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East Hanover New Jersey Elder Law Blog

Helping your parents emotionally prepare for estate planning

Do you worry that your parents do not have sufficient estate plans in place or any at all? You probably want to bring the subject up, but this can be very challenging when your parents insist on being independent and avoid talks about the future. The subject of end-of-life decisions can be difficult for the elderly as time brings them closer to that reality.

However, it is imperative that your aging parents have financial and medical security in the event of incapacitation or death. There are ways you can ease into the topic to help your family.

What are the responsibilities of a court appointed guardian?

In New Jersey, a guardian of the person is an individual appointed by the court to make decisions and act on behalf of a person who cannot make decisions independently. A guardian of the person has certain responsibilities over the protected person.

First, a guardian of the person is responsible for advocating for the independence of the protected person. If possible, any decisions should be discussed with the protected person, whose input should be considered. If the protect person cannot communicate their preferences or if their choices would be harmful to them, the guardian of the person should make decisions that they feel are in the best interests of the protected person.

What to consider when long-term care planning

Long-term care planning is important for people in New Jersey to consider while they are still competent enough to do so. For example, they may need to execute legal documents to name who will make decisions on their behalf if they become incapacitated. Also, they will need to decide what kind of elder care they will want as they age, and how they will pay for such care.

One way to pay for long-term care is through an insurance policy. In a traditional long-term care insurance policy, a policyholder would pay a premium each year, and should they need to enter a nursing home or need in-home care, their policy would cover at least some of the costs. However, it often only provided benefits for a certain number of years. These policies have become less popular these days, and while at one time more than 100 insurance companies sold long-term care insurance, now under 15 still do.

What documents should one execute when elder care planning?

As a person ages, they may reach a point where they can no longer care for themselves. They may need help with daily care activities or they may need in-home health care. Often, a family member steps up and takes on the role of caregiver. While this is often an act of love, it can be confusing if the caregiver does not know what the person's wishes would be. Therefore, people in New Jersey should consider executing the following documents while they are still able, to provide guidance to their caregivers in the future.

Two documents a person may initially think of executing are a will and a living trust. Most people are familiar with wills, in which an executor designated by the person manages the person's estate after the person's death, and passes the estate assets on to the person's heirs. However, it can also help to execute a living trust. This document allows a person to create a trust. The assets in this trust are then managed by a trustee once the person becomes incapacitated or passes away.

Transferring a home to one's child as part of Medicaid planning

To qualify for Medicaid benefits, the combined total of a person's income and assets cannot surpass a certain threshold, which is relatively low. A person's home may be counted as an asset for the purpose of Medicaid qualification. However, people in New Jersey need not impoverish themselves to obtain Medicaid benefits. This is because there are exceptions to what counts as an asset when determining whether one is eligible for Medicaid.

For example, it is possible to transfer the house a parent lives in to an adult child who is caring for that parent and has been living with that parent in the parent's home for at least two years. In this way, the house will not count as an asset for purposes of the five-year look back period when the person applies for Medicaid. The care provided needs to be related to assisting the parent with daily personal care and tasks. In general, an adult child cannot be considered to be a caregiver and also hold down a fulltime job, as the care of the parent is supposed to be a fulltime endeavor.

What to include in a living will

Elder care planning entails more than just securing Medicaid. It also involves creating or updating routine estate documents, such as guardianships and powers of attorney. Another one that you should include is a health care directive, also known as a living will. This addresses the kind of care you want if you are on life support and therefore unable to express your wishes. It differs from durable medical power of attorney in that it only covers end-of-life decisions and not all medical treatment.

The most common association with living wills is tube feeding, thanks to the Terri Schiavo case. However, your opinion on tube feeding is not the only thing to discuss in your health care directive. You should also include the following important information.

Protecting assets through a special needs trust

Many people in New Jersey, including the elderly and special needs individuals, rely on government benefits to make ends meet financially. However, there is a limit on the monetary amount of assets a person can have in order to qualify for certain government benefits. People may fear that they must impoverish themselves in order to qualify for benefits. However, through the execution of a special needs trust, certain assets will be excluded when a person applies for benefits.

In general, there are two different types of special needs trusts. One is a first-party special needs trust. This type of trust is executed by a person prior to becoming disabled or after the person qualifies for government benefits. However, the more common type of special needs trust is a third-party trust. A third-party trust is executed by a family, with the trust beneficiary being the special-needs child.

When does the court appoint a guardian?

Sometimes, as a person ages, his or her mental or physical abilities deteriorate to the point that he or she becomes partially or totally incapacitated. Special needs children may also be incapacitated as adults. When this happens, a court appointed guardian may need to be selected to take care of the incapacitated person's affairs. However, state law defines what duties a guardian can fulfill.

Under New Jersey Statutes ยง12-24.1(a), if a court deems that an individual is totally incapacitated, and therefore is unable to make any decisions on his or her own behalf or manage his or her affairs, then a general guardian will be appointed by the court. A general guardian has the power to make all decisions on behalf of the incapacitated person.

We assist those in New Jersey appealing a denial of Medicaid

The baby boomer generation is aging, and some may find that their parents are in need of nursing home care, or they may have reached an age where they themselves need nursing home care. Many people in such situations will want to apply for Medicaid benefits. However, sometimes when a person applies for Medicaid, their application is denied.

Fortunately, it is possible to appeal such a denial. Medicaid appeals are first filed with the New Jersey Division of Medical Assistance and Health Services. This is the state agency that oversees Medicaid in New Jersey.

Why to consider executing a special needs trust

People in East Hanover have so many choices when it comes to estate planning and elder care, that it can be difficult to know where to start. Sometimes a person creates a will, and believes their estate planning is done. This can be problematic if the person also wants to rely on Medicaid, Supplemental Security Income or other government benefits as they age. In order to qualify for these benefits, a person's assets cannot exceed a certain threshold, and that threshold is fairly low. If a person's assets exceed the threshold, they will be ineligible for benefits.

It may seem like a person has to nearly totally deplete their assets to qualify for benefits, but that does not have to be the case. Instead, a person can set up a special needs trust. The assets placed in a special needs trust are in the complete control and management of the trustee, not the beneficiary. Therefore, when pursuing government benefits, the assets in the special needs trust will not be counted, as the beneficiary is not the one in control of them.

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