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
Medicaid When a Spouse Owns a Business – Part 2
In my blog post last week I wrote about a more frequent scenario we are seeing with married couple Medicaid applications. It’s one in which one or both spouses own a business from which they derive income. As I explained last week, Medicaid allows the healthy spouse to keep a certain amount of countable assets. The maximum this year is $137,400. In addition to that, however, there are certain non countable or exempt assets. The common ones are the principal residence and one car. But one exemption in particular applies to a business. Medicaid regulations specifically provide that non-home property that is used in a business or non business self-support activity that is essential to the means of self support of the Medicaid applicant or his/her spouse is excluded as an asset. Tools, equipment and other items that are used for trade or business and required for employment are assumed to be of a reasonable value and producing a reasonable rate of return and are excluded. That’s what the regulation says but what exactly does it mean? Equipment of the business is the only item specifically referenced. What about if the business is located on a piece of property that is owned by the applicant and/or spouse? The exception would appear to
Medicaid When a Spouse Owns a Business – Part 1
If you are a regular reader of this blog you know that in the case of a married couple where only one spouse is applying for Medicaid, the healthy spouse, known as the community spouse, is entitled to keep a certain amount of countable assets. The assets of both spouses are evaluated for eligibility purposes. It does not matter who owns them. They are totaled together then divided in half and the healthy spouse can keep one half, but only up to a limit of $137,400 (the limit for 2022) Certain other assets are exempt or non countable. The home and one car are the most common ones. Inaccessible assets are also not countable. We typically see that in the case of real estate owned with another person who refuses to sell. Income, on the other hand, is treated very differently. Only the applicant’s income is evaluated for eligibility purposes, not the healthy spouse’s income. Because both spouses are usually elderly and retired, the income tends to be limited to Social Security and pension. In the past few years, however, we have had several cases in our office in which the community spouse is still working. Again, that does not pose a problem since the community spouse’s income - no matter the amount
The Importance of Updating Your Will – Part 2
In last week’s post, I talked about two recent estate administration cases in our office. In each instance the decedent left a will but no living executor was available to serve. In the first case, the two children who inherited the estate equally were not named because at the time the will was executed they were too young to serve. They told me they wished to now serve as administrators together. This wouldn’t be a problem since as the closest relatives, under the New Jersey statute they each had first right to serve. The home is the primary asset, which they do not want to sell for the moment. There also is a small amount in a bank account. We applied on their behalf but they were upset when I informed them that they would need to post a bond to back up the assets. “But, we are the only heirs”, they replied. “Why do we have to pay several thousand dollars for a bond?” I explained that the court typically insists on it to protect any creditors. If the creditors don’t get paid, the surety company will make payment. The two children insisted that the estate debt was small and had already been taken care of. The court, however, doesn’t know that