While meeting with a client yesterday I heard a story that I thought was instructive and worth repeating. My client's two aunts were both in the same nursing home. One of her aunts was destitute, and her room was paid for by Medicaid. The other had managed to save a couple of hundred thousand dollars and was in the room next door privately paying for her care at about $5,000 per month. After about 3 years, the other aunt was also destitute and received Medicaid. My client correctly observed that both sisters had the same type of room, in the exact same facility, and received the same care, but one was spending her life's savings while the other received the same care at no cost. My client wisely recognized the wisdom of planning in order to preserve her life's savings.
The estate tax expired on January 1,
2010. It remains to be seen whether Congress will reinstate it before
it returns in 2011, but the fact that there is currently no estate tax
can have unintended consequences for spouses. Standard language found
in many estate plans may leave spouses with nothing. It is important
to check with an estate planning attorney to make sure
your estate plan does what you want it to do.In
previous years, estates could pass a certain amount of assets tax free
(up to $3.5 million in 2009). In addition, spouses can receive an
unlimited amount tax free. To take advantage of these rules, estate
plans often contain a "bypass trust" (or "credit shelter trust") and a
will with language in it that is designed to allow estates to pass
without any estate tax. For example, the will may state: "I leave to my
trustees the maximum amount that can pass free of estate tax and leave
the residual to my spouse." Because there is currently no estate tax,
individuals who die in 2010 with this language in their estate plan
would wind up leaving nothing to their spouses. While Mississippi allows spouses to claim a child's share of the estate even if they don't receive anything under a will, this can
be a time-consuming and expensive process. Additionally, for estates planned with living trusts, such an election against the will may not be available at all. To ensure
this does not happen to your spouse you should talk to an estate planning attorney.
The following is reprinted from the NAELA eBulletin:
At first it was just a curious observation. Now it’s an undeniable conclusion, first published two years ago in a medical journal and now in a new book coming out Tuesday: “Making Rounds with Oscar: The Extraordinary Gift of an Ordinary Cat.” Oscar is the cat. David Dosa is the author and the doctor. And it would be a mistake to assume from the title that Oscar merely accompanies Dosa at Steere House in Providence, which cares for patients with terminal dementia. “It’s definitely his world,” Dosa says. “He just lets us work there.” Oscar lives at the nursing home. And in his roughly five years there, Oscar has sensed the imminent deaths of some 50 patients whom he insisted on sitting beside and keeping company as their lives came to a close. “It’s not like he dawdles,” Dosa writes. “He’ll slip out for two minutes, grab some kibble, and then he’s back at the patient’s side. It’s like he’s literally on a vigil.” Dosa is an assistant professor of medicine at Brown University. He has faith in science, not in a cat. Well, that was once the case. Dosa’s faith has been shaken. “My own intellectual vanity made it easier for me to reject the notion that some errant feline could know more than we as medical staff did,” Dosa writes. “I felt strangely elated by the notion that I could be completely wrong.” A few years ago Dosa realized he was completely wrong. Two patients on opposite sides of the nursing home were dying. A female staff member who earlier noticed Oscar’s aptitude to sense the onset of death took Oscar out of one patient’s room and brought him to the room of the other patient who was regarded as more deathly ill. “She brought in this angry cat and put him on the bed,” Dosa says. “Oscar charged out of the room and immediately ran back to the other room. Oscar was right. That patient died that evening. The patient we thought would die first lived a couple of more days.”Source: Providence Journal (February 1, 2010)
Full story: https://www.projo.com/lifebeat/content/artsun-oscar_01-31-10_61H80A6_v26.3a627cd.html
A recent case decided by Mississippi's Court of Appeals illustrates the standard of review for overturning the validity of a deed. In that case, the elderly owner of a funeral home moved in with her daughter in 2001 after being diagnosed with dementia and other infirmities. Over the next two years, the mother showed signs of psychosis, paranoia, and sleep problems with insomnia and was placed on anti-psychotic medication. On April 2, 2003 a quitclaim deed was filed containing the alleged signatures of the mother and her daughter, conveying the funeral home to the daughter's son. In 2006 it became necessary to establish a guardianship for the mother, and at that time other heirs sought to set aside the deed. The Court found that the Chancellor did not err in rejecting testimony that the mother appeared to be normal in light of medical evidence that her condition was continuing to decline and that she was on anti-psychotic medication. The evidence presented supported, by clear and convincing evidence, the assertion that the mother lacked the mental capacity.
This case illustrates both the high standard of review for overturning a deed, which are presumed to be valid unless shown otherwise by clear and convincing evidence. It also illustrates the risk of making such transfers if one suffers from an impairment like dementia. It may well have been that the mother was perfectly aware of what she was doing when she made the transfer and intended the property to go to her grandson, but the testimony of witnesses to the transaction was not enough to overcome medical documentation of her impaired condition. Under such circumstances, she would have been wise to have separate medical evidence of her specific condition on same day that the transfer was made as evidence that she was lucid and possessed sufficient capacity to make the transfer. The family should also have considered videotaping the transaction so all could observe her mental state. Finally, the case illustrates the importance of using the services of an elder law attorney in planning the affairs of someone who suffers from a disability. While no attorney can guarantee that a transaction will be upheld, an attorney knowledgeable in the disease symptoms and in the legal standards for upholding such transfers likely would have made suggestions that would have made the transfer more likely to have been found valid. For a list of Certified Elder Law Attorneys in Mississippi, click here.