Category Archives: Senior Tips

Medicare/Medicaid Info

October is the month to review Medicare if needed.

When you turn 65, you become eligible for federal health insurance, called Medicare. You can receive this government benefit, regardless of your income or employment. Medicare is like other health insurances – it has premiums, co-payments and deductibles.

It’s a good idea to understand just what is covered by Medicare and what isn’t. Medicare covers short stays in hospitals or nursing facilities, ambulances, medical aids, prescriptions, therapy, some home healthcare needs and some doctor visits. Medicare will cover up to 100 days in a skilled-nursing facility after a 3-day hospital stay, if you require skilled-nursing services. After the 20th day, there is a significant co-pay that some, but not all supplemental-insurance plans will pay for.

Medicare does not pay for long-term care. Medicaid, another government program, pays for long-term care; however, to qualify for Medicaid you have to meet a means test that looks at your health, assets and income before you qualify—your assets cannot exceed $2,000 and your income in 2016 cannot exceed $2,199 per month. If your income exceeds that limit, you can still qualify by setting up a Miller Trust. If you have a spouse, there are provisions in the law that allow your spouse to keep your home, one car and ½ your liquid assets up to $119,220, so that your spouse is not impoverished while paying for your care.

The initial enrollment period for Medicare begins three months before your 65th birthday, includes the month you turn 65, and ends three months after you turn 65. If you miss your Initial Enrollment Period, you can sign up between January 1 through March 31 each year but it may include a late penalty. October is a good time to review your plan. There is also an Annual Election Period from October 15 through December 7, when you can consider whether you would benefit from enrolling in or changing a Medicare Advantage Plan or a prescription drug plan.

Understanding the laws and knowing what Medicare and Medicaid cover, will allow you to get the most for your money.

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.

Children caring for their parents

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.

Transfers of Property

There are many ways to transfer property after death.

Estate planning consists of preparing for incapacity during lifetime and transferring property after death to loved ones. Most people think of a Will or a Trust when transferring property. However, there are many ways that property can be transferred:

Will – a document that names a Personal Representative and directs the disposition of property at death. Wills are probated, but in Idaho, this is usually a simple process.
Trust – an arrangement to hold property and assets in trust. A Trust avoids probate, but is more complicated and more expensive than a Will, and it requires maintenance as property is sold or bought during one’s lifetime.
Community Spouse Deed – Most couples in Idaho hold title to their homes as community property. When one spouse passes away his or her name does not automatically come off the title. By changing the title to Community Property with a Right of Survivorship, all that the surviving spouse has to do is record a death certificate to take the deceased spouse’s name off the title.
Joint Tenancy – Most bank accounts with two people are examples of Joint Tenancy. If there are two people on the account and one dies, the survivor gets the account. However, when parents put their adult children on their bank accounts to help pay bills, they make them a joint-tenant, with the right to the money in the account when the parent dies. This often was not the parent’s intention.
Pay-On-Death Accounts (POD) – Most financial institutions will set up a Pay-On-Death account, at no extra cost so that at death, the balance in the account is paid to the persons, in the percentage indicated.
Affidavit of Heirship – Three years after a person’s death, if their estate has not been probated, the person’s heirs may record an Affidavit of Heirship, with the County Recorder, which transfers the title of property to them.
Give it away! – If one doesn’t foresee needing Medicaid within 5 years, he or she may give away property without affecting his or her eligibility for Medicaid; however, by giving property away during one’s lifetime the individuals receiving the property will lose a step-up in basis and may have to pay capital gains tax.
Deed retaining a Life-Estate – One may deed property and retain a life estate. This means that one keeps the property for the rest of their life, and at their death the property passes to the grantee named in the deed.

The decision of which method to use depends on the size of the estate, the type of property held, family dynamics and the goals of the person making the Estate Plan. Care should be taken when implementing any strategy, to make sure it is plainly understood and that it achieves the desired results.

Final Disposition after Death

Who decides what happens to your remains after you have died?

After a loved one has passed away, the last thing families want is a dispute over what should be done with his or her remains. Occasionally this happens, when there are differing opinions and there are no documents in place that express the loved one’s wishes.

In Idaho Code Section 54-1142, it states: If the decedent did not make a prearranged funeral plan, the right to control the disposition of his or her remains vests in the following persons in the order listed:

the person designated in a written document executed by the decedent and acknowledged. (“Authorization for Final Disposition”);
the person designated under a durable power of attorney for healthcare executed by the decedent;
the person designated in a durable power of attorney (for property) executed by the decedent, if it contains express and clear language granting such right to the agent named in such power of attorney;
the competent surviving spouse;
a majority of the competent surviving adult children of the decedent;
the competent surviving parent.

Any question about an individual’s intent is easily resolved if they have executed an Authorization for Final Disposition. This names a Representative and gives him or her the authority to carry out the decedent’s wishes.

As with other decisions, by making your desires clear, it is much more likely that they will be carried out.

Beneficiary Designations (Part 2)

In some situations, naming an individual as a Beneficiary does make sense.

Last month, we discussed the reason for naming your Estate as the beneficiary on IRA’s, life insurance policies, mutual funds, bank accounts, and annuities. Naming your estate as the beneficiary of these accounts provides funds to pay your debts and final expenses. Your Personal Representative will then transfer the remaining property in your estate to those persons or charities you have named in your Will.

However, in some situations designating an individual instead of your Estate, as your Beneficiary, does make sense. If you have a small estate consisting only of insurance and a bank account, naming an individual as the beneficiary of the insurance and setting up a Pay-on-Death on the bank account, avoids the need to probate. Payments from the insurance company and the bank are made directly to the individuals that you have designated.

In another example, if you receive Medicaid to pay for your care in an assisted-living facility, when you pass away, Estate Recovery will file a claim against your estate for the cost of your care that was paid for by Medicaid. Insurance proceeds are not subject to Estate Recovery, so you would want to designate an individual, not your Estate, as the beneficiary of your insurance policy.

Finally, if your spouse’s care is being paid for by Medicaid, you don’t want to name your spouse as the beneficiary of your insurance policy. If your spouse receives insurance proceeds while on Medicaid, it may jeopardize his or her eligibility for Medicaid—if your spouse’s assets at the end of any given month exceed $2,000, he or she will become ineligible for Medicaid.

In conclusion, each individual circumstance is unique, making it difficult for a one-size-fits all answer as to whom you should name as a beneficiary. If you have questions, it may be worthwhile to review your specific situation with an attorney.

Beneficiary Designations (Part 1)

It is a good idea to review your beneficiaries and POD designations regularly.

Ringing in the New Year for many people includes setting goals and getting organized. As a result of this, my law practice has been busy the last couple of months helping our clients with estate planning.

One often overlooked area of estate planning is that of reviewing the beneficiaries of your life insurance policies and annuities, and the Pay-on-Death (POD) designations on IRAs, mutual funds and bank accounts. If your designations are out-of-date, when you pass away your assets could go to an unintended person, such as a former spouse, for example, no matter what your Will says. As your life changes, it is wise to periodically review all your designations and bring them up-to-date.

Knowing who to name as a beneficiary or POD designee depends on your circumstances and objectives. If your objective is to fund your Estate and make sure there are sufficient assets to pay creditors and carry out your estate plan, naming your Estate as your beneficiary insures that the proceeds are used to pay funeral expenses and debts, with the balance passing to your heirs as directed in your Will.

When naming individuals as beneficiaries or POD designees, some parents make the mistake of naming their oldest child as the sole recipient, with the idea that the oldest child will settle their affairs and share the wealth with their siblings. These same parents often direct in their Will that their estate is to be divided equally among all of their children. If the life insurance proceeds and financial accounts represent the bulk of the estate, and the oldest child does not share the proceeds with their other siblings, the parents may have unwittingly disinherited their other children.

Having said this, there are situations where designating individuals to receive the proceeds of a financial account or life insurance policy does make sense. This will be the subject of our next Senior Tip.

In conclusion, a good time to review your beneficiary designations is in March, as you receive your 1099 Tax Forms from the financial institutions holding your assets. Give your financial institutions and insurance policy holders a call and make sure your beneficiary designations are current and in keeping with your wishes.

Tangible Personal Property List

Use a tangible personal property list to clearly specify who you want to receive your personal property.

Idaho Code Section 15-2-513 expressly permits the use of a statement separate from your Will to dispose of non-business, tangible personal property upon your death. If you want to use such a separate written statement rather than itemize the disposition of tangible personal property in your Will, you should know and follow the requirements set forth below:

No duplication. The separate written statement should not include items already specifically disposed of by you in your Will.
Assets that may be disposed of by written statement. Common examples of property that may be disposed of include personal effects, jewelry, family heirlooms, furniture, antiques, art work, books, household items, sporting equipment, automobiles, etc.
Assets that may not be disposed of by written statement. A separate written statement cannot be used to dispose of money, evidence of indebtedness, documents of title, interests in real property, securities or property used in a trade or business.
Date and sign written statement. Each page of the statement should be dated and must be signed by you.
Clearly describe each item. Clearly describe each item so that it is easily identified and not confused with another similar item.
Designation of beneficiary (devisee). Each beneficiary (also referred to as a “devisee”) should be identified by his or her proper name and relationship to you. The address of the beneficiary should be added if the beneficiary is not closely related to you so that proper identification is assured.
Alternate Beneficiary. You may wish to consider providing for an alternative beneficiary if the first-named beneficiary does not survive you, although this is not necessary.
Change in designation of beneficiary or property. You may change the devisees or property designated in the separate written statement from time to time or revise or revoke the entire statement. Changes should be made only by preparing a new statement patterned after the original form. The old statement should be destroyed. Changes should never be made by alternation on the face of an executed statement; your intent will inevitably be unclear.
Retain written statement in safe place. The separate written statement should be kept in a safe place where it can be easily found, preferable with your original Will.
Notice to Personal Representative. We recommend that you notify the personal representative named in your Will regarding the location of the written statement.
Periodic review. The written statement should be reviewed periodically and kept current.

Families often fight more over mom’s wedding ring or dad’s hunting rifle than they do over the distribution of a 401K. A tangible personal property list is often overlooked, but is an important document to prevent disputes between family members when settling an estate.

Medicare and You

Your responsibility to Medicare if you are involved in an accident

Winter driving conditions here in Idaho can be difficult at times and can lead to accidents. In a situation where a person on Medicare sustains injuries that are caused by someone else, Medicare becomes a secondary payer and the no-fault or liability insurance becomes the primary payer. When an individual who is covered by Medicare is injured in an accident, Medicare requires that person to notify Medicare of the accident.

While the process of obtaining treatment for injuries is the same, payment of the medical bills is very different. Medicare makes conditional payments to healthcare providers for their services, but Medicare is entitled to repayment from the third party responsible for the accident. This is the case whether the injury happens at work or in an automobile accident. If a person on Medicare recovers an insurance settlement for his injuries, Medicare will automatically have a lien against the settlement for any medical bills it has paid on behalf of the insured. Therefore, if a Medicare beneficiary receives a settlement from a primary payer, that person will need to reimburse Medicare for the amount of medical bills that Medicare paid.

For example, we know of one man who had an accident and settled with the liability insurance company for $1,500 and then had back surgery paid for by Medicare. When Medicare became aware that he had been in an accident, they sent the man a letter demanding reimbursement for the total cost of the surgery.

Consequently, if you are on Medicare and you are injured in an accident, make sure you or your attorney contacts Medicare before making any kind of settlement with an insurance company.

Battling Alzheimer’s Disease

Things you can do to improve your chances of not getting Alzheimer’s.

According to Dr. Maria Norton of Utah State University, there are at least 15 million people in the U. S. who suffer from Alzheimer’s Disease, and someone develops AD every 68 seconds or roughly every minute of the day.

At a Seminar Dr. Norton recently presented in Idaho Falls, she indicated that we can improve our chances of not getting Alzheimer’s. Like many other health conditions, there are things we can change in our lives and things we cannot. For example we can’t control our increasing age, our genes or our family history of AD. However, we can control our knowledge of the subject, our nutrition, our exercise and our stress level, to name a few. Dr. Norton hypothesized that only 1/3 of the total Alzheimer’s risk factors come from genetics, leaving 2/3 that we can control.

According to Dr. Norton, there are six behavioral domains in which we can make wise choices each day that can decrease our likelihood of getting AD. They are the following:

Healthy food choices
Physical activity
Stress management
Cognitive / mental activities
Social engagement
Sleep quality

There is a new app called “Gray Matters, “The Alzheimer’s Prevention App”, to help remind us of the importance of doing the things we can control. Studies show that this smart phone app motivated better engagement in each of the six areas mentioned above by well over 50% in each domain. You can download the app and visit the demo at graymatters.org@graymattersapp.

Quality of life is so important. When trying to avoid a disease as devastating as Alzheimer’s, doing something is always better than doing nothing.

Provide for your pet in your will or trust

“I like pigs. Dogs look up to us. Cats look down on us. Pigs treat us as equals”. Winston Churchill

If you have ever loved a pet, you understand the question that many of my clients ask: when I pass away, who will care for my pet? Pets offer companionship and bring joy into our lives, and in return we want to make sure they go to a good home.

There are several options for the placing of pets, including family members, friends and adoption programs with organizations like the Idaho Humane Society. If you plan to leave your pet with an individual, you should discuss with the prospective caretaker if they are willing to care for your pet. If they accept, you can leave your pet in your Will to that person. You may also want to leave some money or other pet care items to that person, asking the person to use the money and items to care for your pet. Your request gives guidance to the caretaker, but is nonbinding. You cannot leave money or other property directly to an animal.

A more complex and expensive method to provide for your pet is to set up a Pet Trust. Idaho Code § 15-7-601 allows for a Trust to be set up for a pet. Funds can be put into the Trust with instructions that are binding, as to how the money is to be used and how your pet is to be cared for.

If providing for your pet’s future when you are gone is important to you, consider leaving specific instructions in your Will concerning with whom you want your pet placed. This brings peace of mind, knowing your pet will be in a good home.