CARES Act - Time's Up!

Catherine E. Sears
Associate Attorney

Believe it or not, we have been living in a COVID-19 world for more than a year. For some, this is simply a depressing thought, as they prepare to celebrate a second round of birthdays and holidays amid the pandemic. For others, though, this anniversary could have very significant impact on their income and health insurance.

Pursuant to the provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), recipients of means-tested government benefits, including Supplemental Security Income (SSI) and Medicaid, have one (1) year to spend the money they received as “economic impact payments,” or “stimulus checks.” After a year has elapsed, any money remaining from the stimulus payment will be treated as a countable resource, which could result in the recipient having too many resources to continue qualifying for government benefits. To learn more about this issue, please click here..

The first installment of payments began being issued in April 2020, which means that this one-year deadline is quickly approaching. SSI and Medicaid recipients should, therefore, be preparing to provide proof to their caseworkers that the money which they received last spring is no longer in their accounts. 

I suspect this will be easier said than done. Bear in mind, the federal government is now on its third round of distributing stimulus payments. Seemingly, the one-year deadline applies to each round of payments (so, if you received a payment in April 2020, the deadline for spending that payment is April 2021; if you received a second payment in January 2021, the deadline for spending that payment is January 2022, etc.). 

Let’s say, for example, that a Medicaid recipient has an excess of the allowable $2,000 in her bank account in May 2021. Rather than simply saying that she is now over-resourced and, consequently, ineligible to continue receiving Medicaid benefits, it would seem that further analysis should be done to determine whether any of these excess funds can be dated back to April 2020, or whether they are due to the second or third round of stimulus payments. If there are still funds remaining from the April 2020 payment, then, theoretically, it would seem that she would be able to re-qualify for Medicaid upon spending down just those funds, even if her bank account remains in excess of the $2,000 limit due to the more recent stimulus payments. Presumably, she would need to spend the excess funds on allowable, non-penalizing expenditures in accordance with the regular Medicaid rules, despite the fact that these stimulus payments are not contemplated anywhere in the Medicaid Manual. 

With so much uncertainty, it is crucial that those receiving means-tested government benefits do everything they can to maximize their likelihood of receiving a favorable outcome when their caseworker reviews their file. This is a moving target, and we truly do not know what the caseworkers will do. However, seeking professional assistance in spending the economic impact payments (and in documenting how you spent them) before any of the one-year deadlines occur can increase the likelihood that your Medicaid or SSI redetermination will go smoothly despite all these unprecedented factors. 

Please contact our office to schedule a long-term care consultation if we can be of any assistance as you navigate this complex area of the law.

Finding Joy Caring For Parents During the COVID-19 Outbreak

Teresa Clemons
Office Manager

My parents are 86 years old, live in a wonderful community here in Williamsburg and are still quite active.  When they moved here over 10 years ago, the plan was that I would be near by to take care of them as needed, and when they could no longer do for themselves.  Never in my wildest imagination did I think that I would be taking care of them because of a pandemic that has somewhat paralyzed the Nation and has caused mandatory quarantines. 

With both of them being in the “high risk” population, I do everything I can to eliminate any possible exposure to the monster called COVID-19.  I am the only one allowed in the house. And when I do, I where a mask, gloves and disinfect as I go.   We have created a path from the driveway through the garage and into the kitchen.  They are both on the other side of the room.  We chat as I put away the groceries, wipe down counters that have been exposed to the bags and then sterilize...me.  My mom will text me with things she needs as she thinks of them. I try to limit to one trip a week to the grocery store, again to limit exposure. Sometimes I am not sure what she is going to do with some of the items. But I don’t ask.  I assume like the rest of us she is getting bored and maybe going to create a new dish. She is an amazing cook.

After a modem failure at their house, I had to step up and become an internet technician, which is so about my pay grade. I had tried for days to call Cox Communications but they were not taking calls because of the mass influx of calls, totally understandable.  After four days, and countless hours and text messages with my brothers, who do not live locally, trying to explain what to do still no wireless internet. But did get the phone up and working. I thought that was the most important, a way to communicate. Of course, they have cell phones but do not always have with them.  I explained to my father that there a lot of people with emergencies and thank God his was not one of them. They have a hard-wired computer so he did have internet access just not wireless.  He agreed but his face still said, I am annoyed. I couldn’t believe he was being like about his laptop. Come to find out, it was more than that, he couldn’t watch Netflix. Which when you are locked in the house, I guess is a needed outlet.  Finally, was able to schedule a service call with Cox. Their new protocol was the technicians were not allowed to enter the home but could come into the garage.  Perfect, they would call me when they were on the way and I would meet them at the house so my parents need not get involved. I waited in the driveway. Not often does it happen but the tech was a little early. As we walked up to garage there sits my father in the corner, 12 feet away waiting to oversee the repair, as he always does with any work being done on the house.  I realized then, after I scolded him for coming out of the house, that he felt like I was treating him as if he could not longer do things for himself versus assisting him as to keep him away from any possible contamination.  

Even though the time to help came sooner than later, I am so glad that I am here to help them though this unprecedented time and….always will be.  Love you Mom and Dad.

CARES Act Recovery Rebate’s Interaction with Means-Tested Government Benefit Programs

Catherine E. Sears

Congress recently passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which is intended to alleviate some of the economic hardship which the outbreak of COVID-19 has inflicted on the nation. This Act provides many examples of relief, not only to individuals, but also to businesses and business-owners.

For many individuals, the most widely-anticipated benefit is the “recovery rebate,” or a maximum of $1,200.00 for a single taxpayer or $2,400.00 for married taxpayers who file jointly. This stimulus check is intended to help people during this difficult economic time, especially those who may have lost their job. However, as well-intentioned as this recovery rebate is, it could pose a difficulty to those who, prior to the COVID-19 outbreak, had already been receiving means-tested government benefits, particularly in the form of Supplemental Security Income (SSI) and/or Medicaid.

These means-tested benefits have very stringent rules regarding income and assets. For example, an unmarried SSI recipient cannot earn more than $783.00 in countable income each month in order to maintain his SSI benefits. The same unmarried SSI recipient must also have less than $2,000.00 in countable resources, or accumulated assets, in order to maintain the monthly benefit. Therefore, though it may sound wonderful on paper, receiving an unanticipated $1,200.00 check could have a significant negative impact on this SSI recipient. Bear in mind as well that most SSI recipients are medically unable to work – hence, their reliance on this program in the first place. Therefore, the recovery rebate check would truly be an additional source of income which could disqualify the recipient from his SSI payments, and not merely be a replacement for lost wages which had already been factored into the recipient’s income for SSI qualification purposes.

It is also important to note that many SSI recipients also rely on Medicaid as their health insurance, and a disqualification from SSI benefits frequently also results in a disqualification from Medicaid. Once a former-SSI/Medicaid recipient no longer has the excess income or has spent-down the excess resources, she may re-qualify for SSI and Medicaid. However, the re-qualification process involves a copious amount of bureaucratic red tape and may take several months, during which time the former recipient is likely not receiving any form of monthly income or health insurance. Additionally, if the recipient’s caseworker did not notice the excess income/resources in a timely fashion, the recipient may find herself required to pay back SSI payments which she had previously received (again, while not currently commanding an income).

There are some safeguards in place to ensure that the CARES Act’s recovery rebate does not put the recipients of means-tested government benefits into the disastrous situation outlined above. For example, theoretically, the recovery rebate will not disqualify recipients of means-tested benefits for twelve (12) months after receiving the rebate. However, if any money in excess of the resource limits remains at that time, then we know that the recipient would definitely become disqualified from benefits. Furthermore, even if the recipient does spend-down the rebate money within the 12-month period, the caseworkers who process SSI/Medicaid applications and re-determinations have never dealt with this type of widespread situation before, and will therefore be navigating an uncharted territory, likely with very limited guidance to help them. This increases the risk that the CARES Act’s exception to the general SSI/Medicaid eligibility rules which exists on paper may not uniformly be implemented in practice, resulting in unnecessary headaches and economic difficulty for the recipients.

If you or anyone you know receives SSI or Medicaid benefits, consider seeing an attorney with experience in special needs planning to ensure that you have a plan in place for your recovery rebate and can continue to maintain your government benefits seamlessly after this health crisis is over.

What Are Some of Your Tolerations?

Helena S. Mock, Esq.

Tolerations are the little annoyances we put up with on a daily basis. They are the things in our work and home lives, relationships, health, and finances that we simply accept because it would be too difficult, or too painful, or just take too long to resolve. Or so we think. And they really aren’t that bad, are they? After all, we’ve been living with many of them for years, and we’re still doing okay

My tolerations are not keeping me from being successful; they are not keeping me from being happy; and they are not keeping me from living my life to the fullest. Or are they?

Studies show that tolerations drain energy, but we don’t usually notice it because we are so used to living with them. Some examples of tolerations include: 

•My desk is so full of work that needs to be done, I feel overwhelmed;

•I haven’t been to the dentist in 3 years;

•My husband has been telling me he will clean out the garage for months;

•I never seem to get enough sleep;

•The kitchen faucet drips incessantly;

•My teenager is constantly staying out past curfew and doesn’t call to say he’ll be late;

•I really need to set aside some time for exercise;

•I hate spending weekends cleaning my house; I really need to hire someone to help me;

•Employee Y is creating office drama and disrupting the work environment. 

These are just a few examples, some of which were on my own tolerations list for quite some time before I finally tackled them. And I know you probably have quite a few on your list as well, some of which are not even your responsibility; or rather you don’t see them as your responsibility; and the fact that someone else hasn’t done them is just plain annoying. For example, I drive into that garage every day after work and just cringe at the mess. Why doesn’t he clean it, I ask myself every day… do I have to do everything myself? Now you don’t really mean that; you are just frustrated because you keep seeing the mess… or hearing the dripping faucet… or not getting that

phone call from your teenager. Sometimes we think we are dealing with things best by ignoring them, but they are still there, annoying you a little more every day, and getting harder and harder to ignore. 

Note that none of these things are particularly difficult to deal with. Yes, some will take more effort, or time, on your part than others, but in most cases, the tolerations we live with are relatively minor. Start by identifying the items on your list that would take the least amount of time to resolve and work up to the biggies. For example, let’s take the dentist off my list. All I have to do to resolve that one is to make (and then keep) an appointment with my dentist. So why don’t I do it? I start by asking myself why I haven’t been to the dentist in 3 years. That’s the first question. Step 1 – Identify the “Why”. 

Once you are honest with yourself about the why, the next step is to identify what’s standing in your way of resolving this issue now. Maybe my dentist retired and I just don’t know who I should see. Or, maybe the last time I had a checkup, the dentist told me I would be needing a root canal soon, and I definitely don’t want to do that. Is it a matter of taking the time? Is this something I need help with from someone else? Does it require an uncomfortable conversation with someone? Whatever the reason, stopping to identify, and then acknowledge, what’s holding you back, will help you move forward. Step 2 – Identify and acknowledge what’s standing in your way of getting this done? Once you have answered this question, you are one step closer to finally striking it off your list. 

The next step is to determine what you need to do or who you need to talk to in order to resolve the situation. Do I need to ask friends about who they would recommend as a new dentist, or do I simply need to make the call and schedule the appointment? Again, we are just determining what needs to be done here; we are not yet taking action. This step is important if the project requires some planning first. For example, if I need to have an uncomfortable conversation with someone, this step in the process will allow me to think about the best way to approach the subject with the other person. Obviously, with the dentist example, there’s nothing to do here except decide which dentist to call. That may take some time for research, checking patient reviews, talking to friends, etc. But it’s certainly not as involved as deciding how best to discuss the garage situation with my husband or how to approach an employee who is not working up to expectations. These situations take more time and more consideration to decide the best approach. Step 3 – Identify what needs to be done to resolve the situation? 

The tolerations that involve other people can be the most frustrating and the most difficult to resolve because marking them off your list requires you to confer with someone else. This is why Step 3 is so important. Step 3 gives you time to analyze the situation and determine the best approach. Without Step 3, you may wind up simply getting angry and blowing up, which creates other problems. Taking time to analyze the situation and prepare for a potentially uncomfortable conversation will likely produce a better result than simply exploding from frustration. This step also gives you time to consider the situation from the other person’s perspective. Why isn’t he stepping up to clean the garage? Doesn’t it bother him as much as it bothers me? Maybe it’s just as overwhelming to him as all those files on my desk are to me. Once I can calmly look at a situation from another’s perspective, suddenly it doesn’t seem like such a big deal anymore. 

The final step is to move forward. It doesn’t do any good to go through steps 1, 2, and 3 above if I still never make the call to schedule the appointment. You might think this step is the hardest part because it requires you to take action. But once you have gone through the first 3 steps, this part really isn’t as bad as you imagined. Sometimes there is a lot involved in taking action. Scheduling an appointment with my dentist may only take a few minutes, but sitting down with an employee to address job performance will definitely take more time. But after you have gone through the first 3 steps, you are on a roll and it’s not that difficult to just roll into Step 4. You can see the light at the end of the tunnel by now. One more step and you get to cross that annoying toleration off your list. You’ve come to far to stop now. Step 4 – just do it! 

A toleration generally refers to the conditional acceptance of a situation, and we all have them. But living with a lot of tolerations can zap our energy and negatively impact our well-being in a variety of ways. Take the opportunity now to cross just one toleration off your list. I guarantee it will feel so good, you will want to tackle another, and then another. Watch how your mood and energy improve as your list of tolerations gets smaller and smaller.

Scams and the COVID-19 Epidemic

Leslie Salvo
Paralegal

As we attempt to adapt to our “brave new world” with COVID-19 at the center of our attention, let’s not forget to be vigilant for those individuals who are always ready to take advantage of a bad situation. Regrettably, there are people using this pandemic to line their pockets with your money. Here are a few scams to be aware of:

(1)  Receiving a call, email or text message that there is a vaccination available for COVID-19. At this time, there is no vaccination available at any cost. You should also avoid responding to calls regarding home test kits. Hopefully these will be available soon, but for now, beware.

(2)  Services offering to clean your home but requesting prepayment for the service. Also be wary of online retailers selling cleaning products claiming to kill the virus. 

(3)  Charity scams offering assistance to those affected by the virus. If you want to contribute to a charity, please contact the “tried and true” charitable agencies - The Red Cross, The Salvation Army, or even your local United Way chapter. 

(4)  If someone offers to do your grocery shopping for you, that’s wonderful! But if you’re going to give someone money upfront to do so, make sure you know the person. There may be some honest strangers out there offering to help, but this is a situation ripe for taking advantage of your vulnerability.

Please take care of yourself and your community during this difficult time.

Banks vs. Lawyers: The Best Way to Access a Loved One’s Bank Account

Catherine E. Sears, Esq.

Frequently, clients tell me that they have certain assets (often, a checking or savings account) titled jointly with one or more of their children.

“This way,” they tell me, “my daughter can step in and pay my bills if something happens to me.”

Nearly always, when I ask whose idea this was, the client informs me that an employee at the bank said that this was the best way to allow family members to help in case of a crisis. However, at the risk of irritating any bankers reading this blog, I can say with complete certainty that naming someone as a co-owner is NOT the best way to give another person access to your finances. Instead, you should name your child as your agent under a Durable Power of Attorney.

When a bank account is jointly owned, legally, that bank account belongs to both of the co-owners. This means that your child can do whatever he or she wants with that money, and is not bound by any legal obligation to use the money in your best interests. Even if you trust that your child would not go on a shopping spree with your money, your account can still be subject to your child’s creditors if, for example, your child gets into a fender-bender and gets sued, or if he goes through a divorce. Additionally, co-ownership often creates a “right of survivorship.” This means that, upon your death, the entire bank account will belong to your co-owner child, regardless of the provisions in your will or revocable living trust which may state that your assets are to be divided equally among all of your children.

I recently had a client who had named her adult child as co-owner of her checking account many years ago. In fact, this happened so long ago that the bank no longer had records showing that the account had, at one time, been titled in my client’s sole name. Sometime after adding her child as co-owner, the client’s child developed a disability, could no longer work, and began receiving Supplemental Security Income (SSI) and Medicaid. Both of these programs are means-tested, which means that the child could only receive these benefit programs by meeting certain financial eligibility requirements. The child had been receiving these benefits for several years, and these programs were the child’s sole source of income and health insurance coverage.

Recently, though, the Social Security Administration learned that the child was co-owner on my client’s checking account. Though my client was by no means wealthy, she had money in the account in excess of the low limits which are required to maintain SSI and Medicaid coverage. The child’s benefits stopped, which was problematic because the child had a home-health aide, who had been paid through the Medicaid coverage, and this left my frail, eighty-something year-old client in charge of providing very physically-demanding care to the child. Additionally, the child received word that he owed tens of thousands of dollars to the Social Security Administration because, due to this co-owned account, he should never have been eligible to receive these benefits.

I was heartbroken to learn of this situation, because the family’s problems would have been solved if the client had not listened to the bank employee all those years ago and had simply executed a Durable Power of Attorney naming the child as her agent. Then, the child would not have any legal claim to the money in the client’s account. If the client had needed assistance, the child could simply have paid bills by showing a copy of the Durable Power of Attorney and by signing “Child’s Name, POA for Client’s Name.” This also would have held the child to the fiduciary standard, which means that, if he had happened to misuse the client’s money, he would have gotten in trouble for it.

So, please learn from this family’s mistake. Nobody knows what the future will hold; clearly, this client thought that she would be the first family member to need help, not her child. If you ever have any doubts about the proper way to title any type of asset, consult an experienced estate planning or elder law attorney – not just the person sitting behind the counter at the bank.

Happy New Year!

Barbara Armstrong
Paralegal

Happy New Year!

Here we are already into the middle of January. Where does time go? Before you know it, daylight savings time will be upon us, daffodils and tulips will be blooming, and of course, allergies will be thriving!

Last year was a whirlwind. The year started out uneventful, but in July, tragedy struck our family. Our youngest granddaughter nearly drowned. She was saved due to the fast work of her other grandmother, who knew CPR, the police officer that arrived next and took over, and then the EMTs. She began breathing on her own, but the prognosis wasn’t good. 

After two MRIs while at CHKD, it was discovered that she had suffered major brain damage. The little girl we knew was no longer with us. She was in CHKD in the PICU for almost two months and on a ventilator for a month. She suffered severe “storms” during this time. The doctors inserted a feeding tube. She and her family suffered greatly. 

During that time, a GoFundMe page was set up. Through the generosity of folks, her parents were able to take family leave from their full-time jobs and took turns staying with her so that one of them would always be with her and the other with the other two girls. They were able to do some remodeling so that they could bring her home when the hospital finally released her. When she was released, it was a happy day. She was smiling when she heard a familiar voice. She started tracking with her eyes. She began moving her legs and arms so much more, although she couldn’t sit up.

Fast forward to this year. Our little one is now sitting up, and the other day, tried to stand! What tenacity she has. Through the diligence of her parents, she is continuing physical therapy and was accepted into a school program which she just started this month.

Although the doctors told us that we would never have our little girl back in the way she was before the accident, we are eternally grateful for the fact that she is still with us and I truly believe that she will walk again one day and begin to dance like she used to.

A new year brings new hope! God Bless.

Gaining Perspective

Leslie Salvo
 Paralegal

I have worked in the area of elder law and estate planning for many years, but until the last 3 years, my perspective of having a parent with dementia was shaped only through clients’ stories.  And then it hit home.  Just before my father died, he and I were having a conversation about how we were going to take care of him once he came home from the hospital.  He was quick to tell me he was not worried about himself but was concerned about my mother.  He said “something isn’t right, she can’t cook things like she did before”.  While that seems like a simple (and maybe silly) thing for him to say, it spoke volumes to me.  My mom had always been a good cook.  Sadly, my dad did not live very long after his discharge, and I had moved home to take care of him.  Since I was now living with my mom, it didn’t take long for me to see that Daddy had been correct – something wasn’t right.  After a visit to a neurologist and some follow up tests, we had the diagnosis of dementia, likely of the Alzheimer’s type. My sisters and I were devastated. And now, I have the first hand experience of watching my mother slip away from us piece by piece.  My mother was always smart, witty, and kind.  Every once in a while, she will say something funny and it catches me off guard.  For a minute, I think “Mom’s back” but sadly, it’s just a glimpse of her old self. I hope that through this personal experience with my mom, I will be better able to help our clients.  At least, I have now walked in those shoes.  

I am thankful that my parents listened to me years ago when I asked them to get all of their estate planning documents in order, purchase long term care insurance, and pre-plan their funeral arrangements. Working in this area of law has taught me a lot.They did all of that and thus, have made the events of the last few years a little easier to navigate.  I encourage everyone, young(ish) and old, to make things a little easier for your loved ones to handle the aging process by getting your legal affairs in order.  It doesn’t bring your loved one back or make the disease progression go away, but in a small way, it helps.  It’s one less stressor for the caretaker(s) and believe me, that can make a big difference.   

 

Happy Fall, Y'all!

RaShanta Jennings
Legal Assistant

Time to grab your jackets, boots and cozy socks: Autumn has arrived! I absolutely love when the season changes. Out of the four seasons, I have to say that Fall is my favorite. There are so many reasons to absolutely love this season, the weather is near perfect, and a couple of my favorite holidays (Halloween and Thanksgiving) are celebrated.

For me, this time of year is when I get to pull out my crock-pot recipes; plan fun, crafty, fall-ish things with my kiddos; and spend some time in my kitchen baking a few of my favorite desserts such as cobblers, cheesecakes and everything pumpkin-flavored! Needless to say, cheat days in my diet are most common during the fall. During this time of year, the comfort food is so rewarding. Believe it or not, it’s the perfect, yet easy way to entice the entire family over for dinner, not just on Thanksgiving Day. Sharing these moments with family and indulging in comfort food and desserts allows you to reminisce on the most enjoyable periods of your life. As they say, some of the greatest pleasures in life are simple, and what could be as simple as cooking a delectable meal and spending time with those you love most. I truly hope your Autumn is a memorable and happy time. Happy Fall, Y’all! 

Check out a few of my favorite fall recipes below!

https://divascancook.com/easy-pumpkin-pie-recipe-creamy-homemade/

https://divascancook.com/old-fashioned-glazed-fresh-apple-cake-recipe/

https://thepioneerwoman.com/cooking/chicken-alfredo-stuffed-shells/

It’s Never Too Early for Life Care Planning

Catherine E. Sears, Esq.

I regularly meet with clients who would be perfect candidates for TPC’s Life Care Planning program but just aren’t willing to accept it yet. For those who don’t know, Life Care Planning is a holistic approach to the concerns of aging that has the law firm at the center of your aging process. So often, families who are helping a loved one through the aging process make the same common mistakes.

Perhaps the estate planning documents are not in place, or, even if they are in place, the fiduciaries in the documents do not properly understand their role. Maybe long-term care planning or asset protection planning starts too late, many years after a diagnosis occurs. There might be misunderstandings regarding what the senior’s rights are when a hospital is getting ready to discharge him after a medical event, or a long-term care facility is getting ready to admit the senior as a resident. This might cause the senior’s care to be compromised, or for the senior to be moved from one location to another far more than is necessary, which can be very detrimental to the senior’s health. Or, perhaps the senior is experiencing isolation (and, therefore, more rapid cognitive decline) because she is trying to “age in place” in her own home, but has lost the ability to drive. Maybe loved ones are becoming burned out or are compromising their own health and wellbeing by trying to provide in-home care for the senior.

With a Life Care Plan, the law firm can help. Our Elder Care Coordinator, who has a background in geriatric social work, will visit with the senior and her family regularly to get to know the senior’s unique goals and wishes for her aging process and make sure that these goals are not compromised despite whatever changes might happen in the senior’s life. Additionally, the law firm provides the services necessary to ensure that all legal options are explored which could maximize the senior’s quality of life.

Additionally, with a Life Care Plan, the law firm can serve as the senior’s decision-maker for legal, financial, and medical affairs, which provides great peace of mind if the senior never had children, or is estranged from his children, or doesn’t believe that his children would make good decisions for him. Alternatively, if the senior does have family he would trust to make these decisions for him but the family members live far away or do not have sufficient time to devote to attending medical appointments or making regular visits, the Elder Care Coordinator can make these visits and report back to the family member to allow her to make an informed decision.

When I tell clients about Life Care Planning, they are usually excited about the program and feel it would be a good fit for them. However, they often tell me that they don’t need Life Care Planning yet because they are still able to take care of themselves and make their own decisions. However, this doesn’t mean that Life Care Planning is irrelevant to them; it actually means that it is the perfect time to begin Life Care Planning.

To utilize the program best, you should clearly still be able to make your own decisions. An important benefit of the program is that you have already created a plan, while you are healthy, to govern what decisions will be made while your health declines. If you wait until your health or your cognition begins to decline before starting Life Care Planning, there are still ways we can help, but you are limiting our ability to help. By allowing us to get involved once decline has already begun, you may already have compromised some of your standard of living or may already have fallen into some avoidable pitfalls. Just as you purchase a life insurance policy long before you think you will die, or you might purchase long-term care insurance many years before you anticipate needing long-term care, you can best utilize Life Care Planning by signing up before you need any help.

So, even if you don’t think you need Life Care Planning yet, consider scheduling a free Life Care Planning consultation with me and with our Elder Care Coordinator so you can learn more about the program and all the benefits it can provide you. Additionally, contact our office to RSVP for a special seminar about Life Care Planning on November 14^th at the Holiday Inn & Suites Historic Gateway on Bypass Road. We look forward to seeing you soon!

Caregiver Agreements

Catherine E. Sears, Esq.

Just as you have the opportunity to choose your own mechanic or your own attorney, a Medicaid applicant has the opportunity to choose who to hire to provide caregiving services. Of course, the applicant may choose to hire a professional in-home caregiving company; however, if certain criteria are met, the applicant may, alternatively, hire a trustworthy family member to serve as a caregiver. The applicant and the family member might understand between themselves that the family member would ordinarily provide such caregiving services out of the goodness of her heart for no cost, and that being part of a family means helping your loved ones without expecting anything in return.

However, by paying a family member to serve as a caregiver, the Medicaid applicant can still spend-down his resources in order to qualify for Medicaid, and, instead of having that money go to a professional company, can keep the money in the family. Additionally, even though this money will now legally belong to the family member and not to the Medicaid applicant, there can be an acknowledgement within the family that these funds are still the applicant’s money because the family member would have been willing to provide assistance free of charge.

Once a senior actually receives long-term Medicaid, all of her income, with the exception of the $40.00 “personal needs allowance,” will go towards paying the cost of her health insurance premiums and the patient-pay responsibility at the long-term care facility. Therefore, any other expenses which go beyond the scope of the cost of the long-term care facility (including new glasses or hearing aids, new clothes if the senior’s clothing size fluctuates due to her medical condition, tasty snacks to supplement the food provided by the long-term care facility, etc.) must be paid from the personal needs allowance or out of the goodness of family members’ hearts. These expenses can add up, and having family members pay for these “supplemental needs” out of their own pockets can have a significant impact on family members’ own finances. However, if a family member had previously been paid for serving as the senior’s caregiver, then that family member can use that “extra” money to pay for these supplemental expenses instead of using her personal assets. Then, if there is any money left over after the senior dies, the remaining funds can be distributed to the senior’s family members to pass some assets on to the next generation.

There are some practical factors to consider in determining whether a caregiver agreement between a parent and a child is an appropriate strategy for your client. First, the caregiver child must be trustworthy to maximize the likelihood that he will, in fact, use these funds for his parent’s supplemental needs. It is wise for the caregiver child to create a separate bank account and deposit the funds into that account instead of commingling the assets into an existing joint account with a spouse. It is also wise for the caregiver child to update his own estate planning documents to say what will happen to the assets in case the caregiver child predeceases his parent. Additionally, because the money from serving as a caregiver will be considered earned income for the caregiver child, he will need to report and pay income taxes on the income. Since the money will legally belong to the caregiver child, there will be gifting ramifications for any money he returns to the parent during the parent’s lifetime and any money he gives to his siblings or other beneficiaries after his parent’s death. Depending on the amount gifted to a particular individual within a calendar year, he may need to file a gift tax return, and any amount gifted could create a penalty period if the caregiver child himself needs long-term care Medicaid within five (5) years of making the gift. If the caregiver child is also serving as Agent under the parent’s durable power of attorney or as Trustee of the parent’s revocable living trust, then it is also important to make sure that the power of attorney and/or trust document give the caregiver child the power to engage in self-dealing.

There are also a number of factors that need to be met to ensure that a caregiver agreement between a parent and a child will be treated as compensation for services and not as an uncompensated transfer which will create a penalty period. The rules that govern these requirements are extremely detailed, so it is important to have an experienced elder law attorney draft a precise, custom-tailored contract for your family to avoid accidentally failing to meet one of Medicaid’s many criteria.

If a family member is providing caregiving services to a Medicaid applicant, this can be an extremely effective way of transferring assets to such family member without creating a penalty to the applicant. However, for this strategy to work correctly and not penalize the Medicaid applicant, it is imperative that all parties treat the arrangement as the formal, legal matter it is and not as an informal arrangement simply because it involves family members.

Mosquito Magnets

Teresa M. Clemons, Office Manager

My son and I are both “mosquito magnets”! We can be sitting outside with my husband and the only ones getting bitten … are us! Bites get better within a few hours for most people. But if you’re highly sensitive, like we appear to be, symptoms can last for several days. With years of itching and scratching, I wonder: why us?

Studies suggest that about twenty percent of people are "high attractor types" who are especially appealing to the female mosquitoes seeking out blood for the extra protein they need to lay eggs. There are 150 different species in the United States of these blood-sucking creepy crawlers.

Is it the color of our clothes? Could be. Mosquitoes have discerning fashion taste. Or at least, they're more likely to spot you as a target if you stand out from your environment. Dark colors, especially, will attract more of the insect. 

Do we squirm too much? Could be. The more you move, the easier you are to identify as a living receptacle bursting with delicious blood. 

Are we too hot? Could be. As they get closer, it’s your body heat that draws the mosquito in. 

Do we drink too much? Could be. People are not sure how mosquitoes sense the presence of ethanol, but drinking as little as one can of beer will significantly increase the attention you receive from the pests. 

Is it genetic? Could be. A very high percentage of your susceptibility to mosquito bites has nothing to do with what you're drinking or wearing, it's genetic.  The composition of your skin bacteria that naturally and healthily exists can be the attractor, as can acid and other substances present in your sweat.  

Is it the wrong blood types? Could be.  People with blood type O are more prone to mosquito bites, than those with type B, with type A folks bringing up the rear. Picky little bugs, aren’t they?

Well, we fall into most categories so, mystery solved…

The Family Limited Partnership

Helena S. Mock, Esq.

Estate Planning is a complex area of the law because it deals with so many different issues, from asset protection to taxation and almost everything in between. There are a variety of different legal strategies and tools that have been developed and are regularly used to assist in reducing the value of an estate for estate tax purposes while maintaining control and keeping the assets in the family. 

One of these strategies is the use of the Family Limited Partnership (“FLP”) or Family Limited Liability Company (“FLLC”).  With this strategy, a property owner can give away the underlying equity interest in an asset while still retaining managerial control over that asset.  FLPs are most commonly used as vehicles for making gifts of interests in real estate and family-owned business interests.  With an FLP, you title assets in the name of the FLP and then gift partnership interests in the FLP to others. It is like giving away pieces of a pie. However, because each piece is valued individually, the sum of the parts does not necessarily equal the whole. The fractional ownership of property by multiple individuals allows for the artificial “discounting” of the value of each individual’s share upon their deaths, thereby reducing estate taxes. 

But why are discounts for these interests available? Very simply, it’s because no buyer would pay full price for a fractional interest in a closely-held FLP since profits are shared with the other partners, and the buyer may not have control over how the FLP is managed or when it will be dissolved or the assets sold.  The overall value of the property is only artificially diluted by this process, however, because at any time, the partners can agree to dissolve the FLP, and upon termination of the partnership, the assets almost magically return to their full underlying value.

This can also be a way of giving interests in property to beneficiaries who may not yet have the ability to manage assets wisely.  Since the FLP allows for centralized management, the individual owners of the separate interests have little to no say in management, development, or sale of partnership property. It is also more difficult for creditors to get at the assets when they are in the FLP than if they were held outright by the beneficiaries. In fact, many experts believe this one document has more important lawsuit and asset protection features than any other estate planning strategy. It can be the fortress protecting your hard-earned wealth.

The result of this strategy is that the family’s assets have greater protection from a personal judgment against any family member. If the limited partnership had not been used, all the family’s assets, including the business or property in the FLP, would have been lost. The laws protecting partnership assets from the reach of creditors of individual partners have been around for many years. In fact, these provisions date back to the English Partnership Act of 1890 and were later adopted by the Uniform Partnership Act which has been the law in America since the 1940s.

There is always the possibility that a judge may not like the fact that a legitimate creditor can’t get paid because of the partnership rules and may take it upon himself to find a way to satisfy the judgment. Perhaps in close cases, a judge may rule that the partnership was set up to defraud creditors and thereby ignore the protection. Or the legislature may decide to change the law.  Several years ago, the IRS cracked down on this strategy; however, more recent cases have upheld FLPs as a viable estate planning strategy when they are properly structured and administered.

While FLPs and other advanced planning strategies may not be for everyone, they can be a good tool to minimize estate taxation and maximize asset protection. However, you should seek the advice of an experienced estate planning attorney in determining whether an FLP is appropriate for you and for assistance in setting up and administering the FLP.

The Ethical Attorney

Meredith H. Maust
Associate Attorney

If I were to say “ethical attorneys” in front of a group of people, I am likely to hear a joke or two that will, inevitably, conclude with the idea that this phrase is an oxymoron. Oh, the discomfort that comes when I casually remind the jokester that, not only am I an attorney, but not all attorneys are corrupt.

So, you have suspended reality to consider that not all attorneys are corrupt, but the jokes about attorneys exist because there are unethical attorneys out there. You know the type: lawyers who perform unnecessary tasks to create more billable hours from their clients; those who are dishonest and misrepresent the reality of a case to their clients; those who fail to communicate once they have your retainer; and those who seem more focused on representing their personal interests and financial gain rather than those of the clients’. I am not unfamiliar with attorneys who fall into these categories.

Well, if I can admit lawyer jokes have merit, why is it that I am so unwilling and unable to graciously accept the humorous denigration of my chosen profession?

It is as simple as this: a lot of attorneys dedicate their practice to upholding a tradition of integrity, client loyalty, honesty and a commitment to ethical standards. We work hard to fight for our clients, for an outcome that we believe in and we do so without exploiting the system and those whom we represent. 

We work hard to stay true to ourselves, to maintain our ideals and ethical practice of the law. As such, the generalization hurts. Not all lawyers are created equally. Not all doctors deserve a license to practice medicine, not all mechanics are trustworthy and, well, perhaps I should altogether stay away from commenting on politicians at any level. There are bad apples in every lot, in every profession, but that should not affect those of us who take genuine pride in their commitment to providing the best service to those in need.

Ask an attorney why they decided to become a lawyer. The attorneys with whom I associate will provide a genuine response that has nothing to do with making money. Many of us chose this profession to make a difference and to help others. Many of us have personal reasons for choosing our specific practice area.  These are the lawyers that put time and effort into providing individualized service and attention to clients, who maintain ethical standards of practice despite going up against opposition that pays no heed to the regulated codes of conduct to which all lawyers are required to adhere. It takes true commitment to provide zealous representation of our clients without devolving into the lawyer who condones the unprincipled tactics of unethical opposition by choosing to retaliate with similar practices.

I can admit most attorneys are competitive know-it-alls. We are constantly engaging in some sort of challenge or debate. Whether it is over the interpretation of the law or a simple dispute over the facts, attorneys want to be the one with the answers, want to be right, and want to win. The difference is, there are lawyers who will resort to any means necessary to win and those of us who want the win for our client; those of us who believe we can achieve a positive outcome without sacrificing our integrity.

I advise people looking for legal representation to meet with a few different attorneys before retaining counsel. You will be able to tell who is a good fit for you and, by reserving judgment, you will find those of us who are here to help.

Losing a Loved One

Helena S. Mock, Esq.

Change is always difficult, but a death in the family can be especially traumatic. It may feel as though the world should stop to mourn your loss, but it doesn’t. The world keeps turning, the day still follows night, people around you continue to go about their normal routines as if nothing has happened.  For those suffering, this can seem callus until you realize that your loss is not theirs.

When the loss of a family member occurs, whether sudden or expected, your world can feel as if it has been turned upside down. This loss is combined with the additional burdens of settling the decedent’s estate.  Thus, it is helpful to have a “to do” list handy so that you do not overlook anything in the panic and grief of the moment. The following is a list of “action items” that will help guide you following the loved one’s passing:

• In the hours immediately following the death, make sure family members have friends or loved ones with them. Arrange care for any children or adults needing assistance.
• Call the funeral home and clergy to set up appointments to discuss final arrangements. Before the meeting, be sure to check and see if the decedent left behind any memorial or burial instructions.
• Obtain several copies of the death certificate, at least 5; you can always get more later.
• Let people know what has happened. Notify immediate family members and close friends. If the decedent was employed, notify his employer and any important business colleagues.
• In the days immediately following the death, gather the decedent’s important papers, including the Will or Trust, deeds, bank and brokerage statements, tax returns for 3 years prior to death, all life insurance and/or annuity contracts and retirement plan documents.
• Schedule an appointment with an experienced estate planning attorney – one who focuses her practice in estate planning. Working with someone who is knowledgeable about estate and tax issues will avoid potential problems. The person named as the executor (“Personal Representative”) or trustee should attend this conference.  The employment of legal counsel is an expense of administration. Failing to retain competent counsel can result in the fiduciary being personally liable to the decedent’s estate.
• The Trustee and/or Personal Representative will then take over the decedent’s assets and finances and manage them throughout the administration period. Be mindful of the Prudent Investor Rule. Just because the decedent held a certain asset does not mean it is appropriate to maintain that asset in the estate; it might be time to restructure the investments.
• If the decedent was still working, contact his employee benefits department to begin processing any benefits that are due. They will likely need an original death certificate.
• Contact the local Social Security office. If the decedent was married, his spouse may be eligible for benefits. A disabled child of the decedent may also be eligible for benefits.
• If there was any life insurance, determine the beneficiaries.  Only the beneficiaries can claim any death benefits (the insurance company will usually refuse to speak with anyone other than the beneficiary.)  Each insurance company will require an original death certificate in order to process the claim.
• If the decedent was ever in the military, contact the Veterans Administration to see if surviving family members are eligible for any benefits due to the death.
• Keep a record of any expenses you or anyone else pays on behalf of the estate (funeral expenses, qualification fees, etc.) for purposes of reimbursement and possible deductions on the estate or trust tax returns.  Do not pay any debts until you are sure the estate is solvent enough to be able to pay all debts.
• Inventory the decedent’s assets and note how each asset is titled (individually, joint with someone else, in trust, etc.).
• File the decedent’s final personal income tax return (IRS form 1040) and corresponding state income tax return, if any, by April 15^th of the year following the year of death.  A tax return for the estate and/or trust will also be due but may be filed on either a calendar or fiscal year. Consult with your attorney to determine which is best.
• Do not change the title to assets, claim any benefits, or roll-over any retirement accounts without consulting with your estate attorney. Changing a title can have unexpected income, estate, and property tax consequences.

The process of administration of a loved one’s trust or estate is complicated considerably by emotion. In addition, there can be difficult and complex family and financial issues that arise during this time. However, there are resources available to help you navigate through the rough waters.  Most important, don’t delay. Although normally there is nothing that needs to be done immediately, delaying too long can cause problems which may be difficult or impossible to fix later.