Recently, an all too familiar situation arose again. A client called to say he received his first $1,644 monthly check from the Veterans Administration. He told me this was going to make a big difference in his life. Last year he fell and broke his hip and had to move in with his son and daughter-in-law. The client could no longer live on his own without assistance, but his family is happy to help.

This client contacted our office after being told he did not qualify for VA pension (aid and attendance) benefits.  The person who communicated this to the client said that because he “had not been injured in the war, he was not eligible.” They also said that his income was “just too high.”  Even the VA’s own representatives are sometimes unclear about who qualifies for this underused benefit that gives monthly cash payments to qualified vets.  The person who spoke to this client did not know that all World War II, Korean War and Vietnam veterans are entitled up to $1,644 per month ($1,949 a month if the vet is married) if their doctor says that they need daily assistance for their care. There is no requirement that the veteran be injured while on duty, or even to have served in the war theater.

The VA will also pay a relative to provide this daily in home care (when done properly with the assistance of a VA accredited attorney). The VA will also help pay for assisted living facilities. Often, if a senior combines his Social Security benefits, plus these VA benefits, they can pay for a much nicer assisted living facility than they would be able to pay for on their Social Security alone. Or, be able to afford in-home care and stay at home.

Widows of veterans may also be eligible for up to $1,056 per month to cover similar healthcare expenses. This is only if they did not divorce the veteran, or remarry, and if they remarried their second husband was also a qualified veteran.

In regards to the income limits, many people don’t understand that the veteran’s medical expenses (including a caregiver’s cost, insurance premiums, medical supplies, etc..) are deductible from the vet’s stated income on the benefit application.  So once you deduct the medical expenses from the regular income, many vets do actually qualify.

Here is just a partial list of incorrect statements that have been made in connection with the aid and attendance pension benefit offered by the US government:

• You can’t get VA benefits because you were not injured in combat;
• You can’t get VA benefits because you did not serve overseas;
• You can’t get VA benefits because your assets are too high;
• You can’t get VA benefits because your income is too high;
• You can’t get VA benefits because you are only a widow of a veteran;
• You can’t get VA benefits because you only served in the Merchant Marines;
• You can’t get VA benefits because you only served in the Coast Guard.

I am a VA accredited attorney and I can practice before the Veterans Administration. I am a member of the Academy of VA Pension Planners and work closely with Jim Swain, a nationally recognized expert on VA Pension and Estate Planning.  I can give legal advice regarding how to qualify you for benefits, which may also include the use of estate planning tools (living trusts, irrevocable trusts, gifts, etc..) to help qualify you for your VA pension benefit.  It would take hundreds of thousands of dollars in the bank earning interest to equal these cash income payments available to qualified Vets through the VA Pension program. Be sure you have all the facts on this valuable benefit.

If you call our office we can connect you to one of our case managers who will review the benefits and interview you to determine whether you qualify for the pension benefit, and how much you are entitled to receive. This is a free call.  There is no risk and no obligation. Let us see if you have benefits that you are not taking advantage of, after all – you earned them!

Call Shawn McCammon, local attorney and principal of Liberty Law, APC., at the Redding (530.246.1152) or Red Bluff office (530.529.4329) to get your free evaluation started today! Every day you wait could be money lost.

The hard part is done. Your estate plan has been created, all the documents signed and witnessed and notarized. But wait, you’re not quite done yet—especially if your estate plan includes a trust. The task of funding that trust still remains. Without the completion of this crucial step all of your hard work could be for naught.

Funding is the process of putting all of your property into the trust. Your trust is more than just a piece of paper, it works like a protective box, keeping its contents private and safe from probate; and funding is the process of filling that box. Without funding, your trust is just an empty box, and doesn’t provide much protection at all.

The first question you may ask is “what should go into the box”? The easy answer is EVERYTHING. Start by asking your attorney to create a deed to help you put your home into your trust. For most people, their home is their greatest asset, and the first and most important to put into the protective box.

The next step is to go to your bank and investment advisor and put your bank accounts and stocks or investments, and any other immediate assets into the name of your trust. To do this you will need your Certification of Trust, which is a short document proving the existence of your trust. Your attorney can provide you with copies of your Certification of Trust.

The third step is to look at all of your tax-deferred assets such as retirement accounts, 401(k) accounts, or life insurance policies. These tax-deferred assets cannot be owned by the trust, but to ensure that the proceeds of these assets are distributed according to your wishes you will need to make your trust the primary beneficiary of the accounts or policies. By doing this you are arranging to funnel the proceeds of these assets into the protective box when the time comes. But keep in mind that not all tax-deferred assets are created equal—ask your advisor before placing these into the trust.

Your last step is to execute a comprehensive transfer document, a simple document stating your desire to put all small or tangible property such as furniture, artwork, antiques, etc., into that protective box, and be considered trust property, rather than subject to probate.

Of course every estate will be different; ask your attorney for a comprehensive list of assets to put into your trust. It is only once you’ve tucked all your assets away under the protection of your trust that you can finally breathe that final sigh of relief.

Everyone who kept up with the recent changes in the estate tax laws—and the flurry of speculation, news stories and blog posts that came with it—knows just how important estate taxes are to estate planning. Although we make it clear on our blog that estate planning should be at least as much about family and personal legacy as it is about money and taxes, the truth is that much of the technical planning that goes into creating your estate plan is hugely affected by the estate tax laws and regulations.

This is why we thought our readers might like to have a little sneak peek at what you might owe in estate taxes were you to pass away under the current laws. SmartMoney.com recently published an interactive Estate Tax Calculator which can help estimate the amount you might owe based on your current financial information.

Although it is certainly interesting to see what you may end up owing in estate taxes, and it is absolutely helpful to see a list all of your assets and liabilities in one place, please remember that what this calculator provides is only an estimate. There is more to estate tax calculation and estate planning than can be provided in one form. What we hope is that this calculator may pique your interest, and inspire you to contact our office for the more thorough planning you and your family deserve; planning based on face to face discussions about your unique goals and situation.

Every new project has to begin somewhere, and most newcomers to estate planning choose to begin with a will and a trust. This is because wills and trusts form the foundation for how your property will be distributed, how your heirs will be cared for, and how the probate process and estate taxes will be handled.

A will is the most well-known of all estate planning documents, it is generally the simplest and easiest to create (although some wills can be very lengthy and complex), and in most states a will can contain within it instructions for peripheral topics such as guardianship of minor children or the final disposition of your remains.

But everybody knows that the main purpose of a will is usually to dispose of your assets and effects. In its most basic form, a will should include these important parts:

* The testator’s (creator’s) name and crucial information

* Nomination of an executor to carry out the wishes of the testator

* The naming of the beneficiaries

* Instructions as to how the estate should be distributed to the beneficiaries

* Signature of the testator and the date signed

* Signature of witnesses and the date signed

As mentioned above, this is a will in its most basic form, but in fact most wills will also contain instructions for probate, instructions regarding the payment of debts and taxes, the names of any organizations to receive charitable distributions, a mention of relatives who may purposefully NOT have been named, and more.

Because a will can be so basic, many people believe that a will can easily be created on one’s own, without the help of an estate planning professional; in fact, there are plenty of companies who offer “Do It Yourself” will creation software for a fee. However, it is important to understand that while a will itself can be very simple; the federal and state tax and probate laws are rarely so. If you feel your estate is small and your wishes are modest then by all means keep your will short and sweet as well. However, we strongly urge ALL of our readers (even those with small and simple estates) to have an estate planning professional at least review your will and advise you as to its validity before you sign it and tuck it away.

In addition to a will many families will choose to also create a trust. We’ve said it before on our blog and we’ll say it again: It doesn’t matter whether you’re a billionaire business executive or a teacher with a modest salary, it doesn’t matter whether you’re the patriarch of a large family or a stay-at-home mom of a newborn, a revocable living trust may be exactly what your family needs to protect their assets and their best interests. This is because a trust is probably the most comprehensive and versatile tool in your estate plan, and is a key part of helping you accomplish your goals.

There are two basic kinds of trusts—revocable and irrevocable. Revocable means that it is able to be revoked or changed so long as the grantor (the person who created the trust) is still living. Logically enough, an irrevocable trust cannot be changed once it has been signed. The reason this question of revocability is so important is because a trust is not merely a set of instructions for how your wealth should be distributed, a trust actually owns the property placed within it, with the person or people serving as trustee (usually for a revocable trust this is the grantors themselves, while they are living) controlling the trust property within. It is for this very reason that trusts can be such a powerful and flexible tool for tax planning and estate planning.

The specifics of your trust will vary greatly depending on what you hope to accomplish. Parents of young children may wish to include a general trust for the benefit of all the children, with distributions made to the guardians as necessary. This general trust can be split into separate individual trusts when all of the children have reached a certain age or graduated from college. Parents (and often grandparents) may want to include education trusts under the umbrella of their revocable living trust. Many families feel it is important to include instructions for charitable giving in their estate plan, and may choose to set up a charitable trust with their children or grandchildren as trustees. Pet owners often create pet trusts to ensure that their animals will be well cared after the owner has died.

A trust, much more than a simple will, allows the grantor far greater control over their assets—and for a longer period of time—which is why trusts are particularly useful for anybody entering into a second or third marriage, or for any parent who worries about the choices a beneficiary might make once they come into their inheritance. Unlike a simple will, trusts are designed to withstand the test of time, allowing you to leave a legacy that can last for decades.

Many people would like to think that estate planning is a piece of cake: choose your beneficiaries, write up a simple will, and voila – you’re done! The truth is that while estate planning can sometimes be achieved with this amount of simplicity, most of the time there’s more to it than that—a lot more—especially if you have any variables or special circumstances to consider. Variables and special circumstances can encompass just about anything, including:

* Young children

* Adult children with differing financial needs

* Adult children who don’t get along

* A child, parent or sibling with special needs

* A second (or third) marriage

And according to this article in the Chicago Tribune special circumstances also include:

* A non-citizen spouse

* A much younger spouse

* Health concerns

One of the best tools you have in your estate planning toolbox to deal with any or all of these “special circumstances” is to distribute your assets through a trust rather than just a simple will. A trust is comprehensive, plus it gives you the flexibility to you need to provide for every circumstance—even if these circumstances change after your death.

For example, parents with three children ages 21, 17 and 15 would likely not want to split their estate evenly, especially considering that they’ve likely already paid for the 21-year old’s college education, but have yet to pay for college for the 17 and 15 year olds. These parents can place their assets into a common trust which can be used to pay for the needs of all the children at the discretion of the trustee, and then split into separate and equal trusts when the youngest child reaches the age of 21, or when all have graduated from college.

Very few families fit the simple “boiler-plate” description, and even fewer families will benefit from a boiler-plate estate plan. Our office can help you craft exactly the estate plan you need to fit your family’s unique and special circumstances—right now, and years in the future.

We’ve recently seen a number of news stories with disturbing figures about the rising cost of college education, and the growing inability of graduates to pay off the debt they incur from student loans. In fact, recent studies reveal that student loan debt now exceeds credit card debt in the U.S.!

All of this has motivated many grandparents to find a way to help pay for their grandchildren’s college education. According to this article in the Wall Street Journal “Recent tax-law changes are making it easier for families to help pay education bills for multiple grandchildren and even future generations. But grandparents have to make some tough decisions first.”

For grandparents whose grandchildren are already in school there may be fewer tough decisions to make, these grandparents will find it easy to “pay an unlimited amount of tuition directly to an accredited school for their grandchildren’s education without incurring any gift tax or using their exemption.” Additionally, under the annual gift tax exclusion, anybody—including grandparents—can “give up to $13,000 to an unlimited number of people each year free of tax.”

Grandparents with younger grandchildren are finding that they also now have more options if they want to contribute to their grandchild’s future college education. “Under the Tax Relief Act of 2010, the federal gift-tax exemption increases to $5 million from $1 million for individuals, as does the exemption for the generation-skipping tax… The changes make it easier to pass along money for education to future generations free of taxes—at least through 2012, after which the exemption is scheduled to revert to $1 million.” The only question is how is the best way to set aside the money until the child reaches college age?

The most popular method right now is for the grandparent to set up or contribute to a 529 College Savings plan for their grandchild. “Assets you contribute to a 529 account are no longer part of your estate. If you are the account owner, you can withdraw the assets later without penalty.” However, care must be taken with 529 plans because “When the assets are withdrawn they will be counted [for tax purposes] as the student’s income.”

Other options for savings include “setting up a ‘pot trust,’ or dynasty trust, which names all of the grandchildren, including any future babies, as beneficiaries. The length of such a trust varies by state but generally can serve at least a few generations of college students.” Of course setting up a trust with such a long intended duration means choosing a trustee who is likely to outlive you. Many grantors choose one of their own children (a parent, aunt or uncle of their grandchildren) or a trusted financial advisor, although corporate trustees (such as a bank) are also an option.

If you are interested in contributing in some way to your grandchildren’s college education please contact our office—we can help you understand your options and choose the one that’s best for you and your family.