Articles and Blogs

Refinancing When Your House is in a Trust

September 16, 2020 by Attorney Suzanne Sayward

Attorney Suzanne Sayward discusses what to consider when refinancing your house, if it is held in a trust, for our Smart Counsel for Lunch Series. Please watch and if you have any questions or want to learn more call us at 781 461-1020.

Understanding the MOLST Form

August 26, 2020 by SSB

WHAT IS A MOLST FORM?

A MOLST Form is a medical order form (kind of like a prescription). It stands for “Medical Order for Life-Sustaining Treatment”. The form conveys instructions between healthcare professionals regarding a patient’s care. Click here to see the actual form.

DOES EVERYONE NEED A MOLST FORM? WHEN IS IT APPROPRIATE?

In Massachusetts, patients of any age with a serious advanced illness may discuss completing a MOLST form with his or her doctor. It is a common misconception that a MOLST form should be completed routinely with other health care directives. This is not the case. Again – it is only intended for patients who have a serious advanced illness.

IS A MOLST FORM THE SAME THING AS A HEALTHCARE DIRECTIVE/ADVANCE DIRECTIVE?

No, these are two different documents. Advanced directives (also known as health care proxies) are legal documents that become effective after the patient has lost capacity and is no longer capable of making his/her healthcare decisions. All adults over the age of 18 should have a healthcare proxy to name an agent to make healthcare decisions in the event of an unexpected accident or illness.

A MOLST form, however, is a medical document that contains medical orders that are effective immediately based on a patient’s current medical condition, regardless of the patient’s current ccapacity to make healthcare decisions.

If you decide to execute a MOLST form with your doctor, you also need to complete a healthcare proxy.

WHAT IS THE PROCESS FOR COMPLETING A MOLST FORM?

Before completing a MOLST form, the signing clinician (physician, nurse practitioner, or physician assistant), the patient and family members should discuss the patient’s medical condition, what should happen next, the patient’s values and goals for care and any possible risk and benefits of treatments offered. After these discussions occur, the form may be completed and signed by the clinician and the patient. The executed form remains with the patient and is to be honored by health professionals in any situation.

For a helpful website regarding the MOLST form, click here.

Too Much Togetherness: Divorce and Estate Planning in the Time of COVID-19

July 22, 2020 by Attorney Maria Baler

Among the tales of unfortunate fall-out from COVID-19 are those I hear from my family law colleagues about the number of couples deciding to divorce. Not surprisingly, three months of home confinement with your spouse will bring some clarity to how compatible two people really are. For those who are going through a divorce or divorce mediation, or those advising them, it is important not to lose sight of the importance of an up-to-date estate plan amidst the emotional and legal challenges a divorce brings.

During divorce proceedings, an automatic restraining order applies that prohibits either spouse from selling or transferring assets or changing the beneficiary on life insurance and retirement accounts except as permitted by Court order or agreement of the other party. Although asset ownership and beneficiary changes may not be made until after the divorce judgment issues, an important interim step for divorcing parties is to create updated Powers of Attorney for legal and financial decision-making, and Health Care Proxies for health care decision-making, so that a trusted individual, and not an estranged spouse, will make those types of decisions in the event of incapacity during the pendency of the divorce.

The law does provide some assistance in “modifying” an estate plan after divorce, although the result may not be what the divorced person intends. In Massachusetts by law, a divorce judgment revokes any disposition of property to the divorced person’s former spouse, including trust provisions, beneficiary designations as to life insurance and retirement plans, transfer-on-death accounts, and any other revocable disposition. If estate plan documents named the former spouse or family members of the former spouse as a fiduciary – such as a Personal Representative (formerly Executor) or Trustee – those designations are treated as if the former spouse predeceased the divorced person. Although these provisions may seem to do the trick, in reality they can wreak havoc on an estate plan and create unintended consequences. In addition, in the event a divorced person intends to benefit their former spouse with life insurance or some other asset, steps must be taken to ensure that designation will stick after the divorce occurs.

Once a divorce is final, each party should review their existing estate plan and beneficiary designations with the help of an experienced estate planning attorney, and make any changes that may be necessary. For example, for a couple with young children, a Trust may be appropriate to manage a divorced parent’s assets for the benefit of those children if that parent were to pass away during a child’s minority. Naming someone that a parent trusts to manage and apply the Trust assets appropriately for the minor children is of the utmost importance for a single parent. If a Trust is not created, the children’s guardian/conservator will have responsibility for managing any assets inherited by the children, and that person is likely to be the children’s surviving parent. For most divorced couples, the idea that a former spouse will have control over the inheritance left to the children is unsettling and inconsistent with their intentions. An estate plan that addresses divorce-related issues can ensure this does not happen, and that the divorced parent’s wishes will be carried out.

And let’s not forget that many divorced people go on to find love again. Estate planning for blended families is just as important. Re-marriage brings its own set of estate planning challenges, especially if the parties have children from prior marriages or relationships. In such a case, good estate planning is crucial to ensure that if one member of the new couple dies, his or her children from a prior marriage will be provided for appropriately, while the new spouse or partner is also provided for if they do not have sufficient means of their own. It is unfortunate when all of a parent’s assets pass to the new spouse, who then leaves them to his or her own children or family members at death, leaving the deceased’s children with nothing.

Whether divorce is a sad event or a welcome new beginning – or maybe both – estate planning is more important than ever during and after a divorce, to avoid unintended results and ensure children and other family members will benefit as you intend.

Five Things To Do Soon After A Loved One Passes Away

July 8, 2020 by Attorney Abigail V. Poole

Although the number of COVID-19 cases is surging in other parts of the country, thankfully here in Massachusetts we continue to see a slow and steady decline. Hopefully, this trend will continue. Nevertheless, there are sadly still individuals who are becoming infected with COVID-19 and dying from complications due to the virus, reluctance to seek treatment for other health issues, or for a myriad of other reasons. What should I do when a loved one passes away may be a question that you unfortunately have to ask yourself. Whether a loved one’s passing is expected or unexpected, managing his or her affairs can be difficult to think about while dealing with the grief and loss of a loved one. Here are five steps to provide some guidance on what to do soon after a loved one’s death, in no particular order:

1. Arrange Burial and Memorial Services According to the Loved One’s Wishes

If the deceased was forward-thinking enough to pre-arrange and/or pre-pay his or her funeral when also preparing his or her estate plan, then contact the funeral home with which these arrangements were made. If no plan was put in place before death, contact a reputable funeral home to guide you through the burial and memorial service process. Keep in mind that currently funeral homes are open for business but have adjusted to function within the Governor’s pandemic guidelines. This generally means that services may include no more than ten family members. Several of my clients have decided to hold off on a memorial service until such time that it is possible to host a larger gathering in honor of their loved one.

As part of an estate plan, the deceased may have prepared a Directive as to Remains. A Directive as to Remains is a document that instructs the deceased’s Personal Representative (Executor) to arrange the deceased’s burial or cremation and funeral/memorial services as directed in that document. Your loved one alternatively may have written down similar wishes in a letter of instruction. Carefully review your loved one’s estate planning documents to learn if the deceased left such instructions so that his or her wishes are carried out.

2. Find and Organize Important Documents

Hopefully your loved one showed you where he or she keeps important documents like his or her Will, income tax returns, financial account statements and bills that are regularly paid. This information will be necessary for the proper services and administration of the deceased’s estate. Locate a safe but easily accessible place where you can store this information as you will refer to and use it often. Do not throw away any financial records or legal documents until you know you will not need them for tax filings, asset valuation, or other purposes.

3. Secure Property of the Estate

Your loved one may have several different types of assets in his or her estate at death. In every case, the Personal Representative (or Trustee if there is a Trust) is responsible for ensuring the deceased’s property is secure and protected for the beneficiaries of the estate. For example, it is important to safely store valuable jewelry and artwork. Similarly, any real estate should be securely locked (perhaps even change the locks) and regularly visited. In fact, it is an obligation of the Personal Representative to do so, and he or she may be liable if such measures are not taken and damage occurs to the property. The Personal Representative should also maintain or obtain insurance in connection with the deceased’s assets, as necessary, and may need to have some or all of them appraised for estate administration and/or estate tax purposes.

4. Contact an Estate Planning and Administration Attorney

The settlement of an estate can be incredibly complex depending on the assets and beneficiaries involved, and the provisions of the deceased’s estate plan. The Personal Representative should contact an attorney to guide and assist him or her through the process of completing and filing the required documents to be appointed as Personal Representative by the probate court, gathering assets, paying appropriate expenses, and making distributions, to avoid failing to fulfill his or her obligations. This is especially important if the estate assets are valued at over $1 million and a Massachusetts estate tax will be payable, or if it is anticipated that MassHealth (Medicaid) may file a claim against the estate to be reimbursed for any MassHealth benefits (for home care or nursing home care) received by the deceased during his or her lifetime.

Keep in mind that the administration of an estate typically takes at least one year so you may want to take the tortoise’s point of view – slow and steady wins the race.

5. Communicate and Work Together

On top of the issues mentioned above, estate administration can be made more difficult if there are strained relationships between the beneficiaries, which often also includes the person who is serving as Personal Representative. Perhaps there is a history of family disharmony. Perhaps multiple beneficiaries are sentimentally attached to mom’s diamond engagement ring and they must decide who gets to keep it. The only person who wins when there are disagreements between beneficiaries that cannot be resolved is the attorney who gets paid to resolve them via negotiation or court action. Instead, consider embracing the three C’s as much as possible when working with each other: Communication, Cooperation and Compromise.

Estate administration can be a juggling act where the Personal Representative is managing several different responsibilities all at once, including fulfilling the wishes of the deceased and the Personal Representative’s obligations to the beneficiaries. An estate planning attorney knowledgeable in the process of estate administration can guide you through that process in a correct and efficient manner, so that you have peace of mind when all is complete, hopefully with family relationships intact, which is most likely what your loved one would have wanted when setting up his or her estate plan.

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.

July, 2020

Samuel, Sayward & Baler LLC In-Office Meeting Protocols

July 1, 2020 by Attorney Suzanne Sayward

As we begin to return to some semblance of normalcy, including conducting in person meetings in our office, our primary concern remains the safety of our clients, our team members and anyone else coming into the office. Please read the following carefully before coming into the office and contact us if you have any questions.

When coming to the office for a meeting, please call the office upon arrival and before coming upstairs to ensure adequate social distancing while in the office.
Everyone entering the office must wear a face mask (masks are available for client use, if needed).
Upon entering the office, you will be asked to wash your hands or use hand sanitizer before being seated in the conference room.
Please respect social distancing measures when seated in the conference room.
All contact surfaces in the conference room are thoroughly cleaned and sanitized following each appointment.

Before coming to our office, we request that you ask yourself the following questions and if you answer YES to any question, please re-schedule your appointment.

Do you feel unwell? Do you have a fever, cough, runny nose, sore throat, or are you experiencing shortness of breath or difficulty breathing? Recent loss of taste or smell?
To the best of your knowledge have you been in close proximity to any individual who has recently tested positive for COVID-19?
Do you have any reason to believe you or anyone in your household has been exposed to or acquired COVID-19?

Peace of Mind Comes from Estate Planning

June 25, 2020 by Attorney Suzanne Sayward

What a great phrase, ‘peace of mind’. It evokes feelings of all being right with the world, or at least your world. These days peace of mind is an elusive feeling, and given the state of the world it seems likely that this will remain the case for some time. Many of us are walking around (but only in our houses and neighborhoods!) in a state of perpetual anxiety. If you search the internet you can find a number of websites offering tips for reducing stress and anxiety many of which recommend:

Getting some exercise
Meditating
Focusing on your breathing
Taking action

Taking action can mean doing something to distract from the anxiety such as calling a friend or watching a video of baby goats (so cute!), or it can mean doing something to address a source of that anxiety. For those of us who are not research epidemiologists, there is not too much action we can take to address the source of our anxiety about COVID 19. However, there are those ‘un-done’ things floating around in our brains that create a level of stress and anxiety that we can take action about. Things like repairing that broken step on the deck, digitizing 20 years’ worth of photographs, or finishing up the income taxes. These circle around quietly in our heads until something happens that brings them to the front of the ‘must-do’ list, such as someone is injured on the step or the deadline for filing the taxes is critically close (hello July 15th).

Estate planning is often one of those ‘un-done’ matters floating around in our brains. Everyone knows they should create a Will and other documents that will make it easier for their families to carry on if they become incapacitated or when they pass away, but that type of estate planning is often put on the back burner where it simmers quietly until it erupts into a full boil because of some triggering event. This event might be the birth of a child, a change in marital status, retirement, diagnosis of an illness, or a global pandemic.

Not having an up-to-date, comprehensive estate plan creates anxiety because we know that this omission puts us at risk and our families at risk. The good news is that like digitizing your photos, or finishing up your taxes, you can create an estate plan that will minimize or eliminate these risks. Move your estate planning and legacy planning from the ‘un-done’ list to the ‘accomplished’ list and find some of that peace of mind that is so elusive these days.

Attorney Suzanne R. Sayward is a partner 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 certified as an Elder Law Attorney by the National Elder Law Foundation, a private organization whose standards for certification are not regulated by the Commonwealth of Massachusetts. 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 http://ssbllc.com or call 781/461-1020.

June 2020

Five Requirements of a Valid Will

June 1, 2020 by SSB

On June 8, 1948, a Canadian farmer was pinned beneath his tractor. He was discovered 9 hours after the accident and rushed to the hospital, where he later died.

A few days later, it was discovered that the farmer had scratched his Will into the fender of the tractor using his pocket knife. He had written, “In case I die in this mess, I leave all to the wife.” The fender was later removed and submitted to the Canadian court as a valid holographic Last Will and Testament.

What is a holographic will? The definition of a holographic Will, is a will and testament which has been entirely handwritten and signed by the testator. In the document, the testator (the author of the Will) must be expressing a wish to direct the distribution of his or her estate to beneficiaries.

Although the law in Massachusetts does allow handwritten wills, the Will etched by the farmer onto his tractor fender would not have been valid in Massachusetts as it was not executed with the legal formalities required by Massachusetts statutes.

Normally the task of drafting a will is best accomplished by a lawyer for wills and trusts, but when it is not, certain requirements must be met for a will to be legal in Massachusetts. A Last Will and Testament is a document that allows you to determine who will manage your estate at your death, who will inherit your assets, how and when your assets will be distributed, whether assets will be placed in trust, and who will care for your minor children. It is important to draft a will to ensure that your wishes are known and legally acknowledged. Without a Will, the laws of your state will decide who may manage your estate, who will inherit your assets, and how and when your assets will be distributed. This may not align with your intentions so we do not recommend relying on what is called the “Intestacy Statute” of your state.

In Massachusetts, there are several requirements for a Will to be valid:

1. The will must be in writing. This could include handwriting, but generally they are typed. Massachusetts does recognize nuncupative (oral) wills but only if made by a person who is in active military service or a mariner at sea. The oral Will may only be created in order to dispose of personal property. Real property cannot be transferred through a nuncupative will.

2. The will must be signed and dated by the Testator (the person making the will). If the Testator is not able to sign, someone else can sign on the testator’s behalf at the direction of the Testator and in his presence. This person cannot be one of the witnesses.

3. The will must be signed by two disinterested witnesses. Disinterested means they are not beneficiaries or potential beneficiaries of the will. In Massachusetts, a person of “sufficient understanding” shall be deemed competent to be a witness to a Will. If a witness to a will is competent at the time of his attestation, his subsequent incompetency shall not prevent the probate and allowance of such will.

If a Will is witnessed by an “interested person” the Will itself is not deemed to be invalid but the gift/bequest to the interested party and/or his or her spouse is deemed to be void.

4. The person making the will must have the mental capacity to do so. This is often called “testamentary capacity.” More specifically, the following must be true:

- The testator must be at least 18 years old;
- The testator must be free of undue influence or duress;
- The testator must know he is signing his will and intends to do so;
- The testator must have read, or have an understanding of the provisions of the will; and,
- The testator must be of “sound mind” which generally means he knows ‘the natural objects of his bounty’ (i.e. who his family is) and has a general understanding of the nature of his assets.

5. A handwritten will signed by the testator that meets all of the above requirements can be valid under Massachusetts law. So, in a sense, one might say that Massachusetts does permit handwritten wills or holographic wills but only if the Will was executed with the formalities outlined above.

Although a fender of a tractor might be a unique place to inscribe your final wishes, we would prefer that you work with your estate planning attorney to draft your will and reduce your wishes to plain old paper, and to ensure that the writing of your will is executed properly and in accordance with the legal formalities of the Massachusetts statutes.

This article is from the estate planning and elder law firm of Samuel, Sayward & Baler LLC, based in Dedham. 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.

June 2020

What Are Five Things You Wish You Had Done Before The Pandemic?

May 1, 2020 by Attorney Abigail V. Poole

Like so many of you, I am connecting with friends and family by telephone and videoconference to maintain my sanity and do my best to stay at home for the safety of our vulnerable community members and frontline workers during the COVID-19 pandemic. During a few of my calls, I have noticed that some of my friends and family are now thinking about creating a legacy plan or updating their estate plan along with other things they wish they had done before the pandemic. Luckily, it is not too late to accomplish many of those things, and hopefully it is simply a matter of time and patience before they can do the others. Here are a few of the (somewhat tongue-in-cheek) things my friends and family have mentioned they wish to have done before the pandemic:

1. Prepare Estate Planning Documents

Several family members and friends are using the pandemic as the impetus to take their estate plan out, brush off the dust, and review it to confirm it reflects their current family circumstances and wishes for their legacy. Others are creating an estate plan for the first time. Regardless of which situation applies to you, it is important that you have the basic “don’t leave home with them” documents in place. You should have a Power of Attorney that appoints a person to make financial decisions on your behalf if you are incapacitated. Likewise, a Health Care Proxy that names an individual to make health care decisions if you are unable to do so yourself is imperative. A HIPAA Authorization form, which allows the people you name on it to receive medical information about you is particularly relevant, too. Lastly, a Last Will and Testament that appoints a person to manage your assets and distribute them according to your wishes is a must have for most people, and remember -where there is a will, there is a way!

2. Discuss Wishes with Agents and Family Members

Let’s face it – thinking about your own demise can be saddening, depressing, scary and difficult. Talking about it can be even more so. However, the pandemic is causing many of my family members and friends to think seriously about their wishes in case they become ill and do not recover. They are having conversations with or providing written instructions to the individuals appointed in their estate planning documents (their agents) and family members about what they would want to happen in the event they become incapacitated or pass away. One way to ease into the conversation is to create a list of resources that you want your family to reach out to if you fall ill or pass away, such as care management agencies, attorneys, rehabilitation centers, or funeral homes you favor. Doing so may give you a sense of control during these uncertain times and the peace of mind that you, your family, and your estate will be taken care of the way you intend if something happens.

3. Be Prepared: Maintain a Well-Stocked Pantry (and Other Useful Non-perishables – Toilet Paper, Anyone?)

The pandemic has highlighted the importance of being prepared for the unexpected and emergencies. One way to be prepared is to maintain a supply of items you consider necessities as best you can. I have a much greater appreciation now for readily available toilet paper, hand soap, cleaning supplies, flour and yeast. Beyond pantry items and cleaning items, basic medical supplies such as gloves, masks, bandages, antibiotic ointment, medication, etc. are clearly helpful to have on hand. Of course, it is important to thoughtfully collect items – keep in mind to purchase only what you require as other people likely need them, too.

Consider what estate planning and legal documents should be accessible to family members, designate a location for the documents and share the location with your family members and/or friends. Perhaps keep electronic copies of your legal documents available on your cell phone or a USB drive. Remember to share a copy of your health care proxy (paper and/or electronic) with your named health care agent(s).

Another way to be prepared is to consider having a “go bag” with essentials you might need in case you have to leave your home suddenly, and/or a family member or friend needs to assist you at home because you are ill. For example, keep toiletries, clothing, copies of relevant legal documents, an extra cell phone charger, and entertainment materials in the go bag.

4. Embrace Social Events (and Family and Friends!) More Often

Continue to use this opportunity to spend time with family members and friends in innovative ways – virtual game nights, virtual family yoga sessions, or simply sharing your favorite books, movies or television shows with each other. Think about the activities you did in the past that you look forward to enjoying in the future. For example, some of my friends wish they had swum more often and plan to make time for swimming at their community pool once that is possible again. Other friends wish they had traveled and explored new places more, whether by visiting a festival in a nearby town, camping in another state, or hiking ancient ruins in a country halfway across the world.

Once the pandemic is over, say yes to invitations and events, no matter how big or small. And give and get hugs! In short, engage and embrace your loved ones and living life fully again.

5. Remember That You Are A Member of A Community

One of my friends remarked that she wishes she had paid more attention to the news. Her insightful comment illuminates the larger message that is currently being heard far and wide: we are all connected and in this together. Invest some time in being an observant, active and considerate participant in your town, state, country and the world, and leave a legacy of kindness. Listen or watch local and international news and contribute when and where you are able. There are countless examples of people helping others by delivering groceries to elderly neighbors to musicians sharing hopeful songs on social media. How can you safely help others?

I hope you are finding productive and helpful (and enjoyable) ways to manage the “new normal” caused by the pandemic. Whether you are taking this time to focus on your estate plan and preparedness, or discussing the serious and silly stuff with family and friends, or helping others, please be safe and well.

May, 2020

Remote Notarization Is Here!

April 29, 2020 by Attorney Maria Baler

For those of you hoping to sign your estate plan documents from the comfort of your home, we have some good news to report. After weeks of hard work by a number of Massachusetts attorneys including our own Abigail Poole, we finally have a law that will allow notaries to acknowledge signatures via video conference. On Monday, Governor Baker signed the Virtual Notarization Act into law, a temporary measure effective only during and for three days after the current COVID-19 state of emergency. This law permits attorneys (or paralegals under the supervision of attorneys) to notarize estate planning and real estate documents remotely using video conferencing, without being in the physical presence of those signing the document.

There are many technical requirements that must be followed in order for the document to be validly notarized, including:

the signers must state on the video that they consent to the session being recorded
the notary and all witnesses must observe the signing via video conference
all parties be physically located in Massachusetts at the time of the signing
the signers must disclose who is in the room with them and provide visual evidence on the video of everyone who is physically present in the room with the signers
the signers must present their identification to the Notary during the video session and must send a copy of that identification to the Notary
the video conference must be recorded and retained for 10 years
the documents being notarized must contain special language stating that they were notarized in this manner
a separate affidavit be completed and signed by the Notary regarding the session
the documents must be returned to the Notary for notarization before they are complete and effective
real estate documents signed in this manner require a second video conference between the Notary and the signer after the documents are received by the Notary before they can be validly notarized.

Although we are happy to have this option for clients who are unable to leave their homes or do not wish to do so, our curbside signings – variously referred to as “Car Hop” signings or “Wills on Wheels” – are also a popular and efficient way to sign documents in this time of physical distancing.

Maria Baler, Esq. is an estate planning lawyer 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, please 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.

April 2020

Silver Linings! A Chance To Pause, Plan, And Act To Save Money On Long Term Care!

April 17, 2020 by SSB

Despite the uncertainty, pain and loss associated with COVID-19 there are some opportunities that have emerged in the long-term care space as well. This ordeal is affecting us all – requiring that we slow down, re-evaluate our priorities, take care of ourselves, our families and friends, and importantly attack that closet that’s been exploding with junk! This is also a great time to re-evaluate financial and estate plans with respect to long-term care. If I or my loved one needs nursing home care or long-term care, assets will be consumed in no time. Can we do anything to prevent that?

The answer is yes, and this is the time to do it! Right in the middle of COVID-19, believe it or not, when the market is depressed.

Although it may not feel good now, we can actually take advantage of this decrease in the market by protecting assets from the cost of long-term care. How can we do this? By creating and funding an irrevocable trust now with “depressed assets” which are likely to increase in value when the market rebounds.

Let’s look at the numbers around long-term care in Massachusetts.

Nursing homes are expensive!

* According to a study conducted by Genworth in 2019, the monthly median cost of a semi-private room in Massachusetts was $12,473 and a private room was $13,212. So, roughly $150,000 per year on the low end!

* 52% of people over age 65 will require long term care/nursing home care

* 62% of all nursing home beds are paid for by Medicaid

What is the difference between Medicare and Medicaid?

In short, Medicare is the federal health insurance program designed principally for Americans age 65 years of age or older. Medicare Part A is hospital insurance that covers part of the cost of inpatient hospital care, hospice care and limited time in a skilled nursing home facility.

If you ask a Medicare attorney, What nursing home costs will Medicare cover? The short answer? Not a lot.

Medicare will cover 100% of the cost for the first 20 days you are in a nursing home IF, AND ONLY IF:

You had a recent inpatient hospital stay of at least 3 days;
You are admitted to a Medicare-certified nursing facility within 30 days of your hospital stay; and
You need skilled care such as physical therapy or skilled nursing services.

If all three criteria are met, Medicare will pay 100% of the costs for the first 20 days of your stay in the nursing home. For days 21-100, you pay up to $170.50 per day and Medicare pays at least a portion of the balance. There are criteria that must be met and Medicare can end sooner than 100 days. After 100 days, you are fully responsible for the entire cost for each day that you remain in the facility.

Let’s talk about Medicaid now.

Medicaid is a federal public assistance program (MassHealth is the state program) for low income people. Medicaid/MassHealth pays for health care services for people with very low income or high medical bills relative to income and assets. Eligibility is based on income and assets.

In order to qualify for Medicaid/MassHealth as a single person, a single applicant can have no more than $2,000 in resources (this includes retirement accounts, stocks, bonds, CDs, life insurance policies with a cash value and bank accounts). Real estate that is your primary residence is exempt up to an equity value of $893,000 in 2020. Married couples can retain an additional $128,640 in assets (unless both spouses are in the nursing home).

So now what? What can we do? What’s the strategy?

Although it is not the right planning strategy for everyone, a long-term care planning strategy that is appropriate for some people to protect assets from having to be spent on long-term care costs is to create and fund an irrevocable trust. You and your long-term care attorney (and perhaps your financial advisor) will decide what assets and how much of those assets to transfer into this irrevocable trust, keeping in mind that once assets are transferred to an irrevocable trust, you cannot take them back or use those assets in any way that benefits you.

If you don’t apply for Medicaid/MassHealth for at least five (5) years after the date you transferred assets to the Trust, the entire value of the trust assets will not be included when MassHealth determines your financial eligibility (remember $2,000 for a single person and an additional $128,640 for a married couple), and will be protected for distribution to your family or intended beneficiaries following your death.

The silver lining in all of this Medicaid estate planning (and what makes this is a perfect time to implement some proactive planning) is that when the market rebounds, that gain or increase in value in your assets titled in your irrevocable trust is also protected from the cost of long term care if you apply for Medicaid/MassHealth.

So, while the stress of COVID-19 is difficult, it is also presenting a unique opportunity to capture some upside for your long-term care planning from this downturn in the market. Take advantage of this opportunity to protect your assets (or those of your loved ones), and proactively plan for the future. This will yield yet another silver living during this ongoing crisis – peace of mind and the knowledge that you will have taken a big step in protecting assets for your children, your spouse or other beneficiaries.

The Dedham firm of Samuel, Sayward & Baler LLC focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters. 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.

April, 2020