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Understanding ABLE Accounts: A Valuable Resource for Individuals with Disabilities As a special needs attorney, I am committed to providing my clients and referral sources with the most up-to-date and beneficial information. Today, I want to discuss ABLE accounts, a powerful tool designed to help individuals with disabilities achieve financial independence and security. What Are ABLE Accounts? ABLE accounts, established under the Achieving a Better Life Experience (ABLE) Act of 2014, are tax-advantaged savings accounts specifically for individuals with disabilities. These accounts allow eligible individuals to save money for disability-related expenses without jeopardizing their eligibility for crucial public benefits like Supplemental Security Income (SSI) and Medicaid. Benefits of ABLE Accounts ABLE accounts offer several significant benefits: Tax Advantages: Contributions to ABLE accounts grow tax-free, and withdrawals for qualified disability expenses are also tax-free. Financial Security: Funds in ABLE accounts are not counted as resources for federal means-tested benefits, allowing individuals to save without losing their eligibility for SSI and Medicaid. Flexibility: ABLE accounts can be used for a wide range of disability-related expenses, including education, housing, transportation, health care, and more. Eligibility to Open an ABLE Account To be eligible to open an ABLE account, an individual must meet the following criteria: Disability Onset Before Age 26: The individual must have a disability that began before the age of 26. However, starting January 1, 2026, the age at which a qualified disability must have occurred will increase from age 26 to age 46. Receiving Benefits: The individual must be receiving SSI or Social Security Disability Insurance (SSDI) benefits, or have a signed disability certification from a licensed physician. How to Prove Disability for ABLE Accounts If an individual does not receive disability-based benefits from the Social Security Administration, they can prove their disability by obtaining a signed disability certification from a licensed physician. This certification must indicate that the individual meets or equals the disability criteria[1]. Who Can Create an ABLE Account if the Beneficiary is Incapacitated? If the beneficiary is unable to open an account on their own, an Authorized Legal Representative (ALR) can do it for them. An ALR can be anyone selected by the eligible beneficiary with legal capacity, anyone with Power of Attorney, a conservator or legal guardian, a spouse, parent, sibling, grandparent, or a representative payee. ABLE accounts are a valuable resource for individuals with disabilities, providing financial security and flexibility while preserving eligibility for essential public benefits. If you have any questions or need assistance with opening an ABLE account, please feel free to reach out to me.

Navigating the Complexities of Fiduciary Income Tax Return Preparation Preparing fiduciary income tax returns for estates and trusts can be a daunting task, filled with intricate details and numerous elections that can significantly impact the tax outcomes. As tax professionals, we understand the complexities involved and the importance of making informed decisions to optimize tax benefits and compliance. Key Considerations in Fiduciary Income Tax Return Preparation Choice of Fiscal Year: Estates have the flexibility to choose any month for their fiscal year-end, which can be advantageous for deferring income and accelerating deductions. This decision is made when filing Form 1041, not when applying for the estate EIN or filing an extension. IRC 645 Election: This election allows a qualified revocable trust to be treated as part of the estate for income tax purposes, reducing the administrative burden of filing separate returns and enabling the trust to benefit from certain tax provisions available only to estates. 65-Day Election (IRC 663(b)): Estates and complex trusts can elect to treat distributions made within the first 65 days of the subsequent tax year as having been made in the prior year. This election can help shift income out of compressed trust/estate tax brackets to beneficiaries, potentially avoiding higher tax rates. Property Distributions (IRC 643(e)(3)): This election allows estates to recognize gain (but not loss) on the distribution of property to residual beneficiaries, treating the asset as "sold" on the distribution date. This can be beneficial in certain tax situations, such as offsetting distribution gains with capital losses. Estate Tax Deduction (IRC 691(c)): Estates can take an income tax deduction for estate tax paid on items of income in respect of a decedent (IRD). This deduction is available only in the tax years in which IRD is included in income. Deducting Expenses on Form 1041 vs. Form 706: It's crucial to compare the estate tax savings versus income tax savings when deciding where to deduct expenses. Considerations include limitations on deductions, timing of payments, and the impact on marital and charitable deductions. Why Seek Professional Assistance? Given the complexity of fiduciary income tax return preparation, it is highly advisable for clients to seek professional assistance. Tax professionals can help navigate the various elections and ensure that all decisions are made in the best interest of the estate or trust and its beneficiaries. Proper planning and execution can lead to significant tax savings and compliance with all relevant tax laws. If you have any questions or need assistance with fiduciary income tax return preparation, please feel free to reach out. Our team of experts is here to help you through every step of the process.

The Benefits of Joint Spousal Trusts in Estate Planning As an ACTEC Fellow, I often get asked about the best strategies for estate planning, and one topic that frequently comes up is the use of joint spousal trusts (JSTs). These trusts offer a unique blend of simplicity, efficiency, and strategic advantages that can be highly beneficial for some married couples. Why Consider a Joint Spousal Trust? Joint spousal trusts provide a streamlined approach to managing and transferring assets. By consolidating assets into a single trust, couples can avoid the complexities and potential pitfalls of maintaining separate trusts. This can be particularly advantageous in terms of administrative ease and cost savings. Key Benefits of Joint Spousal Trusts ·????????Simplicity and Efficiency: A single joint trust is easier for clients to understand and manage compared to having each spouse create their own trust. This simplicity extends to the administration of the trust during the couple's lifetime and after the death of the first spouse. ·????????Tax and Asset Protection: JSTs can offer significant tax advantages and asset protection opportunities. For example, giving the first spouse to die a broad general power of appointment over all property in the trust can facilitate fully funding the credit shelter trust at the first spouse’s death without having to worry about allocating assets between the spouses. ·????????Avoiding Asset Splits: Clients often feel more comfortable seeing both of their names on the trust property, rather than splitting property between two separate trusts. This can help avoid issues of unequal trusts or the need for interspousal transfers before the trusts are created. ·????????Full Basis Step-Up: Using a joint trust with a general power of appointment for the first spouse to die over all of the trust assets provides an argument that all of the trust assets should receive a basis adjustment at the first spouse’s death. ·????????Planning for Wealth Variations and Community Property Trusts:?In Virginia, Joint spousal trusts can be structured to retain the favorable characteristics of tenancy by the entireties. This unique form of ownership permits the couple to own the whole of the property, and neither spouse can dispose of the property acting alone. Conclusion Joint spousal trusts present a valuable solution for married couples aiming to streamline their estate planning while optimizing tax advantages and safeguarding assets. It is essential to recognize that there is no universal estate plan. Therefore, consulting with a qualified estate planning attorney is crucial in determining the most suitable strategy for your particular circumstances.

Hook Law was proud to host a Valentine’s Tea & Seminar for Suffolk Business Women, where attorneys Rachel H. Snead and Emily Martin had the honor of speaking. Our accomplished attorneys shared valuable insights and actionable strategies on Estate, Healthcare, and Wealth Planning, empowering attendees to protect what matters most: your family, your future, and everything you love ?? Thank you to all the Suffolk Business Women who joined us and made this event a true success! We’re honored to be part of your journey in securing a brighter, more protected future. Legacy at Willow Pond

MAGI Medicaid: A Crucial Tool for Special Needs Planning in Virginia and Beyond MAGI (Modified Adjusted Gross Income) Medicaid has become an essential component of healthcare coverage for many Americans, including those with special needs. In Virginia, MAGI methodology is used to determine eligibility for most Medicaid covered groups, FAMIS (Family Access to Medical Insurance Security Plan), and Premium Tax Credits through Virginia's Insurance Marketplace. ?Virginia MAGI Medicaid As of January 1, 2024, Virginia has implemented significant changes to MAGI Medicaid: 1. All children under 19 receive 12 months of continuous eligibility, with few exceptions. 2. Adults aged 19-64 without Medicare are evaluated using MAGI income methodology. 3. MAGI Adults are not subject to a resource test unless requesting Medicaid payment for Long Term Care (LTC) or Long Term Services and Supports (LTSS). ?Long Term Care Benefits For individuals with special needs requiring long-term care, MAGI Medicaid offers crucial benefits: - MAGI-eligible individuals can qualify for both short-term and long-term nursing home care without a disability determination. - For long-term nursing home care, MAGI individuals are automatically considered "medically frail". However, it's important to note that while MAGI individuals don't face a resource test for general Medicaid eligibility, they may be subject to asset reviews for long-term care coverage: - A 60-month look-back period applies for asset transfers when seeking Medicaid payment for nursing home care. - The home equity limit applies to MAGI individuals needing long-term care. ?MAGI Medicaid: One Tool Among Many While MAGI Medicaid is a valuable resource, it's crucial to remember that it's just one tool in the comprehensive special needs planning toolkit. Families of individuals with special needs should consider a range of strategies, including: 1. Supplemental Needs Trusts 2. ABLE Accounts 3. Estate planning and wealth transfer strategies 4. Long-term care planning ?The Importance of Expert Guidance Navigating the complex landscape of special needs planning requires expertise and experience. Hook Law, a member of the prestigious Special Needs Alliance, offers tailored solutions for individuals with special needs and their families. By working with specialized attorneys like those at Hook Law, families can ensure they're maximizing benefits, protecting assets, and securing lifelong care for their loved ones with special needs. In conclusion, while MAGI Medicaid offers significant benefits for individuals with special needs, it's essential to approach special needs planning holistically. Seek the guidance of experienced professionals to create a comprehensive plan that secures your loved one's future and provides peace of mind for your family.

Hook Law’s own attorney, Edna Colucci, collaborates with Huffman & Huffman Brothers-in-Law, P.L.L.C. to tackle the hard-hitting conversations on the importance of estate planning and being prepared for the unexpected

Elder Law attorneys are frequently consulted concerning remedying fraud, mistake or breach of fiduciary duties by agents or trustees. Constructive trusts are a valuable remedy for fraud, mistake, or breach of fiduciary duties under Virginia law. Constructive trusts are an equitable remedy designed to prevent fraud or injustice by imposing a trust on property held by someone who should not, in good conscience, retain it.. Statement of Facts Constructive trusts are utilized in situations where property has been acquired through fraud, mistake, or breach of fiduciary duty. They are imposed by courts to prevent unjust enrichment and ensure that property is held in accordance with equitable principles. Legal Standards/Rules In Virginia, a constructive trust is an equitable remedy created by operation of law to prevent fraud or injustice.It arises independently of the intention of the parties involved and is fastened upon the conscience of the person holding the legal estate to prevent what would otherwise be a fraud.,. Constructive trusts can be imposed not only when property has been acquired by fraud or improper means but also when it has been properly acquired but retaining it would be contrary to equitable principles.,. Analysis Constructive trusts in Virginia can arise from various circumstances, including fraud, mistake, and breach of fiduciary duty. The Supreme Court of Virginia has consistently held that constructive trusts are imposed to prevent fraud or injustice, regardless of the intention of the parties involved.?This means that even if the property was acquired without any fraudulent intent, a constructive trust can still be imposed if retaining the property would be inequitable.,. For instance, a constructive trust may be imposed when property is given or devised to a defendant in breach of a donor's or testator's contract with a plaintiff, even if the transfer was not the result of a breach of fiduciary duty or actual fraud, and the recipient had no knowledge of the wrongdoing. ,.This principle ensures that the property is held in accordance with the original intent and equitable principles, preventing unjust enrichment. The evidence required to establish a constructive trust must be clear and convincing.This high standard of proof ensures that the imposition of a constructive trust is justified and supported by substantial evidence.,.Parol evidence, or oral testimony, can be used to prove the existence of a constructive trust, provided it meets the clear and convincing standard.. Conclusion Constructive trusts serve as a crucial remedy in Virginia law to address situations of fraud, mistake, or breach of fiduciary duty. They are imposed by courts to prevent unjust enrichment and ensure that property is held in accordance with equitable principles.?

Introducing Kelly Roulaine, Hook Law’s new Director of Operations. Kelly brings more than 15 years of financial and wealth management experience to the firm. Her expertise further strengthens our commitment to delivering exceptional service to our clients. Ms. Roulaine steps into this key role as Tejal Desai transitions to CEO and Managing Partner, ensuring continuity and a bright future for Hook Law. Welcome, Kelly!

When considering a Medicaid Asset Protection Trust (MAPT) for pre-need Medicaid planning, key factors include: ?Understanding MAPTs MAPTs are irrevocable trusts designed to protect assets from Medicaid eligibility calculations. They feature: - Irrevocability - Independent trustee - Income-only structure for grantor - Asset protection from Medicaid spend-down ?Factors to Consider ?Timing and Look-Back Period Establish MAPTs at least five years before applying for Medicaid to avoid penalties. ?Current Health and Care Needs Assess likelihood of needing long-term care soon. ?Asset Evaluation Consider types and values of assets to protect. ?Income Considerations Be aware of Medicaid's income limits. ?Loss of Control Evaluate comfort with giving up direct asset control. ?Family Dynamics Choose trustworthy trustees and consider impact on relationships. ?Alternative Strategies Explore other Medicaid planning options. ?State-Specific Rules Understand local regulations on MAPTs and Medicaid eligibility. ?Tax Implications Consider potential tax consequences of asset transfers. ?Estate Recovery Protection MAPTs can protect assets from Medicaid estate recovery after death. Consult legal and financial professionals to determine if a MAPT suits your Medicaid planning needs.

The Housing Opportunity Through Modernization Act (HOTMA) has brought significant changes to how special needs trusts (SNTs) interact with housing assistance programs, particularly for individuals with disabilities using housing vouchers. This development presents new opportunities and considerations for creating trusts that can effectively support beneficiaries while maintaining their eligibility for crucial housing subsidies ?Key Changes Under HOTMA Trust Distributions and Income Calculations The final HOTMA regulations, effective January 1, 2024, have introduced a crucial distinction in how trust distributions are treated for income calculations in housing assistance programs[4][6]: - Distributions of principal from irrevocable trusts, including SNTs, are now excluded from income calculations for low-income housing eligibility - However, distributions of income earned by the trust (eg, interest) are still counted as household income This change allows individuals with disabilities to benefit from their SNTs without jeopardizing their housing assistance, provided the distributions are carefully managed ?Strategies for Trust Creation When creating trusts for individuals with disabilities who use housing vouchers, consider the following strategies: 1 Emphasize Principal Distributions: Structure the trust to prioritize distributions of principal rather than income, as these will not affect housing eligibility. 2 Income Management: Develop a plan to monitor and manage trust income carefully Consider reinvesting income within the trust rather than distributing it to the beneficiary. 3 Use of ABLE Accounts: Explore using ABLE accounts in conjunction with SNTs ABLE accounts can be an effective tool for managing "income" distributions from the SNT without impacting housing benefits 4 Trust Amendment: For existing trusts, consider amending them to better align with HOTMA regulations, potentially allowing for distribution of all principal before any income distribution 5 Documentation: Ensure clear documentation of all trust activities, distinguishing between principal and income distributions This will be crucial for housing authorities' reviews. ?Challenges and Considerations While HOTMA has improved the situation for SNT beneficiaries, some challenges remain: - Public Housing Agencies (PHAs) may lack familiarity with SNTs, potentially leading to misinterpretation of trust distributions. - The distinction between trust income and principal can be complex, requiring careful management and potentially expert guidance. - There's no set definition of "income" in HOTMA regulations, which may lead to subjective interpretations by different PHAs. Conclusion By leveraging these new opportunities while addressing the challenges, trusts can be created that provide robust support for individuals with disabilities without compromising their essential housing benefits.