The Brown family reunion has always been an event everyone looks forward to. Family visits, games, stories and everyone’s favorite foods are always on the agenda. On the top of the menu is Grandmas traditional Lemon Coconut Cake. This year, however, the cake tasted a little on the salty side, by at least a half cup. Though the cake was disappointing, of more concern was Grandma’s confusion with the recipe and the loved ones around her. Could something be wrong with grandma’s mental state?
A major concern of clients is “avoiding” Probate. So what is Probate? And what does it cost? Probate is a process, supervised by a Probate Court, whereby assets are transferred from a deceased person, to heirs, or if there is a will, to the beneficiaries named in the will. The single most important thing to realize, however, is that property that is owned jointly with right of survivorship, or such as an IRA that has a beneficiary, does not pass through Probate. It goes directly to the survivor, or to the named beneficiary.
Caring for parents in their own home or a child’s home is a choice many families contemplate. With the various programs available for Connecticut residents and for veterans, outside help is available if needed and if proper planning is done to qualify for those programs.
When someone’s spouse needs nursing home care, the first fearful question of the healthy spouse is, “Will I lose my home?” And, fortunately, the answer is no, You will not lose your home. Why is this the answer? Because Federal Medicaid law has provisions to prevent the impoverishment of the spouse who still lives at home. Connecticut’s regulations follow that law and specifically exempt certain assets which the healthy spouse is allowed to keep.
Clients often ask, “Isn’t it a good thing to have my bank accounts jointly owned with my children?” There is no simple answer, because it depends on the circumstances you face. Often, the question comes about in the context of “Will it let me avoid Probate?” The answer there is yes, but under Connecticut law that does not excuse the filing of an Inheritance Tax Return. There is no tax if you are below $3.5 million, but that does result in a small Probate fee.
It is now official in Connecticut, that if your husband or wife needs nursing home care, you can protect not only the family house, plus about $110,000, but also a significant amount above the $110,000 by buying an immediate annuity with special conditions. This came about on August 11, 2010 in a Federal Court decision, Lopes v Starkowski. The State of Connecticut has decided to appeal the decision, so there is some degree of uncertainty. But if successful, all Connecticut residents, in a husband and wife situation, could keep extra assets, above and beyond the $110,000 previously allowed.