Blog
Medicaid Qualification - Part 1
By Kathryn S. Williams, Esq. on October 19, 2023
One of the biggest concerns people express is the fear that a stay in a nursing home will take all their resources and leave them with nothing to pass on to their heirs. It is a very difficult area of the law as the government has limited funds to assist people with nursing home expenses and the government is very interested in all of us using our own resources before we rely on government assistance. We will be posting a series of blogs on this topic and try to take the topics one by one.
The first thing to understand is that Medicare and other supplemental plans do not pay for long term care. Those programs will pay for a short term stay in a facility if the patient is receiving rehabilitation or physical therapy. If the patient needs to stay in the facility, however, after rehabilitation efforts or if someone is admitted to a nursing facility because they need custodial type care, Medicare and a supplemental plan pays nothing. The only way to pay for that care is private pay (just write a check each month) or have a long-term care policy pay. Long term care insurance is available, but you must purchase it when you are in good health and must then pay for it until you enter a facility or die. It is very expensive, and premiums can increase over time. It is worth looking at but is not always the solution. Private pay at a full-blown nursing facility can cost $10,000-$12,000 a month or more. Assisted living costs less, but not everyone can qualify for assisted living. Sometimes a person’s condition has deteriorated so much that assisted living is no longer an option. If you cannot pay for your care, Medicaid will pay. Medicaid is a poverty-based program and therefore, you must be poor to qualify for Medicaid. For a single person, being poor might mean that you can have no more than $2500.00 of assets.
Understanding the way nursing homes are paid for is the first step in planning.
Revocable Trusts
By Kathryn S. Williams, Esq. on July 13, 2023
People often do revocable trusts as part of their estate plan. I liken the trust to a container you create that will hold your assets during your life and then distribute those assets to your intended beneficiaries at your death. The so called "container" is owned by you during your life and completely controlled by you. The trust operates under the creator’s social security number and there are no tax consequences of things going in or out. The trust does not file a separate tax return while the creator is alive. The trust is an ideal way to avoid probate at your death. It allows you to ensure that assets pass to the beneficiaries you have selected without court involvement, but simultaneously allows you to keep ownership and control of your assets during your life.
In order for the trust to help with probate avoidance, however, the trust must own the assets or be the named beneficiary of assets. Creating the trust does not achieve anything if you do not then place assets in the trust. If you own your car at your death and it is in just your name, that car will be subject to probate even if you have a trust. You must make sure that the car is titled in the name of the trust.
Revocable trusts are wonderful instruments for probate avoidance, but do not protect assets if one of the creators needs a nursing home. Assets held in this kind of trust are treated just like all the assets you own and will be counted if you seek government assistance in a nursing facility.
Probate
By Kathryn S. Williams, Esq. on February 14, 2023
People often talk about probate but it is often misunderstood. When we discuss it, we are usually talking about a process that may be necessary when someone dies or when someone is incapacitated. Each state has its own system so how you proceed through that process may be very different depending on where you are domiciled. If you own assets in multiple states, you may need to complete a probate process in each of those states. While probate is actually a court, most often you file paperwork but do not have to appear in court.
When someone becomes incapacitated, and they have not already signed powers of attorney, it may be necessary for someone to file the necessary paperwork with the probate court to become that person’s guardian. A guardian is appointed after the court determines the competency of the proposed "ward" and the qualifications of the person seeking guardianship. That process requires an appearance in court and regular filings throughout the guardianship.
At someone’s death, it is necessary to change the ownership of assets from the deceased person’s name to the beneficiary. That can be done in several ways. If the deceased person owned property jointly with another person, the living person automatically becomes the owner. If an account or asset has a named beneficiary, that named person becomes the new owner. If, however, an asset is owned solely by the deceased person with no named beneficiary, probate is the process that changes ownership. If the deceased person had a will, the will is then filed with the court, and the executor starts the process. After payment of debts and expenses, the assets are distributed to the people named in the will. A will does not avoid probate. If there is no will, someone seeks to administer the will as an administrator, and then assets are ultimately distributed to the heirs as defined by state law. The probate process takes no less than 6 months to a year and can take several years. Some states allow small estate to bypass some of the process, but in New Hampshire, all estates must follow the same system.
There are other times when probate court proceedings are necessary such as termination of parental rights, adoption, name changes and other miscellaneous matters, and in each of those cases, there is a specific process required.
The probate process can become expensive. All proceedings in the court have some costs. There are filing fees, publication fees, bond fees and others. You are not required to have an attorney, but if you need one, then you will also have legal fees.
Health Care Power of Attorney
By Kathryn S. Williams, Esq. on January 12, 2023
It is extremely important that anyone eighteen years or older prepare and sign a health care power of attorney. These documents are often referred to as advance directives, health care proxies and living wills.
The health care proxy names someone to make your medical decisions in the event you are unable to make your own decisions. Each state has its own form, and the New Hampshire form was recently updated in the summer of 2021. It is important that you understand that you may need to use the document in a state where you have traveled so getting advice as to how to make sure yours will work well in other states is important. It is also wise to guide the person you appoint by answering some questions about what kinds of treatment you would, or would not, want.
Appoint the right person. These can be very difficult decisions for families so choose a person who will be able to be your health care advocate.
A living will is often done with a health care proxy as a way to express your wishes to your family, but you must do the health care proxy even if you have a living will.
As you sign the health care proxy, it is good to do a HIPAA waiver. This is a document that waives your privacy rights for the people you select as your health care agents and allows those individuals to speak to your medical team and get medical information about you.
The health care documents are often available in hospitals and in doctors’ offices as well as with your attorney.
Financial Power of Attorney
By Kathryn S. Williams, Esq. on December 12, 2022
Among the most important estate planning documents is the financial power of attorney, often referred to as a durable power of attorney. It is a document that gives another person the authority to manage financial matters for you. Its purpose is to make sure that if you are unable to handle your finances, someone can do it for you. The only alternative is a probate court guardianship at the time of your incapacity. Guardianships are expensive, time consuming and often burdensome. While the power of attorney is very important, it is something into which you must put a lot of thought and care. You need to carefully consider who will act for you, whether you will appoint more than one person, what authority you will give them over your finances, and whether there will be criteria for their using the document. There is no perfect solution for everyone. You also need a very carefully drafted document so that at the point when your family uses it, the document achieves all you need. The documents are somewhat state specific so they should be redone if you move. While you do not have to renew them, they work better if, at the time your appointed agents use them, the documents are fairly recent. It is important for every adult to consider signing a power of attorney as incapacity can happen to anyone at any time.
Wills – Not Always What You Think
By Kathryn S. Williams, Esq. on October 4, 2022
Be careful. Wills do not avoid probate. Too often, people say to me that they inherited a certain asset because it was left to them in the will. Ownership of assets cannot be transferred just by the will alone. If you are going to inherit under a will, the will must be submitted to the probate court with accompanying petition for estate administration. Court fees must be paid and there are various other documents that must be filed depending on the nature of the estate. After about 6 months to 1 year, and proof that creditors have been paid, the estate can be closed and assets can be distributed to named beneficiaries. There is nothing inherently wrong with this system and it works well to enforce the wishes of the person who died, but it is a process. If you want an estate to avoid the probate process, having a will alone will not achieve that objective.
