Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Monday, March 13, 2017

Article on Creating a Red File for Estate Planning

Red fileMarvin E. Blum recently published an Article entitled, Filling in the Gaps: Create a “Red File” for Clients to Cover Issues Beyond Traditional Estate Planning, Tr. & Est. 68 (Feb. 2017). Provided below is an abstract of the Article:

Most estate planners will agree that one of the most formidable obstacles to the planning process is the general reluctance of clients to discuss their own mortality. There’s one significant motivating factor, however, that drives clients to confront their mortality and plan for their incapacity and death: control. Clients want to ensure that on incapacity, they’re cared for as they wish and on death, their assets pass exactly how they would like. While crafting an estate plan, both planners and clients tend to focus on the effective and tax-efficient distribution of the client’s assets. It’s all too common for a client to walk away with a perfectly crafted portfolio of estate-planning documents that expertly disseminates the client’s property but fails to provide the control so desperately desired. How is it possible for a perfect plan to be so imperfect? The answer lies outside of the formal estate-planning documents and accordingly often goes overlooked by planners and clients alike, but the answer, itself, is simple. By adding a “red file” to the traditional batch of estate-planning documents, clients increase their level of control in two key areas: (1) incapacity, and (2) administration of the estate at death. 

As part of the planning process, estate planners should encourage clients to create a red file and guide them on how to do it. Essentially, a red file is a notebook or other centralized source of information that will not only aid an executor in navigating the waters of estate administration, but also will make very clear the wishes of a client in the event he becomes incapacitated in the future. 

While only clients can actually establish the red file, estate planners should provide their clients with a framework of guidelines for what it should contain. There’s no specific formula for what makes a red file effective, but clients should know that the more information they include, the more helpful it will be to those managing their assets or making care decisions on their behalf. 

 

March 13, 2017 in Articles, Disability Planning - Health Care, Disability Planning - Property Management, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Sunday, January 8, 2017

Trump Policies Will Likely Affect the Elderly and Special Needs Populations

Special needs trumpWith the recent election of Donald Trump, the elderly and special needs populations are likely to see changes. The President-elect has claimed that Social Security and Medicare will remain intact and solvent. How he plans to make this happen is something that has younger generations worried about the preservation of the fiscal health. For those who rely on Medicaid, block grants could go into effect, which could create profound changes for individual states, creating uncertainty and concern for planning needs. Additionally, the block grants will potentially affect special needs trusts, reducing or eliminating the benefits they provide. These possible Medicaid changes could also see many older homeowners losing their homes, a legacy for future generations, if the Medicaid program cannot pay for the cost of skilled nursing, keeping them from selling their homes and moving into nursing homes. Ultimately, in the near future, families will become more insular and protective of one another, and there will be high demand for multi-generational planning.  

See Michael Gilfix, How Trump Policies Could Affect the Elderly and Those with Special Needs, Wealth Management, January 6, 2017. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

 

January 8, 2017 in Current Events, Disability Planning - Health Care, Disability Planning - Property Management, Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Friday, December 9, 2016

The Special Needs Trust Fairness Act Has Passed

Special needs trustFirst Party Special Needs Trusts are established under 42 U.S.C. § 1396p(d)(4)(A). The prior federal statute only allowed the trusts to be set up by a disabled individual’s family member, not the person with the disability. The law presumed that individuals with disabilities lacked the mental capacity to establish a trust. The Special Needs Trust Fairness Act has now passed the House and Senate. This Act will allow a disabled individual to establish his or her own special needs trust. The President is expected to sign the bill soon.

See It Passed!: The Special Needs Trust Fairness Act Has Passed Both the House and the Senate and Is on Its Way to the President for Signature, The Interactive Legal Team, December 7, 2016.

Special thanks to Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention.  

December 9, 2016 in Current Events, Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Friday, November 11, 2016

End-of-Life Estate Plan Lessons

Estate plan lessonsIt can be hard to think about the time you might be incapable of making basic decisions, but it is an absolute must for someone with estate plans. There are a few lessons to learn when making the right decisions for your future. First, make your location wishes known and explain your thought process, so that the decision-maker has all the necessary information when the time comes. Second, pick strong surrogates who are capable of standing in your place and managing your sophisticated finances. Finally, do not leave a child who is easily heartbroken to make hard decisions about your end-of-life needs. The emotional challenge is huge, so the person needs to be able to communicate your wishes even at the most painful times. 

See Sonia Talati, Three End-of-Life Estate Plan Lessons, Barron’s, November 8, 2016.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

November 11, 2016 in Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally | Permalink | Comments (0)

Thursday, October 13, 2016

Buy-Sell Agreements at the Time of Ownership Transfer Events

Buy-sell agreementA buy-sell agreement usually ensures the continuity of ownership in the business and, in practice, most deal with two events: death and disability of the owner. But, what about other transfer events that are often more harmful to the remaining owners? For example, does your client’s buy-sell agreement cover transfers caused by personal bankruptcy or divorce; forced termination of the owner’s employment; or irreconcilable differences amongst the owners? 

In the incident of bankruptcy or divorce, the buy-sell agreement should give the business first opportunity to acquire that owner’s interest at the time of this involuntary transfer. On the other hand, no simple provision exists to deal with the termination of an owner’s employment. Instead, a client should seek an advisor that will help the owners weigh the alternatives. Possibly the most valuable asset of a buy-sell agreement becomes available when owners get locked into a bitter dispute. The agreement often settles this dispute by forcing one or more of the irritated owners to sell their ownership and leave the business. 

See John Brown, Buy-Sell Agreements Ignore Most Lifetime Ownershihp Transfer Events, BEI Exit Planning Solutions, October 10, 2016. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

 

October 13, 2016 in Disability Planning - Property Management, Estate Planning - Generally | Permalink | Comments (0)

Saturday, August 6, 2016

Retirement and Estate Planning for Alzheimer's

Alzheimers developA study shows that Americans fear developing Alzheimer’s more than any other life‑threatening disease. It also shows that Americans fear the inability to care for themselves if diagnosed. This fear is valid because the end-of-life care for Alzheimer’s patients is often underestimated and more expensive than cancer or heart disease. Insurance pays for a portion of these costs but not all, so it is important to appropriately plan a retirement and estate plan. Accordingly, you must identify family members to be included in financial plans and any projected costs that can be covered by government benefits.

See Art Koff, What to Know About Alzheimer’s and Retirement Planning, Market Watch, July 7, 2016.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

August 6, 2016 in Disability Planning - Health Care, Disability Planning - Property Management, Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Saturday, May 21, 2016

Article on Estate Planning for Vulnerable Clients

ShenkmanMartin M. Shenkman recently published an article entitled, Estate Planning for the Chronically Ill, Aging, and Otherwise Vulnerable or Isolated Client, ABA Probate & Property, May/June (2016). Provided below is a summary of the Article:        

        Attorneys routinely build flexibility into their documents to address the uncertainty of future tax laws. This same care can be applied to helping clients deal with the uncertainties aging and chronic disease may bring. Certain clients are more vulnerable to financial abuse and other gaps in their estate planning safety nets. This heightened risk may be because of the challenges of aging, chronic illness, and other similar circumstances. Those clients who require extra precautions in the planning process will be referred to as “vulnerable clients.” This article will explore four key points of planning for vulnerable clients: different approaches for planning, planning for those with chronic illness, enhancing traditional estate planning for vulnerable clients, and planning for isolated vulnerable clients.

May 21, 2016 in Articles, Disability Planning - Property Management, Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Thursday, May 12, 2016

First ABLE Accounts Should Come Into Existence This Summer

ABLEIt has been more than a year and a half since legislation was passed that should make it easier for people with disabilities to save money without jeopardizing their federal benefits.  The first ABLE accounts are expected to become available this summer as a handful of states open up their ABLE programs.  The State of Nebraska was the first to announce a launch date of June 30, but Ohio could also offer ABLE accounts even sooner.  “The new offering was created by the federal Achieving a Better Life Ex perience, or ABLE, Act, which became law in 2014.”  The programs will be different in each state and it is important for people to be aware of the local rules and regulations.  If done right this program can be very beneficial for people who are disabled. 

See Michelle Diament, First ABLE Accounts Expected This Summer, disability scoop, May 10, 2016.

Special thanks to Jim Hillhouse for bringing this article to my attention.

May 12, 2016 in Current Affairs, Disability Planning - Property Management, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Tuesday, May 10, 2016

Undesirable Residents Being Forced Out Of Care Facilities Through Eviction

Nursing HomeLong-term care facilities are in the business of taking in people that require high levels of assistance and providing them with a stable environment for their final years. However, not all patients are the same and a new trend has emerged which sees time intensive and high maintenance patients being evicted. This is done, in no small part, to open up beds for individuals who require less attention and, as a result, cost less money to care for. Those targeted for eviction tend to be suffering from disorders that require high levels of care such as dementia. In addition, residents with family members that are viewed as difficult also tend to be targeted since they often request additional service and attention compared to others. As a result of this eviction trend, advocacy groups are calling for overhauls to state and federal law which dictate the circumstances under which a patient may be forced out of a facility. Until then, however, long-term care facilities will continue to have great leeway when it comes to choosing who gets to stay and who needs to go.

See Matt Sedensky, Nursing homes turn to eviction to drop difficult patients, The Seattle Times, May 8, 2016.

May 10, 2016 in Disability Planning - Health Care, Disability Planning - Property Management, Elder Law | Permalink | Comments (0)

Tuesday, May 3, 2016

Some Estate Planning Steps To Take With Special Needs Children

Piggy BankEstate planning for special needs children is particularly difficult since there are a number of special considerations that must be accounted not the least of which is the high cost that can be associated with care. Whether the child is a minor or an adult that is unable to care for themselves there is much that must be done in order to protect their interest. For starters, documents that outline the history, be it personal or medical, of the child such as letters of intent are worth drafting since they can impart much useful knowledge to any future caregiver. In addition, making arrangement for the financial stability of the child is paramount which is why executing a will or creating a special needs trust is key. A trust in particular is important since it can help provide for the care of the child while not interfering with the ability to receive public assistance. In any event, it is best to consult with a professional estate planner when preparing for the future of a child with special needs in order to maximize the quality of the future care and lifestyle.

See, Raising a Child With Special NeedsIdaho Estate Planning, April 28, 2016.

Special thanks to Jim Hillhouse for bringing this article to my attention.

May 3, 2016 in Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally | Permalink | Comments (0)