What Are You Waiting For?
Let's say you have a child with "special needs," or another family member. If your estate plan doesn’t have a special needs trust, why not? Here are a few of the excuses I’ve heard, and some thoughts to consider:
I don't have enough money to justify a special needs trust. Really? You don't have $2,000? Because that's all you have to leave to your child outside a special needs trust to jeopardize their SSI and Medicaid eligibility.
I can't afford to pay for the special needs trust. It can be expensive to get good legal help. But the cost of preparing a special needs trust for your child is likely to be much less than the cost of care for a couple of months, which is what will happen if you die without a special needs trust, since it will take that long to maneuver an alternative plan in place. Even if there is no loss of benefits, the cost of fixing the problem after your death will be several times that of getting a good plan in place now, and the result will not be as good.
On January 23, 2015, in an attempt to “maintain the integrity of the program,” the VA proposed sweeping changes to its regulations regarding net worth and asset transfers. While some of the proposed changes may be favorable to a claimant by providing some clarity and consistency, many of them may significantly impact a veteran’s eligibility for benefits and the timeline in which they will be received.
The Good: Establishing a Bright Line Net Worth Limit
Currently, the VA does not have a clearly established net worth limit. While the VA takes into account such factors as liquidity of assets, number of dependents, and life expectancy of the claimant, there are no definitive criteria for determining whether a claimant’s resources are sufficient to meet their basic needs without the pension. However, it has been our experience that only those applicants with a net worth below $80,000 (the lower, the better!) are seriously considered.
With the increase in complexity of today's family structures and the dynamics that can result, the family members of a loved one who has passed away often find themselves in a position in which they question the validity of their loved one's purported estate plan. The family members may doubt that the decedent's disposition actually reflects his or her wishes, and as a result, the family may want to challenge the will's validity. In order to successfully do so, the family members typically must file a will contest action. In such actions, the court is asked to disregard the decedent's will and instead provide a distribution of the decedent's estate which more closely resembles what the decedent actually intended. The family members must allege that there are grounds for setting aside the decedent's will, including the following:
- Undue influence—A will contest on the basis of undue influence involves the issue of whether the decedent, of his or her own free will, made the distribution provided in his or her estate plan, free from coercion by another individual. In Pennsylvania, a person challenging a will on the basis of undue influence must demonstrate the following elements: 1) a confidential relationship between the proponent of the will's validity and the testator; 2) the proponent of the will's validity receives a substantial benefit under the will; and 3) the testator had a weakened intellect.