When you leave on vacation you make a long list of instructions for the person who will be caring for your children.  How carefully tailored should those instructions be if you never come back and you have a special needs child who will never grow up?  This daunting task is part of the reason for a Special Needs Trust.  Wichita clients may have heard me speak about them on the radio a time or two.

Sometimes known as Support Trusts or Supplemental Needs Trusts, a Special Needs Trust is created to care for someone with “special needs.”  Generally speaking these trusts are designed for those who are disabled and will need to have assistance from some “needs based” government program for their medical care and/or their financial support. The primary program considered by these trusts is Supplemental Security Income (SSI) from the Social Security Administration.

Giving money to help someone who is receiving government benefits can often do more harm than good. The problem many people with “ultra sick” children or relatives face is that the government support program is not enough to meet their loved one’s special needs.  Wichita area clients need to be aware that, if they try to give any support to their loved one, the government benefit will cease until the loved one has run through all they have been given and are destitute again. When this happens, the loved one must re-apply for the government benefits that were terminated and “if approved” they will be back where they started. The major downside is that the approval may take a couple of years if they are approved at all. During that time they have absolutely no support whatsoever. An inheritance can have the same effect.

Special Needs Trusts in Wichita and elsewhere (or the more restrictive Supplemental Needs Trusts required by some states like Kansas) are very specifically designed trusts that allow additional support to be offered to an ultra sick or disabled loved one without causing the loved one to lose government benefits.

A Special Needs Trust may be drafted into a Revocable Living Trust based estate plan as a subtrust that only comes into being if it is required. (i.e. Your child dies and one of the grandchildren who will inherit in her place has a head injury and will never be able to support herself.) Most often these trusts are drafted as stand alone documents that can take into account much more specific instruction for your loved one’s special needs.

These trusts may be funded by cash or other assets of the Trustmaker, donations by third parties, a Life Insurance Trust, a Charitable Remainder Unitrust, a Charitable Remainder Annuity Trust, or just about any other creative (but legal) manner that would fit your unique situation.

Contact us to schedule a Special Needs Consultation today.  (Call us to see how you can get a coupon worth $250 to pay for your Special Needs Wichita consultation.)

Gone are the days when a family gathered in the attorney’s office to hear the will read and that was the end of it.  Under current law a will’s provisions only become effective by going through a court process called probate.

Probate is like a leaky pipe.  All of your stuff goes in one end then money to pay creditors comes out, any money to satisfy contests to the will comes out, money to pay the attorneys involved comes out, money to pay the accountant that values the assets comes out, money to pay the executor comes out, etc….  However, if there is not enough sometimes property you intended to go to someone must be sold to satisfy expenses of the estate prior to any distribution.  Whatever is left over will be given to your beneficiaries.  The Court will determine the final distribution.  All of this process is public.

Modern estate planning avoids the probate process wherever possible.  Most often planners use a Revocable Living Trust.  Wichita area and other Kansas residents can completely avoid the probate process by proper use of a revocable living trust.  Wichita Courts do not get involved, everything is private, and a smooth transition takes place according to your directions.  The nationwide average time from opening a probate case to closing one is eighteen (18) months.  Through use of a revocable living trust, Wichita clients should expect access to funds immediately to pay bills and the trust should be completely settled in a matter of weeks.

Creating a trust is like creating a business for your personal affairs and assets. If you were to create a business to sell clocks, then you would open a checking account, put some money into it, and write checks from that account to purchase all of your clock parts. The business would own the clock parts and the money in the checking account separate and apart from you. The business owning the inventory, cash, equipment, & furnishings doesn’t bother most people because they know they are in charge of the company. If something happens to you and you need things done with your company, you have instructions in place for who is to take over which responsibilities in your absence.

A trust is exactly the same. You create a separate entity called a trust and you place some of your assets inside of it. You are the manager of the trust (called a “Trustee.” The trust owns things separate and apart from you but you still control it. The trust is almost a magical document in what it can perform. You decide how you want your life run when you are incapacitated or have passed away and the trust is the contract that instructs the next manager/Trustee how they will handle things for yourself, your spouse, your children, charities, etc….

Benefits – Appropriate and Comprehensive Legal Planning with a Revocable Living Trust based estate plan can reduce the emotional trauma your loved ones face, give you a say in your care once you are incapacitated, and assure that what you have goes to who you want, when you want, and how you want. If done properly you will:

1. Have a Disability Trustee in Place

2. Avoid Death Probate

3. Avoid Living Probate

4. Transfer Assets Smoothly

5. Take advantage of any available Estate Tax Savings or Exemption Amount available

Contact us to schedule an Estate Planning Consultation today.  (Call us to see how you can get a coupon worth $250 to pay for your Living Trust Wichita consultation.)

In order to properly advise clients, we must not only look at issues associated with death, but we must also analyze potential needs for long-term care.  Long-term care can either be paid for out of your personal and family assets (private pay) or at least part of the expense can be defrayed through a benefits program.  The best known benefits programs are Medicaid and the Improved Veteran’s Pension (Aid & Attendance) benefit.

You have paid into the government benefits systems your whole life.  However, if you attempt to make application to one of them you are told that before you can use them you must first become impoverished.  What they don’t tell you is that using laws and provisions already in place, those who plan properly may safeguard a portion of assets to supplement their own care, care for a spouse, or pass on to children.  This type of planning requires the assistance of knowledgeable legal counsel.

An attorney who helps people plan for long-term care is most often referred to as an Elder Law Attorney.  Wichita residents should understand that few attorneys have the specialized knowledge necessary to do Veteran’s Benefits planning or Medicaid planning.  Typically general practitioners will not be able to give the type of counsel, analysis, planning, and help necessary to effectively help those seeking benefits.  When choosing an Elder Law Attorney, Wichita and Kansas residents would do well to choose someone who limits their practice to the areas of estate planning and Elder Law issues.  At Advanced Legal Planning, LLC we strive to stay on top of all that matters in Elder Law and Estate Planning.

Medicaid

Medicaid is the program most often turned to for assistance with nursing home and other long-term care expenses.  It is a federal program.  However, each state has authority to administer the program as they see fit.  Not only will acceptable planning methods change from state to state, but sometimes even from county to county.  The requirements to receive the assistance are stringent and violation of the restrictions can come at a high price.

The Deficit Reduction Act of 2005 took away some of the most useful planning strategies of Elder Law Attorneys.  While there are some things that can still be done when one spouse needs immediate nursing home care, the changes in the law make it more important than ever to plan early to safeguard the most assets possible.

Aid & Attendance

The Improved Veteran’s Pension (Aid & Attendance) is designed to help veterans who are destitute and completely disabled do to a non-service connected disability.  This is a much easier area to plan for than Medicaid.  However, it has its own pitfalls.  Because of the opportunities there are some non-attorneys who are using the guise of planning for this benefit as a marketing tool for selling annuities and other financial instruments.  While annuities and other financial instruments can be very useful in planning for Aid & Attendance, it is important to work with someone who places your goals first and understands how the use of any particular financial instrument will affect planning for the possibility of applying for Medicaid in the future.

Do not be discouraged thinking that you have too much in assets to qualify for either of these programs.  With some effort, your estate can be restructured so that you qualify for the technical requirements of either or both programs.  With the help of an Elder Law Attorney, Wichita clients can qualify for the benefits they will need without spending every last dime that they have.

You do not need to be poor to qualify for Medicaid or the Improved Veteran’s Pension benefits (Aid & Attendance).  However, you do need to have your affairs properly prepared.  For this you need an Elder Law Attorney.  Wichita and Kansas residents should consider someone who focuses their time and attentions on the areas necessary.  We hope you will consider Advanced Legal Planning, LLC.

We can help you determine whether it is possible to qualify for Improved Veteran’s Pension benefits (Aid and Attendance).  We have invested in the resources necessary to help you plan for Medicaid and determine the best ways to safeguard the greatest amount of assets for your loved ones.

Contact us to schedule an Elder Law Consultation today.  (Call us to see how you can get a coupon worth $250 to pay for your Elder Law Attorney Wichita consultation.)

(Asset protection for the little guy.)

I had an interesting conversation with my oldest son last night.  We were talking about Asset Protection Wichita Kansas clients.  I told him how to protect and legally hide some types of assets.  What really got me was his comment, “Wow, you sure do some interesting work.  I guess that’s one example of the rich getting richer and the poor getting poorer.”  His comment bothered me.  While it is true that the work I do is aimed at protecting (sometimes even legally hiding) the assets of wealthy clients, I want people to know that asset protection is made available, in one form or another, to EVERYONE.  Yes – asset protection in its most basic sense is made available to the factory worker as well as the CEO.

There are five tiers of Asset Protection Planning:

1)      The law of your jurisdiction (State).

2)      Insurance

3)      Business Structures

4)      Domestic Asset Protection Trusts

5)      Foreign Asset Protection Trusts

1)  The laws of your state.  The laws of your state provide differing measures of Asset Protection.  Wichita residents avail themselves of the laws of Kansas which have some very favorable asset protection laws.  For instance, in Bankruptcy or a creditor claim your “homestead” is protected and can not be taken from you.  This includes a home of any value as well as any contiguous land up to one (1) acre inside the city limits or one hundred sixty (160) acres of contiguous land outside of the city limits.  Another example is the bankruptcy code that allows you to extinguish debt while keeping some assets.  The laws of one’s own state provide asset protection to all citizens regardless of assets or income levels.  Different states have different laws some are more favorable than others.  For Asset Protection, Wichita residents use Kansas law which is not quite the best, but the laws definitely lean in favor of the little guy.  There are only a couple of states with any laws superior to Kansas for Asset Protection purposes.

2)  Insurance.  If you drive a vehicle you are required to have insurance.  If you have a mortgage on a home you are required by your mortgage company to maintain insurance.  Most people and most business carry health and liability insurance outside of what they are required to by any law or contract.  Why is that? It is because they wish to safeguard their assets in event of a disaster or other unfortunate event.

Most people do not think of Insurance as Asset Protection.  However, that is EXACTLY what it is.  If you have insurance and get in a car wreck, the insurance covers your liability so you don’t have to liquidate assets to pay a judgment.  This is the second tier of defense of ones own assets and is asset protection Wichita residents take advantage of without ever realizing what they are doing.  This is the first shield any individual or business owner should wield to protect their assets.  I had a recent asset protection Wichita client tell me that he spends about $200,000 a year in insurance premiums for the apartment buildings he owns.  Take a lesson from the rich and use insurance wisely to protect yourself.

3)  Business Entities.  For asset protection, Wichita clients will often form business entities.  These can take various structures with varying degrees of asset protection.  This is where, for Asset Protection, Wichita clients need to start educating themselves.  While this is the most often used and one of the most effective asset protection strategies when properly employed, I believe it is the least understood by those who could be taking advantage of its protections.  This is one area where it is not the amount of wealth, but the amount of education that separates those with proper asset protections and those without.  Business Entities are the primary “go to” technique used for asset protection by the wealthy and the business man just scraping by.  It will serve either of them well and it could be argued that the struggling businessman needs it more than the wealthy one.  Really, how much can the struggling business man stand to lose before he is forced to close his doors and sell off his families belongings?

Asset Protection Wichita clients (as well as those elsewhere) would do well to understand that this is not something to be trifled with.  Legal documents are tools of a trade the same as a surgeon’s scalpel.  If you go to some “do it yourself” solution to prepare an LLC, you could be placing your assets in great jeopardy.  You know you can not perform surgery.  If an online service were to claim that they could guide you through the process would that make you comfortable enough to make the first cut?  An LLC should be thought of no differently.  There are things a knowledgeable and experienced attorney will understand that a lay person will miss.  Yes attorneys cost money but it should be thought of as an investment in your security the same way insurance is thought of.

4)  Domestic Asset Protection Trust.  Placing Domestic Asset Protection Trusts in the fourth tier should not be mistaken as an implication that they are superior to the use of Business Entities.  However, one does not usually use a Domestic Asset Protection Trust unless business entities have already been utilized.  Typically they are combined in a joint structure.  This is also the first tier where people of modest means usually do not tread.  Domestic Asset Protection Trusts do not typically make sense unless a lot of assets are involved.  Typically they will not be put into place unless the need is great or there is enough money involved that the expense is not a barrier to their use.

5) Foreign Asset Protection Trusts.  We have all heard stories of people putting money “off shore.”  Those tales are both good and bad.  The good ones typically are using some form of off shore trust for their Asset Protection.  These are known as Foreign Asset Protection Trusts.  This is the best protection money can buy and it usually takes quite a bit of money to buy it.  However, even the rich who utilize Foreign Asset Protection Trusts typically only use them for a small portion of their total assets.  For the rest they use the every day asset protection available to the rest of us.

Contact us to schedule an Asset Protection Consultation today.  (Call us to see how you can get a coupon worth $250 to pay for your Asset Protection Wichita consultation.)