Massachusetts Estate Planning & Asset Protection Blog

Understanding Long Term Care Planning

Posted by Dennis Sullivan & Associates on Fri, Jan 19, 2018

Facing the enormity of long term care, whether it is the financial, healthcare, emotional or psychological issues, it is so overwhelming. 

It's needs a team effort!  With the help of family, friends and our team here at Dennis Sullivan and Associates you can make the enormity of long term care manageable 

 

What exactly is "Long Term Care Planning" ? 

Here's one way to look at long term care planning: 

In today’s world, the question is no longer only, “What happens when I die?, but now we need to plan for “What happens if I live?” An estate plan covers the scenario of, What happens when I die.  But long term care covers a large variety of other factors and scenarios that sometime families forget to consider such as what happens if I live but am not healthy and have increased health-care costs and need to rely on others for assistance, either temporarily or on a permanent basis. The estate plan does not address this need. An estate plan can help you answer the first question, but a long-term care plan can help you answer both the first and second questions. Let’s put it another way. An estate plan insures that if you have assets when you die they will be passed in the manner you wish. The key word is “if.” The plan will not, however, guarantee that there will be anything left at that time to pass. Your assets could be mostly or entirely wiped out by a lengthy illness, hospital, and/or nursing home stay, leaving your spouse and other heirs with nothing.

 long Term Care and Medicaid:

I had a conversation last week with a married couple for whom we are preparing a Medicaid application. John is in a nursing home, and Mary is healthy and living at home. I explained to them that Mary can keep half of their countable assets, in their case $75,000, but that they must spend down to below that dollar amount by the last day of the month directly preceding the month we want to qualify John for Medicaid. I have had this conversation numerous times with clients in John and Mary’s situation, and know all too well that this simple instruction is not always followed. The largest part of most spend downs typically goes to the nursing home. But, as most people do, myself included, we wait until we get a bill before we pay it. If I owe you money, I’m not going to chase after you for a bill. Whenever you get around to it and invoice me, then I’ll pay it. The longer the money stays in my bank account, the happier I am. However, this can get you into big trouble and cost you tens of thousands of dollars if you wait for the nursing home bill. If we want John to be eligible for Medicaid next month and we know that he owes the nursing home $20,000 for the past two months of care, but the nursing home hasn’t yet presented Mary with a bill, it does not matter that Mary and John legitimately owe the facility the money. If that $20,000 is still sitting in their bank account next month, causing their account balance to exceed $75,000, John cannot qualify for Medicaid. Even worse than that, he can’t even qualify for next month. He has to wait until the following month, which means they will owe the facility another $10,000, leaving Mary with $65,000 to live on.


So Much to Discuss

For more information on Long Term Care Planning we encourage you attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy. January sessions are filling up fast call or register on line to reserve your seat today.  

At the Estate Planning & Asset Protection Law Center, we help people and their families protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future. 


Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: Dennis Sullivan, Elder Law, Estate Planning, Estate Planning Recommendations, Estate Planning Tip, Financial Planning, Retirement, coverage, senior, Attorney, Baby Boomers, Capital Gains Tax, GST tax, Massachusetts, New estate tax law, IRS, Massacusetts Estate Tax, Tax Savings, federal, new regulations, tax, tax reform, tax deductions, taxes, tax liability, tax exemption, New Tax Bill, Tax Bill, 2018 Tax Bill

New Tax Bill: What you need to know

Posted by Dennis Sullivan & Associates on Fri, Jan 05, 2018

How does the new tax bill affect you and your family now and in the future?

The new tax bill has officially been passed by Congress and signed by President Trump, what does this mean for us?  The answer to this depends on many variables discussed here. 

 

First of all, these changes don’t apply until you file your 2018 taxes, meaning that you won’t have to worry about the new law when filing your 2017 income tax returns this spring.  That being said, still we will be experiencing the greatest overhaul of the tax laws in more than 30 years.  The last major changes having been made under President Reagan in 1986. 

One change you can expect to see is that both corporate tax rates and personal income tax rates will drop.  There are also other changes which limit or eliminate personal deductions.   The changes that affect corporate tax rates are permanent, and the changes that affect individual tax rates and deductions are not.

Also in the new tax bill you will find a “sunset” provision, meaning that the new law – as it applies to individuals – will expire on December 31, 2025.   That is, unless Congress agrees to extend the law.  That, of course, will depend on the political and economic climate 8 years from now, including whether the economy responds the way Republicans say it will

       Now let’s take a look at the changes that are likely to affect the average senior.  Good news, the tax rates have been lowered a bit.  There are still 7 tax brackets but the rates have changed with the top rate lowered from 39.6% to 37% and the threshold at which each rate is reached has been altered. (The corporate rate reduction is much greater, from 37% to 21%).

       Some of the most significant changes relate to deductions.  The standard deduction has been doubled to $12,000 for a single person and $24,000 for married couples but personal exemptions have been eliminated.  The deduction for state and local taxes will be capped at $10,000, something that could hurt many Massachusetts residents and especially homeowners because we have high real estate and state income taxes.  


So Much to Discuss:

For the first time in decades major overhauls to the tax system are happening! This is an enormous change that can affect your estate planning and asset protection as well. Be sure to stay tuned as we will discuss more about this new tax bill in our next blog post!    

For more information we encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy. January sessions are filling up fast call or register on line to reserve your seat today.  

At the Estate Planning & Asset Protection Law Center, we help people and their families protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future. 


Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: Dennis Sullivan, Elder Law, Estate Planning, Estate Planning Recommendations, Estate Planning Tip, Financial Planning, Retirement, coverage, senior, Attorney, Baby Boomers, Capital Gains Tax, GST tax, Massachusetts, New estate tax law, IRS, Massacusetts Estate Tax, Tax Savings, federal, new regulations, tax, tax reform, tax deductions, taxes, tax liability, tax exemption, New Tax Bill, Tax Bill, 2018 Tax Bill

A Trust For A Future Generation

Posted by Dennis Sullivan & Associates on Thu, Sep 25, 2014

A Trust For A Future Generation
94ced6d8-5dfc-4a14-9f26-2931a6556ee3

An Old Tool That Still Works

Dynasty Trusts also referred to as Legacy Trusts are an instrument that has been used by the wealthy to preserve the wealth and legacy of family assets for generations upon generations. Most of the high net worth families from the late 1800's to early 1900's enjoyed the benefits of the Dynasty Trust. It is also well known that the Kennedy's are still enjoying the benefits of the Dynasty Trusts established generations ago.

 

So What Is It, And How Does It Work?

A Dynasty Trust is an Irrevocable Trust used to pass wealth and assets to descendants of the person establishing the Trust. The trust does not leave assets to a spouse or the immediate children, but to grand-children, and in the past it was left to great-grand-children or even great-great-grandchildren. Essentially, a Grantor could leave a substantial estate to children multiple generations that he or she would never live to meet.

This process went on for many years and an extreme amount of wealth was passed on tax free. Eventually though the government saw how much money it wasn’t getting its hands on and cracked down on the practice. They created the Generation Skipping Tax: a law designed to prevent wealthy families from transferring their enormous wealth on without paying an inheritance tax. So, these trusts can no longer go on for generations after generation, since the government has now hedged themselves to ultimately get paid.

 

Some Exclusions Apply

However, the government has also provided for the gift tax exclusion. The amount varies depending on the current administration in Washington, but currently there is a $5.34 million (adjusted to inflation) gift tax exclusion which means that you can give away in your lifetime up to that amount tax free. After that, you pay a significant percentage in taxes on gifted transfers of wealth. For a married couple, you can double the amount to $10.68 million.

One other item that affects the Dynasty Trust is a complex and convoluted law called the Rule Against Perpetuities. This law limits the number of generations that can be skipped before the Trust must commence distributions. The law puts a time limit on the Trust so that the money cannot be held in trust forever and must eventually be distributed. There are many other rules to this law that we do not have time to deal with here, but simply put, the Rule states that the distribution must take place within 21 years after the last remaining beneficiary, alive at the time of the making of the Trust, dies.

 

Who Gets What?

As mentioned earlier, your children do not benefit from the principle of the trust; however they will receive the income from the trust during their lifetimes. Your grandchildren would be deemed the true beneficiaries, thereby receiving the assets in the trust, inheritance tax free.

We have only scratched the surface of the complexity and usefulness of this trust in this blog. A Legacy Trust is not for everyone and a lot of thought and planning must go into determining whether this trust accomplishes your goals and intent. However, when used, this Trust is extremely powerful, not only for preserving wealth but for its asset protection functionality. If you have not used up your lifetime gift exclusion and you are interested in preserving some family wealth for future generations, we recommend you contact our office to learn more about the Dynasty Trust.

 

For further information on how to protect the inheritance for your children and grandchildren, please take a look at our book, The Ten Biggest Estate Planning and Asset Protection Mistakes and How to Avoid Them 2nd Edition, available for FREE kindle download between September 26th and October 2nd, or for purchase from Amazon.com

 

At the Estate Planning & Asset Protection Law Center, we provide a unique education and counseling process which includes our unique 19 Point Trust, Estate and Asset Protection Review to help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones, click here for more information. We provide clients with a unique approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: asset protection, Estate Planning, Massacusetts Estate Tax, massachusetts estate planning strategies, tax exemption, transfer of assets, Wills

The High Cost of Seniors Living Longer

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Fri, Sep 05, 2014

 

The Cost of Living Longer | Massachusetts Eldercare Attorney

 

 planning, estate, eldercare

 

A Pachyderm of Problems

Every day, we see clients for whom long-term care is the elephant in the room. They feel they can’t afford the costs, but they also feel they can’t afford not to have it either. So their solution is to pretend they don’t see the elephant and try to ignore the problem until it goes away on its own. This unfortunately often leads to our metaphorical elephant trampling their life savings and any future inheritance they are trying to leave behind. The older you are, the more expensive a long-term care policy gets and if you get sick before you have long-term care protection in place, it’s too late. Insurance companies are looking out for their bottom line, and an already ill senior will scare them off.

The costs for these policies are rising faster than inflation too. Therein lies the conundrum for Boomers and seniors: They’re living longer than their parents did but that means they need more money to make it through “old age”. Finding long-term care is a tough and complicated process. You’ll need to find a place that cares for people with your (or your loved one’s) circumstances. You need to find a place with the right facilities and staff, a place that leaves you with a good, safe feeling. And you have to be able to afford it too. This is not any sort of one-size-fits-all situation. Everyone has their own specific services and conditions that they or their loved ones will need met. Remember, what we call “long-term care” is a broad category, with options ranging from live-in facilities to your own home.

Lurking Complications With Long Term Care

The greatest threat to the financial security of Boomers and seniors is the cost of long-term care (and Obamacare will not assist with this). Assisted-living facilities are now climbing toward the $7,500-a-month mark. Many have started bundling more services together, rather than charging for each individually. Bundling might be a good idea from the nursing home’s perspective, but just like pre-packaged cable TV you will wind up paying for a lot of services you don’t need and don’t want. A private room at a nursing home will range from $500 - $600 a day.

The cost of home healthcare is rising, too. Some people choose independent-living apartments. These facilities typically don’t require lump-sum payments, and residents can contract with home health-services independently. Medicaid may be there for those who qualify but if you ever want to learn the true meaning of “jumping through hoops” just try qualifying! The best thing, of course, is long-term care insurance, but that’s getting more expensive too as companies raise their rates while cutting back on their coverage. In addition, this insurance is getting more complicated, now encompassing aspects such as protection of the surviving spouse, caregiver issues, scams/ID theft, and making sure you have an advocate to fight for your rights in a system that’s slanted against you.

In short, we’re living longer, and unlike previous generations, people are generally not living with or even near their children. Seniors are going to need more money for this longer life and for any unforeseen medical problems that may arise.

A Magic Trick No One Wants to See

Do you know the fastest way for a Boomer or senior couple to become an impoverished Boomer or senior couple is? Simple, one of them just needs to become ill before they get long-term care insurance. We see it every day, people who’ve worked hard and saved money all their lives are forced to see it wash away in a flood of medical bills as they age. It is truly heart-breaking, because, if you’ve managed to squirrel some money away, you could probably have afforded long-term care. 

The Downside to Living Longer

Our life expectancies are going up these days and so is the cost of healthcare, the distance seniors are living from their children and families, and the financial pressures on Medicare and Medicaid. The new Affordable Care Act, in fact, stipulates $500 billion in Medicare cuts over the next decade! Where do you turn if you or your spouse gets ill? Home health care? Adult day-care? Assisted-living? A nursing facility? Respite-care services, which allow the caregiver to drop off the senior for a limited period? Who’s going to pay for it? And for how long?  These are the questions to ask now, while you still have time to plan. If you haven’t purchased long-term care before you or your spouse become ill…forget about it. No one will insure you once you’re sick! If this happens to you, you’re going to be out of time, out of options, and very quickly out of money. And if you’ve planned to leave something for your heirs, there may be nothing left to leave to them other than a pile of bills. 

 

It’s an old (but true) cliché: those who fail to plan, are planning to fail. When it comes to healthcare expenses as you age, you fail to plan at the risk of yourself and those you love.  

 

At the Estate Planning & Asset Protection Law Center, we provide a unique education and counseling process which includes our unique 19 Point Trust, Estate and Asset Protection Review to help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones, click here for more information. We provide clients with a unique approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop 

 

Tags: living will, Estate Planning, Estate Planning, asset protection, Massacusetts Estate Tax, long term care, life insurance, Medicaid, MassHealth, in-home care, marriage, Estate Planning Tip, seniors, assisted living, life-care plan, hospice, Massachusetts, assets, in home, incapacity, asset, home, surviving spouse, Estate Planning Recommendations, in-home care, long term care insurance, Inheritance

Times Are Changing, So Are Tax Laws

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Tue, Aug 26, 2014

The Tax Game Has Changed | Massachusetts Estate Planning Attorney

 

Tax planning, estate tax, trust, congress

 

The Old Ways Don’t Work Anymore

For years, estate planners have done what is considered traditional estate planning. They drafted plans primarily concerned with minimizing future estate tax liability and gave minimal attention to income tax consequences.

This was perfectly fine years ago when the estate tax was much more severe than the potential for income tax. This was attributable to relatively high estate tax rates, low estate tax exemption that was not indexed for inflation, and comparatively low capital gains rates.

However, Congress has tinkered with the tax system in a huge way. Accordingly, the income tax impact of estate planning is taking on greater significance, especially for Massachusetts residents.

 

The Tax Man Cometh

More attention shall now be directed toward the importance of income tax basis considerations in estate planning due to the narrowing between the estate tax rates and the income tax rates. In fact, in most estates worth less than $5.34 million, estate taxes are no longer an issue. Now, income taxes loom large, primarily because of the lack of attention on the income tax basis (i.e. cost or adjusted basis) of capital assets. Also state estate taxes have become critically important because of the lower $1 million threshold for estate taxes in states like Massachusetts.

 

Failing to Update Could Cost You

The bad news for most middle-class taxpayers is that for years they've been fed a steady diet of estate tax minimizing wills and trusts. Worse yet, they hang onto outdated documents for many years, thinking they are done with their estate planning and not wanting to be bothered. Sadly, these old documents will no longer serve their intended purpose of estate tax minimization. A major problem is also created when federal estate tax minimization plans, unless they are updated, will cause a completely avoidable Massachusetts estate tax for a married couple. While there may be no federal estate tax savings with these documents, because very few middle-class taxpayers will ever pay estate tax, the documents will increase income taxes for their heirs upon sale of appreciated assets. Moreover in Massachusetts, there may not only be a completely avoidable estate tax on an additional 1 million dollars, but it may also trigger a large, completely avoidable Massachusetts estate tax on the first death.

 

What to Do About a Completely Avoidable Massachusetts Estate Tax

Bottom line:  the game starts anew. Let's focus on income tax minimization for most taxpayers and forget about estate tax minimization. Unless your estate is worth more than $5.34 million, your biggest risk is Massachusetts estate tax as well as overpaying income taxes due to inattention to income tax basis planning in your wills and trusts.  Don't make that mistake. Review your documents today so that you eliminate these lurking tax problems

 

At the Estate Planning & Asset Protection Law Center, we provide a unified education and counseling process which uses a unique 19 Point Trust, Estate and Asset Protection Review to help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones, click here for more information. We provide clients with a unique approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: massachusetts estate planning strategies, trusts, Nursing Home Costs, Mistakes, Tax on IRAs, Massacusetts Estate Tax, social security, Tax Savings, tax deductions, tax liability, tax exemption, tax reform, taxes, Massachusetts estate tax, transfer of assets, tax, trust, Nursing Home

Massachusetts Estate Planning Tips | The Impact of the Fiscal Cliff Deal on Seniors and Boomer

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Mon, Jan 21, 2013

The American Tax Payer Relief Act: It's complicated but It Affects Everyone - Especially Boomers and Seniors  

The American Taxpayer Relief Act of 2012 was actually passed by the Senate in at 2:00 am on January 1, 2013. After speculation on whether Speaker Boehner would bring the bill to a vote or if the House would add amendments likely be rejected by the Senate, the House eventually passed the bill at 10:45 p.m. President Obama signed it the next day.  

The bill addresses the Bush-era tax rates, estate and gift tax rates, Medicare reimbursement, among numerous other issues.

TAX RATES 

The bill permanently extends current tax rates for individuals earning less than $400,000 and couples earning less than $450,000. Those earning more will see an increase from 35% to 39.6%. Wealthy folks will see an increase from 15% to 20% on capital gains and dividends. Individuals earning above $250,000, and married couples earning more than $300,000, will see a phase-out of the personal exemption.     

ESTATE TAX 

The estate tax exemption will remain $5.12 million per person, but will be adjusted for inflation. The top rate will grow from 35% to 40%. Portability's extended, as well, and the gift tax exemption will remain at $5 million.   

PAYROLL TAX  

This tax, which funds Social Security, has been at 4.2% since 2011, but will now revert back to the previous of 6.2%.  

OLDER AMERICAN FUNDING 

Funding has been increased for the Older Americans Act and similar programs. This year only, Area Agencies on Aging will receive an additional $7.5 million, and Aging and Disability Resource Centers an additional $5 million.  

The National Center for Benefits and Outreach Enrollment will receive an additional $5 million, and Medicare State Health Insurance Programs will receive an additional $7.5 million.  

There is also a provision that prevents the scheduled 27% reimbursement cuts to Medicare physicians this year.  

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique education and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops. Call 800-964-4295 to learn more about what you can do to enhance the security of your beneficiaries, digital assests, Estate Plan and legacy

 

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop
.

Tags: Massacusetts Estate Tax, Health Care, family, seniors, estate tax, health Care act, Alzheimers Disease, tax, Attorney

Big Changes in the VA Aid | Massachusetts Elder Law Attorney

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Mon, Jul 30, 2012

     Eligible wartime veterans and the widowed spouses of wartime veterans can qualify for a special pension that can go a long way towards helping to pay the skyrocketing cost of long term care.  In many cases we can qualify needy applicants almost immediately even though they have assets greater than the limits imposed by the VA.  But that is aboutveterans benefit, VA benefit to change.

     There has been much discussion in Congress about the sharp increase in applications for VA benefits and the shady practices of some financial investment companies that sell annuities to unsuspecting seniors at high fees in order to qualify them for the benefit, only to determine that they cannot qualify in many instances.

      As with anything that gains popularity rapidly, there are unsavory practices that need to curtailed.  But what will changes mean for many who really need this benefit?  Senator Ron Wyden of Oregon has introduced legislation in the United State Senate to impose a look back and a penalty period, similar to what the Medicaid program has in place.

     While Senator Wyden’s proposal must go through various steps before it can be voted on by both houses of Congress and then presented to the President for his approval, Wyden has called for a 3 year look back and a penalty that would equate to a number of months of ineligibility for benefits based on the amount of money transferred.  It is not clear yet how that penalty would be calculated but it sounds like it would begin to run when the transfer is made, similar to the way the Medicaid rules worked before Congress changed them in February, 2006 under legislation known as the DRA (Deficit Reduction Act).

     What does this mean for aging seniors right now?  As with any change in the law, it will eradicate some abuse but it will also probably hurt other seniors in need, making it more difficult for them to qualify for benefits.  We anticipate that any changes won’t be effective till sometime in 2013.  For families, the time is now to examine their long term care plans.  There are steps that we can take now so that you won’t be hurt by any legislative changes in the future. 

For more information go to www.SullivanVeteransReport.com, which contains important information on the “Hidden Benefit” available to veterans and their spouses, and the steps you should be taking right now to find out if your loved one qualifies. For useful information on Alzheimer’s disease including care tips and resources please visit www.BostonMemoryLawyer.com. You will be given access to the Complete Alzheimer’s Resource Kit, sold nation wide for $197, absolutely free.

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops. Call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

To register or call (800) 964-4295 (24/7) or online at www.SeniorWorkshop.com 

 

 

Tags: massachusetts estate planning strategies, Nursing Home Costs, Elder Law, Massacusetts Estate Tax, Medicaid, Nursing Homes, elder care, veterans benefits, VA benefit, Wellesley

Does your loved one need to be evaluated? And by whom? | Massachusetts Elder Law Attorney

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Fri, Jun 29, 2012

elder care physician, alzheimer's disease, caregiver

Does your loved one need to be evaluated? And by whom?

Yes. When the first symptoms of dementia (more-than-mild forgetfulness or confusion) occur, a complete work-up and evaluation by a physician is mandatory. This exam will determine whether symptoms are due to such things as depression, poor nutrition, drug intoxication, alcohol abuse, or organ dysfunction. If your loved one has never been evaluated, a neurologist or geriatrician is your best bet. Those who have been diagnosed with Alzheimer’s should see a geriatric psychiatrist for anxiety, depression, agitation, or any other behavioral issues.

Physician referral services can provide a list of these physicians. Some caregivers receive information and referrals at their support group meetings. It is comforting to see a physician that you know other caregivers have used and liked.

Everyone is different, so if you are not happy with the physician, look for another. Being comfortable with the doctor is important in order for you to ask any questions you need to ask at any time. Early diagnosis of dementia can indicate treatment to help slow the progression of the disease with appropriate medication. A complete work-up includes: physical examination, medical history, neurological tests, laboratory tests, brain imaging, and function tests.

Once diagnosis is made, inform the primary physician. Your loved one will continue to see a primary care physician for general checkups. The geriatrician, neurologist, or psychiatrist will be seen for issues directly related to dementia.

The best, most effective doctors in this field are also concerned about the health and well-being of the caregiver. Alzheimer’s is a family illness. The doctor needs to be aware of the caregiver’s stress level and be willing to offer support, suggestions, and encouragement to the caregiver. Making sure the caregiver is looked after is the greatest proactive intervention to promoting successful caregiving in the home.

To gain free online access to the Complete Alzheimer's Resource Kit, which contains care tips as well as other useful information on Alzheimer’s disease, please visit www.BostonMemoryLawyer.com.

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

and receive a free Unique Self-Guided 19-Point Trust, Estate, & Asset Protection

Legal Guide with accompanying DVD

Attend this FREE educational seminar to learn:

  • How to protect your home and assets from the costs of long-term care
  • How to stay out of the nursing home and access in-home care
  • How to make sure your spouse is not left financially ruined if you need nursing home care
  • How to access Veterans benefits to pay for long-term care

       To register or call (800) 964-4295 (24/7 or online at www.SeniorWorkshop.com 

Tags: Estate Planning, Alzheimer's Disease, Elder Law, Massacusetts Estate Tax, in-home care, Estate Planning Tip, elder care

7 Major Errors In Estate Planning

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, May 16, 2012

As estate planning and asset protection professional we often times help people and their family by reviewing existing planning.   As discussed in a recent Forbes article, the following is a list of major estate omissions and poor choices we see on a consistent basis.  Estate Planning, Asset Protection, Tax Changes, Estate Tax, Gift TaxIt is crucial to have your planning reviewed and updated consistently.  As a result of changes in the law, in health and in personal circumstance an old estate plan may not be working to accomplish your goals.  To learn more about how the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates can help you and your family visit www.MASeniorWorkshop.com or call (800) 964-4295 (24/7). 

1. Not having a plan

In a sense, everyone does have an estate plan; state law makes this point a certainty.  It simply may not be the plan that you had in mind, or that your family would have preferred.  Not having a will means that at your death the distribution of your assets will be dictated by the inheritance laws of the state where you were domiciled when you died.  These “intestacy laws” vary from state to state but, typically, leave percentages of your assets to various family members.  There is always a remote chance that these laws will accomplish what you would have intended – but not likely. It is highly improbable that, by chance, your dispositive intentions as to who gets what, when and in what form will be fulfilled.  This is true even if your estate is below the tax threshold.  Your will applies to the disposition of your “probate assets” – those assets NOT otherwise following a beneficiary designation or the titling of the asset. Non-probate assets will pass by operation of law or contract. For example, whoever the beneficiary designation may have been when you originally began your 401(k) or IRA at the start of your work life will override either your will or the laws of intestacy.  Even a simple plan that is well thought out and results from the identification of your personal objectives will be much more successful than nothing at all.

2. Online or DIY rather than professionals

There has been a noticeable uptick in the number of people who will look to the Internet to prepare their own wills and trusts. There are dozens upon dozens of websites that will profess to offer you just the right discounted estate planning documents.  Even wealthy clients who stand to benefit the most from expert planning advice have been impacted. Unfortunately, relying on web-based, do it yourself solutions is a recipe for disaster.  Estate planning documents should represent the culmination of a well thought out financial and estate plan. An amalgam of stand-alone documents does not a plan make.  Furthermore, those pesky nuanced requirements (i.e. the “formalities”) for a validly written and executed document will vary from state to state.  Internet sites can provide you with documents but no actual advice that fits you in the context of your specific financial and personal life.  What happens when the laws change? Does the document create an unnecessary tax if the state and federal tax laws diverge substantially?  Also, use an experienced estate attorney.  All wills are perfect documents while they are in your desk drawer.  Only when examined post-mortem are the inadequacies revealed.

3. Failure to Review Beneficiary Designations and Titling of Assets

One of the most basic and most overlooked items on every estate-planning checklist is the review of beneficiary designations and the proper titling of accounts. Unwittingly, many people will often let beneficiary designations and asset titling determine their estate plans for them, contrary to their intentions. Why? Regardless of what your well developed wills and trusts say, your beneficiary designations and the title of your assets will control the ultimate distribution of those assets. Most investment accounts allow for the designation of a beneficiary (IRAs, 401(k)s, company plans, etc.).  More recently, many states have enacted legislation to convert even otherwise ordinary brokerage accounts into accounts with beneficiary designations via Payable/Transfer Upon Death Registrations. All of these beneficiary designations absolutely control who gets the asset at your death.  The titling of assets is a property law concept with estate implications. An account that is held jointly with right of survivorship will pass automatically to the survivor of the joint owners.  Why does this matter?  Assets can flow to the wrong people due to old, wrong and/or out-of-date designations, often with unintended estate and income tax implications.

4. Failure to Consider the Estate and Gift Tax Consequences of Life Insurance

Life insurance proceeds are included in the estate when owned by the insured at death. However, the insured may choose to transfer all incidence of ownership during his/her lifetime thereby avoiding any potential estate tax inclusion. Notwithstanding this accessible planning fix (usually via trust), relinquishing ownership and control is not necessarily an automatic decision. In some instances, large sums of available, tax-advantaged and asset-protected cash has accumulated in permanent life insurance policies (i.e. whole life).  Accordingly, the decision as to how an insurance policy should be owned and, as importantly, controlled, can be complex and is highly individualized. In the right fact patterns, especially when tax is not the only important consideration, credible arguments can be made for both trust ownership and direct ownership. As in most estate planning, it is very much dependent on individual circumstances: family dynamics, net worth, financial / liquidity position, personal preferences and, even, your philosophy on the transfer of assets to future generations.

5. Maximizing annual gifts

Gifting is, probably, the oldest and best way to minimize future estate taxes. The entire universe of exemptions and deductions available for the reduction of estate taxes consist of:  the lifetime exemption ($5.12 million in 2012), the marital deduction (for gifts to citizen spouses during life or at death), the gift and estate tax charitable deduction, annual exclusion gifts ($13,000 in 2012) and direct transfers (not to be treated as gifts) for education (tuition) and medical care (both theoretically unlimited). For the wealthy, maximizing all of these is smart planning. Making annual exclusion gifts every year to as many family members (this includes anyone close to you) as is financially prudent (given your financial situation) is good planning. Over the long run, you can transfer significant sums of money out of your estate along with any appreciation, thereby reducing the tax. Even better planning would be to use your annual exclusion gifts, strategically,  so that each annual gift can be leveraged into larger sums being transferred out of your estate. Strategies such as sales/gifts to defective grantor trusts, the use of LLCs/FLPs in the case of hard to value assets and life insurance are just a few ways to leverage the annual exclusion gifts. In the case of gifting, leverage is a very good thing and strategies that allow you to leverage this scarce resource – tax-free gifts – are crucial to successful estate planning.

6. Failure to Take Advantage of the Estate Tax Exemption in 2012

As every estate and financial planning practitioner will tell you (and probably already has told you), making lifetime gifts is a simple and effective estate tax minimization strategy.  Simply giving away assets at no gift tax cost will allow both the corpus and its appreciation to escape the Federal estate tax on the passing of the donor.  Using the exemption equivalent amount during your life is better than leaving it for use at death.  The urgency is to act now to take advantage of the current estate tax regime that it is set to expire at the end of 2012.  Above and beyond the annual exclusion gift limit of $13,000, the federal applicable exemption amount for transfers during life (gifts) and death (estates) has increased (by indexing) to $5,120,000 per person for 2012 — by far the highest it has ever been since the establishment of the estate tax. Wealthy individuals who have both the means and desire to do so, should plan on making these gifts during 2012.

7. Leaving assets outright to Adult Children

In recent years, there has been a growing opinion among advisors for wealthy families that assets should remain in trust, even for adult children, for as long as possible for the asset protection and other benefits that a trust can offer. For a wealthy couple with adult children, the question may no longer be a one of legal capacity or maturity (although those issues may still remain). The bigger questions may, more accurately, become: who should really benefit from the fruits of my labor and how do I protect those assets from creditors, potential creditors and ex-spouses.  Depending on your perspective, dictating from the grave may or may not be a pejorative expression. For as long as trusts have been in existence (800+ years), the idea of controlling assets for as long as allowed with a set of instructions has been considered acceptable and often sought after planning.  In fact, centuries ago, keeping assets in trust forever was, more likely than not, the goal; hence the genesis of the “rule against perpetuities.” This rule was law in all 50 states to prevent perpetual or “dynasty” trusts. Over the last several years, many states have been modifying this rule to allow for longer trusts or have outright abolished the rule. Whether or not to leave assets in trust for adult children depends on many factors; not the least of which is personal preference. However, in our litigious society of high divorce rates, leaving some assets in trust with fairly liberal access is certainly worth consideration.

For more information on how you can avoid major errors in your estate planning register to attend an educational workshop hosted by our team of estate planning professionals by going to www.MASeniorWorkshop.com or by calling (800) 964-4295 (24/7).  You can also access several free guides and reports on our website by clicking HERE

We look forward to helping you and your family.

 

Tags: Estate Planning, Estate Planning, asset protection, Massacusetts Estate Tax, 401(k), gifts, GST tax, gift tax, Estate Planning Tip, estate, estate tax, Massachusetts estate tax, estate tax savings

Avoiding Massachusetts Estate Taxes, NOT Just for the Rich

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Fri, Aug 19, 2011

When you pass away, who do you want as the primary beneficary of your estate, your loved ones or the government?

Estate Tax Facts

Many people, as you may guess, do not want their life savings and legacy to be swallowed by estate taxes.  What most people are not aware of however, is the fact that if they passed away today their heirs would be forced to pay state and federal estate taxes, even if the deceased is far from what most would consider "wealthy".  They also do not realize that an experienced estate planning attorney can help them AVOID taxes ENTIRELY.  

Massacusetts Estate Tax

Massachusetts taxes every dollar in an estate above the $2 million threshold, recently increased from $1 million.  What Estate Tax this means is in an estate worth $2.5 million dollars, $500,000 will be subject to a Massachusetts estate tax.  Many are concerned with budget cuts and sweeping reform that state legislators will consider dropping the tax exempt amount, thus subjecting more estate to a tax.  within the last 10 years, the federal estate tax exemption, which now stands at $5 million, has been as low as $675,000.  

If your current estate exceeds the state and federal tax exempt amount, without proper planning you can expect to lose 50 cents of every dollar to the government. 

You may be reading this, thinking that your estate is not in jeopardy of being destroyed by taxes because you are well under the exemption amount.  You may think your estate is well under, but there are several catagories of non-obvious wealth you need to include in your estate valuation.  The most common of these are life insurance death benefits and retirement accounts such as 401(k)'s and IRA's.

An Example on the Impact of Estate Taxes

Person A is married, has 2 college age children and belives his estate to be worth $700,000.  Person A failed to take into consideration his IRAs and life insurance policies.  Believing their net worth to be well below the $2 million Person A and his wife executed simple wills with no consideration paid to tax planning. 

Tragedy stirkes and Person A dies.  After his death his wife collects a $2 million life insurance benefit and his $500,000 IRA.  In another tragic turn, Person A's wife dies shortly after him.  Their estate, which they believed to be under the Massachusetts exempt amount, is now worth $3.2 million, leaving $1.2 million subject to estate tax, even if the state and federal thresholds are not lowered.

Avoid Massachusetts Estate Tax

Luckily, many people like Person A and his family can completely avoid paying any estate taxes.  To take steps to protect your life savings from the reach of state and federal estate taxes, register online to attend a free educational workshop hosted by Dennis B. Sullivan, Esq, CPA, LLM or by calling 800-964-4295 (24 hours a day).  You can also check out Free Elder Law Guides developed by the team of professional at Dennis Sullivan & Associates.  By planning now you can save you and your family the stress of having to worry about the future. 

Tags: will, Estate Planning, trusts, Estate Planning, Massacusetts Estate Tax, Baby Boomers, Tax Savings, estate reduction, legacy, elder care, budget cuts, tax deductions, tax liability, estate, estate tax, tax exemption, tax reform, taxes, Debt Ceiling, 2011, Massachusetts estate tax

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