Good Reasons to have a Power of Attorney in Place After Age 18

Once a person turns 18, s/he is presumed competent in the eyes of the law and their parents are no longer actually authorized to sign documents for them. This can create a vacuum especially if the parents have generally been managing everything for this young adult.

At the other end of the spectrum, older adults may not have anybody who actually has any legal authority to handle things for them. This creates a vacuum if the older adult cannot conduct this business on their own anymore. What kind of things need to be handled? Bill paying. Sale of property. Taking out home equity Loans. Closing or opening bank accounts.  Setting up a reverse mortgage. Selling or buying stock.  Decisions about medical treatment. Changing an insurance policy. Collecting financial records to submit with benefits applications. Many people have informal arrangements in place in which a person who is aged or disabled has another person who handles their bills and accompanies them to appointments, doctors, etc. to help them get things done. But those arrangements can only go so far.

In a Power of Attorney document, you select a trusted person who will be authorized to act on your behalf if necessary, and you can name additional back-up people also. The document can be tailored to your personal situation.  The powers of attorney you need are designed to ensure that there is somebody with actual legal authority who can step in when necessary, and that there is a successor as well. We have streamlined the document signing process to minimize in-person contact, and we are doing our legal consultations by telephone.

 

Call for advice and to set up your power of attorney.We have streamlined the document signing process to minimize in-person contact, and we are doing our legal consultations by telephone. Mention FRE-L at Home … 732-382-6070

How to report a Social Security Impersonation Scam

A client of mine recently told me about a situation in which their dear family member was the victim of a scam. Luckily, my client was able to notify Equifax to freeze the victim’s credit, and was able to notify the victim’s banks to place a scam alert on the accounts. The concerned family member had previously been designated as Agent under Power of Attorney, which enabled her to move quickly.

In the case I’m telling you about, the caller had impersonated a Social Security Administration representative, got her to relate her birth date and Social Security number, and scared the victim by saying that she  was “in big trouble and there’s an arrest warrant out for you. To solve this, you need to send us $_____ in gift cards.” Social Security has a procedure in which the victim can report such scams, but they must fill out an online notification. The reports can’t be filed by telephone.  Click here to read about it and find the on-line form.

There are a number of organizations and government agencies that provide useful information on detecting, avoiding and reporting scams. These links are to their specific pages concerning this issue. Among them are the New Jersey Division of Consumer Affairs, the  National Council on AgingAssociation of Certified Fraud Examiners, and the Elder Justice Initiative at the US Department of Justice. (I am not specifically endorsing any of these entities, just listing them for information).

Caring for a loved one with cognitive limitations includes being on guard for potential threats posed by scammers. Have the discussion with your loved one about signs to watch for, common tactics that are used, and how important it is that s/he notify you or another involved family member or power of attorney. Scammers are increasingly sophisticated and tricky, and the person who receives such a call is often both terrified and embarassed to tell anyone else. By educating your loved one about these issues you may be able to prevent major loss from occurring, and of course you will build your trusting relationship with him or her. Forewarned is forearmed, and you can help your loved one stand up to such scams and avoid being victimized.

Call us for advice about elder care and senior care legal problems … 732-382-6070 

Planning for Later

A long-term client of mine called to tell me that he had just learned that he had a terminal illness – it was a medical problem that appeared suddenly appeared. He was about 70 and his wife about the same. Their children were self-supporting adults, out of the house. Both he and his wife were retired – he was collecting Social Security and a pension. He had always handled the family finances. The house was paid off. His wife had a lot of local friends and many volunteer activities that she enjoyed. She was frantic and had become depressed, as she couldn’t stop thinking about the space in her future that would be so empty and how she would manage things. She was paralyzed with fright. When she thought about the future, all she could see was jumbled chaos.

The husband brought his wife with him to meet with me. We talked about the survivor’s benefit on his pension and the bump-up in Social Security that she would receive. We looked over the assets and showed her how they would transition to her ownership and would not be lost. We sketched out a plan of steps to be taken “when the time comes,”  and we reviewed and updated their powers of attorney, health care proxies and Wills. We talked about ways she could keep him comfortable at home at the end, and what benefits could help with that. We discussed hospice and when it would make sense to bring in that support. The husband dictated his wishes for his funeral arrangements, which were typed up for his signature. We also mapped out the budget  so that his wife could see that she could comfortably remain in the house “afterwards.”

By focusing on a set of specific decisions and steps in an orderly way, my client’s wife became less afraid for her future. Sad, yes, but less afraid and less worried. She felt more confident that as they began moving through this terrible transition, she would have a framework for decisions and would know how to approach each decision as it became necessary.

Careful planning can prevent a crisis. Call us for advice on elder care and end of life planning….. 732-382-6070

Watch out for elective share issues in Medicaid planning

When a married person requires nursing home care, the spouse often seeks advice on how to preserve assets and minimize his/her exposure to the high cost of care. Often this will require consideration of how the Medicaid program (MLTSS or NJ FamilyCare) can help out. Assets may be transferred to the “community spouse,” and beneficiary designations may be changed. Some assets will be retained and others may be spent. There may be gifts, and there may be annuities that are purchased. Each plan is unique. The Will of the community spouse may be altered so as not to leave everything to the spouse who now requires nursing home care.

What happens if the community spouse dies first, and the institutionalized spouse is receiving MLTSS Medicaid benefits? The Executor of the Estate and the Agent under Power of Attorney for the surviving spouse will have some reckoning to do. This ‘reckoning” refers to calculating and satisfying the “elective share.”

The elective share is a statutory share of the deceased spouse’s estate. It is calculated by following the formula in N.J.S.A.3B:8-1 et seq. Basically it starts with the deceased person’s probate assets (essentially, the assets that have no beneficiaries or co-owners or that aren’t held in a living trust), minus expenses and debts, plus an array of other assets such as joint accounts, pay on death accounts, and assets that were given away within the prior 2 years. This whole combination of subtractions and additions produces what’s called the “augmented estate.” The elective share is one-third of the augmented estate. The share is “satisfied” first from assets owned by the surviving spouse or that he receives as a result of the death, and then from probate assets, and then from non-probate assets.

Sometimes it turns out that the surviving spouse gets a distribution of zero from the estate of his late spouse, but other times, the distribution is substantial, creating some havoc as the Executor tries to figure out how to make the payment — often, there is real property but insufficient cash, and the Will may leave the property to somebody specific.

Why does any of this matter? A person on Medicaid is required to seek all assets to which he is entitled, or he will face the risk under N.J.A.C. 10:71-4.10  of a transfer penalty. The Appellate Division has ruled in I.G. vs DMAHS that.  the failure to claim the elective share is a transfer of assets. If a transfer penalty is imposed, the State doesn’t pay for the nursing home for a period of time.

The Agent under Power of Attorney for a Medicaid applicant or recipient is obligated to report changes to the program. This would include notification that the person has been widowed. Typically, the County Board of Social Services then inquires about the estate of the deceased spouse and whether the Medicaid recipient has received his elective share. If the surviving spouse isn’t yet on Medicaid, then this issue will have to be addressed if the surviving spouse applies for Medicaid benefits during the ensuing five years, because at the time of the application, there is a 5-year look-back to see if any assets were given away/transferred.

What’s the risk? The risk is that Medicaid benefits were wrongfully received by the surviving spouse who failed to receive assets he was entitled to as an elective share. This further creates the risk that there was an overpayment, and the State has options under N.J.S.A. 30:4D-7.1, to pursue all culpable parties by initiating a lawsuit in Superior Court.

Careful planning can prevent a crisis. Senior care planning involves a whole array of activity, some now and some later as situations change. Call us for advice for now, and for later. … 732-382-6070

Don’t be the Executor if you can’t do the Job

When you create an estate plan, you are selecting people whom you trust to perform various jobs for you and your beneficiaries. You may be selecting an agent to act as your Power of Attorney. You may select a medical decision-maker in case you become mentally incapacitated. You may have a Trust and select the Trustee who will manage the money for the beneficiaries. And you may be selecting an Executor who will handle your estate after you pass away

People often feel that being named as Executor is a big honor. Disputes have erupted within families when one child rather than another was named as Executor. Sometimes the person who was named as Executor wants the power and control that come along with the title of Executor, but ignores the responsibilities that come with it. Other times, the Executor has financial troubles of their own, starts “borrowing” funds from the estate, and just lets the estate lie around for years without paying the bills, paying the inheritance taxes or selling the property.

The Executor is a fiduciary — entrusted by law to handle “other people’s money” — and has duties to the funeral home, the tax authorities, the estate’s creditors, and ultimately, to the beneficiaries. Although an Executor is not obligated to reveal every step and every action to the beneficiaries, at some point, the beneficiaries will want to see an accounting so that they know that the amount of their distribution is correct. Reconstructing an accounting after several haphazard years of erratic management of estate assets can be a nightmare that leads to lawsuits brought by beneficiaries.

Managing an estate can be very time consuming. Dealing with third parties to obtain date-of-death values and payoff amounts for debts, tracking down missing assets, and selling real estate can turn into big chores. But the Executor has those duties and obligations.

Ideally, every Will has a list of successors written into it in case the Executor refuses to accept the appointment or decides to resign. But turning over an estate to a successor can create problems of its own, and a process must be initiated through the Surrogate or Court to be discharged as Executor.. Better to think carefully before stepping up to the plate and taking on the responsibility in the first place if you have any doubt of your ability to complete the task.

Call us for advice and assistance with estate administration, and ask about the fiduciary services we provide .. 732-382-6070