Comprehensive Planning. Lifelong Solutions.

Selecting an Elder Law Attorney

By Shannon Laymon-Pecoraro, CELA

As with any form of professional service, selecting the right professional matters. A recent study by Hinge marketing indicated that 68% of buyers of professional services valued “expertise and specialized skill” when selecting a professional. While attorneys are trained in a wide variety of areas, the study revealed that clients want to know that their attorney is committed to the particular service they are seeking, and that the attorney is not just a “jack-of-all-trades and master of none”.  In an era where an increasing number of attorneys advertise elder law services, it can be a complicated process for clients to locate the elder law attorneys who are committed or experienced in the field. My clients over the years have asked what they should look for when interviewing elder law attorneys, and I have compiled the following information to help understand more about the field and its practitioners.  

  1. Elder Law is not just estate planning. Elder Law is a specialized legal area that focuses on planning for chronic illness. This practice area involves, among other things, legal aspects of health and long-term care planning, surrogate-decision making authority, disposition of estates, and the tax impact of it all. While estate planning is one component of the practice area, what really makes an attorney an elder law attorney stand out from estate planning attorneys will be their intricate understanding of public benefits, which will include the Social Security, Medicare, Medicaid and Veteran benefit systems. 
  • There is a Certified Elder Law Attorney (CELA) designation.  The National Elder Law Foundation (NELF) certifies elder and special needs law practitioners. The CELA designation ensures that the practitioner not only has significant experience and substantial involvement in the field of elder law, but has taken the time to submit to a comprehensive exam, that has a pass rate below 50%, and peer evaluation. The designation allows the community to identify which attorneys have more than just a basic understanding of elder law cases.  
  • Committed practitioners participate in elder law and special needs planning organizations. You should ask your attorney what organizations they are not just members of, but actively participate in. Important organizations in the field will include the National Academy of Elder Law Attorneys (NAELA) and its local chapters (in Virginia it would be the Virginia Academy of Elder Law Attorneys (VAELA)), Special Needs Alliance (SNA), and the Academy of Special Needs Planners (ASNAP). Many practitioners may also be Fellows of the American College of Trust and Estate Counsel (ACTEC), a national organization of lawyers who have demonstrated their expertise in the trust and estate practice.
  • Dedication to the practice of elder law. A tell-tale sign of a true elder law practitioner will be that the primary focus of their practice will be dedicated to elder law. You should assess whether your attorney’s practice has a particular emphasis on elder law, and what percentage of the particular attorney’s cases are related to elder law and special needs planning.

There is a saying that if you think hiring a professional is expensive, you should hire an amateur. We understand that the true cost of a long-term care planning engagement is not only the legal fees for representation, but also the out-of-pocket medical expenses. As a result, Hook Law Center, P.C.’s experience and dedication to the field of elder law enables us to efficiently manage a client’s engagement so as to minimize the cost to the client. Our firm truly focuses on elder law – you will not find our attorneys representing clients in criminal proceedings, real estate closings, divorce or custody matters, or bankruptcy cases and we have three CELAs – which means that we are committed to not being a face in the crowd or a “jack-of-all-trades,” but being the “masters” of elder law.

Ask Kit Kat: Horse Toes

Hook Law Center: Kit Kat, what can you tell us about how a horse’s hoof forms in utero?

Kit Kat: Well, this is really fascinating. Everyone knows that a horse’s hooves appear to be a single unit with a hard outer covering consisting of some of the same material as the human nail. However, scientists have recently realized that “a horse’s hoof is literally a giant middle finger. It seems to be the remnant of a foot that once had five full toes, with only three remaining visible—two vestigial digits are still on either side of the large, hardened middle digit, but there is no trace of the others,” writes Veronique Greenwood in a recent New York Times article. Ms. Greenwood’s observations are the result of reviewing the work of Dr. Kathryn Kavanagh, a biologist at the University of Massachusetts, Dartmouth. Dr. Kavanagh and her colleagues happened to be examining some preserved horse embryos, and they saw some things which no one had ever noticed. In the early stages of gestation, in the hoof area, there were clearly clusters of cells in groups of five, not three. The stage does not last long—perhaps as short as 2 days. They know with precision the length of the stage, because the cell samples were taken from horses artificially inseminated on known dates. Dr. Kavanagh comments, “We think it wasn’t recognized before because the appearance was so brief. It only last a couple of days, and we got really lucky.”

This discovery seems to affirm other findings by other scientists in 2018 who noticed that horses have many more blood vessels and nerves in their legs than would be necessary for an animal with a large single toe. Dr. Kavanagh and her colleagues wonder if other animals like camels and emus would follow the same pattern. This discovery may lead to further study—why does an animal with only one toe still maintain the evolutionary stages of development of an ancestor who may have needed or functioned with a very different kind of hoof? There are implications for the understanding of all evolutionary processes. Why do some processes evolve and others don’t? Stay tuned for further developments. (Veronique Greenwood, “A Horse Has 5 Toes, and Then It Doesn’t,” The New York Times, Feb. 8, 2020)

Posted on Friday, February 21st, 2020. Filed under Senior Law News.

What to Do When Your Parent is in the “Gray Zone”

By Emily Martin, Esq.

For those of us who have aging parents, it can be difficult to tell if there is a problem, or if your parent is developing dementia. One day, Mom may be fine, but the next day, you find her keys in the freezer. Is she really losing it, or is it natural forgetfulness?

The “grey zone” is the difficult place between being able to make decisions and being unable to manage your own affairs. Many times, when seniors start to experience cognitive decline, it is often a gradual decline. Someone who is diagnosed with dementia, especially Alzheimer’s disease, may not immediately lose the capacity to make financial and legal decisions. However, it is often hard to tell when the time has come for someone else to take over these decisions for them.

With an Alzheimer’s disease diagnosis, the judgment needed to make good financial decisions can be impaired even at the beginning of the disease. Even if your parent looks and feels fine and acts normally, the truth is that those who suffer from dementia are less able to tell when something is not quite right about a financial offer or business proposal. This can create a multitude of issues, including arguments among family members and from the senior himself. Some family members may argue that Dad has always been in charge of the bills and has always made the investment decisions. They may be afraid of stepping on Dad’s toes when Dad is still able to understand that his decision-making capabilities are being taken away. On the other hand, Dad himself might object to no longer being able to handle his finances. He may become paranoid and begin to accuse family members of trying to “take his money.” 

Another potential issue is that those with cognitive impairment are vulnerable to financial abuse – whether it be from family members, scam artists, or caregivers. When people are in the early stages of dementia, it can be easy to overlook this type of problem, especially if the impairment is not immediately obvious from speaking with the person. The fact is that dementia can cause the brain to undergo changes without any outward physical signs of a problem.

So what is the solution for these problems? Even in the early stages of dementia, it is vitally important that your parent appoint someone else to take over the handling of financial matters through a financial power of attorney. If you wait until your parent has completely lost the ability to make financial decisions, you may have to pursue a conservatorship instead – a months-long process that can cost thousands of dollars in attorneys’ fees and filing fees.

Another useful solution is for the family to have a neutral third party determine that your parent is unable to make decisions. Have a qualified neuropsychologist conduct testing that will determine what Mom’s condition is and how it will impact her decision-making ability in the future. This way, if Mom argues that nothing is wrong with her, the information about her illness will be coming from someone other than her children or family members.

Finally, another suggestion is holding regular family meetings with a neutral person such as a mediator to help prevent arguments among family members from interfering with what is the best decision for your parent. This can be especially helpful, if one child does not think it is necessary for someone to take over the parent’s finances, or if the parent is arguing that he/she is not incapacitated.

In order to make sure that you and your loved ones are protected before there is an issue with the ability to handle financial and legal decisions, it is important that you meet with an experienced elder law attorney who can advise you on the best plan for your unique situation.

Ask Kit Kat: Wolf Pups at Play

Hook Law Center: Kit Kat, what can you tell us about what scientists have learned about wolf pups that play fetch, just like regular dogs?

Kit Kat: Well, as usual, science does tell us some interesting things that may have crossover applicability to other species. Although it was a very small sample of only 13 wolf pups, Christina Hansen Wheat and Hans Temrin, biologists at Stockholm University made the following observation—three eight-week old wolf puppies retrieved a ball thrown by a stranger, without any training. The significance of this, according to Hansen Wheat and Temrin, is that this indicates that sociability in wolves has been present for a very long time. Dogs evolved from wolves, but the scientists theorize, that dogs’ ability to engage with humans evolved not through domestication, but was present early on through the genetic material they inherited from wolves. Elinor Karlsson at the Broad Institute in Cambridge, who also studies the genetics of dogs, concurs when she says, “I think we too often assume that things we observe in dogs are special and unique, without ever really ever proving that.” Though only 3 of the 13 wolf pups fetched, which may seem like a small number, the scientists still think it is significant. They further observe that not all dogs fetch. I personally can attest to that. My mother had a collie growing up named Prince. He was a wonderful dog, great with children, but he never would fetch a stick or ball.

The scientists also point out that the evolution of different breeds of dogs like the short legs of Corgis and dachshunds—resulted from human interference. Another dog characteristic—the ability to digest starch better than wolves—came about from the increase in the number of copies of a specific gene. This occurred through evolution, rather than domestication. Scientists like these will continue to investigate the differences between wolves and dogs, and how genes and human intervention play a role in each species’ development. (James Gorman, “What Wolf Pups That Play Fetch Reveal About Your Dog,” The New York Times, Jan. 16, 2020)

Posted on Monday, February 17th, 2020. Filed under Senior Law News.

Can a Lengthy Probate be Avoided

By Rachel Snead, Esq.

What have you heard about the probate process? That it’s a long, expensive process that should be avoided at all costs? That it wasn’t so bad after all? The reality is that both scenarios can be true. It simply depends on how complicated and extensive an estate is.

Some estates are so small they don’t even require probate. Others are quite large, requiring deliberate and careful legal planning to avoid a probate disaster. In either case, you might want to arrange your estate to avoid probate for a variety of reasons ranging from a lack of available cash flow for your heirs to a lack of privacy regarding your personal affairs. Whatever your reason, probating a small estate is a much simpler and faster process in Virginia than a lengthy full probate with all of its statutory requirements. What if you could structure an estate plan to avoid probate and have assets move directly to your heirs? You can!

Under Virginia Code Section 64.2-601, when the total estate does not exceed $50,000, a successor in interest, typically an heir-at-law or a beneficiary of the Will, can collect and distribute the assets without having to go through the full probate process. If there is a Will, it must be admitted to probate, but an executor or personal representative does not need to be appointed. This is known as “putting the Will to record” or recording the Will.

To claim the assets without being appointed executor or personal representative, the person collecting the assets must provide an affidavit (an Affidavit of Collection) signed by all the lawful successors in interest stating that:

  1. The total estate does not exceed $50,000;
  2. At least 60 days have passed since the decedent’s death;
  3. No application for the appointment of an executor or personal representative is pending or has been granted in any jurisdiction;
  4. The Will, if there is one, has been admitted to probate;
  5. The claimant is entitled to collect the assets and the basis of entitlement;
  6. The names and addresses of all other successors in interest;
  7. The name and addresses of the successors designated to receive the assets on behalf of all the successors;
  8. An acknowledgment that the claiming successor has a fiduciary duty to safeguard and promptly pay the assets to the law successors in accordance with Virginia law.

While an executor or personal representative is not required to be qualified on a small estate, many attorneys advise potential personal representatives or executors to do so. Doing this gives the executor or personal representative the Letter of Qualification he or she will need to collect the assets and take any other action for which a Letter of Qualification may be necessary, such as accessing a safe deposit box or liquidating stocks, bonds or other assets titled in the decedent’s name.

This process for a small estate is much simpler than that of a full probate proceeding. Probate of an estate that exceeds $50,000 requires an executor or administrator, depending on whether there was a Will or not, be qualified to administer the estate of the decedent thereby accepting personal liability. The executor or personal representative is then responsible for filing an inventory after four months from their qualification date as well as a final accounting to the relevant commissioner of accounts after 16 months from qualification. But this can be avoided as long as the decedent’s estate is under $50,000. If the estate is under $25,000 an affidavit of collection isn’t even required.

This does not mean gifting away everything you have worked hard for or that your estate is of little value. It simply means that your assets, whatever they are, are titled in such a way that they can pass directly to the intended beneficiaries on your death, thereby never becoming a part of your estate. This can easily be accomplished with planning and foresight. 

For example, Transfer on Death deeds (TODs) can be prepared for real property, so that on an individual’s death it automatically passes to the person named in the deed. Payable on Death (POD) beneficiaries can be named on bank accounts, stocks, bonds, life insurance policies, etc., so that the asset becomes payable to a beneficiary on the death of the owner. Real property and accounts can be titled “joint with the right of survivorship” (most married couples who own a home or bank account have joint title with right of survivorship). On the spouse’s death, that property automatically becomes the property of the other. You could even set up a Trust and have your assets titled to the Trust itself, so that upon your death the assets aren’t subject to probate.

All of these options are a means to bypassing probate, meaning a simpler and quicker process for your loved ones during a difficult and emotional time. This type of estate planning is easier to accomplish than you would think. If you are interested in creating a structured estate plan to avoid probate be sure to talk to an attorney who can advise you on your state’s laws as the requirements vary from state to state.

Ask Kit Kat: Sharks in Winter

Hook Law Center: Kit Kat, are there really sharks off the Outer Banks in North Carolina in the winter?

Kit Kat: Well, not usually. Most sharks winter in warmer waters like Florida. However, a small number don’t migrate at all. Also, some females only migrate south every other year, due to exhaustion from birthing shark pups, according to Tyler Bowling, program manager of the International Shark Attack File at the University of Florida. So, a shark biting a surfer on the foot in Rodanthe, NC in mid-January was extremely unusual. It was the only the 2nd attack in winter off NC ever, the first in January, and there had been a gap of 20 years between the two.

The bite in January was by a small blacktip shark. Gavin Naylor, program director of the Int. Shark File, suspects it was due to unusually warm temperatures in January off the NC coast. Most of this species depart for Florida at this time of year. According to the Int. Shark File, the United States in 2019 had the most shark attacks worldwide—21 in Florida, 9 in Hawaii, 3 in both NC and California. Australia came in second with 11 bites. Naylor comments, sharks don’t hunt out humans. They’re usually just looking for food. He says, “If one does bite a person, it’s often young and still trying to figure out its prey. When they target a fish, they chomp and swallow. When they bite a human, they typically let go.”

For those who vacation in North Carolina, beware of the summer months. Over the past 20 years, there have 56 bites in all, according to the Int. Shark File.  July led with 23, and June and August divided the remaining 33. Mostly, though, the sharks stay a bit off the coast. They are mostly likely to be where people do deep-sea fishing. Sometimes, there are dramatic stories of sharks jumping at large fish caught from charter boats, cutting the fish in half. Staying alert to your surroundings is key. We must share the beautiful ocean with all of the world’s creatures. (Jeff Hampton, “Outer Banks shark bites are rare in the winter; last week’s is only 2nd on record,” The Virginian-Pilot, January 23, 2020)

Posted on Friday, February 7th, 2020. Filed under Senior Law News.

A New Look at Charitable Giving in the Age of SECURE

By Letha Sgritta McDowell, CELA CAP

On December 19, 2019 Congress passed the SECURE Act which drastically changed the tax scheme for beneficiaries of qualified retirement plans. Before SECURE, the beneficiary of a qualified retirement plan could take advantage of continued tax deferral. This was often known as the “Stretch IRA.” Post SECURE, with a few notable exceptions such as a surviving spouse or a person with a disability, qualified plans must be withdrawn within 10 years of the death of the beneficiary. This requirement to withdraw qualified funds early will drastically increase the income tax paid by beneficiaries due to accelerated withdrawal – placing many beneficiaries in higher income tax brackets. These changes are causing many with some chartable intent to take a new look at an old planning technique, Charitable Remainder Trusts (“CRTs”).

Charitable Remainder Trusts have been popular in high net worth tax planning for some time. They allow a taxpayer to transfer assets to an irrevocable trust that will provide a benefit to themselves or other beneficiaries for either a specified term of years or for the life of the beneficiaries. At the remainder of the period, any remaining assets transfer to the charity specified. The creator of the trust would receive an immediate charitable deduction for income tax purposes based on the present value of the remainder that the charity is expected to receive. It is an excellent planning technique for individuals who are charitably-minded to remove highly appreciated property from their estates. In light of the SECURE Act, this technique may be beneficial to individuals of moderate wealth to diffuse some of the tax consequences by stretching the payments of qualified funds over a longer periods and ultimately benefitting a charity.

CRTs take two separate forms, one provides an annuity amount, known as a Charitable Remainder Annuity Trust (“CRAT”); the other provides a unitrust amount, a Charitable Remainder Unitrust (“CRUT). A unitrust amount is a percentage of all of the assets in the trust, regardless of whether it is considered income or principal.  With qualified retirement funds (IRA, 401(k), SEP, SIMPLE, etc) the owner would name the CRT as the beneficiary of the qualified plan. The CRT would then provide for either the annuity or unitrust amount to pay to the desired beneficiary. The CRT itself pays no income tax, and the beneficiary pays tax on the amount paid to him or her in the year.

For example, an individual could leave a $350,000 IRA to a Charitable Remainder Unitrust which provides for an annual payout of 12% of the trust for the benefit of their 55-year old child for her life. With annual growth and income of just 3%, the beneficiary will receive payouts of $539,311 over her life expectancy, and the charity will receive a gift of $70,068 at the death of the beneficiary. In addition, the beneficiary’s life expectancy is 25 years; therefore, the distributions are taken over a 25-year period rather than a 10-year period, ultimately allowing some continued tax deferral.

There are other options available to allow flexibility in the payout of CRTs which can make them even more attractive options; however, which options are relevant will depend on the age of the beneficiary, their income tax bracket, and the value of the IRA.

In addition, due to the somewhat complex nature of CRTs, many charitable organizations will act as Trustee of the CRT which eliminates the burden of administering the trust by the beneficiary. But, in the case of a sophisticated beneficiary, he/she may be named as the trustee of the trust, allowing him/her control over the investment structure of the assets in the trust. Ultimately, a CRT is a good option for an individual who has charitable intent. With no charitable intent, there is no foreseen benefit for a person to create a CRT. However, for those who have even a small desire to provide for charity and some qualified retirement funds, CRTs may provide excellent ways to provide a tax efficient benefit for those they care about while still benefitting  a charity.  

Ask Kit Kat: Dogs Saving Citrus

Hook Law Center: Kit Kat, how are dogs in Florida helping to save oranges and grapefruit from citrus disease?

Kit Kat: Well, once again an interesting tale about how animals have more talents than meet the eye at first glance! The citrus industry in Florida since 2005 has been dealing with various insect scourges that have significantly reduced the volume and strength of the industry. Currently, a particular threat is HLB (Huanglongbing), which prevents fruit from ripening. HLB lands on the citrus tree through a flying insect known as the psyllid. According to Tim R. Gottwald, a plant epidemiologist with the U.S. Dept. of Agriculture, “That psyllid is really a little flying hypodermic needle.”

In Perry, FL which is north of Jacksonville, one grower named Andy Jackson is taking a new approach to fighting HLB. He is utilizing specially-trained canines to sniff out HLB in its early stages, so the affected tree can be removed, and not infect large swaths of the grove. F1 K9 is a Florida company that trains dogs to detect explosives, drugs, and agricultural disease. Deploying trained dogs has an accuracy rate of 99%. Other methods like visual inspection and lab examination are much less effective and take longer to get results. The canines, fortunately, work incredibly fast. In 2-3 seconds, they can assess an individual tree. If they sit down, it indicates that the disease has been detected. A ribbon is tied to the tree, and within a few days, it will be removed.

The dogs at Jackson’s farm, on this particular day which the article was written about, are a springer spaniel, a German shepherd, A Belgian Malinois and a shepherd-Malinois mix. With one handler per dog, each dog walks a specific row in the grove. When they sniff the culprit, they sit and are rewarded with a chew toy or tennis ball. In about 3 hours, the 4 dogs have sniffed out the 25-acre grove. 25 diseased trees were discovered. Andy Jackson will definitely hire the quartet of dogs next year. (Duncan Strauss, “Dogs are helping save Florida’s citrus groves from a devastating disease,” The Washington Post, Jan.14, 2020)

Posted on Monday, February 3rd, 2020. Filed under Senior Law News.

Are You Ready for REAL ID?

By Jennifer Rossettini, CFP®

The REAL ID Act, passed by Congress in 2005, established minimum security standards for license issuance and production as a result of the 9/11 Commission’s recommendation that the Federal Government “set standards for the issuance of sources of identification.”  By October 1, 2020, everyone must have a REAL ID card, or an acceptable alternative, if they wish to travel by commercial aircraft or access federal facilities.  A few Virginia DMV “horror stories” heard around the office lately prompted this article to make sure you are ready for REAL ID.

All applicants for a REAL ID compliant credential must apply in person at the Virginia Department of Motor Vehicles.  Even if you currently hold a valid Virginia driver’s license, you must apply in person for a REAL ID, and provide physical documentation of your identity, legal presence, full Social Security number, Virginia residency (two proofs required), and, if applicable, name change.

Your name must appear the same on all of your proof documents.  If your name does not appear the same on all proof documents, you will be asked to provide additional documentation to connect the names, such as a marriage certificate (a marriage license is not acceptable), divorce decree (if the divorce decree provides for the name change) and/or court order.  Documents submitted for proof of identity must include your full legal name and your date of birth, and can include: official birth document issued by a U.S. State, jurisdiction, or territory; valid unexpired U.S. Passport or U.S. Passport card; U.S. Certificate of Naturalization or Citizenship.

All first time applicants or applicants whose Virginia credential has expired or been suspended, revoked or cancelled, will need to present proof of legal presence in the forms described above or listed here for proof of identity.  For proof of Virginia residency, you must choose one from the primary list and one another from either the primary list or secondary list.  Some examples include: deed, mortgage statement or lease; voter registration card; Virginia driver’s license; and utility bills.

Although your Social Security number will not be displayed on your REAL ID, Virginia law requires that proof of it be submitted to DMV.  The proof you provide must show your name and all nine digits of your Social Security number.  Examples of acceptable documents include your Social Security card, W-2 form, or payroll stub.

Applicants who successfully complete the process will receive a temporary driving permit or an ID card receipt.  Your new license or ID card will be mailed within 7 to 10 days and will display a star in the top right corner.

Of course, if you choose not to apply for a REAL ID, you may still use your standard driver’s license or ID to drive, vote or register to vote, verify your identity at banks, utility companies and retail stores, and apply for federal benefits.  Also, as long as you have an alternative form of federally acceptable identification, such as a valid U.S. Passport, a U.S. Department of Defense ID Card, a Transportation Worker Identification Credential, etc., you may use it to board commercial aircraft and access federal facilities.

Ask Kit Kat: Nutria in North Carolina

Hook Law Center: Kit Kat, what are nutria, and why are they in North Carolina?

Kit Kat: Well, I must admit I didn’t know what nutria were until I read a recent article about them in The Virginian-Pilot newspaper. Nags Head, NC is having a particularly hard time right now with them, since this winter is unusually warm. Nutria are rodents that resemble a small beaver, have a rat-like tail, and large orange front teeth. They like to feed off plants in drainage ditches and wetland areas. The problem is that they eat so much of these plants, that ditches sometimes collapse and wetlands become open ponds. Nags Head town engineer, David Ryan, says the town tries very hard to maintain the ditches, which are used for drainage after big storms. Dealing with the nutria is like taking 2 steps forward, but 1 step backwards. The town tries to keep the nutria numbers down by trapping those they become aware of. Also, some homeowners hire their own pest control services or line driveway ditches with rock.

Nutria were brought to the United States to control certain plants and for their fur. They were introduced to Hatteras Island in the 1940s. Unfortunately, they are experts at reproducing. It is not unusual for them to have 4 litters a year, with as many as 12 pups! Also, nutria are quite aggressive, and are known to fight and even bite dogs. Muskrats, which are native to the area and much smaller, are no match for the nutria. So, Hatteras Island does indeed have quite a problem. Trapping appears the main way to curb their numbers, and it is legal to trap them year-round in eastern Virginia and North Carolina. Normally, I’m not in favor of eliminating types of animals, but in this case, it does appear justified. (Jeff Hampton, “Beaver-like nutria tearing up Nags Head ditches,” The Virginian-Pilot, January 9, 2020)

Posted on Monday, January 27th, 2020. Filed under Senior Law News.

Why Funding Your Trust is So Important

By Emily Martin, Esq.

One of the most common difficulties we run into is clients who have an unfunded trust.  Many people go to an estate planning attorney because they want to avoid probate or protect their assets through a trust-based plan.  Clients who may need Medicaid benefits in the future or who want to become eligible for veterans’ benefits may be advised to execute an irrevocable trust.  Hoping to meet these goals, they go to an attorney’s office, design their estate plan, and sign their estate planning documents.  Unfortunately, and all too often, this is where many people end the estate planning process. However, an estate plan, especially a trust-based plan, is not something to be tossed casually into a dresser drawer or closet to gather dust for the next twenty years. When you execute a trust, it is vital that you also go through the process of funding the trust. If a trust is completely unfunded, it often may as well not exist.

Funding a trust refers to the process of retitling some or all of your assets into the trust so that your goals, whether they be protecting your assets or avoiding probate, can be met.  If you have a revocable trust, it is important that all of your assets that would normally pass under probate be funded into the trust.  Otherwise, your goal of avoiding probate will not be met. 

If you have an irrevocable trust, you can place as many assets as you wish into the trust in order to avoid having to spend down those assets to become eligible for Medicaid or veterans’ benefits.  Some clients place all of their assets into an irrevocable trust, while others are only comfortable with placing their home or most of their bank accounts into the trust.  Remember, if you’re considering an irrevocable trust in order to preserve your assets, it is important that you transfer all of the assets that you wish to title into the trust as soon as possible.  Medicaid currently has a five-year lookback, meaning that they will look back at all of the uncompensated transfers you made over the past five years (including those into an irrevocable trust). Depending on the amount you transfer, you may not be permitted to receive Medicaid benefits for several months. On the other hand, there is a three-year lookback in place for the VA Aid & Attendance Pension.

Depending on your financial situation and the amount and types of assets you have, funding a trust can be as simple as filling out a form with your financial institution, or it can be so complicated that you have to work with an attorney to complete the process.  The only way to make sure that you fully and properly fund the trust is to seek the advice of an experienced attorney who will be able to make recommendations as to which assets need to be retitled into your trust.  Remember – if you do not fund a trust, you might as well not have executed it at all. Only a fully funded trust will work the way you intended it to in order to protect your assets and provide for your family after you pass away.

Ask Kit Kat: America’s Parrot

Hook Law Center: Kit Kat, what can you tell us about the Carolina parakeet that is now extinct?

Kit Kat: Well, this is an interesting story. As recently as the late 1930s to early 1940s, a Carolina parakeet existed. Its face was red, its head yellow, and its wings green. Its length was in the range of 12 inches from beak to tail. Imagine encountering this exotic creature—it must have been a sight to behold! Its territory ranged from the mid-Atlantic and southern Atlantic coasts to Oklahoma. Oklahoma’s parakeets became extinct in 1913. Those along the Atlantic coast did not die out until 1938-1944, the best estimate available at this time.

So how have we learned so much about a bird which has been extinct for 80-100 years? Research has come from Spain. In 2016, Carles Lalueza-Fox, an evolutionary biologist at Pompeu Fabra University in Barcelona, was offered the opportunity to examine the remains of the bird in a private collection. Dr. Lalueza-Fox and his colleagues then set about to examine it by drilling a piece of bone in the bird’s leg to extract genetic fragments. The team was ecstatic about the condition of the bird. Similar human samples of this age often to not have viable DNA to extract. Using the sun parakeet of South America as a guide, they were able to reconstruct the Carolina  parakeet’s genome, because the two are so similar. Conclusions  reached were: the sun parakeet and Carolina parakeet split about 3 million years ago; whatever led to the extinction of the Carolina parakeet must have happened suddenly, since there is no evidence of genetic mutations or poisoning. Kevin Burgio, a researcher in New York at the Cary Institute of Ecosystem Studies in Millbrook, NY, suspects it was disease. A favorite in their diet was cockleburs. The plant is found as weeds, especially near poultry farms. He suspects a disease from the chickens may have infected them.

More research needs to be done, and there is even the possibility that the species could be revived. It’s called de-extinction. We’re a long way from that, however.  At least 500 genes would have to edited and re-created. Also, if disease was the cause of extinction, would a lot of money be spent for the same extinction process to re-occur? It’s an intriguing proposition. Stay tuned as science develops in the 21st century! (Carl Zimmer, “Once America Had Its Own Parrot,” The New York Times, (Science section), Dec. 20, 2019)

Posted on Monday, January 20th, 2020. Filed under Senior Law News.

Nursing Home Preadmission Screenings

By Shannon Laymon-Pecoraro, CELA

As elder law attorneys, we frequently see nursing homes attempt to wrongfully discharge clients. Under the Nursing Home Reform Act, there are strict rules regarding when a nursing facility may involuntarily discharge a patient. Specifically, a nursing home must allow a resident to remain in the facility unless one of the following conditions is met:

  1. the resident’s welfare cannot be met in the facility;
  2. the resident no longer needs the services provided by the facility;
  3. the safety of individuals in the facility is endangered;
  4. the health of individuals in the facility would otherwise be endangered;
  5. the resident has failed, after reasonable and appropriate notice, to pay for a stay at the facility; or
  6. the facility ceases to operate.

And, even under those circumstances, the facility is still responsible for the development of a safe-discharge plan. Specifically, a facility is responsible for developing a post-discharge care plan that assesses the continuing care needs and development of a plan designed to ensure the individual’s needs will be met after discharge from the facility into the community.

While we have repeatedly received stories regarding the fact that there are “no long-term care beds available” or the patient was “only admitted for short-stay rehabilitation”, the most recent trend in attempted discharges relates to the facility failing to require a preadmission screening prior to accepting a patient. 

A preadmission screening is necessary when a patient will be admitted inpatient and are in need of long-term care services, which may need funding by Medicaid within 180 days of admission.  While this is not a new requirement, in April of 2019, the Virginia Department of Medical Assistance Services issued a bulletin that, effective July 2019,  they would begin implementing a process to verify that a valid screening exists prior to admission into a nursing facility, and that, in accordance with policy, they will not provide reimbursement for services unless a screening is completed prior to admission into a nursing facility.  They also made it clear that it is the nursing facility’s responsibility not to accept residents without pre-authorization who are Medicaid-eligible in less than 180 days of admission.

In practice, we see many hospitals failing to perform the screening, and nursing homes accepting patients without the screenings. If you or a loved one intend to be admitted into a nursing home, prior to discharge from the hospital, you should request the hospital perform a screening, if there is any possibility the stay may become long-term. This will avoid future problems if you or your loved one needs to apply for Medicaid services.

Ask Kit Kat: Deaf/Blind but not Out

Hook Law Center: Kit Kat, what can you tell us about Opal, an Australian shepherd mix, who is both blind and deaf and lives in the Spokane Valley of Washington State?

Kit Kat: Well, this truly is a remarkable story. Opal, who has both blindness and deafness, was lucky to be adopted at 4 months old by the Brays. At the time, she couldn’t go up and down stairs, couldn’t play games like fetch, etc. With a little help from her new parents, she learned to respond to touch—one tap on her back means to sit, two taps on her shoulders means to lie down. She also developed a keen sense of smell. Utilizing these two senses, she now functions almost like any other dog. She can even sense when her human dad gets home from work. As soon as he enters their yard, she is barking and jumping, happy to welcome him home.

Unfortunately, Opal is not unique. The loss of her sense of sight and hearing is due to the presence of two merle genes. It can happen to any type of dog that has the merle gene, like Great Danes, border collies, and certain kinds of corgis. One merle gene will not make an impact except for a marbling effect on its coat, but two merle genes can result in the dog being deaf, blind, or both. Most professional breeders are aware of this issue, and know how to avoid this problem, but inexperienced breeders are not. Amanda Fuller, who runs a dog rescue for deaf and blind dogs and is a vet technician in Baltimore, has helped create and shared videos on the subject to increase awareness of the problem.

The Brays are to be commended. They not only have Opal but also another dog (a terrier mix) named Pearl, who is deaf. Both dogs fit right in with the family which now includes their daughter, Lily. Lily presents no problem for Opal. When Lily was an infant, they introduced them to each other. Without them saying where the baby was, Opal instinctively knew, and she slowed down as she entered the room where the baby was. She is probably relying most heavily on her sense of smell. The Brays say Opal can even sniff out an ice cube if one happens to fall in their kitchen. What a unique and intelligent dog! (Meryl Kornfield, “Opal is deaf and blind, but her owners insist she’s no underdog,” The Washington Post, December 30, 2019)

Posted on Monday, January 13th, 2020. Filed under Senior Law News.

More Than a Form: Analyzing the Power of Attorney

By Letha Sgritta McDowell, CELA CAP

A recent case from the Circuit Court of Wythe County Virginia provided a good a reminder of why a well-drafted power of attorney is a critical part of every person’s estate and disability planning. The case of Rae Lee Davis v. J. Garnett Davis Jr., et al analyzed the propriety of an agent’s transfer of property prior to the death of the principal.

The case arose from questions raised by the wife of a decedent regarding transfers which were discovered after the death of the principal. Samuel Dickey Davis (“Dickey”) was injured in an accident while he was in his 40s. The accident left him a quadriplegic who required assistance with daily functions such as dressing and bathing. Dickey’s mother, Agnes, added an addition to her home and made arrangements to provide care for Dickey in her home. Agnes was Dickey’s primary caretaker and Dickey’s sister Susan, and a family employee, Rae, also assisted in providing care for Dickey. Shortly after the accident, on September 23, 1993, Dickey executed a power of attorney naming Agnes as his agent. The power of attorney gave Agnes the ability to “sell and convey any and all personal property and real property” and “to execute and perform all and every acts, thing or things in law needful and necessary to be done in and about [Dickey’s] affairs, as fully, largely and amply, and to all intents and purposes whatsoever as [Dickey] might or could do if acting personally.”

In 2010 Rae moved into Dickey’s home and became his full-time care provider, replacing Agnes as the primary caregiver. In 2013 Dickey became ill and subsequently moved into a nursing facility in Tennessee. While Dickey was not able to return to his home, he was competent and able to make decisions for himself. Rae continued to be a supportive caregiver and, on October 1, 2013, Dickey and Rae were married. Later in October Dickey’s condition worsened, and he briefly went into cardiac arrest on October 25, 2013. On October 31, 2013, using the power of attorney executed in 1993, Agnes transferred three parcels of real property to Dickey’s sister and brother and the majority of his remaining property to herself. The total value of the property transfers was approximately $2 million. Dickey died on November 15, 2013.

In 2016 the Executor of Dickey’s estate (presumably after questions were raised by the beneficiaries of Dickey’s estate, including his wife and a charitable organization) requested aid and direction be provided by the court as to the propriety of the transfers made by Agnes prior to Dickey’s death. The lower court approved the transfers; however, on appeal the court decision was overturned and the appellate court found that the transfers were invalid.

The power of attorney document did not specifically include provisions authorizing gifts; therefore, the court carefully examined the term “sell and convey” contained within the document. In its analysis, the court determined that the term “convey” standing alone would authorize gifting; however the term “sell and convey” indicated that consideration (money) should be exchanged for a conveyance. Therefore, based on a careful analysis of the terms, the court found that Agnes did not have authority to make transfers to Dickey’s siblings. In addition, the court confirmed that, absent language specifically authorizing gifts be made to the agent, transfers made by an agent from a principal’s property to or for the benefit of the agent are presumptively fraudulent. Therefore, the transfers Agnes made to herself were considered fraudulent transfers.

When reading the facts of the case, particularly due to the value of the property in question, it is easy to conclude that no gifts should have been made from Dickey’s assets. However, there are many times in which transfers should be specifically authorized. For example it is common for husband and wife to use income belonging to one party or another (social security, pensions, paychecks, etc) to pay bills which may belong to one party or another. Absent specific provisions in a power of attorney, this practice would be presumptively fraudulent.

It is not often that actions undertaken by the agent under a power of attorney are analyzed by a court. However, this case serves as an important reminder that actions by an agent can be reviewed and be found fraudulent. When creating an estate plan, it is critical to consider current and future needs and, should certain actions be potentially necessary, then the language included in the power of attorney must be specific. In addition, should an agent wish to take certain actions on behalf of the principal, they should seek guidance to be assured that they are not taking action which would violate any civil laws. For these reasons, it is critical to have a professional prepare legal documents. Power of attorney documents are not simply forms and should not be treated as such, as we are reminded by this case.

Ask Kit Kat: Grandma Orcas

Hook Law Center: Kit Kat, what can you tell us about how grandma orcas help raise their grand-whales?

Kit Kat: Well, this is an interesting phenomenon. Among mammals, whales and humans seem to be unique in their ability to parent their children’s offspring despite having gone through menopause.  Scientists point to Shachi (J19 is her formal name) who is an orca or killer whale  estimated to be about 40 years old. She lives in the Salish Sea off Seattle and Vancouver. Now in menopause, she has been seen helping her daughter Eclipse raise her son Nova. Scientists say Eclipse, who is now around 14, gave birth to Nova at age 10—the youngest female orca known to have offspring. Even more remarkable, Eclipse gave birth during a period of low numbers of Chinook salmon, the staple of the Orca diet. Michael Weiss, a behavioral ecologist from the University of Exeter (UK), comments, “Most of the calves that were born in that period did not survive. But (Nova), the son of this small, inexperienced mother, is still growing, looking healthy, and is one of the most active, social members of the pod.” What made the difference? Weiss says it was the attention Grandma Shachi gave him. She stuck by his side while mom Eclipse was off foraging. He says, she “seems to have really taken on a major caregiving role.”

Grandma Shachi is not a one-time phenomenon. Researchers from University of Exeter (UK) and University of York (UK) used more than 40 years of observational data to construct statistics about births, deaths, and family relationships of orcas. What they found (which was published in the Proceedings of the National Academy of Sciences) is that there is a “grandmother effect” among whales. The grandmother effect is so powerful, that it affects the life span of her grand-offspring, even after it has become an adult. With a potential life span which can range up into the 90s, grandma orcas have lots of time to influence and guide their grand-offspring. Granny, an orca known as J2, was one such example. Her estimated age at the time she disappeared from her pod was over 90 years old.

The UK study is the first to record the grandmother effect in a nonhuman menopausal species. Grandmas are extremely valuable to this species, but as a group, orcas are still  endangered due to the reduction of numbers of  Chinook salmon, their dietary staple. According to the Environmental Protection Agency, the causes of the decline of the Chinook are dams, agricultural runoff, and overfishing. Daniel Franks, a biologist and one of the researchers from the University of York in the study, says “When the salmon are not doing well, the killer whales do not do well, and there is very little time left to take action.” (Jason Bittel, “Grandmother orcas help their grand-whales survive,” The Washington Post, (Science section), Dec. 9, 2019)

Posted on Thursday, January 2nd, 2020. Filed under Senior Law News.
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Ask Kit Kat: Pet advice and wisdom as Kit Kat sees it.