Massachusetts Estate Planning & Asset Protection Blog

Supreme Court Case Puts Inherited IRAs at Risk!

Posted by Dennis Sullivan & Associates on Thu, Jan 15, 2015

Supreme Court Case Puts Inherited IRAs at Risk | Massachusetts Asset Protection Attorney



A landmark case before the U.S. Supreme Court holds that Inherited IRAs are not protected from creditors. One June 12, 2014 the U.S. Supreme Court handed down its opinion in Clark v. Rameker, which questioned whether or not an inherited IRA could be shielded from Bankruptcy. Heidi Heffron-Clark inherited an IRA from her mother in 2001 and filed bankruptcy 9 years later, the question was whether she could keep the assets held in the IRA.

The Court unanimously held that retirement funds inherited by a beneficiary from the original plan participant are not considered to be “retirement funds” within the meaning of the federal bankruptcy exemptions found at 11 U.S.C. §522(b)(3)(c).

A clear legal distinction was drawn between an inherited IRAs and those that you set up for yourself. An inherited IRA has several unique features that suggest they are not retirement assets, which were noted by the Court. Unlike IRA owners, inheritors can’t add additional funds to the account, but they can take out money at any time without penalty. Usually a participant’s own IRA is subject to early withdrawal penalties if taken out early, unlike an Inherited one. Generally, non-spousal beneficiaries of an IRA must either withdraw the entire amount within five years of the original owner’s date of death, or take out a minimum amount each year, starting by December 31 of the year after the date of death. This is true for both Roth and Traditional IRAs.

What You Can Do To Protect The Inheritance For Your Beneficiaries:       

The upshot is that Clark v. Rameker argues very strongly in favor of setting aside retirement accounts that will pass upon the death of the plan participant into a special type of trust designed to both protect inheritances from future creditors of the beneficiary, but also to ensure that the trust will qualify as a Designated Beneficiary under the Internal Revenue Code.

A Retirement Plan Trust can be created to protect all of your inheritable retirement accounts. In creating this type of trust, you are using the trust as your beneficiary instead of the individual. The beneficiary of the trust will be the original individual you wanted to benefit from your protected retirement account. This is what many would call a “work around”, which is possible even with the new supreme court case.

For more information on how to protect your IRAs, click here to download our Free Report on the IRA Protection and Maximization Trust.


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: Protective Trusts, trusts, Tax on IRAs, trust, IRA, Inheritance, Supreme court

Review Your Estate Plans Regularly | Massachusetts Elder Law Attorney

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Mon, Aug 13, 2012

There are many reasons why it is crucial to have your estate plan reviewed. A proper estate plan must be modified to account for legal and tax changes, as well as life changes.

"While certain basic principles have held true over the years, new strategies are constantly developed and legislative changes alter the law and how it is applied. Proper estate planning is rarely a one-time event. Besides accounting for legal changes, the plan must be modified to account for life changes — birth, death, divorce, finances and health" -- Bonnie Kraham, Elder Law Attorney


estateplan family

"There is a tendency to view elder law estate planning as a static process resulting in a permanent portfolio. Both are misconceptions.

While certain basic principles have held true over the years, new strategies are constantly developed and legislative changes alter the law and how it is applied. Proper estate planning is rarely a one-time event. Besides accounting for legal changes, the plan must be modified to account for life changes — birth, death, divorce, finances and health.

Also, when a plan is created poorly the first time, often by those without direct experience in this area of the law, it is often necessary for those more experienced in elder law estate planning to fix the "broken" plan.

One of the more common errors we see is a purported MAPT, a Medicaid asset protection trust, that does not comply with Medicaid law. Sometimes, such a trust states that the grantors (Mom and/or Dad) are also the trustees, which is not allowed. Other times, the trust gives the grantors access to principal in trust assets. This also is not allowed.

The common fix for a defective MAPT is creating a new one that follows the law: The grantors may not be trustees, and the grantors have a right to income only from trust assets. They have no right to principal. The downside of starting over is that the five-year "look-back" period must lapse before the assets in the trust are protected. However, the current situation must be assessed to determine if the new MAPT makes sense.

Even the best of plans may be obsolete by the time they are needed, sometimes many years later. At a minimum, an estate plan should be reviewed every three years to see if any life or law changes affect it.

Over time, clients may want to change their backup trustees or plan of asset distribution. They may wish to add inheritance trusts to keep assets in the family. They might wish to change from a revocable trust to the MAPT because they were unable or unwilling to obtain adequate long-term care insurance. Assets for married couples may have grown to more than $1 million and the couple may need estate tax protection.

A systematic updating approach allows the client to have a plan better suited to their current needs. Periodic review reduces the chance of broken elder law estate plans.

If you're competent, you can always update your plan by either amending a trust or signing a new will, power of attorney or health care proxy.

If you are not competent but have an elder law power of attorney with broad gifting powers, your agent under the power of attorney may create, amend or revoke a trust, and make other changes in your best interest, including protecting assets from nursing home costs. The goal is to avoid the last resort, which is a court proceeding to fix a broken plan, or worse, having a plan whose purpose is defeated."

Article Reference:
"Protecting Your Future: Revise Estate Plans Regularly to Meet Needs" by Bonnie Kraham


At the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates, we help people and their families concerned with losing their homes and life savings to increasing medical and nursing home costs, taxes and the costs and time delays of probate. We also protect clients from losing control of their own health and financial decisions.

Research shows that 86% of trusts don’t work.  That’s why we developed our Unique Self-Guided 19-Point Trust, Estate, & Asset Protection Legal Guide, so you can learn where problems may exist in your planning as well as opportunities for improvement and how to implement a plan to protect your spouse, home, family, and life savings. 


Click Here to Download our Trust, Estate, & Asset Protection  Legal Guide


 We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at



Tags: Nursing Home Costs, Medicaid, Nursing Homes, Protective Trusts, Estate Planning, probate, Elder Law, HIPAA, durable power of attorney, health care proxy, seniors, elder care, estate tax, power of attorney, Beneficiary, estate

Dementia and Alzheimer’s disease | Boston Estate Planning & Elder Law Attorney

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, Jun 27, 2012

alzheimers disease attorney, elder law attorney, mass elder law

The definition of dementia, according to the American Heritage Dictionary of the English

Language, is “deterioration of intellectual faculties, such as memory, concentration, and

judgment, resulting from an organic disease or a disorder of the brain. It is sometimes

accompanied by emotional disturbance and personality changes.” Dementia is a syndrome or a group of symptoms that causes loss of intellectual function and usually progresses over time. 

Alzheimer ’s disease is the leading cause of dementia and the one we hear about the most. Not all people with dementia have Alzheimer’s. Different types of dementia exist. Other conditions, such as depression, will also cause dementia symptoms. Careful diagnosis of any dementia is essential in determining proper treatment and intervention. 

Types of irreversible dementia include Parkinson’s Disease (PD), Vascular Dementia (stroke),  Pick’s Disease, AIDS, Multiple Sclerosis, Huntington’s Disease, Wilson’s Disease, Lewy Body Dementia, Creutzfeldt-Jakob Disease, Frontotemporal Dementia, and Wernicke-Korsakoff Syndrome (alcohol-related dementia). 

Causes of reversible dementia can include depression, drug intoxication, alcohol and other poisons, nutritional deficiencies, brain disorders, diseases, a metabolic condition, organ dysfunction, traumatic brain injury, brain tumor, hydrocephalus, syphilis, encephalitis, and meningitis. 

Alzheimer’s is an irreversible dementia condition, but with the appropriate interventions, such irreversible dementias can be managed. Caregivers should seek out education, help, and support.  Physicians’ offices typically have resources available to get you started with this process.  If you would like further information on the different types of dementia, visit the following websites:

• The Mayo Clinic -

• The National Institute of Neurological Disorders and Stroke –

• The National Alzheimer’s Association -

• Alzheimer’s Disease Education and Referral Center (ADEAR) -

• Web MD -



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

At the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates, we help people and their families concerned with losing their homes and life savings to increasing medical and nursing home costs, taxes and the costs and time delays of probate. We also protect clients from losing control of their own health and financial decisions.

We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at


Tags: Alzheimer's Disease, Protective Trusts, Estate Planning, Estate Planning, Elder Law, HIPAA, elder care journey, durable power of attorney, Health Care, health care proxy, elder care, Financial Planning, massachusetts estate planning strategies, estate

Does My Family Member Need to Be Evaluated? Where?

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Tue, May 22, 2012

When a loved one's forgetfulness or confusion becomes obvious, it's time for a complete examination by a physician. This is the best way to determine whether the symptoms are temporary - perhaps caused by depression, poor nutrition, drug intoxication or interaction, alcohol, or organ dysfunction - or if they're permanent, and caused by dementia or Alzheimer's.

We're talking about a complete work-up here - physical exAsset Protection, Nursing Home, Alzheimer's, dementia, elder care, family am, medical history, neurological testing, lab tests, brain imaging, and function tests.

If your loved one has never been evaluated, it's best to see a neurologist or geriatrician. If, on the other hand, he's already been diagnosed with Alzheimer's, you should see a geriatric psychiatrist, who can look for signs of depression, agitation, or behavioral issues.

If you don't know where to look for a doctor, check a physicians' referral service. And if you participate in caregiver support meetings, ask the other participants.

A word of warning - Don't Settle! If you're not comfortable with a physician...find a new one! You'll be working closely with this person the rest of your loved one's life. And you need someone you trust...someone with whom you feel comfortable!

Once you have a diagnosis, make sure the primary physician is kept in the loop; after all, she's still the one you'll be seeing for general check-ups and regular health issues.

The best doctors in this field are the ones who realize that Alzheimer's is a family illness...and that the caregiver must be carefully monitored, as well, for signs of stress or depression.

This is a very stressful time for the entire family. And, for many families, a very confusing time. But you don't have to go through this process alone. Help is available.

At Dennis Sullivan & Associates, we are Estate Planning & Elder Law professionals. We've helped several Greater Boston families along the Elder Care Journey, by providing comprehensive estate planning, wills, trusts, powers of attorney, asset protection planning, long-term care planning, planning to qualifiying for MassHealth or for Veteran’s Benefits and by answering Alzheimer's/dementia questions.  

For more information and answers to Alzheimer’s/dementia questions please visit where you can access the Complete Alzheimer’s Resource Kit absolutely free.  We also encourage you to attend one of our free educational workshops by registering at   

You don't have to make the Elder Care Journey alone. We're just a phone call away.

Tags: Alzheimer's Disease, asset protection, Protective Trusts, Estate Planning, Elder Law, elder care journey, elder care, family, veterans benefits

How To Craft, Revise and Maintain A Well-Thought-Out Estate Plan

Posted by Dennis Sullivan & Associates on Wed, Mar 09, 2011

"Because there is no April 15th for Estate Planning and Asset Protection, many people try to procrastinate or avoid it.  However, there can be grave consequences to neglecting it." --Dennis Sullivan, Esq. CPA, LLM

It certainly is understandable that no one enjoys a conversation about death – especially their own! And, with the estate tax exemption now set at $5 million for an individual and $10 million for a couple, many people may believe they have no reason to consult an attorney about their estate planning.

Massachusetts will assess a tax on estates over $1 million. Without proper planning a married couple will have only $1 million between them.  See a lawer to be sure that you and your spouse get the $2 million exemption available to you.

Also, Massachusetts clients and taxpayers need to watch out for estate plans created based on maximum federal applicable exclusion planning, common for many estate plans prior to 2003. Now with the $5 million federal exempt amount, there could be a COMPLETELY AVOIDABLE Massachusetts estate tax triggered at the first death. The cost to your spouse and family could be as much as $400,000 in unnecessary estate taxes.

But avoiding the topic of estate planning can mean unnecessary expense, confusion and conflict.  Why do you need an estate plan? A comprehensive estate plan ensures that your estate is distributed according to your wishes, provides protection for you in the event of your own disability, and allows you to plan for your family. 

Can I write my own will? You certainly can; however, improperly drafted or last-minute,wills frequently are contested and invalidated in court. Massachusetts does NOT recognize handwritten wills. If you don’t know what you’re doing, the outcome could be much different than you expect. 

What should every estate plan have?  The list should include a will, powers of attorney for financial affairs and for health care, and a living will along with appropriate trusts.  Trusts not only reduce estate taxes, but they also help their heirs to avoid probate. Trusts also can shield assets from nursing home and medical expenses, loss due to unforeseen circumstances, such as bankruptcy, divorce or lawsuits of your heirs.

Two common mistakes people make in their estate planning: failure to plan for their personal effects and failure to review and update their plans over time. You can learn more about comprehensive estate planning by attending one of our Trust, Estate & Asset Protection Workshops and also by downloading our Unique Self-Guided 19-Point Trust, Estate & Asset Protection Legal Guide on our website.  Once you become a client, we have a Lifetime Protection Program to ensure that your planning stays up to date with the changes in law, fincial, health and family situations.

Tags: Protective Trusts, Estate Planning, Estate Planning, Mistakes, HIPAA, health care proxy, estate tax, estate tax savings, Massacusetts Estate Tax, living will, massachusetts estate planning strategies, trusts, power of attorney, Massachusetts estate tax, will, New estate tax law

The New Health Care Law and How It Will Affect Seniors

Posted by Dennis Sullivan & Associates on Wed, Jan 19, 2011

These are unique times with all the changes in the tax and healthcare laws.  As such, people need to understand that the New Healthcare Law is not going to protect them, their spouse, home, or life savings from the high cost of nursing-home care.  That is completely UP TO YOU!

Today, nursing home care cost is upwards of $120,000 annually.  A heartbreaking diagnosis of Alzheimer’s can mean a prolonged nursing-home stay of up to ten years or more – translating to sometimes over a million dollars.  Who pays?  For Alzheimer’s, dementia, or health issues related to aging, government payments are only available after almost all the family’s assets have been completely depleted.  The result is a spouse and family may be left  with no home of their own and very little to live on.  For more information, feel free to download our Free Massachusetts Elder Care Guides.

So what does Obamacare provide?  The Patient Protection and Affordability Act and the Health Care Education and Reconciliation Act are collectively known as the Affordable Care Act (ACA).  The ACA will expand health coverage for all Americans such that none of the guaranteed benefits under Medicare Part A and Part B is being cut.  In fact, many benefits are being improved.  However, households with higher incomes will be required to pay more for Medicare via the new higher Medicare tax.  In addition, those with higher incomes will also be subject to an unprecedented Medicare tax to be applied to unearned income (investment income, royalties, etc.).  Some of the provisions of the health care law will take affect immediately and some over the next several years.

The ACA has not eliminated the need for seniors requiring long-term care to plan ahead.  Planning ahead and applying for MassHealth (Massachusetts Medicaid) to pay for long-term care (in a nursing home or in the community) will still be necessary.  As a matter of fact, planning ahead is the only way for an individual or family to avoid becoming victims of nursing home poverty!  The government’s plan to provide for long-term care still be requires people to “spend down” their assets in order to qualify for assistance to pay the cost of a nursing home, which currently averages $10-$12,000 per month in Massachusetts.

On the plus side, a provision that will benefit seniors immediately is assistance with the Medicare Part D donut hole* (Medicare Part D coverage gap).  A $250 rebate will be paid to Medicare beneficiaries who hit the donut hole in 2010 (even by $1).  The first checks were distributed last June and will be sent periodically after that.  Seniors do not have to do anything to get their checks.  They will come automatically.  (Be cautious of scammers who may tell you that your checks can be obtained more quickly if you pay a fee.)  Beginning in 2011, once the “donut hole” is reached, there will be a 50% discount on brand-name prescription drugs and a 7% discount on generic prescription drugs.  By 2020, this “donut hole” will disappear, and Medicare beneficiaries will pay 25% of the cost until they reach the catastrophic* coverage level.

*The donut hole is the Medicare Part D coverage gap.  Once a Medicare beneficiary reaches the prescription drug coverage limit, the Medicare beneficiary is responsible for the entire cost of prescription drugs until expenses reach the catastrophic limit.  In 2011, this means costs above $2,840 in covered drug costs until you spend $4,550 out of pocket.  Catastrophic limit assures that once you have paid $4,550 out of pocket in drug costs for a calendar year, almost all your drug costs above that amount will be paid

 To learn more about how to plan ahead and your options to: protect your assets, protect your spouse, your savings, in-home care options, Veterans benefits, etc., attend one of our FREE workshops on The New Healthcare Law and How It Affects Seniors.  Attendance requires registration either by phone:  800-964-4295 (24hrs), or you may register online.  Please refer to our website for upcoming dates. 


Tags: Nursing Home Costs, Alzheimer's Disease, asset protection, Protective Trusts, Estate Planning, Estate Planning, Elder Law, Announcements, 2011, massachusetts estate planning strategies, trusts, retirement plans

Medicare v. Medicaid: What's the Difference?

Posted by Dennis Sullivan & Associates on Tue, Feb 23, 2010

Medicare v. Medicaid: What's the Difference and how will it affect you and your family?

Many people ask: Do I need to spend everything before getting help to avoid nursing home poverty? Not if you plan in advance!

Medicare and Medicaid: They sound alike, don't they?  Too many people don't recognize the difference between the two, especially in the area of long-term care expenses.  If you are relying on Medicare to pay a nursing home bill you may be in for a shock.

What is Medicare? Medicare is the federal health insurance program provided on behalf of people who are over the age of 65, blind, and/or disabled. Medicare is designed to cover short-term or "acute care" health care, that is illness from which you could get well!  If you are diagnosed with Alzheimer's, Parkinson's, dementia, or anything else that means a long nursing home stay, you will not be covered.

What WON’T Medicare Do? Medicare does not provide any benefits for what is called ‘custodial care’ or long term care benefits (nursing home care, for instance). If you meet some very specific qualifications, Medicare may cover some portion of the first 100 days of a nursing home stay, but after that you and your family are on your own! Few people realize the limitations on what Medicare will and won’t cover-which winds up costing them a substantial loss of dignity if or when they get hit with long term care expenses.
Avoid Nursing Home Poverty

What is Medicaid? Medicaid (MassHealth) is a separate, health care program that pays for 50% of the nursing home care in America today. Once you become sufficiently impoverished, then Medicaid is designed to provide care for you. That means if you need a nursing home, haven’t done any planning, and you are not impoverished, you are on your own dime! However, to qualify for Medicaid nursing home benefits you must be very ill and have no more than $2,000 total assets if you are single, widowed or divorced or $109,000 for a married couple.

Does that mean you need to spend everything you have before getting any help for you and your family? Not if you plan in advance!

Our Process:

At the Estate Planning and Asset Protection Law Center of Dennis Sullivan & Associates we help our clients plan to avoid nursing home poverty and protect themselves through a process that combines education and counseling. The process begins with an educational Trust, Estate and Asset Protection Workshop, held twice a month in Wellesley (for upcoming dates and to register, please visit us at  The workshops are an excellent way to review existing planning, if any, and learn how to avoid nursing home poverty by proactive planning to protect yourself, your spouse, your home, life savings and legacy.  We welcome all members of the community to attend. For those that cannot attend, please contact our office directly or review our free elder law resources.

Tags: Nursing Home Costs, Alzheimer's Disease, Protective Trusts

The Top 7 Mistakes in Estate Planning #5: Not Planning for the Cost of Nursing Home Care

Posted by Dennis Sullivan & Associates on Fri, Oct 16, 2009

     One out of every three adults over the age of 65 will need nursing home care for some period of time, and increasing health care and nursing home costs are one of the greatest threats to a comfortable retirement.  The costs in Massachusetts are approaching $12,000 a month and rising.

     Because long-term care insurance is so expensive, many families have chosen a Protective Trust to protect their lifetime savings, homes and other assets so that they do not need to spend their lifetime savings on a nursing home.  A trust also provides flexibility to protect assets and pay for in-home care and assisted-living facilities.

Tags: Nursing Home Costs, Protective Trusts, Estate Planning

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