Transfers of Assets Effect Medicaid

Medicaid eligibility is based on an individual’s resources. This means that in order to be eligible, an applicant is required to have less income and access to assets in order to receive benefits. The income requirements differ depending on the type of Medicaid benefit..

If a Medicaid applicant is married and his or her spouse resides in the primary residence, then the home is an exempt resource.    The spouse is entitled to keep resources of $120,900.   The applicant must have less than $2,000.   Any additional resources above these limits must go toward the cost of his or her nursing home care.  If the applicant has a spouse, he or she may retain a portion of the other spouse’s income under certain circumstances.

Medicaid has a five-year look-back period. In terms of the five-year look back period, all financial information must be disclosed for the five-years prior to entering the nursing home. If any assets were transferred out of the applicant’s name during that five-year period, there will be a penalty unless the transfers are deemed to be exempt. Exempt transfers are those to a spouse, those to a disabled child, or those made to a caretaker child.

Spousal refusal is a Medicaid planning option where a community spouse, that is the spouse living at home, cannot afford to live on the allowances that Medicaid provides. The process begins by shifting assets into the community spouse’s name and a document is prepared by an attorney indicating that the community spouse refuses to contribute income and assets to the care of the institutionalized spouse, because he or she needs it for their own upkeep.

A caretaker child is a person who lives with his or her parent for two years prior to the applicant entering the nursing home and the child provided care to the parent during that time and resided with them for one year prior to entering the facility.

A transfer that is not deemed to be exempt will create a period of ineligibility for Medicaid benefits. It is important to consult an experienced elder law attorney who will assist you in establishing an estate plan that will serve your needs, as well as to plan ahead in order to alleviate the financial burden of nursing home care.

The experienced elder law and estate planning attorneys at the Law Offices of Hunziker, Jones, & Sweeney help seniors and their families handle all aspects of New Jersey Medicaid planning. Our New Jersey Medicaid planning lawyers can answer your questions about planning for Medicaid, and assist you along the way. For more information or to schedule a consultation, contact our New Jersey Medicaid planning lawyers at (973) 256-0456.

College Students Executing A Health Care Proxy And Power Of Attorney

For many teens across the country, college has finally begun! Many students are beginning their freshman year of college at 18 years old.  This means that they are considered an adult. Due to this, parents or guardians no longer have the right to access their child’s medical information even though they are likely paying tuition and have the adult child on their health insurance. Many estate-planning attorneys are advising parents and guardians to obtain a health care proxy with a HIPPA waiver, as well as a Power of Attorney.

When executing the health care proxy, be sure that it is compliant with HIPPA and be sure that a child names the parent or guardian as the agent. By being named as the child’s agent, he or she will be able to make medical decisions on their behalf in the event he or she becomes incapacitated. In addition, an agent has the capability to talk to health services at the child’s school or access basic healthcare information. In addition, executing a Power of Attorney and being named as the agent, will allow a parent or guardian to make financial decisions for their child or speak with the Financial Aid office at the school.

A health care proxy and a Power of Attorney allow a parent or guardian to assist a child with his or her day-to-day tasks. More importantly, these documents are crucial in the event of a medical emergency. Especially if the child becomes incapacitated, a parent or guardian may act on his or her behalf. Without having the proper documentation in place, a Judge in a Court of Law would have to appoint a parent or guardian as “Guardian” for the child. That is a timely and expensive process that can be avoided by executing these documents.

The experienced New Jersey estate planning attorneys at the Law Offices of Hunziker, Jones, & Sweeney help families handle all aspects of estate planning. Our New Jersey estate planning lawyers are trusted by their clients to handle each legal matter with diligence and compassion. For more information, contact our New Jersey estate planning law firm at (973) 256-0456.

Utilizing An In Terrorem Provision In A Last Will And Testament

An in terrorem is a Latin word meaning “in fear”.  It refers to a provision within a Decedent’s Will to disinherit a beneficiary if he or she challenges the Will in any way.  Instead of a beneficiary receiving what he or she may have been entitled to within the Will, the individual will receive nothing, due to challenging the Will.  He or she will essentially have forfeited any inheritance they were entitled to.  This provision is intended to dissuade a person from contesting a Decedent’s Will.  Further, an in terrorem provision is strictly construed by the courts.

The law poses some limits on an in terrorem provision to prevent undue influence or fraud.  For instance, a beneficiary may inquire about the drafting of the decedent’s Will without forfeiting his or her inheritance.  This is known as a safe harbor provision. Safe harbor provisions provide an individual a way in which to evaluate the risk of contesting the Decedent’s Will.

If a beneficiary challenges the Will, an in terrorem clause may be overcome if the decedent’s Will is discovered to be invalid due to undue influence, improper execution, or lack of capacity.

It is important to remember that while an in terrorem provision may dissuade beneficiaries from contesting a decedent’s Will, it does not preclude them from doing so. In essence, a beneficiary who is left very little or perhaps nothing may be inclined to challenge the Will because doing so poses very little risk.  On the other hand, a person who is left a substantial amount may be less likely to challenge the Will.

While an in terrorem provision will minimize the risk of a beneficiary challenging the validity of a decedent’s Will, it does not eliminate the possibility.  It is important to speak with an experienced estate-planning attorney to ensure that you or your loved ones needs are met. The experienced attorneys at the Law Offices of Hunziker, Jones, & Sweeney help seniors and their families handle all aspects of estate planning, including the establishment of a Last Will and Testament. Our New Jersey estate planning lawyers are trusted by their clients to handle each legal matter with diligence and compassion. For more information, contact our New Jersey estate planning law firm at (973) 256-0456.

Having Assets in Multiple States

Today, it is common for retirees to have residences in multiple states.  Some choose to keep his or her family home and acquire a small home in Florida to visit during the cold months.  When a person who owns residences or financial accounts in two different states passes, an ancillary probate proceeding must be commenced where the other real property is located.  An ancillary proceeding is an administrative proceeding that is required in addition to the original probate process of a Last Will & Testament. Usually, this administrative proceeding is required because a person owns real property outside of his or her home state.

For instance, if an individual has a primary residence in New York and a second home in Florida, the laws of Florida would govern the ancillary proceeding.  Therefore, upon an individual’s death, his or her Last Will & Testament would be probated in their home state and an ancillary probate proceeding would be commenced in the state where the other real property is located.  In addition to real property, an ancillary proceeding may be required if a person had other assets such as boats or cars that were registered outside of his or her home state. As stated above, the law of the state in which these assets are located will govern.

A common drawback of an ancillary proceeding is that it imposes additional costs.  This may include attorney fees, court fees or other administrative costs.  It is important to note that if an individual dies intestate, those who inherit property or other assets may be different within each state or inherit different portions.  Intestate refers to an individual who dies without a Will. The reason that different individuals may inherit different properties in different states is because the laws of intestacy vary amongst the fifty states.

If an individual has assets in multiple states, it is beneficial to create a revocable trust in order to avoid an ancillary probate proceeding.  With a revocable trust, the assets can be titled in the same name as the trust. Therefore, upon an individual’s death, his or her estate would not incur additional expenses due to an ancillary probate proceeding.  In addition, the assets within the trust would be properly distributed to his or her beneficiaries within a timely manner.

The experienced New Jersey estate planning attorneys at the Law Offices of Hunziker, Jones, & Sweeney help seniors and their families handle all aspects of estate planning. Our New Jersey estate planning lawyers are trusted by their clients to handle each legal matter with diligence and compassion. For more information, contact our New Jersey estate planning law firm at (973) 256-0456.

Difference Between A Gross Taxable Estate And Probate Estate

A gross taxable estate includes assets that maintain an interest upon an individual’s death, regardless of whether the assets pass by way of a last will and testament. A gross taxable estate includes gifts made during an individual’s lifetime that exceed $14,000 per person per year. Also, a gross taxable estate includes property transferred during a person’s life that he or she retains an interest in. This means that, if the property is transferred to another individual but one retained a life estate in the property, then it is part of the gross taxable estate. Also, the interest that is payable upon someone’s death, such as a property or life insurance policy, may be deemed as part of the gross taxable estate.

What Property is Considered Part of Gross Taxable Estate

Ordinarily, joint or sole ownership of a property will be considered part of the gross taxable estate. Here is what may be included as part of someone’s gross taxable estate:

  • Real property;
  • Personal property;
  • Bank accounts;
  • Brokerage accounts;
  • Businesses;
  • Life insurance;
  • Annuity;
  • Pension;
  • 401(k);
  • 403(b);
  • IRA’s;
  • Monies from a personal injury claim;

The probate process refers to the process before a Surrogate’s Court judge, where a Will is admitted to probate, an executor is determined, and assets are distributed to beneficiaries. The administration process of an estate also includes determining assets, paying taxes and other expenses, such as attorney fees and administrative costs.

A probate estate includes those assets that pass to a beneficiary through a Last Will and Testament. In addition, assets owned solely are part of a probate estate. Assets with a right of survivorship or that have a named beneficiary are not included in a probate estate. Furthermore, revocable and irrevocable trusts do not usually have to be probated. It is important to note that assets in a trust either held jointly or that have a designated beneficiary are not subject to probate. This means that the asset will pass to the beneficiary immediately without having to be subject to the probate process.

The experienced New Jersey estate planning attorneys at the Law Offices of Hunziker, Jones, & Sweeney help seniors and their families handle all aspects of estate planning. Our New Jersey estate planning lawyers are trusted by their clients to handle each legal matter with diligence and compassion. For more information, contact our New Jersey estate planning law firm at (973) 256-0456.

It Is Best To Have An Attorney Execute A Health Care Proxy

A health care proxy is a signed document that gives an agent or agents the power to make medical decisions for someone in the event that he or she becomes incapacitated. Oftentimes, many people ask whether or not an attorney is required to sign a health care proxy for it to be valid. The answer to that question is no. An attorney is not required to sign a health care proxy. In order for a health care proxy to be valid, two adult witnesses must sign it. It is worth noting that a named health care agent cannot be a witness. In addition, it is important to name alternate agents in the event that the first agent is unable, unavailable, or unwilling to act.

An agent will begin to act on behalf of a loved one once he or she is deemed incapacitated by a licensed physician. Until then, an individual may make his or her own medical decisions. Use careful consideration when selecting an agent as well as a successor agent because he or she will be making decisions on your behalf, while you are in a vulnerable state. An agent is able to make decisions on medical treatment and procedures, among others. In addition, he or she will determine whether or not life-sustaining treatments shall be provided or removed. In regard to life-sustaining treatments, a health care proxy should indicate that an agent knows and will carry out your wishes. Given this broad power, it emphasizes the importance of selecting someone you trust will carry out your wishes. Furthermore, make sure you discuss your wishes with a potential agent and how you envision your future.

It is also important to document your wishes for the future in writing. For instance, if you wish to donate organs it should be in a signed writing. Additionally, you may choose to execute a living will along with the health care proxy. This will provide instructions to your agent and licensed physicians on your limitations or wishes for your health. Individuals may wish to limit his or her agent’s ability to make certain decisions. Also, individuals may address the use of certain medical treatments such as the use of blood transfusions, antibiotics, surgeries, feeding tubes, or cardiac resuscitation, among others.

Even though you do not need an attorney to execute a health care proxy, it is within a loved one’s best interest to complete a health care proxy and living will along with his or her estate plan. Selecting an agent for a health care proxy may be an extremely stressful decision. Additionally, it is important to make sure that both parties are comfortable with the decision before executing any agreements, which is why it is important to speak with an experienced and knowledgeable attorney who has the ability to provide insight.

The experienced attorneys at the Law Offices of Hunziker, Jones, & Sweeney help seniors and their families handle all aspects of estate planning, including the establishment of a health care proxy and living will. Our New Jersey estate planning lawyers are trusted by their clients to handle each legal matter with diligence and compassion. For more information, contact our New Jersey estate planning law firm at (973) 256-0456.

The Importance of Updating Retirement Account Beneficiary Designations

Many estate-planning mistakes involve retirement accounts. If you or a loved one has rolled over an employer sponsored 401(k) plan into an existing IRA, it is imperative that you update the beneficiary designation form that is on file. The failure to do so may result in an unintended beneficiary. Many individuals unintentionally fail to update the intended beneficiary on file in accordance with life situations such as divorce, death, or birth of a family member or another loved one.

IRA accounts may have multiple beneficiaries such as a trust, charity, family member or friend. When selecting a beneficiary for an IRA account, you should have a primary beneficiary as well as an alternate beneficiary. In addition, if you or a loved one is naming a trust as the beneficiary of a retirement account, the trust must be appropriately drafted and meet certain IRS requirements in order to accept qualifying monthly distributions.

Other common mistakes when it comes to retirement accounts is naming a minor or an estate as a beneficiary of an IRA. A trust should be named for the minor’s benefit as a beneficiary, as opposed to explicitly naming her or him as the direct beneficiary of the IRA. Also, naming an estate as the beneficiary will eliminate certain tax benefits to these accounts. Upon the death of the owner of an IRA account, all funds in a Roth IRA must be removed within five years. The same rule applies to a traditional IRA unless the original holder of the IRA was 70½. In that case, the monthly qualifying distribution rate would be based on the age of the deceased.

Ultimately, when completing the beneficiary designation form, it is important to keep your estate planning goals in mind. It is important to discuss your goals with a New Jersey estate planning attorney who can guide you through the process. If you have completed the beneficiary designation form, it is important to have an experienced estate planning attorney review the form to ensure that the retirement accounts are in accordance with the rest of the estate plan, because a custodian’s standard beneficiary form may not cover all the bases.

The experienced New Jersey estate planning attorneys at the Law Offices of Hunziker, Jones, & Sweeney help seniors and their families handle all aspects of estate planning, including the designation of beneficiaries on retirement accounts. Our New Jersey estate planning lawyers are trusted by their clients to handle each legal matter with diligence and compassion. For more information, contact our New Jersey estate planning law firm at (973) 256-0456.

How Do Criminal Convictions Affect Child Custody in New Jersey?

When couples who have a child or children divorce, one of the most important decisions that will be made is which party will get custody. In New Jersey, there are several types of child custody, including temporary, sole, joint, and split. When a child custody dispute is brought before a New Jersey family court, a judge will look into a number of factors to determine what is in the best interest of the child or children. Some of the factors to be considered are the physical safety of the child or children and fitness of each parent. Due to the fact that character and propensities are relevant to determining these factors, a judge may find a parent’s criminal history to be a significant factor in child custody proceedings.

How much a criminal conviction can impact child custody depends on a number of factors, including the nature of the offense, victim of the offense, how long it’s been since the offense occurred, the frequency of crimes committed, and the nature of the sentence. A court may give more weight to crimes that are violent or drug-related offenses. Offenses involving domestic violence, assault, battery, and stalking may be a significant factor in determining child custody, as the court system may worry about the parent’s anger management and tendency to commit violent acts. A judge may order a parent to take a follicle drug test if he or she has a prior drug-related conviction. A follicle drug test may reveal a person’s drug use within the past several months. If a parent tests positive for a drug test, the court will likely order that any visitation must be supervised.

Another factor that a court will take into consideration is the victim of the offense. A parent’s conviction that involves the emotional or physical injury of their child or children may result in the limitation of their child custody and visitation rights. The court may be concerned that if a parent had injured their child in the past, he or she could hurt the child again. If the conviction involves sexual assault or life-threatening injuries, the court has the potential to terminate a parent’s child custody and visitation rights completely.

A family court will take the age of the conviction into consideration when determining child custody. For example, if a parent has a drug possession conviction, introduces evidence that the offense was an isolated incident, the negative impact of the crime may be lessened. However, if the crimes committed were recent and demonstrate reckless or dangerous behavior or poor judgment, the court will be more inclined to weigh the offense heavily in a child custody proceeding.

The final factors a family court will take into consideration when determining child custody is the frequency of crimes committed and the nature of the sentence. A parent’s multiple convictions and lengthy sentences, regardless if the crimes are violent or not, may significantly impact child custody determinations. A family court may be concerned that if a parent has frequent convictions, he or she is unable to follow orders from a court of law. If a parent has faced lengthy sentences, the court may be concerned about a child’s stability as they don’t want the minor bouncing from relative to relative while a parent serves his or her sentence. If the other spouse is able to demonstrate that he or she is able to provide a stable living environment for the child or children, that parent may be more likely to be granted full custody.

If you are a New Jersey resident going through a divorce and you have children, it is imperative that you seek the guidance of a lawyer who is experienced in divorce proceedings and family law matters. Our New Jersey divorce and child custody lawyers can help you reach the best possible resolution regarding your child custody matters. For more information or to schedule a consultation, contact our New Jersey divorce and child custody law office at (973) 256-0456.

Evaluation Time: Have An Advocate Present

A home evaluation is conducted by a Managed Long Term Care Company (MLTCC) after an individual has been approved for Community Medicaid by the Department of Social Services. The evaluation process can be complex and may result in difficulty due to the MLTCC failing to award a Medicaid recipient with sufficient hours. An evaluation by a MLTCC is extremely important, because it is the determining factor for which benefits a recipient is entitled to through the Medicaid program.

A nurse is sent to the recipient’s home to evaluate his or her needs and establish a long-term care plan. The long-term care plan will include the number of hours awarded to the recipient for a home health aide to assist the Medicaid recipient with daily tasks. The amount of hours awarded can range from a few hours per day to a live in home health care aide. Once an individual is satisfied with the long-term care plan, he or she may enroll with the MLTCC. If an individual is not satisfied with the long-term care plan, he or she may request an evaluation with a different MLTCC.

During the evaluation, a series of points are generated based upon the answers provided to questions that are asked by the evaluating nurse. The nurse may ask questions such as “does the recipient use the toilet alone or take a bath alone.” The points awarded determine the number of hours of care that an individual will receive through the Medicaid program.

An attorney may assist with a home evaluation component to help maximize the care component. A sufficient long-term care plan ensures that an aging person is safe while he or she remains in their home. An attorney or another advocate is entitled to attend the evaluation by the MLTCC. A local expert can assist in stressing the importance of maximizing the hours for an aging individual to the evaluating nurse.

Having an advocate attend the evaluation and communicate with the MLTC to maximize hours can be an invaluable component of the Community Medicaid process. If you are a family member or loved one and are having trouble receiving an appropriate or adequate long-term care plan, contact an elder law attorney who can assist you in receiving the care you need.

The New Jersey Medicaid planning attorneys at Hunziker, Jones and Sweeney, P.A. can answer your questions about planning for Medicaid, and assist you along the way. For more information or to schedule a consultation, call our New Jersey Medicaid planning law firm at (973) 256-0456 or fill out our contact form.

Funding An Irrevocable Trust Sooner Than Later

An asset is owned by a trust once it is transferred into the trust that was created. This is known as funding the trust. The transfer of assets into a trust can occur in a number of ways depending on the type of asset. For Medicaid purposes the five-year look back period begins one month after an asset is placed in the trust. This means that if a property deed is transferred into the trust in December, the five-year look back period begins in January and ends five years from that date. Every time a new asset is placed in the trust a new five-year look back period will begin for that specific asset, not for all the assets in the trust.

Below are some types of assets that may be placed into an irrevocable trust in order to fund the trust:

  • Money from a savings account may be placed into a trust. However, the trustee must then “open” the trust account. When the trust account is “open” a trustee is able to remove money from the savings account and put it into a Trust account.
  • Life Insurance policies may be placed into a trust. When a policy of this nature is placed into a trust an individual is essentially requesting a change of ownership and beneficiary. The trust will now be named as the policy owner and beneficiary.
  • Real property may also be placed in a trust. The transfer of real property or a deed into a trust shall be prepared and executed by an experienced attorney. This will essentially transfer a property deed from an individuals name into the name of the trust.
  • Brokerage accounts can be placed in a trust. However, like money from a savings account, a trustee must open a brokerage account in the name of the trust. Once the account is opened in the name of the trust, the funds may be transferred from the original brokerage account into the new brokerage account of the trust.
  • Automobiles are often transferred to a trust. However, the Department of Motor vehicle (DMV) must be contracted in order to change the Title to the name of the trust.

It is imperative that a trust be funded in a timely and correct manner in order to overcome the five-year look back period. This will ensure that an individual remains eligible for Medicaid benefits. It is worth noting that retirement funds such as 401K’s, IRA’s, and 403B’s are not usually placed in a trust due to unfavorable tax penalties.

It is important to consult a trusted advisor when funding a trust in order to ensure Medicaid eligibility for the future. An experienced Medicaid planning attorney can assist you in planning ahead for Medicaid and advise you how best to protect and distribute your assets. The attorneys at Hunziker, Jones, and Sweeney P.A. can explain the intricate Medicaid eligibility rules to you, help you decide if the program is right for you, and assist you with formulating a plan to divest yourself of assets. For more information or to schedule a consultation, call our New Jersey Medicaid planning law firm at (973) 256-0456 or fill out our contact form.

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