What is a Revocable Living Trust and Why Would I want to Use One?

     A trust is a legal arrangement where a person called a trustee holds assets on behalf of one or more beneficiaries. The trust document will state the rules that the person making the trust wants the trustee to follow when managing the trust property. A revocable living trust is created during the lifetime of the person making the trust. The trust names a trustee who holds title to the trust property and performs the day-to-day management of the trust. The creator of the trust retains the power to revoke the trust and take back the assets. The creator may also change the trust terms during their lifetime. The creator of the revocable trust is often a trustee and a beneficiary of the trust during his or her lifetime. 

     A person may want to create a revocable trust to have a plan in place if they ever become unable to manage their own assets. If the creator of the trust becomes unable to serve as their own trustee for health or other reasons, a successor trustee is named in the trust document. The successor trustee will then manage the trust for the creator’s benefit according to the instructions in the trust document. The trustee invests the assets prudently, and pays the creator’s debts and living expenses. The living trust is generally safer than a general power of attorney for purposes of managing the creator’s property in the event of his or her incapacity. The successor trustee can also continue trust administration without delay upon the creator’s incapacity.

     Assets held in a revocable trust during the creator’s lifetime, or paid to the trust at the creator’s death by beneficiary designation, are not included in the creator’s probate estate. This could result in reducing the expenses of estate administration. A revocable trust also keeps the creator’s assets private because the trust document is private, unlike a will, which is a recorded public document. A person who is considering setting up a revocable living trust should talk to an experienced attorney who can advise them whether this type of trust would be beneficial for them.

Should I Become Mom or Dad's Legal Guardian?

As our parents become older, one of the most noticeable changes is their inability to think as clearly as they once did. Unfortunately, in some cases it becomes so severe that they are unable to make important decisions on things such as their health and medical treatment. If your parent is unable to handle matters himself or herself, you may need to consider guardianship. Just as with a child, you can act as your adult parent’s legal guardian.

Petitioning for guardianship is a serious matter and involves taking legal action. If a judge finds that your parent is incapacitated, he or she may appoint you as guardian to make personal and health care decisions for your parent. In guardianship proceedings, “incapacitated” means that the parent is incapable of meeting their health, care, safety, or therapeutic needs without the assistance or protection of another person. An incapacitated person may be a person who has a physical or mental problem that prevents them from taking care of their basic needs and they are in danger of substantial harm.

The legal guardian makes everyday decisions about how the parent lives. These decisions include decisions about health and medical treatment, where the person lives, and their social activities. It is the guardian’s responsibility to act in the best interest of the parent. This can be a difficult subject to discuss among your family. While you may believe that your parent lacks the mental capacity they once had, they may not feel this way. They may feel extremely dependent and vulnerable because they can no longer handle their own lives. This can cause turmoil between a parent and adult child and can go as far as the elderly parent appointing an attorney to object the guardianship. In other circumstances, if there are multiple children involved, there may be a dispute as to who will become mom or dad’s legal guardian.

Written by Heather W. Winter, Esquire

What are the Options for Living Facilities for Mom and Dad?

Whether the search for housing is due to a serious medical condition or the desire for a lifestyle change, finding the right place to live can be both stressful and challenging for the senior and their family. There are many options to consider when looking at housing facilities for mom and dad. Four options that you may want to consider are Senior Apartments, Assisted Living, Group Homes, and Continuing Care Retirement Communities.

Senior Apartments are subsidized apartments for low-income elders who are still independent. They are completely specialized to take care of the needs of the elderly. Because they cater to low-income elders, they are usually run by a charitable organization or the government.

Another option is an assisted living facility. An assisted living facility provides a small amount of supervision, but residents still have a great deal of independence. The facility provides help and support when needed throughout the day, including minor help with medications. Most facilities like this provide a wide array of services as well as daily activities to keep the residents active. Assisted living may be a good choice if the senior needs more personal care services than what could feasibly be provided at home and the senior doesn’t need continuous medical care and supervision.

Group Homes are home facilities where an elder has a roommate that he or she lives with. The facility usually provides housekeeping, but does not necessarily provide any type of health care. The group home is ideal for companionship and splits expenses between the two that live together.

Finally, there are Continuing Care Retirement Communities to consider. Continuing Care Retirement Communities are complexes that provide all types of care and housing. The facilities typically include independent living, assisted living, and nursing home care in one location, so the senior can stay in the same facility as their needs change over time. This is ideal for many elders who want to continue their independence, have a large group of people to interact with, and to have an array of activities to participate in. This type of community is also ideal for those who have a spouse who requires a higher level of care or who would like to live and age in one specific facility until they pass away.

We encourage you to contact the Virginia Department for the Aging or any other contact that may be able to help you decide what facility would be best for your elderly parent.

Written by Heather W. Winter, Esquire

World Autism Awareness Day

Today, April 2, 2015, marks the eighth annual World Autism Awareness Day. Autism affects 1 in 68 children and 1 in 42 boys. Hall & Hall joins the effort to inspire compassion, empowerment and hope by wearing blue on World Autism Awareness Day. For more information about autism, please visit: https://www.autismspeaks.org

Written by Heather W. Winter, Esquire

What is Medicaid Asset Protection Planning for Seniors?

Asset protection planning helps plan for how to pay for long term care. The national average cost of a nursing home is over $6,000 per month. Nursing home costs generally exceed the average person’s ability to privately pay, and approximately 60% of nursing home residents use Medicaid to pay for their care. Because of the high cost of long term care, Medicaid planning recognizes that an individual may need at some point to try to qualify for Medicaid to pay for long term care in a nursing home. Medicaid is a needs-based program with its own current and ever-changing requirements. To financially qualify for Medicaid, a person is permitted to have $2,000 in assets and may keep only $40 of income. A person may be penalized for gifts or transfers made for less than fair market value. For each approximately $6,000 gift during the five year period immediately prior to any Medicaid application, Medicaid will impose a one month penalty. There are complicated planning techniques to help put individuals in a better position to qualify when they need long term care in a nursing home. Careful planning can also help to protect the person’s estate, whether to provide for a spouse or for children.

Written by Heather W. Winter, Esquire

What is a Special Needs Trust and Why is One Important?

Sometimes referred to as a supplemental needs trust, a Special Needs Trusts (SNT) may be created to benefit a family member or close friend who has a disability.  The trust is set up for a person with special needs to supplement any benefits the person with special needs may receive from government programs. Any funds in a SNT will not be counted for purposes of qualifying and maintaining eligibility for certain governmental benefits programs. Governmental programs that require the protection of a special needs trust such as Supplemental Security Income, Medicaid, and Veterans Benefits, are needs-based programs and the person who you want to provide for may be disqualified from these programs if the person held the assets or funds directly.

Programs like SSI and Medicaid only meet basic needs such as food and housing. The SNT can give the means to provide the disabled person with an enhanced quality of life. The trust pays for supplemental and extra care over and above what the government will pay. The trust funds are disbursed to third parties who provide goods and services for use and enjoyment by the disabled person. The person who manages the trust assets, called the trustee, is able to purchase things like a phone, a computer and electronics, a television, a vehicle, cable and internet services, clothing, tuition, books, travel, entertainment, household furnishings and furniture, special accommodations for housing, and other items that allow the beneficiary a richer life.

If the trust is funded during the lifetime of the person who established the trust, it is effective immediately, and other family members, including grandparents, aunts, uncles, brothers, sisters, or friends can give money to the trust either by writing a check or by naming the trust as a beneficiary in their will. A parent of a disabled child may also choose to purchase a life insurance policy payable to the trust.

The person making the trust may attach an optional letter of intent, which is a letter expressing their wishes on how the funds should be used, along with special notes about the disabled person’s preferences.

The trust is beneficial to families and friends of disabled people receiving government benefits who want to enhance that person’s quality of life. Even if a disabled person is not currently receiving government benefits, the trust protects public benefit eligibility in the future or offers a way to assist in managing the assets of a special needs person.

Written by Heather W. Winter, Esquire

What is an Advance Medical Directive and Why Should I Have One?

An advance medical directive is a written document that names an agent or agents to make health care decisions for him or her in the event that they are incapable of making an informed decision. The document can also include what’s called a “living will,” which states what kinds of treatment you would want or would not want for life-prolonging treatment if you are diagnosed with a terminal condition and are unable to express your own wishes. Everyone should have an advance medical directive, no matter their age or health. The advance medical directive helps to plan for uncertainty in the future, such as an illness or car accident. Of course, the document does not take away your ability to act. You can still make health care decisions for yourself until it is determined you cannot make decisions. The document states your choices for health care or names someone to make those choices for you if you are unable to make decisions about your medical treatment. It is also a good idea to update who you name as agent in the event of a separation or divorce. There is no automatic revocation of the advance medical directive upon separation or divorce.

Written by Heather W. Winter, Esquire