Posts Categorised: General
Estate Planning is applying the law of property, trusts, wills, insurance, and taxation to the ordering of one’s affairs, while keeping in mind the possibility of retirement and the certainty of death. Estate Planning is controlling your property while you are alive and well, planning for yourself and your loved ones in case you become mentally disabled, giving what you have to whom you want when you want and the way you want, and having full access to today’s legal and financial opportunities.
The basic estate plan consists of a Power of Attorney, Health Care Proxy, Living Will, and Last Will and Testament. Having these documents as part of your basic estate plan will help you identify and address whatever legal, health, or financial issues you might face, as well as help you satisfy your estate planning objectives.
Power of Attorney.
A Power of Attorney serves a useful function, when used appropriately. When used appropriately, the Power of Attorney is a wonderful tool to make sure your property, financial, and/or legal decisions are made effectively and efficiently by the person you trust and who will be responsible for making these important decisions. However, the Power of Attorney can also be a dangerous weapon in the hands of an agent who is not trustworthy and does not act in your best interest. The Power of Attorney can also be a dangerous weapon when prepared by a short-sighted legal or financial professional.
For people who do not have the independent capacity to make decisions for him or herself, a Power of Attorney is, many times, the only way to a successful long-term care plan. Having the necessary and appropriate authority within a valid Power of Attorney will assist your agent/family member/decision-maker make the decisions to put the plan together and put it in place. Without this authority, your family’s only other option might be a guardianship, and all of the problems associated with that.
See also my blog post – Appointing a Power of Attorney – from August 2015.
Health Care Proxy.
In New York, appointing someone you can trust to decide about your medical treatments and/or health care if you become unable to decide for yourself is the best way to protect your wishes and concerns regarding your health care decisions. “Health care” means any treatment, service, or procedure to diagnose or treat, a physical or mental condition. You have the right to appoint someone by filling out a form called a Health Care Proxy.
The Health Care Proxy designates an agent to make your health care decisions (in the event you are not mentally able to make those decisions for yourself). Also, the agent is designated to represent your wishes, as set forth in your Living Will (discussed next), with respect to the use of unnatural extraordinary means to sustain your life. Hospitals, doctors, and other health care providers/facilities must follow your health care agent’s decisions as if they were your own. You may give the health care agent as little or as much authority as you want, and may allow your health care agent to make all of your health care decisions or only certain ones. The Health Care Proxy can also be used to document your wishes or instructions with regard to organ and/or tissue donation.
If you are worried about when the Health Care Proxy becomes effective, discuss options with your attorney. Your attorney should be able to discuss with you language detailing the process by which your attending physician certifies that you are mentally disabled. The following language may be used as an example: “For purposes of establishing incapacity, whenever two (2) licensed, practicing medical doctors who have personally examined me (one of whom shall be my primary care or attending physician) who are not related to me or to any beneficiary or heir at law by blood or marriage certify in writing that I am unable to make my own decisions relating to my health care choices because of mental or physical infirmity and the certificates are written into my medical record, then the agent appointed hereunder shall assume all powers granted in this Health Care Proxy.”
See also my blog post – Health Care Proxies for Minor Children – from March 2015.
A Living Will is essentially a document whereby you set forth in writing your desire to have, or not have, your life extended by unnatural extraordinary means, such as life support and other extreme medical technologies. For example, if your death is imminent but for the use of respirators, feeding tubes, etc., your substitute decision-maker, as designated in your Health Care Proxy (discussed above), would have the power to instruct the doctors to terminate their efforts.
Adults in New York have the right to accept or refuse medical treatment, including life-sustaining treatment. This means that you have the right to request or consent to treatment, to refuse treatment before it has started, and to have treatment stopped once it has begun. Many patients turn to family members, friends, or caregivers for advice, or want medical decisions ultimately made by them, but sometimes a patient cannot make his or her medical decisions, and has not effectively delegated that decision-making authority to others. For this reason, it is important for you to make your wishes explicitly known, in advance.
Many states have enacted laws that relate to a patient’s right to prolong or terminate his or her own medical treatment, resuscitation efforts, and life-sustaining measures. New York is not one of those states. The common law right to express one’s wishes as to his or her so-called “right to die” is found in the caselaw beginning with In re Westchester County Medical Center, wherein the court established the need for “clear and convincing” evidence of a patient’s wishes and stated that the “ideal situation is one in which the patient’s wishes were expressed in some form of writing, perhaps a ‘living will’.”
There are no formal requirements to the signing of the Living Will. The person signing the Living Will must be in all respects mentally competent. The Living Will must be signed by the patient, dated, and should be witnessed by at least two (2) independent witnesses. The Living Will need not be notarized.
Your attorney should understand that general instructions about refusing treatment, even if written down, may not be effective. Your instructions must clearly cover the treatment decisions that must be made. For example, if a client merely writes down that he or she does not want “heroic measures,” the instructions may not be specific enough for the hospital or health care facility to honor. A Living Will must specify the type of treatment, such as a respirator or chemotherapy, and describe the medical condition(s) when the client would refuse such treatment, such as when the client is terminally ill or permanently unconscious with no hope of recovering normal brain function.
Last Will and Testament.
For many, the Last Will and Testament is an important document within their comprehensive Estate Plan. For some, the Last Will and Testament is important because it converts a deceased’s intestate estate into a testate estate. When a person dies with a Will, he or she is said to have died “testate”. When a person dies without a Will, his or her estate is an “intestate” one.
For a family of moderate means, not having a Will means that the surviving spouse may have to share a small estate with children which may effectively deprive the surviving spouse of property needed for his or her welfare. Moreover, if one or more children are minors, then guardianship may be needed for property passing to the minor child. Similarly, if a beneficiary is disabled and receiving government benefits, a distribution to him or her, without condition, might disqualify that beneficiary for his or her benefits. In these cases, the Last Will and Testament could provide that the surviving spouse receive the full estate, the minor children’s shares be held in trust, thus avoiding the guardianship, and that the disabled beneficiary’s government benefits not be supplanted by the inheritance.
For spouses where there are no children, each spouse might assume that without a Will the surviving spouse would take everything. In that case, they would be wrong. Under Florida law, for example, if the deceased is survived by a spouse and issue of the deceased but not of the surviving spouse, then the surviving spouse’s share is one-half of the intestate estate. The other one-half goes to the surviving issue of the deceased or, if none, then to the deceased’s parents. The devolution of property continues, but the point is made: If the married couple do not have children, then the surviving spouse does not inherit the whole intestate estate. He or she must share it with the parents, and successive generations, of the deceased’s heirs.
The Will also gives the deceased the opportunity to name his or her own Executor or Personal Representative. That person may be different than the person who may want to be the Administrator under the state’s laws in an intestate administration proceeding.
In the 1990s, Prince’s war with his record label was monumental. Prince argued, quite publicly, that his record label owned and controlled his name as well as any music released under that name. Prince passionately believed that artists must remain the owner of their own art. This belief resulted in Prince refusing to use his name in any of his productions, creating the now-infamous “” as his symbol, being referred to as “the Artist Formerly Known as Prince”, writing the word “slave” on his face during shows and appearances, and putting out half-hearted music just to fulfill the terms of his record contract.
In addition, it has been reported that Prince made hundreds of hours of music, which has been described by Rolling Stone magazine as some of Prince’s best work, but, for whatever reason, has never been released by Prince. Prince’s vaults of music also supposedly contain at least 50 fully-produced completed music videos and a documentary about Prince videotaped by Kevin Smith. Prince apparently told Rolling Stone magazine that his vaults contain complete Revolution albums, two Time albums, and one Vanity 6 album.
For whatever reason, Prince did not want this music, or even the videos or documentary, released. If Prince had died with a Will, he could have directed his Executor(s) to never release the contents of his vaults, or at least instruct his Executor(s) on what to do with the contents of his vaults. Yet, without a Will, there is no such instruction or prohibition.
Instead, with the federal government wanting its taxes, and the lawyers and accountants wanting their fees, and the eventual inheritor(s) (whether it be his child(ren) or his siblings) wanting the rest, everyone is going to want to make sure that his estate makes as much money as possible. Even if that means releasing the music, the videos, the documentary, and whatever else is contained in the vaults, which is likely not what Prince would have wanted.
The real tragedy of Prince’s death is that for someone who so passionately believed that an artist should control the fate of his own art, by not signing a Will, or in any other way protecting his estate, Prince left the fate of his own music and productions to the whim of financially-motivated people who may not have ever really cared about him.
Prince’s legacy will certainly continue, but not according to Prince’s wishes.
A man, born in Minnesota in the 1980s, claims he is a child of Prince. This man, who remains unnamed, claims that he was born as a result of a “fling”. But, whether that “fling” turns into a $300-plus million dollar inheritance will be determined by DNA tests. Heir Hunters International, a Los Angeles based company, is helping this man pursue his claim.
Under Minnesota law, if this man is truly Prince’s child, then he (and any other child(ren)) will be the sole inheritor of Prince’s estate. Prince’s sister, Tyka Nelson, who has filed papers to be the administrator of Prince’s estate, and Prince’s half-siblings, Omarr Baker, Alfred Nelson, John Nelson, Norrine Nelson, and Sharon Nelson, and Prince’s grandniece, Victoria Nelson (granddaughter of Prince’s predeceased half-brother, Duane Nelson), will inherit nothing.
So, the interesting question is whether or not this unnamed love child is, in fact, Prince’s son. DNA tests have been ordered and, I would imagine, everyone in that family is awaiting the results.
Under Minnesota law, if Prince died without a spouse (and we are not certain, at this time, that he was not married at the time of his death), then his estate would pass to his children. While we know that Prince had a son who died shortly after birth, we do not know, for sure, that Prince did not have any other children. But, assuming that Prince did not have any other children, then Prince’s estate would pass to his parent(s). If a parent is not living, then Prince’s estate would pass to his siblings (including half-siblings).
If, on the other hand, Prince died with a Will, then the terms of the Will would govern.
Whether you are called an executor or administrator, or anything in-between, your job is relatively the same. Marshal the assets of the estate, pay the legitimate claims of the decedent, dispose of the illegitimate claims against the decedent, distribute the net estate pursuant to the terms of the dispositive instrument and/or state law, as the case may be, prepare the necessary estate tax return(s), and file an inventory with the court.
1.Marshaling the assets of the estate.This entails:
a.notifying the decedent’s asset companies – banks, credit unions, brokerage companies, financial institutions, etc. – of the decedent’s death.
b.opening a checking account in the name of the estate – e.g., “Estate of John Doe” – so that you will have access to estate money to pay the estate expenses. You will need the Taxpayer Identification Number to open accounts in the name of the estate.
c.liquidating assets for deposit into the estate checking account or determining whether assets can be re-titled into the name of the decedent’s estate;
d.notifying the decedent’s income sources. If the decedent was working, contacting HR at the decedent’s employment to arrange for back pay and future pay.
e.contacting benefits companies – retirement accounts, annuities, life insurance, etc. – and receiving the forms. If the decedent/estate is not the beneficiary of these accounts, the asset company will likely not talk to you. In that case, you merely should inform the beneficiaries of the existence of the account and who to contact to get the proper form(s).
To locate decedent’s assets, you should get and thoroughly review the decedent’s:
ii.financial statements, including premium statements (e.g., insurance policies, annuity contracts, etc.);
iii.checkbooks and passbooks;
iv.safe deposit boxes;
v.income tax returns (speak with the decedent’s accountant or use Form 4506-T to get a copy of the decedent’s income tax returns);
vii.unclaimed funds in the states where the decedent lived.
2.Pay the legitimate claims against the decedent.This entails:
a.contacting the decedent’s credit card companies, notifying them of the decedent’s death, and determining how much is owed.
b.canceling the decedent’s expense accounts (e.g., utilities, credit cards, cable, cell phone, subject to the needs of the family).
c.determining if the decedent had any private debt (e.g., private loans, IOUs, etc.
d.identifying the decedent’s real property and determining the proper debt of the property – e.g., mortgage payments, real estate taxes, co-op maintenance, homeowner association dues, etc.
e.making arrangements to pay the legitimate, unavoidable debt.
f.Weeding out the illegitimate claims and/or determining which debt will not have to be paid back.
3.Dispose of the illegitimate claims against the decedent.This entails:
a.Deciphering the real debt versus the fake debt.
b.What to do when you receive a claim against the estate? A claim filed against an estate does not, on its face, mean anything. You need to determine whether the claim is legitimate or illegitimate. If illegitimate, you do not need to respond. It is not your duty to perfect the creditor’s claim. A claim ignored is a claim rejected. If rejected, the creditor will have to bring a proceeding, typically an accounting proceeding, to prove the claim is legitimate. Regardless, however, you are precluded from distributing the net estate (see Paragraph 4(a) below) until the claim is disposed of, or, at least, leave enough cash in the estate to pay the claim, if necessary.
4.Distribute the net estate pursuant to the terms of the dispositive instrument and/or state law, as the case may be.
a.A creditor of the decedent has seven (7) months from the date Letters are issued (or, on or before the date fixed in the published notice to creditors) to file a claim against the estate. That does not mean the creditor is necessarily out-of-luck if a claim is filed against the estate after the seven (7) months, if there is value left in the estate. In other words, you should not distribute anything from the estate until the expiration of the seven (7) months. If you make a distribution from the estate before the expiration of the seven (7) months, and if the claim against the estate is legitimate, then you will have to get back enough from the beneficiaries to pay the claim. If you are is unable to get back enough from the beneficiaries to pay the claim, then you may be personally liable for the claim. If, however, you make a distribution from the estate after the expiration of the seven (7) months but before a claim against the estate is filed, then you do not have to get anything back from the beneficiaries. The onus is on the creditor to file his, her, or its claim within the seven (7) months. If, on the third hand, the creditor files a claim against the estate after the expiration of the seven (7) months but before you distribute the estate, the creditor can have his, her, or its claim (if a legitimate claim) paid out of the estate (or whatever is left of the estate).
b.Once the assets of the estate have been marshaled, the legitimate claims of the decedent paid, the illegitimate claims against the decedent disposed of, you can distribute the net estate pursuant to the terms of the dispositive instrument and/or state law, as the case may be. If a testamentary trust(s) is created under the terms of the Will, then you will create the trust account and hand the assets of the trust over to the trustees of the trust. If distributions to the beneficiary(ies) are outright under the terms of the Will, then you will make arrangements with the beneficiary(ies) to take possession of the assets.
5.Prepare the necessary estate tax returns.Currently, the NYS estate tax exemption amount is $4,187,500. The federal estate tax exemption amount is $5,450,000. If the decedent’s taxable estate (as opposed to probate estate) is greater than $4,187,500, then you must prepare and file the decedent’s NYS estate tax return and pay whatever NYS estate tax is due. If the decedent’s taxable estate is greater than $5,450,000, then you must prepare and file the decedent’s NYS estate tax return and federal estate tax return and pay whatever NYS and/or federal estate taxes are due. Federal and NYS estate tax exemption amounts will increase until 2019, at which time it is expected that the two rates will become equal.
6.File an inventory with the court.Once the assets of the estate have been marshaled, the legitimate claims of the decedent paid, the illegitimate claims against the decedent disposed of, and the net estate has been distributed pursuant to the terms of the dispositive instrument and/or state law, as the case may be, you must file an inventory of assets with the court. You cannot be discharged from your duties without filing an inventory of assets and failure to file an inventory of assets will (eventually) lead to revocation of Letters. If an estate tax return was filed for the decedent’s estate, you can attach the estate tax return to the Inventory of Assets without having to complete the entire form for the Inventory of Assets.
Top Mistakes Fiduciaries Make (Liability Landmines).
1.The common (but not small) mistakes:
a.Not marshaling all of the assets.
b.Not determining all of the debt.
c.Not disposing of all of the debt.
d.Not paying the expenses on time, including the estate taxes owed by the decedent’s estate.
e.Making distributions prior to the seven (7) months.
f.Paying the decedent’s creditors without confirming the claim(s).
g.Not listening to the beneficiary(ies) of the estate.
h.Not heeding the concerns or needs of the beneficiary(ies) of the estate.
2.The subtle mistakes:
a.Not investing the assets of the decedent’s estate properly.
b.Not continuing or winding down the decedent’s business.
c.Taking too long to administer the decedent’s estate.
3.The BIG mistakes:
a.Wasting (or acting negligently with) the assets of the estate.
c.Self-dealing with the assets of the estate.
d.Embezzling the assets of the estate.
When navigating through estate and trust administration, the good fiduciary must be aware of his or her role, as well as his or her duties to the decedent, the decedent’s estate, and the beneficiaries of the decedent’s estate. Estate, Will, and trust conflicts will arise even in the best of estate plans. A fiduciary should not compound the problem by creating further conflict, or being the reason for the conflict.
If you would like to discuss your role as fiduciary of the estate, or need assistance in representing an estate, call us at (877) 207-6803.
The best way to keep Medicare covered skilled maintenance care in place is to know your loved one’s rights and have the support of your loved one’s physician. Your loved one should not lose access to therapy because he or she will not improve or because he or she has reached the financial cap.
Here is the typical scenario:
Your love one is receiving skilled nursing care, home health services, or other certain types of therapy. Medicare Part B is paying for this care because it is provided by a skilled professional (a physical, occupational, or speech therapist) or in a qualified facility. You are told that the care will be discontinued because your loved one has “plateaued,” returned to “baseline,” is “maintenance only,” or requires only “custodial care.” You believe your loved one continues to need, and will continue to benefit from, the provided care.
Facilities and skilled care providers sometimes try to convince Medicare beneficiaries that Medicare coverage for their care may be denied on the grounds that they are not likely to improve, or are “stable,” or “chronic,” or require “maintenance services only.” These are not legitimate reasons for Medicare denials. Even if full recovery or medical improvement is not possible, a patient may need skilled services to prevent further deterioration or preserve current capabilities.
First, tell the facility that they’re wrong and ask them to reconsider the termination of benefits.
The 2013 settlement of Jimmo v. Sebelius, a federal classaction lawsuit, means that Medicare can no longer deny coverage for skilled nursing care, home health services, or other maintenance services because the patient or resident reaches a “plateau” and their condition is not improving. This allows people with Medicare who have chronic health problems and disabilities to get the skilled maintenance care they need, for as long as they need it, if they meet other coverage criteria.
As of December 6, 2013, the Centers for Medicare and Medicaid Services (CMS) Policy Manuals have been updated to reflect the settlement provisions. The manuals now make it clear that improvement is not necessary for coverage of physical, occupational, and/or speech therapy. What matters is the need for care to maintain or slow deterioration of the individual’s condition.
The intent of the Jimmo v. Sebelius settlement was to clarify Medicare’s longstanding policy that when services are required in order to provide care that is reasonable and necessary to prevent or slow further deterioration, coverage cannot be denied based on the absence of potential for improvement or restoration.
When talking with the facility, try to keep your loved one’s care in place. Medicare pays for care that has been prescribed. It does not pay for care that should have been prescribed. Once your loved one’s care is discontinued, it will be essentially impossible to reinstate the care without a Medicare appeal. The first step, therefore, is to keep the care in place. When services are terminated, your loved one’s long-term health may be endangered.
Second, contact your loved one’s doctor and ask him or her to order more care.
Therapists work under the orders of physicians. If the physician ordered three therapy sessions, the therapist will discharge your loved one after three therapy sessions. If you do not think your loved one is ready for the discharge, contact your physician and ask him or her to order more care.
Medicare will only pay for services if the services are medically reasonable and necessary. Unfortunately, for a long time, many believed that Medicare would only cover therapy if the patient would improve significantly in a short period of time. The use of this illegitimate standard, known as the “Improvement Standard”, caused patients with chronic conditions to lose access to reasonable and necessary medical care.
Ask your physician to write a letter explaining why your loved one’s services was, and still is, medically reasonable and necessary, including information about possible medical harm that might occur if your loved one does not receive the services. If possible, also include a letter supporting the claim from the treating therapist (even though this is sometime difficult because the therapist may work for the facility who is terminating services).
Because of the devastating effect of the improvement standard on the lives of people living with chronic conditions, the Jimmo v. Sebelius settlement stated that Medicare coverage does not require actual or even the possibility of improvement.
Third, show the facility the new materials published by the Center for Medicare and Medicaid Services (CMS) following the Jimmo v. Sebelius settlement.
CMS published the following, clarifying that maintenance therapy is covered by Medicare:
2. CMS Transmittal 179 – Manual Updates to Clarify Skilled Nursing Facility (SNF), Inpatient Rehabilitation Facility (IRF), Home Health (HH), and Outpatient (OPT) Coverage Pursuant to Jimmo vs. Sebelius.
3. CMS Medicare Learning Network Notice on Manual Updates to Clarify Skilled Nursing Facility (SNF), Inpatient Rehabilitation Facility (IRF), Home Health (HH), and Outpatient (OPT) Coverage Pursuant to Jimmo vs. Sebelius.
If your loved one’s therapy is ending because your loved one’s therapist or facility believes your loved one will not improve or not improve quickly enough, but also thinks that continued care is necessary to maintain your loved one’s condition or slow determination, give the therapist or facility a copy of the CMS publications listed above. In addition, ask your loved one’s physician to give the therapist and/or facility copies of published research or clinical guidelines from professional sources supporting the medical benefit of maintenance therapy for your loved one’s medical condition. This information, in combination with the Jimmo settlement, should convince your loved one’s therapist to continue maintenance therapy and bill Medicare.
Fourth, know what to say when the therapist and/or facility claims services are denied because of the annual Medicare payment cap.
Your loved one’s therapist or facility might discharge your loved one from services because he or she reached the annual Medicare payment cap. If your loved one continues to need skilled maintenance care, you should ask your loved one’s therapist or facility to bill the ongoing care through the “Exceptions Process”. To support your loved one’s need for ongoing care and in case Medicare denies payment for the care; the therapist and/or the facility should obtain documentation from the medical literature or guidelines from professional sources supporting your loved one’s need for ongoing therapy. Your loved one’s physician may be able to help locate this literature.
If the steps above do not succeed and Medicare denies coverage, and you continue therapy, paid by you or another agency, the denial can be appealed through the Medicare Part B appeals process.
Fifth, if maintenance therapy is denied, consider appealing.
If your loved one’s Medicare Summary Notice (MSN), or the service provider, indicates that your loved one’s care has been denied coverage, look to see whether your or your loved one, or the provider, has been held financially responsible. If you or your loved one have been held financially responsible, you should certainly appeal.
If the therapy provider has been held financially responsible, and you want to get more therapy of a similar kind, you should also appeal.