WEBINAR: Turning a Death Benefit Into a Life Care Benefit

October 13, 2015

by Lawyers With Purpose with 2 Comments Asset Protection

Too often seniors who own life insurance policies will surrender them or allow them to lapse without realizing they can access a higher conversion value that can be used to pay for long-term care supports and services. Many policy owners who are getting ready for long-term care face tough choices about their policy – can they afford to continue paying premiums, and how will the policy affect Medicaid eligibility? Many are forced to abandon their policies despite having made premium payments for years.

But there is a better option for a life insurance policy – converting it into a Long Term Care Benefit Plan. More and more elder law attorneys are coming to realize this is a viable option for clients in search of funding options for senior care. Instead of abandoning a policy they have been making payments on for years, they are selling the policy into a tax-free benefit** account that is both Medicaid and VA Aid & Attendance qualified.

The range policy owners can receive is 20%-60% of the death benefit, and their money goes into an irrevocable, FDIC-insured account that makes monthly payments directly to any form of senior care they choose. If their needs change, the account can be adjusted to pay for escalating costs and/or changing care providers and environments.

Any form of life insurance policy is eligible to be converted, including term, whole, group and universal life policies. To qualify, the policy must have a minimum death benefit of $50,000 and the insured must have an immediate need for care (typically within 90 days or less from time of enrollment). Think of a Long Term Care Benefit Plan as the opposite of long-term care insurance. To buy long-term care insurance, you must be young and healthy. To convert a life insurance policy into a Long Term Care Benefit Plan, you must have an immediate need for care (the older and sicker you are, the higher percentage amount you will get for the policy) and the in-force policy can't be less than $50,000 of death benefit.

As an alternative to abandoning a policy for little to nothing in return, converting a life policy into a Long Term Care Benefit Plan provides the highest possible value in the form of a protected account that is tax-advantaged as well as Medicaid and VA qualified.

Please join Victoria L. Collier, along with Chris Orestis of Life Care Funding on Thursday, October 15th at 3:00 EST to learn more about this option for clients in search of funding options for senior care. Click here to register now for this FREE WEBINAR.

** Please note that the actual tax treatment of the proceeds from the sale of a life insurance policy will depend on many factors, including but not limited to who owns the policy, the health of the insured, the use of proceeds, the size of the estate and the state in which the policy owner lives (for purposes of state taxation). This material does not constitute tax, legal or accounting advice, and neither Life Care Funding, LLC nor any of its agent, employees, or representatives are in the business of offering such advice. The information above cannot be used by any taxpayer for the purpose of avoiding any IRS penalty. Anyone interested in selling a life insurance policy in order to fund Long Term Care Benefits should seek professional advice based on his or her particular circumstances from an independent tax advisor.

Roslyn Drotar – Lawyers With Purpose

The VA Fiduciary Process

October 9, 2015

by Lawyers With Purpose with 2 Comments Estate Planning Drafting Software Systems & Processes VA

What is the VA Fiduciary Process?

The veterans benefits fiduciary process occurs when the Department of Veterans Affairs (VA) has approved a claim but has proposed a finding of incompetency of the claimant. This means that the VA believes the claimant does not have the mental ability to manage receipt of VA funds. To help the claimant with his or her VA benefit, a fiduciary needs to be appointed. The term “fiduciary process” is used to describe what happens from the time the VA approves a claim with a proposed finding of incompetency through the time the VA appoints a fiduciary and releases any withheld retroactive benefits. This process can take from three months to over a year to complete.

When can you expect to encounter the VA Fiduciary Process?

You will generally know from the first meeting with a client or client’s family members whether to expect a proposed finding of incompetency that would require that a fiduciary be appointed. At that meeting, you should note for the file the client’s medical condition, especially as it relates to competency. Another alert is the way that the doctor completes the physician statement (VA form 21-2680). If a claimant has a diagnosis of dementia, and/or if the physician indicates on the statement that the claimant does not have the ability to manage his or her own financial affairs, you can expect a proposal of incompetency by the VA.

What should you do when filing the original claim?

If you expect a proposal of incompetency, include a VA form 21-4138, Statement in Support of Claim, regarding the fiduciary process with the fully developed claim. Your statement should acknowledge evidence of incompetency, waive the right to carry a gun under the Brady Handgun Bill, waive the right to a hearing, and include the name, relationship, and contact information for the person who will be nominated as fiduciary (usually a competent spouse or other family member). The purpose of the proposal of the finding of incompetency is to give the claimant a 60-day due process period to object to this proposal. In submitting VA form 21-4138 acknowledging evidence of incompetency, the goal is to expedite the process by waiving the due process period.

What about after a claim is approved?

After filing the formal claim, you will not hear anything about the proposal of incompetency or the fiduciary process until the approval letter arrives. This letter may state that retroactive benefits are being withheld because a finding of incompetency has been proposed. However, the claimant may also receive a separate fiduciary letter regarding their legal rights during the fiduciary process. The VA will start to pay the monthly awarded benefit shortly after the date of the award letter, but any money owed back to the effective date of the claim will be withheld until a fiduciary has been appointed. Even though you may have already submitted a waiver of this waiting period with the formal claim (on the aforementioned 21-4138, Statement in Support of Claim), you should respond again by re-sending the VA form 21-4138 regarding the fiduciary process. This time, file the statement with the Pension Management Center as well as mail it directly to the appropriate fiduciary hub (the VA department that administrates the fiduciary program).

The law firm generally does not get copied on any correspondence from the fiduciary hub, even when the lawyer is acting as the VA representative. The attorney is kept in the loop for the purpose of the claim adjudication process, but once there is an approval with a proposed finding of incompetency, the fiduciary hub deals directly with the nominated fiduciary. Thus, the representative must rely on the claimant or proposed fiduciary to get information and updates. However, you can call the fiduciary hub as long as you are the VA-recognized authorized representative at (888) 407-0144 for a status update.

Then what?

Then it is a waiting game until a fiduciary hub field examiner contacts the nominated fiduciary to schedule an in-person interview. You should instruct the client to contact you when they have scheduled this interview so you can then provide further guidance as to what they should say or not say during the interview. The nominated fiduciary should expect to provide references, a credit check and possibly a surety bond if the retroactive benefit is large. After the interview has taken place, the fiduciary hub will send a letter appointing the fiduciary. The last action the firm takes is to follow up with the fiduciary to confirm that the withheld benefits are deposited and that the lump sum deposit is correct.

If you're a Lawyers With Purpose, for further information regarding the fiduciary process, especially recommendations regarding the interview and the yearly accounting, log into the members section of the website and take a look at the webinar “VA Tech School – Fiduciary Process”. The Lawyers with Purpose software and systems have an automatic workflow to assist members with this part of the VA application process.

Did you know we are hosting a FREE webinar on October 15th at 5 EST on the VA Proposed Rule Changes. Attend this webinar presented by Victoria L. Collier, CELA, the nation’s expert on VA Pension Benefits and Lawyers With Purpose to discuss these sweeping changes to the laws. At the webinar you will learn the details of the proposed changes, how to advise your clients between now and when the law changes, when we can expect the laws to change and how you can influence a more positive change. Click here to register now.

By Sabrina A. Scott, Paralegal, The Elder & Disability Law Firm of Victoria L. Collier, PC, and Director of VA Services 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.

Congratulations To Richard Winblad, LWP Member Of The Month

October 9, 2015

by Lawyers With Purpose with No Comment Uncategorized

What is the greatest success you’ve had since joining LWP?

The greatest success that I’ve had since joining LWP was the ability to counsel and find a solution for a Veteran and his family. They came to my office with a huge unmanageable memory care expense. Using the training enabled me to identify the availability of the Aid and Assistance Pension. We found answers for what appeared to be a hopeless situation.

What is your favorite LWP tool?

The software simplifies trust package creation. The data prompts are well thought out and designed to prevent drafting mistakes. However, I find that the systems are the best tools. The RMS systems, videos and materials are outstanding.

How has being part of LWP impacted your team and your practice?

My team is getting excited about the materials and watching training videos. They will get a first-hand experience at the upcoming retreat. Personally, the LWP training has given me the ability to help those facing uncertainty find solutions. Not only is this a confidence booster but it also motivates me to find more people to help.

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Understanding Grantor Trusts

October 7, 2015

by David Zumpano with No Comment Estate Planning Drafting Software

Many lawyers are perplexed when utilizing grantor trusts in estate, asset protection and benefit planning. It is easy to become confused when comparing grantor trusts with pure grantor trusts. Let's review these issues systematically.

The Internal Revenue Code provides that if a trust triggers any of the provisions identified in Sections 671 through 679 of the Internal Revenue Code, all income from that trust will be taxed to the grantor regardless of who receives it. The most typical provisions in a trust that trigger grantor trust status are if the grantor retains an interest in the income or principal from the trust, the power to control who gets the income or principal, the power to revoke the trust, or the right to borrow money from the trust without adequate interest or security. Grantor trust status also occurs if the grantor has the right to pay premiums on life insurance on the grantor. Interestingly, triggering a "grantor trust" status does not necessarily trigger the principal of the trust to be included in the estate of the grantor at death. It's merely an income tax impact.

To determine if assets in a trust are included in the grantor's estate at death for estate tax purposes, one must look to the provisions of Sections 2035 through 2042 of the Internal Revenue Code to determine whether estate tax inclusions are triggered. Inclusions are typically caused by provisions that allow the grantor the right to possess or enjoy the property of the trust or receive the income or principal of the property from the trust, or to be able to designate who will.

Other provisions include maintaining a revisionary interest to the grantor in excess of 5 percent, or permitting the grantor to have any other interest in the trust at death. While some of the grantor trust provisions can also trigger estate tax inclusion, one can often craft a trust to ensure that the principal of the trust is not included in the estate of the grantor, but the income tax is. This strategy of “Grantor Trust” status allows additional gifts by the grantors that are not subject to the annual gift tax exclusion. Restated, the additional income tax being paid by the grantor is money that would otherwise have been paid by the trust to beneficiaries who received the proceeds. Having the income taxes come out of the grantor's assets, and not the trust principal, permits the additional accumulation of funds for the beneficiaries without any gift tax consequence for the grantor. Most typically, irrevocable life insurance trusts are grantor trusts for income tax purposes, but are not included in the estate of the grantor at death.

So then, what is a Pure Grantor Trust? That is a term of art to describe a trust that taxes the grantor on the income (grantor trust) and ensures that the assets of the trust are included in the estate of the grantor. A Pure Grantor Trust is both a grantor trust for income tax purposes and is included in the estate of the grantor at death. Fifteen years ago, many would consider such a trust as malpractice, but since the change in the estate tax laws in 2001, this has become the preferred plan of 99.8 percent of Americans.

Why?

Because they are not subject to federal estate taxes, and including the assets of the grantor in their estate provides for a "step up" in tax basis after death. This ensures that their heirs inherit the property at the fair market value determined at the grantor's date of death, rather than carry-over tax basis, in which the heirs inherit the property at the cost the grantor paid for it. Unfortunately, many lawyers are still stuck in the pre‑2001 mindset and restrict clients to plans based on the estate tax avoidance rules. The key now is understanding when to use each type of trust.

Typically individuals with more than $5,430,000 or couples with more than $10,860,000 are concerned with the estate tax and would be more likely to use the traditional irrevocable trust that avoids estate tax inclusion in the grantor's estate at death. Individuals with less than $5,430,000 are better served using the Irrevocable Pure Grantor Trust™ (iPug®) to achieve asset protection from creditors, predators, and long-term care costs, and to ensure they remain eligible for needs-based benefits such as Medicaid.

Distinguishing the different trusts and their uses comes down to identifying the need of the individual client. Obviously, revocable trusts are pure grantor trusts and have all income taxed to the grantor, and all of the principal is included in the estate of the grantor. Revocable trusts are traditionally used to provide for the proper distribution and management of assets during the life or after the death of the grantor. Alternatively, if an individual has a taxable estate under federal or state law, then a non‑grantor trust is typically the trust of choice to ensure that the principal of the trust is not included in the grantor's estate. Whether the income is taxed to the grantor or not is also client goal specific. Notwithstanding, in most cases practitioners will choose to make irrevocable trusts grantor trusts to take advantage of the additional reduction in the grantor's estate and to benefit the beneficiaries by having income tax paid by the grantor.

Individuals who are not subject to estate tax and who are concerned about asset protection are better served with the iPug Trust, which allows them to be the trustee and maintain full control of the trust assets, and even allows them to retain benefits from them to the extent they are willing to risk them. For example, an income-only iPug Trust will allow the grantor rights to all of the income, which also makes the income available to the grantor's creditors and predators. These trusts have become the trusts of choice when doing Medicaid benefits planning, because they are compliant with federal and state Medicaid laws so as to ensure that the assets in the trust are not considered an available resource in determining the Medicaid eligibility of the grantor.

Finally, when planning for veteran's benefits, particularly Aid and Attendance Pension Benefits, the traditional Irrevocable Non-Grantor Trust is the trust of choice that provides the grantor is not deemed to be the owner for income tax purposes, and it is not included in the grantor's estate at death. While often these individuals are not concerned about estate taxes, the current policy of the Veterans Administration is that if any trust created by the applicant provides any benefits to the grantor, all assets in the trust are deemed available to the grantor in determining eligibility for Aid and Attendance Benefits. Therefore, when doing veteran benefits planning, the same trust is used as if doing advanced estate tax planning.

So which is the best trust for your client? All of them depend upon your client's needs. It is your responsibility to ensure how to draft the trusts in regards to the provisions of IRA Sections 671 to 679 and 2036 to 2042 and the resulting impact of Non-Grantor Trusts starters, Grantor Trust starters, or Pure Grantor Trusts starters. That's why the Lawyers with Purpose client-centered trust software system is your answer to keep it all straight, because it warns you if you choose inconsistent options that may trigger different results based on the client's intentions. Don't go it alone, let Lawyers with Purpose show you how.

If you want to know more about our estate planning drafting software, schedule a free live demo by clicking here and discover the most powerful, flexible and easy to use software that will help your grow your practice.

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

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Who Has Your Back?

October 6, 2015

by Lawyers With Purpose with No Comment Systems & Processes

I was sitting in a hotel room in Florida at 11:24 in the morning when my cousin called. My aunt was in the hospital after having a stroke and learning she has a brain tumor. It was Saturday and the hospital wanted to discharge her to a rehabilitation facility on Monday. Like many of our clients, my aunt had completed a will in the 1980s but did not have a financial power of attorney or health care directive. Knowing that I am an elder care attorney, my cousin reached out to me for help.

We spent almost an hour on the phone outlining priority actions. Although I could educate my cousin and tell her what needs to be done, I could not personally help because I don’t know the laws in Texas, where I am from and where my aunt lives. Fortunately, I do know people.

Immediately I reached out to my friend and colleague, Sandra Ard, from Ard Law Firm, PLLC, www.ArdLawFirm.com, in Dickinson, Texas. After returning home from getting her nails done, Sandy spent the rest of her Saturday afternoon preparing legal documents and driving to Galveston to meet my aunt at the hospital to execute them. Sandy could have said, “Call me on Monday.” But she didn’t.

I would not expect any lawyer, even a friend, to take such remarkable measures for a client. I did not expect Sandy to do so just because it was my family member who needed help, but I was hopeful.

I was right to be, for one simple reason: Ard Law Firm is a member of Lawyers with Purpose. Sandy is the epitome of what a Lawyer with Purpose is and shows exactly what members in our community do for each other. Sandy has my back!

Without Lawyers with Purpose, I would not know Sandy Ard. Without Sandy Ard, I would not have been able to help my cousin and aunt so quickly. Although many organizations offer similar software and training, Lawyers with Purpose has a community that cannot be compared or copied.

Want to experience this for yourself?

I may be able to get you in the door for the Practice Enhancement Retreat, Wednesday, October 21st – Friday, October 23rd. Email me at vcollier@lawyerswithpurpose.com if you’re at all interested – I'll have your back – but do so quickly!

Victoria L. Collier, Co-Founder, Lawyers with Purpose, LLC, www.LawyersWithPurpose.com; Certified Elder Law Attorney through the National Elder Law Foundation; Fellow of the National Academy of Elder Law Attorneys; Founder and Managing Attorney of The Elder & Disability Law Firm of Victoria L. Collier, PC, www.ElderLawGeorgia.com; Co-Founder of Veterans Advocates Group of America; Entrepreneur; Author; and nationally renowned Presenter.

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When Clients Die: VA Accrued Benefits Claims

October 2, 2015

by Lawyers With Purpose with No Comment Legal Technical VA

It happens more often than one would like – claimants dying before the VA approves their claim. What do you do when this occurs? Is there anything you can do to preserve the benefit your firm worked so hard to obtain for the client, or does the claim die with the claimant?

The answer depends on two factors: 1), whether the claimant has a surviving spouse; and 2), how far along in the process the VA claim was on the date of death.

It matters if the claimant has a surviving spouse or other dependent, because that individual may be able to take over a pending claim as a substitute claimant. Section 5121A, (a)(1) of Title 38 of the U.S. Code regarding Substitution in Case of Death of Claimant states, “If a claimant dies while a claim for any benefit under a law administered by the Secretary, or an appeal of a decision with respect to such a claim, is pending, a living person who would be eligible to receive accrued benefits due to the claimant under section 5121 (a) of this title may, not later than one year after the date of the death of such claimant, file a request to be substituted as the claimant for the purposes of processing the claim to completion.” In the case of the death of a veteran, the living persons who would be eligible to receive accrued benefits would be, in this order:

The veteran’s spouse;
The veteran’s children (in equal shares);
The veteran’s dependent parents (in equal shares).

In the case of the death of a surviving spouse or remarried surviving spouse, the benefits would be payable to the children of the deceased veteran, and in the case of the death of a child, they would go to the surviving children of the veteran who are entitled to death compensation, dependency and indemnity compensation, or death pension. This type of substitution is requested by filing a VA form 21-0847 Request for Substitution of Claimant upon Death of Claimant. This form must also be accompanied by the actual application for accrued benefits. There are two VA forms that are used to apply for accrued benefits: the VA form 21-534EZ and the 21-601. The VA form 21-534EZ has multiple uses, one of which is applying for accrued benefits for the surviving spouse or other dependent of a deceased claimant.

The VA form 21-601 is solely for applying for accrued benefits, as its name “Application for Accrued Amounts due to a Deceased Beneficiary” makes clear, but it is intended for those who are not a surviving dependent of a deceased veteran or other claimant. The prerequisite for this type of claim is that the person seeking accrued benefits must have paid or owe for the claimant’s last illness and burial expenses out of their own pocket. As described in the VA Fact Sheet on “Accrued Benefits and Substitution,” “If there are no living persons who are entitled to accrued benefits on the basis of relationship, VA will pay accrued benefits to reimburse the person(s) who paid for or who are responsible to pay for the Veteran’s last illness and burial expenses. . . . The amount of accrued benefits payable as reimbursement is limited to the actual amount of expenses paid, and the amount of accrued benefits available.”

It matters also at what point in the process the VA claim was on the date of death, because that can determine whether, in fact, accrued benefits even exist. Per page 5 of the directions for VA form 21-534EZ, accrued benefits are benefits that “were due the veteran based on existing ratings, decisions, or evidence in VA's possession at the time of death, but the benefits were not paid before the veteran's death.” It may seem obvious, but if nothing has been filed with the VA, there is no such evidence and thus there are no potential accrued benefits. This is another very important reason why you should file a claim as soon as a client qualifies.

This would also seem to suggest that if only an Intent to File/Informal Claim has been filed, accrued benefits might not be payable. Fortunately, this should not affect the surviving dependent of a veteran as long as they are eligible in their own right for VA death pension and file within a year of the death of the veteran. The VA should grant accrued benefits as well as award death pension back to the month of the veteran’s death, regardless of what was on file with the VA at the time of death. For an unrelated third party, it is unclear whether the VA will consider a VA form 21-601 after the filing of an Intent to File/Informal Claim, but before the filing of the formal claim. However, be sure to supply the VA form 21-527EZ with any accrued benefits claim if that form was never filed with the VA.

If a client dies after the formal claim has been filed, but before the receipt of funds in the claimant’s account, an accrued benefits claim can be submitted even if the VA has not started processing the claim. As long as the information on file with the VA supports the deceased claimant’s eligibility, benefits retroactive to the original effective date could be claimed. Again, the identity of the survivor will determine what form is used: the 21-534EZ for a surviving dependent of the claimant, or the 21-601 for all others, including unrelated third parties.

Given that there is no way to control if and when your client dies, how do you prepare your firm as well as your client’s family to deal with such unfortunate circumstances? The best way is to arm yourself with the knowledge of the options at every stage in the VA claim process when a claimant dies. Also, remind your clients at every stage to keep you informed of any decline in the claimant’s health. That way, when your firm gets that phone call or email with the bad news of a client’s death, you will be ready to guide your client’s family in the right direction to preserve the benefit that that client did not live to receive.

Did you know we offer FREE "VA Tech School" the first Wednesday of every month! Join us Wednesday, October 7th at 12 EST where Victoria L. Collier will be talking about "Denied Benefits Due to Transfers of Assets: How to Appeal and Win." Click here to register.

By Sabrina A. Scott, Paralegal, The Elder & Disability Law Firm of Victoria L. Collier, PC and Director of VA Services 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; Co-Founder of Lawyers with Purpose; and Co-Founder of Veterans Advocate Group of America.

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Focus on Forms: Third Party VA Forms – the 21-22a and 21-0845

September 29, 2015

by Lawyers With Purpose with 5 Comments Estate Planning Drafting Software Legal Technical VA

This post is an installment in the Focus on Forms series, which considers and discusses some of the most common forms associated with Department of Veterans Affairs (VA) pension claims. The goal of this post – like all those in the Focus on Forms series – is threefold: to define the purpose of the forms; to discuss how they should be completed; and to recommend what to file with these forms. Today’s subject is the forms related to third parties that may be involved in a pension claim, specifically, the 21-22a and the 21-0845.

Purpose of the 21-22A and the 21-0845

The VA forms 21-22a and 21-0845 are used to establish representation of a claimant by a third party and authorize the release of information to a third party, respectively. The VA does not recognize Powers of Attorney and will only speak or release information to a claimant unless a third party has been recognized by the VA as the claimant's authorized representative or recipient of personal information. The only other person who would be able to communicate or obtain information from the VA regarding a claimant would be the person appointed as fiduciary after an award has been adjudicated and when a claimant has been deemed incompetent. These forms do not have any impact on the processing of the VA claim other than to identify to whom the VA can disclose information. If there is no third party representing the claimant, these forms do not need to be submitted to the VA.

Form 21-22a is entitled, “Appointment of Individual as Claimant’s Representative” and is to be used by accredited attorneys, accredited agents, private individuals, or service organization representatives who want to be recognized in the “preparation, presentation, and prosecution of claims for VA benefits for a particular claimant.” It is a two-page form with instructions embedded in the fields. The individual named on this form should be copied on all correspondence issued by the VA regarding the claimant.

Form 21-0845 is the Authorization to Disclose Personal Information to a Third Party and was recently updated by the VA. The current version is dated May 2015 on the lower left corner of the form. The new version is available in the latest release of the Lawyers with Purpose VA software. It consists of a single page with an introductory first page of general information and specific instructions. It is used to identify non-accredited third parties that can be given information about the claim, but it does not imply that these parties in any way “represent” the claimant. For example, a child, home health care company or assisted living facility may be listed as having authority to obtain information. Note that forms 21-0845 signed by VA beneficiaries who have been deemed incompetent will not be accepted. Therefore, it is best practices to have the claimant sign this form before submitting a claim for benefits, which is a time frame wherein the VA presumes the person is competent.

Completing the 21-22a and the 21-0845

Both of these forms are fairly straightforward. Per the Respondent Burden field in the upper right corner of these files, they should each take no more than 5 minutes to complete. This is an accurate assessment. What is likely to take more time on the VA form 21-22a is getting all the necessary signatures in the appropriate places. It can be confusing, but the claimant and the representative each sign twice – once on each page. Most of the other fields are self-explanatory. An important feature that may easily be overlooked on the 21-22a is a cleverly hidden field that has no number. It is on the second page in the section called “Conditions of Appointment.” The very fine print here indicates that if the individual named on the form as representative is “an accredited agent or attorney, this authorization includes the following individually named administrative employees of my representative.” In the space that follows, you may list all such non-accredited team members who may need to call the VA regarding the status of a claim.

The 21-0845 has similar fields to those in the 21-22a, with the notable exception that the latest version of the 21-0845 now sports the individual character boxes to aid the VA in computer processing of forms at intake. The 21-0845 also allows you to select a security question and answer that you may need to provide as confirmation that you are the person identified when you telephone the VA.

What to file with the 21-22a and the 21-0845

There is nothing in particular that is required to be filed with either of these two forms. They both should be submitted with an Intent to File a Claim or the Fully Developed Claim. They should also be included with any other correspondence you may need to address to the VA, particularly when the third party is the individual signing the correspondence.

The individual appointed as the claimant’s representative on the form 21-22a will automatically be authorized to receive the information accessible by the form 21-0845. So you may ask, why file the 21-0845 in addition to the 21-22a? Some VA call center agents employ the extra security layer provided by the form 21-0845 and will require the response to the security question before they release any information over the telephone. Furthermore, you cannot have more than one 21-0845 on file with the VA at any one time. By filing one with your client’s claim, you ensure from the outset that your firm is the only third party with access to that claim information. Subsequent 21-0845s that are filed will not replace the active one on file until the claimant has notified the VA that he/she wishes to withdraw it.

As mentioned above, neither of these forms will directly affect the adjudication of a pension claim, but when in place they allow you to manage the claim more effectively. Without the powers these forms bestow, you are dependent on receiving information secondhand and perhaps not in a timely manner, which can in turn lead to unnecessary denials.

If you want to sharpen your VA technical legal saw, we offer a free "VA Tech School" webinar the first Wednesday of every month. Click here and join us on Wednesday, October 7th at 12 EST. This month's topic is "Denied Benefits Due to Transfers of Assets: How to Appeal and Win!" Register today!

By Sabrina A. Scott, Paralegal, The Elder & Disability Law Firm of Victoria L. Collier, PC and Director of VA Services 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, www.LawyersWithPurpose.com.

Is Your Practice … Uhmmmm, Easy?

September 28, 2015

by David Zumpano with No Comment Coaching & Implementation Estate Planning Drafting Software Systems & Processes Team Building

Many lawyers are frustrated when it comes to operating the "business" of their practice. Law school taught us how to think critically and help people, but it did not teach us how to run a business. As a result, much pain and long hours of work and frustration are created. Balancing the needs of your clients and operating your business is one of the most frustrating elements of running a law practice. The good news is, fixing it is not hard, it just requires a basic understanding you never got in law school. Let's begin by identifying whether you have effective employees.

In coaching hundreds of law firms over the past 15 years, I have a question I ask consistently: "Is it occurring?" What does that mean? Essentially, if what you want to be happening is happening, then it's occurring. If what you want happening is not happening, then it's not occurring. Simple enough? So let's analyze this in your practice. If you're frustrated with a certain part of your business, like hiring employees, because it's not being done effectively, then it's not occurring. If it's not occurring, then the person responsible for doing it does not have the proper skill set. Unfortunately, in a small practice that's usually you. So you must find others who know how to do it so you can get the employee hired effectively. This can be someone in your firm, or you can reach out to others and outsource your need. (LWP has many system services for estate planning attorneys; that’s what distinguishes this organization from most others.)

The interesting thing is, for those individuals you reach out to for help, it's really easy for them, which amazes most attorneys because we don't get it and it's so frustrating to us. (I personally hate it.) But for those who have the skill set, it's easy and it occurs! So as you look around your practice, if there's an area causing you pain, it is a clear message that you lack someone with a natural skill set to perform that task or duty. If drafting is not happening effectively, then you need to get someone who does it easily. They're out there and you can't stop until you find someone, because once you do, your life and your practice will change dramatically.

In building companies over the last 15 years, the level of pain I have endured along the way sometimes was unbearable. But now, as I have reached a point where many of those companies are operating without me, I look back at what the key issues were that I had to overcome. The answer? It all came down to skill set and ease!

What was difficult and frustrating for me was very easy for other people with the right skill set. To identify what five skill sets you need, your role and what roles you need to fill to support you, join us at our Tri-Annual Retreat in October. So the stress of running your business can subside and you can focus on what you do best and what is "easy" to you, and leave the other roles to the people who find them "easy" to do. Doors close October 2nd and we will NOT have any seats remaining, I promise you that!. It's not hard. Let Lawyers with Purpose show you how. Click here to register now.

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

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Ground Zero

September 27, 2015

by Lawyers With Purpose with No Comment Systems & Processes Team Building

I don’t know about you, but when I hear the term “ground zero,” I think about the World Trade Center and September 11. Like many, I watched it on television as it was happening. It changed our world and our daily lives, even today, years later. I had the benefit of visiting Ground Zero recently. The reflecting pools are a beautiful tribute to the men and women who died there.

How is that relevant to you today? The term ground zero has a broader meaning – the point of a disaster that suffers the most severe damage. For me, it also means starting over, often from the ground up.

As with the terror of 9/11, recovering and starting over can be devastating. But, beginning again can be a fresh introduction to opportunities not yet discovered. Rebuilding with knowledge and experience from the past can create stronger futures.

Again, how is this relevant to you? Consider a few scenarios.

Losing an employee: Every day I get compliments from clients about how wonderful my receptionist is. She truly is and I love her. She knows my quirks and anticipates my next need, and then fulfills it. But she won’t much longer, because she gave me her “notice.” She’s moving on to her higher calling. While I support her completely, I am devastated because I have to start over. Begin again. New interviews. New training. New personality. Ground zero. It will be hard and I don’t like the thought of any of it. However, I know that when I hired my assistant two years ago, I went through the same thing, and hiring her made my firm stronger, as will hiring our new candidate.

Terminating a partnership: Working as a sole practitioner is hard. Making a business work with partners is even harder, in my opinion, and I’ve done both very successfully and unsuccessfully. When you are alone, you can make all the decisions, good or bad. You own your successes and your failures. When you have a partner, you share a lot but usually don’t have total control of anything. It’s like a marriage. You give to get and weigh the benefits and consequences of each decision and action. Like marriages, partnerships may end in the big “D” – dissolution. Where do you go from there? From Ground zero?

What is your Ground zero? What makes you feel as if you have to “start again?” Do you run, hide, or give up? You can, or you can find the new opportunity. Release the inhibitors of the past. Find the strength and grow from the experience. Build something bigger, stronger and better.

Visit Ground Zero and find the blessing in the tragedy. Build your Freedom Tower.

If you haven't registered for our Tri-Annual Practice Enhancement Retreat, there's still time. But hurry! The hotel is actively working on finding us an "overflow hotel" since there are only a few rooms left at the event hotel. Click here to register.

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 With Purpose, Co-Founder of Veterans Advocate Group of America.

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Annuity or Promissory Note?

September 23, 2015

by David Zumpano with One Comment Asset Protection Estate Planning Drafting Software

I'm intrigued with how many lawyers use Medicaid-qualifying annuities when doing crisis Medicaid planning. Medicaid-qualifying annuities address a core issue in crisis Medicaid planning for applicants with excess resources. The annuity acts as a “spend down,” which often leads to immediate eligibility for the client. The promissory note has the exact same impact and use in this fact pattern, but interestingly, it is used less often, even though it’s much easier to achieve eligibility, which will disqualify the individual for benefits for a period of time. The question becomes which to use and why.

The Omnibus Reconciliation Act of 1993 (OBRA) was the first legislation that began to set parameters for annuities to be Medicaid-qualifying. Essentially, it requires the annuity to be irrevocable, non-assignable, to have no cash value, and to be payable over the life expectancy of the annuitant. The Medicaid-qualified annuity rules are further enhanced by the Deficit Reduction Act of 2005 (DRA), wherein it also required that all annuities must have equal monthly payments with no delay in or balloon payments, and the annuity must name the state as the irrevocable beneficiary after the death of the annuitant. This significantly reduced the use of Medicaid annuities as a spend-down strategy to only married applicants, but it still allows them to be used in a crisis case to become “otherwise eligible” and use the annuity funds to be used for payment of long-term care costs during any disqualification period created by any uncompensated transfer.

DRA 05 also provided the first legislative permission for Medicaid-qualified promissory notes. DRA specifically provides that a loan to a third party by a Medicaid applicant will be deemed as a compensated transfer if it is irrevocable and pays over the life expectancy of the applicant. Essentially, DRA 05 permitted every individual to create a private annuity. The one risk, however, is that the statute does not require a promissory note to be non-assignable, so if it is assignable, it will be a countable resource in determining Medicaid eligibility because it is saleable and has a value. To avoid this, ensure that your promissory note is non-assignable.

So the question becomes, if you can do your own promissory note, why would you ever use a Medicaid-qualifying annuity?

The answer comes down to your state's application of the DRA 05 laws regarding promissory notes. While the federal law is clear that they are permissible, some states still don't permit them and count them as an available resource in determining the eligibility of a Medicaid applicant. This perplexes me, as federal law is clear, and under federal law, the state law cannot be more restrictive than the federal law. Most states that have taken a position against promissory notes have seen that position overturned by legal proceedings, whereas many states that do not permit promissory notes have not been effectively challenged.

Notwithstanding, as estate planners we are not litigators, and we strive to avoid litigation. So if your state does not permit promissory notes, then the path of least resistance is using Medicaid-qualifying annuities. When given the choice, a promissory note is easier, it can be done within the confines of your own office and it can be customized to the individual needs of the client, whereas Medicaid-qualifying annuities are typically restricted by the minimum period of time required by the insurance companies (typically a 24-month payout). To learn how to effectively use a Medicaid annuity versus a promissory note, let LWP show you.

We still have a few spots left in the room at the Tri-Annual Practice Enhancement Retreat but register now. Registration closes October 2nd and we WILL reach capacity … (we always sell out)! If you're an estate or elder law attorney, you don't want to miss this! Click here to register now.

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