Our Blog
1) You can loose control of the home. If a child predeceases you, the home may go to their spouse and the home could be sold out without your permission.
2) Liabilities. If theres a divorce or lawsuit
3)Taxes.
What can you do? An Asset Protection Trust where your home is protected and you get all the favorable tax advantages and if something happens to the kids, nothing can happen to the house.
A few months ago, we had existing clients, Bill & Margaret come in for a review of their trust and other documents. Their concerns and questions were not so much related to their documents as they were centered around their middle aged daughter who had recently remarried. They explained they felt a certain amount of discomfort or even distrust of the new son in law, who by the way had no gainful employment. Their daughter was an only child and would be heir to about a half a million dollars at the death of her parents. Their question was simple “how can we protect our daughters inheritance?”
Answer = Legacy Trust
Keeping Your Assets in the Family
As is the case in most wills, the majority of people who set up revocable and irrevocable trusts leave their assets outright to their beneficiaries, such as children, when they die. So, what’s wrong with that? Well, there may be a better way.
Instead of leaving your assets directly to your beneficiaries, why not leave them to your beneficiaries’ Legacy Preservation Trusts, which gives the “benefits of the assets” to your children while protecting the assets from outsiders, such as creditors, spouses, and in some cases estate taxes.
You can create a Legacy Preservation Trust naming your child both as trustee and beneficiary
when you die. A Legacy Preservation Trust has a set of rules for managing assets for the benefit of your children as beneficiaries. The rules may be broad or narrow.
Reasons to Create a Legacy Preservation Trust
There are a number of good reasons to create trusts for your children today. Just as you’ve
learned about the benefits of a trust, undoubtedly your children will wish to avail themselves of the same opportunity one day. But in the case of your children, there are a number of additional benefits to leaving assets to them in their own Legacy Preservation Trust.
These are:
Legacy Preservation Trusts can provide that, during your children’s lifetimes, your children have access to the income and the principal in their trusts for their health, education, maintenance and support – so that you’re not giving them a “gift with strings attached: or “ruling from the grave.” But, when your child dies, you can arrange of the unused portion of their inheritance to go to other beneficiaries, such as your grandchildren. You may also choose to have younger beneficiaries be restricted to receiving benefits for health and education only.
For more information, please call our office today 800-798-5297
This week I have already met with more than a handful of clients and while the complexities of their cases are different, they have consistently asked the same question: ”how will the new health care bill affect our situation”. To most Americans, since nothing has been finalized, the answers are still unknown, but the Department of Veterans Affairs has weighed in on the matter, explaining that regardless of the pending health care reform, TRICARE will remain unchanged. Please visit the following website and check out the attached article to see the comments of Defense Secretary Robert Gates.
http://www.military.com/news/article/officials-reassure-troops-on-tricare.html?col=1186032310810
By Attorney Thom Cooper
We frequently meet in our office with clients who have adult children with disabilities or other special needs. Beyond planning their own affairs, they have the added worry of what will happen to their special needs child when they are gone. For many, a special needs trust can provide answers and peace of mind. Donald D. Vanarelli, a New Jersey Elder Law attorney, recently published an excellent list of considerations to help in the planning process.
The following list contains some of the most frequently encountered issues faced by parents of a child with special needs who wish to arrange a secure future for their disabled child through estate planning.
If you have a special needs child and wish to discuss your options, please call our office to schedule a free consultation.
One of the hallmarks of our practice at the Cooper Law Firm has been our willingness to work with the senior and their family in estate planning and medical crisis situations. In working with our elderly clients it often desirable and sometimes necessary to involve the children. While many of our clients are from “the old school” and want to keep their business private, I encourage them to consider the fact that it is likely that their children will “inherit their problems” well before the children “inherit their money.” I know this certainly happened for me with my grandmother and mother. I explain to our clients that at minimum they should let their children know that a plan is in place, who is in charge, and that our office would be available to help with questions. I have found that this gives the children great peace of mind. I also encourage parents to discuss their plan in more detail with their children “when it makes sense.” My clients sometimes ask: “How will I know when it makes sense?” and I respond: “You will know.” We also encourage the parents to bring their children to the office so that we can help the parents to explain their plan and answer technical questions.
I recently ran across a New York Times news article that discusses the topic in more detail and I would encourage both parents and children to read it.
The legal profession is filled with people from all walks of life. Meet one of the newest additions to the field of Elder Law, as reported by Elderlawanswers.com.
At an age when work is a distant memory for most people, Alice Thomas is embarking on a career in elder law. In December 2009, Thomas graduated from Pacific McGeorge School of Law at age 79. She was older than all but one of her professors, not to mention her classmates, and is one of the oldest people ever to earn a law degree from an American Bar Association-accredited school.
Although she has yet to pick up her diploma or pass the bar exam, Thomas has already lined up a job working on elder law issues at a Reno, Nevada, law firm. In an interview with the Sacramento Bee, she said she hopes that her time in the field will allow her to “nibble at” some injustices.
“[A] lot of older people just sit and watch the grass grow, and they end up disintegrating,” Thomas said. “When you quit learning something, you might as well crawl into a coffin and pull the dirt in after you.”
Thomas’s feat is all the more remarkable because during much of her first two years at the Sacramento-based law school, she was caring for her long-time companion who had Alzheimer’s disease. Before his death, her grades fell and she was placed on academic probation. But she petitioned for reinstatement and completed the normal three-year program in four years.
When Pacific McGeorge opened an Elder Law Clinic in 2008, Thomas was the first student enrollee, and the school says her volunteer work helped numerous senior citizens handle a variety of legal issues.
“Initially,” reports the Bee, “she was reluctant to be pigeonholed as someone who wanted to work only on behalf of seniors, but she says she grew to love the work and embraced the wide range of challenges.”
Thomas, who formerly had a long career doing office work in the construction industry, now begins the grueling process of studying for either the Nevada or California bar exam. She probably won’t find out whether she passed until well past her 80th birthday in July. In addition, she has to begin paying back $70,000 in student loans.
Thomas seems to have taken studying alongside classmates one-third her age in stride.
“Most of the time, the other students acted like I wasn’t even alive,” she told the Bee. “Some of them asked if I was really serious. I told them I could take a first-class trip around the world and not spend as much money and not have to work as hard.”
“She has been a delight since the day she got here,” said Tim Naccarato, McGeorge’s principal assistant dean.
Thom L. Cooper Co., LPA welcomes you, Alice Thomas, to the joys and wonders of practicing Elder Law. We wish you all the best and congratulate you on this amazing feat.
Listen in as attorney Thom Cooper talks about the pros and cons between Wills and Trusts.
Over the past several months our office has been receiving an increasing number of clients calling with question about various financial and insurance products. Most of these questions have been related to how certain products work and especially as to how these products may or may not fit into the clients overall plan to avoid taxes, reduce probate cost and protect their assets from being lost to the cost of aging, including the cost of a nursing home stay, assisted living or home health care.
Listed below are a couple examples of questions received and answers that hopefully will help clear up certain misunderstandings. ……
Question: Is an annuity product protected from being lost to the cost of a nursing home stay if the annuity has waiver of surrender charges?
Answer: No. The waiver of surrender charges in the event of a nursing home stay is just that, a waiver of the surrender charges should you need to cash in your annuity to help pay for the cost of your nursing home stay.
Please note: The only annuities that are protected against being lost to a “nursing home spend down” are those being used in conjunction with other legal documents, such as a trust. If anyone tells you that they have a stand alone financial product, such as an annuity, that will gives you nursing home protection it is not true. If you have any specific questions in this regard, please call Sandy Workman at our office for a more detailed explanation.
Question: I was recently approached about a single premium whole life insurance policy and was told the death benefits would not be taxable when I die. Is his correct?
Answer: Most life insurance death proceeds are not subject to income tax or Ohio death tax if paid to a named beneficiary. However, if you are the owner of the life insurance policy, the death proceeds are included in your gross estate for federal estate taxes. These death proceeds may or may not be taxable depending on the size of your estate or when you die. With larger estates, these taxes can usually be avoided by using a certain type of trusts.
Our plan is to continue to provide answers to frequently asked questions as part of the blog postings. Should you have any questions at all, please contact us at 1-800-798-5297.
Below is link to an article by Carol Costello of CNN about AARP’s endorsement of the recent House health bill. As she points out AARP is currently a large health insurer and has it’s own agenda in mind… not necessarily the interests of its senior members. She points out that AARP generated over 3 times the revenue from insurance sales as what it took in from membership dues. Clearly there is a potential conflict here. If this bothers you as much as it bothers me, please write AARP or don’t renew your membership next time. Perhaps they will get the message.
by Kathy Cooper
One of Thom’s colleagues in the American Association of Trust, Estate and Elder Law Attorneys, Greg Schlender, recently wrote a blog about including your memoirs in your estate plan. It is excellent, don’t miss it (Make Your Memoirs a Part of Your Legacy). His thought is that we wait until it’s too late to talk with our loved ones about their lives, how they met their spouses, what it was like when they were young and other interesting details that become more and more important as we get older ourselves. The problem is that I don’t think most of our parents are willing to use a pre-packaged software program or fill-in-the-blanks book to get the information down for us! This, of course, assumes that we haven’t waited so long that they can’t remember anyway.
Thom and I had the same experience when his mother, Arlene, passed away a couple of years ago. We cleaned out her apartment and found picture albums and other memorabilia that was clearly saying something although we weren’t sure who many of the people were or even when they were happening. We kept those albums and I have some ideas for creating a memoir for our children that includes them.
I started to think about how we can use some of the capabilities we have today to create memoirs that can become part of our legacy and part of our children’s estate package. See what you think, and please feel free to add your own ideas.
Call us if you would like to add a video memoir to your Estate Plan.
