Letting Software or Online Service Plan Your Estate: Is It Worth the Risk?

There are several websites that offer customized, do-it-yourself wills and other estate planning documents. These computer-based services appear to offer the consumer a cost-effective and convenient alternative to visiting an Estate
Planning or Elder Law attorney. Or do they? Is online estate planning worth the convenience and initial savings? How do the documents created compare to those that a qualified attorney would produce?

To answer these questions, ElderLawAnswers asked two experienced Estate Planning and Elder Law attorneys to evaluate three leading online will preparation and estate planning programs: Nolo’s Online Will, BuildaWill, and LegalZoom. Their findings and ElderLawAnswers’ conclusions are presented in a five-page whitepaper that is available for free on ElderLawAnswers website.

The conclusion: “We conclude that while online estate planning could possibly work for people who have little or no property, small savings or investments, and a traditional family tree, the significant remainder of the population should not rest easy using one of these programs and should instead consult with a qualified Estate Planning attorney. In other words, in all but the most commonplace Estate Planning situations (and only an attorney can determine what is “commonplace”), do-it-yourself estate planning programs can be a risky, and often quite costly, substitute for in-person planning with an experienced estate planning attorney.”

I encourage you to read the whitepaper and see for yourself. Common issues with these type of estate plans include oversimplification. For example they do not explain the complexities of naming too many decision makers to serve at the same time, nor do they explain why a minor child or an elder parent may not be a good choice to name as an agent. They often overlook tax laws. Its important to remember that each State’s probate laws and tax laws vary. Further, mixed marriage situations are never a good fit for these programs. Additionally, users may miss powerful opportunities to sheild a child’s inheritance or plan for a special needs child. Finally, there is the issue of liability. Who do you hold accountable if a mistake was made?

In my office alone, I have several consultations per month where I assist clients in backing out of poorly drafted, do-it-yourself estate plans, and into something that makes sense for them and their families. Its very important to remember that there are no one-size-fits-all when it comes to planning one’s estate but that the utmost care should be placed in choosing the right person (Estate Planning or Elder Law Attorney) to help you, and not the right computer program.

More Protection Than a Health Care Proxy Alone?! MOLST- a Pilot Program in Worcester

Some people think that Elder Law and Estate Planning attorneys are only useful further down the road. They think, “I’m healthy. I don’t need to worry about those things now.” Even while you are healthy, there is one document that everyone over the age of 18 should have in place: a Health Care Proxy (HCP). A health care proxy is necessary to ensure that someone, a health care agent, will be available to make medical decisions for you if you are unable to make them on your own because you are incapacitated. Currently, in Worcester County, another form is also worth considering: the Medical Orders for Life-Sustaining Treatment (MOLST) form. This medical order works with the HCP to inform your health care agent and your doctors what you actually want to happen in various circumstances.

In April 2008, the Massachusetts Health Care Quality and Cost Council (MHCQCC) issued its annual report recommending that Massachusetts establish a pilot program to improve communication between patients and clinicians, and other interested parties, regarding end of life treatments. The MHCQCC found that many patients nearing the end of life were unaware of the treatment options available to them, or, if patients had been aware of such treatment options and had discussed them with their doctors previously, nothing was in place to ensure that their preferences were honored. Therefore, the Massachusetts legislature enacted legislation in August 2008 establishing a demonstrative program for the MOLST process in one community in Massachusetts: Worcester. (Yay, Worcester!)

The MOLST form is fairly simple and easy to read; the most difficult part is actually making the decisions and putting them down on paper. The form is only two pages long, and only two sections must be completed in order for the form to be honored. These two sections are Section D (patient information – specifically who is signing the document on behalf of the patient) and Section E (physician information). In   Section D, it is possible for the patient, the patient’s health care proxy, or the patient’s guardian to sign on his or her behalf. If a guardian is signing for the patient, the guardian must ensure that s/he has the legal authority under the guardian appointment to do so. This may require consultation with the patient or guardian’s Elder Law attorney.

If any other section of the form is not filled out, the health care agent is not limited in his or her decisions for life-sustaining treatment for the patient. Sections A, B, C, and F ask the difficult questions regarding resuscitation, intubation and ventilation, hospitalization, respiratory support, dialysis support, and artificial nutrition and hydration. It is critical that you speak with a physician before making these decisions so that you fully understand the meanings of the terms used and the potential consequences. Once these sections are filled out, they must be honored by all health care professions in Massachusetts, where clinically appropriate. The MOLST form is different from a Living Will or another document expressing your “final wishes” because it carries more authority and is more likely to be honored. A Living Will or final wishes document is only used by health care professionals to keep your wishes in mind when making decisions about treatment. While the MOLST form is not currently legally binding, health care professionals are strongly encouraged by the state to honor it.

Finally, Section G simply asks for the contact information of the health care agent. There is also room on the form for other treatment preferences, in which you can more clearly articulate your wishes. There is an expectation that the form will be reviewed throughout the patient’s life so that if his or her preferences change, those preferences will still be honored.

View a sample MOLST form here.

MOLST in Massachusetts from Commonwealth Medicine on Vimeo.

When it Could be OK to Give Assets Away When Planning for Long Term Care (Nursing Home)

Not long ago, I posted a blog on gift transfers and their affect on qualification for MassHealth (Medicaid) for an institutionalized individual. Generally, transferring assets to dispose of property so that you qualify for MassHealth will not actually help you qualify because the state imposes a five-year “look-back” period, in which those assets are counted and used to assess eligibility for MassHealth. Fortunately, there are some exceptions to the general rule.

Under the Deficit Reduction Act of 2005, an individual may still be eligible for MassHealth if certain assets were transferred to specific individuals. One of your biggest assets is probably your home. You can transfer title to your home to the following individuals without it being counted and without subjecting you to the 5-year look-back period: (1) your spouse; (2) your child who is under age 21, or is blind or permanently disabled; (3) your brother or sister who has lived with you for at least one whole year prior to the day you entered an institution and holds an equity interest in the home; or (4) your “caregiver” child.

A “caregiver” child is a son or daughter that lived with you for the two whole years prior to the date you entered an institution and provided the care you needed to remain in your home. If you were healthy enough to live in your home without your child’s help, a transfer of your home to that child will not protect you from the transfer rules. All other assets can also be transferred without being counted or subjecting you to the 5-year look-back period if they are transferred correctly and fall within the other exceptions to the general rule.

Any and all assets can be transferred to your spouse or to someone else for the sole benefit of your spouse. Your spouse may also transfer any and all of the assets to someone else for the sole benefit of your spouse. This means that someone else would hold legal title to the property, but it would only be used for the needs and wishes of your spouse.

Assets may also be transferred to your child if he or she is blind or permanently disabled. You have the option of transferring such assets directly to your child or to a trust for the sole benefit of your child. Either way, these gifts would not be subject to the new transfer rules.

Finally, you may transfer any and all of your assets to a trust for the sole benefit of any disabled person under age 65. Under this exception, a disabled individual is someone whose mental or physical impairment is so severe that he or she will be unable to perform substantial gainful work in order to provide for him or herself. This mental or physical impairment must be expected either to result in death, or to last continuously for a period of at least one year. There is no statutory requirement that you be related to this disabled individual for your transfers to fall within the exception.

While exceptions to the general rule on transfers of gifts do exist, it is very important that you speak with an attorney before making any transfers to ensure that you will still qualify for MassHealth. The 5-year look-back period is a long time to wait to be eligible for the services you need.

No, You Can’t Just Give It Away! The Dangers of “Gifting” when Considering Long Term Care

Hardly a day goes by when I don’t have a client who tells me that they can give away a certain amount of money free and clear, avoiding look-back periods for long-term care planning. They inform me that their neighbor, friend, or cousin told them that this is allowable. I then have the unfortunate task of telling them that they are wrong and that most states that have enacted the Deficit Reduction Act. After February 8, 2006, the rules relative to gifts changed.

Regardless of the amount, any gift that is made is a transfer and is subject to a look-back period of five-years for MassHealth (Medicaid) purposes. This doesn’t mean that the State will take that money, but rather, that the State will not pay for the donor’s long-term care costs until the five-year look-back is exhausted, or in the alternative, until all the gifts that have been transferred are used to pay for the institutionalized person’s care.

The sum that most clients feel that can be gifted (erroneously) without a look-back is $10,000. This amount actually relates to a past year’s annual amount that could have been gifted on an annual basis to as many individuals as the donor wishes without the need to file a GIFT TAX return. This has NOTHING to do with the look-back period when applying for MassHealth (Medicaid) coverage of a nursing home. However, the exemption in 2010 for gift giving on an annual basis is $13,000 per donee per year. Again, this is only a tax amount gift, and is not a Medicaid or asset protection plan exempt amount. A gift of $13,000 from a parent to a child will constitute a non-taxable gift, but this gift will carry with it a waiting period of five-years relative to MassHealth (Medicaid) qualification.

Far too often, family, friends, and other non-professional advisors provide well-intended but erroneous advice that can lead to significant adverse consequences if relied upon. If in doubt, it is always appropriate to contact a professional accountant, geriatric care manager, attorney, or other financial advisor for the appropriate and up to date laws relative to gifts, Medicaid planning, taxes, etc.

If you are unsure about how to find a qualified elder law attorney contact the National Academy of Elder Law Attorneys.

I drafted a follow-up to this blog, dealing with the exceptions to the gifting rule. It can be found here.

This blog was modified from one originally posted by Attorney Hy Darling from Bacon Wilson, Attorneys at Law in Springfield, MA. Its original version can be found here.

Astor Matter Reminds Us that Trustworthiness is Essential When Nominating Substitute Decision Makers

Lately, the matter of Brooke Astor’s estate has been covered in the media. Like many people she had an estate plan in place which included a Durable Power of Attorney and Health Care Proxy, which nominated subsituted decision makers in the event she would lose the capacity to make important financial and/or medical decisions at some point during her elder years. She did not want to burden her family with obtaining a Guardianship and/or Conservatorship through the courts. She did end up suffering from Alzheimer’s disease and her son took over her financial powers. He just didn’t do a very good job…

The following is an exerpt from this week’s AZCentral.

Anyone who has signed a financial document has to be squirming a bit over Brooke Astor’s estate case.

Her son, Anthony Marshall, recently was convicted of stealing millions of dollars from Astor while she suffered from Alzheimer’s disease before her death. Although the case largely centered on a contested will purportedly signed by Astor, other estate-planning issues also came into play.

One was a financial power of attorney signed by Astor that gave Marshall authority to direct her affairs if she became incapacitated – and the means to steal from her.

The episode provides a wake-up call for people who use financial powers of attorney. These legal documents can be highly effective in ensuring that someone else will be around to handle financial matters for you if you’re alive but unable to do so – as in the case of mental incapacity.

A power of attorney can be as short as a page or much longer, depending on the detail desired. They’re often included with a trust, will, health power of attorney (addressing medical issues) and other estate-planning documents.

For all the benefits of using a power of attorney to avoid a potential court-supervised conservator situation, there are pitfalls, too.

In particular, you need to trust the person whom you designate to act on your behalf. And you should make sure he or she is responsible, diligent and reasonably astute.

“They really are documents that people should pay attention to,” said Denise McClain, a financial principal and attorney at wealth-management firm Lowry Hill in Scottsdale. “You’re potentially passing along a lot of power.”

Elder Mediation: A Great Option to Diffuse Family Tensions When Planning for Elder Care

Can’t we all just get along?  

I see it more and more and it really saddens me: families unable to “get along” when it comes to decision making for elder loved ones. It can be as simple as whether Mom and/or Dad need to meet with an Elder Law Attorney, to concerns over finances and inheritance issues, to whether siblings agree on who should serve as primary caregiver, and/or to whether assisted living/nursing home care is necessary.

Often as family members age, family dynamics can become more complicated. Conflicts that have simmered below the surface can boil up and make conversation impossible. Sometimes the elders are involved in the discussions, but unfortuntately sometime they are too far gone to meaninfully participate.

Either way, even the most harmonized family can sometimes hit a bad note or two and require some assistance.

(Dun, dun, dun, dun!) Enter the Elder Mediator. Mediation provides an opportunity for the Elder and all concerned members of the family to participate in creating a thoughtful plan for future. In most cases Elder Law Attorneys can act as Elder Mediators with certain issues. However the scope of the disagreements can often rest in other issues that are not related to the elder law topic. An Elder Mediator, working closely with your Elder Law Attorney, is trained to assist families in identifying the real issues, separating them from the crucial issues of planning for elder care, and developing the best plan of care.

National Public Radio has recognized the usefulness of elder mediation for families dealing with aging issues.

As baby boomers age and options for their care increase, we will all face many difficult choices concerning how we handle transitions during our elders’ declining years. Families will have to be able to evaluate resources, options and develop flexible strategies to support their elders. Even when not legally competent to make decisions, it is important to include an elder’s wishes and expressed preferences when putting a plan into place. Elder mediation is a rational first step for families to help them address their changing needs while enhancing problem solving/communications skills and avoiding messy litigation.

Elder Abuse Often Goes Unreported

Many elderly people rely entirely on family or other trusted individuals to help them. Whether it is for physical or emotional needs, as people grow older they tend to need more and more help from others. This dependence on caregivers or family members makes an older person more vulnerable to abuse.

For example, an older person relying on her children to provide meals, transportation and help her with financial decisions finds it difficult to complain when one of her children takes advantage of her. If, for instance, the child takes her money, hits her or neglects her care, the parent may be threatened with loss of support from the child if the parent complains. The child may also use threats of violence to keep the parent in line.

It is estimated that 5 to 10% of elderly Americans are suffering abuse. According to the National Committee for the Prevention of Elder Abuse, more than 750,000 persons aged 60+ were victims of domestic abuse and that an estimated 84% of incidents are not reported to authorities, denying victims the protection and support they need. Much attention has been focused on abuse in nursing homes but most of the elder abuse in this country is at the hands of family members or other caregivers in the home.

What about the unreported cases? It is suspected that 9 out of every 10 actual cases of elder abuse and/or exploitation go unreported. The majority of the victims were females between the ages of 60-89 and 60% of the perpetrators were family members/relatives, while 24% were non-related paid caregivers.

There are a number of reasons why incidents of abuse, neglect, or exploitation are not reported to Adult Protective Services or other authorities. One of the most common reasons is the victim’s fear of losing support. Many of the perpetrators are family members and the victim fears that reporting the crime will result in removal of the caregiver, as the perpetrator may face incarceration or may discontinue relations with the victim once accused, charged, or convicted. Many of these victims fear that by reporting abuse they will be left alone and expected to care for themselves, or they will be forced to live in a nursing home.

Many states, including Massachusetts,have implemented mandatory reporting laws to assist in the prevention of abuse, neglect or exploitation of vulnerable adults. Massachusetts law requires doctors, nurses, social workers, police and other emergency responders, elder outreach workers, directors of home health agencies, and certain other workers to report elder abuse. If any of these mandated reporters knows of elder abuse and doesn’t report it, that person can be fined. A mandated reporter must call to report the abuse right away, and must file a written report within 48 hours.

In non-emergency situations, one can call the local Aging Services Access Point (ASAP) and ask for Protective Services (Massachusetts Area Agencies on Aging (AAA’s) and Aging Service Access Points (ASAP’s).

Prevention can only occur if there is awareness, the statutes are adhered to, and any suspicions of abuse, neglect or exploitation of vulnerable adults are immediately reported to Adult Protective Services and/or law enforcement.