The Rabalais Law Firm's La. Estates Blog

Medicaid Planning Not As Urgent With Long Term Care Insurance

Was working with a nice couple today. They were concerned that if they went into a nursing home, they would be forced to deplete their entire estate before being eligible for Medicaid. For many Louisiana residents seeking Medicaid eligibility, we assist them in transferring certain assets into their family's Medicaid Living Irrevocable Trust. But many families have to wait five years before they would qualify for Medicaid. This particular couple told me that they had recently purchased long term care insurance policies that would pay a $150/day for five years if they need the care. After reviewing other important information, I advised them that it was not necessary that they do any transfers at this time. When they go to the nursing home, they can do the transfers then. This will start a five-year penalty period under the new DRA 2005 rules. Since they have five years of long term care coverage with their policies, they won't have to deplete their life savings. When the five years runs, they won't have any more insurance benefits, but they will qualify for Medicaid because the five year penalty period will have expired. If you have questions about potential Louisiana Medicaid eligibility, feel free to e-mail me at paul@rabalaislaw.com, or give my office a call at (225) 329-2450, or fax me at (225) 329-2459.

Louisiana "Class Trust" a Great Gift To Grandchildren

Finished up a class trust today. You may want to consider this for your grandchildren or to any other group of beneficiaries. Let's say you want to leave a bequest to your grandchildren. You are concerned, however, that you may have more grandchildren after you die, and those grandchildren would be excluded. You can disignate in your Will or Trust that your leaving a bequest to the "class" of your grandchildren (or great-grandchildren), even though some of the members of the class may not be in existence at the time of your death. You might provide that the class closes when the oldest member reaches the age of 25. At that time, there will be separate trust accounts established for each of the grandchildren in existence when the oldest grandchild reaches the age of 25. Using this class trust, you can be sure that grandchildren born after your death will not be excluded from this generous bequest. If you'd like to know more about Louisiana estate planning, or if you'd like me to answer any questions you have, or if you'd like to go ahead and get started with your estate planning, give our office a call at (225) 329-2450, or send me an e-mail at paul@rabalaislaw.com Until next time, Paul Rabalais

New Penalty Period Begin Date in Louisiana

Under the old Louisiana Medicaid eligibility rules, it always made sense to make transfers earlier rather than later. That's because the penalty period started when the transfer was made.

Under the new rules in the Louisiana Medicaid Eligibility Manual, reissued February 7, 2008, it provides that, for assets transferred on or after February 8, 2006, the penalty period begins the month the applicant is determined eligible for Medicaid except for the transfer of resources.

Apparently, this means that if you transfer your resources, then you will be penalized for a certain number of months (Value of transferred resources divided by $4,000), but the Penalty Period does not start until you apply for Medicaid and would otherwise qualify (you have less than $2,000 of countable resources), except for the fact that you made the transfer. In this case, you will be denied eligibility but it will start the penalty period.

These new Louisiana Medicaid eligibility rules create lots of new planning opportunities. If you or a loved one want to know how to protect your assets from the rising cost of long term care, send me an e-mail with the particulars at paul@rabalaislaw.com

Paul Rabalais

Surviving Spouse Can't Sell The Family Home Without Legal Help

We get lots of calls from surviving spouses inquiring about transacting the family home after the death of their wife or husband. Perhaps they want to sell the home to move into something smaller (or bigger). Or perhaps they want to refinance the mortgage (or take out a new first or second mortgage). One of two things must be done so that the surviving spouse will have this authority: Appoint an executor or administrator. Have the surviving spouse named as executor or administrator of the deceased spouse's succession. If the deceased spouse had a Will, the Will likely would have named and executor - ofen the surviving spouse. If the deceased spouse had no Will, then the surviving spouse can petition the court to be appointed as the administrator of the succession. Getting this done typically gives the surviving spouse the authority she needs to transact the family home (or other succession assets). Complete the succession without an administration. If there are no complicating factors, a succession can be completed without an executor or administrator being appointed. A judge will sign an Order which requires that the home and succession assets be transferred to the appropriate heirs. If the surviving spouse is inheriting ownership of the deceased spouse's interest in the home, then the surviving spouse will have the authority to transact it. If the husband died without a Will and he had children, then the surviving spouse will need the consent of the children to sell the home. If you want to know what your rights are in succession property, feel free to send me an e-mail and I'll be happy to respond and advise you on your rights and obligations. I get e-mails often from heirs who are confused about Louisiana succession law. I usually help straighten it out - in simple terms. Just e-mail me at paul@rabalaislaw.com Until next time, Paul Rabalais

Situation Where Revocable Living Trust Fits Well

Worked on a Louisiana Revocable Living Trust yesterday. It was a good fit for the RLT. The couple has no children. His mother had died a few years ago and she had a revocable living trust at the time of her death, and the husband was the trustee. He mentioned it was a breeze to settle her trust with his siblings - no lawyers, no probate, no problem. It was good that he was familiar with how RLTs work. They own some real estate outside of Louisiana so they wanted to avoid the ancillary probate - another good reason to have a Louisiana Revocable Living Trust. By using the trust, married couples have the ability to provide income to a certain group of people after the married couple dies, and then provide that the trust assets will benefit another younger group of people after the successor income beneficiaries die. The list of options is really unlimited. If you want to find out whether a Louisiana revocable living trust could make things simple for you and your family, shoot me an e-mail at paul@rabalaislaw.com, and I'll be happy to put my two cents in. Paul Rabalais

Two Different - But Similar - Medicaid Planning Cases

Worked with two different families yesterday. They both had the same concerns. Dad was going into the nursing home and he faced depleting his entire estate before qualifying for Medicaid. I feel that the work we did today will save two Louisiana famiiles about $700,000. A couple days ago, a gentleman e-mailed me and said his father was going into the nursing home. The father owns a home and about $500,000 of countable resources. I advised him that his father would have to deplete more than $498,000 before qualifying for Medicaid. Then, once on Medicaid, the state would have a lien on his father's home so that after his father died, Medicaid could force the home to be sold so that Medicaid could be reimbursed for payments Medicaid made while his father was in the nursing home. I told him it was urgent that we start the proper Medicaid planning immediately. Every month they wait to get started will cost them $5,000-$6,000. We'll help protect most of Dad's estate. The second family I met with had similar circumstances, but Dad had about $80,000 of countable resources. Mom had died a few years ago without a Will and no succession was ever completed. Using my "gift and return" strategy, we'll save about $40,000 of Dad's funds, even though he is going into the nursing home in the next few days. I've been getting numerous e-mails from folks like yourself who don't know where to start. It's been fun providing helpful information to those folks in my reply e-mails. If you or someone you love is concerned about losing their assets due to the rising costs of Louisiana long-term care, send me an e-mail with your concerns, and a summary of the assets and income, and I'll do what I can to help. My e-mail address is paul@rabalaislaw.com Paul Rabalais