As the world population surges, what are the implications?

The first world count of the world's inhabitants occurred in 1804 resulting in a total of 1 billion people. It took another 123 years, until 1927, for the count to reach 2 billion.

The much celebrated 5 billion mark was reached in 1987. After just 11 years, the population had risen to 6 billion in 1998, and by October 31, 2011, 13 years later, we had 7 billion.

The world has the resources to sustain our present population and more, but the resources often aren't where the people are, according to Carl Haub of the Population Reference Bureau. Populations are growing fastest in the poorest nations.

Where populations are growing or not growing very much

The countries with the lowest birth rate per woman include industrialized nations such as Bosnia and Herzegovina at 1.2, Germany at 1.4, China at 1.6, Canada at 1.7, Australia and Brazil at 1.9 and the United States at 2.1.

Of the poorest countries in Africa, Niger has a birth rate of 7.2 children per woman. In several other African countries where poverty is high and there are few contraceptive options, the birthrate is just somewhat lower.

The challenges

According to Time, the problems of population growth are mainly about inequality, supporting an aging population and adapting to migration patterns. At the Population Reference Bureau, they say countries usually do have enough food, but people don't have access to it because of poverty.

World population statistics

Today, 19 percent of the world population lives in China; 33 percent of the world population is Christian; 50.4 percent are male; and 50.5 percent live in a town or city.

The median age of the world population is 29 years, and the median gross household income is $10,290.

About 73 percent do not have access to the Internet.

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Case Example: Importance of a Properly Drafted Irrevocable Income-Only Trust

Some attorneys and others interested in the field of Medicaid Asset Protection may have been a bit worried about a recent case arising out of Wisconsin — Hedlund v. Wisconsin Dept. of Health Services (Wis. Ct. App., No. 2010AP3070, Oct. 13, 2011)

The basics of the case

In this case, the court affirmed a ruling that a Medicaid applicant who transferred assets to her children, who in turn put those same assets into an irrevocable trust for the Medicaid applicant’s benefit, is ineligible for Medicaid because the trust is a countable asset under state law,  despite the fact that the transfer occurred 17 years prior to applying for Medicaid.

Don’t Worry!

If you are an estate planning or elder law attorney offering pre-crisis Medicaid asset protection through the proper use of an irrevocable, income-only trust, it need not cause you any worry.
And if you are not an attorney but have created the right type of irrevocable, income-only asset protection trust, you, too need not worry.  The irrevocable, income-only asset protection trust I provide my own clients with is the Living Trust Plus™ — I’m happy to say the trust is just as effective as ever.
The opinion was released October 13^th and is a case-in-point example of how an improperly drafted irrevocable trust, along with a badly executed asset protection plan, will fail.  More information on the Living Trust Plus™ is available here.

The question before the court

The question for the court, based on its interpretation of a Wisconsin statute, was whether the trust was established by the children “at the direction or upon the request of” the Medicaid applicant.
Although the trust instrument in this case was irrevocable, the trust bore no relation to an income-only trust, but rather was a trust established by the children of the Medicaid applicant, using the exact assets previously gifted by the parents to the children.

This trust was apparently intended to be some sort of special needs trust because the trust instrument provided that the income and corpus of the trust were to be used only when no other funds are available and to supplement any funds the beneficiaries were entitled to receive as social security and medical assistance benefits.

However, though not addressed by the court, the trust was clearly defective as a special needs trust because the stated purpose of the trust was “to provide for the support and welfare of Clarence and Lucille Hedlund,” and a trust intended to provide for “support and welfare” is clearly not a special needs trust.

Why the court ruled the way it did

Most  importantly, the trust did not prohibit trust corpus from being distributed to the Settlors. On the contrary, the trust provided that the income and corpus of the trust were available to the Settlors.

So once the finding was made that the trust assets were “assets of the individual or the individual’s spouse” and “were used to form all or part of the corpus of the trust,” the finding that the assets were fully available to the Medicaid applicant was absolutely correct, because the trust allowed corpus to be used for the benefit of the Medicaid applicant.
A properly- prepared income-only trust, such as the Living Trust Plus™, would have avoided this result, because the Living Trust Plus™ is a trust that offers true asset protection in connection with Medicaid eligibility, as well as in connection with all other creditors.

For information on the Farr Law Firm’s service (Level 3) – The Living Trust Plus™ — follow this link and view the .PDF file. You may also notice other services you may need or have not thought of.  Planning for long-term care (whether for you or a spouse or a parent) is a difficult mental hurdle.  But the sooner you start, the more assets you can protect and the better quality and dignity of life loved ones can enjoy.

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