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  • Writer's pictureJenny Rozelle, Host of Legal Tea

Cautionary Tales - Failing to Plan is Planning to Fail - Episode 9

Hey there, Legal Tea Listeners –This is your host, Jenny Rozelle. I’m joined today with a special co-host, Justin Schuhmacher. Today’s episode of Legal Tea is a cautionary tale – a real-life case with real-life people with real-life facts; though names are altered for confidentiality purposes! Today’s specific topic centers around … the wonderful saying from Benjamin Franklin (it’s one of my faves), “Failing to plan is planning to fail.” Repeat it for me, Justin!

So let’s talk about how that saying plays out in my little estate/elder law world…and to do that, we’re going to talk about the Smith Family. Justin actually helped with Smith Family, so he's going to chime in with some comments/thoughts throughout this episode. We’ve got Joe and Jan, as husband and wife – and Joe and Jan had one child, Tim. Joe and Jan were in their 80s while Tim was in his 50s.

You see, Jan had pretty advanced dementia and Joe and Tim had come into our office to talk about their options as they discuss placing Jan in nursing home care. In case you didn’t know, long-term care is crazy expensive. It’s actually much of what elder law actually is. I have a lot of people ask me what elder law even is – clients will say, in the conference room, to me, “What’s elder law? Helping old folks like me?” Well, kind of…

More respectfully put, much of elder law consists of helping families navigate their options on paying for home health care and long-term care (like, assisted living, nursing home, etc.). Around here in Indiana (which we have a pretty reasonable/low cost of living in this state), home health care costs depends on how much you need a professional caregiver there – as they often charge hourly. About $20-$30/hour usually. So, that’s usually $3000-$5000 a month if you’re needing someone around 40/hours a weeks.

Assisted living is usually in that same ballpark. Somewhere in the $3000-$5000 a month range. Skilled nursing (often called nursing home care) is usually in the $7000-$10,000 a month range. Keep in mind these are Indiana ranges – and just the average costs I professionally see. I’m certain places such as California and New York are considerably more expensive!

So yes, this the elder law side of our practice … families come in concerned about how to afford long-term care. It’s pretty rare I see individuals with long-term care insurance; while it certainly helps down the road when we DO need care, many people don’t move forward with it because of its cost (it’s pretty expensive!), its reputation (in the past, long-term care insurance was thought of as “you could pay all this money and never use it!” but there are new, better products nowadays), OR you can’t medically qualify (perhaps you have some condition that makes you ineligible for it).

For those reasons, in these conversations, long-term care insurance is usually off the table. Then, we are weighing the option of either 1) private paying (and that may mean the person runs out of money) or 2) structuring assets in a way to qualify for governmental benefits like Medicaid.

THIS is exactly what Joe and Tim were talking about in our office (with Justin!) regarding Jan – Jan did not have long-term care insurance and they wanted to know their options on qualifying for Medicaid. The good news is that there was a way to structure Joe and Jan’s assets in a way to get her pretty quickly qualified for Medicaid – what that consisted of, however, was moving a majority of the assets over to Joe’s name alone. We were able to accomplish this because there are very different rules in Medicaid law for married couples, than for single individuals.

Fast forward some time, Jan goes into nursing home care because Joe just couldn’t truly give her the best care at home anymore. We worked out little elder law magic and got Jan qualified for Medicaid, so they don’t have to private pay those arm-and-a-leg prices! Anytime after we get someone of a married couple qualified for Medicaid, we always encourage the “healthy” one (here it was Joe) to create or update their estate plan. For Joe, he didn’t have a Will or anything – so he needed to get something created.

Specifically, this is because mostly all of the assets are hanging out in Joe’s name alone now – and if he were to unexpectedly pass, we don’t want assets freely going over to Jan’s name because she would get kicked off of Medicaid. All that work … for nothing. So, that’s what we did – we immediately started to encourage Joe to get his estate plan created … and we tried again …. and we tried again … and once or twice more. No response.

My world is filled with “You can lead someone to the water, but you can’t make them drink it” moments. Joe never got back to us about his Will. Tragically and COMPLETELY unexpectedly, Joe passed away. And like I’ve been blabbing about … he had no Will when he passed away.

We’ve learned from past episodes that passing away without a Will means that we’re going by the intestacy laws – and those laws say that ½ of the assets go to the spouse (Jan) and ½ go to children (Tim). I’m sure you’re thinking, “Oh thank goodness not everything went to Jan!” Well, you’re probably thinking that because you think that’s where the story ends … but it doesn’t!

So, let’s continue…(I promise this is a real story, guys!)

Okay, Jan is entitled to ½ of the assets – and she’s going to get kicked off Medicaid, which has completely reversed what we worked so hard on. At this point, because we are dealing with Medicaid law for single individuals, Jan will not be able to immediately go back on Medicaid and she’ll have to private pay.

And Tim is entitled to the ½ of his Dad’s assets (according to those intestacy laws). Well, the crazy twist in this story is that we only learned about Joe’s passing because the nursing home that Jan was at, called our office to tell us that they heard Joe passed away … and that Tim, the son, passed away too. What?!

Because the theme of this episode is “failing to plan” … Tim did not have a Will either. So, the intestacy laws state that his estate goes to his parents – that is, his assets are going to Jan. In super long-story-short fashion, everything is coming back Jan’s way – all of Joe and Jan’s assets and Tim’s assets. Everything.


What makes my heart hurt is that they paid us to get Jan on Medicaid (and we did), then we had to take Joe’s Estate through probate (legal fees) and had to take Tim’s Estate through probate (legal fees) …. And it somehow doesn’t stop there. Jan, remember she had dementia, had to have a professional guardian appointed for her because everyone in her Power of Attorney had passed away AND she was not of sound mind to execute a new Power of Attorney. Again, read: professional guardian = fees.

If I can be so simplistic, there was a path that 1) would have gotten Jan on Medicaid, 2) kept Joe’s Estate out of probate, and 3) kept Tim’s Estate out of probate. But for reasons we may never know, that’s not the path the Smith Family took. And they paid for it. Literally.

Next week’s topic is a current event/current trend -- something I’ve seen or run across that I think would be interesting on here. Next week, we’re going to be talking about something a team member of mine stumbled across on TikTok! You know that app where people dance, where you learn life hacks, or heck… where you come across something that involves my world.

Anyway, next week we are going to be talking about a young couple named Josh and Maegan – they, along with Josh’s mother, appeared on Dr. Phil. For my older listeners, Josh and Maegan’s story is a modern-day Terri Schiavo case. For my younger listeners, look up Terri Schiavo if you’ve never heard of the name.

Until next time, Legal Tea Listeners…talk soon!



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