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Why do I need a Will if I have a Trust?

in Estate Planning, Probate, Tax Planning by Greg McIntyre Leave a comment

I had this question from a client the other day. We were signing a trust into being for a family and he looked at me and said, “Hey Greg, why in the world do I need a will when I am getting a trust?” Obviously thinking I had made a mistake or perhaps had gotten it wrong. The “it” being my job as an estate planning and elder law attorney. Not the first time I had gotten that question. I have in fact been told before that since I was drafting a will along with a trust, I must not know what I was doing. Well, trust me, I do (pun intended).

I chuckled a bit when my client hit me with that question and then I pulled out a piece of paper and began to draw and talk. I laid out the reason why I draft a will when drafting a trust and when done told him I needed to write about it because he was not the only one that had this question.

Avoiding the pain, expense, and month of Sundays it can take to probate a will through the courts is one of the main purposes and benefits of placing assets in a trust. Other benefits of trusts are asset protection,

Benefits of a trust:

Avoiding probate: Beneficiaries instead of heirs.

Liability protection: Separating yourself from your assets.

Ease of administration.

Limiting tax liability.

Endless options to control your legacy.

As beneficial as a trust may be I see estates all the time where assets the trust maker thought were in the trust were never properly placed into the trust. I also see many instances where checks come back in the decedents name, vehicles are not in trust, and more. All these things require a legal mechanism to change title to the heirs. A will is that mechanism. When I draft a will along with a trust I let the trust do the heavy lifting but create a will that I call a companion or pour-over will. Whatever is not in the trust is poured over into the trust for administration at the death of the trust maker. The will is essentially an insurance policy ensuring proper passage of your assets. So, for all those questioning why I may draft a will along with a trust it is because of my experience and I want to help your legacy to be realized. If I can assist you or your family with estate planning give me a shout.

https://mcelderlaw.com/scheduling/

Greg McIntyre

Estate Planning & Elder Law Attorney

You’ve been named Trustee what do you do now?

in Estate Planning, Probate by Greg McIntyre Leave a comment

Whenever a trust is created, the creator of the trust, also known as the “Grantor,” picks a person to administer the trust. That person is the “Trustee.” Often times, the Grantor and the Trustee are the same person. However, once the Grantor dies, someone must take over and carry out the wishes of the Grantor. If that’s the case, whomever the Grantor picked as Secondary Trustee, will succeed the Grantor as Trustee. 

So, let’s say you’re in this position. What do you do? 

Find out What the Trust Says

First thing you need is a copy of the trust. To effectively act on behalf of the trust, you’ll need to know what it says. Specifically, you’re going to want to know the following: 

Your powers as trustee

The beneficiaries to the trust; and 

How trust assets must be distributed

Depending on how the trust was drafted, it may be difficult to ascertain any one of the above. Therefore, it is generally advised that you let an attorney look over the trust to ensure proper compliance with the trust terms. 

Find Out the Trust Assets

The trust only control assets that it owns. Therefore, it is important to know what is in the trust before you know how to effectively administer the trust. There may not be a list of assets along with the trust. To find out what the trust owns, you may need to do some investigating. 

If the trust owns real property, there will be a deed for the real property that reflects the trust’s ownership. If the trust owns accounts, the statements for the accounts will come in the name of the trust. However, if the trust owns personal items, it may not be so clear. Usually, a trust will include an “assignment of personal property,” which conveys all the Grantor’s personal property to the trust. If that’s the case, and there’s a validly executed assignment of personal property, then the personal property will be considered to be a trust asset. 

It’s also important to note that many folks who create trusts will have a companion will that leaves everything to their trust. Therefore, if there are assets that they forgot to put into their trust during their life, those assets will flow into the trust at their death. 

Make Sure You File Taxes

Often times, a trust will owe or be required to file taxes. It is important that you work with a CPA to ensure that this is taken care of in a timely manner. 

Make Sure the Trust is Terminated 

Once everything has been distributed, the trustee has been adequately compensated, and all taxes have been filed and returned, the final step is to have the trust terminated. It has served its purpose and should, therefore, cease to exist as a legal entity. Termination puts everyone on notice that the trust has been adequately wrapped up. 

Conclusion

Being a trustee is an important position. You want to make sure you do the job correctly. If you have questions about trusts, Give us a call 704-259-7040. 

https://mcelderlaw.com/scheduling/
Brenton S. Begley

Attorney at Law

What happens if I pass with a Will?

in Estate Planning by morgan morgan Leave a comment

Wills can be great tools to ensure that your wishes are carried out after your passing.
Wills direct assets, those assets that are titled in your individual name be distributed to
whomever you wish upon your passing. They ensure that your concerns are carried through.
But what happens if you pass away with a will?


The individual named as your executor will need to get possession of your last will and
testament. You can inform your executor of the location of your will to make this process
simpler. You may also give them a copy of your will if you wish too but they will typically need
the original will.

The individual whom you have named as an executor will then need to take your Will
and a death certificate down to the clerk of court’s office. There may be a waiting period in
getting a copy of your death certificate. At the clerk’s office, they will open up a probate estate
and be issued with letters of administrator.


Upon becoming an executor they have the ability to access all your assets and make
sure that they are taken care of. Within 90 days your executor will need to submit an inventory
which has a list of all the assets are in your estate.


The executor will also need to publish a letter in the newspaper letting all creditors
know that if there is a claim that they need to file that into the estate file. Additionally, your
executor will need to ensure that any known creditors are notified of your passing.
The Tax man doesn’t go away after you pass either. Your executor will need to ensure
that your final tax return is filed, and any tax bill is paid. Your executor can hire a tax
professional to ensure that this done correctly.


After all creditors are properly notified and any legitimate claims are paid your loved
one can distribute the remaining assets to the individuals named under your will. At any step in
this process your loved one can consult with an attorney to ensure that all steps are being
properly administrated.


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.

https://mcelderlaw.com/scheduling/
Eric Baker,

Elder Law Attorney

828-233-5991

 

 

What is a Life Estate Deed (LED)?

in Estate Planning, Long Term Care Medicaid, Long Term Care Planning, Probate by Greg McIntyre Leave a comment

Life estate deeds can help protect a home and avoid probate. However, it is important to understand exactly how the life estate deed works before committing to it as a took to protect your home. 

A life estate is a lifetime interest in property. The interest can be measured by the life expectancy of the individual holding the life interest. Let’s say A owns a home and she wants B to live in that home, but she wants it to pass to her daughter C when B dies and not B’s heirs. A would give B a life estate interest in the home and make C the “remainderman”. This means that the home would be B’s for life, and when B dies, the home will be solely owned by C or C’s heirs. 

The holder of the life estate interest (B) can use and occupy the property. However, they are restricted from selling the property, and can be liable for laying waste to the property—as explained below. 

The holder of the life interest is also known as the “life tenant.” Because the life tenant has the right to live in the property for their lifetime, they are responsible for paying all expenses related to the property. They are also under a duty to keep the proper in good repair. Failing to upkeep the property can result in forfeiture of the property to the remainderman. 

This form of ownership avoids probate because the interest in the property held by the remainder man immediately vests in the remainder man upon the life tenant’s death. 

The life tenant can  be the current owner(s) of the home or a third party. Many people choose to keep a life estate interest in their homes and make their heirs the remaindermen on the deed. 

How Does Medicaid Treat this Deed?

A life estate interest in property is not a countable asset. That applies whether you have reserved the right to live in the property for the remainder of your life or if you stand to receive a piece of property at someone’s death because they reserved a life interest and left you as beneficiary. This can be a great way to preserve a piece of property, avoid probate, and qualify for Medicaid. However, it should be noted that when the life estate arrangement is created, that conveyance trigger the lookback period for Medicaid. 

For example, let’s say the applicant, Bob has a vacation home. Bob wants to leave his property to his daughter Jill. Bob reserves the right to live in the property for the rest of his life and gives Jill the right to immediately receive the property upon his death[2]. Because that transfer is a gift, it triggers the look back period. 

The question then becomes: “should I even use a LED”? The answer is it depends. The LED is a great pre-planning tool. If the client is confident that they can make it past the lookback period, then the LED is likely a good choice. If the client has an immediate need for long term care, then it may not be the tool for them.

https://mcelderlaw.com/scheduling/

Brenton S. Begley

Estate Planning & Elder Law Attorney

Accelerated Death Benefit 

in Articles, Estate Planning, Long Term Care Planning by morgan morgan Leave a comment

 

https://mcelderlaw.com/scheduling/

So, what is an accelerated death benefit? 

Most people I have talked to have never heard of the accelerated death benefit option that life insurance offers. The accelerated death benefit is most commonly referred to as a “rider” but it is simply a provision in most life insurance policies that allow a person to receive a set portion of their life insurance funds early. In other words, they may access it while they are still living. It is most commonly used when a person has a terminal illness that has resulted in a life expectancy of six months to two years. There are also some individuals with disabilities that can also qualify for this benefit, like long term care.This depends on the life insurance contract and what the provision includes. Generally, the benefit is between 50 to 80% of the policy value. Essentially, if the Doc gives you six months to two years to live, you can use a part of your death benefit for whatever is a priority in your life.

Who can request this benefit to be added to their policy?

Anyone can, if the insurance carrier offers the benefit and the underwriters approve it, can get it added on. Adding this benefit could raise your policy rates. Although there are many carriers out there that add this on for free.

When should you apply to receive this benefit?

Anyone who has a terminal illness or condition could investigate the Accelerated Death Benefit option. People with other conditions, such as Amyotrophic Lateral Sclerosis (ALS), those requiring artificial life support, or people with organ failure who are not transplant candidates may also qualify depending on their individual policies and state laws. This is also true in regard to long-term care, funds can be used to help individuals if policy and state laws allow.

What are the restrictions for the use of received funds?

There are usually no spending restrictions set upon the individual that has received the benefit. Therefore, individuals can use these funds for whatever they wish. For example, if individual wants to make sure that they have a good time before they pass, they could go on vacation with loved ones and create long-lasting, priceless memories. Or one might use the funds to pay bills and remove the financial burden of those bills off their loved ones. Either way, it’s up to that individual person and their needs.

This great and useful benefit is something to keep in mind if you are looking for a life insurance policy.  Understanding this benefit could help protect your legacy, create priceless memories, or help pay for care. It is important to plan for the future, but you already know that because you’re looking into life insurance.  Now you can get the most out of your life insurance by knowing all that it can do while you’re still alive.

Ryan Begley

Benefits Specialist

704-218-9223

Classic Car Trusts: Protecting Your Passion.

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

I was walking to a coffee shop today and saw this car driving down the road. The car was a 1965 Jaguar Type E Coupe. It passed me cruising slowly and then gently took a right turn and disappeared. It was a bit rainy today and the car was in pristine condition. The chrome shined and paint was magnificent. The rainy foggy day and that car fit perfectly as if it were at home on a London street. The owner of that car loves it. They put passion and care into its restoration and maintenance. It reminded me of some of my clients and the work I’ve done for them.

One recent client, whom I also consider a friend, has quite a few classic cars. They are some of his most prized possessions. They are more than cars to him, and they are more than investments. The value of the vehicles he owns has skyrocketed since he first purchased them. One was a gift passed down to him from his father. The family all glean enjoyment from their use from family outings to showings at car shows to a simple weekend drive to both enjoy the ride and show off the cars a little bit. I mean the growth in value of these vehicles are in the 1000’s of percent. Finding an investment that would keep pace with this type of growth in value would be nye impossible. My client and friend recently approached me about advising him on the best way to care for each vehicle and ensure its access to the family and that the vehicles easily stayed in the family while also allowing for my client to direct who gets what vehicle and the rules surrounding that transition. My answer was simple and one that I have been givig for a long time to my clients who have the good fortune of owning classic automobiles. The “Car or Auto Trust”.

What is an Auto Trust?

Answer: An Auto Trust is a specialized trust that specifically is designed to hold an automobile and allows the trust maker many options. The trust maker may desice he wants the collection to continue beyond his or her death and for the autos to be held for the use and enjoyment of the family while also allocating funds for the maintenance of these autos for the foreseeable future. The trust maker may want one or more of the autos to be spun off into separate sub-trusts upon the death of the trust maker and allow children or grandchildren to be in charge of the autos in these trusts. The child or grandchild may be granted permission to sell the auto(s) if they so choose if that is the desire of the trust maker. There can be many options to protect and control your most prized possessions for the use and benefit of your family if something happens to you. An auto trusts also avoids probate and the high costs and waiting periods associated with it. An auto trusts also gives an additional separation of liability and protection to the vehicles that have captivated our imaginations.

Why do I need an Auto Trust?

Answer: Beautiful simplicity just like the design of your car. Streamlined to fit your car perfectly and separate that asset. Isolating it and protecting it just like you would when parking your car in a crowded parking lot an Auto Trust allows you to set the rules for how your vehicle is handled if something were to happen to you. An idea might also be to set up an account or designate life insurance or another investment asset with the trust as the beneficiary to fund the trust with resources to care for the car for your family well into the future. You may wish a separate Auto Trust for each vehicle or of course we can design the Auto Trust to hold and pass all of your vehicles.

Why not put my vehicle in a general trust with all of my assets?

Answer: Liability!!! Like it or not, automobiles are deadly weapons and SHOULD NOT be placed in a trust with other investment and real estate assets. When placing an automobile in a general trust environment you expose your other assets to liability should there be a wreck or other accident.

If you would like to discuss crafting an auto trust for your prized auto or auto collection please contact me to set up a free consultation: 704-749-9244 or online at mcelderlaw.com.

Gregory S. McIntyre, J.D., M.B.A.

Estate Planning & Elder Law Attorney

1-888-999-6600

greg@mcelderlaw.com

Holistic Approach to Medicaid Crisis Planning and What Comes After.

in Articles by Greg McIntyre Leave a comment

When clients come to McIntyre Elder Law because one spouse is in need of Medicaid Crisis Planning, the focus is on the spouse in immediate need for nursing home care. With the average cost of nursing home care rising to $10,000+ per month, it makes sense that the “healthy spouse”, known as the community spouse, wants to take every step necessary to qualify their spouse for Medicaid. Oftentimes they set their own financial goals and planning needs aside. For the community spouse, what comes after crisis planning is just as important as the crisis planning was for the spouse in need.

During the Medicaid qualification and application period, both spouses are looked at as a unit for eligibility purposes. The spouse that is applying must be individually eligible, but the community spouse must also qualify financially to obtain Medicaid benefits for the spouse in need. The community spouse is allotted a certain amount of assets they can keep, which is known as the community spouse resource allowance. The community spouse must stay within the allowance up until the spouse that is applying has been approved for Medicaid. There are many planning options available to do just that.

Once approved for Medicaid, Medicaid foots the majority of the nursing home bill, but not all, and it can leave the community spouse short of the normal household income they are used to. It is vital that we consider the financial needs and future benefit eligibility of the community spouse during the crisis planning, but also afterward, as an extension to the planning.

The good news is, once the spouse applying for Medicaid benefits has been approved and is able to maintain individual eligibility, the community spouse is no longer subject to the community spouse resource allowance. This opens the door for a multitude of planning options and opportunities for the community spouse, which merits a holistic approach from a team of expert professions in the areas of estate planning and financial planning.

This is an opportunity for the community spouse to take the spotlight and focus on their financial health and plan for their own long-term care. The crisis planning may have repositioned some of the assets and tax qualified funds may have been converted to non-qualified funds. In some cases, this can be an ideal time to establish a Medicaid Asset Protection Trust for the community spouse to invest, or re-invest, in the name of the trust, where those investments are protected and made non-countable for Medicaid after 5 years. There are numerous other planning strategies that can be tailored to your individual situation. This is where McIntyre Elder Law and our financial planning affiliates can sit down together at the same table with you and craft a holistic plan that encompasses all aspects of your estate plan and financial wellbeing.

This holistic approach to is not exclusive to community spouses and should be considered by all individuals that aim to secure their future and prepare for their imminent long-term care needs.

Mary Kales

Benefits Director

So You’re an Heir…

in Articles, Estate Planning by morgan morgan Leave a comment

The passing of a loved one is always a difficult time for the family. The loss itself is catastrophic, but it can often be compounded by the many different and difficult decisions that need to be made. This is the time when you are least likely to want to think about your rights, but you can be irreversibly affected, during this trying time. 

We often talk about the probate process and the duties and responsibilities of the executor and administrator but what if someone else is qualified for this role? What rights and obligations do you have as an heir?

As an heir, you have the right to your share of the estate. The administrator/ executor owes a duty to ensure that the estate process is lawfully executed. However, if you live out of state or are busy with other projects you may not know what is going on in the estate.

As an heir, you are not responsible for any part of the administration. The responsibilities lie solely with the administrator/executor. It is their duty to provide notice to creditors. It is their responsibility to pay any debts. They are responsible for filing the final tax bill and ultimately distributing the funds to the heirs. Though they have these duties and responsibilities, the question remains if they will follow through on their obligations and administer the estate correctly. 

This is where an attorney can be a great option for you. At McIntyre Elder Law, we can represent you as a beneficiary. We will monitor the estate file to ensure that the executor/administrator is correctly managing the estate. Should anything be amiss, we can develop the best plan to rectify the problem and ensure that your interests are protected. This can provide you with peace of mind and will allow you to focus on healing after the loss of a loved one. 

We would love to talk to you about this or any other estate planning needs that you might have. Please contact us today to schedule your free consultation.

Eric Baker,

Elder Law Attorney

828-233-5991

 

How illegal bank policies hurt the elderly.

in Articles, Guardianships, Long Term Care Planning by morgan morgan Leave a comment

How illegal bank policies hurt the elderly. Client discussion about how his mother is being hurt by U.S. Bank in Charlotte. This is not isolated, however to U.S. Bank. We witness big bank policies hurting the elderly every day.

 

 

Greg McIntyre

Elder Law Attorney

888-999-6600

Fixed Index Annuity 

in Long Term Care Medicaid, Long Term Care Planning, Tax Planning by morgan morgan Leave a comment

What are fixed index annuities and how are they different from traditional annuities? Great question! Well, an indexed annuities performance is linked to stocks, such as the S&P 500. While traditional annuities have a guaranteed rate of return from the insurer or insurance company. Traditional annuities are great products if an individual wants to know exactly how much money they are going to get out of their investment over a certain number of years. An index annuity on the other hand is usually set up to where the rate of return is based on stock market performances. Here is where it gets really interesting. In a properly structured fixed index annuity the insurance company will usually put a floor of 0%, doing this protects the insured from losing any money. What does this mean? Well, this means that the insured will take advantage of the up side of the stock without taking any losses on the down turn. Essentially, it’s the best of both worlds! Now that being said, the insurance company needs to stay in business. They do this by putting a cap on how much the rate of return is, for example the insurance company may put a cap of 8.5% but the stock that the annuity is indexed to may outperform the cap and have a rate of return of 12.5%. The insurance company would profit off the additional 4%.

Fixed index annuities are great for retirement! An individual can fund an fixed index annuity a few different ways, they can make multiple payments over a period of time, make one lump sum, or they could simply roll over their retirement fund. The reason for the annuity dictates how someone like me will set the annuity up for retirement or for your future legacy. My job is to communicate with my clients and come up with a complete strategy to create, grow, and preserve their legacy and retirement. When you’re ready to start taking money out, you can convert your fixed index annuity balance into a stream of future income. These payments can last for a fixed period of time, like 20 years, or for the rest of your life. The amount you’ll receive depends on your account balance, your investment return and how long you want the payments to last; a longer period means smaller monthly payments.

Alternatively, you could also make a lump sum withdrawal or take all your money out at once, but this has some downsides. Annuities typically have a surrender period that lasts between five to seven years after you bought the contract. If you take out a lump sum withdrawal, the annuity company could charge this fee, which is usually around 7% of your withdrawal, though it may decrease each year you hold an annuity. Consider this surrender period before signing up as fixed index annuities are supposed to be long-term contracts. If you’re under age 59 ½, you may also be subject to a 10% penalty by the IRS for early withdrawals.

It is always important to plan ahead so the road to financial stability is laid out, having a map to success is extremely important. Annuities are a really useful financial tool to have in one’s preverbal toolbox. What most people don’t realize is that with new technology and medical advancements people are outliving their money, which is a huge concern. We all need to plan for success no matter what life throws at us. It is better to be prepared and not need it than to need it and not be prepared.

Ryan Begley

Benefits Specialist

704-218-9223

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