Cecil Harvell and Wes Collins of Harvell and Collins discussed common and costly mistakes in long-term care and estate planning, emphasizing the importance of proper legal counsel to avoid issues like Medicaid liens, lost wills, and inadequate powers of attorney. They highlighted the complexities of transferring assets, especially real estate, to qualify for government assistance without triggering penalties, and stressed the need for updated and detailed legal documents to protect clients' interests. The speakers encouraged listeners to seek professional legal advice early to safeguard their assets and ensure effective estate management.

1. Mistakes in Long-Term Care and Assisted Living Planning

• Discussion on common mistakes in managing assets to qualify for long-term care or assisted living assistance.

• Importance of understanding gifting rules, especially the tax basis issue and the five-year look-back rule for Medicaid qualification.

• Transferring property without proper legal advice can lead to sanctions and loss of benefits.
  [01:30]

2. Medicaid and Property Liens

• Explanation that Medicaid may place liens on improperly structured properties after benefitting from long-term care payments.

• The need for proper estate planning, such as transferring property into trusts, to avoid liens and preserve assets for heirs.

• North Carolina being an estate-only recovery state, do not seek recovery against trusts if properly structured.

• Ability to transfer real estate to a trust during the lifetime without triggering the Medicaid five-year look-back rule.
  [09:45]

3. Financial Burdens of Long-Term Care

• Rising costs of assisted living, nursing care, and in-home care were discussed.

• Many families face financial hardship, and long-term care insurance often only covers limited terms or is too expensive.

• Combined legal and insurance planning is recommended to protect assets and provide care assistance.
  [19:15]

4. Lost or Missing Wills

• Addressed the issue with lost original wills creating complicated legal challenges.

• Importance of keeping the original will secure (e.g., in a vault or safe deposit box).

• Probate courts presume lost originals were destroyed, making probate difficult without the original document.

• The firm holds original wills in a secure vault and emphasizes not losing or altering the original wills.
  [24:50]

5. Power of Attorney Documents

• Many clients bring in inadequate or incomplete power of attorney forms, often internet-sourced or from non-specialized lawyers.

• Need for detailed durable power of attorney documents that specifically grant broad powers, including creating or modifying trusts and handling investments.

• Financial institutions often require detailed powers of attorney to avoid liability and may reject generic forms.
  [33:30]

6. General Thoughts on Planning and Legal Costs

• Lawyers and legal services are expensive, but good legal planning is often worth many times the cost.

• Failing to plan effectively can lead to significant financial loss and legal difficulties for families.

• Legal advice should be sought early, while one still has capacity. Planning ahead greatly increases the chance of a positive outcome.
  [38:00]