Category Archives: Estate Planning
Does A Will Avoid Probate?
No! Wills are your instructions to the probate court about what to do with your property. Property passing through a will goes through the probate process. The probate process is, essentially, a formal method to make sure that your bills are paid and that your beneficiaries receive the property that you are leaving to them.
So, what are the benefits of a will if it doesn’t avoid probate?
1 – A will allows you to control who receives your property after you die. Do you want to give all of your money to your spouse, your children, or only some of your children? Do you want to make sure that a disabled child, your parents or other dependent is taken care of? Is providing for your place of worship, school or charity important to you? A will can ensure that your wishes are followed. A will can also provide for contingent beneficiaries if a beneficiary unexpectedly predeceases you.
2 – Wills save your family money, as they can authorize many shortcuts that streamline the probate process. Wills can allow your executor to proceed without probate court hearings, waive the surety bond requirement, and allow the court to authorize independent administration. Without a will, your family may have to endure the long form of probate – supervised administration.
3 – A valid will is the only legal way to nominate a guardian for your minor child or children. If you have minor children, you know how important they are. Without a will, your opinion will not legally count. Neither the court nor your family members will have the benefit of your insight when determining who will care for your children and who will manage their money. You can also use your will to create a trust for your children’s education and support.
4 – Wills are the lowest cost planning option. They can be simple and yet very effective. Wills cost less than trusts or other sophisticated legal documents. A simple will, drafted by a licensed attorney, is the baseline protection that everyone with a child, home or bank account needs.
5 – Wills never expire during your lifetime, they are good for life. The will you create today has no expiration date. A valid and proper will can provide for the transfer of current assets as well as any property you may accumulate in the future. This is not to say that you should never review your will. Any time you have a major life change, you should make sure your will still reflects your wishes.
6 – Your will is a roadmap for the probate judge and your executor to follow. You direct how your property is handled and distributed. Without a will, your property will be distributed according to the intestate laws – these are the laws that provide the general default plan for people who die without a will. These default rules do not authorize any of the allowable shortcuts and may or may not fit your wishes regarding who receives your property.
7 – Your will shows your family that you care. A valid will makes everything easier, simpler and more streamlined. It eliminates hassle and gives your family the tool that they need in a crisis. The last thing a family wants to deal with during a time of mourning is a complicated and messy legal situation, especially one that could be avoided.
If you would like to learn more about what a will can do for you and how it is an integral part of an estate plan, contact us.
Medicare vs. Medicaid: What’s the difference?
The difference between Medicare and Medicaid is important, because Medicare doesn’t pay for nursing home care, except in limited short-term rehab situations. Medicaid is the only government program that will pay for long-term skilled residential care or nursing home care. Both programs offer medical care or health care reimbursement, but they serve different groups of people, and the implications for nursing home care, financial planning and elder law issues differ dramatically.
Medicare is similar to standard health insurance for people over 65 years old. If you are over 65, there is no asset or income test in order to qualify for Medicare. People who become disabled for Social Security purposes, will qualify for Medicare 2 years after the date of their disability, regardless of age. There are different plans and levels of coverage offered under Medicare with monthly premiums that vary accordingly. However, after Medicare provides its benefit, that is the end of the Medicare transaction. Medicare will not seek repayment for medical services that it covered for the Medicare participant.
Medicaid, now known in Missouri as MO HealthNet, is need-based, and there is an asset/income test to be eligible to receive benefits from the program. Medicaid is run by the Department of Social Services. This program also has an estate recovery mandate, which means that the State will seek to recover or collect the entire cost of benefits it has paid for a participant. This program is like a cab – you get in and the meter starts ticking. Once you qualify and Medicaid, or MO HealthNet, starts paying for your health care or nursing home fees, Medicaid will be keeping a running tab or bill for you. Medicaid keeps a record of everything they have paid out on your behalf, calculating the total sum of the medical bills/benefits paid by the State for your care.
After a Medicaid participant dies, the bill comes due – the State files a claim against the participant’s estate for reimbursement for everything it has paid out for the recipient during their lifetime. These are known as Medicaid’s estate recovery provisions; this recovery program is mandated by the federal Medicaid laws. There are many rules, strict procedures and exceptions regarding how and when the State can recover. Our lawyers know the rules, and we can help plan to avoid or fight the estate recovery. There are steps that can be taken to maximize what the family gets and minimize the State’s recovery. If you would like to learn more about planning for long term care, contact us today.
Will Your Estate be Subject to the “Death Tax”?
This year, the gift and estate tax exemptions are $5.12 million, which means you can transfer up to $5.12 million as gifts or after you pass away, tax free. At these current levels, relatively few people need to be concerned about the estate tax, also known as the “death tax.”
However, unless Congress takes action before the end of the year, the exemption will revert back to the lowest amount in a decade: $1 million. Additionally, anything over $1 million will be subject to a 55% top tax rate. Your home, bank accounts, retirement accounts, life insurance and all of your other assets are all included in your gross estate for estate tax purposes, regardless of whether the assets are held in trust, go through probate, or are jointly owned. That means many more people may be affected by the estate tax in 2013.
If you would like to discuss the estate tax and how you can minimize the taxes on your estate, please contact us. We can help you protect your assets.
MO HealthNet Getting a Boost
According to an AP article that can be found on Bloomberg Business Weekly, MO HealthNet (Medicaid) is getting a shot in the arm from the federal government starting this week. The State of Missouri has been approved for a federal program which could result in up to one hundred million dollars of additional funds being available to MO HealthNet. The enhanced funding comes from an increase in the rate at which the federal government will match state dollars allocated to in-home and community-based services provided by MO HealthNet. This funding will be available from July 1 through September 30, 2015.
If you are currently faced with making decisions regarding how to finance health care, whether you are a caregiver, or planning for yourself, we can advise you and help you make those tough decisions. We have experienced attorneys who can provide you with options in order to create a plan that works for you. If you would like to learn more about how we can help with these decisions, contact us via e-mail or telephone today.
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