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Special Needs Trusts

Tuesday, June 05, 2012

Jeremy Wechsler Releases New Book on Estate Planning

Looking for a great resource on estate and retirement planning? Jeremy Wechsler, your Estate & Elder Law Attorney, recently co-authored a new book with Peter R. Wechsler, his father and Your Retirement Quarterback. The book is an easy read but full of valuable information on estate and retirement planning.

Learn more about the book here: https://solvingtheretirementpuzzle.com


Monday, July 25, 2011

Special Needs Planning

 

One question we will always ask prospective clients: Do you have special needs beneficiaries, either for financial, medical or educational issues?

Not surprisingly, most families say yes.

When engaging in estate planning, you must protect these beneficiaries, especially if they are currently on or could go on public benefits such as SSI or Medicaid.

An individual is not eligible for Medicaid until his or her total assets are approximately less than $2,000. Yes, TWO THOUSAND DOLLARS. Almost nothing!

So what if, in your estate plan, you leave a beneficiary on Medicaid or going on Medicaid a sizeable inheritance outright? The answer is one way or another, that inheritance will likely get into the hands of the government.

A special needs trust (SNT) is a type of trust that can be used to avoid this from happening, particularly if you are leaving an inheritance for someone you know is special needs and on public benefits. We call these types of SNT’s Third Party Special Needs Trusts, because the funds from that trust are yours, managed by a trustee of your choice, and NEVER touch the hands of the special needs beneficiary. If we do our job correctly, the government won’t be able to touch those funds either.

There are also First Party SNT’s that a special needs beneficiary can establish with his or her own assets while staying on Medicaid. But any unspent assets from these trusts are subject to estate recovery, meaning the government can recover funds it used to pay for that beneficiary’s benefits. As you can see, it is more advantageous for your family to create a Third Party SNT while you can, to protect the beneficiary and also contingent beneficiaries, such as grandkids, etc.

Here are a few key ideas I’ve learned in doing special needs planning:

  • Get it right the first time!
  • Have a plan for where your assets will go and ensure that the beneficiary does NOT receive anything outright! It happens more than you think
  • Make sure the attorney knows the special needs beneficiary’s every issue, big and small, as well as the diagnosis, etc.
  • An attorney CANNOT be successful setting up an SNT without working together with a financial advisor and sometimes a CPA.


Monday, May 09, 2011

Inheritance Protection

 

Make sure your inheritance isn’t squandered!

Before we can help you write your will, trust, and power of attorney, we must understand your concerns and goals for estate planning. Many people have an overarching goal—that is, they want to be assured that the inheritance they are leaving to someone isn’t squandered.

Protecting an inheritance is a crucial goal, and one that we specialize in helping people deal with every day. But protected from whom and what, exactly? Here are a few answers, and they depend on who the person is:

  • If the beneficiary is a minor, obviously we want to ensure the inheritance is used for their benefit and their benefit only.
  • If the beneficiary has a spending problem, substance abuse problem, etc., our goal would be to limit how the inheritance can be spent.
  • Is the beneficiary in a relationship with a daughter-in-law or son-in-law that you don’t care for or have a concern about? Worried that the inheritance would go to your beneficiary’s spouse upon divorce? We devise solutions to deal with these problems on a regular basis.
  • What about beneficiaries in high risk professions, such as lawyers or doctors, where lawsuits are prevalent and where the inheritance could be attached to a lawsuit?
  • Special needs beneficiaries, of which 15-20% of people are, must have their inheritance put into a special needs trust if you don’t want the inheritance to be squandered to cover costs that public benefits, such as SSI or Medicaid, would otherwise cover.

These are a few of many reasons why people are coming to us every day to make sure the inheritance they leave to someone else isn’t squandered. Remember, sometimes we know of these types of issues now or ahead of time. But more often, we cannot predict what will happen in the future. Do you want to risk your inheritance being used the wrong way? We can help craft a flexible plan that ensures your inheritance will go where you want it to go.

Let us know if we can help you protect your legacy. Call today for a complementary appointment, (215) 706-0200.


Monday, February 28, 2011

No Plan? Big Problems.

 

Don't have an estate plan? No one can force you to engage in estate planning, but without a proper estate plan, you are putting yourself and loved ones at more risk than necessary. Here are some complications that can arise when you don’t have a plan. For our readers that have not engaged in estate planning or haven’t reviewed their plan for over 3 years, now is the time to get your affairs in order.

  1. Intestate Laws: Pennsylvania has an intestate law that dictates how your property and assets are divided upon death if you do not have a will or other estate planning tool such as a living trust. Dying without a will can be costly, both in potential higher taxes and family grief/conflict due to a lack of knowledge about your wishes.
     
  2. Dependents: If you have minors or care for dependents or pets, you want to ensure you appoint someone in writing to be in charge of your dependents, kids or pets. You also want to make sure you leave assets, preferably in trust, to care for your dependents. If you have kids and no estate plan and they inherit assets, a custodian account will be established. Once a child turns 18, however, they are free to do what they want with those assets. Typically, an 18 year old does not have the maturity to handle their own assets.
     
  3. Spendthrifts and Special Needs: If you have a spendthrift child, or a spouse or child with special needs, there are steps you must take to ensure assets don’t end up in the wrong hands (creditors, government, bankruptcy court, etc.).
     
  4. Family Battles: Don’t assume your family will just sort out your affairs without any conflicts or commotion. From our law firm’s vantage point, we often hear of cases that go to court that pit family member against family member. We also know that conflicts can largely be avoided by putting together a proper estate plan. It’s just not worth the risk, or your legacy.
     
  5. Incapacity or Disability: You must ensure you have a power of attorney for your finances and health care. That way, if something happens to you and you cannot make decisions for yourself, someone you trust can immediately carry on your important affairs. Without a power of attorney, sometimes a guardian will have to be appointed in court, and the guardian must continue to be supervised by the Orphan's Court. This means legal bills can pile up quickly and unnecessarily.

If you, a friend, a neighbor or relative need estate planning assistance, we welcome you to contact our firm at your convenience. You can use our convenient online contact form or call us at anytime at (215) 706-0200. We are pleased to offer a complementary initial consultation.


Monday, October 25, 2010

Special Needs Trusts: The Basics

 

If you wish to provide for a loved one with either a medical or educational disability, a Special Needs Trust is usually the best option to achieve this goal.

It is a detriment to any person that receives public benefits (SSI, Medicaid, etc.) if they are provided money outright. Therefore, a Special Needs Trust is important in these circumstances, and they successfully avoid this dilemma.

By setting up a Special Needs Trust carefully, we select a Trustee who cares for your loved one, and provides for any supplemental needs with the trust fund. The Trustee makes sure that your loved one never actually touches the funds. This ensures that eligibility for public benefits will never be in jeopardy.

If you establish a Special Needs Trust for the benefit of another person, this is called a “Third Party Special Needs Trust.” With these types of trusts, the Pennsylvania government is not entitled to recover any assets (“estate recovery”) when the person dies. In other words, they cannot dip into whatever is leftover in the Special Needs Trust to cover the cost for any public benefits that were consumed.

A Special Needs Trust is a specialized tool and provides many benefits. If you have a loved one on public benefits that you wish to provide for, we can assist you.

 

Let our firm assist you: Our firm offers a complementary estate plan review and consultation. Please call us today at (215) 706-0200 or email us.

Pass the word on: If you know someone who can benefit by reading this blog, please forward it on to them, or subscribe your friend or family member through this link.


Thursday, April 22, 2010

Appointing Agents -- An Important Estate Planning Component

One of the most difficult tasks in any estate plan is choosing who will manage your affairs while you’re alive and after you pass away. In addition, if you have children under eighteen, you also must consider who will step in as guardians if need be. An agent is a broad term, and emcompasses several roles, depending on what components of an estate plan you put into place. Agents include powers of attorney, personal representatives of the estate, trustees and fiduciaries.

Below are some ideas to start with on how you might go about filling these important roles. After reading this article and gathering some ideas, you should seek the assistance of a qualified estate planning attorney to help you make these decisions.

  • Who do you trust? Trust is key in appointing anyone to serve in these important roles. When I think of trust, I think of a gut feeling that I have about a person. I ask, will that person have my best interests at heart when they are acting on my behalf? Finding someone you can place your trust in for these roles is easier said than done. Whatever you do, don’t simple choose someone because of convenience.
     
  • Who is capable? Assuming most people are good-natured, the next question becomes, who can actually manage your affairs, your estate and your children? Sometimes, managing the affairs of someone else can be extremely complex, depending on the assets that the person has. Consider whether that person will have to hire an attorney to help him/her manage your affairs. That can get costly.
     
  • Who would agree to the role? Just because you have decided to appoint someone does not mean they will agree to serve. In fact, a person filling a role can resign at anytime. Make sure the person you appoint is on board to serve.
     
  • Who will the backups be? In the event that your first choice cannot serve in the role, you must make sure you have at least one, if not two trusted backups. You must make sure the backups are trustworthy, capable and willing to serve as well.
     
  • When does it make sense to appoint two or more people to fill one role? Typically, I do not recommend setting up your appointments like this. Consider this: You really want to have whoever is dealing with your affairs to speak with one voice. There is much potential for disagreement and discord if two or more people are filling one role. Remember, your goal is to create a smooth transition, not hamper it even more.

In general, you should review your choices for these roles at least every five years, if not sooner. You don’t want to have outdated documents with people filling roles you no longer want them to fill, or roles they can no longer fill.

We offer complementary 90 minute consultations for estate planning issues. Call our office today (215) 706-0200 or email us at info@jawatlaw.com to set up your appointment today. Our team would be pleased to assist you in all of your estate planning needs.


Thursday, March 25, 2010

Special Needs Trusts

Special Needs Trusts are designed to permit financial resources to remain available to assist a disabled individual who receives or may receive in the future, Medicaid/Medical Assistance and SSI benefits. The trust, when set up properly, protects the resources from im

Special Needs Trusts are designed to permit financial resources to remain available to assist a disabled individual who receives or may receive in the future, Medicaid/Medical Assistance and SSI benefits. The trust, when set up properly, protects the resources from immediate invasion by Pennsylvania Department of Public Welfare (DPW).

When setting up the trust, one must clearly state that the trustmaker is SUPPLEMENTING public benefits, not supplanting them. The trust must be irrevocable, and must allow the trustee (person making the distributions) to have complete and unfettered control over those distributions. Distributions should never be made directly to disabled person. Instead, distributions should be used to pay vendors for medical equipment, entertainment, etc. for the benefit of the disabled person.

Types of trusts:

Self-settled trust: A self-settled trust is funded with the disabled person’s own money. In Pennsylvania, the commonwealth must be listed as initial beneficiary upon passing of disabled person to recover costs of Medical assistance, etc.

Third party trust: A third party trust is created by one person for the benefit of another (i.e., mother creates trust for disabled daughter). Unlike a self-settled trust, the Commonwealth of Pennsylvania has no right to seek reimbursement for Medicaid, unless they are added as a beneficiary, in which case, they WILL likely attempt to recover appropriate expenses

Pooled trust: This kind of trust involves a non-profit fiduciary with a “mutual fund” type of program where the funds are invested in a common fund but with individual accounts

Questions to think about:

-- Who is the trustee? Corporate trustee or someone in the family?

-- How much money should be in the trust?

-- Does your attorney have experience writing SNT’s?

 

The rules for SNT’s are tricky and complex. Make sure you have an attorney who is experienced in special needs matters draft the trust, and advise you on all matters relating to the trust.


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The Law Offices of Jeremy A. Wechsler assist clients with Estate Planning, Wills, Trusts, Asset Protection, Special Needs Planning, Powers of Attorney, Will Challenges and Probate/Estate Administration in Willow Grove, PA as well as Abington, Hatboro, Dresher, Horsham, Bryn Athyn, Huntingdon Valley, Fort Washington, Jenkintown, Glenside, Oreland, Warminister, Wyncote, Ambler, Elkins Park, Flourtown, Philadelphia, Warrington, Cheltenham, Gwynedd Valley, Jamison, Feasterville Trevose, Richboro, North Wales, Blue Bell, Lafayette Hill, King of Prussia, Collegeville, Oaks, Phoenixville, Oxford Valley, Langhorne, Penndel, Bristol, Fairless Hills, Bensalem Plymouth Meeting and Furlong in Philadelphia County, Bucks County and Montgomery County.



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