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
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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

Long-Term Healthcare Insurance

Long Term care insurance

Many insurance companies are now offering long term care or nursing home policies. Be careful in buying this type of policy. Many such policies do not provide the protection you are most likely to need. For example, many persons are in nursing homes because they need help with daily living, yet many policies are limited to care that is medically necessary. Pay special attention to the definition of medically necessary in the insurance contract. Also, many policies limit coverage to skilled care and would not cover custodial care.

In shopping for long term care policies, find out whether a given policy guarantees renewability. A policy that can be cancelled by the insurance company after a need arises may be worthless. Indiana law now provides that a long term health care insurance policy cannot be cancelled or terminated on the grounds of age or a decline in health. Find out whether the company limits rate increases. Some companies attract you with low rates but then raise rates dramatically later. Find out about the company policy on pre-existing conditions. Be aware of the maximum number of days covered. A policy that pays for 365 days of continuous stay will not be renewable after one year of stay in a nursing home.

The Indiana Medicaid office offers a program that allows you to keep more assets and still receive Medicaid if your long term care insurance policy pays toward the costs of your long term care. For every dollar of benefits paid out under an individual’s long term care policy for Medicaid-eligible long term services, that person’s asset limit increases by the same amount.

A person who purchases a qualified policy meeting the maximum benefit criteria will have no asset limit once the policy has paid out the maximum benefit amount. The Indiana Long Term care Program website lists the insurance companies which offer qualified policies and the insurance agents who have completed the required training course and who are marketing qualified polices. For more information on general insurance issues, contact the Indiana Department of Insurance at 1-800-452-4800.

Source: Indiana Laws of Aging by Indiana State Bar Association

Paying for Nursing Home Care

nursing home

Medicare. Medicare can pay some nursing facility expenses if you are eligible and several requirements are met. You must go to the nursing home soon after a hospital stay of at least 3 days. The home (including the wing or part where you live) must be certified as a Medicare skilled nursing facility, and you must need that level of care. Medicare can pay basic expenses for the first 20 days in the nursing home. From day 21 through day 100, Medicare can pay for expenses after you pay a set amount each day (the amount changes every year). Medicare seldom pays any expenses after 100 days in the nursing home.

Medicaid. Medicaid can help pay for nursing facility services if you meet the categorical and financial eligibility requirements. If you are not within the income limits, you might be eligible for Medicaid anyway if your medical expenses are high enough. The Medicaid laws help protect the income and resources of the “at home” spouse of the nursing home resident. Even if you are not eligible for Medicaid when you enter the nursing home, you may find that your personal resources run out soon, and you need Medicaid. This happens to many people so you may want to consider choosing a nursing home that is certified by Medicaid, in case you later need that program’s help.  Our attorneys can assist getting you or your loved one eligible for Medicaid if it looks like nursing home care is imminent.

Veterans’ Benefits. Some veterans can get help with nursing home expenses from the Veterans Administration. Some children and surviving spouses of veterans can also get this help. To receive these benefits, you must choose a nursing home that is under contract with the Veterans Administration.

Private Health Insurance. Private insurance might pay some nursing home expenses. Because Medicare pays so little, you should consider buying private insurance that covers long term nursing care. Shop carefully. Some Medicare Supplement policies cover nursing home expenses only after Medicare benefits are exhausted. Yet Medicare law makes it difficult to “use up” your Medicare coverage. As a result, you may be left with a useless insurance policy that never takes effect.

Source: Indiana Laws of Aging by Indiana State Bar Association

General Tips on Shopping for Health Insurance

health insurance

Whatever type of health insurance you want, you should shop carefully and compare the policies of different companies using a reputable health insurance agent to guide you through the process. This post has some general tips when shopping for health insurance:

  1. Consider how quickly the insurance company pays a claim and whether the company gives you individual attention and helps you answer questions about your policy.
  2. If you are older, it may be better to keep the insurance you already have in force. This is not always the case so consider the matter carefully.
  3. Check the waiting period to see how soon the policy will cover an illness that began after the effective date of the policy. If you have an existing condition that will later require medical attention, you want insurance that will cover those expenses as soon as possible.
  4. Watch out for policies that pay fixed amounts for certain expenses. They may seem cheap but rapidly become inadequate as medical expenses increase.
  5. Be suspicious of policies that let the insurance company refuse to renew your policy on an individual basis.
  6. Neither the state nor federal government sells a policy to supplement Medicare. Therefore, beware of someone who offers you insurance sponsored by the government.
  7. Purchasing more than one Medicare Supplement policy is usually a poor buy.
  8. Indiana law protects you against aggressive sales tactics. Even if you have already signed an application, you may cancel a health insurance policy within ten days of receiving the policy. Simply mail the policy back to the insurance company’s home office and ask for a refund of any premium you paid.
  9. You should pay premiums by check, not cash. Make the check payable to the insurance company, not the agent.
  10. Keep a copy of your completed application so that you know what you have purchased. Get a receipt for anything you give to the insurance agent. The receipt should have the agent’s name, company address, and company telephone number.
Source: Indiana Laws of Aging by Indiana State Bar Association