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Avoid Probate

Did you know? You Can Avoid the Blood-Sucking Probate Process!

Did you know? You Can Avoid the Blood-Sucking Probate Process!

What Is Probate?

 Probate is the legal process of administering a person’s estate after their death. If you have a last Will and Testament, probate will involve proving that your Will is legally valid, executing your instructions and paying applicable taxes.

Having a clearly written Will is one way to make the probate process easier on your loved ones. After all, your Will doesn’t only specify who should inherit what. It also designates who you’d like to take care of your kids if both parents were to pass away, plus the executor who should fulfill the instructions in your Will.

If you die without a Will, the probate court will rely on your state’s intestate laws to figure out how to distribute the person’s belongings, or inheritance.

Click here for more information about Florida Intestate Law:


What’s Included in Probate Costs?

How much probate costs really depends on the estate size, the state you live in, and how much legal work is needed during the probate process.

Here are a few items that definitely come with a price tag:

  • Executor Compensation – Carrying out these duties is not a simple job. The executor or personal representative will be paid from the estate for their services. Usually, each state has a certain percentage (like 5% of the estate value) and some other minimums for compensation.
  • Probate Bond (aka Executor Bond or Fiduciary Bond) – Some states require this expense unless the will specifically says not to get it. The bond company normally charges a percentage of the amount of the bond. For instance, if their premium was 0.5%, a bond of $500,000 would cost $2,500.
  • Court Filing Fees – Each state (and county) has its own filing fee amount, so the exact amount will depend on where probate is filed.
  • Attorney Fees – Some states say an attorney must handle the probate process., Florida is one of tem.
  • Creditor Notice Fees – It’ll cost a bit to put up notices in local newspapers and other forms of communication to alert beneficiaries and creditors about the death.

How can you avoid Probate?

A living trust can help you avoid probate. If your assets are placed in a trust, you do not “own” them: the trustee of the trust does. You control the assets as if they were yours. … Since you do not “own” the trust property, it will not have to go through probate.

To learn more about How a Revocable Living Trust Avoids Probate, click here:


At Legacy Planning Law Group, we specialize in Wills and Trusts.

Our Attorney Bill O’Leary has over 20 years of exclusive Estate Planning experience. No matter how extravagant or how modest your Estate is, you have one, and without a Will or Trust, you will have to go through the full Probate process, which can be costly and very timely. And this will all come at a time of mourning and greiving which tends to make the simplest tasks more difficult.

Let our experienced Attorney Bill O’Leary help you decide what Estate Plan is best for you now.

Call us today at 904-880-5554 to speak with someone about your personalized situation.

We can set up a time for you to meet with Bill, where he will explain in extreme detail all your options and make recommendations to fit your own unique situation.

Don’t have time to call? Then click here and set up a complimentary 15-minute phone call on a day and time you choose, that is most convenient for you:


Visit our Website and see what we are all about:


Want to watch/hear some true-life probate horror stories?

Sign up and view our Webinar at:


Do not delay in getting your affairs in order. Let us help you “Avoid the Blood Sucking Probate Process”!

witch plan is right for you

Halloween is coming soon, Why not Treat your Family with an Estate Plan? 

Halloween is coming soon!!

Why not Treat your Family with an Estate Plan?

We here at Legacy Planning Law Group have several to choose from.

“Witch” one is right for you?

Estate Planning is not something to be taken lightly. If you are not careful it can be more of a “Trick” than a “Treat”

Let our experienced Attorney Bill O’Leary help you decide.

Believe it or not, you have an estate. In fact, nearly everyone does. Your estate is comprised of everything you own— your car, home, other real estate, checking and savings accounts, investments, 401k’s, IRA’s, life insurance, furniture, personal possessions. No matter how large or how modest, everyone has an estate and something in common—you can’t take it with you when you die.

When that happens—and it is a “when” and not an “if”—you probably want to control how those things are given to the people or organizations you care most about. To ensure your wishes are carried out, you need to provide instructions stating whom you want to receive something of yours, what you want them to receive, and when they are to receive it. You will, of course, want this to happen with the least amount paid in taxes, legal fees, and court costs. Ref: https://www.estateplanning.com/What-is-Estate-Planning/

One of the “Tricks” of Estate Planning is improper Trust Funding or Asset Alignment. We here at Legacy Planning Law Group have an Asset Alignment Coordinator dedicated to helping you align your assets into your Trust. Nearly all our plan’s include Trust Funding/Asset Alignment free of charge. It is what supersedes other Law Firms who do not offer or include this service.

Call us today at 904-880-5554 to speak with someone about your personalized situation.

We can set up a time for you to meet with Bill, where he will explain in painstaking detail all your options and make recommendations to fit your own unique situation.


Don’t have time to call? Then click here and set up a complimentary 15-minute phone call on a day and time you choose, that is most convenient for you:


Visit our Website and see what we are all about:


Want to watch/hear some true-life horror stories?

Sign up and view our Webinar at:



Don’t get “Tricked” this Halloween, Treat your family to the best treat ever: Your Legacy!



qualified disability trust

What is a Qualified Disability Trust?

What is a Qualified Disability Trust?

The legal authority to create a Qualified Disability Trust (QDisT) falls under §642(b)(2)(C) of the Internal Revenue Code. To qualify as a QDisT, the trust must meet the following criteria:

  1. A QDisT must be irrevocable.
  2. All beneficiaries must be disabled and receiving Supplemental Security Income (SSI) or Social Security Disability Income (SSDI) benefits. There can be more than one beneficiary, but all beneficiaries must be disabled.
  3. A QDisT cannot be a grantor trust; the trust must be the taxpaying entity. A self-settled special needs trust can never qualify as a QDisT.
  4. The trust must be established for the benefit of disabled individuals 65 years of age or younger. The QDisT does not cease to be a QDisT after the beneficiary turns 65, but it must be established beforehand.
  5. According to IRC 642(b)(2)(C)(ii), a trust can still qualify as a QDisT if the corpus of the trust transfers to someone who is not disabled after all disabled beneficiaries are deceased.

Benefits of a QDisT

The main benefit of a QDisT is taxation. Under IRC §642(b)(2)(C), a QDisT is allowed the same exemption as an individual when filing their tax return. The Tax Cuts and Jobs Act (TCJA), which became effective January 1, 2018, eliminated personal exemptions. However, it also stated that in any year in which there isn’t a personal exemption, the amount of $4,150 in 2018 (indexed for inflation in following years) shall be considered as the exemption to be taken by the QDisT. Compare this $4,150 exemption to the usual $100 exemption (or $300 exemption if a trust is required to distribute all of its income each year) afforded to other trusts, and you can see how the savings add up.

Another tax benefit of the QDisT is that the income of this particular type of trust is not subject to the Kiddie Tax, in accordance with IRS §642(b)(2)(C)(ii). The Kiddie Tax is a tax on unearned income of a child. (Under certain circumstances, an individual can be considered a child until 24 years of age.) It came to fruition when the Internal Revenue Service (IRS) realized some wealthier taxpayers were diverting income to their children because the children oftentimes were afforded a much lower tax bracket. In response, the IRS came up with the Kiddie Tax and stated that any unearned income for folks under a certain age and meeting certain criteria would be taxed at their parents’ bracket. The TCJA made the Kiddie Tax even harsher and ruled that the Kiddie Tax rate would not be at the parents’ tax rate, but at the higher tax rate of Trusts and Estates.

Besides taxation, QDisTs are useful tools to accomplish other goals. The main goal of a QDisT is to have assets somewhat available to the beneficiary without the beneficiary losing state or federal public benefits. If the disabled person owned these assets outright, their eligibility for government benefits would most likely be in jeopardy. If the QDisT owns the assets and the Trustee has discretion to make purchases for the beneficiary, then the assets are not countable assets when trying to qualify for public benefits. The Trustee would not give money in the QDisT directly to the beneficiary. Rather, the Trustee would make purchases that benefit the beneficiary, like a vacation or the services of a tutor, in accordance with the Social Security Program Operations Manual System and other laws and guidelines.

What are the tax filing requirements of a QDisT?

As with all non-grantor trusts, the trust will be responsible for filing a tax return, Form 1041, under its own Employer Identification Number (EIN). Any distributions to the beneficiary will be taxed on the beneficiary’s own Form 1040 tax return.

For example, let’s say Bob is an independent Trustee of Lucy’s QDisT. The QDisT has a stock portfolio worth $500,000, which generates $50,000 in taxable income. During the tax year, Bob paid for Lucy’s vacation that cost $5,000. Bob also paid for educational expenses of $5,000 for books, tutoring, and extracurricular activities. Bob took a reasonable compensation of $2,500 for the year.

Bob causes a Form 1041 to be filed for the trust, reporting the $50,000 income. As discussed above, there will be a $4,150 exemption used. Bob’s $2,500 in fees will be deducted for administrative expenses, and Lucy’s $10,000 in distributions will be deducted. The trust will have a taxable income of $33,350. The QDisT will send a K-1 to Lucy showing her distribution, and she will be responsible for reporting that $10,000 distribution on her personal Form 1040 tax return.


A QDisT can be a powerful tool when planning for a disabled individual. Each attorney must do a case-by-case analysis to determine if a QDisT is the best planning device for your client. To know if a QDisT is right for a client, it’s important to analyze the facts of the case, including whether the client qualifies for a QDisT under statutory rules, the costs to maintain the QDisT, tax considerations, and more. Thankfully, the QDisT is one formidable tool when planning for a disabled person and can offer some great benefits.

Provide Advocacy for Your Clients

Developing expertise in special needs planning enables you to expand your practice to serve clients with disabilities and their families. ElderCounsel covers all aspects of becoming successful in the practice areas of elder law and special needs planning. We cover your legal document drafting needs with our software, a wide variety of premium attorney education, and practical strategies to elevate your practice. Our goal is to help facilitate collegiality among members and allow you to easily connect with fellow elder law practitioners.

Read more related articles at;

Is a Qualified Disability Trust Appropriate?

What is a “qualified disability trust” for Federal income tax purposes?

Also, read one of our previous Blogs at:

Financial Planning for Loved Ones with Disabilities

disability employment

How the Disability Employment Incentive Act Re-Incentivizes the Hiring of Workers with Disabilities

How the Disability Employment Incentive Act Re-Incentivizes the Hiring of Workers with Disabilities

Sixty to eighty percent of folks with a disability want to work. However, only 32.3% of workers with a disability are in the workforce. It is no secret that employment rates among individuals with disabilities are suffering. While many disabled individuals want to gain employment and contribute to the workforce, related barriers prevent all too many from realizing this goal. Some employers are hesitant to take on the expense and legal implications of employing an individual with disabilities – many of these businesses are also unfamiliar with the financial resources available to them. In response, Congressional efforts to re-incentivize the hiring and retaining of employees with disabilities have come to fruition.

On July 24, 2018, Congress passed the Disability Employment Incentive Act (DEIA). The Act provides employers of disabled workers with a significant increase in tax benefits. In part, the Act includes increasing the monetary amount of tax incentives for businesses, raising the size and revenue limits for small businesses, and expanding the pool of targeted groups. Not to take effect until after December 31, 2018, the Act has great potential to spark renewed interest in hiring and retaining disabled employees.

Who Initiated Disability Employment Incentive Act (DEIA)?

Introduced in the Senate by U.S. Senator Bob Casey, in conjunction with Ms. Hassan, Mrs. Murray, Mr. Van Hollen, and Ms. Klobuchar, the DEIA proposed to increase the tax benefits to employers that hire and retain qualified individuals with disabilities. The enacted bill amends and enhances the current provisions within the Internal Revenue Code regarding employer tax incentives.

What Do These Changes Mean for Employers?

  1. Tax credits to employers will see increased limits under the Work Opportunity Tax Credit. The credit for qualified employees will remain at 40% of the employee’s first year salary, but the countable salary limit will increase to $12,500 (previously $6,000). Additionally, employers that retain qualified employees for a second year will see a credit on 20% of the employee’s salary, also capped at $12,500.
  2. Second, the limitations imposed by the Disability Access Expenditures Tax Credit on the size and gross receipts of small businesses will increase significantly. Previously, small businesses were limited to 30 full-time employees or less – this number will now double. Previously, small businesses were limited to $1 million in gross receipts – this amount is now tripled. Additionally, the maximum tax credit will double to $10,000.
  3. The Architectural and Transportation Barrier Tax Credit will see significant improvement. Promoting ADA compliance, this credit will provide employers with up to $30,000 in credit for making accessibility modifications to existing structures. These expenses could include relevant modifications to physical barriers in facilities or transportation vehicles, as well as expenses to make technology accessibility.

Who Are Qualified Individuals with Disabilities?

This Act applies to employers who hire a person receiving Supplemental Security Income (SSI) Benefits, a person who is receiving Social Security Disability Insurance (SSDI) benefits, or a person who was referred to them though a state Vocational Rehabilitation agency.

In Conclusion
Hiring individuals with disabilities can sometimes mean greater expenses for employers. Despite anti-discrimination laws and required compliance with accommodations, employers are often hesitant to take on the potential financial costs of accommodating employees with disabilities. These fears stifle opportunities for many individuals to gain access to the workforce. Fortunately for employers and individuals with disabilities seeking employment, the DEIA provides greater incentives for employers to consider qualified candidates who have a disability. Check here to see if your state also has further incentives to employers hiring folks with disabilities.

Read more related articles at:

Senator Casey’s Bill Aims to Incentivize Hiring of Workers with Disabilities

Harder Introduces Bipartisan Bill to Help Businesses Hire Disabled Workers

Also, read one of our previous blogs at:

Is a Disabled Person with Savings Eligible for Medicaid?

Click here to check out our On Demand Video about Estate Planning.


Unfunded trust

The Dangers of Not Funding a Trust, could be the Trick to your Treat!

The Dangers of Not Funding a Trust, could be the Trick to your Treat!

 A failure to fund a trust can result in costly probate proceedings or worse—a transfer of your estate to the wrong beneficiaries. Rather than undermining the very purposes of the trust by failing to fund, individuals should take concrete steps in order to ensure complete trust funding.

A Trust is a very uniquely personalized set of documents. A good Trust outlines your wishes and your needs, it also aligns your assets into your Trust, hence funding. Here at Legacy Planning Law Group, we specialize in Trusts. Our Attorney Bill O’Leary has been practicing Estate Planning Law for over 20 years.

We know the importance of aligning assets into your Trust. Most of our Trust Plan’s come with Asset Alignment absolutely free. We have an Asset Alignment Coordinator: Courtney Roka, dedicated to Asset Alignment. She works with you to align your assets into your trust so that you have peace of mind. We call this our” Done with You” program. When choosing to obtain a Trust making sure it is properly funded is crucial.

In a lot of instances our individualized Asset Alignment program is what sets us apart from other Estate Planning Law Firms.

So, don’t get tricked by choosing a Trust without an asset alignment or funding plan included.

Call us today at 904-880-5554

Visit our Website at:


To learn more about us.

You can even Book a Call which allows you to pick the day and time that is most convenient for you!

Click here:


When you create a Trust with Legacy Planning Law Group it’s a real Treat!

Read more related articles here:

Creating a Trust is the first step, but what if the fund isn’t funded?

What does it mean to fund a Trust?

What happens to assets left out of your Trust?

Also, Read one of our previous blogs at:

An Unfunded Trust is a Useless Trust.

Click here to check out our On Demand Video about Estate Planning.





Trustee Misconceptions

Trusteeship Misconceptions in a Special Needs Trust

Trusteeship Misconceptions in a Special Needs Trust

By: Elder Counsel: WhitePaper

Special Needs Trusts have two primary objectives: Fiduciary management and government benefit eligibility.Special Needs Trusts provide fiduciary management and oversight for individuals who are unable to take direct custody of property, typically as a result of a cognitive limitation, lack of judgment, or susceptibility to financial manipulation. In this way, Special Needs Trusts are similar to other types of discretionary trusts, such as a trust established for a minor or a trust created for a spendthrift who lacks financial discipline. All of these trust arrangements serve to protect trust property through the appointment of someone who will exercise independent judgment in determining how trust property will be used for the beneficiary’s benefit.With regard to government benefit eligibility, preserving eligibility for Medicaid allows the beneficiary to access residential services, home health and personal care services, transportation, and other benefits. And for those who have no other source of income and whose disability leaves them unable to work, the Supplemental Security Income (SSI) program will continue to serve as a primary source of income. Both programs have stringent income and resource limitations.

Four Common Misconceptions about TrusteeshipMisconception

#1: Friends and Family Will Do a Better Job
Most clients do not understand the distinction between guardianship and trusteeship. Without any practical experience or familiarity with professional trusteeship, clients often equate the financial responsibilities of trusteeship with the personal responsibilities of guardianship.Misconception
#2: Friends and Family are Less ExpensiveWithout an understanding the time and effort that is required to do the job right, many clients assume that a family member or friend will not accept compensation. And family members and friends (when consulted prior to the appointment) often promise to do the job for nothing more than love and consideration, also for lack of understanding of what they are about to take on.Misconception
#3: “It’s Not That Hard…..”
More commonly, the family member or friend who is being considered as trustee is far removed from the day to day affairs of the person with the disability. He or she may live out of the area and only see the person with the disability a few times a year. Siblings move on and raise their own families, maintain jobs and have lives to live.Some family members or close family friends have little or no personal experience with the time and effort required to be an effective trustee.
 #4: “My (family member/friend) is a (financial professional, accountant, lawyer, etc.), and will be a perfect choice for trustee….”
Special Needs Trusts are discretionary trusts, which mean that the trustee must take the time to understand the beneficiary’s needs, and then use the funds under management to meet those needs in a proactive and cost effective manner. A degree in forensic accounting does little to help a beneficiary if the trustee cannot take the time to review an Individualized Education Plan or have a conversation with a social worker to determine what items or services could help enhance the beneficiary’s quality of life.

The Reality:

Managing a Special Needs Trust requires attention to all of the traditional responsibilities of trusteeship – investment management, accounting responsibilities, and tax return preparation. But in many (and perhaps most) cases, there are other, more frustrating and time consuming challenges that lead to ‘trustee burnout.’ A trustee who expected to spend his or her time looking at investments and reconciling checkbooks may instead find herself involved in addressing the consequences of a beneficiary’s lack of executive functioning skills and poor judgment. There can be domestic disputes, financial abuse, and in some cases police involvement. In addition, a trustee may be faced with questions and continued criticism from remaining beneficiaries of the trust who continually second-guess the trustee’s distribution decisions, or a court-appointed guardian for the beneficiary who makes unreasonable demands for expenditures.
Read more related articles at:

What to Do When It’s Time to Terminate a Special Needs Trust:

Also, read one of our previous Blogs at:

Special Needs Trusts – What You Need to Know

Click here to check out our On Demand Video about Estate Planning.

medicaid trust

How Medicaid Planning Trusts Protect Assets and Homes from Estate Recovery

How Medicaid Planning Trusts Protect Assets and Homes from Estate Recovery

Last updated: January 04, 2021

What are Medicaid Asset Protection Trusts (MAPT)?

Medicaid Asset Protection Trusts (MAPT) can be a valuable planning strategy to meet Medicaid’s asset limit when an applicant has excess assets. Simply stated, these trusts protect a Medicaid applicant’s assets from being counted for eligibility purposes. This type of trust enables someone who would otherwise be ineligible for Medicaid to become Medicaid eligible and receive the care they require be at home or in a nursing home. Assets in this type of trust are no longer considered owned by the Medicaid applicant. MAPTs also protect assets for one’s children and other relatives, which is a win-win for Medicaid applicants and their families. Medicaid Asset Protection Trusts are also referred to as Medicaid Planning Trusts, Medicaid Trusts, or less formally, Home Protection Trusts.

It is important to understand that there are many different types of trusts and not all of them are Medicaid compliant. For instance, family trusts, commonly called revocable living trusts, are different from MAPTs. Generally, family trusts are not adequate in protecting money and assets from Medicaid because the language of the trust makes it revocable (meaning the trust can be cancelled or altered) or allows for money in the trust to be used for the Medicaid applicant’s long-term care costs. Therefore, assets in this type of trust would have to be “spent down” to meet Medicaid’s asset limit in order for one to qualify for Medicaid.

This page is about Medicaid Asset Protection Trusts. There are several other types of trusts that are relevant to Medicaid eligibility, but will not be covered in this article. Irrevocable funeral trusts, also known as burial trusts, are used to protect small amounts of assets specifically for funeral and burial costs. There are also qualifying income trusts (or qualified income trusts, abbreviated as QITs). This is important to mention because one might find it easy to confuse MAPTs and QITs. While MAPTs protect one’s assets and allow one to meet the asset limit, QITs (also called Miller Trusts) allow one who is over the income limit to become income eligible for Medicaid purposes. Unfortunately, not all states allow QITs.

Did You Know? If you transfer your home to a Medicaid asset protection trust, you can reserve the right to live there for as long as you live.

Why Are Medicaid Asset Protection Trusts Important?

While each state runs its Medicaid program within federally set guidelines, there is “wiggle” room for each state to set its own rules within those larger guidelines. Generally speaking, the asset limit for eligibility purposes for an elderly individual applying for long-term care Medicaid is $2,000. However, this asset limit can be lower or higher depending on the state in which one resides. (For state specific asset limits, click here). While some higher value assets are usually considered exempt (uncountable), such as one’s primary residence, a vehicle, and wedding rings, too often applicants are still over the asset limit but still cannot afford their cost of care. Therefore, any assets that exceed the asset limit need to be “spent down” or a planning strategy, such as a Medicaid Asset Protection Trust, needs to be put into place to help the applicant qualify for the care they require. One can determine how much of their assets must be spent down to become Medicaid eligible using our Calculator.

How Do Medicaid Asset Protection Trusts Work?

To get a better grasp of Medicaid asset protection trusts, it’s important to understand the terminology associated with them. First, there is the individual who creates the MAPT. This person may be referred to by a number of names, including grantor, trustmaker, and settlor. The trustee is the manager of the trust and controls the assets in the trust. While neither trustmakers nor their spouses can be trustees, adult children and other relatives can be named as trustees. They must adhere to the rules set forth by the trust, which are very specific as to how the money can be used. For instance, there should be a strict prohibition of using trust funds on the trustee. There is also a beneficiary or beneficiaries, who is / are the person(s) who benefits from the trust after the trustmaker passes away. In order for the trust to be Medicaid exempt, the principal beneficiary must be someone other than the trustmaker. This is because if the trustmaker were also the beneficiary, he or she would have access to the assets, and Medicaid would consider them available to pay for his or her care and supports.

In addition, the trust must be irrevocable in order to be exempt from Medicaid’s asset limit. This means that the trust cannot be cancelled or changed. Once the assets are transferred into the trust, they no longer belong to the trustmaker, nor can the trustmaker regain ownership of them. If the assets are in a revocable (can be changed or terminated) trust, Medicaid considers the assets to still be owned by the Medicaid applicant. This is because the person who created the trust still has control over the assets held in the trust. Therefore, the assets are counted towards Medicaid’s asset limit.

   MAPTs cannot be used to shelter or reduce assets if the applicant is immediately applying for Medicaid.

Planning well in advance of needing long-term care Medicaid is the best course of action when considering a Medicaid Asset Protection Trust. This type of trust is not suitable for persons who need Medicaid immediately or within a short period of time. This is because MAPTs are a violation of Medicaid’s look back period if not set up prior to 5 years (2.5 years in California) before one applies for Medicaid. That said, there are other planning strategies for those who need Medicaid currently or in the near future.

Benefits of a Medicaid Asset Protection Trust

The assets in a Medicaid asset protection trust not only allow one to meet Medicaid’s asset limit without “spending down” assets, but the assets are also protected for the beneficiaries listed by the trustee. This means the assets are safe from Medicaid estate recovery. In simplified terms, when a Medicaid recipient passes away, the state in which the individual lived and received Medicaid benefits, attempts to collect reimbursement for which it paid for long-term care. This is done via the deceased’s estate. However, if one’s home and other assets are in a MAPT, the state cannot come after those assets. Learn more about Medicaid estate recovery.

Shortcomings of a Medicaid Asset Protection Trust

Planning well in advance of the need for Medicaid, if at all possible, is the best course of action. Medicaid asset protection trusts are ideal for persons who are healthy and don’t foresee needing Medicaid in the near future. This is because MAPTs violate Medicaid’s look back period. This is a period of 60-months in all states, with the exception of California, which only looks back 30-months. (New York is in the process of implementing a 30-month look back period for long-term home and community based services). During the look back period, Medicaid checks to ensure no assets were sold or given away for less than they are worth in order for one to meet the asset eligibility limit. For Medicaid purposes, the transfer of assets to a Medicaid asset protection trust is seen as a gift. Therefore, it violates the look back rule. This can result in a period of Medicaid ineligibility. Therefore, a MAPT should be created with the idea that Medicaid will not be needed for a minimum of 2.5 years in California and 5 years in the rest of the states.

In addition, once the assets have been transferred to a MAPT, the trustee no longer has control or access to them. They no longer are considered owned by the individual.

Given the fairly expensive fees associated with the creation of a Medicaid Asset Protection Trust ($2,000 – $12,000), they are typically not used for assets less than $100,000. Should a family need to reduce one’s assets to qualify for Medicaid in amounts less than $100,000 there are other approaches.

Gifting Assets vs. Creating a Medicaid Asset Protection Trust

While there is more flexibility with gifting assets and it does not require any legal work, it also violates Medicaid’s look back rule. As previously mentioned, this results in a period of Medicaid ineligibility as a penalty. Therefore, like with MAPTS, gifting should occur 5 years (2.5 years in California) in advance of the need for Medicaid. In addition, capital gains taxes are a common concern with gifting.

What Type of Assets can go in an Asset Protection Trust?

A number of different types of assets can be put into a Medicaid Asset Protection Trust, including one’s home. When a trustee places his or her home in a MAPT, he or she can continue to live in the home. In fact, it is even possible to sell the home and for the trust to buy another one. However, there is one exception to this rule. In Michigan, a home is considered a countable asset when placed in a MAPT. Stated differently, the home is non-exempt and is counted towards Medicaid’s asset limit.

Other assets that are placed in MAPTS include real estate other than one’s primary home, checking and savings accounts, stocks and bonds, mutual funds, and CDs. In most cases, transferring retirement accounts (401k’s and IRAs) is not recommended due to tax implications with cashing out the plans and transferring them to a MAPT.

If assets that produce income are placed in the trust, the trustmaker is able to collect the income. Said differently, the principal is protected by the trust and the trustmaker receives the income produced by the principal. However, Medicaid also has income limits, so it’s important that this income does not cause one to have income over the limit. As of 2021, most states have an income limit of $2,382 / month for a single senior applying for long-term care. (To see income requirements in the state in which one resides, click here). In the situation where a Medicaid applicant is in a nursing home, income produced by the principal generally goes to the nursing home to help pay the cost of care.

How Do Medicaid Asset Protection Trust Rules Change by State?

Medicaid Asset Protection Trust rules are not only complicated and tend to change frequently, they also differ based on the state in which one resides. As mentioned above, Michigan considers a home in a trust, even if it is irrevocable, a countable asset. California Medicaid (Medi-Cal), on the other hand, has very lax rules in regards to transferring a home to a trust. In CA, a home, even in a revocable trust, is exempt from Medicaid’s asset limit and is safe from estate recovery. This is very unusual. In most circumstances, revocable trusts do not keep assets safe from Medicaid’s asset limit and estate recovery. In addition, in CA, the state can only seek reimbursement of long-term care costs from those assets that go through probate (a legal process where a deceased person’s assets are distributed). If assets have been transferred to a revocable living trust, it is safe from estate recovery. This means it will avoid probate and estate recovery and the need for MAPTs are not as great in the state of CA as in other states.

Wisconsin also stands apart from the other states. In WI, trusts that are irrevocable can generally be altered or cancelled if all parties (trustmaker, trustee, and beneficiaries) are in agreement.

Is an Attorney Needed to Set up a Medicaid Asset Protection Trust?

It is imperative that a Medicaid Asset Protection Trust be set up correctly in order to ensure the assets transferred into the trust are exempt from Medicaid’s asset limit. As previously mentioned, the rules change frequently, as well as vary by state. This makes it important to have the trust created by someone who is familiar with the MAPT laws in one’s specific state. Also, remember that this type of trust needs to be created well in advance of the need for Medicaid, so as to not violate Medicaid’s look back rule. Incorrectly setting up a MAPT can inadvertently cause one to be ineligible for Medicaid, defeating the purpose of creating one. Therefore, an attorney should be used to set up a Medicaid Asset Protection Trust. Private Medicaid Planners often work with attorneys to keep costs low for their clients.

How Much Does it Cost to Create a Medicaid Asset Protection Trust?

The cost of creating a Medicaid Asset Protection Trust varies significantly from a low of $2,000 to a high of $12,000. While the price might seem high, in reality, a MAPT ends up saving persons money in the long run. This is because the nationwide average cost of nursing home care is over $7,750 / month, and a MAPT prevents one from having to pay out of pocket for nursing home expenses (and other long-term care costs).

When considering the cost, there are a lot of variables. First, some attorneys don’t strictly do MAPTS. Rather they do a package of sorts. This may include a pour-over will, powers of attorney, advance health care directive (living will), and HIPAA medical information releases, in addition to the MAPT. Cost can be impacted by if the client is single or married, the assets being transferred into the trust, and if a crisis plan is needed. In addition, price varies by geographic location, with the price in urban areas generally costlier than in rural areas. The experience of the attorney can also impact the cost.

Alternatives to a Medicaid Asset Protection Trust

In addition to Medicaid asset protection trusts, there are other planning strategies to help lower one’s countable assets. These may include funeral trusts and annuities. In addition, there are also strategies to help lower one’s income to become eligible for Medicaid.

Read more related articles here:

How to Use a Trust in Medicaid Planning

Benefit or Backfire: Navigating the Irrevocable Medicaid Trust

Also, read one of our previous Blogs at:


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service animals and airlines

Service Animals & Airlines: New Guidance Issued by DOT

Service Animals & Airlines: New Guidance Issued by DOT


Service Animals & Airlines: New Guidance Issued by DOT. There has been a lot of heated debate on the topic of traveling with emotional support animals (ESA), psychiatric service animals (PSA), and traditional service animals. To resolve some of the conflict, the Department of Transportation (DOT) issued a Final Statement elaborating on the department’s expectations and priorities regarding the treatment of passengers traveling with animals.

It is well established that individuals with disabilities are permitted to bring their service animals to most places they choose to go. Businesses are prohibited from refusing entry or service to an individual with a service animal, unless particular concerns are present. The Americans with Disabilities Act (ADA) is probably the law that comes to mind in these situations. It is certainly one law that protects those with disabilities from ill-treatment. But, did you know that the ADA does not apply to the skies? The ADA does not apply to airlines, their facilities, or services – that is where the Air Carrier Access Act (ACAA) swoops in.

Some Basic Comparisons

While the two Acts are quite similar, there are notable differences worth investigation. The DOT oversees the ACAA, which applies to airlines, their facilities, and services. The Department of Justice (DOJ) oversees the ADA, which applies to airports, their facilities, and services.

The DOT regards “any individual who has a physical or mental impairment that, on a permanent or temporary basis, substantially limits one or more major life activities, has a record of such an impairment, or is regarded as having such an impairment” as an individual with a disability. Correspondingly, according to the DOJ, “[t]he term “disability” means, with respect to an individual[,] (A) a physical or mental impairment that substantially limits one or more major life activities of such individual; (B) a record of such an impairment; or (C) being regarded as having such an impairment […].”

Wild Skies

In recent years, airplane cabins have started to look like menageries – passengers taking full advantage, and sometimes abusing, the ability to take certain animals along for the ride. With the uprising of sketchy online businesses “certifying” run-of-the-mill pets as service animals, or worse, providing doctor’s letters prescribing support animals, airlines began cracking down on the abuse. Airline restrictions became tighter and created questions of disability rights violations. Passengers flooded the DOT with complaints of unfairness and illegality.

In response to the rise of animal-toting airline-passenger complaints about unreasonable airline regulations, the DOT issued a Final Statement elaborating on its expectations and priorities under the ACAA. The statement provides clarification on the permissible and prohibited actions that airlines may take in regulating the in-cabin presence of various types of animals.

Animal Hierarchy

There are four general categories of animals when it comes to disability laws: pets, Emotional Support Animals (ESAs), Psychiatric Support Animals (PSAs), and service animals. In the aerial context, pets are often stored in the cargo hold of the aircraft and require an additional fee to the owner. ESAs and PSAs, are generally permitted in the cabin if certain criteria are met. Service animals are heavily protected and taken very seriously under both laws. Under the ADA, only service animals and some PSAs are protected.

Each Act provides guidance on various service animals, their legitimacy, and limitations. The ACAA establishes what animals are permitted in the cabins of aircrafts, and the ADA established what animals are permitted nearly anywhere else. Both Acts consider dogs and miniature horses to be “common” service animals, where the ACAA expanded the group to include cats as well. The ADA does not recognize any other species of service animal.

“Under the ADA, a service animal is defined as a dog [or miniature horse] that has been individually trained to do work or perform tasks for an individual with a disability.  The task(s) performed by the dog [or miniature horse] must be directly related to the person’s disability.” The ACAA does not have a technical definition within the text of the Act, but the department informally explained, in 2018, that the “DOT considers a service animal to be any animal that is individually trained to assist [sic] a qualified person with a disability or any animal necessary for the emotional well-being of a passenger.” (Note, however, that back-end of this statement contradicts some other provisions of the ACAA on the differentiation between service animals and emotional support animals.)

Both Acts give the highest protection to service animals. The text of the ACAA specifically categorizes service animals separately from ESAs and PSAs, which are lumped together. The ADA considers specifically trained PSAs to be genuine service dogs. The ADA explicitly does not recognize ESAs under the Act, where the ACAA provides them protection. Both Acts recognize the potential need for an individual to require the assistance of more than one service animal; but, the ACAA also permits a disabled passenger one ESA in addition to (up to) two non-ESAs.

Additional ACAA Clarifications

With the exception of snakes, other reptiles, ferrets, rodents, and spiders, airlines cannot categorically prohibit the use of species that are not dogs, cats, or miniature horses. An airline could determine that the particular animal compromises the health or safety of others, and therefore prohibit its entry onto the aircraft, but on a case-by-case basis only. Further, airlines are prohibited from breed bans as well.

Airlines are permitted to require travelers with ESAs and PSAs to: check-in early; provide advanced notice; provide a recent doctor’s note from their treating physician verifying that the individual suffers from a recognized emotional or mental disability, that the presence of the animal is necessary, and lists the provider’s credentials. Airlines are absolutely prohibited from requiring traditional service animal users to check in early, provide advance notice, or provide additional documentation, on flights less than eight hours.

Limited questions are permitted by both Acts when a disability is not obvious or clear. The ACAA permits airline personnel to ask “how does your animal assist you with your disability?” For service animals, this verbal assurance by the handler, in addition to any ID cards, harnesses, etc. must be accepted as evidence that the animal is a service animal. For ESAs and PSAs, the airlines may ask for documentation of vaccination, training, behavior, etc., for the purpose of determining the potential threat to the health or safety of others – but, generally, if the individual has complied with the advanced notice and check-in rules, has their doctor’s note, and does not have an unruly or unusual animal companion, the airline must permit its attendance.

The Long and the Short of It

The ADA protects the disabled on the ground; the ACAA protects the disabled in the skies. The DOJ controls the ADA; the DOT controls the ACAA. The ACAA has carved out additional service animal protections for Emotional Support Animals and Psychiatric Service Animals; the ADA only recognizes traditional service dogs (and miniature horses), including PSAs that have been specifically trained to complete a task for its disabled handler.

Traditional service animals are a familiar and, generally, accepted tool for many disabled people. However, the influx of psychiatric and emotional support critters exposed grey areas that the public was happy to explore. Prior to official guidance from the DOT, airlines and passengers were left without mutually understood limits for the presence and use of these creatures. As passengers pushed the bounds, airlines feverishly fought back with restrictions and refusals. The DOT has now offered airlines and passengers a better understanding of the department’s priorities, permissions, and definitive prohibitions. Both sides now have the explanation needed to better protect their specific interests and rights under the ACAA.

Read more related articles here:

New DOT rule paves the way for airlines to ban emotional support animals on flights

U.S. Department of Transportation Announces Final Rule on Traveling by Air with Service Animals

Also, read one of our previous Blogs here:

Pandemic Pets and Pet Companionship: 7 Benefits/Considerations for Care Coordination and Estate Planning

Click here to check out our On Demand Video about Estate Planning.


medicaid trusts

Getting Around the Transfer Penalty for Pooled-Trust Transfers for Individuals 65 Years and Older

Getting Around the Transfer Penalty for Pooled-Trust Transfers for Individuals 65 Years and Older

Medicaid laws can be cumbersome and tricky. Federal statutes set out the framework for certain Medicaid eligibility rules and states can interpret them differently. One such rule can be found in 42 U.S. Code § 1396p(d)(4)(C), which covers transfers to pooled trusts. Based on differing interpretations of this statute, some states impose a transfer penalty when an individual over age 65 transfers funds within the look-back period to a pooled trust; some states do not. Minnesota has the former rule, but in a recent case, did allow a Medicaid applicant over age 65 to transfer funds into a pooled trust without the imposition of a transfer penalty.

In this case, David moved into a long-term care facility. His siblings sold his home. David petitioned a court to transfer his proceeds into a pooled special-needs trust. The court issued an order allowing the transfer. Disbursements from the trust were limited to the sole discretion of the Trustee, and could only be made for items or services not covered by Medicaid. David was 65 years old at the time the funds were transferred to the pooled trust. Because Minnesota penalizes transfers to pooled trusts for folks 65 years and older, David was assessed a penalty period where he wasn’t eligible for long-term care Medicaid benefits. David appealed.

Minn. Stat. § 256B.0595 outlines the prohibition on the transfers of assets, along with the exceptions to the transfer rules. In line with federal rules, it states that a Medicaid applicant can’t give away assets for less than fair market value during the look-back period. If the applicant does, a penalty period is instituted where the applicant won’t be eligible for Medicaid benefits for a certain period of time. Such statute also states that no penalty will be imposed if the applicant shows that he did receive fair market value for the transfer, or he intended to receive fair market value for the transfer.

David argued that he did receive fair market value for his transfer to the pooled trust. The Trustee testified that although he had discretion when making distributions, if he were to deny a reasonable request, it would be in bad faith and thus a breach of contract. Indeed, the expenditures from the trust showed that David received items such as an adaptive recliner, dental work, wheelchair cushions, and fees for guardian services. It was estimated that his pooled trust account would be depleted in two years; David’s life expectancy was roughly 15 years.

A state official testified at the hearing that a transfer to a pooled trust by a beneficiary over age 65 was evaluated as an uncompensated transfer so she didn’t complete any further analysis of the case. The human services judge ruled in favor of the state, stating that because distributions were discretionary, “no ‘reasonable seller/buyer or objective observer’ would consider the exchange to be a transfer for fair market value.” David appealed and the district court reversed, concluding that David indeed received adequate compensation for the transfer in the form of his interest in the pooled trust assets. The state appealed and the court of appeals affirmed the district court’s ruling. The state appealed again and now we have this ruling from the Supreme Court of Minnesota.

The judge here did recognize that Minnesota statues have an age limit for when transfers to a pooled trust will not incur a penalty. However, if the Medicaid applicant is over that age limit, there are other ways to avoid a penalty – by showing that the applicant received, or intended to receive, valuable consideration for the asset. The opinion then goes into an analysis of what valuable consideration means. The state argued that fair market value equates to cash, and valuable consideration is something other than cash but “of equivalent market value”. The state said that David did not have the funds as unrestricted access to cash and also future goods and services should not be taken into consideration when analyzing whether an applicant received valuable consideration for the transfer.

The judge disagreed, saying that “…under the intent exception to the asset-transfer rules, Minn. Stat. § 256.0595, subd. 4(a)(4), we hold that ‘valuable consideration’ means compensation that is approximately equal to the fair market value of the transferred asset.” Also, notably, the court stated that David didn’t have to show convincing evidence that he intended to receive fair market value; instead, he only needed to make a satisfactory showing that he did. The latter is a lesser standard, and the court found that David met that standard. In the end, David’s transfer to the pooled trust at age 65 did not incur a penalty, as he received valuable consideration for the transfer.

This is a huge win not just for David and other Minnesotans who may need to qualify for long-term care Medicaid, but it may just be a win for applicants who live in other states that penalize transfers to pooled trusts for applicants over 65 years of age. Has the Supreme Court of Minnesota paved the way to get around the age limit rule? Possibly so.

Read more related articles here:

Exceptions to Counting Trusts Established on or after January 1, 2000

Supplemental Needs Trusts –Protecting Access to Medicaid, SSI and Other Benefits

Also, read one of our previous blogs at:

Can My Family Benefit From A Special Needs Trust?

Click here to check out our On Demand Video about Estate Planning.

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