elder law planning - Trust and Estate Planning Law Office

Should I Create a Life Estate or an Irrevocable Trust?

As you are getting older, Asset protection and Elder Law planning becomes relevant. As you are researching an optimal estate plan to preserve assets from nursing home bills, a life estate deed transfer may initially sound appealing. After all, a life estate deed is a legal means for transferring home ownership rights. However, there are downsides you must fully understand before making this commitment. Prior to making the decision of adopting a life estate, it is crucial to fully understand the risks.

Life estates are characterized by two or more people having ownership over a property for non-overlapping periods of time. These parties are the life tenant and the remainderman. The life tenant owns the life estate and has full control during their life. The remainderman has ownership interest upon the death of the life tenant.

In many circumstances, executing a life estate makes the most sense. It is useful for those looking to simplify estate planning and avoiding the probate process. The transfer of the property to the remainderman is automatic, providing convenience without the need for a will. For example, parents can easily pass homeownership to their children while possessing their property for their entire lives. This provides transparency to the beneficiaries and affirms the life tenant exactly what will happen to their property when they pass away.

Additionally, a life estate deed protects the property from a Medicaid lien and increases the tax basis. If eligible for Medicaid, the government may try to recover the costs of care from their estate once they pass away. A life estate protects the home from being included in the Medicaid recovery process.

Although a life estate may seem appealing, some caveats come with them. There are three main unfavorable aspects. If you consider these reasons as dealbreakers, a life estate will not work for your personal estate goals.

Real Estate Related Challenges

Upon establishing a life estate, obstacles will arise if you plan to sell or mortgage property. The remainderman must agree if you decide to borrow or sell against the property. Nevertheless, this can be solved with a Testamentary Power of Appointment in the Deed. This allows life tenants to change who receives their property by directing its disposition in their will. While it won’t sell the property, it gives the life tenant more leverage in negotiation over the remainderman. An alternative to this is the Nominee Realty Trust, where one or more children act as Trustees for all so that decisions must be followed on a majority vote.

Another obstacle is that if the property is sold, the remainderman is entitled to a portion of the profits equal to what their interest is determined to be at that time. It is also difficult to remove or change a name once it is on a real estate deed.

Legal Responsibility of Remainderman

The problems of the remainderman become your problem as well. If this individual is in any legal predicament, such as being sued, getting a divorce, owing taxes, or filing for bankruptcy, the interest in the home is not protected. However, while claims can be made against the property, nobody can kick you out for the duration of your lifespan.

Medicaid and State Assistance Disqualification

Giving away an interest in the property could result in disqualification from Medicaid assistance, should you need long-term care within five years of the transfer. To add on, that state could file a claim against the income portion of the payments it has made on your behalf. In this case, at least the portion of the proceeds allocated to your child would be protected.

Irrevocable Trust

Irrevocable trust is a much better alternative to protect your property from creditors including Medicaid liens and nursing home costs. For more information on irrevocable trust, please contact the Law Office of Inna Fershteyn at (718) 333-2395.

What Are Some Alternatives to Guardianship?

Guardianship is a court arrangement where a judge appoints someone to assist in managing an individual’s healthcare and financial affairs when the individual is no longer able to do so on their own. Guardianship is divided into two categories that deal with different aspects of the individual's needs. The first category allows the guardian to oversee the ward’s daily care, Guardianship of the Person. The second category grants the guardian power to oversee the ward’s personal and home property, Guardianship of the Property. Usually, people who require guardians are individuals who may have neglected to engage in advance estate and care planning.

The guardian could be a family member or the court could appoint an independent person. The court then supervises the guardian after they have been appointed. Guardianship appointments can be time-consuming and costly with prolonged legal fees. However, the good news is that guardianship is preventable. There are a few alternatives to guardianship that you can explore with early and proper planning. The following are potential alternatives to guardianship that should be widely considered.

Obtaining a Representative Payee as Alternative to Guardianship of the Property

If someone receives government benefits like Social Security, but they cannot manage the money on their own, the Social Security Administration can grant an individual to be appointed to receive the funds on behalf of the incapacitated individual. Social Security designates this person as a representative payee. The payee is required to use the funds to pay for the individual’s expenses and report the expenses to the agency. The payee must give an account to Social Security for how the money was spent. If you believe this is necessary for you and your family or loved one, you can do this by contacting Social Security and completing an interview. After completing the interview, you may be approved and be appointed a representative payee. Becoming a representative payee may avoid the need for a Guardian of the Property.

Obtaining Durable Powers of Attorney as An Alternative to Guardianship of the Property

A Power of Attorney (POA) is a legal document used to plan ahead of time. A POA allows one person (called the principal) to appoint one or more other people (called agents) the right to make health and/or financial decisions for them. Elders usually appoint an adult child as their agent as their mental and/or physical health deteriorates. In order to appoint an agent, the principal must have the capacity, at the time they choose who they want to act as their agent and when they sign the document. A POA is significantly less expensive and less time-consuming than a guardianship hearing. Having a Power of Attorney in place could prevent the need for a Guardian of the Property to be appointed.

Acquiring a Health Care Proxy as An Alternative to Guardianship of the Person

Similar to a Power of Attorney, a Health Care Proxy (HCP) is a document used to plan early. An HCP allows for an individual, with capacity, to appoint another person that they trust to make healthcare decisions for them. The principal will choose one person who can serve as their agent. An HCP, along with any other medical directives, will allow the principal to state their health care wishes early on. Although the HCP can be signed at any time, the HCP is only effective after two doctors decide that the principal is not able to make decisions on their own. Having a health care proxy in place could obviate the need for a Guardian of the Person.

Trusts And Estate Planning as An Alternative to Guardianship of the Property

A third alternative to guardianship is to execute a trust. A trust is a legal contract between three parties – the grantor, the trustee, and the beneficiary. A trust can serve as a means for property management. Having a trust can sometimes avoid having a Guardian of the Property because the trustee can effectively manage your property, instead of a guardian.

For disabled individuals or individuals planning for disability, you can create a First Party Supplemental Needs Trust or a Third Party Supplemental Needs Trust. These types of Trusts allow you to protect your assets while still being eligible for certain government benefits. Certain supplemental needs trust may need the court’s approval before being established. Each of these trusts has nuances that should be discussed with an estate planning or elder law attorney.

Joint Checking Accounts as An Alternative to Guardianship of the Property

A fourth alternative to guardianship and property management is by setting up and maintaining a joint account with another person. You can also add a person to the account for convenience sake only. By adding another person to the account, it will allow the other person to pay the bills and be an alternative to a guardian of the property.

Assistance with Care Management As Alternatives to Guardianship

If someone requires limited assistance, they may be able to use a case management tool instead of a guardian. They would create a plan that would allow others to assist and support the individual with the specific needs they may have while also allowing the individual to function independently in the areas they are able to. For instance, Adult Protective Services (APS) can provide case management without the need for a guardian. APS would appoint a case manager who can provide assistance with different needs like obtaining and recertifying for Medicaid, assuring proper living arrangements, monitoring safety, managing financials like social security benefits, and providing heavy-duty cleaning services.

How can an elder law or guardianship attorney help?

Guardianship is an expensive and, at times, cumbersome and complicated process. It is very possible to avoid guardianship by using any of the above ideas or resources. We can help you avoid guardianship. If unavoidable, we can also help you petition for guardianship. To learn more about the legal process of seeking guardianship it’s best to consult a lawyer.

For further elder care information, please contact the Law Office of Inna Fershteyn at (718) 333-2395 to receive the most highly qualified legal advice.

The Importance of Creating an Asset Protection Plan

Asset protection planning is important for everyone, from all walks of life. If you have any money, investments, or property that you want to protect, if you own a business or are starting one, you need to make sure you have a solid plan in place to protect your personal assets. There are many different risks to your financial security, and your plan for asset protection needs to focus on the things that are most likely to impact your savings.

Why is Asset Protection Planning Important?

Asset protection planning will benefit you by keeping your property and money protected during your lifetime. It can also ensure that you can leave a legacy for your loved ones. There are many specific reasons why asset protection planning is important including:

The risk of incapacity: If you become incapacitated (ex: diagnosed with Alzheimer’s) you won’t be able to take care of your assets or manage your finances. Substantial losses could accrue unless you assign someone trusted and reliable to manage your assets. You should plan ahead and assure that you have chosen the right person to manage your assets in case you’re ever incapacitated. Incapacitation can be gradual (ie. dementia) but it can also happen suddenly (ie. falling comatose). It’s better to plan ahead and early; better be safe than sorry. A living trust and/or a power of attorney are useful legal tools that could be used to protect your assets in case of incapacity.
The risk of business losses: If you run your own business, you could face the risk of personal loss if your business goes bankrupt or if you or your business is sued. You don’t want your own personal home or other property to be lost because of business problems so you should explore legal methods to ensure your own assets are kept safe. Incorporating or forming a Limited Liability Company (LLC) could be an appropriate solution because, as long as you follow corporate rules, you will limit the risk of losing money invested in your business and limit the risk of losing personal assets.
The risk of going into a nursing home: As everyone ages, nursing homes are a common long-term care plan. However, the cost of a nursing home can be extremely costly and nursing homes are not covered by most types of insurance, including Medicare. Many people are forced to spend all of their money and even sell their property to pay for a nursing home if they need care. Once the money is spent, then Medicaid begins to pay. However, if you create an asset protection plan, you can prevent your property from being included when determining if you’re eligible for Medicaid so you can get nursing home costs covered without giving away or spending your assets.
Losses due to estate tax: When you pass away and leave your assets to heirs, estate taxes could be imposed which could significantly reduce the value of an inheritance. This is mainly a problem for people with larger estates. As of 2021, estate taxes are assessed only if an estate exceeds $5.93 million. But, people with farms or business assets that count as part of their estate could quickly reach this amount and an inheritance could be at risk if there isn’t enough money to pay the taxes on potentially inherited farmland or business assets.
The risks presented by your heirs: You should protect your money and property even after you are gone. You can structure an inheritance so it will not be lost or spent recklessly if heirs get divorced or go bankrupt. You can also opt for creating trusts like special needs trusts or spendthrift trusts to meet the specific needs of beneficiaries who will inherit your assets.

You work hard to amass money and property, and you deserve to protect what you have built so you can enjoy financial security in your old age and so you can make a difference by giving to people or causes you believe in after your death.

What Are Some Ways to Protect Assets?

1.) Trusts- Irrevocable, Revocable, Medicaid asset protection

Trusts are legal documents that establish legal transfers of your assets. There are many different types of trusts, each serving its own purpose. Three common types of trusts used to protect assets are irrevocable trusts, revocable trust, and Medicaid asset protection trust.

Irrevocable trusts are trusts that cannot be amended once created. Once it has been made, it cannot be changed or terminated without the permission of the grantor’s beneficiary. You also relinquish control of the trust’s assets and control is transferred to the trustee, the person who is legally responsible for managing the trust, and all changes/distributions are left to their judgment. There are many types of irrevocable trusts like asset protection trust, special needs trust, charitable trust, and Medicaid trust. The most common is asset protection trust because, in the event that a creditor files a lawsuit against you, the assets you transferred to the trust will no longer be considered yours.

Revocable trusts (aka living wills) are the opposite of irrevocable trusts. It lets you freely make changes to it up until you die. It allows you to keep control of your assets while you are alive as opposed to giving up control in an irrevocable trust. You can also use it to determine who will inherit your assets after you die. A revocable living trust is preferable to a will since it does not require probate and can be revoked or amended at any moment while you are still alive. Revocable living trusts actually provide little asset protection but are a great way to ensure that your estate avoids the probate procedure after you die.
Medicaid Asset Protection Trust sometimes called Pooled Income Trust, is a tool to protect your assets and allow people to qualify for Medicaid long-term care. A Medicaid Asset Protection Trust is a type of irrevocable trust so the transfer of assets into this kind of trust is considered a “gift.” To protect your assets, the trust has to be created 2.5 years before home care Medicaid is needed or 5 years before nursing home care is needed. This is because Medicaid inputs a look-back period when someone applies for Medicaid.

2.) LLCs

A limited liability company (LLC) is a legal status given to businesses. This establishment means the business will be its own legal entity and the owner(s) can be relieved of personal responsibility for their company’s debts or liabilities. An LLC will protect a business owner’s assets like bank accounts, properties, and cars in the event of a bankruptcy or other legal disputes. The owner’s assets cannot be viewed as the company’s assets.

3.) Retirement accounts

If you have a 401(k), you might want to consider moving some cash into it. Individual retirement accounts (IRAs) enjoy protection under federal law as long as they are ERISA-qualified (such as a 401(k)). ERISA-qualified generally means the retirement account is employer-sponsored so pensions would count too. Your IRA might have even more protection depending on your state’s laws. Retirement accounts are also useful to avoid the probate process so some of your possessions can directly pass to your heirs without being dictated in the will

How can an Elder Law Attorney help?

Asset protection planning is not just for wealthy people, it’s important for everyone. If you have any money, property, or investments that you want to protect, you should create a plan. Planning is also important when you are young, because you can protect more of your assets if you take action early.

To learn more about asset protection planning and discover what plan works best for you, contact the Law Office of Inna Fershteyn at (718)-333-2395 for highly qualified advice.

Responsibilities of an Executor Or Administrator

Today we will discuss the basic duties and responsibilities of an executor or an administrator.

But first, what is an executor? An executor is someone who is legally responsible for sorting out the affairs of the deceased individual. The executor must carry out their duties diligently, impartially, and honestly. An executor who fails to do so may be held personally liable by a court of law. Each state has its own requirements as to who can serve as an executor or administrator but generally, the roles are very similar. The position of executor is a paid position and each state provides its own rules for executor compensation. However, because executors are usually close family members, many executors forgo their compensation.

And what is an administrator? An administrator is someone who is appointed by the Surrogate Court to be legally responsible for the decedent’s affairs. The difference between an estate executor and an estate administrator depends on if the deceased left a will, named an executor, or if the named executor declined the appointment. Therefore, if the decedent did not leave a will (dying intestate), does not name an executor in their Will, or a listed executor declines the appointment, the court will choose the administrator of the estate. The administrator must then make sure the estate is settled according to New York intestacy laws which is what an executor does anyways.

Both the Executor and the Administrator are responsible for making sure that debts and taxes are paid and that what remains in the estate is distributed properly to the heirs of the estate, according to the wishes of the decedent. Both executors and an administrator have the same responsibilities to the state and to the deceased’s beneficiaries.

The Executor’s or Administrator’s Responsibilities Include The Following:

Determine If Probate Is Necessary

Probate is the legal procedure an estate goes through after someone passes away. This procedure is how the surrogate court will start the process of distributing the estate to the proper heirs that the decedent designates. Many assets can be transferred to beneficiaries simply by law (and avoid the probate process) such as jointly held assets or assets that have beneficiary designations (ie. life insurance policies). If all of the decedent’s property falls into this category probate may not be necessary. Additionally, the decedent may have transferred all of their property to a revocable (living) trust which similarly does not need to go through probate. If, however, the decedent owned assets outright, meaning they’re simply stated in a will, those assets do not automatically transfer upon their death. Instead, probate will be required and the executor or administrator will need to file a petition with the court to be legally assigned as the executor. It is highly advisable to work with an attorney to probate the estate.

File the Original Will With the Local Surrogate Court

The executor is responsible for locating, reading, and understanding the will to determine who will inherit the decedent’s assets. Generally, only an original will can be submitted to the surrogate court to go through probate. An experienced estate planning attorney can assist with this duty.

Notify Financial Institutions & Government Agencies of the Decedent’s Death

The executor should notify the decedent’s banks, credit card companies, and government agencies like the Social Security Administration of the decedent’s death.

Set up a Bank Account for Incoming Funds and Pay Any Ongoing Bills

The executor has to set up an estate account with a bank so the decedent’s assets can be transferred to it. The account will be used for the ultimate distribution of the assets to any creditors and heirs. The executor should also use this account to pay the decedent’s mortgages, utilities, and other bills that still need to be paid throughout the probate process.

Maintain the Property Until It Can Be Distributed or Sold

The executor has to find, protect and preserve all of the decedent’s assets until they can be distributed. This includes any real property (houses, cars, boats, etc...) owned by the decedent until it is distributed to heirs or sold.

Pay the Estate’s Debts and Taxes

The executor is obligated to pay the decedent’s debts if there are sufficient assets in the estate to cover them. The executor must also file income tax returns starting from January 1st of the current year until the date of the decedent’s death. If the estate is large enough, a Federal estate tax return will need to be filed. Also, if the decedent’s estate exceeds the estate tax exemption in the year of the decedent’s death, state and federal estate taxes may have to be paid.

Distribute Assets

The most common responsibility of the executor or administrator is that they must distribute the decedent’s assets pursuant to the will’s directives. This is after a surrogate court judge has validated the will. If there is no will, state intestacy laws apply and the administrator will carry out almost all of the same responsibilities as an executor.

File an Inventory of the Estate’s Assets With the Court

Once the executor knows all the assets in the estate and distributes them pursuant to the will the executor must file an inventory of the assets with the Surrogate Court.

How can an estate lawyer help

Since each estate varies in size and complexity, an executor’s job may be fairly simple or very challenging to carry out. Responsibilities may very well go beyond the 10 common duties in this list. Consulting with an experienced and knowledgeable estate planning attorney is certainly recommended.

For further estate planning assistance, please contact the Law Office of Inna Fershteyn at (718) 333-2395 to receive the most highly qualified legal advice.

Can I Give My Assets Away To Qualify for Medicaid?

Many individuals are forced to consider applying for Medicaid for a host of reasons, all mainly to help alleviate the cost of medical care. Medicaid is a joint federal and state public health insurance program for people with low income. The program covers 1 in 5 Americans, many with intricate and expensive needs for medical care. Medicaid is the principal source of long-term care coverage for many Americans. The majority of Medicaid enrollees lack access to other affordable health insurance. Medicaid covers a broad array of health services and helps limit out-of-pocket costs.

There are many factors to consider when applying for Medicaid, and this is widely due to the eligibility requirements that Medicaid has. If an individual has too many assets, they won’t be able to qualify for Medicaid. However, there are many legal ways to move your assets, which can allow you or a loved one to be eligible for Medicaid.

1) What qualifications do you need to have to become eligible for Medicaid?

To be eligible for New York Medicaid, you have to be a resident of New York State, a U.S. national, citizen, permanent resident, or legal alien, in need of health care/insurance assistance, whose financial situation would be characterized as low income or very low income. You must also be one of the following:

Pregnant, or
Be responsible for a child 18 years of age or younger, or
Blind, or
Have a disability or a family member in your household with a disability, or
Be 65 years of age or older.

But the primary concern regarding Medicaid qualifications for many Americans is what is considered low income.

2) How does Medicaid know what assets you have?

When you are determining if you are eligible for Medicaid, the Department of Social Services (“DSS”) will evaluate the Medicaid applicant or recipient’s income and assets that actually or will potentially exist. However, only such income and/or assets that are actually found to be readily available to the applicant may be considered in determining eligibility for Medicaid. In 2021, an individual can have no more than $17,131 in income to be eligible for Medicaid.

Can I Give My Assets Away As A “Gift” To Qualify for Medicaid?

In general, while determining the Medicaid eligibility, any gifting of assets made by the applicant within the look-back period will render the person ineligible for Medicaid for a period of time. Currently, the look-back period is five (5) years prior to the date of application.

Everyday common gifts can be considered by this vague word, “gift.” For example, paying for your grandchildren’s college education or contributing to your local church can all be considered gifts for purposes of determining Medicaid. A common myth is that you are allowed to gift $17,131 each year without incurring a penalty for Medicaid eligibility purposes. But as the word myth suggests, this is incorrect. In 2021, the annual gift tax exclusion for federal gift tax purposes is $15,000. That means that you can open the phone book and give everyone in the phone book $15,000 this year without filing a gift tax return. However, federal tax law has nothing to do with Medicaid eligibility rules. If you are gifting $15,000 each year, those gifts will still be evaluated for Medicaid eligibility purposes.

When is a gift not a gift (or in Medicaid terms a “transfer”) for Medicaid eligibility purposes? New York State law states that a person will not be ineligible for Medicaid if they transferred assets unless it was transferred exclusively for a purpose other than Medicaid eligibility. Ok, that seems easy enough. For example, you obviously didn’t pay for your grandchildren’s college education because you were specifically trying to qualify for Medicaid. However, as a matter of policy, DSS has historically been reluctant to accept this argument from applicants who have made significant gifts of assets like paying thousands of dollars for college. The result is that many individuals are denied Medicaid eligibility despite making regular (and necessary) gifts during the look-back period. However, there have been instances where applicants successfully argued that gifts made during the lookback period were for purposes other than to qualify for Medicaid and therefore, eligible for Medicaid. While determining the applicant’s intention, the DSS will consider things such as the applicant’s physical and mental condition at the time of the gift, the applicant’s use of the gifted funds, and the applicant’s financial security. The DSS may also evaluate whether the applicant gifted their own funds or if they received the funds through inheritance or windfall. To add, the DSS may check to make sure how much time passed between the gifting and the applicant’s institutionalization and whether this applicant lived alone when they made the gifts. Finally, the DSS may review whether the applicant had considered institutionalized care when the gifts were made.

3) Do assets disqualify you from having Medicaid?

No, not necessarily. Having assets won’t automatically disqualify you from having Medicaid. For example, in New York, a single applicant who is blind, disabled, or 65 and older is allowed to retain $15,900 in liquid assets. And for married couples, asset limits vary by the state, the Medicaid program, and if one or both spouses are applying for Medicaid.

However, just because a senior’s assets exceed the general limits listed above it does not mean they are automatically ineligible for Medicaid. States implement different rules and resource limits, and an elder can create a personalized asset spend-down plan to meet their state’s eligibility criteria. States also have varying laws regarding trusts and how they are counted, or not counted, when determining Medicaid eligibility.

There are also many other guidelines for calculating income and figuring out one’s medical need for care and assistance. Also, different financial rules apply to married couples. It is recommended to familiarize yourself with these eligibility requirements early on in case you ever need to help an aging loved one apply for Medicaid (or file an application yourself).

4) How can an Elder Law Attorney help?

Given the economic environment, it is common for lawyers to encounter situations where applicants gift their children or grandchildren during the look-back period which makes the Medicaid application process more complicated. And in most cases, handling the application process without any professional assistance can result in a determination of ineligibility and even a costly Medicaid penalty period. The assistance of competent counsel practicing in the area of elder law is imperative. It is important to work with an experienced elder law attorney with Medicaid planning experience.

For further Medicaid planning, please contact the Law Office of Inna Fershteyn at (718) 333-2395 to receive the most highly qualified legal advice.

How Does A Medicaid Asset Protection Trust Work?

Today we are going to learn about what a Medicaid Asset Protection Trust is and how it works. We also going to discuss when it should be used, it’s benefits and how an elder law attorney can help you through the process.

What is a Medicaid Asset Protection Trust?

A Medicaid Asset Protection Trust, sometimes called Pooled Income Trust, is a tool to protect your assets and allow people to qualify for Medicaid long-term care.

When should a Medicaid Asset Protection Trust be used?

To protect your assets, the trust has to be created 2.5 years before home care Medicaid is needed or 5 years before nursing home care is needed. This is because Medicaid inputs a “look-back” period when someone applies for Medicaid. The reason a certain period of time has to pass before your assets are protected is that the transfer of assets into a Medicaid Asset Protection Trust is considered a “gift.” Medicaid also enforces strict income and asset guidelines. In order to qualify for Medicaid, you cannot have more than $2,000 of liquid assets. Liquid assets are assets that can be easily converted to cash in a short amount of time. Examples include cash, checking accounts, and saving accounts. Once you meet the guidelines, Medicaid looks into what happened to your assets which is why you need to prepare years beforehand. The applicant still has to report the existence of the Medicaid Asset Protection Trust – it is not hidden from the government in any way.

How Does a Medicaid Trust Work?

A Medicaid Asset Protection Trust is an irrevocable trust which means once it has been made, it cannot be changed or terminated without the permission of the grantor’s beneficiary. Assets placed in the trust are considered gifts to the beneficiaries, which protects the assets from Medicaid. In New York, an irrevocable trust can be revoked as long as the beneficiaries and the grantor consent to it. But, beware that once a Medicaid Asset Protection Trust is revoked, the assets are no longer protected by this trust.

The Grantor of a Medicaid Trust has to name someone other than themselves or their spouse as the Trustee. This means that the Grantor is giving up control. However, the Grantor still has the power to remove and change any trustee as well as the power to change the beneficiaries of the Trust. If the Grantor owns a home, they can maintain the right to live in that home rent-free for their entire life, and their spouse can do so too. This “life estate” lets the grantor continue to obtain any property tax exemptions.

The Grantor is not entitled to the principal of any assets placed in an Irrevocable Trust which means that they are not entitled to any of the property that can generate ordinary income.
However, they can receive all income (interest, dividends, rental income, etc.) that the Trust assets may generate. The Trustee’s role is to invest the assets held by the Trust. However, because the Grantor maintains some control over assets in the Medicaid Trust, it is considered a grantor trust, and they are still taxed on any income.

When an Irrevocable Trust is created, assets that the Grantor wants to protect will be retitled in the name of the Trust, which is known as “funding the trust.” Assets can include anything from a checking or brokerage account to property. However, Individual Retirement Accounts do not get retitled into the name of the Trust because they are already protected for Medicaid purposes by law – as long as the required minimum distribution is taken.

Usually, Grantors will place their home and some liquid assets in the trust and name a child as trustee then not think about it for years. Most trusts provide that after the death of one of the spouses, the income interest continues for the surviving spouse. Then, after the death of the remaining spouse, the assets are distributed to beneficiaries as they would be in a will.

What are the benefits?

The main benefit of a Medicaid Asset Protection Trust is the ability to receive Medicaid. In general, with trusts, you can protect your and your family’s assets and pass on any valuable assets, like property. Some other specific benefits have been mentioned above such as property tax exemptions, uninterrupted income, and the ability to still use the assets after the grantor’s death. Some other benefits include:
● Avoidance of probate court
● Maintenance of privacy
● Avoids the hassle of multi-state probate proceedings- in case trustees do not reside in the state that the grantor did
● Provides planning for mental disability- should the grantor ever not be sound of mind, they cannot amend the trust
● Keeps assets in the immediate family
● Keeps assets out of surviving children’s divorces
● Keeps money out of creditors’ reach

How can an elder law attorney help?

An elder law attorney can help you decide whether a Medicaid Asset Protection Trust is right for you. A host of factors goes into the decision, such as the client’s available funds, relationship with intended beneficiaries, and timing. It is important to meet with a knowledgeable and experienced elder law attorney to assess which plan best achieves your goals and relieves any of your concerns.

For further Medicaid planning, please contact the Law Office of Inna Fershteyn at (718) 333-2395 to receive the most highly qualified legal advice.

How To Get Guardianship of An Elderly Parent?

When an older adult is not able to think clearly, their capability to make informed and meaningful decisions will be affected. The onset of Alzheimer’s disease or other related dementias, stroke, brain injury, mental illness, or other serious issues can be the cause. If the person you are caring for is not able to make rational, sound-minded decisions about their health care, finances, or other aspects of life, seeking legal guardianship might be necessary for their safety and quality of life.

What Is Guardianship for Elderly Individuals?

Guardianship is a legal option in the event that an adult has not appointed a healthcare proxy or power of attorney (POA) and they are not capable of doing so anymore because of advancing age, illness, or disability. Even if they named a POA, guardianship might still be necessary especially if their POA is not durable, meaning it ends when they are incapacitated. The most common scenario is when family caregivers seek guardianship for adults with dementia and they have not made legal preparations for the future.

The definition for the term, guardianship, varies between states. In some states, guardianship gives the appointed person control over where the incapacitated individual lives, what health care they can receive, and how their daily needs are met. On the other hand, conservatorship allows the appointed person to handle the incapacitated individual’s financial decisions, such as paying bills, managing investments, and budgeting. These terms are often used interchangeably.

In order to act as someone’s legal guardian or conservator, the person petitioning for guardianship must go to court and have the incapacitated individual declared as incompetent based on an expert’s findings. If the incapacitated individual is legally ruled as incompetent and the petitioner is a fit candidate to serve as a guardian, then the court transfers the responsibility for managing finances, living arrangements, medical decisions, or any combination of these to the petitioner.

The entire process often takes a decent amount of time and money. Family members can disagree about if guardianship is necessary or who should be assigned as a guardian. It can be painful, prolonged, and costly.

What Is a Court-Appointed Guardian?

A court-appointed guardian (or conservator) has court-ordered authority to handle an incapacitated individual’s affairs. They have a fiduciary duty to act in the best interests of the individual they are appointed to serve. Unfortunately, it strips the incapacitated individual of many rights. However, it may be the only way to obtain the legal authority to make important decisions on their behalf.

Who Can Be a Legal Guardian?

The court will hold a hearing to decide if the person seeking guardianship is fit for the role. Their relationship, criminal background, credit history, and any potential conflicts of interest are factors that go into the court’s decision.

In the case where more than one person is petitioning for responsibility for the incapacitated individual’s needs, the court will determine who is best qualified. Sometimes one person is appointed to handle the medical decisions (aka guardianship of the person) while another is appointed to manage financial matters (aka guardianship of the property). The incapacitated individual’s preferences and previously prepared legal documents (ex: Non-durable POA, a will, or advance directive) are factors for this decision.

Most states can give preference to the incapacitated individual’s spouse, adult children, or other family members because they are most familiar with the individual’s unique needs and abilities. If a loved one is not willing or not qualified to serve as a guardian then a professional guardian or public guardian might be appointed.

When Is a Guardian Appointed?

A guardian or conservator can only be assigned if a court hears evidence that an incapacitated individual lacks mental capacity in some or all areas of their life. The court also determines that the individual can no longer make informed decisions for themselves. Allegedly incapacitated individuals (not deemed incapacitated) have the right to an attorney and the right to object to the appointment of their guardian or conservator.

In rare cases, if an elder’s health and/or finances are in jeopardy, emergency guardianship may be granted right away. Be warned, guardianship is a very serious intervention and should only be considered as a last resort.

A Guardian’s Role:

Whenever possible, the guardian or conservator must find the opinion of the incapacitated individual and can only act in areas authorized by the court. After a thorough investigation, the court can rule if guardians can be given limited or broad authority. Sometimes the court delegates responsibilities to several parties. In general, the court needs to see reports and financial accounting at regular intervals or whenever important decisions are made. For some large decisions, prior court approval can be required.

Do Guardians Receive Compensation?

All court-appointed guardians are entitled to reasonable compensation for their services. When a family guardian (a spouse, family member, or friend) is appointed, they usually do not charge the incapacitated individual for their services. If a private guardian is appointed, they are paid directly from the incapacitated individual’s estate if they can afford to. If compensation is provided, the compensation amount must be approved by the court, and the guardian must carefully account for all their services, the time their tasks require, and any associated out-of-pocket costs. Public guardians are appointed to incapacitated individuals who do not have family or friends to be their guardians or the resources to hire a professional guardian. They are funded by public money, like government funds and charitable contributions.

Hire an Elder Care Attorney.

To learn more about the legal process of seeking guardianship or conservatorship in your state, it’s best to consult a lawyer.

For further elder care information, please contact the Law Office of Inna Fershteyn at (718) 333-2395 to receive the most highly qualified legal advice.

10 Warning Signs of Alzheimer’s Disease and Dementia

As our loved ones age, how do you know if they are showing normal aging changes or if they are showing early signs of dementia or Alzheimer’s? The most common type of dementia is Alzheimer’s. In 2020, according to the Alzheimer’s Association, roughly 5.8 million people were living with Alzheimer’s disease. Warning signs for Dementia vary, but changes to behavior, increasing confusion, and loss of memory are common signs. Noticing these signs early may help you and your loved one prepare for the possibility of dementia.

Every dementia patient experiences different symptoms with various severities, but there are some early warning signs you can find. These are 10 signs to look out for in order to determine if a loved one should seek a comprehensive medical workup and cognitive testing for dementia.

10 Warning Signs and Symptoms of Dementia

1.) Forgetfulness and Short-Term Memory Loss

Memory loss is the most common symptom of most types of dementia. Alzheimer’s affects short-term memory first which means a person can forget information they recently learned. However, just because someone can’t remember where they put their keys or switch up names it does not mean they have Alzheimer’s. We all forget parts of a conversation from time to time, but an early symptom of dementia can result in someone forgetting entire conversations that just happened. Dementia patients may also forget important dates and events and frequently ask for the same information repeatedly. Caregivers may have to give reminders more frequently whether it's leaving notes or calling to remind them of daily tasks.

2.) Lack of Concentration and Increased Confusion

Another common symptom of dementia is getting confused about times and places and difficulty concentrating. Both can make daily activities take much longer than they used to. Dementia patients can forget where they are, how they got somewhere, and can easily get lost navigating familiar places. As dementia progresses, patients may have trouble differentiating between past, present, future events. They can lose track of seasons and general passage of time which causes them to either show up to appointments or events at the wrong time or not show up at all.

3.) Losing things

Dementia patients could start to put things in more and more unusual places. We all can misplace our car keys or house keys from time to time but finding “lost” keys in the refrigerator could be a sign of dementia. Patients could lose things and then not be able to retrace their steps to find their missing things. However harmless this may seem; this can escalate into theft accusations when they can’t find their personal belongings that they have unknowingly misplaced. Patients can become paranoid and subsequently put their things in even more unusual spots to ward off the suspected thief. Suspicion and delusions may occur in middle-to-late stage Alzheimer’s.

4.) Difficulty Doing Familiar Tasks

Dementia can also affect one’s capability to do normal daily tasks. Patients could have difficulty with coordination and remembering how to complete multi-step processes like driving, cooking, or playing a familiar game. They may start to rely more on their loved ones to do things for them. Caregivers should maximize the patient’s independence and allow them to try and figure it out but should remain cautious. Dementia can also affect depth perception, distance perception, and color perception. Caregivers may notice increased clumsiness, accidents, falls, and uncharacteristic mishaps.

5.) Language and Speech Problems

Alzheimer patients will typically have trouble recalling the right words while speaking or while writing. Some patients can use stand-in words like “thingy,” “thingamajig,” “doodad,” or “what-cha-ma-call-it” and can make up their words or terms for actions. For example, someone with dementia might call a fridge a “cold space.” Because of these confusions or impaired speech abilities, they may also stop talking or writing abruptly.

6.) Problem with Simple Math

Math may not come easy to everyone, but people in early stage dementia may have difficulty completing basic math problems. They can find it difficult to work with numbers in everyday life such as budgeting, calculating tips, or even adding and subtracting. Caregivers should remain patient when helping dementia patients with this. Patients may feel embarrassed so it’s also critical caregivers remain non judgemental, offering help or corrections as suggestions.

7.) Poor Judgement

Depending on the patient, changes in decision-making, through process, and judgement could be a sign of dementia. If a person has made risky decisions all through their life, dementia may not be the cause of their changes in decision-making. However, if a logical person who usually carefully weighs all the options and makes informed decisions suddenly begins showing poor or reckless judgement, dementia could be the cause of that. For example, if they start recklessly spending, inappropriately dressing for the weather, or falling for obvious scams (Nigerian prince) those could be a sign of dementia.

8.) Personality Changes and Mood Swings

Personality changes and mood swings could be a symptom of dementia. Patients can become fearful, suspicious, paranoid, depressed, or anxious. Someone who is usually confident may become more closed off and shy. Patients could easily become more upset when they’re frustrated especially when they are put outside of their comfort zone. Caregivers can reduce the effects by creating a calm environment and avoiding or limiting environmental triggers such as light glare or background noises.

9.) Changes in Grooming and Personal Hygiene

Changes in grooming and personal hygiene such as not changing clothes, skipping showers, and not brushing their teeth are common signs of dementia. In addition, neglecting basic upkeep of their home such as allowing clutter to accumulate and not cleaning at all are common signs of dementia. Caregivers may have to help patients with grooming, maintaining personal hygiene, and cleaning. However in cases where patients may refuse help, it is best to remain patient and explain to patients how you can help.

10.) Withdrawing from Friends and Family

Increased withdrawal from social events that one normally enjoys attending could be a sign of dementia. Patients may avoid social activities to prevent drawing attention to their other symptoms such as memory lapses or difficulty communicating. Patients who are aware of their signs or symptoms of dementia may be less confident in themselves which leads them to avoid interacting with their loved ones. If loved ones or caregivers notice this, reassurance and making patients feel comfortable in an environment could help.

What to do if you notice these signs?

If you recognize any of these signs and think any of your loved ones may have a form of dementia such as Alzhmeir’s, you should make a doctor’s appointment promptly. An early diagnosis is crucial as it can check for curable conditions that can mimic symptoms of dementia, devise care and treatment strategies, and make legal and financial plans for the future. Should you notice any of these signs, elder law planning may be something you need.

If you and your loved one need estate planning, please contact the Law Office of Inna Fershteyn at (718) 333-2395 for legal assistance and enquiries.