Illinois Estate Planning & Elder Law Blog

I recently came upon this quote by Jonathan Adler, an interior designer, “There is only one game to play at Thanksgiving, and that’s Ping-Pong. It’s perfection – my favorite way to work off that pumpkin pie.”

These are my sentiments exactly.

This clip from You Tube features players who are about as good as I’ve ever seen. I hope they happen to be neighbors of my brother who lives in Kentucky and who is hosting my family’s Thanksgiving Dinner this year. I’d love to have a game or two with them.

Happy Thanksgiving.

In his article, When is it Too Late for Asset Protection?, Attorney Robert Mintz discusses the pitfalls of asset protection planning.

He points out that states, including Illinois, have fraudulent transfer laws. These laws prohibit an individual from transferring property to another entity to “hinder, delay or defraud” someone owed a debt in order to avoid paying that debt. As a result of these laws, there is little one can do to protect assets against a claim that has already been made, sometimes referred to as an “existing claim”.

Where asset protection planning is allowable and is effective is in the situation where an individual seeks to protect himself from unseen future risks. Mr. Mintz gives the following example in his article: “ . . . say you set up an asset protection plan and a negligent act involving a patient occurs several months later. Fraudulent transfer is not an issue in this case because the property transfer was unrelated to the claim subsequently developed by this patient. Presumably, at the time you implemented your asset protection plan, you did not know or intend that the patient would be injured. Similarly, loans and contracts entered into after establishing a plan, as long as the creditor is not misled, are also outside the scope of the fraudulent transfer rules.”.

Illinois law is clear that the fraudulent transfer laws can overturn an asset protection plan where the intent of the plan was to avoid paying an existing claim. It is also clear that in Illinois asset protection planning to protect against unforeseen future risks is allowed and is effective. The tricky part comes in when one is confronted with the situation where one must prove to a court that the transfers involved fall into this second, acceptable area of planning.

It is always best to consult with an attorney at a law firm that practices in the area of asset protection about the propriety of any asset protection planning and the selection of the appropriate steps to take.

It is sometimes the little things that count for a great deal where estate planning is involved.

A recent Wall Street Journal article by Rachel Emma Silverman titled "An Estate Plan Built for Special Needs" has this to say about the importance of attention to detail regarding the creation of a guidance letter to be included among the estate planning documents for an individual with special needs:

“It’s also smart to create a ‘letter of guidance’, a document spelling out everything another caregiver should know about their child’s special needs, including medical diagnosis, treatment and medications, specific likes and dislikes, and food preferences or aversions. ‘You know things about your children that no one else on this earth knows’, says Michael Gilfix, a Palo Alto, Calif. lawyer who does a lot of special-needs planning. ‘This includes little things, like what breakfast food makes them happy or what breakfast food makes them really angry’.

Ms. Valentine, a client of Mr. Gilfix, recently wrote a letter of guidance for her son, Gabe. The document describes how Gabe is a huge San Francisco Giants fan, so any caregiver should make sure he gets tickets to home games. He doesn’t like ice cream or cake, but likes pizza. His epilepsy medication affects his teeth, so the letter recommends that he get his teeth cleaned regularly. ‘He actually loves the dentist’, she says.”

In her article from the Wall Street Journal titled, An Estate Plan for Special Needs, Rachel Silverman explains how an estate planner can create a “pooled” trust which can be a useful tool for a family with a special needs member. She writes,

“Another option is ‘pooled’ trusts, in which funds from many special-needs families are bundled together and managed by nonprofit groups that focus on disability issues. Families typically use pooled trusts if they can’t find appropriate individual or bank trustees, or if they have a small trust account that would benefit from bunching with other families”.

We recently assisted a client who was receiving Supplemental Security Income benefits from Social Security and was awarded a $17,000 settlement from a class action lawsuit. By depositing the settlement money in a pooled trust operated here in Illinois, the client was able to retain his monthly Supplemental Security Income benefits and have access to the $17,000 settlement funds to purchase needed furniture for his room and visit a close relative he hadn’t seen in a long time.

Once the Special Needs Trust has been established, the funds are available for use by the disabled individual and remain secure until they are used.