This column first appeared in the San Antonio Express News and other Hearst Newspapers on December 21, 2020.
Dear Mr. Premack: My brother died of Covid-19 and he did not have a Will. His two children were able to get his bank accounts because they were named as beneficiaries. They also want to sell his house but are unsure how to get title. I don’t want similar troubles for my kids and know I should make a Will. How do I go about talking to a lawyer during lockdown? – W.I.
Your brother’s estate will be distributed according to whatever contractual arrangements he signed (like naming his two kids as beneficiaries on his bank accounts using a Pay-on-Death designation) and according to the state laws of intestacy. Dying without a Will leaves the huge unanswered question of “who is legally entitled to inherit?”
State law gives categories of family who are entitled to inherit, but it can be difficult to match individuals to those categories in a way that is legal proof of ownership. Sometimes an Affidavit of Heirship will suffice. Sometime a modest size estate can get the Probate Court to approve a Small Estate Affidavit. Sometimes the situation calls for a Judge to hold a hearing to determine the identity of the heirs.
Making your own estate plan during the pandemic is part of the new normal. Different estate planning attorneys have found different ways to keep you safe while keeping themselves and their staff safe. I know several attorneys who were lax in the early months and were stricken with Covid-19. Consequently, most estate planning attorneys will meet with clients by phone or video conference. Our office prepares drafts of all documents, sharing them securely via computer. Final documents are mailed, and clients make their own safety-first arrangements to sign the documents. Often, clients choose to create Trust Agreements (which are valid when signed) and holographic Wills (which are valid when handwritten). Talk to an experienced estate planner about their safety protocols, and don’t let the pandemic get in the way of protecting your estate and your family.
Dear Mr. Premack: My mother was taken ill with Covid-19. She was in the hospital for weeks in intensive care, then came home. She survived but never really got healthy again, and at age 84 her doctor says she is no longer safe at home alone. Her part of the hospital bills pretty much drained her savings, except for the IRA my dad left her which, along with Social Security is her only monthly income. The IRA is in an annuity. We need to move her to a nursing facility. Can we get all the money out of the IRA annuity to pay for her care? – T.E.
The transition to a nursing facility during the pandemic can be very difficult. In years past, you could visit potential nursing homes, talk to the staff and residents, and judge the potential quality of care. Now the facilities are not allowing most visitors unless they already have a loved one living there and can pass a health screening.
Additionally, your mother needs a nursing facility that will accept her as a Medicaid patient. If her resources have run low (the bottom limit is $2000) and her income is low enough (in 2020, below $2,349 per month) then she may qualify for Medicaid.
You ask about the IRA annuity your father left for her. It is making a monthly payment to your mother, which means that it has become an “immediate annuity.” Typically, an immediate annuity cannot be paid out in a lump sum after the monthly payments have begun. You should check with the insurance company that makes the payment to see what they say, and perhaps have your Elder Law Attorney review the contract.
On the other hand, Texas Medicaid currently excludes IRAs that are in pay-out status from being counted as resources. The annuity could have been worth way more than the $2000 limit, but because your mother is taking her RMD (required minimum distribution) its principal value is not a roadblock to qualifying for Medicaid. Unfortunately, the state decision to exclude IRAs from countable resources is not a formal written policy yet, so you could encounter confusion or even a contradictory decision from a Medicaid worker.
Paul Premack is a Certified Elder Law Attorney, handling Wills and Trusts, Probate, and Elder Law issues. He is licensed to practice law in Texas and Washington. View past legal columns or submit free questions on those legal issues via www.Premack.com.