If I Move to Another State Do I Need to Update my Documents?
It’s a common question we get from clients who intend to move out of New Jersey. We also get calls from people moving to New Jersey who want us to review estate planning documents prepared in another state. These documents may include wills, powers of attorney, health care directives and trusts. Do these documents need to be updated simply because of a change in residency? While there isn’t one answer that fits everyone there are a common set of questions. First let’s consider the power of attorney and health care directive. Each of these documents is controlled by state law. The power of attorney typically allows a principal to designate an agent to make decisions and carry out financial tasks on behalf of the principal. The health care directive designates a health care representative to make decisions for the declarant and may also include an instruction directive (commonly known as a living will), which provides instruction and direction (typically in an end of life situation) regarding the declarant’s wishes for health care if the declarant in the future lacks decision making capacity and cannot communicate those wishes. As long as these documents are executed in accordance with New Jersey law they should be honored, however, if you move to
Longtime Partners but Never Married (Part 5)
In last week’s post about Bill and Mary, I told you that we applied for a guardian to be appointed for each of them. The court approved their neighbor and friend, Nancy. Bill had sufficient assets to pay for his care for at least several years. Mary did not. By the time we were able to get Nancy qualified as guardian so that she could access Mary’s assets, her unpaid nursing home bill was already up to $60,000. Nancy was able to determine that she had about $100,000 in total assets so we needed to quickly prepare for Medicaid. The fact that Bill and Nancy had lived many years like a married couple but never did marry was a potential problem. That’s because of Medicaid’s 5 year look back. Mary and Bill combined their income into one joint account to pay household bills. Documenting for Medicaid what Mary’s money was spent on vs. what Bill’s money was spent on wouldn’t be easy. We would need to establish that Mary spent her money and received something of equal value in product and/or service for her. To the extent any of her funds were spent to benefit Bill that would be considered a transfer for less than fair value and would cause a
Longtime Partners but Never Married (Part 4)
In my last 3 posts I have been telling you about the saga of Bill and Mary. First Bill had a stroke. Mary called concerned about how to care for him and still be able to afford to pay her bills. Most of the assets, including the house, are in Bill’s name. Should they spend it all on his care Medicaid could cover the care but that wouldn’t leave Mary with much. I suggested marriage as a possible solution. When Mary then had a stroke marriage no longer was a viable option. Additionally, neither Bill nor Mary could serve as agent under the powers of attorney each had executed and neither had chosen an alternate. Now we had a new problem. Who would be able and willing to act on behalf of Bill and Mary to manage their finances and make important decisions concerning their care? Nancy, a friend and neighbor, told me what she knew about their family history. Mary had a cousin on the West Coast and Bill had a sibling with whom he had not spoken in 20 years. Nancy said she was willing to help in any way she could. I explained to Mary that we would need to file a legal action to request that a judge appoint
Longtime Partners but Never Married (Part 3)
In this 3rd post on longtime partners living together but never married, Bill needed long term care and Mary was concerned about how to pay for it and at the same time be able to afford her own living expenses. As I explained last week, the house they lived in and most of the assets are in Bill’s name. The problem is that if Bill lives long enough in a facility he could run out of liquid assets and then be forced to sell the house, potentially leaving Mary homeless. I told Mary that a solution would be for Bill and Mary to marry, provided Bill has legal capacity, which would allow Mary to keep the home as an exempt asset and would allow her to take advantage of some other options as a community spouse. This all sounded great to Mary, who said she would discuss it with Bill. I told Mary we would need to act quickly since Bill would be obligated to pay the facility’s private pay rate until we could take the steps necessary to qualify him for Medicaid. Several weeks then passed and I did not hear from Mary. Finally, I did receive a call from Mary’s friend and neighbor, Nancy. Nancy told
Longtime Partners but Never Married (Part 2)
In my post last week I began to tell you about Bill and Mary. Partners for 50 years, they never actually tied the knot. Bill had a stroke and they are now faced with $14,000 per month in long term care expenses. The home they live in is owned by Bill. Mary is not on the deed. Bill also owns most of the assets. Mary was concerned for both Bill and herself. How would she be able to pay for Bill’s care and also maintain her own standard of living - something she said she could not do on her income and assets alone. Bill does not have long term care insurance so the only other option is Medicaid, however, I told Mary that he must spend down all his assets to less than $2000. The house would need to be sold as well. This obviously would be a problem for Mary since that house is her home. I asked her about Bill’s mental capacity since the stroke. She told me that while he needed help with all his activities of daily living and could not be cared for at home, mentally he was able to communicate and understand things. I then told her there was an option. If Bill and Mary were to
Long Time Partners but Never Married
A recent call we received started with an increasingly common problem. Mary had called because her partner, Bill had a stroke which landed him in the hospital. He failed to make enough progress to be able to go home and would need to stay in a long term care facility. Mary told me that he had executed a power of attorney designating her as his agent. When I asked about their relationship, she said they had been living together for almost 50 years but never did get married. They lived in a home that Bill owned alone. Mary’s name was not on the deed. She explained that they had a joint bank account into which their Social Security was deposited and from which their bills were paid. All other assets they kept separately. Knowing that the cost of long term care would be about $14,000 Mary was understandably concerned about how to pay for it and whether she would be able to use Bill’s assets to continue to pay the household expenses. Mary told me that Bill had more assets than she did. “What happens if he runs out of money”, she asked me. Since Bill does not have long term care insurance, I told her the only option would be Medicaid