Category Archives: Estate Law

When should I file my parent’s Medicaid application?

Q: When should I file my parent’s Medicaid application for long term care? He should qualify as medically necessary, but only after we spend his 40k savings on private care. Should I file now or after he spends the money?

A: It is highly advisable not to do this on your own. If there is $40,000.00 in assets to spend down, you need to do this with the advice of an experienced elder law attorney. There are ways to shelter some of these assets and it will be well worth the legal fee as it will likely save a portion of your father’s money which will otherwise go to Medicaid.

 

False information to Medicaid

Q: If I told Medicaid I had rented instead of owning the property, and was approved. With today’s new health care changes, am I ok?

A: Providing false information to obtain Medicaid benefits unfortunately is a crime. Medicaid could take action to recover payments they wrongfully made based on that information, by having you charged with the crimes of theft and fraud and/or suing you in civil court. If by “today’s new health care changes” you are referring to the Affordable Care Act, it has no bearing on the fraud and overpayment issue.

 

New wife is stealing money from my dad

Q: How can I protect my Dad’s retirement money from his new wife. I have power of attorney. She took $4,000.00 from him before the marriage. Dad is mildly impaired. He forgets to eat and cannot manage money. I took over finances, so she took him from PA to West Virginia and forced him to marry her without my knowledge. What can I do to protect his finances? She is trying to withdraw his retirement money. (McMurray, PA)

A: Unless your father is mentally unable to manage his finances, which would allow a guardian to be appointed, you little at this point. He needs to see an attorney. A trust arrangement could be established for his assets that are not IRAs or Qualfied Plan Accounts. Please note that in a guardianship proceeding, a wife is generally given higher priority to be appointed than you so you would need to prove she is not qualified to serve as guardian of his estate. You will need to get him to an attorney if he is going to be helped-assuming he wants to be helped. You need to understand what a Power of Attorney is. It is simply an authorization from your dad to do things on his behalf. If it is a “durable” power of attorney, that power continues even if he later becomes disabled. The POA does NOT, however, remove his ability to make his own choices. So, if he WANTS to give his money to his new wife, he can. There is nothing you can do about it, unless you are appointed by the court to be his guardian. You describe him as “mildly” impaired. That is not likely to meet the legal standard to show that he needs a guardian. Talk to a lawyer. You can discuss how she is manipulating him and whether there is any wrongdoing there. Also, if he creates an irrevocable trust and makes you trustee, his wife would have to convince you to release the money. His financial estate gets even more complicated by the fact, that if you and he transfer assets out of his name, and he dies leaving her with little or no money, she can challenge by filing an election against will, which if successful, she could claim one-third of certain assets of his. This is a complicated situation and he should really see a lawyer.

Elderly father’s step-daughter is taking financial advantage of him

Q: My father was just diagnosed with a terminal illness at 81 years of age. His step daughter “talked” him into giving her POA. What can we do? We all live hours away here in Pittsburgh. My sister is going up to take care of him, after she puts her affairs in order. She is also the executor of his will (as she understands it . We are worried she (step daughter) will change his living will. He feels intimidated by her (she lives close to him). Afraid she will change it and take the house away and put him on the streets. He lives near Tionesta, PA. What are our options? (Pittsburgh, PA)

A: First, it is important to understand the difference between a Living Will and a Will. The living will is the “pull the Plug” document that contains a person’s wishes about being removed from life support. What you are probably concerned about is changing the Will which is the document that passes your father’s property at death. Generally, the Will cannot be changed by someone with a POA. The danger of the POA is that she can make the Will irrelevant by moving all of his assets out of his name. A POA agent is supposed to act in the best interests of the principal (your father) so you could take her to court if she takes all of the assets for her own benefit, but it is better to prevent a problem rather then attempt to solve it in a court proceeding. Talk to the step-daughter. At this point you have no evidence that she has bad intentions. She needs to understand her liability for abusing the POA. If talking won’t help, then you will most likely need to start a guardianship proceeding in court. Unless your father revokes the POA, a guardianship is the only way to get it rescinded. If you cannot work this out within the family, hire a lawyer to communicate with her.

Uncle is not married, has no children and dies without a will.

Q: If my uncle dies without a will, in PA, does all the wealth go to that one living brother or is it divided in three shares? Here are the details of this in testate in PA. Have an uncle who has never been married and has no children. He had three brothers, including my father. My father and one of his brothers is deceased and one brother is still living. Three shares, 1 to the living brother, 1 to the children of once deceased uncle, and 1 to the children of my father (the other brother).(Pittsburgh, PA)

A: You are correct. If there is no will (intestate), inheritance falls under the PA intestate succession statute. The shares of a deceased brother pass down to children of the deceased brother in equal shares.

When should I file my parent’s Medicaid application?

Q: When should I file my parent’s Medicaid application for long term care? He should qualify as medically necessary, but only after we spend his 40k savings on private care. Should I file now or after he spends the money?

A: It is highly advisable not to do this on your own. If there are $40,000.00 in assets to spend down, you need to do this with the advice of an experienced elder law attorney. There are ways to shelter some of these assets and it will be well worth the legal fee as it will likely save a portion of your father’s money which will otherwise go to Medicaid.

 

HOW IS IRA DISTRIBUTION TAXED?

Q: John named his estate as the beneficiary of his IRA. He died after his required beginning date in 2012. After his death, the trustee of the IRA distributed the balance of his IRA to his estate. If the entire amount of the IRA was distributed from the estate to the estate beneficiaries, who pays the tax on distribution, the beneficiaries of the estate? Pittsburgh, PA

A: The beneficiaries of the estate will be liable for the tax on the amount of each received. The beneficiaries will be entitled to reduce the distribution amount by their allocated share of basis in the IRA if there was any. The distribution is reported as other income to the estate on Form 1041. The amount is deemed to be distributable net income and is reported as an income distribution deduction by the estate, limited by DNI (§661). The allocated amount will flow from Form 1041 to Schedule K-1 and reported on the beneficiaries’ personal Form 1040.

 

Can step-sister sign dad’s cabin to herself with a POA?

Q: My father was just diagnosed with a terminal illness. He is 80 years old. His step daughter “talked” him into giving her POA. What can we do? We all live hours away. My sister is going up to take care of him, after she puts her affairs in order. She is also the executor of his will (as she understands it). We are worried she (step daughter) will change his living will. He feels intimidated by her. She is big and forceful. We are afraid she will change it and take the cabin away and put him on the streets. He lives in the cabin in Crawford County. We are all in Allegheny except the step-daughter who lives up there. What are our options?

A: Generally, an Agent on a POA cannot draft and sign a will for another person. But this could not stop her from having a new deed to the cabin prepared and signed by her as POA, in which she deeds it to herself. If he is still mentally competent, perhaps you can advise him to revoke the POA by signing one over to you or your siblings. If this is not possible, if you want to control the situation, you may need to file for a guardianship. Unfortunately, he lives in Crawford County and you may have to file there. I think you should discuss this with a lawyer here or in Crawford County. He or she may be able to start communication with the step daughter and this may put her on notice that her actions are being scrutinized. If you have evidence she is diverting money, or has wrongfully converted his money, you can have an attorney petition the court for an accounting of POA funds. Before you do anything I would attempt to see if you and your siblings can meet with her to put all of these concerns on the table. Open communication may help to avoid a legal fight.

 

Can my sister charge me for elder abuse?

Q: I have been my mother’s power of attorney as well as on a joint checking account with her for the past couple of years. She has now had to be placed in a dementia care home and my sister who was not involved with any of her care filed for and got guardianship. I then closed the joint accounts and sent the money to the care home. My sister got copies of bank statements and is now charging me with stealing my mother’s money. My mom and I were ok with me spending what I needed as well as me using money from my private account to help her with bills. Since I was a legal joint owner on that checking account does my sister have a legal standing to accuse me?

A: Based on the limited facts I am hearing, the simple answer is that when you were acting as POA Agent, you had a fiduciary duty to act in your mom’s best interest and document all your expenditures of her money. If you can did act in her best interest and can document all of her expenditures, your sister can allege all she wants, proving it is another matter. In order for her to proceed against you legally, she would need to hire an attorney to file a petition in Orphan’s Court requesting an accounting of all of your spending as agent for your mother on her POA.

 

How can I keep my inheritance and remain on Medicaid?

Q: I am a 59 year old female, legally married but my husband left me and moved from Monroeville to AZ. We had no savings and the only asset I was left was a 20 yr. old mobile home which my 20 yr. old son and I currently reside. I was a homemaker and have no skills but was able to secure a full time minimum wage fast food job with no health ins. benefits. I had no savings and I applied for Medicaid and now rely on it for health insurance. My mother recently passed away and I received an inheritance check (have not cashed) worth more than what I think Medicaid allows. I have been told that I need knee replacement surgery and I need the Medicaid to get it. I need to know what legal options I have regarding keeping Medicaid and my inheritance. Could I apply for disability, social security, some other option?

A:  You need to see a lawyer versed in Medicaid regulation and SS Disability issues.  Two separate issues and perhaps one attorney can advise on both. Without knowing more, generally, depending on the amount of your inheritance, you may be able to “spend down’ this money prior to your Medicaid application for eligibility, or, establish a special needs trust (SNT). The special needs trust requires some administrative work and my only be worth it to you if your inheritance is significant.  As to a potential disability claim, issue one will be whether or not you worked long enough to have full credits for eligibility for Social Security Disability Insurance (SSDI) benefits. Generally you’d need 5 years of earnings over the last 10 years. If you don’t have SSDI coverage, then you’d want to look at Supplemental Security Income (SSI) and the resource limits will be same as Medicaid. Please see a lawyer so these issues are addressed thoroughly.