An ABLE Act account can be an important part of your estate and special needs plan, including special needs trusts.

One of the articulated purposes of the ABLE Act is “to provide secure funding for disability-related expenses on behalf of designated beneficiaries with disabilities that will supplement, but not supplant, benefits” otherwise available to qualified persons, whether through private, employment, or public programs or sources.

Who is an eligible beneficiary?

To be eligible to be the beneficiary of an ABLE account, an individual must have a ‘qualifying disability’ occurring before the age of twenty-six, and either by receiving SSI or SSD, the cash benefit program for persons with disabilities.

However, remarkably, the law also allows a disability to be ‘certified’ if an individual is not receiving SSI or SSD – either because

• financial resources are greater than SSI levels
• or a couple are married and the disabled person is not receiving SSI because of marriage
• or where an individual does not qualify for SSI and there is not a sufficient work history to qualify for SSD.

The certification of disability is approved by a physician and ‘filed’ as part of the account opening. The medical certification requires the person to meet the same medical standard required as persons who apply for and receive SSI or SSD, specifically:

• the individual has a medically determinable physical or mental impairment which results in marked and severe functional limitations, and the impairment can be expected to result in death,
• or the impairment has lasted or can be expected to last for a continuous period of not less than 12 months,
• or the person is blind.

So, if an individual is certified as disabled, even though he or she may be working and not receiving Medicaid or SSI or SSD, an ABLE account can still be opened.

Is the disabled person’s privacy protected?

Yes. To preserve privacy, no written diagnosis is required to be placed on file when opening the ABLE account, and ABLE programs will not need to receive, retain, or evaluate detailed medical records.

Instead, certified disabled beneficiaries can open an ABLE account by certifying, under penalties of perjury, that they meet the qualification standards. The disabled beneficiary or their parent or guardian must also certify the receipt of a physician’s signed diagnosis and agree to retain that diagnosis and provide it upon request to the ABLE program or the IRS.

Please note that an individual who is disabled before age 22, and is receiving childhood disability benefits (CDB) as a derivative benefit based upon a parent’s death or disability, or is receiving disabled widow’s or widower’s benefits based upon becoming disabled or blind before age 26, may also be an eligible beneficiary of an ABLE account without ‘certification’.

 

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Estate planning for families with a special needs family member – someone who is physically or mentally disabled or intellectually limited – is critical because many assistance programs are facing cuts or benefits cut-backs.

The easiest form of planning is to create either a testamentary (inherited) special needs trust (SNT) as part of your Will or Living Trust, or a ‘stand alone and waiting’ special needs trust to receive gifts as well as inheritances.

For persons with disabilities who inherit property or funds outright, there is still the opportunity to legally protect these funds with a payback SNT. But for many years, veterans-related survivor benefits could not be legally sheltered in an SNT for a disabled child. Members of the military can elect to defer a portion of their retirement pay so that when they pass away, a surviving spouse or a dependent child can receive a significant portion of the retirement payments. But, for a disabled child receiving SSI or Medicaid, this could jeopardize eligibility.

But all that changed in January 2016, when part of the National Defense Authorization Act of 2015 (NDAA) made it legally possible to shelter the retirement pay for the benefit of a disabled child. The NDAA allows a payback SNT (or a nonprofit’s pooled trust) to be designated to receive the benefit for the special needs child (or special needs child who is now an adult).

NDAA policy guidelines were released on December 31, 2015. The statute does not apply to disabled spouses.

If the military member already selected the disabled child as beneficiary (prior to the 2015 NDAA law), he or she is now permitted to make a one-time election to change the child beneficiary to a supplemental needs trust or pooled community trust (a substitution of beneficiary election).

If the military member died during active duty (or inactive duty but in the line of duty) but had not yet made the beneficiary election, a parent, grandparent or court-appointed legal guardian may make the election to have the benefit paid to the SNT for the child.

Members of the military and their families can find instructions and directions at http://www.moaa.org.

 

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At the beginning of 2016, the Stephen Beck, Jr. ABLE Act of 2014 (known as the “ABLE Act”) became law. The remarkable aspect of this law is that some, but not all, of the rules regarding resource limits under SSI ($2,000) and Medicaid are now modified as a result of this federal legislation. And, the use of the ABLE account for housing or other expenses is far more expansive than non-ABLE accounts, including special needs trusts.

Similar in structure to education tuition accounts known as 529 Plans, the ABLE Act statute adds Section 529A to the Internal Revenue Code allowing the creation of qualified ABLE accounts by a State agency and also amends parts of the Social Security Act.

Many of the families who seek my legal advice are concerned about the actual implementation of the law in New York State. First, the State must pass enabling legislation (which essentially mirrors the requirements of the federal legislation). Second, the program must be maintained by the State or a State agency. And third, the program must become operational.

The Internal Revenue regulations as originally proposed would have limited the option to establish an ABLE account to the State of residence of the disabled person who is the owner/designated beneficiary of the account.

However, in November 2015, the IRS modified this limitation. As a result, the disabled individual (or their family or guardian) may select any State with an operational ABLE program and enroll in that State’s program.

If the designated beneficiary of the ABLE account moves to another state or otherwise changes their residence, the ABLE program in the former state may continue to maintain the account of the designated beneficiary.

The nonprofit ABLE National Resource Center (www.ABLENRC.org) maintains a list tracking implementation of the legislation by State.

The ABLE account can be part of your estate and special needs planning combined with a special needs trust. Watch this blog for additional updates on the ABLE Act and how it can be used to benefit your disabled family member.

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   New York State Medicaid administers a comprehensive community home care program called Managed Long Term Care (MLTC) on Long Island, and New York City and its boroughs. Long Island is well served by MLTC programs, but there are issues you need to be aware of – that I will discuss in my next two blogs.

What is MLTC?

Managed Long Term Care is the program administered by the local Medicaid department for home care aides in the home; adult day care or dementia care at a senior center (two programs: social model day care and medical model day care); transportation to medical appointments; and nursing in the home and similar services.

To qualify for MLTC, you need to follow a three-step process:

Step 1 –

Apply for Medicaid at the local department of social services. In 2016, an unmarried person can own up to $14,850 of countable resources. Examples of resources that don’t count: your home (if the net equity value is less than $828,000), a motor vehicle, retirement accounts which are paying the required distributions according to Medicaid rules, term life insurance, a burial plot and a funeral contract. Consult with a qualified elder law attorney to learn about other non-countable resources.

Your family member may also need to legally shelter monthly income. In 2016, an unmarried person may keep up to $825/month of income (pension, social security, interest, retirement distributions, veteran’s pension). Excess income should be deposited to a Community Pooled Trust. Which trust is right for you and what is the timing for joining the trust? Consult with a qualified elder law attorney to learn how this may apply to your unique situation.

There is no “look back” for Medicaid Home Care applications. Typically, three months of financials are submitted plus proof of all transfers from the applicant to other persons. If nursing home care is needed in the future, these transfers may mean Medicaid will not pay for care in a nursing home. A consultation with a qualified elder law attorney is essential.

Important reminder: A non-lawyer cannot give you legal advice.

Step 2 –

After the application is accepted, a Conflict-Free Assessment is required performed by a state-contract agency determines if your family member needs home care assistance for at least 120 days (long term). MAXIMUS is the agency currently scheduling the assessments. A family member should always be present with the applicant when the agency conducts its assessment. To request the assessment, call 1-855-222-8350.

Step 3 –

Select and contact your managed care agency for delivery of the services. The MLTC must send its own nurse to assess and create the Medicaid recipient’s care plan, and bring enrollment forms. Timing is critical because NY State only allows the MLTC to begin its services on the 1^st day of a month. The MLTC must schedule the visit, send its nurse, conduct the assessment and file the assessment by the 20^th of the month. If this timetable is not met, the start of services for the Medicaid recipient (home care aide, day care and transportation) will be delayed by another month, creating a ‘gap’ delay. It is important to know that the nurse will bring forms to enroll the Medicaid recipient in the managed care plan. Be sure to sign the enrollment forms IF you decide to use the particular MLTC agency – and give them to the nurse before he or she leaves or send the forms back to the MLTC.

For a list of plans, go to the NYS Department of Health website: http://www.health.ny.gov/health_care/managed_care/mltc/mltcplans.htm

My next blog will discuss the “bumps on the road” to Medicaid for home care services.

 

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In my previous post, I continued the techniques for ‘self-help’ dispute resolution on elder care and special needs disagreements among family members.

Active listening is a key, two-phase strategy used by trained Mediators. Between family members, active listening is more than just hearing and repeating (“I heard you say…Did I understand you correctly?”). Phase 2 of active listening is Acknowledging.

What does Acknowledging mean?

You may not like everything you heard from your parent, spouse, former spouse, or sibling. But you cans always find something in a family member’s statement that is their way of asking for acknowledgement. And then each family member should show appreciation through their acknowledgement reply.

An example:

Sister: “You have no idea what it’s like working full-time, managing my kids’ schedules AND making sure Dad gets to all his medical appointments, then following up with the doctors and prescriptions. How dare you question my judgment about the doctors! When do you think I have time to fill you in on what the doctor said, in addition to everything else on my plate?”

Brother’s acknowledgment response: “If I hear you correctly, this is a very stressful part of your day. I want you to know that I appreciate how you’ve managed Dad’s medical care and the stress this adds to your life. I live 1500 miles away so I can’t be there, but you are wonderful to do this for all of us.”

Acknowledging is a tool used by the neutral Mediator to manage tense and high conflict situations. After Acknowledgment, empathy may follow. The acts of recognizing and acknowledging family members can help shift from their firm confrontational positions (“I’m right, you’re wrong”) towards common interests, and, often are the first step to creating workable solutions.

If you would like to learn more about these self-help techniques, I recommend you read “Mom Always Liked You Best” (Elder Decisions, Boston, Massachusetts, available online at Agreement Resources, LLC).

If your family requires a neutral Mediator, please contact my office to learn about my mediation services, BPA Mediation, and visit www.bpamediate.com

For legal representation in elder law, Medicaid, estate and special needs planning and guardianship, visit www.bpaelderlaw.com

 

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Recap of my previous post: I introduced you to Mediation and recommended a self-help book, Mom Always Liked You Best: A Guide for Resolving Family Feuds, Inheritance Battles & Eldercare Crises,”. I also explained my role as a neutral Mediator through my company, BPA Mediation, to help resolve elder care and special needs disagreements.

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This quote from Stephen R. Covey may describe your family: “Most people do not listen with the intent to understand; they listen with the intent to reply.” (The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change)

For head-to-head family conflict, here is a mediation strategy from “Mom Always Liked You Best”:

The goal:

• Try to understand what your parent, sibling, spouse or other family member is trying to tell you, from their perspective.
  
• As a Mediator, I refer to this as ‘active listening,’ because you are really listening, not thinking about what you want to say next.

The process:

• All available family members who are involved in the dispute or disagreement gather in a quiet room, with ample time so the process is not rushed.
• Each participant – including the senior if this is an elder care issue that involves them – is given an equal opportunity to speak without being interrupted.
• After one family member speaks, each of the others repeat, in a positive way, what they think they heard that person say. For example, “I heard you say that you are unhappy with my decisions about bill paying and that I have not given you enough information for you to stay informed about this. Did I hear you correctly or did I understand you correctly?”
• If the person replies that you did not hear them correctly, the next step is for each family member to gather more information by asking the speaker ‘nonthreatening’ and ‘I’m not accusing you’ questions. As a Mediator, I use this technique to help mediation participants understand what it feels like to ‘be in the other person’s shoes.’
• When everyone in the room has enough information, take a break so each participant can think about how what they learned affects their own position or what they thought was happening prior to this discussion and the disagreement.
• This is the point where I, as a Mediator, would facilitate by asking each family member to take a step back from their ‘stand’ or position on the dispute or disagreement.

If your family requires a neutral Mediator, please contact my office to learn how my BPA Mediation services can help, and visit www.bpamediate.com.

Next blog: More self-help techniques for managing elder care and special needs disputes.

For legal representation in elder law, Medicaid, estate and special needs planning and guardianship, visit www.bpaelderlaw.com.

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“I’m right, you’re wrong.” Whether you’ve said this out loud to a spouse, children, senior parents, siblings, or just thought it, family conflict can become a part of our personal lives.

Often, when conflict escalates, tempers flare, people take sides, lawsuits are filed, costly legal fees chip away at savings, and family relations can be disrupted, altered or even irrevocably destroyed.

My professional advice: Stop the madness – and choose Mediation, the alternative way to resolve conflict.

What is Mediation?

Mediation is a process that brings disagreeing or disputing persons or parties together for facilitated conversations, which can result in a settlement or compromise of the disagreement or legal dispute. The person who acts as the neutral facilitator is called the Mediator.

What kinds of family issues can you bring to Mediation to avoid lawsuits and the associated high legal costs?

The issues suitable for Mediation fall into two categories:

• Elder care disagreements between siblings, spouses and other family members about health care decisions, caregiving, financial management, and guardian designation for incapacitated seniors; and
• Special needs disagreements between divorced (or divorcing) parents over visitation, future planning, and guardianship for intellectually disabled adult children.

Can you use a Mediator’s techniques before new disputes surface or existing disputes re-appear?

Yes. I recommend you read the popular book, “Mom Always Liked You Best: A Guide for Resolving Family Feuds, Inheritance Battles & Eldercare Crises,” by Arline Kardasis (Elder Decisions of Boston, Massachusetts), available online at Amazon.com and Agreement Resources, LLC.

My upcoming blogs will describe some of the tools you can try with your own family.

But, for families with mushrooming conflict, a neutral Mediator may be the best or only way to avoid costly litigation or to manage and shorten existing litigation in elder care, guardianship and special needs planning.

For more information about my work as a Mediator, BPA Mediation, please visit www.bpamediate.com.

For legal representation in elder law, Medicaid, estate and special needs planning and guardianship, please visit www.bpaelderlaw.com.

 

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If you follow an annual spring cleaning ritual, we suggest you add an estate planning and overall financial review to your “To do” list. Here’s an update on legal changes and common sense reminders to help you get started. 

New York State changed the inheritance tax laws in April 2014, increasing the tax-free threshold from $1 million to more than $2 million for persons who die after April 1, 2014. The threshold for taxation will increase again in 2015 to more than $3 million and continue to increase until 2017 when an individual must own more than $5 million before state and federal inheritances taxes must be paid.

For married couples, we recommend you still take advantage of flexible tax planning ‘Disclaimer Wills’ during the ‘transition’ period and maximize what can be passed free of inheritance tax on the second spouse to die. This is still an important part of tax planning.

What is a ‘disclaimer’ clause in a Will or Trust? It allows the surviving spouse to give up the right to assets or property in the estate and to place the income into a tax-shelter trust (called a Disclaimer Trust). When drafted properly, the Disclaimer Trust enables the surviving spouse to receive income from the trust for life and have access to the principal of the trust if necessary.

Remember, too, that Living Trusts do not save inheritances taxes without required tax language, such as the disclaimer language. If you wish to leave money or property to your favorite charity, charitable bequests reduce inheritance taxes. The charity must be recognized by the Internal Revenue Service in order for there to be a Tax Free Bequest in your will or trust.

Review your existing Powers of Attorney for financial management and Health Care Proxies for medical decision making to ensure they are current and your designated ‘agents’ are available and still willing to act on your behalf when needed. These are important advance planning directives. If you become ill or incapacitated to the point where you cannot manage your own financial affairs, you must already have these legal documents in place to legally empower your chosen agents. Only a qualified estate planning and elder law attorney can prepare and customize these documents properly to address your unique personal and family needs. As we frequently remind you, ignore advertisements for loose-leaf binders filled with ‘national’ estate planning documents. These are often not specific to New York State and can be detrimental to the handling of your finances or health care decisions in the future.

Only a qualified special needs attorney can counsel your family effectively on these estate planning matters. Call my office to arrange a consultation with me, as a special needs law attorney practicing on Long Island, to learn how proper estate planning can benefit you and your loved ones.

The Achieving a Better Life Experience Act of 2014, known as the ABLE Act, became a federal law in December 2014. The act is modeled on the 529 program for college savings accounts and will achieve several goals once the Treasury Department passes regulations. 

For your convenience, here is a summary of the features:

• The ABLE Act allows qualified accounts to be established for disabled persons whose onset of disability was before age 26. The disabled person must either be receiving SSI or Social Security Disability (or the derivative benefit from a parent of a disabled person called CDB – child disability benefit). There may also be a chance for persons who meet the disability criteria – but who are not receiving these benefits – to be certified as ‘disabled’ by filing a disability certificate with the IRS. The IRS form will be available when federal regulations are created. Check this blog for updates.
• The ABLE Act will allow anyone to contribute a gift to the established qualified account up to the tax-free maximum of $14,000 per year. Even a modest payroll deduction contribution of $15 to $25 per month could have a beneficial effect for your qualified disabled child. Note that the disabled individual can be the beneficiary of only one qualified account.
• The ABLE Act amends the Internal Revenue Code to allow a qualified state ABLE program, similar to the 529 program, to be exempt from income taxation. The extent of income tax savings on account earnings will vary by state.
• The qualified account can accumulate up to $100,000 even if the beneficiary is receiving SSI and Medicaid. This is especially noteworthy because SSI generally limits resources to $2,000. Under the new law, if funds in the account exceed the cap, the beneficiary would not receive the SSI cash benefit because their eligibility would be ‘suspended,’ but Medicaid benefits will continue. The law also says that upon the beneficiary’s death, Medicaid may recoup what was paid during their lifetime from the qualified account, similar to a pay back supplemental needs trust.

What can this qualified account be used for?

At the present time, the law says it can be used for “qualified disability expenses” such as education, housing, transportation, employment, and assistive technology. Regulations will eventually further explain this.

When can we set up these accounts?

Be patient! No qualified disability accounts under the ABLE Act can be established until after the federal regulations are created.

Are there other advantages?

While the ABLE Act will not eliminate the need for a special needs trust to protect an inheritance or accounts exceeding $100,000, the ABLE Act account does not have legal or trust administration costs and is therefore a good substitute for smaller trusts.

Where can I learn more information?

Only a qualified special needs attorney can counsel your family effectively on this matter.

Contact my office to arrange a consultation with me, as a special needs law attorney practicing on Long Island, to discuss the ABLE Act and how it may benefit your family’s unique situation.

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If you managed to decipher the Alphabet Soup of Agency and Services Naming in 2014, brace yourself for the new naming and acronym challenges taking effect in 2015.

Medicaid services for persons who are intellectually disabled is generally overseen by the Office of Persons with Developmental Disabilities (OPWDD). As with Medicaid for seniors for home care and nursing home services, Managed Medicaid is now part of OPWDD.

As the names of these programs keep changing, the end result is that advocates – legal, parents, and providers –- have expressed concerns as we enter 2015.

What was previously called “CSS and Self Direction” is now known as “Self Direction with Budget and Employer Authority”. The program – which encourages families to create an individualized plan for services (and, in theory, for housing) for their adult intellectually disabled child – is part of NY State’s “People First Waiver” for Managed Medicaid with CMS, the federal governing agency.  

Applications for initial services and planning go through the “Front Door”, which means that the applicant’s family must contact their local OPWDD regional office, now called the DDRO (formerly known as DDSO). Pay special attention to this hearty mix of acronyms, which are not yet updated on the OPWDD’s website at www.opwdd.ny.gov.

My professional advice is that the best source of information for New York State families is the New York Self Determination Coalition (http://nyselfd.org) and their online manual. This is a volunteer group of advocate parents.

What is the best role for a qualified special needs attorney in your planning?

The special needs attorney can help ensure that you understand and are accessing the appropriate resources and benefits (including SSI) for your disabled family member – regardless of their specific impairment.

And only an attorney can prepare a special needs trust. This is still the best option to preserve an inheritance for a family member, because Medicaid is expected to reduce services, particularly in the area of housing. There are many ways to write your wishes for managing the special needs trust into your Will or other estate planning documents, such as your own living trust.

Your family’s and your child’s situations are unique. Don’t let anyone tell you otherwise or try to convince you to settle for cookie-cutter planning.

All planning can and should be customized to meet your own family’s needs. Contact my office to arrange a consultation with me, as a special needs attorney practicing on Long Island.

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