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Asset Protection Planning

Financial institutions refusing to honor POA’s

By Asset Protection Planning, Elder Law, Estate Planning

In a recent New York Times article titled “Finding Out Your Power of Attorney Is Powerless,” the author discusses an issue that frustrates families and elder law attorneys alike —financial institutions refusing to honor powers of attorney. Some banks and brokerage firms have reportedly failed to accept powers of attorney out of fear of elder exploitation or concerns over liability.

Due to these reasons, the financial institutions have required their clients sign new forms with their institution. The banks have reportedly argued that some power of attorney documents were signed too long ago (“stale”) or even that it lacks the proper language.

Florida’s Durable Power of Attorney Act includes provisions aimed at preventing banks and financial institutions from refusing to honor a power of attorney, although they may legally require an opinion of counsel from a Florida lawyer that the document is valid.

The attorneys at Bach & Jacobs, P.A. can assist you in both the creation and enhancement of a durable power of attorney to ensure that it complies with Florida law.

December 20, 2016
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How to Use Advance Directives to Stop Financial Abuse of Seniors

By Asset Protection Planning, Elder Law, Estate Planning

Advance directives are documents that allow individuals to express their preferences and instructions regarding their healthcare and finances. Some advance directives include living wills, appointment of health care surrogates, and durable power of attorney documents. These documents are helpful in specifying your wishes for when you are unable to make decisions for yourself. By creating advance directives you can help prevent others from taking advantage of you and your assets in the event of incapacity.

When designating someone to fill these roles, it is recommended that you appoint someone trusted like a spouse, child, or a long-term friend. This person will make medical decisions for you, have access to records and finances, and will be given powers to act on behalf of you.

Living Will

A living will allows you to specify your wishes for life-prolonging procedures and end-of-life medical care.

Appointment of Health Care Surrogate

In this document, your health care surrogate has the authority to make medical decisions for you when you become incapacitated.

Durable Power of Attorney

A DPOA is used for making financial and legal decisions. While you are competent, you should designate an “attorney-in-fact” who will be given powers to act on your behalf.

Creating these documents is an important step in protecting you and your estate, and for ensuring safety and stability during times of incapacitation.

November 29, 2016
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What are alternatives to joint bank accounts?

By Asset Protection Planning, Estate Planning

While joint bank accounts can be a convenient and appropriate way for some individuals to title their bank accounts, joint ownership is not the best option for others. There are alternatives to joint accounts that can allow a trusted individual to have access to and properly manage your assets while you are alive.

One alternative to joint accounts is a durable power of attorney (DPOA). By signing a DPOA and filing it with the institutions where your accounts are held, your agent that you appoint in the DPOA can manage your finances for you, within the scope of your DPOA document. Your agent can still write checks and make withdrawals without your permission but they are legally obligated to make decisions in your best interest.

If your goal is to transfer the account to someone after your death without going through the probate process, then you can designate beneficiaries. The money from your accounts will pass directly to the individuals you designated without involving them in ownership while you are alive.

To review the title of your assets and whether it is consistent with your estate planning, contact our office at (941) 906-1231 to schedule an appointment with one of our attorneys.

November 25, 2016
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Changes in Estate Tax Law Alter Use of Bypass Trusts

By Asset Protection Planning, Elder Law, Estate Planning, Tax Law

In 2013, changes were made to estate taxes and now few people are subject to federal estate taxes. For those who die in 2016, the first $5.45 million of an individual’s estate is exempt from federal estate taxes, which means that up to $10.90 million is exempt for a married couple’s estates.

With these changes it now may be that a bypass trust is unnecessary for someone’s estate. Due to the restrictions put in place on the bypass trust, the surviving spouse has less control over the assets.

However, a bypass trust is still useful for estates larger than the current estate tax exemption. Additionally, even married couples who have less than the exempt amount of assets may still choose to use a bypass-style trust in order to provide for a surviving spouse’s income needs during their remaining life while still protecting an inheritance for children from a prior marriage.

To see a bypass trust would be appropriate for your family and financial situation, call our office at (941) 906-1231 to schedule an appointment with one of our attorneys.

November 15, 2016
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Can conveyance of property by Lady Bird deed avoid subjecting the property to probate?

By Asset Protection Planning, Estate Planning, Probate

A big advantage of signing a Lady Bird deed is that it avoids probate of the property after you pass away. In many states, including Florida, there is a Medicaid estate recovery program that seeks reimbursement from probate assets if you received benefits during your lifetime. But with a Lady Bird deed, the property is considered a nonprobate estate and the beneficiaries can inherit the property without having to reimburse the government for Medicaid benefits that you might have received.

November 1, 2016
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Is the conveyance of a Lady Bird deed an improper gift if made during the Medicaid “look-back” period?

By Asset Protection Planning, Estate Planning, Medicaid Planning

When applying for Medicaid, the government will review transfers the applicant made during a so-called “look-back” period, which includes the assets you’ve given away during the previous years. Giving away property to relatives and loved ones could compromise your eligibility for receiving benefits. However, by signing a Lady Bird deed, you are not required to disclose these transfers to Medicaid.

October 28, 2016
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What are the Advantages of a Lady Bird Deed?

By Asset Protection Planning, Estate Planning

By signing a remainder deed with a reserved life estate, a grantor is able to designate a beneficiary to inherit her property while the grantor maintains ownership during her lifetime. A traditional life estate deed prohibits the grantor from selling, mortgaging, gifting, or terminating property. However, in states like Florida, there is an alternative to a life estate deed known as an enhanced life estate deed, or a Lady Bird deed.

Unlike a traditional life estate deed, a Lady Bird deed allows the grantor to continue to control the property without the consent of the beneficiaries. The landowner is free to sell the property, profit from the property, and make gifts that won’t jeopardize the landowner’s eligibility for Medicaid.

October 25, 2016
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Is a Third-Party Supplemental Needs Trust right for you?

By Asset Protection Planning, Estate Planning, Government Benefits

While a first-party supplemental needs trust is designed to allow a disabled beneficiary place their own funds or assets in a trust, a third-party supplemental needs trust is meant for family members to assist a person with disabilities.

Just like a first-party supplemental needs trust, the assets in the third-party trust do not jeopardize the beneficiary’s eligibility for Supplemental Security Income (SSI). A third-party supplemental needs trust can hold any assets that the family wishes to provide (e.g. stocks, bonds, houses, etc.). Rather than giving the disabled individual the funds directly, the family can transfer them to the trust in order to provide a benefit to the beneficiary while not disqualifying the beneficiary from receiving government benefits.

While the beneficiary of the first-party supplemental needs trust must be below the age of 65, the age of the beneficiary does not matter for a third-party supplemental needs trust. Another key difference is that there is no payback requirement for a third-party supplemental needs trust. This means that when the beneficiary passes away, the remaining assets in the trust can be passed to relatives or charity instead of being used to reimburse the government.

If you have further questions on this topic or wish to set up a third-party supplemental needs trust, contact our office at (941) 906-1231 to schedule an appointment with one of our attorneys.

October 21, 2016
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Is a First-Party Supplemental Needs Trust right for you?

By Asset Protection Planning, Estate Planning, Government Benefits

A first-party supplemental needs trust is created to allow disabled persons to receive the benefit of their funds in a trust while still qualifying for and receiving government benefits. An alternative to this trust is a pooled trust. A pooled trust is created by a non-profit organization, and individual beneficiaries can create accounts within the trust.

By pooling the assets of disabled persons, the organization can manage one master trust and maximize the benefits for the beneficiaries. The non-profit can make more stable investments and provide more services than a normal supplemental needs trust.

Most people with special needs join a pooled trust when they do not have anyone to create a first-party supplemental needs trust for them. And just like a first-party supplemental needs trust, a pooled trust is used for people to qualify for and remain eligible to receive government benefits, such as Medicaid and SSI.

A couple advantages of a pooled trust are the low costs and the fact that the funds will be used to help others with disabilities.

If you have further questions on this topic, contact our office at (941) 906-1231 to schedule an appointment with one of our attorneys.

 

October 18, 2016
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Testamentary Trusts: The Basics

By Asset Protection Planning, Estate Planning

Unlike a living trust, a testamentary trust is provided for in a last will and testament, however its terms are established by an individual during their lifetime. The trust sets up the distribution of all or part of an estate and sometimes the proceeds from a life insurance policy held on the life of the person creating the trust.

While a testamentary trust can be provided for in a last will and testament, you can also direct that your living trust create one. Typically, a testamentary trust is created for children who are minors, loved ones with disabilities, or anyone who would receive a large sum of money outright.

Because testamentary trusts take legal effect after you die, they are considered irrevocable and cannot be changed. Testamentary trusts come into play at the end of the probate process after the person who created it has died.

The trustee who the settlor appoints will manage the funds in the trust until the beneficiary of the trust is in control.

If you are the trustee of a testamentary trust or you wish to create a testamentary trust as part of your last will and testament, contact Bach & Jacobs, P.A. to consult with one of our attorneys.

 

October 7, 2016
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