Two U.S. senators have introduced legislation that would end the practice of nursing home residents signing away their right to a trial before any actual dispute with the facility has arisen.
Nursing homes are increasingly asking -- or forcing -- patients and their families to sign arbitration agreements prior to admission. By signing these agreements, patients or family members give up their right to sue if they believe the nursing home was responsible for injuries or the patient's death. The Fairness in Nursing Home Arbitration Act, introduced by Sens. Mel Martinez (R-FL) and Herb Kohl (D-WI), chairman of the Special Committee on Aging, would make arbitration agreements signed before a dispute arises unenforceable, although it would still permit the parties to agree to arbitration after a dispute over care has arisen.
"When a family makes the difficult decision to help a loved one enter a nursing home, among the primary considerations is quality care. Forcing a family to choose between quality care and forgoing their rights within the judicial system is unfair and beyond the scope of the intent of arbitration laws," said Sen. Martinez. "This effort restores the original intent and tells families that they don't have to sign away their rights in order to access quality care."
The increased use of arbitration agreements has been paying off for the nursing home industry, according to a recent article in the Wall Street Journal. A study by Aon Global Risk Consulting projects that nursing homes' average costs per claim will drop from about $226,000 for incidents that took place in 1999 to about $146,000 for incidents that took place in 2006.
Theresa Bourdon, one of the study's authors and an Aon managing director, says that out of more than 200 claims she looked at that were subject to arbitration, none has yielded a multimillion-dollar payout. "We are not seeing big pops," Ms. Bourdon says.
But as industry litigation costs have been dropping, claims of poor treatment are on the rise, the Wall Street Journal reports. Meanwhile, patient advocates say that those seeking admission to a nursing home are in no position to make a determination about giving up their right to sue. Courts have sometimes struck down arbitration agreements as unfair, but others have upheld them. In Ohio last year, a court upheld an agreement signed by a woman who had entered a home from a hospital and was suffering intermittent bouts of confusion.
Source: www.elderlawanswers.com; 4/14/08
Friday, April 25, 2008
Friday, April 11, 2008
New Tax Break Helps Surviving Spouses
Widows and widowers who don't want to sell their house right away will get a tax break under a new law. The law gives surviving spouses two years to sell their house and receive the full $500,000 capital gains exclusion that married couples are entitled to.
Couples who are married and file taxes jointly can sell their main residence and exclude up to $500,000 of the gain from the sale from their gross income. Single individuals can exclude only $250,000. Under the previous law, if a spouse died, the surviving spouse could file jointly -- and therefore get the full $500,000 exclusion -- only for the year in which the spouse died. The new law allows surviving spouses to get the full $500,000 exclusion if they sell their house within two years of the date of the spouse's death and other ownership and use requirements have been met. The result is that widows or widowers who sell within two years may not have to pay any capital gains tax on the sale of the home.
Couples who are married and file taxes jointly can sell their main residence and exclude up to $500,000 of the gain from the sale from their gross income. Single individuals can exclude only $250,000. Under the previous law, if a spouse died, the surviving spouse could file jointly -- and therefore get the full $500,000 exclusion -- only for the year in which the spouse died. The new law allows surviving spouses to get the full $500,000 exclusion if they sell their house within two years of the date of the spouse's death and other ownership and use requirements have been met. The result is that widows or widowers who sell within two years may not have to pay any capital gains tax on the sale of the home.
Tuesday, April 1, 2008
Estate Planning for Families with Special Needs Children
Introduction: Families with special needs children must exercise extra care in making their estate plans. This is true whether their special needs child is still a minor or now an adult, and particularly so when the child is – or in the foreseeable future will be -- receiving needs-based public benefits such as SSI or Medicaid. While planning considerations for such a child will vary depending upon the child’s age, competency, and other family considerations, the goal is always the same: parents want their estates utilized to enhance and enrich the life of their special needs child while maintaining the child’s enrollment in essential public benefits programs. These goals can be met through the use of a properly prepared special needs trust.
The essence of all special needs estate planning is to ensure that the portion of the parents’ estate which passes to their special needs child at the time of their death is not considered an “available asset,” as defined by public benefit agencies. Parents must be mindful of both income and principal, as too much monthly income, as well as too much “cash,” can negatively impact their child’s future eligibility for benefits.
Purpose: Special needs planning works to preserve public benefits for the disabled child while supplementing and enhancing the quality of the child’s life. This type of planning is useful for many different purposes, including
lifetime money management for the benefit of the disabled child;
protecting the child’s eligibility for public benefits; and
ensuring a pool of funds available for future use in the event public funding should cease or be restricted.
Planning Options: The options available to families in making an estate plan for a special needs child who is receiving needs-based public benefits include the following:
Disinherit the child. This is the simplest option, but it does nothing to accomplish the essential purpose of enriching the life of the special needs child.
Give the estate to the brothers and sisters. At the parents’ death the entirety of the estate is distributed to the child’s siblings, with the understanding that they will “take care of” their disabled brother or sister. There are inherent risks with such an approach, including claims by the siblings’ creditors, bankruptcy, divorce, mismanagement of funds, etc. This may be appropriate when the child’s potential inheritance is modest.
Leave an inheritance to the disabled child. The outcome of this planning option will be the almost certain negative impact on the child’s continued eligibility for publicly funded benefits. At the least, benefits may be reduced. In the worst case scenario, the child may be rendered ineligible for SSI and Medicaid, and with this ineligibility for assisted housing, supported employment, vocational rehabilitation, group housing, job coaching, attendant personal care aides, and transportation assistance. The key benefit is Medicaid, as this program represents the child’s ability to access not only essential health care but many other public assistance programs.
Leave any inheritance in a Special Needs Trust. This last option will be preferred by most families in their efforts to provide and ensure a positive outcome for a special needs child. By using a properly drafted – and properly administered – Special Needs Trust, the child will continue to qualify for public assistance programs that would otherwise be unavailable to the child, especially the “means tested” programs that require the child to meet strict financial eligibility criteria. A Special Needs Trust works because the assets held in the trust are not “available” to the child. These types of trusts must be discretionary spendthrift trusts, with strict limits on the trustee’s ability to give money to the child. Under no circumstances can the special needs child force the trustee to make trust money available to the child. An additional benefit of the Special Needs Trust is that because the child is often unable to manage his or her own finances, the parents, in creating the trust, will appoint a trustee to act as the child’s money manager, and in so doing, ensure proper financial management after their death.
During Life or at Death? Families have the option of creating a Special Needs Trust at their death by incorporating a trust within a Last Will and Testament – this is called a “testamentary trust.”
The other option is for the parents to create a Special Needs Trust while alive -- not surprisingly, this is often referred to as a “living trust” (or inter vivos trust). The advantages of the living trust include:
the avoidance of a probate;
the creation of a trust to which other family members can make contributions, most usually the grandparents; and
an opportunity for a co-trustee to gain “hands on” experience in administrating the trust.
Revocable or Irrevocable? Tax considerations come into play in the decision to make the Special Needs Trust either revocable or irrevocable. Generally speaking, the family will make the trust revocable whenever:
the goals include maintaining maximum control over the trust; and
the family is not concerned with income tax considerations.
Correspondingly, the use of an irrevocable trust may be appropriate when the family is concerned with:
income tax considerations; and
if more than a million dollars will be going into the trust, possible federal estate and gift taxes.
Tax planning is beyond the scope of this article, so be sure to consult with your attorney, CPA or financial advisor if there are any special tax considerations in the creation of your Special Needs Trust.
Selecting Your Trustee: The Trustee will be responsible for administering your Special Needs Trust. So selecting your Trustee is one of the most important decisions your family will make in ensuring the long-term success of your Special Needs Trust. Given the natural pressures inherent in all families, someone in your family may consider the funds in the Special Needs Trust as “their” money, rather than the money of your special needs child. This can be a dangerous situation, especially as to your child’s continued eligibility for public benefits. In most families, it is best to consider selecting an independent, non-family member to serve as your Special Needs Trustee. The range of options includes:
a parent, sibling or another “distant” relative;
your attorney;
a Trust company or a financial institution;
a non-profit organization -- especially one with experience in special needs; or
co-Trustees, usually a family member acting with a trust company.
The selection of any of these potential Trustees has both advantages and disadvantages. You should closely counsel with your attorney or financial advisor before making your Trustee selection.
Conclusion: This brief summary is just the start of your enquiry as you begin your special needs estate plan. By working closely with your attorney, your CPA, and your financial planner, you will develop a much greater understanding of the options available to you and your family in making an appropriate estate plan for your special needs child. After making your wishes known and getting the appropriate documents in place, you will have taken crucial steps in assuring that this child will receive proper care when you are no longer able to provide that care yourself.
Source: www.specialneedsalliance.com
The essence of all special needs estate planning is to ensure that the portion of the parents’ estate which passes to their special needs child at the time of their death is not considered an “available asset,” as defined by public benefit agencies. Parents must be mindful of both income and principal, as too much monthly income, as well as too much “cash,” can negatively impact their child’s future eligibility for benefits.
Purpose: Special needs planning works to preserve public benefits for the disabled child while supplementing and enhancing the quality of the child’s life. This type of planning is useful for many different purposes, including
lifetime money management for the benefit of the disabled child;
protecting the child’s eligibility for public benefits; and
ensuring a pool of funds available for future use in the event public funding should cease or be restricted.
Planning Options: The options available to families in making an estate plan for a special needs child who is receiving needs-based public benefits include the following:
Disinherit the child. This is the simplest option, but it does nothing to accomplish the essential purpose of enriching the life of the special needs child.
Give the estate to the brothers and sisters. At the parents’ death the entirety of the estate is distributed to the child’s siblings, with the understanding that they will “take care of” their disabled brother or sister. There are inherent risks with such an approach, including claims by the siblings’ creditors, bankruptcy, divorce, mismanagement of funds, etc. This may be appropriate when the child’s potential inheritance is modest.
Leave an inheritance to the disabled child. The outcome of this planning option will be the almost certain negative impact on the child’s continued eligibility for publicly funded benefits. At the least, benefits may be reduced. In the worst case scenario, the child may be rendered ineligible for SSI and Medicaid, and with this ineligibility for assisted housing, supported employment, vocational rehabilitation, group housing, job coaching, attendant personal care aides, and transportation assistance. The key benefit is Medicaid, as this program represents the child’s ability to access not only essential health care but many other public assistance programs.
Leave any inheritance in a Special Needs Trust. This last option will be preferred by most families in their efforts to provide and ensure a positive outcome for a special needs child. By using a properly drafted – and properly administered – Special Needs Trust, the child will continue to qualify for public assistance programs that would otherwise be unavailable to the child, especially the “means tested” programs that require the child to meet strict financial eligibility criteria. A Special Needs Trust works because the assets held in the trust are not “available” to the child. These types of trusts must be discretionary spendthrift trusts, with strict limits on the trustee’s ability to give money to the child. Under no circumstances can the special needs child force the trustee to make trust money available to the child. An additional benefit of the Special Needs Trust is that because the child is often unable to manage his or her own finances, the parents, in creating the trust, will appoint a trustee to act as the child’s money manager, and in so doing, ensure proper financial management after their death.
During Life or at Death? Families have the option of creating a Special Needs Trust at their death by incorporating a trust within a Last Will and Testament – this is called a “testamentary trust.”
The other option is for the parents to create a Special Needs Trust while alive -- not surprisingly, this is often referred to as a “living trust” (or inter vivos trust). The advantages of the living trust include:
the avoidance of a probate;
the creation of a trust to which other family members can make contributions, most usually the grandparents; and
an opportunity for a co-trustee to gain “hands on” experience in administrating the trust.
Revocable or Irrevocable? Tax considerations come into play in the decision to make the Special Needs Trust either revocable or irrevocable. Generally speaking, the family will make the trust revocable whenever:
the goals include maintaining maximum control over the trust; and
the family is not concerned with income tax considerations.
Correspondingly, the use of an irrevocable trust may be appropriate when the family is concerned with:
income tax considerations; and
if more than a million dollars will be going into the trust, possible federal estate and gift taxes.
Tax planning is beyond the scope of this article, so be sure to consult with your attorney, CPA or financial advisor if there are any special tax considerations in the creation of your Special Needs Trust.
Selecting Your Trustee: The Trustee will be responsible for administering your Special Needs Trust. So selecting your Trustee is one of the most important decisions your family will make in ensuring the long-term success of your Special Needs Trust. Given the natural pressures inherent in all families, someone in your family may consider the funds in the Special Needs Trust as “their” money, rather than the money of your special needs child. This can be a dangerous situation, especially as to your child’s continued eligibility for public benefits. In most families, it is best to consider selecting an independent, non-family member to serve as your Special Needs Trustee. The range of options includes:
a parent, sibling or another “distant” relative;
your attorney;
a Trust company or a financial institution;
a non-profit organization -- especially one with experience in special needs; or
co-Trustees, usually a family member acting with a trust company.
The selection of any of these potential Trustees has both advantages and disadvantages. You should closely counsel with your attorney or financial advisor before making your Trustee selection.
Conclusion: This brief summary is just the start of your enquiry as you begin your special needs estate plan. By working closely with your attorney, your CPA, and your financial planner, you will develop a much greater understanding of the options available to you and your family in making an appropriate estate plan for your special needs child. After making your wishes known and getting the appropriate documents in place, you will have taken crucial steps in assuring that this child will receive proper care when you are no longer able to provide that care yourself.
Source: www.specialneedsalliance.com
Friday, March 7, 2008
Durable Power of Attorney
A durable power of attorney is one of the most important estate planning documents you can have. It allows you to appoint someone to act for you (your "agent" or "attorney-in-fact") if you become incapacitated. Without a power of attorney, your loved ones would not be able to make decisions for you or manage your finances without asking the court to appoint a guardian, which is an expensive and time-consuming process.
There are many do-it-yourself power of attorney forms available; however, it is a good idea to have our attorneys draft the form for you. There are many issues to consider and one size does not fit all.
The agent's powers
The power of attorney document sets out the agent's powers. Powers given to an agent typically include buying or selling property, managing a business, paying debts, investing money, engaging in legal proceedings, borrowing money, cashing checks, and collecting debts. Some powers will not be included unless they are specifically mentioned. This includes, but is not limited to, the power to make gifts and the power to designate beneficiaries of your insurance policies.
The power to make gifts of your money and property is a particularly important power. If you want to ensure your agent has the authority to do Medicaid or estate planning on your behalf then the power of attorney must give the agent the power to modify trusts and make gifts. The wording in a power of attorney can be significant, so it is necessary to consult with our attorneys.
Springing or immediate
The power of attorney can take affect immediately or it can become effective only once your are disabled, called a "springing" power of attorney. While a springing power seems like a good idea, it can cause delays and extra expense because incapacity will need to be determined. If the power of attorney is springing, it is very important that the method for determining incapacity is clearly spelled out in the document.
Joint agents
While it is possible to name more than one person as your agent, this can lead to confusion. If you do have more than one person named, you need to be clear whether both parties need to act together or whether they can act independently. It might make more sense and be less confusing to name an alternative agent to act in case the first agent is unable to.
Executing the power of attorney
To be valid, a power of attorney must be notarized.
Accepting a power of attorney
Even if you do everything exactly right, some banks and other institutions are reluctant to accept a power of attorney. These institutions are afraid of a lawsuit if the power of attorney is no longer valid. Many banks or other financial institutions have their own standard power of attorney forms. To avoid problems, you many want to execute the forms offered by the institutions with which you have accounts. According to a MarketWatch.com article, you need to be careful that you don't sign a bank's document that inadvertently restricts a power of attorney's ability to deal with other assets, and you should check that any document you sign with a bank match the original power of attorney. We would be pleased to review with you all your powers of attorney to make sure that there are no conflicts.
There are many do-it-yourself power of attorney forms available; however, it is a good idea to have our attorneys draft the form for you. There are many issues to consider and one size does not fit all.
The agent's powers
The power of attorney document sets out the agent's powers. Powers given to an agent typically include buying or selling property, managing a business, paying debts, investing money, engaging in legal proceedings, borrowing money, cashing checks, and collecting debts. Some powers will not be included unless they are specifically mentioned. This includes, but is not limited to, the power to make gifts and the power to designate beneficiaries of your insurance policies.
The power to make gifts of your money and property is a particularly important power. If you want to ensure your agent has the authority to do Medicaid or estate planning on your behalf then the power of attorney must give the agent the power to modify trusts and make gifts. The wording in a power of attorney can be significant, so it is necessary to consult with our attorneys.
Springing or immediate
The power of attorney can take affect immediately or it can become effective only once your are disabled, called a "springing" power of attorney. While a springing power seems like a good idea, it can cause delays and extra expense because incapacity will need to be determined. If the power of attorney is springing, it is very important that the method for determining incapacity is clearly spelled out in the document.
Joint agents
While it is possible to name more than one person as your agent, this can lead to confusion. If you do have more than one person named, you need to be clear whether both parties need to act together or whether they can act independently. It might make more sense and be less confusing to name an alternative agent to act in case the first agent is unable to.
Executing the power of attorney
To be valid, a power of attorney must be notarized.
Accepting a power of attorney
Even if you do everything exactly right, some banks and other institutions are reluctant to accept a power of attorney. These institutions are afraid of a lawsuit if the power of attorney is no longer valid. Many banks or other financial institutions have their own standard power of attorney forms. To avoid problems, you many want to execute the forms offered by the institutions with which you have accounts. According to a MarketWatch.com article, you need to be careful that you don't sign a bank's document that inadvertently restricts a power of attorney's ability to deal with other assets, and you should check that any document you sign with a bank match the original power of attorney. We would be pleased to review with you all your powers of attorney to make sure that there are no conflicts.
Friday, February 15, 2008
What is an UTMA account?
Paul’s son Mark has cerebral palsy. When Mark turned 18 he was approved for Supplemental Security Income (SSI) payments and Medicaid, with Paul as the representative payee for his son’s benefits. When Paul applied for Mark’s SSI he disclosed to the Social Security Administration that Mark had a Uniform Transfers to Minors Act account (UTMA) with a $30,000 balance. Social Security assured Paul that the UTMA account would not affect Mark’s eligibility for benefits.
Mark is now 25 years old. Last week Paul got a notice from the Social Security Administration that Mark’s SSI is being cut off because of his UTMA account and that Mark would have to repay two years of benefits totaling over $14,000. Paul was stunned. He had disclosed the UTMA account when Mark first applied for SSI and he had been diligent about complying with all of SSI’s rules.
What is a UTMA account? UTMA accounts are controlled by state law. South Carolina and Vermont still call this type of account by an earlier name: Uniform Gifts to Minors Act (UGMA) accounts. Both types of accounts are designed to hold money that is given to a minor child. In Mark’s case the UTMA account was opened up when he was a baby to hold periodic cash gifts made by his grandparents. Though parents and grandparents knew at the time that Mark would have a disability throughout his life, they were hopeful that the money would help make him more independent and comfortable, and that his functional abilities might improve as he grew up.
A UTMA account is legally owned by the child and even lists the child’s Social Security number. The funds are controlled by a “custodian,” but the custodian is required to hold and use the money for the benefit of the child. The account resembles a simplified trust arrangement, with its terms set by state statutes. State law determines when the UTMA account will terminate. Depending on the state and the circumstances, the account terminates when the child reaches the age specified in the state law, usually either 18 or 21. The balance in the UTMA account is then legally available to the (now adult) child.
How does SSI treat UTMA accounts? Social Security’s Program Operation Manual System (POMS) provides that Social Security will not count a UTMA account as an available resource for SSI purposes until the account is considered available under state law (POMS 01120.205). Interest or dividend income generated from a UTMA account is also not counted as income of the SSI recipient. Of course, if the custodian makes a distribution of cash to the child from the account the payment would be counted as income to the child for that month. SSI does count the UTMA account as an available asset in the month in which the child reaches the age at which state law requires that the account be terminated.
Unfortunately the Social Security Administration does not remind parents of a child approaching majority that a UTMA account may soon be counted as an available asset. In Mark’s case his UTMA account of $30,000 made him ineligible for SSI and Medicaid as of his twenty-first birthday, when the law in his state mandated that the account became available. Because the Social Security Administration determined that Paul as the representative payee was not “at fault” in creating the overpayment, the recovery was limited to two years instead of four. It took Social Security four years to make the connection, but once the determination was made the ineligibility was retroactive to Mark’s twenty-first birthday.
Missed opportunity: Before Mark turned 21 the UTMA account could have been transferred into a special needs trust for Mark’s benefit. This would most likely be a “Medicaid payback” special needs trust since the trust would be funded with Mark’s own money—even though the funds originally came from Mark’s grandparents. In some circumstances (and states), it may even be possible to avoid the necessity of establishing a payback trust at all, but the key is to decide how to proceed before the child reaches the age set by state law.
In Mark’s case, after Paul repays the Social Security Administration for the overpayment he can still transfer the remaining funds into a payback trust so that Mark can re-qualify for SSI as of the first of the next month. Paul can also consider the possibility of transferring the UTMA balance to a pooled trust; given the amount of money and Mark’s young age, it may be more cost-efficient to take this approach. It may even be possible to make purchases for Mark’s benefit (like adaptive equipment, or the dental work that Mark needs) that could eliminate the need for a trust at all. Unfortunately, in Mark's case it is too late to save the $14,000 that the Social Security Administration will claim for its overpayment.
Lesson learned: Parents, financial advisors and legal counsel should do a check of any UTMA accounts for a child approaching the age of majority in cases of disability. It is easy to avoid a serious eligibility issue with important government benefits by transferring the UTMA account into a special needs trust before the account is available to the child. As always, competent legal advice can help navigate the tricky (and not always obvious) eligibility rules and procedures.
Source: Barbara A. Isenhour, Special Needs Alliance Newsletter, 2/08
Lawrence Eric Davidow is a founding member and the Treasurer of the Special Needs Alliance which is a National Alliance of Disability Lawyers. This premier alliance of leading law firms throughout the country are dedicated to the area of planning for those with Special Needs. These hand picked law firms have the resources to devise solutions and insure financial security for special needs clients nationwide. Long aware of the need for attention to this area, Mr. Davidow, along with his colleagues, formed an alliance solely dedicated to the unique challenges this area of the law presents.
Mark is now 25 years old. Last week Paul got a notice from the Social Security Administration that Mark’s SSI is being cut off because of his UTMA account and that Mark would have to repay two years of benefits totaling over $14,000. Paul was stunned. He had disclosed the UTMA account when Mark first applied for SSI and he had been diligent about complying with all of SSI’s rules.
What is a UTMA account? UTMA accounts are controlled by state law. South Carolina and Vermont still call this type of account by an earlier name: Uniform Gifts to Minors Act (UGMA) accounts. Both types of accounts are designed to hold money that is given to a minor child. In Mark’s case the UTMA account was opened up when he was a baby to hold periodic cash gifts made by his grandparents. Though parents and grandparents knew at the time that Mark would have a disability throughout his life, they were hopeful that the money would help make him more independent and comfortable, and that his functional abilities might improve as he grew up.
A UTMA account is legally owned by the child and even lists the child’s Social Security number. The funds are controlled by a “custodian,” but the custodian is required to hold and use the money for the benefit of the child. The account resembles a simplified trust arrangement, with its terms set by state statutes. State law determines when the UTMA account will terminate. Depending on the state and the circumstances, the account terminates when the child reaches the age specified in the state law, usually either 18 or 21. The balance in the UTMA account is then legally available to the (now adult) child.
How does SSI treat UTMA accounts? Social Security’s Program Operation Manual System (POMS) provides that Social Security will not count a UTMA account as an available resource for SSI purposes until the account is considered available under state law (POMS 01120.205). Interest or dividend income generated from a UTMA account is also not counted as income of the SSI recipient. Of course, if the custodian makes a distribution of cash to the child from the account the payment would be counted as income to the child for that month. SSI does count the UTMA account as an available asset in the month in which the child reaches the age at which state law requires that the account be terminated.
Unfortunately the Social Security Administration does not remind parents of a child approaching majority that a UTMA account may soon be counted as an available asset. In Mark’s case his UTMA account of $30,000 made him ineligible for SSI and Medicaid as of his twenty-first birthday, when the law in his state mandated that the account became available. Because the Social Security Administration determined that Paul as the representative payee was not “at fault” in creating the overpayment, the recovery was limited to two years instead of four. It took Social Security four years to make the connection, but once the determination was made the ineligibility was retroactive to Mark’s twenty-first birthday.
Missed opportunity: Before Mark turned 21 the UTMA account could have been transferred into a special needs trust for Mark’s benefit. This would most likely be a “Medicaid payback” special needs trust since the trust would be funded with Mark’s own money—even though the funds originally came from Mark’s grandparents. In some circumstances (and states), it may even be possible to avoid the necessity of establishing a payback trust at all, but the key is to decide how to proceed before the child reaches the age set by state law.
In Mark’s case, after Paul repays the Social Security Administration for the overpayment he can still transfer the remaining funds into a payback trust so that Mark can re-qualify for SSI as of the first of the next month. Paul can also consider the possibility of transferring the UTMA balance to a pooled trust; given the amount of money and Mark’s young age, it may be more cost-efficient to take this approach. It may even be possible to make purchases for Mark’s benefit (like adaptive equipment, or the dental work that Mark needs) that could eliminate the need for a trust at all. Unfortunately, in Mark's case it is too late to save the $14,000 that the Social Security Administration will claim for its overpayment.
Lesson learned: Parents, financial advisors and legal counsel should do a check of any UTMA accounts for a child approaching the age of majority in cases of disability. It is easy to avoid a serious eligibility issue with important government benefits by transferring the UTMA account into a special needs trust before the account is available to the child. As always, competent legal advice can help navigate the tricky (and not always obvious) eligibility rules and procedures.
Source: Barbara A. Isenhour, Special Needs Alliance Newsletter, 2/08
Lawrence Eric Davidow is a founding member and the Treasurer of the Special Needs Alliance which is a National Alliance of Disability Lawyers. This premier alliance of leading law firms throughout the country are dedicated to the area of planning for those with Special Needs. These hand picked law firms have the resources to devise solutions and insure financial security for special needs clients nationwide. Long aware of the need for attention to this area, Mr. Davidow, along with his colleagues, formed an alliance solely dedicated to the unique challenges this area of the law presents.
Friday, February 1, 2008
2008 Medicaid Only Income Exemption and Resource Levels
Released by the Office of Health Insurance Programs,
Division of Coverage and Enrollment
Due to a 2.3% cost of living adjustment for SSA payments effective January 1, 2008, several figures used in determining Medicaid eligibility must be updated. Effective January 1, 2008, Medicaid eligibility must be determined using the following updated figures:
1. Medicaid income level for 1 is $725/month or $8,700/year.
2. Medicaid income level for 2 is $1,067/month or $12,800/year.
3. Medicaid income levels for households of 3 or more remain the same as in 2007.
4. Medicaid resource levels are $4350 and $6400, for households of 1 and 2, respectively. The resource levels for households of 3 or more remain the same as in 2007.
5. Family Health Plus resource levels are $13,050 and $19,200, for households of 1 and 2, respectively. The Family Health Plus resource levels for households of 3 or more remain the same as in 2007.
6. The Supplemental Security Income federal benefit rate (FBR) for an individual living alone is $637/single and $956/couple.
7. The allocation amount is $342, the difference between the Medicaid level for a household of two ($1,067) and one ($725).
8. The 249e factors are .893 and .188.
9. The SSI resource levels remain $2,000 for individuals and $3,000 for couples.
10. The state supplement is $87 for an individual and $104 for a couple living alone.
11. The Medicare Part A premium is $423 per month.
12. The Medicare Part B standard monthly premium increases to $96.40 per month. Beginning in 2007, some enrollees, based on their incomes, will pay a higher Part B premium amount. The standard Medicare monthly Part B premium for 2008 will be $96.40. Local districts may see higher premium amounts, up to a maximum of $238.40, especially in some spousal impoverishment cases when applicants/recipients may have more monthly income than is ordinarily seen in most Medicaid cases.
13. Maximum federal Community Spouse Resource Allowance is $104,400.
14. Minimum State Community Spouse Resource Allowance is $74,820.
15. The community spouse Minimum Monthly Maintenance Needs Allowance is $2,610.
16. Maximum Family Member Allowance is $584 (estimated).
17. Family Member Allowance formula number used is $1,750 (estimated).
18. Substantial Gainful Activity (SGA): Non-Blind $940/month, Blind $1570/month, Trial Work Period (TWP) $670/month.
19. SSI-related student earned income disregard limit of $1550 monthly up to a maximum of $6240 annually.
Medicaid is a joint federal and state program designed to provide medical assistance benefits, including Nursing Home care and community based home care, to certain needy individuals who qualify and those who have properly planned. However, the process of application and eligibility is confusing and intimidating. At Davidow, Davidow, Siegel & Stern we can successfully guide you through the entire Medicaid process from establishing eligibility, the preparation of the application, gathering the necessary documents, submission of the application, follow-up to submission, to the acceptance and ongoing Medicaid eligibility.
Division of Coverage and Enrollment
Due to a 2.3% cost of living adjustment for SSA payments effective January 1, 2008, several figures used in determining Medicaid eligibility must be updated. Effective January 1, 2008, Medicaid eligibility must be determined using the following updated figures:
1. Medicaid income level for 1 is $725/month or $8,700/year.
2. Medicaid income level for 2 is $1,067/month or $12,800/year.
3. Medicaid income levels for households of 3 or more remain the same as in 2007.
4. Medicaid resource levels are $4350 and $6400, for households of 1 and 2, respectively. The resource levels for households of 3 or more remain the same as in 2007.
5. Family Health Plus resource levels are $13,050 and $19,200, for households of 1 and 2, respectively. The Family Health Plus resource levels for households of 3 or more remain the same as in 2007.
6. The Supplemental Security Income federal benefit rate (FBR) for an individual living alone is $637/single and $956/couple.
7. The allocation amount is $342, the difference between the Medicaid level for a household of two ($1,067) and one ($725).
8. The 249e factors are .893 and .188.
9. The SSI resource levels remain $2,000 for individuals and $3,000 for couples.
10. The state supplement is $87 for an individual and $104 for a couple living alone.
11. The Medicare Part A premium is $423 per month.
12. The Medicare Part B standard monthly premium increases to $96.40 per month. Beginning in 2007, some enrollees, based on their incomes, will pay a higher Part B premium amount. The standard Medicare monthly Part B premium for 2008 will be $96.40. Local districts may see higher premium amounts, up to a maximum of $238.40, especially in some spousal impoverishment cases when applicants/recipients may have more monthly income than is ordinarily seen in most Medicaid cases.
13. Maximum federal Community Spouse Resource Allowance is $104,400.
14. Minimum State Community Spouse Resource Allowance is $74,820.
15. The community spouse Minimum Monthly Maintenance Needs Allowance is $2,610.
16. Maximum Family Member Allowance is $584 (estimated).
17. Family Member Allowance formula number used is $1,750 (estimated).
18. Substantial Gainful Activity (SGA): Non-Blind $940/month, Blind $1570/month, Trial Work Period (TWP) $670/month.
19. SSI-related student earned income disregard limit of $1550 monthly up to a maximum of $6240 annually.
Medicaid is a joint federal and state program designed to provide medical assistance benefits, including Nursing Home care and community based home care, to certain needy individuals who qualify and those who have properly planned. However, the process of application and eligibility is confusing and intimidating. At Davidow, Davidow, Siegel & Stern we can successfully guide you through the entire Medicaid process from establishing eligibility, the preparation of the application, gathering the necessary documents, submission of the application, follow-up to submission, to the acceptance and ongoing Medicaid eligibility.
Tuesday, January 8, 2008
Panel Rules Same-Sex Partner Ineligible for Death Benefit
The same-sex partner of a man who died following an on-the-job accident is not entitled to the Workers’ Compensation death benefit a surviving spouse in a traditional marriage would receive, a divided upstate appeals panel ruled yesterday.
The civil union that John R. Langan and the late Neal Conrad Spicehandler entered into in Vermont in 2000 does not make Mr. Langan eligible for the death benefit as a surviving spouse under New York’s Workers’ Compensation Law §16, the court determined in Matter of Langan v. State Farm Fire & Casualty. In a 4-1 ruling, the court decided that Mr. Langan has no better claim to the death benefit than the male registered domestic partner in Matter of Valentine v. American Airlines, (2005), who sought the death benefit after his partner was killed in a 2001 plan crash in New York City.
Neither civil unions nor registered domestic partnerships are recognized as marriages under the Workers’ Compensation Law, Justice Anthony T. Kane wrote for the Third Department panel. A “legal spouse” is the “husband or wife of lawful marriage” for purposes of the statute, Justice Kane wrote, citing Valentine.
The majority ruled that its holding was also consistent with the state Court of Appeals’ landmark ruling in Hernandez v. Robles, (2006), in which the Court ruled 4-2 that New York’s Domestic Relations Law implicitly limits marriage to heterosexual couples.
The Court of Appeals has also long recognized that the Workers’ Compensation system is designed to protect the family–“husband, wife and children,” as the court put it yesterday–should spouses be injured or killed while on the job, the Third Department noted.
“The Court of Appeals has already determined that the Legislature’s decision to limit marriage to opposite-sex couples is rationally related to this legitimate interest and withstands rational basis scrutiny,” Justice Kane wrote. “The decision to extend workers’ compensation death benefits to a whole new class of beneficiaries, i.e., survivors of same-sex unions, is a decision to be made by the Legislature after appropriate inquiry into the societal obligation to provide such benefits and the financial impact of such a decision.”
The majority also ruled that comity does not bind New York state to extend Workers’ Compensation death benefits to partners in civil unions, as Vermont does for its same-sex-couple residents. “This doctrine is not a mandate to adhere to another state’s laws, but an expression of one state’s voluntary choice to defer to another state’s policy,” the court held.
The lone dissenter, Justice Robert S. Rose, found Mr. Langan’s comity argument more persuasive. Justice Rose wrote that the plaintiff is not asking for the death benefit because Vermont would confer them on him were he a resident of that state, but “only to recognize the legal status of spouse afforded to him by Vermont, as a matter of comity.”
“Once that status is recognized, New York law provides the legal incidents to which claimant would be entitled, including workers’ compensation death benefits,” the dissenter held.
Yesterday’s ruling affirmed the denial of death benefits to Mr. Langan by a Workers’ Compensation Law judge and the Workers’ Compensation Board. Mr. Langan’s appeal went directly to the Appellate Division.
Had Mr. Langan and Mr. Spicehandler been in a traditional marriage, Mr. Langan would have been eligible for a death benefit totaling two years’ worth of benefits is provided, according to the state Workers’ Compensation Board.
Mr. Spicehandler lived on Long Island with Mr. Langan and the two men had been in a relationship for 14 years before the entered into a civil union. Mr. Spicehandler was struck by a hit-and-run driver in midtown Manhattan and severely injured his leg in February 2002. He died of a blood clot two days later, following surgery.
The prospect of New York’s Legislature legalizing same-sex marriages or extending Workers’ Compensation benefis to domestic partners or couples in civil unions is considered dim as long as Republicans maintain their majority in the state Senate.
By an 85-61 vote, the Democrat-dominated state Assembly approved a bill sent by Governor Eliot Spitzer to authorize same-sex marriages on June 19. However, Senate Republican Majority Leader Joseph Burn, R-Brunswick, has said repeatedly his GOP members have no interest in taking up the bill or legalizing same-sex marriages.
The Third Department panel took 3 ½ months after hearing oral arguments to hand down its ruling in Langan. That is about twice as long as the court normally takes to decide cases and generally indicates disagreements among members of the panel over the ruling.
This was not the first time Mr. Langan has lost before the Appellate Division in a case concerning his late partner. In Langan v. St. Vincent’s Hospital (2005), a Second Department panel ruled 3-2 that same-sex partners cannot pursue a wrongful death action in New York. Mr. Langan had sought to sue St. Vincent’s Hospital for alleged maltreatment of the injuries of Mr. Spicehandler, a Massapequa attorney. The Court of Appeals dismissed an appeal of that ruling in 2006.
As this recent case proves, Gay and Lesbian couples and their families do not have the same legal rights as traditional married couples making it even more imperative to establish an estate plan. Without an estate plan, critical decisions may be left to a system that may exhibit legal prejudice and involve bloodline relatives that you may not want involved. The attorneys at Davidow, Davidow, Siegel & Stern are well versed in this area. If you require detailed information, please request a copy of our special report entitled, “Protecting the rights of non-traditional couples in the traditional world”.
Source: NY Law Journal
The civil union that John R. Langan and the late Neal Conrad Spicehandler entered into in Vermont in 2000 does not make Mr. Langan eligible for the death benefit as a surviving spouse under New York’s Workers’ Compensation Law §16, the court determined in Matter of Langan v. State Farm Fire & Casualty. In a 4-1 ruling, the court decided that Mr. Langan has no better claim to the death benefit than the male registered domestic partner in Matter of Valentine v. American Airlines, (2005), who sought the death benefit after his partner was killed in a 2001 plan crash in New York City.
Neither civil unions nor registered domestic partnerships are recognized as marriages under the Workers’ Compensation Law, Justice Anthony T. Kane wrote for the Third Department panel. A “legal spouse” is the “husband or wife of lawful marriage” for purposes of the statute, Justice Kane wrote, citing Valentine.
The majority ruled that its holding was also consistent with the state Court of Appeals’ landmark ruling in Hernandez v. Robles, (2006), in which the Court ruled 4-2 that New York’s Domestic Relations Law implicitly limits marriage to heterosexual couples.
The Court of Appeals has also long recognized that the Workers’ Compensation system is designed to protect the family–“husband, wife and children,” as the court put it yesterday–should spouses be injured or killed while on the job, the Third Department noted.
“The Court of Appeals has already determined that the Legislature’s decision to limit marriage to opposite-sex couples is rationally related to this legitimate interest and withstands rational basis scrutiny,” Justice Kane wrote. “The decision to extend workers’ compensation death benefits to a whole new class of beneficiaries, i.e., survivors of same-sex unions, is a decision to be made by the Legislature after appropriate inquiry into the societal obligation to provide such benefits and the financial impact of such a decision.”
The majority also ruled that comity does not bind New York state to extend Workers’ Compensation death benefits to partners in civil unions, as Vermont does for its same-sex-couple residents. “This doctrine is not a mandate to adhere to another state’s laws, but an expression of one state’s voluntary choice to defer to another state’s policy,” the court held.
The lone dissenter, Justice Robert S. Rose, found Mr. Langan’s comity argument more persuasive. Justice Rose wrote that the plaintiff is not asking for the death benefit because Vermont would confer them on him were he a resident of that state, but “only to recognize the legal status of spouse afforded to him by Vermont, as a matter of comity.”
“Once that status is recognized, New York law provides the legal incidents to which claimant would be entitled, including workers’ compensation death benefits,” the dissenter held.
Yesterday’s ruling affirmed the denial of death benefits to Mr. Langan by a Workers’ Compensation Law judge and the Workers’ Compensation Board. Mr. Langan’s appeal went directly to the Appellate Division.
Had Mr. Langan and Mr. Spicehandler been in a traditional marriage, Mr. Langan would have been eligible for a death benefit totaling two years’ worth of benefits is provided, according to the state Workers’ Compensation Board.
Mr. Spicehandler lived on Long Island with Mr. Langan and the two men had been in a relationship for 14 years before the entered into a civil union. Mr. Spicehandler was struck by a hit-and-run driver in midtown Manhattan and severely injured his leg in February 2002. He died of a blood clot two days later, following surgery.
The prospect of New York’s Legislature legalizing same-sex marriages or extending Workers’ Compensation benefis to domestic partners or couples in civil unions is considered dim as long as Republicans maintain their majority in the state Senate.
By an 85-61 vote, the Democrat-dominated state Assembly approved a bill sent by Governor Eliot Spitzer to authorize same-sex marriages on June 19. However, Senate Republican Majority Leader Joseph Burn, R-Brunswick, has said repeatedly his GOP members have no interest in taking up the bill or legalizing same-sex marriages.
The Third Department panel took 3 ½ months after hearing oral arguments to hand down its ruling in Langan. That is about twice as long as the court normally takes to decide cases and generally indicates disagreements among members of the panel over the ruling.
This was not the first time Mr. Langan has lost before the Appellate Division in a case concerning his late partner. In Langan v. St. Vincent’s Hospital (2005), a Second Department panel ruled 3-2 that same-sex partners cannot pursue a wrongful death action in New York. Mr. Langan had sought to sue St. Vincent’s Hospital for alleged maltreatment of the injuries of Mr. Spicehandler, a Massapequa attorney. The Court of Appeals dismissed an appeal of that ruling in 2006.
As this recent case proves, Gay and Lesbian couples and their families do not have the same legal rights as traditional married couples making it even more imperative to establish an estate plan. Without an estate plan, critical decisions may be left to a system that may exhibit legal prejudice and involve bloodline relatives that you may not want involved. The attorneys at Davidow, Davidow, Siegel & Stern are well versed in this area. If you require detailed information, please request a copy of our special report entitled, “Protecting the rights of non-traditional couples in the traditional world”.
Source: NY Law Journal
Subscribe to:
Posts (Atom)