A big concern of many of my estate planning clients is what happens if they need long-term health care in a nursing home but they cannot make important financial and health care decisions on their own anymore due to dementia, serious injury or prolonged illness. This is especially relevant if Medicaid (MassHealth), the federal/state program that provides benefits to pay for long-term nursing home care expenses, will be necessary. There are two essential estate planning documents that you can complete now to alleviate these concerns: a Power of Attorney and a Health Care Proxy.

A Power of Attorney appoints a person called an attorney-in-fact to make financial decisions on your behalf when you cannot do so yourself.  A Health Care Proxy appoints a person called a health care agent to make health care decisions for you if you are unable to do so yourself. Both documents should include specific language to give your appointed agent the authority to manage your long-term care in a nursing home.  Below are a few of the provisions that should be included in these documents.

Power of Attorney

Your Power of Attorney should be comprehensive in order to address anticipated and unanticipated long-term care circumstances.  For example, the Power of Attorney should include language that permits your attorney-in-fact to complete an application for Medicaid benefits on your behalf and appeal any denial of benefits for you.  Your attorney-in-fact should also have authority to sign nursing home agreements on your behalf. However, it is important your attorney-in-fact’s authority is limited so that he or she cannot sign an agreement that restricts your rights (or the rights of your estate) to pursue litigation in the event you suffer harm; many of these agreements mandate arbitration and/or mediation in the event of the nursing home’s illegal or harmful actions toward you. A new federal rule attempts to curtail mandated arbitration in agreements but does not ban it outright. Additionally, it may be appropriate for your Power of Attorney to give your attorney-in-fact the authority to make gifts of your assets, and designate beneficiaries of bank accounts, retirement accounts, annuities and life insurance policies. The Power of Attorney may also include provisions that allow your attorney-in-fact to change your estate plan. The purpose of these provisions is to permit your attorney-in-fact the flexibility to appropriately manage, transfer, or spend down your assets to qualify you for Medicaid benefits, if necessary.  Your Power of Attorney can be drafted so that only certain attorneys-in-fact have the authority to take specific actions, and only certain family members can receive gifts of your assets.  Although these powers may not be appropriate in every case, if you anticipate that you may wish to apply for Medicaid benefits in the future, your Power of Attorney should contemplate that these types of actions may be necessary.

Health Care Proxy

Your Health Care Proxy should include the standard powers given to your health care agent under Massachusetts law.  The Proxy should also contain expanded powers to permit your health care agent to assist with long-term care matters, with the goal of eliminating the need to petition the court to appoint a guardian to make health care decisions on your behalf in certain situations.  For example, your Proxy should give your health care agent the ability to authorize the administration of medication, employ and terminate the employment of doctors and other medical providers, admit and discharge you from a medical facility, and sign a MOLST (Medical Order for Life-Sustaining Treatment) on your behalf.  In the event it is necessary to go to court, the Proxy’s expanded powers clearly express your wish to give your agent the authority to take certain actions and may simplify the appointment process.

If you already have these documents, I recommend that you contact an attorney experienced in elder law and estate planning to review them to ensure that the necessary long-term care planning provisions are included.  If you do not have a Power of Attorney or Health Care Proxy and wish to learn more about them from an estate planning attorney in a one-on-one meeting, an attorney at Samuel, Sayward & Baler LLC can meet and discuss these documents with you. Alternatively, you may join Attorneys Suzanne R. Sayward and Abigail V. Poole on Thursday, October 17^th at 1:00 p.m. for a presentation on this topic at the Dedham Senior Center located at 735 Washington Street, Dedham, Massachusetts.  Please RSVP to Courtney Daly at (781)326-1650.

Attorney Abigail V. Poole is an associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters. She is an active member of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (NAELA).  This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit www.ssbllc.com or call 781/461-1020.

October, 2019

© 2019 Samuel, Sayward & Baler LLC

I see clients every day who sheepishly tell me they have been meaning to update their Wills and Trusts for years, but just haven’t found the time to do so.  First things first – let the guilt go.  Procrastinating about estate planning is nothing new and is understandable in many ways.  Talking about illness, death and taxes is not most people’s idea of a good time (except for us estate planning attorneys).  That being said, there are times in life when it’s time to move updating your estate plan off the “to do” list and on to the “done” list.  Here are those times:

1. You have Young Children

If you have young children, your estate plan needs to do two important things: address the care and custody of your minor children (under age 18 in Massachusetts) should you pass away, and address the management and distribution of the assets you will leave them.  Your Will is the document in which you name a guardian for your minor children.  The guardian is the person who will decide where your children live and attend school, what type of health care your children receive, and make other day-to-day decisions regarding your children’s care and upbringing.  If you do not have a Will naming a guardian, family members or others may petition the Court to appoint someone as your children’s guardian.  The Court will have the difficult job of choosing among those who ask to be appointed without the benefit of your input.  Don’t lose the opportunity to put your children in the right hands by neglecting to speak with a lawyer who has experience drafting Wills and Trusts for families with young children!

After you have made sure that the right people will be raising your children, you need to make sure that the inheritance you leave them is preserved and protected for them.   Creating a Trust that sets out when and for what purpose your children will receive the inheritance you leave them, and names a responsible person (a Trustee) to manage those assets is the best way to do this.  Estate planning and Trusts are not just for those with millions of dollars.  Think about the assets your children would receive if you passed away – consider your home, your life insurance, your retirement accounts, your savings and investments.  Then think about how you feel about your children receiving those assets at age 18.  If this makes you uncomfortable, a Trust should be a part of your estate plan.  An experienced estate planning attorney can help you set up a Trust for your minor children. While funds are held in trust for your children’s benefit, the Trustee may use them for a child’s education, living expenses, health care, or other purposes you specify.

2. The Value of your Estate is more than $1 million

If you are a Massachusetts resident and the value of your “estate” (your home, retirement accounts, life insurance, bank and investment accounts) is more than $1 million, your estate will pay an estate tax to the Commonwealth of Massachusetts at your death unless your assets are left to your spouse or to charity.  The estate tax is a graduated tax.  With tax rates ranging from 6.4% (for estates just over $1 million) to 16% for estates in excess of $10 million, the tax bill can be significant. Estate taxes and estate planning are closely connected. Whether you are married or single, there are planning strategies that can be employed to reduce the estate tax payable at your death.  If you are married, this planning must be done while both spouses are alive.

For example, Jim and Sue have assets of approximately $1.5 million.  If all assets are owned jointly or left to the surviving spouse at the first spouse’s death, the surviving spouse will have $1.5 million of assets at her death and will pay Massachusetts estate tax of approximately $70,000.  If instead the first spouse to die leaves $700,000 of assets in trust for the benefit of the surviving spouse, the surviving spouse will have a taxable estate of only $800,000 ($1.5 million minus $700,000), and no estate tax will be payable at the surviving spouse’s death.  In this example, creating and funding the right type of trust will save Jim and Sue’s family $70,000 in Massachusetts estate tax, while at the same time ensuring all of the assets are available for Sue’s use during her lifetime.

3. You Created your Estate Plan Documents before 2012

In 2012, after decades of probate and trust laws that estate planners had come to know and love, the Massachusetts legislature made big changes to the laws that govern Wills, probate and Trusts in our state.   These changes in the law were favorable in many respects.  Although these changes did not make Wills and Trusts created prior to 2012 obsolete, the law did change terminology (Executors are now called Personal Representatives) and also gave us the opportunity to streamline and customize in many respects the way Wills and Trusts are administered after death.  If you have estate plan documents that were created before 2012, it is a good idea to have those documents reviewed, and consider updating them to include some of the new administrative provisions that will make things easier for your fiduciaries and your heirs after your death.  While you are at it, you can also include digital estate planning provisions that give your fiduciaries necessary authority to deal with your digital assets (email accounts, photo storage accounts, social media, online banking, etc.) if you become incapacitated or pass away. This will protect your fiduciaries from running afoul of federal “hacking” laws that do not look kindly on unauthorized access to online accounts, even if the person has your username and password.

4. You have Significant Wealth in Retirement Plans

An important estate planning concept to understand is that your Will and Trust do not necessarily control all of the assets you own at your death.  First, assets that have beneficiary designations – such as life insurance policies, annuities, and retirement accounts (IRA, 401k) – will be paid to the beneficiary you have designated at your death, regardless of the provisions of your Will or Trust.  For this reason, a crucial part of a comprehensive estate plan is to carefully review how beneficiaries are designated on these types of assets, and be thoughtful about making any necessary changes.  Second, retirement accounts are subject to their own, complicated set of rules regarding how and when distributions from those accounts will be made to the beneficiaries you have designated.  These rules are about to change when Congress passes the SECURE Act, which is expected to happen when Congress returns to session in September.  If you have significant assets in a retirement account, you should understand how these new rules will impact the distribution of these funds to your beneficiaries, and if necessary, make appropriate plans to manage those accounts for those who may not be capable of managing that wealth on their own, with an eye towards minimizing the income tax that will be payable on those distributions.  Finally, keep in mind that these assets are still considered part of your estate for estate tax purposes.  The estate tax provisions of your Will and Trust will need to specify whether the recipient(s) of those assets, if different (or in different proportions) from the beneficiaries of the assets controlled by your Will and Trust, will pay their share of the estate tax in proportion to what they receive.

5. You are Concerned about the Cost of Long-Term Care

Estate and tax planning can be inconsistent with long-term care planning.  The estate plan you created 15 or 20 years ago when your family was young is most likely no longer adequate for the issues your estate plan should address as you age.  It is important to get educated about issues relating to long-term care while you are still healthy and able to take whatever long-term care planning steps may be necessary.  An experienced estate planning and elder law attorney can help you think through questions like – What is your plan if you or your spouse need care?  Do you intend to stay in your home?  If so, how should it be owned?  Do you intend to move to a different state to be near children, or to a CCRC?  Do you have or should you look into purchasing long-term care insurance?  Will you be or do you wish to be eligible for public benefits to pay for long-term care?  Are there planning steps you should take now to position yourself to be eligible in the future?  What will public benefits pay for and what won’t they pay for, and is eligibility for those benefits the best planning strategy?  Depending on your answers to these questions, your estate plan can be updated to plan appropriate for your future.  In addition to these issues, the importance of a good Power of Attorney (for financial decision-making) and updated health care documents (such as a Health Care Proxy) cannot be overstated.

Take the time to consider whether your estate plan is due for a review and update.  If you have never created an estate plan, now’s the time!  Put your mind at ease, cross this important item off the “to do” list, and contact an experienced estate planning attorney today to get the process started!  You will be glad you did.

Maria Baler, Esq. is an estate planning and elder law attorney and partner at Samuel, Sayward & Baler LLC, a law firm based in Dedham. She is also a former director of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (MassNAELA), and currently serves on the Board of Directors of the Massachusetts Forum of Estate Planning Attorneys. For more information, visit www.ssbllc.com or call (781) 461-1020. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney.

September, 2019

© 2019 Samuel, Sayward & Baler LLC

When someone schedules an estate planning or long-term care planning meeting with an attorney at our firm, they are asked to complete our Client Questionnaire and send it to us prior to that meeting.  This is the case for both clients who are new to us who don’t already have an estate plan and for returning clients who are coming in to update their estate plan.  There are often questions about why we need this information so I thought I would take the opportunity this month to explain why this is so important when it comes to estate planning.

Q. Why do you need detailed information about my assets? We ask for detailed information about your assets, including their value, how they are owned, how beneficiaries are designated, and the nature of the asset (i.e. whether an account is an IRA or other type of qualified retirement account or not) so that we can properly advise you about probate avoidance, long-term care planning, legacy planning, as well as estate planning and estate taxes.

Probate Avoidance.   One of the primary goals of estate planning is to pass assets to family at death without the need for probate.  Probate  is the court process of changing the title on an asset when the owner of the asset passes away.  Probate can take a long time, cost a lot of money, and cause surviving family members much aggravation.  As such, many folks want to avoid probate.  There are several ways to avoid probate depending upon an individual’s circumstances and the type of assets he or she owns.  In order for us to advise you about your options for probate avoidance our estate planning and probate attorneys need to know about your assets.

Estate Tax Planning.   Although the federal estate tax is not currently a concern for many people because our current tax code permits each person to pass on $11.4 million of assets free of any federal estate tax, this is not the case in Massachusetts where we have a $1 million exemption for estate taxes. As such it is important to consider estate tax planning. Whether your estate will owe federal or Massachusetts estate tax depends upon the value of your taxable estate when you pass away.   In order to determine whether your estate will be liable for estate taxes and to advise you about your options for reducing or eliminating that tax, we need to know the nature and value of your assets.

Long-term Care Planning.  Long-term care planning is typically planning to preserve assets from having to spent down on long-term care costs.  Such planning can be done in advance (the need for long-term care is not imminent) or in a crisis (nursing home care is imminent or likely within the next few months).  In either case, our long-term care attorneys, need to have detailed information about assets and income in order to advise you about your options for planning to preserve your assets.  When we are working with a married couple, information about both spouses’ assets is needed since eligibility for some long-term care benefits programs is contingent on both spouses meeting the criteria imposed by the benefits program.

Estate Planning.  Estate planning is done to make sure your assets pass to the people you intend at your death.  How an asset is owned and how beneficiaries (if any) are designated on an asset will determine how that asset will be distributed at your death.  In order to give you advice about whether or not changes to asset ownership or beneficiary designations are necessary based on your estate planning goals, we need to know how assets are owned and how beneficiaries are designated currently, so we can work with you to create the most accurate estate plan for you and your family.

Q. Why do I have to complete a Client Questionnaire if I am already a client? An important aspect to having an estate plan that actually accomplishes your goals is to keep your plan up to date.  Your life is not static – family situations change, health changes, income and assets change, etc.  These factors have an impact on the type of estate plan you should have and the provisions of your plan.  We actively encourage our clients to regularly review and update their estate plan to ensure the success of that plan.  Returning clients sometimes question the need to complete an updated Questionnaire saying that ‘nothing has changed.’  If it has been more than a few years since you filled out a Client Questionnaire, completing an updated Questionnaire will ensure that we are best able to advise you.   We would be happy to send you a copy of the most recent Client Questionnaire we have on file for you so that can you work off of that in updating your information  Just ask Jen to send that to you when you schedule your appointment.  Having an updated Questionnaire in your file will also help us help your family members in the event you become incapacitated, and at the time of your death, as we will be able to give them information about assets, help them locate a safe deposit box, etc.  This can save a lot of time and effort for family members.

Q. The Questionnaire is 14 pages long – do I really need to fill out the entire form? Yes, we do want you to complete the Questionnaire in its entirety. Some of the sections may not apply to you and you should indicate that on the form.  For example, we ask about ownership interests in a business – if you do not own an interest in a business, you will skip this section. If you do not have life insurance, you will skip that section.   The last page of the Questionnaire asks about your goals for your planning – is reducing taxes important to you?  Are you concerned about protecting the inheritance you leave your children from their creditors, such as a divorcing spouse or a lawsuit?  We want to know what is important to you so that we can help you create the right estate plan that is best for you and your family.

Q. Do you share that information with anyone outside of your firm? Of course not! We are lawyers, and confidentiality is of paramount importance to us. Our staff is also well-trained on keeping all client information, including the names of our clients, confidential.

We’re here to help you achieve your estate and long-term care planning goals.  Whether those goals are probate avoidance, estate tax reduction, preserving assets from the high cost of long-term care, or simply the peace of mind in knowing that you have put your affairs in order, successful legacy planning begins with our collection of the information requested on our Client Questionnaire.

August, 2019

© 2019 Samuel, Sayward & Baler LLC

At its heart of estate planning for beneficiaries with special needs is the special needs trusts (SNT).  SNTs allow you to provide your beneficiaries with an inheritance while allowing them to maintain eligibility for public benefits they need. Assets in SNTs do not count toward the asset limit imposed by government programs. You can choose a Trustee to manage the inheritance for your child and make distributions to supplement your child’s benefits. Below are five things to consider to provide peace of mind when you have a disabled beneficiary.

1. Create a Special Needs Trusts (SNT). Parents and grandparents can create trusts for their special needs children or grandchildren with the assistance of an estate planning attorney with expertise and experience in planning for beneficiaries with special needs.  This is preferable to leaving money directly to the beneficiary because SNTs provide long-term management of the inheritance you leave to disabled beneficiaries while allowing them to qualify for needs-based government benefits. Special needs trusts can pay for and supplement medical and travel expenses, entertainment, pet care and other expenses that can enhance a beneficiary’s quality of life especially when you are no longer around. You would name a Trustee to manage funds in the Trust. The person you name as Trustee could be a professional or a trusted family member.

2. Learn About the Types of SNTs. First-party trusts hold assets the beneficiary owns, for example, from inheritance or lawsuits. When the beneficiary dies, the funds remaining in the trust must be used to reimburse the government for services the beneficiary received. Parents with a disabled child often establish third-party trusts.  These trusts are created and funded by someone other than the beneficiary. The advantage is that any funds left when the beneficiary dies can be distributed to contingent beneficiaries such as other siblings. Special needs trust assets do not have to pay the government for services received.

3. How Much Money Do You Leave for a Beneficiary?  The amount a child needs depends on a family’s needs and lifestyle and a child’s abilities. Housing can be a large unknown. Group homes may require purchase of a condominium unit in a building with services for special needs, and monthly costs will apply for food, utilities and staff. Families may also want to budget eating out weekly, technology (for example, an iPad every couple of years) or gym memberships. When parents die, costs increase because a social worker must be paid to coordinate care and advocate for the beneficiary. Another consideration is legal fees.  Family members who serve as the sole Trustee of a special needs trust should consult attorneys to guard against actions that may jeopardize benefits.

4. Appoint a Guardian and/or Conservator. When special needs beneficiaries need to have a legal guardian and/or conservator, a probate court proceeding is required.  A guardian for a beneficiary with special needs is responsible for decisions about medical care and living arrangements. A conservator is responsible for your beneficiary’s property and finances.  Any person serving as a guardian or conservator should name successor guardians and conservators in their Will.  A court will need to appoint the guardian named in a Will to make decisions for your child. Responsibilities may include those below, so great care should be taken in deciding who to appoint to these important positions.

• Applying for public benefits including those from Social Security
• Advocating for your child’s rights and best interests
• Safeguarding your child’s finances and consulting with physicians
• Making decisions regarding treatment and placement
• Releasing medical records for Social Security and health insurance

5. Write a Letter of Intent. Parents of children with disabilities should write letters of intent.  A letter of intent provides Trustees, guardians, advocates and caretakers guidance about your child’s abilities, routines and interests and your child’s likes and dislikes.  The letter should include at least the following:

• Education – regular and special education needs, services, programs and providers
• Final Arrangements – cremation or burial; family plots; religious services and clergy
• Residence – group home or community preferences, size and arrangements for a child
• Healthcare – doctors, therapists and hospitals; frequency and purpose of appointments, medications taken in the past and currently and whether they worked

Keep these things in mind when thinking about your family member with special needs and consult with estate planning attorney who has expertise in special needs planning to advise you about these important matters.

Natalene B. Ong, Esq. is an estate planning attorney at Samuel, Sayward & Baler LLC, a law firm in Dedham that focuses on advising clients in estate planning, special needs planning, estate and trust administration and elder law.  For more information, visit www.ssbllc.com or call (781) 461-1020. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney.

August, 2019

© 2019 Samuel, Sayward & Baler LLC

As surprising as it may seem to some, it is not unusual for me to hear my clients who are very elderly or terminally ill tell me, in all seriousness, that they are ready to die.  For many people in this situation, having no control over their fate is very disheartening.

In the United States, a person’s ability to legally and voluntarily end his or her own life is a controversial topic.  However, the “death with dignity” movement is growing.  Also called “medical aid-in-dying” laws, these laws allow terminally ill, competent adults to request a physician to prescribe medication that will allow them to end their lives in a peaceful manner and at a time of their choosing.  As of April, 2019, nine states in the United States (Oregon, Washington, Vermont, California, Colorado, Hawaii, New Jersey, Montana and Maine) and the District of Columbia have physician-assisted dying laws in effect, or permit physician-assisted death by Court ruling.

This year in Massachusetts, the End of Life Options Act was filed in the Massachusetts legislature and sponsored by a total of 67 State Senators and Representatives.  Senate bill S.1208 was introduced in January 2019, along with companion bill H.1926.

This legislation would give adults who are terminally ill an additional option at the end of life – essentially to control the timing and manner of their death.

These bills would create a new law which would allow an adult who is mentally competent and who has been diagnosed as being terminally ill to request a physician to prescribe medication which the patient may choose to self-administer to bring about a peaceful death.  The End of Life Options Act contains various safeguards to ensure the request is voluntarily made by a patient who is informed, competent and is in fact terminally ill.  Two physicians must confirm:  1) that the patient is terminally ill; 2) that the patient is competent and acting voluntarily; and, 3) that the patient has made an informed decision.  The patient must also undergo counseling to ensure the patient is not suffering from a psychiatric or psychological disorder or depression that impairs the patient’s judgment.  Notification of the patient’s family is recommended but not required.

The law also spells out the effect of the patient’s actions on Wills, contracts, insurance policies, and other legal documents that may be affected by a person’s death.

The End of Life Options Act was referred to the Legislature’s Committee on Public Health, and heard in the Joint Public Health Committee on June 25, 2019, where patients with terminal illnesses and their loved ones, along with physicians, advocates, social workers and faith leaders testified about their experiences with death and dying.

It appears no further action has been taken on these bills since the June 25 hearing.  If you are interested in voicing your opinion on this legislation, a list of the sponsoring legislators for each bill can be found here: S.1208 and H.1926.

Although this is dealt with in the proposed law, if this legislation becomes law, it could potentially raise many estate planning issues around end of life decisions. Are people able to make sound decisions regarding inheritance and legacy planning during such a difficult time, will changes to these estates be contested? If you have questions regarding End of Life Planning or other concerns please contact a qualified Estate Planning Attorney.

July, 2019

© 2019 Samuel, Sayward & Baler LLC