How “Waiving the Will” Could Affect You

In the spring, as part of a my seminar series, I will be presenting “Elder Law for Couples,” in which I will discuss the ins and outs of estate planning for seniors. One of the new issues is a new Massachusetts Supreme Judicial Court interpretation of the “spousal share.”

If one spouse dies and leaves little or nothing to the other spouse in his or her Will, under Massachusetts law the surviving spouse has the right to waive that Will and instead elect an amount designated by state statute as the “spousal share.” Until recently, that election rarely happened because the statute dealing with what constituted the “spousal share” was so ambiguous, especially when there was real estate involved.

In the Massachusetts case, Ciani v McGrath, decided on January 8, 2019, the SJC decided that if the first spouse to die owned real estate and the surviving spouse waived the Will, the surviving spouse obtained a life estate in one-third of the real property, entitling the surviving spouse to any income from the property while the surviving spouse was alive but also, more importantly, giving the surviving spouse the ability to force a sale of the property through a “petition to partition” and obtain a share of the proceeds.  As the holder of a life estate, the surviving spouse would also have certain obligations, such as paying a share of the property taxes, repairs and expenses.

This clarification provided by the Court will make it easier for the surviving spouse to obtain a share of the assets of the deceased spouse, especially in those cases where the marriage was acrimonious. However, there may be unintended consequences for many seniors who are trying to protect assets from MassHealth claims.

I often talk about my fictitious couple, Frank and Mary. Suppose Frank is caring for Mary at home but wants to make sure that, if he dies, Mary will be able to qualify for MassHealth.  Suppose he does that by having a Will that leaves all of Frank’s assets to his children, figuring they will care for their mother.  Now suppose Frank dies owning the home, Mary then needs nursing home care, and Mary applies for MassHealth.  Will MassHealth require Mary to exercise her spousal share, obtain a life estate in the house, and force its sale so that her share of the proceeds can be used to pay for her nursing home care?  We will need to wait and see, but this is certainly a possibility.

For a discussion of these and other estate planning matters for couples, you may want to attend one of the “Elder Law for Couples” sessions at the senior centers in Marlborough, Hudson, Southborough, Hopkinton, Ashland, Holliston, Vineyard Haven or Nantucket.  All senior centers are open to all seniors.  For dates and times, go to our Trusts and Estates blog, “Getting All Your ‘Docs’ in a Row.”

If you need more information on this, you can contact me at (508) 860-1470 or abergeron@mirickoconnell.com.  You can also view my 10-minute Q&A Fireside Chats on Frank and Mary’s YouTube Channel, www.youtube.com/elderlawfrankmary.

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Posted in Elder Law, Estate Planning, MassHealth, Wills | Tagged , , , ,

It’s Tax Time Again – Here Are Four Quick Tips

apbIf you or your spouse is chronically ill, here are four quick tips to consider if you itemize deductions on your income tax returns:

  1. LONG TERM CARE INSURANCE PREMIUMS ARE USUALLY DEDUCTIBLE. They are part of your medical expense deduction.  While there is a cap on the amount, the cap goes up with age and is over $5,000 if you are over 70.
  2. MOST OF YOUR COST OF STAYING AT HOME IS DEDUCTIBLE IF YOUR ARE CHRONICALLY ILL. If you need substantial assistance with at least two of the activities of daily living (eating, toileting, transferring, bathing, dressing) or need “substantial” supervision for your safety (and have needed it for at least 90 days), then the cost of your care, including home care services, is deductible.  That can be especially important if you have tax-deferred accounts that you did not want to use because of the cost of taking a withdrawal.  By using those funds to provide for this care, you are basically withdrawing them tax-free.
  3. MONTHLY ASSISTED LIVING BILLS MAY BE TAX-DEDUCTIBLE IF YOU ARE CHRONICALLY ILL. If you are “chronically ill” and your doctor certifies that you need to live in an assisted living community because of your illness, the entire cost of assisted living may be deductible as a medical expense.  Once again, this may be important if you are paying for the assisted living with tax-deferred funds or with low basis assets which might otherwise be subject to income tax on capital gain.
  4. IF YOUR CHILD PAYS YOUR ASSISTED LIVING OR HOME CARE BILLS, THE CHILD MAY BE ABLE TO DEDUCT THE EXPENSE. If your child contributes more than 50% of your living expense in any year, then your child may take your medical expenses as his or her medical deduction.

If you must pay for the cost of being chronically ill, it might be helpful if you can get a tax deduction for it.  However, in order to obtain a tax benefit for medical expenses, you must itemize deductions.  In order to itemize, your deductions must exceed $12,000 if single, $24,000 if married.  Also, your medical deductions are reduced by 7.5% of your Adjusted Gross Income before you get the benefit of the medical expense.

If you need more information on this, you can contact me at (508) 860-1470 or abergeron@mirickoconnell.com.  You can also view my 10-minute Q&A Fireside Chats on Frank and Mary’s YouTube Channel, www.youtube.com/elderlawfrankmary.Duck

Posted in Assisted Living, Elder Law, Estate Planning, Home Care, Income Taxes | Tagged

Upcoming Elder Law Legal Clinics

Below is a listing for two of my upcoming programs.  Contact your local Council on Aging for more information and to register. If you miss a program, you may always watch them on your local cable access station or on my You Tube channel, “Elder Law with Frank and Mary.”

Elder Law for Couples: The best way for a couple to ensure their estate planning goals are met is to develop your estate plan while you are both alive.  The options, and your goals, may change if you do not have an estate plan in place should one of you pass away.  I will discuss best estate planning practices for tax minimization, asset protection, and probate avoidance.

Elder Law for Singles: Estate planning is not just for couples!  Everyone should have an estate plan in place to protect you and your assets should you become frail, incapable of caring for yourself, or to simplify things should you pass away.  I will discuss best estate planning practices for singles.

Posted in Elder Law, Estate Planning, Estate Taxes, Trusts, Wills | Tagged , , , ,

Boston Globe article highlights the importance of estate planning for blended families

A recent article in The Boston Globe – “A patriarch leaves no will and the home he meant for his Cambridge family may be lost” – demonstrates the importance of having an estate plan, particularly with blended families, and shows how not having a Will can result in unfortunate consequences.

 

 

Posted in Estate Planning, Probate, Wills

Things to Consider When Trying to Avoid Probate

apbProbate is the court process of determining who gets your assets when you die.  A Will does not avoid probate, but it governs who will get your assets owned in your sole name.  To avoid probate, you need to structure things so that, when you die, your assets pass automatically to the persons you want to receive them.  Here are some ways to avoid the probate process:

  • Name a Beneficiary.  Many assets, such as IRAs, life insurance, annuities, etc. require the naming of a beneficiary.  For bank accounts and brokerage accounts, you may be able to make a “pay on death” (POD) or “transfer on death” (TOD) designation so that probate can be avoided.
  • Own assets jointly with someone else.  With a joint account, title passes to the surviving joint owner automatically.
  • Use Deed with Retained Life Estate.  You can give a “remainder” interest in real estate to the person to whom you want title to go when you die.  You reserve a “life estate” so you get to live there for life.  Title passes automatically when you die and does not have to go through probate.
  • Don’t Forget Trusts.  In the right situation, trusts can avoid probate and ensure that your assets go to the persons you want to benefit.  They are also great to provide asset protection for your beneficiaries.
  • Give assets away early.  I often joke with my clients that, by giving things away early, you get to avoid probate while also getting to hear people say “thank you.”  Don’t give away things you might need, of course (like all your money).  One variation on this strategy is to have the agent you have named in your Power of Attorney (you do have a Power of Attorney, right?) give your property away just before you die.
  • Deal with the car.  Because the car has a title, you can’t sell it unless the title shows it is yours.  If you die and your spouse survives you, it is presumed that he/she is the surviving joint owner.  Otherwise, there needs to be probate.  The most common way to avoid this is to name a joint owner.  Remember, though, that the joint owner may be liable if you get into an accident.  So you may want to get additional insurance if you own your car in joint names.
  • Don’t forget anything.  The old jalopy, the old passbook account you forgot about, the life insurance policy where you forgot to change the beneficiary when your spouse died.  These all need to be dealt with, and name a beneficiary, if possible.

If you need more information on this, you can contact me at (508) 860-1470 or abergeron@mirickoconnell.com.  You can also view my 10-minute Q&A Fireside Chats on Frank and Mary’s YouTube channel, www.YouTube.com/ElderLawFrankAndMary.Duck

Posted in Elder Law, Estate Planning, Gifting | Tagged

Make a Resolution to Talk to Your Proxy Agent

apbA few months ago I participated in a great event at Milford Regional Hospital.  The Hospital is actively encouraging Milford residents and the neighboring communities (who obviously are all likely future patients there) to not only complete a Health Care Proxy but to also have a conversation with that Agent to make sure the Agent knows how the person he or she is making decisions for would like to be treated.  At the event, the moderator asked for a show of hands as to how many of the 40+ people in attendance had executed a Health Care Proxy.  Everyone had.  The moderator then asked how many people had written down some instructions for their Agent, telling the Agent how they wanted to be treated.  No one had.  Several people had not even told their Agent that he or she had been appointed.

For the young and invincible, having these kinds of conversations with your Health Care Proxy Agent may seem like a waste of time.  But, is it?  What if you get into a serious accident and are unable to make decisions for yourself?  For seniors, the medical crises that can cause death or incapacitation can come at any time.  For us (and I’m with you on this) not preparing for a medical emergency and its potential consequences is simply foolish.  We all have friends and relatives who have been stricken without warning.  We have all been to the unexpected funerals of those who are younger than we are.  Maybe you’ll be lucky and you’ll recover from that stroke or heart attack that you secretly dread.  But what if you end up not well enough to really make medical decisions for yourself?  What if you really can’t understand what your medical options are anymore, even if you can still talk?

Your Agent’s responsibility starts as soon as your doctor says you are not competent to make medical decisions, and ends when your doctor says you can make the decisions again.  Suppose you have a stroke leaving you totally incapacitated.  Suppose you then come down with pneumonia or the flu.  Your doctor tells your Agent that you need to go to the hospital for the pneumonia.  You may be cured of the pneumonia but the effects of the stroke will remain.  Do you really want to go to the hospital?  Do you want to get “better” so you can go back to staying the way you are now?  These are just the kinds of questions your Agent may have to answer for you.  Have you had a conversation with your Agent about what that answer should be?

If you need more information on this, you can contact me at (508) 860-1470 or abergeron@mirickoconnell.com. You can also view my 10-minute Q&A Fireside Chats on Frank and Mary’s YouTube channel, www.YouTube.com/ElderLawFrankAndMary.Duck

Posted in Elder Law, Estate Planning, Incapacity | Tagged , ,

Upcoming Legal Clinic

FrankandMaryYou can always qualify for MassHealth, even at the last minute, if you need nursing home care or a lot of care at home. In this seminar, I will explore how pooled trusts and annuities can help you qualify for MassHealth.

Below is a listing of my upcoming programs.  Contact your local Council on Aging for more information and to register. If you miss a program, you may always watch them on your local cable access station or on my You Tube channel, “Elder Law with Frank and Mary.”

Duck

Posted in Elder Law, MassHealth, Pooled Trusts, Uncategorized

Asset Protection for Single Seniors

apbThis past spring I did a set of Council on Aging seminars on the legal issues single seniors face. If you are single, and you want your children or friends to avoid the time and expense of probate after you die, you need to make sure that no asset of yours is in your sole name at the moment of your death.  There are four basic ways to avoid probate, and the strategy varies depending on the asset:

Name a joint owner. If you own an asset, stock, bank account, or even real estate jointly with someone, legally you each are entitled to 100% of the asset. Upon your death, your interest in the asset expires, leaving the survivor as the sole owner. Of course, this strategy has some potential drawbacks while you are still alive. Any joint owner of your bank account will have access and the ability to withdraw from it. The joint ownership interest can also be attached by the joint owner’s creditors. However, as long as you are not worried about these possibilities, joint ownership is an inexpensive way to avoid the probate of some assets. Continue reading

Posted in Elder Law, Estate Planning, Gifting, Probate, Trusts, Uncategorized

Elder Law Clinics

My fall elder law presentations kick-off on September 18th!  Learn about Irrevocable Trusts:  Do you need one?  Is the one you have working?

Below is a listing of my upcoming programs.  Contact your local Council on Aging for more information and to register. If you miss a program, you may always watch them on your local cable access station or on my You Tube channel, “Elder Law with Frank and Mary.”

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Upcoming Elder Law Clinics

 

 

Estate planning, tax minimization and asset protection concerns are very different for single people versus married couples.  Learn what steps singles need to take to protect yourself and preserve your assets.  Attend one of my elder law seminars next month.  Below is my May schedule.

5/8                   1 – 2 pm                      Hudson Council on Aging, 29 Church Street

To register:  (978) 568-9638

5/9                   1 – 2 pm                      Southborough Senior Center, 9 Cordaville Road

To register:  (508) 229-4453

5/15                 1:30 – 2:30 pm            Marlborough Council on Aging, 40 New Street

To register:  (508) 485-6492

5/22                 5:30 – 6:30 pm            Tisbury Council on Aging, 34 Pine Tree Road

To register:  (508) 696-4205

5/29                 10 – 11 am                  Hopkinton Senior Center, 28 Mayhew Street

To register:  (508) 497-9730

5/30                 1 – 2 pm                      Holliston Council on Aging, 150 Goulding Street

To register:  (508) 429-0622

5/31                 3 – 4 pm                      Saltmarsh Senior Center, 81 Washington Street

To register: (508) 228-4490

Contact your local Council on Aging for more information and to register. If you miss a program, you may always watch them on your local cable access station or on my You Tube channel, Elder Law with Frank and Mary.

 

Posted in Elder Law, Estate Planning, Estate Taxes, MassHealth, Probate, Wills | Tagged , , , , , , , , , , , ,