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Special Assistance and Long-Term Care Medicaid… Different Rules and Asset Protection

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I’m Greg McIntyre of McIntyre Elder Law helping seniors protect their assets and legacies.

Today we are going to discuss Special Assistance and Long-Term Care Medicaid. This is for people who are being hurt by long-term care payments, including nursing home and assisted living care payments. These payments might be draining your bank account rapidly and threatening to force the sale of real estate, including your home.

There are several straight forward methods to help save your money and property, and if we can employ those methods, we can help.

Special Assistance Medicaid

Special Assistance can pay for assisted living and assisted living with a special memory care unit. The income limit for regular assisted living is $1248.50 per person, and for assisted living with memory care is $1548.50 per month per person.

Nursing home care that’s Long-Term Care Medicaid has a different set of rules, and we will talk about it in a moment.

There is a three year look back period for the transfer of assets for assisted living Medicaid under Special Assistance. You can have one car and one home and two-thousand dollars ($2000) in your name as a single person.

Ladybird Deeds can be employed to save the house, and there are other ways to save liquid assets such as money and vehicles so you can pass those on.

Long-Term Care Medicaid

Nursing home care is under Long-Term Care Medicaid. Long-Term Care Medicaid has a five year look back period for the movement of assets. Assets should be repositioned or dealt with within or outside the five year look back period. If it’s within the look back period, five years for nursing home and three years for assisted living, then it must be done within the rules.

There is a five year look back period for general transfer of assets.

A Ladybird deed can absolutely protect your home and surrounding property up to $572,000 this year. In addition, you can use Tenants in Common Deeds to protect other real estate, which is a little more complicated.


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To talk to us you can call our firm at 704-259-7040, or go to mcelderlaw.com/mcp. You can also check out McIntyre Education and Elder Law University at mcelderlaw.com/store. This has a tremendous amount of information available, from ecourses on estate planning and elder law to top podcasts, videos and books that can help you on your journey.

Regards,

Greg McIntyre

Elder Law Attorney

@lawyergreg

704-259-7040

greg@mcelderlaw.com

Schedule Free Consult

How to Keep Heirs from Challenging Your Will

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How Does Your Immigration Status Affect Your Medicaid Eligibility?

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HOW TO AVOID THE MEDICAID DEATH PENALTY

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Introduction 

The Medicaid program is something you’ve paid for your whole life. Much like Social Security, you pay into Medicaid with each paycheck. However, unlike Social Security, even though you’ve paid in, you’re not entitled to recoup your money unless you meet the income and asset thresholds. In that way, Medicaid is rather restrictive. Thankfully, Elder Law attorneys have creative methods to get you qualified regardless of your income and asset levels. But even though you’ve paid into Medicaid your whole life, and you’ve finally become qualified to recoup your investment, Medicaid will still try and recover any money they paid on your behalf.

This is called the “Estate Recovery Lien” or the “Medicaid Death Penalty”. The way it works is that Medicaid will attempt to recover any amount paid on your behalf from the property in your estate after you die. Therefore, one way or another, Medicaid gets to keep the money you paid to it.

So, the question is: how do you avoid this penalty?

 

The Misconception

Let’s first talk about the common misconception that bankruptcy will eliminate the death penalty. To discharge debt in a bankruptcy that debt must have been previously incurred. In other words, the debt must have already “attached”. The Medicaid death penalty isn’t a debt that attaches during life. Instead, it is a method for recovery that allows Medicaid to calculate the amount of debt after your death and recoup the amount from your estate. This makes sense because Medicaid doesn’t know the amount of the debt until you’ve passed since they are paying for your long term care up to that point.

 

The Solution

So how do you avoid the death penalty? North Carolina is what’s called a “limited recovery” state. This means that Medicaid is only allowed to recover what it has been paid by taking it out of the property that passes through your estate and therefore through probate. This means that they can only place a lien on property that passes through your will or through intestate succession if you don’t have a will.

Thus, you want your property to pass outside your will. This can be done in a number of ways. You can place beneficiaries on accounts, create trusts with assigned beneficiaries, or create survivorship rights in your property e.g. re-titling your vehicle “jointly titled with rights of survivorship” 

If none of your property is passing through your estate i.e. the probate process, then Medicaid has nothing to take to recoup their payments.

 

What about the Home?

Thankfully, the home does not have to pass through your estate. You can do deed work to ensure that your home passes outside of your will and directly to your heirs at the moment of your death.

The best way to do this in North Carolina is through the utilization of a Ladybird Deed (LBD). The LBD allows you to essentially place a beneficiary on the home. This means that the home will automatically pass to the beneficiary upon your death and avoid probate altogether. Because the home is not passing through probate (or through your estate), Medicaid cannot place a lien on the property. The added benefit to the LBD is that it does not trigger the lookback period for Medicaid. Thus, the LBD allows you to predesignate who will inherit your property while avoiding the lookback period and any death penalty.

 


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Conclusion

You can avoid the Medicaid death penalty by avoiding probate and allowing Medicaid to reach the property in your estate. To learn more about probate avoidance and Ladybird Deeds, contact McIntyre Elder Law at (704) 259-7050.

Regards,

Brenton S. Begley

Elder Law Attorney

McIntyre Elder Law

“We help seniors maintain their lifestyle and preserve their legacies.”

www.mcelderlaw.com

Phone: 704-259-7040

Fax: 866-908-1278

PO Box 165

Shelby, NC 28151-0165

WILL YOU HAVE TO PAY YOUR SPOUSE’S MEDICAL BILLS?

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WHAT HAPPENS IF YOU CAN’T FIND THE WILL?

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To probate an estate in North Carolina, the Clerk of Court requires that the original copy of the will be filed. But important documents get lost all of the time. Wills can easily be lost in a move, destroyed in a casualty event (e.g. flood, fire, hurricane), or simply misplaced. So, what happens if your loved one dies, and you can’t find the will?

 

Safe Keeping 

It is first worth mentioning some suggestions to prevent loss or destruction of the original copy of the will. Many individuals like to keep their will in their home along with their other important documents. Sometimes it’s a safe, sometimes it’s a desk drawer, and sometimes it’s a shoebox under the bed. If you’re going to keep it in your home, you should have some safeguards. It should be in a place that is protected from theft, fire, and water damage. Thus, it may be worthwhile to invest in a fireproof safe. If you go the safe route, you should probably share the combination/key or its location to whomever you’ve named executor. I’d imagine it would be rather inconvenient to go all “Ocean’s Eleven” on a safe just to retrieve a will.

By the way, some people want the lawyer who drafted the will to keep the original copy in their office. This is not advisable. Law offices are subject to the same calamities as your own home. They also sometimes move locations and lose things.

Your best bet is probably a safety deposit box. These are kept in an area that is generally protected from all sorts of casualty events. Furthermore, it provides (literally) bank level security, mitigating the threat of theft. Also, you get to walk into the vault, which is pretty cool.

 

Only a Copy

Okay, so your loved one didn’t have the chance to read this article and their will was somehow misplaced, what now? Even though you only have a copy, the will can still be probated. However, it is a much more arduous process. Specifically, you must show the clerk sufficient evidence to demonstrate 4 things.

 

  1. The original will was properly executed.
  2. What the original will said.
  3. That the will in question was never revoked.
  4. That there was a diligent search for the original will—in the places it would most likely be found—and it was not found.

 

A copy of the will is going to help significantly in proving these four elements. Although, the clerk will most likely require witness testimony. Witnesses can be anyone who has knowledge of the contents of the will, either because they read it or it was read to them. Probably the best witnesses, however, are the witnesses that attested to the signing of the will or the attorney who drafted the will. 

 

No Copy, No Nothin’

If you don’t have so much as a copy of the will, or if the clerk refuses to accept the copy you have, there is still hope. The decedent’s estate can still be opened and probated. However, the distribution of assets won’t follow the terms of the will. The assets will pass through intestate succession. Typically, if you are an heir close to the decedent (e.g. wife, child) this method of distribution is not ideal, but it is still beneficial. If you are the only heir, it will be the same as if everything was left to you through the will.

 


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What Should You Do?

If you’re having trouble finding the original or a copy of your loved one’s will, you should first look where they keep all of their important documents (read: that old hat box in their closet). Next, you should determine if they own a safety deposit box. If all else fails, seek the assistance of an attorney to determine how to further proceed. 

Regards,

Brenton S. Begley

Elder Law Attorney

McIntyre Elder Law

“We help seniors maintain their lifestyle and preserve their legacies.”

www.mcelderlaw.com

Phone: 704-259-7040

Fax: 866-908-1278

PO Box 165

Shelby, NC 28151-0165

Can you disinherit your spouse?

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Do you have to leave property to your spouse in your will? There are many reasons why you may not want to leave your spouse part of your estate. Maybe your wife is independently wealthy, and you have other plans for your legacy. Maybe your relationship with your husband has deteriorated but you don’t want to go through the difficult and drawn out legal battle of divorce. Whatever the reason may be, you can absolutely cut a spouse out of a will. This will not invalidate the will. However, simply leaving your spouse out of your will does not mean that they are not entitled to a piece of your estate.

North Carolina has enacted legislation to provide options for spouses who may not be receiving their fair share. The rationale behind these laws is that spouses are generally co-dependent. They have co-mingled funds and assets. Thus, when one spouse passes, the other is left in a difficult position because they cannot access the resources they had available when their spouse was alive.

Year’s Allowance

In North Carolina, a surviving spouse is entitled to a “years allowance” which is $60,000 of the estate. The spouse can also receive an additional $5,000 per child if:

  • Children are less than age 22 and full-time students
  • Children are less than age 21 and have been declared mentally incompetent
  • Children are less than 21 and are completely disabled
  • The child is a person person under the age of 18, lived with the decedent, and was under the decedent’s guardianship.

 Obviously, if there is not $60,000 worth of assets in the estate, the spouse will be entitled to whatever amount exists. However, if additional property is found, it will be distributed to the spouse to make up her deficit.

Elective Share

North Carolina also has an elective share statute to protect a surviving spouse. Similar to the years allowance, the elective share allows a spouse to receive a portion of the estate. However, the portion they receive is not a sum certain. Instead they receive a percentage based on the length of the marriage. It breaks down as follows:

  1. Married less than 5 years = 15% of the Total Net Assets.
  2. Married at least five years but less than 10 years, twenty-five percent 25% of the Total Net Assets.
  3. Married for at least 10 years but less than 15 years, 33%of the Total Net Assets.
  4. Married for 15 years or more, 50% of the Total Net Assets.

The “Total Net Assets” include not only property that passes through the will, but all assets of the estate. This includes property of which a beneficiary can be assigned (e.g. life insurance, retirement accounts, bank accounts, etc). Thus, you cannot disinherit a spouse simply by passing property outside the will and avoiding probate. 

Prenuptial and Postnuptial Agreements

So how do you get around these protections? In short, the only way to disinherit your spouse is by mutual agreement. A prenuptial or postnuptial agreement is a contract between the spouses that requires each spouse to agree without duress or coercion. If each spouse is willing to agree, the right of the year’s allowance and elective share can be waived.


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Premarital planning is an important part of your estate plan. You should talk to an estate planning attorney to understand your options.

Regards,

Brenton S. Begley

Elder Law Attorney

McIntyre Elder Law

“We help seniors maintain their lifestyle and preserve their legacies.”

www.mcelderlaw.com

Phone: 704-259-7040

Fax: 866-908-1278

PO Box 165

Shelby, NC 28151-0165

Schedule Free Consult

What’s Your Interest?

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Let’s say you’ve inherited real property or, maybe, you’re looking to pass along some of your own. Either way, do you know what the nature of the ownership interest is or will be? Many people who inherit property receive the property outright, meaning they’re the sole owner. But there are many ways that property interests can pass and there are many benefits to looking at all the options.

 

Tenants in Common 

If you inherit property along with someone else other than your spouse, you will hold the property as tenants in common (unless the will/trust specifies otherwise). As tenants in common you have an undivided interest in the property. This means that you may own a one-half or one-third interest in the property ,but you still have an equal right to use and occupy the property.

Under this form of ownership, there are some duties owed to the other owners. For example, you cannot lay waste to the property or you could be liable for those damages. Furthermore, if you “oust” one of the other tenants e.g. you affirmatively deny them the ability to use, occupy, or enjoy the land/home, the other tenants may charge you rent based on the fair market value of the property.

When one of the tenants passes, their property interest will pass to their heirs. Their heirs will assume their place as a co-tenant. This method of ownership does not avoid probate and the interest/title in the property must pass through the estate to vest in the heir. 

 

Joint Tenants with Rights of Survivorship (JTROS)

JTROS is very similar to tenants in common. A very important distinction, however, is what happens to the property interest when one of the tenants dies. Let’s say that A and B own a home as JTROS. When A dies, her property interest will immediately go to B. B will be the sole owner of the property immediately upon A’s death.

This method of ownership avoids probate. The interest in the land does not pass through the estate of A because her interest immediately vested in B when A died.

 

Tenancy by the Entirety

This form of ownership is essentially JTROS for married couples and is only available for married couples. In NC, if a married couple purchases property during their marriage, it is, by default, title tenancy by the entirety. If property was purchased prior to the marriage, it will need to be re-titled to make it tenancy by the entirety property.

Similar to JTROS, there are survivorship rights in the property, meaning if one spouse dies, the other immediately owns the whole property. Also, similar to JTROS, this form of ownership allows the owners to avoid probate.

The important function of tenancy by the entirety is its protection against creditors. If a couple owns property as tenants by the entirety, the creditor of oneof the spouses cannot go after the property. Note, if it is a creditor of both of the spouses, the property is fair game.

 

Life Estate 

A life estate is a lifetime interest in property. The interest can be measured by the life of the individual holding the interest of by another person (called: “life estate pur autre vie”). Let’s say A owns a home and she wants B to live in that home but she wants it to pass to her daughter C when B dies and not B’s heirs. A would give B a life estate interest in the home and make C the “remainderman”. This means that the home would be B’s for life, and when B dies, the home will be solely owned by C or C’s heirs.

The holder of the life estate interest (B) can use and occupy the property. However, they are restricted from selling the property, and can be liable for laying waste to the property.

This form of ownership avoids probate because the interest in the property held by C immediately vests in C upon B’s death.

 

Enhanced Life Estate Deed (Lady Bird Deed)

A ladybird deed is very similar to a life estate deed. Its main delineation is how it is treated with respect to Medicaid. Under the Medicaid rules, an applicant can’t have gifted property within the applicable lookback period or they will be subject to the penalty. However, a ladybird deed is an exception to that rule. It allows the owner of the property to essentially place a beneficiary on the property as if it were a life insurance policy or an IRA without it being a gift that triggers the lookback period.

Furthermore, the owner of the home is not restricted from selling or conveying the property, nor will they be liable for laying waste to the property. Also, the property does not pass through probate. The interest in the property immediately vests in the designated “beneficiary” upon the owner’s death. In North Carolina, Medicaid cannot place liens on property that doesn’t pass through the estate i.e. property that goes through probate. Thus, the ladybird deed allows the owner to place a beneficiary on the property, avoid triggering the lookback period, and avoid it being subject to any Medicaid liens.

So, what does this look like? Let’s say A owns a home and some land and wants to apply for Medicaid. She eventually wants B to inherit the home. However, she doesn’t want to trigger the lookback period by gifting the home to B. She also wants to avoid Medicaid from placing any sort of lien on the home. So, A has her lawyer draft a ladybird deed on the home and the surrounding property. Eventually, A passes away and the home goes to B immediately upon the death of A. B is the sole owner of the home and hold the property free of any lien. Note, a ladybird deed can be place on a home with more than one owner and more than on “beneficiary” can be designated.

 


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Conclusion

It is important to understand the nature of your ownership interest in your property or the property you inherit. Before you make your estate plan, you should sit down with an attorney to review the best options that fit your desires, your finances, and your family.

Regards,

Greg McIntyre

Elder Law Attorney

McIntyre Elder Law

“We help seniors maintain their lifestyle and preserve their legacies.”

www.mcelderlaw.com

Phone: 704-259-7040

Fax: 866-908-1278

PO Box 165

Shelby, NC 28151-0165

Schedule Free Consult

The 3 commonly held beliefs about Money, Aging and Estate Planning

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This is about the 3 most commonly held beliefs about Money, Aging and Estate Planning.

I see people all the time with these beliefs. They’re in bad situations with money, estate planning and long-term care.

So, what are the beliefs and realities?

The first commonly held belief is:

Medicare pays for Long-term care.

Long-term care is In-home, assisted living and nursing home care.

Answer: Medicare will NOT pay for your long-term care.

If you need to go to an assisted living or nursing home facility, Medicare will Not pay for that.

So, what does Medicare pay for?

If I had to go to hospital for a stay, (usually not a long stay), the hospital would stabilize me and move me to a rehabilitation facility where I’d work on getting better with the help of a physical therapist.

You will hear there are one-hundred days coverage. The first twenty, and the next eighty.

For the first twenty (20) days of that care, Medicare will pay. After that, as long as I’m continually improving, Medicare will pay a partial payment on the next eighty (80) days.

If within that one-hundred days, the doctor decides to send the patient home or to a long-term care facility, then Medicare stops paying. You can file an appeal on that, but those are the rules.

After the one-hundred days or within that time, if Medicare stops paying and you have to go to a long-term care facility, who then pays? You pay out of your pocket.

The sad reality is it’s expensive. Many people cannot afford it. They lose everything they’ve worked for their entire lives to pay for their last few years.

So, who can pay if Medicare has stopped paying?

If you have long-term care insurance, which I highly recommend, then the insurance will come in and pay at that point. Having long-term care insurance can also give you time to work on an estate plan.

If you do not have an estate plan, how can you avoid losing all your money and property to long-term care payments or Medicaid liens?

If you are a veteran, veteran’s benefits can help pay for long-term care.

Planning ahead costs you less. Planning ahead gives you, your spouse and your family peace of mind.

For better peace of mind, estate planning can help because you no longer worry about everything you’ve worked for your entire life. You know you will be taken care of, you have set up the foundational documents to protect your money and property for your future and the future of your children and grandchildren. In your retirement years you don’t want to be stressing over losing it all because of a long-term care situation.

The second commonly held misconception is:

I don’t need a Will, or an estate plan because I’m married, and my spouse will receive everything anyway.

Under the rules of intestate succession which means dying without a Will, which I like to call, The States Will, if you die without a Will, (depending on your state laws, and how long you have been married), your spouse is only going to receive a portion of what you have. It could be fifty percent (50%), or one-third, depending on how many children you have.

To ensure your spouse gets everything, you must have an estate plan.

The third commonly held misconception is:

I have plenty of money. I can pay for long-term care.

If you needed care and wanted to pay for in-home care, there are ways to do that.

1-    Long term care insurance.

2-    Trust planning can put assets aside to help pay.

Many times, nursing home care can easily cost anywhere between $60,000 to $100,000 or more per year. This will quickly spend down even a large estate.

If you want to prevent that, you must plan ahead.

I have sat down with a spouse who believed she and her husband had enough money, but her husband had been in a nursing home for two years and she was scared she’d lose everything, including her home. They didn’t plan ahead.

My grandfather, Worth McIntyre, worked his entire life to get a small farm house in Lattimore, NC. He was in an assisted living facility for the last fourteen years of his life. It was a great facility, and he enjoyed it, but he lost everything. He did not have an estate plan.

My grandmother on the other side of my family had an estate plan. She was able to protect and keep everything. She left her home and assets to her children.

I hate to see people lose their home and assets because they didn’t plan ahead. I hate that because I know I could have helped.

If you are interested in protecting your home and assets and still be in control of your assets, and leave open long-term care options, call out office, we will be glad to discuss options and help you. Call 704-259-7040 or go to our website mcelderlaw.com and sign up for our free e-newsletter.

Greg McIntyre, JD, MBA

Elder Law Attorney

704-259-7040

greg@mcelderlaw.com

Schedule Free Consult








The Simultaneous Death Act

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We attempt to provide for every contingency in a will. When we plan for the future, we contemplate our own death as well of the death of our spouse. We then try and provide for some alternatives depending on who should pass first. But what happens if both spouses pass at the same time?

Many states, including North Carolina, have adopted the Uniform Simultaneous Death Act. The Act provides that if spouses die within 120 hours of one another, each spouse will be treated as if he or she were the survivor. This means that nothing is passed between the spouses’ estates. In other words, neither of the spouses inherit anything from the other. Their property would then pass to the beneficiaries, other than their spouse, as set forth in their will. If alternative heirs are not contemplated by the will, the property passes by intestate succession.

This also applies to survivorship property and life insurance policies. If the beneficiary dies within 120 hours of the principal’s death, the property/life insurance proceeds do not pass to the beneficiary’s estate. Survivorship property includes real property, trusts, payable on death accounts, and really anything to which you can assign a beneficiary.

The benefit of planning ahead is that you can provide for these contingencies in your will or governing instrument. Your will can dictate how your property will pass if your spouse’s death occurs simultaneously with your own, you can have your deed determine who will get your real property of the holder of the survivorship interest passes along with you, and you can designate alternative beneficiaries on your life insurance policy.

The thing about planning for the future is that it must be practical. Car wrecks, tornadoes, and communicable illnesses are all examples of common disasters that could result in the simultaneous death of two spouses. Unfortunately, disasters causing simultaneous death are not uncommon. And if your will or governing instrument does not provide otherwise, the manner in which your property will pass will be dictated by the state.


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You should make sure that your will or governing instruments continue to be in line with your estate plan in the event of a simultaneous death.

Regards,

Brenton Begley

Elder Law Attorney

McIntyre Elder Law

“We help seniors maintain their lifestyle and preserve their legacies.”

www.mcelderlaw.com

Phone: 704-998-5800

Fax: 866-908-1278

112 S. Tryon St.

Suite 760

Charlotte, NC 28202

Schedule Free Consult

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