At our Rhode Island estate planning and elder law firm we help families and individuals preserve their assets and create their legacies. We assist our clients in a variety of areas. Whether it's estate planning using revocable trusts and wills, or asset protection and preserving your assets from nursing home expenses, we are there to help. Even if you have not planned ahead, we can help you preserve assets if a loved one has entered a nursing home with crisis planning. Another area of estate planning our firm assists clients with is special needs planning for those loved ones with disabilities.
Below we will outline some of the basics of these areas that you should be familiar with:
An estate plan is more than simply passing your property along to heirs. It is also how you prepare for the unpleasantries of life, including becoming incapacitated or being unable to make decisions on your own.
Your estate plan protects you and your beneficiaries. Without a will, the court will determine who will get your assets subject to probate, following the laws of your state. With a will, you determine who should receive your probated property, from members of your family to charities.
Your estate plan protects your children. Your will nominates a guardian who will care for your children if you die before they turn age 18, or, if you have a disabled child with special needs, who will care for them for the rest of their life. Without a will nominating a guardian, the court will make these decisions.
Your estate plan protects your family by preventing conflict. Your wishes are made clear in a will and in other estate planning documents. The more details, the better. No one can say they knew what you really wanted, because what you really wanted is documented and memorialized in your estate plan.
Create a plan for the different scenarios in your life. Who would you want to raise your children if you and your spouse die while children are minors or are unable to care for them because of illness or injury? How will your spouse pay the mortgage if you die unexpectedly?
Make a list of all accounts with designated beneficiaries. This typically includes life insurance, retirement plans and annuities. Any time you have a major life event like marriage, divorce, birth or death, these designations should be reviewed.
A Health Care Proxy is used to name a person who can make decisions about your healthcare if you cannot. A Living Will outlines the details for medical treatment you want or don’t want when you are near death.
Power of Attorney is a document giving someone else the power to take care of your finances at any point, if you can’t because of illness or incapacity. This avoids your family members having to go to court to obtain a guardianship, which takes time and is a costly proceeding.
Estate planning attorneys help by:
Elder law is the specialized field of law that addresses the diverse legal needs of aging populations. It focuses on the legal issues affecting senior citizens and their elderly parents. Lawyers who are versed in these issues are known as "elder law attorneys."
With a five year “look back” period, it is important for families to discuss pre-planning for asset protection when it comes to nursing home costs. Our office accomplishes this using our Medicaid Asset Protection Trust or our Medicaid Family Protection Trust. Given the time requirements, it is important to start this conversation sooner rather than later.
If planning is not done in advance and you find yourself with a loved one entering a nursing home, our office can still help with “crisis planning”. This almost always involves two things happening at once: the immediate need for additional healthcare and for a family’s assets to be protected. The end goal of crisis planning is to protect assets for both spouses, while ensuring that the sick spouse receives the care they need, as explained in the article “Crisis planning for couples focuses on asset protection” from The News-Enterprise.
Elder law attorneys have far too many stories of people who fail to plan, plan incorrectly or incompletely, or plan to fail by doing nothing at all, as described in the article “Elder Care: People in a pickle” from The Sentinel. Here’s a sad story.
A woman calls the elder law office because her husband fell at home—a common occurrence among the elderly. He was hospitalized and is now receiving rehabilitation in a nursing home. The treating physician recommends that the husband remain in the nursing home because he has significant limitations and his wife, who has her own medical issues, isn’t physically able to care for him.
The wife agrees. However, she has a host of challenges to overcome that were never addressed. The husband took care of all of the finances, for decades telling his wife not to worry. Now, she has no idea what their resources are. Can they afford to pay for his nursing home care? She doesn’t know. Nor does she have the authority to access their accounts, because there are accounts in her husband’s name only and she does not have access to them.
Her husband’s insistence of being the only one in control of their finances has put her in a terrible predicament. Without the estate planning documents to give her access to everything, including his own accounts, she can’t act. Can he now sign a Power of Attorney? Maybe—but maybe not, if it can be shown he lacks capacity.
Unexpected events happen, and putting off planning for them, or one spouse insisting “I’ve got this” when truly they don’t, takes a big impact on the future for spouses and family members. All of the decisions we make, or fail to make, can have major impacts on the future for our loved ones.
Other situations familiar to elder lawyers: a parent naming two children as co-agents for power of attorney. When she began showing symptoms of dementia, the two children disagreed on her care and ended up in court.
A father has guardianship for a disabled adult son. He promised the son he’d always be able to live in the family home. The father becomes ill and must move into a nursing home. Neither one is able to manage their own personal finances, and no financial or practical arrangements were made to fulfill the promise to the son.
Crisis planning for married couples requires a three-step process. First, does the spouse in crisis have the documents in place to allow another person to act on their behalf? This includes a financial power of attorney and a healthcare power of attorney.
Powers of Attorney need to be checked to ensure that they include specific powers needed to take action on the person’s behalf. These documents are “state specific,” meaning each state has laws determining what the POA must contain and how it must be prepared. Crisis planning requires a POA providing a broad set of powers, so agents can access and change documents like deeds, bank and investment accounts.
Once the documents and POAs are in hand, the next step is to get a detailed breakdown of the couple’s financial position and the cost of care. This becomes easier if the couple is organized and has information readily available for each income stream and asset.
Step three is to determine eligibility for programs and make the necessary applications. This will depend on the type of care needed. However, a typical crisis case is for nursing home care, which almost always means Medicaid eligibility. All income and assets are reported to Medicaid through a Resource Assessment request. The Medicaid office creates a breakdown of what will be counted against the applicant. The remaining amount is what must be “spent down” for a person to be eligible for Medicaid coverage.
Crisis planning is stressful but does not have to be hopeless. By working with an experienced Rhode Island estate planning attorney and providing documentation as quickly as possible, health care needs can be met without the well spouse being impoverished.
The services provided by a skilled nursing facility are very important. They are also very expensive. The person who arrives at an elder law office with a bill from a nursing home for $19,400—$646.66 per day—is often the same person who signed an electronic version of an admissions form without knowing what would happen.
This is one of many ways people are held responsible for loved ones’ nursing home bills, according to the recent article “Should you sign a nursing home admission agreement?” from The Bristol Press. The stress of having a loved one admitted to a nursing home is an overwhelming experience, usually taking place at the same time you’re managing all the details, just when someone from the nursing home very politely and usually firmly tells you “these papers” must be signed immediately.
It's important not to rush in this situation, because the agreement could contain illegal or misleading provisions. Try not to sign the agreement until after the resident has moved into the facility, when you may have more leverage. However, even if you have to sign the agreement before the resident moves in, have the agreement reviewed by an experienced elder law attorney and request that any illegal or unfair terms be deleted. Don’t take the nursing home’s word that they cannot do so.
Terms to pay close attention to:
Responsible Party. The nursing home may try to get you to sign the agreement as the “responsible party.” Don’t do it. Nursing homes are legally prohibited from requiring third parties to guarantee payment of nursing home bills. However, there are some who try to get family members to voluntarily agree.
Arbitration Provisions: Many nursing home agreements contain provisions stating that all disputes regarding the resident’s care will be decided through arbitration and remove the ability to take the nursing home to court. This is not an illegal provision, although many feel it should be. Most people do not know they cannot be required to sign an arbitration provision. Cross out any language regarding arbitration before signing the agreement.
Private Pay Requirement. It is illegal for the nursing home to require a Medicare or Medicaid recipient to pay the private rate for a period of time, nor may the nursing home require a resident to affirm whether they are not eligible for Medicare or Medicaid.
Eviction Procedures: It is illegal for a nursing home to evict a resident for any reason other than the facility cannot meet the resident’s needs, the resident’s health has improved, the resident is endangering other residents, the resident has not paid, or the nursing home is closing.
Speak with a Rhode Island Elder law attorney before facing the complexity of a nursing home admission agreement.
Rhode Island Special Needs Trusts - A special needs trust is a legal arrangement and fiduciary relationship that lets a physically or mentally disabled or chronically ill person get income without reducing their eligibility for the public assistance disability benefits provided by Social Security, Supplemental Security Income (SSI), or Medicaid.
This trust helps cover a disabled individual’s financial needs that aren’t covered by public assistance payments. The assets held in the trust don’t count toward public assistance eligibility.
The proceeds from this type of trust are typically used for medical expenses, caretaker expenses and transportation costs. The person who creates the trust (the grantor) names a trustee who will have control over the trust. The trustee will also oversee its management and the disbursement of funds.
The trust is funded with assets belonging to a person other than the beneficiary, and funds belonging to the beneficiary can’t be used to fund the trust. Funding may come from gifts, an inheritance and proceeds of life insurance policies.
Assets originally belonging to the disabled individual placed into the trust may be subject to Medicaid's repayment rules, but assets provided by third parties such as parents aren’t.
Special needs trusts are irrevocable and can’t be tapped by creditors via a lawsuit.
A special needs trust can have benefits for both parties. The beneficiary gets financial support without putting their eligibility for income-restricted programs or services in jeopardy.
The person or party that contributes to the trust is assured that the proceeds will go to expenses they stipulate.
The grantor or their legal representative must define the terms of the trust documents very carefully to ensure their validity and to confirm that the directives and purpose of the document are explicitly clear.