Skip to main content
Monthly Archives

April 2016

6 Major Reasons For Planning Your Estate

By Uncategorized

Estate and asset protection planning provides solutions to the following types of concerns:


How will I avoid the cost and inconvenience of probate for my spouse and children?

If you have ever been confronted with needing to administer an Estate for a loved one who died without a will or estate plan, they quickly realize the time and expense associated with the probate process.  For many clients, the best solution is a revocable trust, often referred to as a living trust. This document when funded will enable you to avoid the probate process.


If I can’t make legal, financial, or healthcare decisions for myself, how can I be sure my wishes are carried out?

Again, a revocable trust may provide the answer. In addition, every client needs a durable power of attorney and a health care proxy appointing a trusted individual to make financial and health care decisions for you when you no longer can yourself.


How can I make sure my wealth and possessions end up in the right hands when I’m gone?

Wills and trusts are vehicles for passing on your assets to those you choose. Many clients are concerned about funds they leave to their children being at risk of their children’s creditors, spouses upon divorce, or simply bad decisions their children may make. For them, a family protection trust can provide the protection they seek. In addition, proper planning will prevent the payment of unavoidable estate taxes upon your death.


My spouse needs more care than I can give. Will we lose everything to pay for care, or are there options?

Not if you plan properly, the earlier, the better. There are a number of planning options available to spouses of nursing home residents to protect their financial well-being while qualifying their ill spouse for Medicaid coverage of nursing home fees.


My child is disabled. How can I provide for her future?

We have helped many parents of children with special needs plan for their children through the creation of a special needs trust funded with life insurance.


What legacy will I leave?

Your greatest legacy of course is the children and grandchildren you raise, if any, and the memories you leave with your family, friends, and work colleagues. However, support of charities and an estate plan that provides for your family and smoothly passes on what you leave behind will also contribute greatly to the legacy you leave and your family’s welfare for decades to come.

Contact us today for more information 401.648.7000

MJL Blog Footnote


Peace of Mind Checklist

By Uncategorized

Estate Planning Peace of Mind Checklist 

Please check the following questions that are important to you:

Happy senior man and woman couple dancing and holding hands after finishing medicaid with RI medicaid planning

________ I am concerned about losing my assets to the high costs of long-term care for myself and my spouse. Will we lose everything to pay for care, or are there options (Medicaid Planning)?

________ My child is disabled. How can I protect his or her future (Special Needs Planning)?

________ How can I set things up so my kids’ inheritance will be protected if they get divorced or are sued (Asset Protection Planning)?


________ My parents are aging. What should I know to help them to remain independent and protect their assets (Medicaid Planning)?

________ How can I minimize or eliminate paying taxes upon my death (Tax Planning)?

________ Do I have to be wealthy to benefit from a living trust? What are its benefits (Probate Avoidance Planning)?

________ If I can’t make legal and financial decisions for myself, how can I be sure my affairs are conducted in my best interest (Durable                        Powers of Attorney) ?

________ If I am too ill to make health care decisions for myself, how can I be sure my wishes will be carried out (Health Care Power of                               Attorney)?

________ How can I be sure my money and property end up in the right hands when I’m gone (Estate Planning with Trusts)?

________ My parent just passed away. What do I do now (Probate Administration)?

Many of our clients came to us with the same questions. They all seek the same thing: PEACE OF MIND FOR THEMSELVES AND FOR THE ONES THEY LOVE.

Estate Planning is a general term the encompass each of the stated questions and concerns above. The paths of Estate Planning are:

  • Medicaid Planning
  • Special Needs Planning
  • Asset Protection Planning
  • Tax Planning
  • Probate Avoidance Planning
  • Long Term Care Planning
  • Disability Planning – Powers of Attorney – Financial and Medical
  • Planning with Trusts
  • Probate and Estate Administration Planning


Call our office today at 401.648.7000

MJL Blog Footnote

Can I Keep My IRA and Apply for Medicaid?

By Uncategorized

Charming senior man and woman reading their Roth or Traditional IRS at their house

Answer: Keeping your IRA depends on what state you reside in. In Rhode Island, you are allowed to keep your IRA, provided you anuitize it. In Massachusetts, you are not allowed to keep it.

To protect your Roth or Traditional IRA’s, you do need to annuitize the IRA and start drawing the minimum required distribution from them. If you do not annuitize them, they will be deemed an available resource and will need to be liquidated and spent on your care.

Rhode Island Department of Human Resources Regulation 0382.15.30
regarding Retirement Funds (REVISED: 06/1994) provide as follows:

“Retirement funds are annuities or work related plans for providing income when employment ends (such as a pension, disability or retirement plan administered by an employer or union), or funds held in Individual Retirement Accounts (IRA’s), or plans for self- employed individuals, sometimes referred to as Keogh plans.

An applicant who owns a retirement fund must apply for the benefits of such fund or liquidate the fund. However, the applicant is not required to terminate active employment in order to make a retirement fund available. If the applicant must terminate employment in order to receive benefits from the retirement fund, the fund is not accountable resource.

If the applicant is eligible for periodic retirement benefits (monthly, quarterly payment,etc.), the retirement fund is not a resource, but the payments from the fund are unearned income when received.

If an applicant owns a retirement fund and is not eligible for periodic payments, but has the option of withdrawing the funds, the retirement fund is counted as a resource. The resource is the amount the applicant can actually withdraw from the account. If there is a penalty assessed for early withdrawal, the resource is the amount available after these penalties are deducted. If taxes are owed on the funds, any taxes due are NOT deducted in determining the value of the retirement fund”.

Though the funds themselves are protected from liquidation, the income stream generated from them are deemed income and an available resource and available to a person on Medicaid.

Want to learn more and how this rule applies to you?

Contact our office for a consultation.  Call 401.648.7000MJL Blog Footnote


Protecting the Elderly from Financial Exploitation

By Uncategorized

Elder Law involves protecting all aspects of the individual – and sometimes it involves protecting them from themselves from exploitation by swindlers.  A comprehensive Estate Plan can address, minimize and prevent your loved ones from exploitation by swindlers.

How Many Seniors Are Being Exploited?

Seventeen percent of Americans over the age of 65, or 6.8 million people, have been taken advantage of financially through high fees, inappropriate investments or outright fraud, according to a new survey. The findings, the results of a survey done by Public Policy Polling for the Investor Protection Trust, represented an improvement over a similar study taken in 2010, which discovered 20 percent of seniors had been victimized. Investor Protection Trust is a nonprofit organization devoted to investor education and protection.

Those involved in the study said seniors, over time, have become better educated about financial matters, and that both the children and health care providers of seniors are more aware of medical problems that might diminish older people’s ability to make decisions about money.

What to Do When A Loved One Gets Exploited

Sadly, family members learn of a parent being the victim of being exploited financially only after the fact, the funds have been absconded with, and mom or dad reluctantly share their experience. In such cases, you should:

  1. Notify the police and provide them with whatever information you have as to what was taken and who the perpetrators were;
  2. Contact your insurance companies – often homeowners policies will contain coverage in the event of theft and criminal activity.

Want to make sure your loved ones are protected from being exploited? Here is a checklist of things to do when someone has been exploited. An estate plan consisting of Trusts and restricted bank accounts may be an initial step toward preventing your loved one from becoming a victim.

Contact us to discuss a plan that helps the ones you love.

Read the Full Article from Chicago Tribune.

MJL Blog Footnote


Estate Plans With Income Tax Strategies

By Uncategorized

Today, you generally do not need to be concerned about federal estate taxes unless your net worth approaches $5 million (about $10 million if you are married). For 2016, the federal estate tax exemption is $5.45million per taxpayer and the exemption is scheduled to be annually adjusted for inflation. The exemption is the amount, reduced by any taxable gifts you made during life, which can pass tax-free to your heirs upon your death.

As the higher, inflation-indexed estate tax exemption was permanently signed into law, the top ordinary income and long-term capital gains rates increased approximately five percentage points each, to 39.6% and 20%, respectively. In 2013, the 3.8% net investment income tax went into effect for higher-income taxpayers and at thresholds lower than those triggering the top income tax rates.

So, for higher-income taxpayers and people with higher-income heirs, income taxes are important to plan for. However, even middle-bracket taxpayers should factor income taxes into their estate planning to minimize tax liability for themselves and their heirs. After all, why pay, say, even a 15% federal tax on a capital gain if, with careful planning, your family could avoid incurring any federal taxes on that gain?estate-tax-return.ashx_

Two Valuable Income Tax Strategies
Several income-tax-saving strategies can be incorporated into an estate plan. However, the following are two of the most valuable that most taxpayers can take advantage of:

  1. Hold on to appreciated assets — unless you have loved ones eligible for the 0% rate. Inherited assets receive a step-up in basis to their fair market value on the owner’s date of death. The recipient can then sell the appreciated assets shortly after receiving them and owe little, if any, income tax on the sale. So, if estate taxes are not a concern, holding on to both assets that have already appreciated and assets that you expect to appreciate significantly in the future can be beneficial. However, if you would like to dispose of an appreciated asset and you have loved ones in the 10% or 15% bracket for ordinary-income taxes who thus are eligible for the 0% rate on long-term capital gains, consider gifting it to the loved one to sell. This might require a gift tax return to be filed.
  2. Make charitable donations during life. If you are charitably inclined, consider maximizing your lifetime donations rather than waiting to make large charitable bequests at your death. Properly substantiated lifetime gifts to qualified charities generally provide an income tax deduction (and reduce the value of your estate), while charitable bequests provide only an estate tax deduction, which you will not need if your estate is below the exemption amount.

Before making significant charitable gifts, be sure to consider your cash flow needs and the legacy you want to leave. Also, keep in mind that your annual income tax deduction for charitable donations is limited to a percentage of your adjusted gross income (AGI) — 50%, 30% or 20%, depending on the type of gift and charity. Contributions exceeding the applicable AGI limit can be carried forward for up to five years.

Stay AlertIRSbuilding_0
As you consider — and perhaps implement — these income-tax-savings strategies for your estate plan, you also need to keep an eye on two things: 1) Your net worth, and 2) Congress. If you have a financial windfall or simply enjoy a steady increase in compensation or investment performance, your estate could be boosted to a size where federal estate taxes become a concern. And, while the high, inflation-adjusted estate tax exemption has no expiration date, Congress could pass legislation to reduce it at any time.

Medicaid Planning Issues

Obviously, the above items do not work in the context of Medicaid Planning. Gifting of assets, holding onto appreciated assets work for estate planning strategies and tax strategies – but not for Medicaid Planning strategies. While an Irrevocable Income Only Grantor trust does allow for tax basis planning opportunities, charitable gifting during lifetime and within 5 years of applying for Medicaid will be a disqualifying transfer of assets.

Whatever happens, be ready to revisit your estate plan and, if necessary, alter your strategies based on changing circumstances. Be sure to consult with appropriate financial, tax and legal professionals. Want to discuss your plans?  Contact us to schedule an appointment.

MJL Blog Footnote