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  • Writer's pictureJenny Rozelle, Host of Legal Tea

Cautionary Tales - Leaning On An Attorney - Episode 12

Hey there, Legal Tea Listeners –This is your host, Jenny Rozelle! 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! With that introduction, we’re going to chat about a lady named, let’s call her Sally.

When I first met Sally, I knew we’d get along juuuust fine. I walked into the conference room to find her grabbing a pen out of the pen holder on the table – she looked up and said, “If I use this, is it going to cost me extra?” It was crystal clear she was just joking – Any person that wants to make a lawyer joke when I walk into the room, they’re going to be my friend! Being in this profession, you can either 1) take the jokes as they come and try to combat the lawyer stereotypes or 2) get offended and in turn, fuel those lawyer stereotypes. I choose to do the first option!

Sally made an appointment about her and her husband, let’s call him Tom. Tom was in the hospital not doing so well. At that time, neither her nor I knew how bad he truly was. More to come on that later… Prior to the hospital, Tom was in a long-term care community – specifically a nursing home – and he was on Medicaid.

Sally explained that they need to get some basic documents in place – probably a Will, Power of Attorney, and Health Care Proxy/Advance Directives. We talk through what documents they want, “who” is going to go where in the documents, and then start going through their assets to ensure their assets support the documents we are going to do. I looked down on the sheet she filled out, and noticed that she had listed the house as “joint.” In most situations, that’s fine – but I clarified with Sally, “You said Tom is on Medicaid at the nursing home, right?”

She confirmed that was the case. As I start poking for more information, she shared that she used a company that the nursing home had recommended to get him qualified for Medicaid. It was not an attorney – it was a company who put themselves out to the world as “Medicaid and Veterans’ Benefits Specialists.”

In most states, there are these type of companies – they’re often individuals that are NOT attorneys and they help families get their loved ones qualified for these types of governmental benefits. I’m not trying to harp on them nor am I trying to sound super cool because I’m an attorney – because in all honestly, there are times families can navigate the Medicaid/VA process without attorney involvement. Though, if a family is needing help, navigating the Medicaid/VA process is interpreting and practicing law – Medicaid and VA have rules … have laws. (Side note: The State of Florida has outlawed these type of companies because it’s their belief this is practicing law without a law license.)

Sally is a perfect example of this … unfortunately.

Did the company get Tom qualified for Medicaid? Yep. Did they look at things from a 50,000 overview to make sure everything was in good LEGAL order? Maybe, maybe not. The BIG issue is that their house should not be jointly-held at this point, since Tom is on Medicaid. Now I won’t bore you with the Medicaid rules, but within the Medicaid rules for married couples, the house needs to be moved over to the “healthy” spouse’s name. Maybe the company tried to tell her – and she didn’t listen. All I know is I wouldn’t have closed Tom’s file in my office, until their Ts were crossed and Is were dotted.

If a house is left in their joint names and the “unhealthy” spouse passed, Medicaid can technically recover what they’ve paid out on behalf of the “unhealthy” one by taking a lien against the house after the “healthy” spouse passes away. It is incredibly rare – though, the Medicaid rules allow for them to do this. If they allow it, I’d want to steer clear of it – even if there was an extremely remote chance Medicaid would catch on.

So here, if Tom passed away, the house is still jointly-held, and subsequently at some point Sally passes away – Medicaid has the authority to recover from the equity in the house. Will they? Who knows. I wouldn’t want to test it if it was my own family!

I’m glad Sally came into my office to see us – she thought she was coming in to talk about getting her and Tom’s documents in place. Little did she know, I’d discover something that was exposing her to some risk. So we get through that whole conversation about how to deal with the house being in both of their names (since that should have been done way-back-when the Medicaid company was helping them!), we then shift to their documents. Keep in mind Tom is IN the hospital.

These conversations should really happen before someone is in a nursing home, before someone is laying in a hospital, etc. I mean, that’s the point in these estate planning documents is to SUPPORT you during those tough times. Our normal turn-around time for documents is a couple weeks, but we didn’t have that kind of time, so I had to expedite their plan. We set a meeting for me to head to the hospital the following week to meet with both of them and get both their documents signed.

Guess what? A couple days later, I hear that Tom is not doing well – he’s taken a dramatic turn for the worse. A day later, Sally tells me that Tom has passed away. Their documents were drafted – they were ready to go, but Tom didn’t hold out until we could get them signed. Truthfully, with him being that close to death, he may not have even possessed the capacity – like cognitively-speaking – to execute the new documents.

It’s a classic example to not wait until the 11th hour to do these documents – I know the term “estate planning” brings a lot of icky topics in your head – death, incapacity, etc. – but it is vital. It is so, so important. Poor Sally – now, she’s picking up the pieces all while trying to grieve. That’s not fun – and that’s not fair. Sally should just be grieving – not worrying about this pesky lawyer to do this, and to do that … but they are the ones, after all, that chose to not do any planning. That was their choice…

Somehow, the story doesn’t end there… or maybe I should say “lesson.” The lessons from Sally and Tom don’t end there…

About a month after Tom passed away, Sally is in my office and now, since we didn’t get those estate planning documents signed, we’re having to completely restart. Because before Tom passed, she had listed Tom as her beneficiary, Tom as this, Tom as that … and now with him gone, those documents I had already drafted are no good. (Truthfully, I could have charged her 2x – after all, I’m having to do double-the-work now…but I didn’t. See, some lawyers have hearts, people!)

So now Sally is looking at things differently. Tom is out of the picture and she’s starting to look at her children to put in different roles – i.e., Power of Attorney, Health Care Proxy, etc. We get to chatting more in-depth about her kids – she’s got 2 and they don’t get along. Well, she shared this with me AFTER she’s listed the two kids as Co on things – so what that means, is that she wanted them to serve as Co-POAs, Co-Health Care Reps, etc. I said, “Sally – [keep in mind we have this kind of relationship at this point – we’re as thick as thieves. Always joking with each other!] why on earth are you putting these two as Co if they don’t even get along?!”

She said, “I don’t want them to think I picked a favorite.” Oh my…

Listen here, friends, if there’s another little tidbit to take away from this episode: There is no “default” person to list. That is, you don’t HAVE to list the oldest; you don’t have to list them in birth order; you don’t have to even list your darn kiddos at all if you don’t want to! When you think about these different roles, there are a number of factors to consider when selecting “who” to put in these roles. Like:

1. Can they make sound decisions based on facts? (Not emotions) 2. What is my relationship with them currently? 3. Where do they live? 4. Do I trust them? I mean it, do you trust them… 5. If you’re putting Co down, do they work well together? Communicate well?

If I can be somewhat overgeneralize, it’s usually the Momma Bears that are saying this – saying, “well, they’re the oldest, Jenny!” Or, “I don’t want them to think I’m picking favorites, Jenny!”

I promise you that these roles do not come with a blue ribbon or a ribbon that says along the side of it “You’re your parents’ favorite!” – it actually comes with a lot of work, a lot of sacrifice, a lot of time, etc. So, if anything, I make the joking comment often – “Stick it on the one you like the least!” [I’m clearly joking about that!]

Anyway, so after much discussion, Sally ends up switching things up a bit – not putting the kids as Co – and put them in order and roles that made much better sense. I think a lot of clients plop down and don’t necessarily think thoroughly about who they’re putting in what role – I use my own family as an example often to clients.

When I helped my own parents get their plan in place, we were sorting through who is in what role – like who is going to assist with health care decisions down the road if Mom/Dad can’t make them for themselves (due to incapacity) … or financial decisions if they can’t make them for themselves. My sister works at a hospital – and is much, MUCH more familiar with the clinical stuff than I am. So for that reasons, she is my Mom/Dad’s health-care decision-maker, if they can’t make their own decisions. She’s suited well for that position. Conversely, I’m their financial decision-maker because I’m familiar with this “legal” gobbly-gook, so I’m suited well for that position.

When it’s time to #DoYourEstatePlan, think thoroughly about things … think critically … the attorney you’re working with, so long as they’re within their wheelhouse practice area-wise, can make what you want to have happen … happen.

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. I usually try to drop a hint at the end of these episodes for what next episode is about – but as I sit here right now, next episode’s topic is TBD. So I guess it’ll just be a surprise! Until then, Legal Tea Listeners…talk soon!



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