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MassHealth Update

February 27, 2017 by Attorney Pamela Greenfield

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

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

February 2017

Employer Sponsored Retirement Plans: What You Need to Know

February 27, 2017 by Attorney Steven Samuel

While many employers offer retirement accounts as an employee benefit — even those that offer generous matching contributions — many do not offer adequate education on how to choose among the investments offered in the retirement plan. If you have engaged a financial professional to advise you, make sure that their advice about your overall investment strategy incorporates the money in your (and your spouse’s) retirement accounts. If you don’t have a financial advisor and don’t have the time to educate yourself about investments, Target Date Funds (TDFs) may be a reasonable alternative if you do a bit of research yourself. Here are the basics of what you need to know:

Employer Sponsored Retirement Account Basics

If you are employed and eligible to contribute to your employer sponsored retirement plan, congratulations! Your employer is giving you the opportunity to contribute much more than the IRS maximum allowable contribution amount for Individual Retirement Accounts (IRA). Maximum contribution to a company retirement account in 2017 is $18,000 ($6,000 more if you are over 50 years old) compared with $6,500 to an IRA. And, your employer may match some of your contribution. That’s free money and worth a conversation with your employer to find out if you are eligible to contribute, as well as determine if you are taking full advantage of this opportunity.

Contributing to an employer sponsored retirement plan also requires choosing among the several investments offered by most plans. Investment choices are typically mutual funds and there may be many dozens from which to choose. Unless you are an experienced investor or have help from someone who is, deciding what funds to invest in and when to make changes bewilders most employees. If your employer offers employee education, it will be time well spent; and, if you are an employee who has a financial advisor, make sure to ask for help with retirement plan investments — something many advisors overlook. If none of these options apply to you, consider TDFs.

Target Date Funds

TDFs automatically spread an employee’s contribution among a mix of mutual funds that hold stocks, bonds and cash in proportions targeting a specific year of retirement. About ten years ago, the U.S. Department of Labor began allowing the use of TDFs in retirement accounts. TDFs alter the mix of stocks, bonds and cash, by reducing the percentage held in stocks and shifting the allocation toward more conservative investments the closer you are to retirement.

TDFs aren’t managed by the investor, who may make panicked decisions during turbulent markets that they may later regret. But, not all TDFs are alike. Before investing in a TDF, it is important to understand how it invests and adjusts its mix of stock, bonds and cash over time as well as what the TDF costs.

TDF Glide Path, Costs and Other Investments

Glide path is the name TDFs give to the timing of changes in the mix of investments as the years pass toward the targeted retirement, analogous to an airplane moving through take off and voyage to landing. Some TDFs have a glide path that move entirely to cash at the target date, others continue to hold a significant amount of stock through the early retirement years or even through the entire retirement. Because the percentage of stock in an account is a major factor in how an account will perform during market up and down times, it is important to know and be comfortable with a TDF glide path before investing in it.

Some employees have not only an employer sponsored retirement account, but also a spouse’s employer retirement account and perhaps other investment accounts. If you choose a TDF, check whether its mix of stocks, bonds and cash is consistent with the investment strategy in your other accounts.

Investing in a TDF costs more than putting money in individual mutual fund choices offered through an employer sponsored retirement plan. TDFs offer the additional service of choosing the funds and adjusting the stocks, bonds and cash mix, so some additional charge is justifiable. However, some TDFs add more than 1 percent per year to the other costs of the retirement plan and can be a major drag on performance.

As always, when you have questions about important financial matters, consult your trusted financial advisor.

Investments in target date funds are subject to the risks of their underlying holdings. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative investments based on its respective target date. The performance of an investment in a target date fund is not guaranteed at any time, including on or after the target date, and investors may incur a loss. Target date and target retirement funds are based on an estimated retirement age of approximately 65. Investors who choose to retire earlier or later than the target date may wish to consider a fund with an asset allocation more appropriate to their time horizon and risk tolerance.

Samuel Financial LLC is located at 858 Washington Street, Dedham, MA 02026 and can be reached at 781.461.6886. Securities and advisory services offered through Commonwealth Financial Network, member FINRA/SIPC, a registered investment adviser.

Did You Know?

September 8, 2016 by Attorney Pamela Greenfield

Pam_144px In addition to estate planning, a large part of our practice includes long-term care planning for seniors and their families. In fact, all of the attorneys at Samuel, Sayward & Baler LLC are members of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (MassNAELA), which is the largest and oldest elder law bar in the country.

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

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

Massachusetts’ Highest Court Overturns Case Which Eroded Asset Protection Aspect of Trusts

September 8, 2016 by Attorney Suzanne Sayward

Sue_144px In our October, 2015 newsletter Attorney Baler reported on a Massachusetts Appeals Court case that held that a husband’s interest in a trust created by his father was a marital asset subject to division in his divorce (Pfannenstiehl v. Pfannenstiehl).

That Appeals Court decision was very disturbing to estate planning attorneys because prior to that holding, we could rely on hundreds of years of law holding that assets in a so-called spendthrift trust created by someone other than the beneficiary and managed by an independent trustee were protected from a beneficiary’s creditors.

The lower court’s decision was appealed and on August 4, 2016, the Supreme Judicial Court issued its unanimous decision reversing the Appeals Court holding. This is very good news for parents who have created trusts as part of their estate plan for the purpose of protecting their child’s inheritance from creditors including a divorcing spouse. If you are concerned about protecting your child’s inheritance, call Samuel, Sayward & Baler LLC or another experienced estate planning firm and schedule an appointment to meet learn how you can best protect your hard-earned assets from your children’s creditors.

Financial Industry Trends and Updates

September 8, 2016 by Attorney Steven Samuel

With half of 2016 behind us, we can see a number of developments in the financial industry that will likely have an impact on investors for the rest of the year and beyond. Here are updates in two important areas: Socially Responsible Investing and the Fiduciary Standard for Investment Advisors.

Socially Responsible Investing

Socially responsible investing (SRI), is investing that attempts to evaluate an investment’s social, environmental, and governance policies in addition to its potential to provide returns. Investment dollars placed in SRI or similar strategies have grown 13.1 percent per year between 1995 and 2014 (http://www.cnbc.com/2015/09/24/doing-well-while-doing-good-socially-responsible-investing.html ). Although interest in SRI is widespread, it is most often mentioned by millennials (people born between the early 1980s and early 2000s) and women. (http://www.cnbc.com/2015/09/24/doing-well-while-doing-good-socially-responsible-investing.html). Four developments are making SRI more attractive to millennials, women, and all investors interested in SRI.

One of the primary developments contributing to the increase in socially responsible investing is the growing realization that including SRI factors in investment criteria does not always mean sacrificing returns, as it did in the past. A 2015 Duetsche Bank analysis of a large number of studies of investment strategies found that a large majority of studies indicated a positive return when SRI investments were added, and roughly 90 percent of studies showed at least a neutral relationship between adding SRI investments and returns. (http://www.tandfonline.com/doi/pdf/10.1080/20430795.2015.1118917).

A second development accounting for growing investment in SRI is that SRI index funds have become more broadly available. For many investors already interested in the low cost, passive strategy of index funds, the availability of low cost index SRI funds is very attractive. Third, companies are becoming more interested in making business and financial decisions based on the impact they will have on the environment and social outcomes, as companies with strong sustainability scores have been found to show better operational performance with lower risk (http://www.arabesque.com/index.php?tt_down=51e2de00a30f88872897824d3e211b11).

Absence of tools to evaluate and monitor SRI investments has hampered SRI investing in the past. Recently, Morningstar, one of the most popular resources for evaluating mutual funds and exchange traded funds, started evaluating all funds on their SRI impacts by assigning a “sustainability rating” to each investment. This allows fund investors to evaluate their investments not only on the basis of return and mathematical measures of risk, but also on the environmental, social, and corporate governance.

Fiduciary Standard for Investment Advisors

Many people assume that all financial advisors are required to act in their client’s best interest, known as the fiduciary standard. Unfortunately, the current law permits financial advisors to choose a lower standard: “suitability.” About two thirds of financial professionals choose this lower standard.

Imagine a waiter promoting a high priced but mediocre steak dinner and receiving a bonus or commission when you buy it – it may be suitable for your dinner, but it would be in your best interest to be informed about prime steak, fresh fish, vegetables and the price and commission, too. Under the current rule, the mediocre steak would be an approved suitable transaction even if the price had not been properly disclosed or compared with better and still affordable alternatives. Under the best interests or fiduciary rule, the waiter would have a responsibility to tell the whole truth about the quality of the meal and the price, as well as the alternative prime steak and fish and vegetables.

The Department of Labor (DOL) is responsible for regulating company retirement plans as well as all types of Individual Retirement Accounts ( IRA, Roth IRA, SEP IRA). Recently, the DOL changed its rules, requiring that all financial professionals act with the account owner’s best interest in mind. For the most part, it requires compensation by fee rather than by commissions that might motivate the financial professional to make recommendations based on the commission rather than on what is best for the public. The change to the fiduciary standard goes into effect April 10, 2017 and applies only to retirement accounts.

Although the DOL’s rule is an important improvement for consumers, it isn’t perfect. First, there is an important exception to the rule, known as the “Best Interests Contract.” This exception allows financial professionals to be paid on commission if they provide a written statement to the consumer confirming that what is being recommended is in their best interest. Second, the new rule applies only to retirement accounts. Government agencies that regulate the investment accounts that are not retirement accounts have announced that they are considering eliminating the lower suitability standard, but they have not done so yet. Third, the new law is not in effect until April 10, 2017.

How might you find out if your current financial advisor is a fiduciary? The first way, of course, is to ask whether s/he is a fiduciary and whether that applies to your retirement and non-retirement accounts as well. As always, review these and other important financial issues with your trusted advisors.

Securities and Advisory Services offered through Commonwealth Financial Network®,

Member FINRA/SIPC, a Registered Investment Advisor.

Samuel Financial LLC 858 Washington Street Suite 202 Dedham, MA 02026 781-461-6886

Five Times to Review and Update Your Estate Plan

September 8, 2016 by Attorney Maria Baler

Maria_144px Although many people would prefer to sign their estate plan documents, file them away and never look at them again, the reality is that your estate plan is always a work in process. Family situations change, financial situations changes and laws change. In order for your estate plan to effectively achieve your goals, your plan needs to change periodically to address your current priorities. The estate plan you created when you were 30 years old is no longer appropriate at age 50.

How do you know when it’s time to create an estate plan or update your existing plan? Here are five stages of your life when reviewing and updating your plan is important:

Stage One – Engaged and Newly Married Couples. If you are planning to marry, meet with an estate planning attorney to get advice about whether or not a prenuptial agreement is appropriate for your situation. These agreements can ensure that assets owned by you prior to marriage, or inherited during the marriage, will not be part of the assets that are subject to division by the Court in the event of divorce. If you are newly married, remember that if you do not create a Will that contains your instructions about what happens to your assets at death, the laws of the Commonwealth provide one for you. If you die when you are married but have no children, your assets may be divided between your surviving spouse and your parents. Creating a Will is the only way to ensure your assets pass exactly as you intend. You may also wish to create or update your Power of Attorney and Health Care Proxy so that your new spouse has the authority to make decisions for you if you become incapacitated. Finally, it is important to review and update beneficiary designations on life insurance and retirement plans to ensure those assets pass as you wish in the event of your death.

Stage Two –Married Couples with Young Children. If you have young children, your estate plan needs to do two important things: address the care and custody of your children and address the management and distribution of the assets you will leave for your children. Your Will is the document in which you will name a guardian for your minor children. The guardian is the person who will care for your children in the event of your death. The guardian will decide where your children will live and attend school, what type of health care your children will 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 them as your children’s guardian, and the Court will have the difficult job of choosing among those who ask to be appointed without the benefit of your input. There’s a good chance someone you would not choose may be appointed. Don’t lose the opportunity to put your children in the right hands. After you have made sure that the right people will be raising your children in the event of your death, you need to make sure that the inheritance you leave them is preserved and protected for them. Creating a trust that sets the “rules” for managing assets for your children and names a trusted person to oversee the funds for them is the best way to do this. 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. A Trust allows you, rather than the state, to specify at what age or ages your children will be entitled to receive those assets. While funds are held in trust for your children’s benefit, the Trustee can use them for a child’s education, living expenses, health care expenses, or for other purposes you specify.

Stage Three –Married Couples with Teens and 20-somethings. Trust planning is a crucial component of a good estate plan when you have teenagers or young adults as well. No matter how mature your 20-somethings may be, they may still fall victim to the bad judgment or hair-brain schemes of others. Trusts can very effectively protect inherited assets from so-called “creditors” and “predators.” Young adults may spend money irresponsibly or make loans to ‘friends’ that are never repaid. Young adults are more likely to have car accidents or get into other types of trouble that create liability. They may marry young and have their marriage end in divorce. All of these potential issues put inherited assets at risk, and are all possibilities that a good estate plan can address if your plan is updated as your children age. Finally, this is a good stage to introduce the concept of estate planning to your child who, at age 18, is considered an adult in Massachusetts. Have your adult child sign a Health Care Proxy and Power of Attorney so you can assist them with decision-making if your child has a serious illness or disability.

Stage Four –Married Couples Approaching Retirement Age. Just because your children are out of the house and perhaps married with children of their own does not mean you should not keep your estate plan updated. If you have a child with a disability or other issues (such as substance abuse), your estate plan should address lifelong planning for that child. At this stage in your life, the value of your estate (home, bank accounts, investments, retirement accounts and life insurance) is likely as large as it will ever be. Review the value of your estate with your estate planning attorney and discuss whether estate tax planning is advisable. This planning will reduce the amount of estate taxes your children will pay following your death. If you have grandchildren, consider planning that leaves some assets directly to your grandchildren or in trust for them, both to leave a legacy to the younger generation and also to save estate taxes in your children’s estates. Finally, have a conversation with your estate planning attorney about long-term care planning and discuss the advisability of purchasing long-term care insurance. Make sure your health care documents and powers of attorney are up-to-date so that if an unexpected illness occurs, people you trust can act for you, last-minute planning can be done, and the expense of Court involvement can be avoided.

Stage Five –Enjoying Your Golden Years. You made it! But no rest for the weary when it comes to estate planning. This can be the stage of your life when your estate plan does the heavy lifting, and it’s more crucial than ever to make sure that your plan is appropriate to your current situation. Review your powers of attorney and health care documents (again) with your attorney and make sure they are up to date and the people you have named to make decisions for you are still appropriate. Review long-term care options and planning issues. How is your health? Do you intend to stay in your home for the long term? What are your options for housing and care if you are not able to remain at home? What do they cost? How would you pay for them if needed? Will it be possible or necessary for you to qualify for public benefits, and if so are there steps you should take to make that easier if and when necessary? If you or your spouse is diagnosed with a chronic illness or condition (i.e. Parkinson’s disease, Alzheimer’s disease, dementia), see your estate planning attorney immediately and make the necessary changes to your plan before the ill spouse is no longer competent to participate in planning. A different type of planning may be appropriate to ensure that if the spouse who is not ill predeceases the ill spouse, assets will be available to care for the ill spouse. If protecting assets for children against liability for long-term care is one of your planning goals, it is important to discuss this early on, before any care is needed, and decide if protecting assets is appropriate and possible given your particular situation.

Recently, I received a call from a child of clients for whom I had done estate planning when my clients were in their 40’s and their children were young. Now, one of my clients was in a nursing home and the other had recently died. Although we had sent these clients reminders every year to review and update their plan, they had not done so. Unfortunately, an updated plan could have left their children and my surviving client in a better position than they now find themselves.

Good estate planning attorneys maintain relationships with their clients throughout their lives and encourage their clients to review and update their plans periodically. Next time your estate planning attorney reminds you to review your plan, listen to her and set up an appointment if it’s been awhile since you’ve reviewed your plan. You, and your family, will be glad you did.

Estimating and Planning for Health Care Expenses During Retirement

May 6, 2016 by Attorney Steven Samuel

Steve_144px Health care expenses are among the largest and most difficult costs to estimate and control during retirement. Even those of us doing a good job saving, investing and estimating our retirement expenses may be underestimating the cost of our health care. In the years approaching retirement, it may seem that switching from a private health care plan to Medicare will result in big savings. However, HealthView Services’ 2015 Retirement Healthcare Data Report, drawing data from 50 million households, provides eye-popping projections of health care costs for people approaching or in retirement. The full report is available at www.hvsfinancial.com. Here are some key findings.

A healthy couple, both age 65, retiring this year and covered by Medicare Parts B (physician) , D (prescriptions) and a supplemental (Medigap) policy should expect an annual cost of about $7,000. This amount is expected to rise steadily — from $8,000 to $10,000 annually when the couple is in their 70s, and from $12,000 to $14,000 annually when the couple is in their 80s. The total cost from age 65 to 85 for this couple, is estimated to be about $267,000. Remember that Medicare, even with a supplemental Medigap insurance policy, does not cover all dental, vision, co-pays and other out-of-pocket costs. If these additional costs are included, the HealthView study estimates that a 65-year-old couple retiring in 2016 will have paid a total of nearly $400,000 for their healthcare by the time they reach age 85.

Some people assume that Social Security benefits will easily cover their Medicare costs with room to spare. This is unfortunately not the case. This year, the average Social Security benefit is about $1,341 per month, before deduction of the Medicare premiums. HealthView estimates that a 65-year-old couple retiring today will pay more than 40 percent of their Social Security benefits to cover Medicare when they reach their 70s and that will increase to more than 80 percent in their late 80s.

Even large expenses, like those estimated above, can be managed for individuals and couples who start planning before retirement and manage their expenses well over decades of retirement. A good goal for addressing these large expenses is trying to follow the financial services industry rule of thumb of saving 15 percent of income annually, including employer-matching contributions to company retirement plans. While a 15 percent savings rate is especially difficult for people in their 20s, 30s and 40s when there are many competing needs for housing, family and education goals, making some contributions in those years, even well short of 15 percent is important. The varying amounts saved each year can be enough if combined with 15 percent or more annual savings in a person’s peak earning years in their late 40s, 50s and 60s.

For people who haven’t saved enough for the lifestyle and spending levels they hoped for, finding the least painful ways to reduce spending will not be easy. They should make some lifestyle and/or financial planning changes as soon as they can. For help with understanding how these issues will impact your life and well- being, consult a trusted advisor.

Samuel Financial LLC is located at 858 Washington Street, Suite 202, Dedham, MA 02026 and can be reached at 781.461.6886. Securities and advisory services offered through Commonwealth Financial Network, member FINRA/SIPC, a registered investment advisor.

Five Examples of DIY Estate Planning Gone Bad

May 6, 2016 by Attorney Suzanne Sayward

Sue_144px Self-sufficiency and resourcefulness are admirable traits – knowing how to change a tire, wallpaper a bathroom, or use duct tape to fix any number of problems can save both time and money. However, not all tasks should be tackled at home – dental work, anything to do with electricity, and getting bats out of the attic are examples of tasks for which most people should hire a professional. With the proliferation of DIY (do-it-yourself) kits and forms available online these days, estate planning may seem like one of those items that could be handled at home and save a lot of money. Beware – the consequences of not getting it right can be worse than a do-it-yourself root canal! Here are five real examples of DIY estate planning gone bad.

DIY Power of Attorney resulted in the need for a court conservatorship. The children of an elderly woman who was in a nursing home contacted me to undertake planning to protect assets against complete spend down on long-term care costs. Because of this family’s situation, there was an opportunity to preserve the home by transferring it out of mom’s name even though she was already incapacitated and in a nursing home. Unfortunately, a few years earlier, the children had helped mom “save money” by having her sign a Power of Attorney form they found on the Internet. The Power of Attorney did not include the authority they needed to undertake the planning that would allow them to preserve mom’s $800,000 home against a lien for long-term care Medicaid benefits. Because mom no longer had the capacity to execute a new Power of Attorney, we had to file for a Conservatorship with the probate court. This took a long time, required a number of medical certificates from mom’s doctors, and was expensive. Further, the court appointed another attorney to represent mom’s interests, paid for by mom. All told, it cost more than $7,000 and took approximately eight months to accomplish what could have been done in less than a week for a fraction of the cost if there had been a comprehensively drafted Power of Attorney in place (which would have cost far less than $7,000).

DIY long-term care planning meant loss of home to Medicaid lien. I recently had a very sad situation where a family lost the home that had been in their family for more than 100 years because they did not seek the advice of an elder law attorney when the mother of my client went into a nursing many years ago. Although Medicaid imposes a period of ineligibility for long-term care nursing home benefits if assets are given away within five years prior to applying for benefits, there are exceptions to that rule. This family would have qualified for one of those exceptions and the home could have been transferred to my client without any penalty. Had that been done, the home would have belonged to my client free and clear of any claim by the state for the cost of the mother’s nursing home care. Unfortunately, I was not consulted until after the mother had passed away. At that point, the Commonwealth had a lien against the ancestral home for an amount that exceeded the value of the property. Once the mother passed away, the opportunity to transfer the home to the daughter under one of the exceptions to the transfer rules and free of the Medicaid lien was lost. The house was sold and the family received nothing – all of the proceeds went to the state.

DIY estate planning meant loss of benefits for beneficiary with disabilities. I had a client contact me to help her settle the estate of her brother who had passed away at the age of 45 having never married and leaving no children. The brother had prepared his own Will leaving his estate to his two siblings. While it was good that he had the foresight to create a Will, it was not so good that he did not consult with an estate planning attorney. It turned out that one of the siblings was receiving needs-based governmental benefits because of a disability. Unfortunately, this sibling’s entitlement to an inheritance caused him to lose those benefits. While we were eventually able to requalify him for those benefits, we needed to go to court to do so. Further, the solution to the situation most likely means that a large part of the inherited wealth will be taken by the state when the disabled brother dies. With planning, the deceased brother could have created a trust that would have provided for his disabled sibling and ensured that any amounts remaining at his sibling’s death were distributed to his sister and not to the state.

DIY Will Necessitated Court Permission to Sell Real Estate. I had a client who came to see me because he was named as the Personal Representative (Executor) of his aunt’s Will. The Will left everything to four nieces and nephews, including my client. It was a fairly simple estate – aunty had only her home and a bank account. However, the Will did not grant the Personal Representative the authority to sell real estate. That meant that in order to sell the house, we had to file a petition with the court seeking permission to sell the real estate. This delayed the process and cost the estate several thousand dollars more than it would have cost to have a proper Will prepared by a lawyer.

DIY Realty Trust created defect in title to property. In the course of updating an estate plan for an new client whose husband had passed away and who had done all of their legal documents for them (no, he was not a lawyer), it was discovered that he had created a defect in the title to their home as a result of a series of transactions conveying their real estate in and out of trust. We had to engage the services of a real estate attorney to clear the title and record a variety documents with the Registry of Deeds. The cost of this was about $4,000 – far more than it would have been to engage an attorney to do it correctly from the beginning.

The above are just five examples of what I see in my practice on a regular basis. While it’s great to save money, be careful about being “penny-wise and pound-foolish” – getting it right the first time will usually save a lot of time and money in the long run. And remember, getting it right the first time requires seeking the assistance of an experienced estate planning attorney. Next to DIY documents, documents created by attorneys who do not practice primarily in this area can also create more problems than they solve.

Attorney Suzanne R. Sayward 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. She is a partner with the Dedham firm of Samuel, Sayward & Baler LLC. 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.

Proposed Expansion of Medicaid Estate Recovery

April 12, 2016 by Attorney Maria Baler

Maria_144px Have you ever wondered how you would pay for long-term nursing home care (at a cost of $350 to $500 a day or more)? Medicaid, also known as MassHealth in Massachusetts, pays for nursing home care for those who do not have assets to pay for their care. An individual applicant can have no more than $2,000 of countable assets to qualify for Medicaid benefits. A married individual’s spouse who lives in the community may own up to approximately $120,000 of countable assets. The home of a Medicaid applicant is considered a non-countable asset, and may be owned by an individual, or a married couple, without impacting eligibility.

Under current law, if a Massachusetts resident over the age of 55 receives Medicaid benefits, whether for care in the community or to pay nursing home costs, the Commonwealth may recover those costs from the recipient’s probate estate at death. This is called “estate recovery.” Probate assets do not include assets that are owned jointly with another person, or are owned by a trust, or a home in which the Medicaid recipient may have a life estate interest.

Governor Baker’s Fiscal Year 2017 budget includes a proposal that would expand estate recovery to allow Medicaid claims to be made against any asset in which the deceased owned an interest at the time of death. This would include jointly held bank accounts, real estate owned jointly by the deceased and the surviving spouse, and real estate in which the deceased owned a life estate interest or which was held in an irrevocable trust. This proposal is a serious and significant departure from previously settled Medicaid law and will have wide-ranging impact on surviving spouses and families of Medicaid recipients. The proposed law would apply to any Medicaid recipient who becomes eligible for benefits after July 1, 2016, even if planning was done years ago.

Governor Romney made a similar proposal in 2003, which was enacted but repealed a year later after attempted implementation resulted in recognition that the law was seriously flawed and had significant unintended consequences. More recently, New York State had a similar experience. For more information about this proposal and how to reach out to your state legislators to register your objection, visit our Proposed Changes to MassHealth Estate Recovery Rules page.