Articles Posted in Elder law estate planning

The Trump Administration recently unveiled a new plan aimed at curbing drug prices for expensive medicines administered to patients under Medicare Part B and took aim at entities the President claims are responsible for Americans paying more for prescription drugs than citizens in other countries. The 44-page blueprint released by the Department of Health and Human Services is asking for feedback on the plan before it plans to propose it more formally in early 2019 and eventually take effect the following year.

While the proposal would not extend to most prescription drugs that Americans fill at their local pharmacy under Medicare Part D, the plan would instead focus on some of the most high-cost medications administered by physicians, such as those used to treat cancers, autoimmune diseases, and late-stage renal failure. According to government reporting, the Centers for Medicare and Medicaid Studies (CMS) spent $26 billion on Part B drugs in 2015, or about 3 percent of Medicare’s total $647.6 billion budget that year.

These types of drugs, often called “biologics” because they are made from living organisms, are typically manufactured by only one pharmaceutical company which can leave little if any competition to drive prices down. To accomplish the goal of reducing costs the administration has suggested tying the price of some drugs under Medicare Part B to those paid in other countries like France and Germany.

Caring for a child with a disability creates challenges beyond our lifetime and often takes resources beyond what federal safety net programs can offer in order for our loved one to live the most comfortable and dignified life possible. While rules governing these federal programs place certain income restrictions on disabled persons to qualify, there are sanctioned trusts allowed specifically for special needs planning that allow for first party and third party benefits to supplement federal assistance.

In 2010, Congress passed the Achieving a Better Life Experience (ABLE) Act allowing beneficiaries to have up to $100,000 in a 529 special needs trust and retain Social Security Insurance benefits. Beneficiaries can also retain Medicaid coverage so long as the trust does not exceed the amount for a 529 college savings plan. The ABLE Act allows these trusts to be created so long as the beneficiary’s disability is established prior to the age of 26-years old.

Disabled persons can also create and fund their own first party special needs trusts through a (d)(4)(C). Funds for first party special needs trusts often come from sources such as a personal injury settlement, workers’ compensation award, or an inheritance left directly to the beneficiary. An amount equal to the annual federal gift tax exclusion (currently $15,000) can be deposited annually in the account while still maintaining the beneficiary’s eligibility for Medicaid and Supplemental Security Income

Figuring out the best time to claim Social Security benefits is an important part of retirement planning that can have long lasting impacts on the type of lifestyle individuals and their spouses can expect to enjoy in their Gold Years. Depending on when individuals decide to take their Social Security benefits, from the ages of 62 to 67, it can mean the difference of hundreds of dollars per month to thousands of dollars of the course of a lifetime.

While the conventional wisdom is to wait as long as possible to claim benefits, and hopefully reach maximum payouts, for many beneficiaries there comes a time known as the “break even point” when the amount of benefits claimed would be essentially the same regardless of the amount received per month. This happens because the program is designed to give individuals more or less the same payout over their projected lifetimes, known as “actuarial neutrality.”

Determining one’s break even point is a fairly straightforward process but should take into account certain other factors that may artificially inflate any projected payout, namely excluding cost of living adjustments. Including projected cost of living adjustments will only create artificially high numbers that may not end up being actual benefits received.

Most of us would not want to be anywhere else but in our homes as we grow old and enjoy our Golden Years. However, as we age the daily activities and chores we took for granted can become greater burdens or turn into situations where we may suffer serious injury in our own home. Fortunately, it does not have to be like this and there are a number of different modifications that can be made to improve the safety and comfort of the places we live.

While most of the homes in the country were not designed with the foresight of being accommodating to the physical and cognitive challenges many seniors live with and overcome every single day. Stairs, hallways, and other physical barriers can present unique challenges to older Americans but with a few universal modifications seniors can live safely and comfortably in their homes.

One revolutionary thing seniors can take advantage of right away is incorporating smart home products to help control things like the thermostat, turnings lights and televisions on and off, and locking windows and doors. Another great advantage of adopting smart technology throughout the home is being able to monitor what is going on and report to caretakers or relatives any issues with the house.

No one wishes to end up in a nursing home or require assisted living care but for many Americans, it is a reality that will come true and needs to be planned for. When we do enter a nursing home or have our loved ones placed there, we expect the facility will look after residents and provide the appropriate care to ensure elders live their Golden Years in comfort and dignity.

However, because nursing homes and other skilled care facilities are for-profit business that look to maximize their income and payments, particular from federal entitlement programs like Medicaid, they sometimes make decisions that are not in the resident’s best interest. One of the most drastic measures a nursing home can take is evicting a resident and will often employ a variety of measures to see the process through.

Often times, nursing homes will justify an eviction by saying the facility simply cannot meet the resident’s needs. Excuses for why a nursing home cannot take care of a resident include that individual having dementia, being combative, or is non-weight bearing and needs assistance for even the simplest tasks. Other times, nursing homes will reevaluate residents after the facility converts to another type of assisted living facility and focuses only on taking care of patients with different medical and lifestyle needs.

Qualified plans  such as IRAs, 401(k)s, 403(b)s and other deferred compensation are excellent ways to help reach your estate planning goals and ensure your wealth is not depleted by excessive taxes and assisted living costs. IRAs in particular help achieve both of these goals because they are not taxed and if utilized properly, will not count against you when applying for Medicaid to pay for nursing home care.

For estate planning purposes, qualified plans are considered those which individuals make contributions to while working and begin making at least the required minimum distribution (RMD) at 70-years old. IRAs and qualified plans help encourage people to save early and often for their retirements by offering these tax-free incentives and should be taken full advantage of to ensure we can live our our retirement in comfort.

If an individual is already living in a nursing home and applying for Medicaid, the principal amount of the IRA is protected when calculating one’s assets to determine whether or not he or she qualifies for Medicaid as long as that person is taking the RMD. For a Roth IRA, it is not necessary to take the RMD if distributions are being taken.

When planning our estate, most of us do so with the intent of making sure our family and close friends are taken care of after we pass away and for some of us, that can include our companion animals many consider to be as close as family. Fortunately, New York trust and estate laws allows taking care of our pets to be more than an afterthought and gives individuals the opportunity to proactively plan for the even that we may not be around to take care of the animals we love so much.

In New York, the legal mechanism that allows pet owners to posthumously care for their companion animals can be found in the Uniform Probate Code § 2-907. Honorary Trusts; Trusts for Pets. New York is one of over 20-states that allow these special kinds of trusts to allow for the care of pets and other domesticated animals. Depending on the type of animals to be cared for, these arrangements may be as simple as bequeathing animals in a will and leaving a small amount of money or as complex as placing an entire farm into a trust and allowing beneficiaries to name caretakers.

Honorary trusts can be created for a whole host of situations with the basic goal being to have money put away to ensure maintenance of some property. This can include keeping headstones at cemeteries in good condition, preserving artwork, and providing for food and medical care of pets. It is not necessary to have a beneficiary named but it is also important to note that these types of trust can only last for 21-years, which may complicate care for long-lived animals.

Having prescription drug coverage is extremely important to ensuring we get necessary, life-saving medications while also making sure we do not go bankrupt on impoverished it the process. However, using prescription drug insurance to buy medications does not always yield the best price for consumers and pharmacists know this but cannot always inform patients about the cost savings because they are contractually bound in one way or another to remain silent.

Congress recently passed a pair of bipartisan bills aimed at helping consumers get the best price on prescription drugs by prohibiting contractual obligations that require pharmacists to stay silent about how consumers may be able to save money. If signed into law, the the Patient Right to Know Drug Prices Act (S.2554) and the Know the Lowest Price Act (S. 2553) would remove barriers placed on pharmacists and allow them to volunteer information to help patients save money on vital prescriptions.

The Patient Right to Know Drug Prices Act (S.2554) would bar insurers and Pharmacy Benefit Managers (PBMs) from placing limits on a pharmacy’s ability to tell consumers when there is a difference between how much a patient would pay for a prescription with insurance compared to without it. The bill would apply to insurance plans offered through exchanges on the Affordable Care Act (ACA) and by those offered by private companies.

Elder abuse occurs all too often and comes in many forms. While it may seem unfathomable, abusers can be the ones we rely on the most to take care of our beloved elders during the time in their adult lives in which they may be the most vulnerable. Although nothing can be done to undo the harm caused by elder abuse, family members can look out for the signs of its effects to immediately recognize and end the abuse.

According to statistics from 2011, over 260,000 older adults in New York State suffered from some type of elder abuse in just that year alone. In 2016, the state Office of Child and Family Services released a study that estimated financial exploitation of elders in New York costs a total of $1.5 billion a year. Another study looking into the issue estimated the national cost of elder abuse and exploitation at $36.5 billion per year.

For whatever reason, only an estimated one in 22 instances of elder abuse is reported. Many experts believe that one main reason may be this as many as nine in 10 times, that abuse is committed by family member and the victim may not want any legal or familial trouble for someone they otherwise love and care for. No matter the situation, family members need to convey to their elders that revealing the abuse is the way to end it.

After taking the time to plan and execute a will, many people wonder what to do with the actual document to ensure it stays safe and can be found by the executor when the time comes. Without the original, executed copy of the last will and testament, the executor may be unable to pass the estate through probate and the court will consider the estate to be in intestacy.

Some of the most common places people keep their wills can include the office of the attorney who may have helped draft the will and advise the client, a safe deposit box in a bank, or in a fireproof safe at the individual’s home. Each of these scenarios have strengths and weaknesses and what may be the right fit for one person may not be the best for another. In any case, the executor’s access to the original copy of the last will and testament is crucial to the estate passing through probate.

Another less well known option is the register the original copy of the will with the appropriate Surrogate’s Court while the testator is still alive. Filing the will with your local probate court is a good plan in case the executor to your estate cannot find the original copy of the will or if you believe the document may be subject to tampering.

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