It is difficult to perform estate planning without taking finances and taxes into consideration. Instead, many people who perform successful planning discover that these three topics are interchangeably related. In the last year, several new topics have been introduced that redefine how each of these three areas.
This article takes a brief look at some new and exciting estate planning strategies.
# 1 – Upstream Gifting
The California Court of Appeals recently decided the case of Winston v. Winston-Levin, which reviews some important estate planning considerations. In 1986, Robert Levin created a revocable trust, which he later revised several times. Sadly Robert passed away in 2015, and litigation occurred concerning subsequent revisions to the trust when Robert’s daughter from a previous marriage initiated legal action against Robert’s widow.
The California court subsequently voided a revision to Levin’s trust and ordered the widow to return property she had received according to these changes. The daughter subsequently appealed arguing that the court had mistakenly voided the entire revision rather than just the portions that benefitted the widow.
The California Court of Appeals ultimately found that the trial court had made the correct decision and that only voiding provisions related to the widow would not carry out the deceased man’s wishes.
The usage of 529 plans is growing substantially. While for years, many families relied on these plans to fund college, these plans are also capable of being utilized to manage wealth, minimize taxes, and make multi-generational gifts.
This article takes a brief examination of the advantages as well as limitations that 529 plans can provide.
Avoid Gift and Estate Tax Rules
State plans for medical assistance under federal Medicaid law must comply with certain requirements located in Title 42 U.S.C. § 1396a.4, but do not always do so. In 2018, the United States District Court for the District of Alaska in the case of Disability Law Center of Alaska v. Davidson denied a motion for summary judgment on three claims alleging that Davidson who in her position as the commissioner of the Alaska Department of Health and Social Services had violated federal Medicaid law.
The violations of which the Center was accused were: failure to provide adequate notice on how to apply for and access applied behavioral therapy, not reimbursing for ABA under the program, and not providing ABA services under the program with reasonable promptness. In arriving at its decision, the court noted that the Disability Law Center had the burden under federal law of establishing that Davidson had deprived them of the following rights: the right to notice of availability of ABA services, the right to be reimbursed for ABA therapy, and the right to have ABA therapy provided.
The court’s subsequent decision subsequently supported the position that any state that has elected to participate in federal Medicaid programs must be prepared to provide services identified under the federal statute as mandatory. This case underscores the right that many individuals in the United States have to Medicaid benefits.
One of the common responses that many people have as they learn about estate planning is that there are a number of estate planning documents. In addition to things like wills, living wills, advance directives and powers of attorney, there also also a number of other important documents.
In New York there are Medical Orders for Life-Sustaining Treatment (MOLST) forms. This article briefly reviews what MOLST forms do and situations where you might need one of these documents.
The Role of MOLST Forms
In 1997, Ashley Sveen purchased a life insurance policy. Later that year, Ashley married Kaye Melin and named Melin as primary beneficiary on his life insurance policy. Sveen also named his two adult children as contingent beneficiaries.
Several years later, Minnesota amended its revocation on divorce. Sveen and Melin divorced in 2007, but Sveen never changed the beneficiary designation on his life insurance policy. After Sveen passed away in 2001, the insurance company that held the policy requested a court make a judgment on whether Melin or Sveen’s children should receive benefits from the policy.
The United States District Court of Minnesota then granted summary judgment for the Sveen children and awarded them life insurance proceeds. The United States Court of Appeals for the Eighth Circuit reversed and remanded this decision. Subsequently, the court found that the policyholder’s ability to opt out of the law by redesignating his former wife as the beneficiary of the policy did not resolve the issue.
By the time that the legendary screen actor and comedian Groucho Marx became a senior citizen, he had a difficult time making a number of decisions regarding his daily life.
During this time, Marx’s companion, Erin Fleming, was accused of elder abuse and experienced a deterioration in his relationship with Marx’s children. This was made complex by Fleming’s decision to push Marx to perform. Later, after Marx became incapacitated, Fleming was appointed as guardian and temporary conservator of Marx’s valuable estate. Marx’s grandson was later named permanent conservator.
Following Marx’s death, the fight for assets from the late legend’s estate continued on for years. A judge later resolved the debate in favor of Groucho’s children and ordered Fleming to repay a large amount that she had stolen from Marx’s bank accounts.
Statistics show there are an increasing number of older individuals who are divorcing later on in life. There is also an increasing number of individuals who are discovering that living together as an unmarried couple has its advantages.
According to the United States Census Bureau, the number of unmarried individuals who are older than 50 even increased by 75% between 2007 and 2016.
Unfortunately, however, living together as an unmarried couple creates a number of unique estate planning challenges. This article reviews some of these hurdles.
Creating a successful inheritance trust is not easy. In some situations even when a family believes that they have created a well-written inheritance trust, they have failed to address a number of complexities including those involving incompetency. This article reviews some of the elements that should be included in an inheritance trust.
# 1 – Appropriate Beneficiary Designations
Appropriate beneficiary designations are a vital part of trusts. Inheritance trusts are created so assets can be passed to a designated beneficiary during that individual’s life and following the individual’s death to any of the person’s children. Additionally, good inheritance trusts are written with the understanding that a situation might arise where a beneficiary is temporarily not able to serve as a trustee.
The introduction of cryptocurrency has created a number of new issues, which includes how these digital assets should be addressed in a person’s estate plan. Because the Internal Revenue Service has classified cryptocurrency as property capable of being taxes, it is possible to dictate how ownership of cryptocurrency should be passed in a person’s estate plan. In many cases, however, it can prove difficult to transfer ownership of cryptocurrency without creating a potential security risk.
The Estate Planning Challenges Presented by Cryptocurrency
A person’s ownership of cryptocurrency is represented in that individual’s virtual “wallet”, which also stores the owners’ credentials and interacts with blockchains so users can both send and receive cryptocurrency. Consequently, the person who knows the access credentials to a virtual wallet has access to any cryptocurrency that is contained in the wallet.
