What Financial Planners, Trust Officers, CPAs and Estate Planning Attorneys Need to Know About Elder Law

1. What Financial Planners, Trust Officers, CPAs and Estate Planning Attorneys Need to Know About Elder Law Charlie Robinson Florida Board Certified Elder Law Attorney www.Charlie-Robinson.com www.CharlieRobinsonFuturist.com

2. Critical Resources • DCF Manual - MyFLorida.com • HCFA Pub 45-3, Transmittal 64 • 42 C.F.R. Part 435 • 20 C.F.R. Part 416 • 42 U.S.C. Sections 1396 et seq • Florida Statutes 409.901 et seq • Florida Administrative Code Rules 65C-8.011 et seq. • POMS (Program Operation Manual System) http:ssa.gov/poms.nsf

3. Alphabet Soup A B C & d’s Of Trusts

4. First Party Trusts (Pay Back) • d4A - Under 65 • d4B - QIT • d4C – Pooled 42 USC 1396p

5. Under 65 Disabled (d)(4)(A) • Who Can Establish? • Parent • Grandparent • Legal Guardian • Court • Disabled Defined • Social Security Disability • SSI

6. Qualified Income Trust (d)(4)(B) • Income over $1,656 • Not a SNT • Florida’s Income Cap • Set up for first month benefits needed • All Leftovers to the State • Specific authorization in DPOA

7. Specific Authority Add to your DPOA language or else… To create, fund and maintain an Income Trust pursuant to 42 USC 1396p(d)(4)(B) in order to qualify me for Medicaid or any other public assistance benefits

8. Pooled Trust (d)(4)(C) • Same Level of Disability as Under 65 • No Age Limit • Separate Account for Each Beneficiary • Joinder Agreement • Non-Profit Association Establishes

9. Pooled Trust (Cont) • Set up by • Individual • Parent • Grandparent • Legal Guardian • Court Order • Ultimate Beneficiary • State or • Charity

10. Third Party Trusts for Medicaid • Availability of Assets and Income Measured by Trustee Discretion • Living Trust or Testamentary if assets owned by person other than spouse • If spouse trust must be under will • No payback requirements after death of beneficiary

11. Other Trusts for Medicaid • Assets Available if Grantor is: • Applicant • Applicant's Spouse • DPOA or Court • At Direction or Request of Grantor or Grantor’s Spouse • Testamentary trust OK

12. Elective Share and Medicaid

13. What is Elective Share? • Rights of surviving spouse to deceased spouse’s assets • Up to 9/30/01 • 30% of net Probate Estate • After 10/1/01 • 30% of Nearly Everything

14. When is Election Due? • Within 6 months of Notice of Administration or 2 years • If no election made, disqualifying transfer results

15. Who can Make the Election? • Spouse • Guardian • Power of Attorney • If Guardian or Power of Attorney, court must determine election in spouse’s best interests

16. Elective Estate Property • Probate estate • Pay on death, transfer on death, In trust for, co ownership with right of survivorship • ½ tenancy by the entirety • The portion of property decedent could use or withdraw without accounting to another person

17. Elective Estate Property (cont) • Fractional interest in joint with right of survivorship, • Tenancy by the entirety • Value divided by number of tenants • Property transferred over annual exclusion

18. Elective Share Trust • Total discretion income and principal 0% • Income only 50% • Income with principal discretion 80%

19. Qualifying Special Needs Trust (100%) • Court finds “ill” or “disabled” • Qualified Trustees • Total trustee discretion

20. Qualifying Special Needs Trust • Trustees • Majority Must Be Eligible Trustees • Ineligible Trustees • Decedent’s Grandparents • Descendant's of Decedent’s Grandparents • Who are not also descendant’s of the surviving spouse • Income and Principal at Trustee Discretion

21. Qualifying Special Needs Trust • Full credit toward Elective Share Amount • Court Approval and Ineligible Trustee Rules When Trust Assets Exceed $100,000

22. Elective Share Trust • No restriction on choice of trustee • Must pay income with trustee discretion for principal • Can get QTIP treatment

23. Medicaid and the Elective Share • Either Elective Share or Qualifying Special Needs Trust • Must be testamentary trust for Medicaid

24. Spouses with family from prior marriage(s) • Pre nuptial agreements- still valid? • Do informal understandings still work?

25. Caregiver spouses • Ill or disabled spouse at home • Spouse in long term care facility

26. Elective Share Scenario • Husband Nursing Home Medicaid • Wife sells house • Wife’s assets $500,000 for elective share calculation • Elective share $150,000

27. Wife’s Estate Plan • Living trust with assets to children • Transfer on death, joint with survivorship, and beneficiary designation to her children • What if she had set up living trust with special needs limitation to husband if he survived, then to her children? • D I S A S T E R

28. Preferred scenario Fork in the Road Living Trust • If ill spouse dies first, traditional trust • If well spouse (grantor) dies first, EST/QSNT

29. Administering Trusts for Special Needs People • Must have working knowledge of SSI • Over 65 or • Blind or • Disabled • SSI = Medicaid • Assets Under $2,000 in available assets • Income limit $552

30. Opportunity for Fiduciary Pros • Special Needs Trusts and Elective Share issues beyond Self-help • Fees should reflect traditional fiduciary fees plus • Knowledge required to maintain SSI qualification • Ability to determine special needs • Doing well by doing good

31. Visit our Web Site www.Charlie-Robinson.com www.CharlieRobinsonFuturist.com Or Email Comments to Elderlaw@Charlie-Robinson.com Presentation graphics by Wendy