What makes an Elder Law Attorney different?
There are so many types of attorneys. A general practice lawyer does a little bit of everything, whereas a traditional Estate Planning attorney usually practices in Real Estate law, Business law, as well as prepares Estate Plans. A traditional Estate Planning attorney does not practice Elder Law, which is a separate and highly specialized area of law. Elder Law includes Estate Planning, but also focuses on preserving and protecting assets, especially from Long-Term Care costs. Elder Law attorneys can help those who are eligible qualify for government benefits to pay for care. Most importantly, Elder Law attorneys help people stay in control of their money and their affairs as they age.
What are the basic Estate Planning documents that everyone needs?
You’ve heard of a Will, which is an Estate Planning document that everyone should have. A Will only takes effect upon death and passes assets to your intended beneficiaries. Also important are your lifetime documents, such as your Durable Powers of Attorney for Health and for Finances. Another is a Healthcare Directive, which states your “end-of-life” wishes (also known as a Living Will or Advance Directive). These are essential Estate Planning documents that everyone needs regardless of age.
What kinds of Trusts are there?
There are lots of different types of Trusts. You can have a Trust that is “Living” or “Testamentary”, “Revocable” or “Irrevocable”. The most effective way to protect assets against Long-Term Care costs is a Testamentary Asset Protection Trust, which is created through a Will. Upon the first spouse’s death, the deceased spouse’s assets fund the Asset Protection Trust for the benefit of the surviving spouse. While the Medicaid program places severe limits on the assets that a Medicaid beneficiary can keep, funds in the Asset Protection Trust do not count toward those limits. Furthermore, neither the State nor creditors can touch Trust assets. By utilizing a Testamentary Asset Protection Trust, 50% to 100% of a couple’s Estate can be saved.
Should you have a Revocable Living Trust?
It depends. A Revocable Living Trust is intended to avoid probate. If you are single and have property in multiple states, a Revocable Living Trust might be a good idea. However, if you are married and live in Washington, a Revocable Living Trust can be extremely detrimental, particularly with respect to Long-Term Care planning. This is because Washington’s Medicaid rules do not honor Revocable Living Trusts as an asset protection plan. In other words, if you have a Revocable Living Trust in Washington you cannot protect money against Long-Term Care costs for your surviving spouse. Most people don’t realize that a Revocable Living Trust could end up costing them half to 100% of their Estate. That is why it is so critical to talk to an Elder Law attorney who knows Medicaid’s rules.
How do you qualify for Medicaid?
Medicaid is an extremely complex and specialized area of law. In order to become eligible for benefits, you essentially must pass three tests: a medical test, an income test, and an asset test. To pass the medical test, you must have a medical need for Long-Term Care. To pass the income test, your income must be less than the cost of your care. Usually, that’s not a barrier as Long-Term Care expenses can exceed $10,000 per month. Financial resources get more complicated. To pass the asset test, your assets must be within Medicaid’s standards. If you are a single person, that means you can have only $2,000 in countable assets. Countable assets are what you might think of as cash or investments: bank accounts, retirement funds, and real estate holdings. You can have non-countable assets as well, such as a home, a car, and personal property. For a couple, the resource standard is higher than a single person. Currently Medicaid allows a couple to keep $60,000 to $132,380, depending upon various factors. Couples can keep more countable assets because Medicaid has a policy against impoverishing the well spouse.
That sounds pretty scary. Are there ways to save your money and still qualify for Medicaid?
Yes! That’s the good news, and that’s exactly what we do at Elder Law Group. Because we have in-depth knowledge of Medicaid’s complicated rules, we are able to help our clients prepare to qualify for benefits: both years in advance and even at the time of need. Specifically, we provide Asset Protection Estate Planning™, which is designed to protect 50% to 100% of a couple’s assets from Long-Term Care costs. Online forms, prepackaged plans, and traditional Estate Planning simply cannot protect assets against Long-Term Care costs. While you will have the most options by planning early, it’s never too late – not even at the time of need. At Elder Law Group, we use exclusive Medicaid Asset Preservation Strategies® to qualify our clients for government benefits even when their assets are far above Medicaid standards.
What is probate and should I avoid it?
This probably is the most asked about and misunderstood area of Estate Planning. Probate is often thought of as a negative thing that you should avoid. In many jurisdictions, probate is complex, expensive, and completely unnecessary. In those situations, probate should be avoided. However, probate is not always a bad thing, especially in Washington.
Probate is the legal process to administer an Estate once someone has died. The Will is filed with the court, the court grants authority to the Executor (Personal Representative) to administer the Estate, creditors are paid, and assets are distributed. In Washington it’s a simple process, assuming the Estate Plan was set up well.
Medicaid’s rules are also very specific: you need a probate to protect assets for your spouse. It is through the probate process that the Testamentary Asset Protection Trust protects assets for your surviving spouse.
When should your Estate Planning documents be updated?
A good rule of thumb is to take a look at your Estate Planning documents every five years, or any time that there is a change in your circumstances. If, for example, there has been a death, remarriage, or some significant change in health in your family, it’s a good idea to revisit your Estate Plan to see if any changes are needed.
What advice would you give to someone considering getting or updating their Estate Plan?
There are many attorneys who will prepare an Estate Plan for you. As with anything, you really want to find a qualified professional. It’s like going to a doctor – if you are going to have your shoulder operated on, you find the best orthopedic shoulder surgeon. Your general practitioner wouldn’t even consider operating on you. So, when you’re looking for an attorney to prepare your Estate Plan, and if you have assets to protect, I definitely recommend an Elder Law attorney. Ask questions about the attorney’s qualifications – not just how long have they been in practice, but what area of law do they focus on? Do they have in-depth knowledge of Medicaid’s rules? Do they prepare Medicaid applications? What is their success rate with applications? Who would you talk with at the firm if the attorney isn’t available? Find an Elder Law attorney and a law firm that always will be there for you, understands your needs, and will help you accomplish your goals.
Lynn St. Louis is the founding attorney of Elder Law Group PLLC, a team of dedicated Elder Law Attorneys and legal professionals, serving clients and their families in the Inland Northwest with offices in Spokane and Tri-Cities. Elder Law Group prepares Asset Protection Estate Plans and helps obtain government benefits to pay for Long-Term Care to preserve assets and avoid nursing home impoverishment.
For more information, call us at 509.468.0551 or visit our website at www.ElderLawGroupWA.com.