by Bill Miller | Apr 17, 2018 | Special Needs
Jackson W. worried about his daughter, Olivia. As someone with a severe intellectual disability, she needed help with all daily activities and would never be self-sufficient. Her care was expensive and life-long. As he pondered ways to provide for Olivia’s care, he wondered if a special needs trust would be helpful.
The Dilemma
Children with disabilities like Olivia often need long-term, expensive care. Parents of special needs children want to provide enough money for that care, just like Jackson.
However, sometimes giving them money actually prevents the child from receiving much-needed public benefits. And leaving the money to other children or another “trusted” adult who promises to care for the child is probably not legally binding. There is no guarantee that someone will properly care for the child when you are gone.
A Trust with a Specific Purpose
People typically establish special needs trusts for two general reasons:
- To hold and maintain funds for a disabled person; and
- To ensure those funds don’t damage the disabled person’s eligibility for public benefits.
A disabled individual may need this type of trust for long-term care planning or to deal with a large influx of money from inheritance or a civil judgment.
The Two Main Types of Special Needs Trusts:
- First-Party Special Needs Trust. Also known as a Self Settled Supplemental Needs Trust or (d)(4)(A) trust. This trust is used when the disabled individual owns assets, but expects to need Medicaid or other public benefits down the road. The disabled person uses rust assets to pay for expenses not covered by SSI or other sources. A first-party trust is different from other trusts in that:
- Historically, a parent, grandparent, guardian, or court had to set up the trust. As of 2016, the individual may do so as well.
- The trust must be irrevocable.
- The trust must be funded by the beneficiary’s assets.
- The beneficiary must be age 65 or younger at the time the trust is created.
- The trust must reimburse the state Medicaid agency upon the beneficiary’s death.
- Third-Party Special Needs Trust. What sets this trust apart is that third-parties establish and fund the trust. Many times, a donor will set up this trust as part of an estate plan. For example, Jackson may establish the trust for Olivia when he does his estate planning, or he may have the trust created by his Will upon his death. The person making the trust may have to consider the following:
- There is no age requirement or limitation.
- The trust fund is not limited in size or value.
- Trust funds can be used for almost anything.
- Assets remaining in the trust at the beneficiary’s death may pass to other beneficiaries.
- The trust assets never belong to the beneficiary, so Medicaid does not have to be reimbursed.
Benefits of Using a Special Needs Trust
When Jackson considered the merits of different special needs trusts, he chose to establish and fund a third-party trust to cover Olivia’s needs. Olivia has no assets of her own to contribute to a trust. The beneficiary cannot fund a third-party special needs trust anyway. Thankfully, Jackson can contribute as much money as he wants to the fund. The trust he sets up will not interfere with Olivia’s future need to apply for public benefits under current law. As a result, Jackson feels a great sense of relief the day he fully funds the trust.
Some Trusts Require a Little More TLC.
The attorneys at Miller Estate and Elder Law assist clients with special needs planning, as well as long-term care and Medicaid applications. For more information get a copy of our Legal Planning Guide for Children and Young Adults with Special Needs.
For a free consultation with an experienced Alabama attorney, contact us at 256-251-2137 or use our convenient Contact Form. We have offices in Anniston and Birmingham and serve clients in Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.
by Bill Miller | Apr 13, 2018 | Estate Planning
Anthony sighed with relief. He felt a great peace of mind the day he finally signed his estate planning documents. His Will showed how his property should be distributed in an orderly and organized fashion. The durable power of attorney he signed meant that someone would stand up for him if he was no longer after to handle his medical or financial affairs. He had even signed a Living Will telling everyone to keep the doctors from artificially prolonging his life. Then he started to wonder about his children: Anthony, Jr.; Talia, Lorraine, and Chad. They’re all adults, but Anthony wondered if they needed his help with their estate planning.
We’ve talked before in this blog about talking to your family about estate planning. But that discussion was about your estate plans. It’s time for a new discussion.
Now, it’s time to talk to your family about their estate plans.
But, how? Death and incapacity are touchy subjects.
Tell Them About Your Experience
Maybe you have always wanted to take care of your legal matters but kept putting it off. Then, one day, you took a big step and called an attorney to talk about making a Will. Your attorney explained how necessary estate planning is and helped you come up with a plan that meets your needs. Better yet, you now know how much the estate plan will help your loved ones adapt after you’re no longer there to help them. Finish off by telling them what a great sense of relief and peace of mind you have now.
Tell Them What You’ve Learned About Estate Planning
Especially tell them what happens when you don’t have any plans in place.
- Probate without a Will is more difficult and expensive.
- Precious time is lost trying to settle an estate without an instruction book (your estate plan).
- Your family may pay more taxes than necessary because you didn’t plan.
- Your family may receive less of your estate than you intended because of attorney’s fees and court costs.
- Medical providers will need someone to make medical decisions, but who?
Lay Out the Arguments for Estate Planning
If they have kids, start there. Your children need to understand what happens when a good Will is not in place.
Most estate plans include a durable power of attorney to address incapacity issues. Not signing one makes a serious situation so much more stressful.
Do you really want your family to struggle making end-of-life decisions for you because you didn’t leave a Living Will? Or worse, do you want a court to do so?
Estate planning is your voice, after you can no longer communicate. It’s a way of showing extreme love for your family, both now and later.
And you don’t have to be old or wealthy to have an estate plan. Everyone needs one!
Set a Good Example
There are many reasons to put together an estate plan. Here’s another one: You’ll be setting a good example for your children, no matter how old they are.
Help Your Kids Help Themselves
We are assuming that you have already done your estate planning. If you haven’t, this is the time.
Schedule a consultation with one of our attorneys. They have the experience and skills to listen to your concerns and put together a complete estate plan. Our phone number is 256-251-2137, or you may want to use the Contact Form on our website. We have office in in Anniston and Birmingham and assist clients in communities like Hoover, Vestavia Hills, Irondale, Gadsden, Pell City, Leeds, Trussville and Calera.
by Bill Miller | Apr 10, 2018 | Medicaid
Nursing homes are expensive, even if Medicaid benefits are available. It’s especially difficult when a married couple is split up. The emotional toll is great, but there’s also the problem of providing for expensive residential care for one person while maintaining quality of life for the other. Medicaid offers a way that may prevent the spouse from becoming impoverished.
What is a Community Spouse Resource Allowance?
This is an allowance of resources for the husband or wife of a Medicaid recipient (the community spouse). Resources includes money and other assets. The allowance means the community spouse gets to keep a certain amount of resources instead of spending them down to qualify.
Though based on the value of the couple’s resources at the time of admission, the community spouse resource allowance is usually applied after admission. The community spouse resource allowance in Alabama is equal to ½ of the total non-exempt assets with a maximum of $123,600. So, if a couple has $500,000 in non-exempt assets, they will have to spend those assets down until there are is only $123,600 left for the community spouse!
According to Medicaid rules, the community spouse is the spouse who is not entering a nursing facility. The community spouse is allowed to retain the following exempt assets:
- The family home if the community spouse is still living there,
- Furnishings and other personal belongings,
- One automobile,
- Pre-paid burial plans,
- Life insurance policies, as long as the face value is below the allowed limit.
- The community spouse’s retirements accounts, and
- The Community Spouse Resource Allowance that is ½ of the total assets up to $123,600. Of non-exempt countable resources.
What does “spending down” have to do with my Community Spouse Resource Allowance?
Sometimes the value of an applicant’s income and resources exceeds Medicaid’s limits.
Medicaid will first add together the couple’s countable resources. Then the amount the community spouse is allowed to keep, generally 50% of the assets up to $123,600, is subtracted from the total, along with a small sum for use by the Medicaid applicant ($2,000). Sometimes the remaining amount is more than Medicaid’s limit. In this situation, the applicant will have to spend down their resources to get down to the level where they are eligible for Medicaid benefits.
Have questions or concerns about Medicaid?
Talk to people who know the Medicaid system. We have worked with many families just like yours to help them navigate the Medicaid maze and saved them thousands of dollars. The attorneys at Miller Estate and Elder Law can help you with eligibility planning, applications, and asset protection. For a free consultation, contact us at 256-251-2137 or use our convenient Contact Form. We have offices in Anniston and Birmingham and we assist clients in the Gadsden, Leeds, Hoover, Talladega, Vestavia Hills, and surrounding areas.
by Bill Miller | Apr 7, 2018 | Caregivers
Leaving your loved one’s care in the hands of a stranger is frightening. Even if you do background checks, hire from reputable agencies, or find a nursing home with good reviews, you may still be concerned. When you are looking for a caregiver, or evaluating a current one, it’s helpful to know exactly what qualities to look for.
Qualities to Look for in a Caregiver Related to Temperament:
Some traits of a good caregiver relate to their disposition. Specifically:
- Empathy and Concern. Does your caregiver listen to what your loved one says? More importantly, do they care what their patient wants and needs? A good caregiver feels what the patient feels, but puts that aside to get the job done.
- Patience. Taking care of another person is hard. A good caregiver needs to have an abundance of patience.
- Trustworthy and Dependable. Your loved one needs someone who can be depended on to be there when needed. If you are hiring someone to care for your loved one at home, trustworthiness is important.
- Tough, Yet Flexible. Caregivers must be tough enough to get the job done, but flexible enough to roll with the inevitable changes. Medication and schedule changes should not derail your caregiver.
Qualities to Look for in a Caregiver Related to Behavior:
Some qualities are easier to determine than others:
- Communicates Well. When you interview a potential assistant, are they able to speak clearly and logically? A caregiver must be able to communicate freely and completely with medical care providers, patients, and family members.
- Attentive to Details. A nursing assistant needs to follow directions for care and especially for medications. Someone in a caregiver position who is unable to follow directions may need to be replaced in the best interests of your loved one’s safety.
- Strength. Patients often need help moving about and taking care of their daily activities. Caregivers must be physically strong enough to help the patients. Emotional strength is important when called upon to handle the stresses of caring for an elderly or seriously ill person.
Find an advocate for your loved one.
Finding the best care for your loved one may take time, but it’s certainly time well spent. Once you find a good caregiver, don’t forget to show appreciation.
Do you or a loved one need to speak with someone about planning for long-term care? Schedule an appointment with one of the qualified elder law attorneys at Miller Estate and Elder Law Our phone number 256-251-2137. Or you may choose to use our Contact Form to get started on your path to peace of mind.
by Bill Miller | Apr 7, 2018 | Medicaid Planning
Michael’s mother, Lucille, fell at home and wasn’t found for several days. He consulted with doctors about his mother’s care and was told she needed 24/7 nursing care. As he started researching nursing homes, Michael learned that the typical cost of a nursing home in Alabama is $6,000 or more per month. Worried that Lucille didn’t have the money to pay for a nursing home, and knowing that he didn’t have the means either, he started looking for other options to pay for her care. Michael decided it was time to start Medicaid planning immediately. What he learned puzzled and concerned him. Michael wished he had asked himself the question, “Should I wait until I need nursing care?” a lot sooner.
Medicaid Eligibility
Medicaid is a federally-funded program to help people with certain medical costs. The program is actually administered by state agencies like Alabama Medicaid.
But not just anyone can get Medicaid.
People have to apply and submit lots of supporting documentation. A caseworker reviews the application and documents, then determines whether the applicant is truly eligible for Medicaid benefits. Many people are not.
Medicaid looks at income and resources for more than a few months or even a year. In fact, Medicaid employs a long “look-back period.”
What is the “Look-Back Period.”
This is a five-year period prior to the application date. All financial transactions made during the look-back period are reviewed, no matter how big or small. Certain situations may cause problems for applicants, including:
- Asset transfers for less than fair market value. Example: Lucille transfers ownership of her house to Michael or sells it to him for less than it’s worth.
- Gifts, including charitable gifts. Example: Lucille suddenly gives her grandchildren up to $15,000 each. She also gives her church, the local SPCA, and the town historical society large donations.
- Random Payments to Caregivers. Example: Lucille paid someone to help her without having a written agreement about the services provided.
- Loans to Family Members. Example: Michael and Lucille decide to “lend” several family members large amounts of money without having formal loan agreements.
Some transfers typically will not cause any problems with a Medicaid application if made to:
- The applicant’s spouse. Example: Lucille is widowed. If she were married, however, she might be able to transfer some of her assets to her spouse or her spouse’s caregivers.
- A child with special needs. Example: Lucille’s daughter, Roberta, has cerebral palsy. Lucille may be able to transfer money to Roberta, her caregivers, an ABLE account, or a special needs trust set up for Robert’s care.
Transactions occurring during the look-back period may trigger a penalty period. The amount of the transactions may be deducted from Medicaid benefits.
Medicaid Eligibility is Complicated.
The first question of this blog was: “Should I Wait Until I Need Nursing Care?”
And the answer is, “No.” Whenever possible, Medicaid planning should begin well before you start the Medicaid application.
Does this mean your situation is hopeless if you waited too long? No, an experienced elder law attorney may be able to help you minimize the damage and become eligible as soon as possible.
We Can Help with Medicaid Eligibility Concerns.
The attorneys at Miller Estate and Elder Law know how to assist you with your Medicaid application and eligibility planning. We have helped many families just like yours save thousands of dollars and get qualified for Medicaid. For a free consultation, contact us at 256-251-2137 or use our convenient Contact Form. Although we’re located in Anniston, we also help clients in the Birmingham, Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.
