Monthly Archives

February 2016

Concerned About Governor Reinventing RI Medicaid? You Should!

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image source: Bloomberg.com

image source: Bloomberg.com

Reinventing RI Medicaid

Reinventing RI Medicaid has been grabbing the headlines as of late and with good reason. Should we be concerned with how the State of Rhode Island funds the Medicaid Program that helps seniors in nursing homes? Worried about the impact of Governor Raimondo’s proposals dubbed “Reinventing RI Medicaid”? If 1/3 of the money you paid in taxes to the State went to one budget item would you care?

You should!  Why?

Rhode Island spent $1.785 billion on Medicaid in the 12-month fiscal year that ended June 30, 2013; the total state budget that year was $8.1 billion. Slightly more than half the money spent on Medicaid services usually comes from the federal government, with the rest covered by taxpayers in Rhode Island. During the 2012-13 fiscal year, 22% of Rhode Island’s population – about 230,000 of the state’s roughly 1 million residents – used Medicaid at some point in the yearNearly half of Medicaid spending goes to hospitals and nursing facilities.

The Raimondo administration is seeking special authority from the General Assembly to ensure the state hits its ambitious goal of shaving $70 million off Medicaid costs this budget year (0.86% of total budget). A provision tucked into the governor’s proposed budget asks lawmakers to give “authority to institute fiscal controls” to Health and Human Services Secretary Elizabeth Roberts so she can make sure the savings target is reached by June 30, the last day of the fiscal year.

Want to learn more about the latest update as to where the Governor is in her proposals impacting Medicaid.

If You Are Concerned In How This Change Will Impact Your Future…Contact Us

What is a Lady Bird Deed and are They Allowed in Rhode Island?

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Property Deed

What is a Lady Bird Deed and Are They Allowed in Rhode Island?

A Lady Bird Deed (also known as an enhanced life estate deed) is a way to transfer property to someone else outside of probate while retaining a life estate in the property. But unlike a regular life estate, a Lady Bird deed gives you the power to retain control of the property during your life, including the right to use the property for profit or to sell the property.

THE GOOD: The 2014 Rhode Island budget addressed Lady Bird Deeds and the impacts on elder care planning techniques which rely on their use.  The bill created a new statute (R.I. Gen. Laws § 34-4-2.1) which, for the first time, officially recognizes the use of these deeds which are distinguished from traditional life estate deeds in that the life estate holder also retains the power to sell, convey, mortgage or otherwise dispose of the property without the consent or participation of the remainder interest holders.

Traditionally, these deeds have sometimes been used to transfer real estate to family members while avoiding a transfer penalty for purposes of Medicaid eligibility.

THE BAD: However, the budget contains another new statute (R.I. Gen. Laws § 40-8-3.1) that effectively eliminates this planning opportunity by providing that a Medicaid applicant, who has transferred his or her primary residence using a “Lady Bird” or “Enhanced Life Estate” deed recorded after June 30, 2014, must re-convey the remainder interest to himself or herself prior to qualifying for Medicaid benefits.  Upon re-conveyance of the remainder interest, the life estate holder will again own the entire property in fee simple, as if the transfer had never occurred.

So the good news is that Rhode Island finally recognizes Lady Bird Deeds, unfortunately, the primary purpose they were used for, namely Medicaid Planning, no longer works as the new law prohibits its usage for qualification purposes.

Still have questions?  Contact our office for a free consultation what other options still exist for you!

A Last Will And Testament Is NOT An Estate Plan

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A Last Will And Testament Is Good Enough, Right?

Will

The Reading Of The Will

Will readings. Family gathered around the table, dressed in black, all sitting in a lawyers office while the lawyer reads to the family. That is how Hollywood has projected it and how it works. The decedent signed the document during their life and the family all learn at the same time who got what.

While that can happen in real life, rarely does it occur. More importantly, and the bigger point of this article, this should NOT happen.

A Will As Part of the Estate Plan – Not the Entire Plan

A Last Will And Testament is a proper and necessary document that all people should have. But the Will is only PART of the documents a person should have as part of their estate plan. A Will is the beginning – not the beginning and the end! A Will should be accompanied with Trust, Durable Powers of Attorneys, Health Care Powers of Attorney, Deeds, Conveyances, Bequests and an overall goal to ease administration and ensure the wishes of the deceased are followed, and followed efficiently.

A Will does not avoid probate – it causes probate

A Will alone does not ease the administration of Estates, it only guarantees that there will be a probate estate to administer. The Probate Courts and the Probate Process is a lengthy, time consuming, expensive process that typically takes over a year to complete.

The attached article explains the impact of not having a full estate plan. While a will is a part of the estate plan, it is not the entire plan. Sadly, this lesson comes too late for some, like Mr. Sacks.

 

The Man who Mistook his Will for his Estate Plan

Meeting and discussing your estate plan with an attorney experienced in drafting and preparing estate plans is an important first step in ensuring your goals and objectives are met. Contact our office for a free consultation on planning your estate, the proper way.

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Nursing Home: Promise You’ll Never Put Me In One

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Nursing Home – A promise that cannot always be kept

nursinghome (1)

The perception of life in a nursing home.

Promise you won’t put me away. It is hard to say no to that request. But it often is even harder to honor it.

For many, the idea of being sent to a nursing home facility implies abandonment. Older Americans remember the poorhouse , where the old and infirm were hidden away to die. But many younger people also are repelled by the idea.

There’s now a wider spectrum of facilities catering to different levels of need, but even the best ones can feel institutional. Daily life is often rigidly regulated, robbing residents of autonomy, and the familiar faces and spaces of a person’s life are gone.

This unfortunately is the perception. With this perception loved ones pressure their family to promise not to let them live there. Seeking to comfort, a promise is made, a promise that cannot always be kept. Nurses are hired, changes to rooms, stairs, ramps and rails are added. All helping for a while, but never fulfilling the promise. What is a family member to do?

Resources exist in Rhode Island to help caregivers aid loved ones during the period of increased need. However, there are limitations as to what unskilled people can provide in their home. Many improvements have been made, but there are still limitation.  When all options are exhausted and the medical professionals recommend your loved one be moved to a skilled facility, the echo of the promise is loud.

Below is a link to a compelling article about making promises that sometimes you cannot keep.

Promise You’ll Never Put Me In A Nursing Home

alzheimers081454604851A photograph album shows Sarah Harris and her husband, Ernie, on their wedding day. Three years later, Ernie, who was 53, was diagnosed with Alzheimer’s disease. (Katherine Frey/The Washington Post)

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7 Items To Consider When Doing Your Estate Plan (Shared Article)

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When you meet with your attorney, he or she will guide you through the various choices you will be called upon to make, so that you end up with a set of documents that reflects your intentions. If you want to make this time with your attorney most productive, here are 7 things you can do to prepare. If you are able to put thought into any of these 7 things beforehand, you will be way ahead of the game.

1. Assemble a list of your assets and significant liabilities. This includes your house (and mortgage), bank accounts, investment accounts, business interests, personal belongings with value (e.g., artwork or jewelry), insurance policies on your life and retirement accounts. For each asset on the list, include an estimate of its value or current balance, as well as whether you own the asset in your individual name or in joint name with another person, such as your spouse. Your attorney will want to take a look at this list at the outset of the meeting, if not before, because it is a good starting point for determining which tax strategies could offer you and your family the biggest savings.

2. Consider if there are any personal belongings you want to leave to a particular person. You should think about how you would like to dispose of your things, even if you are convinced that they are not worth much money. Oftentimes, a couple will provide that all of their household furnishings, jewelry, collections, etc., will pass to the surviving spouse when the first spouse dies, and then everything will be divided equally among their children when both of them are gone. Because the sentimental attachment to certain items can be high, consider whether you should be more specific about who should receive those items. Keep in mind that the deepest rifts among adult children can begin with a tug of war over items that have value only to them. If you cannot decide at the time or want to remain flexible to change things over time, you can have a request put in your will that your spouse and/or children deal with your belongings according to any side letter you leave with your will. For this approach to work, though, you must promise yourself you will actually write that side letter.

3. Start to think about who has the skill and willingness to be the personal representative(s). The persons that you name in your will as the personal representatives will be charged with settling the estate following your death. His, her or their duties will include collecting your assets, paying debts, expenses and any taxes that may be due and then distributing the assets as directed by the rest of your estate plan. People usually name their spouse to serve as the personal representative in the first instance. If you decide to do the same, you still need to consider who should act in this capacity if and when both spouses are deceased. You can name more than one person if you like. Whoever you choose, you should also think about a successor in case the first person(s) named cannot act for any reason.

4. Get comfortable with the idea of trusts for your children and grandchildren as an alternative worth considering. You could decide to pay out all of the trust property equally among your children when you (or both you and your spouse) have died. Many individuals and couples choose another approach, however — to divide the trust property into equal shares, with one share being held in trust for each child until the child needs or wants funds. Your estate planning attorney will explain the advantages of this. For example, one compelling advantage is that property held in trust for a beneficiary tends to be insulated from the claims of that beneficiary’s creditors, including a divorcing spouse. If you choose this alternative, the trusts could last throughout your children’s lifetimes. Or, you could provide instead that specific portions of the trust property be distributed outright to your children at certain points in time (e.g., 1/3 at age 30, 1/3 at 35, and the balance at 40). You must also consider how you would want your property handled if one of your children predeceases you, leaving young children of his or her own.

5. Start to think about who has the skill and judgment to be the trustees. As with the appointment of personal representatives, the person or persons that you name as trustees of your revocable trusts following your death may be family members, friends and/or professionals.  If your children are relatively young and/or you decide to provide for grandchildren, the trusts could last many, many years. You may want to consider naming an institutional trustee (such as a law firm or bank) so that you will be sure there will be continuity of management. The trustee is responsible for managing the assets and making sound distribution decisions, so there will be adequate resources to meet your spouse’s and/or your children’s needs after you are gone.

6. Decide who should make medical decisions for you if you are incapacitated. The health care proxy, along with the power of attorney, is an important component in planning for incapacity. In the health care proxy, you name an agent to make health care decisions for you if you are unable to do so. Give some thought to the person who should have that responsibility, along with a successor to him or her.

7. Decide who should take care of your financial affairs if you cannot. The power of attorney is similar to the health care proxy, except that you are appointing a person or persons to act as your agent with regard to your financial matters during your lifetime. The power of attorney can take effect only when you are incapacitated or it can become effective immediately after you sign it (for instance, the power of attorney may be useful if your spouse is away and you need to sign on his or her behalf).

The purpose of this list is not to overwhelm you with decisions or delay you crossing this item off your to-do list. If you get stuck on any of them, know that your estate planning attorney will explain all of these things and the different options available to you when you sit down with him or her. Instead, this list is meant to get your thinking started while you have the luxury of time – in the days and weeks before the meeting – to reflect on these issues, so the ultimate result is exactly what you set out to achieve.

This excellent article is shared from an article published by Nutter McClennen & Fish, LLP with offices in Boston, MA. The link to the article is as follows: 7 Ways To Prepare for Your Estate Planning Meeting

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