Michigan Estate Planning Lawyer Blog

In a recent PLR ruling from the IRS (PLR 201008049), the IRS ruled that the stepdaughter of a murder victim would not be penalized for failing to make minimum required distributions from the murder victim's IRA during the criminal and estate proceedings. You can read more at Wealth Strategies Journal

Michael Witzke was recently named a Metro Detroit "Top Lawyer" in DBusiness Magazine, which is great. As his law partner, I'm very happy for him and look to win that honor in the near future. However, I too was just recently in DBusiness magazine as well. My photo, along with my wife, was in DBusiness magazine for the VIP grand opening of a new Bagger Dave's restaurant in Novi, Michigan. I think in the grand scheme of things, I win!

You can read the article and see the pictures here: Bagger Dave's Grand Opening.

-Christopher J. Berry

A new law suit in Missouri has been started against LegalZoom, those creators of do-it-yourself estate planning documents. The lawsuit claims that LegalZoom is engaged in the unauthorized practice of law and sites a cease-and-desist letter from the North Carolina State Bar's Unauthorized Practice Committee. You can read a short article about the suit at Suit Claims LegalZoom's Document Prep is Unauthorized Practice.

Bloomfield Hills, Michigan Elder Law Attorney Christopher J. Berry Accredited by Veterans' Administration

I have been and now again have been re-welcomed by The Department of Veterans Affairs in Washington, D.C.  as an accredited attorney for the preparation, presentation, and prosecution of claims for veterans' benefits before the Department of Veterans Affairs (VA).

The accreditation allows me to assist Michigan Veterans with representation of their Veterans Administration claims.

I am honored to be one of the few Metro-Detroit elder law attorneys accredited with the Department of Veteran Affairs.

If you listen to the news and talking heads you would think that with our 2010 "repealed" estate tax, everything is wonderful for those who want a low overall tax burden. Well, that might not be the case. Take a look at this Wall Street Journal article entitled "Why No Estate Tax Could Be a Killer."

The article points at that while there is no estate tax to speak of, under current law, in 2010, there is a change in how the capital-gans tax rules are handled.  According to the article, estates with assets between $1.3 and $4.3 million would have been better off under last years estate tax rules, while bigger estates will have more of a tax savings this year.

Where do we go from here?  Who knows.  We all thought that the $3.5 million exemption amount we had last year would have been frozen and carried forward.  However, our government took no action.  The later we get into 2010, the more that I think we will look at the estate tax exemption coming back at $1 million per the current law for 2011 and beyond.

Either way, it is important that your estate plan be reviewed to make sure that the Federal Tax planning strategies that were used are still sufficient.

The Elder Law Prof Blog has an interesting little post dealing with the Hong Kong Billionaire, Nina Wang's estate. Apparently, Ms. Wang who was known as "Little Sweeite" had a will drawn up in 2002 leaving her estate to a charity. A Judge just ruled that a "feng shui will" from 2006 would be invalidated due to Ms. Wang's signature being forged. You can read the post here: Feng Shui Master won't Inherit Eccentric Billionaire's Estate.

Here are 10 Reasons to Create your Michigan Estate Plan right now.

Many people think that estate plans are for someone else, not them. They may rationalize that they are too young or don't have enough money to reap the tax benefits of a plan. But as the following list makes clear, estate planning is for everyone, regardless of age or net worth.

1. Loss of capacity. What if you become incompetent and unable to manage your own affairs? Without a plan the courts will select the person to manage your affairs. With a plan, you pick that person (through a power of attorney).

2. Minor children. Who will raise your children if you die? Without a plan, a court will make that decision. With a plan, you are able to nominate the guardian of your choice.

3. Dying without a will. Who will inherit your assets? Without a plan, your assets pass to your heirs according to your state's laws of intestacy (dying without a will). Your family members (and perhaps not the ones you would choose) will receive your assets without benefit of your direction or of trust protection. With a plan, you decide who gets your assets, and when and how they receive them.

4. Blended families. What if your family is the result of multiple marriages? Without a plan, children from different marriages may not be treated as you would wish. With a plan, you determine what goes to your current spouse and to the children from a prior marriage or marriages.

5. Children with special needs. Without a plan, a child with special needs risks being disqualified from receiving Medicaid or SSI benefits, and may have to use his or her inheritance to pay for care. With a plan, you can set up a Supplemental Needs Trust that will allow the child to remain eligible for government benefits while using the trust assets to pay for non-covered expenses.

6. Keeping assets in the family. Would you prefer that your assets stay in your own family? Without a plan, your child's spouse may wind up with your money if your child passes away prematurely. If your child divorces his or her current spouse, half of your assets could go to the spouse. With a plan, you can set up a trust that ensures that your assets will stay in your family and, for example, pass to your grandchildren.

7. Financial security. Will your spouse and children be able to survive financially? Without a plan and the income replacement provided by life insurance, your family may be unable to maintain its current living standard. With a plan, life insurance can mean that your family will enjoy financial security.

8. Retirement accounts. Do you have an IRA or similar retirement account? Without a plan, your designated beneficiary for the retirement account funds may not reflect your current wishes and may result in burdensome tax consequences for your heirs (although the rules regarding the designation of a beneficiary have been eased considerably). With a plan, you can choose the optimal beneficiary.

9. Business ownership. Do you own a business? Without a plan, you don't name a successor, thus risking that your family could lose control of the business. With a plan, you choose who will own and control the business after you are gone.

10. Avoiding probate. Without a plan, your estate may be subject to delays and excess fees (depending on the state), and your assets will be a matter of public record. With a plan, you can structure things so that probate can be avoided entirely.

There are quite a few acronyms in estate planning and special needs planning. Long Island Special Needs Planning Lawyer Ellen A. Victor has a great post on the differences between Social Secuirty Disability Income (SSDI) and Supplemental Security Income. You can read her post here: The Difference Between SSI and SSDI is More than Just a Letter.

Well, it looks like there are more problems with using LegalZoom, according to Texas attorney Rania Combs. If you remember she had a great post about LegalZoom on her blog entitled The Problem with LegalZoom(And Other Do-It-Yourself Estate Planning Solutions). Well, apparently, LegalZoom was also paying attention. They corrected a few of the problems as it relates to Texas law in their documents.

In her new post entitled The Problem With LegalZoom (Part 2)- Inaccuracies Corrected But Problem Remains, she points on the biggest inherent problem with using LegalZoom, or any other Do-it-yourself approach to estate planning.  Look at the disclaimer.  Attorney Combs analyzes the LegalZoom disclaimer in great detail.

Some of the troubling language includes "the legal information on LegalZoom's website is not guaranteed to be correct or up-to-date" and "LegalZoom does not review your answers for legal sufficiency..".  Yikes!  

Attorney Combs ends her post with the conclusion that LegalZoom and all of the do-it-yourself options are a risky approach to completing your estate plan.  As a Michigan estate planning attorney, I concur.

Over at a new blog we've put together I have a post entitled "What is Michigan Elder Law?". Feel free to hop over there and take a look.

National Health Care Decisions days is just around the corner. April 16th, 2010 will be the third anniversary of National Health Care Decisions day which helps increase awareness of advanced health care planning and educating Americans about the importance of making health care decisions.

As a Michigan elder law attorney and member of the National Academy of Elder Law Attorneys, I want to help spread the word. If you have any questions about National Health Care Decisions day, please contact me or visit the website: NHDD.

In the month of February we celebrate Presidents Day in honor of two great United States Presidents; George Washington and Abraham Lincoln. Both were heroes of wars fought on U.S soil for freedom and unity of our great country.

The United States has fought many wars throughout the world since that time to keep freedom here at home and continues to do so. From the beginning our country has established a program to care for the men and women of our military who fought in those wars.

The veterans assistance program goes back to 1636 when Pilgrims of Plymouth Colony fought with the Pequot Indians. The Pilgrims enacted a law from English law that reads, "If any man shall be sent forth as a soldier and shall return maimed, he shall be maintained competently by the colony during his life." In 1789 U. S. congress passed as law that pensions were to be provided to disabled veterans and their dependents and in 1811 the first domiciliary and medical facility for veterans was completed.

Since that time the Department of Veterans Affairs has opened a multitude of care facilities nationwide. An article from the US Department of Veterans Affairs website states:

"VA's health care system has grown from 54 hospitals in 1930 to 157 medical centers in 2005, with at least one in each state, Puerto Rico and the District of Columbia . More than 5.3 million people received care in VA health care facilities in 2005, a 29 percent increase over the 4.1 million treated just four years earlier.
VA operates more than 1,300 sites of care including nearly 900 ambulatory care and community-based outpatient clinics, 136 nursing homes, 43 residential rehabilitation treatment programs, nearly 90 comprehensive home-care programs, and more than 200 Veterans Centers."

State veterans homes have been built or are approved for future construction in many states. For a list of state veteran nursing homes go to http://www.longtermcarelink.net/ref_state_veterans_va_nursing_homes.htm#List

Here are some of the benefits provided for Veterans by the Department of Veterans Affairs:

* Health Care Clinics
* Mental Health
* Counseling
* Job training
* Burial and Memorial benefits
* Education
* VA Home Loan
* DIC
* Compensation
* Pension
* Care Management
* Home Renovation for Disability
* Assisted Living
* Prosthetics
* Rehabilitation
* Weight management
* Nursing Homes
* Prescriptions
* Hospitals
and much more

Thomas Day, founder and Director of the National Care Planning Council, has a deep gratitude for the services provided by the VA. He served as an Air Force pilot during Vietnam. Later he developed a crippling auto-immune disease. It was the doctors at the George A Wahlen VA Regional Medical Center who prescribed a new treatment that saved his life. Many of the VA programs continue to improve his life.

Tom is passionate about the Aid & Attendance Pension Benefit and the relief it brings to veterans and their families who need care services and ways to pay for it in their elder years.

"Aid and attendance" is a commonly used term for a little-known veterans' disability income. The official title of this benefit is "Pension." The reason for using "aid and attendance" to refer to Pension is that many veterans or their single surviving spouses can become eligible if they have a regular need for the aid and attendance of a caregiver or if they are housebound. Evidence of this need for care must be certified by VA as a "rating." With a rating, certain veterans or their surviving spouses can now qualify for Pension. Pension is also available to low income veteran households without a rating, but it is a lesser dollar amount.

Pension is an underused benefit.

There are different income categories for Pension, but the highest could pay as much as $1,949 a month in disability income to a qualifying veteran household. A study commissioned by VA in 2001 estimated, over the next 14 years, only about 30% of eligible veterans would apply for Pension. This is likely due to the fact that most veterans simply don't know about it. In fact, about a third of all seniors in this country, age 65 and older, could become eligible for pension under the right circumstances. That's how many elderly war veterans or their surviving spouses there are.

To receive Pension, a veteran must have served on active duty, at least 90 days, with at least one of those days during a period of war. There must be a discharge under conditions other than dishonorable. Single surviving spouses of such veterans are also eligible. If younger than 65, the veteran must be totally disabled. If age 65 and older, there is no requirement for disability. There is no age or disability requirement for a single surviving spouse.

There are income requirements, but a special provision does allow household income to be reduced by 12 months worth of future, recurring medical expenses. Normally, income is only reduced by medical expenses incurred in the month of application. These allowable, annualized medical expenses are such things as insurance premiums, ongoing prescription drug costs, out-of-pocket cost of monthly medical equipment rental, the cost of home care, the cost of paying adult children to provide care, the cost of adult day services, the cost of assisted living and the cost of a nursing home facility. These are all considered medical costs and they can be deducted from income to receive this benefit.

According to Mr. Day,

"I talk to a number of people every day who are inquiring about this benefit. In many cases they don't know that the benefit can pay members of the family to take care of the veteran, the veteran couple or the surviving spouse at home. I have literally had people who are sacrificing dearly to take care of their loved ones at home, break down and cry when they find they can receive some money from the government for that sacrifice."

Thomas Day has written two books for the National Care Planning Council to educate and help veterans obtain this long term care benefit. The first, "How to apply for the Aid & Attendance Pension Benefit" is to educate the public what the benefit is and how to get it. The claims process for pension is described and information is provided to help understand what documentation is necessary to provide evidence of recurring medical expenses. All forms necessary for filing a claim are included in the form support section of the book. Here is a link to the book. http://www.longtermcarelink.net/a16Veterans_standard_book.htm

Although this is a do-it-yourself book, Tom recommends if you have excessive assets and income or are not sure how to apply medical deductions, use the services of a qualified consultant.

The second book, "Aid & Attendance Handbook for Professionals & Consultants," is for the professional consultant. It is 782 pages of rules, forms, instruction on the submission process and Medicaid planning strategies as well as software for calculating income, benefit and medical expenses. Here is a link to that book. http://www.veteranbook.com

The secret for receiving a successful award for aid and attendance or housebound ratings is not in filling out the form but in knowing what documents and evidence must be submitted with the application. Knowing the secrets for a successful award -- with the special case of long term care recipients -- is 95% of the battle. Even though the form is challenging, filling out and filing a claim is a formality.

A knowledgeable consultant can provide information to shorten VA's decision window of 6 to 12 months to possibly 3 or 4 months. The consultant also understands how to maximize the benefit or avoid a denial. The consultant can also provide guidance for meeting the asset test. Finally, the consultant can provide the actual strategies for reallocating assets and he or she can arrange for trusts or income conversions to allow for the best possible accommodation of assets for beneficiaries thus avoiding or reducing taxes, family disputes and Medicaid penalties.

"I would like to see every eligible veteran obtain the Aid & Attendance Pension Benefit for their long term care needs." Thomas Day, Director, National Care Planning Council.

As a Michigan trust attorney, I've blogged many times about the issues using Legalzoom, Suze Orman Trust Kit, Willmaker, or any number of the other "do it yourself" estate planning kits. Texas estate attorney Rania Combs has put together a great blog post on the topic that you should read.

You can read the post here: The Problem with Legalzoom and Other Do-It-Yourself Estate Planning Solutions.

Last Friday in Lansing, Michigan I attended an asset protection seminar that included planning for physicians. The presentation was part of the Michigan WealthCounsel forum which is organizing some of the top Michigan estate planning lawyers.

California asset protection attorney Jeff Matsen, Esq., was the key note speaker for the event. We covered keys that every Michigan business owner, professional, doctor, dentist and real estate investor need to know about asset protection.

We were instructed on a modular approach to protect wealth through a series of trusts and business structures. Through the training our Michigan asset protection law firm can help clients preserve and protect their business and personal assets through a sophisticated process of perfectly legal Michigan asset protection planning.

With Michigan Estate Planning, there are a few basic things that you need to know.

First, no matter what your net worth is, how much in assets you have, how much debt you have, you need an estate plan. In Michigan, once you turn 18 you are legally an adult. So, even if you're a college age adult who lives at home with your parents, there is a certain level of estate planning that should be done. That is you need, what our office calls, a disability plan. A disability plan plans for your disability or incapacity.  We would put together a Patient Advocate Designation (which is the Michigan equivalent to a health care power of attorney), HIPAA Authorization, and a Financial Power of Attorney that most likely would name your parents as decision makers and agents.

Now that we've established that if you're over the age of 18, you need the disability documents, the next step would be once you have assets (now matter how meager) or children, it is important to plan for your assets and children.  This is done through using Revocable Living Trusts and Last Wills and Testaments.  Whether you opt for a Living Trust based estate plan or a Will based estate plan will depend on your goals.  Remember a Last Will and Testament only gives instructions to the Michigan Probate court on how to administer your estate, it does not avoid probate.

Lastly, it is important to consult a Michigan estate planning attorney in preparing your estate plan.  Proper Michigan estate planning involves more than buying Nolo Willmaker software or reading the latest Suze Orman Trust Kit book.  It involves analyzing your goals and situation and using the estate planning tools we've discussed in the most effective and cost effective way.