Should A Person on Disability Inherit?

Medicaid and SSI both have very stringent resource (and income) thresholds that could be implicated by a bequest or gift. The result is that the disabled individual could loose their SSI and Medicaid benefits. Therefore, they could be forced to pay for or even forego nursing care or other healthcare benefits.

What exactly is meant by "resource"? A resource is defined as cash or other liquid assets or any real or personal property that an individual owns and could convert to cash to be used for support and maintenance. So even if one who is disabled inherits a small interest is a house (real estate), it is considered a resource because everyone with an interest in the property has the right to seek their financial (share) interest in the real estate. That means they can force a sale or be brought out by the other owners.

So, how can a disabled person obtain and inheritance and still maintain their Medicaid and/or SSI benefits? The legislature and courts in Pennsylvania have recognized special needs trusts or supplemental needs trusts that when properly executed can reduce the costs to famiies and provide additional resources for the disabled person on Medicaid or receiving SSI.

We will continue this week to discuss the different types of special needs trusts. Contact our offices at http://www.ythlaw.com/ for expert estate planning advice.

Estate Planning for Family Members with Disabilities

Over the next few days, I will discuss the issues pertaining to estate planning for families with disabled family members. Generally, family members desire to leave money to a disabled loved one in order to maintain or improve the quality of life. However, if this is done with a bequeath in a Will or an outright gift, more harm than good could result.

Medicaid and SSI both have very stringent resource (and income) thresholds that could be implicated by any significant bequest or gift. The result is that the disabled individual could loose their SSI and Medicaid benefits. Therefore, they could be forced to pay for or even forego nursing care or other healthcare benefits.

Let's discuss what can be done over the next few days. Feel free to contact us at http://www.ythlaw.com/ to discuss all your estate planning needs.

What is an Endowment?

I did a presentation and book signing at Freedom Theatre sponsored by African Tropic Decor Gallery, Inc. It was a wonderful evening. The art on display was uniquely fantastic.

Well, we had lots of questions which I enjoy the most when I do these presentations. I share one with you here. What is an Endowment? First, an endowment is not a bequest which is a gift left in a will. Note, a bequest could go towards an endowment. An endowment is not a trust which serves a specific purpose and generally can hold a variety of assets.

An endowment is a fund established generally with money, but can include real estate and other assets, to benefit an institution or person. It has a specific purpose and the money in the fund is to be applied for that purpose. In an endowment fund, the principal is invested, and only a portion of the investment earnings, income, is spent. The rest of the earnings are directed back into the fund, so that the endowment grows over time. In this manner, the endowment becomes a perpetual source of funding for whatever the person making the donation wishes to achieve.

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Princess Di - Formalities are Important For a Will

It is important that your will is signed, witnessed and notarized in order to avoid unnecessary controversey. Some individuals like to leave a memorandum noting distribution of some objects. However, it is important to go through the formalities required of a valid will to make sure your wishes are followed.

At her death in 1997, Princess Diana left a detailed will, naming her sister and mother as executors. She also wrote a separate "letter of wishes" asking her executors, at their discretion, to divide her belongings among her sons and her 17 godchildren. But instead of getting stuff worth over $100,000, each godchild got the equivalent of a trinket. If you want someone to have somethng special do not rely on others to do it for you, provide for it in your will.

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Ways to Make Charitable Gifts

Many people during their lifetime engage in charitable giving activities. They make gifts to cancer research, heart associations, educational institutions, or well water projects. Many give to hospitals, churches, or other religious and cultural institutions. Others have long term relationships with charities and want to continue charitable giving upon their death but they just do not know how. That is where estate planning comes into play.

There are many ways to engage in charitable estate planning. Today, I will address one of the most basic ways to make a charitable gift. That is through a bequest made in your will or trust. A bequest is appealing to many people because they can maintain control of their assets until they die, it is the easiest way to give, and it can also be changed at any time. The bequest is a statement in the will or trust identifying assets you want to leave and to which charitable institution you want to leave the assets.

Tomorrow, we will address other charitable estate planning methods. Stay tuned.

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Your Legacy And Charitable Giving

When you use the term philanthropy, many people think it does not apply to them but to the very wealthy. However, most people do see themselves as charitable. Well, philanthropy and charity are one in the same thing. You often are charitable to those things that matter most to you. In your display of charity, you are expressing a part of yourself, a part that can be captured in your estate planning. It is your personal legacy.

For many, one of the most important part of a personal legacy is philanthropy/charitable. But it is seldom just about the amount of the check or the impact the gift has on taxes. It is about the personal legacy story and the portion of the story that the charitable gift completes.

I have many clients who are committed to the idea of higher education and making it more accessible and afforable to others. As a result, they often want to provide a bequest in their will or establish a trust which would represent their legacy. They feel a greater sense of connection to the causes and educational institutions to which they give, and they are better able to articulate their values and life experiences that led them to their philanthropic/charitable choices. As a result, philanthropy/charity can provide the added benefits of both a teaching tool and a treasured family tradition.

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Rethinking Your Estate Plan - Question 2

This is a continuation from the previous day. An article in Money Magazine could prove very beneficial to you and so I share the 5 questions posed in the article with you over the next few days.

2. SHOULD DISTRIBUTIONS TO CHILDREN BE EQUAL OR FAIR?
"How should you split your money among your offspring? In a 2007 Money survey, 69% of respondents said dividing their estate equally was very important to them. Experts agree that equal is generally better, even if one of your kids is a struggling actor and another is a successful software developer. You don't know what the future holds. Your single son marries and has five kids; your techie daughter loses her job and becomes a teacher. Unless you're willing to constantly tinker with your will - and explain every change to your kids - parceling out different amounts can back-fire bigtime.

A better solution: Bequeath your children an equal amount upon your death, but make gifts as needed to them while you are alive if you can afford it. Want to help your daughter with your grandchildren's education? Contribute to their 529 college savings plans. (The IRS allows you to make the equivalent of five years' worth of gifts to a 529 all at once - that's $65,000 a child, or $130,000 if given by a couple.) The struggling actor is trying to buy a home? Help him with the down payment.

There are exceptions to the "equal" rule, however. A disabled child who is dependent on you will probably require a bigger share of your assets, which you can provide through a so-called special-needs trust. A child who works in the family business may deserve a larger share of it than one who doesn't. No matter what you decide, explain your thinking so that your kids won't have wrenching and potentially costly disputes later."

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Charitable Estate Planning - Bequests

There are many ways to engage in charitable estate planning. One of the most basic ways to make a charitable gift is through a bequest, which anyone can make in their wills. A bequest is appealing to many people because they maintain control of their assets until they die. It is the easiest way to give, and it can also be changed at any time before the person dies.

The bequest is a statement in the will identifying assets that you want to leave and the charitable institution to which you want to leave the assets. This is the simpliest way to remember those institutions and charitable endeavors that were important to you during your lifetime.