Category Archives: Estate Planning

So What About This VA Benefit?

Our office is seeing an increased number of clients interested in applying for the VA Aid & Attendance Benefit.  This is a great benefit offered to veterans and their families that can help pay for long term care.  There does, however, seem to be a lot of misinformation floating around about what is available and who is eligible.  I hope I can give you a (preliminary) answer to some of those questions.

Who is eligible for the VA Benefit?

Veterans who served at least ninety (90) days active duty AND one of those days was during a defined period of war.  Most of our clients served in World War II, Korea or Vietnam.  Surviving spouses of veterans with qualifying service are also eligible.  Divorced spouses are generally not eligible, nor are veterans who served in the reserves.

Is there an income limit?

Yes.  For a single veteran, the income limit is $1,704 per month; for a veteran and one dependent, the limit is $2,020 per month; and for a surviving spouse, the limit is $1,094 per month.  This is also the maximum benefit payable.  However, the VA allows you to reduce your income by the amount you pay for monthly, unreimbursed, recurring medical expenses.  For example, if you are a single veteran with $2,000 worth of income, and you are paying $3,000 a month to live in assisted living, your countable income is $0, and if you meet all other requirements, you could be eligible for $1,704 per month.

Is there an asset limit?

Yes, but there is no specific number.  The VA looks at a number of factors, and determines if you have enough money to pay for your level of care for the rest of your life.  If so, you are not eligible.  In short, the VA uses the veteran’s age to determine projected lifetime income and adds to that the veteran’s countable resources, and then balances that figure against the lifetime projected medical expenses.  If the medical expenses exceed the income and asset figure, the veteran is qualified.

This is intended to be a short example of the VA Aid & Attendance benefit.  For more details, please contact our office for an appointment at 817-263-5190.  We look forward to helping our veterans!

Financial Exploitation

In this plugged-in world we live in, we are constantly reminded of the perils of identity theft and financial exploitation. But what we often forget is that you don’t have to be on-line and plugged in to become a victim. Many older adults are at risk to be victims of financial exploitation, sometimes because they have dementia, and sometimes because they just can’t say no to seemingly harmless, helpful people.

Baylor College of Medicine has developed a Financial Concerns Checklist, and while it was probably meant to be used by doctors and other professionals, I think it can be helpful for friends and family to identify possible problems. Here are some of the statements from the checklist:

  • I have trouble paying bills because the bills are confusing to me.
  • I don’t feel confident making big financial decisions alone.
  • I don’t understand financial decisions that someone else is making for me.
  • I give loans or gifts more than I can afford.
  • My children or others are pressuring me to give them money.
  • People are calling me or mailing me asking for money, lotteries.
  • Someone is accessing my accounts or money seems to be disappearing.

Here are some other items on the checklist that indicate possible concerns:

  • Social isolation
  • Bereavement
  • Dependence on another to provide care
  • Financially responsible for adult child or spouse
  • Alcohol or drug abuse
  • Depression or mental illness

Unfortunately, there may be no easy way to intervene in a situation where financial exploitation is suspected. If the older adult has dementia and they have previously appointed someone to act as power of attorney, then this is the time for the power of attorney to step in and take control of the finances. In some instances, however, it may be the family or power of attorney who is doing the exploiting. A referral to Adult Protective Services can be made, but it can be really hard to prove that the older person did not willingly give money away, especially to a family member. If the exploitation seems to be coming from non-family members, something like a money management program, like the one provided by Guardianship Services, might be an option. If all else fails, then guardianship may be necessary.

 

Kim

POA Woes

Do you have a power of attorney?  Financial and medical power of attorneys are essential building blocks of a good estate plan.  We often encourage our clients to name a primary and several alternates, and many times clients choose to make them effective immediately rather than wait to become incapacitated for reasons of convenience and ease of acceptance of the document.

But what if your power of attorney is not accepted?  According to the article below, financial institutions are becoming more and more reluctant to accept such documents for fear of being an unwitting party to fraud.  The article alleges that persons named as power of attorney – say, a child for a parent – are increasingly abusing their privileges and helping themselves to mom’s money.  As a solution to this problem, the WSJ suggests ways to plan around using a power of attorney, or steps to take to make it more likely that they will be accepted.  How could these solutions work for Texas law?

– Set your power of attorney to “spring” into action when needed.  In other words, do not make it effective immediately, but specify that the document only becomes effective when a doctor has declared that a person can no longer make financial decisions.  This is easy to do under Texas law; you choose option “B” when you sign your document.  The article correctly identifies a problem that in the heat of a crisis, you will have to stop and find a doctor.  I have found that in most circumstances, this is not difficult.

– Keep it Current.  The article suggests that you come back in and “re-up” your power of attorney every six months.  It also mentions that some insurance companies (and I have run into this problem once) require a power of attorney signed within 60 days.  So what happens when the person does become incapacitated and can no longer re-sign every six months?  Is the bank or insurance company going to refuse to use the most recent copy, just because it is older than six months?  I find the concept of resigning every so often to be completely contrary to the concept of a power of attorney.  The whole idea is to designate someone you trust to take care of your affairs should you become incapacitated.  Very few of us can put a date on when that might happen.  Texas law provides for, and our office uses, a Statutory Durable power of attorney.  “Statutory” means the document is backed up by a statute that spells out when a financial institution, or anyone who relies on a power of attorney, is liable for misconduct on the part of the agent.  They are very rarely liable.  “Durable” means that the power of attorney survives disability.  This article seems to suggest that word has no meaning.

– Utilize a Trust.  This is not a bad suggestion, but perhaps overkill for most persons.  There are protections in place for people whose plans fail – most of those protections come in the form of guardianship, which is less than desirable.  Having a backup plan is not a bad idea if you are willing to spend the money on a backup plan that you may well never need.

This article is very interesting, and I suggest you read the rest of it.  I disagree with a lot – but I realize that the people offering this suggestion quite often only see the situation after it has fallen apart, and do not get to see that when it works, it can work quite well.

Power Grab! The Battle Over Power of Attorney – WSJ.com

-Monica

A Legal Tune-up

It’s Saturday, and I’m waiting at the dealership to have some maintenance done on my car. Keeping your car up and not waiting until something breaks down is a great way to get more mileage out of your vehicle – but did you know the same is true of your legal affairs, too?

Just like parts wear out on your car, your legal documents can wear out, too. That Will you had made after your first child was born may not address your current wishes. Or maybe you haven’t looked at your power of attorney in a while, and your first choice for you agent has died or moved away. Katten & Benson recommends that you pull out your documents every three to five years and take a look. If you do end up relying on your planning, then they will be up-to-date.

Also, we promise not to keep you waiting as long as the car dealership!

-Monica

What do you mean I can’t drive anymore?

Driving – that American rite of passage that signals independence more than anything.  Do you remember the day you got your driver’s license?  I sure do.

However, there comes a time when most of us will have to stop driving.  One of my grandmothers voluntarily gave up her license and her car when she realized she could no longer see well enough to drive, and we were all very proud of her for doing so.  But for most people, giving up driving is a very difficult decision and a trying conversation to have with our older loved ones.

In Texas, family, friends, a physicians or even an anonymous person can report unsafe driving to the Department of Public Safety, and ask to have a person’s license medically revoked.  You can make this suggestion to the Medical Advisory Board at the address on this page.  DPS has previously used a form DL-76, which can be found here, although it is not currently available on the DPS website.

The Medical Advisory Board will contact the individual and investigate whether or not a person is able to drive due to a medical condition.  This can result in the revocation of a license, either permanently or pending a comprehensive exam.  In addition, once a license is revoked, the driver must submit proof of insurance to reinstate his or her license.  It may be difficult, if not impossible, to insure a driver who has had his or her license medically revoked.

Another way to have a driver’s license revoked is through a guardianship proceeding.  Under Texas law, a judicial declaration of incapacity can revoke a driver’s license.  This, however, would be a last resort and should not be taken lightly.

If you need help talking to an older adult about giving up driving, Katten & Benson can assist you.  Please give us a call.

-Monica