Estate Planning Law Firm of Louisiana

Busy (But Exciting) Couple Of Weeks

It's been a hectic couple of weeks at our office lately.

• 4/5/08 - Seminar and Book Signing at Barnes and Noble. Lots of people showed up. In fact, Barnes and Noble had loaded up on books for the book signing, and they called today for another big shipment.
• Weekend of 4/5/08 and 4/6/08 - My five kids had a total of 16 ball games during the weekend. This doesn't have much to do with my office work, but I thought I'd add it because it was a record number of games for one weekend.
• 4/9/08 - First ever "Free Living Will Wednesday." We had a steady stream of folks come into the office to get their free Louisiana Living Will Declaration. It was a pleasure providing this free service. Several attendees, however, realized that they needed additional estate planning legal services so we'll be working with those folks in the upcoming days.
• 4/10/08 - Seminar at new Livingston Parish library. Good crowd. Lots of questions. In fact, one of the attendees came by the office the next day to have me help him settle his dad's revocable living trust that had been established many years ago.
• 4/13/08 - It's the birthday for my star paralegal, Stephanie Purdy. On 4/16/08, I'm taking the whole office out to lunch to celebrate.
• 4/14/08 - We enrolled over a dozen new members in our VIP Membership so our best clients (and their families) can get Preferred Client treatment for the rest of their lifetime. Ask us about our VIP Membership.
• 4/19/08 - The big Life After 50 Expo is coming up. I'll be presenting in the Main Exhibit room. I expect a lively audience. I'm giving away my book to the first 75 in attendance. Better get there early.
• 4/23/08 - New Medicaid Planning Seminars at our office (10:00am) and the Baton Rouge Garden Center (6:30pm). Brand new material based on newly issued Medicaid regulations. Seating is limited so make your reservation by calling Laura at 225-329-2450.

I heard a quote today that I liked, "If you want to make a difference, be different." There's not another business in the world that combines our attributes. You'll find our group courteous, exciting, friendly, progressive, hard-working, intelligent, professional , loyal, and committed.

You may the subject of estate planning is rather bland, but we've got some exciting and incredible stuff coming up that will do wonders for families in Louisiana. Stay tuned!

Paul Rabalais

Children From A Prior Marriage? Protect Your Life Insurance

It used to be that the traditional estate plan was the one where you had a married couple and all of the children were born of that one marriage. Today, it seems that the majority of estate plans involve spouses - and one or both of them have had children from a prior marriage.

Worked with a couple today. One of their main concerns was to protect the life insurance - and their estate - for (1) their surviving spouse; and then (2) for their respective children.

Here's the problem. Husband dies and leaves his $1,000,000 life insurance policy to his wife. After Husband dies, Mom applies for and receives a check for $1,000,000 from the life insurance company. When Mom later dies, she leaves this money - and the rest of her estate - to "her" children. Husband's children are left with zippo.

What the solution? Perhaps Husband should have left the life insurance to a trust. Wife could be the trustee of the trust and Wife could use the principal for her maintenance and support. But the trust would provide that when Wife later dies, the trust principal reverts back to Husband's children.

Want to know how to protect your estate for your children from a previous marriage, just send me an e-mail to paul@rabalaislaw.com, or give my office a call at 225-329-2450. Make sure you tell my law firm's receptionist that you read about this on my blog. Until next time...

Paul A. Rabalais

Importance of Estate Planning Amplified When There's A Second Marriage

Had a fantastic estate planning meeting today. My new client wasn't sure if it was the right time to start estate planning, but I assured her it was (actually anytime is the right time to plan). She wanted to make certain that her children would inherit from her - as opposed to her step-child.

We used usufruct, and we left things in trust for the children. We named an executor, a trustee, and a power of attorney. She seemed pleased with the outcome and I look forward to providing this service to her over the next couple of weeks.

If you want to know how estate planning can help you and your family, drop me an e-mail at paul@rabalaislaw.com. Or, give me a call at (225) 329-2450. If you call, make sure you tell our awesome receptionist, Laura, that you read about me on the blog. Thanks.

Paul Rabalais

Cleaning Up Old Medicaid Planning Mistakes

Met with a family today. It was another case of bad Medicaid Planning gone worse. A short while back, Mom transferred her house to her children, and took a demand note for the purchase price. Now, Mom has a little cash left, and she owns this negotiable promissory note. Mom is now in the nursing home blowing through the cash.

Unfortunately, the Louisiana Medicaid Eligibility manual could not be clearer. Mom's negotiable promissory note is a resource. Even after Mom spends down all her cash, she still won't be eligible for Medicaid because she owns this promissory note.

What's the solution? Good question. We think we can salvage about half of what Mom owns, but it will take a lot of work. It would have been much better if Mom and her daughters had engaged in some intelligent Medicaid planning five years ago. But, as often the case in Medicaid planning and in life, hindsight is 20/20.

If you or a loved one wants to know how to protect assets from rising nursing home costs, send me an e-mail at paul@rabalaislaw.com, or give me a call at (225) 329-2450. If you call, make sure you tell Laura that you read about me on the blog.

Paul Rabalais

Another Speaking Engagement Tonight

I spoke at the new Livingston Parish library this evening. They had a couple of my books on their shelf and they called and asked if I'd come speak to their community about estate planning.

The facility was awesome and the crowd was great. Many of the pre-seminar questions had to do with living wills, powers of an executor, benefits of trusts, tax consequences of trusts, estate tax, and probate avoidance.

All in all, it was a good evening.

Paul Rabalais

Make gifts to your child - save $3.625 million in tax

Was working with a family this week. The parents want to do whatever they can legally do to avoid federal estate tax. We don't know what Congress will do with the estate tax in the future, but let's assume they keep it. Let's look at how much estate tax savings would result from making annual exclusion gifts to your child.

Let's say the parents are 50 years old. They start now by giving $24,000 annually to their child - or to an irrevocable trust for the child's benefit. Let's further assume that the child (or the trustee) invests the gifted funds and earns a 10% investment return. If the parents continue the annual gifting at $24,000 per year and die at the age of 85, and assuming the child or trustee continues investing the gifts, then when the parents die, the child (or the trust) will have assets totalling $7,251,508. If those assets would have remained in the parents estate - and if the estate tax rate was 50% - then the family saved over $3,625,000 in federal estate tax.

We work with people in our office who like avoiding tax. If you want to know how you can legally and ethically plan ahead and provide for your children and grandchildren, then give me a call at (225) 329-2450, or send me an e-mail at paul@rabalaislaw.com

Paul Rabalais

Personal Care Agreement Effective Medicaid Planning Tool

Was working with a family over the past few days. The children were taking care of their mother. The mother had Alzheimer's. The family did not know what to do because every nursing home that the family visited told the family that Mother would have to spend all of her savings and sell all of her property (especially the property that was not Mother's home) before qualifying for Medicaid.

It's a common concern. Many people would say she has to transfer her assets and wait five years before qualifying for Medicaid. But what if the family does not have five years to wait.

A possible solution. Since the kids are working their tails off - keeping their Mother 24 hours a day in their residence, Mother can pay the children pursuant to a very carefully worded Personal Care Agreement. One slip up here and Mother won't ever qualify for Medicaid.

We figured out that in a few short months, Mother will qualify for Medicaid and most of Mother's savings and real estate will be preserved. If you want to know how a Personal Care Agreement, or other Medicaid planning options might benefit your family, give us a call at (225) 329-2450, or drop me an e-mail at paul@rabalaislaw.com

Paul Rabalais

Teleseminar a Big Success

Hosted a teleseminar last Thursday to teach listeners the new Medicaid Eligibility Rules issued last month by the Louisiana Department of Health and Hospitals. I spend most of the teleseminar reviewing both the rules that have not changed, along with the important new rule changes. As expected, the important component now is to PLAN EARLY!

How early? Well, even under the new rules, you can protect your entire estate if you engage in the proper planning at least five years before you need Louisiana long term care Medicaid. If you don't have five years, you can still protect a large part of your estate using newly created Medicaid planning tools we developed since these new rules have been enacted.

Thanks to Roland Cheramie for his comments after the teleseminar: " Joyce and I would like to thank you again for the excellent presentation.  This was a great review, and also an update on current activities, new regulations etc.  It is also refreshing listening to others share questions. This presentation was very professional, and easy to understand this complicated process.  We viewed your outline on our computer monitor, and listened on our amplified speaker system in the convenience of our family room.  What a way.....great job.....lets have more in the future.!"

If you'd like us to make you aware of future educational presentations, and include you in our e-newsletter, Your Estate Matters, simply send me an e-mail at paul@rabalaislaw.com, or give us a call at 225-329-2450.

Paul Rabalais

All You Ever Wanted To Know About the Detailed Descriptive List

Yesterday, I wrote a chapter of my new book. I don't yet know what the name of my book will be but the content will be based on settling an estate in Louisiana. There's so much confusion out there among the general public regarding how estate's get settled, so I'm writing a book (my 2nd) to help people like you eliminate confusion.

The chapter that I wrote yesterday was all about what's called the "Detailed Descriptive List." It is probably the most important legal document prepared after a person dies. It's a detailed list of all the assets and debts that the deceased had on the date of his or her death. Assets included on the detailed descriptive list include:

• Lousiana real estate
• Bank accounts
• Investment accounts
• Vehicles
• Business interests

Certain assets are excluded from the Louisiana succession and are typically omitted from the detailed descriptive list. These omitted assets include:

• Out of state real estate
• Individual Retirement Accounts (IRAs)
• 401(k)s
• Life insurance
• Annuities
• Co-owned U.S. Savings Bonds

Too many detailed descriptive lists are prepared in error from the start and then we have to go to court to fix them. Make sure you get it right from the start. If you want to know more about how a succession works, or if you'd like me to answer any questions you have, send me an e-mail at paul@rabalaislaw.com, or give me a call at my office at (225) 329-2450.

Until next time...

Paul A. Rabalais

Louisiana Revamps Medicaid Eligibility Manual

On February 7, 2008, the Louisiana Department of Health and Hospitals reissued many relevant provisions of the Medicaid Eligibility Manual, replacing provisions that had been in effect since October 1, 1995. The changes are sweeping and much-anticipated. The revisions adopted many of the provisions of the Deficit Reduction Act of 2005, and made changes retroactive back to February 8, 2006.

Relevant changes include:

1. The look back date for transfers occurring on or after February 8, 2006 is 60 months;
2. For Medicaid applications on or after November 1, 2007, use $4,000 as the average monthly private pay cost;
3. The penalty period for assets transferred on or after February 8, 2006 for less than fair market value begins the month the applicant is determined eligible for Medicaid except for the transfer of resources;
4. If a transferred resource is returned, Medicaid will treat the resource as not having been transferred.

The new Louisiana Medicaid rules make it more difficult to protect your assets from the cost of long term care. I have to admit that the rules (particularly the one that provides that all transfers made since February 8, 2006) are subject to the 60 month look back date) are more stringent than what many other states have done.

My advice to most is the same: "If you want to protect all of your hard-earned assets from the rising cost of long term care, take the necessary action at least five years before you need Medicaid benefits."  If you want to know how the new Louisiana Medicaid eligibility rules affect you or your family, simply send me an e-mail at paul@rabalaislaw.com, describing your assets and income and any other particulars you feel are relevant, and then see how quickly I respond with some answers for you.

Paul A. Rabalais