Massachusetts Estate Planning & Asset Protection Blog

I am Power of Attorney...Now What Do I Do? | Massachusetts Alzheimer's Attorney

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, Dec 11, 2013

 

Alzhiemer's, Power of Attorney

Recently, I was asked to serve as agent under Power of Attorney for husband and wife clients.  We’ll call them Sam and Abigail.  Both are in their 80’s and just moved to a nursing facility.  As their legal representative, I will be doing the types of things that, as an elder care attorney, I so often advise our clients’ family members who serve in that role.  So I thought I would share with you the process that I am working through and the steps I now am, and will in the coming months, take to insure that Sam and Abigail are well cared for.

First, let me give you a bit of background.  Sam and Abigail live in a modest home which they told me they have owned for 50 years.  They have no children or family that they are close with.  Both are physically unable to navigate the stairs in their home or even leave their home without assistance.  But, my job is made easier because the reason they need nursing home care is because of their physical ailments, not mental ones.  Although at times their memory is a bit faulty they both were able to answer my questions and provide me with the information and documents I need to help them.

The first step was to have them both execute very specific powers of attorney that will allow me to conduct the transactions I will need to transition them to a nursing facility, pay their bills, sell their home and eventually ,if they outlive their funds, apply for Medicaid benefits on their behalf.  That document will be absolutely critical to my ability to help them.

When I visited their home, it was immediately clear why they could no longer remain there.  Sam was confined to a room downstairs that was converted to a bedroom.  Abigail still slept upstairs but I couldn’t imagine how she was able to make it up the stairs.  The home was in disarray.  Papers, clothing and other items were stacked or lying about everywhere.  It was obvious that the upkeep of a home was no longer within their capabilities.  And they knew it too.  The nursing facility was coming the next day to move them.

While visiting them in their home I wanted to take the opportunity to gather as much information about them as I could.  I asked Sam if he has a safe deposit box and if so what he keeps there.  He told me he and Abigail keep a box at the bank down the street from them.  That is where they keep their will and deed to their home.  It’s also possible there are other papers in the box that we’ll need so I was hoping he would remember where, in his home, he keeps the key to the box.  Luckily, he knew exactly where and directed me to it.

I asked about other assets such as stocks, bonds, mutual funds, and insurance policies.  He and Abigail both told me that they had bank accounts at three different banks totaling approximately $100,000 and that’s it.  They could only show me a single statement for one of the accounts, claiming that they discard the statements rather than save them.

I looked around and saw stacks of old papers, some going back 30 years or more.  There was only so much ground I could cover with them in a single visit.  I knew I would need to come back to the home another day so I focused my inquiries on their means of record keeping, where in the home.  At the conclusion of our meeting they gave me a key to their home.

Sam and Abigail settled in well in the facility a few days after I met with them.   Next time I’ll tell you about my second visit to their home, what I was looking for and what I found.

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: power of attorney, Estate Planning, Estate Planning, estate, 2013, 2014

Did You Think Medicare Would Pay For That? | Massachusetts Elder Law Attorney

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Mon, Dec 09, 2013

Rehab, Mass, Masshealth

 

Many people think that Medicare will pick up the tab for most of your rehabilitation, but it doesn't always. Read below to find out more!

A common problem we often see occurs when someone goes into the hospital for surgery and then goes immediately to a skilled nursing facility (SNF) for rehabilitation (rehab).

Most people assume that the rehab stay in the skilled nursing facility will be covered by Medicare. Unfortunately that is not necessarily the case.

 The Medicare rule is that a patient must spend at least three consecutive days, meaning three midnight stays, in a hospital as an inpatient on admitted status in order to qualify for Medicare coverage for the subsequent rehab stay in a SNF.

 Unfortunately, patients may be classified as outpatient on observation status in the hospital and fail to achieve the three day inpatient stay to qualify for subsequent SNF Medicare coverage even though they are in a hospital bed for multiple days and the care they receive is indistinguishable from admitted patient care.  Observation status does not equal admitted status.

 Talk to your admitting physician. Determine whether or not your procedure will qualify as an admitted patient procedure. We have been told that sometimes your doctor may have some discretion to put you on admitted status (and not observation status) depending on the rules that he or she must abide by to comply with Medicare.

 If your doctor has any discretion in this area then he must give you the proper coding and admitted status before you leave the hospital, because after you leave, the record becomes permanent and cannot be changed.

 And a recent October 1, 2013 CMS rule unfortunately does not help Medicare beneficiaries. The new rule indicates that a two midnight standard set out in the new regulations is simply a tool for physicians to apply in making an inpatient admission decisions. Thus, if your doctor believes that you will require at least two midnights in the hospital, your doctor should admit you to admission status. But, you as the patient will continue to need three midnights on admission status to qualify for Medicare coverage in the subsequent SNF rehab stay.

 Sound confusing? It is.

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: Estate Planning, Estate Planning, Medicare, Medicaid, MassHealth, estate, Medicare, 2013, 2014

Medicaid is No Walk in the Park Part 2|Massachusetts Elder Law Attorney

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, Nov 20, 2013

Medicaid is No Walk in the Park 

Part II

Walk in the Park

 Last time we were examining Kate’s problem getting Medicaid for her mom.  Specifically, the issue was a joint account held by mother and daughter.

Into that account, Kate deposited her income which she used to pay for household bills, such as utilities, real estate taxes, homeowner’s insurance etc.  She took some of Mom’s income and transferred it to that joint account in order to pay some of those bills.  She explained that both of them were living in the household so they both contributed to the costs.

“Not a problem”, I told Kate.  “But, if you are claiming that the account isn’t Mom’s, you have the burden of proving that.  Medicaid assumes that it was Mom’s account and she put your name on it, not the other way around.  You must trace that account back to when it was just in your name, before you added Mom as a co-owner.  Only then will Medicaid be satisfied that it isn’t Mom’s.”

Kate listened carefully.  “So, is that it”, she asked.   No, actually there was more.

If we are successful in showing Medicaid that it isn’t Mom’s account, then the transfer of Mom’s income to that account to help pay the bills would now be a transfer for less than fair value.  Why is that?  Because Mom is transferring money out of her name to an account that we have just proved is Kate’s, not Mom’s.

Isn‘t  Kate then caught up in a classic Catch-22?  She seems to lose either way. Well, no.  Not really.  There is a way out.  Remember, the money transferred to the joint account is Mom’s share of the household expenses.  As long as we are able to prove by a clear paper trail what that money was spent on, then Medicaid won’t assess a penalty.

I asked Kate if she is able to do all that.  She was hesitant to reply.  She told me she hadn’t kept detailed records with the expectation that she would need to prove all this to anyone.  But, she said she would do her best.

“As long as we can back up what you are saying with a clean paper trail”, I told Kate, “then we should be able to straighten out your Medicaid denial.”  Kate certainly had plenty of motivation to get to work.  The$ 40,000 nursing home bill that Mom owes would motivate just about anyone.

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: asset protection, Medicaid, MassHealth, medicaid qualification, assets, Medicaid penalties, asset, 2013

Medicaid is no Walk in the Park |Boston Elder Law Attorney

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Mon, Nov 18, 2013

Medicaid Is No Walk In The Park

Walking in the Park, Thinking

Kate told me, “Mom has no money.  She’s never had any money.  But Medicaid still denied her application and now I owe the nursing home $40,000.”  I knew there had to be more to her story.  Sure enough, there was.

It’s a very common belief that, because Mom and Dad never had much money, the Medicaid application process should be a piece of cake.  Maybe it should be but the reality is it just isn’t the case. Kate’s dilemma was proof.

Kate told me that she and her Mom had lived together her entire life.  In fact, Mom and Dad transferred the home to Kate.  When I heard that, I immediately thought this could be her problem right there.

I asked how long ago the deed had been transferred.   “10 years ago”, was Kate’s reply.  That was clearly outside the 5 year Medicaid look back period so could not have triggered a Medicaid transfer penalty.    It had to be something else.

“Does Mom have any accounts with her name on it, that, in your mind, you don’t consider hers”, I asked.  That’s when Kate told me that she had a joint account with Mom but she insisted the money in that account was all hers, not Kate’s.

I learned that Kate’s income is deposited into that account, from which she pays the bills.  Mom’s income, she told me, goes into a separate account in Mom’s name, the only account Kate considers to be owned by Mom.  I explained to her that this was mostly likely the cause of her Medicaid denial.

Next time I’ll share with you why and what we could do to fix the problem.

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: asset protection, Medicaid, MassHealth, medicaid qualification, assets, Medicare, asset, 2013

Confused About the Affordable Health Care Act (Obamacare)? | Massachusetts Elder Law Attorney

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Thu, Nov 14, 2013

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We are here to help!

The Affordable Care Act (Obamacare) provides insurance for those who are uninsured, many of whom have, unfortunately, become overcome with confusion, fear, and misunderstanding, that they are avoiding to process all together. We understand that! We are navigating the options for the people we help, but even we are little unsure of the best options for them.

But there is one thing we are sure of, its the new benefits added to Medicare recipients! These added benefits include yearly Wellness visits (an opportunity to talk about your future), and coverage for numerous procedures that were not covered before.

For more information about this confusing topic, visit our website to receive your free copy of our report, "The Senior's & Boomer's Guide to Health Care Reform and Avoiding Nursing Home Poverty."

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

Make sure you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about Obamacare, Medicare cuts, taxes, & how to avoid nursing home poverty!

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Click the picture below for some more information on the 
"Senior & Boomers' Guide to Health Care Reform & Avoiding Nursing Home Poverty." 

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Tags: Medicare, Medicaid, MassHealth, Wellesley, medical expenses, medicaid qualification, Medicare, Obama, 2013, Massachusettes, Affordable Health Care, Obamacare

VA Rules are Changing: NEW Three Year Look Back! | Massachusetts Elder Law Attorney

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Fri, Nov 08, 2013

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The winds of change are blowing over the VA landscape.  I’ve written about this in the past and the time may soon be here.  These are changes that you need to understand.

 Over the years, many of our clients have been able to qualify for an Improved Pension (sometimes called Aid and Attendance Benefit) to help pay for the cost of long term care, whether that be in an assisted living facility or nursing home or to enable them to stay home longer. This VA benefit has helped many people meet the high cost of care and stretch their dollars.

 In order to be eligible for the VA benefit, as a rule of thumb, claimants had to have assets totaling less than about $80,000 (not counting their home or car). They also had to meet the VA income rules. While giving away assets triggers a five year look-back under the Medicaid rules, under the VA rules there is no look-back period for gifts or asset transfers.

 All of that may be about to change under new VA legislation making its way through the House and Senate.

 While the legislation has not yet been voted on, there are commonalities in the bills which tell us that a change in the law is near. Among the biggest proposed changes are the following:

  • A penalty with a three year look-back for asset transfers under the VA rules.

  • Under the new rules, transferring money into a Vet Trust or into an annuity will also trigger the three year look-back period.

  • What’s more, penalties caused by an asset transfer from a now-deceased spouse will carry over to the surviving spouse.

 As with so many bills that wind through the legislative process, no one can know for sure what the final result will be until the House and Senate have each voted and then reconciled their respective bills and then the President must sign it. Our best guess is that the new legislation will probably make its way to a vote early next year and it appears likely that it will become the law of the land at that time.

 For that reason, people who are eyeing VA eligibility would do well to get their plans in place now before the anticipated law changes. Any new law will be prospective only, meaning opportunities still exist now under the current laws.

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

Tags: Estate Planning, asset protection, veterans benefits, VA benefits, Veteran, VA, 2013

Massachusetts Estate Planning Tips | 3 Estate Planning New Year's Resolutions

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Thu, Jan 10, 2013

The New Year is filled with resolutions: lose weight, save money or plan a vacation, but in the thick of things it is easy to forget about planning ahead as you get a little older.

In this article, we review 3 Estate Planning Resolutions that should be part of everyone's 2013.

You Could Lose Everything  Unless You Act Now

1. Review your beneficiary designations.

While the terms of your Will control the distribution
of your probate property, beneficiary designations determine who will inherit your non-probate
assets. Non-probate assets include brokerage or bank accounts with TOD (“Transfer on Death”) or POD (“Payable on Death”) beneficiaries, life insurance proceeds, assets held in a living trust, property held in joint tenancy with a right of survivorship, etc. The beneficiary designations on these assets are just as important to your estate plan as the naming of beneficiaries in your Will because these beneficiaries will also inherit from your estate.

estate plan, 2013, new year

To conduct your review, identify the beneficiaries you have designated for each asset. If you have married, divorced, had children, or experienced any other significant change in family circumstances, you may wish to alter certain designations. If your current designations leave property outright to a minor or an individual with special needs, you may want to consider protecting those assets for your beneficiaries.  For more information on protecting your beneficiaries' inheritances, call our office at (781) 237-2815.

2. Plan for the disposition of your digital assets.

Sure, you know who will inherit your house and your IRA after you are gone, but what will happen to your emails? The tax records stored on your hard drive? Your Facebook page? The family photos in your Flickr galleries?

If your estate plan fails to address these and other digital assets, your loved ones may have trouble accessing financial accounts or lose precious family memories. Furthermore, failing to close online financial accounts may even expose your estate to the risk of identity theft.

Start by making an inventory of your digital assets then give your loved ones or executor instructions regarding what you would like to happen to each asset. For example, are any of your bills on auto-pay? Should your Facebook page be taken down?

3. Schedule a review of your estate plan.

Generally speaking, it is a good idea to review your estate plan every year. This is particularly
important if you have recently experienced a significant change in circumstances, such as a birth or death in the family, a marriage or divorce, or a change in financial circumstances.

As we move into 2013, it is critically important to schedule a time to have your estate plan reviewed by our team of professionals, to be sure that your spouse, home and life savings will be protected.

 

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops. Call 800-964-4295 to learn more about what you can do to enhance the security of your beneficiaries, digital assests, Estate Plan and legacy.

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: Estate Planning, Beneficiary, revocable living trust, assets, benefit, 2013, plans, New Year's Resolutions

Massachusetts Estate Planning Attorney | The Fiscal Cliff Deal and Your Estate Plan

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Fri, Jan 04, 2013

What Does Avoiding The Fiscal Cliff Mean for Your Estate Plan?

Nearly 2.5 million Americans die each year, and many haven’t signed the basic documents needed to protect loved ones.  (Click Here to Learn More About How to Avoid the Top Mistakes in Estate & Asset Protection Planning).

Now that the fiscal cliff has been averted there is widespread confusion about the effect on estate planning of the 11th hour tax law passed by the Senate on New Year’s Eve, and by the House of Representatives one day later.  What Congress did in this arena was to make permanent the system that has been in effect for the past two years.

That was an important achievement because without any action the tax-free amount would have automatically reverted to $1 million per person and the rate for most estates would have gone up to 55%.  At the end of the day the only thing the lawmakers actually changed is the gift- and estate-tax rate, which has gone up to a top rate of 40% from a maximum of 35%.

Here are questions and answers on the federal estate tax after the fiscal cliff deal.

Who has to pay federal estate tax?

Once you’re worth more than a certain amount, taxes shrink your estate. Under the 2010 tax law, we can each transfer up to $5 million tax-free during life or at death, but it was due to revert to $1 million effect January 1, 2013. Recent legislature increased the tax free amount for the federal estate tax only to 5.12 million per person. Caution: Massachusetts continues to tax all estates above $1 million.

Do spouses have to pay the tax when they inherit from each other?

The new law doesn’t change this either. There is an unlimited deduction from estate and gift tax that postpones the tax on assets inherited from each other until the second spouse dies. This marital deduction, as it is called, applies only if the inheriting spouse is a U.S. citizen.

How does this relate to lifetime gifts?

The lifetime gift tax exclusion and the estate tax exclusion are expressed as a total amount, currently $5.12 million per person, and it is possible to use this exclusion (sometimes called the “unified credit”) to transfer assets during life or at death, or a combination of the two.  If you exceed the limit however, you or your heirs will owe tax of up to 40%.

The IRS requires you to keep a running tally and report these gifts. For example, if you have used $1 million of the exclusion to make taxable lifetime gifts, the unused exclusion when you die will be $4.12 million, rather than $5.12 million.

Are there lifetime gifts that don’t count?

We can each give another person $14,000 per year without it counting against the lifetime exemption.  Spouses can combine this annual exclusion to double the size of the gift.

The simplest way to use the annual exclusion is to give cash or other assets each year to each of as many individuals as you want. Another possibility is to put money in Section 529 education savings plans. Establishing these plans for relatives could relieve siblings or children of the need to save for college at a time when they are overwhelmed with current expenses.

What Did Change? 

There were several changes made by the Fiscal Cliff Deal.  First, the top personal income tax rate will increase from 35% to 41% (when factoring in the various phase outs of certain deductions for high income individuals).  Additionally, the capital gains tax will increase to 20% for individuals making over $400,000 and couples making over $450,000.

Is it time to review your estate plan? (Click Here to Learn More About Our 19 Point Trust, Estate and Asset Protection Legal Guide)

You should revisit it if there have been changes in your finances or your personal life or if you considering a trust to protect your home, spouse and life savings.  It is essential to be sure your assets are properly coordinated and that everything is in place to protect your home, spouse and life savings.  This message is even more important, as the Congressional Budget Office is considering a proposal that would extend the Medicaid look-back period from 5 to 10 years. 

To learn more about a FREE comprehensive review of your estate planning and gain the peace of mind of knowing your spouse, home and life savings will be protected, register for an upcoming workshop by calling  (800) 964-4295(24/7) or register on line.

 describe the imageClick Here to Register For Our Trust, Estate & Asset  Protection Workshop

 

Tags: Estate Planning, IRS, Estate Planning Tip, seniors, estate tax, income, 2013, plans

Massachusetts Estate Planning Attorney | End of the Year Gifting

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Mon, Dec 31, 2012

Time is running out for 2012 gift giving! End of year gifting by check is always an issue for those trying to use their annual exclusion amounts, but in 2012 the issue also relates to those attempting to make larger gifts to use their unified credit amounts before the scheduled reduction of the unified credit in 2013.gifting, estate planning

The issue with using checks to make gifts is that until the check clears the bank, the donor can revoke the gift by issuing a stop payment or by removing adequate funds from the bank account. A gift that can be revoked is not complete until revocability ends. Thus, a check written in 2012 that does not clear until 2013 is at risk of being a 2013 gift, not a 2012 gift, since the donor could have stopped payment in 2013 before it cleared.

There is case law on gifts by check, and when they will be treated as complete. The safest course is to deliver the check in 2012, have it deposited by the recipient, and have it clear in 2012.

Failing that, Revenue Ruling 96-56 provides a safe harbor. Under that ruling a gift by check delivered in 2012 will be a gift as of the date the check is deposited or presented for payment if:

  • the check was paid by the drawee bank when first presented to the drawee bank for payment;
  • the donor was alive when the check was paid by the drawee bank;
  • the donor intended to make a gift;
  • delivery of the check by the donor was unconditional; and
  • the check was deposited, cashed, or presented in 2012 and within a reasonable time of issuance.

Thus, depositing the check in 2013 will be a problem.

These rules are not the same as for charitable contribution deductions – those rules are more liberal.

At the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates, we help people and their families concerned with losing their homes and life savings to increasing medical and nursing home costs, taxes and the costs and time delays of probate. We also protect clients from losing control of their own health and financial decisions.

We developed our Unique Self-Guided 19-Point Trust, Estate, & Asset Protection Legal Guide, so you can learn where problems may exist in your planning as well as opportunities for improvement and how to implement a plan to protect your spouse, home, family, and life savings.  Click Here to Download the Guide.

We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at www.SeniorWorkshop.com

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: gifting, Massachusetts, gift, charitable, donations, year end, 2013

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