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Every adult needs an estate plan. Among other things, your estate plan gives directions on how to distribute your property after you have passed away.
Your estate plan should also provide for the possibility that you may someday become incapacitated; you will need power of attorney for both financial transactions and end-of-life medical decisions.Did you know everyone already has an estate plan? If you don’t make a will, the State of Oregon has made one for you. In a legal process called Intestate Succession, the State directs how your property is to be distributed - basically to your next of kin according to their blood relationship.
If you don’t give someone power of attorney for financial matters and the need arises, the state courts can appoint a conservator – at your expense. If you don’t sign an advance directive for health care with end-of-life medical decisions, the state courts can appoint a guardian – also at your expense. It goes without saying that the State might not handle everything exactly the way you would like; so it is important that you have a proper estate plan put in place.
A comprehensive estate plan includes, at a minimum, a financial power of attorney, an advance directive for end-of-life medical decisions, and a will. These comprise your basic legal survival kit. You may choose to upgrade your will to a living trust. All these documents will have a profound effect on your life and on the lives of your loved ones. A mistake can have far-reaching negative effects on your family. For example, do-it-yourself documents may not be legally enforceable, or your intentions may not be correctly understood—to put it simply, if you don’t plan properly, you may not get what you want. We recommend consulting with an experienced Estate Planning attorney before getting started. An experienced attorney can help you sort through the legal and personal information you need in order to put together a plan that works for you.
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What happens to your property after you pass away? Who will have the responsibility, and the authority, to manage your assets and affairs when you’re gone?
Probate & Trust Administration
What happens to your property after you pass away? Who will have the responsibility, and the authority, to manage your assets and affairs when you’re gone? While the answers to these questions can depend a great deal on how you’ve set up your estate plan, one of the more common ways a deceased person’s property and affairs are handled is through a process known as Probate.
Probate Administration
Probate is primarily a legal process whereby property owned by a deceased person is transferred to a living person. In probate, a court oversees the administration of a decedent’s estate. The case file is a public record. As part of this oversight, the court appoints someone to serve as a Personal Representative (the Executor). This person is granted the legal authority to act on behalf of the deceased person. The Personal Representative is then able to manage the deceased person’s affairs. The probate process can take anywhere from 6 months to several years to complete. On average, however, we have found that a probate proceeding without complications or conflicts lasts approximately 6-9 months.
Trust Administration
If your estate plan uses a trust (as opposed to a will), and it has been properly maintained, your heirs will not have to go through the probate process when you pass away. Trust estate administration is based on the same concept as a Probate: after you pass away, someone is granted authority to manage your assets and carry out your wishes. Unlike probate, however, trust estate administration does not require court supervision. Without court supervision, trust estates tend to be less costly than probate, take less time, and generally go more smoothly. Additionally, while probate creates a public record of the entire process, a trust administration can be kept private.
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A powerful legal tool used to manage and protect assets. It can be used when the person granting the authority has become incapacitated or just traveling away from home.
What Is A Power of Attorney?
A Power of Attorney is used to delegate legal authority to another person. The principal (or the person granting the authority) gives the agent (or the one receiving the authority) the power to make legal decisions on the principal’s behalf. These decisions may involve things such as: handling bank accounts, selling real estate, and managing other assets. It is a powerful legal tool used to manage and protect assets. It can be used when the person granting the authority has become incapacitated or just traveling away from home.
Are There Different Types Of Power of Attorney?
A Power of Attorney can be short and simple or very extensive. Some are limited to simple banking and real estate transactions. Others include broad powers to transact all kinds of business.Powers of Attorney used for transactions related to eligibility for Veterans pension benefits or Medicaid benefits, for example, must contain express authority for those transactions to be effective. A careful lawyer drafts a power of attorney to fit the client's needs.
When Does a Power of Attorney Expire?
In Oregon, all Powers of Attorney are "durable," meaning that, unless the document says otherwise, the authority granted continues in effect even after the person granting the authority becomes incapacitated. The Power of Attorney expires when the person granting the authority dies. How Can a Power of Attorney Be Abused?The potential for fraud exists in every Power of Attorney arrangement. Through self-dealing, embezzlement, theft, or unlawful gifting, a Power of Attorney agent may significantly deplete an estate. Other ways of financial exploitation include changing beneficiary designations on life insurance or annuities, and opening bank accounts with joint title or pay on death provisions in favor of the agent. Because of the potential risks, you should consult with an experienced attorney before signing any power of attorney documents.
Can a Power of Attorney Be Challenged?
If the person granting the authority doesn't understand what they are signing, the creation of a power of attorney may not be valid. If a validly granted power of attorney has been abused by the agent, grounds may exist to sue the agent for the return of embezzled property or for monetary damages. The guilty agent may also be charged with a crime. The person granting the authority may sue or, if he/she is deceased, the intended beneficiaries may be able to sue the agent for breach of fiduciary duty, interference with estate planning, or a number of other causes of action. Can I “Fire” My Power of Attorney Agent?
You can change your mind about who acts as your agent at any time. If you are not happy with the way your agent is managing your finances, you can revoke the power of attorney by giving your old agent notice in writing that his/her authority is revoked. You can then appoint a new agent you trust.
A Word of Advice: a Power of Attorney is like a sharp scalpel - one of the most important tools in our legal "black bag." It can preserve and protect from harm, but in the wrong hands, it can make a big mess. It is wise to have an experienced Estate Planning and Elder Law Attorney help you create your Power of Attorney and advise you how to safely use it.
There is a little known monthly pension benefit for certain wartime veterans and their surviving spouses. It is the Department of Veterans Affairs pension called Aid and Attendance.
In order to be eligible for this benefit the veteran must have served 90 days on active duty anywhere in the world with at least one (1) day during a period of one of these declared wartimes*:
WWII Dec. 7, 1941 through Dec. 31, 1946
Korea Jun. 27, 1950 through Jan 31, 1955
Vietnam Aug. 5, 1964 to May 7, 1975 (or in-country of Vietnam after 2/28/61)
Gulf War Aug 2. 1990 through Present
The veteran must show a medical need for assistance with activities of daily living as well as the financial need for additional income and assets to help pay for assistance. Benefits are awarded on a sliding scale according to need with certain parameters. The current (2019) maximum monthly Aid and Attendance pension benefits are as follows:
Veteran and spouse: $2,230
Veteran: $1,881
Surviving Spouse: $1,209
The VA pension benefit comes as a non-taxable payment directly to the veteran or the veteran’s spouse (depending on who is applying for the benefit). These funds can be used in any facility, or to pay for home care. An experienced Elder Law attorney who is accredited by the Department of Veterans Affairs can assist you in determining whether you can qualify for Aid & Attendance.
*A veteran who entered duty after September 7, 1980, must have served at least 24 months or the full period ordered to active duty with at least one day of service during a wartime period.
Helping your loved ones in time of incapacity; Conservatorship and guardianship can be great assets to vulnerable adults and protect them from unscrupulous persons
What is a Conservatorship?
A conservatorship is a legal process in which the probate court appoints someone (the conservator) to manage your property and affairs during your disability. A conservatorship is sometimes called a “Living Probate”.
What is a Guardianship?
A guardianship is a legal process in which the probate court appoints someone (the guardian) to take care of your personal needs. The Guardian will make decisions for you such as where you will live, who can visit you, what medications you will take, and who is allowed to help you.
The Advantages
Conservatorship and guardianship can be great assets to vulnerable adults and protect them from unscrupulous persons. With a conservatorship or guardianship in place, it is clear who has the authority and who does not. You can nominate a potential conservator and guardian in your estate planning documents and the Court will give priority to those persons.
The Disadvantages
All costs associated with your conservatorship or guardianship, such as attorney fees, conservatorship fees, and guardians fees, court costs, and bond premiums are usually paid from your assets. The costs of conservatorships and guardianships are unpredictable and can easily add up, especially if the appointment continues for years.A conservatorship or guardianship lasts the length of your disability. If you are disabled for years, your “living probate” lasts for years.If you have not nominated possible guardians or conservators in your estate planning documents, the Court could appoint someone whom you would never even want to handle your affairs, even a stranger.Conservatorships and Guardianships are public proceedings, and your financial affairs are open to public scrutiny.
If you or someone you know has a need for guardianship or conservatorship, give us a call today.
Let's use this space to answer some of your questions you might have about Medicaid Planning and eligibility. When in doubt, you can always make an appointment with us.
What is Medicaid?
Medicaid is a health care program for certain individuals and families with low income and resources. Medicaid is a means-tested program that is jointly funded by the state and federal governments and is managed by each individual state. In order to qualify for long-term care benefits through the Medicaid program, you must be a U.S. citizen or legal permanent resident, meet certain income and resource requirements, and be 65 or older, disabled, or blind. Poverty alone does not necessarily qualify someone for Medicaid.
Medicare paid for Dad’s hospital after his stroke. Won’t Medicare pay for a nursing home, too?
No. Medicare will only pay for up to 100 days of rehabilitation. After that, Medicaid may pay for long-term care if your dad qualifies. Medicaid rules are complicated and change over time.
Mom can’t take care of Dad at home anymore. To qualify for Medicaid, will they have to sell their house and spend down all their investments?
Your parents' residence is exempt, so they can keep the house. Depending on the value of their investments, your parents may have to “spend down” some assets. They can spend down “dumb” or they can spend down “smart.” With help from an experienced elder lawyer, they can spend down “smart” or even avoid a spend down entirely.
Will Medicaid take my parents’ house or put a lien on it?
No. Medicaid does not put a lien on the house. However, Medicaid may make a claim against your Dad’s estate for payback after he passes away. An experienced elder lawyer may help your parents with legal ways to avoid a claim entirely or at least delay the claim until after your Mom passes away.
Is it legal for Mom and Dad to retitle or transfer their property to me so they will qualify for Medicaid?
Actually, it is perfectly legal, but it must be done very carefully because Medicaid recipients will face a “period of ineligibility” based on the timing and the amount of the gift. There is a 5-year “look back” that applies in ways you may not expect. Don’t try this at home.
Mom and Dad had their wills done years ago. Is there anything else they should do to plan ahead for long-term care?
Yes. Here is their homework assignment:
1. Get a durable power of attorney from an experienced elder lawyer while Mom and Dad still understand what they are doing. For transactions to obtain Medicaid eligibility down the road, special provisions are required. A cheap power of attorney from the stationery store may be “legal,” but it may not work.
2. Get an advance directive for end-of-life health care decisions.
3. Consider long-term care insurance.
4. Plan ahead with an experienced elder lawyer to preserve their assets for their care.
If you or a loved one is in need of long-term care benefits through Medicaid, call us today.
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If you or a loved one has been diagnosed with Alzheimer's disease, it is important to start planning immediately.
There are several essential documents to help you once you become incapacitated, but if you don't already have them in place, you need to act quickly after a diagnosis.
Having dementia does not mean an individual is not mentally competent to make planning decisions.
The person signing documents must have "testamentary capacity," which means he or she must understand the implications of what is being signed. Simply having a form of mental illness or disease does not mean that you automatically lack the required mental capacity. As long as you have periods of lucidity, you may still be competent to sign planning documents.
The following are some essential documents for someone diagnosed with dementia:
– Power of Attorney. A power of attorney is the most important estate planning document for someone who has been diagnosed with Alzheimer's disease or some other form of dementia. A power of attorney allows you to appoint someone to make decisions on your behalf once you become incapacitated. Without a power of attorney, your family would be unable to pay your bills or manage your household without going to court and getting a guardianship, which can be a time-consuming and expensive process.
– Advance Directive. An advance directive may contain directions to refuse or remove life support in the event you are in a coma or a vegetative state or it may provide instructions to use all efforts to keep you alive, no matter what the circumstances.
– Long-Term Care Planning. If public benefits will be needed (for example Veteran’s Aid and Attendance or Medicaid) early planning is essential. Typically, you should be thinking about 36 months advance planning for VA pension and 60 months for Medicaid.
– Will and Other Estate Planning Documents. In addition to making sure you have people to act for you and your wishes are clear, you should make sure your estate plan is up to date, or if you don't have an estate plan, you should draw one up. Your estate plan directs who will receive your property when you die. Once you are deemed incapacitated, you will no longer be able to create an estate plan. An estate plan usually consists of a will, and often a trust as well. Your will is your legally binding statement on who will receive your property when you die, while a trust is a mechanism for passing on your property outside of probate.
Developing a plan now for what type of care you would like and how to pay for it will help your family later on.
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