What Is Next for Your Estate Plan?
Having an estate plan is a great way to ensure you and your loved ones are protected today and in the future. When creating an estate plan with our estate planning attorneys in Reno, we look at what is going on in your life at that time. But because life is full of changes, it is important to make sure your plan can change to accommodate whatever life throws your way. Sometimes, we can make your first estate plan flexible to account for potential life changes. Other times, we must change or add to the tools we use to ensure that your ever-evolving wishes will be carried out the way you want.
Life is constantly changing. The following are some important events that may require you to reevaluate your estate plan in Reno:
It is important to know when you create your first estate plan in Reno, that you are not locked into this plan for the rest of your life. The following are common changes we can make to your estate plan to ensure that we adequately address your evolving concerns and wishes.
A will (sometimes referred to as a last will and testament) is a tool that allows you to leave your money and property to anyone you choose. It names a trusted decision-maker (a personal representative or executor) to wind up your affairs at your death, lists how your money and property will be distributed, and appoints a guardian to care for your minor children. If you rely on a will as your primary estate planning tool, the probate court will oversee the entire administration process at your death, but the probate process is expensive, time-consuming, and on the public record.
On the other hand, a revocable living trust is a tool in which a trustee is appointed to hold title to and manage the accounts and property that you transfer to your trust for one or more beneficiaries. Typically, you will serve as the initial trustee and be the primary beneficiary. If you are incapacitated (unable to manage your affairs), the backup trustee will step in and manage the trust for your benefit with little interruption and with less potential for costly court involvement. Upon your death, the backup trustee manages and distributes the money and property according to your instructions in the trust document, again without court involvement.
If your wealth has grown or you have new loved ones to provide for, you may find the privacy, expediency, and potential cost-savings associated with a revocable living trust more appropriate for your situation. Consult with Estate Planning Reno to see if this option is right for you.
At some point, you may decide that you need life insurance—or more of it—to provide for your loved ones sufficiently. If the value of your life insurance is especially high, you may want to consider adding protection for the funds in your estate plan, as well as engaging in estate tax planning. Both goals can be accomplished by using an irrevocable life insurance trust (ILIT). Once you create the ILIT, you fund it either by transferring ownership of an existing life insurance policy into the trust or by having the trust purchase a new life insurance policy. Once the trust owns a policy, you then make cash gifts to the trust to pay for the insurance premiums. These gifts can count against your annual gift tax exclusion, so you likely will not owe taxes at the point of these transfers. Upon your death, the trust receives the death benefit of the policy, and the trustee holds and distributes the money according to your instructions in the trust document. This tool allows you to remove the value of the life insurance policy and the death benefit from your taxable estate while allowing you to control what will happen to the death benefit. An ILIT can also be helpful if you want to name beneficiaries for the trust who differ from the beneficiaries you name in other estate planning tools.
As you accumulate more wealth or become more philanthropically inclined, you may wish to include separate tools to benefit a cause that is near and dear to your heart. Depending on your unique tax situation, using tools such as a charitable remainder or charitable lead trust can allow you to use your accounts or property that are increasing in value to benefit the charity while offering you some potential tax deductions.
A charitable remainder trust (CRT) is a tool designed to potentially reduce both your taxable income during life and estate tax exposure when you die by transferring cash or property out of your name (in other words, you will no longer be the owner). As part of this strategy, you will fund the trust with the money or property of your choosing. The property will then be sold, and the sales proceeds will be invested in a way that will produce a stream of income. The CRT is designed so that when it sells the property, the CRT will not have to pay capital gains tax on the sale of the stocks or real estate. Once the stream of income from the CRT is initiated, you will receive either a set amount of money per year or a fixed percentage of the value of the trust (depending on how the trust is worded) for a term of years. When the term is over, the remaining amount in the trust will be distributed to the charity you have chosen.
A charitable lead trust (CLT) operates in much the same way as the CRT. The major difference is that the charity, rather than you as the trustmaker, receives the income stream for a term of years. Once the term has passed, the individuals you have named in the trust agreement will receive the remainder. This can be an excellent way to benefit a charity while still providing for your loved ones. Also, you may receive a deduction for the value of the charitable gifts that are made periodically over the term. These deductions may offset the gift or estate tax that may be owed when the remaining amount is given to your beneficiaries.
Adding Documents to Care for Your Minor Child
If you have not reviewed your estate plan since having or adopting children, you should consider incorporating some additional tools into your estate plan with estate planning attorneys in Reno. An important tool recognized in Nevada is a document that grants temporary guardianship over your minor child. This can be used if you are traveling without your child or are in a situation where you are unable to quickly respond to your child’s emergency. This document gives a designated individual the authority to make decisions on behalf of the minor child (with the exception of agreeing to the marriage or adoption of the child). This document is usually only effective for six months to a year but can last for a longer or shorter period, depending on your state’s law. You still maintain the ability to make decisions for your child, but you empower another person to have this authority in the event you cannot address the situation immediately.
We are committed to making sure that your wishes are carried out in the way that you want. For us to do our job, we must ensure that your wishes are properly documented and that any relevant changes in your circumstances are accounted for in your estate plan. If you need an estate plan review or update, give us a call. Our expert team at Estate Planning Reno is here to assist you.
When establishing a third-party special needs trust, one of the most critical decisions you'll make is choosing the trustee. The trustee will manage the trust assets, ensure that the beneficiary's needs are met, and navigate the complex regulations surrounding government aid. In this article, we will explore the key responsibilities of a trustee, the pros and cons of professional versus family trustees, the legal considerations involved, and the long-term impact of this decision.
The trustee is responsible for managing the assets held in the trust. This includes investing the assets wisely, ensuring they grow and are preserved for the future. A trustee must be knowledgeable about financial management or have access to professional advice to make informed decisions.
Another crucial responsibility is making distributions to the beneficiary. The trustee must ensure that distributions align with the terms of the trust and do not jeopardize the beneficiary's eligibility for government aid programs such as Supplemental Security Income (SSI) and Medicaid. This requires a thorough understanding of the rules governing these programs.
The trustee must balance the need to preserve trust assets with the need to provide for the beneficiary's current and future needs. This includes paying for medical expenses, education, housing, and other necessities that enhance the beneficiary's quality of life.
Appointing a family member as the trustee has several advantages. Family members are often more familiar with the beneficiary's needs and preferences, which can make them more compassionate and understanding trustees. They may also be more willing to serve without compensation, which can preserve trust assets.
However, there are downsides to consider. Family members may lack the financial and legal expertise required to manage the trust effectively. They may also face conflicts of interest or emotional stress from managing the trust, especially if they are already involved in caregiving.
A professional trustee, such as a lawyer, bank, or trust company, brings expertise in managing trust assets and navigating legal requirements. Professional trustees can provide a high level of impartiality and are less likely to face conflicts of interest. They also offer continuity, ensuring the trust is managed consistently over time.
The main drawback of professional trustees is cost. They typically charge fees for their services, which can be a percentage of the trust assets or a flat fee. Additionally, they may not have the same personal connection to the beneficiary as a family member would.
Trustees have a fiduciary duty to act in the best interests of the beneficiary. This means they must manage the trust assets prudently, avoid conflicts of interest, and comply with the terms of the trust. Trustees can be held legally liable for any breach of these duties.
Serving as a trustee involves potential legal liabilities. If the trustee mismanages the trust assets or fails to comply with legal requirements, they can be sued by the beneficiaries or other interested parties. It is crucial for trustees to understand these risks and seek professional advice if necessary.
The choice of trustee has a profound impact on the long-term welfare of the beneficiary. A well-chosen trustee can ensure that the beneficiary's needs are met without jeopardizing their eligibility for government aid. They can also provide stability and continuity, which are essential for the beneficiary's peace of mind.
A trustee's ability to manage the trust effectively will determine whether the trust can meet its intended purpose. This includes preserving assets for the beneficiary's lifetime, making appropriate distributions, and adapting to changes in the beneficiary's needs and circumstances.
Choosing the right trustee for a third-party special needs trust is a decision that requires careful consideration. It involves balancing the need for expertise and impartiality with the personal connection and understanding that a family member can provide. At Anderson, Dorn & Rader Ltd., we are here to help you navigate this complex process and ensure that your loved one's future is secure. Contact us to schedule a consultation and discuss how to set up a special needs trust with the appropriate trustee.
If you have a person in your life who has a disability, your plans for the future must include making sure your loved one is cared for. Unfortunately, many people make mistakes when they make a well-meaning attempt to provide for a loved one with special needs. The actions that you take could impact a disabled person’s access to important benefits, so it is vitally important that you work with a special needs planning lawyer if you have a loved one in your life with a disabling condition.
Anderson, Dorn & Rader, Ltd. can provide comprehensive assistance with special needs planning. Our legal team helps parents with special needs children and other friends and relatives of individuals with disabilities. Give us a call at 775-823-9455 to talk with a Reno special needs planning lawyer about the services we can provide to you and to get answers to questions you have about special needs planning including:
Why is Special Needs Planning Important?
Special needs planning is important to ensure that you can help a relative or friend with a disability to have the highest possible quality of life. For parents of a disabled child, this can mean making sure that a child is cared for and has a loving place to live after parents are no longer alive to provide a home. For parents, relatives, and friends, it can mean providing a financial gift to someone with a disability so that person can have a better standard of living.
Because people with disabilities often rely heavily on government programs such as Supplemental Security Income to provide income or Medicaid to pay for costs of care, you cannot just give a financial gift to a person with special needs. If you make a gift during your lifetime or leave money in your will to a disabled person, you could cause a loss of access to means-tested benefits. Both SSI and Medicaid limit the amount of resources a person can have and still qualify for coverage, and the loss of these benefits could be devastating to someone with a disability.
There are ways you can ensure that a gift does not result in a loss of benefits, and there are steps you can take to ensure your disabled child, relative, or friend is provided for after you are gone. Anderson, Dorn & Rader, Ltd. can help you to explore the legal tools you need to use to make a smart special needs plan.
What is Involved in Special Needs Planning?
In most cases, special needs planning involves the creation of a specific type of trust. A special needs trust is designed to allow a disabled person to receive a financial gift to enhance quality of life, without causing a loss of benefits.
Anderson, Dorn & Rader, Ltd. can help you to create and fund this trust, which can be used to provide for extras that Medicaid, Supplemental Security Income, and other government programs will not cover. We also provide assistance to trustees who have been placed in charge of managing a special needs trust and who want to make sure they comply with the rules so they don’t put benefits in jeopardy.
Our Reno special needs planning lawyers can also provide help to parents in making arrangements for a disabled child to have a safe living situation and a loving guardian after the parents pass away.
Whatever your goals are for the person in your life who has special needs, we can help you to identify the types of legal tools that can allow you to achieve those plans.
How can a Special Needs Planning Lawyer Help You?
Ensuring that a disabled loved one is cared for and has the highest possible quality of life is a noble goal. You do not want your efforts to improve life for someone with special needs to actually cause a loss of benefits or other problems. You need to make sure your gifts you give and efforts you make to help have a beneficial impact now and in the future. Anderson, Dorn & Rader, Ltd. can help you.
To find out about the personalized assistance our legal team can provide with the special needs planning process, give us a call at 775-823-9455 or contact us online today. An experienced and compassionate Reno special needs planning lawyer will offer the type of personalized solutions you and your family need to ensure that a disabled person is always cared for no mater what the future brings.
There is no cookie-cutter, one-size-fits-all estate plan, and this is why it is necessary to receive personalized counsel from a licensed estate planning attorney before you make any decisions. Every situation is unique, and your own financial position and your intentions will be a large part of the equation. On the other side of the coin, you should also take the life situation of each person on your inheritance list into account.
With the above in mind, if you have a child with a disability on that list, you should definitely speak with our firm about special needs planning. If you take action on your own without the appropriate legal guidance, you could make mistakes that wind up yielding negative consequences in the future. This is because of the fact that many children with disabilities rely on need-based government benefits.
One of these is Medicaid, which is a source of health insurance for people that have very limited financial resources. Supplemental Security Income is another program that provides a modest stream of income for people that cannot earn money on their own because of disabilities. Since these are need-based programs, a sudden improvement in financial status could cause a forfeiture of eligibility.
Fortunately, there is an estate planning solution that can be utilized to address the situation if you want to provide for someone with special needs without doing any harm in the process. You could establish a supplemental needs trust for the benefit of a loved one that you would like to make more comfortable. These legal devices are sometimes called special needs trusts.
The trustee that you name in the trust declaration would be empowered to use assets that you conveyed into the trust to satisfy the supplemental needs of the beneficiary. These expenditures would not impact benefit eligibility, but it is important to note that the trustee would not be able to provide direct monetary distributions to the beneficiary. Educational expenses, medical and dental costs that are not covered by Medicaid, vacations, electronic devices, and many other goods and services would be supplemental needs that could be satisfied by the trustee.
If you establish a special needs trust for the benefit of someone else with your funds, it would be a third-party special needs trust. Under program rules, Medicaid is required to seek reimbursement from the estate of a deceased individual that was enrolled in the program. However, the Medicaid program cannot seek reimbursement from assets that remain in a third-party special needs trust after the death of the beneficiary.
Sometimes, a person with a disability will come into some money through a personal injury settlement or judgment. In other instances, a well-meaning individual could leave an inheritance to someone that is enrolled in these government programs. Under these circumstances, it is possible for a parent, a grandparent, a legal guardian, or a court to establish a first party or self-settled special needs trust with the funds.
The same situation would exist with regard to the ability of the trustee to use the assets in the trust to satisfy the supplemental needs of the beneficiary. However, there is one major difference. After the death of the beneficiary, assets that remain in the trust could be absorbed by Medicaid.
Our estate planning attorneys are very committed to education, because knowledge is power when it comes to estate planning and elder law matters. You can obtain some great information if you visit this website on a regular basis, and we also offer Webinars on an ongoing basis. There are a number of sessions on the calendar at the present time, and we urge you to take a look at the schedule and make plans to attend one of these informative Webinars.
They are offered on a complimentary basis, but we like to know how many people to expect, so we ask that you register for the Webinar that works for you in advance. There is a complete list of the dates of our Webinar schedule page, and you can follow the simple instructions to register so your seat will be reserved.
If you are ready to take action to discuss special needs planning or any other estate planning matter with one of our attorneys, we would be more than glad to help. You can send us a message to request a consultation, and if you would prefer to speak with someone in person, give us a call at 775-823-9455.
There are nearly 3 million special needs children in the United States. How many of those children's families have a special needs plan in place? A basic estate plan will not likely be sufficient to provide a lifetime of special needs care for these children when their parents pass away. Unfortunately, very few families are sufficiently prepared to provide for their special needs child. According to reports, only about 62% of families with special needs children have a proper plan in place to provide the lifetime of care their children will need when the parents are no longer able to provide it.
Consider life insurance coverage as a resource
Believe it or not, probably the most common way to provide for the anticipated costs of a lifetime of special needs care is through a life insurance policy. Indeed, nearly 85% of families with a special needs child under the age of five, have a life insurance policy in place. But, parents with special needs children ages 13-18, are less likely to have an insurance policy. The problem is, the cost of care for children with special needs tends to increase with age. The reality is, most parents are unaware of the fact that they can access the accumulated cash of certain policies, in order to cover costs of their child’s special needs. Even those that are aware of the cash value benefit, nearly 72% do not actually take advantage of the benefit.
Mistakes to avoid in special needs planning
Simply having a special needs plan is not much of a benefit, if it is riddled with mistakes. Almost half of all parents with special needs children make the mistake of leaving the funds directly to their children, or naming their children as the beneficiary. Both of these methods will likely disqualify their children for necessary government benefits. Another problem is that the majority of parents with special needs children fail to take the necessary step of creating a special needs trust. This special type of trust is necessary to provide for any supplemental needs and expenses, while protecting the child’s eligibility for government benefits.
How to provide for a lifetime of special needs care
There are basically four easy steps parents can take to ensure that the necessities of their special needs child will be protected. First, you must talk to your estate planning attorney to determine how to develop a financial plan. This plan needs to be adequate for funding a lifetime of support for your special needs child. Second, create a special needs trust that will provide protection for your assets, while ensuring that your child will remain eligible for government benefits and services. Third, select an appropriate guardian for your special needs child. Discuss your decision with that person and inform him or her of the commitment and obligation that will be expected. It is important to ensure that the guardian is willing and able to serve in this important role. Finally, purchase a permanent life insurance policy that will cover the anticipated costs of your special needs child’s care.
If you have questions regarding special needs strategies, or any other special needs planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.
Families of loved ones with special needs must have a special needs plan to ensure the continued care of their special loved ones. If you have a child or an adult family member with a disability, and you ever become incapable of caring for them, a special needs plan will provide the instructions and resources necessary to continue their care. In order to be sure you and your family are properly prepared, you should know how to establish a special needs plan and avoid common mistakes.
Who needs a special needs plan?
Caring for a disabled loved one requires attention to their medical and personal needs, as well as their financial affairs, in some cases. Another consideration that many families with special needs have, is protecting a loved one’s eligibility for assistance from need-based government programs. Special needs planning is designed to provide care for the disabled, while guarding their eligibility for those benefits programs. An effective special needs plan will often consist of a financial plan, a benefits plan, a care plan and an estate plan that includes the establishment of a special needs trust.
Don’t rely entirely on other family members
One mistake that clients often make is assuming that other family members will automatically take over the responsibility of providing care to their disabled loved one, when the clients are no longer able to do so. Whether or not that is a realistic assumption, you should still provide the basic groundwork of a care plan. We all know that special needs care can be complicated and costly depending on the nature of the disability. Your loved one with special needs will benefit from the security that a special needs plan will provide.
Don’t forget to establish and fund the special needs trust
A special needs trust is an integral part of most special needs planning. The special needs trust will ultimately own and protect the assets you choose to set aside as the financial resources for your loved one’s needs. The special needs trust will allow the beneficiary to benefit from the trust assets while remaining eligible for needs-based public benefits. Creating the special needs trust is only the first step. The property must also be transferred or “funded” to the trust. Typically, this means transferring ownership of the property into the name of the trust. If the funding process is not successfully completed, then your trust will be defective leaving your loved one’s future uncertain and unprotected.
Create your special needs plan now
The worst mistake you can make is putting off the planning process. In reality, every person with special needs will benefit greatly from having a special needs plan in place. The plan should be created as soon as possible, before something unexpected happens. Imagine if you, as the primary caregiver, die or become incapacitated before you can complete your special needs planning for a disabled loved one. The result could be tragic.
If you have questions regarding special needs planning, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.
If you have special needs children, you have more issues to be concerned with. Many parents are not prepared for the long-term expense of caring for special needs children. Couple that responsibility with trying to prepare for their own long-term care and retirement needs, the responsibility can seem overwhelming.
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If you have ever cared for a disabled individual, you are aware of all that is required to maintain proper care for them, including not only medical needs, but personal needs as well. You may also be familiar with the need-based government assistance programs that are available, such as Medicaid and Supplemental Security Income (SSI). Both of these programs determine eligibility based on income and resources. For instance, in order to satisfy the SSI resource requirements, your assets, with exception of those that are exempt, must be valued at less than $2,000 if you are single, $3,000 if you are married. It is critical that you establish an estate plan that addresses the future needs of a disabled love one and that protects that person’s eligibility for government benefits. A Special Needs Trust is one type of estate planning tool available to you.
When designing a plan for the future needs of your disabled loved one, there are many important issues to consider. Following are just three: (1) who will be responsible for caring for that person; (2) how will assets be made available for your loved one without jeopardizing eligibility for government benefits; and (3) how do you ensure that your loved one will be cared for properly. It is best to address these important issues now, while you still can.
The Special Needs Trust is usually an essential component in your comprehensive plan. Like other estate planning tools, Special Needs Trusts are very complex. Not only are there many income tax considerations, these trusts are also subject to scrutiny by the Social Security Administration, Medicaid and other state or local benefit programs, each of which may have intricate rules that must be satisfied. It is extremely important that you consult with an estate planning attorney who is competent to handle all the issues involved.
Always consider and include instructions and provisions for personal care and the preferences of your loved one, when planning for their care. The future caregiver may not know the personal preferences of your loved one. You can provide that information in the form of a "Memorandum of Intent", which should then be included with your portfolio containing your living trust and other estate planning documents. This will provide peace of mind knowing that the needs and desires of your loved one will still be met, even after you are gone. Great care should be used when selecting a qualified Reno estate planning attorney to help create an estate plan that involves a beneficiary with special needs.
An important aspect of estate planning considers the needs of beneficiares and how best to meet those needs. If you have a beneficiary with a disability it is crtitical to understand the public benefits that they are receiving, or may be eligible to receive, and how a distribution from your estate may affect those benefits. An outright distribution from your estate to such a beneficiary could disqualify him or her for public benefits, including medical benefits, which could be devastating. Medicaid benefits can provide for very costly long-term medical care and they're only available to those who do not have the resources to pay for them out of pocket.
A third-party special needs trust will provide for the special needs of a disabled beneficiary while preserving eligibility for public benefits, including Medicaid and Supplemental Security Income. The language of a Special Needs Trust must be extremely precise so as not to make the assets in the trust directly available to the beneficiary. Generally, the trust resources can only be used for what are considered to be "supplemental needs" under Medicaid rules. A third-party special needs trust may be revocable and you can include a secondary beneficiary to receive distribution of the remaining assets after the primary beneficiary passes away.
By creating a Special Needs Trust for your disabled beneficiary you can ensure that he or she receives all the benefits of your estate without jeopardizing his or her eligibtility for public benefits. Special-needs planning is a very sensitive matter that requires the highly technical expertise of an estate planning attorney knowledgeable in the complex area of disability planning.
