When the Law Firm Makes Mistakes on VA Claims

July 6, 2015

by Lawyers With Purpose with No Comment Estate Planning Drafting Software Legal Technical VA

I wish I could claim that I don’t make mistakes. I pride myself on my precision and attention to detail, so when I do make a mistake it pains me personally as well as professionally. However, mistakes do occur, especially when you are dealing with the amount of numerical data that your team does from identification numbers, dates, money figures, and account numbers, just to name a few.

I have experienced more than once the sinking feeling in my gut when I realize that I have committed an error. On two occasions, deadlines to file VA correspondence had passed – one was for filing an appeal and the other was for filing an initial application a month after the client expected us to. In each case, it cost the client money, which meant that it cost the firm money.

Dwelling on the mistake will only make it worse. After having realized that you made a mistake, what do you do next? Take these five steps!

Devise a solution(s)
Inform the attorney/supervisor
Inform the client
Implement the solution
Learn from the mistake

Devise a Solution

For some, the first instinct may be to try to fix or cover up the mistake. Let’s hope that is not you. The second inclination may be to rush directly to the attorney and confess. While there may be some situations when you should notify others in the firm immediately – for example, you neglected a deadline that is now four hours away – in most cases you should try to devise solutions to manage or overcome the error. If you cannot personally discern a viable solution, then at the very least pull pertinent documentation or regulations to present to the attorney when sharing the problem. Be aware that with some errors, there may be no solution other than to apologize and make it right with the client.

Inform the Attorney

After coming up with a solution or supportive documentation, it is a priority to inform the attorney or your supervisor. This is a difficult conversation to have. For guidance on how to initiate such a conversation, refer to another Lawyers with Purpose blog post, “A Tough Conversation”. Although this is not an easy conversation to have, it is crucial to remain as professional as possible and to focus on resolution. There will be plenty of time to cry about it at home, if necessary. It is important that the attorney knows that you take such occurrences as seriously as he/she does and that you are committed to making things right. The attorney may be livid at the situation, which can appear to be directed at you. The anger or frustration should be minimized if you come prepared with solutions.

Inform the Client

After the attorney has been able to problem solve, before taking any action, the client must be informed about the problem and any possible solutions or consequences. Depending on the type of error, the communication can be by email (i.e. we misspelled your father’s name on the VA application, we will send in a statement in support of claim to correct it); by phone (i.e. we didn’t file the application as soon as we told you we should, but we are filing it now); or by written correspondence in the mail (i.e. the appeal was due last week but we missed the deadline, so these are your options).

Implement the Solution

After the client has had an opportunity to respond, the next step is to implement the solution or action plan that was approved by the attorney and the client. Whatever the solution may be, act purposefully and diligently to implement it. You can tell a lot about a person’s character by the way they handle their mistakes.

Learn from the Mistake

Finally, you must LEARN from your mistakes. You may receive a note in your personnel file or even a reprimand. You may feel unfairly punished. Taking it personally will only paralyze you from moving forward. Be proactive and analyze why the mistake happened. Were your systems or processes not followed? Are there systems and processes that need to be added? Was someone not held accountable when they should have been? By determining why the mistake occurred, you can then proceed to figure out how not to repeat it. If you don’t take this final step, then you just made a bigger mistake than the one that started you down this path.

If you aren't a member and want to learn more about how Lawyers With Purpose can help you grow your existing estate or elder law practice into the practice of your dreams, join us on July 23rd for our Having The Time To Have It All webinar at 2 EST. Space is limited so make sure you mark your calendar and grab your spot today!

By Sabrina A. Scott, Paralegal, The Elder & Disability Law Firm of Victoria L. Collier, PC and VA Production Coordinator for Lawyers With Purpose.

Victoria L. Collier, Veteran of the United States Air Force, 1989-1995 and United States Army Reserves, 2001-2004. Victoria is a Certified Elder Law Attorney through the National Elder Law Foundation; Author of “47 Secret Veterans Benefits for Seniors”; Author of “Paying for Long Term Care: Financial Help for Wartime Veterans: The VA Aid & Attendance Benefit”; Founder of The Elder & Disability Law Firm of Victoria L. Collier, PC; and Co-Founder of Lawyers with Purpose.

Welcome Kimberly Brannon, LWP Legal-Technical Trainer

July 2, 2015

by Lawyers With Purpose with No Comment Estate Planning Drafting Software Legal Technical

Lawyers With Purpose is pleased to announce that Kimberly Brannon has joined us as full time Legal-Technical Trainer.

Kimberly brings 11 years of experience in the practice of law in estate planning and elder law, and 5 years of experience running her own practice. She graduated from the University of Georgia with a BA in Political Science in 1998 and received her law degree from University of Alabama in 2004.

Her role at Lawyers With Purpose is to assist members and their law firms with legal training and software support. Kimberly is an Ambassador for the National Alzheimer’s Association. In her advocacy for the Alzheimer’s Association, she has raised enough funds for research to be named a Champion for Alzheimer’s 3 times, and was proud to be a part of lobbying Congress to unanimously vote the Hope for Alzheimer’s Act into law.

You can reach Kimberly for all your technical legal and software support needs at kbrannon@lawyerswithpurpose.com or by calling her directly at 877-299-0326 x 108.

Welcome Kimberly!

Roslyn Drotar, Online Marketing Strategist – Lawyers With Purpose

Bigstock--d-question-mark-on-white-back-62978239

VA Approval – Now What?

June 30, 2015

by Lawyers With Purpose with No Comment Legal Technical Systems & Processes VA

Congratulations! You received approval of your VA Pension with Aid and Attendance claim. Your job is done, right? Well, not quite.

Once you receive an approval letter, there are three steps your firm should follow: Review for accuracy, identify next action, and then inform your client of the results and what to do next.

Review for accuracy

Just because you have an approval does not mean there are no errors in the decision. The two main issues to check are (1) the effective date (payment start date) and (2) the monthly benefit amount. You should already have a pretty clear understanding of the eligibility date and the expected amount when you file the formal claim. The payment start date should be the first day of the month following the month in which you submitted the informal claim/intent to file or formal claim. For example, if an intent to file was submitted and received by the VA on May 20, 2015, then the eligibility date would be June 1, 2015. The monthly benefit amount, assuming that the financial information you had was accurate, is the Maximum Annual Pension Rate (divided by 12) minus Income for VA Purposes (IVAP). For example, the Maximum Annual Pension Rate (MAPR) for a married veteran who needs the aid and attendance of another person with activities of daily living is $2,120 per month. The gross income of the veteran and the spouse is $4,500 per month. After deducting the veteran’s assisted living facility costs of $5,000, the IVAP is $0. Thus, the difference between the monthly MAPR of $2,120 and $0 is $2,120 and the veteran would be paid the maximum.

When using the Lawyers with Purpose copyrighted VA Benefits Qualification Worksheet, these figures are automatically calculated for you. On the approval letter from the VA, this information is generally found on the first page in the form of a table. This table will have at least three columns for “Monthly Entitlement Amount,” “Payment Start Date,” and “Reason for Change,” and as many rows as there are changes in rate.

Identify next action

If there are errors, then you should identify the deadline for your response. Responses may include a Request for Reconsideration (RFR) and/or a Notice of Disagreement (NOD). You should also identify what further information you may need in order to document the grounds for your RFR or NOD. The NOD must be filed within one year of the date on the decision letter. More information regarding this process can be found in the blog post, “What To Do With A Denied VA Application – Part 2”

In contrast, there is no real deadline for the request for reconsideration, as it is not a formal VA adjudication process. The RFR is essentially the request that the original adjudicator reconsider his/her original decision because you can provide new information or enlightenment regarding previously submitted information that the VA failed to interpret per their regulations. It is always worth filing a request for reconsideration, even if you plan to file a Notice of Disagreement, because the former process is much quicker than the NOD route. If there are no errors in the approval, the next action may be simply to inform the client. However, the VA may propose a finding of incompetency on the basis of the physician’s statement (VA form 21-2680) provided with the claim. You will immediately know if there is an incompetency proposal because there will be two extra columns in the table already mentioned, titled “Amount Withheld” and “Amount Paid.” There is also an additional section in the letter called, “We Have Withheld Benefits.” Sometimes the VA includes a simple response form to complete and return, but even if it does not, you should respond by returning a 21-4138 Statement in Support of Claim that acknowledges and accepts the finding of incompetency and nominates a fiduciary, usually a family member.

Inform the client

Once you identify the next action, you must inform the client – preferably in writing – of the accuracy of the approval letter and explain the next step(s), if any. This can be as simple as confirming the approval and the monthly benefit amount. It should also explain when to expect the first monthly deposit as well as the receipt of any lump sum retroactive benefits. If applicable, you would also describe what to expect during the fiduciary process or appeal. Finally, be sure to be specific in any requests for further documentation to expedite data collection and your responsiveness to the VA. Getting an approved VA claim can be a challenge. You should celebrate each one! However, don’t overlook these three essential steps. Incorporate them into your firm’s processes. Congratulations!

If you would like to learn more about creating the estate or elder law practice of your dreams, join our webinar "Having The Time To Have It All" on July 23rd at 2 EST and learn about how Lawyers With Purpose can help get you there. Click here to register and reserve your spot today.

By Sabrina A. Scott, Paralegal, The Elder & Disability Law Firm of Victoria L. Collier, PC and VA Production Coordinator for Lawyers With Purpose.

Bigstock-Checklist-With-Green-Checkmark-89922218

VA Pension Claims: What to Include and Exclude

June 16, 2015

by Lawyers With Purpose with No Comment Estate Planning Drafting Software Legal Technical VA

A successful VA pension claim depends on the inclusion of the right VA forms as well as their correct completion. This is particularly important in the case of the Fully Developed Claim (FDC) Program, which is the relatively quicker claim adjudication process in comparison with the Standard Claim Process. However, how important are the lesser-discussed verification documents to a claim’s success? These supporting players may be more important than you realize.

To ensure consistency with files, we recommend that firms provide a checklist of necessary documents for each client to gather for review before each consultation. The requested items include biographical data, income and asset verification and current estate planning documents. The more complete the response is to this checklist, the more accurate and effective our evaluation and recommendations are to the client.

More importantly, however, is having the documentation to submit with a VA claim for pension with aid and attendance. Instructions on the VA Forms 21-527EZ and 21-534EZ stipulate, “submit simultaneously with your claim all necessary income and net-worth information." If you fail to submit the proper supporting documentation, the VA will delay or deny the claim. The instructions for these forms further state, "It is your responsibility to make sure we receive all requested records that are not in the possession of a Federal department or agency.”

One of the most important supporting documents is proof that the veteran was indeed a wartime veteran. The most common way of verifying this is by submitting the discharge paper, commonly the DD-214. In the absence of any formal record of service, you can use a “buddy affidavit,” in which a fellow service member attests to having served with the veteran. The VA should attempt to confirm service if you do not submit this documentation; however, it is incumbent upon you to do your best to provide this, as your claim will not proceed until this aspect of eligibility is confirmed.

Records documenting marital history also may cause issues when they are omitted. You should obtain marriage certificates, divorce decrees, and death certificates of all previous spouses for both the veteran and his or her spouse. The reason for this is that the VA must ensure it is paying the correct amount of monthly pension and that payment is going to a qualified beneficiary.

Knowing which documents to include is important. Just as important is knowing which documents NOT to include. The Improved Pension program with aid and attendance is “means” based, so it requires the applicant to meet certain income and asset limitations. We recommend that you provide verification of all income and assets from the date of eligibility (the effective date). The VA may only consider the claimant’s net worth and income as of the effective date, which is determined by when the claim was submitted, or when an intent to file a claim was submitted. Any financial documents pertaining to net worth or income prior to the effective date are irrelevant to the claim process, pursuant to Title 38 of the Code of Federal Regulations §3.400, which states, “Except as otherwise provided, the effective date of an evaluation and award of pension, compensation or dependency and indemnity compensation based on an original claim, a claim reopened after final disallowance, or a claim for increase will be the date of receipt of the claim or the date entitlement arose, whichever is the later.” In fact, the adjudication manual M21-1MR, Part V, iii, 1, E 33n, specifically states, “Do not count income received before the effective date of an original or reopened award. (For death pension cases, do not count income received between the effective date and the date of the veteran’s death.) The effective date is the date a claimant is entitled to benefits without regard to 38 CFR 3.31.” You can use the latter citation when responding to VA requests regarding the prior year’s income when it occurred before the effective date.

When completing an application for VA benefits, ensure that you do three things:

Use the correct forms.
Complete the forms correctly.
Provide all of the necessary verification documents.

Members! Don't forget we have VA Tech Training this Thursday, June 18th at 3 EST. To join this call on what’s new and improved in the June release of the LWP-CCS software contact Amanda Ross at aross@lawyerswithpurpose.com.

If you aren't a member and want to learn more about joining the Lawyers With Purpose community, contact Molly Hall at mhall@lawyerswithpurpose.com

Sabrina A. Scott, VA Production Coordinator, Lawyers with Purpose, LLC and Paralegal, The Elder & Disability Law Firm of Victoria L. Collier, PC.

Victoria L. Collier, Veteran of the United States Air Force, 1989-1995 and United States Army Reserves, 2001-2004. Victoria is a Certified Elder Law Attorney through the National Elder Law Foundation; Author of “47 Secret Veterans' Benefits for Seniors”; Author of “Paying for Long Term Care: Financial Help for Wartime Veterans: The VA Aid & Attendance Benefit”; Founder of The Elder & Disability Law Firm of Victoria L. Collier, PC; and Co-Founder of Lawyers with Purpose.

Informing The VA You Plan To File A Claim

May 26, 2015

by Lawyers With Purpose with No Comment Estate Planning Drafting Software Legal Marketing Legal Technical VA

I don’t think anyone really expected a great announcement from the VA on March 25, 2015, with the end of the 60-day public comment period on the proposed VA rule, RIN 2900-AO73, regarding net worth, asset transfers, and income exclusions for needs-based benefits. However on that day the VA did announce several changes effective March 24, 2015 that directly impact all claims. One of these changes was the amendment of the adjudication manual M21-1MR to introduce a new intent to file procedure which replaces the informal claim process to lock in an effective date for an Improved Pension claim (with aid and attendance) prior to the filing of the Fully Developed Claim.

The VA web page http://explore.va.gov/intent-to-file, as well as the March 2015 Fact sheet issued by the VA, explain that there are currently three ways to declare an intent to file a claim:

Electronically via eBenefits.
Completing and mailing the paper VA Form 21-0966, Intent to File a Claim for Compensation and/or Pension, or Survivors Pension and/or DIC.
Over the phone to the VA National Call Center or in person at a VA regional office.

eBenefits is accessed from the VA website via this page https://www.ebenefits.va.gov/ebenefits/apply, However the link for filing pension claims currently generates an error. The content is blocked in both Internet Explorer and Mozilla Firefox web browsers as an untrusted connection.

If you prefer to continue using a paper form to lock in an effective date, you are now required to use the VA form 21-0966. What happens if you filed an informal claim on or after March 24, 2015? Pursuant to M21-1MR, Part III, Subpart ii, Chapter 2, Section D, 2b, “Consider a request for benefits not filed on an appropriate prescribed form on or after March 24, 2015 a request for application.” The VA will respond to a request for application by sending correspondence that instructs the claimant which forms are needed to formalize the claim. Nevertheless no effective date will be locked in until a complete intent to file or a completed application is submitted. There is no recourse if the VA rejects an informal claim filed on or after March 24, 2015 as the final rule of 38 CFR Parts 3, 19, and 20 RIN 2900–AO81 “also eliminate the provisions of 38 CFR 3.157 which allowed various documents other than claims forms to constitute claims.”

The option of declaring an intent to file by telephone or in person at the VA regional office has the disadvantage of lack of documentation. Furthermore the average waiting time for calls to the VA National Call Center to be answered is over an hour and, thus, would not be an efficient use of your time to use this option. Thus for now if your firm chooses to lock in an effective date prior to the filing of the fully developed claim, you must use the second of the three options listed above. Our firm has changed our process to start using the form 21-0996 with all future VA claims. The new form will also be included in a future update of the Lawyers With Purpose software.

The easiest way to receive important notices directly from the VA is to subscribe to the email delivery of VA News Releases at https://public.govdelivery.com/accounts/USVA/subscriber/new or visit their website at www.va.gov.

There is still time to grab a seat for our 3.5 day Practice With Purpose Program in St. Louis next week! We'll be talking about Asset Protection, Medicaid and the following on VA Benefits planning:

Service Connected Benefits (Veterans & Widows/Dependents)
Non-Service Connected Benefits – Improved Pension, Housebound, Aid & Attendance
Asset Eligibility
Application Process
Correct Forms
Annual Reviews
Appeals Process
Representation and Marketing – Getting Veterans to March in Your Door

Click here to register and grab one of the few spots remaining.

By Sabrina A. Scott, Paralegal, The Elder & Disability Law Firm of Victoria L. Collier, PC and Production Coordinator for Lawyers for Wartime Veterans, LLC.

Victoria L. Collier, Veteran of the United States Air Force, 1989-1995 and United States Army Reserves, 2001-2004. Victoria is a Certified Elder Law Attorney through the National Elder Law Foundation, Author of 47 Secret Veterans Benefits for Seniors, Author of Paying for Long Term Care: Financial Help for Wartime Veterans: The VA Aid & Attendance Benefit, Founder of The Elder & Disability Law Firm of Victoria L. Collier, PC, Co-Founder of Lawyers for Wartime Veterans, Co-Founder of Veterans Advocate Group of America.

Bigstock-Black-Bomb-With-A-Burning-Fuse-49289681

Avoiding The Five Major Threats To IRA’s: Part 5

May 25, 2015

by David Zumpano with No Comment Asset Protection Estate Planning Drafting Software Legal Technical

Today I will conclude our five part series on the five threats to qualified accounts. In our first four blogs we outlined the threats to IRA’s from income taxes, excise taxes, long-term care costs, and estate taxes. Today we will focus on the final threat, the risk of loss to beneficiaries and/or their creditors. The U.S. Supreme Court in June 2014 in Clark v. Rameker held an inherited IRA is not a “retirement account” for purposes of the protection under the Bankruptcy Code. This threw the financial and estate planning industry into turmoil, but those of us who stayed abreast of the legal arguments, were not surprised by the courts decision had planned that way for many years. A second and often overlooked threat is by the beneficiary themselves. Not all beneficiaries are equipped to receive assets and properly manage or protect them. So let’s look at these dangers more closely.

As outlined in our first part of this series, qualified funds are inherently protected under ERISA and the Bankruptcy Act. The challenge however, is the U.S. Supreme Court now has ruled inherited IRAs (the IRA after the death of the owner) is not protected. This is a major threat to qualified accounts. The most strategic way to protect against this threat is to ensure an individual's IRAs is beneficiary designated to a "see through” asset protection trust. For a trust to be qualified as a designated beneficiary under the Internal Revenue Regulations it requires it is irrevocable at death, it is valid under state law, the beneficiaries are "identifiable" and a copy of the trust is provided to the plan administrator. Once these four conditions are met the IRS will look “through” the trust at the beneficiaries of the trust to determine the designated beneficiary to determine the required minimum distributions. This can be an exceptional planning tool to protect the qualified account from the reach of the creditors, divorce, lawsuits, nursing homes, or other predators of the beneficiary, who now owns the IRA. For a complete review of using a trust as a beneficiary of an IRA and all its benefits register for our FREE Clark v. Rameker Webinar.

The second major risk to qualified accounts is that while we can protect the IRAs from the predators and creditors of the beneficiary, we cannot protect it from the beneficiary them self. How often do professionals get the call from the child, that inherited an IRA who says, “I need $70,000.00 out of my inherited IRA”, then the advisor discovers it is to buy a $50,000.00 car ($20,000.00 needed for income taxes) that's worth $40,000.00 when it’s driven off the lot. For individuals who are concerned about spendthrifts as beneficiaries, qualified accounts can be protected from abuse by the beneficiary themselves by creating an accumulation trust as beneficiary. An accumulation trust allows the trustee to hold the IRA required distributions made from the IRA in the trust and are not required to be distributed out to the beneficiary. This would typically be done if there's a risk of the distribution being lost to the beneficiary’s creditors or predators. The principal argument against accumulation trusts is that the income not distributed is taxed at the higher trust tax rate. True, but the question becomes would you rather pay the highest trust income tax rate of thirty nine point six percent or give it to a beneficiary who is subject to a judgment in which case the beneficiary would receive zero. In addition, to avoid the higher income tax, the distributions would be made to other beneficiaries named in the trust. So planning to protect an IRA from your beneficiaries and for your beneficiaries is not difficult, but does require planning during the life of the IRA owner to ensure the beneficiary does receive the qualified account outright but through the form of a trust which sets all the protections the client desires.

Join Lawyers With Purpose in St. Louis next week for 3.5 days of jam packed technical legal essentials necessary for any estate or elder law practicing attorney. We still have a few spots left – click here and register today.

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center

Avoiding The Five Major Threats To IRA’s: Part 2

May 20, 2015

by David Zumpano with No Comment Asset Protection Estate Planning Drafting Software Legal Technical

In this series I am discussing the five major threats to qualified assets, today is Part 2 of the five-part series (you can read Part 1 here). The five major threats to qualified funds include income taxes (covered previously), excise taxes (which we will cover today), long term care costs, estate tax and risks to beneficiaries and/or their creditors. A major threat to IRAs and other qualified assets is the unexpected payment of excise taxes. Excise taxes are in addition are ordinary income taxes and are imposed when a client takes their money too soon, or waits too long to withdraw it. Let's address each one.

There is a ten percent excise tax otherwise known as the "early withdrawal penalty" if an individual removes assets from their IRA prior to age fifty nine and a half. The government has done this because it has a strong interest to ensure individuals save for retirement so they are secure and less of a risk to be a burden on society to support them. The government in recent years however has permitted certain exceptions to allow withdrawals from IRAs before fifty nine and a half for the purchase of a home or to pay medical expenses. Both of these exceptions have limitations but when properly followed, avoid the extra ten percent excise tax.

Another long standing rule that avoids the excise tax, is what is commonly referred to as the 72(t) election. An IRA owner may withdraw prior to age fifty nine and a half without the excise tax if they agree to take an equal stream of payments over a period of time that is the greater of five years or when the IRA owner turns fifty nine and a half. For example if a 72(t) election is made to withdraw $300.00 a month from an IRA at age fifty, to avoid the excise tax, the recipient must agree to accept that monthly payment for nine and a half years. Alternatively, if an individual at the age of fifty seven elects to take a regular stream of payments, they must take it for a minimum of five years which would require them to continue the distributions until age sixty two.

A second excise tax which is much more costly is the fifty percent excise tax if an individual fails to take the minimum distribution required under the tax law. This is commonly referred to as the "late payment penalty". The government has preferential treatment for IRAs so that people can save for retirement, but wants to ensure that they actually utilize the funds in retirement, and not just use it as a tax avoidance tool. The tax law requires IRAs to begin being distributed once an individual turns seventy and a half years old. If the individual fails to take the required minimum distribution calculated based on their age and life expectancy, they are imposed to a fifty percent excise tax in addition to the ordinary income tax rate on the undistributed required minimum distribution.

Assuming a required minimum distribution was $1000.00 and an individual is in the twenty percent income tax bracket, the individual will lose seventy percent or $700.00 if the required distribution is not made timely. That is simply calculated as a $1000.00 distribution with a payment of $200.00 in income tax and $500.00 in excise tax. Obviously this is a major threat to IRAs but easy to avoid with proper management of accounts. Don't let excise taxes threaten your IRAs, ensure you leave the assets in until reaching age fifty nine and a half and begin taking the required minimum distribution when you turn seventy and a half.

Stay tuned for Parts 3-5. And, if you're interested in learning more on Protecting IRA's After Clark v. Rameker join our FREE webinar this Friday at 1 Eastern.

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center

Avoiding The Five Major Threats To IRA’s: Part 1

May 19, 2015

by David Zumpano with No Comment Asset Protection Estate Planning Drafting Software Legal Technical

IRA’s and other qualified accounts are becoming the biggest portion of many individuals' portfolios. They have many special rules to maintain their income tax advantages and despite having special rules that protect them for income tax there are several threats to them that are often overlooked by individuals and the professionals that serve them. This will be the first of a five-part series sharing the five major threats to IRA’s and other qualified accounts and how to avoid them. So what are the five major threats to retirement plans? In my experience it is: income taxes, excise taxes, long term care costs, estate taxes, and risks to beneficiaries and/or their creditors.

The first risk to IRAs, and other qualified assets, is income taxes. Many of us are aware contributions made to a qualified plan defers the income tax on the money contributed. In addition, contributions accumulate "tax free". The challenge and threat however is not upon the contribution to the plan, but the withdrawal. The presumption is the individual will withdraw the money at retirement when they are in a lower income tax bracket. That is not always true. There is a risk the individual can have a higher tax bracket after death, or that income tax rates will rise (Congress has raised rates many times in the past). Higher income tax rates later are not only caused by Congress and by the asset mix of the client, but quite often the income tax rate of the beneficiary is higher than that of the original plan owner. For example a client in retirement might be taxed at the fifteen percent tax bracket but they pass away and leave it to their children, who may be in the thirty nine and a half percent tax bracket. This is often overlooked.

The biggest threat I find however, is that many individuals who own IRAs and retirement funds, only withdraw the required minimum distribution rather than optimizing the minimum income tax overall . In many circumstances, seniors pay no income tax or only pay ten or fifteen percent. A married couple over the age sixty five can earn up to $21,850.00 (not including social security) without paying any tax and up o $40,300.00 before they are subject to taxes beyond fifteen percent. But seniors routinely take the required minimum distribution rather than taking more distributions to withdraw the most possible while keeping them in the fifteen percent tax bracket or less. The biggest advantage is the after tax money (which only between zero and fifteen percent was paid) reinvested grows and is subject to capital gains rates which is lower than ordinary income tax on an IRA if ever sold during life, and if held till after death gets “stepped up” and no income tax is paid on the growth of the assets by the kids that inherit them, If the kids hold onto them all growth is subject to capital gains rates rather than the higher ordinary income tax rates. So the alert to all is don't be on autopilot, examine your short and long term income tax rates compared to your beneficiaries, to properly decide when to take advantage of strategic distributions during life to ensure you pay the overall lowest income tax on your IRA’s.

Stay turned for Parts 2-5 and subscribe to our blog if you're not already (just enter your name and email on the box to the left). If you would like to learn more about protecting IRA's after Clark v. Rameker join our FREE WEBINAR this Friday at 1 EST. Click here to register.

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center

Bigstock-Red-Wall-Clock-Illustration-At-1448960

Today at 5 p.m.

May 15, 2015

by Lawyers With Purpose with No Comment Legal Marketing Legal Technical

Real quick, I want to make sure you know the DOORS ARE CLOSING at 5 p.m. sharp today on registrations for the Tri-Annual Practice Enhancement Retreat, which happens the week of June 1 in St. Louis.

If you are remotely considering making the event happen, you MUST reserve your seat (and hotel) today. The hotel has extended our room block TWICE, and there are only a few rooms left before the entire hotel is SOLD OUT. We honestly will not be able to work our magic after 5 p.m. TODAY.

To recap what the “Retreat Week” has in store:

A boot camp on Medicaid, asset protection, VA and all things estate and elder law
Speakers school (the first in three years and not slated to be held again until 2017)
Creating your Money Plan law firm retreat
Nine different 90-minute focus sessions on legal technical, marketing, law firm operations, team training, trust drafting, cloud-based CRM workflow systems and MORE!
A personal and professional development day led by Dave Zumpano

Just to name a few items.

Don’t fool yourself and say (possibly yet again), “I can’t afford (time, money or both) this one, but I definitely will get to the next one.” In my experience, when the timing couldn’t be worse, that is the very reason why you need to be in the room. Maybe your business is booming and you’re drowning and you don’t know when that will stop, or maybe a team member just quit, or possibly you have a team member you’re on the verge of firing, or cash flow is down, etc., etc., etc.

“Reasons are the cemetery of your dreams.” Reasons that emerge from any rendition of the above are the very reason why you need to be in the room.

This WILL be our last invite. No more reminders or captivating blog posts tempting you to take the leap of faith and say, “It’s now or never.”

To reserve one of the last seats, just click here.

Can’t wait to see your name on the “A List.”

In your corner,

Molly

Knowing, Respecting, Honoring Veterans

May 7, 2015

by Lawyers With Purpose with No Comment Estate Planning Drafting Software Legal Technical VA

As the government benefits supervisor and paralegal for The Elder & Disability Law Firm of Victoria L. Collier, I work with both Medicaid applications and VA claims. However, VA cases dominate and easily outweigh Medicaid files in our outstanding caseload by a ratio of 4:1.

This may be due to Victoria’s being a wartime Veteran herself, her national recognition as the nation’s expert lawyer for VA Improved Pension with Aid and Attendance, or it may have to do with the length of time it takes to prosecute a VA claim until resolution. Regardless of the reason, I spend a great deal of time communicating with Veterans and their families and getting to know their personal history.

I often pore over military records for information – some of these so fragile that I fear making photocopies of them. Some Veterans keep meticulous records of their service and every administrative detail of their time in the military is recorded in documents that surely no one has looked at in years. Others have barely any record of their tour of duty at all and we must file a request for a copy of their discharge paperwork.

As I began to prepare for a trip to D.C recently, I automatically planned a trip to the National Mall, in particular the National World War II Memorial, Vietnam Veterans Memorial and the Korean War Veterans Memorial. I am a first-generation American of Argentine-born parents, neither of whom served in the American Armed Forces. My father did serve conscripted service in his home country and was told by his superiors that he was the worst soldier in the history of the Argentine army. However no one else in my immediate family has served. Then why is it so important to me that I visit these memorials on my trip?

It is important to me because of the Veterans that I have come to know and respect through my work. And by visiting these memorials, I can in some small way honor their service and that of their fallen comrades. But then I also remember sitting on bleachers on just about the hottest and most humid August day on Parris Island watching my nephew become a United States Marine and I have a son who may yet live to serve in our Armed Forces. Even to the contact that I have had with the many, many Veterans currently working at the Department of Veterans Affairs and who must routinely thank callers for the Veteran’s service. I must in turn thank them for their service in whatever way I can.

If you want to learn more about Veteran Benefits Planning, Asset Protection or Medicaid Planning, join us for the Estate Planning Industries Only Practice Enhancement Week in St. Louis, June 1st – 5th. There are still a few seats left so grab them before they're gone. Doors close in one week and we always sell out. If you're even thinking about showing up, click here to register now before seats are gone.

By Sabrina A. Scott, Paralegal, The Elder & Disability Law Firm of Victoria L. Collier, PC and Production Coordinator for Lawyers for Wartime Veterans, LLC.