What Do I Really Need to Know About Trusts?

A trust is an agreement between two parties, the settlor and a trustee. Trusts may be used for many purposes, and one is for the trustee to accept, manage and protect assets delivered by the settlor, administer those assets according to the trust’s instructions and distribute the trust income and principal, according to the trust only for the benefit of those named in the trust.

Kiplinger’s article “Trusts 101: Why Have a Trust?” explains that the trustee is a fiduciary and must act with reasonable care in administering the trust and selecting trust investments. She also must avoid any conflict of interest or self-dealing in holding, purchasing and selling trust assets, and diligently avoid breaching any of the trustee’s duties to the settlor and beneficiaries.

The trustee must follow the trust terms. She must also be wise in making investment and administrative decisions and be objective and transparent.

Trusts can be created for several reasons, such as the following:

  • To oversee spending and investments to protect beneficiaries from poor decisions;
  • To avoid court-supervised probate of trust assets;
  • To allow for privacy;
  • To shield trust assets from the beneficiaries’ creditors;
  • To keep premarital assets from a division of assets between divorcing spouses;
  • To earmark funds to support the settlor, when incapacitated;
  • To manage unique assets that aren’t easily divisible, such as a vacation home or a pet;
  • To manage closely held business assets for planned business succession;
  • To hold life insurance policies, pay premiums and collect the tax-free proceeds to care for beneficiaries, fund closely held stock redemptions or purchases and provide liquidity to the estate;
  • To provide structured income to a surviving spouse that shields trust assets for descendants, if the spouse remarries; and
  • To decrease the amount of income taxes or to shelter assets from estate and transfer taxes.

A trust can be set up to achieve specific goals and give tools for the trustee to balance those goals with investment and economic factors.

The most common type of trust is a revocable trust or living trust. It’s usually not funded until your death. The trust will include your instructions for how you want your estate divided among your beneficiaries and how each person’s share or interest in the trust is managed, administered and distributed. Living trusts are flexible, so that as children grow into adulthood, you may make changes to reflect life events.

Talk with an estate planning attorney and create your estate plan with a will and a trust.

Reference: Kiplinger (June 11. 2019) “Trusts 101: Why Have a Trust?”

Why is an Advance Directive so Important with Dementia?

The Roanoke Times advises in the recent article “What to do in absence of advance directive” to talk to an experienced elder care attorney to coordinate the necessary legal issues, when dementia may be at issue with a parent or other loved one. Next, ask your physician for a geriatric evaluation consultation for your loved one with a board-certified geriatrician and a referral to a social worker to assist in navigating the medical system.

It’s wise for anyone older than 55 to have advance directives in place, should they become incapacitated, so a trusted agent can fulfill the patient’s wishes in a dignified manner. Think ahead and plan ahead.

As a family’s planning starts, the issue of competence must be defined. A diagnosis of Alzheimer’s disease doesn’t necessarily indicate incompetence or a lack of capacity. At this point, a patient still has the right to make a decision—despite family members disagreeing with it. A patient’s competency should be evaluated after a number of poor choices or an especially serious choice that puts a patient or others at risk.

An evaluation will determine the patient’s factual understanding of concepts, decision-making and cogent expression of choices, the possible consequences of their choices and reasoning of the decision’s pros and cons. Healthcare professionals make the final determination, and these results are provided to the court.

If a patient passes the evaluation, she is deemed to have the mental capacity to make choices on her own. If she cannot demonstrate competency, an attorney can petition the court for a competency hearing, after which a trustee may be appointed to oversee her affairs.

The time to address these types of issues is before the patient becomes incapacitated. The family should clearly define and explore the topics of living wills, health care proxies, estate planning and powers of attorney now with an experienced elder law attorney.

Taking these proactive actions can be one of the greatest gifts a person can bestow upon herself and her loved ones. It can give a family peace of mind. If you put an advance directive in place, it can provide that gift when it’s needed the most.

Reference: Roanoke Times (June 17, 2019) “What to do in absence of advance directive”

Do I Qualify for Medicare if I Get Medicaid?

If you are a Medicaid recipient, you might be wondering do I qualify for Medicare if I get Medicaid?

Being enrolled in Medicaid does not automatically make you eligible for Medicare. You will have to meet the Medicare program requirements to enroll in that system of benefits.

Medicare and Medicaid have different qualification requirements, but it is possible to be dual eligible. In other words, to qualify for both programs. If you qualify for both, you do not have to choose one or the other. You can be in both programs, if you meet all the requirements for them.

How to Qualify for Medicare

Usually, people can enroll in Medicare if they are:

  • 65 or older, or
  • A person younger than 64 who has a disability, or
  • A person of any age who has End Stage Renal Disease (permanent kidney failure for which you need dialysis or a transplant).

You can get Part A of Medicare (hospitalization or inpatient services coverage) without having to pay any premiums at age 65 or older if:

  • You or your spouse worked for at least ten years at jobs that paid Social Security taxes, or
  • You currently receive Social Security or Railroad Retirement Board retirement benefits, or
  • You qualify for Social Security or Retirement Board benefits, but you are not yet collecting them, or
  • You or your spouse worked for the government in a Medicare-covered job.

How to Qualify for Medicaid

Unlike Medicare, which has one set of eligibility rules that apply equally to everyone in the United States, regardless of where they live, Medicaid programs are different in every state. You can get vastly different benefits in one state, as compared to another. The Medicaid eligibility rules differ from one state to the next. You might qualify for Medicaid if you live in California, for example, but not qualify if you move to a different state.

Eligibility for Medicaid depends on the size of your family and your income. Every state has to provide Medicaid health benefits for some low-income people, families and children, the elderly, pregnant women and people with disabilities. The Medicaid programs in some states cover all adults whose income is below a certain level.

The eligibility rules for Medicaid have changed, so if you were turned down before, you should look into enrolling now. Some states have also added new benefits to their Medicaid programs, so you should check to see if you can get more services.

Medicaid provides medical care for free or at a reduced cost. The program helps low-income and disabled people get the medical services they need but could not otherwise afford.

How Dual Enrollment Works

If you qualify for both programs, Medicaid can help you access the medical care you need by paying the premiums, deductible, coinsurance and copayments for your Medicare insurance and services. The Medicaid programs are different in every state, so you should check to see what benefits your state’s Medicaid system offers.

In addition to covering many of your out-of-pocket costs, Medicaid can serve as your secondary insurance. Your doctor or hospital will bill Medicare first. Whatever Medicare does not pay, your health care provider will bill to Medicaid.

If you are dually eligible, you are automatically enrolled in a prescription drug assistance program, called Extra Help. If you take prescription medications, make sure you are using this valuable program.

Every state has different regulations, so be sure to talk to an elder law attorney in your area. This article covers the general law.


HHS. “Who is eligible for Medicare?” (accessed June 19, 2019) https://www.hhs.gov/answers/medicare-and-medicaid/who-is-elibible-for-medicare/index.html

HHS. “Who is eligible for Medicaid?” (accessed June 19, 2019) https://www.hhs.gov/answers/medicare-and-medicaid/who-is-eligible-for-medicaid/index.html

Centers for Medicare & Medicaid Services. “Dual Eligible Beneficiaries Under Medicare and Medicaid.” (accessed June 19, 2019) https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/Medicare_Beneficiaries_Dual_Eligibles_At_a_Glance.pdf

Medicare Interactive. “How Medicaid works with Medicare.” (accessed June 19, 2019) https://www.medicareinteractive.org/get-answers/cost-saving-programs-for-people-with-medicare/medicare-and-medicaid/how-medicaid-works-with-medicare