Feb 21, 2018 | Estate Planning |
Financial Power of Attorney documents have long been used in estate planning to allow a person to appoint a fiduciary to manage that person’s financial affairs. They are often used both in situations where the person granting the power of attorney (the principal) is unable to manage financial affairs any longer or where the principal has the capacity to do so but prefers another to handle those matters. On January 1st, 2018 North Carolina enacted the Uniform Power of Attorney Act, which is codified in the new Chapter 32C of the North Carolina General Statutes. This marks a significant change in the laws concerning Financial Power of Attorney documents in this state and is modeled after the Uniform Power of Attorney Act, which has been enacted in a number of states. The first significant change is now all Financial Power of Attorney documents have automatic durability. Durability means that the power of the agent acting on behalf of the principal will remain even after the incapacity of the principal. Before this change a power of attorney had to specifically mention durability or the power of attorney would become invalid after the incapacity of the principal. Terminology has also changed in the new statutes. Formerly the person acting on behalf of the principal was referred to as the “attorney-in-fact” and they are now referred to as “agent.” This clears up some confusion about the use of the term “attorney-in-fact” because many people believed that it meant that the person was actually the attorney for the principal. The term “incapacity” replaces references to “disability” in the old statute, to clarify that...
Feb 14, 2018 | Estate Planning |
By Ryan McNeill, Attorney at Law Have you planned for what might happen if you were to require long term care? According to the US Department of Health and Human Services, 70% of those currently 65 years old will need some form of long term care in their lifetimes. Medicare has limits on long term care coverage, and long term care insurance can be pricey and may only cover certain expenses. Most Americans have not saved enough money to cover the costs of long term care out of pocket. In such cases, many requiring long term care will need to apply for assistance through Medicaid. What is Medicaid? Medicaid is a state and federal partnership providing medical assistance to those with low income, the elderly, pregnant women, children, and disabled individuals. The program is run by each individual state, so rules may differ. 3 Pitfalls to Avoid When Applying for Medicaid #1) You Must Understand Program Differences There are differences in the qualification requirements and the impact of real estate ownership, depending on the level of care an individual needs (assisted living vs. skilled nursing care vs. all-inclusive care for the elderly). There are also huge differences in how states treat spousal assets, depending on the level of care required. By identifying program levels and requirements for your state in advance, you can take steps to protect resources in a much more comprehensive way than if an application is filed directly through a busy caseworker. He or she will generally tell you only what the qualification steps and/or requirements are based on what you are applying for. Additionally, many...
Jan 12, 2018 | Estate Planning |
The updated 2018 tax bill signed into law in December has many people worried about how the changes will impact them. Among a host of changes, the bill increases the standard deduction, expands the Child Tax Credit, removes the “marriage penalty” for most individuals, limits the deduction for state and local taxes, and changes the rules on deducting mortgage interest, charitable donations, and medical expenses. The new tax bill also lowers tax rates for most corporations and for many individuals, and changes how pass-through income earned by owners of sole proprietorships, LLCs, and S corporations, is handled (different limits apply to professional services business owners). In terms of estate planning, the estate tax in 2017 was set at $5.6 million (lifetime limit) for individuals and $11.2 million for married couples; under the new tax law, this has doubled to $11.2 for individuals and $22.4 million for married couples. A much smaller number of people will now pay estate tax on money and assets they inherit. By contrast, those high wealth individuals and couples may wish to pursue aggressive planning opportunities by making tax-free gifts to heirs now in the event the law ever sunsets in the future. If you had previously structured your estate plans to minimize taxes paid by your heirs due to estate tax, now would be a good time to sit down with your estate planning attorney and review your plans. It may be possible to adjust or eliminate counterproductive measures included in your old estate plan based on the new tax laws. For example, a typical estate plan for a married couple whose estate exceeded...
Nov 5, 2017 | Estate Planning |
As children approach adulthood, parents may have many different reactions, from stress about paying for college, to excitement for their child’s new adventure, to a plan to buy a smaller house once junior moves out. For parents of children with special needs, the legal transition from child to adult often adds a layer of complexity and worry to the equation. When a child turns 18, he or she legally becomes an adult (or emancipated) in the eyes of law. At that point, you, as a parent, lose your legal rights to make decisions for your child. You no longer have the right to your child’s medical records; you cannot see school grades without permission from your child; your child may now sign contracts for which he/she is legally responsible; and there are tax ramifications in giving money to an adult child for their support. If you have a child with special needs who will continue to need your support after reaching adulthood, it is critical you plan ahead to ensure you do not encounter problems. We recommend starting the process six to 12 months prior to your child reaching adulthood. The severity of your child’s impairment will dictate the actions you may need to take. It is also important to consider how your actions will impact your adult child’s eligibility for public assistance. Here are some options available to you: A power of attorney is the simplest option available to allow you to continue to make financial decisions on behalf of your child. If your child does not have a significant cognitive impairment and is fully able to understand...
Oct 11, 2017 | Estate Planning |
In recognition of National Estate Planning Awareness Week (October 16-22), we are sharing 5 myths we frequently hear about estate planning. These myths often prevent people from taking action to protect their assets and ensure their loved ones receive the benefits of careful stewardship. Which of these myths do you believe? Myth #1: I only need an estate plan if I am rich. Truth: Almost everyone can benefit from estate planning. Estate planning allows you to determine how your estate is managed during your lifetime and how it is distributed upon your death. It also allows you to decide who manages those things for you. When you meet with an estate planning attorney, some of the things you may discuss include: Guardians for your minor children or an adult child (or parent) with special needs. Concerns about your assets or beneficiaries. An appropriate executor for your estate. Advance directives and healthcare power of attorney: These documents take estate planning a step further by allowing you to designate someone to represent you and carry out your wishes regarding health treatment should you be unable to make those decisions. Ownership of any businesses and how those will be handled upon your death. Is there a succession plan in place? Questions you may have about your online presence after you are gone. Whether a trust makes sense. Even if you are young and still have limited assets, estate planning is a good idea to make sure things are handled the way you want them to be. Myth #2: I should start with my estate planning in my 50’s or 60’s when I...
Aug 31, 2017 | Estate Planning |
Scaling back your household belongings can be a challenge. It can also be freeing. Check out the third video in the Decision Time series on how to approach downsizing or rightsizing. Attorneys David Inabinett and Ryan McNeill are...
