Searching for a Support System (Part 2)
Last week I was talking about the hypothetical client, Jane Doe. Jane does not have a family and friend support system to turn to when she can no longer handle her own financial and medical affairs and decision making. What options does she have? Trusted professionals can sometimes be a good person to fill these roles. That could be Jane’s attorney, accountant or financial advisor. Many financial advisors, however, are bound by strict licensing rules which limit their ability to serve as agent under a power of attorney for their own family members. A care manager or social worker could also be a suitable option for health care representative. This type of professional will be very knowledgeable about care options and will be comfortable making medical decisions. In my practice, I have seen several different people serve as fiduciaries for aging seniors. In a handful of cases it has been a caring neighbor, who maybe lives next door to Jane. It often begins with the neighbor running errands for Jane, bringing her milk and bread when the neighbor goes to the grocery store or making sure she is OK when the neighborhood loses
Searching for a Support System (Part 1)
I received a reader email a few weeks back asking me to write about aging seniors who have no family or friends to rely on. I wrote about this topic last January (see blog posts 1-2-17 and 1-9-17) but we are seeing the scenario with increasing frequency, so it is certainly worthwhile to address it again. Last year I focused on the crisis case in which our hypothetical senior, Jane Doe was admitted to the hospital with no power of attorney or health care directive in place. It is not uncommon for Jane to be under a mental impairment at that point. Executing a power of attorney and health care directive at that time, while critical, is also problematic. Yet, that is when we usually cross paths with Jane Doe. Medical professionals will call our office seeking guidance and assistance. But, as I repeat often, the options are so much better when you plan ahead. Not that it is easy. Many people who live alone with few family and friends in their inner circle are fiercely independent and have been for years. Yet, the inevitability of aging hits us all if we live
The Right to Control Funeral and Burial Arrangements (Part 2)
In my post last week, I explained how my client Joe can insure that his burial wishes are carried out. One option is to set up a prepaid burial plan. He can set aside money in trust to cover the burial arrangement he has chosen while alive. A second option is to designate a funeral agent in Joe’s will as permitted under New Jersey law. It can be anyone including the executor of his will. In Joe’s case he wants his longtime companion, Betty to be his funeral agent. But what happens if no funeral agent has been designated in a will and no prepaid burial has been established? In that case, New Jersey law states that the first right to control funeral and disposition of the body falls to the surviving spouse or civil union or domestic partner. However, if there is a restraining order against that spouse or partner or that spouse or partner is charged with intentionally killing the deceased spouse or partner then the right passes to the next in line. This means that in the case of a second marriage – unless one of the above exceptions applies
The Right to Control Funeral and Burial Arrangements (Part 1)
Recently my client, Joe asked me how he could be sure his wishes with respect to his funeral arrangements would be honored. Joe is not married. He has children but is not close with them. He has no siblings. I suggested to him that he could set aside money in a prepaid burial. This is something that is often done as part of a Medicaid spend down but can also be utilized where Medicaid is not needed. Joe must go to the funeral home and make the choice of services he wishes. Instead of paying the funeral home, however, money is set aside in a trust account. The funds are paid from that trust account to the funeral home after Joe’s death when the funeral services are provided. Joe wasn’t thrilled with the idea of going to the funeral home. Instead, he said he explained to his companion of many years, Betty what he wants for a burial. “How can I make sure that Betty will be able to carry out my wishes?”, he asked. “I don’t want my kids meddling in my affairs.” New Jersey law provides that a person can be
Irrevocable Trusts and Medicaid (Part 3)
I promised in last week’s blog post that I would explain another solution to Mary’s Medicaid dilemma. Her uncle left assets in a trust for Mary but the terms provide that the funds can be used for Mary’s health support and maintenance. I explained to Mary and her sister, Betty, who is trustee, that Medicaid is likely to count the assets as Mary’s for eligibility purposes, even though the trustee has the discretion to spend or not spend the money. I told Mary and Betty that they could appeal a Medicaid denial but I cannot guarantee that they would succeed, although I believe that a Medicaid approval is the right outcome. They were not comfortable with a long legal battle. There was, however, another solution which would give them more certainty. Because Mary is 57 years old and has been disabled by Social Security, another option is to withdraw the remaining funds from the trust and distribute them to Mary. Instead of spending those funds towards her care, however, I told Mary and Betty that we could establish a special needs trust for Mary’s benefit and place the assets into that trust. The
Irrevocable Trusts and Medicaid – Part 2
In last week’s blog post I was talking about a call I received about Mary, who is now in a nursing home. She has spent her assets towards her care and the only source of payment left is money that was left in an irrevocable trust for Mary’s benefit by her uncle when he died. I explained to Mary and her sister Betty, who is the trustee, that I would need to examine the trust document to determine whether the funds in that trust must be spent down before applying for Medicaid to cover her care. Betty gave me a copy and here is what I told her. The trust is irrevocable but as I explained last week, that fact alone does not answer the question. The trust provides that the income and principal can be used to meet Mary’s health, support and maintenance needs, including nursing or other long term care. The trustee has the discretion to decide how much to use as opposed to it being mandatory. So what does that mean when it comes time to apply for Medicaid? The trustee could say that since she has the discretion of whether to