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In my post last week, I wrote about 2 recent calls from former clients of ours that highlight the importance of a power of attorney. Our power of attorney is very detailed and designed to cover as many different situations as possible - even though as I always say that as to any one person much of what is in our document doesn’t apply but it can’t hurt to put more into the document than less. In the first instance, the client was in a personal relationship which family members found suspect. Her two sons were concerned for their mother’s safety and discovered spending that was not the norm for Mom. When she was hospitalized they contacted the police for the purpose of asking assistance in removing the person from their mom’s home. The power of attorney which I had prepared several years earlier became an important document. I told the sons who were co-agents under her power of attorney that they would need to satisfy the police and any other third party that they had the right to make decisions regarding the home. I pointed them to the specific language giving them the right to manage real property and specifically to evict tenants and restrict access and possession to the property. With police assistance they were able to remove

Two recent calls to our office highlight once again the importance of the power of attorney - a deceptively simple document that can be obtained off the internet but which, if it is to be at all useful, must be carefully tailored and specific to the anticipated tasks that the agent may be called upon to carry out on behalf of the principal. In each case the call came from a family member of a former client who is in trouble. These are clients who at the time we first met were in their late 50’s to early 60’s. We prepared estate planning documents for them. We did not engage in long term care planning, however, we always consider the possibility of needing it down the road. In each of these cases that has now or will in the not too distant future become necessary. Seniors are particularly vulnerable to fraud. Over the years we have had many calls from family members who discovered that a loved one was subject to a financial scam or in a relationship with someone who is taking financial advantage of them. That was the situation in both recent calls. Luckily, family members recognized quickly what was going on. Some money has been lost but it is small in comparison to the overall financial picture. In

In my post last week, I started to tell you about how tricky it can be when applying for Medicaid benefits while currently receiving VA Aid and Attendance benefits, a non service connected pension available to certain wartime veterans and their widowed spouses. While it is not taxable income for tax purposes, it is also not countable income when determining the need to use a qualified income trust for cases where an applicant’s income exceeds Medicaid’s strict income cap of $2349 per month (for 2020).  I recently had just such a case.  Without counting the aid and attendance benefit my client was below the income cap so we did not set up a QIT.  Still the caseworker insisted one was necessary and denied our application. I appealed the decision and after an extended delay due to the shutdown caused by Covid a few weeks ago we had our hearing.  The County cited a state Medicaid Communication it issued in 2012 requiring that applicants provide an in depth award letter from the VA so the State can determine how much if any of the VA pension is countable and how much is exempt and classified as for “aid and attendance”. Following that MedComm, the VA stopped breaking down

We have many clients who first qualify for the VA Aid and Attendance benefit to help pay for their long term care and then when their remaining assets are spent down, they must apply for Medicaid.  As I have written about previously, Medicaid has a strict income cap ($2349 in 2020).  If an applicant’s income exceeds that number, Medicaid eligibility can only be achieved if a qualified income trust (QIT) is used to pass thru some of the income before sending it to either the facility providing care or in the case of a married couple to the healthy spouse. The QIT is also known as a Miller trust and is important to Medicaid eligibility.  Even if you do everything right, if you fail to use the QIT when necessary it will result in a Medicaid denial.  It is clear, however, from several Medicaid Communications, that the VA Aid and Attendance benefit is not counted as income in this calculation.  In other words, if income is above the income cap only by including the Aid and Attendance benefit,a QIT is not necessary. Yet, nearly 6 years after the change in Medicaid programs in New Jersey that resulted in the use of QITs, some Medicaid offices still deny

Funeral Expenses and Medicaid (Part 2) This week’s post details the more common option when it comes to setting aside funds for a funeral before spending down towards Medicaid eligibility.  Last week I explained that $1500 can be set aside for burial as long as it is specifically designated and not commingled with other funds.  This can be dangerous if close attention is not paid to these requirements but the $1500 limit is also less than what most people spend on a funeral. A more appealing option is an irrevocable prepaid burial contract. This is an agreement in which the purchaser pays for a funeral in advance that the seller agrees to provide. The contract must be irrevocable - meaning it can’t be cancelled and the funds returned to the buyer.  Medicaid permits a funeral to be paid in this way and there is no dollar limit, however, the purchaser must make the purchases at the time the contract is entered into.  In other words, you can’t put a lump sum into the contract as part of a Medicaid spend down and decide later how to spend it. Because of the flexibility in spending for a funeral and the requirement to spend down to less than $2000

Whenever I talk to a family whose loved one is close to spending down the required amount of assets to qualify for Medicaid, the topic of burial expenses comes up.  Most people are aware that Medicaid permits setting aside funds to cover the burial but many are a bit fuzzy on the details so this week we’ll go over the basics. Medicaid permits an applicant to set aside up to $1500 for burial expenses for the applicant, the applicant’s spouse and immediate family members as long as the funds are specifically designated for burial and not commingled with other assets.  In that case the funds do not count towards the $2000 asset limit.  Immediate family members would include children of the applicant. The funds can be held in a revocable contract, revocable trust, as cash, or in a financial account, however, they must be clearly designated for burial and not combined with any other assets that are not designated for burial.   Ownership of a burial space or an agreement to purchase a burial space is also an exempt asset and does not count towards the $1500 limit.  This includes a plot, vault, mausoleum or urn.  There is not limit on the cost of the burial space. Most of our