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Davidow, Davidow, Siegel & Stern, LLP
Long Island's Elder Law, Special Needs & Estate Planning Firm

Friday, January 22, 2016

Disability Integration Act to be Introduced in the Senate

A bill entitled, Disability Integration Act, is scheduled to be introduced in the Senate very soon.  Sponsored by Sen. Charles Schumer, the bill hopes to keep families together and make life accommodating and comfortable for disabled adults.  Basically, it would require health insurance companies to pay for services for disabled adults in their homes.

Although health insurance provides disabled people with care while in an institution, it should do the same if they and their family decide to stay at home; it should be their right to choose where they want to receive care.  Some have even commented that the need for residential options amounts to nothing less than a "crisis."

Years ago, housing people in institutional care models was the norm, but we cannot revert back to those days.  Schumer also mentions that "we cannot expect that everyone will live with their parents forever."  He feels that disabled adults should be allowed to be as independent as they can and caring for someone in their own home would actually cost less than an institution.

Senator Schumer is optimistic that a law requiring insurance companies to changes their polices can get passed but he knows it's going to take some time to get it done.  No one should want to break up families or even friendships within a community because they are forced to leave their home for care.  He's confident that many will realize how important it is to pass this bill because it's a system that's obviously flawed.  

Friday, December 4, 2015

Governor Cuomo Signs the Care Act into Law

New York State legislature has passed the Caregiver Advice, Record and Enable (CARE) Act.  It was signed into law by Governor Andrew Cuomo on October 26, 2015 and will take effect in April, 2016.  The primary focus of this new law is to offer assistance to patients and their caregivers after they are discharged from the hospital.

Upon being discharged from the hospital, there are many concerns as to how the patient’s care will be continued at home.  This makes an already challenging situation even more stressful for the patient as well as the caregiver who is responsible for providing that care.  That care does not only include assistance for the activities of daily living, such as eating, dressing, and bathing, but for more involved procedures such as medication administration, the handling of medical equipment and possibly even wound care.

The first thing a patient will be required to do is to assign someone to be their family caregiver.  Once this is done and the hospital is alerted to the patient’s choice, they will then be obligated to notify that caregiver 24 hours prior to discharge.  They will then also be required, by law, to provide the caregiver with all the necessary information and if necessary, training, that would be necessary to properly care for the patient upon their release.

Seeing the value of this Act, AARP is an enthusiastic advocate to get this passed throughout the country.  New York is now the 18th state that has passed a version of the Act.  Part of the reason for AARP’s participation in getting this passed, is the knowledge that nearly 40 million caregivers throughout the United States currently provide unpaid care for a family member.  As startling as that is, what’s even more upsetting is that the number of caregivers that will be available in the coming years is expected to dramatically decrease leaving many people unassisted in the most fragile time in their lives.

The main purpose of passing this Act is to help alleviate the stress and concern of patients when they are being discharged and require further care.  It will allow them to choose their caregiver, and have the hospital train that caregiver thereby eliminating a lot of worry.  In addition, by educating caregivers with clear instructions within the discharge plan, it will most likely decrease the need for that patient to have to enter another facility for their aftercare.

Friday, August 21, 2015

Helping Patients Deal with End of Life Decisions

Medicare announced plans this month to reimburse doctors for talking with patients about what treatments they want -- and don't want -- toward the end of life.  This sensible, long-overdue proposal is likely to have a very wide impact.  About 80 percent of people who die in the United States each year are covered by Medicare, and Medicare policies are often followed by private insurers, some of which already pay for these advance-planning conversations.

The need for such talks was made even clearer by disturbing new evidence in a study in the July 9th issue of JAMA Oncology, a journal of the American Medical Association, that many cancer patients, who often face difficult choices over whether to have chemotherapy or radiation, don't receive the care they want at the end of life.

Researchers at the Johns Hopkins School of Medicine in Baltimore used a national survey containing exit interviews with the next of kin of nearly 2,000 cancer patients who died between 2000 and 2012.  Patients who had end-of-life discussions with doctors and those who created living wills, which describe the kind of care a person should receive, were most able to avoid having treatments that they did not want imposed on them.  Patients who relied solely on designated health care proxies to make decisions if they were incapacitated were often subjected to aggressive last-minute care.

The lesson seems clear.  End-of-life discussions involving all parties -- doctors, patients and surrogates -- are crucial to ensure that people's preferences are specified and understood by everybody.

Medicare's proposal, which is part of the agency's physician fee schedules for 2016, was welcomed by major medical organizations but faces opposition from right-to-life and disability rights groups that say advance-care planning persuades people to reject lifesaving treatment.  The talks, however, are voluntary, and many patients and families are eager to have them.

The payment rates for doctors and other health professionals who meet with patients about end-of-life care will be decided by November 1st, when the plan is expected to become final.  Virtually all experts agree that medical professionals will need additional training.  Many doctors are uncomfortable talking to patients about planning for death.

The proposal would end further delays on an important issue.  In 2009, a similar plan was floated to pay for end-of-life discussions under the Affordable Care Act only to be derailed by Sarah Palin's bogus cry about "death panels" that would cut off care for helpless patients.  In 2010, Medicare tried to pay for voluntary advance care planning as part of annual wellness visits only to have its efforts overturned by similar political pressure.  This year the opposition seems more muted, and more patients may finally be able to talk to their doctors and gain more control over the care they receive in their final days.

Source:  The New York Times, July 2015.

Friday, May 1, 2015

Updating your Estate Plan after Divorce

Almost everyone who has been divorced or is ending their marriage needs an estate planning checklist for divorce. It’s imperative they revisit their estate planning documents to avoid inadvertently giving their ex control over their estate. While the divorce process attempts to equitably divide assets, it usually falls short of addressing the estate planning needs of clients. In addition, it is prudent to revise estate planning documents during a divorce to ensure your wishes are carried out, as a contentious divorce can often last many years.

Updating of all estate planning documents should obviously be carried out. There are two areas, however, that deserve special attention - pension plans & minor children.
In most states, if you get divorced, a state statute automatically treats the ex-spouse as being pre-deceased in your documents.  This means if you named a former spouse as a personal representative, executor, or as a beneficiary of your estate, they will be automatically removed. Many people believe they can rely on such a statute to handle their estate planning documents. There are multiple problems with this approach. First, the statute only goes into effect upon divorce (if you pass during a multi-year divorce battle, everything may pass to your spouse regardless). Second, certain retirement plans governed under a portion of Federal Law called the Employee Retirement Income Security Act also known as ERISA (such as 401K's and pension plans) will preempt the state statute from taking effect. Therefore, your ex-spouse may still inherit your retirement plan even after a divorce is final.

Another common issue we see is when a Decedent leaves all their assets to a minor child. Most state laws require a guardianship until the minor is 18. This is an expensive process and one of the unanticipated circumstance people fail to recognize is that the ex-spouse usually is appointed guardian. While this may be acceptable under some circumstances, most individuals balk at the thought of their ex-spouse getting control over all the assets. Therefore, it is strongly recommended that a client dealing with or already divorced set up a trust to handle any assets that may pass for the benefit of a minor.

In addition, some states such as Florida have unique restrictions on the devise of homestead. For example, if you have minor children, you may be required to leave your homestead to them regardless of what your Will provides. Just imagine the irony, you pass away leaving everything to your minor child, and then your ex-spouse moves into your home as the nominated guardian of your minor child.

Proper planning by anyone leaving you assets may also mitigate the effects of a future divorce. By leaving assets in trust, it may be possible to ensure they are not counted against a party for equitable division. It is important to see an attorney well versed in this area, as this is a constantly evolving area of the law.

These are just a few of the circumstances we often encounter when dealing with the estate of an individual who is in the process of a divorce or who has failed to update documents after a divorce. Here is a quick checklist to address some of the most prevalent issues:
  1. Update your Will and/or trust;
  2. Update your Durable Power of Attorney, Living Will, or Health Care Surrogate;
  3. Update your beneficiary designations on all accounts and insurance policies;
  4. Review how your cars are titled;
  5. Update and/or nominate a guardian for any minor children and for yourself;
  6. Ensure your house is properly titled and/or devised in your will;
  7. Review the titling of all financial accounts;
  8. Revoke all prior estate planning documents and powers of attorney;
  9. Ensure all post-divorce settlement requirement are handled (i.e. life insurance); and
  10. Speak with relatives (i.e. parents) to ensure their estate plans take into consideration your divorce. 
Written by D.W. Craig Dreyer, Esq.

Thursday, February 5, 2015


Following years of national grassroots advocacy efforts, the community of individuals with special needs and their family members will have at their disposal a new tool with which to maintain a private fund of assets while preserving certain  
government benefits. On December 19, 2014, the President  
signed the Achieving Better Life Experience Act, commonly 
known as the ABLE Act. The Act, modeled after Internal Revenue 
Code Section 529 Plans, provides a mechanism to fund an 
account in the name of an individual, and allow the funds in that  
account to accumulate income tax-free. More meaningful than 
the tax benefit is the new-found freedom given to a person with 
disabilities, who can retain public benefit eligibility while controlling 
assets in excess of the $2,000 SSI and Medicaid resource cap  
from one month into the next.

ABLE was first introduced in Congress in 2008. As originally drafted, the Act amended Section 529 of the Internal Revenue Code and provided for thresholds tied to that section's permitted amounts in each state. This meant that, in states with high Section 529 limits, a person could potentially have funded their ABLE Act Account with hundreds of thousands of dollars. Advocates wanted a simple and easy way to provide independence without having to place those funds in trust, and without the need to hire professionals or have court intervention. But, as is typical in politics,the anticipated costs for such an approach exceeded the political will to pass it in its original form.

The bill was amended several times over three different congressional sessions, while continually gaining bi-partisan support of a vast majority of the members of both houses. The most dramatic changes occurred during the mark up of the bill at a committee hearing in July of 2014. Fiscally, those amendments reduced the anticipated expense of the bill by $17 billion. Politically, the changes allowed supporters in Congress to attach the bill to a large end-of-session tax package bill under which it passed. The Act, as finally approved, is a shell of its former self, providing far more limited benefits than many with special needs,their families, and advocates had originally hoped.

After years of hearing what the ABLE Act might do, it is essential to understand what a person can do under the final version of the Act that the President signed into law. 

At this point, the passage of the Act alone does not allow a person to do anything, at least not yet. State action is necessary for the Act to be implemented in all 50 States. Remember, the Act is tied to each state's 529 plans. So, the actual opening of an ABLE Act account for a person will not likely occur until the latter part of 2015, and, in some states, may not occur until 2016, depending on the speed of action at the state level. Once it is finally implemented in your state, what will happen?

Under the terms of the new law, in order to be eligible for an ABLE account, the onset of the individual's disability must have occurred prior to age 26. Each calendar year, you, or another person for your benefit, can deposit cash up to the federal annual gift tax exclusion amount, presently $14,000, into an account in your name to be reported under your Social Security number. These contributions are not tax-deductible. Total contributions into the ABLE account are capped at each state's limitations for 529 accounts and the first $100,000 in an ABLE account will not adversely affect the individual's eligibility for SSI. So long as you only use the funds in that account for permitted government approved disability-related expenditures, the account will be permitted to accrue value income tax-free. 

Although the Medicaid and SSI resource eligibility cap is $2,000 in most states, the funds in the ABLE Act account will be ignored as an available resource in the same way that a properly drafted and administered special needs trust (SNT) is not counted. Each person is allowed to have only one ABLE Act account, so if you open one, family members cannot open separate ones and fund more. Thus, in any calendar year, $14,000 is the most permitted to be set aside for your benefit, whether you are funding it or someone else is. The account may be added to each year, but once the value exceeds $100,000, you will lose your SSI eligibility. Notably, you may still be eligible for Medicaid, so you would keep your medical coverage, but lose your monthly income supplement.

On the death of the beneficiary of the ABLE account, funds remaining in the ABLE account must first be used to repay the Medicaid program for expenses incurred. This is very similar to a first party SNT. First party SNTs are funded by a person's own assets and (other than
pooled trusts) must be created by a court, a parent, grandparent or guardian. In contrast, third party SNTs are created by someone other than the beneficiary with disabilities, and the assets going into the SNT are those of the third party, not the beneficiary. Third party SNTs are the most common tool utilized by special needs planners for individuals with special needs and their families.

The singularly most important difference between a first party SNT and a third party SNT is that under a first party SNT, if there are any funds remaining in the trust at the time of the beneficiary's death, then the federal and state government must be named as the primary remainder beneficiary. The government effectively seizes those funds to repay the amount of Medicaid (but not SSI) benefits allocated to the individual during his or her lifetime. The final figure repaid to Medicaid could wipe out the amount left in the first party SNT, leaving nothing to the surviving family members.

With a third party SNT, there is no Medicaid payback requirement. The trust funds can pass to another family member or whomever the creator of the trust originally intended, rather than going to the government.

Unfortunately, the ABLE Act accounts mimic first party SNTs, meaning that they require a Medicaid payback. This holds true even if the money contributed to the ABLE account came from a parent or other third party. This is a major distinction between an ABLE account and a third party SNT, which has no Medicaid payback. Thus, in many family situations, a third party SNT may be a more useful and appropriate tool than an ABLE Act account.

ABLE Act accounts were supposed to reduce the need for court intervention and to make it easier for individuals with special needs to increase their independence while retaining more funds in their own names. Simplicity was the goal. But Congress's limiting the contributions to $14,000 per year and requiring proof of disability onset by age 26, changed the dynamic entirely. Most inheritances and lawsuit awards, which previously created the need for an SNT, will still require an SNT going forward. Further, there are complicated rules as to permitted expenditures. If funds are not managed and spent properly, both the tax benefit and the Medicaid eligibility may be lost entirely. Simplicity was not achieved.

Those receiving public benefits and their loved ones must be diligent in preserving their benefits. In some situations, an ABLE Act account will be another tool towards that objective.  For individuals trying to progress to work, or who are turning 18 and have had family members who previously funded more than $2,000 into a Uniform Gift (or Transfer) to Minor's Account on their behalf, the ABLE Act provides an advantageous alternative to obtaining court approval to create a first party SNT. But for most folks, the funds at issue exceed $14,000, so an ABLE Act account, alone, will not resolve all the issues. 

Estate and financial planning for individuals with special needs is complex. While the ABLE account is a welcome addition to the tool box, it should not be set up in a vacuum. Each family's particular circumstances should be taken into account in deciding what is best for them. This can only be achieved with the guidance of competent professionals who will be able to offer practical solutions to meet your family's needs.

Source:  Written by Robert F. Brogan and Bernard A. Krooks who are members of the Special Needs Alliance (SNA).  February 2015, EP Magazine, eparent.com.

Friday, October 24, 2014


Our clients often look over the piles of paper (old financial records, mostly) accumulating in their homes, and ask us whether they really need to keep all that stuff. Is it important to hold on to all those documents for legal, tax or other reasons?
Sometimes, by the way, the question comes from clients who are cleaning out their parents’ homes. True story: when my own mother moved from her home of almost fifty years a few years ago, I helped clean out closets of old files and records. I found my parents’ check register from the month I was born (and, of course, months and months before and after). Excited, I figured I could find out how much they paid the doctor. Not having found an entry, I am now mostly worried about being repossessed.
But back to our question. What do you need to keep? Here are a couple things to keep:
  • Tax records for the past seven years. Why seven years? Because the federal statute of limitations for taxes is generally six years (that’s not quite right, incidentally, but assuming you are not committing tax fraud you can rely on that figure), and keeping one extra year makes sure you have documentation if something does come up. But before we move on, let’s make a couple points here: your old bank statements, cancelled checks for non-deductible items like utilities for your home, and an awful lot of the paper people tend to throw into the “tax” file are simply not important for tax purposes. And keeping what you do keep in an electronic format is perfectly fine. So you can probably clean out quite a bit of that “tax” file, too.
  • Original documents with independent significance. What do we mean by that? Wills, trusts, powers of attorney, deeds, auto titles, birth certificates, marriage licenses, death certificates — all of these can be needed to prove the date and circumstances of the underlying events, or to effect your wishes. Keep them. Copies can mostly be discarded (with a couple exceptions — see the next point).
  • Copies of important documents if you don’t have the original. Don’t have an original death certificate for a parent or spouse who died years ago? OK — then keep that photocopy. It won’t be useable as a copy, but it will be helpful in the effort to get a new certified copy. Also keep copies of wills, trusts and powers of attorney if you don’t have the originals — copies of your trust and powers of attorney might be just fine, and even a copy of your will can be used if your heirs can convince the court you lost the original, rather than tearing it up. By the way, if you can’t find the original of your will, that might mean it’s time to make an appointment to update your estate plan. But that’s a different issue.
  • Receipts showing payments for improvements to your home. Not a big deal for most people, but this one can make a difference. If the gain on your home is going to be substantial, or you will sell it more than five years after you move out, then you will want to be able to show how much you spent on improving the house. This won’t make a difference for most people, but it will for a few.
  • Electronic copies of at least some of the things you plan on throwing away. Don’t bother to scan everything, but you might make a pile of documents you think you might regret destroying later, and scan that pile.
That’s not a complete list, but it does include most of the things you actually have to keep. For more detail and some other suggestions, consider the federal government’s suggested list of things to hold on to. We like their description of a process (collect all your papers from around the house and make three piles — “Active File,” “Dead Storage” and “Items to Discard”) but we think following their advice will still leave you awash in unnecessary paper.
So what can you actually throw away? Maybe it will help if you start with the stuff you just don’t need to keep any more. We have some suggestions for the discard pile, but first we want you to think about creating two separate piles of documents you’re not going to keep: one for the trash (or recycling), and the other to be shredded. Anything with an account number (even a closed account) or any personal information should go into the “shred” pile.
Things you could throw away or shred, as appropriate:
  • Old bank records. By “old” we mean not likely to be needed for tax returns, so anything seven years old is safe to shred. Even more recent records can be shredded if you’re a little selective. Bank statements more than three years old are safe to shred, as are most cancelled checks. Does your bank make statements available online? Then shred them all.
  • Unnecessary copies of important documents. Do you have your original will, trust, house deeds at hand? Put them in a safe place and shred all the copies you have lying around. They are more likely to confuse your family and heirs than to be helpful. But keep track of those originals, please — and keep the copies (of current documents ONLY) if you have already misplaced the originals.
  • Appliance manuals. We know — the federal government is very clear about keeping these documents so long as you have the appliance. That is probably because the federal government has not heard about the internet. And when you finally replace your refrigerator, will you remember to pull out the ten-year-old manual and send it with the appliance? Of course not. OK — keep the current ones if you want, but throw out the ones for appliances you have discarded over the years. At the same time you might hunt for that pile of now-useless remote controls and plug adapters, and throw them out, too.
This is a good topic, and we will probably revisit it on another occasion. In the meantime, maybe you have your own suggestions for things you think people hold on to too long. But let us just make one more point about that federal government list of things to hold on to: we think the idea of writing down all your passwords and keeping them in a safe place is a mistake. And that’s another topic for a future entry.

Source:  Written by Robert Fleming, Fleming & Curti PLC, Legal Issues Newsletter, 8/4/14.

Friday, August 1, 2014

Avoid Problems of Do-It-Yourself Estate Planning

Many people only find out when it's too late that their estate plans contain costly errors. Mistakes aren't necessarily limited to lay people using do-it-yourself kits; inexperienced estate planners make mistakes too. Here are some overlooked issues that may occur without the advice of a practiced estate planning attorney.

Non-probate asset titling has increased in popularity over the years. The benefits of joint titling of assets and beneficiary designations are often overlooked when planning one's estate without professional help. For example, assets allowed to pass to designated beneficiaries upon the death of a principal include life insurance, trusts, joint tenancy with right of survivorship (JTROS) accounts, pay on death (POD) accounts, annuities and 401K/IRA accounts. These are all non-probate assets. However, virtually any asset, including a homestead, can be set up as a non-probate asset.

Though the documents are completely different, confusing a Will for a power of attorney and a Living Will is a common mistake. A Will expresses who will inherit your assets, and it goes into effect after you die. A power of attorney appoints an agent of your choosing to handle your financial affairs during your lifetime, and upon your death it becomes invalid. While modern medicine has increased longevity, diseases like Alzheimer's, Parkinson's and Dementia are creating financial hardships for many families. Having a properly drafted and executed POA, before mental capacity is lost, is essential for a family to be able to access and restructure assets when seeking eligibility for long-term care benefits. A Living Will, also known as a Directive to Physicians, is a document that controls decision making involving the use of life support.

Low cost estate planning kits offered on television commercials or Internet websites present a host of problems potentially costing a family thousands to hundreds of thousands of dollars. These kits contain one-size-fits-all forms into which you fill in the blanks. Using these documents jeopardizes the choices you thought you had carefully made. Here are a few issues that could arise.

Even if enforceable by the court, because of the document's form or phrasing, what you intended is open to challenge;
What you intended may not be enforceable by the court;
You did not intend what may otherwise be enforceable by the court;
Though the document is correctly drafted and enforceable at the time of signing, the document may not account for changes in circumstances that would alter your intentions, making it potentially unenforceable;
Though the document is correctly drafted and enforceable at the time of signing, you may be unaware of options, such as certain types of trusts, that would better protect your assets or reduce taxes;
When you die, your Will could be challenged by an unhappy relative, forcing your heirs to hire an attorney in a costly probate battle.

Estate plans should be reviewed annually for updates and changes in the law, or, upon major life events, including birth, death, marriage and divorce, disability and large asset gains.

Don't put your life and your hard-earned assets into a cookie-cutter plan. Seek advice from an experienced estate planning attorney before you make some of the most important decisions of a lifetime.

Source:  By Wesley E. Wright and Molly Dear Abshire, as published in the Houston Chronicle on June 18th, 2014