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Monthly Archives

July 2015

How does a dementia diagnosis affect my ability to do estate planning?

By Elder Law, Estate Planning, Guardianship

Estate planning involves signing legal documents which those who are incapacitated due to a dementia diagnosis often cannot do.  For estate planning documents to be valid, they must be executed by a person with “testamentary capacity.”  This is why proper estate planning before capacity is lost or diminished is critically important in ensuring assets will be passed on to the desired beneficiaries.

However, a diagnosis of dementia does not always entail an immediate loss of legal competency or the right to sign contracts and undertake estate planning.  If a diagnosis of dementia is made and estate planning documents are not already in place, it is important to meet with an estate planning attorney right away to assess the necessary legal capacity or competency and discuss an estate plan before it is too late.

If you need help with estate planning for you or a loved one, contact Bach & Jacobs, P.A. at (941) 906-1231.

July 31, 2015
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Modifying an Irrevocable Trust

By Asset Protection Planning, Elder Law, Estate Planning

Florida’s Trust code allows courts to modify irrevocable trusts which are unambiguous but which have terms that are considered contradictory or wasteful.  Courts can modify trusts if the trust’s purpose no longer exists, if the modification is not inconsistent with the purpose of the trust, or if the current trust is wasteful or impracticable to fulfill under the current terms.

Modifications to irrevocable trusts can be made to preserve the intent of the original trust in changing circumstances.  If you have questions about setting up or modifying trusts, contact one of our experienced estate planning attorneys at (941) 906-1231.  Our firm represents trustees and beneficiaries of trusts and can advise you on your options and rights with regard to the trust.

July 28, 2015
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How can I help my loved one with special needs save for the future without affecting their state and federal benefits eligibility?

By Estate Planning, Government Benefits, Medicaid Planning

A new federal law allows individuals to help their loved one with special needs save for their future without jeopardizing their public benefits.  In December of 2014, the Federal Achieving a Better Life Experience (ABLE) Act passed through Congress.  This legislation allows anyone who became disabled before age 26 to save up to $100,000 (a large increase from the previously allowed $2,000) in a tax free account which will not affect their eligibility for state or federal benefits.  The money in an ABLE account can be used for education, housing, transportation, employment support, personal support services, legal fees, health expenses, funeral expenses, and financial management.  Regulations for these accounts are still in development but accounts should be able to be set up starting around mid-June of 2015.

If you have further questions or need Medicaid planning services for your loved one with special needs, contact Babette Bach, Esq., a Florida Board Certified Elder Law Attorney, at (941) 906-1231.

July 24, 2015
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What are the changes to Florida’s guardianship laws?

By Elder Law, Guardianship

The most important aspect of the new legislative changes to the Florida guardianship law is the modification of the method of appointing an emergency temporary guardian.  Under the new law which takes effect July 1st, 2015, a person who is allegedly at imminent risk of physical harm or of having their assets wasted and misappropriated and therefore in need of emergency guardianship protection must be notified along with their attorney at least 24 hours before the emergency court hearing.  Previously, advanced notification was not required which left many unprepared for proceedings.  This advanced notification is especially important as it has historically been difficult to contest the need for a guardian after one is appointed on an emergency basis as the ability to make a decision to change attorneys or access financial assets is often hindered.  Emergency temporary guardianship often led to a permanent guardian being appointed.  Now, an emergency guardian will no longer be given preference in hearings appointing permanent guardians and emergency guardians cannot be appointed to permanent positions without a request from the ward or their family.

Another change to the law is that if the ward’s condition improves and they could have some of their rights restored, the guardian is required by law to notify the court.  Lastly, a guardianship cannot suspend the power of attorney.

Babette Bach worked for the past year on this new law and is a legal activist for the elderly.  If you have questions about the new guardianship law or would like set learn about setting up a Designation of Pre-need Guardian, contact our Florida Board Certified Elder Law Attorney Babette Bach, Esq. at (941) 906-1231.

July 21, 2015
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Changes in Florida’s Elder Exploitation Laws

By Elder Law

A new Florida law seeks to better support elderly residents who are at risk of exploitation.  Previously, exploitation could only technically occur if an elder was exploited through intimidation or deception.  Now , an elderly person can be deemed exploited if he or she has been either temporarily or permanently deprived of their assets for the benefit of someone else.  An exploiter is defined as a person who has the trust of a vulnerable adult and uses that trust to obtain assets.

If you or someone you know has been the victim of financial exploitation against an elderly person, contact Sean M. Byrne, Esq. at Bach & Jacobs, P.A. to discuss your options for recovery of those assets.  Call our office at (941) 906-1231.

July 17, 2015
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Avoiding an IRA 10% Early Withdrawal Penalty

By Tax Law

Before you turn 59 ½ you will incur a 10% penalty for withdrawing money from your IRA.  However, there is an exception for people who are below the minimum age requirement but are considered disabled and no longer able to work.  If you meet these criteria, you will need to have your physician sign a letter documenting your disability and attach this letter to IRS Form 5329 to be filed with Form 1040.  Attached below is a letter template for your physician to print on their letterhead and both necessary IRS forms.  Also provide a copy of the letter and Form 5329 to the Plan Administrator so it does not withhold the 10% penalty amount.

5329

1040

Sample letter from Physician to avoid IRA 109 early withdrawal penalty

For individualized tax advice or high net worth tax planning services, contact Fredric C. Jacobs who is Florida Board Certified in tax law and an AV rated attorney at (941) 906-1231.

July 14, 2015
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Medicaid Planning and Qualified Income Trusts

By Elder Law, Estate Planning, Medicaid Planning

Even if your gross income (prior to deduction) is above the minimum required to qualify for Medicaid ($2,199 for 2015), you may be able to become eligible by setting up a Qualified Income Trust with the assistance of an attorney licensed in Florida.  The income you receive in excess of the minimum income requirement for Medicaid eligibility can be transferred into a Qualified Income Trust account and, as long as you continue to transfer this income every month, you may be able to qualify for Medicaid coverage.  Unlike Medicare, Medicaid can be used to pay for long term care services, such as assisted living facility or skilled nursing facility bills, which can very quickly become extremely costly.

To find out more about becoming eligible to receive Medicaid benefits to cover long term care, contact Board Certified Elder Law Attorney Babette Bach, Esq. at (941) 906-1231.  Babette is experienced in giving Medicaid eligibility advice and navigating the process of applying for and receiving Medicaid benefits while protecting your assets to the highest degree possible.

July 10, 2015
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How can I avoid a Florida probate?

By Elder Law, Estate Planning, Probate

Certain assets by their very nature can avoid probate.  Probate is not necessary to transfer certain jointly owned non-probate assets because these assets pass by operation of law.  In Florida, joint ownership is available through “joint tenancy,” which works well when couples acquire real estate, vehicles, bank accounts, or other valuable property together.  Additionally, “tenancy by the entirety” is available for married couples in Florida.  These provide for a “right of ownership,” transferring the ownership to the surviving joint owner.

Bank accounts can be transferred without going through probate if the account is designated as “payable-on-death.”  Your beneficiary has no right to this asset while you are alive as you still own and control it.

Stocks and bonds can be designated as “transfer-on-death” (also called beneficiary) form.  The beneficiary named will inherit this type of account automatically at your death.  Again, it is important to check this designation as assets change over time as do intended heirs.

Similar to “payable-on-death” and “transfer-on-death” accounts, “Individual Retirement Accounts” (IRAs) are distributed based on beneficiary designations upon the account-holder’s death.  You should consult with a Board Certified Tax Lawyer to learn about the options available for transferring IRAs and the relevant tax implications.

As long as a life insurance policy is payable to an individual or entity other than the policy owner, life insurance policy death benefit proceeds are transferred directly to their beneficiaries.

In Florida, you can make a “revocable living trust” to manage assets during your incapacity and then to avoid probate.  Trusts can be used for all assets you own including real estate, bank accounts, vehicles, IRAs, etc.  A trust document names someone to take over as trustee after your incapacity or death (called a successor trustee) so that they can transfer the property controlled by the terms of the trust to the trust beneficiaries without probate court proceedings after your death.  You may amend or revoke your living trust so long as you have the capacity to do so.

Trusts are always recommended to avoid ancillary probate for out-of-state real and tangible personal property owned.  The standard probate avoidance techniques – revocable trusts, joint with right of survivorship ownership, life estates – will work to avoid ancillary probate as well.  Steps taken with respect to real property should also include related tangible personal property, or probate may be avoided for the real property, but still required for the tangibles.

To consult with Board Certified Tax Attorney Fredric Jacobs, Esq. and an experienced estate planning attorney, contact our office at (941) 906-1231.

July 3, 2015
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