By:  Jeffrey D. Stauffer

– Community Relations Director, jeff@elvilleassociates.com

Because the estate planning team at Elville and Associates strives to continue to be on the leading edge of maintenance and updating to ensure planning works as intended, the entire planning team will be attending the Client Maintenance Academy in Wakefield, Massachusetts on May 5th & 6th.

By attending this unique program, Elville and Associates will be assured to have the very best maintenance and updating program available in the country for its clients — and be one of 41 estate planning law firms in the country accredited with these services and knowledge.

Any client or planning team partner who has worked with Elville and Associates knows that the firm approaches estate planning as more than just a simple one-time transaction. At Elville and Associates, we consider this one-time transaction approach to planning the “traditional estate planning” approach – which generally leads to plan failure. In this process, attorneys tend to treat estate planning simply as the set of documents – with no maintenance or updating. In other words, the documents ARE the client’s estate plan. Most firms approach planning in this manner, and we simply have a different approach to how planning should be done for the benefit of our clients and their families.

Elville and Associates approaches planning as a three-step process: the design and implementation of the plan, continual maintenance and updating through the years, and final administration. This “Legacy Planning” and “Caring for Clients” model incorporates the three phases of planning and maintains a strong emphasis on education from the first meeting through the life of the plan, including the all-important continual maintenance and updating the plan will require to ensure the plan will work as intended when necessary.

For more information about the Client Maintenance Academy, please visit www.clientmaintenanceacademy.com.

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By:  Jeffrey D. Stauffer, Director — The Elville Center for the Creative Arts, jeff@elvillecenter.org, 443-393-7696
Over the past 18 months, Stephen Elville and Elville and Associates, P.C. have been very pleased with the growth of the firm’s charitable organization, The Elville Center for the Creative Arts, Inc. Now, we announce the launch of the charity’s website, www.elvillecenter.org, as well as its LinkedIn page. Be sure to check out both for the latest news and learn how you can make a musical difference in the life of a child today. We thank you for your support! A special thanks to Pablo Calvo of Plugin Group for his partnership and efforts in developing the site for us.

The mission of The Elville Center for the Creative Arts is to improve the quality of life of children of all ages by providing them the opportunity to learn music theory and application, experience cultural events related to the musical and creative arts, and to use music and the promotion of music-related activities to transcend social and economic divisions.

We are partnering with local and regional businesses and schools’ music programs to provide musical instruments, rentals, music lessons, funding for field trips and other participation in music-related activities for children of all ages.

The Elville Center is actively seeking monetary pledges and donations of used instruments of any kind, which will be refurbished (Donations may be tax-deductible. Please consult with your tax advisor.)

Thank you again for your support of The Elville Center for the Creative Arts!

For more information, please call 443-393-7696 or complete the form below.

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By:  Olivia R. Holcombe-Volke, Esq. – olivia@elvilleassociates.com, 443-393-7696

Last week’s historic snow storm drives home the importance of having estate planning documents in place, including not only a Last Will and Testament or Trust agreement that dictates the disposition of assets after death, but, perhaps more importantly, an Advance Medical Directive (also called a Living Will) and Financial Power of Attorney, both of which serve to appoint and direct Agents to act on one’s behalf during life.

Hopefully, most of us made it through this remarkable weather event with only the minor (or sometimes major) headaches of increased traffic, snow shoveling, and missed work or school. But any number of unfortunate realities could have resulted from Mother Nature’s antics – traffic accidents, health issues arising from snow shoveling, and the like.

Many clients seek the services of an estate planning attorney before travel; the risk of an airplane crash or a situation arising in an unfamiliar location inspires many of us to get our ducks in a row. But what about the much more likely and equally risky situations that can arise in daily life? In the midst of last Saturday’s blizzard, would anyone have wanted to risk a medical situation coming up and no health care agent being designated to act on their behalf? Or no financial agent being designated to pay the expenses associated with just such an emergency medical situation? Not to mention the increased risk of losing one’s life – a terrifying possibility, in and of itself – but for that to happen, without a Will or Trust in place to ease the burden upon those loved ones left behind, makes a tragic situation that much more so.

If you don’t have documents in place, or if your documents need updating, make an appointment with Elville & Associates today. Whether an epic snowstorm, a freak accident, or simply the increased probability of something happening with the passing of time, life is full of unexpected situations. Don’t leave such important details as your health, finances, or ultimate disposition of assets without a plan.

For more information, please call 443-393-7696 or complete the form below.

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By: Jeffrey Stauffer, Community Relations Director – jeff@elvilleassociates.com, 443-393-7696

Mr. Stephen R. Elville, principal and lead attorney at the elder law, estate and special needs planning firm of Elville and Associates, P.C., is attending The National Academy of Elder Law Attorneys Summit January 28-30 in Newport Beach, California.

Hosted by the National Academy of Elder Law Attorneys (NAELA), this yearly elder and special needs law event engages attendees beyond a lecture by offering discussion, debate, and applications for the information provided in each session. Session titles include: “How My Communication Style Can Help My Bottom Line”; “Skills and Law When Serving Clients with Diminished Capacity”; and “Navigating Trustees of Special Needs Trusts (SNT) Through Rough Waters.”

Earlier in January, Mr. Elville attended the weeklong Heckerling Institute’s Symposium on Estate Planning in Orlando, Florida. Now in its 50th year, the Heckerling Institute is not only the leading continuing education program for estate planners, but also the national gathering place for all members of the estate planning team, including attorneys, trust officers, accountants, charitable giving professionals, insurance advisors, elder law specialists, wealth management professionals, educators and nonprofit advisors. In addition to the highest quality educational programming, attendees enjoyed valuable networking and professional development opportunities and reviewed the latest in technology, products and services displayed by nearly 150 vendors in an exhibit hall dedicated entirely to the estate planning industry.

Among the topics of discussion throughout the week were: tax and non-tax planning issues, what lies ahead and suggested useful planning strategies for the future; a review of significant estate planning developments in 2015; strategies for marital planning; an examination of the legal and political developments that define today’s Supreme Court; planning for same-sex and unmarried couples; asset protection planning; and planning for the increasing interplay among wealth transfer tax, income tax, and investment tax.
Mr. Elville attends these national events on a yearly basis along with other seminars to be at the forefront of the key, contemporary issues in elder law, estate and special needs planning.

Mr. Elville’s work is centered in these areas with special emphasis in the areas of tax planning and asset protection. He earned his law degrees from the University of Baltimore, cum laude, and is a member of the NAELA, The Academy of Special Needs Planners and the National Network of Estate Planning Attorneys, among numerous other organizations. Mr. Elville currently serves as a member of the Maryland State Bar Association Elder Law Section Council and the Charitable Gift Planning Advisory Committee for Anne Arundel Medical Center. He works with individuals and families to provide peace of mind and a unique attorney-client experience through a proactive and collaborative approach based on leading edge legal-technical knowledge.

Elville and Associates focuses on the education of its clients, planning team partners and communities in which it serves in the areas of elder law, estate and special needs planning. The firm achieves this through its mission of engaging clients in a multi-step educational process using counseling and superior legal-technical knowledge to ensure that planning works from inception, throughout lifetime, and at death. Clients are encouraged to take advantage of the Planning Team Concept for leading edge, customized planning.

The firm also regularly holds free educational workshops and seminars throughout the communities in which it serves, covering topics related to its many practice areas. Mr. Elville and Elville and Associates also hold a bi-monthly Advisors Forum series for financial advisors, CPAs, attorneys and insurance agents, which provides valuable education to planning team members about elder law, estate and special needs planning.

For more information, please call 443-393-7696 or complete the form below.

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By: David A. (Andy) Hall, Esq. – Elville and Associates – andy@elvilleassociates.com, 443-393-7696

Many times clients will come for an appointment with an elder law attorney because their spouse or parent is no longer able to communicate decisions about their health or person. This can be the result of a progressive condition such as Alzheimer’s disease, or from a sudden onset, such as a fall resulting in a traumatic brain injury (“TBI”). The consequence can be the same if the alleged disabled person (“ADP”) does not have a healthcare power of attorney (“POA”) or advance medical directive (“AMD”) in place. Many Americans do not have incapacity planning documents — which can result in a guardianship of the person situation.

A healthcare POA or AMD allows the person nominated to serve as the agent for the ADP. This means that the agent can make healthcare and other personal decisions for the person that is no longer able to communicate those decisions. The most common context is making decisions about healthcare matters, i.e., whether to select a certain course or treatment, or whether to decline treatment because the ADP has made their wishes known regarding when they no longer want treatment.

Without this document, then a loved one can make decisions for the ADP pursuant to the MARYLAND HEALTH CARE DECISIONS ACT as codified in MD. CODE, Health Gen. Art. §5–605. Where the ADP has not nominated a person, then after two physicians determine that the person can no longer make decisions for himself, then the following people may serve as surrogate (in priority of the order listed):
(i) A guardian for the patient, if one has been appointed;
(ii) The patient’s spouse or domestic partner;
(iii) An adult child of the patient;
(iv) A parent of the patient;
(v) An adult brother or sister of the patient; or
(vi) A friend or other relative of the patient who meets the requirements
Id. While this statutory recognition is great for ad hoc or crisis situations, it may not be a viable long term solution for clients. Sometimes the ADP’s illness will drive them to fight against decisions which are objectively being made in their best interests. Then the loved one in that situation will want the imprimatur of a court order.

The Circuit Court in the Maryland County where the ADP resides or is admitted to receive medical treatment is the proper venue for filing for a guardianship of the person and it has the authority to appoint a guardian. Md. Rule 10-201; Estates & Trusts § 13-704(a)(2). The Petition is the document whereby a client (through her attorney) requests that the court appoint someone as guardian. Among other basic informational items, the Petition will need to include: a description of less restrictive alternatives to guardianship of the person that have been attempted and failed; facts as to the need for a guardianship; and two certificates signed by medical doctors (or one can be signed be an licensed psychologist or licensed clinical social worker) attesting to the ADP’s need for a guardianship. The timing of the certificates is important as one needs to be completed within 21 days of filing the petition. A seasoned guardianship attorney will give you a checklist of the required documents and information in order for the Petition to be accepted by the Court.

The Petitioner (the one filing for guardianship of the person) has to meet the burden of proving that the ADP:
(i) Lacks sufficient understanding or capacity to make or communicate responsible decisions concerning his person
(ii) Because of any mental disability, disease, habitual drunkenness, or addiction to drugs, and
(iii) That no less restrictive form of intervention is available which is consistent with the person’s welfare and safety
Estates & Trusts § 13-705.

The Court will appoint an attorney for the ADP, and it is very likely that the court appointed attorney will be paid out of the ADP’s assets. For a married couple, this can mean that the two parties will be paying for both sets of attorney’s fees. It can seem counter-intuitive to have to pay for an attorney to fight against you, but a guardianship of the person seeks to take away the inalienable right of self-determination regarding one’s person. A court will not do so lightly.

Consult with your fiduciary litigation attorney to go over the options regarding a loved one who can no longer make decisions for themselves and has not executed incapacity planning documents. If you have not already done so, then consult with an estate planning attorney to prepare for incapacity. It is truly a case where, as Benjamin Franklin said, “An ounce of prevention is worth a pound of cure.”

Tags: guardian, guardianship, guardianship of the person, guardianships
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Authored by: Olivia Holcombe-Volke, Esq. –

Elville and Associates

443-393-7696

olivia@elvilleassociates.com

The Maryland Statutory Power of Attorney (MSPOA) is a literal creature of statute – it is in a form that is set forth by Maryland Estates and Trust Code Section 17-202. It is statutorily mandated to be accepted by receiving institutions – if wrongly rejected, the statute provides for penalties and attorney’s fees. It is short, succinct, and in a form that is, verbatim, set forth in the statute. If a client were to choose to only sign one version of a Power of Attorney, it is this one that we recommend.

However, it is our practice to also provide a Durable General Power of Attorney (DGPOA), which is more comprehensive, and covers powers ranging from the Power to Fund Trusts, to the Power to Provide for Recreation and Travel. Importantly, it provides the Power to Gift, which is an important power for an Agent to have on behalf of a Principal in many Medicaid asset protection strategies. The Maryland Statutory Power of Attorney does not provide for the Power to Gift, and, without the explicit provision of this power, its availability is extremely questionable/limited (some would argue nonexistent). It is our practice and advice that utilizing the Durable General Power of Attorney as a supplement to the Maryland Statutory Power of Attorney serves as an additional, powerful tool for a trusted Agent to act on behalf of and protect the Principal.

For more information, please call 443-393-7696 or complete the form below.

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By Lindsay V.R. Moss, Esq. — lindsay@elvilleassociates.com

A Special Needs Trust is an important estate planning tool for persons with disabilities. A Special Needs Trust can allow for a disabled person to continue to receive public benefits while retaining a source of funds to pay for extra services and programs that government benefits do not cover. A Special Needs Trust can be set up by the disabled person, family member or court system to “hold” an inheritance. If the disabled person received an inheritance outright, said inheritance would be considered an asset, thus possibly disqualifying the disabled person from receiving needs-based public benefits. A Special Needs Trust will hold the assets in the trust, which is not controlled by the disabled person, thereby allowing the continuation of receipt of public benefits. The trust can pay for supplemental needs for the disabled person, including personal care services, dental expenses, vacations and travel, and many other needs and services that are not provided by public benefits. Contact Elville & Associates to find out more about estate planning for an individual with special needs.

For more information, please call 443-393-7696 or complete the form below.

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By: Matthew F. Penater, J.D., LL.M. — matt@elvilleassociates.com

For those of us who have established a trust, are a beneficiary of a trust, or are considering implementing a trust into our estate plan, the recent changes in trust income tax rates warrants our attention. If a trust is in existence, a review of the trust terms is recommended for the reasons outlined in this article. For trust accounting purposes, a trust consist of two components: Principal and Income. Simply put, Principal consists of the assets used to fund the trust, and Income consists of earnings on those assets (dividends, interest, etc.). However, an important deviation from this concept is the treatment of capital gain on the sale of assets – this is considered Principal, even though under the Internal Revenue Code, it is taxable income. So, we have taxable income in the form of capital gain, which is Principal, and taxable income in the form of dividends/interest, which is Income. These are the conceptual inconsistencies that send a non-professional trustee into a tail-spin.

The vast majority of trusts in existence are drafted in a way that results in the following:
•
If Income (dividends/interest) is distributed to a beneficiary during any given year, that beneficiary must report that Income on the beneficiary’s individual income tax return in that year and then personally pay the income tax thereon; and

•
If Principal (which could include capital gain) is distributed to a beneficiary during any given year, that beneficiary DOES NOT report that capital gain on his or her individual income tax return – instead, the trust reports the capital gain on the trust’s income tax return and pays the income tax thereon from the assets of the trust.

The foregoing result is due to several factors, including the language of the trust and the Internal Revenue Code. This result worked fine as generally speaking, there was no more income tax being paid by the trust than would have been paid by the beneficiary. However, the changes to the tax treatment of trusts resulting from the American Taxpayer Relief Act of 2012 has caused trusts to start paying much higher rates of tax in most cases. I promised myself I would keep this article simple and generally non-technical. So, without getting into the nitty-gritty, I can summarize the tax effect as follows: a married individual will pay the highest capital gain rate of 23.8% capital gains (which includes net investment income tax) once that married couple’s combined income reaches $457,600 for 2015; a trust will pay that same 23.8% capital gains rate once the trust has taxable income of only $12,300 for 2015. This means in general, capital gain taxed within a trust will be subject to substantially more income tax than if that same capital gain were passed out to a beneficiary and taxed to that beneficiary.

The problem is that most trusts today are not drafted to allow for the trustee to pass out the capital gain to the beneficiary, in the trustee’s discretion. There are Income Tax Regulations which provide for mechanisms on how to pass the capital gain out to a beneficiary if the terms of the trust do not address it, but those Regulations are complex and can be difficult to satisfy. The best solution is to give a trustee the discretion to allocate capital gain to a beneficiary within the trust document. The tax savings can be significant. A review of existing trust documents is the first place to start.

For more information, please call 443-393-7696 or complete the form below.

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By: David A. (Andy) Hall, Esq., andy@elvilleassociates.com

Potential clients will often come into our office because their loved one is no longer able to manage their financial affairs or health care decisions due to a disabling event or disease. One study suggests that nearly two-thirds of Americans do not have incapacity planning documents. When the disabled person does not have the proper planning documents in place (at minimum, an advance medical directive and financial power of attorney), then their loved ones are unable to make the necessary medical and financial decisions on their behalf. Often the next step for those clients is to file for guardianship of their loved one.

Many clients are often dismayed that guardianship is not a simple process. A husband will often believe that they will naturally be appointed as guardian for his disabled wife without much fuss, but the process may be much more complicated. First, the court will appoint an attorney for the “alleged disabled person”. That term of art is important because it underlines why the courts are very particular in how guardianships proceed. It is up to the “Petitioner”, the one seeking guardianship, to prove that the alleged disabled person (“ADP”) lacks the capacity to make decisions for him or herself. The court wants to make sure that the ADP indeed lacks the capacity prior to taking away that person’s rights.

The court-appointed attorney will meet with her client and ask if they wants to contest the guardianship. The ADP’s answer is critical to how the case unfolds. Sometimes this answer is driven by the ADP’s underlying medical condition and sometimes they refuse to believe that they cannot handle the decisions for themselves as they have always done. If they want to contest the guardianship, then it will proceed like a normal civil case where both parties engage in discovery and the process culminates in a trial. The ADP has a right to a trial by jury or can elect a bench trial (where the judge makes the final decision).

The process may become more complicated if someone else seeks to be appointed guardian as well. This often arises where two siblings battle over who best would care for mom or dad when they are disabled. It is possible for the litigation to be fought between three or more litigants with all sides fighting hard.

Having the right guardianship attorney on your side will help you navigate this complex area of law. It can be maddening to have to fight so hard just to help your loved one, but it’s the unfortunate side of when the proper planning documents are not in place prior to the disabling event or disease.

Tags: advance medical directive, financial power of attorney, guardianship, guardianships, incapacity planning
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By: Olivia R. Holcombe-Volke, olivia@elvilleassociates.com

Estate planning documents frequently contain vocabulary that is specific to the field of estate planning, and not commonly used by the world at large. The following list, while not comprehensive of all of the confusing or unfamiliar terms within the estate planning context, are some of the words or concepts on which I have heard the most frequent questions:

HIPAA: Health Insurance Portability and Accountability Act of 1996. This law, in part, is the privacy law that prevents healthcare workers or facilities from (among other things) sharing information contained in any part of your medical record or payment history with anyone else (with a few exceptions). This term arises in estate planning in the context of an Advance Medical Directive, where you are given the option of waiving the HIPAA privacy protections as to any person you name as a potential Agent.

Power of Attorney vs. Attorney-in-Fact: A Power of Attorney is a document, where you, as the Principal, give power of attorney to your Attorney-in-Fact (also known as your Agent).

Dispositive: Most commonly used in the phrase “dispositive provisions,” this word is the adjective form of the verb “dispose” (and of the noun “disposition”). It means that the language after it is dealing with how you wish to dispose of whatever it is you are referring to – so, in the context of a Will or Trust, how you wish to dispose of your property.

Ademption: If your Will or Trust says that at your death, you wish for your diamond tennis bracelet to go to your Aunt Sue, and, at your death, there is no diamond tennis bracelet in your ownership/estate, the gift to Aunt Sue “adeems,” and Aunt Sue can’t come after your estate with any sort of claim of wrongdoing.

Remote Contingent Distribution: Where does your estate go if all of the people you’ve named to receive it are gone at your death – if they have all predeceased you? This is a highly unlikely – a “remote” possibility – and one that will only occur IF all of your named beneficiaries are gone (it is “contingent” upon that) – but it is a remote contingent possibility that should be addressed in your Will or Trust, just in case.

Personal Representative: A Personal Representative is also known as an Executor. This is the title of the person (or corporate fiduciary) who will administer an estate under a Will.

Trustee: This is the title of the person (or corporate fiduciary) who will administer a Trust.

Interested vs. Independent trustee: An Interested Trustee is, in the simplest terms, a related or subordinate party to the beneficiary of the Trust, or to the grantor of the Trust. An Independent Trustee is not an Interested Trustee.

Well-written estate planning documents will often contain a section for definitions, given the reality of there being so many terms of art. Regardless, a good estate planning attorney should be your primary and best resource for understanding what it is that your estate planning documents actually say, so that you will know that your dispositive provisions are going to be properly administered by your Personal Representative or Trustee even in the event of a Remote Contingent Distribution.

For more information, please call 443-393-7696 or complete the form below.

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