| We hope that this newsletter finds you enjoying the last few weeks of summer. Since it has been awhile since our last newsletter, we will update you on some office news. Janis Davis has joined Ward Legal Group as a receptionist and legal assistant. If you call our office or come in for an appointment, Janis will likely be the one who greets you. Our lawyers, David Ward, Nathan Chaffee, and Sarah Frankel, remain dedicated to estate planning, estate settlement, and elder law issues, such as Medicaid. If you have questions about these topics or would like to schedule a review of your estate plan, please call our office to set up an appointment. In this newsletter, we discuss two topics that come up frequently with our clients - "Funding" an estate plan and Medicaid.
What happens if I don’t fund my revocable living trust? When we refer to “funding” here at Ward Legal Group, we are usually referring to how assets are titled or owned and how beneficiary designations are set up. “Funding” does not just apply to trusts, but also applies to will-based plans as well. What makes funding different with trusts is that if you have a revocable living trust, it can own things in the name of the trust, whereas an asset cannot be titled in the name of a Will. For instance, a revocable living trust can own a bank account, so instead of my name being the owner of the account, the name of my trust could be the owner. Now, back to our original question…If your trust does not get “funded,” i.e., bank accounts do not make it into the name of your trust or real estate is never deeded into the name of your trust, then we need to look at how those assets are titled upon your death to determine what will happen to them. For instance, if you owned real estate with someone else as joint tenants with rights of survivorship, then upon your death your real estate will be owned by the surviving joint tenant and will not necessarily pass according to the terms of your trust. It is important to look at how your assets are titled and how your beneficiary designations are set up, whether you have a trust or a will, and understand how they will be distributed when you pass away. As part of our review meeting process at Ward Legal Group, we discuss and review with you the status of your assets and how we would recommend titling them or naming beneficiaries.If you would like to schedule a review meeting with us, please contact us.
A Brief Look at Medicaid for Nursing Home Care We hear concern from our clients and workshop participants about being able to pay for a nursing home if they and/or their spouses should need that level of care. We will discuss below some basic concepts based on some of the questions that we most frequently hear. Why would I need Medicaid when I have Medicare? Medicare is most commonly known as the federal health insurance program for those 65 and older. Medicare generally doesn’t cover long-term care stays in a nursing home.[i] In this context, Medicaid is a government assistance program that pays for nursing home care for those who have no other means to pay. What is the “look-back?” When someone files an application for Medicaid, the State will review the immediately preceding five years of that person’s asset information, such as bank statements, cancelled checks, life insurance statements, etc. This review is for the purpose of determining if the potential Medicaid recipient made any gifts or transfers for less than fair market value. If it is determined that disqualifying gifts have been made, then the potential Medicaid recipient could be disqualified from receiving Medicaid benefits for a certain period of time. Can’t I just give my stuff to my kids now before I need a nursing home? There are a few issues with doing that. We like to see our clients maintaining autonomy for as long as possible; meaning that they remain in control of their finances and property. When someone gives things away or changes the ownership of accounts or property, s/he is no longer in full control of that property. The transferred property could now be subject to the new owners’ creditors and the new owners’ decisions as to how to manage the property or asset. Another issue that comes up in the Medicaid context with regard to giving away property is the look-back discussed above. If you decide to give away property within the 5 years of applying for Medicaid, those gifts could disqualify you from receiving Medicaid for a certain period of time, depending on the value of what was given away. Medicaid rules can be complex and can change. Seek legal help for your particular situation regarding Medicaid.
[i] https://www.medicare.gov/what-medicare-covers/part-a/paying-for-nursing-home-care.html
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