ESTATE PLANNING

PRUITT ZABKOWICZ S.C. SERVICE AREAS

Here at Pruitt Zabkowicz S. C. we assist our clients with their Elder Law needs.  Whether it is through updating their estate planning documents, assisting them with their living situations, protecting assets in the event they need assisted living or nursing home care, we can ensure that the elderly are properly taken care of, assisting them in their later years in life.

Elder Law

Here at Pruitt Zabkowicz S.C. we can assist you with your trust administration needs. Similar to a probate, a Trust administration is where the Successor Trustees administer a Trust according to the Grantor(s)’ desires. The Successor Trustee will pay off the Trust debts, pay taxes if necessary, and pay out the beneficiaries. One of the benefits is that there will likely be no court involvement with the process, unlike a probate.

Trust Administration

It is crucial to have the assistance from an attorney trained in this area of practice in order to protect and preserve the maximum amount of assets.  A Wispact Special Needs Trust can help preserve assets in a controlled administered manner for clients who are on SSI or Medicaid benefits.  Another important tool for clients who are looking to protect as many assets as possible while qualifying for Medicaid benefits is the Medicaid Asset Protection Trust.  What is it?  The Medicaid Asset Protection Trust is an irrevocable trust that is created and funded with assets that the clients would like to protect for future generations.  The Trust is irrevocable meaning that it cannot be amended or changed. Also, because the transfer of the assets into the Trust is considered a gift, or a divestment, the creators must be healthy for 60 months after the transfer. Once the 60 month time period is up, the Trust and the assets inside of it are considered unavailable and if that client needs Medicaid benefits, they can qualify. 

WISPACT and the Medicaid Asset Protection Trust

What do you do when your spouse has an unfortunate set back and has to enter an assisted living facility or nursing home? Visit your attorney who is trained in Title XIX asset protection.  The last thing you should do is panic or worry about the potential expenses that could occur from their stay. With Title XIX, the community spouse (the healthy spouse) is entitled to keep a certain level of countable assets, which is determined initially at the first date of institutionalization. Countable assets include checking accounts, savings accounts, investments, life insurance policies, etc. The healthy spouse is entitled to keep between $50,000.00 and $126,420.00 of countable assets. This does not include the homestead, any pre-paid funerals, one vehicle, or the healthy spouse’s retirement or IRA accounts.

For a single person, the following assets are exempt or unavailable for Title XIX purposes: any prepaid burial policies, one vehicle, and the homestead (if the person is living in it, expresses an intent to return home, or if the house is listed for sale). All other assets are considered available. For a single person to be financially eligible for Title XIX benefits, their countable assets must be below $2,000.00 in the month of application. If the Title XIX applicant is above that threshold, and he/she would like to preserve assets, there are certain strategies that can be utilized to ensure that becomes possible.

Title IX and Asset Preservation

Unlike probate, the funds can be distributed to persons you choose after death without giving notice to all interested parties.  No relatives need to know anything about your wealth distribution.  The only ones who are entitled to a copy of the trust are the trustees and the beneficiaries.  Unlike a will, it does not need to be filed with the Probate Court.  

Trusts Keep Distribution Private

Having a will is very important in order to dictate who receives assets after your death.  If you die with no trust or no will then distribution takes place according to intestate succession in the state statute.  This can have unintended consequences and trigger assets being left to estranged relatives that you do not want as your beneficiaries.  Even if probate is avoided, the will can direct who will be responsible for paying the final bills and distributing the assets to your beneficiaries according to your wishes.  An attorney can draft an appropriate will crafted to your wishes that stands up in court.  The self-authentication contained in the will by an attorney helps provide this clout.  

Wills

A general and durable power of attorney is a document in which a person designates another person to manage and conduct all of his or her financial affairs should that person become incapacitated.  This power of attorney designation is revocable and you can change the appointed agent in the future should you desire to do so.  It is an effective document that an agent can use once incapacity has taken effect or it can be drafted to become active immediately, but it can only be used up until the time of death.  At that point, a will would take over unless a living trust has been drafted.  

In today’s society, banks and insurance companies are very protective of their clients’ assets.  In many years past, it was a little bit easier to manage a loved one’s financial affairs when they became incapacitated. In today’s world with all of the protective measures needed by the various financial institutions, it is essential to have a general and durable power of attorney that designates the appointment of an agent to conduct all of your financial affairs.

The document is meant to be a general and broad power so that your appointed agent can fully handle your financial assets in all capacities.  Such powers include the power to acquire, dispose and contract on your behalf, the power to manage real and personal properties, to collect and transact business of whatever kind or nature, the power to execute instruments including the power to deposit, withdraw and invest and many other powers related to the financial matters that you may have.

Powers given to the agent for gifting purposes should be discussed in detail with the attorney who drafts your general and durable power of attorneys.  There are varying levels of gifting that should be discussed and explained prior to the execution of the documents.  The powers given to the agent can relate to gifting in general as well as divestment and Title XIX power gifting.

The gifting power given in a power of attorney can be a great tool to help with future divestment of your assets.  Divestment of your assets in order to qualify for future Title XIX benefits may be allowed if legal guidelines are followed.

Your power of attorney should be a person who you can trust with your assets.  Typically, it is a relative or close friend that is close to you and understands your financial needs and our abilities.  If you do not have friends and relatives in the area that wish to be a power of attorney for you, it may be necessary to appoint someone in a professional nature to handle your finances through this appointment.  

General and Durable Power of Attorney

(Financial Power of Attorney)

A Health Care Power of Attorney is a document that allows a person to dictate who will make important health care decisions if you become incapacitated. For purposes of executing the document “incapacity” exists if two physicians or a physician and a psychologist who have personally examined the patient sign a statement that specifically expresses, in their opinion, that the person has a condition in which they are unable to receive and evaluate information effectively or to communicate decisions to such an extent that they may lack the capacity to manage their health care decisions.

This document gives the person whom you specify broad powers to make health care decisions for you.  It is revocable and you can change the health care agent designation if you so desire in the future.  

Once a person becomes incapacitated it is often the case that a person needs to be moved from a hospital to a nursing home.  This unfortunately cannot happen unless the patient has previously designated a health care agent or a guardian has been appointed by the courts to make health care decisions about the patient.  Consequently, one can avoid the whole guardianship process if a Health Care Power of Attorney is appointed to make health care decisions.

It is important to use an attorney to draft the Health Care Power of Attorney because an attorney can draft the power to vest in your agent instead of the health care provider or doctor.  Also, the lawyer can draft HIPPA Law exception into the document.

Health Care Power of Attorney

The trust can follow you to whatever state you move to.  Unlike a will, the trust assets that you acquire in different states and many foreign countries can simply be titled into the name of the trust or have the beneficiary designation changed to the name of the trust.  Consequently, you avoid probate in those states also with the help of your revocable trust.

Trusts Have Better Mobility

For the wealthier clients, hundreds of thousands of dollars can be saved by having a trust.  To determine if a trust helps you avoid unnecessary taxation, add up all of your assets, including all real and personal property, retirement accounts and other assets.  If the amount is over $12,060,000.00, then you need a trust to avoid unnecessary taxation.  Amounts over that will be taxed at a high percentage.  The joint revocable trust between spouses can double your death tax exemption to over $24,120,000.00.  

Trusts Help Avoid Taxation

The age of receipt for children and beneficiaries can be controlled better with a trust than with a will since assets with beneficiary designations can be left to the revocable trust and be distributed according to the age specified in the trust instead of passing directly to a child at the age of 18.  Life insurance is a good example of this.  When a beneficiary of the insurance is changed to the trust the money flows through the trust and the trustees can hold it until a certain age for distribution to the beneficiaries.

Trusts Provide Better Control of Distribution

There are several advantages to having a Revocable Living Trust.  One of the main benefits to using this estate planning tool is that it helps you to avoid probate.  Probate is statutory and a court-controlled process by which a deceased person’s wealth is distributed according to a will or to heirs according to statutory determination.  Typical probate costs can range from $5,000.00 to $10,000.00 and beyond.  By avoiding this process, the cost savings are obvious.

Revocable Living Trust

Trust can create specific self-directed trusts for your beneficiaries protecting  their assets from creditors and divorcing spouses.

Trusts Provide Better Protection For Beneficiaries