When applying for Medicaid, the government will review transfers the applicant made during a so-called “look-back” period, which includes the assets you’ve given away during the previous years. Giving away property to relatives and loved ones could compromise your eligibility for receiving benefits. However, by signing a Lady Bird deed, you are not required to disclose these transfers to Medicaid.
By signing a remainder deed with a reserved life estate, a grantor is able to designate a beneficiary to inherit her property while the grantor maintains ownership during her lifetime. A traditional life estate deed prohibits the grantor from selling, mortgaging, gifting, or terminating property. However, in states like Florida, there is an alternative to a life estate deed known as an enhanced life estate deed, or a Lady Bird deed.
Unlike a traditional life estate deed, a Lady Bird deed allows the grantor to continue to control the property without the consent of the beneficiaries. The landowner is free to sell the property, profit from the property, and make gifts that won’t jeopardize the landowner’s eligibility for Medicaid.
While a first-party supplemental needs trust is designed to allow a disabled beneficiary place their own funds or assets in a trust, a third-party supplemental needs trust is meant for family members to assist a person with disabilities.
Just like a first-party supplemental needs trust, the assets in the third-party trust do not jeopardize the beneficiary’s eligibility for Supplemental Security Income (SSI). A third-party supplemental needs trust can hold any assets that the family wishes to provide (e.g. stocks, bonds, houses, etc.). Rather than giving the disabled individual the funds directly, the family can transfer them to the trust in order to provide a benefit to the beneficiary while not disqualifying the beneficiary from receiving government benefits.
While the beneficiary of the first-party supplemental needs trust must be below the age of 65, the age of the beneficiary does not matter for a third-party supplemental needs trust. Another key difference is that there is no payback requirement for a third-party supplemental needs trust. This means that when the beneficiary passes away, the remaining assets in the trust can be passed to relatives or charity instead of being used to reimburse the government.
If you have further questions on this topic or wish to set up a third-party supplemental needs trust, contact our office at (941) 906-1231 to schedule an appointment with one of our attorneys.
If individuals receive Medicaid benefits during their lifetimes, Medicaid may have a claim against their estates for any amount spent on the recipient. This is called the Medicaid Estate Recovery program. The program, which operates on a state and federal level, is designed to recover the assistance payments from the assets in the estate.
Estate recovery applies to anyone who received government benefits and were age 55 years or older at the time of their death. The law requires that the personal representative or attorney of the estate send a copy of the death certificate to the Agency for Health Care Administration to determine whether Medicaid provided assistance. If so, a claim is then filed with the probate court.
The main targets of this program are nursing home residents who were also Medicaid recipients during their lifetime. If the Medicaid recipient leaves behind a spouse, a child under the age of 18, or a blind/disabled child, the estate recovery does not apply.
Bach & Jacobs, P.A. provides assistance to personal representatives and trustees who are responsible for administering estates and trusts. If you have been named as a personal representative or trustee for someone who has recently died, contact our firm for a consultation with one of our attorneys.
Unlike a living trust, a testamentary trust is provided for in a last will and testament, however its terms are established by an individual during their lifetime. The trust sets up the distribution of all or part of an estate and sometimes the proceeds from a life insurance policy held on the life of the person creating the trust.
While a testamentary trust can be provided for in a last will and testament, you can also direct that your living trust create one. Typically, a testamentary trust is created for children who are minors, loved ones with disabilities, or anyone who would receive a large sum of money outright.
Because testamentary trusts take legal effect after you die, they are considered irrevocable and cannot be changed. Testamentary trusts come into play at the end of the probate process after the person who created it has died.
The trustee who the settlor appoints will manage the funds in the trust until the beneficiary of the trust is in control.
If you are the trustee of a testamentary trust or you wish to create a testamentary trust as part of your last will and testament, contact Bach & Jacobs, P.A. to consult with one of our attorneys.
When choosing an elder law attorney, it is important to properly assess your circumstances and spend time reviewing attorneys in your area. At the end of the day, you want an elder law attorney who has the most legal knowledge and will act in your best interest.
Here are a few tips to assist you in hiring the attorney that will do the most for you:
- A good first step is thoroughly researching attorneys and their qualifications; you can do this by asking trusted friends, asking the firm for their qualifications, and checking the Florida Bar’s website for disciplinary history
- Make sure to sign a retainer agreement so you will have in writing what services the attorney will provide and what fees will be charged
- Let the law office know what you are trying to accomplish at your appointment so the attorney will better understand your objectives
Babette Bach, Esq. is a Florida Board Certified Elder Lawyer. The attorneys at Bach & Jacobs, P.A. can assist you with a variety of elder law-related matters.
An elder law attorney, also known as an elder care attorney, is familiar with the state and federal laws that impact seniors and their well-being.
These attorneys are well-versed and specialize in a range of areas:
- Estate planning
- Powers of attorney
- Medicaid
- Medicare
- Veterans benefits
- Probate and trust administration
- Nursing homes
- Elder abuse and fraud
Elder law attorneys allow you to plan ahead. By meeting with an elder law attorney and setting up documents, you can protect your assets, properly pass your estate to heirs, and name individuals to make health care and financial decisions for you when you are unable.
If you have further questions or wish to set up documents, contact our office at (941) 906-1231 to schedule an appointment with one of our attorneys.
As you get older, you may find yourself needing assistance paying bills and managing finances. Oftentimes, seniors will add their children and loved ones as co-owners to bank accounts. It is important to know that there are advantages and disadvantages to having joint ownership of bank accounts.
A joint owner has complete access to your account and can make any withdrawals he or she wishes to make. The joint owner can make these withdrawals and write checks without your permission. While this may not cause any problems with a trusted person as your co-owner, it can lead to bad circumstances if the person is acting against your interest. It is also important to remember that your assets in the joint account are reachable by your co-owner’s creditors once their name is on the account.
A common misconception regarding Medicaid and jointly-owned accounts is that Medicaid will see the account as being owned in half by the applicant and half by the co-owner. However, the case is actually that Medicaid will view the account as belonging solely to the applicant. Thus, the Medicaid applicant has the job of proving otherwise.
Lastly, when you pass away, the remaining assets in the account will become the property of the co-owner, regardless of whether you want them passed along to that individual. While that is an easy and convenient method of transferring assets, it can problematic if you want them to be given to or shared with someone else.
When you consult with a Bach & Jacobs, P.A. attorney about your estate plan, they will analyze the titling of your assets and advise you whether joint titling is appropriate given your objectives and goals.
The death of a spouse is a somber and challenging topic to discuss, however, it is crucial to do so in order to secure your finances and estate.
While you and your spouse may have already prepared documents such as powers of attorney and advance directives, there are several other areas of end-of-life planning for which you should discuss and prepare.
In the ever-changing digital world we live in, it is very important that both you and your spouse know the passwords and specifics to your online accounts and digital assets. Passwords can be easily lost and forgotten so make sure they are written down in a protected space. Not only should passwords be kept safe, but also account numbers, key contacts, and PIN numbers. It is also a good idea to keep important documents such as birth and marriage certificates, vehicle titles, life insurance policies, and mortgage documents in a safe and organized place.
Lastly, both spouses should be familiar and comfortable with your financial advisors and actual finances. Oftentimes, couples will delegate financial accounting to one partner who will do the taxes and be responsible for important financial information. While this may be a convenient system, it is leaving one spouse in the dark about their finances and assets. By sharing the responsibility of financial accounting, couples can properly prepare for end-of-life care and financial management.
According to the Internal Revenue Code, an educational organization is an institution that “normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on.” This includes all primary schools, secondary schools, preparatory schools, high schools, colleges and universities. However, some pre-schools do not qualify for the exclusion because the schools do not satisfy the Internal Revenue Code’s standards.
Attorney Fred Jacobs is Florida Board Certified in Tax Law. Call Bach & Jacobs at (941) 906-1231 to schedule an appointment with Fred if you have questions about how the gift and estate tax laws affect you and your family.
