Maureen L. Anderson Elder Law, LLC Maureen L. Anderson Elder Law2024-03-21T08:25:22Zhttps://www.mlaelderlaw.com/feed/atom/WordPress/wp-content/uploads/sites/1502758/2022/03/cropped-512x512-1-32x32.pngOn Behalf of Maureen L. Anderson Elder Lawhttps://www.mlaelderlaw.com/?p=484432024-02-22T19:19:56Z2024-02-22T19:19:56Z#1: The revocable living trust
A revocable living trust is a popular choice for many as it provides flexibility and control. The person who creates the trust, known as the settlor or grantor, can alter or revoke the trust during their lifetime.
This type of trust allows the settlor to make changes or dissolve the trust as needed. It can also help to avoid probate as the assets in the trust generally bypass the probate process. This can help facilitate a smoother transfer to beneficiaries.
Those putting together an estate plan often prefer the revocable living trust for its adaptability and the ease it brings to the estate settlement process.
#2: The irrevocable trust
Unlike a revocable trust, an irrevocable trust is fixed; once it is established, the creator cannot easily change or terminate it. Benefits that come with this rigidity can include:
Potential tax advantages: A settlor who transfers assets into the trust may reduce their estate tax burden.
Asset protection: This type of trust generally shields assets from creditors and legal judgments against the grantor.
Despite its inflexibility, an irrevocable trust offers significant protection and tax benefits, which can be advantageous for estate planning purposes.
#3: The testamentary trust
A settlor can create a testamentary trust, also known as a will trust, as part of a will. This type of trust comes into effect after the grantor's death. It allows the grantor to dictate terms for asset distribution after death and can safeguard assets for minors or beneficiaries who may not be financially responsible.
The testamentary trust serves as a tool for those who wish to maintain control over their estate's distribution after they have passed away.
Choosing the right trust depends on individual circumstances, goals, and the amount of control you wish to retain over the assets. An estate planning attorney can review your goals and help determine which trust aligns best with your estate planning objectives.]]>On Behalf of Maureen L. Anderson Elder Lawhttps://www.mlaelderlaw.com/?p=484422024-03-19T07:26:28Z2023-12-02T20:48:37ZWhat is Medicaid spend down?
Medicaid spend down is a process allowed under Pennsylvania elder law through which individuals can spend down the income that exceeds the income eligibility limits for Medicaid. Individuals can submit paid or unpaid medical bills that equal or exceed the spend-down amount to qualify for Medicaid by bringing their countable income under the income eligibility limits. Medicaid has a five-year lookback period to look at transactions individuals have completed within the previous five years. The state can unwind transfers of assets to family and friends people have made to qualify for Medicaid in the future. However, transfers within the lookback period to qualify for Medicaid might still be allowed in certain cases, including unlimited transfers to a spouse, transfers to disabled or blind adult children, or transfers to children under the age of 21.
What are countable assets and income?
Countable assets and income are categories of assets and income that are counted toward the state's income and asset limits for Medicaid purposes. Noncountable income and assets are those that won't be counted. Nearly all types of income are counted for Medicaid purposes. There is a homestead exemption through which the individual's home will not be counted toward the asset limit, however. The income limit for Medicaid eligibility for a single person in 2023 is $2,742. For a married couple when both spouses are applying, the limit is doubled to $5,484 per month. The asset limit is $2,000 per individual or $4,000 per married couple when both spouses are applying.
Medicaid spend down rules are complex and difficult to understand for many people. However, it is possible for individuals whose income or assets exceed the eligibility limits to qualify through utilizing this practice.]]>On Behalf of Maureen L. Anderson Elder Lawhttps://www.mlaelderlaw.com/?p=484402023-08-25T22:56:52Z2023-08-25T22:56:52ZWhat is a spendthrift trust?
In a spendthrift trust, the beneficiary doesn't have direct access to the assets. One or more trustees have broad power to provide the designated heirs with funds to maintain their lifestyle. This estate planning tool is ideal for someone who wants to leave money to a very young individual or one who has shown fiscal irresponsibility in the past. By establishing this type of trust, you'll provide for a loved one without worrying that they will waste your money.
Creating a spendthrift trust
Setting up a spendthrift trust is much like any other type of trust. You will need a trustee to ensure assets are distributed according to your wishes and one or more beneficiaries who will receive your assets. A prime benefit of a spendthrift trust is that its assets will be protected against creditors if your beneficiaries overspend. Many grantors stipulate a specific amount given annually to the beneficiary or restrict how they may spend the funds.
Giving yourself peace of mind
One of the goals of estate planning is to give yourself peace of mind, knowing that you have taken care of your loved ones. Other types of trusts can also be part of your estate, allowing you to leave money to charitable organizations, providing for a spouse after your passing, and so on. Estate plans are fluid, so if you accumulate additional assets, you can add to your estate plan with different trust types.
Other estate considerations involve creating a will, a financial power of attorney and a healthcare power of attorney if you cannot make your own decisions. In addition, you should also consider a living will that stipulates how you want to proceed with certain healthcare decisions if you can't speak for yourself.]]>On Behalf of Maureen L. Anderson Elder Lawhttps://www.mlaelderlaw.com/?p=484392024-03-19T06:05:19Z2023-05-30T03:01:57Zspecial needs trust.
What is a special needs trust?
Also known as a supplemental needs trust (SNT), special needs trusts are protective instruments that are part of estate planning for the elderly or disabled adults. These could be individuals with access issues or those with special medical requirements.
A special needs trust can be created as a first-party, third-party, or pooled trust. The first two are established to benefit individuals, while a non-profit or other organization usually sets up the third to benefit a specific community.
Such a trust aims to set aside money to cover financial needs like rent or gap insurance without disqualifying the individual for government-funded programs like Medicaid, Medicare, or Social Security. These benefits are known as needs-based government assistance, and they have strict income limitations to qualify.
The benefits of a special needs trust
Because many elderly residents of Pennsylvania live on a fixed income, anything that impacts their ability to obtain additional assistance will also impact their quality of life. Under Pennsylvania estate law, trusts are designated as revocable or irrevocable, and there are tax implications involved in how they're established.
In general, irrevocable trusts are designated as separate taxpayers, and the settlor needn't declare the proceeds as income. Special needs trusts fall under this designation.
How to set up a trust in Pennsylvania
The settlor or their caregiver can use special needs trusts for any purpose. Deciding which type of trust to establish depends on the situation.
Establishing a trust is a three-step process:
Designate a beneficiary, either the grantor who will benefit or a third-party
Name a trustee to administer the trust
Draft and sign the establishment papers and file them
Once all of that is completed, the trust can be funded with money, property, and other assets.
A third-party trust is set up by someone other than the beneficiary, either as a standalone to grant access to funds during the beneficiary's lifetime or as a testamentary trust as part of a last will and testament.
The first-party trust is established by the beneficiary when they are of sound mind, and they're used to cover expenses. Upon the beneficiary's death, any remaining funds would be used to reimburse for government-funded medical insurance. Any remaining funds would be dispensed to the legal heirs.]]>On Behalf of Maureen L. Anderson Elder Lawhttps://www.mlaelderlaw.com/?p=484342023-02-14T01:11:29Z2023-02-14T01:11:29Zprotecting their assets from the high cost of nursing home care.
Medicaid planning
One option for protecting assets from nursing home costs is through Medicaid planning. Medicaid is a joint federal and state program that provides health care coverage for those with limited income and resources. To be eligible for Medicaid, an individual must have less than $2,000 in countable assets. By properly planning ahead and transferring assets, individuals can become eligible for Medicaid and receive the care they need while still protecting their assets.
Long-term care insurance
Another option for protecting assets from nursing home costs is through long-term care insurance. This type of insurance provides coverage for long-term care, including nursing home care, home care, and assisted living. By purchasing long-term care insurance, individuals can ensure that they have a source of funding to cover the cost of care and protect their assets from being depleted by nursing home costs.
Transferring assets
In some cases, individuals may be able to protect their assets from nursing home costs by transferring assets to their spouse, children, or other family members. This can be a complex process and may have significant tax implications, so it is essential to seek the guidance of an experienced elder law attorney.
Home Equity Conversion Mortgages
For individuals who own a home, a Home Equity Conversion Mortgage (also known as a reverse mortgage) may be a way to access the equity in their home to pay for long-term care expenses. A reverse mortgage allows individuals to receive payments from the equity in their home, which they can use to pay for nursing home care.
Protecting assets from nursing home costs is a concern for many individuals who need long-term care. It is important to seek the guidance of an experienced professional to determine the best option for each situation.]]>On Behalf of Maureen L. Anderson Elder Lawhttps://www.mlaelderlaw.com/?p=484332023-01-12T21:26:47Z2023-01-12T21:26:47ZReview your will and employer plan accounts
You will is one of the most rudimentary things on your retirement estate planning list. It can be basic, but make sure you have one and that it's valid.
You might also have retirement plan accounts like a 401(k) or IRA. Upon opening your account, you likely picked someone as your beneficiary. Depending on how long ago that was, you might not remember who you listed as your beneficiary. When you're getting ready to retire, it's a good time to verify that the person you've selected is who you really who you want to inherit the assets.
Ensure that your financial information listing is organized and comprehensive. Once you pass away, your loved ones will have enough to deal with. You can make things simpler by organizing your finances into a packet or file that they know how to access.
Minimizing the tax burden of you and your beneficiaries
There are a few ways you can lower the taxes on your estate. A trust and Roth assets can both help with this.
This estate planning option tends to be more on the intricate side, which is because of the level of control it affords. You can designate a corporate trustee to handle the administrative aspects of your estate, and you also get a greater amount of privacy.
Another option is to convert your assets from a traditional retirement plan into a Roth IRA. One significant advantage of Roth assets is that it offers a way of avoiding required minimum distributions. Since this type of IRA isn't subject to RMDs, it means that the assets will continue to grow up until the point at which they are transferred to your chosen beneficiaries.
Your heirs will still be subject to required minimum distribution. However, provided that the account had been open for a minimum of five years, those RMDs will come with the benefit of being free from taxation.]]>On Behalf of Maureen L. Anderson Elder Lawhttps://www.mlaelderlaw.com/?p=484172022-12-19T05:11:43Z2022-08-29T21:35:59ZUnderstanding a legal guardian in Pennsylvania
Under Article I, Section 28 of the Pennsylvania Constitution, all individuals have a natural right to “enjoy and defend life and liberty.” In some cases, an individual may be unable to do so for themselves due to incapacity. Incapacity can result from developmental disabilities, mental illness, physical illness, substance abuse issues or old age. When this occurs, the law provides for the appointment of a legal guardian.
A legal guardian is an individual appointed by a court to make decisions on behalf of another person who cannot do so for themselves. The powers and duties of a legal guardian are set forth in 20 Pa.C.S.A. 5301 et seq., also known as the Pennsylvania Guardianship Law.
Under the law, a legal guardian has the power to make decisions about the following areas of an incapacitated person’s life:
A legal guardian does not have the power to make decisions about an individual’s right to vote, marry, or divorce. These rights can only be taken away by a court order.
The process of becoming a legal guardian in Pennsylvania
The first step to becoming a legal guardian is to file a petition with the court. The petition must be filed in the county where the proposed ward resides.
A hearing will then be scheduled, where the petitioner must prove by clear and convincing evidence that the proposed ward is incapacitated and that guardianship is necessary. If the court is convinced, it will issue an order appointing a legal guardian.
It is important to note that a legal guardian is not the same as a conservator. A conservator is someone appointed by a court to manage the financial affairs of an incapacitated person. In Pennsylvania, a conservator can be appointed for an individual unable to manage their own finances or property due to incapacity.]]>On Behalf of Maureen L. Anderson Elder Lawhttps://www.mlaelderlaw.com/?p=484012022-12-19T05:11:36Z2022-05-31T21:30:48ZDoes your child need guardianship?
One of the primary tasks you should undertake as a parent of a special needs child is to determine if they will need lifelong care or assistance. When your child reaches their 18th birthday, they are legally an adult. However, that may not mean that they can make important life decisions.
When deciding if guardianship is appropriate, you should think of important life decisions your child will need to make. For instance, making health decisions, controlling their finances, and making decisions regarding their health and safety are imperative. If your child has difficulty making choices for themselves in these areas, becoming their guardian may be the best option for their well-being and your family.
Guardianship types
There are several different types of guardianship that you can pursue. Of those types, the two that are most common for special needs planning for adult children are a guardian of person and a successor guardian.
A guardian of person is a type of guardianship in which the guardian has the responsibility of ensuring the overall protection and safety of the person in which they hold guardianship. The guardian can make final decisions regarding housing, medical treatment, education, and financial considerations.
Successor guardians provide care for your adult child if you can no longer fulfill the duties. You can name them in your will and in your legal documents to ensure that your child will always have the support and guidance they need.
Guardianship process
To seek guardianship, you will need to ask the court system for its permission. Once granted, you will be able to provide the necessary oversight and care to protect your child. You may want to prepare any documentation you may need in advance. As often, the courts will ask for records to verify the need for your child to have a guardian in adulthood.
Becoming a guardian to protect your adult special needs child is a good option to protect their long-term interests. Pursuing guardianship can give you peace of mind and comfort, knowing that you are doing all you can for the benefit of your child.]]>On Behalf of Maureen L. Anderson Elder Lawhttps://www.mlaelderlaw.com/?p=483032022-12-19T05:11:40Z2022-03-22T04:27:09ZLong-term care planning in Pennsylvania
There are two things you will need to consider when planning for your long-term care. First, you will need to decide what type of care you need, and secondly, you must make a budget.
There are three types of long-term care you can choose from. They include:
In-home care
Assisted living
Nursing home
Regardless of what you choose, you will need to ensure that you can afford it. You can plan for private health insurance and Medicaid. However, Medicaid is government-sponsored, meaning you can only get it if you're eligible.
Why you may want legal assistance
You may need the services of an elder law attorney when making your long-term care plans. This is because:
They can help you navigate your financial options: Long-term care is quite expensive; sometimes, you may need a little help to afford it. An attorney may help you restructure your finances to fall within limits for Medicaid eligibility. You can also use an irrevocable trust to plan for your long-term care.
An attorney can help protect your rights: Elder abuse is a huge problem throughout the country. A caregiver can neglect you, maltreat you or exploit you financially. If this happens, you need to know what to do, and a lawyer can help with that.
A legal professional can help you create a power of attorney: When in your most vulnerable state, you need someone you trust to make financial decisions or manage your estate. An attorney can help you find this person through thorough vetting and putting your wishes in writing.
A lawyer can help you apply for veteran benefits: If you were in the army, you could be entitled to benefits that offset your long-term care costs. As with Medicaid, you will also need to qualify for this benefit. You may need help navigating the application process.
You can make your life in retirement easy and comfortable, but you need to start now if you haven't already. There are many issues to consider in the long-term care planning process, so it's beneficial to start early.]]>