A power of attorney is a document that grants various powers and responsibilities to a trusted third party or “agent” who can act on your behalf. This document usually only allows an agent to make non-medical decisions on your behalf. A power of attorney can be a valuable planning tool that lets you decide in advance who will manage your affairs should you become unable to do so. It can also be a way to avoid expensive guardianship or conservatorship proceedings if you become disabled or incapacitated.

The way a power of attorney is formalized varies from state to state. Some states have particular requirements and wording that must be in a power of attorney for it to be valid and accepted. You may have heard of the terms “springing” and “non-springing” power of attorney and wonder what they mean.

Springing Power of Attorney

A springing power of attorney is a document executed now, but that does not take effect unless the principal becomes incapacitated or a particular event occurs. This type of power of attorney is contingent on something specific happening before it comes into force. If the event or incapacity never occurs, an agent will not be empowered to act on behalf of the principal.

Many people want a springing power of attorney because they feel more comfortable knowing their agent can only exercise powers if a triggering event occurs. This can alleviate any concern that the agent may try to misuse a power of attorney.

A springing power of attorney is not always easy to use. Depending on your jurisdiction, it may be necessary to have a medical professional such as a doctor certify that a triggering condition has occurred.

Let’s say you become medically incapacitated. Where required, the professional will likely have to complete an affidavit attesting to your condition or that certain events occurred. Often, a medical professional will not be comfortable signing an affidavit or may require their own attorney to advise them on how to proceed. This can cause delays that can frustrate an agent’s ability to act, especially in time-sensitive situations.

Additionally, financial institutions may be reluctant to accept this type of power of attorney because it is difficult for them to judge whether you truly are incapacitated or if a triggering event has in fact occurred. A certain amount of caution on the part of financial institutions is understandable: When someone steps forward claiming to represent the account holder, the financial institution wants to verify that the individual indeed has the authority to act for the principal.

Non-Springing Power of Attorney

With a non-springing power of attorney, the agent has the powers granted in the document the moment it is signed by you and the agent(s) you designate. So, even if you are capable of signing for yourself or handling certain transactions, your agent could still sign for you without your involvement.

How Some States Approach Powers of Attorney

Many states have taken steps to address some of these problems. New York, for example, implemented a statutory form in 2021 that, if filled out and executed correctly, financial and other institutions will be more likely to accept. In particular, it has a provision where the agent agrees to reimburse the third party for any claims that may arise against the third party because of reliance on a power of attorney.

To help limit the potential for abuse by an agent, New York’s form also allows a power of attorney to be narrowly tailored to a specific purpose.

The laws of each state will vary when it comes to powers of attorney. For guidance on a Maryland springing or non-springing power of attorney, consult the experienced estate planning attorneys at Elville and Associates.  They will partner with you to devise a strategy for your power of attorney and other estate planning documents that suit your situation.  As experience estate planners led by Managing Principal and Lead Attorney Mr. Stephen Elville, you’ll be guided through all matters related to the estate planning process through client education, counseling, and leading-edge legal-technical knowledge, creating solutions to your needs and offering peace of mind along the way.  Contact Mr. Elville here or reach out to his Executive Assistant, Mary Guay Kramer, at 443-741-3635 or at mary@elvilleassociates.com to schedule a free initial consultation today.  

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Join us in our next installment of the Elville Webinar Series’ Wellness Series featuring Dr. Michelle Fritsch and Ms. Ellen Platt to discuss purpose and meaning.

 

The discussion will include paring down your “to-do list” and eliminating unfocused “busyness” to make room to hone in on the important aspects of our lives – to find fulfilment and meaning in what we do.

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The education of clients and their families through counseling and superior legal-technical knowledge is the mission of Elville and Associates.  We hold multiple educational events every month. Click to view our calendar of educational webinars and events or visit the Elville and Associates YouTube channel to view recordings of our past webinars.

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Elville and Associates’ Managing Principal and Lead Attorney Stephen Elville offers this webinar discussion about the very important topic of how to select a Trustee. Choosing a Trustee is one of the most intensive pieces of the estate planning process, and a choice not to be taken lightly. Ensure you’re educated about all the factors that go into making this important decision.

 

Points of emphasis include:

– What is a Trustee and what are their responsibilities?

– Types of Trustees and their characteristics – advantages and disadvantages

– The perfect Trustee – setting the benchmark for selection

– Trustee selection – why is it so important?

– Trustee succession and plan design – why so difficult, why so crucial?

– Trustee roles in Wills and Trusts

– What are some reasons to consider appointing a Corporate Trustee?

– Why should you be concerned about “Successor Trustee risk”?

More Webinars from Elville and Associates

The education of clients and their families through counseling and superior legal-technical knowledge is the mission of Elville and Associates.  We hold multiple educational events every month. Click to view our calendar of educational webinars and events or visit the Elville and Associates YouTube channel to view recordings of our past webinars.

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Identity theft occurs when someone uses another’s personal identifying information, like their name, social security number or credit card number, to commit fraud or theft. Identity theft is one of the fastest growing crimes in the United States. A 2021 Javeline Strategy study estimates Americans lost a total of $56 billion dollars in Identity Theft scams. These alarming statistics demonstrate identity theft may be the most frequent, costly and pervasive crime in the United States. This presentation will cover the various types of identity theft, to include child ID theft, medical ID theft, tax ID theft and data breaches. The ease of accessing our personal information online and through public information resources will also be discussed.

Your presenter is Mr. Andre Lingham, Founder and President for the Center of Elder Justice and Education and a distinguished retired Howard County Police Officer. The Center of Elder Justice and Education was established in 2021 and is a non-profit organization that promotes elder abuse awareness and education. Their mission is done by virtual and in person training to senior citizens, the general public, government agencies, police departments and private institutions.  Andre previously served over 30 years in law enforcement and retired from the Howard County Police Department in 2019 to focus full time on elder abuse awareness and education. While a member of the Howard County Police Department, he served as the Senior Citizen Liaison for 5 years. In 2014, Andre was named Howard Police Officer of the Year and 2015 American Legion Law Enforcement Officer of the Year for his work educating and protecting seniors

More Webinars from Elville and Associates

The education of clients and their families through counseling and superior legal-technical knowledge is the mission of Elville and Associates.  We hold multiple educational events every month. Click to view our calendar of educational webinars and events or visit the Elville and Associates YouTube channel to view recordings of our past webinars.

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It is estimated that seniors are scammed out of $36 billion dollars per year in financial exploitation. Such exploitation occurs whenever older adults are deprived of their property by improper means. This commonly includes fraud, theft or deceptive behavior. Often the perpetrator of this behavior is a family member, caregiver, or someone who has a relationship of trust with the older adult. This presentation will cover the various types of financial exploitation, scams and frauds that target seniors and the best ways to minimize being victimized. Case studies and interviews with victims are included in the presentation. Your presenter is Mr. Andre Lingham, Founder and President for the Center of Elder Justice and Education and a distinguished retired Howard County Police Officer. The Center of Elder Justice and Education was established in 2021 and is a non-profit organization that promotes elder abuse awareness and education. Their mission is done by virtual and in person training to senior citizens, the general public, government agencies, police departments and private institutions. Andre previously served over 30 years in law enforcement and retired from the Howard County Police Department in 2019 to focus full time on elder abuse awareness and education. While a member of the Howard County Police Department, he served as the Senior Citizen Liaison for 5 years. In 2014, Andre was named Howard Police Officer of the Year and 2015 American Legion Law Enforcement Officer of the Year for his work educating and protecting seniors.

More Webinars from Elville and Associates

The education of clients and their families through counseling and superior legal-technical knowledge is the mission of Elville and Associates.  We hold multiple educational events every month. Click to view our calendar of educational webinars and events or visit the Elville and Associates YouTube channel to view recordings of our past webinars.

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There are strategies you can take to keep your brain always working and learning. We will cover these and steps to take if you feel your memory is slipping. Get specific tips you can apply right away to stay mentally sharp. Featuring nationally renowned speakers Ms. Ellen Platt, a certified Aging LifeCare Manager and President of The Option Group, and Dr. Michelle Fritsch, a board certified, doctoral trained health professional and founder of Retirement Wellness Strategies, this presentation is one you will not want to miss! This webinar is offered in partnership with Visiting Angels, a longtime supporter of Elville and Associates’ educational programs. To learn more about Visiting Angels, its services, educational programs and calendar of events, please visit www.visitingangels.com or contact Ms. Stephanie Lawler, Homecare Consultant, at stephaniel@mdvisitingangels.com.

More Webinars from Elville and Associates

The education of clients and their families through counseling and superior legal-technical knowledge is the mission of Elville and Associates.  We hold multiple educational events every month. Click to view our calendar of educational webinars and events or visit the Elville and Associates YouTube channel to view recordings of our past webinars.

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Trusts are great tools for leaving assets to your heirs while maintaining control over their access to those assets. In many cases, you would tell your beneficiaries that you have made a trust for them. However, this is not always desirable — and this is where a “quiet” trust may be helpful.

A quiet trust is a trust created much like other trusts, but with little to no notice given to its beneficiaries. A person, called a grantor, places assets in a trust managed by someone who is appointed as a trustee.  

The trust document may provide that income will only be distributed to a beneficiary once specific conditions are met — for example, when the grantor passes away or the beneficiary reaches a certain age. It may further require that no information regarding the accounting of the trust, what the trust owns, or other details will be provided to a beneficiary until certain conditions or timeframes occur.

Advantages of a Quiet Trust

Many people turn to quiet trusts for their children or grandchildren. They want to avoid their heirs relying on these future resources and becoming complacent instead of developing themselves financially or professionally. The idea is that if the beneficiaries don’t know about the money, they will work harder to create their own wealth and develop good financial habits. Many trust grantors hope that this personal development will make it more likely that once their heirs receive income or assets in a trust, they will be better equipped to manage and preserve these resources.

In other situations, you may wish to keep a trust a secret as a matter of privacy. A quiet trust can control the number of people who know about the trust. This can prevent family disputes if one person will receive more than another. It can also prevent heirs from talking too much about what they may receive, misusing the information, or being taken advantage of. For example, some parents may be concerned about their children’s creditors or anyone trying to get close to them for the wrong reasons.

A quiet trust can shield your loved ones from these problems and help them overcome any disincentive to develop themselves to be the best they can be. In addition, just like an ordinary trust, a quiet trust can be used for estate tax planning and avoiding the lengthy and expensive probate process. Depending on how they are set up, quiet trusts can also delay when the assets are taxed as income.

When a Quiet Trust May Not Make Sense

However, there are situations where a quiet trust may not work for you or your family. For one, you may wish to involve your children in your financial planning or discussions about your assets.

Sometimes keeping information secret can also backfire. Your heirs may not be prepared for suddenly receiving large sums of money or investments if they are unaware of them. For example, if you leave them rental property and they have moved to another state by the time they receive it, they may not be able to manage the property easily.

The lack of disclosure may also create a certain amount of distrust or resentment.

Setting Up A Quiet Trust

How you set up a quiet trust will likely vary based on state law. The basic process involves drafting a trust agreement, transferring assets, and implementing the terms of the trust. You should ensure that the person you choose to manage your trust is someone on whom you can rely. The wrong person could mishandle assets, fail to keep proper accounting, or miss deadlines for filing tax returns.

This process is best overseen by an attorney and other professionals, such as a financial planner and CPA familiar with trusts.

For guidance on quiet trusts, consult the experienced estate planning attorneys at Elville and Associates, whose educational process and known throughout the mid-Atlantic as being unique in guiding individuals and families through the estate planning process.  The education of clients and their families through counseling, client education, and superior legal-technical knowledge is the mission of Elville and Associates.  Contact Elville and Associates today for your free initial consultation.

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If you have a child with disabilities, it is crucial to set money aside for the child’s future. At the same time, you need to consider your child’s access to public benefit programs such as Medicaid and Supplemental Security Income (SSI), as well as the state and federal tax implications. The two major vehicles to accomplish these goals, Maryland ABLE accounts and special needs trusts (SNTs), each have their advantages and limitations.  Using them in tandem may be the optimal strategy for your child with special needs.  

Achieving a Better Life Experience (ABLE): Pros and Cons

Patterned on Section 529 college savings accounts, ABLE accounts offer a tax-advantaged way for people with disabilities to put money aside in excess of the SSI program’s $2,000 resource cap without compromising their eligibility for government benefits like SSI and Medicaid.

Assets are allowed to grow, tax-free, inside the account, and withdrawals are not taxed so long as the money is spent on qualified disability expenses (QDEs) such as transportation, assistive technology, health and wellness, and employment support.

And, unlike a special needs trust, which leaves the account under the control of an assigned trustee, an ABLE account can be managed and controlled by the beneficiary once she or he comes of age. Being able to spend money without having to obtain a trustee’s permission translates into welcome financial independence for a person with a disability.

ABLE accounts are easy and inexpensive to set up.  Almost all states now have ABLE programs, and if yours doesn’t, you can set up an account using the program in another state that accepts out-of-state account holders.  For a directory of ABLE account programs, click here.

However, ABLE accounts have several serious drawbacks and limitations. The beneficiary with special needs is the owner of the assets but may lack the capacity to manage the money responsibly. The parents can petition to take on this role, but if they die before the beneficiary, the account would have to be managed through guardianship or conservatorship, which can be cumbersome. Alternatively, the Social Security Administration (SSA)-appointed Representative Payee can manage the account.

Perhaps the most significant drawback to an ABLE account is that the beneficiary must have become disabled before the age of 26 to qualify. Also, the beneficiary can only have one account and if its value exceeds $100,000, any benefit from the SSI program is suspended automatically.  (Medicaid eligibility is not affected until the account’s value meets the state’s 529 account threshold — for example, California’s is $529,000). Annual contributions are limited to $16,000, as aligned with the federal gift tax exclusion. Lastly, most states that administer ABLE programs have a Medicaid payback provision upon the death of the beneficiary. This means the state can claim reimbursement, dollar for dollar, for any Medicaid funds that went to the beneficiary during his lifetime, if any money remains in the ABLE account.

Special Needs Trusts (SNTs): Pros and Cons

A special needs trust can be a way around these limitations. Unlike ABLE accounts, there is no limit to the size of the trust, and the funds can be used for almost anything a beneficiary needs to supplement his or her government benefits. Annual contributions are not limited as they are for ABLE accounts. Because the trust, and not the person with special needs, owns the assets, it is not counted against the beneficiary’s financial eligibility for SSI or Medicaid.  Upon the beneficiary’s death, the assets in a third-party special needs trust can pass to the donor’s other relatives or anywhere else and are not subject to the state’s Medicaid payback provision (assets in a first-party special needs trust, which holds the beneficiary’s own assets, are subject to payback).

On the downside, as noted earlier, trust distributions are controlled by the trustee, not the beneficiary.  Also, third-party special needs trusts do not enjoy the same tax benefits as ABLE accounts. Income over $4,300 is taxed at the highest rate (37 percent) for federal taxes, and state taxes may be due as well, although deductions apply that can lower this rate to the beneficiary’s tax rate. Assets within the trust do not grow tax-free over time but are subject to capital gains taxes, and these can be considerable. Because the property originally belonged to an owner other than the primary beneficiary with special needs, capital gains are assessed when the assets were originally purchased, perhaps at a very low cost if they were held over a long period of time.

You Can Have It All

The best solution is to use both. The ABLE account can be funded over time from the special needs trust, giving the person with a disability who has the capacity and ability to manage his or her own assets up to $100,000. This approach offers the best of both worlds: ensuring that the person with a disability is able to manage significantly more money in an ABLE account while at the same time preserving public benefits and having assistance in managing an entire inheritance in the special needs trust.  

Stephen Elville, Managing Principal and Lead Attorney at Elville and Associates can work with you to devise the strategy that works best for your family.  As an experienced special needs planner and someone passionate about helping individuals and families with loved ones with special needs, Mr. Elville guides families and individuals through the planning process through client education, counseling, and leading-edge legal-technical knowledge, creating solutions to their needs and peace of mind along the way.  Contact Mr. Elville here or reach out to his Executive Assistant, Mary Guay Kramer, at 443-741-3635 or at mary@elvilleassociates.com to schedule a free initial consultation today.  

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Join Elville and Associates as we welcome Mr. Mark Trent of Medicare Supplement Services for this timely presentation about “Medicare Basics – What You Need to Know.” The annual Medicare enrollment period runs from October 15th through December 7th. Mr. Trent was Elville and Associates’ featured presenter at our 2017 and 2018 annual Client Event and we are thrilled to welcome him back for this presentation! His wit and wisdom make for a fun and very educational presentation. Among the topics of discussion will be: -The Federal Government’s “Medicare & You” handbook translated into English (the least read book in America) -The Basics – Medicare A, B, C and a D – and what’s CMS? -Part A and B entitlement and cost – plus something called IRMAA which may surprise you – What’s a Supplement? – ugh, more letters -Medicare Part D – DRUGS, it’s not what you’re used too -Medicare Part C – Advantage Plans, Medicare all in one! -Fall Open Enrollment – what it’s really for To register and receive your personal link to attend, please click here. Should you have any questions before the webinar please contact Community Relations Director Jeff Stauffer at jeff@elvilleassociates.com, or at 443-393-7696 x117. We look forward to hosting you! For CPAs, CFPs, and various other professionals, 1.5 continuing education hours are available for attending this webinar.

More Webinars from Elville and Associates

The education of clients and their families through counseling and superior legal-technical knowledge is the mission of Elville and Associates.  We hold multiple educational events every month. Click to view our calendar of educational webinars and events or visit the Elville and Associates YouTube channel to view recordings of our past webinars.

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This webinar is an in depth overview that will thoroughly educate attendees about the essentials of estate and elder law planning. Presented by Elville and Associates’ Managing Principal and Lead Attorney Stephen R. Elville, in our Estate Planning and Elder Law Essentials webinar Steve thoroughly educate attendees about estate planning and incapacity planning issues. Some of the topics she will address include: — understanding the planning process, including the reasons for estate planning — wills vs. trusts — probate vs. non-probate and understanding non-probate devices — the absolute importance of incorporating “flexibility” in your planning — planning for incapacity — understanding the importance of financial powers of attorney, advance medical directives and MOLST — Medicaid – myths versus reality — estate tax planning — asset protection and protecting shares for children and grandchildren — understanding why having outdated documents could provide challenges in the future — how to achieve perfection for your legacy Open to clients, financial advisors, and the general public, 1.5 continuing education hours are available for professionals who attend this presentation. 

More Webinars from Elville and Associates

The education of clients and their families through counseling and superior legal-technical knowledge is the mission of Elville and Associates.  We hold multiple educational events every month. Click to view our calendar of educational webinars and events or visit the Elville and Associates YouTube channel to view recordings of our past webinars.

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