Elder Law & Medicaid
Probate & Trust Administration
There are a myriad of legal strategies you might consider implementing as you design your estate plan. Regardless, there are a handful of “must have” estate planning documents you must create before anything else.
You should have:
- A Will.
- A Health Care Directive.
- Financial And Health Care.
- A Legal Authorization.
- A Trust.
A will is a legal document that describes your intentions for your estate when you pass away. Without a will, a person would die “intestate.” In that case, state law divides and distributes the estate to surviving family members based on their relationship to the deceased. No consideration is given under state law to how “close” such family members were to the decedent (or if they fought constantly). Contrary to popular belief, a will has absolutely no legal authority until the maker of the will dies … and the will is given to the proper probate court within the time limit prescribed by state law. Accordingly, your will has no authority to appoint financial or health care decision-makers (agents) for you if incapacitated by an illness or injury (more on that later). In many states, a will is required to appoint the guardians (backup parents) in the event minor children are orphaned. What could be more important than appointing the people you want to rear your children if you are not around?
2. Health Care Directive
A health care directive, often known by other names such as an “advance directive,” is a document you sign now to specify the type and extent of medical and personal care you would want later were you unable to make and communicate your own decisions. Everyone age 18 and older needs to have this fundamental legal document signed, a copy on file with their physician, and a copy given to each of their appointed agents.How does a health care directive help my family?
A health care directive appoints the persons (whether in order of priority or as a “team”) you have selected to make end-of-life decisions, so your family and the medical staff know what to do (or what not to do). A directive can take some of the worry and anxiety out of your final days for your family, as they will know your wishes when it comes to making tough choices. With that in mind, choose your “point persons” carefully. They will be charged with carrying out some potentially difficult decision and, perhaps, difficult family members.
3. Power of Attorney
This is a legal document giving another person — sometimes called “the attorney-in-fact” or “agent” — the legal authority to make decisions on business matters and other issues on your behalf. The exact scope of the power given is spelled out in the document itself. These powers cease when the maker passes away; they also may no longer be in effect when the maker becomes unable to make or communicate decisions. A “durable” power of attorney should be used in that situation, or a health care directive.
4. Permission to Access Personal Medical Information
This document should be right on top of or specifically incorporated within your health care directive. It is your authorization for named persons to view your medical records and discuss your care with medical providers. Without this document or specific authorization, there is the possibility your doctor may decide not to speak to your designated “point persons” — the persons you want to make those tough decisions about your care if you are in an unresponsive state.
These come in all sorts of shapes and sizes. Generally speaking, a trust is a legal entity with at least three parties: the creator of the trust, the trustee, and the beneficiary. With most “revocable living trusts,” you are all three parties. Depending on your circumstances, there could be advantages to establishing a trust. The most common advantage is avoiding probate. This can help streamline administration of your estate should you become incapacitated and upon your death, keeping your plans private in the process. Some irrevocable trusts may protect trust assets from creditors. For example, trusts established under a will or revocable living trust can protect the inheritance for loved ones from squandering, divorces, lawsuits and bankruptcies.
Elder Law & Medicaid
It defies both common sense and a basic sense of personal responsibility, that some people do not appreciate just how valuable disability insurance. Otherwise, where will you come up with the cash flow to provide for yourself and your loved ones, if you are seriously injured or stricken with a disease that prevents you from going to work and earning your salary?
Americans are getting older
Are you a “mature” American age 65 or older, do you care about someone who is, or do you anticipate becoming a mature American yourself? If yes, then you are in good company. According to the U.S. Census Bureau, Americans 85 and older are the fastest growing demographic group and, right behind them, 79 million baby boomers are moving into retirement age themselves.
However, with advances in age come advances in health problems. Along with health challenges, there are special legal challenges that need addressing. The body of law addressing these challenges is commonly known as “Elder Law” today.
How does a health care directive help my family?
What is “Elder Law”?
Generally speaking, Elder Law can be defined as the holistic application of general legal principles to the specific emotional, logistical and financial needs of mature Americans. Many of these Americans are concerned with two fundamental threats to their dignity:
- Becoming incapacitated, and thereby losing control to the court system over their personal, health care and financial decisions.
- Running out of money due to the catastrophic costs of long-term care. Fortunately, these threats may be minimized, or even avoided, through properly coordinated legal and financial planning.
Planning for Incapacity
As the number of birthday candles increase on your birthday cake, so do the odds of becoming incapacitated due to an injury or illness. Whether incapacity strikes suddenly or over time, the consequence is the same. Either you will have properly appointed decision-makers of your own choosing through legal planning in advance, or a judge (who likely does not know you or your loved one) will appoint someone for you under the ongoing supervision of the court. The pre-planning alternative is less expensive, easier on your loved ones and protects your privacy from the public record.
Planning for Long-Term Care
According to commonly cited statistics, if you are age 65 and single, then the odds are about 50 percent that you will need long-term care at some point. For married couples, odds are about 75 percent that one spouse will need such care. For how long? The average stay runs about two and a half years.Long-term care is expensive.
Nationally speaking, a year in a nursing home is estimated to cost an average of $90,000. Little wonder 50 percent of married couples with one spouse in long-term care are impoverished within one year of admission. For singles, that percentage jumps to 70 percent.
Medicaid is oftentimes confused with Medicare
While Medicare is solely a federal program, Medicaid is a joint state-federal program. Each state operates its own Medicaid system (and may give it a different name than “Medicaid”), but it must adhere to federal guidelines to receive federal funds. Federal money pays for half the state’s Medicaid costs, and the state pays the rest. There are strict income and asset guidelines that must be satisfied to be eligible for Medicaid coverage.
What about simply giving away your assets to loved ones to qualify for Medicaid?
Legally speaking, any transfer of assets for less than fair market value (i.e., a gift) may subject you to a lengthy period of Medicaid ineligibility under a complex and confusing web of Medicaid regulations. Nevertheless, as with most areas of life, proper planning is rewarded and the failure to plan is not. Through proper Medicaid planning, you may be able to legally qualify for Medicaid and protect your assets for yourself now and your loved ones later.
What about Long-Term Care Insurance?
If you are in good health and can pay the premiums, long-term care insurance (LTC or LTCI) is another means to pay for your care. In addition, long-term care insurance is sometimes used in conjunction with Medicaid legal planning to pay for care during any period of potential ineligibility.
You may not be willing to admit that you may become incapacitated and perhaps need expensive long-term care in the future. However, denial is not a strategy and there is no time like the present to plan. A debilitating illness or injury could strike any of us at any time. When you are ready to explore your options, contact us to schedule an initial consultation.
Probate & Trust Administration
There can be terrific grief and pain at the loss of a loved one. Beyond grief and pain, when you add external stresses to the equation, you can have a disaster on your hands in very short order. Part of the responsibilities or duties of an executor or administrator of an estate can be to reduce the level of stress during the probate process.
How does probate work?
There can be terrific grief and pain at the loss of a loved one. Beyond grief and pain, when you add external stresses to the equation you can have a disaster on your hands in very short order.
Part of the responsibilities or duties of an executor or administrator of an estate can be to reduce the level of stress during the probate process.
The fundamental duties of a personal representative (also known as an “executor,” if male, or an “executrix,” if female) of an estate are the same as those of a trustee–protecting the assets and interests of the beneficiaries.
One way to protect those assets and interests and, at the same time, help the probate process go smoothly, is to have all of your ducks in a row and prepare for court as best you can.
Read on for some essential reminders about the probate process and how representatives can assist with the process.
What should I know about the probate process?
A personal representative is required to prepare and file an inventory and a list of claims after the representative is approved by the court. The timeframe for this important chore is set by statute. This inventory should detail all of the assets subject to probate (i.e., that did not pass outside of probate by operation of law or otherwise). The property must be valued and even appraised as necessary. The claims include debts due and owing to the estate (not debts the estate owes to another party). The inventory provides both potential beneficiaries and creditors of the estate an idea of the estate’s assets and claims. [Beneficiaries want to know what they might get and creditors want to know if there is enough money to get paid.] If the inventory is filed late, the representative could be fined and removed, which would slow down the process (and raise tempers).
One thing to realize if you are a beneficiary is that the will may be “read” a few days after the funeral, but the gifts and bequests are not given out at that time. Yes, you may be entitled to the assets, but the inheritance is subject to the estate’s administration. The representative must settle the decedent’s debts and claims before he or she can make any distribution of the assets. So, beneficiaries, do not go to Grandma’s house with a moving truck and start taking whatever you want. Most likely, the representative is doing his or her job and making sure everything stays where it is until probate is closed.
As noted above, the representative also must to keep the administration process moving along by settling all of the decedent’s debts. He or she must give proper notices to creditors, to include making publication in the appropriate newspaper and sending written notice to known secured creditors by certified mail. Also, some representatives are under the mistaken impression that all debts must be paid. He or she begins paying the decedent’s bills immediately, which is not necessarily good. Some states provide “permissive notice” to unsecured creditors and this may avoid paying some unsecured claims.
The representative must keep the beneficiaries in the loop, to include providing each with notice via certified mail that the will has been admitted to probate and a copy of the will. In addition, the representative must inform the beneficiaries regarding any information that might affect their rights. For instance, beneficiaries have the right to ask for a formal accounting by the independent executor.
The representative is responsible for the care and maintenance of estate property, treating it with even greater care than his or her own property. The representative is able to sell any property that is perishable or would deteriorate in value during the probate process.
As you can see, being a representative is a big, big job. Consequently, he or she can be removed if proven to have been guilty of any gross misconduct or mismanagement in the role of representative. The representative may be subject to a suit for breach of fiduciary duty. Along the way, there are taxes to be paid and returns to be filed, along with a many other details.
It’s okay to ask for help.
So you see, there is more than a little pressure on the personal representative. As a result, it is essential that the representative work in concert with The Law Office of Cheryl Chapman Henderson, LLC, an experienced estate planning attorney to guide the representative or beneficiaries during this process … and avoid all of the hidden landmines.
One of the hardest things to know about Veteran’s Benefits is that there are so many things that you possibly do not know. Accordingly, the best approach is to gather up all of your paperwork and spend some time discussing the situation with an attorney experienced in this area. It is essential that you have skilled legal counsel who has been through this arduous government process numerous times.
Do you know what you don’t know?
One of the hardest things to know about Veterans Benefits is that there are so many things that you possibly do not know. Accordingly, the best approach is to gather up all of your paperwork — including service records and discharge forms — and spend some time discussing the situation with an attorney experienced in this area. As with Medicaid, it is essential that you have skilled legal counsel who has been through this arduous government process numerous times.
Are the benefits the same for every Vet?
No. Programs and services for veterans are not the same everywhere for every veteran. In fact, some programs are based on when and where you served, your length of service, the type of discharge you received, and whether it was in wartime or during peace time.
The definition of a “veteran” also has different meanings for different types of benefits. Why? Because the relevant legislation was enacted piecemeal. Each benefit may have different criteria for its applicants. For example, you may qualify for some benefits with just one day of service, but for others you need to serve a minimum amount of time, like two years.
What if there are programs I don’t know about?
You may not know about a number of benefits available to you or your family members, let alone how the application and appeals processes work. Veterans Benefits include medical care and disability compensation, but there may be other programs for which you qualify and should apply. That means sorting through the details of available benefits, eligibility criteria, and the appropriate government agency that handles a particular benefit. In addition, you need to complete the proper forms properly or face rejection.
After serving in our country’s armed forces, make sure you are aware of all benefits to which you or your family members are entitled. Getting information and successfully applying for Veterans Benefits is not light duty. However, your likelihood of success is greatly enhanced with the skillful guidance and assistance of an attorney who has dealt with the Veterans Administration, the branches of the military and their personnel offices, and the Department of Defense. Attorneys at The Law Office of Cheryl Chapman Henderson, LLC HAVE this type of experience and can use it to resolve administrative issues, get answers, and advocate for your rights and benefits.