When you make an estate plan, you take into consideration the needs of all the family members who you want to give a benefit for. One child may have disabilities and may or may not presently require government benefits. You may think that you don’t have much assets to leave behind for their lifelong support. Are you worried that they will be able to work to a degree, but not be able to earn a good enough living, and won’t be able to live independently in the community?
Life insurance can really help in this situation. You might leave the tax-deferred accounts (IRAs) to the other kids and make your life insurance payable to a trust for the needier child. It’s worthwhile to sit down with a life insurance specialist to review your existing policies and discuss the possibility of exchanging older policies for better ones. This is sometimes referred to as “conversion.” For instance, you may have a term policy with a “conversion privilege.” If your policy has a sizeable built-up cash value, sometimes you can exchange one policy for another (a section 1035 exchange under the Internal Revenue Code) and use the cash to pay the premiums for a much larger policy. Often the cash that has built up is like a hidden asset — it’s there, but you don’t think about it the way you think of your other liquid assets.
Estate planning is the process of achieving peace of mind. Setting up a trust for the one who cannot manage on their own, rather than leaving them at the mercy of other family members or leaving them solely dependent on government programs, may be just what you need to feel good about your plan, and life insurance in some cases can be the right tool to use.
Call us for advice on estate planning, elder care planning and special needs trusts… 732-382-6070
Kathy Greenlee, Director of the federal Administration for Community Living– http://www.acl.gov/Index.aspx — gave a marvelous speech last Wednesday at the 3rd World Congress on Adult Guardianship in Arlington VA. She said that “The loss of memory is not the same as the loss of self,” that people need to be recognized for their unique selves and everyone craves the opportunity to actively engage with their world despite their disabilities. She posed this challenge: As Guardians, how do you support the “self” of the person with disabilities who you are responsible for?
Greenlee suggests that we shift from a deficit-based outlook to an asset-based outlook. She’s not talking about money. She’s talking about a person’s personal assets — their capabilities, strengths and interests. What does the person have the ability to do, or the ability to understand? How can a Guardian or a supportive decision-making coach or power of attorney assist them to do something, or assist them to make a decision?
Greenlee challenges each of us to identify and provide the supports that a person needs to maintain their sense of self and to thrive within the community. We all benefit and our communal life is enriched when we reach out and accept people for what they can do, rather than seeing only what they can’t do.
Call us to discuss strategies for supported decision-making when coping with aging or disability … 732-382-6070
Generally speaking, if a Medicaid applicant made gifts of assets during the 5-year look-back preceding her Medicaid application, eligibility will be denied for a period of time called a “transfer penalty.” There is a special exception to this rule for transfers that were made to disabled children.
In this case , M.C. v. Union County Div. Soc. Serv. And DMAHS, HMA- 8967-2013, the local Medicaid agency imposed a transfer penalty for an outright transfer of assets to a disabled child, despite copious federal and state law to the contrary. On appeal (“fair hearing”), the Administrative Law Judge recommended that the penalty be reversed, and on March 18, 2014, the NJ Division of Medical Assistance and Health Services (DMAHS) issued its Final Agency Decision adopting the ALJ decision, eliminating the penalty.