Month: June 2019

What is a Medicaid-compliant annuity?

by

With few exceptions, holding a financial investment in excess of the asset limit (currently only $4,000 for single persons) will disqualify you for Medicaid in Missouri. One of the most powerful exceptions to this rule is a Medicaid-compliant annuity. With a Medicaid-compliant annuity, money that otherwise would need to be spent down to qualify for Medicaid can be used to purchase an annuity that creates a revenue stream. The revenue stream can either go to a spouse to help replace the lost income of the person going into the nursing home, or to help pay for a penalty period if necessary.

To be a “Medicaid-compliant” annuity, the annuity must be irrevocable, payout during the expected life expectancy of the annuitant, not have any balloon payments, and name the State of Missouri as the first beneficiary when the person dies. If the annuity pays out completely within the person’s life-time then there will be no payment to the State.

A Medicaid-compliant annuity can be a powerful tool as part of an overall planning strategy to ensure the health care a senior needs is paid for while protecting the senior’s life savings. To learn more contact us today.

What is a payable on death designation?

by

What is a payable on death designation?

     A payable on death designation, or “POD,” is a method for naming a beneficiary on a bank account.  When you pass

away, the person identified in the POD takes ownership of the bank account without the need to go to probate.

How do I create a payable on death designation?

     A POD is a beneficiary designation provided to your bank.  Your bank will have a form to name a payable on death beneficiary for your bank account.  You should ask your bank for this form.

How does the payable on death designation work?

     You complete a form at your bank to name a payable on death beneficiary.  You have the right to make any changes to that designation.  You can change your payable on death designee, or remove it completely.  When the last owner of an account passes away, the bank will normally require a death certificate.  Once they are provided the death certificate, they will transfer ownership of the account to the payable on death designee.  The account will be renamed in the name of your payable on death designee.

What are the benefits of a payable on death designation?

     A payable on death designation enables you to designate a beneficiary who will take ownership of your bank account.  Your beneficiary will not need to go to court to obtain ownership of the bank.  Naming a POD does not give the beneficiary any right to your bank account while you are living. 

What is the difference between a payable on death designation and a joint account?

     Many people will name a loved one as a joint owner of an account.  This can be useful if you need help managing your finances.  For example, an aging parent might create a joint account with their child so the child can help manage their finances.  When the parent passes away, the child who is the joint owner of the account will now become the owner of the account.  The parent has managed to pass the account onto the child without any a planning or the need to go to probate. 

Joint ownership of an account can create problems, however.  For example, if you have more than one child but only one child on the account, when you pass away that account will become the account of the child named on the account.  This can lead to inadvertently failing to leave an equal amount to each child.  Also, by having joint ownership of a bank account with a child, you may be placing your money at risk to the creditors of your child.  Also, anyone on the account has complete access to all the money in the account.

What are the limitations of a payable on death designation?

     A payable on death designation is a simple way to pass on ownership of a bank.  This may not be an effective strategy if you have more complex planning needs.  For example, your beneficiaries may not be at an age where they should inherit a significant bank account.  A payable on death beneficiary designation simply passes ownership when you pass away. 

     By contrast, if you use a trust then you can put terms in the trust that ensure your child does not receive his or her inheritance until they are old enough to be ready.  Also, a payable on death designation may not be a good solution if you have a special needs child, or if you have concerns about the financial stability of your beneficiary.

     A payable on death designation can be an effective part of an overall estate plan.  You should consult with an estate planning lawyer, however, before relying completely on payable on death designations to pass on significant wealth.

The Medicaid Asset Limit Increases on July 1

by

The Medicaid/MoHealthNet Asset Resource Limit for nursing home benefits increases on July 1, 2019. The Resource Limit is the amount of “countable” assets a person can have and still meet the asset limits for Medicaid nursing home benefits. The limits will increase from $3,000 to $4,000 for a single person, and $6,000 to $8,000 for a married couple.

The resource limit was set at $999.99 for a single person and $1,999.99 for a married couple in 1973. The resource limit did not change for MORE THAN FORTY YEARS. The Missouri Legislature recently passed legislation that made the first ever increase to the resource limit. The resource limit has been increasing over the past two years, and it will increase to $5,000 (single) and $10,000 (married) next year. After next year, the limits will automatically change each year based on inflation.

Remember that this limit only applies to “countable” resources. Anyone considering Medicaid as an option to pay for nursing home care should consult with an elder law attorney to learn what this means, and how the new resource limit can change potential eligibility.

What are “Physicians Interrogatories” in a Guardianship?

by

One of the most important requirements to obtain guardianship and/or conservatorship over someone is the statement from a physician that the person is incapacitated or disabled, and a guardianship and/or conservatorship is necessary. In St. Louis County and the City of St. Louis, the court has a “Physicians Interrogatories” form to be completed by the physician. In the “Physicians Interrogatories,” the physician identifies the person’s diagnosis, the impairment, the limitations of the person, that the physician believes a guardianship and/or conservatorship is necessary, and the least restrictive environment where the person could safely stay. The “Physicians Interrogatories” must be filed with the guardianship petition, and the original Physicians Interrogatories must be delivered to the court at the hearing to approve the guardianship petition.

Does a will avoid probate?

by

NO!! A common mistake is the belief that you need a will to avoid probate. In fact, a will must go through probate to be valid. A will enables you to decide where you belongings go when you die, but it requires your loved ones to go through the slow and costly process of probate. There are many ways to avoid probate and accomplish the same thing, such as a trust, beneficiary designations, and “non-probate transfers” such as transfer on death designations for vehicles or pay on death designations for bank accounts.

What is a “general” power of attorney?

by

            In your power of attorney, you state what powers your agent has, and what he or she can or cannot do on your behalf.  With a “general” power of attorney, give your agent as broad of powers as you can.  The goal of a general power of attorney is to enable your agent to do anything that you could do.  The general power of attorney is useful because if you are incapacitated you are relying on power of attorney to manage your affairs.  Caution must be exercised, however, when giving a general power of attorney because the powers are so broad.  You should only appoint someone as a general power of turning if you are comfortable with him or her being able to walk into a bank and you anything that you could do with your money, for example.  Most often, a general power of attorney with broad powers is used when a spouse or close family member is named as the agent.

Does a will avoid probate?

by

Many people think they need a will to avoid probate. Actually, a will must be filed with probate, and passing assets to loved ones with a will requires opening a probate estate. A will is better than nothing, because without any estate planning assets will pass on death according to the default rules created by Missouri law, which can be quite different from what a person might want. For avoiding probate, however, there are many estate planning alternatives that will accomplish the same goals of the will, but in less time and for less cost. These estate planning tools can include a trust, beneficiary designations, PODs and TODs, and a beneficiary deed.

Does Medicare pay for the Nursing Home?

by

No! A common misconception is that Medicare will pay for nursing home care. Medicare is similar to private insurance that pays for hospital admissions and doctor visits. Medicare does not pay for long term nursing home care.

This can be confusing because there are limited scenarios where Medicare will pay for a brief stay in a nursing home. Medicare pays for treatment that is intended to heal a person, or improve their condition. Medicare will pay for up to four months of in-patient rehabilitation in a nursing home if it is ordered by a physician after a hospitalization of at least three days. Even then, payments by Medicare are limited. Medicare will only pay the full cost of the nursing home for twenty days. The amount Medicare will pay decreases after the first twenty days. Finally, Medicare will pay for hospice care, which applies to someone who is terminally ill and has less then six months to live.

Medicare will not pay for nursing home care for chronic conditions (i.e., when the person is not receiving care to get better, but simply to manage their condition). Medicaid is one of the only government benefit programs that does pay for long term nursing home care.

What is an inventory in probate?

by

Preparation of the Inventory

Once letters of administration are issued to the personal representative, the first step is for the personal representative to provide an inventory of all the known assets of the estate.  This process can take months depending on the complexity of the assets, and the difficulties the personal representative can encounter when dealing with banks or finding assets.  The personal representative files an Inventory and Appraisement, which is a list of all the known assets with account information and other supporting documents.  This Inventory is supposed to be filed within 30 days of Letters of Administration being issued, but often additional time is necessary to complete the Inventory.

The inventory identifies assets for the court, but also potential heirs and potential creditors of the estate.  Often, as the personal representative learns more about the estate over time additional assets may be discovered.  When this happens an amended inventory should be filed identifying the newly discovered assets.  When the probate estate is ready to be closed the Inventory will be compared with a final statement showing what happened to all the assets. 

What is the five-year look back period in Medicaid?

by

Medicaid is a “safety net” program designed to cover the cost of nursing home care for seniors.  The program is only available for individuals who meet strict financial requirements.  To protect the resources of the program, Medicaid prohibits potential applicants from simply giving away their assets to qualify for Medicaid.  To “keep millionaires off Medicaid,” federal law mandates a sixty month “look-back” period for any applicant.  The Medicaid application requires the applicant to disclose whether “anyone in your home [has] sold or given away money, vehicles, or property within the last five years.”  Transfers are fine – transfers for less than fair market value are not.  When Medicaid determines a transfer has occurred within the five year lookback period, a “penalty period” will be imposed based on the difference between the amount of the transfer and the fair market value of the transfer.