarding your unique planning needs and goals, contact Safe Harbor Law Firm by calling (239) 317-3116 to schedule an appointment.Tags: HIPAA Release, Living Will, Power Of Attorney
Medicaid can pay for the long-term institutional care of individuals who meet certain income and asset requirements. However, if the applicants assets and income exceed these limits, he or she may not qualify for Medicaid assistance until the limits are met. Given the high cost of long-term care, people sometimes try to give away their assets before applying for Medicaid in order to become eligible. Of course, state Medicaid agencies want to prevent this, so they require the applicant to disclose all financial transactions made in the last five years. (California is an exception and only requires disclosure of financial transactions made in the last 30 months.)This five-year period is known as the look-back period. In essence, state Medicaid agencies are looking back for assets transferred at less than fair market value. If the state Medicaid agency determines that such a transfer was made, it will impose a penalty period. And what is the penalty? It is a period of time during which the applicant will be deemed ineligible for Medicaid. The penalty period is calculated by dividing the amount the applicant has transferred by the states average cost for private pay institutional care.Any asset transfer can be scrutinized, regardless of size. Exceptions are not made for gifts to children or grandchildren, charitable donations, or other transfers that seem like no big deal. Similarly, informal payments to caregivers or loans to family members can raise red flags. In short, the applicant is considered guilty until proven innocent. The burden of proof lies with the applicant.It is worth noting that transferring assets to certain recipients will not trigger a penalty period. These recipients include a spouse (or a transfer to someone else if it is for the benefit of the spouse); a trust for the sole benefit of a disabled or blind child; and a trust for the sole benefit of a disabled individual under age 65. The applicants home can also be transferred to these recipients without penalty, as well as to all of the following individuals:A child under the age of 21A blind or disabled childA caretaker child who resided in the home for two years or more before the applicant required institutional care, and whose care permitted the applicant to delay his or her move to a long-term care facilityA sibling who lived in the home during the year preceding the applicants move to the institution and who has equity in the propertyWith proper planning it is possible to protect your assets against the transfer penalty. Even if you have already made asset transfers in the last five years and will be applying for Medicaid soon, we may still be able to protect a portion of your life savings.Contact UsIf you have additional questions or concerns regarding the Medicaid look-back period, contact the experienced Florida Medicaid planning attorney at Safe Harbor Law Firm by calling (239) 317-3116 to schedule an appointment.
Youve taken the time to plan for the financial well-being of your loved ones and yourself. Youve created a customized estate plan to address your goals and concerns. Your plan includes one of the most powerful estate planning tools out there, the Revocable Living Trust, which allows your heirs to avoid probate upon your death and provide for management of your assets without interference from the court should you become disabled or otherwise incapacitated.All is well and goodunless you have not taken the steps necessary to fund your trust. Without proper funding, your trust is worth no more than the paper it is written on.Its hard to believe, but many families take the time to create a comprehensive estate plan, together with a Revocable Living Trust, then fail to properly fund the trust. And even though a Will may provide that all assets pour over into your trust for further disposition, this takes place only after said assets pass through probate, thereby negating one of the primary benefits of creating the trust in the first place.Another important factor to consider is that assets such as life insurance, individual retirement accounts and pension plans pass to designated beneficiaries. If the trust is not named as the beneficiary of such assets, they will not be held (and protected) by the trust. Likewise, assets held in joint tenancy with rights of survivorship will go to the surviving joint tenant, not the trust. In addition, assets held in your name alone will not go to the trust until probate has been completed, which can take several months, a year, and sometimes even longer.Given all of this, it is extremely important for you to review all of your assets to determine which titles should be changed to your trust. Assets you will want to review, and possibly title to your trust, include all of the following:Bank accountsCertificates of depositInvestment accountsRetirement accountsStocks and bonds held in certificate formReal propertyTangible personal property such as art, rugs, jewelry, vehicles, etc.Promissory notesClosely-held business interestsWe can counsel you on the best strategies to employ so that your assets are correctly titled and your trust properly funded to achieve your goals and ensure your wishes are carried out.
When properly designed and implemented, Irrevocable Living Trusts can provide an almost unsurpassed level of asset protection, keeping your assets safe from the high cost of long-term care. And, similar to Revocable Living Trusts, they spare your family the delays, frustration and expenses of the probate process.Other reasons to utilize an Irrevocable Living Trust include:Tax minimizationAvoiding the risks of placing assets in the name of your childrenProtecting assets against predators, creditors, and lawsuitsAssets placed in an Irrevocable Living Trust can include a business, cash, investments, life insurance policies, and more.Why An Irrevocable Living Trust Could Be Better Than A Revocable Living Trust For Protecting Your Assets Against The Cost Of Long-term CareThe short answer is that under current Medicaid laws, assets in a Revocable Living Trust are not fully protected.Why? Because any assets you place in a Revocable Living Trust are still available to you, the Grantor.Therefore, Medicaid may determine that those assets must be used to pay for your long-term care. However, this is not the case with assets placed within an Irrevocable Living Trust, as long as it is properly designed and implemented to take into account the latest laws governing Medicaid eligibility.How An Irrevocable Living Trust Can Protect Your Childrens InheritanceWhen you transfer assets directly to your children, they typically become outright owners of the assets. They also become responsible for the risks associated with owning the assets. A properly drafted and implemented Irrevocable Living Trust will avoid:Loss of inheritances due to lawsuits, divorce, remarriage, or the inability of your children to manage money on their ownGift tax liabilityIncome tax consequences for your childrenProblems with getting financial aid to cover educational and other expenses for your grandchildrenTo determine if an Irrevocable Living Trust is right for you and your family, contact us today for a consultation.
Although you may have taken the time to create well structed wills and trusts, there are some common challenges which may present themselves upon your passing. Disputes amongst beneficiaries can result in bitter family relations, costly court proceedings and financial devastation. The following are some proactive measures you can take to avoid common challenges and ensure your documents accomplish your intended goals.Treat children equally: Certain family dynamics may have you questioning whether your assets should be divided equally. However, to avoid potential complications, equal distribution may be a wise decision. If you have two children, leave each half of all assets. Setting up a trust for a child with bad spending habits can be a useful tool to help protect and manage their assets. This way, a designated trustee will have the responsibility of managing assets for their benefit. The trust may specify how assets can be utilized, establish incentives to encourage good behavior and set access restrictions to prevent erratic spending. Regarding control of your estate, delegate positions according to skill level or select a corporate executor or trustee to avoid anyone from feeling slighted.Distribute tangible property through specific bequests: While monetary assets can be divided easily, it can be difficult to determine the true value of heirlooms and tangible property. Statements in wills or trust which divide all tangible personal property amongst heirs in substantially equal shares may not be enough instruction for your beneficiaries. Substantive value can be based upon several characteristics including emotional and sentimental worth. Discuss this issue with your beneficiaries to determine the personal significance of certain items. By inserting specific bequests into your will or trust, you can mitigate squabbles regarding that antique lamp in the living room or your grandmothers diamond ring.Account for gifts given during lifetime: If you gifted money or property to an heir in the past, make sure to account for it in your plan. Since your goal is to treat all your children equally, you might want to address this gift in your will or trust. Classify any gift as an advancement, with the value of the gift counting as part of the residuary money you will leave to that beneficiary. For example, if you gave your daughter $5,000 toward student loans, you would specifically state under her residuary share less $5,000 gifted for student loan payments during my lifetime.Insert a no-contest clause in your will: Typically, a no-contest clause will state that if a beneficiary challenges the validity of the will and fails, that beneficiary will forfeit any inheritance they would have received. The clause acts as a threat and discourages those seeking to receive a bigger piece of the pie. If you know a beneficiary is prone to conflict, inserting this statement can prevent heated legal battles and ensure your estate is distributed as intended.Prove your Competence: Will contesters often claim the maker of the will was incompetent or under duress during the signing of their will. To avoid these allegations, you may want to consider obtaining a medical evaluation which will confirm you are mentally competent and understand the nature and consequences of signing a will. This statement can be included in the will or presented to a court if the will is challenged. Another way to prove competence when signing a will is to have witnesses present at the signing. Witnesses can attest to the individuals mental capacity and ability to understand the nature and consequences of signing a will. In many jurisdictions, witnesses are required by law to sign the will in the presence of the individual and each other, and to affirm that they believe the individual is of sound mind and not under any form of duress.Disinherit any heirs: Leaving certain family members out of your will can be a source of contention among beneficiaries. If you are going to disinherit someone, make sure it is noted clearly in your will so there can be no question as to whether you intended to exclude them.
For more information on the author Safe Harbor Law Firm, CLICK HERE.Although President Biden outlined his tax plan during the presidential campaign, conventional wisdom held that Republicans in the Senate would block the implementation of his agenda. Now that Democrats control both the House and the Senate (if you factor in the vote of Vice President Kamala Harris), its worth revisiting some of Bidens proposals.In general, Biden would like to increase taxes on people earning more than $400,000 per year and repeal a number of provisions in the Tax Cuts and Job Act of 2017. Here are some of the details.An increase in the top individual income tax rate from 37% to 39.6%.Elimination of step-up in basis at death. Currently, the step-up in basis allows families to pass capital gains tax-free to their heirs. This is accomplished by stepping up the value of an asset from its original purchase price to its value when inherited, which results in less gain and therefore less tax paid. The step-up in basis significantly reduces capital gains taxes on assets with substantial appreciation, such as personal residences. The Biden plan would eliminate this tax-saving provision.A reduction in exemptions for estate and gift taxes. These exemptions are currently set at $11.7 million per person and $23.4 per married couple. Biden has proposed restoring estate and gift tax exemptions to their 2009 level: $3.5 million per person for the estate tax and $1 million for the gift tax.Capital gains treated as normal income. For individuals with income over $1 million, long-term capital gains and qualified dividends would be treated as normal income and taxed at 39.6%. This is significantly higher than the current rate of 15% to 20%.Limiting the tax benefit of itemized deductions to 28% for upper-income individuals.Of course, President Bidens tax proposals require congressional approval before they become law. Such approval is by no means a certainty. If these proposals do become law, wealthy Americans will have to reevaluate and likely adjust their financial and estate plans.
For more information on the author Safe Harbor Law Firm, CLICK HERE.Advance directives give a person of your choosing the authority to make decisions on your behalf about the type of care you want in the event of incapacity or an end of life situation. Your directives may contain instructions about the types of medical treatments you would or would not want to be taken to keep you alive if you are in a coma or vegetative state.In effect, advance directives allow you to decide, while you are alive and well, the type of care you want and the person you want to make the decisions for you. They allow you to better ensure that your wishes will be followed, and spare your loved ones from making such important decisions on your behalf without knowing what you would have wanted.Nobody wants to think about advance directives, but the consequences of not creating them far outweigh the difficulty of creating them in advance. We invite you to contact usfor experienced counsel about the directives available and the ideal person or persons to serve as your agent.
They say something magical happens when a parent turns into a grandparent. Of course theres the unconditional love and admiration for this child of your child; and theres also the urge to shower them with toys, clothes, presents, money and other gifts! Many people dont want to wait until they are gone to give gifts to their grandchildren, and they think, I want to spoil them while Im still here! But thats not always a good plan for the grandparent. Many state and federal programs including Medicaid and Veterans Administration benefits are needs-based programs, wherein making gifts could disqualify you from those programs. So what are some options to consider when giving money to grandchildren, nieces and nephews, or other intended beneficiaries? College Savings Programs These programs, more commonly known as 529 plans, are state-sponsored programs, authorized by the U.S. tax code. These allow grandparents (or parents, or anyone who wants to create one) to set aside money for their grandchild, specifically for higher education expenses later. These are great for a few reasons: they allow control over what the money is spent on, rather than writing the grandchild a blank check to spend on whatever they want; there are tax advantages for the account creators (grandparents); and some plans allow you to pay for tuition credits now, while tuition is presumably lower than what it may be in the future! There are a few downsides, however: limited ability to withdraw money from these accounts without penalty; not all states and not all schools participate; and these are still considered assets in the grandparents names if they later try to apply for Medicaid or other needs-based programs. Smaller Gifts Grandparents can still make typical gifts to their grandchildren, especially at gift-giving holidays and birthdays. However, this is not the time for a large gift. Depending on the states rules and how they apply them, gifts can be counted against you for Medicaid and VA purposes. As long as you stick to smaller amounts, you are less likely to be penalized for those gifts. And dont make them a routine, either! Medicaid can total those gifts and penalize you for them. Trusts Utilizing trust planning for gifts to grandchildren is often the best route, unless delaying the gift until the grandparents death is not desirable. By setting up a trust during life, the grandparent can retain control over the assets, and, depending on the type of Trust, it may not count against them for Medicaid or other needs-based programs. When the grandparent passes away, the money can be left to grandchildren in trusts, where it is protected and managed for them, by someone the grandparent appointed during their lifetime. This allows for flexibility for the grandchild, while receiving the benefit of asset protection.