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Why do I need an Elder Law Attorney?

WHY DO I NEED AN ELDER LAW ATTORNEY?

Attorneys who concentrate their practices in Elder Law, focus on providing legal services–primarily to senior citizens and others who are looking to plan for their life as they age.

  • Elder Law attorneys work closely with families dealing with the onset of Alzheimer’s and dementia.
  • Elder law attorneys also work with families with disabled children and family members with illnesses and legal issues.
  • As our average life spans have increased, elder law attorneys have stepped in to ensure needs for an ageing population are effectively anticipated and legally supported.

ELDER LAW ATTORNEYS:

  • Focus on helping you to understand your legal options and rights as you age.
  • Understand that there are often emotional and legal details that need to be addressed when dealing with chronic illnesses, medical emergencies and end-of-life planning.
  • Will help you to anticipate and prepare for the legal aspects of illness, ageing and death, such as:
    •  The importance of wills and trusts.
    • Probate proceedings and the disposition of your assets.
    • Planning for a minor or adult with special needs.
    • The importance of a living will and a durable power of attorney.
    • The importance of creating a plan for your long-term care and understanding your eligibility for financial assistance through Medicaid Planning.
    • The importance of finding a trusted individual to be your executor or trustee.
    •  The importance understanding ways to preserve your assets to minimize tax liability and long-term care costs.

Elder Care attorneys are prepared to ask you about your wishes and to create a plan for your life–and your death–that is customized to your needs and circumstances.

If you are ready to meet with an Elder Law attorney or have additional questions, please feel free to contact us today.

To schedule your free consultation,
email us, or call 1-215-364-1111
or 1-855-992-6337 (Toll Free)

WHAT IS A POWER OF ATTORNEY?

WHAT IS A POWER OF ATTORNEY?

  • Power of attorney is a legal document which is used to designate someone to act on your behalf in legal matters such as healthcare and finance.
  • Power of attorney is also the authority to act on someone else’s behalf–it appoints an “attorney-in-fact;” the person with the power of attorney is the one who will take action for you.
  • A power of attorney document can be tailored to specific matters such as:
    • Business
    • Personal finance including tax, purchases and sales of assets, investments
    • Healthcare decisions
  • A power of attorney designation can be put in place for a specific transaction like buying a house or vehicle at auction. Once the transaction is complete, the power of attorney is no longer valid.
  • Other powers of attorney can only be effective once you’ve become incapacitated (known as “Springing”), or they can become effective upon executing the document.
  • Without question it’s best to create your Power of Attorney document(s) before you need them. A Power of Attorney can only be created while you are still of sound mind—an important legal standard that must be met for Powers of Attorney to be valid.

WHAT ARE THE DIFFERENT KINDS OF POWER OF ATTORNEY?

  •  Durable power of attorney

    • A durable power of attorney is a document that appoints an individual to act as your agent. The scope of their agency can be finances, legal matters or health.
    • The term durable means the power of attorney has no expiration date, it endures even if you are incapacitated.
    • You can appoint anyone you want as your agent, it can be a trusted family member or friend; it can also be an attorney.
  • Healthcare Power of Attorney

    • A healthcare power of attorney is a kind of durable power of attorney, that is specific to healthcare. You appoint a person to act as your healthcare “agent,” the person who will make medical decisions for you, particularly when you no longer can.
    • When you prepare your healthcare power of attorney, your attorney will ask you all kinds of questions about life sustaining measures, end-of-life considerations and giving medications. The document can spell out your wishes and how you want your agent to act for you.

WHAT IF I DON’T HAVE A POWER OF ATTORNEY?

If you have no power of attorney in place and you become incapacitated and can no longer make decisions for yourself, then two possible courses of action will come into play:

  • For financial matters, the state in which you reside will open probate proceedings on your behalf, and a guardian or conservator will be appointed to oversee your finances. This person may or may not be someone you know. Family members and others will then have the ability to apply to the court to take care of financial matters for you. The probate process will be costly and lengthy.
  • If no Healthcare Power of Attorney is in place, medical personnel will seek out close family members to make decisions for you. Without a Healthcare Power of Attorney, where you’ve made your wishes known in advance, your family’s conflicting opinions may override what you would want to happen.
  • If there is no next of kin available to medical personnel, then medical professionals will make the best possible decision on your behalf–which may or may not align with what you would want them to do.

For example:

Michael is divorced, 58 years old and is enjoying his later years. He loves his work, his girlfriend and his extended family—not necessarily in that order! He dotes on his family including his grown kids and grand kids. Everyone lives pretty close by and family get-togethers are frequent and so much fun.

Fortunately, he and his ex-wife get along just fine, so much so their children and grand kids can all socialize together without the worry of heated family drama. He delights in seeing the little ones play and he loves to spoil them with trips to the ice cream shop about a mile away from the house. Michael can keep up with the kids pretty well, he exercises each day with a walk around the neighborhood after work. He also quit smoking when he was 55 and he’s feeling better than ever since he stopped.

At dusk one Friday evening, Michael was on his walk, crossing the street just two blocks from home. He was struck by a car, driven by a drunk driver, who went too far with happy hour specials after she left work. She was celebrating a promotion. She was speeding, looking at her phone and never saw Michael at all.

Michael suffered catastrophic injuries: he has cuts all over him from hitting the windshield, multiple bone breaks and a serious brain injury. Michael is in a coma, he can’t breathe on his own or feed himself. A ventilator is doing his breathing for him. A feeding tube nourishes him. It’s been 5 weeks now and there is no change in his condition. His doctors are not optimistic about any recovery, but no one can really say for sure what will happen.

Michael has no Healthcare Power of Attorney or Durable Power of Attorney in place. There is no way for him to communicate what he wants. His ex-wife says he would “never want to be a vegetable.” She is correct: if Michael could speak or communicate in some way, he’d tell his children to take him off the breathing machine and remove the feeding tube.

He’d tell them this is no way to live.

Right now, his three grown kids are grappling with a really big decision: whether or not to keep him on the ventilator and the feeding tube. None of them know what their Dad said in the past about being kept alive if he were in a coma. Two of them think he’d never want to be kept alive in this state. One thinks he may have a miraculous recovery and wants to wait and see what happens.

They’ve all decided they need to agree on what they do for their dear father. Without consensus in sight, his kids have a standing date to sit together by their Michael’s bedside every Saturday morning— their Dad looks so young lying there. At just 58, the family’s had their father, grandfather stolen away by a horrible tragedy.

Michael lies still in his nursing home bed, he’s safe from further harm, his life may be just this from now on: a bed, a ventilator, a feeding tube and visits from his grown kids, girlfriend and the older grand kids. And caregivers: lots of caregivers will tend to him.

If he could only say it, he’d tell his kids to unplug the ventilator and disconnect the feeding tube. He’d tell them to remember all of the wonderful things they did together. He’d tell them he loves them and that he will be watching over them always.

If he could only say it, he would tell them it’s okay to let him go.

HOW DO I PREPARE MY POWER OF ATTORNEY DOCUMENTS?

  • As a first step, think about who you will place in charge of your finances and your healthcare when you no longer can do this for yourself. The selection is up to you, and you should choose someone who will have your best interests in mind–and who will carry out the wishes in good faith: exactly the way you would do it if you could.
  • A team of professionals can guide you through the steps to prepare your Durable Power of Attorney and your Healthcare Power of Attorney. They will discuss all of the options with you so you can make the best decision for your needs.

To get started, talk to the professionals at the Scott D. Bloom Law office.

To schedule your free consultation,
email us, or call 1-215-364-1111
or 1-855-992-6337 (Toll Free)

WHAT IS MEDICAID PLANNING?

WHAT IS MEDICAID PLANNING?

  • Medicaid planning is structuring your finances and assets to optimize your ability to pay for coverage of the future costs of long-term care, such as in-home or nursing care.
  • Medicaid planning is similar to tax planning; we all want to look at our financial situation to minimize tax liability throughout our lives and to our estates after we die. Medicaid planning is the same–it’s possible to minimize our out-of-pocket care costs through Medicaid eligibility.
  • Financial strategies, supported by the laws of the state in which you live, may be utilized so that one spouse may retain assets while the other spouse can be supported by Medicaid for their long term care costs. Many of these laws are in place so that a healthy spouse isn’t punished financially while the care needs for the ill spouse can be supported via Medicaid.

WHY DO I NEED A MEDICAID PLAN?

  • We all know that any form of long-term or nursing care is very expensive. As we age, particularly when one spouse requires long-term care and the other can live independently, the concerns about financial security for both are considerable.
  • Medicaid planning can provide Medicaid eligibility for one spouse while preserving assets for the healthy spouse.
  • Ideally, your Estate Planning will be put in place long before any question of Medicaid eligibility arises–while you are still living independently and healthy.
    • Medicaid planning can be done once the need arises, but the process requires time, expertise and patience.
    • The sooner you establish your plan, the more options you will have available.

HOW CAN I DETERMINE MY MEDICAID ELIGIBILITY?

  • How your finances compare to the federal and state guidelines determines Medicaid eligibility. Your current health situation figures in as well. It’s a complicated analysis that a professional such as an elder care attorney should undertake with you.
  • Items such as income, real estate, savings accounts, brokerage account balances, and insurance policies are among the items that can determine your eligibility. Again, it depends on the state in which you live.
    • Eligibility may differ slightly for married and single people.
  • A professional’s assessment should be done before you fill out any forms to apply for Medicaid.

WHAT WILL MY MEDICAID PLAN INCLUDE?

  • Everyone’s financial situation is unique, and every state has different guidelines, so there are no hard or fast rules about what your plan will involve.
  • Here are some examples of Medicaid plan components:
    • The simplest form of Medicaid planning is having an experienced professional assist you with filling out the application forms. If your eligibility is straight-forward, this is the right path for you.
    • A more complicated plan for a married couple can include:
      • Establishing irrevocable trusts. This removes certain assets from your eligibility calculation.
      • A transfer deed for your primary home. When the well spouse plans to continue to live at home, your state may allow a deed transfer into the well spouse’s name. This will protect the home from liquidation to cover costs of care.
      • Establishing an annuity. An annuity can help you “spend down” assets per the Community Spouse Resource Allowance (CSRA) for your state. You purchase an annuity with existing assets; the annuity provides a source of steady income for the healthy spouse, while setting up Medicaid eligibility for the ailing spouse.

Here’s a simple example of an annuity – based solution for a married couple:

James (80) and Julia (77) live in New Jersey. James has recently been diagnosed with Dementia. He will need to move to a memory care residence since his care needs will soon go beyond what Julia can handle. His memory care residence will cost $8,000/month.

The couple’s Medicaid-countable assets total $250,000.

Julia’s goal is to get James eligible for Medicaid and move him into the memory care facility she has chosen–while providing income for herself and preserving their assets. Julia makes an appointment with Scott Bloom, an eldercare attorney, to put together her Medicaid plan. She brings all of their financial information with her to the appointment.

For starters, Scott states that James’ and Julia’s community assets must be “spent down” to $123,600, under New Jersey law for the Community Spouse Resource Allowance (CSRA) threshold. Right now, James and Julia are currently over New Jersey’s CSRA by $126,400 ($250,000 minus $123,600).

Scott recommends Julia set up a Medicaid–compliant annuity which will be funded by their CSRA “excess” of $126,400. The annuity is set up for 5 years, which will give Julia a monthly income of approximately $2,100, on top of her existing $1,500/month pension income–for a total of $3,700.

Without this Annuity strategy in place, James memory care would have consumed James’ and Julia’s CRSA “excess” in a little over 15 months. With the Annuity, Julia receives the entire annuity income benefit from the CRSA “excess.”

There are other components in James’ and Julia’s Medicaid plan, like the calculation how much of James’s income will go toward his Medicaid co-pay. This scenario is a bit lengthy for a blog post–see your eldercare attorney to dig into the details of this aspect of your plan.

• The Medicaid system is subject to yearly changes in federal and state rules, so it’s best to retain a professional who is up to date on the law–someone who can counsel you throughout the application process and can alert you of pending changes to the Medicaid system–especially when it’s time to apply for your annual eligibility.

HOW DO I PREPARE FOR A MEDICAID PLANNING DISCUSSION?

You’ll need to gather all of the information on your financial situation, including:

  • Most recent tax return–federal and state.
  • Annual income statements–pension, social security, annuities, etc.
  • Bank account statements
  • Brokerage statements
  • Real estate holding (s) description/deeds, mortgage balances
  • Insurance policies

To get started with your Medicaid Plan, talk to the professionals at the Scott D. Bloom Law office.

To schedule your free consultation,
email us, or call 1-215-364-1111
or 1-855-992-6337 (Toll Free)

WHAT ARE THE DIFFERENT KINDS OF WILLS?

LAST WILL AND TESTAMENT

The Last Will and Testament is commonly known as a Will.

The Will:

  • defines the contents of your estate.
  • names your executor, the person who will dissolve your estate after you die.
  • names your beneficiaries, who will receive portions of your estate based upon your documented wishes.
  • may also define who will take charge of minor children in the event of your death.

LIVING WILL

The Living Will is also known as an advance care directive. It defines the kind of medical care or treatment you will receive if you become unable to communicate or to make decisions for yourself.

  • Your directive can include the kind of care you wish to receive if you have dementia, are terminally ill, have a catastrophic accident or are in late stages of life.
  • You will name a person in your Living Will who will have power of attorney; this person will have the legal authority to make medical decisions for you when you no longer can.
  • Medical care involves many different options; your advance care directive can include or exclude treatment options, such as CPR, intubation, tube feeding, even hospitalization.
  • Carefully consider all of your options with your attorney.
  • Once your Living Will is in place, it’s important to discuss it and to provide copies of it to:
    o Family members
    o Physicians, healthcare agents
  • Keep a copy of your Living Will with you while you are traveling
  • Keep a card in your wallet that states you have an advance care directive in place.

POUR-OVER WILL

A Pour-Over Will is used in conjunction with a Living Trust. It is a bit of legal “insurance” which will capture any assets not titled in your trust’s name.

  • The Pour-Over will ensures that any of your assets not held in the trust’s name will “pour over” into your trust upon your death.
  • Hopefully you can stay current with titling all of your assets with the trust’s name. If you don’t, the pour-over will takes care of any omissions.
  • Assets in the Pour-Over category are still subject to probate, so it’s definitely advisable to always take title of your assets in your trust’s name.

To schedule your free consultation,
email us, or call 1-215-364-1111
or 1-855-992-6337 (Toll Free)

ESTABLISHING YOUR WILL: STEP-BY-STEP

Your to-do list to establish your Will may sound like a lot of work. Steps don’t need to be rushed, be sure to cover all of the bases.

ASSETS. MAKE A LIST.

Think of this as an inventory of all of your “worldly goods;” these are things you want to pass on to others. For example:

  • Real estate–include the address and the way the property is listed on your deed.
  • Cash, savings, checking, brokerage accounts–include the account name, account number and financial institution that holds the account.
  • Personal property–vehicles, family heirlooms, jewelry, collectibles.
  • Insurance policies, businesses.

BENEFICIARIES. MAKE A LIST.

Your beneficiaries will one day inherit the assets in your will. Beneficiaries can be family members, friends, charities–the designations are up to you.

  • Decide who will receive what. Every asset you own needs a beneficiary designation.
  • If you own your business, you will designate who will take over upon your death.
  • There are many ways to split up property among your heirs. Discuss all of the options with your attorney to choose what’s right for you.

EXECUTOR. CHOOSE ONE.

Your executor will take charge of your estate after you die.

  • During the probate phase your executor will be your estate’s point of contact with the probate court. Discuss your options with your attorney, then identify your top choices.
  • Once you’ve decided, discuss your choice with your executor—review the responsibilities with them.
  • Your executor will take charge of liquidating any assets per your will’s instructions–so that they can be converted into cash for distribution to heirs.

ENGAGE YOUR ATTORNEY TO PREPARE THE WILL

  • Your attorney will draw up the will, you’ll be presented with a draft to review and sign.

SIGN YOUR WILL

  • You and independent witnesses will sign the will. Valid witnesses are those who are not named in the will and have no interest in your estate.
  • Notarize the document.

UPDATE YOUR BENEFICIARIES

Beneficiaries can be assigned to certain assets—this can happen outside of the will’s process.

  • Insurance policies, IRAs, 401Ks, for example, can have beneficiaries assigned.
  • Be sure to update your beneficiaries on all possible financial instruments to make your wishes known.
  • Many of these assets won’t have to go through probate, since you’ve already assigned beneficiaries to them. Without beneficiaries on file, these assets will be held up in probate.

ORGANIZE YOUR DOCUMENTS

  • Keep a few copies of your will on hand.
  • Provide a copy of your will to others, as needed.
  • Keep your Living Will handy. When traveling out of town, for example, take a copy with you in the event of an emergency.

COMMUNICATE WITH YOUR EXECUTOR

  • It’s a good idea to give a copy of your will to your executor
  • Provide a list of your assets to your executor as well
    • Description and location of your assets
      • Bank accounts, including account numbers
      • Brokerage, IRAs, 401Ks, including account numbers
      • Safe deposit box, key location
      • Personal property descriptions, location
      • Real estate address(es)
      • Vehicles, VIN numbers
      • Include your social security number on your inventory

UPDATE YOUR WILL AND ASSETS LIST AS NEEDED

Periodically review your will–do it as a new year’s present to yourself–to make sure everything is still current

  • Beneficiaries may change, based upon your wishes or other circumstances, so update your will accordingly.
  • Update your assets list as needed, but be sure to send a copy to your executor once each year.

Contact Scott D. Bloom law for more information on how a Will can be a part of your estate planning.

To schedule your free consultation,
email us, or call 1-215-364-1111
or 1-855-992-6337 (Toll Free)

WHAT IS A WILL?

• A will is an estate planning tool–a legal document–which is used to manage the disposition of assets after the person who created the will (the testator) passes away. In addition, a will can be used to name guardians for minor children.

• A living will documents your wishes for medical care in case you cannot make decisions for yourself.

• A will appoints an executor, who will take charge of your estate after your death. You can name co-executors.

A WILL HELPS YOU WITH ESTATE PLANNING

A will directs the disposition of your estate after you die. Your will designates beneficiaries who will receive your estate’s assets as directed by your will.

  • A probate court, in conjunction with your executor, will ensure your wishes are carried out.
  • Probate court proceedings are public. Anyone can have access to information about your estate and the details of your will.
  • A will is fairly simple to prepare. Attorney fees for preparing a will is usually less than preparing a trust.

A LIVING WILL DIRECTS MEDICAL CARE ON YOUR BEHALF

  • A Living Will, also called an advance healthcare directive, documents your healthcare wishes in the event you cannot communicate your wishes.
  • A Living Will is highly recommended since it leaves no question as to your instructions about your medical care if you become incapacitated.

WHAT IF I DON’T HAVE A WILL?

It’s desirable to have a will in place. If you don’t, you will be deemed to have died intestate and state law will determine how your estate is bequeathed. Even your closest, most trusted family members will have no say in your estate’s dissolution.

  • The state in which you reside will appoint an Administrator for your estate.
  • A probate court to oversee what happens to your assets.
  • The Administrator will disburse your assets according to your state’s intestate law.
  • It is possible that family members whom you’d normally leave out of your estate could inherit assets from you—if that’s what your state’s law says should happen.
  • Any person can appeal to the probate court to make a claim on your estate. It will be up to the court to determine the validity of such a claim.  For example:

Beth and Richard were married for 35 years. They were both 55 years old, anticipating their retirement years when they reached 65–the golden years were in sight. Their youngest would be done with culinary school soon–the other two were all done with their education. Beth and Richard still had plenty of time to replenish savings, somewhat depleted because they helped their kids with school expenses.

Unfortunately, Richard suffered a massive heart attack just after turning 55. Richard had been in good health, or so they both thought, and nothing warned them of his condition. It shook the family to the core, no one saw it coming.

The sad reality of Richard’s absence was so difficult on Beth. With the help of her kids and friends she is beginning to figure out how to move on in life without him. It isn’t just Richard’s loss that she has to face–she has to face life without him financially.

They both had talked about creating a Will or maybe a trust together and had been putting it off. Richard died without either one in place. Because of this, the financial path forward for Beth will be very challenging.

She and Richard had talked their wishes to each other–many times–and never made anything official, nothing was in writing, not to mention in writing filed with an attorney. What both Beth and Richard had talked about in the past was leaving each other all of their assets–then leaving the remaining estate to the kids when the surviving spouse finally passed away.

Beth made a bit more money than Richard, but they had always needed both of their incomes to make ends meet. A second mortgage on their home tapped the equity–it was used to help with the kids’ college expenses. They had figured on saving at least $50,000 per year for 10 more working years – then they would retire with their nest egg replenished.

The couple had worked at various companies throughout their careers–they had a “collection” of 401Ks, IRAs that had accumulated from working at these various places. Richard’s IRAs and brokerage accounts’ total value are $180,000. Richard’s three IRAs were in his name only. He also had a brokerage account in his name only. Richard never went on the website for all of these accounts to input Beth as his beneficiary; Beth’s name wasn’t on file.

Richard had a life insurance policy through his employer that would pay Beth $50,000. At least Richard had filled out the beneficiary form when he went through new hire orientation.

What Beth has recently learned, is that she can’t touch any of Richard’s IRAs or the brokerage account. Without beneficiaries named on these accounts, these items will be part of the probate of Richard’s assets—the accounts are virtually under Pennsylvania’s control.
Beth is learning the hard way that, in Pennsylvania, Richard died intestate. The term means that Richard died without a Will. Pennsylvania law dictates that Beth and the kids would split assets in Richard’s name. Beth is dumbfounded.

Pennsylvania dictates this about Richard’s accounts: Beth will inherit the first $30,000, plus half of the remaining $150,000. So, Beth will inherit $30,000 plus $75,000 and the insurance policy. The three kids will split the remaining $75,000.

The youngest child wants to take her share of Richard’s money. The other two want to give their shares to their Mom. The youngest’s decision is adding stress to everyone–on top of their grieving, it’s causing a bit of a family rift.

Other estate fees will add up: probate administration fees to an attorney they’ve hired to manage that for them—no one has the strength to take that on at this point. The fees might be somewhere north of $5,000.

There are a lot of “if onlys” uttered about Richard these days: If only Richard and Beth had their Will (or better yet, trust) in place; if only Richard’s financial accounts had listed Beth as the beneficiary; if only the financial accounts were in both of their names (or in a trust’s name). If only…then Beth would have received all of Richard’s estate. With a trust in place and all of the right titling in place, Beth would automatically have been in control of all of the IRAs and brokerage account.

Beth can use every penny she can get. The kids have their whole lives ahead of them, $25,000 in a 20-year-old’s hands will get spent quickly; Beth can live a whole year on that $25,000–it seems unfair the State of Pennsylvania puts her kids on a level playing field–and there is nothing she can do about it.

Beth is angry at herself and Richard for never making a will or trust a priority. She’s hopeful her kids will figure things out and will get along again. She really hopes her youngest will rethink taking the $25,000.

Beth and Richard did everything for their kids; at age 55 she feels she’s earned the right to control her destiny and to have that security she always knew they’d both have as she and Richard grew old together.

Right now, things are a bit out of control. Beth can only hope something will go her way very soon.

HOW DO I KNOW IF A WILL IS RIGHT FOR MY SITUATION?

  • A team of professionals is the best way to determine if a Will is right for you. Start with an estate planning attorney. They will discuss all of the options with you so you can make the best decision for your needs.

To identify the best type of will for your needs, talk to the professionals at the Scott D. Bloom Law office.

To schedule your free consultation,
email us, or call 1-215-364-1111
or 1-855-992-6337 (Toll Free)

Establishing Your Trust: Step-by-Step

Your to-do list to establish your trust may sound like a lot of work. Steps don’t need to be rushed, be sure to cover all of the bases.

ASSETS. MAKE A LIST.

Think of this as an inventory of all of your “worldly goods;” these are things you want to pass on to others. You’ll decide later which things to include or exclude from your trust. For example:

  • Real estate—include the address and the way the property is listed on your deed.
  • Cash, savings, checking, brokerage accounts—include the account name, account number and financial institution that holds the account.
  • Personal property—vehicles, family heirlooms, jewelry, collectibles.
  • Insurance policies, businesses.

BENEFICIARIES. MAKE A LIST.

  • Your beneficiaries will one day inherit the assets in your trust.
  • Beneficiaries can be family members, charities—the designations are up to you.

TRUSTEE. CHOOSE ONE.

Discuss your options with your attorney, then identify your top choices.

  • Once you’ve decided, discuss your choice with your trustee; review the responsibilities with them, it’s important they understand what’s in store.

ENGAGE YOUR ATTORNEY TO PREPARE THE TRUST DOCUMENT

  • Your attorney will prepare a draft version, carefully review it.
  • Once you’ve approved the draft, your attorney will prepare the official version for your signature.

TRANSFER THE TITLE OF YOUR ASSETS INTO THE TRUST’S NAME

This is a crucial step and cannot be overlooked—it takes a bit of work on your part:

  • All assets held in your name like real estate, vehicles, bank and brokerage accounts need to be transferred to the trust’s name.
  • Be ready to provide a copy of your trust to your bank, DMV or county recorder for their review—this is important because your asset’s title needs to match the name of your trust. They may request a copy of your trust to keep on file.

UPDATE YOUR BENEFICIARIES FOR PROPERTY NOT HELD IN TITLE

Some of your assets are in your name and always will be, like insurance policies or a pension.

  • Be sure to update your beneficiaries on all financial instruments to make your wishes known.

CONFIRM THE ASSETS HAVE BEEN “MOVED” INTO THE TRUST

  • Double check your financial statements – you should notice the account holder is the trust’s name.
  • Same thing for your real estate holdings – your county recorder’s website and property tax statement will now be listed in your trust’s name.

ORGANIZE YOUR DOCUMENTS

  • Keep a few copies of your trust on hand.
  • Provide a copy of your trust to your successor trustee(s).

UPDATE YOUR TRUST AS NEEDED

Periodically review your trust – do it as a new year’s present to yourself – just to make sure everything is still current.

  • As you acquire new assets, be sure to take title in the name of the trust.
  • Beneficiaries may need to change, based upon your wishes or other circumstances, so update your trust accordingly.

 

Contact Scott D. Bloom law for more information on how a trust can be a part of your estate planning.

To schedule your free consultation,
email us, or call 1-215-364-1111
or 1-855-992-6337 (Toll Free)

What is a Trust vs a Will?

WHAT IS A TRUST vs A WILL?

Both trusts and wills are used in estate planning. Both are used to name your beneficiaries and which beneficiaries will receive your assets after you are gone.

The paths your beneficiaries will take with a trust and a will are, however, quite different.

A LIVING TRUST IS ABOUT SPEED—IT’S BUILT FOR EFFICIENCY

A living trust (revocable or irrevocable) is not subject to probate. A will is subject to probate. This is the main difference between the two estate planning tools.

  • While attorney’s fees for setting up a trust are often more than a will, having your assets in a living trust can speed up the time it will take for your beneficiaries to actually receive assets you want them to inherit.
  • Fees to execute the trust’s terms are minimal, if any. The successor trustee will simply fulfill the terms of the trust and make the asset transfers happen to the beneficiaries.
  • Probate of a will can last at least one year.
  • Once probate begins, your estate will incur attorney’s fees and other expenses, such as asset appraisal fees. The probate court may set a cap on the fees your estate will incur during probate.

A LIVING TRUST GOES INTO EFFECT WHILE YOU ARE ALIVE

Your revocable or irrevocable trust is active once you’ve signed it. A will takes effect upon your death.

Two examples:

  1. Your trust designates your son as a co- trustee of your trust. If you are no longer able to make decisions about finances–let’s say you have a chronic illness or an accident–your son can immediately and legally continue to take the financial reins–without going to court or any other entity to give your son the power to do this.
  2. If you have a disabled child a trust can be set up to fund and to oversee their care. You and your successor trustee(s) can be legally empowered to make decisions about the child’s well-being, education and care throughout your child’s entire lifetime.

A TRUST IS KEPT PRIVATE

Since a living trust isn’t subject to probate court, it is a private matter between the grantor, the trustee and the beneficiaries. No one outside of those mentioned in the trust can find out the value of your assets, how much was given to your beneficiaries, or any other details.

What happens in a probate court is public record.

Contact Scott D. Bloom law for more information about using a trust in your estate plan.

 

To schedule your free consultation,
email us, or call 1-215-364-1111
or 1-855-992-6337 (Toll Free)

What Are The Different Kinds Of Trusts?

TESTAMENTARY TRUST

A testamentary trust is part of a will. This type of trust will be established after the grantor’s passing and during the will’s probate phase.

For example:

An older couple, Michael and Stephanie, have adult children and grandchildren. Michael and Stephanie want to help their grandchildren, great-grandchildren (and more, if possible) with their higher education expenses. The couple currently have a separate brokerage account set up just for this.

Rather than transferring this account into their minor grandchildren’s names right now, the couple decide to set up a testamentary trust, which is a part of their will. This gives Michael and Stephanie access to their brokerage account while they are still alive for a dire financial emergency. Assuming everything goes according to their financial plan, their testamentary trust will be established after Michael and Stephanie pass away. It will be overseen by two co-trustees, their adult daughter Monica and their financial adviser.

The testamentary trust will be professionally managed by the financial adviser. Daughter Monica is empowered through the trust to choose a different adviser, who will become a future co-trustee; any future adviser must be licensed and with an established, national firm. Michael and Stephanie have planned an investment strategy so that gains in the fund are reinvested and that $30,000 per descendant can go toward higher education. Monica (and her successor trustees) are not empowered to withdraw any funds unless the funds are for higher education expenses. Funds can be drawn via check and the check can only be made out to a college or other institution of higher learning. This is all spelled out in the trust.

LIVING TRUST

There are two types of living trusts: revocable and irrevocable. A revocable trust gives you most flexibility, but no estate tax benefit. An irrevocable trust gives you minimal flexibility but maximum estate tax benefit.

REVOCABLE TRUST

With a revocable trust you continue to control the assets when you are the trustee. You can change or undo the trust any time you wish.

  • This gives you maximum flexibility to manage the trust’s assets while you are alive, while knowing the assets will not be subject to probate and therefore can pass rather quickly to your beneficiaries.
  • Probate can be a long and costly event. The period of time can vary but at least a year is normal. Your estate will also incur attorney’s fees and other expenses during probate. In some states the probate court determines what “reasonable” probate fees will be.
  • With a revocable trust, your beneficiaries will need to understand their own tax situation and to pay the appropriate taxes once they’ve acquired what you’ve passed on to them.

IRREVOCABLE TRUST

An irrevocable trust allows you to permanently and irrevocably give away your assets to your trust during your lifetime. That word “permanent” means what it says: once the trust is in place, it cannot be undone unless the grantor and all beneficiaries agree to it.

  • The advantage has everything to do with estate taxes: since the assets are no longer yours, they are no longer a part of your estate.
  • “No estate taxes” is very attractive but the permanent aspect of this trust makes its use to be one for a specific purpose, such as Medicaid Planning.
  • Discuss this option with your team of advisers and see if right for you.

Contact Scott D. Bloom law for more information about using a trust in your estate plan.

To schedule your free consultation,
email us, or call 1-215-364-1111
or 1-855-992-6337 (Toll Free)

What Is A Trust?

WHAT IS A TRUST?

A trust:

  • is an estate planning tool–a legal document–which is commonly used to manage the disposition of assets after the person who created the trust (the grantor) passes away. In addition, a trust can be used to distribute assets while the grantor is alive. It all depends on the purpose of the trust and how the grantor wishes to set up asset management and disposition.
  • can replace a will and can also be used to supplement a will.
  • names beneficiaries who are to receive assets per the terms of the trust.
  • is managed by a trustee or multiple trustees.
  • identifies beneficiaries and may also identify successor trustees who will manage the trust on an on-going basis.
  • takes assets out of your estate because the trust itself becomes the owner of the assets. The trustee then controls and manages the trust’s assets.
  • can operate for several generations—or for a single one—it all depends on how it’s set up.

A TRUST HAS SEVERAL ESTATE PLANNING BENEFITS

  •  A trust is not typically subject to probate. This means that assets can usually be distributed to beneficiaries faster than assets that are part of a Will, because a trust isn’t usually subject to what can be a lengthy probate court process.
  • Because the trust spells out what is supposed to happen with the assets, the beneficiaries can be assured that there isn’t deviation from what the trust says. The trustee is legally bound to do what the trust says.
  • A trust can potentially ensure that assets are available for generations of beneficiaries; you can have confidence that your assets are helping your heirs for a long time.
  • An irrevocable trust  can be used to help assets pass to the beneficiaries without estate taxes coming due.

A TRUST IS A FIDUCIARY DOCUMENT

  • A trust’s purpose is to manage assets–assets are things like cash and things that can be sold for cash (e.g. a home, business, precious metals, bank accounts, jewelry, family heirlooms–anything you consider to be of value).

A TRUST MAY BE USED FOR CARE-TAKING

  • A trust can include assets which can be used to pay for the care of others.
  • This can include the care of anyone—for the trustee while they are still alive—or for an individual who is too young to care for themselves or doesn’t have the mental or physical capacity to care for themselves.

HOW DO I KNOW IF A TRUST IS RIGHT FOR MY SITUATION?

  • A team of professionals is the best way to determine if a trust is right for you. Start with an estate planning attorney and possibly a CPA in your education process. They will discuss all of the options with you so you can make the best decision for your needs.

There are many different types of trusts, each has its own purpose. We’ll go into a few of these in a separate blog. To identify the best kind of trust for your needs, talk to the professionals at the Scott D. Bloom Law office.

To schedule your free consultation,
email us, or call 1-215-364-1111
or 1-855-992-6337 (Toll Free)

CLIENT Testimonial

Scott explained estate planning very thoroughly and in terms we could understand. He let us know our options and we feel that he is very knowledgeable, professional and also a compassionate person. We recommend Scott to our family and friends!
- Fred T., Willow Grove, Pennsylvania

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