Tag: Beneficiary

Prenuptial Agreements and How They Affect Your Estate Plan

Are you and your future spouse considering remarriage? As you both look at your assets and your children from former marriages, are you wondering about a prenuptial agreement, but not sure how it would help?  In addition, are you wondering whether you need to look at your Florida estate plan and determine whether a prenuptial would help or hinder your estate plan? These are all good questions to ask, contemplate and find answers before you remarry. Let us share some answers with you.

To begin, a prenuptial agreement is a contract between two parties who intend to marry. This contract will outline exactly what property the parties agree to keep as separate, non-marital property and how that property will be divided in the event of a dissolution of the marriage or the death of a spouse. Now, a prenuptial agreement should not have a negative connotation because entering into a prenuptial agreement does not mean you do not have faith in your upcoming marriage or want to plan for a divorce. Let us share with you two reasons why a prenuptial agreement is important.

  1. The first and main reason to enter into a prenuptial agreement is that then you and your future spouse can outline how your own property will pass when you die if you have children outside the marriage. In most states, if you have a surviving spouse, you cannot leave all of your estate to your children. It does not matter what your will says; the surviving spouse typically can elect to disregard the will and inherit up to one-half of the estate, depending on the state’s laws. A prenuptial agreement governing the distribution of assets can help to ensure that your property passes to your children and your surviving spouse in the proportions that you desire rather than the proportions outlined in your state’s laws.
  2. A second reason for entering into a prenuptial agreement is that you want to dictate to whom you wish to leave valuable assets acquired prior to the marriage. If you do not have a prenuptial agreement, those assets may become part of your estate that can be inherited by your spouse upon your death. If your desire is to leave those assets to someone other than your spouse, your will or trust alone may not be enough because of the rights given to spouses under the laws of most states. Therefore, including that information in a prenuptial agreement can help ensure those assets pass in the way in which you intend.

Most importantly, if you are marrying, or remarrying, we highly recommend that you consult a qualified Florida estate planning attorney. She will be experienced in these issues so that you can be certain you incorporate a prenuptial agreement into your estate planning.

We know this article may raise more questions than it answers. Elder and Estate Planning Attorneys, PA, is a law office small enough to provide personal service but large enough to provide service in Jupiter, as well as Palm Beach, Martin, St. Lucie, and Indian River Counties in Florida. Our law firm will guide you through legal challenges involving elder law, estate planning, trusts, veterans benefits, real estate, and more. We encourage you to contact us and schedule a meeting with our attorneys.

Medicaid Compliant Annunities

Beware of “Medicaid Friendly” Annuities versus “Medicaid Compliant” Annuities.

I have had a few clients who have been sold “Medicaid Friendly” Annuities. In at least one case, the annuity salesman sold the client a “Medicaid Friendly” annuity in the local senior center. I don’t know who the salesman was, or the details of his sales pitch, but what he sold the client made an extreme mess of her Medicaid eligibility.
Annuities can be an invaluable tool in Medicaid planning. When used correctly, an annuity can convert a person’s spend-down amount (excess resources) to a stream of income for the spouse at home, or, in the case of a single or widowed person, can preserve some of the spend-down amount for expenses not covered by Medicaid.
Medicaid regulations became much more strict in recent years, and the criteria that an annuity must meet to be excluded as a resource for Medicaid eligibility are very specific. They must be:

  • Irrevocable
  • Non-assignable
  • Non-saleable
  • Provide equal payments
  • Name the FL Medicaid Program as beneficiary for benefits paid on behalf of the annuitant

Most of the “Medicaid Friendly” annuities being sold out there do not meet these requirements and will count against a person applying for Medicaid benefits. Often the seniors are advised by the annuity salesman that all they need to do is annuitize the annuity if and when they enter a nursing home in order to become eligible for Medicaid. This is often not true because these annuities do not meet ALL the other Medicaid requirements for them to be considered a non-countable resource.

Most annuities are simply a tax-deferred investment tool. Medicaid Compliant Annuities, on the other hand, are a very specific product offered by only a limited number of insurance agents and companies. Medicaid Compliant annuities are best used when a person knows that nursing home care is imminent and the annuity is then tailored to immediately convert the person’s spend-down amount to an income stream. So, be wary of “Medicaid Friendly” annuities being marketed to the senior community at large.