What Happens if You Die without an Estate Plan for Your Business?

                          Calling All Business Owners: Don't Forget Your Estate Plan!
If you do not have legal documents in place because you believe that you don't have a taxable estate (one whose gross value exceeds $5.43M) you are missing the point.

Like most business owners you have probably spent countless hours, energy and ideas on how to establish and grow your business.  You may even be planning to sell your business and successfully retire.  Amid your success do not forget that it is important to create an estate plan and re-evaluate it to make sure it still meets your needs. Don't be the shoemaker whose children are the last to wear shoes.

 

 

 

 

 

 

 The importance of have legal documents in place is so that:

 

1.  You choose who makes financial and healthcare decisions for you if you become incapacitated;

2.  You avoid a court supervised guardianship which is expensive and results in loss of privacy;

3.  You choose what is to be done with your business when you die;

4.  You decide who inherits and how much (as well as who does not inherit);

5.  You plan for future generations; and

6.  You provide for the needs of a current spouse as well as children from a former marriage.

 

If you already have an estate plan take out the documents and see what date you signed them.  You may be surprised to find that it was done many years ago and is outdated.  Your estate plan needs to be updated or revised due to changes in the laws or, changes in your wealth or, life changing events (i.e. divorce, marriage, birth, death).  It is a good idea to have your estate plan reviewed every two years so that you maximize benefits provided by law.  There is no time like the present so schedule your consultation today and be on your way to creating peace of mind.

 

      We want to be your trusted planning advisor through life.

Congress May Change The Financial Rules for Veterans Benefits

It's Back: The Veteran's Administration Proposes New Rules for Aid & Attendance

Aid & Attendance benefits is a monthly financial benefit provided to service men and women (and their spouses) to help pay for out-of-pocket medical expenses that are not reimbursed by insurance.  The goal of this program is to help the veteran be able to stay at home or, in the community rather than reside in an institution.   For many veterans, this financial assistance helps pay for home health care and assistance with activities of daily living which can improve quality of life and care.  In order to quality for Aid & Attendance the veteran must demonstrate limited financial resources, limited income and out-of-pocket medical expenses.

The Veterans Administration has proposed a rule in Congress that will make the net worth (assets) and income requirements to qualify for Aid & Attendance similar to the Medicaid rules. Supposedly the reason for the proposed rule is to maintain the financial integrity of the program.  Currently, Medicaid law is more restrictive than VA law.  Here are a few examples:

1. Transfers: Transfers of assets (even to family) within 5 years of applying will cause a Medicaid applicant to be denied benefits for a period of time based on the value of the assets transfers.  This is called the "look-back period" and "transfer penalty."  The VA rules do not penalize transfers. The proposed VA rule seeks to have transfers penalized (delay in qualifying) if made within 36 months of applying.  Transfers would include: birthday gifts to family members; charitable gifts; gifts to religious organizations.  This could unjustly result in a veteran being penalized when the gift had nothing to do with qualifying for Aid & Attendance. The proposed rule includes an exception if the veteran transfers assets to a child who is incapable of self-support due to a disability that began prior to age 18.  This rule does not take into consideration that adult children of the veteran could become disabled after age 18. The penalty would be calculated by dividing the value of the asset transferred by the maximum annual pension rate for Aid & Attendance (rounded down to the nearest whole number).  The maximum penalty period would be 10 years. Again, the proposed rule results in unequal treatment of a veteran due to marital status or, the surviving spouse even if they have transferred the same sum of money; this unequal result is due to the fact that they each receive different annual pension rates.

2. Trusts:  Placing assets in an irrevocable trust will cause delay in qualifying for Medicaid.  The VA proposed rule seeks to counts assets placed in a trust which can cause disqualification for Aid & Attendance.

 

The proposed rule also identifies the type of medical expenses that can be deducted from income.  These medical expense items or services  must be medically necessary or, improve the individual's ability to function.  The proposed rule will limit the hourly rate for a home health aide that can be deducted from the veteran's income; the hourly rate would be taken from the annual Met Life report on healthcare rates. 

 

The current rules do not clearly define how much net worth a married veteran or, an unmarried veteran (or their widow(er)) may have in order to qualify. It is expected that the veteran use a portion of their net worth to pay for their care.  The VA does consider the age and life expectancy of the veteran when determining whether the veteran exceeds the net worth requirement.  The net worth limit proposed in the rule is the number used for the community spouse under the Medicaid rules.

 

If you are a veteran, a veteran's spouse or family member please contact your representative in Congress to let him/her know how this proposed rule could affect you and your ability to age in place.

Florida Homestead Rights for Same Sex Married Couples After January 5, 2015

                Are you a Same Sex Married Couples in Florida? Know Your Homestead Rights

As the celebrations continue since January 5, 2015, have you begun to get your affairs in order to take advantage of your marriage now being recognized in Florida? If you and/or your spouse own a Florida home as your primary residence NOW is the time to take stock. Do you know that:

 

 Now you can own the homestead as ‘tenants-by-the-entirety’ which means each of you has a 100% interest in the homestead tax exempt property AND the surviving spouse automatically inherits the property at the death of the first spouse.

1. The property will not be reassessed at the death of the first spouse.
2. If the current deed does not reflect your marital status then a new deed should be prepared and recorded so that you and your spouse receive these important and valuable benefits.
3. If both of you have filed for the homestead tax exemption then you do not need to re-apply when the new deed is recorded.  If only one spouse has filed a homestead tax exemption it is recommended that the second spouse file a homestead application.
4. You cannot claim a Florida homestead exemption and also claim a permanent residence based tax exemption anywhere else!
5. As of the 2016 tax year Broward County will cancel a same-sex married couple’s homestead tax exemption and assess penalties if it learns that the couple had a Florida homestead exemption and a permanent residence elsewhere. This means you will need to choose which property to maintain as your primary residence for tax purposes and report all changes timely to the tax appraiser’s office.
6. Updating your deed should be part of creating a plan that will protect your and your spouse’s legal rights during your lifetimes and after your passing.

     Don't delay, schedule your consultation today - be on your way to creating peace of mind.      We want to be your trusted planning advisor through life.

Non-Lawyers' Advice is Unauthorized Practice of Law Says Florida Supreme Court

Beware Non-Lawyers' Advice to Obtain Medicaid and Veteran Benefits: The Unauthorized Practice of Law

Recently, the Florida Supreme Court issued an opinion that identifies what actions taken by non-lawyers constitute the unauthorized practice of law (UPL).  This opinion, and reporting individuals who commit UPL to The Florida Bar (TFB), will help protect the public.  Be careful: there are some financial advisors, insurance specialists and others who will attempt to charge you for giving advice and filing an application for Veteran Aid & Attendance benefits or, who will attempt to sell you an annuity and tell you it is the only way to qualify for government benefits. 

This is what you, your friends and family need to know is considered the unauthorized practice of law:

1. Having a non-lawyer write an irrevocable trust
2. Having a non-lawyer determine whether you need a qualified income trust to obtain Medicaid benefits, drafting it or telling you how much to fund it
3. A non-lawyer hiring an attorney to review, prepare or modify documents for you if: (a) payment to the attorney passes from you through the non-lawyer; (b) you and the attorney do not have direct communication or an independent relationship; (c) the non-lawyer makes the determination that you need a document prepared
4. Having a non-lawyer create a personal service agreement
5. Having a non-lawyer provide advice about implementing Florida law to obtain Medicaid benefits including which strategy is appropriate.

There are real life dangers of Medicaid planning by non-lawyers which injure the consumer and either delay being approved for Medicaid or, even worse - denial of Medicaid benefits: 

• Failing to inform the consumer of the legal and tax consequences of a personal service agreement
•  Giving advice that causes the consumer to be disqualified or delayed in Medicaid approval which then creates an unpaid debt to the facility
• Creating a document (i.e. personal service agreement) that contains misrepresentations which leads the Medicaid agency to charge the consumer with Medicaid fraud and lose eligibility for Medicaid
• Failing to identify all income sources and the consumer is over the income limit for Medicaid
• Failing to identify all countable resources which place the consumer over the Medicaid resource limit;
• Failing to identify all reasonable means to preserve resources to provide for the consumer's (or their spouse's) quality of life
• Recommending that assets be transferred to a caregiver without a properly drafted personal service agreement.

You, your friends and family deserve to be properly informed of your legal rights and to avoid being taken advantage of by non-lawyers.  Please call me to have your situation thoroughly evaluated and your legal options explained to you so you may be confident in achieving your goals.

 

Your trusted planning advisor through life