When the First Spouse Dies, Middle Class Surviving Spouse's Need to Address Not Only Their Deceased Spouse's Succession, But Also their Own Medicaid Eligibility Planning.

Should You Take More Than Your RMDs in Order to Pay Less Tax and Protect Funds from Nursing Home Costs?

What Does "Asset Protection" Mean? It Means Different Things to Different People

Which Provisions Need to be in Trusts to Have Nursing Home Protection and Qualify for Long Term Care Medicaid?

What Kind of Questions You Should Expect To Answer from Your Estate Planning Attorney

Can You Take Away Someone's Trust If They Do A Bad Thing?

The 5 Year Look Back Period Regarding Transfers and Long Term Care Medicaid Eligibility

What Should You Tell Your Heirs About Your Estate and How You Are Leaving It?

Can You Amend or Modify a Trust that is Irrevocable?

If You Create a Trust, Do You Need a Will?

Rabalais Estate Planning, LLC, is a Louisiana estate planning and administration law firm. Since 1991, Paul Rabalais has been helping Louisiana individuals, couples and families arrange legal affairs to protect what they have. Mr. Rabalais earned his B.S. in Finance from Louisiana State University, his law degree from the LSU Law Center, and his Masters in Tax Law from the Boston University School of Law. Mr. Rabalais is the author of the book, "Estate Planning in Louisiana, A Layman's Guide." He has spoken to hundreds of consumer groups about estate planning. He has taught continuing education to Louisiana attorneys regarding a variety of estate planning related matters. This channel is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.

Estate Planning with Paul Rabalais

This post describes the regulations that exist regarding when assets in a trust are considered resources of someone who is applying for Long Term Care Medicaid.Many Seniors are concerned about the cost of long term care, especially if it is necessary that they spend months or years in a skilled nursing facility.Some Seniors explore getting assets out of their name timely to make themselves eligible for Medicaid. These same Seniors, however, are uncomfortable putting assets in their children's names for fear of losing control of the assets, and for fear of giving their children unwanted tax consequences.Some people explore putting assets in trust for purposes of gaining future Long Term Care Medicaid eligibility. The Louisiana Long Term Care Medicaid Eligibility Manual (the "Manual") has specific rules regarding whether trust assets are considered a resource of the Medicaid applicant, rendering them ineligible for Medicaid benefits.Regarding when the Medicaid applicant is a trustee of a trust, the Manual provides:"Count the trust as a resource, regardless of whose funds wereoriginally deposited into the trust, if the applicant/enrollee: is the trustee, and has the legal right to:- revoke the trust, and- use the money for his own benefit."Regarding when the Medicaid applicant is a Settlor of a trust, the Manual provides:"Count the trust as a resource if the applicant/enrollee is the settlor(created the trust) and: has the right to revoke it, and can use the funds for his own benefit"Regarding when assets are not considered a resource and penalty periods apply to the transfer of the assets to a trust, the Manual provides:Consider penalties under the transfer of resource policy (refer toI-1670 Transfer of Resources For Less Than Fair Market Value) ifthe applicant/enrollee: created the trust, does not have the right to revoke it, and cannot use the principal for his own benefit.The traditional "avoid probate" revocable living trust clearly is a resource for a Medicaid applicant. Many people, however, create other trusts, and transfer assets to those trusts, which can enable a Senior to avoid the risks inherent in transferring assets during into children's names, while starting the five year penalty period and protecting assets from the nursing home spend down.This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.Paul RabalaisLouisiana Estate Planning Attorneywww.RabalaisEstatePlanning.comPhone: (225) 329-2450

This post describes the regulations that exist regarding when assets in a trust are considered resources of someone who is applying for Long Term Care Medicaid. Many Seniors are concerned about the cost of long term care, especially if it is necessary that they spend months or years in a skilled nursing facility. Some Seniors explore getting assets out of their name timely to make themselves eligible for Medicaid. These same Seniors, however, are uncomfortable putting assets in their children's names for fear of losing control of the assets, and for fear of giving their children unwanted tax consequences. Some people explore putting assets in trust for purposes of gaining future Long Term Care Medicaid eligibility. The Louisiana Long Term Care Medicaid Eligibility Manual (the "Manual") has specific rules regarding whether trust assets are considered a resource of the Medicaid applicant, rendering them ineligible for Medicaid benefits. Regarding when the Medicaid applicant is a trustee of a trust, the Manual provides: "Count the trust as a resource, regardless of whose funds were originally deposited into the trust, if the applicant/enrollee:  is the trustee, and  has the legal right to: - revoke the trust, and - use the money for his own benefit." Regarding when the Medicaid applicant is a Settlor of a trust, the Manual provides: "Count the trust as a resource if the applicant/enrollee is the settlor (created the trust) and:  has the right to revoke it, and  can use the funds for his own benefit" Regarding when assets are not considered a resource and penalty periods apply to the transfer of the assets to a trust, the Manual provides: Consider penalties under the transfer of resource policy (refer to I-1670 Transfer of Resources For Less Than Fair Market Value) if the applicant/enrollee:  created the trust,  does not have the right to revoke it, and  cannot use the principal for his own benefit. The traditional "avoid probate" revocable living trust clearly is a resource for a Medicaid applicant. Many people, however, create other trusts, and transfer assets to those trusts, which can enable a Senior to avoid the risks inherent in transferring assets during into children's names, while starting the five year penalty period and protecting assets from the nursing home spend down. This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship. Paul Rabalais Louisiana Estate Planning Attorney <a href="http://www.RabalaisEstatePlanning.com" rel="nofollow" target="_blank">www.RabalaisEstatePlanning.com</a> Phone: (225) 329-2450

The Rules on Irrevocable Trusts and Nursing Home Medicaid

Many people prepare for the inevitability of their death by creating trusts to ease the transfer of, among other assets, the non-retirement brokerage account. Brokerage accounts titled in the name of your revocable living trust at your death escape having to go through the court-supervised Succession or Probate procedure, which many find unnecessarily time-consuming, expensive, and stressful.Many people, as they age, have multiple accounts at a brokerage firm. Many have traditional IRAs, Roth IRAs, and non-retirement brokerage accounts. It's these non-retirement accounts that, when an individual's name at their death, get frozen and must go through probate.In order to have your brokerage accounts titled in the name of your revocable living trust at your death, you must establish your trust and open a trust account at the financial institution. I took a look at the requirements that three different financial institutions have regarding establishing an account in the name of a revocable living trust. Here are my findings:(1) Charles Schwab. For a revocable trust, you must a copy of the trust title page of first page and all signature pages with the account application. You could supply an Extract of Trust instead with the application.(2) Vanguard. You must attach with the Application for Trusts, copies of pages of the trust that contain the name and date of the trust, the trustees' names, and the signature pages.(3) Ally Bank. To set up an trust account at Ally Bank, you must upload the pages describing the Trust, including the formal name of the Trust, Grantors and Trustees; the notarized signature page with Grantor and Trustee signatures – in some states, there may be a separate page completed by the notary; any amendments to the original Trust; pages with Trustee powers and provisions related to incapacity or death of a Trustee; and the page listing the beneficiaries who will receive the funds if the Grantor of the Trust passes away.The key here to keeping the setup process simple is to give the financial institution what they are asking for. And before you know it, your legal affairs and your assets will be set up in a way so that your survivors will be thanking you one day for what you did to make it easy for them.This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.Paul RabalaisLouisiana Estate Planning Attorneywww.RabalaisEstatePlanning.comPhone: (225) 329-2450

Many people prepare for the inevitability of their death by creating trusts to ease the transfer of, among other assets, the non-retirement brokerage account. Brokerage accounts titled in the name of your revocable living trust at your death escape having to go through the court-supervised Succession or Probate procedure, which many find unnecessarily time-consuming, expensive, and stressful. Many people, as they age, have multiple accounts at a brokerage firm. Many have traditional IRAs, Roth IRAs, and non-retirement brokerage accounts. It's these non-retirement accounts that, when an individual's name at their death, get frozen and must go through probate. In order to have your brokerage accounts titled in the name of your revocable living trust at your death, you must establish your trust and open a trust account at the financial institution. I took a look at the requirements that three different financial institutions have regarding establishing an account in the name of a revocable living trust. Here are my findings: (1) Charles Schwab. For a revocable trust, you must a copy of the trust title page of first page and all signature pages with the account application. You could supply an Extract of Trust instead with the application. (2) Vanguard. You must attach with the Application for Trusts, copies of pages of the trust that contain the name and date of the trust, the trustees' names, and the signature pages. (3) Ally Bank. To set up an trust account at Ally Bank, you must upload the pages describing the Trust, including the formal name of the Trust, Grantors and Trustees; the notarized signature page with Grantor and Trustee signatures – in some states, there may be a separate page completed by the notary; any amendments to the original Trust; pages with Trustee powers and provisions related to incapacity or death of a Trustee; and the page listing the beneficiaries who will receive the funds if the Grantor of the Trust passes away. The key here to keeping the setup process simple is to give the financial institution what they are asking for. And before you know it, your legal affairs and your assets will be set up in a way so that your survivors will be thanking you one day for what you did to make it easy for them. This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship. Paul Rabalais Louisiana Estate Planning Attorney <a href="http://www.RabalaisEstatePlanning.com" rel="nofollow" target="_blank">www.RabalaisEstatePlanning.com</a> Phone: (225) 329-2450

Establishing a Revocable Living Trust Brokerage Account

Congratulations. You took some major steps toward making settling your estate easier. The Probate can be difficult, it takes longer than people want. It's expensive, a hassle, it's a court proceeding.There's a big estate planning problem out there. The titling process is getting neglected causing families to go through probate.However, when the revocable living trust is fully funded, the estate settlement is a beautiful thing. But your living trust is only as effective as the assets that you title into it.Many fully funded trusts are settled without attorney involvement. The surviving spouse maintains access to assets. The surviving spouse can sell the home and buy another, and can access all financial accounts.Even when probate is avoided, survivors are having to deal with funeral homes, death certificates, the Social Security office, the VA, financial institutions that hold IRAs,  bills that keep coming in, and insurance companies if the deceased had life insurance or annuities. Then, when you add on top of that the requirement of a probate when it was unexpected, then that sometimes is that straw that broke the camel’s back – survivor’s are fragile – going through grief and stress of the loss of a loved one.There are a few reasons that trusts don’t get funded. People forget they owned that piece of property. People thought they had beneficiaries on all accounts. People didn’t think about buying the new property in the name of their trust. People didn’t think about opening that new account in the name of their trust. People may not have known that they needed to transfer their LLC to their trust. They kept a minimal amount of shares out of the trust. They thought their attorney was going to handle getting everything in the trust, but an attorney can only transfer certain assets into your trust.Do these three things:(1) Share this information. Surely you know other friends and colleagues that can benefit from this information. If you are an estate planning attorney, share with your clients along with a note to contact you if they need legal help. If you are a financial advisor, share with your clients and prospective clients along with a note to contact you if they need help titling and beneficiary designations.(2) Fund your trust. While the process isn’t difficult, it’s easy to get sidetracked or procrastinate. Just make funding your trust a priority and keep going until you’re finished. Take a look at everything you have this is titled. Determine whether assets are probate or nonprobate. Probate assets, in general, go in your trust. There are many excellent attorneys around the country willing to help. If you need a lawyer’s help, get it. While you are at it, update your beneficiary designations.(3) Write a Comment. if this video can help one person avoid probate and make things easier for their survivors, it’s worth it. Comment with your positive comments and experiences on youtube or linkedin or wherever else you might see or hear this, so that others can and will benefit from your experience.Now go leave a legacy! Your family will thank you for it.This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.Paul RabalaisLouisiana Estate Planning Attorneywww.RabalaisEstatePlanning.comPhone: (225) 329-2450

Congratulations. You took some major steps toward making settling your estate easier. The Probate can be difficult, it takes longer than people want. It's expensive, a hassle, it's a court proceeding. There's a big estate planning problem out there. The titling process is getting neglected causing families to go through probate. However, when the revocable living trust is fully funded, the estate settlement is a beautiful thing. But your living trust is only as effective as the assets that you title into it. Many fully funded trusts are settled without attorney involvement. The surviving spouse maintains access to assets. The surviving spouse can sell the home and buy another, and can access all financial accounts. Even when probate is avoided, survivors are having to deal with funeral homes, death certificates, the Social Security office, the VA, financial institutions that hold IRAs, bills that keep coming in, and insurance companies if the deceased had life insurance or annuities. Then, when you add on top of that the requirement of a probate when it was unexpected, then that sometimes is that straw that broke the camel’s back – survivor’s are fragile – going through grief and stress of the loss of a loved one. There are a few reasons that trusts don’t get funded. People forget they owned that piece of property. People thought they had beneficiaries on all accounts. People didn’t think about buying the new property in the name of their trust. People didn’t think about opening that new account in the name of their trust. People may not have known that they needed to transfer their LLC to their trust. They kept a minimal amount of shares out of the trust. They thought their attorney was going to handle getting everything in the trust, but an attorney can only transfer certain assets into your trust. Do these three things: (1) Share this information. Surely you know other friends and colleagues that can benefit from this information. If you are an estate planning attorney, share with your clients along with a note to contact you if they need legal help. If you are a financial advisor, share with your clients and prospective clients along with a note to contact you if they need help titling and beneficiary designations. (2) Fund your trust. While the process isn’t difficult, it’s easy to get sidetracked or procrastinate. Just make funding your trust a priority and keep going until you’re finished. Take a look at everything you have this is titled. Determine whether assets are probate or nonprobate. Probate assets, in general, go in your trust. There are many excellent attorneys around the country willing to help. If you need a lawyer’s help, get it. While you are at it, update your beneficiary designations. (3) Write a Comment. if this video can help one person avoid probate and make things easier for their survivors, it’s worth it. Comment with your positive comments and experiences on youtube or linkedin or wherever else you might see or hear this, so that others can and will benefit from your experience. Now go leave a legacy! Your family will thank you for it. This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship. Paul Rabalais Louisiana Estate Planning Attorney <a href="http://www.RabalaisEstatePlanning.com" rel="nofollow" target="_blank">www.RabalaisEstatePlanning.com</a> Phone: (225) 329-2450

If You Have a Revocable Living Trust, Listen To This Now!

Episode 4: Five Aspects of Estate Planning and Avoiding Capital Gains Tax

Should You Use a Last Will or Living Trust as the Legal Instrument to Pass Along Your Estate?

How To Keep Your Sons-In-Law and Daughters-In-Law Out of Your Estate

This post should help you understand the difference between a testamentary trust and an inter vivos trust.All trusts are either testamentary or inter vivos. Inter vivos trusts are also called "Living Trusts."The best way to describe the difference is to put them in context of a real-life situation.Let's say Jack is engaged in his estate planning. He is married to Jill and he has two children. He wants to leave his estate in a way so that Jill is taken care of, but after Jill dies, he wants his estate to go to his two children.Jack goes to an attorney and the attorney prepares a Will with Testamentary Trust. The terms of the trust are a part of Jack's last will and testament. Jack's will says that when Jack dies, Jack's estate will go to the "Jack Testamentary Trust." After Jack dies, Jill and Jack's kids assume that no probate is necessary because "Jack had a trust." However, their assumption is incorrect. There will always be a probate (or in Louisiana called a "Succession") when someone leaves their assets or estate to a testamentary trust. When Jack dies with a testamentary trust, his assets that are in his name when he dies will be frozen, and the courts must oversee the management and ultimate transfer of the assets to the trust.Now, instead, let's say that, instead of Jack creating a testamentary trust, he creates the stand-alone "Jack Inter Vivos Trust" or the "Jack Living Trust," If Jack transfers his asset to the Jack Living Trust during his lifetime, no Succession or Probate will be necessary when Jack dies because the assets will already be in the trust and there will be no assets in Jack's name that would be frozen and subject to the court-supervised transfer process.This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.Paul RabalaisLouisiana Estate Planning Attorneywww.RabalaisEstatePlanning.comPhone: (225) 329-2450

This post should help you understand the difference between a testamentary trust and an inter vivos trust. All trusts are either testamentary or inter vivos. Inter vivos trusts are also called "Living Trusts." The best way to describe the difference is to put them in context of a real-life situation. Let's say Jack is engaged in his estate planning. He is married to Jill and he has two children. He wants to leave his estate in a way so that Jill is taken care of, but after Jill dies, he wants his estate to go to his two children. Jack goes to an attorney and the attorney prepares a Will with Testamentary Trust. The terms of the trust are a part of Jack's last will and testament. Jack's will says that when Jack dies, Jack's estate will go to the "Jack Testamentary Trust." After Jack dies, Jill and Jack's kids assume that no probate is necessary because "Jack had a trust." However, their assumption is incorrect. There will always be a probate (or in Louisiana called a "Succession") when someone leaves their assets or estate to a testamentary trust. When Jack dies with a testamentary trust, his assets that are in his name when he dies will be frozen, and the courts must oversee the management and ultimate transfer of the assets to the trust. Now, instead, let's say that, instead of Jack creating a testamentary trust, he creates the stand-alone "Jack Inter Vivos Trust" or the "Jack Living Trust," If Jack transfers his asset to the Jack Living Trust during his lifetime, no Succession or Probate will be necessary when Jack dies because the assets will already be in the trust and there will be no assets in Jack's name that would be frozen and subject to the court-supervised transfer process. This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship. Paul Rabalais Louisiana Estate Planning Attorney <a href="http://www.RabalaisEstatePlanning.com" rel="nofollow" target="_blank">www.RabalaisEstatePlanning.com</a> Phone: (225) 329-2450

The Differences Between Testamentary Trusts and Inter Vivos (Living) Trusts

Married Couple Case Study - $3m Estate: Episode 6

Who Pays Your Long Term Care Expenses (Part 1 of 3)?

Generally, people who establish an estate planning legal program either establish a Will-based estate plan or a Trust-based estate plan. When someone establishes a Trust-based plan, often one of the goals is to have assets titled in the name of the trust at death so that those assets can be distributed immediately to the trust beneficiaries without going through the Louisiana Succession, and its inherent delays, expenses, and aggravations.People often ask, "If I have a trust, do I need a Will." Well, a pour over will is used in conjunction with a trust based plan. The purpose of the pour over will is to serve as a safety net. If, either intentionally or unintentionally, assets at death are titled in the name of the person who established the trust, then the probate proceeding will be necessary to pour-over those individually owned assets into the trust. Often, the ideal scenario is to have all assets titled correctly so that, at death, there are no "probate assets" in the individual's name, and the pour-over Will does not even need to be used. But the pour-over will is prepared and signed in virtually every instance where there is a trust-based plan.This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.Paul RabalaisLouisiana Estate Planning Attorneywww.RabalaisEstatePlanning.comPhone: (225) 329-2450

Generally, people who establish an estate planning legal program either establish a Will-based estate plan or a Trust-based estate plan. When someone establishes a Trust-based plan, often one of the goals is to have assets titled in the name of the trust at death so that those assets can be distributed immediately to the trust beneficiaries without going through the Louisiana Succession, and its inherent delays, expenses, and aggravations. People often ask, "If I have a trust, do I need a Will." Well, a pour over will is used in conjunction with a trust based plan. The purpose of the pour over will is to serve as a safety net. If, either intentionally or unintentionally, assets at death are titled in the name of the person who established the trust, then the probate proceeding will be necessary to pour-over those individually owned assets into the trust. Often, the ideal scenario is to have all assets titled correctly so that, at death, there are no "probate assets" in the individual's name, and the pour-over Will does not even need to be used. But the pour-over will is prepared and signed in virtually every instance where there is a trust-based plan. This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship. Paul Rabalais Louisiana Estate Planning Attorney <a href="http://www.RabalaisEstatePlanning.com" rel="nofollow" target="_blank">www.RabalaisEstatePlanning.com</a> Phone: (225) 329-2450

What is a "Pour-Over" Will?

Occasionally, for unfortunate emotional or relationship issues, there is an heir of an estate who refuses to accept either the inheritance of money or the inheritance of a specific item. This can cause the probate or Succession to come to a screaching halt, causing delays and expense for everyone involved.While it is not uncommon for an heir to formally "disclaim" an inheritance for a variety of reasons, such as income, gift, or estate tax reasons, it is uncommon for someone to fail to communicate even though a small amount of communication could result in a financial windfall for the individual.Louisiana Succession law has a procedure to address this. If an heir refuses to accept and sign a receipt for an inheritance of funds, then, after a hearing, the court may order an executor to deposit the funds in either a state or national bank, or in the registry of the court to the credit of the person entitled to the funds. A receipt showing the court that the deposit was made is sufficient to allow the executor to be discharged.If an heir refuses to receive an item (called in Louisiana, a "corporeal movable"), then the court may direct the executor to make some other disposition of the item.It is worth noting that this same thing can happen when a trust beneficiary refuses to accept a distribution of trust principal. While our trust code does not specifically address this issue, it would make sense that these funds sit in a trust account for the benefit of the refusing beneficiary, or perhaps the trustee could petition the proper court for some direction.This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.Paul RabalaisLouisiana Estate Planning Attorneywww.RabalaisEstatePlanning.comPhone: (225) 329-2450

Occasionally, for unfortunate emotional or relationship issues, there is an heir of an estate who refuses to accept either the inheritance of money or the inheritance of a specific item. This can cause the probate or Succession to come to a screaching halt, causing delays and expense for everyone involved. While it is not uncommon for an heir to formally "disclaim" an inheritance for a variety of reasons, such as income, gift, or estate tax reasons, it is uncommon for someone to fail to communicate even though a small amount of communication could result in a financial windfall for the individual. Louisiana Succession law has a procedure to address this. If an heir refuses to accept and sign a receipt for an inheritance of funds, then, after a hearing, the court may order an executor to deposit the funds in either a state or national bank, or in the registry of the court to the credit of the person entitled to the funds. A receipt showing the court that the deposit was made is sufficient to allow the executor to be discharged. If an heir refuses to receive an item (called in Louisiana, a "corporeal movable"), then the court may direct the executor to make some other disposition of the item. It is worth noting that this same thing can happen when a trust beneficiary refuses to accept a distribution of trust principal. While our trust code does not specifically address this issue, it would make sense that these funds sit in a trust account for the benefit of the refusing beneficiary, or perhaps the trustee could petition the proper court for some direction. This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship. Paul Rabalais Louisiana Estate Planning Attorney <a href="http://www.RabalaisEstatePlanning.com" rel="nofollow" target="_blank">www.RabalaisEstatePlanning.com</a> Phone: (225) 329-2450

What If Heir Refuses To Accept Inheritance Of Money or Items?

Occasionally, after someone dies, the family starts to question what their deceased relative really owned. Sometimes we hear statements from children or other relatives like:"I thought Dad had more CDs at the bank.""I thought Dad had another savings account.""I thought Dad owned stock in some other companies.""I thought Dad had an annuity and a life insurance policy."Well, there is no central registry that you can go to and determine everything that someone owned when they died. But there are both informal and formal ways that you can dig and determine what someone owned on the date of their death.There are a couple of obvious formal ways that you can try and discover additional assets. First, go back and look at the last few years of their tax returns. They would likely have received tax reporting statements from financial institutions that show that accounts were owned. Second, check their mail. If they owned financial accounts, it's likely they may received account statements in the mail.And then there is the formal way to discover someone's assets after they died. Let's use an example of Dad, who died with a last will and testament. Dad names Son as executor. People are questioning the fact that Dad owned additional accounts. Once Son works with the lawyers and the court system to get confirmed as the executor, the courthouse will issue certified copies of Letters of Independent Executorship. Son can then go to every financial institution where he thinks Dad may have had an account, and the "Letters of Independent Executorship" require the third parties to disclose Dad's account information to Son, who is the independent executor.So, there is no central registry one can go to and figure out what someone owned when they died, but there are both informal and formal ways to locate whether a deceased person owned additional accounts or other assets. Your estate planning and estate settlement attorney can help you get the proper court authority and make the right kinds of inquiries to expedite this process. And ideally, none of this is necessary if the deceased person would have, during his or her lifetime, maintained a current inventory of assets and communicated that inventory to the appropriate family members or other loved ones.This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.Paul RabalaisLouisiana Estate Planning Attorneywww.RabalaisEstatePlanning.comPhone: (225) 329-2450

Occasionally, after someone dies, the family starts to question what their deceased relative really owned. Sometimes we hear statements from children or other relatives like: "I thought Dad had more CDs at the bank." "I thought Dad had another savings account." "I thought Dad owned stock in some other companies." "I thought Dad had an annuity and a life insurance policy." Well, there is no central registry that you can go to and determine everything that someone owned when they died. But there are both informal and formal ways that you can dig and determine what someone owned on the date of their death. There are a couple of obvious formal ways that you can try and discover additional assets. First, go back and look at the last few years of their tax returns. They would likely have received tax reporting statements from financial institutions that show that accounts were owned. Second, check their mail. If they owned financial accounts, it's likely they may received account statements in the mail. And then there is the formal way to discover someone's assets after they died. Let's use an example of Dad, who died with a last will and testament. Dad names Son as executor. People are questioning the fact that Dad owned additional accounts. Once Son works with the lawyers and the court system to get confirmed as the executor, the courthouse will issue certified copies of Letters of Independent Executorship. Son can then go to every financial institution where he thinks Dad may have had an account, and the "Letters of Independent Executorship" require the third parties to disclose Dad's account information to Son, who is the independent executor. So, there is no central registry one can go to and figure out what someone owned when they died, but there are both informal and formal ways to locate whether a deceased person owned additional accounts or other assets. Your estate planning and estate settlement attorney can help you get the proper court authority and make the right kinds of inquiries to expedite this process. And ideally, none of this is necessary if the deceased person would have, during his or her lifetime, maintained a current inventory of assets and communicated that inventory to the appropriate family members or other loved ones. This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship. Paul Rabalais Louisiana Estate Planning Attorney <a href="http://www.RabalaisEstatePlanning.com" rel="nofollow" target="_blank">www.RabalaisEstatePlanning.com</a> Phone: (225) 329-2450

Episode 3 - Locating Assets a Deceased Person Owned

Let’s look at and analyze the 2019 gift and estate tax rules. First, the basics: the gifting annual exclusion amount remained at $15,000 for 2019, and the gift and estate tax exclusion amount increased from $11.18 million in 2018 to $11.4 million in 2019.Now let’s take a closer look at these. Regarding the $15,000 annual exclusion amount, it’s worth noting in any discussion regarding gifting, that if a person (donor) makes a gift in excess of $15,000 in a calendar year, the tax consequence is that the donor must file a gift tax return (IRS Form 709) showing that part of the gift and estate tax exclusion amount was used. In almost every “taxable gift,” no tax is due. The gift merely needs to be reported. And it’s worth noting that married couples can each give $15,000 without any gift tax reporting requirement, which further means that married couples can donate $30,000 to as many individuals as they want, each year, without being required to report the gift on a gift tax return.Regarding the gift and estate tax exclusion amount, note similarly that each spouse has an exclusion amount of $11.4 million for 2019. In theory, the married couple can exclude assets valued at $22.8 million from the 40% estate tax.It’s worth noting that the estate tax law, in its current form, is scheduled to “sunset” after 2025. Absent Congressional action, the exclusion amount reverts back to $5 million, adjusted for inflation, in 2026. There is concern from some about the potential for clawback of lifetime gifts. Specifically, the sunset of the higher exclusion amount could deny estates of individuals who die after 2025 the full benefit of the higher exclusion amount applied to previous large gifts.Recently, the IRS proposed regulations to resolve this issue. The example they gave was of a taxpayer who made gifts taxable gifts of $9 million prior to 2026, and then died during or after 2026, when the gift and estate tax exclusion amount was less than $9 million. The proposed regulations of the IRS state that the credit amount against estate tax will be based on the higher $9 million amount rather than the lesser amount that may be in effect after 2025.Note that we still have portability (which makes it easier for married couples to get the full utilization of two estate tax exemptions), step-up in basis for capital gains tax purposes, and gifts in excess of $15,000 still must be reported even though typically no gift tax is due.Happy New Year!This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.Paul RabalaisLouisiana Estate Planning Attorneywww.RabalaisEstatePlanning.comPhone: (225) 329-2450

Let’s look at and analyze the 2019 gift and estate tax rules. First, the basics: the gifting annual exclusion amount remained at $15,000 for 2019, and the gift and estate tax exclusion amount increased from $11.18 million in 2018 to $11.4 million in 2019.Now let’s take a closer look at these. Regarding the $15,000 annual exclusion amount, it’s worth noting in any discussion regarding gifting, that if a person (donor) makes a gift in excess of $15,000 in a calendar year, the tax consequence is that the donor must file a gift tax return (IRS Form 709) showing that part of the gift and estate tax exclusion amount was used. In almost every “taxable gift,” no tax is due. The gift merely needs to be reported. And it’s worth noting that married couples can each give $15,000 without any gift tax reporting requirement, which further means that married couples can donate $30,000 to as many individuals as they want, each year, without being required to report the gift on a gift tax return.Regarding the gift and estate tax exclusion amount, note similarly that each spouse has an exclusion amount of $11.4 million for 2019. In theory, the married couple can exclude assets valued at $22.8 million from the 40% estate tax.It’s worth noting that the estate tax law, in its current form, is scheduled to “sunset” after 2025. Absent Congressional action, the exclusion amount reverts back to $5 million, adjusted for inflation, in 2026. There is concern from some about the potential for clawback of lifetime gifts. Specifically, the sunset of the higher exclusion amount could deny estates of individuals who die after 2025 the full benefit of the higher exclusion amount applied to previous large gifts.Recently, the IRS proposed regulations to resolve this issue. The example they gave was of a taxpayer who made gifts taxable gifts of $9 million prior to 2026, and then died during or after 2026, when the gift and estate tax exclusion amount was less than $9 million. The proposed regulations of the IRS state that the credit amount against estate tax will be based on the higher $9 million amount rather than the lesser amount that may be in effect after 2025.Note that we still have portability (which makes it easier for married couples to get the full utilization of two estate tax exemptions), step-up in basis for capital gains tax purposes, and gifts in excess of $15,000 still must be reported even though typically no gift tax is due.Happy New Year!This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.Paul RabalaisLouisiana Estate Planning Attorney<a href="http://www.RabalaisEstatePlanning.com" rel="nofollow" target="_blank">www.RabalaisEstatePlanning.com</a>Phone: (225) 329-2450

An Analysis of the 2019 Estate and Gift Tax Rules

Keep Property "In the Family" for Generations

Protecting the Home Property If You Enter a Nursing Home

A common estate planning principle communicated by spouses who have children from prior marriages and relationships is, “If I predecease my spouse, I want my assets to be available for my surviving spouse’s needs, but when my surviving spouse dies, I want my assets to revert back to MY children.”This can get complicated when the estate consists of Traditional IRAs, as many estates do. Let’s take the example of a Husband and Wife who each have two children. When H dies, his IRA is worth $1,000,000. In the year after Husband dies, Wife is 80 years old.  When it comes to income tax planning and IRAs, most recommend to keep the IRA balance as large as possible, allowing an IRA owner to earn investment income on deferred income taxes. In this post we will discuss two strategies: (1) Naming the surviving spouse as the designated beneficiary of Husband’s IRA; and (2) Naming a trust (for the benefit of the spouse) as the beneficiary of Husband’s IRA. When a surviving spouse is the designated beneficiary of an IRA, the surviving spouse’s ability to roll over inherited benefits to her own IRA gives her a powerful tax-deferring option, not available to any other IRA beneficiaries. If the surviving spouse holds the IRA as an owner, her Required Minimum Distributions (RMDs) are determined using the Uniform Lifetime Table under which her Applicable Distribution Period (ADP) is the joint life expectancy of the surviving spouse and a hypothetical 10-years-younger beneficiary. If she withdraws only the RMDs under the Uniform Lifetime Table, the IRA is guaranteed to outlive the surviving spouse. And it’s likely that the IRA will be worth more in the surviving spouse’s late 80’s than it was when she inherited it at age 80. Let’s look at some numbers. Since Wife can use the Uniform Lifetime Table, her first required distribution the year after Husband dies (assuming a $1,000,000 IRA value) is $53,500 (5.35% of the IRA value). The next year her RMD is 5.59%. And the next year, 5.85%. If the investment performance of the IRA exceeds these distribution percentages, and she only takes the RMDs, the IRA will grow.  The downside, however, is that since Wife is treated as the owner of the IRA, Wife can name whoever she wants as the beneficiary of beneficiaries of her IRA. She could exclude Husband’s children by naming Wife’s children, or perhaps even Wife’s new spouse that she married after Husband died! So instead of naming Wife as the designated beneficiary of Husband’s IRA, Husband considers naming a trust for Wife as beneficiary. The trust instrument might provide that RMDs go to Wife for her lifetime, but when Wife subsequently dies, trust assets revert back to Husband’s children. But since a trust was named as the beneficiary of Husband’s IRA, even if the trust qualifies as a “see-through” trust, RMDs after Husband dies will be based on the single life expectancy of the surviving spouse (Wife) which results in substantially less income tax deferral than would be available if the surviving spouse were named as the outright beneficiary and rolled over the benefits into her own IRA. Let’s look back at the numbers. If a trust for Wife is named as beneficiary of Husband’s IRA, the first RMD when Wife is 80 (based on the same $1,000,000 IRA) will be $98,000 (9.8% of the IRA value). At age 81, the RMD will exceed 10% of the account value. And each year, the percentage will increase. If Wife lives long enough after Husband dies, the RMDs based on the required single life expectancy table will cause most of the benefits to be distributed to Wife outright which will defeat the purpose of trying to protect those IRA assets for Husband’s children. So keep in mind that there are tradeoffs when it comes to naming beneficiaries of IRAs.This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.Paul RabalaisLouisiana Estate Planning Attorneywww.RabalaisEstatePlanning.comPhone: (225) 329-2450

A common estate planning principle communicated by spouses who have children from prior marriages and relationships is, “If I predecease my spouse, I want my assets to be available for my surviving spouse’s needs, but when my surviving spouse dies, I want my assets to revert back to MY children.”This can get complicated when the estate consists of Traditional IRAs, as many estates do. Let’s take the example of a Husband and Wife who each have two children. When H dies, his IRA is worth $1,000,000. In the year after Husband dies, Wife is 80 years old. When it comes to income tax planning and IRAs, most recommend to keep the IRA balance as large as possible, allowing an IRA owner to earn investment income on deferred income taxes. In this post we will discuss two strategies: (1) Naming the surviving spouse as the designated beneficiary of Husband’s IRA; and (2) Naming a trust (for the benefit of the spouse) as the beneficiary of Husband’s IRA. When a surviving spouse is the designated beneficiary of an IRA, the surviving spouse’s ability to roll over inherited benefits to her own IRA gives her a powerful tax-deferring option, not available to any other IRA beneficiaries. If the surviving spouse holds the IRA as an owner, her Required Minimum Distributions (RMDs) are determined using the Uniform Lifetime Table under which her Applicable Distribution Period (ADP) is the joint life expectancy of the surviving spouse and a hypothetical 10-years-younger beneficiary. If she withdraws only the RMDs under the Uniform Lifetime Table, the IRA is guaranteed to outlive the surviving spouse. And it’s likely that the IRA will be worth more in the surviving spouse’s late 80’s than it was when she inherited it at age 80. Let’s look at some numbers. Since Wife can use the Uniform Lifetime Table, her first required distribution the year after Husband dies (assuming a $1,000,000 IRA value) is $53,500 (5.35% of the IRA value). The next year her RMD is 5.59%. And the next year, 5.85%. If the investment performance of the IRA exceeds these distribution percentages, and she only takes the RMDs, the IRA will grow. The downside, however, is that since Wife is treated as the owner of the IRA, Wife can name whoever she wants as the beneficiary of beneficiaries of her IRA. She could exclude Husband’s children by naming Wife’s children, or perhaps even Wife’s new spouse that she married after Husband died! So instead of naming Wife as the designated beneficiary of Husband’s IRA, Husband considers naming a trust for Wife as beneficiary. The trust instrument might provide that RMDs go to Wife for her lifetime, but when Wife subsequently dies, trust assets revert back to Husband’s children. But since a trust was named as the beneficiary of Husband’s IRA, even if the trust qualifies as a “see-through” trust, RMDs after Husband dies will be based on the single life expectancy of the surviving spouse (Wife) which results in substantially less income tax deferral than would be available if the surviving spouse were named as the outright beneficiary and rolled over the benefits into her own IRA. Let’s look back at the numbers. If a trust for Wife is named as beneficiary of Husband’s IRA, the first RMD when Wife is 80 (based on the same $1,000,000 IRA) will be $98,000 (9.8% of the IRA value). At age 81, the RMD will exceed 10% of the account value. And each year, the percentage will increase. If Wife lives long enough after Husband dies, the RMDs based on the required single life expectancy table will cause most of the benefits to be distributed to Wife outright which will defeat the purpose of trying to protect those IRA assets for Husband’s children. So keep in mind that there are tradeoffs when it comes to naming beneficiaries of IRAs.This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.Paul RabalaisLouisiana Estate Planning Attorney<a href="http://www.RabalaisEstatePlanning.com" rel="nofollow" target="_blank">www.RabalaisEstatePlanning.com</a>Phone: (225) 329-2450

Should You Name a Trust as Beneficiary of IRA

Dave Ramsey

Dave Ramsey View on Nursing Home Costs Not in Line with What the Public Thinks

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