Most states allow you to own some kinds of property in joint tenancy, a legal form of ownership that allows more than one person to own the property at the same time. People who own property in joint tenancy may also have a right of survivorship, meaning that when one co-owner dies, the surviving co-owner inherits that person’s ownership interest. There are different kinds of property that can be owned as a joint tenancy, though you should talk to your attorney for state-specific information. 

Bank Accounts. Married couples often own a bank account as a joint tenancy. With bank accounts, each account holder has the right to use the account as he or she chooses, meaning both owners can deposit or withdraw money as they choose.

Real Estate. Many people, usually married couples, own their homes as joint tenants. In some states, however, married couples can only own real estate as tenants by the entirety, a form of ownership very similar to joint tenancy but with asset protection qualities.

Safe Deposit Boxes. Like bank accounts, you can own a safe deposit box as a joint tenancy. Like a bank account, both joint tenants have an equal right to use the safe deposit box. However, the property placed within that box is not necessarily held in joint tenancy, meaning that, for example, a spouse cannot use the individually owned property in the box that the other spouse—the owner—placed within it.

Duffy Law Office is a member of the American Academy of Estate Planning Attorneys.

Will you have a living will when medical crisis strikes?  It seems as though life just plods along and nothing changes; but then, everything changes in a moment.

We’ve had clients who are seemingly healthy and all of a sudden are injured or seriously ill.  If you are so ill that you cannot give informed consent, you can’t sign a living will.  Like all estate planning documents, you need to have them in place before you actually need to use them.

Let us tell you about a woman named, Grace.  Grace and her husband had moved to a retirement community and they updated their estate planning documents after the move.  (Any time you move to a new state, it’s wise to have your documents professionally reviewed for updates.)

Grace included a living will in her estate plan.  She didn’t want to be kept alive with medical heroics (including life support machines) if she was in an irreversible coma or persistent vegetative state.

She was diagnosed with cancer shortly after her move and gradually went down hill.  One day, she fell, calling out her husband’s name.  Grace never regained consciousness.

The doctors examined her and determined that she was brain dead; they asked if she had a living will.  She did.  Her husband brought it to the hospital.  He and their children visited and then life support was removed.

Grace died peacefully just 15 minutes later.  While her family was sad to lose her, they felt at peace with the execution of the living will.

Duffy Law Office is a member of the American Academy of Estate Planning Attorneys.

Choosing the right lawyer to help you develop an estate plan is a key step in preparing for the future. But how do you find a lawyer in the first place? And how do you know your lawyer is the right lawyer for you? Picking an estate planning attorney is not difficult, but you can take steps to ensure you find a lawyer that fits your needs.

Tip 1: Come up with a list of potential attorneys. If you don’t know where to start, you can contact your state bar association and ask for referrals to local estate planning attorneys. Ask for several names and create a list with each and their contact information. You can also talk to friends and family members to see if they have a lawyer they recommend.

Tip 2: Call them. Each attorney, or law firm, should be able to provide you with a free initial  consultation, either in person or over the phone. Scheduling a time to meet with the lawyer in person is usually best, as there are some things you cannot learn simply by talking over the phone.

Tip 3: Interview them. Once you set up your meeting, be ready to ask questions. How much experience does the attorney have? Is she a certified estate planning specialist? Does she have malpractice insurance? Does she charge by the hour or on a flat fee basis? Write down all your questions before you meet with the attorney and write down the answers so you can review them later. Once you’ve talked to each attorney, you can then make a more educated decision.

Duffy Law Office is a member of the American Academy of Estate Planning Attorneys.

It’s a new year and a great time to get your estate planning in place or to have your current plan professionally reviewed.

If You’re 18 or Older, You Need an Estate Plan

Children are covered by their parents’ estate planning documents.  So, if you’re a parent, you need an estate plan to protect yourself and your children.

If you are age 18 or older, you’re no longer covered by your parents’ plans and you need your own.  If you don’t have one, the courts and state law will create a plan for you and it isn’t, likely, what you’d want.

This means that the court will decide who raises your children and who settles your estate; state law will determine who gets what of your assets.

Are Your Estate Planning Documents Stale?

Even if you have estate planning documents in place, they may be stale if they are too old and/or don’t carry out your current intent.

Documents are stale if they’re:

• Typewritten
• On Legal-Sized Paper
• From Another State
• More Than 3 to 5 Years Old
• Fail to Name All of Your Children

Or if they,

• Name a Trusted Helper Who is Incapacitated, has Died, or Just is No Longer Appropriate
• Don’t Carry Out Your Current Wishes and Goals

If a document is stale, your wishes may not be carried out and legal institutions may not honor it for fear that it is no longer legally valid.

It is in your best interests to call a qualified estate planning attorney in the New Year and get a strong, comprehensive estate plan in place.

Duffy Law Office is a member of the American Academy of Estate Planning Attorneys.

Your house needs to be protected from the nursing home both while you are living and after you die.

During Your Lifetime

When you apply for Medicaid to pay for the nursing home, your house will be protected during your lifetime so long as you indicate on the Medicaid form that you intend to return to your home.  Even if it looks clear that you will never return home, mark that you do intend to return home; this is a formality that must be honored to protect your house.

After Your Death

When you receive Medicaid to pay for long term care, the state will try to get repaid for monies spent on your care, through a process called “estate recovery.”  To avoid estate recovery and the taking of your house, you must plan ahead well in advance.

Two Planning Methods

The two most common planning methods are the use of a life estate and an irrevocable trust.

The life estate strategy consists of drafting and filing a new deed to your house; the deed allows you a life estate interest in the house and your beneficiaries own the remainder interest.  You own the house when you’re alive; your beneficiaries, automatically, own the house at your death.  Be aware that this technique is not available in all states so you must get legal advice before you proceed.

The trust strategy is similar; the deed transfers the house into a trust.

In both strategies, the house is outside of your estate; and, is, therefore, not subject to estate recovery.

Because of nursing home transfer look-back periods, the sooner you plan the better; but, never hesitate to get good legal advice from an elder law attorney, even if you think it’s too late.  You can protect your home from the nursing home.

Duffy Law Office is a member of the American Academy of Estate Planning Attorneys.

The nursing home “look-back period” is the length of time Medicaid officials can look back to see whether any transfers have been made, for the sake of qualifying for Medicaid to pay for the nursing home.  Medicaid officials are only concerned about the transfer of assets for less than fair market value.

You must disclose all assets for less than fair market value on your Medicaid application.  The bottom line is that you can’t give all of your assets away today, so that you qualify for Medicaid tomorrow.

In 2012, the look-back period is 60 months; that’s 5 years.  This is the look-back period only, not the disqualification period.

This means that if you gave away any assets for less than the real value, you will be disqualified for some period of time.  It does not mean that you are disqualified for the entire 5 years.  The disqualification period is determined by the size of the gift.

Do not try to transfer assets for the sake of qualifying for Medicaid on your own; the process is complex and if you make a mistake, you may be unnecessarily disqualified from receiving Medicaid to pay for your long term care.  A mistake may cost you and your family thousands and thousands of dollars.  Always work in consultation with an elder law attorney.

Duffy Law Office is a member of the American Academy of Estate Planning Attorneys.

Paying for long term care in a nursing home is a challenging task that may seem overwhelming.  You’ve likely heard that your grandmother’s assets must be spent down before Medicaid will pay her long term care costs.  Fortunately, the nursing home will not take your grandmother’s engagement ring, as jewelry is an exempt resource.

An exempt resource is something that your grandmother owns that doesn’t have to be spent down before she qualifies for Medicaid.  Exempt resources include jewelry, a small amount of cash, her home, a car, a pre-paid funeral or burial trust, small amount of life insurance, clothing, furniture, and other personal possessions.

If your grandmother is married and her spouse lives in their home, higher levels of cash and income can be protected, than if she is single.

One Medicaid planning strategy is to convert non-exempt resources into exempt resources.  For example, cash may be spent down by replacing the roof on your grandmother’s home or paying off the mortgage.

A word of caution, valuable personal items often go missing in nursing homes; it would be wise to put your grandmother’s engagement ring in a safe place with loved ones, instead of her wearing it in the nursing home.

If you want to protect your grandmother’s belongings and assets, such as an engagement ring from the nursing home, consult with a qualified elder law attorney.

Duffy Law Office is a member of the American Academy of Estate Planning Attorneys.

From the view of December 2011, 2012 brings little change to federal estate tax laws; although, Congressional discussions of change are always on the horizon.

What You Need to Know about Federal Estate Taxes in 2012

1. The federal estate tax exemption has been indexed for inflation and in 2012 is set at $5,120,000.If you die in 2012 and haven’t used any of your exemption during your lifetime, you can pass up to $5,120,000 without paying federal estate tax.
2. If you die in 2012 and haven’t used any of your exemption during your lifetime, you can pass up to $5,120,000 without paying federal estate tax.
3. If you’ve used some of your exemption during your lifetime, your federal estate tax exemption is reduced by that amount.The top rate for federal estate tax is 35%.
4. The 2012 exemption and tax rate will last one year at the most; they are set to expire December 31, 2012.The law now includes a provision called “portability,” which is supposed to mean that married couples don’t need tax planning trusts or asset allocation to take advantage of doubling the federal estate tax exemption.
5. YOU CANNOT COUNT ON PORTABILITY.   The concept of portability makes sense but the actual practice is fraught with problems and is not likely to work.  If you’re married, it may be in your best interest to engage in comprehensive estate planning that includes tax planning (A-B trusts) and fully fund your assets, making sure both you and your spouse use your federal estate tax exemptions.

If you want to understand how the federal estate tax affects you in 2012, consult with a qualified estate planning attorney.

Duffy Law Office is a member of the American Academy of Estate Planning Attorneys.

In many cases, clients own their home in their own Revocable Living Trust.  If clients are in a federally taxable estate, a house or vacation home may be put into a Qualified Person Residence Trust (QPRT.)

Revocable Living Trust

The four main goals of putting your house in a Revocable Living Trust are:

1. To avoid probate.
2. To provide authorization for your successor trustees to manage all aspects of your home.
3. To pass your home into an asset protection trust for your spouse and children.
4. To ensure that you use your federal estate tax exemption.

Your estate planning attorney will design and draft your Revocable Living Trust to your individual specifications; he or she will also draft and record the deed, transferring your home into your trust.

Qualified Personal Residence Trust

There is one main goal and a side benefit to QPRTs.

1. To exclude your home and/or vacation home from federal estate taxes.
2. To pass your home into an asset protection trust for your spouse and children.

Your estate planning attorney will design and draft your QPRT to your individual specifications; he or she will also draft and record the deed, transferring your home into your trust.

While no appraisal or gift tax return in required for a transfer to a Revocable Living Trust, you must complete both for a QPRT.

At the end of the QPRT term, your house will be transferred, by way of a deed, from the trust into the names of individual beneficiaries or into trusts for those beneficiaries.

If you own a house, consult with a qualified estate planning attorney to determine whether your house should be in a trust.

Duffy Law Office is a member of the American Academy of Estate Planning Attorneys.

“Crummey” is actually a man’s last name; his estate planning case made headlines.  Making headlines, for estate planning matters, is rarely a good thing.  However, thanks to Dr. Crummey, we all, estate planning attorneys and clients, alike, benefit.

What’s a Crummey Notice?

A Crummey notice is used to transform what would otherwise be a future gift into a present gift.

Okay, we know that sentence makes no sense to non-lawyers.  We’ll try again; a Crummey notice saves you a lot of money that would otherwise go to pay taxes.

Bottom line:  Crummey notices save you and your family money!!

When are Crummey Notices Used?

Crummey notices are used when money is put into a life insurance trust.  Usually, this is once a year.

Who Gets a Crummey Notice?

The beneficiaries of the life insurance trust receive the Crummey notices.

What does a Crummey Notice Say?

A Crummey notice says, “A gift has been made to a trust of which you are the beneficiary.  You have the right to take out xxx dollars for the next 30 days.”

Do I Take the Money Out? 

No, whoever named you as the beneficiary and his or her attorney will likely explain to you that it is in your best interest to leave the money in the trust.  The money will be used to make life insurance premium payments of which you are a beneficiary.

Life insurance trusts and their Crummey notices are commonly used to save federal estate taxes, generation skipping taxes, and gift taxes.  Consult with a qualified estate planning attorney to learn whether this would work for you.

Duffy Law Office is a member of the American Academy of Estate Planning Attorneys.