will or trust estate planning health care directives power of attorney

Estate Planning Tips During COVID-19

When it comes to COVID-19, there is so much that feels beyond our control.  With estate planning (wills or trusts and more), there are things that you CAN control. Here is a list of things you can do (from an estate planning perspective) that may help you feel a little more in control:

#1 During this COVID-19 crisis, who are your emergency health care decision makers?  

Talk to your loved ones about your wishes regarding your medical care. First, who would you want to step up to advocate for you during a health care crisis? The two parts of Health Care Directives are the Designation of Health Care Surrogate and Living Will. With the Designation of Health Care Surrogate, you nominate someone you trust to make health care decisions for you in the event that you are unable to communicate those decisions yourself. With a Living Will, you can include directions regarding end of life decisions, as well as other decisions about your care and treatment.

#2 Look for your HIPAA Authorization.

Your Health Care Directives should also include a HIPAA Authorization.  HIPAA Authorization language follows the requirements Health Insurance Portability and Accountability Act (HIPAA) to authorize your designated patient advocate to receive information about your health condition and status.  Without one in place, a hospital, medical office, or third-party medical provider may not be able to release medical records or other medical information to your designated patient advocate.

#3 Update or create a Durable Power of Attorney.

A Durable Power of Attorney for Finances lets you designate an Agent to access your assets and make financial decisions on your behalf. A Durable Power of Attorney’s scope can be as broad or as narrow you wish.  Some of the more common powers an Agent may need in emergency situations include handling financial transactions, dealing with bank accounts, transferring funds, paying bills, filing taxes, funding a trust, updating beneficiary designations, and addressing insurance claims.

Learn more about a power of attorney here.

#4 Review your Will or Trust

A Last Will & Testament and Revocable Living Trust Agreement address how you want your estate to be handled upon your passing. It is important to review your existing estate plan if your goals, family or financial situation has changed since you last had your estate plan prepared.  If you do not have a basic Will or Revocable Living Trust Agreement in place, now is a good time to begin the estate planning process. Because if you don’t do anything and you pass away, your family will be stuck with the state’s intestacy laws, which could result in distributions that are contrary to your wishes.

Learn more about Wills here.

Learn more about Trusts here.

How do you know if you need a Will or a Trust?

#5 Check your guardian designations for your minor children.

If you have minor children, you need to designate guardians. In Florida you can do this in your Will and in a separate document. Above all, if you don’t legally nominate guardians for your kids. Your family members could end up in court fighting over who gets to raise them (and control their inheritance).

#6 Check beneficiary designations and asset titling.

Life insurance, annuities and retirement plans pass according to their beneficiary designations, regardless of what your Will or Trust provides.  It is important to coordinate the beneficiary designations with the rest of your estate plan.  Make a list of your assets.  For example, do your accounts show a joint owner?  If you have a trust, does the account statement show the trust name?  Check the beneficiary designations for life insurance and retirement plans. If you need to update these, contact your financial advisor to get your beneficiary forms. If you’re not sure how your accounts fit in with your estate plan, contact your estate planning lawyer.

Avoid these common life insurance mistakes.

#7 Update your passwords list and digital information. This is part of your estate plan.

We live in a digital world!  First, create an inventory of your online accounts and digital files,. Second, note your login IDs and passwords. Remember to note the answers to any security questions and what type of two-factor authentication is in use.  Third, identify all of your devices. For example, make a list of your smartphones, tablets, smart speakers ( like Alexa), laptops, desktop computers. Also, note their passwords, along with the passwords for any important apps. Finally, inventory the other electronic records you use, own or control.

Here’s an article about password managers.

#8 What are your family financial needs?

The COVID-19 pandemic has hurt many families financially.  Therefore, you may want to make gifts or loans to family members.  The annual gift tax exclusion amount is currently $15,000 per person.  For loans to family, the IRS requires that you charge the Applicable Federal Rate (“AFR”). That rate is based on the length of the loan.  You should carefully document gifts and loans to avoid misunderstanding and confusion in the future.  Note that family gifts and loans may affect eligibility for Medicaid benefits.

#9  Remember that you’re not alone! Check in with the experts that you know for help.

There’s a ton of news about health care, finances, state and federal government orders.  Ask your professional advisors for help. We’re trained to sift through what’s important and applies to your situation. Finally, check in with your advisor team and ask for advice. We’re here to help.

revocable living trust avoid probate

How do you know if you need a Will or Trust?

Do you need a Will (Last Will and Testament) or Revocable Living Trust? How do you choose?

Are you interested in a will or revocable living trust? Wills and trusts are useful estate planning tools. They serve different purposes and can even work really well together. First, let’s go over key differences between wills and trusts.

Will characteristics:

  • A will goes into effect only after you die.
  • It only covers property that is in your name at your death.
  • A will passes through a court process called Probate. The Probate court oversees the will’s administration and ensures the will is valid and that the property gets distributed the way the deceased wanted.
  • Because a will passes through Probate, it’s a public record.
  • A will lets you name a guardian for your minor children.

There is a good chance that if you care about how beneficiaries use what you’re leaving them or want someone else to manage it, you’re going to need some type of trust.

The two main types of trusts are testamentary trusts and revocable living trusts. One type of trust is inside your will and the other type of trust is a stand-alone document, called a trust agreement.

Testamentary trust characteristics:

  • A testamentary trust is a trust that you create through your will. A will is only “activated” after you die and after your will goes through Probate. Therefore, a testamentary trust only goes into effect after your death.
  • For our clients with young children who are using a will instead of a revocable living trust, we recommend a testamentary trust inside the will.  That is because children can’t inherit directly while they are minors. And even if they’re not minors, it’s not a good idea to let an 18-year old inherit a lot of money at once!  With a testamentary trust, your trustee (the person you trust to manage money for your children) can provide for your children’s healthcare, education, maintenance and support while your children are minors.
  • You can include provisions in your trust to allow your beneficiaries to inherit at ages and stages, all at once, or for the funds to stay in the trust for that beneficiary’s care and support.
  • Funds that go inside the testamentary trust first have to go through the Probate court process before they wind up inside the trust.
  • The will (and the testamentary trust that’s inside it) is filed with the Probate court.

Revocable living trust characteristics:

  • A revocable living trust is a trust that you create during your lifetime. It is  “revocable” because during your lifetime, you can make changes to it or even revoke it.
  • You can use a trust to manage property during your lifetime, at your death or afterwards.
  • A trust covers only property that you transfer into it during your lifetime, or after your death (via beneficiary designations).
  • Property that passes through your trust avoids the Probate court process.
  • The revocable living trust stays private because it’s not filed with the Probate court.
  • You can include provisions in your trust to allow your beneficiaries to inherit at ages and stages, all at once, or for the funds to stay in the trust for that beneficiary’s care and support.

So if you have a revocable living trust, do you still need a Will?

Yes, you still need a will, a pour-over will. That is generally a very streamlined will that basically “pours” everything that needs to go through Probate to your revocable living trust. We also call this a “just-in-case” will, in case there is property you forget to transfer to your revocable living trust.

Also, if you have minor children, you can use your pour-over will to legally  nominate guardians for your children, in case you and their other parent dies when they are minors.

OK so do you need a will, will with testamentary trust provisions or a revocable living trust?

It depends on different factors and on your priorities such as:

  • Do you want to maintain privacy for your beneficiaries?
  • What is your budget for estate planning? (A revocable living trust costs more to set up than a will).
  • Do you want to avoid Probate?
  • Do you prefer everyone to stay out of Probate court as much as possible?

We can help you sort this out so that you can have peace of mind.

Call us at (813) 902-3189. Schedule a valuable Planning Session at no cost to you.

Learn more about wills, trusts and guardianships here.

You can also learn more about revocable living trusts here.

seniors-manage-finances-help

How can we help seniors manage their finances?

How can we help seniors manage their finances? With these tips, seniors can manage their finances better. And if they ever need help, they can shift their financial management to someone they can trust. 

1. Use direct deposit.

First, use direct deposit for income form pensions, annuities, and Social Security benefits. Not only will this save a trip to the bank, it also avoids the risk of a paper check being stolen, lost, or forgotten. 

2. Consolidate retirement accounts.

Consolidating retirement accounts into fewer accounts may make it easier to evaluate and manage savings, as well as to take any minimum distributions that are required.  Also, when moving money between retirement accounts, it’s a good idea to use a trustee-to-trustee transfer rather than moving the money yourself.

3. Consolidate financial accounts.

It can be a lot easier to manage your money when you have your money in fewer accounts at one bank. But make sure to consider the FDIC insurance limits on money held at one institution before consolidating. 

4. Pay bills automatically.

For recurring bills, have the biller automatically deduct payments from a credit card or bank account each month. 

5. Arrange for third-party notifications.

Arrange to have companies that provide critical services, such as electricity, send notices to you if they miss payments and the service is to be disconnected. Also,  ask the tax office to notify you if they miss tax payments and are in danger of losing their property. 

6. Get the proper legal documents in place.

Work with an estate planning attorney to get a power of attorney for finances in place. With this document, seniors can grant someone they trust the authority to manage their financial affairs if they reach a point of mental or physical inability to manage them on their own. 

Moreover, a revocable living trust is also a way to transfer control of finances. The successor trustee can manage trust assets when the senior is no longer able to manage them. 

Learn more about a Durable Power of Attorney here.

Learn more about Estate Planning here.

7. Find out whether your bank will honor the power of attorney.

Some banks may not honor a power of attorney unless it was created using forms provided by the bank or unless they run it by their legal department. Therefore, we suggest checking with the bank ahead of time. 

8. Prepare a financial overview.

An overview of their finances ready and waiting will make the process much easier. Consider making a list ahead of time that includes:

  • Information about their financial accounts, insurance policies, sources of income, regular bills and debts. 
  • The location of all of their estate planning documents, prior tax returns, birth and marriage certificates. 
  • The names and contact information of their financial and legal advisors. 

Store the financial overview in a secure place. Also, make sure  you can also access it if necessary. 

9. Get professional help. 

Hire a tax advisor to prepare tax returns and a financial advisor to manage investments.  Also consider hiring a daily money manager to handle financial tasks, such as paying bills, reviewing statements, and dispensing cash.  

Here are five things to know about aging and financial decline.

Call us at (813) 902-3189 to schedule a consultation.

freeze-credit-identity-theft-elder-abuse

How do you freeze your credit?

Are you a senior worried about identity theft? Or are you worried about a loved one with dementia becoming a victim of identity theft? Here are some tips on freezing someone’s credit. This is important if you’re trying to protect someone from elder abuse.

What does it mean to freeze credit?

A credit freeze restricts access to your credit report, making it harder for identity thieves to open new accounts in your name.

To place or lift a credit freeze, you must contact each credit bureau separately.

Once a credit freeze is in place, it secures your credit file until you lift the freeze. You can do that online, by phone, or by mail using the special PIN the companies give you when you do the credit freeze.  Once you place the credit freeze, it secures your credit file until you lift the freeze. You can unfreeze credit temporarily when you want to apply for new credit.

Does it cost anything to freeze credit?

No. Placing or lifting a credit freeze is free. Once a credit freeze is in place, it secures your credit file until you lift the freeze. You can unfreeze credit temporarily when you want to apply for new credit. Also, freezing your credit does not affect your credit score.

Should you freeze your credit?

If you’re not actively shopping for a credit card or loan, freezing your credit is wise. If you think someone compromised your data, consider a credit freeze. It’s especially important if someone stole your Social Security number. Identity theft among seniors is on the rise. So be vigilant about this issue.

Call us at (813) 902-3189 to schedule your consultation! We are happy to help you or your family.

Schedule your free 15 minute consultation.

Part 2: Use Estate Planning to Avoid Adult Guardianship and Elder Abuse

Part 2: Use Estate Planning to Avoid Adult Guardianship and Elder Abuse

In  Part 1 of this series, we discussed how some professional adult guardians have used their powers to abuse the seniors placed under their care. Here, we’ll discuss how seniors can use estate planning to avoid the potential abuse and other negative consequences of court-ordered guardianship.

As our senior population continues to expand, an increasing number of elder abuse cases involving professional guardians have made headlines. The New Yorker exposed one of the most shocking accounts of elder abuse by professional guardians, which took place in Nevada and saw more than 150 seniors swindled out of their life savings by a corrupt Las Vegas guardianship agency.

The Las Vegas case and others like it have shed light on a disturbing new phenomenon—individuals who seek guardianship to take control of the lives of vulnerable seniors and use their money and other assets for personal gain. Perhaps the scariest aspect of such abuse is that many seniors who fall prey to these unscrupulous guardians have loving and caring family members who are unable to protect them.

Keep your family out of court and out of conflict

Outside of the potential for abuse by professional guardians, if you become incapacitated and your family is forced into court seeking guardianship, your family is likely to endure a costly, drawn out, and emotionally taxing ordeal. Not only will the legal fees and court costs drain your estate and possibly delay your medical treatment, but if your loved ones disagree over who’s best suited to serve as your guardian, it could cause bitter conflict that could unnecessarily tear your family apart.

Furthermore, if your loved ones disagree over who should be your guardian, the court could decide that naming one of your relatives would be too disruptive to your family’s relationships and appoint a professional guardian instead—and as we’ve seen, this could open the door to potential abuse.

Planning for incapacity

The potential turmoil and expense, or even risk of abuse, from a court-ordered guardianship can be easily avoided through proactive estate planning. Upon your incapacity, an effective plan would give the individual, or individuals, of your choice immediate authority to make your medical, financial, and legal decisions, without the need for court intervention. What’s more, the plan can provide clear guidance about your wishes, so there’s no mistake about how these crucial decisions should be made during your incapacity.

There are a variety of planning tools available to grant this decision-making authority, but a will is not one of them. A will only goes into effect upon your death, and even then, it simply governs how your assets should be divided. Your incapacity plan should include a variety of planning tools, including some, or all, of the following:

  • Healthcare power of attorney: An advanced directive that grants an individual of your choice the immediate legal authority to make decisions about your medical treatment in the event of your incapacity.
  • Living will: An advanced directive that provides specific guidance about how your medical decisions should be made during your incapacity.
  • Durable financial power of attorney: A planning document that grants an individual of your choice the immediate authority to make decisions related to the management of your financial and legal interests.
  • Revocable living trust: A planning document that immediately transfers control of all assets held by the trust to a person of your choosing to be used for your benefit in the event of your incapacity. The trust can include legally binding instructions for how your care should be managed and even spell out specific conditions that must be met for you to be deemed incapacitated.
  • Family/friends meeting: Even more important than all of the documents we’ve listed here, the very best protection for you and the people you love is to ensure everyone is on the same page. As part of our planning process, we’ll walk the people impacted by your plan through a meeting that explains to them the plans you’ve made, why you’ve made them, and what to do when something happens to you.

It could be a good idea (though it’s not mandatory) to name different people for each of the roles in your planning documents. In this way, not only will you spread out the responsibility among multiple individuals, but you’ll ensure you have more than just one person invested in your care and supervision. In that case, it’s even more critical that everyone you’ve named understands the choices you’ve made, and why you have made them.

Don’t wait to put your plan in place

It’s vital to understand that these planning documents must be created well before you become incapacitated. You must be able to clearly express your wishes and consent in order for these planning strategies to be valid, as even slight levels of dementia or confusion could get them thrown out of court. It’s also important that you frequently review and update your estate documents due to changes in assets or relationships.

Retain control even if you lose control

To avoid the total loss of autonomy, family conflict, and potential for abuse that comes with a court-ordered adult guardianship, meet with us. While you can’t prevent your potential incapacity, you can use estate planning to ensure that you at least have some control over your how your life and assets will be managed if it ever does occur.

If you haven’t planned for your incapacity, schedule a Planning Session right away, so we can advise you about the proper planning vehicles to put in place. And if you already have an incapacity plan, we can review it to make sure it’s been properly set up, maintained, and updated.

Call our office today at (813) 902-3189 to schedule a Planning Session. Mention this article and learn how to get this $500 session at no charge. 

How Will The Coming Wealth Transfer Affect Your Family?

Whether it’s called “The Great Wealth Transfer,” “The Silver Tsunami,” or some other catchy-sounding name, it’s a fact that a tremendous amount of wealth will pass from aging Baby Boomers to younger generations in the next few decades. In fact, it’s said to be the largest transfer of inter-generational wealth in history.

Because no one knows exactly how long Boomers will live or how much money they’ll spend before they pass on, it’s impossible to accurately predict just how much wealth will be transferred. But studies suggest it’s somewhere between $30 and $50 trillion. Yes, that’s “trillion” with a “T.”

A blessing or a curse?

And while most are talking about the benefits this asset transfer might have for younger generations and the economy, few are talking about its potential negative ramifications. Yet there’s plenty of evidence suggesting that many people, especially younger generations, are woefully unprepared to handle such an inheritance.

An Ohio State University study found that one third of people who received an inheritance had a negative savings within two years of getting the money. Another study by The Williams Group found that inter-generational wealth transfers often become a source of tension and dispute among family members, and 70% of such transfers fail by the time they reach the second generation.

Whether you will be inheriting or passing on this wealth, it’s crucial to have a plan in place to reduce the potentially calamitous effects such transfers can lead to. Without proper estate planning, the money and other assets that get passed on can easily become more of a curse than a blessing.

Get proactive

There are several proactive measures you can take to help stave off the risks posed by the big wealth transfer. Beyond having a comprehensive estate plan, openly discussing your values and legacy with your loved ones can be a key way to ensure your planning strategies work exactly as you intended. Here’s what we suggest:

Create a plan

If you haven’t created your estate plan yet—and far too many people haven’t—it’s essential that you put a plan in place as soon as possible. It doesn’t matter how young you are or if you have a family yet, all adults over 18 should have some basic planning vehicles in place.

From there, be sure to regularly update your plan on an annual basis and immediately after major life events like marriage, births, deaths, inheritances, and divorce. We maintain a relationship with our clients long after your initial planning documents are signed, and our built-in systems and processes will ensure your plan is regularly reviewed and updated throughout your lifetime.

Discuss wealth with your family early and often

Don’t put off talking about wealth with your family until you’re in retirement or nearing death. Clearly communicate with your children and grandchildren what wealth means to you and how you’d like them to use the assets they inherit when you pass away.

When discussing wealth with your family members, focus on the values you want to instill, rather than what and how much they can expect to inherit. Let them know what values are most important to you, and try to mirror those values in your family life as much as possible. Whether it’s saving money, charitable giving, or community service, having your kids live your values while growing up is often the best way to ensure they carry them on once you’re gone.

Communicate your wealth’s purpose

Outside of clearly communicating your values, you should also discuss the specific purpose(s) you want your wealth to serve in your loved ones’ lives. You worked hard to build your family wealth, so you’ve more than earned the right to stipulate how it gets used and managed when you’re gone. Though you can create specific terms and conditions for your wealth’s future use in planning vehicles like a living trust, don’t make your loved ones wait until you’re dead to learn exactly what you want their inheritance used for.

If you want your wealth to be used to fund your children’s college education, provide the down payment on their first home, or invested for their retirement, tell them so. By discussing such things while you’re still around, you can ensure your loved ones know exactly why you made the planning decisions you did.

 Secure your wealth, your legacy, and your family’s future

Regardless of how much or how little wealth you plan to pass on—or stand to inherit—it’s vital that you take steps to make sure that wealth is protected and put to the best use possible.

Call our office today at (813) 902-3189 to schedule a  Planning Session and mention this article to find out how to get this $500 session at no charge.

Seniors and Student Loans

Seniors and Student Loans

The number of older Americans with student loan debt – either theirs or someone else’s — is growing. Sadly, learning how to deal with this debt is now a fact of life for many seniors heading into retirement.

According to by the Consumer Financial Protection Bureau, the number of older borrowers increased by at least 20 percent between 2012 and 2017. Some of these borrowers were borrowing for themselves, but the majority was borrowing for others. The study found that 73 percent of student loan borrowers age 60 and older borrowed for a child’s or grandchild’s education.

Before you co-sign a student loan for a child or grandchild, you need to understand your obligations.

The co-signer not only vouches for the loan recipient’s ability to pay back the loan, but is also personally responsible for repaying the loan if the recipient cannot pay. Because of this, you need to carefully consider the risk before taking on this responsibility. In some circumstances, it is possible to obtain a co-signer release from a loan after the loan recipient has made a few on-time payments. If you are a co-signer on a loan that has not defaulted, check with the lender about getting a release. You can also ask the lender for payment information to make sure the borrower is keeping up with the payments.

If the borrower defaulted and you are obliged to pay the loan back or you are the borrower yourself, you will need to manage your finances. Having to pay back student loan debt can lead to working longer, fewer retirement savings, delayed health care, and credit issues, among other things. If you are struggling to make payments, you can request a new repayment plan that has lower monthly payments. With a federal student loan, you have the option to make payments based on your income. To request an “income-driven repayment plan,” go to: https://studentloans.gov/myDirectLoan/index.action.

Defaulting on a student loan may affect your Social Security benefits.

If you have a private student loan, a debt collector cannot garnish your Social Security benefits to pay back the loan. In the case of federal student loans, the government can take 15 percent of your Social Security check as long as the remaining balance doesn’t drop below $750. There is no statute of limitations on student loan debt, so it doesn’t matter how long ago the debt occurred. If you do default on a federal loan, contact the U.S. Department of Education right away to see if you can arrange a new repayment plan.

What Happens After You Die?

If you die still owing debt on a federal student loan, the debt will be discharged and your spouse or other heirs will not have to repay the loan. If you have a private student loan, whether your spouse or estate will be liable to pay back the debt will depend on the individual loan. You should check with your lender to find out the discharge policies. Depending on the loan, the lender may try to collect from the estate or any co-signers. In a community property state (where all assets acquired during a marriage are considered owned by both spouses equally), the spouse may be liable for the debt (some community property states have exceptions for student loan debt).

For tips from the Consumer Financial Protection Bureau to help navigate problems with student loans, click here.

This article is a service of the Law Firm of Myrna Serrano Setty, P.A. We don’t just draft documents, we help you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Call our office today to schedule a Planning Session. Mention this article to learn how to get this $500 session at no charge. 

Call us at (813) 902-3189.

 

Can An Adult Child Be Liable for a Parent’s Nursing Home Bill?

Although a nursing home cannot require a child to be personally liable for their parent’s nursing home bill, there are circumstances in which children can end up having to pay.

This is a major reason why it is important to read any admission agreements carefully before signing.

Federal regulations prevent a nursing home from requiring a third party to be personally liable as a condition of admission. However, children of nursing home residents often sign the nursing home admission agreement as the “responsible party.” This is a confusing term and it isn’t always clear from the contract what it means.

Typically, the responsible party is agreeing to do everything in his or her power to make sure that the resident pays the nursing home from the resident’s funds.

If the resident runs out of funds, the responsible party may be required to apply for Medicaid on the resident’s behalf. If the responsible party doesn’t follow through on applying for Medicaid or provide the state with all the information needed to determine Medicaid eligibility, the nursing home may sue the responsible party for breach of contract. In addition, if a responsible party misuses a resident’s funds instead of paying the resident’s bill, the nursing home may also sue the responsible party. In both these circumstances, the responsible party may end up having to pay the nursing home out of his or her own funds.

In a case in New York, a son signed an admission agreement for his mother as the responsible party. After the mother died, the nursing home sued the son for breach of contract, arguing that he failed to apply for Medicaid or use his mother’s money to pay the nursing home and that he fraudulently transferred her money to himself. The court ruled that the son could be liable for breach of contract even though the admission agreement did not require the son to use his own funds to pay the nursing home. (Jewish Home Lifecare v. Ast, N.Y. Sup. Ct., New York Cty., No. 161001/14, July 17,2015).

Although it is against the law to require a child to sign an admission agreement as the person who guarantees payment, it is important to read the contract carefully because some nursing homes still have language in their contracts that violates the regulations. If possible, consult with your attorney before signing an admission agreement.

Another way children may be liable for a nursing home bill is through filial responsibility laws.

These laws obligate adult children to provide necessities like food, clothing, housing, and medical attention for their indigent parents. Filial responsibility laws have been rarely enforced, but as it has become more difficult to qualify for Medicaid, states are more likely to use them. Pennsylvania is one state that has used filial responsibility laws aggressively.

We recommend that your Health Care Directives explicitly lay down a financial liability shield for your agents.

This one provision can save great grief and money.

This article is a service of the Law Firm of Myrna Serrano Setty, P.A. We don’t just draft documents, we help you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Call our office today to schedule a Planning Session. Mention this article to learn how to get this $500 session at no charge. 

Call us at (813) 902-3189.

Fear of Losing Home to Medicaid Contributed to Elder Abuse Case

A California daughter and granddaughter’s fear of losing their home to Medicaid may have contributed to a severe case of elder abuse.

If they had consulted with an elder law attorney, they might have figured out a way to get their mother the care she needed and also protect their house.

Amanda Havens was sentenced to 17 years in prison for elder abuse after her grandmother, Dorothy Havens, was found neglected, with bedsores and open wounds, in the home they shared.  The grandmother died the day after being discovered by authorities.  Amanda’s mother, Kathryn Havens, who also lived with Dorothy, is awaiting trial for second-degree murder. According to an article in the Record Searchlight, a local publication, Amanda and Kathryn knew Dorothy needed full-time care, but they did not apply for Medicaid on her behalf due to a fear that Medicaid would “take” the house.

It is a common misconception that the state will immediately take a Medicaid recipient’s home.

Nursing home residents do not automatically have to sell their homes in order to qualify for Medicaid. In some states, the home will not be considered a countable asset for Medicaid eligibility purposes as long as the nursing home resident intends to return home. In other states, the nursing home resident must prove a likelihood of returning home. The state may place a lien on the home, which means that if the home is sold, the Medicaid recipient would have to pay back the state for the amount of the lien.

After a Medicaid recipient dies, the state may attempt to recover Medicaid payments from the recipient’s estate, which means the house would likely need to be sold.

But there are things Medicaid recipients and their families can do to protect the home.

A Medicaid applicant can transfer the house to the following individuals and still be eligible for Medicaid:

  • The applicant’s spouse
  • A child who is under age 21 or who is blind or disabled
  • Into a trust for the sole benefit of a disabled individual under age 65 (even if the trust is for the benefit of the Medicaid applicant, under certain circumstances)
  • A sibling who has lived in the home during the year preceding the applicant’s institutionalization and who already holds an equity interest in the home
  • A  “caretaker child” who is defined as a child of the applicant who lived in the house for at least two years prior to the applicant’s institutionalization and who during that period provided care that allowed the applicant to avoid a nursing home stay.

With advance planning, there are other ways to protect a house.

A life estate can let a Medicaid applicant continue to live in the home, but allows the property to pass outside of probate to the applicant’s beneficiaries. Certain trusts can also protect a house from estate recovery.

Don’t let a fear of Medicaid prevent you from getting your loved one the care they need. While the thought of losing a home is scary, there are things you can do to protect the house.

This article is a service of the Law Firm of Myrna Serrano Setty, P.A. We don’t just draft documents, we help you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Call our office today to schedule a Planning Session. Mention this article to learn how to get this $500 session at no charge. 

Call us at (813) 902-3189.