Who Ya Gonna Call?

As seniors, you are probably the greatest beneficiaries of the Great Society, that incredible combination of programs created by President Lyndon Johnson and passed during the 1960s. The anchors of those programs, of course, were Medicare and Medicaid.  Before the creation of these programs, over 30% of all seniors in this country were listed as poor.  Now, less than 10% are listed that way.  In the old days, uninsured seniors got sick and went broke.  Today, there is a safety net that protects us from the medical risks that inevitably come with old age.

At least as important as these medical programs was the Older Americans Act (OAA), designed to help all seniors live better lives. Meals on Wheels, one of the original OAA programs, continues to provide nutritious meals to those who want them.  These and other OAA programs are administered by regional non-profits whose sole purpose is to improve your life as a senior.  Yours is BayPath Elder Services.  I spend a lot of time in these columns helping you figure out the various government programs for which you might be eligible.  The best advice I can give you regarding all of these programs, however, is to call BayPath Elder Services.  Their phone number is 508-573-7200.  Their email address is info@baypath.org.  They provide nutrition and wellness classes, support groups, home care, a number of other programs, and of course, Meals on Wheels.  All of these programs are designed to make your life as a senior better and are more fulfilling and always offered at minimal or no cost to you.  This fall I will be doing a series of articles and seminars highlighting these programs and the way they could improve your life, both by keeping you independent when you need a little more help, and by helping you make the most of the last years of your life.  Stay tuned.

I know it is still summertime and you are still relaxing, but write BayPath Elder Services’ phone number down and resolve to give them a call. Talk to their outreach people about your own situation and find out about the programs that may benefit you right now or that could benefit you in an emergency so you will know whom to call if trouble comes. 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, http://www.youtube.com/elderlawfrankmary and find more in-depth commentary on legal issues on Mirick O’Connell’s Trusts and Estates blog, “Getting All Your ‘Docs’ in a Row.

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Protecting the Cottage

Are you lucky enough to own that special place, whether it’s a camper in Maine or a house on the Cape, where you, your children and your grandchildren can go to enjoy some time away together during our all-too-brief New England summers? If so, you most likely would like to leave that vacation home to your family to enjoy for generations to come, without worrying about having to sell it  in order to qualify for MassHealth, either because you need nursing home care or because you need a lot of care at home in order stay out of a nursing home.

If you are married and you need to qualify for MassHealth, you can usually transfer your assets to your spouse. Since your home is not a countable asset, it will be safe.  If your spouse has more than the allowable maximum (now $126,420) in other assets, your spouse can simply use the extra assets to buy an annuity.  Unlike your main residence, a vacation home may be considered a countable asset, and therefore would need to be sold with the proceeds used to buy that annuity. Of course, if you and your family love that vacation home, that sale is exactly what you are trying to avoid.

Your vacation home, then, is the one asset you’d need to protect ahead of time. Typically, you would do that by conveying a so-called “remainder interest” in that home to your children, or to one or more of them as trustee of an irrevocable trust for their benefit.  You would retain a “life estate” in the property, allowing you control of the home while you are still alive.  Five years after you have transferred this reminder interest, it will no longer be countable or lienable if you later need to qualify for MassHealth.  By taking this precaution, you are also avoiding probate.  At the moment of your death, your life estate will expire, leaving your children (or the trust for their benefit) as the owner of the summer home without going through the probate process.  Also, when you die, the tax basis of the property will jump to its date of death value, so that if your children do end up needing to sell the summer home, any capital gains tax will be eliminated or reduced substantially.

So while your kids are visiting this summer, talk with them about protecting this family treasure. You may also want to talk with your lawyer about it. In the meantime, kick back and enjoy the summer!

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, http://www.youtube.com/elderlawfrankmary and find more in-depth commentary on legal issues on Mirick O’Connell’s Trusts and Estates blog, “Getting All Your ‘Docs’ in a Row.”

 

Posted in Estate Planning, MassHealth, Trusts | Tagged , , ,

If You See Something, Say Something

One of my elder clients (we’ll call her Mary) called about two weeks ago. She had received a call from a caseworker at Springwell, one of the network of regional entities charged by the Commonwealth’s Office of Elder Services with investigating abuse complaints.  Mary’s husband had died recently.  The staff person at Springwell told Mary there had been a report that Mary was not fully competent as a result of her husband’s death and that one of her daughters and her late husband’s son by a prior marriage were taking advantage of the situation by taking money from her.  The staff person said she was investigating and wanted to verify that nothing had been taken, and asked for Mary’s bank statements to verify that everything was on the up and up.  Mary said she would not release anything to the staff person and then Mary called me.  I spoke to the caseworker, who asked how long I had been dealing with Mary and asked that I meet with her alone to get a sense of the situation.

A few days later I went to Mary’s house and met with her. She was fine.  She was more than fine.  She was indignant because, she said, she suspected that the call to Springwell had come from a granddaughter living on the West Coast who was concerned about making sure that Mary, who is a spring chicken herself, would change her estate plan to include the stepson.  Since it just so happened that I had just gotten a letter from the granddaughter’s “lawyer” (and boyfriend) asking for all the documents regarding Mary’s husband’s estate, I was able to verify Mary’s suspicion about the source of the “abuse” complaint.  I spoke to the caseworker at Springwell and am now documenting that, in fact, no money has been stolen, so she can close the case.

The point of this story is that, while Mary’s initial reaction was irritation that the person from Springwell was “butting in” regarding this intimate family dynamic, the good news is that there really is a state-funded network of folks whose job is to make sure no one takes advantage of Mary, or you, or any senior, and that if you know of a senior who may be being taken advantage of, sometimes by strangers but more likely, in my experience, by “friends” or relatives, there is someplace you can call. These folks have the experience to get to the bottom of these things, as they did in Mary’s case.  The Commonwealth’s Elder Abuse Hotline number is 800-922-2275.  Do a friend (or relative) a favor.  If you see something, say something.

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, http://www.youtube.com/elderlawfrankmary and find more in-depth commentary on legal issues on Mirick O’Connell’s Trusts and Estates blog, “Getting All Your ‘Docs’ in a Row.”

Posted in Uncategorized

Sick? Call Your Doctor – Then Call Your Lawyer

This past month two different people called (neither of them were an existing client) with the same story. Each one had a relative close to death and wanted to know if there was anything that should be done.  In each case, it turned out there would need to be probate of the dying person’s estate unless some immediate steps were taken.  In one case, we had time to restructure things.  In the other case, we did not.  In both cases, the sick person died within days.

In both cases, the dying person owned real estate in his individual name and the property was ultimately going to his relatives.

“Alan” wished for his property to go to his children. In Alan’s case, he had previously executed a Durable Power of Attorney giving someone he trusted the ability to handle his financial affairs.  Therefore, we were able to have the person Alan had named in the Power of Attorney (referred to as the “agent”) execute a deed on Alan’s behalf, transferring a so-called “remainder interest” in the property to Alan’s children, but retaining a “life estate” for Alan himself.  As a result:

  • Upon Alan’s death two days later, his life estate ended, leaving his children as owners of the property without needing to go through the time and expense of the probate process.
  • For capital gains tax purposes, because Alan had kept the life estate, he was still the owner of the property at death, so the tax “basis” of the property increased to the date-of-death value, effectively allowing the property to be sold after Alan’s death free of capital gains tax, just as would have happened if he had not made the transfer.

“Bob” wished for his property to go to his parents. Bob had not executed a Power of Attorney.  At this point, it was not even clear whether Bob would be lucid enough to sign one.  Bob passed away before we got the chance to try.  The property’s tax basis will still receive a step up and his parents will still receive the real estate and the bank account that was in his sole name, but only after the family has hired a lawyer to go through the probate process, and pay legal fees and court costs, and only after waiting a year to see if any of the decedent’s creditors file a claim against the probate estate.

There are two morals to this story. First, ALWAYS have a Durable Power of Attorney.  Second, if someone gets sick (and before they get very sick), call your lawyer to see if you need to do anything.  It’s always too early, until it’s too late.

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 and find more in-depth commentary on legal issues on Mirick O’Connell’s Trusts and Estates blog, “Getting All Your ‘Docs’ in a Row.”

Posted in Elder Law, Estate Planning | Tagged , ,

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.

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 , ,