Critter Corner: Technology to Help Seniors Age-in-Place Safely

What Happens to Your Online Data After You Are Gone?

Q. Our next door neighbor, Joseph, was shoveling … [Read More…]

What Happens to Your Online Data After You Are Gone?

What Happens to Your Online Data After You Are Gone?

Q. Our next door neighbor, Joseph, was shoveling … [Read More…]

New Case Showing Why Domestic Asset Protection Trusts (DAPTs) Don’t Work!

Dr. Charles Dahl and his wife Kim were married for eighteen years. In 2002, Charles executed a trust entitled “The Dahl Family Irrevocable Trust” that named Charles as Settlor, his brother Robert as Investment Trustee, and Nevada State Bank as Qualified Person Trustee. The trust also named Nevada as the domicile (the state where the Dahl’s reside or intend to return to indefinitely) in its choice of law provision, even though Dr. and Mrs. Dahl lived in Utah.

That same year, Charles transferred 97% of Marlette Enterprises, LLC, a Utah limited liability company worth $935,996, to the Trust, keeping 1% for himself and 1% for each of the parties’ two children. A year later, Charles and Kim jointly deeded their primary residence (which cost over $1 million to build) to the Trust.

Charles filed for divorce in Utah on October 24, 2006. While the divorce action was still pending, Kim brought an action against him, seeking a share of the Trust assets, which she claimed were marital property. She argued that the trust was null and void, that she was a settlor, and that the trust was revocable, so that she would have rights to her portion of the primary residence that she deeded to the Trust in 2003.

Kim’s attorney fees and costs up until 2010 were $2,186,568, and initially the district court dismissed her claims. However, on appeal, the court ruled that Kim has the right to revoke the trust as to the portion to which she was the settlor and therefore has the power to take back that portion of the trust assets that were hers, as does Charles. The decision was due to the fact that the state of Utah does not currently have DAPT statutes, and that the state has a strong public policy interest in the equitable division of marital assets. Since the couple resided in Utah, Utah state law applied to the trust even though the stated choice of law in the trust was Nevada.

The Trust was intended to be a DAPT, not a Revocable Trust:

Domestic Asset Protection Trusts, or DAPTs, a spin-off of Offshore Asset Protection Trusts, (OAPTs), were created in 1997 as an effort to retain in the U.S. some of the wealth that had been steadily moving into OAPTs. A DAPT, like the LTP (Living Trust Plus™ Asset Protection Trusts), are legitimately used for asset protection planning to set aside a “nest egg” at a time when the settlor either does not have existing liabilities or such liabilities are covered by other assets. Most creditors cannot reach property in a DAPT, unless that property was fraudulently transferred to the trustee. I say “most creditors,” because this DOES NOT INCLUDE MEDICAID.

The DAPT Doesn’t Work

In the Dahl case, “The Dahl Family Irrevocable Trust” was intended to be a DAPT, given that it was established under Nevada law, with a Nevada co-trustee, has the word “Irrevocable” in its name, has the word “Irrevocable” in Section 5.5, and every other aspect of the trust appears to be what would generally be done with a DAPT. However, the Utah Court ruled that it was not a DAPT, and it was determined to be a revocable trust. A

A DAPT does NOT provide Medicaid Asset Protection:

Therefore, as I have been preaching for years, if you are considering a DAPT, take extreme caution, because this is a perfect example of why a DAPT simply can’t be counted on to work. Moreover, even if a DAPT did work as intended, the huge problem with DAPTs, which makes them essentially useless for a client or attorney desiring complete asset protection, is that these a DAPT is absolutely ineffective for Medicaid asset protection purposes. Complete asset protection includes Medicaid Asset Protection, as Nursing Homes are the most expensive and most likely creditor that most people will ever face.

Below is a quick comparison of the DAPT vs. the LTP:

Settlor as Trustee
All DAPT statutes prohibit the settlor from serving as trustee of the DAPT, though the settlor may serve as an investment advisor with specific veto powers
The settlor of an LTP may serve as the trustee of the LTP
Residence of Trustee
All DAPT statutes require that the trustee (individual, trust company, or bank) be a resident of the DAPT state.
Under the Uniform Trust Code, the trustee of an LTP need not be a resident of the trust situs, but must merely have a connection with the designated trust jurisdiction
Location of Trust Assets
Most DAPT statutes require that a percentage of the trust assets be held within the respective state.
There is no limitation on where the assets of an LTP may be held.
Incorporation of State Law
The trust instrument must expressly provide that the DAPT state’s laws govern the trust, to ensure the DAPT state’s laws will apply if a dispute regarding the DAPT arises.
There is no such requirement governing LTPs. LTPs work in all 50 states for asset protection against normal creditors. They work in all states except Minnesota and Connecticut for Medicaid Asset Protection.
Settlor’s Retained Interests
Most DAPT statutes allow the settlor to retain interests including discretionary distributions of income; discretionary distributions of principal; veto power over distributions of income or principal; and/or limited testamentary powers of appointment.
The settlor of an LTP can retain interests including mandatory or distributions of income; power to remove and replace trustee(s); and limited testamentary powers of appointment. The big difference is that the Settlor of an LTP cannot retain any rights over principal.
Creditors Barred from Recovery and Limited Exceptions
Three types of creditors have statutory authority to attempt to pierce the DAPT and reach its assets: (1) creditors successfully alleging fraudulent transfer; (2) a spouse or child; and (3) tort claimants with torts arising on or before the date of the transfer to the trust.
Creditors cannot pierce the LTP to reach LTP assets in satisfaction of any judgment, although creditors can reach all of the income generated by the trust assets. There are no statutory or common law exceptions.
Trust Protectors
In a typical DAPT, a trust protector or independent trustee has absolute discretion concerning whether to make distributions to the settlor. This is important to prevent the settlor from being able to force distributions to himself.
Although a trust protector is not required in an LTP, it is typically recommended, and can be important for tax reasons if the trustee is also a beneficiary and the LTP authorizes the trustee to make distributions of trust principal to himself.


Understanding Living Trust Plus™ (LTP) Medicaid Asset Protection Trust:

The Living Trust Plus™ (LTP) functions much like a Revocable Living Trust and maintains much of the flexibility of a Revocable Living Trust, but protects one’s assets from the expenses and complexities of probate PLUS lawsuits PLUS nursing home expenses while the creator of the trust is alive. The LTP protects the trust creator’s assets from lawsuits, medical expenses, and — most importantly for the 99.8% of Americans who are NOT among the ultra-wealthy — from the devastating costs of nursing home care.

For most Americans over age 65, an LTP is the preferable form of estate planning and asset protection because for purposes of Medicaid eligibility, this type of trust is the only type of self-settled asset protection trust that allows a settlor to retain an interest in the trust while also protecting the assets from being counted by state Medicaid agencies. For 99.8% of the population, why have an asset protection trust at all if you’re not protecting your assets from the devastating costs of nursing home care?

If you’re a client or potential client who would like more information about Living Trust Plus™, please register for one of our upcoming Living Trust Plus™ informational seminars. Our seminars teach attendees how to protect their assets from the expenses of probate and long-term care, how to obtain valuable Medicaid and Veterans benefits to pay for long-term care, how to protect assets from lawsuits, divorce, and long-term care creditors, and more. Reserve your spot today or call one of our offices to make an appointment for a no-cost consultation.

Fairfax Elder Law: 703-691-1888
Fredericksburg Elder Law: 540-479-1435
Rockville Elder Law: 301- 519-804
DC Elder Law: 202-587-2797

Critter Corner: Alzheimer’s Accountability Act Signed Into Law

Dear Ernie and Jannette,

I heard that the Alzheimer’s Accountability Act was signed into law recently as part of a federal funding bill. Does this mean more money for Alzheimer’s research?


Nida Cure-Now

Dear Nida,

Sadly, Jannette has gone to froggie heaven, so it is just me answering your question. – Ernie

Alzheimer’s is the only one of the top 10 causes of death in America that cannot currently be prevented, cured, or even slowed. And if a cure or a way to prevent Alzheimer’s isn’t found, in 2050, up to 16 million Americans will have Alzheimer’s disease, creating an enormous strain on the health care system, families, and the federal budget. Due to this growing crisis, Congress unanimously passed and President Obama signed into law the Alzheimer’s Accountability Act (S. 2192/H.R. 4351), as part of a federal funding bill.

To achieve the progress this disease requires, scientists need the necessary funds to carry out critical research. The new law accomplishes the following:

  • It requires scientists at NIH to submit an annual Alzheimer’s research budget proposal directly to Congress and the President, specifying the resources needed to fully implement the National Alzheimer’s Plan without political and budgetary restrictions.
  • It helps provide a complete view of what they believe is needed each year in order to effectively prevent and treat Alzheimer’s disease by 2025, helping Congress to make more informed funding decisions.
  • The new spending bill also includes a $25 million increase for Alzheimer’s research, which follows a $122 million increase for Alzheimer’s research, education, outreach and caregiver support made earlier this year.

A diagnosis of Alzheimer’s disease or any other type of dementia is life-changing for both the diagnosed individuals and those close to them.

Elder Law and Medicaid Asset Protection Experts

The attorneys and staff at the Farr Law Firm are experts in Elder Law and Medicaid Asset Protection. Please call them at 703-691-1888 in Fairfax, 540-479-1435 in Fredericksburg, 301-519-8041 in Rockville, MD, or 202-587-2797 in Washington, DC to make an appointment for a no-cost consultation.



How Close Are We to a Cure for Alzheimer’s?

Q. I just found out that my favorite Aunt, Norma, is in the early stages of Alzheimer’s. I was heartbroken at first, but am optimistic that with all the research being conducted, we could be close to a cure. Sure enough, this morning I was on Facebook and saw a post about a study where memory loss associated with Alzheimer’s was reversed in humans. Have you heard anything about this or other similar studies, and do you think it sounds promising?

A. Since it was first described over 100 years ago, Alzheimer’s disease has been without an effective treatment.  However, researchers are working tirelessly to translate research advances into improved diagnosis and care for people with Alzheimer’s disease, while focusing on the long-term goal of finding a  cure and possibly preventing Alzheimer’s.

Below are two recent studies that I have read about, with the first one probably being the one you referenced in your question:

  • Participants: 10 participants, who had problems with memory and disorientation. Six of the patients had discontinued working or had been struggling at their jobs at the time they joined the study.
  • Description: Researchers used a 36-point therapeutic program that involved comprehensive diet changes, brain stimulation, exercise, sleep optimization, specific pharmaceuticals and vitamins, and multiple additional steps that affect brain chemistry.  The patient in treatment the longest has been receiving the therapy for two-and-a-half years.  Bredesen’s approach is personalized to the patient and may include:
    • eliminating all simple carbohydrates, gluten and processed food from the patient’s diet, and eating more vegetables, fruits and non-farmed fish
    • meditating twice a day and beginning yoga to reduce stress
    • sleeping seven to eight hours per night
    • taking melatonin, methylcobalamin, vitamin D3, fish oil and coenzyme Q10 each day
    • optimizing oral hygiene using an electric flosser and electric toothbrush
    • reinstating hormone replacement therapy which had previously been discontinued
    • fasting for a minimum of 12 hours between dinner and breakfast, and for a minimum of three hours between dinner and bedtime
    • exercising for a minimum of 30 minutes, four to six days per week
  • Findings: Nine of 10 participants showed marked improvement in their memories beginning within three to six months. In addition, all six patients who had discontinued working, or had been struggling at their jobs, were able to return to their jobs or continue working with improved performance, and their improvements have been sustained. One patient who had been diagnosed with late stage Alzheimer’s did not improve. Dr. Bredesen said the findings are “very encouraging,” but he added that the results are anecdotal, and a more extensive, controlled clinical trial is needed.

Study 2-  Ashwagandha, an herbal remedy that’s been used in Eastern medicines for centuries

Muraleedharan Nair, a chemist at Michigan State University, has created a botanical compound, withanamides, which incorporates an herbal remedy called Ashwagandha.

  • Participants: So far, it has only been tested on mice, but clinical trials on humans are anticipated.
  • Description: Alzheimer’s begins when a specific protein starts breaking and producing unwanted fragments that put stress on a cell’s membrane, spark plaque formation, and eventually kills the cell. This attack begins in the frontal lobe, erasing memories and continuing deeper into the brain. The compound in this study was created to keep the bad protein from entering the cell where it does its damage.
  • Findings: Nair and his collaborators found that withanamides protected mouse brain cells from beta amyloid protein (BAP) damage and passed the blood brain barrier, the filter that controls which chemicals reach the brain. The results showed that the compound reached its intended target, passing the last test before advancing to human testing.  While plants cannot be patented, compounds from it can. Michigan State University holds the patent for withanamides, and earlier research revealed that the compound, found in the plants’ seeds, proved to be a powerful anti-oxidant — double the strength of what’s on today’s market. The potent compound has shown that it can protect cells against damaging attacks by a rogue protein – which is what happens in the early stage of Alzheimer’s.

There are many more research studies being conducted and, like you, I am hopeful that these studies will yield a breakthrough soon. For more details on Alzheimer’s research, visit Please also follow us on Twitter (@ElderLawExpert), as we post about new research and breakthroughs often. Please also read our blog post, “Is Alzheimer’s in Your Future?,” for additional details on strides that are being made in treatment and prevention of the disease.

Medicaid Planning for Alzheimer’s

A diagnosis of Alzheimer’s disease is life-changing for both diagnosed individuals and those close to them.  While it’s never easy to think about, if you have a loved one who has been diagnosed with Alzheimer’s, it’s imperative to make an appointment with a Certified Elder Law Attorney such as myself, to determine who to name to make legal, financial, and medical decisions when your loved one is no longer able to do so. In addition, if your loved one hasn’t done so already, it is also of utmost importance to determine how he or she will pay for long-term care without financially bankrupting the family.

Medicaid Asset Protection

People with Alzheimer’s live on average four to eight years after they’re diagnosed, but some may live 20 years beyond their initial diagnosis. Do you have a loved one who is suffering from Alzheimer’s? Persons with Alzheimer’s and their families face special legal and financial needs. At The Law Firm of Evan H. Farr, P.C., we are dedicated to easing the financial and emotional burden on those suffering from dementia and their loved ones.  If you have a loved one who is suffering from Alzheimer’s or any other type of dementia or memory loss, we can help you prepare for your future financial and long-term care needs.  We help protect the family’s hard-earned assets while maintaining your loved one’s comfort, dignity, and quality of life by ensuring eligibility for critical government benefits such as Medicaid and Veterans Aid and Attendance. Call us at 703-691-1888 in Fairfax, at 540-479-1435 in Fredericksburg, at 301-519-8041 in Rockville, MD, or at 202-597-4847 in Washington, DC to make an appointment for a no-cost consultation.

Non-Borrowing Spouses Can Still Face Eviction Due to Previous Reverse Mortgage Rules

Amy (59) and her husband, Frank (66), decided to get a reverse mortgage, sometimes known as an HECM (Home Equity Conversion Mortgage), last summer to supplement Fred’s Social Security. Amy was left off the reverse mortgage, due to her age. Later, she and her husband read about how a change has been made to the rules that requires underwriters to consider the age of the non-borrowing spouse, due to surviving spouses facing eviction. Now, Amy is concerned about what would happen if Frank predeceases her and she has to pay back the loan right away. She can’t believe the bad luck she and her husband are facing due to the fact that their loan was originated a month before the rules changed, and is stressed that one day she may be left homeless.

A reverse mortgage allows a homeowner who is at least 62 years old to use the equity in his or her home to obtain a loan that does not have to be repaid until the homeowner moves, sells, or passes away. Typically, the homeowner receives a sum of money from the lender, usually a bank, based largely on the value of the house, the age of the borrower, and current interest rates. As you can see from the example above, many reverse mortgages originated before August 2014 did not take into account the age of the younger spouse in calculating the benefits. Therefore, once the borrowing spouse dies, the surviving spouse has a tight window to pay off the loan or face foreclosure. An unknown number of spouses could face eviction.

In January 2015, HUD proposed a way for surviving spouses to keep their houses tied to reverse mortgages originated prior to August 4, 2014. However, for this to happen, the servicer has to agree to assign the loan to HUD, rather than go forward and foreclose on it. Also, the surviving borrower had to be either older or the same age as the deceased borrower when the loan was originated, or the spouse has to pay off the loan amount or 95 percent of the home value. Few surviving spouses can come up with a lump sum to pay off the loan within the tight window.

AARP and its lawyers are trying to make a case that a spouse can stay no matter what and advocating for widows and widowers who are facing foreclosure. In fact, recently, AARP Foundation Litigation has filed a class-action suit on behalf of all widowed homeowners who faced hardship when mortgage lenders foreclosed on their homes.  AARP’s lawsuit alleges that “[a] multitude of surviving spouses of reverse mortgage borrowers are now facing foreclosure and displacement from homes they expected to live in for the rest of their lives.” According to AARP attorney Jean Constantine-Davis, it’s likely that thousands of widows and widowers are or will be affected by this regulation. That’s why the new suit, citing the federal appeals court decision, has been filed a class action – to help as many of them as possible.”

Reverse Mortgage Rules are Tightened

Starting April 27, 2015, additional rules regarding reverse mortgages (HECMs or Home Equity Conversion Mortgages) will be tightened, making it harder for some seniors to qualify for these types of mortgages. The new rules are an effort to strengthen the federal HECM program, which insures almost all reverse mortgages and which has seen default rates rise. The following are some of the changes that were made, that take affect next month:

  • Financial Assessment: Borrowers are now required to undergo a financial assessment to ensure they can make insurance and property tax payments. The applicant’s credit history, debt structure, Social Security and other sources of income will be examined. Previously, only the value of the home, the current interest rate, and the age of the borrower were considered. If a lender determines you are a risk to default on insurance or tax payments, you may be required to set aside money to make those payments.
  • New Maximum Loan Amount: Before the new rules, homeowners had the choice of two programs: HECM standard, which allowed for higher loans, and HECM saver, which had smaller loans and smaller fees. The government has merged these two programs, and the new maximum loan amount is about 10-15% less than in the standard, but slightly higher than in the saver.
  • Higher Upfront Fees: Previously, the upfront fee to take out an HECM standard was 2% of the property’s value, while a HECM saver was .01%. The new fee is .5% on smaller loans, but individuals who take out a loan that is more than 60 percent of their home’s value will pay a 2.5 % fee.

Reverse Mortgages and Medicaid Eligibility

Keeping money in a reverse mortgage line of credit in Virginia, and in most other states, will not count as a resource for Medicaid eligibility purposes so long as the house itself is an exempt resource. For Medicaid payment of long-term care in Virginia, the applicant’s principal residence is excluded from countable resources for the six months of continuous institutionalization provided the applicant intends to return home and provided the equity in the home property does not exceed $536,000. Regardless of the amount of home equity, after six months of continuous institutionalization the nursing home resident’s home will become a countable resource, unless the home is occupied by a spouse, dependent child under age 21, or a blind or disabled child.

However, transferring the money from the reverse mortgage line of credit to a bank account and leaving it there past the end of the month would convert the exempt home equity into a countable resource and therefore would affect Medicaid eligibility. This important distinction between countable resources and exempt assets is not a simple black and white issue — if you or your loved one is facing the possible need for long-term care or thinking about getting a reverse mortgage, you should get an opinion from a qualified elder law attorney, such as myself.  Call us at 703-691-1888 in Fairfax, at 540-479-1435 in Fredericksburg, at 301-519-8041 in Rockville, MD, or at 202-597-4847 in Washington, DC to make an appointment for a no-cost consultation.

Critter Corner: Does a 529 College Plan Count as Part of My Assets When Determining Medicaid Eligibility?


Dear Saki and Alley,

I would like to set up a 529 College Savings Account for my granddaughter, Emma. If I need long-term care in the future, will the plan be counted as part of my assets?

Thanks for your help!

Mona E. Savin

Dear Mona,

One major drawback to setting up a 529 plan in your name is that if you need nursing home care in the future, the 529 plan that you have set up for your grandchild could destroy your eligibility for Medicaid. Because you control the account and have the right to cancel the account and take the money out, the government considers your 529 plan a “countable asset.” That means you’ll be required to use that money to pay for your long-term care expenses before you qualify for Medicaid.

Since everyone might need to apply for Medicaid in the future, you should consider contributing to an account in someone else’s name as the custodian/contributor/account owner for your grandchild, such as Emma’s parent (your son or daughter). That way, the plan won’t be considered a countable asset for purposes of Medicaid for you, and will likely be used up by the time your son or daughter needs Medicaid.

However, even this strategy won’t get you off the hook entirely. When you apply for Medicaid, the state will review your finances during the previous 60 months. Any gifts made during this so-called “look-back” period, including contributions to a 529 savings plan, could hurt your eligibility for Medicaid benefits. This problem is exacerbated If you plan on making regular, ongoing contributions to a 529 savings plan for your grandchild, because each contribution you make would be new gift that would begin a new 60-month look-back period.

An effective way to prevent this from happening is by setting up an irrevocable trust, such as The Living Trust Plus™ and making the contributions to the 529 plan from the trust. The Living Trust Plus™ functions very similarly to a revocable living trust and maintains much of the flexibility of a revocable living trust, but protects your assets from the expenses and difficulties of probate PLUS the expenses of long-term care while you’re alive, PLUS lawsuits and a multitude of other financial risks during your lifetime. You would make a one-time gift to the trust, starting the 5-year lookback period, and you’re your future contributions from the trust to the 529 plan would not count as new gifts. Please note this is the “short version” – the actual mechanics are a bit more complicated.

The Living Trust Plus™ Asset Protection Trust protects your assets (including the money in the 529 plan) from lawsuits, auto accidents, creditor attacks, medical expenses, and — most importantly for the 99% of Americans who are not among the ultra-wealthy — from the catastrophic expenses often incurred in connection with nursing home care.

If you would like more information about the Living Trust Plus™, please contact us for an appointment, or click here to register for one of our upcoming Living Trust Plus™ informational seminars.


Saki and Alley


Can Stipulations in a Will be Changed 100 Years Later? Maybe — Read About The Sweet Briar College Nightmare


Sweet Briar College in Amherst, VA (picture from News 3- Hampton Roads)


Q. I visited my niece, Natalie, last year at the picturesque Sweetbriar College, a liberal-arts women’s institution in rural Virginia. I am a history buff and I remember during a tour of the campus they mentioned how more than 100 years ago, the land was left by the plantation owner’s daughter to honor the memory of her own daughter. She stipulated in the Last Will and Testament that the land cannot be sold, and must be used as an educational institution for women. Unfortunately, the college is shutting its doors. Can what is said in a Last Will and Testament be modified under these circumstances? Thanks!

A. Sweet Briar College’s 3,250-acre campus, located in the foothills of the Blue Ridge Mountains, was once the site of a tobacco and corn plantation. As you mentioned, in 1900, Indiana Fletcher Williams, whose father ran the plantation, bequeathed the land to form the college in memory of her daughter Daisy, who had died at 16 and never had a chance to attend college. She stipulated that that the institution would exclusively serve white women.

Now, the school serves all women, and once considered admitting men, as well. However, it took years of legal work just to change the Will to integrate the school in the late 1960s, a decade after Brown v. Board of Education. According to faculty, an additional change to Williams’ will to admit men would have been a legal nightmare.

Although Sweet Briar College has a ninety four million dollar endowment and has been soliciting and collecting donations right up until a few weeks ago, the college’s board voted this year that the college will be closing it’s doors. Despite the endowment, Sweet Briar, like similar private colleges around the country, had been facing mounting costs, and it was becoming difficult to attract enough students, especially ones who could afford the school’s full admission price of $47,095 a year.

Williams’ Will stipulates that the land is in a restricted charitable trust and that “[n]o part of the said Sweet Briar Plantation and the two tracts of land adjoining . . . shall at any time be sold or alienated by the corporation, but it shall have the power to lease or hire out such portions thereof as may not be directly needed for the occupation of the school and its surrounding grounds.” Therefore, the college cannot sell the land to pay off debts without prior court approval, and it may be extremely difficult to gain this approval because of the stipulation in the Will.

Recently, Virginia State Senator Chap Petersen (D-Fairfax), whose grandmother was an alumna of Sweet Briar, sent a letter to Attorney General Mark Herring regarding the legality of closing of the college. He inquired about the rights of the donors who made gifts to the institution and whether they are eligible for a refund, the obligation of the school to existing students, and what will happen to the land. He is still awaiting an answer to his first two questions, but there is some clarity on what can happen to the land.

A Possible Solution

The legal doctrine of Cy Pres ( is a doctrine that originated in the law of charitable trusts, but has been applied in the context of class action settlements in the United States. When the original objective of the settlor or the testator became impossible, impracticable, or illegal to perform, the cy-pres doctrine allows the court to amend the terms of the charitable trust as closely as possible to the original intention of the testator or trust settlor to prevent the trust from failing. So, in the case of Sweet Briar College, a court could rule that the land be sold and proceeds be given to another woman’s college, for example. We don’t know what the outcome will be for sure, but we at least we know there are options.

What Can We Learn from This?

We don’t know what the future will bring, but it is always important to plan for contingencies. A lesson we can take away from this is to make sure we have our estate planning documents in place, and they are updated regularly (at least every 1-3 years, depending on the document) and contain several options for different situations that could possibly occur. This is the only way to ensure that your estate plan truly reflects who you are, what you care about, and what you have. Should changes need to be made after the fact, it may be difficult, but at least you have the peace of mind that during your lifetime, you planned for every possible contingency.

Just as a car needs regular maintenance, your estate planning documents need to be updated or redone, especially if it has been more than 5 years since you have done so. The list below pinpoints certain examples of events that could have a significant impact on your estate:

  • You get married or divorced
  • Your spouse dies or becomes incapacitated
  • You become ill or disabled
  • You have a new child
  • Your child marries or divorces
  • Your child becomes ill or disabled
  • You have a new grandchild
  • One of your beneficiaries shows signs of being financially irresponsible
  • One of your beneficiaries develops a drug or alcohol problem
  • The value of your assets has significantly increased or decreased
  • You retire or change employment
  • You acquire property in a different state
  • You move to a different state
  • There have been changes in the law (which you’ll find out about by always reading our newsletters!) that may affect the language of your documents.

Even if no changes are necessary, you should annually sign updated Powers of Attorney, because some financial institutions won’t accept a Power of Attorney more than a year old. Similarly, the older an Advance Medical Directive is, the less likely it is that it will be honored by a doctor or hospital.

Don’t let too much time pass between reviews of your plan. The cost of a review is minimal; but the cost to your family if you neglect your plan could be disastrous.  If any of these changes have happened to you or if you haven’t updated your estate plan in the last few years, the time is now. Call us at 703-691-1888 in Fairfax, at 540-479-1435 in Fredericksburg, at 301-519-8041 in Rockville, MD, or at 202-597-4847 in Washington, DC to update your estate plan! Ask about The Farr Law Firm’s Lifetime Protection Program, which ensures that your documents are properly reviewed and updated as needed, so that they will have the proper effect under the law.

Families in Turmoil Over Alzheimer’s Care — Glen Campbell

He’s Disabled But Has Full Mental Capacity- Why Can’t He Initiate His Own Trust?

Q1.My friend, Ken, is physically disabled, but has … [Read More…]

Critter Corner: Pooled Special Needs Trusts

Dear Commander Bun Bun,

I am considering a pooled special needs trust (managed by a non-profit organization) for my daughter, Shannon, who is intellectually disabled. What are some of the benefits and limitations?


Sheena Eads-Attrust


Dear Sheena,

Pooled third-party trusts are an alternative to setting up your own special needs trust if you can’t come up with a good choice for trustee or if you are only putting a modest amount of assets into the trust.

They can be advantageous because the people managing the trust and its assets are typically attuned to the special needs community and knowledgeable about agency rules regarding SSI and Medicaid programs. In addition, even if you don’t have a lot of money to leave to your loved one, a third-party pooled trust provides a way to benefit from a special needs trust without having to create one yourself.

Pooled trusts are not for every family. Why?

  • Some non-profits end up doing a bad job managing pooled trusts or may even go out of business altogether.
  • Some pooled trusts distribute assets only at certain times of the month. This can be a problem for a beneficiary who may need distributions more frequently.
  • Generally, there is a one-time setup fee that can run from a few hundred dollars to several thousand dollars. Plus, there is typically an annual fee that is based on a percentage of the assets that are put into the trust that can be several thousand dollars a year.
  • Once the assets are in the pooled trust, it is difficult to move the assets to another trust.
  • Some pooled trusts will not agree to own real estate or authorize other nontraditional investments.

Before you sign on with a pooled trust, it is wise to explore your options. Read more on our website. Please call us at 703-691-1888 in Fairfax, 540-479-1435 in Fredericksburg, 301-519-8041 in Rockville, MD, or 202-587-2797 in Washington, DC to make an appointment for an initial no-cost consultation

Hop this was helpful!

Commander Bun Bun

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