EdLoweLaw OP t1_jd4sdhi wrote
Reply to comment by 80088008135 in IAMA Connecticut estate planning and trusts attorney. AMA about estate planning in our great state! by EdLoweLaw
Your parents certainly should have an estate plan (at least wills, POAs, and healthcare documents) and their planning may or may not involve a trust depending on what they’re trying to accomplish. Many folks use revocable trusts to help avoid the probate process, but in the context of Medicaid planning it works a little differently.
The idea with Medicaid preplanning is to not have any assets available to spend on your nursing home stay. If you have no money, the state’s Medicaid program (Husky C) will pay your nursing home bill for you. When you apply, the state will look back 5 years to see what type of transfers you made, and if you made an uncompensated transfer or gift within 5 years you’re penalized for the value of that gift.
Long term care insurance is an option, but the premiums are very high. I, as an attorney, would be looking at getting assets out of your parents’ names now while they’re healthy so that hopefully at least 5 years goes by before they need to go into a nursing home.
“But Ed, I don’t want to give everything away!” I agree! That’s why we’d create a Medicaid Trust to hold your assets. It’s an IRREVOCABLE trust, but you still set the rules of the trust. You can be the trustee (the person who manages and distributes assets), be able to live in and use real estate for your life, and even change the beneficiaries of the trust…but not to yourself. That cash and future real estate belonging to the trust is being managed for the beneficiaries, like your children, and not yourself, so any distributions you make must first go to the children. They of course are free to do whatever they want with it, but the state can’t make them use it on your care as long as the 5 years has gone by.
As a result, you get to keep assets in the family, still manage those assets, live in and use your real estate, and still control who ultimately gets everything while also starting the 5 year process!
Your parents should at least have a consultation with an estate planning attorney to see what’s right for them. Some of what I described here may be what they’re looking for, or it might be completely inappropriate for them. Everyone needs something, but it’s impossible to tell without having a heart-to-heart with that much admired and trusted family advisor: the estate planning attorney.
80088008135 t1_jd4tjua wrote
Thanks. They do have long term care insurance (a very old plan- I’ve heard the newer ones are mostly useless.) I’m hoping to get them in with an attorney soon, as my years of nagging them to do so has finally worn them down and I am slowly taking over their healthcare needs so POA etc. shouldn’t be an issue.
My main goal is to help them age in place as long as they’re able (their preference) so even if one passes long before the other they’d be able to be supported in their home.
EdLoweLaw OP t1_jd4upxc wrote
Love that plan! People can be very hesitant to talk about their death and incapacity, especially once they’re older and set in their ways. It’s good if you to bring it up, and double good of you to be available to care for them! Keeping them in home and independent should always be goal #1.
Human_Skirt6528 t1_jd7c6ul wrote
If they have vehicles or investments, make sure all of their registrations, titles, and investment certificates are safe and easily accessible. Vehicles are useless without a title and I spent a year tracking one down because the original wasn't found. DMV has no right to provide you one until the car is in your name, but you can't put it in your name without the title. Couldn't ask the owner, for obvious reasons.
If they have shares, you need the original certificates because it costs hundreds just to make new ones and you can't sell (or transfer) their stocks without them. This part alone added months to probate for me and its the last step.
Learned all this the hard way.
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