We have been going over the final details of my sole and separate property trust which consists of funds etc that came from my parents and which my dh never wanted anything to do with insisting it is for my care and support if he is gone..( meaning in heaven not at Vegas putting it all on the red). As you may recall our original trust was done by an attorney, who unknown to us, was disbarred...made errors etc so all that is being cleaned up. Anyhow, DH's memory may be sort of short but he can carry on a decent conversation and ask appropriate questions. He didn't get stupid, just forgetful..What was done was he met alone with our attorney, who was and is, representing both of us. Here is the new twist which some here on the boards may have already had some issues here, and that is step kids, or even your own, who want " what they think is theirs" now...and court battle ensue. DH is going to have a document drafted up for him by another attorney who does the court room work, as his rep to ensure that this stands and anyone, no matter who, that tries to make trouble or make an effort to claim say a % of the house etc..that will ensure that they are OUT in a big way..I went this way not so much because of my step kids but more because of a nephew who would be more likely to be a troublemaker though he is in no way going to benefit from anything unless I say so..and not being a stingy sort, I would provide him a keepsake or two but that would be of my choosing. Also to keep from fights among the kids over my jewelery ( and I do have some very nice pieces) unless I in writing designate it for someone, it is going to be sold..and proceeds then divided up....after certain other contributions to certain charities are made : ) .
What my lawyer learned at a conference she just attended is that in marriages where one spouse is several years younger ( say 12 to 18 years or more, or if there is a second marriage where there are kids from one or both marriages) that some who think they are entitled to the assets of the parents are trying to go to court after it in spite of trusts etc..so they are putting into place tools to prevent this at the peril of the one who tries to cause trouble. In our case my husband has said to me over the years and to the lawyers, no matter which one we worked with, that if something happens to him he wants everything to come to me,,the kids can wait,,his words...they are married and have husbands and they need to make their own way and if I want to leave them something it is my choice...of course some community property issues fall into place but you get the drift..
Sorry this got a little long but if any of you are doing anything with trusts right now and have the kid or other relative issues that may be of concern there is something new to consider...
Mimi...Don't you live in Calif??....According to my Elder Attorney everything HAS to go to the other spouse because this is a community property state. You don't have much choice in that except for property that can be proven is NOT part of community property which is not an easy thing to do.
The one thing our Elder Attorney did that I like and that is that nothing can be distributed until we both or dead. The funds from our property, etc. if sold, goes into a special needs fund for the care of the remaining spouse.
That is pretty much how it is. But what came from my parents, should have been put in a sole and separate trust. The way it is being set up is , which I forgot to mention, is that if something happens to me first, it will be used to provide for him following his income ( which if in a NH would just about make it but with nothing extra). And when he is gone, then the remainder of my trust will be distributed as I direct. He has provided a signed declaration stating, what is the word, rejecting it coming to him..these funds he does not want to be viewed as community property so that what is left of what my parents left to me, half goes to his side of the family, half to mine, unless that is what I want..and it provides language that says anything I desire to give to his kids or anyone else for that matter, has to be hand written and signed by me or it can be typed and requires my signature. We have a nephew who seems to think anything and everything should come to him..he is one who could cause troubles just resulting in a headache. What is wanted too is to keep the step kids from making life miserable by demanding, since they are in their 50s now, half my estate now..as some have tried to do. Our lawyer has seen seemingly good stepkids when death happens get greedy especially older ones. This is an effort to put a stop to interferences. Inasmuch as I have all the documents of my parents will/trust, it was pretty easy to prove that it was not something we earned or gained by our efforts but was given to me by my parents. I have all the paper work going back years and I did not gift it to him when it came to me. ( Not that I wouldn't share it with him) but he does not want his kids trying to get at something, just in case they might if times are tough for them, when they really have no right to it. We can do with what is ours as we wish.. Yes if I go first, the assets in this will go into a special trust for him and him alone for his care, it is similar to what you are doing..I think I may not have said it very well..MY DH signed a disclaimer to these funds...he is not selfish and I have no problem sharing with him. But we do not want those who THINK it maybe something due them to cause trouble for ME if he predeceases me. If he is gone and it is just me, I can make changes as I see fit. These things are complicated....
WE have our joint trust which will follow the community property path with things coming to me first and then the split is equal to each side of the families if anything is left ( I like the bumper sticker that says " we are spending our children's inheritance"
Yes, Mimi...it sounds like both your and my attorney are talking to us from the same page. That is very encouraging because they both sound like they know how to handle things here in Ca.
According to my attorney, my separate property can remain separate because it is a rental property I had long before my marriage to my present husband. And, in the divorce from my previous husband the judge ruled it to be my separate property. My attorney said that would hold a lot of weight if ever it would be challenged. But, I had to put it in a separate trust and my grandson has control over the property which is the way I wanted it.
I had a useful meeting with an Elder Law attorney yesterday, so let me sum up what I know, adding it to this thread because it is somewhat related information.
If you don't want to spend all your savings on your spouse's care, it is worth seeing an elder law attorney who specializes in Medicaid at least 5 years before your spouse needs nursing home care, particularly if your spouse does not have long term care insurance (or might run out). The rules are very complex and vary a lot from state to state.
Medicare does not pay for nursing homes beyond a few months of rehab. Medicaid will help with the cost of a nursing home, but only after most of the savings of both spouses have been spent, which is easy to do when a nursing home costs $5,000 to $10,000 a month and some people with dementia live in a nursing home for many years. My husband's 100 year old aunt has been in a nursing home for two years and is doing well--in a wheelchair but still mostly competent and enjoying going out to a restaurant for lunch. Her long term care insurance lasts 4 years. She will have to move to a nursing home that takes Medicaid, but spending down her savings and applying for Medicaid should be fairly straightforward.
It isn't so straightforward if you are married. Medicare treats the two spouses as a unit--it doesn't matter if assets are in one name only (even a prenuptial agreement won't allow one spouse to keep separate funds). The well spouse is allowed to keep the house and its contents, one car, and half of the couples savings up to around $100,000. All the rest of the couples's savings must be spent on nursing home costs, including in many states the well spouse's retirement savings. I have a lot more than $100,000 in my IRA and 403b retirement savings accounts. If I didn't live in South Carolina, I would have to pay the early withdrawal penalty (I'm only 56 so I could easily be under retirement age when I needed the money) and spend down those funds on my husband's care before we could get Medicaid help with the cost of a nursing home.
What about my retirement years after he is gone (I'm 10 years younger and he was diagnosed at 63) or money I inherited and had hoped to pass on to my children? About the only way to keep more than the allowed amount for myself is divorce. I do have some options for my children if I do it now. Medicaid looks back and counts any money given away up to 5 years before the person applies for Medicaid. I can give money to my children or set up an irrevocable trust for them, because I am at least 5 years away from needing help, but if I did that within 5 years, Medicaid would not pay for a number of months equivalent to what was given away.
Be careful also if you expect to inherit any money. If my mother dies before my husband, the inheritance I get from her must be spent on his care before he would be eligible for Medicaid. There may be a way to fill out legal forms to refuse the inheritance now, so it goes to my kids instead. But I have to do that before the five year look-back or Medicaid would count it as a gift.
Yes Charlotte-I hear you-They told me if that time comes they have to leave you your house to live in and a car to drive(if you have one). They can not take your money if you don't have any!!
What varying info from elder care, certified attorneys we receive. I've been told the farm I inherited years ago and has always been in my personal trust is exempt from Medicaid consideration. My 403b was rolled into an IRA earning more than 2% (yea), and I was told I can put that into an irrevocable single premium annuity so it won't be counted, either. I will withdraw gradually from that and if I die before it's paid out, it goes to the kids. BUT the attorney and the annuity representative both said to do nothing about that UNTIL my hb is in a nursing home. One thing that really surprised me was the annuity rep said, while working up our situation, that after the first year my income won't count; so I could get (philosophically) a job at $100,000/yr or whatever, and it wouldn't count re hb's medicaid.
Nursing home may be closer than I think. Hb fell in our foyer during his nighttime peregrinations and knocked himself out, cutting his head, too. He slept most of yesterday; tonight he's like he was before the fall. Monday an MRI and echocardiogram are scheduled after a bit of valium. (He wouldn't/couldn't stay still for those yesterday.) Yes, I'm sleeping well while his "away," thank you for asking:)
@Zibby: It may be the personal trust that protects your inherited assets; mine are not in any kind of trust. I wonder if I could put my retirement savings up to this point into an irrevocable annuity even though I am not planning to retire for another 10 years? I will ask the Elder Care attorney. I worry that South Carolina will change its rules.
It seems that a lot of states are having (?) to change their rules. It's hard to know what to do at any given point in time. And...of course, each state has different rules!
Charlotte- I'm with you. Although I already had to qualify Hubby for medicaid, what a process. But now they told me since he had been qualified they never look at the spouses income again. So I guess there is still hope of a better life.
When you are 59 1/2 you can start collecting from 401s and iras or annuities like TIAA. In RI, when you are collecting, that money does NOT count towards your "assets" that need to be split. Nor does social security. In addition, and this is important but I am not sure if it is everywhere or just in RI, you can "spend down" the assets ON ANYTHING TANGIBLE in the first month after admission to a NH. after that you have to spend it on medical stuff only. You can't give it away but you can spend it on your house, buy a new car, take a vacation, etc. But just in that first month.
When my husband finally went into a nursing home I had to immediately pay $9000 for the first month (plus a couple of days ) and I knew I couldn't sustain that so I went immediately to the elder law lawyer. She told me what to count as assets and how much I had to spend down. I then spent the next three weeks spending down. Fixing up both cars to a fare-thee-well. Arranging and paying to have the house painted and some new wiring put in. A new front door. A long term care policy for ME. The nine thousand. Taxes and insurance for the upcoming Year. Etc. On May 31 I had $1000 left so I bought an iPad. That night my husband had a stroke and died 24 hours later. So I never was accepted for Medicaid, which was rather a letdown after all the work I did. But it's nice to have all that maintenance behind me!
Briegull*..yeah what a way, though to get the chores done. But you at least put the funds where they were truly needed. While I have our trusts, and HOPE to high heaven that if the day comes I have to use the services of the NH, and if I need to do the spend down thing, I do have projects such as those you listed that need doing..I guess maybe that is why I am putting it off to some degree.I won't let things get to the point of ruin or real disrepair but the driveway needs new asphalt, I need the roof ( Mission Tile) cleaned, the house could use a new coat of paint both inside and out, things like that...it would not take long to be poor.
I was told by Fidelity that when/if I take early retirement at age 55 (which is one year away) that I can start taking money out of my 401K without penalty. I was told that as long as you are receiving a retirement check, that you can draw before age 59 1/2. If I keep the money in the Fidelity account, the rules are different than if I transfer the money to an IRA. The difference between the actual 401K account and the IRA account had to do with me wanting to take money sporadically when and if I need it rather than taking scheduled monthly withdrawals. The conversation was two years ago, so I don't recall specifics.
My company has an early-retiree health plan that will cost $400 or so a month for both of us. this is quite reasonable. I may need the 401K to pay this preimum. DH won't be able to take early SS for 3 years, after I reach age 55. At least the option is open to me, if I want to take pension check. In reality, I will work at least two more years, may be three. But the option is there.
Mary...Could your dh apply for social security disability? My dh applied when he was 58 or 59 and got it. He couldn't work any longer and had taken early retirement. He is 64 now and also get medicare.
It was a slow grind but 2 years after applying at age 55 my wife got a SS disabilty at age 57. The dollar/month amount equaled what she would have received if she worked to her normal retirement age of 66. (the difference between early retirement and disabilty) The SS disability automatically enrolled her in Medicare. (not needed because I am still working and get insurance)
We did it without a lawyer. I even started the process online and never actually went to a SSA office. The first check was huge because it covered all that she was entitled to back to her original disabilty/Dx. (2 years) It is worth trying for.
JudithKB, DH has been a "stay at home" spouse (by our choosing) for 12 years. We call him the Homemaker on loan apps. We found out 2 years ago that if you have been out of the workforce for 10 years, that you lose the right to file for SS disability. Not too many people know this. Another factor is that he is still undiagnosed.
So many different choices and issues. I'm hoping to keep working--I never wanted to retire early. My husband did get Social Security disability when diagnosed at age 62 (we had to appeal once, didn't use a lawyer), and also disability retirement from his job. So we have been relatively lucky.