Interactive Legal Blog

A New Face for Estate Planning

©2019 by Jonathan G. Blattmachr & Daniel J. Scott. All Rights Reserved.

Introduction

For decades, the primary focus of estate planning lectures and publications was about preserving the maximum value of an estate, primarily through estate tax planning. The emphasis was paying less tax in order to transfer more wealth to future generations using techniques such as irrevocable life insurance trusts, corporate and partnership “freezes,” grantor retained income trusts (GRITs), qualified personal residence trusts (QPRTs), grantor retained annuity trusts (GRATs), installment sales to grantor trusts, (family) limited partnerships (FLPs) and making lifetime gifts under the protection of the gift tax annual exclusion or to avoid transfer tax on gift tax paid. This seemed to make sense for many Americans when the estate and gift tax exemptions hovered around $600,000 or $1,000,000. In some states, the combined state and federal estate tax could exceed 50%. As a result, an individual dying with $1 million in assets could end up leaving her heirs less than $500,000. Virtually all of these arrangements involved changing the nature of what was owned by the time of transfer, whether during lifetime (by sale or gift) or at death. For example, the value of a limited partnership received in exchange of other assets, such as market securities, likely was lower than the value of the assets transferred to the partnership. The adage was: lower the value and thereby lower the tax.

Are Your Estate Plans Prepared for Digital Assets?

By Lee Poskanzer, CEO of Directive Communication Systems

The time to address digital assets as part of your client’s estate plan may have begun to run out. We’ve all heard about digital assets, cryptocurrency and occasional lawsuits by family members against social media giants like Yahoo! and Facebook. But now the topic of digital assets will necessarily have landed on your desk when you begin the estate planning process for a client.

Are you fully prepared to help your clients plan for this new asset class, and to protect yourself and your practice from doing the wrong thing?

Digital assets are the new frontier for Trust and Estates practitioners. It’s time to get up to speed about this important asset class.

For the purposes of this discussion, we will limit the focus to the most critical area of digital property: the disclosure of an account’s contents. Closing an account, removing the name from a family share plan and other “action” oriented events will be saved for another day.

Grave Robbing in the 21st Century

By Betsy Ehrenberg

In today’s increasingly connected world, identity theft has become a serious problem.

It is estimated that 17.6 million Americans are the victims of some form of identity theft every year. Of those attacks, 2.5 million happen to someone who is deceased. This means 2,200 deceased Americans will be deliberately targeted and have their identities stolen every single day. Another 1.6 million Americans will have their identities stolen by chance when fabricated Social Security numbers happen to match those belonging to deceased individuals. Identity thieves fraudulently apply for loans, drain bank accounts, acquire credit cards, and even establish cell phone plans, according to research conducted by ID Analytics. Identity theft is the 21st Century’s version of grave robbing.

When a loved one passes away, worrying about protecting their identity or erasing their electronic footprint isn’t usually a family’s top priority. On average, an American has over 150 locations where their electronic footprint resides—from credit card accounts to grocery store rewards. The electronic footprint is composed of electronic records and digital assets.

The Cobbler's Children

By Teresa L. Bush, Esq., Director of Education and Support Services, InterActive Legal

My great-grandfather emigrated to the USA as a teenager from a country that no longer exists, and was a cobbler by trade. I treasure his two iron shoe stands passed down to me, because they are symbols of one man’s hard work that laid the foundation for generations of descendants. But they also bring to mind the old saying about the cobbler’s children having no shoes.

I have no reason to think that my grandmother didn’t have shoes, but I will confess that I, as an estate planner, spent several years without an adequate estate plan of my own. It makes me wonder how many of my colleagues are in the same boat. As estate planners, we should arguably have the most up-to-date and well thought-out estate plans. If the law changes, we should change our own plans first (if necessary), and then we are better equipped to help our clients. Perhaps it’s a bit like putting on your own oxygen mask first, before you help other passengers.

Telephone Intake Scripts Decrease Fee Objections, Increase Closure Rates, and Save Hours of Time

by Candace Wells, COO and Law Business Strategist, Attorney Alchemy

You’ve probably heard that policies, procedures, systems, and processes will not only save your sanity, but also make you and your team more efficient. Maybe you even “get” it and want to document your processes, but don’t know where to start. I hear you. It can be daunting to figure out where to begin.

My recommendation? Start small. By formalizing your intake script, you can get started on documenting how things work in your firm and decrease fee objections, increase your closure rates, and save hours of your time.

Let me explain.

SSA Clarifies Sole Benefit Rule: Trustees May Breathe a Little Easier

by Elizabeth Q. Boehmcke

Practitioners who regularly work with special needs clients are probably aware that the Social Security Administration ("SSA") released revisions to the Program Operating Manual System ("POMS") on April 30, 2018.  But since many of us are still processing the revisions, I hope to highlight some of them for those of us who are between CLE sessions. 

These revisions may come as welcome news to attorneys who draft special needs trusts or advise trustees of special needs trusts.  I am unfortunately limited herein primarily to highlighting the sole benefit rule revisions.  However, there were a number of important changes and if you want more details, you may want to review the full article I drafted, which you can find here.

Waivers, Penalty Periods, and the 5 Year Lookback

Letha Sgritta McDowell, CELA, InterActive Legal

On April 17, 2018, the acting director of the Centers for Medicare and Medicaid Services issued a policy clarification to all state Medicaid Directors regarding the imposition of penalty periods for individuals requesting Home and Community Based Services. The reaction to this guidance is mixed. In some states this clarification may be beneficial to many hoping to receive services in their home, while in others, this clarification may result in further delays in obtaining home services.

Individuals requesting Medicaid assistance with the payment of their nursing care expenses must meet certain eligibility criteria, both financial and non-financial, before Medicaid will begin assistance. The non-financial criteria include US Citizenship or lawful permanent resident status, state residency, and a demonstrated need for a certain level of care. The financial criteria include meeting certain income requirements and having minimal countable assets (there is no limit on non-countable assets). In addition, if an applicant or their spouse has made any uncompensated transfers, then Medicaid will impose a penalty based on the asset transfer.

How to Find the Next Superstar to Join Your Team

by Candace Wells, COO and Law Business Strategist, Attorney Alchemy

Hiring a new employee is an exciting time in your business. If it’s time to hire some help, it means you’ve met your goals and are anticipating more growth. Congratulations! You’re probably feeling a mixed bag of emotions - anticipation, excitement - maybe even a little fear. Hiring a new employee can also be daunting and a little terrifying, but don’t worry. It doesn’t have to be if you have a tried and true hiring process in place. Let’s dig in so you can start looking for your next superstar.

Watch Your Language – Irregardless of Trends

Vanessa L. Kanaga, InterActive Legal

 
If you are like most of my colleagues, the title of this piece had you grinding your teeth.  In the hopes that you might consider me a credible source and continue reading, allow me to state that I know the term "irregardless" is generally considered incorrect, convention saying that the correct term, "regardless," sufficiently conveys the same meaning.  I recently shocked CEO, Mike Graham, by telling him that irregardless is now acceptable.  Well, admittedly, I did not actually say that it is acceptable, but that I had been reading a book, Words on the Move, in which the author, John McWhorter, makes the case (and I am paraphrasing) that the English language is constantly changing, and words like irregardless may eventually make their way into the realm of acceptable speech, even in formal settings.  His point (again, in my words) is that the function of language is to communicate, and the words we use should be judged on their ability to serve that function; if they enable us to understand each other clearly, then we have no other reason to judge any particular word as "good," "bad," "right," or "wrong."  (For a much more in-depth and intelligent discussion of Words on the Move, please see this New York Times review by another writer whose work I greatly appreciate, Lynne Truss).

Keeping Your Digital Vault Complete, Correct & Current

Betsy Ehrenberg, CEO and founder of Legacy Concierge

 

With over 2.6 million deaths in the U.S. each year, family offices, wealth managers, loved ones and attorneys are often not prepared to effectively erase an electronic footprint and secure digital assets of the deceased.

Digital vaults are available from insurance companies, software providers, national banks, law firms and determined individuals using home-designed spreadsheets or password lists. Regardless of source or sophistication, users should be aware when a secure digital vault can create more problems than it was intended to solve.

First problem, is the vault complete? One easy way to determine if all needed information is in the vault is to imagine who will have access, what they are looking for and why its contents will be used. Generally, persons who need to access vault materials include spouse, sibling, child and/or attorney. Additionally, the vault builder or owner might need to use items in the vault to obtain user names and passwords. Given its many users and uses, it is vital that stored information should be easy to read and understand.