Courts extend estate tax, pension plan rights to same-sex couples
November 25, 2013
In recent months, courts have extended important elder rights to same-sex married couples.
Last summer’s landmark ruling by the U.S. Supreme Court in United States v. Windsor struck down a provision of federal law that excluded same-sex couples from the definitions of “marriage” and “spouse.”
Edith Windsor sued to obtain a refund of federal estate tax she had paid after the death of her spouse, Thea Spyer. Edith and Thea married in Canada in 2007, and their marriage was recognized by the state of New York, where they resided. Edith claimed she was entitled to a refund because of the exemption from federal estate tax available to surviving spouses, but the IRS denied the refund.
The Supreme Court ruled it was unconstitutional for the law to exclude same-sex couples from the definition of “marriage.” “The federal statute is invalid, for no legitimate purpose overcomes the purpose and effect to disparage and to injure those whom the State, by its marriage laws, sought to protect in personhood and dignity,” the Court held. “By seeking to displace this protection and treating those persons as living in marriages less respected than others, the federal statute is in violation of the Fifth Amendment.”
As a result, Edith was entitled to an estate tax refund of $363,053.
Following the Windsor ruling, a federal court in Pennsylvania ruled in favor of another same-sex surviving spouse who sought of the death benefits from her deceased wife’s pension plan.
Under the terms of pension plan, death benefits were payable to the surviving spouse unless she had signed a written waiver. Jean Tobits, who was considered the spouse of Sarah Farley under Illinois law where they lived, applied to receive Sarah’s pension plan death benefits after Sarah died from cancer in 2010.
The Pennsylvania-based law firm for whom Sarah worked also received a claim for death benefits from Sarah’s parents. The firm asked the court to resolve the competing claims.
Following the Windsor decision, the court held that Jean met the definition of a “spouse” under applicable federal law, since her marriage to Sarah was recognized as valid by the state where they lived. Since Jean had never signed a waiver, she was entitled by law to receive the death benefits of Sarah’s pension plan. (Cozen O’Connor, P.C. v. Tobits, et al.)
Currently, Pennsylvania neither permits same-sex marriages nor recognizes such marriages entered into in other states, territories, or countries. A lawsuit in federal court has challenged the constitutionality of Pennsylvania’s laws on this issue. The presiding judge has said the case may go to trial in June of 2014, according to Reuters. (Whitewood, et al. v. Wolf, et al.)
Can I be discharged from a nursing home against my wishes?
October 4, 2013
For what reasons may a nursing home discharge a resident?
The federal Nursing Home Reform Act of 1987 prohibits transfer or discharge of a resident by a skilled nursing facility except for the following reasons:
Failure to pay. A nursing home can discharge a resident if the bill isn’t paid “after reasonable and appropriate notice.”
However, if the resident is eligible for benefits – such as Medicaid – that would pay for the resident’s stay, and the resident has filed all necessary paperwork to apply for benefits, the nursing home must wait until the application process has been completed.
Health or safety. If the resident’s stay endangers the health or safety of individuals in the facility, that is another appropriate reason. A physician must document the endangerment in the resident’s clinical record.
Resident has improved. Sometimes a resident’s health “has improved sufficiently” so that “the resident no longer needs the services provided by the facility.”
Severe needs. At other times, however, “the transfer or discharge is necessary to meet the resident’s welfare and the resident’s welfare cannot be met in the facility.”
Ceasing operations. If the facility ceases to operate, it will obviously need to transfer or discharge its residents.
Prior to transfer or discharge, the facility must notify the resident, and if known, a family member or legal representative of the resident.
If discharge is because the resident has not paid or the facility will cease to operate, then the facility must give notice at least 30 days in advance. If it’s due to health improvement, 30 days notice is not required “where the resident’s health improves sufficiently to allow a more immediate transfer or discharge.” If due to severe needs, the facility may forego 30 day notice “where a more immediate transfer or discharge is necessitated by the resident’s urgent medical needs.”
The law attempts to balance the rights of various parties. On the one hand, the law attempts to ensure that nursing home residents are free from arbitrary and harmful discharge from care. On the other hand, nursing homes should not be forced to house a resident under unreasonable circumstances.
Nursing home residents’ rights
August 16, 2013
Filed under: Caregivers,Elder Law - General — admin @ 9:41 pm
Since 1987, the federal Nursing Home Reform Act has provided a number of important protections for residents of skilled nursing facilities. A few of these are:
Freedom from restraints. The act provides prohibits the use of “physical or chemical restraints imposed for purposes of discipline or convenience and not required to treat the resident’s medical symptoms,” as well as “physical or mental abuse, corporal punishment, [and] involuntary seclusion. Restraints may be imposed only to ensure physical safety and only on a written physician’s order.
Freedom of choice. The act ensures that residents have the right to “choose a personal attending physician, to be fully informed in advance about care and treatment, [and] to be fully informed in advance of any changes in care or treatment.”
Room change notice. A resident has the right to notice prior to any change in the resident’s room or roommate.
Confidentiality. The facility must keep a resident’s personal and clinical records confidential, and provide access to current records upon the request of the resident or his or her legal representative within 24 hours.
Privacy. A resident has the “right to privacy with regard to accommodations, medical treatment, written and telephonic communications, visits, and meetings of family and of resident groups.”
Protection of resident funds. A facility must “hold, safeguard, and account for” a resident’s personal funds, but “may not require residents to deposit their personal funds with the facility.”
Grievances. A resident has the right “to voice grievances with respect to treatment or care … without discrimination or reprisal for voicing grievances and the right to prompt efforts by the facility to resolve grievances the resident may have, including those with respect to the behavior of other residents.
A complete list and description of resident’s rights under the act may be found in 42 U.S.C. § 1395i-3, which you can read by clicking here.
Certified Elder Law Attorney (CELA) in Pittsburgh
August 12, 2013
As you may know, our Managing Attorney Andrew Sykes is certified as an elder law attorney by the National Elder Law Foundation (the only organization recognized by the American Bar Association to offer elder law certification).
To achieve the designation of Certified Elder Law Attorney (CELA for short), an attorney must meet a number of requirements:
- Pass a demanding written test
- Show experience with a broad range of elder law matters, such as estate planning, representation of fiduciaries (executors of estates, trustees, agents under power of attorney, and so on), advising on retirement, planning for public benefits (Medicaid, Medicare, veterans benefits, and the like), helping clients with health care directives (“living wills”) and questions of legal capacity, advocating for clients in court or administrative proceedings, and similar matters.
- Attend at least 45 hours of continuing legal education courses pertaining to elder law over a three-year period
- Produce references attesting to the candidate’s integrity and fitness to be certified as an elder law attorney
- Show membership in good standing in the bar, with at least five years of practice as an attorney
Of course, certification is only one factor to consider in choosing an elder law attorney. Other important factors include years and quality of experience, reputation among other attorneys and professionals, whether the CELA will be handling your matter personally, and intangible factors such as the attorney’s diligence, attention to detail, and problem-solving skills.
As of this writing, only 44 Pennsylvania attorneys have been recognized as a certified elder law attorney. Mr. Sykes helps clients as a CELA in Pittsburgh, where he has practiced law for more than 21 years and is a recognized leader in the elder law field.
Articles give tips on “Protecting Mom & Dad’s Money”
March 3, 2013
A detailed article in the January 2013 issue of Consumer Reports investigates financial abuse of the elderly “by neighbors, friends, employees, and relatives – the very people entrusted to care for and protect seniors.”
From the high profile case of philanthropist Brooke Astor, whose son Anthony D. Marshall was convicted of defrauding and stealing from her, to everyday occurrences across the country, the problem is widespread. “In a national study from 2009, 5.2 percent of older Americans said they’d been victimized by family members, and 6.5 percent said they’d been exploited by others,” the article said.
An article in the Washington Post in 2012 reported similar findings in a survey by the Investor Protection Trust, which found that “more than 7 million Americans – one out of five citizens over the age of 65 – have been victimized by a financial swindle.” The Post reported on a survey conducted by IPT, a nonprofit devoted to investor education:
“In a recent poll of 756 state securities regulators, financial planners, health-care professionals, social workers, adult protective services, law enforcement officials, elder law attorneys, and academics, IPT found that the top three financial exploitation problems identified by experts were: theft or diversion of funds or property by family members, followed by caregivers, and then financial scams by strangers.”
The Post article cautioned readers to watch for warning signs such as:
“∙Social isolation. Con artists look for seniors who seem lonely. Their desperation for companionship often makes them an easy target for exploitation.
∙Concerns about a caregiver. A senior may complain that she gave the caregiver if $50 for groceries that should have cost no more than $20 and didn’t get change back.
∙The senior complains that the son he gave his power of attorney who won’t tell him what’s going on with his finances. ‘It’s a red flag if you hear the senior say, “When I ask about my money the person says, ‘It’s too complicated, you really don’t want to know,’”’ [IPT chief executive Don] Blandin noted.”
Here are some additional red flags from Consumer Reports:
“∙Missing property, large unexplained withdrawals from bank accounts, or transfers between accounts.
∙Excessively large reimbursements or ‘gifts’ to caregivers or friends.
∙New authorized signers on a person’s bank account.
∙Changes in banks or attorneys.
∙Bank statements and canceled checks no longer coming to the person’s home.
∙Changes in spending patterns, such as purchases of items the senior doesn’t need.
∙Changes in documents such as a will or power of attorney, or a change in beneficiaries that the senior can’t completely explain or comprehend.”
Consumer Reports recommends precautions the elderly and their families can take. The first is:
“Hire the right professionals. Engage a CPA or certified financial planner to handle such concerns as how much money you can withdraw safely from retirement funds. Hire an estate-planning attorney with elder-law expertise to write your will and power-of-attorney documents; they can also craft trusts, which can limit relatives’ access to your money.”
Other recommendations from Consumer Reports include obtaining background checks for caregivers; shredding documents with identifying information; setting up direct deposit of checks and automated payment of recurring bills; listing and photographing valuables; and having financial institutions “send statements and alerts to a trusted person who has no access to any of your accounts to check for fraud.”
Best planning tips for IRAs, 401(k)s, and other retirement plans
February 14, 2013
Here are three tips I picked up at a talk by Natalie B. Choate, a Boston lawyer and author who is nationally renowned for her expertise in retirement benefits. She addressed a packed house of financial professionals at the Financial “Four”um in Pittsburgh a few months ago.
Many of her tips were quite sophisticated or applied in rare circumstances only, so I’m including only those that apply to a wide array of retirees. These tips are aimed at qualified retirement plans such as individual retirement accounts, 401(k)s, 403(b)s, and similar plans, which have rules different from “defined benefits” pension plans.
“If you do these three things,” Ms. Choate said, “you will be 95% of the way toward happy IRA ownership.”
Take your RMDs
Starting at age 70½, most plan owners need to start taking a required minimum distribution (RMD) each year. The RMD is an amount taken from a plan based on your life expectancy and the total amount you hold in all your plans. You need to request a distribution, which is then paid to you out of your plan and is taxable.
You can defer your first year distribution until April 15 of the next year. As Ms. Choate pointed out, deferral may make sense unless it puts you in a higher tax bracket.
The penalty for not taking your distribution on time is severe: an additional tax equal to 50% of the amount you should have taken.
So you really need to take your proper RMD each year.
Fill out your beneficiary form
One of the most valuable wealth-preserving features of IRAs and similar plans is the ability of your beneficiary to stretch distributions over many years (or in the case of a surviving spouse, the ability to roll it over and make it their own).
But your beneficiaries will have these abilities only if you do one thing: put your beneficiaries’ names on your beneficiary form.
Sounds simple, and it is, but it mustn’t be neglected. Without named beneficiaries, the retirement plan administrator may require your funds to go to your estate. In that case, all funds must be paid out in five years and your beneficiaries’ wealth-preserving advantages will be lost.
Be careful with rollovers and transfers
IRS rules allow you to transfer or roll over your funds from one plan to another, such as rolling over your 401(k) funds into your own IRA when you retire.
However, you must take care to follow some strict rules.
For example, if you retire and ask for a lump sum distribution of your 401(k) plan, you have 60 days to roll it over into an IRA. If you accomplish that within the 60 days, you keep all the many tax and savings advantages that come with these retirement plans. If you miss the deadline, those advantages are lost and you will have to pay tax on your whole lump sum distribution. (A better alternative in this example is to roll over your 401(k) to an IRA with a direct “trustee-to-trustee” transfer, meaning the funds go from one bank to another without being paid to you in the interim.)
Bad things happen with rollovers and transfer, Ms. Choate reminds us, so make sure you follow the rules to the letter.
Ms. Choate’s book, Life and Death Planning for Retirement Benefits, is widely considered the “Bible” of retirement plan law. It is available for order online at http://www.ataxplan.com/.
Son held liable for Mom’s nursing home bill: video
June 20, 2012
Following up our last post, here is a four-minute video explaining the recent Pennsylvania case holding a son liable –retrospectively–for his mother’s $93,000 nursing home bill: video
Lesson: encourage your parents to do advance long-term care planning with an elder law attorney. It is well worth the investment. They (and you) can’t afford not to.
Kids liable for parents’ nursing home bills – Part II
June 4, 2012
In a previous post, we explored the state law making adult children liable to support indigent parents who need long term care.
A recent Pennsylvania case reaffirmed these concerns.
In Health Care & Retirement Corp. v. Pittas (decided May 7, 2012), Pennsylvania’s Superior Court upheld a judgment of $92,943 against the son of an elderly woman who had resided in a nursing home. The nursing home had to show the son had the ability to pay the bill, the court said, but found sufficient proof because the son had yearly income of over $85,000 and had recently paid off a tax lien by making monthly payments of $1,100.
The court further held that the trial court need not consider other sources of income available to the mother, such as the mother’s husband, her two other grown children, or her pending application for Medicaid benefits. As a result, the one son sued by the nursing home was stuck for the entire bill, unless the mother’s Medicaid application was ultimately approved.
This case once again underscores the importance of having a plan in place to pay for long term care, protect assets, and avoid becoming a burden to family members.
Are kids liable for Mom & Dad’s nursing home bill?
December 27, 2011
You may be surprised to learn that Pennsylvania law provides that the spouse, parent, or child of an indigent person has “the responsibility to care for and maintain or financially assist” that person, and that this responsibility applies “regardless of whether the indigent person is a public charge.”
(There are two exceptions. A child is not liable for support of a parent who abandoned the child for 10 years while the child was a minor. No person is liable under this law if there is a financial inability to pay support.)
Before you panic, though, keep in mind that the state of Pennsylvania does not generally bring support actions against family members whose relatives have run out of money and qualify for benefits. (Whether the law would even be enforceable for that purpose is questionable.) Medicaid, veterans benefits, and other public benefits regularly assist in paying for long term care for seniors who lack the ability to pay.
But Pennsylvania’s support law has been used by nursing homes and assisted living facilities to hold family members responsible for the cost of care in certain circumstances.
One important factor is whether Mom or Dad reside in a nursing facility that is certified to receive Medicare or Medicaid reimbursement. Under the federal Nursing Home Reform Act, such a facility may not require someone other than the resident (such as a family member) to guarantee payment. A facility may require someone who has access to the resident’s income or resources to sign a contract to make payment from the resident’s assets, but such a person incurs no personal financial liability.
Facilities that are not certified for Medicare or Medicaid, such as personal care or assisted living facilities, have successfully sought payment from family members. In 2009, for example, Allegheny County Judge Stanton Wettick allowed an assisted living facility to bring a lawsuit against a son of one of its residents for payment under Pennsylvania’s support law. (To read opinion, click here and find page 284.)
Another important factor is whether a family member has signed any kind of agreement to be a “responsible party” (or some similar term) for payment. Such agreements are not always enforced by the courts, but facilities sometimes use them to insist on payment from the signer.
When helping a relative with admission to a long term care facility, be sure you understand your possible liability to help make payments. An elder law attorney can help you review admission contracts and discuss the financial responsibility you may incur.
“Assisted living” in Pennsylvania: terminology confusion ahead
December 17, 2011
Filed under: Aging,Elder Law - General — admin @ 4:38 pm
What does “assisted living” mean in Pennsylvania now?
It’s getting harder for consumers to know.
When I have visited assisted living facilities in the past year, I have been struck by the wide variation in the services offered. One place may offer a narrow range of services and expect its residents to be nearly independent, while another may keep residents who require help with most activities of daily living.
New regulations that took effect in the state in January appeared, at first, to offer a solution. Licensed “assisted living” facilities would have to offer certain core services. Facilities would also have to provide, or arrange for, certain “supplemental health care services” which would be “packaged, contracted and priced separately from the resident agreement.” Thus, consumers could compare facilities and prices more transparently.
A licensed facility would also have to meet certain requirements in its physical site, staffing, and training. So if you moved into a licensed assisted living facility, you would generally know what you were going to get.
But the regulations would only apply to a facility that chose to use the term “assisted living” in its name or written materials.
Regulators expected hundreds of facilities to apply but few have, according to a news report. Gary Rotstein of the Pittsburgh Post-Gazette has reported that state officials predicted there would be at least 150 assisted living residences licensed by now, but there are only 10 (with only one in Western Pennsylvania). Since facilities fall under the new regulations only if they describe themselves to consumers using the term “assisted living,” it seems many are choosing to avoid that term and thereby escape the regulatory requirements, the article said.
These developments are a sure-fire recipe for confusion.
Consumers know the well-branded term “assisted living” as a place where a person can receive help with activities of daily living in a home-like setting, instead of going to a nursing home. But where can a person find that service? The 10 licensed facilities cannot possibly serve the demand in Pennsylvania. People will be unsure if what used to be called the XYZ Assisted Living Residence is providing the same service now that it’s called the XYZ Personal Care Residence. Terms like “personal care” are so vague that many consumers may not know what services the facility offers.
When the regulations went into effect in January, it was hoped they would give meaning to the term “assisted living” and help consumers find the services they need. Now it appears the use of that term may become increasingly rare and consumers will be left to wonder what services are offered at which facilities, and where they can find the right mix of help they need.