Age 70 1/2 Confusion for Retirement Accounts

This article from the Slott Report,, concisely explains the rules regarding when you have to take your first Required Minimum Distribution. Besides the Slott Report, another great resource for retirement planning is Appleby Retirement Consulting Inc. Of course, the primary source materials for this area of the law is Employee Retirement Income Security Act (ERISA) and related portions of the Tax Code and Public Health Service Act (PHSA) but working your way through this area can be difficult.

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Nadeau v. Thorn, MA SJC-12205

MA Supreme  Judicial Court appeal hearing in Nadeau V. Thorn. 1-5-2017.

Summary: Administrative Law; MassHealth Benefits– Whether the settlor is entitled to MassHealth long-term care benefits where the settlor’s former residence is held in an irrevocable trust.

This is an important case and the hearing is worth listening to.

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As Ming Ming on the Wonder Pets says (I am  the parent of 2 toddlers), THIS IS SERIOUS…a ten year lookback period for MaineCare Planning, block grants (when the State’s money runs out, MaineCare eligibility runs out). The long-term care planning landscape is likely to change significantly. We’ll keep you posted:

In response to questioning by senators, President Donald Trump’s pick to run the Department of Health and Human Services (HHS) said that the right to Medicaid could end under a block grant system.

As reported by CNN, in a contentious hearing before the Senate Finance Committee, Sen. Robert Menendez (D-N.J.) noted that Medicaid is currently an entitlement program under which anyone who meets eligibility criteria has the right to be covered.

“When you move to a block grant, do you still have the right?” Menendez asked the HHS nominee, Rep. Tom Price (R-Ga.).

“No,” Price replied. “I think it would be determined by how that was set up.”

Turning Medicaid into a block grant program has long been a Republican goal, and on January 22, President Trump’s senior adviser Kellyanne Conway confirmed that the administration’s plans to replace the Affordable Care Act would include turning Medicaid into block grants to the states. Conway claimed that converting Medicaid to block grants would ensure that “those who are closest to the people in need will be administering” the program.

But giving states more flexibility while shifting costs to them could result in radically changed eligibility rules. For long-term care purposes, some have suggested that the look-back period for transfers might be extended to 10 years, or protections for community spouses eliminated.

In Louisiana, Gov. John Bel Edwards, a Democrat, told The New York Times that he was troubled by the prospect of a block grant with deep cuts in federal funds. “Under such a scenario,” he said, “flexibility would really mean flexibility to cut critical services for our most vulnerable populations, including poor children, people with disabilities and seniors in need of nursing home and home-based care.”

Because large portions of a block grant proposal could be achieved through budgetary reconciliation, it could pass the Senate without Democratic support, since it would only require 51 votes, according to the PBS Newshour’s explanation of the block grant concept.

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Clio is great but have you considered Actionstep?

I have been a Clio user for about 6 years but recently made the switch to Actionstep.  The move has been expensive, relatively, both in terms of cost and time, but we think in the long term the investment will be worth it.   I think any shift from one client management service to another is going to involve some down time, so I don’t think there is anything unique in our experience on this point.  We choose to use an outside service for much of the work (after trying to do it ourselves first – bad idea) and had to make some software upgrades, which is why I say it was expensive.  The total cost was not considerable but for a small practice the cost was noticeable.

Key features that drew our attention were the ability to integrate Hot Docs (document automation), custom work flows that drive matters to completion (prepackaged work flows can be acquired if you don’t want to build them, or you can have someone build them for you (which is what we are doing)) and full integration with email.  Additionally, the ability to create a number of customized data entry fields for tracking client data is handy, though Clio supports this too.    The data shift was painful but with the help of an outside service provider, we survived.  My primary point in making this post is that if you are just getting started in your practice, make sure you consider Actionstep as an alternative.   If you manage a lot of staff, Actionstep’s workflows also might be a good reason to consider it as an alternative to Clio.

I really enjoyed the ease of Clio and its overall simplicity but now need something more robust.

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Electronic Wills Act – New Hampshire Senate Bill SB40 Scheduled for Hearing


SENATE BILL 40 AN ACT relative to electronic wills. SPONSORS: Sen. Bradley, Dist 3; Sen. Innis, Dist 24; Sen. Carson, Dist 14; Sen. Woodburn, Dist 1; Sen. D’Allesandro, Dist 20; Rep. Hunt, Ches. 11; Rep. Danielson, Hills. 7; Rep. Wall, Straf. 6 COMMITTEE: Commerce
───────────────────────────────────────────────────────────────── ANALYSIS This bill establishes the New Hampshire electronic wills act which authorizes an additional method of creating valid wills that are written, created, and stored in an electronic format and executed using electronic signatures.

According to Michael Panebianco, Chair of Trust & Estate Law Section, this Senate Bill has moved from Committee and is now schedule for a hearing on Tuesday, January 31 at 1:00 sb40-electronic-wills-act pm in Room 100 of the State House.





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Is Providing Successor Trustees with Guidance Beneficial?

I have never seen a trust drafted by another lawyer that attempted to provide guidance to a successor trustee but I have seem many successor trustees operating in the complete dark for years.  Often the result is the failure to file trust returns but worse outcomes do occur, which proper guidance might have avoided.  Many people simply don’t want to seek advice.  Is that simply the successor trustee’s problem or did the client/drafting attorney/trust assume too much of the successor trustee?

There seems to me to be an easy solution to this problem.  When you anticipate that a successor trustee might not be the best choice but your client insists on naming a family member or friend as trustee, include a requirement that the successor trustee must seek and retain counsel to advise them as to the duties and responsibilities of a trustee.  The provision can require compliance before the successor powers are effective or could be precatory in nature.  Compensation could also be withheld if the successor did not comply with a mandatory provisions.

Here is a sample precatory provision I sometimes use.

Before a successor Trustee, other than the Settlor’s spouse or an Independent Trustee, assumes the role of a Trustee or Co-Trustee under this Trust, but in any event within ninety (90) days of his or her acceptance of Trusteeship, said successor shall provide the qualified beneficiaries (or a legal representative thereof) of the Trust or any then serving Trustee with a written statement from a practicing attorney stating that:

I, _________________, an attorney actively practicing in the State of ________________, have met with and/or spoken with   (Name of Successor Trustee)  for a reasonable amount of time and in doing so have generally advised (Name of Successor Trustee)  of the duties imposed on a Trustee under Title 18-B M.R.S.A.  801 et. seq., of the Maine Uniform Trust Code (or its successor provision) (including but not limited to the duty of loyalty, the prohibition against self-dealing, the duty of impartiality, and the duty with respect to prudent investment and management of trust assets).  I have reviewed the terms of this trust with said (Name of Successor Trustee) and in doing so have advised him/her of who the beneficiaries are and of his/her duties and responsibilities thereto under said trust.  I have also provided said (Name of Successor Trustee) with the attached memorandum for his/her future guidance in said capacity, which generally reviews the powers, duties and responsibilities of a Trustee in the State of Maine or a copy of relevant provisions of the Maine Uniform Trust Code that set forth the powers, duties and responsibilities of a Trustee.

The legal costs so incurred shall be chargeable to the Trust. Notwithstanding the failure of any successor Trustee to deliver such a statement as required, any actions taken by said successor shall have the same power and effect as if said successor had delivered such a statement as required but said successor shall not be entitled to compensation until he or she has complied with this provision, albeit such compliance may be achieved after the ninety (90) day period stated hereinabove.

Happy drafting!




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Revised Additional Instructions for Advance Health Care Directives

Sometime ago now I blogged about the importance of empowering clients to prepare additional instructions regarding their wishes that go beyond what traditional boilerplate Advance Health Care Directives and/or Living Wills provisions.   Recently I undertook a significant revision of my additional instructions form to take matters to the next level.  What is the next level?  To me the next level was providing for prompts to encourage regular updates and communication with physicians and/or agents and providing for alternative  directions in the event a spouse is unable or unwilling to exercise discretion regarding end of life. The    If you are an attorney and would like to receive a free copy of these additional instructions please contact me and I will send you a PDF copy.  If I share these additional instructions with you, you agree that by doing so I am not providing legal advice and that by doing so we have not established an attorney-client relationship.

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Are we there yet?

Life Care Planning; Law Office of Smilie G. Rogers, PLLC       Planning takes time.  Meaningful planning requires vigilance, doesn’t it?  How do you as an estate planner maintain vigilance?  Assuming the client wanted to patriciate, how would you meaningfully accomplish this?   Would it be cost effective for the client?  Would it be cost effective for you?  What would your continuing malpractice exposure be?

These are not easy questions to answer and likely, depending on your practice time horizon, your client base, the level of vigilance your are willing to implement and your skill set the answers will vary.

These are questions I have struggled with since opening my own practice several years ago.  I don’t have all the answers but I think today I have more than I had when I started out.   Today, our office is moving in new directions, some charted, some uncharted, but and we think that the future of estate planning is going to be more challenging and require more skill sets than it ever has.   As for our answer to the question of vigilance –  for people coming in to the practice of estate planning/elder law, my advice is think about “relationship law” and how to methodically, even if it only starts out with a light touch, to serve the relationship and the needs that arise over the course of time.  Planning takes time.




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Wills and Long Term Care Planning


When retirement assets are in play, planning for long term care concerns under a Will based plan can get complex.  Sometimes visualizing the interplay between different planning strategies is helpful.

LTC and Will PlanningLong Term Care Planning and Will Based PlanningLTC and Will Planning

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What does the Operating Agreement Say?

We interrupt our normal broadcasting to rebroadcast this interesting case law news flash! 
Can the provisions of an LLC Agreement avoid probate? Can it act as a Will substitute?  What does the Operating Agreement Say? 
Courtesy of Alan Gassman and Chelsea Bellew, from the “Thursday Report”, Issue 181, comes the following:
LLC Operating Agreement Can Serve as “Transfer on Death” Mechanism to Avoid Probate and Trust Interaction (Not to Mention Confusion and Uncertainty)
by Alan Gassman and Chelsea Bellew
In Blechman v. Estate of Blechman, 460 So. 3d 152 (Fla. 4th DCA 2015), the court found that the provisions of an Operating Agreement of a limited liability company allowed the Decedent’s membership interest to vest immediately upon his death. While the Decedent made provisions for the membership interest to pass to someone outside his family in a trust before he passed away, the court found that the provisions of the Operating Agreement were controlling. The provisions of the Operating Agreement were made to keep the company within the family and did not permit for a membership interest to pass to anyone else.
The Operating Agreement was executed in New Jersey and was, therefore, interpreted according to New Jersey case law. Minoff v. Margetts was a New Jersey case that permitted members of an LLC to use provisions in an Operating Agreement to control the disposition of membership interests when one member passes away. Following this rationale, the court found that the interest in this case vested in the two children upon the death of their father, according to the Operating Agreement, and that this interest was not a part of his estate. The trust had an amendment that provided for the interest in the LLC to pass to the Decedent’s girlfriend upon his death, and the court found that this instrument was subordinate to the provisions of the Operating Agreement. The provisions of the trust directly contradicted the terms and intent of the Operating Agreement. Therefore, the Decedent’s membership interest in the LLC passed upon his death outside of probate to his children and nullified the terms of the amended testamentary trust.
Specific language that was used in the Operating Agreement that was blessed by the court was as follows:
6.3 Death of Member
(a) Unless (i) a Member shall Transfer all or a portion of his or her Membership Interest in accordance with 6.1 or 6.2 hereof, or (ii) a Member bequeaths the Membership Interest in the Member’s last will and testament to members of the Immediate Family of the respective Member, or (iii) all such Membership Interests of a deceased Member are inherited, or succeeded to, by Members of the Immediate Family of the deceased Member, then in the event of a death of a Member during the duration of this Agreement, the Membership Interest of the deceased Member shall pass to and immediately vest in the deceased Member’s then living children and the issue of any deceased child, per stirpes.
The court noted as follows:
…not every instrument which provides for performance at or after death is testamentary in character…There is nothing in the statute of wills that prevents the creation of contract of a bona fide equitable interest in property and its enforcement after the death of a contracting party, even though the date of death is agreed upon as the time for transfer.
Do we now have an obligation to review every Operating Agreement that a client has involvement with to see whether inheritance rights and disposition may be impacted thereby? Do we dare use similar language in an LLC Operating Agreement that might distort an estate plan later when the client or their advisors are not aware of the provision?
Perhaps the following provision can be considered:
Upon the death of JOHN SMITH, his membership interest shall immediately pass to and immediately vest in his spouse, MARY SMITH, or in equal shares to his children, per stirpes, if MARY SMITH does not survive him, provided that the above shall not apply to the extent of any future provision of any Will or Pour-Over Will and Revocable Trust that might be entered into by JOHN SMITH, if the legal effect thereof would be to provide for a different disposition of his LLC interest, regardless of whether such LLC interest is specifically referred to or not. The determination of whether any such subsequently signed separate Will or Revocable Trust exists to facilitate such change shall be made by the Manager or Managers of the Company, in their reasonable discretion, and the Company shall be entitled to the distributions or liquidation entitlement rights to the successor owners of the membership interest to the extent of money expended to facilitate such determination.
Should we consider using similar arrangements for our clients, and, if appropriately used, will these avoid exposure to individual creditors of the deceased LLC Member? See our Thursday Reports from October 15, 2015 and October 22, 2015 for further discussion of this in the article entitled “Avoiding the Carnage Caused by Pay-on-Death Accounts.”
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