by Jerrold Bartholomew on February 14, 2009
Dying without a will, or intestate, means that your estate will be distributed according to the default provisions of state law. For a variety of reasons, this can make the administration of your estate take longer, cost more, and create divisions within a family. Why? Without an up to date will, it is easy for arguments to arise about your true intentions. Furthermore, simply going through the probate process will require payment of an inventory fee and compliance with state law regarding the administration of your estate. State procedures can often be cumbersome and time-consuming. Creating a will is a simple step toward taking responsibility for your affairs and reducing the turmoil that can result for your survivors from an unplanned estate.
by Jerrold Bartholomew on February 1, 2009
The Department of Human Services for the State of Michigan has announced new numbers for 2009. Every year the numbers concerning Medicaid eligibility for long-term care are adjusted to reflect increases in the cost of living.
The new community spouse resource allowance is a minimum of $21,912.00 and a maximum of $109,560.00. This number is important for married persons with a spouse in the nursing home. It determines how much in cash and otherwise non-exempt assets the spouse living in the community will have to spend down before qualifying for Medicaid.
The community spouse income allowance, which is the income that the community spouse can keep each month and not have to pay to the nursing home has been increased from a minimum of $1,750.00 to $2,739.00. The new utility allowance (which provides additional income protection for the community spouse above the minimum protected amount) is $550.00 per month. However, it is important to note that these numbers do not adjust until April of this year. [click to continue…]
by Jerrold Bartholomew on January 29, 2009
It is very common to hear annuities described as “Medicaid friendly.” Most people hearing the words “Medicaid friendly” would assume that assets placed in such an annuity will be protected from the cost of long term care and indeed, they may even be told so by an insurance professional or financial advisor. But under Michigan law, an annuity by itself does nothing to protect assets from the cost of long term care. In fact, without careful planning, simply investing in a Medicaid friendly annuity may result in the unnecessary loss of assets. Understanding why this is the case requires some understanding of estate planning, elder law, and annuities. But taking the time to understand these things can easily save tens if not hundreds of thousands of dollars. Moreover, understanding these points can help you to see why your estate plan must work in conjunction with your financial plans in order to receive the full benefit of an annuity.
Estate planning is traditionally thought of as the field of law concerning the distribution of assets at the time of one’s passing. Modern estate planning encompasses planning not only for distribution on death, but also planning for disability and asset protection. Planning for disability will greatly increase the likelihood of having something to pass on to heirs, while at the same time reducing stress and maximizing one’s own independence. But in order to effectively manage a one’s affairs through a period of disability, there must be a close relationship between the estate plan and the financial arrangement, including the types of investments used. [click to continue…]
by Jerrold Bartholomew on November 20, 2008
The Center for Medicare and Medicaid Services (CMS) has apparently rejected Michigan’s proposed estate recovery program. Michigan’s proposed legislation was unique not only for being last in the union to be enacted, but also for being exceptionally lenient. It is therefore reasonable to assume that Michigan will be required to enact a more aggressive approach to estate recovery.
This issue has been appealed by the state of Michigan with a hearing set for January. There will be much more to say on this issue as it develops.
by Jerrold Bartholomew on September 19, 2008
Many veterans are unaware of the Aid and Attendance Pension that is available to help them with their medical expenses, which include the cost of assisted living. Some veterans are simply unaware of this benefit. Others have been told that they do not qualify based on “having too much money.” It is important to understand the scope of the Aid and Attendance pension as a starting point. It is also important to realize that veterans who meet the service requirement and who have significant, reoccurring medical expenses can be eligible for this valuable and well-deserved benefit with proper estate planning.
The aid and attendance pension is available to veterans who served during a time of war. It is not necessary to have participated in combat, but simply to have been in the military during a time of war. In addition to the service requirement, it is also necessary to be medically eligible and to meet the income and asset test. [click to continue…]
by Jerrold Bartholomew on September 4, 2008
Many seniors receive group health insurance coverage from their spouse’s retirement plan. What many seniors don’t realize is that losing one’s spouse can also mean losing that group health insurance coverage. For seniors on a fixed income, the additional health insurance premium can be an unpleasant surprise. This article from AARP explains that there are several options when group health coverage is lost. First, check into COBRA coverage. It might be possible to extend the less expensive group policy that was available under your spouse’s employer. Second, your rights under HIPAA may allow you to continue coverage from one group policy to the next. Third, it may be that you belong to an organization of some kind that will allow you to get group coverage, such as a local chamber of commerce. If all else fails, you may need to get individual coverage. Be sure to check all of your options and to speak with an insurance agent that you trust.
The loss of group coverage for health insurance could have a significant impact on your cash-flow and monthly budgeting in retirement. Your estate plan should take into account the possible need for individual health coverage in the future and the anticipated costs of meeting that need.
by Jerrold Bartholomew on August 1, 2008
Question: I approached my local Veterans’ Administration office for information about the Aid and Attendance Pension. They told me I had too much money to receive the pension. But I have reoccurring medical expenses of more than $1,000.00 per month. Is there anything I can do?
Answer: This is a delicate situation. On the one hand, some estate planning could allow you to qualify for the Aid and Attendance Pension. On the other, you would be mistaken to think that qualification for the Aid and Attendance Pension alone is sufficient. You need to be planning ahead for Medicaid long-term care at the same time that you are qualifying for veterans’ benefits. [click to continue…]
by Jerrold Bartholomew on July 31, 2008
QUESTION: I have heard that you are allowed to keep some things and qualify for long-term care Medicaid. What are you allowed to keep?
ANSWER: It is true that some property may be exempt for purposes of Medicaid qualification. And indeed, converting non-exempt assets to exempt assets is one valuable method of spend down. The following items are generally exempt: [click to continue…]
by Jerrold Bartholomew on July 30, 2008
QUESTION: I am concerned about my parents. My dad just entered the nursing home. His care costs more $6,000.00 per month and my mother is almost out of savings. Does she have to sell the house (which is worth about $250,000.00) to pay for my dad’s care? And what about estate recovery? What is that?
ANSWER: Your mother does not have to sell the house and for now, it is safe as long as you follow the proper procedures to qualify for Medicaid. But there are still several concerns here.
First, most people needing nursing home care will end up receiving Medicaid assistance at some point. Many people make the mistake of thinking that they should just pay the nursing home each month without realizing that there are often estate planning options that can prevent the need for a full spend down. Seeing an elder law attorney during a nursing home spend down is a lot like seeing an accountant at tax time: there are a lot of deductions and exclusions that you would not otherwise know about that can cut your tax bill. An elder law attorney can help you minimize your nursing home bill in the same way. [click to continue…]
by Jerrold Bartholomew on July 15, 2008
Recent litigation over the estate of Martin Luther King, Jr. provides an illustration of problems that can develop in the administration of a trust or estate and an opportunity to discuss ways to avoid disputes in
estate and trust administration. In the case of the King family, Dexter King is president of the Estate of Martin Luther King, Jr. Corporation. This company controls the use of the image and property of the late Martin Luther King, Jr. Bernice King and Martin Luther King III have sued Dexter King, alleging that he obtained control of assets that were the property of the estate of Corretta Scott King. The lawsuit further alleges that Dexter has mishandled the property of the Estate of Martin Luther King, Jr. Corporation and that Dexter has refused to provide information to beneficiaries and shareholders regarding his activities. This litigation highlights several issues to consider in estate planning and administration.
First of all, it is not uncommon for there to be confusion over what exactly is estate property. What happens, for example, if Fred provides a $5,000.00 gift in his will to Joe and he also names Joe as a beneficiary on a savings account worth about $5,000.00? Should the savings account satisfy the gift in the will, or does Joe get an additional $5,000.00 from the estate? In the litigation over the King estates, there seems to have been confusion over what was part of Coretta Scott King’s estate (the probate assets) and what belonged to the Martin Luther King, Jr. Corporation (a non-probate asset). Any estate can be set up to avoid this kind of confusion and avoid misunderstandings between family members down the line by consolidating the estate to a trust.
A second issue presented in the King litigation involves the handling of personal property. Most wills give the personal representative direction to sell personal property and use the proceeds to pay estate obligations and make distributions to heirs. But in many cases, family members may disagree with the sale of personal property–either because the item has more sentimental value or, as in the case of Martin Luther King, Jr.’s estate, the property is very valuable and the sale price is subject to second-guessing. The reports have insinuated that Dexter King’s decision to sell substantial property of the corporation for $30 million may not have been supported by his siblings. There is also the possibility that the sale was below fair market value. Indeed, rather than sell at a public auction with Sotheby’s, and potentially obtain a better price, the corporation’s property was sold privately at the eleventh hour. Disposition of assets by public auction is clearly a safer route for fiduciaries. Beneficiaries who believe the property more valuable than the asking price have the opportunity to purchase the property themselves and obtain that better price. [click to continue…]
