What Is A Holographic Will?
Video Summary
What is a holographic will?
A holographic will is one that is written out by the person, or the testate of the person, that they’re writing their own will. So, it’s a handwritten will. And under Florida law, the holographic will – or a handwritten will by the testate or the person that’s making out the will for themselves – must comply with Florida law, which requires that it be witnessed by two different witnesses who sign in the presence of the person that’s writing out the will.
I hear from my clients, from time to time, where they’ve put off making out a will. They get ready to go on a trip – particularly if they’re going to Europe or getting on an airplane ride – that they’ve written out something as to what they want done. They show it to me after they get back safe and sound, and then say, “Well, I did a will, myself.” Well, that’s not gonna be effective in Florida, because it doesn’t have the two witnesses, or wasn’t executed with the formality that’s required under Florida law, which is the two witnesses.
So if it is witnessed and the witnesses were present when the testate or the person making out the will signed it, it’s not effective. If they were there, it is effective. And then we’ve gotta try and decipher what you had to say, without any guidance of an attorney.
I believe that there are some states that give preference to holographic wills, and not require them to comply with the formalities of a typewritten will or a will prepared by a lawyer. But that is not the case in Florida.
So, if you have a holographic will, give me a call at 727-847-2288, and I’ll set you up a will conference. Thank you.
Ask Jaleh: Who Controls the Money In A Special Needs Trust?
Video Summary
Who controls the money in a supplemental or special needs trust?
Perhaps the most important consideration for an SNT is the selection of a trustee. The trustee of the special needs trust is critical to the successful achievement of the goals and objectives of the special needs trust.
First, the trustee should never be the beneficiary of the special needs trust, or the beneficiary spouse, because of the control and the deeming factors. The trustee should be someone who is experienced with financial matters, or who is capable of retaining the appropriate financial expertise to assist in the management of the assets in the special needs trust.
The trustee must have the time and be willing to exert the effort to become acquainted with and maintain current knowledge of the needs of the beneficiary. And, very importantly, the requirements of the public benefits programs for which the beneficiary of the special needs trust is eligible.
Often, especially with a supplemental needs trust, it is advisable to name co-trustees. One co-trustee could be a corporate trustee, and the other could be a family member or close friend who has frequent contact with the beneficiary of the special needs trust.
Whether co-trustees, a single corporate trustee, one or more individuals are appointed as trustee, consideration should be given to the use of a care manager. The special needs trust can provide that a care manager be hired by the trustee of the special needs trust, to provide the constant contact with the beneficiary necessary to become aware of the beneficiary’s personal needs. And then they can communicate that information regularly to the trustee.
The grantor of the special needs trust can also use a memorandum of instruction, or other similar type of document, to communicate the various personal information about the beneficiary of the special needs trust. Such as the beneficiary’s favorite color, favorite food, likes, dislikes, medications, and other important information regarding the beneficiary.
The special needs trust should include terms that prohibit the distribution of any trust asset for anything provided by the public benefits programs for which the beneficiary of the special needs trust may be qualified. If the trustee conscientiously complies with those provisions, the special needs trust assets will not be deemed to be owned by the beneficiary of the special needs trust, and will be available to use in the trustee’s discretion for other needs of the beneficiary of the trust.
Another common provision for a supplemental needs trust is allowing the trustee to make payments that could possibly disqualify the beneficiary of the trust for some government benefits, if the trustee decides that it is in the best interest of the beneficiary. For example, the trustee may use the special needs trust funds to purchase a house on behalf of the beneficiary. This would cause a reduction in the beneficiary’s social security income stipend, because it is considered a shelter expenditure. However, if the beneficiary of the special needs trust has housing needs that exceed the government benefits, it is in the beneficiary’s best interest to use the trust funds for better housing.
Special needs trusts are commonly used to provide the beneficiary with specially equipped vehicles, concert tickets, transportation tickets, dental work – these things are not covered by Medicaid or other public benefits programs. They could also be considered to be used for things such as the theater, performing arts admission tickets, computers, and other electronic devices such as televisions, iPads, and anything that would be necessary to the benefit of the beneficiary of the special needs trust.
With a third party special needs trust, the grantor has the right to designate, in the special needs trust document, who will be the beneficiaries of the trust upon the death of the primary beneficiary.
In conclusion, special needs trusts, whether third party or self-settled, are valuable tools for beneficiaries who are disabled or have other special needs.
If you’re interested in setting up a special needs trust, please contact me at Waller and Mitchell, at 727-847-2288.
Ask Jaleh: How To Pay For Elder Care.
Video Summary
Paying for elder care. If you are looking for care for yourself or a loved one, you must understand how you’re going to pay for it. Many people have a misperception that Medicare, social security or Medicaid will pay for their long-term care needs. Medicaid does cover nursing facility care for the impoverished and Medicare may cover some of the costs of nursing center care for those who require short-term rehabilitation. But both require individuals to meet certain physical and medical standards. Generally speaking neither covers the entire cost of long-term home health care and assisted living care.
Personal resources. Most personal care home residents and roughly 20 percent of nursing center residents pay for costs out of their own savings and assets. Frequently when people enter a nursing center for extended long-term care, they first pay for their care out of their own assets and then expend their resources and apply for Medicaid. This can be prevented by properly planning for long-term care in advance. There are many estate planning tools that will enable one to utilize their resources for their own benefit prior to expending their resources in order to exhaust them to meet the income and asset standards required for Medicaid coverage.
Private insurance. For the most part unfortunately private medical insurance does not cover the cost of personal care or nursing center care except in very specific circumstances. Long-term care insurance. Long-term care insurance can be purchased to provide some payment for nursing center care and home healthcare as well as assisted living care. Some Medicare supplementary insurance policies which are often referred to as Medigap insurance also may provide some limited payment. Many health maintenance organizations, also known as HMOs and other coordinated care plans participate in the Medicare and Medicaid programs. These healthcare plans often cover certain benefits in addition to those required by Medicare and Medicaid and are experienced in coordinating a member’s healthcare.
Some HMOs may also offer more medical or supportive services. Others may not require a hospital stay before approving a nursing facility admission. Medicare. Medicare is a federal health insurance program for people age 65 and older as well as certain people with disabilities younger than 65. Historically Medicare was never intended to provide the kind of extensive support required by today’s elderly population. Medicare pays for acute, episodic and rehabilitative care as well as some preventative care. It does not provide a comprehensive long-term care component and generally does not cover personal home care costs but may pay for some short-term services, for example physical and other therapies. But it is also contracted through a home healthcare agency and provided to the resident at their home.
Medicare covers only those nursing center services rendered to help someone recover from acute illness or injury. Medicare is administered by the Federal Medicaid Services and is divided into two parts: hospital insurance which is commonly referred to as Part A and medical insurance which is commonly referred to as Part B. Eligibility for Medicare. Nursing center coverage falls under Part A of Medicare and is very, very limited. If certain conditions are met, Medicare only pays for the first 20 days of care in a skilled nursing center. For the 21st through the 100th day the patient must share or co-pay for the cost of care by paying a daily co-insurance rate which does change yearly. This is typically what a Medigap policy will cover.
Medicaid. Medicaid is a joint federal state government program designed to provide healthcare assistance to low income people with limited assets and it has become the major player for services for care in skilled nursing centers across the country. Eligibility. Medicaid will pay for nursing center care for those individuals who meet a state determined poverty level and certain health-related criteria, provided the nursing center is certified and meets a stringent set of government standards.
The Florida Medicaid Program. In Florida the Agency for Healthcare Administration, also commonly referred to as AHCA, is responsible for Medicaid and has implemented the statewide Medicaid Managed Care Program. Long-term care insurance. Long-term care insurance can protect personal assets and inheritance for the family, provide greater choice in the selection of long-term care settings such as home care, nursing care, etcetera and generally provide for financial security. Because cost for long-term care policies can vary widely, even for similar policies, shopping and price comparison is very important.
Long-term care insurance policy premiums are set based upon several factors such as age, health, length of deductible period, the amount paid and the duration of the benefits. Higher daily benefit and optional features such as inflation protection and non-forfeiture benefits do increase the premium. According to the Health Insurance Association of America, the annual premium for a low option policy for a person at age 50 is about $850 annually. For a person at age 65, that same policy costs about $1,800 and a person at age 79 about $5,500. You should consult with your local insurance or financial advisor on the current costs in your area. Counseling services may also help you select a policy which is most appropriate to your specific needs.
People purchase long-term care insurance for several reasons. If you are deciding whether and when to buy long-term care insurance, you should consider the following questions. Will you income cover long-term care expenses along with other ongoing expenses? If you purchase such insurance, can you pay for the deductible period and coinsurance? Can you pay the premiums now? Can you pay it if the premiums rise? Will you be able to pay the premium if your spouse dies? Will you be able to pay for upgrading benefits to meet inflation? Would you become eligible for Medicaid if you have large medical bills or entered a nursing home where your average yearly cost could run up to almost $30,000?
According to the Centers for Medicare and Medicaid Services, before signing a long-term care insurance policy, you should also ask if you have a period during which to cancel the policy and receive a refund for the first premium. Reverse mortgages are also a way to fund long-term care for seniors who are desirous in staying in their homes. Seniors who live at home and have a low or no mortgage balance can use a portion of their home equity for in-home care through a federally-insured loan program.
Veterans’ benefits may also be a way to fund long-term care. Aid & Attendance, a largely unknown benefit provided through the VA provides monetary assistance to qualified veterans who have served during times of war as well as their surviving spouses. This benefit can be used to fund long-term care.
Life insurance. Life insurance may also be a way to fund long-term care. Private third party organizations now allow seniors to use a life insurance policy to help pay for home health by converting a portion of the policy’s death benefit into a long-term care benefit paid directly to a care provider.
Funding long-term care takes proper planning. And Waller & Mitchell has the tools to assist you and/or your loved one with this endeavor. Please contact us at 727-847-2288 to set up an appointment to discuss all of your planning needs and we will be happy to assist you.
- Published in Medicaid Planning, Videos
Can I Use Renovations Done To My Home Office As A Tax Write Off?
Video Summary
Can I use renovations done to my home office as a tax write-off if I’m not self-employed?
This is an issue that you need to talk to your CPA about is whether or not you can write off a portion of your home as far as the expenses, the utilities and depreciate a portion of your improvements as a home office. I don’t necessarily believe that you have to be self-employed to do the write-off. However you do need to devote it to your particular job as far as that’s concerned as being a requirement.
But the answer to the question lies between you and your certified public accountant as to whether or not you can write it off and how much you can write off and there is a certain, I don’t think a bright line test but it’s more of a feel for the CPA to be able to tell you what percentage of the utilities and the renovations that you would be able to write off. So I urge you to call and speak to your CPA about that issue. But if you have any other issues well give me a call at 727-847-2288.
- Published in Real Estate, Videos
What Are The Homestead Laws in Florida?
Video Summary
What are the homestead laws in Florida? The homestead laws were provided for in the Florida Constitution. The one that people are most familiar with is in Article XV that deals with real estate taxes. And it provides that if you’re a resident of Florida and you live in your home and you move in and own it before the end of any particular year, you can apply for homestead exemption by March 1st of the following year and obtain homestead exemption on taxes. That means if you were granted homestead exemption, you get exempt the first $25,000 of your assessed valuation or taxable valuation from taxes which saves you about $500. You have to pay taxes on the taxable value of the property from $25,000 to $50,000. You get to exempt from $50,000 to $75,000 all taxes except school taxes and that will save you about another $300 and then you pay for all the tax on anything above $75,000.
There is an added benefit to having homestead exemption. It’s under Save Our Homes and I’m not sure where that’s provided for in the Constitution, but the net effect of it is that if you have homestead exemption the tax value of your property will not increase by more than three percent or the cost of living index, the lesser of the two. In years past that’s gone up very, very little and the longer you own the property the more you can appreciate it. So if your tax valuation does not go up every year, well then your tax bill should remain approximately the same since it’s only a millage rate and hovers around two percent in the county. It’s a little bit more if you live in a city.
So homestead exemption is really a great benefit and the longer you live in your home the more you appreciate it. The other nice thing about homestead and if you decide to sell your home and move to another house, whether you’re upsizing or downsizing, be sure you go whenever you apply for a homestead exemption on your new home, take your old tax bill with you and advise the property appraiser when you apply for homestead exemption that you had homestead on your prior home and there is something about portability, meaning they’ll prorate your old assessed valuation against the new assessed valuation and you can get to carryover some of the benefits from having homestead exemption on your original home.
So that’s I believe under Article XV as far as the tax valuation. Under Article X, Section 4 of the Florida Constitution, it provides that the creditors cannot place a lien or a claim on your homestead property. That’s property that you live in and you can protect that from the claims of creditors. It doesn’t matter how much you owe your credit card company or doctors or anyone else other than the United States Government, they cannot take away your home. Now there is an exception for the Internal Revenue Service and the federal government in that they can attach your home even though it’s homestead property. If you file for bankruptcy, there are certain rules as far as be able to exempt it as homestead. Here again that’s governed by federal law and will tell you how long you’ve lived and if you’ve owned the home for a certain number of days which I think comes to about two or three years, well then you can exempt the property. A lot also has to do with how much your homestead is worth as far as how much the exemption can be. But the Florida Constitution does protect your home from creditors.
Another thing that you don’t want to think about but if you pass away and you leave your home to your children or your grandchildren or your heirs, that exemption says inures or passes down to your children. So if you leave a bunch of credit card debt or any kind of medical bills, whatever you leave behind as far as bills are concerned and you leave your home to your children other than a mortgage, they don’t have to pay the creditors any money and the house or your homestead passes to your children.
This is a very complicated subject and so I might do another video about whether or not to put your homestead in a trust or a joint trust as far as that’s concerned and also the effects of transferring your home during your lifetime on Medicare and Medicaid. So if you have any questions about homestead, give me a call at 727-847-2288.
- Published in Real Estate, Videos