Aging Options Blog : Washington Estate Planning Lawyer & Attorney : Rajiv Nagaich : Aging Options Law Firm : WA Elder Law, Wills & Trusts

How often can banks inspect your property to check the condition and could this be a problem for seniors? Especially considering the maintenance of the grounds?

Generally this is not a problem.  The contract does state that you have to maintain your house. They will usually send somebody on an annual or bi-annual basis to do a drive-by or come by and take a look at your house.  This frequency is established when you take the loan and depending on how the old house is.  When the loan is taken, they will do an initial inspection where someone will come and inspect the house rather thoroughly.  Many times I will see loans subject to conditions that the person who is making the loan made these improvements. At that point they may schedule someone to do follow up and a walk-in. The downside is that they are in the drivers seat as to how frequently to schedule inspections or what repairs must be made.  But it has not been a problem. I have yet to come across a case of absurd requirements.  

In terms of the grounds, it usually does need to be kept in good order, and many times this involves mowing the lawns and people frequently hire others to mow the lawn and do repairs of the grounds.

I do think reverse mortgages are generally a good idea. However, the caution I tend to give people is that they make sure they want and have the means to age in place.  It is not something you should be doing if you are considering moving within the next 3-5 years.

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Is there much of a difference between AARP Medigap and the new Advantage Plan?

Medigap through AARP is backing a traditional Medicare Part A and Part B. Both A and B have deductibles and co-payments, and what Medigap does is picks up the co-payments for you.
 

The Advantage Plan may have different requirements or enforcements based on your situation. I would not look at the costs in determining what policy to get, you should look at the benefits you receive from the policy.
 

Does your physician accept the plan that you have, and do you like your physician? If you do, then you may want to stick with Parts A and B with Medigap.  AARP Medigap and the new Advantage plan are two very different things.

 

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I heard the inheritance tax rates are going to increase taxes by as much as 45%, is this true and when will this happen?

The rates are going down to 45%. Under the old regime, tax rates used to be up to 55% at the federal level. The state and estate taxes reach between 10% and 19% in addition to the federal taxes.  For estate tax purposes, the exemption for 2009 is 3.5 million. In 2010, if congress does not take any action, estate taxes will be no more, but then in 2011, if congress again does not take any action, estate taxes will be back down to 1 million dollars. For the state of Washington, there is a 2 million dollar exemption regardless of what the federal exemption is.  But I do think something will happen before Dec. 31^st, but I’m just not sure what. 

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How extensive of aid can you get from the Veterans Administration to help someone living in their own home?

The VA system talks about helping people by way of money. For a qualified veteran or the spouse of a qualified veteran, there are two ways to gain assistance.

If any of your income is being spent on aid or attendance for the qualified spouse or veteran, that person will be entitled to $1000-$2000 of extra monetary help per month. If someone has an income of $2500/mo, but are accessing home health, which is costing $2000/mo. The VA will say your income is $500/mo, and we will make certain that if you are the spouse of a veteran, your income is no less than $1000/mo, so we will add an extra $500 to your paycheck.

The other way is that for qualified veterans, the communities may limit the cost to access the services of the VA.  There may not be anything for home health, but for assisted living or nursing home, then their contribution is limited. Either the VA or the community will help.  Because the qualifications of the VA will impact the Medicaid, so you must look at them as a package. 

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What can be done when both parents are in declining health, and do not want to leave their house?  
                                        
If power of attorney has not been prepared, a guardianship is something to consider. A guardianship is where an attorney will go to court, and have the parents declared incompetent.  However, this can be considered by the parents to be a slap on their face.  And in this case, the court may not impose a guardianship due to the fact that the parents likely have enough mental capacity to understand the decisions they are making and the risks they are taking.  And so, in my opinion, a guardianship is a poor solution.

Even with power of attorney, children may not be in a position to enforce their decision to move the parents to an assisted living facility, due to the fact that the power of attorney can be revoked.  

Another solution would be to try to talk to the parents, and convince them to move. But this may end up alienating the relationship between the children and the parents.  The children may need to try to understand that the parents may not consider their advice in the same manner that they would consider advice from someone in the professional field.  This is one situation where the care and management aspect is so appropriate, such as a care manager or social worker, because the parents do not want to leave their home although the children do not consider it a safe situation. 

Care managers or social workers help to create a plan that can work to provide things such as a personal emergency response system that allows them to continue to live safely at home. This may be a solution that both parties can agree with. 
 

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We would like to help pay off our children’s houses.  Both owe approximately $100,000 each.  Is there any way to do this considering the gift taxes and other obstacles?

You can do it.  The limit, which is $13,000 per year, per person, has nothing to do with estate gift taxes.  According to the law, any American can gift up to $1,000,000 in their lifetimes without worrying about any gift taxes. The IRS holds a ledger with the amount of $1,000,000.  Only when the amount exceeds $13,000 does a person needs to contact the IRS. 

So a gift of $100,000 can be done without worrying about gift taxes or income taxes.  The only thing that would need to be done is to file a gift tax return(pdf), in which case the IRS will reduce your $1,000,000 lifetime exemption accordingly.  In this specific case the IRS will reduce the $1,000,000 by $87,000 each.  
 

The other impacts that this gift may have is that if either parents requires medicaid within the next five years it may become complicated.  However, if done properly, this would not be a problem either.  Since this will be done without medicaid in mind, medicaid cannot count this as a penalizing transfer. 

But the problem is that medicaid presumes that no one ever makes a gift for reasons other than qualifying for medicaid.  Therefore, some documentation will need to be secured before making the gift in order to stop this from coming back to haunt you. 
 

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