Hooper Law Office,LLC Estate Planning Blog

Monday, June 30, 2014

I have Medicare: should I worry about nursing home costs?

Yes;  Medicare is a health insurance program for those people over the age of 65.  Medicare will not pay for custodial care in the nursing home, but it will pay for 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. 

Monday, June 23, 2014

If I go to a nursing home, how will I pay for it?

There are three basic choices.  First, pay for it yourself.  This is the least complicated way and the easiest to implement, but the most painful when you are paying out money to a nursing home that you would rather conserve for your spouse and family.  Many people cannot stomach the idea that what they worked so hard to accumulate all of their life is now going to the nursing home.

The second funding choice is to divest your assets and qualify for Medicaid.  This is often not easy to do and requires giving up some control.   It also takes away all care options except for the nursing home.  Finally, there is no guarantee, given the current government budget deficits, that this option will be available in the future.

The final and best option is to get a long term care insurance policy.  This takes all of the uncertainty out of paying for long term care and preserves options such as home health care and assisted living.  Long term care insurance is not inexpensive, but you should strongly consider it because it allows you to remain in control.  It also removes any uncertainty about how you will pay for your care.

Monday, June 16, 2014

How old do I have to be to start planning for long term care?

There are several steps in planning for long term care, and the first step should be taken right now.  The best approach is to have your care paid by insurance, and the sooner you investigate what is offered, the more options you will have and the less it will cost.  The biggest mistake most people make is to wait until they are too old or too ill to qualify.

If you determine that long term care insurance is not an option, you should look at planning to protect your assets in the event you go into a nursing home.  It is seldom advisable to implement this planning until you know with some degree of certainty that it will be necessary.  What is necessary is that you have your basic estate plan complete.  Your estate plan must provide all of the required tools so that if you are unable to manage your assets at the time nursing home planning becomes necessary, someone is appointed to do this planning.

Monday, June 9, 2014

Do the Medicaid rules ever change?

The only thing about Medicaid that you can count on is that the rules will change.  In fact, Wisconsin implemented dramatic and sweeping changes mandated by the federal government, effective January 1st of 2009.  Medicaid is a federal program that is further regulated at both the state and local level.  The rules are constantly in flux, which requires constant monitoring by your professional advisors, especially when there is a time lapse between when the plan is designed, and when you become qualified.  For this reason it is highly recommended that you review the plan at least once a year, and have a final review scheduled one or two months prior to the projected qualification date.

Please note:  Wisconsin Medicaid law are due to change on July 1, 2014.


Monday, June 2, 2014

Actions to Avoid (Without first consulting a financial advisor and estate planning attorney)

  • Don't withdraw funds or change any bank or brokerage accounts
  • Don't make any distributions (including distributions of jewelry, china, silver, furniture, etc.) to any beneficiaries of the Trust or Will
  • Don't try to use any Power of Attorney (POA).  Powers of Attorney become null and void at the instant of the Principal's death.  Any actions of the agent acting under such expired Power of Attorney are therefore void.
  • Don't cash or deposit checks.  Sometimes checks are made out incorrectly, or planning options are lost.  Cashing or depositing checks in these circumstances can ruin a chance to set things right

Monday, May 26, 2014

Immediate Actions Upon a Death

  • Look for specific funeral / burial instructions which the decedent may have left
  • Look for cemetery plot deeds, evidences of purchase of mausoleum niches, Cremation Society membership, prepaid funeral receipts, etc.
  • Order at least 15 Death Certificates from the funeral director or other entity (such as the Cremation Society)
  • Notify friends and relatives of the death and any funeral or memorial service
  • Contact the decedent's financial advisor for summary of assets
  • Locate estate plan such as a Will or Trust
  • Contact an estate planning attorney to discuss settlement options

Monday, May 19, 2014

This estate settlement stuff is really complicated. How do I find someone to help me?

Attorneys who specialize in estate planning and trust administration often joke that "there are no small mistakes, only huge ones."  Seemingly minor decisions can have immense repercussions.  Your attorney must understand the tax, probate, trust, IRA, and property laws, know the numerous election and filing deadlines, and have the practical experience to help guide your family through the process.  Because this is such a complex and varied area of law, we recommend that you hire an estate planning specialist- preferably one who teaches this subject matter to other financial professionals- rather than a general practitioner.  You shouldn't risk a loved one's life savings with an advisor who has to guess.

Monday, May 12, 2014

Are the IRA distribution rules different if the beneficiary is the surviving spouse?

When the beneficiary of the decedent's IRA is the surviving spouse there is one additional option available.  It is called a spousal rollover.  If the rollover is selected the IRA ceases to be the decedents and instead is titled in the  name of the spouse.  It is then the spouse's IRA and can be combined with their other IRAs.

In almost all cases the surviving spouse will want to do the rollover.  About the only circumstances under which the surviving spouse would not do the rollover is when they are under the age of 59 1/2 and believe they will need to take out distributions from the IRA.  There is no time limit for electing the spousal rollover so even if the spouse kept the IRA as a beneficiary IRA until they reached the age of 59 1/2, they can always do the rollover at a later date when they are no longer subject to the early withdrawal penalty.

Monday, May 5, 2014

My dad died in an assisted living facility. We filed for a VA pension to help cover the cost of his care but never received a response. Can his estate still be paid?

Maybe.  If your dad qualified for the pension at the time of application and your mother is still alive or the family was helping pay for his care you maybe able to substitute the claim and receive the accrued benefits.  Such a claim must be made within one year of dad's death.

Monday, April 28, 2014

My dad died in the nursing home. He was receiving both the Veteran's Aid and Attendance pension and Medicaid benefits at the time of his death. Is there anything special I should do?

You should inform any government benefit provider of his death.  There may be a delay in stopping payment from Aid and Attendance so quickly informing them will reduce the likelihood that you will need to return post-mortem payments.  Additionally, because he was on Medicaid at the time of his death, the state must be allowed an opportunity to place a claim to recover from the probate estate for the value of the services it provided.

Monday, April 21, 2014

My brother died and his Will divides his estate between my sister and me. I really don't need the money and would rather have it go to my children. How can I do this?

In this age of increased life expectancy it is not uncommon for someone to inherit at an age where they no longer can receive any significant benefit from an inheritance.  You have two options if you want your children to receive the inheritance.

Your first option is to accept the inheritance and then give it to your children.  Be aware that any gift of more than $13,000 to an individual in a single year requires filing a gift tax return.

The second option is a legal "no thank you" which is called a qualified disclaimer.  The effect of the disclaimer is that you are treated as predeceasing your brother.  Therefore, prior to disclaiming, you need to check with an experienced estate planning attorney to make sure the disclaimer has desired results.

With a gift you can have precise control over the amount and manner by which your children will receive the money.  With a disclaimer you have no such control and the inheritance will go to your children equally.  It is also worth noting that a disclaimer is not an all or nothing technique.  You can disclaim everything, a fraction of the inheritance, or specific assets.

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