According to APS, signs of financial exploitation may include the following: missing personal belongings, suspicious signatures, little to no understanding of one’s monthly income, many checks made payable to “Cash”, numerous unpaid bills, discrepancies in income tax returns, large withdrawals from accounts and a changed Will or power of attorney, particularly with the addition of non-family agents and beneficiaries or family members who are not the natural objects of the person’s bounty. For family and friends who begin to notice signs of financial exploitation, or even if you think you may be a victim yourself, a quick call to APS’s 24 hour hotline (1-888-832-3858) can save the day. APS may be able to intervene before too much serious trouble begins, may be able to recognize signs of incapacity that require legal action and, if necessary, notify local police of criminal wrongdoing. Reports can be made anonymously.

As practitioners within the elder law community, we also run across situations in which a family member expresses concern about how their loved one is being treated by a neighbor, caregiver or sometimes even other family members. Determining when it is appropriate to call APS to report suspected elder abuse in our clients can be a difficult dilemma, since we are not always able to see the evidence firsthand and sometimes our clients deny any wrongdoing or concerns. However, APS reports that there are steps that you can take to protect yourself from potential financial exploitation.

1. Stay involved with friends, family and neighbors. Social isolation increases your risk for exploitation because the people who care about you are not around enough to notice you may be in trouble. Do not allow people into your home to provide care who are not licensed and had a criminal background check.
2. Beware of scams of all kinds. They can range from in-person to internet to email or telephone solicitations for phony charities, requests for help from a bogus relative (someone pretending to be your grandchild for instance), bogus threats of audit or overdue taxes from the IRS (the IRS does not call you to talk about your income taxes), exclamations that you have just “won a prize” (almost always a total scam or solicitation to purchase something you do not need or want) or claims that your computer has a virus that they can fix for a fee (nothing wrong with your computer). DO NOT give out your personal information to anyone who asks for it; if it seems potentially legitimate, you initiate a call to the bank or agency using a trusted phone number (like the one on the back of your credit card) to verify that the person asking for the information is doing so legitimately. Also you should know that if you are scammed once you are more likely to be targeted again.
3. Keep on top of your finances. If you need help with your finances, do not abdicate total responsibility. Ask lots of questions and review your account statements or have a trusted friend or family member help you do this. Shred documents with your personal information on it.
4. Do not sign documents you do not understand, whether it is in relation to an investment opportunity or for the provision of goods or services. Ask questions about risks, all costs and fees and be sure that you can withstand a loss or the worst case scenario.
5. Plan ahead for potential incapacity and work with trusted advisors who can assist you in making solid plans for the future and who can help you to choose agents who can assist you as well. A knowledgeable elder law attorney will be able to help you think through all the issues that may confront you as you age. Since everyone’s circumstances are different – from family to finances – one plan will not fit everyone. Work with trusted legal and financial advisors to craft a plan that works for you.

Remember June 15 is World Elder Abuse Awareness Day. Take some steps to protect yourself and those you love and give the attorneys at the Hook Law Center a call. We are here to help.

Ask Kit Kat – Moving North

Hook Law Center:  Kit Kat, why are shelter animals moving north from places in the south?

Kit Kat:  Well, it’s their best shot at not being euthanized. Warm weather places have a glut of animals in shelters that need homes. Warm weather and more daylight fosters more breeding and births. Shelters in the north, on the other hand, have the space and the people who are willing to adopt. So it’s a win for pets for sure! The number of animals which have had to be euthanized has declined dramatically since the 1970s when 20 million cats and dogs were put down. In 2011, the American Society for the Prevention of Cruelty to Animals estimated the number of animals euthanized was down to about 2.6 million. In 2017, it has declined even further to 1.5 million. That’s especially good news for cats who account for 60% of those euthanized.

So how are the pets transported? Well, there are a variety of ways, including bus, car, vans, and even planes. One very active group is called Rescue Express, based in southern California. In one year, they have transported more than 10,000 animals to safety in other regions, mostly in states to the north, like Oregon and Washington. “Nearly a third of the 30,000 dogs and cats received by a Portland, Oregon coalition of six shelters in 2016 came from outside the area, including from Hawaii,” according to Karin Brulliard, author of The Washington Post article reviewed here.

A success story is May, a charcoal-and-white pit bull mix, who came from a shelter in Los Angeles County, California. She had passed one temperament test, but failed the second one. The tests are required for adoption. Rescue Express agreed to transport her to Eugene, Oregon, and another rescue group said they would find her a home. She was then placed at Northwest Dog Project. She lives in her own cottage along with 10-17 other dogs, depending on the need. They have piped-in music and even skylights. Quite a change from the overcrowded situation she came from. According to director, Emma Scott, May will be evaluated and receive training. She ‘already knew how to sit, and now we’re working on her leash manners. …We’ll do everything we can to make her as adoptable as we can.’ With all that, May can’t help but succeed and find her forever home! (Karen Brulliard, “From death row to adoption: Saving animals by car, van, bus, and even plane,” The Washington Post, (Animalia), May 13, 2017)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post World Elder Abuse Awareness Day first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2017/05/what-do-you-mean-electronic-will/ Tue, 30 May 2017 14:42:54 +0000 http://www.seonewswire.net/2017/05/what-do-you-mean-electronic-will/ In a world of rapid change, the process of estate planning seems to have been relatively stagnant; at least until recently. The process has always been something like a client meeting with an attorney to discuss his or her wishes…

Gilfix and La Poll wishes to thank the hundreds of attendees, and wonderful nonprofit co-sponsors, for making our 13th annual Special Needs Seminar our best yet!

We were overwhelmed with the response, and with all of the kind comments we received from seminar attendees. We were also thrilled to see many attendees connecting with co-sponsor support organizations, including:

• Center for Independence of San Mateo
• Children’s Health Council
• Community Resources for Independent Living (CRIL)
• Jewish Family and Children’s Services
• Life Services Alternatives, Inc.
• National Alliance on Mental Illness (NAMI)
• Pacific Autism Center for Education (PACE)
• Parents Helping Parents and many more!

The seminars, lead by attorneys Michael Gilfix and Mark R. Gilfix, covered the importance and structure of special needs trusts, recent special needs legislative updates, including the Special Needs Trust Fairness and ABLE Acts, and an overview of how estate planning can incorporate these very important tools. Michael and Mark were thrilled with the quality of questions they received from audience members.

Gilfix and La Poll is proud to be one of the nation’s premiere special needs planning firms. We were overjoyed to connect with so many in the bay area community at our recent seminar.

We know many who signed up were unable to attend, and space and parking restraints meant we were unable to accommodate all who wanted to attend.

Because of this, we will be offering a special follow-up Special Needs Trust Seminar on June 22nd at the Bay Café (1875 Embarcadero Road) in Palo Alto. Space will be limited, and we anticipate a full house. If you hope to attend, we encourage you to register as soon as possible here.

Again, we thank you for making the Special Needs Trust seminar such a wonderful and successful event!

REGISTER NOW FOR OUR SPECIAL EVENT

Under the Digital Assets Act, a “digital asset” is broadly defined as “an electronic record in which the individual has a right or interest.”  The Digital Assets Act will permit a fiduciary – the executor or administrator of an estate, the trustee of a trust, the guardian and conservator of an incapacitated person, and the agent under a power of attorney – to manage the principal’s digital assets such as computer files, web domains, and virtual currency.  However, it will restrict a fiduciary’s access to electronic communications such as email and text messages (the “content of an electronic communication”) and social media accounts, unless the original user specifically consented to such access in a will, trust, power of attorney, or other record. Whereas the previous law concerning digital assets applied only to executors and administrators of estates, the new law will apply to also to guardians, conservators, and agents under powers of attorney, broadening the scope of the law, and will provide more specific guidance to the “custodians” of digital assets (those who carry, maintain, process, receive, or store digital assets) which closely mirrors the laws of other states that have enacted the Uniform Fiduciary Access to Digital Assets Act. What does this mean for you?  If you wish for your executor, trustee, or agent to be able to access the content of your electronic communications, as opposed to merely a log of the parties to and date of the communications, you should include wording in your will, trust, and power of attorney to specifically permit it, in accordance with the terms of the new Digital Assets Act.

Ask Kit Kat – Cats and Boxes

Hook Law Center:  Kit Kat, what can you tell us about cats and why they love boxes so much?

Kit Kat:  Well, we cats have our own special idiosyncrasies. One of them is that we love small, defined spaces. They make us feel protected and secure. It’s not just me saying this, or what you might have observed yourself about cats. Dr. Nicholas Dodman of Tufts University’s Cummings School of Veterinary Medicine says, “When young, they used to snuggle with their mom and litter mates, feeling the warmth and soothing contact. Think of it as a kind of swaddling behavior. The close contact with the box’s exterior, we believe, releases endorphins—nature’s own morphinelike substances—causing pleasure and reducing stress.” Pigs have a similar liking, he says about research he conducted with Temple Grandin of Colorado State University. However, for them, ‘lateral side pressure’ is all it takes to have a soothing effect.

More validation for cats’ preference of small spaces like boxes comes from Dutch scientists. Their research showed how shelter cats that were provided with boxes as retreats adapted much faster to their new environment when compared with those who were not provided boxes as a safe haven.

To take this a step further, it even appears that cats, with no available boxes at hand, will choose to sit in a taped representation on the floor or carpet of a box. It certainly is not a perfect substitute for the real thing, but it does represent to them, a smaller space which corresponds to their diminished stature.

And there you have it! To make your cat happy, all you have to do is provide a box or basket for them to snuggle in. My mom lines them with towels which can be regularly washed, so that the area is always fresh and clean! (Nicholas Dodman, “Your cat loves hopping into boxes. Here’s why.”

The Washington Post, Health and Science section, April 22, 2017; Originally published on theconversation.com.)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Virginia’s New Access to Digital Assets Act first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2017/05/the-role-of-an-elder-law-attorney-in-personal-injury-actions/ Mon, 15 May 2017 22:36:23 +0000 http://www.seonewswire.net/2017/05/the-role-of-an-elder-law-attorney-in-personal-injury-actions/ People are often surprised when they hear that elder law attorneys assist personal injury attorneys with public benefits issues associated with their case. Our working knowledge of the intricately woven issues associated with medical insurance, means-tested benefits, capacity and asset…

Traditionally, we have encouraged clients who see a realistic probability of needing to plan for not only the incapacity of a spouse who may survive them but also for the possibility that such spouse would be using public benefits at the time to consider the creation of a supplemental needs trust (“SNT”) in the Will of the first to die. However, because the surviving spouse has the right to receive an elective share outright, there has always been the concern that the failure to exercise that right created a transfer which would be attract a penalty for Medicaid purposes or, at the very least, would result in a Medicaid payback at the death of the surviving spouse. The new statute has created some alternatives.

The new statute provides that, if the surviving spouse is incapacitated at the death of the first spouse or within the time required for making the election for the elective share, then a conservator or an agent under a durable power of attorney may make the election for the survivor. In that case, the court is required to put the amount of the elective share in a trust for the benefit of the survivor. The trust as described in the statute both protects the survivor’s eligibility for public benefits and allows the assets remaining at the survivor’s death to pass to the beneficiaries chosen by the deceased spouse (typically children). Because the elective share amount is required to be placed in trust by the court, the surviving spouse cannot be considered to have made a transfer to which Medicaid could lay claim.

The statute further provides that if the surviving spouse is not incapacitated within the time required for making the election for the elective share, then assets placed in a trust with certain provisions will qualify for the elective share amount. Again, in this situation, because the elective share amount cannot be deemed to have been transferred by the survivor, Medicaid can make no claim on the assets held in the trust. However, in order to meet the requirements, the surviving spouse must be entitled to all the income of the trust for life and to principal in the discretion of a non-adverse trustee. This means that the income generated by the trust may be used to help pay for the survivor’s care. Careful financial planning can limit the amount of income available to be used for care and to ensure that public benefits remain available to the survivor.

By carefully thinking through the contingencies that could arise on the death of the first spouse, depending on the capacity of the surviving spouse, we can create multiple trusts that maximize the protection of assets for the survivor and his or her access to public benefits. This may result in the creation of multiple trusts on the death of the first spouse to die – one to hold the augmented estate share and one to hold the balance of the assets, probably in an SNT. In addition, if the surviving spouse is incapacitated at or near the death of the first to die, the survivor’s agent under a durable power of attorney will need to file certain papers with the court in a timely manner. However, the added complexity is worth it when you consider the additional protection available for both the surviving spouse and the remainder beneficiaries.

The changes in the elective share statute will affect almost all of our married clients. Your current documents may contain trusts created to accommodate the old rules or you may not yet have considered whether you need to worry about long-term care public benefits for the survivor of you. In either event, changing laws highlight the need for regularly checking in with your estate planning attorneys at the Hook Law Center to determine whether your plan should be updated. Please give us a call to arrange an appointment for one of our knowledgeable attorneys to review your plan and discuss how the changes in the law may affect you.

Ask Kit Kat – Dogs’ Duty

Hook Law Center:  Kit Kat, what can you tell us about our faithful friends, dogs, and how they help science?

Kit Kat:  Well, dogs have always been helpful to mankind in a myriad of ways. They serve on police forces, help the military, guard residences, and are beloved family pets. However, in New York City, they are helping in a different way. Scientists there are studying their fecal waste, or in common parlance, their poop! What could that possibly tell us, you might ask? Well, it turns out a lot! An animal feces study, funded by the Alfred P. Sloan Foundation, is trying to examine the microbial life of New York City’s pets and pests. Not only is dogs’ waste being collected, but they are also collecting fecal samples from cats, rats, mice, pigeons, and cockroaches. The specimens must be fresh (no more than a day old), so the scientists and their assistants wander through the city’s five boroughs collecting. In the case of dogs, if they find the owner nearby, they get the owner to sign a form with certain information, along with the fecal sample. They are expending a lot of effort—rats and mice are trapped, and the posteriors of live pigeons are swabbed. Cat waste comes from shelters, feral cats, and pet felines. In early May, they will extract DNA from the samples, and determine if any patterns emerge.

The study is a collaborative effort with scientists from New York University and Fordham University participating. Dr. Jane Carlton, director of NYU’s Center for Genomics and Systems Biology and lead scientist in the study, says, ‘Characterizing the world around us is very important, especially the microbial world we can’t see.’ They will be comparing information they obtain from different parts of the city, and across species. Are there geographical differences, differences among the species, or does diet and age play a role? Stay tuned for the results of this fascinating undertaking! (Andy Newman, “Dogs Do Their Duty for Science,” The New York Times, (NY Region, Pet City section), April 7, 2017)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post The New Elective Share Law Adds a Layer of Complexity for Planning for Long-Term Care first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2017/05/begley-law-group-to-sponsor-childrens-cancer-charity-walk-and-run/ Sat, 06 May 2017 00:08:41 +0000 http://www.seonewswire.net/2017/05/begley-law-group-to-sponsor-childrens-cancer-charity-walk-and-run/ Begley Law Group is proud to be a sponsor of the Join Hands 5K and Family Mile coming to Ridgefield Park, NJ on June 25th.  Benefiting the Tomorrows Children’s Fund, this event will help families of children with cancer and…

Seniors who own their own home in New York City and need help paying for repairs may qualify for the Senior Citizen Home Assistance Program (SCHAP).

The SCHAP program is administered by the city’s Department of Housing Preservation and Development (HPD), in partnership with the Parodneck Foundation. Qualifying low- and moderate-income seniors can receive low-interest repayment loans or deferred…

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By Marion M. Walsh, Esq. The United States House of Representatives, by a vote of 217 to 213, on May 4, 2017, approved legislation—called the American Health Care Act–to repeal aspects of the Affordable Care Act and replace them.   The House bill must still pass the Senate to become law.  If approved, the new legislation will impact every American citizen, particularly those who have not had…

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By Marion M. Walsh, Esq.

The United States House of Representatives, by a vote of 217 to 213, on May 4, 2017, approved legislation—called the American Health Care Act–to repeal aspects of the Affordable Care Act and replace them.   The House bill must still pass the Senate to become law.  If approved, the new legislation will impact every American citizen, particularly those who have not had insurance before, those who have pre-existing conditions and those who rely on Medicaid.  According to The New York Times, the House bill would eliminate tax penalties for people who go without health insurance. The bill would roll back state-by-state expansions of Medicaid, which covers millions of low-income Americans.  The Congressional Budget Office estimated  that the bill would cut Medicaid spending by $880 billion.  School districts will face cuts in funding and children with disabilities could receive less services.

We will keep you apprised on important developments and the changes in law will have a significant impact on vulnerable adults and children with disabilities.

Learn more about our special needs planning and special education advocacy services at www.littmankrooks.com or www.specialneedsnewyork.com.

Was this article of interest to you? If so, please LIKE our Facebook Page by clicking here or sign up for our monthly newsletter.

Both seminars will highlight new legislative developments and opportunities: The ABLE Act and the Special Needs Trust Fairness Act. Special needs trusts are crucial planning tools. Michael Gilfix and Mark Gilfix will explain how they work and why they are necessary to create for a child with a disability. They will also discuss housing for disabled individuals, the ABLE Act, the Special Needs Trust Fairness Act and the possible impact of Trump administration initiatives. Seminar attendees will learn how special needs trusts complement public benefits like Supplemental Security Income and Medi-Cal rather than disturbing eligibility for them.

Michael Gilfix and Mark Gilfix have decades of experience in the field of special needs planning. Michael Gilfix is a member of the Academy of the Special Needs Planners and author of the book “Special Needs Trust Creation and Management Guide.”

The seminar is being held with the support of nonprofit organizations including Autism Society San Francisco Bay Area, Community Resources for Independent Living, Jewish Family and Children Services, Pacific Autism Center for Education, Parents Helping Parents and others.

Space is limited, so please reserve a spot as soon as possible. To register, call 650-493-8070 or visit www.Gilfix.com.

13th Annual Special Needs Trust Seminar
Wednesday, May 10, 2017
2pm to 4pm & 6pm to 8pm
Elks Lodge
4249 El Camino Real
Palo Alto, California

Pioneers of Elder Law – For over 30 years, Gilfix & La Poll Associates LLP has innovated creative legal solutions to help you manage and plan the future of your estate.
To contact a special needs planning lawyer visit https://www.gilfix.com/ or call 800.244.9424.

Given the basic nature of the administration’s proposals, there is a lack of clarity with regard to what changes will be made to available income tax deductions and credits. A major piece of the proposal is simplifying the tax brackets to three rates of 10%, 25%, and 35%; unfortunately, it is unclear where those rates would fall. The proposal only specifically saves the charitable and mortgage interest deductions, which are two of the most widely claimed. Losing other deductions would not concern most low and middle income taxpayers, because the standard deduction would be more than doubled.

As an elder attorney, I am seriously concerned for the potential loss of the medical expense deduction. Loss of the medical expense deduction would increase the significant financial burden for those in long-term care or chronic illness, which impacts people of all income levels. Such expenses are only increasing, and the tax credit offers much-needed relief to taxpayers in the middle and lower income categories. When over half of U.S. bankruptcies arise from medical bills, eliminating this deduction would seem unwarranted.

The proposal seeks to eliminate the so-called “Death Taxes” which only impacts those passing with wealth exceeding $5.5 Million (single individuals) or $11 Million if a married couple maximizes their credit. If the implemented measures add elimination of gift taxes to the proposal, it would truly be a rare opportunity for wealth transfers with minimal taxes. This is primarily because an estate tax has been around for over a century now and, while it may go away temporarily, there is a decent chance it would return. Accordingly, only those who pass while the estate tax is gone would reap a benefit. On the other hand, individuals can easily plan to take advantage of changes in the gift tax during their life.

All told, the U.S. tax system is notoriously complex and riddled with deductions, credits, and other various measures that both add to the complexity of the system and offer advantages to certain individuals and businesses. The proposal put forth by the administration illustrates a desire to significantly reduce the complexity of the tax code, but risks oversimplification. The proposed points are certainly not set in stone and would need much refining in order to become coherent policy. However, the prospect of a losing deductions for health-related expenses creates legitimate concern. When combined with rising health care costs and the potential for increased uncertainty if the Affordable Care Act is repealed, the economic outlook for the low or middle-income elderly could become dire. If you have not planned ahead for significant medical costs or unexpected incapacity, these proposed changes offer yet another reason to consult an estate planning attorney specializing in elder law.

Ask Kit Kat – Komodo Dragon Babies

Hook Law Center:  Kit Kat, what can you tell us about two Komodo dragon babies at the Virginia Aquarium & Marine Science Center in Virginia Beach?

Kit Kat:  Well, this story has several interesting twists and turns. The babies were hatched from eggs this past August (2016); however, their gender was revealed only recently. They have to be old enough to undergo a blood test for that to happen, and the blood test only occurred on April 13, 2017. The test revealed they are both males, and the museum went about announcing this in a fun way. They had the dad dragon, Teman, kick over some giant, blue plastic eggs in his exhibit using some incentives. The mother, Jude, unfortunately, did not live to see her babies hatch. She underwent surgery last summer to correct a condition known as egg-yolk coelomitis. There were complications, and she had to be euthanized last July. She was almost 9 years old at the time.

Now for the interesting part—staff at the museum were not even aware she had left behind some eggs until they were cleaning the exhibit area, and they discovered 18 eggs buried about two feet beneath the surface. Two of the eggs hatched, and now 8 months later, they are about 3 feet long! Eventually, they will end up being 7-8 feet long. The parents, Teman and Jude, were on loan from zoos in Denver and San Antonio. One of the babies will stay in Virginia Beach, and one will eventually go to San Antonio.

The as-of-yet unnamed babies live separately at this point in an area kept to a toasty 90 degrees, but a new exhibit area is being prepared for them which should be ready by late this summer. The museum is welcoming input to pick their names, so if you’d like to make a suggestion, go to their Facebook page. They are unique. In North America, there are only 123 Komodo dragons spread across 60 facilities. Virginia Beach is fortunate to have 4—Teman, the 2 babies, and another male named Sanchez! (Robyn Sidersky, “Two Komodo Dragon Babies,” The Virginian-Pilot, April 14, 2017, p. 3)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Are the New Proposed Tax Cuts Something You Should Be Concerned About? first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2017/04/before-a-spouse-becomes-ill-2/ Fri, 28 Apr 2017 13:42:14 +0000 http://www.seonewswire.net/2017/04/before-a-spouse-becomes-ill-2/ Before A Spouse Becomes Ill When a spouse becomes ill, the well spouse is suddenly faced not only with the emotional toll, but the burden of handling all the financial responsibilities and long-term planning on his or her own.  If the…

by Thomas D. Begley, Jr., CELA

Representing clients in connection with planning for children with disabilities involves a lot more than simply preparing documents. Many lawyers who enter the field of Special Needs Planning have family members who suffer from disabilities and have had first-hand experience with the problem. Good legal advice begins with understanding the problem. For most parents, the concern is what will happen to the child after the parent(s) are gone. While the parents are alive, they will do whatever it takes to achieve the best life possible for their child with disabilities. After they are gone, the problem becomes who will take over. The lawyer’s job includes helping the clients identify a lifestyle that they want their child to have, advising the client as to how to fund that lifestyle, introducing the client to resources that are available in the disability system including potential trustees, and also understanding the challenges faced by other parents in similar situations. It is important that the lawyer understand the parents.

Parents of children with disabilities lead a much different life than parents with children without disabilities.[1] Upon learning that their child has a diagnosis of disability, the first reaction for many parents is denial. Denial rapidly merges with anger, which may be directed toward the medical personnel involved in providing the diagnosis, fear is another immediate response. This is largely fear of the unknown and fear of the future. Other emotions include Guilt that the parents themselves may have caused the problem, and Confusion revealing itself in sleeplessness, inability to make decisions, and mental overload. Parents often feel powerless to change what is happening, and it is very difficult to accept. There is disappointment that the child is not perfect. Some parents feel rejection toward the child, toward the medical personnel, or toward other family members.

It is recommended that parents try to understand that they are not alone, and that they seek advice of another parent who also has a child with a disability. Parents should rely on positive sources in their lives, such as ministers, priests and rabbis, good friends, or a counselor. They should also be advised to take one day at a time. Parents are also advised to learn the terminology of disability. Parents should seek and obtain accurate information. Write down questions before meetings, and get written copies of documentation from physicians, teachers and therapists. It is a good idea to buy a three-ring notebook and compile the information. Parents should not be afraid to show emotion and should not be intimidated by medical or educational professionals. They should learn to deal with natural feelings of bitterness and anger. Parents must try to maintain a positive outlook. They should seek out programs for their children. It is critically important that the parents care for themselves. They can’t help their children unless they themselves are strong. They must get sufficient rest, eat well, take time for themselves, and reach out to others for emotional support. They should avoid self-pity. They should develop and maintain a daily routine. The fact that the child has a disability does not make them less valuable, less human, less important, or less of need for parental love and parenting.

The National Information Center for Children and Youth with Disabilities (NICHCY) recommends that parents join a parents’ group, read materials by and for parents, find out about all services available to their children, including special education, early intervention, and related services. These services can range from feeding support from a nutritionist in a hospital to developing a complete physical therapy program for an infant with Cerebral Palsy.   A plan can be developed called an “Individualized Family Service Plan” (IFSP). Services are offered through both public and private agencies. When a child reaches school age, an “Individual Education Program” (IEP) should be developed.

Relationships between parents are a key factor. Frequently, parents with children with disabilities divorce. Often, one of the parents, commonly the father, cannot take the situation and leaves. Ideally, duties of providing care should be assigned to both father and mother. Another issue is siblings. For many siblings, the experience is positive and enriching. It teaches them to accept other people the way they are. In contrast, other siblings experience feelings of bitterness and resentment toward their parents or their brother or sister with a disability. They may feel jealous, neglected, or rejected as they watch most of their parents’ energy, attention, money, and psychological support flow to the child with special needs. NICHCY advises that parents encourage their children to assume responsibilities, such as doing chores. This develops a sense of pride in the child with disabilities. Conversely, if the child with disabilities does not contribute, they may develop negative feelings, such as they are not capable of helping. The nature and extent of the disability may affect how much he or she is able to participate. When the child is ready, the nature and extent of the disability should be discussed with the child. Self-advocacy should be encouraged. Grandparents and other family members must be given the opportunity to know the child with disabilities, so that they can understand the child’s strengths and needs. Parents should learn to work with professionals for the benefit of the child and family.

Parents of children with disabilities should consider buying long-term care insurance. Few things that can ruin retirement are the expense of long-term care and having a child who can’t work. These can be extremely financially draining. Long-term care insurance will ensure that badly needed funds will be available to fund a Special Needs Trust (SNT) and provide for the child after the parents are gone.

Begley Law Group, P.C. has served the Southern New Jersey and Philadelphia area as a life-planning firm for over 85 years. Our attorneys have expertise in the areas of Personal Injury Settlement Consulting, Special Needs Planning, Medicaid Planning, Estate Planning, Estate & Trust Administration, Guardianship, and Estate & Trust Litigation. Contact us today to begin the conversation.

[1] Parenting a Child With Special Needs, NICHCY News Digest, ND 20, 3^rd Edition, 2003.

The United States Senate Special Committee on Aging recently issued its 2017 ranking of the top 10 scams targeting senior citizens, based on data collected through its Fraud Hotline from January 1, 2016 through December 31, 2016. The most frequently reported scams of 2016 were as follows:

• IRS Impersonation Scams

Generally, the scammer will call an individual, pretending to be an Internal Revenue Service (IRS) agent, accusing the individual of owing back taxes and penalties, and threatening the individual with arrest, foreclosure, or deportation if immediate payment is not made.

• Sweepstakes Scams

The scammer contacts an individual and informs him that he has won a lottery – frequently the Jamaican lottery. In order to “claim” his winnings (or to improve his chance of winning), the individual must pay a fee.

• Robocalls/Unwanted Phone Calls

The scammer uses technology to dial large volumes of phone numbers and distribute pre-recorded messages to reach a broad audience of potential victims.

• Computer Scams

The scammer contacts the victim by computer, poses as an employee of a technology company, and convinces the victim that his computer is infected with a virus. In order to get rid of the “virus,” the scammer convinces the victim to give him access to his computer, often in exchange for payment by wire transfer. Sometimes, the scammer obtains the victim’s passwords and uses them to access his financial accounts, as well.

• Elder Financial Abuse

The Committee’s report defines financial abuse as the “illegal or improper use of an older adult’s funds, property, or assets.” It is often committed by a loved one or an agent under a power of attorney.

• Grandparent Scams

The scammer calls a senior pretending to be a family member, often a grandchild, and asks for money to pay for an emergency (frequently a medical bill or legal problem).

• Romance Scams/Confidence Fraud

A form of “catfishing,” this scam involves the fraudster creating a fake online dating profile, gaining the trust of the victim over a period of time, then requesting money to help out in an “emergency” or to allegedly visit the victim.

• Government Grant Scams

The scammer contacts the victim, pretending to be from a “Government Grants Department” (which does not exist), and informing the victim that he or she will receive a grant after paying a fee.

• Counterfeit Check Scams

The scammer sends the victim a check and instructs him to cash or deposit the check, then turn around and wire some of the money back to the scammer. For his trouble, the victim may keep a portion, he is told. The victim later learns from the bank that the check has bounced, and now he is liable for the funds wired.

• Identity Theft

The Committee’s report categorizes several forms of “identity theft,” including online impersonation, actual theft of a wallet or mail, and illegal efforts to obtain a person’s identifiable information. Use of someone’s personal information to apply for a credit card is a common form of identity theft, as is filing an income tax return using someone else’s personal information, generally to obtain a refund from the government.

To avoid becoming the victim of these and other scams, exercise caution when you are contacted by someone you do not know personally or are not expecting to hear from. Almost all of the scams above involve someone else contacting you, either by phone, mail, or e-mail. If someone purportedly calling from your financial institution contacts you and asks for identifying information, hang up and call the institution back at a known, legitimate phone number to verify whether the call was legitimate. Avoid opening e-mails from unknown senders and clicking on links in e-mails unless you are absolutely certain that the e-mail or link is legitimate. Shred documents containing personal information such as dates of birth and Social Security Numbers, rather than throwing them away. Keep in mind that anything that sounds too good to be true (lottery winnings and free trips, for example) most likely IS too good to be true. And when in doubt, if you receive a phone call, piece of mail, or e-mail that doesn’t seem quite right, get the opinion of a loved one or an attorney before responding.

If you receive a suspicious call or message, contact the U.S. Senate Special Committee on Aging’s Fraud Hotline at 1-855-303-9470. For more information relating to each of the above scams, you may access the 2017 report online at https://www.collins.senate.gov/sites/default/files/Fraud%20Book%202017.pdf.

Ask Kit Kat – Follow the Bears

Hook Law Center:  Kit Kat, what can you tell us about the bears in Yosemite National Park?

Kit Kat:  Well, this is so interesting! The rangers at Yosemite now have a website in which the public can follow the location of black bears throughout the park. The bears are outfitted with tracking collars, and they can be followed as they go about their daily routines. There is a time delay, so industrious visitors cannot know where they are in real time, but you can see them doing a lot of things like climbing 5,000-foot canyon walls, foraging for food, etc. There are approximately 500 black bears in Yosemite.

The reason behind the tracking system and website is twofold—one is to satisfy the public’s curiosity about the bears, but secondly, and most importantly it is to give the rangers and the public information about the bears. With more than 5 million visitors to the park last year, rangers hope the public will be more aware how to interact with bears—slowing their driving in places bears frequent most and properly storing food at campsites. Last year alone, 28 bears were hit by cars, and for some, it was a fatal encounter. Ryan Leahy, a wildlife biologist at the park says, ‘It’s our responsibility to keep bears wild.’ Another expert, Jesse Garcia, a black bear specialist from the California Department of Fish and Wildlife, says, ‘You’ve got to give them their distance and always be aware, knowing that they’re there.’ In other words, visitors are encouraged to enjoy the bears, but at a safe distance for both parties.

The tracking system has resulted in learning more about black bears, which in Yosemite, tend to be more of a brownish color. One of the things they have learned is that mating season begins in May, about a month earlier than previously thought. Continued monitoring will help us learn more about these powerful, yet beautiful animals. (By Associated Press, “Keeping track of Yosemite’s busy bears,” The Washington Post (Kids Post), April 4, 2017)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Top Scams Targeting Seniors – And How to Avoid Them first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2017/04/autism-costs-rise-dramatically-with-age-study/ Wed, 19 Apr 2017 19:00:12 +0000 http://www.seonewswire.net/2017/04/autism-costs-rise-dramatically-with-age-study/ Caring for individuals with autism and other special needs tends to involve a lifetime of expenses, whether it is paying for caregivers, accommodation or daily necessities. A study from the University of California, Davis (UCD), shows California spends significantly more…

The personal representative of an estate (could be termed an Administrator or Executor) has a fiduciary duty to fully administer the estate of the decedent. In doing so, the personal representative must ensure that the debts of the estate are paid. When an estate is insolvent, there is a particular order in which such debts may be paid. A failure to pay the debts in the order prescribed by the Virginia Code could result in the personal representative being held personally liable for the debt

Specifically, when the assets of the estate are not sufficient to satisfy all the debts, the debts are to paid as follows:

1. Costs and expenses of administration;
2. Allowances afforded to a surviving spouse or dependent child under the Code of Virginia;
3. Funeral expenses not to exceed $4,000;
4. Debts and taxes with preference under federal law;
5. Medical and hospital expenses of the last illness of the decedent, including compensation of persons attending him not to exceed $2,150 for each hospital and nursing home and $425 for each person furnishing services or goods;
6. Debts and taxes due the Commonwealth;
7. Debts due as trustee for persons under disabilities; as receiver or commissioner under decree of court of the Commonwealth; as personal representative, guardian, conservator, or committee when the qualification was in the Commonwealth; and for moneys collected by anyone to the credit of another and not paid over, regardless of whether or not a bond has been executed for the faithful performance of the duties of the party so collecting such funds;
8. Debts and taxes due localities and municipal corporations of the Commonwealth; and
9. All other claims.

Only after the debts are fully satisfied are beneficiaries of the estate entitled to benefit from the estate.

Since the problem usually arises with a decadent who owned real property that has vested with a beneficiary and there is just not a sufficient personal estate to satisfy the creditors, the Code of Virginia specifically provides that real property must sold when the personal property is insufficient to do so.

To enable a personal representative with the authority to engage in the sale of real estate, the personal representative, unless there is an express direction of sale under a Last Will and Testament, will often need the cooperation of the heirs and/or the granting of the power to sell the property. The Court, in granting such authority, divests the heirs of legal title and grants full authority over the property to the personal representative.

Ask Kit Kat – Affectionate Cats

Hook Law Center:  Kit Kat, are cats naturally affectionate, or do they tend to be aloof?

Kit Kat:  Well, according to some new research, cats really are naturally affectionate. Here’s what the latest research says. We have Oregon State University (OSU) to thank. In OSU’s own publication, Behavioral Processes, it was reported that cats frequently choose love from their parents over food. Dogs and tortoises were previously studied, so the researchers decided it was time to focus on cats. One researcher said, ‘Increasingly cat cognition research is providing evidence of their complex socio-cognitive and problem-solving abilities. Nonetheless, it is still common belief that cats are not especially sociable or trainable. This disconnect may be due, in part, to a lack of knowledge of what stimuli cats prefer, and thus may be most motivated to work for.’

In the study, a total of 50 cats (some from shelters, some were pets) were examined. They isolated the cats for a few hours from all stimulation such as human interaction, playing with toys, or being given food. After the deprivation period, the cats were given the option of interacting with humans, playing with toys, or eating. Only 37% of the cats chose food. Most of those opting for contact were quite content with chin rubbing. To top it off, they found no difference between the shelter cats and pet cats. These results confirm what my parents have long known. The 5 cats in our house love our parents, and miss them terribly when they go away. Someone comes in and feeds us and clean our litter while they are away, but it’s not the same. Even if they are gone one night, when they come back, we cuddle up to them with purring, and they, in turn, pet us to our hearts’ content! (Kelli Bender, “Study: Your Cat Probably Loves You More Than It Loves Food (Take that, Dogs!), People, March 28, 2017)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Selling Real Property to Satisfy the Debts of a Decedent first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2017/04/april-is-autism-awareness-month-2/ Fri, 14 Apr 2017 15:36:27 +0000 http://www.seonewswire.net/2017/04/april-is-autism-awareness-month-2/ April is Autism Awareness Month Advocates for people with autism are marking Autism Awareness Month in many ways throughout the month of April. Buildings and landmarks around the world were illuminated in blue light April 2 for World Autism Awareness Day,…

Advocates for people with autism are marking Autism Awareness Month in many ways throughout the month of April.

Buildings and landmarks around the world were illuminated in blue light April 2 for World Autism Awareness Day, recognized by the United Nations since 2007. The Light It Up Blue campaign is sponsored by the nonprofit organization Autism Speaks. The White House, Rockefeller Center, the Leaning Tower of Pisa, the Great Pyramid of Giza and the Empire State Building were all bathed in blue light to raise consciousness of autism spectrum disorder, which affects one in 68 children.

The PBS children’s program Sesame Street added a new character in April: a Muppet named Julia, who has autism. The show’s online Digital Storybook series has featured Julia since 2015, but she is now making her television debut. Sesame Street producers met with groups that serve people with autism to learn which issues would be best to focus on. In the first episode featuring the red-haired Julia, she is hesitant to shake Big Bird’s hand. Big Bird is afraid Julia does not like him, but Elmo explains that Julia “does things a little differently” because she has autism. The episode also portrays Julia’s excitability during a game and her sensitivity to loud noises. Stacey Gordon, the puppeteer behind Julia, has a son with autism. She said that she hopes children who watch the show will learn that kids with autism play differently, “and that that’s okay.”

Advocates said that increasing understanding and acceptance of people with autism and their families is essential, but raising awareness is only the first step. Although great advances have been made in research and interventions, children and adults with autism need meaningful assistance, and the programs that help them need strong funding support.

Learn more about our special needs planning and special education advocacy services at www.littmankrooks.com or www.specialneedsnewyork.com.

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• Memory loss that disrupts daily life, especially recently learned information;
• Challenges in planning or solving problems, like following a familiar recipe;
• Difficulty completing familiar tasks at home, work or leisure, like how to drive to a familiar location or remembering the rules of a favorite game;
• Confusion with time or place, like losing track of seasons or the passage of time;
• Trouble understanding visual images and spatial relationships, like difficulty reading or judging distance, the latter of which may manifest as trouble driving.
• New problems with words in speaking or writing, like having trouble following a conversation, stopping in the middle of a conversation and repeating themselves, or struggling with common vocabulary and calling thing by the wrong name;
• Misplacing things and losing the ability to retrace steps, like putting eyeglasses in the freezer;
• Decreased or poor judgment, like giving large amounts to telemarketers or losing track of cash, or like paying less attention to personal grooming;
• Withdrawal from work or social activities they used to enjoy; and
• Changes in mood and personality, like becoming confused or suspicious or anxious.

If you or a loved one is experiencing one or more of these symptoms, your first step should be to contact your physician and schedule an appointment to discuss what you are experiencing. If early dementia is diagnosed, early intervention may provide some symptomatic relief and allows a longer period of independent living. Your second step should be contacting an elder law attorney.

When someone receives a dementia diagnosis, the entire family goes through stages of shock and fear about the future. However, contact with an experienced elder law attorney, like the attorneys at the Hook Law Center, can help the family through this stage with proper planning. It is vital that planning be done before the disease becomes so advanced that the patient loses their capacity to sign the documents necessary to implement a plan.

One component of any plan will be reviewing and updating necessary estate planning documents. In addition, it is likely that general durable powers of attorney and advanced medical directives may need to be updated or created. These latter two documents are extremely important when diseases like dementia are in play because as the disease progresses, the natural course will be that the patient likely loses capacity at some point before death. In that situation, it is important that agents be appointed and empowered to make the decisions necessary to carry out the patient’s wishes, implement a financial plan and to protect assets. For clients who may need to rely on public benefits to help pay for care in the face of a dementia diagnosis, it is extremely important that existing powers of attorney be reviewed to ensure that the powers necessary to implement an asset protection plan are specifically granted to the agent in the power of attorney. For most people who have created powers of attorney when younger and healthier or without an eye towards public benefits planning, their powers of attorney do not contain the powers necessary to implement all of the asset protection and eligibility strategies that can be employed.

A second component of any plan will be reviewing the overall financial health of the family to determine how the family plans to pay for care when it becomes necessary. We will look at all avenues to assist in paying for care. We will discuss care at home and care in a facility. We will discuss the feasibility of maintaining the family in their home from both the patient’s perspective as well as that of the caretaker. We will discuss all the options available, including private pay and governmental benefits. When it is still possible for everyone in the family to understand and materially participate in the formation of a plan of care is the time to make the plan. By understanding the options available and how best to achieve your financial goals, we can relieve much of the stress and fear that comes from facing an uncertain future.

Unfortunately, dementia is becoming a more common diagnosis as our population ages. But the fear of running out of money and not being able to afford care should not be thrown on top of your other concerns. Make an appointment with one of the attorneys at the Hook Law Center and let us help relieve your mind by developing a plan that works for you.

Ask Kit Kat – Pesky Penquins

Hook Law Center:  Kit Kat, what can you tell us about raising Galápagos baby penguins?

Kit Kat:  Well, in some ways, it’s just like raising human children. Let me explain. Galápagos penguins are the only penguins which live north of the Equator. They are considered endangered, because only around 2,000 remain in the world. That said, their parents when raising offspring, referred to as fledglings when they are old enough to hunt for food by themselves, can be quite generous. Parents feed their young by throwing up food they have partially digested into their offspring’s mouths. In a video recently recorded by researchers from the University of Washington, one parent penguin had just finished feeding its fledgling when the youngster kept following the parent and begging for more. The parent became so frustrated, that it just dove into the water to escape! Sound familiar? When kids just become too demanding, sometimes the best thing for parents to do is to bow out of the situation.

Anyway, parent Galápagos penguins and offspring live close-knit lives. They stay close to their birthplace throughout their lifetime. They usually are very generous with their offspring, especially if food is plentiful. When food is scarce, they tend to look out for themselves. Dee Boersma, professor of biology at the University of Washington, comments ‘When conditions are good, they can raise two chicks in a season and continue to feed them (even when they are fledglings and can feed themselves). When there’s little food around, they save themselves, forgetting about both eggs and chicks.’ Oh well, what can you say? It’s definitely survival of the fittest and nature’s way of ensuring continuance of the species. In the end, parent penguins are doing the best they can. (Nicholas Bakalar, “Even Penguins Have Children Who Won’t Leave the Nest, “ Science, The New York Times, March 20, 2017)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Early Signs of Dementia and What to Do About Them first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2017/04/annuities-the-good-the-bad-and-the-ugly/ Wed, 05 Apr 2017 14:45:37 +0000 http://www.seonewswire.net/2017/04/annuities-the-good-the-bad-and-the-ugly/ Thomas A. Lane, Jr., ChFC®, CFP® of the Lane Hipple Wealth Management Group “I HATE annuities, and you should too” is a popular marketing campaign utilized by a national investment advisory firm to create uncertainty and fear among annuity owners…

By Thomas D. Begley, Jr., Esquire, CELA

When Should You Consider a Bloodline Trust?

A Bloodline Trust offers protection to your children from: (1) divorce, (2) creditors, (3) death of children and subsequent remarriages of children’s spouses, and (4) squandering the money.

Divorce

The old saying, “We can pick our friends, but we can’t pick our family,” is particularly applicable in the case of sons- and daughters-in-law. Often, our children choose wonderful, trustworthy spouses with whom we get along very well. But occasionally, they choose partners who cannot be trusted, leaving us concerned for the emotional and financial well-being of our children and grandchildren.

A child’s poor choice of spouse can translate into a parent’s estate planning headache, particularly when there is a divorce. With 50% of all marriages and 70% of second marriages ending in divorce,[1] this is not an uncommon dilemma. If there is a divorce, your son or daughter-in-law may wind up with 50% of your child’s inheritance.

If you want to protect your child’s inheritance from an irresponsible spouse or ex-spouse, consider establishing a bloodline trust.

Creditor

If you leave your estate to your child and the child is later sued, the child’s creditors can attach the inheritance. The creditor may wind up with 100% of your child’s inheritance. However, if the inheritance is left in a Bloodline Trust, it is protected from claims of creditors.

Who Serves as Trustee of the Bloodline Trust?

There are two options with respect to the trustee of the bloodline trust. First, if there is a responsible child and the concern is to protect the money from creditors, divorce, or death of your child, then the child could be sole trustee and be given total charge with respect to distributions from the trust. Your child, acting as trustee, can distribute principal and income to or for the benefit of himself or herself or to his or her children. A sibling or friend could be named as successor trustee. If the child is sued by a creditor or spouse for divorce, then the child is removed as trustee and the sibling is substituted as successor trustee. When the lawsuit is ended, the child is reinstated as trustee and the sibling is removed as trustee. If your child dies before the money is all spent, you may want it to remain in trust for your grandchildren. At that time, divorce is no longer an issue, so the son or daughter-in-law could serve as trustee for their child’s share.

Second, if you are concerned about your child squandering the money, it is better to get an outside trustee. A sibling could serves as trustee, but they are put in a position where your irresponsible child is constantly asking for money and your responsible child should be saying no. This causes strain in family relationships. A professional outside trustee is better in that situation. If a professional outside trustee is used, a sibling should be given the power to remove and replace that trustee if things don’t work out.

[1] Divorce Magazine, http://www.divorcemag.com/statistics/stats.US.html

Attorney Thomas D. Begley, Jr. of the Begley Law Group was selected to the 2017 New Jersey Super Lawyers list.

The New Jersey Super Lawyers list designation is bestowed upon lawyers who have been judged to have extensive professional achievements, exemplary ethical standards, and are held in esteem by their peers. The process in which an attorney is selected as a Super Lawyer includes stringent peer nominations, evaluations, and research by third parties. Only five percent of attorneys are selected. Attorney Begley has been named a Super Lawyer annually since 2008.

The continued Super Lawyer designation is a clear indication that the Begley Law Group, P.C., has the recognition of peers for extensive experience and knowledge in their practice areas.

“We are immensely proud of our reputation and our work supporting the individuals and families in New Jersey area,” commented Certified Elder Law Attorney Thomas D. Begley, Jr. “We take our commitment to the rights of the elderly and disabled seriously and appreciate that our dedication has been noted.”

In Norfolk many improvements are providing benefit to residents of all ages, including those in or nearing retirement. If you take a drive around downtown Norfolk you will see numerous apartment buildings that have sprung from the shells of old buildings, offering living options in an area that formerly had limited housing stock. An accessible new library was recently completed and the courthouse is on phase two of construction, respectively. If you open your ears you hear the soft “ding” of the light rail as it approaches. Look up on Granby Street and you will see lighted archways at night, providing much better illumination than in previous years. These features have made downtown much more vibrant generally but also more accessible and livable to those 65 and older. Further west down Norfolk’s southern waterfront a new senior living residence tower is planned, which will offer expanded inventory for those who wish to downsize into a community that can accommodate care needs.

The new construction in Norfolk is illustrative of broader changes happening throughout Hampton Roads. Construction and expansion of current care facilities throughout the region has been joined by increased independent retirement homes popping up in Suffolk, Virginia Beach, and elsewhere throughout the region. Soon, a new Veterans Administration facility will be here to provide assistance to our veteran population in Hampton Roads with significant care needs.

A major concern for many seniors is transportation and here technology and new developments are also leading the way. Phone applications like Uber and Lyft have made it unnecessary for many to have a car, including seniors. Furthermore areas like downtown Norfolk, Town Center, the Oceanfront, Old Town Portsmouth, and others are readily walkable and do not require a car for everyday needs. Many of our clients are choosing to sell their cars and find that they (and their family members) are relieved that driving is no longer necessary and car maintenance is a thing of the past.

Medical innovation and improving in-home care are also improving the quality of services to the disabled in our community. E-health and telemedicine are becoming more prevalent, which allows doctors to provide nearly 24/7 access to patients. Despite the trend away from house calls there are physicians in the area who are willing to meet with patients in their home. Also, families can now take a more “hands on” approach to managing in-home care providers (such as nurses and care assistants), even if they live out of the area. Modern technology provides the opportunity to coordinate what used to be a job that could only be done on-site. Additionally, tax withholding and other administrative tasks are increasingly be assisted by care agencies themselves, or online vendors, which helps families avoid common missteps seen when employing in-home caregivers and other employees.

In addition to new buildings, transportation options, and medical services, the growing senior population has given rise to more social, charitable, and special interest groups geared to that population’s needs. There are charities that match companions with individuals in assisted living and nursing facilities. Social groups for seniors allow the forging of new friendships and connections later in life. These connections provide vastly improved social wellbeing for many of our clients who have lost friends or spouses.

At Hook Law Center our staff and Elder Law attorneys constantly try to keep up with all of the new developments benefitting our clients. As you can see these developments are often not legal ones. By taking a holistic approach to the needs of our clients we feel our clients’ plans are better coordinated for their benefit.

Ask Kit Kat – Western Ferrets

Hook Law Center:  Kit Kat, what can you tell us about ferrets returning to the Western prairies?

Kit Kat:  Well, this is a success story! As recently as 1981, the ferret was thought to be extinct on the Western prairie. Once they roamed from Saskatchewan to the Mexican state of Chihuahua. However, in 1981 one was discovered on a ranch in Wyoming. It had been found dead by the owner of the ranch, but Allen Hogg was a ferret devotee, his devotion instilled in him by his mother. Hogg immediately contacted the Wyoming Department of Game and Fish. They sent a horde of researchers and field technicians. They were ecstatic to find 100 ferrets living on Hoggs’ Lazy BV Ranch and its neighbor, the Pitchfork Ranch. Ferrets are carnivores whose favorite meal is the prairie dog. Ferrets can’t live without them being in close proximity. They live in the tunnels that prairie dogs have created and only venture out at night. Their telltale green eyes alert you to their presence. When ranchers started eradicating the prairie dog because they were consumers of the same grasses they wanted for their cattle, the ferret declined quickly.

So back to the ferrets’ reappearance in 1981.Things were going well until both prairie dogs and the ferrets started to die from disease. It turns out prairie dogs are susceptible to fleas which carry sylvatic plague, the same plague that killed so many in Europe in the Middle Ages. Without their food source, the ferret could not survive. The ferret, in turn, is susceptible to canine distemper, a deadly illness. The combination of the 2 maladies reduced both populations. By 1987, there were only 18 ferrets left. The U.S. Fish & Wildlife Service decided to intervene and breed the ferrets in captivity, while others worked on the disease problem. The plan worked– in 30 years, 8,500 kits have been born. They are then released into the wild. Trial and error has resulted in the ferrets being vaccinated against the plague, and the prairie dogs receive protection through insecticide scattered in their burrows. It’s not 100% perfect, but it has increased the survival rate. In addition, ranchers now have an incentive to let the ferrets thrive in the wild. Rule 10 J of the Endangered Species Act protects landowners from culpability if a protected species, like the ferret, is accidentally harmed on their property. It’s good for all parties involved, and we Americans get to enjoy the lovely ferret once more. (Scott McMillion, “Return of a Ghost,” Nature Conservancy, Spring 2017, p. 36-41)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Healthy Aging in Hampton Roads: The Future Looks Bright! first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2017/03/military-retirees-can-now-use-special-needs-trusts-for-sbp-payments/ Thu, 30 Mar 2017 20:00:55 +0000 http://www.seonewswire.net/2017/03/military-retirees-can-now-use-special-needs-trusts-for-sbp-payments/ Military families with special needs children face a number of difficulties when planning for their future financial security. However, a new law now allows military retirees more flexibility and peace of mind with the way their Survivor Benefit Plan (SBP)…

To best assist our clients, we must have an intricate understanding of these areas of the law, which are often complex and sometimes counterintuitive. We sharpen our skills through membership in national organizations such as the National Academy of Elder Law Attorneys and the Special Needs Alliance, participation in specialized continuing education seminars and conferences which address these issues, and closely following recent developments in the law.

While not everyone needs all of our services, every adult should have in place the documents necessary to allow trusted loved ones to act on their behalf in the event of disability or death. These documents are important to have whether you’re thirty years old and the parent of a minor child, or ninety years old and in declining health.

Each of our practice areas are riddled with obstacles, often undetectable to the untrained eye. You may wish to transfer a large sum of money outright to a child at your death; after asking some questions about that child, however, we learn that he is divorcing or has credit concerns that warrant the use of a trust. Or you may wish to transfer your longtime home to a child during your lifetimes; we may see, however, that doing so could result in significant tax consequences in the event the child sells the home, or that perhaps your health is such that you may need to apply for Medicaid soon, and the transfer would be subject to a 5-year lookback period.

Elder law attorneys carry in our proverbial toolbox dozens of tools designed to best meet our clients’ needs while taking into account a host of issues they may not have considered. If we were general practice attorneys, attempting to stay on top of personal injury law, bankruptcy law, contracts law, and landlord-tenant law, for example, in addition to our practice areas, we simply would not be as well-versed in elder law and the issues that our clients face daily. We specialize in our passion in order to give our clients the best results possible.

Don’t risk your family’s future by relying on an online estate planning service or a “jack of all trades” to get the job done; work with an elder law attorney who will help you enjoy the benefits and avoid the pitfalls of a plan tailored to your individual needs.

Ask Kit Kat – Tree Pruning

Hook Law Center:  Kit Kat, when is the ideal time to prune trees, so that animals and birds are not harmed?

Kit Kat:  Well, anytime that the trees are bare of their leaves is the ideal time to prune. That means that late fall through early spring is the best time to prune. Once there are leaves on the trees or bushes, squirrels and birds are likely to have established their nests with young offspring to consider. It makes a lot of sense, but something people may not have thought of previously.

Take the example of a nest of squirrels rescued by Lori Thiele, a wildlife rescuer and biologist. Her finely-tuned ears heard signs of distress when city tree trimmers were at work with their chainsaws. A family of squirrels was in the process of being displaced. The tree trimmers had attempted to move the baby squirrels to a cat carrier, but the mother squirrel was frantic. Lori moved the babies to a cardboard carrier with large holes on the side. Still, the mother could not find them. Next, Lori played pre-recorded baby squirrel vocalizations from her phone. With that mom realized where they were. Lori sat back and watched the mother rescue them. ‘I couldn’t even get out of the way fast enough before the mom started grabbing them—boom, boom, boom. She came down looking for them so quickly that I just started putting them out on the sidewalk, and she had them all three tucked back in the next tree over in like, 30, 45 seconds,’ she reports.

Many nest disruptions happen accidentally, because many animals camouflage themselves so perfectly. Hummingbirds have lichen-covered nests that blend easily to their surroundings. Likewise for hooded orioles who nest under palm fronds, and woodpeckers who live on dead limbs in otherwise live trees. Awareness will help tremendously in reducing the number of these potential tragedies. Pruning in summertime is very hazardous, not only because the young are maturing, but also because the area pruned will have increased sunlight which can be jarring to plants and grass, as well as birds and animals. Sometimes, the heat is so intensified, that the area can actually become scorched. So next time you want to prune trees or bushes in your yard, go gently so that no wildlife is harmed. (Nancy Lawson,“Untimely evictions,” All Animals, November-December 2016, p. 38-39)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Why You Need an Elder Law Attorney first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2017/03/medicare-actively-expanding-msp-compliance-for-personal-injury-claimants/ Mon, 20 Mar 2017 20:22:44 +0000 http://www.seonewswire.net/2017/03/medicare-actively-expanding-msp-compliance-for-personal-injury-claimants/ On February 3, 2017, the Centers for Medicare and Medicaid Services (CMS) announced that they would be establishing two new Medicare Set-Aside (MSA) processes – one for Liability Medicare Set-Asides (LMSA) and the other for Non-Fault Medicare Set-Asides (NFMSA). As…

Each year Super Lawyers creates a credible, comprehensive and diverse listing of outstanding attorneys. This year Ethan J. Ordog has been selected as a Super Lawyers Rising Star. Each candidate is evaluated on 12 indicators of peer recognition and professional achievement.

Ethan joined Begley Law Group in February of 2009 and became a partner in January of 2014. Ethan concentrates his practice in Estate & Trust Litigation, Estate & Trust administration and Guardianship. Ethan is licensed to practice law in New Jersey and the U.S. District Court for the District of New Jersey. He is a member of the New Jersey Bar Association, American Bar Association and the bar associations of Burlington and Camden counties.

Ethan received his Law Degree from Roger Williams School of Law in Bristol, Rhode Island. While attending Roger Williams he was a law school ambassador and served as a baseball coach for the university squad. Ethan did his undergraduate studies at Moravian College in Bethlehem, Pennsylvania, graduating cum laude with a Political Science Degree. At Moravian, he was a member of the prestigious Omicron Delta Kappa (National Leadership Fraternity), the varsity baseball team, and served as captain during his senior year.

To be recognized by Super Lawyers is a great achievement. Congratulations, Ethan!

The answer to all of these issues can be addressed within a trust. A trust is tool that we can use to allow someone, the trustee, to control and manage property for the benefit of another, the beneficiary. Trusts can come in many different varieties, depending on the goals that you want to accomplish. However, all trusts that are meant to protect a beneficiary from his or her creditors or from his or her poor choices should have a few things in common. First, the trust should have a spendthrift clause. A spendthrift clause is a clause in the trust that prevents a beneficiary from assigning or selling his or her interest to anyone, including a creditor. In Virginia, such clauses are enforceable with a minor exception relating to child support (but not spousal support) owed by the beneficiary. Second, the trust should give the Trustee discretion to make distributions to the beneficiary rather than allowing the beneficiary to withdraw assets or to direct distributions to himself or herself. The more discretion that the Trustee has, the harder it becomes for a beneficiary’s creditors, including a divorcing spouse, to compel the Trustee to make a distribution that is attachable by the creditors. Of course, such absolute discretion also puts the beneficiary at the mercy of the Trustee. Thus it is important to balance the risk based on the known extent of the problem.

For instance, if the intended beneficiary is an addict, it might make sense to give the Trustee plenty of discretion to stop all distributions from the trust except for distributions for rehabilitation in the event that the beneficiary is, in the opinion of the Trustee, using addictive substances until such time as the beneficiary is again sober. If the intended beneficiary is in an unstable marriage or is a spendthrift, the Trustee may have the discretion to make distributions for the beneficiary’s health, education, maintenance and support. By giving the Trustee some standard by which to make distributions, it gives the beneficiary slightly more leverage against a Trustee who is not appropriately exercising his or her discretion without significantly increasing the danger that a creditor of the beneficiary can compel a distribution to the beneficiary. However, properly drafted, the Trust property itself would be considered the separate property of the beneficiary and not subject to division between the divorcing spouses as marital property. Furthermore, the Trustee could be given the direct discretion to purchase items for the benefit of the beneficiary directly rather than making a distribution directly to the beneficiary.

As knowledgeable estate planners, the attorneys at the Hook Law Center have also become creative trust drafters in an effort to meet our clients’ changing needs and concerns. Make an appointment with one of us to review your current estate plan to make sure your individual goals and concerns are being met.

Ask Kit Kat – Robot Bees

Hook Law Center:  Kit Kat, are there such things as robot bees?

Kit Kat:  I know it sounds strange, but yes there are. They’re still in the experimental stage, but what we’re really talking about are small drones that do the work of bees in pollination of fruits, flowers, and other plants. As you may know, bees appear to be in decline due to a number of factors—pesticides, invasive species, and climate change. The rusty patched bumblebee, for example, was just listed as an endangered species in the month of January 2017, though the Trump administration has put a halt on that process for now.

The drone bees were developed by a Japanese scientist, Eijiro Miyako, a chemist at the National Institute of Advanced Industrial Science and Technology in Japan. He stumbled on his discovery somewhat accidentally 10 years ago when he was trying to create a fluid that could be used to conduct electricity. The resulting gel was extremely viscous. It wasn’t suitable for his purpose, so he stuck it in a cabinet uncapped in a bottle. Discovered 10 years later, the gel hadn’t changed at all. He also observed that when the gel was dropped on the floor, it was good at picking up dust. If it could do that, it might be good at picking up pollen. Then, he stuck the gel to the legs of ants, and with a control group as a comparison, he found that those with the gel were good at picking up pollen. The next step was to try it using drones. He and his colleagues outfitted the drones with horsehairs to approximate a bee’s body. They then slathered the horsehairs with the gel. It was very effective at picking up pollen from flowers—to the rate of 10x more effective.

More research needs to be done to make the drones more maneuverable and energy efficient, but it does offer a promising alternative to our dwindling bee population. (Amina Khan of the Los Angeles Times as it appeared in The Virginian-Pilot, February 11, 2017, pg.5)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Predators and Creditors: How to Protect Your Family first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2017/03/depletion-management/ Fri, 10 Mar 2017 17:30:24 +0000 http://www.seonewswire.net/2017/03/depletion-management/ By Thomas D. Begley, Jr., CELA When a personal injury victim settles a case and the plaintiff is receiving certain public benefits such as SSL Medicaid, Medicaid Waiver programs, SNAP (Food Stamps), Section 8 Housing, or any other means-tested program,…

By Amy C. O’Hara, Esq., Littman Krooks LLP

Parents of children with special needs often have unique financial concerns, and one way to ease those concerns is to reduce their tax burden.

There are many tax deductions and credits available that parents may not be aware of. Parents of children with special needs should familiarize themselves with the deductions and credits and take care to document all expenses related to their children’s medical expenses, development and therapy.

Here are 5 useful tax deductions and credits for parents of children with special needs:

1. Medical & Therapy Expenses

The first type of deduction to consider is for medical and therapy expenses. For income tax purposes, learning disabilities are a type of medical condition. This may include autism, ADHD, cerebral palsy, and other learning disabilities.

While these expenses are limited by 10 percent of adjusted gross income, the limitation may be exceeded by certain types of out-of-pocket expenses.

Such expenses can include the following:

• Special schooling such as: tutoring that is specifically intended to address the special needs of the child.
• Regular education when it is intended to treat the child’s special needs.
• Aides that a child may require to benefit from education.
• Exercise programs, if they are recommended by a medical professional.
• Transportation to and from special schools or therapy sessions.
• Equipment, devices and supplies necessary to treat or alleviate a medical condition, including technology items such as communication devices.

2. Specialized Foods

A gluten-free, casein-free diet can be used as a deduction provided it is medically recommended. Generally, only the additional cost of the specialized foods over and above what would be paid for similar items is deductible.

3. Legal Expenses

In some cases, legal expenses related to your child’s special needs may be deductible, for instance if you hire an attorney to help you prove that your child’s medical expenses are legitimate.

Tax Credits

Even more helpful than a tax deduction is a tax credit, which applies directly to the amount of tax you owe. The tax credits most helpful to parents of special needs children are the Child and Dependent Care Credit and the Earned Income Credit. In both cases, a credit that is normally only available for children may also be used for an older child with special needs.

4. Child and Dependent Care Credit

The Child and Dependent Care Credit may be applied when you pay someone to care for your dependent, and it provides a tax credit of up to $3,000 per dependent, to a maximum of $6,000 for two or more dependents.  Child-care, after-school programs and day camp qualify for the credit.

The credit is available for children under the age of 13, but the age limit does not apply to older children with special needs.

5. Earned Income Credit

The Earned Income Credit can also be useful for parents of children with special needs. The credit generally may be applied by families with a low to moderate income and children under the age of 19, or up to age 23 for full-time students. However, for adult children living with their parents, the age limit does not apply.

In Conclusion

Parents of children with special needs know that there are unique challenges involved, including financial hurdles. However, with careful planning and the assistance of an experienced attorney who is sensitive to special needs issues, you can make sure you do what is necessary to reduce your tax burden and protect your child’s interests.

Learn more about Littman Krooks services at www.littmankrooks.com or www.specialneedsnewyork.com.

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Lottery winners have the option of taking the prize as a lump sum or an annuity that is divided into 30 annual payments. California exempts lottery winnings from income tax. However, a chunk of winnings are withheld for federal taxes. The annuity payments are also subject to the same federal tax albeit spread over each installment.

Establishing a trust can help lottery winners maintain a degree of anonymity and provide a tool for managing assets and finances. Trusts can also allow the future transfer of wealth to children and other heirs with minimal estate tax exposure. If a prize is assigned to a qualifying revocable living trust, the lottery will make installment payments to the trust.

Lottery winnings present a number of estate planning challenges. If a person with special needs wins the lottery, the winnings are likely to affect eligibility for government benefits such as Medicaid.

If the prize is received in an annuity towards the end of a winner’s expected lifetime, they could die before receiving all the installments. The balance of future payments then become part of the estate, like other assets. In such cases, the estate’s representatives will begin the process of transferring payments to heirs. The process is simpler if the winner has designated beneficiaries.

One of the first things a lottery winner should do is consult a lawyer to prevent making major mistakes. The cost of not taking the necessary estate planning measures can be devastating.

Pioneers of Elder Law – For over 30 years, Gilfix & La Poll Associates LLP has innovated creative legal solutions to help you manage and plan the future of your estate.
To contact an estate planning lawyer visit https://www.gilfix.com/ or call 800.244.9424.

Getting core documents in place is the bare minimum needed for estate planning. Doing so provides legal authority and clear direction for your incapacity or death. “Core documents” include a medical directive and general durable power of attorney, which allow for someone to make decisions on your behalf in the event of incapacity. Waiting until the last minute does not provide the time needed to address common issues beyond the core documents, such as correcting beneficiary designations or getting documents approved by financial institutions prior to the perceived emergency. For instance, if a general durable power of attorney is created for a client a day before surgery, there may be a lag in time for the bank to recognize the document in the event the client suffers an incapacity from the procedure. This could prevent the agent named from performing necessary functions. The inability to adequately consider and discuss proposed documents sometimes occurs when estate planning is rushed. Rather than being able to consider a significant amount of information over a period of several days or weeks, the time for contemplation is compressed into a period of hours or a couple of days.

The recent death at 61 of Bill Paxton, the actor famous for his roles in Apollo 13, Twister, Alien, Tombstone, among others, illustrates the very real risk of undergoing surgery. However, accidents consistently ranks in the top 5 causes of death in the United States and, given the way medical errors are reported, it is unlikely that those deaths are adequately represented in the number reported as accidents. Furthermore, the likelihood of a plane crashing is between 1 in 5,000,000 and 1 in 11,000,000 depending on who you ask. That is the likelihood of a “crash” and not the likelihood of incapacity or death due to a crash, which is slightly lower. The point of these figures is not to scare or prevent planning due to trip or surgery, but rather to promote planning before a perceived risk. Frankly, the “scary” things we hear about on the news are highly unlikely to be the things that result in our incapacity or death and each of us needs to have a plan for the risks we do not associate with an impending event.

Our goal in estate planning is legally coordinating your assets to go where you want them, but another goal is also to minimize risk from creditors, incapacity, probate, and other perils. Obviously, failing to plan avoids thinking about the risks bust does not actually avoid any risk. Knowledge of your personal risks empowers you to create a plan that can mitigate that risk. While planning is often seen as costly, the more significant cost is NOT planning. If a risk arises without a plan in place, then significant funds will be expended in a dispute, guardianship action, estate litigation, or other dispute that could have been avoided if planning had been undertaken. Please contact our attorneys to get your plan in place (or updated) so that we won’t be needed later to correct a major problem. If you are experiencing a problem due to a failure to plan, we can help address those concerns as well.

Ask Kit Kat – Baby Gators

Hook Law Center:  Kit Kat, what can you tell us about baby alligators at the North Carolina Aquarium?

Kit Kat:  Well, this is a very interesting story! 4 baby alligators have been residing at the North Carolina Aquarium in Manteo for the last two years, but the exhibit with them opened in December 2016. They’re not sure where the alligators are from—probably Florida—because they were acquired after a sting operation on some illegal operators of exotic pet sales. While at the aquarium, they’ve doubled in size and measure 18 inches in length. Ironically, the baby gators have been named Cheese, Turkey, Ham, and Gravy after the diet that their captors fed them. We can laugh now, but if they had continued on such a regime, they would have died prematurely.

The gators are being trained to respond to their given names through the use of distinctive lures. Cheese’s is a yellow star on the end of a pole. Turkey’s lure is a blue-and-white oval on a pole. By combining the lure with calling their name, the gators are taught to touch the lure with their snout. If they do the task correctly, they are rewarded with a piece of fish. Being able to identify each gator correctly, even though they have unique markings, will help staff treat them should they need medical attention. They are also being accustomed to human interaction.

Alligators in North Carolina are beginning to be an issue. The state is their northernmost range, but as people get them as pets when they are only a few inches long, they have tended to release them in streams or ponds in rural areas once they become untenable as a pet. Jeff Hampton, staff writer for The Virginian-Pilot, says, “It is not unusual to see an alligator swimming in a dark roadside canal around East Lake in Dare County. Merchants Millpond State Park in Gates County is home to a small group.”

For now, the 4 baby alligators are doing fine. They’re eating well and being treated to live crickets, which serve as a tasty reward, and as practice for hunting prey. Time will tell whether they remain at the aquarium. Some adult males grow to be as large as 12 feet. Space is one of the prime considerations. Stay tuned for further updates. (Jeff Hampton, “What’s in a name?” NC Aquarium’s baby gators know,” The Virginian-Pilot, Feb. 6, 2017, pg.3)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Events That Inspire Estate Planning first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2017/03/10-reasons-to-select-a-corporate-trustee/ Fri, 03 Mar 2017 16:56:23 +0000 http://www.seonewswire.net/2017/03/10-reasons-to-select-a-corporate-trustee/ by Thomas D. Begley, Jr., CELA Attorneys prepare many types of trusts. The trusts are for multiple purposes. They include special needs trusts, standard support trusts, discretionary support trusts, disclaimer trusts, bloodline trusts, incentive-based trusts, retirement plan trusts, and trusts…

By Thomas D. Begley, Jr., CELA

When a personal injury victim receives a settlement, one of the biggest post-settlement problems is making the money last. If the plaintiff is receiving means-tested public benefits, the monies must be put in a Special Needs Trust. How long do the beneficiary and other family members need that money to last? When the size of the settlement is significant, best practices would dictate that a three-step process be followed:

1. Counseling Session. Step 1 is a counseling session with the person with disabilities, the family members, if appropriate, the trustee, the attorney drafting the Special Needs Trust, and the Personal Injury attorney, if necessary. At that point, a discussion should be held as to what the immediate needs of the beneficiary are. Typically, these would include a home, a vehicle, a vacation, and repayment of debt. During the counseling session a budget should be prepared for the plaintiff’s living expenses going forward. The budget could be broken into three sections: (1) shelter expenses, (2) transportation expenses, and (3) personal expenses. For each item of expense a determination should be made as to whether the expense will be paid by the plaintiff or by the trust. A professional trustee should always be used. At that point, the trustee should prepare a Monte Carlo analysis to determine how long the trust will last. The Monte Carlo analysis is complex, but essentially it is based on trust rates of return and trust distributions. The analysis will determine how long the trust will last based on various rates of distribution. It is helpful if the beneficiary can determine how long the trust should last. If it should last the beneficiary’s lifetime and the plaintiff is healthy, this will likely be calculated on a life of 90 years. If the plaintiff is unhealthy, the life expectancy will be shorter.
2. Basic Principles. The second step in making trust assets last is to understand certain basic principles. Most trustees have a limit on what percentage of trust assets can be spent for the purchase of a home. This generally ranges between 15% and 25%. As a rule of thumb, a trust will last the lifetime of the beneficiary, if distributions are limited to approximately 4.5% of trust assets annually.

The Depleting Trust

In most instances the plaintiff will tend to adopt a budget for lifestyle he or she would like without consideration to how long the trust will last and what will happen when the trust is exhausted. If the professional trustee determines that the trust is beginning to deplete more rapidly than agreed upon, there is a five-step process. These include the following: notification, conversations, planning, documentation, and continuous follow up.

• Notification. It is recommended that monthly statements of trust activity be sent to beneficiaries, guardians, and, generally, all non-contingent remaindermen. If the trust is depleting, a letter should be sent, at least annually, indicating:
  • the current market value of the account;
  • the amount dispersed over the past 12 months; and
  • an estimate as to the time in which the trust will be depleted based on projected principal distributions for the coming year.

The depletion letter should indicate that steps can be taken to extend the lifetime of the trust.

• Conversations. Face-to-face conversations should be held with the beneficiary and interested family members to determine if current budget expenditures can be reduced. If so, what can be reduced immediately and what can be reduced over time? The beneficiary, family, and support system must understand that the trust will deplete and the time horizon over which it will deplete. There should be a discussion as to whether a different investment allocation strategy should be employed—either a more aggressive strategy to grow assets or a less aggressive strategy to protect current assets. Finally, there should be a discussion as to whether additional funds will be added to the trust such as payments from Structured Settlement Annuities or additions from family members. If the trust contains depleting assets such as real estate or non-liquid securities, such as LLCs, LPs, oil/gas mineral interests, etc., then there should be a discussion as to whether these assets should be liquidated.
• Planning. What is the plan when the trust is depleted? Will the beneficiary then rely solely on government benefits? Will family and friends contribute to care? Will family and friends fund a Third-Party Special Needs Trust to take the place of the Special Needs Trust? Will the Third-Party Special Needs Trust be funded with life insurance or retirement plans? Is the beneficiary in a private pay facility? Does this facility accept Medicaid? What will happen to the beneficiary if the current caregiver dies? If the trust is depleted, final accountings must be filed for the trust.
• Documentation. Trustees should retain documentation of trust administration including:
  • Monthly statements.
  • Annual depletion letter.
  • Other communications such as emails or letters. These communications would include discussions regarding a plan for non-liquid trust assets, beneficiary public benefit programs, discussions among interested parties for extending the trust, a final plan for the beneficiary after the trust is depleted, and final administration needs.
• Continuous Follow Up. During the course of administration of the trust, the trustee must ensure that the right benefits are in place, that living arrangements are made, that assets are sold off as required, that the necessary court approvals are obtained, and that all steps related to final administration are taken.

By Thomas D. Begley, Jr., CELA

A Virginia State Bar Association appointed a study committee on the future of the practice of law. Perhaps New Jersey should do the same. A draft copy of the final report is interesting reading. The committee identified a number of external forces affecting the practice of law:

• Advances in technology;
• Increasing competition from non-lawyers;
• Generational pressures as Baby Boomers begin to transition to Millennials;
• Client dissatisfaction with the billable hour;
• Increased in-sourcing of legal services by corporate clients; and
• Accelerated globalization of legal services.

Technology

Serious efforts are now underway to develop artificial intelligence for computers. IBM’s Watson, a computer with artificial intelligence, is a well-known example. Any information-intensive industry, including the legal profession, is ripe for Watson’s talents. IBM began moving into the legal marketplace in 2015. The son of Watson is called “Ross, the super intelligent attorney.” Ross can predict the outcome of court cases, assess legal precedents, and suggest readings to prepare for cases. Ross will replace many lawyers. Lawyers will not need to do legal research when they can just ask Ross.

Cybersecurity

Hackers have breached systems in government and private industry at an alarming rate and downloaded significant amounts of confidential data. Law firms now realize that a skilled hacker can succeed in attacking their data. The new mantra is to identify assets that need to be protected. Protect, Detect, Respond, and Recover.

Lawyer Advertising

The Internet and social media are becoming more important means of lawyer advertising. Most law firms have a presence on Facebook, Twitter and LinkedIn. How will this new form of advertising affect lawyers who want to advertise certifications or case results? Disclaimers are often required, but how is this done on Twitter, which only allows 140 characters per tweet? This issue must be addressed by our Supreme Court.

Access to Justice

Studies show that up to 80% of civil legal needs of the poor and up to 60% of the needs of middle income persons remain unmet. Funding for legal aid for the indigent has been substantially reduced, IOLTA revenue has decreased, and the cost of private legal representation has increased. Over 50% of potential clients who request legal assistance from legal aid are turned away due to lack of legal aid resources.

Some jurisdictions are initiating programs for delivery of limited legal services by persons who are not attorneys.

Alternative Business Structures

The American Bar Association has been considering multi-disciplinary practices (MDPs) for almost 20 years. Under an MDP a firm could be owned by lawyers and non-lawyers, and non-lawyers could participate in the delivery of law-related services or simply be passive investors in firms that deliver legal services.

Many former members of the armed forces are unaware of benefits available to them through the Veterans Administration. The Aid and Attendance Improved Pension—which has been available for nearly 60 years–is a case in point.  It provides funding to help defray the costs of ongoing assistance with such tasks of daily living as eating, taking medication, bathing, and toileting. Care in nursing homes…

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by Thomas D. Begley, Jr., Esquire, CELA

CMS has released the Medicare and Medicaid numbers for 2017. They are as follows:

Medicaid

• Income Cap[1] $2,205
• Maximum Community Spouse Resource Allowance (CSRA)[2] $120,900
• Minimum CSRA[3] $24,180
• Maximum Minimum Monthly Maintenance Needs Allowance (MMMNA)[4] $3,022.50
• MMMNA (July 1, 2016 until June 30, 2017)[5] $2,002.50
• MMMNA (July 1, 2017 until June 30, 2018)[6] $2,030.00
• Excess Shelter Allowance (July 1, 2016 until June 30, 2017)[7] $600.75
• Excess Shelter Allowance (July 1, 2017 until June 30, 2018)[8] $609.00
• Maximum Resource Limit (Individual)[9] $2,000
• Minimum and Maximum Cap on Equity in the Home[10] $560,000 –$840,000

Medicare

Part A

• Medicare Co-Payment – Skilled Nursing Facility (SNF)[11] $164.50
• Hospital Deductible[12] $1,316
• Per day Co-Insurance – Day 61 -90[13] $329
• Per day Co Insurance – Day 91-150[14] $658

Part A Premium (for voluntary enrollees only)

• With 30-39 quarters of Social Security coverage[15] $227
• With 29 or fewer quarters of Social Security coverage[16] $413

Part B

• Medicare Part B Deductible[17] – $183
• Standard Part B Premium[18] ^– $134

Medicare Part B – Single or Married and Filing Joint Return

Part B Income-Related Premium[19]

In addition, the monthly premium rates to be paid by beneficiaries who are married, but file a separate return from their spouse and lived with their spouse at some time during the taxable year are:

Standard Part D Cost-Sharing for 2017[20]

• Annual Deductible Maximum – $400
• Member Pays 25% of the Next… – $3,300 (25% = $825)
• Initial Benefit Period Maximum – $3,700 ($400 + $3,300)
• Donut Hole Threshold – $3,725

(Brand name drugs: 50% + 10% plan “subsidy,” Generic drug: 49% subsidy)

• Catastrophic Coverage – $4,950 ($400 + $825 + $3,725)

• Catastrophic cost-sharing:  Generic – $3.30/$8.25 or 5% (whichever is greater)
• Catastrophic cost-sharing: Brand – $7.40 or 5% (whichever is greater)

[1] 42 U.S.C. §1396a(a)(10)(A)(v); 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[2] 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[3] 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[4] 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[5] 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[6] 82 Fed. Reg. 8832 (Jan. 31, 2017).

[7] 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[8] 82 Fed. Reg. 8832 (Jan. 31, 2017).

[9] 20 CFR § 416.1205(c).

[10] 42 U.S.C. §1396p(f); 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[11] 81 Fed. Reg. 80062 (Nov 15, 2016).

[12] 81 Fed. Reg. 80062 (Nov 15, 2016).

[13] 81 Fed. Reg. 80062 (Nov 15, 2016).

[14] 81 Fed. Reg. 80062 (Nov 15, 2016).

[15] 81 Fed. Reg. 80072 (Nov 15, 2016).

[16] 81 Fed. Reg. 80071 (Nov 15, 2016).

[17] 81 Fed. Reg. 80063 (Nov 15, 2016).

[18] 81 Fed. Reg. 80063 (Nov 15, 2016).

[19] 81 Fed. Reg. 80066 (Nov 15, 2016).

[20] http://www.medicareadvocacy.org.

Three words: Outpatient observation status. Hospital patients and their families are often blindsided by the effect of these words. Outpatient observation status is a billing code hospitals use to protect themselves from penalty by Medicare for admitting patients for treatment which Medicare believes should have been provided on an outpatient basis. Use of this code is on the rise, having doubled between 2006 and 2014, according to The Center for Medicare Advocacy. Unfortunately, this can result in Medicare patients who do not have Medicare Part B paying entirely out of pocket for their the full cost of their hospital stay, hospital prescriptions, and/or nursing facility (rehab) care following a hospital stay. The financial effects can be devastating.

Use of the word “outpatient” in this context is misleading. You may spend the night (or several nights) in a hospital and technically still be classified as outpatient. It has nothing to do with where you receive the care or what kind of treatment you receive.

To address the issue, Congress passed the Notice of Observation Treatment and Implication for Care Eligibility Act in 2015. The NOTICE Act requires hospitals to notify individuals who receive observation services as an outpatient for more than 24 hours with written and oral notification of the classification within 36 hours after they begin receiving the services. The notice must explain the individual’s status as an outpatient and the reasons for the classification. It must explain the implication of that status on services furnished, particularly the implications for cost-sharing requirements and subsequent coverage eligibility for services furnished by a skilled nursing facility. It must be written in “plain English” and be provided in the individual’s own language, and the individual or a person acting on his behalf must sign to acknowledge receipt of the notification. If the individual or his representative refuses to sign, the hospital staff who presents it must sign.

If you or a loved one is classified as outpatient observation status during a hospital stay, fighting the classification can be extremely difficult. The Center for Medicare Advocacy recommends the following:

• At the BEGINNING of a hospital stay, have a proactive discussion with the hospital about your classification. Don’t wait to receive a written notice; try to prevent the use of outpatient observation status from the start.
• Ask the hospital doctor to admit (or reclassify) you as an “inpatient,” based on needed care, tests, and treatments; then have your primary care physician call to support this request.
• File an appeal with Medicare if your nursing home (rehab) coverage is denied.

File a complaint with your state health department if you did not receive a notice about outpatient observation status.

Ask Kit Kat – Frog’s Secret Weapon

Hook Law Center:  Kit Kat, what can you tell us about the frog and its powerful tongue?

Kit Kat:  Well, this is a very interesting story. I had never thought much about how a frog catches its prey, but a Ph.D. student at Georgia Institute of Technology named Alexis Noel has done some research on the matter. The frog tongue can move quite rapidly; we’re talking milliseconds from time of sticking its tongue out and retracting its tongue back into its mouth. As helpful as this is, it’s not the secret to its prowess in hunting. That is attributed to its saliva or spit which is composed of a unique substance which can change in viscosity instantly. For instance, when the prey (usually an insect) is first on its tongue, the spit is very viscous, similar to the consistency of honey, only more so. Later, the spit can change into a thinner fluid as it closes its mouth. The spit can change rapidly from one state of viscosity almost instantaneously. As a result, they can “capture meals in the amount of time it takes a human brain to think of and speak a word,” according to Noel and her colleagues.

Another thing Noel discovered about frogs’ tongues is that they are much softer than a human’s tongue. When compared to human tongues and human brains, a frog’s tongue is “slightly softer than (human) brains and 10 times softer than human tongues.” The softness contributes to elasticity, which in turn allows the frog to keep its prey inside its wide mouth and not fall out. Then to swallow the prey, the frog pushes down its eyeballs creating pressure to move the prey from the tongue to the throat. In addition, Noel and her colleagues teamed up with the Atlanta Botanical Garden to discover that 7 species of exotic frogs also had the same characteristics of extremely soft tongue tissue and the changeable viscosity of spit of the ordinary frog. These small amphibians are marvels of efficiency in securing prey to ensure their survival. What an interesting world we live in! (Ben Guarino, “Scientist cracks mystery of the frog’s powerful tongue. It’s called spit,” The Washington Post, February 1, 2017)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Beware Hospital “Outpatient” Observation Status first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2017/02/why-young-adults-should-consider-estate-planning/ Wed, 22 Feb 2017 20:00:31 +0000 http://www.seonewswire.net/2017/02/why-young-adults-should-consider-estate-planning/ Under California law, once a child turns 18 years of age they are viewed as an adult. Entering adulthood involves taking steps to prepare for the unexpected, whether it is a sudden illness or a serious accident. No one likes…

By Thomas D. Begley, Jr. Esquire, CELA

CASE STUDY 1: SIMPLE WILLS INADEQUATE TO PROTECT CHILDREN FROM PREVIOUS MARRIAGES

Andy (age 77) and Maureen (age 75) are in a long-term second marriage. Andy has two children from a previous marriage, Alexis (age 50) and Kit (age 48). Maureen also has two children from a previous marriage, Lauren (age 45) and Misty (age 44). Andy and Maureen have simple wills that give their entire estate to the surviving spouse with contingent gifts for the four children. After Andy dies, Maureen moves closer to her children and becomes estranged from Alexis and Kit. She changes her will to give her entire estate to Lauren and Misty.

CASE STUDY 2: DELAYED INHERITANCE LEADS TO LITIGATION

Andy, a widower (age 56), marries Paris (age 25). Andy has two children, Alexis (age 24) and Lauren (age 21), from his previous marriage to Maureen. Andy wants to provide for his new wife, but does not wish to disinherit his children. He creates a trust that names his two children as remainder beneficiaries. Andy dies and his children eventually become resentful for having to wait until Paris’ death to receive their inheritance. They institute litigation against Paris over extravagant distributions from the trust.

CASE STUDY 3: LONG-TERM CARE NEEDS THREATEN INHERITANCE

Andy and Maureen marry when they are in their 60s. Maureen has significantly more assets than Andy. Both Andy and Maureen have children from previous marriages. Maureen is concerned that her children’s inheritance will be diminished if Andy ever requires long term care, which she would have to pay for with her own funds.

CASE STUDY 4: CHILD’S BLENDED MARRIAGE RAISES ESTATE PLANNING CONCERNS

Andy and Maureen have a happy first marriage with two children, Alexis and Lauren. Alexis is married to Ken, who has children from a previous marriage and has difficulty keeping a job. Andy and Maureen are concerned that if they leave an inheritance outright to Alexis, Ken will “permanently retire” and live off of the inheritance.

WHAT ARE BLENDED FAMILIES?

Blended families take several forms:

• Married couples in which one or both spouses have children from a previous marriage.
• Families with children who are in second or subsequent marriages and who have children from previous marriages.
• Families with children whose spouses have children from previous marriages.

Blended families can face complex estate planning challenges. Issues can arise between spouses, or between children and their spouses. Typically, individuals in blended families want to provide for the spouse as well as the children from the previous marriage. In some cases, they also want to provide for the children from their spouse’s previous marriage.

ARE BLENDED FAMILIES COMMON?

Several trends related to divorce have increased the number of blended families.[1]

• Approximately 50% of American marriages end in divorce.
• Approximately 60% of remarriages end in divorce.
• Approximately 43% of marriages are remarriages for at least one party.
• The average duration of these marriages is 7.8 years.
• There are approximately 1,160,000 new divorces each year.
• Approximately one million children each year have newly-divorced/divorcing parents.
• 54% of divorced women remarry in five years.

WHAT ESTATE PLANNING CHALLENGES DO BLENDED FAMILIES FACE?

In a blended family, estate planning challenges can include:

• The potential for children to be disinherited.
• Delays in the children’s receipt of inheritance until after the death of their parent’s spouse.
• The need to protect assets from former spouses.
• Disputes over division of authority or responsibility.

WHAT ESTATE PLANNING STRATEGIES CAN HELP?

Estate planning for blended families is a form of asset protection. Depending on a family’s situation and needs, an estate planning attorney can help select and execute one of the following strategies.

Premarital and Marital Agreements. These agreements should address:

• The parties’ rights and responsibilities during their marriage with regard to living arrangements, division of obligation to pay expenses, and obligation to purchase and maintain long term care insurance.
• The parties’ rights and obligations if they divorce.
• The rights and obligations of the surviving spouse in the estate of the deceased spouse.

Life Estates. In a second marriage, one spouse often moves into the home of the other. The home is not always retitled jointly, nor should it be. However, the individual who owns the home often wants the spouse to have the right to live there for his or her lifetime. This can be accomplished by giving the surviving spouse a life estate in the home. Individuals who choose this strategy should attach certain conditions to the life estate, such as an obligation on the part of the surviving spouse to pay the home’s taxes, insurance, and maintenance expenses.

Consideration should be given to requiring an automatic termination of the life estate if the surviving spouse moves out or abandons the property for a certain period of time. Provisions should also be made regarding whether the property can be rented or sold, and, if so, who is entitled to the rent or proceeds of the sale.

Spray Spendthrift Trusts. These trusts are designed to benefit the surviving spouse and children. When drafting a spray spendthrift trust, the following should be considered:

• The trustee may be permitted to make distributions to the surviving spouse and designated children.
• Unitrust Distributions. A spouse may be given an annual unitrust distribution equal to a percentage of the trust. For example, the spouse might receive 4% of the total annual return on assets held in the trust or 4% of the total trust assets as calculated on an annual basis.
• Trustee Selection. A disinterested trustee may be appointed to help avoid conflicts of interest and strained family relationships while permitting distributions for “any appropriate purpose.
• Death of Spouse. The trust may stipulate that, upon the death of the surviving spouse, the remainder of the trust will be distributed to the testator’s children from a previous marriage or to children from both marriages.
• No Contest. Including a “no contest” provision in the trust minimizes the risk that the trust will be challenged.

Bloodline Trusts. These trusts are designed to benefit your child and his or her descendants. With the goal of keeping money in the family, the trust protects assets from the child’s creditors, including divorcing spouses, while maintaining maximum control for the child. The trust may include the following provisions:

• That your child will be the trustee unless he or she is involved in a divorce action or a lawsuit.
• That your child, acting as trustee, can distribute principal to or for the benefit of himself/herself or to his or her descendants.
• That there will be a disinterested trustee who can distribute principal for any appropriate purpose.
• That the trustee will have discretion to distribute income to or for the benefit of the child.
• That the trust terminates at your child’s death and the remaining principal is paid to your child’s descendants, not to your son- or daughter-in-law.
• A spendthrift provision, a provision that expressly states that your child has no right to terminate the trust, and a provision that protects the assets in the trust from creditors.

Irrevocable Life Insurance Trusts (ILITs). An ILIT allows you to provide for your children with life insurance and to use your remaining estate to provide for your spouse. The trustee of the ILIT purchases a life insurance policy on your life, and you pay the premiums. ILITs offer two major advantages. They prevent children from being disinherited because the trust names them as sole beneficiaries of the life insurance policy, and they ensure that children will receive inheritances promptly because the policy will pay the trust immediately upon your death.

There are also some variations on this strategy.

• Purchase your own life insurance policy and name your children as beneficiaries. The estate tax consequences of this technique must be considered.
• Have your children from a previous marriage own the policy while you pay the premiums, utilizing your annual exclusion gifts.

FLPs and LLCs. A family limited partnership (FLP) is an ideal tool for a family who owns real estate. The real estate is transferred to the partnership, which is composed of parents and children. A limited liability company (LLC), comprised of family members, is similar to an FLP. Both arrangements can be used to protect family assets from the claims of spouses and former spouses. FLPs and manager-managed LLCs can also protect family assets from the claims of your children’s spouses or former spouses.

Contracts to Make a Will. When appropriate, a contract to make a will offers a simple estate planning solution. Often, spouses want their wills to stipulate that everything will be left to the surviving spouse, with remaining assets to be divided on some basis between children from both families upon the death of the second spouse. But, at the death of the first spouse, the will of the surviving spouse typically becomes non-enforceable since it can be changed to disinherit the children of the first spouse. It is possible for the parties to enter into a contract to make a will, which essentially prohibits the surviving spouse from changing his or her will. The disadvantage of this strategy is that the surviving spouse may have a valid reason for wishing to change the will, completely unrelated to disinheriting the children of the deceased spouse or to delaying their inheritance.

Qualified Terminable Interest Property Trusts (QTIPs). With a QTIP, the will or trust of the spouse who dies first gives the surviving spouse the right to income from assets held in the trust. This income interest has the effect of deferring the taxes due at the death of the first spouse. It is also possible to draft a QTIP to include the right for the trustee to make distributions of principal exclusively to the surviving spouse. The surviving spouse has no right to direct payments from the QTIP. Upon his or her death, the trust typically distributes assets to the children of the first spouse. In most cases, a QTIP trust is drafted as part of an overall estate plan, either leaving a portion of the assets outright to the children or leaving those assets to a credit shelter trust for the benefit of the surviving spouse and the children from one or both marriages.

Disclaimer Trusts. When assets are left outright to a surviving spouse, he or she may be given the right to disclaim them into a disclaimer trust. This very popular type of trust should not be used if there is concern that the surviving spouse may disinherit the children of the deceased spouse.

[1] Divorce Magazine, http://www.divorcemag.com/statistics/statsUS.shtml

By Thomas D. Begley, Jr. Esquire, CELA

CRISIS AND KINDNESS

In times of crisis, people often show just how caring humanity can be. Major humanitarian relief efforts respond to large-scale natural and unnatural disasters. Strangers donate time and money to individuals injured in tragic accidents. Often, the first instinct when you learn that someone is hurt is to give money. Unfortunately, unbeknownst to the donor, this kind and selfless act can have devastating ramifications for the injured individual and his or her family.

If the injured individual or a family member is receiving means-tested government benefits, such as SSI or Medicaid, any extra income or assets could potentially lead to disqualification for benefits. Further, some people might hold a fundraiser in an effort to assist the injured party without a thorough understanding of the laws regulating them. Most dangerous are those “lone rangers” who hold fundraisers or collect money without notifying the family or providing the family with an opportunity to ensure that the proper safeguards are in place.

Crowd funding through organizations such as “Go Fund Me,” “Kickstarter” or “Indiegogo” also perform a valuable service in raising funds. However, unless the funds are handled correctly they may result in an unintended loss of public benefits for people with disabilities.

DEFINITION OF DISABILITY AS DETERMINED BY THE SOCIAL SECURITY ADMINISTRATION

If you are considering establishing a special needs trust, it is necessary to determine whether the individual is considered disabled within the definitions of the Social Security Administration (SSA).

For adults, disability is defined by SSA as the inability to engage in any substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment(s) which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

A child under age 18 will be determined disabled if he or she has a medically determinable physical or mental impairment or combination of impairments that causes marked and severe functional limitations, and that can be expected to cause death or that has lasted or can be expected to last for a continuous period of not less than 12 months.

A “medically determinable impairment” is one that results from anatomical, physiological, or psychological abnormalities which can be shown by medically acceptable clinical and laboratory diagnostic techniques. The impairment must be established by medical evidence.

WHO IS THE INTENDED BENEFICIARY?

It is often unclear when fundraisers are established whether the beneficiary of the fundraiser is the individual with a disability or family members. The answer to that question makes a big difference as to what strategies need to be employed.

PUBLIC BENEFITS

Many individuals with disabilities receive important public benefits. Some of these public benefits are means-tested. These include:

• Supplement Security Income (SSI)
• Medicaid
• Medicaid Waiver Programs
• SNAP (Food Stamps)
• Federally-Assisted Housing
• State Disability Services (i.e., DDD)

“Means-tested” means that there are limits on income and/or assets for program eligibility. For SSI purposes, income and assets of a parent living with a child with disabilities under age 18 are deemed to the child with disabilities. It should be noted that when used in this article “child” can refer to an adult child.

Other public benefits are not means-tested. These include:

• Social Security Disability Income (SSDI)
• Medicare

WHEN ARE FUND CONSIDERED RECEIVED?

Receipt of funds affects eligibility for means-tested public benefits.

When funds are considered received may seem simple enough, but the timing can have a major effect on individuals already receiving benefits. According to the Social Security Administration’s Program Operations Manual System (POMS), income is counted at the earliest of the following:

1. When the payment is received,
2. When the payment is credited to the beneficiary’s account, or
3. When the payment is set aside for the beneficiary’s use.

POMS SI 00810.030(A). It may be difficult to determine when income is counted for a special needs trust. The Social Security Administration may take the position that receipt occurs when the funds are held in a separate account, pending the establishment and funding of a special needs trust.

WHAT ARE THE OPTIONS WITH RESPECT TO DISPOSING OF THE FUNDS RECEIVED THROUGH A FUNDRAISER?

Depending on the amount of money raised, there are several alternatives for using the funds received from the fundraiser.

Funds Intended for Family Members of Child with Disabilities. If it is clear that the funds are raised for the family of a child with disabilities who is receiving means-tested public benefits, the family member can:

1. Spend the Money. The family member can spend the money on behalf of the individual with disabilities. However, if the individual with the disability is a child under the age of 18 and is living with a parent, the funds received from the fundraiser by the parent are deemed to the child for SSI purposes and may cause a loss of means-tested public benefits. If there is to be a spend down, it should occur during the money the funds are received.
2. Third Party Special Needs Trust. The family member can establish a Third Party Special Needs Trust to hold the money and use it for the special needs of the individual with disabilities. The assets in the Third Party Special Needs Trust are not counted as assets for public benefit purposes. Income is not counted, if distributed directly to third parties. The advantage of a Third Party Special Needs Trust, as opposed to a Self-Settled Special Needs Trust, is that the administration is much more flexible. Distributions are not limited by the “sole benefit of” rule discussed below, and there is no Medicaid payback on the death of the beneficiary with disabilities.
3. ABLE Account. An alternative to a Third Party Special Needs Trust is an ABLE Account. However, an ABLE Account can only be funded by contributions up to a maximum of the gift tax annual exclusion each year. This is not a maximum per individual donor, but rather a maximum on total contributions. For 2017, the maximum is $14,000.

Funds Intended for an Individual with Disabilities. If the funds are raised for an individual with disabilities, the individual has several alternatives:

1. Self-Settled Special Needs Trust. An individual Self-Settled Special Needs Trusts, also known as a (d)(4)(A) Trust, may be established when donated funds are identified as clearly not for the benefit of the individual with a disability. Self-Settled Special Needs Trusts are not as flexible as Third Party Special Needs Trusts in that distributions are limited for the “sole benefit of” the trust beneficiary and there is a Medicaid payback on the death of the beneficiary.
2. ABLE Account. Another alternative is to establish an ABLE Account.
3. Spend Down. The individual may also consider spending down the money in the month of receipt.
4. Accept the Money. Accepting the money would cause a loss of means-tested public benefits.
5. Transfer the Money. Transferring the money to a third party would likely result in a transfer of asset penalty if the beneficiary is receiving SSI, Long-Term Care Medicaid or SNAP.
6. Guardianship Account. Another alternative would be to place the funds in a guardianship account on behalf of the minor or incapacitated person. However, the funds would then be considered funds of the individual with disabilities and would cause a loss of means-tested public benefits. This is never a good option.

Pooled Trust. For smaller amounts of money (i.e., less than $150,000), Pooled Trusts are available. A Pooled Trust is a community trust operated by a non-profit disability organization. Fund are pooled with other members for investment purposes, but each individual has a separate subaccount. Individuals sign a Joinder Agreement. The Joinder Agreement can be for either Third Party or Self-Settled Trusts.

TAX CONSIDERATIONS

Under I.R.C. §102(a), gifts are excluded from the definition of income. It should be noted that this is not true for public benefit purposes. Therefore, there is no tax consequence to the individual receiving the gift. Generally, there is no tax deduction for contributions to fundraisers, unless a gift is made to or for the use of a qualified charitable organization. If the contribution is to a specific individual, it does not qualify as a charitable deduction.[1]

[1] I.R.C. §170(a) and (c); Rev. Rul. 79-81.

By Thomas D. Begley, Jr. Esquire, CELA

When a personal injury settlement is being finalized, consideration should be given to resolving a number of liens. It is good practice to obtain information on the existence and amount of these liens early in the process, because this information may be helpful in settlement negotiations.

The types of liens that often arise in personal injury cases include the following:

• Medicaid
• Medicare
• Medicare Advantage/Medicare Part D
• ERISA
• Veterans Administration
• TRICARE
• State Worker’s Compensation
• Federal Employees Compensation Act (FECA)
• Hospital
• Federal Employees Health Benefit Act (FEHBA)
• Federal Medical Care Recovery Act (FMCRA)
• Welfare Liens
• Mental Health Liens
• Victim of Crime Compensation
• Child Support
• Federal Tort Claims Act
• Derivative Claims

MEDICAID LIENS

Plaintiffs’ attorneys are often unfamiliar with the Medicaid laws in general and the Ahlborn case in particular.^[1]

Understanding Medicaid liens requires familiarity with two federal statutes.

• Assignment to State. As a condition of Medicaid eligibility, a Medicaid applicant is required to assign to the state any rights to payment of medical care from any third party.^[2] If the individual fails to pursue the claim, the state has the option of pursuing it.^[3] Very often in a personal injury situation, the plaintiff’s medical bills have been paid by Medicaid pending a determination of liability. Medicaid is required to be repaid from the proceeds of the tort recovery and imposes a lien against the recovery.^[4] In addition, states require Medicaid applicants to cooperate with the state in identifying and providing assistance in pursuing any third party who may be liable to pay for care and services as a condition of receiving benefit.^[5]

• Anti-Lien Statute. Under federal law, no Medicaid lien may be imposed by a state on the property of an individual prior to his death, except pursuant to a court judgment for benefits incorrectly paid.^[6]

PRACTICE TIP: In resolving Medicaid liens, it is important to carefully review the statement of amount due to be sure that the services being billed were actually received and were related to the injury subject to the recovery.

Extent of Lien. There are a number of issues to be considered pertaining to the extent of the Medicaid lien:

• Related to Injury. The Medicaid lien affects only Medicaid expenses related to the injury. If an individual has been receiving medical assistance through the Medicaid program for medical conditions unrelated to the injury, these do not have to be reimbursed out of the settlement. For example, a cerebral palsy victim may be receiving Medicaid and subsequently become involved in an automobile accident. Only the medical bills relating to the injury sustained in the automobile accident are subject to Medicaid recovery. Payments by Medicaid on account of the cerebral palsy are not subject to recovery because they were not caused by the acts of a third party and there is no third party liability. Medicaid officials may try to recovery unrelated medical charges, unless the attorney for the person with a disability identifies charges that are not related to the personal injury. Care should be exercised in this regard.
• Payment Prior to Recovery. The Medicaid lien only applies to payments made from the date of the injury to the date of the settlement, because these are the only expenses for which the third party is liable for reimbursement.
• Pro Rata Share. The Ahlborn case made clear that Medicaid’s right to reimbursement attaches only to the portion of the settlement, judgment, or award that represents payment for medical expenses, and not to proceeds intended to cover other items, such as pain and suffering and loss of wages. Therefore, under Ahlborn, Medicaid may recover only a pro rata share of its claim, which is determined by the ratio that the settlement amount bears to the reasonable value of the total claim.

Reasonable Value of the Claim. Cases settle for less than full value when there are issues with respect to liability or when the recovery is limited by the confines of the insurance policy or by comparative fault or contributory negligence. Some states, like Wisconsin, require, by statute, that the state is a party to the action and may be involved in the settlement negotiation.^[7]

When cases settle, it becomes difficult to determine the reasonable value of the entire claim. The Ahlborn court addressed the “risk of settlement manipulation” by reasoning that, “the risk that parties to a tort suit will allocate away the State’s interest can be avoided either by obtaining the State’s advance agreement to an allocation or, if necessary, by submitting the matter to a court for a decision.”[8] Alternatives for establishing the full value of the case might include the following:

• Medicaid Stipulation. It may be possible, as in the Ahlborn case, to obtain a stipulation between the plaintiff and Medicaid as to the reasonable value of the claim. Post-Ahlborn this may be unlikely.
• Defendant’s Stipulation. Although Medicaid may be unwilling to enter into a stipulation with respect to the fair value of the case, the defendant may be willing to do so. It is questionable as to whether a state Medicaid agency would accept a stipulation between the plaintiff and the defendant because such a stipulation might be easily manipulated after the case is settled.
• Expert Witness. An expert witness may be obtained to write a report determining the fair value of the case with reasons to support the conclusions. The expert witness might be a personal injury attorney with an outstanding reputation in the community. The expert witness report might be used in negotiating a settlement with Medicaid or admitted to a court as a basis for a court order.
• Court Order. A court order, which allocates the settlement among various categories of damages, may be obtained. The state Medicaid agency should be provided with notice of any court hearing.

MEDICARE LIEN

Statutory Lien. The federal government has a statutory lien for payments made under the Medicare Secondary Payer Act (MSP). The Act provides that Medicare may not make payments when, “payment has been made or can reasonably be expected to be made under a workmen’s compensation law or plan of the United States or a State or under an automobile or liability insurance policy or plan (including a self-insured plan) or under no fault insurance,” unless conditional payment has been made as a conditional payment.^[9]

Subrogation. Where there is a “conditional payment,” the United States may bring an action against the primary plan responsible for payment, and the United States shall be subrogated for payment of those expenses from the primary plan.^[10]   If it is necessary for the Centers for Medicare and Medicaid Services (CMS) to take legal action to recover from the primary payer, CMS may recover double damages.^[11]

Party Making Payment. CMS has a direct right of action to recover from any entity responsible for making primary payment. This includes an employer, an insurance carrier, plan, or program, and a third party administrator.^[12]

Party Receiving Payment. CMS also has a right of recovery from parties that receive third party payments. These include a beneficiary, provider, supplier, physician, attorney, state agency, or primary insurer that has received a third party payment.^[13]

Settlement. Under certain circumstances, Medicare claims may be waived in whole or in part or may be compromised:

• Lump-Sum Compromise Settlement. Cases will be compromised when there is questionable liability. In such cases, counsel notifies Medicare of the strengths and weaknesses of the defendant’s case in order to justify a reduction of the Medicare claim. The beneficiary is entitled to appeal an adverse decision on the request for waiver or compromise pursuant to section 870(c) of the Social Security Act.

When there is a lump-sum compromise settlement providing less than total compensation because of questionable liability, Medicare should review the compromise settlement prior to approval by the parties. As long as the settlement provides a reasonable amount for future medical expenses, Medicare will approve the settlement. If Medicare approves a settlement for less than the claimant’s outstanding injury-related medical expenses, Medicare applies the settlement proceeds to medical expenses in a coordinated fashion.

• Allocation of Damages Within the Settlement. Damages within the settlement are allocated for Medicare claim purposes among past medical expenses, compensatory damages, and pain and suffering. Only the portion of the recovery allocated to past medical expenses is available to satisfy the Medicare claim.

PRACTICE TIP: One way reduce a Medicare lien is by a court order allocating the settlement among the various components, including medical, upon notice to Medicare.

MEDICARE ADVANTAGE/MEDICARE PART D

Medicare Part D provides prescription coverage to eligible beneficiaries. Medicare Part D is covered by the Prescription Drug Plans (PDP). PDP is similar to Medicare Managed Care Plans known as Medicare Advantage, and they have a separate right of recovery from Medicare. Both Medicare Part D and Medicare Managed Plan will need to initiate their own recovery efforts since they are not part of the traditional Medicare recovery effort.

It can be argued that Medicare Part D and Medicare Advantage do not have any lien rights against personal injury settlements.^[14] This is not to say that they have no recovery rights. Any recovery rights are based in contract rather than the MSP statute.

Technically, Medicare Part C Plans have the same right of reimbursement as traditional Medicare Parts A and B, but do not have a lien. They are reimbursed according to the insurance contract and governing state law. The obligation to repay is set forth in federal law, as follows:^[15]

If a Medicare enrollee receives from an MA [Medicare Advantage] organization covered services that are also covered under State or Federal workers’ compensation, any no-fault insurance, or any liability insurance policy or plan…the MA organization may bill…the Medicare enrollee, to the extent that he or she has been paid by the carrier, employer, or entity for covered medical expenses.

The Medicare statute says, “the eligible organization may…charge or authorize the provider of such services to charge…such member to the extent that the member has been paid under such law, plan, or policy for such services.”^[16] While traditional Medicare has an automatic statutory right of recovery,^[17] the Medicare Advantage Plans have a right to recover but no statutory claim. While Medicare must be given affirmative notice of a third party liability claim, there is no such requirement for Medicare Advantage Plans. CMS maintains records of all third party liability claims involving traditional Medicare recipients, but does not maintain similar records for Medicare Advantage Plan recipients. There is no single source through which to verify coverage, payments or reimbursement rates.

It is important in settling a claim involving a Medicare Advantage Plan to be aware that there may be a Medicare lien for the traditional Medicare Parts A and B for conditional payments made under the Medicare Secondary Payer Act, as well as a right of recovery for Medicare Advantage for payments made by the MA Plan. In resolving a Medicare Advantage claim, the attorney should contact the MA provider requesting a claims itemization and should include a HIPAA release. The attorney should also request a copy of the Summary Plan Description (SPD). The plan’s right of recovery should be assessed and negotiated based on the subrogation language found in the SPD and governing law.

ERISA

There are two types of private medical insurance subrogation and they are handled in very different ways.^[18]  The first type of private insurance is through an Employee Retirement Income Security Act (ERISA) plan. The other is non-ERISA. ERISA plans are governed by the ERISA statute.^[19] Non-ERISA subrogation is governed by state law.

ERISA was enacted in 1974. Most medical plans provided by employers fall under the terms of ERISA. These plans may have liens against tort recoveries.

Appropriate Equitable Relief. Relief under ERISA is based on equitable principles, rather than legal relief, in the form of money damages for breach of contract.^[20]

ERISA Qualification. To qualify as an ERISA plan, a plan must be:

• a plan-funded program;
• established or maintained by an employer or employee organization, or both;
• for the purpose of providing medical, surgical, hospital care, sickness, accident, disability, or other encumbered benefits stated in ERISA to participants or their beneficiaries.

It is clear that a medical insurance policy covering a self-employed person and spouse does not constitute an ERISA plan. In addition, ERISA does not apply to church, government or farm plans or self-pay insurance contracts.^[21]

Plan Language. An ERISA plan can recover for damages received from third parties where the plan language clearly establishes such a right. Since an ERISA plan’s right to reimbursement is based in equity, it is subject to equitable defenses based upon a strict reading of the actual contract language.

Specific Identifiable Fund. The Plan’s right of recovery must be against a specific, identifiable fund, such as a tort recovery, as opposed to a claim against the general assets of the plaintiff. Such a claim against general assets would be a claim at law, rather than in equity.

Derivative Claims. An ERISA lien is enforceable against the settlement of the injured beneficiary on whose behalf benefits are paid, but it is likely unenforceable against the derivative claims of others related to the incident.^[22]

• Wrongful Death. State law often protects wrongful death claims from subrogation, so allocating more to wrongful death and less to the survival claim may reduce the lien. Also, the survival claim may be subject to federal or state estate or inheritance taxes. Medicare and Medicaid can collect even from wrongful death because federal law preempts state law.
• Loss of Consortium. Allocation of loss of consortium claims to those who do not have responsibility for medical bills, such as a spouse or child of the injured party, may avoid or reduce the health care lien.

VETERANS ADMINISTRATION CLAIMS

The Veterans Administration (VA) has a right of recovery against a third party when the VA pays for medical treatment on behalf of the veteran or his family.^[23] The VA has a lien in favor of the United States against any recovery the veteran or his family subsequently receives from a third party for the same treatment.

In any case in which the veteran is furnished care or services for a non-service-connected disability, the United States has a right to recover or collect reasonable charges for such care or services from a third party to the extent that the veteran (or the provider of the care or services) would be eligible to receive payment for such care or services from such third party if the care or services had not been furnished by a department or agency of the United States.^[24]

TRICARE CLAIMS

TRICARE (formerly known as Civilian Health and Medical Program of the Uniformed Services or CHAMPUS) claims are covered under the Federal Medical Care Recovery Act (FMCRA).^[25] The right of recovery includes care that may be received by the beneficiary at a uniformed services facility or under TRICARE, or both. Each branch of the service has a slightly different model agreement that must be signed when private counsel asserts a separate cause of action to recover for injury-related care paid by TRICARE on a contingent basis.

STATE WORKER’S COMPENSATION

Generally, where there is a State Workers’ Compensation claim and also a third-party liability case and the third-party liability case settles, there is a Workers’ Compensation lien against the third-party liability proceeds. Frequently, the Workers’ Compensation lien is negotiable, because the Workers’ Compensation carrier is anxious to get the plaintiff off its books.

FEDERAL EMPLOYEE COMPENSATION ACT

The Federal Employee Compensation Act (FECA) is the federal equivalent of the State Workers’ Compensation laws.[26]

HOSPITAL LIENS

Hospital lien statutes are state-specific. Generally, every hospital, nursing home, licensed physician, or dentist has a lien for services rendered, by way of treatment, care, or maintenance to any person who has sustained personal injuries in an accident as a result of the negligence or alleged negligence of any other person.[27] Hospital liens are very difficult to negotiate.

FEDERAL EMPLOYE HEALTH BENEFIT

The Federal Employee Health Benefit Act (FEHBA) provides group health insurance for federal employees.[28] Although there is no statutory right of subrogation or reimbursement, FEHBA contains a preemption provision under which the terms of insurance contracts issued by its private carriers purportedly preempts state and local law.[29] However, the Supreme Court has held that FEHBA does not provide contract insurers with a federal cause of action or federal jurisdiction in a subrogation/reimbursement claim, leaving the matter to the state courts, and it further called into question whether a FEHBA plan may assert any contractual recovery right at all against a beneficiary where such claims are prohibited by state law; the Court was “not prepared to say” that a carrier’s contract with the government “would displace every condition state law places on that recovery.”[30]

FEDERAL MEDICAL CARE RECOVERY ACT

The federal statutory scheme provides several independent bases for recovery of medical costs expended on behalf of government personnel and their dependents for injury or disease not connected to their military or other government service, but the Federal Medical Care Recovery Act (FMCRA)[31] establishes standards generally applicable to claims of all federal departments and agencies. Significantly, while the government may exercise its recovery rights under the statute by making claims directly against third-party tortfeasors, the statute authorizes no such claims against a beneficiary. The statute provides, inter alia, that in any case in which the United States furnishes or pays for medical or dental care and treatment under circumstances creating third-party tort liability for such expenses, the United States shall have a right to recover from the third party the reasonable value of such care and treatment.[32]

WELFARE LIENS

In New Jersey, as well as in many other states, there is a lien against real and personal property of a person who has been assisted by or received support from any municipality or county. This is true whether a person has been in a county facility or at home.[33]

MENTAL HEALTH LIENS

Many states provide mental health services to its residents and usually the state has a lien against persons who receive treatment in a psychiatric facility. For example, in New Jersey a person with a mental illness who is over age 18 and is being treated in a state psychiatric hospital shall be liable for the full cost of his treatment, maintenance, and all necessary related expenses.[34]

VICTIMS OF CRIME COMPENSATION

Many states, such as New Jersey, have statutes providing for compensation for victims of certain crimes. These state statutes are modeled on the Federal Crime Victim Compensation Act.[35] The state programs are partially funded by the Federal Government. These programs offer compensation to victims and survivors of victims of criminal violence, including drunk driving and domestic violence for:[36]

• Medical expenses
• Loss of wages
• Funeral expenses

CHILD SUPPORT

Many states have statutes imposing liens for child support against any proceeds recovered from a personal injury action. For example, the New Jersey statute[37] provides, “[a] judgment for child support entered and docketed with the Clerk of the Superior Court shall be a lien against the net proceeds of any settlement negotiated prior or subsequent to the filing of a lawsuit, civil judgment, civil arbitration award, inheritance, or workers’ compensation award.

FEDERAL TORT CLAIMS ACT

Personal injury actions against the U.S. government are brought pursuant to the Federal Tort Claims Act.[38] The remedy against the United States for personal injury or death arising from a negligent or wrongful act or omission of any employee of the government while acting within the scope of office of employment is exclusive of any other civil action or proceeding for money damages.[39]

DERIVATIVE CLAIMS

Liens are generally enforceable against the settlement of the injured party on whose behalf benefits are paid, but are unenforceable against derivative claims of others related to the incident.[40]

[1] Arkansas Dept. of Health and Human Servs. v. Ahlborn, 547 U.S. 268, 126 S. Ct. 1752 (2006).

[2] 42 U.S.C. §1396k(a)(1)(A).

[3] 42 U.S.C. §1396k(a)(1)(A).

[4] 42 U.S.C. §1396k(a)(1)(A).

[5] 42 U.S.C. §1396k(a)(1)(C).

[6] 42 U.S.C. §1396p(a); 42 C.F.R. §§433.135 et seq.

[7] W.S.A. §49.89.

[8] Ahlborn at 1756.

[9] 42 U.S.C. §1395y(b)(2)(A)(ii) and (B).

[10] 42 U.S.C. §1395y(b)(2)(B)(iii).

[11] 42 C.F.R. §411.24(c)(2).

[12] 42 C.F.R. §411.24(e).

[13] 42 C.F.R. §411.24(g).

[14] Medicare Reimbursement Claims, Frank Verderane, American Association for Justice teleseminar (April 24, 2007), fverderane@plattner-verderane.com.

[15] 42 C.F.R. §422.108(d).

[16] 42 U.S.C. §1395mm(e)(4).

[17] 42 U.S.C. §1395y.

[18] Eight Ways to Defeat or Minimize ERISA Reimbursement Claims, Roger M. Baron, American Association for Justice teleseminar (April 24, 2007).

[19] 29 U.S.C. §1101 et seq. (ERISA).

[20] Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 122 S. Ct. 708 (2002) (largely overturned by Sereboff v. Mid-Atlantic Med. Servs., Inc., 547 U.S. 356, 126 S. Ct. 1869 (2006)).

[21] 29 U.S.C.A. §1003(b).

[22] Admin. Comm. of the Wal-Mart Stores, Inc. v. Gamboa, 479 F.3d 538 (8tth Cir. 2007).

[23] 38 U.S.C. §1729.

[24] 38 U.S.C. §1729(a)(1).

[25] 42 U.S.C. §§2651-2653.

[26] 5 U.S.C. §§ 8131 and 8132; 20 C.F.R. § 10.705-719.

[27] N.J. Stat. Ann. § 2A:44-36.

[28] 38 U.S.C. § 1725(a)(1).

[29] 5 C.F.R. § 890.

[30] Empire HealthChoice v. McVeigh, 547 U.S. 677 (2006).

[31] 42 U.S.C. § 2651.

[32] 42 U.S.C. § 2651(a).

[33] N.J. Stat. Ann. § 4:4-91.

[34] N.J. Stat. Ann. § 30:4-60(c)(1).

[35] 42 U.S.C. § 10602.

[36] 42 U.S.C. § 10602(b).

[37] N.J.A.C. 2A:17-56.23b.

[38] 28 U.S.C. §§ 1346(b), 1402(b), 2401(b), and 2671-2680.

[39] 28 U.S.C. § 2679.

[40] Admin. Comm. of the Wal-Mart Stores, Inc. v. Gamboa, 479 F.3d 538 (8th Cir. 2007).

When an individual age 55 or older dies, states are required to seek recovery of payments from the individual’s estate. Since the assets of an individual must have countable assets valued below $2,000, collectability is often an issue. Good planning and inherent exceptions to estate recovery further complicate recovery.

Some estate will be exempt from Medicaid estate recovery. The most common exemption is the existence of dependents. The state is prohibited from initiating estate recovery if a spouse, a child under age 21, or a disabled child survives the beneficiary.

Another exception to Medicaid estate recovery exists when recovery would case an undue hardship on the heirs. Undue hardships include cases where the survivors make a living from the asset, such as a family farm or other family business, when assets are illiquid, when a home is of modest value, or when recovery would not be cost effective.

Additional exemptions may also apply depending on what type of planning was done. For example, savings bonds, which are governed by the regulations imposed by the U.S. Treasury, may be exempt from estate recovery under certain circumstances. Additionally, real property for which the recipient held a life estate, or real property that was transferred out of the recipient’s name, would not be included in the estate, and therefore would not be subject to estate recovery.

While not all estates will be completely exempt from Medicaid estate recovery,, knowing what will happen to your estate during the planning so that you can minimize potential consequences both during lifetime and after death is imperative. The staff of the Hook Law Center not only help address a family’s concerns related to the potential risk of losing assets, but also help families assess other consequences, such as the tax implications of transferring a home or low-basis investment.

Ask Kit Kat – Misnamed Rat

Hook Law Center:  Kit Kat, what can you tell us about the origin of the Norway rat?

Kit Kat:  Well, this ubiquitous rat of the United States is incorrectly named. It is known as the Norway rat or brown rat, but oddly enough, it did not come from Norway. The mix-up occurred around 1769 (18^th century) when the British naturalist, John Berkenhout, wrote of its arrival in England from Norwegian ships. However, this was incorrect. Other records show that the brown rat arrived in Europe at the start of the 17^th century attracted to cities with its brick and stone construction. But, somehow, the name persisted. The Norway/brown rat then made its way to North America on boats with the legions of immigrants who would settle the new lands. Today, rats can be found on every continent except Antarctica. Its cousin, the black rat, is generally smaller and is sometimes known as the ‘roof rat.’

Other myths about rats are now being re-examined. The Norway rat seems to be in the clear as to its role in the bubonic plague. The black rat may have had a part to play in the plague, but not so much as previously thought. Current research into the matter leads us to the possibility that the plague was transmitted via gerbils and/or through the air. As merchants traveled to the East along the ancient Silk Road, they may have picked up the deadly disease through a combination of factors.

So let’s refer to this resourceful creature as the brown rat. It can reproduce quite easily. Females are fully mature at three months, and the gestation period is only three weeks long! So, they are quite numerous. They are very content to feast on garbage and other leftovers they find in their environment. They’re not out to hurt their fellow humans. Isn’t it interesting to know more about the creatures in our midst? (Dave Taft, “A Rat with a Bum Rap. And It Isn’t Even Norwegian,” The New York Times, NY Region, Jan, 31, 2017)

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Distribution of This Newsletter

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Exceptions to Medicaid Estate Recovery first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2017/02/issues-to-consider-when-your-child-goes-off-to-college/ Mon, 13 Feb 2017 17:34:21 +0000 http://www.seonewswire.net/2017/02/issues-to-consider-when-your-child-goes-off-to-college/ It’s February, folks. That means that college acceptance letters will soon be arriving via email, snail mail or however they get around these days. Once the initial euphoria has worn off and you know that your child is definitely going…

Elder law attorneys are probably the most overlooked tool for incapacity planning. Beyond providing the legal documents and tools for effectively coordinating decision making and financial management, elder law attorneys provide an experienced concierge in areas most people have not confronted, such as coordination of benefits, hiring of supplemental providers, and coordinating financial planning. Furthermore, elder law attorneys focus on the effective implementation of their documents. Put simply, a power of attorney or other document is false comfort if the document cannot be used effectively when needed.

Aside from attorneys, financial advisors are underutilized as a tool to address incapacity and death. Building a solid relationship with a financial advisor can be an extremely effective way of coordinating assets at death, preventing or mitigating financial exploitation, and budgeting for medical expenses. If you have a financial advisor that you have been working with it is important that your advisor and your attorney are “on the same page” so that your legal and financial plans are coordinated effectively.

Age, dementia, and other issues can cause individuals to be more susceptible to scams or even result in a change in personality. While financial advisors used to limit their focus almost solely to investment return, most are realizing that placing alerts for unusual expenditures and regularly discussing budgeting and other matters with clients. The increased focus on these concerns provides an important service and some protection in the event of incapacity. Frequently, we meet with individuals who have only realized the extent of their cognitive decline due to issues brought up by their financial advisors such as unusual withdrawals, large expenditures, increased purchases, and other general changes in financial behavior.

A third overlooked tool is a trusted CPA. Many individuals think that their income picture in retirement is so simple, that they do not need a CPA to assist in preparing their tax return. However, having returns regularly filed with a CPA provides a quick and easy place for a substitute decision maker or executor to go in the event of incapacity or death, respectively. Furthermore, we frequently see individuals who self-file tax returns miss out on important tax benefits available to older clients, such as deductions for long term care premiums, deductions for healthcare expenses, and “catch-up” contributions to retirement savings. Sometimes we see families who fail to properly plan payments for the benefit of a medically needy family member in order to claim them as a dependent. These benefits quickly justify the cost of using a CPA experienced in income tax planning and filing.

A fourth overlooked set of tools are the multitude of services and applications that have proliferated to address coordination of banking, account, health, and other information. Most banks have created smartphone applications to manage accounts, which is a great help to any family caregiver. Mobile payment platforms for in-home care services prevents the need to trust new caregivers near cash or checkbooks, while delivering instant and direct payment for their services and keeping a clear record for tax and other reporting needs. Password applications provide a digital vault to keep your passwords so that they can be accessed by your substitute decision maker in the event of your incapacity or death (or by you, if you’ve forgotten a password). Other applications can help you (or a trusted loved one) keep track of your finances, health data, and other important information in an easily accessible location. While these services do come at an expense many of them quickly justify their costs in the security, comfort, and protection they provide.

As new products and services develop, we at Hook Law Center are constantly working to stay abreast of changes and trends. By specializing in elder law, our attorneys and staff can assist in more than coordinating your legal plan, we can help find ways for you and your family to smooth the inevitable transition that occurs during illness, incapacity, or death. If you are curious how some of these tools can be used to better serve you or your family members, please call our office to schedule an appointment to discuss your needs.

Ask Kit Kat – Bao Bao Returning Home

Hook Law Center:  Kit Kat, what can you tell us about that adorable panda 3-year old who is currently at the Washington, DC National Zoo?

Kit Kat:  Well, sadly, Bao Bao, a female giant panda, will soon be leaving Washington, DC and returning to her home country, China. The zoo has not yet set an exact date for the trip, but they are scheduling some goodbye events before she goes. Though born in the United States on Aug. 23, 2013, she will be sent to her home country by the time she turns age 4. Bao Bao’s mother, Mei Xiang, is from China, and by agreement with the China Wildlife Conservation Association, any cub born at zoos in the United States must return to China around the time that they turn 4 years of age. Bao Bao was the first baby panda since 2005 to survive birth at the zoo and thrive. 4 years of age is when a panda is capable of breeding.

Bao Bao has been living an independent life at the zoo since March 2015. She is kept separate from her mother, Mei Xiang. This is to prepare her to lead a solitary life like she would be living, if she were in the wild. Separation usually occurs around the age of 18 months to 2 years.

Preceding Bao Bao was Tai Shan, another panda born on July 9, 2005 at the National Zoo. Tai Shan was returned to China in February 2010. Alas, for a little while, we can enjoy the company of Bei Bei, a male giant panda, born on Aug. 22, 2015. He’s only 1.5 years old now, so we still have time to watch him mature and grow to adulthood. ( Michael E. Ruane, “Bye Bye, Bao Bao,” The Washington Post, Local section, January 18, 2017)

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Distribution of This Newsletter

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Commonly Overlooked Tools for Incapacity Planning first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2017/02/the-future-of-the-practice-of-law/ Thu, 02 Feb 2017 21:59:39 +0000 http://www.seonewswire.net/2017/02/the-future-of-the-practice-of-law/ By Thomas D. Begley, Jr., CELA A Virginia State Bar Association appointed a study committee on the future of the practice of law. Perhaps New Jersey should do the same. A draft copy of the final report is interesting reading.…

By Thomas D. Begley, Jr., CELA

A Third Party Special Needs Trust is usually used in a Medicaid context not for the benefit of the grantor of the trust, but for the beneficiary.

The grantor of the trust is typically a parent, but could be grandparent, sibling, other relative or friend. The grantor uses the grantor’s assets to fund the trust. The assets of the beneficiary cannot be used to fund a Third Party Special Needs Trust. In order for the trust to be a Special Needs Trust, the beneficiary must be disabled. Disability is usually determined ,y the fact that the beneficiary has received a Determination of Disability from the Social Security Administration and is receiving either Supplemental Security Income (“SSI”) or Social Security Disability Income (“SSDI”). The trust is designed so that the assets are not counted for Medicaid eligibility purposes. The beneficiary is then able to take advantage of the continuation of public benefits including usually SSI and Medicaid, as well as use the assets in the trust to enrich the beneficiary’s life. The trustee is given complete discretion with respect to distributions, and special needs language is used in designing the trust. Provisions made for distributions to the beneficiary during the beneficiary’s lifetime and distribution of any remaining principal and accrued income upon the death of the beneficiary.

Trustee

It is always good practice to select a professional trustee. The professional trustee has expertise with respect to public benefits law, tax Jaw, investment management, and usually has the ability to assist in navigating the disability system. Often the grantor of the trust is uncomfortable with a professional trustee, but this problem can usually be solved by appointing a family member as trust protector. The trust protector monitors the performance of the trustee and is given the authority to remove and replace the trustee. The trust protector’s power to remove and replace the trustee can be conditioned on cause, which would be defined in the trust document, or can be without cause. It is generally required that the replacement trustee be a professional with a certain amount of assets under management. In order for disability organization to qualify, the asset management limit might be as low as $50,000,000. On occasion, the grantor of the trust has worked with a financial advisor who would like to continue to be the financial advisor after the trust is established. Many professional trustees, such as Comerica Bank, have arrangements with money managers, such as Morgan Stanley or UBS, where Comerica will retain the outside money manager to invest the funds. This should be spelled out clearly in the trust document. The investment manager has an additional cost for managing the funds. The combined cost of the investment manager and the trustee usually exceeds the cost of having a professional trustee manage the funds in-house. This should be clearly understood by the client.

Alternatives to a Special Needs Trust

There a number of alternatives to Special Needs Trusts. These include the following:

• Disinherit a Child. The problem with this strategy is that one cannot be certain that public benefits, as we know them today, will continue forever. Many public benefits have been cut back in recent years and there is no guarantee that current benefits will not be reduced as well.
• Leave Money to the Child. The problem with this approach is that unless the funds being left to the child are very significant, they may not last long if the child’s needs, particularly medical needs, are great. It is usually better to maintain public benefits and establish a trust for needs or wants that will not be covered by public benefits.
• Leave Funds to Sibling. This is the common strategy that frequently backfires. The idea is to leave the share of the person with disabilities to a brother or sister with the understanding that the brother or sister will use that money to care for the child with disabilities. The problems occur when the child to whom the funds are left is sued by a creditor, is divorced, or simply says, “I want to use this money for myself. The Will says that I have to use it for my sibling with disability, but I am not going to use it for that purpose.” Sometimes it is the sibling that makes this decision, but frequently it is the spouse of the sibling who pushes for that result.
• Pooled Trust. A Pooled Trust is a good solution for relatively small amounts of money. If the trust is less than $100,000, Pooled Trust makes sense. If it is between $100,000 and $200,000, a Pooled Trust should be compared to a Third Party Special Needs Trust. If the amount involved is in excess of $200,000, a Third Party Special Needs Trust is almost always the best solution.
• ABLEAccount. New Jersey has adopted legislation authorizing ABLE accounts. These accounts are expected to come into existence sometime in the next few months. ABLE accounts are already in existence in several states, and some states, such as Ohio, permit out-of-state residents to open an ABLE account in that state. A problem is that not more than the gift tax annual exclusion amount can be contributed to an account in any one year and no beneficiary can have more than one account. The annual exclusion gift tax exemption for 2017 is $14,000. So, if the inheritance is $14,000 or less, an ABLE account might make sense.

Planning Considerations

Let’s examine the seven planning considerations in the context of a Third Party Special Needs Trust.

• Availability. Assets in a Third Party Special Needs Trust are not available for SSI or Medicaid purposes, because the Special Needs Trust gives the trustee sole discretion with respect to distributions and prohibits the beneficiary from revoking the trust. If the assets in the trust are not available, they are not counted for SSI or Medicaid eligibility purposes.
• Transfer of Asset Penalty. There is a transfer of asset penalty to the grantor for transfers to a Third Party Special Needs Trust. This is why a Third Party Special Needs Trust is seldom utilized in Medicaid planning for the grantor.
• Payback. A Third Party Special Needs Trust is not required to have a provision calling for payback to Medicaid for medical assistance paid on behalf of the trust beneficiary.
• Funding. Virtually all assets could be used to fund a Third Party Special Needs Trust. If retirement assets are being used, typically the trust is simply made the beneficiary of the retirement account upon the grantor’s death. Accumulation Trust language should be included. Beneficiary designations of life insurance, annuities or retirement accounts must be addressed. If part of the funds are going to healthy children, and part are going to the Special Needs Trust, consideration should be given to leaving the retirement accounts to the healthy children, rather than to the trust. Administration of a trust with a retirement account is somewhat complex, even for professional trustees.
• Tax Considerations
  • Income tax. A Third Party Special Needs Trust can be designed as a grantor trust or a non-grantor trust.
  • Gift tax. A Third Party Special Needs Trust can be designed as an IDGT or a non-IDGT.
  • Estate tax. A Third Party Special Needs Trust can be designed so that the assets in the trust remain in the estate of the grantor or are excluded from the estate of the grantor.
• Estate Recovery. There is no estate recovery against the estate of the grantor of a Third Party Special Needs Trust or the beneficiary, so long as the grantor retains no interest in the trust.
• Elective Share. Assets in a Third Party Special Needs Trust would be subject to the elective share stature.

by Thomas D. Begley, Jr., Esquire, CELA

CMS has released the Medicare and Medicaid numbers for 2017. They are as follows:

Medicaid

• Income Cap[1] $2,205
• Maximum Community Spouse Resource Allowance (CSRA)[2] $120,900
• Minimum CSRA[3] $24,180
• Maximum Minimum Monthly Maintenance Needs Allowance (MMMNA)[4] $3,022.50
• MMMNA (July 1, 2016 until June 30, 2017)[5] $2,002.50
• MMMNA (July 1, 2017 until June 30, 2018)[6] $2,030.00
• Excess Shelter Allowance (July 1, 2016 until June 30, 2017)[7] $600.75
• Excess Shelter Allowance (July 1, 2017 until June 30, 2018)[8] $609.00
• Maximum Resource Limit (Individual)[9] $2,000
• Minimum and Maximum Cap on Equity in the Home[10] $560,000 – $840,000

Medicare

Part A

• Medicare Co-Payment – Skilled Nursing Facility (SNF)[11] $164.50
• Hospital Deductible[12] $1,316
• Per day Co-Insurance – Day 61 -90[13] $329
• Per day Co Insurance – Day 91-150[14] $658

Part A Premium (for voluntary enrollees only)

• With 30-39 quarters of Social Security coverage[15] $227
• With 29 or fewer quarters of Social Security coverage[16] $413

Part B

• Medicare Part B Deductible[17]                                                                              $183
• Standard Part B Premium[18]                                                                                                                         $134

Medicare Part B – Single or Married and Filing Joint Return

Part B Income-Related Premium[19]

In addition, the monthly premium rates to be paid by beneficiaries who are married, but file a separate return from their spouse and lived with their spouse at some time during the taxable year are:

Standard Part D Cost-Sharing for 2017[20]

• Annual Deductible Maximum $400
• Member Pays 25% of the Next…                                        $3,300 (25% = $825)
• Initial Benefit Period Maximum                         $3,700 ($400 + $3,300)
• Donut Hole Threshold                                                                         $3,725

(Brand name drugs: 50% + 10% plan “subsidy,” Generic drug: 49% subsidy)

• Catastrophic Coverage             $4,950 ($400 + $825 + $3,725)

• Catastrophic cost-sharing:  Generic           $3.30/$8.25 or 5% (whichever is greater)
• Catastrophic cost-sharing: Brand        $7.40 or 5% (whichever is greater)

[1] 42 U.S.C. §1396a(a)(10)(A)(v); 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[2] 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[3] 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[4] 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[5] 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[6] 82 Fed. Reg. 8832 (Jan. 31, 2017).

[7] 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[8] 82 Fed. Reg. 8832 (Jan. 31, 2017).

[9] 20 CFR § 416.1205(c).

[10] 42 U.S.C. §1396p(f); 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[11] 81 Fed. Reg. 80062 (Nov 15, 2016).

[12] 81 Fed. Reg. 80062 (Nov 15, 2016).

[13] 81 Fed. Reg. 80062 (Nov 15, 2016).

[14] 81 Fed. Reg. 80062 (Nov 15, 2016).

[15] 81 Fed. Reg. 80072 (Nov 15, 2016).

[16] 81 Fed. Reg. 80071 (Nov 15, 2016).

[17] 81 Fed. Reg. 80063 (Nov 15, 2016).

[18] 81 Fed. Reg. 80063 (Nov 15, 2016).

[19] 81 Fed. Reg. 80066 (Nov 15, 2016).

[20] http://www.medicareadvocacy.org.

To qualify financially for long-term care Medicaid in Virginia, you must have countable assets (“resources”) totaling $2,000 or less. If you are applying for Medicaid and you are married, your spouse who is not receiving Medicaid may retain countable resources valued at one-half of your collective countable resources, or $120,900 (in 2017), whichever is lower.  Countable resources include (but are not limited to) bank accounts, investments, retirement accounts, and real property other than your primary residence.  Non-countable resources include one automobile, certain types of savings bonds and irrevocable prepaid funeral contracts, household goods and personal effects, and your primary personal residence, if you or your spouse are living there.

If you are applying for Medicaid to help pay for long-term care services in your own home, your home will not count against you. If you are applying for Medicaid to help pay for long-term care services in a nursing facility, but your spouse is remaining in the home, the home will not count against you.  If you are single and applying for Medicaid to pay for long-term care services in a nursing facility, then the home will not count against you for a period of six months, beginning on the date you left the home.  After you have been out of the home for six months, if there is no spouse remaining in the home, it is considered a resource available to you and from which you should be paying for your long-term care expenses.  To avoid having the home counted against you at that point, you will need to make a good faith effort to sell the home, by listing it for sale at its tax assessed value.  Failure to do so will mean that your Medicaid benefits end, and you will be responsible for the entire cost of your care.

There are steps we can take to protect your home and avoid having to list it for sale, with a little pre-planning. In certain situations, it makes sense to transfer a home to an irrevocable trust as a part of five-year planning before the need for long-term care arises (the transfer is subject to Medicaid’s five-year lookback period).  In other situations, we may be able to use the “caretaker child” exception and transfer the home without penalty to a child who has lived with you and cared for you for at least two years, preventing you from requiring care in a facility during that time.  There are other exceptions and strategies we may use, as well – transfers to a blind or disabled child or to a sibling who has lived in the home for at least a year and who has some interest in the property, for example, may be made without penalty.

Medicaid’s rules and regulations are intricate and frequently misunderstood. For questions relating to Medicaid eligibility and how you may qualify, work with a professional who is well-versed in this complex area of the law.

Ask Kit Kat – Fake or Real Fur

Hook Law Center:  Kit Kat, how can you tell if fur is fake or real?

Kit Kat: Well, I know all the rage now is fake fur, but you have to be careful, because some retailers are still using real fur and advertising it as fake or ‘faux fur.’ The word “faux” is French for false or fake. To tell the difference, separate the fibers, and look to the base of the item. If you see a weave backing, then it is fake or faux. Also, the ends of the fur will be more blunt, and not tapered, as they would with real fur. I am not sure what the motivation to use faux fur is, but the practice is continuing. Frequent sources of real fur are factory-farmed raccoons, dogs, and rabbits.

Thank goodness the Humane Society of the United States (HSUS) continues to monitor this situation. What they have found is not good news. All types of retailers from discount to high-end stores pass off real fur items as faux, when they are not. HSUS has alerted the FTC (Federal Trade Commission) that they have found 37 items sold by 17 retailers that are still using real fur. They make coats, footwear, purses, and keychains from the real fur. Up to now, the FTC has not fined any companies, but they have the power to do so. Pierre Grzybowski of HSUS says HSUS’ latest information is the result of 4 years of data collection. Until stronger action is taken by the FTC, the consumer can help by assuming that “anything that looks like animal fur might well be,” says Gryzbowski. Don’t fall for the fake products. Boycotting these items will speak volumes to retailers. (“Are you sure your fur is fake?” All Animals, November/December 2016, p. 9)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Will Medicaid Take My House? first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2017/01/smartphone-app-helps-nonverbal-children-communicate-through-symbols/ Tue, 31 Jan 2017 20:00:18 +0000 http://www.seonewswire.net/2017/01/smartphone-app-helps-nonverbal-children-communicate-through-symbols/ Predictive typing firm SwiftKey has launched a smartphone app that aims to provide special needs children with an easier way to communicate. SwiftKey Symbols is described as an assistive symbol-based communication app specially designed for children with autism and other…

A person who had a disability prior to age 26 may now setup an ABLE Account, and anyone may contribute to such account; provided, however, that total contributions to the account may not exceed $14,000. The person with the disability may use the money for “qualified disability expenses,” such as housing and basic living expenses. The utilization of the ABLE Account funds for such purpose will not be considered in-kind support and maintenance. To demonstrate the value of these accounts, I am going to use two common examples:

Parents Did Not Charge Rent: Ron’s Case

Ron is a 19-year old with Down Syndrome who lives with his parents. Ron just started to receive SSI; but, because his parents do not charge him for food or shelter, he receives a 1/3 reduction of his full benefit amount due to in-kind support and maintenance. The monthly household food and shelter expenses total $2,175, and because Ron is one of three people living in the house, he is responsible for a total of $725. Because of the reduction in income, Ron is unable to start paying his parents his pro rata share of the household food and shelter expenses. An ABLE Account is established for the benefit of Ron, and Ron’s parents contribute $2,000 to the account. Ron will pay his parents his $725 share of rent (from a combination of his SSI check and his ABLE Account). The rent payments will be reported to the Social Security Administration, and the Social Security Administration will then increase Ron’s SSI check to the full $735. To continue to receive the full benefit amount, Ron must continue to pay his parents rent. (Bear in mind that earned and unearned income may also factor into Ron’s benefit amount, but this is for a later discussion). 

Household Expenses Too High: Jackie’s Case

Jackie is a 35-year old with Cerebral Palsy who lives with her sister. When Jackie moved in with her sister, her pro rata share of household expenses totaled $1,000 and the full SSI benefit was not sufficient to cover her pro rata share. As a result, Jackie received a 1/3 reduction in her benefit due to in-kind support and maintenance. Jackie established an ABLE Account and the Trustee of her Special Needs Trust distributed $5,000 to the account. Jackie can now pay her sister $1,000 to cover her pro rata share of the expenses (via SSI and her ABLE Account). The change in circumstances will be reported to the Social Security Administration who would then increase Jackie’s SSI check to the full $735 a month. From that point forward, Jackie’s Special Needs Trust will continue to distribute money into her ABLE Account so that she can continue to pay her pro rata share of household expenses and receive her full SSI check.

Ask Kit Kat – All About Skunks

Hook Law Center:  Kit Kat, what’s the latest information about skunks, and what should you do if your pet has encountered a skunk?

Kit Kat:  Well, this can cause some problems you might not anticipate, though, generally, your pet’s encounter with a skunk can be quite harmless. Usually, the skunk gives some warning before employing its ultimate weapon—the spray. Initially, you may notice the telltale smell, but there may be other symptoms like drooling, sneezing, or vomiting. More severe symptoms can emerge a few days later like lethargy and pale gums. If the more severe symptoms appear, immediately take your pet to the vet to be checked. In most cases, the severer symptoms occur after a direct spray to the face.

Now, how to deal with cleaning your pet after a potent spray. Ordinary pet shampoo will not be strong enough. You will need to make your own mixture composed of 1 quart of 3% hydrogen peroxide, ¼ cup baking soda, and 1-2 tsps. of dishwashing liquid. Lather your pet well and let it sit for about 5 minutes. Then, thoroughly rinse with lots of water. If your pet has long hair, you may want to consider clipping them before shampooing, because a shorter coat will foster more effective results. There may be some bleaching of the fur with this procedure, but it is not harmful to them. Repeat as necessary.

To prevent your house/property from being attractive to skunks, there are several things you can do. First, if you store food in your garage/shed like bird seed or dry pet food, make sure it is in well-sealed containers. Second, make sure areas around decks are blocked, so they cannot make their home there. Third, keep exterior lights at night on or install motion-activated lights. Skunks do not like light. Fourth, discourage their nesting in your yard by sprinkling kitty litter in front of their den/hole or stuffing it with twigs and leaves. This will let them know, that they are not welcome.

Hopefully, with this knowledge, you will be well-equipped to handle your pet’s skunk encounter. If your pet is actually bitten, you should take your pet to a veterinarian right away. Skunks can carry rabies, and prompt medical attention could be crucial. (“Pets and Skunks: A Smelly Dilemma,” ASPCA Action, Issue #3, 2016, p. 8)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Maximizing Your Child’s SSI by Utilizing ABLE Accounts first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2017/01/california-caregiver-law-aims-to-prevent-elder-abuse/ Tue, 17 Jan 2017 20:00:40 +0000 http://www.seonewswire.net/2017/01/california-caregiver-law-aims-to-prevent-elder-abuse/ The law seeks to enhance the safety of elderly and disabled people who receive private home care services from a caregiver who assists them with daily tasks. Senior citizens can often be vulnerable to abuse, whether it is physical, sexual,…

On the other hand, there are things that you can do to avoid conflict in your family after you are gone. The first step, and perhaps the most important one, is to make sure that you know your family – both the good and the bad. You can love all your children and grandchildren very much and still recognize that one or more of them have serious financial or addiction problems that might not make them good choices as a fiduciary. You can love your family and recognize that some of your children do not get along and will not work together well. You may have a child who means well but really doesn’t understand the realities of financial planning or managing wealth and who needs a trust to protect his or her interests. You can have a child who is great with money but oblivious to the emotional interactions within the family. Once you have identified potential problems within the family, discuss with your attorney how to draft your documents to manage or avoid the potential conflicts you can already see.

For instance, if you have children who do not get along and you have determined that trust planning for them meets your goals, you might avoid making the children trustees of each other’s trusts. That way they do not have to be in conflict with one another over distributions from the trust and can focus, instead, on their relationship as siblings. This may be particularly true in instances where a trust is created for only one child as a result of an addiction issue. Depending on the circumstances, a professional trustee may even make sense. A no contest clause could also make sense in appropriate circumstances, especially where you are making an uneven distribution of your estate, or you have one or two descendants who like to cause trouble.

The second step is to know your assets and the relative importance and value that each member of the family places on such assets. For instance, if you have a family farm, it may be very important to maintain the farm as such while others may see it as a development opportunity. If your goal is to maintain the property as a family farm, you will want to take steps to ensure that this asset is controlled by family members who think as you do. If you have other assets that you can use to equalize bequests to your family, it may make sense to give the farm to one child who wants to maintain the farm, while giving the liquid assets to another who has no interest in farming. If you have multiple family members who value the farm or really any business, it may make sense to create a family LLC for the farm that you can run as a family while you are alive. Nothing, and I mean nothing, will pass on your values and traditions like incorporating your family into your business while you are alive. By doing so, you pass on your passions, your business strategies, your values in ways that make them truly alive for the next generations.

A similar issue arises with respect to tangible personal property. It is not uncommon for family members to fight over the distribution of tangible personal property. While most families ultimately work this issue out themselves, if only because the cost of legal help rarely makes sense, it can cause tensions within the family that may take a long time to clear up. By knowing the importance that your family members place on particular items of tangible personal property, you can alleviate these tensions in many cases while you are alive. You can give the tangibles away to particular people during your lifetime. This can be done one-on-one or at a family party where the children take turns choosing items. If you are concerned that the children may fight over things, you can even sell them and take a personal vacation.

The third step is to communicate with your family. It is rarely a good idea to keep your estate plan a secret from your family members. If you have decided that only one of your children should be a fiduciary or only one needs a trust or you have made some other uneven distribution of your estate, let all of the children know. Explain, while you can, why you have made your choices as you have. Usually, the family understands your decisions and, even if they do not like the decisions, they are willing to accept your decisions on the matter. After all, it is your money and you can do with it what you like. Secrecy in the family, especially where one family member has been favored by an ailing parent and the other family members feel isolated from that parent, is a leading cause of conflict that ultimately ends up resolved in court. Not just because one child feels left out, but because the trust within the family has been broken. Once you are gone, the opportunity is lost.

The fourth step is to encourage your named fiduciary to seek qualified legal counsel in connection with the administration of your estate. Some problems can be easily resolved with careful guidance of the fiduciary through the administration of the estate. It can also reduce conflict within the family to have a dispassionate third party communicate with the beneficiaries, explain the process etc., so that the focus of any disappointment or anger may not rest on the child named to act your fiduciary.

Addressing potential conflicts within the family before death with your attorney cannot guarantee that conflicts will not arise. However, an experienced estate planner like the attorneys at the Hook Law Center, can offer individualized advice and assistance to reduce the conflict while you are alive and to minimize the conflict after your death.

Ask Kit Kat – Kitten Nursery

Hook Law Center:  Kit Kat, what can you tell us about the special kitten nursery in NYC?

Kit Kat:  Well, they are doing a wonderful job and performing a unique service to the feline population of New York City. Leave it to New York—a city of 8 million people also has an outsized population of kittens. Breeding season is April to November, and kittens proliferate. This particular nursery is located on the Upper East Side at East 91^st Street and was opened in 2014, because the ASPCA needed some way to deal with the high number of kittens. It can handle up to 300 kittens at a time. Once they reach 8 weeks of age and are spayed, they are transitioned to one of the regular ASPCA locations.

It takes a horde of volunteers to handle these little darlings. They need individual attention to become accustomed to handling by humans. Some have come to the nursery as young as a day old. The volunteers act as surrogate mothers. They feed them individually with tiny bottles of formula. They mimic the mother cat’s grooming with the use of a toothbrush. The grooming act, in turn, stimulates the kitten to feed and take the bottle. The volunteers also rub the kittens’ tummies with warm water to get them to use the litter box. Bubbles are blown at them to foster their hunting skills.

In the nursery’s two-year existence, it has handled 3,500 kittens! Kitten euthanasias have declined by 20 percent, because the kittens are able to get the care they need at a critical time in their development. Kittens from the same litter stay together and are given names starting with the same letter of the alphabet. “Orion, Ozzy and Osbourne in one cage; Hallie, Hamlet and Hiro in the next.” It’s a great service to the feline population. Often the mother does as much as she can for her kittens, but if she has to move suddenly because she feels threatened, frequently a kitten or two get lost in the shuffle. Thank goodness this safety net is here to help! (Andy Newman, “Two Rooms, 300 Kittens,” The New York Times, New York Region, November 23, 2016)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Intra-Family Conflict After Death – It’s Expensive first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2017/01/do-you-need-to-revisit-your-estate-plan-in-2017-the-answer-is-probably-yes/ Tue, 10 Jan 2017 16:31:53 +0000 http://www.seonewswire.net/2017/01/do-you-need-to-revisit-your-estate-plan-in-2017-the-answer-is-probably-yes/ Estate Planning attorneys generally advise that plans be revisited with regularity to adjust for changes in law and changes in personal circumstance. At a minimum, your estate planning documents should be reviewed every 2-5 years, but 2017 is unique in…

As a reminder, ABLE accounts are for blind or disabled individuals whose blindness or disability occurred before the individual’s 26^th birthday and i) who are entitled to benefits under the Social Security Act (SSI or SSDI); or ii) who self-certify that they have a condition listed on the Social Security Administration’s list of compassionate allowances conditions and have a signed qualifying disability diagnosis from a qualified physician; or iii) who self-certify that they have an eligible disability and have a signed qualifying disability diagnosis from a qualified physician. ABLE accounts may be opened by the disabled individual in his/her own capacity if he or she is 18 years of age and competent to make financial decisions for him or herself. If the disabled individual cannot open the account independently, a guardian or attorney in fact acting under a valid durable power of attorney may open the account on the individual’s behalf. Parents can open such accounts on behalf of minors. All accounts can be opened online at able-now.com.

ABLE accounts, similar to the 529 education accounts they are modeled on, allow for contributions to grow free of federal and state income tax and for distributions for “qualified disability expenses” to be made free of federal and state income tax. A “qualified disability expense” is one which is incurred at a time when the individual is eligible (as described above), which relates to the person’s blindness or disability and which helps maintain or improve the person’s health, independence and quality of life. This standard is quite broad and can include education, housing, transportation, employment training and support, assistive technology, health, financial management, legal fees, funeral and burial expenses etc. It will be important to track and account for these expenses, because the total distributions from the account will be reported to the IRS annually. Maintaining detailed records and receipts will be an important part of administering an ABLE account. Failure to use the money in the ABLE account for a qualified disability expense (or to be able to prove such expense) will subject the withdrawal to a 10% penalty and the individual will include the amount of the withdrawal in his or her income. It is also possible that such non-qualified funds could be counted as income or as a resource for means-tested benefit programs. An important side-benefit of contributing to an ABLE account is that Virginia allows an income tax deduction of up to $2,000 per contributor.

ABLE accounts are limited in some very important ways. Contributions to an ABLE account are limited to the amount of the annual gift tax exclusion, currently $14,000/year. This limit applies to contributions from all sources, so the account cannot be used to shelter large sums of money. Furthermore, upon the death of the disabled individual, any balance in the ABLE account is subject to payback to Medicaid for funds paid by Medicaid on behalf of the disabled individual after the creation of the account. Finally, for disabled individuals collecting SSI, balances in an ABLE account in excess of $100,000 are counted as an asset for determining eligibility for SSI (but not for Medicaid eligibility). Although Virginia currently has a ceiling of $500,000 on the assets that can be in an ABLE account, ABLE accounts are not a substitute for Third-Party Special Needs Trusts or for First-Party Special Needs Trusts because of the limitations on annual contributions and the Medicaid payback requirement. However, they can function very well as an adjunct to a well-conceived plan to care for individuals with disabilities. An ABLE account can be a way to provide independence for some individuals who are able to manage their own financial affairs and may be an excellent repository for unexpected inheritances or for extra savings.

If you would like to discuss how to utilize an ABLE account in your planning for a person with disabilities, contact one of the experienced attorneys at the Hook Law Center so we can help you make sense of possibilities.

Ask Kit Kat – Sea Turtles in Danger

Hook Law Center:  Kit Kat, what can you tell us about sea turtles in the Outer Banks and how they are faring during this cold patch of weather?

Kit Kat:  Well, the sea turtles who overstayed their normal residency in the Outer Banks are having quite a time this winter. Temperatures have been unusually cold. Even though, the cold snaps don’t last for days on end, they are still a danger to these warm-water, loving creatures. According to Jeff Hampton of The Virginian-Pilot, “turtles cannot move when water temperatures fall below 50 degrees.” Most have left the area by now, but a few get fooled by a warm fall, and forget to  leave to go south for the winter. Fortunately, for them, they got delayed in the right place to get expert treatment!

8 green sea turtles, one loggerhead, and one Kemp’s ridley turtle were rescued from the beaches of Pimlico Sound over the weekend of December 10-11, 2016. They were rescued by staff from the North Carolina Aquarium-Roanoke Island, volunteers from the Hatteras Network for Endangered Sea Turtles, and rangers from the National Park Service. The turtles were then treated at the aquarium’s rehabilitation center. It’s a slow process. They are gradually warmed by a rate of 5 degrees per day, until reaching their normal body temperature. The treatment involves administering fluids and analyzing their blood. Some even require antibiotics if they happen to also catch pneumonia. Once they are stabilized, they are released to a beach further south, but they must first be able to swim and eat normally.

This current rescue effort was quite small compared to last year. At that time, the rescue teams were overwhelmed with the number of  turtles needing care when caught in a prolonged cold snap. Rosemary Lucas, coordinator of the rehabilitation center, said they had tubs of warming water all over the center—even in hallways and bathrooms. Contributions from the community help in these efforts. If you would like to donate to this cause, you may do so online at ncaquariums.com/roanoke-island with the code SEATURTLE2016.  Contributions by check may be sent to NC Aquarium, 374 Airport Rd., P.O.Box 967, Manteo, NC 27954 with the notation of STAR or SEA TURTLE in the subject line. (Jeff Hampton, “Stunned by the cold,” The Virginian-Pilot, December 14, 2016, p. 4)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post ABLE Accounts Open in Virginia first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2016/12/special-needs-trust-fairness-act-passes-congress/ Tue, 20 Dec 2016 20:34:25 +0000 http://www.seonewswire.net/2016/12/special-needs-trust-fairness-act-passes-congress/ On December 7, 2016, the Special Needs Trust Fairness Act passed Congress as part of the 21st Century Cures Act and is expected to be signed by President Obama very soon. This is a momentous victory for persons with disabilities…

By Thomas D. Begley, Jr., CELA

(Article originally published in the Barrister)  Section 8 of the Federal Housing Act of 1937 provides a rental assistance program for low-income families and individuals. HUD pays rental subsidies so eligible families can afford decent, safe and sanitary housing. The programs are generally administered by Public Housing Agencies (PHAs). Generally, the family pays 30% of its adjusted monthly income for rent. Household income must be within the applicable limit established by HUD. The limits are based on family size and locality. Family members must be U.S. citizens or eligible aliens. There are income limits. Income includes Social Security and Disability benefits, pensions, annuities, alimony, some welfare payments and regular contributions from others. Lump sum acquisitions such as personal injury settlements, are not counted as income. If the personal injury plaintiff receives a settlement and puts the money under the mattress and spends it over time, the expenditures do not count as income and do not affect Section 8 eligibility.  Historically, distributions from trusts, including Special Needs Trusts, have been counted as income, unless they are used for medical purposes or are irregular and sporadic.

In an important decision for Section 8 Housing Voucher recipients, the United State District Court for the 1st Circuit reversed the District Court decision in an important public housing case.(1) In the lower court case,(2) the District Court held that Kimberly DeCambre was receiving distributions from an irrevocable Special Needs Trust funded with the proceeds of a personal injury settlement and disqualified DeCambre from her housing assistance on the grounds that she was no longer income eligible. The Housing Authority held that because the distributions from the Special Needs Trust should be counted as income, the amount of the subsidy provided under Section 8 should be reduced $0 . Over a three year period, the distributions from the trust exceeded $200.000. The Housing Authority and the District Court held the entire amount of the distributions were income and, therefore, DeCambre lost her eligibility for Section 8 assistance. The court stated that if Kimberly DeCambre had put the money under her mattress and spent it over time, there would have been no affect on her Section 8 eligibility. However, the court held that once the personal injury settlement was deposited into the trust, it somehow changed its charac ter and all distributions from the trust were considered distributions of income. These distributions, when added to DeCambre’s other income, reduced her subsidy to $0.

On appeal, an amicus brief was filed by the Special Needs Alliance, the National Academy of Elder Law Attorneys and the National Housing Law Project in support of DeCambre. The Appellate Court noted that lump sum additions to family assets, such as settlement for person or property losses are specifically excluded under HUD Regulations from annual income. DeCambre argued that because all of the funds in her Special Needs Trust derive from a series of lump sum settlement payments for a personal injury. the Housing Authority was required to exclude all of her distributions from her annual income. The lower court agreed up to this point stating that if DeCambre had simply put the money under her mattress and used it in the same manner that the trust had made distributions, there would be no problem because there is no asset test under Section 8. However, the District Court reasoned that by depositing the lump sum payments into the Special Needs Trust, the character of the distributions changed so that each distribution was 100% countable as income.

On appeal the amicus brief contended that the principal deposited into the Special Needs Trust should considered principal and only the income earned by investing the principal should be considered income. The Court of Appeals held that DeCambre’s Special Needs Trust was funded exclusively with the proceeds from a series of tort settlements. Had these settlement proceeds been paid directly to DeCambre, the parties agreed that they would have been treated as a lump sum addition to family assets and, therefore, would have been categorically excluded from annual income upon receipt under HUD’s Regulations. The parties agreed that income derived from investments should be considered income. The only issue was when the trust distributes to or for the benefit of the tenant, some or all of principal originally paid into the trust, how should that distribution be characterized. The Housing Authority maintains that even if DeCambre’s settlement proceeds bad the character of a lump-sum addition to family assets when they entered the Special Needs Trust, they no longer possess that character once they were disbursed from the Special Needs Trust. The Court of Appeals concluded that distributions of principal from the Special Needs Trust remain principal and only the investment income is considered income. The question not before the court was, what is the implication for Third-Party Special Needs Trusts? Should distributions of principal not be considered income, but be considered simply a distribution of principal as with a First-Party Special Needs Trust? The issue was not argued in DeCambre, but logically it would seem that the same result should obtain.

As a matter of procedure in both First-Party and Third-Party Trusts, the Housing Authority should look at the resident’s prior years’ federal and/or state income tax return.

Whether or not the DeCambre decision will be accepted by other PHAs in other districts remains to be seen. The decision may be of limited effect. Section 8 is being amended to provide an asset test of $100, 000.

• DeCambre v. Brookline Housing Authority, Case 15-1458, Document 00117013731 (June 14, 2016 ).
• Brookline Housing Auth. 95 F. Supp. 3d (D. Mass. 2015).

By Thomas D. Begley, Jr., CELA

One of the trusts used in Medicaid Planning is a Disability Annuity Special Needs Trust (“DASNT”). A previous Straight Word article discussed a Disability Annuity Trust (“DAT”). These trusts are designed so that an individual can establish a trust and transfer assets to the trust for the benefit of a disabled child of any age or a disabled individual under age 65 without incurring a Medicaid transfer of asset penalty. The problem with that trust is that the assets in the trust are considered available for public benefit purposes. Therefore, if  a DAT were established for the benefit of an individual receiving Supplemental Security Income (“SSI”) and/or Medicaid, they would become ineligible for those public benefits because the assets in the trust would be countable. The solution would be to wrap a DAT inside a Special Needs Trust (“SNT”). In a Medicaid Planning context, the monies to be used to fund the trust would belong to the third party, usually a parent or a grandparent, so the SNT would be a Third-Party Special Needs Trust (“TPSNT”). In a typical situation, the parent would require long-term care and be applying for Medicaid.   In order to become immediately eligible, from an asset standpoint, the parent would transfer the assets to a DASNT. The trust is exempt from the SSI and Medicaid transfer of asset penalties, and the assets in the trust would not be considered available because of the special needs provisions.

Generally, a family member, other than the trust beneficiary, would be the trustee of the DASNT, although a professional trustee could be utilized.

There are seven main issues to be considered in drafting any trust involving a potential Medicaid recipient.

These include:

• Availability;
• Transfer of asset penalty;
• Payback provision;
• Funding;
• Tax considerations, including income, gift and estate taxes;
• Estate recovery; and
• Elective share.

Let’s examine each of these issues in the context of a DASNT.

Availability

The assets in the DASNT would not be available, because the trust would be designed to give the trustee complete discretion with respect to distributions. Standard Third­ Party Special Needs Trust language would be used in designing the trust. The standard DAT language would also be included. Because of the special needs provisions, the assets in the trust are not counted as assets of the beneficiary.

Transfer of Asset Penalty

There would be no transfer of asset penalty imposed upon the grantor, usually a parent or grandparent, by SSI and Medicaid, because there is a statutory exemption(1) from the penalties for transfers of assets to or for the sole benefit of individuals with disabilities. For a child with a disability, there is no age limit. If the beneficiary of the DASNT is an individual other than a child, there is an age limit of 65.

Payback

Whether a “sole benefit of” trust is subject to a Medicaid payback is open to question. New Jersey takes the position that such a trust must include a Medicaid payback and this issue has not been litigated. Under the provisions of HCFA Transmittal 64, a payback does not appear to be required so long as distributions are made to the beneficiary on an actuarially sound basis. This means that the distributions must be made over the actuarial life expectancy of the beneficiary as determined by the tables contained in HCFA Transmittal 64. Many states follow this interpretation with respect to “sole benefit of” trusts including DATs and DASTs.

Funding

Because a DASNT is a crisis Medicaid planning strategy, generally all assets are placed in the trust.   A careful analysis must be made as to whether to include retirement accounts. If the life expectancy of the grantor is short, a better strategy may be to take the risk and use the retirement accounts to pay for care. If the life expectancy is longer, the best strategy may be to simply pay the tax and transfer the after-tax assets to the DASNT.

Tax Considerations

• Income. The income generated by a DASNT is taxed to the beneficiary.

• Gift.  There would be a gift from the grantor to the trust for gift tax purposes.
• Estate tax. The assets in the trust would be excluded from the estate of the grantor, but included in the estate of the beneficiary.

Estate Recovery

There would be no Medicaid estate recovery from the estate of the grantor, but there would be estate recovery from the estate of the beneficiary. Since the state requires a payback, then the payback would replace the estate recovery provisions. The payback would include all medical assistance paid to the beneficiary since birth.

Elective Share

Transfers of assets to a DASNT would be subject to elective share considerations. It is good practice for both spouses to contribute the assets to the DASNT.

Comparison Between DAT and DASNT

CONSIDERATION             DAT                                                       DASNT

Typical Grantor                Parent/Grandparent                             Parent/Grandparent

Typical Trustee                 Family Member (Non-Beneficiary)         Family Member (Non-Beneficiary)

Assets Available                Yes                                                              No

SSDI/Medicare                 Yes                                                              Yes

SSI/Medicaid                    No                                                               Yes

Transfer Penalty               No                                                               No

HEMS Standard               Yes                                                              No

SNT Standard                   No                                                               Yes

(1) 42 U.S.C. §1396p(c )(2)( B).

Problems with the Proposed Regulations

The proposed regulations were meant to curb the heavily scrutinized practice of funding assets into an entity and claiming a valuation discount for the interest held in that entity by members of the same family. Allowing aggressive discounting of passive entities creates an opportunity for wealthy individuals to pass on relatively liquid assets (e.g. stock portfolios) at steeply discounted values to avoid estate and gift tax. Obviously, such treatment should be limited to prevent loss of tax revenue where the structure of the entity has no legitimate purpose other than tax avoidance. This goal is accomplished but not reasonably tailored to prevent harsh treatment against legitimate businesses. Treasury drafted the proposed regulations extremely broadly covering both operating and passive businesses. Furthermore, the proposed 2704 Regulations cover more diverse ownership groups than what most would consider a “family business”. However, the current proposed regulations do not except legitimate businesses that have true economic purpose other than tax avoidance. Additionally, the proposed regulations redefine the concept of “Fair Market Value” that has been a fundamental concept of tax law for decades. Because of the broad nature of the regulations, they are akin to amputating a foot because of a wart on a toe. These issues caused significant pushback from commentators and will warrant revision, or wholesale abandonment, of the proposed regulations.

The current transition of presidential administrations places this battle in an interesting political context. Like all other departments, the Treasury will cede control to a new administration next year.  Let’s explore the possible fate of the proposed regulations.

The treasury can move forward and implement a final rule with little or no modification. At that point, the rule can be challenged by litigation, overturned by Congress, or revised by later action of the treasury department. Actions against the rule can be pursued pre-emptively in Congress, and there are currently efforts underway to “vote down” the regulations legislatively. If the regulation is passed, both houses of Congress can pass a resolution of disapproval which, upon signature by the president, voids the rule. This congressional process is rarely used and would be unnecessary if a pre-emptive measure were successful. The new president would have the final say on a congressional vote to void the regulations due to the timeframe given for congressional review. A litigation challenge would be undertaken after the rule, which would subject the rule to judicial scrutiny, but could only be brought after the rule becomes final. Finally, the Treasury (under the new administration) has the ability to implement regulations of its own, which would likely walk back any rule that is implemented.

Impact on Family Businesses

Given the above opportunities for challenge, the proposed rule is likely short-lived in its current form. At a minimum, the drafting concerns voiced at the hearing need to be addressed. This presents a planning opportunity. In the near term, the hearing gave some clarification on the currently proposed regulations. In the long term, it looks like there may be a more favorable environment for transitioning ownership in family businesses. Discussing how the proposed rules and the potential changes of the next administration are critical to determining intermediate and long-range succession plans for family businesses. Contact our office to make an appointment with one of our estate planning attorneys to discuss how the current environment impacts your business.

Ask Kit Kat – Pet Sitters

Hook Law Center:  Kit Kat, what can you tell us about dogs and how they respond to speech and tone of voice?

Kit Kat:  Well, it looks like dogs are amazingly perceptive when it comes to interpreting speech and tone of voice. Researchers at Eotvos Lorand University in Budapest, Hungary have done some pioneering work on this subject. Like people, dogs use the left hemisphere of their brain to interpret meaning, They use the right hemisphere to interpret sound and its emotional content. The study was led by Dr. Attila Andics, and the techniques used were by themselves quite pioneering. The dogs in the study had to be trained to lie perfectly still while a picture of their brain was taken by a MRI machine. This is very remarkable, because other primates like apes cannot be similarly trained. The MRI requires complete stillness, and they cannot manage that.

This is what the researchers discovered. Dogs reacted most strongly when words of praise like ‘good boy’ or ‘well done’ were used. These positive words elicited a lot of activity in their brain’s reward center. When the researchers used less defined language like conjunctions and some adverbs (‘however’ or ‘nevertheless,’ for example), the dogs’ reward center in their brains registered much less brain activity. With the words of praise, it was almost like they were given a delicious treat to eat; it was that reinforcing. So what does this mean? It means humans are not the only creatures who have the ability to understand and react to language. What’s more, other scientists like Dr. Brian Hare of Duke University believe the canine’s ability to do this developed long before humans started to use language. Did this ability aide dogs in the domestication process, as dogs moved from the wild to living with humans? More research will be needed to answer that question.

I suspect many dog owners intuitively have known how smart their dogs are. Now we have confirmation. They really are man’s best friend. (James Gorman, “With Dogs, It’s what You Say—and How You Say It,” The New York Times, Science section, August 29, 2016) (http://nyti.ms/2c40znU)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Problematic Proposed Regulations May Harm Family Businesses If Left Unaddressed first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2016/12/michael-gilfix-national-experts-form-trump-policy-analysis-group/ Mon, 05 Dec 2016 23:50:38 +0000 http://www.seonewswire.net/2016/12/michael-gilfix-national-experts-form-trump-policy-analysis-group/ THE TRUMP POLICY ANALYSIS GROUP (TPAG) – FOCUSING ON OLDER AMERICANS AND THOSE WITH SPECIAL NEEDS The Trump Policy Analysis Group (TPAG)1 has convened to consider probable changes in law that will affect older Americans and those with special needs.…

THE TRUMP POLICY ANALYSIS GROUP (TPAG) – FOCUSING ON OLDER AMERICANS AND THOSE WITH SPECIAL NEEDS

The Trump Policy Analysis Group (TPAG)1 has convened to consider probable changes in law that will affect older Americans and those with special needs. Initial TPAG focus is on entitlements, public benefits, tax, special needs planning, and veterans’ benefits.

We used a three-fold analysis:

• Stated policy (declared Trump policies and those of the Republican Congressional Leadership);
• “Realpolitik” (circumstances and factors rather than explicit ideology, often considered “pragmatism”); and
• Educated speculation (based largely on experience and knowledge of TPAG members who have been leaders in these fields for decades).

STATEMENT OF PURPOSE

On January 20, 2017 both the White House and both houses of Congress will be in Republican hands, not seen since 2006. As president Obama said shortly after being elected in 2008, elections have consequences. We acknowledge this reality.

During the long and divisive campaign, differences in priorities and agendas between the major parties, particularly in social and health policy, were greater than in any recent election. In our opinion, the uncertainty and challenges now facing seniors, disabled, and medically needy Americans are unequaled and unsettling.

Our goals are twofold. First, to objectively analyze real and probable changes in government policies that directly impact older Americans and Americans with disabilities. Second, to identify planning and other steps these populations should take to preserve or, ideally, to increase quality of health care and quality of life.

SOCIAL SECURITY AND MEDICARE

President-elect Trump has consistently stated that the Social Security and Medicare programs are to remain intact and (presumably) solvent. How solvency would be achieved in light of impending bankruptcy of both programs (Medicare long before Social Security) remains to be seen.  Government and non-government economists only disagree about when insolvency will occur, not if it will occur. As one of their proposals to counter insolvency, Trump and Congressman Ryan (Speaker of the House) are promoting Social Security and Medicare privatization.

The Affordable Care Act took some steps designed to extend the solvency of Medicare. Trump, as President-elect, announced that he would keep parts of the Affordable Care Act but did not explain how he would pay for it. With so many members of younger generations convinced that Social Security will not be there for them, preservation of the fiscal health of both Social Security and Medicare is one of the main challenges facing this Administration.

MEDICAID

1. Rising Fears of Significant Restrictions

A significant majority of Americans are seriously worried about the cost of health care and long term care, in particular. Restrictions on benefits and legislative changes that restrict or limit access to government programs such as Medicaid can only heighten such fears.

2. The Trump and Ryan Block Grant Proposal

Currently, Medicaid is administered at the federal level by the Center for Medicare and Medicaid Services (CMS). While each state has its own state Medicaid Plan, there are mandates and there are constraints.

Block grants, which were first proposed by then Speaker of the House Newt Gingrich in 1995, presumably mean that each state would receive a certain number of Medicaid dollars. Each state would then decide how to utilize and spend those dollars.  In some states, little would change. In other states, changes could be profound. For individuals who may rely on Medicaid, this is a time of uncertainty and concern.  This means, in turn, that planning needs will vary from state to state.

TPAG is aware of some details and elements of proposed plans. Some are designed to restrict protective planning – to make it much more difficult for older Americans to protect their homes and other assets while qualifying for Medicaid, particularly in a long-term care setting. Planning challenges could therefore become dramatically more difficult. Increasingly, older Americans and their families will need up-to-date information and advice to understand and qualify for needed services. This will be particularly true for the majority of older Americans who will need home care services and who need to reside in skilled nursing facilities.

Americans with special needs and their families face as many worries, including concerns about possible reductions in protections and services.

TPAG believes that planning will increasingly involve multiple generations to enhance quality of life, quality of care, and asset protection.

3. Protection of Family Assets: Focus on Protecting the Family Residence

The vast majority of older homeowners will view protection of the residence as a core value, a legacy for future generations. Appropriate legislation must be preserved. Appropriate planning steps must be taken, particularly in light of possible changes in Medicaid, the only federal program that can subsidize or pay for the cost of skilled nursing care. No specific proposals to threaten existing tax and Medicaid protections for the residents have yet emerged.

TAX PROPOSALS – GIFT, ESTATE, INCOME, AND CAPITAL GAINS

1. Gift and Estate Tax

President-elect Trump calls for the elimination of gift and estate tax, perhaps replaced by a “mark to market” tax of capital gains at death. Perhaps a compromise package will not eliminate the tax but will significantly increase the level of estate and gift tax protection. Note that the current level of federal protection is historically high at $5,450,000 per person. If any estate tax remains, it would likely be reduced from the current 40% tax rate.

2. Capital Gains Tax

Different proposals have been proffered by President-Elect Trump, Speaker Ryan and others regarding limitations on “stepped up basis” upon an individual’s passing. For some families, this could result in net tax increases.

For high-end practitioners, those who focus on avoiding estate tax, the challenges are obvious. The number of individuals requiring such sophisticated planning will, at best, dramatically diminish. For most older Americans, the avoidance of estate taxes will have little or no impact from a tax planning perspective and the focus will shift to income taxation. Further, the impacts on entitlements and family financial security could be profound.

3. Corporate and Individual Income Tax

Corporate and individual tax rates for higher earners, in particular, would be substantially reduced. The long-term impact – beyond the obvious increase in after tax income, is impossible to predict. As with most modeling and forecasting, projected outcomes depend on presumptions.

AMERICANS WITH SPECIAL NEEDS

No proposals have yet been made that would directly affect services for special needs children and adults.  Medicaid block grants could adversely affect special needs residents of states that decide – at the state level – to reallocate or otherwise restrict funding for both governmental and non-governmental providers. The reach of Medicaid block grants could significantly reduce or even eliminate the benefit of special needs trusts which maximize assets for the person with a disability.

Additionally, it is possible that support for expanded charter schools and school choice could expand options. This has become more probable than just possible what with Trump’s appointment of Betsy DeVos, as Secretary of Education, an outspoken advocate for charter schools and the dismantling of publicly funded schools. Many special education advocates fear these expanded options could come at a price of diminishing procedural and substantive protections of the Individual with Disabilities Education Act (IDEA), and even reduce or remove the funding formula that follows eligible individual students with special needs under IDEA).

VETERANS’ BENEFITS

President-elect Trump is presumably supportive of maintaining and perhaps expanding services for veterans. At the same time, proposals that predate the election have been introduced that could restrict access to needed programs, such as Aid and Attendance, which provides financial assistance for veterans and spouses of veterans who need higher levels of home care assistance. While new legislative and perhaps regulatory restrictions could make it more difficult for veterans and their spouses to obtain benefits, proactive planning will be an inevitable need across the nation.

LGBTQ PROTECTIONS

President-elect Trump has said that he accepts the United States Supreme Court decision effectively legalizing gay marriage. (His Vice President, Mike Pence, may have a different viewpoint.) The Supreme Court ruled that the U.S. Constitution guarantees the right for same-sex couples to marry in all 50 states creating uniformity across the nation in recognition of the rights of same-sex couples.

IN TIMES OF UNCERTAINTY, FAMILIES WILL PROTECT THEMSELVES

A core conclusion of TPAG is that families will become more insular, more protective of themselves, their assets, and future generations. They will be more focused on what they can control and truly value – their families – and less on public policies that are difficult to influence. This has myriad implications for attorneys, financial planners, and other professionals who work directly with America’s elders, those with special needs and their families. A premium will be placed on advance planning. Inevitably, this will increase involvement of younger generations.  The demand for multi-generational planning – planning that involves and relies on involvement of children and grandchildren – will expand dramatically.

WHAT SHOULD YOU DO?

TPAG thoroughly understands that most Americans, and older Americans in particular, are fearful at this point in time. Above all, do not panic. The stock market panicked at the end of Election Day but soon resolved and moved higher than ever. TPAG believes that the stock market’s response to the election is a lesson for everyone: Learn, watch, be advised, and protect yourself and your family. The changes in store will take time.

TPAG’s goal and its purpose is to turn fear into hope. This is what good planning does.

TPAG will continue to be a source of balanced, objective information about developments at the national level. TPAG is working hard to track initiatives by President-elect Trump, Republicans and responsive proposals of Democrats.

TPAG will work hard to be “one step ahead.”

**Members of the TPAG group include Michael Gilfix of Palo Alto, California, Vincent J. Russo of Garden City, New York, Harry S. Margolis of Boston, Massachusetts, Frank Johns of Greensboro, North Carolina, and Tim Nay of Portland, Oregon.

The post Michael Gilfix, National Experts Form Trump Policy Analysis Group first appeared on SEONewsWire.net.]]>

Consider this example. Your mother created a Revocable Living Trust which divides one share of the trust among her then-living grandchildren, to be held in further trust for their benefit until they reach age 30, when they are entitled to an outright distribution of the remaining assets of their separate trust, and distributions are purely discretionary until age 30. When this trust was created, your daughter, who has Down Syndrome, was not yet born and like most people, your mother didn’t think to update her trust as a result of your daughter’s disability. When your mother dies, your daughter is 28 years old, is receiving SSI, lives in her own apartment that is subsidized by Section 8, and receives in-home support which is provided by a Medicaid waiver – she is happy and you know that your daughter’s current benefits and living arrangements provide a plan for her continued independence upon your death, and the loss of those benefits would jeopardize that plan. Your gut tells you that your daughter’s inheritance could be detrimental so you call Hook Law Center, and we inform you that a distribution of the assets at age 30 would cause your daughter to go over the $2,000 asset limit which would result in your daughter’s ineligibility for public benefits. We also explain that since your daughter is not yet 30, that pursuant to Virginia law, the trustee of the trust may exercise a decanting power by assigning trust principal or income to the trustee of a second trust (without the approval of the court of the beneficiaries) and that this second trust may be a special needs trust to protect your daughter’s public benefit eligibility.

While we have had to decant an old irrevocable trust into a special needs trust on a number of occasions, the question has often been whether this new second trust would be considered by the Social Security Administration and Medicaid offices to be a first-party special needs trust subject to a Medicaid payback, or whether this new trust would be considered a third-party supplemental needs trust. The first notable case pertaining to this issue was In the Matter of the Application of Alan D. Kross (N.Y.Surr.Ct. (Nassau Cty.), No. 2012-369907, Sept. 30, 2013). In that case, Daniel Schreiber was the beneficiary of his grandfather’s trust. Pursuant to the terms of the trust, Daniel was entitled to discretionary distributions of income and principal until age 21. Upon the age of 21, Daniel was entitled to mandatory income distributions paid at least quarterly, half of the principal at age 25, half of the remaining principal at age 30, and the balance of the trust assets at age 35. These mandatory distributions would have disrupted Daniel’s eligibility for SSI and Medicaid, so the trustees filed a petition requesting the court to approve the decanting of trust assets into a new third party supplemental needs trust prior to Daniel’s 21^st birthday. The court determined, in addition to other things, that because the old trust was a third party trust, the decanting of the trust assets occurred prior to Daniel’s right to receive the mandatory distributions. Therefore, decanting into the third-party supplemental needs trust was proper, and that no Medicaid payback would be required for the new trust. The New York State Department of Heath appealed the decision, which was upheld by Supreme Court of New York, in Matter of Kroll v. New York State Department of Heath.

The breadth of this case’s impact is not yet known. It may be that this case, only sets a precedent in New York when a beneficiary has not yet obtained the age to receive the outright distribution, or it may extend to all states and in cases where the distribution standards of the trust cause the trust to be an available resource. Regardless of the impact, those of us that focus on helping persons with special needs now have something we can turn to in considering how the decanting of a trust into a special needs trust may be treated in the future.

Ask Kit Kat – Pet Sitters

Hook Law Center:  Kit Kat, what should someone look for in the ideal pet sitter?

Kit Kat:  Well, there are several things you can consider when deciding to hire a pet sitter. Some need a sitter while they are away at work, and others only require them while they are away on vacation. My parents use a local pet sitting service called Critter Care. They’ve used it for many years going back to the early 1990s. Over the years, we’ve had several caregivers, but all have been excellent. Critter Care screens its employees; they are bonded, so the hard work is done for you. During each caretaking session, the caregiver keeps a daily log of when they arrive and leave your house. They also write observations about how your pet(s) behaved while they were tending to them. As a bonus, they will take in the mail and trash and even water plants that might be in flower pots. Fees are based on the number of pets and number of visits needed. Since we are an all-cat family, once a day is sufficient, but they will come as often as you like. We really like this, because we get to stay in our own house, and do not have to go to the vet and hear dogs barking at all hours of the day and night. We cats find that very off-putting!

Other possible sources for finding pet sitters are through national associations such as the National Association of Pet Sitters (NAPPS) and Pet Sitters International. Or your vet may have some recommendations. Sitters through associations usually have the advantage of being able to read reviews of the possible candidates. Make sure before hiring someone, you actually interview them and see how they interact with your pet. Sometimes your instincts are the best guide. Wendy Pridgen of Boyds, Maryland says, ‘Sometimes you just have to trust your gut and go with what feels right to you.’ And if Ms. Pridgen’s experience is any guide, there will be ups and downs in the process. At first, she hired a college student, and things worked out for a year. Then, the college student became erratic. She used her to take care of her 2 large dogs who needed to be walked during Ms. Pridgen’s long work days. There were signs the student wasn’t coming, so Ms. Pridgen left a broom by the door the student would enter. Ms. Pridgen exited by another door. When she found the broom hadn’t been disturbed, she knew the student wasn’t taking care of her dogs. The student was fired, and she eventually found a new one through a listing on a bulletin board of a local convenience store.

So, be aware that when you hire a pet sitter, it’s like anything else. Sometimes your first efforts will not be successful, but you keep on trying until you find a good fit for both you and your pet. (Ruthanne Johnson, “Someone to watch over them,” All Animals, November/December 2016, p.34-37)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Decanting an Irrevocable Trust to Protect Public Benefit Eligibility first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2016/11/three-mistakes-parents-of-special-needs-children-should-avoid/ Wed, 30 Nov 2016 18:20:29 +0000 http://www.seonewswire.net/2016/11/three-mistakes-parents-of-special-needs-children-should-avoid/ Parents of special needs children hope to provide their offspring with financial security and the care they need. However, even with the best of intentions they risk making mistakes that could have costly, long-term consequences for their child. One such…

To a young couple starting a family, marriage may seem like an obvious step. For those in their golden years, however, remarrying can involve some potential complications that they should be aware of.

Marriage later in life can complicate the estate plans of each spouse, especially if either or both of them have children from a previous marriage. Even if everything is left to the children, in the…

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Co-Author: Letha Sgritta-McDowell

During the holidays, it is not uncommon for emergency rooms to see an increase in visits by the elderly population. As we know, the elderly are more susceptible to catching pneumonia due to their waning immune systems, falling due to lower body weakness and poor balance, combined with vision problems or home hazards like throw rugs and/or clutter that can be tripped over, and even medication mismanagement caused by having too many prescriptions to take or being prescribed a combination of medications by several different doctors that do not work together but against each other.  With the rise of hospital admissions this time of year, come families who are thrust into a situation they have never experienced before; they are often worried, scared, and confused.

We often receive calls from family members trying to understand the processes for hospital admissions, rehabilitation services, and long-term care for their loved one. There are several points at which families can become easily confused.  The first is upon discharge from the hospital.  Hospitals are acute care facilities; meaning that a person’s stay is only temporary.  For longer term rehabilitation and care while a person is recovering from an acute illness, this type of care is provided either at home or in an outside facility.  Any number of terms are used at this juncture.  Families may hear “rehab,” “skilled nursing,” “nursing home,” or simply “therapy.”  The discharge planner at the hospital will offer you and your loved one options for this continuing care.  For individuals who are recovering from an acute illness, this possible discharge to a nursing home is not permanent.  This is merely a suggestion that the elderly person move to a facility where he or she can receive nursing services as well as all available therapy with the goal that they can recover enough to safely return home.  For many seniors who live alone, a short rehabilitation stay is the safest way to receive the care they need.  Understandably, many people would prefer to go home.  The same therapy may be offered on an outpatient basis.

When evaluating outpatient rehabilitation instead of going to a nursing home, the individual and their family need to consider who will be able to take their loved one to any and all doctor’s appointments and therapy sessions as well as who will cook, clean, do laundry and assist the loved one with bathing, dressing and other essential daily activities. It requires a strong support system and/or the ability to hire private duty care providers to ensure a successful rehabilitation in the home.  Therefore, when faced with this decision, it is important that the family consider all options.  If a discharge to a facility is chosen but rehabilitation in the home later becomes feasible, that certainly can happen.

If an individual is discharged to a nursing facility but does not fully recover or if they have needs which will continue long after rehabilitation is finished, then they often face another stressful and confusing crossroads. If the individual was admitted to the hospital for three nights or more prior to their discharge to the nursing facility, then Medicare can pay for up to 100 days, so long as the patient responds to the therapy being prescribed by his or her doctor, or if the stay in the facility is necessary to maintain the individual’s current level of health and functionality.  However, once the patient stops responding to therapy, refuses to participate, or if the care is not necessary to maintain his or her current level of health, representatives from the facility will discuss “discharge.”  Unfortunately, the context of discharge at this stage is often not explained fully, and many family members assume that this discussion means their loved one is being sent home.  As discussed earlier, for many the transition home is complicated and can be potentially dangerous for the senior.  Understandably, the sense that an elderly person is being sent home when provisions are not available to assist them can cause family members to panic.

However, the discussion of discharge at this juncture simply means that the patient is no longer eligible for Medicare-covered rehabilitation services. If, after rehabilitation, the individual still needs assistance with bathing, dressing, walking, eating and other activities of daily living, then the family can (and should) request that their loved one transition to long-term care within the facility.

Many times we hear that family members were not provided options and were simply told that their loved one was being discharged. This often leads to family members scrambling to find care for their loved one. In other situations, when the family asks about staying longer, a facility representative may explain to the family that no beds are available or they cannot accommodate the care needs of the patient.  There are laws in place which require the nursing facility to assist with a safe and appropriate discharge plan for the patient.  If no beds are available at that facility and services and supports are not sufficient in the community, then the facility representative must find another facility which has an available bed and which can accommodate the person’s care needs.  While looking for a suitable bed, the patient is allowed to stay at the same facility in their current bed.

The rules and regulations surrounding hospital discharge planning and discharge from Medicaid covered rehabilitation can be mysterious and, without proper understanding, can cause additional stress in an already emotional and stressful time. If you or your loved one find yourself in this position, you should immediately seek someone experienced with resident rights who can help navigate this process and develop a long-term care plan focused on developing a solution to the problem.  The attorneys and staff of Hook Law Center are experienced and prepared to assist you or your loved one through this process.  Please call us today to schedule an appointment to discuss your rights and options.

Ask Kit Kat – Mickey, Our Own Star

Hook Law Center:  Kit Kat, I hear that Hook Law Center has many employees who love pets. One in particular—Mickey—the beloved cat of Cynthia is making medical history. What can you tell us about her cat?

Kit Kat:  Mickey is an 18-pound male cat who has just been diagnosed with gigantism or its scientific name of acromegaly. His length from head to tail is more than 3 feet! He is a beautiful brown tabby with white feet who is 10 years old. On January 11, 2017, he will turn 11. Anyway, he was gaining weight, and at one point he weighed in at 21 pounds, even though he was  on a diet. Such a large figure caused him difficulty in jumping onto chairs, etc. When Cynthia took him to the vet, they treated him for arthritis and an underactive thyroid. Still the vet thought there might be something else affecting his condition. It was suggested that Cynthia collect a blood sample, and send it to a lab at Michigan State University in East Lansing, Michigan. Cynthia recently got the results. The suspected condition of gigantism was confirmed. This is an extremely rare condition in cats, caused by over production of the growth hormone (GH). It usually affects males around the median age of 11, so it looks unfortunately like Mickey falls into a classic case. He also displays some other common signs of the disease with his enlarged lower jaw and head.

Treatment can include radiation therapy. However, at this stage in his life and because of the severity of his case, the vet has not recommended anything other than to continue to address his arthritis and thyroid. Mickey is lucky he is in the home he is in. Cynthia and husband, Carl, have even built him a stand to hold his food and water bowls, so he doesn’t have to bend over so far. Eventually, he will undoubtedly succumb to heart disease or renal failure, though the latter is very common in cats as a whole, even those without gigantism. Cynthia and Carl will do their best to keep him comfortable and extend his life as long as possible. (http://www.cat-world.com/au/acromegaly-in-cats)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post ‘Tis the Season…for hospital admissions and long-term are planning! first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2016/11/tis-the-seasonfor-hospital-admissions-and-long-term-care-planning/ Mon, 28 Nov 2016 21:57:42 +0000 http://www.seonewswire.net/2016/11/tis-the-seasonfor-hospital-admissions-and-long-term-care-planning/ Author: Stephanie Washington Co-Author: Letha Sgritta-McDowell During the holidays, it is not uncommon for emergency rooms to see an increase in visits by the elderly population. As we know, the elderly are more susceptible to catching pneumonia due to their…

Finding affordable housing can be difficult for people with disabilities, who may have special housing needs or limited funds. However, there are a number of resources available to help: Center for Independence of the Disabled, New York The Center for Independence of the Disabled (CID-NY) is a primary resource. In addition to providing individuals with referrals and resources related to…

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Finding affordable housing can be difficult for people with disabilities, who may have special housing needs or limited funds. However, there are a number of resources available to help:

Center for Independence of the Disabled, New York

The Center for Independence of the Disabled (CID-NY) is a primary resource. In addition to providing individuals with referrals and resources related to affordable and accessible housing, CID-NY  can provide assistance with applying for disability related programs. The phone number for the main intake line is 646-442-4186.

Medicaid Waiver Program

The Medicaid Waiver Program provides help for individuals who need managed long-term care to find housing in the community and the home services they need. In addition to housing, the program provides services such as meals and home care. For more information, contact the Regional Resource Development Center at 718-816-3555.

Home of Your Own Program

The Home of Your Own Program is a project of the New York Office of People with Developmental Disabilities (OPWDD) to help individuals with developmental disabilities, their families who are income-eligible, and direct support professionals to find a home of their choice. The program and its network of partners provide counseling and resources for home ownership and other independent residential opportunities. Contact OPWDD at 518-473-1973.

Rent Freeze Program

New York City tenants with disabilities may qualify for the Disability Rent Increase Exemption (DRIE) program. Eligible people with disabilities living in rent-stabilized, rent-controlled, Mitchell-Lama and other eligible apartments can have their rent frozen and receive an exemption from future rent increases. Their landlords are provided with tax credits to make up the difference.

Affordable Housing Lotteries

In New York City, affordable housing lotteries are held for renovated or newly constructed buildings with subsidized apartments. Usually, 2 percent of the units in a development are set aside for people with visual and hearing disabilities, and 5 percent are set aside for people with mobility impairments. Call NYC Housing Preservation and Development (HPD) at 212-863-7990.

Learn more about our services in special needs planning, special education advocacy, estate planning and elder law.

A rule change by a federal agency will provide nursing home residents with major new legal protections by preventing facilities from forcing disputes into arbitration.

The Centers for Medicare and Medicaid Services (CMS), part of the Health and Human Services Department, issued a rule preventing nursing homes from requiring that residents resolve disputes in arbitration rather than through a…

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To set up your Medical ID, locate and open the “Health” app that is installed by default onto your iPhone, then press “Create Medical ID.” Enter the information that you would like displayed in the event of an emergency, and be sure to turn on “Show When Locked,” then click “Done.”

For other types of cell phones, a similar feature may be available either as a phone setting or in the form of an “ICE: In Case of Emergency” app. Check for an emergency contact feature in your phone’s settings or consider editing your lock screen or wallpaper to include important information.

In addition to including personal information, you may want to use these cell phone features to indicate that your advance medical directive is a part of the U.S. Living Will Registry, so that medical professionals can access that document if needed.

Don’t have an advance medical directive, or want to participate in the U.S. Living Will Registry? Give the Hook Law Center a call today.

Ask Kit Kat – Falling Cats

Hook Law Center:  Kit Kat, what can you tell us about the phenomenon of cats always landing on their feet?

Kit Kat:  Well, the answer is not as simple as it may appear, but it is extremely interesting. Actually, it’s not a definitive answer, because scientists are not really sure how it occurs or if it occurs in only one way. They do agree, however, that cats will right themselves after falling from most distances, even from as little as a height of 2 feet. The only exception is a height of less than 2 feet. From distances less than 2 feet, there is not enough room or time to perform their acrobatics.

Here’s what we know now. Falling cats have been a fascination of the scientific community since the 19^th century. George Gabriel Stokes and James Clerk Maxwell were 19^th century scientists who were intrigued by the falling cat phenomenon. They experimented and dropped many cats; in all cases, they righted themselves. Yet, later scientists were not satisfied. How could cats accomplish this feat which defied the law of conservation of angular momentum? That law involves the person or object to push off from something, but cats were not pushing off from anything, and they were still able to right themselves. Now enters Etienne Jules Marey, a French scientist and engineer, who used high-speed photography in 1894 to capture 32 shots of cats in midair. His photos revealed what was happening – “…the cat first tucked in its forelegs while stretching out its back legs, then switched them, which allow it to use the inertia of its own mass to flip.” Marey called this ‘the tuck and turn’ method. It is what modern gymnasts do when they accomplish their amazing flips and turns.

20^th century scientists have since quantified the process. In 1935, Dutch physiologists GGJ Rademaker and JWG Ter Braak created a mathematical drawing of a falling feline which further refined the theory. By bending at the waist, their drawing showed the cat’s body as 2 can-like cylinders rotating on 2 axes in different directions. The net energy expended created an equilibrium of 0. A 21^st century scientist, Greg Gbur of UNC-Charlotte calls this the ‘bend and twist’ method. The research continues. Scientists would like to find one definitive answer, but the crafty feline is not bound to comply. Gbur laments, ‘Probably the cat uses multiple different strategies to turn over. Physics prefers and tends to look for the simplest explanation for a phenomenon, whereas evolution—if I anthropomorphize it—is always looking for the most efficient. Living creatures are doing whatever works best, which may not be the simplest option.’

(Karen Bruillard, “Scientists just can’t stop studying falling cats,” The Washington Post, Animalia section, November 4, 2016)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Life-Saving Tech Tip for Cell Phone Users first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2016/11/what-president-elect-trump-and-the-republican-party-have-in-store-for-you-estate-gift-and-generation-skipping-transfer-taxes/ Mon, 14 Nov 2016 22:50:36 +0000 http://www.seonewswire.net/2016/11/what-president-elect-trump-and-the-republican-party-have-in-store-for-you-estate-gift-and-generation-skipping-transfer-taxes/ Well, one of the more painful election cycles I have ever experienced is, thankfully, over. Now that the American people have finally cast their votes and elected Donald Trump to the White House and a Republican-controlled Congress, it is natural…

WHAT HOMES ARE ELIGIBLE?

Fortunately, the LHTC can be used on new purchases as well as existing homes. New construction must meet Universal Visitability guidelines, but renovations need only to increase accessibility using certain eligible means.

WHAT TYPE OF IMPROVEMENTS ARE NEEDED?

The renovation must include several “Universal Visitability” features, such as: zero-step entrances, doors with a width of at least 32 inches, accessible switches, accessible bathrooms, accessible kitchens, among others. These requirements work nicely with the Universal Design concepts discussed in the previous article.

HOW DOES THE CREDIT WORK?

The credit is available for 50% of the cost of applicable features, up to $5,000, which means that $10,000 in costs for applicable renovations can yield a full credit. The simplicity of the design elements required to qualify for the credit (built-in appliances, width of halls and doorways, etc.) means that a little forethought in design may go a long way in saving funds.

After the work is completed, the credit is applied for using a simple form and submitted to the Virginia Department of Housing and Community Development in Richmond. They even allow for electronic submissions! A certificate of approval is provided with the amount of your credit by April 1, and can be relied upon for your tax return. If you do not have enough tax liability to fully use your credit, the balance can be carried forward for seven years.

CONCLUSION

If you are considering updating your home or specifically need to retrofit your home for accessibility, using the LHTC can be an excellent way to defray some of those costs.  If you need help planning for disability, healthcare costs, or retirement generally, please contact our office to arrange a meeting with one of our Elder Law attorneys to review your needs and implement a plan. The author thanks Richard Harrison, Jr., CPA of Richard J. Harrison, Jr., P.C. for providing information related to the Virginia Livable Homes Tax Credit used in this article.

Ask Kit Kat – At Rest with Pets

Hook Law Center:  Kit Kat, what can you tell us about the new New York State law which allows pets to be buried alongside their owner(s)?

Kit Kat:  Yes, this is a wonderful option which was recently enacted for the state of New York. There are some stipulations—the pet must be cremated; religious cemeteries are exempt, and all cemeteries are not required to accept pet cremains. It is, however, a step in the right direction. The change has been in the works for about five years says David Fleming, director of government affairs for the New York State Association of Cemeteries. ‘Times have changed; people have a much different view of their pets in the family,’ he said. Currently, the law limits the option to domestic animals, but authorities have been quite flexible and have allowed reptiles and invertebrates. Mr. Fleming further comments, ‘I don’t think the average person is paying to have their tarantula cremated, but maybe they are.’

Heretofore, people who wanted to be buried with their pets had to do so in a pet cemetery. Some actually have chosen this option. At Hartsdale Pet Cemetery in Westchester County, a pet cemetery which originated in the 19^th century, 5-7 people are buried each year, says Edward C. Martin, Jr., the cemetery’s director, along with their beloved pets. Mr. Martin is not worried about the impact of the new law. Hartsdale Pet Cemetery has a tranquil and lovely location which is attractive to many, whether human or animal.

The new law will be helpful to those whose preferred companion is a turtle. Turtles live for decades says Barbara Daddario, education director of the New York Turtle and Tortoise Society. It is not unusual for a turtle or a tortoise to outlive its original owner and be passed to a younger family member. With the new law, ‘…it may be a while before the turtle goes in there,’ she said.

This is a terrific plan. You may want to check with your state and determine whether such an option is permitted in the state in which you reside. According to Mr. Fleming of the NY Association of Cemeteries, few others allow it, but he is uncertain as to which other states do/do not permit the practice. (Sarah Maslin Nir, “New York Burial Plots Will Now Allow Four-Legged Companions,” The New York Times (New York Region section), October 6, 2016)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post State Tax Credit Can Help With Home Improvement Costs first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2016/11/2016-walk-to-end-alzheimers/ Tue, 01 Nov 2016 14:39:35 +0000 http://www.seonewswire.net/2016/11/2016-walk-to-end-alzheimers/ Littman Krooks was a sponsor of the Alzheimer’s Association’s Walk to End Alzheimer’s at White Plains High School held this past September 2016. The walk, organized by the Alzheimer’s Association, the largest non-profit funder of Alzheimer’s disease research. The organization…

Absent another valid election, a retiree of the United States Armed Forces begins to receive retirement income and, is enrolled in the Survivor’s Benefit Plan (SBP). With a full election of the SBP, upon the death of the retiree, up to 55% of the retiree’s retirement pay will be paid to a spouse or dependent child. Under the SBP, a “dependent child” includes an adult child that is incapable of self-support as a result of a physical or mental disability, provided such disability occurred prior to the age of 22. By making an election to provide the SBP to a dependent child, the retiree ensures a continuation of income to support the dependent child when the retiree and any surviving spouse have passed. Absent such an election, upon the death of the retiree, military retirement pay will cease.

You can revoke an election at any time; however, there are very few scenarios for which you can retroactively establish benefits. After receiving my first approval of retroactive establishment of SBP coverage for a dependent child, I now know that under certain circumstances, establishment of retroactive coverage of the SBP is possible in light of the new change in legislation. While Hook Law Center has been successful on this one occasion, we cannot guarantee approval and I anticipate approval of retroactive coverage will be limited in duration. As a result, if you are interested in making changes to your election, you should act sooner, rather than later. Furthermore, you should be prepared to pay the government a rather  check to cover the monthly payment for the benefit since date of retirement.

Ask Kit Kat – Faithful Friend

Hook Law Center:  Kit Kat, what can you tell us about the faithful dog in Spokane, Washington who stayed with a toddler in a house fire?

Kit Kat:  Well, this is one story that doesn’t have a happy ending. However, it does reveal the faithfulness of a wonderful canine, a terrier mix, who stayed with the toddler during the fire. Unfortunately, both perished. It happened like this—a fire broke out around 11:30 PM in the Hillyard neighborhood of Spokane on Friday, October 21, 2016. A neighbor noticed the fire and heard screaming. He called 911, and immediately ran outside to fight the fire with his garden hose. Three other children and two adults escaped, but one child, a young toddler, did not make it out. His dog and a teddy bear were found with him in a 2^nd story bedroom. Firefighters believe the dog stayed behind to protect him. What more can one ask than that? The dog was more than heroic!

The fire is under investigation, as the battery in the house’s smoke detector had been removed. That is all the information that the newspaper article provided. Perhaps, however, we can learn some tips for preventive action—always know where the occupants of one’s house are. If you leave your children with others, make sure they are aware of escape routes and are familiar with the property’s layout. Also, keep all smoke detectors functional. Hopefully, we can learn from this tragedy, so that it never happens again. (Martha Bellisle, “Toddler dies in fire, his dog at his side,” The Virginian-Pilot, October 23, 2016, p. 14)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Establishing Retroactive Survivor Benefit Plan Payments (SBP) for a Dependent Child first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2016/10/16160/ Mon, 31 Oct 2016 15:36:32 +0000 http://www.seonewswire.net/2016/10/16160/ On October 27, 2016, a committed group of parents and educators, on a very stormy evening, attended a workshop on: Development  Mediated by Trauma: How to Recognize and Remediate Adverse Childhood Experiences,  with experts Dr. Boris Gindis, psychologist specializing in…

By Marion M. Walsh, Esq., Littman Krooks LLP

On October 27, 2016, a committed group of parents and educators, on a very stormy evening, attended a workshop on: Development  Mediated by Trauma: How to Recognize and Remediate Adverse Childhood Experiences,  with experts Dr. Boris Gindis, psychologist specializing in trauma and Jennifer Griesbach, a psychotherapist specializing in adoptive children. According to Dr. Gindis, “Trauma is an objectively stressful event that subjectively is experienced by a person as emotional distress, disturbance and suffering.” Traumatic stress, even only unresponsive care, can cause damage to the biochemistry of the brain, he noted. The workshop centered on the understanding of Developmental Trauma Disorder and the need for patience and awareness of the issues.   Ms. Griesbach and Dr. Gindis both recommended therapeutic parenting and specific types of psychotherapy and family counseling to assist children.

Marion Walsh, Esq. from Littman Krooks LLP noted that many schools and parents do not understand the effects of trauma on children and that school districts have an affirmative duty to locate students suspected of having disabilities, including emotional disabilities.  Trauma can lead to emotional and learning disabilities. She spoke about the need for education, training and school services and placements available.

More information will be forthcoming in the future as we learn more about this important topic. Visit our calendar to learn about our upcoming workshops.

Learn about our special needs planning and special education advocacy services at www.specialneedsnewyork.com.

The premiums, which represent the amount the policyholder pays the insurance company to maintain the effectiveness of the policy, can be deducted by the taxpayer, the taxpayer’s spouse and other dependents. The rules for tax-deductibility are somewhat different for a person who is self-employed. You can deduct the premium, provided you realized a net profit. It is not required that your medical expenses are greater than a specific percentage of your income.

However, there is a maximum premium amount that is deductible. This figure is dependent on the age of the plaintiff at the end of the year. Below are the caps on deductibility for 2016. Any premium amounts that exceed these restrictions are not deemed to be a deductible medical expense.

Age prior to the end of the taxable year / Maximum deduction for the year

• 40 or under / $390
• Over 40 but not over 50 / $730
• Over 50 but not over 60 / $1,460
• Over 60 but not over 70 / $3,900
• Over 70 / $4,870

The elder law attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

Individuals with disabilities have historically been marginalized and treated as if their disabilities defined them. Gone are the days that calling someone an “invalid,” “handicapped,” or “retarded” is acceptable.  In its place, we use person-first language to appropriately and respectfully describe and speak about individuals with disabilities.

Instead of referring to a person with disability, “person-first language” (also called “people-first language”) emphasizes the person first, not the disability.   It describes what a person has, but not who a person is.  When describing someone who has a disability, refer to him as “a person with ________,” or “a person who has __________________.”

For example:

This is not political correctness; it is a demonstration of respect. Why does it matter?  Because the words we use affect how people see themselves and others, contribute to social norms, and ultimately influence changes in the law.  Using antiquated terminology that defines a person in terms of his disability sends the message that you have an underlying prejudice or see them as nothing more than their disability.  It’s demeaning and belittling.  Using person-first language, however, sends the message that the person is of value and worthy of respect, and gives the person an opportunity to define himself using his talents, characteristics, and other abilities.

It has been said that the population with disabilities is the only minority group that anyone can join at any time, whether at birth, as the result of an accident or illness, or simply as a part of growing older. If it were to suddenly happen to you, how would you want to be described?

Ask Kit Kat – Nurse Kitty

Hook Law Center:  Kit Kat, what can you tell us about the cat who saved his owner from death?

Kit Kat:  Well, this is an unusual story. Glen Schallman adopted a cat whom he named Blake. Turned out it was a smart move! Blake has repeatedly saved Glen’s life by biting Glen’s toes or jumping on him when he senses danger. Glen has some rare medical conditions which mostly affect his brain. Two are polymicrogyria and unilateral schizencephaly. In addition, he has a brain tumor known as hypothalamic hamartoma. The latter causes seizures which are very frequent, almost daily. However, thanks to Blake, Glen is known as oldest living person with this combination of conditions. Without any training, Blake seems to sense when a seizure is about to happen, and he bites Glen’s toes or rouses him, so that Glen can move to a safe place before it happens. Once, Glen was having a seizure in the middle of the night. Blake bit his toes and woke him up before the seizure went on too long. In another, when Glen’s hands began to tremor, Blake jumped in Glen’s lap, stroked his arms and purred and purred until the tremors stopped. This helped to calm Glen, and help him recover more quickly than he otherwise might have done.

Usually it is dogs who are used as therapy companions, but in this case, a cat has fulfilled that role extremely capably. It appears that both our canine cousins and we felines have potential in feeling and perceiving that you humans are only beginning to understand. (Sheeka Sanahori, “Nurse Kitty! Cat bites owner’s toes, saves him from deadly seizure,” USA Today, (Humankind section), Oct.6, 2016)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Using Person-First Language to Communicate With and About People with Special Needs first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2016/10/be-aware-of-the-details-on-required-minimum-distributions/ Tue, 18 Oct 2016 17:58:49 +0000 http://www.seonewswire.net/2016/10/be-aware-of-the-details-on-required-minimum-distributions/ It is important for taxpayers to be informed about required minimum distributions (RMDs) from IRAs so that they can plan accordingly for their retirement. In the current year, those persons age 70 ½ or older are required to take a…

However, as we have discovered, filling the forms out can be more difficult than it seemed at first glance. First, we applied in the last week of September for a FSA ID which linked to our account at the IRS to allow us to link the FAFSA form (but not as we were later to discover the CSS PROFILE) to our 2015 income tax date as filed. Second, there was the frantic gathering of current information: bank statements, mortgage and car loan information, retirement account values, investment account values, including the 529 accounts and UGMA accounts set up for both the child applying for college and his/her siblings. Third, we set up the FAFSA form and imported the information from the IRS – so far so good.

The trouble arose when, after reading the instructions for the forms multiple times, we discovered we had “special” circumstances that we needed to address. When my mother passed away, she created a testamentary trust primarily for the benefit of my father. However, my brother and I were included as permissible principal beneficiaries. Knowing my mother, it was meant to be “just in case” of a catastrophic emergency. Nonetheless, because I am a permissible beneficiary currently, we have to report one-third of the value of the trust on these forms even though I have no ability to compel a distribution from the trust. Thankfully, my children only have interests in the trust contingent on my prior death, so the trust is considered my asset and not the asset of my child for financial aid. Interestingly, we do not need to report the trust created by my grandfather because my interests in that trust are contingent upon my surviving various family members.

Discerning exactly what had to be reported on the various forms in connection with trust funds was not easy. Ultimately, I gave up and called a financial aid officer at the University of Virginia, because I am an alumna and because my child intends to apply there. I did get the answer I needed. Finally. However, here are a few pointers in regards to eligibility for financial aid:

1. Keep in mind that parents’ resources are assessed at a much lower level than assets owned by a student when determining how much the family should contribute towards college. 529 accounts owned by a parent are assessed as an asset of the parent, not as an asset of the student, even if the student is the named beneficiary of the account. Account balances of 529 accounts owned by a grandparent do not get reported on the financial aid form; however, distributions from the account used for the grandchild’s educational expenses are counted as the grandchild’s income for the year of distribution.
2. Eligibility for financial aid is heavily based on your income. Although you do get credit for certain obligations, such as a mortgage or a home equity loan secured by your home and on which you are paying, you do not get credit for consumer loans or unsecured debt (such as credit cards). In addition, the contribution that you make towards your retirement account is added back into your adjusted gross income for these purposes.
3. The balance of your retirement account is not assessed for these purposes.
4. Interests held in trust are assessed as an asset of the beneficiary, even if the restrictions on the trust fund are such that the beneficiary cannot access the funds. However, contingent beneficiaries are ignored.

If you are interested in creating a trust that is meant to be used for your children’s or grandchildren’s college education, the nuances of how the trust is worded may be unimportant. After all, if you are providing a fund from which college expenses are to be paid, then the funds should be so used. On the other hand, if you are creating a trust that is not necessarily meant to fund a college education, as in the case of a trust primarily for the benefit of a surviving spouse, it may be important to assess and think through the ramifications of giving the descendants of your primary beneficiary current access to trust assets. Your decision will be influenced by the specifics of your family situation. Please feel free to make an appointment to discuss these important issues with the attorneys at the Hook Law Center so we can help guide your estate planning decisions.

Ask Kit Kat – Fish Smarts

Hook Law Center:  Kit Kat, what can you tell us about how fish think and feel?

Kit Kat:  Well, there is a lot to tell, actually. Even very tiny fish have some amazing capabilities. Jonathan Balcombe, director of animal sentience with the Humane Society Institute for Science and Policy has written a new book, entitled What a Fish Knows: The Inner Lives of our Underwater Cousins. It turns out that fish have many things in common with other animals, including us humans. That is why they are such a fascinating subject for research. For example, let’s examine the frillfin goby, which is a fish that lives in intertidal areas. They have the capability of jumping from one tidal pool to another when they sense danger. How do they do that so successfully without being stranded on rocks or caught up in vegetation? Scientists tell us that they can memorize the geography of a particular tidal pool and remember it 40 days later. That knowledge serves them well when they sense they can no longer stay in a specific location.

Another example is the case of groupers and moray eels. These two look nothing alike, but they use their differing physical attributes to work together to hunt for food. The grouper elicits the attention of the eel through the use of a head shake or body shimmy. Then they work as a team. The eel chases their prey into a nook or crevice of a rock. Sometimes, the eel gets to the prey first, and has a delicious meal. However, if unsuccessful, the prey swims out, and is captured by the large-bodied grouper. Another capability which grouper have is a pointing ability. They can actually point with their body position to the eel that prey is nearby. Thus the hunt starts, and they begin their cooperative arrangement to capture food.

For more examples, you might want to read the book. It really is fascinating. As more and more people become aware that fish can think and feel, they will treat them with more respect. That is not to say we shouldn’t continue to enjoy them as a source of our own nourishment, but perhaps we can become a little more careful about how they are harvested. Commercial fishing tends to use large nets over many miles which scoop up whatever is in a particular area, including dolphins, when what they are really after that day might be tuna. Hopefully, we can develop more strategic ways to fish without the collateral damage to others, which are not the intended objects of the fishing operation. The author says another thing anyone can do is, if you see a stranded fish washed up on a beach, pick it up and get it back into the water. We all need a little help once in a while. (“Kinder School of Thought,” All Animals, September/October 2016, p.34-35)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Musings on Financial Aid first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2016/10/cruising-through-caregiving-book-review/ Tue, 11 Oct 2016 15:05:44 +0000 http://www.seonewswire.net/2016/10/cruising-through-caregiving-book-review/ Cruising through Caregiving is a terrific book helping all those who have cared for or will care for someone in their family through the aging process deal with the stress of serving in such a capacity. The thrust of her…

by Thomas D. Begley, Jr., CELA

There are a number of alternatives to a Third Party Special Needs Trusts. These include the following:

• Disinherit a Child. The problem with this strategy is that one cannot be certain that public benefits, as we know them today, will continue forever. Many public benefits have been cut back in recent years and there is no guarantee that current benefits will not be reduced as well. Many parents who have severely disabled children, whose needs are covered by public benefits, will consider disinheriting the children, but they should be made aware that current public benefits may not be there when the child needs them in the future.

• Leave Money to the Child. The problem with this approach is that unless the funds being left to the child are very significant, they may not last long if the child’s needs, particularly medical needs, are great. It is usually better to maintain public benefits and establish a trust for needs or wants that will not be covered by public benefits.

• Leave Funds to Sibling. This is the common strategy that frequently backfires. The idea is to leave the share of the person with disabilities to a brother or sister with the understanding that the brother or sister will use that money to care for the child with disabilities. The problems occur when the child to whom the funds are left is sued by a creditor, is divorced, or simply says, “I want to use this money for myself, not in the Will says that I have to use it for my sibling with disability and I am not going to use for that purpose.” Sometimes it is the sibling that makes this decision, but frequently it is the spouse of the sibling who pushes for that result.

• Pooled Trust. A Pooled Trust is a good solution for relatively small amounts of money. If the trust is less than $100,000, Pooled Trust makes sense. If it is between $100,000 and $200,000, a Pooled Trust should be compared to a Third Party Special Needs Trust. If the amount involved is in excess of $200,000, a Third Party Special Needs Trust is almost always the best solution.

• ABLE Account. New Jersey has adopted legislation authorizing ABLE accounts. These accounts are expected to come into existence sometime in the Fall. A problem is that not more than the gift tax annual exclusion amount can be contributed to an account in any one year and no beneficiary can have more than one account. The annual exclusion gift tax exemption for 2016 is $14,000. So, if the inheritance is $14,000 or less, an ABLE account might make sense.

by
Thomas D. Begley, Jr., CELA

Below is a chart comparing an ABLE Account with a Third-Party Special Needs Trust.

by Thomas D. Begley, Jr., CELA

New Jersey has passed the Achieving a Better Life Experience ACT (“ABLE”). While the Act has passed, it will take some time to implement. Many commentators believe that by the end of the year accounts will be authorized.

Under the ABLE Act, people with disabilities and their families may set up special savings accounts similar to 529 Plans to be used for disability-related expenses. Earnings on these accounts are non-taxable. Generally, if the fund does not exceed $100,000, it will not be counted for Supplemental Security Income (“SSI”) purposes. If the fund exceeds $100,000 then SSI will be suspended, but Medicaid can be continued so long as the total amount in the account does not exceed the amount authorized for 529 Plans. To be eligible, an individual must become disabled prior to age 26 and be disabled. If the individual receives Supplemental Security Disability Income (“SSDI”) or SSI or files a Disability Certification under IRS Regulations, she will be considered disabled.

Funds can be used for education, housing, transportation, employment training, support, assistive technology, personal support services, health, prevention and wellness, financial management and administrative fees as well as legal fees and expenses for oversight and monitoring.

The total amount contributed to an ABLE account in any one calendar year by all contributors cannot exceed the amount of the federal annual gift tax exclusion, which for 2016 is $14,000. The drawback to these accounts is on the death of the account owner, any funds remaining in the account must be used to repay Medicaid for any funds advanced on behalf of the account holder. The best strategy seems to be to use these accounts for small gifts. Normally, these accounts would be used for gifts from parents. As long as the gifts are less than $14,000 per year and do not accumulate very much, these accounts might make sense. However, because of the Medicaid payback, it does not make sense to have these accounts grow. A Third Party Special Needs Trust is a much better option, if the amount involved is significant.

The advantages of an ABLE account are the tax-free income. However, realistically this is not a significant advantage because the income on small accounts is low and the other income of the beneficiary with a disability is usually low, so the tax saving sounds more attractive than it actually is. A second advantage is that there is a minimal cost to establishing the account when compared to establishing a Pooled Trust or a Third Party Special Needs Trust. A third advantage is that distributions from an ABLE account for the beneficiary’s food and shelter do not reduce the beneficiary’s SSI payment.

The disadvantages are the Medicaid payback and the possible loss of SSI. Because of the Medicaid payback, it makes little sense to build up a large account. The SSI benefit of approximately $750 per month is a significant benefit that should be protected.

Ideally, ABLE accounts appear to be useful if they are in the $25,000 to $50,000 range, but not for larger accounts. A Pooled Trust or Special Needs Trust would be more appropriate.

by Thomas D. Begley, Jr., CELA

Availability. Assets in a Self-Settled Special Needs Trust (“SSSNT”) are not considered available for Supplemental Security Income (“SSI”) or Medicaid eligibility purposes. The reason is that the trustee is given sole discretion with respect to distributions from the trust. The beneficiary cannot control distribution or revoke the trust. Special needs language should be included for guidance to the trustee with respect to distributions.

Transfer of asset penalty. There is no transfer of asset penalty for SSI and Medicaid, because there is a statutory exemption under 42 U.S.C. § 1392b and 42 U.S.C. § 1396p(d)(4)(A).

Payback. A payback to Medicaid is required by law. The payback is for all Medicaid benefits received by the beneficiary since birth. It is not sufficient to pay back Medicaid benefits received from the date of the establishment of the trust to date. In the case of a personal injury settlement, the Medicaid payback is not limited to medical assistance related to the personal injury. All medical assistance provided by Medicaid from birth, whether or not related to the injury, must be included in the payback.

Funding. SSSNTs are generally funded by personal injury recoveries, inheritances, equitable distribution, alimony or child support. However, any asset can be used to fund an SSSNT.

Tax considerations.

• An SSSNT is considered a grantor trust. Therefore, the income earned by the trust is taxed to the beneficiary at the beneficiary’s tax rates.

• Transfers to an SSSNT are not completed gifts.

• Estate tax. Assets in an SSSNT are included in the estate of the beneficiary.

Estate recovery. There is no Medicaid estate recovery against an SSSNT, but a payback provision has the same effect.

Elective share. Assets in an SSSNT would be considered subject to the elective share.