Do I need a Will?
Almost everybody should have a will and/or a revocable living trust.
There are many reasons to have a will. A will allows you to direct where your assets will go when you die. You will also be able to select a personal representative to pay your final bills and taxes, and distribute the assets to your beneficiaries. One of the most important reasons to have a will is to protect minor children. A will can include direction for the appointment of a guardian for a minor child or children. A will can include a trust and the appointment of a Trustee to receive and administer your estate for the benefit of minor children. A will can also include within it a trust to protect disabled beneficiaries who are unable to manage their funds and/or who may be on needs based public benefits. A “holographic will” is also valid if it is in the testator’s handwriting and signed even if it is not witnessed.
If a person dies without a will, the law says how your assets will be distributed. This is called the law of intestate succession. In Arizona, if a married person dies without a will, the deceased spouse’s estate will pass to the surviving spouse if the surviving children are all born of the most recent marriage. For blended families, the rules are quite different and not as favorable to the surviving spouse. If there are surviving children who are the decedent’s children from a former marriage, then all the decedent’s children receive an equal share in one half of the decedent’s separate property the remaining half of the decedent’s separate property and the remaining half of the decedent’s property, but none of the decedent’s community property, passes to the surviving spouse.
What are the requirements for a valid Will?
A will executed in Arizona is valid if it is a written document signed by the creator of the will who is at least 18 years old, and is witnessed by at least two people within a reasonable time after the will was signed. A will prepared in another state, known as a foreign will, is valid if it complies with the Arizona requirements for a valid will or it was a valid will under the laws of the state where it was executed.
My mother is in a coma, can I get a power of attorney appointing me as her agent?
No, only your mother can sign the power of attorney. An individual must be competent to sign the power of attorney. If your mother has assets in her name alone, it may be necessary for a conservator to be appointed by the probate court to gain access to her resources and otherwise manage her financial affairs. If your mother is not competent and there are medical decisions to be made, by Arizona law, a spouse or child may make most medical decisions even if there is no living will or medical power of attorney, but may not authorize the withdrawal of a feeding tube or consent to in-patient psychiatric hospitalization.
Is a living will the same thing as a Health Care Power of Attorney?
No, a living will gives your family and your health care providers instruction or direction regarding the type of care you want, or don’t want, if you cannot make health care decisions on your own. A healthcare power of attorney appoints an agent to make medical decisions for you in the event you are unable to speak for yourself.
If my mother receives ALTCS benefits, will ALTCS take her house after she dies?
Many people believe once someone is eligible for ALTCS the state takes their Social Security check. This is not exactly the case. Once someone is found eligible for ALTCS, they must pay an amount towards the cost of their long term care expenses. The portion that they pay is called either Share of Cost or Room and Board depending upon the type of facility where they are living. Share of Cost and Room and Board are based upon the client’s income. ALTCS allows certain expenses to be deducted from Share of Cost such as a personal needs allowance (currently $93.45 if the ALTCS recipient is in a nursing home and $1,869 if at home), health insurance premiums, medical expenses not paid by ALTCS and, for a married person, potentially a spousal income allowance that can allow the spouse to keep some of the ALTCS recipient’s income, depending on the spouse’s income and his or her housing expenses. Basically, the ALTCS recipient continues to receive their Social Security check and then every month writes a check to the nursing home or facility for their Share of Cost or Room and Board if it is required.
Will ALTCS take my mother's social security income while she is receiving benefits?
ALTCS will not implement estate recovery or liens if the recipient has a surviving spouse, a child under 21, or if there is a disabled child. In addition, ALTCS cannot recover on a lien if the recipient is survived by a sibling living in the home who lived there for at least a year before the recipient went into the nursing home or if a child is residing there who provided care to the recipient that allowed the recipient to stay at home for the two years prior to the recipient going into a nursing home. Under certain limited circumstances, an undue hardship waiver of recovery can be requested. An attorney experienced in elder law and Medicaid/ALTCS planning can assist you in determining how ALTCS estate recovery and liens could impact your mother’s estate and ways to possibly avoid recovery and probate at the time of her death.
Must my parents have absolutely no income or assets in order to qualify for ALTCS?
As of January 2007 :RESOURCES: The ALTCS resource limit for a single person is $2,000. For a married couple, the applicant’s spouse may retain half of the countable resources of both spouses, except the half retained cannot exceed the maximum of $101,640 and the spouse may keep a minimum of $20,328 even if half is less than $20,328. In addition to the half the spouse retains, then the applicant is still permitted to retain $2,000. Not all assets are countable for ALTCS. For example the equity in the home, one car and certain burial funds may not be counted towards the resource limit. Attorneys who are experienced in Medicaid/ALTCS planning can advise clients of ways to turn countable assets into excluded assets and still qualify for ALTCS.
As of January 2007: INCOME: A single person can have $1,869 in gross monthly income and a married couple may have up to $3,738 in gross monthly income and still meet the ALTCS income limits. Even if an applicant’s gross monthly income exceeds the ALTCS limits, they could still qualify for ALTCS by establishing an “income only” or Miller Trust.
Can my parents give away all of their assets in order to qualify for ALTCS?
For transfers made prior to before July 1, 2006: Any transfers or gifts made to someone other than a spouse prior to July 1, 2006 and within 36 months prior to applying for the ALTCS program must be disclosed to ALTCS. Any transfer from a revocable trust, or to an irrevocable trust from which distributions cannot be made to or for the benefit of the transferor, must be disclosed if made within 60 months prior to application. Once the transfer is disclosed, ALTCS imposes a period of ineligibility by dividing the total amounts transferred in a given month by the average monthly cost of care in the county as determined by ALTCS as of the date of the ALTCS application, which is currently $4,781.99 in Maricopa, Pima and Pinal counties, and $4,445.00 in all other Arizona counties. The resulting figure is the number of months of ineligibility, with fractional months being rounded down. The period of ineligibility runs from the date of the transfer, with the first month being the month in which the transfer was made. If a transfer is made within a period of ineligibility resulting from a prior transfer then the amount of the more recent transfer is added to the prior transfer, and the ineligibility period runs from the date of the first transfer.
Example: If your father gave away all of his assets totaling $50,000 in January 2006 and applied for ALTCS in May 2006 you would have to disclose the transfer made in January because the transfer was made prior to July 1, 2006 and within the three years prior to applying. ALTCS will calculate the penalty period by dividing the value of the transfer in January by the average cost of care in the county in which the transfer occurred. For this example, we will use the average cost of care in Maricopa which is currently $4,781.99. The resulting figure would be equal to 10 months of ineligibility with fractional months being rounded down ($50,000 divided by $4,781.99 equals 10.45 months) This means that the ALTCS applicant would not be able to receive any help with their long term care expenses until December 1, 2006 because the penalty period under the old law runs from the month in which the transfer occurred, January 2006, and ends on November 31, 2006.
For transfers made on or after July 1, 2006: Any transfers or gifts made to someone other than a spouse, or from a revocable trust or to any trust where assets are not available to the applicant, within 60 months prior to applying for the ALTCS program must be disclosed to ALTCS. ALTCS imposes a period of ineligibility by dividing the total amount transferred by the average monthly cost of care in the county as determined by ALTCS as of the date of the ALTCS application, which is currently $4,781.99 in Maricopa, Pima and Pinal counties, and $4,445.00 in all other Arizona counties. The resulting figure is the number of months of ineligibility, with fractions months being dropped. The period of ineligibility runs from the date of the transfer, with the first month being the month in which the transfer was made, or when the applicant applies for and is otherwise eligible for ALTCS, whichever is later. ALTCS will also add together multiple fractional transfers of assets made in separate months during the look back period and treat them as one lump sum transfer.
Example: If your father gave away all of his assets totaling $50,000 in July 12, 2006 and applied for ALTCS on August 1, 2007 you would have to disclose the transfer made in July, 2006 because the transfer was made after July 1, 2006 , and within five years prior to the application. In order for the penalty period to begin to run, your father would have to meet medical eligibility requirements, be under the income test, and have assets under $2,000. This is because he must apply and be otherwise eligible for the penalty period to begin. Assuming he is otherwise eligible, ALTCS will then impose a penalty period by dividing the value of the transfer in July by the average cost of care in the county in which the transfer occurred. For this example we will use the average cost of care in Maricopa which is currently $4,781.99. The resulting figure would be equal to 10 months of ineligibility with fractional months being dropped ($50,000 divided by $4,781.996 equals 10.45 months) The penalty period will run from August 1, 2007, because ALTCS found the applicant to be financially and medically eligible, except for the transfer, and will end on June 30, 2008. If he had made additional transfers after July 2006 and before he applied they would be added together with the $50,000 transfer and the resulting total would be divided by $4,781.99 in order to calculate the penalty period.
Why does Arizona have ALTCS instead of Medicaid?
Medicaid is a joint federal-state program. In 1981 the Arizona Legislature approved and funded the Arizona Health Care Cost Containment System (AHCCCS), as a prepaid, capitated managed care demonstration project under Medicaid. In 1989 Arizona Long Term Care System (ALTCS), a division of AHCCCS, was implemented offering long term care, acute care and home and community based services to the elderly or physically disabled and developmentally disabled residents of Arizona. Though the names are different, it is correct to say that ALTCS is Arizona’s version of Medicaid.