Massachusetts Estate Planning & Asset Protection Blog

Why Retitling Assets to Your Spouse to Qualify for Medicaid May Not Work Part 2

Posted by Dennis Sullivan & Associates on Fri, Feb 20, 2015

Why Retitling Assets to Your Spouse to Qualify for Medicaid May Not Work Part 2 | Massachusetts Elder Law Attorney

 

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A few weeks ago we were discussing Angela’s dilemma.  Her husband, Peter, has Alzheimer’s disease and is going to need some care at home.  Angela is concerned that he will need nursing home level care sooner rather than later and she wants to preserve their primary home as well as their vacation home.

The problem is that Peter does not have long term care insurance so they will have to privately pay for care until he qualifies as eligible for Medicaid.  Angela can keep the primary home and $119,220 in assets and still be eligible. Unfortunately, all their other assets, including their vacation home, will need to be spent down before Medicaid will cover his care.  She can’t simply take Peter’s name off the deed to their vacation home like she had hoped she could.

So, what are their options?  It may still be possible to transfer the second home to a trust and try to get through the 5 year look back.  Peter doesn’t need nursing home level care yet, and if his decline in health is slow enough, it may be possible to continue paying for the care he needs for the next 5 years.  This option would mean that they would have to spend their other savings during that time frame and if they can’t quite make it, maybe their children or another family member can help to pay for Peter’s care.  If not, Angela can always sell the vacation home if there is no other option.

Another approach for Angela to consider, she could also sell both homes and then buy one primary residence with the proceeds from both sales.  While this option doesn’t accomplish what Angela really wants, keeping their vacation home in the family, it does help preserve their assets for any future needs she may have as well as increase the amount that she will be able to be passed on to her family when she is gone.  If a family member can purchase the property from her, or take a mortgage to do so, then it can stay in the family like she wanted.

So where does Angela go from here?  We told her that a transfer to trust is definitely worth considering since we don’t know how Peter’s illness will progress.  The lesson here is an important one:  Angela should have called us much earlier, when both Peter and Angela were still healthy, not after Peter’s diagnosis.  It would have made it much easier to get through Medicaid’s 5 year look back and Angela would have been able to rest easy knowing she had secured their vacation home that she and her family have enjoyed for years.

As it stands now, she could set up the trust that meets Medicaid requirements, make the transfer and hope for the best to make it through the current five year look back period. If the ten year look back period ever passed, it would not make sense given Peter’s illness.

 

For additional guidance, please see The Seniors and Boomer's Guide to Health Care Reform and Avoiding Nursing Home Poverty the book provides important information for families on resources for quality care and protection for loved ones.

At the Estate Planning & Asset Protection Law Center, we provide a unique education and counseling process which includes our unique 19 Point Trust, Estate and Asset Protection Review to help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones, click here for more information. We provide clients with a unique approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

 Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: Nursing Home Costs, asset protection, Medicaid, Nursing Homes, transfer of assets, retitling assets, 2015

Why Retitling Assets to Your Spouse to Qualify for Medicaid May Not Work

Posted by Dennis Sullivan & Associates on Mon, Jan 26, 2015

Why Retitling Assets to Your Spouse to Qualify for Medicaid May Not Work | Massachusetts Elder Law Attorney
 

 nursing-home-brochure

 

It’s something we have written about in past blog posts but just last week we received a call from Angela on this exact issue.  Her husband, Peter, has Alzheimer’s and is receiving care at home from a visiting nurse.  She is concerned that as his condition worsens, it won’t be long before he needs to go to a nursing home for care.  At around $160,000 a year she doesn’t have sufficient income to pay that kind of expense.

A few years ago Angela met with her attorney about planning for the possibility of needing Medicaid for Peter.  She wanted to insure that her primary residence and vacation home would be protected, and that they would not need to be sold and spent down for care.  Her attorney told her not to worry, “We’ll just transfer Peter’s interest in the homes over to you.”  So that’s what they did. 

 “Unfortunately”, we told Angela, “that is not going to protect the vacation home.” That’s because under Medicaid’s rules, Angela can keep their primary residence, however all other assets, including the vacation home, are considered “countable” assets.  Unfortunately, Angela is entitled to keep only up to a maximum of $119,220 (the limit in 2015) of the “countable assets”. Everything else may be required to be spent on Peter’s nursing home care. 

It’s a common mistake I still see people make all the time.  You can’t simply shift everything over to the healthy spouse in order to get the ill spouse’s assets under the $2,000 limit to qualify for Medicaid.  So, where does that leave Angela?  Next week I’ll share that with you.

 

For Furhter reading, look at our book The Seniors and Boomer's Guide to Health Care Reform and Avoiding Nursing Home Poverty where we cover topics like this and help you avoid many of the common pitfalls that occur during estate planning.

For more on the mistakes and oversights that can affect people and their families, take a look at our new book: The 10 Biggest Estate Planning and Asset Protection Mistakes People Make and How to Avoid Them! 2nd edition, now including the special bonus chapter, The Biggest Long Term Care Planning Oversights and Opportunities for Long Term Care

At the Estate Planning & Asset Protection Law Center, we provide a unique education and counseling process which includes our unique 19 Point Trust, Estate and Asset Protection Review to help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones, click here for more information. We provide clients with a unique approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

 

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

 

Tags: Nursing Home Costs, asset protection, transfer of assets, alzheimers

The Importance of a Well Crafted Power of Attorney

Posted by Dennis Sullivan & Associates on Fri, Jan 23, 2015

The Importance of a Well Crafted POA | Massachusetts Estate Planning Attorney

 law_books

 

As we always tell our clients, a power of attorney is just as important, if not more important to you, as your will.  Yet most people pay far more attention to the drafting of their will and give their power of attorney (POA) little or no thought. 

A last will and testament establishes your desires as to whom and in what manner you choose to leave my possessions and assets when you die.  While meaningful to you, it is more relevant to the persons receiving those assets after you’re gone.  A power of attorney, however, is critical to your well-being while you are still alive. The power of attorney is used at a time when someone is at their most vulnerable, when you can no longer take care of your own affairs and need the assistance of the person or persons who has been designated as your agent(s).

However, setting up a power of attorney has always been an afterthought for many people.  Before computers, a common response to the need for a POA was to pick up a preprinted document from the stationery store, today’s version is to print the document from a website found on the internet, such as LegalZoom.com. Both usually contain language no more specific than “I give my agent the authority to do anything that I can do as a principal”. In fact the fine print on the site informs you that “We are not a law firm or a substitute for an attorney or law firm. We cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options, selection of forms or strategies.”  If that is the case, how could you rely on their “non-legal” documents to take care of yourself and your family?

 Even when an attorney drafts the document, many will use a one size fits all approach that can often be detrimental to the client.  I think that the ease with which this document can be created has led to the myth of its low value in the eyes of the general public. Nothing could be further from the truth.

Here is a recent situation that we faced in our office that serves as an example to highlight the importance of the document and how critical a role it plays in achieving our client’s goals and objectives. 

 

We had drafted the client’s power of attorney.  It contains language permitting the agent “to enter any safe deposit box or vault on which [the principal is] a signer and withdraw or add to its contents”.  The agent wanted to close the account and surrender the box.

The bank employee reading the clause concluded that this power did not include the ability to close out the box (although he agreed the agent could close the bank account).  This is a situation we have come across frequently, an evaluation of the document limited to the express language, rather than examining the document as a whole.  Courts have reasoned that the whole document must be examined, and each clause should be used to interpret the others.

If the agent has the power to remove and add contents to the safe deposit box then he has the power to “deal with” the box and therefore has an implied power to open and close the box.  We could have had relied in this argument with the bank, however, there was another paragraph in the document that permitted the agent to conduct any banking transaction authorized by a specifically referenced Massachusetts statute.  I pointed out to the bank employee the specific language in that law authorizing the agent to open and closed safe deposit boxes.  What could have been a long, drawn-out problem was solved quickly through a carefully worded power of attorney.

In our 27 years helping people and their families, I have had numerous instances in which third parties, usually financial institutions, question the language in our documents.  As a result, we are constantly updating them.  The take away here it to make sure you have a detailed, well drafted power of attorney.  Don’t opt for the vague, 2 page, cookie-cutter documents printed off the internet.  It could easily be one of the most costly mistakes you ever make.

 

For more on the mistakes and oversights that can affect people and their families, take a look at our new book: The 10 Biggest Estate Planning and Asset Protection Mistakes People Make and How to Avoid Them! 2nd edition, now including the special bonus chapter, The Biggest Long Term Care Planning Oversights and Opportunities for Long Term Care

At the Estate Planning & Asset Protection Law Center, we provide a unique education and counseling process which includes our unique 19 Point Trust, Estate and Asset Protection Review to help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones, click here for more information. We provide clients with a unique approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

 

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: probate, durable power of attorney, trusts, power of attorney, transfer of assets, Wills

A Lack of understanding with Wills

Posted by Dennis Sullivan & Associates on Fri, Nov 21, 2014

A Lack of Understanding with Wills | Massachusetts Estate Planning Attorney

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A Common Misconception

Many people think a Will, will control how their assets will pass after they’re gone, yet most assets today pass outside of Wills. For example, assets held in joint tenancy pass to the surviving joint tenant. If there is a surviving named beneficiary (as there are on retirement accounts, POD, TOD and life insurance plans), then those assets held as such will pass to the surviving named beneficiary. Your other assets that do not have those designations pass pursuant to your Will.

 

Example A

Joe’s Will left his estate equally to his four children with each getting 25%, however, Joe named his oldest child, Todd, as the sole beneficiary on his life insurance policy. As a result, Todd got all of the life insurance and 1/4 of the Probate estate. The other three children each get 1/4 of Joe’s Probate estate, but none of his life insurance. Todd refused to share the money from the insurance policy, leading to bitterness and estrangement from his siblings. Joe had made the all too common mistake of assuming that his Will would control everything, and as a result his children were left confused and angry by his poor planning.

 

Example B

When she was younger and still single, Jill named her sister Mary as the beneficiary on her retirement plan at work, and her life insurance policy. Jill and Mary purchased a first home with joint tenancy; both sisters lived in and shared the house. A few years later, the sisters had a falling out and Jill got married. Subsequently Jill changed her Will to leave everything to her husband.

However, because Jill never changed her beneficiary designations on her retirement plan or on her life insurance, or the joint tenancy on the house she and her sister had purchased; the bulk of her estate passed to Mary on Jill's death and not to Jill's husband. An additional complication came in when Jill's husband sued Jill's sister to assert a spousal community property interest in Jill's retirement and the house.

 

The Solution

These problems, and many others, can be avoided by properly using a Living Trust as the basis of your estate plan. Aside from the greater control a Living Trust provides, greater privacy, more flexibility and it is harder to challenge since it avoids the ordeal of probate. While a Living Trust may not be the best solution to every estate planning problem, it is a wonderful tool to have at hand. As always, we recommend consulting an estate planning professional when drafting your estate plan and documents. We also highly recommend updating these documents at least every three years to make sure that your assets will be going to the right people in the right amounts.

 

Research shows that 86% of trust & estate plans fail! In Our Newest book we reveal what the ten biggest estate and asset protection mistakes are and how to avoid them. Learn where problems may exist in your current plan, and where there may be hidden opportunities in your plan to protect your home, spouse family and life savings. Click here for more information.

At the Estate Planning & Asset Protection Law Center, we provide a unique education and counseling process which includes our unique 19 Point Trust, Estate and Asset Protection Review to help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones, click here for more information. We provide clients with a unique approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

 

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: Estate Planning, probate, trusts, transfer of assets, Wills, joint tenancy

A Trust For A Future Generation

Posted by Dennis Sullivan & Associates on Thu, Sep 25, 2014

A Trust For A Future Generation
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An Old Tool That Still Works

Dynasty Trusts also referred to as Legacy Trusts are an instrument that has been used by the wealthy to preserve the wealth and legacy of family assets for generations upon generations. Most of the high net worth families from the late 1800's to early 1900's enjoyed the benefits of the Dynasty Trust. It is also well known that the Kennedy's are still enjoying the benefits of the Dynasty Trusts established generations ago.

 

So What Is It, And How Does It Work?

A Dynasty Trust is an Irrevocable Trust used to pass wealth and assets to descendants of the person establishing the Trust. The trust does not leave assets to a spouse or the immediate children, but to grand-children, and in the past it was left to great-grand-children or even great-great-grandchildren. Essentially, a Grantor could leave a substantial estate to children multiple generations that he or she would never live to meet.

This process went on for many years and an extreme amount of wealth was passed on tax free. Eventually though the government saw how much money it wasn’t getting its hands on and cracked down on the practice. They created the Generation Skipping Tax: a law designed to prevent wealthy families from transferring their enormous wealth on without paying an inheritance tax. So, these trusts can no longer go on for generations after generation, since the government has now hedged themselves to ultimately get paid.

 

Some Exclusions Apply

However, the government has also provided for the gift tax exclusion. The amount varies depending on the current administration in Washington, but currently there is a $5.34 million (adjusted to inflation) gift tax exclusion which means that you can give away in your lifetime up to that amount tax free. After that, you pay a significant percentage in taxes on gifted transfers of wealth. For a married couple, you can double the amount to $10.68 million.

One other item that affects the Dynasty Trust is a complex and convoluted law called the Rule Against Perpetuities. This law limits the number of generations that can be skipped before the Trust must commence distributions. The law puts a time limit on the Trust so that the money cannot be held in trust forever and must eventually be distributed. There are many other rules to this law that we do not have time to deal with here, but simply put, the Rule states that the distribution must take place within 21 years after the last remaining beneficiary, alive at the time of the making of the Trust, dies.

 

Who Gets What?

As mentioned earlier, your children do not benefit from the principle of the trust; however they will receive the income from the trust during their lifetimes. Your grandchildren would be deemed the true beneficiaries, thereby receiving the assets in the trust, inheritance tax free.

We have only scratched the surface of the complexity and usefulness of this trust in this blog. A Legacy Trust is not for everyone and a lot of thought and planning must go into determining whether this trust accomplishes your goals and intent. However, when used, this Trust is extremely powerful, not only for preserving wealth but for its asset protection functionality. If you have not used up your lifetime gift exclusion and you are interested in preserving some family wealth for future generations, we recommend you contact our office to learn more about the Dynasty Trust.

 

For further information on how to protect the inheritance for your children and grandchildren, please take a look at our book, The Ten Biggest Estate Planning and Asset Protection Mistakes and How to Avoid Them 2nd Edition, available for FREE kindle download between September 26th and October 2nd, or for purchase from Amazon.com

 

At the Estate Planning & Asset Protection Law Center, we provide a unique education and counseling process which includes our unique 19 Point Trust, Estate and Asset Protection Review to help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones, click here for more information. We provide clients with a unique approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: asset protection, Estate Planning, Massacusetts Estate Tax, massachusetts estate planning strategies, tax exemption, transfer of assets, Wills

Times Are Changing, So Are Tax Laws

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Tue, Aug 26, 2014

The Tax Game Has Changed | Massachusetts Estate Planning Attorney

 

Tax planning, estate tax, trust, congress

 

The Old Ways Don’t Work Anymore

For years, estate planners have done what is considered traditional estate planning. They drafted plans primarily concerned with minimizing future estate tax liability and gave minimal attention to income tax consequences.

This was perfectly fine years ago when the estate tax was much more severe than the potential for income tax. This was attributable to relatively high estate tax rates, low estate tax exemption that was not indexed for inflation, and comparatively low capital gains rates.

However, Congress has tinkered with the tax system in a huge way. Accordingly, the income tax impact of estate planning is taking on greater significance, especially for Massachusetts residents.

 

The Tax Man Cometh

More attention shall now be directed toward the importance of income tax basis considerations in estate planning due to the narrowing between the estate tax rates and the income tax rates. In fact, in most estates worth less than $5.34 million, estate taxes are no longer an issue. Now, income taxes loom large, primarily because of the lack of attention on the income tax basis (i.e. cost or adjusted basis) of capital assets. Also state estate taxes have become critically important because of the lower $1 million threshold for estate taxes in states like Massachusetts.

 

Failing to Update Could Cost You

The bad news for most middle-class taxpayers is that for years they've been fed a steady diet of estate tax minimizing wills and trusts. Worse yet, they hang onto outdated documents for many years, thinking they are done with their estate planning and not wanting to be bothered. Sadly, these old documents will no longer serve their intended purpose of estate tax minimization. A major problem is also created when federal estate tax minimization plans, unless they are updated, will cause a completely avoidable Massachusetts estate tax for a married couple. While there may be no federal estate tax savings with these documents, because very few middle-class taxpayers will ever pay estate tax, the documents will increase income taxes for their heirs upon sale of appreciated assets. Moreover in Massachusetts, there may not only be a completely avoidable estate tax on an additional 1 million dollars, but it may also trigger a large, completely avoidable Massachusetts estate tax on the first death.

 

What to Do About a Completely Avoidable Massachusetts Estate Tax

Bottom line:  the game starts anew. Let's focus on income tax minimization for most taxpayers and forget about estate tax minimization. Unless your estate is worth more than $5.34 million, your biggest risk is Massachusetts estate tax as well as overpaying income taxes due to inattention to income tax basis planning in your wills and trusts.  Don't make that mistake. Review your documents today so that you eliminate these lurking tax problems

 

At the Estate Planning & Asset Protection Law Center, we provide a unified education and counseling process which uses a unique 19 Point Trust, Estate and Asset Protection Review to help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones, click here for more information. We provide clients with a unique approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: massachusetts estate planning strategies, trusts, Nursing Home Costs, Mistakes, Tax on IRAs, Massacusetts Estate Tax, social security, Tax Savings, tax deductions, tax liability, tax exemption, tax reform, taxes, Massachusetts estate tax, transfer of assets, tax, trust, Nursing Home

Massachusetts Estate Planning Lawyer | Jill Saved $30,000 - Part One

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, Jan 23, 2013

Medicaid, Medicare, Fiscal Cliff, Seniors, Estate Planning, MassachusettsJill needed help. 

She had cared for her grandfather for years.  When he needed nursing level care she found a nursing home nearby, arranged for him to be admitted and, as agent under his Power of Attorney, spent down his remaining assets.  Jill then scheduled an appointment with a Medicaid caseworker to file a Medicaid application on his behalf.   It seemed to be pretty simple, but problems quickly arose.

Jill gathered her grandfather’s financial records together and turned them over to the Medicaid caseworker at the first interview.  The caseworker completed the Medicaid application with her right there, printed it and had her sign it. She left the office thinking everything would proceed smoothly – that is until she got a letter from the same caseworker telling her that her grandfather still had $30,000 in assets remaining to be spent down.

Jill was confused by the letter.  She was positive that her grandfather had only a few hundred dollars left in his checking account, the only asset he had remaining.  That’s when she called our office for help.  Jill provided us with copies of everything she gave to the caseworker, and upon reviewing everything, we found 2 accounts that were titled in the name of her grandfather, custodian for Jill, with the initials UGMA at the end.

I explained to Jill that UGMA stands for Unified Gift to Minors Account.  Jill said she didn’t even know those accounts existed.  She just gathered together whatever paperwork she could find for her grandfather and turned it all over to the caseworker.   The caseworker insisted that Jill needed to cash those accounts in and pay the nursing home, then her grandfather would qualify for Medicaid.

Next week we’ll reveal why the Medicaid caseworker was wrong and what we did to fix Jill’s problem and get her grandfather help.

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique education and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops. Call 800-964-4295 to learn more about what you can do to enhance the security of your beneficiaries, digital assets, Estate Plan and legacy.

 Elder Law Attorney, Estate Planning Lawyer, Massachusetts

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: Nursing Home Costs, asset protection, Medicaid, Nursing Homes, advanced directives, caregiver, transfer of assets, caretakeer, Medicare

Massachusetts Estate Planning Attorney | Can I Transfer My Home to My Child and Still Get Medicaid?

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Mon, Oct 01, 2012

Medicaid, estate planning attorney, MassachusettsCan I transfer my home to my child who lives with me and still get Medicaid?

The following case is a prime example of how a little bit of information can be a dangerous thing.  Mom transferred her home to Linda 4 years ago.  Mother and daughter had been living in the home for years.  “Since I am living in the home isn’t it an exempt asset?” Linda asked.  “Yes, it is,” I told her, “but that doesn’t mean Mom can transfer it to you.”

What Linda did is confuse the rules on exempt assets with the rules on transferring assets.  If Mom needs nursing home care and applies for Medicaid, the State will not force the sale of the home if Linda has been, and continues to, live in it.  In other words, it won’t require the sale proceeds to be spent on Mom’s care before it will approve her Medicaid application.

Keep in mind that if Linda lives there, she can’t use any of Mom’s income to pay for taxes, insurance and upkeep.  That income must go to the nursing home.  Linda must pay the expenses herself, but she can continue to live there.  After Mom passes away the State will place a lien on the home to recoup the benefits it paid out during Mom’s life, but Linda can continue to live there (assuming she is the person who inherits the home from Mom) and the State will wait until the home is sold to be paid back.

Now, here’s where Linda made her mistake.  She figured that if the home is exempt as long as she is living there, Mom can transfer ownership to her and still qualify for Medicaid at any point in time.  That is incorrect.  Transferring an exempt asset is still subject to the 5 year lookback and a potential Medicaid penalty.

If Mom’s house is worth $400,000, the transfer to Linda results in a potential penalty of 48 months.  This means that if she applies for Medicaid now, 4 years after the transfer, she will be ineligible for Medicaid for 48 months.  “Are there any exceptions to this rule?,” Linda asked.

“There are a few,” I told her.  Next week we will share with you what they are.

For more information about Medicaid, you can gain free online access to the “Seniors’ Guide to Health Care Reform & Avoiding Nursing Home Poverty” which contains secret benefits revealed by the Affordable Care Act.

Click Here to Download the Senior & Boomers Guide to Health Care Reform & Avoiding  Nursing Home Poverty

At the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates, we help people and their families concerned with losing their homes and life savings to increasing medical and nursing home costs, taxes and the costs and time delays of probate. We also protect clients from losing control of their own health and financial decisions.

We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at www.SeniorWorkshop.com

 

Tags: Estate Planning, Medicaid, Massachusetts, exempt, non-exempt, transfer of assets, Medicaid penalties, transferring

Massachusetts Estate Planning Attorney | Power of Attorney

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Tue, Sep 25, 2012

Do you know what legal documents you should probably have in place right now?

A Power of Attorney is one of the most important legal documents a person can have. Without a comprehensive power of attorney, many people are unable to handle their loved ones’ financial matters nor make health care decisions without seeking court intervention.elderly people

We often have clients come into our office assuming that just because their assets are titled jointly with their spouse, parent or partner, that they are able to liquidate accounts to pay bills, hire attorneys, sell their jointly titled real estate, etc. Unfortunately, that isn’t the case. In fact, we recently had a client come into our office who had a jointly titled investment account with his wife whom had just entered a nursing home. Without going into great detail, he did not have a power of attorney for his wife and was unable to transfer the assets into his name to do some Medicaid planning. Instead, he has to petition the court to become his wife’s Conservator and spent tens of thousands of dollars on her nursing home care when he could have, had she had a proper power of attorney, transferred the account into his name, alone, purchased an annuity for himself and qualified her for Medicaid immediately.

What is a Power of Attorney?

A power is a legal document where one person (the principle) authorizes another (the agent) to act on their behalf. There are financial powers of attorney which allow your agent to make decisions regarding your property and healthcare powers of attorney which allow your agent to make decisions regarding your health care needs. Your power of attorney can be broad in scope, giving your agent the ability to make any and all financial and personal decisions for you (a General Power of Attorney) or you can limit your agents authority by specifying the types of decisions you would like them to make on your behalf (a Limited Power of Attorney).

You also have a choice whether you would like your agent to have the ability to make decisions both now and if you become incompetent (a Durable Power of Attorney) or your agent can be limited to make decisions only when you become incompetent (a Springing Power of Attorney).

What is a Guardianship?

Guardianship is a legal relationship whereby the Probate Court gives a person (the guardian) the power to make personal decisions for another (the ward). A family member or friend initiates the proceedings by filing a petition in the Circuit Court in the county where the individual resides. A medical examination by a licensed physician is necessary to establish the condition of the individual. A Court of law then determines the individual is unable to meet the essential requirements for his or her health and safety and appoints a guardian to make personal decisions for the individual. Unless limited by the court, the guardian has the same rights, powers and duties over his ward as parents have over their minor children. The guardian is required to report to the court on an annual basis.

What is a Conservatorship?

A Conservatorship is a legal relationship whereby the Probate Court gives a person (the conservator) the power to make financial decisions for another (the protectee). The Court proceedings are very similar to those of a Guardianship except the Court of law determines an individual lacks the capacity to manage his or her financial affairs and appoints a conservator to make financial decisions for the individual. Often the court appoints the same person to act as both the guardian and conservator for the individual. Like the guardian, the conservator is required to report to the court on an annual basis.

The Differences

A power of attorney is a relatively low cost and private way to decide which family member or trusted friend will have the legal authority to carry out your wishes if you can no longer speak or act for yourself.

If you do not have a power of attorney or if your power of attorney is not drafted properly, and something happens that results in your inability to make decisions, your family/friends may later face court proceedings and court supervised Guardianship and/or Conservatorship. A court proceeding is not only costly, but the person appointed as your Guardian/Conservator may not be the person whom you would have chosen yourself. And, as stated above, not having a properly drafted power of attorney could significantly limit financial and/or Medicaid planning that could be done on behalf of the principle.

At the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates, we help people and their families concerned with losing their homes and life savings to increasing medical and nursing home costs, taxes and the costs and time delays of probate. We also protect clients from losing control of their own health and financial decisions.

Gain instant free online access to Seniors’ Guide to Health Care Reform & Avoiding Nursing Home Poverty, which contains information on how Massachusetts Seniors will be impacted by the Affordable Care Act, by clicking here

Click Here to Download the Senior & Boomers Guide to Health Care Reform & Avoiding  Nursing Home Poverty

We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at www.SeniorWorkshop.com.


 

Tags: power of attorney, Estate Planning, asset protection, Medicaid, Health Care, durable power of attorney, guardianship, conservatorship, Massachusetts, transfer of assets

Massachusetts Elder Law Attorney | Are You Caring for an Elderly Family Member or Friend?

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Tue, Sep 18, 2012

Millions of Americans are currently caring for an elderly family member or friend, without receiving compensation.caregiver, nursing home care

Depending on the circumstances, however, it may actually be beneficial for both parties to enter into a care contract wherein the caregiver accepts payment for the care they are providing their loved one and also formally assumes responsibility for that care.  

For loved ones still at home:

If the loved one you are caring for reaches a point where nursing home placement is the only option, all of their money will be considered available to pay for their care at the nursing home and they will not eligible for Medicaid assistance until all of their assets have been depleted. Certainly the care they were provided by you, while they remained in the community, is just as valuable to them and worthy of payment as that they will be provided in the nursing home. With a care contract in place, they can pay their caregiver, and every penny spent will count towards their “Medicaid spend down” should they apply for benefits.

It is important to note that without a proper contract in place, Medicaid will assume the money paid is a “gift” or a “transfer of assets” and will impose penalties resulting in ineligibility for Medicaid benefits.

While the personal care contracts may not be appropriate in everyone’s situation, if you are caring for your loved one at home or in a nursing home, it is something that you may want to discuss with a knowledgeable professional who can advise on possible tax consequences and/or Medicaid and estate planning issues.

To gain free online access to the Complete Alzheimer's Resource Kit, which contains care tips as well as other useful information on Alzheimer’s disease, please visit www.BostonMemoryLawyer.com

At the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates, we help people and their families concerned with losing their homes and life savings to increasing medical and nursing home costs, taxes and the costs and time delays of probate. We also protect clients from losing control of their own health and financial decisions.

We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at www.SeniorWorkshop.com

Tags: Elder Law, Medicaid, gifting, Nursing Home, caregiver, assets, transfer of assets, personal care contracts

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