October 2021 Newsletter
Posted on October, 2021
Dear Clients and Friends,
In the office this month.
All the following statement are false. I hear at least 2 or 3 of these from clients every week.
False: Assets in a Revocable Living Trust are protected from the spenddown to $2,000.
False: My IRA or 401k are protected from the spenddown to $2,000.
False: I can give away my money to get down to $2,000 and immediately file for Medicaid.
False: I can give away $15,000 to each family member and immediately file for Medicaid.
False: Once I am in a facility, it is too late to file for Medicaid.
False: If my spouse goes on Medicaid, all my social security and pension will go to pay their bill.
Remember, all the prior statement are false.
What is true?
True: Assets that are exempt from the spenddown include one house, one car, and a prepaid funeral. If you are married, your spouse that does not go to the nursing home also gets to keep half of the non-exempt assets, up to $130,000.
True: Non-exempt assets that must be spent down to $2,000 include assets in a revocable living trust and in retirement accounts such as IRAs and 401ks.
True: You can file for Medicaid after you move into the facility.
True: When you file for Medicaid, you must disclose all assets you have given away in the preceding 5 years. You will be penalized for those gifts.
True: If your spouse goes into a facility and receives Medicaid, you keep your income and some of your spouse’s.
True: You can give up to $15,000 per year to any family member and not have to pay any gift tax. However, if you file for Medicaid within 5 years of the gift, you will be penalized by Medicaid for making the gift.
I read a lot of documents prepared by other attorneys including Healthcare Powers of Attorney.
Sometimes the Healthcare Power of Attorney will have a provision that states the client is not to be placed on medical devices in general or, specifically, never put on a ventilator.
Most all of the Healthcare Powers of Attorney that I have prepared allow a ventilator. However, if the patient is in the dying process with no hope of recovery, and a medical device such as a ventilator is the only thing keeping the patient alive day to day, then it is ok to remove the ventilator from the patient.
The difference is that sometimes a ventilator can save a life. We have often seen on the tv news that a covid patient is leaving the hospital after being on a ventilator for days or weeks.
I also have a personal story to tell. In May 2020, my wife had completed 29 radiation treatments for her cancer. She became ill and the hospital told her she needed her gall bladder removed. After surgery, while in recovery, she was not coming out from under the anesthetic. After 4 hours post-surgery, her oxygen levels fell from the 90’s to the 30’s. Fearing that she would die with oxygen levels that low, she was put on a ventilator. About 3 hours later, she regained consciousness, oxygen levels returned to normal and the ventilator was removed. Without the ventilator, she likely would not have survived. If her Healthcare Power of Attorney had said “never put me on a ventilator”, she might not have survived.
I recommend you “never say never” in your medical instructions. Leave room for your Patient Advocate to make the best decision for you at this critical time.
Social Security Cost of Living Adjustment
If you are one of the 70 million Americans who collect Social Security benefits, you will be pleased to learn that your payments for 2022 will increase by 5.9% next year. This is called the “Cost of Living Adjustment” (COLA).
The COLA is based upon the Consumer Price Index (CPI) for Urban Wage Earners and Clerical Workers, a measure of the monthly price change in goods such as food, energy and medical care.
The COLA for 2021 was 1.3%. The COLA for the last 10 years averages 1.7%, ranging from no increase in 2015 and 3.6% in 2011.
Follow up on Ladybird Deeds
In the September newsletter, I wrote about a Minnesota Court case on ladybird deeds. In that case, there was a ladybird deed in place when the owner died. A few days later, the house burned down. The insurance company refused to pay the new owner named in the ladybird deed because the new owner was not named as an insured.
This decision became the law in Minnesota but is not now law in Michigan. However, our ladybird deed statutes are similar and a Michigan court might make the same ruling.
The court’s decision means that, if you have a ladybird deed, you should add as an additional insured on your homeowner’s insurance policy whoever you named to take ownership on your death.
However, I recently heard from some of you that your insurance company is saying that you cannot name as an additional insured on your policy a beneficiary who is not a current owner. The rationale is that the beneficiary does not have an “insurable interest” until you die.
This will take further investigation. Let me know what your insurance company tells you if you attempt to add your beneficiary to your policy.
Please see our website, www.gfalawfirm.com to view our updated list of seminar dates and times. Sometimes our handouts from previous seminars might not be up to date on changes or cancellations. This website has the most current information.
We are so pleased to help you with your estate planning needs. The best way to receive new clients is through referrals from you. In addition, there are people out there searching for someone to help them. They feel comfortable calling an attorney that has a 5-star rating and details of client experiences. If I may, I will continue to ask all of my clients who have not done so yet, to provide a Google Review for me. Not only will it give me more positive reviews, it may help someone out, that doesn’t have a referral available, find an excellent resource...me! It is easy to do and takes very little time.
Simply type “Gary Allen attorney” and hopefully my information should pop up (if it doesn’t, call me).
On the right of your screen are gold stars and the number of Google reviews I have. Click on the google reviews and it will take you to my reviews.
Then in the top right corner it says in blue “Write a review”. Click on that to provide a review. (It may have you sign into your Google account if you haven’t already. Thank you!)
Please feel free to share this newsletter with your friends and family.
Very truly yours,