New York Elder Law Attorney Blog

This week our New York elder law attorney, Bonnie Kraham, Esq., published yet another article in the Times Herald-Record in order to help spread information about elder law and estate planning issues. Many area residents understand the need to conduct this future planning, but they are not exactly sure what is included in one of these plans. That is why in this latest piece Ms. Kraham shares information about the actual documents that are commonly part of the planning process.

For example, most plans include a revocable living trust (RLT) and an irrevocable Medicaid asset protection trust (MAPT). These tools protect assets from probate and ensure that those valuables are protected from nursing home costs. However, the MAPT need be created at least five years before the long-term care is needed. For families with a higher net worth, separate trusts may need to be created--one for each spouse--with the benefit of doubling the estate tax exemption.

In addition, inheritance trusts are often added to plans to help keep assets in the family bloodline and protected from divorces, lawsuits, and creditors. This ensures that grandchildren actually receive an inheritance instead of in-laws or strangers.

Documents like a power of attorney and health-care proxy are also created so that legal affairs and medical decision can be accounted for in case of disability. Burial instructions are helpful as well to ensure that wishes are carried out exactly as desired. In addition, final instructions are an important--and oft forgotten--part of these plans. This information these instructions contained is directed to your friends and family and shares vital information (PIN numbers, access codes, etc.) and contact information to help them in case of disability.

Personal property is usually not included in a trust, so a memorandum of personal effects is created where a benefactor explains what items (jewelry, collectibles, etc.) are left to which beneficiary. By having these items listed separately an individual is free to change their mind without having to change a legal document.

Continue reading "Elder Law Estate Planning Documents Explained by New York Elder Law Attorney" »

Medicaid is a financial needs program available to elderly and disabled community members. The regulations applicable to Medicaid vary between states, because the program is a joint state and federal government effort. As anyone who has had to navigate the system for themselves or a loved one can attest, the program application and rules can be quite complex. In fact, an advice column published by New Jersey News this month on the topic began with one clear refrain: everyone should get help from an elder law attorney.

The Medicaid rules are detailed and confusing, and the challenge is made even more difficult by the fact that process is dependent on each individual situation. In other words, there is no simple answer that applies to everyone. Most area residents seek help understanding what they have to do to receive Medicaid benefits and what they can do to protect the family's assets.

An individual may apply for either Community Medicaid or Chronic Care Medicaid. In both cases, proper completion of the New York Medicaid application is accomplished when one has a full, confidential survey of their assets and recent asset transfers. This is useful to understand what property an applicant may be able to keep and what information must be submitted with the specific application.

Both Community and Chronic Care applications will require the reporting of various documents regarding the applicant's economic situation. Community based Medicaid applications must include at least 3 months of financial documents, proof of income, "common documents," and income tax filings. Chronic Care applications require even more information, as the Medicaid administrators will want to know details about the past five years. A thorough examination of an applicant's financial situation will be conducted by Medicaid investigators, and therefore proper assistance in these applications is often invaluable.

In general, because the program is primarily based on financial need, the government will expect many of an individual's own assets to be used to pay for the necessary long-term care before the public funds will be provided. However, certain planning strategies exist to protect some assets in these situations. In most cases the earlier than an individual plans for their long-term care needs, the more options will be available to them to receive the necessary aid while preserving assets built over a lifetime.

Continue reading "The Importance of Getting Help with Medicaid Applications" »

Helping residents ensure that they receive the long-term care that they need without depleting their assets is at the core of all New York elder law services. Some reports indicate that about two-thirds of Americans who reach the age of sixty five will need long-term care at some point. Most often this constitutes specialized aid in a nursing home or related assisted-living facility. The cost of this care is high. Without forethought and planning the financial toll of these services may cause area residents to lose property and assets that they built over a lifetime.

Fortunately, a professional in this area can share information on New York Medicaid strategies to protect one's estate. Usually the best options involve use of long-term care insurance or creation of a Medicaid Asset Protection Trust (MAPT). The insurance option is generally the most preferable, because it pays the cost of having caretakers come into a senior's home to provide necessary assistance. This allows residents to "age in place" without the need to leave their own dwelling.

Earlier this month the Daily Star reported on the immense benefit that comes with long-term care insurance for those who are capable of buying coverage. Not surprisingly, timing matters when it comes to this insurance. The younger one is when they begin the policy, the more affordable the premiums. A Wall Street Journal article recently explained how an average policy for a 45-year-old would be around one-third the yearly cost that a 65-year-old would pay for the same coverage.

As with all types of insurance, a variety of forms can be purchased depending on the needs and desires of the beneficiary. One must choose between 'indemnity" and "reimbursement" policies, the amount of coverage to take out, whether there will be an "elimination" period, and similar details. Many families may also chose to pair the insurance with the creation of a MAPT.

Unfortunately, depending on one's age and medical condition, some find it difficult to purchase this insurance in any form. In those cases, other options exist, like the MAPT or the "Gift and Loan" strategy for seniors on the nursing home doorstep.

Continue reading "Long-Term Care Insurance is Key Medicaid Strategy to Protect Assets & Allow Home Care" »

Second marriage planning always presents families with unique issues to consider regarding planning for their future. Those concerns are often made more urgent when the marriage occurs late in life. When local residents with children enter into one of these marriages it is particularly important to contact a New York elder law estate planning lawyer for assistance.

Last week the New York Times blog, The New Old Age discussed the myriad of issues that arise with late-life marriages. A common theme involves the amount of intermingling that spouses want between each of their separate assets and income during their lives, in case of divorce, and after death. For example, how much of one spouse's assets can be used to pay for the medical bills of the other spouse? Medicaid concerns must also be factored into the planning. Rules usually dictate that assets of both spouses are considered when one is attempting to qualify for Medicaid. An elder law attorney should be consulted so that these issues can be discussed and couples can strategize.

Late-life marriages may also have effects on Social Security benefits and taxes. The ability of one spouse to draw benefits based on the former spouse's earnings could be altered in these cases. Remarriage before the age of sixty usually cuts off that Social Security benefit. Couples must also decide whether to file taxes jointly or separately. The decision determines what tax bracket the couple falls into and may shift tax mistakes of one spouse onto the other.

Those in late-life marriages must give careful thought to how it will affect their property distribution upon their death. An older spouse who has specific plans about how to leave his or her estate must recognize the role that their new spouse may play in that decision. Surviving spouses almost always have the option of taking an elective share of the other's estate unless other arrangements are made beforehand. A prenuptial agreement may be important in those situations.

Continue reading "Plan Ahead for Late-Life Marriage Issues" »

Virtually all aging residents strive to create arrangements that will allow them to live at home and participate in their usual activities for as long as possible no matter what their specific healthcare needs. The ability to achieve this goal often hinges on the amount of planning that the individual has done beforehand to have the assets available to pay for the care. As we have frequently mentioned, long-term care insurance is one of the best ways of procuring this reality.

In addition, many area seniors are able to stay at home because they receive the assistance of family members. Tasks like house cleaning, grocery shopping, laundry, driving to doctor's appointments, and similar aid is commonly provided by children and other relatives. This aid is frequently given ad hoc, without any formal arrangement between the senior and their loved one. Yet, for many local families it may be beneficial to create a specific New York caregiver agreement to provide legal protections to the relationship.

Reuters published a story this week on the increasing popularity and usefulness of these formal legal relationships between parents and family caretakers. The arrangement is mutually beneficial. For the younger caregiver, the contract allows them to provide assistance to their loved one in situations where they otherwise might not be able to afford it. Additionally, the senior may use the personal service contract to protect their assets. For example, if at-home care is initially provided without payment then the senior may ultimately lose assets to pay for eventual nursing home care. But if the senior pays their loved one a reasonable sum for caretaking duties, then the assets would not complicate the senior's ability to qualify for Medicaid if a nursing home stay is eventually needed down the road.

Of course it is important for families to use the agreements properly. The care-giving relative must ensure that the taxes are paid on the money received, that the charges are reasonable for the services provided, and that documentation is proper.

Continue reading "Hire Your Children For Caretaking Duties" »

Yesterday, CBS Money Watch posted an article that echoes the calls made by all those who work in New York elder law: failure to account for long-term care costs can torpedo even the most well-crafted retirement plans. Efforts to save assets and create streams of income that can last for twenty, thirty, or more years of retirement is a difficult challenge that most residents spend their lives working toward. Yet, if that goal is achieved without accounting for the needs and risks of specialized long-term care, then it often only represents an illusory security that disappears once health challenges arise.

Even some area families that are careful in their New York estate planning fail to truly appreciate the necessity of combining the planning with real strategies to combat long-term care costs. As yesterday's story explains, perhaps the best reality check for many planners is learning of their friends who have watched their own parents retirement savings disappear because of off-the-charts healthcare costs. In many cases the money runs out completely and adult children are forced to scramble to cover the costs themselves.

One reason why many continue to fall short in their planning is that they fail to understand the specific types of long-term care expenses that they might face. While nursing home stays represent one end of the spectrum, a more preferable option to most is the use of at-home custodial services. Aid in food preparation, help with personal grooming, guidance with basic medical tasks, and other forms of assistance allow seniors to live in their own home and maximize their independence regardless of the physical challenges they may face. Yet, these services are generally not considered medical expenses, and so they are not covered by federal aid programs.

As our New York elder law attorneys continue to share with clients, the best strategies to protect one's family and assets from long-term care costs are preemptive. We believe that the best option is securing long-term care insurance (LTCI). This insurance protects both assets and income from long-term care expenses. In addition, it actually allows for the beneficiary to have at-home care provided--letting the individual maintain their regular lifestyle as closely as possible for as long as possible. In addition to LTCI, many families create a Medicaid Asset Protection Trust (MAPT) to help protect assets from future healthcare costs. Some adopt for a MAPT because they are unable to afford LTCI, while others create the MAPT in addition to the insurance.

Continue reading "Do Not Let Long-Term Care Destroy Your Retirement Planning" »

Last week we shared information about an article written by one of our New York elder law estate planning attorneys that discussed commonly used terminology in the field of elder law estate planning. By learning the meaning behind many of the common buzz words of the process, it is hoped that more community members will take the steps to conduct the necessary planning. The process is important not only so that wishes are carried out upon death but also to protect current property from the costs of long-term care.

Yesterday our New York elder law attorney, Bonnie Kraham, Esq., had another article published in the Times Herald-Record. In this piece she discussed the way that an elder law estate plan is crafted. She specifically highlighted the four major steps that occur upon a new client's visit.

First, it is vital that a lawyer know the unique dynamics of each family so that a plan can meet the specific needs of the individual and their loved ones. It is not a "one size fits all" assembly line approach. Information about an individual's age, heath, marriage history, relationships with family members, and similar details are important to specifically tailor each plan.

Next, documents must be reviewed to provide information to go into the plan and to determine if anything is out of date. A previous will, trust, power of attorney, health-care proxy, and other materials are analyzed to assess their continued benefit. Particularly important in the elder law context, is the need to review all material related to ways in which one may have prepared for long-term health care, including long-term care insurance documents.

Third, all assets much be reviewed. This would include all physical property as well as items like "qualified plans" such as IRA's and 401(k)'s. This step is helpful in determining whether estate taxes will be owed, whether probate will be required, if planning needs to be done for nursing home costs, and similar queries.

The final step involves the actual development of the elder law estate plan. The plan may include a variety of components. For example, an individual may be designated to make medical decisions. A trust could also be drafted with a specific trustee chosen. There remain many different parts of the plan depending on individual unique needs. Once completed, the plan should be reviewed every three years to account for changed circumstances and desires.

Continue reading "Ettinger Law Firm Attorney Explains Basic Components of Elder Law Estate Plan" »

Elder law estate planning is a unique legal niche that addresses two often interrelated sets of needs. Over the past few decades many more families have become exposed to "estate taxes" and have been made aware of the costs of the probate process. As a result, the creation of trusts to avoid probate has increased in popularity. Concurrently, many of those same individuals need assistance navigating the often complex processes connected to long-term healthcare. The effect of Medicaid rules and regulations, nursing home costs, and similar factors become a vital part of the decisions that all individuals make about their overall estate.

The interrelatedness of these two areas makes the understanding of both vital for effective planning. In other words, estate planning may be ineffective without accounting for elder law issues and vice versa.

Even with the growing popularity of these issues, many community members remain unfamiliar with the legal niche that combines both. Earlier this week a New York elder law estate planning lawyer from our firm, Bonnie Kraham, Esq., published a story in the Times Herald-Record that attempts to spread some basic information and terminology about elder law estate planning. A variety of terms are defined to take some of the mystery out of the process. Many of these are words that residents may have heard discussed but never knew exactly to what they referred.

For example, in legal parlance an "estate" consists of all of an individual's property and assets. It includes a wide range of things from homes, bank accounts, stocks, life insurance, and even personal items like jewelry. The "estate tax" is imposed upon the estate based on the value of all of those things. Many people remain surprised at the scope of items that are counted toward the tax which the survivors must pay.

Medicaid is the "needs based" medical insurance program that the state administers which often provides payment for services like nursing home care. The "Medicaid Asset Protection Trust" is a trust created while one is alive to protect them from the expense of long-term care and nursing home costs. In general, these trusts allow an individual to receive support through Medicaid without first wiping out their assets to pay for the costs.

Continue reading "Ettinger Law Firm Attorney Shares Terminology of Elder Law Estate Planning" »

Proposed changes to the Social Security system seem to make headlines every day. National lawmakers continue to keep all options on the table when it comes to sustaining the long-term fiscal health of the program which has a "75-year financing gap." However, all potential alterations to the Social Security system are particularly worrisome to local residents who need some reliability when making their retirement plans. The need for help in accounting for these changes and strategizing for the future is one common reason why local residents visit a New York retirement lawyer.

Even if no major changes to the system are made, some experts explain how future system beneficiaries will see effective cuts in what they will earn through Social Security. SmartMoney highlighted three of those effective cuts in a story published this weekend by Yahoo Finance.

First, the retirement age is being extended. Many are aware that under current law the age of retirement is set to jump to 67 years old for those born after 1960. This acts as an essential service cut, either by forcing fewer years of benefit or lowering the monthly payments to those who continue to retire at the previous age level of 65. This change alone will cause the "replacement rate" for median wage earners to reportedly drop from 41% to 36% for people who retire 20 years from now.

On top of that, Medicare premiums are automatically deducted from Social Security benefits. The increase in those premiums--from 5% now to 12% by 2030--will lower that replacement rate even further.

Finally, taxation issues surrounding Social Security benefits will also strike a blow to future retirees. All those above a certain threshold must pay taxes on either 50% or 85% of their Social Security benefits. While only 20% of recipients were taxed on those wages in 2002, that number is rising each year. The taxation thresholds are not indexed which means inflation and growth in average wages are pulling more into brackets where their benefits are taxed. The tax is an effective cut to those counting on the income to sustain their retirement.

Continue reading "Ways That Social Security Is Already Being Cut" »

As many community members get older they often need help with their financial affairs. The assistance usually comes in two forms. The first involves financial preparation for the future. In our area, these are things with which a New York elder law attorney can help. From Medicaid planning to assistance creating will and trusts, professionals in this area are capable of ensuring that seniors will have the care they need in the future and leave their assets as they wish.

Besides future planning some seniors also have need of basic day-to-day money management aid. Fortunately, as recently discussed in the Santa Cruz Sentinel, resources are also available to help seniors who need help with basic task like monthly bill paying. There are usually fees associated with these services, which connect money management specialists with seniors and the disabled.

Of course it is very important for elderly community members and their loved ones to have a deep trust with anyone with whom they give access to their financial affairs. Many specialists in day-to-day money management programs are bonded, fingerprinted, and subjected to background checks. Usually the specialists do not sign checks or have access to client bank accounts. As an added benefit those giving assistance are also capable of ensuring that seniors do not fall victim to scams or other forms of elder financial abuse.

The son of one individual who uses the money management service explained the importance of having a good relationship with those who assist seniors with finances. He noted, "the most important element of this relationship is trust. [...] It's really hard to find someone that can step into the most intimate aspect of your life--the financial aspect--without having any issue of reluctance or trust. It takes a huge responsibility off my shoulders just knowing the basic responsibilities are being covered."

Continue reading "Many Options Exist to Help Seniors with Money Management" »

Previously we noted how this year marks the beginning of a tide of Baby Boomers who will reach the age of 65 and begin to retire. A new report by the National Association of Area Agencies on Aging entitled "The Maturing of America--Communities Moving Forward for an Aging Population" is raising red flags about most communities' ability to meet the future needs of the country's aging citizens. Earlier we explained how local Baby Boomers were well served by meeting with a New York elder law estate planning attorney to prepare for their future, especially with the "Great Recession" causing many residents to question their financial ability to retire. This latest report similarly indicates that many local agencies need to do much more long-term planning to ensure that the programs and services that they provide are available to seniors when they need them.

Various services targeting the needs of the aging population are being scaled back in some areas, like home care service, educational and volunteer opportunities, housing assistance, and similar programs. The report reveals that the tough economic times have meant that it is all most communities can do to "hold the line" on these services, meaning that little planning and saving is being conducted for the surge of Americans that may soon overwhelm these agencies. The authors explain that aging agencies "have not been able to move forward to the degree needed to address the nation's current 'age wave.'"

Yet the news was not all negative, as some progress was seen in areas important to those involved in senior care and elder law. Many more emergency responders now have specialized training in dealing with older adults. There has been a surge in in-home support services as well as advances in elder workforce education. While encouraging, even these expanded services are not yet to the point capable of handling the millions more seniors who may rely on them as Baby Boomers begin to retire.

Continue reading "New Report Finds U.S. Communities Unprepared to Meet Needs of Aging Population" »

The onset of medical conditions that affect brain function like dementia or Alzheimer's often act as triggers for local residents and their families to visit a New York elder law attorney. As most are aware, these illnesses affect millions of individuals across the country. The brain conditions result in memory-loss, reduction in learning ability, and reasoning problems. Obviously these illnesses pose a serious threat to an individual's ability to properly manage their affairs, and caregivers are often required to help with day-to-day activities.

While conditions like dementia are rarely found in anyone less than 65 years of age, there are a few lesser known illnesses that affect brain function and occur in younger individuals. Last month the New York Times profiled one of those forms of dementia, known as primary progressive aphasia (P.P.A.). The syndrome often strikes those in their 50s. Its rarity and the age at which it occurs often cause doctors to misdiagnose the condition as depression, anxiety, or even a stroke.

Unlike Alzheimer's or dementia, P.P.A. does not initially affect memory but instead affects an individual's communication abilities. An expert on the disease explains how P.P.A. damages the part of the brain that is used in word-finding, object naming, syntax, spelling, and word comprehension.

The wife of one 55-year old sufferer from P.P.A. explains her husband's impairments, noting that "he can no longer punch in the numbers to operate the garage door or the microwave or the remote for the TV. He might open the car window, then not know how to close it."

While communication impairment is the primary problem caused by P.P.A., eventually patients suffer other deficits, like memory-loss, various cognitive abnormalities, and even motor problems. It is for those reasons that the article concluded by recommending that those who may be suffering from P.P.A. visit an elder law attorney to ensure that their family's financial affairs are in order.

Continue reading "Primary Progressive Aphasia Remains Little-Known Form of Dementia" »