Be Precise when designating charitable beneficiaries in your Will or Trust

A Last Will and Testament is called “Last” because it’s the presumed final statement of the wishes of the person who has passed away. The terms need to be in writing and duly signed, witnessed, and notarized according to the law. (New developments to facilitate electronic signatures are a topic for a different day) These requirements are there in an effort to ensure that it’s clear to the world just what the deceased person intended. A spoken conversation does not create a “Will.”  With that said, there have been plenty of cases in which somebody generously left a bequest to a charitable organization in their Will or Trust, but used the wrong name for the organization or failed to specify whether the bequest should go to the national parent organization or to a local chapter.  The result? Litigation, often expensive. A recent case illustrates this problem very well.

The case was In the Matter of the Estate of DeConca. This was an appellate court decision. It is “not approved for publication,” which means that the decision and rationale are limited to the facts of the case and are not precedential (binding) on lower courts. However, this case gives you a good understanding of the problems that can arise when a person is imprecise in their drafting or just doesn’t update the Will when circumstances change. Here is the entire Decision:  DeConca Estate App. Div.

Lois DeConca had left 5% of her revocable trust to the “Alzheimer’s Association, New Jersey chapter” and listed an address in Denville. Until 2009 she had donated money to the National Alzheimer’s Association Inc. (AA) based in Chicago. After 2009, all of her donations went to a NJ organization, which was actually called the “Alzheimer’s Disease and Related Disorders Association, Inc. Greater New Jersey Chapter.” She amended the Trust in 2009 to change the designee of this bequest to the “Alzheimer’s Association, New Jersey chapter,” apparently believing that it was actually an affiliate of the National AA (which it wasn’t). In this Trust amendment, she used the correct local address but used an incorrect entity name. In 2015, this local affiliate broke off from its national entity and became an independent 501(c)(3) organization using a name that was different than the one in the Trust, She died in late 2017 and her Executors/trustees did not know who was to receive the bequest and needed to file a court petition for instructions. They needed to file suit to ask the Court to give them instructions.

The Court needed to determine the actual intention of Ms. DeConca, and to do so, a trial was necessary with testimony and documentary evidence. Ultimately, the Court found that her intentions after 2009 were to support the local New Jersey organization in Denville that supported Alzheimers’ issues, and awarded the bequest accordingly. However, the unhappy party appealed. The appellate court sustained the trial court’s decision.

It’s apparent that as a result of this ambiguity, much time passed. The trial Court’s decision was entered a year after Ms. DeConca died. The Appellate decision was entered 16 months later.

Careful drafting and careful planning can avoid problems down the line. Call us to update your Wills, trusts and other legal estate plan documents ….  732-382-6070

Elective share and Medicaid can lay a trap for the unwary

In New Jersey, a surviving spouse has the right to claim his or her “elective share” of the deceased spouse’s estate if the deceased left him/her an inadequate inheritance. The calculations are made using the step-by-step process of a set of state statutes, N.J.S.A. 3B:8-1. If the individual receives Medicaid benefits and is widowed, failure to claim the “elective share” can result in a loss of benefits because it is treated by the Medicaid program as an uncompensated transfer of assets. If a person receives benefits when they are not actually eligible, they may be subject to a claim or lien for reimbursement. Federal and State law (N.J.S.A. 30:4D-7.8) requires states to place liens for reimbursement against the estates of deceased Medicaid beneficiaries. All of these issues came together in a recent Appellate Division decision called  In the Matter of the Estate of Arthur E. Brown, N.J. Super. App. Div. (Simonelli, J.A.D.) (32 pp.) A-1086-14T4.

  • The case involved a widower who had been disinherited by his wife. The marital assets had been transferred into her name, and he received nursing home care that was paid for by Medicaid. When she died, he didn’t file a claim for the elective share. He continued to receive Medicaid benefits. Upon his death, the State took the position that the value of the claim which he had failed to pursue was an asset of his estate, which was subject to the State’s lien for reimbursement. The Court held that the value of the claim was correctly included as an asset of his estate subject to lien.

The estate had also argued that the deceased wasn’t entitled to an elective share at all because he and his wife had been living separate and apart at the time of her death, and the couple ceased to cohabit as man and wife under circumstances that gave the wife a cause of action for divorce under N.J.S.A. 2A:34-2(d) or (f). The elective share statute lists this as one of the reasons that a person can be barred from seeking an elective share. Residing in a nursing home due to Alzheimer’s dementia might be sufficient grounds for the spouse to seek a divorce, but the Court wasn’t ready to go so far as to hold that the “living separate and apart” as used in the law was intended to encompass this sort of reason for the separation.

When Estate planning is being done for the community spouse of a person who needs nursing home care, the impact of the estate plan on the ill spouse’s Medicaid eligibility needs to be considered.  Failing to consider the interplay of the elective share and the Medicaid rules can result in unintended consequences. Not only can there be an adverse impact on eligibility, there can be complicated impacts later which result in surprising litigation which adversely affects the heirs of the estate.

Call us about Medicaid eligibility planning and elder care estate planning … 732-382-6070

Memory Cafe and Support Group are Great Resources in Union County

Many of our clients are caregivers of elders with Dementia.  They feel shut in taking care of their loved ones, never sure if they can go out together without incident.  Well, here is one option:  Jewish Family Services of Central New Jersey presents the Memory Cafe, on February 9th, March 23 and April 27th from 12 pm to 2pm at 655 Westfield Ave., Elizabeth, where individuals with dementia and their caregivers can enjoy a social outing together with support.  And it’s free!  To go, RSVP at 908-352-8375 Ex. 236.

Jewish Family Services also has an Alzheimer’s Support Group that meets on Fridays at 1 pm, at the same address.  The dates are February 3rd, March 3rd, April 7th, May 5th, and June 2nd.  Check it out!

Care planning for seniors includes care planning for the caregivers.

Call for advice on all facets of elder care planning …. 732-382-6070


For Qualified Income Trusts, Not All Bank Accounts Are Created Equal

Medicaid Long Term Services and Supports (MLTSS) in New Jersey pays for nursing home care for people with alzheimers disease, catastrophic disabilities and other serious difficulties with self care. The program requires any applicant with more than $2205 (three times the SSI amount–new for 2017) of gross income to make a Qualified Income Trust.  Our office assists applicants with this process all the time.  After the Trust document is completed, we usually send the trustee to the applicant’s bank to set up a QIT bank account.  But things can get hairy here.  Most people, reasonably, want to open bank accounts that avoid fees and penalties.  However, QIT accounts are not most accounts.  They are for the applicant’s gross regular monthly income ONLY, and the income is supposed to go into the account and leave the account every month.  Medicaid allows up to $20 per month in fees as a deduction from the applicant’s income; trustees should therefore pick the checking account product with reasonable fees but no minimum deposit.  If the account is set up with $0 in it, even if that costs a little money, that’s good; the assigned income will go in and fund the trust account in the month of the application date sought–this is what caseworkers are looking for initially.  Some banks will waive even these costs if you show proof of a regular direct deposit.

Unfortunately, many applicants’ Medicaid eligibility has been tripped up by technical processes related to Qualified Income Trusts since they began in December of 2014.  To do better, we all need to up our game and learn exactly what the caseworkers want before they ask.  Come talk to us about this and your other Medicaid questions.  We’re here to help.

Call us for Medicaid applications and senior care planning … 732-382-6070

Start your long term care planning before the reverse mortgage is used up

I have encountered the following crisis too many times. A frail elder is living at home, and since the home is safe and nice, is happily aging in place. Once the homeowner reaches the point of hiring a home health aide, they start using  up their savings. At that point, they  place a reverse mortgage on the home. This provides a significant amount of cash that can be drawn out month after month to enable her to stay at home. It can be drawn down gradually like a line of creditSo far so good. 

Someone needs to be minding the store to make sure that planning for the next phase begins well before the homeowner has exhausted the cash that’s available through the reverse mortgage.If the homeowner starts to develop Alzheimers dementia and has no one standing by to help, there can be a real crisis when the funds run out.

I have had several cases where the homeowner required 24/7 care, but the homeowner didn’t ask for help from their power of attorney, or the agent under power of attorney didn’t realize soon enough that the reverse mortgage was exhausted.  There was no money to pay for an aide, and even an MLTSS/ Medicaid application could take months to process and wouldn’t provide 24/7 care at home. To get into a nursing home would be practically impossible at that point. Fortunately, we were able to work things out. But it was a major crisis for all involved, and totally avoidable.

Careful planning can prevent a crisis!

Call us about elder care planning and aging in place … 732-382-6070