I have a question to those of you who have elected to change your will. In what way have you changed your Will? I am aware that if a spouse is in a NH facility under Medicaid and received an inheritance by Will or other means this can disqualify them for the Medicaid coverage in the long term facility and thus cause them to loose the benefits they have already qualified for, I am also aware that most states will not allow you not to name your spouse in your will, IF YOU HAVE CHANGED YOUR WILL WHAT METHOD DID YOU USE!!!!
A Certified Elder Law Attorney will know the answer to that question. It does depend upon the State in which you live. Here in Florida, I have what is called a "special needs" will. The money is not left to the person with "special needs", i.e. your spouse with AD. The money is left to someone you designate to care for them. That person is required by Florida law to spend a certain percentage - I think it's 20% - on the CARE of the special needs person. In our case, it no longer matters, because we no longer have any money, except my life insurance. I don't know if life insurance is considered an inheritance, but if it is, at least 20% must be used for Sid's care. I have instructed my son that if I die, ALL of the life insurance money is to be used for Sid's care.
You are correct that an Elder law Attorney will know the answer to this Joan. I am just wanting some feed back before I make this big decision. I always thought a Special Needs Trust was for someone under the age of 65, I don't know a lot about Trusts and need to make a big decision as this has lasted 11 years for us and I am afraid I will be the first to go.
I haven't done Medicaid planning yet, but have started to make changes in that direction. Our wills were already set up to go mostly to our children, not each other, and the lawyer knew a way to get around the spousal requirement. We moved the house to my name. What has seemed to me most important is to make our children rather than my husband the beneficiaries not just of insurance policies but of all the other things that require a beneficiary to be named, such as my work retirement. My husband turned out to have a couple of small insurance policies he had bought before we married that still had his brother and aunt (now age 99) as the beneficiaries.
pamsc, I would bet that because your husband also did the will with you that he or you were allowed around the spousal requirement by just signing but when the person is already incompetent I think that would be a hard thing to do in most states. I do know that you can each opt out of the will on your own if you plan far enough ahead. If you do a POD on bank accounts to others then if Medicaid comes into the picture and you die it would be as though you made a transfer to the person by POD so that is a hard one to do also.
I have the "Special Needs Trust" in my will for DH that is how the ELA wrote it. My DH was about 78 when we took care of finances and medical so, at least in SC, it has nothing to do with age.
I had an ELA redo my will 2 years ago. I've left everything to a sibling. He did not say anything about having to leave my spouse anything. The problem is if DH qualifies for Medicaid before the 5 year lookback - then whatever I have will be subject to paying for him.
We are in that process now and we are taking care of ME first just in case. I inherited some $$ and the way I am going to set it up is that if I get my cloud and halo first what is mine, which is sole and separate property, will remain in trust for the care of my DH and an $$ per year for his care which could include house repair, car, his health etc. Then when he gets his cloud and shiny halo what is to happen to it. We will also have our community property trust.
There is one thing my lawyer suggested and that is should he go first, as regards the community property trust, since he is so much older than I am ( nearly 20 years) and his girls ( I call em ours) are in their 50s, not much younger than I am, that I "buy them out" so to speak..distribute his half to them at that time. Has anyone else given that thought consideration?
My dh and I had an ELA prepare trusts for our community property. The trusts are set up so that distrubtion is for my dh's care by me or the trustor if I am dead. There can be no distrubtion from these trusts until we both are dead. I really like the way the attorney did this since we both have children from previous marriages and no one can get anything until we both are dead.
I am wondering if what you are calling a Special Needs Trust is what I call a Testamentary Trust which is done by a Will and is not really CREATED until AFTER YOU DIE, as it happens in your will at your death. I do believe this type of trust is safe as far as any lookback with Medicaid but other type Trusts are usually counted unless they are irrevocable, especially any amount that you have any control over.
LFL, what State do you live in? There are not many States that will allow you to leave your spouse completely out of a will.
I have become a believer in giving children their inheritance early, if that is possible. I suppose I may luck out and get my inheritance from my mother after I have spent what I have on DH's care and when it is too late for Medicaid to take it. But it seems strange to get an inheritance around the time I reach retirement age, if my mother lives as long as her mother did.
I'm planning to give my kids their inheritances by paying for college, which Medicaid can't complain about. But if it weren't for those considerations I would think the time an inheritance is most valuable is when you have kids at home.
I'm in an unusual position to be able to think about what I can give to my kids when I am still alive. I have very good retirement, and what I want to pass on to them is money I inherited from my grandmother. Even so, it is a little scary to give away what I might need later. On the other hand, it is the best way to keep it out of the hands of Medicaid.
Jane, I am in a community property state - New Jersey. Our attorney is a certified Elder Law attorney. I would have thought he would know the state/fed laws regarding this.
LFL, Please don't think I am saying the Attorney did not know the laws regarding this. I am sure he did. Even an Attorney can sometimes slip up and not know it all, no one does. I am just trying to get an idea of how some of the board are handling the Wills. I am about to change mine and wanted some feedback.
By the way, in your State of New Jersey they have the same rules regarding a spouse being dis inherited as the State in which I live. The rules in your State will allow the spouse who has been left out of the Will to take some of assets that are not in probate and some of the assets that are in probate, so YES, LFL, the spouse does have rights in your State, guess maybe the Attorney thought it would not be a problem.
Jane, thanks for the information. I understand that you're not criticizing my attorney. I am grateful for the info because I would rather understand what needs to be done now than have it be a problem later (of course if I'm dead I won't care).
Jane i am not dealing with medicaide which of course can complicate issues if spouses receive inheritances. but in mine i have a clause that states that my executor shall have the unchallenged authority to distribute any funds if he deems a beneficiary incapacitated thru mental or disability. ie-stating by means of distribution thru means of trusts, guardianship or administrators instead of funding the person individually. it was done prior AD and i am thinking it will be ok like this as it addresses the incapacity issues. it could be a means to look into giving the executor this option of distribution. it wouldnt be hard to show incapacity by dr to the courts. also trying to minimize the assets you leave by either means of gifting or trusts may help. i am not a professional atty either but i am under the assumption that there are only 9 ACTUAL community property states at this time. -- meaning distribution laws pertain to an automatic 50/50 split for community property.threr are other states lke new jersey among others like maybe yours jane, which are considered Equitable Distribution states which also split property BUT at the discretion of the presiding courts, not automatic 50/50 like community property law states. so there is a difference. i also tend to agree that under these equitable distribution state laws, the disinherited spouse can make a claim to the non probate and probated assets if left out. i would assume the way to get around it would be by prenuptial agreement stating release of any claims to assets or signing one stating it sometime in the marriage.i wouldnt try to to this if they have a diagnosis. i could not see a judge giving them nothing in probate if they know they are incapcitated esp if they are excluded there may be questions. we can only assume the attorneys we hire to get our affairs in order are competent on current laws and know their business. as we know sometimes it a hit/miss and we pay the price. so many variants to the same questions it seems. i think we could probably get 2 different opinions from attys in the same state on how they interpret laws. but the only real issue is how a court will interpret it.
divvi, you are correct on the Equitable Distribution for my State and of course New Jersey among others. I do know there is a difference in Community Property States and the Equitable Distribution States , My point is trying to make my will in such a way that if I died and my husband had to be placed and lingered long enough for funds to run out that he would be under Medicaid. I want the Will in such a way that the funds would not disqualify him at that time. The prenuptial would be of no benefit in any case because Medicaid does not honor a prenuptial. Courts could decide to take part of the probate and other assets if Medicaid elected to go that route at my death. If a Will were made naming a trustee that would be directing the proceeds to be used as the trustee saw fit is a possible solution as the spouse would not be left out but yet still named in the Will.
Just trying to think of a way that the funds in the will would be protected for him if this did happen. If this disease continues for many more years that is how we will end up. I think the clause in your Will would most likely take care of that problem and would in fact keep the inheritance from disqualifying the person already on Medicaid in a Nursing Home. That is just my opinion and of course I also am not a professional by any means of the term.
Divvi, thank you for your input, your clause is one that I most likely will use, however I may just use the unchallenged authority phrase and add that no funds be distributed that would cause the person to be disqualified from any Government Assistance. I will run that by our Attorney.
Jane i agree talk the pros/cons over with your ELA, it has to be done correctly but like you say so many variables that can get them disqualified if not thought thru. at least if you are trying to protect whats left to your spouse, the executor could have options at distribution to set up some sort of trust or third party holdings for the incapacitated spouses assets. medicaide makes it all the more complicated. i hope find something that works for y ou . good luck. divvi