Resources and Ideas

Whether an estate is large and complicated or of the most modest scale, everyone over 18 should have five basic estate planning documents:

1. A Will
2. Durable Financial Powers of Attorney
3. Health Care Powers of Attorney
4. An Advance Directive for Health Care Decision Making (Living Will)
5. A HIPAA Medical Records Release.

These documents are a gift to loved ones, offering guidance at a time when your loved ones are struggling to act in a way which is consistent with your beliefs and values.

Will

Most people know that a Will is a legal document which directs distribution of property after death. However, even if one has few assets, a will may be important. A will also identifies who will manage end of life affairs such as bill paying and distributing belongings in an orderly fashion. As with all advance planning documents, the will is a gift to those you love at a time when they may be grief-stricken and confused.

Durable Financial Power of Attorney

A Durable Power of Attorney appoints a person to manage your financial affairs at a time when you cannot. Whether you are physically compromised and just cannot make it to the bank, or suffer from cognitive impairment, someone else may have to step up to the plate and help with your affairs. Where no Durable Financial Power of Attorney has been executed prior to incapacity, guardianship proceedings may need to be instituted. Guardianship is far more expensive and will require the assistance of an attorney to navigate the legal requirements of court oversight.

Health Care Power of Attorney

A Health Care Power of Attorney names a person to make health care decisions when you are unable. This document can prevent confusion and emotionally difficult disagreements among those you love. Under Pennsylvania law, if no Health Care Powers of Attorney exist medical care providers will look, in descending order of priority:

• First, to a spouse and, if there are adult children who are not children of your spouse, then the spouse and children have equal say in medical treatment;
• Second, to an adult child;
• Third, to a parent;
• Fourth, to an adult brother or sister;
• Fifth, to an adult grandchild;
• Sixth, to an adult who has knowledge of the principal’s preferences and values, including, but not limited to, religious and moral beliefs, to assess how the principal would make health care decisions.

You should be aware that medical care providers may be hesitant to allow someone to make decisions for you without clear legal authorization. It is strongly recommended that you identify your decision maker in a Health Care Power of Attorney to avoid confusion at a critical time.

Advance Directive for Health Care Decision Making

Also known as a Living Will, this document allows you to control the kind of intrusive treatment you receive when you are either in a state of permanent unconsciousness or an “end-stage medical condition.” Living Wills have been much more widely used since the sad and widely-publicized Florida case of Terry Schiavo. She was in a state of permanent unconsciousness from 1990 to 2005, during which time her husband and parents fought a painful court battle over whether she should be kept alive with artificial feeding. Her husband believed that Terry would not want to be kept alive on a machine when there was no chance of recovery. Her parents argued that she was a devout Roman Catholic and it would violate her faith to withhold food. Many observers realized the value of a Living Will to preserve family harmony, and help loved ones to make decisions at a very difficult time.

Trusts  

Placing assets in a trust gives heirs immediate access to the assets of a decedent, keeps the details of an estate private and saves money because probate fees are not paid on trust assets. Trusts can be revocable living trusts – set up during the lifetime of the grantor with the grantor reserving the right to control the funds, or can be irrevocable where the grantor cannot control the funds. Other trusts are testamentary trusts, meaning that the trust is established in a will. Not everyone needs a trust, but trusts can be a useful planning tool under some circumstances for even those with modest estates.

Special Needs Trusts

For a disabled person dependent on public benefits, a special needs trust can create a better quality of life. Even a small gift or inheritance can jeopardize medical and cash benefits. Placing funds into a special needs trust will protect public benefits while allowing funds to be spent for the benefit of the beneficiary.

Seeking Guardianship. When an adult cannot adequately manage his or her financial, health, or safety needs, guardianship may be needed. A petition must be filed in Orphans Court, evidence must be presented at a hearing, and, if the judge grants the petition, then the appointed guardian, under supervision of the court, manages some or all of the affairs of the person under guardianship. There are two type of adult guardians. Guardians of the Person are responsible for the health and safety of a person under guardianship. Guardians of the Estate are responsible for the property owned by the person under guardianship.

Because guardianship is expensive and intrusive, it should always be a choice of last resort. Alternatives, such as representative payee, powers of attorney, and other options should be considered first.

Guardianship Alternatives. Sometimes guardianship is not necessary because other less restrictive options such as representative payee or powers of attorney are available. Before asking the court to appoint a guardian, experienced counsel can help to assess whether these options are appropriate.

Guardian representation and consultation. Guardians of the Person and Guardians of the Estate serve under the supervision of the court and must file annual reports.  Guardians of the Estate must obtain court permission before spending principal or savings, before selling real property, and before certain other actions. Following the court rules is important. Our office can help you to follow the rules and can represent you in Orphans Court if you encounter a problem.

How to avoid guardianship. While none of us expect to become incapacitated, it happens. A few basic documents can avoid guardianship, in most cases. Durable powers of attorney, advanced directives, and HIPAA medical records release forms are documents everyone should have no matter how old or how healthy.

Guardianship Services. In a limited number of cases, our office will serve as guardian. With an elder care coordinator, elder law attorney, and financial administrator, we provide personalized elder-centered guardianship services.

Diagnosis of a chronic illness or a health crisis presents a confusing maze of legal, health care, and financial questions which need to be addressed quickly. Long Term Care Planning addresses those issues in one place: our office. We can work with you and your family to create a plan, help you to get your affairs in order, and give you the confidence to know that you are making the best choices. Assistance from our office also frees up family members to focus on their loved one, instead of figuring out the long term care maze.

Typically, a Long Term Care Plan considers:

• Assessment of present health and safety
• How to find and pay for the health care you need now
• How to prepare for anticipated future health care needs
• Getting your legal affairs in order
• Getting your financial affairs in order
• Who will manage your health care if you cannot
• Who will manage your money and property if you cannot
• If you have dependents, how to best preserve assets and provide for them
• Public benefits’ appropriateness, including VA benefits, Medicaid, Waiver services, Medicaid Nursing Home grants, Dom Care, Medicare, Medicare Extra Help, PACE, Options, etc.

 

Services frequently used to implement a Long Term Care Plan include:

 

Legal Services

• Estate planning document drafting or updating
• Asset protection strategies: education and counseling
• Deeds
• Medicaid Nursing Home grant counseling: the “spend down,” income and asset requirements, protecting the community spouse from impoverishment
• Medicaid Nursing Home applications
• Veterans benefits counseling and applications
• Assisted living facility contract review
• Nursing home admissions document review
• Continuing care Retirement Community contract review
• Medicare counseling
• Hospice benefit counseling
• Advocacy to get the best possible care while preserving assets

 

Elder Care Coordination Services

• Health care planning: Assessment of present and future health care needs
• Resource identification: Where to get best quality services that match an individual’s values and preferences
• Coaching and support to get needed services in place
• Frequent communication with client, caregiver, family members, and other important care team members
• Assisted living or nursing home recommendations – if living at home no longer viable
• Transition planning and support if move becomes necessary
• Advocacy and support to get the best possible care and lighten the caregiver’s load
• Facilitated family meetings

Most people entering a nursing home will eventually receive a Medicaid nursing home grant to pay for care. Many seniors rely on Medicaid to pay for in-home services necessary for aging at home.

The Problem

According to the Pennsylvania Health Care Organization, the average cost of a private room in a nursing home in 2017 in Pennsylvania is $116,800. The cost varies across the state by region from $69,500 to $135,000. For a semi-private room, the median cost is $108,847, varying by region from $84,000 to 128,000. In-home aides cost about $25 per hour in the Philadelphia area. A care coordinator is often needed to supervise aides, which is an additional cost. Few people can afford those charges for very long.

Most nursing home residents eventually receive a Medicaid Nursing Home grant. Planning more than five years ahead is best. If a loved one is entering a nursing home now or in the near future, you should consult with an Elder Law attorney about the Medicaid spend down rules.

Qualifying for Medicaid

To qualify for Medical Assistance an applicant must meet both financial and medical criteria. An applicant’s assets must be below a set amount, which varies based on income. There is a five-year look back period which means that the Department of Human Services will review an applicant’s financial records for the last five years to make sure no property was transferred for less than fair market value. However, some assets are not counted and certain expenditures are allowed. In addition, there are special protective provisions for the spouse of a nursing home grant recipient. It’s complicated. Talking with an elder law attorney is recommended. Our office can help with a one-time consultation, an asset preservation plan, and/or with a Medicaid Nursing Home application.

Medicaid Estate Recovery

The estate of a deceased nursing home grant recipient must repay DHS for the amount spent on nursing home care. However, certain other expenses such as burial costs and estate administration fees are paid first. Under special circumstances, real property may be transferred to the decedent’s caregiver. The administrator of the decedent’s estate must notify the Department of Human Services that an estate has been opened and ask for the amount owed. DHS has a limited period to respond or forfeit the claim. Again, the rules are complicated. We can help you to understand the rules.

Probate. If the value of an estate is over $50,000 or the estate includes real estate, then an estate must be “opened” in order to distribute the property, unless all assets transfer by operation of law.  Whether or not there is a will, the Register of Wills oversees the probate process. The will dictates who will receive assets of the estate. If no will exists, then the Pennsylvania intestacy statute dictates who will receive estate assets. Our office wants to help you decide whether an estate needs to be opened and help estate executors and administrators to manage decedents’ estates.

Small Estates. Where an estate is valued at less than $50,000 and has no real estate, the estate may be better administered by filing a Petition to Settle a Small Estate. This expedited procedure avoids payment of probate fees and the distribution process is not overseen by the Register of Wills. Our office can help you to assess whether a Petition to Settle a Small Estate is advised and can represent you in these legal proceedings.

Will Contests. When beneficiaries disagree about asset distribution or estate administration, certain legal procedures are available to resolve the disagreement. Ordinarily, these matters are resolved at a hearing in front of the Register of Wills or an Orphans Court judge. Our office can help you to assess whether pursuing a will contest is advisable and represent you during the legal proceedings.