You may find a point in time when your parent needs assistance with their finances. Taking over financial responsibility for a parent can be a touchy topic, but if done properly, can often provide a great sense of relief.

If you have been appointed as your parent’s financial power of attorney and the time has come to begin assisting them, here are a few pointers to ease the transition:
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• ​​​​Begin the conversation early. Do not wait until your parent begins to show signs of senility or other serious health complications to talk about how they would like their business affairs handled. Ask your loved one to prepare a list of their assets. This list should include other information such as locations of assets, helpful business professionals, passwords, etc. If your parent is willing, you might begin by working together to pay bills, review bank accounts, balance checkbooks and prepare taxes.
• Understand your role. As a financial power of attorney, you owe a special duty to care for your loved one’s assets called a “fiduciary duty”. This means that you have a legal obligation to act in their best interest and to do everything in your power to preserve the assets under your control. An intentional failure to do so can have you facing legal consequences.
• Be respectful to your loved one. Accepting help from someone, even a child or other trusted individual, is difficult for many people. Once you assume full responsibility for their finances, make an extra effort to maintain an open line of communication with your loved one to reassure them of their financial status.
• Keep good records. As a financial agent for someone else, your record keeping needs to be clear and concise so you can provide quick and accurate answers regarding the current state of your loved one’s finances. If you are not an organized person, you may want to reconsider accepting the role as financial power of attorney. Banks with a trust department are usually willing to act as financial power of attorney for a fee if a family member is not able or willing to serve in that capacity.

If your loved one is facing admission to a nursing home for long-term care and you’re concerned that you won’t have enough money to cover their expenses, there are a few things you should consider. With an average cost of over $5,600 per month for a semi-private nursing home room in Kansas (2019 Genworth Cost of Care Survey), very few of us could afford to private pay for a nursing facility for very long. KanCare is the Kansas Medicaid Program that you will apply to if you need government benefits to assist with payment in Kansas.

Too often, well-intentioned friends, neighbors and non-elder law attorneys or other professionals make recommendations on how to apply for Medicaid benefits to cover nursing home expenses that result in a denial or extended delays in benefits, both of which result in unnecessary expenses to the applicant. To prevent this from happening to you, we’re sharing some things to consider:

1. Consider who is giving you advice. Everyone seems to have advice to give in this situation, because many people have experience with someone going into the nursing home. However, Medicaid rules change frequently and planning is extremely specialized to each individual’s personal needs and their assets. Thus, what worked for your neighbor’s grandmother WILL NOT work exactly the same for your loved one.
2. Seek knowledge from someone who is going to look out for your best interest. This is typically going to be someone that you hire, like an experienced elder law attorney. While most nursing homes offer to file your Medicaid application for free, you should keep in mind that their goal is simply to get you eligible for benefits so that they can continue to receive payment for their services. It isn’t their job, nor do they have the time or the resources, to put an elaborate Medicaid plan in place. Alternatively, an elder law attorney hired by you is there to create a plan that allows you to preserve the maximum amount possible and establish eligibility quickly and efficiently in the most cost-effective manner.
3. Be careful when spending down assets for eligibility and be honest on your application. Recommendations on how to spend down assets in order to qualify for Medicaid benefits from anyone other than a highly trained individual, like an elder law attorney, can result in a prolonged denial of Medicaid benefits. If an individual does become eligible, but it is later determined that they improperly spent down assets that were not reported correctly, they could find themselves facing fraud charges. Elder law is a complicated body of law and without a full understanding of the rules, you can easily and unintentionally make costly mistakes.
4. If you have filed an application and been denied, don’t despair. While it is better to not be in this situation, it doesn’t mean that all hope is lost. Because elder law is not generally well understood by the public, mistakes commonly happen with people who are sincerely trying to help their loved one receive the financial assistance they need for nursing home care. As the phrase goes, “You don’t know what you don’t know.” As quickly as you are able, you will want to make an appointment with an experienced elder law attorney to discuss whether an appeal is possible.

Now that you are armed with more knowledge, remember to consult with an experienced elder law attorney should you need to file for Medicaid benefits in the future. More than one client has told us after we corrected an inaccurately filed Medicaid application, “I wish I would have just come to see you first!”

If you have questions about Kansas elder law or Medicaid planning, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters.

It’s not uncommon for new clients to be undecided on what type of estate planning vehicle will work best for their situation. A good attorney will listen carefully to a client’s needs and wants to suggest the ideal estate plan to achieve a client’s goals (or explain why those goals are unrealistic or unachievable).

To help you prepare for your initial visit with your estate planning attorney, we’ve put together some of the questions you should consider before your meeting. This list isn’t comprehensive, but if you can answer most of these questions, your attorney will be better able to guide you toward the type of estate plan that will best serve your needs. 

• Who would you want to act as your agent for healthcare and financial purposes if you were incapacitated?
• Who would you want to be in charge of your estate after your death?
• Are you planning for distributions to minor children?
  • If yes, do any of these children have special needs that cause you concern, such as a disability or health condition?
  • Have you selected guardians and conservators to care for those minor children in the event of your death?
• Are you planning for distributions to adult children?
  • If yes, do any of these children have special needs or circumstances that cause you concern, such as creditor issues, substance abuse, rocky relationships, etc.?
  • Is there any conflict between the children that causes you concern?
• If you are married, do you have any concerns you wish to address regarding distributions to your surviving spouse? (ie…restrictions on property transfer if remarriage occurs, liquidation of property, etc.)
• Do you want your estate details to remain private after your death?
• Are you concerned about the speed of the distributions to your heirs after your death?
• Do you own a business outright or as a partner/shareholder?
  • If yes, do you already have a succession plan and a dissolution plan?
  • Do any of your children work with you in the business?
• Do you own real estate, wind energy, or minerals?
  • If yes, is/are the real estate, wind energy, or minerals located in Kansas or in another state?
  • Are the minerals and wind energy currently producing?
  • How is ownership currently titled? (jointly with spouse, tenants in common, sole owner)
• Do you have a taxable estate? ($11,580,000 for married couples in 2020)
• Are you concerned about capital gains taxes?
• If you are a single person with no children who would you like your property to go to after your death?
• Are you interested in supporting or establishing a charitable organization after your death?
• Are you concerned about preserving your assets for your beneficiaries in the event you need long-term nursing home care?
• Is life insurance or long-term care insurance part of your plan?

​If you have questions about Kansas estate planning, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters.

Q:       Our son is leaving for college this week. He has signed a Health Care Power of Attorney, Durable General Power of Attorney and a HIPAA release. Is there anything else legally that we need to do before he leaves?

A:       First of all, congratulations on your son’s new adventure. Sounds like he has received some solid advice even before he moves on to pursue his higher education.

It is great that your son completed the important legal step of executing Powers of Attorney and a HIPAA. These documents likely will be his most utilized legal instruments until he graduates.

Unless your son feels extremely comfortable keeping his signed estate planning documents with him while away at college, I would recommend that he place the originals of these documents in your family bank box or fireproof safe. The originals should always remain in a safe location and only copies should be provided to others, barring a few exceptions. However, it is important that he have access to a copy of the documents while away from home. I also would recommend that he provide a copy of these documents to anyone he has named to act as his agent under the Powers of Attorney. Further, I suggest that he and his agents all keep a scanned copy of these documents on their phones for easy access in the case of an emergency. Most attorneys routinely keep a hard and/or an electronic copy of these papers in their client files that can be sent to doctors, hospitals, etc. if a client needs them, which will give you another way to access the documents if you do not have them. However, emergencies do not always happen during business hours and so it is a good idea to try to keep a copy close-at-hand.

If your son has a chronic health condition that will require constant monitoring and checkups while he is away from home, your son may want to provide a copy of his Health Care Power of Attorney and HIPAA to the medical providers at his new location. This will expedite communication between his new health care providers and his appointed agents in the event of an emergency.
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If you have questions, about any estate planning matter in Kansas, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters.

Q:        I have changed my mind about who I want to serve as my Executor. How complicated is it to make that change in my Will?

A:        As long as you are mentally competent, you can revise your Will in any way you wish. We recommend the use of a Codicil when a person wants to make minor changes to an existing Last Will and Testament. A Codicil is a short legal document that serves as a type of addendum to your existing Will. Generally speaking, this is a quick and easy change.

The language contained in your Codicil supersedes the language contained in your original Will, replacing the old language. The Codicil is executed in the same manner as your original Will, in that you sign the document before a notary public and two disinterested witnesses. Your original Codicil and Will should always be stored together in a fire-proof location. In the situation you describe, a Codicil would be the most cost-effective choice to achieve your desired change. If however, you decide to revise multiple provisions within your original Will, you may want to consider simply executing a new Last Will and Testament, as a Codicil under these circumstances would likely cost the same as a new Will and executing a new Last Will and Testament would be clearer and more concise. You will also want to keep in mind that when you have a Will-based estate plan your Last Will and Testament and any Codicils will be filed of public record. Therefore, if you would not want someone to know about a change that you made, you might decide it is more prudent to simply sign a new Last Will and Testament rather than have the changes that you made to your planning filed with the Court.
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If you have questions, about any estate planning matter in Kansas, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters.

Q:  What happens if my husband and I can’t agree on what we want in our Will or Trust? Do we need to have separate lawyers prepare our estate planning documents?

A:  Maybe. When couples choose to do estate planning with one attorney, complications can arise when the couple disagrees with how their estate plan should be drafted. If the disagreements are minor and the couple is otherwise amicable, you can have the same attorney work on a mutually agreeable resolution and draft all your estate planning documents. However, if the differences of opinion remain substantial and/or the couple has an adversarial relationship, it may be prudent for each individual to seek independent legal counsel. This will ensure that both husband and wife have received fair, unbiased advice and their estate planning reflects their individual wishes. Please be aware, though, that spouses have certain property rights that can only be waived if they have a prenuptial agreement or consent to one another’s planning.

Here are just a few of the common points of contention between couples we have encountered over the years:

1. One spouse wants to leave a substantially larger (or smaller) inheritance to one or more of their children than does the other spouse. This is often common when a child is involved in a business venture with the parents and the other children are not.
2. One spouse doesn’t want the surviving spouse to have control over their assets in the event of a remarriage.
3. The spouses disagree on who would be the best conservators/guardians for their minor children.
4. One spouse has “family property” he/she inherited from his/her family and wants said property to remain in their bloodline rather than go to their surviving spouse.
5. A difference of opinion on how to treat “his, her and our” children is very common in secondary marriages.
6. Adult children from a first marriage often want their parent to severely limit any inheritance to a stepparent.
7. If a child has an addiction, is financially irresponsible, or has a troubled marriage/relationship, spouses are often at odds about what, if anything, the child should receive by way of inheritance.

​Please remember, for every problem, there exists a solution. Your willingness to compromise on non-essential items and to have an open mind are essential to a successful plan. Additionally, the experience and expertise your estate planning attorney brings to the table also is a key element. If you have questions, about any estate planning matter in Kansas, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters.

Q:        My brother-in-law told me that his assets are safe from any Medicaid claims that he might encounter in the future for nursing home care because he has a Revocable Trust. I also have a Revocable Trust, but I didn’t think it protected my assets from Medicaid claims.  Who is correct?

A:        You are. A Revocable Trust does NOT protect your assets from a Medicaid recovery claim against you. A Revocable Trust allows the creator/grantor (you) to make any changes to the Trust at any point in their lifetime, as long as they are competent. Because you have so much control over a Revocable Trust and are the beneficiary of the trust during your lifetime, Medicaid law allows for a claim to be made against assets held in a Revocable Trust just as they could make a claim over assets owned in your individual name. If you or your brother-in-law are concerned about protecting your property and/or other assets from future Medicaid claims related to nursing home or hospital expenses, you need to visit with an estate planning attorney well versed in elder law matters.

​Generally speaking, if you want to protect certain assets from creditor claims, including Medicaid, your assets must be owned by an IRREVOCABLE Trust, which CANNOT be controlled by you in any way. There are Irrevocable Trusts designed specifically for individuals who are concerned about protecting family assets, such as farm and ranch property that has been in the family for generations, and minimizing the risk of losing those assets to pay for long-term nursing home care. Be aware that this type of planning typically involves making a gift and triggering the 5-year look-back for Medicaid eligibility, so time is of the essence. Postponing planning until it appears that long-term nursing home care is inevitable can significantly decrease your ability to protect many of your assets. However, if you are currently in such a situation where you are facing immediate nursing home admission, don’t despair, there may be other options available to you.

If you have questions, it is critically important that you seek out an attorney who understands the Medicaid system as it relates to elder care matters in your State. If you have questions about any estate planning or Medicaid planning matter in Kansas, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters.

Q: My mother is a relatively healthy 80 year old. A neighbor suggest that we transfer her home to me and have her retain a life estate interest, so she could avoid losing out on benefits from Medicaid, should she need nursing home care in the next few years. I am an only child and my father passed away years ago. What do you think about this idea?

​A: If the life estate deed is recorded at least five years before your mother requires a full-time nursing home care, this transfer should not bar her from Medicaid qualification. The rules on Medicaid qualifications for this type of situation are complicated to say the least. However, an overly simplified answer would be that her life estate interest will not be counted as a resource for KanCare (Medicaid program in Kansas) qualification purposes.

Maintaining your mother’s home while she is in the nursing facility could potentially strain your finances. If she uses a life estate deed, there are other issues you both should consider, including:

1.  Sale. If you plan to sell your mother’s home while she is alive, be aware that selling the house will require your and your mother’s consent. Your mother’s life estate interest has a value and such interest likely will then disqualify her from receiving KanCare benefits for a period of time, during which she will have to private pay for her nursing home care.

2.  Gifting and Capital Gains Tax. Remember, that even though you don’t have a tangible asset yet due to your Mom’s life estate interest, you have still been gifted the residuary value of the home. Property that is gifted during your mother’s lifetime does not get a step-up in basis at her death, meaning you will likely have to pay capital gains tax on the property if you sell it. The tax you will owe after the sale could be substantial and will depend on factors such as what your mother paid for the property when she purchased it and what you sell the home for. Additionally, this will result in a penalty if your mother goes into a nursing facility and needs to become Medicaid eligible within 5 years of making the gift.

3.  Death of Residuary Owner. What happens if your mother gifts you her home, maintains her life estate and then you die before she does? The property would then go to your estate, which may not be what your mother would want.

Instead of deeding the house to you and having your mother retain a life estate interest, your mother may want to consider creating an irrevocable trust and deeding the house to the trust. This gives you a lot more flexibility. The trustee could sell the house and the sale proceeds would not disqualify your mother from KanCare benefits. If the house is not sold, then when your mother passes away, the trust could be set up in such a way that you would receive a “stepped-up basis”, resulting in no capital gains taxes if and when you sold the house.

Be aware, that this type of trust is very complicated and not something that should be attempted on your own or without expert guidance. Please see an experienced long-term care estate planning attorney to determine the best course of action for your mother’s unique situation.
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For more information on Real Estate and Medicaid planning, contact Davis & McCann, P. A., Dodge City, KS. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and focus our practice on providing clients with the best legal advice on estate planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters.

​If you’re age 65 or older, issues like retirement and long-term care planning are probably more frequent topics of your conversation. Even if you’re not in this population group, chances are you know and care for someone who is.  Research from the U. S. Department of Health and Human Services suggests that if you are age 65 or older, you’re most likely going to need long-term care at some point in your life. Unless you are sufficiently wealthy or exceptionally poor, it would seem wise to do some advanced planning to cope with the increasing health care costs that will accompany long-term care stays.
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Options you may want to investigate include, but are not limited to:
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1. Long-term Care Insurance. The older you are and the longer you wait to obtain insurance, the more expensive it will become. Costs for long-term care insurance (LTCI) tend to be expensive and premiums will most likely rise over your lifetime. With average premiums running at $2,700 a year (per industry research firm, LifePlans), seniors may find LTCI too cost prohibitive to be a realistic option. Additionally, your age or current health condition may disqualify you from obtaining this type of insurance.

2. Life Insurance. Some insurance companies offer life insurance with long-term care riders. With this type of policy, your beneficiaries may still receive a death benefit even if you use long-term care rider benefits. With traditional LTCI, there is no death benefit paid to your beneficiaries after your death.
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3. Family Members. Your immediate or extended family members may be able and willing to care for you or pay for your health care costs. With annual semi-private nursing home room costs running on average at $90,000 annually, according to a 2019 Genworth study, few families can afford to cover these costs for a year, let alone for multiple years.

4. Medicare. Kansas Medicare program (KanCare) does NOT cover long-term care expenses for patients requiring full nursing home care, except for very limited circumstances.