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Trusts

How Can I Spend Funds in A Qualified Income Trust?

By Asset Protection Planning, Medicaid Planning

There are very specific rules regarding how the funds in a Qualified Income Trust (QIT) may be spent. It is very important that the Trustee ensures that only allowable expenses are paid out of the QIT account because if funds in the QIT are spent improperly, it could jeopardize the recipient’s Medicaid eligibility.

Only the following expenses can be paid out of a QIT account:

  1. The Patient Responsibility due to the nursing home (as determined by the Department of Children and Families)
  2. Health insurance premiums
  3. The Community Spouse Allowance (as determined by the Department of Children and Families)
  4. Medical expenses not covered by insurance (i.e. medical durable supplies, additional home health care agency hours, therapies not covered by Medicaid)
  5. Uncovered portions of an assisted living bills

If you have specific questions regarding managing a Qualified Income Trust account or your duties as the Trustee of a Qualified Income Trust, the experienced elder law attorneys of Bach, Jacobs & Byrne, P.A. are here to assist you. Call us at (941)906-1231 to set up a consultation.

June 2, 2020
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How much of my income should be deposited into the Qualified Income Trust?

By Asset Protection Planning, Medicaid Planning

The Trustee must deposit the amount of the Medicaid recipient’s income that exceeds the income cap into Qualified Income Trust (QIT) each and every month.  In 2020, the gross monthly income cap is $2,349.00. So, for example, if the Medicaid recipient’s gross monthly income was $4,000.00, the Trustee would need to deposit a minimum of $1,651.00 into the QIT each month.  If the Medicaid recipient’s gross monthly income was $4,500.00, the Trustee would need to deposit a minimum of $2,151.00 into the QIT each month.  In order to account for any discrepancies or fluctuations that may arise in monthly income, we always advise our clients to deposit more than the minimum amount each month.

Properly managing and funding a QIT is very important for maintaining Medicaid Eligibility.  If you have specific questions regarding funding a Qualified Income Trust account or your duties as the Trustee of a Qualified Income Trust, the experienced elder law attorneys of Bach, Jacobs & Byrne, P.A. are here to assist you. Call us at (941)906-1231 to set up a consultation.

May 29, 2020
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What is a Spendthrift Trust and Should I Consider Implementing One for My Troubled Child?

By Asset Protection Planning, Estate Planning

A spendthrift trust is a trust created for an individual that gives an independent trustee full authority regarding how the trust funds may be spent to meet the needs of the beneficiary (the individual receiving assets from the trust). In this situation, the beneficiary of the trust is not allowed to spend the money until they receive distributions and the trustee has determined what payments are necessary according to the trust agreement. A spendthrift trust can be a powerful estate planning tool if you have a troubled child who you still want to provide for after you pass away, but who you do not believe has the capability to make sound financial decisions. A spendthrift trust is generally used in situations where a child is troubled, has an addiction problem, is irresponsible with spending, or has credit problems. A spendthrift trust is a way to control an individual’s spending of the money you have left them and alleviates the stress or worry you may feel about a having the assets you worked so hard to obtain being wasted. It also allows you to avoid going through the uncomfortable process of having to disinherit a child whom you don’t trust with money because you know, if given free reign, they will waste it or spend it on unsavory items.

 

March 6, 2018
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Lifetime and Estate Planning – A Seminar by Experts

By Estate Planning, Firm News

Babette Bach and Fred Jacobs will be speaking at a Heritage Oaks event, “Lifetime and Estate Planning – A Seminar by Experts”, being held at their clubhouse on January 15th, 2018 at 2:00pm. The attorneys will cover a variety of topics and give some insights into preservation of assets and estate planning for Florida residents. The event is presented by the Heritage Oaks Lifelong Enrichment Committee. Please contact the club for more information: 941-926-7602.

December 7, 2017
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Who Should be My Successor Trustee?

By Estate Planning

If you have created a living trust, you may have appointed yourself as trustee so that you can be in charge of the assets titled to the trust while you are alive. However, you must also decide who to name as your successor trustee. A successor trustee is the individual who will take over the trustee position when you pass away, and who will be in charge of your trust’s assets. It is very important to carefully consider who you want as your successor trustee. Most people choose a family member or close-friend because they are confident that this person will carry out their duties honestly, impartially and in a manner that is consistent with the terms of the trust. However, make sure that whoever you choose is up to the task given the responsibility involved. Pick an individual who will be relentlessly scrupulous and who has you as well as your family’s best interest at heart. Your successor trustee will also be in charge of managing and distributing your assets should you become incapacitated.

If you are uncomfortable choosing a friend or family member to be your successor trustee, consider designating the task to a knowledgeable, respected corporate trustee or a legal professional that you trust fully.  For inquiries regarding this matter, please contact our office at: 941-906-1231.

November 21, 2017
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What is a Special Needs Trust?

By Estate Planning

Do you have a loved one who is disabled or has special needs? If so, then a special needs trust (also known as a supplemental needs trust) may be the right option for you and your family. A special needs trust provides your disabled loved one with financial support and is designed to supplement the benefits that a disabled person may receive from government programs. A special needs trust is used so that an individual can still qualify for and receive medical benefits and supplemental security income, without the assets in the trust being calculated as a part of their income when it comes to determining eligibility for benefits from government programs.

If you have further inquiries regarding this matter, please contact our office at: 941-906-1231 to schedule an appointment with one of our attorneys.

October 27, 2017
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What You Need to Know About a Living Trust

By Asset Protection Planning, Estate Planning

A living trust is a legal entity that you create with rules and conditions that apply to any assets owned by the trust. This type of trust is in operation during the lifetime of the person who establishes it and can resemble a Will in that it expresses your wishes in regards to matters such as your assets, your dependents and your heirs after death. A living trust is different than a Will because a Will only becomes effective after you die and it has been entered into probate. Living trusts are popular because they allow individuals to bypass probate, which can be a costly and time-consuming process. With a living trust, you appoint a successor trustee to transfer assets to the beneficiaries. In some circumstances, this process can take only a few weeks, while probate has the potential to last for months. Additionally, individuals concerned with privacy generally prefer a living trust, as probate records are filed in the court records and available for public inspection.

 

If you have further inquiries regarding living trusts or other forms of Estate Planning documents, contact our office at: 941-906-1231 to schedule an appointment with an attorney.

October 20, 2017
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Estate Planning for a Vacation Home

By Estate Planning

When you are going about Estate Planning, deciding what to do with a vacation home can seem daunting. If you decide to leave it to one (or more) of your family members, it is important that you discuss this with them. There are several choices you can consider when deciding what to do with your vacation home. If you choose an outright transfer, your home will be given to one (or several) of your loved ones as a gift, but there may be adverse tax consequences of doing so.  Another option would be to place your home in an LLC made up of your family members. If you choose this method, you could have a family member manage the property and allow one or more of your family members to utilize it. You could also transfer your vacation home to a QPRT (Qualified Personal Residence Trust), in which you transfer your home to a family member in exchange for continual rent-free use for a specified term. This is a popular choice because it can reduce the amount of a gift or estate tax.  Another option is gifting your home to an irrevocable trust, which would have rules regarding the use and expenses of the home among the beneficiaries.

Estate Planning comes with a large variety of options and complications. Please contact our office at: 941-906-1231 if you need assistance with your Estate Planning or have questions.

October 17, 2017
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Special Needs Trust Fairness Act

By Asset Protection Planning, Government Benefits

Yesterday a historic bill was signed into law by President Obama.  It allocates over $1 billion to fund Alzheimer’s research to find a cause and a cure, and methods of prevention.  Since so many of our elderly we serve and their families are devastated by this terrible disease, we have been given hope that the necessary amount of attention has been given by this bipartisan legislation to address this issue which left unchecked, could overwhelm our institutional care programs and service delivery infrastructure.

In addition it immediately gives a disabled individual, who is legally competent, the right to establish their own self- funded d4A Special Needs Trust.  This is a trust which exempts assets from being considered by Medicaid.  However all self- settled special needs trust are subject to a Medicaid payback on the death of the beneficiary.  This will end the foolish waste of time getting an elderly parent or a court to establish an individual SNT for a person who could do so himself or herself, but for the mistake made in the original OBRA ’93 act that left out the word “individual.”

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

December 14, 2016
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How can I ensure my pet is taken care of after my death?

By Elder Law, Estate Planning, Probate

Florida statutes allow for the creation of pet trusts which can be used to designate who will take care of your pet and leave funds necessary to do so.  The trust would appoint a care-taker and a trustee who would observe the care-taker to make sure they are following your instructions and caring for your pet as you specify.  A trust protector can also be appointed to ensure the funds in the pet trust are being spent appropriately by the care-taker.  The care-taker can be given specific instructions through the trust on how they should care for the pet on a day to day basis and how they should respond to unexpected illness of the pet.

Under Internal Revenue Code, the income of a pet trust is taxable.  The trust would be active during the entire lifespan of your pet and after the death of your pet any remaining funds would be distributed to other beneficiaries as you specify.  If you have further questions or would like to set up a pet trust, contact us at (941) 906-1231 to discuss the use of a pet trust as part of your estate planning.

February 12, 2016
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