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Question And Answers

If my will outlines my final instructions regarding my assets after my death, why does probate need to occur?

Short answer: A will provides the instructions for the probate process, and the probate court gives the authority to the personal representative (executor) to fulfill the terms of the will.

Explanation: A deceased person who has left a will has, in effect, presumably left behind instructions as to how they would like their estate to be administered and who will administer the estate on their behalf (known as the personal representative or executor). However, to put the will into full effect, it must be submitted to the probate court, at which time the court, through specific procedures and after all interested parties are provided notice, must recognize the will to be valid and unrevoked and subsequently admit the will for probating. Upon approval and admission, the personal representative will then be granted the authority by the probate court to continue administration of the will and estate, in effect moving forward in fulfilling the wishes of the deceased person.

Caution: There are multiple forms of probate. Before engaging in estate administration, one should always consult with an experienced probate attorney who focuses on this type of law.

Please note that the above question assumes that Michigan law, rules and regulations apply. Also, note that the above question is intended for educational and informational purposes only and not intended as legal advice. Every situation is vastly different and thus requires one-on-one legal advice from an experienced attorney. Every reader of this article is encouraged to seek out an experienced attorney to advise on their specific circumstances. 

When a person who resides in a nursing home applies for Medicaid assistance in Michigan, what is classified as a gift, and how are prior gifts treated?

Short answer: A gift is treated as an improper transfer of assets that will cause a delay in receiving Medicaid benefits despite meeting all the Medicaid eligibility requirements.

Explanation: First, let’s define a “gift,” or, in Medicaid terms, a “divestment”. A divestment is defined, with a few exceptions, as a transfer of an asset by a Medicaid applicant or spouse (or someone acting on behalf of the applicant or spouse) to someone else, within the last five years, for less than fair market value. A common example may be that the applicant gave his or her car to a family member for nothing in return. You should also know that selling the same car to the family member for less than the fair market value is also considered a divestment.

So what happens when a Medicaid applicant who resides in a nursing home is deemed to have “divested” assets? Essentially, once the applicant is deemed to have met all the Medicaid eligibility requirements, including spending down their assets to below the required amount, the Medicaid benefits will not begin until the divestment penalty period runs out. Unfortunately, the common outcome is that a person who has a divestment penalty period assessed will generally be forced to use other protected assets, such as the equity in their home, to cover the nursing home costs during this period.

Note: The above discussion is based on information available as of January 2018 and is subject to change at any time. Oftentimes, engaging an experienced elder law attorney will provide the Medicaid applicant and their family with the expertise needed to ensure that all proper actions are taken before and after applying for Medicaid and that the applicant and family properly comply with the federal and state laws and regulations.

Please note that the above question assumes that Michigan law, rules and regulations apply. Also, note that the above question is intended for educational and informational purposes only and not intended as legal advice. Every situation is vastly different and thus requires one-on-one legal advice from an experienced attorney. Every reader of this article is encouraged to seek out an experienced attorney to advise on their specific circumstances. 

What is a conservatorship over an adult person?

Short answer: A conservatorship is the court-directed process of appointing a person to manage the assets, funds and income for an individual in need of assistance.

Explanation: When a person reaches a point where they are unable to make informed decisions for themselves (for example, that person may no longer be able to properly manage their bank accounts or pay their bills, or they may be in danger of financial exploitation), a conservatorship over that individual may be the appropriate action. The process of obtaining a conservatorship will require a judge to review the situation, determine the appropriateness of the conservatorship and order that a conservator be appointed to act on behalf of an individual in need of oversight.

Note: Conservatorship should not be confused with guardianship, which gives a person the authority to act on one’s behalf regarding their personal needs, such as living arrangements and medical care.

Caution: Because a decision to grant conservatorship will remove certain rights of an individual, judges do not take the decision lightly and will want to be thoroughly convinced that the conservatorship is the appropriate action to be taken. Anyone who considers such an action should first determine whether there is a viable alternative to a conservatorship that does not remove the rights of the individual, such as the implementation of an already executed durable power of attorney. If there appears to be no alternative, the person taking such action should be thoroughly educated in the process of conservatorship as well as the responsibilities of a conservator, as the court will hold that person responsible for all decisions and actions taken. Oftentimes, engaging an experienced elder law attorney will provide the proposed conservator with counseling needed to ensure all proper actions are taken before and after appointment and that the conservator properly complies with the laws and regulations.

Please note that the above question assumes that Michigan law, rules and regulations apply. Also, note that the above question is intended for educational and informational purposes only and not intended as legal advice. Every situation is vastly different and thus requires one-on-one legal advice from an experienced attorney. Every reader of this article is encouraged to seek out an experienced attorney to advise on their specific circumstances. 

What is a guardianship over an adult person?

Short answer: A guardianship is the court-directed process of appointing a person to take over certain decision-making authority for an individual in need of assistance.

Explanation: When a person reaches a point at which they are unable to make informed decisions for themselves (for example, that person may no longer be able to handle their daily affairs, forgetting to take medicines, unable to engage in daily activities such as cooking and bathing, struggling to care for themselves medically and, perhaps, becoming a danger to themselves or others), a guardianship over that individual may be the appropriate action. The process of obtaining a guardianship will require a judge to review the situation, determine the appropriateness of the guardianship and order that a guardian be appointed to act on behalf of an individual in need of oversight.

Note: Guardianship should not be confused with conservatorship, which gives a person the authority to act on one’s behalf regarding their assets, funds and income.

Caution: Because a decision to grant guardianship will remove certain rights of an individual, judges do not take the decision lightly and will want to be thoroughly convinced that guardianship is the appropriate action to be taken. Anyone who considers such an action should first determine whether there is a viable alternative to guardianship that does not remove the rights of the individual, such as the implementation of an already executed Patient Advocate Designation form. If there appears to be no alternative, the person taking such action should be thoroughly educated in the process of guardianship as well as the responsibilities of a guardian, as the court will hold that person responsible for all decisions and actions that are taken. Oftentimes, engaging an experienced elder law attorney will provide the proposed guardian with the knowledge needed to ensure that all proper actions are taken before and after appointment and that the guardian properly complies with the laws and regulations.

Please note that the above question is intended for educational and informational purposes only and not intended as legal advice. Every situation is vastly different and thus requires one-on-one legal advice from an experienced attorney. Every reader of this article is encouraged to seek out an experienced attorney to advise on their specific circumstances. 

What is death probate?

Short answer: Death probate is the process of transferring one’s assets that do not transfer automatically upon death.

Explanation: When a person dies, they generally leave behind the assets they accumulated. Assets that do not cease to exist upon death (such as a pension), are not jointly held with another living person or entity (such as a house or bank account), do not have a beneficiary listed (such as a bank account or life insurance) or are not included in a trust are generally included in the “estate”. These estate assets need further action and someone with authority to transfer them to the desired recipients. Probate lends the authority to the person and controls the process of transferring these assets. Please note that a last will and testament does not avoid the probate process but is, rather, the “instructions” for the probate court and personal representative.

Caution: There are many techniques to transferring assets after death, all of which have very different intended and unintended consequences and are, oftentimes, potentially very costly. Before engaging in estate planning, one should always consult with an experienced estate planning attorney who focuses on this type of law.

Please note that the above question is intended for educational and informational purposes only and not intended as legal advice. Every situation is vastly different and thus requires one-on-one legal advice from an experienced attorney. Every reader of this article is encouraged to seek out an experienced attorney to advise on their specific circumstances. 

If I need to enter a nursing home and apply for Medicaid, will the nursing home or government take my home?

Short answer: Strictly speaking, neither the nursing home nor the government will take a Medicaid recipient’s home, but beware, as this is not entirely accurate.

Explanation: The Medicaid program has a set of rules governing a Medicaid recipient’s home, located within BEM 400. As long as the home fits within those rules, the Medicaid recipient may keep the home while receiving Medicaid benefits.

Caution: Beware of Michigan’s estate recovery program. While a Medicaid recipient may keep their home during their lifetime, the equity in the home may still be at risk. The estate recovery program was implemented by the state of Michigan and designed to recover the assets of a Medicaid recipient for purposes of paying back the state for costs related to the Medicaid recipient’s care. If a Medicaid recipient dies and their home passes through the probate process, the state of Michigan is at liberty to place a lien on the home equal to the total costs expended for the Medicaid recipient. This means that, even though the home was protected during the Medicaid recipient’s lifetime, the children may not receive some or all of the equity value of the home. Before engaging in Medicaid planning, one should always consult with an experienced elder law attorney who focuses on this type of law.

Please note that the above question is intended for educational and informational purposes only and not intended as legal advice. Every situation is vastly different and thus requires one-on-one legal advice from an experienced attorney. Every reader of this article is encouraged to seek out an experienced attorney to advise on their specific circumstances.