Articles Posted in Asset Protection

While many members of the Baby Boomer generation view Millennials as self-involved, the Millennial age group has been maturing. Some Millennials are even currently in their early 40’s. This means that many Millennials are reaching a point where they are having to engage in difficult conversations with their parents about estate planning. While many people falsely believe that estate planning is only the process of designating who should receive what assets as well as how debts are settled after a person passes away, estate planning also involves deciding who should make decisions about incapacity as well as other critical end of life issues. To better help you prepare to have a conversation with your parent, this article reviews some critical estate planning discussion tips that you should remember.

# 1 – What Documents You Need to Prepare

Wills are critical for resolving issues with a loved one’s estate after they pass away. There are also other types of critical paperwork that your parents should prepare while they are still alive. These documents include things like health care proxies, living wills, and powers of attorney. Creating these documents is critical, particularly if your loved one has a history of either Alzheimer’s or dementia. You should also know where your parent stores all of this paperwork. You should additionally ask your parent to create a list of passwords for accounts.

Trusts are either irrevocable or revocable. Many people prefer revocable trusts because they want to avoid placing their assets into a trust whose terms they can never change.

Simply put, irrevocable trusts are trusts that cannot be modified or terminated without the permission of the trust’s beneficiary. After passing assets into the trust, a grantor cannot change the terms and removes all rights of ownership to these assets.

Meanwhile, a revocable trust’s terms can be altered or canceled. During the life of the trust, income is distributed to the grantor, and only after the grantor’s death are assets passed on to the beneficiaries. 

Unfortunately, there’s no one size fits all estate plan. This couldn’t be truer during a year when a large number of uncertainties exist about the future. The Covid-19 pandemic has changed our lives in countless ways, which includes an increased concern about end of life issues. As a result, as we begin 2021, there are some helpful estate planning strategies that you might consider implementing.

# 1 – Grantor Retained Annuity Trusts

Grantor retained annuity trusts are financial instruments that are used as part of the estate planning process to both reduce taxes on large financial gifts to loved ones. In accordance with these trusts, a person transfers property to an irrevocable trust for a certain time in exchange for annual annuity payments. At the end of the trust term, a beneficiary receives the remaining assets. Because interest rates are currently low, there is an increased likelihood that the amount passing to the beneficiary will surpass the calculated amount of the gifts, which allows assets to pass to family members without being subject to gift taxes.

Estate planning does not always appear on people’s things to do. Living through the coronavirus pandemic as well as approaching the second wave of the COVID-19 pandemic, however, should change the urgency with which people approach estate planning. New York currently has the fifth-highest number of COVID-19 cases among the states with more than 650,000 confirmed cases. Inevitably, some families during the pandemic will only discover that they lack sufficient legal documents when a loved one dies. To avoid expensive court cases, remember that estate planning is one of the best ways to prepare for the unexpected. To help you begin considering what legal documents to include in your estate plan, this article reviews some of the most common tools that people utilize.

# 1 – Wills

A last will and testament informs the court of who you would like to receive your assets after you pass away. This document also informs the court who you would like to make responsible for ensuring that your bills are paid and that assets transfer to the correct people. If you do not create a will and have not established other ways for your assets to be handled after your death, your belongings will likely not pass to the desired people. Instead, courts will often intervene and decide about who should receive these assets.

Electronic wills are likely to play a large role in future estate plans. The ability to both create and store a document align has greatly facilitated the creation of estate plans. The Uniform Law Commission also recently passed the Uniform Electronic Wills Act, which has greatly influenced how many states approach electronic wills. If you’re interested in creating an electronic will or are deciding whether an electronic will is a good idea for you, this article reviews some important issues that you should consider. 

Whether Electronic Wills Are A Good Idea

While many people wondered what parts of the estate planning process could be done electronically, this question has only become more common during the COVID-19 pandemic. Additionally, Millennials as well as many younger individuals often find it an antiquated and outdated idea to physically sign a will. These individuals often question why if so many tasks can be performed electronically, why creating an estate plan can also not be done in such a manner. Consequently, electronic wills are playing a more common role in estate plans.

Parents can make medical decisions for their children. After a child reaches the age of 18, however, and is viewed in the eyes of the law as an adult and a parent’s ability to make these decisions ends. 

Fortunately, through the use of a few simple estate planning documents, young adults can avoid this situation as well as many others.

# 1 – Financial Power of Attorney

Losing a parent is not easy. While being prepared for the event might not make the emotional aspect any easier, it can help to eliminate the potential for additional problems. As a result, this article reviews some of the important financial steps that you can take after a parent passes away.

# 1 – Determine if Your Parents Had an Estate Plan

The position of managing a parent’s estate after their death can be made much easier if a parent had an estate plan. Ideally, a parent will organize all of their estate documents in an easy to find but secured location. The best estate plans include wills that address how assets should be handled, dispositions of last remains regarding how a parent’s remains should be disposed of, and several other documents. 

Wills play an important part in the estate planning process. The best estate plans, however, include more than wills. Instead, the best estate plans anticipate the numerous complications that can arise at the end of a person’s life.

Advance Healthcare Directives

Medical powers of attorney and living wills serve an important role that wills simply do not touch. A medical power of attorney can be used to appoint someone to make healthcare decisions in case you become incapacitated. A living will can be used to determine what type of life-prolonging measures you would like if you end up on life support. 

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.

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