Is there a way to preserve assets so they can be used to care for a disabled child?

By | ALTCS, Special Needs Trusts | No Comments

Scenario:  Ann and George receive Social Security income for their daughter, Michelle, who is developmentally disabled.  George was diagnosed with dementia two years ago and his condition deteriorated rapidly over the last six months.  Ann is faced with placing George in a skilled nursing facility, but is concerned that the cost will drain their savings leaving no money to care for Michelle.  If they apply for ALTCS benefits, they will be told to spend down, which again will drain the funds they have to care for Michelle.  How can Ann obtain the care George needs and have the funds to continue caring for Michelle?

Response:  Through a Special Needs Trust, money can be set aside to care for a disabled child while still allowing a parent to qualify for Medicaid benefits.   However, it is important to make sure that the trust complies with ALTCS rules.  ALTCS will review all trusts to confirm that assets were not transferred contrary to guidelines.  If the trust is not properly set up, the assets in the trust may be considered countable resources.  Failure to report assets is considered Medicaid fraud and, when discovered, will result in ineligibility of benefits as well as other penalties.  The importance of setting up the trust properly cannot be emphasized enough.  By establishing a Special Needs Trust, Ann will be able to receive financial assistance to pay for George’s long-term care and still be able to care for her daughter.

(Note: This is informational only and should not be considered legal advice.  Please consult a knowledgeable Elder Law attorney regarding your specific legal needs.)

Should you write your own living trust?

By | Estate Planning, Special Needs Trusts | No Comments

People often wonder if they could do their own estate planning.  A will can have guardians chosen for your children if something should happen to you.  A trust can hold assets for your benefit if you are not capable of managing them yourself.   Even if it seems easy and a smart idea, there are many things that could go wrong with writing a will or trust on your own.  These bloopers can cost you a lot more than you saved in legal fees.

In 1984, a man set up his own trust using a three-page form he purchased at an office supply store.  He documented a deed to transfer his home into the trust, but accidentally dated the deed 1983.  In 2009, this man wanted to borrow against his paid off mortgage on his home.  However, the mistake he made back in 1984 prevented him from receiving a loan from the bank because he didn’t have a clear chain of title to his home.  The problem was fixed over the course of two weeks and cost him $2,000 in legal fees.  That was about twice the amount he would have had to pay back in 1984 if he had a firm do it for him instead.

To make sure you and your family members receive the best return on your investment, it is essential that you put some time into planning your estate. We service the whole state of Arizona including Phoenix, Mesa, Scottsdale, Stafford, and Tucson. Contact the Arizona estate planning attorneys at JacksonWhite to have your estate assessed during a free estate planning consultation! Call (480) 464-1111.


A probate attorney can help with trust administration

By | Probate, Special Needs Trusts | No Comments

There seems to be a lot of talk about the ways in which people can minimize probate, if not avoid it altogether.  Perhaps most commonly, people use a revocable living trust to accomplish this goal.  Without diminishing the usefulness of revocable living trusts, people considering such an option should know that trust administration requires attention to detail and a basic comprehension of the legalities surrounding the process.

Just like with AZ probate, many trustees ultimately require an AZ probate lawyer to help them administer even a simple trust.  First of all, trustees must decipher the trust document and become familiar with its guiding terms.  Although a trust document itself provides specific instructions, understanding trust language is not always simple to do.  Next, trustees must inventorize trust assets and perform a title check on all real property belonging to the trust.  Trustees must also give notice of administration to every trust beneficiary, and in some instances have the trust assets appraised before proceeding.  In addition to all of this, sometimes trustees have to deal with creditor claims and tax issues before finally distributing the trust assets and closing the trust.

The good news is that trustees do not have to administer a trust without assistance.  An Arizona probate lawyer with an understanding of trust administration can be a great help.  Depending on the situation’s complexity, a trustee may require more or less involvement from his or her attorney.  Under any set of circumstances, however, a trustee should seek legal counsel to assist with trust administration.  East Valley residents with questions about trust administration have much to gain from recruiting the assistance of a Mesa probate lawyer.


Arizona Trustee Duties

By | Estate Planning, Special Needs Trusts | No Comments

If you have been appointed to act as a trustee for an Arizona living trust, there are several duties with which you are legally bound to comply.  Failure to comply with any of these duties could result in removal from your position as trustee, or even personal liability in certain instances.  As such, one of the first things you should do if you are appointed as trustee for an Arizona living trust is to familiarize yourself with your duties.  The following briefly explains the key duties that you are expected to understand and abide by.

  • Duty of loyalty: Put simply, the duty of loyalty prohibits you from any self-dealing.  In other words, when administering an Arizona living trust, you cannot make any transactions that are motivated by personal gain; your decisions must be based on furthering the interests of the trust itself.
  • Duty to invest prudently: You might be expected to make investments with trust funds.  If so, you have an absolute duty to invest prudently, which includes diversifying investments, balancing risks and rewards, and keeping the trust in the black, so to speak.
  • Duty of impartiality: This duty requires you to treat each trust beneficiary equally.  Of course, if the Arizona living trust document itself requires you to give preference to a particular beneficiary, you are permitted to do so.  Otherwise, however, you should strive for equality as you administer the trust.
  • Duty to preserve trust property: This duty requires you to insure trust assets if necessary.
  • Duty to account: This duty requires you to keep the trust beneficiaries informed about the trust administration.

Trust administration is not always an easy job, particularly when it comes to larger and more complex trusts.  As a trust administrator you have a right to seek legal counsel if necessary, and doing so could very well help you carry out those duties that you are obligated to fulfill.

To speak with an Arizona Probate attorney for help with trust administration, please do not hesitate to contact JacksonWhite. (480) 818-6912

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