Mar
04
2013
0

Protect Your Home From a Medi-Cal Lien With a Reserved Life Estate

Medi-Cal can pay for your stay in a skilled nursing facility if you qualify. Under the state’s regulations, your home can be confirmed as an exempt asset in the Medi-Cal application. This means that you can keep your home, if you are otherwise qualified, and still receive Medi-Cal. This is true whether you are single or married. The concept is that you should not have to lose your home in order to receive this public benefit.

 The problem is that the state will want to recoup the payments it has made to the nursing home for your benefit, when you die. If your home is in your estate when you die, the state will put a lien on your home for the amount it has paid to the nursing home on your behalf. If the state has paid out $150,000 for you, they will put a lien on your home for that amount. When you die and your estate is settled, the state will be satisfied first for their lien of $150,000, and your beneficiaries will receive what is left. The state will not pursue a lien against a surviving spouse who still owns the home, but when she dies, the state’s lien will attach to the home and the state will recoup their payments at that time. 

There is a legal technique which is permitted under the regulations, which will allow you to protect your home against a Medi-Cal lien. It is called a “reserved life estate,” and your elder law attorney or senior law attorney can advise you in this regard. If the Medi-Cal applicant owns a home, we can transfer her interest in the home to her spouse, or to her children, for instance. A life estate in the home is reserved on the deed in favor of the Medi-Cal applicant. This means that the applicant owns the home for the rest of her life, and that her spouse or children own the remainder interest. The applicant is entitled to rents, issues and profits derived from the real estate. These interests are confirmed on the county record. When the Medi-Cal applicant dies, the home is not in her estate because her life interest disappears at the time of her death by operation of law, and her spouse or her children then receive the full interest in the property. Elder law planning and asset protection planning can be further pursued for the surviving spouse with your elder law attorney, to likewise protect her interest in the home.

Although under real estate law the home is not in the Medi-Cal applicant’s estate when she dies, so that a Medi-Cal lien cannot attach to the home, another benefit in using this technique is that under the IRS regulations, the reserved life estate interest should be recognized as keeping enough interest in her home in her estate, so that there should be a “step-up in basis” for capital gains purposes at the time of her death.  

If you have lost mental capacity at the time we would like to make a transfer of your interest in your home and reserve a life estate in your favor, we will need to look at the language and powers in your revocable living trust and financial durable power of attorney. If the powers are not there, and they usually are not, you may have to pursue a court petition through an elder law attorney who is familiar with this area of the law, in order to reform your documents to allow for this transfer. Most revocable living trusts and financial durable powers of attorney do not contain this favorable language. As a result people who are “baby boomer” age or older should consider getting their “Ducks In A Row” and have their elder law attorney or senior law attorney create an elder care plan for them, which will include estate planning documents with this favorable, asset protection language. An elder law attorney who is familiar with Medi-Cal qualification can certainly help you in this regard. Michael J. Young is an elder law attorney who practices in Walnut Creek, CA.

Written Michael J. Young, elder law attorney, Medi-Cal attorney, senior law attorney and probate attorney in Walnut Creek, CA and former in-house counsel for title insurance companies. He is Medi-Cal attorney and is VA Certified.  www.WalnutCreekElderLaw.com LawYoung1@Gmail.com 1931 San Miguel Dr., Suite 220, Walnut Creek, CA 94596. 925-256-0298. Mr. Young serves Contra Costa and Alameda Counties, including the cities of Walnut Creek, Alamo, Danville, Concord, Brentwood, Pleasant Hill, Antioch, Clayton, etc. Mr. Young advises clients regarding Probates, Probates with Real Estate, Medi-Cal, nursing homes, asset protection, the VA Aid and attendance pension benefit, and long term care planning. Mr. Young is an Elder Law Attorney and Probate Attorney with offices in Walnut Creek, CA. Walnut Creek Elder Law Attorney, Walnut Creek Probate Attorney. Senior Law Attorney

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Jan
07
2013
0

BEWARE OF SCAMMERS WHO PREY ON SENIORS

Scammers are consistently targeting older people. An older client of ours in Walnut Creek called us to ask how she could be taken to the airport so that she could give a courier $2,500 for a service fee. The service fee was apparently to ensure that she would receive $25,000 that she was told she won in a contest. Our client said that she had made the check out and was ready to have it delivered, and that it had to be delivered no later than 3:00 p.m. that afternoon. We instructed our client to do nothing. We followed up by calling the person back who called her. It was an obvious scam, and we contacted the FBI.

Another client told us that she received an e-mail, purportedly from her grandson, stating that he was in Europe and needed money wired to him right away. The e-mail stated that the grandson had been robbed, had no money, and was living in the street waiting for the money to be wired to him. This was a ridiculous story and an obvious scam Please do not respond to e-mails like these or click their links.

In another case, a man who was almost 90 years old and who was suffering from some dementia, was the victim of a scam involving time shares. An unscrupulous salesman sold the senior a number of time shares, which the older person would never be able to use. Fortunately, the timeshare contracts were reversed by his daughter, but not without a lot of time and effort.

These stories are very disheartening to me, as an Elder Law Attorney in Walnut Creek, who for many years has endeavored to help seniors keep what they have earned. We do this through the preparation of asset protection plans, revocable living trusts, powers of attorney and wills, and assistance with applications for Medi-Cal and the VA Aid and attendance Pension Benefit.

Written Michael J. Young, elder law attorney and probate attorney in Walnut Creek, CA and former in-house counsel for title insurance companies. www.WalnutCreekElderLaw.com LawYoung1@Gmail.com 1931 San Miguel Dr., Suite 220, Walnut Creek, CA 94596. 925-256-0298. Mr. Young serves Contra Costa and Alameda Counties, including the cities of Walnut Creek, Alamo, Danville, Concord, Brentwood, Pleasant Hill, Antioch, Clayton, etc. Mr. Young advises clients regarding Probates, Probates with Real Estate, Medi-Cal, nursing homes, asset protection, the VA Aid and attendance pension benefit, and long term care planning. Mr. Young is an Elder Law Attorney and Probate Attorney with offices in Walnut Creek, CA. Walnut Creek Elder Law Attorney, Walnut Creek Probate Attorney.

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May
31
2012
0

Probates with Real Estate –

PROBATE is a court proceeding that is used to distribute your assets to your beneficiaries at the time of your death. Probates are complex, and require that numerous forms and regulations be followed, before the court will sign an order distributing your assets to your beneficiaries or heirs. 

A probate with regard to your home and other real estate assets can usually be avoided with the use of revocable living trusts. To do this, title to your home would be transfered on the County Record from yourself, to yourself as trustee under your revocable living trust. For instance, the deed would be from John Doe to John Doe as Trustee of the John Doe Revocable Living Trust dated January 15, 2012. The terms of the trust will state who the home will be distributed to after you die, and this transfer can be completed on the County Record without a probate. 

However, not everybody passes away with their home in a revocable living trust. There are many occasions where individuals will pass away with their home in their name alone, and they may or may not have a will. A probate will probably be required whether they have a will or not. The terms of the will determine who the beneficiaries of the home will be. If there is no will, the home will be distributed to the “heirs at law” of the decedent.

With regard to real estate, a probate is required to clear the title so that the property can be distributed to the beneficiaries or heirs of the decedent, or so that the property can be sold and the proceeds of sale distributed to the beneficiaries or heirs. Clients will ask me why a probate would be required if the decedent has a will naming somebody as a beneficiary. To find the answer to this, we first need to first look at the County Record to see who the record owner is for the home. The last deed of record could be in the name of John Doe. John Doe is now deceased, so who can sign a deed from John Doe to his beneficiary? The answer is no one, which is why a court order would be required.

Written Michael J. Young, elder law attorney and probate attorney in Walnut Creek, CA and former in-house counsel for title insurance companies. www.WalnutCreekElderLaw.com LawYoung1@Gmail.com 1931 San Miguel Dr., Suite 220, Walnut Creek, CA 94596. 925-256-0298. Mr. Young serves Contra Costa and Alameda Counties, including the cities of Walnut Creek, Alamo, Danville, Concord, Brentwood, Pleasant Hill, Antioch, Clayton, etc. Mr. Young advises clients regarding Probates, Probates with Real Estate, Medi-Cal, nursing homes, asset protection, the VA Aid and attendance pension benefit, and long term care planning. Mr. Young is an Elder Law Attorney and Probate Attorney with offices in Walnut Creek, CA. Walnut Creek Elder Law Attorney, Walnut Creek Probate Attorney

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Apr
19
2012
0

The Importance of an “Elder Law” Durable Power of Attorney

     Does your Financial Durable Power of Attorney (financial DPA) contain asset protection and government benefits qualification language? It probably does not, unless it was prepared by an elder law attorney. If you lose mental capacity, your spouse or children may be prevented from gifting your assets to themselves, in order to help you qualify for Medi-Cal or for the VA Aid & Attendance Pension benefit.

If your financial DPA contains any gifting language at all, it is probably limited to the annual gift tax exclusion amount, which is $13,000 per person this year. This language is usually of little help for Medi-Cal qualification. In addition, the language will probably not allow for gifting to the ”attorney in fact”, who is the person acting for you.  Specialized language is required under the law in order to allow for any gifting to the person acting as the “attorney in fact.” This specialized language usually does not appear in a “regular” financial durable power of attorney.

For instance, the home can easily be established as an exempt asset for Medi-Cal qualification. If the home is in the name of the Medi-Cal applicant who has lost mental capacity, and we want to transfer the home to a child and reserve a life estate to the applicant in order to avoid a Medi-Cal lien, most financial durable powers of attorney will not allow for this. Most financial durable powers of attorney will allow a transfer only upon receipt of consideration from a sale for fair market value of the real property.

To give another example, the Medi-Cal applicant, under the regulations, is allowed to own a life insurance policy, with a pay on death figure in any amount. However, in order to qualify for Medi-Cal, the applicant’s life insurance policy cannot have more than $1500 cash value. If there is a $5,000 cash value, for instance, the Medi-Cal applicant cannot qualify. The remedy is to liquidate the cash from the policy and then gift it out. What do you do however if the Medi-Cal applicant has lost capacity? We need to then look at the powers in the financial durable power of attorney. However, although most financial DPAs may allow for a liquidation of the cash value, they will not allow you to gift the cash out. The Medi-Cal applicant can only retain $2,000 in non qualified accounts, and if the cash from the policy cannot be gifted, it would have to be spent before qualification for Medi-Cal can be obtained.

The financial DPA in an elder law context, is also coordinated with the revocable living trust of the applicant. There should be specialized asset protection language in the trust, which refers to the financial DPA. This specialized language will allow the attorney in fact to “stand in the shoes” of the maker of the trust, for all purposes, including for Medi-Cal qualification. This technique is allowed by law, and provides the greatest amount of flexibility for the family who is helping the older person who has lost capacity, when we are applying for Medi-Cal.

Remember that if existing estate planning documents are not updated before the older person loses capacity, we may have to resort to a court proceeding to modify the language in the documents. This process is expensive and is not always guaranteed. The best approach is to pre-planning, and to have your estate planning documents updated as early as possible by a qualified elder law attorney, who practices full time in this area of the law. 

Written Michael J. Young, elder law attorney in Walnut Creek, CA. www.WalnutCreekElderLaw.com mike@WalnutCreekElderLaw.com. 1931 San Miguel Dr., Suite 220, Walnut Creek, CA 94596. 925-256-0298. Mr. Young serves Contra Costa and Alameda Counties, including the cities of Walnut Creek, Alamo, Danville, Concord, Brentwood, Pleasant Hill, Antioch, Clayton, etc. Mr. Young advises clients regarding Medi-Cal, nursing homes, asset protection, the VA Aid and attendance pension benefit, and long term care planning. Mr. Young is a Concord Elder Law Attorney with offices in Walnut Creek, CA.

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Sep
26
2011
0

Antioch Elder Law Attorney

Elder Law Attorney Michael J. Young practices in the areas of long term care planning, asset protection, government benefits planning and estate planning for the older client in Antioch and the surrounding areas. Mr. Young holds workshops regarding these topics on a regular basis. He is the author of the The Alzheimer’s Legal Survival Kit and The Nuts and Bolts Guide to Veteran’s Benefits. These and other publications and information regarding upcoming workshops are available through Mr. Young’s website at http://www.WalnutCreekElderLaw.com.

Many of Mr. Young’s clients live in Antioch and wish to engage an elder law attorney to help them do their long term care planning for asset protection and government benefits planning such as for the VA Aid & Attendance Pension Benefit and Medi-Cal.

Medi-Cal pays for skilled nursing facility costs. The VA Aid & Attendance Improved Pension Benefit can help pay for in home care, assisted living facilities and the costs of board and care. If you are a wartime veteran, or the surviving spouse of a wartime veteran, over the age of 65 and may be in need of help with activities of daily living, you may want to plan for this little known benefit.

Planning for asset protection, Medi-Cal and the VA Aid & Attendance Pension Benefit usually begins with updating the estate planning documents, such as the revocable living trust and financial durable powers of attorney to include specialized planning language. The focus for this type of planning changes for the older client, to help make our assets last longer, and to create more options. An elder law attorney can help you with this important perspective. We don’t want to run out of money or options as we grow older. The focus on long term care planning changes from “What happens when we die” to “What happens if we don’t die.”

Mr. Young offers a free telephone consultation, and you may contact his office at 925-256-0298, and visit his website at www.WalnutCreekElderLaw.com.

This information is not to be taken as legal advice, and you are encouraged to see an elder law attorney or senior law attorney for your particular situation. 

Written Michael J. Young, lawyoung1@gmail.com, elder law attorney with offices in Walnut Creek, CA. www.WalnutCreekElderLaw.com 1931 San Miguel Dr., Suite 220, Walnut Creek, CA 94596. 925-256-0298. Mr. Young serves Contra Costa and Alameda Counties, including the cities of Walnut Creek, Alamo, Danville, Concord, Brentwood, Pleasant Hill, Antioch, Clayton, etc.

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