Estate Planning and Medicaid Options

Medicaid options, DuPage County Estate Planning AttorneyMany Americans go through their adult life working hard and saving money with the goal to enjoy a comfortable retirement. Unfortunately, at some point in their senior years, it becomes too difficult for many people to live at home—a decision is ultimately made that that living in a nursing home is the safest and best option. However, nursing homes are expensive and Medicaid will only cover costs for people who all into the low-income category.

For those seniors who worked hard and saved their money, nursing home costs can quickly annihilate savings. This can be especially troubling when for elderly couples when one spouse is still healthy and is able to live on his or her own. Still, what will that spouse use to live on if nursing home costs for the other spouse is eating up all their money?

In order for a person to qualify for Medicare, individuals cannot have more than $2,000 in countable assets. These assets include:

  • Certificates of deposit;
  • Checking accounts;
  • Savings accounts;
  • Stocks and bonds;
  • Property besides a person’s primary residence; and
  • Any more than one motor vehicle.

Besides a home and one vehicle, Medicare also considers personal belongings, household furniture, and other items as non-countable assets. Medicare also allows prepaid funeral expenses and burial expenses up to $1,500 as non-countable assets.

If a person is married, then the amount the person is allowed to have as countable assets is one-half of the couple’s joint assets plus $2,000. For example, if a couple’s countable assets total $50,000 when one of them enters a nursing home, then Medicaid will start paying for that spouse’s nursing home costs when the couple’s assets have reached $27,000. This figure represents $2,000 for the spouse who is in the nursing home and $25,000 (half of the $50,000) for the other spouse.

Many seniors who are still in good health begin preparing early for what may be the inevitable in order to ensure that nursing home costs will not eat up their estate. One options many people consider is to put their assets into irrevocable trusts.

There are both pluses and downsides to an irrevocable trust, so it is important to discuss   the considerations and possible ramifications with a qualified DuPage County estate planning attorney. Contact the law firm of Stock, Carlson, Oldfield & McGrath LLC, at 630-665-2500.

Sources:

http://longtermcare.gov/medicare-medicaid-more/medicaid/medicaid-eligibility/financial-requirements-assets/

http://money.usnews.com/money/personal-finance/articles/2015/04/14/some-dos-and-donts-of-a-medicaid-spend-down

The Revocable Trust: A Popular Alternative to the Traditional Will

revocable trust, Illinois estate planning attorneyThe American Association of Retired People, or AARP, has been instrumental in serving as an informative advocate for those near retirement age since 1958. The brainchild of retired high school principal, Dr. Ethel Percy Andrus, AARP was organized to promote a productive aging philosophy by keeping those broaching retirement abreast of emerging trends and practices. In fact, an AARP bulletin recently discussed the growing trend of choosing a revocable trust over a will.

To determine whether a trust or a will is in one’s best interest, the first step is to speak with both an experienced estate planning attorney and trusted financial advisor. However, before consulting with either professional, AARP offers the following information as to why establishing a revocable trust may work for you.

What Exactly is a Revocable Trust?

A revocable trust is a written document, establishing an appointed family member or friend who will be fully responsible for managing one’s property and assets. As a “living” document, a revocable trust is drafted while the creator is still alive and remains revocable as long as the creator is mentally competent. Moreover, the creator has the right to discontinue the directives at anytime.

In death, however, the document becomes an irrevocable trust—the terms generally can not be changed or disputed in probate court. This type of trust involves three parties: the creator, the trustee or trustees who are in agreement to follow through on the creator’s directives, and the beneficiaries. Importantly, AARP notes, “You will probably want to name yourself and your spouse as trustees, because you want full control of the property while you’re alive.”

Although both a will and trust pertain to a person’s inheritance directives, the revocable trust is gaining popularity because of the desire for privacy and avoiding the traditional terrors and transparency of the probate process. Also, for those who select this option, a trust offers the benefit of declaring specific directives before and following death.

Consult an Experienced Illinois Estate Planning Attorney

Working with an established estate planing attorney to devise a revocable trust can bring solace to both the creator and his or her family without the high cost of probate. Additionally, a well-drafted trust can serve as power of attorney, leaving open the directives of how all assets will be distributed. Tax savings clauses can also reduce state and federal estate taxes.

If you are ready to discuss the establishment of your will or revocable trust, the qualified Wheaton, Illinois estate planning attorneys of Stock, Carlson, Flynn & McGrath, LLC are standing by to discuss your estate directives when you are ready. Contact us at 630-665-2500 today.

Special Needs Trusts: Securing the Future of a Special Needs Child

special needs trusts, Wheaton estate planning attorneysAccording to the 2010 U.S. Census Bureau, Americans with Disabilities Report, nearly one in five families are caring for a family member with a disability. Equating to about 56.7 million people, or 19 percent of the total population, the U.S. has witnessed an increase in those with qualifying disabilities by 2.2 million citizens. Not only has the number of those with disabilities risen, but the number and percentage of those requiring assistance has also increased.

The report also relates that four in 10 individuals with a disability, ages 21 to 64, often find themselves unemployed and facing persistent poverty levels as the ability to obtain viable employment opportunities may be out of reach.

As reported, one in every 26 American families are facing the challenges of raising a child with special needs, and 69 percent of those caring for a child report that they are concerned about providing lifetime care for their dependents with special needs.

With data derived from a recent MetLife Survey, “The Torn Security Blanket: Children with Special Needs and the Planning Gap,” it is apparent that preparation for future needs is somewhat lacking as disabled children grown into disabled adults. The report found the following statistical information:

  • 88 percent of parents have yet to draft a trust to preserve supplemental benefits;
  • 84 percent are without a letter of intent, outlining a child’s future health directives;
  • 26 percent of parents have not created a special needs trust;
  • 76 percent have not identified or named a trustee; and
  • 49 percent have not identified or appointed a legal guardian.

Often, time is not on their side, as 32 percent of all parents caring for a special needs or disabled child often spend more than 40 hours per week ensuring that the child’s needs are met and further compounded by 59 percent of parents claiming unfamiliarity with their legal options.

At the Illinois law office of Stock, Carlson, Flynn & McGrath, LLC, our experienced Wheaton estate planning attorneys understand your time is limited. With over 30 years of special needs trust experience, we can advise you on the many different types of trusts that may best suit your dependent’s needs as well addressing guardianship directives. Contact our legal team at 630-665-2500 to schedule your options today.