Why an Attorney Should Help with a Medicaid Application

Seniors should consider medicaid asset protection planning as part of their estate plan.
Hiring an attorney to prepare a Medicaid application may save money in the long run and get your loved one the care they need.

Elder law attorneys can be very helpful when it is time to complete a Medicaid application, and they can save money in the long run, ensuring that you (or a loved one) get the best care. Instead of waiting to see how wrong the process can get, says The Middletown Press, it’s best to “Use a lawyer for Medicaid planning” right from the start. Here’s why.

Conflict of interests. When a nursing home refers a family to people for preparing the Medicaid application or offers to complete it themselves, very often the person has dual loyalties: to the nursing home who refers them the work (or signs their checks), and to the family who will pay them a fee for help with applying for benefits. Whose interests comes first?

Everyone wants the Medicaid application to be successful, but let’s be realistic. It’s in the nursing home’s best interest that the resident pays privately for as long as possible, before going on Medicaid. It’s in the resident or family member’s best interest to protect the family’s assets for care for the resident’s spouse or family.

An attorney has a duty of loyalty only to his client. He also has an ethical and professional responsibility to put her client’s needs ahead of her own.

Saving money is possible. Nursing homes in some areas cost as much as $15,000 a month, in Texas they tend to be cheaper, but still in the several thousands.  While every market and every law practice is different, it would be unusual for legal fees to cost more than a month in the facility. With an experienced attorney’s help, you might save more than her fee in long-term care and related costs.

Further, attorneys can find ways to complete a Medicaid application and successfully obtain benefits without simply spending all of your assets before applying.  Many times nursing home staff will offer to do the Medicaid application after the assets are nearly entirely spent.  A quality elder law attorney will find ways to complete and file a successful Medicaid application while protecting your legacy.

The benefit of experience. It’s all well and good to read through pages of online information (Google, Esq.), but nothing beats the years of experience that an attorney who practices in this area can bring provide.  Any professional in any field develops knowledge of the ins and outs of an area and applying for Medicaid is no different. Without experience, it’s hard to know how it all works.  See Mary’s blog for more detail about how an attorney helps with this process.  https://www.galliganmanning.com/when-you-need-an-elder-law-attorney/

Peace of mind from a reliable, reputable source. Consulting with an experienced attorney about a Medicaid application will help you avoid years of wondering, if there was more you could have done to help yourself or your loved one.

There are multiple opportunities for nursing home residents to preserve assets for themselves and spouses, children and grandchildren, particularly when a family member has long term care needs. However, here’s a key fact: if you wait for the last minute, there will be far less options than if you begin planning long before there’s a need for a Medicaid application.

Reference: The Middletown Press (July 29, 2019) “Use a lawyer for Medicaid planning”

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How Do Trusts Work in Your Estate Plan?
Trusts offer many benefits, so speak with your attorney on how to fit them in your estate plan.

How Do Trusts Work in Your Estate Plan?

Trusts offer many benefits including probate avoidance, tax and disability planning and protecting beneficiaries.
Trusts offer many benefits including probate avoidance, tax and disability planning and protecting beneficiaries.

Trusts can be useful tools for passing on assets, allowing them to be held by a responsible trustee for the benefit of the beneficiaries. However, determining which type of trust is best for each family’s situation and setting them up so they work with an estate plan can be complex. You’ll do better with the help of an estate planning attorney, says The Street in the article “How to Set Up a Trust Fund: What You Need to Know.”

There are lots of reasons to use trusts.  Many are used to avoid the time and difficulty involved with the probate process.  Others are used for estate tax planning and Medicaid planning.  Still others are used to pass financial assets to beneficiaries who might not be able to use them well or by themselves, such as with a disabled beneficiary, a beneficiary who wastes money or has creditors, or perhaps is struggling with addiction.  Many parents leave assets to their children in trusts so that the assets are excluded from their child’s potential divorce.  Trusts can even be used for your pets!  We have many blog posts on different reasons to use a trust, and here are a few:  https://www.galliganmanning.com/special-estate-planning-considerations-for-a-blended-family/ (blended families)  https://www.galliganmanning.com/do-you-need-a-pet-trust-in-your-estate-plan/ (pets) https://www.galliganmanning.com/some-common-estate-planning-mistakes-best-avoided/.    

If you are considering using a trust as part of your estate planning, you have to consider whether it will be revocable or irrevocable.  I’ll briefly describe both varieties.

Revocable Trusts are trusts that can be changed. They are often called Living Trusts.  This form of trust is typically used to avoid probate because assets properly owned or directed to the trust will not be probate assets.  Because of its flexibility, you can change beneficiaries, terminate it, or leave it as is. You have options, and it can change with you as your needs, wishes and plan change over time.  Once you die, the revocable trust becomes irrevocable and distributions and assets shift to the beneficiaries in the manner you chose. 

A revocable trust avoids probate for the assets it directs, but will be counted as part of your “estate” for estate tax purposes. They are includable in your estate, because you maintain control over them during your lifetime.  Under current law, very few people have an estate large enough to pay federal estate taxes, so having assets as part of your “estate” for estate tax purposes is actually a good thing.

Revocable Trusts are also used to help manage assets as you age, help you maintain control of assets if you don’t believe the trustees are ready to manage the funds, or to appoint other trustees in case you can no longer manage the assets yourself.

Irrevocable Trusts are called irrevocable because in theory you cannot change or revoke them.  However, most states have laws which permit revocation or change of irrevocable trusts in certain circumstances.  But, you should be careful about irrevocable trusts if you expect a need to change it in the future.

If estate taxes are a concern, it’s likely you’ll consider this type of trust. The assets are given to the trust, thus removing them from your taxable estate.  Irrevocable trusts of this type are less common than revocable trusts, but still can be a powerful weapon in your estate planning arsenal. 

These are just two of many different types of trusts. There are trusts set up for distributions to pay college expenses, providing for disabled individuals to preserve government benefits, charitable funds for philanthropic purposes, planning for pets after you are gone, leaving assets to a second spouse or children in a blended family and more.

Your estate planning attorney will be able to identify which types are most appropriate for your situation.  Here’s how to prepare for your meeting with an estate planning attorney when considering a trust:

Why do you want the Trust? Consider your goal.  Is it to avoid probate?  Is it for tax planning?  Is it because you know a beneficiary shouldn’t receive the assets but you still want to provide for them?

List beneficiaries. Include primary beneficiaries and have a plan for what happens when the primary beneficiary is deceased.

Map out the specifics. Who do you want to receive the assets? How much do you want to leave them? Why shouldn’t receive the assets immediately?  You should be as detailed as possible.

Choose a trustee. You’ll need to name someone who will respect your wishes, who understands your financial situation and who will be able to stand up to any beneficiaries who might not like how you’ve structured your plan. It can be a professional trustee as well.

Don’t forget to fund the it! This last step is very important. The trust does no good if it is not properly funded. You should speak with your estate planning attorney about how to fund the trust based upon the plan you selected.

Creating a trust can be a complex task. However, with the help of an experienced estate planning attorney, this strategy can yield a lifetime of benefits for you and your loved ones.

Reference: The Street (July 22, 2019) “How to Set Up a Trust Fund: What You Need to Know”

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How to Begin the Estate Planning Process

The estate planning process can be intimidating, but doesn’t have to be.  Start by listing your assets, who they go to and who to put in charge.

The hardest part of the estate planning process is  starting it.  About 17% of adults don’t think they  need  a will, believing that estate planning is only for  the very wealthy. In fact, clients frequently ask  whether they have enough money for an “estate.”    Sometimes they think state law will already directs their assets and they don’t need a plan.

However, the estate planning process is not about how much money someone has.  It is about planning for the assets you have, however much or little that may be, your wishes for those assets, yourself and your family.  It is about empowering you to make the choices you want for you and your family, not leaving it up to the state.  Even completing a few simple documents can make a huge difference in the future.

valuewalk.com’s recent article, “Couples: Here’s How To Start The Estate Planning Process” notes that although the estate planning  process can seem overwhelming, taking inventory of assets is a terrific place to start.

Make a list of all your assets, including confirming how they are titled and whether there are beneficiaries named on the accounts, as well as the general value of the assets. Then, decide who you want to leave these assets to and who should be in charge of the process.  Our firm uses questionnaires as part of the estate planning process to help gather this information so we can focus on the issues most important to you.  I also did a video segment on Kevin’s Korner that walks through some of these issues as well.  See this link for the video.  https://www.youtube.com/watch?v=B2M_-tBoSiU 

Drafting a will or a trust may be the most critical step in the estate planning process. These documents serve as the directions for how assets are to be distributed and who is responsible to do it.  A well-crafted will or trust can simplify the distribution of assets at your death, provide instructions to your family, and avoid disputes, unnecessary taxes and protect your beneficiaries from predators.

Without an estate plan in place, your assets will be distributed according to state law, rather than according to your wishes. Don’t assume state law leaves everything to your spouse!  Many people assume if they are married everything they own goes to their surviving spouse, but in many situations, that isn’t true.  For example, blended families, children outside of the marriage and some non-marital property.  Speak with your estate planning attorney about how these issues impact you.

Once you have an idea of your assets, beneficiaries and who to put in charge, the next step in the estate planning process is to meet with your estate planning attorney to review the information so they can make recommendations on the best way to accomplish your goals and highlight other issues to address.  Our firm offers free estate planning consultations, so please contact us today to start the estate planning process.

Reference: valuewalk.com (July 22, 2019) “Couples: Here’s How To Start The Estate Planning Process”

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