Compare the Old Trust vs. the Modern Trust:   Old Trust = Probate Avoidance + Estate Tax Savings   Modern Trust = Probate Avoidance + Estate Tax Savings + Asset Protection!     Dear Clients, Friends and Colleagues: Old Trusts Many of you have prudently chosen to create a revocable living trust during your lifetime.  Please recall that the motivations for creating trusts were primarily: 1.         Avoidance of estate tax; and 2.         Avoidance of probate. These objectives for your trust, while still valid, may not be a primary concern any longer for the following reasons: First, estate taxes no longer impact the majority of most Americans because as of this writing there is no federal estate tax in 2010.  But in 2011 the estate tax will return with a tax free exemption amount of $1 million.  At the time your trust was created, the estate tax exemption could have been as low as $600,000.  Thus, the need for “A/B trusts,” as they were called, to minimize estate taxes may no longer be necessary for most Americans.  Thus, a simpler, less complex trust may be available to you. Second, probate can be easily avoided with upgraded trusts that I will discuss below.  Also, many of our clients have the bulk of their retirement assets held in accounts such as IRAs and 401(k)s, which, if handled properly, avoid probate by themselves. Modern Trusts Can Provide for Asset Protection from New Challenges   You should consider upgrading you revocable living trust and creating a more modern asset protection type trust.  The reasons for using an asset protection type trust are due to new challenges and the needs that have emerged over time:

1. To  protect your assets from a spend down due to the costs of your long-term care;

 

1.  To protect your trust assets from the creditors, predators and divorcing spouses of your  children after you die; and

    3.       To do the ROTH IRA Conversions with the modern IRA trust protection planning. Modern Trusts Can Provide for New Income Tax Basis Requirements From a tax standpoint,  the good news is that for the year 2010, as of this writing, there is no federal estate tax; the bad news is that there is no “step-up” in income tax basis for decedent’s dying in 2010.  There are however  certain limited  basis adjustments allowable, but wills and trusts must contain certain provisions to allow an executor to take advantage of these allowable adjustments which could result in  income tax savings.  You should at least review your plan to be sure that your priorities (i.e. asset protection or tax savings, etc.) are reflected in it. Modern Trusts Can Provide for Compliance with the NEW ILLINOIS ESTATE TAX Requirements Also, while the federal estate tax is eliminated for the year 2010, the Illinois estate tax exemption is capped at $2 million.  This is sometimes referred to as Illinois estate tax “decoupling”. Illinois has joined 11 other states in enacting a state-qualified terminable interest property (QTIP) election, which is different from the federal QTIP election of I.R.C. Section 2044. Now, a well drafted estate plan allows a married couple to leverage the estate tax exemption at both the federal level and the state level.  We can demonstrate this for you with a simple illustration in my office. The Illinois QTIP election will require that  estate documents only fund the non-marital trust with the lesser of the federal or state exemption, with the balance passing to 2 QTIP-type marital trusts. Thus, while the new Illinois law provides options for dealing with Illinois estate tax decoupling, the QTIP legislation still mandates the need to review and possibly change the funding clause in your current estate planning documents. Conclusion As long-term care planning attorneys, we are experienced with matters of elder law, estate planning, estate tax planning, and asset protection planning, as well as with disability, Public Benefits and Veterans Benefits planning.  We can convert your revocable living trust into  one or more trusts that protect your assets from the new challenges and new legal requirements described above.   It is important that you note that this more modern planning involves trusts and trust asset funding that adds increased value to what you may have done previously to avoid probate and reduce federal income and estate taxes.  Contact us at 847-292-1220 ask for Lori or Lisa to set up a consultation appointment for a review of your trusts or to discuss how creating trusts may benefit you and your family.  P.S.      Also, don’t miss our new workshop: “Don’t Go Broke in a Nursing Home”. Long Term Care Planning Attorneys The “3 Phase” Lawyers   Legal Counsel Assisting You in the 3 Phases of Your Life:   –           Maturing Years – Will, Trust, Taxes, and Asset Protection –           Senior Years – Long Term Care: Pre-Planning and Crisis Planning –           Post Death Years – Estate, Probate, and Trust Administration     “Educate to Motivate”   Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764 Rosemont, IL 60018 PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com Email:  abferraro@abferrarolaw.com NOTE: The information contained in this message is confidential and may be protected by the attorney-client privilege and/or the work product doctrine.  If you have received this electronic message in error, please reply to the sender and destroy this message. Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service.   The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material.  If the context requires, please consider this letter and the enclosed literature to be Advertising Materials. To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice.  You should never attempt Medicaid planning, Estate Planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.  

Preface:   For F/A’s & CPA’s: Our recent workshop for F/A’s and CPA’s was very well received so we are scheduling another on November 5, 2009 at 4:00 PM.  Call for reservations at 847-292-1220 For the Public:  Don’t miss our new free public workshop: “Don’t Go Broke in a Nursing Home”, on October 27, 2009 at 11:00 AM and 6:30 PM.  Call for reservations at 847-292-1220 1.         Long-Term Care as a Political Football!  For those of you who have been following the national debate on health care, let’s not lose sight of the piece dealing with long-term care.  A provision was submitted to the House and Senate that would establish a new national long-term care insurance program that would offer just basic help to the elderly and disabled.  It appears now that effort is now under attack.  According to policy observers, the provision has a long way to go.  The provision created a voluntary federal long-term care insurance program.  Those who elected to participate would pay a premium of about $65 a month.  The provision indicated that if they had paid for at least 5 years they would be eligible for benefits of $50 or $100 per day depending on how much help they needed.  While this payout would be relatively modest compared to the average cost of nursing home care, which in our area could be anywhere from $175 to $230 a day, it could be viewed as some additional help to the elderly and disabled that would allow them to stay at home longer.  The insurance industry argues that the benefit called “Class Act” (Community Living Assisting Services and Supports) would provide only a modest benefit and would not adequately protect Americans who need nursing home care or 24 hour home health services.  The lobbyists also argue that this benefit might give consumers a false sense of security and further discourage sales of long-term care insurance that might provide more coverage.    Other industry analysts argue that by focusing on the extreme needs of long-term care that the insurance industry is missing the point.  Simply put they indicate what most Americans need is some assistance with things like getting up the stairs or bathing or dressing so that they can stay at home and not enter nursing homes or obtain the required full time care before its truly needed.  This proposed class act benefit can provide as much as up to $27,000 per year which could go a long way to meeting the needs for things like putting in ramps and railings and a few hours of help a day from a home health care provider. That $27,000 per year when combined with possible $26,000 a year that can be obtained for veterans through the aid an attendance program could be a nice way of keeping our clients at home longer so that they don’t end up in a skilled care nursing facility at $6,500 a month or more and instead can remain home with the assistance of the VA benefit and/or Class Act benefit.  Just something to think about.  Some of our clients will never qualify for long-term care insurance because they do not meet the medical standards.  So rather than housing people that have some needs in nursing homes a cheaper alternative might be to subsidize this Class Act provision and similar other benefits like VA benefits so that the overall cost of providing help at home will be less than long-term care in a skilled care facility.  2.         More Alzheimer’s.  A recent report indicates that more than 35 million people around the world are living with Alzheimer’s disease or other types of dementia.  The U.S. and other developed countries have been preparing themselves for an increase in Alzheimer’s cases.       3.         Taking Care of Mom and Dad Without Going Broke Yourself.    In addition to the overwhelming emotional and physical effort expended by children in caring for elderly parents, sometimes we ignore the significant amounts of money that children are spending to care for their parent.  Often this happens at an alarming rate so that adult children end up ignoring their own savings and retirement needs or even worse some go into debt caring for their elderly parents.  Some of the recommended ways in minimizing this risk is to make sure you check out the multitude of government and not-for-profit organizations geared to deliver services to the elderly throughout the country.  The most often cited reason is that many adult children feel that their parents have too much money to qualify for these governmental benefits that are already funded. Some parents are just too proud to ask for the help.  Therefore, the recommended approach in dealing with this issue is as follows:

1. Have “the talk” with mom and dad.
2. Make sure your parents have the basic fundamental estate planning documents in place which here in Illinois are the Illinois power of attorney for property (with carefully customized long-term care authorizations written into them by an experienced elder law attorney) and a durable power of attorney for health care. 
3. Some families consider hiring a geriatric care manager in order to analyze the needs and best solutions for in-home care for the parent.
4. Some families rely on hiring a consultant that is skilled in looking at assisted living facilities and nursing home that best suit the needs of the parents based on the accommodations of the parent’s financial position, medical situation, and family preferences with regard to geographical location and intangibles such as look, feel and grace associated with the facility. 

  To the extent that any of these plans are not yet taken contact our offices and we can direct you to qualified professionals that are skilled in the above areas. 4.         Reorganization of IRS.  Just for your information since its 2007 reorganization, the IRS estate tax division has been working with reduced staff.  However we understand that the estate tax division has received permission to recruit 12 new estate tax attorneys.  Stay tuned.   The estate tax maybe undergoing dramatic changes in the next year or two or yet again or it may remain at current levels.  Another Political Football! 5.         Estate Tax Changes are Coming.  The never ending saga the federal estate tax is becoming an exceedingly complex issue.  The number of discussions that are going on in the legal community and financial communities dealing with many possibilities including the potential return to the 2001 transfer tax rules on January 1, 2011.  This means that if nothing is done between now and then we will revert to a $1,000,000 estate tax exemption.  This year we are at a $3.5 million estate tax exemption.  What this means is that in this chaotic environment and the possibility of the return of hire estate taxes, fee based planners such as our firm who provides estate planning advice and long-term care planning strategies will inundated with work.  We’re already beginning to see that.  CPAs will have more returns to file.  The insurance industry will see a substantial increase in life insurance sales to fund estate taxes.  That is what is projected if we revert back to the $1,000,000 estate tax level.  Stay tuned. 6.         How do you keep Mom and Dad safe at home?  If you have an aging parent still living at home how do you begin to make sure that your family member is safe and managing well in his or her home? There are numerous geriatric care managers who can do evaluations of homes and make recommendations on safety.  There are also home safety and medical alert companies that provide GPS based bracelets and pendants that can track the elderly if they have tendency to wander.  Be aware that neighbors, local church groups, senior centers and local state agencies are some places to look for assistance.  Also be aware that classified ads are filled with people looking for work as aides to the elderly.  CAUTION:  If you do look to hire someone individually rather than through a licensed bonded and insured agency, you need to check references and qualifications, you need to make sure your withholding payroll taxes and providing insurance including workman’s compensation insurance in case that person is injured on the job.  Once you add of these factors up it may be easier to go with a home care agency who already has this handled by making the aid serving your loved one an employee of their agency.  Therefore, you should look into a professional home care service agencies.  7.         Do Long-Term Care Planning Now.  What we are unfortunately seeing too often in our practice is that people fail to plan and think about the issues of long-term care.  They wait until an emergency occurs and at that point the only option that is available is for care in a facility that is a skilled care facility.  By doing advanced planning more money can be legally protected and kept on the side, governmental benefits can be obtained Medicaid and VA benefits, and we can enable the elderly to remain in their homes for a longer period of times.  Yes, Medicaid is available to pay for nursing home care at the end of our lives, but every day we can stay at home with assets that are legally protected provides us with more options even when we might eventually migrate to a skilled care facility.  Our firm, everyday, helps families with loved ones who need nursing home care protect significant assets and still qualify for Medicaid.  Because our firm concentrates in asset protection for long-term care and estate planning we are able to provide and legally protect significant assets for our clients, who then have options to avoid the devastating expenses of long-term care.  Long Term Care Planning Attorneys The “3 Phase” Lawyers   Legal Counsel Assisting You in the 3 Phases of Your Life:   –           Maturing Years – Will, Trust, Taxes, and Asset Protection –           Senior Years – Long Term Care: Pre-Planning and Crisis Planning –           Post Death Years – Estate, Probate, and Trust Administration     “Educate to Motivate”   Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764  Rosemont, IL 60018 PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com Email:  abferraro@abferrarolaw.com NOTE: The information contained in this message is confidential and may be protected by the attorney-client privilege and/or the work product doctrine.  If you have received this electronic message in error, please reply to the sender and destroy this message. Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service.   The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material.  If the context requires, please consider this letter and the enclosed literature to be Advertising Materials. To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice.  You should never attempt Medicaid planning, Estate Planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.    

Consider Adding Protection to Your Revocable Living Trusts   Old Trusts vs. Modern Trusts Dear Client: Old Trusts Many of you have prudently chosen to create revocable living trusts during your lifetime.  Please recall that the motivations for creating these trusts were 2 primarily:

1. Avoidance of estate tax; and
2. Avoidance of probate.

  These objectives for your trust, while still valid, may not be a primary concern any longer for the following reasons: First, estate taxes no longer impact the majority of most Americans because the estate tax exemption is $3.5 million for 2009.  At the time your trust was created it could have been as low as $600,000.  Thus, the need for “AB trusts” as they were called, to minimize estate taxes may no longer necessary for most Americans.  Thus, a simpler, less complex trust may be available to you. Second, probate can be easily avoided with upgraded trusts that I will discuss below plus many of our clients have the bulk of their retirement assets held in retirement type accounts such as IRAs and 401(k)s which if handled properly avoids probate by themselves anyway. Modern Trusts Therefore, I would suggest to you that you should consider upgrading your revocable living trusts to a more modern assets protection trust.  The reasons for using an asset protection type trusts are due to new possible threats and the needs that have emerged over a period of time:

1. To protect your assets from a spend down due to long-term nursing home care;
2. To protect your assets from your creditors and predators;
3. Protection your trust assets from the creditors, predators and divorcing spouse’s of your adult children once you die;
4. To protect yourself from the “new” Illinois Estate Tax regimen; and
5. ROTH Conversions with IRA trust protection

  After a significant discussion and lobbying, Illinois has joined 11 other states in enacting a state-qualified terminable interest property (QTIP) election separate and distinct from the federal QTIP election of I.R.C. Section 2044.  After legislation authorizing state QTIP election was enacted, a properly drafted estate plan permits a married couple to leverage at both the federal level and the state level – that is, for federal estate tax purposes, the entire federal exemption is used by (1) a $2 million federal and state credit shelter trust and (2) a $1.5 million federal credit shelter trust that is, for Illinois estate tax purposes only, a QTIP marital trust that qualifies for the marital estate tax deduction.  The Illinois QTIP election still requires that the estate tax plan only fund the non-marital trust with the lesser of the federal and state exemption, with the excess passing to a QTIP-able marital trust (i.e. one that pays mandatory income and discretionary principal only to the surviving spouse and does not give the surviving spouse a general power of appointment).  Though it provides options for dealing with estate tax decoupling, the QTIP legislation does nothing to alleviate the need to review a formula or funding clause in an estate plan.  2010 will be a year for Roth IRA planning and taxpayer, including high income taxpayers, to convert traditional individual retirement accounts (“IRA”) into Roth IRAs.  2010 will be a popular year to convert to a Traditional IRA because barriers to conversion have been lifter.  Prior to 2010, there was an income limitation preventing taxpayers from converting to a Roth if their modified adjusted gross income exceeded $100,000.  Under the Tax Increase Prevention and Reconciliation Act of 2005 (“TIPRA”), aka PL 109-222 (May 17, 2006), the income limitation was removed beginning in 2010.  Additionally, if taxpayers believe income tax rates will increase, sooner may be better timing for conversions, since converting to a Roth incurs a current income tax liability. Upon a Roth conversion, the entire pretax balance of Traditional IRA (usually the entire IRA balance) will be subject to income tax.  Taxpayers converting in 2010 can split the income tax liability equally and report half in 2011 and the balance in 2012, with no income reportable in 2010.  If taxpayer’s think Congress will raise individual income tax rates in 2011 and 2012, taxpayers can elect to report all conversion income in 2010.  A Roth conversion raises asset protection issues, beneficiary designation issues and estate tax apportionment issues. When an individual moves funds from a qualified plan to an IRA, they leave the asset protection safe haven of an ERISA protected plan.  In some states the individual may still have creditor protection; however, in other states, the protection may be diminished.  However, the laws of many states are not clears as to the asset protection afforded when one rolls over from an ERISA plan to an IRA and subsequently to a Roth IRA The Preparation of proper beneficiary designations is critical to ensure separate shares and to maximize the opportunity for post-death stretch out. An IRA left outright to a beneficiary has limited asset protection in many jurisdictions whereas an IRA left in a properly drafted trust provides the beneficiary with additional asset protection. Generally, estate taxes should be apportioned away from Roth IRAs to allow the Roth IRA to continue to grow on an income tax-free basis. Make sure that a client’s durable power of attorney will provide the attorney-in-fact the right to make any and all tax elections including an election to recharacterize the Roth IRA.  Accordingly, both a client’s IRA trust and last will and testament should be modified to provide for the recharacterization decision.  Therefore, we as elder law attorneys experienced with matters of long-term care planning, estate planning, asset protection planning as well as disability, Medicaid and Veterans Benefits planning can convert your revocable living trust into a trust that protects your assets from the more recent threats described above.  Contact us at 847-292-1220 and for Lori or Lisa to set up a consultation appointment.  P.S.      Also, don’t miss our new workshop: “Don’t Go Broke in a Nursing Home”, on November 17, 2009 at 1:30 PM and 6:30 PM.  Long Term Care Planning Attorneys The “3 Phase” Lawyers   Legal Counsel Assisting You in the 3 Phases of Your Life:   –           Maturing Years – Will, Trust, Taxes, and Asset Protection –           Senior Years – Long Term Care: Pre-Planning and Crisis Planning –           Post Death Years – Estate, Probate, and Trust Administration     “Educate to Motivate”   Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764  Rosemont, IL 60018  PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com Email:  abferraro@abferrarolaw.com NOTE: The information contained in this message is confidential and may be protected by the attorney-client privilege and/or the work product doctrine.  If you have received this electronic message in error, please reply to the sender and destroy this message. Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service.   The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material.  If the context requires, please consider this letter and the enclosed literature to be Advertising Materials. To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice.  You should never attempt Medicaid planning, Estate Planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.  

IT’S ABOUT PROTECTING WHAT YOU HAVE–   NOT THE ECONOMY OR HEALTH CARE I am hoping to get your attention by paraphrasing a well-worn phrase—“It’s the economy, stupid”—often heard during the 1992 presidential election and since then. What I have taken from the ongoing debate about the economy and health care that is going on nationally is not what kind of insurance coverage Congress is going to make available to every American or what type of cost reductions in care costs can be obtained, but rather, that it’s all about what kind of protection can be afforded to you and me.  Yes, it’s all about protection. The good news is – at least they are talking about the economy and health care protection. The bad news is — there is nothing you or I can control about what Congress will do about the economy and health care protection. There is more good news, however, and that is that we can create our own type of protection. The Threats The three biggest threats to most Americans are the effects of:

1. Taxes;
2. Inflation; and
3. Long-Term Care.

  The Solutions Taxes are going to continue to go up and, therefore, careful tax planning in both the estate and income tax areas will be essential. Inflation is relatively tame right now, with the exception of two major areas:  health care costs, as I mentioned above, and the escalating costs of college.  Hopefully, whatever Congress does will help us contain the costs of health care.  With respect to college costs, taking advantage of tax incentives such as 529 plans can help reduce the effect of such costs somewhat. With regard to Long-Term Care, the most important thing that we can do to rein in the costs of Long-Term Care is to engage in preplanning.  Preplanning will deal with: 1) repositioning your estate plan and assets, and 2) looking to place the right kind of insurance or financial  product with your family in order to plan for Long-Term Care when there is still enough time to plan.  However, there are crisis situations where Long-Term Care Insurance or other insurance is not going to be available and, therefore, crisis planning is necessary, which requires more aggressive and creative solutions.  Please remember that, with regard to long-term care planning, the question is not what happens when you die, but rather the question is what happens if you don’t die and suffer a long period of disability. There is Hope With all of the fallout in the stock market and real estate markets, there is still an oasis of safety and protection that can be obtained by taking control of your long-term care matters. Don’t let the assets that took you a lifetime to accumulate be lost in a moment due to a health emergency. Remember, Medicare will cover acute care matters such as surgeries and hospitalizations, but Medicare will not cover long-term care for the effects of Dementia, Alzheimer’s, Parkinson’s and long-term debilitating diseases. To Do Contact us to set an appointment about what protective measures we can create for you in order to provide your family not only with as much financial security as possible, but also with the gift of peace of mind.  We invite you to bring your Financial Advisor and CPA with you.  To all that come in for an appointment, we will give a free copy of our new CD “Consumer’s Guide to the Basics of Long-Term Care Planning” and also our new booklet “Consumer’s Guide to Planning for Long-Term Care”.  P.S.      Also, don’t miss our free new workshops: 1) “Don’t Go Broke in a Nursing Home”, beginning this fall, and 2) “The Top 9 Stumbling Blocks for Financial Advisors, CPA’s and Lawyers to Know about Elder Law”.   Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764  Rosemont, IL 60018 PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com Email:  abferraro@abferrarolaw.com Long-Term Care Planning Attorneys The “3 Phase” Lawyers   Legal Counsel Assisting You in the 3 Phases of Your Life:   –           Maturing Years – Will, Trust, Taxes, and Asset Protection –           Senior Years – Long-Term Care and Nursing Home Protection –           Post Death Years – Estate, Probate, and Trust Administration     “Educate to Motivate”   NOTE: The information contained in this message is confidential and may be protected by the attorney-client privilege and/or the work product doctrine.  If you have received this electronic message in error, please reply to the sender and destroy this message. Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service.   The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material.  If the context requires, please consider this letter and the enclosed literature to be Advertising Materials. To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice.  You should never attempt Medicaid planning, Estate Planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.

ATTENTION VETERANS: Qualifying Veterans May Receive Up to $23,396 per year.    These dollar amounts reflect 2009 maximum Veterans Administration Pension rates for qualifying claimant with a spouse. The actual amount awarded may vary according to the claimant’s circumstances.  Widowed Spouses may receive up to $12,681 per year.  Veterans married to Veterans may receive up to $30,408 per year.  There may be additional benefits for dependent or disabled children.   “Secret Dollars”: VA Benefits for Long-Term Care Revealed One of the Veteran Administration’s best-kept secrets, which is an excellent potential source of funds for long-term care (either at home or in an assisted living facility) are veteran’s benefits for a non-service connected disability.  Most VA benefits and pensions are based on a disability which was incurred during a veteran’s wartime service.  There is another benefit, however – a pension program – available for individuals who are disabled due to the issues of old age, such as Alzheimer’s, Parkinson’s, multiple sclerosis, and other physical disabilities.  For those veterans and widows(ers) who are eligible, these benefits can be a blessing for the disabled individual who is not yet ready for a nursing home.  There is a specific portion of the pension program which is of particular importance.  This program is “Aid and Attendance” (A and A) and is available to a veteran who is not only disabled, but had the additional requirement of needing the aid and attendance of another person in order to avoid the hazards of his or her daily environment (in other words, someone needs to help you to prepare meals, to bathe, to dress and otherwise take care of yourself).  Under this program, a veteran can receive a maximum of $1,949.00 per month in benefits and a widow or widower can receive up to $1,056.00 as a maximum benefit for A and A for the year 2009.  The applicant must be determined to be “permanently and totally disabled”.  The applicant does not need to be helpless – he/she need only show that he/she is in need of aid and attendance on a regular basis.  Someone who is housebound or is in an assisted living facility and over the age of 65 is presumed by the Veterans Administration to be in need of aid and attendance.  This particular program has limitations related to the income and assets that are held by the applicant.  However, in computing the income of the applicant, certain items can be deducted.  Specifically, unreimbursed medical expenses (UMEs) paid by an individual may be used to reduce the applicant’s income.  Home attendants or aides are an allowable medical expense deduction, as long as that attendant is providing some medical or nursing services for the disabled person.  The cost of an assisted living facility, and even part or all of the cost of an independent living facility, can also be an allowable medical deduction to reduce your gross income to a much lower net countable income that may qualify you for veteran’s benefits.  Simplified Example: Bill Robert is a 66 year old veteran and, due to his health needs, has caregivers coming to his home for several hours each day.  His income is $1800/month and he is paying caregivers $3300/month.  Rather than deplete his saving of $45,000, he applies for a service pension through the VA.  The VA considers the $3500/month he is paying to his caregivers unreimbursed medical expenses and “subtracts” the amount from his income.  In other words, when calculating his pension, the VA considers income to be negative $1500.  He applies for benefits and is eligible for $1500/month to help him with his bills! To file a claim for this benefit, it is wise to seek the involvement of a trained veteran’s service officer.  A Veteran’s Service Officer is critical to the filing of an application with the local VA regional office.  It is also important to seek the guidance of an experienced elder law attorney who is familiar with estate planning, disability, Medicaid and veterans’ benefits.  An attorney skilled in elder law can provide a veteran and the veteran’s family with appropriate pre-filing consultations to determine the appropriate steps that must be taken to be able to determine if it would be right to apply for this VA benefit.  Next Step:  In our office what happens is the spouse or family of the Veteran requests information on the Aid and Attendance Pension benefit.  My paralegal, using a structured intake questionnaire, screens the prospect to determine if they are likely to be eligible for benefits without any legal planning.  If the family does not qualify for benefits due to having too many assets, we counsel our clients on options and strategies to qualify for the benefit.  P.S.      Also, don’t miss our new workshop: “Don’t Go Broke in a Nursing Home”, beginning this fall.  Long Term Care Planning Attorneys The “3 Phase” Lawyers   Legal Counsel Assisting You in the 3 Phases of Your Life:   –           Maturing Years – Will, Trust, Taxes, and Asset Protection –           Senior Years – Long Term Care and Nursing Home Protection –           Post Death Years – Estate, Probate, and Trust Administration     “Educate to Motivate”   Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764  Rosemont, IL 60018 PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com Email:  abferraro@abferrarolaw.com NOTE: The information contained in this message is confidential and may be protected by the attorney-client privilege and/or the work product doctrine.  If you have received this electronic message in error, please reply to the sender and destroy this message. Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service.   The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material.  If the context requires, please consider this letter and the enclosed literature to be Advertising Materials. To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice.  You should never attempt Medicaid planning, Estate Planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.  

Introduction:  We hope that our readership has had a pleasant, healthy and productive summer.  The firm endeavors to continue our educational outreach with our Elder Law Update series. We hope that you will enjoy this update as it focuses on issues that are relevant in the ongoing health care debate.   Living Wills vs. Powers of Attorney for Health Care Over the last several years, it has been difficult to avoid hearing about the Terri Schiavo case.  Though many of us would prefer to avoid it, a recent article in the newspaper said that the Schiavo case has increased awareness regarding the importance of living wills.  It has, no doubt, increased awareness — but will it really motivate people to actually sign living wills?  Are you going to sign a living will now?  A living will is an expression of your wishes regarding end-of-life decisions.  If you don’t want to be kept alive artificially, should you ever become terminally ill and unconscious with no chance of recovery (as decided by two doctors), you can sign a living will making your wishes clear.  For a doctor to withhold or withdraw artificial life sustaining treatment, the law says there has to be clear and convincing evidence that those are the patient’s wishes.  The best way to accomplish this, of course, is to put your wishes in writing by signing a living will.  As we know, Terri Schiavo didn’t do this.  Her husband says that, before Terri became ill, they had discussed these issues and Terri had made it clear she wouldn’t have wanted to be kept alive in her condition.  Her parents disagreed.  Terri was kept alive for 15 years.  While a living will is clear and convincing evidence of a person’s wishes, it is possible that, from a practical standpoint in a true end-of-life situation, the document’s strength might be diminished if parents, children, or spouses claim the living will does not reflect their loved one’s wishes.  This could also happen if close family members simply don’t agree with each other as to whether or not the living will reflects their loved one’s wishes.  You can imagine the concerns a doctor is going to have when a patient’s living will says she doesn’t want to be kept alive artificially, but the patient’s daughter is there pleading with the doctor to keep her mother alive—saying that she knows her mother would have wanted to live.  You must discuss your wishes with your loved ones.  While an Illinois living will leaves instructions regarding the withdrawal of death-delaying procedures, it does not extend to the withdrawal or withholding of food and water if that deprivation, rather than an existing terminal condition, would be the cause of death.  Further, it does not address any other health care matters that may arise during your life.  Thus, a living will serves a very limited purpose. There is an alternative.  In Illinois, you can sign an Illinois Statutory Short Form Power of Attorney for Health Care (“HCPOA”), in which you (the “principal”) appoint an “agent” (and one or more successor agents) to make crucial health care decisions in the event that you are unable to do for yourself.  You are given three options dealing with the issue of life-sustaining treatment.  You can choose one of these options or you can insert a direction of your own choosing.  For example, you can authorize your agent to withdraw food and water, even if that deprivation would be the cause of death, if this is your wish.  In this respect, your HCPOA will serve as your living will.  In your HCPOA, you can also indicate your wishes with respect to anatomical gifts (i.e., organ donations), as well as autopsies and the disposition of remains.  Your agent is also authorized to make any other health care decisions on your behalf, not just with respect to life-sustaining treatment.  You can also direct that your agent be treated as you would be with respect to disclosure of your medical records.  For these reasons, a HCPOA will serve you in a much broader sense than would a living will. The Illinois Power of Attorney Act states that, as long as the agent named in the HCPOA is available, the HCPOA renders any living will executed by the principal inoperative.  This does not mean that it is inappropriate to execute both a health care power of attorney and a living will.  If the agent under the health care power fails or refuses to act, the existence of a living will may ensure that the individual’s wishes still will be honored.  Where an individual also would want artificial nutrition and hydration withdrawn in appropriate circumstances, some commentators suggest that the living will could be modified to reflect this wish.  Even if not effective under the Living Will Act, the provision will provide written evidence of the individual’s intent.  For all of the reasons set forth above, we recommend that our client’s rely on the health care power of attorney in most situations. Some of you reading this are elder care advocates.  You work with the elderly and their families every day.  Because these end of life issues are on so many peoples’ minds, we all have the opportunity to educate the individuals we serve on these issues and empower them with the knowledge they need to make informed decisions.  It is important for everyone to realize that advance directives, such as a health care power of attorney and living will (to some extent) can be tailored to suit their wishes.  For example, some may not want their lives prolonged in any way should they be terminally ill and unconscious, while others may want all means possible used to keep them alive.  Still others may wish to decline all life prolonging treatment with the exception of food and water.  Regardless of your decision, it is critical that you discuss your wishes with your family members and loved ones.  The key is to act now.  You may want to begin by contacting an elder law attorney to discuss questions you have about living wills and health care powers of attorney.  Once you’ve been educated about your options, you can make the decision that’s right for you.  And once your decision is made and you have acted on it, you can take the next step of discussing your wishes with your family.  Good elder law attorneys, who take a holistic approach to serving their clients, can help you with this part of the process as well.  P.S.      Also, don’t miss our new workshop: “Don’t Go Broke in a Nursing Home”, beginning this fall.  “Educate to Motivate”   Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764  Rosemont, IL 60018  PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com Email:  abferraro@abferrarolaw.com.   Member, National Academy of Elder Law Attorneys Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service.   The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material.  If the context requires, please consider this letter and the enclosed literature to be Advertising Materials.   This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice.  You should never attempt Medicaid planning, Estate Planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.        

 1.         Keeping Your Beneficiary Designations Current.  According to Consumer Reports “Money Adviser,” it is very important to keep your beneficiary designations up-to-date on your financial accounts.  By doing so, you will make sure your life savings doesn’t end up in the wrong hands, like and ex-spouse or estranged sibling or distributed under court supervision.  Do’s and Don’ts of Beneficiary Designation Forms according to Consumer Reports:

• Don’t leave beneficiary forms blank or name your estate.  If you do your account will be included in your probate estate and distributed per the instructions of your will.  If you do not have a will then the court will decide who gets your money and this requires probate in court. 

 

• Do list a primary and a contingent beneficiary.  By listing a contingent beneficiary you are covered if the primary beneficiary dies before you do.  It is often suggested that you name your spouse as the primary beneficiary and then a contingent beneficiary which can be a person or trust.  Be careful naming a trust or you can blow certain tax benefits.

 

• Don’t name a minor as a beneficiary.  Until they reach the age of 18 children cannot open up bank accounts or invest an inheritance they might receive by themselves and will need a guardian or custodian to control funds.  A better approach would be to name a trust as beneficiary for the minor children.  With a trust you can stipulate an age at which the children will receive their money.  You can also delay distribution to Junior longer. 

 

• Do review you choices on older accounts and policies.  It is important that you contact your broker, insurance agent or bank and ask who is listed on your accounts as beneficiaries, especially since some companies have gone under or have been acquired by others. When this happens, occasionally beneficiary documents are shredded or lost in transition.  If you need to re-do or update the beneficiary designation forms you might be able to obtain new ones from the company’s website or you can call and request them.  Your estate planner also might be able to obtain them for you.  (Keep a copy for your own records!)

  2.         Low-Cost Insurance to Help Ill Elderly Remain at Home.  Senator Edward Kennedy released an expansive health care plan that includes a national long-term care insurance program.  The program would offer basic help for the elderly and disabled.  Under this proposed plan, Americans would pay roughly a $65 premium per month (which is far less than the typical cost of private long-term care insurance), and after contributing for at least 5 years, participants would be eligible for a benefit of not less than $50 a day.  This might seem like a modest amount when compared to the average cost of a nursing home, but this amount would pay for a range of services that would allow an individual to stay at home longer.  3.         Guardian May Conduct Medicaid Planning.  A New York court allowed a guardian to conduct Medicaid planning on behalf of his great aunt, but the court requires that the money be placed into a trust for his aunt’s personal needs.   Some Illinois courts also try to provide the same opportunity for planning. 4.         Prepaid Burial…A Rip Off?  A 2007 AARP survey of 1,087 Americans 50 and older found that 23 percent of them had made pre-payments on funerals, burials or both.  However, there have been a number of funeral homes throughout the country who are not honoring the pre-paid burial plans purchased by customers.  One of the common complaints is the casket bait and switch.  This is when a customer asks for a specific casket and after they pass that casket is no longer available and the funeral home offers a lesser-quality model.  A second complaint is when a customer tries to cancel their policies.  Most funeral homes do not give refunds and many states do not require a funeral home to make full refunds.  A third complaint is when customers try to transfer their policies to another funeral home whether it is in the same state or a new state after the customer has moved.  But, the biggest complaint is outright fraud.   Most states require that sellers deposit 70 to 100 percent of the customer’s money into trust accounts and the money should remain untouched until it is needed to pay for the service.  But some funeral homes do not deposit the required amount and if they do they do not keep it there until the money needs to be used or sometimes they withdraw the money if the funeral home is strapped for cash. Some states allow pre-paid funerals to be funded by insurance policies rather than trusts and those plans are regulated separately under insurance laws.  Because of the lack of federal oversight that leaves regulation of the pre-paid policies up to the states, therefore depending on state law purchasers of pre-paid policies may have little recourse when their pre-paid policies disappear.              Before you buy…  

• Think it over.  It might not be necessary for you to purchase a pre-paid burial plans in-most cases.  Instead you could deposit money into a separate interest bearing account at the local bank and on your death the named beneficiary could use the money to pay for your funeral expenses.  Just make sure you choose a beneficiary that can be trusted. 

 

• Bring a magnifying glass.  Make sure you read the fine print carefully and make sure you know what is covered.  If there are uncovered expenses, like flowers, clergy honoraria, death certificates, etc. make a list and inform your survivors so they know what still has to be paid. 

 

• Ask about refunds.  Be certain the contract can be transferred to another funeral home or that your money can be refunded to you if you move or change your mind.  You might also want to find out if there is a penalty for canceling the policy or missing a payment.

 

• Follow the money.  Know where the money is being invested.  If it is being used to purchase an insurance policy, make sure the insurance company is highly rated, if the payments are going to go to a trust account, find out the bank or institution that will be holding the funds.

 

• Plan for change.  Find out what happens if your circumstances change.  What if something you requested is no longer available? What if the funeral home changes ownership? What if your family decides on a simpler, less expensive funeral? 

 

• Review your finances.  If you are trying to qualify for Medicaid you can put some of your money into an “irrevocable” pre-need funeral plan as a way of spending down your assets.

 

• Talk to an elder law attorney.  This is the most important.  Have your elder law attorney review any pre-need contract before you sign.

  (Some of the contents of “Prepaid Burial…A Rip Off” are taken from a well written illuminating article “R.I.P. Off” by Barry Yeoman found in the AARP Magazine for January and February 2008.) P.S.      Also, don’t miss our new workshop: “Don’t Go Broke in a Nursing Home”, beginning this fall.  Long Term Care Planning Attorneys The “3 Phase” Lawyers   Legal Counsel Assisting You in the 3 Phases of Your Life:   –           Maturing Years – Will, Trust, Taxes, and Asset Protection –           Senior Years – Long Term Care and Nursing Home Protection –           Post Death Years – Estate, Probate, and Trust Administration     “Educate to Motivate”   Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764 Rosemont, IL 60018 PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com Email:  abferraro@abferrarolaw.com NOTE: The information contained in this message is confidential and may be protected by the attorney-client privilege and/or the work product doctrine.  If you have received this electronic message in error, please reply to the sender and destroy this message. Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service.   The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material.  If the context requires, please consider this letter and the enclosed literature to be Advertising Materials. To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice.  You should never attempt Medicaid planning, Estate Planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.

Special White Paper Report   Retirement: Have You Prepared?   When planning for retirement it is best that people of different disciplines and trainings work at the table together.  CPAs, financial advisors and elder law attorneys need to put their various disciplines and expertise together to suggest advantages and disadvantages of various options.  One area that needs to be investigated is the area dealing with pensions and social security.  Before determining which pension options to select not only should there be investment considerations but also determination of what the exposure is for long-term care costs.  An analysis needs to be made of what benefits are available for needs such as housing and long-term care.  An examination should be made of Medicaid, Medicare, VA Benefit, what is offered through the Community Care Program through the Illinois Department of Aging and a number of other resources.  Once a determination is made as to what benefits might be available the next analysis should determine how to shift the risk of long-term care planning to the extent possible.  This is extremely important when there is a spouse who will continue to live in the community.  The protection of assets for community spouse can be achieved through the usage of asset transfers, trusts, long-term care insurance and annuities. When considering retirement this is an excellent time to examine your place on the “Elder Care Journey” and make a determination as to whether you have the appropriate estate plan in place.  The Wills, Trusts and Powers of Attorney that you executed 20 years ago when the children were small may no longer serve their purpose.  Rather, these documents may now work against you by transferring assets from a healthy spouse to an ill spouse while the ill spouse it trying to qualify for needs based governmental benefits.  Proper health care and financial powers of attorney need to be obtained to make sure there is someone designated to be able to act in your stead.  The health care power gives another person the ability to access information about your medical needs and consent to various treatments.  A financial power of attorney allows the agent to pay bills, transfer assets and engage in long-term care planning if that authorization is built into the financial power of attorney.  A review of retirement assets should be made in conjunction with the review of the estate planning documents.  Consistency about beneficiary designations needs to be created. Finally, when we look at retirement planning, the paradigm in which your life situation is analyzed needs to change.  Traditionally, attorneys have asked questions such as “What happens if you die?”  The new question that needs to be asked is “What happens if you don’t die, but become ill for a long period of time?”   Preparing for retirement should be something that we embrace and work hard for so that we can ensure that the golden years are protected.  Again, assembling a good team of advisors will enhance your chances in obtaining the right result.   P.S.      Also, don’t miss our new workshop: “Don’t Go Broke in a Nursing Home”, beginning this fall.  Long Term Care Planning Attorneys The “3 Phase” Lawyers   Legal Counsel Assisting You in the 3 Phases of Your Life:   –           Maturing Years – Will, Trust, Taxes, and Asset Protection –           Senior Years – Long Term Care and Nursing Home Protection –           Post Death Years – Estate, Probate, and Trust Administration     “Educate to Motivate”   Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764  Rosemont, IL 60018  PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com Email:  abferraro@abferrarolaw.com NOTE: The information contained in this message is confidential and may be protected by the attorney-client privilege and/or the work product doctrine.  If you have received this electronic message in error, please reply to the sender and destroy this message. Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service.    The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material.  If the context requires, please consider this letter and the enclosed literature to be Advertising Materials. To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice.  You should never attempt Medicaid planning, Estate Planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.  

Special White Paper Report Power of Attorney versus Guardianship Quite often we discover that clients coming to our office do not know the difference between a power of attorney and guardianship.  I would like to take the opportunity to explain it to you in very basic terms. What is a Power of Attorney?  A power of attorney is a legal document where one person, the principal, gives legal authority to another person, the agent, to perform certain acts on the principal’s behalf. There are 2 types of POAs:

1. Financial
2. Health Care

  In many instances, people will rely on the Illinois Statutory Short Form Power of Attorney for Property for financial matters, and the Illinois Statutory Power of Attorney for Health Care for medical needs.  Contrary to their names, these powers of attorney are not that short.  Nevertheless, depending on the needs of our clients, we often expand these documents even further to include certain provisions that the standard short form does not provide.  It may be a good idea in many circumstances to use the statutory forms because they are easily recognized by health care providers and financial institutions as powers of attorney.  You do not have to use the statutory form and can create your own power of attorney as long as it meets the requirements of the law.  However, once you depart from the statutory forms, you start running the risk that the document that you created may no longer be recognizable or accepted by health care providers or financial institutions.  You also have the ability to strike out and reduce the powers that are listed in the statutory forms.  Quite often, clients don’t want to give all of the powers that the statutory form automatically provides.  Finally, with regard to powers of attorney you can make them immediate powers of attorney or what we call “springing” powers of attorney.  An immediate power of attorney takes effect the day you sign it and can remain in effect for as long as you wish.  A springing power would only come into effect on the triggering of an event, such as a doctor’s determination of your disability.  You could allow powers of attorney to remain in effect for the remainder of your life often referred to as a durable power of attorney, or you can make a power of attorney last for only a short period of time, for example two weeks in order to allow an agent to close a real estate transaction for you.  For estate planning and long-term care planning, a durable power of attorney is obviously more effective. What is Guardianship?  Guardianship is a court-established legal relationship whereby the Guardianship Court appoints a person, the Guardian to make personal and financial decisions for someone who cannot make these decisions on their own (the Ward).  In Illinois, we have several forms of guardianship, but the most common is considered to be guardianship of the person for personal decisions regarding personal care and living arrangements.  The second type of guardianship is guardianship of the estate, wherein the Guardian has control over the assets of the Ward. Quite often a family member or interested person may initiate the guardianship proceeding by filing a Petition in the Guardianship Court in the county where the Ward resides.  The opinion of a doctor is necessary to establish the disability of the individual.  If the Ward is properly served and examined by a guardian ad litem (a court appointed lawyer acting as the eyes and ears of the judge), then the court may appoint a Guardian to make decisions in either the personal area or the financial area or both.  The power that a Guardian has is however, closely scrutinized by the court; before a Guardian can take any actions other than routine day to day matters, a court order must be obtained.  A Guardian is also required to report at least annually to the court on the status of the Wards personal condition and the status of the Wards income and assets. Conclusion For Long-Term Care Planning purposes, we like to have powers of attorney in place so guardianship can be avoided.  Guardianship will have substantial costs associated with it.  However, in many cases either because the power of attorney is inadequate or non-existent, guardianship is often obtained in order to further advance the benefits to the ward. This is another example of the need for proper planning so you have the opportunity to avoid a costly guardianship proceeding and instead rely on your self-appointed agent under powers of attorney to act the way you instruct them to act in the event of your disability.  If you have any questions, please do not hesitate to contact us. Long Term Care Planning Attorneys The “3 Phase” Lawyers   Legal Counsel Assisting You in the 3 Phases of Your Life:   –           Maturing Years – Will, Trust, Taxes, and Asset Protection –           Senior Years – Long Term Care and Nursing Home Protection –           Post Death Years – Estate, Probate, and Trust Administration     “Educate to Motivate”   Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764  Rosemont, IL 60018  PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com Email:  abferraro@abferrarolaw.com NOTE: The information contained in this message is confidential and may be protected by the attorney-client privilege and/or the work product doctrine.  If you have received this electronic message in error, please reply to the sender and destroy this message. Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service.    The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material.  If the context requires, please consider this letter and the enclosed literature to be Advertising Materials. To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice.  You should never attempt Medicaid planning, Estate Planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.

Financial Advisor’s Can Instill Hope and Consumer Confidence.    There is Still A Lot to Protect Out There.    Why not Grow Your Business?   At The Law Offices of Anthony B. Ferraro, LLC, we have taken a number of steps over the years to try to help Financial Advisors round out and deliver services to their clientele. In our opinion, the most important thing you can do in this depressed economy, in our humble opinion, is to create a very proactive message and let your clients know “We are out here, and we can take steps to protect your assets.”  Financial advisors can take the very deliberate step of helping clients protect their assets through the usage of several simple techniques that I will talk about in this update.  Remember, these strategies are designed to provide peace of mind to clients who feel that everything else is working against them. As an advisor, I would offer my clients the following: 

1. Trust Protector for Existing Trusts.  You may want to have all clients consider adding a Trust Protector to their existing trust or trusts.  This Trust Protector can do a couple of different things.  First, in connection with irrevocable trusts, the Trust Protector can provide discretionary asset distribution that the Trustmaker himself cannot undertake.  Second, the Trust Protector can make changes to the trust provisions that, again, the Trustmaker himself cannot make.  This creates flexibility and peace of mind for clients.    

 

1. Dynasty Trust Planning.  This is not just for the Rockefeller’s and Carnegie’s.  Let’s assume you have a client that desires to deliver an estate of $300,000, $500,000 or $700,000 to their children.  The problem is that the client doesn’t trust their daughter-in-law or son-in-law, or for that matter, they may not trust their child.  A Dynasty Trust is a way of holding back a trust distribution at the death of the parents.  This enables the monies to be available for the children or grandchildren, but does not distribute outright all at one time.  This gives parents the peace of mind of knowing that everything that they strived and worked for to accumulate over the years will be available for their children and not squandered shortly after their deaths.  This type of planning may also afford you the opportunity to obtain an introduction to the next generation or two of your client’s family. 

 

1. Grantor-Type Trust.  Explain to clients that grantor-type trusts are advantageous because they will not result in having to file an additional tax return during the life of the Trustmaker (Grantor).  Also explain that a grantor trust is something advantageous and that can be toggled on and toggled off at different points during their life such as for example in connection with planning for veterans benefits.  This is another widely used tool offering protection for clients at a time when all clients are looking for ideas regarding protection. 

 

1. Multiple Trusts.  Sometimes a trust is a great idea.  Sometimes that idea no longer works.  It is a shame to terminate a trust simply because one idea does not work.  Perhaps having several trusts with slightly different objectives can avoid the need to totally eliminate otherwise perfectly valid trusts. 

 

1. Trust as a Beneficiary.  Either in connection with beneficiary designation assets or tax-qualified assets such as IRAs or 401(k)s, a lot of work needs to be done in connection with beneficiary designations.  It really does not matter what is written into wills or trusts if the beneficiary designations are inconsistent with the client’s objectives.  You have a lot work to do as an advisor in connection with beneficiary designations, so let your clients know that you care enough to have reviewed such designations and will even go through the expense of preparing new ones, if necessary. 

 

1. Second Marriages.  These are very common in our society.  A second marriage raises a whole host of issues on which the client needs counseling.  In order to provide protection to the client, the issues associated with second marriage need to be understood and discussed with clients.  This is fertile ground for advisors to be adding value to clients and how they perceive your services.  Please give consideration to second marriage planning as a special niche.

  The common theme throughout the six items described above is that they all deal with long-term care planning.  Long-term care planning is not just protection from a nursing home, as we have written about in recent Elder Law Updates.  Long-term care planning involves the long-term, and in the long-term there are all of the issues described above that need to be taken into consideration. Again, we are here to help you communicate with your clients so you can grow your business.  We hope you will continue to serve clients that need hope and ideas in tough economic times.  Let us know if you think that this type of message to your clients would be something of value to them.  Don’t hesitate to share with them this update or invite them to one of our free workshops that we offer.  Please recall that we offer 2 workshops: 1) the “Elder Care Journey” and 2) the “New Estate Planning Essentials,” both of which I think can spread the message of hope and protection that clients are so desperate for.  P.S.      Also, don’t miss our workshop: “The Elder Care Journey – How to Get Financial Assistance for your Nursing Home Care…Without Selling your Home or Leaving your Family Without a Dime” set for the following dates.  Please contact our office at (847) 292-1220 to register. May 18, 2009 at 6:30 PM June 11, 2009 at 4:00 PM June 23, 2009 at 6:30 PM July 9, 2009 at 4:00 PM Call (847) 292-1220 to make a reservation in our training room. You don’t want to miss this workshop! Long Term Care Planning Attorneys The “3 Phase” Lawyers   Legal Counsel Assisting You in the 3 Phases of Your Life:   –           Maturing Years –          Will, Trust, Taxes, and Asset Protection –           Senior Years –             Long-Term Care and Nursing Home Protection –           Post Death Years –       Estate, Probate, and Trust Administration     “Educate to Motivate”   Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764  Rosemont, IL 60018 PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com Email:  abferraro@abferrarolaw.com NOTE: The information contained in this message is confidential and may be protected by the attorney-client privilege and/or the work product doctrine.  If you have received this electronic message in error, please reply to the sender and destroy this message. Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service.  The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material.  If the context requires, please consider this letter and the enclosed literature to be Advertising Materials. To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice.  You should never attempt Medicaid planning, Estate Planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.