Hooper Law Office Estate Planning Blog
Wednesday, October 02, 2013
What are the options for distributing an IRA?
IRAs are the most difficult asset type when it comes to probate and trust settlement. Therefore, if you don't hire an experienced estate planning attorney to help with the other aspects of the settlement, please get help with the IRA. The rules are complex and the mistakes tend to have huge consequences.
Basically, upon the death of the IRA owner it goes to the individuals and entities specified in the beneficiary designation. If a trust is named there are additional complications. Trusts are frequently used as beneficiaries as IRAs to provide asset protection. Trust rules are complicated and there is a wide misunderstanding of rules in the financial industry.
During a probate or trust settlement, if the decedent was older than 70 1/2, it must be determined if he or she took out their required minimum distribution for the year of death. If they didn't, then the required minimum distribution must be taken out in the name of the estate prior to distributing the IRA to beneficiaries.
When a beneficiary inherits an IRA they cannot combine it with their own IRAs and special distribution rules apply. When Bill Sample dies and his IRA is inherited by his son, Junior, the IRA remains in Bill's name with Junior indicated as the beneficiary. This is called a "beneficiary IRA" and Junior must start taking out a required minimum distribution that is based upon his age at the time the beneficiary IRA was created. Unlike a regular IRA there is no early withdrawal penalty if the beneficiary is under the age of 59 1/2. If Junior does not start taking out the minimum distributions beginning with the year following the year of Bill Sample's death, then he must take out the entire IRA within 5 years.
Sunday, August 04, 2013
Did the Veteran need to serve in combat to qualify?
No, the only requirement is that the veteran served at least one day during time of war, as part of a minimum 90 day deployment that was for other than training purposes. The critical dates are:
World War II- 12/7/1941 to 12/31/1946
Korean conflict- 6/27/1950 to 12/31/1955
Vietnam War- 8/5/1964 to 5/7/1975
Saturday, August 03, 2013
What are the types of VA pension benefits?
If the veteran, or the surviving spouse of a veteran, qualifies they can receive either a basic pension, a higher pension for being homebound, or a pension called Aid and Attendance if they are in need of medical assistance. The Aid and Attendance benefit is especially helpful because, unlike Medicaid, it will help defray long term care costs if the recipient is either receiving care at home or is in assisted living.
Friday, August 02, 2013
My child lives with me, what happens if I go to a nursing home?
It is a fairly common situation for a child to live in your house and provide assistance that allows you to remain at home. It would be sad indeed if after this sacrifice your child was thrown out of the house after you went into the nursing home. Fortunately, this is unlikely to happen. As long as a child lives in your house for at least two years prior to your admission to a nursing home, and they helped you stay in your home, then they will be able to remain in the house. Under these circumstances, the home can be transferred to the child without incurring a divestment penalty.
Thursday, August 01, 2013
I have Medicare; should I worry about nursing home costs?
Yes; Medicare is a health insurance program for those people over the age 65. Medicare will not pay for custodial care in the nursing home, but it will pay rehabilitative care in a nursing home setting. To qualify for Medicare coverage, a patient's nursing home stay must have been preceded by a three night, or longer, hospital stay. Typically, Medicare will pay for the first 20 days in the nursing home for those patients receiving physical therapy or other rehabilitative treatment. Medicare will then pay a portion of the next 80 days in a nursing home. After 100 days, Medicare will, in virtually all cases, cease payment. Medicare also have the ability to terminate coverage before the end of the 100-day period if the patient is not making progress towards rehabilitation and recovery.
Wednesday, July 31, 2013
How much does a nursing home cost?
The cost of nursing home care varies greatly between geographic regions and depends on the type of care required. For example, the costs associated with Alzheimer patients, are likely to be much higher than the costs incurred by a patient with circulatory problems. At the time this is written in 2013, the average cost is generally between $7,000 and $9,000 per month. Like all health care, the costs are climbing fast. The average cost over the past 14 years has increased at a compounded rate of 5% per year. If this rate of increase sustains, nursing home prices will double every 14 years.
Thursday, June 06, 2013
I am single. What is the limit of assets I can own and still qualify for Medicaid.
As a single person you must "spend down" your assets to a very low level before you are qualified to receieve Medicaid assistance. The amount you are allowed to keep is roughly $2,000. Not included in this limit are certain exempt assets such as a modestly priced car, a small amount of life insurance, personal property and funds designated for your burial.
Your personal residence will not be counted in the asset limit if you have expressed the intent to return to your home. The government may place a lien on your home that will be paid when the house is sold. There are ways to either defeat this lien or to minimize it, but this requires a thorough knowledge of the rules. This is an area where you will definitely need expert legal advice from an attorney who concentrates in long term care planning.
Tuesday, June 04, 2013
I'm on a fixed income; how will I make ends meet if my spouse goes to the nursing home?
It is not the government's intent to impoverish the spouse who remains at home. In general, the "community spouse" gets to keep all of their income. In addition, if the community spouse has a low level of income they will get some or all of the "nursing home" spouse's income up to about $2,500 per month. As an example, assume the husband is in the nursing home and the wife's (community spouse) only income is $600 os socail security. She would be eligible to take $1,900 of the husband's income.
Thursday, May 30, 2013
Do I get to choose my nursing home?
Your options for choosing a nursing home are best if you enter as a "private pay". This means you are initially paying with your own assets or with long term care insurance. If you enter the nursing home on Medicaid you may have limited optioins. Most nursing homes will have a limited number of "Medicaid beds". If there are no Medicaid beds available locally you might wind up in a nursing home not in your community, and difficult for loved ones to get to. Obtaining accessible care is one of the reasons people get long term care insurance, even is the policy benefit is for a limited perios of time.
Tuesday, May 28, 2013
I have health problems; will i qualify for long term care insurance?
A common mistake that people make is assuming that, because they have a medical condition, they cannot get long term care insurance. While it is true that some medical conditions will disqualify you for coverage, you cannot know for sure without working with a qualified long term care insurance professional.
Thursday, May 23, 2013
What are the chances I'll need long term care?
Studies have determined that up to 6 out of 10 people over the age of 65 will need some form of long term care. The fact that most people will need some form of care during their life time illustrates the need to start planning far in advance.
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With three offices in Wisconsin, the Wisconsin law firm of Hooper Law Office assists clients with Wisconsin estate planning, asset protection, trusts, wills, estates, probate administration, trust settlement, probates, medical assistance planning, Medicaid planning and eligibility, nursing home planning, long-term care planning, elder law, business exit planning, business succession planning, special needs planning, retirement planning, charitable giving, family limited partnerships and wealth transfer planning. With over fifteen years of experience practicing law, Hooper Law Office is an experienced estate planning law firm with attorney Foss Hooper. They are trust attorneys, probate attorneys, asset protection attorneys, Medicaid attorneys, elder law attorneys serving Outagamie County, Brown County, Cities served include include: Appleton, Green Bay, Clintonville, Oshkosh, Fond du Lac, Shiocton, New London, Freedom, Sherwood, Seymour, De Pere, Kaukauna, Kimberly, Shawano, Pulaski, Oconto, Fremont, Stevens Point, Wautoma, Winneconne, Omro, Berlin, Ripon, Green Lake, Waupun, Beaver Dam, Lomira, Mayville, West Bend, Oostburg, Sheboygan, Plymouth, Manitowoc, Two Rivers, Kewaunee, Algoma, and Sturgeon Bay.