Medicare

 

Medicare is a health insurance plan for people who are 65 or older. Medicare has two parts—hospital insurance and medical insurance. Most people have both parts.

 

Hospital insurance, sometimes called Part A, covers inpatient hospital care, care in skilled nursing facilities, and certain home health care and hospice care.  You already have paid for it as part of your Social Security taxes while you were working. Medical insurance, sometimes called Part B, pays for physicians' services, outpatient hospital care and miscellaneous services that are medically necessary.  Part B is optional and there is a monthly premium for Part B.

 

Medicare does not provide payment for purely custodial care; the intent is to cover only skilled nursing or rehabilitation services. For the skilled nursing services, admission must occur within 30 days of a hospital stay lasting at least three days and the facility must be certified by Medicare.

 

Most Medicare recipients purchase a Medicare Supplement (Medigap) policy, which is private health insurance, to pay for the deductibles and coinsurance payments due.  Some pay for additional services which Medicare specifically excludes (e.g. outpatient prescription drugs).  Although the policies are issued by insurance carriers, coverage must conform to government standardized models, known as Plans A through J.  There are windows of time during which carriers must accept an applicant regardless of his or her medical insurability. 

 

Medicare Part D

Medicare Part D is the Prescription Drug Plan now offered to Medicare recipients.  The plan is being administered by private insurance plans that are reimbursed by Medicare.  Participants have to enroll in the plan unless they qualify for Medicaid.  Annual enrollment periods for Medicare Part D begin on November 15th of the prior plan year.

Dozens of Medicare prescription drug plans are available, allowing one to choose a plan that best meets their needs. Medicare has made available an interactive online tool called the Prescription Drug Plan Finder that allows for comparison of drug availability and costs for all plans in a geographic area. The use of this tool is essential in order for people to make an informed choice considering the actual costs for each plan.

 

 

ESTATE PLANNING

 

 

 

INTESTATE ESTATE DISTRIBUTION

 

Dying intestate (without a will) is estate planning’s worst-case scenario.  If you die without a will (intestate), in Texas, the state will write one for you.  This is known as the laws of descent and distribution.  Your estate will be responsible for the costs of searching for your heirs, and for the legal costs of an attorney appointed by the court.  Usually, the court will also appoint an administrator to handle your estate, and the administration will be a dependent administration; meaning that the administrator is subject to court supervision in the administration of your estate.  The administrator must apply to the court for every action the administrator wishes to take. 

 

Quoting the Texas Probate Code:

 

§ 38. PERSONS WHO TAKE UPON INTESTACY.  (a) 

Intestate[0] 

Leaving No Husband or Wife. Where any person, having title to any 

estate, real, personal or mixed, shall die 

intestate[0], leaving no 

husband or wife, it shall descend and pass in parcenary to his 

kindred, male and female, in the following course:

        1. To his children and their descendants.                                      

        2. If there be no children nor their descendants, then to his 

father and mother, in equal portions.  But if only the father or 

mother survive the 

intestate[0], then his estate shall be divided into 

two equal portions, one of which shall pass to such survivor, and 

the other half shall pass to the brothers and sisters of the 

deceased, and to their descendants;  but if there be none such, then 

the whole estate shall be inherited by the surviving father or 

mother.

        3. If there be neither father nor mother, then the whole of 

such estate shall pass to the brothers and sisters of the 

intestate[0], 

and to their descendants.

 

QTIP Trust

 

Consider establishing a Qualified Terminable Trust in order to satisfy the unlimited marital deduction while maintaining a controlled environment for the ultimate beneficiaries of the principal placed in the trust.  All interest generated however, must be distributed to the survivor during her lifetime.

 

 

Your wills and trust agreement must be designed by your attorney to carry out your objectives in accordance with the local statutes.  Care must be taken so that full advantage of and qualifying for the marital deduction, applicable to any separate property you may own, can be achieved.

 

 

PARENT WILLS

 

Consider having your parents create a Revocable Family Trust with pour over wills for their respective estates.

 

Consider executing and holding a durable power of attorney for each of your parents in order to facilitate the transfer of income or assets to the revocable family trust in the event of illness or incapacity.