It is not unusal to have a will or trust prepared in our office where the client requests that in the event they are not married or if they die without spouse or children that a parent receive some or all of their estate.  This could be a case of “watch out what you wish for” if your parents are entering or already are in their retirement years.

The easiest way to lose a government benefit under social security, including long term care benefits under the Medicaid program which pays for nursing home and some other types of skilled care, is receiving an inheretence!

Certain government benefits programs, such as Medicaid, look at a person’s “countable resources” to determine program eligibility.  The receipt of a gift or inheretence that puts a person over the $2,000 of countable resources ( this isn’t much) will cause an immediate loss of long term care benefits!

The way to correct this problem is to use a Third Party Special Needs Trust.  Leaving your parents or older loved ones property in such a trust allows your gift to supplement the govenment benefits; not supplant them.  Since long term care costs can run over $8,000 per year, merely using this type of trust in your estate plan allows you to still leave a gift and not cause a parent or older loved one from losing their benefits and insurance under the Medicaid program. 

Elder law attorneys spend as much time helping caregivers reduce their stress as they do assisting and advising on long term care planning options for a client.  Research has shown that caregivers are starting to die sooner than the person to whom they are providing care! 

With this in mind, I present to you a Bill Of Rights for Caregivers that was given to me by an alzheimers support group recently.  Hope you caregivers reading this take ALL the advise; without you, the “patient/spouse/loved one” will not get the care they need and deserve.  Here goes:

1.  Take Care of Yourself.  This is not an act of selfishness.  It will enable you to take better care of your loved one.

2.  Seek help from others.  You need to recognize your limitations ( one of my favorite Clint Eastwood lines).  You are not less of a person asking for help.

3.  Maintain facets of your own life that do not include the person you are caring for, just as you would if the person were not ill.  You know you do everything within reason for your loved one; take time for yourself!

4.  To get angry and frustrated.  Let it out!  If you are depressed, let it show and get help if you need it.  You are not weak requesting help.

5.  To reject any attempt by your loved one to (either consciously or unconsciously) manipulate youthrough guilt, anger and depression.  Don’t get sucked in to someone making you feel bad because they do. 

6.  To take pride in the accomplishments you make.  Give yourself a “pat on the back.”

7.  Protect your right to make a life for yourself so you have hobbies and things to do when your loved one no longer requires all your time.

I hope caregivers reading this will take these rights and suggestions to heart.  Have a good day!  Robert Morgan

NPR recently ran a program on the impact long term care costs will have on our aging society.  One of the ways these costs will be (or at least ) are intended to be shifted from the government entitlement programs, such as the Medicaid program, is for baby boomers to purchase long term care insurance.  To help encourage baby boomers to purchase this product, in February, 2006 President Bush signed into law the Deficit Reduction Act (DRA).  A component of the DRA is the Long Term Care Insurance Partnership Plan (Plan). 

 Under the Plan, certain types of long term insurance plans will provide significant economic benefits for those persons purchasing it.  What this Plan does, among other things, is to provide a “dollar for dollar” benefit so owners of this insurance can have more assets in their possession when, and if, they ever require the need for government benefits to pay for long term care, whether at home or in an approved facility.  For example, purchasing $250,000 of long term care insurance benefit allows the policy owner to own up to $250,000 of assets and still be able to obtain Medicaid benefits to pay for their long term care needs!  Since the general rule on assets is an applicant can’t have more than $2,000 of “countable resources” to apply for long term care medicaid benefits, by purchasing a long term care partnership insurance plan of $250,000 will allow an applicant for benefits to keep not just $2,000 but $252,000 of resources!  This means you do not have to be poor to have benefits; you can leave assets to loved ones at your death and not worry the government will take them.

Only a few companies can write these Plans now; however, more will be able to sell them once the state insurance commissioner approves each submitting company’s Plans.  Check with an elder law or estate planning attorney to make sure any policy of insurance you are purchasing is a Plan policy and will give you the “dollar for dollar” benefit.  The requirements for any Plan policy will depend on your age at time of purchase.  Feel free to contact me at 904-268-7227 or at rmorgan@flfirm.com to get any additional information or explanation if you have questions.

Creating life estates in real property, including homestead real property, whether voluntary or involuntary, can assist in, among other things,  estate and long term care planning as well as probate avoidance.  Typically, life estates are created by deed or by a defective testamentary conveyance or distribution of homestead real property.  If a client has an interest in a life estate as the life tenant or remainderman, you will likely have run into the following questions:

• Who pays the light bill?
• Who pays for the new roof?
• Who makes the mortgage and tax payments?

Although there is not always an easy answer to some of these questions, the Florida Trust Code does provide some guidance, as it relates to the life tenant and the remainderman’s interest and their respective obligations.  See, Sections 738.801, 738.701 and 738.702, Florida Statutes.

To assist in responding to this question, the following is a letter our office utilizes to try to resolve general issues and conflicts as to liability and responsibility for payment because of the creation of a life estate interest in real property.  As with any form, this letter is revised to deal with specific issues.  I take no pride in authorship, and certainly would enjoy any comments Section Members have if they believe the letter can be improved.

Dear _______:

This letter discusses the typical liability and responsibility of a life estate tenant.  As you are aware, [deceased]  provided you with a life estate in [his/her] primary residence at the time of [his/her] death or [a life estate was created and you are the life tenant]

Florida law imposes various rights and obligations upon a life tenant (i.e., you) and the remaindermen (i.e., those who will receive the property after your death or your abandonment of the property).   Florida law makes the interest portion (i.e., your portion as the life tenant) responsible for ordinary repairs, recurring expenses and taxes as well as the payment of insurance on the subject property.

All of this is subject to change if there is an agreement between or among the life tenant and the remaindermen; however, such agreement should be in writing and recorded so there are no problems should the property be sold and costs and expenses are to be apportioned.

In the event a mortgage encumbers the property, you will see that Section 738.702(1)(c), Florida Statutes, includes the payment of principal of a mortgage on the life estate as the obligation of the remaindermen and Section 738.701(3), Florida Statutes, makes the interest portion an expense of the life tenant.

If we can provide you with further or more specific information regarding any particular expenses, please advise and we will be happy to do so.  Should you wish a copy of these provisions of Florida law, we will be happy to provide them.

Please call with any questions or comments.  It is our pleasure to be of service.

If you have any questions or comments regarding this issue, please feel free to contact me at rmorgan@flfirm.com or directly at 904-268-7227.

After 20 years of practice, I have noticed certain common myths and misconceptions about what people can do for a spouse or loved one and what documents permit for this purpose. Here are a few:

1. MYTH: I can do whatever I want for my spouse since I am married; I don’t need any documentation to act for my spouse.
   
   TRUTH: Under Florida law, the fact a person is married does not in and of itself provide the authority for one spouse to act for another. Spouses must have durable powers of attorney naming each other to act for them in the event one spouse is unable to act. For example, if one spouse needs to assist the other with applying for government entitlements or obtaining medical consent or treatment, a durable power of attorney, healthcare surrogate designation and a living will are documents each spouse should have for the other. Otherwise, a spouse is severely limited in their ability to act, unless the spouse goes to court and obtains an expensive guardianship.




2. MYTH: A living will and a living trust are the same document.

   TRUTH: A living will, as has been exhaustively discussed by the media during the Schiavo case, deals with end of life issues. Basically, a living will provides written proof of a person’s intent that they do not want extraordinary medical measures taken in the event they either are (a) terminally ill, (b) at the end of a terminal type of condition, and/or (c) in a persistent vegetative state. The Schiavo matter was made difficult because Florida does permit verbal living wills. Obviously, a written living will is better.A living trust is a document which may be utilized to assist in avoiding probate and can help minimize estate and other transfer tax liability at a person’s death. It has nothing to do with end of life issues and should not be confused with a living will.




3. MYTH: If I have a will there is no probate.

   TRUTH: When a person dies, they may leave their property by either using a will or a revocable trust. If no will or revocable trust is utilized to dispose of property at death, then state law (referred to as intestate succession) determines who receives your property.Under Florida law, if you have a will and a person deceases owning property in their name, there must be a probate. Will means probate. Probate is the process of determining if a will is valid, paying creditors from your assets and then distributing your property to your named beneficiaries or heirs. Using a revocable living trust is a way to avoid probate, because property is actually owned by the trust, rather than by a decedent.By statute, probate fees run approximately 3% of the value of the assets disposed of by a will. For example, if you have assets valuing $300,000.00 (and this is a gross asset figure; you do not subtract debts or mortgages which may be owed at time of death), then the fee to probate is approximately $9,000.00, plus costs.




4. MYTH: To obtain government benefits, you must be totally broke and you must sell your home.

   TRUTH: False! Under Florida law, you are not required to sell your primary residence, regardless of the value, to obtain certain benefits, including long term care benefits. Your primary residence (as well as other assets) is exempt from unsecured creditors claims up to one-half acre if the property is located within a city, and up to 160 contiguous acres if the property is located in an unincorporated area of the county. For example, if you live in an unincorporated area of a county (i.e., northern St. Johns County, Florida) even though you may have a Jacksonville post office address, as this is St. Johns County, it is not part of the actual City of Jacksonville and you are entitled to 160 acres of land protected from unsecured creditors claims.Other types of property are also permitted and you can still obtain government benefits.




5. MYTH: I cannot disinherit any of my children. I must at least leave them at least $1.00.
   
   TRUTH: In Florida, you can disinherit any or all of your children. You do not need to leave them anything. In fact, I am against leaving a child whom you wish to disinherit anything as doing so would make them a “interested person” providing them with rights under Florida law and making it easier for them to contest a will if they are excluded.

If you have any other questions you would like answered, please feel free to contact me as I will be happy to answer any of your questions. Please feel free to contact me directly at 904-268-7227 or by email, rmorgan@fjbd.com.

ROBERT M. MORGAN - BIOGRAPHY

Robert M. Morgan - born Richmond, Virginia, 1959. Partner in Charge of the Estate Planning and Elder Law Department of Ford, Bowlus, Duss, Morgan, Kenney, Safer & Hampton, P.A., Jacksonville, Florida. Undergraduate degree from Arizona State University and Juris Doctor from Mississippi College, with Distinction. Author of numerous articles and seminars on real property, probate and estate planning issues. Member Florida, Tennessee and Jacksonville Bar Associations; served as chairperson of the Probate and Trust Law Section of the Jacksonville Bar, and is an active member of the Elder Law Section of Florida Bar and the AARP Legal Services Network. Member National Academy of Elder Law Attorneys and Academy of Florida Elder Law Attorneys and the Northeast Florida Estate Planning Council and Adjunct Professor of Law, Florida Coastal School of Law. Practice areas include elder law, estate planning and probate, real estate, corporate and business law. Email rmorgan@flfirm.com