Tag Archives: Estate Planning

For purposes of Medicaid, what assets are exempt?

Q: I am widowed and getting up there in age. I want to make sure I can protect myself. I own a home, a car, some certificate of deposits and a bank account.

A: This is a very complicated issue and you should sit down with an elder law attorney to review your entire situation-assets, income, insurance, health, everything. Very generally what is exempt are one automobile of any value, prepaid burial expenses, special needs trusts and $2,000 in liquid assets. Some assets are conditionally exempt, for example, the principal residence, while residing in it and some income producing property.

 

Financial Power of Attorney issue. Did the law change?

Q: Long story short, my father has been in and out of a hospital for the last 2 years with complications arising from a benign tumor. Because of his medical setbacks, and in trying to conserve his money, I was able to find POA papers for PA online in order to handle his financial matters. We signed them in front of a notary, and I thought that was the end of it. However, when providing a copy of the POA to the bank to gain access to his accounts, I was informed that the form that we filled out was an old form, and since PA changed their POA laws at the beginning of 2015, was no longer valid. I would need to have a new 1st and last page signed by him and I that include the new 2015 legalese, and resubmit. The issue now, however, is that he has taken a somewhat turn for the worse, and is suffering from delirium. Because of this, I can’t have him sign anything knowing he doesn’t understand or comprehend what he is signing. Do I have any recourse to getting this rectified in his current condition without having to go through the courts to request guardianship/conservatorship privileges?

A: There is an inherit danger with pulling legal documents off the internet. PA House Bill 1429 was signed by the governor on July 2014 and made sweeping pages to Title 20 Sections 5601 through 5620, the law which governs Powers of Attorney in PA. The changes were effective on January 1, 2015. The changes not only affected the Notice requirements, but the Acknowledgement language and much more. I am sorry to say that if your father is not competent to sign a new POA, and the bank will not accept your current POA, you are out of luck. Your only option will be to seek a guardianship over your father. You should see an attorney immediately to review your options, which will likely be to file for guardianship. Unless of course, if your father rebounds, his signature can be taken, or, if he would unfortunately die, then the need for either would not be necessary.

 

I have a life estate but don’t know what it means

Q; I was left a to life estate in my mom’s will.  My sister is executor of mom’s will and is telling me she inherits mom’s home and her real property. I was left a life estate but don’t know exactly what that means. What are my rights in PA? With life estate can my sister sell the property with me having a life estate? Or, does she have to buy me out? She is complaining about my cats and meddling in my life.

A: I cannot provide exact advice without looking at the estate papers and the deeds. Normally, a life estate permits you to live in the home until you move or die. Normally, a life estate does not convey any ownership to the person who has the life estate. Generally, ownership passes to a remainder person once the person with the life estate dies or vacates the property. It is possible that the life estate just gives you the right to live there, but does not convey ownership to you. Again, these documents should be looked at. I would consult with an estate attorney in your area who can look at the documents.

Sister has a POA over parents and won’t give me information

Q: My sister is POA for my elderly parents. She is not sharing any information with me. I am on the wills, etc. What are my rights to receive information. I live her in Pittsburgh and they all live in Erie. Parents put her as POA, because she is the oldest and they thought/hoped we would all get along. This is not the case. My sister and I are estranged. She did not even tell me when my mother fell at the facility in Oct. Do I have any rights to view finances for my parents as I am not sure everything is good with their finances. I have asked repeatedly for information, even in the past when we were speaking, I sent a certified letter to her 3 weeks ago asking for financial information and to see if she sold their car and if she filed for the VA benefits they are entitled to. There has been no response.

A:  Just being an heir or one of the children does not give you rights to receive the information you want. In fact, your sister may have a duty to keep your parents’ information confidential. If you are concerned that she is abusing or financially exploiting your parents you could petition the court to have her file an accounting of all of the funds she is managing as Agent under the POA. You could also have yourself of someone else appointed as guardian. If you retain an attorney, he or she can advise you which one of these measures might work best. Just having the attorney involved, may cause your sister to give you the information you need and to be more cooperative. It could also make matters worse and result in more family drama. Communication is the key. I would keep trying to communicate with your sister and only use a lawyer and legal system as a last resort.

I need Elder Law advice on moving mom’s assets.

Q: I am moving all my mom’s assets into Irrevocable Trust for Medicaid nursing home care purposes. I’m aware of 5 yr look back period. NC Medicaid worker informed me my mom’s $1300/month is too much to qualify for in home help but, nursing home help would be possible. Mom is healthy now but, SHE wants to plan for the future and so do us kids. So protect as much of her assets as much as possible should we place all of the following (IRA, paid for House, Life Insurance Policy, a small Savings Account) into a Irrevocable Trust? We could set the trust up to distribute $700/month automatically to my mom every month making her monthly income $2000 and then, when/if need arises, apply for Medicaid to help cover the rest of the nursing home expenses.  Is this a workable plan? Thanks!

A: An irrevocable trust is one tool, among many that people use. If you are planning to move retirement plans into it, they need to be cashed out which often triggers income tax consequences which could make this move not advisable. To advise you thoroughly on this would require an in depth analysis of your mother’s entire situation including her complete assets, health, age, social security income, etc. I suggest that you meet with and Elder Law attorney to work on a blueprint as opposed to just doing this yourself.

Will transfer on death deed avoid Medicaid”?

Q: Will a Transfer on Death Deed protect my mother’s home from Medicaid reimbursement if it was filed over 5 years prior.

A: I am not familiar with what a “transfer on death deed” is. If it transfers title from A to B upon the death of A, then my opinion it would not preclude a Medicaid interest as it only transfers a future interest in the property which is completely revocable during life. Because of this the state will file a lien against the property. You should review the deed with an estate planning attorney versed in Medicaid law.

Should I liquidate her assets?

Q: I have a 96 year old Grandmother. I am last living relative. Recently removed from her home where she was living alone in bad conditions, 600 miles away from me. I now have established temp guardian and custodianship, permanent in 3 weeks, and getting her in nursing home. Her house is in a bad neighborhood and now that people know it is vacant, it will be robbed and badly vandalized by the time the court date arrives. House is in bad condition inside and city is about to condemn but I had 2 people come out and prepare cash offers. The house is full of my grandfather’s expensive tools, etc. I hate to see that all go to thieves or be taken by the city. Should I try to sell everything and give her the money? I don’t live here and paying $100 hotel every night, don’t have much time

A:  I have had many clients facing this situation. If you feel you will need to apply for Medicaid funding for her in the near future you want to be careful with how you liquidated her assets. While it is true that the transfer of assets without fair consideration in the five years prior to Medicaid eligibility can lead to a penalty, the operative wording is “fair” consideration (fair price). My suggestion is to follow the advice of an attorney versed on PA’s administration of the Medicaid program. Generally, you can liquidate personal and real property as long as you do it for a fair price and keep accurate records-and keep her money for her, and not gift it to others. If you sell the house, get a few offers in writing, take photos and place the proceeds in grandmother’s account, for her use. Document the deposit. If you can get someone to appraise it before selling, do it. If you apply for Medicaid some day you may need to demonstrate to them that the sales price was fair. You can deduct the expenses from her account, but keep records and receipts. No one expects you to pay for all of this out of your own pocket. Reimburse yourself from grandmother’s account, but again, document everything including your hotel room, gasoline, movers, locksmiths, etc. As far as right now, you should remove the valuables from the house and secure the house by whatever means necessary-light timer, an alarm system, or even boarding it if you have to. In the meantime, gather the bids, and sell it. As long as you can feel confident you sold it for as much as you could get, given the bad area and condition of the house, Medicaid will probably understand, as long as you can document it. Again, find a local lawyer to advise on this before you start for some guidance. An attorney can advise you on any available financial tools to shelter some of her assets from Medicaid consideration.

 

How do I help paralyzed senior in another state?

Q: His children are mistreating him. They have power of attorney. He lives with his daughter and her husband. They will not allow him to have company. After his nurse leaves, no one comes to check on him. He has a decent income. He just wants to live in assisted living, be around other people. They don’t take him out and he doesn’t eat with them. His grandchildren lives there and he hardly ever see them. He has no quality of life. His nurse is only company he has. He is in wheelchair, but it is just cruel the way they treat him.

A: This is a difficult situation. You could try to talk to the family if you haven’t done so. You could contact the local Department of Aging to see if they will do a wellness visit. Perhaps have him express his feelings of wanting to leave to the department of aging people in writing if he is not comfortable doing it in front of his present caretakers. Maybe, but doubtful, the local police department has an officer who deals strictly with domestic situations or with crime against the elderly. If such officer exists, you could see if he will visit your friend and talk with the family then talk to the friend in private. He could also sign a POA in favor of you if he agrees to do so and if you can somehow get it done with a lawyer going into the home. It seems that if this friend of yours really wants to leave, if he expresses his feelings, it can be done. The other option is to file for a guardianship over him which you really need to have legal advice before doing so. If you are not family, the court will favor family unless the family members are suitable.

Can I keep my parent’s house when they die?

Q: How do I keep my parent’s house if they die? My mother died over three years ago, and tonight I received word from the hospital that my father is not doing well. I know that the house currently has a mortgage on it, and that there is a little over nineteen thousand dollars left on the house. Unfortunately my father doesn’t have life insurance on himself, and the bank removed the GAP insurance he had through them. They did it after he said something about his health issues. I know that my parents would want me to keep the house, and I would like to know what I should do in order to keep it. Should I continue to make payments on the mortgage? If I do does it mean that I’m agreeing to paying all of their bills? I’m also asking because right now the house is my place of residence. I moved in to help with my father, and go to college, and now… To be perfectly honest I’m scared. Some help and information would be wonderful. Thank you.

A: You really need to talk to a lawyer. Ask around, some lawyer will talk to you for no fee or a modest consultation fee if you don’t have money. There are some issues here. If either of your parents received Medicaid, the house could be subject to a claim. However, there is an exception to their claim called “undue hardship” if you were living in the home as their caretaker for 2 years prior to their hospitalization. Don’t make statements to the hospital about your living arrangement until you talk to the attorney. Also, when your last parent dies, you personally do not inherit their debt. Their estate is responsible for their debt. You can keep paying the mortgage but do not sign any document from the bank in which you assume the mortgage. If you are the only heir of the parent, you can probably keep this house by if you can afford it. It will likely require opening an estate and paying inheritance tax. Again, explain all of the details to a probate or elder law attorney.

Joint tenant liability

Q: Who has to pay for a contract signed by the co-owner of a joint account after he dies? The co-owner of a joint account has signed a contract shortly before he dies. The invoice was received after his death. Does the invoice for such a contract have to be paid from the joint account by the surviving co-owner or from the (probate) estate of the deceased? The joint account was set up by the deceased so that his bills can be paid in case he becomes incapable.

A: I will answer this the way I understand it the question. Generally, the joint account should have nothing to do with the contract. Unless, there was some weird agreement in the contract that it was to be paid from the joint account. When a person dies, property held in their name only, become an asset of their estate. Debts and bills for services provided to them in their name only, are now debts of the estate. Jointly held property, is not part of an estate. If you are the joint account owner with the dead person, the account balance passes to you by operation of law upon his or her death. The joint account surviving tenant can liquidate the account and close it. He or she will need to pay inheritance tax on the deceased’s person’s half.