by Bill Miller | Feb 20, 2022 | Avoiding Probate, Elder Law, Probate
You’ve probably heard horror stories about the nightmare that is probate court. Undoubtedly, friends and neighbors have had to undergo the probate process…and chances are, they don’t have many good things to say about it.
Let us first say, probate isn’t quite as bad as it gets made out to be (though it certainly CAN be for the ill-prepared). Probate is the legal process that authenticates your will in order to properly facilitate the allocation of your assets to your beneficiaries. Upon death, the estate administration process begins, drawing together all the necessary documentation for the distribution and management of your assets, which the probate court then oversees. The most common document utilized is a will.
If an individual passes away without a will—also known as dying ‘intestate’—the estate administration process becomes much more complicated, and a time-consuming, costly probate process is almost inevitable.
Being proactive and drafting a will, as well as understanding which assets must go through probate, can make the probate process much easier, or bypass it altogether.
Which Assets Need to Be Probated?
Whether or not your assets end up in probate is dependent upon how your estate plan is set up. Essentially, any property that does not have a designated beneficiary, or is not set up to pass by operation of law, will inevitably be deemed probate property, and settled in probate court. Some examples of circumstances that lead to probate include:
- When an individual dies without a will. Without a will present, the estate becomes dependent upon the laws of intestacy, leaving the probate court to adjudicate who will inherit the deceased’s assets.
- When a person passes away as the single-named owner of titled assets. These assets include items like real estate, investment and bank accounts, vehicles, personal property, collectibles, safety deposit box contents, and other solely titled assets of the deceased.
- When property does not have a title. If the deceased does not have the compulsory paperwork for assets in their ownership, and the property isn’t clearly named in the will with the deceased’s wishes, the assets become probate property.
- When the beneficiary predeceases the testator. If your will hasn’t been updated before your named beneficiary passes away, their inheritance will be settled in probate.
Actions You Can Take Now To Avoid Your Assets Being Probated in the Future
As you can see, there are many factors that could land your estate in probate court; however, there are some things you can do now to make a more ironclad estate plan that is specifically designed to keep your assets out of probate, or at least simplify the probate process.
- Ensure your will is detailed. While having a will isn’t enough to avoid probate (all wills must go through probate), when a will clearly defines your wishes, it simplifies the process, and makes authorization to distribute your property much less laborious.
- Establish a living trust. A living trust prevents probate because the trust takes ownership of the assets placed within it and, upon your passing, a named trustee will distribute your estate as stipulated in the trust – without the need/input of the probate court.
- Title property jointly. Property owned in joint ownership with right of survivorship automatically passes the property to the surviving owner(s), without probate.
- Name a beneficiary. Assets that have a named beneficiary—for example, your retirement plan, life insurance policy, or transfer-on-death or payable-on-death bank accounts—escape probate by sending items directly to beneficiaries.
- Give assets away while you’re still alive. Although this is a no-brainer, it deserves an honorable mention. Simply put, if the property is no longer owned by you at the time of death, it doesn’t go to probate. This, however, can cause issues with qualifying for Medicaid if long-term care is needed, so we encourage you to speak with an elder law attorney before giving away money or assets.
At Miller Estate and Elder Law, we pride ourselves on providing clients with a high level of attention to detail that takes all of the guesswork out of estate planning. We create tailored solutions that are based on your specific goals and objectives. Our educational resources and unique programs keep you and your estate plan up-to-date, giving you the confidence needed to be secure in knowing your estate is in good hands.
Contact us today, register for a free workshop, or browse our resources, which address many common questions. With our guidance, you’ll gain peace of mind knowing your estate will be ready for smooth sailing after you’re gone.
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by Bill Miller | Jan 11, 2022 | Elder Law, Medicaid, Medicaid Planning, Medicaid Qualification
Medicaid is a government-administered health insurance program that provides coverage to low-income Americans during all stages of life, from birth to age 65+. Given the massive breadth of this program, it should not come as a shock that it’s an incredibly complex system, governed by a confusing set of rules. This article aims to answer the questions, what does Medicaid cover, and what does Medicaid NOT cover?
While Medicaid can support individuals of any age, it’s an especially excellent resource for seniors. Long-term nursing care costs in Alabama average $78,000 per year, and that is for a shared room. However, qualifying for Medicaid can be a challenge. Applicants must meet certain financial and medical eligibility requirements. There are strict income and asset limits, with policies designed to prevent individuals from giving away their assets in order to qualify. A qualified elder law attorney can help you navigate the Medicaid maze, and avoid unsuspecting mistakes that could leave you or a loved one without the coverage they need.
For seniors who qualify, Medicaid is a wonderful program that works in collaboration with Medicare to cover a variety of healthcare needs
What Does Medicaid Cover?
Medicaid covers mandatory healthcare services, including:
- Hospital care
- Skilled nursing
- Home healthcare
- Doctor’s appointments
- Preventative care & wellness screening
- Transportation to and from medical appointments
- Diagnostics
Optional benefits include hospice care, case management, prescription drugs, physical or occupational therapy, rehabilitation, dental, vision, and more.
However, Medicaid does have some limitations…
What Does Medicaid NOT Cover?
In most circumstances, Medicaid will not cover medical care provided outside of the United States, though certain circumstances—such as if a foreign hospital is closer than a domestic hospital—may be covered. Like with private health insurances, Medicaid will also not cover services deemed unnecessary, or services paid for by another insurance provider.
Some other services that Medicaid will not cover include:
- Free health screening or medical devices that are given away
- Cosmetic surgery or complications that result from cosmetic surgery
- Personal comfort items or beauty services
Every state has slightly different Medicaid qualifications and coverage, so the best way to gain comprehensive (and accurate) understanding is to speak with a qualified elder law attorney in your home state.
Miller Estate and Elder Law is happy to offer a number of free resources to help you better understand how Medicaid planning works, and how to avoid going broke paying for long-term care. Gain access to our brief 20-minute webinar about how to get you or a loved one qualified for Medicaid by completing the brief form below, or download one of our free guides.
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by Bill Miller | Jan 4, 2022 | Elder Law, Medicaid
Medicaid is a wonderful government program that helps low-income seniors with limited assets to afford healthcare and long-term nursing care. Applicants must meet certain medical criteria, and there are strict financial eligibility requirements that must be met when applying for Medicaid, and while already qualified.
Many seniors find that their countable assets and/or income exceed their state’s Medicaid limits. To meet the financial requirements for Medicaid qualification, they must carefully minimize—or spend down—excess funds. Funds may be spent down on things like medical expenses, home improvements, and prepaid funerals, etc. Gifting assets to children and grandchildren, friends, and loved ones may sound like a smart way to spend down assets, however, this can cause the applicant to become disqualified for Medicaid.
To prevent applicants from simply giving away their money or resources in order to qualify for Medicaid, the federal government implemented a “look-back period.” This is a set period of time prior to the individual’s application during which the Medicaid administering agency can review the financial transactions that a senior has made. If a transaction is found to be in violation, the applicant will be assessed a penalty.
Each state’s Medicaid program uses slightly different eligibility rules, but most states examine all of a senior’s financial transactions dating back five years from the date of their application. If a senior is found to have gifted assets during this look-back period, they will be disqualified from receiving benefits for a certain number of months. The length of the penalty depends on the total amount of assets the applicant gifted, and their state’s penalty divisor.
When it comes to the length of the penalty period, there really is no limit. Many find themselves wondering what will happen if a senior needs care, but has spent all their assets in a way that makes them ineligible for Medicaid coverage. Unfortunately, if a senior has gifted their assets during the look-back period and requires nursing home care, the cost of care will have to be paid out of pocket until the penalty period runs out, and they become eligible for Medicaid.
Fortunately, there are exceptions to the rules and exemptions made for families who find themselves in difficult situations. Under these exceptions, applicants are permitted to transfer assets—to certain parties—during the look-back period, without incurring a penalty. Additionally, a penalty can be “cured” if transferred assets are returned in their entirety, or reduced if the transferred assets are partially returned. In order for this to work, the person who returns the assets needs to be the same person who received the gift.
Less fortunately, these exceptions and exemptions are often confusing and difficult to take advantage of without the expertise of an elder law attorney. Reaching out to an attorney is the best way to navigate Medicaid’s complicated rules and application process. The best time to start planning for the cost of long-term care is well before you or your loved one’s need it.
We encourage you to call attorney Bill Miller to discuss how to best preserve your assets and avoid going broke paying for long-term nursing care. You can reach Miller Estate and Elder Law at (256) 251-2137 or by emailing info@millerestateandelderlaw.com.
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by Bill Miller | Nov 20, 2021 | Elder Law, Long-Term Care
It might be hard to think about this now, but chances are—somewhere down the road—you may need help taking care of yourself. One question that arises from this situation is: how will you pay for it? One way to prepare for the potential cost of long-term nursing care is to purchase long-term care insurance. Unlike traditional health insurance, long-term care insurance is designed to cover the cost of long-term care services and support in a variety of settings, such as your home, a nursing home, or another facility.
Long-term care insurance policies cover such costs as assistance with routine daily activities, like bathing, dressing, or getting in and out of bed. They also help cover the cost of care if you have a chronic medical condition, disability, or disorder.
Taking into consideration long-term care costs is an important part of any long range financial plan. If you wait until you need care to buy coverage, it will be too late. Most policies require medical underwriting, and if you already receive long-term care services, you may not qualify. As a result, most people purchase long term care insurance plans in their mid 50’s to mid 60’s.
As we mention in the above video, there are two different types of long-term care insurance policies: traditional long-term care insurance, and asset based (hybrid) long-term care insurance. Both of these options have their pros and cons, but—as we mention—asset based insurance is usually the preferred option.
Traditional long term care insurance is a “use it or lose it” type policy, similar to homeowner’s insurance. If you do not need it or use it during your lifetime, you do not benefit from paying the monthly premium. The monthly premium that you do pay is based on your age, and how much coverage you want. This premium payment will increase over time, and can also continue to increase…even after you take out the policy.
On the other hand, a hybrid policy creates a pool of money for long-term care that is equal to several times your premium payments. The pool of money created for long-term care can either be used for a specified minimum period of time, or for a lifetime (depending on the insurance company). If you do not need these benefits, the policy pays a death benefit to your heirs upon your passing.
Long term care insurance is something everyone should consider, and it is important to understand the differences in the types of policies that are available. If you are apprehensive about navigating the long-term care maze, please join estate planning attorney Bill Miller for an upcoming free workshop using the form below. We’ll answer
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by Bill Miller | Nov 12, 2021 | Elder Law, Estate Planning
For many, when they hear the term “estate plan” they immediately think of a last will and testament. While a last will and testament is not the entire estate plan, it is an important part of it. Let’s take a deeper look at what exactly a last will and testament is.
Last Will and Testament, Defined
The last will and testament is a legal document that communicates a person’s final wishes as to how they want their assets distributed when they pass away, medical care, and dependents. In the last will and testament, a person can leave instructions as to whether they want certain people to get certain assets, or whether they just want their assets divided among their heirs. In addition, if there are minor children involved, a last will and testament can include instructions for who would raise their children, as well.
How Does a Last Will and Testament Work?
A person can write their last will and testament while they are still alive and of sound mind. When they pass away, the instructions will be carried out by a named personal representative (also called an executor or executrix) of the estate. The personal representative is normally named when the will is initially drafted.
Necessary Requirements
Since the last will and testament is vital to distributing the assets of a person’s estate, there are a few requirements that must be met in order for the will to be considered valid.
First, the person who is writing the will must be of sound mind and mentally capable. For example, someone who has severe dementia would not be able to write a will, or make changes to their existing will. In addition, for a will to be considered valid, not only should the person signing it be of sound mind, but two unrelated and mentally sound witnesses must sign it, as well. If these requirements are not met, then the document will not be considered legally binding.
What a Will Doesn’t Do
While the last will and testament is the foundation of a solid estate plan, it should not be the only part of an estate plan. This document outlines your wishes, but does not grant any individual the ability to make medical or financial decisions for you if you were to become incapacitated, but not die. It also cannot protect your assets from creditors, or from the costs of long-term care if that becomes necessary. A power of attorney, advanced directive, and trusts are other planning documents that you need considerations to consider include in your estate plan.
The best way to ensure that your estate plan is complete is to speak with an estate planning attorney. If you have questions about creating a Last Will and Testament—or an estate plan altogether—we encourage you to contact Miller Estate & Elder Law at (256) 251-2137 or or register for one of our free estate planning workshops.
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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.
