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Insurance and Estate Planning

Estate planning is for everyone, no matter what assets you own, or the size of your family. Basic estate plans include a will, payable-on-death accounts (POD), IRAs, and other retirement plans that include beneficiaries. Some people may also include a trust, depending on whether it is beneficial or financially expedient to their individual circumstances. Life insurance is another tool for estate planning and can be a valuable addition to your estate planning strategy.

Life insurance is usually purchased by persons with families and is easily affordable if you get it at a relatively young age, especially if it is term life. You can purchase term life for as little as $10,000.00 to well over $1,000,000.00 with fixed premiums for a set period of time. The most common amount for policies are for $100,000.00 and are designed to replace the income lost by the premature death of the primary wage earner in a family.

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Estate Planning for Nursing Home Residents

If you or a loved one are planning on moving to a nursing home residence soon, you should be aware of the MassHealth requirements if you are unable to private pay for the cost. Nursing home care is expensive with yearly costs of $90,000.00 and more. Many low-income individuals will need MassHealth to pay for care but have to carefully plan for the transition.

There are ways to avoid losing a valuable asset to the Commonwealth of Massachusetts; Consulting with an estate planning lawyer to devise an estate plan that can protect your assets so that your heirs can enjoy them is strongly advised.

Qualifications for MassHealth Nursing Home Care

Any individual 65 and over cannot have more than $2,000.00 in “countable assets” to qualify for assistance from MassHealth. If you are a couple, then you may not own more than $120,900.00 in assets as of 2017.

Assets that are not counted towards your “countable asset” level include:

  • –  One motor vehicle
  • –  Home equity up to $840,000.00 as of 2017
  • –  Personal belongings
  • –  Life insurance with surrender value of $1,500.00 or less
  • –  $120,900.00 — community spouse resource allowance for one spouse continuing to live at home
  • –  Upper limit of $3,022.50 for a resident’s monthly maintenance allowed to the spouse living at home
  • –  Child, minor or adult, who is disabled and living at home—added monthly income of up to $607.00

If you are receiving SSI benefits, however, you qualify for MassHealth.

Selling Your Home

Some individuals, in order to pay for nursing home care, may sell their houses. MassHealth has a 5-year look-back period, that starts at the time of the application submission, in which the Commonwealth of Massachusetts will review all your financial transactions for the 5-years prior to your filing an application for assistance. You risk losing eligibility if you sold your home for under market value to your child, sibling, or anyone else, including transferring it to an irrevocable trust. Even helping a relative with college tuition payments during this time can deem you ineligible.

You can, however, transfer the home without a disqualification penalty so long as it is to these individuals or entities::

  • –  Your spouse
  • –  A child under the age of 21 who is disabled or blind
  • –  To a trust for the sole benefit of a disabled person under the age of 65
  • –  A sibling who had an equity interest in the home and lived there for at least one year before the MassHealth applicant was institutionalized
  • –  To a child who lived in the home and who cared for the MassHealth applicant for at the least 2-years just prior to institutionalization

Irrevocable Trusts

Placing the home and other assets in an irrevocable trust may provide protection from a MassHealth lien to recoup nursing home expenses.  A Life Estate Deed may be another alternative to an irrevocable trust.  After transferring the real estate into one of these options, one can continue to live in the home and upon your death, it passes to the beneficiary while avoiding probate.

Any income generated from the assets or any portion of the principal that could be paid to the applicant is considered a countable asset and could render the applicant ineligible for benefits. Be sure to consult with an estate planning lawyer if you are considering a transfer of your home to pay for nursing home care.

Consult Estate Planning Lawyer Patricia Bloom-McDonald

Estate planning for individuals who may or do need nursing home care can be tricky. If not done properly, it can delay eligibility for MassHealth and impose a hardship on the applicant and his/her family. Patricia Bloom-McDonald is an estate planning lawyer for seniors and families and has worked with the aging population for over 25 years; she can devise an estate plan for you or your loved one that may preserve valuable assets and enable you or your relative to remain eligible or to qualify for MassHealth benefits.

What You Need to Know About Power of Attorneys in Massachusetts

A Power of Attorney [POA] in Massachusetts, as in other states, is the grant of power to an individual to make the decisions you ordinarily would make in matters of financial, and business. It is an essential part of an estate plan, especially if you have business interests at stake or financial assets. Creating a POA is important no matter what your economic status is, and doing it now is highly advisable since you do not want these matters left up to the Probate Court.

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What are Pooled Trusts, Who Do They Benefit, Costs, and How Do They Work? How a Pooled Trust Benefits a MassHealth Recipient

If you are or have a relative who is disabled and needs MassHealth benefits, then a pooled trust may enable you or your loved one to receive funds while remaining eligible for MassHealth.

There are certain requirements for individuals to receive MassHealth benefits. If you are above a certain income or have assets exceeding the minimum amount ($2000.00 in countable assets) then you are ineligible. However, there are ways to receive funds while remaining eligible for benefits. One is to have funds deposited into a pooled trust, also known as a self-settled or (d)(4)(C) pooled trust. This is a trust set up by a non-profit organization that invests and manages funds deposited by many individuals who are disabled. Although the funds are used for the benefit of all, each person has a sub-account that is funded by the disabled party. Consult a lawyer for pooled trusts such as Patricia Bloom-McDonald who has considerable experience in advising and setting up trusts that can protect beneficiaries of MassHealth benefits.

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Do You Know Who Gets Access to Your Joint Account Upon Your Death?

Joint bank accounts can be a great idea for you or a parent. A joint account can enable a relative to write checks, withdraw funds or transfer them for your benefit. There may be an issue, however, when you pass away as to who gets the account and what happens to the account’s funds.

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