by Bill Miller | Sep 21, 2021 | Medicaid, Medicaid Qualification
Medicaid is an excellent resource that helps cover the costs of long-term care for those who are eligible. However, applying for Medicaid and being eligible can be a difficult process. After you apply for Medicaid, there is a 60-month look-back period where your finances are reviewed. In order to apply for Medicaid, the applicant’s monthly income must not exceed $2,349 and cannot have more than $2000 in non-exempt assets.
What is the Medicaid Look Back period?
The Medicaid look-back period is 60 months prior to your Medicaid application date. The purpose of the look-back period is to keep people from qualifying for Medicaid unfairly and to ensure there were no assets transferred or given away in order to fall under the asset cap of eligibility. If transfers are made during the look-back period then it could trigger a penalty and you could be disqualified from receiving Medicaid for a certain period of time.
Income & Asset Caps for Married Couples
If you are married and your spouse is going into a long-term care facility, it is critical that you understand the income and asset restrictions for married couples. If your spouse is going into the nursing home, , all of their income must go towards their care. You can keep all of your income. You can also keep a maximum of one-half of the total assets up to $128,640.
The Bottom Line
Once you are under the income and asset limits, you can apply for Medicaid. Medicaid can be a confusing maze with many different twists and turns throughout the process. If you have questions about your Medicaid eligibility, we encourage you to contact Miller Estate & Elder Law at (256) 251-2137 or register for one of our free estate planning workshops.
[gravityform id=”3″ title=”true” description=”true”]
by Bill Miller | Sep 13, 2021 | Blog, Medicaid, Medicaid Planning, Medicaid Qualification
If you or a family member have ever needed long-term care, then you probably understand the importance of Medicaid, especially Medicaid asset protection. While neither Medicare nor health insurance will cover the cost of long-term care, Medicaid will. However, to qualify for this prodigious benefit, one must meet the income and asset restrictions.
Medicaid Asset Protection Trust Defined
A Medicaid asset protection trust is an irrevocable trust that is designed to hold assets so that they are no longer countable if you have to apply for Medicaid. This type of trust allows you to pass assets on to your children and grandchildren because they are not counted for Medicaid purposes and therefore do not have to be “spent down” to qualify for Medicaid. A Medicaid asset protection trust should be established at least 60 months before your application date, so it’s critical that you take advantage of Medicaid planning before the need arises.
Why You Need One
If you ever have to go into long-term nursing home care, the assets in the Medicaid asset protection trust are not considered by Medicaid as long as they’ve been held in the trust for at least 60 months. What this means is that even with your money and assets in this trust, no one can touch or move your assets.
For people who are trying to protect their assets from long-term care costs, a Medicaid asset protection trust is a great option. This is also a much safer option than giving away your assets to your children, because your assets are protected and not at risk to your children’s creditors – such as divorce, tax liens, lawsuits, bankruptcies, etc.
With the Medicaid asset protection trust, you get the benefits of having your children managing your assets without risking your assets to their creditors and predators. If protecting your assets is important to you then we highly recommend medicaid planning as part of your estate plan.
If you would like to explore the option of a Medicaid asset protection trust, then contact Miller Estate & Elder Law at (256) 251-2137 or register for one of our free estate planning workshops.
by Bill Miller | Sep 7, 2021 | Elder Law, Estate Planning, Uncategorized
A power of attorney is one of the most critical documents you can have. A recent study showed that only 33% of Americans over the age of 55 have a durable power of attorney in place. Tragedy or illness can strike at any moment. Obtaining a power of attorney—or POA as it is often called—is a proactive way to save you and your family a lot of stress and heartache in the event that you become incapacitated, or otherwise unable to make decisions for yourself.
A POA allows you to designate an individual—or several individuals—who could take control of your assets, conduct legal transactions, and make decisions on your behalf if you were unable to do so. However, without this document in place, things can quickly become complicated in the event that you become incapacitated.
Your Family May Have To Apply for Guardianship of Your Children
Without a proper POA in place, your family (yes, even your spouse) may have to apply for guardianship with the courts in order to make decisions on your behalf. This can be a costly process, and could take several months to complete. However, time is often of the essence in situations where a parent becomes incapacitated. You can avoid a problematic situation by having the proper documents in place.
You Could End Up With Major Financial Problems
Having the proper POA in place would allow you to designate an individual to step in and handle your bills—such as your mortgage, insurance, etc.—on your behalf. Without a POA in place, bills could potentially go unpaid, which could result in bad credit, lapse of insurance coverage (which is needed more than ever during these times), foreclosure, and even being forced into bankruptcy.
You Could Be Denied Medicaid
If you are being sent to a nursing home in need of long-term care, it is imperative that you have Medicaid in place to help pay for care. Nursing home care in Alabama costs, on average, $266/day. If you are incapacitated and unable to make medical decisions for yourself—and have not already applied and been accepted to receive Medicaid—it is vital that you have a POA in place. The Medicaid application requires copious amounts of documentation and records. A POA will grant a trusted individual with the permission they need to access these documents and records. If no one is able to access these important documents and records, your application to Medicaid may be denied..
Your Loved Ones Could Be Unable to Access Your Medical Records
In order for your designated POA to gain access to your medical records, you will need the POA to include an authorized Health Insurance Portability and Accountability Act (HIPAA) form. With a HIPAA authorization on file, your named POA will be able to obtain all of your medical records, as well as oversee your treatment and care. This can be critical when needing to transfer medical records to new providers or specialists. However, without this form, not only would the designated POA be unable to receive your medical records, but some doctors will refuse to release sensitive medical information, even with a POA in place!
You May Not Be Able to Transfer Assets
There are several circumstances where an estate planning attorney may recommend transferring assets out of an incapacitated person’s name. For example, if you are incapacitated and in the nursing home for an extended period of time, and your designated POA is applying for Medicaid on your behalf. If you have a POA in place, he or she can transfer assets as recommended by your estate planning attorney in order to prepare your estate for the Medicaid application. However, without this POA in place, no one would be able to transfer assets, and—therefore—your Medicaid application could be denied.
While many of the situations that require a power of attorney are less than ideal and can be stressful in and of themselves, having a plan in place before it’s needed can make the process much easier on your family and friends.
If you have questions about a Power of Attorney or want to include one in your estate plan, then contact Miller Estate & Elder Law at (256) 251-2137 or register for one of our free estate planning workshops.
by Bill Miller | Aug 7, 2021 | Estate Planning
With each year —and each new administration—come new tax plans and new proposals. However, this year, President Biden is proposing a major tax change in terms of a “death tax,” that could greatly affect your estate plan.
Proposed Changes
President Biden’s proposed tax plan could eliminate the loophole that currently allows Americans to escape taxation on their wealth by setting it up as an inheritance for their heirs. The proposed tax plan would also increase capital gains from 23.8%—at least for most estates—to 40.8%, which is higher than the current maximum estate tax of 40%.
In addition to these inheritance tax increases, Biden’s tax plan aims to eliminate the carry-over-basis. Currently, heirs do not have to pay capital gains if they sell inherited property (for example, a house, a stock portfolio, etc.) for its appraised value. If they sell it for more than the appraised value—for example, they sell a home for $300,000 when its appraised value is $250,000—there would be long-term capital gains tax on the $50,000 overage. However, with Biden’s proposed changes, the heirs would be taxed on all capital gains since the original time of purchase. So if the inherited house was originally purchased for $50,000, the heirs would be taxed capital gains on the $200,000 at 40.8%, thus making death a taxable event.
The Takeaway
While Biden’s proposed “death tax” could be costly to your estate plan, it has not been passed yet by Congress, and only remains a proposal. If this new tax plan is passed, we would recommend speaking with your financial advisor and your estate planning attorney sooner rather than later. Speaking with your estate planning attorney as soon as possible can help your estate planning team implement strategies to save your beneficiaries money in the long run.
If you have questions about the proposed “death tax” and what this could mean for your estate plan, then contact Miller Estate & Elder Law at (256) 472-1900 or register for one of our free estate planning workshops.
Contact Miller Estate & Elder Law
by Bill Miller | Aug 3, 2021 | Estate Planning
If you were to pass away without an estate plan, your assets would go through probate court. Probate is required when someone passes away with assets in their name; it is the process of getting those assets transferred to the deceased’s heirs or beneficiaries. Probate can be expensive, time-consuming, and emotional. If you have a will, the probate process is a lot easier, but there are still court costs and hearings involved. So, how can you avoid probate in Alabama?
Own Assets Jointly with Someone Else
Many house deeds and joint bank accounts have a right of survivorship. The right of survivorship basically says that when one owner passes away, the remaining assets are transferred to the surviving owner. This right of survivorship is not automatic. The co-owners would need to request that it be put in place.
Beneficiary Designation
Beneficiary designations are typically used in life insurance, IRAs, and 401Ks. You would name a person as the beneficiary on the account. When you pass away, the beneficiary would just need to send in a death certificate to the company, and the proceeds would be paid directly to the beneficiary, thus avoiding the probate process.
However, it is important to remember that assets with beneficiary designations are not governed by the will. So, for example, if you want all of your assets (including those with beneficiary designations) split between numerous people, then you would need to name numerous beneficiaries on those assets and not rely on the will.
Create a Trust
If assets are owned by a trust, and the trust says which beneficiary will receive which of the trust’s assets upon your death, then these assets will not pass through probate. There are many options when it comes to setting up trusts. It is recommended that you speak with an experienced estate attorney about your needs and goals to learn more about the options that are available to you.
If you are interested in learning more about how you can protect your estate and assets, please join Miller Law for a FREE Estate Planning & Asset Protection Workshop on August 12, 2021 at 10am at the Oxford Civic Center. Space is limited, so please register now!
Register for a Free Estate Planning Workshop
