Suffolk County, NY Estate Planning and Elder Law Blog

Friday, March 24, 2017

Money Transfers and Medicaid Eligibility

Question: My mom has Alzheimer’s and has been living in my house for the past four years.  Shortly after she moved in, she gave me $60,000.00, worried that she might need to apply for Medicaid and would have too much money in her name.  It has been roughly three and an half years since she transferred the money to me.  During the four years, I did not take rent from her but from time to time I used the money that she gave me to pay for food and utilities.  I also used some of the money to pay mom’s credit card bills.  She fell two weeks ago, was hospitalized, and is now in a rehabilitation facility.  Her doctor thinks it would be best if we considered Nursing Home care for her.  I know that there can be a problem if Medicaid sees that she gave money away, but here I assume it will be all right because I used the money for her expenses, is that correct?

Answer: Unfortunately, it may not be.  As you are likely aware, when an individual requires long-term nursing home care and is looking to rely on Medicaid as a pay source, there is a five-year look-back.  What this means is that Medicaid, through the Department of Social Services will require full financial disclosure for the five years immedicably prior to entering the nursing home.  When the financial statements are reviewed, the presumption is that all cash withdrawals and all monies transferred are gifts, and accordingly, a penalty of one month will be assessed for each roughly $12,800.00 that is transferred.


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Friday, March 10, 2017

Giving Your Estate Plan a Spring Clean-Up

Question: Spring cleaning has me thinking I may need to update more than my window treatments. What changes should I be making to my estate plan?

Answer: Spring has sprung! Warmer temperatures and more daylight have a way of inspiring people to refresh their houses and cleanup their yards to make way for the summer season. Not unlike our homes and yards, your estate plan may be in need of a spring cleanup too! If it has been a few years since you have visited with your attorney, now is the perfect time to review your plan to ensure that your documents are up to date. Here are a few topics you may want to revisit:


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Monday, March 6, 2017

Avoiding Probate is Not a Panacea

Being hyper focused on avoiding probate can be an estate planning disaster.  First, what exactly is “probate”?   Probate is the legal process whereby a last will & testament is determined by the Court to be authentic and valid.  The Court will then “admit” the will to probate and issue “letters testamentary” to the Executor so that the Executor can carry out the decedent’s intentions in accordance with the last will and testament.  That usually involves paying all funeral bills, administrative expenses, debts, settling all claims, paying any specific bequests and paying out the balance to the named beneficiary or beneficiaries. 

Avoiding probate can be accomplished by creating a trust to hold your assets during your lifetime and then distributing the assets at your death in the same manner and sequence as an Executor would if your assets passed through probate.  Typically, this would be accomplished by creating a revocable trust and transferring all non-retirement assets to the trust during your lifetime, thereby avoiding probate at your death.  Retirement assets like 403B’s, IRA’s and non-qualified annuities are not transferred to revocable trusts as they have their own rules and should transfer after death by virtue of a beneficiary designation.  Retirement assets should not be subject to probate.  The designation of a beneficiary is vital to avoid costly income taxes if retirement assets name the estate or default to the estate.   The take away here is that you should make sure that you have named primary and contingent beneficiaries on your retirement assets.  If you name a trust for an individual, you must discuss that with a competent professional that can advise you if the trust can accept retirement assets without causing adverse income tax consequences.  Not all trusts are the same.

 


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Monday, March 6, 2017

Nancy Burner, Esq., Robin Burner Daleo, Esq. and Britt Burner, Esq. Named as Top Women Attorneys in New York

We're proud to announce that SuperLawyers have selected Nancy Burner, Robin Burner Daleo and Britt Burner as New York's Top Women Attorneys. 

The SuperLawyers "Top Women Attorneys" supplement will be published in the New York Times newspaper on Sunday, March 26, 2017. 


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Monday, March 6, 2017

Who is Responsible for an Estate’s Debts?

Question:  My father recently passed away.  He owes more than he has in assets. As his surviving child, am I responsible for his debt?

Answer:  Your father’s Estate is responsible to pay his creditors with the assets remaining in his estate. Creditors are paid in accordance with priorities established by New York State law.

  •  Administration and funeral expenses are the first to be paid.  Administration expenses include any legal fees and any costs associated with your father’s estate like probate fees, appraisals, etc.
  • Money owed to the government such as income taxes and estate taxes.
  • Payment of property taxes for real property he owed which accrued prior to your father’s death.  If there are not enough estate assets to pay this debt, then whatever estate assets are available would be used to pay off the debts in these categories.
  • Judgment creditors get paid next.  If your father was on Medicaid, the Department of Social Services has a priority for its claims. This means that the Department of Social Services gets paid before other judgment creditors.
  • Secured creditors such as a mortgage, home equity or car loan.
  • Unsecured creditors (such as credit cards and bills) are the last to be paid.

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Friday, February 24, 2017

Community Medicaid: Home Health Aide v. Medical Model Daycare

Question:  “I am considering applying for Community Medicaid for my father, but I am not sure if my mother will accept a home health aide into her home.  What, if anything, could Community Medicaid offer other than a home health aide?”

Answer:  The Community Based (Homecare) Medicaid program can offer alternatives to home health aides; however, you must know the requirements in order to enroll in the program.  Once approved for Community Medicaid, the individual may be enrolled in a Managed Long Term Care Company (MLTC).  The MLTC will be in charge of coordinating the recipient’s healthcare needs including, but not limited to, a home health care aide.

In order to enroll in a MLTC the recipient must either have a home health care aide or be enrolled in a Medical Model Daycare program.  If the family wants a home health care aide, the MLTC will determine the amount of hours per day and days per week that the individual is entitled to have the aide depending on the individual’s need.  The home health care aide can assist with all activities of daily living, including, but not limited to, bathing, grooming, toileting, ambulating, meal preparation, laundry and light housekeeping.  Medical Model Daycare programs offer a place for seniors to go during the day and then return home at night and will provide meals, rehabilitation, monitoring of health conditions and assist with personal hygiene.  Unlike Social Model Daycare, the individual must require assistance with activities of daily living to qualify for Medical Model Daycare.  Once the individual is approved for either a home health aide or Medical Model Daycare, the individual may be enrolled in a MLTC.



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Wednesday, February 22, 2017

Paying Bills When You Have a Medicaid Trust

Question:  My mother has an irrevocable trust she set up for Medicaid planning purposes. My sister is the trustee and she is paying moms bills from the trust.  Is that correct?  

Answer: No, if the irrevocable trust was set up properly to protect your mom's assets in case she needs long term care from the Medicaid program, then your sister is not correct. 

An irrevocable trust of this kind is meant to protect the principal of the assets placed into it. This may be a residence, brokerage account, bank account, etc. Your mom is only entitled to the income earned on the assets. Therefore, to the extent your sister paid the bills beyond the amount of income produced by trust assets, she improperly invaded the trust, which can put all trust assets in jeopardy. 

The concept behind this type of trust is that since mom is not able to access the accounts in the trust beyond the income, she cannot use those funds for her long term care costs and can seek assistance from the Medicaid program. If your mom needs long term care in the home, including a personal care aide to assist her with activities of daily living, then the assets properly held in trust are not considered hers for eligibility purpose starting on the first of the month after which she transfers the assets into the trust. If your mom needs to reside in a skilled nursing facility, then the assets must be in the trust for five years before they will be deemed unavailable to her for eligibility purposes. As you can imagine, if Medicaid sees that your mom is using the trust principal for her benefit, it would be expected that she would also be able to use that money to cover the cost of her care. 


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Monday, February 13, 2017

Joint Accounts and Medicaid

Question: My mother is 85 years old and in good health.  She has $75,000 in a joint bank account.  If she becomes ill and needs Medicaid, is that money protected?  Is there any way she can gift those monies to me and still be eligible for Medicaid if she requires care in a Nursing Home?

 

Answer: First, to answers your questions, monies held in a joint bank account are presumed to be 100% the property of the applicant unless it can be proven that the money does not belong to t the applicant. Should your mother transfer or gift that that money within five years of needing nursing home care, a penalty will be assessed for that transfer. It is important to note that there is no look-back when applying for Community Medicaid (care in the home) and therefore a transfer in that instance would not create a penalty.  When, and if, your mother applies for Medicaid, she is only permitted to have $14,850.00 in liquid, non-retirement assets.  She is also permitted to have qualified or “retirement” funds in any amount so long as she is taking a monthly distribution, an irrevocable pre-paid burial account in any amount is also an exempt asset.  The money in the joint bank account will be deemed 100% belonging to her despite the fact that the account is held jointly with you.  You can overcome that presumption if you are able to prove that you deposited those monies into the account and that they belonged to you prior to the deposit.  As is in most cases, assuming that these funds belong to your mother and your name exists on the account for convenience purpose, the entire account will be considered hers.

The rule is different if the funds were held in a joint stock account.  There is no presumption that the account belongs solely to your mother.  Each one of you is deemed to own one-half of the joint stock account.  So, if you mother transferred her $75,000 bank account to a joint stock account, she will effectively be transferring one-half to you at the time the new account is set up. 


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Wednesday, February 8, 2017

Second Marriage Estate Planning

Question:  My spouse and I each have children from previous marriages. While we want to provide for our surviving spouse when the first of us passes away, we want to ensure that each of our respective estates is ultimately going to our respective children. Is there a way to accomplish this?

Answer:  That is not an uncommon question at all.  There are several issues for you to consider, the first consideration being the execution of a post-nuptial agreement, wherein each of you agree to waive certain interests that spouses have in the other’s estate.

New York law states that a surviving spouse has a right of election, that is, a right to receive one-third (1/3) of their spouse’s assets at the death of the first spouse.  That means that even though you might effectively “disinherit” your spouse by distributing probate and non-probate assets to your respective children, the surviving spouse can still elect to receive one-third of your estate (this may include assets that pass through or outside of your Will, such as joint accounts).  Although you each may profess to have no interest in the other spouse’s estate, that does not prevent the surviving spouse from changing his or her mind when the first spouse dies.  A pre-nuptial agreement or a waiver of the right of election can solve this problem.  In this way, each spouse mutually waives their right to take 1/3 of the first deceased spouse’s estate.  While the right of election is usually only exercisable by the surviving spouse, there are some instances where someone appointed to act on behalf of the survivor could receive court approval to assert this right to an elective share. 

The manner in which assets are titled and the type of investments make a difference.  The surviving spouse may have a right of election against some but not all of your assets.  The simple use of designated beneficiaries, or holding property jointly with another person with rights of survivorship, may pass those assets to your selected beneficiary but may not prevent the spouse from electing against those assets.  By changing the way assets are invested, you may be able to avoid the right of election.  For instance, life insurance is not subject to the elective share.  Finally, you should carefully review all of your assets (including life insurance and retirement funds) to see how they are titled and review the designation of beneficiaries as well.


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Wednesday, February 8, 2017

Medicare Rehabilitation Days

            As you may know, Medicare will pay for a patient to receive rehabilitation in a facility if they have a qualifying stay in a hospital: being admitted to the hospital for two nights.  The first twenty days of rehabilitation are completely covered by Medicare.  The twenty first day through the one hundredth day will have a co-payment of $161 per day.  This co-payment may be covered by a Medicare supplemental plan.  However, it is important to note that while there is a potential to receive one hundred days of rehabilitation, it may not be determined that rehabilitation is no longer needed and the discharge will be set up.

         The facility is required to give written notice that they believe Medicare will no longer cover the patient.  This comes as a “Notice of Medicare Non-Coverage.”  This notice gives the patient the right to appeal the decision.  In order to make an effective appeal, it is important to know the appropriate standard that the law requires the facility use in making a determination. 

That standard was inconsistent with Medicare regulations. The true standard is whether the patient needs the rehabilitation to maintain.  

        In 2011, a Federal Court case was decided on this issue.  In that case, Medicare skilled nursing service recipients, challenged the failure to improve standard.  The settlement agreement by the parties rejected the failure to improve standard and stipulates that the standard for terminating services is not whether the patient’s condition is likely to improve, but rather whether the condition will worsen if services are terminated. Therefore, skilled services should be continued so long as skilled therapies are needed to maintain the patient’s ability to perform routine activities of daily living or to prevent deterioration of the patient’s condition. This is the represents the current legal standard for denying skilled nursing coverage under Medicare.


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Friday, January 27, 2017

Small Estate Proceedings

Question:  My father died without a Will leaving only a checking account in his sole name with a balance of $15,000. My brother and I are his only heirs.  I have heard that there is a proceeding in the Surrogate’s Court to handle small estates.  Can you tell me about it?

Answer:  It is important to note that not all estates require a full probate or administration proceeding.  The small estate also known as a voluntary administration proceeding is a simplified Surrogate’s Court procedure available if the decedent passed away after January 1, 2009 and had $30,000 or less in personal property. The voluntary administration proceeding cannot be used if the decedent died owning real property held solely in his/her name. If the decedent conveyed most of his/her property to a trust but there remains some property titled outside of the trust, the voluntary administration proceeding may also be available to collect those assets. The proceeding is available if the decedent died with or without a Will.

            The person who files the “Affidavit of Voluntary Administration” and asks to be appointed as Voluntary Administrator is either the nominated executor in the decedent’s Will or the closest living relative if the decedent died without a Will.   The person filing the Affidavit is asking the Court to let them collect the assets of the decedent, pay any debts and distribute the property to people who have a legal right to inherit either under the Will or under the laws of intestacy if the decedent passed away without a Will.    


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Nancy Burner & Associates, P.C. has offices in Setauket, Westhampton Beach, and Manhattan New York.
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© 2016 Nancy Burner & Associates, P.C. | Copyright
12 Research Way, East Setauket, NY 11733 | Phone:631-941-3434
82 Main St., Westhampton Beach, NY 11978 | Phone: 631-288-5612
1115 Broadway , Suite 1100, New York, NY 10010 | Phone: 212-867-3520

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