When drafting your estate plan, you’ll need to think about when and if you would like a trusted friend or family member to step in and make decisions on your behalf should you become incapacitated. There are several types of power of attorney documents, and your estate planning attorney can help you decide which option best suits your needs.

General

This document gives full decision-making rights to the person named in the document. The person named in this document is able to take on all the rights you have as an individual; they may use this document to pay your bills, sell or buy property, or sign contracts on your behalf. This is typically used by people who need assistance managing their finances.

Limited 

On the other hand, there’s the limited power of attorney, which strictly limits the rights given to the person named in the power of attorney paperwork. Many people use this document to allow an individual to take care of one specific transaction on their behalf. Once the transaction is complete, the power of attorney is no longer in effect.

Durable

A durable power of attorney is often used to protect an individual’s best interests if they become incapacitated and are unable to make their own decisions. This document gives a named individual full rights when certain circumstances are met. If you choose to create a power of attorney that goes into effect when you become incapacitated, ensure that the document lists the specific standards that must be met before your named representative takes over decision-making power. This document stays in place until the principal’s death.

Springing

A springing power of attorney may be durable or non-durable. It only goes into effect when certain events occur; for example, you may draft a springing power of attorney that goes into effect when you leave the country or when you become incapacitated. The agent is permitted to take on named responsibilities and tasks.

Medical

This document is an important part of many individuals’ estate plans. It names a person who is allowed to make medical decisions for you if you are unable to make your own health care decisions. The person who is named in the document is expected to serve as the patient’s advocate, so it’s crucial to choose someone who is respectful of your preferences.

Wondering which power of attorney you need to round out your estate plan? Let us help. Reach out to Elder Care Law Firm at 910-692-4444 to set up a consultation.

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As a joint state and federal program, Medicaid is subject to a variety of state requirements, as well as a broader set of federal requirements. To get the Medicaid nursing home benefit, an individual must pass the asset test. Those who have too high of an income or too many assets do not qualify for Medicaid. However, certain assets are exempt from the asset test, allowing individuals to maintain some of their property while still getting the nursing home benefit.

1. Primary Residence

A Medicaid applicant’s home may not be considered an “asset” if the individual is applying for coverage in the state where the home is located. They must also have a plan to return to the home. Only certain homes are considered exempt; the owner’s equity interest must be below a certain amount, which changes each year with inflation and other variables.

2. Up to $2,000 in Cash

An individual may have up to $2,000 in cash and not be barred from Medicaid.  If the individual applying of Medicaid has a spouse still living in the home, the spouse may keep a minimum of $25,284.00 and a maximum of $126,420.00.  The exact amount the spouse can keep in order for the individual to receive Medicaid depends on several factors and will be determined at the time of application.

3. Automobile

An individual can have one automobile of reasonable value that doesn’t count against them for Medicaid. 

4. Prepaid Payments for Final Arrangements

If an individual has prepaid for their funeral, the money spent on these arrangements is not counted as part of the asset test. Burial plots are also exempt. If an applicant has not prepaid for their burial arrangements, they can spend up to  $10,000.00 for themselves and their spouse for burial arrangements; these irrevocable burial agreements are exempt from the Medicaid test.

5. Property That Allows an Individual to Support Themselves

Income-producing property is generally not included in the Medicaid asset test. For example, if an individual owns a home and rents it out, they can keep that property without it negatively impacting their Medicaid eligibility. To be exempt, the property must earn 6% of its value each year.

6. Life Insurance

When looking at life insurance policies, the Medicaid program only considers the cash value of certain policies, as the death benefit is not accessible to the individual. For example, a policy with an original death benefit of up to $10,000.00 is excluded from the Medicaid asset test, no matter the cash value of the policy.

Planning for this stage of life can be challenging, but it’s easier with an experienced elder law attorney advocating for you. Learn more about your legal options now by contacting The Elder Care Law Firmat 800-491-6556.

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When you only have a little bit left in the bank every month after bills are paid, it’s easy to think that estate planning isn’t a priority for you. Lots of people think that estate planning is only for those with lots of assets, but there are several reasons that every adult should have a solid estate plan in place.

1. Protect Yourself If You Become Incapacitated 

You might think that estate planning only protects your family if you pass. However, a comprehensive plan also protects your best interests if you become permanently or temporarily incapacitated. You may choose someone to have health care power of attorney and make medical care decisions on your behalf. You can also name a financial power of attorney to handle your accounts when you are unable to do so.

2. Prevent Family Disputes 

If you pass away unexpectedly or become incapacitated, an estate plan lays out who is responsible for handling your estate, who is entitled to which assets, and who gets to make decisions on your behalf. Without these documents in place, your passing could lead to a family feud. Many people draw up an estate plan simply to protect grieving family members from unnecessary fights over assets and funeral decisions.

3. Keep Assets Out of Probate

Regardless of what your assets are worth, keeping them out of probate ensures that your beneficiaries get as much as possible. Certain estate planning tools, including living trusts, allow your beneficiaries to bypass the probate process. Probate can be expensive and time-consuming, lowering the overall value of your estate.

4. Minimize Expenses

Perhaps one of the best reasons to start estate planning is to minimize expenses. If you do not leave any estate planning documents behind or you only leave a simple will, your estate will lose a significant amount of value to probate. Additionally, those who do not plan for taxes often leave their loved ones with the task of playing taxes on inherited assets. If you plan ahead of time, you can structure your assets to minimize taxes and other expenses.

5. Provide for Your Children’s Needs

If you have children, estate planning should be at the top of your to-do list. Even if you have minimal assets to leave them, you must consider what will happen to them if you pass. In a will, you can name guardians for your children. Without this documentation, the court will have to decide who can serve as guardian—estate planning ensures that you don’t leave your children’s care to chance.

Are you ready to start meeting your estate planning needs? Take the first step now and contact The Elder Care Law Firm, PLLC. We’ll come up with solutions personalized to your assets and goals.

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The need for long-term care can arise suddenly, or it may be a gradual process. Either way, advance planning can help you prepare for the need to have long-term care for virtually any reason when you need it. Unfortunately, many people make the mistake of not preparing at all or preparing in a way that is not really complete. Your long-term care planning will be much more effective if you consider these common mistakes and take steps to avoid them.

1. Failing to plan properly or at all

The most common mistake that people make when it comes to long-term planning is failing to plan at all. For many people, they know that they need to make plans, but they fail to take any action on them. Although planning your long-term care as you age or if a sudden health emergency strikes is not fun to think about, it is a necessary topic to address with your attorney and your loved ones.

2. Assuming that you do not qualify for Medicare or Medicaid

Medicare and Medicaid are federal problems that can be very helpful when you are determining how to pay for long-term care. Often, when people do not use these programs when they are younger, they assume that the programs are not available as they get older. However, with proper planning, these programs can save you and your family thousands of dollars over time. You can take steps now to plan to take advantage of these programs.

3. Relying on Medicare or Medicaid alone to pay for care

Some people take their reliance on Medicare or Medicaid too far. While these programs are helpful supplements, they should not be your only source of financial support and care while you are in long-term care. It is always possible that you do not get as much as you were expecting or you do not qualify for some reason, and you need to take steps to plan for that possibility as well. Regardless, these programs cannot address every expense that may crop up during your long-term care, either.

4. Assuming your average estate plan will address long-term care

Creating an estate plan is important, but it often will not address all of your needs when it comes to long-term care. A Will, for example, does not deal with long-term care, and it is not effective until after you pass, even if you put terms in it that touch on long-term care. You need to create a separate document that sets out your wishes regarding medical care, and that document can be incorporated as part of your overall estate planning package.

5. Believing that it is too late or too early to plan

You can plan for your long-term care needs at virtually any time, but the sooner, the better. It is rarely too early or too late to plan, and you should take steps today to address your long-term care needs. Your family and other loved ones will thank you.

Learn more about what you can do to address your long-term care planning needs by contacting Elder Care Law Firm. Call our office today to learn more.

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You may have heard that you should be planning ahead so that you can use Medicaid for long-term care. However, many people wait until it is too late to plan effectively. This type of planning is necessary, but difficult to fully understand and appreciate until you need it—which is likely part of the reason it is overlooked or forgotten.

The reality is that it is difficult to determine or predict when you will need to use Medicaid, making planning that much harder. As a result, they need to switch to “crisis” planning instead of using a more proactive, long-term planning approach. The processes are very different, and knowing those differences is critical to using Medicaid effectively.

The Overall Goal of Medicaid Planning

Regardless of what type of planning you use, the overarching goal is to protect your assets and use this federal aid program to its full potential. To qualify for Medicaid, your assets must be sufficiently low to fall below levels set by rule and statute. How you reach this asset level will be determined by how much time you have to plan.

The Differences Between Long-Term and Crisis Planning

1. Pairing Medicaid Planning with Estate Planning

Many people frequently consider Medicaid planning and estate planning at the same time, and may even transfer assets that would be part of their estate to their loved ones early or into one or more trusts as part of this process. Your spouse is often far better off if you have time to plan over the long-term as well. You can even create trusts that cover you both at the same time.

2. Thinking Through Your Options

Because you have the time, you can develop trusts that are uniquely tailored to you, your family, and your financial situation. You simply have more control over the process when you have time to think through your options and weigh the pros and cons of each part of the planning process.

3. Incorporating Other Planning Tools

You also have the benefit of considering things like long-term care insurance and other similar planning vehicles. While these tools may not be necessary for everyone, you at least have time to think about whether they will work well for your situation if you have the benefit of long-term planning.

4. Avoiding a Spend Down

If the need for Medicaid is sudden, you may not have time to plan as effectively as you would have with a long-term plan. You must act quickly to ensure that you qualify for Medicaid. Unfortunately, it can sometimes be to the detriment of your spouse and other heirs. You must “spend down” your assets very quickly to ensure that you qualify. In many situations, you simply lose those assets when you have used them up immediately—you may not have any control regarding who they go to or how they are used.

5. Dealing with Medicaid Fraud

Crisis planning must be done very carefully so that Medicaid does not accuse you of moving assets in a fraudulent way. It is more likely that Medicaid will take a harder look at your asset movement if it happens close in time to the need for Medicaid. In some cases, it can mean that you will not qualify for benefits. One of the many benefits of long-term planning is that this issue can be avoided almost entirely.

Whether you are ready to start long-term planning, or you are in crisis mode, Elder Care Law Firm can help. Give our team a call to set up an appointment today.

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A revocable living trust is an estate planning tool that has many benefits. If you want to control how your loved ones use assets or funds after you pass, or if you want to provide to someone else if you become incapacitated, a revocable living trust may be a good option for you.

Benefits of a Living Trust

The most important benefits of a living trust will vary depending on your unique financial and family situation. Below are just some of the reasons that individual use revocable living trusts.

1. Privacy Concerns

When you pass away, your estate must be probated in many situations. The probate process is based on a public court proceeding. That means that virtually anyone could see the assets included in your estate and the amount your beneficiaries receive. Many people do not want this information public.

Having a trust allows you to pass assets and funds to your loved ones without making it public knowledge. You create the revocable living trust while you are alive and then it converts to an irrevocable trust after you pass.

2. Avoiding Probate Altogether

In some situations, individuals can completely avoid probate by using a combination of estate planning tools. Many of those involve trusts. Probate is an expensive process that is often difficult for the family. Sometimes avoiding the whole process altogether can be a significant advantage for your loved ones.

3. Tax Savings Advantages

By putting your assets in a trust, they are not involved in your estate. That means that you will not have to pay estate taxes on them. For those who are concerned about estate taxes, this tax savings can be thousands of dollars—and certainly worth the effort to create a trust.

4. Controlling Assets and Funds

If you become incapacitated or pass away, you need to account for those who are depending on you to provide for them. However, you may not want the person you are providing for to have free reign over funds or specific assets. A trust allows you to create restrictions on your beneficiaries.

For example, if you have a piece of property that has been in your family for generations, you can explicitly state that your beneficiary can have the property, but only if they do not sell it.  You can even set up a trust specifically to hold your life insurance proceeds, so your loved ones have restrictions on how that money is used.

Creating a Revocable Living Trust

You may be surprised to learn just how simple it is to create a revocable living trust. You must draft a trust document that sets out the parameters of the trust. That includes providing the following information:

• A description of the property or funds in the trust
• Naming a trustee to administer the trust
• Naming beneficiaries
• Describing how the beneficiaries will get funds or assets from the trust

The trust document is often only limited by your imagination. You can create many types of conditions or requirements for your loved ones. Elder Care Law Firm can help you create a trust that addresses your needs, goals, and accounts for your unique situation. Call today to set up an appointment with our team.

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Many people make the mistake of assuming that they have a complete estate plan because they have a Will. While a Will is often an essential part of an estate plan, it should not be the only estate planning tool that you use. Wills cannot address certain types of assets and may not be able to leave assets to your loved ones in the way that you would like. Instead, other estate planning tools may be necessary or just might work better to accomplish your goals.

Below are just a few things that Wills cannot do that you should know as you work through creating an estate plan that is uniquely tailored to you.

1. Gift life insurance proceeds or retirement plan proceeds

If you have a life insurance policy (and you generally should!), you must designate who you would like to benefit from the policy through the insurance company. If you set out that a different person should get your life insurance proceeds in your Will, it will likely be ignored. You must take steps to change the beneficiary with the policyholder if you want the proceeds to go to someone other than who you have designated.

The same rule applies to retirement plans like 401(k)s, IRA, or pension plans. You designate a beneficiary with the plan holder. Your Will cannot affect that designation.

2. Set out funeral or burial instructions

Your Will is not the place to describe how you would like to be treated after you pass. You should leave instructions to your loved ones about this issue through another means. Your Will is often not read until after the funeral, which means that your loved ones may only learn of your wishes after your burial if you only include those instructions in your Will.

3. Gift jointly titled assets

A Will can only convey property that you own. That means that if the property is held with someone else, you can gift just your share. However, if you own a property jointly with the right of survivorship, that property will automatically go to the other person that owns it with you.

The most common example of this is when spouses own a home together. When one spouse dies, the house will often automatically go to the other spouse without reference to the Will because they own the property jointly with the right of survivorship. There is no need to include this property in your Will, and if you try to give it to someone else, that gift will be invalidated or disregarded.

4. Provide access to specific bank accounts or funds

You cannot simply leave someone a bank account or another investment fund. You can leave the beneficiary the money in that fund, but the fund itself generally cannot pass through a Will. Instead, the executor that you name will take steps to liquidate the account and provide the value of the account to your designated beneficiary.

However, if you designate the account as “payable on death” to another person, then the value of the account can pass to someone else without ever having to note anything in your Will. Nonetheless, the account itself does not pass—just the value of the assets in the account.

A Will is a valuable estate planning tool that you most people should use. However, it is just one piece of a larger package that makes up your estate plan. Learn more by contacting our team at Elder Care Law Firm. We can help you create an estate planning package that fully addresses all of your unique needs.

The post A Partial Plan Won’t Help: 4 Things a Will Cannot Protect appeared first on The Elder Care Law Firm, PLLC.

Although Medicaid is a federal program, it is actually state-run. That means that the program varies slightly from state to state. In North Carolina, the NC Medicaid Division of Health Benefits and your county Division of Social Services (DSS) caseworkers work together to ensure that the Medicaid program runs smoothly.

Whether you are eligible for Medicaid will depend on a number of factors, including your age, income, and health needs. This blog focuses on the income requirements for North Carolina citizens.

The Basics of the Medicaid Income Requirements

The purpose of Medicaid is to help older, disabled, or low-income individuals have healthcare options when they cannot afford that care themselves. Because of that goal, Medicaid is only available to those who fall under certain income limitations.

There are income limitations for each “set” of circumstances that trigger Medicaid eligibility. That is, your unique life situation will put you into a different category of income limitations. It is important to note, however, that if you are already receiving Supplemental Security Income, you are automatically eligible for Medicaid, and you do not need to apply.

Medicaid for Elderly, Blind, and Individuals with Disabilities

You must have less than $2,000 of “countable” resources. These resources include things like:

• Money in your bank accounts
• Retirement accounts
• Stocks and bonds
• Life insurance policies (cash value)
• Cash

“Non-countable” resources include the value of your home, one car, home furnishings, clothing, and jewelry.

Medicaid Availability for Infants and Children

If you are requesting Medicaid for your children, there are separate limitations that depend on your family size and the age of your children. For example, if you have an infant to a child of age 5, a four-person home cannot have monthly income above $4,393 to qualify for Medicaid. If the child is older than age 5, that income level drops to $2,782.

Keep in mind, however, that even if your income is over the limit, you may still be able to get assistance with healthcare with a Medicaid deductible.

Medicaid for Families with Dependent Children

Medical coverage is available for families who have dependent children. However, these income limitations are much lower. A family size of one, for example, has to make below $434 per month to qualify. A family size of 4 must fall below $744 per month.

Medicaid for Pregnant Women

There is also a separate program for pregnant mothers. Women may be able to apply for this program while they are pregnant or even after they deliver their child. This program only addresses services related to pregnancy, but it can be extremely helpful for a new mom. It also offers things like family planning classes and childbirth classes. The income limitations are much higher for this service – $1,983 for a family of one.

Income limitations are somewhat complicated. DSS is an excellent resource for those who want to learn more about eligibility requirements and whether they qualify.

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Many people confuse Medicare and Medicaid. While many of the benefits from these federal healthcare programs are similar, the programs themselves are very different. They apply to different people, and they offer various levels of benefits. The main distinction is that Medicare is considered an insurance program while Medicaid is an assistance program.

How Does Medicare Work?

Medicare primarily serves those over the age of 65, regardless of their income levels. It is also available to younger people who are considered disabled. This insurance program is generally accessible to people who have paid into the program over the many years, often decades, in which they have worked. People on Medicare will still pay premiums and deductibles, just like a traditional medical insurance program. However, the rates are often lower than what would otherwise be available in the regular market.

Medicare is a federal program that is run by the federal government. It is essentially the same throughout the United States, and it is administered by the Centers for Medicare & Medicaid Services.

Medicare Coverage

The type of coverage you will receive from this program will vary depending on the plan you have. The overarching programs include:

• Part A: Home care, hospital, and post-hospital charges
• Part B: Doctor fees, outpatient care, labs and testing costs
• Part C: (Medicare Advantage): varies by the provider (private insurers)
• Part D: Prescription drug plans

Many people will have more than one program that applies to them at one time.

Costs Associated with Coverage

Like a traditional insurance plan, there are costs associated with each type of program. In general, there is a yearly deductible. Copays that are a portion of the cost of the care you receive will also be required. If you use very few services, for example, your total cost will be far less than someone who must frequently see the doctor or receive medical services.

How Does Medicaid Work?

Medicaid offers medical benefits for those who are considered “low income.” In most circumstances, people will pay no or very little part of the costs associated to receive medical care, but there is sometimes a small co-payment necessary for some services. It is only available to those who meet certain income restrictions.

Medicaid is administered by individual states or local governments, but those states must follow precise federal guidelines. However, the requirements to receive this type of assistance will still vary slightly from state to state.

Medicaid Coverage

Medicaid will help users pay for most basic healthcare costs, including hospital stays and routine visits to the doctor. However, it also covers things that might surprise you, like hearing aids and eyeglasses. It will also cover nursing home care for those who qualify as well. In fact, many people take steps to plan for their long-term care by making arrangements for Medicaid to address these costs.

Costs Associated with Coverage

Occasionally Medicaid will charge a small fee for some services, but there are no premiums or copays like Medicare. However, it is possible that individuals qualify for both Medicare and Medicaid, and Medicaid will sometimes pay for the costs that Medicare will not address.

Medicare and Medicaid planning should be a part of your long-term care planning, even if you are healthy today. To see how we can help, contact our team today at 800-491-6556.

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Estate planning can a very complicated and confusing process. There are a lot of misconceptions and myths around estate planning, which is why it’s important to know the facts to avoid making any mistakes.

This article will help enlighten you on the common estate planning mistakes and how you can avoid them to save you and your family the headache and money in fixing problems and the unnecessary fees and taxes that go along with them.

1.   Not having sufficient understanding of how assets will pass upon your death

Most people believe that their Will controls how their assets will be handled upon death. However, a lot of people’s wealth comes in the form of life insurance accounts and retirement plans, which are assets that are outside the control of trusts and Wills. Specific assets, such as retirement plan accounts and life insurance, are not subject to probate, are outside the jurisdiction, and cannot be affected by a Will or trust, while properties and real estate you own are controlled by Wills and trusts.

How you can avoid this mistake:

When major changes happen in life, it’s always a good idea to review your beneficiary designations on your plans and policies. This ensures that your assets are passed according to your current situation and goals.

2.   Failing to protect a disabled beneficiary

Disabled children with no public assistance are almost certain to spend their inheritance on their personal and medical needs in just a few years. They may also be ineligible to get public assistance if you leave them the inheritance outright unless they spend it until it goes down to the statutory limit required by the state. If you leave the inheritance to another child (this usually occurs if the child promises you that he or she will help the disabled child), in the event that child dies, gets divorced, or sent to jail, it could result in the inheritance not being available to the disabled beneficiary.

How you can avoid this mistake:

Consider leaving your inheritance to a disabled beneficiary via a specially-drafted trust to ensure your beneficiary is protected and maintain their eligibility for public assistance.

3.   Relying on Beneficiary Designations

Beneficiary designations are a form of estate planning which is very simple and can’t manage contingency plans properly. If a major life change happens and you don’t update your beneficiary designations, proceeds may get jumbled up.

How you can avoid this mistake:

Trusts can control and manage how your inheritance or life insurance, including contingencies, will be distributed to your beneficiaries. You can also name a person who will distribute the inheritance to minor children and grandchildren on your trust.

When you want to preserve as much of your estate as possible for the next generation, an experienced estate planning attorney can present you with strategies that represent the best solution for your individual circumstances. At The Elder Care Law Firm, we are dedicated to helping our clients make arrangements that give them peace of mind while protecting their loved ones and their legacy. Please contact us today to schedule your consultation.

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