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What is a Life-Sustaining Treatment Order?

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What is a Medical Order for Life-Sustaining Treatment (MOLST)? How do you complete a MOLST form? Is a MOLST form the same as a Health Care Proxy? Is it part of my estate plan? Watch the video to learn the answers to these questions and more. For additional information about the MOLST form, visit the website at molst-ma.org.
To contact us, please call 781-461-1020 or visit our website at ssbllc.com.

The Importance of Planning for Incapacity

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I run into clients often who jokingly tell me “I’m not going to die” when discussing their estate planning.  Although many of us would like to think we are immortal, it is a fact that we will all die sooner or later.  Harder to imagine for many people is that they may experience a period of incapacity prior to death.  This may happen due to hospitalization or illness, or due to dementia in one of its many forms, including Alzheimer’s disease.  

It is just as important to plan for incapacity as it is to plan for death.  As we often tell our clients, planning for incapacity may be even more important, because you are still alive and will be directly impacted by how your assets are managed for you and who is in control on your behalf.  Whatever happens after your death will impact those you leave behind, but for better or worse will not impact you!

Planning for your incapacity is serious business.  It involves identifying people you can trust, and creating documents that will allow them to assist you if and when you need or want assistance in the future making financial, legal or health care decisions.  Planning for incapacity involves:

  • Creating a Power of Attorney that names a person who you authorize to handle your legal and financial affairs if you are unable to do so.  This should be someone you trust implicitly to handle things appropriate and in your best interest.
  • Creating a comprehensive list of assets, legal and financial advisors, beneficiaries, digital asset access information, and other information that will be crucial to someone who may have to take over your financial affairs unexpectedly.
  • Creating a Health Care Proxy that names a Health Care Agent to make health care decisions for you if you are unable to make those decisions yourself.
  • Making sure your Health Care Agents understand your wishes about the type of care you want to receive, particularly at the end of life, and even more importantly if you become incapacitated and are unable to articulate your care preferences at that time.  There are many organizations that assist people to express those wishes – The Conversation Project is one of many.
  • If you already have these documents, reviewing them periodically to determine if the people named in the documents are still trusted people you can count on to be there if you are not well.
  • If the people you have named are getting older or are not well, do you have appropriate alternates named to take their place if they cannot (or do not wish to) serve in those roles if the time comes?

In these documents you can also designate a person to serve as your conservator or guardian should a court need to step in and appoint a person to make decisions for you.  This can help avoid a situation where you need assistance and the Court must appoint someone to make decisions for you, who may not be someone you would have chosen.  I am reminded of the recent move I Care a Lot, a black comedy / thriller distributed by Nexflix in 2020, starring Rosamund Pike who won a Golden Globe for the role. The movie tells the story of a professional legal guardian who has less than good intentions.    Although the movie is not based on a true story, it is based on real-life situations and scams like one that occurred in New York in 2013.

Unfortunately, this past year and a half has taught us that life and health are unpredictable.  Make sure you have all your bases covered, and have chosen and named people you trust to handle things for you if you are unable so you don’t end up vulnerable to those who may take advantage of your situation.

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 the current President of 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.

August, 2021

© 2021 Samuel, Sayward & Baler LLC

 

Five Things to Think About When Considering an Irrevocable Long-Term Care Trust

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Five Things to Think About When Considering an Irrevocable Long-Term Care Trust

It’s no secret that the cost of long-term care is spiraling out of control in this country, and, consequently, it’s no wonder that more and more clients are expressing concerns to us about wanting to “protect” their assets from being depleted by the cost of such care. Clients will frequently mention either that they heard on the radio, TV, or the internet that they can accomplish this using an irrevocable trust or that they have a friend, neighbor, or relative who put their assets into an irrevocable trust for this purpose. While irrevocable trusts can absolutely be used to protect assets from being spent on long-term care, they are not a universal “one size fits all” solution, and they are not without drawbacks. With this in mind, here are five things to think about if you are considering an irrevocable trust to protect assets for long-term care purposes (an “irrevocable long-term care trust”):

  1. You Have to Give Up Control. Despite what numerous radio, TV, and internet ads would have you believe, you cannot protect your assets from being spent on nursing home care while retaining full control over them. Under federal and state law, assets in an irrevocable long-term care trust created by you (or your spouse) are subject to the “any circumstances” test, meaning that if there are any circumstances under which the assets could be distributed to you or used for your benefit, the assets will not be protected and would need to be spent on your long-term care before you would be eligible to receive public long-term care benefits (part of the Medicaid program, known as MassHealth in Massachusetts). As a result, in order for an irrevocable long-term care trust to function as intended, you cannot have any right to access the assets in the trust once they have been transferred into it, nor can the trustee (the person in charge of managing the trust’s assets) have any ability to distribute the assets directly to you or use them directly for your benefit. This means that, among other things, if your house is transferred into an irrevocable long-term care trust you will not be able to access its equity through a home equity line of credit or a reverse mortgage. Additionally, trust funds could not be used to directly pay for services for you, such as an assisted living facility or home health aides. Finally, while you would retain the ability to remove and replace the trustee, you could not serve as the trustee yourself and, therefore, would not be able to directly manage the assets in the trust.
  2. You Have to Have the “Right” Assets to Fund the Trust. When it comes to funding an irrevocable long-term care trust, not all assets are created equal. In particular, you cannot transfer tax-qualified retirement accounts (e.g., IRAs, 401(k)s, etc.) into a trust without immediate income tax consequences. This is because such accounts have to be converted into taxable brokerage accounts (or cash) in order to be transferred out of your individual name, meaning you would be taking a taxable distribution equal to the entire balance of the account. So, if you were to transfer a $300,000 IRA into the trust, you would have $300,000 of additional taxable income reportable on your personal income tax return for the year the transfer is made. Additionally, it is not generally a good idea to transfer a home with an outstanding mortgage into an irrevocable trust. This is because if you continue to pay the mortgage with your own non-trust funds, such payments could be considered additional gifts to the trust (since you no longer own the home in your individual name), which could create problems in the event you need to subsequently apply for MassHealth long-term care benefits.
  3. You Have to Wait Five Years Before Applying for Long-Term Care Benefits. In order to avoid the possibility of people transferring their assets into an irrevocable long-term care trust and then turning around and applying for MassHealth long-term care benefits the next day, state and federal law give MassHealth the authority to review all of your financial transactions for the 60 months (5 years) immediately preceding your application for long-term care benefits. Any and all gifts and other transfers for less than fair market value made during that time, known as the “lookback period,” are considered to be “disqualifying transfers,” which will delay the start of your MassHealth long-term care benefits for a period of time determined by the value of the assets transferred. If significant assets are transferred, this delay can last several months, if not years. Thus, an irrevocable long-term care trust is generally not a good idea unless you are confident that you will not need MassHealth long-term care benefits until after the end of the lookback period and/or you retain sufficient assets in your individual name to pay for your care needs during the lookback period.
  4. You Are Limiting Your Options Going Forward. A fellow practitioner once told me that he counsels clients that irrevocable long-term care trusts effectively guarantee that they’ll wind up in a nursing home if they need long-term care in the future. While this is a bit of an exaggeration, it is definitely true that an irrevocable long-term care trust severely limits your options going forward. This is because, as of now, MassHealth long-term care benefits are geared primarily towards nursing home care. Although there are some community-based long-term care benefits available, as a general rule these benefits do not cover 24/7 home health aides, nor do they generally cover assisted living facilities. Further, even within the realm of nursing home care, MassHealth long-term care benefits will only cover a semi-private room (meaning you would be sharing a room with someone else). By contrast, maintaining assets in your individual name gives you the ability to tap into those assets (through, e.g., a reverse mortgage or home equity line of credit on your home) to allow you to be cared for in the most comfortable, least restrictive setting possible for as long as possible.
  5. It Might Not Work. Eligibility for MassHealth long-term care benefits is governed by a complex web of state and federal statutes, regulations and court cases. These rules change frequently, particularly at the state level, and often apply retroactively, meaning that no exception is made for irrevocable long-term care trusts that were created prior to the new rules taking effect. Thus, what is permissible today may not be permissible tomorrow, and an irrevocable long-term care trust created under today’s rules may be in violation of the rules that exist at the time you apply for MassHealth long-term care benefits. Further, MassHealth has a history of aggressively reviewing and challenging applications for long-term benefits that include irrevocable trusts (the existence of an irrevocable trust must be disclosed to MassHealth even if it was created outside of the lookback period), and anecdotally most such applications appear to be denied on the first pass, necessitating a costly and time-consuming appeal.

A properly structured irrevocable long-term care trust can be an appropriate tool to protect assets from being spent on long-term care, but just like a power drill isn’t always the appropriate tool with which to fasten a screw, an irrevocable long-term care trust is not always the appropriate tool for long-term care asset protection. It is important, therefore, to consult with an experienced elder law attorney to determine the best tools to achieve your goals given your specific circumstances.

August 2021

© 2021 Samuel, Sayward & Baler LLC

July 2021 Newsletter

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News from Samuel, Sayward & Baler LLC for July 2021  includes the articles: 5 Thoughts About Planning for Your Vacation Home, When Preparing for a Child to Go Away to College, Don’t Forget Their Estate Plan Documents, Ask SSB: Does signing a new Health Care Proxy revoke my current Health Care Proxy? An update of What’s New at Samuel, Sayward & Baler LLC, and an Employee Profile – Meet Victoria Ung

 

 

Ask SSB

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Q: Does signing a new Health Care Proxy revoke my current Health Care Proxy?

A: Yes. A Health Care Proxy is a document that appoints a person to make health care decisions on your behalf when you cannot (your “Health Care Agent”). Sometimes when you visit your physician’s office or the hospital for a procedure or emergency, you will be asked to fill out and sign a new Health Care Proxy that is a standard, basic form. If you have already completed a Health Care Proxy as part of your estate plan, you should not sign the new Health Care Proxy. Doing so revokes and replaces your estate plan Health Care Proxy, which has expanded beneficial powers to ensure your Health Care Agent has the authority to take the necessary steps to assist you without court involvement.

Instead, when you receive a copy of your Health Care Proxy from us, you should provide a copy to your physician’s office immediately so that it is included in your medical records.

Additionally, we recommend saving the Health Care Proxy electronically so that you may access and provide it via your Smartphone in an emergency. Electronic and physical copies of your Health Care Proxy should be provided to your Health Care Agents for the same reason, too.

An experienced estate planning attorney can assist with completing a Health Care Proxy if you or a family member over age 18 have not completed one yet, or it is time to update your Health Care Proxy because you wish to have other Health Care Agents designated or it is several years old.

Child Going Away to College? Don’t Forget Their Estate Plan Documents

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With the month of August upon us, parents around the country are participating in the time-honored tradition of preparing their young adult children to go away to college. While it’s certainly important to ensure that they have the necessary clothing, bed linens, and other such items, it is also important to have certain legal documents in place to permit someone to make decisions and access information in the event of an emergency.

While every parent knows that a child becomes a legal adult upon turning 18, most parents fail to appreciate the full extent of the consequences. In particular, once a child turns 18, not only do parents no longer have the legal authority to make financial or medical decisions on that child’s behalf (even in emergencies), they also no longer have the legal right to access that child’s medical, financial, or educational information. This means that, without prior planning, not only would parents be unable to make medical or financial decisions on behalf of their child in the event of an emergency, they might not even be permitted to know the details of what happened or the nature of their child’s situation.

It is therefore incredibly important for college-aged children to have the following documents in place to allow decisions to be made (and information to be accessed) in the event of an emergency:

1. Durable Power of Attorney: This document designates one or more people to act on the child’s behalf regarding finances and assets (e.g., bank accounts, credit cards, student loans, etc.).

2. Health Care Proxy: This document designates someone to make medical and health care decisions on the child’s behalf if the child is unable to make such decisions.

3. HIPAA Authorization: This document authorizes the child’s health care providers to discuss the child’s protected health care information with the people named in the document. Unlike the Health Care Proxy, the HIPAA Authorization does not confer any decision-making authority on the people named in it.

4. FERPA Authorization: This document authorizes the child’s college or university to disclose the child’s protected financial and academic records to the people named in the document. As with the HIPAA Authorization, this document does not confer decision-making authority on the people named in it.

We encourage all of our clients with college-aged children to discuss these matters with their children and to contact our office if your child is interested in having these documents prepared.

Medicaid (MassHealth) Estate Recovery Recent Updates

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Did you know that Medicaid (MassHealth) is entitled to reimbursement from your probate estate after your death if you received benefits to cover your long-term health care expenses in a skilled nursing facility during your lifetime? Medicaid recently updated the regulations regarding estate recovery, which attorneys from the Massachusetts chapter of the National Academy of Elder Law Attorneys (MassNAELA) discuss in this short video. Watch here.
To learn more about these recent estate recovery updates, you are invited to register and attend MassNAELA’s webinar on Wednesday, July 28, 2021 at 10:00 a.m. Registration link here.
**Last Chance to register to attend our Smart Counsel webinar about this summer’s hot real estate market with Attorney Suzanne Sayward and a panel of realtors on
Thursday, July 22, 2021 from 6:00 p.m.-7:30 p.m.
Join us to learn tips and tricks for buyers and sellers. Attendees will have the opportunity to ask questions.
Contact Victoria Ung at 781-461-1020 or ung@ssbllc.com to reserve a spot for you and a friend.  The program is free but registration is required.

 

Five Thoughts About Planning for your Vacation Home

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With summer upon us and pandemic-induced quarantines a distant memory, at least here in the Northeast, we are all looking forward to some fun this summer.  If you are lucky enough to have a second home you are probably spending some well-earned vacation time there right now with family members, creating lasting memories. If you are the owner of a vacation home, it’s never too early to think about the future. 

Is this a property you wish to pass on to your children and grandchildren so the good times can continue long after you’re gone? In many cases, your heirs may not be able to purchase a vacation home on their own so it is especially important to make sure the property will be there for them to enjoy.  Here are five things to consider when planning for your vacation property:

1. Do Your Children Share Your Hopes and Dreams?

You may intend to leave your vacation home to all of your children to use and enjoy for their lifetimes. When planning, it is important to consider whether these intentions are realistic. Take a hard look at how the property is used and by whom. Do all of your children enjoy the property and will they continue to do so in the future, taking into account their busy lives and where they live?  Or is the home primarily used by one or two children who live close enough to visit often? When planning for the future of your vacation home, talk to your children about your plans and encourage them to be honest with you.  Knowing who wants to keep the property and who has no interest in owning a second home is vital information before you begin your planning.

2. How Will the Bills Get Paid?

If you intend for your children to contribute to the cost of maintaining the property after your death, consider whether all of your children can afford to do this, or whether it makes sense to leave the property (and the financial burdens of its maintenance) to the child or children who can afford the expenses that go along with owning such a property.  If you are financially able to do so, you may want to leave extra money to support the property which can be used to pay ongoing expenses and make repairs as needed, and take the burden of those expenses off of your family members.  If this is the route you choose to go, don’t underestimate the funds that may be needed, and err on the generous side if you are unsure.  

3. How Will Decisions be Made?

No matter how smart your children are or how well they get along, it is always helpful to have a plan for how decisions will be made – such as who can use the property and when, what improvements will be made to the property, and whether the property should be sold.  It is helpful, whether in a Trust or other written agreement to set out rules that clearly govern how these matters are decided, and how disputes are resolved.  If a child cannot contribute to his share of the expenses, or wants to sell his interest in the property, a structured plan will allow for such transitions, including the opportunity for siblings to buy out one another

4. Don’t Forget the Tax Planning.  

Vacation homes are often a beloved asset, but they are an asset nonetheless, subject to estate tax like the other assets in your estate.  It is crucial to take into account how estate taxes will be paid when planning for a vacation home that will not be sold.  In some sad situations, the next generation would love to keep the vacation property, but the estate taxes payable at the parents’ deaths are so steep that they cannot afford to do so.  Consider undertaking planning to reduce the tax bite at your death by gifting the property or an interest in the property during your lifetime, and at your children’s death by incorporating generation-skipping planning.  If taxes must be paid, consider using life insurance to provide a resource from which estate taxes can be paid, reducing the possibility that the property will need to be sold to satisfy a tax obligation.

5. Transfer during lifetime or at death? 

Many vacation homeowners intend to continue to own their property during their lifetimes and leave the property to their heirs at their deaths.  By doing so, they remain the sole decision-makers and keep their options open: they could sell the property, rent it out, change their minds about who will inherit it, etc.  However, transferring ownership to the next generation during the parents’ lifetimes can make sense for tax planning or long-term care planning reasons.  As Congress debates estate tax changes that could reduce the federal estate tax exemption, lifetime gifts of vacation homes are something that should be considered, balancing the capital gain tax and control implications of such a gift against the estate tax cost of retaining ownership until death.

Thoughtful and timely planning for a vacation property can ensure the property will pass to future generations in a way that will minimize issues and maximize the chances the property will be enjoyed by your family for generations to come.  If you have a vision of your descendants enjoying your beloved cottage and building memories there, take the necessary steps now to make your wishes a reality.  Failing to plan and simply hoping that your children will “figure it out” is the clearest path to family discord, which is the last thing you need on a relaxing family vacation.  

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 the current President of 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.

July, 2021

© 2021 Samuel, Sayward & Baler LLC

Smart Counsel Webinar – Hot Summer, Hot Market, What Home Sellers and Buyers Need to Know

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Welcome to summer 2021 where the weather is hot and the real estate market is even hotter!  Join us for our next Smart Counsel webinar where local realtors Adam Hayes of Milestones Realty and Ellen Grubert and Janis Lippman of the EllenandJanisteam/Compass will share their expertise on this very active real estate market, offer tips for sellers and buyers, and talk about what you can expect if you venture into the fray.  

Adam and his team have a particular focus on representing seniors who have owned their homes for decades and are now selling that home.  Adam will talk about issues specific to this growing population.  

Ellen and Janis will talk about the market for first time home buyers and trade up buyers.

Attorney Suzanne Sayward will round out the panel and will speak to some of the tax aspects of selling property and what sellers who own their real estate in trust need to know. 

In addition to hearing from our panel, attendees will have the opportunity to ask questions. 

Join us virtually for this presentation on Thursday, July 22, 2021 from 6:00 pm to 7:30 pm.  

Contact Victoria Ung at 781/461-1020 or ung@ssbllc.com to reserve a spot for you and a friend.   

The program is free but registration is required.  

Suzanne R. Sayward

Maria C. Baler

Abigail V. Poole  

Francis R. Mulé

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

©2024 Samuel, Sayward & Baler LLP. All Rights Reserved. The information presented on this website should not be construed to provide legal advice, nor does it constitute the formation of an attorney/client relationship. Read the disclaimer.