Is a Damaged Will an Invalid Will? Part 1
We received a recent call in our office. The caller’s father had passed away leaving a will that had been given by father to son to hold in his possession after Dad had signed it several years earlier. Son retrieved the will after Dad’s passing in order to submit it the Surrogate for the purpose of having the Surrogate deem it to be the “official” last will and appointing Son as the Executor. It was then that he discovered the will had been damaged. Son had stored the will in a drawer. When he retrieved it, he discovered that the drawer contained water. It appeared that someone had spilled water and that it had been there for some time because pages of the will had become illegible. When he attempted to separate the pages some of them simply disintegrated. As a result portions of the original will were no longer readable or no longer existed. Son had called the Surrogate’s office and received conflicting instructions on what to do. At one point he was told he would need to file an application asking a judge to admit a copy of the will. At another point he was told that because the will was destroyed, he would need to proceed as if
Another Reason People Fail to Plan – Part 2
In my previous blog post here I gave you another reason why people fail to plan for a potential crisis . Sometimes personal background or culture plays a role. We received a recent call from a daughter concerning her dad who had been traveling abroad when he had a stroke. The family was able to fly him back to New Jersey to a long term care facility. Dad has no power of attorney or health care directive giving anyone the ability to make medical or financial decisions on his behalf. The family asked about obtaining guardianship over Dad. When I asked more detailed questions about his cognitive awareness, however, they explained that he was able to communicate verbally. It appeared to me that he had a level of capacity and understanding about his situation such that a guardianship application would unlikely to be successful. I told him I thought this was a good thing since a guardianship application is more time consuming and expensive than preparing a power of attorney and health care directive, which it appeared that Dad could execute. I was puzzled, however, about their less than enthusiastic response until they told me that Dad has repeatedly refused to sign these documents because “it’s not how things are
Another Reason People Fail to Plan
In this blog over the years I have written often about how the lack of planning makes things more complicated and the outcomes worse when a crisis hits than when there is a plan in place. In many instances lack of planning stems from the lack of urgency and the belief that “I’ll take care of it when the time comes and I need to”. In some cases, culture plays a role. Our country has always been a melting pot of people from all around the world. Consequently, we have seen clients from all manner of backgrounds and cultures. Sometimes, especially in the case of first generation Americans, their beliefs provide an explanation for why they have no estate or long term care plan in place. When asked, a typical response is “we don’t do it that way where I come from”. That may, in fact, be true - that things are done differently in a client’s country of origin. But I then explain that the laws of this country and the systems in place here are what we have to work with. Failure to take that into account can result in terrible outcomes. Next week I’ll give you some examples.
A Six Figure Medicaid Mistake (Part 5)
In my blog post this week I continue with the story of the family that tried to get Medicaid for Dad but failed. In the past several weeks I have explained that while Dad’s assets need to be under a $2000 to achieve eligibility, Mom also has an asset limit, which includes accounts and assets that many people would not even consider to be assets but which count under Medicaid rules. In Mom’s case she had a number of life insurance policies insuring not only herself and her husband but also children and grandchildren. While the death benefit - the amount paid out when the insured dies - is not countable, some policies have cash value. That cash value is countable if Mom or Dad is the owner of the policy. Once we obtained the policy documents we were able to determine that some of the policies were what are called “term” policies. They have no cash value but only pay a death benefit so no problem there. Others, however, did have cash value and Mom was the owner of some of those policies so the cash value counted as part of her limit - what Medicaid calls the community spouse resource allowance (CSRA). Mom also had a
A Six Figure Medicaid Mistake (Part 4)
In this week’s blog post, I continue to tell you about a call I received from a family who tried and failed to get Medicaid for Dad. As I explained last week, the nursing facility employee misunderstood how Medicaid works in the case of a married couple where only one spouse is applying for Medicaid. The healthy spouse - in Medicaid language known as the “community spouse” - must spend down under a certain asset limit which is calculated using a snapshot date. Last week I explained the formula. In our case, Dad had entered the hospital and then the nursing facility 16 months ago so we had to go back to the value of assets at that time. But, what counts as an asset is more than what one might assume. Bank accounts, investment accounts, stocks, bonds, mutual funds, CDs and annuities are obvious assets. There are, however, less obvious assets such as life insurance with cash value and accounts opened for other family members such as children and grandchildren. For example, if the Medicaid applicant or spouse opened an account for a grandchild but it is actually co-owned with that other person, then the account will be considered an asset of the applicant or spouse unless
A Six Figure Medicaid Mistake (Part 3)
In this week’s post I continue with the story about a recent call we received in our office from a family concerning a Medicaid denial. The nursing home employee processing Dad’s Medicaid application misunderstood the rules with respect to married couples. As I explained last week, Mom was told she did not need to provide statements for assets in her name, just ones for assets owned by her husband, the Medicaid applicant. This was incorrect. But, what was also missed by the facility’s employee was the fact that the non-Medicaid spouse has an asset limit to meet in addition to the $2000 limit for the Medicaid spouse. That limit is 1/2 of the combined assets owned by either or both spouses but only up to a limit of $157,920. (There is a common misconception that this is actually the amount the spouse can automatically keep but it’s just the maximum amount. You still have to do the math which can result in a lower number.) So we needed to do 2 things - determine what that number is and then spend down below that number. Every month this doesn’t happen means that Mom must spend another $12,000 towards Dad’s care because he is not yet Medicaid eligible. But what