These are some of the most frequently asked questions about elder law and planning for aging. I encourage you to click on your question below to learn more.
General Topics
- What is Elder Law?
- What Does it Mean to Have a Personal Plan?
- Do all elder law attorneys practice in all areas of elder law?
- Why consult an elder law attorney?
Medicaid / Nursing Home
- What is Medicaid Planning?
- Activities of Daily Living
- What will happen if my mother has to go to a nursing home?
- What can I do to give my mother help even in the nursing home?
Powers of Atorney
- What is a power of attorney?
- Who can create a power of attorney?
- Who may act as an agent under a power of attorney?
- What is the difference between a general and a limited power of attorney?
- How does an agent use a power of attorney?
- What are the formalities of signing a power of attorney?
- When does a power of attorney become effective?
- What is a "durable" power of attorney?
- Should I have a general power of attorney?
- What is the main reason for having a general power of attorney?
- Should I have a power of attorney for health care?
- How does a power of attorney terminate?
- Under a power of attorney, can my agent make a gift on my behalf?
- Must third parties honor a power of attorney?
- Are there disadvantages of a power of attorney?
Health Care Proxies & Living Wills
Funeral & Burial Arrangements
Long Term Care Insurance
Guardianships/Conservatorships
- Are there alternatives for managing property when a person becomes incapacitated?
- What is a guardianship (sometimes called a conservatorship)?
- What are the disadvantages and advantages of a guardianship?
Trusts - Living, Revocable and Irrevocable
- Does a Revocable Living Trust provide asset protection?
- What kind of trust provides asset protection?
- What is a Living Will?
- Why is a Living Trust usually better than a power of attorney?
- Why should I consider a Living Trust?
- Who is the trustee of my Living Trust?
- Who should be designated as successor trustee of my Living Trust?
- What is a Special Needs or Supplemental Needs Trust?
- Will my income taxes change if I create a trust?
- Do property taxes change if I create a trust?
- How are the assets put into my trust?
- Are any assets left outside of my living trust?
- If I transfer real estate to my trust can the bank call my loan?
- What is a Pet Trust?
Joint Ownership Issues
- What about the transfer of share in a condominium or cooperative apartment?
- Should I put my home or account in joint ownership with my child?
- Can a married couple use joint tenancy until one spouse dies, then set up a trust for the survivor?
Tax Questions
Elder Law concerns planning for aging. It is the practice of law that serves both young and the elderly. You may be in your 30s or 40s, concerned about estate planning for your children, and at the same time be confronted with concerns about an elderly parent or other relative. Or you may be in your 60s and 70s or older and concerned about how to protect your assets for future generations and alleviate the concerns and pressures of caring for you that will ultimately fall upon your children or others in your circle of family and friends.
Elder Law addresses many different planning-related concerns, such as: including Medicaid Planning and Applications, Estate Planning, Trusts, Wills, Powers of Attorney, Living Wills or Revocable Trusts, Assisted Living and Chronic Care or Nursing Home arrangements, and when necessary a Guardianship/Conservatorship proceeding.
Elder Law deals with disability planning, in which you would want to plan for the potential need to delegate authority in the event of incompetency or incapacity. It is important for attorneys dealing with the elderly to have a unique understanding of the laws that may have an impact on the elderly. It is important that you hire an attorney who regularly handles matters in your area of concern and knows about the other areas of law that might impact this decision. It is also equally important to choose an attorney who you are comfortable talking with and who seems to share an empathy of the elder's real life problems.
The experienced Elder Law attorney will also be able to address estate planning options when there is a family crisis arising from the need for chronic care for an elderly or otherwise disabled family member. Crisis-driven planning may permit fewer planning options, but you may have options nonetheless.
What Does it Mean to Have a Personal Plan?
A Personal Plan is your roadmap for your family and friends so that they can help you when you need it most. Personal planning must be tailored to your needs, whether you are single, or in a marriage or other domestic arrangement, or whether you have children, including the four-footed kind that we consider members of the family.
Generally, this planning includes the following documents:
- Will
- Power of Attorney
- Health Care Proxy
- Revocable Trust (Living Trust) and/or Irrevocable Trust
- Living Will
- Directive for Disposition of Remains
A Personal Plan includes a Last Will and Testament (sometimes confused with a "Living Will"), which is your statement of what you want to happen with your assets upon your death. Whether you are 18 or 88, you should have a Will. An estate can have different meanings for tax purposes than it does for the distribution of your assets after your death. Planning for the distribution of your assets, whether you distribute these during your lifetime or not until your death, gives you a measure of control.
If you die without a Will, then your assets are distributed to your "distributees" according to the New York laws of intestacy, which may not accomplish your objectives. Furthermore, if you die without having prepared a Will or a trust, you leave your family with a difficult burden at an already difficult time.
If you have a Will at the time of your death, then the person you named as your executor will petition the Surrogates Court for Letters Testamentary, and then proceed to gather and administer your assets, pay the liabilities of your estate, and then distribute the net assets as you have directed in your Will.
If you die without a Will (intestate) the law requires the appropriate person or persons to seek Letters of Administration, which involves petitioning the court for the authority to do for your estate what a nominated executor would do if you had a Will.
The Executor of your Estate has what are known as "fiduciary duties" to the Estate, rather than to any particular beneficiary of the Estate. Generally, a Will specifies that the testator waives the requirement for the Executor to obtain a Bond (to insure the Estate against a breach of fiduciary duties, rather than against the result of actions taken in good faith). An Administrator will almost always be required to obtain a Bond from an insurance company, and this is an additional cost to the Estate itself. I always recommend that you name not only your first preference for Executor (or two people who will serve as co-Executors) but that you also consider your second and even third preference just in case the first person you choose is unavailable or, by the time they would be required to serve, unwilling to do so. You should always discuss the appointment with your preferred Executors to be sure that they are both willing to serve and understand what they are being called upon to do. Although a family member is typically among the preferred Executors, this is not necessarily the case. The most important requirement is that the person be capable of understanding their role and carrying it out diligently, responsibly and efficiently.
Beneficiaries under the Will often include close family members, but the definition of one's "family" may have grown to include close friends, and others whom you care about. Sometimes, there are one or more members of your close or extended family whom you may choose, for very personal reasons, to either exclude as a beneficiary or to otherwise limit their share in relation to the testamentary gifts you bestow upon others, as difficult as it may be to make these determinations, you are always free to choose when you are doing a Will. If you do not execute a Will, then New York State law dictates who will be a beneficiary of your Estate. I also encourage clients to consider their relationships with various charities, and ask whether one or more charities will benefit under the Will. Not only will a charitable gift be a legacy, but it also may be deductible from your gross estate for purposes of calculating Estate taxes due at death.
Revocable Trusts, also frequently called "Living Trusts", are an alternative to testamentary gifts. A Revocable Trust is, as the name implies, a trust that can be revoked by the "grantor" (the person making the transfer to the trust). Typically, the Revocable Trust is also a so-called "grantor trust", which means that income from the trust continues to be taxable to the grantor. The grantor of the Trust can retain various powers over the Trust and the property to ensure that the Trust has "grantor trust" status for tax purposes. The grantor can even be the trustee.
A Revocable Trust becomes irrevocable upon the death of the grantor, so that any assets in the trust then pass to the beneficiaries of the trust immediately. Many people view this as an advantage because it avoids the time and expense of probating the Will before the property can be transferred to the beneficiary. The property in the trust is still considered part of the grantor's taxable estate, however. It you establish a Revocable Trust remember that property you want to be in the Trust must actually be transferred to the Trust (eg, the deed to your home must be changed from your name to the name of the Trust). If you later revoke the Trust then you have to remove the property from the Trust. Even if you establish a Revocable Trust, you still need to have a Will just in case there is, at the time of your death, any property that has not already been transferred to the Trust (otherwise that property would pass under the law as if you died without a Will or a Trust). The Will can be a "pourover" Will in which the property that was outside the Trust goes automatically into the Trust, or it can provide entirely for gifts outside the Trust.
Finally, just as the position of Executor under your Will is a very important role, the position of Trustee under the Trust carries with it fiduciary duties to the Trust. This responsibility should be placed in someone who is capable of understanding the requirements of the role, and who will carry out those responsibilities diligently, responsibly and efficiently.
Do all elder law attorneys practice in all areas of elder law?
Many, but not all, Elder Law attorneys practice in several or all of these areas. You will want to hire the attorney who regularly handles matters in the area of concern in your particular case and who will know enough about the other fields to question whether the action being taken might be affected by laws in any of the other areas of law on the list. For example, if you are going to rewrite your Will and your spouse is ill, the attorney should be able to address Medicaid Planning in the context of your overall Estate Planning.
Why consult an elder law attorney?
Attorneys who practice in the field of Elder Law work with multigenerational issues. They work with the elderly, and are able to empathize with some of the true physical and mental difficulties that often accompany the aging process. Their understanding of the afflictions of the aged allows them to determine more easily the difference between the physical versus the mental disability of a client. They are more aware of real life problems, health and otherwise, that tend to crop up as persons age. They are tied into a formal or informal system of social workers, psychologists and other elder care professionals who may be of assistance to you. All of these things will hopefully make you more comfortable when dealing with them and ease your way as you try to resolve your legal problem
A power of attorney is a document authorizing someone else (your agent) to act on your behalf (the principal). The purpose of giving someone such a power in connection with your estate planning is to enable the agent to act on your behalf when you cannot act for yourself.
Who can create a power of attorney?
Generally, any individual can create a power of attorney if over 18 years of age, a resident of the state in which it is created, and legally competent.
Who may act as an agent under a power of attorney?
In general, an agent may be anyone who is legally competent and over the age of 18. Usually, it is a family member such as a spouse or a child. More than one person can be named as an agent. However, sometimes naming two or more individuals to act together can prove inconvenient, particularly if a power of attorney must be exercised promptly. A better course is to name one individual as agent and then another as an alternate
What is the difference between a general and a limited power of attorney?
A general power of attorney authorizes your agent to do almost everything on your behalf which you could do for yourself. A limited or special power of attorney authorizes your agent to perform only certain acts specifically listed in the document
How does an agent use a power of attorney?
Your agent presents the power to the other party involved in the transaction and signs any necessary documents needed for such transactions on your behalf. Your agent signs "Your Name, by His or Her Own Name, Attorney-in-Fact for Your Name."
What are the formalities of signing a power of attorney?
Requirements vary from state to state, but in New York State signing the power in the presence of a notary is necessary.
When does a power of attorney become effective?
This depends upon what the power says. It can be made effective at the time of signing or it can become effective at the time of your incapacity.
What is a "durable" power of attorney?
All powers of attorney done in connection with estate planning are "durable." A durable power of attorney is simply a power of attorney that remains effective even if you become incapacitated. Generally, unless the power of attorney document specifically indicates it is durable, it is not durable and will terminate upon your incapacity. A non-durable power of attorney would, of course, be useless in connection with estate planning or disability planning
Should I have a general power of attorney?
Yes. Everyone doing estate planning should execute a durable general power of attorney for financial, property, and legal affairs. This document is also often used in conjunction with a revocable living trust to enable your agent to transfer your assets into your trust in the event you become disabled. A general power of attorney can be made effective immediately upon being signed or can become effective at the time of your incapacity, which is also called a "springing" power of attorney.
What is the main reason for having a general power of attorney?
A general power of attorney is a much better way to deal with incapacity than a guardianship or conservatorship. If you become disabled, A general power of attorney authorizes your agent to act on your behalf and sign your name to financial and/or legal documents. Having a general power of attorney will generally avoid the need to go through the time consuming, expensive, and publicly embarrassing process whereby someone has to go to court to have you declared mentally or physically incompetent and then seek appointment to serve as your legal guardian and/or conservator subject to ongoing court supervision
Should I have a power of attorney for health care?
Yes, it is equally important to have a health care power of attorney, to make decisions with respect to your medical care in the event that you are physically or mentally unable to do so, as certified by two physicians. This document includes the type of provisions that used to be in what was commonly called a "Living Will," allowing you to indicate your wishes concerning the use of artificial or extraordinary measures to prolong your life artificially in the event of a terminal illness or injury. You will also use this document to indicate your wishes with regard to organ donation, disposition of bodily remains, and funeral arrangements.
How does a power of attorney terminate?
Death revokes a power of attorney. You may also cancel your power of attorney by signing a revocation. The best way to revoke a power of attorney is to destroy all copies. If the power is a non-durable power of attorney it will terminate upon your incapacity, while a durable power of attorney survives your incapacity.
Under a power of attorney, can my agent make a gift on my behalf?
Yes, but your power of attorney must specifically authorize your agent to make gifts from your assets to persons whom you would likely make gifts. This is one area in which a power of attorney prepared by an elder law attorney may be drastically different from a power of attorney prepared by an attorney who only does estate planning.
The power of attorney prepared by an experienced elder law attorney will contain special provisions to permit special planning, such as Medicaid planning, on your behalf. These special powers for the agent may include the creation of trusts as well as gifts that would transfer your assets in a manner consistent with your best interests and your estate planning objectives. If, for example, you needed nursing home care, your agent could undertake to protect some of your assets from having to pay for that care, and at the same time enable you to qualify for that care.
Must third parties honor a power of attorney?
There is no way to force a third party to accept a power of attorney without going to court, although in New York State financial institutions are required to do so as long as the power of attorney appears to have been properly executed.
Many banks will require you to complete their own forms to authorize your agent to write checks on your account, so it is advisable to inquire as to whether your banking institution requires such forms that can be completed in conjunction with executing a power of attorney.
Although a general power of attorney may authorize the agent to handle tax matters, [the IRS generally may not honor any power of attorney that does not specify the tax matter and the tax year at issue]
Are there disadvantages of a power of attorney?
Third parties may not recognize your power of attorney, although in New York State financial institutions are required to do so as long as the power of attorney appears to have been properly executed.
It can be difficult to revoke a power of attorney, especially if your agent has given copies to third parties that have honored it.
The agent can reach your assets without court approval or supervision. Therefore, it is imperative that you select an agent with great care and have tremendous confidence in that individual.
Are there alternatives for managing property when a person becomes incapacitated?
There are several. One a court-supervised proceeding referred to as a guardianship or conservatorship. This is not an appealing option to most people. One type of alternative is the use of a living trust where assets are funded into the living trust. However, a power of attorney is still essential even if you have a living trust. A person who has already become mentally incapacitated cannot create a trust, although their agent under a power of attorney may be able to do so if the document allows it.
What is a guardianship (sometimes called a conservatorship)?
This is a court supervised proceeding which names an individual or entity to manage the affairs of an incapacitated person. A guardianship may also include the duty to care for the incapacitated person.
Are you caring for someone who is no longer capable of making their own decisions? Is your family member or friend confused to the point that they are at risk of making dangerous financial commitments or decisions? Are they failing to take care of themselves, or failing to eat or seek medical treatment? Are they at risk of injuring themselves, or are they suffering from a lack of care and unwilling to receive help? If someone you care for becomes incapable of making decisions for themselves, then what? If they have a valid Power of Attorney, their agent can exercise the powers granted for paying bills or prosecuting a legal action for the principal. Without Power of Attorney, or if the Power of Attorney does not include the powers necessary to enable the caretaker to fully handle the necessary personal business of the principal, then the caretaker may have to petition the court to become "guardian of the property" of the principal. Further, if the incapacitated person is also incapable of making appropriate health care decisions for themselves, or has become neglectful of their health and welfare and become at risk of injuring themselves, then the caretaker may also petition the court to become "guardian of the person" of the principal.
Guardianship over a person or their property is a very significant step that is recognized as reducing the personal liberty of the incapacitated person, but in the interest of their welfare. It is a decision that the Court does not take lightly. A guardianship proceeding requires the person seeking guardianship to prove that the "alleged incapacitated person" is indeed lacking the mental capacity to make decisions that are appropriate for their financial or personal welfare. New York State's Mental Hygiene Law, Article 81, governs guardianship proceedings.
Article 81 of the NYS Mental Hygiene Law was adopted in 1993 to enable the court to determine what powers the caretaker must have to protect the person and the property of the incapacitated person, and yet interfere as little as reasonably possible with that persons "right to self determination". A guardianship action is brought in Supreme Court or County Court, although under certain circumstances involving property management the action may be brought in Surrogates Court. Generally, the action must be brought in the county in which the allegedly incapacitated person resides or is present.
The court requires "clear and convincing" evidence - the highest threshold in civil cases - to be presented that the principal is likely to suffer harm as a result of the incapacity to care for his or herself, and that he or she does not understand the consequences of his or her incapacity. Sadly, sometimes people we care for seem to be the most obstinate when they can no longer clearly make decisions for themselves. However, just because someone is eccentric, or their opinions and preferences are unconventional, certainly does not mean they are incapacitated!
Article 81 requires the court to look carefully at the allegedly incapacitated person's functional limitations, and if those limitations indicate that the person is at risk of neglect by him or herself or others, to appoint a guardian with the power to care for the person under the least restrictive circumstances.
Why not let caring for you become someone else's problem? Because if the person or persons trying to care for you have to petition the court for guardianship of you, and they succeed in proving that guardianship over you is necessary, the cost will ultimately be paid for out of your own assets and the person awarded guardianship might not be the person who you would have ed. Why leave it for others to decide?
Caring for our loved ones after they have become incapacitated can be a complex and legally troubling task. With so many difficult financial and health related decisions to be made, having an effective guardian in place can limit the time it takes to make important choices.
What are the disadvantages and advantages of a guardianship?
A primary disadvantage to a guardianship is that it is a public proceeding, thereby exposing the incapacitated individual to embarrassment as the details of their incapacity are discussed at length. It is also expensive, and is a restrictive procedure. In addition, there is no guarantee that the end result will be in accordance with the incapacitated person's wishes, and someone unacceptable to the incapacitated person could be placed in charge of his or her affairs. A major advantage to a guardianship is that the courts watch every move the guardian makes in relation to the assets. Therefore, this provides increased protection it also establishes the authority of a guardian in relation to third parties. However, ongoing court supervision also increases the expense of maintaining the guardianship.
Does a Revocable Living Trust provide asset protection?
During the lifetime of both spouses there is no asset protection provided by a revocable living trust. However, there may be some protection for the survivor after the first spouse dies. The trust can also be created to provide creditor protection for other beneficiaries of the trust.
What kind of trust provides asset protection?
Only an irrevocable trust provides asset protection because the property, once placed into the trust, no longer belongs to the grantor, or creator, of the trust.
A living will, more often called an Advance Directive or Advance Medical Directive, is a document normally incorporated into a Health Care Proxy in which you give directions for life sustaining treatment should you become unable to communicate your wishes.
Why is a Living Trust usually better than a power of attorney?
A Living trust is often recommended to clients as the key document in their estate plan. One reason for this is that the living trust is normally the best method for managing assets during incapacity. A major advantage of the living trust over the power of attorney is that a trustee has actual title to the assets and therefore third parties must deal with the trustee as the owner. An agent does not have title and hence third parties may refuse to deal with the agent. This is a particular problem if the power of attorney was not signed in the last year, because some financial institutions refuse to honor powers of attorney that are more than a year old.
Why should I consider a Living Trust?
Not only does a Living Trust provide for the disposition of your property (like a Will), but it also means that the property in the trust can be distributed without the burden and expense of a probate proceeding, which is necessary for the Will.
Who is the trustee of my Living Trust?
While you are alive, you may act as trustee. For married couples, either one or both spouses may act as trustee or co trustees. The successor trustee is an individual whom you designate to be in charge of your trust in the event of disability or upon death.
Who should be designated as successor trustee of my Living Trust?
You will need to designate one or more successor trustees. These can be individuals, such as family members, trusted friends, trusted professionals, or you could designate an institution, such as a bank or professional trust company. Individuals may predecease you, while an institution will (most likely) still exist at the time of your death. Institutions provide the benefit of experience in money management and trust administration, while family members and close friends are more "personal" and have first hand knowledge of your desires. If you choose an individual, the individual should have some business sense, or you might wish to name an individual and a professional trustee as co-trustees. The downside to co-trustees is the possibility of disagreement.
What is a Special Needs or Supplemental Needs Trust?
Will my income taxes change if I create a trust?
Income earned on the assets in an revocable Living Trust does not change your income tax liability so long as it is a true "grantor trust". However, income earned on the assets in an irrevocable trust, unless entirely paid out of the trust during the year in which it was received, is taxable at the trust level, and the rate of taxation is generally higher than your individual tax rate.
Do property taxes change if I create a trust?
Generally, property taxes remain the same when real estate is transferred into a Living Trust, although laws vary from state to state and county to county. Applicable state law is determined by the location of the real property, and needs to be reviewed before any transfer is made.
How are the assets put into my trust?
The transfer of assets into the trust is a process called "funding" the trust. Funding a trust entails transferring assets you own in your own name into the name of your trust. For certain transfers, such as real estate, our firm transfers and prepares the documents for you to sign and arranges for the governmental filings required. However, in the case of banking and brokerage accounts, you arrange for these to be re-titled to the trust through documentation provided by the financial institution. If the trust is not funded properly, then the assets may not actually be transferred, and that would defeat your objectives.
Are any assets left outside of my living trust?
Clients typically do not put their entire checking account in the name of the revocable living trust, although this can be done. Certain assets must not be placed into the trust, which as IRAs and pension plans, because this transfer to the trust would be a taxable event just like any withdrawal. It is important is to coordinate the appropriate beneficiary designation with your overall estate plan. This is a complex area of planning and must be based on each person's individual family circumstances and size of estate.
If I transfer real estate to my trust can the bank call my loan?
Enacted as part of the Garn St. Germain Depository Institutions Act of 1982 (P.L. 97 320; 96 Stat 1501) a due on sale clause can not be enforced on a "transfer into an inter vivos trust on which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property." This exemption applies to residential real property containing less than five dwelling units {12 USC Sec. 1701j 3(d)}. The regulations list that the borrower in this type of situation must remain the beneficiary and occupant of the property {12 CFR 591.5(b)(vi)}. However, "occupancy" is not defined. Therefore, prudence suggests notifying the lending institution before the transfer.
What about the transfer of shares in a Condominium or Cooperative Apartment?
It is essential to check the rules of your condominium or coop before transferring any shares to be sure that the transfer is permitted. Generally, just like with the sale of your condo or coop, management approval is required and there may be transaction-related costs imposed.
Should I put my home or account in joint ownership with my child?
Joint ownership serves several purposes, but is not necessarily the best way to do your estate planning. There are several concerns.
Putting your child's name on the title to your property will avoid probate because the account passes directly to your child, and does not go through probate. However, if your child predeceases you or becomes disabled, you have not accomplished your estate planning objectives. If your child becomes disabled then the assets in the account may hinder his/her ability to obtain certain governmental benefits.
If you need to apply for Medicaid benefits within five years after adding a joint owner to certain assets, your having added a joint owner may result in a Medicaid penalty period if the joint owner has actually benefitted from the account by withdrawing assets.
Creditors of your child will be able to reach the joint tenancy property to enforce claims against the child.
Adding someone as a joint owner and then permitting them to withdraw assests may also create a taxable gift with each withdrawal.
Gifting the account to the joint tenant with a right of survivorship may not be consistent with your ultimately desired estate distribution.
Adding someone else's name to your account may also not be consistent with your ultimately desired distribution.
Can a married couple use joint tenancy until one spouse dies, then set up a trust for the survivor?
Yes, but this unfortunately has several problems associated with it. There is no guarantee that the surviving spouse will have time to set up a trust after the first spouse dies or will actually get around to setting up a trust, regardless of the amount of time available.
How can I leave my estate to my spouse tax free?
An outright gift to your spouse is not taxable. A gift made at death qualifies for the unlimited marital deduction for estate taxes and, therefore, there will be no tax paid on the amount left to the surviving spouse. However, the Applicable Exclusion Amount, which can be used to reduce overall estate taxes to the couple, should be taken on the estate of the first deceased spouse as well as the second to die. The Applicable Exclusion Amount is per person, and is not doubled when the second spouse dies, so this tax-minimizing opportunity (currently $3.5mm in 2009) will have been lost unless it is used at the time of the first to die.
What is the annual gift tax exclusion?
The annual gift tax exclusion is an amount that can be given away annually without resulting in gift tax on the transfer. In the year 2009, the annual gift tax exclusion amount is $13,000 per individual recipient. There is no limit on the number of recipients to which qualifying gifts can be made, and they need not be family members. However, if you are elderly or disabled, be very careful about making gifts of any amount, because all gifts made in the five years prior to applying for Medicaid will be counted against you and will result in a period of ineligibility for Medicaid.
A pet trust is legal document that will provide for the care of your pet in the event you become disabled or die. A Pet Trust is either funded at the time you create it, or upon your death, and identifies who will care for your pet and how. These are frequently used in New York State, which recognizes that our pets are members of the family. The trustee and caretaker may be the same person. Ideally you should name at least one, preferably two or three, alternate caretakers in case your first choice is unable or unwilling to serve as your pet's caretaker. To avoid having your pet end up without a home, consider naming a sanctuary or no-kill shelter, such as your last choice.
Additionally, you may name a Trust Protector -- someone to enforce the terms of the trust. If you don't name a Trust Protector, one may be appointed by the court. In addition, any person having an interest in the welfare of the animal may request the court to appoint a person to enforce the trust or to remove a person appointed. You may create a pet trust either (1) while you are still alive (i.e., a "living" trust) or (2) when you die by including the trust provisions in your will (i.e., a "testamentary" trust). If using a living trust, it can be either a stand-alone pet trust or provisions that you insert into a comprehensive living trust done as part of your estate planning. A living trust that not only specifies the caretaker but also holds funds for care, avoids delay between your death and the property being available for the pet's care.
If you create a testamentary pet trust upon your death, the trust does not take effect until you die and your will is declared valid by a court ("probating the will"). Additionally, there may not be funds available to care for the pet during the gap between when you die and your will is probated. In addition, a testamentary trust does not protect your pet if you become disabled and unable to care for your pet.
You should consider many factors in deciding how much money to transfer to your pet trust. These factors include the type of animal, the animal's life expectancy, the standard of living you wish to provide for the animal, the need for potentially expensive medical treatment, and whether the trustee is to be paid for his or her services. Adequate funds should also be included to provide the animal with proper care, be it a pet-sitter or a professional boarding business, when the caretaker is on vacation, out-of-town on business, receiving care in a hospital, or is otherwise temporarily unable to provide personal care for the animal. You should avoid transferring an unreasonably large amount of money or other property to your pet trust because such a gift is likely to encourage your heirs and beneficiaries to contest the trust. If the amount of property left to the trust is unreasonably large, the court may reduce the amount to what it considers to be a reasonable amount.
The trustee is typically either a trust company or a family member or other individual you trust to manage your property prudently and make sure the beneficiary is doing a good job taking care of your pet. A family member or friend may be willing to take on these responsibilities at little or no cost. However, it may be a better choice to select a professional trustee that has experience in managing trusts even though a trustee fee will need to be paid. If you do name an individual, you should name at least one, and preferably two or three, alternate trustees in case your first choice is unable or unwilling to serve as a trustee. You probably also want to check with the person before-hand to be sure the persons you name as your trustees will be willing to do the job when the time comes.
You should name a "remainder beneficiary" -- a person or organization to receive any remaining trust property after your pet dies. Note that it is not a good idea to name the caretaker or trustee because then the person has less of an incentive to keep your pet alive. Many pet owners elect to have any remaining property pass to a charitable organization that assists the same type of animal that was covered by the trust.
What if the trust runs out of money? Hopefully the trustee or caretaker will be able to continue to care for your pet. However, if no money remains in the trust, and the trustee is not able to pay for your pet's care, then you can provide for a successor caretaker. If the original caretaker is unwilling or unable to continue to provide care, and the successor caretaker is too, then the trust specify the organization to whom you would like to entrust your pet if possible. No organization is obligated to accept your pet, however most no-kill shelters and rescue organizations have very dedicated staff and volunteers who will help your pet find a new home.
(Andrea Lowenthal has three well-loved dachshunds, Harry, Max and Lily).
Planning for Aging includes Medicaid Planning, which involves protecting assets from having to be spent down in connection with entry into a nursing home and during residency there. Planning for Aging is an overall, intergenerational planning process, involving a review of your planning needs now and as you age.
We feel in crisis because we need help now. Can we still do any planning?
Crisis Planning is really just Medicaid Planning that does not begin until a person begins to need assistance with Activities of Daily Living (eating, dressing, bathing, toileting, transferring, and walking) or personal management issues such as cooking, cleaning, caring for pets, paying bills and managing finances. , We can help you plan even if you are already in a nursing home or receiving other long-term care assistance. However, if you have the opportunity to avoid a crisis, this type of planning should be started while you are still able to make legal and financial decisions, or can be initiated by an adult child acting as agent under a properly-drafted Power of Attorney.
What will happen if my Mother has to go to a Nursing Home?
Some parents have saved and sacrificed their entire lives and have a strong desire to leave a financial legacy for their children. With proper planning, this goal can be achieved while still qualifying for Medicaid.
With proper planning, a spouse who is able to stay at home can keep all or most of the couple's assets and all or most of the couple's income while Medicaid pays for the nursing home care. While Medicaid rules do try to protect the spouse from "impoverishment", few of us would like to come even close to the risk of impoverishment. That's why planning is so important.
For those who are single or widowed, asset protection means that not all of the assets will be assigned to provided minimum care that Mediciad would otherwise cover. Instead, with planning, there will be assets available to provide for certain quality of life matters that would otherwise not be enjoyed on the $50 personal monthly allowance permitted by Medicaid.
What can I do to give my Mother help even in the Nursing Home?
For instance, money that we protect for you in the process of getting you qualified for Medicaid can be used, once you are receiving Medicaid benefits, to provide you with an enhanced level of care and a better quality of life while you are in a nursing home. For instance, we will often encourage the families of our clients to use the protected assets to hire a private "sitter" or "helper" - someone to keep you company, help you with meals, etc., somewhat like a "surrogate daughter." Money that we protect for you in the process of getting you qualified for Medicaid can also be used to purchase services or items for you that are not covered by Medicaid, such as dental work, vision aids, hearing aids, incontinence supplies, personal clothing and toiletries, and haircuts.
A "living will" is a document that can be prepared to give specific directions to your health care proxy, or agent, as to how you should be cared for in the event that you are unable to make your own health care decisions and you are also suffering from a condition that has in all respects rendered you likely to not survive or to survive but under such conditions that you deem would constitute an unacceptable quality of life to be perpetuated by any further medical care or intervention. A "living will" is not yet a legally binding document in New York State (although the State Legislature is considering this). Instead, it is a document that is intended to provide "clear and convincing evidence" of your wishes under the circumstances specified by you. It is not a matter of choosing between life and death, but of deciding what kind of treatment or intervention you want under "end of life" circumstances as you define them. Virtually everyone is familiar with the case of Terry Schiavo and the sad and bitter battle that ensued between her husband and her parents over whether to withdraw certain life-sustaining treatment from her after she suffered what her doctors determined was irreversible brain death. The point is not who was right or wrong in that case, but rather that if Terry had put her wishes into a form that could be relied upon as "clear and convincing evidence" of her wishes, then those who loved her would not have suffered to stand in her place to decide. Each of you has this right.
A Health Care Proxy is a document that allows you to choose who will be your proxy, or agent, to make health care decisions for you if you are unable, because of incapacity, to make decisions for yourself. You always have the right to make your own decisions if you are capable of understanding your condition, the treatment or choices available to you, and the consequences of your decisions. If, however, you are unable to speak for yourself, or your condition has impaired your ability to comprehend your condition and the choices, then most people would prefer to know that someone they trust to take care of them would make those decisions for them with the advice and counsel of their health care advisors. By designating a proxy, or agent, they determine who that person will be if the circumstances require.
What is a Directive for Disposition of Remains?
In 2006, New York State enacted a new law permitting individuals to designate an agent to control the disposition of their remains. The form is frequently called "Designation for Disposition of Remains", although as a practical matter it also can include instructions for funeral and other post-death arrangements.
The Legislature adopted this law to give persons more control over decisions that might be made after they die. Just as with a Power of Attorney you can designate an agent to act on your behalf, or with a Health Care Proxy you can designate an agent to make decisions for you, a Directive for Remains and Funeral Arrangements permits you to designate the person or persons who will be your agent to receive your remains and carry out your funeral wishes.
You do not want to put these instructions into your Will because that document might not get read immediately after you die, and furthermore there is the risk that without it being submitted to Surrogates Court for the probate (or proving) process your loved ones will not agree on what should be done.
The law permits you to decide whom to invest with this important responsibility, and it also means that you can ensure that your loved ones know your wishes and have the authority to do what you want to be done after your death. A simple hand written note is not sufficient. There are certain formalities that must be followed to comply with the law.
If you do not designate an agent, the law names a hierarchy of people who have the right to control the disposition of your remains:
(a) surviving spouse
(b) surviving domestic partner
(c) any of the surviving children over 18 years old
(d) either of the surviving parents
(e) any of the surviving siblings over 18 years old
(f) a guardian appointed by the court or
(g) the fiduciary of the estate.
A "domestic partner" under this law is someone who:
(i) is formally a party in a domestic partnership entered into pursuant to the laws of the United States or of any state, local or foreign jurisdiction; or
(ii) is formally recognized as a beneficiary or covered person under the other person's employment benefits or health insurance; or
(iii) is at least eighteen years of age and dependent or mutually interdependent on the other person for support, indicating a mutual intent to be domestic partners. To prove this status you will need a number of original governmental and financial documents that establish at least six months of cohabitation.
As stated by Center for Medicare and Medicaid Services, "Long-term care is a variety of services that includes medical and non-medical care to people who have a chronic illness or disability. Long-term care helps meet health or personal needs. Most long-term care is to assist people with support services such as activities of daily living like dressing, bathing, and using the bathroom. Long-term care can be provided at home, in the community, in assisted living or in nursing homes.
According to CMS, it has been estimated that in 2009 "about nine million men and women over the age of 65 will need long-term care. By 2020, 12 million older Americans will need long-term care. Most will be cared for at home; family and friends are the sole caregivers for 70 percent of the elderly. A study by the U.S. Department of Health and Human Services says that people who reach age 65 will likely have a 40 percent chance of entering a nursing home. About 10 percent of the people who enter a nursing home will stay there five years or more."
(Response provided by Medicare.gov. For more information see www.medicare.gov/LongTermCare/Static/Home.asp)
What is Long Term Care Insurance?
Long term care insurance is privately purchased insurance. There are many different insurance companies offering this kind of insurance, and their policies vary greatly so you must compare terms very carefully. Depending on your age and financial circumstances, long term care insurance may be a good planning tool for you, or it may be either unnecessary and possibly unavailable to you.
As concisely written by the federal Administration on Aging: "Long-term care insurance is a type of insurance developed specifically to cover the costs of long-term care services, most of which are not covered by traditional health insurance or Medicare. These include services in your home such as assistance with Activities of Daily Living as well as care in a variety of facility and community settings.
There is a great deal of choice and flexibility in long-term care insurance policies. You can select a range of care options and benefits that allow you to get the services you need in the settings that suit you best. The cost of your long-term care insurance policy is based on the type and amount of services you choose to have covered, how old you are when you buy the policy, and any optional benefits you choose, such as Inflation Protection. If you are in poor health or already receiving long-term care services, you may not qualify for long-term care insurance, or you may only be able to buy a more limited amount of coverage, or buy coverage at a higher "non-standard" rate.
Long-term care insurance policies have a benefit period or lifetime benefit maximum, which is the total amount of time or total amount of dollars up to which benefits will be paid. Common benefit periods for long-term care policies are two, three, four, and five years, and lifetime or unlimited coverage. Other options between five years and lifetime/unlimited coverage are also available from many companies. Most policies translate these time periods into dollar amounts and do not actually limit the number of days for which they will pay for care - just the overall dollar amount that the policy will pay." See www.longtermcare.gov for more information about long term care insurance, including what it covers, what it does not cover, how much it costs on average, and what you must do to qualify.
(Long Term Care responses provided by the Department of Health & Human Services: http://www.longtermcare.gov/LTC/Main_Site/index.aspx).