Post Medicaid Eligibility
BLOG for March 9, 2016
The Story: Harold and Mary are married. Harold is in a nursing home and he is receiving Medicaid benefits. Mary’s sister dies and leaves Mary a $50,000 Certificate of Deposit.
Question: Will Mary’s inheritance from her sister affect Harold’s Medicaid benefits?
Answer: No, because once Medicaid eligibility is established, no resources of the community spouse are considered available to the institutionalized spouse. However, the heritance will affect the allocation of Harold’s income to Mary, if any. See PPM Section 2635.10.10.15; 42 U.S.C Section 1396r-5(f)(1).
Posted:
3/8/2016
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Transfer to a disabled child
BLOG FOR JANUARY 6, 2015
The Story. John will soon be entering a nursing home. In order to qualify for Medicaid benefits, John needs to convert non exempt assets into exempt assets. Part of his plan is to put money into a trust for the sole benefit of his disabled son.
Question: Will there be a transfer penalty for John taking money from his checking account and putting into a trust for the sole benefit of his disabled son?
Answer: No. There is no penalty for a transfer to a disabled child or to a trust for the “sole benefit” of a disabled child. To be disabled the child must meet SSI disability criteria, although the child need not be receiving SSI. See 42 U.S.C. Section 1396p(c)(2)(B)(iii); 405 IAC 2-3-1.1(k)(4).
However, it appears that there would be a transfer penalty if John gave money to a stepchild or to a trust for the sole benefit of the stepchild.
Posted:
1/6/2016
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Medicaid Eligbility-Life Estate in Real Estate
BLOG FOR DECEMBER 9, 2015
The Story: John, age 65 years, will soon need the skilled care of a nursing home. He wants to apply for Medicaid benefits to pay for the nursing home. The problem is that the value of his assets is well above the $2,000 limit for Medicaid eligibility.
Question: Can John reduce the value of his assets to $2,000 by buying a life estate in the home of his son, Robert?
Answer: Yes, if John moved in with his son, Robert, and purchased a life estate in Robert’s home at the value according to the life estate table, and resided there for at least a year, there should be no penalty for the purchase of the life estate.
However, if John resided in Robert’s home for less than a year after the date of purchase, and then applied for Medicaid benefits, then there would be a transfer penalty for the value of the life estate. See 42 U.S.C. Section 1396 (c)(1)(J).
Posted:
12/9/2015
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Medicaid Transfer Penalty
Blog for November 25, 2015
The Story: George, age 67 years, is a widower. He had a stroke two years ago and needs skilled nursing care. His daughter, Mary, has taken care of him for the last two years and her care has allowed George to live at home rather than go into a nursing home. Now his health has declined and he needs a nursing home.
Question: Can George give his home to his daughter, Mary, and be eligible for Medicaid benefits without a transfer penalty?
Answer: Yes. George can transfer his home to Mary, without penalty, because Mary resided in the home for at least two years before George became institutionalized and her care allowed George to remain at home.
Also, there is no transfer penalty if the home is transferred to a child under the age of 21, blind, or disabled.
See PPM Section 2640.10.15.05; 405 IAC 2-3-1(k)(1)
Posted:
11/25/2015
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Medicaid Transfer Penalty
Blog for November 25, 2015
The Story: George, age 67 years, is a widower. He had a stroke two years ago and needs skilled nursing care. His daughter, Mary, has taken care of him for the last two years and her care has allowed George to live at home rather than go into a nursing home. Now his health has declined and he needs a nursing home.
Question: Can George give his home to his daughter, Mary, and be eligible for Medicaid benefits without a transfer penalty?
Answer: Yes. George can transfer his home to Mary, without penalty, because Mary resided in the home for at least two years before George became institutionalized and her care allowed George to remain at home.
Also, there is no transfer penalty if the home is transferred to a child under the age of 21, blind, or disabled.
See PPM Section 2640.10.15.05; 405 IAC 2-3-1(k)(1)
Posted:
11/25/2015
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After born child
The Story:
Harold died in June 2014. He left a wife, Emily, and two children living at the time of his death. His Last Will and Testament devised 50% of his residuary estate to Emily and 50% to be divided among his children. Emily gave birth to Harold’s third child in December 2014.
Question:
Does Harold’s third child inherit anything?
Answer:
Yes, the third child will inherit 1/3 of the 50% residuary estate.
When a decedent fails to provide in his will for any of his children born or adopted after the making of his last will, such child shall receive a share in the estate of the decedent equal in value to that which he would have received if the decedent had die intestate, unless it appear from the will that such omission was intentional.
See IC 29-3-8
Posted:
11/11/2015
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"Take against the will"
BLOG FOR OCTOBER 28, 2015
The Story:
George died, leaving a wife, Martha, and two children by a previous marriage. He had a Last Will and Testament wherein he left everything to his children and nothing to Martha.
Question:
Does Martha have any recourse?
Answer:
Martha can elect to “take against the will”. Because Martha is a “childless spouse”, she is entitled to take 1/3 of the net value of the personal property in George’s probate estate and 25% of the net value of the real estate in George’s probate estate.
If Martha had children with George, then she would have been entitled to 50% of the net value of the personal property and 50% of the net value of the real estate in George’s probate estate.
The children do not have the right to take against the will. The right to elect to take against the will only inures to the surviving spouse.
See IC 29-1-3-1.
Posted:
10/28/2015
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Intestate Distribution
Blog for October 14, 2015
The story:
John died, leaving behind a wife, Mary, and two children by a previous marriage. He owned a home that was is his name, and a $50,000 bank account in his name only. He had no will.
Question:
What will happen to John’s property?
Answer:
When a person dies without a will, the laws of intestacy determine how the decedent’s property will be distributed. In this case, Mary will receive 25% of the net value of John’s home and his children will each receive 37.5% of the net value of his home; and Mary will receive 50% of his bank account and the children will each receive 25% of the bank account.
Mary is considered a “childless spouse”. If John had no children but one parent, then Mary would receive 75% of the net value of his estate and his parent would receive 25% of the net value of the estate.
See IC 29-1-2-1.
Posted:
10/14/2015
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Medicaid Planning
BLOG for September 2, 2015
The Story:
John and Linda are a married couple. John had a stroke and needs the skilled care of a nursing home. Their assets consist of a home, a vehicle and a $50,000 savings account. Linda is afraid that she will have to sell her home and use up her savings account to pay the nursing home.
Question:
How can John get the skilled care he needs without causing Linda to sell their home and use up their savings account?
Answer:
John can apply for Medicaid benefits to pay the nursing home. They can claim their home and vehicle as exempt assets and seek to apply the spousal impoverishment rules to shield their saving account.
Nursing home care costs $5,000-$8,000 / month or more; and this can quickly deplete a lifetime of savings. In 1988 Congress enacted provisions to prevent what has become called “spousal impoverishment”. Under Medicaid spousal impoverishment provisions, a certain amount of the couple’s combined resources is protected for the spouse living in the community. Also, depending on how much of his or her own income the community spouse actually has, a certain amount of income belonging to the spouse in the institution can also be set aside for the community spouse’s use
Posted:
9/2/2015
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Small Estate Affidavit
The Story:
Roger’s sister, Linda, died leaving a probate estate, consisting of a financial account. Roger believes the account is less than $50,000 in value. Roger wants to use a Small Estate Affidavit to dispose of Linda’s estate, without opening a probate estate, but he isn’t sure of the value of the account.
Question:
How does Roger get the financial institution to tell him the date of death value of Linda’s account?
Answer:
The Indiana statute IC 29-1-8-1.5 provides a process whereby a person having possession of a decedent’s property must provide the date of death value of the property to person presenting a properly executed affidavit with the required information, within three (3) business days after being presented with the affidavit. The refusal to provide the properly requested information within three (3) business days, exposes the person to liability for treble damages, attorney fees and court costs.
Posted:
8/19/2015
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Small Estate Affidavit
Blog August 5, 2015
The Story:
Martha’s brother, Harold, died as a single man. He left a Last Will and Testament naming Martha as his Personal Representative. Harold’s estate consisted of $40,000 in checking and savings accounts in his name only.
Question: How does Martha get the banks to turn over Harold’s money to her, without opening a probate estate?
Answer:
Martha can present the banks with a Small Estate Affidavit 45 days after Harold’s death.
The Indiana statute IC 29-1-8-1 provides that a Small Estate Affidavit can be used to obtain property of a decedent if the gross probate estate, less liens and encumbrances, does not exceed $50,000. The affidavit must state certain things, including, but no limited to, the fact that no application for a personal representative is pending, the names and addresses of each person entitled to share in the decedent’s estate, and that these persons have been notified of the intention to present the affidavit.
Posted:
8/5/2015
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Intestate Succession
Blog for June 24, 2015
The Story:
Mary died owning a parcel of real estate and some banking accounts, all in her name only without any POD designations. Her bereaved relatives consisted of her second husband, John, with whom she did not have any children, and two children by her first marriage: Louise and Joe. Mary did not have a Last Will and Testament.
Question:
What will happen to Mary’s property?
Answer:
When a person dies without a Last Will and Testament the decedent’s probate estate is distributed by way of “intestate succession” In this situation, 25% of the net value of the real estate will be distributed to John and 37.5% of the net value of the real estate will be distributed to each of Mary’s two children ; and 50% of the bank accounts will be distributed to John and 25% of the bank accounts will be distributed to each of Mary’s two children.
The net value of the real estate is the value minus liens and encumbrances. Here John is considered a “surviving second childless spouse”. The bank accounts are considered personal property and they are distributed differently than the real estate. See IC 29-1-2-1.
Posted:
6/25/2015
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Medicaid Planning
Pop Quiz for June 10, 2015
The Story: Harold is in a nursing home and he is receiving Medicaid benefits. His wife, Mary, has a Last Will and Testament that leaves all her assets to Harold, if she dies first.
Question: What are the consequences to Harold’s Medicaid benefits, if Mary dies first?
What is a better estate plan for Mary?
Answer: If Mary dies before Harold and leaves all her assets to him, this will disqualify Harold from Medicaid benefits, because Harold can only own $2,000 in assets. If Harold disclaims his inheritance from Mary, it is expected that FSSA will deem this disclaimer as a transfer and there will be a transfer penalty. A better plan is for Mary to leave Harold his statutory share of her estate in a trust to be used for Harold’s benefit during his life and the remainder will go to their children.
Posted:
6/10/2015
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Guardianship Venue
Pop Quiz for May 27, 2015
The Story:
Dad has ALS (Lou Gehrig’s disease) and he is in need of a guardian. Dad resides in Porter County. Dad is visiting his daughter Sarah, who lives in Lake County when he falls and injuries himself.
Question:
What is the proper county where the guardianship proceeding should be filed?
Answer: Porter County, however, there are qualifications. See IC 29-3-2-2 (a).
The venue (proper county) for the appointment of a guardian is the county where the alleged incapacitated person or minor resides. However, if the proceeding is for the appointment of a temporary guardian of the person only (not to include his estate) for an alleged incapacitated person or minor who is in need of medical care, the proceedings can be filed in the county where a facility is located that is providing or attempting to provide medical care to the alleged incapacitated person or minor. See IC 29-3-2-2 (a).
Posted:
5/27/2015
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Guardianship priority
The Story:
Mary has been diagnosed with Alzheimer’s and is in need of a guardian. Mary’s boyfriend, Harold, has been named her Power of Attorney. Both Harold and Linda, who is Mary’s daughter, want to be appointed as Mary’s guardian.
Question:
Which person has the higher priority, in the eyes of the court?
Answer: Harold has a higher priority than Linda, in the eyes of the Court, all other matters being equal. However, the Court does have discretion in making this decision. See IC 29-3-5-5 (a).
A person designated in a power of attorney has a higher priority than an adult child, when a court is considering the appointment of a guardian. The overriding issue is the best interest of the incapacitated person. The court, acting in the best interests of the incapacitated person or minor, may pass over a person having priority and appoint a person having a lower priority. See IC 29-3-5-5 (b).
This information if for informational purposes only and should not be understood as legal advice in any manner. Please consult with an estate attorney who can better understand you r particular situation and can make appropriate recommendations.
Posted:
5/13/2015
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Indiana inheritance tax and federal estate tax
Blog April 29, 2015: Indiana inheritance tax and federal estate tax
The Story: John and Mary were husband and wife. Together they owned $10,000,000 in jointly held assets such as real estate and bank accounts. They had not made any taxable gifts. John died in 2013. Mary died in 2014 and left her estate to be divided equally among their four children.
Question: Are there any inheritance taxes due to the State of Indiana and are there any estate taxes due to the IRS?
Answer: No. Indiana inheritance tax was repealed for individual dying after December 31, 2012. This means there is no inheritance tax due to the State of Indiana on an estate of any decedent who died after December 31, 2012.
There was no estate tax due to the IRS. The federal estate tax exemption for John’s estate in 2013 was $5,250,000 and Mary’s estate in 2014 was $5,340,000. Beginning January 1, 2011 estates of decedents survived by a spouse may elect to pass any of the decedent’s unused exemption to the surviving spouse. This election is made on a timely filed estate tax return for the decedent with a surviving spouse.
When John died in 2013 his entire estate went to Mary because the assets were jointly owned. There was no federal estate tax due to the IRS because Mary was his wife. In this case, Mary elected to pass John’s unused exemption in the amount of $5,250,000 to her by timely filing Form 706. When Mary died in 2014 the federal exemption for her estate was $5,250,000 + $5,340,000 = $10,600,000.
Posted:
4/29/2015
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No Contest Clause in will
Blog # 3 No Contest Clause is Will April 15, 2015
Story:
Roger executed a Last Will and Testament. He did not want his disgruntled relatives to contest his will, so he included a “no contest” clause stating that if anyone contested the Will, then that person would inherit nothing.
Question:
Is that ” no contest clause” enforceable in Indiana?
Answer:
No. A “no contest clause” as described above in not enforceable in Indiana. See IC 29-1-6-2. There is a similar provision making a “no contest clause” in a Trust unenforceable in Indiana . Se IC 30-4-2.1-3.
Posted:
4/15/2015
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Power of Attorney
The Story:
Harry executed a Power of Attorney naming his son, John, as the "attorney-in-fact". Harry has requested John to use this Power of Attorney to make certain gifts after Harry dies.
Question:
Can Jon carryout Harry's requests?
Answer:
No. This Power of Attorney is effective only while Harry is alive. The document becomes null and void immediately upon Harry's death. A Last Will and Testament, on the other hand, becomes effective immediately upon a person's death and cannot be used while the person is alive.
Posted:
4/1/2015
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Blog # 1 TOD Deed
Facts
Jane has two children, both are adults.. One is responsible and one is into drugs. Upon her death, she wants to leave the family home to the responsible child .
Question:
What is an easy way to accomplish this, without the worry of a Will contest?
Answer:
A “transfer on death” deed. A TOD deed transfers title to real estate to a designated beneficiary after the death of a principal. The beneficiary does not receive any interest in the property until after the death of the principal. It can be revoked by the principal at any time prior to his/her.
This information if for informational purposes only and should not be understood as legal advice in any manner. Please consult with an estate attorney who can better understand you r particular situation and can make appropriate recommendations.
Posted:
3/17/2015
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Medicaid transfer penalty
BLOG FOR FEBRUAEY 24, 2016
The Story Mary and John are married. Mary is engaged in Medicaid planning because she will soon be entering a nursing home and she wants Medicaid to pay the costs of the nursing home. She owns a home in her name only that she inherited. Mary wants to transfer the home to John and their three daughters as joint tenants with the right of survivorship for no consideration.
Question Will there be a transfer penalty?
Answer: There will not be a penalty for the 25% interest transferred to John. 1396p(c)(2)(B)(i); 405 IAC 2-3-1.1(k)(2) There will be a penalty for the 75% interest transferred to her three daughters because Mary did not receive adequate consideration, and the daughters do not qualify for an exemption. The penalty is computed as follows:
(Uncompensated value of transfer)/(average monthly cost of nursing home) = months of penalty
Posted:
2/24/2015
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Welcome to my new website!
We have dedicated our practice to serving the legal needs of the residents of Northwest Indiana, Chesterton and the surrounding communities. We specialize in the following areas of practice:
• Family Law
• Wills & Trusts
• Guardianship
• Probate
• Charitable Organizations
• Small Business
• Legal Research
• Elder Law
Posted:
8/9/2013
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