The basics of the case

In this case, the court affirmed a ruling that a Medicaid applicant who transferred assets to her children, who in turn put those same assets into an irrevocable trust for the Medicaid applicant’s benefit, is ineligible for Medicaid because the trust is a countable asset under state law,  despite the fact that the transfer occurred 17 years prior to applying for Medicaid.

Don’t Worry!

If you are an estate planning or elder law attorney offering pre-crisis Medicaid asset protection through the proper use of an irrevocable, income-only trust, it need not cause you any worry.

And if you are not an attorney but have created the right type of irrevocable, income-only asset protection trust, you, too need not worry.  The irrevocable, income-only asset protection trust I provide my own clients with is the Living Trust Plus™ — I’m happy to say the trust is just as effective as ever.

The opinion was released October 13^th and is a case-in-point example of how an improperly drafted irrevocable trust, along with a badly executed asset protection plan, will fail.  More information on the Living Trust Plus™ is available here.

The question before the court

The question for the court, based on its interpretation of a Wisconsin statute, was whether the trust was established by the children “at the direction or upon the request of” the Medicaid applicant.

Although the trust instrument in this case was irrevocable, the trust bore no relation to an income-only trust, but rather was a trust established by the children of the Medicaid applicant, using the exact assets previously gifted by the parents to the children.

This trust was apparently intended to be some sort of special needs trust because the trust instrument provided that the income and corpus of the trust were to be used only when no other funds are available and to supplement any funds the beneficiaries were entitled to receive as social security and medical assistance benefits.

However, though not addressed by the court, the trust was clearly defective as a special needs trust because the stated purpose of the trust was “to provide for the support and welfare of Clarence and Lucille Hedlund,” and a trust intended to provide for “support and welfare” is clearly not a special needs trust.

Why the court ruled the way it did

Most  importantly, the trust did not prohibit trust corpus from being distributed to the Settlors. On the contrary, the trust provided that the income and corpus of the trust were available to the Settlors.

So once the finding was made that the trust assets were “assets of the individual or the individual’s spouse” and “were used to form all or part of the corpus of the trust,” the finding that the assets were fully available to the Medicaid applicant was absolutely correct, because the trust allowed corpus to be used for the benefit of the Medicaid applicant.

A properly- prepared income-only trust, such as the Living Trust Plus™, would have avoided this result, because the Living Trust Plus™ is a trust that offers true asset protection in connection with Medicaid eligibility, as well as in connection with all other creditors.

For information on the Farr Law Firm’s service (Level 3) – The Living Trust Plus™ — follow this link and view the .PDF file. You may also notice other services you may need or have not thought of.  Planning for long-term care (whether for you or a spouse or a parent) is a difficult mental hurdle.  But the sooner you start, the more assets you can protect and the better quality and dignity of life loved ones can enjoy.

Image: David Castillo Dominici / FreeDigitalPhotos.net

Image: Salvatore Vuono / FreeDigitalPhotos.net

Image: Stuart Miles / FreeDigitalPhotos.net

For example, the high divorce rate in the US means that many individuals wish to provide for children from multiple relationships.  Most of the software reviewed by Consumer Reports could not meet the hypothetical clients’ specific wishes when it came to this subject.  In these “blended family” situations, the estate planning tools were too rigid in their options. This can result in accidentally leaving out a child, or favoring them unequally and causing hurt feelings.

A number of other problems were uncovered in this experiment, which is not a big surprise to most estate planning lawyers.  Each family and individual’s situation is highly dependent upon so many factors that it is nearly impossible for a computer program to anticipate them all.  Additionally, engaging with a live person means that there is a capacity for human understanding that the programs simply cannot replicate.

This interpersonal relationship is every bit as important as the documents that are created as a result.  From the lawyer’s extensive education and experience, he or she is able to guide clients into creating documents that are truly relevant to their particular circumstances.  In the world of estate planning, “one size fits all” simply doesn’t work.

One of the biggest problems with online estate planning tools is the fact that they seem to open so many estates up to the probate process.  As a result, families are left waiting for the courts to rule on decisions that the deceased believed had already been made.  Unfortunately, those decisions don’t always reflect the true wishes or spirit of the documents generated through the software.  Just as devastating is that fact that the probate process can be very expensive, thereby decreasing the amount of inheritance that beneficiaries do eventually receive.

It is commendable that so many people are now taking an interest in the estate planning process.  It is an unfortunate reality, however, that using online tools generally won’t be enough to plan for the actuality of your given situation.  Without a doubt, the best and safest approach is to develop a relationship with a trusted estate planning lawyer who can provide the expertise required to truly meet the needs of today’s modern families.

Learn more about Basic Estate Planning Here!

Indoor puppies will be fine, of course, unless you’re a daily walker or jogger. In that case, consider investing in a functional, high quality doggie sweater or coat to keep Spot warm. It might take some searching (many of the sweaters on the market are meant for decorative purposes only, constructed of cheap materials and light fabrics) but in the end, it’s worth it.  If you have an older dog, be extra-aware of potential slip-and-falls on icy patches. Just like humans, older dogs have slower reflexes and more brittle bones, and can be seriously injured in the wintertime.

Stay warm, folks!

Chancellor, as his name suggests, is a dignified West Highland White Terrier (a “Westie”) and is the beloved pet of Evan Farr. Chancellor provides the primary entertainment at the Firm with his daily antics of “Crazy Dog”: running wildly up and down the hall, begging someone to stop drafting documents for a moment a play tag with him, and eventually collapsing in a heap under Evan’s desk for a well-earned nap. He does his due duty by protecting the Firm from the mailman, but is really just a soft, cuddly, smiley little furball. Chancellor, along with our office kitty Sporty Sport, the resident lizard Tiger Lilly and our chirper Gidget will be a regular contributor to our “Critter Corner!”

Today, we are pleased to announce that Evan was also recently named  by Washingtonian Magazine as a “2011-2012 Top Lawyer” in the field of  Elder Law in the Washington, DC Metropolitan area.

We also extend our sincere  congratulations to the eight other DC area Elder Law attorneys named on the above list!    You can view the full listing online here.

It is no secret (if you ask anyone familiar with the “system”) that Medicaid eligibility rules are the most complex and confusing maze of legal rules in existence.

The United States Supreme Court has called the Medicaid laws:

“an aggravated assault on the English language, resistant to attempts to understand it.”

The United States Court of Appeals for the Fourth Circuit has called the Medicaid Act one of the:

“most completely impenetrable texts within human experience” and “dense reading of the most tortuous kind.”

Veteran’s Aid and Attendance rules are likewise also exceedingly complicated and often treacherous to navigate.  Call us today at at 703-691-1888 for a complimentary consultation with Evan Farr or to sign up for one of our upcoming seminars.  You can also click here to  register for one of our seminars online.

The idea for “Critter Corner” came about between Sporty Sport (the resident kitty) lounging around on the front desk welcoming clients to the office, and Chancellor (the office dog) sitting at the feet of his faithful friend Evan during phone calls. The Farr Law Firm has always been pet friendly, and as any other pet owners  know, these little four-legged creatures are full of personality! Starting next week, one of our four office pets will chime in with their two cents on a number of issues in the “Critter Corner” of our blog.

Without further ado, allow me to introduce the “fur, feathers and four-legged things” of the Farr Law Firm!

Our first commentator is Chancellor. Chancellor, as his name suggests, is a dignified West Highland White Terrier (a “Westie”) and the beloved pet of Evan Farr. Chancellor provides the primary entertainment at the Firm with his daily antics of “Crazy Dog”:  running wildly up and down the hall, begging someone to stop drafting documents for a moment and play tag with him, and eventually collapsing in a heap next to Evan’s desk for a well-earned nap. He does his due duty by protecting the Firm from the mailman, but is really just a soft, cuddly, smiley little furball.

Also belonging to Evan is our next commentator, Tiger Lilly. The exotic and beautiful Tiger Lilly is an Australian Bearded Dragon, and the newest resident of the Farr Law Firm.  She is a calm, peaceful, and very docile young lady with beautiful tan patterned skin.  Despite being a reptile, and therefore cold-blooded, Tiger Lilly is “oddly cuddly” – when placed on one’s chest, she likes to climb up and press her face against one’s warm neck.  She loves to lie on her branch and bask in the warming glow of her sunlamp.  Life is good for Tiger Lilly. In fact, she is so lazy that she typically won’t eat unless you take her off her branch and plunk her down directly in front of her food bowl!

Next up we have our fantastic feline – Sporty Sport – a tuxedoed kitty of the finest variety, always in the Christmas spirit (he has one red eye and one green eye!) belonging to our Director of Client Services, Jeannie Caldwell. He was quite literally born in a barn but now thinks of himself as practically human. He eats with his hands, sits propped up on the couch like a human, and enjoys showers, baths and swimming.

Lastly (although probably not for long–the Farr Law Firm is continually growing!) we have our token member of the aviary community – Gidget – the beloved feathered friend of Grace Everitt-Benz , one of our Asset Protection Paralegals. The lovely Gidget is an extremely vocal parakeet in shocking tones of turquoise, black and white. He (yes, Gidget is a boy) enjoys watching “Friends” on television and has learned to mimic the sounds of the laugh track. His favorite thing in the world is the small mirror in his cage, where he spends hours looking at and talking to the other bird that he is so confident is there.

Stay tuned for the first installment of the Critter Corner!

Statistics show that 69% of parents do not have legal guardians named who can raise their kids if something tragic happens to them.  Many assume a family member would step in, or that they can simply “tell” someone about their guardianship wishes, but unfortunately, our legal system does not work that way.

Instead, if you don’t legally document your choice of guardians, a judge (who does not know you or your wishes!) will have to step in and make this decision on your behalf.  That means your kids could be placed with someone you would NEVER choose if something happened to you.

I’m often reminded of the Barber family car accident in 1996.  Mel and Casey Barber were killed in a horrific crash, while their 3 small boys survived.   If that’s not terrible enough, the boys were forced into foster care because their parents did not have documents in place that would allow them to stay with another family member.  A lengthy court battle ensued, and eventually a judge (who didn’t know Mel or Casey Barber) made the decision as to who would care for the boys.  Was this the same person the Barbers would have chosen? We’ll never know because they didn’t put their wishes in writing.

But here’s the thing—naming legal guardians to care for your minor children is EASY!  There is simply no good reason to go another day, week or year without them.  Here are four easy steps to help you get started with the process:

1. Sit down and brainstorm all the people who could possibly raise your kids if you were killed or incapacitated in an accident. Don’t limit your choices to family either. Think outside the box and write down everyone who even remotely fits the bill.

2. Determine who you would NEVER want to raise your kids in your absence. You’ll need to tell the courts who you DON’T want raising your kids in the event that individual contests your wishes and seeks custody anyway (This can be kept private and only revealed if the need arises).

3. Weigh your values. Make another column and write down what is important to you and/or your spouse.  Do you value education?  Religious or spiritual training? The ability to live in a certain community?  Being raised in a two-parent family?  Whatever your values may be, be honest about them, write them down, prioritize them and eventually rank the top three.

4. The next step is to match your top guardian choices to your top values. This will give you a clear picture of who you can trust to raise your children with the values you hold near and dear to your heart.

Finally, get with your estate planning attorney and legally document your choice of guardians so there’s no question as to who you want to raise your kids if something happens to you!  It’s the only way to guarantee your kids will be physically and financially protected in your absence. The four steps above are a great way to start, but putting your wishes into a proper legal document is essential.

Another integral part of your child protection plan is THE Child Protection Plan of the Farr Law Firm. This document acts as a stopgap should you become incapacitated but not killed–a unique circumstance that is not covered by your Will! Read more about it here.

Evan Farr was recently featured in Newsweek Magazine, the second-largest weekly news magazine in the U.S.

Evan was listed as  a “Nationwide Top Attorney”  as part of the magazine’s “Nationwide Top Attorneys 2011 Showcase,” a special advertising section.  The Nationwide Top Attorneys Showcase can be found in the December 26, 2011/January 2, 2012 issue.

This is the second time that Evan Farr has appeared in Newsweek Magazine.  In the December 28, 2009/January 4, 2010 issue of Newsweek, Evan was listed in the  ”Best of D.C. Area Lawyers” special advertising section.

About the Farr Law Firm

Using a holistic and often proprietary approach, our firm uses a vast knowledge, understanding, and deep respect of the elderly to help our elderly clients obtain the highest quality care at the lowest possible cost, which typically involves protecting assets in order to become eligible to have Medicaid and/or Veterans Aid and Attendance benefits pay for the appropriate level of care — be it home health care, assisted living care, or nursing home care.

Unfortunately, Medicaid eligibility rules are the most complex and confusing maze of legal rules in existence.  The United States Supreme Court has called the Medicaid laws “an aggravated assault on the English language, resistant to attempts to understand it.” and the United States Court of Appeals for the Fourth Circuit has called the Medicaid Act one of the “most completely impenetrable texts within human experience” and “dense reading of the most tortuous kind.” Veteran’s Aid and Attendance rules are likewise also exceedingly complicated and often treacherous to navigate.

Let Evan Farr and the Farr Law Firm provide you with expert and experienced asset protection planning and in-depth representation in connection with Medicaid and Veterans Aid and Attendance benefits, so you don’t wind up possible spending your entire life savings on long-term care, unnecessarily jeopardizing your future care and well-being, as well as the financial security of your family.

Upcoming Seminar

We are conducting a completely free, no obligation seminar this month.  Please be sure to RSVP before we reach maximum capacity!

First and foremost, we would like to thank all of you for another productive and prosperous year at the Farr Law Firm. The year 2011 brought about a few changes to the Farr Law Firm, including an expansion of our office into neighboring Suite 203 and the addition of two new staff members to our team. We’ve also added our three-part Lunch-n-Learn workshop series to our seminar repertoire which have been extremely well received. We helped over 280+ new clients reach their Estate Planning and Elder Law goals this year, and to further serve our military community we began offering a 15% discount on all of our estate planning services.

Lastly, in an effort to make your experience with our Firm as seamless as possible we recently launched our new “mobile-friendly” website.  For those of you who are familiar with our current website don’t worry! Nothing is changing for desktop computer users.  What will be different, however, is that from this point forward all users accessing our website via mobile phone or tablet computer will be automatically re-directed to our user-friendly and easy-to-navigate mobile website.  You can “Tap to Call,” get real-time directions no matter where you are currently located, claim your military discounts, check on upcoming seminar dates/times, and find the answers to your most frequently asked questions and more.  Should you for some reason wish to view our desktop-version on your mobile phone, simply follow the link at the bottom of the page: “Full Site.”

We extend our warmest holiday wishes to you and your family and we hope that you will enjoy special time with family and friends, reflecting on the year gone and looking forward to what comes in 2012.

Happy Holidays from all of us at the Farr Law Firm,

Evan, Dean, Justin, April, Karen, Connie, Jeannie, Grace, Brent, David, and Matthew (and Chancellor too!)

$20,447 per year (~$1,704 per month) for a qualified veteran;
$24,239 per year (~$2,020 per month ) if the veteran is married;
$13,138 per year (~$1,095 per month ) for a surviving spouse of a qualified veteran;
$31,578 per year (~$2,631 per month ) if both spouses are qualified veterans.

What is Veterans Aid & Attendance?

Veterans Aid & Attendance pension benefits are intended to be a form of financial assistance to meet the care needs of veterans and their surviving spouses. If you are younger than age 65, then you must be completely disabled in order to receive this benefit. Those over 65 do not have to be disabled. However, the veteran or spouse must be in need of regular aid and attendance due to: Inability of claimant to dress or undress himself (herself), or to keep himself (herself) ordinarily clean and presentable; frequent need of adjustment of any special prosthetic or orthopedic appliances which by reason of the particular disability cannot be done without aid (this will not include the adjustment of appliances which normal persons would be unable to adjust without aid, such as supports, belts, lacing at the back etc.); inability to feed himself (herself) through loss of coordination of upper extremities or through extreme weakness; inability to attend to the wants of nature; or incapacity, physical or mental, which requires care or assistance on a regular basis to protect the claimant from hazards or dangers incident to his or her daily environment.

It is helpful to note that not all of the disabling conditions in the list above are required to exist. It is only necessary that the evidence establish that the veteran or spouse needs “regular” (scheduled and ongoing) aid and attendance from someone else–not that there be a 24-hour need.

How do I know if I can qualify for Veterans Aid & Attendance Pension Benefits?

You or your spouse must have served on active duty for at least 90 days, at least one day of which occurred during a period designated as wartime (see below). There must have been an honorable discharge as well. Single surviving spouses of such veterans are also eligible.

Periods Designated As Wartime:
World War II — December 7, 1941 through December 31, 1946
Korean Conflict — June 27, 1950 through January 31, 1955
Vietnam Era — August 5, 1964 through May 7, 1975; for veterans who served “in country” before August 5, 1964, February 28, 1961 through May 7, 1975
Gulf War — August 2, 1990 through a date to be set by law or Presidential Proclamation

If you would like to learn more about the Veterans Aid & Attendance program and how the Farr Law Firm can help you obtain the benefits you deserve, contact us!

If you would like to sign up to receive Evan Farr’s Aid & Attendance 4-Part Mini Series via e-mail, please click here.

Filing a Veterans Aid & Attendance Claim

Not necessarily. Even if you are single and/or have no children, a Virginia wills and estates lawyer should still be in your plans. Why? Because estate planning is really about YOU.

While it is absolutely advisable for married people or those with children to work with a wills and trusts lawyer, it is actually just as important for single adults, as well.

In fact, there are times when it’s almost more important for singletons. After all, when a married person suffers a major illness, it’s usually pretty clear who will take on medical and financial responsibility. The water gets a bit murkier for unmarried individuals.

If you were to suddenly become incapacitated, who would make your medical decisions for you? If you haven’t worked with an estate planning attorney, the answer to this question becomes quite complicated. Possibly your parents would be called in to determine how your medical care should proceed. Maybe it would be a sibling. Most likely, it would not be your best friend or your significant other or whomever you would choose. Even if your parent or sibling would be your first choice, that doesn’t mean that the courts would agree without having your express wishes legally documented.

And what about your finances? If you are unable to take care of your finances for a period of time, who do you think will do so? The answer to that is: whomever the courts say. Again, it could be a parent, a sibling, some other relative, or even a court-appointed individual.

Finally, what will become of your things if you should unexpectedly pass away? Who would have legal rights to your belongings, to your home, to your pets? You may think you know the answers, but without clearly outlining your wishes with an estate planning attorney, you have very little control over the matter.

A single adult without children does not need to worry about creating guardianships and trusts to provide for his or her offspring, but it’s certainly a good idea to look out for yourself. Some of the basic legal documents any single person should have include:

• A will to determine what will become of your assets in the event of your death.
• A power of attorney for healthcare (or Advance Medical Directive) to name the person you want making medical decisions on your behalf.
• A living will to clearly explain your wishes regarding medical procedures and life support.
• A power of attorney for financial matters to name the person you feel should be responsible for your money if you are incapacitated.
• A revocable living trust to centralize management of assets if you become incapacitated and keep your assets out of probate if you should pass away.

These five documents are crucial in ensuring that your wishes are met and that you have control over your future. A wills and trusts attorney in Virginia can easily get you on the path to having these affairs in order.

Wills and Basic Estate Planning

Financial Powers of Attorney

Medical Powers of Attorney