Elder Law is the planning needed for the complex health care, long-term care, and many other issues facing elderly and disabled individuals and their families. Studies show that we stand a 40 percent chance of needing long-term care at least once before we die. Therefore, everyone should take into account that at some point, residency in a nursing home or an assisted living facility may be reality. How to pay for the care is a very serious matter. Caring for the elderly and ensuring their assets will be protected, are some of the primary services offered by our network of Elder Law Attorneys.

The overwhelming cost of nursing home care for an incapacitated person can wipe away a family’s assets for generations. The inheritance planned for surviving family members could all disappear. The primary alternative to privately paying the nursing home is Medicaid.

Medicaid Asset Protection Strategies

The recent passage of the Deficit Reduction Act, has imposed several restrictions which prevent people from protecting or hiding their assets. However, for married couples where one spouse requires long-term care, there some techniques and other asset protection strategies that remain viable. Some of these techniques may include setting up an Irrevocable Living Trust, making gifts to family members, and paying for certain Medicaid expenses.

Did you prepare a will?

Do you have a living will or Medical Directive?

Does your family and significant others know where to find them?

A will is legal written document which gives direction over the disposition of property at death. The laws of each state are different. However, most jurisdictions require the following formal requirements for a will to be legal.

You, the maker of the will (called the testator), must be at least 18 years old.
You must be of sound mind at the time you sign your will.
Your will must be written.
Your will must be witnessed (and notarized) in the special manner provided by law for wills.
It is necessary to follow exactly the formalities required for the execution of a will.
To be effective, your will must be proved in and allowed by the probate court.

No will becomes final until the death of the testator, and it may be changed or added to by the testator by drawing a new will or by adding a “codicil,” which is simply an addition or amendment executed with the same formalities of a will. A will’s terms cannot be changed by writing something in or crossing something out after the will is executed. In fact, writing on the will after its execution may invalidate part of the will or all of it. If you want to change something in the will, it is probably better to consult an attorney to make sure your true wishes are carried out properly.

WHAT CAN BE ACCOMPLISHED BY A WILL?

You decide who gets your property instead of the law making the choice for you.
You may name the personal representative (executor) of your will as you choose, provided the one named can qualify under the law in your jurisdiction. A personal representative is one who manages an estate and may be either an individual, a bank or trust company, and is subject to certain limitations.
A trust may be created in a will whereby the estate or a portion of the estate will be kept intact with income distributed or accumulated for the benefit of members of the family or others. Minors can be cared for without the expense of proceedings for guardianship of property.
Real estate and other assets may be sold without court proceedings, if your will adequately authorizes it.
You may make gifts, effective at or after your death, to charity.
You decide who bears any tax burden, rather than the law making that decision.
A guardian may be named for minor children.

WHAT IS A GUARDIANSHIP?

A guardianship is a legal proceeding where a guardian is appointed to exercise the legal rights of an incapacitated person.

WHAT IS A GUARDIAN?

A guardian is an individual or institution such as a bank trust department appointed by the court to care for an incapacitated person-called a “ward”-or for the ward’s assets.

HOW IS A PERSON DETERMINED TO BE INCAPACITATED?

Any adult may file a court petition to determine another person’s incapacity. The document must include a certification setting forth the factual information upon which they base their belief that the person is incapacitated. The court will then appoint a committee of two professionals, usually physicians, and a lay person to examine the person and report its findings to the court. The court also appoints an attorney to represent the person alleged to be incapacitated. If the examining committee concludes that the alleged incapacitated person is not incapacitated in any way, the court will dismiss the petition. If the examining committee finds the person to be incapable of exercising certain rights, the court schedules a hearing to determine whether the person is totally or partially incapacitated. If necessary, a guardian will be appointed at the end of the incapacity hearing.

WHO MAY SERVE AS GUARDIAN?

Any competent adult can serve as a guardian. However, people who have been convicted of a felony or who are incapable of carrying out the duties of a guardian usually cannot be appointed. Often, a bank’s trust department, a nonprofit religious or charitable corporation, or a public guardian can be appointed as a guardian, but a bank trust department may only act as guardian of the property, not on the medical issues. The court gives consideration to the wishes expressed by the incapacitated person in a written declaration of preneed guardian or at the hearing. In these situations, the significance of the living will becomes all too obvious. Everyone needs a living will.

WHAT DOES A GUARDIAN DO?

A guardian is given authority over any of the incapacitated person’s property. First they take an inventory of the property. They will invest it and use the proceeds for the incapacitated persons support. The Guardian must account for the inventory and any proceeds by filing detailed annual reports with the court. In addition, the guardian must obtain court approval for certain financial transactions.

The guardian of the ward’s person may exercise those rights that have been removed from the ward and delegated to the guardian, such as providing medical, mental and personal care services and determining the place and kind of residential setting best suited for the ward. The guardian of the person must also present to the court every year a detailed plan for the ward’s care.

Whether you are facing long-term care issues yourself or you have a family member who is, we encourage you to contact an attorney today. Be sure to call sooner rather than later because the timing of the decisions that families need to make has a dramatic impact on whether or not someone can actually qualify for this type of support.

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