Comprehensive Planning. Lifelong Solutions.

Should you add your child to the title of your real property?

By Sarah Schmidt, Esq.

It seems as though there is a myth circulating among aging adults that it is wise or prudent to add a child’s name to the title of one’s real property. Where this myth generated, I have no idea. There is little to be gained by doing so, while the complications and problems it might impose are numerous. If you explain your objective for considering this option to an estate planning attorney, he or she will most definitely propose a way to accomplish the same objective that does not involve adding your child’s name to your title or gifting your house outright to your child during your life.

Are you worried about avoiding probate? Are you worried about protecting your house from Medicaid? Are you looking to leave the house to a particular child upon your death so as to provide him or her a place to live? It doesn’t matter. Adding your child to the title of your real property is not the best way to accomplish any of those objectives.

To list just a few examples of potential complications, if you add your child to the title of your real property, it then becomes subject to his or her creditors, bankruptcy or divorce.  If you have lived in the property for a very long time and its value has appreciated over time, gifting a portion of it now will lose your child’s ability to gain a step-up in basis as to the value of the real property at your death.  Further, gifting your home to your child outright also does not assist in any application for Medicaid, but actually may cause you to be disqualified.

Before you sign any deeds or change title to your home seek the advice of an elder law attorney who can explain the options and most effective strategies to accomplish your objectives.

 

Kit KatAsk Kit Kat – Prescient Oscar

Hook Law Center: Kit Kat, what can you tell us about Oscar, the cat, who can sense when the end of life is near?

Kit Kat: Well, this is an interesting story. Oscar, a seemingly ordinary, domestic shorthair cat, has been a resident in the Steere House Nursing and Rehabilitation Center in Providence, Rhode Island since 2005. He is mostly white, with some tabby markings on his head, back, and tail—a handsome fellow! He was brought in to serve as a therapy cat in the dementia unit. At the start, he was extremely shy, and would hide in a closet or wherever. Then, gradually, he started to come out when he sensed that someone was near the end of life. He would get in bed with the person, and, essentially, hold vigil until they had passed from life. Staff eventually caught on to what was happening when he accurately “predicted” 20-30 deaths in a row.

Oscar is now famous, thanks to a book written by Dr. David Dosa, a health researcher at Brown University and geriatrician who works part-time at Steere House. Dr. Dosa is not sure how Oscar knows when it’s the final hours for a person, but he speculates, “I think that ultimately your guess is good as mine. It (could be) likely that he’s responding to some smell when cells start to break down.” However Oscar has figured out life’s end for people is unimportant. What is important is that he models how we humans can respond at the end of a life. Comfort and just being there may seem like small things, but to the dying person, it is extremely soothing and uplifting. If you would like to learn more about Oscar, read Dr.Dosa’s book entitled Making the Rounds with Oscar. (https://www.crosssroadshospice.com/healthcare-professionals-resources/palliative-care-blog/2016/april/11/meet-oscar-the-cat-that-predicts-death-and-provides-comfort)

 

Upcoming Seminars

Distribution of This Newsletter

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Posted on Friday, April 27th, 2018. Filed under Senior Law News.

Penalty Periods and the 5-Year Lookback: Some Good News

By Letha Sgritta McDowell, CELA

On April 17, the acting director of the Centers for Medicare and Medicaid Services issued a policy clarification to all state Medicaid Directors regarding the imposition of penalty periods for individuals requesting Home and Community Based Services.  This clarification may be beneficial to many hoping to receive services in their home.

Individuals requesting Medicaid assistance with the payment of their nursing care expenses must meet certain eligibility criteria, both financial and non-financial, before Medicaid will begin assistance.  The non-financial criteria includes US Citizenship or lawful permanent resident status, state residency, and a demonstrated need for a certain level of care.  The financial criteria includes meeting certain income requirements and having minimal countable assets (there is no limit on non-countable assets).  In addition, if an applicant or their spouse has made any uncompensated transfers, then Medicaid will impose a penalty based on the asset transfer.

Asset transfers including gifting cash or property, paying bills or expenses for other individuals, or selling real or personal property for less than fair market value.  For example, selling real property for less than the tax assessed value, even if it was a third party sale, is considered an uncompensated transfer.  Paying for a grandchild’s wedding or college tuition is considered an uncompensated transfer.   If a Medicaid applicant has made uncompensated transfers, then the total value of the transfers will be added together and the amount divided by a penalty divisor (set by each state).  The resulting number is a period of months in which Medicaid will not pay for the applicant’s care.

Prior to the Deficit Reduction Act of 2005, the penalty for an uncompensated transfer began in the month of transfer.  Therefore, for many applicant’s gifts made prior to any spell of illness never affected them.  The Deficit Reduction Act of 2005 altered the Medicaid policy on uncompensated transfers by stating that any uncompensated transfer made within the sixty months prior to application had to be disclosed and the resulting penalty would not run until the applicant was otherwise eligible for Medicaid services and receiving institutional level of care services.  It is important to note here that the sixty month lookback only applies to uncompensated transfers (not transfers for value) and that an uncompensated transfer does not automatically render a person ineligible for benefits for sixty months.

For individuals in a nursing facility, the “otherwise eligible for Medicaid services” standard is obvious.  It includes meeting the financial eligibility requirements as well as the non-financial eligibility requirements, including residence in a nursing facility.  For individuals hoping to receive Medicaid services in their homes however, the interpretation of receiving institutional level of care services meant that the penalty period would not begin unless they moved into a nursing facility.  For many remaining in their homes, this put them in limbo because their penalty never began.

The clarification issued on April 17 states that the policy shall now be interpreted to read that the penalty will begin when the applicant meets the financial and non-financial criteria for Medicaid and would otherwise be receiving Medicaid services but for the penalty.  This new policy will allow a penalty period to begin without the need to move into a nursing home.

The reasons for penalty periods and uncompensated transfers are varied and may be part of a broader asset protection plan or may simply be the result of a life action taken with no thought of the need for nursing services.  For whatever the reason, this development will likely be useful for those wishing to receive services in the home.

 

Kit KatAsk Kit Kat – Corolla Herd

Hook Law Center: Kit Kat, what can you tell us about how the wild horse herd is doing in Corolla, NC?

Kit Kat:

Well, the wild horses in Corolla have suffered a bit of decline, so some action is being taken to improve their situation. Enter Gus, a male, wild stallion that has come from another herd on the Shackleford Banks, NC. It is hoped that introducing another genetic line will help improve the health of the Corolla herd, which has become inbred. The Corolla herd is based on a single, maternal line. Over the years, since their introduction by the Spanish in the 1600s, the herd has displayed such defects as locked patellas, parrot mouth, and decreased stature. Gus is descended from the Shackleford Banks herd which has three maternal lines.

Poor Gus! A lot of hope is being placed in him. He’s almost seven, which means he’s reaching his reproductive maturity. Thus far, after being in Corolla for three years, he has not yet fathered any offspring, as far as can be determined. Interestingly, Gus is named after an equine expert from Texas A & M University named Gus Cothran. Cothran is the one who recommended expanding the Corolla herd to 150. Presently, the herd size hovers around 60, due to previous grazing restrictions and birth control measures given to females, like darting them with a birth control chemical.  Next month, a compromise agreement is to be signed by the Corolla Wild Horse Fund, which will allow the herd to increase to between 110-130 horses. The Corolla Wild Horse Fund will also begin monitoring the herd every two months instead of  one time per year to gather information on the herd’s movements and grazing patterns. The goal is, according to Jo Langone, chief operating officer of the Fund, to have healthy horses, while maintaining the integrity and health of the land on which they graze—the Currituck National Wildlife Refuge and the North Carolina Estuarine Research Reserve. (Jeff Hampton, “The new stud on the range: Gus offers the promise of a greater genetic mix to the Corolla wild herd,” The Virginian-Pilot, April 16, 2018 p. 1 & 9)

 

Upcoming Seminars

Distribution of This Newsletter

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Posted on Friday, April 27th, 2018. Filed under Senior Law News.

April 17th Marks the Tax Deadline! Have You Filed Your Return?

By Amanda L. Richter, CPA

Tuesday, April 17th, 2018 is the deadline for most taxpayers to file their federal income tax return and pay any tax liability that is owed. If you miss the deadline to file, you may be assessed penalties for failing to file and failing to pay your tax liability on time. The good news is that there is no penalty if you file a late tax return but are due a refund.

Don’t worry, if you have been procrastinating when it comes to preparing and filing your tax return this year. You may want to consider filing an extension. You may be asking what does the extension do? An extension is a formal way to request additional time from the Internal Revenue Service (IRS) to file your tax return. Filing an extension gives you an additional six months to file and prepare your individual tax return. The extension is done by filling out Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.

By filing an extension, you can avoid a failure to file penalty which is equal to 5% per month (or partial month) of lateness to a maximum of 25%. If you file an extension, you are not filing late, unless you miss the six-month extended due date.

It is important to be aware that an extension of time to file your return does not grant you an extension of time to pay your taxes. Any tax that is due on your return must be paid by April 17th, 2018 in order to avoid penalties for failure to pay your tax liability on time.  The failure to pay penalty is a separate penalty from that of the failing to file penalty. The failure to pay penalty is the “gentler” of the two, running at 1/2% for each month (or part of a month) the payment is late. For example, if payment is due April 15 and is made May 20, the penalty is 1% (1/2% times 2 months (or partial months)). The maximum penalty is 25%.

If you have any questions or need to file an extension for your tax return, please do not hesitate to call our office at 757-399-7506.

 

Kit KatAsk Kit Kat – Bathing Monkeys

Hook Law Center: Kit Kat, what can you tell us about the snow monkeys of Japan and how they like to bathe in hot springs?

Kit Kat: Well, this is quite a funny story! Japan has long been known for their snow monkeys, also known as macaques. One group of macaques lives in the north, near Nagano, the site of the 1998 Winter Olympics. Others of their species live even further north, so all are used to severe, cold weather. However, it is the group near Nagano which is the subject of this article. These macaques are very particular about where they will bathe. Though there are natural, hot springs in their area with water over 140 degrees Fahrenheit, they apparently find these too hot. They have come to prefer man-made pools which hover around the 104-Fahrenheit degree mark. It happened like this. Around 1963, a female macaque wandered into a hotel heated pool. At first hotel guests welcomed her and a couple of other macaques, finding it to be a novelty. As the number of macaques visiting the hotel increased, there were health concerns. So, a park was built exclusively for the macaques, so they could have their own spring-like hot pools, heated to their preferred temperature of 104 degrees.

This in turn aroused the curiosity of scientists. Led by Rafaela S.C.Takeshita of Kyoto University, she and her team wondered what was causing this unique behavior. They have published their results in the journal Primates. They don’t really know why the macaques prefer the slightly warmer pools, but they did find that bathing in hot springs causes their stress levels to decrease. In cold weather, glucocorticoids, which indicate stress levels, naturally go up. Bathing in the hot springs lowers the number of glucocorticoids, hence, reducing the level of stress.

It turns out these macaques are really smart! Who knew there was a scientific explanation for their behavior! (James Gorman, “Hot Springs Lower Stress in Japan’s Popular Bathing Monkeys,” The New York Times, Science section, April 3, 2018)

 

Upcoming Seminars

Distribution of This Newsletter

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Posted on Friday, April 13th, 2018. Filed under Senior Law News.

Administration of Small or Insolvent Estates

By Shannon Laymon-Pecoraro, Esq.

Many people do not understand the complexities involved in administering a decedent’s estate. Estate administration can be even more problematic when the estate is relatively small. As a result, one of the first things we assess when meeting with a new client is the size and solvency of the estate.

An estate valued below $50,000 is, by statute, a small estate in the Commonwealth of Virginia. Although the probate of a will is still required, qualification of a personal representative is not necessary. Instead, the successors to the property of the estate may claim property via an affidavit that attests to a certain set of facts, including the value of the property.  The important thing to note is that, although the small estate affidavit should make the administration simpler, the claiming successor(s) of any property has a duty to safeguard and promptly pay or deliver the small asset as required by the laws of the Commonwealth.

The problem associated with the small estate affidavit resolves around the payment of estate assets as required by law. The Virginia Code outlines an order for which debts are to be paid, and a failure to abide by that order could result in personal responsibility for the debt. When an estate, whether small or large, has assets that are insufficient to cover the full extent of the liabilities, then each liability must be properly assessed and if one level of priority cannot be fully paid, then the liability of that priority must be paid pro rata.

A number of clients in recent years have promptly qualified on insolvent estates and started to negotiate payments with vendors, often paying creditors out of the order of priority. Although there were no ill intentions, the personal representative, as a result of the incorrect payments, was held personally responsible for the errors.

Before rushing to the court to qualify as Executor or Administrator, you should meet with someone who can discuss the particular circumstances of the estate. This will not only provide for efficient administration, but can limit your personal liability.

 

Kit KatAsk Kit Kat – Why Curly Hair?

Hook Law Center: Kit Kat, what makes hair curl in sheep?

Kit Kat: Well, this is interesting.  There have been two competing theories for quite some time. New research indicates that neither is completely correct. Researchers in New Zealand and Japan have recently published their findings in the Journal of Experimental Biology. What they have determined, however, is that differences in certain types of cells are interacting to make  hair curly. They are not just not sure how the interaction works. They are interested in solving the mystery, because it may shed light on why human hair is curly in some and not others. Human hair has more complex tangles, unlike sheep hair, so sheep were chosen for the study. All will give us more information on how species have adapted over time.

The first theory postulates that a curly strand of hair has cells on one side (orthocortical cells) that divide more quickly than the other type of cells (paracortical cells). Orthocortical cells tend to be longer than paracortical cells. Therefore, the curve of the curl would be determined by the ratio between the two types of cells. This theory was debunked when they discovered there was not a difference in the number of cells inside the curve v. outside the curve.

The second theory revolved around the issue of cell length. Orthocortical cells do tend to be longer than paracortical cells, but there is a great deal of variation in the lengths, so there was not reliable standard to say that the ratio always works in a certain way. As Dr. Duane Harland, one of the scientists conducting the study, commented, “You could not say that having 60% orthocortical cells and 40% paracortical cells will always lead to a 15-degree curve.” What they did find, however, is that in general, on any given strand of hair, an orthocortical cell will always be longer than any paracortical cell. So, there is some link between the two types of cells. Further study will have to determine what that relationship is. (Veronique Greenwood, “What makes Some Hair Curly? Not Quite What Scientists Thought,” The New York Times, Science section, March 22, 2018)

 

Upcoming Seminars

Distribution of This Newsletter

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Posted on Monday, April 9th, 2018. Filed under Senior Law News.
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