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The Five Key Trusts You Must Know

by with No Comment Asset ProtectionEstate Planning Drafting SoftwareLegal MarketingMedicaidVA

Did you know that when it comes down to it there are only *five* trusts that serve 99.7% of all client needs? These include:

  1. The revocable living trust;
  2. The income only irrevocable trust;
  3. The control only irrevocable trust;
  4. The third party irrevocable trust; and
  5. The completed gift irrevocable trust.

Bigstock-Old-Keys-42114148This is all you need to serve 99.7% of all clients. The overindulgence in conversation about DAPT'S, GRATS, GRUTS, FLPs, and other advanced tax planning strategies are for mental exercise only and apply to less than 3 in 1,000 Americans.

The correct trust choice for clients when designing planning to protect their businesses, ensure they qualify for Medicaid, if the need for long-term care occurs, or the preservation and maximization of veteran's benefits, trust choice is critical. But more important than trust choice however, is the drafting utilized inside the trust chosen.

That's why the national Medicaid and VA experts are hosting a three day program to bring you together with your colleagues to show you the solution they have created to these often misused trusts. Click here for the course outline and to register. This three day program will not only address trust drafting and trust use, but also address all of the core elements in today's Asset Protection, Medicaid, and VA Benefits environment.

In just three days, we will show you…

ASSET PROTECTION:

  • Recent updates to asset protection and Medicaid compliant strategies.
  • The new asset protection strategies dominating the marketplace.
  • The death of DAPT'S, FLP'S, GRATS, GRUTS, and tax planning, and what's replaced them.
  • The five essential trusts and key drafting needs to serve 99.7% of clients.
  • Four "must have" drafting considerations and three "most forgotten" powers in trust.

MEDICAID:

  • Four steps to Medicaid eligibility for any client.
  • How to calculate the "breakeven" to ensure the proper filing date for the shortest penalty period.
  • Medicaid Qualifying Annuities: Hidden risks and how to properly disclose them to clients or protect from them.
  • The seven key factors to calculate any Medicaid case in seven minutes (or less!).
  • IRA's: Exemption versus taxes, how to calculate if IRA's should be liquidated or exempted in Medicaid and VA cases.

VETERANS' BENEFITS:

  • New claims process for veterans and widows.
  • Qualifying assisted living facilities as UME's.
  • Key choices to complete the physician affidavit for more timely approvals.
  • Update on three year look back for VA benefits.
  • The key reports no longer required for VA applications.
  • Dangers of annuities in VA benefits planning.
  • The effects of the Supreme Court decision on DOMA related to veterans benefits.

ALL PARTICIPANTS IN THIS SUMMIT WILL RECEIVE:

  • Asset Protection, Medicaid and VA Practice Kit which includes:
  • 50 state Medicaid Reference Resource Guide (summarized in 3 pages)
  • 50 state Estate Recovery Article and updated state by state summary.
  • Grantor Trust Summary and use tool.

HERE'S WHAT YOUR PEERS HAD TO SAY ABOUT THE PROGRAM:

“You don't know what you don't know. Come learn how to best serve your clients.” –Matthew Donald

“I would consider this mandatory training for any elder law/estate planning attorney. If not, they should plan for a mediocre practice at best.” –Tim Jarvis

“Just do it. The tools and training will absolutely be worth it!” –Rod Halstead

If you are ready for strategic solutions that you can see, touch, and feel, this is not an event you will want to miss. Click here now to begin your strategic approach to solving your clients' trust needs.

To Your Success,

Dave Zumpano
Co-Founder, Lawyers With Purpose
Practicing Attorney, Just Like You! 

 

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Congratulations to Peggy Timmel, LWP Member Of The Month

by with No Comment Asset ProtectionEstate Planning Drafting SoftwareLegal MarketingMedicaidSNTVA

What is the greatest success you’ve had since joining LWP? 

Organization + Confidence = Increasing Success.  That’s the formula we now have in place.  Sure, we still are working through some of the processes, making them our own and getting the kinks worked out when and as needed.  Not all clients initially expect the process to be as involved, but there is no doubt that our efforts are appreciated. 

PhotoWhat is your favorite LWP tool?

LWP Meeting Focuser (the green sheet) – it may sound strange to some members, but that sheet is reviewed at the end of client meetings so that tasks are delegated and the next meeting with the client put on the calendar.  I’ve been using it for cases that are pre-LWP or non-LWP, like guardianships.  It keeps our team more focused and allows us to move our clients through the entire process more smoothly.

How has being part of LWP impacted your team and your practice? 

We get to travel three times a year and always come back with something to improve our practice.  It has been incredibly helpful to have the support system that LWP provides.  The members provide a great community of support and the LWP systems and processes give us a great foundation to continually improve our practice.

The IPug™ Protection Trust

by with No Comment Asset ProtectionEstate Planning Drafting Software

The Lawyers With Purpose Client Centered Software has different genres of trusts.  And it's important to distinguish the iPug protection trust.  Many other national organizations try to compare themselves to it, but they can't.  The iPug is trademarked and even has some patent-pending features to it.

I've had the ability to look at all the softwares in the industry, and they all have features that match some of the features in an iPug trust.  But an iPug trust is a series of features that are unique all in one place that gets a variety of results.  What are some of the results?

For example, an iPug trust can be used for several facets.  One facet it is traditionally used for is Medicaid eligibility.  And there's variations of Medicaid compliance, so we have the income-only versions, we have the control-only versions, and we have the third-party versions, otherwise known in the Lawyers With Purpose community as the MIT, the FIT, and the KIT.  These are our trademarked terms.  You cannot have a MIT, FIT, and KIT unless you have our iPug software.

It is a very unique series of features and functionalities that work together to get results that apply not only to the Medicaid client, but also has uses in VA eligibility and in asset protection, far beyond Medicaid.  For non-taxable estates – ten and a half million dollars or less for a married couple – five and a quarter million dollars currently for a single person – there's a lot of functionality for asset protection.  You can use it for business owners quite commonly and I have a client that just had five of them for his multiple real estate holdings.

So these trusts have multiple, multiple applications far beyond the Medicaid, but also they're user friendly.  Clients like them because they're able to be in control of the trust or able to change them.  They're actually able to even have some uses and benefits from them with some restrictions that we provide training on.  They are very unique and very exciting!  And once you get it, it's hard to go back to anything else.

 

If you are intested in learning more about the Lawyers With Purpose software and want to spend 2 and 1/2 days with us learning about Asset Protection, Medicaid & VA, register for our Practice With Purpose Program today and reserve your spot.  If you are an existing LWP member and would like to attend please contact acrowther@lawyerswithpurpose.com for registration information.

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center

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Defensive Use Of Powers Of Attorney

by with No Comment Asset ProtectionLegal TechnicalSNT

The General Durable Power of Attorney (“GDPOA”) has often been described as the most effective burglary tool since the crowbar.  The defensive use of the elder principal’s GDPOA can minimize the potential for Elder Financial Abuse.  Proper counseling of an elder by the estate planning attorney, and customized drafting of the GDPOA to address the elder’s specific worries about the powers granted to the agent, can help minimize the potential for EFA. 

Bigstock-Power-Of-Attorney-30978749Of particular concern to many elders is the abuse of gifting authority under the GDPOA, or other granted powers that could defeat her estate plan if used improperly by an unscrupulous agent.  Other problematic powers that are routinely granted under many boilerplate GDPOAs include the authority to make tax-motivated transfers, to exercise disclaimers or powers of appointment, to sell assets subject to a specific bequest in the elder’s Will, to change beneficiary designations for the elder’s non-probate assets (for example, life insurance, retirement plans, accounts with transfer-on-death or pay-on-death designations), to create joint interests with the right of survivorship, and to create, amend, revoke, or terminate an inter vivos trust that would avoid the probate process. 

The law in many states requires a person to opt-in to each and every power granted under a GDPOA, especially the powers noted above.  Although the expense of customized drafting, explanations of opt-in powers and review of worst case scenarios for the illicit use of granted powers can be significant, these approaches can provide enhanced protection against EFA for the elder and the intended beneficiaries of her estate plan.

Additional protection against EFA can be afforded by setting forth in the GDPOA specific duties of the agent (signed and acknowledged by the agent), including the duties of loyalty, good faith, and due care; a duty to keep the principal’s property separate from that of the agent; the duty to denote clearly any of the principal’s property titled in the name of the agent in that capacity; and the duty to keep a contemporaneous record of each transaction undertaken by the agent on behalf of the elder, a running account of all receipts and disbursements as agent, and a full annual (or more frequent) accounting to the principal, her conservator, if any, other persons designated in the GDPOA to receive this information, and to the elder’s executor or other personal representative within 90 days of her death.

The GDPOA should also address self-dealing and conflicts of interest that inure to the benefit of the agent, including any specific examples the elder wishes to identify (for example, investments in the agent’s personal business or improvements to the agent’s residence or other properties).  The GDPOA should also outline whether and how the agent is to be compensated for services while acting as agent (for example, hourly at a specified rate, or a fee based on the value of the assets under management).  Fairly compensating an agent can encourage him to be more honest, attentive and diligent in the exercise of his duties, and help forestall EFA.

If you are interested in learning more about what it means to be a Lawyer With Purpose.  Come join us in Phoenix for 2.5 days of technical legal information at the 2014 Asset Protection, Medicaid & VA Practice With Purpose Program October 20-22nd.  Click the link to register today!

Kristen M. Lewis, Esq., Member of the Special Needs Alliance and Fellow of the American College of Trust and Estate Counsel.

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The Medicaid Aspects In The Estate Planning Drafting Software

by with No Comment Asset ProtectionEstate Planning Drafting SoftwareMedicaid

Our Medicaid software is industry-changing. We've designed software with artificial intelligence – it knows the applicable laws and exemptions as you enter clients' information. Not only does it tell you the plan of action to take, but it also designs the funding plan and drafts an opinion letter for you to give to clients.

Click this link to watch the video of Dave discussing the unique Medicaid aspects of the software.

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What’s A TAP™ Trust?

by with No Comment Asset ProtectionEstate Planning Drafting SoftwareLegal Technical

Many people wonder what a TAP™  trust is.  To start, a TAP™  trust is a “Tax All Purpose Trust.”  The name reflects the usability and functionality of trusts that were traditionally much more restrictive. 

Most people are familiar with an ILIT, an Irrevocable Life Insurance Trust.  This trust is traditionally created to hold life insurance policies to ensure it’s proceeds at death, are not included in the estate of the grantor for estate tax purposes.  The ILIT can be either a grantor or non‑grantor trust.  Essentially, a grantor trust is one in which the IRS deems the grantor to be the owner for income tax purposes.  This ensures that all income generated by the grantor trust is taxed to the grantor directly; on his or her tax return, and not taxed to the trust (whose top tax rate occurs at about $11,000 versus the top tax rate for individuals which is more than $450,000.  In a separate regard, transfers to ILIT’s or other grantor trusts are a completed gift for gift tax purposes and excluded from the estate of the grantor in determining the grantor’s estate tax at death.

Bigstock-Close-up-on-old-book-on-colorf-52414138The Tax All Purpose trust is similar to the ILIT but much more expansive.  Traditionally ILITs held only insurance policies.  The TAP™  trust can hold insurance policies, real estate, stocks, bonds, and even business interests.  In fact, it can own any asset you own, even your IRA, (but not until after your death).  A TAP™  trust, like a traditional ILIT, can be set up as a grantor, or non-grantor trust.  As a non-grantor trust, it will be taxed as a separate taxpayer, and all the income is taxed directly to the trust at trust income tax rates.  As a grantor trust, all income is taxed on the personal income tax return of the grantor, at the individual tax rates. The flexibility of the TAP™  provides convenience for clients because a single trust can hold many various assets rather than having a single trust for each type of asset.  Similarly, a TAP™ trust can also act as a standalone IRA trust, if designed.  While other trusts accomplish this with more flexibility, if a client had a TAP™ trust for other purposes, he or she could also use it to accomplish your IRA planning goals. 

Another opportunity use for TAP™ trusts is to make annual gifts to one (or several) people to reduce the taxable estate of the grantor.  In some circumstances clients elect separate TAP™ trusts for each grandchild.  The intent is to make annual gifts in the amount of the exclusion (currently $14,000.00) to each grandchild and appoint each grandchild the trustee of their separate trust.  The TAP™  is used as a mechanism to identify how each beneficiary utilizes and manages the assets to allow the grantor become more confident of the beneficiaries ability to manage it more responsibly.  Ultimately, the client can use the TAP™  trust to identify whether additional annual contributions should be made for the individual and whether they should be the beneficiary of all his assets after death.

In today’s world of expanded estate tax limits ($5,340,000 – 2014), a TAP™  trust is a catchall trust to address the need of clients who want to give completed gifts to third parties without necessarily having them be controlled by the beneficiary, but allows for it if desired.  The primary purpose of a TAP™ trust is to ensure all gifts made to the trust will be excluded from the grantor’s taxable estate.  In the absence of being concerned with estate tax, an irrevocable pure grantor trust (IPug™) should be used.

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center

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Separating IPug(tm) Trusts From “Traditional” Irrevocable Trusts & RLT’s

by with No Comment Asset ProtectionEstate Planning Drafting SoftwareLegal Marketing

One of the main sources of confusion for clients, their families, our business synergy partners, and even other lawyers, is how the iPug™ trust differs from "traditional" irrevocable and revocable trusts.  In order to help clients make the best decision about what is right for them, we need to educate.  However, in a busy law practice, it is sometimes impractical, maybe even impossible, to fully educate everyone, especially if there are adult children or other busy professionals involved.

Bigstock-Podcast-2624126Lawyers With Purpose Member, Nicole Whipp, is a practicing attorney in Southeast Michigan.  Her firm, Family & Aging Law Center, has three offices that serve five counties in the metropolitan Detroit area. Nicole is a self-proclaimed "serial entrepreneur" and passionate marketer, and is always working to use her marketing to educate about the benefits of elder-centric estate planning. She has created Smart Planning 101 (content is not confined to state-specific law).  It covers topics that generally affect what "older Americans" and their families may face. 

She has created a resource for you that will boost your efforts in educating others about the benefits of iPug trusts (especially if someone says, "Where can I go to find out more about this?"). Recently, Nicole Wipp interviewed Dave Zumpano on her podcast, "Smart Planning 101."  In the course of two episodes, Dave thoroughly explains the fundamental differences between the various types of trusts and how the iPug fits into a complete estate plan.  Even better, he does it using easy-to-understand language.  

The interview and explanation is geared toward the layperson, but that doesn't mean it isn't beneficial to a lawyer. Whether you choose to have clients listen to it on their own time, or you use it to gain insights into how to convey the message in a way that is easy to understand, Dave is there – and even better, on demand!

A note from member Nicole Wipp:

“One of the main benefits of belonging to an organization such as Lawyers With Purpose is that it helps you, the attorney, differentiate yourself in what is becoming an increasingly commoditized market. (Online estate plans, anyone?)  There's no question that a majority of the work we do is highly specialized, yet the public generally still doesn't understand the real benefits of working with an elder law attorney that can help them navigate the maze of federal, state, and administrative law and procedures that can and will affect them.  These podcast episodes with Dave will help illustrate the real difference of what you can provide.”

Nicole C. Wipp, Attorney & Counselor at Law - Family & Aging Law Center PLLC 

 

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Live Webinar TOMORROW On The Recent Supreme Court Decision

by with No Comment Asset ProtectionEstate Planning Drafting SoftwareLegal TechnicalMedicaid

As many of you learned at our last Member Tri-Annual Retreat the U.S. Supreme Court in Clark v. Rameker ruled that inherited IRAs are not "retirement accounts" for purposes of protection from creditors and predators.  While this shocked many in the industry, it has been the position we have held and trained all of our Lawyers With Purpose Members for the last ten years! 

So what does this mean to us as practitioners? 

Bigstock-Brown-Gavel-46632817Actually, it validates our planning strategy and creates an incredible marketing opportunity for us to go back to our clients and those clients of other attorneys who have not been kept abreast of this very important topic.  It's also a wake-up call to those of you in LWP who do not stay as "active" as capable to stay aware of these things which we regularly talk about on the Live ListServ, and at our Member Tri-Annual Retreat. The good news is, Lawyers With Purpose is swift and the first national organization addressing it – and we will be TOMORROW. 

On Tuesday, June 24th at 12:00 p.m. Eastern Standard Time I will be hosting a live Lunch & Learn for all of our LWP members, all of my financial professionals, and the general estate planning industry at large.  In this one‑hour program you will get:

  • An understanding of the key holdings of the recent Supreme Court decision.
  • Learn the asset protection strategies available for inherited IRAs.
  • Know the four requirements for trusts to qualify to own IRAs without causing taxation.
  • Discover the "inside" and "outside" planning strategies we have used for years to protect inherited IRAs and provide clients with the maximum number of options at death to avoid the loss of an IRA to creditors and long-term care costs.

Also of relevance to LWP members, the complete marketing package that I have created to roll out to my local referral sources will be available and posted to the member ListServ and be posted on the member web site.  This packet will include:

  • E‑blast to send to your referral sources
  • The Power Point presentation to deliver to your advisors
  • The recording of the live presentation to see how I presented it  
  • A complete evaluation that will be a call to act to those in attendance of the program. 

As a side note, at the last Member Tri-Annual Retreat I lead an entire focus session reviewing all the reasons for naming the trust the beneficiary of IRAs.  What was amazing was I indicated in that program, that we were expecting a decision from the U.S. Supreme Court "any day."  Little did we know it would be the very next day.  The powerful parts for those "in the room" is that they are now properly prepared and ready to address this issue and they have a full understanding of the "inside" and "outside" strategies utilizing trusts for IRA protection.  

Please join me for tomorrow's Live Presentation by registering using the link below:
 

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center

iPugs vs. LLCs

by with No Comment Asset ProtectionEstate Planning Drafting Software

IPugs, or irrevocable pure grantor trusts, are trusts offered within the Lawyers With Purpose – Client Centered Software (LWP-CCS).  While many attorneys think they are just for Medicaid planning purposes, iPugs can most definately be used for business owners too.

Using iPugs instead of an LLC or Corporation can give a business client greater flexibility, more privacy, and allows you to serve your clients in a whole new way.  Watch the below video and learn more about iPugs in business settings.  See a case study of an actual client, and discover how you could use iPugs with your business clients.

 

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center

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Making Medicaid Qualification Easy – A Quick 10 Minute Demonstration

by with No Comment Asset ProtectionEstate Planning Drafting SoftwareLegal TechnicalMedicaidSystems & Processes

With the proliferation of those online will factories, some believe traditional estate planning is dead.  But that is not the experience of Lawyers With Purpose members.  With nursing home costs rising more and more out of reach of most people, clients are looking for ways to protect what they have scraped and saved and worked so hard to build. 

Bigstock-Play-button-53748670And those clients are turning to Lawyers With Purpose attorneys to help them do it.  Lawyers With Purpose can help you quickly get up to speed to effectively and competently work with your clients in the Medicaid area.  We provide our members many tools to help them do that.  One of those tools is the Medicaid Qualification Worksheet.  The Medicaid Qualification Worksheet can help you immediately determine whether or not a client is currently qualified for Medicaid if they go into a nursing home, what you might need to do to help them get qualified if they are not already, and show them that they may not have to wait five years after they do planning with you before they could qualify for the benefit. 

You will never forget the feeling you get as you watch the wave of relief that washes over the face of the first client you are able to tell that to!  Watch this video to see how the worksheet works.

If your interested in learning more about this and other ways Lawyers With Purpose can help enhanse your estate planning practice, join us at our Practice With Purpose Program in June.  If your at all interested click the link and register today!  The hotel is close to selling out and seats are filling quickly!

 

Aaron Miller, Legal/Technical Trainer – Lawyers With Purpose.