Life Happens

April 22nd, 2023

Episode Transcript

(00:05):
Good morning everybody. This is LifeHappens Radio. This is our weekly radio
program for baby boomers and their familieswhere we address the challenges we all face
as we age. We talk aboutaging as a lifestyle, the issue,
the issues that must be confronted,and the careful planning that's required to avoid
crises in the future. Life Happenswill provide you with tools to educate and
prepare yourself for events like preparing forretirement, protecting your income and assets,

(00:29):
planning to pay for nursing, homecare and home care, special needs wills
and trusts, planning for an untimelydeath, and resolving disputes in and out
of court. As the laws andnecessities for planning and care continue to evolve,
Life Happens will help you make smartdecisions to assure that your goals are
reached and your needs are met foryou and your family. So again,
good morning, everybody. This isLife Happens Radio. I'm Frank Hemming.

(00:51):
I'm the senior associate attorney in theLatham office for Pierre O'Connor and Strauss.
Both partners, lou Piero and AaronConnor, are traveling this week, so
they've asked the associates to take theshow this week, which is hopefully a
good thing. I guess we'll haveto see how that goes. So in
the co pilot's chair, I havemiss Kristen Peck. Hi, Kristen,
Hi, pray. How are yougood? How are you? I'm good.

(01:11):
Thanks for coming in and sitting withme. I'm glad that I have
somebody to do this with because Idon't think people would want me to talk
by myself for the amount of thetime we have here on the program today.
Oh no, you do the medicaid. Oh it's not medicaid Mondays anymore.
It's it is yeah, Oh ohit is. Yeah, I have
that right here, so you're already. You're already kind of getting where I

(01:32):
want to go for a part ofthis. But I'm a mind reader.
Yeah, so yeah, No,it will not be a medicaid specific show
today. UM. It will probablybe come up time to time because if
I'm around, it's usually gonna comeup because medicaid is a lot of what
I do. But Kristen does notdo Medicaid. He does a lot of
our drafting, trust planning, willplanning, estate planning. UM. In

(01:53):
some instances, differ in even moreso than I do, so so it's
not just a medicaid focused show today. But thank you for for being here
this morning. It's looking a littlegloomy outside. It's a little humid outside,
I think, as we're supposed toget rained later later this evening.
But but well, we'll try tomake the next hour or so worth worth

(02:13):
listening to. So with that said, UM, normally the beginning part of
the show, I'd like to talkabout happenings in the office, things we're
seeing. But in some ways thisshow is actually going to be a lot
more about that kind of stuff ingeneral, unless we get callers. So
if you are out there and youwant to give us a call, it
is a call in show, andthe call in number is one eight hundred

(02:34):
talk WGY or one eight hundred andeight two five five nine four nine.
But assuming, um, if we'rejust going to talk about what I've got,
what I've got queued up over hereis we're just gonna tell some client
stories, and we're gonna talk aboutwhat we're seeing and what we've seen and
some things that have gone well andsome things maybe that haven't gone so well.
And tried just to steer you ina good direction, to either know
what you should be doing or maybetalk to you a little bit about not

(02:58):
doing some other things. So sothat's kind of the plan just in general.
I want to talk about a specificcase just because it was it was
on my docket this week specifically,So I'm not going to use his name
for obvious reasons, but I havea client to say he is intelligent and
smart and well educated and just areally, really just good smart guy.

(03:22):
Is probably a bit of an understatement. I am convinced that he is in
some ways more smart than I amabout a lot of different things. But
unfortunately, this client of ours isalso very, very very disabled, and
he's had a lifelong disability. Hehas dealt with these issues literally his entire
life, and unfortunately, just ashe gets older, things are becoming harder

(03:44):
and harder for him to do andharder and harder for him to deal with.
So he approached our firm probably arounda year and a half ago,
if I had to take a guess, and he contacted us because he wanted
to start to do some planning becausehe started to need then, you know,
he had the need for home careand he wanted to get his things
in order and things, so wetalked to him about planning, and we

(04:06):
talked about doing an entire estate planfor him. So we did a power
of attorney, and we did ahealthcare proxy, and we did a trust
and ultimately we applied for Medicaid forhim and we got approval and everything was
okay at that point, and thenhe started down the road of getting his
assessments done and getting the next thewheels in motion to get the actual care

(04:28):
in place, and that's kind ofwhere things started to not go as well
for our client here. So,so our client he is currently in need
of sixteen hours a day of help, and that has been the case since
approximately February of last year. Soover the past fourteen ish months he's needed

(04:50):
he's needed sixteen hours a day ofhelp. So when we finally got the
Medicaid approval and he went through theassessment process, Medicaid said, Okay,
we see that you're a medically needyperson. We're going to assess you and
then visit. On this assessment,we're going to give you a number of
hours. So the number of hoursthat they wound up giving our client,
it believes started at five hours aday, which, to be clear,

(05:14):
is better than none. Right,zero is our five is better than zero.
However, if you are privately payingfor sixteen hours a day of care
out of your pocket, and thenthe state essentially says, we have this
program designed to give you the amountof care that you need, and we're
just going to assess you to figurethat out what that is. And you

(05:35):
meet with nurses, and you meetwith an independent doctor, and you go
through kind of all the hoops thatcome with and rolling with Medicaid these days.
And then they come back and theysay, yeah, you're right,
you do need some help, butwe only think you need five hours a
day. That's not great, that'snot a great result. That's insulting.

(05:56):
I think that's how I feel about. I think it's insulting. So then
what we had to do is thenhe had to start the appeal process because
while it's not great that they onlygave him five hours a day, there
are avenues to take to see whatwe can to get a better result.
So then we have to go throughmore hoops. So the first thing we

(06:18):
have to do is we have todo an internal appeal to the actual plan
that authorized the five hours of help. So an internal appeal is done by
one of our care managers down withever Home, you know, good friends
of the show. So they appealon our client's behalf with the client's help,
and they say, listen, plan, you know, listen, insurance
company, you have not made agood decision here. He needs a lot

(06:40):
more help than this. What canyou do for us? Please reconsider?
So the plan does and they comeback and they say, hey, client,
guess what, You're right, youneed more help. We're going to
give you six hours a day.So so now we've gone from private paying

(07:01):
sixteen hours to we're going to giveyou five to please reconsider to now you
get six. So we're gonna giveyou seven more hours a week. Okay,
right, again, insulting not agood result. No one's thrilled.
So now we get to go furtherup the chain, because again there are

(07:23):
ways to combat this, there's avenueshere. So then what we do is
we then take our evidence and wetake this decision, and then we file
for something called a fair hearing,which essentially is it's not court like you
would think it's. It's like kindof court. I don't know how it's

(07:43):
to put it so it is infront of a judge. There are testimony
that you can have people give testimony, you can submit evidence like you can
do a lot of things that youcan do in court. But the rules
are relaxed. You don't have therules of evidence, you don't have to
go through as many formality's. Weirdly, it's done all by phone. You
don't actually have to go to acourtroom. Prior to the pandemic, if

(08:07):
you were going to go to afair hearing, you'd actually go down to
the local Department of Social Services andyou would sit in a conference room where
the judge might still be on thephone. Weirdly enough, but again,
essentially it's kind of like a court. So we file for a hearing,
and then we wait and we waitto get a date, and then we

(08:28):
finally get a date after a fewweeks, and then we get to like
two or three days before the hearing, and we don't get the evidence packet
from the other side. So Imake a very difficult call to our client
and I explained to him kind ofwhere we think we're at and what our
position is. And I said,as much as I don't really want to

(08:50):
recommend doing this. I feel likewe should ask for some more time in
an adjournment, just because we wantto see what the plan is actually going
to be arguing here. It's veryhard for us to argue against them if
we don't know what they're going tosay. And he agreed, so we
asked for a small, slight adjournment, just so that way we could get
the evidence from the other side,to see what we wanted to do and

(09:11):
what we wanted to say. Andthen we waited for a date, and
we waited for a date, andwe waited for a date, and no
date was coming, and our clienthere reached out to a local politician and
said, can you please help me? And he did intervene, and he

(09:31):
made some calls and we got ourdate back on the calendar. Because the
calls we were making and the callsthe client we're making, we're not really
getting us anywhere. So this pastweek we actually had the hearing and myself
the client, we were on thephone with a judge and we presented our
evidence and we laid out our case. And now we get to wait and

(09:52):
we get to see what's going tohappen, because ultimately the commissioner for the
stay eight for the Office of Temporaryand Disability Assistance. We'll be making the
determination of who's right. Are weright in our client deserves more hours or
is the plan right? And hegets six And that's kind of where this

(10:16):
is and this and and I tellthis story just because this is the reality
of what our clients are seeing rightnow with Medicaid. At times that's they're
being stingy with hours and they're saying, you know that we're going to give
you what you do, what youneed and then the assession and we're not
getting good our determinations right now.And it's unfortunate that that this client has

(10:39):
had to pay all this money forall this all these months while he's been
waiting and waiting and waiting. Luckilyhe's been in a financial position where he
can. But now, ultimately we'regonna just see what decision gets rendered and
who comes out, you know,in a better position. Hopefully that's us.
It may not. We can't everguarantee a particular result, especially when
it comes to litigation. But Ijust wanted to tell the story quick right

(11:03):
off the bat, because you know, for one, I think it's important
and I think listeners of the show, you you've heard us talk many many
times about medicaid and home care andthe avenues that we have and to be
clear, they're they're there and they'reavailable, and there's ways to fight the
system. But it's just kind ofshowing like this is this is reality,
right, these are people's lives andthis is what's happening. So so with

(11:24):
that said, um, we're goingto take a short break. We're going
to come back after the break.We're going to talk about hopefully a little
more uplifting stories, um, someother things of good stuff, maybe some
bad stuff too, So please stickaround. We will be right back after
this break. Welcome back, everybody, We are back from break. Thanks

(11:52):
for sticking with us. I'm Frankhemming from Pierre O'Connor and Strauss, still
joined by Christin Peck Hi Kristen right. Thank you for your story. Oh,
you're welcome. And I do apologizeif there was a little bit of
things that hit the air right therebefore we went to break, I do
apologize. We apparently had a littlebit of a system glitch on our end,
so we're gonna that should be allfixed now, So I do apologize

(12:13):
thankfully. I don't think I saidanything real bad. Okay, So let's
talk a little bit more about storiesand other things that we have in the
office. So, Kristen, sinceI talked quite a bit, I don't
I don't want to take the floorthe whole time. No, do you
have a story you want to sharewith everybody? Well? I have quite
a few about the power of attorney. I feel like I talk about it
so frequently. Oh yeah, butthis is important. So by all means,

(12:35):
the floor is yours. Okay.So I do have a story,
you know. That's the theme ofthe show today is you know, client
stories. You know a little bitof dudes and don't when it comes to
what we're seeing in the office.And semi recently, I had a mother
and a daughter come into the officeand they wanted to do some asset protection

(12:58):
planning because his dad or husband hasAlzheimer's and he's had it for several years
now and mom right now is takingcare of him in their home and she's
able to do that, and buthe, you know, he's fading,
he's losing his capacity, and theyare concerned about what's going to happen if

(13:22):
he needs nursing home care if heif Mom's no longer able to care for
him in the home and maybe sheneeds, you know, some relief,
maybe at night so that someone cancome into the house. And how that's
going to be paid for. Andthere are several kids. I believe there's
four kids in this situation, andthey want to make sure that they can

(13:43):
protect and preserve some assets for theirkids. And one of the things right
off the bat, they gave ustheir old estate planning documents and me and
lou we looked everything over and theyhad a power of attorney and we looked
at the husband power of attorney.And if you listen to the show quite

(14:03):
frequently, you'll know that one ofthe things we advocate for is that gifting
authority. And guess what, thispower of attorney did not have the gifting
authority. I wasn't I'm not surprisedthat that's where you're going with a story.
And it's really sad because you know, Dad, Dad may or may
not have capacity to sign a newpower of attorney. And why is this

(14:28):
important? So mom and Dad theyown a couple of properties. I believe
they're a farming family, and oneof the things we wanted to do is
to put this property into an irrevocableMedicaid Asset Protection trust so we can protect
it if they ever need to becomeMedicaid eligible. So with that, since

(14:56):
the properties jointly titled, mom isDad's agent under the power of attorney,
but without this gifting authority, shecan't transfer the property into a trust without
having this gifting authority, right,And that's I think that's a frequent occurrence
when we see powers of attorney thatjust aren't drafted very well. Because like

(15:18):
I literally had had a document reviewmeeting with some clients yesterday, and I
think both of them had come inwith their drafts of their documents that we
had sent them, and they hadmarked them up, and they had kind
of started to write down where theyanticipated having to sign things and initial things,
and neither one of them had thegifting provisions initialed on the drafts.
So then I went through of withthem of why that is such an important

(15:41):
power. And the reason is exactlylike what you're talking about, where if
we have to move assets to aspouse, to a trust, to the
kids, wherever, you want tomake sure that you can do it.
And I also want to mention Ihave some clients they haven't signed their documents
yet, and they're giving me alot of pushback on this gifting authority because
right now their plan they're doing thesame type of plan, a Medicaid asset

(16:06):
protection trust, and they have twosons, and they say they don't have
a lot they're simple people, youknow, we don't need this gifting authority,
and they really they don't want toinitial it, and you know that's
something that I'm obviously I'm going tohave lou involved in that signing, but
I think it's really important that theyinitial that gifting authority while they're doing their

(16:29):
state planning. Now, you don'tknow what's going to come up if say
a spouse opens an account in theirname alone, and you know, after
one spouse passes away, maybe thekids discover this account and they can't move
it into the trust, or maybethey win the lottery, or you know

(16:51):
something. You know, strange thingshappen, and if they don't have this
gifting authority, they're not going tobe able to do what they need to
do in the future, especially atthe point where we're talking about loss of
capacity and someone has to do thison your behalf. You know, we
hope and you know we cross ourfingers that we have every asset that you

(17:11):
know, it's either jointly titled,has a beneficiary, is in your trust.
But you know, things happen andyou know things are missed, and
you know, why not have it. You know, you trust your spouse,
you trust your kids to do theright thing. You know what's the
issue with initialing that. Yeah,sometimes it's very difficult to get people to

(17:33):
be very comfortable with those things.But the best we can do is lay
out reasons why we think they shouldand you know, they're going to make
their decisions. They our job toinform them about what they're what they're agreeing
to, or what they're not inthe ramifications that either come with doing it
or not. I have a Ihave a similar situation m in a way,
just because it kind of started whereit sounds like your clients are like

(17:56):
they had something unanticipated happen, andthen we thought we were going to just
have a long standing issue and unfortunatelyit's now been cleared up. I'll elaborate
a little bit about that, butyeah, it's again, this is kind
of the thing that we hear aboutmuch more often than I think people would
think. So with one of mycases we have, we had a lady
come in. Her husband had hada stroke very recently when she came in,

(18:22):
and she wanted to again see ifshe could do some planning, see
if Medicaid could get involved potentially,and we determined that Medicaid wasn't going to
be needed in their case just becauseher husband had a very very lucrative long
term care insurance policy, so hedidn't really need Medicaid to pay for his
care while he was in the rehaband then a facility and then ultimately moved

(18:45):
back home. But he didn't needMedicaid to pay for his stuff because he
had done such a good job settingthings up that if something had happened to
him, at least monetarily there wasthere was going to be some money there
to pay for those things. Theunfortunate part was that the wife did not
have a policy like the husband did, so she wanted to start to protect
herself just in case something similar hadhappened what you may happen to her.

(19:07):
The unfortunate part here is that thehouse, which is one of their larger
assets, was jointly titled and thehusband did not have a power of attorney
previous to the stroke, and afterthe stroke, the family went to another
attorney's office who then went out tothe nursing home where he was there for

(19:29):
rehab and then long term care fora bit. They had him sign a
power of attorney, but then againthey didn't give the gifting authorities on it,
and then I believe he had somemore health events after that, where
at that time when when we wereapproached, there was no way he had
capacity to sign a new power ofattorney. So the wife has her own
assets and she is able to doher planning for her assets that she can

(19:52):
move. But unfortunately, for awhile the thought was that the house was
going to have to just remain injoint name, and then, assuming the
husband was going to predecease her,which just given the amount of his health
issues, was likely that she wouldnot be able to move to move or
deal with the house until he passed, when the salt in the house became
solely hers because she couldn't otherwise moveit. Good planning news bad obviously.

(20:18):
News in general was husband did recentlypass, so now we can protect the
house but you know, the familywas kind of put in a very weird
and awkward position where we may nothave been kind of being able to complete
the plan just because they didn't havea great document that they thought they had
taken care of. But unfortunately thatwasn't that wasn't true. And I think

(20:42):
it's worth noting that New York Staterecently updated their power of Attorney form.
It used to have what's called thestatutory gifts rider, and they've done away
with that gifts rider just because alot of attorneys were not executing the document
it properly, and so they haveshortened the form a little bit. So

(21:04):
before it was the power of attorneyand then the gifts writer attached to the
back, and often what we're seeingis the gift writer wasn't even there,
wasn't even attached, or wasn't initialedin the appropriate spots. And now that
gifting authority is right under the powersthat you're giving your agent, and so
it might look a little different thanwhat you know if you've done your estate

(21:27):
planning before. The form has changed, and I think for the better,
so that maybe attorneys who aren't maybeused to doing estate planning or powers of
attorney they know now to initial that, and I I've done legal education courses,
you know, just generally speaking,and I think that's one of the

(21:51):
things that has been highlighted in thoselegal education courses. So I just think
that was worth noting. Yeah,no, no, it's a really good
point. And you're completely correct whenyou say that. When they modified the
form, the idea was to makeit more kind of user friendly and more
client friendly in a degree, andjust try to cut down on powers of

(22:11):
attorney not being executed with some ofthe powers that just generally are known by
people that do what we do thatwould be needed. I believe that the
New York State Bar Association, whenthey kind of circulated their draft of kind
of like what the Bar Association feltcomfortable recommending for that document, also kind
of had blanket gifting provisions within themodification section on the new form, so

(22:33):
to try to again encourage practitioners thatlike, even if you don't practice in
this area, a really good resourcefor people to go and grab the document
would be from right from the BarAssociation, and their recommendations for inclusion of
language was going to be either inthe document or very easily findable in their
database on their forms. So soyeah, no, I think it's I

(22:53):
think it's trending in the right direction. I feel like I say this every
time when we talk about the powerour attorney of if you have one that's
great, you should get it reviewedat least periodically from somebody who knows this
kind of stuff, just to makesure it's adequate and it has the powers
that you may need if something happens. This is a big reason why we

(23:15):
recommend that people actually come to stayplanning attorneys that trust in the state's attorneys
things like that, like when they'redoing their planning rather than just going to
the guy down the street that willhandle your car accident or your divorce or
other things, because they tend tomaybe not get the documents right. And
unfortunately, as we've been saying,if you don't get them right, there

(23:37):
are potential consequences and sometimes we canfix them and sometimes we can't. So
with that said, we are gettingvery close to the news here, so
we are going to duck out injust a little bit for the news.
Thank you very much for being hereon this Saturday. I guess it's mid
morning at this point. We're goingto talk more about client stories when we

(23:57):
get back on the line and afterthe news, so please come back again.
This is Life Happens Radio. I'mFrank Hemming here with Kristin Peck.
We'll see in just a little bitafter the news. Welcome back, everybody,

(24:18):
This is Life Happens Radios. Oneof the frequent musical intros. I
feel like when I'm on the show, So thanks Zach making me feel at
home here on the on the air. Here, very relaxing. Yeah,
you know, it's like you're goingto mosey into your Saturday morning. Yeah.
Yeah, it's not a bad thought. So before we get back into
more stories, we do have acaller on the line, so we have

(24:40):
Dave. So Dave, good morning. What can we what can we talk
to you about? Hi? UmI just um. I got a quick
question about um revocable trust. Yeah, and if somebody gets married, which
out days that like in a will. My father in law's reconsidering, you

(25:06):
know, considering getting married to somebodyand they're in their nineties. Excuse me,
Yeah, and he says he hasa revocable trust so he doesn't need
a pre nuptial. Is that true? So I'm going to take some liberties
here because you're asking a little bitof stuff that I think is a little

(25:29):
bit out of my subject area.But I can certainly give you some thoughts
in Kristen can chime in too,if there's anything that she thinks that I'm
not going to say so generally speaking, right, if if it's separate property
and then you get married, unlessyou commingle it, I don't believe it
would typically then be considered separate property. If he has a revocable trust that
has just in his name, thedocument would spell out where everything is to

(25:55):
go upon his passing. That wouldassume, though, however, that whatever
assets Dad has in this instance areactually in his trust and titled to his
trust, because if if they're nottitled to his trust, then they would
typically be just in his name.If he's single and has been for a
while, and then if they're inhis trust, then his trust would figure

(26:17):
out the dispersement of them. Ifthey're in his name and then he gets
married and then dies, then hiswill would then talk about where they go.
Or if he didn't have a will, then it would go under the
terms of intestacy, which in Yorkwould have some assets freely going to the
spouse, even if he didn't haveanything other something that didn't lay it out

(26:40):
that way. So, so isa you know, is a pre nup
needed or a post nup needed?Not per se, it's not saying it's
required, it's certainly not maybe abad idea to consider. But the other
thing that just comes to mind iswith a revocable trust, Dad is in
charge of that trust. Then unlessit's a very very very strangely drafted document,

(27:04):
he would typically have the ability tochange it in any way that he
saw a fit. So he couldentirely change it to leave it to his
hypothetical new spouse, or keep itthe way that it is, or or
do some mixture of the two.So so, Dave, I'm hoping that
kind of answers answers your questions asbest as I can here on the show.

(27:27):
Does do you think that kind andhe did answer it pretty good,
Okay. I would say, ifif, if, if there's anything more
like specific that you think maybe wecould assist with that you don't want to
share here on the radio, youcan certainly give our office a call at
five point eight four five nine twentyone hundred and we can see if there's

(27:49):
anything else maybe we could either helpyou be with or probably more importantly Dad
if he wants to make changes tohis his plan or his trust. Thank
you very much. You're very welcome, So good call. Um. Families
are weird. Sometimes I've got afew stories in my mind that we could

(28:11):
talk a little bit about that.Um, but second marriages or even third
marriages, you know, depending onthat that that usually likes to try to
throw wrinkles in your estate plan.It definitely does, um, so to
say anything. So so again,UM, do you have a do you
have another story you want to youwant to share with everybody? Christenings,
Well, I guess since we're onthe you know, second marriage situation,

(28:36):
I am just thinking about how whenyou draft documents you have to be very
careful in a second marriage situation becauseupon the first spouse to pass, if
they leave, if you know,if the husband leaves everything to the wife
and then the wife changes her documentsand just leaves it all to her kids,
then the husband's kids might not getanything right, and you have to

(29:00):
be careful, especially you know,in those circumstances if the spouses keep their
assets separate we typically recommend to separatetrusts, yes, and if they're jointly
titled assets, then we typically doa joint trust in that situation. But
when when clients with separate assets ina second marriage situation put them all put

(29:26):
all the assets into a joint trust, the drafting becomes a little bit stickier,
just because I'm just saying this,because I do have a file right
now where I have converted. Youknow, I had two separate trusts for
these individuals, and I put putit into one joint trust for the client's

(29:48):
requests. And you know that getssticky as to what powers the surviving spouse
can have? Can they remove trustees? Right now? We have trustees of
each side of the family to actjointly so that each side is equally represented.
And you know one of the powersin our trust is you know,

(30:08):
the either grant or can remove atrustee. Well, is that okay?
If husband passes away and wife removeshis son and then her son is the
only one serving, is that?Okay? You know these are things that
you know, we have to thinkabout when we do this type of drafting.
And I just thought I speak tothat given the callers, you know,

(30:33):
the direction the caller took us in. Yeah, I mean we you
and I have spoken a little bitabout this particular file because it seems like
every time you figure out one pieceof the puzzle, then you kind of
have three now new wrinkles to itthat you have to kind of think through
and figure out what the best avenueis. And to be clear with a
lot of what we talk about here, this is exactly why we say it's

(30:57):
very hard to say that there isa one side fits all plan or recommendation
for anyone specifically because what one familymay want or may need may be completely
different than somebody else. I mean, we have had I can think of
several files very easily where it's asecond marriage, but the second marriage has

(31:18):
been existence for twenty twenty five thirtyyears, and the kids from both sides
have either grown up together or havebeen you know, sibling or step siblings,
or you know, part of eachother's lives for such a long period
of time that it's kind of justone big, blended family where everyone just
gets along and everyone kind of thinksof each other as if they were all

(31:41):
blood related right from the start,even though that's not the case. And
if you have a situation like that, a lot of this gets generally gets
easier because if everyone's on the samepage and everyone gets along and everyone's in
agreement as to what's to happen,that makes our lives as planners just typically
a lot easier because then we're notworried about what happens if someone predeceases,

(32:02):
or what happens if somebody's kids getremoved as a trustee or anything, because
in that scenario, everything's going tolikely work out the same, regardless of
whether mom or dad die first,or whether a kid becomes ill or or
something like that. But as soonas you start getting to the place where
it's kind of like one side thinksone thing, the other side thinks another

(32:24):
thing, or they're supposed to getdifferent things or at different times, or
who can change things and who can't, and that's where it all gets very
very complicated, very quickly. Andthat's just again to say in general,
like with your planning, if youhave a big life event, whether it's
a marriage, it could be adivorce, it could be the birth of

(32:45):
a child or a grandchild, oran injury, a disability, someone's special
needs, whatever it is, ifyou have a major change to your life
or someone in your plan, probablymakes sense to do don I'm considering to
see if updating is needed, justbecause we want to try to make everything
go like you are, but sometimeswe have these events that really can get

(33:09):
things to be messy. And speakingof updating your planning, that leads me
to a story. So we weretalking a little bit before the show about
you know, client stories and allof that, and we're talking about clients
who like to do their planning beforethey go on vacation. Oh yeah,

(33:31):
sure, yeah, by all meansthis up if you want. Well,
I think you can help me alittle bit with this one, because I
wasn't in the office at this point. Set the stage for me and then
I'll take it. Well. Justin general, it's great to do your
estate planning. We all encourage it. But doing it right before you go
on vacation might not be the greatestidea. You know, you might want

(33:54):
to you know, if you're takinga trip to you know, Italy or
something, maybe you want to doit several months prior to going on vacation,
you know, not the week before, especially because I feel like the
bigger trips are generally known about.Right, It's not like they just cropped
up the few days before. I'vejust I just decided to jump on a

(34:15):
plane and go to Italy or toAustralia or something. Now I'm not saying
it can't happen. I just thinkthat's just less likely to happen. And
generally it doesn't make it doesn't makeit great on us that we have to
you know, draft the documents,review them, and then sign them in
a week. That's not that's notthe ideal situation for us. But um,

(34:36):
one particular plate case that's been kindof infamous in in the office is
I guess this husband and wife camein to do their state planning. They
were going somewhere tropical. Yeah,so I'll take it. I'll take it
from here, Okay. Um,So yeah, I was in to be
honest, right, this was notmy case, but I was in the
office when this happened. So wedid have a I would say a younger

(34:59):
couple in our world. So Ithink I think they were retired or at
least a round retirement age, butno history of illness or disability or anything
like that. And we had themcome in and they wanted to do their
planning, and and for whatever reason, the wife had this thought of,
just we need to do this beforewe take our trip. So, wouldn't
you know, the family goes,they go on their vacation, they do

(35:23):
all the things that they want todo, and then at some point on
their vacation, they decided they wantto go scuba diving, which I'm not
sure I would do it. Um, I think I probably would, but
you know, I've never really been, I guess, in a place where
I've had to make that decision ofwhether that's something I want to do.
But I guess they decided they wantedto go scuba diving, and they're,

(35:44):
you know, in this tropical placeand they're probably just having this really awesome
vacation and they decided, yeah,they did. They decided to do it
right. And then unfortunately, wouldn'tyou know, something happened while they were
scuba diving. The wife got intosome kind of accident or mishap or something,
and she wound up passing away whilethey were on their trip. And

(36:07):
I don't remember specifically if she saidto us that she had like a dream
or something that she thought something badwas going to happen on the trip.
But I kind of feel like atleast that's what's been again thrown around the
office, and yeah, something shehad that fifth sense that she something was
not right. That's that's my recollection. But again I wasn't it wasn't my

(36:29):
file, So I can't say onehundred percent whether that part it is accurate,
but I certainly can say that theyshe was concerned enough that she wanted
to do this before they left,and then they left, that they had
their vacation, and unfortunately something baddid happen to her. So, you
know, while that is a completelyawful, terrible story, and for that

(36:50):
family, you know, because theyhad signed their documents, at least like
we were able to do with theramifications of her unanticipated passing when the husband
returned, and thinks because she hadto kind of put a plan into place
before they left. So thankfully wedon't have a lot of those stories.
No, I do have a fewclients. Actually, in recent recent last

(37:14):
couple of weeks, I've had acouple that have come in because they are
going on vacation and we've done youknow, we've gotten their planning done.
But don't wait till last minute toyou know, do ya, especially because
like a lot of this stuff shouldn'tbe necessarily a rush decision more than anything
else. Like, if you needto move quickly, we will move quickly.
If you want to move slowly,we will work at your pace.
But it's just something you don't wantto jump into and then not have full

(37:36):
time to think about, consider,digest and make sure you're doing the best
plan. So with that said,we're already up to our last break here
before the end of the show.Wow. So again, please stay with
us. This is Life Happens Radio. I'm still Frank Hemming. Kristin Peck
is still here sitting with me inthe in the co Captain's chair, So
please stick with us. We willbe back right after this break for the

(37:58):
last part of the show. Hey, welcome back, everybody. We're here
back from our final break. We'restill Life Happens Radio. I'm still Frank
Hemming and I'm still here with KristinPeck. Hi, Frank, Hi,

(38:22):
Kristen. Just thinking about a fewstories that I want to tell, Oh
what kind of stories I think?I think I want to uplift the mood
a little bit. Oh, someuplifting yeah, I think so. I
think we've told a lot of likescary ones. I think we should talk
about a good one. Okay.So so I think this is gonna sound

(38:44):
bad at first, but just bearwith me here because I'm gonna make it
good at the end. Okay,all right, So that's that's kind of
the spoiler. I'm kind of givingit away. But I just I know,
because I'm saying I'm going to tella good story, right, It's
gonna be good, but it's gonnasound not so good. I'm on the
edge of my sne Okay, allright, just don't fall out of the

(39:06):
chair, please, Okay, I'lltry not to. So here's here's here's
the story again. So this Ithink. So I have worked with this
family myself. I did not workon it when we did this piece of
it. But I think it justgoes to show that, like at the
end of the day, like we'relawyers, and like we have a lot
of tools in our toolbox and wereally can do some creative things. So

(39:30):
one one case that comes to mind, and we've only done this I think
two or three times. It isnot a common occurrence. But again,
I think it just kind of goesto the power of like sometimes you really
just don't know, like what optionsdo you have until you come and talk
to somebody about it. So Ihad a we have a family. Dad
was not in good health. Hehad not done a lot of planning.

(39:52):
I think he may have had willpower of attorney to that kind of stuff
if he didn't. I know that. We updated all those things, and
ultimately Dad wanted going to a nursinghome for some time. And that's not
great, right, That's why Isaid, this is gonna sound not so
good. Okay, So he goesto the nursing home. We do some
planning, We get him on medicaidin the nursing home. But the whole

(40:14):
time, his son is adamant,my dad wants to come home. My
dad will get better. My dadwill literally do whatever he has to do.
He will not stay in that nursinghome. We will get him home.
So what do we do? Sowe get him on medicaid in the
nursing home. And because the sunis adamant that Dad will come back to

(40:35):
this house. He will not diein that nursing home, we don't do
anything with the house. We leaveit in Dad's name. Which is not
usually what we would do. Normally, we would talk about selling the house
and saving some proceeds and losing someproceeds, and things where we still achieve
a pretty good result when there's noplanning that's been done. But in a
lot of instances, we're going torecommend that that house gets sold and we

(40:58):
do what we can with the proceeds. We did recommend that in this case
because Dad was coming home. Sowe leave the house, we take care
of the other assets. We ultimatelyget Dad on Medicaid. All right,
Dad continues to do his stuff,He gets he rehabs. He I don't
I wouldn't shock me at the familyeven maybe privately paid for some additional therapy

(41:19):
if it came to it. ButDad was going to come home. So
Dad ultimately gets better enough where hecan come home. They actually got him
out of that nursing home and puthim back in his house. So then
what do we do. We gethim on home care Medicaid, which at
that at that point was I'm notgoing to say it was easy, just

(41:40):
because home care is easy and nursinghome is easy. I'm kind of hoping
that the story that I told rightat The first part of the show Talks
goes to show like how home careis now in some ways even more complicated
than nursing home planning is. Butsince he'd already been on Medicaid, we
didn't have to do a completely newapplication with unknown own information and things,
because the county already knew he was. They already had processed his application for

(42:04):
nursing home, they had already donethe look back. They already knew who
this guy was. So we submitteda new application. We got him on
home care Medicaid. And and here'slike where I think the story really flips,
because we got I think two,if not three, really really good
results out of this. One.Dad got to go back to his house,
right, which is great because that'swhere he wanted to be. He

(42:25):
did not want to be in thatfacility. Dad came back to the house.
Now did we were we responsible forthat? No? Right? That
was a lot of work by Dadand the family and everything. But Dad
was able to return to his house. That's a really good result. Second,
we got him on Medicaid again.That way, whatever money they did
have remaining from doing all the planningthen could be sheltered and used in things

(42:49):
for him to be in his house, which is where he wanted to be.
That's really good. We got thestate to pay for his care by
Medicaid, that's really good. Andhere's my favorite part of the story.
So when we put him or whenhe was in the nursing home and we
put him on Medicaid, Medicaid madeus allow them to put a lean on
the house. Right. That's oneof the reasons why when we talk about

(43:12):
planning for the nursing home, wetalk about using a trust or sometimes even
using something called a life estate deed. And we're going to come back to
that before the end of the showof why life estate deeds aren't always great.
But we ultimately want to get thathouse out of somebody's name because,
for one, it could be leaned. Second, if you die with it
in your name, it could berecovered against. But we kind of took

(43:34):
the risk in this case because again, we knew Dad wanted to come home,
so Medicaid put a lean on thehouse when he went to the nursing
home. But one of the veryfew i think unknown caveats to come with
the Medicaid rules is if Medicaid leansyour house but you move back to your
house, they have to extinguish thelean, they have to take it off.
So in this instance, not onlydid we get back Dad back to

(43:59):
his house, not only do weget Medicaid to pay for his care,
but then we had to then orwe got to inform Medicaid that, hey,
guess what, Dad's back in thehouse. You have to take that
lean off the house. You don'tget that anymore. And then we put
that house in a trust because there'sno lookback period for home care. And
then we were able to protect thehouse and Dad lived out the rest of

(44:19):
his life in his house, whichis where he wanted to be. Wow,
Frankie stuck it to the man.Yeah that was that was Lou Okay,
well you were a part of it. Yeah, no, I,
like I said, I worked ona piece of that was. That was
some really creative planning. But evenwhen it kind of seemed like to the
outside looker, I'm sure like,well they lean the house like the house

(44:42):
is, the house is not goingto be in a good financial position here
because they have a lean against it. Well, if he moves back to
the house, they got extinguished thelean. So so again it's not a
common planning avenue that we can takebecause unfortunately, just many times people just
if you're in the nursing home,they typically don't get better to the point
where they can actually return home.But it's possible it's happened. I'm sure
this won't be the last time weconsider doing something like that. So I

(45:04):
just thought it was a really goodstory to to show like, even when
things like look really really bad,sometimes a really really good result can come
out of it. So so Ikind of tease this just a just a
minute or two ago. So,Kristen, we've also been talking recently about
life estates. Yeah, it's beenthe topic of the week. Yeah,
and maybe why like life estates aren'tso good. So do you want to

(45:25):
do you want to take the leadon this one and talk a little bit
more about why we generally don't thinklife estates are the best planning tool for
for most sure, So I knowwhere you're heading because we collectively and you
know, a couple attorneys talked aboutthis is you know, when you do
a life estate deed, you retainyou know, life use of the property

(45:47):
and then the remainder interest goes towhoever is named in the deed. So
a lot of people like to usethis as an inexpensive avenue to get get
property to their children and avoiding probate. And it's and it works generally,
it works okay, but there aresome things that can happen if if you

(46:12):
want to move out of your house, you need the remaindermen to sign off
because technically you don't own your house. You own your life life use to
the house. Correct, you're someone'sif they do this, their life use
is actually a property interest, it'sjust a diminished one. So you don't
have zero rights to the property oranything, but you have a diminished right.

(46:32):
But now your other people have amuch more substantial rate than you,
and that could lead to problems.And so so you need not only do
you need that remainderman to sign off. When you go and sell your house,
every individual has a capital capital gainsexemption and it's two hundred and fifty
thousand dollars if it's your primary residentresidence. So you know, if mom

(46:58):
goes and sells her she has alife estate in her house, and son
has a remainder interest, she goesto sell that, well, she gets
her capital gains exemption on her lifeis life portion, which is which her
portion is calculated by a life expectancytable, so her life use has a
value. And then the remainder interestwhatever you know, which is the bulk

(47:21):
of the property interest that portion has. The Sun will have to pay capital
gains tax on that piece, whichI'm sure they're not going to be pleased
about, no, because they're notusing the property. And if if Mom
hadn't died with the property, theSun would get a full step up in

(47:42):
basis. So you know, justto reiterate what the step up in basis
is, if Mom bought her housefor one hundred thousand dollars and now it's
worth three hundred thousand dollars, thatbasis of one hundred thousand dollars goes up
to three hundred thousand dollars upon herpassing. So when Sun goes to sell
it, he doesn't have to payany capital gains tax and she doesn't have

(48:02):
to pay any capital gain sacks becauseshe has her exemption amount. Right.
But when she goes to Sala,if they both sign off with the life
estate interest, she only gets theshe gets her exemption on her portion,
her very small life estate portion andhe has to pay capital gains tax on
the rest. So not ideal.Not ideal. So the the other part

(48:29):
of this, in addition to everythingthat Christen just said, the other kind
of wrinkle that came with this orwith a life estate in the office this
week was so we had a ladyshe decided that she wanted to make sure
her house went to, you know, her son, so she did a
life estate deed. Not again,not with us, because we probably would
have counseled her against doing it theway that she did it. But she

(48:49):
went to another attorney and she dida life estate deed and she said,
I'm gonna retain life use for meand when I passed, I wanted all
all to go to my son.Well, the son apparently was not in
good health when she did this.So what happened was, and I think
this was pretty foreseeable from what weknow, was then the son passed,
So now mom still has the lifeuse, but now the remainder interest that

(49:12):
was the sons then went under theterms of his will or his estate,
well, he didn't have one andhe didn't have any children, so under
the laws of intestacy, then wentall to his wife because he did have
a wife. So now Mom hasher life use, her daughter in law
has the remainder interest in the house, and then I don't know the specifics

(49:35):
about this part of it, butthen the daughter in law then winds up
passing away. Mom is still aliveand now her portion wind up going to
her kids. So now we haveMoms still with life use and now her
step grandchildren own the remainder of thehouse. And that could have been avoided
if they would have done some otherthings that did not have to happen that

(49:58):
way because Mom didn't want that.But that's kind of the danger of what
happens when we use things like lifeestates. So with that said, we're
right at the end of the show. See you next week.