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How To Calculate The Minimum Months To Qualify & Assets At Risk To Break Even

by with No Comment Estate Planning Drafting SoftwareLegal Technical

What do they really mean? 

If you're an Lawyers With Purpose member, you know the minimum months to qualify is a term we use in to determine how many months that it will take to get a client’s excess assets down to zero by gifting money and paying for nursing home costs.  It is then used to calculate the breakeven point (60 – minimum months to qualify = breakeven point).

Bigstock-colorful-numbers-background---44896171Before a client can be eligible for Medicaid, their excess assets much be zero.  We know that we want to protect as much money as possible and that to do that we have to give the excess assets away (we have already performed our spend down analysis at this point).  If the penalty divisor for the state is $5000 / month, then we know that if we give away $5,000, then we must pay for one month of nursing home cost.  At the point, we have already done the analysis to figure out the monthly deficit – that is, how much money will the client have to pay from their resources after their current living expenses, allowable Medicaid exemptions, and nursing home costs are taken into account.  Let’s say that is $10,000.  So we know that if we give away $5,000, we pay for one month of nursing home cost.  If we have to pay for one month of nursing home cost we have to pay $10,000.  If our excess assets equals $100,000, then to get through month one, we give $5,000 away, we pay $10,000, and that reduces our excess assets by $15,000 and leaves excess assets at $85,000.  The next month, we do it again.  We give away $5,000, we incur one month of penalty, and we pay $10,000 to the nursing home.  That leaves us with $70,000 in countable assets.  The next month we do it again.  We give away $5000, we pay $10,000 to the nursing home, and our countable assets drop to $55,000.  (Longtime members may remember this as the “MPS Dance.”)  This continues until our countable assets drop to zero, then we add up how many times we had to do the dance, and that becomes our minimum months to qualify.  A short cut is to take the total excess assets and divide by the amount needed each month, in this case $15,000.  In our example, that will give us 6.67 months.  In other words, we have to give away $15,000 for 6.67 times in order to get the excess assets down to zero. 

This number is then used to calculate the amount of money we can protect – the penalty divisor times the minimum months to qualify.  Here that would be $5000 x 6.67, which would equal $33,350.  Because we give away $33,350, we know we will have to private pay for 6.67 months (the penalty).  That money is protected because it will not need to be spent on the nursing home.  Then we calculate the amount of money that is at risk until breakeven – that is, if the client or spouse goes into a nursing home prior to the breakeven point, then this is the amount that they will have to pay before Medicaid will begin to pay for their care.  We know that we have to pay for 6.67 months of nursing home care in this scenario, so we multiply the cost of the care each month, $10,000, by the number of months we will need to pay for the care, 6.67, which gives us the total cost that is at risk to having to pay the nursing home as $66,700.  So, worst case, they will have to pay that $66,700 to the nursing home in order to protect the $33,350.  Not great numbers in this particular scenario, but it is still better that spending it all down and applying to Medicaid.

Announcing NEW Pricing, Services, & Membership Changes—Effective Monday, October 27th

At LWP we are committed to innovation and continuous improvement. In an effort to augment our services and the value of our membership levels, LWP is excited to announce changes to our membership levels. All membership offerings were specifically designed to serve solo, small and medium sized firms based on their customized needs. Changes are applicable to all NEW memberships beginning Monday October 27th. 

If you have been considering joining the Lawyers with Purpose community, please contact mhall@lawyerswithpurpose.com to schedule a 15 minute demo to see the upcoming pricing, services, & membership structures! 

Existing LWP member? Great NEWS, you’re grandfathered in! 

Dave Zumpano,

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

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Uncovering “Hidden” Pre-Planning Opportunities with the Asset-to-Income Ratio

by with No Comment Estate Planning Drafting SoftwareLegal MarketingSystems & Processes

Uncovering “Hidden” Pre-Planning Opportunities is one of the biggest shocks from attendees at our Medicaid training is when they learn about the asset-to-income rule to qualify clients for Medicaid sooner. The Medicaid law states that, when the income of the community spouse of a Medicaid applicant is less than the minimum monthly maintenance needs allowance, then the community spouse may exempt additional assets needed to attain the minimum monthly maintenance needs allowance.

Bigstock-Five-years-old-little-cute-boy-41670169Said simpler, if the community spouse doesn't have enough income, they can exempt additional assets to ensure the necessary income is produced. This situation happens all the time, but the exemption is rarely used.

That's why Monday October 20-22nd we are hosting a 3 Day Asset Protection, Medicaid and VA CLE Program.

In this event we will be sharing crucial information such as:

 

●       Why clients don't care how much you know, and what they want from you.

●       There's no such thing as crisis Medicaid planning, and the preplanning you are missing out on is right in front of you.

●       The key features and provisions of grantor, non-grantor, and pure grantor trusts and when to use each for asset protection, Medicaid and VA planning.

●       The newest forms and procedures to file VA apps and appeals and receive timely decisions.

●       Why annuities are often the "lazy-attorney" approach to Medicaid planning and what that method fails to consider.

●       How to calculate whether an IRA should be liquidated and when not to use personal service contracts when Medicaid planning.

At a recent two-day summit we hosted with national veterans expert Victoria Collier, these were the biggest issues raised by your colleagues who attended. Are you prepared? Is your level of understanding in these areas sufficient to serve this growing marketplace? Here is what a few attendees said was the most useful to them:

"The most valuable thing about Day 1 was learning about asset to income rule."

— Carl, Baton Rouge, LA

"The worksheets and having a way to explain Medicaid planning to clients on their level was the most valuable part."

— Susan, Cypress, TX

"Was thrilled to learn there is no such thing as crisis planning and now I have so many more pre-planning opportunities I didn't see before."

— Lisa, West Palm Beach, FL

The asset-to-income rule is just one of several overlooked rules that are overlooked or not fully utilizes to help clients qualify for Medicaid. Feel confident using them in your practice! Click here to to join this must attend event to get the essential strategies you need to protect your clients.

See you there!

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

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Hidden Dangers of Medicaid Qualifying Annuities

by with No Comment Asset ProtectionEstate Planning Drafting SoftwareMedicaidSystems & ProcessesVA

Today, many elder law attorneys rely on Medicaid qualifying annuities to get their clients qualified to receive Medicaid benefits. They're also used when clients seek VA pension benefits.

While Medicaid qualifying annuities have become the default solution, they are not without risk. One challenge is that MQA's do not work well for single individuals. Second, even when used in married planning, there is no assurance the amount placed in the Medicaid qualifying annuity will actually be preserved. In fact, it could all be lost with the subsequent disability or death of the community spouse.

Bigstock-Problem-And-Difficulty-Concept-51429601These are just some of the issues (not to mention the Veterans Administration's changing position on annuities when applying for veteran pension benefits) that we will be discussing at the Asset Protection, Medicaid and VA Practice With Purpose Program October 20-22nd  in Phoenix, AZ.

National Asset Protection, Medicaid and VA experts and dozens of attorneys like you will be collaborating to identify the hidden risks in the different Medicaid and veterans' benefits strategies. This program promises to be the hands-on strategic solving many lawyers crave in their practice. Click here to get a full outline and to register for the program.

In these three days here is just some of what we will cover:

ASSET PROTECTION:

  • Recent updates to asset protection and Medicaid compliant strategies.
  • The new asset protection strategies dominating the marketplace.
  • The death of DAPT'S, FLP'S, GRATS, GRUTS, and tax planning, and what's replaced them.
  • The five essential trusts and key drafting needs to serve 99.7% of clients.
  • The Power of Powers of Appointment, in the right places.
  • Four "must have" drafting considerations and three "most forgotten" powers in trust.

MEDICAID:

  • Four steps to Medicaid eligibility for any client.
  • How to calculate the "breakeven" to ensure the proper filing date for the shortest penalty period.
  • Medicaid Qualifying Annuities: Hidden risks and how to properly disclose them to clients or protect from them.
  • The seven key factors to calculate any Medicaid case in seven minutes (or less!).
  • IRA's: Exemption versus taxes, how to calculate if IRA's should be liquidated or exempted in Medicaid and VA cases.

VETERANS' BENEFITS:

  • New fully developed claims process for veterans and widows.
  • Qualifying assisted living facilities as UME's.
  • Key language to complete the physician affidavit for more timely approvals.
  • Update on three year look back for VA benefits.
  • The key reports no longer required for VA applications.
  • Dangers of annuities in VA benefits planning.
  • The effects of the Supreme Court decision on DOMA related to veterans' benefits.

HERE'S WHAT YOUR PEERS HAD TO SAY ABOUT THE PROGRAM:

  • "It will change your practice and your life!" –John Koenig
  • "Great way to grow into a real firm and help one's community." –Antoinette Middleton
  • "Go to the training session and consider and evaluate upgrading your delivery of services, for me it's modernizing what I can offer." –Wally Kelleman

Are you going to miss or attend the most important event of the year? Click here now to join some of your most successful colleagues and leave confident in the strategies you provide to your clients every day. 

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

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How Efficient Is Your Law Firm?

by with No Comment Asset ProtectionEstate Planning Drafting SoftwareLegal MarketingMedicaidVA

Tom was making the same colossal mental mistake most attorney practitioners make, thinking he was doing everything he could to eke out a respectable living.  He certainly was working hard enough.

Bigstock-Stop-Doing-What-Doesn-t-Work-52434685Tom and his partner Richard started their practice together a few years ago.  They both thought they could earn a better living than working for their respective law firms.

It didn't take long for reality to set in. Their hours were longer and they earned far less per hour than they had when they had employers.

They hired an admin, Sally, about a year ago.  It definitely helped but there were still problems.

After Tom read the intro to the Revenue Focuser Workbook, he was definitely intrigued.

He coordinated two hours for himself, his partner, and their admin to watch the video and work through the workbook.

Tom and Richard thought about how much they really wanted to pay themselves every month.  Since they'd opened their doors, they had never been able to pay themselves that magic number.

They also recognized that, for some reason, their marketing efforts were unfocused and never attracted the right clientele. They could only help a small percentage of the prospects who called them.

Together the three identified their key revenue-generating services.  They added up the hours they spent delivering each service.

Tom and Richard also looked at the total hours they spent in the office each week.  They felt a knot in the pit of their stomachs when they discovered their office was operating at less than 20% of efficiency.  In fact, they barely operated at 19% efficiency.

Tom and Richard realized it was time to figure out how to retool their processes so they could handle their clients more efficiently; they also needed to determine how to attract the right clientele.

If you haven't worked through your Revenue Focuser, it could be the most important hour you spend.  When you decide it's time to eliminate the long hours and the feeling of being overwhelmed,take 1 hour and Complete the Lawyers With Purpose Revenue Focuser.

The income you want to earn and the ease you want to experience is within your reach.

If you have any questions about your Revenue Focuser results, send us your questions on the form on our contact page. Just send an email to info@lawyerswithpurpose.com.

And, if you're interested in learning more about Lawyers With Purpose, please click here and register today to attend our Practice With Purpose Program in Phoenix, AZ, October 20-22nd.  We'll see you then!

To your success,

Dave Zumpano 
Lawyers With Purpose

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The Five Key Trusts You Must Know

by with No Comment Asset ProtectionEstate Planning Drafting SoftwareLegal MarketingMedicaidVA

Did you know that when it comes down to it there are only *five* trusts that serve 99.7% of all client needs? These include:

  1. The revocable living trust;
  2. The income only irrevocable trust;
  3. The control only irrevocable trust;
  4. The third party irrevocable trust; and
  5. The completed gift irrevocable trust.

Bigstock-Old-Keys-42114148This is all you need to serve 99.7% of all clients. The overindulgence in conversation about DAPT'S, GRATS, GRUTS, FLPs, and other advanced tax planning strategies are for mental exercise only and apply to less than 3 in 1,000 Americans.

The correct trust choice for clients when designing planning to protect their businesses, ensure they qualify for Medicaid, if the need for long-term care occurs, or the preservation and maximization of veteran's benefits, trust choice is critical. But more important than trust choice however, is the drafting utilized inside the trust chosen.

That's why the national Medicaid and VA experts are hosting a three day program to bring you together with your colleagues to show you the solution they have created to these often misused trusts. Click here for the course outline and to register. This three day program will not only address trust drafting and trust use, but also address all of the core elements in today's Asset Protection, Medicaid, and VA Benefits environment.

In just three days, we will show you…

ASSET PROTECTION:

  • Recent updates to asset protection and Medicaid compliant strategies.
  • The new asset protection strategies dominating the marketplace.
  • The death of DAPT'S, FLP'S, GRATS, GRUTS, and tax planning, and what's replaced them.
  • The five essential trusts and key drafting needs to serve 99.7% of clients.
  • Four "must have" drafting considerations and three "most forgotten" powers in trust.

MEDICAID:

  • Four steps to Medicaid eligibility for any client.
  • How to calculate the "breakeven" to ensure the proper filing date for the shortest penalty period.
  • Medicaid Qualifying Annuities: Hidden risks and how to properly disclose them to clients or protect from them.
  • The seven key factors to calculate any Medicaid case in seven minutes (or less!).
  • IRA's: Exemption versus taxes, how to calculate if IRA's should be liquidated or exempted in Medicaid and VA cases.

VETERANS' BENEFITS:

  • New claims process for veterans and widows.
  • Qualifying assisted living facilities as UME's.
  • Key choices to complete the physician affidavit for more timely approvals.
  • Update on three year look back for VA benefits.
  • The key reports no longer required for VA applications.
  • Dangers of annuities in VA benefits planning.
  • The effects of the Supreme Court decision on DOMA related to veterans benefits.

ALL PARTICIPANTS IN THIS SUMMIT WILL RECEIVE:

  • Asset Protection, Medicaid and VA Practice Kit which includes:
  • 50 state Medicaid Reference Resource Guide (summarized in 3 pages)
  • 50 state Estate Recovery Article and updated state by state summary.
  • Grantor Trust Summary and use tool.

HERE'S WHAT YOUR PEERS HAD TO SAY ABOUT THE PROGRAM:

“You don't know what you don't know. Come learn how to best serve your clients.” –Matthew Donald

“I would consider this mandatory training for any elder law/estate planning attorney. If not, they should plan for a mediocre practice at best.” –Tim Jarvis

“Just do it. The tools and training will absolutely be worth it!” –Rod Halstead

If you are ready for strategic solutions that you can see, touch, and feel, this is not an event you will want to miss. Click here now to begin your strategic approach to solving your clients' trust needs.

To Your Success,

Dave Zumpano
Co-Founder, Lawyers With Purpose
Practicing Attorney, Just Like You! 

 

The IPug™ Protection Trust

by with No Comment Asset ProtectionEstate Planning Drafting Software

The Lawyers With Purpose Client Centered Software has different genres of trusts.  And it's important to distinguish the iPug protection trust.  Many other national organizations try to compare themselves to it, but they can't.  The iPug is trademarked and even has some patent-pending features to it.

I've had the ability to look at all the softwares in the industry, and they all have features that match some of the features in an iPug trust.  But an iPug trust is a series of features that are unique all in one place that gets a variety of results.  What are some of the results?

For example, an iPug trust can be used for several facets.  One facet it is traditionally used for is Medicaid eligibility.  And there's variations of Medicaid compliance, so we have the income-only versions, we have the control-only versions, and we have the third-party versions, otherwise known in the Lawyers With Purpose community as the MIT, the FIT, and the KIT.  These are our trademarked terms.  You cannot have a MIT, FIT, and KIT unless you have our iPug software.

It is a very unique series of features and functionalities that work together to get results that apply not only to the Medicaid client, but also has uses in VA eligibility and in asset protection, far beyond Medicaid.  For non-taxable estates – ten and a half million dollars or less for a married couple – five and a quarter million dollars currently for a single person – there's a lot of functionality for asset protection.  You can use it for business owners quite commonly and I have a client that just had five of them for his multiple real estate holdings.

So these trusts have multiple, multiple applications far beyond the Medicaid, but also they're user friendly.  Clients like them because they're able to be in control of the trust or able to change them.  They're actually able to even have some uses and benefits from them with some restrictions that we provide training on.  They are very unique and very exciting!  And once you get it, it's hard to go back to anything else.

 

If you are intested in learning more about the Lawyers With Purpose software and want to spend 2 and 1/2 days with us learning about Asset Protection, Medicaid & VA, register for our Practice With Purpose Program today and reserve your spot.  If you are an existing LWP member and would like to attend please contact acrowther@lawyerswithpurpose.com for registration information.

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

The VA Benefits Software

by with One Comment Estate Planning Drafting SoftwareLegal MarketingVA

Our VA software is very unique.  With Victoria L. Collier, the number one V. A. expert in the country, helping develop and create the software. 

 

Many people don't know the eligibility standards around VA benefits.  They know that there is a certain amount of assets and income, but you don't know the amount of assets you can have.  In many cases, you can have assets in the hundreds of thousands of dollars and still be eligible.  We have the software that uses the VA's own formulas in making these determinations.

In addition, our software is very unique in that you could enter client information and it will generate the necessary documents for the application.  We have a complete application process that is tracked through a client management system which gives you reporting, so you're very familiar with where each case stands and what step of the process it's in, the forms that have been completed, which ones are done by clients, which ones are done by the office, and the software will generates those forms. 

Very unique and different, unparalleled in the industry.  Very user friendly for any law practice that's experienced, or doing veteran benefits for the first time, they can confidently ensure that their paraprofessionals are able to handle a large majority of this work.  And they can keep tabs on it with the reporting to be confident that they're not missing any major deadlines.

It’s great technology to help any practitioner be confident that they're not missing anything!

If your interested in learning more about the LWP-CCS drafting software, join us in Phoenix October 20-22nd at our Asset Protection, Medicaid and VA Practice With Purpose program.  Click here to register today!  Existing members who would like to participate can contact Angela at acrowther@lawyerswithpurpose.com

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

 

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The Medicaid Aspects In The Estate Planning Drafting Software

by with No Comment Asset ProtectionEstate Planning Drafting SoftwareMedicaid

Our Medicaid software is industry-changing. We've designed software with artificial intelligence – it knows the applicable laws and exemptions as you enter clients' information. Not only does it tell you the plan of action to take, but it also designs the funding plan and drafts an opinion letter for you to give to clients.

Click this link to watch the video of Dave discussing the unique Medicaid aspects of the software.

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Who Is The LWP-CCS Drafting Software Designed For?

by with One Comment Estate Planning Drafting Software

In this short, less than 2 minute video, Dave explains how seasoned estate planning attorneys appreciate the flexibility of being able to go beyond fundamental estate planning to help their client families with VA, Medicaid, Asset Protection and even Tax Planning using the Lawyers With Purpose estate planning drafting software.

Bigstock-Play-button-53748670Newer attorneys also appreciate the confidence-building safety of the software that prevents mistakes. Asset protection attorneys who are used to domestic asset protection trusts find that the iPug trusts affords the same benefits without any complications.

Watch the video and listen to Dave explain more of the benefits.

 

 

 

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What’s A TAP™ Trust?

by with No Comment Asset ProtectionEstate Planning Drafting SoftwareLegal Technical

Many people wonder what a TAP™  trust is.  To start, a TAP™  trust is a “Tax All Purpose Trust.”  The name reflects the usability and functionality of trusts that were traditionally much more restrictive. 

Most people are familiar with an ILIT, an Irrevocable Life Insurance Trust.  This trust is traditionally created to hold life insurance policies to ensure it’s proceeds at death, are not included in the estate of the grantor for estate tax purposes.  The ILIT can be either a grantor or non‑grantor trust.  Essentially, a grantor trust is one in which the IRS deems the grantor to be the owner for income tax purposes.  This ensures that all income generated by the grantor trust is taxed to the grantor directly; on his or her tax return, and not taxed to the trust (whose top tax rate occurs at about $11,000 versus the top tax rate for individuals which is more than $450,000.  In a separate regard, transfers to ILIT’s or other grantor trusts are a completed gift for gift tax purposes and excluded from the estate of the grantor in determining the grantor’s estate tax at death.

Bigstock-Close-up-on-old-book-on-colorf-52414138The Tax All Purpose trust is similar to the ILIT but much more expansive.  Traditionally ILITs held only insurance policies.  The TAP™  trust can hold insurance policies, real estate, stocks, bonds, and even business interests.  In fact, it can own any asset you own, even your IRA, (but not until after your death).  A TAP™  trust, like a traditional ILIT, can be set up as a grantor, or non-grantor trust.  As a non-grantor trust, it will be taxed as a separate taxpayer, and all the income is taxed directly to the trust at trust income tax rates.  As a grantor trust, all income is taxed on the personal income tax return of the grantor, at the individual tax rates. The flexibility of the TAP™  provides convenience for clients because a single trust can hold many various assets rather than having a single trust for each type of asset.  Similarly, a TAP™ trust can also act as a standalone IRA trust, if designed.  While other trusts accomplish this with more flexibility, if a client had a TAP™ trust for other purposes, he or she could also use it to accomplish your IRA planning goals. 

Another opportunity use for TAP™ trusts is to make annual gifts to one (or several) people to reduce the taxable estate of the grantor.  In some circumstances clients elect separate TAP™ trusts for each grandchild.  The intent is to make annual gifts in the amount of the exclusion (currently $14,000.00) to each grandchild and appoint each grandchild the trustee of their separate trust.  The TAP™  is used as a mechanism to identify how each beneficiary utilizes and manages the assets to allow the grantor become more confident of the beneficiaries ability to manage it more responsibly.  Ultimately, the client can use the TAP™  trust to identify whether additional annual contributions should be made for the individual and whether they should be the beneficiary of all his assets after death.

In today’s world of expanded estate tax limits ($5,340,000 – 2014), a TAP™  trust is a catchall trust to address the need of clients who want to give completed gifts to third parties without necessarily having them be controlled by the beneficiary, but allows for it if desired.  The primary purpose of a TAP™ trust is to ensure all gifts made to the trust will be excluded from the grantor’s taxable estate.  In the absence of being concerned with estate tax, an irrevocable pure grantor trust (IPug™) should be used.

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