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Nursing Home & Long Term Care Planning
General Overview of Long Term Care Planning
Long-Term Care Insurance is great if you have it. That said, most people do not have this type of insurance, and Medicare and your supplemental health insurance only cover UP TO 100 days for rehabilitation in a nursing home. Thereafter, there generally is no coverage available. Long-Term Care benefits are generally limited to a maximum per day benefit. Many times the maximum daily benefit is well below the actual cost of care. Also, the length of benefit may be limited in total dollars paid out or by time. Even though most long-term care policies are guaranteed to be renewable, there is generally no guarantee regarding the amount of future premiums.
Basically, there are four (4) ways to pay for long-term care:
Long-Term Care Insurance
VA Aid and Attendance
Private Pay: Nursing homes in general cost $7,000 to $9,000 per month. Assisted Living Facilities generally start with a base rate of approximately $2,000 a month, and then add “care points” based on the needs of the individual for assistance with the activities of daily living. It is very common for the total assisted living facility bill to be between $3,500 and $4,500 a month.
Long-Term Care Insurance: Long-Term Care Insurance is great if you have it. That said, most people do not have this type of insurance, and Medicare and your supplemental health insurance only cover UP TO 100 days for rehabilitation in a nursing home. Thereafter, there generally is no coverage available. Long-Term Care benefits are generally limited to a maximum per day benefit. Many times the maximum daily benefit is well below the actual cost of care. Also, the length of benefit may be limited in total dollars paid out or by time. Even though most long-term care policies are guaranteed to be renewable, there is generally no guarantee regarding the future amount of premiums.
VA Aid and Attendance: If an individual served in the US military for at least 90 days on active duty, one day during a declared wartime, they can potentially obtain VA Aid and Attendance benefits. The maximum amount of monthly VA Aid and Attendance benefits is approximately $2,100 for a veteran ($1,100 for a surviving spouse who did not re-marry or divorce). You are permitted to have both VA benefits and Medicaid benefits paying at the same time. Generally, the VA does not cover nursing home care unless you have a 100% service connected injury; otherwise, the VA Aid and Attendance benefit drops down to $90 a month in a nursing home. The VA has separate Rules from Medicaid that are based on federal law. There is generally a 9-13 month waiting list for benefits, however, when the benefits are ultimately paid, they are paid retroactively to the date of application. There is no look-back period for gifting in the current VA system for gifts made prior to the VA application.
Medicaid: Medicaid has three (3) Long-Term Care programs: the Home and Community Based Care program; the Assisted Living program; and the Nursing Home program. Effective August 2013, all of these programs were out-sourced by the State of Florida and are managed by private, for profit companies, paid by the State of Florida. Medicaid law is a combination of both state and federal Law and differs from state to state. The State of Florida has some of the most advantageous laws in the United States. Medicaid Rules are very different from VA Aid and Attendance Rules. Medicaid has a five (5) year look-back period for uncompensated transfers (“gifts”) made by the applicant to anyone but their spouse. The Home and Assisted Living Programs are not “entitlement” Programs, so often there are waiting lists for funded positions. The Nursing Home Program is an entitlement Program, so there should always be funding for this Program.
Home and Community Based Care Program: consists of 10-15 hours per week of various care in an individual’s home such as personal care, medication co-pays, over the counter medications, home delivered meals, house cleaning, environmental adaptation, companion, respite care, and adult day care. The home can be the individual’s residence, the residence of a friend or relative or even the independent living section of an assisted living facility. Once an individual qualifies for this Program, it is free (no patient responsibility) for the care provided.
Assisted Living Facility Program: There are about 50 facilities in Brevard County that accept Medicaid as a form of payment. However, there is an issue with this Medicaid Program, as it has minimum payments required to be paid to the facility, even while on Medicaid benefits, which varies from facility to facility.
Nursing Home Program: Generally, almost all nursing homes accept Medicaid as a form of payment and the majority of residents who are in the facility for long-term care are on Medicaid.
Determining Whether to Long Term Care Plan
There are several factors to consider in determining whether to begin Long-Term Care Planning:
Health: If an individual is in the hospital or in a rehabilitation center, you should certainly have a consultation with an attorney regarding your options. Also, if an individual has a progressive illness, such as dementia, MS, Macular degeneration, COPD, ALS, you should also immediately seek the advice of an attorney.
Changes in the Law: VA Law is federal, however, Medicaid Law is state and federal. Florida has some of the most advantageous laws in the United States for Long-Term Care Planning. As the Baby Boomers age, the government has increased its focus on eliminating legal loopholes in the laws which affect Long-Term Care Planning. Usually, new laws apply prospectively. Therefore, sometimes it is best to act in advance of an emergent need in hopes of being “grandfathered” into an existing law.
Assets: There is no specific amount of assets that qualifies you or disqualifies you for from potentially Long-Term Care Planning. Unfortunately, many people believe that they cannot qualify for Medicaid benefits because they have too many assets. This simply is not the case. Under the current law, nearly everyone could possibly qualify to receive Long-Term Care benefits through Medicaid. That said, not everyone should attempt to qualify for Medicaid as it may not be appropriate. The best test to initially determine whether to potentially consider Long-Term Care Planning is to apply the following formula:
ESTIMATED COST OF CARE PER MONTH, PLUS THE COST OF ALL OTHER FINANCIAL OBLIGATIONS, LESS INCOME FROM ALL SOURCES PER MONTH, EQUALS THE NET MONTHLY CASH FLOW (POSITIVE OR NEGATIVE). IF IT IS NEGATIVE, TAKE THIS FIGURE AND MULTIPLY IT BY THE LIFE EXPECTANCY BASED ON A MORTALITY TABLE, THEN DIVIDE THIS FIGURE BY THE TOTAL VALUE OF ALL ASSETS.
If the figure is 20% or more of the total assets, you may want to consider Long-Term Care Planning.
Income: There is no amount of income that disqualifies you from being eligible to receive Medicaid benefits. If the applicant’s gross monthly income exceeds the amount of the current income cap for the State of Florida ($2,163.00 gross per month as of October 2014), then a Qualified Income Only Trust must be established and funded to obtain Medicaid eligibility. If an individual is receiving Medicaid benefits from Medicaid’s Home and Community Based Care Program, there is no patient responsibility owed (you keep all of your income). (If you are in an Assisted Living Facility or a Nursing Home on Medicaid, you basically loose all of your income, except a small amount) to pay the facility. There is a whole in the Medicaid Program for the Assisted Living Program. Even while on Medicaid in an Assisted Living Facility there is still minimum amount that must be paid to the facility as a patient responsibility regardless of your income. This is not the case for Medicaid’s Nursing Home Program. If you are in a nursing home on Medicaid, you get to keep $109 per month as a Personal Needs Allowance and enough to pay any health insurance premium. There is no minimum amount you must pay the nursing home as patient responsibility if you are on Medicaid.
Medicaid Planning - General Facts:
• The Nursing Home Program is an entitlement program, so it is always funded. However, the Home Program and the Assisted Living Program are not entitlement programs.
• There is currently a waiting list for the two (2) lower Long-Term Care Medicaid Programs. There is a statewide waiting list of over 25,000 people
• We do not know when additional funding will be provided by the Florida Legislature to the Home and Assisted Living Facility Programs.
• The waiting list for the Home and Assisted Living Programs are triaged based on need.
• There are two (2) priority scores provided given at the time of an interview for Medicaid’s waiting list: a medical score; and a gaps in coverage for the activities of daily living score.
• The sole manner in which to avoid Medicaid’s waiting list for the Home and Assisted Living Program is to be in a nursing home for at least 60 days on Medicaid (not Medicare), and then participate in Medicaid’s “Transition Down” Program.
• Medicaid just increased the Personal Needs Allowance from $35 a month for the nursing home Program to $105 a month.
• Patient accounts at facilities count as part of an individual’s $2,000 asset limit for Medicaid’s Long-Term Care Programs.
• Exempt Assets consist of a Homestead home for a single person up to $543,000 equity, for a couple homestead equity is unlimited; pre-paid irrevocable burial; any one vehicle is exempt as well as vehicles over seven (7) years old if not collector's car, etc; a $2,500 burial fund in addition to the pre-paid burial; term life insurance; life insurance with an aggregate face value of $2,500 per person; and $2,000 of countable assets for the institutionalized person and $117,240 of additional assets for their spouse (as of 10/2014).
• There is no patient responsibility amount when receiving Long-Term Care Medicaid benefits from the Home Program.
• The VA Aid and Attendance Program does not cover nursing home care; the benefit drops down to $90 if you are in a nursing home.
• Medicaid and the VA Aid and Attendance Programs have completely different sets of rules from each other.
• An individual can receive both Medicaid benefits and VA Aid and Attendance benefits while they are at their home or in an Assisted Living Facility.
• The VA is currently 11-13 months behind in approving applications, but the applications pay benefits retroactively and there are private companies that commence benefits immediately and then collect from the VA when it is eventually paid out.
• Medicaid switched to a Managed Care Delivery System in August 2013.
• Medicaid revamped its Long-Term Care Programs in August 2013 so that all three (3) Long-Term Care Programs are out-sourced by the State to private providers. Brevard County’s District (District 7) has four (4) Providers that administer Medicaid’s Long-Term Care Programs in our area.
• The Community Spouse’s (healthy spouse) income is unlimited by Medicaid.
• There is unlimited spending by the person applying for Medicaid for their bills or repairs/improvements, etc. to their property.
• Medicaid has a five (5) year look-back period for uncompensated transfers (gifts).
• The VA Aid and Attendance Program does not have any look-back period currently.
• All VA applications are processed initially in Philadelphia.
• All Long-Term Care Medicaid applications are processed locally.
• If a Medicaid applicant has gross monthly income above Medicaid’s income cap (currently $2,163), they will need a Qualified Income Only Trust which can be entered into by a spouse, or an Agent under a Durable Power of Attorney which specifically states the right of the Agent to “create and fund a trust”.
General Steps to Apply for Medicaid Planning:
• Gather the documents required for Medicaid
• Copy, organize and audit the file to determine what is missing.
• Make sure the countable assets and income are under Medicaid’s caps.
• Determine if a Qualified Income Only Trust is needed due to excess gross monthly income.
• If there is a spouse, determine if they are entitled to any Medicaid Diversions (a means to increase the healthy spouse's income using the Medicaid applicant's income).
• File Medicaid application.
• Supply the Medicaid Office with documentation.
• Notify the nursing home we are applying for Medicaid.
• Make sure the doctor fills out the 3008 level of care form.
• Apply to the VA, as Medicaid is a benefit of last resort.
• Supply all documentation to the Medicaid Office necessary to complete the application.
• Wait for Medicaid approval.
• Choose a Medicaid provider.
• If Transitioning down from a nursing home to an Assisted Living facility:
• After at least 60 days on Medicaid, the applicant can participate in Medicaid’s Transition Down Program and avoid the 25,000 person waiting list in Florida for Medicaid’s Home or Assisted Living Program.
• Do a CARES Unit referral so that they can measure the applicant's medical needs to see if she can safely go to a lower level of care.
• Re-apply for Medicaid benefits.
• Go back home or to location an appropriate Assisted Living Facility.
• Meet with Provider, develop a Plan of Care and a care manager is assigned.
• Deal with lump sum payment from VA: part is income and part is assets; need break-down of same from the VA as may be applicable.
• Comply with annual re-certification of benefits requirements of Medicaid and VA.
Frequently Asked Questions about Long Term Care Planning
Frequently asked questions about Long-Term Care:
1. How can I pay for my Long-Term Care Needs?
Long-Term care can be paid privately, through long-term care insurance, utilizing a Medicaid Program, or Veteran’s Administration’s Aid and Attendance Program.
2. How much does Long-Term Care cost?
Nursing homes generally cost approximately $7,000 per month. Assisted Living typically costs between $2,000 and $5,500 per month based on the services provided. Home health care provided by a certified nursing assistant typically costs $12-$22 per hour.
3. When is a good time to start Long-Term Care Planning?
Becoming educated about your Long-Term Care Planning options sooner rather than later is always best. The sooner you are educated and possibly commence a Long-Term Care Plan the more options you will have. The federal and state laws are in a constant state of flux. Having a knowledgeable attorney in your corner is the basic building block to making sound and informed decisions when formulating a Long-Term Care Plan
4. Should I get a Long-Term Care?
Your best defense against the costs of long-term care is being educated and knowing your options. Having Long-Term Care insurance provides an additional line of defense in obtaining the care needed, while protecting assets. However, there is no blanket answer as to who should obtain long-term care insurance. There are numerous factors, such as your health, the costs of the basic insurance, the various options available on the insurance, such as a cost of living rider, among other, which are all relevant in making the decision to obtain a long-term care insurance policy. Knowing your options is free.
5. What Long-Term Care Programs are available through Medicaid?
• The Home and Community Based Care Program (10-15 hours of help at home per week).
• The Assisted Living Diversion Program (approximately 50 facilities participate in Brevard County). The majority of the nursing homes in Brevard County participate in this Program.
6. Is there an income limit to be eligible to receive Medicaid benefits?
There is a gross monthly income cap in Florida, but exceeding the gross monthly income does not make an individual ineligible to receive Medicaid benefits. If the gross monthly income cap is exceeded by the Medicaid applicant, a special Medicaid Trust is needed.
7. What assets can I have and still be eligible to receive Medicaid benefits?
• If you are single: a homestead home with an equity interest in the amount not to exceed $525,000; a vehicle of any value; any vehicles seven (7) years or older (no collector’s items or motor homes); pre-paid irrevocable burial arrangements; a burial fund of up to $2,500; term life insurance; life insurance with an aggregate face value of $2,500 or less; and $2,000 of other assets (generally tangible personal property is not counted).
• If you are married: you can have a homestead home of any value and the healthy spouse can have $113,640 of assets in addition to the assets listed above.
8. What is the current "look-back" period for gifting of assets prior to applying for Medicaid benefits?
The present federal look-back period is five (5) years for gifts. It has been three (3) years in the past. Florida adopted the federal five (5) year look-back period for gifting in January 2010.
9. What do I do if I want to apply for Medicaid benefits now, but have made gifts within the past five (5) years?
Florida Medicaid Rules permit an individual to “undue” previous gifting and erase the penalty period associated with the gift, thereby making the individual potentially eligible to receive Medicaid benefits.
10. Does giving an amount within the federal annual gift tax exclusion, such as $13,000 per year per individual help with Medicaid Planning?
No. Although gifting within the federal annual gift tax exclusion is legal, Medicaid still assesses a penalty of ineligibility to be able to receive Medicaid benefits for the gift being made.
11. If I have not previously taken any action to protect my assets from the costs of long-term care, is it too late if I need care immediately?
No. It is never too late to have a Medicaid Plan. Many of the planning techniques can be implemented at the time of the need (although it is preferable to plan in advance to optimize your planning technique choices).
12. If I have long-term care insurance, am I still eligible to receive Medicaid benefits or VA Aid and Attendance benefits?
Yes. Benefits paid from a Long-Term Care insurance policy are considered income for both Medicaid and VA Programs.
13. Can I “save” my benefits under my Long-Term Care insurance policy for later, and apply for Medicaid now?
No. Medicaid is a benefit of last resort, so you must apply for any and all benefits you may be entitled to at the time you are applying for Medicaid benefits.
14. What if I have more assets then the exempt assets listed above? Can I still be eligible for Medicaid?
Nearly anyone can legally become eligible to receive Medicaid benefits if they receive competent and up to date legal advice. The biggest mistake is failing to meet with an attorney and becoming educated about your options. Do not assume that you cannot become eligible for Medicaid regardless of your current asset situation.
15. My spouse and I have a Pre-Nuptial Agreement. Do my assets count towards my spouse’s Medicaid eligibility?
Medicaid does not recognize Pre-Nuptial Agreements. Assets of both parties count toward the one spouse’s Medicaid eligibility. However, there are Medicaid Planning techniques to eliminate this issue.
16. How long does it take to get Medicaid benefits?
Generally, Medicaid nursing home benefits are available immediately. However, there is a waiting list for the Home and Community Based Care Program and the Assisted Living Program.
17. If my spouse’s income all goes to a nursing home for his/her care, I will not have enough income to live on.
What can I do?
The Medicaid Programs provide for a diversion of the institutional spouse’s income to the community spouse based on each individual’s gross monthly income and housing costs.
18. Will I be forced to divorce my spouse to get him/her the care they need without losing all of my assets?
Divorce is almost never the answer. There are various legal planning techniques which can be implemented without the necessity of divorce.
19. Is my homestead home safe from the costs of long-term care?
Yes. Both Florida Medicaid Law and VA Aid and Attendance permit an individual to own a homestead home and still become eligible to receive benefits. The Florida Constitution protects homestead homes post-death when the decedent has heirs at law.
20. Do the assets in my Revocable Living Trust count towards Medicaid and VA Aid and Attendance eligibility?
Yes. However, Revocable Living Trusts are helpful because, if funded properly, they avoid probate after death and can control the timing and amount of distributions to beneficiaries.
21. What is the VA Aid and Attendance Program and what are the requirements to be potentially eligible?
If a person served in the United Stated military during a war time declared by the US Congress and the Veteran served at least ninety (90) days of continuous service, one day of which is during a declared wartime, with no service connected injury, then the veteran may be eligible to receive a monthly payment for use to pay for long-term care.
22. What is the maximum amount a veteran can receive from the VA for Aid and Attendance?
Over $2,000 a month for the veteran and over $1,300 a month for the surviving spouse of a veteran.
23. What happens if you are the surviving spouse of a veteran and re-marry a non-veteran?
The VA Aid and Attendance benefit is lost. However, if your last spouse was also a veteran, you would become eligible through their military service.
24. Where can VA Aid and Attendance benefits be utilized?
Generally VA Aid and Attendance benefits are only receivable at home or in an assisted living facility, and they drop down to $90 a month in a nursing home.
25. How do you apply for VA Aid and Attendance and how long does it take to receive any benefits?
VA Aid and Attendance benefits can be applied for through your local VA Office. All applications are processed in Philadelphia, PA, and take at least seven (7) months to process. VA benefits are paid retroactive to the date of application after they are approved.
26. Is there a look-back period for gifting when applying for VA Aid and Attendance?
Presently, as of December 2012, there is no look-back period for gifting when applying for the VA Aid and Attendance Program. However, there is federal legislation pending which would make a three (3) year look-back period for gifting. However, Medicaid has a five (5) year look-back period and many times an individual may need to qualify for Medicaid benefits also.
27. Can I qualify for both Medicaid and VA Aid and Attendance Programs?
Under the present law, an individual can receive benefits under both the Medicaid and VA Programs.
28. Is there an income limit to receive VA Aid and Attendance benefits?
No. VA Aid and Attendance benefits are based on UME’s (uncovered medical expenses).
29. Is there an asset limit to be able to receive VA Aid and Attendance benefits?
Yes, there are asset limits to VA Aid and Attendance. The asset limit is based on an internal sliding scale based on the age(s) of the individuals.
30. Are there exempt assets when qualifying for the VA’s Aid and Attendance Program?
Yes. Your homestead home, your vehicle, your burial arrangements, and term life insurance are among the exempt assets.
31. If you are married, whose assets count toward eligibility for the VA Aid and Attendance Program?
Both the husband and wife’s assets are counted when determining eligibility for the veteran for the Program.
32. If I am married, do I need a Durable Power of Attorney for my spouse?
Regardless of how long you have been married, a spouse cannot sign on behalf of the other spouse by virtue of being married. Often people confuse this issue because they have access to most assets due to the fact that they are held in the spouses’ joint name. However, in dealing with some assets, such as retirement accounts and real property, a spouse needs the other spouse’s Power of Attorney.
33. I have an old Power of Attorney. Do I need to do a new one ever?
Third parties, such as financial institutions, do not take their obligations with regard to honoring a Power of Attorney lightly. Generally, all Powers of Attorney are screened by the financial institution’s Legal Department. If there is even the slightest reason, a Power of Attorney may be rejected. Therefore, keeping your Power of Attorney up to date is important. The last change to the Power of Attorney Statute in Florida was in November 2011. If you are older or have health issues and you are naming the same Agent in the Power of Attorney, you may want to keep the old document. Also, you may want to obtain a note from your physician indicating you are competent and retain same in your and your attorney’s records.
34. When does a Power of Attorney become effective?
In general, at the time a Power of Attorney is signed, it becomes effective. There are Powers of Attorney which are “springing” and go into effect upon an illness, but these are relatively rare and present another obstacle that an Agent attempting to use the Power of Attorney must prove to a third party to have their authority recognized.
35. Can I have more than one person act as my Agent under a Power of Attorney?
Yes, multiple Agents can be listed in a Power of Attorney acting together, acting individually or acting in succession.
36. Does my power as an Agent under a Power of Attorney exceed or “trump” that of the person who created the Power of Attorney?
No. An Agent under a Power of Attorney does not have the power to trump the authority of the creator of the Power of Attorney. Even if an individual has created a Power of Attorney, a guardianship can be necessary if the individual will not take actions in their own best interest (such as ceasing to drive when the doctor indicates they cannot drive). The individual who created the Power of Attorney can also revoke the Power of Attorney at any time.
37. When does a Power of Attorney cease to be effective?
At the time of the death of the individual, if the individual revokes the Power of Attorney, or if a guardianship action is commenced for that individual.
38. What is the effect of a doctor stating an individual has dementia or is incompetent in that individual’s medical records?
While this may be evidence of incompetency, it does not make an individual incompetent. Only a Judge can declare an individual legally incompetent through a guardianship action.
39. Why do I need a Health Care Surrogate?
If you are unable to make your own medical decisions and you do not have a Health Care Surrogate nominated, the Florida Statutes provide a “proxy” which contains the default order of who would make your medical decisions for you.
40. How do I get started with the Long-Term Care Planning process?
Although there are many sources to obtain information such as books, friends, relatives, the internet, financial professionals and other people in the industry, unfortunately, much of the information available is either inaccurate, outdated, too technical, or too watered down. The Medicaid Law is state specific. The best source of information is a knowledgeable attorney who has years of experience practicing in the field of Long-Term Care Planning and who keeps up with the ever-changing federal and state laws which govern your options when implementing a Long-Term Care Plan.
ABOUT THE AUTHOR: David H. Jacoby is a Brevard County attorney practicing in Melbourne, Florida in the area of Long-Term Care Planning for nearly 25 years. He is a member of the Elder Law Section of the Florida Bar, the Academy of Elder Law Attorney’s, and the National Academy of Elder Law Attorney’s. He has been utilized as an expert witness in Court proceeding in the area of Long-Term Care Planning, a Lecturer for Florida Bar Programs, a consistent participant in educational programs to the Long-Term Care industry and the public. In addition to having a Juris Doctorate from Stetson University College of Law, he has a Bachelor’s degree in Finance from Florida State University, and both a Realtor and Insurance license. Mr. Jacoby is married to his wife, Erin, and has 4 children and 6 grandchildren.
Estate Planning (Wills, Trusts, Power Of Attorney, Healthcare Surrogate)
Estate Planning Summary
The following information is provided in an effort to familiarize you with general definitions and descriptions of various estate planning documents which are commonly used in Florida. This is provided for general information purposes only. An attorney should be consulted prior to any estate planning documents being drafted or executed.
Intestate Succession: If an individual has no will at the time of their death, they are said to have died ‘intestate’ and his or her property will be distributed in accordance with the provisions of Florida Statutes. This can be a lengthy and expensive process, especially if relatives are hard to locate.
Will: A Will also known as a Last Will and Testament is a document that takes effect after an individual’s death to facilitate the passing of property from the person who has died to their beneficiaries.
Self-Estate Planning: Self-estate planning is the process by which beneficiaries’ names are added to an individual’s assets in order to avoid probate.
Problems With Self-Estate Planning: Problems with self-estate planning must be examined on a case by case analysis, but usually include many of the following:
• LOSS OF CONTROL OF ASSETS
• POTENTIAL ATTACHMENT BY OTHER PARTY’S CREDITORS
• GIFT TAX PROBLEMS
• POTENTIAL LOSS OF HOMESTEAD EXEMPTION
• CANNOT CONTROL TIMING AND AMOUNT OF DISTRIBUTIONS TO BENEFICIARIES
Living Trusts: (Also known as Loving Trusts, Inter Vivos Trusts, Dacey Trusts, A Trusts)
• AVOID THE TIME, MONEY AND EMOTIONAL DRAIN OF PROBATE because, provided the trust is properly funded, there is no probate or ancillary probate.
• NONE OF THE PROBLEMS WHICH EXIST FOR SELF-ESTATE PLANNING EXIST IF THERE IS A TRUST.
• Higher initial attorney’s fees than a will; and
• Assets must be transferred into a trust.
Pour Over Will: These are used in conjunction with Living Trusts.
They have two major functions:
• Distribute tangible property (e.g. household items); and
• Provides a safety net if any assets are not put into the trust by instructing that after those assets are probated that the trust instructions are controlling.
General Durable Power of Attorney: Allows another individual to sign a person's name even if they are incapacitated (however, this document is effective from the date it is signed regardless of whether an individual is incapacitated). In some situations a power of attorney may eliminate the need for a guardianship. Should be redone if it was signed before October 1995 as the laws changed that year concerning Power of Attorneys.
Healthcare Surrogate: Florida Statutes enable another individual to make healthcare decisions for a person if one treating physician and one non-treating physician determine that the individual is unable to make medical decisions for themselves.
Living Will: A document which comes into effect if an individually is terminally ill and allows an individual to refuse extraordinary medical treatment.
Probate: Probate is the process contained in the Florida Statutes by which property passes to beneficiaries either as provided in an individual’s will or as provided by statute if there is no will. There are three types of probate in the State of Florida.
Types of Probate in the State of Florida:
A. Summary Administration: For estates that the entire gross value does not exceed $75,000, less the value of property exempt from the claims of creditors, for example a homestead; OR when a decedent has been dead for more than 2 years.
B. Family Administration: For estates whose gross value is less than $60,000 AND consists of only personal property (real property may exist if creditors claims are barred, for example if it is homestead) AND the beneficiaries of the Will are a spouse or lineal heirs;
C. Formal Administration: Required for estates whose gross value exceeds $75,000 (excluding exempt property), and sometimes necessary in smaller estates.
D. Ancillary Probate: The name for probate proceedings where the decedent was a resident of one state but owned real property in another. There will be a probate in every state where an individual owns real estate. Ancillary probate only applies to real estate.
General Problems With Probate:
A. Expensive: As a general rule most probates run between 3% and 5% for attorney’s fees in addition to court and other costs.
B. Time Consuming: Formal administration probates generally last between 6 months and 2 years. The average formal administration probate lasts between 11 and 13 months.
C. Emotional Strain on Family: Until the probate is concluded, your family members will be involved in the probate process which is emotionally draining.
D. Other Factors: There are numerous other factors that arise in the context of a particular situation in your family which may affect the probate process.
General Information Regarding Probate:
A. ALL ESTATES ARE PROBATED UNLESS ALL OF A DECEDENT’S ASSETS ARE IN A TRUST OR THERE IS A JOINT OWNER OF THE PROPERTY INVOLVED: Therefore, in most married people’s situation, if all property is jointly held there will be no probate on the first spouse’s death. This is not due to the first spouse’s will, but because the surviving spouse is a joint owner of all the property involved. On the surviving spouse’s death, there will be a probate if there is no new joint owner on the assets or if no Living Trust is in place.
B. Self-Proof Wills: Florida statues provide for self-proof of wills that enables a will to be admitted to probate without locating the witnesses to the will, who may be unavailable at the time an individual dies. Out-of-state wills may be valid in Florida if there are 2 witnesses and a Notary, however, most out-of-state wills do not conform to Florida’s requirements for self-proving wills.
C. Separate Writing: Florida Statutes allow an individual to make a list of tangible property (eg. household items) to be given to a specific individual. You cannot give away money or property used in a business through a separate writing. No witnesses or Notary is needed for a separate writing; the document must be signed and dated and be referenced in the will.
Most people seem to have a few false impressions regarding issues
concerning an individual’s competency:
• Doctor’s written opinions that an individual is not competent does not make an individual legally incompetent. The doctor’s opinion is just evidence of incompetency. Only a Circuit Court Judge can declare an individual to be legally incompetent.
• General Durable Powers of attorney are generally effective at the time they are executed (unless it specifically states that it only springs into effect upon a triggering event, such as incapacity).
• Being an Agent under a Durable Power of attorney does not “trump” the Principal’s (the person who made the Power of Attorney) ability to act for themselves.
There are a few types of guardianships:
• Voluntary: The treating physician writes an opinion the person is competent. The individual just does not want to handle their own affairs anymore. The individual can terminate a Voluntary Guardianship at any time.
• A Guardian Advocacy: If an individual is born with certain disabilities, this procedure avoids the necessity of determining the individual to be incompetent, and the costs associated with this part of the procedure.
• Involuntary Guardianship: There are two (2) parts: Incapacity and who is going to be the guardian. Also, the guardianship can be limited to certain rights or can be a plenary guardianship (all rights). A guardianship is generally established for the person and the property, however, it can be for either the person or the property.
1. Petition for Appointment of Guardian
2. Oath of Guardian
3. Application of Guardian
4. Order Appointing Attorney and Elisor for Alleged Incapacitated, Attorney visits ward.
5. Order Appointing Examining Committee. Committee visits ward, reviews medical records and prepares a Report.
6. Review and file Examining Committee Report with the Court.
7. Prepare Notice of Hearing
8. Prepare Letters of Guardianship
9. Prepare Order Appointing Guardian
10. Prepare Order Determining Incapacity
11. Prepare Letters of Guardianship
12. Petition to Waive Background check
13. Order Waiving Background check
14. Attend Hearing
15. Appointing Guardian attend an 8 hour guardianship course
16. File Initial Inventory
17. File Initial Plan
18. Determine your ward's income and assets and establish a budget.
19. File annual Accountings and Annual Plan
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