Elder Law Tidbits

Sometimes small tidbits can save families big money and help keep family caregivers from burning out. Giving parents or a spouse help to stay at home is a common occurrence. But when that help becomes so time consuming that it affects the child’s job or health, it is past time to seek outside help. It does neither the parent or the child any good if the child suffers what is called ‘caregiver burnout.’ Day care is available for some. It gives extra socialization to a parent who is amenable to it, and allows children to keep their paying job. A child who is able to give full time care can be paid for it by the parent, if a written contract is used, so that if Medicaid is ever needed, the money paid to the child will not be counted as a gift.

A helpful hint if the parent needs to pay a homecare company, is to use the parents’ IRA or 401K or other “qualified” money because paying for medically needed care is a medical expense that can be deducted from the parents income. If the parent uses regular money to pay for medical care, and the children later inherits the IRA, the children will not get the full value, because they will owe income taxes on it. But if the parent uses IRA money and gets a reduction on the parents income taxes, that makes the money for care last longer, and the amount of money going to the children will be greater if the parent dies.

Another tidbit for an elder person, and young adults also, is that in Connecticut you can name a beneficiary on a form found on the back of your car registration (not title) to get your car if you die. This avoids probate, makes the transfer of a car after death simple and makes life easier for everyone. The one thing to remember is that the person named to receive the car must take the registration, title, and death certificate to Motor Vehicle within sixty (60) days of death. No one is thinking of that when grieving over the loss of a loved one, but this may jog your memory if that happens in your family.

Another tidbit is that many elders put one or more children as joint owners on bank accounts or stocks. This can be convenient, and make life easier upon death of the parent, but it can lead to unequal results and family fights if the parents intent was to treat everyone equally. One answer is to do a revocable trust for the parent so the children can use the funds for the parent, but when the parent dies, it all goes equally and avoids the possibility of a family fight. Those revocable trusts don’t help solve a major potential problem, however, because they do not protect assets in
case the elder person needs to apply for long term care paid by Medicaid or other government programs. Revocable trusts by their very name are revocable, and that means the parent can revoke it and have all the money put back in the parent’s name. So the state of Connecticut Department of Social Services quite logically treats all assets in a revocable trust as owned by the person who made the trust.

There are so many laws and regulations and variations on asset protection that this article on tidbits has one simple but critical piece of advice. Get the help of a qualified elder law attorney who knows the federal and state rules on long term care, at home or in a nursing home and who knows the tax implications and the practical effect of any solution. Often there are upsides and downsides to whatever you do that depend on laws, regulations and each family’s individual situation. That old adage that “an ounce of prevention is worth a pound of cure” couldn’t be more true. Get the advice you need so that your family is well prepared for life’s challenges.