Westchester County Elder Law Attorney
When it comes to elder law, one wrong move can become one very big, costly mistake. If you are trying to be proactive, make sure you engage an experienced elder law attorney. Otherwise, sometimes things can go wrong through no fault of your own.
Take, for instance, the true case of a senior (“Marge”) who came to our office. Marge had consulted a real estate attorney instead of an elder law attorney. Marge wanted to protect her home from the high cost of nursing home care. One of Marge’s friends told her to get her house out of her name. Marge bought the house for $40,000.00. At the time she went to the real estate attorney, the house was worth in excess of $600,000.00. Marge walked into the office of the real estate attorney (who had no experience in elder law) and asked him to transfer her property to her children. The real estate attorney obliged and prepared and filed a deed as requested. The elder law mistake is obvious to an elder law attorney. Unfortunately, no one told Marge that, by transferring the deed in that way, her family would be looking at a $540,000.00 capital gain on the property. And, the family was going to have to pay the taxes on that capital gain. Had Marge consulted an elder law attorney, she would have learned that there was a way to avoid incurring that capital gain. The elder law attorney would have told Marge that the simple solution to this problem would have been to include a life estate for Marge. This type of transfer would have not only guaranteed that Marge could live in her house until her death; but would have also provided Marge’s children with a stepped-up tax basis and no capital gains tax issues!
Another type of elder law mistake occurs when people have done elder law planning, but they fail to follow through. Elder law attorneys refer to this inaction as “failure to fund” the plan. In other words, they simply do not take the final necessary steps to protect their assets. Whether it is poor advice by the elder law attorney drafting the plan or simply a failure to follow the attorney’s instructions, the failure to fund trusts is one of the most common mistakes in elder law planning. For example, an elder law client will have a Medicaid Asset Protection Trust (sometimes called an Irrevocable Income Only Trust) prepared by an attorney, but, for some unknown reason, the client does not change the deed to his/her home. The Medicaid Asset Protection Trust never owns the house as it should. In other cases, the client fails to re-title their bank accounts or brokerage accounts to reflect that the assets are held in trust. It is not until after the client needs nursing home care or sometimes after the client’s death that anyone realizes that the Medicaid Asset Protection Trust was an empty shell. The unfunded trust was rendered useless and a solid elder law plan was wasted. In the case of nursing home care, the client will not qualify for Medicaid benefits. Since the elder law trust was not funded, the Medicaid office will have no choice but to treat the assets as belonging to the senior. The end result is that the client will lose all of his/her assets to the high costs of nursing home care. However, the benefits of the Medicaid Asset Protection Trust are not just limited to qualifying for Medicaid. Upon the death of the senior, an unfunded trust means that the decedent’s assets or estate must pass by Will or the laws of intestate succession. If the assets had been placed in the trust, then probate would have been avoided for all assets that were in the Trust. Probate avoidance is an important feature of Medicaid Asset Protection Trusts because the probate process can be costly and time consuming. So, at the time of death, the deceased client’s family will have to go to Court to probate the Will and/or administer the Estate. Had the elder law plan been followed, probate could have been avoided.
The lesson to be learned from these elder law mistakes is that you must do your homework. Mistakes could apply to any area of law. Make sure that the attorneys, accountants, insurance planners and investment advisers you hire are professional and competent. When meeting with your advisers, ask a lot of questions. The more informed you are, the better. Contact our experienced Westchester County elder law attorneys for more information or assistance today.
Elder Law FAQs
Many people wonder how elder law is relevant to them and their loved ones, whether they have concerns regarding nursing home issues, Medicaid, asset protection, probate avoidance, guardianship, or any of the other matters affecting our clients. Here we provide answers to some frequently asked questions falling under the umbrella of elder law with the goal of helping you think proactively about important considerations that inevitably come with aging. For more information about your specific elder law concern, please contact our office to schedule a consultation. At Meyer & Spencer, PC, we will provide a solution!
How can I protect my spouse’s or parent’s property from the high cost of nursing home care?
Residing in a nursing home is extremely expensive, but you can protect assets from the cost of nursing home care by planning in advance. For example, an asset protection plan may involve gifting property now and only retaining enough assets to cover the projected cost of long-term care, or the asset protection plan may involve purchasing a long-term care insurance policy, or setting up a Medicaid irrevocable grantor trust to protect assets from nursing home costs. When you plan, you have several options. We can help you develop the asset protection plan that’s right for you and your family.
How can we make sure our children receive their inheritances in the event one of us dies early and the other spouse remarries?
A qualified terminable interest property (Q-TIP) trust is a type of trust that enables you to provide for your spouse during his or her lifetime, yet ensures your children receive the inheritance you intend for them to receive. We can help you set up a Q-Tip trust as part of your will or a revocable living family trust.
How can I make sure my disabled child is provided for after I die?
A supplemental needs trust (also referred to as a special needs trust or a supplemental care trust) is a discretionary trust designed to provide for a disabled individual’s supplemental care (i.e. those things not provided under public benefit programs), while maintaining his or her eligibility for public benefits. At Meyer & Spencer, PC, we are well-versed regarding the mechanics of drafting and administering supplemental needs trusts. Our trust attorneys can help ensure your child can benefit from those extras that often mean the difference between subsisting and thriving.
How can I give one or more of my children the authority to handle my finances if I am unable to do so?
You can execute a power of attorney or expanded power of attorney. Powers of attorney are among the most basic and most important aspects of advance planning. They can be very broad and general, or only for a special and limited purpose. A power of attorney can be “springing,” which means it becomes effective only if and at the time you become incapacitated. Our attorneys can help you put into effect the right power(s) of attorney for your needs.
How can I help my family avoid the time delays and legal costs involved in probate?
With a revocable living trust, you can help your family avoid the probate process by transferring assets directly to trust beneficiaries upon your death. If you are the trustee of your own revocable trust, you maintain total control over all your assets held in trust until you die or become incapacitated, at which time the management of your trust will be transferred to a successor trustee whom you’ve appointed. You may also change the terms of a revocable living trust during your lifetime if circumstances arise necessitating a modification. Please contact us to discuss how to avoid probate—we know the ways and means.