Sometimes Probate is required even though you tried to avoid it. 

Draw a circle; consider the circle to represent everything you own—your house, car, recreational vehicles, bank accounts, investments, insurance policies, IRAs, retirement accounts, etc. The property within the circle is known as your estate.

There are many ways property in your estate may be transferred to those you designate. For example, you can sign a Pay-on-Death request with your financial institution making your account payable to one or more payees at your death. You can hold property with someone else as joint property or community property with a right of survivorship, so that upon the death of one party, the property automatically belongs to the surviving party. Additionally, your estate can be probated to transfer your property to the persons designated in your Will.

Sometimes people go to great lengths in their planning to avoid probate. Then, after they have passed away, the family discovers that their loved one designated their Estate as the beneficiary or failed to designate a beneficiary, therefore, the death benefit is paid to the Estate.Insurance companies will not give money to the Estate without an order from the Court. Therefore, the family is frustrated when they find out that after all their loved one’s efforts, a petition for probate will need to be filed and a personal representative appointed to receive the death benefit from the insurance company.

Working with insurance companies can be confusing, frustrating and time consuming; however, when you are doing your estate planning it is wise to review your beneficiary designations on insurance policies and investments to avoid this problem.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity.  If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

February 2018

By setting boundaries, harmony in the family can be preserved.

In my Elder Law practice, I counsel regularly with older adults and their children. Some of their stories and challenges are unique, but some I hear over and over again. When this happens, it seems worth writing a tip about it.

As adults age and start to require assistance in paying bills and making financial decisions, often a well-meaning adult child will come alongside of his or her parents to help them in financial matters. For example, an adult son may start by writing checks and have dad sign them. As mom needs help with the groceries, an adult daughter may pick up a few things for her and pay for mom’s groceries along with her own. Somewhere along the way, boundaries are blurred, and the well-meaning adult child begins to have a sense of ownership and entitlement to dad or mom’s property.

Other times, an adult child, who never really figured things out for himself or herself, starts to rely on mom—her fixed income and limited assets—for his or her support. Moms are especially easy prey in these situations. Their love for their children knows no boundaries, and they sometimes willingly sign over the farm and anything else that may be asked for. Mom’s happiness and even her daily needs are now inextricably tied to her children’s choices concerning her.

The problems that both scenarios create are endless. If the adult son or daughter has paid for things out of their own pocket, they may feel they should be compensated for past purchases or even services provided.

When other siblings learn of financial exploitation of a parent, family relationships are fractured, which is the last thing mom and dad want. Also, Medicaid eligibility, which funds assisted-living care, can be jeopardized if parents have given away their property. Wills can become meaningless, if in the parents’ lifetime they give their property to a child. I could go on, but I think you get the picture.

So, what is the solution? Maintaining good boundaries is essential when helping an aging parent. With regard to finances, maintaining boundaries starts by approaching the task with the attitude that a parent’s property is their sole property and should be used solely for their benefit. That’s not to say that a parent cannot use discretion to purchase gifts for children and grandchildren. But, if the gifts become excessive or lopsided between family members, that can be a red flag, and it can become a breeding ground for trouble and discontent among siblings.

The next step is putting in place an accountability system for the person who is assisting the parent. It can be a simple system of saving receipts for the groceries and writing a check to be reimbursed for the amount of the purchase. A little accounting can go a long way to prevent suspicion or misunderstandings.

The third step in maintaining good boundaries is transparency with other family members. As a family, talk with parents about how they would like to be helped, put a plan in place that is understood by the family, and as the plan is carried out, routinely update family members with information. This way, harmony can be preserved, and parents can have the dignity and respect that they deserve.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity.  If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

Thomas W. Packer

November 2017

If someone calls or requests money – Beware!

At times, I have clients come to my office and tell me they have been scammed by mail, phone, or on-line—someone had asked them for money, but it turned out to be fake. These scams often target older adults, and they are becoming increasingly more common.

I know a man who received a call and was told he had won a Cadillac. All he had to do was send $5,000 and the car would be his. He sent the money, but he never saw the car. Later, he received another call from a law firm that said they were representing several individuals who had also been scammed by the person who scammed him. He was told that the law firm would help him recover his money if he would send a retainer to the law firm, which he did. He later found out that the alleged law firm was the same person who had scammed him on the Cadillac.

Recently, in our area, someone claiming to be the IRS called and requested individuals to pay back taxes immediately to avoid a costly court settlement. The IRS has said that they will NEVER contact you by phone about your taxes. Unfortunately, many people fell for this before the scam was exposed.

Remember, anyone asking for money or personal information must be completely vetted to know why they are requesting it. If you are contacted by phone, you simply need to reply that you don’t give that information out over the phone unless you have initiated the call. If you receive a request for your personal information by mail or email, don’t respond to it.

Regrettably, these con-artists get very good at convincing you to act. Remember, they get plenty of practice calling dozens of people a day; finding ways to convince people that they are legit and to send money to them immediately. Always check with a family member, trusted friend or an attorney before sending money or your personal information, to be sure that it is safe.

Please don’t let your hard-earned money get into the hands of someone who is deceiving you! It is better to be safe than sorry; it’s impossible to get money back. Included below is an article about Consumer Information from the Federal Trade Commission that will help you avoid the myriad of schemes that are out there.

https://www.consumer.ftc.gov/articles/0060-10-things-you-can-do-avoid-fraud.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

Parents and children should clearly define expectations and eliminate misunderstandings.

I’m touched regularly by the goodness of the families I work with in my Elder Law practice. With a large percentage of the population aging, we see more and more adult children who are coming alongside their older parents as primary caregivers.

In years past, a large portion of a family’s wealth was lost to the high cost of assisted-living facility care. We often encounter clients who are thinking outside the box and retiring early from different professions to go to work caring for mom and dad.

Many older adults are electing to stay in their homes where they want to be and receive personal care from a family member. Under Medicaid rules, if a child cares for his or her parents in their home for two years, the parents can transfer their home to the child and still be eligible to receive Medicaid benefits with no period of ineligibility.

When a child provides care to a parent, there are several advantages to having a Personal Care Service Agreement in place:

• Clearly defining the caregiver role and tasks can help set expectations and eliminate misunderstandings down the road.
• Contractually agreeing to a wage may also prevent other family members from becoming concerned about the transfer of mom and dad’s assets to the person providing care.
• If at some point Medicaid benefits are accessed to help pay for facility care, a Personal Care Service Agreement is an essential part of Medicaid and Estate Planning.

Federal and State government programs support and incentivize the idea of families providing care to older adults. Accordingly, there are mechanisms in the law that essentially provide for a transfer of wealth to family members, rather than assisted living facilities, in exchange for providing care. And more importantly, it seems to result in better outcomes for the whole family in terms of health and happiness.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

Tip: Consider the risks of putting a son or daughter on your bank account as a joint tenant.

Putting an adult son or daughter on a bank account is a common practice of older adults who need help paying bills and managing their finances. However, having a child as a joint tenant on an account may cause the following problems:

1. The child sometimes withdraws money from the account for their personal use.
2. If a parent asks the bank to remove the child’s name from the account, the bank requires the child’s signature to have his or her name removed. This often leads to a confrontation between the parent and child, which many parents will avoid.
3. If there is a joint tenant on an account, and the parent passes away, the Personal Representative of the parent’s estate cannot withdraw money from or close the bank account.
4. Most often, when the owner of a bank account passes away, the intent of the owner is to have the remaining balance go directly to his or her estate to be divided between all the children. However, Idaho Probate Code § 15-6-104 states that when a joint tenant is added to a bank account and the owner of the account passes away, the money in the account can go to the joint tenant if he or she can prove it was a gift. This leads to all kinds of proof problems concerning the owner’s intent, and the other children are at risk of the joint tenant taking it all.
5. If a son or daughter is involved in a divorce or takes out bankruptcy, having their name on their parents’ account raises an issue of their ownership interest, and the money could be taken in the divorce or bankruptcy proceeding.

The easiest solution for older adults needing help with finances is for the parents to give a son or a daughter a Financial Power of Attorney (POA). With a POA, the child can assist the parents in paying bills and managing their financial affairs. The child has no ownership interest in the account and has a fiduciary duty to the parents to use the money for their benefit. The parents can revoke the Power of Attorney at any timec if a problem develops.

The parents can also set up a Pay-On-Death Agreement with the bank to pay the remaining balance in the account at their death to whomever they designate.

Remember, there are safer ways of getting help with your finances than putting your son or daughter on your bank account.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity.  If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

Don’t impoverish your spouse if you go on Medicaid.

While meeting with a client, I learned that his father had recently gone into a long-term care facility, that his mother was still in their home and that he was spending down their money so that his father could qualify for Medicaid. I explained to my client that federal law allowed his mother to retain a large amount of their assets and that his Mom didn’t have to become impoverished for his dad to qualify for Medicaid.

Let’s review the Medicaid rules as it applies to this case. In addition to filing the Medicaid application, the husband should file a Community Spouse Resource Allowance, which allows his wife to retain certain assets.

Medicaid categorizes resources as exempt assets and countable assets. Exempt assets include the following:

• Primary residence
• Personal household goods
• One vehicle
• Prepaid funeral
• IRAs
• Some specific Life Insurance Policies

Countable assets include:

• Cash
• Savings and checking accounts
• Cash value of insurance policies

In this example, in addition to the exempt assets, the wife can retain one-half of the countable assets up to $119,220. For example, if the couple has $238,440, the wife can retain one-half, which is $119,220.

To be eligible for Medicaid, the husband cannot have more the $2,000. If he has more than $2,000, he cannot give money away (except to a disabled child); however, he can use the money to pay off their debts, make repairs to their home, upgrade their car, prepay their funerals, pay legal expenses and pay for his care.

Once the husband becomes eligible for Medicaid, he will sign a Marriage Settlement Agreement and transfer all of his assets to his wife.

One final point, now that all the assets belong to the wife, if by chance she dies before the husband, all of the wife’s assets will go back to him making him ineligible for Medicaid. To avoid this, the wife, should make a Will that includes a Special Needs’ Trust for her husband. Then if the wife dies before the husband, the assets do not go to him, but are held in a trust to be used for his benefit. In this way he remains eligible for Medicaid.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

Correct information helps avoid mistakes.

We have found that there is a lot of misinformation about social welfare programs, their recipients, and what it costs to participate in the programs. The following are some myths about Medicaid for the Aged, Blind and Disabled and facts to consider:

Myth: Medicaid is a handout or a free ride. Once someone is eligible for Medicaid, the government pays for everything for the participant.

Fact: When a person is deemed eligible for Medicaid, they are required to share in the cost of their medical care. Depending on income level, some participants could pay as much as $2,100.00 per month to participate in the Medicaid program – hardly a free ride. Why would someone pay such a hefty sum to be on Medicaid? The cost of care without Medicaid would be considerably higher and leave them unable to pay for necessary medical care.

Myth: People on welfare programs, like Medicaid, are free loaders who are working the system.

Fact: People on Medicaid for the Aged, Blind and Disabled are retired school teachers who were once sharp as a tack, but have succumbed to the mind devastating effects of Alzheimer’s. They are farmers who once made a living off the sweat of their brow, who are now enfeebled by Parkinson’s disease. They are Veterans of our wars who once loaded torpedoes onto gunships in the South Pacific who are now themselves loaded from a gurney into an ambulance.

Myth: Once you are on Medicaid, the government takes over all of your money.

Fact: Medicaid participants remain in direct control of their income. Continued eligibility in the program requires the participant to make the aforementioned “share of cost” payment.

Myth: If your spouse needs to go on Medicaid, you have to spend down all your money in order for him or her to qualify.

Fact: The community spouse can retain the following property even if his or her spouse goes into a facility and receives Medicaid:

• The parties home and adjacent land
• One vehicle
• Prepaid burial plans
• ½ of the parties’ funds in bank accounts and cash value in insurance policies up to $117,240.00

In conclusion, the best way to avoid costly mistakes in qualifying for Medicaid is to have the correct information, which can be provided by an elder law attorney.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a senior’s legal, financial or healthcare needs, please call us.

When elderly parents begin needing assistance in their daily lives, adult children are often called upon to help care for them.  Usually this begins with an adult child helping around the house, paying some bills, running to the store, or fixing meals.  To make it easier to manage their finances, elderly parents frequently give their adult children a financial power of attorney or add them to their checking and savings accounts.  More often than not when this occurs, there is poor record keeping and a frequent commingling of the parent’s and the children’s funds.

When parents are diagnosed with dementia or Alzheimer’s, their care needs escalate, and the demands on caregiving children increase. Many times the caregiving child will reduce hours at work or even quit a job to provide care for an aging parent.

Many parents and their caregiving children in these situations do not see a need to have a written agreement; this is, however, exactly what they do need.  These informal care arrangements, with their comingling of funds and poor record keeping, can lead to investigations by adult protection for financial exploitation and to sibling claims that the caregiver child is taking “all of mom’s money.” If money is given to the caregiving child without a contract in place, the parent may also become ineligible for Medicaid.

A Personal-Service Agreement can resolve these concerns.  The Idaho Administrative Procedures Act provides that transfers of income to a relative for personal services will result in ineligibility for Medicaid unless the following guidelines are followed:

·        A written contact for personal services was signed before services were delivered.

·        The contract must require that payment be made after services are rendered.

·        The contract must be dated and the signatures notarized.

·        Either party must be able to terminate the contract.

·        The contract must be signed by the participant or a legally authorized representative through a power of attorney, legal guardianship or conservatorship.

·        A representative who signs the contract must not be the provider of the personal-care services under the contract.

·        Compensation for services rendered must be comparable to rates paid in the open market.

Caregiving children should also keep detailed records of the personal-care services that they provide and the expenses that they incur. A written contract and adequate records will protect the caregiving child from claims of financial exploitation by adult protection and disgruntled siblings and will establish that transfers of income to the child complied with Medicaid rules.

We want to wish all a Merry Christmas.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers life care planning to deal with the challenges created by long-term illness, disability and incapacity.  If you have a question about a senior’s legal, financial or healthcare needs, please call us.

Individuals who are age 65 or older and receiving social security are automatically enrolled in Medicare Part A, which is premium free and covers hospital and skilled-nursing costs and hospice care. Individuals may also enroll in Medicare Part B, which has a premium, and covers physician, medical lab and ambulance costs. Individuals who can still obtain private insurance through their employment will often postpone enrollment in Medicare Part B.

After individuals enroll in Medicare Part B, they have six months to select a Medigap policy (Medicare supplemental insurance). The open enrollment period to select a Medigap policy begins on the first day of the month when the individual is 65 and is enrolled in Medicare Part B.

During the 6 month open enrollment period an insurance company cannot use medical underwriting. This means that the insurance company cannot do any of the following because of a preexisting health condition:

1.      Refuse to sell a Medigap policy.

2.      Charge more for a Medigap policy that it would charge someone without a preexisting condition.

3.      Make the individual wait for coverage to begin.

In some situations, individuals who have selected a Medicare Advantage plan under Medicare Part C may still be able to subsequently go back to Medicare Parts A and B and obtain a Medigap policy without medical underwriting.

If individuals do not select a Medigap policy during the open enrollment period, and they sign up on a later date, or if they change their Medigap policy, they will be subject to medical underwriting and will likely pay a higher premium for their supplemental insurance.

Medigap policies fill the gaps not covered by Medicare Parts A and B. Medigap policies are based on 10 standardized benefit packages developed by the National Association of Insurance Commissioners (NAIC). The current Medigap policies are the following: A, B, C, D, F, G, K, L, M, and N.

Some Medigap policies cover skilled-nursing facility costs and others do not. After a three-day hospital stay, Medicare Part A will pay all the costs of a skilled-nursing facility for the first 20 days; however, from day 20 through day 100, the patient is responsible for a daily co-payment.  (In 2012 the co-payment was $144.50 per day.) If an individual has a Medigap policy that covers skilled-nursing facility costs, the copayment will be paid by the supplemental insurance. Individuals who do not have a Medigap policy that covers skilled-nursing costs, are surprised when they get a large bill from the facility.

Insurance companies do not have to offer every Medigap policy.  Each company decides which policies it wants to offer, and the premiums it will charge.  The premium offered by different insurance companies for the same policy may vary.

Consumers need to enroll in a Medigap policy during the six month open enrollment period and make sure they understand the services covered by their Medigap policy.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers life care planning to deal with the challenges created by long-term illness, disability and incapacity.  If you have a question about a senior’s legal, financial or healthcare needs, please call us.

After the Department of Health and Welfare deems an individual eligible for Medicaid, the next question that families face is this:  “What portion of the individual’s monthly income must be used to pay for their care?”

When families come in to visit with me about paying for long-term care for a loved one, the conversation often culminates in an application for Medicaid. During this initial conversation, families are narrowly focused on figuring out how to pay the high costs of facility care. After the Department of Health and Welfare deems an individual eligible for Medicaid, the next question that families face is this: “What portion of the individual’s monthly income must be used to pay for their care?”

The Department of Health & Welfare refers to the portion that the individual pays for their care as ‘patient liability’ or ‘share of cost.’  A formula, with several variables, is used by Health & Welfare to determine each individual’s countable income and resulting patient liability. For example, for a single individual in long-term care with no spouse, patient liability is determined as follows:

Income of Participant in Facility                    $700.00

Less AABD exclusions                                  –    0.00

Less certain deductions to income:

Aid and Attendance from VA                 – 290.00

Personal Needs Allowance                   –   40.00

Total Patient Liability                                   $370.00

(The variables used are for the purpose of illustration only.)

This person would be required to pay to the facility $370.00 per month as a condition of his continued eligibility. Other variables which may reduce total patient liability include: the first $90 of a VA pension, a VA Aid and Attendance Allowance, and the cost of home maintenance up to $212 if the individual is likely to return home within six months.

For married couples, rather than impoverishing the spouse who remains at home, the federal government has enacted legislation which allows the at-home spouse to keep a portion of the monthly income of the spouse that is in a facility. This is called a Community Spouse Allowance and may reduce the patient liability. Let’s look at an example:

John’s medical problems require him to live in a skilled-nursing facility. His wife, Amy, is healthy and remains in the family’s home. John’s income is $3300.00 per month and Amy’s is $600.00. The couple elects the ‘community property’ method of determining ownership of income.

Income of Couple                               $3900.00

Less AABD Income Exclusion                       0.00

Less Personal Needs                                  40.00

Less Community Spouse Allowance          1946.00

Total Patient Liability                            $1914.00

In this example, John would be required to pay to the facility $1914 per month to continue Medicaid eligibility.

Many different variables influence the amount an individual is required to pay. It is important that these variables are disclosed to Medicaid during the application process. Failure to do so may result in a higher share of cost. If you have questions about Medicaid, contact an Elder Law Attorney.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers life care planning to deal with the challenges created by long-term illness, disability and incapacity.  If you have a question about a senior’s legal, financial or healthcare needs, please call us.