Law Tips: Elder Law, Part I: Medicaid Estate Planning

Providing advice in Elder Law presents its own unique hurdles. Practitioners often find themselves preparing clients for late-life decisions that can be emotional, while critical to the client’s own and to their families’ piece of mind. And, of course, looming overall are the financial impacts surrounding each decision.

Recently, the CLE entitled “Leaping Ahead: 20 Hot Tips in Elder Law” provided background to assure Indiana attorneys are properly equipped to assist in this process. The program faculty coalesced their expertise resulting in a top-notch package. I want to give credit all around for the content upon which this two-part Law Tips series concentrates. Appreciation goes out to Robert W. Fechtman, Fechtman Law Office, Indianapolis; Rebecca W. Geyer, Drewry Simmons Vornehm, Carmel and Keith P. Huffman, Dale, Huffman & Babcock, Bluffton

One of the primary areas of import that the Elder Law panel reviews is Medicaid Estate Planning. Specifically, they provide some key pointers on the effective use of “Transfer On Death:”

• Transfer On Death (TOD) Act is a valuable tool to utilize in Medicaid estate planning to avoid probate and estate recovery.
– You can TOD real estate, tangible personal property, bank accounts, retirement accounts, etc. These are not considered gifts because transfer is not complete until death.

• If you set up a transfer on death designation after Medicaid eligibility is established, make sure to report the change to FSSA. – See IC 12-15-9-0.6(b)
“(b) Enforcement of a claim against assets that are not included in an individual’s probate estate must be commenced not more than nine (9) months after the decedent’s death. This limit does not apply to any assets that were not reported to the county office of the division of family resources.”

• Review the tax charging clause in estate planning.
– The standard tax clause calls for all death taxes to be paid from the residuary estate.
– Medicaid planning often involves the use of non-probate transfers including POD accounts, TOD Deeds, and beneficiary designations on accounts.
–  If some or all of the non-probate assets pass to beneficiaries who are not beneficiaries under the will’s residuary clause, those residuary beneficiaries find themselves paying death taxes generated by assets which pass to other people if the entire tax liability falls on the residuary estate.

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I hope you found an application that benefits your practice in this Medicaid Estate Planning segment of Elder Law Tips. If you would like to see the complete presentation by the referenced faculty,  there are video replays of the 3-hour CLE “Leaping Ahead: 20 Hot Tips in Elder Law Practice” – Click Here.

Your suggestions for this blog or other ICLEF-related thoughts are always welcome. Send them along to nancy@iclef.org or post a comment at www.facebook.com/ICLEF.  You are also invited to sign up for the RSS feed here on the website to receive the blog weekly in your reader. Stay tuned for another Elder Law discussion next week. We appreciate you reading Law Tips.
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ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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