Why did the teacher remove all desks from her classroom? What did the kids learn?

When the children arrived at Ms. Cothren’s class on the first day of school a few years back, they were surprised to see not a single desk in the entire classroom. (With permission from the superintendent, she had them removed.)

“Ms. Cothren, where are the desks?” the children asked.

“You can’t have a desk until you tell me how you earn it,” she answered.

Kids tried out various answers.

“Our behavior?” one suggested.

“No, it is not your behavior that earned you the right to sit at a desk,” Ms. Cothren said.

“Our grades?” another tried.

Nope.

Throughout the day, the same scene repeated itself. Children puzzled over why they had no desks, but no one could answer Ms. Cothren’s question. Local news crews gathered, wondering what this crazy teacher was doing.

Finally, in the last period of the day, Ms. Cothren told her students that throughout the entire day, no one had really understood how they earned the desks that ordinarily sat in the classroom. “Now I’m going to tell you,” she said.

She opened the classroom door. In walked an armed forces veteran in full uniform carrying a desk. He set it down and stood against the wall. Another veteran carried in a second desk, set it down, and stood against the wall.

In all, 27 uniformed veterans filled up the classroom with 27 desks.

“You don’t have to earn these desks,” Ms. Cothren told the students. “These guys did it for you. They put them out there for you, but it’s up to you to sit here responsibly, to learn, to be good students and good citizens, because they paid a price for you to have that desk, and don’t ever forget it.”

A lesson for all of us on Memorial Day.

(Source:  Snopes.com)

Law School Interns Help Out

Our legal secretary Donna Dean gets a kick out of watching Bailey Flask (left) and Allison Reinersmann (right) pose for their newsletter photo.

Two interns with an interest in elder law picked up some real life experience this past semester in our office.

Bailey Flask and Allison Reinersmann, then third-year law students at the University of Pittsburgh School of Law, got the chance to put their newly minted legal skills to work at Sykes Elder Law two days a week for several months.

“I feel I’ve learned more here than in many of my substantive courses,” Ms. Reinersmann said. “In the classroom you learn theory and here you learn how to practice. Having both is what makes a good lawyer.

Ms. Flask delved into veterans benefits for aid and attendance, working on applications and improving our checklists and processes. When she had completed her first application, she hand delivered it to the local Veterans Administration office in downtown Pittsburgh.

Working as an intern requires a student to give attention to some of the practical details of a law practice. For example, does the IRS require an employer identification number when a client establishes an irrevocable trust? Not always, Ms. Flask discovered, and backed up her research with excerpts from tax code regulations and excerpts from IRS instruction forms.

Ms. Reinersmann researched and wrote a detailed memorandum on the use of an irrevocable life insurance trust as a means to protect assets from Medicaid spend-down. She also drafted petitions to be filed in Orphans’ Court, worked on an appellate brief in a Social Security disability case, and researched the standards for requesting Medicaid planning in a guardianship case.

Ms. Flask recently landed a job with the Veterans Administration. She credited her work at the firm with making her more conversant about veterans’ legal issues during her interviews with the VA.

Ms. Reinersmann has returned to the firm this summer to help out part time while she studies for the bar exam.

VA benefits for healthy vet with ill spouse – a little known secret

It’s well known that veterans benefits for aid and attendance will help pay for long term care needed by a wartime veteran, or the widow or widower of one.

But what about Jane, who needs care in an assisted living facility and is married to Bill, a World War II veteran? Any help available there?

Quite possibly, yes!

It’s a little known fact that when a veteran is over the age of 65, the VA will presume a veteran is disabled for purposes of qualifying for a benefit known as the “low income pension.” If Bill qualifies for the full benefit amount – $1,291 a month – that extra will go a long way toward paying the cost of Jane’s care.

Bill should apply if: (1) he meets the usual requirements for low income pension benefits (modest household assets, other than dishonorable discharge, etc.), and (2) cost of care exceeds household income.

Even if household income is greater than the cost of care, but not by more than $1,291, it may still be worth their while to apply for partial benefits.

What are “exempt” or “excluded” resources for Medicaid eligibility in PA?

To be eligible for Medicaid, an applicant can own only a modest amount of “resources.” But some resources are exempt, meaning they will be excluded when determining eligibility.

Exact rules vary from state to state. Here are Pennsylvania’s rules on the most common exempt resources:

Home, at least up to $500,000 in equity.  Real property used as the principal place of residence by the applicant, a spouse, or dependent relatives is excluded, as long as the applicant, spouse or relatives live in the property. This exclusion also covers land and related outbuildings necessary to the operation of the home. 

If the applicant is institutionalized, the residence will remain excluded if the applicant states in writing that his or her intention is to return to the residence. The statement can be provided by a person with authority to act on the applicant’s behalf, if the applicant is incapable of providing the information.

Under the Deficit Reduction Act (DRA), enacted February 8, 2006, the allowed value of an applicant’s equity interest in the home is capped at $500,000, unless the applicant’s spouse, child under age 21, or disabled child is lawfully residing in the home. States can opt to increase that amount to $750,000, but Pennsylvania has not done so. An applicant can use a reverse mortgage or home equity loan to reduce equity interest.

Household goods and personal effects.  Household goods such as furnishings and equipment commonly found in a household are excluded. So are personal effects, including (but not limited to) clothing, jewelry, items of personal care, recreational equipment, musical instruments, and hobby items.  Items required because of a person’s physical condition, such as prosthetic devices, dialysis machines, motorized wheelchairs, hospital beds, and similar items are excluded.

Motor vehicle.  Pennsylvania regulations exclude only one motor vehicle for the applicant. If the applicant is married, the exclusion remains at one vehicle for the couple.  Other motor vehicles are counted at their equity value. 

Life insurance.  Life insurance that does not accumulate a cash value, such as term insurance, is excluded. As to life insurance that does accumulate a cash value, Pennsylvania regulations exclude up to a maximum face value of $1,500 for each insured person. “If the life insurance of an insured person has a total face value in excess of $1,500, only the cash surrender value in excess of $1,000 shall be considered a resource to the owner.” 55 Pa. Code §178.69.

Burial spaces.  An Operations Memorandum issued by the Department of Public Welfare in November 2003 provides that the value of all burial plots owned by Medicaid applicants will be excluded. The regulations specify that the burial space exclusion covers conventional gravesites, crypts, burial drawers, mausoleums, urns and similar repositories.

Irrevocable burial reserve. Burial reserves (also known as funeral reserves, funeral agreements, pre-paid funeral agreements, and burial funds) are excluded if they are deposited with a funeral director or financial institution under a written agreement providing that the funds cannot be withdrawn before the death of the named beneficiary.

The agreement may include such items and services as casket, cemetery plot, flowers, and obituary. Regulations exclude an amount that is not exorbitant.  DPW may consider a reserve exorbitant if it exceeds average local costs by more than 25%. If the amount in the burial reserve exceeds this amount, the excess amount may be considered reasonable if the applicant can demonstrate that the amount is not exorbitant for the person’s situation, and that the higher amount is needed for such things as cost of transportation for the body, certain costs for a priest, minister or rabbi who is a close friend or relative, and a reasonable gift to a church or a synagogue for use of facilities for services.  See, 55 Pa. Code §178.5(5)(ii).

Trade or business property essential to self-support. Real property or personal property is excluded if used in a trade or business, or by the recipient as an employee and is essential to self-support. These resources are excluded regardless of value.

Non-business property essential to self-support.  Property not used in a trade or a business is excluded if it is: (1) used exclusively to produce items for home consumption (such as cows supplying milk, chickens supplying eggs, or a garden plot used for fruits or vegetables); and (2) tools, equipment, uniforms and similar items required by an employer. 

Revocable burial reserve. If the burial reserve is revocable, an applicant may exclude up to $1,500, reduced by the cash value of certain life insurance policies. See, 55 Pa. Code §178.73(2).

Community spouse pension funds. IRA’s, 401(k)’s and other deferred compensation funds are excluded if owned by a “community” spouse — that is, the spouse of an applicant. See, 42 U.S.C. §1382b(a); 20 C.F.R. §416.120; 55 Pa. Code §§178.2, 178.5, and 178.61-178.84.

 Other exclusions.  Other, less common exclusions may also apply, including such items as disaster relief assistance, certain trusts containing assets of disabled individuals, and payments of the German or Japanese governments to certain Holocaust and World War II survivors. See generally, 42 U.S.C. §§1382b and 1396p(d)(4); 20 C.F.R. §416.1210; 55 Pa. Code §178.

Estate planning for a child out of wedlock: Advice for Arnold Schwarzenegger

When the media went into a frenzy this week over revelations of Arnold Schwarzenegger’s love child, I told myself I wouldn’t waste time following the story. But every time a news item appeared on the TV or radio, I was riveted.

I’ll try to redeem myself by letting it be the inspiration for a serious discussion about the estate planning ramifications of having a child out of wedlock. Since I pretended to give advice to Maria Shriver last week, it seems only fair.

The issue about “issue.” Wills, particularly those based on will forms used by lawyers, frequently use general terms such as “issue,” “descendants,” and “my children” to identify those who will inherit. Depending on the exact wording of the will, the jurisdiction where you die, and who does the interpreting, such a general term may or may not include a child born out of wedlock. 

So if Arnold had died a year ago and his will left some funds to vaguely described “issue” or “children,” Maria and her kids could have been surprised to find out the funds would need to be divided five ways instead of four.

Or perhaps Arnold might have phrased a general term in a way he hoped would include his love child, only to have the courts rule that it applied only to the children of his marriage. Looking on from the afterlife, Arnold might think that was a raw deal and wish he could travel back through time to redo his Last Will and Testament.

News coverage shows that Arnold has apparently provided well for his additional son. Presumably Arnold would want to provide for him after death as well. If that is indeed the case, Arnold should name that son specifically and spell out exactly what provisions he wishes to make.

But being specific raises a challenge in Arnold’s case. Until recently, his wife and children knew nothing about the other child. Morality issues aside, how do you keep an illegitimate child’s existence secret so that you can maintain your marriage and seek political office, but still make specific provisions in your will for that child? Which brings me to my next topic…

Husband/wife conflict. Those of us who counsel married couples in estate planning advise our clients that a husband and wife may have conflicting interests. If so, they need separate legal counsel. In most marriages, husband and wife see things the same way, are content to waive any possible conflict, and want to avoid the expense of hiring separate lawyers.

But in Arnold’s case, he would have needed his own lawyer for the past 14 years if he desired to make specific provisions for his out-of-wedlock son without revealing anything about it to his wife.

How he would have explained his need for secrecy to Maria is another matter. If she had known, you can bet she would have said “Hasta la vista, Baby!” a lot sooner.