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What happens if I pass without a Will?

in Articles, Attorney Advisor Series, Estate Planning by morgan morgan Leave a comment

Wills are great tools to ensure that your wishes are carried out after your passing. Wills can direct assets that are titled in your individual name to whomever you wish them to go to. They ensure that your concerns are carried through. But what happens if you don’t take the time now to create a will? What will happen if you don’t create this vital document before your death?

The answer is surprisingly simple, the state will decide where your assets will pass. The state has already created a ‘will’ of sorts for you which is called intestate succession. Under intestate succession, you do not direct where any of your assets will flow but will pass to heirs at law as determined by state statute. 

In North Carolina, if you are a single individual, your assets will flow “down the line” of your family tree. This will mean that your children will receive an equal amount of your assets immediately after your passing. If you do not have any children, then your assets will go to your parents if they are still living. If your parents have passed it will go to your brothers and sisters. The search will continue in this manner until an heir or heirs are found. This is likely why you have heard the story of someone’s great aunt twice removed passing and leaving a fortune to an unknown relative. 

The heirs under intestate succession will receive their property immediately after the probate process. This means that if any of these heirs are irresponsible, they will immediately receive their share of your hard earned funds. Additionally, they have full legal authority to spend those funds in any way that they see fit. 

Another consideration is the financial status of your heirs. If any of your heirs are disabled or receiving government benefits, the direct injection of money from your estate could jeopardize their ability to continue to receive these funds.  A proper plan can ensure that they are protected.

To ensure that your assets are directed, steps need to be taken to guarantee that your wishes are executed. Additionally, a properly executed estate plan is essential to ensure that your assets are protected at your death. At McIntyre Elder Law we take a holistic approach to ensure that your estate fits your unique needs. We would be happy to talk to you about any needs that you might have. 

Contact us today at 888-999-6600 to schedule your free consultation.

Eric Baker J.D
Elder Law Attorney

Tax Avoidance Series: How to Avoid Estate/Gift Tax with Trusts and Annuities

in Articles, Attorney Advisor Series, Estate Planning, Tax Planning by Greg McIntyre Leave a comment

 

The estate/gift tax is a tax based on the value of the assets an individual owns at the time of death or gave away during their lifetime. Luckily, there is a value threshold and everyone whose assets/gifts are below that threshold, avoids the death tax. This allows for practitioners to implement plans for those who are above the threshold, to bring them under that magic number and avoid unnecessary tax.

One way an individual can avoid the estate/gift tax, is to freeze the value of their estate. Obviously, purely gifting assets can also have adverse tax consequences and can result in a loss of control over the gifted asset. The ideal method would combine retention of assets with tax avoidance.

A threat to crossing the estate/gift tax threshold is appreciating assets. If assets keep increasing in value, they can easily subject someone’s estate to tax at death. What you want to do is freeze the value of your estate (so that it does not appreciate such that your estate will be subject to the high federal tax rates at death) and pass along any appreciation to your beneficiaries.

The method to accomplish this goal and maintain a stream of income, is to utilize a Grantor Retained Annuity Trust (GRAT).

Basics of a GRAT 

In a GRAT, you are placing assets in a trust with two distinct effects. 1. You receive a stream of payments back from the trust; and 2. You are earmarking a certain amount to pass to your beneficiaries free of gift/estate tax.

Here is how it works: The trust maker or Grantor creates an irrevocable trust and funds it with assets. The Grantor retains a right to receive an annuity from the trust (Retained Interest). This annuity must be paid to the grantor at a set rate for a set amount of time. If there is no income generated by the trust assets, the annuity payments will be paid from principle.

The annuity from the trust represents a percentage of the trust, not the full amount. Any amount not paid back to the Grantor over the set amount of time of the annuity, will be paid to the beneficiaries with no further gift tax consequences (remainder interest).

There is an assumption that any assets put into the trust will appreciate at a set rate as set forth by IRC 7520 as of the date of transfer (as of July 2022, that rate is 3.6 percent). If the assets do not appreciate at at least the 7520 rate, they are returned to the Grantor with no adverse tax consequences. If the assets appreciate beyond the 7520 rate, the excess appreciation is passed to the beneficiaries free of gift tax.

Is a GRAT right for Me?

If you have assets that are appreciating at a significant rate, it may be beneficial to consider a GRAT. GRATs are especially useful for stock owned in companies that are going public. However, they can be used for any assets that are increasing in value.

When Should I Implement a GRAT?

Interest rates are still low. That means that the IRC 7520 rate is still low. Remember, any appreciation above that 7520 rate is passed without gift tax. Thus, it is better to implement a GRAT while the rates are low.

Additionally, if you hold assets with a depressed value, a GRAT is a great strategy. When the stock market is underperforming and driving down the relative price of individual stocks, you want to plan for the rebound. A GRAT is a perfect way to manage the appreciation of rebounded equities.

What are the income Tax Consequences of a GRAT?

All the income, gain, and loss will be passed along to the Grantor. The purpose of the trust is to avoid gift/estate tax. The payment of tax by the Grantor will not be considered a further gift to the trust and is, thus, a further benefit to any of the beneficiaries.

Will My Beneficiaries Have Capital Gains on Any Assets They Receive at The End of The Trust Term?

The beneficiaries do not receive a step-up in basis in any of the assets they receive. However, a properly structures GRAT will have “Swap Powers” where the Grantor can swap out low basis assets for higher basis assets.

Conclusion

GRATs are a great way to avoid excess taxation. Now is a great time for a GRAT given that interest rates are low and assets values have been depressed, given the recent performance of the stock market.

 

 

 

 

 

 

Brenton Begley

Estate Planning & Elder Law Attorney

How to Put Property Into a Trust…

in Articles, Attorney Advisor Series by Greg McIntyre Leave a comment

 

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As a free gift to you, and during this trying time for all of us, I would offer a free consult at one of our locations. We are located in Charlotte, Shelby, and Hendersonville, North Carolina, covering most of Western North Carolina. In addition, we also offer virtual and phone consults to people across the state of North Carolina. I’m with you during this pandemic. We’re all going through this together. Let’s make sure that we have our affairs in order. Take care of ourselves first, and then our loved ones and our family. Thank you. Have a great day.

Schedule Your Free Consult Today!


What Happens To My Crypto When I Die?

in Articles, Attorney Advisor Series by Greg McIntyre Leave a comment

What really happens to my cryptocurrency when I die? Can I pass it to my loved ones and if so how?

Cryptocurrency is all the rage. There are great risks but great rewards. Decentralized currencies and the decentralized finance network along with smart contracts will change the way we buy goods, invest, borrow money, and even buy insurance. Many of our client’s own cryptocurrency but most have no idea how to include it in their estate plan. The future of blockchain currency and finance is here, right now. Let’s talk about some traditional legal tools that can effectively leave a crypto legacy for your loved ones and some new tools that are on the horizon.

Can I pass Crypto in a will?

You may pass your cryptocurrency in a will similar to how you pass other assets. However, precautions should be taken. A separate writing with accounts and passwords should be created but not filed with the will when you pass away. This document may be referenced but should not be filed in the public court record. This separate document will be the keys to your digital accounts and allow your executor ones to access them and pass them to your heirs in shares of your choice. Any factor authentication process should be explained and devices to be used for this process specified. Most popular crypto trading platforms like Coinbase have a process whereby an executor may access accounts upon proving their court granted authority. The drawback of passing your cryptocurrency with a will is that it is subjected to the rather lengthy probate process whereas a trust avoids the court probate process altogether.

Can I pass Crypto in a trust?

A trust can actually own a crypto account or rather, a cryptocurrency account may be created in the name of that trust allowing the trustee to manage that account during life the same as their personal account. Upon death, the successor trustee(s) would take over control of the account or multiple accounts and continue to administer those accounts as per the rules set up in the trust. The trust administration process may be carried out by the trustee, often with guidance from an attorney. Should you specify your beneficiaries to receive your crypto holdings and in what shares in the trust document, the trustee is bound, legally, to ensure those beneficiaries receive their specified share in a timely manner.

The same precautions should be taken with the trust as with the will, although the trust is not generally filed in a court probate proceeding. A separate writing with accounts and passwords should be created that will be referenced in the trust. Any factor authentication process should be explained and devices to be used for this process specified.

What is a Digital Blockchain Trust?

Theoretically, a Digital Blockchain Trust or DBT for short, is a type of digital instrument that holds information. The information tracks your crypto holdings and acts based on certain information. For example, if you were to pass away, the DBT, once it verifies your demise as a Verifiable Death Event (VDE), would instantly preform a set of preset instructions. You may set up the DBT to instantly split 20% of your crypto holdings and send it to a charity of your preselected choice. The other 80% being split amongst your children who will receive an email, text, or additional type of communication that prompts them to set up a password to access their Sub Trust Wallet (STW). The STW would require them to verify their identity through a set of pre-scripted identity verification points (IVPs) and set up their password and two factor authentication methods to access their very own digital crypto wallet. An alternative to this would be to send their percentage of your crypto in the DBT to their existing crypto wallet. Let’s say you have college age children and don’t want to give them everything all at once. You can easily build your DBT to make deposits to the STW for each child over time, let’s say a period of years. You may choose to giver the 10% of their share per year for the next 10 years starting when they reach 25 years of age. Walla, your trust has been administered.

What is missing here? Well, a human trustee would generally handle all the trust administration. However, in a DBT the trustee is essentially the information or set of instructions encoded in the DBT. The DBT acts on your preset instructions. This avoids any chance of fraud or misuse of funds by a trustee and ensures that the instructions encoded in your DBT are carried out exactly as you intended. You are essentially acting as the trustee through the DBT after you have passed away. This is a massive improvement over traditional trust documents and is the future of estate planning.

 

As more and more assets move to a digital blockchain world the ability to safely and securely administer these assets when the asset owner passes away will become increasingly important. We intend to be at the forefront of this new(ish) blockchain frontier. Please contact our office for a free in person, virtual or phone consultation to begin planning for your future today. You may put off planning for the future, but the future has a plan for you either way. It’s your digital choice.

Schedule Your Free Consult Today!


written by:

Greg McIntyre

Estate Planning & Elder Law Attorney

704-749-9244

greg@mcelderlaw.com

4 Signs It Is Time To Consider A Trust

in Articles, Attorney Advisor Series by Greg McIntyre Leave a comment

 

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As a free gift to you, and during this trying time for all of us, I would offer a free consult at one of our locations. We are located in Charlotte, Shelby, and Hendersonville, North Carolina, covering most of Western North Carolina. In addition, we also offer virtual and phone consults to people across the state of North Carolina. I’m with you during this pandemic. We’re all going through this together. Let’s make sure that we have our affairs in order. Take care of ourselves first, and then our loved ones and our family. Thank you. Have a great day.

Schedule Your Free Consult Today!


6 Steps to Writing Your Will

in Articles, Attorney Advisor Series by Greg McIntyre Leave a comment

 

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As a free gift to you, and during this trying time for all of us, I would offer a free consult at one of our locations. We are located in Charlotte, Shelby, and Hendersonville, North Carolina, covering most of Western North Carolina. In addition, we also offer virtual and phone consults to people across the state of North Carolina. I’m with you during this pandemic. We’re all going through this together. Let’s make sure that we have our affairs in order. Take care of ourselves first, and then our loved ones and our family. Thank you. Have a great day.

Schedule Your Free Consult Today!


 

How To Kill A Trust

in Articles, Attorney Advisor Series by Greg McIntyre Leave a comment

 

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As a free gift to you, and during this trying time for all of us, I would offer a free consult at one of our locations. We are located in Charlotte, Shelby, and Hendersonville, North Carolina, covering most of Western North Carolina. In addition, we also offer virtual and phone consults to people across the state of North Carolina. I’m with you during this pandemic. We’re all going through this together. Let’s make sure that we have our affairs in order. Take care of ourselves first, and then our loved ones and our family. Thank you. Have a great day.

Schedule Your Free Consult Today!

 

The Death Tax is Coming Back!

in Articles, Attorney Advisor Series by Greg McIntyre Leave a comment

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As a free gift to you, and during this trying time for all of us, I would offer a free consult at one of our locations. We are located in Charlotte, Shelby, and Hendersonville, North Carolina, covering most of Western North Carolina. In addition, we also offer virtual and phone consults to people across the state of North Carolina. I’m with you during this pandemic. We’re all going through this together. Let’s make sure that we have our affairs in order. Take care of ourselves first, and then our loved ones and our family. Thank you. Have a great day.

Schedule Your Free Consult Today!

Elder Law Policy Watch: American Jobs Plan

in Articles, Attorney Advisor Series by Greg McIntyre Leave a comment

Now that the American Rescue Plan has been passed by Congress, which was directed at addressing the Biden administration’s goals around providing relief related to Covid-19, the focus has shifted to the next major proposal from the White House.  This new legislative proposal is known as the American Jobs Plan.  In the spirit of keeping you up to date on any changes that could occur relating to long-term care, we want to place a spotlight on a few areas of this legislation.

Relevant proposals from the American Jobs Plan:

  • Expand access to long-term care services under Medicaid
  • Increase support and wages for home health workers
  • Upgrade VA hospitals and federal buildings

The proposed expansion of access to long-term care services under Medicaid would be achieved by an increase to the program for home and community-based services (HCBS) and to the program known as Money Follows the Person, which has the goal of transferring nursing home residents back to the community. 

The specifics of Biden’s legislation sets out $400 billion that would be earmarked for this discussed increase in access to home and community based care.  To put that number into context, the $400 billion would be achieved by an annual increase in spending of $50 billion annually over the course of 8 years.  That number represents a 40% increase in the reported spending by Medicaid on long-term care in 2018 and a 70% increase for the same year’s budget on home and community-based services.  Additionally, that first $50 billion would be on top of the one-year increase that was passed earlier this year in the American Rescue Plan which saw a $12 billion dollar contribution to the home and community-based services budget.

The American Jobs Plan calls for increasing support for home health workers based on data that shows one in six of workers in this line of work live in poverty. In support of these policy measures, the administration points to a study from the Washington Center for Equitable Growth to demonstrate that increasing the pay for direct care workers led to a reduction in the number of health violations and number of deaths while also lowering the cost of preventative care.

Another study from researchers at UMass Boston argues that the quality of care patients receive and the productivity of direct care workers increases as the pay of those workers is raised.   Their research showed that an increase in pay as proposed under this legislation would lead to fewer staffing shortages, lower turnover, and higher productivity in direct care workers. 

The American Jobs Plan also looks for $18 billion to be spent on modernizing hospitals and clinics under the direction of Veterans Affairs.  The administration’s proposal points out that the median age of U.S. private sector hospitals is approximately 11 years, while the median age for the network of VA hospitals is 58 years.  This section of the proposal aims to bring those VA hospitals up to a standard that contributes to a quality of care our nation’s veterans deserve.

The full array of proposals in the American Jobs Plan covers much more than the scope of this update.  And of course, there can be a big difference between what form legislation takes as it is first proposed and what it looks like when it is passed by Congress. However, any mention of changes in the world of long-term care means we want to be alert as a firm to any impacts that could be on the horizon for our clients. You can expect more details from us as we track the passage of any of these proposals into law.

If you or your loved one has questions we would be glad to extend a FREE CONSULT to answer those estate planning and elder law questions and get your affairs in order. Let the experienced attorneys at McIntyre Elder Law help. Call (828) 233-5991.

Schedule Free Consult

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Book Your FREE CONSULT Today!

Jake Edwards, Attorney

Jake Edwards

Estate Planning & Elder Law Attorney

mcelderlaw.com

Hendersonville Office

136 S. King St. Hendersonville, NC 28792

828-233-5991

⚡️How You Are Set Up to Fail

in Articles, Attorney Advisor Series by Greg McIntyre Leave a comment

I am not happy. I have been fighting for my clients for years. As an Elder Law attorney, I have been on the front lines protecting property and individual rights. I have faith in this country and the hardworking people who live here. However, I have only seen the system make it harder and harder to keep your hard-earned money and property and to ensure you’re not taken advantage of. There is no other way to say it, the system is set up to take away your money and rights before you pass away.

The Cost of Long-term Care is Increasing

The average cost of long-term care is between five to ten thousand dollars a month. And that amount is only going up.  Considering that seventy percent of individuals over the age of sixty-five will need long term care, means that the majority of individuals in this country are facing a huge expense that they certainty cannot afford.

The expectation is that you spend whatever you’ve worked your whole life to earn on this need for care. Medicare won’t cover it, your supplement won’t cover it, and you basically have only a couple options to pay for it.

You can use Medicaid to pay for it. However, you have to qualify for Medicaid first—even though you have paid into Medicaid your whole life, just like Medicare and Social Security. Most people think that they can never qualify for Medicaid to pay for long-term care. However, this isn’t true. With the right kind of planning, almost anyone can qualify. It just takes doing.

The Rights of the Elderly are Routinely Ignored

This is extremely important because, considering that we all age, this affects us all. It seems that once you reach a certain age, you begin to lose your constitutional rights. I am referring to incompetency and Guardianship.

A Guardianship is a process that can take someone’s rights and liberties away and make them a Ward of the State. Notwithstanding the fact that a Guardianship is a similar deprivation of rights as a criminal case, a Guardianship is much easier to get than a conviction. Courts around this state routinely rubber stamp Guardianship orders that take away people’s rights. This is after having what can hardly be considered a hearing, with minimal evidence and a low burden of proof. Not to mention that the hearing isn’t even in front of an actual judge.

Thankfully, there’s things you can do to protect against this sort of thing happening to you or a loved one. Again, it takes doing.

They’ll Get You with Taxes

We get taxed on almost everything. Taxes are most individual’s largest expense. You’d think that there would be an end in sight. However, they’re just looking for more.

I am referring to the death tax. The talk in Congress is that it’s coming roaring back and if you’re not prepared for it, you can face anywhere between forty-five and fifty percent tax on your estate.

You guessed it, there’s also a way to plan to protect from this too. However, you need to sit down and do it.

It takes doing

So, why am I telling you this? I want to demonstrate that you’re set up for failure. That’s the default position that you’ve been put in as a citizen of this country. But it doesn’t have to be that way. There’re things you can do to protect yourself, your loved ones, and your hard-earned money and property.

What it takes is an hour conversation with someone like the experienced attorneys at McIntyre Elder Law. If you have questions about how to not fail, give us a call: (704)-259-7040.

If we can help you preserve assets before major changes in the law we would be glad to do so and would offer a FREE consult to sit down and discuss asset protection. Give s a call to schedule your free consult today or schedule online at: mcelderlaw.com. For a list of local numbers to our offices see below:

  • Charlotte: 704-749-9244
  • Shelby: 704-259-7040
  • Hendersonville: 828-233-5991

Please don’t wait ‘til it’s too late. Call McIntyre Elder Law today.

Schedule Free Consult

IN PERSON . VIDEO CONSULT . PHONE CONSULT

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