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LTC Insurance

Pros and Cons of Long-Term Care Insurance

Pros and Cons of Long-Term Care Insurance


Pros and Cons of Long-Term Care Insurance. Is long-term care insurance a wise purchase? Here are five questions you can ask to see whether this type of insurance will benefit you.

Key Takeaways

  • Knowing the pros and cons of long-term care insurance will help you decide whether it’s a wise purchase for you and your situation.
  • Consider factors such as your lifestyle, your family health history, and what kind of care you might need in the future.
  • Think about whether you would be able to afford to pay for your long-term care in the future, or if you’d likely need the safety net of insurance.


Do You Lead a Healthy Lifestyle?

Believe it or not, being healthy may mean that you are more likely to need care. The healthiest people are often the ones who end up needing long-term care assistance later in life, whereas heart problems or cancer may take the unhealthy ones sooner. One of the benefits of long term care insurance , if you are a healthy person, is that it can allow you to stay in your home and maintain your independence longer. Most policies issued today cover the cost of in-home care, which can provide someone to help with many of the activities of daily living, such as cooking and cleaning. Usually, you must require assistance with two out of the six activities of daily living for your long-term care benefits to begin.


What Shows up in Your Family Health History?

What have longevity and health been like for your grandparents, parents, aunts, uncles, and siblings? Has anyone needed care later in life? Who was there to assist them? What if they had needed care? How would it have affected the family? Today, many families are scattered across the country, making it difficult to rely on relatives for care. It can also be physically demanding to care for someone, and your family members might not be capable of providing the help needed. Long-term care insurance helps reduce the burden of care that may otherwise fall on loved ones.


What Kind of Care Might You Need?

What if you break a hip later in life? What if your mind remains fully alert, but you need help cooking, cleaning, and dressing, and you do not want to move in with a family member? Who would help, and how would you pay for their help? Full-time, long-term care assistance can run from $6,000 to $10,000 per month, or even more if medical care is needed. If you have sufficient assets to cover these costs then you do not need long-term care insurance. If you do not have sufficient assets, without long-term care insurance, you will end up spending down the funds you have before you see whether you qualify for Medicaid. Long-term care insurance buys you time and enables you to afford quality care.


Can You Afford It, or Can You Afford Not to Have It? 

Long-term care insurance has adjustable features. Like buying a car, you can get all the extras, and pay for them, or you can buy a base model that costs less but still provides decent transportation. The major downside of long-term care insurance is the same as with any insurance: you may pay premiums for years and never use the coverage. According to the American Association for Long Term Care Insurance, the average annual premium for a long-term care policy for a 65-year-old male, in reasonably good health, runs about $1,400. That figure is based on a policy that provides a pool of benefits equal to $162,000. Depending on the level of care you require, and the state in which you live, the average cost of a stay in a long-term facility can exceed $10,000 per month, which means that the benefits from such a policy could run out in a little more than a year. You need to look at it the same way you look at any other type of insurance. After paying for homeowner’s insurance for years, are you upset that your home never burned down and that you never used your insurance? Of course not! You are happy that you never experienced such an awful event. When it comes to the amount of coverage, you may not need a “Cadillac” policy. Instead, evaluate the amount of long-term care coverage you may need by considering your other sources of income. A policy that covers $100 per day, with an inflation rider, may be sufficient once you also factor in your Social Security and pension income. If you have little income and not much in savings, you will likely need to rely on Medicaid should you need care during your retirement years. If you have a nice pension and $2 million or more saved, you may feel comfortable being self-insured, which means that you would pay out-of-pocket for care needs. If your financials are in the middle of these two scenarios, having essential coverage for a reasonable premium could be a life-saver in your later years.


What Are the Odds?

According to the American Association for Long-Term Care Insurance: “The lifetime probability of becoming disabled in at least two activities of daily living or of being cognitively impaired is 68% for people age 65 and older.” It is wise to look at the statistics, but your personal odds are either zero or 100%. You either will need care or you will not. If you need care for more than four or five months, you will be glad you have long-term care insurance.



Long -term care insurance allows you to maintain your independence and afford quality care, and it also helps you reduce the financial and psychological stress that a long-term care event can impose on your family. The cons are the cost of the premiums. Whether you buy insurance or not, you will want to have a plan in place so that you and your family will know what to do if you need care. That plan involves talking to family and friends about their ability to help, if and when help is needed. You may also want to consider alternatives to long-term care insurance, such as making arrangements to live with family or friends or moving into a continuing care community.

Read more related articles at:

Long-Term Care Insurance – To Buy or Not to Buy?

How Hybrid Life Insurance Pays For Long-Term Care

Also, read one of our previous Blogs at:

What’s the Latest Trend in Long-Term Care Insurance?

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


Estate Planning and divorce

Estate Planning Documents to Update When Getting a Divorce

Estate Planning Documents to Update When Getting a Divorce

Estate Planning Documents to Update When Getting a Divorce. If you are considering divorce or beginning the process of getting divorced, you must review your estate plan to make sure it reflects your life change. Keep in mind that it doesn’t matter how far along the divorce is or how long the action has been pending; the law considers you to be legally married until the judge signs the final decree ending the marriage. If you die or become disabled before the final decree of divorce, your estranged spouse may still have legal control over you and your estate and may be entitled to most, if not all, of your estate. This may not be what you intended. Through proper estate planning documents, you can provide that someone other than your former spouse will have control over you and your estate, and you can limit your estranged spouse’s rights as a beneficiary of your estate.


Divorce and Your Will

If you created a will before you were divorced, most states’ law provides that any provision in the will for the benefit of your former spouse is ineffective. The will is not revoked; it is interpreted as if your ex-spouse had predeceased you. On the other hand, in some states, divorce revokes the entire will. In either case, the former spouse has no rights in your estate as a beneficiary executor , or administrator. It’s important to know that in a few states, the will stands and the former spouse may inherit. Consult with an attorney if you’re concerned about an ex inheriting your estate. The rules of the law apply only to the ex-spouse. If your will makes provisions for the ex-spouse’s children (or more remote issue) or other relatives of your ex-spouse and is not wholly revoked by the divorce, these provisions of the will still stand. The divorce does not affect them. If you made a will before the divorce and indicated in the document that you intended the provisions for your soon-to-be ex-spouse to be valid after the divorce, then your announced intention overcomes the law.


Divorce and Your Trust

If you die during the divorce and before the final decree, the rule of law excluding your pending ex-spouse does not help you. If your will leaves everything to your soon-to-be ex, that’s who will get your estate. Any other estate planning document, such as a trust, will also be interpreted in the same way provided that it is revocable at the time of your death. If you have made a revocable inter-vivos trust, sometimes called a living trust, provisions in this document for your ex-spouse will be invalid. The fact that the trust must be revocable for this rule to apply is important. If you made an irrevocable trust before your divorce, such as an irrevocable life insurance trust, and your ex-spouse is a beneficiary of that trust, the law will not save you. In an irrevocable trust, if the transfer to the trust was made prior to the divorce and the ex-spouse’s property rights were determined at that time, it cannot be changed. To avoid unintended results in this scenario, it is essential to specify that a divorce will remove the current spouse as a beneficiary. Using the terms “wife,” “husband” or “spouse” in the document means whomever you are married to, not a specific individual.


Divorce and Your Power of Attorney

If you have signed a power of attorney giving your spouse the authority to act as your agent, in most states this grant of power is revoked when either spouse files an action for divorce. Until the action for divorce is filed, the spouse can act using the power of attorney—this can be a hazardous situation. Note that unlike the will, the provision naming the spouse as a power of attorney is usually revoked when the divorce action is filed, not at the final decree. Unless you revoke a power of attorney when you and your spouse separate they can still use it. In states where spouses must be separated for a specific amount of time before filing for divorce, a spouse with power of attorney can wreak havoc. When a divorce action is filed, only the spouse’s appointment as an agent in the power of attorney is revoked. If the power of attorney includes an appointment of the spouse as guardian—if a court-appointed guardian is necessary—filing for divorce does not revoke that appointment. Instead, a court would have to decide if filing for divorce is a good reason not to appoint a spouse as a guardian. When the divorce becomes final, however, the appointment of the ex-spouse as guardian is revoked.


Divorce and Your Living Will

Another issue to think about during a pending divorce is health care issues. Have you remembered to change your living will and medical directive? In some states, filing for divorce or being granted a final divorce decree doesn’t revoke a spouse’s designation as an agent under your medical directive. Arguably, the agent is the same as an agent under a power of attorney and under the law of most states, an agent’s power is terminated when divorce is filed. If an ex-spouse is designated as a beneficiary on a life insurance policy, annuity contract, pension, profit-sharing plan, or other contractual arrangement providing for payments to the spouse, most state laws provide that any designation which was revocable at the time of death is ineffective. This means that the ex-spouse, while still listed as a beneficiary, does not receive any benefits that could be revoked. However, if the designation or a separate contract (such as a property settlement agreement) provides that the designation is to remain in effect even after the divorce, then the appointment remains effective, Note that the financial institution involved will not know whether or not there has been a divorce. If the ex-spouse claims the benefit as the named beneficiary, most state laws specifically provide that the paying company shall have no liability. Ex-spouses are liable, but as is always the case with financial liability, one can only recover funds if the defendant still has the funds and has not spent them. If you are considering divorce or are in the process of getting a divorce, it is essential to discuss your needs with a trusted estate attorney so that you can guarantee that you and your estate are protected. Estate Planning Documents to Update When Getting a Divorce

Read more related articles at:

8 Estate Planning Moves If You Are Getting Divorced

9 Things You Need To Know About Estate Planning After Divorce

Also, read one of our previous Blogs at:

What Does My Estate Plan Look Like after Divorce?

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


revocable vs irrevocable trusts

Revocable vs. Irrevocable Living Trusts

Revocable vs. Irrevocable Living Trusts

The goals behind your trust will help you choose the type



Trusts come in all shapes and sizes, and many are formed with specific purposes in mind. A living trust is one that the grantor—the individual who creates and funds the trust—sets up during their lifetime. These are also sometimes called “inter vivos” trusts and they’re different from testamentary trusts, which are created under the terms of an individual’s will after death. All living trusts are either revocable or irrevocable. The primary difference between the two is whether you, as the grantor, have the ability to change the trust over time.

 Revocable Trust  Irrevocable Trust
Can be changed (or revoked) at any time Cannot be changed once it is signed (with rare legal exceptions)
Grantor can act as trustee Grantor must elect a trustee
Assets belong to the grantor until transferred Assets belong to beneficiaries, under management of trustee
Assets are not shielded from lawsuits against the grantor Assets are shielded from grantor’s creditors
Not subject to probate Assets are not subject to grantor’s estate taxes
Can be set up to transfer assets automatically at a trigger event AB and ABC types provide tax benefits for spouses
Converts to irrevocable trust upon grantor’s death Can be used to make tax-exempt charitable donations
Protects the privacy of property and beneficiaries Can incorporate life insurance benefits

If you set up a revocable trust, all assets transferred to the trust are still considered your own personal property because you continue to have absolute control over them. This is beneficial if you want to keep control over the assets, but the downside is that ​creditors can still reach them.2 A revocable trust offers no protection if you’re sued—your assets are at risk just as if you still owned them in your own name. The law takes the position that if you can undo or change the trust at any time, you still own the assets. It’s common for the grantor of a revocable trust to personally act as trustee, managing its assets, after the trust is formed and funded. Irrevocable trusts, on the other hand, are commonly used to provide asset protection for the grantor and their family. By placing assets into an irrevocable trust, the grantor gives up complete control over and access to the trust assets. They therefore can’t be reached by the grantor’s creditors because the grantor no longer owns them. But the grantor can name their family as beneficiaries so they’re still providing for them—the assets are just outside of the reach of creditors.

Probate and Taxation

Revocable trusts avoid probate of the assets they hold. Although they’re still taxable for estate tax purposes, they’ll pass directly to the beneficiaries named in the trust agreement without probate court involvement. This means that they constitute part of your estate at the time of your death, so both state estate taxes and federal estate taxes might come due. Irrevocable trusts are commonly used to remove the value of property from a person’s estate so that property can’t be taxed when the person dies. The individual who transfers assets into an irrevocable trust permanently gives those assets to the trustee and to the beneficiaries of the trust. Because they no longer own the assets, they don’t contribute to the value of the estate. They’re therefore not subject to estate taxes when the individual dies.


A revocable trust can protect the privacy of your property and beneficiaries when you die. Because it’s not subject to probate, your trust agreement remains a private document. It doesn’t become a public record for all the world to see.6 Your assets and who you’ve decided to leave your estate to will remain a private family matter. Irrevocable trusts are not public record, but in the case of probate or other court-related matters, documentation may become part of the record. Contrast this with a last will and testament that has to be admitted for probate. It becomes a public record that anyone can see and read as soon as it’s submitted to the court.

Government Assistance

With revocable trusts, since the grantor technically owns all of the assets until transfer, they are considered in calculations when applying for government aid programs and for Medicaid planning purposes. With an irrevocable trust, since you’re effectively giving away your property for all time, its value can no longer be counted against you for purposes of qualifying for government programs in a time of need. For example, eligibility for Medicaid is restricted to those with negligible assets and income. You can ensure that your property ultimately will go to your beneficiaries, not to a nursing home, when you place it in such a trust. There’s a caveat here, however. Medicaid imposes a five-year “look back” period in 49 states and Washington, D.C., as of 2020.9 The value of property that’s given away within this time period still counts against the applicant for qualifying purposes. Many states make an exception for irrevocable funeral trusts, however, where you can set aside enough for your burial within this five-year period.

Which Is Right for You?

The most important factor to consider in choosing a which type of trust to establish is whether you will need to modify it over time in order to accomplish your specific goals. Both revocable and irrevocable trusts can be adapted to suit a grantors specific wishes, but this is accomplished in different ways. Revocable trusts can be changed over time, either by the grantor’s will or through clauses that can impose modifications for certain triggering events; irrevocable must utilize different forms that must be established at the time of creation.

How to Customize a Revocable Trust

By default, a revocable living trust becomes irrevocable when the grantor dies because the grantor is no longer available to make changes to it. However, revocable trusts can be designed to break into separate irrevocable trusts at the time of the grantor’s death for the benefit of children or other beneficiaries. Additionally, revocable trusts can be set up to adjust to designated triggering events For example, a revocable trust allows you to plan for mental disability. Assets held in the name of the trust can be managed by a successor trustee if the grantor becomes mentally incapacitated. The grantor can name the trustee, someone they trust to take over in the event that they can no longer personally manage the trust.

How to Customize an Irrevocable AB Trust

An AB trust is created for the benefit of a surviving spouse and it’s irrevocable. It can make full use of the deceased spouse’s exemption from estate taxes through funding of the B part of the trust at the time of death with property valued at or below the estate tax exemption. Then, if the value of the deceased spouse’s estate exceeds the estate tax exemption, the A Trust will be funded for the benefit of the surviving spouse and payment of estate taxes will be deferred until after the surviving spouse dies.

How to Customize an Irrevocable ABC Trust

ABC trusts are a type of irrevocable trust that can be used by married couples who live in states that collect a state estate tax when that state’s estate tax exemption  is less than the federal estate tax exemption.12 For example, in 2021 the federal estate tax exemption is $11.7 million, while for many states it is $1 million or less.13 The first $1 million of an estate would go into the B Trust to protect that portion from estate taxes. The next $10.58 million would go into the C Trust, and anything over the total of $11.58 million would go into the A Trust.

How to Customize an Irrevocable Life Insurance Trust

Irrevocable life insurance trusts are set up to accept life insurance benefits at the time of the grantor’s death. This can take a sizable chunk of value out of an estate that’s potentially subject to the estate tax, bringing the value down below that year’s estate tax exemption threshold. You would name the trust as the policy’s beneficiary, then you can set terms for the trust dictating who ultimately gets the proceeds at the time of your death.

How to Customize an Irrevocable Charitable Trust

An irrevocable trust can accomplish charitable estate planning through a charitable remainder trust or a charitable lead trust. As the names suggest, beneficiaries are paid first from a charitable remainder trust, with the balance going to a cited charity or charities. The charity is paid first in a charitable lead trust, then the beneficiaries get their shares of the remaining assets. The grantor can claim a charitable income tax deduction in the year the transfer is made to the irrevocable trust if the initial funding of assets into the trust is made while they’re still alive. The estate will receive the charitable estate tax deduction instead if the initial transfer of assets into a charitable trust doesn’t occur until after the grantor’s death.

The Bottom Line

When you’re setting up a living trust, consider carefully how certain you are about the terms, assets, and beneficiaries. If you are ready to grant your property without hesitation, you may wish to take advantage of some of the tax benefits that come with an irrevocable trust. If you are not 100% sure about the grant, or if there’s the possibility that things might change down the road, a revocable trust may be best for you. Either way, an attorney or other estate planning professional can help you set up the trust instrument in a way that best works with your wishes.

Read more related articles at:

Revocable Trust vs. Irrevocable Trust: What’s the Difference?

Revocable vs. Irrevocable Trusts: How They Affect Your Estate Plans

Also, read one of our previous Blogs at:

Do I Need a Revocable Living Trust?

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


COVID Vaccine

Why Are Some Vaccinated People Still Getting COVID-19?

Why Are Some Vaccinated People Still Getting COVID-19?

Key Takaways

  • A limited number of people who have been vaccinated may still get a “breakthrough” COVID-19 infection.
  • However, research shows that vaccinated people are much less likely to become seriously ill or need to be hospitalized compared to unvaccinated people.
  • Most breakthrough infections are likely related to the lifting of pandemic protocols like mask-wearing and social distancing, as well as the highly transmissible Delta variant.

At the start of the summer, fully vaccinated people were able to drop some of the precautions that were put in place during the early days of the pandemic, such as wearing a mask and social distancing. However, as cases and deaths rise nationwide, the Centers for Disease Control and Prevention (CDC) is now urging vaccinated people living in areas with high rates of transmission to mask up again. While the possibility of getting COVID-19 after being vaccinated may come as shock to some, public health experts say this is expected. And these “breakthrough” cases of COVID-19 are less common and severe than those experienced by the unvaccinated.

What Is a Breakthrough COVID-19 Case?

A breakthrough COVID-19 infection occurs when someone who is fully vaccinated against COVID-19 (at least 14 days after all recommended doses of an FDA-authorized COVID-19 vaccine) tests positive for the virus.2


How Vaccines Work

David Dowdy, MD, associate professor of epidemiology at Johns Hopkins Bloomberg School of Public Health, tells Verywell that the COVID-19 vaccines are working. They are very effective against the virus, as well as the Delta variant that is now the dominant strain in the U.S.But confusion arises when people misunderstand how a vaccine works. Dowdy says that a vaccine is “not steel armor”—it works by giving your immune system a head start at recognizing a virus. It primes your body, helping it fight off the virus faster during possible future encounters. Sten Vermund, MD, PhD, dean of the Yale School of Public Health, tells Verywell that “all vaccines— every single one of them—work to prepare the immune system to see the protein antigen on the virus that represents the invader before the invasion actually happens.” However, Dowdy says this “doesn’t mean that this virus can’t still get into and start to expand in your system.” Breakthrough infections are to be expected with any vaccine. “People think that you get vaccinated, you won’t get infected. That’s not true at all,” Vermund says. “You get infected, but your immune system responds with such vigor and such specificity that you don’t get seriously ill.”

Like a Seatbelt, Not Armor

You can think of vaccines working like seatbelts or airbags in cars, Vermund adds. Having these protections in your car does not that mean you will not get into an accident. It also doesn’t ensure that if you are in a crash, you won’t get injured. However, you might walk away with minor injuries compared to what it would have been like if your car didn’t have them at all. Using that analogy, Vermund says that “being unvaccinated is like having no seatbelt, or airbag.” Researchers find that people who are vaccinated but get COVID-19 anyway tend to have a much milder illness compared to unvaccinated people. The number of vaccinated people who have become seriously ill is vanishingly small.— STEN VERMUND, MD, PHD “If you do a survey at Yale New Haven Hospital—or whatever your hometown is—and you find out who is in the ICU right now, you’re going to find most likely nobody who’s vaccinated,” Vermund says. “The number vaccinated people who have become seriously ill is vanishingly small.” That’s the key point to understand; Vermund says that vaccines are “transforming a potentially lethal virus into something like a mild flu or a cold.”

What This Means For You

Vaccines jumpstart the immune system and help them quickly recognize and fight a virus, but they do not prevent a virus from getting into the body in the first place. That’s why some people who have been fully vaccinated against COVID-19 have gotten a “breakthrough” infection. Getting vaccinated is still the best way to protect yourself not just from the virus, but from severe illness if you do get sick.


The Threat of the Delta Variant

The Delta variant of the COVID-19 virus is spreading rapidly, nearly doubling cases every 10 days, Dowdy says. The variant is highly transmissible, causing spikes in hospitalizations in states with low vaccination rates. Because the Delta variant is more easily transmitted, Dowdy explains, vaccinated people are more likely to come into contact with unvaccinated people infected with the variant, leading to a breakthrough infection. Still, this variant doesn’t tell the whole story. “It’s important to somewhat separate the Delta variant from just increased transmission as a whole,” Dowdy says. “The Delta variant has come on the scene, but at the same time we as a society have been living life a little more freely.”Many states have loosened protocols from the early days of the pandemic—like mask-wearing and social distancing. This summer, people are also gathering and traveling more “How much of the increase in infections is due to the Delta variant versus due to our behavior is not entirely known, but my bias is that it’s more due to our behavior than to the variant,” Dowdy says, noting that other countries have been dealing with the Delta variant longer than the U.S., but have not had the same spike in deaths. Breakthrough COVID-19 cases are more common because infections are more common, Vermund adds. The cases will be more common in states with low vaccination rates that are keeping transmission high and less common in areas with high vaccination uptake. “All of us are more likely to be in contact with someone who is infected, and perhaps even to contact them more closely than we would have before, meaning there might be more of the virus transmitted than before,” Vermund says. “And the more of those events that happen, the more likely it is going to happen that the virus makes it past that head start we’ve given our immune systems with the vaccine.”

Read more related articles at:

special needs trusts

Estate Planning For Special Needs Family Members

Estate Planning For Special Needs Family Members

Estate Planning For Special Needs Family Members. Without proper planning, leaving an inheritance or making a gift to a disabled family member can cause the disabled person to lose their means-based government benefits, such as Supplemental Security Income or Medicaid.

This kind of mistake can wreak havoc on many lives, which is why it is so important to work with an experienced estate planning attorney who is knowledgeable about special needs planning. The article, “Crafting an estate plan to include disabled family members” from The Ledger explains what is involved in special needs planning.

Supplemental Security Income (SSI) is a federal program that pays monthly benefits to disabled or blind adults and children. To qualify, an individual must have fewer than $2,000 of countable assets and very limited income. Medicaid is a Federal and State health insurance program that helps people with limited assets and income pay for their medical costs.

While it is common for people to name their spouse or children as beneficiaries in their estate plan, if your spouse or child is disabled and receiving government benefits, an inheritance will result in their loss of benefits, unless special planning is done.

A Special Needs Trust (SNT) is designed for disabled beneficiaries so that cash, real property, or any other assets are available for the person’s benefit, while still allowing the disabled person to receive their means-based government benefits.

There are several different ways to accomplish this, depending on your family’s situation. One way is to have a testamentary Special Needs Trust created within a will or trust that goes into effect, when the creator of the trust or the will dies. A SNT can also be created while you are living and can be funded, instead of waiting for it to go into effect at your death.

A third-party SNT can be named as the beneficiary of life insurance policies and retirement accounts, investment accounts or real property. The third-party SNT assets that are not used for the disabled beneficiary during their lifetime, can pass to non-disabled beneficiaries upon the death of the disabled beneficiary.

These assets will be free from Medicaid recovery liens, since the property in a third party SNT does not belong to the disabled beneficiary.

A first party SNT is set up and funded with assets that do belong to a disabled person, and no other funds can be contributed to this type of trust by any other donors. These are often used when a large settlement following an injury is awarded. In Florida and in other states, first-party SNTs are subject to Medicaid recovery to reimburse the state.

Special needs trusts are complicated trusts and require the knowledge of an experienced attorney who devotes most, if not all, of their practice to SNTs and trust and estate planning.

Read more related articles here:

Special needs plan should be carefully considered

Medicare Advantage Special Needs Plans (SNPs)

Also, read one of our previous Blogs at:

How Do I Plan for a Loved One with Special Needs?

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


What Are My Rights As a Power of Attorney.

Power of Attorney

The person named in a power of attorney to act on your behalf is commonly referred to as your “agent” or “attorney-in-fact.” With a valid power of attorney, your agent can take any action permitted in the document. Often your agent must present the actual document to invoke the power. For example, if another person is acting on your behalf to sell an automobile, the motor vehicles department generally will require that the power of attorney be presented before your agent’s authority to sign the title will be honored. Similarly, an agent who signs documents to buy or sell real property on your behalf must present the power of attorney to the title company. Similarly, the agent has to present the power of attorney to a broker or banker to effect the sale of securities or opening and closing bank accounts. However, your agent generally should not need to present the power of attorney when signing checks for you.Why would anyone give such sweeping authority to another person? One answer is convenience. If you are buying or selling assets and do not wish to appear in person to close the transaction, you may take advantage of a power of attorney. Another important reason to use power of attorney is to prepare for situations when you may not be able to act on your own behalf due to absence or incapacity. Such a disability may be temporary, for example, due to travel, accident, or illness, or it may be permanent.

If you do not have a power of attorney and become unable to manage your personal or business affairs, it may become necessary for a court to appoint one or more people to act for you. People appointed in this manner are referred to as guardians, conservators, or committees, depending upon your local state law. If a court proceeding, sometimes known as intervention, is needed, you may not have the ability to choose the person who will act for you. Few people want to be subject to a public proceeding in this manner so being proactive to create the appropriate document to avoid this is important. A power of attorney allows you to choose who will act for you and defines his or her authority and its limits, if any. In some instances, greater security against having a guardianship imposed on you may be achieved by you also creating a revocable living trust.

Who Should Be Your Agent?

You may wish to choose a family member to act on your behalf. Many people name their spouses or one or more children. In naming more than one person to act as agent at the same time, be alert to the possibility that all may not be available to act when needed, or they may not agree. The designation of co-agents should indicate whether you wish to have the majority act in the absence of full availability and agreement. Regardless of whether you name co-agents, you should always name one or more successor agents to address the possibility that the person you name as agent may be unavailable or unable to act when the time comes.

There are no special qualifications necessary for someone to act as an attorney-in-fact except that the person must not be a minor or otherwise incapacitated. The best choice is someone you trust. Integrity, not financial acumen, is often the most important trait of a potential agent.

How The Agent Should Sign?

Assume Michael Douglas appoints his wife, Catherine Zeta-Jones, as his agent in a written power of attorney. Catherine, as agent, must sign as follows: Michael Douglas, by Catherine Zeta-Jones under POA or Catherine Zeta-Jones, attorney-in-fact for Michael Douglas.  If you are ever called upon to take action as someone’s agent, you should consult with an attorney about actions you can and cannot take and whether there are any precautionary steps you should take to minimize the likelihood of someone challenging your actions. This is especially important if you take actions that directly or indirectly benefit you personally.

What Kinds of Powers Should I Give My Agent?

In addition to managing your day-to-day financial affairs, your attorney-in-fact can take steps to implement your estate plan. Although an agent cannot revise your will on your behalf, some jurisdictions permit an attorney-in-fact to create or amend trusts for you during your lifetime, or to transfer your assets to trusts you created. Even without amending your will or creating trusts, an agent can affect the outcome of how your assets are distributed by changing the ownership (title) to assets. It is prudent to include in the power of attorney a clear statement of whether you wish your agent to have these powers.

Gifts are an important tool for many estate plans, and your attorney-in-fact can make gifts on your behalf, subject to guidelines that you set forth in your power of attorney. For example, you may wish to permit your attorney-in-fact to make “annual exclusion” gifts (up to $14,000 in value per recipient per year in 2013) on your behalf to your children and grandchildren. It is important that the lawyer who prepares your power of attorney draft the document in a way that does not expose your attorney-in-fact to unintended estate tax consequences. While some states permit attorneys-in-fact to make gifts as a matter of statute, others require explicit authorization in the power of attorney. If you have older documents you should review them with your attorney. Because of the high estate tax exemption ($5 million inflation adjusted) many people who had given agents the right to make gifts may no longer wish to include this power. Others, however, in order to empower their agent to minimize state estate tax might continue or add such a power. Finally, there may be reasons not to limit the gifts your attorney-in-fact may make to annual exclusion gifts in order to facilitate Medicaid planning or to minimize or avoid state estate tax beyond what annual exclusion gifts alone might permit.

In addition to the power of your agent to make gifts on your behalf, many powers of your attorney-in-fact are governed by state law. Generally, the law of the state in which you reside at the time you sign a power of attorney will govern the powers and actions of your agent under that document. If you own real estate, such as a vacation home, or valuable personal property, such as collectibles, in a second state, you should check with an attorney to make sure that your power of attorney properly covers such property.

What if I move?

Generally, a power of attorney that is valid when you sign it will remain valid even if you change your state of residence. Although it should not be necessary to sign a new power of attorney merely because you have moved to a new state, it is a good idea to take the opportunity to update your power of attorney. The update ideally should be part of a review and update of your overall estate plan to be sure that nuances of the new state law (and any other changes in circumstances that have occurred since your existing documents were signed) are addressed.

Will my Power of Attorney expire?

Some states used to require the renewal of a power of attorney for continuing validity. Today, most states permit a “durable” power of attorney that remains valid once signed until you die or revoke the document. You should periodically meet with your lawyer, however, to revisit your power of attorney and consider whether your choice of agent still meets your needs and learn whether developments in state law affect your power of attorney. Some powers of attorney expressly include termination dates to minimize the risk of former friends or spouses continuing to serve as agents. It is vital that you review the continued effectiveness of your documents periodically.

Read more related articles at:

Things You Can and Can’t Do With Power of Attorney

When POA Isn’t Enough: Authorizations Needed to Act on a Loved One’s Behalf

Also, read one of our previous Blogs at:

Different Types of Power of Attorney (and Who Needs Them)

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

Yes, you need an estate plan

Yes, You Need an Estate Plan, Even If You Don’t Have an Estate

Yes,  You Need an Estate Plan, Even If You Don’t Have an Estate have an “estate” – and you need a plan for it.

Questions this article can help you answer:

  • What is estate planning?
  • What is included in an estate plan?
  • How do I make an estate plan?

You may hear the word “estate” and think mansions and sprawling grounds; but you don’t have to be wealthy to have an estate. An estate consists of all the property a person owns, including real estate, cars, cash, and other assets. Anyone who wants their assets to be transferred to one or more surviving loved ones after they pass away should consider establishing a formal estate plan. This important set of legal documents can make it easier for your family to ensure that your wishes and needs are met if you’re unable to speak for yourself.

What is an Estate Plan?

An estate plan is a collection of documents that protects your assets and personal property (your “estate”) and explains how you want to pass them down. It documents your wishes and specifies exactly who will guard those wishes and act on them in your absence.

What Does an Estate Plan Include?

A will, which identifies who you want to:
  • Receive each of your assets
  • Be your children’s guardian
  • Be an executor to oversee the estate plan process
A power of attorney, who:
  • Makes financial decisions if you’re unable to
  • Pays your bills, manages investments, and makes legal or business decisions
A medical power of attorney, who:
  • Makes your medical decisions if you’re unable to
A living will, which:
  • Documents your end-of-life preferences
A trust, which:
  • Controls how and when your assets are distributed
  • Reduces or eliminates estate taxes

What Are Three Critical Functions of an Estate Plan?

1. Protects your assets for your family (or other heirs)

An estate plan can act as a safety net that helps preserve the value of your assets, minimizes wait times for disbursement, and helps ensure the legacy you envisioned is carried out.

2. Gives you a say in who receives your belongings

By creating a will, you can name your assets, beneficiaries, and an executor who will carry out your wishes after you pass away.

3. Allows you to choose who will make your decisions

An estate plan often contains a durable power of attorney form and a healthcare proxy form – two vital legal documents that ensure that your plan will be carried out the way you want it to. A durable power of attorney form appoints a trusted relative or friend to manage your legal and financial affairs should you become incapable.1 And a healthcare proxy form gives someone permission to make healthcare decisions for you based on your wishes if you’re unable to do so.2

If you have a durable power of attorney or a healthcare proxy, it’s important to include that information on accounts such as IRAs, 401(k) plans, and insurance policies.

How to Get Started With Estate Planning

1. Begin to calculate your worth by creating a list of all of your financial assets, personal property, and document liabilities

2. Ask a financial professional to refer you to a qualified estate planning attorney

3. Determine (or update) your beneficiaries

4. Revisit your estate plan regularly

How Life Insurance and Annuities Can Help With Estate Planning

Life insurance and annuities can play an essential role in estate planning. Life insurance can provide a source of income for surviving family members. Proceeds from life insurance can typically bypass the probate process (the distribution of an estate) so they can provide an immediate source of cash that survivors can use to pay off taxes or remaining debts, such as a mortgage.

Annuities with a named beneficiary can generally avoid the probate process, potentially providing income directly to beneficiaries without delay.

Talk to a financial professional to learn more information about the importance of estate planning and partner with other professionals to help you develop an estate plan.

Read more related articles at:

5 Reasons You Need an Estate Plan

Leaving a legacy: Why everyone needs an estate plan

Also, read one of our previous Blogs at:

Why Everyone Needs an Estate Plan

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


back to school with covid

Florida Student’s Return Back to School Amidst the New COVID 19 Surge

As kids return to school, most Florida counties report COVID-19 cases four times higher than last year

·3 min read

Florida Student’s Return Back to School Amidst the New COVID 19 Surge.  Most Florida children are returning back to school in areas where COVID-19 outbreaks are far more intense than they were when school started last year. In most counties, cases are at least four times higher than a year ago, a USA TODAY Network analysis of Johns Hopkins University data shows. Five counties report a more than tenfold increase. Cases among children are surging, too, raising questions about the health consequences of students returning to campuses and a state ban on school mask mandates while vaccines are available for only some of the schoolchildren.

Florida Gov. DeSantis to school officials: Enforce mask mandate, get your salaries withheld

Is it a cold, allergies or delta variant? How to know, and when to get tested for COVID

Public health experts and pediatricians said last fall that the most important factor to consider when deciding whether to start classes in-person was the amount of viral spread in the community at large. With cases so much higher than last year, districts are going against those recommendations by welcoming students to campus and limiting online learning options. Those moves follow instructions from the state government, which also prohibited schools from requiring masks for all children.

Over the seven days before last Friday’s state report, Florida saw 13,596 cases among children under 12, and 13,858 cases among ages 12 to 19.

COVID in Florida this year compared to 2020

In the corresponding report a year ago, Florida reported 2,396 cases under age 12 and 3,596 cases among ages 12 to 19.

In five counties – Indian River, Liberty, Sarasota, St. Johns and Pasco – new weekly case counts are more than 10 times higher than they were before the start of the last school year.

In 31 counties, nearly half of Florida’s counties, new case counts were at least five times higher than they’d been before those counties started school in 2020.

Read more related articles here:

Florida kids head back to school amid COVID-19 surge

Florida grapples with record Covid surge as school year set to start for some

Safety tips for returning to school during COVID-19

Also, read one of our previous Blogs at :

What Can Be Expected of the Delta Variant of COVID-19?

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

Unfunded Trust

What Exactly Does it Mean to Fund a Trust?

What Exactly Does it Mean to Fund a Trust?

Funding a trust is the process of transferring your assets to the ownership of your trust. Once ownership is transferred, the trustee will have control of these assets.Learn why funding a trust is important and how it is done.

Funding a trust refers to taking assets that are titled in the settlor’s name or in joint names with others and retitling them into the name of the settlor’s revocable living trust. It can also involve taking assets that require a beneficiary designation and naming the revocable living trust as the primary or secondary beneficiary of those assets. The person who creates and funds a revocable living trust can be referred to as the settlor, grantor, trust maker, or trustor. Settlors may also chose to designate themselves as trustees or beneficiaries, depending on the reasons for the trust. Funding a revocable living trust ensures that the settlor’s property is governed by the terms of the trust agreement:

  • After the settlor dies, the selected death trustee will be able to manage and then transfer accounts held in the name of the trust to the ultimate beneficiaries named in the trust agreement.

How Funding a Trust Works

For a revocable living trust to function properly, it is not enough for the trust maker  to simply sign the trust agreement. After the agreement has been signed, the settlor must “fund” his or her assets into the trust. Funding a trust involved transferring property to the trust. How that works will depend on the type of property. For some assets you will need to transfer ownership to the trust. For others, you may need to designate the trust as a beneficiary.

  • Titled property (boat, car, motorcycle, airplane, etc): Obtain a new title showing the living trust as the owner.
  • Untitled property (jewelry, collectibles, etc): Create a signed and dated document called an Assignment of Property that designates the trust as the owner.1
    • Bank accounts: These vary by bank and may involve closing on account and transferring funds to a new account owned by the trust.
    • Certificates of Deposit (CDs): Wait until the CD matures, then open a new CD in the trust’s name in order to avoid early withdrawal penalties.
    • Securities (stocks, bonds, brokerage account, etc): These can vary by brokerage and type of security. Stock and bond certificates may need to be reissued with the trust as the owner. Ask your broker how to transfer ownership of these assets.

Real estate: Transfer ownership using a quickclaim deed If you have a mortgage or belong to a homeowners’ association, you may need permission.

Your county or city may have additional paperwork that you need to fill out to legally transfer real estate ownership to your trust.
  • Business interests (shares in partnership, LLC, corporation, etc): Retitle shares in the name of the trust.
  • Life insurance, retirement accounts, health savings accounts (HSAs), medical savings accounts (MSAs): Designate the trust as the beneficiary for each account or policy. If you are unsure how to transfer ownership of any property to your trust, speak to your lawyer or the institution that holds the asset, such as your bank or broker. Once assets are owned by the trust, they are protected from probate and under the control of the trust and its trustees.


Do I Need to Fund a Trust?

If you have created a revocable living trust, funding it is a critical step in the process. An unfunded revocable living trust is not worth much more than the paper it’s written on. It is important to take the time to retitle your assets in the name of your trust after you have taken the time to work with your estate planning attorney to create a revocable living trust that fits your particular family situation and financial needs. Failing to fund a trust properly can create several long-term difficulties.

Assets Cannot Be Managed by Your Trustee

The trustee of a revocable living trust has no power whatsoever over any of the settlor’s property that has not been retitled in the name of the trust. If you create a trust without funding it, then become mentally incapacitated, you loved ones may need to establish a court-supervised guardianship or conservatorship to manage the any assets that are not held in the name of the trust.

Assets May Need to Go Through Probate

Any property has not been retitled in the name of your revocable living trust may have to go through probate after your death. This defeats one of the main benefits of creating a revocable living trust—avoiding probate.2

Assets May Not Go to Your Intended Beneficiaries

After the your death, a property that is held outside of your revocable living trust cannot be disposed of as provided in the trust agreement. Instead, assets held outside of the trust may pass by rights of survivorship, depending on the state that you live in. Funding your trust ensures that your assets go where you want them to go.1

Key Takeaways
  • Funding a trust is the process of transferring your assets to the ownership of your trust. How that works will depend on the type of property.
  • Assets that are titled in the settlor’s name or in joint names with others are retitled into the name of the settlor’s revocable living trust. For assets that require a beneficiary designation, the revocable living trust can be designated as the primary or secondary beneficiary.
  • Once ownership is transferred, the trustee will have control of these assets.
  • Properly funding a trust ensures that assets can be controlled by your trustee, go to the correct beneficiary, and do not have to go through probate after your death.

NOTE: When researching Trust Attorney’s one key question to ask is do they assist you in funding your Trust. A lot of Attorney’s have a one and done policy where they will create your Trust but hand it over to you to figure out how to fund it. Here at Legacy Planning Law Group we have a designated Asset Alignment coordinator who helps you to align all the assets you choose to go into your trust with you. Don’t know what assets should go into the Trust and which can or should be left out and how to make sure those left out go to your chosen beneficiary? That is our Asset Alignment coordinators area of expertise. We collect the data for all your assets and make suggestions on which assets should go where and then we assist  you in getting those assets into your Trust, or creating beneficiary based solutions or pay on death arrangements. Be  aware, not all Attorney’s offer this service and we offer it free with almost all of our Trust plans. Also remember, an unfunded Trust is a useless Trust. From beginning of drafting your Trust to the final fully aligned Trust, we are with you every step of the way! And, in addition, if you are in our Client Care Program, which is also free for you to try for one year with most trusts, we continue to monitor your Trust for any changes in laws, or any changes that may arise for you. We offer continuing education, including family meetings, where we educate your chosen trustee on the duties and responsibilities of taking on that role. We also can explain to your family in layman’s terms the conditions of the Trust you have created if you so desire. You will find this will negate future family squabbles as your loved ones are made aware of your express wishes now, and there can be no question as to what you have decided to do with your Legacy. This way there is no ambiguity as to what you chose and wanted, when the time comes that you may be incapacitated or pass on.

Read more related articles at:

What Assets Can Go Into a Revocable Living Trust?

What Not to Put Into a Revocable Living Trust

What Happens to Property Not Included in 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.


Gun trusts

Bequeathing And Inheriting Guns: What To Do With Firearms When Someone Dies

Bequeathing And Inheriting Guns: What To Do With Firearms When Someone Dies

Bequeathing And Inheriting Guns: What To Do With Firearms When Someone Dies. Map out a smooth transition because it can get complicated.When you die, your assets go to the people named in your Will or Trust, right? Sure — except if they’re guns. Then maybe not. With firearms, inheritance gets complicated. Whether your wishes can be followed depends on where you live, what types of guns you own, and the individuals who would inherit.

Laws and procedures for transferring ownership of your firearms — whether you’re alive or dead — differ depending on the type of gun(s) and the state where the decedent last resided.

From a legal standpoint, broadly speaking, guns fall into two classifications. Some firearms, along with certain accessories, are subject to the National Firearms Act of 1934 (NFA) and its revised version, Title II of the Gun Control Act of 1968. These include fully automatic weapons, short-barreled rifles, short-barreled shotguns, and silencers. They must have serial numbers and be registered with the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

Unregistered NFA weapons are contraband. They can’t be passed down to an heir and can’t be registered after the fact. If the executor of the estate discovers unregistered NFA firearms, he/she must contact the local ATF office to arrange for them to be “abandoned” – in other words, turned over to law enforcement.

Firearms not covered by the NFA include revolvers, hunting rifles, shotguns, and semi-automatic pistols bought for personal or home protection.

For those firearms that are not covered by the NFA, as well as licensed NFA weapons, the best way to transfer to an heir is to go through an entity with a Federal Firearm License (FFL) such as a licensed gun dealer. After assisting the executor and the heir in filling out the required forms, the FFL will hold onto the firearms while completing the background check. Upon passing the background check, the heir can collect the firearms after 10 working days. You can find local FFLs by searching online at sites like FFLGunDealers.net and Gunbroker.com.

Gun Trusts

A  Gun Trust is a way to avoid the transfer process described above. The Trust is an entity you create that holds the title to your firearms. You can name multiple trustees, who then share the right to possess and use the firearms covered by the Trust.

Since the Trust stays in effect after your death, the executor of the estate isn’t involved, and the firearms don’t have to go through probate.

Trusts are not intended to circumvent the law. However, some gun owners believe a Trust might help get around any future laws prohibiting transfer or inheritance of certain weapons.

While a simple Revocable Living Trust  generally ends once your assets are distributed after your death, a Gun Trust can be designed to last for multiple generations, and it must take federal and state gun laws into account. To create a Gun Trust, it’s essential to work with an attorney very familiar with the laws governing the use, possession, and transfer of weapons in your state. For example, you wouldn’t want to name a trustee who is prohibited by law from possessing the firearms, for example.

Gun Trusts are useful for people who want to share the use of their weapons with others during their lifetime. But recent ATF rules have removed some of the advantages of a Gun Trust for inheritance purposes. Carefully consider the advantages and disadvantages before setting up a Trust; don’t fall for aggressive lawyers’ sales pitches without doing your own research and/or getting a second opinion.

Crossing State Lines

Let’s say that in your Will you leave a collection of non-NFA guns to your daughter, who lives in another state. Federal law doesn’t prevent her from picking them up and driving them home across state lines. But she must comply with the laws of both her own state (or city) and yours pertaining to registration and transportation of firearms. For example, if her state requires a firearms permit, she will need to get one.

It couldn’t hurt to research this yourself ahead of time and let her know the rules, since there are transport procedures to follow no matter where she’s driving.

Keep in mind, though — and this is good advice for any transaction involving guns — that laws are changing all the time. Do your research, stay informed, but if you have any doubt at all, consult a lawyer with knowledge of firearm laws. The last thing you want is someone you love getting pulled over for a routine traffic stop and getting booked for transporting firearms.

Prohibited Persons

Federal and state laws forbid certain people to possess firearms. You can bequeath firearms to anyone you choose, but they will not be able to take possession of the guns if they are a “prohibited person” as defined by the ATF, or if they fall into certain additional categories that may be specified in the laws of your state.

Prohibited persons under federal law include unlawful users of a controlled substance, people convicted of serious crimes or domestic violence misdemeanors, those judged “mentally defective,” and others. State laws impose additional restrictions.

A record of specific felonies, violent misdemeanors, or mental conditions may disqualify people from owning guns. Some states restrict alcohol abusers from possessing firearms. Age requirements vary too; for example, minors (people under 18) may not possess firearms in California. If you’re in doubt, check with a lawyer who is familiar with your state’s gun laws and rights.

Sell Or Surrender

If you have no interest in owning any of the firearms passed down to you, and the guns have considerable value, you can sell them to a licensed dealer — the same type we mentioned above to assist in transferring ownership. If you don’t care about the money and just want to get rid of them and make sure they don’t end up in anyone else’s hands again, you can surrender them to your local police department.

While the rules for this vary depending on where you live, you should contact the station to find out the proper procedure before just driving down there with a bag of weapons. If you’re worried that you could get in trouble for even possessing or moving the guns, take a wild guess as to what we suggest you should do. Yep, check with a lawyer first.

Have we said “check with a lawyer” enough times in this article? That’s because where guns are concerned, it really is a good idea, in any but the simplest of situations.

So when Bequeathing And Inheriting Guns, that is what to do with Firearms when Someone Dies.

Read more related articles at: 

Own a Gun? Careful: You Might Need a Gun Trust


Also, read one of our previous Blogs at:

Why Should I Get a Gun Trust in Florida?

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


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