Jun
19
2017
0

Durable Powers Of Attorney For Young Adults

We usually don’t think estate planning documents are necessary for younger adults. But consider the potential need for financial and health care powers of attorney for them. We received a recent call from a client whose 23 year old daughter, Jenny, was in a severe automobile accident. Jenny suffered traumatic brain injury in the accident. After two weeks in the hospital, she was transferred to a skilled nursing facility for rehabilitation. Jenny has not been cognizant enough to make medical or health care decisions for herself.

Our client called us because Jenny does not have financial or medical powers of attorney, or a HIPAA statement for access to her medical records. Our client and her husband are running into problems making medical and financial decisions on behalf of Jenny. They are also having difficulty gaining access to Jenny’s medical records. If Jenny’s incapacity continues, a conservatorship proceeding in probate court may be the only resolution to this problem. In a conservatorhip proceeding, the probate court judge appoints another person, the “conservator” to care for and make decisions on behalf of another adult, the “conservatee. A probate court conservatorship proceeding is time consuming, intrusive to the family and expensive. This dilemma could have been avoided if Jenny already had these basic estate planning documents. After all, we never know what may happen to any of us at any time.

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
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.

May
31
2017
0

California Still Has A 30 Month Look Back for Gifting

California still has the 30 Month Look Back Penalty Period for Gifting. There is a federal law known as the Deficit Reduction Act (DRA), which has a 60 month look back penalty period. However, California has not to date implemented that law. Medi-Cal eligibility workers are required to use the 30 month look back period.

When you apply for Medi-Cal, the application asks whether you have given away any countable, or non-exempt assets within the last 30 months. If you have made such a gift without consideration, or for less than fair market value within the 30 months prior to making the application, a penalty period of ineligibility may be imposed. Transfers of any kind between spouses are exempt and do not create any periods of ineligibility.

The penalty transfer amount, which is also known as the monthly average nursing home private pay rate, is presently $8,515. The penalty period starts when the transfer is made, as opposed to when you make the Medi-Cal application. To calculate the penalty period, first check to see if it was made more than 30 months prior to making the Medi-Cal application. If more than 30 months have passed, there is no penalty.

Lets assume however that you have gifted $50,000 to your grandchild on October 1, 2016, and that you are applying for Medi-Cal on January 1, 2017. The gift was made 3 months prior to the application, so the 30 month look back penalty rule applies. You then divide $50,000 by $8,515, which reflects 5.87, which is rounded down to 5 months of ineligibility, starting from the date of the transfer. As a result, you would be ineligible for Medi-Cal during the months of October, when the gift was made, November, December, January and February, but you would be eligible March 1, 2017. There are of course other rules to consider, which may be to your benefit, which your elder law attorney can help you with.

Please feel free to contact our office should you need help with 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.

Mar
31
2017
0

VA Benefit May Help Cover The Costs of In Home Care or an Assisted Living Facility

The Veteran’s Administration has a pension benefit known as Aid and Attendance, for the benefit of older, disabled war time veterans who have served at least one day in the service during an official wartime period. This benefit can help pay the costs of in home care, board and care and assisted living facilities. The benefit is also available to the surviving spouse of a wartime veteran.

These veterans are disabled due to “non-service connected reasons, which are usually age related. Their disabilities can result from diseases such Alzheimer’s, Parkinson’s, multiple sclerosis, and from other physical disabilities. Another possible criteria for eligibility is that the veteran needs the attendance of another person in order to avoid the daily hazards of his environment. It must also be shown that the veteran is in need of assistance with various activities of daily living, such as bathing, dressing, eating, etc.

Eligibility for this benefit is also determined by income, and the amount of assets the veteran has. A large portion of the cost of care being paid for in home care or the assisted living facility, can usually be applied against the veteran’s income in the VA application, to make eligibility easier.

A single veteran can receive up to $1,749 per month, which is $20, 988 per year. A married veteran can receive up to $2,127 per month, which is $25,524 per year. In addition, the surviving spouse can receive up to $1,153 per month, which is $13,836 per year.

If you are a veteran, or if you have a family member or friend who is a veteran receiving care, you should seek the guidance of an experienced elder law attorney who is familiar with this benefit. The attorney can help you determine whether eligibility is possible, and what steps can be taken to obtain eligibility.

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.

Mar
27
2017
0

How Much Can I Have In IRA’s and Still Qualify for Medi-Cal?

We are often asked the question as to how much you or your spouse can have in IRA’s and 401k’s and still qualify for Medi-Cal. The Medi-Cal applicant, or the ill spouse, can have any amount of IRA’s, 401k’s etc. These are so-called “qualified funds.” The only requirement is that the Medi-Cal applicant must be receiving periodic payments of some amount of principal and interest from these funds. Once this established, these qualified funds are considered exempt by Medi-Cal for qualification.

If the applicant is married, the well spouse can have any amount of IRA’s, 401k’s, etc., and there are no qualifications for distributions. So the qualified funds of the well spouse are totally exempt.

In addition, after the Medi-Cal applicant dies, the “qualified funds” of both spouses, are also exempt from recoupment by the state. As a result, the state will not go after your IRAs and 401k’s when you die.

In one of our recent cases, the ill spouse had approximately $100,000 in IRAs. The well spouse had approximately $300,000 in IRAs. The ill spouse was accepted for Medi-Cal.

There is a “share of cost” which is an amount the ill spouse must pay to the nursing home from the applicant’s income. We will review those rules in other blogs.

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.

Mar
15
2017
0

Does Your Trust Have a Mandatory Bypass Provision?

Most modern Revocable Living Trusts do not have a Mandatory Bypass Provision, which is usually good planning. This provision is normally NOT necessary, and if you have one, it can cause unnecessary headaches after the first spouse dies. A mandatory bypass provision will require splitting and re-titling of the trust assets between a Revocable Survivor’s Trust and an Irrevocable Exemption Bypass Trust after the first spouse dies. You will need a tax I.D. number for the bypass trust, and a fiduciary tax return will need to be filed every year. The surviving spouse will also not have complete control of the assets in the irrevocable bypass trust. The mandatory bypass trust makes Medi-Cal qualification more difficult, because the state will require that you exhaust the assets of the bypass trust before you can qualify for Medi-Cal.

The primary purpose of a mandatory bypass provision in your revocable living trust is to save on death taxes, aka inheritance taxes. The current federal death tax exemption amount is $5.45 million per individual. So if you think you will have more than $5.45 million dollars after the first spouse dies, the mandatory bypass may be useful. Also, if the spouses have a blended family with “his mine and ours” children, the mandatory bypass trust can protect the assets of the children of the first spouse to die.

To avoid issues created by mandatory bypass provisions, you can instead have a discretionary bypass provision in your revocable living trust. This will provide the same results as a mandatory bypass, but will give the surviving spouse the discretion of funding a bypass trust for tax purposes. However, this funding must be completed within 9 months of the date of death of the first spouse to die. You should now check the provisions in your revocable living trust that tell you what to do after the first spouse dies. If the provisions call for a mandatory bypass trust and a split of the assets after the first to die, you may want to have the provision changed by your elder law attorney with an amendment. Most older trusts have a mandatory bypass provision, which should probably be changed.

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.

Feb
13
2017
0

Using An Annuity For Medi-Cal Eligibility For Spouses

In previous blogs, we have discussed various techniques, within the regulations, for obtaining Medi-Cal qualification for an ill spouse, when the couple has excess assets. These techniques include “spending down,” gifting and filing a court petition to obtain an order that allows the couple to keep all of their assets. In certain circumstances, especially between spouses, an annuity can be a useful tool to consider for Medi-Cal qualification.

As discussed in previous blogs, the ill spouse (Medi-Cal applicant) and the well spouse, can keep all of their qualified funds, like IRAs and 401(k)s, in any amounts, and still qualify for Medi-Cal. Then, the ill spouse cannot have more than $2,000 in non-qualified funds, like a savings or brokerage account in his name. The well spouse can have up to $120,900 in non-qualified funds in her name. So for instance, if the couple has $300,000 in non-qualified funds, they would have $177,100 too much for the ill spouse to qualify for Medi-Cal.

To use an annuity for qualification, the ill spouse would transfer his non-qualified assets to the well spouse. There is no Medi-Cal penalty for inter-spousal transfers. Then the well spouse would purchase an annuity with that money in her name, and name someone other than her ill spouse as the pay on death beneficiary of the annuity. Distributions would be made periodically from the annuity to the well spouse in payments scheduled to be exhausted during her life expectancy, pursuant to social security life expectancy tables. The well spouse can keep all of her income from the annuity, without penalty. In addition, as of January 1, 2017, there can be no recoupment by Medi-Cal against the annuity after the ill spouse passes away, because a pay on death beneficiary has been named in the annuity. This technique is not appropriate in all situations, and may be discussed with your elder law attorney along with other options.

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.

Feb
02
2017
0

2017 MEDI-CAL DESK REFERENCE

2017 MEDI-CAL DESK REFERENCE

Divestment Penalty Divisor $8,189.00
Individual Resource Allowance $2,000.00
Monthly Personal Needs Allowance $35.00
Community Spouse Resource
Allowance $120,900.00
Monthly Maintenance Needs
Allowance $3,023.00
Resource Allowance for a Couple
(Husband and Wife both in facility) $2,000.00/each

MICHAEL J. YOUNG, ATTORNEY AT LAW

Elder Law Planning, Estate Planning, Trusts, Probate, Real Estate,

Preservation of Assets, Long Term Care Planning

Member: National Academy of Elder Law Attorneys, Inc.

1931 San Miguel Drive, Suite 220

Walnut Creek, CA 94596

E-mail: LawYoung1@Gmail.com Phone: (925) 256-0298

www.WalnutCreekElderLaw.com Fax:     (925) 938-6727

Dec
21
2016
0

Medi-Cal Recovery Will Be Limited to Probate Estates after January 1, 2017

We have recently blogged about the new legislation Governor Brown signed, effective January 1, 2017, which changes the rules regarding recovery by the state for payments it has made to nursing homes for Medi-Cal recipients. Under the old law, the only way we could avoid recovery was to ensure that there was nothing in the Medi-Cal recipient’s name at the date of his death. Under the new law, for Medi-Cal recipients who die after January 1, 2017, recovery will be limited to those estates that are subject to probate under California Probate Law. Assets transferred from a revocable living trust of the Medi-Cal recipient will not be subject to recovery under California Law, because assets in a revocable living trust are not be subject to probate.

For example, if Mary the Medi-Cal recipient leaves her home to her son in her will, the home will be subject to a probate. If the state paid $30,000 to a nursing home for Mary, the state will be able to recover the $30,000 from the probate of the home. If the home was in Mary’s revocable living trust at the time of her death, the state will not be able to recover against the home, because the home will transfer from the trust to Mary’s son, and will not be probated.

The new rules, effective for Medi-Cal recipients who die after January 1, 2017, also exempt certain assets from state recovery. For example, property transferred prior to death, that are no longer in the beneficiary’s name, are not subject to recovery. However, any transfers must be made within the Medi-Cal regulations in order to avoid periods of ineligibility when applying for Medi-Cal. Also, the state cannot recover against your life insurance policy as long as you name one or more beneficiaries under your policy. If you do not name a beneficiary, or if the beneficiary you have named dies before you do, there will be a probate to determine who the beneficiary is. The state will be able to recover against the probate.

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.

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