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            Last week I was telling you about the problem 529 plans pose for Medicaid.  Maria called me to handle her dad, George’s Medicaid application.  George had set up 529 plans for Maria’s daughters.  Are those accounts countable assets subject to Medicaid’s spend down rules?             Last week I explained that the contributions and growth in these accounts are considered removed from George’s estate.  That does not, however, answer the question for Medicaid.  We have to look a bit deeper.  While the value of a 529 plan is removed from the contributor’s estate for estate and gift tax purposes, the owner and custodian of the account still has the ability to revoke it and pull the assets back and therein lies the problem for Medicaid.             If George is the owner and custodian then he has not made a transfer of assets out of his name for Medicaid purposes.  The money in those 529 plans is countable and must be spent down.  That means the money must be spent for George’s needs and not his granddaughters’ education.             On the other hand, if George set up the accounts but named someone else – Maria for example – as the owner and custodian then

            Maria asked me to handle the Medicaid application that needed to be filed on behalf of her father, George.  We went over the assets he has left to spend down.  That’s when Maria told me that George had set up 529 plans for his granddaughters.  “Do we have to spend the money in these accounts on Dad’s care before qualifying for Medicaid”, she asked.             529 plans are college savings plans named after the section of the federal law that established them.  These plans allow a parent, grandparent - or really anyone - to transfer money into an investment account which is established for the benefit of a child, to be used for that child’s college expenses.             There are gift and estate tax advantages to these plans.  I may make contributions of up to $14,000 per person per year to a 529 plan.  The gift and tax laws will even allow me to accelerate my contributions so that I can contribute as much as $70,000 in one year for each beneficiary.  This contribution will then be considered as having been made over a 5 year period so that no gift tax will be triggered.             The advantage is that these contributions

     Human life expectancy in the past 100 years has been substantially lengthened as a result of advances in medical science.  However, as we know the quality of an extended life span isn’t always great.  Many people live with serious illnesses such as COPD, heart disease, cancer, Parkinson’s Disease etc. for many years, often spending those years suffering extreme physical and emotional pain.      While the medical community continues to focus on finding cures for these illnesses and conditions, an important part of administering medical care is easing a patient’s pain.  This is what is known as palliative care and only recently – within the last 10 years or so – has palliative care become a new discipline of medicine.      What is palliative care?  It is specialized medical care for people with serious illnesses.  It focuses on providing patients with relief from the symptoms and stress of a serious illness.  The goal of palliative care is to improve the quality of life for both the patient and the patient’s family.      Palliative care is provided by a specially trained team of doctors, nurses and other specialists such as social workers and chaplains, who work together with a patient’s other doctors to provide

            Last week I was telling you about Monica’s dilemma.  She thought the home she and her husband, Paul bought together with her mom had been retitled to them 15 years ago with Mom retaining a legal right to live there for her life time.  But, that’s not what happened.  The deed instead lists Mom as a co-owner of a 50% interest.             Monica insists that wasn’t what was intended.  Now they are concerned that if Mom needs long term care she doesn’t have enough money to cover it and will need Medicaid.  Can the home still be protected even though it appears that Mom still owns a half interest?  Her contention is that the attorney made a mistake.  Can she simply “fix” the mistake with a corrective deed?              I told her that without any objective evidence that the attorney made a mistake Medicaid won’t accept her explanation at face value.  If, for example, she can get the attorney’s file from 15 years ago and it indicates that Mom wanted to transfer her interest and only keep a right to live there then she might have an argument.  There must be some objective evidence to support her verbal assertion.              Without proof, a deed

           I received a call the other day concerning the following dilemma.  Monica and her husband, Paul had bought a home together with Monica’s mom 30 years ago.  The home was held as tenants in common, meaning if, for example, Mom died her share would pass by way of her will and not automatically to Monica and Paul.             Approximately 15 years ago, the family went to an attorney to change the ownership.  What they wanted was to transfer Mom’s interest to Monica and Paul, with Mom keeping a legal right to live in the home as long as she lives.             Fast forward to today.  Mom is in failing health but still living at home.  The family would like to keep Mom at home for the rest of her life with care if needed but they also recognize that Mom could run out of money and need to apply for Medicaid.  That’s when they pulled out the deed.  It didn’t appear to reflect the change they thought they made 15 years ago.             They were right.  The deed change did not transfer title the way they remembered.  Instead, the deed reflected a change from Paul and Monica, his wife and Mom, tenants

      Do a search online and you can quickly find advertisements for websites and software that will help you prepare your own will and other legal documents.  Some choose this option to save the legal fees.  But is this being “penny wise but pound foolish”?             Estate planning is as much for your loved ones as it is for yourself.  After all, it is your loved ones who will have to deal with the consequences of your decisions and clean up any “mess” that you have left behind.             One do-it-yourself website begins with a questionnaire that, once you complete it, is reviewed by a non-lawyer “specialist” who cannot give legal advice.  As a U.S. News and World Report article (December 23, 2007) noted, wills and estate administration are governed by state law and every state has its differences.  If you use a national website or software, it still must be tailored to your particular state.  You are putting a lot of trust and faith in the company you are using that they are compliant with the laws in your state.  If that company is mistaken your loved ones will suffer the consequences.             We’ve seen plenty of do-it-yourself wills that are problematic.