Blogs

Many SC residents use Revocable Living Trusts (RLT) as estate planning tools. And as I have written before, and was reminded again after meeting with gravely disappointed clients recently, the main purpose of a RLT is avoidance of probate. A RLT does NOTHING to PROTECT ASSETS in the event of nursing home placement, regardless how trusts are often advertised as ASSET PROTECTION TRUSTS!

There are 2 steps in having a RLT. The first is creating the RLT and this is typically the attorney's job. The second is "funding" the trust, i.e. transferring assets into the trust. Except for the attorney creating deeds for the transfer of real estate, the client, as Trustee, typically transfers all bank accounts, stocks, cars, etc. into the RLT. Transferring assets into the RLT is called "Funding" . For a RLT to have any value for your heirs, it should be funded with all of your assets(with some exceptions, IRA's for example).

One common problem is how clients presume that once their RLT is initially funded, there is not much else to do. A good Trustee monitors his trust during its entire existence. To have value as a probate avoidance tool, not only must assets

A pet trust is legal technique available to make sure your pet receives proper care after you die by providing enough money to a trusted person (the "Trustee") who will be under legal obligation to make arrangements to use the money left in Trust for the proper care of your pet according to your instructions.

The trustee can be a seperate person, or entity, but may also be the caregiver. The assets in Trust will pay for your pet’s expenses.

There are two primary types of pet trusts.

The first is called a “statutory pet trust,” and is

Veterans and their families should become more informed about benefits available. Too often, Veterans go without services they need simply because they are unaware of benefits they've earned through their service. According to a recent report, about 105,000 veterans were using the Aid and Assistance benefit (A&A) last year. Yet the pool of potential recipients is so much bigger. There are 2.3 million World War II, 2.6 million Korean War vets, and 7.7 million Vietnam vets still living.

For example, millions of Veterans fail to access the A&A benefit, which is meant to help aging veterans and their surviving spouses, pay for care at home, in an assisted-living facilities, or in a nursing homes.

The A&A benefit can pay up to $1,949 per month to provide care for single or married veterans or their surviving spouses at home, in assisted living facilities, or in a nursing homes. Applicants must meet certain medical and financial thresholds,

I will begin a series of Elder Law workshops starting Wednesday Nov 10 at Pinckney Hall in Sun City. Each workshop starts at 10:30 a.m. You can reserve your place by calling 843-757-5294. Bagels, muffins and coffee will be served at each event.

The first workshop is Elder Law 101. We will cover basic estate planning tools such as wills , revocable and irrevocable trusts , power of attorney , Veteran's benefits , Medicaid and nursing home planning , joint bank accounts, and several other items.

On December 9, 2010 the workshop topic will cover Long Term Care Planning. This will be a joint presentation. Sam Grossley, a Certifed Financial Planner with Mass Mutual ,and expert in long-term care insurance products, will review the various types of long term care insurance products. I will describe the basic eligibility requirements for medicaid and VA benefits eligibility and some planning techniques that are available. This should give attendees an ability to see two alternatives methods of planning for long-term nursing home care.

On January 27, 2011 the third Elder Law workshop will be exclusively on the topic of Trusts and Being a Trustee, including revocable living trusts, irrevocable trusts, special needs trusts , residential real estate trusts , credit shelter trusts , and other types of trusts. The first 10 callers to sign up will receive a free copy of a "Guide for Administering the Revocable Living Trust- What every Trustee Should Know" by Thomson/West Publishing.

Sorry, but only residents of Sun City may attend.

Often clients will take their own estate planning steps to avoid probate by using various bank account registration tools. The "In Trust For", "Payable on Death", "Transfer on Death" type accounts are variations for achieving the same goal: Avoiding probate by directing payment of the balance on the account to designated persons. By using these type accounts individuals can try to avoid probate without the costs of establishing a Revocable Living Trust, and save the resources that would otherwise be used to wrap-up an estate.

These account types may be well and good for some folks...but what about the family home, or vacation home or timeshare? How does one go about avoiding probate when all bank/financial accounts will avoid need for probate, but in addition to bank accounts,there is real estate owned?

Changing the bank accounts into POD, ITF or naming death benficiaries of insurance and annuity contracts can work well for financial accounts...if the family home remains in the individual decedents name, there is no avoiding probate for that asset.

An alternative to a full blown, and more expensive Revocable Living Trust, an abbreviated type of Real Estate Trust is available. The purpose of the Real Estate Trust is to simply

Legal Zoom is one of the most prominent sellers of do-it-yourself Wills and other estate planning documents.

If a simple Will costs you $125 (as my office charges) and online legal document purveyor Legal Zoom charges $90 for the same document, is the $35 difference in savings always worth choosing the less expensive of the two?

The heirs of Anthony Farrentino would probably not think so.

Legal Zoom is now the target of a class action lawsuit in California charging that the company engages in deceptive business practices and is practicing law without a license. The lawsuit was filed in California by Katherine Webster, the niece of the late Anthony J. Ferrantino, and the executor of his estate.

Knowing that he had only a few months to live, Mr. Ferrantino
asked Webster to help him use LegalZoom to execute a Will and Living Trust. Based on LegalZoom's advertising, Webster says

When one believes his or her estate is in jeopardy because of an imminent prospect of placement in a long-term care nursing facility, improvident decisions are often made out of fear, or upon erroneous, but well intentioned advice. The costs of nursing home placement can be devastating to any estate, costing between $60,000 to $90,000 per year. So there is reason for concern,

A recent case in Ohio illustrates the dangers of gifting upon

Yes. And No. It depends on what you are trying to protect your assets from.

Does a Revocable Trust protect my estate against taxes? Not necessarily.

First, there are no South Carolina Estate taxes. Federal Estate Taxes are imposed only on larger estates (in 2009 that amount was $3,500,000. Congress will soon decide on a new level of estate taxation)(article amended 3/11/10). Estate taxes are a concern for a relative small segment of population (less than 1%) and only high net worth individuals need to engage in trust tax planning. It is unlikely that the average resident needs such "asset protection" from estate taxes. But married couples can, if they elect to do so, use specialized Living Trusts to shelter large amounts from taxes. But, A Revocable Living Trust is not

This is the most frequently asked estate planning questions I'm asked. Understandable, since so many clients in the area are from other states.

The standard answer sounds easy, but is not as simple as it seems.

The basic rule is: If a Will would be legal and valid in the state where it was signed, it is valid in SC. So, for the most part, just because you move to SC from another state you do NOT need another Will prepared.

But here's the rub...in order to know whether an out-of-state

There is no doubt that the REVOCABLE Living Trust (RLT) has wide ranging popularity in South Carolina.  The probate process can be onerous and expensive, and a REVOCABLE Living Trust is oftentimes (not ALL the time) the best way to avoid the probate process. But there is another type of trust that can provide the benefit of probate avoidance, and add an extra layer of protection to your assets- The IRREVOCABLE INCOME TRUST.

The best way to understand the IRREVOCABLE TRUST is to compare it against the REVOCABLE LIVING TRUST (RLT).