June, 2016, Friedman Law

What Questions will your Estate Planning Attorney Ask?

Posted on: June 17th, 2016 by Mark R. Friedman

We try to make our clients as comfortable as possible (just ask our mascot dog, Pebbles), but nonetheless, meeting an attorney for the first time can be intimidating. Often, people don’t know what to expect. So, in this post, I’ll set forth a few questions that we might ask you if you’re interested in working with us to create an estate plan. I previously did a post like this for elder law / Medicaid planning. So, without further ado, here are questions we typically ask our estate planning clients:

Your Family
Are you married? Is it a first marriage for you? For your spouse? Do you have children? Do you have any children from a prior marriage? Does your spouse have any children from a prior marriage? Are your children married? Do they have children? Are you on good terms with all of your children? Is your spouse? Do your children get along with each other?

Your Wishes
After you die, how do you want your property distributed? To whom should it go? If they aren’t around to receive your property, is there anyone else you would want instead? What are your wishes regarding medical care? Artificial life support?

Agents and Fiduciaries
Who should manage your estate after you die? If you have minor or disabled children, who do you want to be their guardian? If you were unconscious or unable to make decisions, who do you want to make medical decisions for you? Is there anyone you want to make financial decisions for you?

Pre-Existing Documents
Have you ever made a will in the past? How about a healthcare directive (aka living will) or power of attorney? How long ago? Were the documents drafted by an attorney? Have your wishes changed since then? (If possible, please bring any pre-existing documents when you meet with us)

Inheritance Issues
Is there a reason why any of your heirs (spouse, children, grandchildren or anyone else who might inherit from your estate) shouldn’t get his or her inheritance outright? Are any of your heirs disabled? Do any have issues with alcohol, drugs or gambling? Are any facing a major liability, like a lawsuit or divorce?

Estate and Tax Issues
What is the total value of your assets? Do you own property jointly with anyone else? Do any of your assets have a named beneficiary (e.g., retirement accounts and life insurance), to whom the asset goes automatically when you die? If so, does that affect how you want to distribute your other property? Do you have any debts?

There are many more specific questions we’ll ask in particular situations, but these are some basics to give you a sense of what you should think about when working with an attorney on your estate plan. If you’re interested in creating a will, power of attorney or healthcare directive, or other estate planning, please feel free to call or email FriedmanLaw today.

NJ Medicaid reduces penalty divisor

Posted on: June 8th, 2016 by Mark R. Friedman

New Jersey Medicaid has reduced the penalty divisor for 2016, from $332.59 / day to $332.50 / day.

Let’s back up a bit. If you apply for long term care Medicaid, to pay for long term care in a nursing home, assisted living facility or at home with aides, you have to disclose to Medicaid any gifts that were made in the past five years. You also have to submit five years worth of records for any financial accounts you owned during that time. Medicaid will review the records to verify whether any gifts were made.

If you have made gifts in the past five years, Medicaid will assign a gift penalty. Medicaid uses the penalty divisor to determine the penalty. You lose Medicaid for a period of time, based on the size of the gift. If the penalty divisor is $332.50, you lose one day of Medicaid for every $332.50 you give away (roughly one month lost for every $10,000 gifted). During the penalty period, Medicaid will not pay for your long term care, and you’ll have to pay for it yourself. The penalty period doesn’t begin until you’re otherwise eligible for Medicaid (you’re medically eligible, your Resources are below $2,000, etc.) and you’ve applied.

The penalty divisor is based on the cost of nursing home care in New Jersey. The cost usually increases, so Medicaid usually increases the penalty divisor. When Medicaid decreases the divisor, that’s bad for applicants, as it means gift penalty periods will be longer.

There are a few different theories on why the penalty divisor was reduced this year. One is that Medicaid has switched from a raw average calculation to a weighted average calculation. Another is that Medicaid is more accurately counting the cost of care, figuring in less expensive nursing homes from outside New Jersey’s urban core.

Whatever the answer is, we’ll continue to help clients preserve live savings within their families rather than losing it all to long term care costs.

Archive for June, 2016

What Questions will your Estate Planning Attorney Ask?

NJ Medicaid reduces penalty divisor