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The three things to know about income protection for a Medicaid applicant’s spouse

June 27, 2011

Filed under: Medicaid Planning — Andrew Sykes @ 4:09 pm

If an applicant for Medicaid is married, the applicant’s spouse is entitled to receive a certain level of monthly income. The Medicaid term for that income allowance is the “monthly maintenance needs allowance” or “MMNA” for short.

Most people need to know just three things about the MMNA.

First, the Medicaid applicant’s spouse must be a “community spouse” in order to receive a MMNA.

Second, the amount of the MMNA approved by the state will be somewhere between the current minimum and maximum allowances. (As of July 1, 2011, those figures will be: minimum, $1,839; maximum, $2,739. To make sure you always have the current figures, bookmark the Medicaid Current Numbers page of our website.)

Each community spouse’s MMNA will be different, and will depend on the community spouse’s shelter costs, including rent, mortgage, homeowner’s insurance, taxes, utilities, and so forth. A homeowner with no mortgage and low property taxes tends to have a MMNA closer to the minimum, while a renter tends to have a MMNA closer to the maximum.

Third, a community spouse can request a MMNA above the maximum cap if the community spouse has “exceptional circumstances resulting in significant financial duress.” (An example is a community spouse residing in an assisted living facility who cannot afford basic necessities with $2,739 a month.) In Pennsylvania, one must request an appeal hearing to obtain a MMNA above the maximum.

So that’s really all most people need to know about the MMNA.

But, okay, suppose you want to know the technical details because you are a lawyer, or you just love arcane minutia. In that case, read on.

The MMNA consists of two parts:

(1) a basic allowance equal to 150% of the federal poverty level for a family of two ($1,839 as of July 1); and

(2) an excess shelter allowance equal to the amount by which shelter expenses exceed the shelter allowance ($552 as of July 1). Shelter expenses are limited to rent or mortgage payments (including principal and interest), taxes and insurance, required maintenance charges for a condominium or cooperative, and an allowance for utility expenses. An applicant should be prepared to substantiate these expenses with bills for the past 12 months. To calculate the excess shelter allowance, add up all the shelter expenses, and subtract the shelter allowance:

(Shelter expenses – shelter allowance) + $1,839 = MMNA

Then make sure your figure does not exceed the maximum cap, currently $2,739. (Pennsylvania also requires the use of utility standards in calculating shelter expenses.)

The statute authorizing a revision of the MMNA above the maximum cap can be found at 42 U.S.C. § 1396r-5(c)(2)(B).

Free webinars on elder rights issues

June 23, 2011

Filed under: Elder Law - General — Andrew Sykes @ 4:09 pm

You can find a number of free, highly informative webinars on elder rights issues at the National Elder Rights Training Project’s website.

Webinars presented this year include:

-Identifying, Preventing, and Addressing Identity Theft

-Basics of VA Benefits

-The Role of Undue Influence in Elder Abuse

The site also has webinars from 2009 and 2010.

The National Elder Rights Training Project is part of the National Legal Resource Center, a collaboration of organizations sponsored by the Administration on Aging.

Time limits for contesting a will or revocable trust

June 22, 2011

Filed under: Estate Administration,Trusts,Will & Trust Contests Featured Posts — Andrew Sykes @ 4:10 pm

When someone calls my office wanting to contest a will or revocable trust, one of the first questions is whether we still have time to contest it. No use going through all the details of possible forgery or undue influence if we’re two years past the time limit.

Below are the time limits applicable in Pennsylvania.

Will Contest

If someone dies leaving a will, a probate estate may be opened by submitting the will to the register of wills in the county of death. The register opens the estate by issuing “letters of administration.”

Anyone wishing to contest the will usually has one year from the time letters are issued to file an appeal. However, it’s also important to know that the court has authority to limit the appeal time to as short as three months!

Courts have allowed exceptions to the time limit in certain circumstances, including fraud, forgery, and the failure of the will’s executor to notify an interested party about the estate.

(A will may also be contested by filing a “caveat” with the register of wills, but that is done before the will is submitted in the first place by someone who hopes to prevent the register from recognizing the validity of the will.)

Revocable Trust Contest

These days, more and more people use a revocable trust (sometimes called a “living trust”) as a will substitute, mainly to avoid probate. Pennsylvania law now provides a time limit for contesting revocable trusts.

To understand the time limit, you first need to know that Pennsylvania law requires the trustee of a revocable trust to send out notices upon the death of the person who established the trust. Notice must be sent to certain people, such as the deceased’s spouse and children, letting them know some basic information about the trust. The trustee must send that notice within 30 days of learning about the death.

A person wishing to contest the validity of the revocable trust then has “one year after the date on which the trustee gave the notice” to file a petition in court. Keep in mind, though, that the law also allows the court to shorten that time limit to six months.

Act promptly

Whether it’s a will or revocable trust, it’s crucial to take action as soon as possible to preserve the right to contest.

Veterans benefits can provide more income for a Medicaid recipient’s spouse

June 17, 2011

Filed under: Medicaid Planning,Vet Benefits Featured Posts,Veterans Benefits — Andrew Sykes @ 4:10 pm

Those familiar with veterans benefits for aid and attendance often think of them as a means to pay for care at home or in an assisted living facility.

But did you know A&A benefits can provide extra income for the spouse of someone on Medicaid (at least in Pennsylvania)?

Here’s an example. Suppose John, a wartime veteran with a dependent spouse (Mary), has been receiving the maximum benefit for aid and attendance: $1,949 a month. But John has just moved to a nursing home and qualified for Medicaid.

To understand the effect on John and Mary’s income, you need to know that when a veteran with a dependent spouse receives benefits to help with long term care, those benefits have two components:  (1) a low-income pension, and (2) housebound benefits or aid and attendance benefits.  Veterans benefits are not reduced when the recipient has a dependent (such as a spouse) and later qualifies for Medicaid. Under Pennsylvania’s Medicaid regulations, the “aid and attendance and housebound allowance portion of a veterans benefit” does “not count as income” when determining a Medicaid recipient’s income. 55 Pa. Code § 181.81(9).

In John’s case, his veterans benefit of $1,949 a month breaks down into a low-income pension of $1,290, and aid and attendance benefits of $659. He can continue to receive benefits because of Mary, his dependent spouse.

Because the $659 aid and attendance benefit does not count as income, he can give it to Mary each month because it does not count as his income for Medicaid purposes. Mary receives this additional $659 a month in addition to all other income she would be getting.

What’s more, if John and Mary are both low income, some of the pension amount ($1,290) could also go to Mary as part of a monthly maintenance needs allowance permitted under Medicaid provisions. Whatever Mary doesn’t receive from the pension will go to the nursing home to help pay for John’s cost of care.

When your spouse is on Medicaid, an extra $659 a month or more can make quite a difference in your quality of life.

Caregiver secretly becoming spouse & then inheriting — what can you do?

June 15, 2011

Filed under: Trusts — Andrew Sykes @ 4:11 pm

When children are already grieving the death of a parent, what a nightmare to learn that a caregiver has secretly become the parent’s spouse and stands to inherit a large portion of the estate.

A recent Wall Street Journal article explored this problem.

As the article explains, state laws may not provide adequate relief. So what can you do?

I agree with one proactive approach discussed in the article — protect assets ahead of time with an irrevocable trust. Shielding assets from scam artists is just one of the ways a properly drafted irrevocable trust can preserve an estate.

I take issue, though, with the usefulness of the article’s other suggested defense — a durable power of attorney. While I agree that every adult should have a durable POA, the problem is that the person who signed it can easily revoke it. A durable POA wouldn’t pose much of a barrier to a scammer who had the persuasive skills to talk the victim into getting married.

Guide to Medicare under the new health law available

June 13, 2011

Filed under: Elder Law - General — Andrew Sykes @ 4:12 pm

For a limited time, you can download or order a free copy of a guide from Consumer Reports on Medicare under the Affordable Care Act of 2010.

The guide, titled Medicare: 6 things you need to know now is available by clicking here.

The guide includes information on:

  • what you need to know before signing up for Medicare
  • prescription drug discounts now available for those in the Medicare “doughnut hole”
  • coverage options for certain preventive services, such as flu shots, wellness visits, mammograms, and prostate cancer screenings
  • new enrollment period dates
  • contact information for agencies

What is a “community spouse” for Medicaid purposes?

June 9, 2011

Filed under: Medicaid Planning — Andrew Sykes @ 4:12 pm

If you have read much about Medicaid planning, you have no doubt learned of the various protections available for community spouses.

What is a “community spouse” and exactly who qualifies?

“Community spouse” is Medicaid lingo for the husband or wife of a Medicaid applicant. To qualify as a community spouse, there are two simple requirements. First, you must be the husband or wife of an “institutionalized spouse,” meaning a person who resides in a medical institution or nursing facility and is “likely to remain there for at least 30 consecutive days.” Second, you cannot also be receiving long term care in a medical institution or nursing facility.

Most community spouses live in a home or apartment, in a personal care home, or in an assisted living facility.

But if both spouses reside in a nursing facility or hospital, and are both expected to remain 30 days or more, neither one is a community spouse. To qualify for Medicaid, each would have to spend down to the applicable limits and meet the other eligibility requirements.

For you legal types who want citations to the definition of community spouse, you can find the federal statute at 42 U.S.C. §1396r-5(h) and the Pennsylvania regulation at 55 Pa. Code  § 178.2.

Wills and probate records in Allegheny County on Internet soon

June 7, 2011

Filed under: Estate Administration,Estate Planning,Trusts — Andrew Sykes @ 4:13 pm

According to the Pittsburgh Post-Gazette, the Department of Court Records in Allegheny County plans to have many probate records, such as wills, available for viewing online in the near future.

Read the story here.

For years, privacy has been suggested as a reason to have a revocable living trust instead of a will. That reason never impressed me much. True, a will becomes a public record once it is used to open an estate. But the only way your friends or neighbors can read your will is to go downtown, find (and pay for) a parking space, locate the Department of Court Records, and fill out a form to see your file. Who is going to bother?

But if such records can be easily viewed online, your will could be read by neighbors, distant relatives, acquaintances, and complete strangers. (As the article points out, the system will restrict access to some sensitive documents.)

I’m in favor of having more public records, including probate records, available online. But I suspect the increased public access will persuade more people to choose estate planning alternatives,  like trusts, that offer a higher level of privacy.

Your legacy: what matters

June 6, 2011

Filed under: Estate Planning,Estate Planning Featured Posts — Andrew Sykes @ 4:14 pm

How will you be remembered?

MSNBC reports the strange story of Wellington Burt, a lumber baron who at the time of his death was one of the richest men in America. Although he died in 1919, his $100 million estate is only now being distributed. His will specified that no one would receive any of his estate until 21 years after the death of his last remaining grandchild.

He is described in the story as “greedy,” “stingy,” and “tightfisted.” None of the 12 descendants who will split his fortune knew him at all. You can read the full story here:http://on.today.com/jeTSab

Contrast Burt’s story with that of another multimillionaire who died 23 years before Wellington Burt.

What do you associate with the name “Nobel?” Do you associate it with a man who was the inventor of dynamite and an armaments manufacturer, or with the highly coveted prizes for outstanding achievements in literature, peace, physics, chemistry, and medicine?

A number of years before his death, Alfred Nobel was startled to see a newspaper article reporting his death and describing him as Nobel, the “merchant of death.” The newspaper had named the wrong person, of course. It was Nobel’s brother who had died.

Still, Nobel was troubled by the way the newspaper summed up his life’s work. He later rewrote his will to leave the vast majority of his estate to a fund establishing the prizes we know so well today.

You may not have the millions of Wellington Burt or Alfred Nobel, but your will can still serve as a powerful means of establishing your legacy. As you think about what will become of your estate, consider what really matters to you and how others will remember you.

Safe deposit box inventories in estates — new procedure

June 3, 2011

Filed under: Estate Administration — Andrew Sykes @ 4:14 pm

“Effective immediately, neither a department or bank employee, nor lawyer or CPA must be present at a safe deposit box inventory” of a deceased person, the Pennsylvania Department of Revenue has announced. “The department no longer will provide employees to be present at safe deposit box inventories.”

Instead, a representative of an estate, acting alone, may enter a safe deposit box after giving proper notice.

The announcement, and the notice requirements, can be found in the Department’s Inheritance Tax Bulletin 2011-02. You can locate that bulletin at this link:http://bit.ly/l31vXV .

Despite this modified procedure, it is still good practice to have someone else present if you are taking the inventory of a safe deposit box. If a disgruntled beneficiary ever challenged your honesty, and was just sure that Mom left a diamond necklace in that box, a witness to your inventory could come in handy.