Posted by: BlogMaster | August 15, 2014

Married Couples and Doubling the Estate Tax Exemption

In my prior blog I talked about the increase by NY State that allows an individual to pass more wealth to their survivors.

This so-called Exclusion amount will increase from $1 million to more than $2 million between April 1, 2014 and January 3, 2019, and ongoing until it reaches more than $5 million.

With proper planning, a married couple in NY State can pass along twice the Exclusion amount.

Is there a trick?

No. It just requires creating a Disclaimer Credit Shelter Trust in your Will or Living Trust.

Here’s how it works.

Each spouse leaves all of their own assets to each other. On the first spouse’s death, the survivor has up to 9 months (when an inheritance tax return is due) to ‘disclaim’ assets into a trust for their benefit under their own Will or Living Trust.

Using simple current figures, the surviving spouse typically owns $2 million of their own and disclaims the $2 million inherited from their deceased spouse. When the surviving spouse dies, the assets in the ‘disclaimed’ trust plus the $2 million all pass inheritance tax free to their heirs.


This chart shows the Exclusion amounts allowed by law – adjusted annually for inflation:

From 4/1/14 to 3/31/15              
NYS individual owner =  $2,062,500 Exclusion from Taxation              
NYS Married couple =    $4,125,000 Exclusion from Taxation with Planning
 
From 4/1/14 to 3/31/15              
NYS individual owner =  $3,125,500 Exclusion from Taxation              
NYS Married couple =    $6,251,000 Exclusion from Taxation with Planning
 
From 4/1/16 to 3/31/17                
NYS individual owner =  $4,187,500   Exclusion from Taxation              
NYS Married couple =    $8,375,000 Exclusion from Taxation with Planning
 
From 4/1/17 to 12/31/18
NYS individual owner =   $5,250,000   Exclusion from Taxation              
NYS Married couple =    $10,500 Exclusion from Taxation with Planning and ongoing in 2019

Basic estate planning for married couples doesn’t have to be expensive or complicated. Getting the right legal counsel and advice are key to doing it right.

Take time to look at your estate plan and assets. Estate taxes are alive and well and not going away in the foreseeable future.


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Posted by: BlogMaster | July 15, 2014

NY Estate Tax: Still Alive, So Plan Well!

On April 1, 2014, New York State Governor Andrew Cuomo passed legislation increasing the amount of wealth a state resident can pass to their survivors upon death, without incurring any inheritance tax.

For many years, the maximum inheritance an individual could pass tax-free to survivors (‘exemption‘) was $1 million – and higher, if the person also bequeathed funds to charities.  And, with proper planning in Wills or Trusts, married couples could pass $2 million tax-free.

With the new legislation that took effect on April 1, 2014, the revised basic exemption amount is $2,062,500 for an individual – and twice that amount for a married couple, with proper planning. The amount will increase annually each April until 2019, when the individual exemption matches the Federal exemption of $5 million – and $10 million for a couple, with proper planning.

Sounds too good to be true. So what’s the hitch?

The hitch is that you will face higher estate taxes if your estate value is more than 105% of the exemption amount in any calendar year before your death.

Example: An individual who dies in April 2015 can pass a $3,125,500 tax-free exemption to their heirs. But if their estate is worth $3,281,250 (105% of the exemption), their entire ability to pass wealth without taxes does not receive the full exemption from inheritance tax (because it is phased-out) and could be zero, the closer to the 105% exemption the estate value is!

What can you do if this new legislation impacts your estate?

Have a “legal check-up” to ensure your Will and Trust are up-to-date. Remember that assets which may pass outside of your estate (including joint bank accounts, retirement accounts with beneficiary designations, life insurance, etc.) are still subject to inheritance tax unless a charity inherits the account.

With careful planning and wise legal advice, you can retain more wealth at the time of your death and pass more of that wealth to your designated heirs.

But NY State estate taxes are here to stay, so make sure to review your legal documents and understand your options while you still have time to make appropriate arrangements.

 

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Posted by: BlogMaster | June 24, 2014

Joint Bank Accounts: Pros and Cons for Estate Planning

Beth Polner Abrahams, Esq., Attorney at Law, is speaking at this free informational event open to the public:

Planning for the Future: Putting Plans in Place for Funeral Arrangements 

Thursday, June 19, 2014 from 6:00-8:00 PM

Cornell Cooperative Extension of Suffolk County – Extension Education Center
423 Griffin Avenue [rear door], Riverhead, NY 11901. Phone: (631) 727-7850.
 
Register by Monday, June 16, 2014
Call (631) 369-7345 – press zero “0” – or email April Goss agossevents@eed-a.org with your name, phone, and the number of people attending

Most of the individuals served by EEDA (East End Disability Associates, Inc.) and other Long Island agencies receive government funding in the form of Medicaid and Social Security benefits. Family members and advocates of disabled adult children need to ensure that current or future funeral arrangements preserve, and do not jeopardize, eligibility for these benefits.

Beth Polner Abrahams will present an overview of SSI and Medicaid: how to get and keep those benefits; special needs trusts (the types and why it doesn’t have to be costly); tips to get started on a life care plan for your adult disabled child.

Other speakers: Lisa Meyer-Fertal, CEO of EEDA, and Kenneth T. Rothwell, Director, Alexander-Tuthill Funeral Home.

Topics include:

 The importance of putting plans in place

 Regulations that govern residential providers

 Regulations/Eligibility guidelines for Medicaid & Social Security Administration benefits /Resource Management

 The costs of funeral arrangements

 The options available to fund funeral arrangements

 Estate Planning; Wills & Trusts– lets clear up the confusion

 Identifying the wishes of the individual

 Assess what you have and figure out what you need to implement the plan

Seating is limited at this free event. Register by June 16 to reserve your seat.

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PART 2:

Please see Part 1 in last week’s blog post before reading further.

The sad story of “Bernice” – who was scammed, victimized, financially and emotional abused, and lost everything – begs several serious questions:

  • How can you avoid mail fraud scams like the fake lottery that suckered Bernice into giving up $70,000?
  • How can you protect yourself and your loved ones from other types of fraud – currently in use and in the future?

Read the following guidelines and share them with your loved ones – especially seniors who live alone:

  • Telemarketing calls are difficult to stop even if you place yourself and your cell phone on the Do Not Call Registry.
  • Never give your personal information or make donations over the telephone.
  • Never give your address when asked, because that data is passed along or sold to other fraud scams and thieves.
  • One of the most prevalent and scary scams targeting seniors today starts with a phone call telling the senior that their grandchild, child, or other family member has been kidnapped, jailed in a foreign country, or threatened with harm for debts and can only be released if the senior pays a large sum of money quickly. The scammer warns the senior not to notify the police or other family members. To convince the senior their loved one is in danger, the caller might put a person on the phone who sounds like the grandchild or child. Action to take: Call other family members immediately and your local police to see if the person (mentioned by the caller) is actually missing.
  • To minimize unwanted telemarketing calls and solicitations by phone, enroll in the National Do Not Call Registry (for landline and cell phones) by calling 1-888-382-1222.
  • Protect your financial privacy. Make sure all of your financial accounts, and your bank accounts in particular, are password-protected. Do not use your birthdate, mother’s maiden name, pet’s name, home address, or social security number as your password.  If your bank does not use a password-protect security system, we suggest you move your funds to a bank that does.
  • Unsolicited home repairs are other potentially dangerous forms of scam that can threaten your safety. If a worker comes to your door and asks to gain entry to your home – but you do not know them or you did not call them, DO NOT let them do any work in or outside your home and do not pay them any money. Call the police and 911 immediately if they harass you and refuse to leave.
  • Unofficial “government surveys” asking for your personal information are another form of scam. Important: No government agency, including Medicare, Medicaid and supplemental insurance Medicare, will ever send someone to your home to take a survey of your personal information. Even the U.S. census includes protections for individuals against fraud and scams. Do not answer questions unless you know the survey is official. Call the police and 911 immediately if they harass you and refuse to leave.
  • Funeral scams are yet another trend against seniors. The surviving spouse or a family member receives a phone call claiming that the deceased person owed the caller money. Do not pay or give the caller any personal or banking information. Call the police if this happens to you.
  • In another recent scam, callers posing as Internal Revenue agents demanded repayment of a family member’s debt and threatening jail time. They instructed the senior to purchase a Money Dot (money gram) card, as happened to my client Bernice in Part 1 of this blog. If this happens to you, call the IRS and the police, and give them the caller’s phone number [copy it from your caller ID]
  • If you use email or the internet, be aware that email fraud and “phishing” schemes fraud are rampant. Never answer or open an email from someone you do not know. Never click a ‘link’ inside an email that contains no message, even if it came from a friend, family member, or professional you know. Instead, call the person by phone to inform them their email account has been ‘hacked.’
  • Beware of a fake Google email that asks you to click a link and then requests your personal information and email address. Delete the email immediately or forward to Google security.
  • To limit junk mail, register with Direct Marketing Association’s Mail Preference Service (MPS) for a $1 fee at http://www.dmaconsumers.org/consumerassistance.html. Or send a written request, with your name exactly as it appears on the catalog labels you receive, to: Mail Preference Service, c/o DMA, P.O. Box 9008, Farmingdale, NY 11735-9008. The MPS remains in effect for five (5) ears, or until you place an order or request a catalog. Companies that subscribe to the MPS typically check their mailing lists against the registry a few times a year, so it may take a few months for your junk mail to stop. More DMA info: (212) 768-7277.

Bernice’s story is a sad and difficult one for her family, for the court system, and for me, as the attorney who provided the evidence to have her declared incapacitated under the law.  And, unfortunately, scams against unsuspecting seniors are a growing trend.

Be smart, be wise, be aware. Make the effort and take the time to protect yourself and your loved ones.

Visit my website to learn about upcoming events and watch my new welcome video: http://www.bpaelderlaw.com.

 

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PART 1:

This is the story of a senior who was the victim of a widespread scam and who ultimately lost $70,000.00.

 “Bernice” is 78 years old and lives on Long Island, New York.  Widowed in her 50’s, she was a successful entrepreneur, buying and selling homes, and working for a government agency. 

But at the age of 75, Bernice began to feel alone – despite three devoted adult children, grandchildren and extended family – and financially insecure. 

Then, the junk mail began arriving – with requests for money by fake charities and fake religious organizations.  Instead of throwing it away, Bernice opened the mail and was drawn into the scammers’ world of need, blessings, and promises.  And then, she received a letter that looked like it was written on Bank of America letterhead, telling her she had won $4.5 million in a lottery. 

The next day, a letter that looked like it was written on Internal Revenue Service letterhead arrived, confirming Bernice’s winnings and informing her that the income tax for the winnings would have to be paid before she received any prize money. 

And then the telephone calls began. 

The callers – all with foreign accents – assured Bernice that the winnings were legitimate, but that she had to prepay the income taxes.  Bernice was never told what the total income taxes were.  She was instructed by the callers to send, at first, Western Union telegrams, in $500 to $1,000 installments.  The caller’s instructions were detailed and included the names and addresses to send the money – all to various West Indies, Jamaica and other Caribbean Islands. 

Bernice never realized these were all clues that she was the victim of a scam.  Her children and other family members tried to convince her that she had not won any lottery.  But to no avail. Bernice was a believer and would do whatever it took to get her winnings.

As years passed, Bernice would sometimes inform family that she couldn’t leave the home on a particular date because ‘the men were coming to take her to the bank to deposit her winnings.’

The calls were received weekly – soothing calls telling her that her family had forgotten her, telling her that only she knew the truth about her winnings, and effectively isolating her from reality. 

After one year or so, the callers’ instructions changed. 

Bernice was told to purchase “Green Dot” or Money Gram cards from local retailers such as CVS, Walmart, Walgreens, etc.   Bernice obeyed.  Each week – sometimes more often – the callers would instruct her to purchase the money card for $300 to $500, give her a telephone number to call them back, and Bernice would call that number and give the activation code to the caller. 

Within 3 years, Bernice had given $70,000 to the scammers. 

…Watch for Part 2 of Bernice’s story here next week.

Visit our new website at bpaelderlaw.com to learn more about Beth Polner Abrahams.

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Posted by: BlogMaster | March 3, 2014

Is Spousal Refusal Still Legal?

The annual budget proposed by Governor Andrew Cuomo has a provision about spousal refusal which ‘reads’ like it doesn’t exist. But, if passed, it will in fact extend the opportunity for spousal refusal to married couples where one spouse is a Medicaid recipient at home, receiving home care under MLTC, managed long term care. 

What is spousal refusal?  It is a written statement from the non-Medicaid spouse specifying that he or she is unable or unwilling to contribute excess countable resources and/or income for the cost of care of the other spouse.  In 2014, countable resources are those that exceed up to $117,240.00. 

What other resources are not countable?  Your home, retirement accounts, life insurance without cash value, burial plot, automobile, and in some instances, business property are not countable.  Spousal refusal and the retention of countable resources and income have, in the past, only been available with the nursing home Medicaid program. 

The proposed law would do the following:

  1. For both MLTC home care services and nursing home services, a spousal refusal statement would be lawful (and may trigger spousal impoverishment budgeting, as discussed in my prior blog)
  2. The applicant (or their lawful power of attorney) must sign a statement Assigning Support from their non-Medicaid spouse to the local Medicaid department.  This means that Medicaid still has the right to demand and sue a refusing spouse if there are excess countable resources or income.
  3. But, if the non-Medicaid spouse does not live with the applicant for Medicaid (perhaps they are separated but not divorced, and living apart),  and that spouse fails or refuses to make that income or resources available,  and refuses to sign a spousal refusal statement, MLTC services will still be provided.  The proposed law says an ‘implied’ right of recovery against the non-Medicaid spouse living separately from the MLTC spouse is created for whether during that spouse’s life or in their estate after death.

Advocates see these three problems with the proposal. 

  1. When one Medicaid spouse receives services under Hospice, they may be disenrolled from MLTC and lose the right of spousal refusal. 
  2. In upstate NY counties where MLTC is still not mandatory for home care and the ‘prior’ traditional home care program is used, and for the poor using a Medicaid-based Medicare premium program (called SLMB and QMB), there is no continuation of spousal refusal. 
  3. Many parents have young children under age 18 in Medicaid programs (often called Care At Home) and parental refusal (of their income and resources) seems to be excluded. 

We will keep you up to date on the status of spousal refusal as the budget process progresses. 

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Posted by: BlogMaster | February 11, 2014

Home Care for Seniors and MLTC ‘Spousal Impoverishment’

I often remind my readers about the importance of consulting with a qualified elder law attorney about Medicaid planning and applications. Here’s another reason why.  

The recent statewide programming changes to Medicaid now support my personal and professional focus to keep seniors at home.  But even the ‘simple’ home care application is fraught with complexities that cannot be addressed by a non-lawyer advocate who ‘sells’ a cheaper Medicaid application service.

Why?  The income rules for ‘spousal impoverishment’ have changed.  When one spouse in a marriage requires home care, MLTC income rules are now so complex as to require the couple and their family to get an analysis of the best and most favorable budgeting approach.

What is spousal impoverishment budgeting? 

In the past, nursing home and a former home program (called Lombardi) provided an income allowance for the non-Medicaid spouse ($2,931.00 in 2014) and a resource allowance for countable resources (up to $117,240.00 in 2014).  These allowances were set to make sure that the spouse had sufficient income and resources to pay for their expenses at home.

Similarly, under that prior home care program, there was no spousal allowance for the other spouse who did not need home care services.  This resulted in spousal refusal statements (the legal refusal to contribute income and resources) and the threat of spousal demand lawsuits by the Medicaid department because the law only permitted the couple to retain about $1,100.00 in monthly income and $20,000 in countable resources.

Today, if your spouse is applying for MLTC home care (including day care) services, an analysis must be made to determine which budgeting method will be best for the non-Medicaid spouse, because MLTC Medicaid now permits spousal impoverishment budgeting.  Only a qualified elder care lawyer can evaluate what is appropriate for your circumstances: spousal budgeting or single-person budgeting with a pooled income trust (for income greater than $809/month) and spousal refusal.

Expert legal counsel is essential to determine your rights and lawful opportunities.  Don’t leave Medicaid to non-lawyers if you have income and resources that may need to be legally protected.   

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Posted by: BlogMaster | February 1, 2014

FIDA Information Correction – Oops!

In the dynamically changing world of Medicaid and managed care, there are many rules, guidelines, and deadlines – and we do our best to keep track of all the facts for you.

Thanks to one of my loyal blog readers – the Director of Managed Long Term Care for Amerigroup (Health Plus) – I  learned that I inadvertently reported some wrong information to you. Please make a  note of the following corrections.

Topic: New York State has changed its roll-out for FIDA voluntary and passive enrollment.  

Corrections

  • Notices to existing MLTC home care recipients are expected to be mailed later in 2014. 
  • Active but voluntary enrollment may begin in October 2014 (not in January).  
  • Passive enrollment in a FIDA is expected to occur in January 2015 (not in July 2014).  Note: Passive enrollment means the senior or disabled person with Medicare has failed to select a FIDA and will be automatically enrolled. 
  • NYS has also pushed back to late 2015 the FIDA enrollment for seniors who receive Medicaid services for nursing home care.

I apologize for any confusion the errors may have caused. My next post is coming soon.

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Posted by: BlogMaster | January 25, 2014

About FIDA … Continued

This post continues the review of FIDA from where my previous blog left off. 

The contract between NYS and the federal agency, CMS, will overhaul the delivery of home care (and eventually, nursing home) services to Medicaid/Medicare dual eligible recipients. 

The ‘umbrella’ of delivery of all medical services means that the senior who is also enrolled in Medicaid home care must select physicians who are in the FIDA network. Existing home care recipients should receive notices by U.S. mail in January or February. 

If a voluntary enrollment is not made by July 2014, Medicaid seniors who do not voluntarily enroll in a FIDA plan by September 2014 will be automatically enrolled. 

However, FIDA enrollment will also be affected by the senior’s ‘Medicaid authorization period.’  This refers to seniors currently in MLTC where services are authorized only for 6-month blocks of time, after which the seniors are re-assessed for care and service plans. Thus, the voluntary or passive enrollment for these seniors may be different.

In October 2014, NYS will begin FIDA enrollment for seniors who receive Medicaid services for nursing home care. Automatic enrollment is expected to begin in January 2015. 

Once enrolled, the Medicaid FIDA senior, now called a ‘member,’ must be assessed within 30 days of enrollment by a nurse employed or contracted with the FIDA for the care plan and medical professional services.

In an upcoming blog post, I will cover in detail the ability to ‘opt out’ of FIDA. 

 

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