Planning for Your Special Needs Loved One
Thursday, May 10, 20126:30 – 8 pmNewtown Library201 Bishop Hollow Road, Newtown SquarePresented by:Dennis C. McAndrews, Esq.McAndrews Law Offices Pat Bergmaier, CFP, LUTC MetLife Center for Special Needs Planning Ginny Koehler PLAN (Planned Lifetime Assistance Network) of PA
Estate Planning For Families in 2012 – Pitfalls of Gridlock in Washington
By: Dennis C. McAndrews, Esquire
If Congress and the President do not reach an agreement in 2012 to extend or modify the existing Federal Estate Tax Threshold of 5 million dollars per person and 10 million dollars per couple, the threshold will reduce to 1 million dollars per person on January 1, 2013. In light of recent Washington gridlock and the fact that most life insurance and retirement plans are included in the Federal Estate Tax calculations, 2012 is a critical year to review your Estate Plan and to adopt relatively easy strategies to address the potential serious consequences of this situation. A list of the critical documents to review and consider is set forth below. Will– The document which directs the disposition of property not held in joint names or which pass by a beneficiary designation. The Will identifies the individuals charged with administering your estate, provides a financial structure and guardianship for minor children, and seeks to avoid unnecessary federal and state death taxes. Trusts – The mechanism by which property is held for the benefit of designated individuals. Several types of Trusts may be used in typical estate plans.
1. Credit Shelter Trust – used to allow spouses to utilize their individual federal estate tax exemptions by placing assets into individual names rather than in joint names; the surviving spouse is generally the beneficiary of the Trust during lifetime, with any residue typically flowing to children or other designated beneficiaries. Under the current tax law, the use of a Credit Shelter Trust is disfavored in some situations, and the Disclaimer Trust is a frequent alternative.
2. Disclaimer Trust – permits post-death tax planning by use of a qualified disclaimer of property of the decedent, typically by the surviving spouse, to utilize the deceased spouse’s federal tax exemption; in other respects, the Disclaimer Trust operates largely like a Credit Shelter Trust, and due to the uncertainty of post-2012 taxation, the Disclaimer Trust is often the Trust of choice in current estate planning.
3. Irrevocable Life Insurance Trust – proper use of an ILIT removes life insurance from the estate of the deceased policy holder.
4. Special Needs Trust – allows an individual with disabilities to benefit from the resources of a Trust while continuing to receive essential public benefits, most notably Medical Assistance, Supplemental Security Income, and Mental Health/Intellectual Disability benefits.
5. Minor’s Trust – provides a mechanism to maintain resources by a Trustee on behalf of minor children until they reach an age, designated by the testator, at which full access to the funds will be provided. Power of Attorney – provides financial and medical authority to one or more designated individuals to act on one’s behalf, especially at times of incapacity. Advance Medical Directive – provides instruction to a hospital regarding the use of designated medical procedures in circumstances where you become permanently unconscious or terminally ill without reasonable hope of meaningful recovery.
If you would like our office to review or develop your estate plan, please call us at (610) 648-9300. To receive an electronic copy or more information regarding this article, please call us or visit our website at www.mcandrewslaw.com.
Estate Planning for a Disabled Child: Coordinating Your Estate Plan with a Special Needs Trust
By: Lesley M. Mehalick, J.D., LL.M.
Special needs trusts provide an invaluable option for parents who wish to leave an inheritance, whether large or small, to their disabled child while still preserving that child’s necessary public benefits. Families with special needs children face unique and difficult issues when considering how best to plan for their child’s future. When parents leave an inheritance outright to a special needs child, either by will or otherwise, they may unintentionally disqualify their child for crucial public benefits, such as Supplemental Security Income (SSI), a benefit that provides income to persons on the basis of disability and need, and Medical Assistance, which provides health insurance for low-income individuals. Both SSI and Medical Assistance are resource dependent, which means that a recipient of these benefits can have only extremely limited amounts of personal assets and income. READ MORE