Charlotte Uptown Attorney, Therron Causey, works on lots of Adult Guardianship cases for our firm. He was kind enough to record a 3 minute video on Guardianships for us. Enjoy!
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You’ve heard the story before. Someone dies and they leave behind a will, which surprises at least one of their loved ones. This person feels slighted, cheated, abandoned, or indignant. Maybe, they think, the will was influenced by the shady tactics of others. Maybe the person who made the will had no idea what they were doing. Either way, the will should be challenged. The question then becomes: how does one go about challenging a will?
In NC, a challenge to a will is called a “caveat.” There are only a few bases upon which one may bring a caveat. Perhaps the will is invalid because it was procured by undue influence or duress. Perhaps the person making the will (the “Testator”) lack the requisite mental capacity to execute the will at the time it was signed. Or, perhaps the will was not validly executed as required by NC law.
Undue influence means that the Testator was influenced to make the will and that the person doing the influence either had them over a barrel or used isolation and deceit to convince them to execute the will. Duress means that the person doing the influencing use overtly threatening behavior to influence the Testator to sign the will. In either case, the rationale is that the Testator would not have executed the will in question had the influencer not used threats or deceit. Thus, the will should not stand.
To make a will in NC, the Testator must understand what they’re doing. This means that they must have a clear idea of their assets and their heirs, and also understand the effect of the will that they are executing at the time they sign it. Just because someone has “diminished capacity” doesn’t mean that they lack testamentary capacity. As long as they understand what’s going on and the effect of the will’s execution at the time of signing, the will is valid. That being said, it is best to proceed with an abundance of caution if the Testator is known to have di minished capacity.
Lastly, a will in NC must be signed by the Testator in the presence of two attesting witnesses (the Testator and witnesses must be over 18). If there is a failure in the signing of the will, it is considered invalid.
Now that you know the basis upon which a will can be challenged, you can effectuate your challenge by filing a caveat in the county where the estate process (probate) has commenced. The caveat will freeze the probate process until a superior court can determine the validity of the will.
Proceed with Caution
Before you challenge a will, it is important to understand the effect of the will’s invalidation. For example, let’s say Bob wants to challenge his father’s will made in 2020 because it left him out. Bob goes through the caveat process and is successful in getting the will thrown out. However, there was a prior will made by his father in 2000 that also disinherited Bob. Bob has just gone through a whole trial just to achieve the same result.
If you have questions about challenging a will, give the experienced attorneys at McIntyre Elder Law a call or schedule your FREE CONSULT online at: mcelderlaw.com.
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:
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Regards,
Brenton S. Begley
Elder Law Attorney
McIntyre Elder Law
“We help seniors maintain their lifestyle and preserve their legacies.”
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How can the way you own real estate help or hurt you as you age? Find out in this week’s episode.
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.
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Our Probate Case Manager, Tiffany Blackburn, breaks down the “Publication Period” that takes place during a Probate process.
#theelderlawguy #lawyergreg #estateplanning #savingthefarm #hometownheroes #vetbens #medicaidcrisisplanning
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.
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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:
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.
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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.
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Jake Edwards
Estate Planning & Elder Law Attorney
mcelderlaw.com
Hendersonville Office
136 S. King St. Hendersonville, NC 28792
828-233-5991
❌ Elimination of Step-Up-In-Basis? High taxation and what that might mean for you and more in this Elder Law Report. Stay tuned!!!
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:
Please don’t wait ‘til it’s too late. Call McIntyre Elder Law today.
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✅ 3 Commonly Held Misbeliefs about Money, Aging & Estate Planning.
⚜️Medicare will pay for long-term care.
⚜️I have a spouse so who needs an estate plan.
⚜️I have money.
Why plan? These questions and more answered in this Elder Law Report.
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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:
Please don’t wait ‘til it’s too late. Call McIntyre Elder Law today.
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TRANSCRIPT:
⚜️ Avoiding Probate.
⚜️ Maximizing Estate Tax Exemptions.
⚜️ …and much, much more!
Related Articles:
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:
Please don’t wait ‘til it’s too late. Call McIntyre Elder Law today.
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TRANSCRIPT:
Greg McIntyre:
Hi, this is Greg McIntyre and Brenton Begley. We are here for the Elder Law Report. I am an attorney at McIntyre Elder Law. All we do is estate planning and elder law. This is our special trust edition. We’re going to start. We’re going to talk about trusts the entire time. I’m with my law partner, Brenton S. Begley. Brenton, do you want to introduce yourself?
Brenton Begley:
Absolutely. Brenton S. Begley. He said my name for me. Appreciate that.
Greg McIntyre:
BS Begley.
Brenton Begley:
That’s right. BS Begley, as I’m well known. But that’s because that’s my initials, not for any other reason.
Greg McIntyre:
That’s right. That’s right. So, being straight, that’s what that-
Brenton Begley:
Being straight.
Greg McIntyre:
Shooting straight, right?
Brenton Begley:
That’s right.
Greg McIntyre:
You’re telling the truth. So the truth about trusts. Let’s talk about the truth about trusts. Trust me, okay? I think I wrote an article named that one time. Trusts are really hot right now because of the current, say, political tenor, tax environment, things that have been rumored to come about, like decreasing the tax exemption for a state and debt tax at the federal level, possibly doing away with the step-up in basis regarding capital gains tax, which is huge.
Greg McIntyre:
There’s just so many other things that trusts do a great job at. They can do all the heavy lifting of avoiding probate, and also preserve possibly the step-up in basis and help as much as double that estate tax exemption. So, let’s talk about those things, just methodically, within the next half hour, and I hope you enjoy it. So enjoy the ride. Let’s learn a little bit about trusts. Let’s discuss that.
Greg McIntyre:
We’re so blessed to be coming to you today from the Hendersonville area, Shelby area, and Charlotte area. So, Brent, why don’t you kick it off? Let’s talk about trusts and their many benefits.
Brenton Begley:
Yeah, so trusts have lots of benefits. One of the reasons why I like to use trusts is they’re such flexible tools, that you can use them for a lot of different things. So we have two types of trust. Revocable or irrevocable trusts.
Greg McIntyre:
At the top down, it really is. You can break them off. There’s so many different types of trusts, but at the base level, we like to think of them as revocable and irrevocable.
Brenton Begley:
That’s right. You can only have, within the categories of revocable and irrevocable, you can have a bunch of different types of trusts, but the trust is either going to be revocable or irrevocable.
Greg McIntyre:
So I don’t have my dictionary handy right now, and as someone who’s never read the dictionary, what does revocable and irrevocable mean?
Brenton Begley:
Well, so revocable means that it can be revoked, right? So it’s important to know what the parties to a trust are. So if you make the trustmaker or grantor, the revocable nature of a trust relates to the person who made it. So if I make a trust-
Greg McIntyre:
So you mean that if it’s revocable, I can revoke it?
Brenton Begley:
Yep. You can change it.
Greg McIntyre:
Wow.
Brenton Begley:
You can revoke it.
Greg McIntyre:
Shocker.
Brenton Begley:
Right.
Greg McIntyre:
Okay, so if it’s revocable, that means I can revoke it. I’m the trustee. I’ve got my hand in the cookie jar.
Brenton Begley:
Even if you’re not the trustee-
Greg McIntyre:
Even if I’m not, I can revoke anyway.
Brenton Begley:
You can revoke anyway or change it and amend in any way if it’s revocable.
Greg McIntyre:
If I am the trustee, I can put any property into it, taking property out of it.
Brenton Begley:
That’s right.
Greg McIntyre:
It’s tagged to my social security number. There’s no double taxation. No higher tax on the income that there could be in an irrevocable trust.
Brenton Begley:
Right. Doesn’t have to be that way in an irrevocable.
Greg McIntyre:
It doesn’t, not if you disperse all the income.
Brenton Begley:
Right, and let’s talk about the-
Greg McIntyre:
With the Kessler ruling.
Brenton Begley:
That’s great. Let’s talk about the irrevocable trust, though. So the irrevocable trust is a trust that cannot be amended or revoked by the person who made the trust, the trust maker or the grantor. That concerns a lot of people when you first say it. Oh, I can’t change this thing. It’s set in stone once I make it. But I like to explain it this way. If I’m creating a game, for example, that we’re going to play, like a board game, if I can set the rules to that game, well, I still have a lot of control, even if I can’t change those rules when we start playing.
Brenton Begley:
Can’t change the rules and you start playing the game. But if I get to make the rules, then I get to set up a lot of control.
Greg McIntyre:
You mean even with an irrevocable?
Brenton Begley:
Even with an irrevocable trust.
Greg McIntyre:
Even after I die?
Brenton Begley:
Right. So it takes a lot of forethought to make sure you retain control when you have that irrevocable trust or where you have some sort of control, but you have to know you can’t change it once you make it unless-
Greg McIntyre:
Right.
Brenton Begley:
Unless, everybody-
Greg McIntyre:
All parties agree. All beneficiaries, grantors, trustees agree.
Brenton Begley:
That’s right. You can pretty much do anything to an irrevocable trust if everybody agrees.
Greg McIntyre:
Sure. So it is amenable.
Brenton Begley:
So it’s not technically irrevocable. Under the uniform trust code, which North Carolina has adopted, thankfully you can do just about anything as long as everybody agrees.
Greg McIntyre:
Sure.
Brenton Begley:
So in practice, when-
Greg McIntyre:
[crosstalk 00:05:28]. So an irrevocable trust, it’s your vote. You can’t revoke it unless you can.Brenton Begley:
Unless you can.
Greg McIntyre:
And everybody agrees.
Brenton Begley:
But in substance, for a lot of different trusts that are made, if you have a bunch of parties, this is why it’s important to pick the right people to be on your trust. You have a bunch of parties, at least one of the people might not agree. Right? So you can always amend it also, if you need to-
Greg McIntyre:
Sure.
Brenton Begley:
… through the court system, but we want to try to prevent that sort of thing. It’s one of the reasons why you set up the trust. That brings me to one reason why you would either have revocable or irrevocable trust is you might not want to go through probate. We deal with probate cases all the time. We have a bunch of probate cases. We help people through that process, that long, arduous, expensive process and-
Greg McIntyre:
Wait a second. Probate?
Brenton Begley:
Right.
Greg McIntyre:
What the heck is probate? I like your tie, by the way.
Brenton Begley:
Thank you.
Greg McIntyre:
Is that the scales of justice on your tie?
Brenton Begley:
This is the scales of justice.
Greg McIntyre:
Are you going to court today?
Brenton Begley:
I am going to court. That’s why I have the scales of justice on my tie.
Greg McIntyre:
That’s why. You’re going to bring justice to the court system.
Brenton Begley:
That’s right.
Greg McIntyre:
I used to tell some of my clients, “You don’t want justice, because if you got justice, it wouldn’t be a good thing.”
Brenton Begley:
That’s right, because it has to balance out, baby.
Greg McIntyre:
I’ll do my best today as an attorney, but you don’t want justice.
Brenton Begley:
Well, we’re going to get justice today.
Greg McIntyre:
We’re going to get justice today. All right.
Brenton Begley:
Yes, sir. So probate. Probate-
Greg McIntyre:
So if I get my will done, and I’m passing everything through my will, how does it actually get … House does my house, how does anything that’s entitled asset, any real estate-
Brenton Begley:
[crosstalk 00:07:05].Greg McIntyre:
How does it get to my heirs? How does it get to my kids?
Brenton Begley:
Yeah. So probate is a default process. If I just have a will and I haven’t really prearranged any other assets to pass immediately to my loved ones, then everything has to go through probate because title has to change hands somehow, legally. To do that, you have to go through this system, the court system, and this process called probate, where you open up in estate and the executor or administrator is appointed, and they change title to the beneficiaries. But before that, they have to pay all the debts. They have to publish it in the paper, let everybody and their dog know, “Hey, if this person owes you money … “
Greg McIntyre:
So there’s a lien period from the first day you published that Greg McIntyre kicked the bucket-
Brenton Begley:
Right.
Greg McIntyre:
Okay. There’s a notice to creditors that’s published in the papers for four consecutive weeks and the county where I lived and died. Then I’ll wait. I have to wait 90 days. My estate has to wait 90 days. And that’s the lien period. That’s so creditors can attach liens to my property.
Brenton Begley:
Yeah, and that’s usually hugely important.
Greg McIntyre:
Immensely.
Brenton Begley:
All of that time, the predators had that opportunity to come in and make claims against the estate. A lot of people think to themselves, “Well, I’m not worried about that because I don’t have any creditors. I pay my bills.” But the problem that we see is most people who pay their bills, they rack up a bunch of creditors right before they pass away. Nursing home bills, hospital bills-
Greg McIntyre:
Healthcare bills for the last year of your life.
Brenton Begley:
Or Medicaid, if Medicaid paid out.
Greg McIntyre:
What if I needed long-term care? What if I needed nursing home care for a few years, couple of years? Many times, man, those bills are eight, 10, $12,000 a month or more.
Brenton Begley:
Yeah, a month.
Greg McIntyre:
A month. Many people spend down everything they made their whole life and lose their homes because of the high cost of nursing home care.
Brenton Begley:
Yes.
Greg McIntyre:
Very few, a small percentage of people have long-term care insurance. We’re not insurance agents. We don’t sell long-term care insurance, but we can from a legal aspect, even if you don’t have long-term care insurance, help protect your assets from the probate process and liens like Medicaid liens attaching. Because if you spend out your money and you don’t have the bankroll to pay for nursing home care, you’re going to have to roll to Medicaid to pay for it.
Brenton Begley:
That’s right because there’s two sides of this. If you roll the Medicaid or what if we help you protect those assets that you have and qualify you for Medicaid from the outset? It’s a system you paid into your whole life. So, hey, you can use that to pay for long-term care. So what if you came to somebody like us, you got qualified for Medicaid, and we protect the assets? Medicaid pays out for your long-term care.
Greg McIntyre:
That’s my money.
Brenton Begley:
Well, the other side-
Greg McIntyre:
I’m just taking it back.
Brenton Begley:
Exactly. But the other side of that is, and what we pay attention to, is Medicaid wants that money back.
Greg McIntyre:
Right.
Brenton Begley:
They want to get it after you pass away.
Greg McIntyre:
They went to get it from my house I spent 30 years paying off a mortgage to the bank for three times as much as I borrowed with the interest rate.
Brenton Begley:
Exactly. Exactly. In North Carolina, though, they’re limited in how they can go after those assets. They can only go out in the assets that are passing through the probate process.
Greg McIntyre:
It’s not an expanded recovery state.
Brenton Begley:
That’s right. We’re in a limited recovery state here in North Carolina. So that gives us the opportunity to say, hey, okay, if we protect these assets and you keep them out of probate, then we keep them out of the hands of Medicaid being able to recover whether or not you plan ahead and preserve those assets and then get on Medicaid. Or if you didn’t plan and you have to be-
Greg McIntyre:
So an irrevocable trust can be a great tool there.
Brenton Begley:
Oh, absolutely.
Greg McIntyre:
An amazing tool.
Brenton Begley:
Yeah-
Greg McIntyre:
Because-
Brenton Begley:
We call it a Medicaid asset protection trust.
Greg McIntyre:
Sure. We can build a Medicaid asset protection trust. Hey, and that can help protect retirement benefits. It can help protect the home.
Brenton Begley:
Life insurance.
Greg McIntyre:
Life insurance, annuities, stocks, bonds, securities.
Brenton Begley:
Property.
Greg McIntyre:
A trust can really own anything. It can own an unlimited amount of accounts and assets, and the trustee controls those. Then you can still be a beneficiary of the income for the rest of your life. So this is not just … so not only could it help someone who’s scared that, “Hey, I want to make sure my assets protected.” What if I’ve got plenty of money? I’m not worried about it. How can a trust help?
Brenton Begley:
Yeah, if you’ve got plenty of money and you’re not worried about, well, you should be worried about it because the cost of long-term care is astronomical.
Greg McIntyre:
But why should I be? I’m going to play devil’s advocate. Why should I be? I’m a fat cat multimillionaire. That’s what I am. All right? Today. This is what I’m playing on the show. Why do I care if my money goes through probate or not? I’ve got a will. I wrote it myself because I’m a control freak.
Brenton Begley:
Right.
Greg McIntyre:
It’s what I do.
Brenton Begley:
Well, there’s a couple reasons. The first thing that jumps out at me is if it goes through probate, and you got a lot of money going through probate, everybody and their dog is going to try to challenge whatever you’ve written, especially if you wrote that way yourself. What’s going to happen in that estate-
Greg McIntyre:
You mean my kids could fight over my assets?
Brenton Begley:
Yeah.
Greg McIntyre:
My kids are sweet and loving. You think they’d fight over money?
Brenton Begley:
I bet everybody’s kids out there are good people. I would not argue with that fact, but what I’ve seen … Okay, I’ve done a lot of what they call will caveat cases, whether I’ve defended them or been hired to do them-
Greg McIntyre:
Does that mean you’re suing people?
Brenton Begley:
That means I’m suing people that are challenging a will.
Greg McIntyre:
You’re one of the ones who are suing people.
Brenton Begley:
That’s alive and well right now. That practice is suing. The challenged wills is alive and well in every county.
Greg McIntyre:
Surely, surely.
Brenton Begley:
There are hundreds, thousands of cases, will caveats in every county in the state-
Greg McIntyre:
Surely.
Brenton Begley:
… challenging wheels over less money than you would think, less property than you would think-
Greg McIntyre:
Right.
Brenton Begley:
… over the pettiest of things. There’s not a doubt in my mind that if that substantial amount of money was going through probate, the estate would be challenged.
Greg McIntyre:
So the will caveat, that’s setting up my family to fight over my assets?
Brenton Begley:
Yeah.
Greg McIntyre:
That’s it?
Brenton Begley:
Plus, if you don’t plan to keep it out of probate, too, you don’t plan to keep it away from a federal estate tax, which is a huge deal.
Greg McIntyre:
Yeah, so why am I worried about that?
Brenton Begley:
Well, the federal estate tax right now, the rate, and this rate won’t change, it’s 45 to 50% of your state is taxed.
Greg McIntyre:
So half my estate will go to the government?
Brenton Begley:
Yes.
Greg McIntyre:
If I hit over the taxable exemption limit.
Brenton Begley:
That’s right. So a lot of people right now aren’t too terribly worried about North Carolina.
Greg McIntyre:
I’m worried about it. I worked hard for that money.
Brenton Begley:
Right, right. Well, a lot of people aren’t worried about it because-
Greg McIntyre:
I don’t want the government to get half of it.
Brenton Begley:
They’re not subject to the tax right now.
Greg McIntyre:
I gave the government plenty of everything I made during my lifetime.
Brenton Begley:
Well, a lot of people aren’t worried because they’re not subject to the tax right now because you have to give over 11.18 million right now to be subject to that tax but they’re going to lower that.
Greg McIntyre:
I heard it might be lower then.
Brenton Begley:
In the threes. Yeah, three million. That still might seem like a lot for a lot of people, but this includes everything you own. Insurance, property, your home, money, retirement accounts, all that stuff.
Greg McIntyre:
If you start buying those things, you can get up there.
Brenton Begley:
Yeah, you can get up there pretty quick.
Greg McIntyre:
And they can take half of all that?
Brenton Begley:
Yes.
Greg McIntyre:
I don’t want that to happen. How can a trust help me?
Brenton Begley:
So a trust, an irrevocable trust specifically, can help take advantage of especially right now, before they change that right now … Make hay while the sun shines, right? We have 11.18 billion dollar exemption for a lifetime gift. We can take advantage of that now. So you can give up to $11.18 million, 22.36 if you’re a couple, to a trust and lock in that exemption right down before they change it.
Greg McIntyre:
So what if I don’t want to do an irrevocable trust? I want to still maintain control for the rest of my life. Can it go irrevocable when I die? My wife’s a little bit younger than I am. Okay? I’m pretty sure that I’ve lived hard. So I’m pretty sure I’m going to pass before she does. Okay? She jogs every day, eats fruits and nuts. So that’s pretty much, that’s her lifestyle. So, when I die before she does, can it go to irrevocable then, and be set up to take care of her for the rest of her life?
Brenton Begley:
Yeah, and-
Greg McIntyre:
And maximize her taxable exemptions?
Brenton Begley:
Yeah, you can basically give your tax exemption to her so she can double hers. At that time it becomes irrevocable, she still benefits from the income and everything that you all built together at that time would be protected and preserved from the estate tax-
Greg McIntyre:
[crosstalk 00:16:01]. Well, who’s going to be the trustee?Brenton Begley:
… from the estate tax when she dies.
Greg McIntyre:
I don’t trust my kids to be the trustee now, because I don’t know. I do, I trust them. I love them, but what about having a corporate trustee or some third-party trustee?
Brenton Begley:
You can absolutely do that.
Greg McIntyre:
Okay. Will you guys help me find a company or somebody who can do that?
Brenton Begley:
Yeah, or we can do it. It’s not unheard of to have your attorney act as that trustee.
Greg McIntyre:
Okay. So you guys have the option to do that?
Brenton Begley:
Yep.
Greg McIntyre:
In fact, that I think our firm manages quite a number of trusts right now.
Brenton Begley:
Yes, we do.
Greg McIntyre:
So, okay. Trusts can help me avoid probate, avoid a state tax.
Brenton Begley:
Avoid the cost of long-term care.
Greg McIntyre:
Avoid the cost of long-term care. What about ease? I’ve heard this probate thing can take six months, a year. Some of them, even two years to get through.
Brenton Begley:
Or longer.
Greg McIntyre:
Or longer. How’s that compared to a trust and the ease of trust administration versus probate?
Brenton Begley:
Well, trusts happen just instantaneously. So if it’s my trust, the moment my head hits the dirt, it is my beneficiaries’ assets, and all my trustee has to do … So if I’m the trustee, I’ll have a backup one appointed, all my new trustee has to do, or my trustee, if I appointed them during my life, all they have to do is give those assets away to your beneficiaries per the terms that I’ve already put in the trust. So it’s not going to be confusing or anything like that. All the directions are right there.
Brenton Begley:
All they have to do is write the check or sign the deed or whatever to distribute those assets.
Greg McIntyre:
Would you guys work with my trustee if I were to pass away?
Brenton Begley:
Oh, yeah, absolutely. So routinely, if we draft a trust for somebody or if someone has a trust, the trustee, after they pass away, come in and we tell them, “Hey, this is how easy it is” and we walk them through it. It’s not a hard-
Greg McIntyre:
We offer free consults to that, I think.
Brenton Begley:
Yeah, yeah.
Greg McIntyre:
We give a certificate.
Brenton Begley:
And here’s the other thing. Here’s the other benefit of trusts. So we talked a little bit about will challenges, will caveats. Trusts, it’s much, much harder to challenge trust. There’s an old saying that possession is nine-tenths of the law. So if it passes instantaneously to the beneficiaries and the trustee already passes it. So there’s this very, very small window of time in which you have to challenge a trust, as opposed to a will. After someone dies, you have three years that you can go back and challenge that will.
Brenton Begley:
Sure, you could challenge the trust after a certain amount of time, but those people already have those assets. It’s much, much harder to recover assets if you have that trust. So, that means that the person who made this trust, their wishes are much more likely to be carried out and not meddled with, through some type of litigation.
Greg McIntyre:
Okay. Okay. So you think it may be a little more sound, as far as challenges go?
Brenton Begley:
Exactly.
Greg McIntyre:
It’s more secure.
Brenton Begley:
We put a term in our trust-
Greg McIntyre:
And quicker. And quicker. It’s all just instantaneous. It’s a short period of time as opposed to over two years.
Brenton Begley:
And we’d put a term in our trust that says, “Hey, if you’re challenging this trust and you’re supposed to take on, of you’re a beneficiary and you decide to challenge this trust, and you’re not doing this challenge in good faith, then you lose your share.” So that incentivizes individuals taking on the trust, not to sue, unless they have a really, really good reason.
Greg McIntyre:
Right. Unless there’s just something nefarious going on inside of the trust. The trustee’s gone rogue or something like that. We have some special things built in the trust as well to protect against that, too, don’t we? If your trustee just went haywire and started spending the money on themselves, buying themselves lavish gifts, things like that, we have a trust protector in. What’s a trust protector versus a trustee?
Brenton Begley:
Well, number one, the trustee has a fiduciary duty to the beneficiaries, to the trust, to the grantor. If they violate that fiduciary duty, they can be held liable. So that’s number one. The trust protector is exactly like it sounds. They protect the trust. So if something nefarious is going on, they can come in and say, “Hey, look, this person is violating their fiduciary duty. This trustee is violating your fiduciary duty and needs to be removed for the benefit of the trust.”
Brenton Begley:
A trust protector also comes in and updates any type of Scribner’s errors in the trust, which is basically a drafting error in the trust, if it’s a material error and actually has an effect on the trust. They also can come in to amend … an irrevocable trust is needed to bring it into compliance with the law. So when a law changes, something like that, you need it in the trust to make it compliant.
Greg McIntyre:
Sure, sure. So, that can be a third party family member. Our firm routinely serves as trust protectors.
Brenton Begley:
That’s right.
Greg McIntyre:
The way we hear about something funky going on with the trust is, trust me, the family will let us know. Somebody in the family is going to let us know. We’ll investigate it and see if it’s credible or not. If we step in, remove the current trustee or put it in front of a court, something like that, to decide.
Brenton Begley:
Yeah. Another thing we do with our trust is a supplemental needs trust is built in. That’s extremely important to have just in case your loved ones-
Greg McIntyre:
What’s supplemental needs trust or special needs trusts? What are those things?
Brenton Begley:
Yes, special-
Greg McIntyre:
They’re a little different.
Brenton Begley:
Yeah, special needs trust is created by the individual who benefits from the trust. A supplemental needs trust is created by either a parent, a grandparent or a guardian. So that trust is built for if your beneficiaries become a special needs individual, meaning that they’re entitled to receive some type of means that’s a government benefit.
Greg McIntyre:
Disability.
Brenton Begley:
Which is another term for-
Greg McIntyre:
If they become disabled.
Brenton Begley:
Right, which is another term for disabled and able to get Medicaid or SSI.
Greg McIntyre:
So if I’ve got a kid, I have six kids. Let’s say one of them was to say-
Brenton Begley:
Right. They can’t have a bunch of assets and get SSI.
Greg McIntyre:
Or became disabled, because I don’t know what accidents are going to happen or what’s going to-
Brenton Begley:
In the future, right?
Greg McIntyre:
Yeah, I don’t know what’s going to happen. So I can’t predict the future, but I want to plan for it. So what would that supplemental needs trust that’s built into every will and trust that we draft, what is that? What’s that do?
Brenton Begley:
Yeah, so they can’t have a bunch of assets and still qualify for their lifetime benefit Medicaid-
Greg McIntyre:
Like SSI?
Brenton Begley:
Yeah.
Greg McIntyre:
Or SSEI?
Brenton Begley:
So then the important-
Greg McIntyre:
SSI.
Brenton Begley:
The important function of the special needs trust, or the supplemental needs trust, is to allow them to receive their inheritance. So as much inheritance as you want to leave them-
Greg McIntyre:
IN the trust?
Brenton Begley:
In that trust-
Greg McIntyre:
[crosstalk 00:22:50] and not have that governmental benefit.Brenton Begley:
That’s right, and not kick them out of their lifetime governmental benefit, which they’re entitled to.
Greg McIntyre:
Which, SSI comes along with it, a Medicaid healthcare proponent as well, component as well.
Brenton Begley:
Right.
Greg McIntyre:
Not proponent, component, because sometimes there’s a lot of elevated healthcare costs as well and how are you going to pay that. Right?
Brenton Begley:
Right.
Greg McIntyre:
So it can hold your inheritance, and the trustee can still Dole out that money to purchase things for that person.
Brenton Begley:
Yeah, anything that SSI or Medicaid is not covering, it can be covered by this supplemental needs trust just in general. There’s some regulations and the rules on that. If you have one, it’s best to go over those in detail before you spend from the trust.
Greg McIntyre:
Sure.
Brenton Begley:
But generally, it’s meant to provide support and income money or resources over and above what those governmental programs are already paying out.
Greg McIntyre:
Right. Agreed.
Brenton Begley:
Right. So to recap, what we love about trusts is how flexible they are, how beneficial they can be for our clients. Number one, to avoid probate. Probate is a big deal. You don’t want to have to go through it. You want to avoid that if you can. If you would truly love your loved one, that you don’t want them to go through that. You want to avoid the possibility of some type of estate tax. It’s huge. Huge, huge, huge, and give generation skipping transfer tax, all that stuff, a trust can help you prevent from dealing with that.
Brenton Begley:
Hey, if you want to protect your assets, just generally and possibly qualify for some type of long-term care benefit. Given that 70% of individuals over 65 needs some type of long-term care at some point in their lives, that’s huge. What else confronts do?
Greg McIntyre:
It can help me write a story. If there’s anything I love is sitting around the fire, telling a good story, a good, long story. Okay?
Brenton Begley:
I’m with that.
Greg McIntyre:
I might not trust my grandchildren at the time to get a bunch of money at 18. That might ruin them, spoil them.
Brenton Begley:
Right.
Greg McIntyre:
The key is, is to instill a work ethic while also giving them a better bottom lot in life than you had. For your children and grandchildren, great grandchildren, and everything, trusts can allow you to distribute the money in a discretionary way to make sure they go to college. Then just say, perhaps once they’ve gotten a little more education life experience under their belt, to add on, or to start distributing maybe so much for a year, maybe say 10% a year at 25 and 35 until it’s exhausted.
Greg McIntyre:
So we use smart distribution tactics, as opposed to simply outright giving it to them, free of trust. So that can really help shape a family, I think, the right way as opposed to cursing them with too much money or-
Brenton Begley:
Right, yeah, because that that inheritance might go to a Maserati instead of tuition.
Greg McIntyre:
I love a Maserati. But I’d love my grandkids to go to college more. Okay, so this has been the Elder Law Report. Thanks so much for listening. We’ll see you next week.
Brenton Begley:
That was pretty sweet.
Greg McIntyre:
Thanks for watching. Hey, you did a great job.
Brenton Begley:
Thanks, man. I didn’t laugh the whole time.
Greg McIntyre:
This is the after show. Huh?
Brenton Begley:
I didn’t laugh the whole time.
Greg McIntyre:
You didn’t laugh. We tried to record this last week, and he laughed for 10 minutes straight. I don’t know why. I can be funny. You know what? I thought it was a pretty good question and answer, too.
Brenton Begley:
It was.
Greg McIntyre:
I liked the use of the third-party client. Right? I had to be a good old boy.
Brenton Begley:
Yeah, you did.
Greg McIntyre:
A little bit, but-
Brenton Begley:
It’s good.
Greg McIntyre:
Yeah. I think I brought out all the-
Brenton Begley:
Well, good old boys are-
Greg McIntyre:
We covered a lot of issues.
Brenton Begley:
Good old boys are honest.
Greg McIntyre:
They are.
Brenton Begley:
That’s [crosstalk 00:26:32].
Greg McIntyre:
Good job, man.
Brenton Begley:
Thanks.
Greg McIntyre:
You must be an attorney.
Brenton Begley:
Oh, yeah. Pretty good one, too.
Greg McIntyre:
Hey, we’ll see you next week with the Elder Law Report.
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.
Related Articles:
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:
Please don’t wait ‘til it’s too late. Call McIntyre Elder Law today.
IN PERSON . VIDEO CONSULT . PHONE CONSULT
Estate planning and elder law attorneys Greg McIntyre and Brenton Begley explore the ins and outs of estate planning from Foundations to Trusts.
Related Articles:
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:
Please don’t wait ‘til it’s too late. Call McIntyre Elder Law today.
IN PERSON . VIDEO CONSULT . PHONE CONSULT
