Special Needs Trust

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Great News! 

 It is now easier to establish a self-settled Special Needs Trust for your clients. Effective date as of December 31, 2016, Section 1917 (d)(4) (A) was revised to allow an individual with a disability as defined by the Social Security Act to establish his or her own Special Needs Trust.  

Now, it is no longer necessary to have a court establish the Special Needs Trust. The new Federal Law, “21st Century Cures Act” may reduce the time, money and effort in having to establish a Special Needs Trust.  

We have attached a copy of the applicable section of the Act. If you have clients with a disability receiving means-tested government benefits and receiving a settlement, the client themselves can establish their own Special Needs Trust and protect their government benefits.  

If you have any other questions or need a Special Needs Trust established contact either Pete Losavio or Kent DeJean at (225)769-4200.

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BEWARE OF REVOCABLE LIVING TRUST

Many consumers are executing Revocable Living Trusts. They are being sold on this product on the promise to avoid a succession and probate.

Revocable Living Trusts do help the person avoid succession and probate. But, that’s all it does and this benefit may not be as valuable as one might initially think.

Some Revocable Living Trusts are expensive and may costs as much as a small uncontested non problematic succession. So the financial benefit that you get, may not be as great as you think.

What is important to remember is what Revocable Living Trusts do not do! Revocable Living Trusts are revocable. This means you can remove any property you put into that trust at any time.

Since you can remove the property from the trust, there is no asset protection. If you owe money, your creditors will be able to seize whatever assets you placed into the trust.

Also, you obtain no tax advantage to creating a Revocable Living Trust. You will continue to pay your taxes the same way you always have paid them.

Finally, placing property in a Revocable Living Trust does not shelter it from government entities for you to pay for your long term nursing home care. Medicaid and the Veteran’s Administration will count all property placed into a Revocable Living Trust just like you own it. There is a five (5) year look back period for Medicaid and there may also soon be a look back period with the Veteran’s Administration. You may be missing out on an opportunity to shelter your assets while you are healthy by placing your assets into a Revocable Living Trust.

To obtain additional information on legal and innovative estate planning strategies, you should always consult an experienced estate planning attorney. Kent S. DeJean

Don’t Go Broke in a Nursing Home

Mr. Pete Losavio will be speaking at a  free workshop at Sunrise of Baton Rouge 8502 Jefferson Hwy. Baton Rouge, LA 70809  on Saturday June 27, 2015 at 9:30 am to discuss his new book he co-authored ” Don’t Go Broke in a Nursing Home”.  Please call 1-880-426-6104 to attend.

IRS vs. ID THEFT

LATEST DEVELOPMENT:

THE IRS HAS LAUNCHED A PILOT PROGRAM IN FLORIDA, GEORGIA AND THE DISTRICT OF COLUMBIA WHERE SOME INDIVIDUAL FILERS CAN APPLY FOR A PROTECTED PERSONAL IDENTIFICATION NUMBER.  THESE THREE LOCATIONS SHOW THE HIGHEST PER CAPITA PERCENTAGE INCIDENCE OF ID THEFT. ELIGIBLE TAXPAYERS CAN OBTAIN THE SPECIAL PIN NUMBER WHEN E-FILING THEIR RETURNS.

SSA Inheritance

Will An Inheritance Or Personal Injury Settlement Effect My Social Security Benefits?

It is not unusual for person’s receiving Social Security benefits to come into money or property by way of inheritance or personal injury settlement or judgment. To determine whether the receipt of this money or property will adversely effect your benefits, you must determine what type of Social Security benefits you are receiving.

There are two types are Social Security benefits: Supplemental Security Income( SSI) benefits and the other is called Social Security Disability(SSDI) benefits .

Social Security Disability benefits are paid to persons that have put in the required number of quarter payments over a specified period of time and is not needs based. A person drawing Social Security Disability benefits has no limits on what property they can own. Therefore the receipt of an inheritance or personal injury settlement will have no effect on a person receiving Social Security Disability benefits.

On the other hand, Supplemental Security Income benefits is a needs based program. Claimants are entitled to these benefits only if they do not exceed certain property limits. Therefore the receipt of an inheritance or personal injury settlement may effect on a person receiving .Supplemental Security Income benefits.

If you are unsure what kind of benefits you are drawing, you can obtain this information the Social Security Administration in order to take preventive actions to avoid losing eligibility of your Supplemental Security Income benefits.

Should you have questions about SSA, contact an experienced  Social Security attorney.

Kent S. DeJean

Living Trusts: Not Always Appropriate

While a living trust can be a useful tool, it may not be appropriate for every circumstance.  Mr. Pete Losavio provides for us a few factors useful in determining when a living trust is not the way to go:

<<Living trusts are a good device for avoiding probate, or as it is called in Louisiana, succession.  However, living trusts may not always be appropriate for your situation.

Living trusts are not a good asset protection device.  In fact, it can be detrimental to asset protection.  For example, if your home is transferred into a living trust and you take bankruptcy, then the home no longer has the exemptions because it is no longer considered to be owned by the debtor in the bankruptcy.

A living trust is tax neutral.  There is no tax advantage to the living trust.

Living trusts may be detrimental to affording long term care. Furthermore, if the settlor, or creator, of the living trust transfers his or her house into the trust and later becomes ill and needs to qualify for Medicaid, the house is no longer exempt under the Medicaid rules and is considered a resource, thus that person cannot qualify for Medicaid.

While the living trust may not be a good device, the irrevocable trust is the appropriate device to protect assets.  Not all irrevocable trusts will protect in all situations.  If the person is interested in protecting their assets from Medicaid, then the trust needs to be an irrevocable Medicaid protection trust which is more complex trust than the normal asset protection trust.>>

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New Losavio and DeJean home page coming soon!!! Keep your eye on

www.losaviodejean.com

to see what’s new!

Special Needs Trust: An Overview

On October 19th through 21st Mr. Pete Losavio attended the Stetson Law Special Needs Trust Conference in St. Petersburg, Florida.  A wide variety of information surrounding SNTs was covered, from law changes and updates to new developments in implementation. 

Though not as widely understood as a Will, Power of Attorney, or basic Trust, a  Special Needs Trust can be an extremely useful tool. 

Special Needs Trusts, in a nutshell:

A Special Needs Trust, often called a Supplemental Needs Trust, is designed to enable individuals with a physical or mental disability, or chronic or acquired illness, to have assets in Trust for their benefit.  The assets in an SNT are not considered countable therefore they do not prohibit certain governmental benefits.  Such benefits may include Medicaid, subsidized housing, Supplemental Security Income (SSI), vocational rehabilitation, and other benefits based on need.

A SNT is meant to be used to cover what government benefits do not.  If the government assists with 50% of the disabled beneficiaries needs, for example, then the SNT should provide 50% as well.  If the government provides for 30%, then the SNT should provide for 70%.  SNT should be written so that a sliding scale  is used to allow for such coverage.

Not only do Special Needs Trust allow for continued qualification for benefits, but they are also not subject to creditors or seizure.  Should the beneficiary ever become involved in a lawsuit, the money in Trust will remain there.

The information provided here is general and the specific language to properly draft a Special Needs Trust is very specific.  If you are thinking of having a SNT drafted, make sure you utilize a professional versed in such documents to ensure you’re using it to the best of its ability.

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Information provided in part by the National Special Needs Network

http://www.nsnn.com/Frequently.htm