Social Security Disability &
  Special Needs Planning News
 Sheri R. Abrams, Attorney at Law
In This Issue:
Protecting Your Kids Should Something Happen to You
Taxation of Third Party Special Needs Trusts
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Special Needs Planning and Disability Planning Workshop

If you have a child or teen with disabilities, I'll be speaking on Social Security Disability benefits and  S pecial  N eeds  P lanning on  April 27, 2017   at the Cedar Lane School in Vienna. Please feel free to join us at 6:30 pm

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Source: Reprinted from the February 2017 Newsletter of Sheri R. Abrams, Attorney at Law,


Issue: # 95

 February 2017

Tax season is well under way, which means W-2s, 1099s, and other tax documents have probably made their way to your mailbox. I know preparing for tax time can be a lot of work.  I personally spent hours last week pulling together my own documents. Not fun!
But, when everything was done and organized, it was like a huge weight off of my shoulders, and I felt so relieved.

Now after going through your taxes you should consider the future steps you need to take to create a solid estate plan that protects your assets, wishes and family.

This is definitely one goal that you can easily check off the "to-do" list.  The peace of mind you'll experience is priceless.  All you have to do is call my office and set up an appointment.

Have a great month!

P.S. If you have kids, it's important to name legal guardians so that YOU are the one that decides who raises them if something happens to you.  Don't leave this decision to the courts and strangers!  Learn how by reading the article below. 
Protecting Your Kids Should Something Happen to You

One of my passions as an estate planning lawyer is educating parents about how important it is to prepare for their untimely death.  Not a fun topic I realize. But it just takes one sad circumstance of parents passing away and leaving the kids to deal with squabbling relatives to understand how critical this is for their well-being.
The possibility of leaving this world can be difficult to accept and many people choose to not think about it. Unfortunately, this fear often prevents people from taking the proper precautions that they need to take.
I speak at various groups around town and usually deliver this message in an upbeat and cheerful way so people can see that preparing their estate plan for their family is a positive and joyful experience.  But for today's post I'm going to give you the real-deal about estate planning. Blunt, and to the point.
Essentially, it's critical for everyone to understand the importance of estate planning for those we love - especially our children. As you can imagine, children are incredibly vulnerable if you die while they are still minors due to the simple fact that they are unable to take care of themselves.
Here are a few cold-hard facts about what could happen if you passed away suddenly without a will in place.

1. A judge that doesn't know you or your children will decide who raises them.
If something happens to you, who is going to step up?  Is it the person that you want to raise your children?  If you don't have an estate plan in place, will your relatives squabble over who is or isn't responsible for raising them? Do you really want to put your children through that?
2. The person who the judge picks to raise your kids will also be responsible for their financial well-being.

If something happens to you, all of your assets will be handed to the guardian (that you didn't select) to be managed for them. The obvious fear is that this person could possibly use the funds for something other than the care of your children.  However, there are many other things to consider.  Does the person that the judge picked have the same financial values that you do?  For example, you may feel strongly that you would like your children to attend high-end sports clinics to help develop their athletic skills.  But, will the guardian see the value in this?  What if they think spending money on what you would have wanted is a total waste?  The potential for trouble is endless.
3. All of the money left from your estate (assuming there is any) may go to your child in a lump sum when he or she is 18 years old.

Think about this one.  What would you have done if you had been handed a bunch of money at that time in your life?  Scary thought, huh?  The hard truth is that most 18-year-olds are simply not mature enough to properly handle finances at that level.  I have heard story after story of kids who should have been fine financially, but weren't because they decided to buy cars and clothes instead of investing in their future by going to college. So sad!
So, there you have it - some cold, hard questions for you to ponder. My hope for those of you reading this is that you have already taken care of naming guardians for your children, have put your estate plan in place, and that you are keeping it up-to-date as the circumstances of your life change.  But, if you have not, I would be happy to meet with you  to start you on the path. 
Don't worry if you aren't sure who you would pick as guardian.  I'll help you with that.

Don't worry if you think you can't afford estate planning.  I'll work with you on that.

Don't put this off because you don't have the time.  Think about how your kids will spend their time if something happens to you and you haven't made these decisions for them.
Call my office today and make an appointment for a consultation and you'll experience a peace of mind that you didn't even realize you were lacking.

Taxation of Third Party Special Needs Trusts

Many times when parents meet with me for Special Needs Planning, I suggest that they set up a stand-alone Third Party Special Needs Trust during their lifetime to benefit their disabled child. 

This Special Needs Trust can be drafted and taxed as either a grantor trust or a non-grantor trust.

I normally suggest to parents that their Third Party Special Needs Trust be drafted and taxed as a grantor trust.  By drafting the Special Needs Trust as a grantor trust, the income from the Special Needs Trust would be taxable to the parents who would report the income on their personal income tax return.   This tends to be the better situation because the parents are usually being taxed at a lower tax rate than the trust tax rate.

This grantor trust status would end with the deaths of the parents, and the trustee would then obtain a tax ID number for the Special Needs Trust and the trust would thereafter be taxed at the greater trust tax rate and report its income on its own income tax return.  

Free Download of Sheri Abrams' Book "Don't Gamble With Your Social Security Disability Benefits"

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The law firm of Sheri R. Abrams, Attorney at Law is located at: 

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Oakton, VA 22124
(571) 328-5795


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We provide legal services in the areas of Social Security Disability Law, Special Needs Planning, Elder Law, Special Needs Trusts, Wills and Trusts, Powers of Attorney, Advance Medical Directives, Guardianship, Disability Planning and Student Loan Discharge. 
If you, or someone you know, is involved with an educational event or support group that would benefit from a presentation on any of the areas of law for which we provide legal services, please call us at (571) 328-5795.