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Do I need a Living Will?

Question:
Will it be too bad if I buy a pre-printed Living Will at Office Depot and fill it out to say I leave everything to my special needs 3 year old son versus having a an attorney write a testament/estate? What would be the difference? I’m really not wealthy, but I have some money invested in property for his future (less than 500K), and I don’t want to lose it to uncle Sam. Also, my husband has 3 grown up children from another marriage that are doing well and don’t need as much help, but I’m worried that they might change their mind once my husband and I are gone. Thank you so much for your valuable advise :)

Answer:
Yes. It would be extremely bad. To begin, a Living Will deals with whether or not you want to be kept alive by mechanical means if the sole purpose is to prevent the natural process of dying. It might be an over simplification of it, but a Living Will does not dispose of your property at your passing.

You can probably purchase a Last Will and Testament at Office Depot or online but I would not recommend it at all considering you have a special needs son and you have a blended family.

Your son is likely to need or qualify for SSI and/or Medicaid at some point in his life. This is if he is disabled to the point where he cannot work. Leaving him all of that money will cause him to lose whatever benefits he might be receiving at the time. Things good be done when he inherits, but it would be much easier to handle by preplanning.

You have options. You can avoid probate by the use of a revocable living trust. If you choose not to place your assets in trust, you can still leave them in trust for your son. In doing so, nothing will have to be done regarding your son’s benefits when you pass. You also have the ability to name a trustee and successor trustees to manage the assets. Whether or not you use a revocable living trust for yourself, you should name a guardian for your son should something happen to you and your husband.

There is little chance you would lose anything to uncle Sam, but you really should sit down with an elder law or estate planning attorney and speak to someone. It will cost you more than Office Depot or online forms, but you have way too much to risk to not see an attorney. Good luck.

Need to find out if my dad can use a living trust or similar trust to divert funds to qualify for medicaid waiver at clinic.
Question:

84 year old dad wants to sign up for clinic in Florida where he resides. Receives monthly pension of $802 & SS of $1,455= $2,257 which is $157 over the $ 2,100 income limit. Clinic covers all his medical/prescription needs as long as his monthly income qualifies as under $2,100.. Clinic suggested he open trust account to divert funds to get his monthly income under $2,100. They said money in trust will not be counted as income and that it could be used by him to pay for same everyday expenses he has now while both checks are in his checking account. Is this true? What type of trust would this be called? Any tax liabilities to the trustee (me) or the grantor (dad)? Thank you.

Answer:
You are asking about a qualified income trust or Miller Trust. The trust are authorized under federal and state statute. They are less commonly referred to D4(b) trust as it is section b of the federal statute that authorizes them. D4(a) & D4(c) trust are also special needs trust, however they are generally used when someone is over the asset/resource limit.

Florida does have an income cap for long term care medicaid and any waiver programs that have similar funding sources. The cap is however a soft cap. If someone is over income, the income over the cap must go into the trust. Be careful when you calculating income. Florida Medicaid uses gross income for purposes of this calculation. Verify that the pension of $802 is before taxes and any other deductions are made. The same things is true for his SSR payment. Verify if Part B & D are being deducted or not. It is rare, but also make sure no taxes are being withheld or that your father’s SSR benefit is not being reduced for some other reason. I’ve seen SSR benefits reduced by previous tax penalties.

It is very very important that you make this calculation correctly. Florida Medicaid is very strict about income trusts. If your calculations are off by even $1 and not enough income goes into the trust each month, your father would be ineligible for that month. There is no wiggle room or excuse. Benefits will be denied. I generally advise people to put more than what is required into the income trust until you have a letter from the state telling you precisely how much to deposit each month. There may be a few restrictions how how the funds can be used, such as donating or paying for things for other people.

I am not aware of any tax liabilities for you as trustee. I usually advise people to have the tax ID of the account be the Medicaid recipient. In this case, use your father’s SSN.

If your father ever has to go into a nursing home, he will need this trust as well. The difference is that when in the nursing home, Medicaid still counts the income when it determines patient responsibility, minus a few deductions.

I’ve attached a link to the Fact Sheet relating to Florida Medicaid programs. It has some additional information on income trust and other Medicaid programs. While it is not required, I would highly suggest that you find a qualified attorney to help you through this.

Is my 84yr old father-in-law being financially abused as a senior citizen?

Question:
He’s one of those guys that will give you the shirt off his back and doesn’t know how to say No. This family that he knows, is well aware of what a nice guy he is. His son’s have told their dad and the family to stop asking him for money and they continue to use him for his money and vehicle. The son’s don’t want to upset their dad but they have to stop this. The dad is giving more money out then getting every month and is spending what little money he has left. Can they action against the family that won’t leave him alone?

Answer:
It is hard question to answer without knowing all the facts. The key is does he have capacity to make these financial decisions. If you feel he lacks the capacity to make these decisions, then you should consider petitioning the court for guardianship. The court will send three professionals out to evaluate his condition. If two of those professionals say he has capacity, then the case will get dismissed. Who ever petitions will have to have an attorney. The proposed guardian will also need any attorney. The petitioner and proposed guardian can be the same person. The same attorney generally represents the petitioner and proposed guardian, but not always. The court will also appoint an attorney to represent your father-in-law (AIP - Alleged Incapacitated Person).

If the court agrees with the petitioner that your father-in-law lacks capacity, the guardian will be appointed and the AIP will no longer have the ability to give money to anyone. Financial rights will be given to the guardian under the supervision of the court.

Other options include contacting local law enforcement or the department of elder affairs. Unfortunately they either don’t do much or they agencies could completely take over the situation and lock out other caring family members from the process.

If you feel like taking action, I’d recommend talking to a guardianship attorney where your father-in-law lives and talking about the specifics of the case. The attorney may be able to have someone do a cursory evaluation of your father-in-law prior to going through the process of filing for guardianship.

My father is executor of my Uncle’s estate, probate is up Feb 2016.

Question:
Can he gift us each $14,000 before Dec 31 and again in Feb? My uncle HAD no debts. And left something to one charity, which has been paid.

Answer:
Your father should consult with the attorney handling the probate. Your father must follow what the Will says or if no Will, what the laws of intestacy say as far as distributions go. I’m not sure why you would want $14,000 distributed in 2015 and another distributed in 2016 unless you are receiving some sort of benefits that are dependent upon how much unearned income you receive. Inherited funds are not counted as earned income. The only income tax that could be reportable would be if the estate grew in value during the probate process.

Are you are referring to the amount that people can gift each year without it counting against their federal estate tax exemption? If so, that doesn’t apply after the death of the individual. The federal estate tax exemption is over $5,000,000 for an individual. An individual would have to die with greater than $5,000,000 in there taxable estate before they would have to worry about paying an estate tax.

Florida also does not have an inheritance tax. Some states do though. In those cases, if a beneficiary lives in a state with an inheritance tax, that beneficiary must pay a tax on what they receive. I don’t know that splitting the inheritance over two years would change the tax owed.

If your father still wishes to split the distributions over two years, he probably can do so. There is generally no prohibition from making partial distributions. Like I said at the beginning, your father should talk to the attorney handling the estate and discuss it with him. As long as all the parties are on good terms, the attorney would likely be willing to talk to you as well if you have particular concerns about your situation.

If I file for guardianship for mom does her estate pay for the attorney

Question:
By brother had POA of mom but was done fraudulently and he has also done other acts that fall under the elder abuse laws. I filed for guardianship which has temporarily voided his POA. Now court appointed attorney from mom and her estate pays for that as well as what comes with the capacity hearing. She suffers from Alzheimer and Dementia. Can or will her estate pay for attorney I use to obtain guardianship and any fees afterwards? Can attorney Bill her estate after guardian is chosen? Will an attorney take case as contingency and how would that work?

Answer:

Generally speaking, the AIP’s (alleged incapacitated person) (your mother) estate is responsible for the costs of the guardianship. That includes court appointed counsel and all associated filing fees, examining committee fees and other expenses. The attorney filing the guardianship is generally allowed to collect fees from AIP’s estate as well. There may be instances where the court doesn’t allow it, but generally it is allowable. As far as the attorney bringing the case goes, that is up to the individual attorney. Some may require a retainer, some may require a cost deposit, and some may take it completely on a contingency basis. You can generally get reimbursed for any attorney fees or expenses that you pay. Just remember, it may be a several months before you would be reimbursed. I’ve tried to give you an idea of how it is generally handled. You should discuss these questions with your attorney or the one that you select as things could differ between judges, jurisdictions and/or the unique circumstances of the case.

Would I lose my SSI/Medicaid benefits if I won $2000 on a lottery scratch off?

Question:
Hello. I have a hypothetical question. Say I live in Florida and am on SSI and receive Medicaid. I won a scratch off lottery ticket worth $2000 exactly. I’m wondering, would this screw me out of my SSI if claimed?

Answer:
You are most likely receiving Medicaid because you are getting SSI. If you get $1 of SSI, you still get to keep your Medicaid. The SSI limit in Florida is $773 a month. SSI payments are reduced by income, both earned and unearned. Gambling, lottery winnings and prizes are concerned unearned income. If you win $500, your SSI check should be reduced by $500. You would still have $223 of SSI so you would still be eligible for Medicaid. If you win $2,000, $2,000 is greater than $773, so you would have $0 SSI and technically not eligible for Medicaid. As long as you don’t maintain a bank balance above $2,000, you should then be eligible for SSI and Medicaid the next month.

If you win $10,000, the same thing applies except that if you carry a balance of more than $2,000 you would be ineligible for SSI and therefor would not receive Medicaid. You may have several options at this point. You could spend the money on non-countable items, you can put funds into a special needs trust, or save money and lose benefits. The major thing you can’t do, is give the money away. At this point, you would do well to consult with an elder law or special needs attorney. If you only win $10,000, a trust is not likely your best option, but sitting down with an attorney for a consult could save you a lot of hassle down the road.

How can Social Security defy a Court Order?

Question:
My ex-husband hide or liquidated his assets prior to the divorce in 2012. The Divorce Judge ordered that I was to receive $650 from his social security. I received the payments through January of 2015. I didn’t receive the check in February of 2015 and upon inquiry I learned he died in Dec of 2014. I’ve contacted probate attorneys for help and the they tell me I need a Social Security attorney. The social security attorneys don’t respond or tell me to contact my divorce attorney or a probate attorney. The lawyer who handled my divorce no longer practices.

Answer:
There are several issues to look at here. First, as one attorney mentioned, the Supremacy Clause gives the federal government the ability to defy state laws and orders of courts if there is conflict with federal laws or rules. The Social Security and Veteran’s Administration are two agency’s that I deal with all the time rely on this premise. For instance, neither Social Security recognize a guardian appointed by a state court and they do not recognize agents appointed under a power of attorney. Social Security instead allows for the appointment of a Representative Payee and the VA allows for the appointment of a VA Fiduciary. That being said, that may not be what is happening here.

What kind of Social Security benefits was your ex-husband receiving? There are three different types, Social Security Retirement, Supplemental Security Income, and Social Security Disability. SSR you get when you pay into the system and reach retirement age or elect to take early. SSI you get when you have not worked enough qualifying quarters, become disabled and have essentially no money. SSDI you get when you have worked enough quarters and become disabled prior to retirement age. Wealth is not an issue with SSDI.

There are no survivor benefits for recipients of SSI. There are some survivor benefits for divorced spouses of SSDI but they are fairly limited. If your ex was receiving SSR, you must generally have been married for 10 years in order to collect the surviving spouse benefit. I also believe you must be 60 or disabled yourself to collect on your ex-husband’s record.

If you are not eligible to receive survivor’s benefits from your ex-husband you are probably out of luck when it comes to the $650. Social Security has a lot of information on survivor’s benefits including divorced survivors. I added a link to some information on SSDI survivor benefits which is a little harder to find. There are always exceptions to the to rules so I would suggest going to your local Social Security office and speak to a representative. You may be eligible for the survivor’s benefit.

Who actually owns the music? Would it be considered an asset? What form would I need to file to prove his mother had control?

Question:
Rocky Lee was a fantastic musician well on his way to being a Rock Star. Unfortunately he passed away 3 studio sessions away from finishing his first CD. 19 years has passes since his death. Rock’s masters have sat in a shoe box in the bottom of his mother’s closet all this time. She has afforded me the opportunity to complete his CD. I called it Rocky’s Rock And Roll Resurrection. I have copy written it and posted it on You Tube and made it available on ITunes. I have filed a posthumous application to ASCAP for all royalties,( producer and writer) to be paid to his mother.

Answer:
Music is an intellectual property so it would pass as an asset of the estate. If no probate was opened and he was a resident of Florida at the time of his death, a summary administration would be appropriate. In Florida, creditors have a two year statute of limitations to file a claim in an estate. Generally summary administration is only available if the estate is less than $75,000 and there are no creditors. Once the two year period has run, creditors can no longer submit claims and there is no cap on the estate value. Creditors would have had a right to open an estate during the two year period if they wanted to.

Anyways, I can’t speak to the processes required to copyright or register the music, but an order by the court would allow the rightful owner to proceed. His mother should know if a probate was opened. If a probate was opened in the past and the intellectual property was not included, cases can generally be re-opened and a new court order can be entered proving ownership. If there are Rocky didn’t have any children and his father pre-deceased, his mother should be the only person to inherit. You would be wise to sit down with a probate attorney and get things straightened out before going further.

What does letter of dropping a party notice mean? house left to me in will.how long until i have to vacate?

Question:
My mother and father passed away.they have a reverse mortgage on there home.i received a letter of a dropping party notice.meaning now that my father has passed they dropped him as the last party.how long until house has to be vacated if im living there.how could.they left house to me in there will.my father just past in sept2015 i just got notice yesterday dec.10 2015.didnt know they had a reverse mortgage. do i have to leave right away ? or do i have until sept of next yr?.i would like to stay and figure this out.we are in Florida.

Answer:
To answer your first question, dropping a party usually refers means that the foreclosure attorney is dropping a person from the foreclosure action. Typically when a foreclosure case is filed, the attorneys will name everyone possible to make sure that no one can later claim that they are the rightful owners of the property. Some, but not all foreclosure attorneys will drop parties from the lawsuit when it is discovered they have no interest in the foreclosed property or if they waive their rights to judgement.

As long as your parents left the house to only you and/or other blood relatives, the home would be considered homestead property in Florida. What that means is that through the probate process, you would inherit the home free of any estate creditors, except of course for those secured by the home itself. The reverse mortgage is a secured creditor so the amount is still owed. Unless you personally agreed to be liable for the loan, you cannot be forced to repay the loan. What homestead does though is vest certain property rights in yourself at the moment your father (assuming he was the second to pass) died.
Your options at this point are to sell the property, keep the property and pay off the loan or refinance, or you can let the property go into foreclosure if they house is upside down.

If you choose to do nothing, the lender will have to foreclose on the property just as if it were any other property with an unpaid mortgage. So the length of time depends on how long the foreclosure action takes. If the home has a value greater than the mortgage, you would be wise to open a probate and sell the home in a reasonable amount of time. Although a bank may still start the foreclosure process, they may be willing to work with you if you are trying to sell the property. You probably don’t have to leave right away as you are in a way the owner of the house, but I don’t know if anyone can “guarantee” that you have until September of next year. Depending on the case load in your jurisdiction and firm handling the case, a foreclosure could move rather rapidly or it could take a couple years.

if your parents has a traditional mortgage on the home, you as their child would have a right to assume the mortgage and continue making payments without having to qualify for the loan.

You would be smart to talk to a probate attorney. If the home has no net value and there is nothing else to probate, they may refer you to a foreclosure or real estate to determine your rights to stay in the property for the length of time you wish. Sorry about the loss of your parents and good luck.

I’m confused between an executor and a lawyer.

Question:
What does an executor do and are their rates like a lawyer?

Answer:
An executor or personal representative is responsible for tracking down the assets and making sure that the deceased’s estate is administered as instructed in the Will or as the law requires.

The personal representative hires the attorney. If the named personal representative is an attorney they may hire themself as the attorney. When drafting an individual’s Will, the attorney should make it clear that the attorney can charge for being the PR and attorney.

Most probate attorneys will do the vast majority of the work in a probate case. The PR generally has the duty of signing paperwork as suggested by the attorney. There are however exceptions, such as when an estate owns rental property or an active business. In those cases a PR may be much more involved.

The statutory reasonable rates for attorneys and PRs is about a difference of .5%, with the PR getting paid the greater amount. The statutory rate is just a rate that can be charged that would be generally held reasonable in the face of an objection. An attorney and/or PR may charge more or less. Getting the consent of the beneficiaries is a good idea in all cases.

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Many of the blog posts come from questions that I've answered for people on AVVO or other legal help websites.

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