LEGAL CHECKUP
PROVIDED AS A COURTESY OF:
MARSHALL M. SNYDER
Attorney At Law
6001 Asberry Court
Nashville, TN. 37221
615.673.7636
e-mail: [email protected]
A. FIVE IMPORTANT LEGAL DOCUMENTS
1. Last Will and Testament - provides for a clear transfer of your property when you die - if there are minor children, the Will can contain a testamentary trust for the minor children until they reach a certain age beyond majority such as 25 or 30 years of age - Wills can contain credit “by pass” trusts for spouses if estate taxes might be owed.
2. Durable Power Of Attorney For Financial Affairs - can save you the time and expense of a conservatorship if you ever become mentally or physically unable to make decisions for yourself.
3. Living Will - also known as an advance health care directive - you must have a terminal condition and be mentally or physically unable to make decisions for yourself in order for the Living Will to become effective.
4. Durable Power Of Attorney For Health Care - also known as an advance health care directive - you name someone to make health care decisions for you if you ever become mentally or physically unable to make those decisions for yourself - works in conjunction with the Living Will.
5. Advance Care Plan - this is the newer term for a Living Will and Durable Power Of Attorney For Health Care - the Advance Care Plan incorporates the Living Will and Durable Power Of Attorney For Health Care into one document.
B. TWO OTHER IMPORTANT LEGAL DOCUMENTS FOR SPECIAL SITUATIONS
1. Special Needs Trust - also known as a Supplemental Needs Trust - for disabled children or adults who receive or may be eligible to receive SSI - the Special Needs Trust allows such children or adults to receive property as beneficiaries through the trust and continue receiving SSI - if they were to receive property through a Will or any direct method of transfer they would lose their SSI.
2. Miller Trust - also known as an Income Qualifying Trust - allows someone to qualify for Medicaid (Tenncare) long term nursing home benefits if their monthly income exceeds Tenncare limits - the “look back” period for transfers of property to meet Tenncare asset rules is 5 years.
C. STANDARD METHODS OF TRANSFERRING PROPERTY
1. Warranty Deed or Quit Claim Deed if real property is being transferred – leaving real property by Will allows the beneficiaries of the Will to take a “stepped up” basis in the real property so that federal capital gains tax is reduced, if not entirely, eliminated.
2. Certificate Of Title if automobiles or other motor vehicles or motor homes are being transferred.
3. Bill Of Sale if personal property is being transferred which is not covered under the certificate of title laws.
4. Last Will and Testament (see also above) for the transfer of both real property and personal property at the time of death - probate of the Will is the process whereby the Will is officially recognized by the probate court and the Executor or Executrix receive their Letters Testamentary to serve as personal representative for the estate - if there is no Will, property which is not jointly titled descends under descent and distribution laws.
5. Living Trusts for the transfer of both real property and personal property - Living Trusts, because they are revocable, do not transfer property until the time of death - why have a Living Trust? - avoid probate if you desire to avoid the probate of a Will - probate in Tennessee is very efficient and effective and overseen by a probate judge who can serve as a referee if any problems develop - but Living Trusts can avoid the probate process if you title all of your property in the name of the trust and be sure to have a reliable Trustee to serve after your death.
D. OTHER MATTERS
1. Reverse Mortgages
2. Long Term Care Insurance
3. Tax Freeze On Residence for Seniors Over 65
4. Abolition of the Tennessee Gift Tax and Tennessee Inheritance Tax
-2-
E. V.A. AID AND ATTENDANCE AS ADDITIONAL INCOME
Many people are unaware that the Veteran's Administration (V.A.) has a special program, known as "Aid and Attendance", that pays a monthly benefit to veterans and their surviving spouses if certain criteria is met. Yet less than 20% of those who may qualify ever file an application with the V.A. for this benefit.
The benefit for a veteran and spouse can be $1,800.00 per month, $1,554.00 per month for a single veteran and $978.00 per month for a surviving spouse, all adjusted annually for inflation. Excluding a residence, one car and burial lots which are exempt, the maximum assets which can be owned are $80,000.00. But assets in excess of $80,000.00 can be transferred out of the applicants name without the five year look back period that is part of qualifying for long term nursing home care as a Medicaid recipient.
The monthly costs of a nursing home, assisted living, in home care (which can include payments for in home care to a nondependent child), medical insurance premiums and other health care costs are all deductible against monthly income. So, by way of example, if an applicant has $4,000.00 per month in monthly income and $4,000.00 per month in health care costs, his or her net monthly income is $ 0.00., meaning benefits can be awarded at $1,800.00 per month to a veteran and spouse, $1,554.00 per month to a single veteran and $978.00 per month to a surviving spouse.
The veteran must have served 90 continuous days in the military, one day of which must have been in “wartime”, defined by the Code of Federal Regulations as World War II, Korea, Vietnam and the Gulf War. No wartime injury is required but honorable discharge from service is a criteria.
The medical test for determining eligibility is being unable to attend to the daily activities of life such as feeding, clothing, bathing, grooming and toileting. This requires the medical records of the primary care physician and a statement in letter form by the primary care physician that the applicant is no longer able to attend to the daily activities of life without the assistance of others.
Although the application can take several months for approval, monthly benefits are retroactive back to the month of the filing of the application. V.A. “Aid and Attendance” can be a much needed financial lifeline to families by providing an additional source of income to offset the high costs of health care for an elderly parent.
PROVIDED AS A COURTESY OF:
MARSHALL M. SNYDER
Attorney At Law
6001 Asberry Court
Nashville, TN. 37221
615.673.7636
e-mail: [email protected]
A. FIVE IMPORTANT LEGAL DOCUMENTS
1. Last Will and Testament - provides for a clear transfer of your property when you die - if there are minor children, the Will can contain a testamentary trust for the minor children until they reach a certain age beyond majority such as 25 or 30 years of age - Wills can contain credit “by pass” trusts for spouses if estate taxes might be owed.
2. Durable Power Of Attorney For Financial Affairs - can save you the time and expense of a conservatorship if you ever become mentally or physically unable to make decisions for yourself.
3. Living Will - also known as an advance health care directive - you must have a terminal condition and be mentally or physically unable to make decisions for yourself in order for the Living Will to become effective.
4. Durable Power Of Attorney For Health Care - also known as an advance health care directive - you name someone to make health care decisions for you if you ever become mentally or physically unable to make those decisions for yourself - works in conjunction with the Living Will.
5. Advance Care Plan - this is the newer term for a Living Will and Durable Power Of Attorney For Health Care - the Advance Care Plan incorporates the Living Will and Durable Power Of Attorney For Health Care into one document.
B. TWO OTHER IMPORTANT LEGAL DOCUMENTS FOR SPECIAL SITUATIONS
1. Special Needs Trust - also known as a Supplemental Needs Trust - for disabled children or adults who receive or may be eligible to receive SSI - the Special Needs Trust allows such children or adults to receive property as beneficiaries through the trust and continue receiving SSI - if they were to receive property through a Will or any direct method of transfer they would lose their SSI.
2. Miller Trust - also known as an Income Qualifying Trust - allows someone to qualify for Medicaid (Tenncare) long term nursing home benefits if their monthly income exceeds Tenncare limits - the “look back” period for transfers of property to meet Tenncare asset rules is 5 years.
C. STANDARD METHODS OF TRANSFERRING PROPERTY
1. Warranty Deed or Quit Claim Deed if real property is being transferred – leaving real property by Will allows the beneficiaries of the Will to take a “stepped up” basis in the real property so that federal capital gains tax is reduced, if not entirely, eliminated.
2. Certificate Of Title if automobiles or other motor vehicles or motor homes are being transferred.
3. Bill Of Sale if personal property is being transferred which is not covered under the certificate of title laws.
4. Last Will and Testament (see also above) for the transfer of both real property and personal property at the time of death - probate of the Will is the process whereby the Will is officially recognized by the probate court and the Executor or Executrix receive their Letters Testamentary to serve as personal representative for the estate - if there is no Will, property which is not jointly titled descends under descent and distribution laws.
5. Living Trusts for the transfer of both real property and personal property - Living Trusts, because they are revocable, do not transfer property until the time of death - why have a Living Trust? - avoid probate if you desire to avoid the probate of a Will - probate in Tennessee is very efficient and effective and overseen by a probate judge who can serve as a referee if any problems develop - but Living Trusts can avoid the probate process if you title all of your property in the name of the trust and be sure to have a reliable Trustee to serve after your death.
D. OTHER MATTERS
1. Reverse Mortgages
2. Long Term Care Insurance
3. Tax Freeze On Residence for Seniors Over 65
4. Abolition of the Tennessee Gift Tax and Tennessee Inheritance Tax
-2-
E. V.A. AID AND ATTENDANCE AS ADDITIONAL INCOME
Many people are unaware that the Veteran's Administration (V.A.) has a special program, known as "Aid and Attendance", that pays a monthly benefit to veterans and their surviving spouses if certain criteria is met. Yet less than 20% of those who may qualify ever file an application with the V.A. for this benefit.
The benefit for a veteran and spouse can be $1,800.00 per month, $1,554.00 per month for a single veteran and $978.00 per month for a surviving spouse, all adjusted annually for inflation. Excluding a residence, one car and burial lots which are exempt, the maximum assets which can be owned are $80,000.00. But assets in excess of $80,000.00 can be transferred out of the applicants name without the five year look back period that is part of qualifying for long term nursing home care as a Medicaid recipient.
The monthly costs of a nursing home, assisted living, in home care (which can include payments for in home care to a nondependent child), medical insurance premiums and other health care costs are all deductible against monthly income. So, by way of example, if an applicant has $4,000.00 per month in monthly income and $4,000.00 per month in health care costs, his or her net monthly income is $ 0.00., meaning benefits can be awarded at $1,800.00 per month to a veteran and spouse, $1,554.00 per month to a single veteran and $978.00 per month to a surviving spouse.
The veteran must have served 90 continuous days in the military, one day of which must have been in “wartime”, defined by the Code of Federal Regulations as World War II, Korea, Vietnam and the Gulf War. No wartime injury is required but honorable discharge from service is a criteria.
The medical test for determining eligibility is being unable to attend to the daily activities of life such as feeding, clothing, bathing, grooming and toileting. This requires the medical records of the primary care physician and a statement in letter form by the primary care physician that the applicant is no longer able to attend to the daily activities of life without the assistance of others.
Although the application can take several months for approval, monthly benefits are retroactive back to the month of the filing of the application. V.A. “Aid and Attendance” can be a much needed financial lifeline to families by providing an additional source of income to offset the high costs of health care for an elderly parent.
