by Bill Miller | Jun 7, 2021 | Blog, Estate Planning
Less than 50 percent of U.S. adults have any kind of estate plan in place, and this is in large part due to a general misunderstanding of what an estate plan does. Estate planning is not— despite popular misconception—a task you attend to in old age or ill health. On the contrary, it is a set of documents that protect you and your loved ones for the duration of your adult life. Most people think about the Last Will and Testament when they think about estate planning. While that document plays an important role, so too do power of attorney (POA) documents, and because these are less well-known, this article will center on explaining exactly what they are.
The Two Types of Power of Attorney
POA refers to the legal authority one person (the principal) grants another (the agent) to act on their behalf. In general, this authority pertains to either financial or medical matters, and separate legal documents exist for each purpose. A medical POA acts to ensure you receive proper care should you suffer incapacitating injury or become incompetent, while a financial POA serves a range of purposes all of which relate to your financial well-being. Both types of POA are discussed in detail below.
Medical Power of Attorney
As just mentioned, a medical POA—sometimes referred to as a healthcare proxy—acts as an important protection against incapacitating injury or incompetency. In addition, it plays a crucial role should complications arise during surgery, or if you need regular help due to a long-term condition. The authority granted by a medical POA is usually broad, though you can provide as specific of care instructions as you wish when drafting the document. These are usually paired with a Living Will and the two documents together are known as an Advance Directive for Healthcare.
When you sign a medical POA you designate an agent to act on your behalf. Any competent adult may serve in this role, though some states exclude your physician, residential healthcare provider, or any of either’s employees from being eligible. When choosing an agent, it is important that you consider a person whom you both trust and believe is capable of making difficult choices and advocating strongly on your behalf.
Financial Power of Attorney
Just like the above, a financial POA allows you to appoint an agent to handle your affairs in your stead, though in this instance the authority granted pertains to financial rather than medical matters. A financial POA can be limited or general and, further, its powers can be designed to terminate or remain in force should you suffer an incapacitating accident or become incompetent.
1. Limited Power of Attorney
This type of POA is used when, for instance, you are out of town and need someone to sign a real estate purchase or perform some other type of transaction on your behalf. When drafting a limited POA it is critical that its purpose be clear. Once this purpose is complete, the authority granted by the POA ends.
2. General Power of Attorney
A general POA grants broad powers. Your designated agent gains the authority to perform virtually any financial transaction on your behalf, including conducting business deals, buying life insurance, settling claims, paying bills, and so on. A general POA is used if you will be out of the country for an extended period or are physically or mentally incapable of managing your affairs. Should you suffer incapacitating injury, the authority granted by a general POA automatically terminates.
3. Durable Power of Attorney
A durable POA is much like a general POA except that the authority it grants remains valid even if you do become incapacitated or incompetent. Indeed, a durable POA acts to protect you in this precise situation. If you end up hospitalized, your bills will still need to be paid and your finances managed, after all. A General Durable Power of Attorney is on of the most important estate planning documents you can have. It allows a trusted loved one to make financial decisions for you if you are no longer able to do so.
4. Springing Power of Attorney
A springing POA also grants your agent general authority over your finances but, unlike the previous examples, only comes into effect when a triggering event such as incapacitating injury occurs. This feature makes a springing POA a good option for those uncomfortable with granting durable POA that goes into effect immediately, and yet it is not without risk. Unless described in unambiguous, clear language, the triggering event may not be recognized as such, leaving you without the protection of a POA just when you need it most. The most common “triggering event” is that your doctor writes a letter explaining that you no longer have the mental capacity to make decision on your own and you need someone else to do so.
To learn more about the different types of power of attorney or to simply talk about any matter related to estate planning, do not hesitate to call Miller Estate and Elder Law at 256-251-2137 or to reach out using the contact form on our website.
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by Bill Miller | May 24, 2021 | Blog, Elder Law, Medicaid, Medicaid Planning
According to the United States Census Bureau, by 2030 one in five residents in the United States will be of retirement age. Many of us will eventually require costly long-term care in our old age. Medicaid planning is one important step that helps individuals prepare for their loved ones’ care needs or for their own future long-term care needs and should be part of every estate plan.
Medicaid planning can help individuals make the most of the financial help available for long-term care in Alabama. Since there are income and asset caps for those hoping to qualify for Medicaid benefits, Medicaid planning can provide options for protecting assets and income while still qualifying for benefits.
What Is Medicaid Planning?
Medicaid planning will depend on an individual’s circumstances and can be as simple as receiving assistance with a Medicaid application. However, ideally, Medicaid planning should commence years in advance of any potential care needs and can involve the restructuring of financial assets to ensure eligibility for benefits.
If an individual’s income or assets exceed the caps set by Medicaid, various options may be available, such as Qualified Income Trusts (QIT) and converting countable assets into non-countable assets. Other challenges that Medicaid planners can help with include asset and income division in the event that one spouse needs long-term care while the other continues to live independently.
Contacting experienced attorneys that are Medicaid planners with the appropriate legal and financial expertise can be an important step for those hoping to qualify for Medicaid. Mistakes with Medicaid planning can lead to costly and irreversible consequences.
Mistakes to Avoid with Medicaid Planning
When making plans for long-term care, consider contacting an estate planning attorney to help you determine if either you or your loved one need residential or long-term care. It can be a substantial mistake to simply ignore planning issues, as Medicaid rules and eligibility criteria for benefits are complex and timely planning is essential. However, it is never too late to get help. Even once a loved one has moved into residential care, an attorney can still help with protecting assets and receiving Medicaid benefits.
Ignoring the Look-Back Period
While it can be tempting to transfer large sums to children or grandchildren in order to qualify for Medicaid benefits, in many instances this can be a detrimental decision. Your financial transactions will be subject to review going back several years. The so-called “look-back period” is currently 60 months in Alabama, according to Medicaid.
Other mistakes to avoid with Medicaid planning can include:
● Applying too early or too late
● Not having a power of attorney
● Not taking advantage of spousal protections
● Taking advice from friends and family rather than seeking professional help
Call Miller Estate and Elder Law Today for Medicaid Planning
Do not procrastinate when it comes to Medicaid planning. If you are reaching retirement age, planning for potential long-term care needs can be essential for your future financial health. An experienced elder law attorney from our firm can help you with all aspects of Medicaid planning, including but not limited to:
● Medicaid applications
● Meeting income and asset limits set by Medicaid
● Protecting your income and assets
● Assisting you with long term planning and immediate crisis situations
● Making sure your spouse’s income and assets are protected
Due to the look-back period, planning well in advance can be important. Contact Miller Estate and Elder Law today to find out how we can help you: 256-472-1900.
by Bill Miller | Apr 22, 2021 | Blog, Elder Law, Long-Term Care
With the US population aging, life expectancy increasing, and events like the Covid-19 pandemic showing us that no one’s health is secure, new awareness has arrived concerning the need for a long-term care plan. This is great news and yet with increased awareness comes an increase in the circulation of misinformation. In a bid to clear the air, we address four of the most common misconceptions concerning long-term care planning below.
1. If you or your spouse enters a nursing home, the state will seize your assets.
Medicaid, the state and federal government-sponsored program that millions of US adults rely on to pay for long-term care needs, seizes nothing when you enter a nursing home. Instead, the program simply will not chip in a dime until you, yourself, have spent down your “countable” assets to a level that qualifies you for assistance. This does not mean only very low-income individuals are eligible to receive Medicaid, however; it simply means that you need to work with an experienced estate planning attorney well ahead of time to put a plan in place to protect assets so that you are able to qualify for Medicaid more quickly when the time comes.
2. If you use Medicaid to pay for care, you risk losing your home.
This misconception is similar to the above but deserves a separate address because of how often it is repeated.
As long as the person using Medicaid (the beneficiary) or their spouse continues to live in their home, it can neither be taken nor forcibly sold. This is the case even if you are single as long as you communicate your “intent to return home” in writing when you enter a nursing home.
It is true that upon your death, the state can file a claim against your estate (which includes your home) in order to repay nursing home expenses covered by Medicaid but even this can be avoided with help from an experienced attorney.
3. Making a financial gift disqualifies you from Medicaid for five years.
Medicaid employs a look-back period wherein any financial transfers or gifts made in the five years prior to applying for the program may be counted against your eligibility. This does not mean you will be barred from receiving benefits if you make a gift during this period. However, it does mean that you may have to endure a penalty period before Medicaid picks up the cost of your care.
This penalty is based on the value of the gifted assets made and how many days of long-term care they could have been used to pay for. Once more, an experienced estate planning attorney can help you work out specifics and determine the most affordable way for you to gain the coverage you need.
4. It is too late to start long-term care planning.
All too often, folks who are already receiving nursing home care or those with imminent need assume it is too late to engage in planning that preserves their assets. This is simply never true. You can always, for instance, use cash to pay down your mortgage and thereby convert a non-exempt asset into an exempt asset and thus save thousands. While it is always better to begin planning early, such last-minute strategies help you retain a large percentage of all that you have worked so hard to gain.
To learn more about long-term care planning or emergency strategies to ensure you have the coverage you need, do not hesitate to call Miller Estate and Elder Law at (256)251-2137 or reach out via the contact form on our website.
by Bill Miller | Apr 15, 2021 | Blog, Estate Planning
All too often, people assume estate planning is only for the wealthy when, in fact, it is crucial for any adult concerned about protecting their health and finances. In basic terms, an estate plan shields you from unforeseen tragedy and, as the Covid-19 pandemic has so clearly shown, no one is exempt from risk. As soon as an individual reaches the age of majority, they need to ensure certain protections are in place and as they grow, their small estate plan must grow alongside them, accounting for both increasing responsibilities and assets.
Four Steps to Starting Your Estate Plan
A basic estate plan consists of a healthcare directive, general durable power of attorney, and a will. In an ideal world, you would file your implement the first versions of each of these documents upon turning 19 but rarely does this happen. Life is busy, responsibilities are many, and most folks simply do not recognize the need to attend to estate planning so soon. If you are among the large majority of adults who have not yet organized their estate, do not worry, but do not put the task off any longer. The following five steps will help you get started:
1. Inventory Your Assets and ResponsibilitiesTooltip Text
Successful estate planning begins with first taking stock of all you own (and owe) and all those who depend on you for care. This means listing financial accounts, insurance policies, retirement plans, and business interests as well as assessing the value of your home, vehicle, and valuables. It also means accounting for any debts you may carry and taking note of children or loved ones for whom you are responsible.
2. Talk to Your Loved Ones
If you are married, you naturally want to ensure your spouse is involved in the planning process from the very beginning. Likewise, if you have adult children, it is essential that they understand your estate planning needs and goals. Important topics to address include who should serve as guardian to any dependents, who will make healthcare and financial decisions on your behalf should you become incapacitated, who will serve as administrator or executor of your estate, and how you want your assets distributed when you die.
At this stage, it is also important to weigh the value of life insurance, especially if your family’s well-being depends on both you and your spouse’s income. Likewise, this is also the time to consider establishing a trust and organizing any financial gifts you may wish to make while living.
3. Seek Out an Experienced Estate Planning Attorney
At the same time as you address the essential topics described above, it is important to hire an experienced attorney to guide you through the estate planning process. After all, different estate planning strategies are better- (or worse-) suited to different estate planning goals and each state has its own, nuanced legislation. An experienced attorney not only ensures all of the necessary documents are properly executed, but provides indispensable advice concerning how best to address the different steps of estate planning and when updates may be needed.
4. Plan for Updates
An estate plan is a living document that grows as you do. Any time a major life event occurs, such as the birth of a child, start or end of a marriage, death of a loved one, or significant change in your financial position, you want to consider updating your plan. Likewise, whenever a new administration takes office, legislative changes inevitably follow which, in turn, necessitate changes to your planning. Lastly, it is important to revisit your plan even if no major changes in your circumstances or priorities have occurred just to be sure your plan is always up to date.
If you are ready to begin the estate planning process, Miller Estate and Elder Law can help. To get started or to simply learn more about the subject, call us at 256-251-2137 or reach out via the contact form on our website.
by Bill Miller | Mar 28, 2021 | Blog, Estate Planning
The worst part of being an estate planning attorney is telling those in need that it is too late to address whatever issue they may have. Unfortunately, this happens all too often and worse still, frequently such cases could have been prevented with just a little bit of foresight. Take, for instance, the following situation which recently came through our office.
Mrs. Anderson [name changed for privacy reasons] called to discuss a delicate matter. Her stepfather was on a ventilator and was not expected to live much longer. While not her natural father, Mrs. Anderson’s stepfather had raised her since childhood. He also had another, biological child who had been estranged from the family for a long time. When Mrs. Anderson’s mother died a few years ago, Mrs. Anderson stepped into the role of care-taker for her stepfather, buying him groceries, ensuring he took his medications, and generally looking after his well-being.
Prior to being hospitalized the stepfather had prepared no estate planning documents and, in particular, no HIPAA release and no medical power of attorney naming Mrs. Anderson. For this reason, his medical team would not share any information with Mrs. Anderson and so she came to us for advice. She wanted to know about options that would allow her to ensure her stepfather’s treatment aligned with his wishes and values and, further, she was concerned about what might happen to his assets should he die.
Ever since childhood, Mrs. Anderson’s stepfather had promised she would inherit certain assets. Further, he had expressed that he would like to leave her the majority of his estate and wished to pass certain sentimental items to her children, which he considered his own grandchildren. None of this existed in writing, however, and Mrs. Anderson was worried that upon his passing, her stepfather’s estranged son would reappear and try to get everything. She wanted to know what could be done to avoid this.
Unfortunately, for Mrs. Anderson it was simply too late. In his current condition, her stepfather was unable to sign a medical power of attorney or a will and without these documents, neither of her worries could be resolved. In order to intervene in his treatment, Mrs. Anderson would need to file for a temporary guardianship and then try to get permanent guardianship—an impractical solution. With no will in place, the distribution of her stepfather’s assets would be determined by Alabama’s intestate succession statutes and these dictate that his entire estate, including sentimental items, would pass to his son.
Mrs. Anderson was devastated. Even if she did gain guardianship allowing her to help her stepfather make decisions while still alive, nothing could be done about what would happen to his estate upon his passing.
These are never the kinds of conversations an estate planning attorney wants to have and they need not happen. Putting basic estate planning documents in place, including a will and advance directives, is a painless, expedient process and is worth doing right now. After all, the only thing worse than losing a loved one is losing their legacy in the process.
Call Miller Estate and Elder Law today to get started on your estate plan and save yourself and your loved ones the grief of ending up in a situation like that described above. Our phone number is 256-472-1900 and we can also be reached via the contact form on our website.
by Bill Miller | Mar 17, 2021 | Blog, Probate
You have probably heard that probating a will in Alabama can be a taxing and costly process. In many instances this is true but it need not always be the case. In fact, there are situations in which administering an estate through probate is the most painless of the available options—but only if you are prepared. In order to shed light on the subject and ensure your estate is optimized for the easiest possible administration, we have prepared the following breakdown detailing when (and when not) to probate.
When You Might Seek to Avoid Probate
Probate can get messy when your estate includes complex assets such as stocks, other types of investments, or fine art, when a family is feuding, or when no estate plan exists. In either of the first two cases, a trust-based plan may be the way to go as this option sees to it that your assets pass directly to heirs without intervention by the courts.
Another situation in which probate may cause problems is when your spouse or dependents have no income of their own. Probating a will can take weeks or even months, after all, and during this time beneficiaries will not be able to access your money. This means that funeral costs, household utilities, property insurance, taxes, and possibly even storage fees may need to be paid out of pocket while probate runs its course—a burden which can sometimes make meeting even basic needs difficult for loved ones.
Finally, you might want to avoid probate if you are worried about prying eyes. As a state court procedure, probate records are public records which means that anyone interested can access information about your assets, liabilities, beneficiaries, and personal representatives. Worse, nowadays many states make such information available online meaning the curious need not even visit the courthouse to gain insight into your private affairs.
While it is true that strategies to avoid probate such as placing assets in a revocable living trust come at an upfront cost, often they save you money in the long run—especially in cases of complex estates which require equally complex court proceedings
When You Might Consider Probate
Despite its bad reputation, probate has its place. In the case of smaller estates with simple assets, for instance, going through the courts can be an efficient, cost-effective process. This is especially true for very small estates that qualify for Summary Distribution of Small Estates—a shortened form of probate specific to Alabama.
Probate may also be beneficial in instances where creditor claims are a concern. Opening a probate case shortens the time that creditors have to file their claims and if they these claims are not filed properly and in a timely matter no payments need be made.
Lastly, probate may be useful when transparency is a concern as the courts require full disclosure of all information and costs. This means that during the probate process, beneficiaries gain the peace of mind of knowing that the executor or personal representative is laying everything on the table.
Ultimately, the decision to probate or not to probate is personal and yours to make. At Miller Estate and Elder Law we are happy to sit down, talk about your unique needs, and upon this basis craft a plan that work for you—no matter the direction you choose. To get started give our office a call at 256 251-2137 or reach us through the contact form on our website.
