Blogs from 2023

A Health Care Proxy is a document that allows you to designate an individual to make health care decisions for you in the event you become incapacitated and unable to express your health care wishes. Often, people choose a close family member, which is most often the right choice, but not everyone gives enough thought to their decision and sometimes, their closest family is not necessarily the right individual for the job. Further, it is common that a person has multiple close family members that on the surface all seem to be equally qualified for the job.

What Should Be Considered Before Choosing an Agent under Health Care Proxy?

Deciding which one of your family members or close friends to designate as agent under your health care proxy can be challenging. Here are a few helpful things to think about as you choose your health care proxy:

• Someone who knows you, and your wishes, well.
• Choosing someone who would be willing, and feels comfortable, speaking on your behalf.
• Electing someone who will be able to honor your wishes even if it is contrary to theirs.
• Picking someone who lives close by or can easily travel to be by your side.
• Someone capable of handling the responsibilities associated with being your agent.
• Someone who can talk to you regarding sensitive and potentially difficult topics.
• Someone who is likely to be around in the future when the need may arise for the person to act on your behalf.
• Someone who would be able to handle differences of opinion among family members, doctors, and friends.
• Someone who can strongly advocate on your behalf.

Other Considerations When Choosing Your Agent:

• It is advisable to name at least one successor agent to act in case the first person you designate is unavailable when needed.
• Be sure to only select someone that is lawfully permitted to act as your agent. This will differ by state but generally an agent cannot be someone under the age of 18, your health care provider, or an employee of your health care provider’s office unless that employee is a close relative or spouse. It is important to consult your state law regarding eligible agents.

After You Choose Your Health Care Proxy, It Can Be Beneficial To:

• First, ask your desired choice for permission to appoint them as your agent.
• Discuss with your agent your health care wishes, values, and fears.
• Ensure your agent has a copy of your health care proxy.
• If your agent only has copies, let your agent know where he/she can find your original health care proxy.
• Tell your family and close friends who you chose to act as your agent.
• Give your doctor a copy of your health care proxy to place in your medical records.

In addition to preparing a Health Care Proxy to designate your agent (and successor agents), you may also wish to prepare a HIPAA Authorization, Living Will, or a declaration of your medical considerations, so that the person you have named as agent, other family members and your doctor, will have a document that directly memorializes your wishes. There are advantages and disadvantages to preparing these additional documents, and that should be discussed with an elder law attorney and your medical provider. Contact us to learn more.

It is never too early to think about your estate planning. Many people think that estate planning is a matter for the elderly, but that is not true. While people with greater assets often think about what will happen to them when they pass, it could be just as beneficial for the young to do the same. Even though people in their twenties may not own significant wealth, estate planning can help ensure your family has access to the assets you do own if something happens to you. The alternative can leave your family battling for access to your assets in court.

Additionally, if you think that it’s better to postpone your estate planning because you know that your situation will change in the coming years, it is important to know that your estate planning documents can be changed as necessary. For example, if you are single and in your mid-twenties when you first start estate planning, your plan can be changed upon the celebration of a marriage, the adoption or birth of a baby, and any other changes in circumstance. Or if you feel that you are too young to think about long term care asset preservation, that’s fine. You can always add trust planning or further planning at a later date.

What you don’t want is your loved ones to find themselves in a mess if something should happen to you and you haven’t prepared your estate plan. If you were to suffer an accident, illness or injury, having a power of attorney and health care proxy in place would allow the people that you would choose to have the legal authority to help you. It won’t be enough that “you would let them” or that “they know” that you would allow them to help you. Your trusted family or friends would have to have proper legal authority which you can prepare in advance when you are capable of doing so. Further, after your lifetime, having an estate plan in place will facilitate the process of administering your estate for those you leave behind.

You may only need a simple estate plan for now, but not having a plan and crisis hits? That wouldn’t be simple at all.

Thankfully, this is not a frequent scenario, but the seriousness is worth writing about nonetheless.

A child or spouse calls the office of an elder law attorney. The caller’s loved one is about to be discharged from the hospital or short term rehabilitation, and upon the recommendation of a social worker, is urged to consult with an elder law attorney.

The child or spouse gets good information on how to begin protecting their loved one, but for various reasons, such as the overwhelming nature of the medical crisis at hand, dealing with health insurance, balancing their own family, job, etc., they put off further meetings with the lawyer, or proceeding with recommended services, and manage to get their loved one back home, or past the immediate crisis.

Fast forward several months, or even more than a year. Another medical crisis arises and there is no avoiding planning for long term care, which will now certainly be necessary going forward. The same caller calls the office and is now ready to go ahead with the recommended plan.

Unfortunately, that plan is no longer viable.

Too often, while their loved one had capacity to sign a power of attorney when they originally called, their loved one’s dementia got worse in the intervening months and he or she is no longer capable of signing a power of attorney with all of the elder law provisions needed to establish Medicaid and protect assets.

A spouse may have passed away in the intervening months, eliminating certain planning strategies that were available with the original strategy.

Often, the family shifted and used funds to pay for home health aides without guidance of an elder law attorney, and the transfers will result in a penalty with Medicaid or tax liability that could have been avoided with some guidance.

It’s possible that many years passed and had the planning been done at least 5 years previously, more of their loved ones assets could have been protected and preserved.

There is a certainly a time that is too early to begin elder law planning, but there also comes a time that it may be too late.

If you are a senior, and have not met with an elder law attorney, it will be worth your while to have your situation assessed. Perhaps you have everything in order already, or perhaps it is highly recommended to get some things in place. That one meeting is a small investment in light of the advice and guidance that can potentially save you and your loved ones from tremendous unnecessary frustration and loss later on.

Who wouldn’t want peace of mind?

A bill recently passed the senate and is now in the Assembly amending New York State Bank Laws relating to joint accounts.

Until now, according to Banking Law Section 675, a deposit made to a joint account in New York State has been considered to be equally owned by the individuals on the account title, and upon the death of the first joint owner, the surviving owner would be the presumed owner of the entire account. While this is obviously common with married couples, it is also common to set up accounts this way between an elderly parent and an adult child. The advantage of this arrangement is the ease of the child to assist with bill payments and managing the elderly parent’s money during lifetime, and then the automatic ownership and access by the child upon the death of the parent. Often, there is an understanding among surviving siblings that one child is simply using the funds for final costs and will split whatever is left over. However, that is not always the case, of course. The presumption of survivor ownership could be rebutted by other children, but the burden of proof would be on the challenger(s).

The exception to this rule notes the exception of “convenience accounts” to the presumption. Banking Law Section 678 determines that if title of the account is held by the depositor, with the name of a second individual “for the convenience of” the depositor, the second individual has no survivorship rights to the account. During lifetime, the money is considered the depositor’s money only (i.e. the parent), with the second individual (i.e. a child) having access to the funds to pay bills, etc., but after lifetime, the second individual would no longer have access to the money, and the funds remaining in the account would be part of the depositor’s estate.

There has been significant litigation after the death of a parent involving the determinative ownership of accounts held jointly between a parent and one child, when the parent has several children. The one child that was the joint owner on an account becomes the full owner of deceased mom or dad’s account while the intention of mom or dad was just to make it easier to administer for the family both during and after lifetime. A concern is that mom or dad didn’t realize that only one child will end up with the full account, or perhaps believed that the child would do the moral thing and “split it.”

The new proposed law, New York State Banking Law Section 675-a, will require new accounts that are established to specifically indicate whether the joint owners have survivorship rights, or whether the account is for convenience only. The new law will reverse the default and if an account doesn’t specify that it is a joint account with rights of survivorship, the jointly owned account will be presumed to be a convenience account, with no survivorship rights.

That means that if a child is on an account with mom or dad, and the account doesn’t specifically state the right of survivorship, the funds will be part of the parent’s estate and not automatically be owned by the child.

This may balance the equities between the children, but potentially become a nuisance or even monetary loss if probate would then be required for the surviving family members to access the account. This may certainly not be the intention of the bank depositor and must be carefully understood before establishing a new joint account.

This new default will only govern accounts opened after it becomes law, but it is important to be aware that title to joint accounts could have significant legal consequences, so it would be wise to review how your existing joint accounts are currently titled and confirm that you intentionally wish it to be set up in the way that it is.

Medicaid is a means tested government program. A person is only entitled to Medicaid if they meet certain strict income and asset requirements. The income and asset requirements vary by state, and further vary by program. The following will discuss how retirement accounts are treated when a New York State resident is receiving Medicaid long term care benefits (home health aides, assisted living, or nursing home care).

Currently, in 2023, an individual can have no more than $30,182 in countable resources in his name to qualify for Medicaid long term care services in New York State. Countable resources include assets such as cash, stocks, real property (excluding a primary residence valued under $1,033,000), non-qualified annuities, and cash value of life insurance. A retirement account, such as an IRA or 401(k) is excluded as a countable resource, regardless of the value of the principal balance, if it is in “payout status.” For Medicaid purposes, payout status is taking the monthly minimum required distribution (calculated as per a life expectancy table based on the account owner’s age and the value of the principal balance in the account).

The monthly distributions are treated as the individual’s income.

In 2023, an individual can keep $1,677 per month of his income if he is receiving home care services. Above that amount, Medicare and other health insurance premiums can be paid, but then any remaining amount either has to be paid to Medicaid as a “co-pay,” or can be mostly preserved by joining a pooled income trust. The income will consist of the individual’s social security, monthly pension, required distributions from retirement accounts, and any other regular income payments to the individual.

If the individual is receiving Medicaid in a nursing home, then the applicant can only keep $50 a month of his income, and the remainder of his income (social security, pension, retirement distributions) all must be paid to the nursing home as a “co-pay” for Medicaid.

In both of the above scenarios, Medicaid is only counting the retirement distributions, and not the principal amount in the accounts.

To fully protect the retirement accounts, it is critical for the Medicaid recipient to confirm that the beneficiaries are up to date on the retirement accounts. If there is no beneficiary designated, or the beneficiary is deceased, then the retirement account will need to be probated and Medicaid can recover the cost of care through the probate assets.

If planned right, a person can receive needed long term care services from Medicaid, while preserving their hard earned retirement accounts. Call us for more information and to help you through this process.

I recently had two consultations back to back where both sets of prospective clients were seeking guidance on estate administration after the recent loss of a loved one. The dichotomy between the two cases was magnified by the appointments being one after the other. In the first meeting I was able to give the prospective client the good news that with some minor paperwork, his deceased loved one’s estate will be all wrapped up, while in the second meeting, I unfortunately had to explain the long process that awaited them. The values of the estates in both cases were very similar. The planning, however, was very different and resulted in very different experiences for their respective loved ones.

In my first meeting, I met with the son of a client who recently passed away. His mother, the deceased, prepared a living trust during her lifetime, funded her home into the trust, and had designated beneficiaries on each of her investment and retirement accounts. She had further prepared a clear list of all of her accounts with account numbers, with a list of the name of her accountant, financial advisor, and estate attorney.  In addition, she had entered into a pre-plan funeral agreement with a local funeral home, and her services were selected and prepaid. When she passed away, her son was able to attend his mother’s funeral services, by practically just showing up, without having to make decisions or arrange payment. At his meeting with me, he told me that he already completed the beneficiary claim forms for all of her accounts. I explained that because his mother’s home was in trust, naming him as successor trustee, he can go ahead and make arrangements to sell her house, and after dealing with the minor administration expenses, final bills, and final tax return, he would easily be able to distribute the remaining funds. There was some legal paperwork we had to get through, but because there was no need for court involvement, and everything was organized and identified, the estate would be administered very efficiently and inexpensively.

In my second meeting, I met with two siblings after their mother’s funeral. Their mother did not prepare an estate plan and there was no prepared list or file cabinet with information regarding her assets. Fortunately, the siblings got along and cooperated in everything that needed to be done. The brother and sister had split the cost of the funeral, paying with their own funds as they did not have access to their deceased mother’s money. When I met with them, although they did not have full knowledge of the accounts their mother had, they were aware that she had a few accounts that definitely did not have any beneficiaries designated. They also were aware of a life insurance policy, but it only named their deceased father as beneficiary, with no contingent beneficiaries. She also owned her home in New York, and a vacation home out of state. I explained that we would have to begin the administration process with the New York Surrogate’s Court, they would have to cover the cost of the court filing fees, attorney fees, and other expenses until the petition was granted when they would be able to start accessing their mother’s funds to reimburse these expenses. The petition would likely take several months until it would be granted, and it is likely the court will require the petitioner(s) to post a bond before having the authority to act as administrator of the estate. In addition, they would have to wait to sell the New York house until the administration was granted and would have to go through another court proceeding in the state where their mother’s vacation home was located. The carrying costs of the properties, including real estate tax and insurance, would continue to accrue until the eventual sales. Had the siblings not gotten along very well, had they not been able to afford the out-of-pocket costs, had one of them been on government benefits, their situation would have been much worse.

However, even without aggravating factors, the clients from my second meeting were in for a long process while my client from my first meeting will have a very quick and efficient experience dealing with the administration.

Click here to learn more about the probate and estate administration process.

Now is your chance to decide how you want your loved ones’ experience to be. Do you want to give your children and yourself peace of mind? You should go ahead and get your estate plan in order.

We would be honored to assist you.

Medicaid’s temporary pandemic rules have ended as of April 1 which will mean termination of coverage for millions of Americans in the coming months.

Medicaid, the government-provided health insurance that an estimated 85 million Americans are on, is a means-tested program. In order to qualify for Medicaid, there are specific resource and income rules that determine eligibility (which vary depending on the category an applicant falls under). Generally, for a Medicaid recipient under 65 years old, if he or she begins to earn more than the income limit, Medicaid would cut coverage. If a Medicaid recipient over 65 years old or disabled acquires more resources than the Medicaid limit, he or she would also see their coverage cut. These rules were suspended during the coronavirus pandemic, and coverage was prohibited from being cut for any Medicaid recipient that had Medicaid prior to March 2020 regardless of a change in income or resources. In addition, during the pandemic, a new Medicaid applicant was allowed to “attest” to their resources or income without necessarily providing supporting documentation, which made it much easier, and sometimes, incorrectly, adding such applicants to the Medicaid rolls.

States are not all starting the disenrollment process at the same time but if you believe you or a loved one are at risk of getting cut, it is best to seek advice immediately to ensure that you are not left without coverage.

This may be particularly devastating for those with health conditions, and seniors who are receiving home health care or residing in nursing homes with Medicaid coverage.

It is crucial that Medicaid recipients update their contact information on record with Medicaid to ensure that they receive notices regarding their Medicaid coverage and have ample opportunity to either recertify their Medicaid or make other health insurance arrangements without a surprise drop in coverage.

If you or a loved one are a Medicaid recipient receiving long-term care, (Community Care or Nursing Home care), and believe you may be at risk of losing your coverage, you should seek a consultation with an elder law attorney to review your situation and determine the best strategy to ensure no disruption in coverage.

We are happy to help you.

An old fashion approach to estate planning with a disabled child was to disinherit the child and leave the estate to the other child(ren) who would then “take care of” their sibling.

Time and experiences have exposed the pitfalls and dangers of such planning.  Even with the most trustworthy siblings and the best of intentions, the siblings cannot have full control over what the future brings.

Here’s a demonstration of how things can turn out very differently than intended:

Bernard has four children: Borris, Barry, Bob, and Barbara. Barbara has developmental disabilities and receives public benefits. Bernard recognizes that Barbara wouldn’t be able to manage her own inheritance so he prepares a will disinheriting Barbara, leaving everything to Borris, Barry, and Bob with informal instructions to his sons to take care of their sister Barbara for the rest of their lives. The boys love Barbara and have every intention of following their father’s instructions.

After Bernard’s death, his estate is distributed to Borris, Barry, and Bob in accordance with the will, who each put their inheritance funds in their personal bank accounts. The brothers take excellent care of their sister Barbara, paying for all her needs and even more. Everything is going well.

A few years later, Borris dies suddenly, and his estate is left to his wife. Borris’s wife does not feel the same obligation to use her money to care for her sister-in-law. Barry unfortunately gets divorced, and as he deposited the inherited money in a joint account, his ex-wife receives half of the inheritance, even though a substantial amount was informally earmarked for Barbara’s care. Due to the divorce, and unemployment, Barry has trouble paying his own bills and certainly can no longer provide for Barbara financially. Bob is the defendant in a major lawsuit and now has a judgment against him jeopardizing the money earmarked for Barbara.

Bernard and his sons all meant well, but circumstances beyond their control put Barbara’s continued financial security in jeopardy.

The safer and smarter alternative would have been to specifically provide for Barbara in a manner that the inheritance would be managed properly and available to her, regardless of what could happen to her brothers.

Questions about special needs planning? Read our FAQs.

The most straightforward and practical way for a parent to provide for a child with special needs would be the use of a supplemental needs trust in their planning. The child that has special needs would not receive an outright inheritance, but the parent could direct the child’s inheritance to be held by a trustee who would then administer that child’s inheritance according to terms that would allow the child to have uninterrupted government services and also have funds to be used for any of the child’s needs or wants that are not covered by the services he or she is receiving. The parent can designate a trustee to manage the trust, and successor trustees. If there is ever a time that the trustee can no longer serve (dies, becomes incapacitated, or any other reason), or the trustee experiences other personal life circumstances, the money would not be at risk, and someone else would be able to step in to continue managing the child’s inheritance.

There are many correct ways to set this up making the parent feel most comfortable and providing the parent, the child, and all the other children with peace of mind. But one definite wrong way is to do nothing at all.

Some people are aware of the concept of Medicaid planning but are very reluctant because they are not ready to transfer their assets into a trust or as some put it, “give all their assets over to their children.”

Medicaid planning is not all or nothing.

A Medicaid Asset Protection Trust is an irrevocable trust that is utilized to preserve the assets funded in the trust so that those assets are not countable resources for Medicaid long term care eligibility purposes.

You do not have to transfer all of your assets into this trust. The main rule is that assets transferred into the trust will not be counted as your resources for Medicaid purposes and will be sheltered (after the applicable lookback period). The assets that remain out of trust will not be protected and may be countable resources when you need long term care.

If you are not in need of long term care services now, but wish to plan for a potential future need to access Medicaid long term care benefits, it is advisable to transfer some of your assets into the trust, while leaving out of the trust whatever you expect to need for your living expenses, and an additional cushion for an unexpected event, calculated at least for the next five years.

Contrary to erroneous belief, you do not have to be at the very low Medicaid eligibility limits during the full lookback period. Your assets only need to be below the Medicaid eligibility resource limits when you apply for Medicaid.

A very common and straightforward asset to fund in a Medicaid Asset Protection Trust is your home and other real property. In most situations, funding your home in your trust will not change your quality of life, but will begin the protection of what is likely your most valuable asset. Many people choose to fund their home in the trust, while leaving their money out of the trust. Your home, and its equity, will be fully protected five years from the funding. You will continue to have complete access, control and ownership of the money that you leave in your own name, with the risk that this money out of trust will not be protected should you need Medicaid. If Medicaid is needed while you still have the money in your name, you may not be able to preserve the full amount, it may need to be spent down on your long term care expenses, or you may be able to implement certain crisis strategies to preserve all or some of the money at the time. But at least your home, and other valuable assets that you transferred to your trust will be preserved.

Case Study: Charlie owns his home valued at $900,000 and has $500,000 in his combined checking, savings, and investment accounts. In July of 2016, Charlie established a Medicaid Asset Protection Trust and transferred his home to the trust. He left his liquid funds in his own name. Since then, Charlie continued to live at home, and spent his money on his regular expenses and some nice vacations. In December of 2022, due to a sudden medical event, Charlie becomes a resident of a nursing home. He is interested in applying for institutional Medicaid. His home is fully protected in the trust, but he has $300,000 left in his combined accounts. In 2023, New York Medicaid resource limit is $28,133. He can’t transfer the rest of the money to his trust or a child because of the lookback period penalty. He consults with his elder law attorney, who confirms that the house is completely protected, and explores the best way to salvage the remaining funds and become Medicaid eligible. (If he was married or had a disabled child, he may have been able to preserve the full amount, but ultimately, a promissory note gift plan is used, also known as a “half loaf” plan, and he is able to preserve about half of his money while the remaining amount is spent on his long term care expenses.)

While he did have to spend some of his money on his care before he became completely Medicaid eligible, with the advance trust planning, Charlie was able to protect his valuable home, and enjoy his money while he was healthy.

With Medicaid planning, there is so much to consider, and the earlier you do, the more available options you will have to achieve more optimal results. As you head into your sunset years, the earlier you talk to an elder law attorney, the better off you will be.