Elder law in Rochester New York is not a topic a lot of people know a lot about, and even some attorneys who do not have experience in this field can make some fairly basic mistakes. Elderly people who have questions about estate planning or elder law issues need to speak to an attorney who deals with these kinds of questions on a daily basis. Failing to receive the proper advice can lead to some common, and often serious, mistakes.
Elder Law in Rochester Mistake 1: Improper Medicaid Planning
A lot of people know that you can use Medicaid to pay for long-term care costs associated with nursing homes and in-home care. Many people also know that Medicaid has strict eligibility criteria when it comes to how much property you own. A common elder law mistake that too many people make is thinking that by transferring some of your property to others before you apply for Medicaid, you will still be able to use the program to pay for long-term care costs.
For example, elderly people who believe they might need nursing home care often try to shield their assets by transferring them to their children or other family members. While transferring your home to your child might seem like an effective way to reduce your asset level in order to qualify for Medicaid, this type of strategy can come back to haunt you.
Medicaid has a five-year “look back” period when it comes to determining eligibility. If you have given gifts during that five-year timeframe that put you over the asset eligibility limit, you won’t be able to qualify.
Elder Law in Rochester Mistake 2: Improper Gift Planning
In preparing for long-term care costs, a lot of people hear about the gift tax exemption limit. Many of these people mistakenly believe that if they transfer gifts to others before applying for Medicaid, those gifts will not count when determining Medicaid eligibility.
The gift tax exemption and Medicaid eligibility are two separate issues. Even if you give gifts that do not exceed the gift tax exemption limit, that doesn’t mean those gifts won’t count when determining eligibility for Medicaid. The five-year look back time period takes all your assets into account, even if those assets are not considered taxable under the gift tax exemption rule.
Elder Law in Rochester Mistake 3: Improper Power of Attorney Selection
Powers of attorney are excellent estate planning tools, but only when used properly. A lot of elderly couples are not comfortable with the idea of choosing someone else to represent their interests. When they make powers of attorney, they naturally choose their spouses to serve as the sole agent.
While there is nothing wrong with spousal selection, you always need to ensure that the powers of attorney have replacement agents named. Failing to have a replacement, or successor agent, could mean that a court will have to get involved if your first choice of agent becomes unable to serve.
- Donor Advised Funds: Too Good to Be True? - September 15, 2021
- Changing “Irrevocable” Trusts Through Judicial and Nonjudicial Modification - September 8, 2021
- Reasons to Supplement Your Estate Plan With Life Insurance - September 7, 2021