Wright AbshireWright Abshire2024-03-19T09:21:12Zhttps://www.wrightabshire.com/feed/atom/WordPress/wp-content/uploads/sites/1603997/2022/11/cropped-wright-abshire-blue-siteicon-c-32x32.jpgOn Behalf of Wright Abshire, Attorneys, A Professional Corporationhttps://www.wrightabshire.com/?p=497052024-01-02T00:12:36Z2024-01-02T00:12:36ZTransfers and gifts can trigger a penalty
The primary reason that people need to plan in advance for Medicaid is that the state penalizes those who make major moves trying to qualify for benefits shortly before applying. There is a five-year or 60-month lookback period for Medicaid benefits. Any large gifts or transfers into a trust during those 60 months could trigger a penalty.
The applicant may not receive benefits until they pay for a set number of months of care with their own resources. That obligation comes at a time when they need a bed in a nursing home, rehabilitative care or skilled nursing support in their home. They may not have any way to cover those expenses with their own resources.
The only way to avoid a penalty is to plan at least five years before someone thinks they may need benefits. Therefore, Medicaid planning is often an important part of the overall elder law process. Those preparing to retire and live in comfort in their golden years may need to address possible future medical needs in addition to preparing certain documents, like powers of attorney, for their protection as they age.
Understanding the Medicaid lookback period, and seeking legal guidance if questions or concerns warrant, can help people to more effectively plan for comfort and financial stability in their golden years.]]>On Behalf of Wright Abshire, Attorneys, A Professional Corporationhttps://www.wrightabshire.com/?p=497042023-12-28T16:57:27Z2023-12-28T16:57:27ZHandle legal matters early
Dementia is one of those rare medical issues that can eliminate someone's testamentary capacity. Those who struggle with understanding and navigating reality cannot draft legally-binding agreements anymore. Some of their existing estate planning or elder law documents may lose their authority.
For example, powers of attorney that do not include the necessary language to make them durable documents may become useless when an older adult declines due to dementia. Durable powers of attorney may retain their authority even when someone permanently loses their testamentary capacity. If there aren't durable powers of attorney in place, the child caring for their parent may need to seek a guardianship to take control over medical and financial matters.
Make daily life predictable
Dealing with someone who has dementia can be a frustrating experience, as they may struggle to properly respond in a host of different circumstances. Like children who still need to learn how to navigate the world, adults with dementia thrive when their situation is predictable. Keeping the daily schedule the same and maintaining a space that feels like home for them by including personal objects can help ground them in their current experience and make them more comfortable. Those with dementia may want to maintain a calendar or journal of their own that they can review to remind themselves of their circumstances.
Keep spaces accessible but secure
Living with someone who has dementia can present a lot of challenges. They may wander or try to engage in activities that could lead to injury. Families therefore need to secure their spaces while also making necessary amenities, like bathrooms, easily accessible. Proper lighting, clear paths to limit falls and door handles instead of knobs can all help older adults navigate safe spaces in their homes. Families may need to lock certain rooms, keep chemicals and lighters out of reach and use other childproofing safety tools, like cabinet latches.
Providing in-home support for someone with dementia can increase their comfort as long as the family approaches the situation in thoughtful ways and as long as they seek support – including legal guidance – whenever necessary.]]>On Behalf of Wright Abshire, Attorneys, A Professional Corporationhttps://www.wrightabshire.com/?p=496962023-10-26T13:54:56Z2023-10-26T13:54:56Zsomeone will need later in life. They may engage in long-term care planning, as well as planning for the possibility of future incapacitation. Incapacity planning requires that someone address the possibility that they may eventually become unable to speak on their own behalf due to prolonged unconsciousness or a decline in mental acuity.
The tools people use are often similar
A basic estate plan may primarily use a will to arrange for the descent of property and the care of loved ones. However, people may also include a trust. Trusts often play an important role in elder law matters. Trusts can help protect certain resources from creditor activities while someone is older and living on a fixed income. It will also protect those resources from creditor claims after they die. The resources in a trust will not have to pass through probate court after someone's passing, which can be beneficial. They also will not count against someone for the purposes of qualifying for Medicaid benefits later in life.
Many in-depth estate plans also include living documents that address the care someone will require when their health declines. Powers of attorney and advanced medical directives can describe what treatment someone would prefer to receive and name an agent that they trust to act on their behalf.
Those same documents often play a key role in elder law plans. They allow someone to control the medical treatment that they may undergo and to prevent a conservatorship or guardianship. Durable powers of attorney will retain their authority even if an older adult becomes permanently incapacitated and can no longer enter into legal agreements on their own behalf.
Those who have engaged in thorough estate planning may already have achieved many of the basic goals that people set when addressing elder law matters. Understanding the key difference between estate planning and elder law may help people recognize gaps in their existing documents and identify how to protect themselves as they prepare for their golden years and beyond.]]>On Behalf of Wright Abshire, Attorneys, A Professional Corporationhttps://www.wrightabshire.com/?p=496792023-09-26T19:16:30Z2023-09-26T19:16:30ZPersonal resources
Many older adults will try to set aside enough liquid capital to be able to cover their own expenses as they age. However, nursing home rooms cost thousands of dollars each month, which means that those who actually need that level of support may find it prohibitively difficult to set aside enough money to cover those costs. They may need to rely on outside resources to obtain the best standard of care possible.
Long-term care insurance
There are some employers who provide more comprehensive insurance coverage to their workers, as well as plenty of people who buy supplemental insurance on their own. Long-term care coverage is a form of insurance that will pay for nursing home costs and similar expenses when someone has a major shift in health. If people purchase a policy later in life, the premiums assessed by the insurance company might be high enough to make long-term care insurance prohibitively expensive.
Texas Medicaid benefits
Those with limited income and personal assets can potentially apply for Medicaid benefits to cover their long-term care costs later in life. People generally need to plan very carefully to qualify for Medicaid in a timely fashion without penalties. Those who change how they hold certain assets at least five years before they apply for Medicaid benefits will have an easier time getting coverage when they need it and will be less at risk of estate recovery efforts later.
People may plan on using one of these resources or maybe a combination of two or all three. Understanding how people cover exceptionally high care costs can help individuals to more effectively plan for their future financial stability and legacy.]]>On Behalf of Wright Abshire, Attorneys, A Professional Corporationhttps://www.wrightabshire.com/?p=496692023-08-28T00:22:25Z2023-08-28T00:22:25ZA will only has authority when someone dies
A will or last will and testament is a legal document describing a testator's intentions for the allocation of their resources and the protection of their dependent loved ones after their passing. The document only has legal authority after someone's death. The paperwork that creates a trust, on the other hand, can take numerous different forms. Some people only fund their trust at the time of their deaths, but others may create a trust that they manage while alive and that then transitions to someone else's care after their incapacitation or death.
Trusts last for longer
The person tasked with estate administration typically has to follow state law regarding fulfilling someone's financial obligations and following their last wishes as outlined in the will. Once the probate process is done, they no longer have any responsibility. A trustee, on the other hand, may serve in their role for many years. For as long as the assets used to fund the trust persist, the trustee may need to continue managing them and occasionally distributing them to beneficiaries.
Trusts give more control
A will typically only allows someone to designate a beneficiary for certain assets and to name specific people to assume certain responsibilities. A trust can provide far more detail regarding when people can use estate resources and why.
Trusts can be harder to challenge
A will is a standalone legal document that only has authority if the testator was of sound mind when drafting the document and the paperwork complies with all statutes. People can challenge a will by claiming someone lacked testamentary capacity or that they were under the influence of an outside party. A trust is a separate legal entity that owns the property used to fund it, and therefore it can be much more difficult for people to challenge a trust. Those anticipating a lot of conflict around their state or worried about tax obligations might find that a trust would be valuable in their situation.
Understanding how a trust is different from a will may help people choose the right tools for the legacy they want to leave and the protection they need in their golden years.]]>On Behalf of Wright Abshire, Attorneys, A Professional Corporationhttps://www.wrightabshire.com/?p=496592023-07-05T11:38:52Z2023-07-05T11:38:52ZEnsure that your will is properly executed
A legally enforceable and valid will must meet certain requirements. In most cases, it must be signed and witnessed, and the testator (the owner of the will) must be of sound mind. Fulfilling these and other requirements can help avoid contests on the grounds that the will is legally invalid and better ensure that it passes the legal test.
Regularly update your will
It is essential to regularly update your will to ensure that it remains current and aligned with the changes in your life. Failing to do so can create opportunities for contests. For instance, you may unintentionally leave a beneficiary or some assets out of your will if it's not up to date. Regularly reviewing and updating your will is crucial to maintain accuracy and minimize the likelihood of disputes.
Communication is key
Discuss your estate plans and decisions openly with your family members and beneficiaries to manage expectations or address concerns. This can reduce the chances of surprises or misunderstandings and help resolve issues before they escalate into a will contest.
Include a no-contest clause
You can also potentially deter a challenge to your will with a no-contest clause. It stipulates that if a beneficiary challenges the will and loses, they may receive nothing or only a minimal share. No-contest clauses are enforceable in Texas unless the contest is brought in good faith or on justifiable grounds.
Protect your estate plans
Seeking legal guidance when planning for the future of your estate is in your best interests. It will help to ensure that your plans align with your wishes and minimize the risk of unforeseen circumstances that can undermine them. This way, you can have peace of mind, knowing that everything is set when the time comes.]]>On Behalf of Wright Abshire, Attorneys, A Professional Corporationhttps://www.wrightabshire.com/?p=496572023-06-30T13:45:56Z2023-06-30T13:45:56Zmost important aspects of any estate plan. This can give you a good place to start, although everyone needs to assess their own unique situation to ensure that their plan works for them.
A last will
The natural place to start with an estate plan is by writing a will. It’s an instruction list, a set of guidelines for your estate administrator to follow. You can begin by taking an inventory of your assets. You can determine which heirs you want to receive which assets, and you’ll list these instructions in the will.
Advance medical planning
Furthermore, you may need to do medical planning as part of your estate plan. You can use an advance directive to leave instructions for your doctors. Maybe you don’t want to be kept on life-support, for example. You could also use a medical power of attorney to give an agent the legal ability to make medical decisions for you. If you become incapacitated, they can step in and take over this important job.
Financial planning
Finally, you may also consider financial documents to plan for the future. Maybe you want to put your assets into a trust, rather than a will. Maybe you want to set up a financial power of attorney so someone else can make decisions for you if necessary. There are many options available to you as you consider your financial future.]]>On Behalf of Wright Abshire, Attorneys, A Professional Corporationhttps://www.wrightabshire.com/?p=496352023-05-07T08:25:04Z2023-05-07T08:25:04ZWhat are some of the exempt or non-countable assets?
Generally speaking, monthly incomes, cash, money sitting in bank accounts and investments are all countable when it comes to determining if someone is under Medicaid’s asset limit. However, many other things are not, including:
The applicant's primary residence is exempt as long as its equity is less than $688,000 (in 2023) and the applicant intends to return home. If the applicant has a spouse living in the home, then the residence is exempt regardless of value or the applicant’s intent.
Personal belongings such as clothing, furniture and jewelry are also generally exempt from consideration, as is one motor vehicle.
Certain types of retirement accounts, such as IRAs and 401(k)s, are exempt when the owner is taking the Required Minimum Distributions (RMD).
Irrevocable burial trusts, such as pre-paid funeral and cremation plans and funeral plots are also usually exempt.
It's important to note that these exemptions are subject to certain limitations. For example, if the primary residence is sold, the proceeds may not be exempt – and the primary home can still be subject to Medicaid’s Estate Recovery Program after the applicant (and their spouse, if there is one) passes away. Additionally, if assets are transferred to someone else within five years of applying for Medicaid, they may be subject to a penalty period where Medicaid benefits are not available.
Because the rules on Medicaid exemptions are complicated, it’s wise to seek experienced legal guidance when you’re trying to determine the most proactive way to prepare for the future.]]>On Behalf of Wright Abshire, Attorneys, A Professional Corporationhttps://www.wrightabshire.com/?p=496302023-04-14T16:24:08Z2023-04-14T16:24:08ZMedicaid planning is trusts.
Irrevocable Trust
An irrevocable trust is a legal arrangement in which the creator transfers assets into the trust and relinquishes control over them. Once assets are in an irrevocable trust, they typically cannot be taken back or altered by the grantor. Since the assets are no longer under the creator's control, they usually don't count toward the individual's Medicaid eligibility calculations.
Income-Only Trust
Also known as a Medicaid income trust or Miller trust, an income-only trust is a type of irrevocable trust designed specifically for Medicaid planning. It allows the grantor to transfer excess income into the trust, which can then be used to pay for the grantor's medical and care expenses. This type of trust can help the grantor qualify for Medicaid while still using their income for their own benefit.
Special Needs Trust
A special needs trust is designed to provide financial support to a disabled beneficiary without jeopardizing their eligibility for government benefits, such as Medicaid or Supplemental Security Income. The trust can be used to pay for the beneficiary's supplemental needs that are not covered by Medicaid, such as recreational activities, specialized equipment or additional caregiving services.
Pooled Trust
A pooled trust is a type of special needs trust that is managed by a non-profit organization. Multiple beneficiaries with disabilities pool their resources into a single trust, and the organization manages and distributes the funds according to each beneficiary's needs. This type of trust can be an affordable option for individuals with limited assets who still want to protect their Medicaid eligibility.
It's important to note that Medicaid planning and the use of trusts are complex legal matters that involve federal and state laws. Using a trust inappropriately could lead to penalties or disqualification from Medicaid benefits. Understanding exactly what you need to do to protect your assets is crucial, so seeking legal guidance is generally a good idea.]]>On Behalf of Wright Abshire, Attorneys, A Professional Corporationhttps://www.wrightabshire.com/?p=496282023-03-06T10:48:38Z2023-03-06T10:48:38ZTexas has special laws for those who die without wills
If an individual dies without a will or trust to explain their wishes regarding their property, they have died intestate. As with any other adult, the property in their name becomes the property of their estate, and their financial obligations also pass to their estate. However, instead of choosing their own executor to handle their affairs and determining what happens with their property, those who die without a will leave all of the major decisions involved to the state of Texas.
Intestate succession laws give specific inheritance rights to legal and biological family members. If a married adult dies without a will, their spouse has very strong rights to the property from their estate. Children also have certain inheritance rights. When someone dies without a spouse or children, other family members, like parents, might inherit from their estate. The goal is to allow the closest family members to retain as much of the estate as possible after fulfilling someone's remaining financial obligations.
Intestate succession strips someone of control
Although there are certain rules that apply to the distribution of personal property even when an estate plan is in place, such as marital rights for spouses, an adult who creates a will or trust largely has control over what happens to their property after they die.
People can leave resources for charitable causes that matter to them or leave assets to friends as well as family. Those who do not draft estate planning documents effectively give up control over the legacy they leave when they die. Creating an estate plan early and then making updates when appropriate is often the safest strategy for those who want to leave property for beneficiaries other than their closest family members.]]>