From the Internal Revenue Service’s (IRS’s) release of the 2024 lifetime exemption and annual gift exclusion amounts, to the Social Security Administration’s announcement of 2024 cost-of-living adjustments and a new final rule regarding the use of FinCEN identifiers under the Corporate Transparency Act, we have recently seen significant developments in estate planning, elder law, and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning, elder law, and business law practice.

More industries are increasingly using artificial intelligence (AI), and the legal field is no exception. News breaks regularly about new tools that utilize and incorporate AI technology. The outer limits of a machine’s ability to think and act on its own are unknown—AI creators have even expressed fears of its ultimate capabilities. 

The drawbacks of generative AI chatbots such as ChatGPT, Google Bard, and Jasper for the legal industry in particular include their inability to consider all necessary information when crafting legal documents and their collection and storage of private data, which could breach client confidentiality. As we recently showed in a case study, AI solutions are also significantly limited in their abilities to accurately draft estate planning documents. 

Despite these drawbacks, AI tools may offer some solutions to help legal professionals streamline their processes. Keep reading to learn how AI can help improve your productivity.

Millions of small businesses will need to file electronic reports to comply with the Corporate Transparency Act (CTA) starting in 2024. While existing businesses will have the entire year to follow the federal government’s new requirements, startup businesses will have to report their identities and officers much sooner. Keep reading to learn more about which businesses will be affected by the CTA and how Business Docx® has been improved to help your clients file their reports.

From the inclusion of property interests in a marital estate that are gifted during a marriage to a divorcing spouse, to a determination of the scope of immunity provided to nursing homes under Connecticut’s COVID-19 executive order and a new proposed rule that would extend the deadline for some entities to report beneficial ownership information under the Corporate Transparency Act, we have recently seen significant developments in estate planning, elder law, and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning, elder law, and business law practice.

By Nicole Ramos Takemoto, JD

In a society that increasingly embraces diverse relationships, unmarried couples are a significant and growing demographic. As legal professionals, we understand that the legal rights and protections afforded to unmarried couples differ significantly from those granted to married couples. This article explores three interconnected topics within estate planning for unmarried couples: the impact of becoming registered domestic partners, tax considerations, and the importance of comprehensive estate planning. By understanding these issues and taking proactive steps, unmarried couples can protect their rights, minimize tax liabilities, and ensure that their wishes are upheld.

From the Internal Revenue Service’s (IRS’s) announcement of a two-year transition period for the SECURE 2.0 Act’s Roth catch-up contribution requirement to the Equal Employment Opportunity Commission’s (EEOC’s) first settlement against an employer for the unlawful use of artificial intelligence to hire an employee, we have recently seen significant developments in estate planning, elder law, and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning, elder law, and business law practice.

Traditional estate tax planning often includes funding a credit shelter trust (also known as a bypass trust or family trust) up to the amount of a decedent’s unused estate tax exemption, then funding any assets in excess of the exemption amount into a marital trust for the benefit of the decedent’s surviving spouse. This type of planning was appropriate for many married couples who wished to maximize their remaining estate tax exemptions while leaving most assets for the support of a surviving spouse and deferring or avoiding estate taxation under the unlimited marital deduction.

By Phoebe Stone, JD, MA (Bioethics) 

When creating an estate plan for a married couple, there are many ways to plan for its division into marital and nonmarital shares upon the death of the first spouse. The circumstances and the client’s wishes (as informed by your professional guidance) will dictate the most appropriate design. For example, planning for couples of very modest means will likely include different choices than planning for high-net-worth couples; planning for an elderly couple in a decades-long marriage who have only shared children may look different from planning for blended families. To best serve your clients, it is critical that you understand the options available and are able to communicate the benefits and burdens associated with each option in ways your clients will understand so that your expertise can appropriately guide their choices.

From a Michigan jury’s decision that a document found in Aretha Franklin’s couch is her valid will to recent decisions regarding what constitutes reasonable accommodations for religious and disabled employees, we have recently seen significant developments in estate planning, elder law, and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

With wealth transfer tax exemptions at historical highs (in 2023, the gift and estate tax exemption is $12.92 million—$25.84 million per married couple), income tax planning is an increasingly important part of trust-based estate plans. This is particularly true when dealing with income tax-deferred retirement plans. Accordingly, beneficiary deemed owner trust (BDOT) provisions can lead to meaningful tax savings when applied appropriately within retirement trusts.

From the United States Supreme Court’s grant of certiorari of a constitutional challenge to a tax on unrealized gains, its recognition of a 42 U.S.C. § 1983 civil rights action by nursing home residents against federally funded nursing facilities, and its ruling that companies who register to do business in Pennsylvania consent to all-purpose jurisdiction, we have recently seen significant developments in estate planning, elder law, and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

Artificial intelligence (AI) has taken a giant leap forward recently, bringing what seemed to be the future into the present. AI programs are already transforming businesses by producing automated responses to customers, marketing materials, emails, and virtual education programs. You may be wondering about the effects of programs like ChatGPT on the estate planning industry. Could your job eventually be replaced by a machine? We put this emerging intelligence to the test to see if an AI program could create an effective trust. Keep reading to see the results of this experiment.

From the Ninth Circuit Court of Appeals’ ruling holding trustees and beneficiaries liable for unpaid estate taxes to the invalidation on constitutional grounds of a California statute requiring diversity in corporate board membership, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

World Elder Abuse Awareness Day is June 15, 2023. If communities can better understand elder abuse, folks can be better equipped to recognize it and take steps to prevent it. Elder law attorneys are in close proximity to seniors and are in a unique situation to oftentimes observe signs of elder abuse. However, are attorneys allowed to report such abuse?

The Medicaid Asset Protection Trust (MAPT) is an irrevocable trust used for Medicaid planning or asset protection purposes. After assets are funded into the trust and the look-back period has expired, the assets in the trust are non-countable for long-term care Medicaid eligibility. The MAPT has several aspects that result in tax advantages, such as being a grantor trust and having trust income taxed according to the Grantor’s income tax brackets instead of trust taxation rates. Other tax advantages that the MAPT can be designed with stem from retaining a limited power of appointment (LPOA). Let’s take a deeper dive into the LPOA.

Elder law is the area of law focused on issues that affect the aging population. While estate planning focuses on what happens when the individual passes away, elder law focuses on what happens while the individual is still alive. It’s lifetime planning. This can include helping clients with guardianship issues, addressing elder abuse claims, handling discrimination claims, planning for long-term care, obtaining government benefits, and helping with special needs issues.

A surprising result of the COVID-19 pandemic has been a surge in the formation of new businesses. New entities shop for legal services in the same way that they do for information technology, video production, and digital marketing services: they look for the best fit for the size and scope of their business. Because many small businesses cannot afford to hire a full-time attorney, you can serve as outside general counsel to more than one company and provide the legal assistance they will need to stay afloat. Read on to learn how to gain new clients and share your business law expertise as an outside general counsel.

If a homeowner stops paying their property taxes and the county forecloses on the home, what happens to the excess funds from the sale? Common sense might lead you to say that of course any excess funds would go to the homeowner, but that isn’t always the case. The Supreme Court of the United States (SCOTUS) recently heard oral arguments in a case where the county kept the proceeds from the sale for itself.

From the United States Supreme Court’s ruling on penalties for nonwillful Foreign Bank and Financial Accounts (FBAR) violations to the New York Court of Appeals’ broad reading of New York’s long-arm jurisdiction statute in a breach of contract case, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

A pooled trust is also known as a d4C trust because it is authorized by US Code 1396p(d)(4)(C). It is established and managed by a non-profit organization and is funded by the individual with special needs, for that individual’s sole benefit. An individual’s pooled trust is a subaccount within a master trust, a collection of other individual trusts. The managing entity oversees the collective individual accounts within the pool as a whole. A pooled trust entity will have its own joinder agreement; the terms of the trust are controlled by the entity.

The Medicaid Asset Protection Trust (MAPT) is a powerful tool used in elder law planning. The MAPT can be used both in a proactive planning case or in a crisis planning case. Let’s take a look at when the MAPT would be used in each type of case, and how a MAPT intersects with estate tax, gift tax, and income tax.

Modern technological tools make estate planning easier, but they present new responsibilities to keep your clients’ data safe. Because cybercriminals aim 43 percent of their attacks at small businesses, your law firm may be vulnerable without proper cybersecurity measures in place. A constant battle occurs in which hackers attack and IT professionals defend data and financial assets. Keep reading to learn helpful tips to safeguard your clients’ private information.

The Veterans Asset Protection Trust (VAPT) is a powerful tool that can protect assets while enabling the Grantor to qualify for needs-based VA-pension benefits. The VAPT is a nongrantor trust with the option to include a grantor residence subtrust. Why is the VAPT structured this way?

Storytelling is a powerful way to grow your law practice, especially if you can leverage the power of video. Eighty-two percent of global Internet traffic comes from video downloads and streaming. Providing valuable content through videos can build interest that will encourage viewers to become clients. Adding videos to your website and social media accounts will only be effective if you learn to do it right, however. Keep reading to learn the best storytelling techniques and video production tips.

How should a prior estrangement between child and parent affect the ruling in a guardianship case for the parent? This issue was recently litigated in an Indiana slip opinion.

Peggy, a 90-year-old Indiana resident, had three children – Randy, Terri, and Sherry. Randy and Terri also live in Indiana; Sherry lives in Florida. Peggy’s husband died in 2002 and thereafter her relationship with Terri became estranged. In 2003, Peggy executed a financial power of attorney, naming Randy as her agent and Sherry as her successor agent.

From the clarification of basis rules for assets held by irrevocable grantor trusts to the issuance of guidance by the U.S. Copyright Office for content generated by artificial intelligence, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

Caring for clients’ needs and keeping up with a full work schedule can take a heavy toll on an attorney’s mental and physical health. In fact, the rate of depression among attorneys is nearly four times higher than that of the general population. With the World Health Organization (WHO) celebrating its seventy-fifth anniversary on World Health Day April 7, now is a great time to prioritize your well-being. A stressful lifestyle can put you at risk for mental health issues and substance abuse, which are likely to negatively impact your practice and lead to malpractice lawsuits and professional disciplinary actions. Keep reading to learn effective ways to maintain your health.

Last month, the Washington State Senate approved Bill 5123, prohibiting a business from refusing to hire a worker due to a positive drug test that screens for nonpsychoactive cannabis metabolites. If it is signed, Washington, which has legalized the recreational use of marijuana, will join a handful of other states that have enacted similar legislation prohibiting adverse employment action for workers’ off-duty marijuana use. Although marijuana is illegal under federal law, an increasing number of states are decriminalizing marijuana use for medicinal and recreational purposes. As a result, workplace policies may need to be adjusted.

Elder law is an area of legal practice that focuses on the needs and challenges faced by seniors. One important issue that falls under this category is nursing home Medicaid eligibility. Medicaid is a government-funded healthcare program that provides medical assistance to certain populations, and it can be a crucial resource for seniors who require long-term care in a nursing home. However, Medicaid eligibility can be a complex and confusing process, particularly when it comes to nursing home care.

Starting January 1, 2024, millions of small businesses that form after that date will be required to report identifying information about their beneficial owners and company applicants to the federal government under the Corporate Transparency Act (CTA). The following year, businesses that formed before January 1, 2024, will also be required to meet the CTA’s reporting requirements. 

If you are an avid user of Elder Docx™, WealthCounsel’s state-of-the-art document drafting software, you’ve probably drafted a Medicaid Asset Protection Trust (MAPT). The MAPT is an irrevocable trust that protects assets from being counted for long-term care Medicaid eligibility. But did you know that the MAPT has a cousin, the Medicaid Family Protection Trust (Family Trust)?

The Family Trust, like the MAPT, protects assets from being counted for long-term care Medicaid eligibility. But, the Family Trust has also been designed to achieve optimal asset protection for both the grantor and beneficiaries. How is this asset protection achieved?

From the enforcement of federal tax liens against a trust found to be the taxpayer’s nominee to the United States Supreme Court’s ruling that highly compensated workers may be entitled to overtime pay, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

President Biden announced that the official Public Health Emergency (PHE) caused by COVID-19 will end on May 11, 2023.   What are the ramifications of this change for seniors?

1. Return of Medicare’s three-day rule

In recent years, technological breakthroughs have helped folks with disabilities—robotic limbs, telepresence robots, and platforms to assist with communication. These new technologies give some the ability to be more independent and lead more fulfilling lives.

Now, there is a new wheelchair that can be controlled by the mind. Someone that is paralyzed or without the necessary limbs to operate a traditional wheelchair can now strap an electrode-studded cap onto their head and control the direction of the wheelchair with their thoughts.

Written by Jeremiah W. Doyle IV, JD, LLM

Internal Revenue Code (I.R.C.) section 6166 allows an executor to defer the payment of the federal estate tax attributable to the interest in a closely held business. The deferred payments may be extended over a period of up to fourteen years and nine months following the death of the business owner. With an estate tax exemption of $12.06 million in 2022, many estates can pass free of federal estate tax, making a section 6166 election unnecessary for the value of a business interest included in the gross estate. However, with the estate, gift, and generation skipping tax exemption scheduled to be reduced to $5 million (indexed for inflation) beginning January 1, 2026, a section 6166 election may become valuable for more estates holding an interest in a closely held business. Thus, it is probably time to dust off a copy of section 6166 and review its complex and somewhat ambiguous provisions.

Experienced and effective leadership is a key component of long-term business success. However, only 35 percent of businesses have a formalized succession plan—a startling statistic considering that retiring Baby Boomers will comprise the largest exit from the workforce in US history. Whether you own your practice or advise business-owning clients, succession planning is vital to ensure a smooth transition. Keep reading to learn some top techniques and considerations to keep in mind.

If an individual receiving Supplemental Security Income (SSI) receives certain types of payments, those payments must be reported to the Social Security Administration (SSA) and their benefits may be reduced, often quite significantly. The most common distribution that would need to be reported is payment of income in the form of food or shelter, referred to as In-Kind Support and Maintenance (ISM). This type of income is any payment from a third party (including from a trust) for the necessities of life—food and shelter. ISM occurs when distributions are made not only for groceries, rent, or a mortgage payment, but also for basic utilities such as natural gas, water, electricity, sewer service, and garbage collection.

Last week, the SSA published a proposed rule that seeks to exclude food from the ISM calculation.

The Challenges of Planning the Client’s Legacy of Place and Togetherness

Written by Timothy Borchers

The vacation home . . . It evokes an image of family and friends enjoying time together at a cottage or cabin, lodge or ranch, somewhere away from it all—the lakeside or seaside, in the country, or on the slopes—in a scene that is repeated year after year. 

It could be a Hyannis Port compound like the Kennedys’ or equivalent to Shrek’s shack in the swamp, but more likely, it is something in between. Regardless of whether it is modest or upscale, when everyone from Grandpa down to the youngest grandkid says in a giddy moment, “This place is awesome! I hope we can enjoy it forever!”, it is not just a home, it is an heirloom property.

Elder law and estate planning are often confused with each other. Admittedly, they are akin to each other, but here’s the key difference: elder law is about planning for what happens when a senior is still alive, and estate planning is about planning for what happens after someone passes away.

From the SECURE 2.0 Act’s changes for special needs trusts to the Federal Trade Commission’s issuance of a proposed rule banning noncompetition clauses, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

When a client needs Medicaid benefits to pay for their long term care needs, their elder law attorney likely has several strategies in their quiver to help get them qualified. One such strategy is using a sole benefit trust. What is this trust and when can it be used?

Medicaid has strict income and asset rules for those seeking long term care benefits. When a client has excess assets that they need to spend down to qualify for Medicaid, they can put those assets in a sole benefit trust. The benefit of doing so is that transfers to a sole benefit trust are not penalized. However, there are rules about who can be the beneficiary of the sole benefit trust.

The Virtual Conference for Experienced Estate Planners Returns

Our next Advanced Estate Planning Summit is around the corner! This Summit will address sophisticated estate planning strategies and topics of interest—from trust protectors and charitable tax planning, to grantor retained annuity trust (GRATs) and beneficiary deemed owner trusts (BDOTs). This is your chance to hear from nationally-recognized speakers, earn up to 5 CLE credits, and gain practical insights to use immediately in your practice.

The U.S. Department of Health & Human Services proffers that by the time your client reaches age 65, there’s an almost 70% chance that the client will need some type of long term care. This care could be in-home help or care at an assisted living or nursing home facility. Planning for the potential of needed care is a big part of elder law.

Medicaid is the only government program that will pay for long term care beyond 100 days for non-Veterans. In order to qualify for Medicaid benefits, your client will need to pass income and asset tests. In addition, state Medicaid programs have a 5-year look-back period (3 years in California). The Medicaid department will scrutinize any transfers that your client has made during the look-back period. If your client has transferred assets for less than fair market value during that time, your client will incur a penalty period and will not be able to receive Medicaid benefits right away.

The start of a new year often means setting goals to improve your business and increase your firm’s revenue. There are many ways to reach these goals, such as gaining new clients and adding new services. However, it is important that you not overlook your existing client base as a source of growth. One way to leverage your current client base and provide them with maximum value is to institute a client maintenance program. Establishing such a program can improve your client relationships, allow you to provide better service, and generate consistent revenue for your law practice. Read on to learn about client maintenance programs and how to establish them.

Some trust beneficiaries may feel left in the dark about the terms of their trust and the amount of property in their trust. Whether or not the trustee has a duty to provide the trust document or a trust accounting to the beneficiaries of an irrevocable trust is a matter of state law. But what happens when the terms of the trust conflict with state law?

This issue was recently litigated in Nevada.

In order to keep a community spouse from being impoverished when their partner enters a nursing home, federal laws allow the community spouse to keep a certain amount of assets and income. The amount of assets the community spouse is allowed to keep is termed the community spouse resource allowance (CSRA). The amount of income the community spouse is allowed to keep is called the minimum monthly maintenance needs allowance (MMMNA).

Rising inflation has led the US government to increase the estate and gift tax exclusion amounts for 2023. This is a perfect time for estate planning attorneys to talk to their clients about taking advantage of innovative strategies, while keeping an eye on larger changes that are coming at the end of 2025. Keep reading to learn the new amounts and ideas to help your clients. 

From the enactment of the SECURE 2.0 Act to the issuance of a proposed rule on access to beneficial ownership information under the Corporate Transparency Act, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

If you have a client that believes a loved one was unduly influenced to change their estate plan, can that client object to the estate plan during their loved one’s life? Or, is the case not ripe until after the loved one’s death? This issue was recently litigated in Maryland.

A Review of Estate Planning Techniques for High and Low Rate Environments

Written by Emily A. Plocki, JD, LL.M and Anna Katherine Moody, JD, LL.M

We are in a time when economic factors such as volatile financial markets and fluctuating interest rates combine to impact the effectiveness of a variety of estate planning techniques. From 2009 through 2021, interest rates sank to and remained at historic lows. However, due to various economic pressures, rates are on the rise, and it is important for clients and advisors to consider the estate planning opportunities that are most effective in the changing interest rate environment. Certain planning strategies and structures work best when interest rates are high compared to those that are implemented in low interest rate environments. While the current uncertain environment may—understandably—cause clients to hesitate to engage in a significant gifting regime, clients should review their balance sheets with their attorneys and financial advisors and discuss whether any of the planning structures described below provide an attractive planning opportunity for the client’s particular circumstances. 

From the US Tax Court setting aside Internal Revenue Service (IRS) Notice 2017-10 to clarification of an employer's obligation under the Fair Labor Standards Act to compensate employees for certain preshift duties, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

Undue influence involves an individual taking advantage of another. This usually happens at the hands of a family member in an effort to gain financial control over someone with diminished capacity. In certain jurisdictions, undue influence is presumed when there is a fiduciary relationship between the two parties; the person doing the questionable action must rebut this presumption for the action to stand. Recently, a case highlighted how a presumption of undue influence was upheld and the offending party’s actions were undone.

There are many ways to provide for a married client’s surviving spouse after the client’s death. This type of estate planning is often referred to as marital share funding. Spouses may use various marital share funding options in either will- or trust-based estate plans. Their goals may include estate tax planning, probate avoidance (especially when using a trust-based plan), and incapacity planning. Disclaimers can be used when planning for estate taxes and may be particularly helpful in other situations relevant to married clients. 

Donald and Marjorie were married in 1997. Each of them had two adult children upon entering the marriage–Donald’s kids were Kathy and Ray; Marjorie’s kids were Julie and Colleen. Donald and Marjorie created a revocable living trust together. At first death, the trust remained revocable as to the survivor. Upon the death of the survivor, all four kids were equal residuary beneficiaries.

Donald died in 2000. Kathy and Marjorie communicated sporadically throughout the years after Donald’s death. Ray’s communication with Marjorie ended shortly after Donald’s death. In 2004, Marjorie sold the family home and sent all four children checks for equal amounts of the proceeds.

The new year is the perfect time to reassess your estate planning practice. Consider what worked well for you in 2022, what did not work well, and what goals you were unable to achieve. Set new goals for your practice and yourself. The end of the year can bring excitement of what is to come: new clients are waiting to connect with you, as many will make a New Year’s resolution to create or update their estate plan. 

Keep reading to learn some helpful tips to connect with new clients and elevate your practice to new heights in 2023.

The Covid-19 Pandemic made everything topsy-turvy. Businesses shut down, supplies were sometimes scarce, and families were distanced. It seemed like the coronavirus could be a legitimate excuse for the failure to get almost anything done in a timely manner. But what if this were the cited reason for causing planning delays in a Medicaid eligibility case? Was this a valid argument? An Ohio appeals court says no but only because of a technicality.

Divorce is usually a lengthy process of reaching agreements pertaining to assets and family time. Once a divorce case is filed with the court, a temporary injunction is put in place, where neither party can dispose of marital assets. The court will eventually issue its ruling about how assets are divided. But what happens if one party to the divorce changes beneficiary designations to assets while the divorce case is pending but dies before the divorce decree is issued? Do the new designations stand?

California Probate Code 850 is infamously known throughout the state as the basis for a Heggstad Petition, named after the landmark case, Estate of Heggstad. In this case, the Grantor of a revocable living trust had transferred trust property back into his personal name for refinancing purposes. The grantor died before he could transfer the property back into the trust. The court applied Section 850 and allowed a post-humous transfer of the real property back into the revocable trust.

In the course of a trust administration, beneficiaries primarily want to know what will be distributed to them and when it will be distributed. Attorneys who represent trustees, however, must prevent trust distributions until the proper time—that is, until all liabilities have been paid or reasonably accounted for with a reserve. Otherwise, a trustee may face personal liability and need to seek indemnity from beneficiaries who may have already spent the funds distributed to them. In a postdeath administration, there may be trust and nontrust liabilities (or the decedent’s liabilities), including the decedent’s debts and various taxes. In addition, a trustee must pay the expenses of the administration or reserve funds for payment of those expenses. 

From the announcement of the 2023 limits on contributions to retirement accounts to a new proposed rule for classifying independent contractors, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practices.

Carol and Richard were married for 14 years but separated in 1989. As part of their separation agreement, they each agreed to execute irrevocable wills that named only their two children as beneficiaries of their respective estates. Each party agreed to give a copy of their new will to the other.

Many years thereafter, Carol and Richard both remarried other individuals, and each executed new wills. Carol’s new will left her personal effects to her new husband. If he were to predecease Carol, then her personal effects would be divided between her kids and her new husband’s kids. The residue of Carol’s estate was devised to a revocable trust; Carol and her new husband were grantors of the trust and each retained a general power of appointment to change the beneficial interests of the trust.

The number of blended families is increasing, as more than 1,300 form every day. In these types of families, one or both spouses have children from previous relationships and they may have children together. Working with blended families will be a common scenario for you as an estate planning attorney (if it is not already), and each family’s plan will be different. The goals of individual family members may be at odds, as not all blended will look like an episode of The Brady Bunch or Modern Family. 

Estate planning and business law attorneys often advise their clients to form a limited liability company (LLC). An LLC provides flexibility and protection from lawsuits for the LLC’s members. You can add value by helping your business-owner clients through this process. Your expertise will make a difference to the success of your clients’ businesses, especially when it comes to drafting their operating agreements. 

A.V. suffered from Alzheimer’s disease and was admitted to a nursing home in January 2021. Thereafter, she submitted a Medicaid application for benefits. On her application, she reported several transfers for less than fair market value during the look-back period. She transferred various amounts to her kids and grandkids for things like wedding gifts, help with a down payment on a home, and car purchases. A.V. had specific dates and amounts for each recipient and presented verification to the Medicaid office. All transfers totaled roughly $25,000.

In accordance with 42 U.S. Code § 1396p(c)(2)(C), a Medicaid applicant will not be ineligible for benefits due to transfers during the look-back period if the applicant demonstrates to the state that the transfers were made for a purpose other than to qualify for benefits.

A revocable living trust (RLT) is often the best vehicle to preserve an estate planning client’s assets and avoid probate court. However, the process of getting all of the client’s assets safely into the trust (a process called funding) can be laborious. Leaving the process to the client or doing it yourself both have their pros and cons. Keep reading to find out whether you should handle the funding process and learn the best ways to fund your client’s RLT.  

Ellan Orkin died in 2019 at the age of ninety-nine. During her life, she and her sister served as nurses during World War II. After their service, they married and settled down in Delaware. Neither had children and each was predeceased by her husband. Ellan and her sister had many friends and other family members around them. Tina was Ellan’s cousin and lived across the street from her; they visited often.

In 1998, Ellan met Kimberly, a former teacher at a local community college. Kimberly presented business opportunities to Ellan and her sister and helped them with various daily needs. Over a span of about 25 years, ending in 2017, Ellan executed various changes to her estate planning documents that increasingly gave Kimberly greater shares of her estate.

From the announcement of the projected 2023 estate and gift tax exclusion amounts to newly issued final regulations implementing the Corporate Transparency Act, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practices.

October is National Special Needs Law Month! As such, some good news is needed. The U.S. Department of Education’s Rehabilitation Services Administration (DOE) has recently announced that they are giving out five-year grants to help combat subminimum wages for employees with special needs.

Whether plagued by poor reviews or buried in search engine obscurity, many small law firms and solo practitioners need a marketing makeover. There are countless reasons why a law firm lacks exposure, but attorneys must overcome the obstacles to gain online exposure and build a client base. With the right tools, attorneys can improve their marketing presence, even if that means starting from square one.

The Supreme Court of the United States (SCOTUS) has been in the news more than ever this year. In November, they will hear oral arguments on another landmark case. This one will decide whether the spending clause permits private claims under 42 U.S.C. § 1983. The ruling could have big consequences regarding access to Medicaid and other government benefits.

The hourly billing model has become a thing of the past for many estate planning attorneys, who have shifted to more modern pricing strategies. Providing clients with a clear picture of the costs of retaining you makes sense, especially for solo practitioners and those in small firms. Many attorneys offer several value-based price points that move away from a time-based model to one that represents what is actually delivered to the client. Read on to learn the benefits of innovative pricing models and how to implement them in your law practice.

Real property is the primary asset in many estate plans, and it warrants special attention. The distribution of cash and family heirlooms is relatively straightforward compared to real estate, which is often accompanied by a mortgage and insurance. As an estate planning attorney, you should use caution when transferring real property to a trust or to entities such as limited liability companies (LLCs) due to the many moving parts. Read on to learn about three mistakes to avoid when transferring real property.

Elder law attorneys focus on helping clients plan for long-term care. The U.S. Department of Health & Human Services estimates that an individual aged 65 and over, “has almost a 70% chance of needing some type of long-term care services and supports in their remaining years.” So, an elder law attorney usually has an abundance of clients needing services. However, is it only clients with limited or moderate means who need to plan? Should wealthy clients also have a plan in place for long-term care?

From the Internal Revenue Service’s (IRS’s) reversal of its position on estate tax deductions for certain unitrust interests of charitable remainder unitrusts (CRUTs) to newly enacted pay transparency laws, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

When someone is unable to care for themselves, a guardian is oftentimes appointed. This guardian is responsible for the health and well-being of the ward. But what if the guardian doesn’t act in the ward’s best interest? What if the guardian’s actions caused harm to the ward? Should the ward’s loved ones be able to file a suit for negligence against the guardian?

This issue was recently litigated in Minnesota.

Cryptocurrency’s decentralized nature has changed the world of global finance. However, because it is so new and volatile, the crypto market’s dizzying ups and downs can be difficult to interpret. Is the recent “crypto winter” just one of these regular fluctuations, or does it indicate permanent problems with the viability of crypto? Virtual assets may now be a significant component of your estate planning clients’ portfolios, so keep reading to learn more about the future of these investments.

Powers of attorney are powerful documents. A financial power of attorney allows another, the agent, to make financial decisions on behalf of the person creating the document, the principal. In a recent blog, the issue of whether a financial power of attorney can authorize the agent to create a trust on behalf of a principal was discussed. Another case has come out on authorization in a power of attorney, but this time it concerns a healthcare power of attorney. Specifically, the Second Appellate District in California decides whether a healthcare power of attorney that gives the agent the power to make healthcare decisions allows the agent to enter into an arbitration agreement on behalf of the principal.

Trust administration is a complicated process with many moving parts. As you represent the trustee, you must keep in mind the needs and demands of the trust beneficiaries. Though there may be pressure to make trust distributions as quickly as possible, your top priority should be to make sure all of the necessary tasks are completed—and in the proper order. Keep reading for tips on how to make the trust asset allocation and distribution processes go smoothly.

The U.S. Department of Health and Human Services states that almost 70 percent of folks aged 65 and over will need some type of long-term care in their remaining lifetime. What will this care look like? How will this care be paid for? How will the senior’s family be affected? Answering these questions and creating a plan is a major part of elder law.

Graduation is a busy and emotional time for parents and their children, especially if the child will be going off to college or moving away. Parents may not realize, however, that turning eighteen is even more life-changing for their child than moving into a dorm room or registering for college classes. The milestone of graduation is the ideal time for you to reach out to clients, leads, and referral sources to help parents and their graduates adapt to the legal realities of adulthood. Read on to learn more about how estate planning for young adults can give the entire family peace of mind.

Stan Lee, the legendary comic book creator, died in November 2018 and his estate has been in litigation ever since.

Stan’s wife had died in July 2017 and thereafter Stan had named Jerry Olivarez, a publicist, as agent under a power of attorney. The Compliant in the probate case alleged that Jerry did several unscrupulous acts: dismissed Stan’s lawyer and hired his own without disclosing the conflict of interest; fired Stan’s banker and transferred roughly $4.6 million out of Stan’s account; duped Stan into loaning him $300,000; bought an expensive condo using Stan’s money; and more. The suit listed several causes of action, including financial abuse of an elder, fraud, and misappropriation of name and likeness. Jerry denied the allegations.

A Financial Power of Attorney (POA) is a powerful document that every senior should have in place. This document allows another person, the agent, to make financial decisions on behalf of the senior, the principal, in the event the senior cannot make their own decisions. Without this document in place, if the senior becomes incapacitated, a court process will be necessary so that the court can appoint someone to make those decisions.

When an agent acts, he steps into the shoes of the principal. But what acts can an agent do? Well, that depends upon the powers given in the document. Can an agent create a trust on behalf of the principal? Does the POA need to contain certain language for that act to be allowed?

From the Internal Revenue Service’s extension of time to use the simplified method for electing portability to the enforceability of modifications to click-wrap agreements, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

As folks age, they oftentimes become unable to manage their affairs. A court can name someone to handle these affairs on the senior’s behalf. A guardian is appointed to make personal or healthcare decisions; a conservator is appointed to make financial decisions. The senior is termed the “ward.” That guardian and conservator (oftentimes the same individual) are then responsible to handle the ward’s affairs, in the ward’s best interests. But how far can the conservator go? Can a conservator sue the ward’s spouse for support and maintenance? This issue was recently litigated in South Carolina.

Piercing the corporate veil is a legal concept that involves separating the business entity from its owner, allowing the owner to be protected from personal liability for the business’s debts. The applicable law can be nebulous, and protection against personal liability may not always be available, especially if a single owner of a business uses personal funds to run the company—or uses the business’s funds for their own purposes. A recent legal case from North Dakota illustrates some of the factors that determine whether the business is operating separately or merely as the alter ego of its owner. Read on to learn more.

The Internal Revenue Service (IRS) recently extended the time to elect portability of the deceased spousal unused exclusion (DSUE) amount for estates not otherwise required to file an estate tax return. After getting swamped with extension requests from taxpayers who missed the two-year deadline, the IRS announced that it would allow five years to make a late claim on portability. Read on to learn more about this change and how it applies to your estate planning clients.

Limited liability companies are typically run by a sole member or some or all of its members. However, sometimes it is best for a limited liability company (LLC) to be managed by a third party nonmember manager. Keep reading to learn how to advise your business-owning clients about when to consider using a nonmember manager. 

An arbitration agreement is a contract that states that the signors cannot sue each other in court. Rather, the remedy for any perceived wrongdoing on the part of the signors is arbitration. Arbitration is similar to mediation except that the former is binding upon the parties. Businesses oftentimes prefer arbitration to a court process as a way to keep litigation costs down and to keep the dispute confidential.

A court might not honor an arbitration agreement and allow a suit to proceed if there was fraud or if the agreement is unconscionable. An unconscionable agreement would be one that was unreasonably unfair, unjust, or oppressive to a signor.

In a case out of Pennsylvania, a court did find that an arbitration agreement was unconscionable.

Interest rates have been climbing steadily throughout 2022, as the Federal Reserve System continues to battle an inflation rate that recently reached a forty-year high. This economic environment lends itself to certain estate planning strategies that take advantage of high interest rates. Keep reading to learn which estate planning tactics are best when interest rates are elevated.

From the Internal Revenue Service’s Dirty Dozen tax schemes to the standard applicable to waiver in federal arbitration cases, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

Practicing law can sometimes seem like just that: practice. You may wonder, when will the meaningful work begin? If you feel like you are simply accomplishing tasks and checking items off your to-do list, maybe your law career needs something new. Are you feeling burned out or longing to start your own practice? If you are looking for a future in which you get to perform work that matters to you while maintaining a life outside the office, estate planning may be a good fit, and it has several advantages if you need a new direction. Keep reading to learn more about this fulfilling area of the law.

Many states, in their state Medicaid rules, have an exception for counting an asset for Medicaid-eligibility considerations if the applicant is trying to sell the property. Ohio, however, was not one of those states. But, in a recent case out of the First Appellate District of Ohio, the court ruled that the state must adhere to the Social Security eligibility rules on the topic and allow for a reasonable-efforts exclusion.

In this case, Diana entered into a care facility and applied for Medicaid benefits several months thereafter. Her application was denied due to the value of a piece of real property that Diana had on the market for the prior year. Diana appealed her Medicaid denial and the state department affirmed the denial. Diana again appealed and the trial court upheld the denial. Again, Diana appealed; the appeals court ruled in her favor.

If an individual sues an entity for violations of the Rehabilitation Act of 1973 and the Affordable Care Act, what kinds of damages can be recovered? The Supreme Court of the United States recently addressed this issue, and their ruling has disability advocates up in arms.

As an estate planner, you should always be attuned to your clients’ goals, especially when estate and gift tax laws change. WealthCounsel conducted a survey with the help of Trusts & Estates magazine and Informa Engage of more than 500 estate planning professionals to gain insight into estate planning trends. The survey results revealed several popular goals for 2022, relating to large lifetime gifts, the upcoming sunset of the Tax Cuts and Jobs Act of 2017, and the deceased spousal unused exclusion (DSUE) amount. Read on to learn about clients’ estate planning goals.

Running a law practice can be challenging, but fortunately, there are a variety of technological tools that can make it easier. These solutions can help you manage your client relationships, save time with scheduling, design email marketing strategies, automate webinars, and create consistent branding. Doing things the old-fashioned way may be comfortable, but you can gain time and money by taking advantage of business efficiency solutions. Keep reading to learn more. 

While the SECURE (Setting Every Community Up for Retirement Enhancement) Act became law in late 2019, the Internal Revenue Service has only recently proposed how to implement it. The 275 pages of regulations have not yet been finalized, but their publication affects many estate planning clients.  These rules are a moving target, so it is important to learn about them from the source rather than relying on the expertise of custodians or financial advisors.

In 2014, the Centers for Medicare and Medicaid Services (CMS) published final rules that states must abide by in their waiver programs for home and community-based services (HCBS). Since then, the implementation of the new rules has been delayed – first, so that states had more time to comply, and then later due to the pandemic. However, CMS has announced that they are holding tight to the latest deadline of March 2023.

From the unenforceability of arbitration clauses in trusts to the applicability of the Americans with Disabilities Act to small businesses, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

The Supreme Court of the United States issued a ruling last week that dictates that a state’s Medicaid agency can recoup funds for benefits paid against an injured party’s settlement award for future medical expenses.

In this case, a Florida student was tragically injured and left in a vegetative state when she was hit by a truck after she stepped off her school bus. Her personal injury suit settled with an $800,000 award, of which roughly $35,000 was designated for past medical expenses. Instead of taking the amount designated for past medical expenses, the state Medicaid agency tried to attach $300,000 of the settlement proceeds.

In Michigan, a court can issue an order for the transfer of assets from one spouse to another when one spouse is institutionalized. Such order is termed a protective order and is authorized under the state’s Estates and Protected Individuals Code. But what is required for a court to issue a binding order?

Estate planners have needs and concerns that change each year. That is why WealthCounsel teamed up with Trusts & Estates magazine and Informa Engage to conduct an annual survey of more than 500 estate planning professionals. 

This year’s major topics included cryptocurrency and nonfungible tokens (NFTs); referral sources; and the upcoming sunset of the Tax Cuts and Jobs Act. Read on for details about the survey results.

Many participants of the Great Resignation decided to not only leave their jobs, but to also start their own businesses. Business startups surged 53 percent last year to 5.4 million, the highest number on record of any year. These new business owners need help with legal documents and business planning, providing attorneys with a new source of clients. Even if estate planning is your focus, understanding how to help new and aspiring business owners can grow your practice. Keep reading to learn more about how to reach and serve these potential clients.

Memorial Day reminds us of the sacrifices that members of the armed forces and their families make every day in service to our country. Military families are a unique demographic; however, they have estate planning needs like everyone else. Due to the nature of their work, military families often experience frequent moves, and while they have access to several forms of government benefits, they can also be subject to some unusual tax rules. Additionally, their risk of deployment into active combat presents a heightened level of urgency and necessity for wills, trusts, and other pertinent planning documents. For these reasons, estate planning for military families can be more complicated than for other types of families. 

A trigger trust, in the Medicaid-trust world, is one in which access to trust funds is removed once a triggering event occurs, such as the grantor entering a nursing home. Since the Omnibus Budget Reconciliation Act of 1993, trigger trusts are not allowed for Medicaid planning, as such trust would violate the any circumstances rule of 42 U.S. Code § 1396p(d)(3)(B). However, in a new case out of Connecticut, a court analyzes whether a trigger trust keeps trust assets from being counted for Medicaid eligibility purposes. Let’s take a look at the facts and see how the court analyzes the case.

Antonio and Antoinetta, husband and wife, established a Declaration of Trust in 2001. Per the terms of the trust, each grantor had the right to withdraw his or her portion of trust property only if the pertinent grantor was “alive and competent”. In the event a grantor was not competent, the trust could not be revoked and trust assets could not be accessed, not even by the grantor’s legal representative.

From new anti-clawback proposed regulations to pay transparency statutes, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

As attorneys, we are in a fiduciary role and must be honest and fair with our clients. Our clients trust us with their lives, their families, and their savings. Hopefully, you don’t need to be told to not steal money from your clients because it is obviously egregious. But when a case comes out about an attorney who lost his way, it can serve as a reminder to keep us on our ethical toes.

An attorney out of Salt Lake City, Mr. Curtis, was just sentenced to 97 months in federal prison and assessed with almost $13 million dollars in restitution. The prosecuting team initially had reached a plea deal with Mr. Curtis for 6 years in prison, but the judge rejected those terms as unreasonable. Mr. Curtis plead guilty to wire fraud and money laundering. The clients he was charged with committing these crimes against were elderly or disabled folks.

A big part of elder law is helping clients get eligible for Medicaid since that government program has strict rules about an applicant’s assets, income, and prior transfers. There are a variety of legal strategies to employ to meet the eligibility rules and obtain long-term care benefits. However, is submitting a seemingly one-sided consent judgment a viable strategy? Can the judge reject the consent judgment because Medicaid qualification might be a motivating factor for the parties? This issue was recently litigated in Michigan.

While there are many ways to change the terms of an irrevocable trust, decanting proves to be one of the most effective methods. An irrevocable trust does not necessarily mean that it is unchangeable, as the terms can be altered after it is poured (decanted like a bottle of wine) into a new trust. Trust decanting is a useful tool for estate planning attorneys who are striving to make a trust better fit the needs of the client. The authority to decant a trust can be included in the original trust, or it can stem from the decanting statutes in more than thirty states. 

When qualifying for long-term Medicaid, there are asset and income restrictions. In many states, the applicant cannot have more than $2,000 in assets and receive benefits. Luckily, the equity in the applicant’s home is an excluded asset, up to a certain amount. But in order to have the home’s equity excluded, must the applicant have occupied that home prior to applying for benefits? This issue was recently litigated in Texas.

Business owners can be so concerned with day-to-day operations that they fail to prepare for the inevitable day when they are no longer able to run their business. There always seems to be time until there is no more time. Business succession planning may be the “single-most neglected aspect” of running a company. Further, this issue is relevant to business clients as well as to attorneys who run their own practices. Whether plans to depart the business are imminent or far-off, it is important to act now, as proper business succession planning can often take several years to implement.

Protecting assets is a major goal of estate planning, and as of March 2022, nineteen states have statutes that allow the creation of a domestic asset protection trust (DAPT). A DAPT is an irrevocable trust designed to protect trust assets from beneficiaries’ creditors. An even better version of this trust is the hybrid DAPT, which can offer another layer of protection for your client. Read on to learn how it works.

A silent trust is one where the beneficiaries are not aware of its existence. Why would a grantor want to create a silent trust? The grantor may not want to discuss how she designed the residuary distribution provision of the trust, as it may breed family conflict. Or, the grantor may think that if a beneficiary knows that he is set up for an inheritance, he will become lazy or a spendthrift. In any event, the grantor wishes for the trust to be kept a secret. Are these types of trusts allowed?

If you practice in estate planning or elder law, you likely have heard of special needs planning. You know you should plan for a beneficiary who has special needs by creating a special needs trust (SNT) to hold their inheritance. But what about including contingent SNT provisions in the client’s revocable living trust? Let’s talk about what exactly this type of planning is and why it is important.

While you may have a strong handle on the substantive estate planning law required to effectively run your practice, it is natural for new and transitioning practitioners to experience difficulties acquiring clients. Law school prepares you to pass the bar and begin practicing law, but it does not prepare you to operate and market a business.

From a taxpayer’s win in a split-dollar life insurance arrangement case to the reinstatement of a Trump-era independent contractor rule, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

Federal law, specifically 42 U.S. Code § 1396p(c)(2)(D), dictates that a state must establish procedures that allow a Medicaid applicant to receive needed care via a hardship waiver. In these cases, the applicant (or their spouse) had made a transfer during the look-back period that would otherwise incur a penalty whereas the applicant would not be eligible to receive Medicaid benefits for a certain period of time. If the applicant can show that the imposition of the penalty period would deprive the applicant of necessary medical care or the necessities of life, then the hardship waiver can be approved, allowing the applicant to get needed care immediately. Basically, the penalty period is waived if the hardship waiver is granted.

Business can become personal for entrepreneurs who own a small business. Life changes such as divorce, disability, or death can affect not only the partner but also the ownership of the business. To retain stability when major changes occur, a business should have a comprehensive buy-sell agreement in place at its outset. Because life events will undoubtedly affect your clients’ businesses, you should be aware of and avoid common drafting mistakes in buy-sell agreements. 

The road to retirement is different for everyone. Workers have many paths to help save for retirement as they travel toward the same goal. Since retirement funds are an important part of many estate plans, you should understand the most common types of retirement accounts. Read on to learn more about these accounts and their various tax implications.

What happens if a Medicaid applicant has funds in a bank account but cannot access those funds due to their medical condition? Are those funds still a countable resource? This issue was recently litigated in Indiana.

Samuel was admitted to the nursing home in 2019. A few months thereafter, he was diagnosed as “incapacitated by senile degeneration of the brain.” In February 2020, Samuel’s representative applied for Medicaid benefits and was denied due to excess assets. Samuel twice appealed and the case was affirmed each time.

Nonfungible tokens (NFTs) are gaining popularity at an exponential rate. Trades of these unique digital assets increased by an eye-popping 21,000 percent in 2021, for a total value of $17.6 billion. Because your clients are increasingly likely to have NFTs in their portfolios, it is important that you understand them and know how to include them in an estate plan. 

The legal authority to create a Qualified Disability Trust (QDisT) falls under §642(b)(2)(C) of the Internal Revenue Code. To qualify as a QDisT, the trust must meet the following criteria:

1. A QDisT must be irrevocable.
   
   
2. All beneficiaries must be disabled and receive Supplemental Security Income or Social Security Disability Income benefits. There can be more than one beneficiary, but all beneficiaries must be disabled. (According to IRC 642(b)(2)(C)(ii), a trust can still qualify as a QDisT if the corpus of the trust transfers to someone who is not disabled after all disabled beneficiaries are deceased.)
   
   
3. A QDisT cannot be a grantor trust; the trust must be the taxpaying entity.
   
   
4. The trust must be established for the benefit of disabled individuals 65 years of age or younger. (The QDisT does not cease to be a QDisT after the beneficiary turns 65, but it must be established beforehand.)

Do you consider yourself comfortable with technology? If so, you can help clients who are not. Our communications methods and preferences have changed drastically in just the past few years. The American Bar Association’s Model Rules of Professional Conduct Rule 1.4(a) requires that attorneys keep clients well-informed, and improving your communications skills through technology will assist your clients immensely. You can augment your communication skills using four types of technology: smartphones, Zoom meetings, document solutions, and social media.  

Are you interested in learning more about elder law, how it could benefit your practice, and how you could go about incorporating this area of law into your practice? You have come to the right place.

What is elder law?

Elder law is the area of law focused on issues that affect the aging population. While estate planning law focuses on what happens when the individual passes away, elder law focuses on what happens while the individual is still alive. This can include guardianship issues, addressing elder abuse claims, handling discrimination claims, planning for long-term care, obtaining government benefits, and helping with special needs issues. Let’s discuss some of these points in more detail.

From new Internal Revenue Service (IRS) proposed regulations relating to required minimum distributions to a new federal law ending forced arbitration for claims of sexual harassment and assault, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

The Americans with Disabilities Act (ADA) is a broad-sweeping federal law meant to eliminate discrimination against those with disabilities. The ADA doesn’t specifically address polling places, but Title II requires equal voting rights for those with disabilities. As such, state and local governments must ensure that those with disabilities have physical access to polling places. In addition, reasonable modifications of voting procedures are required to meet an individual’s needs.

However, new trends in voting laws over the last couple of years are being hailed as discriminatory towards those with disabilities or mobility issues. Those with disabilities or mobility issues oftentimes use non-traditional methods to cast their votes: mail-in ballots, ballot drop-boxes, curbside voting, or inciting the help of another at the voting booth. Altering these methods is often the focus of these new laws.

Retirement funds are likely one of the main components of your client’s estate plan. A standalone retirement trust (SRT) is a useful tool that can protect these funds by allowing your client to direct the manner in which they are distributed after the client dies. You can serve your clients well by explaining how an SRT works and how much value it can add to their estate plans.

A Self-Settled Special Needs Trust (SNT) and a Third-Party Supplemental Needs Trust (SNT) are used when a beneficiary would like access to extra funds without jeopardizing their eligibility for public benefits. Let’s review some key differences between these trusts.

The Self-Settled SNT—available in Elder Docx™—is irrevocable and is used when the assets funding the trust belong to the beneficiary. This would be if an individual has money in the bank, or comes into money, such as via a settlement or inheritance. If the funds are obtained through a settlement, an MSA subtrust may be needed. (More on that in a bit.)

When your client starts a limited liability company (LLC), they are not confined to forming it in their home state. Because all fifty states allow “foreign LLCs” to operate within their borders, your client can shop around for the state with the most advantageous rules. Your client can then operate the LLC under the law of the state where it was formed. Keep reading to discover the best states to form an LLC.

On February 24, 2022, the IRS issued proposed regulations regarding the Secure Act. Public comments can be submitted via www.regulations.gov and there is a public hearing scheduled for June 15, 2022. We will be thoroughly analyzing the 275-page document and will post a blog at a later date with clarifications and highlights from the proposed regulations.

Mistakes happen in all forms of writing, including the drafting of estate planning documents. Even a small typographical error can have big consequences for you and your clients. If these errors are not rectified before the documents are signed, they can hurt your credibility with clients or worse—lead to malpractice claims. 

From new Internal Revenue Service (IRS) life expectancy tables for required minimum distributions to lowered reporting thresholds for third-party payment networks, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

Powers of appointment are useful estate planning tools that allow the grantor of the power to choose someone they trust to instruct the fiduciary in control of the assets to redirect the distribution of the assets from their estate or trust. This distribution can take place many years after the grantor’s death.

Last August, we published a blog about California’s new Medicaid eligibility rules. Well, those new rules are coming to fruition and will drastically change Medicaid planning in that state.

Most states have a $2,000 asset limit for an individual to qualify for Medicaid. California was no exception. However, the new rules change the asset limit for an individual to $130,000 ($267,000 for a married applicant) as of July 1, 2022. Even more astonishing – all resources will be disregarded no sooner than January 1, 2024. Meaning, a MAGI-based applicant can have unlimited resources and qualify for long-term care Medicaid at that time.

Clients want their estates to grow until it is tax time—when they want to give the Internal Revenue Service as small a target as possible. While the federal wealth transfer tax exemptions run into the millions of dollars, some clients’ estates exceed these amounts and result in large estate tax bills. Fortunately, several methods are available to reduce the amount of a client’s estate for tax purposes. Here are ten strategies to limit your client’s exposure.

Elder Docx™ is a powerful document drafting system. Within the system, you can draft many legal documents related to elder law, Veterans benefits law, and special needs law – a Standalone Will, Revocable Living Trust, Medicaid Asset Protection Trust, Veterans Asset Protection Trust, First-Party Special Needs Trust, Third-Party Supplemental Needs Trust, and so much more.

Within these documents, you have the option to include a Trust Protector. Who can serve in this role, what does that person do, and why would you want to include a Trust Protector? Let’s dive in.

From an Internal Revenue Service (IRS) Chief Counsel Advice affecting GRATs to decisions regarding the deduction of business losses, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

The Deficit Reduction Act of 2005 (DRA) did many things. It implemented new whistleblower protections, changed the annuity rules, allowed states to vary premiums and cost-sharing for Medicaid benefits, and instituted the “Money Follows the Person” rule. But the heavy hitters of the DRA were the modifications of the look-back period and the penalty period rules.

The look-back period is the time in which a Medicaid agency can scrutinize asset transfers. Certain transfers during this time may incur a penalty period where the applicant isn’t eligible for benefits. The DRA lengthened the look-back period to 60 months. Importantly, it also changed the rule that stated the penalty period began in the month the assets were transferred. After the DRA, the penalty period doesn’t begin until a Medicaid application is filed and the applicant is otherwise eligible for benefits.

Cryptocurrency may be the “next big thing” on the level of the personal computer and the internet. The market has already reached a total value of $3 trillion. Investors are attracted to its anonymity and freedom from centralized control by banks or governments. Understanding virtual assets and how they differ from traditional currency can help you serve your estate planning clients. Read on to learn how cryptocurrency will affect your law practice.

How is available income for Medicaid-eligibility purposes calculated in Ohio when the applicant pays spousal support? Is gross income reduced by the spousal support payments in the available income calculation? This issue was litigated in the Twelfth Appellate District of Ohio.

Here, we have Jerome, who suffered from a stroke and required long-term care. His son, Glenn, found a nursing home to provide the needed care. The nursing home filed an application for Medicaid benefits for Jerome and advised Glenn to establish a Miller Trust (also called a QIT Trust) for Jerome in case Jerome’s income level was too high to qualify for Medicaid benefits.

Family dynamics can change drastically when one member passes away. In particular, if a surviving spouse remarries, the question of what happens to the family home can make dynamics among the children and the new spouse even more complicated.

Malpractice. The single word can send shivers down the spine of every attorney. Most attorneys have malpractice insurance to protect themselves and clients in the event the attorney makes an error. But how far does a malpractice insurance company have to go to defend the attorney? How does an exclusion clause affect the analysis? These issues were recently litigated in an Illinois appellate court.

Lisa died, leaving a last will and testament that named her two minor children as beneficiaries. Randy was appointed executor of the estate and he retained attorney Alan’s firm to represent him in the probate case. The probate court converted the case to supervised administration, whereas Randy could not pay Alan’s firm without prior court approval.

Whether you believe in the Law of Attraction, meditation, a higher power, goal-setting, or just positive thinking (all of the above?), it would likely behoove you to set your intentions for the coming year. What are some professional goals that you want to achieve in 2022? How can you motivate yourself and your team to achieve these goals? While your firm probably has unique aspects that you should be mindful of, here is a good list to get you started.

Like 2020, this year has been one for the record books. For the first time ever, young Americans (aged eighteen to thirty-four) are more likely to have a will than their older counterparts (aged thirty-five to fifty-four). The COVID-19 pandemic has forced younger Americans to consider the importance of estate planning and realize that it is not just a need of the ultrawealthy. 

Dean and Patricia were married for more than 50 years. In early 2017, Dean entered a nursing home. Patricia, acting as Dean’s authorized representative, executed the residency agreement with the nursing home. About six months later, Patricia filed an application for Medicaid benefits on Dean’s behalf. It was denied and several more applications were submitted before one was eventually accepted.

Dean died about three months later. The nursing home filed suit against Patricia, seeking Dean’s unpaid balance and alleging breach of contract, unjust enrichment, and responsibility under Iowa Code Section 597.14. The trial court found for the nursing home under Section 597.14 and rejected all other claims from both sides. Patricia appealed and now we have the instant ruling out of the Court of Appeals of Iowa.

From the announcement of the increased annual exclusion and gift and estate tax exemption for 2022 to the release of proposed regulations implementing the Corporate Transparency Act, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

Gathering social media followers can help your law practice, but only if you know what to do with them. Social media followers have shown that they are interested in you by following you, but there are additional steps that you must take to transform them into paying clients.

A new case out of the Court of Appeals of Ohio analyzes whether the beneficiary of a transfer-on-death (TOD) account was liable for an unpaid nursing home bill, based on a fraudulent transfer claim. Here, Marian was admitted to a nursing home facility and died about a month later. She left an unpaid balance to the home of roughly $16,000. The nursing home sued Marian’s son, Fredric, alleging fraudulent transfer due to a TOD beneficiary designation that Marian had executed before her death on an investment account, naming Fredric as beneficiary. The nursing home wanted compensation from the investment account funds that Fredric received.

The trial court ruled in favor of Fredric, and the nursing home appealed. The Court of Appeals of Ohio reversed the trial court’s judgment and remanded for further action. The parties litigated further and the trial court once again ruled in favor of Fredric. The appeals court once again took on the case and now we have the instant ruling.

Business lawyers should be aware that advising partnerships can be tricky: the federal partnership tax rules can be quite complicated. Partnerships should be formed for a legitimate business purpose—not just to avoid taxes—and partners should take care to avoid overstating their losses and underpaying taxes. In addition, if the Internal Revenue Service (IRS) imposes a penalty, any defenses must be raised at the proper stage: otherwise, they will be unavailable. As we examine the recent decision in Ginsburg v. United States, we can learn lessons about how the federal government handles tax issues relating to business partnerships. 

Ride-share companies, such as Uber, have boomed in recent years. Anyone needing a ride can simply make a few clicks on their smartphone or computer and a car shows up to take them to their destination. Very convenient!

Folks with disabilities have also benefited from Uber’s services. A customer can order an Uber WAV and a wheelchair-accessible vehicle will be provided. The price of the Uber WAV vehicle is comparable to the cost of a basic ride option. The driver of an Uber WAV has undergone training to help the rider enter and exit the vehicle. Finally, Uber is an equal opportunity employer, and those with disabilities (with a valid driver’s license) can drive and make some cash. Uber purports that “Drivers who are deaf have collectively earned tens of millions of dollars—all by helping people get around their communities.”

Millions of Americans have walked away from their jobs this year. This mass employment exodus is noticeable, as is evidenced every day by conversations with people and signs outside retail stores and restaurants begging potential employees to work for them.

Most lawyers are familiar with a Last Will and Testament, but for many, a trust remains a mystery. Let’s lift the veil and discuss how these planning devices are similar, how they differ, and why it might be beneficial for a lawyer to learn trust drafting.

Last Will and Testament

The person signing the Last Will and Testament is called a Testator. A Last Will and Testament takes effect upon the Testator’s death and requires a court process called probate. The Last Will and Testament gives the court directions on what the Testator wants to happen during this probate process.

From revisions to the Build Back Better Act to restrictions on noncompetition agreements, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

Federal law prohibits a nursing home from requiring that past-due expenses be paid as a condition for a resident to be admitted to or continue to stay at a facility. But what if someone volunteers such payment?

This issue was recently litigated in the Commonwealth of Kentucky Court of Appeals. In this case, Erma was in a nursing home and filed for Medicaid benefits about 6 months after her arrival. Erma’s application was approved and Medicaid paid 3-months retroactive benefits to the nursing home. During her private-pay tenure, Erma had accrued a balance of about $35,000.

Dealing with a malpractice claim can be very stressful and take a lot of time away from your business and clients. In addition to lost revenue, you may have to pay a settlement, court costs, and your own attorney’s fees. Your reputation as a lawyer could also suffer permanent damage. 

Helping Clients Plan for Community Property in a Separate Property State 

If you are an estate planner, chances are you practice in a separate property (or common law) state. After all, there are only nine community property states. But that does not mean that community property will not appear on your radar.

I do, or I don’t – can a Settlor dictate how a beneficiary’s share is distributed based on the beneficiary’s marital status? Or, is such a trust provision void as a matter of public policy as an unlawful constraint on marriage? In a new case, the Indiana Supreme Court ruled that the Settlor can make such a trust provision and it will be upheld.

Trusts have significant income-tax implications because their tax brackets are compressed: they can reach the highest income tax bracket with much less income than an individual taxpayer. 

Flexibility in the drafting of trusts will be even more important in 2022, when tax brackets are likely to be affected by rising inflation, the cost-of-living adjustment, and President Biden’s stimulus package. Income tax planning may not always be the first thing that comes to mind when drafting a trust, but the current political climate is causing clients to be concerned about rising income tax rates. 

In many states, executing a promissory note is a viable and attractive strategy when engaging in Medicaid-eligibility planning. This strategy is usually used in a crisis planning case, where the applicant needs to qualify for long-term Medicaid benefits soon.

This is how it works: A promissory note is executed between the Medicaid applicant and another party, usually a friend or family member of the applicant. There is also a gift and this transfer creates a penalty period, whereas the applicant will not be eligible for benefits for a certain amount of time. The income from the promissory note helps to pay the cost of care during the penalty period. The gifted portion of the transferred funds is protected and does not have to be paid towards the applicant’s cost of care. But can the promissory note be construed as a trust-like device under applicable rules? And what makes such transaction bona fide? These issues were recently litigated in the United States Court of Appeals for the Tenth Circuit.

From the release of the Build Back Better Act to the expansion of the federal COVID-19 economic injury disaster loan program for businesses, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

Elder Docx™ offers many amazing documents to draft, but today we are going to focus on the Medicaid Asset Protection Letter (MAPL). Let’s explore this long-term care planning document and its amazing capabilities.

The MAPL is a planning letter. You would use it after being hired to set out the roadmap for the client’s case in order to get the client qualified for Medicaid. The MAPL lists the client’s income and assets and then details strategies for dealing with excess income or assets. For example, if you are planning in an income cap state and the client has too much income, the letter may suggest using a Miller Trust. If a client has $100,000 in excess assets, then you can select the planning strategies to deal with the excess assets and get the client qualified for Medicaid. You may suggest using a Medicaid Asset Protection Trust, buying an exempt asset, or more. There are about 23 strategies that you can select from, or you can formulate your own strategy!

Many estate planning attorneys are following the news about the Build Back Better Act (the Act) and how it could affect their clients. This news story is a moving target, as Congress is likely to make changes to the legislation, and there is no guarantee that it will even pass.

Elder Docx™ has always had the ability to draft a Self-Settled Special Needs Trust, but with our recent software update, you can now draft an annotated version!

The Self-Settled Special Needs Trust, often referred to as a d4A trust, is a first-party trust; meaning, the assets used to fund the trust belong to the beneficiary. This trust allows the beneficiary to have these funds set aside to pay for certain things that government benefits don’t provide for, while still allowing the beneficiary to maintain eligibility for public benefits.

Elder Docx also has an option to draft an annotated Self-Settled MSA trust. This trust is used when a Medicare Set-Aside subtrust is needed, which is often when the beneficiary is awarded a personal injury settlement or a Workers Compensation award. The amount of the award that should be set aside for future medical expenses related to the injury are funded into the MSA subtrust to be preserved for such use.

Estate planning services are in high demand as a result of the COVID-19 pandemic. Surprisingly, young adults are more likely than their middle-aged counterparts to have a will. This demand presents a unique opportunity to offer estate planning services to the eighteen to thirty-four year old demographic, as well as their older counterparts whose planning efforts are lagging behind.

The Tax Cuts and Jobs Act of 2017 (TCJA) doubled the federal gift and estate tax basic exclusion amount (referred to here as “exemption”) from $5 million to $10 million (adjusted for inflation). In 2022, the federal gift and estate tax exemption is $12.06 million, which generally means that an individual can transfer $12.06 million of assets before having to pay a gift or estate tax (at a maximum rate of 40%). Unless new legislation is passed, this exemption will reset to $5 million (adjusted for inflation) on January 1, 2026. 

There are many areas of law an attorney can focus on — litigation, bankruptcy law, criminal law, real estate law, environmental law, health care law — the list seems endless.

Some areas of law are probably familiar to you, such as family law. You know that if you need a divorce or have a child custody issue, you should contact a family law attorney. But there are some areas that remain a mystery, for both the layperson and attorneys alike.

Elder law is one such area. It is lesser known; you might not have heard of an elder law attorney until you need one.

What exactly does an elder law attorney do?

A common comparison in the legal world is this: An estate planning attorney plans for what happens when you die, while an elder law attorney plans for what happens while you are alive.

Let’s take a deeper look at what, exactly, an elder law attorney may be able to help you with.

As a senior ages, they may no longer be able to look after their own affairs. This could be their medical affairs, financial affairs, or both. Hopefully, the senior planned early and had the appropriate powers of attorney in place. These documents allow another to act on the senior’s behalf in the event they are unable to do so.

If a senior did not plan and have the appropriate documents in place, then a guardianship or conservatorship may be necessary. Both entail a court process. In a guardianship, the court would grant someone, termed a guardian, to be in charge of the senior’s person. This means monitoring their day-to-day health, making doctor’s appointments, administering medication, and ensuring the senior has proper hygiene. A conservatorship means the court appoints a conservator to be in charge of the senior’s finances. In both cases, the senior would be termed a ward. A guardian and conservator must act in the ward’s best interests. 

Work-life balance sounds like one of those goals that everybody strives for but nobody can achieve. The stresses of the COVID-19 pandemic have stretched us to the point where work-life balance seems like a pipe dream—or even a cruel joke. But what if you really can achieve it?

From an extension to elect out of automatic allocations of the generation-skipping transfer (GST) tax exemption to alternative business structures for legal services, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

Undue Influence is when someone pressures another in such a way that the person being influenced is not acting by their own free will; they are being coerced into taking a certain action. The person being influenced does not understand the repercussions of their actions.

Recognizing undue influence is a job for many – lawyers, financial advisors, notaries, bankers, and family members. Due to the nature of undue influence, it is often carried out by loved ones and kept hidden from others. Undue influence often happens in the case of illness, where there is a deterioration in physical and mental abilities. The bad actor will take advantage of the ill person, unduly influencing them into taking actions to benefit the bad actor.

The issue of undue influence was litigated in Malousek v. Meyer. Here, we have Molly and Greg, who began cohabitating in 2009. In 2015, Molly was diagnosed with cancer and began treatments. By 2017, her health had drastically deteriorated. In mid-October 2017, the pair added Greg as a joint owner on Molly’s bank accounts, changed beneficiary designations in Greg’s favor, got married, and executed a quitclaim deed in order to have the home transfer to Greg upon Molly’s death. In addition, Molly executed a power of attorney naming Greg’s son, Mark, as agent.

When the federal estate tax exemption is high, the issue of how to apportion death taxes is of less concern to many families. But this issue can cause controversy with taxable estates, blended families, and certain types of assets. If the decedent’s will or trust is silent on the issue of tax apportionment or the decedent died intestate, state law provides default rules that determine which interests or assets in a decedent’s estate bear the burden of paying death taxes. If a certain interest is insufficient to pay the net tax attributable to property passing under the terms of the trust, state law often also provides an order of priority for payment of the balance of the tax owed. However, the terms of the decedent’s will or trust can override these rules; that is, everyone has the opportunity to direct how taxes (and expenses, for that matter) will be paid. In a taxable estate, this may be the most important provision in the testamentary instrument.

Fall is often associated with back-to-school time, when many clients focus on their children’s educational future. This makes fall the perfect time for estate planning attorneys to remind their clients how important it is to take steps to secure their children’s financial future as well. By incorporating asset protection in their estate plan, clients can not only provide an inheritance for their children but also protect the inheritance from creditors, a soon-to-be ex-spouse, and poor money management that can quickly deplete hard-earned assets. 

A power of appointment is a provision that gives a person, the powerholder, the opportunity to change the ultimate beneficiary of the property subject to the power. Retaining a power of appointment can provide flexibility for future planning and can also provide taxation benefits, such as including the property in the powerholder’s estate.

A general power of appointment, per 26 U.S. Code § 2041(b)(1), “means a power which is exercisable in favor of the decedent, his estate, his creditors, or the creditors of his estate.” A limited power of appointment limits to whom the property can be appointed. While a general power of appointment is not advisable when planning using a Medicaid Asset Protection Trust, a limited power of appointment is acceptable in many jurisdictions. But what if the limited power of appointment allows property to be appointed to a non-profit organization and the Medicaid recipient is receiving care at a non-profit facility?

This issue was recently litigated in Massachusetts. 

Earlier this year, WealthCounsel, in conjunction with Trusts & Estates magazine, surveyed over 500 estate planning professionals to see what opportunities and challenges they and their clients face. The results indicate that, while there is stability within the industry overall, there are growing concerns from clients regarding proposed legislation that could have wide-ranging implications if passed. 

California legislatures recently passed AB 133, which is creating quite the stir in the elder law community. In particular, section 364 therein is especially surprising. It states, in its entirety:

From penalties for the nonwillful failure to file reports of foreign financial accounts to new consumer privacy legislation, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted some noteworthy developments and analyzed how they may impact your estate planning and business law practice.

Written by: REBECCA KLOCK SCHROER, JD, & MORGAN WIENER, JD

Trustees face a number of complexities when administering a trust that owns interests in a closely held business. This article focuses on two of those complexities:

(1)  Which standard of care applies to the trustee’s business decisions: the fiduciary or the corporate standard of care?

(2)  What is the trustee’s obligation to produce information about the business to the trust’s beneficiaries?

Because there is no national consensus on either of these issues, this article will first provide an overview of each issue and then review leading cases exemplifying the different approaches taken by courts.

Each year, the Internal Revenue Service (IRS) puts out their “dirty dozen” list. This is a list of scams that are prevalent that the IRS wants everyone to watch out for. Let’s see what’s going on in scammer-town this year.

The scams fall into four main categories: pandemic-related scams; scams relating to personal information; schemes focusing on certain victims; and scams that persuade taxpayers into taking crooked actions.

Pandemic Scams

Due to the pandemic, the government passed legislation that provided financial help to individuals and businesses. A scam can focus on stealing these payments. The IRS alerts taxpayers to watch out for mailbox theft of stimulus checks. The IRS reiterates that an IRS employee will not initiate contact via phone, email, or text asking for your social security number or other information in order to process stimulus checks.

The Virtual Conference for Experienced Estate Planners Returns

WealthCounsel’s Advanced Estate Planning Summit is returning this fall with some exciting new speakers and sessions that will give you fresh insight for your law practice. Whether you are hoping to stay ahead of the tsunami of proposals coming from the Hill, learn groundbreaking planning strategies for your clients, or gain practical skills regarding document drafting—this Summit has something for everyone.

When an agent steps into the shoes of a principal, does that require the agent to ensure every cent belonging to the principal go towards the principal’s care? What if the agent instead gifts that money to family? Is that fraudulent? This issue was explored in a recent case out of the United States Bankruptcy Court, District of Massachusetts, Eastern Division.

Doris named her son, Jonathan, as agent under a financial power of attorney. Doris’ health was failing and she entered into a nursing home, Pleasant Bay. The private pay rate for Pleasant Bay was nearly $8,000 per month. Doris did not have enough income to pay for her stay at Pleasant Bay, so Jonathan sold her condominium.

With the 2021 federal estate tax exemption amount at $11.7 million for individuals and $23.4 million for couples, many estate planning attorneys have shifted to other financial savings objectives to plan for their clients whose taxable estates fall below these thresholds. Because of this high exemption amount, the federal estate tax has impacted less than 1 percent of the US population, and thus the planning focus has shifted towards reducing income tax liability for clients. More specifically, the focus has been on how to strategically and effectively reduce a client’s capital gains tax liability. Although these strategies may eventually need to change given new proposals by the Biden administration, there are several important rules regarding capital gains taxes that currently apply to gifts made during a client’s life or at death that legal counsel must consider when advising clients. 

Yesterday, you were alerted to the groundbreaking decision out of Minnesota that confirmed an irrevocable trust could be an exempt asset regarding Medicaid eligibility and struck down state law that contradicted federal law on the matter.

Now, let’s discuss a similar case out of Montana.

In this case, Marilyn owned a home. Her sister, Glenda, moved into it with her. In 2008, Marilyn sold to Glenda a one-half interest in the home. Thereafter, both sisters established an irrevocable trust and transferred their respective shares of the home into the trust. In 2016, Marilyn’s health was failing and she needed care. She entered a nursing home and applied for Medicaid the next year. Her application was denied because the state counted the trust property in her eligibility determination.

Lawyers who represent family businesses often also represent the business owners, serve as a trustee or fiduciary on the business’s board, and provide personal estate planning for the owners and other family members. While fulfilling multiple goals  for clients may seem effective and efficient, it is important that the attorney consider potential ethical complications and the potential need to narrow the representation, obtain clients’ informed consent, or withdraw from a particular matter.

In a Minnesota appeals court decision, the court ruled that a Medicaid recipient’s irrevocable trust was not a countable asset and that Minnesota law on the matter is preempted by federal law. The decision turned long standing case law on its head, and gave the green light that an irrevocable trust can indeed be a non-countable asset for Medicaid eligibility purposes in Minnesota.

In this case, Geyen was the Grantor of two irrevocable trusts, which were identical except for their names. Her children were Trustees; her children and grandchildren were beneficiaries. Both trusts indicated their irrevocability and gave the Trustees “full power and authority to control” trust property. The trusts forbade the Trustees from loaning or gifting any assets to Geyen.

SSI benefits are means based. Meaning, there are strict financial criteria that must be met to receive the benefits. The SSI program was meant to help disabled, aged, or blind individuals with limited financial means. If a benefits recipient has too much property or income, benefits could be cut off. But what happens when the Social Security Administration (SSA) accuses a recipient of owning property that isn’t actually theirs?

In fiscal year 2018, the SSA started using a LexisNexis online program called Accurint. Accurint is a database that holds information, including ownership information regarding real property. The SSA would go online to check if SSI recipients hold title to real property, thereby disqualifying them for benefits. However, this proved problematic for many benefits recipients.

From new state statutes designed to attract wealthy residents to the validity of employer vaccine mandates, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted a few noteworthy developments and analyzed how they may impact your estate planning and business law practice.

Among confusing legal concepts, the generation-skipping transfer (GST) tax is at the top of the list. Because of its complexity, many attorneys lump it in with concepts such as the rule against perpetuities—topics taught in law school that they never quite fully understood and wish to forget. However, for estate-planning attorneys, understanding the GST tax is vital to helping their clients effectively plan to avoid it if possible. As with any concept that causes confusion, breaking it down is the key to better understanding.

Inconvenience resulting from COVID-19 restrictions or other issues related to remote work are not an excuse for failing to meet ethical duties. The rules of professional responsibility, including the duty of confidentiality and duty to avoid conflicts of interest, still apply in the virtual environment. In fact, attorneys may need to implement extra safeguards to avoid violating their ethical obligations.  

With the Democrats in control of both the executive and legislative branches of the federal government, there has been a plethora of new proposals that could have sweeping effects within the estate planning industry. Some of the most notable proposals include increasing the capital gains tax rate to 39.6 percent, ending stepped-up basis, and making sweeping modifications to the estate, gift, and generation-skipping transfer (GST) tax exemptions. 

From the Department of the Treasury’s issuance of a new “green book” to the Biden administration’s withdrawal of a proposed Trump-era independent contractor rule, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted a few noteworthy developments and analyzed how they may impact your estate planning and business law practice.

In 2003, Mary attempted to engage in elder law planning and executed a deed reserving a life estate for herself and giving her daughter, Carla, a remainder interest in the property. However, the wrong address was listed on the deed. In 1989, Mary, at age 65, began receiving Medicaid benefits through MassHealth. She continued receiving these benefits until her death in 2018. At Mary’s death, Carla noticed the mistaken deed and moved a Massachusetts court to reform the deed on the grounds of mutual mistake. Would the court oblige Carla? The court first theorized that it must decide if reforming the deed would impact the state’s estate recovery efforts.

By PEGGY HOYT, JD, MBA, BCS

Planning for four-legged loved ones (kids in fur coats) can be just as challenging as planning for two-legged loved ones (minor children). Clients typically ask, “Do I need a trust or a will?” The answer, of course, is, “It depends.” 

A step-up in basis, or more accurately, a basis adjustment, has been a cornerstone of many estate plans throughout the years. Let’s take a look at what a basis adjustment is, how a step-up in basis works, and some recent news about its possible demise.

Although trusts are effective estate-planning tools used to avoid probate and minimize estate and gift taxes, their income-tax implications must also be considered to ensure that there are no unintended tax consequences. The drafting attorney should point out the advantageous and disadvantageous fiduciary income-tax implications for the type of trust being considered and then determine which trust is the best fit for the client. 

Can undue influence lead to a Trust Amendment via a Trust Protector who is an independent party? This issue was recently litigated in Arizona. In this case, Austin and Kay were married for 57 years. Near the end of their marriage, Austin was diagnosed with Parkinson’s Disease. Austin became romantically involved with his caretaker, Lindi. Austin and Kary divorced; thereafter, Austin and Lindi married.

During Austin and Kay’s divorce, Austin had his attorney, Paul, create an irrevocable trust. The trust provided for the following distributions upon Austin’s death: 45% to Kay, 45% to their children, and 10% to Lindi. The only person that could amend the trust was the Trust Protector, Paul. Paul was not subordinate to Austin within the meaning of IRC 672(c). After the divorce was finalized, Austin requested that Paul amend the trust. Paul added a no contest clause, eliminated Kay as a beneficiary, made Lindi the sole income beneficiary upon Austin’s death, reduced the children’s’ share, and added Lindi’s sons as remainder beneficiaries.

Navigating a postdeath trust administration can be daunting, and attorneys must have the necessary skills, knowledge, and competence to diligently and effectively provide legal services to fiduciary clients during this process.

A Last Will and Testament devises one’s property after their passing. Great weight is given to this document; Wills have formalities that other documents don’t, hinting to its importance. But what happens when a devise in a Will contradicts a formerly executed contract?

This issue was litigated recently in Ohio. In this case, Twila entered into a partnership agreement in 1986 with her husband and another couple. The partnership agreement contained a provision that stated: “To protect and preserve the family character of this Partnership, each of the undersigned partners agree to have prepared and to execute a last will and testament so as to ensure that his or her interest in this Partnership will, upon his or her death, pass to and vest in his or her surviving spouse. Each partner, who shall ultimately become a surviving spouse, further agrees to have prepared and execute a last will and testament so as to vest his or her interest in this Partnership in his or her children (lineal descendants). Should any partner neglect or fail to execute such last will and testament, so as to ultimately cause his or her partnership interest to pass to and vest in an individual, who is not a spouse or lineal descendant of these partners, then upon such event, the Partnership shall be liquidated and dissolved forthwith.”

From the proposed elimination of stepped-up basis to new grants for restaurants and live venues harmed by the COVID-19 pandemic, we have recently seen significant developments in estate planning and business law. To ensure that you stay abreast of these legal changes, we have highlighted a few noteworthy developments and analyzed how they may impact your estate planning and business law practice.

One-size-fits-all estate plans are impracticable due to the differences and varying complexities in each person’s estate. It is imperative to tailor an estate plan to meet each client’s needs and goals, so the drafting attorney must understand the character of the assets in the client’s estate and the planning options best suited for each client. Because high net worth clients are often very protective of their assets, planning objectives and recommendations for clients with large estates will almost always differ and be more complex than those for other clients. When estate planning attorneys understand the different planning techniques appropriate for larger estates, including the advantages and disadvantages of each, they can help high net worth clients create a plan that not only facilitates a smooth transition of assets to beneficiaries after death but also helps to sustain the longevity of assets.   

Florida has taken a major stand against abuse and fraud perpetrated on senior and disabled citizens. A week ago, the Protection of Elderly Persons and Disabled Adults Bill was passed; it is headed to the governor for signature. The new law’s effective date would be July 1, 2021. The bill has a myriad of protections for seniors and disabled individuals. Key provisions include:

With some 10,000 Americans turning 65 every day, elder law practice represents a huge opportunity for attorneys to expand their firms. Despite the growth of this aging demographic, those age 65 and up may still find it difficult to find an attorney to help them when it comes to legal strategies for estate planning, wills, and other needs.