What is estate planning?
Your estate is comprised of everything you own— your car, home, other real estate, checking and savings accounts, investments, life insurance, furniture, personal possessions. No matter how large or how modest, everyone has an estate and something in common—you can’t take it with you when you die.
When that happens—and it is a “when” and not an “if”—you probably want to control how those things are given to the people or organizations you care most about. To ensure your wishes are carried out, you need to provide instructions stating whom you want to receive something of yours, what you want them to receive, and when they are to receive it. You will, of course, want this to happen with the least amount paid in taxes, legal fees, and court costs.
What is special needs planning?
A special needs beneficiary requires more than your standard estate planning. Among other things, you will want to establish a Special Needs Trust that will benefit your loved one now and when you are gone if they cannot take care of themselves.
A Special Needs Trust is established to manage funds for someone who may not be able to do so himself or herself due to disability. The second reason for this trust is to preserve the beneficiary’s eligibility for public benefits, whether that is Medicaid, Supplemental Security Income (SSI), public housing, or any other program. They come into play in a multitude of situations, including parents planning for a disabled child, a disabled individual coming into an inheritance or winning or settling a personal injury claim, or one spouse planning for a disabled spouse.
What is a will and what is a trust? Why are they different?
A Will, sometimes called a “last will and testament,” is a document that states your final wishes. It is read by a county court after your death, and the court makes sure that your final wishes are carried out.
What a Will Does
Most people use a will to leave instructions about what should happen to their property after they die. However, you can also use a will to
Name an executor.
Name guardians for children and their property.
Decide how debts and taxes will be paid.
Provide for pets.
Serve as a backup to a living trust.
A trust is a form of ownership of property, whether real estate or investments, where one person – the trustee – manages such property for the benefit of someone else – the beneficiary. The trustee must follow the instructions laid out in the trust agreement as to how to spend the trust funds on the beneficiary’s behalf – whether and when to distribute the trust income and principal. In general, trusts fall into two main categories: self-settled trusts that the beneficiary creates for himself with his own money and third-party trusts that one person creates and funds for the benefit of someone else.
What is probate?
Probate is a legal process that takes place after someone dies. It includes: proving in court that a deceased person's will is valid (usually a routine matter) identifying and inventorying the deceased person's property.
Probate usually works like this: After your death, the person you named in your will as executor -- or, if you die without a will, the person appointed by a judge -- files papers in the local probate court. The executor proves the validity of your will and presents the court with lists of your property, your debts, and who is to inherit what you've left. Then, relatives and creditors are officially notified of your death.
Your executor must find, secure, and manage your assets during the probate process, which commonly takes a few months to a year. Depending on the contents of your will, and on the amount of your debts, the executor may have to decide whether or not to sell your real estate, securities, or other property. For example, if your will makes a number of cash bequests but your estate consists mostly of valuable artwork, your collection might have to be appraised and sold to produce cash. Or, if you have many outstanding debts, your executor might have to sell some of your property to pay them.
In most states, immediate family members may ask the court to release short-term support funds while the probate proceedings are going on.
The court will then grant your executor permission to pay your debts and taxes and divide the rest among the people or organizations named in your will. Finally, your property will be transferred to its new owners.
What does “estate” mean?
Believe it or not, you have an estate. In fact, nearly everyone does. No matter how large or small, your estate is comprised of everything you own— your car, home, other real estate, checking and savings accounts, investments, life insurance, furniture, personal possessions.
How is property divided up when I die?
You probably want to control how your things are given to the people or organizations you care most about when you are gone. To ensure your wishes are carried out, you need to provide instructions in your Will stating whom you want to receive something of yours, what you want them to receive, and when they are to receive it. You will, of course, want this to happen with the least amount paid in taxes, legal fees, and court costs.
Your plan should be reviewed and updated as your family and financial situations (and laws) change over your lifetime.
What is a special needs trust?
A special needs trust is set up for a person with special needs to supplement any benefits the person may receive from government programs. A properly drafted special needs trust will allow the beneficiary to receive government benefits while still receiving funds from the trust.
What type of special needs trust do I need?
There are three main types of special needs trusts: the first-party trust, the third-party trust, and the pooled trust. All three name the person with special needs as the beneficiary.
"First-party" special needs trust holds assets that belong to the person with special needs, such as an inheritance or an accident settlement.
"Third-party" special needs trust holds funds belonging to other people who want to help the person with special needs.
“Pooled trust” holds funds from many different beneficiaries with special needs.
We listen carefully to all of your needs and evaluate your assets and family situation before recommending a trust that works best for you.
How do I fund a special needs trust?
Many different types of resources can be used to fund a Special Needs Trust. They may include your family’s savings, investments in stocks and mutual funds, Certificates of Deposit (CDs), military benefits, Individual Retirement Accounts (IRAs), real property and standard government benefits. Parents and other family members and even friends can name the trust as a beneficiary in their wills. Your life insurance policy can also name the trust as a beneficiary. Anyone can contribute to the trust at any time. If the trust beneficiary (the special needs individual) inherits money or other property, that can be placed in the trust as well.
What is SSI?
Supplemental Security Income (SSI) is a Federal income supplement program funded by general tax revenues (not Social Security taxes). It is designated to help aged, blind and disabled people who have little to no income, and it provides cash to meet basic needs for food, clothing and shelter.
What is Medicaid?
Medicaid is a jointly funded, Federal-State health insurance program for low-income and needy people. It covers children; the aged, blind, and/or disabled and other people who are eligible to receive federally assisted income maintenance payments.
What is Medical Assistance?
Medicaid, also called Medical Assistance (MA) pays the medical bills of needy and low-income individuals. It is administered by the State and pays medical bills with Federal and State funds.
What is a “Medicaid waiver”?
A waiver is a special program designed by a State to cover needed home and community-based services (HCBS) as an alternative to receiving care in an institution such as a nursing home. To become a waiver participant an individual must qualify by meeting certain criteria. Each waiver will have different criteria; for example, having a certain medical condition or needing a specific level of care.
I’ve made a plan, signed my documents, I’m done, right?
You’re done for now, but we treat our clients like our family. We want to know how you are doing, have family circumstances changed, are there any questions you might have. We offer fiduciary services and can act as an advocate on your behalf both now and for your loved one in the future. We’re in this for the long haul.`
You have questions? We have answers.
Navigating the ins and outs of Estate Planning can be complicated. We're here to help with answers to a list of commonly asked questions. Fill out our quick intake form and schedule a free 15 minute consultation to discuss further questions you may have.