Protect Your Assets–Elect Non-crisis Planning for you or your Loved One

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by Susan Piette

Are you getting older? Are your parents? Do you and/or they have a plan?

Consider Joe and Helen. They met just after he was discharged from the Army. They married, raised two boys and a girl, worked hard their entire lives, retired with a nice nest egg of funds, and looked forward to time with their daughter’s children who lived a few hours away.

Their first son lived out of state, had a well-paying job and was married with no children but separated from his wife, whom Helen was never very fond of. Their second son had never quite “launched,” was not married, had a hard time holding a job and was currently on governmental low-income assistance.

Joe managed the family assets and finances. Their home and a small checking account were held in Joe and Helen’s name, but all investment accounts were in his name alone. Joe did fairly well in the stock market, and he was certain that the assets would not only provide for him and Helen but also provide a nice inheritance for their children and especially their beloved grandchildren.

An elder law attorney can help seniors with non-crisis planning, so their wishes are fulfilled and their assets are distributed appropriately.

An elder law attorney can help seniors with non-crisis planning, so their wishes are fulfilled and their assets are distributed appropriately.

Helen’s memory had been on the decline for some time, but the children didn’t realize how bad it was until Joe slipped while shoveling snow, broke his hip and had to stay in a rehabilitation facility. Helen could not be left alone and was not going to be able to care for Joe when he came home. Helen went to stay with her daughter, who temporarily reduced her full time employment to part time so that she and Helen could visit Joe 3-4 times a week. The daughter had to hire home healthcare aides to be with Helen when she had to be at work. Joe was recovering well but suddenly developed a blood clot and died.

Neither Joe nor Helen had executed a will, a power of attorney or an advance healthcare directive. None of the children ever wanted to talk about the “what ifs” and now the family was in crisis. They had failed to plan.

1. Fact/Question: Joe and Helen’s house and bank account are titled jointly but the assets in the investment accounts were held in Joe’s name alone. With no Will in place providing direction on who should receive these assets, how will they be distributed?

Answer: When a loved one dies without leaving a will, he or she is said to have died intestate. When this happens, any assets held in the decedent’s name alone will be distributed according to the intestate laws of the state where the decedent lived. Warning: such distribution may or may not accord with that person’s wishes.

Unintended results:

  • Helen will only inherit a portion of the investment assets (under Pennsylvania law: $30,000 plus 1⁄2 of the balance of the funds) and the children will receive equal shares of the remainder of funds.
  • Should the son who is separated get divorced, the daughter-in-law, who Helen doesn’t care for, could receive a portion of Joe’s estate in the divorce settlement.
  • If the son on governmental assistance accepts the inheritance money, he will most likely be disqualified from his governmental assistance and have to reapply after the inheritance money is used up; or he may need to utilize a portion of those funds to establish a type of trust for the funds, so that he may continue to receive the governmental assistance and have the inheritance funds supplement, not replace, his governmental assistance.

2. Fact/Question: Helen no longer has the capacity to execute an advance healthcare directive. What is an advance healthcare directive and why is it so important to have one in place?

Answer: An advance healthcare directive is an instruction given by you concerning the medical treatment or care that you would want – or would not want – should circumstances arise where you are no longer capable or competent to give such an instruction. Advance healthcare directives are the best way to ensure that your express wishes for health care are known and honored.

Unintended result: Helen’s wishes for her medical treatment and end of life decisions may not be followed.

3. Fact/Question: The daughter provided caregiver services and expended personal funds for the benefit of Helen without documenting the arrangement. Can she be reimbursed?

Answer: Yes, but if the daughter accepts payment(s) for services and expenditures without a properly documented caregiver agreement and Medicaid is needed as a source of funding for skilled nursing care for Helen, such payment(s) may be determined to be an inappropriate transfer of funds and cause an ineligibility period for Medicaid benefits, resulting in the family having to pay for skilled nursing services that Medicaid would have otherwise covered.

Joe and Helen failed to put in place a “Senior Plan.” What’s your Senior Plan? We all want peace of mind about our welfare and our assets. You are the only one who can make important decisions about how you would like to live. Those decisions MUST be documented. In this case, information is power! Anyone who is aging, or has elder parents should engage in non-crisis planning and review their SENIOR PLAN with an experienced elder law attorney.

Susan Piette is an attorney with the estates and trusts group of the law firm of Hamburg, Rubin, Mullin, Maxwell & Lupin, which has been assisting parents and their children with estate planning for over three decades.

Posted in: Elder Law, Money & Legal

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