By Ronald A. Fatoullah, Esq. and Stacey Meshnick, Esq.
{4:04 minutes to read} Planning for a loved one can often be overwhelming. Seeking the advice of an elder care attorney can help to allay concerns and allow for appropriate planning. The following are some of the questions that clients typically ask elder law attorneys.
Q: My mother is aging and her health is declining. What sort of issues should I be thinking about?
A: As mom ages, it is important to think about who will handle her financial and medical affairs if and when she becomes incapacitated. Mom can execute a well-drafted power of attorney appointing individuals who will handle her affairs. This document should include the ability to handle all types of planning as well as the authority to gift assets to effectuate such planning. A health care proxy appoints someone to make health care decisions, including those regarding artificial nutrition and hydration, in the event that mom is unable.
Q: My father is preparing to apply for Medicaid and he wants to gift assets to me, but I was told that he can only gift $14,000 annually.
A: Medicaid planning and estate planning are two totally different arenas. Medicaid will impose a transfer penalty for assets previously transferred for applicants applying for nursing home Medicaid. This has nothing to do with the $14,000 annual gift tax exclusion, whereby individuals are permitted to gift $14,000 per recipient without the requirement of filing a gift tax return.
Q: I am a joint owner on all of my mother's joint accounts. She wants to leave one of the accounts to my sister. Should she sign a will in which she leaves the account to my sister?
A: While your mother should have a will that designates her dispositive wishes upon her death, if all of her accounts are jointly held with you, the assets will pass to you irrespective of what her will indicates.
Q: What is the difference between a will and a trust?
A: It is necessary to prove ("probate") a will once a person has died. Probate entails providing notice to those who would inherit assets. It must be proven that the will was signed in accordance with state law. Once the will is approved and all necessary steps are taken, including marshaling the assets, the executor may distribute the estate assets. A trust is an agreement wherein an individual-the trustee (the creator of the trust and/or another person)-is entrusted with holding the assets of an individual. The trust indicates to whom assets are to be distributed (unless held in further trust) upon the death of the grantor. It is not necessary to prove a trust. There are several other advantages to a trust that are beyond the scope of this article.
Q: Are there different types of Medicaid for my 85-year-old ailing parent?
A: If your parent can remain in the home, community Medicaid is an option as long as your parent's income and resources are within allowable levels. There is no look-back period for community Medicaid. Thus, prior transfers will not create a penalty period. If your parent needs nursing home care, then institutional Medicaid is an option. There is a look-back for all transfers made within 60 months prior to the application. The rules differ significantly between community Medicaid and institutional Medicaid. An elder care attorney can review your particular situation and advise what may be best.
Ronald A. Fatoullah, Esq. is the principal of Ronald Fatoullah & Associates, a law firm that concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate. Stacey Meshnick, Esq. is a senior staff attorney at the firm who has chaired the firm's Medicaid department for over 15 years. The law firm can be reached at 718-261-1700, 516-466-4422, or toll-free at 1-877-ELDER-LAW or 1-877-ESTATES. Mr. Fatoullah is also the co-founder of JR Wealth Advisors, LLC. The wealth management firm can be reached at 516-466-3300 or 800-353-3775.
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