2019 Estate Planning Guide

The Messenger-Inquirer’s

ESTATE PLANNING 2019 GUIDE

See inside for valuable advice on topics such as • charitable giving • taxes • beneficiaries • planning help • veterans affairs • caregiving • estate sales and auctions • wealth management • powers of attorney • Medicaid planning and more Friday, May 10, 2019

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Charitable Giving

Use your trust to make a lasting impact C 1 C haritable giving can play an important role in many estate plans. Philanthropy cannot only give you great personal satisfaction, it can also give you a current income tax deduction, let you avoid capital gains tax, and reduce the amount of taxes your estate may owe when you die.

There are many ways to give to charity. You can make gifts during your lifetime or at your SASCHA death. You can make gifts SCHREIBER outright or use a trust.

BB&T You can name a charity as a beneficiary in your will, or designate a charity as a beneficiary of your retirement plan or life insurance policy. Or, if your gift is substantial, you can establish a private foundation, community foundation, or donor-advised fund.

hart

HOW A CHARITABLE LEAD TRUST WORKS (SEE CHART 1)

Chart 2

MAKING OUTRIGHT GIFTS

An outright gift is one that benefits the charity immediately and exclusively. With an outright gift you get an immediate income and gift tax deduction.

Tip: Make sure the charity is a qualified charity according to the IRS. Get a written receipt or keep a bank record for any cash donations, and get a written receipt for any property other than money.

CHARITABLE TRUSTS

Another way for you to make

Example: John, who often donates to charity, creates and funds a $2 million charitable lead trust. The trust provides for fixed annual payments of $100,000 (or 5% of the initial $2 million value) to ABC Charity for 20 years. At the end of the 20-year period, the entire trust principal will go outright to John’s children. Using IRS tables and assuming a 2.0% Section 7520 rate, the charity’s lead interest is valued at $1,635,140, and the remainder interest is valued at $364,860. Assuming the trust assets appreciate in value, John’s children will receive any amount in excess of the remainder interest ($364,860) unreduced by estate taxes.

CHARITABLE REMAINDER TRUST

WILL OR TRUST BEQUESTS AND BENEFICIARY DESIGNATIONS

These gifts are made by including a provision in your will or trust document, or by using a beneficiary designation form. The charity receives the gift at your death, at which time your estate can take the income and estate tax deductions.

CHARITABLE LEAD TRUST

A charitable lead trust pays income to a charity for a certain period of years, and then the trust principal passes back to you, your family members, or other heirs.

The trust is known as a charitable lead trust because the charity gets the first, or lead, interest.

A charitable lead trust can be an excellent estate planning vehicle if you own assets that you expect will substantially appreciate in value. If created properly, a charitable lead trust allows you to keep an asset in the family and still enjoy some tax benefits.

charitable gifts is to create a charitable trust. You can name the charity as the sole beneficiary, or you can name a non-charitable beneficiary as well, splitting the beneficial interest (this is referred to as making a partial charitable

gift). The most common types of trusts used to make partial gifts to charity are the charitable lead trust and the charitable remainder trust.

Note: There are expenses and fees associated with the creation of a trust.

A charitable remainder trust is the mirror image of the charitable lead trust.

Trust income is payable to you, your family members, or other heirs for a period of years, then the principal goes to your favorite charity.

A charitable remainder trust can be beneficial because it provides you with a stream of current income — a desirable feature if there won’t be enough income from other sources.

OWENSBORO ESTATE PLANNING COUNCIL For more than 50 years, this group of professional advisors has met regularly to study and educate themselves on a variety of estate planning subjects! Please visit the following web address to access a list of our local members.

Jennifer Rone President

Nick Volk Vice President

Heath Greenwell Secretary

HTTP://WWW.NAEPC.ORG/MEMBERSHIP/COUNCIL/610

HOW A CHARITABLE REMAINDER TRUST WORKS (SEE CHART 2)

Example: Jane, an 80-year-old widow, creates and funds a charitable remainder trust with real estate currently valued at $1 million, and with a cost basis of $250,000. The trust provides that fixed quarterly payments be paid to her for 20 years. At the end of that period, the entire trust principal will go outright to her husband’s alma mater. Using IRS tables and assuming a 2.0% Section 7520 rate, Jane receives $50,000 each year, avoids capital gains tax on $750,000, and receives an immediate income tax charitable deduction of $176,298, which can be carried forward for five years. Further, Jane has removed $1 million, plus any future appreciation, from her gross estate.

COMMUNITY FOUNDATION

If you want your dollars to be spent on improving the quality of life in a particular community, consider giving to a community foundation. Similar to a private foundation, a community foundation accepts donations from many sources, and is overseen by individuals familiar with the community’s particular needs, and professionals skilled at running a charitable organization.

DONOR-ADVISED FUND

Similar in some respects to a private foundation, a donor-advised fund offers an easier way for you to make a significant gift to charity over a long period of time.

PRIVATE FAMILY FOUNDATION A donor-advised fund actually refers to A private family foundation is a an account that is held within a charitable separate legal entity that can endure organization. The charitable organization for many generations after your death. is a separate legal entity, but your account You create the foundation, then transfer is not — it is merely a component of the assets to the foundation, which in turn makes grants to public charities. You and charitable organization that holds the account. Once you transfer assets to your descendants have complete control the account, the charitable organization over which charities receive grants. But, unless you can contribute enough capital becomes the legal owner of the assets and to generate funds for grants, the costs and has ultimate control over them. You can only advise — not direct — the charitable complexities of a private foundation may organization on how your contributions not be worth it. will be distributed to other charities.

Tip: A general guideline is that you

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should be able to donate enough assets to generate at least $25,000 a year for grants.

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Taxes

Protect, preserve your estate’s full value How incomplete nongrantor trusts can help avoid state income taxes

BY ALEXANDER THOMPSON ARNOLD PLLC

W

ith the federal gift and estate tax exemption at $11.40 million for 2019, people whose estates are below the exemption amount are shifting their focus to income tax reduction. High-income taxpayers — particularly those who live in high-income-tax states — may want to consider incomplete nongrantor trusts, which make it possible to eliminate state taxes on trust income.

DEFINING AN INCOMPLETE NONGRANTOR TRUST

Generally, trusts are classified as either grantor trusts or nongrantor trusts. In a grantor trust, you as “grantor” establish the trust and retain certain powers over it. You’re treated as the trust’s owner for income tax purposes and pay taxes on income generated by the trust assets. In a nongrantor trust, you relinquish certain controls over the trust so that you aren’t considered the owner for income tax purposes. Instead, the trust becomes a separate legal entity, with income tax responsibility shifting to the trust itself.

By setting up the trust in a no-income-tax state (typically by having it administered by a trust company located in that state), it’s possible to avoid state income taxes. Ordinarily, when you contribute assets to a nongrantor trust, you make a taxable gift to the trust beneficiaries. By structuring the trust as an incomplete nongrantor trust, you can avoid triggering gift taxes, or tapping your gift and estate tax exemption. This requires relinquishing just enough control to ensure nongrantor status,

while retaining enough control so that transfers to the trust aren’t considered completed gifts for gift-tax purposes.

ANALYZING THE BENEFITS

Although the trust will allow you to receive distributions, assets you place in the trust should produce income that you don’t need. If you take money out, trust taxable income could follow to you and be taxed in your state of residence.

Incomplete nongrantor trusts aren’t right for everyone. It depends on your particular circumstances and the tax laws in your home state. While this strategy can produce significant state income tax savings, it may increase federal income taxes, depending on your individual tax bracket.

Nongrantor trusts pay federal income taxes at the highest marginal rate (currently 37%) once income reaches

$12,700 for 2019, while the 37% rate threshold is $612,350 for married couples filing jointly and $510,300 for singles and heads of households.

If you’re not in the 37% bracket, the increased federal income taxes the incomplete nongrantor trust would pay might outweigh the state income tax savings.

Also, if federal estate taxes aren’t a concern now but could be in the future — such as if your estate could exceed the estate tax exemption when it drops to an inflation-adjusted $5 million in 2026, as currently scheduled — be sure to consider the potential estate tax consequences. Incomplete gifts remain in your estate for estate tax purposes.

IS IT RIGHT FOR YOU?

To determine whether an incomplete nongrantor trust is right for you, weigh the potential state income

tax savings against the potential federal estate and income tax costs.

Contact Alexander Thompson Arnold to schedule meeting with one of our trusted business advisors by calling (270) 691-8981.

JONES INSURANCE AGENCY 724 Time Dr. • Owensboro, KY

270-691-9100 www.joneswoolfolkins.com

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Beneficiaries

Maximize your retirement accounts’ benefits Reviewing and choosing your beneficiaries is crucial to your estate plan

D

id you know many of your assets may pass to your heirs outside of your last will and testament? That’s right. Even though you may have recently revised your will, it is important to review your retirement accounts, life insurance policies and transfer-ondeath accounts.

Many account types pass through the account contract and are not subject to the provisions you have within your will. Retirement accounts such as a traditional IRA, Roth IRA, JERRY rollover IRA, 401K, 403b, annuity GOETZ RETIREMENT & and others pass at your death to FINANCIAL STRATEGIES the beneficiaries you have named on the contract. Life insurance passes by the contract as well. Some individuals even set up transfer-on-death language on

accounts they have held outside of their proportioning your estate to current spouses, retirement accounts. children, stepchildren, etc. Having special When you have a change in your personal needs children may also give reason for special situation, it is important to review any accounts planning. and insurance policies in which beneficiaries Retirement accounts have different rules of are named in the contract to be sure your distribution depending upon whom you have desired transition to your heirs named as beneficiar y. If you find Retirement accounts it important that your heirs can is spelled out according to your wishes. Changes such as have different rules of continue to take advantage of tax marriage, divorce, a new child, distribution depending favorability over their lifetime and a new grandchild, death of a next generation’s lifetime, upon whom you have the family member, etc. may create make sure to talk with your named as beneficiary. financial advisor. Your advisor will the need for you to update your beneficiaries. Failure to do so help you understand the options could result in some of your estate passing to that your beneficiaries will be faced with after someone other than whom you desire. your death.

Many times, second marriages that involve Financial advisors do not practice law or draw children from prior marriages give rise to up legal documents; therefore, the best practice special planning needs. Accounts that pass is to allow coordination between your financial by contract may help you in equalizing or advisor and your attorney.

Building Your Retirement Foundation Jerry Goetz CFP®, CFS®, CRPC® www.retirementandfinancial.com View our website!

Visit us at our new office!

Retirement & Financial Strategies 3402 Frederica St. Owensboro, KY 42301 270-215-2600

Jerry Goetz is a registered representative with and securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through Private Advisor Group, a registered investment advisor.

Private Advisor Group and Retirement & Financial Strategies are separate entities from LPL Financial.

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Planning Help

Who can you trust to reduce the stress of estate planning?

BY EDWARD JONES

When it’s time to do your estate planning — and it’s actually never too soon to begin — you may find the process, at first, to be somewhat bewildering. You’ll have many questions: What sor t of ar rangements should I make? Who should get what, and when? How can I address these and other issues?

You’ll need to get some help. In drawing up your estate plan, you will need to work with an attorney. And for guidance on the investments that can help fund your estate planning arrangements, such as a living trust, you can draw on the help of a financial advisor. You also may want to connect with a trust company, which can help facilitate your estate plans and coordinate the activities of your legal and financial professionals.

Of course, you might think that only the ver y wealthy need a tr ust

company. But that’s not really the case — people of many income levels have long used these companies.

As long as you have a reasonable amount of financial assets, you likely can benefit from the various ser vices provided by a trust organization.

These ser vices can range from administration of a variety of trusts (such as living trusts and charitable trusts) to asset-management ser vices (bill-paying, check-writing, etc.) to safekeeping ser vices (such as providing secure vaults for jewelr y and collectibles).

In shor t, using a tr ust company can make things a lot easier when it’s time to plan and execute your estate. A trust company can help you in the following ways: • Avoiding family squabbles — It’s unfor tunate, but tr ue: Dividing the assets of an estate can cause ill will and turmoil among family members. But a trust company can act as

a neutral third par ty, thus minimizing any feelings of unfairness.

• Providing greater control — When you establish an arrangement such as a living tr ust administered by the trust company, you can give yourself great control over how you want your assets distributed. For example, you can specify that a certain child receive por tions of your estate spaced out over several years — a move that may appeal to you if you think this child might not be ready to handle large sums all at once.

• Saving time and ef for t — As mentioned above, when you work with a trust company, you can let it do all the “legwork” of coordinating your plans with your financial professional, tax advisor and attorney. And these professionals are used to dealing with trust companies.

• Gaining protection — T r ust companies assume fiduciar y respon-

sibility for your financial well-being, which means that your best interests will always be considered in each ser vice and transaction performed.

You can choose from among a variety of trust companies, large and small. Before choosing one, you may want to check out the ser vices and fees of a few dif ferent firms. In any case, as you move toward that time of your life when estate planning becomes more essential, talk to your attor ney, tax advisor and financial professional about whether using the ser vices of a trust company might be right for you.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor. Edward Jones, its employees and financial advisors are not estate planners and cannot provide tax or legal advice. You should consult your estate-planning attorney or qualified tax advisor regarding your situation.

Not all wealth is monetary.

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ALEXANDER THOMPSON ARNOLD PLLC 1735 Frederica Street • Owensboro, KY 42301 (866) 827-1577 • www.atacpa.net

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Veterans Affairs

How has the VA pension law changed?

Learn what’s new and how it benefits you

long-term care Medicaid functions. It is not illegal to transfer your assets to your children, but you are likely to incur a disqualification for Medicaid benefits if you do that within 60 n September 2018, the Depar tment of militar y duty and one day of wartime duty. months of applying for LTC Medicaid.

Veterans Af fairs published new rules There had previously been an “asset limit” • Benefit: In the past, I encountered regarding needs-based, non-ser vice in order to obtain these benefits, but it was several clients who had been talked into related benefits for veterans and their ver y vague and open to the interpretation of investing in an annuity or similar type of spouses. As of Oct. 18, 2018, whichever VA adjudicator (claim worker) was financial product in order to remove assets these new rules became law. working on the claim, sometimes resulting from their names and apply for this VA benefit.

Many people do not realize in inconsistent outcomes among similarly However, when their health declined and they that the VA actually has two situated claimants. needed nursing home care, the dif ferent programs under The new rules establish a penalties and surrender charges The VA rules now which a veteran might receive “bright-line net worth limit” for undo these contracts were impose a 36-month to monthly income. The first pension entitlement. The net worth substantial — and unavoidable. In look-back period. program is “Ser vice Connected limit now counts the assets and my opinion, as a Medicaid planner This means any Compensation,” and the second annual income of the claimant and VA benefits agent, this will NICOLE is “Non-Ser vice Connected more similarly to the maximum stop a lot of that from occurring. assets transferred HAWKINS Pension.” Although these “Community Spouse Resource is a huge benefit in protecting within the 36-month This ELDER ADVANTAGE two may sound similar, they Allowance” (CSRA) established by veterans and their spouses from time frame for less predator y practices of some more are quite dif ferent. A claim Congress for Medicaid eligibility. for “compensation” is based on an injur y • Benefit: These two programs than fair market unscrupulous professionals. or illness that can be tied directly to the (VA NSC Pension and Medicaid) All in all, these NSC pension law value will be subject veteran’s active duty ser vice. There are no have always overlapped quite a bit changes will change the way that to a VA-imposed asset/income requirements in order to qualify — but now they are more in line we navigate that benefit system, “disqualification for those benefits. However, a “pension” claim and will be easier to navigate as a but they will entitle many more acknowledges that the veteran had some result. Also, this new “net worth period.” This is very veterans and their spouses to active duty war time ser vice (whether or not limit” is far higher than I would benefits — and we are ready to similar to the way she/he was actually involved in the fighting) have thought possible — meaning help them obtain those benefits. that long-term care and that either the veteran or the veteran’s that MANY sur viving spouses Medicaid functions. spouse (or sur viving spouse) has a need for that I would not have thought Nicole Hawkins is the founder, assistance and medical expenses as a result of eligible for the pension should now president and CEO of Elder Advantage, that need. complete claims as they ARE eligible under LLC and an Accredited Agent with the Department of these new guidelines.

Veterans Affairs. She is also a Certified Senior Advisor Additionally, the VA rules now impose a A CLOSER LOOK AT NSC (CSA) in good standing with the Society of Certified 36-month look-back period. This means any PENSION AND THE CHANGES Senior Advisors and former Owensboro Walk to End Pension benefits provide monthly monetar y assets transferred within the 36-month time Alzheimer’s Chairman. She has been a featured speaker at frame for less than fair market value will be assistance to veterans (or their sur viving the Estate Planning Council of Owensboro multiple times spouses) who have been discharged honorably subject to a VA-imposed “disqualification and continues to be involved with Alzheimer’s support period.” This is ver y similar to the way that from ser vice with at least 90 days of active groups and charity organizations.

I

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ESTATE PLANNING

When it comes to your to-do list, put your future first.

To find out how to get your financial goals on track, contact your Edward Jones financial advisor today.

Tycen R Brock 270-926-7454

Dathan R Deisher 270-684-9738

David W Renshaw, AAMS® 270-684-4150

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CFP®, AAMS® Rusty Burton, AAMS® Financial Mary G Embry, Advisor 270-926-9700 270-684-2316

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2900 Veach Road Ste 1

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Caregiving

Help for those caring for our aging loved ones While caregiving can be an overwhelming storm, services are available to lighten the load

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n my sixteen years of experience is a tremendous understatement. The working in the field of asset daughters, sons, wives, husbands protection and veterans’ and, many times, grandchildren benefits, I have witnessed the and in-laws who have either scenario many times. I have undertaken this task or tried watched my own parents — to assist someone else to do in particular my mother — the same can affirm that this experience it as well. “IT” is an is one of the most difficult over whelming storm, chaos and emotionally exhausting even, of a loved one’s need journeys a person is likely to for not only physical care, encounter in life. but emotional support and At a time in life when NICOLE financial coordination due to things are already busy and HAWKINS hectic, when your loved one a declining physical or mental ELDER ADVANTAGE condition. To say that handling experiences a sudden illness your loved one’s assets (and or injur y that precipitates health care decisions) in the face of a a hospital stay and eventually a need for long-term care is “difficult” “super vised” release back to home, it

can be devastating to realize the true be, to manage the income, bills and nature of that person’s illness and/ resources of an entirely separate or needs for assistance on a daily household in addition to your own. basis. “I just didn’t know it We understand how was that bad” is a phrase It is important to exhausting it is to work that is uttered often in our seek out support a full-time job and still conference rooms. This have to make sure that from groups and home caregiver shifts are kind of incident seems advisors who can covered, medicines are to shine a spotlight on the difficulties that are identify with your correctly distributed and present in day-to-day appointments are unique struggles doctor needs for living for your scheduled and attended as and also offer loved one, which you had needed. no idea even existed. You With all of this on advice and counsel may be wondering who to that will lift your your plate, the added call or where to turn. WE of the extreme spirits and lighten stress UNDERSTAND. cost of long-term care your burden.

So, to all of those for your loved one — caregivers and stand-in whether he or she is in financial quarterbacks — we want a nursing facility or at home — can you to know — WE HEAR YOU. be over whelming. But there is hope, We understand how and we can help you. We have the time-consuming this project can answers that you need.

“Life gets complicated; how can complicated; money I keepLife upgets with the estate taxis tight. I need to get smarter about law changes everyone is talking about?ourI finances need a–plan to protect and taxes.

Not just my family and someone to help for April 15th, but for our future. me make the right decisions.”

Trusted Advisors. Straight Talk.

Honest Answers. No Pressure.

Being pressed to sign now is a good reason not to. Before you sign a contract with a stranger at the door, talk with the friends you can rely on.

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Hilary Clark

Family Advisor at Owensboro Memorial Gardens

Licensed Funeral Service Professional, PreArrangement Specialist

(270) 926-1881

(270) 683-1505

glenncares.com

Alexander spends years preparing for moments just like these.

For tax & financial advice based on exceptional knowledge, experience & education, ask Alexander.

•Need help planning your estate? Ask Alexander •Does your estate plan need amending? Ask Alexander •Looking for gifting strategies? Ask Alexander •Do loved ones need assistance with daily finances and business duties? Ask Alexander •Need Estate and Trust tax preparation? Ask Alexander

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It is important to seek out support from groups and advisors who can identify with your unique struggles and also offer advice and counsel that will lift your spirits and lighten your burden. Helen Keller once said, “Walking with a friend in the dark is better than walking alone in the light.” This is also true of the struggle of the extremely difficult time in life of caring and planning for a loved one.

I often tell my team that our mission in our business is not simply to “do a job” or “earn a fee,” but to change lives. The work we do will make the difference, at times, between a family losing everything (including their minds, maybe) or saving everything. Often, the result is somewhere in between. Yet, we will persevere. We know what is necessary to help you, and we know that you are tired. WE HEAR YOU. Nicole Hawkins is the founder, president and CEO of Elder Advantage, LLC and an Accredited Benefits Agent with the Department of Veterans Affairs. She is also a Certified Senior Advisor (CSA) in good standing with the Society of Certified Senior Advisors and former Owensboro Walk to End Alzheimer’s Chairman. She has been a featured speaker at the Estate Planning Council of Owensboro multiple times and continues to be involved with Alzheimer’s support groups and charity organizations.

ESTATE PLANNING

Estate Sales

Let Owensboro Antique Mall help with estate sales

BY OWENSBORO ANTIQUE MALL

The time comes in life when we are faced with the difficult decision of downsizing our homes or settling the estate of a loved one. At Owensboro Antique Mall, we offer services to assist in both cases. Over the past five years, we have conducted approximately 70 estate and moving sales in this area. Sales are conducted at the home, or items can be moved to our warehouse to be sold.

Items are individually priced and staged in a professional manner using our tables and displays. The length of the sale is determined by the amount of items in the sale. Sales are typically conducted over a four-day period but can go into multiple weekends, if needed. The customer has the opportunity to purchase the item at the tagged price or gamble to see if the item remains once we start discounting prices. Our goal is to achieve the highest prices we can for the seller, but many great buys are

obtained by our loyal customers during our sales.

The tag/estate sale process has been used for many years to liquidate personal property mostly in the South and in large cities. In the five years that we have offered these services, we have accumulated a great following of loyal customers. Sales are advertised in local newspapers, our store website (owensboroantiquemall.com) and through internet sites such as Facebook and estatesales. org. Sales are usually advertised at least a week ahead of time online, and in the newspaper the days of the sale.

The address of the sale is withheld until the actual days of the sale for security reasons. We can assist sellers in making arrangements to clean out the house at the end of the sale by donating unsold items to local charities. Once the sale is over, the seller will receive a check minus our fees within a week.

If you would like to schedule a free consultation about our services, please call Samuel Rafferty at Owensboro Antique Mall at (270) 684-3003.

Owensboro

er 40 Deal Booths

11

ANTIQUE MALL

270-684-3003

500 W 3rd St. • Owensboro At The Corner Of 3rd And Locust

Celebrat in 36 years g !

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Estate Auctions

Facing an estate auction? Be not afraid An auctioneer is the executor’s second-best friend

of the auctioneers in a good auction company have the expertise to create a favorable outcome in the disposal of all of the real estate and personal property done the best job evangelizing people “I don’t want Grandma’s in an estate. toward auctions. things out on the front yard.”

The most successful estate auctions I grew up in an auction family. Every are for those executors who have week, I attended an auction. decided that they want to be certain As far as I knew, everyone “I never thought of of the true worth of the estate — and auctioned everything. At rather than posting “for sale” signs and college and before I moved having an auction — waiting several months or years for back to Owensboro, I saw how will it work?” the sale to be completed, they decide estate property was sold using on the convenience and effectiveness other manners of sale. What I hose are comments and of the one-day event during which all thought growing up as a child questions we hear on a property would be sold at market price. still rings true today — a good regular basis. A good JOHN Sure, there may be cold drinks and auctioneer can be the executor’s auctioneer should understand sizzling burgers served at the auction KURTZ second-best friend, after and be sensitive to the thinking KURTZ AUCTION that is part and parcel of the “event” attorneys and asset managers, behind such notions. We know & REALTY that makes the sale successful. Your when settling the estate. that auctions are a fantastic What may seem as crass and knowledgeable auction staff should solution for executors and for patiently and courteously guide visitors uncaring is actually a professional and most sellers of real estate and other around the property. Those who want logical attitude toward a daunting task assets — perhaps our industry hasn’t to see inside the home are welcome to that is both personal and public. Most

T

take the tour. Others are encouraged to view documents pertaining to the auction and the property.

Before the big day, your auction staff should have blanketed the region with publicity. At some auctions you may hear, “I was hoping there wouldn’t be so many people here,” from potential bidders. Bidders are required to register with the cashier upon arrival to the auction site. This process usually involves providing identification and sometimes a deposit in order to bid.

By the time the auctioneer steps up to the microphone, the place should be buzzing with anticipation and speculation about the auction and the selling price. The bid solicitors take their positions, roll up their sleeves, hand out the remaining brochures and prepare to facilitate, with the auctioneer, the negotiation between buyers and sellers that produce the top

Friday, May 10, 2019 Messenger-Inquirer

bid that the top bidders will pay.

The entire property sells within a matter of minutes. If everyone has done their job, both buyers and sellers will be extremely pleased with the day’s results. Yes, auctions are emotional.

Yes, they can be a little painful. And yes, when they are done right, they are very effective for settling estates.

TRUE MARKET VALUE

Some people incorrectly associate the word “auction” with distressed property. Foreclosure sales and fire sales have been around for years, but so has the sale of prime real estate at auction. For the same reason that thoroughbreds, fine wine, rare automobiles, precious works of art and expensive government assets are sold at auction, so should you, as executor, consider the sale of real estate at auction. Auctions are fair, open and equitable. Another popular benefit to auction is the time factor.

In many markets, the universe of potential buyers for an estate is quite limited — why tax the family’s privacy with the intrusion of tire kickers that can last for months, even years? With an auction, the seller knows that on auction day, most of the hassle is over

ADVANTAGES OF AN ESTATE AUCTION The advantages of an auction to you the executor are clear-cut and especially beneficial in the sale of real estate: • provide excitement, encourage competition and focus attention on a “date specific” sale • mitigate defaults because substantial bid deposits are required • eliminate high carrying costs

• provide an open, fair and nondiscriminatory bidding environment, greatly enhancing opportunities for all purchasers.

• provide immediate confirmation of sale • minimize negotiations between the buyer and seller

• provide a market-based determination of value

• reduce marketing time

• create urgency and energy, a climate that tends to maximize the sale proceeds to the seller

• terms of the sale are already understood and accepted before a bid is placed or accepted.

and the proceeds are received with minimal effort or delay on the part of the executor or the beneficiaries.

One of the other challenges an executor faces with the traditional estate brokerage process is knowing

how much to ask for the property. If the asking price is too high, nothing happens; too low, and the seller will always wonder if he or she could have received more. At an auction, with a dozen or so enthusiastic and

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well-prepared bidders, the bid goes up and up until a true market price is determined.

Should the executor have an “absolute” auction or a “reserve auction”? This author usually recommends the former. In a reserve auction, the seller can refuse to accept the high bid if he or she feels it is not high enough. In an absolute auction, the highest bid automatically becomes the sale price.

Absolute auctions typically attract the most bidders because of the “lure of the bargain,” and they attract serious “moneyed” buyers. The irony is that un-reserved auctions seem to result in the highest sale prices — perhaps due to the increased number of bidders who drive the price to precisely where it should be.

The key to any auction is a massive and thorough promotion and advertising campaign, which typically includes direct mail, newspaper ads, electronic and internet media as well as other avenues.

When faced with assets to liquidate from an estate, call a qualified experienced auctioneer with a good track record. Then, you can relax.

Be not afraid.

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Messenger-Inquirer Friday, May 10, 2019

wealth manaGement

Tips to understanding and building your net worth

M

ost of us deal with money but not everyone has a financial plan. Learning to differentiate between our needs and our wants gives us a beginning point in wisely managing our money.

We should take care of our needs first, then our wants. When we add the dimension of time and become aware of our long-term needs, we begin to understand why we should build wealth.

Perhaps you can CHRISTINA O’BRYAN remember your first BEACON ASSET paycheck. If you were MANAGEMENT young enough to still have your needs provided for by your parents, you may have used your first earnings for a want — perhaps entertainment or just some discretionary spending. You may have been responsible for providing for a need — food, clothing or shelter. When we have the ability to earn money and accept responsibility for our needs, we feel a certain pride in being able to provide for ourselves. Initially, we are more focused on income — how much we make — versus how much we can save.

Some are taught right away that saving money is important. You may have had the privilege of saving your money and accumulating it for a specific purpose. If so, you had a positive net worth from the beginning of your experience in dealing with money. If you save your money from the get-go, you are building an asset.

Eventually your assets include your possessions — your car, your home, other real estate, checking and savings accounts, investments, furniture and personal possessions. Your liabilities or obligations include any debts you incur.

Add up your assets and subtract your debts and you have your net worth.

This is a measure of how much wealth you have accumulated and is useful as a measuring stick for progress in accumulating wealth.

Each time you take a snapshot of your net worth, you can measure your progress or decline from the previous measurement.

You may find yourself as a young

Your first financial goal may be to purchase a car or a home. For either, it is best to have some money set aside to make a down payment. If you save $5,000 to purchase a car and purchase Planning for financial goals requires that you become fully aware of your a $5,000 car, the act of the purchase current financial position. Your net worth is the most important measure doesn’t change your net worth. You for assessing your wealth. have an asset of $5,000 in cash before the purchase and an asset of $5,000 in an automobile after the purchase.

If you save $5,000 to purchase a Why is your net worth house and purchase a $100,000 house, important? Your net WHAT IS worth statement helps you you have also not affected your net 'NET WORTH'? understand your current worth with the transaction. Before the There are three ways to financial situation to better purchase you have a $5,000 asset of increase your net worth plan your financial goals. It Your net worth is the value you get by subtracting over time: increase savings, cash. After the purchase you have an provides a measure of your your liabilities (what you owe) from your assets increase the market value of progress in accumulating asset of $100,000 in the house and a (what you own). It is a common way to measure how your assets, such as a house, financial wealth. Financial liability of $95,000 to the bank. An asset much individuals or businesses are worth. A constant or decrease the amount of goals should work to increase of $100,000 minus a liability of $95,000 your liabilities or debts. increase in net worth reveals a sound financial health. your wealth over time. still equals a net worth of $5,000. This is a simplification, for you will have WONDER HOW MUCH YOU ARE WORTH? transaction costs in each case such as sales tax or sales commission, but Your net worth is the gist here is to understand how the similar to taking a purchase affects your net worth. financial snapshot Different purchases affect your at one point in ASSETS LIABILITIES NET WORTH net worth differently over time. A car time, showing If your assets are greater If your liabilities are greater depreciates in value, whereas a house than your liabilities, then you your assets and than your assets, then you should appreciate in value. As you have a positive net worth. have a negative net worth. your liabilities. move forward as a car owner, the value of your car decreases and thus the value of your net worth decreases. $ WHAT DOES As a homeowner with a mortgage, YOUR NET you must pay the monthly payment $ WORTH MEAN? which decreases your debt and thus Financial Planning: Debt Management: Estate & Legacy Knowing the value of your net worth increases your net worth as long as the Understanding your Understanding the exact Planning: Understanding helps provide the big picture and house keeps its market value. If the current financial situation amount of debt you owe your assets and their an understanding of your current will help set realistic and timeframes, provides current value will house increases in market value, you financial situation. Your net worth financial goals, both longopportunities to improve influence how you can influence many financial decisions can adjust your asset value which will term and short-term. your financial situation. plan your estate. and financial goals, timing and more. also increase your net worth.

Once you can meet your current needs and you become aware that your cash flow is linked to your lifestyle, adult with a negative net worth. If you forward in accumulating wealth if you you may realize that you would like invest in your education and borrow are paying off debt in your spending to stop working or earning money at money to complete a college degree or allocations. If you only make enough some point in the future. Retiring from some other type of vocational training, to take care of current needs, you work is often an individual’s largest and you may find yourself in the position will never move to the stage of saving most challenging financial goal. You of owing more money than you have money and accumulating wealth for must build your wealth to create a cash accumulated in assets. Hopefully, in future needs. flow to meet your needs after you stop this situation, you are able to find If you can meet your needs and working. employment with an adequate income some of your wants, you can begin Learning to save money that will to meet your needs for food, clothing, to focus on saving money for future shelter and debt service. needs. Let’s call this financial planning. grow substantially over time thru investing will get you to a point that You must have the ability or Setting a goal for the future and your money works for you. Building discipline to spend less than you make taking action to achieve that goal is in order to save money. This is true formulating a financial plan. Those who wealth is a learned and intentional habit. You can understand and build at any income level. If you spend all take intentional actions to provide for that you make, you will only move the future will produce the best results. your net worth to achieve your goals.

Understanding your Net Worth

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ESTATE PLANNING

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Estate Gifts

What message is in your estate plan?

No one can define your legacy better than you

I

BY BRENDA KNOLLENBERG

HOSPICE AND PALLIATIVE CARE OF WESTERN KENTUCKY

n my work in the development department of nonprofits throughout the years, I have come across many people who’ve told me, “I don’t have an estate plan.” My response to them is always the same — “Yes, you do! If you don’t determine who should receive the assets from your estate, the Commonwealth of Kentucky determines it for you!” Regardless of the amount of your estate, you are the best person to make the plan!

Many factors determine the course of a person’s estate plan. If you are younger and establishing a plan, you want to make sure your spouse and children are cared for. If you are older, it may be your adult children that you are considering leaving property and assets to. But

planning attorney to make sure your estate plan is sending the message YOU want to your family and friends. They also are familiar with the IRS tax code and can help you determine which assets don’t forget to consider a gift to your favorite would be best left to your favorite non-profit and charity or nonprofit when making your plan! which ones would benefit your family without an You see, these gifts are about more than just added tax burden. Then, let your favorite charity leaving money to a favorite organization; they know that you’ve remembered it in your estate are also about leaving a message: a plan — it will want to make sure it message to your heirs about what’s Regardless of the thanks you now! If you currently don’t been important in your life; a message amount of your have a financial planner, we work with that caring for the future needs of several and would be happy to make a estate, you are your community is important to you; referral for you. the best person a message that helping others is an But don’t wait — whether you are 25, essential part of your life; a message to make the plan! 45, 65, or 85 (or anywhere in between!) that the nonprofit benefiting is an asset the time is now to make your estate to the community and you want them to continue plan and include YOUR message! the great work they are doing long after you are gone. What message is in your estate plan?

Brenda Knollenberg is the Development Manager for At Hospice and Palliative Care of Western Hospice and Palliative Care of Western Kentucky, a 501(c)(3) Kentucky, we recommend that you work with not-for-profit organization which serves patients and families your CPA, financial planner and/or estate in Daviess, Hancock, Muhlenberg and Hopkins counties.

Your gift to Hospice and Palliative Care of Western Kentucky helps us care for future generations of patients in our community.

To learn more- call 270.926.7656.

Thank you for considering a gift to Hospice and Palliative Care of Western Kentucky in your will or estate plan.

hospiceofwky.org

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ESTATE PLANNING

Powers of Attorney

What’s new in the Power of Attorney Act? Legislation adopted in 2018 by General Assembly strengthens agents, establishes clearer guidelines

of attorneys are durable unless one “expressly provides that it is terminated by the incapacity of the principal.”

EXECUTIVE

There are new and significant execution

BY JESSE. T. MOUNTJOY, ESQ. are some important changes for all of you to requirements. The principal’s signature must SULLIVAN MOUNTJOY PSC keep in mind. be signed in the presence of two disinterested owers of Attorney (“POAs”) are vital witnesses. It is important to note that the term tools that are designed to help individuals TERMINOLOGY “disinterested” is not set out in the terminology proactively plan for both short-term and The Act has replaced the “attorney-in-fact” section and will need to be determined by the long-term disability. These tools allow any of terminology with the word “agent.” The Act also preparer. This section goes on to further state the us (the “Principal”) to choose who we want to sets forth the definition of “power to attorney” principal’s signature is presumed to be genuine if make decisions for us if we are to mean a writing or other acknowledged before a notary.

Before the passage of unable to do so and to decide record that grants authority to the extent of the powers we an agent to act in the place of VALIDITY the Act, there were few want to voluntarily authorize if the principal (whether or not The Act provides that powers of attorney statutes in Kentucky that the term “power of attorney” is executed in Kentucky on or after July 14, 2018, and when our disability arises. pertained to powers of POA documents are crucial used). are valid only if they comply with the Act. If the to continued quality of life, “Incapacity” replaces the power of attorney was executed before July 14, attorneys. Many of the Act’s particularly for our elderly and term “disability.”

“Incapacity” 2018, it is valid if it complied with the Kentucky provisions do not change disabled Kentuckians. Because means the inability of an requirements at the time of the execution. The Act they are so vital, we lawyers (and the current Kentucky individual to manage property also provides that a photocopy or electronically laws, but there are some our paralegals) are frequently or business affairs because the transmitted copy of the original power of attorney called upon to draft Powers of individual: has the same effect as the original. important changes for Attorney. (And each of you need • has an impairment in all of you to keep in mind. the ability to receive and to know something about POAs ACCEPTANCE, RELIANCE AND LIABILITY as well.) evaluate information or make The Act defines the ramifications of accepting a On July 14, 2018, our legislature adopted the or communicate decisions even with the use of power of attorney by stating a person in good faith Uniform Power of Attorney Act of 2006, joining a technological assistance; or and without actual knowledge may presume the long list of states who have enacted this uniform • is missing; detained, including principal’s acknowledged signature The Act also offers act (the “Act”). The Act is now contained in KRS incarcerated in a penal system; is genuine. It further releases Chapter 457. or outside the United States and liability for a person in good faith protection for good The Act was created to give a durable power unable to return. and without actual knowledge if the faith acceptance as of attorney in a modest-cost, flexible form that “Principal” is defined as an of attorney is void, invalid or well as consequences power encourages acceptance by third persons while individual who grants authority to terminated, or if the scope of the for refusing to accept agent’s authority is exceeded. providing clearer guidelines for agents. The Act an agent in a power of attorney. also offers protection for good faith acceptance as the power of attorney. The Act mandates acceptance of well as consequences for refusing to accept the DURABILITY acknowledged powers of attorneys power of attorney.

KRS 386.093 required a power of attorney by financial institutions and further imposes Before the passage of the Act, there were few to state “(t)his power of attorney shall not be penalties for refusing to accept the power of statutes in Kentucky that pertained to powers of affected by subsequent disability or incapacity of attorney. The penalties include a court order attorneys. Many of the Act’s provisions do not the principal, or lapse of time.” Under the Act, this mandating acceptance and liability for attorney change the current Kentucky laws, but there language is no longer necessary. Now, all powers fees and costs incurred from the proceeding.

P

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Messenger-Inquirer Friday, May 10, 2019

Family Dynamics

How to prepare when an aging loved one moves in

N

o man or woman, regardless of his or her age, wants to consider that a day may come when they need to rely on loved ones to help them perform everyday activities. But every day tens of millions of people serve as unpaid caregivers for their aging friends or family members.

A 2015 survey from the National Alliance for Caregiving and AARP found that approximately 34.2 million people had provided unpaid care to an adult age 50 or older in the last 12 months. Many unpaid caregivers are pulling double duty, caring for their aging parents while also raising families of their own.

While there’s no guarantee that aging loved ones will require care, caregivers figure to become more necessary as life expectancies increase. In fact, recent years have seen the senior population in the United States exceed 50 million for the first time in the country’s history, and figures from the U.S. Census Bureau suggest that figure will continue to rise until 2029.

People preparing to welcome an aging loved one into their homes may wonder how to make that transition go smoothly, especially if they have young

children at home. The following are some tips that can help families prepare to welcome an aging friend or family member into their homes.

• Speak with your loved one’s physicians: Speak with an aging loved one’s physicians so you can get a complete picture of their physical and mental condition. This can give you an accurate depiction of how much care your loved one needs now and how much they might need in the future if

their condition worsens.

• Discuss forthcoming changes as a family: Once you gain a full understanding of your loved one’s physical and mental condition and before this person moves into your home, discuss it with your family. Adding a new member to your household will affect everyone, so each member of the family, including young children, should be included when discussing how the family dynamic will change.

Parents must recognize that even young children may be asked to make sacrifices to accommodate aging loved ones. Explain these sacrifices in advance and how important it is to make an aging loved one feel welcome when they move in.

• Discuss conditions with children: Children may recognize their grandparents or elderly loved ones have physical limitations, but they likely won’t understand conditions such as dementia or Alzheimer’s disease. Parents can ask a physician about how to explain cognitive decline to young children. Children may not recognize cognitive decline as readily as adults, so parents may need to discuss these conditions with their children periodically and/or if the conditions worsen.

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ESTATE PLANNING

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Planning Help

When planning, your best asset is peace of mind Let a trusted team of professionals guide you through the process

concern these assets to share with a trust professional.

estate encompasses ever ything that you own, STEP 2: ENLIST THE HELP OF A whether you are 100 percent vested or only TEAM OF TRUST PROFESSIONALS a part owner. Create a preliminar y catalog No matter how large or how modest your lanning for the future can be a trying of your assets, including any retirement, assets may be, enlisting the help of a team of time, full of obstacles that could leave you pensions, insurance or other contractual assets trust professionals can help ease the burden paralyzed in the planning process. Add you have, so you can of ensuring that your challenging family circumstances or a child with begin thinking about who Estate planning is about so much wishes are carried out special needs, unique assets or complicated you want to receive that where your estate is more than monetary belongings; business arrangements, and you could find asset after your passing. concerned. A confidential, it is about taking the legacy you have free consultation with yourself avoiding it all together. Estate planning In doing so, consider is easier digested when broken down into steps whether the beneficiar y is built and passing it on to your loved a trust professional can — ones that you can start taking now to help you capable of managing it or shed light on things ones, knowing that you have a plan often feel secure in your plan to care for your loved ones if they will need assistance you have not considered. in place to fit your personal situation. Your estate encompasses long after you are gone. in handling the asset.

If you own a farm or ever ything that you own any other type of business, think about how STEP 1: MAKE A LIST — your car, home, real estate, life insurance you would like for your life’s work to create a OF ALL OF YOUR ASSETS and personal possessions. But it can also legacy for your family. It can also be beneficial include things like a family business, land, Assets are anything that has monetar y to determine the value of your various assets value and typically falls into two categories: timber, natural resource interests and other as well, particularly if they are hard to value. cash and cash equivalents, such as stocks, unique assets that may often be forgotten in Finally, gather any supporting documents that bonds or mutual funds, and property. Your the planning process. And with those assets

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SENIOR TRUST OFFICER INDEPENDENCE BANK

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Friday, May 10, 2019 Messenger-Inquirer

comes valuations, tax decisions, leasing contracts, collection of income and so many other responsibilities that a trust team can help you sort through.

It is also important to consider the experience and expertise of a trust team.

Look for an entity comprised of a diverse group of professionals, such as certified financial planners, tax professionals and lawyers who can provide a full gamut of ser vices that are necessar y to handle the most unique assets and the most complex personal circumstances. Integrity is another important characteristic to look for in a trust team because often times your trust professionals are also acting as agents to assist your family members in management of your assets in your absence. That’s why it is important to find a team who is looking to uphold your goals for your assets for your loved ones.

STEP 3: CREATE A PLAN

Once you have identified your assets, meet with an attorney to establish a will or living trust. These testamentar y documents provide instructions as to how your assets should be handled after your death and help insure that your assets do not pass by default in a way you may not intend. Review your life

insurance, IRAs, retirement accounts or any other payable on death asset to make sure your beneficiar y designations fit with your overall estate plan.

Don’t let your unique assets and family circumstances paralyze you in planning for the future. By identifying your goals for your loved ones, and determining a clear path to achieving those goals, you can take the daunting task of estate planning and make it achievable. And financial partners like Independence Bank are here to help. Our team has years of experience dealing with unique assets and unique family situations.

Independence Bank is uniquely positioned to assist you by offering a diverse team of professionals with the expertise to cater to all of your needs. Our team believes in doing what is right and fair for our clients and will make your goals our priority while maintaining the level of professionalism and confidentiality that you desire in a financial partner.

Estate planning is about so much more than monetar y belongings; it is about taking the legacy you have built and passing it on to your loved ones, knowing that you have a plan in place to fit your personal situation.

After all, peace of mind is the best asset to have.

ESTATE PLANNING

ESTATE PLANNING FYI • Assets are anything that has monetary value and typically falls into two categories: cash and cash equivalents, such as stocks, bonds or mutual funds, and property.

• Create a preliminary catalog of your assets, including any retirement, pensions, insurance or other contractual assets you have, so you can begin thinking about who you want to receive that asset after your passing. In doing so, consider whether the beneficiary is capable of managing it or if they will need assistance in handling the asset.

• If you own a farm or any other type of business, think about how you would like for your life’s work to create a legacy for your family.

• No matter how large or how modest your assets may be, enlisting the help of a team of trust professionals can help ease the burden of ensuring that your wishes are carried out where your estate is concerned.

• Integrity is an important characteristic to look for in a trust team because often times your trust professionals are also acting as agents to assist your family members in management of your assets in your absence.

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22 ESTATE PLANNING

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23

Medicaid Planning

Why an elder law attorney is the best choice Be on the lookout for unscrupulous organizations during your search for help

and Tennessee have already issued regulations and identifying information. The courts have long stating that many areas of Medicaid planning protected lawyer-client confidentiality, but that by non-lawyers is the unlicensed practice of law. same amount of confidentiality is not present when Florida has gone even further, ruling it can also be dealing with information revealed to a non-lawyer. the unlicensed practice of law for a lawyer to draft Furthermore, an attorney only has a duty of loyalty living trusts and other legal documents for such to the client. Non-lawyers may also have to consider non-lawyer organization’s clients. The Kentucky the best interest of the nursing home. Many times,

BY KURTIS M. SUNSET Bar Association is currently reviewing similar the interest of the nursing home in keeping a WESTERN KENTUCKY ELDER LAW PLC complaints. resident on private pay is not in line with the client’s any seniors and their families have initial Hiring an elder law attorney is the best option best interest. Finally, in a worst-case scenario, a fears of hiring an attorney for Medicaid when considering cost effectiveness lawyer, unlike non-lawyers, carries planning due to the potential cost or the and the ability to legally preserve malpractice insurance that will help Additional perks of negative stigma of litigation. With these fears in assets. Generally, at a cost of less a mistake. hiring an attorney over remedy mind, some seniors might try to plan alone or rely than two months of private paying a Many elder law attorneys give a non-lawyer include on the advice of the nursing home, which often nursing home, an elder law attorney a free consultation. Seniors should leads to an unfortunate situation of dwindling down will help prepare the legal documents client confidentiality, no take advantage of this consultation assets until there is nothing left to preserve. Some to preserve most, if not all, of a fully understand the necessity conflict of interest and to seniors may try to utilize an industry of non-lawyers person’s hard-earned assets. Elder of hiring an attorney over trying to malpractice insurance. take on Medicaid planning alone or called “elder counselors” or “certified senior law attorneys are able to directly advisors” to assist with the Medicaid application draft the necessary legal documents with the help of a non-lawyer. After process. While the appeal to use such organizations such as qualified income trusts, personal service becoming fully informed, seniors will be happy might be a slightly cheaper cost, the truth is these contracts, wills and power of attorney documents. with their choice to use an actual attorney for this non-lawyer organizations often cost more in the Many of these documents are time sensitive and process. The marketing gimmicks of non-lawyers in long run due to the cost of unnecessary products, should not be outsourced due to the unique needs the Medicaid planning process are simply not worth creation of tax liabilities and issues of improper of each client. the risk. planning that cause costly litigation.

Additional perks of hiring an attorney over a Some states have banned such Medicaid non-lawyer include client confidentiality, no conflict Kurtis M. Sunset, a graduate of Emory University School planning practices by non-lawyer organizations of interest and malpractice insurance. During of Law, is an associate attorney at Western Kentucky Elder due to the resulting harms poor advice can have on the process of Medicaid planning, seniors must Law PLC. He formerly served on the board of trustees for the seniors and their families. Florida, Ohio, New Jersey reveal a list of their monetary assets, real estate University of Louisville.

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Avoid draining your assets through health care costs Consider a Medicaid plan if you are privately paying for nursing home care

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BY DARRON L. BRAWNER

WESTERN KENTUCKY ELDER LAW PLC

oo many nursing home residents ultimately end up spending all of their assets privately paying for nursing home care. Medicaid planning is an area of law in which elder law attorneys advise clients about how to legally use Medicaid laws to their own advantage to qualify clients for Medicaid benefits. A good Medicaid plan allows clients to preser ve their assets for their spouse or children while qualifying themselves for Medicaid to pay for nursing home care.

Many people falsely believe that,

once a person is in a nursing home, you through this process because it is too late to do Medicaid planning. the nursing homes and Department However, ever y person in a nursing for Medicaid Ser vices do not always home who is privately paying for tell families about the exemptions nursing home care needs or how to obtain the Many people falsely exemptions. For most a Medicaid plan before all of their assets are married persons, an believe that, once a exhausted. law attorney can person is in a nursing elder For married persons, use the Medicaid laws there are many important home, it is too late to to preser ve most all do Medicaid planning. of the assets for the protections that can be used to make sure that community spouse. the spouse who is not in the nursing For single individuals, Medicaid home (“community spouse”) does laws do not allow as many not become impoverished. There are exemptions. However, an elder many exemptions the state allows for law attorney can use a divestment a community spouse. It is important plan that I call the “half-a-loaf” plan. to have an elder law attorney guide Under the “half-a-loaf” plan, an elder

law attorney uses gifting laws to the client’s advantage and is able to legally protect typically half of an institutionalized person’s assets for the client’s children.

There is no need to spend all of your assets privately paying for nursing home care. If you are or someone you know is privately paying for nursing home care, they need to contact an elder law attorney for a Medicaid plan. Without a Medicaid plan, all assets could be ultimately exhausted paying for nursing home care.

Darron Brawner is the founder of Western Kentucky Elder Law, PLC, an accredited attorney with the Department of Veterans Affairs and a member of the National Academy of Elder Law Attorneys.

24 ESTATE PLANNING

Messenger-Inquirer Friday, May 10, 2019

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