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Elder Law Blog

Boston Elder Law Blog

Care planning, asset preservation, and Medicaid application tips

As Baby boomers approach retirement, many may be revisiting legal documents addressing long-term care, estate planning, emergency care and other elder law and estate law topics. Others may be thinking about some of these issues for the first time. In both cases, a recent article reminds us that it is never too early to plan for the unexpected.

In fact, one woman was so affected by the unexpected loss of her 51-year-old brother that she found a website to help people make end-of-life plans. The website joins a host of other Internet businesses devoted to end-of-life planning. Many of them can offer helpful to-do checklists, which may help organize an individual’s thoughts. 

Estate planning may avoid the pitfalls of reverse mortgages

In today’s economic climate, readers may have heard about reverse mortgages. The term refers to a type of borrowing arrangement specifically designed for older homeowners. Under the terms, a homeowner who is at least 62 years of age may borrow against a home’s value. Repayment obligations begin only when the homeowner moves out or passes away.

As an elder law attorney knows, however, such an arrangement may interfere with long-term financial planning or inheritances specified in an estate plan. In the first scenario, a borrowing arrangement may create a false sense of security. An elderly individual may assume that retirement benefits and the option of taking out a reverse mortgage will be sufficient. Yet with the rising costs of healthcare and longer life expectancies, even a retiree may need to consult with an elder law attorney about 10 or even 20-year financial projections.

Cost-of-living and long-term care concerns

With rising health care costs, there has never been a greater need for skilled long-term care planning. Even for elders with retirement benefits, cost-of-living increases and the potential need for increased medical services can strain even the budget of seniors who receive retirement benefits from sources such as the Social Security Administration, employer-provided pension plans, and/or individual retirement accounts.

For older workers who may need to leave the workforce because of disability, the costs of health care, living arrangements and debts may converge much sooner than expected. In fact, the costs of treatments may quickly deplete savings in a matter of years. Older workers with an adequate work history may qualify for certain disability benefit programs, but even those sources may be inadequate to cover all bills. In addition, talks of program cuts and falling behind the consumer price index may signal even small monthly benefit payments to come.

Living wills under Pennsylvania law

In our last entry, we talked about some of the policy issues involving a health care proxy or health care power of attorney. Readers may have questions about how that option is different than a living will. 

In practical terms, a living will is generally an instrument used by an individual in an end-stage medical condition. Under Pennsylvania law, it is known as an advance directive. This document may address health care professionals to withhold life-sustaining treatment. A health care power of attorney, in contrast, may simply contemplate temporary incapacity. 

Medical Crisis: Why your 18 Year Old "Adult/Child" Needs a Health Care Proxy

Every competent adult shall have the right to appoint a health care agent by executing a Health Care Proxy... but do we think of our 18 year old children as adults? Upon turning 18, children instantaneously transition from needing parental consent to needing to give consent to make medical decisions and to access medical information.

Young adults are reckless and they get hurt. But what happens when your 18 year old child is hospitalized and cannot consent to medical procedures or to transfers to skilled rehabilitation facilities? Medical facilities at colleges and universities are prohibited from releasing any information to parents regarding the condition of their adult children who may be injuned and hospitals must receive informed consent to transfer patients to specialized rehabilitation centers. Unfortunately without a Health Care Proxy, parents must endure the process of obtaining a Guardianship over their adult child to consent to such procedures. Such process delays treatment and can be expensive.

Estate planning may address a range of potential concerns

An attorney that specializes in elder law knows that long-term retirement and estate planning involves more than just financial matters. In the event of incapacitation or some type of sudden and unexpected event, a comprehensive legal plan should address issues of how decisions about healthcare, living expenses, financial planning and estate planning should be made.

Readers may have questions about some of the options available. Some possible legal arrangements include a guardianship, a conservatorship, or a power of attorney. In a guardianship, an individual is given authority to make health decisions for another. In a conservatorship, an individual is given decision-making powers over another’s financial matters. With the help of an attorney, the scope of powers under both arrangements can be specifically defined, so as to avoid unexpected results. A power of attorney may be a flexible approach, as well. 

Understanding the differences between wills and trusts

Estate planning is more than just jotting your wishes down on a notepad. But, if you wish to avoid probate, you will need more than just a will. A will's primary function is to let the court know your wishes. There are other estate planning documents, though, that can help keep your estate out of probate. One of those is a revocable living trust.

Some people worry that putting assets into a revocable trust means that they won't be able to do anything with those assets. However, the person who creates a trust has complete power to change it at any time. You can sell an asset, list a beneficiary to inherit it and even decide that you want someone else to have it after you pass away.

Benefits to "Stand-by" (d)(4)(a) or Payback Trust

Many public benefit programs, including SSI and MassHealth, typically include, without limitation, an asset limit test. An individual with excess assets typically cannot give away assets in order to establish eligibility without the imposition of a disqualification period. Federal law contains some exceptions to the transfer of asset rules.

A disabled individual currently receiving SSI and MassHealth benefits who stands to receive a settlement or an inheritance should consider the implementation of a (d)(4)(a) trust. The term (d)(4)(a) is a reference to the United States Code provision which established the allowance of this type of trust planning. A (d)(4)(a) trust, commonly known as a "payback" trust because the trust must contain provisions which require the trustee to reimburse the Office of Medicaid upon the death of the trust beneficiary for medical services paid by the Office of Medicaid for the benefit of the disabled individual,

is a type of supplemental needs trust created for the sole benefit of the disabled individual. The trust assets are meant to supplement any governmental assistance the disabled individual is entitled to.

Be aware of possible tax scams targeting Massachusetts elderly

Every year, the Internal Revenue Service releases a list of the top 12 tax scams, appropriately dubbed the "Dirty Dozen." Many of these scams may be targeted at elderly Massachusetts residents. Some of these scams are basically the same every year - it's only the methods or rhetoric used that changes.

The most common type of tax fraud is perpetrated through identity theft. This can include using a person's identifying information, such as a Social Security number, to commit various types of fraud. If there is a reason to believe that tax fraud has occurred or that you or an elderly loved one has been the victim of identity theft, it is important to contact the IRS immediately.

When is a Reverse Mortgage Right For Me?

A reverse mortgage is similar to a conventional mortgage in that it is a loan which uses the borrower's home as collateral. The biggest difference is that the loan generally does not need to be repaid until the last surviving homeowner permanently leaves the property or passes away. The estate then has six months to pay the balance of the mortgage in full or sell the home. If the proceeds from the sale exceed the amount needed to pay the mortgage, the difference will be placed in the estate. If the proceeds from the sale are less than the amount needed to payoff the mortgage the estate is not held personally liable.

Payments to the borrower can be a lump sum, monthly payments, and periodic advances through a line of credit or a combination of these options. The amount available for advance will depend on the age of the borrower (minimum age of 62 is required) and the amount of equity available in the home after paying off any existing liens. There may also be some government regulations or guidelines which can affect the amount available for advance.

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