As the baby boomer generation ages
so too rises the collective age of the nation. As the nation ages, we will run
into more and more issues; issues such as how to pay for long term care and how
to deal with dementia. A new age (no pun intended) of the elderly, what has
been deemed the “silver tide”, is coming and we are not prepared for it.
We do Guardianships All Wrong
If a loved one cannot make
decisions for themselves, for whatever reason e.g. dementia, and you do not
have power of attorney, then you must seek guardianship of that person to make
decisions on their behalf. The issue with guardianships is that to obtain
guardianship, you must first have your loved one adjudicated incompetent. This
means that you’re having the court deprive them of their liberty by declaring
them unable to make decisions on their own behalf. They will remain as a “ward”
of the state until such time as their competency is restored by proving to the
court that they are no longer incompetent—which is not easy to do.
There are a couple glaring problems with guardianships:
We
do not understand dementia. Dementia is much like other cognitive issues in
that it affects people differently. It presents itself in a unique way in each
individual it touches. And, just because you suffer from dementia, does not
mean you’re per se incompetent. After all, it varies in its severity.
We
do the process all wrong. When I say the ‘Court” adjudicates the individual
incompetent, I mean a clerk, sitting as judge, makes this decision. A clerk is
an employee of the court system, who is not required to have any formal legal
or medical training, and who is given temporary judicial authority for the
purpose of the hearing. Many times the government is the one bringing the
petition for guardianship. These people are appointed a third party (called a
guardian ad litem) to give an objective option. However, the GAL does
not represent the ward and they tend to be just as much a part of the system as
the government. So, we have a system whereby people are losing their rights
even though we do not quite understand the extent (or lack thereof) of their
illness. Oh, and by the way, there are little to no safeguards preventing this
from happening.
A guardianship can be nothing more
than an exercise of the blind leading the blind. Where the government rubber
stamps orders to deprive people of their rights as they are moved through the
system.
We Pay for Long Term Care All Wrong
As medical care gets better, the
population’s longevity increases. However, just because someone lives longer
does not mean they are ensured to have any quality of living. Many ailments
that were previously a death sentence are no longer as serious of a threat. But
they are an ailment nonetheless. Therefore, the downside of our amazing medical
technology is that we are essentially keeping people alive longer and
prolonging their medical needs. It’s a brutal way to look at it, but the truth
tends to be brutal.
So, more people will need long term
care. We know this because more people than ever are reaching age 65 or over.
And if more people need long term care, then we are going to have an issue
paying for it. We know this because we are experiencing the issue now
and have been for some time. Long-term care can range from $5,000 to $10,000
per month. Currently, individuals have three options to pay for care: 1)
They can use long-term care insurance. This is a good option, but you must qualify,
and you must maintain the premiums. 2) They can pay out of pocket. This is not
a good option because most people cannot afford to pay $5k to $10k per month.
3) Lastly, they can use government benefits i.e. Medicaid. This can be a great
option but is very restrictive and hard to get.
We need a solution. Perhaps further
regulation on long term care facilities would help to lower their exorbitant
fees. Maybe a system similar to Medicaid but easier to obtain would be a cost-effective
alternative. Whatever the answer it needs to be different from the status quo.
Conclusion
We need better solutions to these problems we are facing. The population is aging and still nothing has been done to curb the impending wave of emotional and economic turmoil, which makes you wonder: does the US care about the elderly?
A Special Needs Trust is a special kind of trust called a
D4A Trust, set up in the US Code, which reads:
“This sub-section shall not apply to any of the following
trusts: The trusts containing the assets of an individual under the age of 65,
who is disabled as defined in section 1382C sub-section A, sub-section 3 of
this title, and which is established for the benefit of such individual by the
individual, a parent, a grandparent, legal guardian of the individual, or
court, if the state will receive all amounts remaining in the trust upon the
death of such individual.”
That means the state would be the primary beneficiary.
Remember, we are spending that money on the person for things they need during
their life. This allows us to do that without affecting their current benefit.
So, this can be part of a strategic estate plan for those who have special
needs children or grandchildren.
If, for example, one of your children were to become disabled,
you would want the option for your executor to deposit money into a Special Needs
Trust. This then would not affect benefits such as, SSI (Supplemental Security
Income) for income, Medicaid for health payments for a child if they are in
need because of excess healthcare costs. They may have an SSI payment where
they’ve been declared disabled and are receiving a check to pay for housing and
food. You want to supplement their income but not kick their benefits off-line,
because that payment is income dependent.
A Special needs Trust can also be part of Medicaid Crisis
Planning. If a senior or their spouse needs care, part of the money (in an
unlimited amount), can be placed in a Special Needs Trust. That’s a
non-countable asset transfer even within the lookback period of three years for
assisted living, five years for nursing home Medicaid in North Carolina. This
can help someone qualify for Medicaid benefits to pay for assisted living or
nursing home care. They would still then be able to use their assets in a
productive way to help their family.
Special Needs Trusts are a great planning tool for estate
planning and elder law attorneys.
McIntyre elder law is a great resource for Special needs
Trusts.
If you have any questions, please give us a call
704-749-9244, or go to mcelderlaw.com
Guardianship Proceedings Constitutional in NC? Why You Should Be Concerned.
Instinctively, we are somewhat geared to trust the government. The government and courts, especially in the United States and North Carolina, are set up to help us, right? Not necessarily in the case of guardianships in North Carolina. It is odd to think that in this day and time, there may still be court proceedings that have questionable constitutionality, but this article proposes and examines that the way guardianship hearings are conducted, especially for elderly adults, are unconstitutional on several grounds.
Guardianships
in North Carolina are governed by N.C. General Statute Section 35A. A Guardianship hearing is one in which the
competency of an individual is being questioned; if this person is found
incompetent, a Guardian will be appointed to make the healthcare decisions, financial
decisions, or both of that individual. Guardianship hearings in North Carolina
are closed (or private) hearings. Only
parties to the action and interested parties are allowed in the hearing. Parties to the action include the Petitioner,
Respondent, and the Guardian Ad Litem (GAL). The Petitioner is the party that brought the
action to pursue guardianship over another individual. The Respondent is the person for which
guardianship is being sought. Finally, the GAL is an attorney appointed to both
represent the Respondent and to be a fact finder and report to the court, make
observations as to the competence of the Respondent, and make recommendations
as to who should be appointed as the Guardian if the Respondent is found
incompetent.
A Petitioner may seek Guardianship of
the Person, which is guardianship
over the healthcare and personal decisions of the Respondent. A Petitioner may also seek Guardianship of the
Estate, which is guardianship over
the financial matters of the Respondent. Additionally, a Petitioner may also
seek General Guardianship, which grants guardianship over both the estate and
personal matters of the Respondent.
Guardianship hearings in North Carolina are private, closed hearings that are not open to the public. For example, in most criminal trials, there is a public hearing that allows the public and press to observe and report. According to The National Constitution Center in a discussion of how the U, S, Supreme Court has interpreted and applied the 6th Amendment and particularly the right to a public hearing:
[1]The
Court has enforced the “public” aspect of the trial right much more strictly.
Criminal proceedings may be closed to the public and the media only for
“overriding” reasons, such as national security, public safety, or a victim’s
serious privacy interests.
North Carolina Guardianship hearings,
on the other hand, are not subject to such public oversite or public scrutiny. Logically, one could conclude that a closed
court proceeding would require more constitutional safeguards to protect the
rights of the Respondent; but logic, in this case, would be wrong. Because of their confidential nature, there
are very few statistics kept regarding guardianship cases. Therefore, it is difficult to quantitatively
define the percentage of people found incompetent when a guardianship petition
is brought. As an attorney who practices
in this area of law, I can tell you that almost every guardianship petition results
in a finding of incompetence, and the GAL, rather than a hearings officer, is
actually in charge of this outcome.
I compare guardianships to criminal
court proceedings because both have the ability to strip someone of their
freedoms. Subsequently, a criminal court
proceeding has many constitutional safeguards and requirements protecting the
rights of the accused, such as:
The Due Process Clause under the 14th Amendment;
The Equal Protection Clause under the 14th Amendment;
Supervision of the trial by a judge who is an educated lawyer, trained in the rules of evidence and other critical areas that are crucial to conducting a fair and constitutional hearing;
A jury of peers who will weigh the evidence and decide guilt or innocence. The judge merely decides the length of the sentence;
A public trial, not a closed proceeding, to ensure transparency and accountability;
If the defendant cannot afford private counsel, then a criminal defense attorney will be appointed as a zealous advocate for the accused;
The defendant is required to be present at the trial;
Medical evidence cannot simply be written on letterhead from a doctor with no right to cross examine your accuser (6th Amendment).
These safeguards are in place because the
stakes are high: the accused is facing the loss of personal freedoms, life in
prison, or even death.
To compare, in a Guardianship hearing,
a GAL is appointed to investigate the situation, question all parties, and
report to the court. They are in no way a
zealous advocate for the Respondent. In
fact, the duties of the GAL are deeply conflicted: how can one attorney both
zealously represent the Respondent and his or her best interests, while
simultaneously acting as the court’s independent investigator, reporting their
perspective on whom should be appointed as the Guardian of the Respondent if (and when) the Respondent is found to
be incompetent.
An assistant clerk is in charge of the hearing, not a judge who is an attorney. A clerk may have any level of education and experience, and is generally not an attorney and certainly not an elected judge. But, in practice, the assistant clerk is not in charge of the hearing, the GAL is. A clerk sides with the GAL and rubber stamps the GAL’s recommendation for Guardian the majority of the time. So, in reality, the GAL makes that decision, not the clerk/hearings officer.
Because of this relationship, these
hearings are rigged in such a way that the Respondent is almost always found
incompetent. The Respondent is simply
walked through the process without a second thought—the Respondent doesn’t even
have to be present. All rights and
freedoms can be removed in this hearing, just like a person found guilty of a crime and
facing life in prison, yet the guardianship hearing was not presided over by a
judge and they weren’t even brought to trial. Even a convicted felon and facing life in
prison may retain ownership and control over property, unlike the Respondent in
a guardianship proceeding. They are
often housed in a facility and chemically imprisoned for the rest of their
lives. Is this equal protection under
the laws? Can this be constitutional?
Guardianship hearings do afford an
option for a jury trial as follows:
§ 35A-1110. Right to jury. The
respondent has a right, upon request by him, his counsel, or his guardian ad
litem, to trial by jury. Failure to request a trial by jury shall constitute a
waiver of the right. The clerk may nevertheless require trial by jury in
accordance with G.S. 1A-1, Rule 39(b), Rules of Civil Procedure, by entering an
order for trial by jury on his own motion. The jury shall be composed of 12
persons chosen from the county’s jury list in accordance with the provisions of
Chapter 9 of the General Statutes. (1987, c. 550, s. 1.)
But
how often are jury trials demanded in a North Carolina guardianship proceeding?
Rarely ever. I would estimate less than 1 in 100 guardianship cases are tried
in front of a jury. A jury trial may be
requested by the Petitioner, Respondent, and/or the GAL as the parties to the
action, or by the assistant clerk or hearings officer presiding over the
hearing. Family members, unless they are
the Petitioner, do not have standing to request a jury trial—only a party to
the proceeding may make this request. If
the Petitioner is Adult Protective Services (APS), a division of the Department
of Social Services (DSS) in North Carolina counties under the supervision of
the North Carolina Department of Health and Human Services (NCDHHS), then they
are the adverse party to the Respondent. The APS attorney has no reason to ask for a
jury trial, and often has a very close working relationship with the assistant
clerk conducting the hearing. The
assistant clerk may never have presided over a jury trial, as normally is the
case; if they have, it would be very few cases and assistant clerks, again, are
typically not trained or equipped to properly preside over a jury trial. The GAL rarely, if ever, requests a jury
trial for the Respondent. This brings
into question if GALs are actually acting as zealous advocates for the
Respondents they are appointed to represent. How can a seasoned GAL work hundreds of
guardianship case and never feel compelled to request a jury trial for their
client? Would this fly in a criminal
court? No, it would not. It is a clear indication of a “going through
the motions” mentality and attitude that is pervasive in guardianship
proceedings in North Carolina courtrooms.
The players are not fully to blame, however, as the setup of the proceedings weigh heavily towards a finding of incompetence. The players are very familiar with this process generally, and there is no player appointed as a zealous advocate for the “accused,” the Respondent, who stands to lose all rights and freedoms. With their dual role, the GAL cannot be a zealous advocate for the Respondent. The Respondent may not even be at the hearing. Who is in place to challenge the Petitioner or question the work of the GAL? No one. I have often questioned whether a GAL is even necessary in these proceedings. There is no GAL appointed to independently investigate in other types of court hearings, where the parties do a great job of litigating the issues from which the judge makes an informed decision. Certainly, there is no GAL appointed in criminal felony proceedings where the accused stands to lose freedoms for years. A GAL is not a zealous advocate for the Respondent like an attorney in a criminal proceeding. The GAL serves multiple roles leaving the Respondent without a true zealous advocate.
Does a guardianship hearing adhere to
traditional rules of law and evidence? As
previously discussed, an assistant clerk who is rarely an attorney, and
certainly not an elected judge, is appointed to preside over the Guardianship
hearing. Imagine if a judge presiding
over a criminal trial with a defendant facing life in prison stepped aside and asked
an assistant clerk to sit in his place to preside over the hearing. This would be unprecedented. Civil Rights advocates would be up in arms; criminal
defense attorneys everywhere would turn their attention to this one trial where
an assistant clerk presided over a hearing where the defendant was facing life
in prison. The country simply would not
stand for it. Well, this is the reality in a Guardianship hearing. The rules of law and evidence, which attorneys
spend much of their law school and legal lives learning and refining, are
thrown out the window as an assistant clerk unfamiliar with the rules, and
certainly with their nuances, takes the helm to preside over a similar hearing with
the highest stakes: the loss of all rights and freedoms.
What about an appeal, you may say? The
case is appealable to Superior Court, but an appeal is rarely filed. The appeal for the competency part of the
hearing is a de novo standard, meaning
that there is a new trial on the issue of competency. However, for the portion of the hearing where
a guardian is appointed, this is an “abuse of discretion” standard which is a
very hard burden to overcome.
These
cases are also ripe for ex parte communications, or communication that does not
include all the parties with the presiding hearings officer or judge. This is strictly forbidden in the Rules of
Professional Conduct, but these types of hearings lend themselves to communication
between parties that all work for or are appointed by governmental parties,
except for the family. Because the
parties to the hearing often work closely together and see each other
frequently, if there are no ex parte communications between the GAL, the
assistant clerk, and the APS attorney, then there is certainly the appearance
of impropriety stemming from the setup of the hearings and the frequent
proximity of the parties. This can leave
a private party or immediate family member who is not a party to the action
feeling powerless, helpless and hopeless as they grasp for straws and a footing
in a hearing that keeps them at an arm’s length decision over the fate of their
loved one.
The institution of family is certainly
the foundation for this country, and by in large the human race. Families and familial relationships should be
exalted, revered and respected. In North
Carolina Guardianship proceedings, families simply are not shown this respect,
especially if APS is involved; at that
point the family takes a back seat, and
by “back seat” I mean literally a seat in the audience. The immediate family members remain as
“interested parties,” but are only allowed to sit in the audience of this
closed hearing. They are not sitting as
the Petitioner, and they are not allowed to call witnesses, present evidence,
or cross examine witnesses. The state
and all other parties employed or appointed by it run the entire show. The family is essentially left out to be
silent unless called upon. Why doesn’t
the family have a “say so” or grounds as a party? Since when did the state become more important
than family? It should not be. Family must be held in higher esteem than the state,
or we will witness the demise of our state and nation, which was built upon
individual rights, freedoms and family.
In a criminal court proceeding, it
would be unprecedented to hold the hearing without the defendant being present
for trial. An accused has a Sixth Amendment
constitutional right to cross-examine accusers and examine evidence offered
against him. In a Guardianship hearing,
the Respondent does not have to be present for the hearing and can be found
incompetent with merely the submission of a doctor’s note, leading to all
rights stripped away from you.
Guardianships
in North Carolina may present a case of civil rights violations. Federal law protects
individuals from discrimination or harassment based on the following nine
protected classes: sex, race, age, disability, color, creed, national
origin, religion, or genetic information. Do the North Carolina Guardianship laws
discriminate against individuals based on age? Guardianship cases in North Carolina certainly
affect the elderly the most, and there is a disproportionate impact on them
than other age groups. Therefore, there
should be additional protections and safeguards to protect the elderly and
their families in these closed and private proceedings.
Guardianship is widely overused and should
only be granted if the court cannot find suitable alternatives. The court rarely looks for suitable
alternatives, even though there are plenty of alternatives to a full
guardianship, such as a limited guardianship, reviews, and assistants to help
out the individual.
The hearings, the assistant clerk, and the
players are not fully to blame. They are
merely doing their best to play their role and abide by the law. The sad truth is that the assistant clerk
generally does not want to preside over these hearings and knows they are not
equipped to do so, yet the guardianship laws of North Carolina are crafted in a
way that requires them to handle these cases. This is something that this
attorney believes needs to change, and none too soon. With the aging Baby Boomer population or
“Silver Tsunami,” these cases are going to happen more and more frequently and
will require more of the courts time and attention. The elderly will be even more
disproportionally affected than they are presently, creating more of a civil
rights issue than what currently exist.
How can we change the laws? How can you
help? Great questions. One way is for attorneys to keep challenging
guardianship proceedings and the “quirky” rulings and backwards procedures that
happen there on a daily basis. The
attorney can fight hard for the family, and should do so without fear of
reprisal from the assistant clerk, the GAL, or the Department of Social
Services. These attorneys should appeal
any erroneous ruling by an assistant clerk to be brought to light in front of a
Superior Court judge. If the Superior
Court judges don’t make the right call or give the issues the time and
attention, the attorney should appeal that ruling to the North Carolina Court
of Appeals. Light is the best
disinfectant, and bringing light and attention to Guardianship hearings in
North Carolina is one way to challenge and change them. Included in their
appeals should be the civil rights and constitutional grounds that are
frequently heard by the court of appeals, which will certainly bring much
needed attention to these closed hearings. The elderly certainly deserve proper due
process and equal protection under the laws of the United States and the State
of North Carolina, the same as any other citizen of any age in other
courtrooms. As for me, I will keep
fighting and keep appealing and enduring the gasps and gawks of other players
in this game who wonder, “what the hell is he doing?”
That’s right. The government isn’t happy with simply taking
your hard-earned money each week i.e. taxes. If you give them the chance, they
will take your retirement, your home, or any other assets they deem appropriate
for recovery.
Here’s how: statistically, you have 70% chance of needing
long-term care at some point in your future if you’re over the age of 65.
Paying for long-term care can be exorbitant. It can range anywhere from $5,000
to $10,000 a month. If you’re anything like the normal American, you
cannot afford that large of a cost for very long. Therefore, you may need to
get qualified for Medicaid to cover the cost of care.
Most people don’t walk around already qualified for
Medicaid. Therefore, most people fall into two traps set by the system. 1. They
assume that since they don’t currently qualify for Medicaid, that they can’t
get qualified; and 2. they fail to protect their assets. The result of mistake
number 1 is that you are forced to liquidate and spend every hard-earned asset
on care before Medicaid will kick in. The result of mistake number 2 is that
when Medicaid does kick-in, they can take your hard-earned assets to recover
what they’ve paid.
Medicaid does have some strict thresholds for qualification
and they also have some strict rules for recovery of assets. Thankfully, people
like me sit around all day thinking about ways to get people qualified and
prevent them from losing their assets.
Despite your level of assets, or income, with some guidance you may be able to qualify for Medicaid without losing everything in the process. If you have questions about long-term care or asset protection call the experienced attorneys at McIntyre Elder Law today (704) 359-7040.
If you have questions about protecting property, allow the experienced attorneys at McIntyre Elder Law help you today. Call (704) 259-7040.
The Government’s Loophole to Take Your Protected Property
Every day, attorneys exploit useful
law and policy to help individuals protect their hard-earned assets. Not only
are these attorneys saving people’s homes and retirements, they are also
providing the public with a rare commodity, peace of mind. However, if you’re
the least bit cynical—which attorneys are paid to be—that peace of mind may
fade as you wonder how the government could undo what you did to protect your
legacy.
The simplest way the government
could undo protection is to change the law. That’s right, the government could
just say “we no longer want you to be able to protect your property with a
trust, deed, etc.” This would have huge consequences and would force lawyers to
think outside the box to get around these new prohibitions in order to save
people’s property. Inevitably, much of the “getting around” would develop
through countless litigations and the loopholes beneficial to individuals would
develop along with the case law.
But what if you’ve already had the
foresight to plan ahead and put thee now prohibited protections in place. Can the
government actually undo what’s already been done? The answer is a lawyer’s
favorite phrase: “it depends”.
The thing with property protections
is that the deal with property. Regardless of whether that property is
personal or real property, the Government is limited in how they can take it.
After all, we have this little provision in the Bill of Rights called the Fifth
Amendment. The Fifth, among other things, says that the government cannot take
your property without just compensation and due process of law. This means that
the, typically, government must give you something in return for what they
take, and you have the chance to be heard before their allowed to do so. For
example, if the government wants to take a strip of your front yard to widen a
road, you have the opportunity to argue why they should not be able to take it,
but even if you lose, they still have to pay you for it.
Another factor working in the favor
of the individual is the generally recognized principle that retroactive laws
are unfavored. This means that if the General Assembly of North Carolina adopts
a law, law makers are unlikely to allow it to apply retroactively. This is
because retroactive application of a new law tends to be patently unfair. For
example, let’s say the government raises property taxes, it’s enough of a
burden to have to pay a higher amount in the future, but to also be forced to
pay that amount for past years would be unconscionable.
The courts are also careful to
apply news laws to the past, not only because ex post facto (the latin
term) laws are disfavored, but they also raise Constitutional concerns. What
this breaks down to is that a retroactive application of a change in the law is
very rare.
So, what does this mean for you?
The only certainty is that the future with be uncertain. State’s budgets wax
and wane and laws change as a result. However, history gives us some
reassurance that we have done so far cannot easily be undone. So, what if you
want to put protections in place, but you’re scared that the laws may change?
It’s like the old saying goes, you make hay while the sun shines.
If you have questions about protecting property, allow the experienced attorneys at McIntyre Elder Law help you today. Call (704) 259-7040.
Many people assume that even if their parent died without a
will, they will still be entitled to inherit by virtue of their familial
relationship. This is not always the case.
Let’s say that your father passes away without a will—also
known as dying “intestate”. Although your father and mother were very much in
love when you were born, they never legalized their relationship. You contact
the administrator of the estate to get an update on your inheritance and they
tell you that you must prove that you’re the child of your father before they
can distribute anything to you.
Can they do this? The answer is yes. When a father passes
away with children who were born out of wedlock, those children or their
representative must prove their “legitimacy” before they will be entitled to
their share of the estate.
It is not enough that the father’s name is on the child’s
birth certificate. They must have been formally legitimized by the adoption
process, by the putative father filing a petition with the court, or by
subsequent marriage of the putative father and birth mother.
Proving whether an individual is a legitimate child of the decedent is a rare issue. For obvious reasons, it does not apply if the decedent is the child’s mother. But due to North Carolina’s antiquated laws, the manner in proving one’s relation to their putative father is rather restricted. If you have questions about your inheritance or the probate process in general, give the experienced attorneys at McIntyre Elder Law a call at (704) 259-7040. LEARN MORE AT: mcelderlaw.com/probate.
As an Elder Law attorney, one of the main questions I get is “how do I save my assets”? What is implicit in this question is the fact that your assets are at risk as you age. To understand how to save your assets, it is first important to know the risks you face. We’re going to talk about the main one: Long Term Care.
The numbers go like this, 70% of individuals over the age of 65 will need some type of long-term care in the future. Bearing in mind, that some people pass away before needing long-term care, that number is a pretty conservative estimate. A 70 plus percentage chance of needing long-term care means that paying for the cost of care should be paramount in your planning for the future.
Without a proper plan, you may have to pay the cost of care out of pocket. Considering that the average cost of care can range from $5,000 to $10,000 per month, it won’t take long until you end up liquidating all of your assets and hand everything over to the long-term care facility.
How do you prevent this from happening? One option is to get Medicaid to cover the cost of care. Medicaid is a program that you pay into your whole life. Every time you earn a paycheck, a little bit gets taken out for Medicaid. So, you may as well utilize it. The problem most people have is figuring out how to qualify for Medicaid AND preserve your assets. That’s where an experienced Elder Law attorney can help.
Whether it’s through a spend down, trust work, deed work, or a combination of the three, there’s a lot of options out there to get qualified for Medicaid, save your assets, and have the cost of care covered. If you have questions about preserving your assets and paying for long-term care, give the experienced Elder Law attorneys at McIntyre Elder Law a call at (704) 259-7040.
Not planning to protect money and real estate as a married couple can keep them vulnerable to lien recovery for long term care debts.
First, what is the doctrine of Necessaries? This doctrine
in North Carolina means that one spouse may be held responsible for the other
spouse’s medical bills. These medical bills can include hospital bills, doctor’s
bills and yes, nursing home care bills.
Why does the fact that a surviving spouse may be
responsible for the other spouse’s medical bills matter? Well, the obvious
answer is that the surviving spouse would have to pay those bills… But… If the
surviving spouse failed to pay those bills then those bills could attach to the
surviving spouse’s estate when the surviving spouse passes away.
For example: If the surviving spouse passes away and
they owned a home, maybe other real estate, perhaps some monies and/or
investments that they wish to pass to their children and grandchildren, then the
debts of the spouse that predeceased the surviving spouse could then be
attached to those assets as they pass through the probate estate or estate administration
of the 2nd (surviving) spouse.
The surviving spouse, no doubt, may feel an extreme sense of
confidence that they have no debt and that they will not be burdened by the
spouse who passed first. In the example above, let’s posit that the first
spouse needed extensive nursing home care. The state may even send a lien
notice after that spouse passes away that (for the purposes of this example) $126,000
is owed to the State of North Carolina, Department of Health and Human Services
(DHHS). The surviving spouse may even ignore this notice, not realizing that
this amount will attach to his/her estate when they eventually pass away and
risk sacrificing assets that would otherwise pass to the next generation lien
free.
Are there ways to save the assets of the surviving spouse
from these liens of the deceased spouse? Yes. There are multiple ways to
prepare the assets of the surviving spouse to not only protect the home, other
real estate, money and investments but to also keep the surviving spouse in
control of those assets for the remainder of their lives.
Deed planning with deeds like life estate and ladybird deeds
can keep one in control of their properties for the rest of their lives and
protect them from a recovery under the Doctrine of Necessaries or because of a
personal lien they may have at their death. Trusts can also help protect assets
and pass them lien free to loved ones.
We at McIntyre Elder Law would be glad to talk through
options with you. We can help. You may call us at: 704-749-9244 or reach us
online at www.mcelderlaw.com.
Should I Use a Reverse Mortgage to Pay for My Long-Term Care?
As elder law attorneys, we frequently get questions regarding a variety of financial products available to seniors. One such product we are asked about on almost a daily basis is the reverse mortgage. With 70% of individuals over the age of 65 going into long-term care at some point in their lives, it becomes a primary concern for seniors to determine how they will pay for their cost of care—especially when you consider the astronomical costs associated with long-term care (from $5,000 to $10,000 per month). One of the ways available to attempt to pay for long-term care is using a reverse mortgage. But, is this the best option?
Let’s start by defining it. A reverse mortgage is a loan whereby you transfer the equity in your home into monthly payments. This results in a reduction of some or all of your equity and an increase in your monthly income based on the agreed payment schedule. Based on the definition, you may already start seeing how this arrangement can be risky.
First of all, you will lose the equity in your home. This means that your main asset—the one you have worked tirelessly for yours to pay for—will once again be encumbered by a loan. This also means that if you want to pass your home along to your children, they may be receiving a burden rather than an asset.
Second, the payments are limited to the equity you have in the home. Thus, if you still owe a substantial amount or your home is not worth much money, you’re depleting the equity for a very small pay out.
Third, it won’t pay for your entire cost of care. Unless you have a home worth millions of dollars, a reverse mortgage will likely not pay enough money to cover the entire cost of your long-term care. Equity in the home tends to pale in comparison to the costs of a facility over the span of a few years. Therefore, you may be risking your home to cover only a fraction of your costs.
Fourth and finally, there are better options. Planning early on can allow you to utilize long-term care insurance in a tactical way to cover your cost of care. But, even if you do not qualify for long-term care insurance, you may still have the option of having Medicaid or VA Benefits pay out for you. These are viable options that will help you cover future costs while also preserving your assets.
At McIntyre Elder Law, we take an asset preservation approach. This means that we create a strategic plan for you whereby we seek to help you cover your cost of long-term care and keep what you own so that you can pass your legacy to your loved ones. You do not have to give, sell, or otherwise liquidate your assets to ensure your future. Whether it is planning for Medicaid, VA Pension Benefits or planning with long-term care insurance, we can find the plan that fits your needs, goals, and financial situation. Call us today (704) 259-7040.
I’m Greg McIntyre and this is the elder law report. Today I want to talk about long-term care crisis planning.
What is long-term care crisis planning?
Let me give you an example.
If a loved one, such as a spouse or parent needs assisted living or nursing home care, let’s say they are headed to care, or are already in care and lots of money is being spent down, assets are unprotected, then what do you do?
Can you activate a veteran’s benefit or Medicaid benefit to help pay? And the answer is, Yes.
That’s what it is. It’s a situation where someone needs care and we’re trying to figure out how to protect their assets. These assets could be retirement assets or your home. We’re also trying to figure out how to pay for the care.
Misconceptions versus Reality
What can you do?
A Common Misconception
You Cannot Protect Assets.
This is totally untrue.
The Reality
In most cases, most assets can be protected. We can protect close to one hundred percent of the assets if we are given the chance to do so.
Many people think they must spend all their money on care and lose their home before they can get help. This is not true. My job is to see which assets we can save and what benefits we can access to pay for care. There is rarely a situation where we cannot save the assets, and we try and save as close to one hundred percent of the assets as possible.
Just don’t listen to street lawyers, the word on the street, because it’s usually wrong.
Patient Monthly Liability (PML)
What this means is, a person’s income needs to be paid to an assisted living or nursing home facility because Medicaid will only pay for the portion the income doesn’t pay for. This can be quite a shock to people.
The Community Spouse
This is a program for the (healthy) spouse, where they may be able to keep a portion of their spouse’ income so they can keep paying the house payments and living expenses.
Assets versus Income
This can help if you are confused about what constitutes an asset versus an income.
Assets
Assets are everything you have already made, the money you have already accumulated. Such as, your house, car, bank account, retirement account, 401k, IRA, stocks, bonds, annuities.
Income
Income is your job income, social security income, pension income, things you cannot liquidate, money you get once a month.
That differentiates assets versus income.
Our Process
What do you need to do when you come and see us?
What do you need to do to put in an application?
Our goal is to come up with a plan to protect your hard-earned money and property. We also want to help you pick a benefit to access if you don’t have long-term care insurance.
When you come and see us, bring your financial documents. It helps us to have that information so we can better help you when we present your application to Medicaid. We want to show Medicaid what we have presented to them works under their rules.
So, plan ahead, this is so important.
To get way ahead of the crowd, get your foundational documents in order, General Durable Power of Attorney, Healthcare Power of Attorney, Living Will, Will.
If you have questions about long-term care crisis planning, foundational planning, pre-planning, or long-term care insurance, call our office at 704-259-7040 or visit mcelderlaw.com and sign up for our e-newsletter.
