Michelle D. Beneski, Esq. is a partner in the Surprenant & Beneski, P.C. located in New Bedford, Massachusetts. The firm concentrates on Elder Law and Estate Planning Issues.
She is a frequent speaker and author on estate planning topics.
Michelle is a graduate of Pepperdine University School of Law, Cum Laude and holds L.L.M. in Taxation from the University of Florida, College of Law. She is a member of the National Academy of Elder Law Attorneys, Wealth Counsel and the Bristol County Estate Planning Council.
We meet with our clients for Free every three years to ensure the documents still work for them. Surprenant & Beneski, P.C. charges $500 for an initial estate planning consultation. However, this consultation fee will be waived if you reference this article.
If you would like more information on Medicaid planning, call for our Free Consumers Guide to Medicaid Planning or our free report 25 Ways You Can Mess Up Your Estate Plan or to make an appointment for a consultation, call our toll free number (800)929-0491 for a recorded message or call our office at 508-994-5200.
Feel free to contact Michelle at 508-994-5200 or visit www.myfamilyestateplanning.com
Mary is a widow, age 75. She has one daughter Sally. Mary lives alone in her home. She has about $650,000 in savings. Mary hasn’t done any estate planning.
Mary is found wandering outside during a snow storm in her nightgown and robe with slippers on her feet. The neighbors call Sally and send Mary to the emergency room where Sally meets them. The doctor indicates that Mary is unable to make her own decisions. Mary is sent to the Psychiatric Ward at St. Luke’s Hospital for an evaluation. Sally doesn’t have the authority to take Mary home. Mary has to stay in the hospital until Sally gets that authority. It took several days to get a temporary guardianship approved.
Additionally, Mary is going to need care at home. Sally doesn’t know how she is going to pay for this. She is a joint owner on Mary’s checking account but it only has about $3,000 in it. Sally searches Mary’s home and finds the bank statements for a money market account and a large IRA account but Sally can not get any money from these accounts to pay Mary’s expenses.
Sally must go to the Bristol County Probate Court and become appointed as Mary’s guardian and conservator. This is a 3 month process to complete costing about $2,500 to $3,000 in legal fees and court costs plus the costs of a bond which on $650,000 is probably about $3,000. The total costs were over $5,000. Through this process Sally is given the authority to make Mary’s health and financial decisions but all of Sally’s care of Mary is overseen by the Probate Court. Sally must regularly report to the court on Mary’s living condition, medication, physical well being and finances.
As guardian, Sally brings Mary home and arranges for home care for Mary. As conservator she can access Mary’s savings to pay for this care. After homecare, assisted living care and then nursing home care, Mary runs out of money after about 4 ½ years and she applies for Medicaid/MassHealth to pay for her nursing home care.
Because Mary is under Conservatorship, Sally must ask the court’s permission to do any Medicaid planning to protect Mary’s assets. The Court is looking at what is in the best interest of Mary. Sally needs to prove that Mary would have wanted to protect some of this money rather than spend it all on her own care. But the Court is likely to rule that it is in Mary’s best interest to use all of her savings to pay for her nursing home care.
Mary’s home hasn’t been sold but there is a lien on the home. When the home eventually sells, this lien will need to be paid back.
This is exactly what most parents we speak to want to avoid.
Did this have to happen? How would Mary’s situation be different if Mary had the 5 basic estate planning documents?
• Durable Power of Attorney – authority to make financial and legal decisions for someone else
• Health Care Proxy – authority to make medical decisions for someone else
• Living Will – provides guidance as to what kinds of medical decisions you want the agent to make
• HIPAA Release – allows access to your medical records
• Last Will and Testament – states where your property should go at your death
Sally could care for Mary privately without any court interference. She could have taken her home from the hospital sooner and arranged for home care easily. As health care agent, Sally could decide where Mary should live, what medication she should take, and manage Mary’s finances for her. This would have saved Mary thousands of dollars and Sally hours of worry.