Archive for the ‘Uncategorized’ Category

Who has the Authority or Can he really do that?

Thursday, June 20th, 2013

It is easy to forget or not realize some very important points about probate.  Probate is a process that only occurs in Court.

A Will is just a piece of paper until someone dies and a Probate Court decides that it is valid.   Once in probate only the personal representative of the Estate has the authority to make decisions about property in the estate.   Sometimes even the personal representative (also called executor or administrator sometimes) does not have the authority until the Judge says he does.

An estate is not in “probate” until an application is made to a Court with the proper authority and a person is appointed to manage the estate.     If you are named as Executor in a Will you have no authority to do anything until a Judge says you do. So to be safe, take the Will to an attorney and find out what needs to be done.

This means that  frequently no one should pay bills outside the probate process,   release control of assets to a creditor or third party or make other decisions about the estate until a competent attorney has been consulted and a probate estate opened.

To do any of the above actions outside probate could create financial liability to the creditors and/or beneficiaries of the estate by the person acting without authority.   If you are not the Executor or Administrator,  even if you are named as Executor in a Will but have not yet been to Court, do not take actions that cannot be changed later.

Only the person named by the Court to manage an estate has the authority to make decisions about an estate.  Often the Executor will only make those decisions after careful consultation with an attorney, discussion with the beneficiaries and sometimes not until the issue is presented to a Court.

If you are the named executor and the only beneficiary you can probably act without liability to anyone but a creditor, but acting without legal advice could cost you money you do not have to spend.

If you are appointed as the personal representative of an estate you have special duties that are called fiduciary duties to the heirs/beneficiaries of the estate.  You must be fair to all of the beneficiaries; you must be loyal to their interests–even possibly to the harm of your own interests; you must provide all necessary information to the beneficiaries so that they can make any necessary decisions about their interests; and you must be competent in managing the estate.   These fiduciary duties are often what makes being an executor so difficult  because your duty to one person may conflict with your duty to someone else.

Creditors also have rights regarding assets within an estate and the claims must be dealt with according to the Texas Probate Code.    It is not uncommon that a creditor will make a demand that it be paid when if payment is left to the probate process it will be denied payment because another party will have superior right to the proceeds or assets of the estate.

Do not assume that because someone is an heir or believed to be an heir or beneficiary that the person has the right to do things with assets of the estate outside the probate process.  Hopefully,  this provides more light than heat.  The blogs about creditors should be read with this one to have a better understanding of the pitfalls a personal representative faces.

New Rules Protecting Federal Benefits

Wednesday, February 20th, 2013

A new regulation, published in the Federal Register on April 19, 2010, at 75 FR 20299 will stop banks and other creditors from seizing federal benefits deposited into a bank account. If the regulation goes into effect it will expand protected benefits to include not only social security and SSI but VA benefits, federal railroad retirement benefits, Civil Service Retirement benefits, and Federal Employees Retirement System benefits.

Banks will be required to review the deposits into an account to determine whether the deposits are of a protected class. This will prevent creditors from seizing balances in a bank account and creating bank charges for overdraft or bounced check charges. Frequently bank customers have not known they could require the release of the funds due to federal exemptions.

How does Medicare work?

Saturday, March 31st, 2012

The Medicare statute has four large sections: Parts A, B, C and D.

Part A is paid for by the Medicare tax you pay while working. It covers hospitalization.

Part B covers your doctor visits, home health care, physical and occupational therapy and various medical tests. You pay for it by the premium deducted from your social security check.

Parts A and B are considered “standard” Medicare. Part C is HMO or PPO medical insurance. The government pays subsidies to various private insurers who offer Medicare insurance that meets statutory criteria. The policies are called Medicare Advantage and some are specialty plans that have been more heavily subsidized than “standard” Medicare. These special policies are the policies whose subsidies are being cut back to the standard amount under the new Health Care law. For the most part it is these subsidies that the Republicans tried to protect and complained about when they argued that the “Obama” Health Care Bill made cuts to Medicare.

Part D is the prescription plan that began during President Bush’s presidency. Prescription coverage can be purchased through a Part D policy or a Part C Medicare Advantage plan.

Medicare coverage normally begins when you retire at age 62 or later and start taking Social Security benefits. The initial enrollment period for Part A begins in the third month before your 65th birthday. The enrollment period lasts for seven months. Your Part B coverage normally is started with your Part A coverage and social security.

During this initial enrollment period you may purchase a Medicare supplemental policy, sometimes called Medigap.

You cannot be denied coverage under a supplemental policy if you enroll during this initial period. You have a choice of coverage level or benefits that are standard in every policy by law. Historically the levels were A through J. The most comprehensive coverage paid all of your medical expenses not covered by Medicare.

Standard Medicare for most care pays 80% of the medical bill and the balance is paid by the beneficiary and/or the Medicare supplemental insurance carrier.

Failure to purchase the supplemental policy during your initial enrollment period creates a 1% penalty for every month you fail to enroll.

Enrollment opens again each year November 15 through December 31st. The same enrollment periods apply for Part D policies if not purchased during the initial application period.

Part B policies general enrollment period is January 1 through March 31 of each year with the coverage beginning July 1 of that year.

Failure to enroll for Part A during the initial enrollment period will require an application to enroll in Medicare.

Do I qualify for Medicaid?

Saturday, February 25th, 2012

There are many different services provided by the various states under the program called Medicaid. My comments are focused on Texas residents qualifying for long term care. Many people find themselves in a nursing home ( called a skilled nursing facility in Medicaid ) suddenly after a fall, a heart attack or other serious medical crisis.

Generally there are five requirements in order to qualify for Medicaid. First you must be a citizen of the United States.

Second, you must be a resident of the state in which you wish to apply.

Third, and maybe the most critical is you must be “medically needy”. There are several factors involved, but essentially to meet the medical necessity requirement you must have a disease or medical disorder that requires the attention of a Registered Nurse (RN) or Licensed Vocational Nurse (LVN) on a regular basis.

Your income may not exceed the “income cap” set by statute. Currently it is $2022.00 per month.     If a Qualifying Income Trust is used (often called a Miller Trust or a QIT) then a person with more than the income cap may qualify for Medicaid.  The income placed into the Trust  is deposited into a designated bank account and all of the income is paid to the nursing home (less the personal needs allowance).   There are other exceptions which are more than I can include here.

Finally, your “countable” resources may not exceed $2000.00. This one requirement is complicated enough for a book all of its own. I will write a brief article on this topic soon.

For Medicaid to begin coverage of a nursing home patient, he or she must have been in the facility for at least 30 days.

How Medicaid is applied varies from State to State. An Application is made by the patient, a facility or a family member by completing the required form and submitting it to the Texas Health & Human Services Commission.