- 100% +
Print Friendly

FAQ

FAQs (Frequently Asked Questions):

How Does the Medicaid Spend Down Work for a Single Person?

There are less options for a single person than there are for married couples. With married couples, we can transfer assets to the spouse at home and things like that that we just can't do with a single person, but there still are options. The first thing I'd say is plan ahead. The best result you're going to have is if you start at least start planning, estate planning, at least five years before you need care with a qualified elder law attorney. That will put you in the best position, but last minute, there are still things you can do. The nursing home single person needs to be below $2,000 in countable assets. There are appropriate spend down steps under the rules, like prepaid funeral.

 

On average, in Massachusetts, that's about $10,000, and that's a perfectly acceptable spend down. One family vehicle is non-countable. Term life insurance is non-countable. You may be able to fix up the home in certain circumstances, and then there are more complex strategies that you could speak with an elder law attorney about, like a caretaker child contract or a joint tenancy strategy where you may consider buying into one of your children's homes. There are a number of different spend down options. It won't always spend down all of your money. It depends on the circumstance in each case, but you should be able to substantially chip away at it legally within the Medicaid rules.

 

What is the Difference between LTC Planning and Traditional Estate Planning?

Long-Term Care Planning is planning for your future, and it looks at many different aspects, both financial as well as medical, and looks at home care as well as nursing home care, and considers all your options, not just insurance, for paying for your care.

 

My Spouse is in a Nursing Home and I need Help Paying for Care, What Will I Have to Live on If My Spouse Gets Medicaid?

If your spouse is in a nursing home getting medicaid, you are going to be as the at home spouse, you're going to be able to keep $119,000 in your name. You will also be able to keep the house, your primary residence is non-countable. Maybe unprotected from the medicaid lean, but its non-countable you don't have to spend it down spend it or sell it to get medicaid. There is also a laundry list of other non-countable assets that you keep one family vehicle is non-countable, term life insurance is non-countable, prepaid funeral of any amount is non-countable. An unlimited amount of your income as the at home spouse. So you should see a qualified elder law attorney to walk you through these rules and maybe do some planning to make sure that you are using them to your advantage.

 

I Did Not Give My Home Away, But I Sold it to My Kids for a $1. Am I Still Protected?

When you sell something for less than it's worth, the actual fair market value, the state considers that a gift, and if you give something away within five years of applying for Medicaid the state will not approve your application for Medicaid because you gave something away. So when you say you're protected, well, if the house is out of your name for five years, I guess it's protected, but that gift could be a problem.

 

What is Probate? Does My Will Avoid Probate?

Probate is a court process that we inherited from old English law. It's supposed to make sure that the people that you want to get your assets actually get them. There's no foul play involved.

It's a multi-step process; generally speaking, you petition the court to be the personal representative who used to be called executor, and they make you print it in the local paper in case anyone wants to object, you wait 30 days, and then at some point, unless someone has objected successfully, you become the personal representative, the court names you. Then you file an inventory to make sure everybody knows what's in the estate, and then you pay the bills, and at some point you file an accounting to let people know what happened to the money and that it got distributed properly, and then you close the estate. In Massachusetts, usually after the one year mark. So it's a multi step process, that's a very broad brush overview.

But most people want to avoid probate and in some cases that's perfectly acceptable. You can do that a bunch of different ways. A common misconception is that the will avoids probate, and that's not true. The will only works in the context of probate. So, you can avoid probate in a bunch of different ways and that's okay, but if you do that you're not using your will. Your assets are not going through your will. The will only works in probate.

 

When Should I Start Planning For Long Term Care?

I think it's important to start planning for long term care needs in your early 60's, even 50's you could look at it depending on your family history. For most people right before retirement, retirement age, in terms of making sure that they have their documents together and they know what's going to happen to their finances if somebody gets sick.

 

What Should I do Once My Spouse Has Qualified for Medicaid?

That's a great question because a lot of spouses don't even think about that. They think that the planning is done once their spouse in the nursing home has qualified for Medicaid because all is great at that point, and Medicaid is paying the bill. That's certainly a great hurdle to be over, but you need to think about what to do next because the at-home spouse will at that point be holding all the money in the house. Generally speaking, to get the nursing home spouse qualified for Medicaid, there were transfers made under the rules to the at-home spouse. The at-home spouse may have the house in their name, and they may have a lot of assets in their name, at least up to $119,000 under the Medicaid rules.

 

The problem becomes if the at-home spouse passes first. Under the old will that most spouses have, which say everything to my spouse, the nursing home spouse gets everything, gets the house back in their name, gets all the assets back in their name, and they're now well above their $2,000 asset limit to stay on Medicaid, and they get bumped off Medicaid until they spend that money down. That can be a huge problem. There needs to be some planning done by the at-home spouse. For instance, maybe a will with a testamentary special needs trust for the nursing home spouse. If done properly, that can send assets in a protected way to a basket, a special needs trust pool of money to be used only for the nursing home spouse, but it won't be countable under the current rules for Medicaid or MassHealth, so it won't affect their benefits. Some assets may be sent directly to the children at that time. Generally speaking, we don't want to send them back into the name of the nursing home spouse.

 

Why Is It Important To Use a Certified Elder Law Attorney?

Certified Elder Law Attorney is the only nationally recognized expertise designation. It's recognized by the American Bar Association. In order to be a CELA you need to have a certain amount of experience and your practice has to be over 60% in Elder Law and you also need to take a really hard test, so there aren't lot of them. There are thousands of attorneys in Massachusetts and probably less than 20 are Certified Elder Law Attorneys. When you go to a Certified Elder Law Attorney you know you're getting an expert because they had to pass those qualifications.

 

Am I Already Protected Because I Have My Assets in a Trust?

You may not be. It really depends on the type of trust. There are just about as many types of trusts as there are people in the world. There are irrevocable trusts, and revocable trusts and even with in those two categories they can be drafted to do a number of different things with a number of different goals and previsions, so all trusts are not the same. It is true that if your trust is drafted properly, if you follow the case law and the court decisions and the medicaid rules that is generally a irrevocable trusts that can be drafted that will protect your house or other assets from the medicaid lean.

 

Why Do I Need A Trust? Can’t I Just Leave Everything To My Kids?

A trust is a better idea than giving to your children for the same reason I mentioned earlier. Your children can be totally trustworthy, but what happens if they get divorced? If they're holding your house and your money, that could be lost, or if they get in a car accident, or things like. A trust is a written document that describes how the property that it owns is to be handled and used, and when your property goes into a trust, even if your child is the trustee, your child isn't the owner of that property. Therefore they can't lose your property to their creditors. That's why I like a trust better than an outright gift.

 

Why Do I Need To Plan Ahead For Long Term Care?

There's lots more we can do if we plan ahead. Massachusetts MassHealth, which is Medicaid in Massachusetts, has a five year look back period. There are things that we can do five years before care is needed that we can't do within the five year clock, like transfers to family members or transfers to a particular type of trust to get the five year clock started.

The basic idea is, if you know the rules, we can set things up to play by the rules so that when and if care is needed we're in the best possible position. We have a better result if we plan early than if a client comes in last minute.

 

My Spouse Has Alzheimer’s And Is Living At Home. What Do We Need To Do Now To Plan Ahead?

What you really need to do right now to plan ahead is make sure that you have the proper documents in place so that you can sign things for your spouse and make decisions for your spouse when your spouse reaches that point that he or she can't make decisions for themselves. A durable power of attorney and a healthcare proxy are the primary things that you need to take care of right away.

 

What’s A CELA And Why Does It Matter To Me?

A CELA is a certified elder law attorney, someone certified by the Elder Law Foundation and its a designation, a process that you need to go through to get a certification to show that you have met certain criteria in the context of elder law. You need to for instance pass a national exam, bar exam style exam, you need to submit documentation of your experience in a number of difference elder law categories, and you need to get i think its 6 peer reviews, 6 attorneys to write about you to the National Elder Law Foundation and your experience and integrity. So it's a process that you go through. In mass, as of today, in 2016 i think there are 24 Certified Elder Law Attorneys. I think it's a helpful designation.

 

What Are The Biggest Threats To My Retirement Savings?

The biggest threats to your retirement savings is the cost of healthcare as you get older. Medicare doesn't pay for long term nursing home care and it doesn't pay for at-home care, custodial care. Home health aide, things like that. Those kinds of things you're either going to be private paying or you might have some type of insurance to pay for, but you really have to think ahead with your retirement accounts and see if your money is going to last.

 

What Is The Medicaid Gifting Penalty And How Does It Work?

The Medicaid gifting penalty is a penalty that medicaid has that makes sure you don't give away your stuff, your assets within 5 years of applying for nursing home medicaid. So they want to make sure that everybody's not giving away your things the eve of applying for the state to pay for their care. So the legislator put in place a 5 year look back, where they, medicaid, when you apply for nursing home medicaid, they get to look back over your bank accounts for 5 years, over your tax returns for 5 years, and they want to see if you've made any gifts. If you have made a gift in the last 5 years, generally speaking they will give you a penalty for that, a period of time where they wont pay for their stay. The bigger the gift the bigger the penalty period. Roughly equates to every 10000 that you gift is a one month penalty where they wont pay for your stay. So those are the gifting penalties that everyone should know about.

 

What Is A Durable Power Of Attorney, And Why Is It Important?

Well, a powerful power of attorney is the term that we use for a really good one. Not all powers of attorney are the same. Some people think they're just a form document. As you get older, you want to make sure that your power of attorney has certain clauses in it that allow your family to do gifting on your behalf, to move real estate around on your behalf. A lot of times, powers of attorney limit the gifting ability to that $14,000 a year that you always hear. Well, if I need to take my husband's name off the deed, that's worth a lot more than $14,000, so I wouldn't be able to do that unless I had a powerful power of attorney, one that has all the right clauses.

 

Should I Put My Kids’ Name On My House Or Bank Accounts?

Generally speaking, no. Every case is different but the risk in putting your house or even your bank accounts in your kids names is , we can't get it back if you need it. So lots of people say "i just want to put house in my daughters name, or my kids' name" lets say, but medicaid if you need care within 5 years of that gift, medicaid has a 5 year look back period and they are going to give you a large penalty for a period of time where they wont pay for your stay due to your gift. The larger the gift, the larger the penalty period, roughly equates to every $10,000 that was gifted is a one month penalty that they wont pay for your care for a month. So you can see where a $300,00 house would cause years of penalty.

So that's one risk, the other risk is we may not be able to get it back, if you need it to live or you want to stay in your home, you may not be able to do that despite your children's' good intentions. They may pass away, they may even divorce, or car accident, or get sued, and college tuition bills that they need pay, so any of those circumstances despite their best intentions, they may become disabled themselves and in those cases we can lose your house which is now their house. So generally speaking we don't recommend outright gifting of your house or your assets to your children.

 

What Are the Basic Estate Planning Documents?

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

Do I Need a Lawyer to Apply for Medicaid?

Though an attorney is not always needed when filing a Medicaid application, in our experience, it is almost always advisable to consult with a qualified elder law attorney before submitting a Medicaid application. If an application is not done correctly, it may result in a Medicaid denial of vital benefits for the senior. This denial can result in a large nursing home bill. In our experience nursing homes are currently costing about $10,000 a month for care. Sometimes the family does not have enough money to pay this bill that has already been incurred.

Medicaid applications are very complicated and the laws keep changing making it very difficult for families to do an application on their own without making costly mistakes. An experienced elder law attorney can guide you through common pitfalls and help avoid potential problems. An elder law attorney can also help you save money and protect assets by using legal strategies that you are probably not aware of. Through the guidance and advice of a qualified elder law attorney, you may be able to preserve a portion, if not all of your loved one's assets, including the family home, from the cost of long-term care.

Here are a few examples (names have been removed to protect their privacy) of a few mistakes individuals have made when filing a Medicaid application:

  1. Two sisters did the right thing and cared for their physically crippled mother for years, keeping her out of a nursing home. Their verbal agreement was that she would pay them a modest rate for their efforts. One sister actually left her spouse in another state to care for her mother in Massachusetts. As they did not jump through the hoops required by MassHealth (such as an appropriate Care Contract, an assessment from a professional that the care was needed, etc.), MassHealth deemed all payments to the daughters to be gifts and assessed a corresponding gifting penalty. In other words, once the mother finally entered into a facility, MassHealth would not pay for her stay for years, causing tens of thousands of dollars in unpaid private care costs.
  2. A non-attorney handled the application for a nursing home resident. As the resident/senior lacked mental capacity, a petition for Conservator was to be filed, but was delayed for over a year. As the Medicaid planner lacked knowledge of the Court system and did not sufficiently follow up, Medicaid was denied and then the appeal of that denial was dismissed, leaving over $100,000 in unpaid nursing home bills.

These are just some of many reasons why we feel a Medicaid application is not a Do-It-Yourself project.

Have you already begun a Medicaid application on behalf of a loved one? Would you like one of our qualified elder law attorneys to review the application or handle an appeal of a denial? Consulting a qualified elder law attorney who can advise you on the entire situation will give you peace of mind. And what you learn may mean significant financial savings or better care for you or your family member in the long run.

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts.  Nothing on this website is intended to be or may be construed to be legal advice.  No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

Should I Work with a Personal Family Lawyer™?

If you decide that you would benefit from working with a lawyer, your next decision is what kind of lawyer? – a traditional estate planning lawyer or a Personal Family Lawyer™? Depending on what you decide, the experience will be very different. A traditional experience often goes something like this: You meet with a lawyer who makes things seem complicated or confusing.  The lawyer prepares your documents for you.  You sign them and put the binder on a shelf at home.  While the documents probably will help your estate avoid probate and estate taxes, it likely leaves assets unprotected and doesn't adequately protect your kids.  If you need to ask questions or decide your plan needs changing, it will be done at an hourly rate. A Personal Family Lawyer™ works more like this: You create a long-term relationship with your attorney who can provide a lifetime of guidance for you and your loved ones.  Your attorney gets to know you, your needs, goals and values and creates a plan with you that is tailored just for you.  The plan ensures your children will be taken care of in the best way possible, and that they'll receive whole family wealth, including your financial, human, intellectual and spiritual assets.  You'll always be able to ask questions and make changes quickly and easily to your plan, and fees are on a flat-fee basis, so there are never any surprises. Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts.  Nothing on this website is intended to be or may be construed to be legal advice.  No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

How Do I Know If I Should Work With a Lawyer?

You would benefit from working with a lawyer if:

  • You own more than just personal belongings, such as cars, clothing, jewelry or furnishings.
  • You want to ensure that the people you love will have a trusted advisor to turn to when you are gone.
  • You want to avoid probate or estate taxes or protect your children's inheritance.
  • You want to guarantee your plan will work when your family needs it.

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

What Can a Special Needs Trust Pay For?

A special needs trust can provide for physical therapy, medications and medical treatment, and transportation. It may also provide for certain items which will enhance the qualify of life for the beneficiary. For example, education, entertainment, vacations, furniture and furnishings, and some utilities. The general rule is that trust assets cannot be used to provide the beneficiary with food or shelter. Another important restriction is the special needs trust cannot give the beneficiary cash. The reason is that a cash gift could be considered income and/or an asset of the beneficiary and thus could put the beneficiary over income and/or over assets for certain needs based government benefits. If the gift is income or an asset for certain needs based government benefits the gift could disqualify the beneficiary from the program.

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

What is a Special Needs Trust?

A special needs trust is a trust created for the benefit of a disabled person who is receiving, or may in the future receive, needs-based government benefits. Assets held by a special needs trust generally are not considered to be owned by the beneficiary of the trust. Therefore, if the beneficiary of the trust applies for Supplemental Security Income (SSI) or Medicaid the trust assets will not count as an asset that is owned by the disabled person for purposes of these (and other) needs based government benefit programs. What are needs-based government benefits? Needs based government benefits include Medicaid (MassHealth in Massachusetts), Social Security Supplemental Income (SSI), some types of public housing, etc. These are benefits that a person must apply for and is required to meet certain income and asset restrictions in order to qualify.  For example, if a person is in a nursing home desires for Medicaid to pay for his nursing home care the person needs to apply for Medicaid and be approved.  In order to be approved, the person must have less than $2,000 in "countable" assets.  Countable assets include all assets except for a house, a car, a pre-paid funeral, $1,500 burial account and $1,500 whole life policy.  A more detailed discussion of MassHealth qualification is beyond the scope of this Q&A.  Please see our "Elder Care Guide" available on our website for further details on Medicaid and Medicaid planning strategies.  It is important for a person on needs-based benefits not to be directly gifted assets which could cause the disabled person to be "over assets" for purposes of the benefit program.

What is a Trust?

A trust is a very powerful estate planning tool that can help avoid the time and expense of a court supervised probate, provide estate tax planning, and in some circumstances, protect assets from lawsuits and divorce.  A trust is a legal arrangement memorialized by a legal document containing instructions and guidance on how it works.  Since a trust is nothing more than a collection of words on paper, it needs a person to actually carry out its instructions.  This person is called the Trustee and they are charged with managing the trust assets for the beneficiary and following the trust's instructions for allowing the beneficiary access to or use of the assets.  The beneficiary is the person who is entitled to use or receive the trust assets. Trusts come in two varieties – revocable and irrevocable.  The revocable trust is the cornerstone of many foundational estate plans, while the irrevocable trust is used for more advanced planning such as Medicaid Planning or Estate Tax Planning.  A well-drafted revocable trust allows the trustmaker (also called the Trustor, Settlor, or Grantor) to hand-pick the Trustee who will manage the trust assets for the trustmaker if the trustmaker becomes incapacitated. Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

Should I Choose an Attorney Who is in My Area?

It's not absolutely necessary, but it is ideal. The biggest reason is that you can meet with them face to face. Creating an estate plan isn't a one-time transaction. Because your plan needs on-going maintenance, you should choose an attorney that you can establish a long term relationship with. Someone you like, who will get to know you and who will be a trusted advisor for you and your loved ones in times of need.

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

What and How Do You charge?

Since our legal services are personalized for each client, it’s only after we have a feel for your needs that we can determine what level of planning, and therefore what fee level, best fits you.  Unlike traditional estate planning attorneys, who charge by the hour, we charge flat fees—that way there are never any surprise bills even if you need extra time or attention.  Our goal is not to charge clients for every minute that we spend with them.  Our goals are to put a plan together that’s tailored for you and your family, and to walk you through an easy, smooth, comfortable process.  Since your goal is likely to protect your whole family wealth, our services are truly an investment, not a cost.  Click here to see our “Pricing Sheet”.

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

SAQs (Seldomly Asked Questions):

Intro Video For SAQs

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

Can I keep my car after I go into a nursing home if Medicaid is paying for my care?

Yes, as long as your family is using the car to take you to doctor's visits and out of the nursing home, then you can keep your car.

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

Can’t I give away $10,000 before Medicaid will impose a penalty?

No! This is a very common myth! You are confusing the gift tax rule with the Medicaid rule. Under the federal gift tax law, any one person can give any other person up to $14,000 (in 2017) per year without having to file a gift tax return. The amount of the gifting allowed before having to file a gift tax return is set by law and may change each year. The amount was set at $10,000 for many years which is why many people think $10,000 is allowed to be gifted. I bet you didn't even know there was such a thing as the gift tax. The federal government imposes a tax when you give property to someone. Medicaid is covered under a very different law. Under Medicaid, known as MassHealth in Massachusetts, the state imposes a penalty for each dollar you give away within the five years before you apply for Medicaid to pay for nursing home care.

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

[Last Updated: January 2017]

Do I have to sell my home if I go into the nursing home and Medicaid pays for my care?

No! This is another common myth. As long as on your Medicaid application (MassHealth in Massachusetts) you check the box indicating you intend to return home you can keep your home even after you are approved for MassHealth. You can do this even if it is very unrealistic to think you could return home, as long as, you intend to return home if you are ever able. You don't have to prove your intent. Now, once you are living in the nursing home and MassHealth is paying for your care, you will pay most of your income to the nursing home for your care. You'll only be allowed to keep up to $2,000 in the bank (2017 figures in Massachusetts). Therefore, you probably won't have enough money to cover the cost of home owner's insurance, taxes, up-keep on the home, etc. We recommend to most of our clients that the home be rented to pay these expenses. Also, unless the home is somehow protected (see our website for ideas on how to protect your home), Medicaid will place a lien on your home. The purpose of the lien is to recover the costs paid by MassHealth for your care after your death. This lien may grow very large if you are in the nursing home for a long time. Once you die, your family will have to pay this lien off before distributing the home or sale proceeds to your heirs.

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

[Last Updated: January 2017]

I have my savings and checking account joint with my daughter. Is it protected, if I have to go into a nursing home?

No. If you are applying for Medicaid (MassHealth in Massachusetts) any money in a joint bank account is considered yours unless your daughter can prove that she put the money in the account. You are only allowed to have up to $2,000 in the bank if you are going to apply for Medicaid. Now for some strange reason, brokerage accounts are treated differently. If you own your brokerage account jointly with your daughter, then half the money in the account will be considered your daughter's and thus protected.

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

What is a Trust?

A trust is a written agreement between the person(s) who creates the trust and the person who administers the trust as to how any property owned by the trust may be used. Basically, it is a written set of rules and instructions guiding how property owned by the trust is to be handled. The person who creates the trust is called one of the following: "Grantor," "Trustor" or "Settlor." Two people may create a trust together and then both would be Grantors. The person who administers the property in the trust according to the rules set down by the Grantor is called the "Trustee." There may be more than one trustee. The person who benefits from / gets to use any property in the trust is called the "beneficiary." There may be multiple beneficiaries of a trust. Additionally, a trust may be revocable or irrevocable depending on the terms of the agreement.

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

What is an Irrevocable Medicaid Protection Trust?

What is an Irrevocable Medicaid Protection Trust? An Irrevocable Medicaid Protection Trust is an irrevocable trust that is created for the purpose of protecting any property placed into the trust from (1) having to be spent on nursing home care for the person who created the trust (the Grantor) (2) having the property in the trust count as an asset when the Grantor applies from Medicaid, and (3) having the property placed in the trust be subject to "estate recovery." Estate recovery is the process whereby Medicaid (MassHealth in Massachusetts) looks to be paid back for the care paid by Medicaid from the deceased person's estate. Irrevocable Medicaid Protection Trusts work particularly well for protecting real estate. Other assets such as cash and stocks can also be placed in an Irrevocable Medicaid Protection Trust as well, but it is not as advantageous as putting real estate into the trust. The advantages of an irrevocable Medicaid protection trust are: • You retain control over your home. • The property cannot be sold, mortgaged or conveyed by the Trustee without the written permission of your Trust Advisor. • You have the right to live in the home for the rest of your life. • You retain the right to change who receives the property at your death. • While the property is in trust during your lifetime, your property is not at risk if your Trustee divorces, gets sued or declares bankruptcy. • You may remove or change the Trustee and/or beneficiaries. • You maintain all current income tax, capital gain's tax and estate tax status. • You maintain the I.R.C. Section 121 capital gains tax exclusion. • Your children should get a step-up in basis on your death. • If the trust invests in rental property, the income would flow through the trust and be paid to you. The income would be taxable on your return. • You can continue to deduct real estate taxes on your personal income tax return. The disadvantages of an irrevocable Medicaid protection trust are: • Although the income from the trust is available to pay for your care, you cannot take any principal out of the trust. • The transferring of property into the trust is a disqualifying transfer, with an associated five year look back period. You will not be approved for Medicaid to pay for your nursing home care if you apply within five years of putting your property into the trust.

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

What is an irrevocable trust?

An irrevocable trust is any trust in which the Grantor does not keep the right to demand the property in the trust back. A Grantor of an irrevocable trust may keep the right to make certain changes even though the trust is irrevocable. Irrevocable trusts are created for several different reasons. One reason is protecting assets from having to be spent on nursing home care or having a lien placed on a home if the Grantor applies for Medicaid. Another reason may be gifting property out of the Grantor's taxable estate before the Grantor dies in order to reduce estate taxes. The terms of the irrevocable trust are determined by the goal of the Grantor in creating the trust. Thus the rules of an irrevocable trust created to protect a home from Medicaid must be very different than a trust created to reduce a person's taxable estate. For more details on different terms in irrevocable trust you should review a description of that particular type of irrevocable trust.

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

If I receive a gift or an inheritance do I have to pay tax on it?

You do not have to pay income tax upon receiving a gift or an inheritance. However, if the value of the gift is over $14,000 (in 2017) then the person who gave you the gift must file a federal gift tax return. Gift tax returns are due April 15th of the year after the year in which you made the gift. Usually, no gift tax is due. Why? Because under federal law, before you have to actually pay the gift tax, the amount gifted reduces the amount of estate tax exemption you have available at your death. What is the estate tax? It is a tax imposed on the value of property owned by someone at death. In 2016, the federal government exempts the first $5,490,000 in property (in 2017) before you have to pay any estate tax. Once you reach $5,490,000 the tax rate is 40%. Therefore, if someone gifts over $14,000 then that person files a gift tax return to report the gift to the federal government and when that person dies instead of having the full exemption amount, the person has the exemption amount less the amount gifted (Over $14,000). So, unless you gift more than the exemption amount, no gift tax is due. The estate tax is imposed on the deceased person so since you are the person inheriting the property you do not pay any tax under most circumstances. Massachusetts does not impose a gift tax. Massachusetts does have an estate tax. Massachusetts exempts the first $1,000,000 in property owned by the decedent before imposing an estate tax.

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

[Last Updated: January 2017]

What is a revocable living trust?

A revocable living trust is a trust which, according to the rules of the trust, the Grantor retains the right to change the terms of the trust at any time. This ability to change the trust makes the trust revocable. Also, the Grantor can demand the property in the trust back at any time. Generally, when someone creates a revocable living trust the Grantor is also the Trustee and beneficiary during the Grantor's lifetime. Revocable living trusts are created for several common reasons, such as avoiding probate and minimizing estate taxes.

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

Is the death benefit of my life insurance a part of my taxable estate?

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

Will gifting assets to my children affect my Medicaid?

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

Have the Obama taxes of 2010 protected me from estate tax?

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.

Is it best to leave assets to one person with the understanding that they will divide those assets among the others?

Legal Disclaimer: The legal information presented on this website is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this website is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This website is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.