Monthly Archives

March 2016

10 Questions About Durable Power of Attorney

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Durable Power of Attorney

Whether young or old, married or single, a durable power of attorney can be an effective, time saving and cost avoiding document that all persons should consider including in the Estate Plan.

  • What is a power of attorney?

A power of attorney is the grant of legal rightsPower of Attorney and powers by a person, the “principal,” to another, the “agent” or “attorney-in-fact.” The attorney-in-fact, in effect, stands in the shoes of the principal and acts for him or her on financial and business matters. The attorney-in-fact can do whatever the principal may do—withdraw funds from bank accounts, trade stock, pay bills, cash checks—except as limited in the power of attorney. This does not mean that the attorney-in-fact can just take the principal’s money and run. The attorney-in-fact must use the principal’s finances as the principal would for his or her benefit.

  • When does the power of attorney take effect?

Unless the power of attorney is “springing,” it takes effect as soon as it is signed by the principal. A “springing” power of attorney takes effect only when the event described in the instrument itself takes place. Typically, this is the incapacity of the principal as certified by one or more physicians.

  • Does the power of attorney take away a principal’s rights?

No, absolutely not. Only a court can take away a principal’s rights in a conservatorship or guardianship proceeding. An attorney-in-fact simply has the power to act along with the principal.

  • Can the principal change his or her mind?

Certainly. A principal may revoke a power of attorney at any time. All a principal needs to do is send a letter to his or her attorney-in-fact telling them that their appointment has been revoked. From the moment the attorney-in-fact receives the letter, he or she can no longer act under the power of attorney.

  • Can an attorney-in-fact be held liable for his or her actions?

Yes, but only if he or she acts with willful misconduct or gross negligence.

  • Can an attorney-in-fact be compensated for his or her work?

Yes, if the principal has agreed to pay the attorney-in-fact. In general, the attorney-in-fact is entitled to “reasonable” compensation for his or her services. However, in most cases, the attorney-in-fact is a family member and does not expect to be paid. If an attorney-in-fact would like to be paid, it is best that he or she discuss this with the principal, agree on a reasonable rate of payment, and put that agreement in writing. That is the only way to avoid misunderstandings in the future.

  • What if there is more than one attorney-in-fact?

Depending on the wording of the power of attorney, you may or may not have to act together on all transactions. In most cases, when there are multiple attorneys-in-fact the power of attorney document specifies that they can each act independently of one another. Nevertheless, it is important for them to communicate with one another to make certain that their actions are consistent.

  • Can the attorney-in-fact be fired?

Certainly. The principal may revoke the power of attorney at any time. All he or she needs to do is send the attorney-in-fact a letter to this effect. The appointment of a conservator or guardian does not immediately revoke the power of attorney. But the conservator or guardian, like the principal, has the power to revoke the power of attorney.

  • What kind of records should the attorney-in-fact keep?

It is very important that the attorney-in-fact keep good records of his or her actions under the power of attorney. That is the best way to be able to answer any questions anyone may raise. The most important rule to keep in mind is not to commingle the funds the attorney-in-fact is managing with his or her own money. Keep the accounts separate. The easiest way to keep records is to run all funds through a checking account. The checks will act as receipts and the checkbook register as a running account.

Want to learn more about Durable Power of Attorney’s? Contact our office to schedule a no-cost consultation to discuss how Powers of Attorney fit into your current Estate Plan.

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Learn The 9 Things Every Trustee of Real Estate MUST Do!

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Trustee of Real Estate Checklist

Many people realize the benefits of transferring the ownership of real estate over to a Trustee of a Trust. Often times the people who create the trust serve as Trustee. However, sometimes Trustees are called upon to take a more active role in managing a property. If and when that day occurs, the Trustee must be prepared to spring in action or run the risk of being accused of breach of their fiduciary responsibilities.

FRET NOT TRUSTEES – we have a checklist of things you need to do when you are called to action.

There are a whole host of things, but among some of the more important, you should consider if a residence will be vacant for an extended time:

  1. Changing locks;
  2. Making a detailed inventory of valuables and keeping them stored safely;
  3. Installing an inexpensive security system (which will dial out to  security agency in the event of a break in);
    house

    Trustee’s who hold title to real estate have much to do!

  4. Monitoring pipes if in a colder climate;
  5. Requesting mail be forwarded;
  6. Halting newspaper deliveries;
  7. Advising homeowner’s insurance agent of the vacancy and make sure property is adequately insured;
  8. Arranging for condo and/or coop fees to be paid on a regular basis.
  9. Figuring out whether to keep utilities on or off.

Also, while seeming obvious, do not forget to check: To see if there are perishable items in the residence or in storage and address them accordingly; If there are pets or other animals that need care and/or homes.; Whether property and casualty insurance coverage continues on personal effects, motor vehicles and items in storage.

Conclusion: If you are a Trustee, it is advisable to seek assistance from a professional who can help you navigate issues that arise when taking on the responsibility of a fiduciary.

 

Estate Executor Not Liable For Unpaid Taxes

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Executor Faced With A Tax Bill Without Any Funds To Pay It

NEWS FLASH:  Executor of an estate was subject to federal estate tax, but didn’t have enough assets to pay the tax. (Many of the estate assets were not probate property, such as joint accounts owned with persons other than the decedent’s spouse.) The estate tax return (Form 706 was filed, but the estate tax wasn’t paid.

To satisfy the estate tax, the executor obtained a restraining order over jointly-owned accounts and sought contributiestate-taxons from estate beneficiaries. Eventually, contributions from two beneficiaries and funds from the joint accounts were received and then used to pay federal and state estate taxes and an amount distributable to a beneficiary.

The IRS issued a notice of fiduciary liability to the executor, saying he was liable under IRC Sec. 6901 for the amounts distributed to the state and the beneficiary. The Tax Court disagreed, determining that because the estate wasn’t insolvent at the time of the distributions, the executor wasn’t personally liable for the federal tax deficiency. Scott Singer, TC Memo 2016-48 (Tax Ct.).

Concerned about the impact of taxes on your estate plan? Contact out office to discuss your options!

What Are The Top Rated Nursing Homes In Rhode Island?

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Nursing Homes Ratings in Rhode Island

US News and World Report has rated the top of the Rhode Island nursing homes and listed them on their website. Listed are those facilities with a rating of five stars from the federal Centers for Medicare & Medicaid Services for their overall performance in health inspections, nurse staffing and quality of medical care.

Do Rhode Island Nursing Homes Make the Grade?

About 31 percent of all nursing homes in Rhode Island earned an overall five-star rating. Visitors to the site can narrow their search for a Best Nursing Home by clicking on a metro area or region or by entering a ZIP code.

Know what services nursing homes offer.

Like any business or facility, each has its particular strengths and areas of improvement. Research must be done to determine if the nursing home you select offers the best care and expertise in the are your loved one is most in need of. Cognitive Issues, mobility issues, behavioral issues; know which nursing home can best address your loved ones needs.

Want to discuss what is the best nursing home is for you or a loved one and how you can pay for that nursing home? Contact us to schedule a consultation.

Click HERE for the full rankings.

US News Report

What Scares the Government Most About The Cost of Long Term Care

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Long Term Care – the growing expense

For years, federal and state governments have shied away from the problem of providing long-term care for ailing seniors – and for good reason. While mounting costs of Social Security, prescription drugs, and federal health care programs get a lot of attention, the staggering costs of providing community-based social services and nursing home facilities and in-home care to seniors are draining the savings of average Americans and posing frightening long-term fiscal challenges for government officials. “Responsibility for long-term servicfamilye support is shared among seniors and people with disabilities themselves, family, friends, and volunteer caregivers; communities, state, and federal government,” Alice Rivlin, the former Congressional Budget Office Director and an expert on long-term elder care, testified recently before a House committee. “This shared-responsibility system is severely stressed, and will become increasingly unable to cope as the numbers needing care increase.” Moreover, the rapid growth in this spending is forcing policy makers to make tough budget choices between Medicaid and other spending for the elderly and education and other investments in young people, Rivlin added.

Long Term Care Spending Reality

Spending on long-term care for seniors by the federal government, states, families and individuals for those 65 and older will increase from 1.3 percent of the Gross Domestic Product in 2010 to 3 percent of GDP in 2050, according to the Congressional Budget Office. While some private health insurers provide long-term care policies to meet those future costs, the premiums are often astronomical and out of the grasp of middle income and even wealthier families.
Click Here to read The Fiscal Times full article

The 6 Biggest Challenges To Protecting Assets From Nursing Home Expenses

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Protecting Assets and Nursing Homes – Knowing The Issues

Protecting assets from the costs associated with a nursing home usually causes people to run into 6 major problems:

Problem 1: The 60 month Look Back: On February 8, 2006, President George W. Bush signed The Deficit Reduction Reconciliation Act of 2005. The changes make it more difficult than ever to qualify for Medicaid eligibility.

The look-back period for transfer of assets is now 5 years (instead of 3 years) prior to applying for Medicaid coverage.

Problem 2: Gifting: Giving money away can frequently be more expensive than keeping it and finding other ways to protect it. Though each long-term-care-pic1person can gift $14,000 to a person per year, these gifts are disqualifying transfers for Medicaid. In addition, both federal and state gift tax laws (imposed in a number of states) must be considered.

Problem 3: Too much Income: Even if you do manage to effectively give away all of your assets (spousal impoverishment provisions allow the non-confined spouse to keep all financial assets up to a maximum of $119,220 in 2016 and a minimum monthly needs allowance of $1,991.25 and maximum of $2,980.50). The at-home spouse can keep the primary residence, a car, personal and household effects, and a small amount for burial. Many individuals have too much income to enable them to qualify for Medicaid. The income of the community spouse is not counted in determining Medicaid eligibility.

Problem 4: Loss of Independence: Most individuals who embark on Medicaid Planning use Income Only Trusts, which require the cooperation of the Trustee of the Trust when individuals seek to sell a property and change living arrangements or would like to access the Trust assets.

Problem 5: Ensuring Control of Assets: Once one gives money away, legally it is no longer his. Attorneys have numerous, sometimes heart wrenching, stories of parents who have given assets directly to children who have subsequently sqGrandparent walking babyuandered those dollars through drug abuse, gambling, etc. Even the “best” and “most loving” children are still subject to bankruptcy, divorce, law suits, etc. Sometimes children die before their parents and the parent’s money sometimes does (and sometimes does not) return to the parents. When couples seek to protect their assets, they must transfer the assets to proper vehicles and trusts to ensure loss of control is avoided or minimized.

Problem 6: Choice of Nursing Facility: Many individuals have discovered all too late that “money talks.” Many nursing homes accept both private pay and Medicaid patients; the nursing homes however, are generally reimbursed at a far lower daily rate for a Medicaid patient than a private pay resident. As a nursing home owner or admissions officer, if you had two individuals requesting a bed in your home -one who could pay privately at the full daily amount and one who had (or claimed to have) no money and would need to depend on Medicaid, whom would you prefer (and give preference to)? Many of the finer nursing facilities require that the prospective resident be able to pay privately for six months, a year, two years, or even longer, before the application is even considered. A properly drafted and planned estate will anticipate this possibility and provide couples with the flexibility to address this situation.

Conclusion: After analyzing these six potential pitfalls of disposing of one’s assets (and being prepared to use Medicaid if long term care becomes a necessity) it becomes apparent that only through proper planning can these pitfalls be avoided. Many of these challenges can be avoided if discussed and planned in advance. The use of Income Only Trust are critical in the planning and execution of these goals. Couples will rely on the skill and experience of their attorney in planning and drafting a plan that can and will work for them.

Want to discuss a plan that is customized to you and your specific goals?  CoCouple walking bannerntact our office for a no-cost consultation.

ATTORNEY MATTHEW J. LEONARD ACHIEVES HIGHEST PEER REVIEW RATING

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Earning a 5.0 rating on a scale of 5.0 Per Martindale-Hubbell

PROVIDENCE, RHODE ISLAND, March 3, 2016– Attorney Matthew J. Leonard, Counsel with the law firm Salter McGowan Sylvia & Leonard, Inc. and owner and operator of the website www.RIMedicaidPlanning.com is pleased to announce that he has achieved a peer review rating of 5.0 on a scale of 5.0 and has been endorsed for Ethical Standing, as reported by Martindale-Hubbell, an independent attorney evaluating company.

Martindale-Hubbell Peer ReviewMr. Leonard earned ratings of 5.0 on a scale of 5.0 in all measured categories which included: Legal Knowledge, Analytical Capabilities, Judgment, Communication Ability and Legal Experience. The Areas of Practice that the criteria applied to included Estate Planning.

“I have been practicing law since 2000 and have always admired and respected my peers and colleagues who earned the distinction of a 5.0 rating, I have found that these ratings are an accurate reflection of the skill and experience of the attorneys who have earned them, I am honored to have earned the respect from my peers to be among their company.” – Matthew J. Leonard, Esq.

Martindale-Hubbell Peer Reviewed

Highest Rating in Peer Reviewed

Matthew J. Leonard, Esq. is of counsel at the Providence law firm of Salter McGowan Sylvia & Leonard, Inc., where he practices in the areas of: Estate Planning and Asset Protection Planning; Medicaid Planning; Elder Law; Real Estate; Probate Administration; Business Formations and Transactions and Related Litigation. He is a member of the Rhode Island and Massachusetts bar associations, and The Florida Bar. Mr. Leonard is a frequent author and lecturer on topics such as: “Demystifying Asset Protection Vehicles,” “The Probate Process From A to Z,” “Drafting the Essential Components of a Living Trust,” “Buying or Selling a Business in Rhode Island,” “Drafting Effective Wills and Trusts,” “Resolving Estate Will and Trust Contests,” “Protecting Assets While Qualifying for Medicaid,” “Top Elder Care Strategies,” and “Elder Law Home Care and Caregiver Agreements” and “Trusts 101”. He is a former member of the Town of Smithfield Planning Board and the past president of the Providence area Providence College Alumni Association.  Mr. Leonard is the recipient of the Women’s Resource Center of Rhode Island “Men Who Make A Difference Award” and the Providence College Alumni Association Mal Brown Award.  He is a principal owner of Murphy & Fay Title and Escrow, LLC. Mr. Leonard earned his B.S. degree from Providence College and his J.D. degree from Roger Williams University School of Law.

Mr. Leonard’s Lawyer Profile can be found on Martindale-Hubbell at the following website:

http://www.martindale.com/Matthew-J-Leonard/2058367-lawyer.htm?view=cr

About Martindale Hubbell on their website: Our 140-year-plus history began in 1868, when lawyer and businessman James B. Martindale first published The Martindale Directory. Its stated purpose was “to furnish to lawyers, bankers, wholesale merchants, manufacturers, real estate agents, and all others…the address of one reliable law firm, one reliable bank, and one reliable real estate office in every city in the United States…”

By 1896, The Martindale Directory included the basic information that still appears in our lawyer and law firm Profiles, as well as ratings and a section on foreign lawyers and firms.

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If you would like more information about this topic, please contact Matthew J. Leonard, Esq. at 401-274-0300 or email at mleonard@smsllaw.com.

Social Media and the Elderly: The Next Big Wave!

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Social Media – its not just for the kids anymore

Many might think that social media is the exclusive domain of the younger generation. However, many of our older adults have enthusiastically adopted it to keep up with the times as well as their old acquaintances and younger family members. Grandparents are becoming proficient in alien things like Skype and Facebook and liking it. It has become a healthy emotional outlet and word of its benefits has spread like wildfire among the elderly.

Historically many people who were not raised with computers have been hesitant to adopt them into their life and lifestyles unless absolutley necessary. This process of pulling many folks into the technology for often work purposes has caused many to shy away. Finally though, many are seeing user friendly and wide acceptance of the technology and a desire to connect with the younger generation. Nothing makes someone feel young than being able to keep up with those who are young, and social media offers that opportunity.

Social Media: Connections and Research

The internet not only allows for connections to family and friends, it also opens up a vast database to research for news, entertainment and medical information. As folks become increasingly comfortable with the technology their ability to ask questions and research answers will become limitless!

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Read the Full Article from Huffington Post.

 

What are the 4 Alternatives to Nursing Homes?

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“I don’t ever want to go to a nursing home.”

Certainly, when people are asked to list goals in life, “living in a nursing home someday” is never on the list.

There are however 4 commonly used alternatives for seniors and elders prior to the need for living in a fully skilled nursing home:

1. Continuing Care Retirement Communities (“CCRC’S”)  can provide an alternative solution for many. Such village_at_waterman_lake_assisted_livingcommunities vary enormously in their structure. Some provide life care i.e. an individual may start by living in an apartment, may move to an assisted living wing -where nursing staff is available if necessary and meals may be provided, and intermittently or finally move into the nursing home portion of the community. Many such communities require up-front fees ranging from approximately $25,000 to $900,000 which may or may not be refundable in part or full upon the death of the resident. In addition, there are monthly fees ranging from a few hundred dollars to a few thousand dollars. Frequently, these communities self-insure and guarantee lifetime health care for the residents.

2. Adult Day Care Centers– are similar to child day care centers with which we are more familiar. Adults who need supervision, due to cognitive and/or physical impairment, can be “dropped off” at the beginning of the day. Nursing staff and programming is available throughout the day and the individual returns home for the night. Most long term care policies will pay for adult care.

3. Home Health Care – is another way of dealing with long term illnesses. Most individuals prefer to remain in their own homes for as long as possible. If you were to have a long term care policy of insurance, most comprehensive policies address this preference. Most policies will pay for home health care only if provided through a licensed home health care agency. Some policies will pay for home health care at a percentage of the full nursing home daily benefit amount. A new type of life care at home plan based on the concept of CCRC’s (requiring an upfront fee and a monthly payment) is now being marketed in some areas.) However, if you should not have a LTC policy, many families find themselves private paying for these services or possibly applying for Medicaid if eligible and receiving in-home care services.

4. Assisted Living – many people who live in nursing homes do not really belong there. Frequently, individuals can function very well in an assisted living or personal care facility. These are licensed facilities which often enable individuals to remain in an apartment-like setting. Meals are usually provided and nursing staff is available to help adNewport_Lighthouse_RI_MIminister medicines, handle emergencies, assist when necessary. Often personal care facilities cost about one half as much as nursing homes. Long term care policies generally pay benefits in assisted living facilities as long as the individual qualifies under the terms of the contract. In Rhode Island there are 35 Assisted Living Facilities. The average cost of Assisted Living in Rhode Island is $5,325 per month.

 

Want to learn more about how you can help a loved one plan for their future needs?  Contact our office to schedule a no cost consultation.