Today’s Elder Care / Senior Care Q&A for Wednesday, 12/16/2015

QUESTION:  What are the 2016 Estate and Gift Tax Limits, as set by the Internal Revenue Service (IRS)?

Answered by:
Estate and Gift Tax
Patrick C. Smith, Jr., Esq.
The Smith Law Firm, P.C.
Augusta, Georgia
An ElderCare Matters Partner

ANSWER:  The IRS has announced that the basic estate tax exclusion amount for the estates of decedents dying during calendar year 2016 will be $5.45 million, up from $5.43 million for calendar year 2015.  This figure is in line with earlier projections.  The annual gift tax exclusion will remain at $14,000 for 2016.

Also, if the executor chooses to use the special use valuation method for qualified real property, the aggregate decrease in the value of the property resulting from the choice cannot exceed $1,110,000, up from $1,100,000 for 2015.

The increase in the estate tax exclusion means that the lifetime tax exclusion for gifts should also rise to $5.45 million, as will the generation-skipping transfer tax exemption.

21 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help in planning for and/or dealing with this issue or with any Elder Care / Senior Care matter, you can find the professional help you need in one of the following 21Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the National ElderCare Matters Alliance, an organization of thousands of America’s TOP Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.


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Today’s Elder Care Question and Answer for Monday, 12/14/2015

QUESTION: What are some asset protection mistakes that ALL families should be aware of?

Answer Provided by:

Asset Protection

Kevin Pillion, Esq.
Life Planning Law Firm, P.A.
Sarasota, Florid
An ElderCare Matters Partner

Top 10 Asset Protection Mistakes

1. Relying solely on a will or a living trust

A Will takes effect only upon your death, and a Living Trust, although preferable in some cases, will not protect your assets from Medicaid Recovery and Nursing Homes.

2. Relying on Medicare or health insurance

Neither Medicare nor health insurance pays for the cost of long-term care in a nursing home. With the average cost exceeding $7,000 a month, without a Plan most families will quickly run through their life savings.

3. Transferring all assets to children or other relatives

This almost always results in lengthy, unnecessary periods of ineligibility when Medicaid or other public assistance is applied for. And the tax consequences can be devastating. Often, it’s wiser to do nothing.

4. Placing all assets into joint ownership with another family member

This is often regarded the same as a transfer and can result in lengthy disqualification periods. Or it may not shelter assets at all. It can also create unfortunate legal problems for families.

5. Selling the family home to pay for nursing home care

This is almost never required. Yet many still believe that a person must sell his home to pay the nursing home.

6. Not taking Medicaid estate recovery seriously

Medicaid can and does sell your home after your death to recoup benefits paid out on your behalf.

7. Applying for a guardianship

This court-supervised method of dealing with a person’s incapacity is time-consuming, costly, burdensome, and restrictive. With proper planning, you avoid the need to go to Court.

8. Relying on family members to “do the right thing” when critical health care and financial decisions need to be made

In the absence of a Plan to protect assets and other planning documents, this is an awful burden to place on the members of your family.

9. Not seeking the advice of a specialist in elder law and asset protection planning

Medicaid and other government benefits programs are a highly complex area of the law; the law varies from state to state and even within a particular state. Very few attorneys and advisors know and understand the laws and rules that apply.

10. Doing nothing

Unless you have no assets to protect or you are unconcerned about how decisions will be made in the event of your disability or incapacity, you should take steps now to protect yourself.

21 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help in planning for and/or dealing with this issue or with any Elder Care / Senior Care matter, you can find the professional help you need in one of the following 21Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the National ElderCare Matters Alliance, an organization of thousands of America’s TOP Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.


Today’s Elder Care Question and Answer for Thursday, December 10, 2015

QUESTION: What Documents are Needed to Apply for Medicaid?

Answer Provided by:

Medicaid Attorney

Nancy Burner, Esq., CELA
Nancy Burner & Associates, P.C.
East Setauket, New York
An ElderCare Matters Partner

ANSWER: In New York State, you do need to provide 5 years worth of financial documentation when you apply for chronic/nursing home Medicaid. The purpose of providing this documentation is to comply with the state’s requirements regarding a look back period to determine eligibility based on current asset levels and past transfers of assets.   Transfers that can trigger a penalty period for Medicaid are any that are done without compensation. There are certain persons to which you can transfer assets without triggering a penalty including, but not limited to, spouses and disabled children. Note that this look back period does not apply to community/home care Medicaid.

The documentation that you should keep on hand in preparation includes 5 full years of monthly bank statements. These statements must be provided for all accounts regardless of whether they are still open at the time of application and include all CDs, brokerage accounts, retirement accounts, checking accounts, annuities, and savings accounts. You must also provide canceled checks and/or withdrawal slips for all transactions over a certain threshold amount, which vary county to county.  Other items to maintain include 5 years of tax returns, copies of documents regarding any estate of a spouse or any other person of which you were a beneficiary, closing documents for the sale of a residence, and records of insurance policies, especially those with a cash value.  While, many of these items can be obtained after the fact if you do not have them on hand, it makes for less leg work at the time of application if you have been saving the documentation through the years.

Medicaid is a federal program that also has state funding but is administered by each individual county. Each county has differing rules and may require different documentation. Familiarity with each county’s ever-changing rules will ensure the smoothest possible application process.

Often more important than knowing what documents to keep on hand as you age, is to prepare your estate plan in a way that protects your assets if and when you need the assistance of the Medicaid program. The five year look back period has strict rules that must be complied with and it is the job of an elder law attorney to make certain you are dealing with your assets in a way that is consistent with these rules.

21 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help in planning for and/or dealing with this issue or with any Elder Care / Senior Care matter, you can find the professional help you need in one of the following 21Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the National ElderCare Matters Alliance, an organization of thousands of America’s TOP Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.


Today’s Elder Care Question and Answer

Who may act as an agent under a Power of Attorney?

Answered by:
Power of Attorney
Stephen J. Bailey, Esq.
Bailey Law Firm
Birmingham, Alabama
An ElderCare Matters Partner

In general, an agent, or attorney in fact under a Power of Attorney may be anyone who is legally competent and over the age of majority.  Most individuals select a close family member such as a spouse, sibling or adult child, but any person such as a friend or a professional with an outstanding reputation for honesty would be ideal.  You may appoint multiple agents to serve either simultaneously or separately.  Appointing more than one agent to serve simultaneously can be problematic because if any one of the agents is unavailable to sign, action may be delayed.  Confusion and disagreement between simultaneous agents can also lead to inaction.  Therefore, it is usually more prudent to appoint one individual as the primary agent and nominate additional individuals to serve as alternate agents if your first choice is unwilling or unable to serve.

21 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help in planning for and/or dealing with this issue or with any Elder Care / Senior Care matter, you can find the professional help you need in one of the following 21Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the National ElderCare Matters Alliance, an organization of thousands of America’s TOP Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.

 


Today’s Elder Care Q&A is about Incapacity Planning

What is Incapacity Planning?

Incapacity planning is a broad area of law that covers how you are cared for if you become physically or mentally unable to care for yourself. The type of care could range from simple tasks like buying groceries, paying bills, and handling financial matters to more important decisions such as selling real estate, gifting assets to your children, or making critical medical decisions.

Depending on the needs of the individual or family, incapacity planning could include a number of planning techniques such as Property Powers of Attorney, Health Care Powers of Attorney, Living Wills or Advance Health Care Directives or Guardianships/Conservatorships.

21 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help in planning for and/or dealing with this issue or with any Elder Care / Senior Care matter, you can find the professional help you need in one of the following 21Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the National ElderCare Matters Alliance, an organization of thousands of America’s TOP Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.


VA Aid and Attendance Pension Benefit

What is the VA Aid and Attendance Pension Benefit?

If you or your spouse are a qualified war veteran, one or both of you may qualify for the VA Aid and Attendance Pension benefit. The purpose of this benefit it to assist to with the cost of long term care including in home care, assisted living and nursing homes.

To qualify for this benefit, the VA (U.S. Department of Veterans Affairs) will look at the amount of your financial assets and whether or not you own a home. If you own a home but are no longer living there, you may need to transfer your home in to an irrevocable residence trust. This is required even if your home is owned by your revocable living trust. Once the home is transferred to the trust and assuming you qualify financially otherwise, you can start receiving tax free income from the VA in the amount of approximately $1,000.00 – $2,000.00 per month. Your financial assets can be placed in this trust as well and then will not count towards the resource limits.

Other benefits/characteristics of the trust in addition to qualifying for the Aid and Attendance Pension benefit include:

  • The home will be protected from the Medi-Cal Estate Recovery Lien
  • The low Prop 13 tax basis in your home will be preserved and can be passed to the children
  • The beneficiaries of the trust will get a stepped up basis in any inherited property from the trust. This will result in little, if any, capital gains taxes due upon the sale of the property. If the a trust is not used, the beneficiaries will receive a lower carry over basis in the property if the property is gifted to them while the parent is alive and thus would have to pay capital gains taxes upon the sale of the property.
  • Any real estate owned by the trust can be sold by the trust and the proceeds from the sale of the home will not affect the seniors financial qualifications for the VA Aid and Attendance Pension Benefit or for Medi-Cal (assuming the property was the primary residence of the senior).

21 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help in planning for and/or dealing with this issue or with any Elder Care / Senior Care matter, you can find the professional help you need in one of the following 21Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the National ElderCare Matters Alliance, an organization of thousands of America’s TOP Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.


TOP 5 PROBLEMS WITH YOUR ESTATE PLAN

What are some unexpected problems that may arise when you leave money to your family upon your death?

  1. Heirs recklessly spend their inheritance: Failure to leave your estate to your heirs in a trust means that your family “wins the lottery” upon your death. Your spouse and/or children may recklessly spend their inheritance within months or years, which is what most lottery winners do. A trust can control what distributions are made to your surviving spouse and/or children after your death and also delay the distributions over a number of years.
  2. Wrong heirs inherit your estate: Failure to leave your estate to your heirs in a trust means that your surviving spouse or children own the assets outright and may choose to leave their inheritance to their second spouse, stepchildren or non-family friends instead of to your children or grandchildren upon their death. A trust can control who inherits what property upon the death of your surviving spouse and/or children and delay distributions so that your grandchildren inherit your estate after the death of your children.
  3. Heirs make bad investments decisions: Failure to leave your estate to your heirs in a trust means that your surviving spouse and/or children own the assets outright and may make bad investments and lose their inheritance within a matter of a few years. If a trust is set up properly with a trustee and successor trustees, you can control who makes the investment choices for the trust assets so that your family members do not end up like many lottery winners who go bankrupt as a result of bad investments.
  4. Heirs with drug/alcohol problems use your money to feed their addiction: Failure to leave your estate to your heirs in a trust means that family members who have a drug or alcohol problem may stop working or going to school and use their inheritance to fund their lifestyle of drugs and alcohol. A trust can be used to control distributions to your heirs and limit their access to trust money if their drug or alcohol problem causes them to stop working or going to school.
  5. Heirs lose inheritance to their creditors: Failure to leave your estate to your heirs in a trust means that family members own the assets outright and if they are subject to a lawsuit or the claims of their creditors, their inheritance may be lost to their creditors. A trust if properly set up can provide asset protection for your family members so that any assets held in trust for them are not subject to the claims of their creditors.

Solution: Each of these 5 problems identify why you need a trust in your estate plan. Don’t let these unexpected consequences hurt your family.

21 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help in planning for and/or dealing with this legal matter or with any Elder Care / Senior Care issue, you can find the help you need in one of the following 21Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the National ElderCare Matters Alliance, an organization of thousands of America’s TOP Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.


Long Term Care Planning

What long term care planning tips can you pass along?

I got a lot of phone calls about long term care planning after an article on Medicaid planning I ran a month or so ago. There were common areas of concern from spouses, parents and children caring for loved ones about the nature and range of financial planning options for long term care so here goes my top five tips.

Tip #1 Long term care includes nursing home care, assisted living, adult day care, respite care, and home health care. By age 85 nearly 55% will require some form of long-term care and approximately 44% will require nursing home care after age 65. These numbers do not reflect the millions of younger disabled persons that need long-term care at some point in their life. Caregivers report endless frustration, severe emotional stress and lose billions of dollars a year in lost wages trying to deal with bureaucracy. A knowledgeable professional should be able to review everything in an hour or two and give you a solid plan that suits your family situation and personal needs. Working with a professional will give you peace of mind and you will spend much less up front and save tens of thousands of dollars and endless hours of trying to learn everything on your own.

Tip #2 Purchase long term care insurance, if you can afford it. Many policies use to be for only 3 years, now you will see five year plans and more affordable spousal options. Nevertheless, shorter plans can still be good deals and useful planning tools if you have family support for home care.

Tip #3 Professional long-term care planning tools include: personal dependency, medical deductions, home transfers after accounting for basis and capital gain issues, annuities, converting interest income, domestic help, sale of property, sale of the home, owner financing, purchasing a new home or condo, commercial and family held reverse mortgages, owner occupancy rules and using a Medicaid waiver on the back side, partial sales, gift tax rules, life estates, private pay using long-term care insurance and other options, Medicare, Veterans Benefits, Medicaid, dozens of spend-down strategies, promissory notes, student loan forgiveness, life insurance loans and cash ins, legal separations and divorce, QDROs, bankruptcy, income trusts, special needs trusts, housekeeping and caregiving contracts, and various asset transfer options including special consideration for IRAs, 401K, deferred pension plans and other retirement plans. One plan does not fit all situations. Be wary of the source of your legal information. I’ve had the family insurance man cost clients $8,000 on a preneed burial, an elder’s home sold when a lawyer gifted it to a son who then lost his job and declared bankruptcy, and an entire estate gobbled up by listening to the next door neighbor.

Tip #4 Consider a caregiver contract with children or others where you pay for necessary services. Such contracts need to be in writing and comply with all aspects of the law including state and federal earned income rules and mandatory withholdings.

Tip #5 Disability and long-term care needs can come at any age, this is not just a senior issue, and therefore having good legal documents is the foundation of any plan. All powers of attorneys and wills should be reviewed for adequacy. Often old documents or those prepared by non-elder law or estate planning specialists fail to include language to deal with the IRS, gifting, specifics on the description of real property that may be sold or financed that a title insurance company may prefer, and have accounting provisions to safeguard your financial assets.

21 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help in planning for and/or dealing with this legal matter or with any Elder Care / Senior Care issue, you can find the help you need in one of the following 21Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the National ElderCare Matters Alliance, an organization of thousands of America’s TOP Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.


Pet Trusts – planning for your pets in your estate

What are Pet Trusts?

Some animals are undoubtedly beloved pets. They provide us with love and companionship, while there are other animals that are more than pets. For example, horses are an investment, they are a partner in exercise, they help some children with therapy and a comrade to see the world with if you ever had the distinct pleasure of exploring the wilderness on horseback. Seeing eye dogs or other therapeutically trained animals are literal life savers in some cases. All of these animals are deserving of the full legal protections that you can provide to them. Pet trusts are not tools reserved for the rich and eccentric. As of 2012, 46 states (and the District of Columbia) have laws in effect that allow for pet trusts. In 1996, the New York legislature enacted NY EPTL § 7-8.1, which allows for the care of any pet or animal by way of a trust, which terminates when the beneficiary animal dies. In fact, pet trusts are so popular and well ingrained in the law, that there is a model, uniform law, found at Uniform Trust Code 402. Pet trusts are now practically commonplace.

WILL VERSUS TRUST

There are some distinct issues that you will need to address if planning for your pet. The first is whether you want to plan for your pet in your will or create a trust. If you address the matter in your will, it is generally more inexpensive and easier to plan for. Wills, however, dispose of property, they do not impose enforceable promises upon the caretaker. Wills are more likely to be invalidated by a Court and wills only fund for the caretaking of the pet one time. If you have an expensive animal, such as a horse, you may need to insure continued funding and care. Trusts generally require more planning and involvement in its creation, but allow a greater degree of peace of mind and assurance that your wishes will be carried out. Trusts allow for a stream of income over time. If the trustee or caretaker is unable to fulfill their obligation the law allows for a Court to appoint another trustee or caretaker. In addition, you do not need to wait for the trust to be administered as you do a will.

ISSUES TO ADDRESS

There are several issues that best practice dictate you should address, whether you choose a will or trust.

Ownership: Pets are property, hence the need for an owner. A trust document can still control even with a third party owning the pet.

Financing: Paying for a pet rabbit is easy. This issue rears itself for more expensive animals such as a horse or exotic animals. You should also take into account the medical care for the pet. Horse owners know that horses even have their own dentists. If you have an large animal, transportation is necessary. Additional insurance costs may be incurred to transport them. The caretaker’s homeowners policy may increase or require a separate liability policy.

Remainder beneficiary: If there is money left in the trust when the animal passes, who gets that money?

Income generated: If the pet is also an investment, such as allowing for stud fees, who receives the income?

Whatever your decision, it will require legal counsel to guide your decision every step of the way. Only an experienced estate planning attorney should be considered for these decisions.

21 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help in planning for and/or dealing with this legal matter or with any Elder Care / Senior Care issue, you can find the help you need in one of the following 21Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the National ElderCare Matters Alliance, an organization of thousands of America’s TOP Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.

#elderlaw, #eldercarematters, #eldercare, #eldercareanswers, #elderlawattorneys, #elderlawanswers, #seniorcareanswers,  #estateplanning, #estateplanningattorneys, #findestateplanningattorneys,

 


Special Needs Estate Planning

What is Special Needs Estate Planning?

Special Needs Estate Planning focuses on providing for the special needs of our loved ones with disabilities when we are no longer there to organize and advocate on their behalf. Parents of children with special needs must make careful estate planning choices to coordinate all of the legal, financial, and special care needs of their children – both now and in the future.

An Overview of Special Needs Estate Planning

There are several types of trusts to assist with these special planning challenges. The most common types are Support Trusts and Special Needs Trusts.

  • Support Trusts:  Support Trusts require the Trustee to make distributions for the child’s support in areas like food, shelter, clothing, medical care, and educational services. Beneficiaries of Support Trusts are not eligible to receive financial assistance through Supplemental Security Income (SSI) or Medicaid. If your child will require SSI or Medicaid, you should avoid a Support Trust.
  • Special Needs Trusts:  For many parents, a Special Needs Trust is the most effective way to help their child with a disability. A Special Needs Trust manages resources while also maintaining the child’s eligibility for public assistance benefits.

There are two types of Special Needs Trusts:

  • Third-Party Special Needs Trust:  Created using the assets of the parent(s) as part of an estate plan; distributed by a Will or Living Trust.
  • Self-Settled Special Needs Trust: Generally created by a parent, grandparent or legal guardian using the child’s assets to fund the Trust (e.g., when the child receives a settlement from a personal injury lawsuit and will require lifelong care). If assets remain in the Trust after the child’s death, a payback to the state is required, but only to the extent the child receives public assistance benefits.

Special Needs Trusts are a critical component of your estate planning if you have loved ones with disabilities for whom you wish to provide after your passing. Generally, Special Needs Trusts are either stand-alone trusts funded with separate assets (like life insurance) or they can be sub-trusts in existing living trusts.

21 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help in planning for and/or dealing with this legal matter or with any Elder Care / Senior Care issue, you can find the help you need in one of the following 21Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the National ElderCare Matters Alliance, an organization of thousands of America’s TOP Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.

#elderlaw, #eldercarematters, #eldercare, #eldercareanswers, #elderlawattorneys, #elderlawanswers, #seniorcareanswers,  #estateplanning, #estateplanningattorneys, #findestateplanningattorneys, #specialneedsplanning, #specialneedsattorneys, #findspecialneedsattorneys


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