Steps To Be Taken When Planning Is Uncertain

Steps To Be Taken When Planning Is Uncertain

A common situation for a lawyer is to confer with a spouse who explains that her husband’s physical and mental condition are unclear at this point. The husband is in the hospital with a serious and potentially life-threatening condition. If the problems can be cured, the husband will then go to rehab. If that is successful, a nursing home is a possibility.

The joint assets (basically bank accounts) are approximately $200,000, and the assets in the wife (also basically bank accounts) are approximately $100,000. Due to the husband’s tenuous situation, any Medicaid planning would appear to be inappropriate particularly in light of the fact that the husband might pass away.

However, there are basic steps that should be taken even in a situation such as the above:

1. Assets should be transferred into the name of the wife for management purposes as there is an appropriate power of attorney.

2. With respect to a will for the wife, see Post 21 and reference to my article Practical Medicaid Planning – Part II, 1999 “Estate Planning Issues,” by Levin, Mark. Home should be transferred into wife’s sole name (see Post 11).

3. Family should verify accessibility of all assets. That is, make sure that the power of attorney for the husband will be acceptable by all banks or financial institutions. If not, revise the power of attorney.

4. Leave one account for husband as a receptacle for social security and/or pension.

5. Prepare a list of any transfers after February, 2006, which will remain an issue until after February, 2011.

6. Do not acquire annuities with substantial penalty amounts in the event the annuity monies are needed for costs. If healthy spouse is working, that spouse should review company policy about taking a leave in case Medicaid becomes an issue in the future and the additional earnings become an impediment to eventually seeking Medicaid (see Post 33).

7. Confer with counsel as to the possibility of a foolproof plan without taking any steps at the present time. See Post 42 which discusses the transfer of assets to a “disabled child.”

8. Review pension and social security of applicant and spouse. In the above-referenced case, the total pension and social security equaled approximately $6,500. Therefore, if Medicaid did become an issue, these payments should cover the Medicaid reimbursement rate without the need for planning.

As in many of my prior postings, this list is not exhaustive, but rather is illustrative of issues to be addressed.

Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.

© September 2009, Post 54