A power of attorney allows a person to appoint someone called an “agent or “attorney-in-fact” — to act in his or her place for financial purposes when and if the person ever becomes incapacitated. A power of attorney can name one agent or it can require two or more agents to act together.

If you are acting as a co-agent under a power of attorney, but you and your fellow agent disagree on a course of action or one party has stopped participating in decision making, what can you do? The first thing is to check the wording of the power of attorney document to see if it sets up a procedure for resolving disputes. If the power of attorney itself doesn’t help, you should contact an elder law attorney. The attorney can tell you if your state’s power of attorney laws offer any guidance. There may be a state statute that deals with disputes.

If the dispute still cannot be resolved, the final step may be to file a petition in probate court to let the court decide it. Or if the court finds that one of the agents is not acting according to the incapacitated person’s best interests, it can revoke the agent’s authority. Unfortunately, taking the matter to court takes time and money.

If you are creating a power of attorney and want more than one agent to share responsibility, but want to minimize conflict, you can name two agents and let the agents act separately. Naming more than two agents can get cumbersome and make communication difficult. An alternative to naming co-agents is for the power of attorney document to name agents in sequence. The first-named agent acts alone, but if she cannot serve for some reason, the next person on the list will serve.

©2012 Boston Estate Planning Attorney. All Rights Reserved.

• People are living longer and are more likely to need long-term care. Life expectancies keep increasing, which means you are more likely to need help at some point. At least 70 percent of people over age 65 will require some long-term care services at some point in their lives, according to the U.S. Department of Health and Human Services.
  
• Care expenses are high. Whether you receive care in a nursing home or at home, expenses are rising. According to the 2010 MetLife Market Survey of Long-Term Care Costs, in 2010 the average cost of a room in a nursing home was $83,585 a year and home care aides averaged $21 per hour. Those figures aren’t going to start going down.
  
• Family caregivers may not be available. In more and more households, both partners work. In addition, children often move far away from their parents. This means that your adult children may not be able to easily take of you when the time comes.
  
• The earlier you plan, the better. By planning ahead, you may be able to preserve your assets instead of using them all up paying for long-term care. In addition, if you plan early, you may have more options for care.

To start planning for long-term care, give us a call at 978.270.2189. Planning steps may include executing advance directives and a power of attorney, putting assets in a trust, purchasing long-term care insurance, getting a reverse mortgage, creating a caregiver contract with an adult child, or transferring a house to children. We can help figure out the best plan for you.

©2012 Boston Estate Planning Attorney. All Rights Reserved.

Usually the loved one’s estate is responsible for paying any debts. If the estate does not have enough money, the debts will go unpaid. The debt collectors may not collect payment from relatives (unless they were co-signers or guarantors).

However, if you are the spouse of the decedent, you may have responsibility for any debts that were jointly held. Some assets may be exempt from debt collection. You should talk to an attorney to determine your responsibility, if any.

If a debt collector contacts you, give the collector the contact information for the personal representative (also called the “executor”) who is handling the estate. It is the personal representative’s responsibility to make sure all bills are paid. Whatever you do, do not give any personal information to debt collectors. Scam artists sometimes pose as debt collectors to prey on relatives.

If a debt collector won’t stop contacting you, send a certified letter to the collector saying you do not want to be contacted again. Once the collector receives the letter, the collector can contact you only to tell you that there will be no further contact or to inform you of a lawsuit. Report any problems with debt collectors to the state’s attorney general or to the Federal Trade Commission.

©2012 Boston Estate Planning Attorney. All Rights Reserved.

Dementia is a general term for memory loss that is severe enough to interfere with daily life. The signs of dementia may include forgetfulness, difficulty making plans, thinking ahead, or using language, as well as changing character traits, among other symptoms. Alzheimer’s disease accounts for 50 to 80 percent of dementia cases according to the Alzheimer’s Association, but there are other causes, including vascular dementia, Lewy body dementia, frontotemporal dementia, and Wernicke-Korsakoff syndrome.

Some causes of dementia are treatable, so it is important to understand the cause. Alzheimer’s disease is a partially hereditary disease that causes a loss of brain cells. The symptoms start out mild but grow progressively worse over time.

There is no cure, but there are medications that can treat the symptoms and slow the disease’s progress. An early symptom of Alzheimer’s is difficulty learning new information. It can then progress to more severe symptoms such as forgetting names and places, disorientation, mood and behavior changes, and an inability to relate to others.

Eventually, it can lead to the inability to talk, walk, or eat. Dementia, whether caused by Alzheimer’s disease or some other underlying disease, is not a normal part of aging.

If someone you love is exhibiting signs of dementia, they should get immediate medical attention to understand what is causing it.

©2012 Boston Estate Planning Attorney. All Rights Reserved.

It rewards the family member doing the work. It can help alleviate tension between family members by making sure the work is fairly compensated. In addition, it can be a be a key part of Medicaid planning, helping to spend down savings so that the elder might more easily be able to qualify for Medicaid long-term care coverage, if necessary.

The following are some things to keep in mind when drafting a caregiver contract:

• Meet with your attorney. It is important to get your attorney’s help in drafting the contract, especially if qualifying for Medicaid is a goal.
  
• Caregiver’s duties. The contract should set out the caregiver’s duties, which can be anything from driving to doctor’s appointments and attending doctor’s meetings to grocery shopping to help with paying bills. The length of the term of the contract is usually for the elder’s lifetime, so it is important to cover all possibilities, even if they are not currently needed. The contract can continue even if the elder enters a nursing home, with the caregiver acting as the elder’s advocate to ensure the best possible care.
  
• Payment. Payment to the caregiver can either be made with a lump-sum payment or in weekly or monthly installments. For Medicaid purposes, it is very important that the pay not be excessive. Excessive pay could be viewed as a gift for Medicaid eligibility purposes. The pay should be similar to what other caregivers in the area are making, or less. To calculate a lump-sum payment, take the monthly rate and multiply it by the elder’s life expectancy. (Not that some states, Georgia for example, do not recognize the ability to create a lump sum contract based upon life expectancy.)
  
• Taxes. Keep in mind that there are tax consequences. The caregiver will have to pay taxes on the income he or she receives.
  
• Other sources for payment. If the elder does not have enough money to pay his or her caregiver, there may be other sources of payment. A long-term care insurance policy may cover family caregivers, for example. Also, there may be state or federal government programs that compensate family caregivers. Check with your local Agency on Aging to get more information.
  

©2012 Boston Estate Planning Attorney. All Rights Reserved.

You can also relieve some of that hesitancy by familiarizing yourself with legal terminology before meeting with a qualified estate planning attorney to discuss the appropriate choices for you. The following is a short list of common legal terms that may come up in an estate planning meeting. Take just a few minutes to familiarize yourself with this list and keep it handy for future reference.

Attorney-in-Fact: A person who is named under a Power of Attorney to act on behalf of another person.

Beneficiary: A person or entity that receives a benefit from an estate, trust or assettransfer vehicle.

Death Probate: The legal process used to assemble and transfer a decedent’s assets to the intended beneficiaries and settle a decedent”s outstanding debts.

Decedent: A person who has passed away.

Donee: A person or entity who receives a gifted asset from a donor.

Donor: A person or entity who gifts an asset to another person or entity.

Estate: All the assets owned by a decedent upon his or her death.

Executor/Personal Representative: The person responsible for settling a decedent’s estate.

Grantor: A person who transfers an asset to another person or entity.

Guardian of the Person: A court-appointed supervisor in charge of the care of a minor or incompetent person”s physical well-being.

Guardian of the Estate: A court-appointed supervisor in charge of the care of a minor or incompetent person’s financial well-being.

Irrevocable Trust: A trust in which the trustor has not reserved the right to revoke and cannot change the wording in the trust.

Living Trust: A trust established and operating during the trustor’s lifetime.

Revocable Trust: A trust in which the trustor reserves the right to revoke.

Testator: The creator of a will.

Trust: A legal arrangement created to facilitate the transfer of property to a trustee for the benefit of a beneficiary.

Trustee: A person or entity named in a trust agreement to be responsible for holding and administering the trust assets according to the terms of the trust.

Trustor: A person who creates a trust. (Also sometimes called a “grantor” or “settlor.”)

Will: A legal document used to transfer assets upon a decedent”s death.

©2012 Boston Estate Planning Attorney. All Rights Reserved.

To be eligible for PACE, participants must be at least 55 years old, qualify for Medicare or Medicaid (or both), live in a PACE service area, and be certified as eligible for nursing home care by the Commonwealth of Massachusetts. If a senior decides to join PACE, the program becomes the sole provider of Medicaid and Medicare services. PACE provides a team of doctors, nurses, social workers, personal care attendants, and dieticians to assist each senior.

All the care is centralized in an adult health center and supplemented by in-home and referral services. Other covered services include adult day care, dentistry, and prescription drugs. In addition, PACE provides transportation to the health center or to doctor’s appointments in other locations.

PACE has a monthly premium, but how much the senior pays will depend on the senior’s financial situation. All Medicare services are covered and Medicare covers a portion of the PACE program’s premium. If the senior meets the income and resource limits to qualify for Medicaid, then the senior will either have a small payment or the entire premium will be covered.

PACE has been around since the 1970s and has been expanding every year, but it is not well known. There are currently 75 PACE centers operating in 29 states.

©2012 Boston Estate Planning Attorney. All Rights Reserved.

Anyone who has reached age 65 and who is entitled to Social Security benefits is also automatically entitled to Medicare Part A without charge. However, the three plaintiffs, one of whom is former Republican House Majority Leader Dick Armey, wanted to drop their Medicare coverage because they claimed it threatened their coverage under the Federal Employees Health Benefit (FEHB) program, which they said was superior.

They argued that the Medicare law allows them to drop out of the program without losing their Social Security benefits. In her March 16, 2011, ruling, Judge Rosemary Collyer of the U.S. District for the District of Columbia acknowledged that the three retirees had a legitimate point that the law does not specifically say that avoiding Medicare Part A means losing Social Security benefits. But in examining the law that Congress enacted in 1965 creating the Medicare program, Judge Collyer found that “requiring a mechanism for Plaintiffs and others in their situation to ‘dis-enroll’ would be contrary to congressional intent, which was to provide ‘mandatory’ benefits under Medicare Part A for those receiving Social Security Retirement benefits.”

The judge also pointed out that the plaintiffs would not gain much by renouncing their Medicare coverage. Even if they were to forego and repay all Social Security benefits, under the law “their FEHB-paid benefits would be no more, and no less, than what Medicare Part A would provide,” Collyer wrote. The ruling could have implications for the current court cases challenging the new health reform law.

A central basis of these challenges is that the “individual mandate,” the reform law’s requirement that all Americans have health coverage, is illegal because the government can’t compel citizens into economic activity. Judge Collyer’s ruling suggests that the government may already have been doing this in the area of health care for the past 46 years.

©2012 Boston Estate Planning Attorney. All Rights Reserved.

Insurance agents and financial institutions often advertise annuities as the perfect way to generate retirement income. While annuities can be a valuable retirement tool, if you are buying an annuity as part of a Medicaid planning strategy, you need to fully understand what you are getting.

And whether an annuity makes sense as part of Medicaid planning may depend on whether you are married or single.

Historically, “immediate” annuities have been used as a Medicaid planning tool. In its simplest terms, an immediate annuity is a contract with an insurance company (or a private individual) under which the consumer pays the company a certain amount of money and the company sends the consumer a monthly check for the rest of his or her life.

Purchasing an immediate annuity is a way for people with assets in excess of Medicaid’s limits to turn the assets into an income stream while avoiding a penalty for transferring the assets. The Deficit Reduction Act of 2005 (DRA) changed the requirements for annuities, making it a little harder to do this. Under the DRA, an annuity must meet the following requirements in order to avoid a transfer penalty:

• The annuity must be irrevocable (meaning you can’t cancel it)
• The annuity must be actuarially sound (which means the annuity cannot cover a term longer than the purchaser’s life expectancy and the payments expected during the annuitant’s life expectancy must at least equal the cost of the annuity)
• The payments must begin immediately (you cannot have deferred payments or a balloon payment)
• Unless there is a spouse or a minor or disabled child, the state must be named as the remainder beneficiary (the person or entity that gets any leftover money) up to the amount of Medicaid provided

Perhaps the best use of an annuity for Medicaid planning is for married couples, one of whom needs Medicaid-covered long-term care. An immediate annuity allows the couple to turn their excess assets into income for the Medicaid recipient’s spouse. If a spouse purchases an annuity that meets the requirements under the DRA, he or she will receive the income from that annuity without having to contribute it to the Medicaid recipient’s long-term care.

But, as a result of a 2006 amendment to the DRA, the spouse will have to name the state as the remainder beneficiary for costs incurred by the Medicaid recipient as well as herself if she ever receives Medicaid. However, such repayment would only occur if she were to die before the guaranteed payments under the annuity had expired.

Annuities generally have been less useful as Medicaid planning devices for single individuals. For example, if a single individual purchases an annuity, the interest income from the annuity counts as income and will have to be paid to the nursing home. Then, once the purchaser dies, any remaining money in the annuity will first go to the state to pay any unpaid nursing home bills. If there is any left over, it will go to beneficiaries named by the purchaser.

While immediate annuities can still be a powerful tool in the right circumstances, they must be distinguished from deferred annuities, which have no Medicaid planning purpose. To discuss your long-term care planning in detail, give us a call at 978.270.2189. 

©2012 Boston Estate Planning Attorney. All Rights Reserved.

Anyone can get sued. Lawsuits can stem from car accidents, credit card debt, bank foreclosures, or unhappy customers, among many other things. If someone wins a monetary judgment against you, your family could become bankrupt trying to pay it off. To keep your assets away from creditors, you need to move them somewhere where creditors cant’ reach them. Asset protection techniqies include maximizing contributions to IRAs, moving funds to an irrevocable trust, retitling various assets, or using limited liability companies or family limited partnerships.

To develop your asset protection plan, give us a call at 978.270.2189. We will discuss your short-term and long-terms goals and help you create a plan that will work for you.

It is important to note that asset protection planning only works if you act before you are sued. Under the law, you may not defraud current creditors. If you are already being sued or if you know you are going to be sued and you transfer assets so that creditors can’t reach them, the court will reverse the transfer. That is why it is a good idea to put a plan in place now – before it is too late.

©2012 Boston Estate Planning Attorney. All Rights Reserved.