Articles Posted in Elder Law

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.

Creating a trust is one of several ways folks can pass on the fruits of their hard work to family, friends, and business partners and has the added bonus of being able to avoid the time consuming and costly process of passing those assets of the estate through probate. With a trust, the creator names a trustee, beneficiaries, and how the trustees are to manage the trust. It is important to know that there are different types of trust, which can severely limit the creator’s control over the trust while he or she is alive.

A revocable trust is just that, one that can be altered or done away with during the lifetime of the creator for whatever reason he or she sees fit. Common reasons for changing a revocable trust can be related to life changes like getting married, divorced, having children, or financial changes. Many times, grantors create revocable trusts because they are malleable but some estate planning choices require the grantor create an irrevocable trust that does not allow he or she to make alterations.

When a grantor creates an irrevocable trust, he or she transfers assets to the trust and effectively lose ownership or control over them. One of the main benefits of this type of trust is to shield assets from creditors since the assets and any income associated with them no longer belong to the debtor. Irrevocable trusts can also be useful to spend down assets to qualify for Medicaid which is granted only to those with small amounts of assets.

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.

Medicare helps seniors pay for a whole host of mental health treatment services, including both inpatient and outpatient treatment services to help diagnose and treat mental health conditions. Depending on the type of care needed, beneficiaries may incur some out of pocket costs, including deductibles, and are subject to some limitations on the length of treatment you can receive at in patient centers.

Medicare Part A will cover inpatient mental health services at either a psychiatric hospital or a general hospital, depending on the type of care determined by the primary care doctor. Medicare will cover up to 190-days of treatment at a psychiatric hospital during a person’s lifetime and may cover additional inpatient care at a general hospital if necessary.

When receiving inpatient care with Medicare Part A, beneficiaries will need to pay an out of pocket deductible before they enter the facility. As of 2018, that cost is estimated to be $1,340. After paying the deductible, Medicare Part A will pay the first 60-days of inpatient treatment in full. The next 30-days require the patient pay a daily co-insurance of $355 and the remaining 90-days require a daily co-insurance of $670.

Creating a living trust is one common way individuals plan their estates and keep valuable assets like homes and other real estate out of the costly and timely probate process. For individuals own their home outright, a living or revocable trust is an easy way to instantly pass on a home but if there a mortgage or another lien on the property there may be a “due on sale” clause that requires the debtor to pay the lender immediately.

Typically, a due on sale clause is understood that the debtor must pay the bank the balance of a mortgage when the home is sold or otherwise transferred. While placing a home into a living trust is technically transferring the home from one owner to another, an important piece of legislation called the Garn-St. Germain Act allows individuals to transfer a personal residence to make “a transfer into an inter vivos (also known as “living”) trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property.”

The exemption for due on sale clauses for these transfer rules allows the property to be placed into a revocable living trust so long as the loan is on residential properties containing less than five dwelling units. For New Yorkers, this is important because it can include homes such as a duplex, triplex, fourplex or even a coop and not just single family houses. So long as there is no change in occupancy to the estate, that is the person creating the trust stays in the home, the due on sale clause can not be enforced.

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.

The Centers for Medicare and Medicaid Studies recently announced it has extended its grace period to remove or reduce financial penalties for those late to switching their insurance from plans on the Affordable Care Act (ACA) to Medicare. As a result of moving the deadline, seniors and those on disability now have until September 30, 2018 to switch over from their ACA marketplace insurance plans to Medicare without having to pay increased Medicare premiums or reimburse the federal government for ACA subsidies.

For most Americans, Medicare eligibility begins at age 65 and are automatically signed up if already receiving Social Security benefits but not if the individual is already receiving health insurance through their job or spouse’s employment. If neither of these scenarios apply, individuals need to enroll in  Medicare within six-months (three-months before or after) turning 65-years old.

Failing to enroll in Medicare in a timely manner can lead to very expensive penalties including increases to Medicare Part B premiums as much as 10 percent for each full 12-month period the individual should have been enrolled. The Medicare Rights Center (MRC), a nonprofit consumer service organization that works to ensure access to affordable health care for older adults, estimates that if someone turned 65 in 2010 and delayed signing up for Medicare until 2018, premiums would be $227, which is 70 percent higher than the base Part B premium of $134.

Starting later this year, the federal government will begin penalizing nursing homes accepting tax dollars for hospitalizations that regulators believe are preventable and end up costing the patient and health care system in the long run. The new rules are the other half of policies instituted by the Center for Medicare and Medicaid Studies (CMS) aimed at reducing patient readmissions by either rewarding or penalizing hospitals and now nursing homes based on their rates of Medicare rehospitalization rates.

According to the U.S. Department of Health and Human Services, one in four long term nursing home patients are hospitalized each year and these hospitalization rates are rising. One in five Medicare nursing home patients “boomerang” back into the hospital within 30-days of being released. The Department of Health and Human Services believes many of these hospitalizations are preventable and are costly to Medicare and, to a lesser extent, Medicaid.

Nursing home residents are especially vulnerable to the risks that accompany repeat hospitalizations and transfers, including medication errors and hospital-acquired infections. This revolving door of patients returning to hospitals soon after discharge often occurs because of a lack of communication between treating physicians at hospitals and healthcare providers at the nursing homes once patient return.

Ranking Democratic member of the House Energy and Commerce Committee Frank Pallone, Jr. of New Jersey recently introduced a new proposal aimed at tackling the rising costs of long term health care insurance to give seniors a better life. Under the current system, Medicare only covers very limited long-term care and support for seniors until a senior eventually qualifies for the Medicaid program after they have depleted all of their financial resources.

If adopted, the The Medicare Long-Term Care Services and Supports Act would enact multiple measures to help seniors get the care they need without depleting their finances. Among other things, The Act would includes incentives for people to seek care at home and give much needed relief to overburdened family caregivers by compensating these individuals for lost income other retirement benefits, and career opportunities if they have to cut back on work hours or leave the workforce.

The Act would establish a standard cash benefit within Medicare for anyone who is eligible for Medicare and those under the age of 65-years old who meet certain disability thresholds and begin after a two-year waiting period that functions as a deductible. The proposed legislation would allow individuals to use their self-directed benefits towards all long-term services and supports, including nursing facility care, adult daycare programs, home health aide services, personal care services, transportation, and assistance provided by a family caregiver.

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