The Seven Dirty Words in Elder Law

There are people out there who frighten everyday folks by using scare words to rush people into buying their services or products. This article deals with some of those words and dispels some common fears about them. Don’t worry. The seven dirty words can be said at the family table.

First on the all time list is “probate.” That word conjures up images of the state taking away your assets, or a big tax bill, giant probate fees, delay, and who knows what else. It’s the fear of the unknown. In reality probate in Connecticut is only needed when there is real estate not owned in survivorship or in a trust, or other assets like bank accounts that are solely owned. And probate fees in Connecticut are quite small. A simple probate estate can be fully completed in 5 to 6 months. So don’t pay big money to take steps to “avoid” probate, when you may not be subject to probate anyway.

Second on the list of dirty words is “death taxes.” Unless your assets exceed $2,000,000, there are no Connecticut death taxes, and the federal limit for an individual is $5,340,000. I’ll bet 99% of Connecticut residents have zero death taxes. Don’t let anyone sell you a trust to avoid death taxes, because most likely you will have zero tax. You can’t get lower than that.

Third is “gift taxes.” Although a gift tax return is supposed to be filed if you give away more than $14,000 to any one person in a single year, there will be no gift tax unless you give away more than $2,000,000 for Connecticut, or $5,340,00 for federal. So just like death taxes, almost no one is subject to gift tax.

Fourth is “the nursing home.” Utter those words and everyone immediately thinks of losing their real home. In a husband and wife situation, if one spouse needs nursing home care, the home can be totally protected for the other spouse and the state will not put a lien on it. And there are rules that allow the healthy spouse to keep many more assets than the house.

Fifth is “lien.” Many people think that if their spouse goes on Medicaid, the state will put a lien on their house, but as I said above, there is no lien as long as the healthy spouse lives in the house. So don’t run out and transfer the house to the kids, as that will cause a penalty period if done within five years of applying for Medicaid.

Sixth is Medicaid itself. It conjures up images of losing everything. In reality, it is a very valuable resource to pay for home care to keep someone out of a nursing home. Its rules are complex and strict, but that is no reason to not use it because in Connecticut it can pay $70,000 a year or more toward home care and medical costs.

Seventh and last for this article is “lawyer.” Okay, maybe it should have been first, but I’m a lawyer so I put it last. From Shakespeare’s time to the present the word “lawyer” can conjure up fear or disdain. Unless it’s your lawyer, of course, and that lawyer knows how to set your mind at ease and show you a path to get government services, stay in your home, keep enough assets to live on, or pass your hard earned money to your kids. Then the lawyer’s better than okay. So the next time you hear these words, take a moment to think and then ask questions, from someone who truly knows about the subject, and who is not trying to “sell” you anything. You may even enjoy saying these seven dirty words.