What You Should Know About Required Minimum Distributions

Required Minimum Distributions (RMDs) are the minimum amounts a retirement plan account owner must take out each year. RMDs begin when a person reaches either age 72, 70½ if they reached this age before January 1, 2020, or the year in which a person retires (if after age 72).

There are some exceptions. In the case of an IRA or where a person is a 5 percent owner of the business that sponsored a retirement plan, the RMDs start at age 72 (or 70½). There is no option to defer RMDs to a later age, even if the individual is still working.

It is the responsibility of each retiree to take out the correct RMD from their retirement account each year. If a retiree does not do so, they can face penalties. Furthermore, upon a person’s death, there are special rules regarding how the remaining funds must be distributed to beneficiaries. These death rules are currently in flux, as explained below.

RMD rules apply to all profit-sharing plans, 401(k) plans (including Roth 401(k) plans), 403(b) plans, 457(b) plans, traditional IRAs, SEP IRAs, SARSEPs, and SIMPLE IRAs. Roth IRAs are presently excluded from the RMD requirement while the account owner is still alive.

How RMD Rules May Affect You

As mentioned above, the onus is on you to ensure you take the correct RMD when you retire or reach a certain age. The amount of the RMD is calculated for each retirement account by dividing the account’s balance as of December 31 of the prior year by a life expectancy factor outlined in IRS tables.

Many retirement administrators or plan managers can help you with these calculations. Still, you should also try to understand on your own what you are required to withdraw, as you are ultimately responsible for any penalties or taxes that you may incur for incorrect withdrawals.

Unfortunately, the IRS says you can’t keep amounts in your traditional retirement accounts indefinitely, even if you don’t need the income. If you take out less than the RMD for a particular year, you may be subject to a 50 percent excise tax on the amount you didn’t take out but were required to withdraw. However, in some circumstances, if you made an error in calculations but are in the process of taking corrective action, you may be able to request a waiver of the excise taxes.

Changes in RMD Rules

The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) changed the RMD rules regarding how quickly beneficiaries must receive retirement benefits upon the account owner’s death. These new rules will apply to persons who passed away after December 31, 2019. In addition, the SECURE Act increases the RMD beginning age from 70½ to 72.

Before the SECURE Act, RMD rules required distributions after a person’s death to be made in one of two ways. If the owner died before RMD rules applied to them, their interest had to be distributed as follows:

1. within five years of their death, or

2. over the life or life expectancy of the beneficiary, with distributions beginning no later than one year after the date of the owner’s death (subject to an exception for a surviving spouse).

If the owner died after the RMD applied to them, the beneficiary had to receive payments at least as quickly as the owner had been receiving them.

The SECURE Act has changed these RMD rules in several ways:

1. It lengthens the five-year rule to 10 years.

2. The new 10-year rule applies regardless of whether the owner dies before the required RMD beginning date.

3. The option to distribute the retirement funds over the life or life expectancy of the beneficiary applies only to specific qualifying persons.

4. For a beneficiary who is a minor at the date of death, the 10 years begin to run when that child reaches the age of majority.

5. For persons who paid excise taxes for insufficient RMDs for 2021 and 2022, they may be able to request a refund.

The IRS has also stated it will not assert that an excise tax is due for persons who did not take an RMD under the prior rules for 2021 and 2022. The IRS final regulations related to these changes will not apply sooner than 2023.

The changes to these RMD rules are complex, and there are more details not fully covered by this article. If you have questions about RMDs and how they may affect you, contact us.

How to Manage Your Digital Accounts After Your Death– Part 3


If you have preferences about what happens to your digital footprint after your death, you need to take action. Otherwise, your online legacy will be determined for you—and not by you. If you have any online accounts, such as Gmail, Facebook, Instagram, LinkedIn, Apple, or Amazon, you have a digital legacy, and that legacy is yours to preserve or lose.

Following your death, unless you’ve planned ahead, some of your online accounts will survive indefinitely, while others automatically expire after a period of inactivity, and still others have specific processes that let you give family and friends the ability to access and posthumously manage your accounts.

In part one and two of this series, we covered the processes that Facebook, Google, Instagram, Twitter, and Apple offer to manage your digital accounts following your death. Here in part three, we’ll conclude this series by covering the most effective methods for including digital assets in your estate plan.

5 Steps For Including Digital Assets In Your Estate Plan

If you’re like most people, you likely own numerous digital assets, some of which may have significant monetary value, and others which have purely sentimental value. You may even have some digital assets that you’d prefer your family not access at all when you pass away.

To ensure these assets are managed in exactly the way you want, take the following five steps to include this digital property in your estate plan. While many of these tasks you can do yourself, you’ll definitely want to consult with us, your local Personal Family Lawyer® to ensure your estate plan is properly prepared and works exactly as you intend.

01 – Create A Detailed Asset Inventory, With Access Instructions

Start by creating a list of all digital assets you currently own. Then, for each asset, provide detailed information about where the asset is stored and how it can be accessed, including all of the relevant login information and passwords. If you have numerous different accounts, password manager programs, such as LastPass, can simplify this effort.

If you own cryptocurrency, it’s essential that you prepare detailed instructions about how to access it, and ensure that one or more people you trust are aware that you own crypto and know how to find your instructions. Additionally, accessing cryptocurrency often requires complex user identification data and private keys.

Moreover, to effectively manage these assets the person you choose to control your crypto after your death will need to know how to use a variety of digital tools, such as online wallets, digital exchanges, and other programs. Given this, leaving a detailed “How To” guide can be an ideal way to ensure your loved ones can access your digital currency with minimal hassle.

After you’ve created your inventory and access instructions, store these documents in a secure location, with your other estate planning documents, and ensure your fiduciary (executor or trustee) and lawyer know how to access these documents should something happen to you. Finally, back up any digital assets stored in the cloud to a computer, flash drive, or other physical device to make them easier to manage. And remember to update your digital asset inventory regularly to account for any new digital property you acquire or accounts you close.

02 – Add Your Digital Assets To Your Estate Plan

The next step is adding your digital assets to your estate plan. As with other assets, you’ll typically pass your digital property to your loved ones through either a will or a revocable living trust. Meet with us, your Personal Family Lawyer®, to determine which estate planning vehicles are best suited for your particular assets and situation.

From there, specify in your will or trust the person, or persons, you want to inherit each asset, and include detailed instructions for how you’d like each asset managed after your death, if that’s something you’re interested in. On the other hand, some assets might have no value to your family or be something you don’t want them to inherit or even access, so you should specify that those accounts be closed or deleted by your fiduciary.

One thing you should NEVER do is provide the account information, logins, or passwords in your planning documents, where others might read them. This is especially true for wills, which become part of the public record upon your death.

For maximum security, keep this sensitive information in a secure place, and let your fiduciary know how to find and use it. To make securing and managing your digital assets easier, consider using a digital management service, such as Directive Communication Systems, instead of trying to do everything yourself.

It’s also a good idea to include terms in your estate plan allowing your fiduciary to hire an IT consultant if necessary, especially if your fiduciary doesn’t have much technical experience, or if you have particularly valuable digital property. Having a consultant available can enhance your fiduciary’s ability to manage and troubleshoot any challenges that come up.

Alternatively, you can designate a separate co-fiduciary just to manage your digital assets. Known as a digital executor, this individual is specifically tasked with managing your digital assets upon your death. If you have a lot of digital property or you own highly encrypted digital assets, like cryptocurrency, this option can be an optimal solution for safeguarding your online property.

03 – Limit Access

Your estate plan also needs to include instructions for your fiduciary about the specific level of access you want him or her to have. For example, do you want your executor or trustee to be able to read all your emails, texts, and social media posts before deleting them or passing them to your heirs?

If there are any assets you want to limit and/or restrict access to, we can help you add the necessary terms to your estate plan to ensure your wishes will be honored and your privacy protected.

04 – Include Relevant Hardware

Your estate plan should also include provisions for passing on any physical devices—smartphones, computers, tablets, flash drives—on which your digital assets are stored. Having this equipment will make it easier for your fiduciary to manage your online assets. And since the data contained on such hardware can be wiped clean, you can even leave this gear to someone other than the person who inherits the data stored on the devices.

05 – Check Service Providers’ Access Authorization Tools

Review the terms and conditions for each of your online accounts and web-based service providers for how they handle your data after death. As discussed in the first two parts of this series, some platforms have features allowing you to give your family and friends the ability to access, manage, and delete your accounts after your death.

If such functions are offered, use them to document the individual(s) you want to access and manage these accounts. Just make certain those you named to inherit your digital assets using the providers’ tools match the beneficiaries named in your estate plan. If not, the provider will probably give priority access to the person named with its tool, not your estate plan.

Adapt Your Estate Plan To The Evolving Digital Universe

As technology continues to evolve, it’s essential to adapt your estate plan to keep pace with these changes. As your Personal Family Lawyer®, we have the knowledge and experience to not only properly include your traditional assets in your estate plan, but all of your digital assets as well.

Indeed, we are keenly aware of just how valuable your digital property can be, and our Life & Legacy Planning Process is designed to ensure all of your assets—digital or otherwise—are protected, preserved, and passed on seamlessly to your loved ones in the event of your death or incapacity. Furthermore, we can ensure you have the maximum level of privacy, and you stay in full compliance with the latest laws governing the ever-changing digital universe. Contact us today to get started.

Special Announcement: Brandon L. Campbell is Now a Personal Family Lawyer®

Hello! Welcome to my new system for helping your family through crisis in a way that has you enjoy your life to the fullest.

As your neighborhood Personal Family Lawyer®, I am the trusted advisor you’ve been looking for to help you make the very best personal, financial, legal and business decisions for your family throughout your lifetime.

I’m the advisor your family will turn to if you are ever in an accident or any other kind of crisis situation.

In case you do not already know what makes me as a Personal Family Lawyer® different than other lawyers …

I have the needs of growing and busy families like yours in mind. I understand you are FULL with kids, activities, work, and you value ease, efficiency and good, solid straightforward guidance and advice.

To that end, I want to make it as easy as possible to get a vital yet far too often overlooked matter handled – and that’s the matter of what would happen to everyone you love, and everything you own, if you become incapacitated or when you die.

It’s easy to put this off until later. Or to think you’ve already got it handled if you’ve created a will or trust in the past. But the truth is that something can happen in an instant. And if you’ve done planning in the past, now is the time to review.

So either way it’s likely time to come in and meet with me so you can be sure that your kids would be taken care of the way you want, by the people you want, and to confirm none of your assets would be lost to the State Department of Unclaimed Property or get stuck in court or conflict.

It’s my job to make sure your loved one’s know what to do if and when anything happens to you, and that it’s as easy as possible for them.

To that end…

I have a gift for you – a NO CHARGE Family Wealth Planning Session… (Regularly $750) now until the end of 2022.

To introduce you to the many benefits of working with me, I invite you to come in for a NO CHARGE Family Wealth Planning Session. During this session, you will discover how easy it is to get your financial ducks in a row and do the right thing by the people you love.

During your no-charge Session, we’ll look at everything you own and everyone you love, and what would happen to all of it if something happens to you now. Then if anything needs to change, we’ll design a plan to make sure it all goes the way you want.

By planning for your future now, you’ll maximize what you pass on to the people you love and the ease with which they receive it.

This is not just about your money, but really about what matters most – how the people you love are cared for, how they will receive what you’ve worked so hard to create and what’s most frequently lost – your intellectual, spiritual and human assets.

And, it’s about facing death with courage and honesty. May it be a long way off, and whenever it is, may you and your loved ones be prepared.

Call me now at 978-745-5551 or click right here to find out how to sign up for your Family Wealth Planning Session today. It’s my gift to you.

Warm regards,

Brandon L. Campbell

How to Manage Your Digital Accounts After Your Death– Part 1


If you have preferences about what happens to your digital footprint after your death, you need to take action. Otherwise, your online legacy will be determined for you—and not by you. If you have any online accounts, such as Gmail, Facebook, Instagram, LinkedIn, Apple, or Amazon, you have a digital legacy, and that legacy is yours to preserve or lose.

Following your death, unless you’ve planned ahead, some of your online accounts will survive indefinitely, while others automatically expire after a period of inactivity, and still, others have specific processes that let you give family and friends the ability to access and posthumously manage your accounts.

Because social media and other digital platforms are such a ubiquitous part of our daily routine, and they can offer intimate snapshots of your life, these digital assets can serve as a key part of your legacy—one you may want to protect after your death. Alternatively, you may prefer to keep your online history private and have it permanently deleted once you’re gone.

Whether you want to preserve your digital footprint or erase it entirely, you need to plan ahead to ensure your wishes are properly carried out. With this in mind, here we’ll discuss how some of the most popular digital platforms handle your account once you log off for the final time. From there, we’ll cover how to include these digital assets in your estate plan to ensure they are properly accounted for, managed, and passed on in the event of your incapacity or death.


Unless you choose to have your account deleted, Facebook offers what’s known as a “Legacy Contact” for managing your profile after death. Using a Legacy Contact, you can choose someone to control your account’s operation and functionality after you pass away.

Following your death, Facebook first memorializes your account. Once memorialized, the word “Remembering” is added to your profile name, and only confirmed friends can view your profile or find it in a search. Depending on your privacy settings, friends and family members can post content and share memories on your memorialized timeline.

However, memorialized accounts are locked, so your original content cannot be altered or deleted, even if someone has your password. Your Facebook account can be memorialized regardless of whether or not you select a legacy contact. To have your account memorialized, Facebook simply requires your family or friends to provide proof of your death using a special request form and evidence of death, such as an obituary.

If you’ve chosen a Legacy Contact, that individual can manage your memorialized account based on the permissions you’ve granted him or her. Some of the actions your legacy contact can perform include writing pinned posts, choosing who can view and post tributes on your profile, responding to new friend requests, updating your cover and profile images, and requesting your account’s closure.

However, there are certain actions your Legacy Contact will not be able to perform. This includes logging into your account as you, viewing your direct messages, removing your friends, or making new friend requests.


The Internet titan Google owns several of the most popular web services, including Gmail, YouTube, Google Drive, Google Photos, and Google Play. In order to request how you want these accounts managed after your death, Google offers a function called Inactive Account Manager.

Using this function, you must first choose the amount of time—3, 6, 12, or 18 months—that must pass without any activity before the Inactive Account Manager service is triggered. The service lets you select up to 10 different people, who can access your account once Inactive Account Manager goes into effect. You can specify the data those individuals will be allowed to access, including things like photos, contacts, emails, documents, and other content.

With Inactive Account Manager, you can also opt to have your account deleted. If so, you can have Google simply delete all of your content, or you can share your content with your designated contacts before deletion. If you share your content, your contacts will be able to access and download data from your account for 3 months before it’s deleted.

Should you choose to have your account deleted, your Gmail messages will be permanently deleted, and all data and content in all of your other Google-based accounts like YouTube, Google Drive, and Google Photos will also be deleted. If you die without setting up Inactive Account Manager, Google will automatically delete your account following two years of inactivity.

Finally, because Google owns YouTube, and YouTube videos have the potential to earn revenue indefinitely, it’s vital that you use the Inactive Account Manager to protect this potentially lucrative asset following your death. Additionally, you’ll also want to include these intangible assets in your estate plan, so they can be protected and passed on to your loved ones in the most beneficial way possible.

On that note, be sure to check back soon to read part two of this series. In that article, we’ll continue our discussion about how the most popular internet platforms deal with your account after your death. From there, we’ll conclude the series by covering the most effective methods for including these accounts—and other types of digital assets—in your estate plan.

Until then, if you need support or advice on the best ways to protect and pass on your assets—digital or otherwise—reach out to the Law Office of Brandon L. Campbell to discuss your options. Our Life & Legacy Planning Process is designed to ensure that all of your tangible and intangible assets, including your family legacy, are preserved and passed on seamlessly in the event of your death or incapacity. Contact us today to learn more.

Trusts & Taxes: What You Need to Know

People often come to us curious — or confused — about the role trusts play in saving on taxes. Given how frequently this issue comes up, here we’re going to explain the tax implications associated with different types of trusts in order to clarify this issue. Of course, if you need further clarification about trusts, taxes, or any other issue related to estate planning, meet with us, your Personal Family Lawyer® for additional guidance.


There are two primary types of trusts — revocable living trusts and irrevocable trusts — and each one comes with different tax consequences.


A revocable living trust, also known simply as a living trust, is by far the most commonly used form of trust in estate planning. And as long as you are living, there is absolutely no tax impact of creating a living trust.

A living trust uses your Social Security Number as its tax identifier, and this type of trust is not a separate entity from you for tax purposes. However, a living trust is a separate entity from you for the purpose of avoiding the court process called probate, and this is where the confusion regarding taxes often comes from. But before we explain the tax implications of a living trust, let’s first describe how a living trust works.

A living trust is simply an agreement between a person known as the grantor, who gives assets to a person or entity known as a trustee, to hold those assets for the benefit of a beneficiary(s). In the case of a revocable living trust, the reason there are no tax consequences is because you can revoke the trust agreement or take the assets back from the trustee at any time, for any reason. In fact, as long as you are living, you can change the terms of the trust, change the trustee, change the beneficiaries, or terminate the trust altogether.

However, upon your death, a revocable living trust becomes irrevocable, and this is when tax consequences come into play. Following your death, the trustee you’ve named will step in and take over management of the trust assets, and one of the first things that your trustee will do is apply for a tax ID number for the trust. At this point, the trust becomes a taxable entity, and any income earned inside of the trust that is not distributed in that year would be subject to income taxes, at the taxable rates of the trust (or at the tax rates of the beneficiaries, if income is distributed to the beneficiaries).


An irrevocable trust is created when you make a gift to a trustee to hold assets for the benefit of the beneficiary, and you cannot take back the gift you’ve made to that individual.
When you create an irrevocable trust, either during your lifetime, or at death through a testamentary trust (a trust that arises at the time of your death through your will), or through a revocable living trust creating during your lifetime, the trust is a separate tax-paying entity, and it is either subject to income tax on the earnings of the trust at the rates of the trust or at the rates of the beneficiaries.

Unlike a revocable living trust, an irrevocable trust is (as the name implies) irrevocable. This means that the trust’s terms cannot be changed, and the trust cannot be terminated once it’s been executed. When you transfer assets into an irrevocable trust, you relinquish all ownership of those assets, and your chosen trustee takes total control of the assets transferred into the name of the trust. Because you no longer own the assets held by the trust, those assets are no longer considered part of your estate, and as long as the trust has been properly maintained, the assets held by the trust are also protected from lawsuits, creditors, divorce, serious illness and accidents, and even bankruptcy.

However, as mentioned earlier, irrevocable trusts also come with tax consequences. As of 2022, the income earned by an irrevocable trust is taxed at the highest individual tax bracket of 37% as soon as the undistributed taxable income reaches more than $13,450. To avoid this high tax rate, in some cases, an irrevocable trust can be prepared so that the tax consequences pass through to the beneficiary and are taxed at his or her rates, which are typically much lower.

We often set up a trust in this way when creating a Lifetime Asset Protection Trust for a beneficiary. When set up like this, the trust can provide the beneficiary with protection from common life events, such as serious debt, divorce, debilitating illness, crippling accidents, lawsuits, and bankruptcy, without being taxed at such a high rate on such little income.

If you have a trust set up, and would like us to review its income tax consequences for your loved ones upon your death, meet with us, your local Personal Family Lawyer®.


The estate tax is a tax on the value of a person’s assets at the time of their death. Upon your death, if the total value of your estate is above a certain threshold amount, known as the federal estate tax exemption, the IRS requires your estate to pay a tax, known as the estate tax, before any assets can be passed to your beneficiaries.
As of 2022, the federal estate tax exemption is $12.06 million for individuals ($24.12 million for married couples). Simply put, if you die in 2022, and your assets are worth $12.06 million or less, your estate won’t owe any federal estate tax. However, if your estate is worth more than $12.06 million, the amount of your assets that are greater than $12.06 million will be taxed at a whopping 40% tax rate.

You can reduce your estate tax liability—or even eliminate it all together—by using various estate planning strategies. Most of these strategies are fairly complex and involve the use of irrevocable trusts, but such strategies are without question worth it, if you can save your family such a massive tax bill. To learn how to save your family from such a major tax burden, meet with us, your Personal Family Lawyer® to discuss your options.

And please note, we are only speaking about the federal estate tax here. Massachusetts has its own estate tax, which is separate from the federal estate tax. We’ll cover the specifics of what happens in our state regarding your estate tax, when we have a Family Wealth Planning Session. Give us a call to schedule yours, if you have not yet had a Planning Session with us.


The current $12.06 million estate tax exemption is set to expire on Jan. 1, 2026, and return to its previous level of $5 million, which when adjusted for inflation is expected to be around $6.03 million. Here’s one thing we know for sure: We don’t know what the estate tax exemption will be at the time of your death, and we also don’t know what the value of your assets will be at the time of your death. Because of this, when you plan with us, we will ensure that we put in place planning strategies to protect your estate from estate taxes, regardless of the amount of the estate tax exemption or the size of your assets. For more information on the estate tax, click the following link: https://www.pressenterprise.com/2021/11/07/gift-money-now-before-estate-tax-laws-sunset-in-2025/


If you are trying to decide whether a revocable living trust, irrevocable trust, Lifetime Asset Protection Trust, or some other estate planning vehicle is the right solution for you and your family, meet with us, as your Personal Family Lawyer®. We will support you in making that decision, so your estate can provide the maximum benefit for the people you love most, while paying the least amount of taxes possible. Call us today to schedule your visit.

This article is a service of the Law Office of Brandon L. Campbell, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

5 Smart Ways to Pay for Your Funeral that Won’t Leave Your Family to Foot the Bill

With the cost of a funeral averaging between $7,000 and $12,000 and steadily increasing each year, at the very least your estate plan should include enough money to cover this final expense. And if you are thinking of simply setting aside money in your will to cover your funeral expenses, you should seriously reconsider, as paying for your funeral through your will can create unnecessary burdens for your loved ones.

Although you can leave money in your will to pay for your funeral expenses, your family won’t be able to access those funds until your estate goes through the court process of probate, which can last months or even years. And since most funeral providers require full payment upfront, your family will likely have to cover your funeral costs out of pocket. Moreover, your loved ones will have to deal with all of this while grieving your death.

If you want to avoid burdening your family with such a hefty bill and the stress that comes with it, you need to use estate planning strategies that do not require probate. While you should meet with us, your Personal Family Lawyer® to find the solution best suited for your unique situation, the following 5 options are among the most commonly used methods for covering funeral expenses without the necessity for probate.

You can purchase a new life insurance policy or add extra coverage to your existing policy to cover funeral expenses. Unlike money left in your will, an insurance policy does not go through probate, and it will pay the death benefit to the named beneficiary as soon as your death certificate is filed with the insurance company.

In addition to traditional insurance, you can also purchase burial insurance, which is specifically designed to cover funeral expenses. Also known as “final expense”, “memorial” and “preneed” insurance, such policies do not require a medical exam. However, you’ll often pay far more in premiums than what the policy actually pays out.

In fact, due to the hefty premiums and the fact such policies are sold mostly to the poor and uneducated, consumer advocate groups like the Consumer Federation of America consider burial insurance a bad idea and even predatory in some cases due to the fact that these policies are often sold to lower income populations.

One final point about using insurance to pay for your funeral: If you have any type of insurance to cover your funeral, it’s crucial that your family knows about it. Far too often, insurance policies are never cashed in because the family didn’t know they existed. Don’t let this happen to you—make sure your family knows about any insurance policies you have as well as how to locate the necessary paperwork.

Many funeral homes let you pay for your funeral services in advance, either in a single lump sum or through installments. Also known as pre-need plans, the funeral provider typically puts your money in a trust that pays out upon your death, or buys a burial insurance policy, with itself as the beneficiary.

While prepaid plans may seem like a convenient way to cover your funeral expenses, these plans can have serious drawbacks. As mentioned earlier, if the funeral provider buys burial insurance, you’re likely to see massive premiums compared to what the plan actually pays out. And if they use a trust, the plan might not actually cover the full cost of the funeral, leaving your family on the hook for the difference. Plus, most states have inadequate laws protecting funds in such plans, putting your money at risk if the funeral provider closes or is bought out by another company.

In fact, these plans are considered so risky, the Funeral Consumers Alliance (FCA), a nonprofit industry watchdog group, advises against purchasing such plans. The only instance where prepaid plans are a good idea, according to the FCA, is if you are facing a Medicaid spend down before going into a nursing home. This is because prepaid funeral plans funded through irrevocable trusts are not considered a countable asset for Medicaid eligibility purposes.

That said, if you’re looking to buy a prepaid funeral plan in order to qualify for Medicaid, be sure to consult with us first, as not all pre-paid funeral plans are actually Medicaid compliant, even if the funeral home says they are. Moreover, if the irrevocable trust is not set up correctly, it may violate Medicaid’s look-back period, which can delay your eligibility for benefits.

Many banks offer payable-on-death (POD) accounts, sometimes called Totten Trusts, that you can set up to fund your funeral expenses. The account’s named beneficiary can only access the money upon your death, but you can deposit or withdraw money at any time.

A POD account does not go through probate, so the beneficiary can access the money once your death certificate is issued. POD accounts are FDIC-insured, but such accounts are treated as countable assets by Medicaid, and the interest is subject to income tax.

Another option is to simply open a joint savings account with the person handling your funeral expenses and give them rights of survivorship. However, this gives the person access to your money while you’re alive too, which puts your money at risk if the person goes into debt or gets sued and their creditors come after your account to pay the other person’s debt.

Given this risk, we recommend you consider other options that will allow you to pay your funeral expenses, without leaving your finances vulnerable to another person’s mistakes or poor money management.

When you work with us, as your Personal Family Lawyer®, you don’t need to buy a pre-built trust from a funeral provider. Instead, we can create a customized living trust that allows you to control the funds until your death and name a successor trustee, who is legally bound to use the trust funds to pay for your funeral expenses exactly as the trust terms stipulate.

Furthermore, you can change the terms of your living trust at any time, and you can even dissolve the trust if you need the money for other purposes. Alternatively, if you need an irrevocable trust to help qualify for Medicaid, we can create that type of trust as well, while ensuring the trust stays totally compliant with all of Medicaid’s requirements, so you don’t run afoul of the program’s many complex requirements.

If you are interested in creating a trust to cover your funeral expenses, meet with us, your Personal Family Lawyer® to discuss the options that are best suited for your intended purpose, budget, and family situation.

Although thinking about your eventual death is never easy, with the proper planning, you can make dealing with the aftermath of your death significantly easier for the loved ones you leave behind. To avoid needlessly burdening your family with the expense and stress of planning and paying for your funeral, make sure your estate plan includes the necessary funds to cover this expense, and be sure to use an estate planning strategy that will allow your family to access these funds as quickly and easily as possible—ideally by using an option that avoids probate.

With so many different options to choose from, consult with us, your Personal Family Lawyer® to find an estate planning vehicle that is best suited for your particular situation. With our guidance and support, we will develop a planning strategy that includes adequate funding to ensure your funeral services are handled in the exact manner you desire—and your family won’t be forced to foot the bill. Contact us today to learn more.

This article is a service of the Law Office of Brandon L. Campbell, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

No Will? You’re Putting Your Kids at Risk

Many people delay the conversation or thoughts of having to prepare a will. Confronting the possibility of one’s death is not easy. However, as the recent death of Anne Heche shows us, not having a will can place a significant burden on your children and cause undesirable complications. Even if difficult, planning ahead may be a better solution than the alternative.

What Happened With Actress Anne Heche?

Anne Heche’s case is a good example of why a person may want to consider creating a will sooner rather than later. Heche was divorced with two children from different relationships when she passed away. Her eldest son is 20 years old, but her younger son is still a minor.

Although they are assumed to be her sole heirs, only her oldest son is of age to administer her estate. He has filed a petition for a guardian ad litem to be put in place to protect his younger brother’s interests. The guardian ad litem may be a financial burden to Heche’s estate, and the costs of securing this professional will potentially reduce the assets available to her sons.

Even though her eldest son is dealing with his mother’s estate, this is undoubtedly very difficult for a person to go through at such a young age. Heche’s eldest son likely will not be able to do this all on his own and will need the services of a probate attorney — likely further increasing the costs of administering her estate and depleting how much is left for her children.

It has also been reported that an inventory and appraisal of her estate is needed to determine its worth and what assets she had. This process requires further professional involvement and fees that her estate must pay. In addition, it is possible that the father of her youngest son may seek to intervene in the estate’s administration to ensure he is treated fairly. Litigation costs could rack up quickly if there is any disagreement related to this.

Preparing a will and other estate planning documents can make legal proceedings significantly less complex and expensive and keep your situation as private as possible. It can also make it easier for your loved ones to know exactly what you want to happen to your assets and possessions.

Who Inherits When You Die Without a Will?

Many people do not realize that if you pass away without a will, your local state laws on intestacy will determine who qualifies as your heirs and inherits your property.

For example, in many states, if a person passes away unmarried but with children, the children will inherit everything. But what if the person had a long-term partner or was engaged to be married? They may have wanted their significant other to inherit some of their assets, but a “default” state law may lead to a different result. Or, what if you have no living children, siblings, parents, or spouse? Your property may go to the government instead of friends, grandchildren, nieces, or nephews. Having a will prevents these scenarios from happening.

Choose a Guardian for Your Children

Another benefit parents should consider is their ability to choose a guardian for their children in advance.

This matters, for example, when the other parent is not living or cannot be located. If a person does not set forth their wishes ahead of time, multiple parties may step up after a person’s death and argue over who should care for any minor children.

A court may be tasked with making this decision, and it may not be what you would have wanted. This can be expensive, traumatic for all involved, and a long process. Courts will generally try to appoint the individual a person has selected if your wishes are in a will or other planning document.

The Bottom Line

The bottom line is that having estate planning documents in place makes your wishes more likely to be honored and less likely that a court will decide what happens. This is also true where you may be incapacitated and unable to voice your wishes. While Anne Heche’s situation is not unusual, it is avoidable.

For information on preparing a will or other estate planning documents, contact our office.

Be Cautious of Generic Health Care Proxy Forms

Doctors, nurses, and hospital staff work hard to care for their patients when they are sick or hurt. However, even when a procedure is done to save a patient’s life, a hospital cannot act without patient consent. If a patient cannot speak for themselves and express their wishes, the hospital relies on what is known as a health care proxy form.

If you have ever been admitted to the hospital, you have likely been asked to sign a health care proxy form. Hospitals use proxy forms to obtain consent in advance from patients in case they become incapacitated and medical professionals need to administer medication, perform surgery, or otherwise treat the patient. However, the generic version used by most hospitals can fall short for many patients and may infringe upon their autonomy. Always be cautious when you sign a boilerplate document.

What Is a Health Care Proxy?

A health care proxy is a form that a patient uses to name an agent who will carry out their wishes regarding medical care if the patient cannot speak for themselves. Having a health care proxy specifically tailored to your needs can be important. For example, you can outline what kind of treatment you do — or do not want — if you become terminally ill or are in a coma; at the same time, you can indicate other wishes, such as whether you would want pain medication administered or your organs donated.

The agent only has the power to make decisions on the patient's behalf once a doctor confirms that the patient requires medical attention but cannot advocate for themselves. The agent's power ends when the patient can once again state their treatment preferences. Appointing an alternate agent is a good idea, too.

What Is the Problem with Signing a Generic Health Care Proxy?

A health care proxy is important because it instructs your agent to speak for you and, if well-written, it will give specific instructions about what medical treatments you want and which treatments you refuse. An estate plan is not complete unless it includes a health care proxy form.

The problem with relying on the generic health care proxy form the hospital provides is that, in some cases, these forms will not take your individual wishes into account. Every person treated at the emergency room or admitted into the hospital signs the same health care proxy form. Anything that could have a life-or-death consequence should be tailored to you and specifically address your needs.

If you have a health care proxy, inform the hospital staff so they can make the document a part of your medical record.

How Can I Complete My Own Health Care Proxy?

Part of creating an estate plan is having a health care proxy drafted. If you have not created an estate plan or health care proxy, contact your attorney to draft the estate planning documents that you need.

Estate Planning After Divorce

So, you’re officially divorced. In starting this new chapter of life, you should update your estate planning documents as soon as possible. You may no longer be legally married, but divorce does not automatically remove your prior spouse from your will, trust, or beneficiary designations. Here are some items to consider updating:

Change Your Advance Directives

When you engage in estate planning, it is standard to complete forms such as a health care proxy or living will. Often, spouses will choose each other as their agents for making health care decisions if they become incapacitated. After a divorce, your ex may be the last person you want handling these matters. Change your documents to appoint someone you trust.

Update Your Power of Attorney

Another document you may have previously executed is a power of attorney. This can give another person a great deal of control over your assets and personal and financial affairs. If your current power of attorney names your prior spouse as your agent, you can revoke it and sign a new one choosing a different person to act as your agent.

Amend Your Will and Trust

Many couples designate their partner as the executor of their will. Your ex may also be listed as a beneficiary of your will. If you do not want your former spouse to have a say over how your assets are handled or to receive any inheritance, it is important to review and amend your will now to take them out. The same goes for any trust you may have created where your ex is the trustee or a beneficiary.

Guardianship of Your Minor Children

If you have concerns about your prior spouse’s ability to be a guardian to your minor children, there may be steps you can take to mitigate any instability a divorce may have brought to the situation.

One option is to set up a trust for your children that will protect assets from being irresponsibly depleted. Life insurance amounts or other assets placed in a trust will be managed by a person whom you can name as trustee. This will prevent the other parent, who could otherwise be in control of minor children’s finances, from accessing certain funds.

Be Aware of What Insurance You Are Required to Maintain

Many divorce settlements set forth that one spouse maintains life insurance and specifies who shall be a beneficiary of the policy. You should ensure your current life insurance policies not only comply with your divorce agreement, but also are not in danger of lapsing.

The same goes for medical insurance. If you are required to maintain medical insurance in a certain manner, review your plan to ensure the correct parties are covered and that it is in good standing.

Failure to comply with your divorce agreement can cause you to wind up back in court.

Review Your Beneficiary Designations

If you are not required to maintain your ex as a beneficiary on your life insurance or retirement accounts, now is the time to update your designations. You should contact your insurance company or retirement administrator to make these changes. Upon your passing, the funds will go to whomever is listed as a beneficiary, regardless of a divorce proceeding.

Consult a New Estate Planner

The best thing you can do after your divorce is work with an estate planner to review your current documents and update them appropriately. Ideally, this person should have no connection to your prior spouse. Keep a copy of your divorce decree and settlement agreement handy. An estate planner will need to review it to evaluate what you need going forward.