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Estate Planning Lessons From 2016

After 17 years of practicing estate planning and elder law, I still learn something new every day. Whether it is through researching the law, meeting with clients or attending continuing legal seminars, I continue to grow my depth of knowledge.  Looking back on 2016, I learned the following matters that will help my clients:

  • Claiming an IRA is not as easy as you may think.  I have had 3 clients claim an IRA upon the death of their family member. In all 3 occassions, the bank that controlled the IRA made huge mistakes in distributing the proceeds to the client.  In each case, the bank insisted that the client must take the proceeds out either immediately or over a 5 year period.  This was not the case and would have resulted in terrible tax consequences for our clients.  The lesson - see your attorney for assistance when your loved one dies. It will help in ways you have no idea!
  • Backup Special Needs Trusts are important.  I had a client die who left a decent amount of money to her elderly sister. Her elderly sister is in the nursing home and on Medicaid. I did not draft my client's revocable living trust but I wish I had!  The bequest to the sister will interfere with her Medicaid. If only I had changed my client's trust to our new Wealthdocs trust, which has a back up special needs trust for all beneficiaries, this would have not happened.  Not all trusts that attorneys create have special needs trusts for potentially disabled beneficiaries, but our new forms do. The lesson - change our client's trusts to our new living trust format - this could save the family tens of thousands of dollars in the right situation.
  • Change Powers of Attorney. We see lots of poor legal work that other attorneys do and one of the biggest problem areas is with durable powers of attorney. Poor durable powers of attorney can prevent Medicaid and asset protection planning in the event of your incapacity. The lesson - make sure you see a good elder law attorney you are doing your incapacity planning.
  • See a Lawyer for Your Estate Planning Needs. While going to Legalzoom, Rocket Lawyer or other on-line computer generated websites may be tempting, your estate planning should be more important to you than mere form preparation. I am sure that I will write about this until the day I retire, but doing your estate planning on-line and without an attorney is a terrible way to go.  The lesson - if you are going to do your estate planning, see a good estate planning or elder law attorney. I have seen a number of self-prepared documents this year, all of which were incomplete or completely wrong.  You may not be around to see your mistakes but your heirs will be!
  • Even Simple Medicaid Applications can be Difficult. Our elder law practice helps our clients protect assets and apply for Medicaid. We generally try to help our clients when they have assets to protect (i.e., when income and assets are over the financial guidelines). We have found though that even simple applications can be difficult. The lesson - help our clients with a Medicaid application, even when their assets are at a minimum - they will be thankful later!

This is only a small summary of the legal lessons I have learned over 2016. I am thankful to practice estate planning and elder law with my father and at our great law firm, which gives me learning experiences every day, so I can make my client's lives better.

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D. Rep DeLoach III
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Estate Planning and Board Certified Elder Law Attorney
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