Following are a few common, incorrect statements that I often hear in my practice. Click on the “question mark (?)” to learn more about each topic.
The short answer is no. This is a common misconception. Having a valid Will, does not determine whether a probate is needed. How your assets are titled upon your death is what determines whether or not a probate needs to be established. Assets in your individual name, without any type of joint ownership, or in which do not have a designated beneficiary, will be subject to probate. In order to pass those assets to designated persons, the Will needs to be filed with the Probate Court, and a Petition for Probate needs to be filed.
In 2015, an individual may give up to $14,000 per person to as many people as you want without the necessity of filing a federal gift tax return. This type of gifting can be done each and every year. The amount in the past was $10,000, and many people still believe this is the amount they can gift. In actuality, the amount has increased over time and therefore it is now $14,000 for this year. It’s also important to note that the lifetime gifting exclusion amount is $5,430,000 per person. Therefore, any gifts made by a person over their entire lifetime will not be subject to gift tax, so long as the total amount is under the $5,430,000 amount. However, it is important that the amount of all gifts over $14,000 be reported on a federal gift tax return, because they will still need to be accounted for in the event that an estate tax return is required.
In order for a person to qualify for Medicaid benefits, they must meet financial criteria. People often times believe that they can still give away their assets or make gifts and still qualify for benefits. In fact, many people believe that they can give away $14,000 per year to as many persons as they choose and still qualify for benefits. Once again, this is a misconception. The annual gift tax exclusion of $14,000 has no bearing on Medicaid, and in fact such gifts made within 5 years of applying for Medicaid benefits will be treated as a disqualifying transfer of assets.
There are other planning techniques that can be utilized, and it is important to seek the legal advise of an experienced elder law attorney, such as Attorney Beauvais.
If a person has been in the hospital for a minimum of three days, and then is transferred to a nursing home, Medicare Part A will pay for nursing home care. Medicare will pay for up to 100 days of skilled nursing care or rehabilitation services. If a person admitted for rehabilitation no longer needs those services, then the coverage could be less than 100 days.
Medicare will pay 100% of the cost for the first 20 days, but then the coverage is only 80% of the cost for the remaining 80 days. Once Medicare coverage is exhausted, then the person either pays out of pocket for nursing home care, or if eligible, will apply for Medicaid benefits. Attorney Beauvais has over 20 years experience in Medicaid planning and assisting clients when they are entering a nursing home, and can help you navigate through this complex area of the law.