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Probate & Estate Administration During COVID-19

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Probate Challenges and Estate Administration Roadblocks During COVID-19 Corona virus Pandemic

Many of our clients are in the midst of settling the estate of a deceased loved one or have just had a loved one pass away and are wondering what comes next. An event such as this has both personal and legal consequences. Below are observations on issues that may immediately present themselves.

Immediate steps may be limited by circumstance. If someone has just died and the cause of death is unknown, public health officials may limit the immediate steps one would usually take until the cause of death is determined and no known COVID-19 risk exists. Depending on circumstances, there may be some delay in physically getting access to the premises, securing them and searching for a will and other documents if they are not in possession of the family or the decedent’s attorney. It is always wiser to have one’s original estate planning documents safely secured off the premises and make sure a trusted individual has access to the storage place.

Once access is permitted, secure the premises if they become unoccupied. Subject to the necessary steps to ensure everyone’s safety (which may include disinfecting) the nominated personal representative may take steps, such as changing locks, necessary to secure the physical contents and financial documents which may remain in the home. These steps can be taken before one’s official appointment. If additional or condominium fees must be paid to allow enough time for an orderly inspection, appraisal, or the like, this can be treated as an expense of the estate.

The legal process of estate administration can begin and continue. While the probate courts of the states in which we conduct estate administrations have limited or closed off physical access to the public, emergency hearings (conducted telephonically) continue and many routine documents can be e-filed. Routine non-contested wills can still be allowed; while reduced staffing at courts may stretch the time frames somewhat, these processes, at least for the present, continue as before. Where that time frame may cause harm to a beneficiary or in some cases, the assets, if the court deems such circumstances an emergency, a hearing to rush the appointment of a temporary fiduciary, called a “executor” or “special personal representative,” can be requested.

Most financial activities can be conducted. With overnight shipping, and technologies such as scanning, secure e-mail, electronic funds transfers, and electronic document signatures, most financial transactions can be conducted virtually once the identities of the parties are established in a fashion compliant with the financial institution’s practices. Thus assets can be transferred to estate or trust accounts, sold and reinvested if desired in order to properly pay estate expenses and distribute funds to beneficiaries. Notarizations still require physical presence although there is a move afoot to accept signatures performed over a videoconference.

Once appointed, electronic communications are vital. As a fiduciary, personal representatives and trustees must take special care to maintain transparency and good chains of communication with each other and the beneficiaries. In a typical administration, one or more introductory or status meetings may occur between co-fiduciaries and the attorney, some with beneficiaries present. Since these will not occur during this unprecedented time, most communication should be in writing. Email has become the standard, often with multiple co-recipients.

Need to speak to an attorney about issues your confronted with during the Pandemic, call our office 401-401.648.7000 for a no cost phone consultation.

Estate Planning and the Coronavirus Pandemic

By Uncategorized

Estate Planning Amidst the Coronavirus Pandemic

The Coronavirus (COVID-19) Pandemic has impacted every corner of the world at this point. As medical experts, financial advisors, and our colleagues that specialize in healthcare law, employment law, and other related areas are busy advising clients on the best course of action for the weeks and months ahead, we – as estate planners – also want to remind our clients and friends of some important considerations during these uncertain times.

At this point, we would simply promote the following actions to ensure that your estate planning affairs are in order:

(1) Review your existing documents. Make sure that you have copies (either paper or electronic) of your existing estate planning documents, and review them to confirm that they still reflect your wishes. If you cannot locate your documents, consider calling or emailing your estate planning attorney to obtain copies.

(2) Pinpoint any items that require attention sooner rather than later. As you review, take note of any major changes that may have occurred in your family since you last updated your estate plan. These might include child births, deaths, marriages, divorces, etc. And also consider whether the individuals that you previously appointed to serve as your agents are still appropriate.

(3) Follow up with your loved ones and advisors.

  • Make sure that your loved ones know to contact your estate planning attorney in the event anything should happen to you. This includes your named executor (i.e. personal representative under your will, or trustee of your trust), guardian for your minor children, attorney-in-fact under your financial durable power of attorney, and patient advocate under your health care power of attorney.
  • Consider reaching out to your financial advisor, insurance advisor, etc. to ensure that your beneficiary designations are up to date and discuss any new planning opportunities relative to your current financial status.
  • If you require any medical attention in the near future, confirm that your medical provider has a copy of your patient advocate designation and is informed as to who you wish to have access to your confidential health information.

NOTE – If you do not already have an estate plan, now is as good of a time as any to consider the opportunity before you. Having a will/trust, a durable general power of attorney, and a healthcare power of attorney can certainly contribute to a healthy state of mind.

9 Estate Planning Terms You Need To Know

By Estate Planning

Estate Planning Terms

No one likes to think about one’s own death. However, planning ahead can help your family avoid unnecessary complications, delay, and expense. This may be done through wills, trusts, joint ownership, and life insurance. In addition, modern estate planning also includes “life” planning through powers of attorney and health care proxies. These enable someone else to act for you in the event of your incapacity. Understanding the following terms is the first step toward planning your estate. However, no estate planning steps should be taken without consulting with a qualified professional.

  • Probate

This is the name for the process in the Probate Court through which the ownership of your assets passes to your heirs. It includes the collection of your assets, the payment of your bills, and the distribution of your estate. It only covers what you own outright, not joint property, trust property, life insurance proceeds, or any assets that have beneficiaries or payable-on-death terms.

  • Will

Your will is a legally binding statement of who will receive your property at your death. It also appoints a legal representative to carry out your wishes. However, the will only covers probate property.

  • Estate Tax

The estate tax applies to both the probate and the nonprobate property of the decedent. For federal purposes, the amount free from taxation is $5.6 million as of 2018 per individual, $11.2 million per married couple. For Rhode Island, a person can pass $1,537,656 free from estate taxation.

Reading your Estate Planning documents is critical to understanding your plan

  • Marital Deduction

On the federal level, anything passing to the surviving spouse of a decedent is not included in the taxable estate and, consequently, is not subject to taxation. All of the couple’s assets are then taxed upon the death of the surviving spouse, unless an estate tax plan has been executed.

  • Trust

A trust is a legal entity under which one person—the “trustee”—holds legal title to property for the benefit of others—the “beneficiaries.” The trustee must follow the rules provided in the trust instrument. An irrevocable trust is one that cannot be changed after it has been created. A revocable trust is one that may be changed or rescinded by the person who created it. Trusts are often used for tax planning, to provide for someone with expertise to manage assets, or to shelter assets to protect them from creditors or for long-term care planning.

  • Durable Power of Attorney

Under a power of attorney, you may appoint someone else to act for you when you are unable to do so yourself. The reason may be your mental incapacity or your inability to be somewhere when needed. The person you appoint—your “attorney-in-fact”—must always act in your best interest and try to make choices you would make if you were able to do so.

  • Health Care Proxy

Similar to a power of attorney, through a health care proxy you may appoint someone else to act as your agent—but for medical, as opposed to financial, decisions. Unlike a power of attorney, the health care proxy does not take effect until your doctor determines that you are incapable of making decisions yourself. Before that decision, your agent may make no decisions on your behalf. You may include in your proxy a guideline for your agent to use in making decisions. These may include directions to refuse or remove life support in the event you are in a coma or a vegetative state. On the other hand, your instructions may be to use all efforts to keep you alive, no matter the circumstances.

  • Community Spouse Resource Allowance (CSRA)

If your spouse has to move to a nursing home, you will have to pay for his or her care out of pocket until he or she qualifies for Medicaid. Under the Medicaid program the nursing home spouse may only have $4,000 in “countable” assets. (Noncountable assets include your home, household belongings, one car, and prepaid funeral plans.) The amount the healthy spouse is permitted to keep under the Medicaid program is known as the “community spouse resource allowance” or “CSRA.” The CSRA is all of the couple’s combined assets up to a cap of $123,600 (in 2018). In some cases, the community spouse is entitled to retain assets above the $123,600 limit when her income is less than the minimum monthly maintenance needs allowance, which is described below.

  • Minimum Monthly Maintenance Needs Allowance (MMMNA)

The Medicaid rules also govern the amount of income the community spouse is entitled to once the nursing home spouse qualifies for Medicaid. Normally, the community spouse keeps his or her income and the nursing home spouse pays his or her income to the nursing home, keeping only a $50.00-a-month “personal needs allowance.” However, if the healthy spouse’s income is low, he or she may be entitled to a share of the nursing home spouse’s income. In each case where a married nursing home resident qualifies for Medicaid, the Department of Human Resources calculates a “minimum monthly maintenance needs allowance” or “MMMNA” for the community spouse based on his or her housing costs. This will range from a low of $2,057.50 to a high of $3,090.00 a month (in 2018). If the community spouse’s own income is below his or her MMMNA, he or she will be entitled to a share of the nursing home spouse’s income to make up the difference.

Want to learn more? Contact Attorney Matthew J. Leonard, Esq. at 401-401.648.7000 or at mleonard@smsllaw.com to arrange for a free consultation.

MassHealth Denial Trust Case Overturned

By Uncategorized

Denial of Medicaid Benefits based on Income-Only Trust Overturned

A Massachusetts Superior Court has overturned a MassHealth denial of coverage for a nursing home resident who MassHealth found had countable assets available from a trust she had created.

MassHealth who administers the Medicaid program for Massachusetts residents has been aggressively challenging and contesting applications where the applicant was the beneficiary of an Income-Only trust. MassHealth would take the position that assets held in an Income-Only trust are considered available to the applicant to be used on their own care and thus would disqualify them from Medicaid eligibility.

MassHealth will need to be more welcoming of Income-Only trusts

An Income-Only Trust used for Medicaid purposes states that the grantor of the trust shall, as the name indicates, only be entitled to receive income from the trust. If the terms of the trust also state that the grantor shall never be able to receive principal from the trust, the assets in the trust will not be deemed an available resource for the Medicaid applicant. Massachusetts has not followed this rule and denied Medicaid benefits to applicants despite these terms in the trust. With this new decision, MassHealth has been told that it was improper to deny applicants Medicaid benefits of the the basis of Income-Only Trusts.

This decision is welcome news for many estate planners seeking to clarify the role Income-Only trusts play in the estate planning process.

CLICK HERE TO READ THE ARTICLE

The usage of Trusts in Estate Planning is a critical component. The rules and terms contained in the trust dictate how various governmental agencies will view the trust. Having a clear understanding as to interpretation of language as to important benefits such as tax treatment, control issues or Medicaid qualification is required. This decision with MassHealth brings clarity to language that prior was in flux.

Want to learn more about Irrevocable Income-Only trusts? Contact our office for a no-cost consultation to see if they fit into your estate plan.

Estate Planning Protects Your Loved Ones and Savings

By Medicaid Planning and Gifting

ESTATE PLANNING: For All Stages Of Life

Don’t put your life savings at risk. Meet with an attorney to discuss your estate plan. We have a plan for all ages and stages of life. Call attorney Matthew Leonard at 401-401.648.7000 for your free consultation.

Procrastination in most things in life will bring about bad results. Estate Planning is no exception. It has been said that A FAILURE TO PLAN IS A PLAN TO FAIL. In the context of estate planning – it is very true.

Regardless of if you are single, newlywed, married with kids, empty nesters or retired.

Regardless if you are in fine health, average health, or failing health.

Regardless if you are rich, poor or all measurements in between.

With your estate plan you get to ensure that your assets are protected during your life, and then the people you are most concerned for get to benefit from what you have died. Meeting with an attorney to discuss your story – your concerns – your wishes is the only way you can ensure your dreams and wishes are fulfilled.

Contact our office to discuss your estate planing goals.

 

Special Needs Trust Fairness Act Passes

By Uncategorized

Special Needs Fairness Act

Yesterday, the Senate passed the Special Needs Trust Fairness Act. After the President’s signature, individuals with disabilities, who have capacity, can create their own (D)(4)(A) special needs trusts. This ends the false presumption in American law that all individuals with disabilities lack the mental capacity to handle their own affairs. No longer will individuals in need of a special needs trust, but without parents or grandparents, face undue legal difficulties.

specialneedstrust

 

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House Passes Health Package with SNT Fairness Act

By Uncategorized

Passage by the House clears way for new ways of creating Special Needs Trusts

On November 30, 2016, the House passed H.R. 34 – 21st Century Cures Act, a major health care package that included the Special Needs Trust (SNT) Fairness Act (Sec. 5007). The health package covers a wide array of issues, including new disease research funding, mental health reform, and combating opioid abuse.

The SNT Fairness Act would allow individuals with disabilities, who have capacity, to set up their own d-4-a special needs trust. Passage of the SNT Fairness Act has been National Academy of Elder Law Attorney’s top public policy priority for this congressional session.

In September, the House passed an amended version of the SNT Fairness Act that contained several additional non-controversial provisions related to Medicaid. A year prior, the Senate unanimously passed the original version of the SNT Fairness Act.

Now, the Senate must take up the health package for the provisions to become law.

Special Needs Trusts are trusts designed to hold assets for the benefit of a disabled individual while allowing that individual to receive and benefit from available government services. There were 2 types of SNT’s: 1. Created with the assets of the disabled individual (so called (D)(4)(a) Trust); and 2. Created with assets other than those of the disabled individual.

The current law limited who could create a SNT with assets of the disabled individual. This new law removes the restrictions as to who can create a SNT for a disabled individual.

Want to learn more about Special Needs Trusts? Contact our office for a no-cost consultation.

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A Last Will And Testament Is NOT An Estate Plan

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A Last Will And Testament Is Good Enough, Right?

Will

The Reading Of The Will

Will readings. Family gathered around the table, dressed in black, all sitting in a lawyers office while the lawyer reads to the family. That is how Hollywood has projected it and how it works. The decedent signed the document during their life and the family all learn at the same time who got what.

While that can happen in real life, rarely does it occur. More importantly, and the bigger point of this article, this should NOT happen.

A Will As Part of the Estate Plan – Not the Entire Plan

A Last Will And Testament is a proper and necessary document that all people should have. But the Will is only PART of the documents a person should have as part of their estate plan. A Will is the beginning – not the beginning and the end! A Will should be accompanied with Trust, Durable Powers of Attorneys, Health Care Powers of Attorney, Deeds, Conveyances, Bequests and an overall goal to ease administration and ensure the wishes of the deceased are followed, and followed efficiently.

A Will does not avoid probate – it causes probate

A Will alone does not ease the administration of Estates, it only guarantees that there will be a probate estate to administer. The Probate Courts and the Probate Process is a lengthy, time consuming, expensive process that typically takes over a year to complete.

The attached article explains the impact of not having a full estate plan. While a will is a part of the estate plan, it is not the entire plan. Sadly, this lesson comes too late for some, like Mr. Sacks.

 

The Man who Mistook his Will for his Estate Plan

Meeting and discussing your estate plan with an attorney experienced in drafting and preparing estate plans is an important first step in ensuring your goals and objectives are met. Contact our office for a free consultation on planning your estate, the proper way.

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