Suffolk County, NY Estate Planning and Elder Law Blog

Friday, December 15, 2017

Buying and Selling Home in a Trust

Question: I put my house in an irrevocable trust two years ago to protect it in case I need nursing home care in the future. I now want to sell the house and use the proceeds from the sale to buy a condo. Can my trust sell my house and buy the condo?

Answer: Yes, a trust can buy and sell property.

Irrevocable trusts created for the purpose of protecting assets from the cost of long term care are commonly referred to as Medicaid Qualifying Trusts (“MQTs”). This is because Medicaid is the primary payor of nursing home costs in the United States. In order to be eligible for Medicaid, the applicant would need to meet certain income and asset requirements. Therefore, in order to protect assets to qualify for Medicaid, the Grantor, or the trust creator, would transfer assets into the trust before they need care and if those assets remain in the trust for five years, they would be considered unavailable for Medicaid eligibility purposes. This five-year “look back” refers to the time period that Medicaid will examine an applicant’s finances in order to determine their eligibility. So long as transfers were made more than five years in advance of needing the care, no penalty will result.

Many people hear the word “irrevocable” and believe that once they have transferred assets into an irrevocable trust, they will lose complete control of their property. However, Medicaid qualifying irrevocable trusts can, and should, be drafted to allow the Grantor to maintain a lot of control over assets in the trust. 


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Monday, December 11, 2017

Original Estate Planning Documents

     Regardless of your age, the creation and maintenance of a thorough Estate Plan is essential.  An Estate Plan ensures that your needs, your family’s needs, and financial goals are met during your lifetime and upon your death.  A thorough and comprehensive plan should include a Last Will & Testament, Health Care Proxy, Living Will, and Power of Attorney.  For some clients the creation of a Trust is also practical. Through the creation of a Last Will & Testament and/or a Trust you can establish how your assets will be distributed upon your death.  Additionally, you can ensure that the financial needs of your children or disabled beneficiaries are met after you pass away by establishing Trusts for their benefit. By creating a Health Care Proxy, you can designate a succession of individuals to make health care decisions on your behalf, if and only if, you are incapable of making them on your own.  An Estate Plan would also include the creation of a Power of Attorney, through which you can designate someone to handle your financial matters in the event you become incapable of doing so. 

      Once you have taken the time to create your Estate Planning documents, you must properly store and protect these original documents.  This is particularly important with regard to your Power of Attorney since many banks and financial institutions require the original signed document. Additionally, the Executor of your Last Will and Testament must file the original document with the Surrogate’s Court. It is important to remember to not remove the staples from your original Last Will and Testament.


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Monday, December 11, 2017

Demystifying Chronic Care Medicaid

What does look-back mean? What is spousal refusal? Will Medicaid take my house if my husband has to go to a Nursing Home? All too often these are the questions we hear from our clients who are faced with having to navigate the Medicaid landscape in crisis mode.  In New York, the Medicaid program can provide a source of payment for those who are financially eligible and require care, either in a nursing facility or in their own home.  In order to be eligible for Chronic Medicaid (payment for nursing home care) an individual must meet certain income and asset requirements.  To start, the applicant may have no more than $14,850.00 in liquid non-qualified (non-retirement) assets in their name.  They may have qualified (retirement) assets in an unlimited amount, provide that they are taking a monthly distribution.   When applying, the Department of Social Services will require a full financial accounting from both the applicant and his or her spouse for the five years immediately prior.  This is what is often referred to as the “look-back.”  The purpose of this investigation is to determine among other things whether any transfers were made during this time period which would affect eligibility.  The rule is that for every $13,053.00 (in 2018) that was transferred a one-month penalty will be imposed.  For example, if in the financial review it is discovered that the applicant gifted $40,000.00 to his children during that “look-back” period, a determination will be made which imposes a penalty for roughly three months.  What this means is that Medicaid will not pay for the first three months of nursing care and the family will be responsible to pay privately.  The aggregate result of this type of penalty is roughly a dollar for dollar penalty meaning that for each dollar that you transfer you will have to pay a like amount in nursing home care should the need arise.  This rule applies unless the transfer is considered an exempt transfer.

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Friday, December 8, 2017

Disqualification of a Nominated Executor

Q: My mother recently passed away. I have one brother and one sister. The will divides the assets equally among the three of us.  My mother’s will has nominated my sister as Executor. She’s had some financial problems in the past and I do not think that she should serve as Executor. Do you have any advice for me?

A: The person selected to act as the Executor can be anyone that the testator wants to be in charge of administration of the estate. There is no requirement that the Executor have any experience or expertise in handling estate matters or have any financial background. The Courts give the selection of an Executor by the testator great deference and it is honored unless there exists a ground for disqualification of the person nominated. 

There are certain circumstances in which the Court will not appoint the Executor nominated by the testator. Surrogate’s Court Procedure Act § 707 states that a nominated executor is ineligible to serve it if they are: (a) an infant; (b) an incompetent or incapacitated person as determined by the Court; (c) a non-citizen or non-permanent resident of the United States; (d) a felon; and (e) one who does not possess the qualifications required of a fiduciary by reason of substance abuse, dishonesty, improvidence, want of understanding, or who is otherwise unfit for the execution of the office.  The grounds for disqualification contained in (e) contemplate a nominated Executor that is likely to jeopardize estate assets, and put the interests of beneficiaries at risk.



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Monday, December 4, 2017

Updating Your Estate Planning Documents

Q: How often do I need to visit with my estate planning lawyer?

A: Many clients think of signing estate planning documents as an item to check-off of the “To Do” list.  This may be the case, especially for those who have not put anything in place.  However, it is important to revisit this process periodically.  Estate planning is a dynamic process that may need updating or tweaking based on changes to your family structure, health, day to day life, or the state of the law.

Estate planning often includes signing documents regarding the treatment of your affairs while you are alive as well as after you are deceased.  Most people are aware that these documents may include a last will and testament or a type of trust agreement but the reach of a good estate plan goes beyond these documents.  On the healthcare side, clients often sign a health care proxy stating who will make medical decisions if they are found by a doctor to be incapacitated, and a living will that states whether or not you would like to be sustained by artificial means if you are in an incurable state.  On the financial side, a client can execute a power of attorney stating who can handle financial matters on your behalf.

Naturally you would seek out the advice of a lawyer if you would like to change your documents including adding or deleting beneficiaries, or updating who will serve as your agent under any of the documents. 


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Friday, December 1, 2017

Discussing Your Estate Plan Over the Holidays

Question: I just completed my estate plan and will be seeing my children over the holidays. What can I tell them about the role they will play as my Health Care Proxy, Power of Attorney, Executor and/or Trustee?

Answer: Congratulations on completing your estate plan! Now comes the fun part of sharing your wishes with your children. While it may not be the most festive of conversations, it is important that you discuss your plan with your children ahead of a crisis, so they are fully prepared for what role they will or will not play.

When you designate a child as an agent on your Health Care Proxy, you are designating the person who will make medical decisions for you if you are unable to do so. These decisions can include anything from routine care to surgical procedures to end of life decisions. As such, you should discuss what measures you would and would not want that agent to take. You should also discuss your medical history and what doctors you see on a regular visit. If you do want the agent to be able to make end of life decisions, be sure to have a Living Will. The Living Will is a statement of your wishes that you would not want to be kept alive artificially if you were in a vegetative state or an otherwise suffering from an incurable illness. This Living Will serves as the evidence that if your agent had to make that difficult decision, he or she is doing so at your direction and not using their own substituted judgment.


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Friday, November 17, 2017

Power of Attorney and Digital Assets

Question: Should I update my power of attorney every few years even if my agents have not changed?

Answer: Yes; powers of attorney, indeed all estate planning documents, should be reviewed periodically. This is because even though your wishes may not have changed, the law may have changed.

Powers of Attorney are particularly important to keep current because, unlike the Health Care Proxy which confers broad authority to make decisions, the Power of Attorney must be on a specific form and enumerate, with specificity, what powers you grant to your agent. Because of the nature of having to “list” what your agent can do, this form keeps estate planning attorneys on their toes by requiring us to continually add powers to the document as new caselaw or circumstances develop.

The most recent example of this came last year when Governor Cuomo signed the Fiduciary Access to Digital Assets Act into law. The new law provides fiduciaries with the right to access digital assets. However, in order to give this power under a power of attorney, the power referencing digital assets must be specifically referenced in the modifications section. Without such a reference, the institution holding the digital asset could refuse to accept the power of attorney. Absent another designation of authority to access your digital assets, most loved ones are bound by a Terms of Service Agreement, typically consented to in haste when creating an email or social media account. The law permits the owner of digital asset to direct who can access the account and to what extent.


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Monday, November 13, 2017

Contesting a Will

Q:   If I specifically disinherit my child in my Will, does he or she still have the right to contest my Will?

A:  There are certain individuals who have the right to contest your Will even if they are specifically disinherited, whether or not they are named as a beneficiary under your Will or if they were left with a disproportionate share of your estate.  A disinherited child has the right to challenge or contest your Will because, if you died without a Will, your child would receive a share of your estate through the laws of intestacy. 

A disinherited child is required to receive notice that your Will is being offered for probate in the Surrogate’s Court by the Executor named in your Will.  One form of such notice is called a “Waiver of Process; Consent to Probate”.  The Executor is required to obtain a signed Waiver from your disinherited child.  If your child signs the Waiver, he or she is stating that the Will is valid and that the person named in the Will as Executor should be appointed as such. 

Alternatively, if your child does not sign the Waiver discussed above, there is the more time consuming and expensive process of obtaining a probate citation and a court date to appear in Surrogate’s Court to formally object to the Will.  Once the Court issues the citation, it will be served on your child.  On the citation return date, your child and/or his or her counsel will be required to appear in Court to formally contest your Will.  If no one appears on the citation return date, your child effectively waives his or her right to contest your Will. 


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Monday, November 13, 2017

Pre-need & Chronic Medicaid

When someone enters a nursing facility, an application for Chronic Medicaid may be appropriate.  The average cost of a nursing facility on Long Island is $15,000.00 per month.  This type of cost would exhaust assets very quickly in most cases.  Chronic Medicaid is the program that covers nursing home care.  Medicaid is a needs based program which means there are resource and income requirements that must be met.  For 2017, an individual applying for Chronic Medicaid can have no more than $14,850.00 in liquid non-qualified assets, an unlimited amount of retirement assets so long as the applicant is taking a monthly required distribution and an irrevocable pre-paid funeral trust.  The applicant may keep no more than $50.00 per month in income.   

Chronic Medicaid has a five-year look-back.  The look-back refers to the period of time that the Department of Social Services will review your assets and any transfers that you have made.  To the extent that the applicant has made transfers or has too many assets in their name to qualify, they will be ineligible for Medicaid.  If the applicant gifted or transferred money out of his or her name in order to qualify for Medicaid, the Department of Social Services will total the dollar amount of gifts and for each approximately $12,811.00 that was gifted, one month of Medicaid ineligibility is imposed.  For example, if an individual gifted away approximately $50,000.00 within the five-year time period, the Department of Social Services will impose a four-month penalty.   It is also important to note that the ineligibility begins to run on the day that the applicant enters the nursing home rather than on the day that the gift was made.  


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Friday, November 10, 2017

Health Care Proxy

In our Elder Law practice, we often times see our clients experiencing difficulty in getting health care information regarding a love one.  While privacy and HIPAA are important, you want to ensure that you are able to get important information regarding your love one’s medical condition.  A Health Care Proxy is a document in which you designate an agent to make health care decisions for you in the event you are unable to make these decisions for yourself.  The Health Care Proxy often contains language allowing your healthcare agent to hire and fire physicians and health care professionals.  Federal regulations specifically “HIPAA,” or the Health Insurance Portability and Accountability Act, make it difficult for anyone, even a spouse, to obtain any medical information on your behalf absent a properly executed Health Care Proxy.  You must read the Health Care Proxy carefully and make sure the document gives your agent the ability to do exactly what you would like them to do, for example, have access to your medical records.  It is also important to note that signing a new Health Care Proxy will revoke the previous Health Care Proxy you may have signed in the past.  This is important when you take the time to establish a comprehensive Health Care Proxy and then go to the hospital and sign a very basic Health Care Proxy with the staff at the hospital which will revoke the comprehensive one you signed previously.

In addition to the Health Care Proxy, you can sign a HIPAA release form which would allow the individuals listed in your Health Care Proxy access to your medical records.  The Healthcare Proxy itself may give the same authority; however, the HIPAA release form is a very simple form which is easily recognizable by most hospitals and doctor offices.  This can simplify the process to get medical records instead of using the Healthcare Proxy. 


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Wednesday, November 8, 2017

Spousal Medicaid

Question: My husband suffers from Alzheimer’s disease and may soon need a nursing home.  I have been told that if he needs to go to a Nursing Home, they will take our house and I will have to give them all of his income, is this true?

Answer: No, it does not have to be.  Because Medicaid is needs based program, certain income and asset requirements must be met in order to be eligible.  The good news is that those requirements take into account that where there is a situation where one spouse requires nursing home care, there is often a spouse still residing in the community who depends on the joint income and assets to pay their expenses.  For that reason, the Medicaid program allows certain spousal allowances.  Specifically, where there is a spouse living in the community, that spouse is entitled to keep up to $3,022.50 in combined income after payments of medical premiums.  What this means is that where you have a husband and wife, and one spouse requires Nursing Home care, the community spouse can keep his or her income and as much as the institutionalized spouses’ income to bring them up to $3,022.50.

In addition, although the applicant is permitted to have no more than $14,850.00 in his name at the time of application (not including retirement accounts and an irrevocable pre-paid burial which are exempt and not counted towards the $14,850.00 asset limit) the community spouse is permitted to keep $120,900.00 in liquid assets plus a home.


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12 Research Way, East Setauket, NY 11733 | Phone:631-941-3434
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