Easier Access to Special Needs Trusts Finally Arrives for Disabled Individuals

By: Kevin R. Albaum, Esq.
Clark, Campbell, Lancaster & Munson, P.A.

A bill known as the Special Needs Trust Fairness Act (the “Act”) has been working its way through the legislative process for a couple years now.  Finally, on December 17, 2016, President Obama signed the Act into Federal Law. The law became effective immediately.

A first party special needs trust is a special type of trust created and funded with a disabled person’s assets in order to maintain eligibility for means based government benefits such as Medicaid and Supplemental Security Income (“SSI”).  While a first party special needs trust has restrictions on how the money in the trust may be used, it can generally be used for the benefit of the disabled individual. The trust can be used to purchase most items for the beneficiary as long as the purchase of such items does not cause the person to lose eligibility for their government benefits by accumulating too many countable assets under Medicaid and SSI rules.  However, the trust’s funds cannot be used to purchase food, pay for routine shelter costs like rent, mortgage, basic utilities, or to purchase items for someone other than the trust beneficiary.

The Act was designed to revise the prior law requiring individuals with disabilities to use a parent, grandparent, guardian, or court of competent jurisdiction to create a first party special needs trust.  Under the old law, a person could be disabled and still be competent to create a trust (such as a victim of an accident or a blind individual), but this individual still would not be able to establish the trust without the assistance of a third party.  Under the new Act, individuals with disabilities, who have the requisite level of capacity, can now create a first party special needs trust for themselves rather than depending on others to do so for them.

Special needs trusts exist because the federal government decided that they do not want to penalize disabled individuals by requiring them to spend down their limited assets on health care and essential living expenses before they can become eligible to receive government benefits to help pay for the disabled individual’s health care and essential living expenses. Once the trust is implemented and funded with a disabled individual’s assets, the individual can immediately apply for or become eligible to receive governmental benefits and will be able to continue to use the trust for their personal benefit during their lifetime.  Preserving assets in a special needs trust allows a disabled individual an incredible opportunity to extend the use of the trust assets over their lifetime without preventing them from obtaining and receiving governmental benefits.

It’s important to consult a legal professional with experience in elder law when considering creating and funding a special needs trust to ensure governmental benefits are preserved.

Kevin Albaum is an Elder Law Attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in Lakeland.  Questions can be submitted to thelaw@cclmlaw.com.

Proactive Planning for Senior Medicaid Programs Makes the Process Easier and Saves Money

By: Kevin R. Albaum, Esq.
Clark, Campbell, Lancaster & Munson, P.A.

Medicaid programs are often available to senior citizens in Florida to help pay for home care, assisted living, and nursing home expenses.  However, there are complex rules regarding eligibility to qualify for these Medicaid programs.  Knowing the eligibility rules of these programs prior to needing to apply is helpful, not only for the individual or couple, but also for the attorney that often assists with legal planning to preserve assets for a spouse or family.  Regardless of the urgency for the need for senior care, taking the time to confer with an elder law attorney helps seniors and their families understand what Medicaid programs are available, who qualifies for them and why an individual may qualify for some programs and not others.

Q. When is it recommended to meet with an elder law attorney to discuss Medicaid issues and planning?

While personal situations differ, below are two examples of common situations when a person may consider contacting an elder law attorney to discuss Medicaid needs.

Example Client #1:  My husband and I are both in our sixties and we know we may need Medicaid in the future.  Could we meet to learn more about the available Medicaid programs that may help us pay for any future assisted living or nursing home care costs?  In this situation, I generally meet with individuals to discuss, assess, and plan their current situation and their future health care and financial needs.  We also look to identify potential future roadblocks to obtaining Medicaid benefits and we further explain the programs that potentially might be available based on the current and future situation.   Finally, we discuss and analyze the “what ifs” such as the event of an unforeseen crisis and the need to become eligible for appropriate benefits as quickly as possible.

Example Client #2My 90-year-old dad is out of money and he has dementia.  He is in a nursing home and he needs financial assistance as soon as possible.  Can you help me get Medicaid benefits for Dad?  When I receive calls like this example, not only are the family and lawyer dealing with the same complex legal subject matter as the client in Example 1, but we also are dealing with a loved one who is either already in or is in the process of moving to a nursing home.  Additionally, due to the high cost of care and lack of available funds to pay for care, we now have a built-in deadline to complete any necessary legal planning and to resolve any unexpected disqualifying issues.  In this type of “crisis” scenario, becoming eligible for benefits is still possible; however, the ability to proactively plan and the options for planning are often more limited than they might have been a few years prior to the crisis.

Proactively planning, not only often saves clients time but also can reduce the future costs of senior care and legal expenses.

Kevin Albaum is an attorney in the Elder Law Practice at Clark, Campbell, Lancaster & Munson, P.A. Questions can be submitted online to thelaw@cclmlaw.com.

Guardian Advocacy

By: Kevin R. Albaum
Clark, Campbell, Lancaster & Munson, P.A.

Q: My child has a developmental disability and is about to turn eighteen years old. How do I protect and continue to care for him?

A: The proper legal mechanism to safeguard your child depends on a variety of factors to be discussed between loved ones and an elder law attorney, including vulnerability to exploitation, autonomy, the need to protect or remove legal rights, assistance provided by family, and mental capacity exists to sign legal documents. After this initial discussion, you may determine that the best option is for one or both parents to apply to become a Guardian Advocate over the child and/or his property upon him turning eighteen.

The approach varies from child to child, as Florida law requires using the least restrictive alternative to Guardianship or Guardian Advocacy whenever possible. Some less restrictive alternatives include implementing a Durable Power of Attorney, Health Care Surrogate, Living Will, or Trust.

Appointment of a Guardian Advocate is appropriate under Florida law if a developmentally disabled person lacks decision-making ability to do some, but not all, of the tasks necessary to provide for himself and/or his property. The process usually begins with an attorney filing a petition for a Guardian Advocate to be appointed and providing notification to all of the disabled individual’s next of kin. The Court appoints an attorney to meet with the alleged developmentally disabled individual to ensure that a need for a Guardian Advocate exists and that the individual’s rights are protected. If, at a hearing shortly after the filing of the petition, the court determines that evidence supports Guardian Advocacy, a Guardian Advocate is appointed and some, but not all, rights are removed and delegated to the Guardian Advocate.

The appointed Guardian Advocate is required to file reports and accountings to the Court for annual review. The Court continues to oversee the Guardian Advocacy for the life of the Guardian Advocacy unless it is determined that a Guardian Advocate is no longer necessary for the individual, in which case the Guardian Advocacy would be terminated by the Court.

 

The September 24th edition of “The Law” will cover whether land surveys are needed when purchasing a home.

 Kevin Albaum is an estate planning and elder law attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. Questions can be submitted online to thelaw@clarkcampbell-law.com.

Probate

By: Kevin R. Albaum
Clark, Campbell, Lancaster & Munson, P.A.

Q: What is probate, and should I craft an estate plan to avoid it?

A: Probate is a court-supervised process of transferring assets after a person dies. Assets subject to probate do not include those that were payable to a named beneficiary (e.g., life insurance), owned by a trust, or owned jointly with rights of survivorship (e.g., joint bank account between spouses). Anything not directed to another person upon death may become subject to probate. Formal administration, which is the most common probate proceeding, typically takes approximately one year to resolve. Due to the time and legal expenses involved, it is advisable to craft an estate plan that avoids probate.

To avoid probate, an individual planning his or her estate should discuss with an attorney the proper way to title assets in multiple names or placing assets within a living trust. By titling all assets with multiple names (in the proper manner, so as to provide automatic transfer to the second owner upon death of the first), probate can be avoided. A properly funded living trust can hold a person’s assets and often can be administered without court intervention. The process is technical, and you are encouraged to get counsel to assist so as to best ensure avoiding a probate proceeding.

Although many dread probate proceedings, there may be advantages to court supervision. For example, the Florida probate process allows for an estate to clarify what creditor claims exist and cut off claims of lazy or careless creditors. In the court proceeding, a “notice to creditors” is filed, allowing a 90-day period for creditors to file claims against the decedent’s assets. If claims are not filed within the 90-day window, they are forever barred.

 

The June 4th edition of “The Law” will discuss liability issues of concern to nonprofit boards of directors.

Kevin Albaum is an estate planning and elder law attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. and a proud member of the National Academy of Elder Law Attorneys (NAELA). NAELA has designated May as National Elder Law Month to focus on educating seniors about legal options. NAELA and its member attorneys provide legal advocacy, guidance, and services to enhance the lives of seniors and people with disabilities. Questions can be submitted online to thelaw@clarkcampbell-law.com.

Guardianships

By: Kevin R. Albaum
Clark, Campbell, Lancaster & Munson, P.A.

Q: My father has difficulty living on his own. Does he need a guardian?

A: A common misconception exists that a guardianship is necessary whenever an aging adult experiences some level of incapacity or difficulty making personal, financial, or healthcare decisions. Subjecting a person to guardianship should be the last option, and it is often the most costly option. When you contemplate a guardianship for a friend or family member, ask yourself how you can help and protect the person in the least restrictive manner possible.

A meeting between concerned friends and family members can uncover support mechanisms already in place for safety and care and can expose any deficiencies. Alternatives to guardianship are available, including durable powers of attorney, revocable trusts, friends or family serving as representative payees for government benefits, hiring of a geriatric care manager, joint bank accounts, health care surrogates, and simple family and friend supervision and involvement. After exploring whether these options offset the incapacities of the aging adult, consult with an attorney to discuss initiating guardianship proceedings, wherein the court will determine the nature and extent of incapacity and appoint a guardian if appropriate. The scope of the guardian’s powers, if any, will depend on the extent of incapacity, which is determined primarily a court-appointed medical examining committee. The court and committee will explore and consider the least restrictive alternatives to guardianship, because guardianship may result in the aging adult losing rights to make his or her own decisions about travel, expenses, and other every day choices.

 

The May 21st edition of “The Law” will continue our coverage of National Elder Law Month with a discussion about the “probate” process that occurs when an individual dies without having specified beneficiaries for all assets.

 Kevin Albaum is an estate planning and elder law attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. and a proud member of the National Academy of Elder Law Attorneys (NAELA). NAELA has designated May as National Elder Law Month to focus on educating seniors about legal options. NAELA and its member attorneys provide legal advocacy, guidance, and services to enhance the lives of seniors and people with disabilities. Questions can be submitted online to thelaw@clarkcampbell-law.com.

Adding Durability to Your Estate Plan

By: Kevin R. Albaum
Clark, Campbell, Lancaster & Munson, P.A.

Q: How do I delegate authority in the event I become incapacitated?

A: A Power of Attorney is a legal document allowing a person (the “principal”) to delegate authority to an “agent” to act on the principal’s behalf. The document can be very specific and “limited” to allow the agent to complete a specific act such as selling the principal’s car, or it can be “general” to allow the agent to take most legal actions that the principal could also do on her own. Some such powers include creating trusts, making gifts of assets, selling property, accessing bank accounts, or signing contracts and other legal documents.

Generally, a Power of Attorney loses effectiveness when the principal becomes legally incapacitated unless the document specifically indicates otherwise, in which case the document becomes “durable”. A Durable Power of Attorney affords a principal planned protection should a health-related emergency or other unfortunate event causing temporary or permanent loss of capacity occur. Durable Powers of Attorney allow the agent to pay the principal’s monthly bills and make healthcare decisions during the incapacity.

Powers of Attorney drafted in Florida on or after October 1, 2011 are immediately effective from the date of execution. As a best practice, the principal should advise the agent of the Power of Attorney but not provide a copy of the document until the principal would like the agent to use it. The principal could let a family member or attorney hold the document or know of the document’s secure location and instruct the family member or attorney not to give the document to the agent until a certain time or event.

With boilerplate forms at your fingertips on the internet, you may be tempted to go at this venture without an attorney. However, legal help is wise to ensure the Power of Attorney document meets your specific circumstances and ensure that you have adequate protections in place, including protection from abuse of the powers by the agent.

The March 26th edition of “The Law” will address animal cruelty in the recent news and the legislature.

[Kevin Albaum is an estate planning and elder law associate attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. Questions can be submitted online to thelaw@clarkcampbell-law.com.]

Will Must Be Equivocal As to Intentions

By: Clark, Campbell, Lancaster & Munson, P.A.

Q: Must I revise my will when I acquire new assets?

A: A well-crafted will need not be revised for each new asset, but, as at least one surviving brother learned, the intentions for such future-acquired property must be clear in the will.

On March 27, the Florida Supreme Court resolved the dispute over property that Ann Aldrich acquired after writing her will but before her death. Without an attorney, Aldrich used a universal legal form to draft her will. She listed out each of her known assets and indicated that all were to go to her sister or, if the sister died first, to her brother. The sister then died and left assets to Aldrich, who never revised her will but did later write and sign a note that indicated that all of her possessions (including the inheritance from her sister) would go to the brother.

Upon Aldrich’s death, her brother claimed Aldrich’s intent to give everything to the brother was clear: she had intended to list all of her assets in her will, she listed only one beneficiary (the brother), and she later signed a note to clarify that the brother would also get the assets acquired after the will was executed. But Aldrich’s nieces from her other, deceased brother claimed otherwise, noting that the will itself simply listed assets to go to the brother and did not clarify any intention of what might happen to other assets not listed.

The Court agreed with the nieces and limited itself to the four corners of the will, which was vague at best as to Aldrich’s intention. Aldrich should have included a general “residuary clause” to act as a catchall provision for the intentions as to all assets not specifically listed. Without such a clause, the law handles such assets using strict bloodline inheritance rules regardless of the will.

Planning your estate does not have to be difficult and can be effectively done in a single step without worrying about making changes with each asset. An attorney can help ensure that your intentions are clear in all of your estate planning documents.