How Elder Law Attorneys Help Families — Case Study
Edward Jr. (88) and Rebecca (86), married
(Edward III’s parents) (Diana’s father)
Ralph (recently deceased)
Edward III (58) and Diana (53), married
(Edward IV, Susan, and Julie’s parents)
Edward IV (25), Susan (23), and Julie* (18)
*Julie has special needs
Edward Jr. (88) and Rebecca (86), married:
Edward and Rebecca have been married for 60 years and live at home. Edward Jr. has Alzheimer’s disease and is beginning to need more care than what Rebecca can provide on her own, given her own health challenges. Edward and Rebecca have a vehicle, home, checking, savings, retirement accounts, and CDs and receive Social Security and Pension. However, the cost of memory care (approximately $6,000/month) will bankrupt them in a few short years. They need help but are not sure what their options are.
Ralph (recently deceased): Ralph recently passed away. Diana, his daughter, will inherit his estate and trust assets and is also designated as the Personal Representative of his Will and Successor Trustee of his Trust. Diana is a bit overwhelmed with all she needs to do and wants to be sure she handles everything correctly. Diana has also just discovered that Ralph designated his 3 grandchildren, Edward IV, Susan, and Julie as the equal beneficiaries to his life insurance policy, which had a $300,000 death benefit. This is no problem for Edward IV (25) and Susan (23), who are typical young adults. However, Julie (18) is developmentally disabled and has significant special needs. She receives Supplemental Security Income (SSI), AHCCCS health insurance and Arizona Long Term Care System (ALTCS) benefits; the $100,000 inheritance will cause her to be over resources and lose these necessary public benefits. Diana is very concerned about the possibility of Julie losing her income and health insurance.
Edward III (58) and Diana (53), married: Edward III and Diana have a lot on their plate- worried about Edward’s dad and working through Diana’s father’s estate and trust administration has them thinking they really need to be sure they have a Trust and estate plan in order. In addition, now that Julie has turned 18 (a legal adult), Julie’s doctors, school, and DDD-DES case workers have all suggested Edward III and Diana seek Guardianship over Julie so that they can continue to handle Julie’s personal and medical decision making without any problems. They have also wondered about what would happen if Susan or Edward IV were seriously ill or injured, would they as parents be able to talk with the kids’ doctors, make medical decisions, pay bills, settle claims, etc. for their other children?
Edward IV (25), Susan (23), and Julie (18): Edward IV and Susan get along with each other and both love their sister, Julie. If anything should happen to their parents, either would be able and willing to serve as her medical decision maker and advocate.
How can the elder law attorney help everyone in this family?
Edward Jr. and Rebecca hire an elder law attorney to devise a long-term care and asset protection plan so they can preserve as much of their assets as possible and qualify Edward Jr. for ALTCS benefits, which will pay for his home health, assisted living, or memory care costs. This allows Rebecca not to worry- she won’t go bankrupt and her husband will be well taken care of. The elder law attorney will also update their estate plan to be sure that Edward III (their son) will be able to handle their medical and financial matters in the event of their incapacity, ensure their assets will not be subject to AHCCCS/ALTCS estate recovery or liens, and there will be no probate upon their deaths. Once ready, the elder law attorney will also handle the ALTCS application start to finish. Now, Edward Jr. and Rebecca and their family have peace of mind knowing there is a game plan in place for their futures.
Ralph’s Estate needs to be administered. Diana hires an elder law attorney to represent her as Personal Representative of the Estate and Successor Trustee of the Trust. Now, Diana has the professional guidance she needs to know she is handling everything correctly. The elder law attorney also has a solution for Julie’s inheritance problem: use of a first party Special Needs Trust established under 42 USC 1396p(d)(4)(A). With the Special Needs Trust Julie can benefit from the inheritance ($100,000) and keep her SSI, AHCCCS or ALTCS benefits and services. The elder law attorney is also able to give ongoing advice to Diana regarding the administration of the Special Needs Trust.
Edward III and Diana hire an elder law attorney to prepare their trust and estate planning documents, which will establish, upon the second of them to die, a third-party Special Needs Trust (aka Supplemental Care Trust) to hold and manage Julie’s 1/3 share of their estate and creditor protection trusts for the benefit of Edward III and Susan for their 1/3 shares. In their Wills, Edward III and Diana will also designate Edward IV and Susan to serve as successor Co-Guardians for Julie. They also hire the elder law attorney to petition the Court for their appointment as legal Co-Guardians for Julie, and talk to the attorney about preparing basic financial powers of attorney and medical directives for their other children.
Now, Edward III and Diana feel better knowing that all the pieces of the puzzle are put together so that if they were to pass away their children will each be provided for in the best manner possible.
Edward IV, Susan and Julie. Edward IV and Susan both agree they should have financial powers of attorneys and medical directives in place that would allow their parents to handle their medical or financial matters in the event they were ever unable to themselves; they do not want to potentially end up being the subject of guardianship or conservatorship proceeding themselves if they were caught unprepared. The elder law attorney prepares these documents for them. Lastly, Julie’s needs will continue to be met primarily from public benefits, but secondarily now with the inheritance from Grandpa Ralph held in the first-party Special Needs Trust and ultimately later via her parent’s estate planning. In addition, her parents can continue handling her personal, medical and educational decisions so Julie has no disruption in her care or her benefits.
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