PLANNING TO KEEP CONTROL

This article was co-authored by Arthur Bergeron and Leah Kofos.

Does this dilemma sound familiar?  On one hand, you want to keep control of your life and make all of financial and medical decisions yourself.  On the other hand, you want to be sure the “right” person (the person you trust) is appointed to make those decisions for you, and moreover, how you would want them to be made, should you become frail or fall ill.   

Oftentimes, seniors fear that if you delegate too much authority too early, either your thoughtful child will become over-protective and take charge before it is time, or the person you thought you could trust may end up making decisions that are really not what you would have wanted.  So, what should you do?

First, consult with your elder law attorney.  It may be that you only need a Power of Attorney to allow someone to manage your finances if you are incapacitated.  Alternatively, if you own some assets as the trustee of a trust, the trust document may need to be amended to make it clear who may handle things if you can’t.  If you’re thinking of putting assets into an irrevocable trust for asset protection purposes, you may want to make sure that you retain the power to remove the trustee if you think that person is acting against your interests. Depending on the situation, you may also want to make sure that the successor trustee does not stand to inherit remaining trust assets after you die, and therefore will not find any decisions clouded by self-interest.

Similarly, you should have a Health Care Proxy agent who will make the decisions regarding your health.  Of course, that means naming someone you can “trust;” someone who will make the decisions that you would have made, even if that person would choose a different option for themselves.  It means more than that, though.  It means having a conversation with that person about what is important to you, about the things that make life worth living for you, and about how to decide (if you cannot) when medical interventions that cause nausea, pain, or other side effects should be rejected, even if that rejection means your death may be more imminent.  Once you’ve had that conversation, you may want to write down some of your wishes to help your agent decide what to do in times of stress.

It’s your money and it’s your life.  By planning ahead, you assure that your money is spent and your life is lived on your terms.  

For more information on living with memory loss, watch this month’s elder law virtual seminar, which can be watched on Frank and Mary’s YouTube channel, http://www.youtube.com/elderlawfrankandmary, and on your local cable station, along with Frank and Mary, where my co-host and I address many common issues facing seniors and the resources available during the pandemic.  As always, if you have any questions or would like additional information, please contact me at (508) 860-1470 or abergeron@mirickoconnell.com.

Living with Memory Loss

Thirty years ago next month, my mother died in a nursing home.  Back then, there weren’t open discussions, shared knowledge, or resources available to people with Alzheimer’s Disease.  Most seniors died from “hardening of the arteries” or just “old age.”  There were no home care agencies or day programs for those with memory loss, support groups, or government programs to help you stay home.  My quiet mother was embarrassed to say anything because she was afraid to lose her place, afraid to leave the house, and anxious when my father left, even for a moment.  Then there was my father, frustrated and angry to see his wife of 60 years recede into herself, angry with himself when my mother broke her hip and ended up in the nursing home where my father had always promised not to send her.  It was after my mother died that I started doing elder law.

A lot has changed in thirty years.  While no one has found a “cure” for the diseases that cause memory loss, memory loss can be dealt with and adapted to.  But first, whether the memory loss is happening to you or someone you love, you need to push beyond the denial.  The sooner you face the fact that you might have a problem, the sooner you can get a diagnosis and start looking for the programs and other supports to help you and those you love.  If you do not know where to start, I have several suggestions:

• Call your senior center.  You may be surprised by the variety of local resources to which the senior center staff can direct you.  There may very well be a support group or day program for those with memory loss right at the senior center.  If not, the folks there can tell you where the programs are and who to contact.
• Call the Alzheimer’s Association.  There is a national 24-hour hotline staffed by people who can point you directly to resources and programs in your community.
• Find a support group.  My father and mother felt so alone, so trapped and unaware of others right in Marlborough who were going through the same thing.  Things are different now.
• Call BayPath Elder Services or Elder Services of Cape Cod and the Islands at 508-573-7200.  Their trained staff will probably want to visit your home and connect you with programs.  They also have resources to help you pay for home care and other services.
• Talk to an elder law attorney to make sure you have a strategy that will give you the support of government programs that can help, ideally while keeping you or your loved one at home.

You can deal with memory loss.  But first, you have to face it.

For more information on living with memory loss, watch this month’s elder law virtual seminar, which can be watched on Frank and Mary’s YouTube channel, http://www.youtube.com/elderlawfrankandmary, and on your local cable station, along with Frank and Mary in Northborough, where my co-host and I address many common issues facing seniors and the resources available during the pandemic.  As always, if you have any questions or would like additional information, please contact me at (508) 860-1470 or abergeron@mirickoconnell.com.

Emergency Broadband Benefit

One lesson the pandemic has taught us is that having Internet access is essential, now more than ever. However, many people are struggling to afford Internet services. Luckily, a new federal coronavirus aid program might be able to help. Launched on May 12, 2021, the Emergency Broadband Benefit program offers assistance to all eligible Americans to help pay for the Internet.

The Emergency Broadband Benefit offers the following to eligible households:

• Up to $50 per month toward the cost of Internet service;
• Up to $75 per month if your household is on qualifying Tribal lands; and
• A one-time discount of up to $100 for a laptop, tablet, or desktop computer.

Only one monthly service discount and one device discount is allowed per household.

All households (see https://getemergencybroadband.org/do-i-qualify/what-is-a-household/) are eligible to receive the benefit, provided that they meet just one of the following criteria:

• Experienced a substantial loss of income due to job loss and/or furlough since February 29, 2020, with a total household income in 2020 at or below $99,000 for single filers and $198,000 for joint filers;
• Combined income at or below 135% of the federal poverty guidelines (see https://aspe.hhs.gov/2021-poverty-guidelines);
• Qualified for Lifeline benefits through SNAP, Medicaid, Supplemental Security Income, Federal Public Housing Assistance, or Veterans and Survivors Pension Benefit (see https://www.lifelinesupport.org/);
• Participated in a Tribal specific program (see https://getemergencybroadband.org/do-i-qualify/tribal-benefit/);
• Received a federal Pell Grant in the current award year (see https://studentaid.gov/understand-aid/types/grants/pell);  
• Received approval for benefits under the free and reduced-price school lunch program or the school breakfast program, including through the USDA Community Eligibility Provision, in the 2019-2020 or 2020-2021 school year (see https://www.fns.usda.gov/cn/community-eligibility-provision); or
• Meets the eligibility criteria for a participating provider’s existing low-income or COVID-19 program, and that provider received FCC approval for its eligibility verification process.

The program ends upon the first to occur of six months after the Department of Health and Human Services declares an end to the COVID-19 health emergency or when the program runs out of funding. The cap for funding the program is $3.2 billion, which makes it the largest federal program to help with Internet costs. But be careful not to let the seemingly large amount of funding prevent you from acting fast – so many people applied on the day the program launched that the website crashed.

To apply, visit https://getemergencybroadband.org/, or contact the program at 1 (833) 511-0311 for a mail-in application. If you apply by mail, send the application, along with copies of documents showing proof of eligibility, to Emergency Broadband Support Center, P.O. Box 7081, London, KY 40742. If you apply online, the program will attempt to verify the entered information automatically. If they are unable to automatically verify the information you provided, you must send in documentation (either by mail or electronically) to back up the information in question. Be sure to include a cover sheet with your name and application ID, which will be given to you when you submit your application.

If you are interested in discussing the Emergency Broadband Benefit in greater detail, please contact me at 508-929-1620 or lkofos@mirickoconnell.com.

COVID-19 Funeral Reimbursement Program

Has a loved one passed away due to COVID-19 complications? If so, you may be eligible for a government reimbursement for funeral expenses to assist with funeral services, interment, and cremation. 

The assistance is limited to a maximum reimbursement amount of $9,000 per funeral and a maximum of $35,500 per application.  As of this date, there is no deadline to apply, and a funding cap has not been established.

Covered funeral expenses include, but are not limited to, the following:

• Transportation for up to two individuals to identify the deceased individual
• Transfer of remains
• Casket or urn
• Burial plot or cremation niche
• Marker or headstone
• Clergy or officiant services
• Arrangement of the funeral ceremony
• Use of funeral home equipment or staff
• Cremation or interment costs
• Costs associated with producing and certifying multiple death certificates
• Additional expenses mandated by applicable local or state government laws or ordinances

To be eligible for the reimbursement, the death certificate must indicate that the death occurred in the United States, including U.S. territories and the District of Columbia, and that the death was attributed “directly or indirectly” to COVID-19.  

Who can apply?

One applicant may apply for multiple deceased individuals. If multiple people contributed toward the funeral expenses, all should apply under a single application as applicant and co-applicant. The applicant must be a U.S. citizen, non-citizen national, or qualified alien who incurred funeral expenses after January 20, 2020. The applicant cannot be a funeral home or business. There is no requirement for the deceased person to have been a U.S. citizen, non-citizen national, or qualified alien.

The application for funeral reimbursement requires the following documentation:

• Personal information needed about the applicant
  
  • Social Security Number
  • Date of birth
  • Current mailing address and phone number
  • Routing and account number of checking/savings account (for direct deposit, if requested).
    
    
• Personal information needed about the decedent:
  
  • Social Security Number
  • Date of birth
  • Location and address where death took place.
    
    
• Certified death certificate showing that:
  
  • COVID-19 “directly or indirectly” contributed to the death
  • The decedent died within the United States, including the U.S. territories and the District of Columbia.
    
    
• Documentation of funeral expenses:
  
  • Must include applicant’s name, deceased person’s name, amount of funeral expenses, and dates funeral expenses were charged 
    
    
• Proof of funds received from other sources:
  
  • If the decedent received any funeral or burial benefits from burial/funeral insurance, voluntary agencies, or government agencies, FEMA will only reimburse the excess expenses. This includes benefits from pre-paid funeral or burial contracts.

How to Apply:

Applicants can call the COVID-19 Funeral Assistance Line at 844-684-6333 between 9:00 A.M. and 9:00 P.M. The application includes an option to receive funds by mail or by direct deposit. No online applications will be accepted. FEMA requests that applicants gather all necessary documentation before calling the phone number provided. The phone call should take approximately twenty minutes.

Once the applicant calls FEMA and receives an application number, he/she/they can upload the supporting documentation to DisasterAssistance.gov, fax the documents to 855-261-3452, or mail the documents to P.O. BOX 10001, Hyattsville, MD 20782. If applicants mail documents, it is advised that they receive a tracking number.

If FEMA denies the application, the applicant has 60 days from the date of the letter to upload, fax, or mail a signed letter appealing the decision. The appeal should include the application number and a reason why the applicant believes the application should have been approved (including supporting documentation). For more information, please visit the FEMA informational website, https://www.fema.gov/press-release/20210324/fema-help-pay-funeral-costs-covid-19-related-deaths.

If you are interested in discussing the COVID-19 Funeral Reimbursement Program in greater detail, please contact me at 508-929-1620 or lkofos@mirickoconnell.com.

Durable Powers of Attorney: What You Should Know

You have worked hard to grow and nurture your assets throughout your lifetime. What happens if, due to illness, hardship, or other difficulty, you are unable to continue to do so? A Durable Power of Attorney answers this question.

A Durable Power of Attorney authorizes your named agent, called an attorney-in-fact, to handle your finances. This could include paying your bills while you are in the hospital recovering from surgery, signing your income tax returns, signing health insurance documentation on your behalf, and making gifts to your family or charitable donations.

Here are some other things you should know about Durable Powers of Attorney:

• Without a Durable Power of Attorney, if you are incapacitated and someone needs to pay your bills for you, that person may have to petition the court for a conservatorship. A conservatorship will cost time and money that you may not have to spare.
• A Durable Power of Attorney states that it will remain in force and effect even after you become incompetent.  A general Power of Attorney, without such a statement, will actually cease to be effective if you become incompetent. All Powers of Attorney end upon your death.
• Powers of Attorney can be written to become effective upon your incapacity. This is known as a Springing Power of Attorney. Oftentimes, though, it can be advantageous to give the attorney-in-fact authority to act for you immediately after you sign the document.
• Most often, Durable Powers of Attorney give the attorney-in-fact authority over all financial accounts, but they can also be drafted to give limited access to specific accounts only.
• Always be sure to give your bank or financial institution an original signed Durable Power of Attorney to scan and return the original to you for future use. Most banks will not accept a copy. 
• Update your Durable Power of Attorney periodically. Banks often refuse to accept Durable Powers of Attorney – even though they are still valid – if they are considered “old” or “stale.”

If you are interested in discussing Durable Powers of Attorney in greater detail, please contact me at 508-929-1620 or lkofos@mirickoconnell.com.

Do I Need a Health Care Proxy?

If you have found yourself asking this question, the answer is an emphatic yes. Health Care Proxies are one of the most important documents in your estate plan. So what is it, and why is it so important?

A Health Care Proxy is a document that allows someone to make medical decisions for you in the event that you are incapacitated. This situation could arise if you are in surgery and there are complications, if you are in a motor vehicle accident, or if your mental state is such that you cannot make medical decisions for yourself. A doctor’s job is to treat you. If you find yourself in any of these situations and do not have a Health Care Proxy, your doctors under certain circumstances may be required to take specific medical actions or provide you with a treatment that you would not have wanted.

Furthermore, if you become incapacitated (i.e. coma, Alzheimer’s, etc.) and you do not have a Health Care Proxy in place, your family may need to petition the court for a guardianship over you. In a guardianship, the court appoints someone to have the legal right to make your medical decisions for you.  A guardianship can be costly, time consuming, and extremely stressful during an otherwise emotionally taxing event.

If you have a Health Care Proxy naming a trusted adult child, parent, friend, or family member as your health care agent, you should have a conversation with that person to discuss what you would want done in different medical scenarios. A Health Care Proxy allows you to rest easy knowing that whatever the situation, someone who loves you will be looking out for your best interest.

If you are interested in discussing Health Care Proxies in greater detail, please contact me at 508-929-1620 or lkofos@mirickoconnell.com.

Financial Planning for Seniors

This article was authored by elder law attorneys Arthur P. Bergeron and Leah Kofos.

To whom do you trust to give your financial planning advice?  Your accountant?  Your kids?  The guy you have coffee with at Dunkin Donuts?  Your lawyer?  God forbid.

The point about financial planning, like all planning, is that you can’t plan how to get where you want to go unless you know where you’re going.  As any senior will tell you, where you’re going gets harder to see every year.  You know you will die eventually, so you should plan to make it easier for your loved ones after you are gone. What you don’t know is when that will be, or what kinds of health challenges you might face along the way – challenges that can be incredibly expensive.  So here are my contributions to the advice list:

• Since you don’t know what’s coming, it pays to stay flexible. Stay away from investments where there is a big penalty for early withdrawal.  The lure of a slightly better investment return on an annuity may be outweighed quickly by the penalty (often as high as 10%) if you need that money.  Incidentally, the only penalty for early withdrawal of a CD is the lost interest that had accrued as of the time of withdrawal.  Given today’s low interest rates, that’s insignificant.
• Consider early withdrawals (at lower tax rates) from your tax-deferred savings. If you are married, the federal tax rate on income of less than about $80,000 is 12% or less.  By withdrawing small amounts over time, you reduce the potential big federal tax hit (22% or more) that would come if you needed to withdraw money suddenly.  If you leave it to your kids, they will often end up paying more tax that you do because of their higher incomes.
• Keep your investment risk low. At our age, who needs to be losing sleep over tomorrow’s stock market crash when there may not be time to recover if catastrophe hits?
• Make sure all of your advisors (your investment advisor, your lawyer, maybe not the guy at the Dunkin Donuts) talk to each other. Each one is approaching things from a different angle.  Only you know which angle is most important to you.  Get them together for a conference call or a Zoom meeting.
• Make sure you have an updated Power of Attorney. A lot of asset restructuring may be needed after you are incapacitated, especially if you then need to qualify for MassHealth.  Someone with legal authority should be there to handle those things for you if you can’t.

The right plan is the one that helps you sleep at night.  Only you know what that is, but people around you may be able to help figure it out.

I will be discussing financial planning in more depth during this month’s elder law virtual seminar, which can be watched on Frank and Mary’s YouTube channel, http://www.youtube.com/elderlawfrankandmary, and local cable stations, along with Frank and Mary’s local cable TV shows, where my co-hosts and I address many common issues facing seniors and the resources available during the pandemic.  As always, if you have any questions or would like additional information, please contact me at (508) 860-1470 or abergeron@mirickoconnell.com.

Extension of 2020 Massachusetts Tax Return Filing and Payment

This article was authored by Allen J. Falke, Tracy A. Craig, and Leah Kofos.

Following the recent federal extension for tax filings, Massachusetts has announced that it will extend the filing and payment deadline for individual income tax returns until May 17, 2021, due to the COVID-19 pandemic. It is unclear presently whether the Massachusetts extension will also apply to other types of tax returns due on April 15, such as fiduciary income tax returns. Similar to the federal extension, the Massachusetts extension applies to individual taxpayers and does not affect estimated tax payments that are due on April 15, 2021.

Extension of 2020 Federal Tax Return Filing and Payment

This article was authored by Allen J. Falke, Tracy A. Craig, and Leah Kofos.

The Internal Revenue Service announced yesterday that the federal income tax filing and payment deadline for individuals will be extended until May 17, 2021. This extension is similar to the 2020 filing postponement, which was declared due to the COVID-19 pandemic.

The May 17 extension applies to individual taxpayers, including individuals who pay self-employment tax. The new May date is the deadline both to pay federal taxes and to submit tax returns. If necessary, taxpayers may apply for a further filing extension until October 15, although all federal income tax payments remain due on May 17.

Additionally, a newly-passed law exempts federal income tax for the 2020 tax year on the first $10,200 a taxpayer receives in jobless benefits. This exemption applies to households with a combined income of up to $150,000. Taxpayers who have already filed their 2020 returns without claiming the exemption may need to file an amended return. At this time, the IRS has recommended that early taxpayers should wait before filing an amended return. The agency expects to offer formal guidance to these taxpayers in the near future.

The May 17 extension does not apply to estimated tax payments that are due on April 15, 2021, and does not yet apply to fiduciary income tax returns (Form 1041). Furthermore, the federal extension has no bearing on the deadline for state income tax payments or returns. As of this date, Massachusetts has not yet extended the deadline for state income tax filing and payment, although legislation is in the works to follow the IRS’s extension and seems likely to pass. As of this writing other states have already extended their due dates to be consistent with the IRS’s extended due date.

Stay tuned for additional guidance from the IRS on the extended due date and the Massachusetts Department of Revenue for updates on the 2021 filing season.

A Few Tips for Tax Season

This article was authored by elder law attorneys Arthur P. Bergeron and Leah A. Kofos.

I love being at Mirick O’Connell because when my elder clients inevitably call me at this time of year asking tax questions, I can always rely on the lawyers here who have focused on tax issues their entire lives instead of looking things up.  Here are a few quick tips that are especially relevant to Frank and Mary and the many seniors like them:

• You probably have to file a federal income tax return. Under federal law, the filing requirement is not based on your income, but on the amount of your combined federal standard deduction and the deduction you get from being 65 or older.  For 2020, if you’re single, that amount is $14,050; if you’re married filing jointly, it is $27,400.
• Up to 50% of Social Security payments are taxable if your 2020 income exceeds $25,000 if single, $32,000 if married, or up to 85% of the payments are taxable if your income exceeds $34,000 if single, $44,000 if married. In determining amount of income, add 50% of Social Security payments to your other income.
• You must file a Massachusetts income tax return if your income exceeds $8,000.
• If your local real estate taxes (plus 50% of your water/sewer bill) exceeds 25% of your income, or if you’re a tenant and your rent exceeds 25% of your income, you’re probably entitled to get a check back from the Commonwealth of up to $1,150 after filing state returns.
• Certain improvements to your home, as well as payments to health care providers who helped you or your spouse, may be deductible as medical deductions. Small (grab-bars) and big (elevators) improvements you made to your home may be tax-deductible, as well as the costs of the aides that help you stay home.  You should start thinking about the home improvements you want to make this year so you can deduct them next year.  By paying for these with some of your IRA or other tax-deferred funds, you are effectively eliminating the tax on those funds.
• If your child is paying for those improvements or for extra care at home, and if that total cost was over 50% of your annual expenses, your child may be able to claim you as a dependent and take the medical deduction. That may be useful if you have previously given away some of your assets to your child (or to an irrevocable trust for his/her benefit) since your child’s income, and therefore the effect of the tax benefit, may be much larger than it would be for you.

I will be discussing tax issues in more depth during this month’s elder law virtual seminar, ALL ABOUT TAXES, which can be watched on Frank and Mary’s YouTube channel, http://www.youtube.com/elderlawfrankandmary, and local cable stations, along with Frank and Mary’s local cable TV shows, where my co-hosts and I address many common issues facing seniors and the resources available during the pandemic.  As always, if you have any questions or would like additional information, please contact me at (508) 860-1470 or abergeron@mirickoconnell.com.