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Basic Estate Planning for Seniors “BASIC ESTATE PLANNING FOR SENIORS” Will vs. Revocable Living Trust A will is a legal document, which distributes your property upon your death. A will is simple and inexpensive. A Revocable Living Trust is a legal document, which acts similar to a Will in distributing your property with minimal hassle. Generally, a Will involves hassle. Probate Court: Why Wills Do Not Avoid Probate Court? A Will is public information and must be filed with a court. For example, Sam Smith aged 70 years old is deceased and left a Will. Sam Smith’s heirs must file Sam’s Will with Probate Court in the County where Sam lived. Unlike a Will, a Revocable Living Trust (hereinafter referred to as “Trust”) if planned correctly involves no court involvement and passes one’s assets quickly and easily upon death or incapacity. The second difference between a Will and a Trust is that a Trust plans for incapacity such as Alzheimers, dementia, and strokes. Seniors must be concerned about long-term care issues and incapacity planning is more vital now than planning for one’s transfer of assets upon death. An estimated fifty (50) percent or more Seniors are facing long-term care issues.Unlike a Will, a Trust plans for incapacity and death. For instance, Sam Smith has a stroke and is unable to manage his healthcare concerns and finances. In this example, Sam Smith’s family members must either have a valid power of attorney (healthcare and property) or face Guardianship Court. Additionally, your loved one’s must undergo a probate or court procedure in every state where you own real estate. This creates a burden upon your family and is expensive and time consuming. Generally, a probate proceeding takes a minimum of nine (9) months to several years. More importantly, court involvement creates family conflict because of Will contests. Attorneys and Executors must mail notices to potential heirs involving Probate Court unlike a Trust. A Trust is private and is typically a secret document with only beneficiaries knowing the Trust’s contents and assets. Guardianship Court & Incapacity Planning Guardianship Court is a type of court that determines whether disabled adults are incapacitated and administers a process in choosing a Guardian to manage their financial matters and healthcare concerns. With a Trust, one’s assets such as their primary home, checking/savings accounts, certificate of deposits and any other assets are titled in their Trust’s name. Many people add relatives to their accounts or house deed, but this is ineffective because their relatives may have lawsuits and other legal matters that could jeopardize a senior’s assets. In this financial crisis, lawsuits, judgments, and bankruptcy are major concerns. Second, relatives and friends die and complicate a senior’s life. Powers of Attorney for Property & Healthcare There are two types of Powers of Attorney: Property & Healthcare. A Power of Attorney for Property appoints an agent or successor agent(s) to manage one’s finances in case of incapacity. It is highly recommended to have multiple agents in case your original agent is unavailable, deceased, or incapacitated. An Agent is empowered to make financial decisions for the incapacitated adult. The second type of Power of Attorney is a Power of Attorney for Healthcare. In a Power of Attorney for Healthcare, you state your wishes in case you are unable to make healthcare decisions. POWER OF ATTORNEY VS. LIVING WILL A living will is an advanced healthcare directive informing your doctor how you want them to proceed in case of an emergency. A Power of Attorney is much broader than a Living Will and it instructs your physician how to proceed in a medical emergency and appoints an Agent (your loved one) to make healthcare decisions for you. Thus, unlike a living will, you appoint an Agent to consult with your physicians and family members and make healthcare decisions as you have instructed them to do. Conclusion In general, a will is sufficient for somebody that does not own any real estate and have limited assets. In contrasts, a Revocable Living Trust is generally better for Seniors with a house and modest to large assets. At a minimum, Seniors should have a Power of Attorney for Property & Healthcare in combination with a Will and/or Revocable Living Trust. Sean Robertson is Principal of Robertson Law Group, LLC and he concentrates in Elder, Wills & Trusts, Probate & Guardianship, and Asset Protection for Seniors & Adult Disabled persons. Sean can be reached at 312-498-6080 or RobertsonLawGroup@gmail.com. Sean has a nationwide Elder law, Estate Planning, & Asset Protection law practice. Sean has his website at www.robertsonlawgroup.com.Estate Lessons From Michael Jackson's Death “Estate Planning Lessons from Michael Jackson’s Death” In this Article, we will discuss two important estate lessons learned by Michael Jackson’s death. The first estate lesson is your legal affairs must be planned prior to your death or incapacity. A. Guardianship of Minor Children & Incapacity Planning Michael Jackson’s death is an educational opportunity because seniors face similar issues to Michael Jackson. First, Michael Jackson (hereinafter referred to as “Jackson”) deceased with three minor children. Seniors are having children at later ages and are responsible for parenting their grandchildren. Unfortunately, death is a hard topic to grasp, but one that must be planned for. Adult guardianship is a type of probate court, which administers an adult disabled person’s financial and health matters when they are incapacitated. Guardianship court also hears legal matters involving minor children who have either inherited money or need a guardian appointed. Jackson’s will preferred his mother, Katherine Jackson (hereinafter referred to as “Jackson’s Mother”), to be guardian over his children. A will gives the guardianship court clear direction of Jackson’s intent. Estate disputes costs heirs thousands to hundreds of thousands of dollars in attorney’s fees and costs and more importantly, your family may be destroyed over your estate matters. The key lesson is anticipating your potential family conflicts and have your proper legal paperwork prior to your death or incapacity. B. Privacy as a Dispute Resolution ToolPrivacy is a vital tool in managing potential family estate conflicts. Michael Jackson’s will name his Family Trust as his estate’s beneficiary. A family trust or otherwise known as a “Living Trust” or “Revocable Living Trust” is a legal written document which distributes property upon your death or incapacity. Unlike a will, a family trust does not involve court procedures and is administered outside of court. Hence, in contrasts to probate court where a will is administered and is public information, a family trust has no requirement of mailing out notices to potential heirs including disinherited heirs. More importantly, a public document such as a will enables a will contest attorney to review the language and determine how to contest the validity of the will. In contrasts, a family trust is more difficult to attack because disinherited beneficiaries have no legal right to see the contents of the document. Therefore, the non-court involvement and privacy of a family trust is a powerful tool in managing potential family disputes.by Sean L. Robertson, Attorney at Law Robertson Law Group, LLC 9923 S. Ridgeland Avenue, Suite 99 Chicago Ridge, Illinois 60415 w) 312-498-6080 or RobertsonLawGroup@gmail.com

Single Member LLCs & Home Ownership/domestic partnersThis Article will examine Single Member LLCs and why they are good for asset protection purposes of your personal residence. Today, I had a client that came in with his girlfriend/domestic partner. In society, same sex relationship and domestic partners (boyfriend/girlfriend) is become increasingly popular.

Asset protection is difficult for domestic partners because tenancy by entirety (way of owning a home) is not available. Tenancy by Entirety is a method of titling your home, which gives husband and wife the benefit of judgments against one partner not attaching to their personal residence. For example, Husband and Wife own 123 Madison Street, Chicago, Illinois as their personal residence and own their property jointly as tenancy by entirety and not as tenants in common or joint tenancy. John Smith sues Husband and wins his lawsuit and a judgment of $100,000 against Husband. In this example, John Smith's $100,000 lawsuit does not attach as a lien or judgment against Husband and Wife's personal residence. If Husband and Wife owned by the property as Joint Tenants as most married couples, the Husband's judgment could force Husband and Wife into auctioning their home to satisfy Husband's Judgment. In Illinois, Husband and Wife have a $15,000 per person homestead exemption. A homestead exemption is the amount of equity that cannot be touched by a creditor. For instance, in a typical situation, the Husband and Wife's mortgage company is first in line to get their mortgage paid first in case of an sale or auction, then Husband and Wife get a homestead exemption of $15,000 per person ($30,000 as married couple) and then the creditor gets the amount of money to satisfy their judgment. Hence, owning one's property as joint tenants or tenants in common is very risky.

In every state except Louisana and Tennessee, private land trust are a powerful way of owning real estate. A private land trust is a strategy where a Trust company appears as though they own the legal title of a property. Thus, a private land trust serves the purpose of shielding the identity of the owners of the real estate property. Secrecy is an important tool and is used often. With a private land trust, the owners of the property enjoy the "beneficial interest", which means they get the proceeds upon sale and have the ability to direct the legal title holder (trustee) to do certain actions such as transfer/assign title to another party. Additionally, a private land trust converts a real estate property interest from real estate to personal property. This enables real estate owners to avoid judgments and liens being attached to their property. With a lien or judgment, one cannot sell their property without paying all the lien holders such as the mortgage company or a creditor (such as a credit card company).

Owning real estate in a private land trust as two individuals is problematic. It is problematic because a creditor could force two individuals to undo their land trust and transfer the property back into their individual names. Thus, a creditor is using the "beneficial interest" component of a private land trust. With a single member Limited Liability Corporation (LLC), each individually is creating a different business entity which is seperate from them personally. Technically, the business entity is a seperate creation distinct from the individual.

For instance, Girlfriend and Boyfriend own their property jointly and quit claim their property interest from their names to their private land trust with Girlfriend's single member LLC as 1/2 owner and Boyfriend's single member LLC as 1/2 owner. Thus, this title arrangement arguably makes it more difficult for a creditor to force each individual to transfer their beneficial interest in the property back to themselves. Why? The boyfriend and girlfriend technically have set up a seperate business entity, which has a different federal tax identification number (similar to social security number), which is not them. Again, this is not a perfect arrangement because a court could disregard the single member LLC from a liability standpoint and decide that a single member LLC is the same as the individual. This is not perfect but the only one hundred percent protection for a boyfriend and girlfriend is to get married. Federal and state law treats a married couple better than a domestic partner or same sex couple. Therefore, the single member LLC is a good asset protection plan, but it is not perfect.

For tax purposes, the single person LLC is disregarded, which means the IRS treats boyfriend and girlfriend as though they own their primary residence as individuals and not as business owners.

Sean Robertson is a Wealth Preservation Attorney and Founder of Robertson Law Group, LLC. Sean concentrates in Wills and Trusts, Asset Protection, Elder law, and Commercial Litigation. Sean can be reached at 312-498-6080 or RobertsonLawGroup@gmail.com.

Robertson Law Group, LLC
312-498-6080 or RobertsonLawGroup@gmail.com
Wills Trusts Phyician Legal Planning and Elder law