(Photo Illustration - MetroCreativeConnection - Legal-Ease - Gerald W. Townsend)

Clients often say to me, “what does that word mean?” I always welcome those questions because the client really needs to know what the words we lawyers throw around mean. Otherwise, it is hard to understand how the client will understand his own legal plans. I tell clients, “If you don’t understand, be sure to tell me. If I know what I’m talking about (and I hope I do), I should be able to explain it to you clearly.”

Today, let’s look at some of the mysterious words of my Elder Law practice, which involves helping people plan for aging, nursing home care, and, ultimately, death.

* PROBATE: This is the name for the process in the county Probate Court after you die through which the ownership of your assets passes to your heirs. The steps include collecting your assets, paying your bills, and distributing your estate assets to those to whom you have left them. Probate applies only to what you own outright, not joint property, trust property, life insurance proceeds being paid directly to beneficiaries, or assets set up as “transfer upon death” or “pay upon death” to named others.

* WILL: Your will is a legally-binding written statement of who will receive your stuff at your death. It also designates a legal representative to carry out what your Will says you want done with your assets. However, the will only covers probate property (the stuff you own outright), not joint property, trust property, life insurance proceeds being paid directly to beneficiaries, or assets set up as “transfer upon death” or “pay upon death” to named others.

* ESTATE OR INHERITANCE TAX: Estate Taxes are taxes on the value of both your probate and non-probate assets. Ohio and West Virginia have eliminated these, but the federal government has an estate tax, although its threshold begins at over $13 million so it doesn’t affect most of us. Some states have Inheritance Taxes, which are a tax on the share each of your heirs or beneficiaries receive from your estate. Usually the tax rate in Inheritance Tax increases as the beneficiary or heir is more distantly or not related to you.

* TRUST: A trust is a legal entity which a person can create under which one person – the “trustee” – holds legal title to property for the benefit of others – the “beneficiaries.” The trustee must follow the rules provided in the legal document which creates the trust. An “irrevocable” trust is one that cannot be revoked after it has been created. A “revocable” trust is one that may be changed or revoked by the person who created it. Trusts are useful for tax planning, to provide for someone with expertise to manage assets (such as a bank trust department), or to shelter assets to protect them from creditors, or for nursing home planning. A Trust is a good way to set up assets to benefit a disabled person without interfering with his eligibility to receive other government benefits.

* DURABLE POWER OF ATTORNEY: A Durable Power of Attorney is a written permission paper in which you designate someone else (your “attorney-in-fact,” or “agent”) to act for you in the realm of your business, financial, and property matters when you cannot act for yourself. The reason may be your mental incapacity or your inability to be somewhere when needed. Traditionally, powers of attorney expired upon the grantor’s mental incapacity, which caused them to fail when you most needed them. In the last 30 years, all states have passed laws which say if the power of attorney says it is “durable,” that it remains valid even if the grantor becomes incapacitated, then it does remain valid. It is important for your power of attorney to be “durable.”

* MEDICAL POWER OF ATTORNEY (called “Durable Power of Attorney for Health Care” in Ohio): This is similar to a Durable Power of Attorney except that it deals with making decisions about your medical care and authorizes the person you have selected as your helper to make your medical care decisions for you only when your doctor says that you are incapable of making your own decisions. The real thrust of a Medical Power of Attorney is to enable you to get the care you need to get well, although you also can express your wishes to your helper about when and how much life support you want if you are on your deathbed.

* LIVING WILL: This is a close companion of the Medical Power of Attorney. A living will is not a paper that gives anyone else permission to act for you. It is your written statement, signed at a time when death is not staring you in the face, that when your doctors conclude that you have no other outcome but to die, you want them to switch from doing everything possible to make you better, to providing palliative care to keep you as comfortable and pain-free as possible during the end of your life.

* COMMUNITY SPOUSE RESOURCE ALLOWANCE (CSRA): This phrase is unique to the world of Medicaid. If your spouse has to enter a nursing home, you will have to pay for his or her care out-of- pocket until he or she qualifies for Medicaid. Under the Medicaid program he or she can qualify for Medicaid when the nursing home spouse has only $2,000 in “countable” assets left in his/her name, and the healthy spouse has retained his or her “CSRA,” which is half of the “countable” assets the couple had on the day nursing home care started, but, in 2025 in West Virginia, not less than $31,584, nor more than $157,920. This CSRA is a financial nest egg for the healthy spouse and never has to be spent on the nursing home spouse’s care. The CSRA is an important part of the healthy spouse’s financial plan when the other spouse has to go to a nursing home. For example, If a couple had $100,000 in countable assets, the CSRA the healthier spouse could keep would be half, or $50,000. Only the other $50,000 would be at risk of going to the nursing home. If a couple had $500,000 in countable assets, the healthy spouse would hit her head on the CSRA ceiling and be allowed to keep only $157,920, not the arithmetic half. All of the rest of their assets would be at risk of going to the nursing home. If a couple had only $50,000 in countable assets, the healthy spouse would keep $31,584, the minimum CRSA, even though it is more than half of their total assets.

That’s enough playing with words for today. I hope these definitions and explanations will help you better understand some of the words you may encounter as you plan for your future.

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Gerald W. Townsend is a partner in the Elder law firm of Fluharty & Townsend, Parkersburg, W.Va. His practice focuses upon meeting the legal needs of seniors in West Virginia, with special emphasis upon protecting life savings from the cost of nursing home care. He can be reached at jtownsend@fntlawoffice.