Suffolk County, NY Estate Planning and Elder Law Blog

Friday, August 11, 2017

Powerless Power of Attorney

Question: My father executed a Power of Attorney and named me as the Agent.  I was recently told by his bank that they would not accept my Power of Attorney, what are my options?

Answer:  A Durable Power of Attorney is an integral part of any estate plan.  A validly executed Power of Attorney will allow you, the Principal, to designate an Agent to act on your behalf and virtually step into your shoes with respect to all of your business and financial matters.  The purpose of a Durable Power of Attorney is to have one comprehensive document that will allow an agent to transact business on all accounts regardless of the financial institution. Where an individual becomes incapacitated without having these documents in place, the family may find themselves petitioning the Guardianship Court in order to have the authority to do the very same thing that a valid and comprehensive Power of Attorney can provide.      

Recently we have noticed a trend at some financial institutions where they have refused to honor a validly executed Durable Power of Attorney.  They insist that an institution specific form be signed by the account owner in front of a notary.  In some cases, this may be impossible as the account owner has become incapacitated.  This could force an individual, who had the appropriate documents in place, to now be the subject of a Guardianship proceeding.  In fact, on May 6, 2016 the New York Times published an article, “Finding Out Your Power of Attorney Is Powerless”, by Paula Span.


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Monday, August 7, 2017

Probate Estate vs. Gross Estate

Question:  What is the difference between my gross taxable estate and my probate estate?

Answer:  Your “gross taxable estate” consists of the assets which you have an interest in at death, even if the assets do not pass by virtue of your last will & testament.  Your gross estate will also include gifts you made during life which exceeded the amount you could gift on an annual basis.  (currently $14,000 per person per year). Your gross taxable estate may also include certain property which transferred during your life in which you retained an interest.  For example, if you transferred property to your children but retained a life estate, that property would still be part of your gross taxable estate.  Or, if you have property or financial interests that would become payable upon your death, such as life insurance, that may also be included in your gross estate.

Typically, the property that constitutes a person’s gross taxable estate is property held in the deceased person’s name ether jointly or solely. However, it may also include ownership interests in trusts, partnerships, and jointly owned property. For example, your gross estate may include:


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Monday, July 31, 2017

Health Care Proxy

Q: Do I need a lawyer to sign a health care proxy?

A: No, you do not need a lawyer to sign a health care proxy.  The legal requirements of a health care proxy are that you have two adult witnesses, neither which needs to be a medical or legal professional. However, it is important to note that your named agent cannot be a witness.  A health care proxy is a document that states who will make your medical decisions if a doctor deems you unable to make them for yourself.  We also recommend our clients name alternate agents in case your first agent is unavailable or unwilling to serve.

Once you understand the purpose of a health care proxy, you should take the time to consider who you want to name as agent and successor agent.  The choice of agent is an important one because they will be required to make medical decisions for you when you are at your most vulnerable point.  Remember, the agent is only acting if you have been deemed incapacitated by a doctor.  The agent is authorized to make healthcare decisions on your behalf this includes any treatment, service or procedure to diagnose or treat your physical or mental condition.  Your agent can also make the decision to remove or provide life-sustaining treatment, as long as your health care proxy form states that they know your wishes regarding these matters.

Since your agent will have this broad authority, it is important that you choose someone you trust will make your healthcare decisions according to what you would want if you had the capacity to do so yourself.


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Monday, July 24, 2017

Non-Hospital DNR vs. Traditional DNR

Question:  My mother is in a nursing home and she has a “non-hospital DNR.”  What is that and how does it differ from a traditional DNR?

Answer: The “Do Not Resuscitate” order, or “DNR” came about from a task force commenced by Governor Mario Cuomo in 1985 wherein experts were tasked with reconciling outstanding issues with legally withholding life sustaining treatment. The result was the traditional DNR order which applied to patients in an institution such as hospitals, nursing homes and mental health facilities. Unlike a Living Will which is a general statement of wishes that a person would not want life sustaining treatment administered if there were no hope they would make a meaningful recovery, DNRs are directives which only apply to incidents of cardiac respiratory arrest and prevent the use of cardiopulmonary resuscitation.

The DNR order must be signed by a physician on the Department of Health form and recorded in the patient’s medical record. It can be signed by the patient herself, or if she lacks mental capacity, the DNR can be signed by a family member or health care agent. The DNR order must be reviewed periodically by a physician. This means they should be re-visited every seven days for hospital patients and at each visit for outpatients, but at least every 60 days for nursing home residents.

Due to the fact that the traditional DNR can only be used in an institutional setting, in 1991 the legislature expanded the Public Health Law to include a non-hospital DNR order. This would cover the prevention of cardiopulmonary resuscitation in emergency situations outside of a facility.  The non-hospital DNR would be utilized for emergency services personnel, including first responders and emergency medical technicians, when the patient is at home or in another community setting. 


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Monday, July 17, 2017

Chronic Medicaid

Question:  My mother recently fell and is in a rehabilitation center with Medicare paying her bill.  I don’t think I will be able to take her home this time, it seems that she will need full time nursing home care.  I understand that there is a five-year lookback, how will this affect my mother’s eligibility for Medicaid.   

 Answer: As you are likely aware, Medicaid is a means tested program and as such, to be eligible applicants must meet certain income and eligibility requirements.  These requirements differ depending on the program the individual is applying for.  For Chronic Medicaid, the Medicaid that will pay for a nursing home, the applicant can have up to $14,850.00 in their name in non-retirement assets.  They can have an unlimited amount of retirement assets so long as they are receiving a monthly a maximized monthly distribution.  An irrevocable pre-paid funeral is also considered an exempt resource.  You did not mention whether your Mother was married or single, where the applicant is married and there is a spouse living in the primary residence that residence is also exempt. 



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Monday, July 17, 2017

It’s Not Too Late To Elect Portability

 The estate tax concept tax known as “portability” is permanent as a result of the enactment of the American Taxpayer Relief Act of 2012. Portability allows a surviving spouse to use a deceased spouse’s unused estate tax exclusion (up to $5.49 million in 2017).

            For those dying after December 31, 2011, if a first-to-die spouse has not fully used the federal estate tax exclusion, the unused portion called the “Deceased Spousal Unused Exclusion Amount,” or “DSUE amount,” can be transferred or “ported” to the surviving spouse. Thereafter, for both gift and estate tax purposes, the surviving spouse’s exclusion is the sum of (1) his/her own exclusion (as such amount is inflation adjusted), plus (2) the first-to-die’s ported DSUE amount.

            For example: Assume H and W are married, and H dies in 2017. H owns $3 million and W owns $9 million in assets. H has the potential of leaving up to $5.49 million free from federal estate tax to a bypass or credit shelter trust. This would avoid federal estate tax in both spouses’ estates. However, because H only has $3 million in assets, he does not take full advantage of the entire $5.49 million exclusion. Prior to portability, $2.49 million of the H’s exclusion would have been wasted. With portability, his remaining $2.49 million exclusion can be saved and passed to W ‘s estate, increasing the amount she can leave her beneficiaries free from federal estate tax. With a 40% federal estate tax rate, this would save W’s estate approximately $996,000 in federal estate tax. 



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Monday, July 10, 2017

IRA Beneficiary Designations

Q:  I have recently rolled over my employer sponsored 401(k) plan into an existing IRA. I am not sure if I need to update the beneficiary designation forms on file; can you give me some advice?

A: Some of the most costly estate planning mistakes I see involve retirement accounts. The mistakes are usually made in the beneficiary designation forms.  These forms are typically completed when the account is opened. It is advisable to periodically check the designation on file, to make sure it’s still what you intend.  If you have had a major change in your family situation, for example, if you or a family member got married or divorced; a loved one has passed away; or have had children or grandchildren be sure to make sure your beneficiary designation forms are up to date.

With an IRA, you can name any beneficiaries you want. Some examples include friends, family members, a trust or charity. Make sure to name both primary and alternate (contingent) beneficiaries. A trust must be property drafted and meet certain requirements set by the IRS in order to be accept the IRA distribution. An experienced estate planning attorney should prepare this trust. Never name a minor as a beneficiary of an IRA.  Instead, name the trust for the minor’s benefit as the beneficiary.

 


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Friday, June 30, 2017

Power of Attorney vs. Guardianship

Q: A few years ago my mom was diagnosed with dementia and recently she is having trouble paying bills on time.  What is the best way for me to make sure the bills are paid?

A: The best way for you to help mom would be for her obtain a power of attorney. Being diagnosed with dementia doesn't necessarily mean she does not have the capacity to sign the document. However, if her dementia is so severe that she is not able to understand what she is signing, you may need to commence a Guardianship proceeding.  The appointment of Guardian the Person and Property is appropriate when there is no power of attorney and health care proxy in place. Sometimes, a Guardianship is needed even if the documents are in place, because the power of attorney or healthcare proxy is deficient.  Not all documents are the same.  Therefore, it is important to review the documents with an attorney that practices in this area.  Do not rely upon documents taken off the internet. 

Assuming, a Guardianship is necessary, the Court will appoint a Court Evaluator to investigate the circumstances.  The Court Evaluator is an objective third party appointed to report to the Court and he or she is often referred to as the “eyes and ears” of the court. The evaluator will interview you, mom, and any other family members or interested parties. That person will then give an opinion to the Court on whether your mom is incapacitated, if she needs a guardian, what powers are needed and who would be an appropriate person to be named as guardian. 


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Monday, June 26, 2017

Community Medicaid

For most of us, if a time ever came that we needed assistance, the preferred option would be to remain at home and receive whatever care services we needed in our familiar setting surrounded by family.  For many, the Community Based Long Term Care Program, commonly referred to as Community Medicaid makes that an affordable and therefore viable option. 

Oftentimes we meet with families who are under the impression that they will not qualify for these services through the Medicaid program due to their income and assets.  In most cases, that is not the case. Although an applicant for Community Medicaid must meet the necessary income and assets levels, oftentimes with planning we are able to assist in making an individual eligible with little wait.  An individual who is applying for homecare Medicaid may have no more than $14,850.00 in non-retirement liquid assets.  Retirement assets will not be counted as a resource so long as the applicant is receiving monthly distributions from the account.   An irrevocable pre-paid burial fund is also an exempt resource.  The primary residence is an exempt asset during the lifetime of the Medicaid recipient however, where the applicant owns a home it is advisable to consider additional estate planning to ensure that the home will be protected once the Medicaid recipient passes away. 

With respect to income, an applicant for Medicaid is permitted to keep $825.00 per month in income plus a $20.00 disregard. However, where the applicant has income which exceeds that $845.00 threshold, a Pooled Income Trust can be established to preserve the applicant’s excess income and direct it to a fund where it can be used to pay his or her household bills.  It is important to note that there is no “look back” for community Medicaid.  


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Friday, June 23, 2017

Managed Long Term Care Evaluation

Question:        My mom has been approved for Community Medicaid and is eligible to receive a personal care aide in her home.  I have been trying to schedule an evaluation with a Managed Long Term Care Company but I have been having some difficultly.  So far she had one evaluation and she was not awarded sufficient hours.  Should I be hiring an attorney to assist with the home evaluation component of Medicaid?

Answer:          The home evaluation done by the Managed Long Term Care Company (or “MLTC”) can be a complicated process. It is also the most important as the MLTC will determine the benefits your mother is entitled to through the Medicaid program.  Once an individual is financially approved by the local Department of Social Services for Community Medicaid, he or she must enroll with a MLTC.  The MLTC will send a nurse to the Medicaid recipient in order to evaluate and create a care plan.  The evaluation typically will result in an award of hours to the Medicaid recipient for a home health aide to come to the home and assist the recipient with activities of daily of living.  The amount of hours can consist of a few hours per day or live-in care depending on the needs of the Medicaid recipient.  If the Medicaid recipient is satisfied with the care plan, he or she may choose to enroll with the MLTC.  Otherwise, he or she can request another evaluation with a different MLTC.

Our office determined that our clients were struggling with maximizing the care component at the MLTC evaluations.  Community Medicaid is a great benefit, but the client needs to have an appropriate care plan along with sufficient home health care hours in order to ensure their safety and ability to remain at home.  


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Monday, June 19, 2017

Funding Your Irrevocable Trust

Question:  My mother has a trust that is supposed to protect her assets in case she needs Medicaid in the future.  How do assets get into a trust, I am confused.

Answer:  In order for an asset to be owned by a trust, there must be a transfer. The five year look back for Medicaid does not even begin to run until the month after the asset is put in the trust.  That is true for each and every asset transferred.  So, if you transfer a deed in January 20017, the five year period begins to run on February 1 and ends on January 31, 2022.  If you put another asset in the trust in March 2017, the look back period begins April 1, 2017 and ends on March 31, 2022.   That penalty period is just for the new assets transferred in March, not for all the assets in the trust. 

The method of placing assets in the trust depends upon the type of asset.  If you are putting monies from a savings account into the trust then the Trustee must open the trust account.  Once the account is open you can remove the savings from your account and deposit in the Trust account.  This will probably require the Trustee to go to the bank to create a trust account.  If the asset is a life insurance policy, then you will be requesting change of ownership and change of benenficiary forms from the insurance company and name the trust as the new owner. 


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© 2017 Burner Law Group, 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
45 W 34th St Suite #1203, New York, NY 10010 | Phone: 212-867-3520

Attorney Website Design by
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