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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Monday, 04 July 2016 22:01

Happy Fourth of July 2016

Happy Fourth of July 2016

 

The Fourth of July is probably my favorite holiday other than Christmas.  It is a great time for all of us to reflect upon the founding of this great nation, this wonderful republic, this great experiment. 

 

It sounds kind of strange to think of the founding of this nation as an experiment, but it certainly was.  Never in the history of the world has a nation founded on the principals that the United States was founded on been tried.  As a matter of fact, it is the manner in which we were founded that allows us to create an estate plan in the first place.  We have property rights in this country.  These property rights allow us to manage and dispose of our property how we see fit.  That sounds basic and simple to us, but please remember that this is the EXCEPTION to the way it was in most of the world. 

 

You can read my blog on the Constitution and the Declaration of Independence here.

 

I thank God that I was born an American.  I believe America is exceptional.  I believe our best days are ahead of us.

 

 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

 

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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What shouldn’t I put in my Living Trust?

 

Automobiles

I don’t recommend putting your automobile into a Revocable Living Trust mainly because if you should get into an accident, and the other person sees that your car is owned by a Trust, they may think you are wealthy and look to sue in a situation where they otherwise would not.

Now, if you own a classic car, hot rod, or other collectable car that you plan on keeping for a long period, then it makes more sense to put the auto into the Trust.  Usually these types of cars are not “daily drivers” and pose less of a risk of lawsuit like discussed above. 

  

IRA’s and 401(k)

IRA and 401(k) accounts present a specific problem if we try to put them into a Living Trust by changing the title of the asset.  The problem is that doing so creates a “taxable event” and too much of the value of the IRA will be lost to taxes.  Not good.  So what do we do with IRA’s?  The question depends on your situation.  If you are married, likely the best solution is to name the spouse as the beneficiary (and not a Trust).  If you are not married, then a beneficiary designation can still be utilized to pass the asset on to someone else such as a child.  Another method is to name a specially designed Trust called a Standalone Retirement Trust (or SRT) as the beneficiary.  Using a Standalone Retirement Trust provides some benefits to the beneficiary that an outright gift cannot.  Naming an individual as the beneficiary (and not a Trust) is considered an “outright gift” because once they are entitled to the funds, there is no control over how the funds are to be used (provided they are over 18 years of age).  They get the lump sum and off they go.  You can see how this can be a bad situation for the young, those bad with money, those subject to predators, or even those bad marriages!  In a recent case called Clark v. Rameker, the Supreme Court held that an inherited IRA cannot be shielded from creditors or bankruptcy.  This is why a Standalone Retirement Trust can be so beneficial.  There are other tax advantages to using a SRT that I won’t go into here, but in a nutshell, the distribution may be able to be streached out and keep the beneficiary in a lower tax bracket, and provide opportunity for the IRA to continue to grow. 

  

Other items that shouldn’t go into your Trust

There are other items that should not go into your Living Trust that I won’t cover here.  Please check my future blogs for possible discussion of these items (or of course consult an attorney!)

Please feel free to give me a call and we can review your Estate Planning goals, or start your Estate Plan today!

 

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

 

Thanks 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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Friday, 17 June 2016 02:01

Does my Home go in my Living Trust?

Does my Home go into my Living Trust?

People often ask “what items do I put in my Revocable Living Trust?”  Usually the biggest and most important item is your home.  The process for putting your home into a Revocable Trust is fairly simple.  The attorney will obtain the latest deed to your home if you don’t have one, then he or she will prepare a new deed that transfers the home from you as an individual to you as Trustee of your Revocable Living Trust.  It does not matter if you are still paying a mortgage on your home, it can still be put into the Living Trust.  If you have property outside of California, then an attorney in the other state will need to prepare a deed and have it recorded.  Your estate planning attorney will explain all of the details to you.

 

A “PCOR”, or Preliminary Change of Ownership Report is also filled out and submitted with the deed to the County Recorder’s Office.  This PCOR basically tells the County Recorder that the home is being transferred to a Revocable Trust, and that no reassessment is needed (so property taxes don’t go up!) 

   

It is important to remember that one does not lose control of their property when they create a Revocable Living Trust (sometimes called an Inter Vivos Living Trust, or just Living Trust).  Think of a Living Trust like a bucket that you built.  You decide what to put in your bucket (with advice from an attorney), and what to take out of your bucket should you so choose.  The IRS, as a matter of fact, views this bucket as an extension of you and doesn’t require a separate tax return.  You just do your taxes as normal.  If something happens to you, you can decide who is going to hold your bucket next.  This person is called the Successor Trustee.  Should you kick the bucket, you can decide what happens to what is left inside.  Forgive the attempt at humor.  We can’t take life too seriously! 

 

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

 

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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What Does the Typical Estate Plan Include?

 

Well, let’s start with discussing what a “typical” estate plan is, and is not.  The fact is that there is not really one typical estate plan as everyone’s situation is a bit different.  There is a fairly common set of circumstances that creates a “typical” estate plan, and usually covers most people.  However, there are several situations that require special estate planning, and push some people out of the more typical estate plan.

 

 

Special Estate Planning to Avoid the Federal Estate Tax

 

Most of us don’t have assets that would push us into the realm of needing to worry about federal estate tax.  If you have assets that meet, exceed, or will exceed the Federal Estate Tax Exclusion amount, then you will likely want some non-standard estate planning.  For the year 2016, the Federal Estate Tax Exemption is $5,430,000 for an individual, and $10,860,000 for a married couple.  This means that an individual can leave $5.43 million to their heirs and no Federal Estate Tax will be imposed, and a married couple can leave $10,860,000 to their heirs without worrying about triggering the Federal Estate Tax. 

 

 

Special Estate Planning Required for Other Situations

 

Some other situations that generally require special estate planning include those adults with special needs, or those with children that have special needs.  A Special Needs Trust is used to ensure that those receiving means-tested public benefits don’t become disqualified by receiving an inheritance or other income. 

 

Another familiar situation is where there is a “blended family”.  In these situations, there is a couple or person with children from a previous marriage.  Their desire is to make sure their child or children receive an inheritance.  A married couple with a “standard” Joint Revocable Living Trust is set up in such a way so that the first spouse to pass leaves everything to the surviving spouse.  As you can imagine, in a blended-family situation, the surviving spouse is free to change the distribution scheme and leave the entire estate to whomever he or she wishes.  An A/B Trust prevents this by becoming irrevocable upon the passing of the Trustor that dies.

There are other “non-standard” situations that I won’t discuss here for the purpose of brevity.  If you have questions, please contact me, or an attorney licensed in your jurisdiction.

 

 

So get on with It!  What is in a Typical Estate Plan?

 

Okay!  So for the vast majority of us, and especially those of us in San Diego, the typical Estate Plan includes:

  • If you are single, it includes a Revocable Living Trust (sometimes called an Inter Vivos Trust, Living Trust, or even perhaps just a Trust)
  • If you are married, it includes a Joint Revocable Living Trust
  • A Pour-Over Will
  • Power of Attorney
  • An Advance Healthcare Directive (sometimes called an AHCD, or AHD)
  • It also includes a HIPPA release
  • A Certification of Trust
  • Trust Summary
  • The funding of the Trust with the family home

 

So as you see, it can be a bit different for each person.  Call me today and let’s get your plan together and get you some peace of mind!

 

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

 

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 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, 14 June 2016 23:41

What Does Medicare Cover?

What Does Medicare Cover?

 

What is Medicare?  What does Medicare cover?

I can’t possibly tell you everything you want to know about Medicare, or all of the options.  What I can do is provide a bit of a birds-eye view or summary about some of the pertinent parts of Medicare and how it relates to estate planning and long-term care.

 

The program is available to most people over 65 years old.  Medicare covers medical expenses, hospital care, and post-hospital care.  It also provides some coverage for prescription drugs under “Part D”.

 

Medical expenses:

Medicare covers 80 percent of approved qualified medical expenses and includes things like doctors and surgical services.

 

Hospital Care:

Hospitalization is covered for 90 days per “spell of illness” with a deductible for the first 60 days, and a co-payment of $315 per day for the remaining 30 days.

 

Post-hospital skilled nursing home care:

If the hospital stay is at least 3 days, and only of the post-hospital care needed is “skilled care”, Medicare will cover 100% of the costs for the first 20 days, and a co-pay of $157.50 per day for the next 80 days for a maximum of 100 days of care.  Availability is very limited. 

 

Does Medicare Cover Long-Term Care?

No, Medicare does not cover long-term care.  As described above, Medicare only provides some home care and it must be under very specific situations. 

 

Other Medicare aspects include (but are not limited to):

  • There are “gaps”, and private policies can be purchased to fill these gaps.  These are “Medigap” plans. 
  • Medicare doesn’t cover hospital costs beyond 150 days
  • Medicare doesn’t cover skilled nursing home costs beyond 100 days
  • Medicare doesn’t cover ANY custodial nursing home care or non-skilled home health care

 

Medicare Part D

Medicare Part D is an optional prescription drug coverage.  It is automatic in certain situations for certain people on Medicaid and others.  There are some co-pay rules and many twists and turns that I won’t get into here.   The enrolment period is 3 months prior to, and up to 3 months after your 65th birthday.  A person can only change their plan once a year.  There are also many different plans from which to choose that I won’t get into in this (or likely any) blog.  I simply wanted to provide a general background into Medicare.

 

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

 

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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What is the difference between Medicare, Medicaid, and Medi-Cal?

In a Nutshell

In a nutshell, Medicare is a federal program that provides basic health insurance and prescription coverage to those 65 years of age and up, or those under 65 years old that are eligible for Social Security Disability benefits.  Medicare does not pay for long-term care.  Some skilled care is provided for a short time and if certain requirements are met, but it is not the norm.

 

Medicaid is a federal and state program that provides health care coverage for persons of all ages if they have a low income and limited resources.  The definition used is that Medicaid is a government insurance program for persons of all ages whose income and resources are insufficient to pay for health care.  Therefore, if you make over a certain amount of money, you won’t qualify for Medicaid.  Medicaid pays medical costs and long-term care costs.  Medicaid also has a right to seek reimbursement from the decedents estate for long-term care, and also for medical care costs.  There are several rules and circumstances involved, and will be discussed in another one of my blogs.

 

 

Medi-Cal is also a program that provides care to persons with low income and limited resources. It is what the federal Medicaid program is called in California, and is therefore essentially the same thing. 

 

 

All of these programs will be discussed in more detail in my blog posts.

 

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

 

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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ILIT Trusts – Who should be the Trustee and Beneficiary?

Likely the most important thing to know is that the insured should not act as the Trustee in order to preserve the Irrevocable Life Insurance Trusts benefits.  If the insured’s spouse is also an insured and not the beneficiary, he or she could serve, or even perhaps an adult child, however whomever is chosen must have the time and sophistication to manage the ILIT Trusts responsibilities.  When policy premiums are due, the Trustee must send out Crummey Letters (from the case of the same name), wait the required amount of time, then pay the policy premium.  The Trustee also must file tax returns manage the ILIT’s bank account if necessary.

 

 

Who can be the Beneficiary of my ILIT?

 

Basically anyone you choose can be the beneficiary of your Irrevocable Trust.  Of course most people normally select their children or other loved ones. 

  

Can’t I just Name Someone else as the Policy Owner Instead of Creating an ILIT?

 Well, the problem with this method is similar to the problems that are created if you put your child’s name on the deed to your house to avoid estate planning.  One problem is that if your child passes away before you do, the value of the policy will be included in the child’s estate for federal estate tax purposes which may be a problem.  Also, you will lose control over the policy and the child can cash the policy out, cancel it, or even change the beneficiary to another without even having to ask you.  Creditors may even have access to the policy should the child get into trouble. 

 

 

Please see my Blog for continued discussion of various aspects of ILIT Trusts.

 

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 Revocable Living Trust, your Irrevocable Life Insurance Trust (ILIT), or other Estate Planning goals today.  If you have specific estate planning objectives, I can help create solutions. 

 

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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