Comprehensive Planning. Lifelong Solutions.

Do You Have To Name a Virginia Resident as the Executor of Your Will?

By Sarah Schmidt, Esq.

A common question we receive from clients is whether he or she must name a Virginia resident to serve as an executor of his or her will.  While the Virginia Code used to prohibit the qualification of nonresident fiduciaries, the General Assembly has revised the statute as to who may qualify over the years. In 1997, the prohibition against nonresident fiduciaries was effectively removed. This means not only can a nonresident of Virginia qualify as an executor, he or she may also qualify as a trustee, guardian, or conservator, as the statute applies to all types of fiduciaries.

Although the law changed over twenty years ago, the rumor or belief that you should name a resident of Virginia persists. This is in part due to differing opinions of attorneys, because the statute requires a little bit more from a nonresident. A nonresident fiduciary must (i) appoint a Virginia resident or the Clerk of Court to receive service of process on his or her behalf, and (ii) post a surety bond if (a) the estate exceeds the value of $25,000 and surety is therefore waived, or (b) a resident is not also appointed to serve simultaneously. See Va. Code § 64.2-1426. In most cases, in my experience, these two “requirements” are only small hurdles and should not be seen as obstacles.

First, appointing a Virginia resident to receive service of process is particularly easy if your executor or trustee hires the Hook Law Center, because the firm will regularly serve as a resident agent for our clients. But even if your executor or trustee does not hire Hook Law Center, he or she may appoint the clerk of the circuit court. The purpose of this requirement is to ensure that if the fiduciary is ever sued, the papers to be served may be served upon the resident agent who will then obtain a copy of the legal process for the fiduciary. The Virginia General Assembly wants to make sure that if you are agreeing to be appointed in the Commonwealth, you can also be held accountable in a lawsuit filed in the Commonwealth. This is one reason why appointing your own resident agent is preferable to appointing the clerk of the court, so that you have some assurance as to the timely receipt of such papers.

Second, posting a surety bond for an estate which exceeds the value of $25,000 should also not be seen as an entirely negative thing. Although a surety bond comes at some cost for the premium, it protects the beneficiaries of the estate and is a relatively inexpensive cost to be able to appoint the person whom you trust. To get around the surety requirement, some attorneys will recommend also appointing a resident executor to serve simultaneously with the nonresident executor. You should speak thoroughly with an attorney as to the pros and cons before taking this approach. Often naming co-executors brings on a host of problems and issues that are far greater than the problem they were intended to avoid. Unless the two persons named as co-executors are also the two only beneficiaries under the will, I will often not recommend this approach. But every case is different, and you can only come to the correct answer by discussing this with your attorney in detail.

In summary, there are a host of factors that go into the choice of an executor. Often the most important factor in naming an executor is choosing someone you trust, but you should talk thoroughly with your estate planning attorney before making this decision. Do not choose your executor solely because he or she is a resident of Virginia.

Kit KatAsk Kit Kat – Endangered Pangolins

Hook Law Center: Kit Kat, what can you tell us about endangered pangolins who live in South Africa and Southeast Asia?

Kit Kat: Well, I must admit that I didn’t even know what pangolins were until very recently. The pangolin is a mammal, which looks somewhat like an anteater, except that its scales resemble that of a pine cone. They are also similar in color to a pine cone. When threatened by animal or human, they curl up in a ball. Animals then tend to leave them alone, but poachers have an easy task to just pick them up and abscond with them. Though China forbids the sale of the mammals’ meat, it is the largest consumer of pangolin scales. They are used in making medicines, though there is little verification that the medicines derived from their scales really have any significant medical impact. It’s just tradition. 1 million pangolins have been killed worldwide since 2000.

As of this moment, all 8 species of pangolins are endangered. Humane Society International (HSI) is working with organizations like African Pangolin Working Group and the Johannesburg Wildlife Veterinary Hospital to increase awareness of the problem and treat those pangolins who are rescued from poachers. This year 14 pangolins have been rescued. There are also experimental efforts being undertaken to track the pangolins’ whereabouts in the wild using satellite tags or telemetry tracking units, depending on the funding source. “The monitoring will ensure the highest chance of survival post-release and significantly contribute to the scientific knowledge pool of these elusive creatures,” says Audrey Delsink, executive director of HIS Africa. (Michael Sharp, “Keeping watch over pangolins,” All Animals, September/October 2018, p. 8)

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, October 12th, 2018. Filed under Senior Law News.

Dept. of Veterans Affairs Publishes Final Rule for Needs-Based Benefits: Deductible Medical Expenses

By Shannon Laymon-Pecoraro, Esq.

The Department of Veteran Affairs (“VA”) has published a final rule relating to the needs-based VA pension benefit for veterans and spouses. The new rule, which was published on September 18, 2018 will be effective on October 18, 2018. I have previously provided a general overview of the proposed rule and the net worth and asset transfer rules imposed under the final rule. In this newsletter, I will breakdown the requirements for the deductible medical expenses.

The VA permits deductions for amounts paid by a veteran or veteran’s spouse for unreimbursed medical expenses to the extent such expenses exceed 5% of the maximum annual rate of pension. In general, such expenses are payments for items or services that are medically necessary, improve functioning, or prevent, slow, or ease a functional decline. The VA considers the following medical expenses:

Health Care Providers – services performed within a professional capacity are medical expenses. Cosmetic procedures that improve a congenital or accidental deformity or are otherwise related to treatment for a diagnosed medical condition are medical expenses. A health care provider is someone licensed by a State or country to provide health care in the State or country in which care is received. This may be a physician, physician’s assistant, psychologist, chiropractor, registered nurse, licensed vocational nurse, licensed practical nurse, physical therapist, or occupational therapist. A health care provider may also be a nursing assistant or home health aide who is supervised by a health care provider.

Medications, Supplies, Equipment, and Food – medication, including over-the-counter medications, procured lawfully, as well as medical supplies and equipment are included as medical expenses. Medically necessary food, vitamins, and supplements as prescribed or directed by a health care provider, and authorized prescriptions are medical expenses.

Adaptive Equipment – adaptive devices and service animals, including veterinary care, used to assist a person with an ongoing disability are medical expenses. This does not include routine expenses associated with owning an animal.

Transportation – payments for transportation for medical purposes is a medical expense. For purposes of a privately owned vehicle, this can include mileage reimbursement, at the current rate established by the General Services Administration, parking and tolls.

Insurance – health, medical and hospitalization premiums, including Medicare parts A, B, and D, are medical expenses. Long-term care insurance premiums are also included.

Smoking Cessation – payments related to smoking cessation are medical expenses.

Institutional Care – Care received in a facility or in-home are subject to specific requirements, which are further detailed herein. Hospitals, nursing homes, medical foster homes, and inpatient treatment centers, including the cost of meals and lodging charged by such facilities, are a medical expense.

Payments for assistance with Activities of Daily Living (ADLs) and Instrumental Activities of Daily Living (IADLs) by an in-home attendant are medical expenses, provided the individual receives health care or custodial care. The attendant must be a health care provider unless the individual needs Aid & Attendance or is housebound, or a physician, physician’s assistant (PA), certified nurse practitioner (CNP), or clinical nurse specialist (CNS) states in writing that, due to the individual’s needs, the care provided by the attendant is required. Breaking this down further:

  • Custodial care is defined as either (i) assistance with two or more ADLs or (ii) supervision because an individual with a mental, developmental, or cognitive disorder requires assistance on a regular basis to protect the individual from hazards or dangers incident to his or her daily environment.
  • ADLs are basic self-care activities consisting of bathing, dressing, eating, toileting, and transferring, which is the ability to move oneself from one position to another.
  • IADLs are independent living activities, such as shopping, food preparation, housekeeping, doing one’s laundry, managing finances, handling medications, using the telephone, and transportation for non-medical purposes.

With regard to facilities other than nursing homes, the individual must be receiving care provided by the facility, contracted by the facility, or otherwise obtained from a third-party provider, including a friend or family member. The provider does not need to be a health care provider provided the requirements for in-home attendants, which are identified above, are met. The meal and lodging costs charged by facilities are considered medical expenses only if the facility provides or contracts for health care or custodial care for the individual, or a physician, PA, SNP, or CNS states in writing that the individual must reside in such facility to separately contract with a third-party provider, including friends or family, to receive health care or custodial care.

Kit KatAsk Kit Kat – Rare Turtles

Hook Law Center: Kit Kat, what can you tell us about the Kemp ridley sea turtles in the Cape Hatteras National Seashore?

Kit Kat: Well, the ridley sea turtle is the rarest sea turtle on planet Earth. In the past, the beaches on the Outer Banks have only seen the nests of the rare sea turtle twice—one nest in  2011 and one in 2016. This year, 8 nests have been spotted. There were 4 more reported on other North Carolina beaches—a state record! The normal nesting grounds for the Kemp ridley sea turtle are in Mexico, along the Gulf of Mexico in the eastern state of Tamaulipas, and in the Padre Island National Seashore in South Texas. Experts are not really sure why this year was so good for them on the Outer Banks. Jeff George, executive director of the nonprofit Sea Turtle, Inc. hypothesizes that the regular nesting grounds may be reaching capacity, but he really has no proof of this—just an educated guess. However, the Outer Banks have many things that meet the Kemp ridley’s preferences perfectly—gradually sloping beaches, their favorite diet of blue crabs in plentiful numbers,  and uncrowded with people. The lack of people is important to them, because they nest during daylight, unlike most turtles, who nest at night.

The Kemp ridley sea turtle is making a  bit of a comeback. In 1947, there were about 40,000 nests in Mexico. Then, in the 1970s, their numbers declined significantly due to people taking their eggs, etc., and Mexico and Texas began working to protect them. Their numbers were steadily increasing, but the 2010 Gulf of Mexico oil spill interrupted that upward trajectory. In 2017, they rebounded again, and 24,000 nests were counted in Mexico with an additional 353 in Texas. The ultimate goal according to wildlife officials is to be able to remove them from the endangered species lists altogether. They’re making progress, but there is still more work to be done, before that can safely occur. (Jeff Hampton, “World’s rarest sea turtle nests in record numbers in Hatteras,” The Virginian-Pilot, Sep.22, 2018, p. 1 & 4)

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 Thursday, October 4th, 2018. Filed under Senior Law News.

Dept. of Veterans Affairs Publishes Final Rule for Needs-Based Benefits: Net Worth and Transfer Rules

By Shannon Laymon-Pecoraro, Esq.

The Department of Veteran Affairs (“VA”) has published a final rule relating to the needs-based VA pension benefit for veterans and spouses. The new rule, which was published on September 18, 2018 will be effective on October 18, 2018. I have previously provided a general overview of the proposed rule, and intend to dive into the new net worth and asset transfer rules imposed under the final rule.

Net Worth Limits

The final rule established a bright-line net worth limit for pension entitlement.  This is a drastic change to the prior methodology, which considered multiple factors and resulted in inconsistent results among similarly situated claimants.  The VA believes that the new bright-line net worth limit will provide uniformity in decisions and promote efficiency in claims processors.

When considering the net worth limit, the VA will consider the assets and annual income of the individual. In setting the net worth limit, the VA adopted the standard maximum Community Spouse Resource Allowance (“CSRA”) promulgated by Congress for Medicaid eligibility, currently $123,600, subject to a cost-of-living adjustment to account for inflation.  While the VA pension benefit is vastly different than the benefit provided under the Medicaid system, the VA determined that because Congress has established that individuals with a net worth beyond the CSRA are sufficiently protected from impoverishment for Medicaid purposes, that is was reasonable for the VA to conclude that individuals with a net worth beyond the maximum CSRA would also be sufficiently protected from impoverishment and would therefore not need the VA pension.

When calculating net worth, the VA will consider the income and assets of any child living in the primary residence. The VA will also consider the assets of a veteran and a spouse, even if the spouse and veteran do not reside together. The VA will also consider tangible personal property, except to the extent such property is suitable to and consistent with a reasonable mode of life (i.e.: appliances and family transportation vehicles).

In considering the assets and spend down, the VA liberalized the proposed rule by providing that a claimant may decrease assets by spending them on items or services for which fair market value is received. A claimant may not, however, spend down assets by purchasing items the VA would include as a resource, such as an expensive painting or gold coins. The VA has indicated that the purchase of a burial policy is a fair market value purchase.

Primary Residence Exclusion

The VA has excluded the primary residence and the residential lot area of 2 acres from the includable assets in the net worth calculation. The lot size may be larger than 2 acres if the additional acreage owned by the claimant is unmarketable, for example, if the property is slightly larger than 2 acres, the additional property is not accessible, or there are zoning limitations. Marketable acreage in excess of 2 acres will be included in the asset calculation.

If real property is sold after eligibility for benefits is established, the net proceeds from such sale will be an asset except to the extent the proceeds are used to purchase another residence within the same calendar year in which the sale occurred. A sale within three years of a claim can be used to purchase another residence at any point prior to the date of the claim, without penalty.

The VA failed to address how they will treat life estates, in particular if property subject to a life estate is sold.

Reducing Income

When calculating annual income, the VA will deduct projected unreimbursed medical expenses from income when the medical expenses are reasonably predictable.  I will discuss this in detail in the next newsletter.

Asset Transfers

The VA has imposed a 36-month look-back period, whereby, any assets transferred within such time for less than fair market value, defined as the price in which an asset would change hands between a willing buyer and a willing seller, taking into account best available information such as appraisals, will be subject to a VA imposed penalty period.

The purchase of annuities or transfers to trusts will be considered a transfer for less than fair market value unless the claimant retains control and the ability to liquidate.  If a claimant has such control, then the annuity or trust will be included in the claimant’s net worth.

An exception to the annuity policy is a retirement plan required conversion of deferred accounts to an immediate annuity. Under such a plan, the amount transferred to the immediate annuity will not be considered a transfer, but the distributions will be counted as income.

The VA is also excluding transfers to trusts created for the benefit of a child of a veteran who became permanently incapable of self-support prior to attaining the age of 18 years old. Note that a child of a spouse, and not of the veteran, will not be entitled to benefit from such a transfer.

Penalties

The VA has implemented a penalty period calculation, which utilizes the Maximum Annual Pension Rate (“MAPR”) in effect at the time of the pension claim as the penalty divisor. The MAPR used will be at the aid and attendance level for the veteran with one dependent (currently $26,036 annually/ $2,169.67 monthly). The assets subject to the calculation will only be those assets transferred within 36 months of a claim that were in excess of the bright-line limit. The penalty period shall begin the first day of the month following the last asset transfer.

The VA will allow claimants 60 days following a penalty period decision to cure, or partially cure, a transfer and allow 90 days following a penalty period decision to notify the VA of the cure.

 

Kit KatAsk Kit Kat – Tracking Poachers

Hook Law Center: Kit Kat, what can you tell us about how researchers are tracking poachers of elephant ivory?

Kit Kat: Well, I love it when science solves a problem! And it looks like this is another example of scientists coming to the rescue! Dr. Samuel Wasser, director of the Center for Conservation Biology at the University of Washington, and his colleagues have developed a map of African elephants’ territory by analyzing their scat (or droppings). The map details what types of elephants reside in each area of the continent. When the authorities or police find a tusk on the black market, the location of the elephant can be pinpointed, leading to better protection of the elephants that remain. It also can lead to catching the poachers. Just knowing exactly where they operate in a continent as large as Africa is helpful to police. It costs about $100 per tusk to perform the analysis.

This technique came just in time. It is estimated that poachers are killing 40,000 elephants every year. At that rate, we could see almost an extinction of these magnificent creatures. Northern Gabon in West Africa is a favorite of poachers. That country has lost 60% of its elephant population in the last eight years, according to John Brown, a special agent in the US Department of Homeland Security, who is involved in prosecuting ivory poachers.

What can the average person do to help reduce the number of elephant deaths—yes deaths, because the poachers kill the animals to get the tusks? The public can simply stop buying ivory, which come from the elephants’ tusks. Ivory is used for jewelry, figurines, and as aphrodisiacs. Some people even seem to be hoarding tusks and holding them, hoping their price will go up with time. At present, the sale of ivory is estimated to be a $4 billion business worldwide. Each person can simply stop the demand and dry up the market. Along with Dr. Wasser’s identification test, we now have a tool to assist in protecting these beautiful animals from needless slaughter. (Karen Weintraub, “Elephant Tusk DNA Helps Track Ivory Poachers,” The New York Times, Sept.19, 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, October 1st, 2018. Filed under Senior Law News.

Dept. of Veterans Affairs Publishes Final Rule for Needs-Based Benefits: General Overview

By Shannon Laymon-Pecoraro, Esq.

On September 18, 2018, the Department of Veterans Affairs (“VA”) published its final rule for needs-based benefits, including the VA pension program that assists many of our clients with long-term care related expenses. The new rules, which will become effective on October 18, 2018, establish net worth, asset transfer, and medical expense deduction requirements, and further address various other issues raised in the over 850 comments received by the VA during the public comment period that ended March 24, 2015.

I will be addressing the changes over the course of several newsletters, and anticipate that our first seminar on the change will occur in October 2018.

Benefits Affected

Throughout this process, the VA has made it clear that Congress intended the pension benefit to be a needs-based benefit, which they define as meaning that the claimant’s income, or both the claimant’s income and assets, is factored into entitlement consideration.  The final rule makes it clear that the rule only affects the pension benefits, and does not impact the following:

  • Service-connected disability compensation for a veteran (note – if a Veteran is receiving additional compensation for a dependent parent, then the parent’s income and assets for the additional compensation will be considered)
  • Dependent Indemnity Compensation (“DIC”) for surviving spouses or children
  • Death compensation for surviving parent, spouses, or children
  • Spanish-American War pension

The final rule does impact the following needs-based benefits:

  • Pension benefits, which are not service-connected, for veteran and surviving spouse
  • DIC for parents

The Proposed Rule

On January 23, 2015, the VA issued a Notice of Proposed Rulemaking which identified the following proposals:

  • A bright-line net worth limit for claimants, as determined by the community spouse resource allowance utilized by Medicaid
  • Define net worth for VA purposes as the sum of a claimant’s assets and annual income
  • Clarify calculation of claimant’s assets, with a concentrated focus on treatment of a primary residence
  • Establish a 36-month “look-back” period and a penalty period, not to exceed 10 years
  • Impose a penalty for any financial instrument or investment made for the purpose of qualifying for the pension benefit
  • Create a presumption that a transfer during a look-back period was for the purpose of decreasing net worth to establish pension eligibility, subject to a rebuttal by clear and convincing evidence for fraud, misrepresentation, or unfair business practice related to the sale or marketing of financial products
  • Prohibit recalculation of a penalty period unless the original calculation was erroneous or the VA received evidence, within 60 days of the decision, that assets were returned before the date of the claim or within 30 days after the date of the claim
  • Define and Identify medical expenses that the VA may deduct from countable income

For the most part, these rules, all of which will be explained more thoroughly in the upcoming newsletters, were adopted as originally proposed.

Effective Date

The VA will not review asset transfers that occurred before the effective date of the final rule and the VA will not apply the new medical expense deduction rules to current claimants unless they change facilities or in-home care providers. Furthermore, if a claimant is receiving a pension on the effective date of the final rule, then the claimant will continue to receive benefits although his or her net worth exceeds the net worth limit established under the final rule, unless the claimant otherwise loses the pension. A claimant with a pending application will not be denied benefits, provided the claimant’s net worth meets the new limit established under the final rule.

Hook Law Center has been alerting the public of the proposed rule for nearly three and a half years, and has encouraged individuals to take action. The window of opportunity is closing – if you are a current client working on a plan for VA pension, we recommend that you continue to work diligently with your attorney to finalize the plan before the end of this month.

 

Kit KatAsk Kit Kat – Animal-Assisted Therapy

Hook Law Center: Kit Kat, what’s the latest in animal-assisted therapy?

Kit Kat: Well, the big news is that it is no longer just limited to dogs. Not that dogs aren’t great, but Pet Partners, the US’ largest registry of therapy animals, has a database of 13,000 animals. 94% are dogs, but they also have 200 cats and 20 llamas, according to C. Annie Peters, the organization’s chief executive. Not every cat can qualify to become a therapy animal she says, because “they need to have a high tolerance for strangers and hugs to become a registered therapy cat. There are regular grooming and hygiene requirements, and they have to enjoy getting in a car.” One cat who did qualify is named Xeli, who works at Denver International Airport. Another  is the cat who visits sick kids at Primary Children’s Hospital in Salt Lake City. Nevertheless, cats as well as rabbits and miniature horses are being deployed in this growing field.

The benefits of animal-assisted therapy is now being scientifically studied in a number of places. There is a Human Animal Research Institute in Washington, also one at the University of Pennsylvania, Purdue University, University of California-Davis, to name a few. Research is focused on the benefits of animal-assisted therapy for those with autism, depression, and post-traumatic stress disorder. Dr. James A. Serpell of the U. of Pennsylvania says the hormone oxytocin is key to understanding the pet-human interaction. “The petting and physical contact side of things is critical in terms of oxytocin release. Physical contact with something warm and fuzzy and soft is also a good trigger.”

It’s good to know that we animals are not just ornaments, but really can help our humans cope with everyday stresses of life, especially in times of illness. According to Jennifer Toomer-Cook of Children’s Hospital in Salt Lake City, “When kids have pets at home, having a therapy animal normalizes their stay here. They help with pain management and fear, and they’re a diversion. Having a purring cat next to you creates calm.” (Jennifer A Kingson, “As Animal-Assisted Therapy Thrives, Enter the Cats,” The New York Times, Sept. 6, 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, September 24th, 2018. Filed under Senior Law News.

Making the Transition to a Long-Term Care Facility

By Emily Martin, Esq.

Making the decision to have your parent or loved one move into a long-term care facility can be difficult. Maybe you have been caring for your mother for the past five years and feel that you can no longer do it.  Perhaps your 85-year-old mother can no longer care for your 90-year-old father without help and she has asked you to step in. Maybe your parents have declared, “I never want to live in a nursing home,” and now you feel guilty for making the decision to find a place for them to live.  Whatever your situation may be, making the right decisions about long-term care can help make the last years of your parents’ lives much more pleasant and dignified while giving you peace of mind that you have done the right thing.

When should we make the transition?

Many people aren’t sure when to begin thinking about long-term care for their parents. The most important thing that we tell most of our clients is to never wait until the situation has reached a crisis point. All too often, our clients wait until Mom has fallen at home and broken a hip before they consider long-term care. Sadly, if they had faced the situation earlier, Mom would have had the help and guidance she needed to prevent a fall from ever taking place.  It is always best to consider in-home care or assisted living help if you notice any of the following with your parents:

  • Difficulty cooking, cleaning or maintaining the house
  • Difficulty driving or inability to drive
  • Mild confusion
  • Frequent episodes of dizziness or clumsiness that result in minor falls.

If you parent is experiencing any of these problems, you might want to consider having someone come into the home to help them with day-to-day activities.  Additionally, while many people wish to stay in the home for as long as possible, others may want to move into an assisted living facility. Assisted living facilities do not provide 24/7 nursing care like a nursing home does, but the staff and nurses in the facility help with some activities of daily living like dressing and giving out medication.  These communities have the advantage of allowing your parent to have social interaction on a regular basis. Most assisted living facilities have regular social events such as movie night, bingo, and church services, as well as periodic outings to museums, local malls, grocery stores, and the bank. If you believe that your parent would thrive with more social interaction, an assisted living community may be the best decision for them.

One problem that we see all too often is that people wait until it is almost too late to make the transition to long-term care. If you wait until a tragedy has taken place, such as the death of a spouse or a severe illness, the trauma and confusion that come with moving into a long-term care facility will only be worse.  The best time to make this change is while your parent is still able to process the transition and welcome their new environment.

What do I need to do to prepare?

Obviously, the goal here is to make the change as smooth and painless as possible.  While it will never be easy to move your parent out of a house that they may have lived in for decades, there are some things that you can do to make the transition easier:

  • Make the move gradually. Nothing is worse than rushing a move to a long-term care facility. If it is at all possible, make the transition over the span of a couple of weeks or even a month.  If your parent has lived in her home for decades, organizing, packing and moving everything out of the house will take a great deal of time! Start with rooms that are not used very often – decide what to donate, what to put in storage, and what to bring to the new facility.  Go through every room until all of the work is done.  This might take a while, which is another great reason not to wait until the situation has reached a crisis point.
  • Familiarize your parent with the facility. Before your mother or father moves into the new community, take them to visit it a few times. Show them what their new room or rooms will look like, have them eat a meal in the dining room, and have them talk with some of the residents and staff.  The transition will be much smoother if they are already comfortable with the place and the people who live there.
  • Don’t give your parent too many responsibilities. On the day of the big move, try to make things as carefree as possible for your parent. Take him/her out to lunch or somewhere tranquil while others move the rest of his belongings into the new facility.  Make sure that the move is as stress-free as possible for your parent.  If they want to be involved, be sure to include them in as many decisions as possible.  Only you can gauge what level of involvement would be best for your parent.
  • Make sure they have an estate plan in place. This last step is the most important. Unfortunately, it is also the most overlooked one in the process. It is absolutely essential that you make sure that your parent has all of his/her legal and financial affairs in order before moving into a long-term care facility.  The cost of assisted living and nursing home care is several thousand dollars a month, and it is increasing steadily.  Most people do not have enough assets to cover these costs for more than a few months to a year.  It is vital that you meet with an experienced elder law and estate planning attorney who can give your parent advice on how to shield his/her assets from a Medicaid spend-down.  Your attorney can also give you important information on how to qualify for veteran’s benefits, if your parent is eligible, and can ensure that your parent has a plan in place in the event that they become unable to handle their financial or medical affairs on their own.  Without these documents in place, many people are forced to go through the lengthy, stressful, and expensive process of getting a guardianship and conservatorship so they can help their parent.  If there is no plan in place for how the parent’s assets will be distributed after death, the child may need to go through even more legal hoops, including the probate process and making difficult decisions that could have easily been made by the parent when they were still alive.

Making the transition to a long-term care facility is always difficult, but it doesn’t have to be a traumatic and stressful event for your parent – or for you.  With a little bit of advance planning, the transition can be made smoothly and a plan can be put in place that will help give you and your parent peace of mind for years to come.

Kit KatAsk Kit Kat – Foals in Outer Banks

Hook Law Center: Kit Kat, what can you tell us about the new arrivals to the herd of wild horses in the Outer Banks of North Carolina?

Kit Kat: Well, it looks like some new foals have been born recently, which is exceedingly good news. In the past year, the herd had been reduced by eleven horses. Two older horses died of natural causes. One mare was hit by a vehicle and died. One stallion died after a fight with another stallion. Six horses were removed after repeatedly escaping through an opening in a fence, and munching on local lawns. Finally, one of the five foals born this year died. So with the birth of a filly born in August, which was the fifth for the year, fans of the wild horses there are rejoicing! According to Jo Langone, chief operating officer of the Corolla Wild Horse Fund, usually only three or four foals are born each year. Two more are on the way. This year exceeded everyone’s expectations.

The herd size is a bit of a balancing act, according to Langone. The ideal size is around 120, which permits enough room for the horses and less stress on the habitat from over-grazing, especially within the Currituck National Wildlife Refuge. Currently, the herd size is around 100 and managed through birth control of the mares between certain ages. Mares under age four and older than twelve receive a contraceptive called PZP. Certain mares which have already had several pregnancies also are vaccinated. Before this program started in 2007, 26 foals were born. That was too many. But now, a few more foals is desirable. Experts don’t want the herd to get too small, because inbreeding could then lead to disease or birth defects. They continually monitor the numbers, and make adjustments as necessary. (Jeff Hampton, “Baby boom among Corolla’s wild horses brightens spirits after deaths and dismissals,” The Virginian-Pilot, August 31, 2018, p. 4)

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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 Wednesday, September 12th, 2018. Filed under Senior Law News.

Financial Industry Issues New Rules to Protect The Elderly

By Jennifer Rossettini, CFP®

As a follow-up to our Elder Abuse series, we are pleased to inform you of some new rules issued for the financial services industry that are aimed towards protecting the elderly from financial abuse. Specifically, the Financial Industry Regulatory Authority (FINRA), the organization that regulates the securities brokerage industry, implemented new rules that took effect on February 5, 2018. Regulatory Notice 17-11 describes these new rules as a way for its members “to respond to situations in which they have a reasonable basis to believe that financial exploitation has occurred, is occurring, has been attempted, or will be attempted. Members can better protect their customers from financial exploitation if they have the ability to contact a customer’s designated trusted contact person and, when appropriate, place a temporary hold on a disbursement of funds or securities from a customer’s account.”

Under the amended FINRA Rule 4512 requires member firms to make reasonable efforts to obtain contact information for a trusted contact person who is over the age of 18 and who may be contacted about a customer’s account. Now, during the account opening process or thereafter, your financial advisor should be asking you for contact information for a trusted person and disclosing to you, in writing, that they may contact the trusted person and disclose account information to them in order to determine whether financial exploitation is going on.

Further, new FINRA Rule 2165 provides (1) that member firms must adopt and implement policies and procedures regarding elder abuse; (2) that employees of member firms must be trained about elder abuse; and (3) that member firms can temporarily refuse transactions if elder abuse is suspected.  This new rule defines a “Specified Adult” as someone who is 65 years old or older, or someone who is 18 years or older with an impairment that prevents the individual from protecting his or her own interests. The rule further defines “financial exploitation” as “(A) the wrongful or unauthorized taking, withholding, appropriation, or use of a Specified Adult’s funds or securities; or (B) any act or omission by a person, including through the use of a power of attorney, guardianship, or any other authority regarding a Specified Adult, to: (i) obtain control, through deception, intimidation or undue influence, over the Specified Adult’s money, assets, or property; or (ii) convert the Specified Adult’s money, assets or property.”

If a member firm “reasonably believes” that financial exploitation of a Specified Adult has occurred, is occurring, has been attempted or will be attempted, the firm is permitted to place a temporary hold on a disbursement of funds from the account of the Specified Adult. The member firm must then, within two business days, provide notice of the temporary hold and the reason therefore to all authorized parties on the account and the trusted contact person, unless one of those parties is the one suspected of doing the exploiting. While the temporary hold is in place, the member firm must conduct an internal review of the facts surrounding the suspicion of financial exploitation, and depending on the findings, can extend the temporary hold for an additional 10 business days.

While it remains to be seen how member firms will implement these new rules and what effect it will have on account owners, it is certainly a step in the right direction.

Kit KatAsk Kit Kat – Tiger in Captivity

Hook Law Center: Kit Kat, what can you tell us about Gustavo, a tiger, who was living in captivity in Mississippi, but now lives in Texas?

Kit Kat: Well, Gustavo is one lucky fellow! He’s 16 years old, and he was rescued just in time. We hope he survives until 20, the average age for tigers in captivity. In 2012, he was rescued from a roadside zoo in Mississippi. His owner there did not treat him well, and his diet was atrocious. This led him to have kidney issues and arthritis. He was fed on a diet of just chicken parts. Tigers need more than that—they need whole prey, which means including the bones and organs to get the nutrients they require. Now he is living at Cleveland Amory Black Beauty Ranch in Texas. He’s got plenty of room to roam and toys to chase like a large, synthetic ball.

Approximately, 5,000 tigers in the US live in poorly-run, roadside zoos or in private hands. This number is greater than the total number of tigers living in the wild across the world. Unfortunately, these untrained operators and owners don’t really know how to care for tigers, according to Nicole Paquette, Vice President of Wildlife Protection at the Humane Society of the US (HSUS). So through HSUS’s advocacy, the Big Cat Public Safety Act was introduced in the Senate this past June. It would outlaw the ability of individuals and unqualified exhibitors to house and breed big cats, like tigers. The Act has not yet been passed, but HSUS will keep advocating for it until it does pass. Big cats are so majestic and beautiful! They deserve to be protected. (“Gusto for the Good Life, All Animals, September/October 2018, p. 14)

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, September 7th, 2018. Filed under Senior Law News.

Why You Need an Estate Administration Attorney After the Death of a Loved One

By Sarah Schmidt, Esq.

Lay people often mistakenly suppose that seeking legal counsel for advice on the administration of an estate is always more expensive than if you manage to deal with paperwork and other legalities after the death of a loved one on your own. This erroneous assumption often leads to the following scenario.

A loved one, we will call “Mom”, passes away. Sally, who is named an executor of Mom’s will, goes to the bank to seek access to Mom’s account to help pay for funeral expenses and to pay Mom’s bills. While at the bank, Sally is denied access to the accounts, because she does not have the proper paperwork. Sally looking to save money, does not seek the advice of legal counsel and instead seeks advice from the bank teller, her neighbor, her CPA, her friends, or of course, even Google. After seeking all such advice, she heads down to the local courthouse to collect what she now believes she needs to get access to the account. While at the courthouse, Sally elects to qualify as an executor of Mom’s estate, post a bond, and pay probate taxes. While at the courthouse, Sally learns she now has a whole host of new duties, including filing inventories and accountings with the local Commissioner.

Unfortunately, what Sally does not realize is that by electing to navigate the legal landscape of probate on her own, she may have chosen the much harder route. It may be the case that the assets in Mom’s estate do not warrant the need to qualify and file accountings before a Commissioner of Accounts. Another possibility is that Mom’s debts far exceed any amount in the bank account, so she very well might have been advised by an attorney not to qualify as an executor at all.  There are a number of instances in Virginia law where it does not behoove you to head to the courthouse first. Always, always¸ seek the advice of counsel before making any such decisions or relying on the advice of a bank teller or court clerk. Believe it or not, simply seeking a consultation with an attorney may actually save you a great deal of money and headaches in the future.

Kit KatAsk Kit Kat – End to Greyhound Racing?

Hook Law Center: Kit Kat, what can you tell us about Florida legislation which will be on the ballot this November to end greyhound racing?

Kit Kat: Well, hopefully, the time has come to end this awful sport. Greyhounds at tracks are kept in ridiculously small cages, sometimes with 2 in cage. On average, the dogs spend 20-23 hours per day in a cage, with only a small amount of time to stretch and run in a ridiculously small yard. Animal welfare advocates have worked tirelessly to get a proposal on the Florida ballot to remove the requirement for tracks to hold live dog races in order for certain gambling games to take place and to totally outlaw all dog racing there by December 31, 2020. Florida has the majority of greyhound racing tracks—11 of the 17 that still operate nationwide.

The successful effort to get this proposal on the ballot is thanks to the efforts of the US Humane Society (HSUS), GREY2K USA, and advocates such as Sonia Stratemann. Stratemann has founded a greyhound rescue group called Elite Greyhound Adoptions. Since 2006, her group has rehabilitated and found homes for more than 2,300 greyhounds which were castoffs from the racing industry. Stratemann has been forbidden to enter the premises of the Palm Beach Kennel Club, which is near her home, because of her activism. While she can no longer adopt from that particular club, she has joined forces with other organizations to stop this awful industry. Besides abuse, the dogs frequently suffer injuries on the track. Since 2013, more than 460 greyhounds have died from injuries during races, through collisions with other dogs, or other injuries that occur in the brutal racing process.

Let’s hope this initiative is successful! Stay tuned! It’s a tremendously worthwhile endeavor for those of us who love animals and want them treated humanely. (Julie Falconer, “Home Stretch-A History-Making Campaign Could End Greyhound Racing in the US,” All Animals, September/October 2018, p.10-11)

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 Tuesday, September 4th, 2018. Filed under Senior Law News.

Stop Procrastinating. It’s Time To Make A Plan!

By Letha Sgritta McDowell, CELA

This month Americans lost the Queen of Soul and, while it is a tragedy within the music world, the passing of Aretha Franklin highlights a legal tragedy as well.  Aretha Franklin died with no estate plan.  That means she had no last will and testament, no revocable trust, no irrevocable her trust, no power of attorney, nothing!  For estate planning attorneys it seems ludicrous that an accomplished woman with a net worth estimated to be in excess of eighty million dollars would have no estate plan.  Such a plan would have minimized the estate tax her estate will pay (which will ultimately born by her heirs), nor has she planned to protect her heirs by placing their assets in further trust, nor is there a clear statement of her intent as to who shall inherit upon her death and who shall be responsible for managing her estate.  Already her four sons and a niece have come forward as interested parties in Ms. Franklin’s estate.  Sadly, Ms. Franklin is not the only person of means to die without an estate plan. Paul Walker, Heath Ledger, Prince, Bob Marley, and Howard Hughes are just a few of note.

Estate planning is not something that is only needed by extremely affluent individuals.  Instead estate planning is needed for almost every adult.  Creating an estate plan allows a competent adult to clearly specify who will make medical and financial decisions upon their incapacity and how assets will pass at their death.  Not having some sort of estate plan can cost heirs in the way of additional legal and court fees, additional taxes, and potentially losses due to a failure to see in the future.  If a person dies without some sort of plan, each state has a set of rules that dictate where assets will pass after all final bills and expenses are paid.  In many cases, the state default is not how most want their assets to be left, and even if the state default is the individual’s intent, the additional fees for passing assets without a will or trust are not a part of the intent.

In addition to the consideration of who will receive certain assets at death, of equal importance is the manner in which the beneficiary will receive the assets.  Are the assets to pass outright, in which case, they may be subject to current or future creditor claims or claims of a  beneficiary’s future ex-spouse.  Perhaps there is a thought that a surviving spouse can and should re-marry.  In many cases, the remarriage of a spouse would be celebrated, but the first spouse to die may wish to preserve his or her assets (or share of their jointly-held assets) for his or her heirs. With a little planning, these goals may be easily accomplished and the goal of preserving and protecting future generations is not one which is isolated to high net worth families.

There are other things to consider such as who will have custody of minor children should both parents die.  And, while the federal estate tax exemption has increased to $11 million per person (neither Virginia nor North Carolina have a state estate tax) all income earners are required to pay income tax.  So, while estate taxes may not be of high importance to many, income tax is still an issue for all, and, therefore, an estate plan should consider tax efficient transfers of wealth to different generations.

Humans have a 100% mortality rate which means we will all die at some point yet, 70% of Americans between the ages of 45 and 54 do not have a will and more than half of Americans over the age of 55 do not have a will.  The reasons for delaying vary from an irrational fear that executing a will or trust will hasten a person’s death or fear of the process.

A good estate planning attorney will work with you to solidify your goals and objectives, discuss potential issues which you may not have yet considered, and then draft documents which achieve your goals.  The process for estate planning does not have to be difficult and the need for planning does not require great wealth, simply a desire to preserve and protect loved ones.

Kit KatAsk Kit Kat – Burros Booming

Hook Law Center: Kit Kat, what can you tell us about burros in Arizona and how they are actually thriving there?

Kit Kat: Well, yes, it does appear that burros or donkeys are doing quite well in Arizona. Their numbers are increasing to the extent that there are nearly 15,000 burros living in areas that the Bureau of Land Management (BLM) controls in that state. So, with some help from the Humane Society of the United States (HSUS), an experimental program to limit pregnancies is underway. It is called the Platero Project. The four-year project is funded by an anonymous donor who just loves burros.

The project will begin by working with a small sample and injecting females with the  contraceptive vaccine PZP. Burros are bit late to this method, which has been successful with deer and wild horses. What makes the attempt so tricky with burros is that they don’t have a defined breeding season, so it has been difficult to pinpoint their fertility periods. According to Stephanie Boyles Griffin of HSUS, “The question isn’t whether PZP works. The question is how to apply it to a herd of 1,000 female burros on 900,000 acres of land—and it’s best answered by starting on a smaller scale.” Burros are extremely intelligent, and they have learned to thrive in harsh, dry conditions by using their hooves to find sources of underground water.

Heretofore, attempts at birth control for burros has been limited to separating female burros from their herds, and putting them in holding facilities until they can be adopted. But that method is slow and cannot handle much volume. Currently, there are nearly 1,000 burros in BLM corrals. A new approach is needed. Stay tuned to see how the Platero Project progresses. We’re hoping it achieves its goals. (Emily Smith, “A better way for burros,” All Animals, July/August 2018, p.8)

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, August 24th, 2018. Filed under Senior Law News.

To Shred or Not To Shred?

By Sarah Schmidt, Esq.

Hook Law Center will be sponsoring our “Shred With A Purpose” event to support the Alzheimer’s Association THIS Saturday, August 25, 2018, from 9 AM to 12 PM. Bring your documents to our Virginia Beach office at 295 Bendix Rd. for free on-site data destruction provided by Stealth Shredding. We will be accepting donations for the Alzheimer’s Association at this event. Cant make it, but still want to donate? Click here to donate online.

With that in mind, how long should you keep those important documents?

Federal Taxes

Typically, you should keep your federal income tax returns and supporting documentation for at least seven years. The Internal Revenue Service provides that “[t]he length of time you should keep a document depends on the action, expense, or event the document records. Generally, you must keep your records that support an item of income or deductions on a tax return until the period of limitations for that return runs out. The period of limitations is the period of time in which you can amend your tax return to claim a credit or refund, or that the IRS can assess additional tax.” The IRS has several different periods of limitation. Most significantly, if you have ever failed to file a tax return or have ever filed a fraudulent return, you should keep records indefinitely.

However, the IRS has assigned other scenarios (such as failure to report income or failure to claim a credit or refund) varying periods of limitation, ranging from two to seven years. To err on the side of caution, best practice is to keep your records for the longest period of limitation recommended by the IRS. Therefore, consider keeping your federal income tax returns and supporting records for at least seven years from either the due date of the return or the date the return was filed, whichever is later.

Virginia Taxes

You should keep your Virginia tax returns and supporting documentation for the same length of time, at least seven years. The Virginia Department of Taxation recommends keeping your records for three years from either the due date of the return or the date the return was filed (whichever is later) unless the Internal Revenue Service suggests otherwise. Therefore, keep all of your tax records for the same length of time, seven years.

Contracts

How long you should keep a contract and supporting documentation varies. At a minimum, you should keep a contract for the length of time that you (or the other party) could file a lawsuit.  This length of time is determined by the terms of your contract and the laws in your state. While the terms of your contract may control this length of time, each state law provides a “statute of limitations” as well. A statute of limitations is a law that bars a party from filing a claim after a specified period of time. Because a court can find that an express clause in your contract is unreasonable, you should keep your records for the length of the statute of limitations in your state. Once the period of time specified in the statute of limitations has passed, you (and the other party) are barred from filing a claim.

In Virginia, the statute of limitations for a contract also depends on the type of contract. In general, the statute of limitations for a written contract is five years and for an oral contract, it is three years. See Va. Code § 8.01-246 for exceptions.

Credit Card and Bank Statements

According to the FDIC Consumer News keep your bank and credit card statements for a period of one year; unless they have any tax significance (in which case, keep them for seven years).

Investment Accounts

Keep investment account statements for the life of your investment, plus seven years for tax purposes. This should provide you with basic guidelines from various sources to help you trim your file cabinet. However, opinions vary on the exact dates for retaining records and when in doubt, always err on the side of caution. Moreover, there are many important documents not mentioned above that should be kept indefinitely. If you have any questions or concerns, please feel free to call the Hook Law Center, P.C. and we will be happy to assist you.

Kit KatAsk Kit KatDogs Respond to Crying

Hook Law Center: Kit Kat, what can you tell us about dogs responding to their owners when they cry?

Kit Kat: Well, this is very interesting and just goes to show how smart and intuitive dogs and other animals are. A new study published  July 24, 2018 in the journal Learning & Behavior suggests that dogs picked up on crying cues by their owners. In the study, dog owners were behind doors with windows, with the door loosely ajar. When their owners made distressed sounds like “help” in addition to a crying sound, the dogs responded significantly more quickly than when their owners sang “Twinkle Twinkle Little Star.” When the distressed sounds were made, the dogs responded on average within 23.43 seconds. When the humming of a children’s song was heard, they responded in 95.89 seconds on average. “It’s really cool for us to know that dogs are so sensitive to human emotional states,” said Emily Sanford, a graduate student in psychological and brain sciences at Johns Hopkins University, who was a co-author of the study. There weren’t any measurable differences among different breeds or dogs of different ages in regard to how they responded.

The study was small with only 34 dogs participating. Still, the scientists believe it is a useful first step in measuring dogs’ emotional states. They also evaluated the dogs’ heart rate and behavior during the experiment. In summary, they found that dogs who were less stressed, responded to their owners’ sign of distress more quickly than those dogs who tended to be stressed themselves. Sanford and her other researchers concluded from this, “ The idea is that if you can perceive someone else being in distress but it doesn’t overwhelmingly stress you personally, then you’re more likely to be able to provide help.”

Isn’t it wonderful to know our canine friends are so attuned to how their owners are doing. Anecdotal reports have shown the caring and concern of dogs, but this study and others prove it really is true. (https://www.cnn.com/2018/07/24/health/dogs-human-crying-empathy-study/index.html)

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, August 20th, 2018. Filed under Senior Law News.

Should I Transfer My House To My Kids?

By Emily Martin, Esq.

One of the most common questions we get from clients is whether they should transfer their house to their children. The answer to this question is almost always absolutely not! Many people think that transferring their house to someone else will allow them to protect their home from having to be sold in the event that they need to go on Medicaid or receive VA benefits. They believe that getting the house out of their own name will help them qualify for these benefits more easily, and that such a tactic is easier and less expensive than executing and funding estate planning documents. However, there are several reasons why this is never a good idea.

Your Children May Have to Pay Crippling Amounts of Capital Gains Tax.

If you are elderly, it is very likely that you purchased your home thirty, forty, or even fifty years ago. The price you paid for your house at that time was probably much less than its current value. For example, say that you paid $35,000 for your house, and it is now worth $250,000. If you transfer the house to your daughter and she later wants to sell the house, she would have to pay capital gains tax on the difference between the price you paid for the house and the value it had at the time she received it – $215,000. You can see how much this can add up!

In the alternative, if you transfer the house through a will or a trust, your beneficiaries will receive what is called a step-up in basis equal to the value of the house at the time they inherited it rather than the value of the house at the time you purchased it.

 You Could Be Prevented or Disqualified From Receiving Medicaid Benefits.

As you may know, there is a five-year “look-back” period for Medicaid eligibility purposes. This means that, when your Medicaid application is being reviewed, any gifts or “uncompensated transfers” that you have made in the past five years will result in a “penalty period.” In 2018, every $6,422.00 worth of uncompensated transfers that you made in the past five years will result in your Medicaid benefits being withheld for one month. Medicaid will not penalize applicants for transfers that occurred more than five years ago.

If you transfer your home to your children and then require long-term care within five years of the transfer, Medicaid will consider this to be an uncompensated transfer. This type of transfer has the potential to delay your Medicaid benefits and possibly even prevent you from ever qualify for Medicaid.

Debt, Disability, Divorce, or Death

There are a few other reasons why the idea of transferring ownership of a parent’s house to their children is never a good idea. If you transfer your home to your child and they have significant debts, then creditors could inquire as to the assets in their name. If your house is in their name, then creditors could make claims against that property in order to recover the debt owed to them. This could result in your child having to sell your house to satisfy his or her creditors.

Additionally, if your child becomes disabled and requires Medicaid or government benefits of her own, owning your house could prevent her from qualifying for these benefits in the same way that it might prevent you from qualifying for benefits if you need long-term care.

Another potential issue is divorce. If you transfer your home to your child and then they go through a divorce, your house could be considered an asset to be divided or dealt with as part of the property agreement with their former spouse.

Finally, if your child passes away before you do and you have transferred your home to him, then your house could be considered part of his estate and distributed to his heirs instead of yours.

Obviously, none of these outcomes are ideal. If you own a home and you are looking to qualify for Medicaid, VA benefits, or other long-term care benefits, an experienced elder law attorney can work with you to implement strategies that will preserve your assets while allowing you to accomplish your goals and receive the benefits you need.

Kit KatAsk Kit Kat – Light Bulbs & Wildlife

Hook Law Center: Kit Kat, what is the connection between the type of light bulbs one uses and the impact on wildlife?

Kit Kat: Well, I must admit when I saw the title of this article I was intrigued. I just never had thought about any connection between the two things, but apparently there is one. The increase in the use of outdoor lighting is having, in some cases, a negative effect on wildlife. Worldwide, there has been a 2.2% increase annually of outdoor areas that are artificially lit. Inexpensive LED lighting is partially responsible. According to Paul Bogard, author of The End of Night, “Every creature on this planet has evolved in bright days and dark nights. None has had the evolutionary time to adapt to the blitzkrieg of artificial light.” Some of the harmful side effects of artificial light are: 1) baby turtles heading toward lit-up hotels instead of seeking the sea guided by moonlight, 2) migrating birds disoriented by spotlights, 3) salamanders sleeping later, 4) moths stopping mating, 5) delayed maturation of soybean plants near sodium lighting, and  many more  according to experts.

What can be done to reduce this stress on ecosystems? Well, awareness is the first step. If one didn’t know there was a problem, then there could never be a solution. So, this is what the experts tells us: 1) turn off outdoor lighting when it is not being used, 2) install motion-detector lighting which only comes on when an object is approaching, 3) generally, LED lights are better than other types, but not in all cases. It depends on what creatures are native to an area, and how they interact with the particular type of lighting, and 4) close your curtains or blinds at night to eliminate glare which may be affecting the animal world. There are a surprising amount of them who are nocturnal—30% of vertebrates and 60% of invertebrates. They thrive in the dark, so let’s help keep it that way for them as much as we can. (Nancy Lawson, “Going to the dark side,” All Animals, May/June 2018, p. 38-39)

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 Tuesday, August 14th, 2018. Filed under Senior Law News.
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