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Legal Notes: Are You Ready?

Attorney Pamela OddyAttorney Pamela OddyThe most difficult question that I often ask my clients when drafting an estate plan is not a legal question. It is a personal one; it is an emotional one. The question starts with the phrase “Are you ready . . .” and then is followed by “. . . to turn your house over to your children?”  Or “. . . to have your son or daughter make medical treatment decisions for you?” Or “. . . to let your son or daughter begin the process of taking control of your financial assets?” These questions are not really legal in nature but, rather, they are designed to ferret out whether or not the clients are ready to begin an estate plan that encompasses the gradual turning over of assets and control to the next generation.

A gift or outright transfer made outside of the five year look back period is not considered when applying for MassHealth benefits.

One of the biggest reasons to ask this question of readiness is because of the five year look back when it comes to MassHealth applications to pay for nursing home care. A gift or outright transfer made outside of the five year look back period is not considered when applying for MassHealth benefits. Therefore, it is always better to try to have the transfers and gifts made as early as practical. Hence the question: “Are you ready?”

Sometimes, the response I receive from my clients is very illuminating. For example, one spouse could respond by saying that she/he is absolutely ready to turn the house over to their children and has been ready for quite some time. The other spouse, however, has a different response because he/she is not ready, either to give up control, or to share control with their children. Sometimes, there may be an issue with a child as to divorce or a pending lawsuit or recent bankruptcy which gives the parent pause to turn over the house to the children (a trust might solve this issue). More often than not the reason the parent is not ready is because he/she is not ready to share control or give it up entirely. Fear of losing control is a huge factor in making these decisions. 

If no decision is made with the house, for example, it may be too late to make any kind of a transfer when faced with one of the spouses entering a nursing home because of the five year look back requirement. It is always better to make these decisions to transfer assets earlier rather than later.

But the answer always boils down to the question that begins with “Are you ready . . .?” So I ask my clients “Are you ready? What are you ready to do?” The estate plan lies within the clients’ response.

The views expressed in this column represent general information. To address your particular and specific needs consult your own attorney. If you need help with referral to an attorney, contact the Franklin County Bar Association at 413-773-9839 or the Worcester County Bar Association at 978-752-1311. Elder law resources may be found through the National Academy of Elder Law Attorneys, Massachusetts Chapter, at massnaela.com or 617-566-5640. Community Legal Aid (CLA) provides legal services free to people age 60 and older for civil legal matters with an emphasis on access to health care coverage (MassHealth and Medicare) and public benefits as well as tenants’ rights. A request for legal assistance can be made by phone at 413-774-3747 or toll-free 1-855-252-5342 during their intake hours (Monday, Tuesday, Thursday, and Friday from 9:30 a.m. to 12:15 p.m. and Wednesday from 1:30 p.m. to 4:15 p.m.) or any time online by visiting communitylegal.org.