Ronald Morton's Elder Law Blog

Are Handwritten Wills OK?

An interesting article on myjourneytomillions.com explores whether handwritten wills are valid, and whether individuals are better off drafting a handwritten will than they are using a do-it-yourself service like legalzoom, or hiring a lawyer.  In Mississippi, a handwritten will, which is called a "holographic will", is legal as long as it is completely in the handwriting of the decedent.  Fill in the blank forms will now serve as a handwritten will.  The problem with handwritten wills comes in presenting them to the court for probate.  Because such wills are not witnessed, the only proof that the document was written and signed by the decedent is testemony, usually by affidavit, of non-experts that they recognize the will as being in the decednet's handwriting. If this is challenged by one of the heirs, this could lead to significant litigation, possible great expense in hiring handwriting experts, and the possible invalidity of the will. Additionally, in all but the simplist of dispositions of property, such as "everything divided equally among my children," the handwritten will is likely to be inadequate to address many of the concerns that a comprehensive estate plan will address, such as protection from divorce, creditors, or nursing home expense. 

In short, yes handwritten wills are valid in Mississippi, but with them comes some risk, and they may be inadequate to deal with the real-life issues of the heirs in all but the simpliest of estates. 

Medicaid Warns of Dangers of "Medicaid Planners"

The Mississippi Division of Medicaid has issued a warning "advising seniors, their families, and caregivers there is no fee associated with applying for Medicaid benefits" and asking that "so-called Medicaid 'planners' who charge to fill out Medicaid applications" be reported to the Medicaid fraud division.

What the Division of Medicaid fails to state is that skilled planners are able to save their clients tens of thousands of dollars through lawful planning services that the Medicaid case workers either do not know about, or will not tell you about.  True, quality planning costs are significant, generally equal to about the cost of one to two months private pay in a nursing home.  However, such planning almost always results in asset preservation many times that fee, saving hard earned assets so families can better care for their loved one in a nursing home, or ensure that the at-home spouse is not impoverished.  True, there are some planners out there that do nothing more than sell annuities that will ultimately be exhausted during the Medicaid recipient's lifetime or be used to repay Medicaid at their death.  However, planners with a comprehensive knowledge of the law can almost always save significant assets, ensure a better quality of life for the applicant, and reduce the period of time that an applicant must wait to receive benefits. 

Medicaid's focus on the "cost" of such planning is misplaced.  It is not the "cost" of the fee that is important, but the "value" that the fee represents.  Compare, for example, a "free" application with the aid of Medicaid employees that results in the loss of all but $4,000 of an applicant's assets, vs. an "over-priced" $8,000 plan that results in saving the family $100,000 in assets -  Which of these represents the greater value? 

While I am sure that somewhere in the state there are probably those that hold themselves out to be "Medicaid planners" and do nothing more than file an application, as Medicaid suggests, I am personally unaware of such individuals.  What I am aware of is a small committed group of elder law attorneys in Mississippi who work hard to advocate for their clients and utilize lawful techniques provided for by the Mississippi Division of Medicaid and the US Congress to maximize the assets that families can preserve once a loved one becomes a resident of a nursing home. 

As with hiring any professionals, you should conduct significant due diligence before engaging the services of a Medicaid planner:

• What training has the individual received that qualifies him to perform Medicaid planning? 
• Are they selling you any products that pay them a commission?
• Do they hold a law degree?  Frequently planning involves trusts, wills, and other legal documents that non-lawyers are simply not permitted to perform.
• Do they perform training for other professionals?
• Do they frequently challenge Medicaid rulings successfully?
• What organizations are they members of, such as the National Academy of Elder Law Attorneys, or the American Academy of Estate Planning Attorneys?
• Are they accredited to apply for benefits before the Veterans Administration?
• What elder law Certifications do they hold?  Do they hold the highly regarded and difficult to obtain Certified Elder Law Attorney designation, or merely the simply acquired via internet Certified Senior Advisor designation?

These types of questions will ensure that you are hiring a quality planner that will do ethical, comprehensive planning for your family. 

Best Laid Plans ...

I was recently consulted on a case involving a medicaid applicant under a special state Medicaid waiver program that would pay around $950 per month toward assisted living expenses.  The applicant had no money, and her only other asset was her house, which is an exempt asset under Medicaid.  As a result, the applicant qualified immediately for benefits. The applicant's plan was to sell the house to make up the difference between the assisted living rent and Medicaid's contribution, but the applicant refused to hire or even listen to a qualified professional to design her plan. Instead, she saved legal fees equal to about a month's rent in the assisted living facility, and did it herself.  Her plan was to privately pay the difference between what Medicaid paid using sale proceeds.  What she did not plan on was the fact that the sale proceeds from her house are not exempt the month after the sale, and once she sold the house, she became ineligible for all Medicaid benefits.  She must privately pay for her care, without Medicaid assistance, until she spends all of her funds. Essentially by saving around $3,500 in legal fees, she is loosing around $30,000 in benefits, and will probably run out of money to live in assisted living in 1 year, whereas with the continued assistance, she could have stayed there for 3 years.  That's some savings, but sadly that is typically the result when people try to plan themselves. Medicaid planning is complicated and risky. If you are serious about saving assets and ensuring quality of life, you owe it to yourself and your loved ones to seek professional guidance.  The money you spend will be returned many times over in the assets saved, peace of mind, and improved care.  

Former Mayor of Jackson Dies with Sizable Estate and no Will

The late Mayor Frank Melton died leaving a sizable estate with assets in both Mississippi and Texas. Despite his considerable means, Melton died without a will.  Texas is a community property state, whereas Mississippi is not, which may result in some differences as to how assets are distributed, depending on the state in which they are located.  It does not appear at this time that Melton had a taxable estate and lost out on significant tax savings like Steve McNair did.  However what is clear is that his estate will require probate in both Mississippi and Texas, which will increase the cost of overall estate administration significantly.  Had Melton placed his assets into a Revocable Living Trust the duplicated court proceedings could have been avoided, saving his estate thousands in legal and administration fees.  If you would like to discuss whether a Revocable Living Trust would benefit your family, please feel free to email me or call for an appointment.