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April 15, 2021 by Cava Faulkner

Estate planning is an obvious concern for all parents, but if you have a child with special needs, it’s crucial that you are aware of the unique considerations that go into planning for a child who may be dependent on you at some level for their lifetime. If your child has special needs, you must understand exactly what’s necessary to provide for the emotional, physical, and financial needs of your child, in the event of your own eventual death or potential incapacity.

When creating your estate plan, there are two major considerations for you to focus on: 1) Who would care for your child if and when you cannot (also known as guardianship), and 2) How will your child’s financial needs be met when you are not there to meet them.

Naming Legal Guardians for a Lifetime of Care

The first and most critical step in ensuring the future well-being of your child with special needs is to name both short and long-term legal guardians to take custody of and care for your child in the event of your death or incapacity. And as you well know, if your child will never become fully capable of independently caring for him or herself, your parenting responsibilities will continue on long after your child reaches adulthood.

Although this lifetime responsibility likely feels overwhelming, we’ve been told repeatedly by our clients who have a child with special needs that naming legal guardians and knowing their child will be cared for in the way they want, by the people they want, creates an immense sense of relief. Not only that, but we often build in unique plans through which the named guardians are carefully instructed—and even incentivized—to give your child the same level of attention and care you provide.

For example, we’ve created plans in which the named guardian is compensated for taking your child to dinner and the movies every week or participating in some similar activity if this is something your child enjoys doing with you. However, without written instructions (and perhaps compensation) built into your estate plan, fun activities like this are often neglected once you are no longer there.

For guidance on selecting the individual(s) best suited to serve as legal guardians and creating the proper instructions for them to provide your special needs child with the same level of care as you, consult with us as your Personal Family Lawyer®.

Providing For Your Child’s Financial Future: Special Needs Trusts

Beyond naming legal guardians for your child with special needs, you’ll also need to provide financial resources to allow your child to live out his or her life in the manner you desire. And this is where things can get tricky for children with special needs.

In fact, it may seem like a “Catch-22” situation—you want to leave your child enough money to afford the care and support he or she needs to live a comfortable life, yet if you leave money directly to a person with special needs, you risk disqualifying that individual for much-needed government benefits like Medicaid and Supplemental Social Security Income (SSI).

Fortunately, the government allows assets to be held in what’s known as a “special needs trust” to provide supplemental financial resources for a physically, mentally, or developmentally disabled child, without affecting his or her eligibility for public healthcare and income assistance benefits. However, the rules for such trusts are complicated and can vary greatly between states, so you should always work with us, your Personal Family Lawyer® in order to create a comprehensive special needs trust that’s properly structured and appropriate for your child’s specific situation.

Setting Up The Trust

Funds from a special needs trust cannot be distributed directly to your child, and instead must be disbursed to a third party who’s responsible for managing the trust. Given this, when you initially set up the trust, you will likely be both the Grantor (trust creator) and Trustee (the person responsible for managing the trust), and your child with special needs is the trust’s Beneficiary.

You’ll then name the person you want responsible for administering the trust’s funds upon your death or incapacity as the Successor Trustee. To avoid conflicts of interest, overburdening the legal guardian with too much responsibility, and providing a system of checks and balances, it may be a wise decision to name someone other than your child’s legal guardian as a Trustee.

As the parent, you serve as the Trustee until you die or become incapacitated, at which time the Successor Trustee takes over. Each person who serves as Trustee is legally required to follow the trust’s terms and use its funds and property for the benefit of your special needs child.

Additionally, you should name multiple Successor Trustees—which can even be a trust company, bank, or another professional fiduciary—as backups in case something happens to prevent the individual you’ve named as primary Trustee from serving.

There are two ways to set up a special needs trust. In the first option, we build it into your revocable living trust, and it will arise, or spring up, upon your death. From there, assets that are held in your living trust will be used to fund your child’s special needs trust.

In the other option, we can set up a special needs trust that acts as a vehicle for receiving and holding assets for your child right now. This option makes sense if you have grandparents or other relatives who want to give your special needs child gifts sooner rather than later.

Finally, it is important to ensure that the trust will have sufficient funds to last throughout the life of your child. One common method to provide funding is for you (or another loved one) to name the special needs trust as the beneficiary of your life insurance policy. Another way is for family members and friends to make donations or gifts to the trust and/or include it as a beneficiary in their will.

Meet with us, as your Personal Family Lawyer®, to discuss all of your available options for ensuring your child’s special needs trust has sufficient funds to last for his or her lifetime and for guidance on the estate planning vehicles best suited for passing money to the trust.

The Trustee’s Role

Once the trust is funded, it’s the Trustee’s job to use the trust funds to support your child without jeopardizing eligibility for government benefits. To ensure this is handled properly, the Trustee must have a thorough understanding of how eligibility for such benefits works and stay current with the ever-changing laws. The Trustee is also required to pay the beneficiary’s taxes, keep detailed records, invest trust property, and stay current with the beneficiary’s needs.

Given this immense responsibility, it’s often best that you name a legal or financial professional who’s familiar with the complexities of the law as Trustee or Co-Trustee, so they can properly handle the duties and not jeopardize your child’s eligibility for government benefits. Alternatively, we can advise your named personal Trustee on how to manage the Trust.

Your Trusted Source For Special Need Planning

If you have a child with special needs, meet with us, as your Personal Family Lawyer®, for trusted guidance and support in creating a special needs trust and other estate planning vehicles for your child. We offer an array of estate planning strategies that are designed to accommodate the unique needs presented by a child with special needs and their families.

We will assist you in passing on the financial assets needed for your child to have a rich quality of life, without jeopardizing his or her eligibility for government benefits. We’ll also support you in finding and appointing a legal guardian and/or Trustee to ensure your child is protected and provided for in the exact manner you wish when you die or if you become incapacitated. Contact us, your Personal Family Lawyer® today to get started.

Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, contact us to schedule your Family Wealth Planning Session. Even if you already have a plan in place, we will review it and help you bring it up to date to avoid heartache for your family. Schedule online today.

April 13, 2021 by Cava Faulkner

As an entrepreneur, you’re no doubt extremely talented and driven when it comes to your core product or service. Whether you develop smartphone apps, provide healthcare services, or brew craft beer, without a high level of confidence and passion for your particular trade, you probably never would’ve gone into business in the first place.

On the other hand, when it comes to the dry, nitty-gritty parts of running a business—crunching numbers, negotiating contracts, dealing with insurance, and managing taxes—you likely don’t have nearly the same enthusiasm or surety. You might project an outer facade of confidence and certainty about the state of your company, but you may secretly live in fear and worry that it’s going to fail.

This hidden insecurity can make you feel like an imposter. Sure, you’re a whiz when it comes to the creative side of your job, but truth is, you’re likely winging it when it comes to the nuts and bolts of business management—the legal, financial, insurance, and tax components.

What’s more, this simmering sense of doubt and uncertainty can drain a significant level of your creativity and energy. If this leak isn’t plugged, it can seriously stunt your ability to grow your company into the sustainable and impactful operation you’ve always dreamed of—and in the process, negatively impact every other part of your life.

The big taboo

Further complicating things, since few people are willing to admit they’re struggling like this, it’s become taboo to even talk about such fears. Even though countless other business owners out there are feeling exactly like you do, nobody wants to admit their outer confidence is just a mask, so everyone continues suffering in silence.

Or maybe you’re one of those people who’s still in denial about your situation. For many, business is mainly about making as much money and attracting as many clients as possible. Since dealing with things like legal agreements, insurance, and taxes don’t seem to fulfill these primary goals, you ignore them, put them off, or fail to give them much attention. After all, you’ve got more important things to focus on.

Besides, once you generate enough revenue, all of that stuff will work itself out, right? And even if it doesn’t, you’ll at least be in the position to hire a crack team of specialists to handle them for you.

One mistake away from collapse

But you can’t afford to ignore or put these tasks off another day. And if you’re not worried, you certainly should be. Whether you believe it or not, if you don’t have the cornerstone legal, insurance, financial, and tax (LIFT) systems in place, the business you’ve worked so hard to build is just one accident, audit, or lawsuit away from ruin.

Though dealing with LIFT systems may not seem particularly fun or glamorous, they form the very foundation upon which your entire business rests. If this foundation is weak or not ample enough to support your operation, it doesn’t matter how hard you work or how much money you make, at some point the house of cards you’ve built your business on is going to crumble.

But how do you even begin to address this issue?

Outside of being afraid to talk about it, another big reason entrepreneurs fail to deal with their shaky LIFT foundations is because they have no idea where to start. In fact, not knowing what you need, what to fix, and where to focus your attention is a major contributor to your fear and anxiety.

This lack of clarity also prevents you from getting effective assistance. If you can’t even identify what you’re lacking, hiring financial advisors, lawyers, and insurance agents is likely to be of little use. Moreover, if you hire someone less than scrupulous, they’re apt to take advantage of your uncertainty and sell you a bunch of expensive products and services you don’t need.

Build an unshakeable LIFT Foundation

Fortunately, we offer a proven solution to address this dilemma. It’s one that has provided thousands of entrepreneurs the clarity and confidence they need to take effective action. It’s specifically designed to help you build an unshakable LIFT foundation, so you’ll never have to live in fear, worry, or doubt about your business structure again.

The LIFT Foundation System and Toolkit is literally a plug-and-play resource designed to give you maximum empowerment with the least amount of overwhelm. It comes with a comprehensive collection of tools, maps, and processes that will walk you step-by-step through what you need to do to establish a sustainable foundation for your company.
To give you a taste of how The LIFT Foundation System works and help identify the weak spots in your foundation, you should take The LIFT 20-Point Assessment. This free assessment allows you to grade the quality of your business’s legal, insurance, financial, and tax systems and provides you with an overall score out of 100, which will reflect your foundation’s current status.

Get the clarity and confidence you need

Just taking the 20-Point Assessment is a huge benefit, as it shows you the gaps in your foundation that need the most attention. From there, you can meet with us to conduct a more thorough audit of your business, so you can eventually implement the full LIFT Foundation System and Toolkit into your operations.

Take the free LIFT 20-Point Assessment today to begin taking the necessary steps to build a solid LIFT foundation for your company—and finally gain genuine confidence about your business’ long-term success. Armed with that clarity, you can devote all of your energy and passion into growing your business into something truly meaningful for yourself, your clients, and your family.

We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.

April 12, 2021 by Cava Faulkner

With the cost of long-term care (LTC) skyrocketing, you may be concerned about your (or your elderly parents’) ability to pay for lengthy stays in assisted living and/or a nursing home. Such care can be massively expensive, with the potential to overwhelm even the well-off.

Because neither traditional health insurance nor Medicare will pay for LTC, some people are looking to Medicaid to help cover this cost. To become eligible for Medicaid, however, you must first exhaust nearly every penny of your savings.

Given this, you may have heard that if you transfer your house to your adult children, you can avoid selling the home if you need to qualify for Medicaid. You may think transferring ownership of the house will help your eligibility for benefits and that this strategy is easier and less expensive than handling your home (and other assets) through estate planning.

However, this tactic is a big mistake on several levels. It can not only delay—or even disqualify—your Medicaid eligibility, it can also lead to numerous other problems.

Medicaid Changes

In February 2006, Congress passed the Deficit Reduction Act (DRA), which included a number of provisions aimed at reducing Medicaid abuse. One of these was a five-year “look-back” period for eligibility.

This means that before you can qualify for Medicaid, your finances will be reviewed for any “uncompensated transfers” of your assets within the five years preceding your application. If such transfers are discovered, it can result in a penalty period that will delay your eligibility.

For every $6,422 worth of uncompensated transfers made within this five-year window, your Medicaid benefits will be withheld for one month. Any transfers made beyond that five-year period will not be penalized.

So, if you transfer your house to your children and then need LTC within five years, it may significantly delay your qualification for Medicaid benefits—and possibly prevent you from ever qualifying. Rather than taking such a risk, consult with us to discuss safer and more efficient options to help cover the rising cost of LTC such as long-term care insurance.

A potentially huge tax burden

Another drawback to transferring ownership of your home is the potential tax liability for your child. If you’re elderly, you’ve probably owned your house for a long time, and its value has dramatically increased, leading you to believe that by transferring your home to your child, he or she can make a windfall by selling it.

Unfortunately, if you do that, she or he will have to pay capital gains tax on the difference between your home’s value when you purchased it and your home’s value at the time she or he received it. Depending on the home’s worth, these taxes can be astronomical.

In contrast, by transferring your home at the time of your death, your child will receive what’s known as a “step-up in basis.” It’s one of the only benefits of death, and it allows your child to pay capital gains taxes based on the value of the home at the time of inheritance, rather than the value at the time you bought it.

We can help you choose the most advantageous estate-planning strategy to minimize your beneficiaries’ tax liability and ensure they get the most out of their inheritance.

Debt, Divorce, Disability, and Death

There are numerous other reasons why transferring ownership of your house to your child is a bad idea. If your child has significant debts, his or her creditors can make claims against the property to recoup what they’re owed, potentially forcing your child to sell the home to pay those debts.

Divorce is another problematic issue. If your child goes through a divorce while the house is in his or her name, the home may be considered marital property. Depending on the outcome of the divorce, this may force your child to sell the home or pay his or her ex a share of its value.

The disability or death of your child can also lead to trouble. If your child becomes disabled and seeks Medicaid or other government benefits, having the home in his or her name could compromise eligibility, just like it would your own. And if your child dies before you and has ownership of the house, the property could be considered part of your child’s estate and be passed on to your child’s heirs, creating a problem for you.

No substitute for proper estate planning

Given these potential problems, transferring ownership of your home to your children as a means of “poor-man’s estate planning” is almost never a good idea. Instead, with us as your Personal Family Lawyer®, we can help you find better ways to qualify for Medicaid and other benefits to offset the hefty price tag of long-term care and also keep your family out of court and out of conflict in the event of your incapacity or when you die.

We offer an array of estate planning strategies to protect all of your assets, while also enabling you to better afford whatever long-term healthcare services you might require. Contact us today to learn more.

We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule. Or, schedule online.

April 10, 2021 by Cava Faulkner

While it’s still hard to tell how the Coronavirus will impact us in the long term, it’s become a subject that’s impossible to ignore. While some are advocating we prepare to be quarantined, potentially for months, others are saying the virus is nothing more than a common cold. The World Health Organization takes a more middle-of-the-road approach, advising we take precautions without becoming alarmed.

Whether the coronavirus is a dangerous pandemic or just a common cold, there is the possibility that your business could be affected due to public perception and fear. We’re going to empower you to make informed decisions for your business. Here are some possibilities to keep in mind, and actions you might take.

Consider shifting to virtual or remote services if you do not currently offer them. Even if you never have to experience a quarantine, it could be a good exercise to consider for your business. If you need help thinking it through, call us for consultation.

Consider sharing immunity-boosting strategies with your employees, vendors and clients. I’ve listed some of my own suggestions below.

And lastly, stay as informed as you possibly can.

For your reference, here’s a link where you can track infection and death rates over time. As you can see, the numbers are increasing daily. Most of the people who die from coronavirus are over the age of 60, and people who have chronic illnesses like heart disease and diabetes have a 5–10% higher chance of dying from it. So if you have parents who may need information on how to boost their immunity, it would be good to share this article with them.

This video shares that, as of January 30, 2020, approximately 8,000 people had been infected with the Coronavirus, and 214 had died. The video indicates that symptoms are similar to a bad respiratory cold, with fever and cough, and that the only treatment is fever-reducing medication. Taking precautions now to up your intake of immunity-boosting supplements, the same way you might if there was a cold circulating in your community, would be a great idea.

A friend of mine shared some resources they’d compiled to help shore up their immunity, and I’ve included them in the list below. This is not medical advice. Consult your doctor before taking any supplements at all. These are just the things I am considering for my family, and I’m sharing with you so you can make the call for yours.

Supplements I recommend:

Vitamin C
Vitamin D, 3000 units or more
Sodium Ascorbate, 1250 mg. or more
Zinc, 30 – 50 mg
Black elderberry, 600 – 1500 mg
Lion’s Mane (Host Defense by Stamets)
NAC (1200 – 1800 mg)
Lipoic acid (1200 – 1800)
Spirulina (15 g)
Selenium (50 – 100 mcg)
Glucosamine (3000 mg or more)
Yeast Beta-Glucan (250 – 500 mg)

Supplies to keep on hand:

Colloidal Silver
Oregano oil
Immunity boosting essential oils like Thieves or OnGuard Oil
Sanitizing wipes
Protective masks

Additional Tips

Wash your hands, more than you usually do, and consider wiping down surfaces on airplanes, public transportation, and at the gym with your own sanitizer wipes.
Have emergency food, water, and medical supplies prepared (always a good idea).
Practice breathing through your nose instead of your mouth. Nose hairs offer natural protection from airborne viruses. This is especially important for those living in big cities.
Consider avoiding crowded places like airplanes, churches, theaters, etc.
Make sure you are drinking plenty of purified water.
If you smoke, it’s an especially good time to quit to protect your lungs.

In the event you or a loved one do get sick and need to go to the hospital, it’s important to prepare a list of your needs. Include your preferred hospital, your primary care doctor and any specialists, food allergies and preferences, and supplements and medications you take. Also indicate any procedures you desire or don’t desire. Additionally, you should name the person or people authorized to make healthcare and financial decisions for you if you cannot make them for yourself. We can help you prepare these documents in our office, either to take precautions against coronavirus or for any other reason. Please get in touch if you are ready to get this handled and would like our help.

We are here to support you making educated, informed, empowered decisions for yourself and the people you love, in all areas of your wealth, health, and happiness.

April 6, 2021 by Cava Faulkner

President Trump signed the new Tax Cuts and Jobs Act bill into law on December 22, 2017, and the law includes a number of historic changes to the federal tax code. However, the vast majority of the most dramatic changes are aimed at business taxation, not individual taxpayers. So, how will the new tax law effect your family?

That said, there are several fairly significant changes to personal income tax laws, which we’ve highlighted below. But keep in mind, unlike the new business tax laws, which are permanent, nearly everything listed here for personal taxes sunsets after 2025 and will revert to the 2017 code in 2026 unless Congress extends the changes.

Given this, it’s important that you contact your Personal Family Lawyer® as soon as possible to take advantage of any new tax-saving strategies before these new provisions sunset.

Higher Standard Deduction

The standard deduction increases to $24,000 for joint filers, $12,000 for single taxpayers, and $18,000 for heads of households, all adjusted for inflation. The law also eliminates nearly all personal exemptions, however, so those with dependents won’t see quite as much savings.

Note that if you’re a 1099 wage earner, regardless of how much you earn, you pay approximately 15% of your earnings toward payroll taxes, which would otherwise be covered by your employer and taken out of your paycheck. So even though the standard deduction has increased, if you’re a 1099/ independent contractor, you may still face a big tax bill if you’re not structured properly. Contact us if you need help with this.

Changes To Mortgage Interest Deduction

For existing mortgages the limit on deducting interest on up to $1 million of mortgage interest stays the same. Deductible mortgage interest for new mortgages taken on after December 15, 2017, however, is now capped at $750,000. Additionally, homeowners may no longer claim a deduction for existing and new interest on home equity loans.

Increased Child Tax Credit

The child tax credit increases up to $2,000 per child, and the first $1,400 is refundable, meaning the credit could reduce your tax liability to zero, and you would still receive a tax refund. The cut off for the tax credit increases to $400,000 for married couples filing jointly.

Expanded Estate Tax Exemption

The estate tax exemption increases to $11.2 million for individuals and $22.4 million for couples, indexed for inflation. The rate for those estates still subject to taxation remains at 40%. However, don’t let this increase lead you to believe you don’t need to handle your estate planning if your estate is less than $11 million. Estate planning is what keeps your family out of court and out of conflict; it’s not just about taxes. Very few people will be impacted by the estate tax, but everyone’s family is at risk for court and conflict.

Eliminated State and Local Income Tax Deductions

State and local income tax deductions are repealed. This means that you will pay your state and local income taxes from after-tax income. However, you’ll be able to deduct up to $10,000 for state and local property taxes paid.

Changes to Medical Expense Deduction

Under the new law, taxpayers can deduct any medical expenses that exceed 7.5% of their adjusted gross income in 2017 and 2018. But this new deduction level sunsets on Jan. 1, 2019, when it will revert back to the previous level of 10%.

Whether the Tax Cuts and Jobs act results in tax cuts for your family or an increased tax bill is greatly dependent on how you’ve structured your financial affairs. Given this, if you’ve not yet had a Family Wealth Planning Session with us now is the time to do it. After your Family Wealth Planning Session, we’d be happy to meet with you and your CPA to strategize how to achieve the most tax savings for your family in the years to come.

Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, contact us to get started. If you already have a plan in place, we can review and update it to avoid similar conflicts. Schedule online today.

April 5, 2021 by Cava Faulkner

As we all know, natural disasters such as the onslaught of hurricanes that hit the Gulf Coast recently can devastate communities, shutting down business operations and throwing entire communities into survival mode. Preparedness is key when it comes to weathering storms large and small, but many small businesses don’t know where to start when devising an emergency preparedness plan. Partnering with us can help your business survive—and even thrive—after a natural disaster. Here are a few tips to help you mitigate the risks of doing business when disaster strikes:

On-Site and Employee Protections

Create an on-site emergency plan to help keep your employees safe. A thorough plan and a well stocked emergency kit will help your business handle the immediate effects of a natural disaster. Take the time to train employees ahead of time so that everyone knows what to do and how to communicate when disaster strikes.

Audit Your Insurance Policies

We can mitigate your risks by recommending the right insurance policy for your business. Business interruption insurance will cover your losses—such as loss of revenue—after a covered event. This will help you stay operational even if your clients are unable to pay due to the effects of the disaster.

You’ll also need thorough documentation of all your assets to file a claim. Work with one of our lawyers, in advance of a natural disaster – like now – to ensure your documentation fulfills insurance claim requirements.

Safeguard Your Data

Accessing your data is crucial to staying on track financially after a disaster. Develop a backup system that includes storage in the cloud and off-site hard copies of critical documents, stored in fire and water proof containment. Without the right information, it may be hard to file a claim or get operations up and running again.

Plan Your Communications

Establish a clear method of employee communication and delegate responsibilities. Work with a lawyer who can keep relevant information on hand and help you file insurance claims in the aftermath of a disaster.

Develop A Recovery Strategy

Develop a financial recovery plan so you can quickly resume payroll and invoicing. You’ll also need to account for missing income if your customers or clients are affected by the disaster and cannot pay.

We can help your business prepare for the legal, insurance, financial, and operational problems that could be caused by a natural disaster. If you’re ready to be proactive in protecting your business from natural disasters, begin by sitting down with us. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule. Or, schedule online.

Estate Planning For A Child With Special Needs: What Parents Need To Know