FAQs

The short answer is “no”. If an estate is insolvent (meaning more liabilities than assets) creditor’s claims will be paid proportionately based on what is available for payment to creditors after all other estate expenses. The type of claim filed will also dictate how much the claimant will receive. For example, administration expenses are paid first as level 1 claims, then funeral expenses as level 2 claims, then Federal debts and taxes as level 3 claims, hospital bills for the last 60 days prior as level 4 claims, and creditor claims falling near the bottom as level 8 claims. It is important to note that, with some limited exceptions, creditors must timely file a claim in the probate court if they want to collect. If there are not enough funds to satisfy all the claims, then the unpaid claims are compromised to what can be paid and the rest of the debt does not get paid. This is similar to discharging debt in a bankruptcy.

No. Creditors will often contact the surviving family members with letters that may appear to be collection letters and leading the family members to believe they are responsible for the debt. Surviving family members are not legally responsible for this debt or any portion of debt left unpaid due to lack of assets after probate.

The Florida statutes provide an order of preference as to who may act as personal representative, starting with the surviving spouse, then the one nominated by a majority in interest of the heirs, then the kin closest in relation, and if more than one, then the one best qualified.

Like with any legal undertaking, there is no one answer and is dependent on a number of factors. Some of the factors include size of the estate, whether a will is involved, whether the family members are cooperative or disagree on matters, how many creditors’ claims are involved, and whether any suits have been filed against or on behalf of the estate. A consultation with one of the attornerys at Allen Law, P.A., P.A. can help provide you with a general idea.

The personal representative is responsible for gathering all the assets, notifying creditors of the decedent’s death, paying all the valid debts of the estate, and distributing the remaining assets to the heir in accordance to the terms of the will or, if the decedent died without a will, according to the intestacy statute.

An exempt asset includes the homestead property of the decedent, two vehicles (with a gross weight of 15,000 pounds for each) that was regularly used by the decedent and the decedent’s immediate family members as a personal vehicle; qualified 529 plans for prepaid college; up to $20,000 of furniture, furnishings and appliances located in the decedent’s residence on the date of death; and specific death benefits provided by section 112.1915 of the Florida Statutes to teachers and school administrators if their death occurs due to an intentional act while preforming their duties. A court must determine that assets are exempt, and in some situations, there are deadlines for filing for such court determinations.

Non-exempt assets are available to pay the costs and claims of administration and are paid out in a specific order based on a hierarchy of such costs and claims provided by statute. The person who is responsible for the administration of a loved one’s estate should refrain from paying out any estate funds until they seek proper guidance from an attorney. They do not want to cause an inadvertent legal problem if a claimant who has priority to the estate funds does not receive that which they should have received.

Yes. Consider establishing a Special Needs Trust and then making a devise into that trust for his/her benefit. This will provide her with certain “luxuries” that her government benefits do not cover and help her enjoy a better standard of living. And because the trust will be established by a third party (meaning you), you can name beneficiaries to the remainder that is left after the original beneficiary passes. It is important, however, that none of the disabled child’s assets are placed in this trust, or the remainder must first go to the government to repay for benefits paid out on behalf of the disabled child before any remainder is paid to the other beneficiaries.

An attorney who draws up wills as part of his/her practice will be familiar with the formalities that are necessary to have a valid will. Further, an attorney who takes the time to understand your goals with the disposition of your estate after your death can draft the will with the appropriate language to meet your goals. The language used in a will to devise a gift can make the difference between a gift lapsing (no longer available to be made) or being replaced. This can lead to a smoother process in probate of your estate, minimizing conflict between family members, and thereby costing your estate and your loved ones less money.

In Florida, unless you are divorced or there is a pre or post-nuptial agreement in place where you spouse has waived his or her right to your property, in most situations you cannot cut out your spouse. A spouse may then take against the will and demand an elective share of your estate. This is equal to 30% of all probate and most non-probate property. You may also be able to reduce or eliminate the spouse’s elective share by executing an Elective Share Trust.

There are no guidelines on how long a divorce will take as it depends on many factors. Of course, a divorce where both parties agree can move as quick as the courts will allow given the number of cases in their system. Divorces that are contested, and/or involve children take much longer, and have even been known to drag on for years.

There are three parts to a divorce action: the marriage itself, the property, and the children. The marriage is sometimes referred to as the res, and the res travels with each spouse. If the spouse meets the residence requirements, a spouse may divorce another spouse who lives in a different state. If the property of the marriage resides in Florida, then the courts can obtain jurisdiction over the property so it may divide the property between the parties. If the property is located elsewhere, it will be necessary to have the property issues resolved in that state. There are also jurisdictional issues that arise with child custody and child support that a court must take into consideration. If a court does not have jurisdiction over an issue, it cannot decide as to that issue.

There are instances where a court can impute income to a spouse that does not work where that spouse is voluntarily underemployed or unemployed, and it appears that there is no reason why they cannot be working at a level commensurate with their prior experience. This is a factual issue that the attorneys at Allen Law, P.A., P.A. can help you address.

Generally, eligibility for Medicaid benefits is barred if the individual seeking Medicaid assistance for nursing home, hospice, or home and community based services or Waiver program for assisted living has income that exceeds $2,205 a month (for 2017) and more than $2,000 in “countable” assets. For couples who both need these benefits the limits are $4,260 in income and $3,000 in countable assets. All assets are counted against these limits unless the assets fall within the short list of “non-countable” assets.

You can spend down your assets to bring them within acceptable limits. Spending down assets may consist of the person converting countable assets into non-countable assets, such as a new car (no matter what the value), an irrevocable burial contract, a burial account in a bank, and a life insurance policy of limited value. Spending down may also mean sinking countable assets into home improvements to the applicant’s homestead, including such things as new appliances, flooring or a new roof, or even paying down or paying off a mortgage. Other spend down techniques are available, but can be complicated. It is wise to seek the advice of an attorney who specializes in Medicaid planning, such as the attorneys at Allen Law, P.A., P.A., before undertaking any Medicaid spend down, so that you have peace of mind that you are doing what is in the best interest of your loved one. Be wary of Medicaid planning companies or individuals who are not attorneys. The Florida Supreme Court has opined that many aspects of Medicaid planning is the practice of law, and an individual who holds themselves out as a Medicaid planner and is not an attorney may be engaging in the unlicensed practice of law.

An attorney can help you establish a Qualified Income Trust, also known as a “(d)(4)(B)” or “Miller” trust. The Medicaid applicant who is over income limit for Medicaid eligibility can take advantage of using this trust so that they can still qualify for Medicaid. The applicant’s income is paid into the trust each month, then the trust provides provisions as to how the income is expended. Funds retained in the trust from one month to the next is considered an asset and that asset cannot exceed the asset limit of the trust beneficiary while that beneficiary is receiving Medicaid benefits.

Transfers of income or resources may affect eligibility if they are made within 60 months from the date that a Medicaid application is filed, therefore it is important to consult an Elder Law attorney to determine if there are other means that may be employed to transfer or spend down income or resources, but which will allow the applicant to maintain eligibility for Medicaid or SSI. This also applies to transfers for less than fair market value to become Medicaid eligible (for example selling a vehicle or real property for less than what it could be sold for on the open market in an arm’s length transaction). The period of ineligibility is determined by aggregating any large gifts or transfers made during the 60-month period and using a divisor into the total to come up with the number of months a person will be ineligible for benefits from the date Medicaid is applied for. Currently this divisor is $8,662. It is important to report any gifts or transfers to the attorney who is working on the Medicaid planning so it can be taken into consideration as part of the Medicaid plan.

Anyone determined ineligible due solely to transferred income or resources cannot qualify for nursing facility payments; however, the individual may still qualify for other needs based Medicaid coverage (e.g., medicines, hospital coverage, etc.).

In general, all the patient’s monthly income less the cost of any premium for supplemental insurance and $105 for personal needs, must be paid to the nursing facility for the patient’s care. This includes any funds deposited into a qualified income trust. The payment to the facility is called the “patient responsibility”. In some cases, where a community spouse or dependents exists, all or part of the patient’s income may be set-aside for the spouse and/or dependents, reducing the amount the individual must pay to the nursing facility each month.

Medicaid pays the difference between how much the patient pays (patient responsibility) and what the nursing facility charges under Medicaid.

The Medicaid law provides special protections for the spouse of a nursing home resident to make sure she has the minimum support needed to continue to live in the community.

The so-called “spousal protections” work this way: if the Medicaid applicant is married, the countable assets of both the community spouse and the institutionalized spouse are totaled as of the date of “institutionalization,” the day on which the ill spouse enters either a hospital or a long-term care facility in which he or she then stays for at least 30 days. (This is sometimes called the “snapshot” date because Medicaid is taking a picture of the couple’s assets as of this date.)

In general, the community spouse may keep one half of the couple’s total “countable” assets up to a maximum of $120,900 (in 2017). This is called the “community spouse resource allowance”. The community spouse may have assets in their own name that is in excess of the resource allowance; however, there are additional documents that must be filed with the Medicaid office at the time of application.

In all circumstances, the income of the community spouse will continue undisturbed; he or she will not have to use his or her income to support the nursing home spouse receiving Medicaid benefits. If most of the couple’s income is in the name of the institutionalized spouse, and the community spouse’s income is not enough to live on, the community spouse is entitled to some or all of the monthly income of the institutionalized spouse. How much the community spouse is entitled to depends on what the Medicaid agency determines to be a minimum income level for the community spouse. This figure, known as the minimum monthly maintenance needs allowance or MMMNA may range from a low of $2,003 to a high of $3,023 a month (in 2017), based upon whether the community spouse is entitled to excess shelter costs and utility allowance. If the community spouse’s own income falls below his or her MMMNA, the shortfall is made up from the nursing home spouse’s income to the extent possible.

For 2017 the income limit is $2,000 in assets and $2,205 for income.

Yes. Having a Qualified Income Trust will provide a means to handle a person’s income that is over the limit. The attorneys at Allen Law, P.A. can help with the execution of that trust.

If your parent (or loved one) has executed a Durable Power of Attorney with specific language granting the proper authority, then yes. If you are unsure whether the Durable Power of Attorney provides that authority, the attorneys at Allen Law, P.A. can review your Durable Power of Attorney to see if the authority exists and if it is specific enough.

If your parent (or loved one) has not executed a Durable Power of Attorney, Guardianship should be established for them. A guardian can then seek the authority from the court to enter into Medicaid planning.

It would be wise to include your siblings in the Medicaid planning process, or alternatively, make sure that the plan includes a component that does not totally bypass an existing estate plan. To do otherwise could invite unwanted litigation from a sibling over the way Medicaid planning was conducted.

There are a number of businesses and individuals out there that are not attorneys who provide Medicaid planning assistance that have aligned themselves with some nursing homes. Although these providers can help with the application process, they should not be advising and assisting with the execution of Medicaid planning documents and should be referring you to an attorney. If they are not referring you to an attorney and helping you with the execution of legal documents, the Florida Bar has issued an opinion that it is the unlicensed practice of law and they should be reported. With that said, you do not have to use the nursing home’s recommendation and you may certainly want to seek out your own counsel.

It varies depending on the complexity of the Medicaid plan and the value of the assets that the Medicaid planner is helping you with. Some Medicaid planners will charge a percentage of the assets, where others will charge based on the savings that result from not having to pay the private pay rate of a nursing home.

• Real property, other than homestead
• Bank accounts, Certificates of Deposit (CDs), Money market funds
• Stocks, Bonds
• Trusts
• Life insurance cash value if the face value of the policies owned on any incurred individual totals more than $2,500 (exclusions is $1,500 for SSI recipients)

• Homestead, if the individual or a dependent lives there, or if the individual is absent but intends to return
• Vehicle (one is excluded)
• Burial funds up to $2500 (or $1500 for SSI recipients);
• Irrevocable pre-paid burial contracts; and
• Life insurance, if the total face value of all policies owned by the individual for any one insured does not exceed $2500 (exclusions is $1500 for SSI recipients).

All gross monthly income is generally counted, including:

• Social Security
• Veterans Administration (VA)
• Pensions
• Interest
• Income from mortgages
• Contributions, etc.

  Note: Gross income includes the amount deducted from the individual’s Social Security check for the Medicare premium before their account is credited (or the check is mailed to them).

Certain transfers are allowable. The applicant/recipient may transfer:

• Any resource to a spouse of disabled adult child
• The homestead, without penalty, to one of the following relatives:
  • His/Her spouse
  • His/Her minor child (under 21 years) or his blind or disabled adult child
  • His/Her sibling who has equity interest in the home and resides there at least one year prior to the client’s institutionalization
  • His/Her son or daughter who resided in the home for a least two years immediately before institutionalization and who provided care that delayed the client’s institutionalization

Under certain conditions, a dependent allowance may be deducted from the institutionalized individual’s income.

Any person who is 18 years of age, has not been convicted of a felony, or who has a history of physical abuse or crimes of dishonesty. A court may also consider the character of the person seeking to serve as guardian, and look to that person’s credit report to determine their fitness to handle the financial affairs of the Ward.

Yes, it is possible to have two people act as co-guardians, or to even divide up the guardianship where one person acts as guardian of the property and the other acts as guardian of the person. There are pros and cons to each situation where more than one person is being considered to act as guardian that is highly dependent on the facts of each case that the attorneys here at Allen Law, P.A. are happy to discuss during the initial consult.

In most cases, yes. If you will not be acting as guardian of the property in any form, then a credit report may not be necessary. They use the credit report to determine your ability to handle the financial affairs of another; however, poor credit does not necessarily equate to a person not being appointed if there is good cause for the derogatory information on a credit report (i.e., loss of job, divorce) and it appears that efforts were made or are being made to correct the issues.

A surety bond may be required of the Guardian of the Property where a Ward has liquid assets. The bond is usually tied to the value of the liquid assets at the time a guardian is appointed. The court will not issue Letters of Guardianship until such time that a bond is filed with the court in the amount the court requests. The value of the bond can either be increased or decreased based on the change in value of those assets during the course of the guardianship and as established by the annual report. The cost of the bond is a reimbursable expense from the ward’s estate.

It depends on several factors. First, did the Court that had jurisdiction over the Guardian and Ward grant permission to move the Ward? Second, did the court in the state in which the guardianship was established use a proceeding similar to the State of Florida to determine the Ward’s incapacity? And third, did the court orders finding the Ward incompetent/lacking capacity clear as to such findings and delineate the rights removed from the Ward and delegated to a guardian? If the answer is yes, then a Florida court is more likely to give the orders from the other state full faith and credit, and issue new Letters of Guardianship; otherwise, proceedings for a determination of incapacity and appointing a guardian will likely need to be undertaken. Any one of our attorneys here at Allen Law, P.A., can help assess the situation to determine the most efficient means to establish a guardianship here in Florida. Call for a free consultation.