What Is a Will?

Most people have a general idea of what a last will and testament is—a document that says who-gets-what from the estate of a decedent.

Historically, a “Will” was a document that “devised” the decedent’s real property, for instance, his home. A “testament” was a document that “bequeathed” the decedent’s personal property (such as furnishings, money).

Nowadays, the phrase last will and testament or Will is used to identify a document that passes any of the decedent’s property after his death, both real and personal. Similarly, the words “devise” and “bequest” have become interchangeable and are simply the verb used to identify the passing of property from the decedent to the beneficiary of his estate.

In New Jersey, our Probate Code, which is the series of statutes that govern the administration of estates, only defines the word “devise,” not bequest. A devise is a verb used to describe the act of disposing of real or personal property.  While it is common practice in a Will to say “I give, devise, and bequeath,” only the word “devise” is defined in our statutes.  Our Probate Code only defines the word “Will,” not testament.

The Supreme Court of New Jersey has held that no document, even a document in the decedent’s own handwriting, can be considered his Will unless the decedent intended the document to be his Will. In other words, in order for a document to be a Will the decedent must have had “testamentary intent” at the time he wrote the document and must not have revoked the document before his death.

In order for testamentary intent to exist, the decedent must have understood who his family was and what his assets were. A person who cannot identify his family members or does not understand what his assets are cannot make a Will because such a person lacks the ability to form testamentary intent.

The decedent must also be able to develop a plan for disposing of his assets. In other words, if the decedent lacked the ability to say who-gets-what in his Will, then the decedent lacked testamentary intent and the document purporting to be his Will is not his Will.  The decedent, without the aid of others, must have been able to develop the plan for disposing of his assets as specified in his Will.

In my opinion, the document is called a “Will” because it is an expression of the decedent’s free Will. If someone else told the decedent what to say in his Will, then the document does not represent an expression of the decedent’s free Will.  There is a lot of litigation alleging that the decedent was unduly influenced to say something in his Will.

Finally, the decedent must have understood that he was signing his Will at the time he signed the document. If the decedent didn’t understand that he was signing his Will when the document was signed, then the document is not his Will.

As with a claim of undue influence, there is also a lot of litigation claiming that the decedent lacked testamentary capacity when he signed the Will, and therefore, the document is not the Will of the decedent.

A Will is an ineffective document until the decedent dies. During his life, the document that he signed purporting to be his Will is not a Will but a Will-in-waiting.  A statute says that a Will is ineffective to transfer property or to nominate an executor until such time as the Will is admitted to probate.  Another statute says that a Will cannot be admitted to probate until ten days after the death of the decedent.

An individual can revoke a Will at any time prior to his death. An individual can revoke his Will in several ways.  He can revoke it by any act of revocation, for instance, by tearing up the Will, by burning it, or by making a mark on the Will that evidences an intent to revoke the Will.  An individual can also revoke an old Will by signing a new Will that indicates an intent to revoke the old Will.

A Holistic Approach to Long-Term Care

In my opinion, it’s important for a lawyer to specialize in a given field.  When a client asks me about another area of the law (such as family law or bankruptcy law), my ability to advise them properly is greatly diminished.  I tend to only know those other areas to the extent those areas of the law affect my area of the law.

On the other hand, when a client asks me a question about elder law, I tend to either know the answer or know where I can find the answer to the question.  Over my sixteen years of practicing in the elder law field, I have developed a network of attorneys throughout the state and, even, throughout the country to whom I can turn when faced with a difficult question of elder law.  I’m confident enough in my knowledge of elder law to know when I need the help of my fellow elder law attorneys on a given question.

Being a lawyer, I like to focus on the law.  Sometimes, a client will ask me a question that I think is better suited for a geriatric care manager.  A geriatric care manager is a social worker who specializes in providing care to and arranging care for elderly individuals.

Sometimes, elder law and care management are so closely related for the client that it is difficult for the client to see the distinction.  Where dad receives his care and how he pays for that care may be so interconnected to the client that the client might not see the difference between the two issues—but there are distinctions as surely as there are distinctions between a surgeon and an anesthesiologist when it comes to performing surgery.

Let’s say a family comes to me looking to qualify the father for Medicaid while preserving assets for the benefit of their mother who will remain at home.  The family needs to make appropriate care arrangements for the father, and they are uncertain if his care needs are best served at home, in an assisted living residence, or in a nursing home.  In short, they want to make sure both the mother and father have a method of supporting themselves in the most appropriate environment.

When it comes to paying for long-term care, there are two primary methods of payment—private payment and Medicaid.  Private payment simply means that the client pays for his own care from his own funds.

Medicaid is government payment program that will assist with the payment of long-term care costs.  If a person qualifies for Medicaid, Medicaid will pay for nursing home care or a home health aide.

My practice involves qualifying individuals for the Medicaid program.  I have extensive knowledge of the relevant portions of the Medicaid Act that relate to a person’s qualification for benefits.  I have assisted thousands of clients in qualifying for the Medicaid program.

I do not assist clients with arranging for proper care.  If a client has a question about the appropriate care setting—home, assisted living residence, or nursing home—then I would suggest that the client contact a geriatric care manager to arrange for that care.

Geriatric care managers can ensure that the client receives appropriate care in the most appropriate setting.  A care manager can help the client in selecting a nursing home or assisted living residence that is right for the client or can help arrange for home health aides to care for the client at home.

Overlaps in the two fields can occur when attorneys hire social workers to work at their firm as part of their practice (I do not have social workers who work for me) or when geriatric care managers assist clients in applying for Medicaid.  I think it’s fine if a care manager applies for Medicaid for a family; however, like I do with my practice, I think it is important for everyone to know their limitations.

Because Medicaid is a complex law, I believe in cases in which the family is seeking to maximize their savings, consulting with an attorney in the Medicaid planning process can produce the best result for the family.  As a lawyer might hire a care manager to work in his firm, care managers should not shy away from referring families to elder law attorneys to develop a proper Medicaid plan.

The Best Advice Money Can Buy

I think one of the biggest sources of trepidation that people have in seeing a lawyer is the perception that attorneys are expensive.  When a family member requires long-term care, such as care in a nursing home, many people forgo necessary legal advice because they believe obtaining advice from a lawyer will cost them a great deal of money, despite the fact that they are paying the nursing home $10,000 a month, or more.

For most of the services I provide, I charge a flat fee.  The client is informed of the charge before any work is performed and the price never goes up.  For instance, if a client retains my services to assist them with obtaining Medicaid eligibility, I will quote the client a flat fee and that is the fee I charge.

In the past two years, I have seen a number of new companies open that assist individuals with the Medicaid application process.  These companies are not law firms and cannot provide legal advice.  These companies advertise themselves as “Medicaid experts.”  They typically charge about $5,000 to assist an individual with applying for Medicaid, which is about the same fee that I charge my clients (slightly higher than my fee, actually).

Nursing homes often refer family members to these companies.  In fact, I have had a number of people come to my office and tell me that the staff at the nursing home told them that they had to use one of these firms and that the family could not use the services of an attorney.

When one company—the nursing home—insists that an individual use another company—the Medicaid advisor—it concerns me. Why would a nursing home insist that a resident use a specific company to apply for Medicaid?

I think nursing homes perform a difficult job, and for the most part, I think the staff at nursing homes perform their jobs well. It is difficult taking care of older and disabled people who have a tremendous amount of cognitive issues and physical needs.  These individuals deserve to be treated well and with dignity, but from a practical standpoint, it is a very hard job that most nursing homes perform well.

With that said, nursing homes aren’t charities. They are in business to make money, and there is nothing wrong with that concept.  Nursing homes should be paid for their services, and their staff probably deserve more money than most of them are paid.

But when a nursing home appears eager for a resident to use another business’s services, I think you should always ask yourself what is in this referral for the nursing home, because the nursing home is a business, and like all businesses, it is in business to make money.

Medicaid is a very complex law. I have been working with the Medicaid program for 16 years.  I have written a book on elder law.  I have presented numerous seminars to attorneys.  Yet, I can tell you that there are many things about the Medicaid program of which I am unaware.

I have seen retainer agreements from non-attorney Medicaid advisor companies. I have heard the advice that they have provided to “clients.”  In my opinion, what these firms say is, if you pay us $5,000, we will apply for Medicaid for you; we do not promise that you will qualify for Medicaid and we do not know if you will qualify for Medicaid.

I have seen instances where these firms have failed to inform a client of a common Medicaid planning technique that would have saved the family tens of thousands of dollars. In fact, I believe that what many of these firms fail to tell the family is worse than the advice they give the family, which is often flawed.

Ironically, the family is paying these non-attorney Medicaid advisors more money than they would pay for my services. Here’s the truth—I am in business, I like making money.  But I also like saving people as much money as I can save them.  That is why I have won a Super Lawyer Award in Elder Law for six consecutive years and why I won a Five Star Wealth Manager Award twice.

When people come to me, they are my client, no one else, and my loyalty lies only with them, not the person who referred them to me. I like referrals, but I put out my own ads (such as this article) because I don’t want to be beholden to any person other than my client.

Spendthrift Clause

Last week, I wrote about the adoption of the Uniform Trust Code in New Jersey.  I believe that New Jersey’s adaptation of this uniform law will be very good for this area of the law. The Trust Code will bring clarity to a complicated area of the law that interests a great number of people.

A trust is a fiduciary relationship in which one person (or entity) holds assets for another individual (or entity).  A fiduciary is a person who has a duty of utmost care to hold assets for the benefit of another individual, typically called the beneficiary.

People often use trusts in their estate plans.  For instance, when planning for his death, Mr. Smith might want to leave his daughter’s share of his estate to a trust for the daughter’s benefit.  The daughter might have problems with drugs or might spend money to excess.

A trust would enable some other person, for instance, Mr. Smith’s son, to hold the daughter’s inheritance and to pay out the inheritance to the daughter in orderly increments.  Furthermore, the father could put a “spendthrift provision” in the trust that he created for his daughter’s benefit.

A spendthrift provision prevents the daughter’s creditors from reaching the assets in the daughter’s trust while those assets remain in the trust.  So, if the trustee continues to hold the assets in the trust, then a creditor of the daughter, who may even have a judgment against the daughter, cannot reach the assets in the trust that are being held for the daughter’s benefit.

As long as the trustee doesn’t distribute money from the trust to the daughter, her creditors cannot reach the assets of the trust.  If the daughter needed something (such as food or clothing or education or a vacation), the trustee could simply pay for those goods and services directly to the provider of those goods and services.  In this way, the daughter would never have the money from the trust in her name and her creditors could never reach the money, yet the assets of the trust could be used to pay for the goods and services that the daughter needs/wants.

A spendthrift provision could also protect the assets being held in the trust from any entanglement in the daughter’s possible divorce.  If the daughter were ever to get divorced, the money being held in a spendthrift trust could not be entangled in the daughter’s divorce.

So, the question might be, Why doesn’t everyone create trusts for their children?  Such a trust would protect the assets from creditors and divorce.  In fact, the Uniform Trust Code has a provision that allows the daughter to serve as sole trustee of her own trust and still protect the assets of the trust from her potential divorce or creditors.

The Trust Code was enacted into law about two weeks ago.  Before the enactment of the Trust Code, it was unclear if the same person could be sole trustee of a trust for her benefit and beneficiary of the trust and still receive the protection of a spendthrift provision.

Now that this concept has been codified into law, would I recommend trusts for children with more frequency?  Should most of my clients establishes trusts for their children in order to protect their inheritances from potential creditors or the potential for divorce?  I would say no.

I believe that people find trusts confusing.  Unless a person has real issues (for instance, drugs, alcohol, disabilities, or habitual credit problems), then creating a trust that will last the remainder of their life (when the individual might be 40 or 50 years of age) is overkill.

Moreover, I believe trusts have the potential of causing tensions where none exist.  For instance, assume that the daughter has been happily married for 20 years when Mr. Smith dies, but Mr. Smith created a trust for his daughter of which the daughter is the trustee and the reason Mr. Smith created this trust is to protect the assets from the daughter’s husband just in case the daughter gets divorced.  How do you think this makes the husband feel?

Also, assuming the daughter did get divorced, it would be wise for the daughter to resign from her role as trustee and allow the successor trustee, perhaps her brother, to serve as trustee. Now, the daughter must ask her brother for money, which tends to cause tensions between the brother and sister.

The bottom line is, trusts can be great, but only if there is a real need for the trust, not just because there’s a possibility something might happen. There’s a possibility I might win the Powerball, but it’s not likely.