African American-owned businesses are on the rise: The US Census Bureau estimates that there were 2.5 million Black-owned businesses in 2020. As African Americans pursue economic success through entrepreneurship, they must also consider creating plans to pass their businesses down to the next generation and ensure financial security in the event of incapacitation. There has generally been a lack of focus on generational wealth in the African American community, but information on the importance of planning and encouragement from estate planning attorneys will encourage African American business owners and their families to plan for their futures. It is therefore important to address the common myths that may lead African Americans to believe that an estate plan is unnecessary.

Medicaid laws can be cumbersome and tricky. Federal statutes set out the framework for certain Medicaid eligibility rules, and states can interpret them differently. One such rule can be found in 42 U.S. Code § 1396p(d)(4)(C), which covers transfers to pooled trusts. Based on differing interpretations of this statute, some states impose a transfer penalty when an individual over age 65 transfers funds within the look-back period to a pooled trust; some states do not. Minnesota has the former rule, but in a recent case, it did allow a Medicaid applicant over age 65 to transfer funds into a pooled trust without the imposition of a transfer penalty.

In this case, David moved into a long-term care facility. His siblings sold his home. David petitioned a court to transfer his proceeds into a pooled special-needs trust. The court issued an order allowing the transfer. Disbursements from the trust were limited to the sole discretion of the Trustee, and they could only be made for items or services not covered by Medicaid. David was 65 years old at the time the funds were transferred to the pooled trust. Because Minnesota penalizes transfers to pooled trusts for folks 65 years and older, David was assessed a penalty period where he wasn’t eligible for long-term care Medicaid benefits. David appealed.

Author: Stan Miller, JD

Based on my experience counseling estate planning clients, I believe they want us to engage with them on a level that transcends the trust and financial solutions we typically offer as attorneys and advisors. Our clients want us to engage with them on a legacy level. The conclusion expressed in the title of Daniel Scott’s article “Estate Planning is Dead” seems to be an overstatement. But Scott effectively showed that the work we do merely as planners does not address the deeper needs of our clients. According to Scott,