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Does Divorce Impact an Estate Plan?

The Changes That Come with the End of a Marriage

When a couple gets divorced, their estate plan needs to be updated. This is because the original plan was likely based on the assumption that the couple would always be together. Now that divorce is on the horizon, it's important to make sure your estate plan reflects your new circumstances. If you don't update your estate plan after divorce, you could end up with a lot of problems down the road. In this blog, read about the impact of divorce on an estate plan and how to make changes to reflect your new situation.

Changes to an Estate Plan After a Divorce

Understandably, divorce can have a significant impact on all aspects of life, including your estate plan. If you have gone through the process of creating an estate plan, it is important to review and update your documents after your divorce is finalized. Here are some key changes to keep in mind:

Beneficiary Designations

If you named your former spouse as a beneficiary on any accounts (life insurance policy, retirement accounts, etc.), be sure to update the beneficiaries to reflect your current wishes.

Guardianship

If you named your former spouse as the guardian for any minor children, you may wish to appoint someone new in their place.

Power of Attorney

If you named your former spouse as an agent under a durable power of attorney, you will need to appoint someone new.

Wills and Trusts

If your former spouse is named as executor or trustee of your estate, you will need to name someone new in their place. You may also need to make changes to the distribution of assets in your will or trust.

Ask for Help from an Estate Planning Attorney

If you have any questions about updating your estate plan after a divorce, contact an experienced estate planning attorney and ask for their guidance. They can give you the help you need to make the most informed choice for your future.

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What is a Retirement Trust?

Planning for the Future

When it comes to planning for your financial future, there are a lot of different options to choose from. One option that many people don't know about is the retirement trust. A retirement trust can be a valuable part of your estate plan in Michigan. In this blog, learn what a retirement trust is and how it can help you secure your retirement future!

Defining a Retirement Trust

A retirement trust is defined as an irrevocable trust created for the primary purpose of holding retirement assets, such as 401(k)s, IRAs, and other pension or profit-sharing plans. The retirement trust is designed to provide benefits to the settlor during their retirement years and can be structured in a number of ways to achieve this goal.

Why Would You Want a Retirement Trust?

There are several reasons why someone might opt to create a retirement trust as part of their estate plan. One reason is that it can help manage retirement assets and distribute them according to the settlor's wishes. Another reason is that a retirement trust can provide tax advantages. For example, if the settlor dies before they have withdrawn all of the funds from their retirement account. In that case, those funds can be distributed to their beneficiaries without incurring any tax penalties.

How Does a Retirement Trust Work?

A retirement trust works by holding retirement assets in an account that is managed by a trustee. The trustee is responsible for investing the retirement assets and distributing them according to the terms of the trust. The settlor can choose to have the trust pay out benefits during their lifetime or after their death.

Work with an Estate Planning Attorney

Creating a retirement trust is just one way to plan for retirement. There are many other options available, so it's important to speak with a qualified estate planning attorney to determine what's best for you and your family. If you have questions about retirement trusts or other aspects of estate planning, contact the team at Michigan Law Center, PLLC today. We would be happy to help you plan your most effective future.

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Wills vs. Trusts in Michigan

Planning for the Future

Many people interested in estate planning are unsure of the difference between wills and trusts. While both instruments allow you to distribute your assets after death, there are some key differences between the two. Keep reading to learn the differences between wills and trusts in Michigan to make the best decision for you and your family.

Wills

A will is a document that directs how your property will be distributed after you die. You can use a will to:

  • Name an executor who will oversee the distribution of your property.
  • Appoint a guardian for your minor children.
  • Designate beneficiaries for your property, including family members, friends, charities, or organizations.

Trusts

A trust is another way to direct how your assets will be distributed after you die, but with some important differences from wills. Trusts can be revocable or irrevocable. Revocable trusts can be changed at any point during the settlor's lifetime, while irrevocable trusts cannot be changed once they are created. This means that with a trust you can:

  • Place conditions on how and when assets are distributed.
  • Avoid probate, which is the legal process of distributing a person's assets after they die.
  • Reduce or eliminate estate taxes.

Differences Between Wills and Trusts

While wills and trusts both allow you to direct how your assets will be distributed after you die, there are some important differences to consider. These include:

Probate

As mentioned above, one of the main advantages of using a trust is that it can help you avoid probate. With a will, your assets will go through probate after you die. Probate can be time-consuming and expensive, so avoiding it can be a major advantage.

Control

With a will, you have less control over your assets' distribution than with a trust. With a trust, you can place conditions on how and when assets are distributed, which gives you more control over what happens to your assets after you die.

Taxes

Another advantage of using a trust is that it can help you reduce or eliminate estate taxes. With a will, your assets may be subject to estate taxes when you die.

Work with an Estate Planning Attorney

Deciding whether to use a will or a trust is an important decision in Michigan estate planning. If you have questions about wills vs. trusts, or any other aspect of estate planning, contact an experienced Michigan estate planning attorney today.

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What Should I Include in My Estate Plan?

Key Elements to Include

You may not want to think about the unexpected occurring. But the fact is if something happens and you don't have an estate plan in place, your loved ones will have a great bit to deal with in the aftermath - and that can be a lot harder than it needs to be. In this blog post, we'll discuss what should go into an estate plan in Michigan. We'll cover wills, trusts, powers of attorney, and healthcare directives. So whether you're just getting started on your estate planning or you're looking for a refresher course, read on!

Wills

A will is primarily used to outline what happens to your property and possessions after you die. You can use a will to:

  • Designate who will receive your property
  • Appoint a guardian for your minor children
  • Name an executor to carry out your wishes

If you die without a will, state law regarding estates will determine how your property is distributed.

Creating a will is one of the most important things you can do for yourself and your loved ones. It can give you peace of mind to know that your final wishes will be carried out and that your loved ones will be taken care of according to your wishes.

Trusts

Trusts are also popular estate planning tools. A trust is created when a settlor (the person who creates the trust) transfers property to a trustee. The trustee manages the property on behalf of the beneficiaries designated by the settlor. Trusts can be used in various ways, including asset protection, minimizing taxes, and planning for loved ones with special needs.

Power of Attorney

A power of attorney allows you to appoint someone to make financial and legal decisions for you if you ever become incapacitated. If you do not have a power of attorney in your estate plan, your loved ones will have to get authority from the court to handle your affairs, which can be time-consuming and expensive.

There are two types of power of attorney: durable and nondurable. If you become incapacitated, your appointed person's durable power of attorney remains in effect; nondurable power of attorney expires if you become incapacitated. You can choose to have one type or both types in your estate plan.

Healthcare Directive

A healthcare directive sets forth your wishes regarding medical treatment in the event that you are unable to communicate those wishes yourself. For example, you can use a healthcare directive to specify whether you want to receive life-sustaining treatment if you are ever diagnosed with a terminal condition.

A healthcare directive can also appoint someone to make medical decisions on your behalf if you are unable to do so yourself. Choose someone who you trust to make decisions in accordance with your wishes and what they believe would be the best option for you.

Work with an Estate Planning Attorney

There are many things to consider when creating an estate plan. The best way to ensure that your wishes are carried out is to work with an experienced estate planning attorney. An attorney can help you determine what kind of documents you need and how to best protect your assets. If you need help creating an estate plan, reach out to the team at Michigan Law Center, PLLC. We advocate for our clients at all parts of the estate planning process.

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2022 Great Lakes Special Needs Planning Symposium

Now Open for Registration!

December 1st through 2nd, at The Dearborn Inn.

A 2-day experience dedicated to the education of professionals who plan for persons with disabilities and administer special needs trusts. This informative and interactive educational adventure benefits seasoned professionals as well as those just beginning their practice. You will have multiple opportunities to chat with nationally-renowned experts on all aspects of special needs planning and administration to ensure your move toward mastery in this complex yet rewarding field.

  • Learn from the nation’s leading experts presenting on special needs administration and planning, drafting, public benefits, trust investment, health care coverage, enhancing the quality of life for persons with disabilities, planning for retirement benefits, and how to manage serving people with high conflict personalities.
  • Option to attend in person and network with your colleagues, meet the experts, and enjoy the beautiful Dearborn Inn OR choose to attend all sessions virtually and obtain the best information available from the comfort of your office or home office.
  • The best option is to attend both days of the conference to learn the fundamentals of special needs planning and the latest in this specialized area of law. Yet, the attendee can choose to attend Day One or Day Two only. The first-day presentations are intended for professionals who would like to incorporate special needs planning and administration into their professional planning practice It provides an excellent foundation to build this rewarding area of practice. The second-day presentations are intended to provide both beginning and experienced practitioners with the latest information and techniques on proper planning for persons with disabilities.
  • The best sponsors and exhibitors in the world that provide services for attendees to assist them in becoming the best professionals they can be in assisting persons with disabilities.

Please visit GLSNS.com for full details and registration information.

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Will People with Disabilities Have Priority for a COVID-19 Vaccine?

The COVID-19 pandemic has been particularly devasting to people with disabilities. Recent studies indicate that they are three times as likely to die from the virus as the general population.

But as the pharmaceutical industry moves closer to obtaining approval for one or more COVID-19 vaccines, questions continue about whether the vaccines will be allocated in a way that does not discriminate against people with disabilities, and how affordable they will be.

Vaccines developed by Pfizer and Moderna were both more than 90 percent effective in large clinical trials.  Both companies are now gathering safety data necessary for emergency approval by the Food and Drug Administration. Numerous other vaccines are in various stages of development.

Even if a vaccine is approved, however, there will not be sufficient doses immediately to provide to every American. As a result, government agencies and health care providers will have to make difficult decisions about whom to prioritize when administering the vaccine.

At the request of the Centers for Disease Control and Prevention, in September 2020 the National Academies of Science, Engineering and Medicine issued a preliminary framework for the distribution of a COVID-19 vaccine. The framework prioritizes essential and front-line health care workers, as well as people living in group homes and other congregate settings.

Echoing concerns earlier in the COVID-19 pandemic about ventilator rationing, disability advocates have pointed out the absence of any express mention of people with developmental disabilities, who they fear will receive lower priority based on outdated assumptions and stereotypes about their ability to survive COVID-19.

In a September 9 letter to the Office of Civil Rights in the Department of Health and Human Services, the Consortium for Citizens with Disabilities (CCD) implored the Department to ensure that the distribution of any COVID-19 vaccine complies with federal anti-discrimination laws.

“Disability status and age should not be used to deny or deprioritize people for a vaccine, such as categorically excluding people with certain disabilities or functional impairments or prioritizing people based on projections of long-term survivability,” the CCD wrote.

The National Council on Disability and the Autistic Self Advocacy Network also submitted comments to the National Academies, expressing similar fears about its framework.

In addition to distribution concerns, there are questions about whether health insurers will provide vaccine coverage, and if it will be affordable.

As part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) , Congress mandated in March 2020 that Medicare cover the full cost of any COVID-19 vaccine for Medicare beneficiaries. However, Medicare regulations currently only permit the federal government to cover the costs of vaccines approved through the standard approval process, as opposed to through an emergency use authorization (EUA), which appears to be how the Trump Administration anticipates approving vaccines in the next two months.

On October 28, the Centers for Medicare and Medicaid Services (CMS) released interim final regulations requiring Medicare to cover the full cost to patients of any COVID-19 vaccine, regardless of whether it is approved through an EUA. Coverage will also be free for Medicaid recipients, under the announced policy.

CMS also announced a partnership on October 16 with retail pharmacies CVS and Walgreens to provide vaccines at no cost to seniors and staff in long-term facilities

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President-Elect Biden’s Promises to People with Disabilities

President-elect Joe Biden has made more promises to the disability community than perhaps any incoming president in U.S. history, raising the hopes of advocates.  The former vice president’s proposals range from strengthening enforcement against disability discrimination to nearly doubling the Supplemental Security Income (SSI) monthly benefit.

“The Biden-Harris campaign laid out an ambitious plan to meet the needs of Americans with disabilities, and it is our sincere hope to see that plan carried out and fully implemented,” the National Disability Rights Network said in a news release.

In May 2020, then-candidate Biden released a comprehensive disability rights plan encompassing civil rights and inclusion, health care, employment opportunities, economic security, education, affordable housing, transportation and technology, and global disability rights.  Some of the proposals can be realized upon taking office, while others will require Congressional action.

In regard to actions that can be done on his own, Biden has promised to appoint a White House director of disability policy. He plans to implement a long-standing proposal to make it easier for people with disabilities to stay independent in their community, and to roll back President’s Trump’s public charge rule, which made it harder for immigrants with disabilities to obtain work permits.

President-elect Biden has also promised to direct his Department of Justice and other federal agencies to reinvigorate enforcement of the Americans with Disabilities Act and other civil rights laws, to review guardianship laws, to protect the rights of parents with disabilities, and to work with police departments to improve how they accommodate people with disabilities. Shifting Medicaid funding away from institutional to integrated services will be restored as an overarching goal. Reasserting affirmative action obligations to people with disabilities, protecting special education students in school discipline hearings, and expanding voting rights are also among the new administration’s goals.

In terms of actions that would require legislation from Congress, President-elect Biden has called for a range of changes to Social Security disability benefits. Specifically, he wants to tie the SSI benefit rate to 125 percent of the federal poverty line, which would effectively raise the average monthly benefit for an individual from $783 to about $1,300.

For Social Security Disability Insurance (SSDI) benefits, President-elect Biden has called for, among other things, ending two burdensome waiting periods: a five-month wait between when recipients are approved for the program and when they begin receiving benefits, and a two-year wait until recipients are Medicare-eligible. To protect these programs’ long-term financial stability, Biden would raise payroll taxes on people with incomes of more than $400,000 and change the way annual Social Security increases are calculated by using a new measurement known as the CPI-E.

On the campaign trail, Biden unveiled a $775 billion plan to assist family caregivers.  “Families are squeezed emotionally and financially,” Biden said at the time. “They need help, but too often they can’t afford it. And the professional caregivers out there, the home health care workers, child care workers … are too often underpaid, unseen and undervalued.”

President-elect Biden has also called on Congress to abolish sub-minimum wages. Nationwide, more than 400,000 people with disabilities are legally paid wages less than the federal minimum wage, as part of a Department of Labor program that awards certificates to employers to hire people deemed otherwise unemployable in the competitive market. Civil rights groups have long characterized the New Deal-era program as exploitative.

To read the full “Biden Plan for Full Participation and Equality for People with Disabilities,” click here.

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Four Ways the Coronavirus Pandemic May Affect Long-Term Care Insurance

The coronavirus pandemic has had a devastating impact on the elderly, particularly those in nursing homes and other long-term care facilities. This has raised questions about how the virus has influenced the costs and provision of long-term care insurance, which covers care in facilities and sometimes at home as well.

If you have a long-term care insurance policy, you may wonder how it is affected by the pandemic. If you don’t have a policy, you may wonder if the pandemic will make it more difficult to get one. An article by US News and World Report, examines issues with long-term care insurance that have arisen in the last few months, including the following:

  • Qualifying for insurance. It is already more difficult to qualify for long-term care insurance the older you get. Because older individuals are at a higher risk for coronavirus, this can affect your long-term care application as well. Some insurers have been limiting applicants’ ages or putting additional restrictions on applicants who have been in contact with the virus. If you had a positive COVID-19 test, you may have to wait for three to six months before qualifying for insurance. These policies vary by company.
  • Premiums. Insurers can’t raise rates for customers due to individual circumstances. To raise rates, insurers must obtain approval from the state and raise them for the entire group. However, if you are considered high risk due to exposure to coronavirus, you may not qualify for the best rates when you first apply for long-term care insurance.
  • Moving out of a nursing home. If you have a policy and want to move out of a nursing home, you will need to check what your policy will pay for. Some policies pay for long-term care in a variety of settings, including home care, but others are more restrictive. On the plus side, you may be able to use your policy to reserve your bed, allowing you to keep your nursing home spot.
  • Home care. If you have a policy that was paying for home care, there may also be changes. Some home care workers are charging more for work during the pandemic, which could exceed your policy coverage. Another change may be to the number of people entering your home. You may want family to provide care, rather than an outside home health care worker. Unfortunately, most long-term care policies don’t pay for family members to provide care. However, if you aren’t using the insurance to pay for care, your coverage may last longer–depending on the policy.

There are lots of uncertainties regarding long-term care, insurance, and coronavirus. To read the full US News and World Report article about what we do know, click here.

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When Buying a Medigap Policy, It Really Pays to Shop Around

Medigap policies that supplement Medicare’s basic coverage can cost vastly different amounts, depending on the company selling the policy, according to a new study. The findings highlight the importance of shopping around before purchasing a policy.

When you first become eligible for Medicare, you may purchase a Medigap policy from a private insurer to supplement Medicare’s coverage and plug some or virtually all of Medicare’s coverage gaps. You can currently choose one of eight Medigap plans that are identified by letters A, B, D, G, K, L, M, and N (If you were eligible for Medicare before January 1, 2020, but not enrolled, you may also be able to purchase Plans C and F, but those plans  are no longer available to people who are newly eligible for Medicare). Each plan package offers a different menu of benefits, allowing purchasers to choose the combination that is right for them.

While federal law requires that insurers must offer the same benefits for each lettered plan–each plan G offered by one insurer must cover the same benefits as plan G offered by another insurer–insurers set their own prices for each plan. This means that the price of each plan varies considerably depending on the insurance company.

The American Association for Medicare Supplement Insurance compared costs of plans in the top 10 metro areas and found huge cost differences. Using the most popular plan–Plan G–for comparison, the association found that in Dallas the lowest price for a 65-year-old woman to purchase a plan was $99 a month while the highest price was $381 a month. This is a yearly difference of more than $3,000 for the exact same plan.

The association also found that no one company consistently offered the lowest or highest price. In their study, investigators discovered that 13 different companies had either the lowest or highest price. This means you can’t rely on just one company to always have the better price.

When looking for a Medigap policy, make sure to get quotes from several insurance companies. In addition, if you are going through a broker, check with two or more brokers because one broker might not represent every insurer. It can be hard work to shop around, but the price savings can be worth it.

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