Almost everyone has heard of a Power of Attorney (POA), but not everyone actually understands what a POA is, or why having one is important. A POA is a written document that allows you to legally assign another person to do specific acts for you. This can be especially important if you are getting older, leaving the country, or are otherwise indisposed.
Almost everyone has heard of a Power of Attorney (POA), but not everyone actually understands what a POA is, or why having one is important. A POA is a written document that allows you to legally assign another person to do specific acts for you. This can be especially important if you are getting older, leaving the country, or are otherwise indisposed.
A revocable trust, sometimes called a “living trust” or “family trust,” is one of the best tools for transferring property from one generation to another. The proper use of a revocable trust can provide safety and security during a person’s lifetime, so that if they are incapacitated, there is already a person and structure in place to take care of their financial affairs.
A revocable trust can be changed at any time. A revocable trust does not offer creditor protection if you are sued. All of the trust assets will be considered yours for government benefit purposes, and all assets held in the name of the trust at the time of your death may be subject to state estate taxes, federal estate taxes, and state inheritance taxes.
There are many advantages to a revocable trust. For one thing, it allows you to plan for mental or physical disability. Assets held in the name of a revocable trust at the time a person becomes mentally or physically incapacitated can be managed by their designated trustee instead of by a court-supervised guardian or conservator. Assets held in a revocable trust also avoid probate. At the time of a person’s death, they will pass directly to the beneficiaries named in the trust agreement. Finally, by avoiding probate, your trust agreement will remain a private document and avoid becoming a public record for all the world to see and read. This will keep the details about your assets and who you have decided to leave your estate to a private family matter.
The Astill Law Office has provided high quality legal services for over 25 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.
One of the most overlooked aspects of the Medicaid program is the 5-year look-back period. A basic understanding of Medicaid is needed before you can understand the look-back period.
Medicaid is different from Medicare (although many people, by mistake, refer to the two programs interchangeably.) Medicare is an entitlement program paid for through payroll withholding. Medicaid is a form of social welfare designed to help people in need. Medicaid is a federally subsidized program administered by each state and the rules and benefits can and do often vary by state. So if you read something about the Medicaid program in California, the chances are it could be different in Utah.
As a social welfare program Medicaid is designed to help pay for long-term care (in home or in a nursing facility) once an individual’s funds and assets are used up. In simple terms, if you have $200,000 in savings, you are expected to use those savings to pay for your care – once your savings are gone, then Medicaid will kick in. In Utah, you can only have about $2000 in the bank to be eligible for Medicaid. Medicaid will look at all of your assets, including your house (for which there are special rules) in deciding your eligibility.
Many people try to become eligible for Medicaid by giving away all or part of their money and property. Federal and State governments are wise to this and they created a penalty so that you can’t give everything away to your family and shift the burden for your care to the government. The penalty is that you could be ineligible for a period of up to five years, if you give away money or property. This is the 5-year look-back period. If you give everything away in 2014, you might not be eligible for Medicaid until 2019! That’s a pretty stiff penalty!
Here’s an example: if you had $100,000 in the bank and you gave it to your children just as you were checking into the nursing home, you would not be eligible to receive Medicaid benefits to pay for your care for up to 5 years. This is a horrible result and therefore a horrible strategy! Who will pay if Medicaid won’t? You can hope that your children will, but if you really gave your money away, they wouldn’t have to.
I have several clients a month call asking about this very thing. They tell me they want to give their house, car and cash to their children so they will be eligible for Medicaid. I always give the same answer – DON’T DO IT!
The good news is that there are some planning techniques using trusts and other tools you can use to avoid this period of ineligibility and to be able to pay for your care. But in all cases, it’s difficult for people because you truly have to give up ownership or control of your money or property.
REMEMBER THIS: If you give away your money and property so that you can get Medicaid, you will be subject to the look-back penalty for up to 5 years. You should always consult with a lawyer specializing in Estate Planning and Medicaid transfers before doing anything that could impact your eligibility for Medicaid.
The Attorneys at Astill Law Firm have been specializing in Estate Planning, Trusts and Wills and Medicaid planning for over 30 years. If you have questions about Medicaid or Estate Planning in general, call our offices at 801-438-8698.
Below, we have addressed a few common misconceptions about estate planning. We have seen these misconceptions cause damaging effects in estate planning, and we encourage individuals to work with an experienced estate planning attorney to learn more about estate planning and avoid costly mistakes. Specifically, here we clarify a few things about taxes, joint ownership, and powers of attorney.
TAXES
Many people believe that the State and Federal government have some automatic right to take a part of your estate at death. The state and federal governments actually do not have an automatic right to come in and tax or take part of your estate at death. In fact, in the State of Utah, there is no inheritance tax of any sort. Additionally, the Federal government now exempts all estates from any gift or estate tax if they are under approximately $5.3 Million. That means that you can probably pass all of your assets to your designated heirs without tax, unless your estate exceeds $5.3 Million. Even then, if you are married and properly plan, this amount can be increased to $10.6 million.
JOINT OWNERSHIP AND CHILDREN
Many people have placed their children’s names on bank accounts or even their homes in an effort to try to pass their property on without tax or probate. The legal effect of this can be disastrous for two reasons. First, when the children or young adults come into possession of the property, they might do something disastrous. Second, if the children have and judgments against them or file for bankruptcy, their creditors have the right to satisfy their debts from jointly titled assets. That means you could end up purchasing your property back from your children’s creditors. You should never place your property or accounts in joint ownership with children.
POWER OF ATTORNEY
Some people believe they do not need a will or trust because they have a power of attorney. This is simply untrue. A power of attorney is not valid after someone dies, it does not dispose of property, and if it is not properly written, it might not even be valid if a person becomes incapacitated.
The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.
The laws of estate planning are confusing, and they are different based on what state you are in. Because of this, there are common, reoccurring misconceptions, especially when it comes to wills and probate.
Probate
Many people have unreasonable fears of the probate process. Utah has adopted the Uniform Probate Code, which provides for a very user-friendly approach to probate and administration of estates. Now, probate is nothing more than an administrative process to pass title to your assets to those persons entitled to them. It is not excessively costly, and it is protective of the heirs and beneficiaries of a person’s estate. You can avoid probate altogether through the use of revocable trusts. If you have a revocable trust, the probate process will simply serve as a backup plan if any of the assets do not get transferred into the trust.
Wills and Probate
Some people believe that if you have executed a will, the probate process is not necessary or applicable. That is not the case. The probate process is necessary to give effect to a will. By using a will, you can choose your executor (also known as a personal representative), transfer your personal effects, appoint guardians of minor children, and name the persons who are to receive all of your other property, including your house, bank accounts and personal effects. In addition, if used in combination with a trust, a will can be used to transfer assets to your trust.
The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.
One of the reasons people create living trusts is to reduce the likelihood of disputes among family members. Most estates do get settled without disputes, and those with disputes are often easily resolved because the trust, will, and beneficiary designations are clear. Unfortunately, sometimes family members are determined to be fractious, and in that case no amount of careful planning can completely remove the risk of a costly dispute. There are steps that can be taken to help resolve trust disputes, as exhibited through the case example below.
Case Example
One example of an estate plan that was not guarded from potential disputes was that of Lorraine. She had a revocable living trust, prepared by a lawyer in 2003. It contained straightforward provisions: most of Lorraine’s property was to be divided in half, with one half to go to her son Greg and the other half to her son Tony’s two children. Tony was named as successor trustee. Like many revocable trusts, the document included a “Schedule A” listing the assets that Lorraine was transferring to the trust’s name.
The first problems arose when Lorraine started writing on the trust document directly. In 2004, 2006 and twice in 2008 she wrote on Schedule A, indicating what should happen to some items of her property. Also in 2008, she had Tony’s wife write out an amendment to the trust. Lorraine died shortly thereafter, without having her trust looked at or formally updated by her lawyer.
After her death, one of her sons, Greg, removed some items from her house but did not account for them. Then he filed a civil lawsuit against his niece and nephew, asking the court to divide a piece of Lorraine’s property amongst the three of them. He also filed a complaint against his brother, Tony, alleging that Tony had breached his duties as trustee by not distributing the property in kind, had made allegations of theft against him, and had favored his own children over Greg in his handling of the trust.
At the very end of the trial, Greg and his niece and nephew struck a deal on the property. The judge found that Tony had not breached his fiduciary duty, but that Greg had initiated most of the problems by his own actions. She also ruled that Greg had to pay a total of $176,466 to the other parties for attorneys’ fees, and another $4,979.19 in costs.
Greg appealed, making several more allegations against Tony, including that Tony had mismanaged the trust. The Court of Appeals affirmed the original decision and awarded Tony and his children their requested fees and costs for having to respond to the appeal itself. In re Bower Revocable Trust, May 14, 2013.
The dispute was both expensive and time-consuming. In addition to approximately $200,000 in fees and costs, Greg was ordered to pay for Tony’s and his children’s lawyers in addition to his own legal fees for his own side of the litigation. The Court of Appeals decision was rendered more than four years after Lorraine’s death (and that was speedier than most similar cases in our experience).
The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.
If you are beginning the estate planning process, there are surely several questions swirling around in your head. When it comes to deciding on the terms of your will and then drafting it, there are many considerations. To address these issues about wills, we have organized some frequently asked questions below.
1. WILL A WILL GOVERN THE TRANSFER OF ALL MY ASSETS?
A will provides for the distribution of many types of property you own upon your death from small personal items to homes or land. However, some types of property are not distributed according to a will, such as insurance policies. A will can contain provisions with the direction that an individual receive a specific piece of property or it can direct that everything owed at death go to the same individuals. The important thing to remember is that, while a will can take care of many dispositions, there are some items which should be separately reviewed by an attorney to ensure they will be disposed of according to your wishes.
2. WHAT TYPES OF PROPERTY WILL NOT BE GOVERNED BY THE TERMS OF MY WILL?
A will does not dispose of any property you hold with another individual with survivorship rights, such as property owned as joint tenants with right of survivorship. Upon death, jointly held property automatically transfers to the other title holder. Similarly, property held in trust will not be affected by the terms of your will, as it is governed by the terms or the trust agreement. Also, annuities, life insurance, and retirement accounts provide for the payment of benefits outside of a will to a named beneficiary.
3. WHO SHOULD I APPOINT AS MY AGENT TO MAKE FINANCIAL AND MEDICAL DECISIONS ON MY BEHALF?
Choosing an agent who will make potentially make medical and financial decisions on your behalf is possibly one of the most important planning decisions that you will make. Your agent should be someone you trust and someone in whom you have confidence to act in your best interest, even in the face of stressful situations or outside pressure from other family members and friends. You can separate your financial decisions from your medical decisions. You can appoint one person to hold a power of attorney for financial decisions, and another person for medical decisions. Your agent does not need to be a family member. While not necessary, it may also be wise to appoint an individual who lives near you, in the event they need to act on your behalf when time is critical.
An experienced estate planning attorney can help you decide how to structure your estate plan so that all items will pass accordingly to your wished. The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.
Wills and trust are two of the most important and fundamental planning documents, yet an astonishing number of people still do not have one or the other. This is understandable, as it can be extremely stressful to confront one’s own mortality, and estate planning takes time and money. That said, there is no substitute for a solid estate plan created with an attorney’s guidance.
Do I Need An Attorney to Make My Will?
A will must be formally executed to be effective. Trying to draft or amend a will on your own is very dangerous. Sometimes the legal effect of your actions is much different than what you intend. Make sure you use a competent estate planning and tax attorney to advise you on your will and estate plan.
Why Can’t I Just Write-Up My Own Will?
There are so many things that can go wrong when drafting a will, from the wording of the document, to the required formalities for how it must be signed and witnessed before it can be valid. That is why it is best to have someone with experience and a working knowledge of the law help you.
In one unfortunate case, a father wanted to disinherit his son. He bought do-it-yourself will software and followed the prompts, listing his assets and making gifts to his other children. Unfortunately he omitted a small number of shares of stocks that he had bought many years earlier. Those shares had grown in value because of mergers and stock splits and were worth several million dollars. They made up the largest part of the man’s estate by the time he died, but because they were not provided for in the will, the stocks passed according to the law of intestacy. The son the father wanted to disinherit received almost $400,000 and blew through it in less than a year. If the father had an attorney draft the will, the attorney could have included the stock or included a residuary clause that would have disposed of any property the father forgot to mention according to his intentions.
To avoid having your estate go through intestacy or being distributed against your intent, get a competent Estate Planning Attorney to help you draft a proper will. Compared to the cost of lawsuits in the estate, inheritances going to an unintended beneficiary, or having an invalid will, the services of a good attorney are inexpensive.
The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.
There are several reasons to consider meeting with an attorney to begin drafting a will. Without a will, your assets, children, and personal possessions may not be properly protected.
What is a Will?
A will is a document signed by a person that directs how his or her property should be disposed of and who will receive it. It usually also directs who will administer the estate, and it can also be used to appoint a guardian of a minor child.
How can a will protect my children?
A will allows you to appoint a guardian and successor guardians for your minor children. There is no other way to assure that someone you trust will have the control over custody of your minor children after you die. For people with minor children, even if you have a very small estate, this is a very compelling reason to create a will.
With a will, you can also control how and when your minor children or young adult children receive their inheritance. Without a will, children who inherit your estate will receive their inheritance immediately if they are 18 years of age or older.
How can a will protect my spouse?
It is very important to sign a new will after a marriage. If this is not done, then the spouse will receive a share of your estate as if you died without a will. This can create some unintended results.
How can a will protect my personal effects?
If you die without a will, your personal effects are distributed to your heirs based on the rules of intestacy. With a will you can create the ability to prepare a special kind of list that describes who should receive your tangible items of property. With a will you can make sure that items with special meaning are distributed to the people you believe will most appreciate them.
Conclusion
If you die without a will, the state intestate statutes will control how your property is distributed. A will is an essential component of your estate plan, allowing you to appoint a guardian for minor children, appoint your Personal Representative, create trusts for you minor or young adult children, manage the transfer of your personal effects, and distribute your estate.
The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.