Authored by: Renee Q. Boyd – Senior Associate Attorney

During the estate planning process and discussions with clients, I am often asked “should I create a Last Will and Testament (Will) or should I create a Revocable Living Trust (Revocable Trust)?”.  While both documents are effective estate planning tools to use to indicate who will receive your assets, Wills and Revocable Living Trusts have different and specific benefits.

All estate planning should begin with assessing your current situation, your goals and your needs.  After this assessment is complete, the next step is to determine which tool can best help you meet your goals and protect your family.  It is not a matter that one tool is better than the other.  The decision of whether to use a Will or a Revocable Trust should be based on your goals and other factors such as the size of your estate, the complexity of your distribution wishes, your need for privacy over your assets, your property and your estate planning budget.

Wills:

Wills are simple legal documents that provide instructions of how to distribute property and assets to beneficiaries after your death.  Think of a Will as a set of instructions for after you are gone.  Wills do not go into effect until after you pass away.

All assets that are transferred to your beneficiaries via a Will must go through the probate process before they are distributed.  Probate is a legal process, supervised by a court, in which the Will is first proven to be valid and then accepted into probate.  The person you name in your Will to administer your wishes, your Personal Representative, must go to the probate court in the county in which your resided when you died and file the Will for probate.  When the Will is accepted into probate and the estate is opened by the court, your Personal Representative must also provide periodic reports on your estate’s administration to the court.  All details of your estate, including the property and assets you owned and to whom it was left, become a matter of public record.

The probate process is a court supervised process which can be lengthy and expensive.  Legal fees, Personal Representative fees, and other estate administration costs must be paid before assets can be distributed to your beneficiaries.  Depending on the state and on the complexity of your circumstances, this process can easily take nine to 24 months to complete, and your assets can’t be distributed to your beneficiaries until it is complete.

It is important to keep in mind, however, that it is only your assets that are to be distributed via your Will that are subject to this probate process.  Assets that bypass the probate process are considered non-probate property and are paid directly to the beneficiary or co-owner upon your death.  These non-probate assets include:

• Property that is jointly owned, with survivorship rights. When one owner dies, the other owner automatically gets the deceased owner’s interest in the property.
• Property with a named beneficiary. Common examples include life insurance policies, IRAs and 401(k) accounts.  Upon the death of the account or policy owner, the assets are paid directly to the beneficiary.
• Other accounts, such as bank accounts, with a payable on death (POD) designation or property, such as vehicles, with a transfer on death (TOD) designation.
• Assets that are either titled in the name of a trust or designate the trust as the beneficiary. Many people set up Revocable Trusts specifically to avoid probate.

Revocable Trusts:

A Revocable Trust is another estate planning tool and can be used as an alternative to a Will.  While living trusts can be revocable or irrevocable, Revocable Trusts are the most used type of trust for estate planning purposes because they allow you to maintain control over your trust and make changes to it during your lifetime.  Because you maintain control over the assets in a Revocable Trust, these assets are part of your estate.

A Revocable Trust has key benefits not available with a Will which should be considered in determining which tool is the best solution to meet your estate planning goals.  These benefits include:

• Revocable Trusts avoid probate. One of the most attractive features of a Revocable Trust it that assets held in it are not subject to the probate process and can be distributed to your beneficiaries, according to your wishes, without court oversight.  Your property is distributed according to the terms of your trust and the trust allows the assets to be distributed to the beneficiaries faster than if they were subject to the probate process.
• Revocable Trusts can avoid multiple probate processes if you own real property in more than one state when you die. Ancillary probate is a type of probate proceeding that must occur in addition to the primary probate proceeding, usually as a result of owning property outside of the state in which you resided when you passed away.  Ancillary probate becomes necessary because the probate court in the home state does not have legal jurisdiction over the out-of-state property.  This is avoided with a Revocable Trust because assets and property owned by the Trust pass directly to the beneficiaries without going through probate.
• Revocable Trusts maintain your privacy. A Revocable Trust is a private document that is not filed with or reported to any supervising authority.  It remains confidential during your life and after you die.
• Revocable Trusts maintain control of your assets if you become incapacitated. Unlike Wills that do not become effective until you die, a Revocable Trust is effective immediately upon executing it.  If you become incapacitated and are unable to manage and control your property, assets that have been placed in your Revocable Trust will be managed and can be controlled by someone you have previously and purposefully named to serve in that role.  This named person can immediately step in and manage your property, without requiring court intervention.

The person who creates the Revocable Trust is the grantor.  The Revocable Trust is a legal agreement in which the grantor defines the purpose of the trust, the types of assets that can held in the trust, the duties and responsibilities of the trustee and the beneficiaries who will receive the trust assets when the grantor dies. The trustee is the person who is responsible for the assets in the trust on behalf of your beneficiaries.  Because the trust is revocable, the grantor can retain complete control over the trust assets during his or her lifetime, can change beneficiaries, or even revoke the trust entirely.  The grantor can appoint him or herself as the trustee or can assign a third party to serve as trustee.

The Revocable Trust is in existence during your lifetime.  Once the Revocable Trust is established, the grantor (you) transfers assets and property into the trust, making the trust the owner.  This is known as funding the trust.  You, however, remain in complete control of the assets and property during your lifetime. And during your lifetime, the Revocable Trust does not require a separate tax identification number or the filing of a separate tax return.

While a Revocable Trust is an estate planning tool that is an alternative to a Will, it is strongly recommended that if you use a Revocable Trust, you also create a Will.  This is known as a Pour-Over Will and it works in conjunction with the Trust.  This Will covers assets that the grantor did not put into the Revocable Trust before their death, whether by accident or on purpose.  The Pour-Over Will directs that these assets go to the Revocable Trust (are “poured over” to the Trust) and be distributed according to the grantor’s intentions contained in the Trust.

Summary:

In summary, it is not a matter that a Will or a Revocable Trust is the better option.  It is a matter of which tool will best help you achieve your estate planning goals.  First, define what your goals are and what is of most importance to you.  Both Wills and Revocable Trusts are excellent tools.  The tool that is best for you must consider:

• Your estate planning timeline – how quickly you need put an estate plan in place
• Your estate planning budget
• Your level of assets
• Do you want to keep ownership of your assets and property before you die?
• Level of ease or difficulty in administering your estate after you die
• Privacy concerns

To begin the estate planning process, schedule a no-cost consultation with one of our estate planning attorneys at Elville and Associates.  During that meeting, we will work with you to define and understand your goals, answer your questions and create a plan together that best meets your needs and addresses your concerns.

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Authored by:  Jeffrey D. Stauffer – Community Relations Director

Stephen Elville, Managing Principal and Lead Attorney of Elville and Associates, P.C., has been selected to the 2024 Maryland Super Lawyers List. Each year, no more than five percent of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor.  This is Mr. Elville’s ninth year being named to the Maryland Super Lawyers List and eighth consecutive year as well.      

Mr. Elville works with individuals and families to provide a unique attorney-client experience and peace of mind solutions to the challenges they face with estate planning, elder law, special needs planning, asset protection, tax planning matters, and more.  Mr. Elville has extensive experience in working with clients involved in crisis situations, and also brings a unique and personalized approach to pre-crisis planning.  Along with his work in the aforementioned areas, Mr. Elville’s maintains a focus in the areas of asset protection, tax planning, and disability and long-term care planning as well.  He is widely regarded as one of the preeminent attorneys in the State of Maryland and beyond for his legal-technical knowledge and ability to navigate many different types of legal matters for clients.  He is a seasoned speaker, and each year presents by way of dozens of webinars, workshops for businesses and their employees, conferences, and continuing education events. 

Mr. Elville is currently a member of the National Association of Elder Law Attorneys (NAELA), Elder Counsel, Wealth Counsel, the Academy of Special Needs Planners, and the National Network of Estate Planning Attorneys.  He is the past Chair of the Howard County Bar Association Estates & Trusts and Elder Law Sections and is the past President of the Coalition of Geriatric Services (COGS). Mr. Elville has also served as Chair of the Elder Law and Disability Rights Section Council of the Maryland State Bar Association and was the longtime Chair for Law Day Maryland.  

Currently, Mr. Elville serves as the Chair of the Pro Bono Subcommittee of the Elder Law Disability Rights Section Council.  He is also the President of the Friends of Baltimore Classical Music, Inc., and is the Founder of the Elville Center for the Creative Arts, Inc., a non-profit organization developed in 2014 that works to further music education in schools and other organizations that have student musicians with limited means.  He is also the Founder and Owner of Elville Studios, LLC.

Shannon Goodwin, a Senior Associate Attorney with Elville and Associates, was named to the Rising Stars List for the first time in 2024.  She is the Leader of the firm’s busy Estate and Trust Administration Department, and has quickly shown the scope and depth of her talents and abilities in the complex world of estates and trusts.  Through her guidance, she partners with clients as they address the sometimes challenging matters of the administration of loved ones’ estates from start to finish, including helping navigate the probate process, inventory and reportings, accountings, and much more.

After her undergraduate work at North Carolina State University, Ms. Goodwin participated in multiple internships and externships and went on to distinguish herself as a member of the Syracuse Law Review. Upon graduating from law school, Shannon gained valuable experience by working as a Judicial Law Clerk for three years in the Circuit Court for Washington County, as well as in the District Court for both Washington and Frederick Counties. Shannon then transitioned to private practice and joined Elville and Associates in 2021.

Shannon Werbeck, a Senior Associate Attorney with Elville and Associates, was named to the Rising Stars List for a second consecutive year in 2024.  She is an integral member and one of Leaders of the firm’s Estate Planning Department.  She educates and counsels clients through the entire estate planning process – beginning with the initial consultation, followed by the design and implementation of their plans, as well as the necessary maintenance and updating of their planning as changes occur in the laws and their lives.  Ms. Werbeck’s practice focus includes estate planning, elder law, special needs planning, and tax planning.

During law school, Ms. Werbeck participated in the Human Trafficking Prevention Project Clinic where she diligently represented victims of human trafficking as a Rule 19 Student Attorney. Upon obtaining her Juris Doctor, Ms. Werbeck gained valuable experience by working as a Judicial Law Clerk for Magistrates Susan M. Marzetta and Lori Joy Eisner in the Circuit Court for Baltimore City. Prior to settling in at Elville and Associates, Ms. Werbeck worked as an Associate Attorney at a small law firm in Towson, Maryland where she represented clients in Family Law and Criminal Law matters.

Renee Boyd, a Senior Associate Attorney with Elville and Associates, was named to the Rising Stars List for the first time in 2024.  Ms. Boyd partners with clients in the firm’s busy Estate Planning Department to address all aspects of estate planning, including the initial drafting of wills, trusts, advance directives, and powers of attorney, as well as the continued revision and updates of those documents as changes occur in the laws and their lives. During the estate planning process she helps educate clients and provide them a comprehensive client experience throughout.  Ms. Boyd’s past work as a Certified Financial Planner® enables her to offer a unique perspective in working with clients during the estate planning process and she draws from her experience in helping clients achieve their financial planning goals.  Ms. Boyd’s practice focus includes estate planning, elder law, and asset protection.  

During law school, Ms. Boyd began her work in law as a Family Law Attorney Extern with the Law Offices of Juliet Fisher.  During this experience she developed skills in the areas of client counseling, preparation of motions and briefs, legal research and strategy planning.  She then transitioned to the Orphans’ Court of Baltimore County where she worked as a judicial assistant and oversaw the Mediation Program which strived to bring successful resolution to estate administration disputes through discussion rather than litigation.  At that same time she also provided research and administrative support to three probate court judges.

Ms. Boyd’s prior professional experience tells a story of successful client relationship and business development in the financial services arena spanning over 20 years.  As Director of Strategic Services and the College Savings Plan Business at T. Rowe Price, she oversaw and managed multiple enterprise-wide strategic initiatives designed to enhance growth, profitability, and overall client satisfaction for both internal and external clients.  As a Managing Consultant and Program Manager at BridgePoint Group, she planned and led Financial Services clients projects in the area of employee benefits to ensure business goals were achieved.  She also fulfilled the roles of coach, motivator and leader as she developed proposals for projects, and performed risk analysis and managed change control.

To learn more about this year’s honorees and the entire team at Elville and Associates, please click here.  To learn more about Elville and Associates, its practice areas, its commitment to client education, and events calendar, please visit www.elvilleassociates.com.  

Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. The result is a credible, comprehensive and diverse listing of exceptional attorneys. 

The Super Lawyers lists are published nationwide in Super Lawyers Magazines and in leading city and regional magazines and newspapers across the country. Super Lawyers Magazines also feature editorial profiles of attorneys who embody excellence in the practice of law. For more information about Super Lawyers, visit SuperLawyers.com.

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Authored by: Jeffrey D. Stauffer – Community Relations Director

Elville and Associates, P.C. is proud to announce and welcome Lillian (Lilly) Hummel as a Principal Attorney with the firm. Lilly will lead the firm’s soon-to-be-established Montgomery County office.

Licensed in Maryland and the District of Columbia, Lilly maintains her practice focus in elder law, estate planning, estate and trust administration, and special needs planning. Lilly counsels individuals and families about eligibility for Medicaid and other programs for seniors and individuals with disabilities; navigating long-term care; and establishing and administering special needs trusts. She also represents clients in guardianship matters.

Lilly is currently the Chair of the Elder Law Section of the Bar Association of Montgomery County and a Council Member of the Elder and Disability Section of the Maryland State Bar Association. She is also a member of the Academy of Special Needs Planners and the National Academy of Elder Law Attorneys.

Reflecting on joining Elville and Associates, Lilly shared, “I’m delighted to join Elville and Associates, and lead the firm’s expanded presence in Montgomery County. Elville and Associates is a leader in estate planning, with a particular focus on elder law and special needs planning. This focus aligns perfectly with my own interest in advising clients on the intersection of estate planning and benefits eligibility.”

With her commitment to clients, vast array of legal knowledge, and innate leadership ability, we could not be more excited for Lilly to join our team here at our expanding firm. Please join us in welcoming Lilly to Elville and Associates!

Lilly can be reached at lilly@elvilleassociates.com, or by phone at 240-583-7990

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Authored by: Stephen R. Elville, J.D., LL.M. – Managing Principal and Lead Attorney

Summertime fun and visions of running through daisies in slow motion – NOT!

It’s another perfect June day as I write this brief blog. Many of us who love summer take to the warm air like fish to water and count each day as a bit of nirvana. But not so fast! Having presented on the Corporate Transparency Act twice in the past week and a half, my brain is on overload trying to figure out how in the world attorneys, CPAs, financial advisors, CFOs, and other professionals will be able to disseminate the nature, origin, purpose, critical definitions, requirements, and who is to report and who is exempt, both now and by the end of 2024 to save clients, business owners, family, friends, and those in spheres of influence, from the embarrassment and penalties for non-compliance with the CTA.

If you are like me, having to discuss and deal with the Corporate Transparency Act is akin to having to go to the dentist on a rainy day, something unpleasant mixed with a healthy amount of uncertainty. Well, we may as well reach for some form of mental analgesic, or laughing gas, your choice, and face the music.

If you or anyone you know has formed an LLC or other entity that is required to report under the Corporate Transparency Act, compliance is required within 90 days of that formation in 2024. For those persons required to report for entities formed prior to 2024, reporting must occur prior to December 31, 2024. And lastly, for those required to report for entities formed after January 1, 2025, reporting must occur within 30 days. Penalties of up to $500 per day, unlimited, for noncompliance apply, and criminal penalties of up to $10,000 apply.

The Corporate Transparency Act is no joke, and as we are now at mid-year 2024 it’s essential that the requirements of this new law designed to combat money laundering, terrorism, and fraud, be disseminated as widely as possible.

Whether you are planting daisies this summer or running through fields of them, be sure not to trip up by failing to understand the reporting requirements of the CTA because doing so could hurt.

If you would like to know more about the Corporate Transparency Act, please reply by clicking this link contact us, and we will be happy to send you a link to my recent webinar about this important issue.

Posted in Blog, Spotlight | Comments Off on The Corporate Transparency Act – It’s No Joke!

Authored by: Jeffrey D. Stauffer – Community Relations Director

Managing Principal Stephen R. Elville and Elville and Associates are pleased to announce that attorney Shannon Goodwin has been promoted to Principal with the firm.

Ms. Goodwin joined Elville and Associates as an Associate Attorney in 2021 and was promoted to Senior Associate Attorney soon thereafter.  Over the past three years, as the Leader of the firm’s busy Estate and Trust Administration Department she has quickly shown the scope and depth of her talents and knowledge in the complex world of estates and trusts.  She partners with and counsels clients as they address the sometimes challenging matters of the administration of loved ones’ estates from start to finish, including helping navigate the probate process, inventory and reportings, accountings, and much more.

After her undergraduate work at North Carolina State University, Shannon participated in multiple internships and externships and distinguished herself as a member of the Syracuse Law Review. Upon graduating from law school, she gained valuable experience by working as a Judicial Law Clerk for three years in the Circuit Court for Washington County, as well as in the District Court for both Washington and Frederick Counties. Shannon then transitioned to private practice and joined Elville and Associates in 2021.

In 2024, Shannon was named to the Maryland Rising Stars List by Super Lawyers.  Each year, no more than 2.5 percent of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor.

Shannon can be reached at sgoodwin@elvilleassociates.com, or by phone at 443-393-7696 x116 and always looks forward to meeting new advisors and speaking with individuals and families about their estate and trust administration matters.

#elvilleeducation

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Authored by: Stephen R. Elville, J.D., LL.M. – Managing Principal and Lead Attorney

It’s spring and the cool weather has brought us misty mornings with cadmium green bursting through the umber and sap green backgrounds of our highways, backyards, and parks. At the same time the magnolia, cherry, and other blossoms have exploded onto the scene, reminding us that it’s the time of year for renewal and spring cleanup!

It’s also a good time in this second quarter of the year to remind yourselves that the old estate plan documents that might be occupying your closet, safe, or safe deposit box may need to be updated. And while you may put off a certain home improvement or yard project or some personal goal, it’s never a good idea to put off reviewing your existing estate plan or implementing estate planning for the first time. And when you do so, you will find through proper counseling and education that the world of estate planning has changed, evolved, morphed into the kind of structured planning that can make sense to you and your family, and beyond that provide flexibility and a foundation for future contingencies beyond what traditionally was imagined.

How do I know this? Because I have spent the last 24 years educating clients and their families about estate planning, elder care-related, special needs-related, and business-related estate planning concepts that once understood give power, purpose, and vitality to an estate plan. This truly is not the estate plan of your parents or grandparents, and the changes and improvements in the planning possibilities that are available to you today versus what were available 50 years ago may astonish you. All it takes is some dedicated time, focus, and a commitment to your future and the future of your family. You can do it. And Elville and Associates is here to help you.

To get started with your estate planning or estate planning review process, or for information and video links about Elville and Associates, please send an email to Community Relations Director Jeff Stauffer at jeff@elvilleassociates.com or call 443-393-7696 x117. You can also request to be contacted here and also visit our website at www.elvilleassociates.com.

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The aging population is expected to transfer $30 trillion in the coming years, per Forbes. According to the Survey of Consumer Finances, the median inheritance is $69,000; the median for trust fund wealth transfers is $285,000.

Many individuals planning their legacies wish to provide for their families and loved ones. Yet an Ohio State University study determined that those who receive an inheritance spend half. One-third of those who received an inheritance spent it all within two years and had negative savings. That said, a typical inheritance may not provide sustained financial security to beneficiaries.

Creating a spendthrift trust in Maryland for your loved one can limit their spending and protect wealth. While a spendthrift trust may come at the expense of their autonomy, it can provide them with greater financial security.

What Is a Spendthrift Trust in Maryland?

A spendthrift trust in Maryland protects beneficiaries who may need help managing their finances responsibly. The trust preserves the beneficiary’s inheritance for use over an extended period. A Spendthrift trust works by giving a trustee, rather than the beneficiary, the power to make financial decisions. The trustee manages the trust assets and distributes funds to the beneficiary for their needs and support.
The trust’s terms outline the trustee’s discretion in making distributions, which can be limited or flexible. The creator of the spendthrift trust, or grantor, may leave the timing and amount of distributions up to the trustee. Or, they may opt to establish a fixed schedule. These restrictions prevent the beneficiary from squandering the assets.

The Spendthrift Clause

An essential feature of a spendthrift trust in Maryland is the spendthrift clause, which protects the contents of the trust. Under the clause, the beneficiary cannot satisfy debts with their interest in the trust. Should the beneficiary have debts or a civil judgment against them, the creditors cannot obtain the trust assets.

Why Would Someone Create a Spendthrift Trust in Maryland?

You may want to provide for a loved one but have concerns about how they will use the money. This is where a spendthrift trust can serve as a suitable option. A spendthrift trust in Maryland can benefit the following individuals:

• Children – Parents often have concerns about how their minor and young adult children will use an inheritance. Minors typically need more life experience to make independent financial decisions. Some parents want to provide for college-age adult children but worry about giving them full access to the funds. Parents can determine when their children receive the funds (for instance, when the child reaches a certain age).
• People who are not good with money – Some adults struggle with financial planning and impulse control. For these individuals, a spendthrift trust can ensure a steady source of support.
• Vulnerable individuals – People who are susceptible to external influences that threaten their financial well-being can benefit from the security and structure of a spendthrift trust. If your loved one has been taken advantage of before, you may worry that they will be exposed to improper influence again.
• Those with addiction disorders – A spendthrift trust could prevent a beneficiary from exhausting the trust fund to support an addiction to gambling, illicit substances, or compulsive spending.

What Are the Benefits of a Spendthrift Trust in Maryland?

A Spendthrift trust in Maryland has several benefits:

• Shielding assets from creditors and lawsuits.
• Providing your loved one steady income stream without allowing them to exhaust the trust through overspending. This can be particularly helpful if you have concerns about your loved one’s ability to make money independently.
• Preserving generational wealth and preventing your loved one from blowing a significant portion of their inheritance.
• Encouraging responsible money habits. Providing a younger person with full access to the trust only after they turn 21 can help them develop budgeting skills. Likewise, you may choose to limit them to a certain amount of monthly income.

Consult With an Attorney

If you want to learn more about creating a spendthrift trust in Maryland to provide for your loved ones, consult with the estate planning and elder law attorneys at Elville and Associates. Through a complimentary consultation, your attorney will listen to you and learn about your situation, offer education and counseling, answer your specific questions, and create solutions and a path forward for you.

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Your most valuable property may be your home, which is true for many people, and you likely want your children to inherit that value when you pass away.

However, you may also have concerns about planning for the future, especially if your health declines and you need expensive long-term care. You may be aware that Medicaid can pay for these services. Though, Medicaid rules say you can own no more than around $2,000 in assets to be eligible – so now what?

Medicaid Planning Using an Irrevocable Trust

One viable solution is to take your home out of your name while reserving your right to live in it. This is possible with a carefully drafted irrevocable trust, sometimes known as a Medicaid Asset Protection Trust.

Putting the house in the ownership of a Medicaid Asset Protection Trust could prevent Medicaid penalties and ensure reimbursement of health expenses. It all depends on whether your health continues to keep you out of long-term care for the next five consecutive years.

A Medicaid Asset Protection Trust has numerous other advantages, one of which is to avoid probate proceedings. Trusts are private agreements that usually require no court supervision. So, signing away valuable property can feel like a major step, but it keeps your living situation unchanged and can pay off in the long run.

Avoiding Capital Gains Taxes

But suppose you later decide to sell the house and move into a smaller place. That could pose a capital-gains tax problem. If the trust hasn’t been carefully drafted, and it (not you) sells the home, the personal residence exemption would be lost. Capital gains tax could be prohibitive if the house has appreciated in value since the date of purchase.

A similar problem arises when it comes time for your children to inherit. If the trust is not carefully drafted to cover this eventuality, your heirs will lose the basis-adjustment tax break, which could cost them dearly. The basis adjustment allows the inherited value of the home, for capital-gains purposes, to be calculated not from the date you originally purchased the home but from the date your heirs inherit the property.

For example, imagine you paid $100,000 for your house in 1980, and it was well-maintained; when you pass away, the house is worth $300,000. Now, suppose the home is titled in the trust name, but the trust wasn’t written carefully to preserve the basis adjustment that would otherwise be allowed for inherited property. If the children sell the home for $350,000 in those circumstances, they would have made a taxable profit of around $250,000.

With the basis adjustment, however, profit would be calculated from the $300,000 mark as of the date of inheritance. This would leave your children with a tax bill on the $50,000 profit, not $250,000. This tax advantage comes from “stepping up” the taxable basis to the market price at the time of inheritance. As a result, your family receives more value by having to pay less taxes.

Protecting Your Assets for Heirs with a Medicaid Asset Protection Trust

First, the irrevocable trust takes the home out of your name and, instead, titles it to the trust. Medicaid rules view the owner of the property as the trust, not you, and that’s why you want to reduce your assets and qualify for Medicaid assistance.

Next, to preserve the personal residence capital-gains exemption, an irrevocable trust creates what’s known as grantor trust tax rules. Current tax rules allow property owned by this kind of trust to remain part of your estate for tax purposes and exempt from capital gains up to specified value limits, depending on your state and whether you file single or jointly as a married couple.

Even though the Medicaid Asset Protection Trust has ownership, you are still allowed to take the personal residence exemption. For capital gains, the IRS disregards the trust. However, as of 2023, assets transferred to an irrevocable trust before your death that are not subject to estate tax will not receive a step-up in basis.

To minimize your heirs’ exposure to capital gains tax in the future, the trust also provides a limited testamentary power of appointment. The appointment power permits you to designate someone with the authority to disburse your assets to chosen beneficiaries, provided those beneficiaries are limited to family or charities.

The limited power of appointment allows your assets to pass down to beneficiaries while preserving eligibility for both the tax basis adjustment and Medicaid.

The right estate planning strategies neatly solve Medicaid planning and tax issues by:

• Transferring the house title to the irrevocable trust while retaining your right to live in it, avoiding Medicaid penalties or reimbursement problems after five years
• Creating grantor trust status to preserve the residence exemption, avoiding capital gains tax on the sale during your lifetime
• On your death, the adjusted-basis tax break is preserved by designating a person or entity to administer the assets in the trust

The attorneys at Elville and Associates carefully draft these trusts to comply with current rules regarding ownership and taxes to prepare for Medicaid eligibility and protect your assets for your family.

Consult With Your Estate Planning/Elder Law Attorney

You may have a will, but it may not be able to protect your assets unless it becomes part of an estate plan that includes an irrevocable trust.

Your estate planning/elder law attorney may find that your will or estate plan isn’t Medicaid-qualified or that it lacks provisions for a grantor trust or the necessary powers of attorney. However, this is not a reason to worry, as an irrevocable trust can be changed.

Trusts that fail to account for various contingencies can happen if your attorney is not qualified to draft more complex documents nor if they don’t discuss your goals and plans with you through the estate planning process. Many states have passed legislation permitting the alteration of trusts for tax reasons, even if the trusts are nominally irrevocable. 

Set a consultation with the attorneys at Elville and Associates to discuss if a Medicaid Asset Protection Trust is right for your family and your situation. They’ll work with you to understand your situation, answer your specific questions, and create solutions and a path forward for you.   

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Today, more than 18 million American military veterans are living in the United States. To address the needs of this population, the U.S. Department of Veterans Affairs (VA) has expanded health, education, home loan, and other veteran benefits over the years.

VA disability payments are one of the most common entitlements veterans overlook. However, they are often one of the most essential to their well-being. Among the reasons that veterans miss out on VA disability benefits are the following:

• Confusion about the types of benefit programs and how to qualify
• Complexity of the application process
• Previous claim denial

Understanding How to Qualify as a Disabled Veteran

One misconception is that combat operations involvement is a requirement to be eligible. To qualify for VA compensation or disability, a veteran does not need to have seen combat. They also do not have to have an orthopedic condition such as missing limbs or damaged muscles.

Any veteran whose service received an honorable discharge from active-duty military service may qualify for VA compensation or disability benefits. Those who are eligible also include individuals in the National Guard or Reserve mobilized or activated for service.

You may currently cope with a condition or an illness that affects your mind or body and links back to your military service. In that case, you may have criteria qualifying you to receive a VA Disability Rating. Even common conditions like back or knee pain, GERD, PTSD, and more may relate to your military service.

Your service may cause problems that develop years later, like exposure to environmental toxins or Agent Orange. Even without active-duty medical records, these medical conditions can be service-connected by your physician and attorney. Whether your military service directly caused or only aggravated your disability, it is worth determining whether you merit service-connected disability benefits.

Have Your Attorney Handle All the Paperwork

Undergoing a claims process for VA disability benefits can be lengthy and daunting. Sadly, many veterans give up once they see the application. Free government services exist that help guide veterans through the proper paperwork. However, meeting with these service providers can sometimes be difficult because of high caseloads.

A negative first experience may cause significant delays, turning a veteran away from the process and much-needed benefits. A VA-accredited attorney with Elville and Associates can prove essential to your application’s success. They can be responsible for filling out the application correctly, attaching necessary documents, and submitting them ahead of deadlines.

Disability Claim Denial

It can be disheartening to receive an application denial. However, denials are often a result of filing incorrect forms or missing important application deadlines. It isn’t easy to know which documents are appropriate, especially if you have previously faced a denial of benefits.

A general appeal form to amend an initial denial contains various options that can further complicate your appeal. Your attorney will understand the highly sensitive nature of disability claims and the timing for Intent to File, Presumptive Period, and other appeal or supplemental claims. Failure to meet claim deadlines can result in continued denial of benefits.

Compensation and Pension (C&P) Exam

After overcoming complex claims paperwork and submitting all requirements, veterans may face another hurdle. The VA may schedule a Compensation and Pension (C&P) Examination.

The VA may require a veteran seeking disability benefits to have this medical exam, which assesses the severity of the veteran’s condition. The VA can deny a veteran’s application if they do not attend the evaluations. Results of the C&P Examination become part of your file, and attendance is crucial for claim approval.

Confusing Disability With Other VA Benefits

VA disability benefits do not prohibit employment. Veterans may confuse disability benefits with a VA program called Total Disability Individual Unemployability (TDIU). To qualify for TDIU, a veteran must be unable to keep or obtain a job. Veterans with a VA rating for a disability can receive benefits and still maintain employment without limitation.

Often a veteran will confuse Social Security Disability benefits with VA service-connected disability benefits. These are two separate programs, and you can be eligible for both. Qualifying for Social Security disability benefits will not automatically make a veteran eligible for VA disability benefits, and vice versa.

Mental health claims and treatment can also create confusing issues for veterans regarding their legal rights. A VA mental health rating and mental incompetence are not the same things. A VA rating for mental health will not put a veteran at risk of losing constitutionally protected rights. There are instances where an individual can be mentally incompetent without the presence of depression, anxiety related to chronic pain, or PTSD.

Mental health benefit claims are as important and valid as physical claims. Before you discount these powerful claims, consult with your attorney. They can help you understand your situation and protect benefits that may be due to you.

Filing VA claims can be stressful, particularly when you have a limited understanding of the forms, procedures, and deadlines. Other complex legal issues can also lead to benefits claim denials. Be sure to take a practical approach to processing applications that maximizes your ability to qualify and secure approval. US military veterans seeking VA disability have a much better chance at success with the guidance of an attorney, so be sure to seek guidance and counsel from the attorneys at Elville and Associates for peace of mind and a more seamless process from start to end.

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