May
12
2016
0

The New Transfer On Death Deed (TOD)

On January 1, 2016, a new California law became effective which creates a Revocable Transfer on Death Deed. (“TOD Deed”). The deed is designed to transfer residential property to named beneficiaries upon the death of the grantor. There is no transfer of title during the life of the grantor. The legislative purpose of the TOD Deed was to hopefully create an inexpensive way to transfer property, without the use of revocable living trusts, and without subjecting the title to probate.

Please be sure to contact your attorney before you use such a deed, as there are definite downsides to the use of the TOD. One big downside is that there is a three year statute of limitations which allows secured and unsecured liens to attach to the title of the home after the death of the grantor. As a result, the title will become uninsurable by title insurance companies for three years from the date of death of the grantor. So for instance, if the home passes from mother to son on July 1, 2016, a transfer of the home or a loan on the home from the son will be uninsurable until July 1, 2019. In California, lenders and purchasers almost always require title insurance to insure a title transfer and to insure a loan. The practical result may be that the son will not be able to sell the home or put a loan on it for the three year statutory period.

We do Medi-Cal and asset protection planning in our firm. If the home is in the estate of the Medi-Cal applicant at the time of his or her death, the State will pursue a lien against the property for the amount they have paid to the nursing home for the Medi-Cal applicant.  By using the TOD deed, Medi-Cal will be able to attach a lien to the subject real property, because it was in the estate of Medi-Cal applicant upon death. As a result, the use of the TOD is inappropriate for long term care and asset protection planning.  Your elder law attorney will advise you of the available techniques under the regulations to properly protect the home from a Medi-Cal lien.

If your grantee does not intend to sell the property or take a loan out on the property for three years from your death, and if you as the grantor are not concerned about Medi-Cal recovery against the home, then the TOD deed may be appropriate. Please be aware also that a class description of beneficiaries such as “children” cannot be created on the TOD deed. If a named beneficiary predeceases the grantor, and there are no other specifically named beneficiaries who take title immediately and jointly, a probate of the home will be required.

As a result of all of the above, it would appear to this elder law attorney with some 39 years of experience, that the use of TOD deed may very well be “penny wide and pound foolish.”

This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the Law Offices of Michael J. Young, at 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA www.WalnutCreekElderLaw, 925-256-0298, lawyoung1@gmail.com we practice Elder Law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with long-term care planning, asset-protection plans, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.

Feb
29
2016
0

Do-It-Yourself Estate Plans

If you do an on-line search, you will immediately find websites that will help you create estate planning documents like revocable living trusts and wills. The selling point of these websites is that you will save on legal fees. Accordingly, you do not receive legal representation from these web sites. But, are you being “penny wise and pound foolish” by creating your own on-line estate plan?

In our firm, we do long term care planning and asset protection for the older client. Some of the legal documents that are included in the long term care plan are also revocable living trusts and wills. However, the provisions and language in the documents created by an elder law attorney are quite different from what you will find on line. The documents created by an elder law attorney include mechanisms for asset protection and long term care planning for your care, which can be implemented when needed. As my mother once told me, she wanted a plan that would be effective if she did not die, and became ill along the way.

In California, we have Medi-Cal which will pay for an extended stay in a skilled nursing facility, provided that you have your ducks in a row. There are regulations and codes which you can take advantage of for asset protection and qualification for Medi-Cal. In a properly drafted long term care plan, if you lose mental capacity or otherwise become incapable of handling your own affairs, your fiduciary will be able to take advantage of these codes and Medi-Cal regulations for asset protection and qualification for Medi-Cal. Without a properly drafted long term care plan, you may be required to spend down your assets first, in order to qualify for Medi-Cal. In addition, your home may be left exposed to a Medi-Cal lien for reimbursement to the state after you die. As a result, you may be required to prematurely spend all of your assets to create qualification for Medi-Cal. In addition, you may end up leaving nothing for your family when you die.

Long term care planning is as much for your loved ones as it is for yourself.  It is your loved ones who will have to deal with the consequences of your decisions during your life, and after you die. No website that I have observed is capable of giving tailored legal advice for asset protection and long term care planning that can help clients save tens of thousands and in some cases hundreds of thousands of dollars. The old adage, “you get what you pay for,” still holds true.

This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the Law Offices of Michael J. Young, at 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA www.WalnutCreekElderLaw, 925-256-0298, lawyoung1@gmail.com we practice Elder Law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with long-term care planning, asset-protection plans, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.

Feb
19
2016
0

How Does Medi-Cal Treat Joint Accounts?

All assets in the name of the Medi-Cal applicant are reported when qualifying for Medi-Cal. The home is reported, but can usually be confirmed as an exempt asset for qualification. So- called Qualified assets such as IRA’s are reported, but are but are also usually confirmed as exempt for qualification. The applicant can then not have more than $2,000 in non-exempt assets in his or her name.

If the applicant’s name is on an account with another person, Medi-Cal will count the entire amount as being in the name of the applicant. For instance, if you maintain a joint bank account in the amount of $15,000 with your mother in order to avoid probate when you die, and your mother applies for Medi-Cal, the $15,000 will be counted as belonging to your mother. Your mother would be ineligible for Medi-Cal because she cannot have more than $2,000 of non-exempt assets in her name.

This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the Law Offices of Michael J. Young, at 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA www.WalnutCreekElderLaw, 925-256-0298, lawyoung1@gmail.com we practice Elder Law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with long-term care planning, asset-protection plans, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.

Feb
01
2016
0

How Much Does The Surviving Spouse Receive In Social Security Benefits?

In a previous post, we discussed what you should do about Social Security benefits after someone dies. But with regard to married couples, how much will the surviving spouse receive? Generally speaking, the surviving spouse will receive 100% of the deceased spouse’s Social Security benefit, as long as that amount is greater than the surviving spouse’s benefit.  As a result, the surviving spouse will continue to receive either his or her own benefit, or the deceased spouse’s benefit, whichever is greater. But, the surviving spouse will not receive both benefits.  A one-time death benefit payment of $255 will also be paid to the surviving spouse by Social Security.

Another requirement is that the surviving spouse must be age 60 or older. The surviving spouse can also be 50 or older provided that he or she is disabled from a disability that began no later than 7 years after the deceased spouse’s death. The surviving spouse must also have been married to the deceased spouse for at least 9 months, and not be currently remarried where the marriage occurred before he/she turned age 60.

An ex-spouse may also collect survivor benefits under certain circumstances.  The ex-spouse must have been married to the deceased ex-spouse at least 10 years.  The age 60 or age 50 with a disability requirements as discussed above, are the same as the married surviving spouse.  Also, the ex-spouse must not be remarried in a marriage that occurred before age 60. Be sure to contact Social Security with regard to your specific case. An in-person meeting at the Social Security office is the best way for you to proceed.

This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the Law Offices of Michael J. Young, at 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA www.WalnutCreekElderLaw, 925-256-0298, lawyoung1@gmail.com we practice Elder Law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with long-term care planning, asset-protection plans, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.

Jun
22
2015
0

You Can Self-Insure For Your Long Term Care

Through our elder law firm, you can explore the possibility of self-insuring for your long term care, using what are referred to as “legacy assets.” Your portfolio may contain assets that you are not presently relying upon for your support, and that you keeping for a “rainy day.”  In the back of your mind, the rainy day may be when you might need these assets for your long term care. If you don’t use these assets, they will pass to your children, or to your named beneficiaries when you die. Sometimes taxes will be due.

A good planning approach to consider is transferring a portion of these legacy assets to a specially designed life insurance policy with a long term care rider. The asset which is repositioned, now earns interest, and when you die, the asset passes to your spouse or to your loved ones, usually tax free. If you need long term care during your life, you can utilize the rider, which “prepays” the death benefit to you, as you may need it for your care. You may need to utilize the rider to pay for in home care, an assisted living facility, board and care or a nursing home.  With traditional long term care insurance, “if you don’t use it, you may lose it”.

Under the Federal Pension Relief Act, you may be able to transfer appreciated assets into such a product without paying capital gains. In addition, you may be able to transfer qualified funds, such as IRA’s and 401k’s, using a trustee to trustee transfer, without incurring a penalty.

At our firm, we can take a “snapshot” of your legacy assets, and present the snapshot to our associated financial company. They will then make a recommendation for such a product which we can present to you.

For additional information please feel free to contact our office.

This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the Law Offices of Michael J. Young, at 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA www.WalnutCreekElderLaw, 925-256-0298, lawyoung1@gmail.com we practice Elder Law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with long-term care planning, asset-protection plans, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.

Apr
09
2015
0

Medi-Cal Covers “Skilled Nursing Facilities”

It seems that many people are under the assumption that Medi-Cal pays for all kinds of housing for an older persons. This is not the case. Medi-Cal pays for nursing home care in “skilled nursing facilities.” There must be a doctor’s order that the applicant’s stay in the nursing home is “medically necessary.”

The applicant of course must meet the asset and income qualification rules for eligibility for Medi-Cal. There is also a share of cost that the applicant must contribute to the nursing home.

Except in rare circumstances under waiver programs, you must “private pay” for a stay in an assisted living facility or board and care home. Some people have long term care insurance to help pay for these facilities, but most do not.

You should accomplish now long term care planning with your elder law attorney to plan for your future care. Your attorney will help you plan for qualification for Medi-Cal for a stay in a skilled nursing facilitiy.

Moreover, your attorney will help you plan how you will private pay for your possible need for in-home-care, assisted living facilities and board and care homes. He can help you determine how you can reposition certain of your assets into new insurance products to help pay for your future care. With traditional long term care insurance, if you don’t use it, you lose it. If you never make a claim, your monthly premium payments are generally wasted. With a new kind of insurance product, you can keep your investment in tact, and only utilize the long term care portion of the product if you need it. In addition, under the Federal Pension Relief Act, you may be able to transfer a portion of an appreciated account into such a product without suffering capital gains treatment.

Your elder law attorney will help you to increase the quality of your life, and not just figure out who-gets-what after you pass away. For additional information, you can contact your elder law attorney Michael J. Young. This information is not to be taken as legal advice, and you are advised to see your elder law attorney. At the law offices of Michael J. Young, 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA http://www.WalnutCreekElderLaw.com, 925-256-0298,lawyoung1@gmail.com, we practice elder law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with Sustainable Estate Planning TM, long term care planning, asset protection plans, special needs trusts, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order to help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension Benefit.

Apr
06
2015
0

April 2015 CA Medi-Cal Quick Reference Guide (APPR Change)

The State of California has changed the Average Private Pay Rate – Divestment Penalty Divisor (APPR) for Medi-Cal qualification for 2015. A brief listing of the Medi-Cal qualification requirements with this change is set forth below:

Community Spouse Resource Allowance (CSRA)

$119,220

This is the amount that the community, or (at home) well spouse can retain in liquid assets. This amount does not include exempt assets, such as the home and qualified accounts, such as IRA’s.

Minimum Monthly Maintenance Needs Allowance (MMMNA)

$2,981

This is the minimum amount of income the well spouse can keep.

Average Private Pay Rate – Divestment Penalty Divisor – (APPR)

$8,092

This is the amount the State pays to nursing homes on the Medi-Cal program, minus a share of cost by the applicant. This figure is also used to calculate penalty periods of ineligibility for Medi-Cal.

Applicant Resource Allowance

$2,000

The applicant can keep this amount in cash, checking, etc.

Monthly Personal Needs Allowance

$35

The amount of income the ill person is allowed to keep.

Mar
10
2015
0

Will Medi-Cal Let Me Make Gifts To My Wife Without Penalty?

Will Medi-Cal Let Me Make Gifts To My Wife Without Penalty?

YES!  For qualification for Medi-Cal, there is presently a 30 month look back period for making gifts. But this look back period does not apply between spouses. We have discussed in previous blogs how to properly transfer the home between spouses in order to avoid a state lien after the Medi-Cal recipient passes away. There is no penalty period for this transfer.

The ill spouse and the well spouse can both have any amounts of qualified funds, like IRAs, when qualifying for Medi-Cal. These are called “exempt assets.” The ill spouse can then have no more than $2,000 in regular or “non exempt” assets. The well spouse can have up to $119,220 in regular assets. So for qualification for Medi-Cal, the ill spouse will generally transfer her regular assets to the well spouse, so that the ill spouse has no more than $2,000 in regular assets.

If the well spouse then has more than $119,220 in regular assets, he can gift a portion of that amount to other individuals, to get him down to $119,220, but penalty periods can apply. Medi-Cal will ask if any assets have been gifted within 30 months prior to qualification for Medi-Cal from either spouse to other individuals. The gifts from the ill spouse to the well spouse do not create penalties. But any gifts to other individuals, like family members, can create penalty periods for qualification for Medi-Cal.

To figure out the penalty period, divide the amount of the gift by $7,628. The answer will give you the number of months of ineligibility for Medi-Cal. So, if $35,000 is gifted from mother to son within the last 30 months, that amount is divided by $7,628. The solution is 4.58 (rounded down to 4) months of ineligibility. So if the gift was made in October 2014, the Medi-Cal applicant would not be eligible for Medi-Cal until February 2015. Your elder law attorney can help you lower the months of ineligibility caused by gifting, through long term care planning. Do not attempt any transfers without the advice of your elder law attorney.

Your elder law attorney will help you to increase the quality of your life, and not just figure out who-gets-what after you pass away. For additional information, you can contact your elder law attorney Michael J. Young. This information is not to be taken as legal advice, and you are advised to see your elder law attorney. At the law offices of Michael J. Young, 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA http://www.WalnutCreekElderLaw.com, 925-256-0298,lawyoung1@gmail.com, we practice elder law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with Sustainable Estate Planning TM, long term care planning, asset protection plans, special needs trusts, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order to help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension Benefit.

Oct
06
2014
0

Little Known Law May Help Seniors Pay for Long Term Care

On August 17, 2006, the President signed into law The Pension Protection Act of 2006. This law, which came into effect in 2010, can be very helpful to Baby Boomers and older clients who are looking for ways to private pay for long term care without coming up with additional funds.

Many of our clients own annuity contracts, and this law allows them to add long term care riders for an additional premium. The Pension Protection Act allows the cash value of annuity contracts to be used to pay the premiums for these long term care riders. The payment of premiums in this manner also has a tax benefit in that it will reduce the cost basis of the annuity contract.

The act also allows for the purchase of an annuity contract with a long term care rider by using cash in another annuity. By utilizing a Section 1035 tax-free transfer, you can purchase the new contract with a long term care rider without paying capital gains on the cash transfer.

Another option under the act for some clients, is to use the accumulated cash value in an annuity to purchase long-term care insurance through a § 1035 exchange. Other premium sources for long-term insurance can be by way of a § 1035 exchange. You can also utilize after tax money, such as savings or money market accounts or CD’s to purchase long term care insurance or life insurance with long term care riders.

For additional information, you can contact your elder law attorney Michael J. Young. This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the law offices of Michael J. Young, 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA http://www.WalnutCreekElderLaw.com, 925-256-0298,lawyoung1@gmail.com, we practice elder law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with long term care planning, asset protection plans, special needs trusts, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order to help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension Benefit.

Aug
04
2014
0

One Unique Way You Can Use Your Own Funds To Help Pay For Your Long Term Care Is To Convert Your Life Insurance Policy Into a Life Care Funding Trust

As we have discussed in the past, there are 3 ways to pay for long term care. 1) You can use your own money; 2) You can use your long term care insurance if you have it; 3) You can utilize the VA Aid & Attendance program to help pay for in home care and the cost of assisted living facilities, and you can use Medi-Cal to help pay for a stay in a skilled nursing facility . 

Most of our clients are not Veterans or the surviving spouses of veterans, and cannot tap into the VA Aid & Attendance program to help pay for in home care and assisted living facilities. Others may never need to go into a nursing home and  utilize Medi-Cal. In addition, as it turns out, most of our clients do not have long term care insurance, and they find long term care insurance to be either impossible or too cost prohibitive to obtain. 

Government benefits are available, but may become more difficult to obtain in the future. California will soon adopt the Deficit Reduction Act, which will make Medi-Cal eligibility more difficult. Medi-Cal can pay for your stay in a skilled nursing facility. VA will probably institute a look-back penalty period for gifting, and make that benefit more difficult to obtain.

Also, many Assisted Living Facilities now offer several  levels of care including independent living, custodial care and care in memory wings. If you could utilize your own funds for the cost of the assisted living facility, you would probably like to stay there for as long as possible.

One way you can use you our own funds to pay for your long term care, is to possibly convert your life insurance policy into a Life Care Funding Trust. Some of our clients have asked whether they should let their life insurance premiums lapse, as part of budgeting for the cost of their long term care. Premiums on life insurance policies have typically been made for many years, and it would be a shame to let the policy lapse without a benefit to you.  

 We can explore whether your life insurance policy has a value that can be converted to a long term care benefit. As part of the process, we will present a copy of the policy to the Life Care Funding Company along with a simple application which includes some medical information about you. The Life Care Funding company underwriters will determine whether they will make a cash offer to you for the purchase of the policy, and for how much. If they make such an offer and you accept it, the cash is then placed into a Life Care Funding Trust for your benefit, and payments are made to your care provider on a monthly basis. You will then stop making premium payments, and you will benefit from the policy. Please let us know if you would like us to help you explore this possibility.

In the future, we will be discussing other unique ways we can utilize our own funds to help pay for our long term care.

For additional information, you can contact elder law attorney Michael J. Young. This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the Law Offices of Michael J. Young, at 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA www.WalnutCreekElderLaw, 925-256-0298, lawyoung1@gmail.com we practice Elder Law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with long-term care planning, asset-protection plans, special needs trusts, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.

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