Today’s Q&A on ElderCareMatters.com is about Probate

Question:  I don’t quite understand what Probate is, but I have heard that this is something that we should try to avoid. Is this correct?

Answer:  Avoiding probate is not always a good idea depending on the circumstances of the matter.

Probate is the legal process by which assets of a deceased individual are distributed either according to his or her Last Will and Testament, or by state law if there is no Will (an “administration” proceeding).

When a person dies, his or her assets must be separated into two categories:

(1)   Non-probate: Non-probate assets are any assets for which the inheritors have been specifically named.  Some examples are accounts with beneficiary designations, in-trust-for accounts, Totten trusts, or joint assets with the right of survivorship.

(2)   Probate: all other assets in the name of the deceased.

Non-probate assets will pass to the named beneficiary or joint owner by operation of law, and therefore, the Will will have no relevance and will not control those assets. The probate process is only necessary when probate assets are left solely in the name of the deceased without a beneficiary designation. Even then, provided the total value of the assets is minimal and the identity of the heirs can be established, an affidavit may be sufficient to get the assets distributed to the heirs. When a person dies without a Will, his or her probate assets go through an “administration proceeding.” When a person dies with a Will, the probate assets go through a “probate proceeding.”

An administration proceeding is the process by which an heir of the deceased person will petition to the Surrogate’s Court to become the administrator of the estate of the deceased. The individual who may seek to become the administrator is determined by law and starts with the decedent’s spouse, then any of his or her children if there is no spouse, and so forth.  If approved by the Surrogate, the administrator will be issued “letters of administration” as proof of his or her authority to handle the estate of the decedent. The administrator is often required to file a bond as a condition of being appointed. Once appointed, the administrator is responsible for getting an employee identification number (EIN) for the estate, opening an estate account, locating and collecting all estate assets, paying debts and income and estate taxes if any, and then distributing the remaining assets according to a list provided under state statute.  For example, if the decedent is survived by a spouse but no children, the spouse will get all of the assets. However, if the decedent is survived by a spouse and children, the spouse will get first $50,000 and the remainder will be divided and distributed 50% to the spouse and 50% to the children.

A probate proceeding is the process by which a deceased person’s Last Will and Testament (“Will”) is proven to the Surrogate’s Court to be valid, after which the terms of the will are legally enforceable.  The process entails the following:

(1)   Filing the original Will with a verified petition for letters of testamentary to the Surrogate’s Court in the county where the deceased person was domiciled;

(2)   Providing notice to any and all individuals who would inherit from the deceased if there was no Will. This gives those individuals an opportunity to file objections as to why the Will is not valid and/or why the nominated executor should not be authorized to carry out the instructions of the Will;

(3)   Once the nominated executor is appointed, he or she will receive “letters of testamentary” as proof of his or her authority to handle the estate of the deceased;

(4)   The executor is then responsible for getting an employee identification number (EIN) for the estate, opening an estate account, locating and collecting all estate assets, paying debts and income and estate taxes, if any, and then distributing the remaining assets according to the decedent’s Will.

For individuals with assets in another state, an administration or probate proceeding may have to be initiated in the other state (an “ancillary probate”) as well as in New York. The best way to avoid probate is to have all assets held by a living trust, whether revocable or irrevocable.

You can find help with this and other Elder Care Matters on: ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Resources.

An ElderCare Matters Partner
Ronald A. Fatoullah, Esq., CELA
Great Neck, New York
An ElderCare Matters Partner


Today’s Q&A on ElderCareMatters.com is about reversing a gift in order to qualify for Medicaid Benefits

Question:   Mom gifted her home to my sister several years ago.  Is there any way that this gift can be reversed so that Mom can be approved for Medicaid benefits?

Answer:  Many states allow a reduction of a transfer penalty by returning some of the transferred property. All states will eliminate a transfer penalty with return of 100% of the transferred assets. So, yes the penalty can be eliminated with return of the home. Whether you should do this or not requires a calculation dependent on when the gift was made as well as several other factors.

To find help with this and other elder care matters, go to: ElderCareMatters.comAmerica’s National Directory of Elder Care / Senior Care Resources for Families.

An ElderCare Matters Partner
Stephen J. Bailey, Esq.
Birmingham, Alabama
An ElderCare Matters Partner

 


Today’s Q&A about Medicaid Eligibility is answered by an Elder Law Attorney from Illinois

Question:  How would I know whether my elderly father is eligible to receive help from the government in order to live in a nursing home? He has no income, to speak of, other than his monthly Social Security check, has a very small checking account, owns his small home, and desperately needs nursing home assistance.

Answer:   You need to consult with an Experienced Elder Law Attorney in your State.  The cost of long term care in a Nursing Home is paid for either with the persons own money, private pay, or if you meet the financial and other qualifications Medicaid.  In addition, long term care may be paid by long term care insurance, by those lucky enough to have it.  However for most people their care is paid by liquidating all their assets and using them to pay the nursing home.  While Medicare pays for up to 100 days of rehabilitative care in the nursing home after 3 days of hospitalization and also pays for 2 weeks of respite or pain management care for hospice patients, it does not pay for long term care.  The government program that pays for long term care is Medicaid.  Unlike Medicare, Social Security Disability and Social Security, there is no right to Medicaid; it is up to you to establish your qualifications for Medicaid.

Medicaid has both asset and income limits.  The limit for non-exempt assets for an individual is $2,000.00. Assets above that amount must be spent down, converted into exempt assets or otherwise handled in a way compliant with the Medicaid provisions.  Your father’s small home is an exempt asset but only as long as he intends to return to it. Once he decides to stay in the nursing home permanently, or once the State has decided that it no longer believes that he is returning, then the home becomes a non-exempt asset and generally must be sold and the proceeds used to pay for his care.  It is important that you speak with an Elder Law Attorney prior to taking any steps with your father’s home, as there are exceptions in some States which allow in limited circumstances that it be transferred without penalty.  There are several strategies which allow you to preserve some additional funds for your father or the family, but whether you can use them depends upon the State in which your father resides and the actual facts of his circumstances.

In general all of his income must be spent on the nursing home with the exception of a small monthly allowance for the applicant’s personal use. In Illinois that personal exception is $30 per month.  In addition, your father’s qualification will be dependent upon what he has done with his money over the past 5 years. This is referred to as the look back period, and any transfers made by your father for less than fair market value, such as gifts, may result in a penalty period where Medicaid would not pay for his care. Based upon the facts you present I believe that with the assistance of an Experienced Elder Law Attorney, your father should be able to have Medicaid pay for his nursing home care, and with the Attorney’s assistance may be able to set aside a small fund of money for him.  Good Luck.

To find Elder Law Attorneys near you who can help you plan for and/or deal with your elder care matters, go to: ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Resources.

James C. Siebert, Esq., An ElderCare Matters Partner
James C. Siebert, Esq.
Arlington Heights, Illinois
An ElderCare Matters Partner

 


Today’s Q&A on ElderCareMatters.com is about providing long term care services for parents

Question:  I wish to provide my parents with caregiving services.  May I charge for the long term care services that I provide, and will these services be tax deductible for my parents?

Answer:  Like so many things in the tax code, the answer is: It depends.

Qualified long term care services normally qualify as medical expenses that are eligible to be deducted as itemized deductions on a taxpayer’s individual income tax return to the extent they exceed insurance reimbursements or any other reimbursement. This is trickier than it first appears because VA disability pension, which some chronically ill taxpayers receive, is a payment of unreimbursed medical expenses and only personal care expenses in excess of the VA disability pension received are, therefore, deductible.

The Internal Revenue Code defines “qualified long-term care services” to include personal care services, which are required by a chronically ill individual AND are provided pursuant to a plan of care prescribed by a licensed health care practitioner. A chronically ill individual is one that has been certified by a licensed health care practitioner to either be unable  to perform at least two of the activities of daily living OR requires substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment.

Finally, the Internal Revenue Code prescribes one more requirement for care providers that are related to the chronically ill taxpayer. For payments made to a spouse or relative of the  chronically ill individual, the payments are only deductible if the caregiver is a licensed professional (i.e. doctor, registered professional nurse, or licensed social worker). Relatives that must meet this additional requirement are:

Descendants (including Sons and daughters-in-law)
Sibling (including step-siblings and Brothers and sisters-in-law)
Ancestors  (including Fathers and mothers-in-law)
Nieces  and nephews
Aunts  and uncles

Although the list is quite comprehensive, notice that some relatives are omitted,  such as:

Cousins
Grandsons-in-law and Granddaughters-in-law
Children of nieces and nephews
Aunts-in-law and Uncles-in-law

To find additional help with this and other elder care matters, go to ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Resources.

An ElderCare Matters Partner
Stephen J. Bailey, Esq.
Birmingham, Alabama
An ElderCare Matters Partner

 


Today’s Q&A on ElderCareMatters.com is about Applying for Medicaid Benefits

Question:  How would we go about applying for Medicaid benefits?

Answer:  Medicaid benefits are going to be different in every state.  The first thing you need to determine is what benefits you seek.  For instance, in Pennsylvania, if you are seeking benefits for home and community based services, you will start with the local area agency on aging.  If you are seeking benefits for nursing services provided in a nursing home, you would file the application at the County Assistance Office.  In any event, you can get this information from your local Area Agency on Aging or an experienced Elder Law attorney.

To find Elder Law Attorneys near you, go to ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Resources.

An ElderCare Matters Partner
Robert M. Slutsky, Esq.
Plymouth Meeting, Pennsylvania
An ElderCare Matters Partner


Today’s Q&A on ElderCareMatters.com is about Medicaid Countable Resources

Question:   Are company pensions and annuities considered a “countable resource” when applying for Medicaid nursing home care?

Answer:   Yes, all monthly income is included as a “countable resource” when applying for Medicaid.  That means social security, annuity payments (regular annuities or private annuities, pension payments (civil or military service or private), rents, royalties, dividends, interest, etc. are just some of the types of income that are included as “countable resources” by Medicaid.

To find additional help with your elder care matters (including finding Elder Care Professionals near you), go to ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Resources.

An ElderCare Matters Partner
I. Michael Tucker, Esq.
Altamonte Springs, Florida
An ElderCare Matters Partner

 


May Someone With Dementia Sign a Will?

Answer:   Millions of people are affected by dementia, and unfortunately many of them do not have all their estate planning affairs in order before the symptoms start. If you or a loved one has dementia, it may not be too late to sign a last will and testament or other documents, but certain criteria must be met to ensure that the signer is mentally competent.

Many family members or friends discourage those with dementia from seeking legal advice because they feel that the person is not capable of doing planning or executing documents. In many instances that is not the case and the individual does, in fact, have enough mental capacity to sign a will. However, in some circumstances an individual is clearly incapacitated and a guardianship proceeding may be required in order to obtain the appointment of a guardian to manage the individual’s affairs. If a person is deemed to be incapacitated he/she clearly cannot execute a will.

In order for a will to be valid, the person signing must have “testamentary capacity,” which means he or she must understand the implications of what is being signed. Simply because you have a form of mental illness or disease does not mean that you automatically lack the required mental capacity. As long as you have periods of lucidity, you may still be competent to sign a will.

Generally, you are considered mentally competent to sign a will if the following criteria are met:

  • You understand the nature and extent of your property, which means you know  what you own and how much of it.
  • You  remember and understand who your relatives and descendants are and are able to articulate who should inherit your property.
  • You understand what a will is and how it disposes of property.
  • You understand how all these things relate to each other and come together to form a plan.

Family members may contest the will if they are unhappy with the distributions and believe you lacked mental capacity to sign it. In addition, a will can be contested if “undue influence” was exerted on the signer of the will. If a will is found to be invalid, a prior will may be reinstated or the estate may pass through the state’s intestacy laws (as if no will existed). To prevent a will contest, your attorney should help make it as clear as possible that the person signing the will is competent. The attorney may have a series of questions to ask you to assess your competency. In addition, the attorney can have the will signing videotaped or arrange for witnesses to speak to your competency. In any event, New York law requires that at least 2 individuals witness the signing of a Last Will & Testament.

If you need help with this or other elder care matters, you can locate an Elder Law Attorney near you on ElderCareMatters.comAmerica’s National Directory of Elder Care / Senior Care Resources.

An ElderCare Matters Partner
Ronald Fatoullah, Esq., CELA
Ronald Fatoullah & Associates
Great Neck, New York
An ElderCare Matters Partner


Today’s Elder Care Question on ElderCareMatters.com is about the effect of gifting on Medicaid Eligibility

Question:  Will the fact that Dad has given gifts to his children over his lifetime preclude him from receiving Medicaid benefits?

Answer:  The only gifts that matter to Medicaid (currently) are gifts made within 5 years of filing for Medicaid benefits.  There is talk that this will be extended to a 10 year look-back period but this is not the current law.  Small gifts or gifts that are not made in order to qualify for Medicaid are not usually considered a problem during the 5 year look-back period.  A watch or similar item for a birthday or graduation would not present a problem, but an automobile would.

If you need help with this or other elder care matters, you can locate an Elder Law Attorney near you on ElderCareMatters.comAmerica’s National Directory of Elder Care / Senior Care Resources.

An ElderCare Matters Partner
Ivan Michael Tucker, Esq.
Law Office of I. Michael Tucker, PLC
Altamonte Springs, Florida
An ElderCare Matters Partner


Today’s Elder Care Question on ElderCareMatters.com is about Probate

Question:  What is Probate?

Answer:  Probate is the court proceeding to transfer a dead person’s assets to the people who are supposed to get them. Simple in concept, but humbug in practice. Probate can easily take a year or more to complete, and the attorneys’ fees and other costs associated with probate could easily eat up 5% or more of a decedent’s gross estate. (“Decedent” is lawyer talk for a “dead person.”) If a decedent owned assets located in more than one state or country, it may be necessary to have a probate in each jurisdiction where the assets are located. If one probate is bad, you can bet that more than one probate is worse. In addition to the money and time that probate can consume, another reason people try to avoid probate is that the court’s probate files are public records. Nosy people can go through the court’s probate files and gather all kinds of information that may be profitable to them-and detrimental to decedents’ families.

If you need help with this or with other kinds of Elder Care Matters, go to ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Professionals.

 

An ElderCare Matters Partner
Scott A. Makuakane, Esq., CFP
Est8Planning Counsel LLLC
Honolulu, Hawaii
An ElderCare Matters Partner

 


Today’s Elder Care Question on ElderCareMatters.com is about the Medicaid Spend Down

Question:  My mother (who is 83 years old, blind, has lived in a nursing home for 4 months but owns a home, and cannot walk) has a $14k spend down for Medicaid.  What exactly can this money be spent on?

Answer:  As an Elder Law Attorney the first question I would have for you is who told you that your mother had a spend down amount of $14,000? Do you mean pre-qualification spend down of your mother’s resources or do you mean post Medicaid approval where the State has determined a Spend Down Amount. The distinction is important since in Illinois pre-qualification spend down is not as restricted as post approval spend down which is generally limited to medical expenditures.

You really need to see an Elder Law Attorney to discuss your mother’s overall situation. Your question indicates that your mother still owns her home. Typically if someone enters a nursing home without an intent to return home, then the home is no longer an exempt asset. In Illinois if certain steps are not taken in regard to the home, it may result in your Mother’s application being denied. In addition, there are several exceptions to rules regarding homes which you may or may not qualify for which can allow the home to be preserved. In addition, you indicated that your Mother has been in the nursing home for 4 months, but have not indicated how the nursing home bill for that period was being paid. Even if your Mother received the full 100 days of Medicare rehabilitative coverage in the nursing home, that still leaves a period of time that must be paid for privately or by Medicaid. While Medicaid will pay for nursing home care for up to 3 months prior to the date of the application, in Illinois the applicant must meet all the Medicaid qualifications on the first day of each of those three months for Medicaid to pay them.

Since your Mother has $14,000 she would not qualify for the pre-application Medicaid coverage as it is above the asset limit. So, whether you have already filed the Medicaid application or not, you must consider what amount your Mother will have to pay to the nursing home which Medicaid will not cover. You need to address that issue prior to making any decision as to how to spend down the balance of the money. These are all complicated questions and issues, and you cannot expect to get correct information from anyone other than an Elder Law Attorney.

I would highly recommend that you pay a portion of that money to an experienced Elder Law Attorney to do an overall evaluation of your Mother’s qualifications, whether her home can be preserved, whether there are any other planning strategies she might be able to take advantage and to make sure that the allocation of her monies is done correctly so that it does not result in either a penalty period or a denial of benefits. Good Luck.

If you need additional information about this or other Elder Care Matters, go to www.ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Professionals.

James C. Siebert, Esq., An ElderCare Matters Partner
James C. Siebert, Esq.
The Law Office of James C. Siebert & Associates
An ElderCare Matters Partner


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