Announcing Our Fall Lecture Series:

12:15, December 5, 2017
“Top Ten Estate Planning Mistakes to Avoid”

12:15, December 12, 2017
“Trust v. Will – Pros and Cons”

12:15, December 19, 2017
“Incapacity Planning – Taking charge before its too late”

All classes are located at the:
Chintimini Senior & Community Center
2601 NW Tyler Avenue
Corvallis, Oregon 97330
Phone: (541) 766-6959

To register please contact Chintimini.


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Is There a Difference Between “Supplemental” and “Special” Needs Trusts?

Have you heard the terms “special” needs trust and “supplemental” needs trust and wondered what the difference is? The short answer is that there’s no difference. Here’s the long answer:

When the field of special needs planning began more than two decades ago, trusts created for people with disabilities were generally called supplemental needs trusts. The thinking was that the purpose of the trusts was to supplement the assistance provided by Medicaid, Medicare, Social Security, Supplemental Security Income and other public benefit programs whose level of support is often meager.

With passage of legislation in 1993 (“OBRA”) authorizing the creation of self-settled trusts (first-party) under 42 USC 1396p(d)(4)(A), some practitioners called for distinguishing between these new trusts and third-party trusts often created by a parent, by calling the former special needs trusts and continuing to call the latter trusts supplemental needs trusts. But this approach never really caught on.

Instead, over time both types of trusts have come under the rubric of special needs trusts and the term “supplemental needs trust” has fallen away. The term “special needs trust” refers to the purpose of the trust — to pay for the beneficiary’s unique or special needs. In short, the name is focused more on the beneficiary, while the name “supplemental needs trust” addresses the shortfalls of our public benefits programs.

Special needs trusts now encompass both traditional third-party trusts and first-party trusts created under OBRA, which are often known as (d)(4)(A) trusts (referring to the statute), or as pay-back trusts (referring to the feature that any funds remaining in the trust at the beneficiary’s death must be used to reimburse the state Medicaid agency), or as self-settled trusts (referring to the fact that these trusts are created with the Medicaid beneficiary’s own funds).

Special needs trusts created with someone else’s funds, whether a parent, grandparent, or someone else, are often referred to as third-party special needs trusts.

In short, the reference to the trusts as supplemental needs trusts rather than special needs trusts is something of a survival. But what’s in a name? Whether supplemental or special, the trusts serve the same purpose of helping meet the needs of individuals with disabilities while still permitting them to qualify for vital public benefits programs.

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In-depth Look at ABLE Account Uses

ABLE (Achieving a Better Life Experience Act of 2014) accounts allow people with disabilities or their families to establish tax-free savings accounts.  These accounts won’t affect their ability to qualify for, or remain on, government assistance as long as the account balance does not exceed $100,000.  Any adult with special needs who owns more than $2,000 in countable assets is generally ineligible for many public benefits programs, including Medicaid and Supplemental Security Income (SSI). But because an ABLE account is not counted as a resource for most public benefits programs, the account provides savings options that can make a big difference to families with special needs children.  Here are five practical uses for an ABLE account that could have a significant impact on a beneficiary’s quality of life:

Protecting UGMA/UTMA account funds: Does your minor child have a savings account? Perhaps gifts from family over the years were deposited into the child’s account? When the child becomes an adult, that bank account will suddenly be counted as a resource for purposes of determining eligibility for many public benefits programs. One practical use of an ABLE account is as a repository for money from an UGMA/UTMA account of a child who is coming of age so that it will not be counted in determining her continued eligibility for public benefits.

Shielding income: Another practical use for an ABLE account is as a receptacle for child support, alimony, or even earned wages. Using an ABLE account for sources of income such as these shields them from being counted as a resource of the child. If more than $2,000 is accumulated by the child over time in an ABLE account, the eligibility for government programs is protected. In addition, an ABLE account is flexible enough that payments deposited into an account can easily be used to pay for many of the expenses a child may have.

Windfalls: An ABLE account can play a beneficial role if your child is expecting to receive a small settlement or award, or even an inheritance or gift. Here’s how this might work for a child receiving, say, a a $150,000 settlement. Although no more than $14,000 can be deposited into an ABLE account each year, and an individual can have only one ABLE account, there are still options. The child could transfer $14,000 into her ABLE account, and a structured annuity could be purchased with the remaining $136,000 that would fund the ABLE account for a certain amount each month so that the total deposited into the account each year would not exceed $14,000.  In this way, a complex special needs trust could be avoided.

Giving the child financial control: It can be frustrating to a competent but disabled adult to lack authority and control over their fiances.   It is important to know that An ABLE account is managed and controlled by the disabled person. An ABLE account gives a competent disabled adult access to money that s/he alone can decide how to spend. Through an ABLE account, the child can decide whether or not to save money for such things as a home, a car, or even a wedding. Note, if a disabled individual is not legally competent or able to wisely manage resources, then  a special needs trust may be a more appropriate option.

Paying household expenses: Another beneficial use of an ABLE account is using it to pay for utilities and other housing expenses without triggering SSI’s “in-kind support and maintenance” (or ISM) penalty that would otherwise be incurred if a third party, including a special needs trust, made the same expenditure. When it comes to  its ISM rules, the Social Security Administration views money in an ABLE account as if it were the SSI beneficiary’s money, so there is no penalty when the recipient of a government benefit uses her own funds from an ABLE account to pay for his/her own housing expenses.

When it comes to planning for your child’s needs, you may wish to consider the advantages of an ABLE in conjunction with other planning choices such as a special needs trust, to craft a strategy that best fits your child’s needs now and in the future.



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Upcoming Classes, Spring 2017

Please join attorney, Kara Daley, for her Spring 2017 Legal Savvy Seminars at the Corvallis Senior Center.

How to Avoid Probate Have you heard a horror story about probate? To find out what’s really involved and how to protect yourself, bring your questions to this brief, funny and insightful class. Th, May 11 12:15 – 1:15 pm Fee: $1.50

Understanding Estate Planning Has Suze Orman or other experts led you to believe you need a will or a trust? Find out what’s actually necessary in Oregon and how to get started. Th, May 18 12:15 – 1:15 pm Fee: $1.50

Care Contracts – Your Obligations Have you or a loved one signed an arbitration contract with a Care Provider? Do you wonder what you’ve signed, or how it works? This is the course for you! Th, May 25 12:15 – 1:15 pm Fee: $1.50

For more information or to register please click here

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Mom’s Dying: How Do I get her Affairs in Order?

Please accept our sympathy even as we recognize your need for plan language. Although this is a difficult time, it is mom’s last chance to straighten out her affairs and there are some things that she may need to do.

During mom’s remaining lifetime, she may need other people to help her with her affairs. Legal authority to act on behalf of another is conveyed through a durable power of attorney. If mom still has legal capacity, she can give power of attorney to a trustworthy family member or friend. A power of attorney can be used to sign contracts, pay bills and manage assets. A power of attorney can be best obtained from mom’s lawyer; however, a Steven-Ness Durable Power of Attorney Form can be a reasonable alternative under some circumstances. If mom does not have capacity and authority to act is needed, a guardianship or conservatorship may be required.

Second, mom should consider formalizing her medical wishes in an advanced directive and possibly a POLST form. An advanced directive is an Oregon statewide form which names a person to make healthcare decisions only when mom is unable to communicate with her doctor. This person is mom’s healthcare agent. The advanced directive also states mom’s wishes regarding life support. The advanced directive is usually obtained at a doctor’s or lawyer’s office or can be found at the secretary of state’s website

A POLST is a physician’s order for life sustaining treatment- colloquially referred to as a DNR, a ‘do not resuscitate order’. This is obtain directly from mom’s doctor and is typically used only when there is a serious illness.

Mom may also wish to understand what will happen to her assets when she is gone. It is a good idea to check in with mom’s attorney soon to make sure her estate plan is functioning properly.  If mom has named a joint owner on her bank account, has made a pay-on-death (POD) designation on a bank account, or has named a beneficiary on an IRA or life insurance policy, then it is important to know that the asset will go to the person named regardless of what mom’s will or trust may say. Only assets without such designations will pass according to mom’s will or trust. If mom does not have a will and dies with assets in her name alone with no beneficiary, then those assets will pass to the beneficiaries via probate. Similarly, keep in mind, all wills also go through probate. If mom wants to avoid probate, she may want to consider a trust.

Please keep I mind that this is very general advise only. To understand the specifics of mom’s situation, it is a good idea to speak with an attorney and identify issues before they become problems.

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The Best Laid Plans….

Have you seen, “Manchester by the Sea?” This sad, cinematic depiction of a father’s death, highlights the need for parents to plan, realistically for their minor children. In the film, the father presumes his brother will act as guardian and trustee for his minor son and executes a well thought out Will but for one central flaw. The father had failed to discuss the plan with his brother who (spoiler alert) ultimately declines to serve as guardian or trustee.  This begs the question:

If you have children under 18, have you made plans for them if the unthinkable occurs?

Have you discussed these plans with the people you hope will fulfill them?

If you have not made plans or you have questions about their fulfillment, take a few minutes to speak with an attorney. Properly planning for your children’s future can save them a life time of regrets.

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Legal Savvy Series: 2016 Classes

How to Avoid Probate: Have you heard a horror story about probate? To find out what’s really involved and how to protect yourself- bring your questions to this brief, funny and insightful class. Thursday, December 1, 2016 at 12:15

Understanding Estate Planning: Has Suzy Oreman or others lead you to believe you need a will or a trust? Find out what’s actually necessary in Oregon and how to get started. Thursday, December 8, 2016 at 12:15

Location: Chintimini Senior & Community Center Fee: $1.50

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The bereaved are often concerned about immediate duties after the passing of a loved one and before their appointment with an attorney.  Here are a few items that the personal representative can start work on:

  • Complete and pay for funeral arrangements (If a person other than the deceased pays for this expense they are allowed to be reimbursement later in probate, but only if there are enough funds to pay other senior creditors first.)
  • Secure the home
  • Check on valuables
  • See to the well-being of any pets
  • If personal property is taken by others after the deceased dies, the personal representative should obtain a receipt from the person holding the property and make sure to let them know that it is not legally their property until authorized in probate proceeding.
  • Exercise due diligence but remember probate takes time, be kind to yourself.
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Probate: Where to Start?

Probate does not begin until paperwork is filed and accepted by the appropriate court.  The paperwork is typically filed by the person named as personal representative.  If there is no will, then the paperwork is typically filed by the person seeking appointment as personal representative*.  The type of paperwork filed, depends upon the value of the assets being probated.  If the value is small, then a Small Estate Affidavit may be used.  If the value is average or above, then a formal Petition is filed.  (See my upcoming blogs for more information on the differences).  A Small Estate Affidavit is intended to be prepared without an attorney, though I often find that legal counsel is needed. A formal probate petition is normally prepared by an attorney.

This paperwork is then filed in the county where the deceased person lived, owned property, or had assets at the time of death.  A formal Petition requests that the court ‘open probate’ or start the probate process and appoint a personal representative.  Once the personal representative is appointed or the Affidavit is accepted, authority is established for the Personal Representative or Affiant to begin the process of dealing with the deceased’s assets and debts.

*(Note: that the term “personal representative” and “executor” are used interchangeably).

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Fall Mini-Series Introduction: What is Probate Anyway?!

Many of my clients come to me with deep concerns about probate.  They wish to either avoid probate having heard many a horror story or they now find themselves enmeshed in probate as the result of a loved one’s passing.  But what they all have in common is the need to understand what probate is so that they can make informed decisions.

In response to this concern, I will be publishing a mini-series of short, easy to read blog posts for the non-lawyer on probate.  For a more in-depth look at probate, please join me for my annual Legal Savvy Seminars offered at the Corvallis Senior Center through Parks and Rec.  The first class will start November 3, 2016 at 12:15. To register or see more class details please go to:

What is Probate?

Probate is itself a legal process with a number of different and sometimes complex steps.  However, a short-cut to understanding probate is to recognize that the goal of probate is to change title on assets from the name of the deceased into the names of the beneficiaries.  In order to achieve this goal, a court provides authority to the personal representative (formally called the executor or executrix) to manage and distribute the deceased person’s property. This is where probate begins.

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