Recent Law Soon to Allow Disabled Persons to Create Their Own Special Needs Trust

 

What is a Special Needs Trust?

Disabled persons who receive means-tested public benefits like Supplemental Security Income (SSI) and Medicaid must have no more than $2000 in countable assets in order to qualify (among other requirements).  A Special Needs Trust is used to prevent disabled persons from being disqualified from receiving means-tested public benefits if they are to receive the benefits of trust assets or a personal injury award.  

 

Types of Special Needs Trusts

There are three types of Special Needs Trusts – first-party special needs trust, third-party special needs trust, and pooled trust special needs trust.  For this blog, we will only be discussing first-party and third-party special needs trusts. A pooled trust is a group trust that is administered by a nonprofit for many beneficiaries.

The main – and most important difference – between the two types of trusts is that a third-party special needs trust cannot hold funds belonging to the beneficiary (the person with special needs).  So, if a person (under 65) with special needs wins a personal injury award, or inherits money directly, and not thru a bequest directly to a third-party special needs trust, they will need to have a first-part special needs trust established.  Another key difference between a first-party and third-party special needs trust is that because a third-party special needs trust holds assets that never belonged to the beneficiary, the government is not entitled to reimbursement from trust assets after the beneficiary passes unlike a first-party special needs trust.  Thus, a third-party special needs trust can pass assets on to other family members after the beneficiary with special needs passes.  Also, a third-party special needs trust can be established for the benefit of a person with special needs by anybody other than the beneficiary.  A first-party special needs trust must be established by the person’s parent, grandparent, guardian, or the court – but keep reading below for recent changes to this law.

 

Recent changes to Special Needs Trust Law

As it stands this very minute, the law presumes that a person with disabilities lacks the capacity to establish their own first-party special needs trust, and therefore a parent, grandparent, guardian, or the court must establish it for him or her.  This is about to change.  In December of 2016 the house passed H.R. 34, which includes the Special Needs Trust Fairness Act and makes a simple modification to 42 U.S.C. 1396p(d)(4)(A).  The president has promised to sign this into law.  The significant change that this law brings about is that it allows a disabled person with mental capacity to establish his or her own first-party special needs trust.   

 

So, to summarize:

  • A Special Needs Trust is used to prevent disqualifying a person receiving Medicaid and/or Supplemental Security Income (SSI)
  • A first-party special needs trust holds assets that will belong to the beneficiary (such as a direct inheritance, or lawsuit award)
  • A third-party special needs trust holds assets that never belonged to the beneficiary (such as an inheritance that is being given to the special needs trust directly)
  • A first-party special needs trust can soon be established by a disabled person under 65 years old with mental capacity instead of needing a parent, grandparent, guardian, or courts intervention
  • A third-party special needs trust can be established by anybody except the person with special needs
  • The government can seek reimbursement from a first-party special needs trust after the beneficiary dies, whereas this does not happen with a third-party special needs trust

 

If you have any questions, or need to establish a Special Needs Trust, please call me today and let’s start planning.

 

See lots of estate planning information on my website at: www.myestate-plan.com

 

 

William Daniel Powell (Dan)

619-980-2297

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information

Also, please remember that I speak in generalities in my blog and on my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.

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Tuesday, 07 June 2016 00:24

Long Term Care - Part Two

 

Long-Term Care Part 2

 

What Can I Do to Plan for Long-Term Care?

 There are a few options available in planning for long-term care.  Some of these options are:

  1. Private long-term care insurance
  2. “Self-Insurance” or paying out-of-pocket for expenses
  3. Life insurance to replace depleted assets used for funding long-term care
  4. Utilizing a Trust to provide some asset protection
  5. Use up all of your assets and live out your days in a nursing home

  

Some of the options are more desirable than others, and some may be out of reach for some people.

 

1. Private Long-Term Insurance

 Using insurance to pay for long-term care can be a great option if it is available to you.  First of all, you must be “insurable”.  This may vary from company to company.  Next the premiums must also be affordable.  Quotes for premiums are higher for older persons, and go up as you age.  Premiums for women are also usually higher than those for men.  I guess that’s the price of living a longer life!

Some questions and benefits that you should look for in long-term care insurance include (but aren’t limited to):

  • The ability to stop paying premiums while you are receiving benefits
  • Home care as well as nursing home care
  • Sufficient benefit payout to cover costs ($250 per day or more)
  • Duration of benefits (How long will the benefits be paid? 4 years? 5 years?)
  • When do benefits begin after it is established that care is needed
  • Is renewal guaranteed?

  

2. Self-Insurance

 Here, option 2 and 5 are pretty close to the same.  The real difference being how much income do you have and will it continue during your incapacity.  If it won’t continue, do you have sufficient net worth to provide your own long-term care and still provide all that you wish to your spouse, family, and loved ones?  Costs for long-term care obviously varies with the level of care required, and quality of life desired.  Do you want to live in an assisted living facility in La Jolla, your home, El Cajon (not that I have a problem with El Cajon!) or somewhere else?  If you can afford about $100,000 per year for long-term care, this may be a good option for you.  Also, you could use option 3 to replace or supplement consumed resources used for long-term care if you so desire.

  

3. Life Insurance to Replace Depleted Assets Used for Paying for Long-Term Care

 This option may be used in conjunction with any of the other options if you choose.  As long-term care costs arise, and as the bills are being paid, your assets are being depleted.  Life insurance can be employed to replace that value so that your spouse, family, and loved ones are still taken care of.  Should you not need to consume assets for long-term care, the life insurance and the assets will be there for your beneficiaries.

  

4. Utilizing Trusts for Long-Term Care

 The use of a Trust will be discussed in another blog. 

  

5. Use Up All of Your Assets and Live Out Your Days in A Nursing Home

 Again, like option 2, you are basically taking care of long-term care costs on your own.  If you have sufficient assets, then you have lived a blessed life.  If you do not have many assets and do no other planning, this will unfortunately be the default plan.  One hopes to never need long-term care, and I think most of us would prefer another option to this choice.  Choices are great, and we need to use them when we have the opportunity.

 

See lots of estate planning information on my website at: www.myestate-plan.com 

 

Please feel free to give me a call today and we can review your situation and other Estate Planning goals.  Everyone’s situation is different, and I can help create solutions. 

 

William Daniel Powell (Dan)

619-980-2297

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information

Also, please remember that I speak in generalities in my blog and my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.

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Tuesday, 31 May 2016 01:58

Dave Ramsey Said I Only Need a Will

Dave Ramsey Said I Only Need a Will

First of all, let me start by saying that I respect Dave Ramsey.  Dave Ramsey, however, is not a lawyer, and he is certainly not a San Diego estate planning attorney.  Why is this relevant?  Well, Dave Ramsey quite often suggests that a Will is something that every person needs.  Moreover, he has said in his book that he thinks Trusts are unnecessary due to their cost of creation.  I agree with Dave Ramsey in that everybody needs some kind of estate plan whether that is a Will based plan, or Trust based plan.  A Will alone (or even in conjunction with the Living Will and Power of Attorney that Dave sells on his website) is not the one-size-fits-all solution that Dave Ramsey seems to suggest.  This is generally so because of the cost of Probate in California, and specifically so because of the cost of homes here in San Diego. 

 

Why can creating a Will cost more than creating a Revocable Living Trust?

Creating a Will based plan can cost almost as much as a Revocable Trust in certain situations, but it is generally a little more affordable.  A proper estate plan contains more than just a Will or just a Trust.  So much of the cost of creating a plan is the same in either option.  Also, if it takes 10 pages to dispose of items to those you choose, it will take 10 pages in a Will and 10 pages in a Trust, so the drafting time is very similar.  The real cost difference is in the cost of Probating a Will.  There is a link to one of my Blog posts above for you that details the cost of Probate in California.  The cost of a home here in California just means that the cost of Probate can go higher. 

 

So is a Will Based Plan Wrong?

No, I wouldn’t go so far as to say a Will based estate plan is always wrong.  For those with few assets, a Will may be preferred because they can take advantage of California’s simplified Probate procedure.  There are certain requirements for taking advantage of California’s Simplified Probate Process that you can read here.  But as I have stated before, a Revocable Trust centered estate plan is usually preferred to a Will because of the powers that a Living Trust provides such as:

  • A Trust is private where a Will is public record
  • A Living Trust helps you if you become incapacitated
  • Wills must be probated and the California Probate process costs time and money
  • Trusts allow for greater control over how and when the beneficiary is to receive property

 

Please feel free to give me a call today and we can review your situation and other Estate Planning goals.  Everyone’s situation is different, and I can help create solutions. 

 

See lots of estate planning information on my website at: www.myestate-plan.com 

 

Thank-you for reading.

 

William Daniel Powell (Dan)

619-980-2297

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information

Also, please remember that I speak in generalities in my blog and my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.

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Saturday, 21 May 2016 01:02

Standalone Retirement Trust Part 1

Standalone Retirement Trust – Estate Planning for IRA’s

 

Clark vs Rameker

Clark versus Rameker was a case that was heard by the United States Supreme Court and it was a 9 to 0 decision.  The decision was handed down in June of 2014.  The Supreme Court held that inherited IRAs are not “retirement funds” within the meaning of federal bankruptcy law.  The effect of this decision is that inherited IRAs are available to satisfy creditors’ claims if the person inheriting them declares bankruptcy. 

 

Because of this decision, and if you’d like to protect your beneficiary’s inheritance, for the purposes of Estate Planning, we need to take some steps to make sure your beneficiary is protected.

 

In order to protect your beneficiary, a Standalone Retirement Trust (or SRT) should be created instead of just naming a beneficiary on your IRA.  Otherwise, if your beneficiaries have creditors, lawsuit judgments against them, or other predators, the IRA funds can be reached.  Naming a beneficiary on your IRA instead of using a Standalone Retirement Trust means the IRA funds will be given “outright” and gifts given outright are more exposed and generally not as preferred as giving a gift in Trust.  A Trust provides more protection than a gift given outright will ever provide.  Please see my Blog for more on gifts given outright versus gifts given in trust

 

Essentially what happens is that the funds will go to a third party Trust and because the Beneficiary did not create the Trust, did not use his or her own money for the Trust, and cannot modify the Trust, certain protections can be utilized to protect the beneficiary.  The trust must be carefully drafted in order to properly manage the funds and prevent mandatory payouts that will require emptying the IRA in as little as five years.  The Trust must be drafted in such a way as to ensure that the Trust itself qualifies as a “Designated Beneficiary.” The effect of having the Trust as the designated beneficiary means that the Trust will be able to take out what is called “minimum required distributions” (these are minimum dollar amounts that, according to the rules, must be payed out of the IRA) according to the beneficiary’s life expectancy, and not the plan participant’s life expectancy.

 

Please see my Blog for more discussion of Standalone Retirement Trusts and other aspects of Estate Planning.

 

Please feel free to give me a call and we can establish your Revocable Living Trust, Standalone Retirement Trust, Irrevocable Life Insurance Trust (ILIT), or other Estate Planning goals today.  If you have specific estate planning objectives, I can help create solutions. 

 

See lots of estate planning information on my website at: www.myestate-plan.com

 

Thanks for reading.

 

William Daniel Powell

619-980-2297

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information

Also, please remember that I speak in generalities in my blog and my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.

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Tuesday, 17 May 2016 02:20

Elder Law and Estate Planning Part One

Elder Law Planning Part 1

 

What is Elder Law?

 

Elder law is simply the legal practice that focuses on the issues that affect the elder or older population.   That is kind of a big answer isn’t it? Well, it is. Elder law is not just cases that involve elder abuse, but any issue that affects the elderly. I am an Estate Planning attorney here in San Diego, and many issues that affect almost all of my clients, young or old, also affect the elderly among us. Estate planning touches almost all of the elder law issues that come to mind first such as:

  • Preventing elder abuse
  • Preventing elder financial abuse
  • Protecting and preserving assets
  • Providing for and planning for incapacity
  • Passing on our property to those we wish to pass it to
  • Managing healthcare costs
  • Managing long term care

 

An Estate Planning Attorney Better Understand Elder Law Issues

 

If estate planning and elder law are not inextricably linked, they are fast becoming more and more blended. With the issues of elder law that cross-over to estate planning, and the growing population of seniors, an estate planning attorney does his or her client a disservice by not addressing these issues with the client, even if the client does not take it upon themselves to ask. The Society of Actuaries has said that the population is aging, and growing faster than the general population. The Society of Actuaries has said that from the year 2000 to 2050, those in the age group of 65 years of age and older will grow by 147 percent, while those younger than that will only grow by 49 percent. You can look at the Society of Actuaries website here.

 

This increase of longevity is concerning because for many of us it presents a “risk” to our financial well-being. It is a risk to our financial well-being because of rising healthcare costs, problems that the Affordable Care Act (or ACA or Obama-Care) created, and because long-term care costs are also going up.

 

 

All of these issues and more will continue to be addressed in my blog.

 

See lots of estate planning information on my website at: www.myestate-plan.com

 

Please feel free to give me a call today and we can review your situation and other Estate Planning goals. Everyone’s situation is different, and I can help create solutions.

 

Thank-you for reading.

 

William Daniel Powell (Dan)

619-980-2297

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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This document is for informational purposes only. Nothing in this is to be considered legal advice. Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship. If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction. I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information

Also, please remember that I speak in generalities in my blog and my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.

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Trustee Compensation: How Much Are Trustees Paid?

What is a Trustee?

One that creates a Living Trust (or Irrevocable Trust, or other kind of Trust) is called the Settlor or Trustor.  The Beneficiary receives the benefit of the Trust and is said to hold the equitable title to the property.  The Trustee hold the legal title and is essentially the manager of the property for the benefit of the Beneficiary.  Most of the time when a couple or individual sets up a Revocable Living Trust, they will be the Settlor, Trustee, and the primary Beneficiaries.  In the case of a married couple, they will be considered co-trustees.  A co-trustee can usually act alone, or in conjunction with the other co-trustee, and takes over if the first Trustee dies or becomes incapacitated.

 

What is a Successor Trustee?

A Successor Trustee takes over as Trustee upon the occurrence of a specific event.  Usually this event is when the Trustee dies or loses capacity.  The successor Trustee is usually a trusted family member or friend of the family.  Sometimes the Successor Trustee will be a Professional Fiduciary Trustee.  This may be advantageous in a variety of situations including where the Trustor has no family, where the children Beneficiaries don’t get along, or where the Trust may continue for a long period of time after the Trustor death.

 

Trustee Compensation

The Trust document itself can detail how much the Trustee compensation will be, and how it is to be paid.  California Probate Code section 15680 says in part that if the Trust provides for compensation, then the Trustee is entitled to such compensation, and that the amount may be adjusted up or down by the court if the Trustee duties are substantially different from those contemplated when the trust was created, where the compensation in accordance with the terms of the trust would be inequitable or unreasonably low or high, or in extraordinary circumstances calling for equitable relief.  Further, the Probate Code dictates that any such raising or lowering of compensation will only be applied prospectively after the court order is made.

 

California Probate Code also says that if the Trust document does not specify what the Trustee compensation will be, then the Trustee is entitled to “reasonable compensation” (Probate Code section 15681).  Moreover, the court can order that the compensation continue for as long as the court determines proper in either situation – where the Trust document details compensation, and when the Trust document does not (Probate Code section 15682).

 

There are other rules and situations that affect Trustee compensation that will not be discussed here in this particular blog. 

 

See lots of estate planning information on my website at: www.myestate-plan.com

 

Please feel free to give me a call and we can establish your Living Trust or other estate planning objectives today. 

 

Thanks for reading my blog.

 

William Daniel Powell

619-980-2297

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information

Also, please remember that I speak in generalities in my blog and my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.

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Published in Trustee Compensation
Saturday, 30 April 2016 22:44

What is a Charitable Remainder Trust?

What is a Charitable Remainder Trust?

 

 

One way to think of a Charitable Remainder Trust (or CRT) is like a reverse mortgage that you establish with a participating charity.  You promise certain property to a charity, and in return they pay you a certain sum of money per year.  The amount the charity will give you yearly will depend on the value of the property you promise to give the charity, and your age when the charitable remainder trust is established.  Certain organizations offer charitable remainder trusts, and others do not.  Further certain organizations offer the legal service of drafting the CRT for free.  They usually do this to insure the Trust is drafted in the manner they prefer, and to keep the cost of having to review each charitable remainder trust to a minimum.

 

 

Even without a participating charity, a charitable remainder trust can be set up by an individual under the Internal Revenue Service Code.  This would still be an irrevocable trust like in the previous example.  The person that sets up the Trust called the Settlor or Trustor, establishes the irrevocable trust with him or herself as the beneficiary.  They receive a percentage of income, and the remainder goes to a charity.  This is usually considered an advanced estate planning method, but the classification is really pretty unimportant.  The only reason for the distinction is that it is usually used by persons with larger estates looking to reduce estate tax liability.  However, it can be used by anyone.  Some client’s situation is such that they find this option interesting.  Their situation normally is one where they either have huge charitable intent, or have no living relatives and huge charitable intent.  Whatever your situation, we can always discuss various options.

 

See lots of estate planning information on my website at: www.myestate-plan.com 

 

Give me a call today and see how affordable a quality Estate Plan that is 100% attorney advised, and 100% attorney prepared can be.   Effectuate your intentions, obtain your desired results, provide for those whom you care about.

 

 

Thanks for reading my blog.

 

 

William Daniel Powell

 

619-980-2297

 

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information.

Also, please remember that I speak in generalities in my blog and my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.

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Does California Have an Easier Probate Process?

 

The simple answer to this question is yes, California has a simple and faster probate process for small estates that qualify. 

 

 

What is Real Property, and What is Personal Property?

 

Real Property is, generally speaking, land and everything that is attached or built into it.  Personal Property is everything else that is not Real Property such as anything that is tangible, movable property that is capable of being touched, felt, seen, or perceived by the senses. 

 

 

Who may use the California Small Estate Affidavit?

 

Heirs of the estate may use the small estate affidavit process.  It is not likely a good idea to use this process if the estate has a large amount of debt or where the estate is insolvent, or where the beneficiaries disagree about how the assets should be distributed.  In order to use this small estate procedure, 40 days must have passed since death, and no formal probate proceeding may have been opened.  Further, the estate assets (real and personal) must be valued at, or less than $150,000, and the value of the assets are determined at the time of the decedents death.  If the decedent owned real property, California Probate Code section 13200 provides for the transfer of real property valued up to $50,000 by the affidavit procedure (and there are some different requirements associated with this). 

What Assets Are Involved in the $150,000 Limit?

  • Bank accounts
  • Stocks, bonds, or mutual funds
  • real property valued at up to $50,000
  • similar type assets owned in the decedents name alone

What Items Are Excluded from the $150,000 Limit?

The items not included in the decedents estate include:

  • Property held in joint tenancy
  • Items held in a Trust, or Living Trust
  • Cars or vehicles
  • Retirement accounts such as an IRA
  • Life insurance or other accounts with a beneficiary designation
  • Pay on Death accounts

 

Because we live in the San Diego area, the requirement that the real property be valued at less than $50,000 is not usually a reality.  If real property is owned, it is almost always advisable to have a proper estate plan in place.  Not just to avoid probate, but to plan for incapacity, and better control how our estate is handled after our passing, and potentially provide some protection for our beneficiary from predators, creditors, bad marriages, or even from themselves.  

 

See lots of estate planning information on my website at: www.myestate-plan.com

 

For this and other significant reasons, a proper Estate Plan is important to have in place.  We do our best to care for ourselves and those we care most about.  Call me and let’s get your Estate Plan together to get you the peace of mind it provides.

 

Thanks for reading my blog.

William Daniel Powell

619-980-2297

This email address is being protected from spambots. You need JavaScript enabled to view it.

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information

Also, please remember that I speak in generalities in my blog and my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.

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What is The Marital Deduction in Federal Estate Taxes?

 

 

Unlimited Marital Deduction

 

What is the Unlimited Marital Deduction? The Unlimited Marital Deduction allows the first spouse to die to transfer an unlimited amount of property to the surviving spouse free of Federal Estate Tax.  This does not mean that the second spouse to die will not have any Federal Tax liability.  Whether the second spouse to die will owe federal estate tax depends on the size of the estate when the second spouse passes.  In 2016, if the estate is less than $10,900,000, the spouses can pass all of their estate to their heir’s federal estate tax free (as long as it is properly passed).

 

 

Estate and Gift Tax Exclusion

 

In 2016, the IRS has set the Estate and Gift Tax Exemption amount at $5.45 million dollars for an individual.  Thus, a married couple can leave $10,900,000 to their heirs free of Federal Estate Tax.  This Estate Tax Exclusion amount is indexed and adjusted for inflation and was increased from $5.43 million in 2015.

 

 

Portability

 

Now what is Portability? Portability is the ability of the second spouse to use the unused estate tax exclusion amount of the first spouse to die.  If the first spouse to die does not use all of their estate tax exclusion, this is called the Deceased Spousal Unused Exclusion Amount or DSUE.  This unused portion used to be lost, but now portability can save this unused amount for the benefit of the second spouse upon their passing.  Upon the second spouses passing, their applicable Estate Tax Exclusion (in 2016 it is $5,450,000) is their own Estate Tax Exclusion amount plus their deceased spouses DSUE amount. 

 

 

How much of the Marital Deduction Should be used?

 

While an unlimited amount can be passed estate tax free from the first spouse to the second when the first spouse dies, care must be taken because this can increase the taxable estate of the second spouse.  Where spouses own significant assets, advanced planning can be used to reduce the federal estate tax liability.  This is the case when an individual or couple owns more than the applicable Estate Tax Exclusion amount.

 

See lots of estate planning information on my website at: www.myestate-plan.com

 

Please see my blog for more on Federal Estate Tax and advanced planning techniques.  Call me today and let’s get your Estate Plan together.

 

Thanks for reading my blog.

 

William Daniel Powell

619-980-2297

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information

Also, please remember that I speak in generalities in my blog and my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.

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Why Does a Living Trust Help if I get Alzheimer’s?

 

What is Alzheimer’s Disease and Dementia?

According to the statistics 1 in 3 seniors dies with Alzheimer’s or another form of Dementia.   Alzheimer’s is a specific form of Dementia that attacks the brain.  Some facts about Alzheimer’s include:

  • Alzheimer’s develops slowly
  • Alzheimer’s has no cure, but treatments can slow its progression
  • There is no cure for Alzheimer’s disease
  • Alzheimer’s gets worse as time passes
  • It is not a normal part of aging to develop Alzheimer’s
  • The progression of Alzheimer’s disease usually becomes severe enough to interfere with daily life

 

Dementia is similar to Alzheimer’s Disease.  Dementia is a general term for a mental disease that progresses to the point that the decline in mental ability eventually becomes severe enough to interfere with daily life.

 

The number of American’s with Alzheimer’s is growing and is expected to double or triple in the next thirty-five years.  The majority of people with Alzheimer’s is age 65 or older.  With American’s living longer these days, the threat seams to loom over us all.  According to the Social Security Administration, a man reaching age 65 today can expect to live to age 84, and a woman can expect to reach age 86.  See the figures for life expectancy here:

ssa gov life expectancy

 

You can read more about Alzheimer’s at the Alzheimer’s Association here -  Alzheimer’s Association Website , or by performing a Google search for an association of your choosing.

 

So How Does a Living Trust Help if I lose Mental Capacity?

A Will is said to “speak on death”.  That means a Will only becomes effective upon the person that creates the Wills (the Testators) death.  A Trust has the power to manage property by dictating who has the power to act for you should certain circumstances occur.  The person that creates a Trust is called the Trustor or Settlor, the Trustee is the person that manages Trust property, and the beneficiary receives the benefit of the Trust property.  When one creates a Living Trust (also called a Revocable Living Trust, or a Revocable Trust) they are generally all three of these people or entities.  Provisions in the Trust can dictate how the incapacity of the Trustor will be determined.  Upon a determination of incapacity, the successor Trustee will assume responsibility and manage the Trust.  This includes caring for the now incapacitated Trustor according to his or her wishes memorialized in the Trust document.  This is a very important benefit to creating a proper Estate Plan that includes the proper array of documents including the Trust, Pour-over Will, Certificate of Trust, Durable Power of Attorney, Advance Healthcare Directive, and others.  Without all the proper documents in place prior to someone loosing mental capacity, court proceeding will be needed prior to managing the patient’s affairs.  This can be costly both in time and money.

 

For this and other significant reasons, a proper Estate Plan is important to have in place.  We do our best to care for ourselves and those we care most about.  Call me and let’s get your Estate Plan together to get you the peace of mind it provides.

 

See lots of estate planning information on my website at: www.myestate-plan.com

 

Thanks for reading my blog.

 

William Daniel Powell

619-980-2297

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information

Also, please remember that I speak in generalities in my blog and my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.

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