[WSBAPT] One-Sided CPA and Step Up

[Joshua McKarcher]

Jacob,

I am not qualified to give you a consult, paid or otherwise, on real, actual Medicaid planning, so this email is worth what you’re paying for it. ;)

But it occurs to me that — among other issues, and even perhaps regardless of Medicaid — you have the wife (who is on Medicaid already I gather) making an instantaneous gift of her entire estate to her husband the moment before her husband dies. I don’t think that’s likely feasible, especially if she’s on Medicaid. Even her credit card company whom she pays off every month after charging expenses for cash back or airline miles or Starbucks points would have something to say about that magnanimous gift.

But on a higher level, I'm not sure what this agreement accomplishes that "doing nothing at all" doesn't already accomplish. To my understanding, if the wife died first with no document, step up occurs anyhow on all CP. Medicaid lien attaches, but it's not enforced until after husband dies. Assets are usable by husband within bounds of Medicaid during lifetime. After his death, Medicaid collects on wife's lien.

If husband dies first, I think maybe you just want his half of the estate going into some kind of special needs trust you're talking about, but probably on the understanding that it may be exposed to Medicaid recovery after her death.

But I don't know, because it seems that for her to be on Medicaid she would have had to have qualified in the first place, before all this planning is implemented, and at a time when her half of their estate was spent down or "whatever."

So, like I say, it seems possible that none of the above is worth much more than the bits and bytes conveying this electronic message. But, I tried, so you didn't just have silence bashing up against your excellent efforts! Now you know why I refer out all real, actual, live Medicaid planning! (It is all of those things, and like an alligator, can snatch you up and swallow you whole before you know it! Or at least leave you without a limb and wondering what on earth just happened.)

Good luck!

Best, Josh

Joshua D. McKarcher
McKarcher Law PLLC
537 6th Street
Clarkston, WA 99403
(509) 758-3345
(509) 758-3314 (fax)
josh at mckarcherlaw.com
www.mckarcherlaw.com<http://www.mckarcherlaw.com>
________________________________
From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> on behalf of Jacob Menashe <jacob at hickmanmenashe.com>
Sent: Wednesday, July 20, 2022 9:17 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] One-Sided CPA and Step Up

Hi again!

I’m curious if my post didn’t get a response because  what I am thinking about—a spousal agreement that goes one way or the other depending which spouse passes away first—is so far off base. If so, doesn’t anybody want to chime in about that? Also, as mentioned below, I am more than happy for someone to volunteer themselves for a consult on my query.

Thanks!

Jacob

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Jacob Menashe
Sent: Friday, July 15, 2022 3:35 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] One-Sided CPA and Step Up

Hi all,

I am thinking about a Medicaid situation where Sally is the one needing care. John is the community spouse, i.e., the spouse at home not needing care. In a scenario with a community property agreement that says:


  *   Assets are community property.
  *   If Sally, the Medicaid spouse, passes away first their assets pass per the CPA to John.
  *   But if John passes away first, everything becomes his separate property right before his death and nothing passes at death per the agreement. (Instead, his estate will flow throw his will and, as is desired, end up in the special needs trust for Sally).

Does anybody have a comment or experience to share about whether this is likely to accomplish both objectives—i.e., the community property step-up if Sally passes away first and the full funding of the special needs trust for Sally if John passes away first?

If someone has a lead on a response but it doesn’t translate well to a list serve response, I would be very happy to make this a paid consult to discuss my query. If someone is up for that, please feel free to respond to me, and my associate Mercedes Vargas (mercedes at hickmanmenashe.com<mailto:mercedes at hickmanmenashe.com>) directly.

Thanks!

Jacob

Jacob H. Menashe
Hickman Menashe, PS
4211 Alderwood Mall Blvd., Suite 204
Lynnwood, WA 98036
(425) 744-5658 phone
(425) 744-6078 fax
Satellite Office in Bellevue
www.hickmanmenashe.com

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