Fluffy the Cat & Cryonics

This news story about the revival of a fluffy the frozen cat makes me think about cryonics. https://www.foxnews.com/us/fluffy-the-cat-revived-after-found-nearly-frozen-to-death  The news story does not indicate that the cat was “legally dead” but it seems it must have been very close. I know from talking to people that most think that cryonics is a far fetched idea. However, stories like this give some hope that revival of cryonics patients will be possible in the future. If you look at all the relevant science and cutting edge technology in development, it is not really that hard to imagine a successful scenario in the future for cyronics.  For more information about cryonics See
https://www.cryonics.org/about-us/the-case-for-cryonics/
https://www.alcor.org/

Ohio Medicaid Miller Trust developments

In Montgomery Co. Ohio the local caseworkers are starting to give more scrutiny to review of Qualified Income Trusts (aka Miller Trusts) when for the annual Medicaid eligibility review. For more information on these trusts see http://www.michaelmillonig.com/new-developments/

Some are demanding copies of all statements for the last year to determine compliance with the transfer to the trust each month. My experience is that many clients are sloppy about getting this done each month. In general, it is a two step process each month: a) transfer all income received in the Medicaid recipient’s personal account to the QIT trust bank account; b) pay this same amount (i.e. patient liability) to the nursing home. If you don’t do this, Medicaid eligibility could be terminated.

Rebirth of the Federal Estate Tax

Recent statements from Democratic politicians have indicated the possible rebirth of the federal estate tax. We are currently in a very good environment for estate planning since the federal estate tax exemption is $11,400,000 (2019). The Ohio estate tax was repealed effective for persons passing away after 2012.

Bernie Sanders, Cory Booker, and Elizabeth Warren have all called for lowering the estate tax exemption. Elizabeth Warren has even proposed an annual wealth tax on estates during lifetime. See https://www.vox.com/2019/2/4/18210370/warren-wealth-tax-poll
https://www.foxbusiness.com/politics/bernie-sanders-to-propose-significant-wealth-tax-expansion
https://www.nationalreview.com/2018/10/cory-booker-terrible-tax-proposal/

This rhetoric is probably not sufficient to motivate most of us to engage in any type of substantial estate tax planning to reduce estate taxes. It’s probably too early for that. However, inherent in the nature of any type of planning is that you must plan ahead prior to the occurrence of the event or change in the law. If you wait too long, once a change has occurred it may be too late too engage in some beneficial estate planning. We’ll have to keep an eye on Congress and the next election to see what will happen concerning estate tax developments.

Avoiding Will Contests (and trusts too)

If an estate plan omits one of the children or other next of kin who would normally inherit, there is an incentive and possibility they may file a Will contest action or other litigation. Ohio law does require an official notice of the filing of the Will in Probate Court to all of the next of kin even if they are not named in the Will as a beneficiary. A Will contest or other litigation will delay the probate of the estate for years, incur large bills for attorney fees and court costs, and create acrimony among the family. There are legal procedures that can be taken to avoid these possible problems and assure that the intention expressed in the Will is carried out.

One of the planning options that is provided under Ohio law is to file for a Judicial Declaration of the Validity of your Will by the Probate Court. Most states do not have this type of law. This involves filing a petition in court, a notice sent to all the legal next of kin and appearance at a court hearing. At the hearing, the person who signed the will testifies before the judge who can then declare the will to be valid. The effect of this court decree is that all the persons named in the will and others not named who were notified of the court action are legally prohibited from contesting the will. The disadvantage of this option is that it does incur some additional legal fees and you have to notify the persons who will not be inheriting under the will. However, the result is well worth avoiding expensive and protracted litigation in the estate.

A new development in this area is that a similar Ohio law has been enacted, effective in March of 2019, to provide for the same judicial procedure for a trust. Many persons use trusts to avoid probate and for many other estate planning objectives. For a fuller discussion of trusts see  http://www.michaelmillonig.com/practice-areas/trusts/

Elder Law Anniversary

I just finished celebrating my 20th year of certification as an elder law specialist by the National Elder Law Foundation. The time has gone by quickly. It seems like just yesterday that I joined National Academy of Elder Law Attorneys in 1991. My membership in NAELA came to define my practice and mission everyday for my clients. If you ever need a referral to an elder law attorney anywhere in the United States, I suggest you search for an attorney at the National Elder Law Foundation website. This website will list all the elder law attorneys who are certified specialists in elder law. http://www.nelf.org/

Senior health care costs misconceptions

This recent article has a good short summary about health care costs for the elderly dealing with Medicare, Medicaid and long term care.

https://www.nytimes.com/2018/12/24/upshot/misconceptions-about-health-costs-when-youre-older.html?rref=collection%2Ftimestopic%2FElderly&action=click&contentCollection=timestopics&region=stream&module=stream_unit&version=search&contentPlacement=2&pgtype=collection

Ohio Medicaid 2019 figures

Ohio just released the 2019 inflation adjusted figures for Medicaid eligibility determinations. Some of the more important numbers are as follows:

CSRA maximum $126,420
CSRA minimum $ 25,282
Special income level $2313/mo
Income standard $2313/mo.
(for QIT/Miller trusts)
MMMNA cap $3161/mo.

For a fuller explanation of the above, go to http://www.michaelmillonig.com/ohio-medicaid/

VA law transfer rule changes

The seminar described below on November 7 will present the recent changes to VA law affecting eligibility for the Aid & Attendance benefit. The most dramatic change is the enactment of a VA rule penalizing transfers. The transfer penalty period is similar to the Medicaid transfer rule but with some differences. This and other VA changes went into effect on 10/18/18.

For more information or to request a registration form, please send an email to sbmmlaw@swohio.twcbc.com

It’s Now Harder for Veterans to Qualify for Long-Term Care Benefits

The Department of Veterans Affairs (VA) has finalized new rules that make it more difficult to qualify for long-term care benefits. The rules establish an asset limit, a look-back period, and asset transfer penalties for claimants applying for VA pension benefits that require a showing of financial need. The principal such benefit for those needing long-term care is Aid and Attendance.

The VA offers Aid and Attendance to low-income veterans (or their spouses) who are in nursing homes or who need help at home with everyday tasks like dressing or bathing. Aid and Attendance provides money to those who need assistance.

Currently, to be eligible for Aid and Attendance a veteran (or the veteran’s surviving spouse) must meet certain income and asset limits. The asset limits aren’t specified, but $80,000 is the amount usually used. However, unlike with the Medicaid program, there historically have been no penalties if an applicant divests him- or herself of assets before applying. That is, before now you could transfer assets over the VA’s limit before applying for benefits and the transfers would not affect eligibility.

Not so anymore. The new regulations set a net worth limit of $123,600, which is the current maximum amount of assets (in 2018) that a Medicaid applicant’s spouse is allowed to retain. But in the case of the VA, this number will include both the applicant’s assets and income. It will be indexed to inflation in the same way that Social Security increases. An applicant’s house (up to a two-acre lot) will not count as an asset even if the applicant is currently living in a nursing home. Applicants will also be able to deduct medical expenses — now including payments to assisted living facilities, as a result of the new rules — from their income.

The regulations also establish a three-year look-back provision. Applicants will have to disclose all financial transactions they were involved in for three years before the application. Applicants who transferred assets to put themselves below the net worth limit within three years of applying for benefits will be subject to a penalty period that can last as long as five years. This penalty is a period of time during which the person who transferred assets is not eligible for VA benefits. There are exceptions to the penalty period for fraudulent transfers and for transfers to a trust for a child who is unable to “self-support.”

Under the new rules, the VA will determine a penalty period in months by dividing the amount transferred that would have put the applicant over the net worth limit by the maximum annual pension rate (MAPR) for a veteran with one dependent in need of aid and attendance. For example, assume the net worth limit is $123,600 and an applicant has a net worth of $115,000. The applicant transferred $30,000 to a friend during the look-back period. If the applicant had not transferred the $30,000, his net worth would have been $145,000, which exceeds the net worth limit by $21,400. The penalty period will be calculated based on $21,400, the amount the applicant transferred that put his assets over the net worth limit (145,000-123,600).

The new rules go into effect on October 18, 2018. The VA will disregard asset transfers made before that date. Applicants may still have time to get through the process before the rules are in place.

Veterans or their spouses who think they may be affected by the new rules should contact their attorney immediately. 

To read the new regulations, click here.

Aretha Franklin’s Lack of a Will Could Cause Huge Problems

According to court documents, legendary singer Aretha Franklin did not have a will when she died, opening up her estate to public scrutiny and potential problems. Failing to create an estate plan can cause lots of headaches for heirs, in addition to unnecessary costs.

Franklin, who died August 16, 2018, at age 76, left behind four sons, but no guidance on how to distribute her reported $80 million estate. According to The New York Times, her sons filed paperwork in Oakland County, Michigan, indicating that she died intestate — that is, without a will. The sons nominated Franklin’s niece to serve as the personal representative of the estate. When someone dies without a will, the estate is divided according to state law. Under Michigan law, an unmarried decedent's estate is distributed to his or her children. (Franklin had been married twice but long since divorced.)

Even if the “Queen of Soul” had wanted her estate to go solely to her children, by not having a will or trust, her estate will have to go through a long public probate process, which will likely cost her estate considerable money. If Franklin, who was quite private in life, had created an estate plan that included a will and a trust, she could have avoided probate and kept the details of her financial circumstances private.  Her eldest son reportedly has special needs, which presents other potential complications.  In addition, by not having a will, Franklin has opened her estate up to potential challenges that could drag out the probate process. Without a will to clearly state the decedent's intent, litigation resulting from family conflicts often eats into estates.

Also, because Franklin did not plan her estate, the estate will be subject to unnecessary estate taxation. Although she may not have been able to avoid estate tax entirely, there are steps she could have taken to reduce the amount her estate will have to pay.

“I was after her for a number of years to do a trust,” attorney Don Wilson, who represented Franklin in entertainment matters for the past 28 years, told the Detroit Free Press. “It would have expedited things and kept them out of probate, and kept things private.”

Estate planning is important even if you don't have Aretha Franklin's assets. It allows you, while you are still living, to ensure that your property will go to the people you want, in the way you want, and when you want. It permits you to save as much as possible on taxes, court costs, and attorneys' fees; and it affords the comfort that your loved ones can mourn your loss without being simultaneously burdened with unnecessary red tape and financial confusion.

Contact your attorney to begin working on your estate plan now.