BATTLING THROUGH BANKRUPTCY: Chapter 7 not final chapter

Filing turns out to be ‘a relief’ for widow

Life as Renne Fortier knew it changed in January 2009.

Her husband, Mark, was diagnosed with CNS lymphoma, a brain tumor, while he was working in Hawaii. By March, he was gone and she was a 38-year-old widow with one income and two daughters, ages 16 and 11, to support.   Click below for the entire story.

http://www.lvrj.com/business/chapter-7-not-final-chapter-102326189.html

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The phrase “Delinquent Mortgage,” once a foreign concept for many Americans, has now become part of our everyday vernacular. When nearly 4 million homeowners are currently 60 or more days behind on their mortgages, it is actually no surprise that citizens nationwide are buzzing about the housing crisis.  That crisis is worse here in Las Vegas than it is in many other areas of the country and Las Vegas citizens are certainly feeling the economic pinch.

More than 60 percent of homeowners nationwide who have seriously delinquent loans are still not involved in any form of loss mitigation with their lenders, probably due to the frustration with the processes available.  In fact, a recent performance report indicates that nearly half of the property owners approved for trial loan modifications have fallen out of the program.  By the end of July 2010, approximately 616,839 out of the total of 1,307,489 HAMP three-month trial plans have been cancelled since the program began.  This tremendous dropout rate may be due to the lengthy process of obtaining a permanent modification.  For instance, as a result of the backlog, only 36,695 HAMP restructurings were converted to permanent status during the month of July.

For those who are already involved in loan modifications or short sales, the process may soon become even more difficult and time consuming as Fannie Mae and Freddie Mac have become more aggressive in forcing originating lenders to buy back bad loans.  A report by Fitch Ratings illustrates that, in a worst-case scenario, the buybacks may result in a combined loss of between $17 billion and $42 billion for the nation’s four largest banks – Bank of America, JPMorgan Chase, Wells Fargo, and Citi.  Considering these numbers, it is safe to assume that the process will become even more tedious.

Despite homeowners’ understandable frustrations with the short sale and loan modification processes, these avenues may preserve some homeowners’ rights down the road.  For example, if a lender tries to pursue a deficiency judgment following a foreclosure, the homeowner has the ability to demonstrate efforts to work with the lender to mitigate losses.  It is hopeful that the courts will not turn a blind eye to these whole-hearted attempts.  As such, underwater homeowners should become informed, seek assistance from a legitimate source, and do their best to stay patient.

Kelle L. Kuebler, Attorney*

*Licensed only in New York and Connecticut

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Tiffany N. Ballenger, Esq. will present at a series of seminars from 6:30 PM to 7:30 PM August 19th at the the Prudential Americana office located at 8337 W. Sunset #150, Las Vegas, Nevada, 89113.

Topics to be covered:
Tiffany N. Ballenger, Esq. will be discussing the differences between the short sale and foreclosure process and the pros and cons of each. She will also touch on how these processes affect credit and different circumstances to consider with each process.  Ms. Ballenger will also cover Asset Protection and how an attorney assists with negotiating deficiency judgments.

Bring friends or family members that can benefit from this very important FREE seminar series. For more information, click here.

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Prudential Americana hosts Tisha Black Chernine as a legal expert on the housing market in Las Vegas.  Click here to watch the video.

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It might sound strange to be told to insure retirement funds but, after working hard and diligently saving all that money, it’s worth it to make sure those funds will be available when needed.  With the transition into retirement comes the heightened possibility of age-related health problems. Unforeseen events such as stroke, heart disease, and cognitive impairment can change one’s way of life.

Many people are under the impression that government programs such as Medicare or Medicaid will cover the costs of long-term care. Medicare will cover some skilled nursing for a very limited period (20-100 days only). Medicaid will only cover long-term care costs for impoverished individuals with the caveat that there are legal planning techniques that work within the complicated Medicaid rules.  Regular health insurance does not cover nursing home or other long-term care costs except forshort-term rehabilitation.

Out-of-pocket costs for needed long-term care resulting from age-related health problems such as home care, nursing home, or assisted living can quickly deplete retirement funds and leave the remaining healthy spouse impoverished.

Long-term care insurance insures your retirement funds and provides protection so that the money stays intact while, at the same time, provides money for elder care services. In his book The Total Money Makeover, Dave Ramsey says of long-term care insurance, “If you are over sixty, buy long-term care insurance to cover in-home care or nursing home care. The average nursing home stay costs $40,000 (In Nevada over $70,000!) per year, which will crack and scramble a nest egg in a heartbeat.  Dad in the nursing home can use up Mom’s $250,000 savings in just a few short years.”

Using long-term care insurance to insure your retirement makes sense. You insure your car against damage, your home against fire, and you purchase life insurance.   Why not insure what can be the largest and most devastating risk to you and your family?  Unlike other risks you insure against, long-term care is the most likely to happen. Long-term care insurance will also help you keep your independence and dignity and allow you to make choices about where you want to spend your final years.

Here are some specific reasons for buying long-term care insurance:

• If you are married and you have a need for long-term care, your spouse will be able to pay for an outside caregiver and receive needed rest and recuperation.
• If your children promise to take care of you, then when the time comes that you need care, insurance will help them do that by paying for aides to help with tasks such as bathing and incontinence.
• If you are single and a need for long-term care arises and you have no family who can help you, insurance can pay for and coordinate that care.
• If you have the desire to leave assets behind when you die, insurance will help preserve those assets from the cost of long-term care.

You should also consider buying long-term care insurance at a younger age. There is an advantage for doing this.  The premium is lower.  For example, a person, currently age 45, buying a typical policy with a spouse, could spend $21,146 in total premiums to age 78. Suppose this same person chooses to wait to buy the equivalent coverage at age 65.  If that same policy were available in the future, the couple that waits could pay $52,566 in total premiums over their 13 remaining years to age 78. Because they waited, they would pay 2 ½ times more for the same policy.  In addition to the rates going up with age, the health qualifications will be stricter and development of health problems related to aging may even disqualify a person from obtaining a policy.

There are dozens of long-term care insurance companies selling a multitude of different policy options. It can become very confusing.  For each policy, there are literally thousands of benefit combinations for home care, assisted living, nursing home care, waiting periods, payment amounts, inflation riders, and the list goes on.

LONG-TERM CARE INSURANCE BUYING CHECKLIST

Here is a checklist of some of the things you need to know before you purchase a policy.  The more “yes” answers you get the better off you are.

1. Is the insurance company rated by A. M. Best (the rating company) with a rating of at least A, A+ or A++?
2. Is it a large diversified company with deep pockets and selling more than just long-term care insurance?
3. Is the insurance representative an expert in long-term care insurance? (Because of its complexity, almost all LTCi experts only sell LTCi; they seldom sell anything else.)
4. Does the representative have a degree and/or industry financial designations?
5. Does the representative own a personal long-term care insurance policy for himself or herself?
6. Is the policy you like tax qualified, and if not, do you understand the ramifications?
7. Are there at least 6 ADLs (Activities of Daily Living) allowed for in the benefit certification?
8. Does it allow “standby assistance”?
9. Is it a “pool of money” as opposed to a “stated period”?
10. Is it “integrated” as opposed to “2-pool”? (2-pool is not allowed in many states.)
11. Do you understand how the elimination period works? (This is extremely important.)
12. Does it have prohibitive cost containment provisions?
13. Is there any “capping” or other future reduction of automatic benefit increase riders?
14. Do you understand how the waiver of premium works?
15. Does the assisted living facility benefit pay the same as for nursing home?
16. Are you buying adequate home care coverage?
17. Does the company have a history of premium rate stability without periodic increases?
18. Does the policy pay for homemaker services?
19. Does the policy offer an alternative plan of care for services that don’t exist today?

Tiffany N. Ballenger, Esq.

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The probate process begins after a family member dies and someone, either the executor of the will or a family member, initiates proceedings in probate court.  There are certain reasons why an estate would need to be probated.  First, property that is owned solely in an individual’s name must always be probated.   This applies even when the deceased created a will that leaves property to another person because, when property is titled only in the name of the deceased, no one else is able to sign documents relating to that asset.  The probate court will name a person who has the ability to sign any necessary documents.

Second, if a family member has passed away with outstanding debt, the creditors have a certain time period to initiate probate proceedings and file a claim against the existing estate in order to get paid. 

Third, probate proceedings are always initiated when both parents of a minor child pass away.  Usually, the probate process names a legal guardian of the child to protect that child’s financial assets. 

Finally, probate proceedings are most commonly initiated when family members disagree on the distribution of their loved one’s assets.  When family members fights over the division of the estate, the process can become both costly and emotional.  Therefore, have a reputable attorney draft estate planning documents and ensure those documents are always updated and accurate.

Amy M. Friedlander, Esq.

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An inside liability comes from assets owned by the company or from behavior performed by the company.  These liabilities are trying to get up and out to your personal assets.  An outside liability, on the other hand, comes from assets owned by you, individually, or from your individual behavior.  These liabilities are trying to get down and in to your company.  

With inside liabilities, the “corporate shield” will often prevent these lawsuits from invading your personal assets.  This is true for corporations and LLCs.  However, if you are personally responsible for an outside liability, will the assets in the company be subject to liquidation?  Once you have lost the lawsuit, you will be examined in the Debtor’s Exam.  In that examination, the opposing party may ask you virtually any question it wants regarding what assets you owned.

If you own a Nevada LLC, the judge can only issue a charging order to the creditor.  This means if and when there is a distribution from the LLC to the owner, that distribution will belong to the creditor. Until the passing of Senate Bill 242 (codified as NS 21.090 and 78.746), charging order protection was limited to LLCs and partnership entities.  Now, closely-held corporations enjoy the same protection!

If properly formed, the manager of the LLC will be the only one who determines if there is going to be a distribution.  If there is a charging order outstanding, the manager (client) will not make a distribution so the creditor receives no assets.  To make matters worse, the creditor may be liable for any income taxes of the LLC under IRS Revenue Ruling 77-137. 

Tiffany N. Ballenger, Esq.

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MONDAY LECTURE GUEST SPEAKER
Monday, May 17^th 2010
11:00 a.m. to Noon (in the Activities Room)

Guest Speaker Information:
Tiffany N. Ballenger joined Black & LoBello (Attorneys at Law Firm) in 2010. Her practice focuses on estate planning, elder law, and asset protection. Ms. Ballenger has significant experience in trusts and estates, long-term care planning, Medicare, Medicaid and veterans benefits, adult guardianship, estate settlement, probate and trust administration, business entity formation, and domestic asset protection trusts. Ms. Ballenger is a member of the State Bar of California (2007), the State Bar of Nevada (2008), the National Academy of Elder Law Attorneys, the American Bar Association, Wealth Counsel, and Elder Counsel. She is an accredited attorney who can practice before the U.S. Department of Veterans Affairs. She lectures frequently on issues including estate planning, elder law, and asset protection and teaches continuing education classes for other attorneys, financial professionals, and realtors.

Topics to be covered: 
Tiffany N. Ballenger, Esq. will be covering important legal topics that affect the Las Vegas valley senior community.  Some of these topics will include estate planning, wills, trusts, and powers of attorney.  Ms. Ballenger will also be speaking about real estate issues and the recently passed health care legislation and how both affect seniors in Las Vegas.

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Medicare, which debuted in 1965, currently covers 38 million Americans.  However, the recently passed health care reform legislation will not significantly change the way Medicare operates.  Americans over 65 will continue to receive coverage. Furthermore, both hospitals and health care providers will continue to be paid per procedure, which remains a much-debated “flaw” in the system. 

The benefits of the new health care reforms ensure that seniors will receive more preventative services under Medicare.  Also, the often-maligned Medicare “donut hole” will begin to be filled, which, unfortunately will take a few years to be fully rectified.  In 2010, Medicare prescription drug beneficiaries will get a rebate of $250 to help fill the donut hole.  In 2011, these folks will receive half-off name-brand drugs while in the donut hole.  By 2020, the prescription drug cap is set to be eliminated entirely. 

Unfortunately, Medicare Advantage plans may soon cut benefits and increase costs.  Also, until 2019, Medicare workers who earn more than $85,000 per year will pay higher premiums under Part B.

Small Business:

Starting this year, the new laws will provide tax credits to assist small businesses purchase coverage for their employees.  For these purposes, a “small business” is defined as having 50 or fewer employees.   By 2014, businesses with more than 50 employees MUST provide coverage for these workers or face a penalty. 

Tax Payers:

Over the next ten years, $350 billion federal dollars will be spent on subsidies for low-income and middle-class Americans who purchase private or independent insurance.    The goal of these subsidies is to foster a marketplace in which insurers compete against each other to offer the most coverage at the lowest rate.  These subsidies not only benefit the consumer but should also lower administrative costs. 

However, the health care industry’s real problem is that insurance rates have been steadily rising due to the astronomical rate of increase in health care costs.  Reasons for this include an inefficient payment system and a rapid increase in the number and expense of technological breakthroughs. 

Slowing the growth rate of health care costs is the only real way to truly reform our system.  Unfortunately, this law does not necessarily accomplish that goal.  Nevertheless, many economists and politicians hope this law is a step in the right direction.

Tiffany N. Ballenger, Esq.

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A trust is an agreement that provides for the management of property and involves at least three parties:

• The Trust Maker, sometimes referred to as the settler or grantor, is the person who creates the terms or rules of the trust;
• The Trustee is the person who agrees to accept the Trust Maker’s property and manage it as directed by the trust, and;
• The Beneficiary is the person who receives the benefit of the property held in the trust.

Typically, this is the Trust Maker during his lifetime and the children of the Trust Maker when the trust terminates.

The Revocable Living Trust Document

A Revocable Living Trust (RLT) is a trust document created during the Trust Maker’s lifetime. An RLT is often referred to as an inter vivos trust, which means during life. The trust is revocable due to the Trust Maker’s ability to terminate and amend the trust.

The Trust Maker generally names himself/herself as the Trustee and the beneficiary of the trust while still alive. The Trust Maker also names Trustees to act for his/her benefit in the event of disability or death to manage the assets of the trust following the Trust Maker’s death. Typically the Trustee is also charged with the responsibility of settling the obligations of the trust and distribution to the beneficiaries.

Funding The Trust

After executing a revocable living trust, the Trust Maker then needs to fund the trust. Funding is the process through which the individually-owned assets of the Trust Maker are titled and transferred into the trust. If assets are not placed into the trust, the Trustee lacks authority to manage the assets, since the Trustee only has authority with respect to assets contained within the trust.

In Community Property states, such as Nevada, married couples can create a joint revocable living trust. The married couple will each re-title their property into the name of their trust, which creates a funded trust.

Re-titling is performed in different fashions for different assets. For example, a checking account held in the name of John and Mary Sample will be funded into the Sample’s Revocable Living Trust by re-titling it as John Sample and Mary Sample, Trustees of the Sample Living Trust dated (the date the trust is signed.)

A similar action will be taken in regard to all of their other assets, such as real estate, automobiles, boats, investment accounts, securities, and any other asset with a title. Assets that do not have titles will be transferred into the trust by an assignment of personal property. An assignment of personal property is a document, which demonstrates the Trust Maker’s intention to transfer all of property without title into his/her revocable living trust.

Once the revocable living trust has been funded, it will control all of the assets in its name. Inversely, a trust will not control assets not titled in its name. A well drafted revocable living trust will not only include direction on how to manage property, but also give instructions for how the Trust Maker or the Trust Maker’s family and loved ones are to receive the benefits of the trust. The trust also makes provisions for how the Trust Maker is to be cared for in the case of the Trust Maker’s disability and/or death.

A well-written living trust document will outline the Trust Maker’s financial and personal intentions, be clear in its directives and be protectively locked within the law.

Tiffany N. Ballenger, Esq.

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2. Protecting Your Children's Assets
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