Real estate plan: minimize the death plan, tax and legal fee to get the assets when you want, as you wish.
Elders' Law: Plan obstacles to get people who want to handle your work and prevent your assets from running out due to long-term care.
Introduction of real estate planning and senior citizen law
Practice real estate planning and senior citizens law is one of the most enjoyable and profitably profitable careers a lawyer might choose. Please imagine a practice area where your client respects your knowledge and treats you with kindness and courtesy. They pay your expenses in a timely fashion and tell your friends how much they enjoy working with you and your company. At the same time, it rarely faces the pressure of deadlines. Not a few lawyers are trying to do their best. In most cases, I am acting with the ability of a legal advisor (trusted advisor), not a lawyer (agent).
We spend each day meeting our clients, discussing their lives and their families, and dealing with fears and concerns. Through our knowledge, training, experience, imagination, we create solutions, sometimes elegant, to the outdated problem of passing assets from one generation to another without pain as quickly as possible. At the same time, we also strive to protect these assets so that taxes, legal fees, and costs of nursing homes will not be exhausted as permitted by law.
The ultimate result of this process is a client who feels safe and secure in the knowledge that in case of death or disability they cover all bases. Their future is well planned and realized a sense of security that you can overcome with the business of enjoying their lives. For lawyers, a happy and satisfying client was added to the practice, potentially a mutual reward relationship beginning over the lifetime began. Let's see the strategies and techniques used to achieve this enviable state.
Key issues facing senior clients today
One way to support clients is to allow comprehensive planning to avoid trial proceedings in case of death or disability. Trusts are used instead of wills for elderly people. The trust also avoids the foreign will test proceedings necessary for real estate heritage owned in another state. This not only increases the cost of legal proceedings but also saves family time when settling real estate. In addition, a revocable living trust, unlike a will, takes effect during the lifetime of the grantor, so the client may decide who to take over in case of disability. By planning ahead of time, you can maintain the management of family members and trusted advisers and avoid situations that do not benefit customers. For example, in the case of a disorder with no plan formulated, it may be necessary to apply to the court in order to appoint a legal guardian to persons with disabilities. This may not be the person selected by the client. In such a case, the asset can not be transferred to prevent it being wasted due to nursing home expenses without the court's permission.
Another area we aid clients is to save property tax on both state and federal for couples using two trust technologies. The assets are evenly divided for each spouse's trust. While surviving spouses use and trust the banned spouse's trust, the assets of the trust trust the property of the surviving spouse and the second spouse died Sometimes I will cross the beneficiaries directly. Potentially real estate taxes of more than several hundred thousand dollars may be saved depending on the size of property. In addition, dismissible living trusts avoid the two prosecutors who used the testament to the borrowers as they must settle the couple's real estate after the death of their respective spouses to save real estate taxes . We also help to prevent depletion of assets by the cost of nursing homes. Due to the high cost of nursing home care, you can set up irrevocable Medicaid trusts under a 5-year lookback period to ensure that clients' homes and other assets are not transferred. We use Medicaid's assets and relocation rules to protect assets when clients need nursing care nursing home care but do not plan ahead. By using Medicaid's qualified pension, promissory notes, housing contracts and nursing care agreements, even if the client is at the front door of a nursing home, there is a possibility that it will be protected from lookback for five years.
Five steps of real estate plan for the elderly
1. Understand family dynamics
The first step in trust and property issues of the elderly law is to understand the client 's competence. Usually, if you have children, you need to decide whether you are married or not. Is it the first or second marriage? Are they holding a child of a previous marriage or are they a spouse? What kind of work do they do, where do you live? Do they get along with their parent clients? We want to know which family members are not dating other people and why. This will help determine who should make the decision of the doctor and who should handle the legal and financial problems. Should it be one of them or multiple? How should real estate be divided? Is there a client himself at the second wedding ceremony? Which child, if any, he, she, or their children? Three instances may all occur on the same couple. Here, as the possibility of injured emotions, conflicts of interest, misunderstanding increases, further exploration of family functions will be necessary. In addition, we must pay sufficient attention to plan for the management, management and distribution of assets not only fair to children but also fairness from previous marriages. From time to time, the help of professional counsel in the position as trustee may be very valuable in helping to maintain peace among families. Finally, this step may be ideal for families and assets to provide to such children wherever there is a dependent with special needs.
2. Review of existing real estate plan
In order to judge whether the legal trust and property of the elderly are legally adequate, it is necessary for the client to decide whether the client, such as intention, trust, power of attorney, health care agent and survival will, It reflects whether it is current hope or old. Questions regarding some basic elderly legal real estate planning,
a. Is the client a US citizen? This will affect the client's ability to save real estate taxes.
b. Does the client intend to receive inheritance? This knowledge is useful for creating plans to deal with future assets as well as assets that clients currently possess.
c. Does the client have long-term care insurance? If so, the lawyer will review the law and, if considering the customer's other assets and income, inflation, I would like to judge whether it will bring appropriate profit considering whether it is upgradeable or not. This allows the practitioner to decide whether other asset protection strategies are needed now or in the future.
d. Does the client need a financial plan? Many customers who encounter elderly attorney attorneys have never received professional financial advice and are dissatisfied with current counselors. They need help to understand assets or organize and organize assets to facilitate management. They may also be concerned about having insufficient income for the rest of their lives. The elderly lawyer has many competent financial planners who have experienced the needs and desires of senior clients, including assets that tend to maximize income, (1) securing investment by protection of principal money, and (2) I usually know.
3. Reassess client's assets
The third step is to get a complete list of customer assets. It includes the name and value of the asset, whether it is a qualified investment such as IRA or 401 (k) etc. If they are doing a useful design, who is that beneficiary? Advisors armed with this information are in a position to judge whether real estate is subject to both state and federal real estate taxes and initiate a strategy to reduce or eliminate that tax within the permissible limits of the law There is a possibility. This will shift the asset between the spouse and the trust, change the useful design, and at discretion try to determine which spouse is the first to die and to save taxes as much as possible. Ideally, attorneys should allow customers to fill in secret finance questionnaires prior to initial consultation.
4. Formulation of real estate plan
The fourth step should be appointed by a lawyer to handle legal and financial problems in the case of clients if it is necessary to make doctor's judgment for the client based on information from the client It is to determine a person; incompetence. Then, what kind of credit do you have, whether simple is enough, whether it should be a trustee (for trust) or executor (for will), how the distribution plans are I will consider whether it should be. In order to avoid conflict, the trustee chosen on behalf of the grantor must be the same name as the power of attorney. At this point, you should pay sufficient attention to ensure that the heir's feelings are not hurting. A good real estate plan will see the heritage of the heir. It is necessary to consider not only the viewpoint but also the client's viewpoint. For example, if you have three children, three people are usually unwieldy, and if the client selects only two people, one person leaves the room, so if it is desirable to name it as a trustee or executor there is. If you have 4 or 5 children, we recommend you to choose 2 trustees or executives. In this way, just having to answer everyone else will reduce the pressure. More importantly, the other people will feel much more certainly that the two brothers are pursuing their interests jointly.
If distribution is inequal, after parents died, it may be necessary to consult with the affected children in advance to prevent malicious behavior or litigation from occurring. By considering the relative age of the children, the places they live, the relations between each other and their parents, the adviser generally plans to respond to the needs and desires of all stakeholders involved You will find a way. Some of the techniques that are useful in this context is to provide delayed delivery such as 20% at the time of death of the grantor, half of the remaining balance after 5 years, reminders after 10 years. These same percentages can also be used at prescribed age such as 30, 35 and 40. Also, when leaving a percentage of real estate, it is often useful to determine the monetary value of that percentage in the client's current real estate, unless it simply distributes equally to the children. This allows the client to see if the amount he really wants to keep. Avoid heritage to charity and try to avoid explaining the expenses the family spends on property management to charity.
Regarding the type of trust, we generally consider several options for most clients. It is important to decide if you need one or two trusts. In order to avoid or reduce real estate taxes, two trusts are required for spouses whose real estate may exceed or slow the state or federal income tax threshold. Is the trust revocable or irrevocable? The latter is important to protect assets from nursing home expenses covered by a five-year lookback period. The main feature of the irrevocable Medicaid Trust is that the spouse of the grantor or spouse is a trustee and these trustees are trustees of income only. Most people choose to act one or more of the adult children as trustees of irrevocable trusts. Because the principal is not available to the grantor, the client does not want to place all of its assets in such trust. As for the assets to be excluded, IRA's 401 (k), 403 (b) & # 39; the principle of these qualifying assets is usually exempt from Medicaid, It should not be included in a trust because a taxable event occurs that requires payment. If institutionalized customers have community spouses, they may be exempt from about $ 100,000. If the community's spouse lives there, she will protect the house sooner rather than waiting for the first spouse to pass because of a five-year lookback period despite the exemption of the house In general it is a good idea. Lookback is a five-year period until temporary assets are transferred to an irrevocable trust and exempted. Or it is protected from being obliged to be obliged to discharge from the sick care before taking care of the illness What will happen if the client enjoying the benefits of Medicaid does not do for 5 years? The client needs to enter the nursing home 4 years after trust is established. In such a case, the family will be qualified for Medicaid after paying personal nursing facility to the nursing facility for the remainder of the year, after the remaining period of the five-year penalty period has expired.
The Medicaid trust is said to be irrevocable, but it is possible that the house has been sold or other trust assets have been traded. The trust itself may sell the house and purchase the condo under the name of the trust to protect the asset through the actions of the trustee. The trust may sell one share and buy another stock. An adult child's trust may sign an approval of a third party that allows the intermediary company to continue the transaction with the intermediary. The trust pays all income (ie interest and dividends) to the parent donor. Therefore, payment of irrevocable trust should not affect customer's lifestyle when added to the distribution of pensions, social security, IRA that customers receive from other than trusts. There is no need for a separate tax return for a revocable trust, but an irrevocable trust requires "information provision" to notify the IRS that income is "passing" to the grantor.
In the case of children with disabilities, consideration is given to creating government confidence, in particular social security income and the confidence of ancillary needs to pay more than what children receive in Medicaid, inheritance they lose their status Never have those advantages.
Finally, as far as medieval families leave substantial heritage to children (depending on how many children are currently), children are protecting their heritage because the size of property is growing A blood trend that tends to establish the trust that it is. Inherited trusts, heritage trusts, or trust funds are often called, but these trusts include additional functions such as protecting children's divorce, litigation, creditors, property tax inheritance from death there is. However, all the main features of these trusts for heirs are that when a child dies, in most cases, after years of parents the family's hard-earned assets are not handed over to the obligatory son It is to do or can be transferred to the grantee's grandchild, not to the daughter-in-law who can remarry. On the other hand, if the client wishes to obey his or her duty as a duty or duty as a duty, they may choose to provide some or part of that trust as an "income only" trust for their adults The survival period of the child is the survival period, after that it becomes only the giver of the giver.
5. Application for Medicaid benefits
If you need nursing care or facility medical care at a nursing home, it may be necessary to apply for Medicaid benefits. Because of complex assets and rules of relocation, applications need to be done with the help of experienced elderly lawyers. In this context, it is also useful for confidential investigation of client assets and transfer of assets to be filled prior to the first consultation. This type of financial investigation is significantly different from what is used for the purpose of real estate planning. Medicaid assets and transfer rules that combine federal and state programs vary widely from state to state. Soon, several methods will be widely applied. First, when an adult child takes a parent to take care of it later, an agreement on housing must be made with nursing care so that assets are transferred from parent to child properly before nursing Home care. Adult children are required to report all payments received under the agreement as income earnings to the tax return. Also, as families are usually the most important asset, you need to borrow a house from an adult's child at home while holding your parent's livelihood, or consider whether or not you trust an irrevocable Medicaid There must be used to protect assets.
The act of having a life insurance policy does not cost to the client, but in most cases it brings a serious disadvantage compared to the trust. First, if a house is sold before the Medicid recipient dies, the house's living expenses need to be paid to take care. If the house is rented, the rental fee will be paid to the nursing home as the rented house belongs to the rented house. Finally, the client loses most of the capital gains tax on the sale of primary housing, since the client is only entitled to proportional allocation based on the value of the household real estate for daily use. All of the above may lead to circumstances where the family decides that you have to maintain an empty house for many years. Conversely, the appropriately drafted irrevocable Medicaid trust maintains the elimination of a complete capital gains tax at the primary housing, and without the obligation of the principal paying the principal to take care of himself, The lookback period has passed. It should be noted here that both the life property and the irrevocable Medicaid trust hold the foundation stepped up to property on condition that it is sold only after the parent who was the owner or assignee died It is to do. When the parent dies, the basis for calculating the capital gains tax is added by converting the amount paid by the parent and the amount of improvement into the value of the date of death of the parent. This substantially eliminates the payment of capital gains tax on the sale of approved property such as home after the death of the parent. Both irrevocable trusts and irrevocable trusts reserve potentially exemptions that customers may have at home, such as senior and veteran exemptions.
Finally, even clients who are already in nursing homes can save important assets by advanced technology outside the scope of this guide. If you or your family are in this situation, please consult a lawyer in law.
Main mistakes in real estate planning and law
1. We can not deal with all problems.
In order to comprehensively review the client's situation, it is necessary to consider not only the plan of disability, including planning of death, including minimization and avoidance of real estate taxes and litigation fees and procedures. A plan should be established to protect assets from the costs of nursing homes. Like a chess player, the defense counsel must look two or three times ago to judge what will happen in the future. For example, a lawyer would put too much of its assets too often, considering his wife's name, or her husband has important IRA assets in his account. However, my husband is often old and there is a survivor's life expectancy, so IRA assets will be handed over to my wife and all of my couple's assets may end up as my wife's legacy. Real estate tax saving has been realized. Another example is when the customer's child is in the second marriage but there is a child of the previous marriage (grandchild of the customer). If the customer's child's inheritance trust is not planned, the client's child will give priority to the second spouse, all the assets will go to the second spouse and the client's child will be from the previous marriage of his son or daughter 'S grandchildren will be rejected from the benefits of their assignor's property.
2. Do not review real estate plan regularly
At least, each client's real estate plan will influence the plan, such as changes in client health, assets, or family history (birth, death, marriage, divorce etc) should be reviewed every three years). It is not realistic to expect the plan to be established in the future to be 10, 20, 30, or more. Over time, the client wants to change the backup trustee or distribution plan. They may want to add inheritance trust for their children. They have long hoped to change from irrevocable trusts to irrevocable trusts. Lawyers benefit from the necessary additional legal work and clients can benefit at any time by having a plan that is appropriate for their current needs.
Conclusion
Despite knowledge, enthusiasm, and the attractiveness of the land's top class practitioners, clients often do not act on given advice. As an experienced lawyer, if the client chooses to ignore the advice or choose another attorney, he will not hire a lawyer personally. We know that people do not always do what they need. They are doing what they think they want. Recently, as long as a 93-year-old client is planning his work, he said, "I wanted to think." According to experience, this client is not ready to plan at this time through advanced years, respecting its choice. Meanwhile, we recently came to tell customers that they are ready to proceed 11 years after their first consultation. We prepared a real estate plan.
Perhaps the best approach to real estate planning and elderly legal practices is to follow four SWs. Some do not have someone waiting, so some. We will move forward and assist ourselves towards those who are helped by us and whose services are considered valued, advised, sometimes heroic.
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