This is a short presentation on The Alabama Small Estate Summary Distribution available for estates that include no real property and assets not exceeding $30,245.
It is estimated that 20 percent of Americans over 65 are in the work force. AARP calls the hottest demographic in the labor market to be those men and women working not only past traditional retirement age but into their 70s, 80s and sometimes beyond. So among the unemployed are seniors who found irreplaceable meaning in work and/or counted on their jobs to supplement inadequate retirement.
The COVID-19 pandemic has sent unemployment to its highest levels since the Great Depression, and older workers have been particularly hard hit. Many of those who continued to work beyond retirement age also draw Social Security benefits, and some are now being forced to take their benefits early after losing their jobs when doing so will permanently reduce the amount of benefits they can draw.
If you are already receiving Social Security, are you also eligible for full unemployment benefits? Until recently, the answer was not necessarily. Many states reduced unemployment benefits of those receiving Social Security retirement benefits by up to 50 percent, something called the “Social Security offset.” But after AARP and the National Unemployment Law Project pushed to have these laws overturned, this is no longer the case. In 2015 Illinois became the last state to repeal the Social Security offset.
“These two benefits are not duplicate payments,” the Law Project said at the time. “Older workers who must work or choose to work should not have their unemployment benefits cut or eliminated simply because they have reached the age to qualify for Social Security.”
So do not assume that you cannot draw Unemployment Compensation because you are at or above the traditional retirement age and draw, or could draw, Social Security. If you have lost your job you need to apply for Unemployment Compensation. Similar to Social Security, certain other “unearned” income you may receive, like annuities and investment income, do not count against receiving unemployment insurance. Only earned income affects unemployment benefits.
The Center for Medicare and Medicaid Services (CMS) has issued its Interim Final Rule Updating Requirements for Notification of Confirmed and Suspected COVID-19 Cases Among Residents and Staff in Nursing Homes. This is good news for people who are concerned about their relatives living in long-term care.
CMS will require nursing homes to report COVID-19 facility data to the Centers for Disease Control and Prevention (CDC) and to report to residents, their representatives, and families of residents in facilities. Failure to report in accordance with 42 CFR §483.80(g) can result in an enforcement action.
There have been some problems for Alabama residents trying to obtain information about infection rates in individual facilities despite the fact that it is reported that residents and staff members of long-term care facilities now account for about 13 percent of the cases in Alabama, and 100 deaths in long-term cre facilities account for more than a third of the state’s total deaths as of May 1. Since relatives have been unable to visit since March, a great deal of anxiety about the care of residents has increased.
In Alabama up until now staff are required to tell families if someone living or working at the facility has tested positive for coronavirus, but those facilities do not have to say how many cases have been reported. Greater transparency will benefit family members seeking to protect their institutionalized loved ones.
Pursuant to the CARES ACT (Coronavirus Aid, Relief, and Economic Security Act), individuals with income up to $75,000 for a single person or $150,000 for married and filing jointly are eligible to receive $1,200 for a single person or $2,400 for a married couple filing jointly. An additional $500 per qualifying dependent child under the age of 17 will also be provided to families.
For individuals who filed federal income tax returns in 2018 or 2019, you do not need to take any further action at this point. You will either receive the stimulus via direct deposit based on the information the IRS has on file or you will receive a physical check in the weeks to come.
More than 20 million taxpayers over the age of 65 do not file a federal income tax return each year – likely because their only source of income is Social Security benefits. For persons who may not have filed a 2018 or 2019 tax return, there does not appear to be clear directions at this time on how to ensure that they receive the stimulus. According to the CARES Act the filing of a tax return should not be necessary, and the payment could be direct deposited along with monthly benefit payments. However the IRS has issued a notice that appears contrary to the actual CARES Act indicating that seniors on Social Security will need to file a simple tax return (which has not been made available at the end of March). There is also discussion of a web based portal at the Treasury Department through which people could enter their information (this has yet to be designed or implemented).
Regardless of the mechanism which will be used for “non-filers” the IRS will have to have the Social Security numbers of all parties to include any dependent children in order to generate the stimulus payment as well as information on bank accounts for direct deposit.
At this point, if you did not file in 2018 or 2019 you may want to file a return either by hard copy or e-file. If you do not want to file the tax return for 2018 or 2019 you have the option to wait and see what action will be required of you. The stimulus payment is available through 2020, and tax payments for 2019 have been delayed until July, so you do not have to rush to file a tax return.
Be advised that the receipt of the stimulus payment will not be treated as a resource for one year and will not affect eligibility for federal means tested programs such as Medicaid, SSI or SNAP.
We will stay on top of this issue and continue to provide information as it develops in an effort to assure that all eligible seniors obtain their stimulus payments.
Here is a shout out to Alabama Governor Kay Ivey. She issued a proclamation yesterday including the following authorization for witnesses and notaries to perform their duties through videoconferencing:
“III. Notaries and witnesses
Because person-to-person contact increases the risk of transmitting COVID-19, I find that it would promote the safety and protection of the civilian population to adopt measures that reduce the necessity of in-person meetings. To that end:
A. Notaries in Alabama who are licensed attorneys or operating under the supervision of licensed attorneys may notarize signatures through videoconferencing programs and confirm signatures of witnesses who participate virtually through videoconferencing as though they were physically present at signing.
B. Any person who witnesses a document through videoconference technology may be considered an ‘in person’ witness, provided that the presence and identity of such witnesses are validated by the notary at the time of the signing by the same identifications required under current law.
C. The official date and time of the notarization shall be the date and time when the notary witnesses the signature via the videoconference technology. All documents must be returned to the notary for certification and execution.”
New times and new challenges call for new measures. I am glad to see Alabama stepping to the plate to make signing documents safer for the people of Alabama.
Our office is open for business, though things may look a little different these days. We are limiting in office appointments to accommodate plenty of distance and offering Zoom conferencing for those who either cannot or do not wish to leave home. We have years of experience conducting business over the telephone and email when those needing our services live at a distance or when caregiver children live out of state, so we are positioned to continue providing services during this time of social distancing. Contact our office if we can help in any way.
Sometimes the only property in an estate that is not jointly titled is a vehicle. To solve the problem of getting the vehicle transferred and to keep from having to open a formal estate administration, if the vehicle is paid off, the next of kin may file an Affidavit for Assignment of Title for a Vehicle from a Deceased Owner Whose Estate Does Not Require Probate(Alabama Department of Revenue MVT 5-6).
Title can be transferred by filing the affidavit at the tag and title office of the local probate court. If the vehicle is not paid off it will likely need to be refinanced, and the lender needs to be put on notice of the death.
To assist caregivers who are making arrangements for long term care a booklet concerning Alabama Medicaid is being made available to provide clarity for some of the issues that may arise and to provide basic information about the application process. The booklet is made available here and will remain available in the Publications section of our website. It can be read online or downloaded and printed.
The Veterans Administration has a federal and state program addressing health care needs of veterans and provides an option for long-term care.
There are four VA nursing facilities in Alabama:
- Bill Nichols State Veterans Home in Alexander City;
- William F. Green State Veterans Home in Bay Minette;
- Floyd E. “Tut” Fann State Veterans Home in Huntsville; and
- Col. Robert L. Howard State Veterans Home in Pell City.
In the VA system State VA and Federal VA contribute toward the charged rate, leaving the veteran responsible for the remainder. Actually this VA system is a highly affordable nursing home care option after the state and federal government provide subsidies.
In 2019 the out of pocket cost for care in the VA facilities in Alexander City, Bay Minette and Huntsville is $355.02 per month, and the out of pocket cost for care in the Pell City facility is $732.
The average wait for a bed is four to five months for Alexander City; six months for Bay Minette; three to four months for Huntsville; and two to three years for Pell City.
In July 2019 The Alabama Department of Veterans Affairs announced plans to build an additional $60 million veteran’s home on 27 acres in one of nine Southeast Alabama Wiregrass counties. The new nursing facility will provide care for 150 – 175 elderly veterans and will be located in either Barbour, Butler, Coffee, Covington, Crenshaw, Dale, Geneva, Houston or Pike County.
The VA is required to provide nursing home care to any veteran who needs that level of care because of a service-connected disability, has a combined disability rating of 70 percent or more or has a disability rating of at least 60 percent and is deemed unemployable or has been rated permanently and totally disabled. Other veterans in need of nursing home care will be provided services if resources are available after the priority groups are served.
You don’t really have to spend down all your resources to qualify for nursing home Medicaid. There are multiple ways to preserve funds. One of those ways is through the use of what I call the Medicaid Spend Down Special Needs Trust.
Usually persons who need nursing home care end up needing Medicaid to pay for that care. Why? Because it is so expensive. Nursing home care can cost between $6000 and $8000 depending on the specific market area in Alabama. At $7000 per month, the average nursing home resident will spend $84,000 in a year. Under these circumstances, most persons will exhaust their resources at a rapid rate rendering them unable to pay for the care they need without the assistance of Medicaid.
There are some funds a married couple can preserve for the spouse who remains at home, but there is still an amount that has to be spent down if a couple has countable assets over $25,000. A single person has to spend all of his or her resources down to $2000 before he or she can qualify for Medicaid. Using up the assets a person saved over a lifetime is known as the dreaded Medicaid “spend down.”
But what many people do not know is that there is a way to qualify for Medicaid to pay for nursing home care in Alabama without the resident having to go through a complete “spend down.” That is through the use of a pooled Special Needs Trust.
There are many types of Special Needs Trusts (SNTs), including trusts for disabled younger persons, disabled children whose parents and grandparents want to provide for their future needs, persons on public benefits who recover money from personal injury lawsuits or who inherit money when a relative dies. Each type of SNT has highly specific requirements. But what they all have in common is the goal of protecting funds for a disabled person without those funds resulting in the loss of public benefits.
With the Medicaid Spend Down SNT, instead of spending down the money required to be spent by Medicaid on nursing home care before eligibility can be established, the money is paid into a SNT and can then be used to pay for special needs not otherwise paid for by Medicaid for the disabled person once he or she becomes eligible. Medicaid eligibility can be immediately established while these funds remain available to pay for special needs for the nursing home resident.
The drawback to this type of trust is the requirement that, on the death of the person for whom the trust was established, Medicaid must be reimbursed from funds remaining in the trust up to the amount Medicaid has paid for the nursing home resident’s care. Still, creating a pool of money to meet the special needs of the nursing home resident after being awarded Medicaid is far better than simply spending down those funds before qualifying for Medicaid and leaving the resident with no resources to pay for special needs. Since Medicaid allows a nursing home resident to keep only $30 of his or her income each month to pay for personal needs, you can see how that is not enough to have needs met without families pitching in to help pay for necessary items.
An example of what the SNT funds can pay for is a private room in a nursing home since Medicaid will only cover a semi-private room. Other special needs might be items and services that can improve the quality of life for the nursing home resident such as hair salon charges, manicures, telephone, newspaper subscriptions, audiobooks, movies, recreation, medical and dental expenses not otherwise covered, special equipment like wheelchairs or specially-equipped vans; therapy or rehabilitation services; training and education, travel, electronic equipment including computers and mobile devices.
With a little planning the quality of life for a nursing home resident can be improved, and the burden for a family’s out of pocket expenses decreased.
Do not be confused with an internet search. The rules are different from state to state. Most states allow a person 65 and older to create a pooled SNT but still penalize transfers into that trust. That is not the case in Alabama.
Contact us for more information about establishing a Medicaid Spend Down SNT.