Joint Ownership of Property – Bank Account

Not all of your property will necessarily pass under your Will. Property may go automatically to another person if you have joint ownership. Who receives joint property on your death may depend entirely on the terms of a joint bank account, deed, or other contract. It is important to understand the consequences of joint ownership of property.

joint bank acct

Joint Bank Account. Married couples often have a joint bank account. It’s also common for a person, especially someone older, to place funds in a joint account with a child or other trusted relative. Many times, this is done for convenience when the elderly person has difficulty going to the bank or anticipates an illness or incapacity. The elderly person usually has no intention of giving the child or relative any rights to take and keep the money now. Sometimes, the joint account is created to make a gift of what is left in the account at the older person’s death.

Indiana law makes certain presumptions about joint ownership. The three most important presumptions are the following: (1) Ownership of a joint account is according to the amount each has contributed to the account. (2) Any party to a joint account may withdraw all or part of the funds without the consent of the other. (3) When one of the joint account owners die, any money remaining in the account belongs to the survivor named in the account, even if the Will says otherwise. Another potential problem with joint accounts is it makes the account vulnerable to all account owner’s creditors.  For instance, if you add your child as a joint owner to your bank account and he or she gets into a car accident and gets sued, the child’s creditor can come after the money in the joint bank account.  For these reasons, you should open a joint account only if you trust the other person you name as joint owner and only after considering other options such as creating a Power of Attorney.

Also, if after your death, your bills and expenses cannot be satisfied by other assets in your estate, your joint bank accounts are not available to cover allowable expenses and taxes. When you need assistance with financial affairs and property management, a Living Trust and Power of Attorney may be better alternatives than joint bank accounts. The Power of Attorney ceases to operate at death, but a Living Trust continues to function by a Trustee. Call our office for advice on these matters before naming a child or other loved one as a joint owner.

Source: Indiana Laws of Aging by Indiana State Bar Association

Joint Ownership of Property – Real Estate

Not all of your property will necessarily pass under your Will when you die. Property may go automatically to another person if you have joint ownership. Who receives joint property on your death may depend entirely on the terms of a joint bank account, deed, or other contract. It is important to understand the consequences of joint ownership of property.

Deed

Joint Real Estate. If you hold title to property in your name alone, title will pass according to the terms of your Will. If you have no Will, then it will pass according to the laws of intestacy. It is common for a husband and wife to hold title to their home or other real estate together. This is called ownership as “tenants by the entireties.” When one spouse dies, the tenants in common property passes automatically to the other spouse, no matter what the Will says about the property. A survivorship affidavit will be filed at the county auditor’s office and recorder’s office to update the ownership records when the first spouse dies.

It’s also possible to hold property jointly with someone not your spouse. Joint ownership with someone else can be either with survivorship rights or without. If there is a right of survivorship, then your ownership will pass to the surviving owner. If there are no survivorship rights, then the owners are “tenants in common.” A tenant in common’s interest does not pass to the other co-owner; instead, it passes under your Will, or according to intestacy laws if there is no Will.

If you want to evaluate alternatives for ownership of real estate, you should consult one of our attorneys. There may be important consequences in a transfer or change of ownership.

Source: Indiana Laws of Aging by Indiana State Bar Association

Pre-Admission Screening Program

pre admission screening

Every person entering a nursing home in Indiana must go through a pre-admission screening program. The program applies to all applicants for a nursing home, not just persons eligible for Medicaid. Unless you have a mental illness or a developmental disability diagnosis, you may choose not to participate, but then you will be ineligible for Medicaid coverage of the nursing home costs for one year after the date you enter the nursing home.

Under the pre-admission screening program, a team of persons (including your doctor) will assess your medical, social, and psychological needs to decide whether those needs can be met by services available in the community. If such services can meet your needs without a nursing home and at less than the cost of nursing home care, then your placement in a nursing home will be disapproved. Disapproval does not mean that you may not enter the nursing home, but it does mean that you will be ineligible for Medicaid coverage of the nursing home’s costs for one year. If community services are not available to meet your needs, or if they cost more than the cost of nursing home care, then your admission to a nursing home will be approved.

Source: Indiana Laws of Aging by Indiana State Bar Association

Guardianship Registry Forms

gu registry form

The State of Indiana has a new requirement for guardianship proceedings: Guardianship Registry Forms. When a person files a petition for a guardianship, he/she must also file this Guardianship Registry Form with the Court.  The purpose of the form is to aid law enforcement and health care facilities when they are assisting an individual under guardianship.

These forms request a variety of information pertaining to the petitioner, the guardian, and the person who is in need of a guardianship (“protected person”). The first section asks for more information about the potential guardian. It asks for things like: first and last name, date of birth, race, gender, address, phone number, email, attorney name, and relationship to protected person. The next section requests information about the protected person: first and last name, gender, race, eye color, hair color, height, weight, scars, marks, tattoos, address, phone number, email, attorney name, guardian ad litem name, and language. The third section requests information about the guardian. Often times, the guardian and the petitioner are the same person so the information requested is the same for both. There is an option to check if the guardian and petitioner are the same. The Guardianship Registry Form requests additional information about where the individual lives and close relatives of the protected person.

Appealing a Denied Medicaid Application

Denied Medicaid App

If Medicaid denies your application, it must notify you in writing. Also, if you are already receiving benefits and Medicaid plans to reduce or limit your benefits, it must usually give you at least a ten day notice. The notice must contain the reasons for the change. If you disagree with a decision or action by Medicaid, you have the right to appeal. The following are examples of appealable issues:

  • Denial of eligibility
  • Termination of eligibility
  • Violation of your civil rights
  • Lack of timeliness of the Medicaid decision (e.g. award of eligibility, limit on payments for particular services, or issues concerning the amount of income Medicaid says you must contribute toward medical care)

To appeal, you must notify the county or state office in writing within thirty three days of the effective date of the disputed action. If a timely appeal is filed, the law will give you the right to a fair hearing. If you request a hearing before the effective date of Medicaid’s proposed action, benefits must continue until a decision is reached after the hearing. Before the hearing, you have the right to see any information pertaining to the case. One of our attorneys can be very helpful at this stage.

The hearing should be held at a location convenient for you. If you are homebound or in a nursing home and cannot get to a hearing, the hearing can be held at your location. Alternatively, you may request to be present by telephone.  The hearing will be like an informal trial. An administrative law judge hears the case. You have the right to testify, to have others testify, and to cross-examine Medicaid’s witnesses. You should bring to the hearing all papers that relate to the case and be ready to explain the reason for appealing. Medicaid must notify you in writing of its decision within ninety days of the day the hearing was requested. The notice should tell you how to appeal further if unsatisfied with the decision. You must appeal within ten days of receiving the decision from the hearing. If the decision is still negative at that level, you may seek judicial review in Circuit or Superior Court. At that stage, you will need a lawyer.

Source: Indiana Laws of Aging by Indiana State Bar Association

Case Study: Medicaid Eligibility – Transfer Penalty

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For a Medicaid application, Family and Social Services Administration (FSSA) will look back five years from the Medicaid application date to determine whether any uncompensated or undercompensated “transfer of assets” were made. A transfer of assets includes cash transferred, property transferred, and any total or partial divestiture of control or access of an asset. If a transfer of assets occurred within five years and the transfer was for less than fair market value, a transfer penalty is imposed. Gifts in excess of $1,200 each year made within five years prior to applying for Medicaid will create a transfer penalty. A transfer penalty means that an individual will not receive Medicaid coverage for the penalty period. Planning ahead for Medicaid can help reduce these penalties.

Transferring assets into an Irrevocable Trust is considered a “transfer of the asset” once the asset is titled in the Trust. If the Medicaid recipient applies for Medicaid more than five years after creating certain Irrevocable Trusts and after titling the assets in the Irrevocable Trust, then there is no transfer penalty because the transfer occurred more than five years ago. After five years, the assets titled in the Irrevocable Trust are exempt so there is no transfer penalty imposed. The following case below shows an example where there was no transfer penalty imposed.

In 2000, Ada and Roy Brown transferred their home to a trust and, shortly thereafter, made the trust irrevocable. Ten years later, and two years after Ada moved to a nursing home, the trust sold the home for $75,000. In 2012, Ada applied for Medicaid and submitted documentation that the house sold for $75,000. Indiana Family and Social Services Administration (FSSA) found Ada eligible for Medicaid benefits but imposed a transfer penalty based on the sale of the home. FSSA found the home valued at $91,900. The home value was based on the assessed value for tax purposes. FSSA calculated Ada’s penalty based on the difference between the home value and the sale price. Ada appealed the imposition of the penalty. The trial court affirmed the penalty, but the Court of Appeals reversed the decision. The Court found that the proceeds from the sale of the home were properly placed back in the trust and that the fair market value of the home was $75,000. Therefore, the Court reversed the imposition of the transfer penalty.

There was no transfer penalty imposed in the above case because Ada and Roy Brown created the Irrevocable Trust and funded it in 2000, by titling the house in the Trust. Titling the house in the Trust was a “transfer of the asset.” After five years, the assets in the Trust are exempt assets so no transfer penalty was imposed. Even though the house sold in 2012, the funds from the sale of the house remained in the Irrevocable Trust so they remained exempt because the five years had passed. Check out our website for the Irrevocable Trust FAQ sheet for more information.

Source: Indiana Laws of Aging by Indiana State Bar Association

Medicare Supplemental Insurance

Medicare

Many older persons purchase private health insurance as protection against illness or injury. Even if you have Medicare, you may want to supplement your Medicare coverage with private health insurance. There are many medical expenses not covered by that program. Medicare was not designed to meet all the medical needs of older persons. If you buy health insurance to supplement Medicare, you should read the policy carefully. You want coverage that fills the gaps in Medicare that are important to you but that does not duplicate Medicare’s coverage. Many insurance companies sell insurance (called Medicare Supplements) specifically designed to fill in the gaps in Medicare. These gaps include:

  • Prescription drugs not taken in a hospital
  • Long term care in a nursing home
  • Services that are considered “extras” in a hospital of nursing home
  • Full-time nursing care at home
  • The deductibles and copayments that you must pay under Medicare

Some Medicare Supplement policies cover nursing home expenses only after Medicare benefits are exhausted. Yet Medicare law makes it difficult to “use up” all your Medicare coverage. As a result, you may be left with a useless insurance policy that never takes effect. It is important to speak with a licensed health insurance agent when making choices about these policies.

Source: Indiana Laws of Aging by Indiana State Bar Association