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Knapp Law Firm, PC http://lindafarronknapp.com Fri, 11 Mar 2022 20:31:58 +0000 en hourly 1 https://wordpress.org/?v=6.0.7 What things can be done to avoid probate? http://lindafarronknapp.com/elder-law-and-estate-planning/what-things-can-be-done-to-avoid-probate/?utm_source=rss&utm_medium=rss&utm_campaign=what-things-can-be-done-to-avoid-probate http://lindafarronknapp.com/elder-law-and-estate-planning/what-things-can-be-done-to-avoid-probate/#respond Wed, 26 Jan 2022 19:39:50 +0000 http://lindafarronknapp.com/?p=2709 A simple way to avoid probate is to give away property during your lifetime.  But there can be consequences because you lose control and cannot recover the item, cash or property just by asking.  The new owner has to agree to return something to you or even use funds for your benefit.  You should only give away what you can Continue Reading

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A simple way to avoid probate is to give away property during your lifetime.  But there can be consequences because you lose control and cannot recover the item, cash or property just by asking.  The new owner has to agree to return something to you or even use funds for your benefit.  You should only give away what you can spare. Gifting over $15,000 per person in a year requires you to file a gift tax return with the IRS.

A second thing you can do is to make an asset payable on death.  An example is life insurance, an IRA, a 401k, or an annuity.  As long as you don’t name your estate or fail to name any beneficiary the property will pass outside of probate to the person you designate.  You should name a contingent beneficiary in case the first person you select predeceases you.

Likewise you can use payable-on-death (POD) accounts.  These are also sometimes called multiparty accounts.  POD accounts do not provide the beneficiary with immediate access to your financial accounts, such as checking and savings accounts.  The funds are given to the named beneficiary after you die.  With a multiparty account the other person on the account can have immediate access while you are alive and after you die it belongs to the other person and does not pass thru probate.  This can be a useful way for loved ones to have quick access to funds to pay for funeral expenses, last bills, and even support themselves.

Similar tools are called transfer on death (TOD) accounts used for stocks, bonds and other securities.  Some states do not allow this form of designation, but South Carolina does.

Joint ownership with right of survivorship or a life estate are often used with real property, vehicles, and mobile homes to avoid probate.  These types of ownership create various rights and limitations such as needing the other owner’s permission to mortgage the property or sell it.   You need to understand the drawbacks before creating any changes to your real property.  This change in title is a gift and subject to the five-year-look-back-period for Medicaid eligibility.

Living trusts have grown in popularity because they avoid probate and let you retain control as long as you are competent.  These kinds of trusts can hold your real property in multiple states, including time shares.  Said trusts can also hold household goods, vehicles, cash, accounts, etc.  They can work in conjunction with some of ideas above.

Do not act on any of these ideas if you feel pressured by someone or are confused.  You should consult with an elder law attorney well versed in Medicaid law before gifting away property and assets, changing your beneficiaries, or even creating a living trust.

Disclaimer:  Information contained in this column is meant to be of general information on frequently asked questions concerning disability, elder law, estate planning and probate law, and does not contain specific legal advice to a client.  No attorney-client relationship is created by reading this column.

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What happens to my belongings and accounts if I die without a will? http://lindafarronknapp.com/elder-law-and-estate-planning/what-happens-to-my-belongings-and-accounts-if-i-die-without-a-will/?utm_source=rss&utm_medium=rss&utm_campaign=what-happens-to-my-belongings-and-accounts-if-i-die-without-a-will http://lindafarronknapp.com/elder-law-and-estate-planning/what-happens-to-my-belongings-and-accounts-if-i-die-without-a-will/#respond Wed, 26 Jan 2022 19:38:06 +0000 http://lindafarronknapp.com/?p=2707 The State of South Carolina has a plan for you called “intestate succession”.  After someone steps forward to begin the probate process he or she will address payment of various debts and estate expenses, like the funeral, last medical bills, last utilities, legal fees, probate costs, etc. After these expenses are paid, then what remains of your things will be Continue Reading

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The State of South Carolina has a plan for you called “intestate succession”.  After someone steps forward to begin the probate process he or she will address payment of various debts and estate expenses, like the funeral, last medical bills, last utilities, legal fees, probate costs, etc. After these expenses are paid, then what remains of your things will be divided between your “heirs-at-law”.   Your heirs are first your spouse and children, if you have neither a spouse or children or even grandchildren, then to your biological parents, not those who raised you.  If your parents have also predeceased you, then assets pass out to your siblings in substantially equal shares.  If any sibling predeceased you leaving children, then that sibling’s share will go to his or her children.

Not all assets are part of your probate estate, for example if you own a house as joint tenants with right of survivorship with a spouse the house belongs solely to your spouse upon your death.  Multiparty bank accounts usually belong to the survivor.  Likewise IRAs and life insurance may be payable on death to a named beneficiary.  These are not all the things that could pass by contract outside the probate estate.

Let’s assume all assets are solely in your name.  When you die, 50% goes to your spouse and 50% to your children.  Spouse have some elective rights that are not covered in this answer.  If there are no children all goes to the spouse.  If your spouse has predeceased you or you are divorced or never married, then all to your children as defined by statute in substantially equal shares.

One problem of the State’s plan for you is the children could be minors so that a conservator may have to be appointed and the probate court will control and oversee assets until the children are adults.  Real property may not be able to be easily sold.  Your spouse has to pay off the mortgage alone while the kids get ½ the home and land later as adults.  You might have preferred for your spouse to get it all, especially if this is a second marriage and your children live with your ex-spouse or they don’t get along.  The adult children could force the house to be sold. Part of your assets could pass to a special needs child who could be disqualified from public benefits.

Another potential problem could be you are estranged from an adult child for a good reason like his or her drug or gambling addiction and the last thing you want is for him or her to get a large amount of cash.  Or maybe your children don’t get along with one another and because you left no instructions in a will they become further divided as they fight it out in court. From my experience, arguments cause delays and increase the expenses for all the parties involved.

A will allows you to name someone to handle things at your death who is known as the personal representative or executor.  Failure to nominate someone in your will as personal representative means the State’s priority list will be applied by the court to appoint someone to probate your estate.  It might not be who you would have chosen given your insight into your relatives, their characters and relationships with one another.  Bonding will likely be required adding to the cost of probate administration. Additionally, probate costs will be higher.

Intestate succession is rarely the plan you would have made.  You have much better options. Seeking the help of an estate lawyer can be crucial in formulating a valid will that expresses your specific wishes and protects your loved ones according to your instructions.

Disclaimer:  Information contained in this column is meant to be of general information on frequently asked questions concerning disability, elder law, estate planning and probate law, and does not contain specific legal advice to a client.  No attorney-client relationship is created by reading this column.     10/2021

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As a small business owner, how do I begin to plan for retirement or my untimely death? http://lindafarronknapp.com/elder-law-and-estate-planning/as-a-small-business-owner-how-do-i-begin-to-plan-for-retirement-or-my-untimely-death/?utm_source=rss&utm_medium=rss&utm_campaign=as-a-small-business-owner-how-do-i-begin-to-plan-for-retirement-or-my-untimely-death http://lindafarronknapp.com/elder-law-and-estate-planning/as-a-small-business-owner-how-do-i-begin-to-plan-for-retirement-or-my-untimely-death/#respond Wed, 26 Jan 2022 19:35:21 +0000 http://lindafarronknapp.com/?p=2705 A. Making sure an orderly and affordable transfer of your business can be accomplished if you plan now. Failure to plan always costs a lot of money and can even force a company to liquidate rather than carry on through the transition period, and such situations often create lasting family and personal strife. Unlike in movies, where ultra-rich parents potentially Continue Reading

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A. Making sure an orderly and affordable transfer of your business can be accomplished if you plan now. Failure to plan always costs a lot of money and can even force a company to liquidate rather than carry on through the transition period, and such situations often create lasting family and personal strife. Unlike in movies, where ultra-rich parents potentially leave billions to spoiled children, most small business owners struggle with just making sure enough capital is available to continue the business and still provide for their family and loyal employees. Planning is critical.

Most succession plans involve six steps:

1. Survival – First, buy appropriate business continuation, disability, and life insurance for yourself and set aside something each month for your own retirement. This is as important as you showing up to work every day and making a five-year business plan.

2. Choose a Direction – Determine whether you really want the business to pass within the family as opposed to selling it to another tradesman or professional, or simply dissolving the corporation. Once you are sure continuation is in everyone’s best interest, you must create opportunities for others to learn all aspects of the business so someone can step into your shoes.

3. Recruitment – The person saying he or she wants the business is not necessarily the one who has the capability to lead. You may have a unique set of characteristics that your offspring lack. Sometimes it is best to split responsibilities to take advantage of individual strengths and hire key persons to fill in the gaps.

4. Development – Invest time in training key people. Don’t let family shirk business responsibilities if you expect them to take over.

5. Select trusted professionals – lawyers, a CPA or accountant, an insurance agent, and a financial planner — to help you formulate a business succession plan and make it legally enforceable in the event of your disability, retirement, or death. You may need to update your business plan, create a buy-sell agreement, revise your will, create a limited financial power of attorney for the business, and/or create and fund a living trust. There may also need to be funding vehicles like key-man life insurance put in place.

6. Implementation – Once a well thought out plan is in created, you need to take the steps to put it in place. You can modify it, but at some point, you must be ready to step aside so set a trial date. Actually, let those you have selected run things for a week or two on their own. Listen to their ideas on changes and allow them some opportunity to make plans on their own, with your oversight, guidance with an eye on profitability. This does not mean you have to retire, but you may look forward to limiting your role and taking some well-deserved vacations.

Disclaimer: Information contained in this column is meant to be of general information on frequently asked questions concerning disability, elder law, estate planning and probate law, and does not contain specific legal advice to a client. No attorney-client relationship is created by reading this column. December 2021

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What is the scoop on charitable giving this year? http://lindafarronknapp.com/elder-law-and-estate-planning/what-is-the-scoop-on-charitable-giving-this-year/?utm_source=rss&utm_medium=rss&utm_campaign=what-is-the-scoop-on-charitable-giving-this-year http://lindafarronknapp.com/elder-law-and-estate-planning/what-is-the-scoop-on-charitable-giving-this-year/#respond Wed, 26 Jan 2022 19:24:45 +0000 http://lindafarronknapp.com/?p=2701 Elon Musk of Tesla was asked to fund a six-billion-dollar donation to the UN to address world hunger. He agreed to give provided they presented him with an acceptable detailed plan on how it was to be accomplished. Even such a large gift (2% of his estimated wealth) would not be a permanent solution. Solving world hunger, the effects of Continue Reading

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Elon Musk of Tesla was asked to fund a six-billion-dollar donation to the UN to address world hunger. He agreed to give provided they presented him with an acceptable detailed plan on how it was to be accomplished. Even such a large gift (2% of his estimated wealth) would not be a permanent solution. Solving world hunger, the effects of poverty, disease, and natural disasters not to mention research and long-term care require on going contributions from all who have means to give. We are all part of the solution and better for the sacrifice of time, change, small one time or regular donations, or a legacy after death thru a will or trust, land, life insurance or an annuity. As an estate planner I encourage my clients to consider gifting through their wills or as part of a trust. There is no limit on estate tax deductions that can be taken for charitable bequests.

Donors age 70 ½ and older may direct lifetime distributions from a traditional or Roth IRA to a nonprofit that counts toward your taking of the required minimum distribution. You effectively bypass income tax on the contribution! You can also avoid estate taxes with death time distributions to nonprofits. The cap for a death time retirement plan contribution is $100,000. There is no charge to update a beneficiary designation form if you decide to add a charity as one of you beneficiaries. These designations can be separate from your will or trust.

Creating a charitable gift annuity or a testamentary charitable remainder trust lets the non-spousal beneficiaries (i.e., children and other issue) of your IRA receive fixed payments of over a longer span of time than the 10-year distribution required by Congress as of January 1, 2020.

If you make a gift of stocks, bonds, and mutual funds you receive an immediate tax deduction for the fair market value on the date of transfer to the nonprofit with no capital gains! You can gift to a specific nonprofit and designate a particular project you like.

When gifting a paid-up life insurance policy, you receive an immediate tax deduction for the cash value of the policy. You have satisfaction knowing you made a significant gift without it affecting your cash now.

Likewise, you can gift a vacation home, commercial building, or undeveloped land. The IRS requires an independent appraisal to establish fair market value and there are additional IRS procedures. If interested check it out online. With these kinds of real property gifts, you can give up to 30% of your adjusted gross income and carry the deduction forward for up to five years. Good news after the gift you are free of property taxes, insurance, maintenance costs AND CAPITAL GAINS TAXES.  You can also keep a lifetime interest and pass the property at death via a life estate deed.

Some fun gifting ideas I have noticed this year are The Church of Jesus Christ of Latter-day Saints donation machines – it is like putting money in for a candy bar, but instead you buy a pair of gloves for a homeless person. They are also promoting The Light the World with Love Campaign that encourages you to do some act of kindness each day from December 1st until Christmas. You can find this online at LighttheWorld.org. I have a sign in my kitchen that reads “Kindness Begins with Me.”  And I believe it does.

I really like buying a cow, goat, some rabbits, or chickens for a family who then learns to raise animals for their milk or meat at Heifer International and eventually they earn enough to sell the excess and further their self-sufficiency. Oh, and it’s just not Christmas without something for children. Over the years we have been involved through various programs – Secret Santa, Angel Trees, the Smile Train, Make a Wish, and Toys for Tots. This year our ladies’ group at church made fleece blankets for at risk children.

I practice elder law and my office fills shoe boxes with small gifts for home bound seniors through our local programs on Aging.

I read a book a few years back titled Christmas Jars and started saving all my change to give jars of coins at the holidays to whoever my heart directs. I see people all around who need to be lifted with a little cash.

Here’s the final tip: Count your blessings at Thanksgiving.  I do which always opens my heart to prepare for Christmas.

DISCLAIMER    The information given in this article is of a general nature and does not create an attorney-client relationship. You should always consult with an attorney one-on-one regarding the specific facts of your situation. November 2021

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Disabilities http://lindafarronknapp.com/disability-and-special-needs-law/disabilities/?utm_source=rss&utm_medium=rss&utm_campaign=disabilities http://lindafarronknapp.com/disability-and-special-needs-law/disabilities/#respond Mon, 13 Sep 2021 14:39:09 +0000 http://lindafarronknapp.com/?p=2698 Q. I believe my adult mentally challenged brother is not receiving proper care in the residential facility and his doctor records should support this. I tried reporting things the direct way, but there was no improvement. I want to put a camera with a recording device in his room to document the problem. What are my options? A. I will Continue Reading

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Q. I believe my adult mentally challenged brother is not receiving proper care in the residential facility and his doctor records should support this. I tried reporting things the direct way, but there was no improvement. I want to put a camera with a recording device in his room to document the problem. What are my options?
A. I will answer this question in several ways. First, involving the doctor via a written order for certain care or his/her records reflecting the concerns and likely causes is a good idea. You can call to schedule a care planning meeting with the facility case manager. If access is still restricted do it via Zoom.
I often hear from family members that they fear retaliation such as the facility finding a way to transfer or discharge the individual if they complain too much. Retaliation is prohibited by law. Just document your efforts including dates, times, persons spoken to and what you understood. Follow-up letters are good ideas to clarify expectations. Please be civil.
Second, in the early 1970s the Long-Term Care Ombudsman Program (LTCOP) was created by the federal government. In 1978 each state became required as part of the Older Americans Act to create an ombudsman program. Specific duties were outlined in 1992 amendments to the Act. Additionally, the Nursing Home Reform Act of 1987 established regulations such as residents have the right to be free of physical or mental abuse, corporal punishment, involuntary seclusion, and to be free of physical and chemical restraints imposed for discipline or convenience. The resident’s Bill of Rights is easily obtainable from the facility.
An ombudsman acts as an advocate for those in nursing homes, assisted living and long-term care facilities. They investigate complaints. In South Carolina, the LTCOP program is part of the SC Department of Aging and they have regional offices, including one in our geographic area. Annually they investigate about 8000 complaints. All matters are kept confidential unless granted permission. Complaints typically involve accidents or improper restraints, gross neglect, dignity and respect violations related to staff issues. Poor quality food, slow response to calls and medical/dental concerns are also raised. You can call 1-800-868-9095 to report your concerns.
I have the utmost respect for the ombudsmen (mostly women) I have had the pleasure to work with over the years. I have found them to be knowledgeable, dedicated, diligent and caring.
To reduce abuse in long-term care facilities, states began to enact legislation to allow electronic devices in resident rooms. To date six states have issued rules to authorize cameras and sound recording devices, sometimes called granny cams. South Carolina is not among them. Remember your loved one dresses and undresses in such settings. The aged and disabled have dignity and privacy rights which should be respected even in guardianships. They also have the right to private conversations.
Most attorneys that deal with the elderly and disabled support the use of electronic devices to curb facility violations, especially in the light of Covid-19 restrictions such that families have been unable to visit and oversee daily care. That being said the staff in residential settings have been stretched to capacity this past year. I would think it’s been hard to fill caregiver job vacancies in the current Covid situation. Focus on the facts and be kind when talking with the caregiver staff. The job is no easier for them than it was for you just because they are being paid a modest salary.
There is not a lot of case law, because rarely is there time or money to pursue court action. Nevertheless, you might hire an attorney to step into this kind of situation as an advocate directly with the facility. If a guardian ad litem is still involved as part of a family or probate court proceeding, he or she may be able to investigate and push compliance with your brother’s medical needs.
DISCLAIMER The information given in this article is of a general nature and does not create an attorney-client relationship. You should always consult with an attorney one-on-one regarding the specific facts of your situation. March 2021

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Probate, Estate Planning http://lindafarronknapp.com/elder-law-and-estate-planning/probate-estate-planning/?utm_source=rss&utm_medium=rss&utm_campaign=probate-estate-planning http://lindafarronknapp.com/elder-law-and-estate-planning/probate-estate-planning/#respond Mon, 13 Sep 2021 14:35:19 +0000 http://lindafarronknapp.com/?p=2696 Q. What things can be done to avoid probate? A. A simple way to avoid probate is to give away property during your lifetime. But there can be consequences because you lose control and cannot recover the item, cash or property just by asking. The new owner has to agree to return something to you or even use funds for Continue Reading

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Q. What things can be done to avoid probate?
A. A simple way to avoid probate is to give away property during your lifetime. But there can be consequences because you lose control and cannot recover the item, cash or property just by asking. The new owner has to agree to return something to you or even use funds for your benefit. You should only give away what you can spare. Gifting over $15,000 per person in a year requires you to file a gift tax return with the IRS.
A second thing you can do is to make an asset payable on death. An example is life insurance, an IRA, a 401k, or an annuity. As long as you don’t name your estate or fail to name any beneficiary the property will pass outside of probate to the person you designate. You should name a contingent beneficiary in case the first person you select predeceases you.
Likewise you can use payable-on-death (POD) accounts. These are also sometimes called multiparty accounts. POD accounts do not provide the beneficiary with immediate access to your financial accounts, such as checking and savings accounts. The funds are given to the named beneficiary after you die. With a multiparty account the other person on the account can have immediate access while you are alive and after you die it belongs to the other person and does not pass thru probate. This can be a useful way for loved ones to have quick access to funds to pay for funeral expenses, last bills, and even support themselves.
Similar tools are called transfer on death (TOD) accounts used for stocks, bonds and other securities. Some states do not allow this form of designation, but South Carolina does.
Joint ownership with right of survivorship or a life estate are often used with real property, vehicles, and mobile homes to avoid probate. These types of ownership create various rights and limitations such as needing the other owner’s permission to mortgage the property or sell it. You need to understand the drawbacks before creating any changes to your real property. This change in title is a gift and subject to the five-year-look-back-period for Medicaid eligibility.
Living trusts have grown in popularity because they avoid probate and let you retain control as long as you are competent. These kinds of trusts can hold your real property in multiple states, including time shares. Said trusts can also hold household goods, vehicles, cash, accounts, etc. They can work in conjunction with some of ideas above.
Do not act on any of these ideas if you feel pressured by someone or are confused. You should consult with an elder law attorney well versed in Medicaid law before gifting away property and assets, changing your beneficiaries, or even creating a living trust.
Disclaimer: Information contained in this column is meant to be of general information on frequently asked questions concerning disability, elder law, estate planning and probate law, and does not contain specific legal advice to a client. No attorney-client relationship is created by reading this column.

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I heard something about funds to help with COVID-19 deaths? http://lindafarronknapp.com/disability-and-special-needs-law/i-heard-something-about-funds-to-help-with-covid-19-deaths/?utm_source=rss&utm_medium=rss&utm_campaign=i-heard-something-about-funds-to-help-with-covid-19-deaths http://lindafarronknapp.com/disability-and-special-needs-law/i-heard-something-about-funds-to-help-with-covid-19-deaths/#respond Mon, 17 May 2021 15:01:29 +0000 http://lindafarronknapp.com/?p=2693 YES. FEMA (Federal Emergency Management Administration) whose mission it is to help people before, during and after disasters will have funds available starting April 12, 2021 to reimburse up to $9,000 per funeral to those that paid for burial of love ones from COVID. Funds were made available in the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 and Continue Reading

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YES. FEMA (Federal Emergency Management Administration) whose mission it is to help people before, during and after disasters will have funds available starting April 12, 2021 to reimburse up to $9,000 per funeral to those that paid for burial of love ones from COVID. Funds were made available in the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 and the American Rescue Plan Act of 2021.
To qualify:
• The death had to occur in the US, including US territories and the District of Columbia after January 20, 2020.
• An official death certificate must state death was attributed directly or indirectly to COVID-19. Phrases that indicate a high likelihood of COVID-19 will be considered sufficient.
• The applicant must be a US citizen, qualified alien, or non-citizen national. There is no requirement the deceased be born in the US.
• Funeral expenses documents must include the applicant’s name, show your name as the responsible party, the deceased person’s name, the amount of funeral expenses and date(s) the funeral expenses happened.
• There can be no duplication of benefits received from burial or funeral insurance, voluntary agencies, government agencies or other sources like donations. These amounts will be deducted so its possible to get partial assistance. Life insurance that was payable to an individual or an estate is reimbursable.
• Funeral expenses can also be for interment and cremation.
• Applicants may receive reimbursement for multiple deceased individuals up to a maximum of $35,000.
If multiple persons contributed toward funeral expenses, such as the children of a deceased parent, they should apply under one application as applicant and co-applicant. A minor child cannot apply even if he or she was the primary beneficiary of the decedent’s estate, however if all documentation supports the minor child’s payment of the funeral expenses FEMA will consider the application for possible assistance under terms not yet released.
NO ONLINE APPLICATIONS WILL BE ACCEPTED BUT GATHER YOUR DOCUMENTS NOW. Once an applicant has applied and received an application number you will be able to upload, fax or mail documents. To register you will need your and the deceased person’s Social Security numbers, your and the deceased person’s date of birth, your current mailing address and phone number, location where the deceased passed away, information about burial and funeral insurance policies and other donations or payments made on the funeral bill, routing and account number for applicant if direct deposit is requested.
The following funeral expenses are covered:
• Transportation for up to two individuals to identify the deceased person
• Transfer of remains
• A casket or urn
• Burial plot or cremation urn
• Marker or headstone
• Clergy or officiant services
• Arranging the funeral ceremony
• Use of funeral home equipment or staff
• Cremation or interment costs
• Cost of producing and certifying multiple death certificates
• Additional expenses mandated by local or state government laws or ordinances.
A hotline has been setup at 844-684-6333 or TTY for the deaf at 1-800-462-7588. The Office will be open from 8 AM to 8 PM Central Time after April 12, 2021. At present there is no deadline to apply for COVID-19 Funeral Assistance.
DISCLAIMER The information given in this article is of a general nature and does not create an attorney-client relationship. You should always consult with an attorney one-on-one regarding the specific facts of your situation. April 2021

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My Mother just inherited $60,000. http://lindafarronknapp.com/elder-law-and-estate-planning/my-mother-just-inherited-60000/?utm_source=rss&utm_medium=rss&utm_campaign=my-mother-just-inherited-60000 http://lindafarronknapp.com/elder-law-and-estate-planning/my-mother-just-inherited-60000/#respond Mon, 17 May 2021 15:00:00 +0000 http://lindafarronknapp.com/?p=2691 Q. My Mother just inherited $60,000. She owns her own home and has a modest income. She has few other assets. She had a stroke and now requires help to oversee her medicine, prepare meals and she no longer drives. Will she qualify for Medicaid? A. Medicaid is a federal program with some state variables. It has medical, income and Continue Reading

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Q. My Mother just inherited $60,000. She owns her own home and has a modest income. She has few other assets. She had a stroke and now requires help to oversee her medicine, prepare meals and she no longer drives. Will she qualify for Medicaid?

A. Medicaid is a federal program with some state variables. It has medical, income and asset qualifications. Likely your Mother will qualify with some careful planning, but not at present. It’s not even clear if she meets the level of care requirements. Facts and figures drive all Medicaid application situations. I can’t give you specific advice even in my office without knowing the details and your Mother’s goals and preferences.
The attorney will both know the law, options available and focus on your mother’s best interests. Professional long-term care planning tools include: personal dependency, medical deductions, home transfers after accounting for basis and capital gain issues, annuities, converting interest income, domestic help, sale of property, sale of the home, owner financing, purchasing a new home or condo, commercial and family held reverse mortgages, owner occupancy rules and using a Medicaid waiver on the back side, partial sales, gift tax rules, life estates, private pay using long-term care insurance and other options, Medicare, Veterans Benefits, Medicaid, dozens of spend-down strategies, promissory notes, life insurance loans and cash ins, legal separations and divorce, QDROs, bankruptcy, income trusts, special needs trusts, housekeeping and caregiving contracts, and various asset transfer options including special consideration for IRAs, 401K, deferred pension plans and other retirement plans. One plan does not fit all situations.
I can tell you, do not listen to the common knowledge on the street from friends and family or even nursing home staff, if you are looking at placement. Get competent legal advice from someone that focuses on Medicaid, Veterans Affairs benefits and long-term care planning. This is money well spent as just one month of private pay nursing home care in South Carolina averages $6,500. The national average is $8,000 plus.
Consider just these five common myths.
1. There is a five-year look-back period. If you have given away anything in the five years preceding an application for nursing home Medicaid you will be denied. Yes, there is a five-year look-back period but it is not the same as a penalty period. A person could be disqualified for 60 months or one month. Don’t you want to know if it’s one month or sixty?
2. One has to get rid of all assets to qualify to receive Medicaid. No. A single person can have $2,000 in countable assets, but every asset is not counted toward eligibility. There are different rules for married couples, who are able to protect more assets. Provide the details and ask an expert.
3. If I qualify everything I own is safe from a Medicaid lien when I die. No, there is another set of rules when the receptant dies. You need to know present and future consequences of any financial actions you opt to take.
4. Planning isn’t possible once the crisis hits and someone is already in a nursing home. Not true. Options might be limited, but we frequently can save a family money even after admission.
5. I am over the income limit so I will never qualify. Not true. Income over the limit can be allocated into an irrevocable Medicaid Income Trust. Any monies remaining after the person dies become the property of the State. Typically these accounts are set up with just a few hundred dollars with pension, RMDs and possibly Social Security being directly deposited each month.

These strategies are legal.

Not all attorneys that advertise elder law offer Medicaid asset preservation or applicant processing services. Some firms focus more on nursing home abuse litigation and traditional estate planning.

Disclaimer: Information contained in this column is meant to be of general information on frequently asked questions concerning disability, elder law, estate planning and probate law, and does not contain specific legal advice to a client. No attorney-client relationship is created by reading this column. 1/2021

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Does a revocable trust replace a will? Do all assets have to go into the revocable trust? And how much do trustees typically get paid? http://lindafarronknapp.com/elder-law-and-estate-planning/does-a-revocable-trust-replace-a-will-do-all-assets-have-to-go-into-the-revocable-trust-and-how-much-do-trustees-typically-get-paid/?utm_source=rss&utm_medium=rss&utm_campaign=does-a-revocable-trust-replace-a-will-do-all-assets-have-to-go-into-the-revocable-trust-and-how-much-do-trustees-typically-get-paid http://lindafarronknapp.com/elder-law-and-estate-planning/does-a-revocable-trust-replace-a-will-do-all-assets-have-to-go-into-the-revocable-trust-and-how-much-do-trustees-typically-get-paid/#respond Mon, 17 May 2021 14:57:16 +0000 http://lindafarronknapp.com/?p=2689 Living or revocable trusts are effective estate planning tools that can avoid the hassle and cost of probate and ease the transition of assets after the death of a grantor. Clients often think that because their trust contains some, if not all, of their assets, that they only need a living trust to direct distribution on the grantor’s death, but Continue Reading

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Living or revocable trusts are effective estate planning tools that can avoid the hassle and cost of probate and ease the transition of assets after the death of a grantor. Clients often think that because their trust contains some, if not all, of their assets, that they only need a living trust to direct distribution on the grantor’s death, but that is not true. Assets in a living trust will generally pass to the named beneficiaries just days or a few weeks after a grantor’s death, but a will is still needed and filed with the probate court. The purpose of a pour-over will is to direct transfer of the grantor’s other assets and possibly those tangible personal items acquired after creation of the trust. A grantor may inherit or purchase an asset that they forget to transfer into their trust and the pour-over will deals with these items.

IRA and other retirement accounts often don’t go into a trust to order to preserve the payable-on-death tax benefits. Many people opt to leave their cars or a small checking account out of their trust. Your attorney will be able to help you decide which assets should go into the trust.

A lessor know reason for having a will involves claims against the estate. Under probate you can limit the time period when creditors can file a claim. In South Carolina that time is usually 8 months. Without probate barring creditors, creditors may come after assets for years. Assets in a living trust are not necessarily safe from creditors just because the estate is probated.

A third reason for having a will is to be able to name a guardian for minor children, an incompetent adult child or spouse with diminished capacity. These are things you cannot do in a revocable trust.

While in most cases it will cost more to create a trust and a pour-over will than just a simple will, trustee fees are typically lower than those charged by personal representatives for assets probated through a will. In South Carolina a Personal Representative can charge 5% of the probate estate, which only includes real property if the land is sold as part of administration of the estate. Trustees fees are typically 1-2% of the total assets, but depend on the size and complexity of the estate. Often family members who serve as trustees do not charge fees, only seek reimbursement for actual costs, including hiring professionals to assist and advise them as needed. Family members or friends serving as personal representatives are not required to charge fees. Trustees and personal representatives who do charge fees often must report the monies paid to the IRS as earned income.

Another benefit of a living trust is that each named beneficiary adds $250,000 to the total FDIC protection available to the account for a maximum of $1,250,000. If you plan to have more than five beneficiaries check with your attorney because there are added requirements such as each beneficiaries must having an equal interest in the trust assets.

Disclaimer: Information contained in this column is meant to be of general information on frequently asked questions concerning disability, elder law, estate planning and probate law, and does not contain specific legal advice to a client. No attorney-client relationship is created by reading this column.

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Does a Health Care Power of Attorney cover Medicare? http://lindafarronknapp.com/elder-law-and-estate-planning/does-a-health-care-power-of-attorney-cover-medicare/?utm_source=rss&utm_medium=rss&utm_campaign=does-a-health-care-power-of-attorney-cover-medicare http://lindafarronknapp.com/elder-law-and-estate-planning/does-a-health-care-power-of-attorney-cover-medicare/#respond Mon, 17 May 2021 14:54:46 +0000 http://lindafarronknapp.com/?p=2687 Not necessarily. Medicare due to its privacy notice has its own form they want completed. A competent person can complete the form called 1-800-MEDICARE AUTHORIZATION to Disclose Personal Health Information. This allows the named agent to talk with Medicare, research, choose coverage, handle claims and file an appeal. Its best not to limit the information your agent might need, but Continue Reading

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Not necessarily. Medicare due to its privacy notice has its own form they want completed. A competent person can complete the form called 1-800-MEDICARE AUTHORIZATION to Disclose Personal Health Information. This allows the named agent to talk with Medicare, research, choose coverage, handle claims and file an appeal. Its best not to limit the information your agent might need, but you can. You can also state whether the authority is indefinite or for a specific period of time. There is NO FAX OR EMAIL SUBMISSION. You must mail the form so keep a second original at home. The individual has the right to revoke at any time in writing.
These forms are necessary even for spouses.
If the person is no longer able to give consent, then the attorney-in-fact can sign AND should attach a copy of the health care power of attorney (HCPOA). Note some HCPOAs require a doctor or two doctors’ statements to activate. Some durable powers of attorney for finance contain authority in these situations. A guardian should submit his or her certificate of authority when executing on behalf of the ward.
Once you put the initial form in place you can change, update and add Medicare representatives online through your account.
You still may not be done because each Medicare Advantage, Part D Plan for prescription drugs or supplement coverage seems to have its own form. It may be called authorization to release personal information. To complete this form check with the Plan’s member information or call a customer service representative.
Disclaimer: Information contained in this column is meant to be of general information on frequently asked questions concerning disability, elder law, estate planning and probate law, and does not contain specific legal advice to a client. No attorney-client relationship is created by reading this column.

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