Glossary

WHAT IS ELDER LAW?

Helping clients understand the "lingo"

Maybe you heard a "buzzword" floating around regarding your plans or your loved one's care.

People come to us every day with words like Fiduciary, Living Trust and 5-Year Look-Back Period. But do you really know what these terms mean? Paths Law Firm is dedicated to educating our clients so they are more informed and in control.

A

Administrator:

When someone dies without a Will, an Administrator is appointed by the probate court to administer the probate estate. The Administrator may be required to post bond and will need to file reports with the probate court. This term is not commonly used anymore in Missouri as Personal Representative is the more common global term used.

Advanced Directive:

A written and signed statement of a person’s wishes regarding their future medical treatment. These instructions are made in advance of their later inability to communicate. This is often used interchangeably when referring a Living Will, but also includes a power of attorney for health care decisions.

Annuity:

Is a contract wherein a person agrees to deposit a sum of money with a financial company and that company agrees to pay it back over time.

Assisted Living Facility:

A type of living arrangement providing twenty-four-hour care and protective oversight, including personal care services such as meals, housekeeping, transportation, and assistance with activities of daily living as needed for people who otherwise still live on their own. In most cases, residents pay a regular monthly rent and additional fees for additional services.

Attorney-in-Fact:

A person (who doesn't need to be a lawyer) authorized by another person for either a particular purpose or for the transaction of business in general. This authority is conveyed by written and signed document called a “power of attorney.” The document itself is the power of attorney. The person acting for the principal is the attorney-in-fact.

C

Codicil:

This is referring to the document that makes a change, modifies, or revokes a previously written Last Will and Testament.

Community Spouse:

The healthy spouse who does not require Medicaid services. The spouse is entitled to the Community Spouse Resource Allowance (CSRA).

Conservator:

One appointed by a court to have the care and custody of the income and assets of a minor or a disabled person when that person cannot make such decisions due to an illness, incapacity, or disability.

D

Decedent:

A person who died.

Disabled:

As used in elder law, and guardianships more particularly, refers the condition of a person who is unable by reason of any physical, mental, or cognitive condition to receive and evaluate information or to communicate decisions, so much so, that a judge believes that person lacks the ability to manage their financial resources.

Durable Power of Attorney:

A written document given by one person to another authorizing that person nominated to act on behalf of the first person. The person nominated may be referred to as the agent or attorney-in-fact and acts as a substitute decision maker for the purposes listed by law or in the Durable Power of Attorney itself. These matters may include financial and property decisions or health care decision. If the document is “durable,” as defined by law, the authority granted continues even though the person signing it later becomes incapacitated. Authority granted in all powers of attorney terminates upon the death of the principal, i.e. the one signing the durable power of attorney.

E

Elder Law:

A more specific area of law focusing on the needs common to seniors, elderly, or incapacitated persons. Some of the areas of elder law are more commonly described as estate planning (wills, powers of attorney and trusts), Medicaid planning, and guardianship.

Estate:

This is a very general term describing all the assets owned by a decedent or a ward and all their liabilities.

Estate Tax:

A tax calculated after a person dies based on the value of their estate. It’s quite complicated, but a person doesn’t usually need to worry about it unless their estate (and large gifts made before they died) exceeds $11.4 million per individual dying in 2019. That means an individual can leave $11.4 million to heirs and pay no federal estate or gift tax.

Executor:

The personal representative named in a Last Will and Testament to oversee the probate process for the decedent’s estate.

F

Fiduciary:

A general term used to describe a person or institution who manages money or property for another. Fiduciaries include personal representative, guardian, conservator, attorney-in-fact, and trustee.

G

Guardian:

A court-appointed individual or agency in charge of the care and custody of the person of a minor or of an incapacitated person.

Guardianship:

A legal process involving the Probate Court in which one person (ward) has been found by the judge to be incapacitated or disabled to such an extent he cannot manage his or her physical well-being. The guardian is responsible for taking care of the ward. The court appoints the guardian through a hearing.

H

Heirs:

Those persons, including a surviving spouse, who are entitled by law to the property of a decedent when he or she didn’t have a valid Last Will and Testament when they died.

I

Incapacity:

One who lacks the ability, physical, to receive and evaluate information or communicate decisions so much they cannot manage their essential requirements for food, clothing, shelter, safety or other care such that serious physical injury, illness, or disease is likely to occur.

Incompetent:

For the purposes of elder law, see Incapacity.

Independent Administration:

When a will admitted to probate authorizes or directs independent administration, either by specific reference to this section or by language providing that the estate be administered without adjudication, order or direction of the court, the letters testamentary shall provide that the personal representative therein named may administer the estate independently if the probate has no reason to judge otherwise. When a will admitted to probate prohibits independent administration, expressly or by language manifesting intent that the estate be administered under court supervision, the directions of the will shall be observed. When all of the heirs interested in an estate consent to independent administration, and the Will does not prohibit it, Letters also may provide that the personal representative may administer the estate independently.

Inter-vivos:

It is a Latin phrase that means “while living,” that is, from one living person to another. This is commonly used to describe when property rights transferred; while the parties were living, or after someone died.

Intestate:

A term used when a person dies without a valid Last Will and Testament, so their estate passes to heirs based on the laws of the state in which they lived when they died or the state where the real estate is located.

Irrevocable Trust:

A trust in which the person starting the trust (the Grantor) has not kept the power to revoke or change the trust agreement. In the more common “living trust” used for general estate planning, the Grantor keeps the power to change beneficiaries and other terms of the trust agreement.

J

Joint Tenancy:

Sometimes also referred to as “Joint Tenants with Rights of Survivorship.” A form of legal co-ownership of property. At the death of the first co-owner to die, the surviving co-owners hold title together and the heirs of the first co-owner to die have no interest in the title, no matter provisions made in a Last Will and Testament of the deceased co-owner. This is true for all co-owners who die, except the last co-owner. Upon the death of the next to last co-owner to die, the sole surviving of all the previous owners becomes sole owner of the property and the property interest will pass according to the provisions made in their Will.

L

Letters of Administration:

This is a physical document issued by the probate court evidencing an Administrator’s authority to take control of a deceased person's assets. This control usually requires presentment of Letters and the death certificate.

Letters Testamentary:

This is a physical document issued by the probate court evidencing the Executor’s authority to take control of a deceased person's assets. This control usually requires presentment of Letters and the death certificate.

Living Trust:

A revocable trust, sometimes casually referred to as a “Living Trust,” is a trust by which the terms of the trust allow the Grantor to revoke or terminate the Trust. In more unique planning situations, a beneficiary could be given the right to revoke the trust. If a beneficiary has special needs, it is important to make sure that beneficiary cannot revoke the trust. If they can revoke the trust, its assets will count toward that beneficiary’s eligibility for public benefits.

Living Will:

A document instructing relatives, loved ones, physicians, to withhold or withdraw all or specifically designated extraordinary measures, such as a ventilator, to extend one’s life in the event of a persistent vegetative state or terminal illness.

Long-Term Care:

This is the phrased used when one will require assistance, to varying levels, with their personal care needs. Assistance is required for one’s activities of daily living (ADLs), which include: bathing, dressing, toileting, transferring, and eating. Other ADLs include housework, managing money, storing and administering medication, shopping, using the phone, caring for pets, and responding to emergencies.

Look-Back Period:

This refers to the length of time looking backward in which a government agency will consider transfers without fair value received (i.e. gifts). This “look-back” occurs when a person applies for Medicaid, VA, and certain other benefits. Gifts made during the look-back period usually generate a penalty period or length of time the donor is disqualified of benefits.

M

Medicaid:

This is the federal term for a government health insurance system. The system administered in Missouri is called MO HealthNet. This is not the same benefit as Medicare. Medicare is an entitlement for seniors and disabled persons. Medicaid, is a health system for low asset and low income persons.

Medicaid Compliant Annuity:

Is a single premium immediate annuity (SPIA) that has no cash value and provides equal monthly income payments to the owner. Properly structured, this annuity functions as a spend-down tool that eliminates excess countable assets, allowing the nursing home resident to become eligible for Medicaid benefits. There are specific requirement that must be present in the annuity contract in order for it to comply with Medicaid laws, thus qualifying the annuity not be considered an asset, but counted as income.

Medicare:

This refers to the federal health insurance program for those over 64 years of age and certain disabled persons. This is an entitlement program that pays for certain health care expenses.

P

Per Stipes:

This too is a Latin phrase translated as “by roots.” This is also commonly seen as lineal descendants per stirpes, or ldps. It refers to how property rights pass when an heir or beneficiary dies before another person. If something is to pass per stirpes, it means that property that would have passed to the heir or beneficiary who died before goes to that predeceasing beneficiary’s lineal descendants. An example is if Alfred has two children (Normand and Kevin), and one of those children (Kevin) predeceased Alfred, then Kevin’s share or the item that was to go to Kevin goes to his children equally. In the end, Normand receives one-half, and Kevin’s one-half is equally shared by his two children. A per capita (Latin meaning “by head”) distribution wherein Normand would receive one-third and each of Kevin’s children would receive one-third.

Personal Representative:

This is a gender neutral term used to describe an Executor or Administrator and other types of administrators of the estate of a decedent.

Power of Attorney:

A document wherein a person (known as the principal) appoints another (known as an Attorney-in-Fact or agent) to manage the principal’s affairs. If covering business or financial matters, the document may be titled as a General Power of Attorney or a Durable Power of Attorney. The authority granted in a Power of Attorney terminates when a principal revokes it, dies, or becomes incapacitated. The Attorney-in-Fact’s authority will terminate when a principal dies, but if the Power of Attorney is “durable,” it remains effective after the principal loses capacity.

Probate:

The personal representative named in a Last Will and Testament to oversee the probate process for the decedent’s estate.

Public Administrator:

Is a county official who is appointed by the judges of the circuit court or elected by the county’s citizens, depending on the particular county. He or she is a public fiduciary the court may appoint as a person’s guardian, conservator, or personal representative.

R

Refusal of Letters:

In certain cases, the probate court can “refuse” to grant letters and allow the surviving spouse (or unmarried minor child) to transfer property title. This can be useful for a surviving spouse (or unmarried minor children) for statutorily exempt property or for creditors when the estate is relatively small in value.

S

Skilled Nursing Facility (SNF):

A facility providing twenty-four-hour skilled nursing care and treatment services. Skilled nursing care and treatment services are those services commonly performed by or under the supervision of a registered nurse for persons requiring twenty-four-hours-a-day care. This includes observation, care and counsel of the aged, ill, injured or infirm, the administration of medications and treatments prescribed by a physician, and other nursing functions requiring substantial specialized judgment and skill.

T

Tenancy by the Entireties:

A form of joint ownership only between husbands and wives. Owning an asset as tenants by the entireties can be an effective form of asset protection against creditors.

Testamentary Capacity:

Basically, in order for a Last Will and Testament to be valid, the person making it must not be pressured (unduly influenced), not make a mistake in the Will, and they must have testamentary capacity. This describes the mental or cognitive ability to make a Last Will and Testament, durable powers of attorney, or various other estate planning documents. Essentially, if a person knows who their family members are and the relationships, generally what assets they own, and generally they can explain what the estate plan documents accomplish, they are more likely to be considered having testamentary capacity.

Trust:

This is really an agreement between a Grantor and a Trustee. In the agreement, the Grantor transfers asset titles to the trust and provides instructions on how those assets are to be managed; the Trustee agrees to manage the assets the way the agreement states. The Trust Agreement will provide terms and conditions on a beneficiary’s use (e.g., for education).