Co-authored by Joanna C. Feldman

As Monday, April 16, 2018, was Health Care Decision Day, your question is timely.  In New York, a Health Care Proxy allows you to appoint someone to make health care decisions for you should you become mentally incapacitated.  You can even appoint a successor should the primary person be unable or unavailable to serve. Your health care agent is someone you trust to carry out your health care wishes.  Because the health care provider must follow the agent’s instructions, it’s a way to control your health care when you’re not able to do so yourself. It is important to note that so long as you can make your own decisions, your health care agent has no authority.  

 

If you don’t have a health care proxy, New York State law provides a back up that works in certain situations.  For instance, if you wind up in a hospital or nursing home and are unable to make your own health care decisions, the law provides a specific order of priority in terms of persons who are allowed to make them for you.  You may not, however, have communicated your wishes to the person with the highest priority. Or perhaps the person with highest priority is not who you want to make your health care decisions. Or perhaps there are multiple persons with the same priority.  Executing a Health Care Proxy can avoid these situations. More importantly, this statutory health care proxy does not apply outside of a hospital or nursing home setting.

 

Having advance directives in place is critical should you lose your capacity.  The Health Care Proxy, however, only addresses health care. Decisions concerning financial, property, and other issues are governed by a Power of Attorney, and we strongly advise that everyone have both.

 

Managing the financial and health care needs of you and your loved ones can be easier with the right professional guidance.  Please contact us to discuss your options. We can be reached at 914-925-1010 or by e-mail at smd@mfd-law.com.  You are also encouraged to visit our website at www.plantodayfortomorrow.com.  Questions may be submitted to smd@mfd-law.com for a response.

 

When I meet with people for the first time who are interested in estate planning, their focus is usually on after-death planning.  Whether their concern is minimizing estate taxes, planning for minor or spendthrift children, or simply passing assets to the next generation as quickly and efficiently as possible, nearly every meeting begins with a discussion on planning for death and the preparation of related documents, such as a Last Will and Testament or revocable trust.  This is a shortsighted approach.

More important than planning for death is planning for that period of time between your golden years and death, where you may become disabled and incapacitated. I like to refer to this period as “the space between”.  I often joke with clients that dying is not the problem. Becoming disabled and incapacitated – that is a problem.

It is sometimes difficult to redirect someone’s attention to this topic when they have geared themselves up for a discussion about their death.  I am very sensitive to this since most people wait many years before they find the nerve to finally talk about their death. Then they meet with me and I throw them a curveball about incapacity and disability.  But once we start talking about how “the space between” can be a tumultuous time in a person’s life, I usually grab their attention.

Once you die, the game is over.  Your assets are no longer needed to cover the cost of your care.  It is during “the space between” that you run the risk of losing a considerable amount of assets to the cost of your care.  In order to fully appreciate this risk, one must consider the probability of falling ill and the possibility of requiring long-term care, and then the limited options to pay for the cost of that care.  It quickly becomes apparent that there are a limited number of ways to pay for the cost of long-term care and without proper planning, there is a high probability that you will spend a considerable amount of assets on your care, whether in a nursing home or while receiving care at home.  This is why planning for “the space between” is my primary focus as an elder law attorney.

No one likes to think about becoming disabled or losing their capacity but compounding that with the significant loss of assets is usually intolerable for most.  In order to properly plan, one must consider planning techniques such as an irrevocable Medicaid Trust and a properly drafted power of attorney together with a statutory gifts rider.  These are documents that work to protect your assets if you require long-term care. A Last Will and Testament does not protect your assets. So often I hear people say to me, “doesn’t my will protect me?” or worse, “my assets are protected because I have a revocable trust”.  These documents do not protect your assets, they simply provide a mechanism to pass your assets to the next generation.

A typical estate planning package includes a Medicaid Trust in addition to your Last Will and Testament.  A properly drafted Medicaid Trust is one of the only techniques available to you to protect your assets if you fall ill and require nursing home care.  As many of you know there is a 5-year lookback period when you transfer assets, including transferring assets to a Medicaid Trust. How many of you only have a Last Will and Testament?

Thus, when you decide to meet with me, be prepared to talk about “the space between” and remember, dying is the easy part.  And if I shake your hand and tell you that I hope you die of a sudden heart attack, perhaps you can appreciate my rationale.

Salvatore M. Di Costanzo is a partner with the firm of Maker, Fragale & Di Costanzo, LLP located in Rye, New York, and Yorktown Heights, New York. Mr. Di Costanzo is an attorney and accountant whose main area of practice is elder law and special needs planning. He is a member of the National Academy of Elder Law Attorneys and a frequent author and lecturer on current elder law and special needs topics. Since 2013, Mr. Di Costanzo has been selected each year by the rating service, Super Lawyers as a New York Metro leading elder law attorney.  He can be reached at (914) 925-1010 or via e-mail at smd@mfd-law.com.  Visit his practice specific website at  www.plantodayfortomorrow.com.

 

Co-authored by Joanna C. Feldman

The truth is that very often, “elder law” attorney is a misnomer as it pertains to many of our clients.  For example, nearly everyone should have a comprehensive Power of Attorney. Some of our youngest clients have just become adults who come to us for a Power of Attorney before heading off to college.  Other clients are parents of young children who ask us to draft their Wills to ensure that they express their wishes concerning guardians and that underage beneficiary trusts will be set up in case their children are still minors at the time they’re to inherit property.  A large number of our clients are those in their late 50s or 60s who engage proactively in protecting their assets in case they need long-term care in the future. Then there are families with special needs that cross every generation.

Why is it a good idea to see an elder law attorney for documents like this?  Elder law attorneys are well-versed in the pitfalls of one-size-fits-all documents.  Too often, we see Powers of Attorney that only stick to the statutory form and do not convey enough powers – like, for example, the power to gift property, which can be critical for asset-protection purposes.  Without the necessary powers, a time-consuming and expensive guardianship proceeding may be required. Similarly, a Will that leaves assets outright to one’s descendants without any contingencies may create unforeseen and costly complication.

Often when I lecture, I tell the audience that everyone sitting in the room needs the services of an elder law attorney.  By the end of the lecture most of the audience, if not all, is in agreement.

Managing the financial and healthcare needs of your loved ones is difficult but speaking with an elder law attorney can ease at least some of the burden.  Please contact us to discuss your options. We can be reached at 914-925-1010 or by e-mail at smd@mfd-law.com.  You are also encouraged to visit our website at www.plantodayfortomorrow.com.  Questions may be submitted to smd@mfd-law.com for a response.

 

We have all heard the saying “life is full of regrets”.  I have compiled a list of the most common regrets that I often hear from clients, but more often, their family members, during my practicing as an elder law and special needs planning attorney.  If you have neglected any of these topics, my hope is that you will take proper measures before it is too late.

  1. Failing to prepare a proper power of attorney and statutory gifts rider.

I frequently explain to my clients that one of the most important documents I can prepare is a power of attorney (“POA”) and statutory gifts rider (“SGR”).  Failing to have these documents, necessitates a guardianship proceeding, which is costly and burdensome on family members.

A good illustration of the impact of not having a POA and SGR usually involves a spouse who is incapacitated and requires care.  Usually, we are planning to apply for Medicaid to cover the cost of such care and that planning might involve the transfer of assets from the ill spouse to the well spouse.  If no POA and SGR exist, we must commence a guardianship proceeding to effectuate the planning. This results in the family having to privately pay not only for legal fees associated with the guardianship proceeding, but for the cost of care until the guardianship is completed.

  1. Ignoring the five-year look-back period.

The five-year look-back period is the five-year period preceding the date you enter a nursing home.  If you transferred assets during this period, you will be ineligible for Medicaid for a certain period based on the value of the assets transferred.

The five-year look-back period must be contemplated where clients intend to be proactive in preserving their assets.  The optimal planning technique is to create a Medicaid Trust, usually for a house, and in some cases other assets. If you create a Medicaid Trust and transfer your assets to the trust, the assets transferred to the trust cannot be counted as available assets for Medicaid planning purposes after five years from the date of the transfer.  If you don’t have long-term care insurance, it is borderline foolish not to consider this planning technique. Clearly, if you wait too long, the five-year look-back period becomes an issue as you age.

  1. Excluding family members or other loved ones from financial and estate planning matters.

Finances can be complicated at any time of life, but an illness or cognitive impairment can cause financial matters to become overwhelming or even unmanageable.  Discussing one’s finances is commonly considered taboo, even within a family. Keeping one’s financial information close to the vest, however, can have unforeseen consequences.  Often it falls on family or loved ones to piece together the financial picture like a jigsaw puzzle, but without an image to follow. A missing piece can have dire implications. Being unaware of certain income and assets could, for example, delay eligibility for a spouse’s or parent’s Medicaid benefits or result in the denial of an application or affect distribution of a loved one’s Estate pursuant to their final wishes.

  1. Creating a team of professional advisors and counselors.

Professional advisors and counselors exist in many areas in part because it is nearly impossible to know everything about everything.  One issue we often see are clients who are proficient at preparing their own income tax returns, but don’t account for changed circumstances, for instance, their incapacity.  When this happens, family members who may not be as experienced, struggle because they now have to form new relationships. I advise clients to form these relationships early in the lives so their family members have someone to turn to.

Coauthored by Joanna C. Feldman

We’re so glad you asked this question, which shows pervasive misinformation that causes unnecessary struggle.  Based on the facts presented, it sounds like your aunt could qualify for Medicaid, which would help pay for aides at home.  This is known as community Medicaid.

To be eligible for Medicaid, one cannot have assets greater than an amount set every year.  Certain assets do not count.  In the case of your aunt, if she has assets greater than $15,150.00 (in 2018), we can employ the technique known as “spousal refusal”, where most of her assets would be transferred to your uncle, who would then refuse to support her (financially, that is). 

Spousal refusal pertains to income as well.  Your uncle’s income would not necessarily be included when determining your aunt’s income for Medicaid purposes.  In New York, if one has income greater than the maximum amount set every year ($842.00 in 2018), one has essentially two choices: use the excess amount to pay for care at home, after which Medicaid will pay for the rest, or enroll in a pooled income trust, whereby the surplus income is deposited into a pooled trust and the money so deposited is then used for the Medicaid recipient’s expenses such as food, utilities, mortgage, taxes, and so on.  For example: Say your aunt’s income was $200.00 over the income limit.  She could deposit $200.00 into a pooled trust every month and use the money for expenses described above.

Managing the financial and healthcare needs of your loved ones is difficult but speaking with an elder law attorney can ease at least some of the burden.  Please contact us to discuss your options. We can be reached at 914-925-1010 or by e-mail at smd@mfd-law.com.  You are also encouraged to visit our website at www.plantodayfortomorrow.com.  Questions may be submitted to smd@mfd-law.com for a response.

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