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Medicaid
Nursing Home Care
Special Needs Trusts
Wills
Life Estates
Estate Planning Medicaid A. Medicaid is the government program that pays for nursing home care for people whose countable, available resources are below $2,000 ($4,000 for the higher-income applicants). The spouse in the community can retain the marital home, the car and up to $104,400 in assets or half the marital assets, whichever is less. You need to provide 5 years of documentation to show all your financial transactions. Q. Does the State take my house? A. No. There are many strategies to protect the house for your family if you need nursing care. Q. Do I have to be able to pay for nursing home care for 5 years before applying for Medicaid? A. Not necessarily. There are many strategies that enable us to file your Medicaid application earlier Nursing Home Care Q. What should I look for when selecting a nursing home? A. Proximity to family, quality of care as shown on state surveys or Better Business Bureau reports, quality of the physical plant and the recreation program, size of rooms, and levels of weekend staffing are all important criteria. Q Will my care be at risk if I have to apply for Medicaid? A. No. The State of New Jersey holds the facility to the same requirements regardless of the source of payment. Q Can I be evicted from the nursing home if I apply for Medicaid? A. No. A facility cannot discriminate based on source of payment. If a facility can no longer meet the resident's health care needs, it cannot discharge a resident without finding a suitable and appropriate alternative placement Back to Top Special Needs Trusts Q. What is a Special Needs Trust? A This is a specialized trust for sole benefit of a person who is disabled. It restricts the use of the money to supplemental needs, and not support, so that the trust's disabled beneficiary can be eligible for benefits such as SSI, Medicaid, or programs of the Division of Developmental Disabilities (DDD). Q. How is a Special Needs Trust made? A We write the Trust and it is established by the beneficiary's parent or grandparent or Guardian, or by a court. The beneficiary's assets can be transferred into the Trust, where the funds will be managed and controlled by a Trustee for the sole benefit of the disabled beneficiary. Q. Can it be written in the parent's Will? A Yes. A parent may want to leave money for the benefit of their disabled child. It should go into a Special Needs Trust so that the child doesn't lose important government benefits. In that case, the trust is funded with the parent's assets after death. Q. Is a Special Needs Trust the same as a discretionary trust? A No. It must have many specialized provisions for it to be effective in protecting SSI, Medicaid and DDD eligibility. Wills Q. Does everyone need a Will? A. Yes. In the Will, you decide who gets what. You can leave money to charities or to trusts for specific beneficiaries. You can divide the estate unequally among your heirs. You appoint a person of your choice as Executor to carry out your wishes, and you can specify that the Executor can serve without bond. Q. What if a person dies without a Will? A. The Surrogate's Court will have to appoint an administrator from among the heirs, and s/he must post a bond before being able to assume his or her duties. Then, state law will dictate how to distribute the estate. This may cause results you wouldn't like. Q. Can't the executor put an heir's share into a trust? A. The executor must follow the terms of the Will. If there is no Will, the Administrator must give the assets to the heir. Under certain circumstances, the Executor or Administrator could petition a court to create a trust for one of the heirs, such as a special needs trust. Back to Top Life Estate Q. What is a Life Estate? A. A Life Estate is an interest in real property that is owned by another person. The Life Tenant has the exclusive right to occupy the premises. S/he is responsible for the utilities, taxes and general upkeep. If the property is sold, s/he receives a pro rata share of the sale proceeds based on his or her age at the time of sale. The owner of the property is called the "remainderman." Q. What happens when the life tenant dies? A. If the life tenant gave the property to another person (such as a child) and kept just the life estate, the life estate would be a retained interest. The whole value of the property would be included in the life tenant's estate at death, when calculating the estate and inheritance taxes. The cost basis of the property then "steps up" to date of death value, which can benefit the remainderman. The remainderman owns the entire value of the property since the life estate "evaporates" at the death of the life tenant. Q. Why do people use life estates? A. Transfer of property to children and retaining a life estate can be a useful tool especially if the parent continues to reside in the home and the property has increased greatly in value since date of purchase. Estate Planning Q. What is Estate Planning? A. Estate Planning refers to preparation of a Will, a Trust, and any other documents that will direct the handling of your assets during your lifetime or after your death. Q. Why Do I need Estate Planning? A. By doing estate planning, you make the choices about who receives each asset, the percentages of distribution, the timing of distribution, and the use of certain property. You make the choices as to who will have the responsibility to carry out your wishes. Also, you may be able to avoid unnecessary estate taxes. Q. What issues will my attorney ask about? A. Along with a review of how much of the estate will be left for each person, we will discuss special situations. There may be a child who needs to remain in the house. There may be a disabled beneficiary who needs a special needs trust. Your children may not trust each other, may be fighting, or may have creditor or divorce problems of their own. You may need an independent person or a bank to be the Executor or trustee. You may want to set up a charitable trust. All of these issues can be addressed in the Will, and in trusts set up during your lifetime. Back to Top You deserve peace of mind. To answer your questions contact us or call 732-382-6070 to schedule an appointment with one of our certified elder care attorneys Read More About it:
Real Estate Transactions in Elder Law Planning,
Medicaid eligibility
Careful Planning can avert a crisis
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.
Copyright © 2008 by Fink Rosner Ershow-Levenberg, LLC. All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement.
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