Lawyers With Purpose

Tips For VA form 21-0779

Purpose of the 21-0779

The VA form 21-0779 “Request for Nursing Home Information In Connection With Claim for Aid and Attendance” is used only for certain non-service-connected pension claims, and its primary purpose is to document the level of care required by a claimant or a claimant’s dependent. The VA form 21-0779 is completed specifically for individuals who are residents of nursing homes. The importance of documenting this level of care is twofold:

1. To support a claim for additional pension above and beyond the base level;
2. To support the need for certain medical expenses.

There are three levels of non-service-connected pension that a claimant may qualify for: Base pension, Housebound, and Aid & Attendance. The base pension is the lowest pension that a claimant may be awarded. Additional funds are granted if you can document that the claimant is housebound, and even more funds go to those requiring another individual to assist with at least two activities of daily living, or ADLs. The VA also looks at level of care when considering medical expenses to offset income. Therefore, the VA form 21-0779 should document the level of care that justifies the medical expenses being declared. This applies to the claimant’s dependents as much as to the claimant. So for example, the VA will not consider the nursing home facility expense for a veteran’s spouse unless a form 21-0779 is completed for the spouse indicating the need for this level of care.

Completing the 21-0779

The VA form 21-0779 is just a single page and is mainly to be completed by a third party; that is, the nursing home. All you need to complete the form is the veteran’s – or claimant’s, if other than the veteran – name(s), and Social Security number(s). When you are completing this form for a living veteran’s spouse or other dependent, that person’s name appears in the field that requests the name of the claimant, even though, strictly speaking, the claimant is the living veteran. When downloaded from the VA website at http://www.va.gov/vaforms/, the 21-0779 has no separate instruction pages. The form is fairly straightforward to fill out, but it still provides a toll-free phone number for those who require assistance completing the form. Despite the fact that you are not completing this form yourself for the most part, you should still review all 21-0779s once completed by the nursing home and before submitting to the VA so that you can confirm that every field is answered.

What to file with the 21-0779

Nothing in particular is required to be filed with the 21-0779 form. If you determine that you do need to file this form, it should be submitted as part of a fully developed claim in order to expedite the processing. If you are filing the VA form 21-0779 with your formal claim, then you do not need to file a VA form 21-2680 “Examination for Housebound Status or Permanent Need for Regular Aid and Attendance” because the former documents that the claimant is in a nursing home and requires skilled nursing care and thus by definition has a permanent need for regular aid and attendance. This will, however, not stop some VA adjudicators from requesting the 21-2680 form in addition to the VA form 21-0779, thus we generally request all our VA clients to get a VA form 21-2680 completed as soon as they have retained us.

Always remember that this form can be used for supporting both a claim for a higher level of pension and the need for certain medical expenses. Keep those two purposes in mind when you are deciding whether or not it needs to be included as part of your VA claim, and when reviewing its completion by the nursing home to make sure there are not unexpected results with your claim.

If you're interested in learning more about the Lawyers With Purpose Cloud Based Workflow System join us on Friday, February 26th at 2EST.  Finally...an AUTOMATED law firm system for Estate and Elder Law Attorneys designed to free up your time and get the work out the door quickly and easily!  Click here to reserve your spot for this FREE LIVE DEMO!  We only have a few spots left so grab your seat today!

By Sabrina A. Scott, Paralegal, The Elder & Disability Law Firm of Victoria L. Collier, PC and Director of VA Services for Lawyers With Purpose.

Victoria L. Collier, Veteran of the United States Air Force, 1989-1995 and United States Army Reserves, 2001-2004. Victoria is a Certified Elder Law Attorney through the National Elder Law Foundation; Author of “47 Secret Veterans Benefits for Seniors”; Author of “Paying for Long Term Care: Financial Help for Wartime Veterans: The VA Aid & Attendance Benefit”; Founder of The Elder & Disability Law Firm of Victoria L. Collier, PC; Co-Founder of Lawyers with Purpose; and Co-Founder of Veterans Advocate Group of America.

Do You Employ The "Fifty Shades of Grey" Publicist?

E L James is the author of the extremely popular erotic romance trilogy "Fifty Shades of Grey," released in May of 2011 and followed by the movie of the same title on February 13, 2015. This was the author's first novel, but she clearly hit a home run!

Maybe that is where I had my misconnect. I write poetry, some of which is provocative. Believing the new release of the movie would be a great opportunity to connect two pieces of art, I sent a letter via email to Ms. James’ publicist, which included three topic-appropriate poems. Yes, it was gutsy and a stretch, but history is not made by watching other people take action (and neither is money).

It has been a year and I have not heard from Ms. James or her publicist – not even a "We are not interested." It makes me wonder if Ms. James ever even got my letter, or if her publicist independently discarded it without discussion.

When are referrals or opportunities sent to you that you are not aware of? Often.

Just to share a few in my law office I, much too late, learned of:

1. A resume for an administrative position received by a paralegal and discarded without bringing it to me.
2. A referral, from a good friend, that wouldn't follow our office procedures and requested a free consult without first attending a workshop. Discarded.
3. An offer to make a presentation to a nursing home.

Would I have accepted any of the above opportunities? Maybe, but now I have no choice.

1. I was in fact hiring at the time the resume was discarded.
2. I would have done pro bono consult to help a colleague.
3. I would move mountains to get in front of a nursing home administrator.

So why were they discarded? Why was my opinion trumped?

Because of one of two reasons, or both.

1. Employees who believe they know a) what is best for you or the firm, or b) what you would have said and didn't want to bother you. These are rogue employees in the guise of being independent and efficient.

OR

2. You haven't been clear on your expectations. A system should be in place for each member of the firm to report opportunities of ALL kinds presented, accepted and rejected. An opportunity in this sense should be defined as "a request of some sort by another person or organization to either the firm or the managing lawyer."

I appreciate efficiency and independence, but I appreciate opportunity even more. The owner or manager of the firm should have the final say to accept or deny.

I feel certain that, had Ms. James been presented with my letter and poetry, she would have taken one of two actions:

1. Remembered her beginnings and reached out to assist a sister in the arts.

OR

2. Sent a reply politely denying my request.

Don't your prospects and professional community deserve the same?

What are you missing? What processes can you implement to catch them? What can you do to gently discard the others without leaving them hanging?

Did you know that Lawyers With Purpose has it's own Cloud Based Workflow System specifically for estate and elder law firms?  If you want to learn more about it, join us on Friday, February 26th at 2EST for a FREE live demo! Just click here to reserve your spot now.

Victoria L. Collier, Co-Founder, Lawyers with Purpose, LLC, Certified Elder Law Attorney through the National Elder Law Foundation; Fellow of the National Academy of Elder Law Attorneys; Founder and Managing Attorney of The Elder & Disability Law Firm of Victoria L. Collier, PC; Co-Founder of Veterans Advocates Group of America; Entrepreneur; Author; and nationally renowned Presenter.

Are You Abundant?

On January 24, 25 and 26, I had the opportunity to attend my second Abundance 360 event. For those of you who are unfamiliar with the Abundance community, it is led by Peter Diamandis, an amazing entrepreneur who has identified his goal to transform and improve the world. Peter's first book, “Abundance: The Future is Better Than You Think,” written with Steven Kotler, was an immediate insight into a world of abundance that is approaching. His second book, “BOLD: How to Go Big, Create Wealth and Impact the World,” which was recently released, has changed the game for entrepreneurs from simple business owners to world transformers. Peter also has a great blog, which I recommend you sign up for just to be aware of what's going on in the world around you.

In the three‑day conference, we were exposed to the amazing advancements of artificial intelligence, robotics, returns, sensors, augmented reality, material successes, and the impact of each on medical advancement. The fundamental element of the future of entrepreneurialism centers around the six D’s of exponential growth. First among those is to digitize. That is, to put into technology what is capable of being delegated to it.   Second is the deceptive stage, where things are happening and no one is aware, but they are happening nonetheless. Third is the disruptive stage, when people begin to become aware of what has been digitized and has been unknown, and it begins to disrupt the way we look at what we do. Uber is a perfect example of something that was digitized, deceptive, and has become disruptive. The final three D's relate to dematerialization; that is, to eliminate the necessity of materialism – for example, how a cellphone has eliminated the need for flashlights, cameras, recording devices, calculators, and myriad other elements we typically relied on in the past. The fifth D is to demonetize. That is, to take the cost out of the technology, as we have seen with the cost of computers, cellphones and the like that have come down dramatically since they were first introduced. And the final D is democratization, to ensure availability globally as easy as locally.

Entrepreneurs of Abundance are now working under these core concepts, so they are no longer just ideas. There are myriad entrepreneurs who have focused their future vision on transforming the world, not just their local marketplace. These are what Dan Sullivan, of Strategic Coach, has called game changers. I encourage you to click on this video to watch the Emmy Award-winning short film on Peter Diamandis (but hurry because they are offering a Free Online Pre-Screening that will expire February 20th).  It will cause you to identify a new world of abundance that may be deceptive to you currently, but just getting in the conversations will help you find your place within it.

If you want to learn more about our Cloud Based Work Flow System join our live demo on Friday, February 26th at 2EST. Just click here to reserve your spot now!

David J. Zumpano, Co-Founder, Lawyers With Purpose

The Lifeblood of Any Good Business...

The lifeblood of any good business or practice is the ability to attract a consistent flow of clients through the doors. In order to do this, you need to keep evolving your practice to offer not only what your clients want, but what they need. Attorney Julieanne Steinbacher, President of The Million Dollar Solution, is here to tell you why you need to be offering financial products with your repertoire.

Up until now, financial products have been largely unchartered territory, but that’s true no longer. We have cracked the code to practice success in the financial services arena, and we want to share it with you. A lot of attorneys believe they shouldn’t be involved in any way with financial services, thinking it is unseemly or not lawyerly, and they believe it takes away their ability to advise their clients in an unbiased manner. That’s what we thought, too — but we were wrong. Instead, we found that we were doing our clients a disservice by not becoming educated about the role financial solutions can play in helping protect our clients. Incorporating financial products into your firm could be the key to the success that you so desire.

The Million Dollar Solution, home to Leading Lawyers on Estate and Long Term Care Planning, and the Senior Estate Planning Institute, is dedicated to assisting elder law and estate planning attorneys build a profitable practice while most efficiently and effectively serving their clients. Through conferences, mastermind sessions, testing ideas, their website, www.planningandprotecting.com, and a multitude of other resources, The Million Dollar Solution has helped leading attorneys in this field transform not only their practices, but their lives and will be sponsoring the Lawyers With Purpose Tri-Annual Practice Enhancement Retreat.  If you'll be there next week make sure you join us for lunch on Friday, February 26th!

 

Congratulations to Andrew Jaloza, Lawyers With Purpose Member of The Month

What is the greatest success you’ve had since joining LWP?  

The greatest success is having created a thriving Estate Planning Practice run by a cohesive team of dedicated people who are passionate about helping as many families as we possibly can.

What is your favorite LWP tool?

It is not just the tools but the total client centered systematic approach of the LWP process that has allowed us to quickly go from zero to hero as an Elder Law and Estate Planning firm. 

How has being part of LWP impacted your team and your practice?

We have been impacted by our implementation coach Roz Drotar and our mentor Coach Candace Pollock, both of whom have held us accountable and challenged us to reach our highest possible potential while imparting their years of experience-based suggestions to help us achieve amazing growth over the past year.

Share something about yourself that most people don’t know about you.

Something that people don't know about me is that I am transparent. What you see is truly what you get. 

What is your favorite book and how did it impact your life?

My favorite book is called Man's Search of Meaning by Viktor Frankl. This book has impacted my life because after reading it, it has taught me that everything in your life is a matter of perspective, and how you look at something creates your world.   

 

Sneaky Runaround to Get VA Law Changes Approved by Congress

Over two years, Congress introduced legislation to protect veterans from “pension poachers” by actually penalizing veterans for making transfers of assets. Those bills were S. 3270/H.R. 6171 (112^th Congress) and S. 748/H.R. 2341 (113^th Congress). Both bills died in Congress. The Veterans Administration drafted and issued proposed law changes, without Congressional approval, on January 23, 2015: Federal Register Vol. 80, No. 15, Part IV, 38 CFR Part 3, Net Worth, Asset Transfers, and Income Exclusions for Needs-Based Benefits. Over 900 public comments were submitted to the VA overwhelmingly in opposition to the proposed changes. One specific argument was that the VA did not have independent authority to make such changes and needed Congressional approval.

Apparently the VA agrees, so it secured the support of a few senators to craft a bare-bones House Resolution 4351. That resolution, called the “Veterans Care Financial Protection Act of 2016,” would carte blanche approve any “standards” developed and implemented by the Veterans Administration “that protect individuals from dishonest, predatory, or otherwise unlawful practices relating to increased pension available … on the basis of need for regular aid and attendance.”

Should this resolution pass, all of the proposed changes to Title 38 of the Code of Federal Register, as drafted by the Veterans Administration, affecting veterans, imposing transfer penalties of up to 10 years, would become law.

One glaring problem, as I see it, is that neither the bill nor the proposed changes in Title 38 define “dishonest, predatory, or otherwise unlawful practices.”  A financial advisor who sells a product is within his right to do so if it meets financial goals and the federal suitability requirements. Lawyers who draft estate planning documents, licensed to do so in the state where the client resides, are acting lawfully.  Certainly, misrepresentation that a trust or an annuity is required in order to get VA benefits is dishonest.  But making transfers of assets to trusts and the purchase of an annuity itself are not unlawful.  Holding educational seminars is not predatory. 

This is yet another example of a poorly drafted piece of legislation designed to appeal to the emotions of the ignorant, and it purposely does not adequately explain the consequences for or against the cause.

Veterans are being harmed by the changes in the laws, not protected. If the VA and the select few Congressional members truly wanted to protect veterans, they would leave the VA pension plan rules as they are and sanction the advisors who are using unethical practices or committing illegal acts. If the VA and Congress wanted to protect veterans, they would allocate their time and resources to making the application and appeals process, and healthcare system, efficient and consumer friendly instead of making it harder for veterans to qualify for deserved benefits.

Let your representatives know the real issues behind the reason for this new resolution. Urge them not to pass this blindly – know what the proposed rules are that affect pension benefits and veterans.  

Did you know Lawyers With Purpose has a Cloud Based Workflow System specifically to support your estate or elder law practice?  If you aren't a Lawyers With Purpose member and want to know more about our LWP Platform just join us on Thursday, February 26th at 2EST for a complete live demo on how it all works!  Click here to register for our Live Law Firm CRM Workflow System Demo for estate planning and elder law attorneys.  

Victoria L. Collier, Co-Founder, Lawyers with Purpose, LLC, www.LawyersWithPurpose.com; Certified Elder Law Attorney through the National Elder Law Foundation; Fellow of the National Academy of Elder Law Attorneys; Founder and Managing Attorney of The Elder & Disability Law Firm of Victoria L. Collier, PC, www.ElderLawGeorgia.com; Co-Founder of Veterans Advocates Group of America; Entrepreneur; Author; and nationally renowned Presenter.

10 Ideas to Make Your Law Firm Website Better Today

Today we welcome Guest Blogger Mike Ramsey, President of NiftyLaw. He writes and speaks across the nation about all things search, social, and local.

__________________________________________________________________________________________________________________________________

Most law firms have active websites, but not many of them are good. This gives you a fantastic opportunity to improve your website and stand out from the crowd. After all, a professional website can create the much-needed positive impression, strengthen credibility, and generate new business for you.

In this post, I’m going to share 10 ideas to make your law firm website better today.

Let’s get started...

1. Use Images of Attorneys and Your Office

A professional law firm website needs to build trust, authenticity, and credibility. And nothing does that better than images of your own office and attorneys.

Here is an example.

You can always use stock images on your website, but that’s not recommended. It looks generic, and stock images can never reflect the personality and values of your business — which are important factors.

Pro Tip: Use PhotoFeeler to get unbiased feedback on your photos and control the impression it sends to your potential clients.

2. Start Publishing Blog Posts Regularly

Blogging plays a significant role in lead generation — especially for law firms. According to studies, marketers who blogs generate 67% more leads than those who don’t. Also, businesses with over 200 blog posts generate 5x more leads than those with 10 or fewer.

So, as you can see, blogging is a great long-term investment.

Furthermore, your entire content marketing efforts will be based on your business blog. Let’s discuss it more.

3. Target the “Right” Audience

Here is another tip about blogging.

When you are creating content, it is important to identify the type of audience you are targeting. You are not creating content for other lawyers. It’s a rookie mistake that actually a lot of law firms make.

You should be creating content for your potential customers. Other lawyers are not your potential clients in many cases and there are better ways to create relationships with lawyers in person compared to blogs.

So choose your topics wisely.

4. Local Area Keyword Targeting

Okay, this is the last tip on blogging and content marketing. I promise.

When you are creating content for your law firm website, make sure that you are targeting the right keywords.

One tip is to target keywords for all the local places where you provide services. For instance, if you are a lawyer in Chicago, you probably work with people in the entire metro and should be targeting multiple local areas, e.g., Cicero estate planning, Evanston elder law, Oak Park, Skokie, etc.

Create content to publish on your website with these areas as primary keywords. Optimizing these location keywords will help you get more search engine traffic and potential leads from those geographical regions. This will also expand your website dramatically.

You can use the Google Keyword Planner to find all the relevant keywords and keyword phrases.

5. Responsive Mobile-Friendly Design

Mobile searches have become an important component of online marketing. If your website isn’t mobile-friendly, it can have several negative impacts on your online business.

First of all, nearly 50% of the website traffic comes from mobile devices. If your website isn’t compatible, you are simply going to lose all that traffic. Secondly, search engines prefer mobile-friendly websites.

In April 2015, Google announced their mobile-friendly search engine algorithm update. According to this update, if you are website isn’t mobile-friendly, Google may not rank it higher in the search engine results pages (SERPs). Following that, Bing has also announced their own mobile-friendly algorithm.

6. Building an Email List

An email list of targeted subscribers and potential leads is, by far, the most valuable asset of your online business. It’s important that you start building an email list right from the start.

Why is an email list so important for a law firm website?

It’s simple.

Approximately only 4% website visitors are ready to buy right away when they visit your website. The rest of the 96% need to be properly nurtured. And there is no better way to nurture potential leads than email marketing.

Moreover, when you stay in touch with your email subscribers and send them useful information, they are more likely to hire your services and trust your recommendations.

7. The Psychology of Color

Sometimes, just choosing the right color for your website can make a huge difference. It’s important because each color sends a different message and that can change the perception of your website visitors.

For instance, blue is a color that builds trust, credibility, order, loyalty, and authenticity. This is the reason so many financial institutions and banks use blue.

You can leverage this information and use this to your own advantage and ensure the color choices of your firm are in line with the messaging you want to send.

8. Focus on Reputation

Your website can create a great first impression that you need so much.

For instance, take a look at the following image.

The website specifically focuses on building the good reputation. It shows achievements, highlights different accomplishments, and has a great tagline to go with it.

You should also use testimonials of satisfied customers to complement other elements on your website. A great tool to help generate feedback from customers is GetFiveStars where you can manage reviews, ask for testimonials, and address issues before they become reputation problems.

9. Stand Out with Video Marketing

Video marketing can have great rewards if done properly.

The idea is to rise above your competitors by having engaging videos on your law firm website.

You can create testimonials videos, educational videos, or promotional videos. And when all else fails, you can just be “memorable”.

10. Contact Information

One of the major reasons why people visit your law firm website is to find your contact information. It is, therefore, your job to make it as easy for them as possible.

Don’t forget to mention the physical address of your firm, your local phone numbers, an active email address, and a map. It is important that the contact information — Business name, address, and phone number are consistent everywhere on the web.

Also, depending on your website design, it is a good idea to display the contact information on every webpage. You can easily achieve that by displaying the contact information in the header or the footer of your website.

It can also be a good idea to clarify that an email or contact form submission does not initiate an attorney-client relationship — as shown in the following image.

Final Words

It is important to understand that your law firm website is a crucial component. Without it, you won’t be able to manage content marketing. 81% people search online before buying, and that makes it imperative that you have a great law firm website in place. And you can use these 10 ideas to make your law firm website better today.

Mike Ramsey, President of NiftyLaw

Mike is one of our sponsors for the February Tri-Annual Practice Enhancement Retreat.... and he's also a guest speaker!  Join the conversation during his focus session on the Thursday, 2/25 Marketing Track at 8AM : "I'd Like to Hire You, But I Can't Find You" and learn all things local search to dominate online in your area!

If you're not a Lawyers With Purpose member and want to know more about our Cloud Based Workflow System, join our webinar on Thursday, February 26th at 2EST - Click here to register for our Live Law Firm CRM Workflow System Demo for estate planning and elder law attorneys.  

Roslyn Drotar - Lawyers With Purpose, Online Marketing Strategist

 

Nadeau v. Thorne - No Reason To Fear

The recent Massachusetts decision in Nadeau v. Thorne considering a primary residence held in a Grantor trust as an available resource and thereby disqualifying the Medicaid applicant has the Medicaid industry in turmoil. A careful review, however, will calm any fears that this in anyway changes what we have always known about Medicaid.

It is common that cases that come out of Massachusetts create ripples through America because of what appear to be extreme applications of Medicaid law. While we cannot ignore the Massachusetts courts, we must instead understand the theory in which they are able to make decisions such as these. First, Medicaid is federal law and, in accordance with USC 1396D, sets out all of the relevant laws related to Medicaid benefits. However, the federal Medicaid laws explicitly state that all interpretations of the law will be determined at the state level. That is where the leeway is granted for states to make decisions that would that otherwise appear extreme.

In the Nadeau case, the Court relies specifically on Massachusetts statute Section 130 Code Mass Regs 520.023(C)(1). The statute treats an applicant's "former home" that was deeded into an irrevocable trust differently from other assets. What's interesting about this case is nowhere does it discuss the exemption of the primary residence in determining the applicant's eligibility. It could be asserted therefore that under this specific Massachusetts regulation any primary residence deeded to a trust loses its residential exemption status for the applicant. Whether we agree with that or not is not our call, as the State of Massachusetts has the authority to interpret the federal regulations in this manner. So the Nadeau case in front of us really has little to no application outside of Massachusetts other than to force the rest of us to understand the context of the contextual authority of the individual state Medicaid agency.

A second element of this case is that the court was ready, willing and quickly abrogated interpretation of the federal Medicaid laws to the Medicaid department rather than to the court. Specifically stating, "this court must also give due weight to the expertise technical, competent and specialized knowledge of the agency as well as to the discretionary authority conferred upon it". The court relies on the former Doherty decision to reassert its authority that if applicant does not occupy their home then their home is available. Again the significant issue here is that it really does relate to the federal statute which says any right of the applicant to benefit in any way shall be deemed available to the maximum amount that the applicant can benefit. In this case the court took the use of the house and extended that to assess the full value of the home as countable. That's a stretch but nonetheless, regardless of this court's decision, Medicaid planning still allows one to place a house into an irrevocable trust as a viable planning technique. While most organizations will scream and yell and say no I propose three options in light of this case.

First, outside of Massachusetts one should feel relatively confident that they can continue to transfer a home to an irrevocable trust and reserve the right to live there in the trust without concern. What's unique in the Nadeau case is that there is a specific Massachusetts statute and case precedent which includes the home and does not provide as exemption under the federal statute. So to throw the baby out with the bathwater and stop doing this if you are not in the state that has such a specific statute would be an ultraconservative approach. A second option going forward is to continue to do Medicaid planning as you always have, continue to convey the home to the irrevocable trust but instead of reserving the right to live there, just create a simple lease agreement between the Medicaid applicant and the trust. This would eliminate the entire fact pattern that arose in the Nadeau case. In fact, the lease payments to the trust would not be considered uncompensated transfers and it would allow the grantor to still live in their house. The core elements will be that the Grantor/Medicaid applicant would have to pay all the expenses on the house and maintain the taxes, insurance, etc. and one should do his best to ensure that the value of the rental is an arm's length amount. And a third option is to convey the real estate to the trust but reserve a life estate to the grantor in the deed. This approach ensures that the "remainder interest" is conveyed to the trust, not the present interest, and no rights need be maintained under the trust for the benefit of the grantor. This is the simplest approach.

So if we look at cases like this it is important not to panic and run for the hills, remember your clients need you. They come to you for what you can do not for what you can't do and we as lawyers must analyze the law, examine our options and then implement a solution that the law and the client desires.

For all the latest and great tips and techniques in the estate planning and elder law arena, make sure you're subscribed to our blog by giving us your name and email address in the top left corner of the blog.  And hop on a FREE webinar on "Simplifying Medicaid Eligibility & Qualified Transfers" happening Tuesday, February 16th from 2-3 EST - just click here to reserve your space now!

Here's just some of what you'll discover...

• Understanding the 12 Key terms of Medicaid
• Learn the Qualification Standards: Does Client Meet Needs Tests?
• Learn the Medicaid Terms of Art

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center

Is Asset Protection Dead? Pfannenstiehl v. Pfannenstiehl

A recent Massachusetts case throws into question whether long-term asset protection is safe. This particular case was disturbing because the defendant in a divorce proceeding's share in an irrevocable trust from his parents was deemed to be a marital asset and had to be distributed to his ex‑wife. This was a third-party trust, created by the parents for the benefit of their son, that had specific spendthrift provisions to prohibit such an attack. The Massachusetts court deemed otherwise.

So is asset protection planning on its way out? Absolutely not, in light of the fact that the case had several significant factors – and as always, the devil is in the details. First, Massachusetts has a very strong statute regarding marital property interests. Second, the trust had a specific termination date wherein the son was going to get the rest, residue and remainder of his share at a specific date. Third, payments from the trust were made regularly and consistently and stopped on the “eve” of the divorce. And fourth, the trustee had ascertainable distribution standards of health, education, maintenance and support. Finally, it had the ideal plaintiff: the wife who shared two special-needs children with the defendant. Put all of that together and judges will find a way to pierce the trust. So what is one to do?

While this case was shocking to many, decisions like this are not a surprise in the Lawyers with Purpose community, which is why we have been recommending certain strategies to safeguard against even the pickiest judges and fact patterns. For example, when traditionally drafting a trust and leaving it to beneficiaries in asset protection trusts, we believe the strongest protection comes from having separate share trusts for each beneficiary, with provisions specific to the needs of the individual beneficiary. Second – and this is the most important part – we believe there should not be ascertainable standards, but rather pure discretionary rights to the trustee. Finally, whenever possible the beneficiary should not be an individual, but rather a class of people. For example, in this case, instead of naming just the son as beneficiary, we would recommend naming the son and his issue as beneficiaries, thereby opening up the class of beneficiaries and enhancing the asset protection. One may be fearful of naming the issue. Well, therein lies the trick. Who is named beneficiary is not ultimately the determining factor of who benefits, but rather who the trustee determines who benefits. Create a class of people the trustee can sprinkle income and/or principal among as they deem appropriate in their absolute discretion (not ascertainable standards).

In the Massachusetts case, this could have solved the problem. How? During the marriage, it is likely most of the regular payments provided to the son were actually used in the marriage for the children or items that the husband and wife benefited from jointly. By opening up the class of people, the trustee could have made distributions directly to the children to provide support for the children that the husband was using the money for anyway. By doing this, it surely indicates the assets were not assets of the husband's, but were truly a third-party trust that, at the discretion of the trustee, was distributed to various members in the class, thereby not making it a marital asset. The defendant could have continued to use proceeds from the trust for the benefit of his special-needs children even after the divorce; in fact, most fathers would not penalize their children for divorcing from their spouse. But the key distinction would be that the husband would have remained in control of the assets rather than having to surrender them to a former spouse, wherein there would be no control.

The challenge today is that too many lawyers are on autopilot when they're drafting trusts – or worse, their trust drafting software system doesn’t allow the customizations and protections that the Lawyers with Purpose client-centered software does. Our client-centered software advises the attorneys and allows them to custom tailor each and every option. In addition, LWP™ attorneys are trained to think like the worst court you can imagine and identify how to create provisions that are not specifically targeted at a particular goal but rather strategically drafted to accommodate multiple objectives.

Click here now to see how our trust drafting software will keep your client's needs always in the front of your planning. 

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center

Why You Might Be A Trust Mill

Having practiced in the estate planning field for almost 23 years, I'm amazed when I review many trust plans done by lawyers that are still "boilerplate," with nothing distinguishing them other than the names of the client and beneficiaries. Interestingly, even when reviewing trusts created by software systems from well-known organizations in the estate planning industry, I am perplexed about the over-complexity, but also the under-simplicity, of how they work. Most trust systems in the estate planning industry have many options to designate different legal technical phrases and provisions to enter into the trust document. Unfortunately, once an attorney chooses the "standard provisions," nothing else changes in the document but the client names. So while they believe they have a very comprehensive estate planning trust system, they really have a glorified trust mill system (a better mouse trap?).

The Lawyers with Purpose client centered document creation system is unparalleled in the industry. It is the only software in the industry that was reverse-engineered. Rather than identifying the specific legal provisions required, it instead identifies the particular needs and goals of the client. Once those goals and needs are determined, the software then allows you to custom tailor every single core element of the trust to accomplish those client objectives. As you complete the client needs and their particular customizations, the software automatically inserts the necessary legal provisions and clauses to accomplish the client goals. No two LWP drafted trusts are ever the same. There are over 5,000 combinations of choices, and that's not even including the customization element in each of the decision levels.

While it sounds scary, the systemization of it makes it quite easy. In fact, it is the only document creation system in the industry that is integrated into a complete estate planning practice module. What does that mean? The marketing, legal technical training, workshop presentation, and client design are all integrated to facilitate and work with each other. Each one supports the other. For example, the initial client educational workshop helps identify the various issues that can be addressed in planning - which flows into the vision meeting, where, based on a series of questions - the client is able to self-select one of five different plans that will accomplish the specific goals the client identified. Next, the design meeting is tailored to focus on the specific plan (legal documents) chosen by the client. Then, the most exciting part: the attorney can customize every single aspect of the general plan to meet the client’s individual needs.

The cherry atop all of this is that the attorney designs the custom plan using specific design templates that permit others in the office to actually draft the trust (the software follows the template, including all customizations). Don't be a trust mill – learn how to put the client first. Client-centered document creation software is the first key. Click here to discover how the Lawyers with Purpose Client Centered Software can transform a mere practice, and discover the impact you can have on your client. Reserve a day and time that works for you now.

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center