I have recently become acquainted with a bank who does business very different than traditional banks.  As we do Trust funding for many of our estate planning, elder law, and asset protection packages, we have the opportunity to interact with many banks around the area.  One of the recent banks that I have been impressed with because of their understanding of revocable and irrevocable trusts is Seacoast Bank.  There interest rates much higher than many of the local banks and offer trust services at a good value.  They recently interviewed me about Florida estate planning and asset protection and here is the link to the interview.

Remarriage Protection

Many lawyers proclaim to have remarriage protection in their estate planning documents, but few estate plans deal with these issues completely. A traditional trust that deals with remarriage will include language that permits or limits the surviving spouse rights to benefit in the event of future marriage.  While this may seem like a good way of dealing with this potential conflict, it is often insufficient to protect the surviving spouse and kids from the numerous methods that can be used to gun a trust prior to the marriage.  In the end, your kids are the ones that loose out.
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Like many deaths, the death of the legendary pop star Prince came as a shock and surprise for the world.  What shocked estate planning attorneys even more so is the possibility that Prince may have died without a will or an estate plan, which could have huge ramifications for his estate and heirs.

Estate planning has many benefits that include allowing a person the peace of mind of knowing how their assets will be divided among his or her heirs.  Estate planning is also one of the best ways a person can preserve his or her wealth, avoid costly taxes, and ensure friends and loved ones are provided for.  Many individuals also choose to protect their assets with certain types of trusts.

Prince died at the age of 57 and his estate is estimated to be worth around $300 million.  What many people do not realize is that when a person’s estate goes through the probate process without any estate planning, the estate will be taxed by the federal and state government.  It is likely that his estate will be hit by a federal estate tax rate of 40 and state tax rate of 16 percent.  This means Prince’s estate may have to pay more than $120 million in taxes before it can be passed to his heirs.

Foreign Wills: Will a Florida Court recognize them?

The world is becoming a more global community and with that means the United States has seen an increase in the amount of foreign-born individuals living, visiting, and investing in the U.S. economy. For instance, 12 percent of residential home purchases in Florida were made by foreign buyers.  The question soon becomes how do foreign citizens pass their assets to loved ones in the U.S. and in other counties.  Is a will from another country valid in America?

Florida law allows a foreign will to be admitted to probate if the will is valid under the laws of the country where the will was executed.  This is great news for foreign Florida citizens because it means usually a will be valid even if it doesn’t comply with strict will formalities set by the state.  However, the Florida Probate Code has made two exceptions for a type of will that is never valid under Florida law.  These exceptions are when the will is a holographic will or a nuncupative will.
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Trust FundingTrust Funding

Trust funding is one of the most important aspects of an estate plan or asset protection plan. Attorneys, and clients, hear so much about trust funding, but rarely is it truly understood or implemented properly. Given how important trust funding is, it is a wonder why most estate planning lawyers leave the funding to the client. We regularly see clients who bring us copies of the parents fancy estate planning binders where the plan or many of the benefits to the plan fail because the trusts were never funded or even worse were funded improperly. That is why many of our estate plans and asset protection plans include trust funding.  It is important to understand proper trust funding to ensure that the planning works the way it was intended.
The first key step in trust funding is to identify what type of estate plan the client is pursuing.  Is the client looking for a traditional estate plan with revocable trusts, an asset protection plan that uses one or more irrevocable trusts, or a plan to protect assets from disability or long term care costs.
A traditional revocable living trust is an estate plan wherein the client identifies who gets to benefit from the client’s assets when the client is well, disabled, and after death. A critically important point to funding a revocable living trust is if all assets funded in the trust are still 100 percent available to creditors, predators, and long-term care costs of the grantor while alive. The assets can continue to be made available to the creditors and predators of the beneficiary after the death of the grantor without proper planning.

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Sandwich Generation

“The Sandwich Generation” is an interesting phenomenon occurring in the estate planning world.  The term was coined to refer to the group of adults in the world today that must juggle the responsibilities of caring for their own families, including children, along with the responsibility of caring for their senior parents.  Many adults who are part of the Sandwich Generation have these dual responsibilities and with them come the emotional, physical, and financial strain of caring for two generations of family.

It’s no secret that people are simply living longer than they did even a few decades ago.  USA Today recently reported that people born in 2012 will have an average life expectancy of 78.8 years.  According to the University of California, the average life expectancy in America during the 1970s was around 68 years, and the data suggests the expectancy will only continue to rise.  What this means is that “The Sandwich Generation” will soon become the norm and it will be expected for adults to provide for their senior parent when they may be unable to do themselves.

The good news is that estate planning can alleviate this pressure by providing your parents with an affordable financial and health care plan as they age.

Sandwich Generation Step 1: Start the Difficult Conversation
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Can a grantor be a trustee?

The Irrevocable trust is one of the most valuable tools for estate planning and Florida asset protection that is available. These trusts are not only a great way to pass assets outside of probate, but also allow assets to be protected from creditors. For an irrevocable trust to be valid, a person or entity must serve as the trustee, or manager, of the trust. The Trustee is a person who is responsible for accounting and managing the trust’s assets for the beneficiaries of the trust. Naturally, a question our firm often receives is can I (the grantor/creator of the trust) serve as the trustee?

Can a grantor be a trustee of an Irrevocable Trust? The now outdated school of thought was that a grantor should never serve as the trustee because it could potentially make the trust’s assets available to the grantor’s creditors – thus defeating the asset protection benefits offered by an irrevocable trust. The belief came from section 2036 of the tax code, which states any trust where the grantor retains the right to possess or enjoy the property or designate who will possess and enjoy the trust property will make the principal of the trust includable in the grantor’s estate at death for estate tax purposes.

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Should Seniors Enroll In A Medicare Advantage Plan Or Stick With Traditional Medicare?

A recent article by Wendell Potter on medicareresources.org discusses the advantages and disadvantages of Medicare Advantage plans versus traditional Medicare in providing adequate
care to seniors. For some people, particularly those without serious illnesses, Medicare Advantage may be the best choice. This is because some Medicare Advantage plans offer
benefits not provided by original Medicare, such as dental coverage, vision coverage, hearing aids, gym memberships and more.

However, elderly Americans with serious ailments might be better off sticking with Medicare. Similarly, people who are already enrolled in a Medicare Advantage plan and develop a
serious ailment might want to drop the Medicare Advantage plan and return to traditional Medicare. Why? Medicare provides what the article refers to as “unfettered access” to
treatments and physicians. That is, people on Medicare have greater access to doctors and facilities of their own choosing.

Another potential problem with Medicare Advantage plans is they empower Utilization Management nurses to make decisions about the type of care received by patients. These nurses
work for the Medicare Advantage plan provider. They likely have no direct contact with the patient and do not fully understand his or her specific needs. Utilization Management
nurses have the authority to deny coverage for treatments desired by patients and recommended by their attending physicians.

In the article, Potter quotes Judith Stein, Executive Director of the Center for Medicare Advocacy in Connecticut. Stein summarizes the issue this way:

“Private Medicare Advantage plans work for people when they are relatively well, but fall short of traditional Medicare when they are sick or disabled. This is particularly true for
our clients with long-term and chronic conditions, many of whom also have low incomes. They are often denied coverage for necessary skilled care, or it is terminated before it
should be, while the same coverage would be available in traditional Medicare.”

Given the high cost of medical care and the shortcomings of Medicare Advantage plans, an  approach might be to choose traditional Medicare and supplement with a Medigap
plan. Visit https://www.medicareresources.org/blog/2015/11/19/why-mom-went-back-to-traditional-medicare/ to
read the entire article.

What You Need To Know About Financial Elder Abuse

Let’s start with a definition. Financial elder abuse, also known as material exploitation, is the illegal or improper use of an elderly person’s funds, property, or assets. Examples
of this type of abuse include, but are not limited to:

  • Cashing an elderly person’s checks without authorization or permission
  • Forging an older person’s signature
  • Misuse or theft of an older person’s money or possessions
  • Deceiving or coercing an older person into signing any document,
    such as a contract, will, title, etc.
  • Telemarketing scams. This can involve making exaggerated claims
    about investment returns, scare tactics and other fraudulent acts to get seniors to send the perpetrator money or credit card information
  • The improper use of conservatorship or power of attorney

It is estimated that every year some five million seniors fall victim to financial elder abuse. The number of victims may well be considerably higher. Many seniors are unaware that
the financial abuse is taking place, while others are unwilling to report it out of embarrassment or fear for their safety.

Maybe you suspect that an elderly family member or loved one is being subjected to some form of financial abuse but are not sure. Here are a few signs to look for:

  • Sudden changes in bank account balances or banking practices, particularly
    unexplained withdrawal of large sums of money when the older person is accompanied by another individual
  • Additional names being included on bank signature cards
  • Unauthorized withdrawal of the elder’s funds using his or her ATM card
  • Sudden changes to a will, trust, power of attorney, or other financial
    document
  • Disappearance of funds or valuable possessions that the elder
    person can’t explain or refuses to discuss (perhaps out of fear)
  • The elder person receives substandard care or accumulates unpaid bills
    even though adequate financial resources are available
  • Discovery of a forged signature for financial transactions or the titles
    of the elder person’s possessions
  • Sudden appearance of previously uninvolved relatives who claim to have
    rights to the elder person’s affairs and possessions
  • Sudden transfer of assets to a family member or someone outside the family
    that the elder person can’t or won’t explain
  • Provision of services to an elder person that do not seem to be necessary

Sadly, financial elder abuse is often perpetrated by the senior’s own family, including sons, daughters, grandchildren and spouses. Abusers also include predators, such as people
professing to have fallen in love with the elderly person or marketing themselves as personal caretakers. Unscrupulous professionals and business owners often take advantage of
the elderly by charging more for services, recommending unnecessary services or taking money up front for services that are never provided.

To learn more about financial and other forms of elder abuse, visit http://www.preventelderabuse.org/elderabuse/fin_abuse.html.

One Of The Most Important Conversations You Should Have With Your Family

As an estate planning and elder law firm, we strive to provide all of our clients with the tools and strategies they need to prepare for whatever comes along, including wills, trusts, advanced directives, and more. While it is vitally important for you to have these documents, it is equally important to talk to your family about them.

It is entirely possible that your children and other loved ones would like to know, for example, how you want to be cared for in the event of incapacity or an end of life situation.
But do your loved ones know that you have made your wishes clear through advanced directives and the thinking behind the choices you made? Do they know that you have created a power of attorney that allows a person of your choosing to make medical and/or financial decisions on your behalf? Even if they understand that you have done so, do they know where the
documents can be found? If the documents are on your computer, do your loved ones know what file name or password must be used to access them?

Similarly, your children may wonder about your financial situation. Is your house paid for, or are you carrying a mortgage that will need to be covered if you pass away suddenly?
What about your automobile? Have you created a will or trust, and if so, do your children stand to inherent any assets? Your children may be hesitant to ask questions such as these for fear of appearing greedy or insensitive. Yet they may also need this information to do proper estate planning of their own.

We understand how difficult it is to begin a conversation of this nature, and can help you find the best ways to begin one with your loved ones. Experience tells us that families who are able to open up in this manner draw closer together and feel a sense of relief afterwards.

 

 

Incentive trusts are important to consider with estate planning.

One of the best tools in estate planning for encouraging positive behavior is through an “incentive trust.”  An Incentive trust is a trust like any other, which rewards the beneficiaries when they meet certain objectives or goals in their lives.

Many of us would like to think that our children and grandchildren will become responsible adults and use their inheritance for great things.  However, as many of our clients know, it can often be hard to motivate younger generations when they have become accustomed to a certain lifestyle.  The theory behind incentive trusts is that parents can help guide their loved ones by offering financial incentives to meet certain goals.  For instance, an incentive trust could award a child $200,000 for graduating college.  In many cases, our clients match the income that their children earn.  This provides an incentive to be a higher wage earner. We believe incentive trusts, when used in a sensitive and careful manner, can be great tools for using wealth to help nudge children and grandchildren in the right direction.

An incentive trust is a legal entity that holds and manages funds usually for the benefit of another person known as the beneficiary.  The trust is managed by a trustee, who is in charge or giving the funds to the beneficiary at his discretion or when certain objectives have been met.

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