Saturday, October 24, 2009
Sunday, October 18, 2009
Sunday, October 11, 2009
Estate Planning Ideas for Single, unmarried parents
Estate Planning Ideas for Single, unmarried parents
by Kenneth A. Vercammen, Esq
There may come a time when a parent is unable, due to physical or mental incapacity, to take care of his/her minor children. If a parent dies, the minor children will need a guardian. In these circumstances, those caring for the children, as well as the courts will need direction. By writing and executing a Will, which includes instructions on guardianship one may select someone, either individually or jointly, with the legal authority to act for minor children and assume control over the assets of the children. Estate planning, which includes the execution of a Will, is just as important for young families with minor children as they are for senior citizens.
As average Americans, we work 80,000 hours in a lifetime, or 45 to 55 years. In spite of all our resources and the assets we earn during our lifetime, the vast majority of Americans do not take the time to create the legal instructions to guide the court or a guardian upon their death. National statistics indicate that more than 50% of Americans die without leaving a will. In the absence of a will or other legal arrangement to distribute property at death, the State must step in to administer the estate and decide who gets custody of your children and handles your money. This process is called the law of intestacy. The result can be lengthy delays in the distribution of your estate, court battles between relatives and your children being raised by someone you do not favor. Without a Will, your family will have to pay substantial costs for accountants, attorneys, bonding companies and probate fees.
In planning, make sure your assets go to your loved ones or favorite charity, not an "ex". Therefore, you may wish to do the following:
1) Have an Elder Law attorney prepare a Will to distribute your assets to the people you care about the most. If you already have a Will, prepare a new Will and have the old Will revoked. (Your estate planning attorney will explain this to you.)
2) Prepare a power of attorney to select someone to handle your finances if you become disabled. Have your old power of attorney revoked.
3) Select the correct beneficiary on assets you may own, such as stocks, bank accounts, IRA, and other financial assets.
4) Change your beneficiary under your own life insurance, whether whole life insurance or term insurance.
5) Contact your employer's human resources and change the beneficiary on life insurance, pension, stock options or other employee benefits. Note that if you are not yet divorced, your spouse may have to sign a written waiver permitting you to change beneficiaries.
6) If you are not yet divorced, keep your personal papers at a location where an ex-spouse or the child's parent can't destroy them.
7) If you have minor children, nominate someone under a Will to serve as guardian to the children. Although the surviving parent obviously has first right of custody of children, they may not even want custody.
8) Make sure the trustee for any funds designated for your children is the "right" trustee.
9) Have your attorney prepare a prenuptial agreement, if you decide to get married.
10) In New Jersey, if you are married and living with a spouse, under certain instances the surviving spouse has a right to "elect against the will". The disinherited spouse may like to elect against the Will and try to obtain one third of the estate. Your attorney can explain how you can protect yourself and your children.
ESTATE PLANNING TO PROTECT YOUR CHILDREN
IF YOU HAVE NO WILL (LEGALLY REFERRED TO AS "INTESTATE SECESSION"):
If you leave no Will or your Will is declared invalid, because it was improperly prepared or is not admissible to probate:
* State law determines who gets assets, not you
* Additional expenses will be incurred by your heirs and extra work will be required by the heirs of their attorney to qualify an administrator
* The Judge determines who gets custody of your children
* Possible additional State inheritance taxes and Federal estate taxes
* If you have no spouse or relatives, the State may take your property
* The procedure to distribute assets becomes more complicated, and the law makes no exceptions for persons in unusual need or for your own wishes.
* It may also cause fights and lawsuits within your family
When loved ones are grieving and dealing with death, they shouldn’t be overwhelmed with Financial concerns. Careful estate planning helps take care of that.
Guardians
Most individuals appoint their spouse to act as Guardian of the person and property of their minor children. It is suggested that your Will include a clause which provides that in the event your spouse predeceases you, or is unsuitable or ceases to act as Guardian of the person and property of your minor children, you appoint a trusted family member or close friend to act as successor Guardian of the person and property of your minor children.
Trustee
Select a trusted person, a close relative or friends, who will invest and hold your children's money. In your Will you can instruct the Trustee to apply amounts of income and principal as they, in their sole discretion, deem proper for the health, maintenance, education, welfare, or support of your children or other minors. Direct that the trustee shall accumulate any income not needed for the above purposes, paying and transferring the portion held in trust to the beneficiary upon his or her attaining the age of majority or whichever age you select.
Children born after you sign the Will
Many people direct that the provisions of their Will also applies to afterborn children. Accordingly, if you have any additional children subsequent to the execution of this Will, then wherever you have designated only your named children, you intend that all of your children shall share equally in the relevant provisions of your Will.
In addition to having a formal Last Will and Testament individuals are encouraged to have a Power of Attorney and also Living Will. Moreover, we also recommend they plan ahead and write messages to their family and anticipated executor detailing their specific desires regarding funeral and burial. Written instructions to your family and executor containing information and guidance will minimize uncertainty, confusion, and possible oversights following your death.
Conclusion
While the preceding article contains possible items to be discussed with your family, attorney and executor, the article is by no means exhaustive. A number of these items may not be applicable in your situation, and probably there are many others that are applicable. The essential element is to spend some time now considering what you should tell those most closely associated with you to facilitate their handling of your affairs upon your death.
About the Author:
Kenneth Vercammen is a Litigation Attorney in Edison, NJ, approximately 19 miles north of Princeton. He often lectures for the American Bar Association and New Jersey State Bar Association on personal injury, criminal / municipal court law and practices to improve service to clients. He has published 125 articles in national and New Jersey publications on legal topics. He has served as a Special Acting Prosecutor in seven different cities and towns in New Jersey. He has spoken on Wills and Elder law on numerous occasions to the Adult Community Schools in Metuchen, Sayreville, Old Bridge, South Brunswick and Edison/Clara Barton Seniors and Perth Amboy Seniors.
In his private practice, he has devoted a substantial portion of his professional time to the preparation and trial of litigated matters. He has appeared in Courts throughout New Jersey several times each week on many personal injury matters, Municipal Court trials, arbitration hearings and contested hearings.
He is also a popular speaker for the American Bar Association's General Practice Section and Law Practice Management Section.
Since 1985, his primary concentration has been on litigation matters. Mr. Vercammen gained other legal experiences as the Confidential Law Clerk to the Court of Appeals of Maryland (Supreme Court), with the Delaware County, PA District Attorney Office handling Probable Cause Hearings, Middlesex County Probation Dept as a Probation Officer, and an Executive Assistant to Scranton District Magistrate, Thomas Hart, in Scranton, PA.
Saturday, August 8, 2009
ABA American Bar Association GP|Solo Elder Law Committee Newsletter • Summer 2009
ABA American Bar Association GP|Solo Elder Law Committee Newsletter • Summer 2009
Chairs:
Kenneth Vercammen (Edison, NJ)
Jay Foonberg (Beverly Hills, CA)
In this issue:
1. Wrapping Up the Personal Injury Settlement
2. When Do I Need a Self-Settled Special Needs Trust?
3. Elder Law, Estate Planning & Probate Seminar- New Ideas to Expand & Excel Your Practice
4. Voting- House of Delegates ABA
5. Pooled Trusts – Statutory Requirements
1. Wrapping Up the Personal Injury Settlement + Future Medical Insurance Issues
By Thomas D. Begley, Jr., Esquire
Once a personal injury settlement has been achieved or a judgment obtained, the plaintiff begins a new life. There are many considerations that should be addressed prior to or at the time of settlement. These include the following:
Medical Insurance
Does the client have the best medical insurance available? The fact that a client receives Medicare, for example, does not mean that coverage is adequate. According to government studies, Medicare pays only about 50% of a Medicare beneficiary’s actual medical bills. In cases involving a catastrophically injured plaintiff requiring considerable home health assistance, that percentage is sharply lower.
Medicare Supplements, Medicare Advantage Programs, Medicaid, private insurance from high risk pools, COBRA coverage, and continuing Worker’s Comp coverage should all be considered.
Medicaid Waiver Programs
Most medical insurance including Medicare and private insurance are designed to pay for acute care. They do not provide coverage for chronic care. There are many Medicaid Waiver Programs that are designed for chronic care including significant home and community-based services that may be required by personal injury victims.
Non-Medical Public Benefits
In many cases, injured plaintiffs are entitled to SSI, SSDI, Section 8 Housing, Group Homes and other public benefits, but have not considered them or applied for them.
Estate Taxes
Where there is a significant recovery, federal and state estate and inheritance taxes should be considered. Currently the exemption from federal estate tax is $3.5 million. It is likely that before the end of calendar year 2009 Congress will revisit the federal estate tax. Many states, such as New Jersey, have state estate taxes. Currently the exemption from New Jersey estate tax is $675,000, and that exemption is not likely to increase. Other states, such as Pennsylvania, do not have a state estate tax, but do have significant inheritance taxes. In Pennsylvania these taxes can be as high as 15%.
In many cases, even with severely injured persons, life insurance is available to pay all or part of the tax. The availability of this insurance should be explored and discussed with the client.
Estate Planning Documents
Many injured parties have no Will, Living Trust, Living Will, Power of Attorney or other estate planning documents. Some of those plaintiffs do have documents but are outdated, perhaps even because of the personal injury settlement. These documents should be reviewed and modified or replaced, if needed.
Estate Planning Documents – Parents
If the plaintiff is a minor child who is likely to be receiving public benefits, it is important that the parents’ estate planning documents not leave any assets to the child with disabilities, but rather to a third party special needs trust.
Structured Settlement
It is often advantageous to purchase a structured settlement for a portion of the settlement or award. A structured settlement offers a number of advantages to the injured party including creditor protection, tax benefits and often makes it more difficult for the injured party to squander the settlement.
There are also disadvantages to structured settlements. If a structured settlement is to be used, an analysis should be made as to how much should be structured and how much should be retained as a lump sum to pay for immediate cash needs, repayment of debt, emergency funds, and cash for investment in the appropriate equity portion of the injured party’s portfolio. COLAs and commutation riders should be considered.
Investment Advice
The client should be introduced to an investment advisor to assist in investing the settlement proceeds. In some instances, the investment manager can be a professional trustee, if a trust is appropriate.
Special Needs Trust
An analysis should be made as to whether a special needs trust is required. In many instances, such a trust is not necessary. If a special needs trust is required, will it need to be established by a court order? It is important to understand that, except in the case of a pooled trust, a special needs trust cannot be established by the disabled person. The long-term success of a special needs trust often depends on the skill and experience of the trustee. Care should be taken in the selection of an appropriate trustee.
Support Trust
Is a support trust appropriate for a minor or incapacitated beneficiary? The support trust usually results in better money management of the settlement. In the case of a minor, the support trust can be designed to retain the award past age 18. Absent a support trust, a minor can usually access the settlement funds at age 18 when most individuals do not have sufficient maturity to handle significant financial assets.
Medicare Set-Aside Arrangement
An analysis should be made as to whether or not a Medicare Set-Aside Arrangement (MSA) is required. If an MSA is required, a further analysis needs to be made as to whether the MSA can be self-administered, a custodial arrangement, a special needs trust or a pooled trust. Arrangements must be made for an MSA calculation and submission of the calculation to CMS for approval.
Mediation
An elder and disability lawyer is often useful as a participant in mediation. The lawyer is familiar with public benefits, which often are useful in bridging the gap between the plaintiff’s demand and the defendant’s offer.
Qualified Settlement Fund
In many cases, a Qualified Settlement Fund (QSF) is useful. The defendant can “pay and go.” The plaintiff has time to sort out issues such as allocation between the parties, resolution of Medicare, Medicaid, ERISA and other liens, purchase of structured settlements, and other issues that may take time. The defendant gets an immediate tax deduction upon funding the QSF.
Lien Reduction
An elder and disability lawyer can be of assistance in reducing Medicaid and Medicare liens.
Copyright 2009 by Begley & Bookbinder, P.C., an Elder & Disability Law Firm with offices in Moorestown, Stone Harbor and Lawrenceville, New Jersey and Oxford Valley, Pennsylvania and can be contacted at 800-533-7227. The firm services southern and central New Jersey and eastern Pennsylvania.
Tom Begley Jr. is one of the speakers with Kenneth Vercammen at the NJ State Bar Association's Annual Nuts & Bolts of Elder Law & Estate Administration and co-author with Kenneth Vercammen, Martin Spigner and Kathleen Sheridan of the 500 plus page book on Elder Law.
Begley & Bookbinder, provides services in connection with protecting assets from nursing home costs, Medicaid applications, Estate Planning and Estate Administration, Special Needs Planning and Guardianships. If you have a legal problem in one of these areas of law, contact Begley & Bookbinder at 800-533-7227.
2. When Do I Need a Self-Settled Special Needs Trust?
By Thomas D. Begley, Jr., Esquire
In the settlement of litigation, the plaintiff is often receiving public benefits. The question then arises as to whether a special needs trust is required. There are certain types of public benefits that are means-tested. Others are not. Generally, means-tested public benefits require that the individual have assets of less than $2,000 and have certain limits on income. The following types of public benefits are means-tested and a special needs trust is generally required:
SSI
Medicaid
TBI – A Medicaid Waiver Program for persons suffering from traumatic brain injury
CRPD – A Medicaid Waiver Program providing home care
Section 8 Housing
Veterans Pension
Certain DDD Benefits
Psychiatric Institutionalization
Means-Tested Public Benefits
If the plaintiff is receiving any means-tested benefits or is likely to apply for them, then a self-settled special needs trust should be considered. Assets in the trust are not counted for public benefit eligibility purposes. Distributions from the trust can be made in such a way as not to count for income eligibility for public benefit purposes.
Age
To be eligible for a special needs trust, the plaintiff must be under age 65. If the plaintiff is over age 65, there are Medicaid planning strategies that can be employed, but a self-settled special needs trust will not be a viable option.
Disabled
To be eligible for a self-settled special needs trust, the person must be “disabled.” To be considered disabled, the person must generally have a disability determination by the Social Security Administration (SSA). It is possible, however, to receive a disability determination from a Medicaid physician. If a person has not yet received a disability determination from SSA, the trust can be established pending the disability determination. Good practice is to obtain an opinion letter from a law firm that specializes in Social Security Disability appeals.
Assets of Individual
No assets other than the assets of the disabled plaintiff may be placed in the trust.
Copyright 2009 by Begley & Bookbinder, P.C
3. Elder Law, Estate Planning & Probate- New Ideas to Expand & Excel your Practice
Sat. August 1, 2009 2:00pm – 3:30pm
ABA Annual Meeting Chicago
Speakers: Jay Foonberg, Esq. - Author of Best Sellers "How to
Start and Build a Law Practice" and "How to get and keep good clients', Beverly Hills, CA
Kenneth A. Vercammen, Esq. - co-author "Nuts & Bolts of Elder Law", Edison, NJ
Deborah Cole, Chicago Contributing Author, Your Life, Your Legacy: The Fundamentals of Effective Estate Planning, Publisher's ExpressPress
Elder Law program Primary Sponsors: General Practice Section
Co-sponsors: ABA Commission on Law & Aging, Health Law Section,
YLD, Senior Lawyers Division, Real Probate & Trust Section, Tax Law Section
Topics:
Forms you can use
Email newsletters
"Representing seniors- Doing well by doing good.-Do you know how?
Marketing with written fee agreements
-Ethics and marketing without violating the Rules of Professional Conduct
Elder Law may be the biggest practice area of your career. There are 50,000 baby boomers/ day turning 60 and soon to be on Social Security and will need legal advise. Elder Law is one of the biggest growth fields.
[Contact Kenneth Vercammen, Esq. for program information 732-572-0500]
Contact American Bar Association's CDS/Travel Planners at 800-915-9801 for ABA meeting registration
4. Voting – House of Delegates ABA
The Election will be held at the ABA Annual Meeting in Chicago. All ABA lawyer members who have registered at the Annual Meeting are entitled to vote for Delegates- at-Large. Voting will be at ABA Registration July 30- August 3: (voting across from registration area)
Hyatt Regency Chicago
Riverside Center, Purple Level, East Tower
8am-6pm Thursday, Friday and Saturday
8am-5pm Sunday, Monday, Tuesday
Six Delegates–at–Large are elected at each Annual Meeting to serve a three-year term in the House of Delegates. Any member of the Association is eligible to be a Delegates–at–Large, although of the six elected each year; no two may be accredited to the same state, territory or possession. Nominations for Delegates at Large are made by written petition. At this Annual Meeting, there will also be two Delegates–at–Large elected to fill vacancies. All ABA lawyer members who have registered at the Annual Meeting are entitled to vote for Delegates–at–Large.
Voting will take place in the registration area of the Hyatt Regency. The polls will be open during the same hours as registration, except on the last day the polls will close at 10:00 a.m.
Contact American Bar Association's CDS/Travel Planners at 800-915-9801 for ABA meeting registration.
5. Pooled Trusts – Statutory Requirements
By Thomas D. Begley, Jr., Esquire
A self-settled pooled trust is defined as a trust containing the assets of an individual who is disabled that meets the six conditions discussed in the following sections.
Non-Profit Association
The trust is established and managed by a non-profit association. A non-profit organization is an organization defined in § 501c of the Internal Revenue Code (IRC) and also has tax-exempt status under § 501(a).
Separate Account
Separate accounts must be maintained for each beneficiary of the trust. For purposes of investment and management of funds, the trust may pool the funds in the individual accounts. The trust must be able to provide an individual accounting for the individual. Each individual sub account gets its own EIN number. Each self-settled sub account is taxed to the beneficiary as a grantor trust.
Solely for the Benefit Of
The trust account must be maintained for the sole benefit of the individual with disabilities. The trust account must be established for the sole benefit of the disabled individual. If the account provides a benefit to any other individual, this exception to the trust transfer rules does not apply.
Established By
The trust may be established by a parent, grandparent, or legal guardian of such individual, or by such individual, or by a court. The fact that the individual may establish the trust himself is different from a self-settled special needs trust under (d)(4)(A). If a third party establishes a trust account on behalf of the individual, the third party must have legal authority to act with regard to the assets of the individual. This requirement refers to the individual who physically took action to establish the trust, even though the trust was established with assets of the SSI claimant/recipient. Since the pooled trust has already been established, this provision applies to the sub account within the pooled trust.
A Pooled Trust can also be established by a Representative Payee. The POMS permit the transfer of disability benefits to establish a trust or to fund an existing trust. However, there is an exception for past due benefits, which meet dedicated account requirements. These past due benefits must be held in a savings account or checking account, or a money market account established in a financial institution. Representative Payee may pay a beneficiary’s disability payments to the trust, provided that:
Establishing the trust is in the beneficiary’s best interest.
The trust is established exclusively for the use and benefit of the beneficiary, to meet the beneficiary’s current and reasonably foreseeable needs. Trust expenditures for food, clothing, housing, medical care, recreation, and education are considered expenditures for the use and benefit of the beneficiary and in his or her best interest. A trust with provisions prohibiting trust funds to be used specifically to meet the beneficiary’s current needs for food, clothing, housing, and medical care would not be in compliance.
The trust is for the sole benefit of the disabled person during his or her lifetime.
A provision in a trust directing disability payments to the trust is prohibited as a violation of the assignment of benefits provisions of the Social Security Act.
Payback
To qualify for the pooled trust exception, the trust must contain specific language that provides that, to the extent that amounts remaining in the individual’s account upon death of the individual are not retained by the trust, the trust pays to the state from such remaining amounts in the account an amount equal to the total amount of medical assistance paid on behalf of the individual under the state Medicaid plan. There is no payback required by a third-party pooled trust.
To the extent that the self-settled trust does not retain funds in the account, the state must be listed as a first payee and have priority over payment of other debts and administrative expenses, except as listed below.
The following are allowable administrative expenses:
Death taxes due to federal and state governments
Reasonable fees for the administration of the trust estate
The following expenses are prohibited:
Payments of debts owed to third parties
Funeral expenses
Payment to residual beneficiaries
The restriction on payments from the trust applies upon the death of the beneficiary. Payment of fees and administrative expenses during the life of the beneficiary are allowable as permitted by the trust document and are not affected by the state Medicaid reimbursement requirement.
Copyright – Tom Begley Jr.
We Publish Your Forms & Articles
To help your practice, we feature in this newsletter edition a few forms and articles PLUS tips on marketing and improving service to clients. But your Editor and Chairs can't do it all. Please mail articles, suggestions or ideas you wish to share with others in our Committee. Let us know if you are finding any useful information or anything you can share with the other members. You will receive written credit as the source and thus you can advise your clients and friends you were published in an ABA publication. We will try to meet you needs.
Send Us Your Marketing Tips
We are increasing the frequency of our newsletter. Send us your short tips on your great or new successful marketing techniques. You can become a published ABA author. Enjoy your many ABA benefits.
Send Us Your Articles & Ideas
To help your practice, we feature in this newsletter edition a few articles and tips on marketing and improving service to clients. But your Editor and Chairs can't do it all. Please send articles, suggestions or ideas you wish to share with others.
General Practice, Solo and Small Firm Division:
Elder Law Committee and the ESTATE PLANNING, PROBATE & TRUST COMMITTEE
Who We Are
The Elder Law Committee of the ABA General Practice Division is directed towards general practitioners and more experienced elder law attorneys. The committee consistently sponsors programs at the Annual Meeting, the focus of which is shifting to advanced topics for the more experienced elder lawyer.
This committee also focuses on improving estate planning skills, substantive law knowledge and office procedures for the attorney who practices estate planning, probate and trust law. This committee also serves as a network resource in educating attorneys regarding Elder Law situations.
To help your practice, we feature in this newsletter edition a few articles and tips on marketing and improving service to clients. But your Editor and chairs can't do it all. Please send articles, suggestions or ideas you wish to share with others.
Let us know if you are finding any useful information or anything you can share with the other members. You will receive written credit as the source and thus you can advise your clients and friends you were published in an ABA publication. We will try to meet you needs.
We also seek articles on Elder Law, Probate, Wills, Medicaid and Marketing. Please send your marketing ideas and articles to us. You can become a published ABA author.
Jay Foonberg, Co-Chair, Author of Best Sellers "How to Start and Build a Law Practice" and "How To Get and Keep Good Clients", Beverly Hills, CA JayFoonberg@aol.com
We will also provide tips on how to promote your law office, your practice and Personal Marketing Skills in general. It does not deal with government funded "legal services" for indigent, welfare cases.
Kenneth Vercammen, Esq. Chair
KENNETH VERCAMMEN & ASSOCIATES, PC
ATTORNEY AT LAW
2053 Woodbridge Ave.
Edison, NJ 08817
(Phone) 732-572-0500
(Fax) 732-572-0030
Kenv@njlaws.com
Central Jersey Elder Law Law www.centraljerseyelderlaw.com
NJ Elder Blog http://elder-law.blogspot.com/
Chairs:
Kenneth Vercammen (Edison, NJ)
Jay Foonberg (Beverly Hills, CA)
In this issue:
1. Wrapping Up the Personal Injury Settlement
2. When Do I Need a Self-Settled Special Needs Trust?
3. Elder Law, Estate Planning & Probate Seminar- New Ideas to Expand & Excel Your Practice
4. Voting- House of Delegates ABA
5. Pooled Trusts – Statutory Requirements
1. Wrapping Up the Personal Injury Settlement + Future Medical Insurance Issues
By Thomas D. Begley, Jr., Esquire
Once a personal injury settlement has been achieved or a judgment obtained, the plaintiff begins a new life. There are many considerations that should be addressed prior to or at the time of settlement. These include the following:
Medical Insurance
Does the client have the best medical insurance available? The fact that a client receives Medicare, for example, does not mean that coverage is adequate. According to government studies, Medicare pays only about 50% of a Medicare beneficiary’s actual medical bills. In cases involving a catastrophically injured plaintiff requiring considerable home health assistance, that percentage is sharply lower.
Medicare Supplements, Medicare Advantage Programs, Medicaid, private insurance from high risk pools, COBRA coverage, and continuing Worker’s Comp coverage should all be considered.
Medicaid Waiver Programs
Most medical insurance including Medicare and private insurance are designed to pay for acute care. They do not provide coverage for chronic care. There are many Medicaid Waiver Programs that are designed for chronic care including significant home and community-based services that may be required by personal injury victims.
Non-Medical Public Benefits
In many cases, injured plaintiffs are entitled to SSI, SSDI, Section 8 Housing, Group Homes and other public benefits, but have not considered them or applied for them.
Estate Taxes
Where there is a significant recovery, federal and state estate and inheritance taxes should be considered. Currently the exemption from federal estate tax is $3.5 million. It is likely that before the end of calendar year 2009 Congress will revisit the federal estate tax. Many states, such as New Jersey, have state estate taxes. Currently the exemption from New Jersey estate tax is $675,000, and that exemption is not likely to increase. Other states, such as Pennsylvania, do not have a state estate tax, but do have significant inheritance taxes. In Pennsylvania these taxes can be as high as 15%.
In many cases, even with severely injured persons, life insurance is available to pay all or part of the tax. The availability of this insurance should be explored and discussed with the client.
Estate Planning Documents
Many injured parties have no Will, Living Trust, Living Will, Power of Attorney or other estate planning documents. Some of those plaintiffs do have documents but are outdated, perhaps even because of the personal injury settlement. These documents should be reviewed and modified or replaced, if needed.
Estate Planning Documents – Parents
If the plaintiff is a minor child who is likely to be receiving public benefits, it is important that the parents’ estate planning documents not leave any assets to the child with disabilities, but rather to a third party special needs trust.
Structured Settlement
It is often advantageous to purchase a structured settlement for a portion of the settlement or award. A structured settlement offers a number of advantages to the injured party including creditor protection, tax benefits and often makes it more difficult for the injured party to squander the settlement.
There are also disadvantages to structured settlements. If a structured settlement is to be used, an analysis should be made as to how much should be structured and how much should be retained as a lump sum to pay for immediate cash needs, repayment of debt, emergency funds, and cash for investment in the appropriate equity portion of the injured party’s portfolio. COLAs and commutation riders should be considered.
Investment Advice
The client should be introduced to an investment advisor to assist in investing the settlement proceeds. In some instances, the investment manager can be a professional trustee, if a trust is appropriate.
Special Needs Trust
An analysis should be made as to whether a special needs trust is required. In many instances, such a trust is not necessary. If a special needs trust is required, will it need to be established by a court order? It is important to understand that, except in the case of a pooled trust, a special needs trust cannot be established by the disabled person. The long-term success of a special needs trust often depends on the skill and experience of the trustee. Care should be taken in the selection of an appropriate trustee.
Support Trust
Is a support trust appropriate for a minor or incapacitated beneficiary? The support trust usually results in better money management of the settlement. In the case of a minor, the support trust can be designed to retain the award past age 18. Absent a support trust, a minor can usually access the settlement funds at age 18 when most individuals do not have sufficient maturity to handle significant financial assets.
Medicare Set-Aside Arrangement
An analysis should be made as to whether or not a Medicare Set-Aside Arrangement (MSA) is required. If an MSA is required, a further analysis needs to be made as to whether the MSA can be self-administered, a custodial arrangement, a special needs trust or a pooled trust. Arrangements must be made for an MSA calculation and submission of the calculation to CMS for approval.
Mediation
An elder and disability lawyer is often useful as a participant in mediation. The lawyer is familiar with public benefits, which often are useful in bridging the gap between the plaintiff’s demand and the defendant’s offer.
Qualified Settlement Fund
In many cases, a Qualified Settlement Fund (QSF) is useful. The defendant can “pay and go.” The plaintiff has time to sort out issues such as allocation between the parties, resolution of Medicare, Medicaid, ERISA and other liens, purchase of structured settlements, and other issues that may take time. The defendant gets an immediate tax deduction upon funding the QSF.
Lien Reduction
An elder and disability lawyer can be of assistance in reducing Medicaid and Medicare liens.
Copyright 2009 by Begley & Bookbinder, P.C., an Elder & Disability Law Firm with offices in Moorestown, Stone Harbor and Lawrenceville, New Jersey and Oxford Valley, Pennsylvania and can be contacted at 800-533-7227. The firm services southern and central New Jersey and eastern Pennsylvania.
Tom Begley Jr. is one of the speakers with Kenneth Vercammen at the NJ State Bar Association's Annual Nuts & Bolts of Elder Law & Estate Administration and co-author with Kenneth Vercammen, Martin Spigner and Kathleen Sheridan of the 500 plus page book on Elder Law.
Begley & Bookbinder, provides services in connection with protecting assets from nursing home costs, Medicaid applications, Estate Planning and Estate Administration, Special Needs Planning and Guardianships. If you have a legal problem in one of these areas of law, contact Begley & Bookbinder at 800-533-7227.
2. When Do I Need a Self-Settled Special Needs Trust?
By Thomas D. Begley, Jr., Esquire
In the settlement of litigation, the plaintiff is often receiving public benefits. The question then arises as to whether a special needs trust is required. There are certain types of public benefits that are means-tested. Others are not. Generally, means-tested public benefits require that the individual have assets of less than $2,000 and have certain limits on income. The following types of public benefits are means-tested and a special needs trust is generally required:
SSI
Medicaid
TBI – A Medicaid Waiver Program for persons suffering from traumatic brain injury
CRPD – A Medicaid Waiver Program providing home care
Section 8 Housing
Veterans Pension
Certain DDD Benefits
Psychiatric Institutionalization
Means-Tested Public Benefits
If the plaintiff is receiving any means-tested benefits or is likely to apply for them, then a self-settled special needs trust should be considered. Assets in the trust are not counted for public benefit eligibility purposes. Distributions from the trust can be made in such a way as not to count for income eligibility for public benefit purposes.
Age
To be eligible for a special needs trust, the plaintiff must be under age 65. If the plaintiff is over age 65, there are Medicaid planning strategies that can be employed, but a self-settled special needs trust will not be a viable option.
Disabled
To be eligible for a self-settled special needs trust, the person must be “disabled.” To be considered disabled, the person must generally have a disability determination by the Social Security Administration (SSA). It is possible, however, to receive a disability determination from a Medicaid physician. If a person has not yet received a disability determination from SSA, the trust can be established pending the disability determination. Good practice is to obtain an opinion letter from a law firm that specializes in Social Security Disability appeals.
Assets of Individual
No assets other than the assets of the disabled plaintiff may be placed in the trust.
Copyright 2009 by Begley & Bookbinder, P.C
3. Elder Law, Estate Planning & Probate- New Ideas to Expand & Excel your Practice
Sat. August 1, 2009 2:00pm – 3:30pm
ABA Annual Meeting Chicago
Speakers: Jay Foonberg, Esq. - Author of Best Sellers "How to
Start and Build a Law Practice" and "How to get and keep good clients', Beverly Hills, CA
Kenneth A. Vercammen, Esq. - co-author "Nuts & Bolts of Elder Law", Edison, NJ
Deborah Cole, Chicago Contributing Author, Your Life, Your Legacy: The Fundamentals of Effective Estate Planning, Publisher's ExpressPress
Elder Law program Primary Sponsors: General Practice Section
Co-sponsors: ABA Commission on Law & Aging, Health Law Section,
YLD, Senior Lawyers Division, Real Probate & Trust Section, Tax Law Section
Topics:
Forms you can use
Email newsletters
"Representing seniors- Doing well by doing good.-Do you know how?
Marketing with written fee agreements
-Ethics and marketing without violating the Rules of Professional Conduct
Elder Law may be the biggest practice area of your career. There are 50,000 baby boomers/ day turning 60 and soon to be on Social Security and will need legal advise. Elder Law is one of the biggest growth fields.
[Contact Kenneth Vercammen, Esq. for program information 732-572-0500]
Contact American Bar Association's CDS/Travel Planners at 800-915-9801 for ABA meeting registration
4. Voting – House of Delegates ABA
The Election will be held at the ABA Annual Meeting in Chicago. All ABA lawyer members who have registered at the Annual Meeting are entitled to vote for Delegates- at-Large. Voting will be at ABA Registration July 30- August 3: (voting across from registration area)
Hyatt Regency Chicago
Riverside Center, Purple Level, East Tower
8am-6pm Thursday, Friday and Saturday
8am-5pm Sunday, Monday, Tuesday
Six Delegates–at–Large are elected at each Annual Meeting to serve a three-year term in the House of Delegates. Any member of the Association is eligible to be a Delegates–at–Large, although of the six elected each year; no two may be accredited to the same state, territory or possession. Nominations for Delegates at Large are made by written petition. At this Annual Meeting, there will also be two Delegates–at–Large elected to fill vacancies. All ABA lawyer members who have registered at the Annual Meeting are entitled to vote for Delegates–at–Large.
Voting will take place in the registration area of the Hyatt Regency. The polls will be open during the same hours as registration, except on the last day the polls will close at 10:00 a.m.
Contact American Bar Association's CDS/Travel Planners at 800-915-9801 for ABA meeting registration.
5. Pooled Trusts – Statutory Requirements
By Thomas D. Begley, Jr., Esquire
A self-settled pooled trust is defined as a trust containing the assets of an individual who is disabled that meets the six conditions discussed in the following sections.
Non-Profit Association
The trust is established and managed by a non-profit association. A non-profit organization is an organization defined in § 501c of the Internal Revenue Code (IRC) and also has tax-exempt status under § 501(a).
Separate Account
Separate accounts must be maintained for each beneficiary of the trust. For purposes of investment and management of funds, the trust may pool the funds in the individual accounts. The trust must be able to provide an individual accounting for the individual. Each individual sub account gets its own EIN number. Each self-settled sub account is taxed to the beneficiary as a grantor trust.
Solely for the Benefit Of
The trust account must be maintained for the sole benefit of the individual with disabilities. The trust account must be established for the sole benefit of the disabled individual. If the account provides a benefit to any other individual, this exception to the trust transfer rules does not apply.
Established By
The trust may be established by a parent, grandparent, or legal guardian of such individual, or by such individual, or by a court. The fact that the individual may establish the trust himself is different from a self-settled special needs trust under (d)(4)(A). If a third party establishes a trust account on behalf of the individual, the third party must have legal authority to act with regard to the assets of the individual. This requirement refers to the individual who physically took action to establish the trust, even though the trust was established with assets of the SSI claimant/recipient. Since the pooled trust has already been established, this provision applies to the sub account within the pooled trust.
A Pooled Trust can also be established by a Representative Payee. The POMS permit the transfer of disability benefits to establish a trust or to fund an existing trust. However, there is an exception for past due benefits, which meet dedicated account requirements. These past due benefits must be held in a savings account or checking account, or a money market account established in a financial institution. Representative Payee may pay a beneficiary’s disability payments to the trust, provided that:
Establishing the trust is in the beneficiary’s best interest.
The trust is established exclusively for the use and benefit of the beneficiary, to meet the beneficiary’s current and reasonably foreseeable needs. Trust expenditures for food, clothing, housing, medical care, recreation, and education are considered expenditures for the use and benefit of the beneficiary and in his or her best interest. A trust with provisions prohibiting trust funds to be used specifically to meet the beneficiary’s current needs for food, clothing, housing, and medical care would not be in compliance.
The trust is for the sole benefit of the disabled person during his or her lifetime.
A provision in a trust directing disability payments to the trust is prohibited as a violation of the assignment of benefits provisions of the Social Security Act.
Payback
To qualify for the pooled trust exception, the trust must contain specific language that provides that, to the extent that amounts remaining in the individual’s account upon death of the individual are not retained by the trust, the trust pays to the state from such remaining amounts in the account an amount equal to the total amount of medical assistance paid on behalf of the individual under the state Medicaid plan. There is no payback required by a third-party pooled trust.
To the extent that the self-settled trust does not retain funds in the account, the state must be listed as a first payee and have priority over payment of other debts and administrative expenses, except as listed below.
The following are allowable administrative expenses:
Death taxes due to federal and state governments
Reasonable fees for the administration of the trust estate
The following expenses are prohibited:
Payments of debts owed to third parties
Funeral expenses
Payment to residual beneficiaries
The restriction on payments from the trust applies upon the death of the beneficiary. Payment of fees and administrative expenses during the life of the beneficiary are allowable as permitted by the trust document and are not affected by the state Medicaid reimbursement requirement.
Copyright – Tom Begley Jr.
We Publish Your Forms & Articles
To help your practice, we feature in this newsletter edition a few forms and articles PLUS tips on marketing and improving service to clients. But your Editor and Chairs can't do it all. Please mail articles, suggestions or ideas you wish to share with others in our Committee. Let us know if you are finding any useful information or anything you can share with the other members. You will receive written credit as the source and thus you can advise your clients and friends you were published in an ABA publication. We will try to meet you needs.
Send Us Your Marketing Tips
We are increasing the frequency of our newsletter. Send us your short tips on your great or new successful marketing techniques. You can become a published ABA author. Enjoy your many ABA benefits.
Send Us Your Articles & Ideas
To help your practice, we feature in this newsletter edition a few articles and tips on marketing and improving service to clients. But your Editor and Chairs can't do it all. Please send articles, suggestions or ideas you wish to share with others.
General Practice, Solo and Small Firm Division:
Elder Law Committee and the ESTATE PLANNING, PROBATE & TRUST COMMITTEE
Who We Are
The Elder Law Committee of the ABA General Practice Division is directed towards general practitioners and more experienced elder law attorneys. The committee consistently sponsors programs at the Annual Meeting, the focus of which is shifting to advanced topics for the more experienced elder lawyer.
This committee also focuses on improving estate planning skills, substantive law knowledge and office procedures for the attorney who practices estate planning, probate and trust law. This committee also serves as a network resource in educating attorneys regarding Elder Law situations.
To help your practice, we feature in this newsletter edition a few articles and tips on marketing and improving service to clients. But your Editor and chairs can't do it all. Please send articles, suggestions or ideas you wish to share with others.
Let us know if you are finding any useful information or anything you can share with the other members. You will receive written credit as the source and thus you can advise your clients and friends you were published in an ABA publication. We will try to meet you needs.
We also seek articles on Elder Law, Probate, Wills, Medicaid and Marketing. Please send your marketing ideas and articles to us. You can become a published ABA author.
Jay Foonberg, Co-Chair, Author of Best Sellers "How to Start and Build a Law Practice" and "How To Get and Keep Good Clients", Beverly Hills, CA JayFoonberg@aol.com
We will also provide tips on how to promote your law office, your practice and Personal Marketing Skills in general. It does not deal with government funded "legal services" for indigent, welfare cases.
Kenneth Vercammen, Esq. Chair
KENNETH VERCAMMEN & ASSOCIATES, PC
ATTORNEY AT LAW
2053 Woodbridge Ave.
Edison, NJ 08817
(Phone) 732-572-0500
(Fax) 732-572-0030
Kenv@njlaws.com
Central Jersey Elder Law Law www.centraljerseyelderlaw.com
NJ Elder Blog http://elder-law.blogspot.com/
Elder Law, Estate Planning & Probate articles
The ABA General Practice Division held its popular program Elder Law, Estate Planning & Probate- New ideas to expand & excel your practice at the ABA Annual Meeting in Chicago on August 1, 2009.
Speakers: Jay Foonberg, Esq. - Author of Best Sellers "How to
Start and Build a Law Practice" and "How to get and keep good clients', Beverly Hills, CA
Kenneth A. Vercammen, Esq. - co-author "Nuts & Bolts of Elder Law", Edison, NJ
Deborah Cole, Chicago, Il
Articles and forms were provided on CD. Below is a list of articles provided. If you want a few of the forms, send an email to kenvnjlaws@verizon.net and indicate which articles/ forms you want and the number of the article or form [max 5]
List of Kenneth Vercammen, Esq. Forms, Documents and Articles on CD
Elder Law, Estate Planning & Probate- New ideas to expand & excel your practice
Sat. August 1, 2009 2:00pm -3:30pm
Hyatt Regency Hotel, Chicago ABA Annual Meeting
1 New Client schedule appointment
2 Confidential Will Questionnaire
3 Will bill
4 WILL DRAFT CO
5. Doctor Cert sign POA, will Dr
6 Thank you for Referral
7 POA DRAFT lt
8 Will Signing Instruction
9 Referral Out Another Atty fax
10 No rep
11 Recommend Will to Client
12 Post WILL
13 Client questionnaire end case.
14 POA Grantor Now
15 Wills article
16 POA Power of Attorney- article
17 LIVING WILLS
18 Gay and Lesbians- Advance Directives
19 Letter of Instruction
20 Remove Executor
21 Alzheimer, POA Guardianship
22 ANSWERS to Questions Probate
23 Estate Planning 10 Ideas
24 Executor Duties
25 Prenuptial Ag
26 Undue Influence article
27 Attorney- Client Confidentiality
28 Pick up Docs
29 Executor to Pay and Notify Creditor
30 NJlaws website & articles
31 Trusts
32 Caveat to Will
33 Central Jersey Elder articles
34 ABA Estate Plan Winter 2008
35 Estate Plan ABA Nov 2007
36 ABA ELDER News Aug 2007 GP
37ABA ELDER LAW COMMITTEE Newsletter July 2007 ABA General Practice
38 Estate Probate ABA news May. 2007
39 Elder Law ABA news February, 2007
40 INTESTACY
41 If no Will
42 Probate Release Refund Bond
43 Lincoln 17- no charge
44 Guardianship bill
45 RETAINER Probate ESTATE
46 WILL - sign front notary
47Confidentiality Lt to Client
48 Elective Share of Spouse
49 Joint Bank Accounts Upon Death
50 ABA ELDER News Spring2008
51 ABA Elder Law Newsletter • April 2008
52 ABA GP Solo ELDER LAW COMMITTEE Newsletter July , 2008
53 ABA ELDER News Fall 2008
54 ABA ELDER News Winter 2009
55 ABA ELDER News Spring 2009
___ We need your email address for newsletter
Speakers: Jay Foonberg, Esq. - Author of Best Sellers "How to
Start and Build a Law Practice" and "How to get and keep good clients', Beverly Hills, CA
Kenneth A. Vercammen, Esq. - co-author "Nuts & Bolts of Elder Law", Edison, NJ
Deborah Cole, Chicago, Il
Articles and forms were provided on CD. Below is a list of articles provided. If you want a few of the forms, send an email to kenvnjlaws@verizon.net and indicate which articles/ forms you want and the number of the article or form [max 5]
List of Kenneth Vercammen, Esq. Forms, Documents and Articles on CD
Elder Law, Estate Planning & Probate- New ideas to expand & excel your practice
Sat. August 1, 2009 2:00pm -3:30pm
Hyatt Regency Hotel, Chicago ABA Annual Meeting
1 New Client schedule appointment
2 Confidential Will Questionnaire
3 Will bill
4 WILL DRAFT CO
5. Doctor Cert sign POA, will Dr
6 Thank you for Referral
7 POA DRAFT lt
8 Will Signing Instruction
9 Referral Out Another Atty fax
10 No rep
11 Recommend Will to Client
12 Post WILL
13 Client questionnaire end case.
14 POA Grantor Now
15 Wills article
16 POA Power of Attorney- article
17 LIVING WILLS
18 Gay and Lesbians- Advance Directives
19 Letter of Instruction
20 Remove Executor
21 Alzheimer, POA Guardianship
22 ANSWERS to Questions Probate
23 Estate Planning 10 Ideas
24 Executor Duties
25 Prenuptial Ag
26 Undue Influence article
27 Attorney- Client Confidentiality
28 Pick up Docs
29 Executor to Pay and Notify Creditor
30 NJlaws website & articles
31 Trusts
32 Caveat to Will
33 Central Jersey Elder articles
34 ABA Estate Plan Winter 2008
35 Estate Plan ABA Nov 2007
36 ABA ELDER News Aug 2007 GP
37ABA ELDER LAW COMMITTEE Newsletter July 2007 ABA General Practice
38 Estate Probate ABA news May. 2007
39 Elder Law ABA news February, 2007
40 INTESTACY
41 If no Will
42 Probate Release Refund Bond
43 Lincoln 17- no charge
44 Guardianship bill
45 RETAINER Probate ESTATE
46 WILL - sign front notary
47Confidentiality Lt to Client
48 Elective Share of Spouse
49 Joint Bank Accounts Upon Death
50 ABA ELDER News Spring2008
51 ABA Elder Law Newsletter • April 2008
52 ABA GP Solo ELDER LAW COMMITTEE Newsletter July , 2008
53 ABA ELDER News Fall 2008
54 ABA ELDER News Winter 2009
55 ABA ELDER News Spring 2009
___ We need your email address for newsletter
Tuesday, June 30, 2009
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