by Bill Miller | May 1, 2018 | Elder Law
Things happen fast during an emergency. It always helps to have a plan in place before the emergency hits, whether it’s a hurricane, wild fire, or medical event. Even in the field of estate planning, situations arise that must be dealt with completely, but swiftly.
When Terminal Illness Strikes.
Joe learned of his disease last week. He had felt bad for a while but didn’t realize it was cancer. He was even more shocked to learn that his days were extremely limited. Joe knew it was time to get his affairs in order.
If you or a loved one is facing terminal illness, there’s no time to find an attorney, then wait two weeks for an appointment. It may then take the attorney several weeks to draw up your papers and send them to you for review. You don’t have the luxury of exchanging revisions several times before actually signing the documents.
A Trip to the Emergency Room Leads to Emergency Estate Planning.
Nolan ended up in the emergency room after a severe fall at his home. As his family gathered to support him, they all learned that Nolan’s days of living alone were over. He needed either in-home or residential nursing care, possibly for the rest of his life. Nolan had never put together an estate plan and had never done any Medicaid planning. That was now up to his family.
Since Nolan needed to be moved from the hospital in a few days, they started looking for a facility. The costs of staying in a nursing home were stunning. Nolan had very little resources and could never pay the costs of full-time care. They looked for alternatives, but nothing worked and their time was running out.
They finally talked to someone in the local Medicaid office and began applying for emergency Medicaid benefits. The application process confused and dismayed them.
If you or a loved one may be facing the prospect of applying for Medicaid, talk to an attorney now. Working out arrangements for long-term care should be done as early as possible.
Be prepared.
A little planning on your part can prevent emergency estate planning situations. Doing so relieves your loved ones of a heavy burden if something happens to you.
At Miller Estate and Elder Law, our attorneys know how to handle your concerns. Contact us at 256-237-3339 to schedule an appointment. We help clients in Anniston, Talladega, Birmingham, Hoover, Trussville, Gadsden and surrounding communities.
by Bill Miller | Apr 27, 2018 | Estate Planning
You may be asking yourself, should I use a trust-based or will-based estate plan? Estate plans are often developed around one document. Of course, a “will-based” plan builds around a Will and requires probate at your death. And the “trust-based” plan is a plan based on a trust and avoids probate at your death. That doesn’t sound too difficult. However, as you prepare to work on your estate planning, it’s important to know and understand the differences between the two plans.
Wills vs. Trusts
A testator signs a Wills so that people know how to dispose of their property after they pass away. Wills often state who will serve as executor or personal representatives. Special gifts called bequests will be made. When a testator has children, the Will states who will care for the children if the testator passes away.
Trusts also involve disposing of property. When the trustor signs the trust document, he or she creates the trust and names the beneficiaries. Then, the trustor funds the trust by transferring assets to it. Sometimes people will use a living trust and a pour-over Will. Assets not transferred to the trust prior to the testator’s death are transferred by the pour-over Will. This is called a trust-based plan even though both a trust and a Will are used.
Which is Better – the Will or the Trust?
That depends on your goals and what concerns you the most:
- Would you and your family like a little privacy? Wills become public record upon being filed for probate. Any member of the public can view court records, read your Will, and know your personal business. Trusts, however, do not become part of public record. So, your neighbor can run to the courthouse to see a copy of your Will, but not your trust.
- Is it important to have a speedy, cost-effective distribution of estate assets? The property in a Will-based plan has to pass through probate before being distributed. However, most of the time trust-based plans transfer estate assets to beneficiaries more quickly. The assets don’t pass through the court system first.
- Is asset protection a consideration? Wills distribute assets, but do not protect them. Some Trusts can provide asset protection depending on the type of trust chosen.
- Do you want to pay costs up front or long-term? Trusts generally cost more to put together than Wills. However, trust assets typically avoid probate, as well as the associated court costs and legal fees that will be incurred when you pass away.
- Do you have concerns about your family fighting when you pass away? If so, a trust may be a better option. Since a Will requires probate, it is a court proceeding. A court proceeding means that all heirs are entitled to notice and can contest the terms of the will. A trust does not go through probate. Therefore, there is no court proceeding and it is less likely that your children/family will have anything to fight about.
Talk to Us About Your Estate Plans.
Facing incapacity is the first step. Take the next step by talking to a qualified Alabama Estate Planning attorney. The lawyers and staff at Miller Estate and Elder Law, help clients deal with both emergencies and advanced planning. Schedule an appointment by calling 256-251-2137. We help clients in Anniston, Talladega, Birmingham, Gadsden and surrounding communities.
by Bill Miller | Apr 24, 2018 | Estate Planning
Sometimes, we put things off too long. Marcie’s grandmother, Hazel, had talked about writing a Will for years. She even tried handwriting one herself because she refused to hire an attorney. Marcie knew she should encourage her grandmother to finalize her estate plans, but she just never got around to it. Then Marcie noticed Hazel was becoming more forgetful. By the time Hazel saw an attorney, it was too late.
Mental capacity is defined as
“sufficient understanding and memory to comprehend in a general way the situation in which one finds oneself and the nature, purpose, and consequence of any act or transaction into which one proposes to enter.”
Valid Estate Planning Issues.
For a Will to be valid in Alabama (and most other states), the person signing the Will (the testator) must be “of sound mind.” This may also be called “testamentary capacity.” The testator must understand:
- that he or she is making a Will,
- what property makes up their estate, and
- that they are disposing of their estate assets through the Will.
Marcie took her grandmother Hazel to an attorney to prepare her Will. The attorney will pay attention to whether Hazel understands the three things mentioned above. If she does not, Hazel will not be able to prepare and sign a valid Alabama Will.
Another estate planning document is the durable power of attorney. Similar to the Will, the person executing the durable power of attorney must be able to understand his or her actions. Oddly enough, one of the main reasons for signing the durable power of attorney is because it remains effective in the face of the principal’s incapacity.
In Marcie’s situation, her grandmother no longer could understand the documents she was being asked to sign. Because she had no estate planning documents, and was unable to continue caring for herself, Marcie filed a petition to become Hazel’s guardian. When Hazel dies, unfortunately her family will probably have to settle her estate through probate.
Don’t Wait to Prepare Your Estate Plan.
Estate planning documents deal with important issues in a person’s life. Understanding what a legal document does is critical. Don’t wait until you are incompetent or incapacitated to get your plan in place.
Schedule a free consultation with the attorneys at Miller Estate and Elder Law Our attorneys know how to help people like you. Just give us a call at 256-251-2137 or use our Contact Form to set up an appointment. Serving clients in the greater Anniston area, including Birmingham, Talladega, and Gadsden.
by Bill Miller | Apr 20, 2018 | Medicaid
Incapacity is tough. Medicaid eligibility rules are tougher. It seems like a never ending stream of rules and regulations. Even the jargon they use is hard to understand. For example, the Snapshot Date, Look Back Period, and Penalty Period all seem very important. But how do they relate to my Medicaid eligibility?
As many of you know, Medicaid is a program that pays certain types of health care costs for qualified individuals. Though federally-funded, the program is run by individual state agencies. Not everyone qualifies for Medicaid. The application process with its requirements and limitations can be confusing. Most people are especially confused by the Snapshot Date, the Look-Back Period, and the Penalty Period. We’ll summarize those in this blog to help you understand what they mean for you.
The Snapshot Date
Medicaid “takes a picture” (or snapshot) of a couple’s countable resources on the snapshot date. The amount of countable resources helps the caseworker determine how much the healthy spouse will be allowed to retain as the community spouse resource allowance.
What does Medicaid consider to be the snapshot date? Medicaid looks at 12:01 am on the first day of the month in which the applicant begins a period of 30 days of continuous institutional care, a nursing home for example.
The Look-Back Period
When Medicaid receives an application, they at the applicant’s financial history for the five years prior to the application date. This is the “look-back” period. During this time, the applicant’s financial transfers, including gifts, will be analyzed. The amount of the gifts and transfers may be combined to determine the applicant’s penalty period.
For example, perhaps an applicant gave his four children a total of $200,000 four years ago. Medicaid will review the transaction and decide whether the money should have been used to care for the applicant. If it’s determined the money should have been used for the applicant, the amount of the gift may make the applicant ineligible for Medicaid until $200,000 has been paid toward his care.
The Penalty Period
During the penalty period, the applicant is not eligible for Medicaid. This usually because of financial transactions and gifts within the look-back period. The length of the penalty period is determined by dividing the amount the applicant transferred by the amount Medicaid says is the average cost of a nursing home in the applicant’s state (Medicaid Divisor).
Still Have Questions About Medicaid Eligibility?
We’re not surprised. The Medicaid application process is exhausting. You need someone in your corner who understands how the system works. We are more than happy to go over any questions you may have about your medicaid snapshot date, lookback or penalty period.
Schedule a free consultation with the attorneys at Miller Estate and Elder Law Our attorneys know how to help people like you. Just give us a call at 256-251-2137 or use our Contact Form to set up an appointment. Serving clients in the greater Anniston area, including Birmingham, Talladega, and Gadsden.
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.
