Preparing your estate before you pass on could be the biggest financial accomplishment of your lifetime

By Patricia Nugent

Now that we’re in the height of tax season, with people taking a good look at their financial picture, it’s a good time to plan for protecting your assets in the future.

I caught up with local Estate Planning Attorney Margie T. Karl for insights.

She says that even though no one really wants to think about a point in their lives when they will need to move into a senior care facility, or require home health services, the sooner you begin planning for it, the smoother the transition and safer your assets.

“I prepare people for any possible scenario when it comes to ensuring financial and legal readiness and compliance with Medicaid,” she says. “I can help tailor strategies to each individual to minimize the tax burden while maximizing the value that will be passed on to beneficiaries.”

Irrevocable vs.Revocable Trusts
Oftentimes the best option for people who want to pass money along to a loved one, so it won’t be considered in the five-year look-back period for Medicaid, is to set up an irrevocable trust.

“People understand they should put their money in someone else’s name, but they don’t often go about it the proper way, which ends up getting them in trouble in the end,” she explains. “When you transfer your assets into an irrevocable trust, they become the property of the trust and cannot be subject to estate taxes. Control of those funds lies with the beneficiary. You cannot change or terminate the trust without permission of the trustee.”

A revocable trust, on the other hand, does not offer the same protections.

There are certain situations where parents can legally pay their kids or grandkids, such as paying them for being caregivers, instead of a home care service. Margie cautions you can only do this if they are set up with a Caregiver’s Agreement document.

“There are lots of complexities and intricacies to legally protecting your assets,” she says. “Once a transaction has taken place, it’s like letting the horse out of the barn. You can’t go back. It might affect your eligibility for Medicaid.”

Another situation she commonly sees is when older people might be widowed and buy a house with a girlfriend or boyfriend they aren’t married to.

“People go down a path of transferring assets without thinking about the consequences, doing things like co-signing for their grandkids’ car loans, etc., which is complicated and often deemed an improper transfer,” she says.

The Trust Factor
Most people find their attorney by word of mouth, and this is how Margie has built up her practice over the years, with five-star reviews that mention her compassion and professionalism.

“I understand that people are wary of hiring an attorney to set up the required legal documentation that fits their needs,” she says. “When I offer a free consultation, by the end of it I am able to tell them how much putting a plan in place will cost. There are no surprises.”

Margie T. Karl, Attorney at Law, is located at 25800 North Depot Street, Suite 102, in Olmsted Falls. As a prominent figure in the legal community of Northeast Ohio, Margie offers public speaking services to a diverse range of audiences, from senior centers to community events, as well as provides CEUs for professional groups. Call 440-782-5051 or visit OlmstedOhioLaw.com.