It is time to summarize some basic concepts with respect to documents needed for estate planning.
There are several basic documents that I discuss with every older client whom I represent. However, many of these ideas also apply to younger individuals.
The basic documents for every person, particularly the elderly, are a will, a living will and a power of attorney.
A will is a document that directs how the assets in the name of the individual shall pass upon their death. The nature of the will depends upon the person's situation. For example, the purpose of the will might be to minimize death taxes, which can involve complicated estate planning. Or, the will might be that of a healthy spouse whose partner is in a nursing home, which has rather complicated considerations also.
However, one must keep in mind that a will is not the only document that disposes of assets upon an individual's death. Assets that pass under a will are known as probate assets and those that pass outside of a will are known as non-probate assets. Non-probate assets are those that may pass by beneficiary designation, such as life insurance, retirement plans or annuities. The beneficiary designations of such non-probate assets should be coordinated with the plan under the will.
It is my practice not to dictate to a client the terms of a will. I point out the alternatives, discuss advantages and disadvantages of different approaches, review the assets with the client and let the individual decide what is the best course to follow from a personal point of view. That is, in addition to the objective legal reasons for a will, it is the client's subjective intent (after understanding all possibilities) that should govern the overall estate plan.
It must be kept in mind that a will performs two functions. One is to dispose of one's assets in the appropriate manner. A will is also a legacy. That is, an individual often feels that his or her child has not met expectations and desires to "disinherit" such child. I point out to the individual that such language will be the individual's "legacy" and must be carefully considered before undertaken.
With respect to a power of attorney, the first point of significance is that the document must be "durable". That is, at law, a power of attorney is a consensual agreement by the person granting the power (the principal) and the individual given the power (agent). If an individual becomes incompetent, the ability to consent ceases. Therefore, it is necessary that the power of attorney be "durable" and, therefore, survives the incompetence of the principal. That is, for an elderly person, there is a need for someone to act on one's behalf if such individual becomes incompetent.
There is a form of power of attorney known as a "springing" power of attorney, which becomes effective only if a person is incompetent. I do not recommend such a power since a durable power of attorney avoids the issue of incompetence and a springing power of attorney would only be effective if an individual becomes incompetent. Therefore, the "springing" power of attorney has no benefit.
The key to a power of attorney is that it has language so that all assets of the principal are "accessible" to the agent. In this way, if the principal needs money for any reason, including a nursing home, and is not competent, the agent can "access" these funds.
Also, a power of attorney should have special language, such as the ability to access medical records if the principal (who generally is an elderly person) is unable to do so. The durable language allows this result. Also, a power of attorney should include planning language to cover a situation in which a person may enter a nursing home in the future. The language dealing with Medicaid planning depends upon the situation of the principal and will be discussed more fully in another blog.
It is my practice to reference any type of asset an applicant may have to make sure the power of attorney can be used to liquidate such asset. However, not all companies will require that the power of attorney have language relating to the specific asset. It is important that the power of attorney be done as soon as possible, particularly if the individual is failing. A power of attorney can only be done if the individual is competent.
A living will is a document which provides as to whether extraordinary methods be taken in case an individual cannot make the decision by himself or herself. There are several types of living wills. One form known as an "Appointment of Health Care Representative" gives the individual appointed under a living will the general authority to carry out the wishes of an individual based upon the individual's intent as conveyed to the appointee during lifetime. A second type of living will known as an "Advance Directive for Health Care" sets forth the desires for the individual in advance. For example, this document provides that treatment be withheld if it is "experimental". Such language creates an ambiguity as the definition of "experimental" can vary from medical institution to medical institution. Therefore, it is my recommendation that if an elderly person has someone that he or she trusts, the general grant of authority under the Appointment of Health Care Representative is preferable.
As can be seen, pro-forma language is not suitable for any of the documents discussed, and must be discussed individually in detail. That is, the client makes the final decision with respect to the format of each document, after being fully informed.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© November 2010, Post 124
Monday, November 29, 2010
Monday, November 22, 2010
Medicaid Planning for Residents
Suppose a husband and wife own a residence and one enters a nursing home. There are several possibilities regarding Medicaid planning. Firstly, the home is an exempt resource when one spouse enters a nursing home, as indicated in Post 11. If the home is transferred to the community spouse, and is sold or gifted by the community spouse after the applicant receives Medicaid, the home is protected.
Assume community spouse wants to reside in a home, but not the primary residence that currently exists. If the primary residence is sold, a second residence purchased within three months is exempt to the extent of the proceeds of sale of the first residence - see N.J.A.C. 10:71-4.4(b)8.ii.
Another possibility is to sell the residence and the community spouse move into an apartment. At the first day of the first month of sale, the community spouse resource allowance would apply to the community spouse and once the spenddown requirements are met, eligibility would be attained.
For a single person entering a nursing home, the house is exempt until sold for such period as allowed by the County Board. The County Boards vary on the time allowed. The balance of the proceeds would be subject to the spenddown process.
Finally, if a husband and wife have cash and live in an apartment and one enters a nursing home, purchase of a home by the community spouse would protect the cash and would be an exempt resource. Also, the community spouse resource allowance would enter into the picture.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© November 2010, Post 123
Assume community spouse wants to reside in a home, but not the primary residence that currently exists. If the primary residence is sold, a second residence purchased within three months is exempt to the extent of the proceeds of sale of the first residence - see N.J.A.C. 10:71-4.4(b)8.ii.
Another possibility is to sell the residence and the community spouse move into an apartment. At the first day of the first month of sale, the community spouse resource allowance would apply to the community spouse and once the spenddown requirements are met, eligibility would be attained.
For a single person entering a nursing home, the house is exempt until sold for such period as allowed by the County Board. The County Boards vary on the time allowed. The balance of the proceeds would be subject to the spenddown process.
Finally, if a husband and wife have cash and live in an apartment and one enters a nursing home, purchase of a home by the community spouse would protect the cash and would be an exempt resource. Also, the community spouse resource allowance would enter into the picture.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© November 2010, Post 123
Tuesday, November 16, 2010
The Role of a Legal Assistant in an Elder Law Attorney's Office
The following is a description of how I utilize the talents of my qualified Legal Assistant and her comments regarding work performed:
My name is Juliet Rudy and I am often asked what are the duties of my job as a Legal Assistant. The purpose of this blog is to describe such duties.
Working in an Elder Law Attorney's office is varied and interesting. Meetings with clients can be fascinating. I often sit in on these meetings and take notes. Accurate note taking is highly important so that everything is correctly documented. If the client is applying for Medicaid, there will be numerous documents to request from the client. Once we have all these documents, the legal assistant needs to gather all the information and, in due course, apply for a date for the Medicaid application. The legal assistant will often draft a Transmittal Letter to accompany the application and often attend the meeting with the County Board of Social Services on certain cases. Of course, all documents are reviewed by Counsel prior to submission.
If the matter is an estate planning matter, the legal assistant will often draft the will by himself or herself after having interviewed the client. A more complicated will would require an attorney's assistance. Other documents which can be drafted by a legal assistant are the power of attorney and living will. Again, an attorney is always needed to review documents before drafted in final form.
Other areas of law covered in an Elder Care Attorney's office may include estate administration. A legal assistant can apply for probate and take on most of the duties of an administration like drafting and sending out letters of probate and undertaking a child support search under the attorney's guidance.
In a smaller office, a legal assistant may have general administrative and accounting duties, in addition to the legal duties.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© November 2010, Post 122
My name is Juliet Rudy and I am often asked what are the duties of my job as a Legal Assistant. The purpose of this blog is to describe such duties.
Working in an Elder Law Attorney's office is varied and interesting. Meetings with clients can be fascinating. I often sit in on these meetings and take notes. Accurate note taking is highly important so that everything is correctly documented. If the client is applying for Medicaid, there will be numerous documents to request from the client. Once we have all these documents, the legal assistant needs to gather all the information and, in due course, apply for a date for the Medicaid application. The legal assistant will often draft a Transmittal Letter to accompany the application and often attend the meeting with the County Board of Social Services on certain cases. Of course, all documents are reviewed by Counsel prior to submission.
If the matter is an estate planning matter, the legal assistant will often draft the will by himself or herself after having interviewed the client. A more complicated will would require an attorney's assistance. Other documents which can be drafted by a legal assistant are the power of attorney and living will. Again, an attorney is always needed to review documents before drafted in final form.
Other areas of law covered in an Elder Care Attorney's office may include estate administration. A legal assistant can apply for probate and take on most of the duties of an administration like drafting and sending out letters of probate and undertaking a child support search under the attorney's guidance.
In a smaller office, a legal assistant may have general administrative and accounting duties, in addition to the legal duties.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© November 2010, Post 122
Tuesday, November 9, 2010
Current Status of Medicaid Planning
As indicated in Post 113, reverse half-a-loaf planning is no longer viable in the state of New Jersey. Therefore, other than the special techniques relating to the home or exempt transfers, the only planning available would be five-year planning.
That is, a potential applicant should transfer all resources and retain sufficient resources to pay for five years' nursing home costs. Therefore, any monies remaining after the look-back period have been saved from nursing home costs.
It is hoped that reverse half-a-loaf planning will be reinstated as indicated in my argument set forth in Post 113.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© November 2010, Post 121
That is, a potential applicant should transfer all resources and retain sufficient resources to pay for five years' nursing home costs. Therefore, any monies remaining after the look-back period have been saved from nursing home costs.
It is hoped that reverse half-a-loaf planning will be reinstated as indicated in my argument set forth in Post 113.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© November 2010, Post 121
Wednesday, November 3, 2010
Methods of Informing the Public of the Nature of Your Practice
In today's legal world, it is necessary to inform the public of the services which your office can render.
For example, I have found the website as an invaluable tool for describing the nature of your practice and type of services rendered. I have been fortunate enough to have a friend who is an expert on providing information by website and other means to inform the public of the work offered by my office.
It is highly recommended that an Elder Law attorney retain a person with such expertise, since the presentation of your work and experience in the proper manner requires a knowledge of the methods to inform the public.
Of course, public speaking in any venue is important. The key to public speaking is to adjust the nature of your speech to your audience. For example, I have spoken before local groups, support groups, continuing legal education programs and webinars, at law school and at national conferences. The topic may have been the same, but the level of technicality was adjusted for the audience.
Finally, it is absolutely necessary to have colleagues with whom you can discuss pending issues, as "no man is an island", especially in the Elder Law area.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© November 2010, Post 118
For example, I have found the website as an invaluable tool for describing the nature of your practice and type of services rendered. I have been fortunate enough to have a friend who is an expert on providing information by website and other means to inform the public of the work offered by my office.
It is highly recommended that an Elder Law attorney retain a person with such expertise, since the presentation of your work and experience in the proper manner requires a knowledge of the methods to inform the public.
Of course, public speaking in any venue is important. The key to public speaking is to adjust the nature of your speech to your audience. For example, I have spoken before local groups, support groups, continuing legal education programs and webinars, at law school and at national conferences. The topic may have been the same, but the level of technicality was adjusted for the audience.
Finally, it is absolutely necessary to have colleagues with whom you can discuss pending issues, as "no man is an island", especially in the Elder Law area.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© November 2010, Post 118
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