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Estate Planning Gone Wrong

A Revocable Living Trust is often used to complement a Will. Rather than only having a Will, the Revocable Trust generally avoids the expensive and costly Probate process. In Florida the fee the Florida Legislature has deemed as reasonable is 3% of the total estate.  The Revocable Living Trust also generally protects the assets from most creditors of the estate. A Revocable Living Trust enables your beneficiaries to receive your assets sparing any complications. However, if the Revocable Living Trust is not properly funded, then it would not do any good. Funding the trust is simply the process of transferring assets to it....

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Alzheimer Association Presentation

I recently presented to a group of caregivers at the Annual Alzheimer Association Conference at FIU in Miami.  I learned a couple of things. Chief among them is that most caregivers are unaware of advanced directives and the need to have them in place. The consequences of not having a Power of Attorney and Healthcare Surrogate is guardianship, which is prohibitively expensive.  ...

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Common Estate Planning Mistakes

An approximately$30 trillion transfer of wealthis currently under way in the U.S. as aging baby boomers pass their assets to successive generations.  This transfer, together with the recent increase to the lifetime federal estate and gift tax exemption (to $11.18 million in 2018), has created a favorable situation for U.S. citizens and residents seeking to transfer wealth to their loved ones during lifetime and at death. Despite the encouraging estate planning horizon, we still see many who make common mistakes which can thwart their intentions. Dying without a will For individuals who are unfortunate enough to die intestate (without a will or living...

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Countable Asset in Medicaid

What exactly is exempt from Medicaid as a countable asset? The answer is really quite simple: anything that is a non-countable asset is then a countable asset. I am not trying to be funny or clever, but it is easier is to define all assets as countable, except for the non-countable. So what does Medicaid consider as non-countable. Well, essentially it is critical assets of your life that you need in order to survive, such as your home, car, and retirement monies. Pre Paid Burial contracts are also non-countable (because Medicaid does not wish you to become a burden to...

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Rental Property and Medicaid

Rental Property is a common issue with Medicaid Planning. Some applicants may have a rental property. Medicaid does not treat the property itself as an asset, only the income from the net rental amounts. This means the gross rent, minus the HOA, mortgage and any other costs is then counted as income for the applicant. The purchase of a rental property is also a Medicaid Strategy in that a countable asset as money, is transferred into a non countable asset as a rental home. The hard part is the Recovery associated with the rental property. An extra step needs to be taken...

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Personal Injury and Medicaid/SSI

Personal Injury settlements could be a little difficult. The difficulty is that while the IRS does not recognize the settlement for tax purposes as income, Medicaid does recognize it as an asset. The most convenient planning technique is to create a Special Needs Trust for the Personal Injury Settlement. I handle about three to four SNT’s per month for clients receiving a personal injury settlement that are on SSI or Medicaid. A Special Needs Trust is a unique irrevocable trust whereby the money is not counted as an asset for the individual, but the money could ONLY be used for the...

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Joint Accounts

Joint bank accounts are usually done as a means of DIY Estate Planning. The adult child places themselves on the parents account as a technique to avoid Probate. Unfortunately, from a Medicaid standpoint this invalidates the gifting prohibition because the Medicaid applicant “gifted” half of the account to the adult child. This would need to be undone, meaning the adult child removed from the account, and then a true Medicaid strategy employed for the cash in the account. ...

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Advanced Directives

I had a conversation with a potential client last week regarding the issue of Advanced Directives. Specifically, the potential client was telling me that he can make his intentions known through his Will, so my services would not be needed. As much as I tried to explain that it does not quite work like that, the potential client would not accept the reality of the situation. Then the Miami Hospital staff was confronted with a very unique circumstance when someone had tattooed their intentions on their chest!!  Unfortunately that is NOT the proper method of having Advanced Directives, and thus the...

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Complete and Truthful Disclosure

Something interesting happened this week while discussing an estate plan for a client with adult children. The conversation was focused on how to divide the estate and distribute to the children. The client began the conversation with the statement that all of his adult children and doing very well with well established careers and good earnings. About an hour into the conversation it became apparent that one child could not keep a job for more than 8 months and he does not earn enough to support his family. The point of relating this story is that when you sit with your...

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