Questions asked & answered at yesterday’s “Estate Planning Essentials” workshop

asset-protect2

  1. Can I protect assets for my heirs?
  2. How can I avoid court and family disputes?
  3. How can I set up a trust?
  4. Is it true that “probate” costs a lot? Should I avoid probate?
  5. If I have no children or trustworthy people in my life, who can I appoint as my agent or executor?
  6. What is Medicaid Planning?

Join us at our next workshop and have your questions answered! Click here to see upcoming dates.

 

 

“myRA” announced to boost retirement savings

In a visit to the Pittsburgh area last week, President Obama signed a presidential order directing the Treasury Department to create “myRA,” a new vehicle for retirement savings. The proposal was originally announced in the State of the Union address to Congress.

According to the White House Fact Sheet, myRA will work like a Roth IRA account, but have principal protection “so the account balance will never go down in value.”

The new proposal is targeted to workers with low to moderate incomes. Initial investments start at $25, and contributions can be made in amounts as low as $5 through payroll deductions. It will be available to households earning up to $191,000 a year.

With reports showing many Americans are not saving enough for retirement, any new program encouraging retirement savings should be welcome news indeed.

Courts extend estate tax, pension plan rights to same-sex couples

In recent months, courts have extended important elder rights to same-sex married couples.

Estate tax

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.

Pension plan

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.)

Pennsylvania status

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?

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

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.