Preventing Your Children from Fighting Over Your Estate

When a person passes away, the executor of his estate must begin the process of administering his estate.  The basic steps of estate administration are submitting the Will to probate, gathering up the assets of the estate, paying the debts of the decedent, accounting to the beneficiaries, and distributing the assets of the estate to the beneficiaries.

Administering an estate is a lot of work.  It also involves the assumption of a lot a liability since the executor has a duty to perform his job with the utmost care.  What makes the administration of an estate even more difficult is when the beneficiaries are fighting.  But what makes beneficiaries fight and what can you do to reduce the likelihood that the beneficiaries of your estate will fight?

Sometimes it’s impossible to ensure the peaceful administration of your estate.  Some people just don’t get along and never will get along.  There are certain things, though, that make people fight more than others.

Ironically, tangible personal property—the “stuff” in your house—makes people fight more than any other asset.  Personal property, typically, has very little monetary value; in most cases, personal property has no monetary value.  For some reason—sentimental value, perhaps–families fight over tangible personal property more than any other asset.

Our law permits a person making a Will to create a tangible personal property list.  Through a tangible personal property list, a person can give away his assets without making mention of the property in the Will.

I’d recommend taking pictures of the items you wish to give away and numbering the pictures.  You can then create a list that says something such as “Item 1, diamond ring with gold band, goes to my son Joe Smith.”  You can keep the list and the pictures with your Will.

If you don’t create a list, then I’d recommend that your Will say that your executor is to divide the personal property equally among your children and that if your children cannot agree on the division of the property that the property is to be sold and the money divided equally among your children.  In this way, all of your children either agree on the division of the property or the property is sold.

You might have other methods of dealing with the division—drawing straws, pulling numbers from a hat, whatever.  The point is that you should develop some methodology for your executor to employ regarding the division of this property.  Your family might be able to handle the division of the property without issues, but I can assure you that if ten people are reading this article, one of their families would be helped by addressing the division of their personal property in a meaningful manner.

You can also ease the administration of your estate by consolidating your assets.  Many people have their assets spread out in multiple accounts.  Typically, the account balances are small.

If you consolidate your assets and have one or two accounts, you will make the administration of your estate easier, and you will cut down on the suspicion among the beneficiaries.  If Mrs. Smith dies and she had two accounts and all of her children know that she only has two accounts, then her children aren’t going to think that the executor is hiding assets from them.

A bit of preparation can go a long way to make the administration of your estate easier for your executor and reduce the likelihood that your children will fight over the administration of your estate.

Blocking the Needy

There has been a lot of talk coming out of Washington, D.C., in the past several months about making Medicaid a “block grant” program.  The new administration is telling us that by making Medicaid a block grant program they are giving more control over Medicaid to the states.  The States, the Administration tells us, are in a better position to administer their Medicaid programs and to weed out fraud and other abuses.

It’s interesting to me that when the government intends to give people fewer benefits, they talk about increasing people’s choices and giving more freedom to the states.  Make no mistake about it, though, turning Medicaid into a block grant program will result in fewer benefits for the people who need the program.  The amount of money allocated to the Medicaid program will drop considerably and benefits will be cut.

Assuming my statement is true, which I believe it to be, should you care?  Many people might say “Good!  I hope they do cut the Medicaid program substantially.  Bunch of deadbeats living off the government.”  Or, they might say “Good!  There’s too much fraud in the Medicaid program.  People getting benefits they don’t deserve.”

Reducing or eliminating fraud is something most of us can get behind.  Why should the government spend money (the money at least 55% of us pay in income tax) to scammers and frauds.  I can’t speak to whether or not there is widespread fraud in the Medicaid program, but from my perspective, I don’t see fraud.

When I apply for Medicaid for a client, my client has to provide the Medicaid office with five years’ worth of bank statements for every account that he owns or has owned.  My client has to certify as to any gifts that he may have made in the past five years.  The Medicaid office reviews my client’s documents for several months before approving my client for benefits.

After my client is awarded benefits, even years after my client is approved for benefits, the Medicaid office does cross-checks with the Internal Revenue Service to see if my client’s social security number shows up on any financial accounts that my client failed to reveal in the application process. If the Medicaid office finds any such accounts, the office sends a letter to my client asking him to explain why he failed to disclose the account.  In most cases, the account was a closed account that my client simply forgot to disclose, but the Medicaid office does find the undisclosed account.

So, do I see fraud in the Medicaid application process?  No.  I don’t.  Does that mean that there is no fraud in the Medicaid program?  No.  I’m sure there is some fraud, but I don’t believe that you should throw out a good program simply because there is some fraud.

Would allowing the various states wholesale control over their Medicaid programs equate to something better for the people receiving benefits?  I doubt it.  What it will amount to is Medicaid programs that vary greatly from state-to-state.  New Jersey’s Medicaid program and Arizona’s Medicaid programs will be so different, for instance, that they will be unrecognizable to the people being benefitted by the programs.

Does this make sense?  No.  My clients, for instance, need Medicaid to pay for their long-term care needs—care in a nursing home, care in an assisted living residence.  Someone needing care in a nursing home in New Jersey does not have vastly different care needs than someone needing care in a nursing home in Arizona, so why should the ability of a person in New Jersey to qualify for Medicaid vary so much from a person in Arizona.

Now, you might be someone who thinks, I don’t care. Medicaid is out of control and the costs need to be reined in.  To me, that’s an okay way to think, until, of course, you or someone you know needs Medicaid.  But at least it’s an honest way to think about Medicaid.  Saying that making Medicaid a block grant program is going to give more freedom to the states to administer their Medicaid programs is disingenuous.  Code phrases such as “more choices” and “states’ rights” are really just ways of saying fewer benefits to you and me and those we love.