Jun
13
2017
0

Your Home and The “Heggstad” Petition

Your home should be transferred to your revocable living trust for various reasons. One reason is to avoid probate of your home upon your death. Another reason is that as of January 1, 2017, if you die after having been on Medi-Cal, the state will not be able to pursue recovery against your home if it is in your revocable living trust.

Some individuals, for various reasons, take their home out of their revocable living trust and do not transfer it back to their trust before they die. One reason the home is taken out of the trust is for re-finance purposes. Some lenders require that your home not be in your trust when you re-finance your mortgage. As a result, the escrow company may prepare a deed for you to sign, taking your home out of the trust. Escrow will usually not transfer your home back into your trust after escrow closes, because they would be violating the lender’s escrow instructions. As a result, you should transfer your home back into your trust after the close of escrow, unless there is a good reason for you not to do so. When you make this transfer back to your trust, your home will not be re-assessed, and the transfer will not trigger the due-on-transfer clause in the deed of trust which secures your mortgage.

The problem is that if you die, and title to your home is not in the trust, your home will need to be probated. A probate can take up to a year to complete, and is a costly process. Fortunately, there is a shorter court process in California that we can use to obtain a court order transferring your home back into your trust after you die. This is called the “Heggstad” Petition, which is named after a court case. If we can prove to the court through this court petition and supporting declarations that it was the obvious intention of the maker of the trust to keep his or her home in the trust, the court may grant an order, transferring the home back into the trust, thereby avoiding probate. This procedure is not guaranteed, but the courts have been more willing in recent years to grant this petition. As a result, if you take your home out of your trust, check to be sure that you have transferred it back into your trust, unless there is a good reason not to do so.

Please feel free to contact our office should you need help with estate planning, asset protection, and qualifying for and applying for Medi-Cal. 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 the older client and their families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.

Jun
01
2017
0

Medi-Cal Qualification and Joint Accounts

If you are applying for Medi-Cal, you will be required to disclose all of your assets in your application package. Medi-Cal wants to see evidence of all of your accounts, even joint accounts that you may have with someone else. Joint accounts will be considered by Medi-Cal, at least initially, to belong to you alone. So for instance, if you have a joint savings account with your daughter, Medi-Cal will view that account as belonging to you alone. As a result, the value of the account may disqualify you for Medi-Cal.

You may be able to remedy the situation if you can prove to Medi-Cal that all or a portion of the fund does not belong to you. You can also spend the money in the account on yourself, make repairs to your home, pay down your mortgage, etc. You may also be able to gift the money, or a portion of it from the account. As we have explained in previous blogs however, gifting can create periods of ineligibility for Medi-Cal if it is not done correctly.

Planning for asset protection and Medi-Cal with your estate planning and asset protection attorney at an early stage, can be very beneficial. Your revocable living trust and financial durable powers of attorney can also be amended to have the required gifting and asset protection provisions for Medi-Cal qualification, should you become incapable at some point of handling these matters on your own.

Please feel free to contact our office should you need help with estate planning, applying for Medi-Cal and asset protection. 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 the older client and their families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.

Sep
28
2016
0

Consider A Joint Checking Account With Your Parents

Many older people insist on handling their own financial affairs without assistance, for as long as as possible. This is admirable, but what if something bad happens to the older person, like a medical event which lands the older person in the hospital, and ready access to cash is needed? And, what if the older person begins to lose capacity and starts to make bad decisions with their money?

For access to immediate cash, a child or other loved one should be a joint owner on a checking account with the older person. If the older person is hospitalized and indisposed for a period of time, the child will be able to take care of finances, and pay bills for their parent. If the older person starts to make bad financial decisions, or is the subject of fraud, the child could shut the account down.

The bank and financial accounts, except for IRAs, should be transferred to the revocable living trust of the older person, with a child or other person named as successor trustee. These transfers to the revocable living trust are completed through the bank or financial institution, and these trust assets are reflected on the schedules of assets attached to the revocable living trust. The trust is set up so that if the older person loses capacity, a doctor’s note is obtained, and the child can act as the new trustee to control the assets for the benefit of the parent.

But what if the parent refuses to cooperate and do any of these things? You should try to maintain a dialogue of communication with the parent, and try to stay informed about what is happening with his daily life. If the parent becomes unusually defensive when asked about his finances, this should be a red flag. At this point, a geriatric social worker may be able to help you communicate with your parent. If the estate plan and finances aren’t properly set up, and the parent loses mental capacity, a court conservatorship may be required for you to be able to gain control of the accounts. The earlier the estate plan and joint checking account is set up, the easier it will be for all concerned.

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.

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Apr
25
2016
0

When Can The State Recover Medi-Cal Payments?

If you die after having been on Medi-Cal, the state will want to recover from your estate. They will want to recover what they paid for your nursing home care while you were on Medi-Cal. If there is nothing in your estate when you die, there will have nothing in your estate for them to recover. That it why it is important for you to see an elder law attorney in order to get your “Ducks In A Row” for Medi-Cal qualification, and to avoid state recovery. For instance, if your home is in your estate when you die, the state can recover against it. If you have transferred your home out of your estate prior to your death, there can be no recovery against your home. If you have lost capacity, your fiduciary will not be able to transfer the home out of your estate without consideration, unless you have specialized language in your revocable living trust and financial durable power of attorney which provides for such a transfer without consideration. Most revocable living trusts and financial durable powers of attorney do not have the requisite language to make real estate and asset transfers, without consideration, if you lose capacity. Most revocable living trusts and financial powers of attorney provide only that a sale of assets can be made, for adequate consideration or fair market value. This language is not helpful for Medi-Cal qualification and state recovery.

The state cannot recover against your estate, after you have been on Medi-Cal, until you die. If you are survived by a spouse, the state claim is prohibited until the surviving spouse dies. But again, if there are no assets in your name when you die, if you were a Medi-Cal recipient, the state will not be able to pursue a claim against your spouse. If you are a Medi-Cal recipient who is survived by a minor child under the age of 21, the claim is barred against the state. Also, if  you are a Medi-Cal recipient who is survived by a disabled child of any age, the claim is barred against the state.

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.

Jan
22
2015
0

My Dad Has Already Done Some Gifting! Can He Still Qualify For Medi-Cal?

California does have gifting penalty rules. If the rules are not followed, you could create periods of ineligibility for Medi-Cal. If you follow the rules, Medi-Cal can pay for your stay in a skilled nursing facility, minus a share of the cost that you would pay. We have seen monthly bills of $10,000 and more from skilled nursing facilities.

You can gift any amounts of money or assets to your spouse without penalty, and she can keep up to $119,220, plus her IRAs and “exempt assets, and you can still be qualified for Medi-Cal.

If you gift your money and other non-exempt assets to someone other than your spouse, penalties may apply. The Medi-Cal application asks if you have made any gifts of non-exempt assets to someone besides your spouse, within the last 30 months. If you have, that amount is divided by $7,628. This is the amount that Medi-Cal pays monthly to nursing homes, minus the share of cost paid by the Medi-Cal recipient. It is called the Approximate Private Pay Rate, also known as the APPR.

So for instance, if you gave $40,000 to a grandchild for college tuition during January of 2014, you would not be eligible for for Medi-Cal for the next 5 months. You would not be eligible for the months January through May. You would be eligible however in June, 2014. To figure this out, divide the gifted amount of $40,000 by $7,628 and you will get 5.24, which rounded down is 5 months of ineligibility. You can also give the same amount of a gift on the same day to two children, and still only get 5 months of ineligibility. There are also other rules which can be employed which allow us to transfer monies over time, and thereby significantly reduce the number of months of ineligibility. The nice thing about these rules, as they presently exist, is that the penalty begins to run during the month that you made the gift.

When the Deficit Reduction Act (DRA) is adopted in California, which could be any time, there will be a five year look back instead of a 30 month look back penalty period for gifting. If we take the above example under the DRA rules, of the $40,000 gift to a grandchild, you would be ineligible for 5.24 months after you have entered the nursing home. If you gifted that amount to two people, you would have two periods of ineligibility of 5.24 months each. Also, under the DRA, the more liberal rules for gifting over time will be severely restricted.

As a result, you should proceed now with your long term care planning with your elder law attorney.

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 “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.

Jan
12
2015
0

2015 CA Medi-Cal Quick Reference Guide

The State of California has changed some of the Medi-Cal qualification figures and requirements for 2015. A brief listing of these changes and requirements 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)

$7,628

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.


Jan
02
2015
0

Treatment of The Home With Reverse Mortgages By Medi-Cal

Under the Medi-Cal regulations, it is fairly easy for us to establish the home as an “exempt asset” for qualification for Medi-Cal. The usual way is to confirm “an intent to return home” by the Medi-Cal applicant. The next task is to protect the home from a Medi-Cal lien if you pass away after having been on Medi-Cal. If you die after having been on Medi-Cal, and you are still on title to the home, Medi-Cal can put a lien on your home to recover the payments they have made to the nursing home. If you are not on title to the home when you die, Medi-Cal cannot pursue recoupment against your home. After we confirm the home as an “exempt asset”, we can transfer the home to another person without penalty under the Medi-Cal regulations. You can always transfer the home to your spouse without penalty. The goal is to keep the home as a legacy in your estate without it going to the state.

If you have a reverse mortgage on your home, it may become difficult for you to transfer title of the home to another person without triggering the due on transfer clause under the mortgage. This means that the loan could be due and payable upon the transfer. Also, if you go into a nursing home for an extended period of time, the reverse mortgage can become due and payable, and the home could be sold under the terms of the reverse mortgage. Any proceeds from the sale that you realize may make you ineligible for Medi-Cal benefits.

A reverse mortgage on your home is sometimes a good option for the older person. However, please keep in mind that it may not be such a good option if you could go into a nursing home in the foreseeable future. You should seek the advice of your elder law attorney for a full discussion of protecting the home, before committing to a reverse mortgage.

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 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.

Dec
31
2014
0

Mom Is Showing Some Dementia – Can we still create a long term care plan for her?

In my workshops, we talk about the Elder Care Journey. Along this journey, which I show on a chart, is an area called “Declining Senior With Memory or Mobility Issues.”  I reference this step along the Elder Care Journey as a DANGER ZONE. We know that mobility issues and falling oftentimes is the beginning of a downward slope for our older loved ones. A person with mobility issues but who still has good mental capacity can of course enter into a long term care estate plan. She can agree in the plan that if she loses capacity, her loved ones can proceed with asset preservation, possible gifting, transfer of her home for asset protection, and getting her ducks in a row for qualification for Medi-Cal, etc.

If she has lost mental capacity by the time she sees her elder law attorney, she will not be able to enter into such a plan. If there is a formal diagnosis for instance of advanced dementia, we of course will not be able to proceed. In that case, if she has the plain vanilla type of estate plan, which is more suitable for a younger person, the plan will most likely not have the powers to allow her fiduciary to complete gift transfers or to transfer the home to her spouse or her children for asset protection. In that event, we may need to go to court to obtain an order to reform her existing estate planning documents.

If Mom has some dementia, such as short term memory loss, she may still have sufficient mental capacity to enter into a long term care plan. We can usually tell through our interview and conversation with her if she understands what the plan is about. If we are not certain, we can ask her medical doctor whether he would be willing to confirm in a letter that she has sufficient mental capacity to create the estate plan.

The sooner the older client sees the elder law attorney, the better. It is never too late to do long term care planning, but it is much more expensive if we need to go to court to complete the planning.

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 Sustainable Estate Planning, 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.

Dec
15
2014
0

Final Expense Trust For No Fee

As part of your long term care planning, you can also plan ahead for payment of funeral costs. You can put an amount you decide on into an “irrevocable final expense trust” which will pay for funeral and related costs at the time of your passing. The money you put into the final expense trust earns interest until the time the trust is used. If you pass away, your surviving loved ones do not start writing checks to the funeral home. They instead will take the final expense trust to any funeral home, and present it for payment for funeral and related services.

This part of pre-planning makes it much easier on your loved ones when you are gone, in that an amount for your funeral costs has been established, and the check has already been written and the funds are in the trust. There is no longer a need for your loved ones to scramble for funds for payment to the funeral home. The funds placed into the trust are protected by National Guarding Life (NGL), which uses a life insurance policy to fund the trust. With the use of the policy, the funds are not taxable upon your passing. The trust is also not subject to creditors’ claims because it is irrevocable. In addition, there is no legal fee for the creation of the trust, in that the trust is prepared by NGL.

The use of this type of trust can also be useful as part of Medi-Cal planning. When funded  properly, the money in the trust will not be counted for Medi-Cal eligibility, and will not be available for recoupment from the state. There is a wide range of related services that the fund in the trust can also be used for, such as clergy honorarium, death certificates, musicians, flowers, memoriam celebration, transportation equipment and driver. Any funds that are not used will go to your named beneficiary.

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.

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