Massachusetts Estate Planning & Asset Protection Blog

A Married Couple's Asset Protection Journey

Posted by Dennis Sullivan & Associates on Thu, Aug 30, 2018

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At Dennis Sullivan & Associates we were fortunate enough to be able to help a married couple, both teachers, plan for their retirement and estate planning. After being referred to us by an independent financial adviser toward the end of their careers we advised that they may want to attend one of our Free Discovery Workshops on Estate, Trusts, and Asset Protection Planning.

After being impressed with what they learned at the Workshop they scheduled their complimentary meeting to have us review their existing wills, trusts, disability, and healthcare documents. They made it clear that they had long term care insurance that would cover only $100 per day for two years (At the time cost of care at a nursing home was roughly $400 per day). Therefore, they would have had to pay $300 per day had a situation arose in the near term. $300 x 365 = $109,500 annually for two years, a total of $219,000. After the first two years of coverage lapsed, they would be responsible for the entirety of the cost of care payments. If nursing home costs did not rise, at $400 they would be looking at a nursing home bill of $146,000 annually. For comparison, the rates today are in the neighborhood of $18,000 per month and are steadily rising.

Because of the high cost of in home care and a desire to maintain control of their assets and healthcare decisions they had us create for them an updated Revocable Living Trust as well as a new protective trust for their home and long term savings. Having a solid asset protection plan allowed them to decide to avoid paying over $15,000 every year to expand their long term care coverage from $100 to $250 a day, which was short of the $400 a day, cost at the time. They were pleased that this estate plan would protect their home, spouse, and life savings!

Over a decade later they remain clients and members of The Lifetime Protection Program as we help them strategically plan how their trusts and other life and death documents should function to preserve their capital.

As members of the Lifetime Protection Program, this retired couple enjoy many benefits. First, we helped them implement the proper healthcare documents for their children and grandchildren, over the age of 18, to ensure that in the case of an emergency; medical professionals would be able to disclose information to family members. This is a little known secret that you do not want to find out the hard way. [Please see our upcoming workshop schedule to discover more]

With healthcare documents in place, we were able to focus our attention on asset preservation and protection. As with most people that we help they were interested in ways to provide for the surviving spouse and ultimately, maximize the inheritances of their family members. Putting the deed to their home into their protective trust ensured that when their children inherited the property they would receive the step-up in basis as well as protecting the home against nursing home costs down the road. This alone will save their children from paying any long term capital gains if they sell the home at market value. Various gifting strategies, educational savings plans including a 529 account, were additional steps taken to reduce their overall estate tax levied by the Commonwealth of Massachusetts. An important step taken was to update their Durable Power of Attorney forms to provide maximum security in the event that either one of them lost capacity during their lifetime, and there were assets that were NOT included in their trusts. To discover more about trusts, life and death planning, as well our unique process and services visit DSullivan.com and sign-up for a free discovery session. You and your family will be glad you did for generations to come. This planning could save you and your family countless nightmares, heartache, and a significant amount of money. Click here to attend an upcoming workshop today or call 1-800-964-4295 to register.

Tags: grandchildren, care costs, step up basis, Inheritance, surviving spouse, Wills, irrevocable trust, trust, transferring, donations, charitable

Be Prepared Before Alzheimer’s Strikes

Posted by Dennis Sullivan & Associates on Fri, Apr 03, 2015

Be Prepared Before Alzheimer’s Strikes | Massachusetts Elder Care Attorney

 

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One of the problems we see in clients with early stages of dementia is trouble managing their personal finances. This can often lead to costly financial mistakes before there are signs that something is wrong.

No one knows exactly what the future holds for us, so early planning for potential late-in-life health issues is essential, as is keeping an eye open for any potential warning signs in loved ones.

If you notice that a loved one seems more disorganized than usual (bills are piling up, they have a hard time remembering names and words, or if things are in strange places throughout their home), it is a good idea to contact a doctor. Alzheimer's and most forms of dementia are progressive, this means it will get worse over the next few years.

Even before a diagnosis, it is important for people to discuss with their families how they would like to be helped. This includes deciding who will be the primary caregiver and who will be in charge of finances. According to a recent USA TODAY article, titled "Financial planning for dementia," a person with dementia often feels insecure that he or she will lose control and everyone else will tell him what to do. This is why conversations are so important to have before there is a problem in order to make sure your loved one’s wishes are carried out as well as avoiding confusion and misunderstandings later on.

We strongly recommend that everyone should have a will, power of attorney, medical directive, as well as a living trust set up before they have a problem. Without these important documents, the courts may need to become involved and appoint someone to oversee the care and finances, possibly someone with no connection to the family involved. This can be frustrating, time-consuming, and expensive.

In the course of the disease, a person may need help with the actions of daily living and may have trouble communicating. At this point, someone else should be designated to take care of all financial matters, and it might be time to start looking into an assisted living facility.

Healthcare costs for dementia patients can be substantial, and it is very important to provide for the financial security of a healthy spouse. If you would like to being the review process, please contact our office.

 

For additional guidance, please see The Seniors and Boomer's Guide to Health Care Reform and Avoiding Nursing Home Poverty the book provides important information for families on resources for quality care and protection for loved ones.

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: assisted living, power of attorney, trust, Wills, Alzheimers Disease, 2015

The Importance of a Well Crafted Power of Attorney

Posted by Dennis Sullivan & Associates on Fri, Jan 23, 2015

The Importance of a Well Crafted POA | Massachusetts Estate Planning Attorney

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As we always tell our clients, a power of attorney is just as important, if not more important to you, as your will.  Yet most people pay far more attention to the drafting of their will and give their power of attorney (POA) little or no thought. 

A last will and testament establishes your desires as to whom and in what manner you choose to leave my possessions and assets when you die.  While meaningful to you, it is more relevant to the persons receiving those assets after you’re gone.  A power of attorney, however, is critical to your well-being while you are still alive. The power of attorney is used at a time when someone is at their most vulnerable, when you can no longer take care of your own affairs and need the assistance of the person or persons who has been designated as your agent(s).

However, setting up a power of attorney has always been an afterthought for many people.  Before computers, a common response to the need for a POA was to pick up a preprinted document from the stationery store, today’s version is to print the document from a website found on the internet, such as LegalZoom.com. Both usually contain language no more specific than “I give my agent the authority to do anything that I can do as a principal”. In fact the fine print on the site informs you that “We are not a law firm or a substitute for an attorney or law firm. We cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options, selection of forms or strategies.”  If that is the case, how could you rely on their “non-legal” documents to take care of yourself and your family?

 Even when an attorney drafts the document, many will use a one size fits all approach that can often be detrimental to the client.  I think that the ease with which this document can be created has led to the myth of its low value in the eyes of the general public. Nothing could be further from the truth.

Here is a recent situation that we faced in our office that serves as an example to highlight the importance of the document and how critical a role it plays in achieving our client’s goals and objectives. 

 

We had drafted the client’s power of attorney.  It contains language permitting the agent “to enter any safe deposit box or vault on which [the principal is] a signer and withdraw or add to its contents”.  The agent wanted to close the account and surrender the box.

The bank employee reading the clause concluded that this power did not include the ability to close out the box (although he agreed the agent could close the bank account).  This is a situation we have come across frequently, an evaluation of the document limited to the express language, rather than examining the document as a whole.  Courts have reasoned that the whole document must be examined, and each clause should be used to interpret the others.

If the agent has the power to remove and add contents to the safe deposit box then he has the power to “deal with” the box and therefore has an implied power to open and close the box.  We could have had relied in this argument with the bank, however, there was another paragraph in the document that permitted the agent to conduct any banking transaction authorized by a specifically referenced Massachusetts statute.  I pointed out to the bank employee the specific language in that law authorizing the agent to open and closed safe deposit boxes.  What could have been a long, drawn-out problem was solved quickly through a carefully worded power of attorney.

In our 27 years helping people and their families, I have had numerous instances in which third parties, usually financial institutions, question the language in our documents.  As a result, we are constantly updating them.  The take away here it to make sure you have a detailed, well drafted power of attorney.  Don’t opt for the vague, 2 page, cookie-cutter documents printed off the internet.  It could easily be one of the most costly mistakes you ever make.

 

For more on the mistakes and oversights that can affect people and their families, take a look at our new book: The 10 Biggest Estate Planning and Asset Protection Mistakes People Make and How to Avoid Them! 2nd edition, now including the special bonus chapter, The Biggest Long Term Care Planning Oversights and Opportunities for Long Term Care

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: probate, durable power of attorney, trusts, power of attorney, transfer of assets, Wills

A Tale of Two Plans

Posted by Dennis Sullivan & Associates on Mon, Nov 24, 2014

A Tale of Two Plans | Massachusetts Elder Law Attorney

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Lifestyles of the Rich and Famous

Estate planning attorneys and their clients alike are interested in the lives of the rich and famous. From star athletes to established Hollywood super stars to up-and-coming musicians; we’re all guilty of reading up on other people. There is one thing that estate planning attorneys know that their clients probably don’t: that the type of estate plan you have dictates just how much information about your life, health and financial affairs will be publicly available about you after you pass on.

Everyone Will Know

George Washington’s Will is available to anyone who walks into the Fairfax County, Virginia, courthouse, or with a short search, anyone with an internet connection. It’s not just the Wills of historical or political figures that are available either.

If someone dies with only a Will in place, it is very easy to find out all about their assets and final wishes. Except in the rare instance of a local law to the contrary, the Will of every person (who died with one admitted to probate) is available for inspection in the locale in which they resided at death. The assets controlled by the Will are inventoried and that inventory is also a public record.

Unless You Have a Trust

While some clients may not care about privacy, others would be startled to think that a listing of their assets would be available to their nosy neighbors, distant relatives, and anyone trolling through public records.

With a trust, the terms are private and your assets are private. Some clients may not care about costs or delays their heirs may encounter after their death, however, many of those will care about their ongoing privacy as well as their families. This can be especially useful in preventing predatory lawsuits and leaving assets to someone who is going through hard times who may not wish to advertise an unexpected influx of cash.

Two Different Approaches

Recently, the privacy of differing plans was illustrated by the unfortunate deaths of actress Lauren Bacall and comedian Joan Rivers. Bacall’s estate plan utilized a Will as the primary vehicle, while Rivers’ plan used a Trust as the primary vehicle for her assets. By using a Trust to pass on her assets to her heirs, Rivers plan and the extent of her assets are not available for anyone but her attorney and her those she left her assets to. Bacall’s plan on the other hand, left her instructions, plans and assets laid bare for anyone with an interest to see. Her assets will be inventoried and that inventory, along with her Will, shall be available in the “Surrogate’s Court” in Manhattan, where she lived.

Research shows that 86% of trust & estate plans fail! In Our Newest book we reveal what the ten biggest estate and asset protection mistakes are and how to avoid them. Learn where problems may exist in your current plan, and where there may be hidden opportunities in your plan to protect your home, spouse family and life savings. Click here for more information.

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 for more information on  Estate Planning and Asset Protection

Tags: Estate Planning, probate, trusts, Wills, privacy

A Lack of understanding with Wills

Posted by Dennis Sullivan & Associates on Fri, Nov 21, 2014

A Lack of Understanding with Wills | Massachusetts Estate Planning Attorney

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A Common Misconception

Many people think a Will, will control how their assets will pass after they’re gone, yet most assets today pass outside of Wills. For example, assets held in joint tenancy pass to the surviving joint tenant. If there is a surviving named beneficiary (as there are on retirement accounts, POD, TOD and life insurance plans), then those assets held as such will pass to the surviving named beneficiary. Your other assets that do not have those designations pass pursuant to your Will.

 

Example A

Joe’s Will left his estate equally to his four children with each getting 25%, however, Joe named his oldest child, Todd, as the sole beneficiary on his life insurance policy. As a result, Todd got all of the life insurance and 1/4 of the Probate estate. The other three children each get 1/4 of Joe’s Probate estate, but none of his life insurance. Todd refused to share the money from the insurance policy, leading to bitterness and estrangement from his siblings. Joe had made the all too common mistake of assuming that his Will would control everything, and as a result his children were left confused and angry by his poor planning.

 

Example B

When she was younger and still single, Jill named her sister Mary as the beneficiary on her retirement plan at work, and her life insurance policy. Jill and Mary purchased a first home with joint tenancy; both sisters lived in and shared the house. A few years later, the sisters had a falling out and Jill got married. Subsequently Jill changed her Will to leave everything to her husband.

However, because Jill never changed her beneficiary designations on her retirement plan or on her life insurance, or the joint tenancy on the house she and her sister had purchased; the bulk of her estate passed to Mary on Jill's death and not to Jill's husband. An additional complication came in when Jill's husband sued Jill's sister to assert a spousal community property interest in Jill's retirement and the house.

 

The Solution

These problems, and many others, can be avoided by properly using a Living Trust as the basis of your estate plan. Aside from the greater control a Living Trust provides, greater privacy, more flexibility and it is harder to challenge since it avoids the ordeal of probate. While a Living Trust may not be the best solution to every estate planning problem, it is a wonderful tool to have at hand. As always, we recommend consulting an estate planning professional when drafting your estate plan and documents. We also highly recommend updating these documents at least every three years to make sure that your assets will be going to the right people in the right amounts.

 

Research shows that 86% of trust & estate plans fail! In Our Newest book we reveal what the ten biggest estate and asset protection mistakes are and how to avoid them. Learn where problems may exist in your current plan, and where there may be hidden opportunities in your plan to protect your home, spouse family and life savings. Click here for more information.

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: Estate Planning, probate, trusts, transfer of assets, Wills, joint tenancy

Is Your Will Doing What It's Supposed to?

Posted by Dennis Sullivan & Associates on Mon, Oct 20, 2014

Is Your Will Doing What It’s Supposed To Do?

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A $500,000 Mistake

Rebecca called after her husband, Peter had died.   She had questions about his will and his 401k.   Rebecca was Peter’s second wife and he had two daughters from his first marriage.  Between his first and second marriages, Peter had designated his daughters as the beneficiaries of his life insurance and 401k and had changed his will to leave everything to them as well.

After they married, Peter changed his will to leave some of his assets, including his $500,000 401k, to Rebecca.  The home he and Rebecca lived in, but which he owned, he left to his daughters, but provided Rebecca with the legal right to live there.  The life insurance he didn’t change.  His daughters remained the beneficiaries.   So just what was the problem?

Rebecca was told by the 401k custodian that Peter never changed the beneficiary designation to her.  As such, she was told, they must pay Peter’s daughters, not Rebecca, despite what the will says.  Understandably, Rebecca didn’t like that answer. This unfortunate result could have been prevented with #3 in our unique 19 Point Trust, Estate & Asset Protection Review.

Wills On Their Own Aren’t Enough

The reason Rebecca couldn’t get the money Peter had meant for her was because wills do not automatically control how all property passes.  The Will only applies to what are called probate assets, those that pass by way of the will.  Non-probate assets, such as retirement accounts and other assets which have beneficiaries designated upon death, are not governed by the will.   That was why Rebecca wasn’t able to get the 401k that Peter had intended for her. For more information on this subject take a look at the Special Bonus Chapter The Biggest Long Term Planning Mistakes in our new book, The 10 Biggest Estate and Asset Protection Planning Mistakes People Make And How to Avoid Them! Available soon on Amazon.com soon

She asked me if I thought a lawsuit could force the 401k custodian to pay the account to her because the will clearly states Peter’s intent to leave it to her.  She even showed me the paragraph in Peter’s will which makes reference to the 401k and his desire to leave it to her.

 

All Too Common A Problem

I told her about a case I had read about several years before which had many similarities to hers.  Just like in Rebecca’s case, a husband had died leaving his 401k to his wife, Sarah, via his will. Also just like Rebecca, Sarah couldn’t collect it and contacted an attorney. Sarah’s attorney filed a lawsuit to try to get a court to order the IRA custodian to pay a surviving spouse even though the beneficiary designation on file named someone else.  Not surprisingly he lost the case because the beneficiary designation trumps the will.  Retirement accounts are referred to as contract property.  There is a contract with the custodian that when you pass away they will pay the beneficiary whom you have designated and if there is none then the company has a predetermined set of beneficiaries (usually the “estate”) that they will pay.

So Now What?

In that other case, the only option Sarah had was to file a malpractice claim against the attorney who drafted the will because he should have known that leaving contract property by way of a will is impossible.  Unfortunately, that was the only option Rebecca had at this point as well.  I couldn’t say whether she had a good malpractice claim.  She would need to speak to an attorney who does that kind of work.  But as far as getting it from the 401k account, I told her she’d lose out on the $500,000, a very costly mistake indeed.

This is why we always tell our clients that a will by itself is never enough on its own. Less experienced attorneys will often make the mistake of listening to this common misconception, and it is their clients who wind up paying the price.

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: Estate Planning, trusts, Wills, Beneficiary

Ten Estate Planning Success Tips

Posted by Dennis Sullivan & Associates on Mon, Oct 20, 2014

Ten Estate Planning Success Tips

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Have You Planned for the Future Yet?

So you’re worried about the future, you want to make sure that not only your spouse, family and property is taken care of when you pass, but you want to make sure you’re taken care of while you’re still here. There is a lot of information out there to sort through, some of it is conflicting, and all of it is confusing. Here are some basic tips to help you get started: 

  1. Update your documents regularly. We honestly cannot stress this one enough. Keep your legal residence address, marital status, children and their potential guardians, and other documents updated. 
  1. Keep track of beneficiaries for all of your IRAs, qualified plans and insurance policies. Do you know who your beneficiaries are for these assets? If you don't, they may be going to someone you no longer wish to receive them, such as an ex-spouse. You can easily change the name of the person who will receive their benefits by filling out a form and submitting it. 
  1. Maximize the liquidity of your estate. Liquidity is defined as the ability to quickly turn assets into cash. Without sufficient cash to pay taxes, funeral, and other expenses, your family may have to sell illiquid assets - such as a family business or other property - at an inopportune time, and for less than full value. 
  1. Maintain an Appropriate Mix of Investment Risk. It's not the best idea to have too much money allocated to risk in stocks or mutual funds, as you age. Over time, more risky investments should be moved into safe and stable investments such as Annuities to ensure you are leaving an inheritance. 
  1. Name a dependable executor and/or trustee. Executors are called upon to collect assets, pay obligations, and distribute your assets. Your trustee must enforce all the provisions of any trusts you created. Choose someone who will have the knowledge, integrity and stamina to fulfil these obligations in the face of pressure from family members and lawsuits. 
  1. If you have minor children, consider naming one guardian for your minor children and another for the property you've left to support them, this will help ensure that your child will receive the full amount you’ve left them when they come of age. 
  1. Estate planning for your spouse or other sole survivor scenarios. If your net worth is high enough, your estate may be subject to taxes. A simple estate plan using trusts can save some individuals hundreds of thousands of dollars in estate taxes. 
  1. Make sure you are leaving the right assets to the right people with the right protections and provisions. If your child or other dependent has special needs or has been irresponsible with money in the past, you may not leave wish to leave them with the money to handle on their own. Make sure any minors receive much needed management assistance along with the cash. 
  1. Planning is even more difficult for business owners, who must plan for the succession and/or the buy-out of their business after they pass. Make sure any preparations that are needed for a smooth transition are taken care of. 
  2. Consult a professional. This may seem obvious, but we do have to say it. Estate Planning is a complex and difficult subject for most people to take care of on their own, and simple mistakes can cost you and your family tens or even hundreds of thousands of dollars. 

But Wait, There’s More!

Got all those taken care of? Well don’t relax just yet; there are still dozens of other questions you need to take care of before you’re done. Have you protected your assets from all unnecessary taxes? Have you established trusts that will be safe from predatory lawsuits? Are your documents up to date with the ongoing changes in laws, policies and eligibilities? Have you made sure to secure a portion of your assets in case you need nursing home care or are you planning to try and give everything away beforehand? These are things you need to take care of before your planning is truly complete.

 

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 for more information on  Estate Planning and Asset Protection

Tags: Estate Planning, probate, trusts, protection, Wills, Estate Planning Tip, 2014

A Trust For A Future Generation

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

A Trust For A Future Generation
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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

Unequal Inheritance, A Problem with Communication

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Fri, Aug 22, 2014

The Problems with Unequal Inheritance | Massachusetts Estate Planning Attorney

Inheritance, family, unequal 

Just Because It Makes Sense to You…

Sometimes clients want to leave more to one of their children than another. Their reasons may vary, ranging from their child’s current financial wellbeing, to any special needs they may have or even which of their kids is their favorite. What does not seem to change though is their concern that this may cause discord in their family once they find out.

It can be an uncomfortable subject to talk about with your family and you can never be certain how people will react, but the alternative of finding out only after their loved one has already passed, can be far more devastating. The reasons you use to make the decision of who-gets-what may be perfectly clear to you, but your children may not know what you based your decision on and they will never get a chance to ask you about it. The emotional fallout from this can rip once close-knit families apart.

 

Money Does Not Equal Love

This is because of the often mistaken tendency to equate love and money. If you leave more money to one of your children their siblings may think that you loved them more. After all, if you had some sort of logical reasoning behind the decision, why wouldn’t you have simply told them? You may have had very good reasons for why you did not talk to your children about this before but the lack of communication can have devastating effects on your family once you are gone.

 

Explanations Make Everything Easier

For example, you leave three quarters of your estate to your youngest child but only one quarter to your oldest, but you still make them the executor of your will. The older child will have a hard time not feeling resentment towards their sibling and their new responsibilities without any explanation from you. Simply explaining your reasons can go a long way towards preventing a bitter legal fight once you are gone. We recommend sitting down with all parties and explaining your reasoning to them in person. However, we know that not all families are comfortable talking about money, in those cases we recommend leaving a detailed letter explaining your reasons why you divided your estate the way you did.

Expanding on the earlier example, you may have decided to name your oldest child as executor simply because you know it will be more convenient for them to meet with your estate planner since your younger child has moved several hours away for work. Just telling your child this will lighten the burden on them. Likewise, you may have left more of your estate to your youngest because they need the boost starting their own business or because you know their financial situation isn’t as strong and they may need some help. A simple explanation can prevent a lot of needless stress from ever arising in your family.  

 

 

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.

 

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

Tags: will, family, executor, Massachusetts, Wills, senior, Inheritance, children, unequal

Can Your Will Protect You When You Don't Die?

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Thu, Aug 07, 2014

 

What Happens When You Don’t Die?

medicare, medicaid, wills, spouse

 

Is your “I love you” will capable of protecting you or your spouse from long-term care costs?

You know the kinds of wills we’re talking about: The husband leaves everything to the wife, the wife leaves everything to the husband and after they both die, everything goes to the kids. This works well in situations where the spouses are healthy one day and are deceased the next. 

However, as most of us know, life usually doesn’t work that way very often. Research indicates that nearly 70% of individuals over 65 will require some kind of long-term care in their lifetimes.

Thus, many spouses worry that if they predecease an ill spouse who is currently in a nursing home or will require long-term care at some point in the near future, there will be insufficient funds available to provide for their institutionalized spouses’ needs. This is an especially relevant concern for expenses that are not covered under Medicaid such as: care managers, private nurses, single rooms, as well as certain therapies and drugs.

Another concern is that the availability of funds from “I love you” wills and trusts will disqualify the surviving ill spouse from eligibility for Medicare benefits. As you know from prior articles, Medicare (MassHealth in Massachusetts) is the only long-term-care governmental program in the United States and does not cover long-term custodial care.

To solve this problem many of our clients rely on a “testamentary trust”. This is a trust built into the will of each spouse. For many estate planners, this is counterintuitive because much of the estate planning occurs within the context of a revocable living trust. In order to preserve access to Medicaid eligibility without requiring that the surviving spouse spend down the assets and lose the chance to maintain a “rainy day fund”, creating a testamentary trust in the will of the pre-deceasing spouse is essential.

What this means is that around age 55, you have to completely revise your wills and trusts to accommodate a different paradigm of thought. The thinking process is no longer “What happens when I die?” Now the question becomes “What happens if I don’t die and live a long time with expensive long-term care?”

The new paradigm requires a new estate plan. If you consider yourself middle-class (meaning that your net worth will be significantly impacted by the cost of long-term care for you and/or your spouse) and are over age 55, we suggest that you revise and update your estate plan to reflect your current and future needs as soon as possible.

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.

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

Tags: will, living will, Estate Planning, Estate Planning, Alzheimer's Disease, Elder Law, asset protection, long term care, Medicaid, in-home care, Health Care, estate reduction, estate, elder care journey, hospice, Alzheimers Disease, medicaid qualification, Wills, assets, Medicaid penalties, alzheimer's activities, in home, incapacity, Elder Law, Attorney, myths, Alzheimer's, alzheimers, financial, Attorney, income, Alzheimer's, federal, health, surviving spouse, in-home care, long term care insurance

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