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 | Apr 7, 2021 | Blog, Elder Law, Probate
If you are thinking about probate court, you have probably heard that should do all you can to avoid it. Proponents of this view cite compounding costs and the emotional toll that probate takes. There is genuine merit to this perspective and yet a proper evaluation means talking about the real, not imagined costs of probate.
No fixed rate exists for probating an estate. Cost depends on the size and complexity of the estate, details of the will, whether or not there are any disputes to be resolved or debts to be paid, and where probate is undertaken. Probate fees can be broken down into filing fees and court costs, the estate executor’s fee, attorney fees, professional fees for accountants or other necessary services, and surety bonds. The following breakdown explains how each of these is calculated.
Filing Fees
Filing fees vary from county to county. In Baldwin County, you can expect to pay around $58.00 while in Mobile Country you are looking at $50.00. In Calhoun County, where our firm is located, the fee is $57.00.
Estate Executor’s Fee
Under Alabama law, the executor of an estate can file a request with the court for an executor fee of up to 5% of the value of the estate. In order to reduce the cost of probate, an executor may choose to waive their right to this fee. In addition, when a person drafts their will, they may also waive the requirement that the executor post a surety bond before assuming their appointment.
Attorney Fees
Attorney fees vary widely making even a ballpark figure difficult to provide without some basic information about the estate. In the simplest of cases, an individual may pay a few thousand dollars but this number can quickly grow as complications arise. To gain a clear estimate of potential costs, it is important to talk to a trusted attorney about the specifics of your case. Some attorneys charge by the hour. We charge flat fees for probate and the amount of the fee depends on the complexity of the estate.
Professional Fees
Once more, these fees depend on the size and complexity of the estate. Accounting will vary based not only on the amount but on the types of assets owned as well as whether the estate is subject to federal taxes (there are no state-level taxes in Alabama). Appraisal fees will likewise be a function of assets held. If a business owned by the deceased forms a part of the estate, all of these fees increase substantially.
Bond Fees
Before your estate’s executor may be appointed, they will have to post a bond in an amount determined by the probate judge. As mentioned earlier, you may waive this requirement in your will but a judge may overrule your wishes if minor children are involved in the estate.
Miscellaneous Fees
Miscellaneous fees range from insuring and storing personal property to shipping and disposal costs. In cases of complex estates that takes months or years to administer, these small costs can pile up and if your spouse or loved ones have no income of their own, they can become an immense burden as your personal assets will remain out of reach until the probate process is complete.
Miller Estate and Elder Law can assist you with every step of probate and, if you act early, can help you determine whether going through probate even makes sense in the first place. After all, trusts and other such legal tools allow you to build an estate plan that skirts the need for probate—an option that is often cheaper in the long run for those with complex assets.
To learn more, call us at 256-472-1900 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.
by Bill Miller | Mar 1, 2021 | Blog, Medicaid, Medicaid Planning, Medicaid Qualification
A change in government inevitably means changes in legislation and the new administration is no exception. On his first day in office, President Biden signed ten executive orders which address a range of topics including vaccine production, testing, and access to healthcare. One, entitled “Executive Order on Strengthening Medicaid and the Affordable Care Act” is of special relevance to long-term care planning—a subject which concerns everyone, especially as Covid-19 continues to threaten communities.
Medicaid-Specific Changes
The central message of policy introduced by the new administration is that Medicaid will operate as a cornerstone of the Affordable Care Act and, according to Jocelyn Guyer, managing director at Manatt Health, “a primary vehicle for coverage for people, particularly during the pandemic.” This will be achieved in two principle ways.
First, states given ten-year expansion waivers which exempt them from certain provisions of federal law in state Medicaid programs may see those revoked. In turn, these states could receive increased federal funding aimed at expanding the program. Areas where significant gaps in low-income coverage exist are the most likely to be affected by such shifts in policy.
Second, the new administration is likely to act against block grants approved by the previous administration. These grants, which permit states to transform their Medicaid programs into demonstration projects that seek to develop alternative coverage options stand in the way of Medicaid’s expansion.
What Does This Mean for Individuals?
None of the changes mentioned have yet become policy and yet the Biden administration’s priorities are clear. Access to Medicaid looks set to expand and policies that undermine protections for patients with pre-existing conditions, create barriers to coverage, or reduce affordability will likely be eliminated. This means that even more so than before, Medicaid is the best way for most US families to gain protection from the crippling costs of long-term care.
The sooner you begin planning, the easier it is to ensure you qualify for Medicaid when you need it. After all, one aspect of the program that is sure not to change regardless of who sits in the Oval Office is the five-year lookback period employed to dissuade applicants from making inappropriate gifts or transfers for the purpose of meeting Medicaid’s asset and income limitations. This rule means that individuals who strategically shuffle around finances within the five-year period preceding their need for Medicaid are subject to a penalty period inhibiting their access to the program. If planning begins more than five years prior, however, access can be assured.
There is nothing wrong with arranging assets to make sure you are covered in your golden years. As a rule of thumb, in 2021 an individual must have income less than $2,382 per month and no more than $2,000 in in assets to qualify for nursing home Medicaid. While these limitations do not count an individual’s house, they are nonetheless stringent enough to exclude most middle-income families. Nonetheless, most middle-income families will struggle to pay the average $8,700 monthly cost of nursing home care and so planning to ensure you aren’t stuck with such a bill is crucial.
At Miller Estate and Elder Law we offer free estate planning and asset protection workshops designed to educate clients about how best to plan for their individual long-term care needs. We also bring years of experience to the planning process, itself, and so whether you are looking to get started or simply learn more about how Medicaid is changing in 2021, don’t hesitate to give our office a call at 256 251-2137 or contact us through our website.
