December 2022 Newsletter
December 2022 Issue
What Are the Most Common Issues That Prevent People From Completing Their Estate Plan?
All too often people think they just don’t have time or that an estate plan is for when they got older. As important as it is, an estate plan can be one of those things that’s just too easy to put off or save for a rainy day. We often see,
- Procrastination: People procrastinate because they are insecure about the entire estate planning process or superstitious that if they create their plan, they will die immediately.
- Too Little Too Late and Lack of Competency: People “decide” that their Mom or Dad “needs a will.” Yet, they waited too long and now Mom or Dad no longer possess the competency to understand what the documents they are signing.
- People believe an estate plan is only planning for what happens after death. The fact is that an estate plan is about planning for life! Later life is just as important as today, and everyone needs to plan at least for what happens as they age.
- Incurring Tax Consequences: Few people realize there are tax consequences for failing to plan for assets will be distributed after their death. Speaking with an experienced attorney can help you plan ahead and learn how to avoid these consequences.
At the end of the day, estate planning can help you accomplish a variety of goals. Here’s what you can do to get started today:
1. Talk with your family or significant other about what you think you want to happen as you age;
2. Gather materials such as financial statements (or even tax returns) and lists of possessions; and
3. Call an experienced attorney, such as Susana Lannik at Lannik Law, to help guide you through the process.
Top Four Medicaid Myths
The Medicaid system is difficult and confusing to navigate alone, and too many people fall victim to myths every year. For example, most people believe they must become totally impoverished before they or a loved one can go onto MassHealth (Medicaid). The truth is way less dire then one might believe. But you need an expert to help guide you through the process.
The consequences of believing the myths could be fatal to a MassHealth application. Here are the top four myths most people believe apply to Medicaid.
Myth #1: You have to use everything you have to get down to $2,000 to go onto Medicaid.
This is not the case if you have your assets set into a proper plan.
Myth #2: If I only have $25,000 and a house there will be not estate recovery for Medicaid.
This is not exactly correct. The $25,000 applies to your Probate Estate. MassHealth will not make a claim for amounts under $25,000. But your home can count as an asset and a claim may be made against it by means of a lien on the property.
Myth #3: “I have Medicare, so I’m all set and don’t need to worry about my long -term care.”
This is the one most damaging myth because it is not true and causes people to procrastinate searching for the truth. Only private pay or Medicaid pay for Custodial long-term care. This erroneous belief leads to a needless expenditure of asset. Instead what you need is a proper Medicaid application.
Myth #4: I can give away $16,000 to anyone I want because the IRS allows it without a gift tax, and Medicaid (MassHealth) will not count this as a transfer.
We at Lannik Law hear this almost every week, and it is not true. If you give even your children or grandchildren a gift of $16,000, you will be disqualified from MassHealth!
Additionally, it is true that financial transactions made during the 5 years prior to a Medicaid Application may be scrutinized. But there are certain transactions that can occur within that time frame that will not affect eligibility for MassHealth. That The problem is most people don’t know what they are and fail to plan ahead in that 5-year time period.
If you or someone you know needs help understanding and acting upon the Medicaid rules, feel free to contact expert attorney Susana Lannik of Lannik Law. Please call 617-431-2669 so we can answer your questions and propose the best solutions for your individual situation.
A Personal Note From Susana
Last weekend, I had dinner with some old friends. We all have aged—a bit. And we had a serious discussion about “fear of aging.” It was fascinating to me as an Elder Law attorney that while elder law attorneys speak to the issue of dealing with the “most vulnerable people” in our population, we often do not know what that means.
During my conversation I learned that the aging process—even at its best causes people to be afraid—afraid of falls and afraid of illness. And to believe and fear that they ARE vulnerable. And that fear creates an anxiety at the deepest level. I don’t think that younger people really understand this. The anxiety manifests itself differently in different people. One of my friends who had suffered a stroke 4 years ago, and who appears to be perfectly healthy is petrified that every time she goes down the stairs she will suffer a fall. Another who has issues with hip and back has had to slow his gait to be able to walk. The “funniest” one is the friend who has decided to wear long sleeves from now on because her arms “look terrible.” All felt “fragile” or “vulnerable.” And all felt that THEIR parents had not expressed these feelings with enough emphasis to them. None voiced the real elephant in the room—fear of loss of mental capacity.
This conversation reminded me of my much-loved Mother-in-Law who suffered severe osteoporosis, loss of sight, loss of hearing, and other ailments until she died at almost 101. She never complained and never shared her fears with us the way my friends did. I believe that this was because she was afraid she would be MORE fragile and vulnerable if she did. I regret that I didn’t have this conversation with her. It would not have been to allay her fears, but in understanding them, I may have made her feel less vulnerable—less alone, and more protected. Please take this lesson to heart, and speak with those seniors who you love—and most importantly listen. It could help them deal with their older age.