Attorney Pamela Greenfield

Rightsizing

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A movie trailer caught my eye as I was sitting at home on my couch the other night for my 37 minutes of peace per day when, for just a moment, all of my emails are answered, all of my phone calls returned, kindergarten projects are complete, lunches and bags are packed for the following day and two kiddos are sound asleep in their own beds. “Downsizing” opens in theaters this Christmas and, besides looking fabulous, it immediately struck me as a parody of the struggle my clients face day to day as they retire and begin to think about the rest of their lives on a fixed income.  How will we be able to pay our bills? Will our savings be enough? What if we have high long-term care costs?

The movie’s sales pitch goes like this: “Downsizing is about saving yourself.  We live like kings, we got the best houses, best restaurants….In Leisure Lane your $52,000 translates to $12.5 million dollars to live on, for life!” The premise in “Downsizing” is that proactive members of society elect to leave the rest of the world behind and shrink themselves to .0364% of their total mass and volume in exchange for being able to live without worry in the “Small World.”   For my clients, a sale of their family home and a move to a senior living setting can feel the same way.

Ironically, we often refer to this as “Rightsizing.”  For many of my clients, their home is their largest asset.  By age 60, 70, or 80, a home owned for a long time is often fully paid off and has greatly appreciated in value.  My senior clients look at their savings and their income and ask the questions raised above without considering the value of their home and what a sale of that asset could mean for them.  Not only might the sale yield hundreds of thousands of dollars to use for day to day costs as well as long-term care costs, but selling a home may mean significant monthly savings in management and upkeep.  Whether it’s paying real estate taxes for a school district they have not utilized in 30 years or dealing with snow removal, trash removal and lawn maintenance, seniors often don’t realize the albatross their home has become.  Additionally, the day to day grind of grocery shopping, meal preparation, getting around town and juggling various appointments takes a toll.  Why not consider cashing out and opting for an opportunity to “live like kings” within a supportive senior community?

As a result of the innovators who about to come of age in this country, now is the time when the options for community senior living have become nothing short of phenomenal.  Independent living and continuing care retirement communities are popping up in every town in metro-Boston.  These offer seniors considering “rightsizing” boundless opportunities to socialize, remain within their own town limits and age gracefully in a modern, vibrant setting, all while making their savings last and their lives easier.  Most often these communities provide additional support as seniors age and require more care which can be especially important for couples where one spouse’s needs exceed the other’s.  The wave of the future is to “age in place” and “rightsizing” at the right time can make all the difference in the world for some clients.

If you are considering a move and thinking about selling your home, please contact our office.  We work with a team of professionals who can help with logistics and ease the transition of rightsizing.  As for me, I’ll need to find a babysitter so I can catch that movie!

October 2017

© 2017 Samuel, Sayward & Baler LLC

Long-Term Care Planning

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To all of our clients who are looking to cross something off their to-do list this summer, check out this interesting read  from last week’s “Your Money” Section of The New York Times.  It’s never too early to start the conversation about long-term care planning!  This article shows us that even people who consider themselves well-prepared financially and legally can be affected by unexpected circumstances and care costs.   If you are in your 50’s or beyond, make sure you have had a conversation with one of our attorneys about for any long-term care you may require and what planning steps you may want to take now to plan for the unexpected.

July 2017

© 2017 Samuel, Sayward & Baler LLC

SJC Issues Favorable Decision for Irrevocable Income Only Trusts

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On May 30, 2017, the Supreme Judicial Court vacated the judgments of the Worcester County Superior Court companion cases, Daley and Nadeau, concluding that the right to use and occupy a residence does not make the assets contained within an irrevocable income only trust countable for MassHealth purposes.  The cases, which were argued before the SJC on January 5, 2017, will undoubtedly have a significant impact on the landscape of asset protection planning for long-term care purposes as the previously unsettled case law made it difficult for seniors to effectively plan for future nursing home care costs.  Irrevocable income only trusts, which were historically time-tested tools for protecting a nursing home resident’s home from a MassHealth lien, have been at the epicenter of elder law litigation since 2009.  With a favorable SJC decision on these cases, elder law attorneys and their clients can breathe a sigh of relief regarding previously created trusts which allow the grantor to continue to live in the home transferred into the irrevocable trust.  Going forward, elder law attorneys can feel more confident about advising their clients on the use of these protective instruments.

Click here to read the decision:

http://www.mass.gov/courts/docs/sjc/reporter-of-decisions/new-opinions/12200.pdf

Click here to read previous posts on this issue:

https://ssbllc.com/blog/masshealths-treatment-of-irrevocable-income-only-trusts-as-murky-as-ever/

https://ssbllc.com/blog/irrevocable-trust-update-favorable-decision-from-the-massachusetts-appeals-court-is-a-battle-won-but-not-the-end-of-the-war/

https://ssbllc.com/blog/time-for-the-big-leagues-irrevocable-trusts-get-called-up-to-the-sjc/

https://ssbllc.com/blog/options-to-protect-the-primary-residence-from-long-term-care-costs/

If you have specific questions about protecting your home from long-term care costs, please call our office  at 781/461-1020 and schedule an appointment with one of our attorneys.

June 2017

© 2017 Samuel, Sayward & Baler LLC

MassHealth Update

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2017 started off with a bang in the MassHealth world!  The end of 2016 brought with it some unexpected proposed MassHealth regulation changes which forced elder law attorneys across the state to scurry like mad before the holidays to review and comment on the new regulations which were originally set to take effect on February 1, 2017 but still have not been officially implemented.  Some of the most impactful changes are the proposed elimination of pooled trusts for nursing home MassHealth applicants over the age of 65, and no longer permitting MassHealth applicants to fund supplemental needs trusts for non-child beneficiaries.  While the written comments prepared by MassNAELA members as well as the testimonies of 15 lawyers at a public hearing in Worcester in mid-December may prove helpful in convincing MassHealth to reconsider some of the changes, we expect that many of the proposed regulations will take effect soon.

On January 5, 2017, the Massachusetts Supreme Judicial Court (SJC) heard oral argument on two pending irrevocable income only trust cases.  We should finally receive some clarity on the future of these trusts for MassHealth planning this spring.  Stay tuned for updates in this ever-changing area of the law!

February 2017

© 2017 Samuel, Sayward & Baler LLC

Options to Protect the Primary Residence from Long-Term Care Costs

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Pam_144pxIf you are following along with the irrevocable trust saga, you know that on January 5, 2017, the Supreme Judicial Court heard oral argument on two irrevocable income only trusts where the MassHealth applicant placed his or her primary residence into the trust prior to applying for nursing home benefits.  It was incredible to watch the attorneys argue their opposing sides before the panel of elite judges at One Pemberton Square.  One of my clients lovingly called the hearing “the Superbowl of Elder Law” (but I think he was making fun of me).  With the fate of irrevocable trusts literally hanging in the balance, what other options do we as elder law attorneys have to advise our clients on how to protect their primary residence from the placement and collection of a MassHealth lien?  Since the home is often our clients’ most valuable asset, preserving the home from a MassHealth lien often feels like the million dollar question.  Here are some options:

  1. Consider purchasing long-term care insurance before it’s too late and too expensive. Under the MassHealth regulations, a policy which meets minimum requirements of $125/ day of nursing home care coverage for a period of two years will prohibit MassHealth from placing a lien on the applicant’s non-countable Massachusetts primary residence.  An added benefit—often these policies are absolutely crucial in allowing seniors to age in place with private-duty home care services or pay for assisted living care where there are minimal public benefits available.
  2. Consider the pros and cons of a life estate deed. The actual concept of a life estate deed is simple to explain and even simpler to execute, however the devil lies in the details which is why it is critical to be fully versed in all of the ramifications of executing a deed with a retained life estate before giving away a substantial interest in your most important asset.  In a typical life estate deed arrangement, the grantor-parent transfers the property to the children but reserves the right to reside in the property for his or her lifetime.  MassHealth may still place a lien on the home should the life tenant ever apply for MassHealth benefits, however, MassHealth releases its claim at the death of the parent and the lien is extinguished.  The end result is that the property passes to the children without any encumbrance or need to go through probate.  However, some unintended consequences of life estate deeds may include capital gains tax issues, difficulty in mortgaging/refinancing the property, creditor claims and even uncooperative or self-interested children (and spouses of children).  While life estate deeds may seem like a terrific substitute for irrevocable income only trusts, there are many issues to consider before jumping into this option.
  3. Consider an outright transfer of the property. Sometimes a simple “get all of the assets out of mom’s name and into the kids’ name” approach seems tempting.  However, this is usually not the best strategy for our clients.  The above-mentioned issues with life estate deeds are present here in an even worse way.  There are capital gains tax consequences, potential creditor issues, and of course, the ever present evil child syndrome.  But perhaps the most important concern is more of an intangible one—financial independence and autonomy of our clients.  It is important to remember that actions taken to “protect the primary residence” do not benefit the parent directly.  Such actions allow parents to take some comfort in knowing that if they ever need nursing home care something has been done to increase the chance that some inheritance will pass to their children.  However, our focus had always been on helping our clients achieve their most important goals which often means staying in their homes. With many more options for care coming to the marketplace each day—most of which are not covered by MassHealth—giving away assets to achieve Medicaid eligibility to pay for long-term care is often not in keeping with the goal of remaining at home.  Don’t get me wrong, as elder law attorneys, it pains us to see elders spend their life savings on nursing home care when there were viable options for preserving assets.  However, giving away assets to achieve future Medicaid eligibility is sometimes contrary to our clients’ goals for themselves and we focus first on those goals before recommending a plan that deprives our clients of their interest in the primary residence.

If you have specific questions about protecting your home from long-term care costs, please call me at 781/461-1020.

February 2017

© 2017 Samuel, Sayward & Baler LLC

Time for the Big Leagues—Irrevocable Trusts Get Called Up to the SJC

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Pam_144pxAfter more than half a decade of uncertainly and speculation surrounding irrevocable income only trusts in the MassHealth context, the highest court in Massachusetts has decided to weigh in on the debate in deciding to review the Nadeau and Daley cases.  Hopefully a decision from the Supreme Judicial Court (SJC) sometime next spring will finally provide elder law attorneys and their clients with more defined guidelines as to what provisions these trusts may include in order to protect trust assets from liability for long-term care costs.

While the Heyn decision issued by the Massachusetts Appeals Court back in May 2016 marked the first precedential victory for irrevocable trusts since the 1990s, it left many questions unanswered.  Most notable was the question of whether language in a trust that explicitly gave the grantor (the creator of the trust) the right to use and occupy the home owned by the irrevocable trust made the property “countable” for the purpose of qualifying for MassHealth/Medicaid benefits in a nursing home.  As the property transferred into an irrevocable trust in the MassHealth planning context is often the grantor/MassHealth applicant’s primary residence, the right to use and occupy the home was beneficial to the grantor for many reasons including tax, mortgage and general notions of control and protection.  MassHealth has taken the position that an explicit right to use and occupy the property gives the grantor a level of control that makes the value of the asset “available” to the grantor.  The result of this “availability” is that the trust assets are deemed “countable” to the grantor which means the trust prevents the applicant from obtaining benefits since the assets exceed the MassHealth financial limit.  Alternatively, the property may be able to be returned to the applicant so that the state can place a lien the property and recoup the value of the benefits provided upon the applicant’s death.  This is the primary provision the SJC will review under the Nadeau and Daley trusts and it affects many, many seniors across the state.

While the two cases before the SJC are similar in that they both present the “use and occupancy” issue, they are different in ways that some elder law attorneys believe may yield a bizarre result. The Daley case deals with a life estate deed and an irrevocable income only trust while the Nadeau case focuses primarily on the use and occupancy provisions contained within the trust itself.  The Daley case also raises procedural and constitutional issues such as the inconsistency of administrative hearing decisions and other due process concerns.  In any case, the SJC has decided to hear both cases together and the decision will certainly provide more clarity on the use of irrevocable trusts in the future as well as how existing trusts will fare should the grantor apply for MassHealth benefits.

Stay tuned on the irrevocable trust saga as it continues to unfold over the coming year!

Pamela B. Greenfield

Did You Know?

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Pam_144pxIn addition to estate planning, a large part of our practice includes long-term care planning for seniors and their families.  In fact, all of the attorneys at Samuel, Sayward & Baler LLC are members of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (MassNAELA), which is the largest and oldest elder law bar in the country.

If you are over age 60, you should contact us or other experienced elder law attorneys to help educate you about long-term care issues and plan ahead for the future.  As experienced elder law attorneys we assist families with pre-planning, crisis management and MassHealth applications.  While it is always better to plan ahead, even in a crisis we are often able to save families from spending down all of their life savings on the high costs of nursing home care.

Call us to schedule an appointment to learn about long-term care issues, resources available to pay for care, and why advance planning is so important – especially for those who are retired or approaching retirement.

I’m Going On Vacation! I’m Going On Vacation! I Need To Update My Estate Plan!!

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Pam_144pxAs we fly at lightning speed through the month of August, we are reminded as estate planners and New Englanders that evvvvverybody is going on vacation!  Some are off to the Cape or the Islands for a week, others to visit family and friends across the country and some especially lucky ones on that long-awaited riverboat cruise in Europe!

Inevitably, I hear the same shared concerns from clients as they put together their to-do list before they leave for vacation.  The conversation goes about something like this: “I’m embarrassed to say this but my husband and I don’t have current wills.  In fact, we haven’t looked at them since our kids were little. Now we are going on a big trip together and I am sure we need to make some changes because it’s really old.  We leave on August 20th.  Can we get everything done by then?”

The truthful answer is: “No, not well.”  A properly crafted and executed estate plan involves far more than signing a couple of documents before you board an airplane.  Sure, as estate planning and elder law attorneys we are sometimes called upon to put together a last minute plan for an ill client or assist someone with a game-time Medicaid qualifying plan, but the far better advice is to plan ahead.  While this may seem like little comfort as you pack your bags for that big end of the summer trip, use this opportunity to be sure your estate plan is in a better position for your next expedition rather than cramming in an update on the fly.

Here is a quick list of reasons why it’s never a good idea to put together a last minute estate plan.

  1. Most people do not think clearly under pressure. Even if you are positively certain in that moment that you want to name your baby sister as the guardian of your children or leave all of your assets to one of your three children, these are some of the most important decisions you will ever have to make and they deserve the thoughtful consideration you would give them if you weren’t operating under the gun.  On the other side, even the best estate planners need time to process and draft a perfect plan.  Unrealistic timeframes and pressure can result in mistakes—on your part and ours!
  1. Having the signed documents before your trip does not necessarily mean that your wishes will be carried out. A Will only controls assets owned in your sole name and a trust only controls assets that have been retitled into the name of the trust or where the trust is the named beneficiary.  Even if you and we do our job quickly, financial institutions often require significant paperwork to retitle assets.  This is a process that must be handled with care and attention.  Having the signed documents alone is often only fifty percent (or less) of the tasks required to create a proper estate plan.
  1. We need time to consider all of the variables and issues to put together the proper plan for you. Some clients come to see us to avoid probate, others to minimize estate taxes.  Some come for long-term care planning, others to protect minor children. Some clients have a disabled child who receives public benefits and other have a wealthy child who has a significant estate of their own.  More often than not, a client will have more than one of these issues to address in their estate plan.  All of these issues must be reviewed and considered in detail before any kind of an estate plan can be recommended.  A shot-gun estate plan does not lend itself to this level of proper consideration.
  1. A last-minute “vacation plan” gives our clients a false sense of security.  For all of the reasons mentioned above, an estate plan done under the wire in contemplation of a big trip lets our clients off the hook to some degree.  They can “sleep at night” knowing that they have “something in place” before they go on their trip.  However, we find that despite our insistence that they come back in and reevaluate or do necessary follow-up tasks on a last minute, pre-vacation plan once they have returned, they rarely do and are left with an inferior plan that doesn’t cover all of the bases.  This result is far worse than having made the appointment for the week after you have returned from vacation!

Before you board that plane or boat or train this August, please call to set up an appointment with one of the attorneys at Samuel, Sayward and Baler to review your plan when you return!  Channel all of your motivation to update that plan this fall so that when you head off to warmer weather when the temperature dips below freezing in January and February, you can go off with a clear head!  Of course, if you have any questions before your trip, please feel free to call and check in with one of us!

Have a safe and enjoyable vacation!

Pamela B. Greenfield

August 2016

Irrevocable Trust Update—Favorable Decision from the Massachusetts Appeals Court is a Battle Won but Not the End of the War

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Pam_144pxMy February 2016 blog post gave a bleak outlook across the battlefield of irrevocable income only trusts in a Medicaid context—it’s guerrilla warfare out there, there are no rules, and the Superior Court and fair hearing decisions are all over the map making it very difficult to advise seniors who want to protect their home from the high cost of long-term care. But on April 15, 2016, a significant battle was won and there was finally some good news.  Actually, some really good news.

Heyn vs. Director of the Office of Medicaid (formerly known as the Roche case) was overturned by the Massachusetts Appeals Court, the second highest court in the Commonwealth.  Eligibility for Medicaid benefits was initially denied by the Office of Medicaid, Board of Hearings and Worcester County Superior Court, each maintaining that the assets held in Everlenna Roche’s irrevocable trust were countable because the trust contained certain problematic provisions.  For the most part, these were innocuous provisions that have been historically acceptable.  MassNAELA submitted an amicus curiae brief in support of the applicant’s position that the trust was noncountable and the provisions in question did not make the trust principal available to Mrs. Roche.  The Appeals Court decision came down in favor of the applicant, thus overturning the prior denials—a significant victory for Massachusetts seniors.

So what does the Heyn case mean for the future of irrevocable income only trusts? First, as mentioned above, while exciting, this is merely a battle victory and unfortunately the war wages on across the Commonwealth.  Every day, irrevocable trusts are denied for random, narrow, misconstrued provisions and clauses.  Second, the Commonwealth may file an appeal with the Supreme Judicial Court (SJC) challenging the Heyn decision.  If it does, and if the SJC hears the case and agrees with the Medicaid agency, this will sound the death knell for the use of some types of irrevocable trusts for long-term care planning and protection.  So, the verdict is still out. In the meantime, perhaps (fingers crossed), the decision will begin to have positive effects on the lower court and fair hearing decisions that are pending.  Time will tell as it will take several months before we start to see the implications of the Heyn decision beyond its own facts.  For now, more waiting, more uncertainty…

If you would like to read the Heyn decision, click here.  And if you would like to discuss your own trust or estate plan, please call or email Jennifer Poles at 781/461-1020 or poles@ssbllc.come to schedule an appointment.

May 2016

MassHealth’s Treatment of Irrevocable Income Only Trusts as Murky as Ever

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Pam_144pxOften our clients come to see us to discuss their options for protecting their primary residence should they ever require long-term care in a nursing home.  The conversation usually involves a discussion about the pros and cons of a transaction which would protect the home from the placement or collection of a MassHealth lien.  As elder law attorneys, we’ve always had a few different tools in our toolbox which would fix the problem of the dreaded MassHealth lien.  Whether it was an irrevocable trust, a life estate deed or some other arrangement, there was a fix.

For the last two or three years, the previously well-settled law surrounding irrevocable income only trusts has been under fire by the Office of Medicaid.  Although there has been no regulation change or even a court decision carrying true precedential value, the agency has revamped its criteria for reviewing irrevocable income only trusts for individuals applying for nursing home MassHealth benefits.  The review standards seem to change daily and the pattern is unnerving—MassHealth denies a trust containing certain provisions one day and approves an identical trust the next.  Even worse, the superior courts, historically thought to be a place of refuge from unfair agency decisions, have yet to provide clarification or consistency.  Here’s an example—in September 2014, two cases were heard by the exact same superior court judge in Worcester County.  The cases were based on the exact same trust and denied by the MassHealth agency for the exact same reasons.  The decisions—opposite!  In one case the family home was safe and the elder received MassHealth benefits and the other, Roche V. Thorn, is currently on the Massachusetts Appeals Court‘s docket.  You couldn’t even write this stuff for an episode of Law & Order!  As a result, the current climate makes it very challenging (if not impossible) to effectively prepare these instruments and assure our clients that they will actually be a good fix to the problem of the lien.

So far 2016 does not bring with it any more knowledge or insight into the treatment of irrevocable income only trusts.  Late last year, the superior courts handed down the Daley and Nadeau decisions on December 24 and 29, respectively.  Both decisions focused on the grantors’ ability to make use of the property held within the trust during their lifetime, although they came at the problem from two different vantage points—one attacking irrevocable trust provisions and the other eluding to the fact that life estate deeds may be problematic (but that’s a whole other blog post!).  With the Roche case pending at the Massachusetts Appeal Court and oral argument scheduled for next month, perhaps we will see some clarity later in the year.

For now, we sit in the shop, dusting off some old, less effective tools until we have more information about the future of irrevocable trusts (and, I suppose life estate deeds) in the MassHealth context.  Stay tuned and please feel free to give us a call to discuss your personal concerns regarding your irrevocable trust!

February 2016

Wills • Trusts • Elder Law • Long-Term Care Planning • Estates

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