To Your Better Future

If you are a parent or guardian of a person with disabilities, you must have wondered why not leave wealth or resources for your child or relative with special needs outright? If a person with a disability who is receiving or who anticipates receiving government benefits (Supplemental Security Income, Medicaid, Food Stamps, etc.) inherits a significant amount of wealth outright, it can negatively impact their eligibility for government benefits. They will first have to exhaust such an amount or legacy in order to receive any government benefits. Example- John, a person with down syndrome works at a grocery store and makes about $500/month. John receives SSI and Medicaid benefits. John’s grandmother Martha died and left him a savings account with $200,000. John is automatically disqualified for SSI and Medicaid. In order to qualify for SSI and Medicaid, John will first have to spend-down to the extend that he keeps no more than $2,000. How can a Special Needs Trust (SNT) help? A special...

 Hey there, welcome to my explanation about Federal Estate and Gift Taxes in the United States. I'll break it down in a way that's easy to understand. Federal Estate Tax Overview: The federal estate tax in the United States is a tax imposed on the transfer of a person's estate upon their "death". This tax is imposed on the total value of an individual's assets and property at the time of their death. It's important to note that not everyone is subject to the federal estate tax; Effective January 1, 2023, the federal gift/estate tax exemption and GST tax exemption is $12,920,000. This means if your gross estate is less than $12.92 million, you don't have to worry about Federal Estate Taxes in the United States. You may still have to worry and plan about the State Estate Taxes, but let's just focus on federal estate taxes today. The lifetime "gift tax" exemption and the federal estate tax exemption are interconnected . People will be easily...

Special needs planning involves developing a detailed financial and legal strategy to provide continuous support for individuals with disabilities, especially those who will require assistance throughout their lives. The main aim is to ensure that these individuals have a good quality of life while still being eligible for government benefits and help. These benefits often cover crucial services like healthcare, housing, and financial support. The goal of special needs planning is to manage finances in a way that doesn't put these benefits at risk. This type of planning includes several important parts: 1. Financial Planning: This step includes creating structures like trusts and investment accounts to offer ongoing financial help for individuals with disabilities. These setups are designed to supplement government benefits without causing the person to lose those benefits.  2. Estate Planning: This part involves carefully planning what happens to a person's assets when they pa...

Demystifying Estate Planning: More than Money and Mansions When you hear the word "estate," do images of grand mansions, piles of money, and luxurious belongings immediately pop into your mind? You're not alone. Many people associate estates with wealth beyond measure. However, the reality is far simpler and yet far-reaching than these flashy notions. Now hear this: the moment a person passes away, everything they own becomes their estate. Whether it's a lavish fortune or just a modest sum of $1000 in their bank account, it's all part of their estate. This realization takes estate planning out of the realm of extravagance and places it firmly in the context of everyday life. So, what exactly is estate planning?  At its core, it's a forward-thinking strategy that revolves around what happens to your belongings and assets once you're no longer around or are incapacitated. It's like painting a picture of your future, even if you won't be there to witn...

  WHAT ARE YOUR GOALS BEHIND CREATING AN ESTATE PLAN? When it comes to creating an estate plan, there is no "one size fits all" approach. Just as each individual is unique, so should their estate plan. An estate plan is not merely a legal document; it's a reflection of your values, priorities, and wishes for the future. As an estate planning attorney, I often tell my clients that we should design a plan for the next 2-5 years and hope that the same plan would work for subsequent years if they didn't make any changes. However, it's essential to recognize that life is dynamic, and circumstances can change. Therefore, ideally, everyone should revisit their estate plan every 2-3 years to ensure its continued relevance. The very first step in creating a comprehensive estate plan is to identify your goals and wishes clearly. Start by asking yourself: What do you want to achieve with your estate plan? The answers to this question can vary significantly from person to per...

I already have a Revocable Living Trust in place. Why do I need a Power of Attorney?  When it comes to estate planning, there is no 'one size fits all' approach. Hence, an estate planner must think ahead and plan for unanticipated circumstances. A power of attorney is a very powerful tool and an integral part of a comprehensive estate plan. A power of attorney is a legal document that grants authority to one person (the agent) to act on behalf of another person (the principal). The principal voluntarily delegates certain powers and responsibilities to the agent, allowing them to make decisions and take action on matters specified in the document. The agent can act on behalf of the principal in financial, legal, healthcare, and other important affairs, depending on the scope of authority granted in the power of attorney. If a power of attorney is durable, it remains in effect if the principal becomes incapacitated, such as due to illness or an accident. However, a power of attor...

  Will v. Trust: When it comes to securing your legacy and ensuring your assets are distributed according to your wishes, will-based estate planning stands as a time-tested and reliable option. A last will is a legal document that allows you to outline how you want your property and possessions distributed after your passing. The key phrase here is "after your passing". By clearly stating your intentions in your will, you provide your loved ones with the guidance they need during a difficult time. However, once the testator (the person who wrote the will) dies, their wishes cannot be enforced automatically by their personal representative who was appointed in the will. The will must be probated in order to enforce the wishes of the testator. Probate is the legal process through which a deceased person's assets and estate are administered and distributed according to their will, potentially causing delays and expenses. The probate process, although not the worst thing in t...