Basics of Estate Planning Legal Tools to Uphold Your Wishes and to - PowerPoint PPT Presentation

Basics of Estate Planning Legal Tools to Uphold Your Wishes and to Protect Loved Ones The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC phone (314) 644-3200 | fax (314) 206-4745 calsop@alsopelderlaw.com | www.AlsopElderLaw.com 6654 Chippewa Street, St. Louis, MO 63109 We ofger complimentary car service for those who do not have transportation. The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC | 1

THE FOUR WAYS THAT OWNERSHIP OF PROPERTY IS TRANSFERRED AT DEATH PROBATE: NON-PROBATE: Probate assets are the only assets transferred pursuant to the decedent’s Will. BY WILL BY JOINT OWNERSHIP BY CONTRACT BY TRUST Benefjciary Designations: Life Insurance Policies Probate assets : titled in IRA Accounts only ONE individual’s name Typical Examples: Annuities Husband/Wife Brokerage Accounts: TOD (Note: A Trust set out in A legal entity that is similiar Parent/Child Real Estate: Benefjciary Deeds a Will is referred to as a to a family corporation. Grandparent/Grandchild US Savings Bonds: POD Testamentary Trust and it Among Siblings Motor Vehicles (DOR): TOD does not avoid probate Bank Accounts: POD) administration. Personal Property: Deed of Gifu Deed of Gifu: Household items and similar personal property Pour-Over Will Through the probate Assets pass to Benefjciaries, Assets pass to the process, assets pass to the Assets pass to surviving, pursuant to Benefjciary, TOD benefjciaries named in the Benefjciaries named in the titled owners (can be Trust (children, or POD provisions (can be Will (can be individual/s individual/s or Trust/s) individual/s or Trust/s) grandchildren, etc.) or Trust/s) KEY: DOR = Department of Revenue; TOD = Transfer on Death; POD = Paid on Death The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC | 2

More Legal Tools • Powers of Attorney — Durable Power of Attorney: The power of the attorney-in- fact to act on the principal’s behalf continues despite the principal’s incapacity, whether or not a court decrees the principal to be incapacitated — Power of Attorney (without “Durable” language): The power of attorney is revoked and the power of the attorney-in-fact to act for the principal automatically stops if the principal becomes incapacitated The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC | 3

More Legal Tools • Powers of Attorney — Springing Power of Attorney: This type of power of attorney is efgective only when the principal is incapacitated or when some other stipulated event or condition occurs, thus “springing” the power of attorney into action — Non-Springing of Attorney: This type of power of attorney is efgective immediately upon execution of the document and remains efgective in the event of the principal’s disability or incapacity The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC | 4

More Legal Tools • Durable Powers of Attorney - Financial — Principal: the person who creates and signs the Durable Power of Attorney — Attorney-in-Fact: the person who the principal appoints to act on his or her behalf ƒ The attorney-in-fact (AIF) has a duty to act in the interest of the principal and to maintain contact with the principal, communicate with him or her and follow his or her wishes ƒ The AIF must avoid self-dealing and must act using a high degree of care ƒ Once the Durable Power of Attorney is signed, the AIF has a fiduciary relationship and obligation to the principal The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC | 5

More Legal Tools • Durable Powers of Attorney - Financial — Powers include: ƒ Manage property and business afgairs ƒ Apply for government benefits ƒ Manage all bank accounts ƒ Hire an attorney ƒ Enter into a contract The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC | 6

More Legal Tools • Durable Powers of Attorney - Financial — Survives the incapacity of the principal — Efgective as soon as the principal signs — Not valid where it is later determined that the person lacked the mental capacity to execute the document — Efgective tool to prevent guardianship — Make financial decisions — Prevent state/court involvement The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC | 7

More Legal Tools • Special Needs Trusts — What is a Special Needs Trust? ƒ Also known as a supplemental needs trust ƒ To “supplement,” not replace, public benefits for person who is deemed disabled ƒ In this context – any type of disability as defined by Social Security at 42 USC 1382c(a)(3) The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC | 8

More Legal Tools • Special Needs Trusts — Difgerent forms of SNTs codified in Omnibus Budget Reconciliation Act in 1993 (OBRA ’93) ƒ Self-Settled or Third-Party — Inter vivos or Testamentary — Facts and circumstances will determine type of trust The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC | 9

More Legal Tools • Special Needs Trusts — Three types of SNTs ƒ (d)(4)(A) ƒ (d)(4)(C) ƒ Third-Party SNT The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC | 10

More Legal Tools • Third-Party Special Needs Trust — Created by anyone other than the person who was disabled — Funded by a third-person — Beneficiary - can be anyone — Grantor trustee - yes — Distributions to third-parties — Payback - no — Disability defined by SSA — Gifu tax exclusion - can use — Testamentary - yes — Age limit - none — Frequently used for - any use The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC | 11

More Legal Tools • Third-Party Special Needs Trust — Not just a form — Risks ƒ Loss of benefits The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC | 12

Know the Public Benefits • Supplemental Security Income (SSI) • Social Security Disability Insurance (SSDI) The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC | 13

Know the Public Benefits • Supplemental Security Income (SSI) — Needs-based ƒ Limited income and assets The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC | 14

Know the Public Benefits • Supplemental Security Income (SSI) — Medicaid Qualification ƒ Some states is automatic qualification ƒ MO, not – still have Medicaid qualification • Less than $1,000 • Non-countable resources — Home — One car — Pre-need burial agreements... The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC | 15

Know the Public Benefits • Social Security Disability Insurance (SSDI) — Not means-tested — No financial eligibility requirements — Medicare qualification ƒ 24 months afuer receiving SSDI • Some exceptions to the waiting period The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC | 16

Choice of Trustee • Family members ofuen have little fiduciary experience • Family members ofuen do have superior knowledge of the disabled person • Educate family member trustee • Utilize co-trustees include a family member • Courts may desire or require professional trustees The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC | 17

Questions? THE ELDER & DISABILITY ADVOCACY FIRM OF CHRISTINE A. ALSOP, LLC 6654 Chippewa Street, St. Louis, MO 63109 (314) 644-3200 | www.AlsopElderLaw.com To view this presentation in PDF, please see the link listed under today’s presentation entry on our Events & Seminars page on our website. The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC | 18