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
An Elder Law Christmas Story
You know the classic song “Grandma got run over by a reindeer coming home from my house Christmas Eve.” A typical law school exam question would be: what legal issues arise from this tragedy? Here are the facts. Grandma was taken to the hospital. She is unconscious, bruised and has a broken hip. The doctor declares Grandma legally incompetent. What happens next depends on Grandma and Grandpa’s estate planning. What do you think happened?
Option 1
Grandma doesn’t have a health care proxy. Grandpa is told by the doctor that he can’t bring Grandma home because Grandpa doesn’t have the legal authority to make Grandma’s decisions. Instead, Grandpa has to go to the probate court to become Grandma’s legal guardian. This process is very time consuming and expensive. Even with an emergency temporary guardianship, Grandma isn’t able to come home for Christmas. It takes several months and cost thousands of dollars for Grandpa to finalize the guardianship.
Since Grandma doesn’t have a Durable Power of Attorney Grandpa can’t take money out of Grandma’s retirement account to pay for her care. He also can’t protect their home from a Medicaid lien if Grandma uses MassHealth to pay for care. Grandpa has to go back to the probate court to get appointed Grandma’s legal conservator. As conservator, Grandpa has to file a financial plan with the court explaining how he is going to spend Grandma’s money. He has to ask the court for permission to protect Grandma’s money from the high costs of long term care and for permission to protect his own home from a Medicaid lien. And, Grandpa had to buy a bond to insure that he doesn’t steal Grandma’s money! Overall the conservatorship and bond cost several thousand more dollars. Grandpa has spent over $5,000 in legal and court costs.
Coincidently Grandma’s medical bills are really high and Grandpa isn’t sure how to pay for care. He decides he has to sue Santa. Grandma wins a judgment of $21,000,000!! After, the attorney’s fee, Grandma has $14,000,000! Unfortunately, Grandma dies from the shock of winning so much money.
If only Grandma had put her money in a trust, then when she died, it would pass on to Grandpa in trust without any probate. Grandpa would get the money quickly and at minimal expense. The Trust could also shelter $5,000,000 from Federal Estate tax and $1,000,000 from Massachusetts Estate Tax. But Grandma didn’t even have a Will. So the $14,000,000 had to go through “probate” to get to Grandpa. Probate costs several thousand dollars more. It takes about a year before the estate is finally settled. When Grandpa dies the estate has to pay over $2,000,000 more in estate taxes because Grandma didn’t create and fund a tax shelter trust. (2011 exemption rates used).
OR
Option 2
Grandma has a Massachusetts Health Care Proxy so Grandpa is able to make her medical decisions. He gets her checked out of the hospital and brings her home for Christmas. Meanwhile, Heat Miser is trying to convince Grandpa to sue Santa. Grandpa doesn’t want to sue Santa but Grandma’s medical bills are really high and Grandpa isn’t sure how to pay for care. Using Grandma’s Durable Power of Attorney, Grandpa is able to take some money out of Grandma’s retirement account to pay for her care. He’s also able to use the Durable Power of Attorney to work with Surprenant & Beneski P.C. to protect his and Grandma’s assets and still get Grandma’s care paid for by MassHealth. Surprenant & Beneski, P.C. helps Grandma and Grandpa protect their home so that it won’t be lost to a Medicaid lien. Grandpa decides he doesn’t need to sue Santa.
I am happy to say that Grandma is alive, well and fully recovered. She and Grandpa have an estate plan. Santa has not been sued. Please make sure that you and your family are protected as well.
I wish you a Merry Christmas and a Happy New Year! I hope it is healthy, happy and prosperous for you and your loved ones. If we can help you with your estate planning, please call and make an appointment. In the next issue, look for my article titled The Three Little Pigs: A Medicaid Home.