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Could Medicaid Payback Rules Come to an End?

Amid recent reports from such prominent news outlets as The New York Times and Associated Press about the negative impact of Medicaid estate recovery on families, the idea of ending this practice altogether has resurfaced.

What Is Medicaid?

Medicaid is a public assistance program that seeks to provide health insurance coverage for Americans with limited means. To be eligible for Medicaid in most states, you must meet strict income and asset guidelines. Generally, Medicaid rules will require that you have no more than $2,000 to your name.

Many older Americans who eventually need long-term care services come to rely on Medicaid to cover these costs. (Note that Medicare, a different government program, does not pay for long-term care.)

As of late 2023, the median monthly cost of a semi-private room in a nursing home in the U.S. was close to $9,000. The vast majority of people cannot afford to pay these prices out of pocket over the long term. So, they often opt to spend down what assets they do have until they can qualify for the Medicaid program.

What Is Medicaid Estate Recovery?

Federal law requires that states attempt to recover the funds they had paid out for a Medicaid recipient’s medical care during their lifetime. This might include any costs that have accrued for nursing facility services, prescription drugs, or other medical or long-term care. The Medicaid Estate Recovery Program specifically affects Medicaid long-term care recipients who had reached age 55 or older.

With certain exceptions, it’s mandatory for a state to seek these repayments from the person’s estate after they have passed away. States that fail to pursue this course of action may be at risk of losing the Medicaid funding they receive from the federal government.

Can Medicaid Take Your Home?

In most states, only property that is part of your probate estate is subject to Medicaid estate recovery. So, for instance, if you have named someone to benefit from your life insurance policy, those funds will pass outside probate in most places. However, your house may be your sole asset, and you may not have taken precautions to protect it from estate recovery. In this case, the state Medicaid agency could place a lien on it to recover its costs.

The financial consequences of the Medicaid Estate Recovery Program can be devastating for grieving families. As states seek to recover money they have spent on Medicaid beneficiaries who received long-term care benefits, families with lower incomes tend to be the ones in the crosshairs. In some cases, the survivors of the deceased may lose their family home or face bankruptcy.

The Stop Unfair Medicaid Recoveries Act

In March 2024, U.S. Rep. Jan Schakowsky (D-IL) reintroduced legislation, the Stop Unfair Medicaid Recoveries Act, proposing to end Medicaid estate recovery altogether. The bill would prevent states from placing liens on the homes of Medicaid recipients while helping to improve access to long-term care services.

According to the recent story in the Times, one nonpartisan agency cited that, for fiscal year 2019, most states recouped less than 1 percent of what they had spent on Medicaid long-term care benefits.

“This current system ... is ineffective and unjust, and it must end,” Schakowsky said in a news release about the Act. “Let’s give our seniors and their families dignity and peace of mind.”

Numerous advocacy groups had previously expressed their support for ending Medicaid estate recovery. However, the bill may not be particularly likely to move forward immediately.

Plan for the Unforeseen With Your Elder Law Attorney

Avoiding Medicaid estate recovery is possible, but it does take careful and deliberate planning.

Facing the possibility that you could one day need Medicaid long-term care coverage is important. After all, statistics show that seven in 10 older Americans are likely to require some form of long-term care in their later years.

Keep in mind that the rules regarding Medicaid benefits, which are specific to your state, can be complex. Be sure to work with your elder law attorney, who can help you navigate your potential options. They can assist you in planning for your future and guide you in making the best possible decisions. This might include strategizing about when and how to apply for Medicaid or looking for ways to protect your assets.

How Do I File for a Guardianship?

No one wants to see a loved one become unable to make decisions for him or herself. If this happens, however, the court may appoint a substitute decision maker, often called a "guardian," but in some states called a "conservator" or other term. A guardian is only appointed as a last resort if other, less restrictive, alternatives, such as a power of attorney, are not in place or are not working.

In most states, anyone interested in the well-being of an individual who may be incapacitated – called the “proposed ward” -- can request a guardianship for that person (also called a "conservatorship" in some states). An attorney is usually retained to file a petition for a hearing in the probate court in the proposed ward's county of residence. Protections for the proposed ward vary greatly from state to state, with some simply requiring that notice of the proceeding be provided and others requiring the proposed ward's presence at the hearing. The proposed ward is usually entitled to legal representation at the hearing, and the court will appoint an attorney if the allegedly incapacitated person cannot afford a lawyer.

At the hearing, the court attempts to determine if the proposed ward is incapacitated and, if so, to what extent the individual requires assistance. If the court determines that the proposed ward is indeed incapacitated, the court then decides if the person seeking the role of guardian will be a responsible guardian.

A guardian can be any competent adult -- the ward's spouse, another family member, a friend, a neighbor, or a professional guardian (an unrelated person who has received special training). An individual may nominate in advance the person they would like to serve as their guardian by executing a durable power of attorney while they are still competent to do so.

The guardian need not be a person at all -- it can be a non-profit agency or a public or private corporation. If a person is found to be incapacitated and a suitable guardian cannot be identified, courts in many states can appoint a public guardian, which is a publicly financed agency that serves this purpose.

In naming someone to serve as a guardian, courts give first consideration to those who play a significant role in the ward's life -- people who are both aware of and sensitive to the ward's needs and preferences. If two individuals wish to share guardianship duties, courts can name co-guardians.

Medicaid's Power to Recoup Benefits Paid: Estate Recovery and Liens

Federal law requires the state to attempt to recover the long-term care benefits from a Medicaid recipient's estate after the recipient's death. If steps aren't taken to protect the Medicaid recipient's house, it may need to be sold to settle the claim. 

For Medicaid recipients age 55 or older, states must seek recovery of payments from the individual's estate for nursing facility services, home and community-based services, and related hospital and prescription drug services. States also have the option of recovering all Medicaid benefits from individuals over age 55, including costs for any medical care, not just long-term care benefits.

There are a few exceptions. The state cannot recover from the estate of a Medicaid recipient who has a surviving spouse until after the spouse passes away. After the spouse dies, the state may file a claim against the spouse's estate to recover money spent for the Medicaid recipient's care. The state also cannot recover from the estate if the Medicaid recipient had a child who is under age 21 or a child who is blind or disabled.

While states must attempt to recover funds from the Medicaid recipient's probate estate, meaning property that is held in the beneficiary's name only, they have the option of seeking recovery against property in which the recipient had an interest but which passes outside of probate (this is called "expanded" estate recovery). This includes jointly held assets, assets in a living trust, or life estates. Given the rules for Medicaid eligibility, the only probate property of substantial value that a Medicaid recipient is likely to own at death is his or her home. However, states that have not opted to broaden their estate recovery to include non-probate assets may not make a claim against the Medicaid recipient's home if it is not in his or her probate estate.

In addition to the right to recover from the estate of the Medicaid beneficiary, state Medicaid agencies may place a lien on real estate owned by a Medicaid beneficiary during his or her life unless certain dependent relatives are living in the property. The state cannot impose a lien if a spouse, a disabled or blind child, a child under age 21, or a sibling with an equity interest in the house is living there.

Once a lien is placed on the property, if the property is sold while the Medicaid beneficiary is living, not only will the beneficiary cease to be eligible for Medicaid due to the cash from the sale, but the beneficiary would have to satisfy the lien by paying back the state for its coverage of care to date. In some states, the lien may be removed upon the beneficiary's death. In other states, the state can collect on the lien after the Medicaid recipient dies. Check with your attorney to see how your local agency handles this.

There are some circumstances under which the value of a house can be protected from Medicaid recovery. The state cannot recover if the Medicaid recipient and his or her spouse owned the home as tenants by the entireties or if the house is in the spouse's name and the Medicaid recipient relinquished his or her interest. If the house is in an irrevocable trust, the state cannot recover from it.

In addition, some children or relatives may be able to protect a nursing home resident's house if they qualify for an undue hardship waiver. For example, if a Medicaid recipient's daughter took care of him before he entered the nursing home and she has no other permanent residence, she may be able to avoid a claim against his house after he dies. Consult with your attorney to find out if the undue hardship waiver may be applicable.

Can I Challenge My Mom's New Trust Based on Undue Influence?

I have received this question from a reader: What can I do if I believe that my brother used undue influence on our 95-year-old mother to get her to amend her trust? He took her to a lawyer to change the original trust, which split everything evenly between my brother and me. The new trust now goes to him and then to his kids. My mother began experiencing dementia three years ago. Before this, she always treated everyone in the family equally. He also had her sign a power of attorney and hasn’t let me see or speak to her for two years.

You can certainly challenge the new estate plan. The question is whether it is easier to do it now or after your mother’s death. To do it now, you would probably need to seek a conservatorship over your mother. This would likely be very expensive, but it would help you preserve the evidence of your mother’s weakened cognitive ability and your brother’s influence over her. The other approach is to wait until after your mother passes away and then challenge the trust through your mother’s estate by asking to be appointed as her personal representative. While the trust is not a probate asset, as personal representative you would have standing to question the recent change. You may also have standing as a beneficiary of the original trust. This also is likely to be an expensive, difficult litigation. One potential advantage of pursuing the case after your mother’s death is that it would be easier to find a lawyer who would take the case on a contingency basis, at least if there’s enough at stake to make it worth the lawyer’s effort.

What are Some Common Mistakes in Titling Real Property?

“Unlike personal property, real property–such as real estate or automobiles–is titled to convey ownership.”

Title to real property must be transferred, when the asset is sold and must be cleared (free of liens or encumbrances) for the transfer to occur. Unlike other real property assets, real estate ownership can take several forms. Each of these forms has implications on how ownership can be transferred and can affect how they can be financed, improved or used as collateral.

Investopedia’s article, “5 Common Methods of Holding Titles on Real Property,” looks at the ways in which to hold title to real estate property.

Joint Tenancy. This is when two or more people hold title to real estate jointly, with equal rights to enjoy the property during their lives. When one dies, their rights of ownership pass to the surviving tenant(s). The parties in the ownership need not be married or related, but any financing or use of the property for financial gain must be approved by all parties and cannot be transferred by will after one passes. Another disadvantage is that a creditor with a legal judgment to collect a debt from one of the owners, can also petition the court to divide the property and force a sale in order to collect on the judgment.

Tenancy In Common. In this situation, two or more persons hold title to real estate jointly with equal rights to enjoy the property during their lives. However, unlike joint tenancy, tenants in common hold title individually for their respective part of the property and can dispose of or encumber as they chose. Ownership can be willed to other parties, and in the event of death, ownership will transfer to that owner's heirs undivided. An owner can use the wealth created by their portion of the property, as collateral for financial transactions, and creditors can place liens only against one owner's specific portion of the property. Any liens must be cleared for a total transfer of ownership to take place.

Tenants by Entirety. This can only be used, when the owners are legally married. This is ownership in real estate under the assumption that the couple is one person for legal purposes. The title transfers to the other in entirety, if one of the couple dies. The advantage is that no legal action is required at the death of a spouse. There’s no need for a will, and probate or other legal action isn't necessary. Conveyance of the property must be done in total, and the property can’t be subdivided. In the case of divorce, the property converts to a tenancy in common, and one owner can transfer ownership of their respective part of the property to whomever they want.

Sole Ownership. This is ownership by an individual or entity legally capable of holding title. The main advantage to holding title as a sole owner, is the ease with which transactions can be accomplished, since no other party needs to authorize the transaction. The disadvantage is the potential for legal issues regarding the transfer of ownership, if the sole owner dies or become incapacitated. Unless there’s a will, the transfer of ownership upon death can be an issue.

Community Property. This form of ownership is by husband and wife during their marriage for property they intend to own together. Under community property, either spouse has the right to dispose of one half of the property or will it to another party. Anyone who’s lived with another person as a common-law spouse and doesn't specifically change title to the property as sole ownership (which is legally transacted with approval by the significant other) takes the risk of having to share ownership of the property, in the absence of a legal marriage.

Community Property With the Right of Survivorship. This is a way for married couples to hold title to property. However, it is only available in Arizona, California, Nevada, Texas, and Wisconsin. It lets one spouse's interest in community-property assets pass probate-free to the surviving spouse, in the event of death.

Entities other than individuals can hold title to real estate in its entirety. Ownership in real estate can be done as a corporation. The legal entity is a company owned by shareholders but regarded under the law as having an existence separate from those shareholders. Real estate can also be owned as a partnership, which is an association of two or more people to carry on business for profit as co-owners. Real estate also can be owned by a trust. These legal entities own the properties and are managed by a trustee on behalf of the beneficiaries. There are many benefits, such as managerial influence, financial and legal liability and tax considerations.

Reference: Investopedia (April 10, 2018) “5 Common Methods of Holding Titles on Real Property”

How The Ancient Ones Handled Their Estate Planning

“Upon one’s death, there is no comprehensive service that finds every asset in the individual’s name. Sometimes the executor or family partakes in what seems to be a goose-chase, trying to find out where the decedent held her monies and property.”

It’s not unusual for a family member to find an old bank account or painting, years after someone has passed and the estate has been closed. If it’s not something of great value, says Above the Law in the article “Old Money, Same Issues: Lessons from the 5^th Century in Organizing Your Estate,” it’s easy to handle. Contacting a few members of the family to see who wants a small item, can be a simple task.

However, if it’s of high value, the family may need to petition a bank, the probate court or even an unclaimed funds bureau for access to the asset, so it can be distributed to beneficiaries or heirs. The testator needs to appoint a meticulous administrator so no stone is left unturned, when the time comes for marshalling all of the assets, before the estate can be closed.

 Israeli archeologists recently unearthed deeply buried stones related to the estate of an ancient Samaritan named Adios. The stone had an inscription that read “Only God help the beautiful property of Master Adios, amen.” The estate is reported to date back 1,600 years to the 5^th century. The estate contained stone mechanisms for making wine, flour and oil, including a mill. It was fairly well organized.

We have now organized people who take care of their heirs and beneficiaries, by listing all of their assets and taking the time to have an estate plan created that includes a detailed will, among other important documents. We are centuries away from inscribed stones, but the game plan is the same: write down the assets, have a will that details what assets go to either people or charitable organizations and prepare for the future.

If there is no list of assets, there are ways to uncover them. However, it creates a lot of work for the executor and stress for the family, that could be avoided with an estate plan.

The best evidence of asset holdings are often a decedent’s tax returns. General supporting documentation can reveal useful information about a person’s financial status. A look at a decedent’s paper files can reveal bank accounts, investment accounts and insurance policies.

If the assets are not properly documented in an estate plan, the monies may end up in a state’s unclaimed funds depository. Real estate, if taxes are not paid, may be seized. Many of the concerns for unclaimed funds can be addressed, by taking the time to create a spreadsheet of information and sharing it with the executor.

Whether your assets include a stone mill or bank accounts, an estate plan that includes clear and organized information about your assets will increase the likelihood that your assets will be distributed and not disappear, until they are uncovered centuries later.

Reference: Above The Law (March 5, 2019) “Old Money, Same Issues: Lessons from the 5^th Century in Organizing Your Estate”

Do I Need a Living Trust or a Will? Or Both? 我需要信託還是遺囑？還是兩者都需要？ (中英對照)

“In some states, clients are charged court costs and attorney’s fees, based on the worth of their probate assets. Thus, the cost of the administration of the estate increases, as the value of the probate estate increases.”

This is just one of the reasons people think they want a trust: to ensure that the value of their overall estate will not decrease, because of the cost of probate. The most common way to do that is with a trust, says The Houston Chronicle in the article “Elder Law: Which should I have—A Living trust or a will?”

In some states, probate is not an expensive or overly time-consuming issue. Texas, for example, has what is called an independent administration. Executors handle the tasks involved in settling an estate and distributing assets to beneficiaries. As a result, there’s very little court involvement. However, that’s not the case everywhere.  In California,   the Probate Court closely supervises the entire probate process and no assets can be distributed without the Court’s approval.  Further, in California, probate costs are 5% to 7% of the gross value of the estate.  For instance, if your estate is $1 million, the probate costs can be as high as $50,000.  If you want to avoid probate costs, you should hire an estate planning attorney.  An experienced estate planning attorney can tell you whether a trust is right for your estate.  He or she can also explain the difference between different types of trusts.

The trust most frequently used to avoid probate, is known as a revocable management trust, living trust or an “inter vivos” trust.

Selecting the best type of trust for each situation is different. Here are some advantages of living trusts:

Avoiding probate. The cost of probate alone is not reason enough to use a trust. However, if your assets are in trusts, you may not need to file an inventory listing your assets with the court. That’s not always required in every jurisdiction, but if it is required where you live, a trust can help keep your asset list private, by ensuring that it is only seen by beneficiaries.

Asset management for incapacity. A living trust goes into effect, while you are alive. If you become incapacitated, an alternate trustee can step in to manage assets, pay bills and ensure that finances are taken care of.

Avoiding probate in another state. If you own out-of-state property, your estate may need to be probated in your home state and in the other state. If you have a living trust, out-of-state parcels of land can be deeded into the trust during your lifetime, thus avoiding the need for probate in another state. After your passing, your trustee can handle the out-of-state property in the living trust.

Administrative ease. There are, unfortunately, instances when Power of Attorney can be challenged by financial institutions. The authority of a trustee is more likely to be recognized, by banks, investment companies, etc.

There are some questions about whether it’s better to have a living trust or a will. The most complex part of having a living trust, is the process of funding the trust. It is imperative for the trust to work, that every asset you own is either transferred into the trust or retitled into the name of the trust. If assets are left out or incorrectly funded, then probate will probably be necessary. This can occur, even if only one single asset is left out.

If an asset is controlled by beneficiary designation, then the trust may not need to be named a beneficiary, should you want it to pass directly to one or more beneficiaries.

Funding the trust becomes complicated, when retirement accounts are involved. Consult with an experienced estate planning attorney, if you want to make the trust a designated beneficiary of a retirement account. This is because very specific and complex rules may limit the ability to “stretch” the distributions form the account.

Using a trust instead of a will-based plan is growing in popularity, but it should never be an automatic decision. An estate planning attorney will be able to explain the pros and cons of each strategy and help you and your family decide which is better for you.

Reference: The Houston Chronicle (Feb. 15, 2019) “Elder Law: Which should I have—A Living trust or a will?”

“在某些州，客戶需要按資產的價值去支付法庭費用和律師費。因此，隨著資產增值, 遺囑認證費用亦隨著增加。”

這是人們認為他們需要信託的其中一個原因：確保他們的財產總值不會因為遺囑認證的費用而減少。The Houston Chronicle在“Elder Law: Which should I have—A Living trust or a will?”

一文中說，最常見的方法就是建立信託。

在某些州，遺囑認證並不花費及耗時。例如，德州擁有所謂的獨立的遺產程序。執行人員處理解決遺產和向受益人分配資產。因此，法院很少參與。但不是到處都是這樣。在加州，遺囑認證法院密切監督整個遺囑認證過程，未經法院批准，不得分配任何資產。此外，在加州，遺囑認證費用佔遺產總值的5%至7%。例如，如果您的遺產是100萬美元，那麼遺囑認證費用可高達50,000美元。如果您想避免遺囑認證費用，您應聘請資產規劃律師。經驗豐富的資產規劃律師可以告訴您信託是否適合您。也可以跟您解釋不同類型的信託之間的差異。

最常用於避免遺囑認證的信託稱為生前信託。

因著不同的情況選擇最合適的信託。以下是生前信託的一些好處：

避免遺囑認證。遺囑認證的費用不是使用信託的唯一原因。另一個原來是，如果您把資產放到信託中，您便可能無需向法院提交資產清單。並非每個司法管轄區都要求這樣做，但如果您所在的地方需要，可以通過信託確保只有受益人才看到您的資產清單。

失去能力管理資產。當你還在世的時候，生前信託便生效。如果您失去能力，替代受託人可以介入管理您的資產，支付賬單並確保財務得到妥善處理。

在另一個州避免遺囑認證。如果您在外州擁有財產，您的遺產可能需要在您所居地和其他州認證。如果你有一個生前信託，那麼可以把在外州的地放到信託中，這樣便可避免在另一個州進行遺囑認證。在您去世後，您的受託人可以處理在信託中的於外州的物業。

容易管理。不幸的是，有很多情況下，財務授權書可被一些金融機構質疑。而受託人的權力更有可能被銀行，投資公司等承認。

關於擁有生前信託還是擁有遺囑好一些這問題。擁有生前信託最複雜的部分是把資產注入信託的過程。如果要令信託有效，您擁有的所有資產都要轉移到信託中或是重新命名為信託名下。如果忘了轉移資產或不正確地轉移，則可能需要進行遺囑認證。即使只剩下一個資產，也可能發生這種情況。

如果資產有指定受益人，而您希望把資產直接留給指定受益人，那麼, 信託就不需要成為指定受益人。

當涉及退休賬戶時，為信託注入資金會變得複雜。如果您想將信託作為退休賬戶的指定受益人，請諮詢經驗豐富的資產規劃律師。因為當中涉及複雜的規則。

以信託來取代遺囑的做法越來越受歡迎，但這並不是理所當然的。資產規劃律師將能夠解釋每種策略的利弊，並幫助您和您的家人決定哪種方案更適合您們。

參考: The Houston Chronicle (Feb. 15, 2019) “Elder Law: Which should I have—A Living trust or a will?”

What’s so Bad About Having a Will Probated?

“One of the purposes of probate is to determine who receives the property of the decedent. If the account is jointly owned, we already know that the surviving joint owner owns the property at the time of death.”

The process of probating a will and why it matters, is reviewed by nwi.com in the article “Estate Planning: Do wills need to be probated?” When most people refer to probate, they typically mean that a court appoints or approves a personal representative and opens the estate. If that is what is being described, an estate plan can be established without opening a probate estate. Not all wills are probated.

Bear in mind that the only assets subject to probate, are those that are controlled by the will. Assets that the decedent owned in his or her name alone without beneficiary designations are probate assets. If the asset is owned in two people’s names or contains a beneficiary designation or is a POD—Payable on Death—or TOD—Transfer on Death—those assets are not probate assets.

One reason to probate an estate, is to determine who receives the property of the person who has passed. If the account is owned jointly in two people’s names, typically a husband and wife or parent and child, then the surviving joint owner becomes the full owner at the time of death. A bank or financial institution will probably want to see a death certificate to verify that the other person on the account has passed.

This is also true for a CD—Certificate of Deposit—if there are two names on it.  It also applies to any real estate that is held in two names. Ownership for these assets, properly titled in more than one name, are not a big deal, if the titles have been done properly.

Therefore, using joint ownership or naming beneficiaries for most or all of the assets, removes the need to probate much of the will. However, in some instances, some attorneys like to present the will for probate, but ask that a personal representative not be appointed, and no estate opened. This is called “spreading the will for record” and it preserves the will. Wills need to be presented for probate within the statutory deadline for your state. These timeframes can range from six months to within three years of the death of the decedent (your estate planning attorney will know your state’s laws on this matter). If this is not done, then the will may not be accepted by the court as valid.

By spreading the will, the will is preserved in the outside chance that an asset is uncovered in the future, even after the statutory timeframe has expired. When the beneficiaries of the will are not the same as family members found under intestate statutes, like a pour-over will, where the trust receives all the property under the will, it makes this strategy especially valuable. Spreading the will further ensures that the trust estate plan will be carried out. Trusts are rarely presented to the court for probate.

In some regions, probate is a quick and relatively painless process. Depending on the situation, there may be little gained by over-engineering the estate just to avoid probate. Speak with your estate planning attorney about probate and also determine how much of your estate will be probate assets.

Reference: nwi.com (Jan. 20, 2019) “Estate Planning: Do wills need to be probated?”

The Right Documents for Estate Planning

“Make sure that you have the right documents in place to protect your family and yourself.”

Having a properly prepared estate plan, that includes all the important documents, including a will and power of attorney, is one of the most important ways to protect your family and yourself. Despite this fact, many adults still neglect to take care of this important task, reports Consumer Reports in its article “8 Essential Steps for Estate Planning.”

A survey from Caring.com showed that as many as 60% of adults don’t have estate planning documents. When they asked families with young children, fewer than one in ten have even designated a guardian to take care of their children, if both parents should die.

What happens when there’s no planning in place? Even the simplest things become more complicated, and complicated things become financial and legal nightmares. When there’s an emergency and decisions need to be made, the entire family is subjected to more stress and costs than would otherwise be necessary.

Here are the eight steps you need to take, right now, to protect your family:

1. Get the professional help you need. The change to the tax law may or may not impact your family and your estate plan, but you won’t know until you sit down with an estate planning attorney. Trying to do this online, may seem like a simpler way, but you will not have the same peace of mind as when you sit down with an experienced attorney—and one who knows your state’s laws.
2. Create a will. This is a legal document that explains how you want your assets to be distributed after you die. It names an executor to carry out your instructions. If you have minor children, this is an especially important document, since it is used to name their guardian. If you have no will when you die (called dying “intestate”), then the laws of your state determine how your assets are distributed and who rears your children. Depending on where you live, your spouse might not automatically inherit everything.
3. Discuss whether you need a Revocable Living Trust. In most states, when you pass away, your estate goes through a process called “probate.” The courts basically review your estate plan and determine whether everything looks right. The problem is that your will becomes a public document—and so does information about your assets. Some people prefer to keep their lives private by transferring assets to a revocable living trust, which distributes assets according to your instructions at your death. Titles to the assets must be changed, so they are “owned” by the trust. This is known as “funding” the trust. You still retain complete control of your assets, since you are the trustee. However, if you fail to retitle assets, the estate goes through probate. You will also still need a will to protect your minor children.
4. Review your beneficiaries. Whether you remember it or not, when you open many different kinds of accounts—banking, investment—you assign a beneficiary to receive the assets upon your death. Your will does not override the beneficiary designation. Therefore, if you haven’t changed your life insurance beneficiary, for instance, and your ex-wife is still named on the document, she’ll get the entire proceeds of the life insurance policy when you die. This is a very important task.
5. Have a Durable Power of Attorney (DPOA) created. This is something that protects you, while you are living. If you should become incapacitated, having a durable power of attorney in place will allow that person to manage your financial affairs. Make sure the institutions that have your accounts accept your attorneys’ POA form; you may need to get the one that the institution uses.
6. Don’t forget the Advance Directive. This is also known as a Living Will. It explains your wishes for medical procedures, if you are unable to communicate and explains what you want for end-of-life care. Make sure that your family members know that you have such a document and keep it accessible in case of an emergency.
7. Pick a Healthcare Proxy. The Healthcare Proxy, also known as the Durable Power of Attorney for Healthcare, names someone to convey your healthcare wishes. It should include a HIPAA release clause. This allows medical personnel to release your medical records and speak with the named person about your care.
8. Get it all organized. Think of this step as creating a user’s manual for yourself. All these plans won’t do any good, unless your loved ones know they exist and know where to locate them. Don’t put your estate planning documents and records in a bank safe deposit box, in case it is sealed on death. Your attorney will likely have an original, and you should have your original in a fire-proof safe in a secure location in your home.

Reference: Consumer Reports (Oct. 24, 2018) “8 Essential Steps for Estate Planning”

Be Cautious If You Receive an Inheritance 如果您要繼承遺產，請小心! (中英對照)

“My favorite aunt passed away last year, and I inherited $2,500,000 after her probate. The check came last week. It has been a nightmare! I am a pharmacist and know a lot about medicines but very little about managing money.”

The arrival of an enormous sum can be overwhelming to those who are not accustomed to handing money, even though it sounds like a problem we’d all love to have. The truth is, as discussed in “Take your time, plan wisely when you inherit” from Edmonds Beacon, when something like this happens it can be unnerving, like winning a huge lottery jackpot.

Because the will in this situation went through probate, the heir and the amount of money is public knowledge. The tension begins when people you don’t know—and some that you do—start calling with propositions. Sales calls come from shady operators, unknown and known financial advisors and long-lost cousins. The first thing you need is the financial and legal equivalent of a 10-foot-tall fence, complete with sentries.

Most big lottery winners are flat broke, several years after their big wins. Without the right help, it’s easy to go through this kind of money. Don’t rush and don’t be rushed into anything.

If you have children or grandchildren, they could benefit from this inheritance. Start by meeting with an experienced estate planning attorney. Your attorney will talk with you about the many tools, including trusts, that can be used to safeguard the inheritance for coming generations. You’ll also want to make sure your estate plan is up to date and that it includes having powers of attorney for financial and health matters.

You’ll also need a professional tax advisor, which is likely to be a CPA, and a financial advisor. Take your time in researching and checking references for these individuals and their firms. They should be working with your estate planning attorney as part of an integrated team. Having three advisors sounds like a lot. However, it actually works well: all three have knowledge in their fields and can serve as checks and balances on your behalf.

Draw up a roadmap for your life and action plan. Now that you don’t have to work for a living, do you want to continue working for other reasons, like satisfaction or service? Have you always dreamed of traveling? Is there a cause that matters to you?

And, don’t forget to deal with the tax side of this situation. Will there be earnings from the investments you make with the inheritance, and what will your tax liability be now? Should you pay off your existing mortgage or buy a new home?

If you are a recipient of Medicaid or SSI (Social Security Supplement Income), receiving an inheritance can immediately disqualify you for these important government benefits.  If you are a disabled person, being a beneficiary of an inheritance can also mean your government benefits will be terminated.  You will need to meet with an estate planning attorney to find out ways on how to preserve your government benefits. 

A sizable inheritance can be a blessing or a curse. Protect yourself and your inheritance by proceeding slowly, being skeptical of all the new well-wishers in your life and by making smart decisions.

Reference: Edmond’s Beacon (Oct. 10, 2018) “Take your time, plan wisely when you inherit”

“我最喜愛的姨媽去年去世了，遺囑認證後我繼承了2,500,000美元。支票上週來了。這是一場噩夢！我是一名藥劑師，對藥物瞭若指掌，但對理財卻一竅不通。“

對於那些不習慣理財的人來說，巨額資金的到來可會是不堪負荷的，儘管這聽起來像是我們夢寐以求的。事實是，正如“Take your time, plan wisely when you inherit” Edmonds Beacon所討論的那樣，當這樣的事情發生時，它可能令人不安，就像贏得巨額彩票一樣。

因為在這種情況下的遺囑需通過遺囑認證，繼承人和金額成了公開資料。當你不認識的人 - 以及一些你認識的人 - 開始有目的地致電給你時，你便會開始緊張起來。銷售電話來自不知名的經營者，未知的和認識的財務顧問以及久違的表親。你需要做的第一件事是建造一個財務和法律上的十尺圍牆並且有哨兵看守的。

大多數彩票得獎者都是在他們贏了的數年後才破產。沒有得到正確的幫助，這種錢很容易便會失掉了。不要焦急，不要匆匆忙忙做任何事。

如果你有子女或孫兒，他們可以從這種繼承中受益。首先要與經驗豐富的資產規劃律師會面。您的律師將與您討論該用什麼來保護你下一代的遺產，包括信託。您還需要確保您的資產計劃是最新的，並包括財務和醫療授權書。

您還需要一名專業的稅務顧問，可能是註冊會計師和財務顧問。花點時間研究和檢查這些個人及其公司的資料。他們應該與您的資產規劃律師合作，作為整個團隊的一部分。有三個顧問聽起來很多。然而，實際上這樣運作很好：這三個人都在他們的領域上有專業知識，可以相互監督。

為您的生活和行動計劃制定路線圖。既然您不必為生活而工作，您是否希望繼續工作以滿足其他原因，例如滿足感或服務？你一直夢想著旅行嗎？有什麼事情對你很重要？

並且，不要忘記處理這種情況的稅務。您繼承的資產會產生收益，您現在的納稅義務是什麼？您是否應該還清現有的貸款或購買新房？

如果您正接受醫療補助或SSI（社會安全生活補助金），收到遺產後這些重要的政府福利可能會立即被取消。 如果您是傷殘人士，作為遺產的受益人您的政府福利也有可能被終止。 您需要與資產規劃律師會面，以了解如何保障您的政府福利。

相當大的繼承可以是祝福或詛咒。從長計議，對生活中所有新的祝福者持懷疑態度並做出明智的決定來保護自己和你的資產。

參考: Edmond’s Beacon (Oct. 10, 2018) “Take your time, plan wisely when you inherit”