Suffolk County, NY Estate Planning and Elder Law Blog

Wednesday, January 17, 2018

Family Healthcare Decisions Act

Q:  My mother is 87 years old.  She is getting more confused each day and refuses to sign a health care proxy or power of attorney.  What will happen if she becomes unable to manage her affairs?

A: If your mother becomes unable to manage things on her own there may be the need for a guardianship proceeding, however this is usually used as a last resort.  Regarding healthcare decisions, there is a New York State law called the Family Healthcare Decisions Act which lists, in order of priority, who can act as a surrogate decision maker for a person that is unable to make their own decisions regarding treatment.  It is important to note that this law only applies if someone is in an institution, meaning a nursing home, rehabilitation facility, or hospital.  At the top of the list of substitute decisions makers in the absence of a health care proxy is a court appointed guardian.  This is followed by a spouse or domestic partner, adult child, parent, sibling, and then a close friend.  Problems can arise with these default designations.  For example, if the person who is first in line to make decisions does not act as the patient would want them to, or if there are multiple persons at the same priority level and they do not agree on the plan of action.  If your mother understands that this default would be in place, she may be motivated to designate an agent to know she picked someone who is aware of her wishes.

The top of the priority list is a guardian appointed by the court.  If your mother has not signed a health care proxy, you could bring a guardianship proceeding before the court to ask for the authority to make these decisions. 


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Friday, January 12, 2018

Estate Accountings

There are many steps and layers associated with the administration of an estate.

Ultimately, for most estates, the goal is to distribute the assets to the respective beneficiaries which are named in the decedent’s Will or are intestate heirs pursuant to the laws of intestacy. As part of this administration process, and prior to making any final distributions, the beneficiaries of the estate are entitled to receive and review an accounting prepared and provided by the fiduciary for the estate.

One of the fiduciary duties the executor or administrator is tasked with is to marshal the assets of the estate. The accounting reports to the beneficiary the assets of the estate, the income collected during the pendency of the administration, the expenses, debts and claims that were paid on behalf of the estate, and the amount and value of funds that ultimately remain on hand to be distributed to the beneficiaries.

The function of the accounting is to provide a clear and concise review, in proper reportable form, of all of the estate receipts and expenditures of the estate so that the beneficiary fully understands exactly why he or she is receiving a certain sum of money. As discussed above, once the accounting is approved, the ultimate distribution is made in accordance with the terms of the probated Will or as provided by the laws of intestacy.


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Monday, January 8, 2018

Medicaid Resource and Income Levels

Q: What are the Medicaid Resource and Income levels?  I was told they change every year and differ from County to County.  Can you explain?

A: With the new year and the cost of living adjustment from social security, the State Department of Health adjusts the maximum amount of income and assets a Medicaid recipient can have in her name. As of January 1, 2018, a single person is eligible for Medicaid if she has assets totaling less than $15,150, up from $14,850 last year, and up to $842 in income (for home care Medicaid applicants), up from $825. 

In addition to these allowable funds, there are certain assets one can own over and above $15,150 that are considered exempt for eligibility purposes, as well as extra income amounts that can be disregarded.  There are also tools that can be used to allow the Medicaid recipient to retain the use of all of their income while receiving care at home through the Medicaid program, even when their income exceeds $842 per month. 

If an individual is in need of home care or nursing home care and has income or resources above the State levels, she will have to spend down or make certain allowable transfers for the Medicaid program to cover some or all of the cost of care.  This is where proper estate and Medicaid planning are important for families who foresee a need for assistance in the home or in a nursing home.


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Wednesday, January 3, 2018

Trusts and Medicaid Planning

Question:  My husband and I created a trust many years ago.   I am not sure whether this trust will protect our assets should we need Medicaid in the future.  I am also unsure of what other documents we have in place.  How do I know whether the trust that we have will protect our assets?

Answer:  This is a great question and unfortunately, one that is asked too late in many cases.  Initially, it is important to note that Revocable Trusts do not offer asset protection for the purpose of Medicaid planning in any situation.  In most cases, a Medicaid Asset Protection Trust will be an Irrevocable Trust, created and funded by you. There are other trusts that may offer protection for the purpose of Medicaid planning, but we will limit our discussion to the Medicaid Asset Protection Irrevocable Trust.  An indication of whether the trust is Revocable or Irrevocable will typically appear in the name of the trust, however, if you are unsure you should contact the drafting attorney and ask him or her for an explanation of the type of trust that you created.  It is also important to note that all trusts are not created equally and just because a trust is named “Irrevocable” does not necessarily mean it will pass muster for the purpose of Medicaid asset protection.  Unfortunately far too often we see trusts in our office that are entitled Irrevocable with a promise of protecting assets and because of a drafting error are in fact not drafted in such a way that if the need ever arose, would protect assets for the purpose of Medicaid planning.   Assuming that you created an Irrevocable Trust, the next consideration is whether that trust was properly funded.  Simply creating the trust is not enough.


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Friday, December 22, 2017

Does Community Medicaid Cover Supplies?

Question: “I am considering applying for Community Medicaid for my mom in order to cover the cost of home health aides.  I heard that Community Medicaid might pay for certain supplies my mom could use in her home, is that true?”

Answer: Yes.  The Community Based (Homecare) Medicaid program can assist families in paying for the cost of home health aides as well as other programs, supplies and equipment.  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. 

The MLTC will determine the amount of hours per day and days per week that the individual is entitled to have a home health care aide.  The determination is based upon the needs of the individual.  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. 

The MLTC will also cover Adult Day Health Care programs which offer a place for seniors to go during the day and then return home at night.  The entire cost of the program, including transportation, will be covered by Community Medicaid. 


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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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12 Research Way, East Setauket, NY 11733 | Phone:631-941-3434
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45 W 34th St Suite #1203, New York, NY 10010 | Phone: 212-867-3520

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