Estate Administration Tales – Part 2
In my blog post last week, I explained that we often get calls from family members of a loved one after they pass away in which the family explains what the decedent (person who died) wanted with respect to the distribution of their estate. Without a written document, however, the law sometimes provides for a very different outcome. Let me explain by giving you examples. Daughter called us because her dad died. He left a surviving spouse and 4 children but not a will. Additionally, his surviving spouse was from a second marriage. 2 of his children he had with his second wife but 2 others he had as a result of his first marriage. Dad left a house, titled solely in his name, but which the surviving spouse still makes her home. He also left several bank accounts. Some were co-owned jointly with his wife and others were held in his name alone with no payable on death designations. The family assumed that everything would pass to the surviving spouse because that’s what Dad had always said should happen. But, again, he did not put his wishes in a written last will and testament. I explained that New Jersey law says otherwise. Under the intestacy laws - which provide for what happens
Estate Administration Tales – Part 1
When we get calls to our office about the passing of a family member, more often than not the decedent (person who died) did not leave any written instructions as to how to distribute their assets and handle their affairs. In other instances the decedent left instructions but not in a clear concise way. When verbal directions have been given or discussions had during the decedent’s lifetime with some but not all the relevant family members, problems often arise. That can be the case even if everyone agrees on what should be done because there are laws meant to make the estate administration process an orderly one. Those laws may conflict with what the family members believe should be done. In other cases there may be persons or entities that have an interest but who are not part of the family conversations. Those interests need to be protected as well. Sometimes the outcome dictated by the law is not the outcome that the family believes should happen or is what they believe the decedent wanted. While these types of scenarios can often be avoided by preparing written instructions by way of a last will executed in accordance with the law’s requirements and other written documents as may be
OBBBA and Medicaid
Last year I wrote in this blog about the One Big Beautiful Bill Act (OBBBA) which Congress passed and the President signed into law last year. OBBBA contains some changes to Medicaid, although they have not yet taken effect. Since the law’s passage, we have received calls from current and prospective clients speculating as to how the changes contained within OBBBA will affect New Jersey Medicaid benefits. My answer has been that no changes have yet occurred and I don’t believe any changes will affect the Medicaid programs that we work to qualify our clients for. New Jersey has now begun to answer these questions with a July 31, 2026 letter sent to all Medicaid recipients. The first item the letter addresses is that no changes to Medicaid have occurred yet and secondly that not everyone will be affected. The letter refers the reader to the state’s webpage for more details which can be found at “FederalMedicaidChanges.nj.gov”. As with much that the government puts out, the page is a bit confusing and doesn’t always contain certainty - although that is in part because the states are still waiting for more guidance from the federal government. Nevertheless, what is clear confirms what I have been telling people. While there will
When Both Spouses Need Care – Part 3
In my past 2 blog posts I was explaining that when both spouses need long term care the common thought is to spend down all the assets for both of them first and then apply for Medicaid for both at the same time. That may not, however, be the best approach because of the way the Medicaid penalty works. Let’s look at a typical example in which Mom and Dad have made gifts over the past 5 years. When they apply for Medicaid they will need to produce financial records detailing all monies transferred into and out of their accounts dating back 5 years from the date they want Medicaid to start. If they have made gifts and other transfers for less than fair value (eg. cash or other transactions that can’t be documented) of $100,000, that would result in a Medicaid penalty of about 8 months. If we apply for Medicaid and are approved for our requested start date, it will be with a penalty - or waiting period - of 8 months. That means Medicaid won’t start paying for another 8 months. Mom and Dad’s care will continue to be billed at the private pay rate, which averages $15,000 per month per person. But, of course,
When Both Spouses Need Care – Part 2
In my blog post last week, I wrote that in cases where both spouses need long term care, spending down the assets and then applying for Medicaid for both of them at the same time may not be the best approach. It may actually be better to apply for the first spouse as quickly as possible and then spend down the remaining assets on the second spouse’s care before then applying for Medicaid for that spouse. This week I will begin to tell you why. As I have written previously about Medicaid, spending down means spending your income and assets such that you receive equal fair market value in product or service for the money that left your accounts. As part of the Medicaid application process, an applicant must produce 5 years of statements for every asset dating back from the first month for which you are seeking Medicaid eligibility. This is what is called the Medicaid look back. If, during that 5 year period, money has left your accounts for which you did not receive equal fair market value back - or you cannot prove that you received fair market value - then that is considered a transfer for less than fair value. Medicaid adds up
When Both Spouses Need Care – Part 1
In some of my past blog posts, I have often presented scenarios in which one spouse needs long term care but the other one does not. When we do long term care planning before any care is needed, we typically recommend placing assets in a trust to help insure they will be available not only for the first spouse to need care but also the second. Without this type of planning, it is possible that providing care for that first spouse could exhaust most or all of their savings, leaving nothing for the second spouse. In cases where clients reach us too late to do this type of preplanning, we are still often able to utilize strategies to maximize what the healthy spouse can keep before applying for Medicaid. In other words, we want to get to Medicaid as quickly as possible to preserve as much as possible for the healthy spouse. This is necessary since we don’t know how long that spouse will live (more often than not the healthy spouse is the wife who is younger than the husband and women live longer than men) or how much care they will need. But, what if both spouses already need long term care? We have had