Ruggiero Law Blog

Wednesday, May 13, 2020

Why Advance Directives are Important Now - Webinar today 5.13@1:30


 

As a result of the COVID- 19 pandemic, you may be reflecting on your health and the health of your family, especially that of an elderly family member. By having a healthcare power of attorney in place, you have an agent designated to make healthcare decisions for you in the event of incapacity due to illness or accident. Jim Ruggiero, Esq. will discuss advance directives, the recent law changes in PA, how to make the best decisions in selecting an agent, and when to provide legal documents to medical professionals.

Library: Phoenixville Public Library Zoom video
Registration Ends: 5/13/2020 at 12:00 PM

Other Information:
This event is free and open to the public, and will take place online via Zoom.
Read more . . .


Tuesday, April 28, 2020

Preparing for a virtual conference with an Estate Planning Attorney


Preparing to Meet With an Estate Planning Attorney

A thorough and complete estate plan must take into account a significant amount of information about your assets, your family, your property, and your wishes during and after your life.  When you make your first appointment with an estate planning attorney, ask the attorney or the paralegal if they can provide a written list of important information and documents that you should bring to the meeting.  

Generally speaking, you should gather the following information before your first appointment with your estate planning lawyer.

Family Information
List the names, birth dates, death dates, and ages of all immediate family members, specifically current and former spouses, all children and stepchildren, and all grandchildren.

If you have any young or adult children with special needs, gather all information you have about their lifetime financial needs.
Read more . . .


Wednesday, April 15, 2020

National Healthcare Decisions Day - April 16

National Healthcare Decisions Day exists to inspire, educate and empower the public and providers about the importance of advance care planning. During the Covid-19 heath crisis - now more than ever having a Healthcare Power of Attorney is critical.  At Ruggiero Law we encourage you take the following actions:

  • Select a healthcare decision maker
  • Have a HIPPA Release and Healthcare Power of Attorney prepared
  • Share your wishes with your family and encourage them to prepare
  • Submit a copy of your documents to your doctor(s) especially if you have a chronic health condition
  • Have a hospital 'go bag' prepared
  • Update or utilize our Legal Vault service

 

 

 


Read more . . .


Friday, March 27, 2020

Information for Businesses - Covid-19

Business owners face many challenges during the coronavirus pandemic.

Chester County PA has comprised a comprehensive resource directory on their website.


Read more . . .


Wednesday, January 8, 2020

Costs Associated with Dying without a Will


Costs Associated with Dying Without a Will

When someone dies without a will, it is known as dying intestate.  In such cases, state law (of the state in which the person resides) governs how the person's estate is administered. In most states, the individual's assets are split -- with one third of the estate going to the spouse and all surviving children splitting the rest. For people who leave behind large estates, unless they have established trusts or other tax avoidance protections, there may be a tremendous tax liability, including both estate and inheritance tax.

For just about everyone, the cost of having a will prepared by a skilled and knowledgeable attorney is negligible when compared to the cost of dying intestate,  since there are a number of serious consequences involved in dying without a proper will in place.
Read more . . .


Friday, September 13, 2019

What is a Revocable Living Trust?

There are many benefits to a revocable living trust that are not available in a will.  An individual can choose to have one or both, and an attorney can best clarify the advantages of each.  If the person engaged in planning his or her estate wants to retain the ability to change or rescind the document, the living trust is probably the best option since it is revocable. 

The document is called a “living” trust because it is applicable throughout one's lifetime.  Another individual or entity, such as a bank, can be appointed as trustee to manage and protect assets and to distribute assets to beneficiaries upon one's death. 

A living trust will also protect assets if and when a person becomes sick or disabled.  The designated trustee will hold “legal title” of the assets in the trust.  If an individual wants to maintain full control over his or her property, he or she may also choose to remain the holder of the title as trustee. 

It should be noted, however, that the revocable power that comes with the trust may involve taxation. Usually, a trust is considered a part of the decedent’s estate, and therefore, an estate tax applies.  One cannot escape liability via a trust because the assets are still subject to debts upon death.  On the upside, the trust may not need to go through probate, which could save months of time and attorneys' fees. 

The revocable living trust is contrary to the irrevocable living trust, in that the latter cannot be rescinded or altered during one's lifetime.  It does, however, avoid the tax consequences of a revocable trust.  An attorney can explain the intricacies of other protections an irrevocable living trust provides. 

Anyone who wants to keep certain information or assets private, will likely want to create a living trust.  A trust is not normally made public, whereas a will is put into the public record once it passes through probate.   Consulting with an attorney can help determine the best methods to ensure protection of assets in individual cases.   


Wednesday, August 14, 2019

What is a Power of Attorney?

A power of attorney is an estate planning document that has a variety of uses. There are several types of these documents available, and each one performs a slightly different function. One or more of these plans may be a good idea to include as part of your estate plan.

What is a Power of Attorney?

A power of attorney gives another person permission and authority to make decisions regarding various aspects of your life if you can’t make those decisions yourself or if you just want to hand over control to a friend or loved one for any other reason.

A power of attorney gives someone else, who does not have to be an attorney, the ability to make decisions for you. You are essentially authorizing this other person to act on your behalf either generally or if certain conditions are met.

You must complete a document to give this power to someone else. This document may need to be notarized or go through another type of authentication process.

Types of Powers of Attorney

Several kinds of powers of attorney may be useful for your estate plan. These often overlap in many circumstances.

  • General Power of Attorney. This power of attorney is the most extensive option available. It gives the agent broad authority to make decisions and take action on your behalf. These are often used in situations where you become incapacitated or you are unavailable for any other reason. It is crucial that you trust the person you are granting this power to because this type of document can be prone to abuse.
  • Limited or Special Power of Attorney. This document applies to only very specific aspects of your life. For example, you may want to grant someone control over a property to maintain and manage it while you are out of the country. A document that fulfills this purpose may be limited in both timeframe and scope.
  • Durable Power of Attorney. Powers of attorney are generally only valid as long as you have mental capacity. However, a durable power of attorney will still be active if you lose your mental capacity. These can either remain in effect, or they can become active when you can no longer manage your own affairs.
  • Springing Power of Attorney. This type document only “kicks in” if certain conditions are met. The most common example is one where you lose mental capacity, and you have arranged for a loved one to take care of your affairs if this happens.
  • Healthcare Power of Attorney. A healthcare power of attorney gives someone the authority to make your healthcare decisions if you are disabled due to illness or an accident. This person will provide doctors with permission to operate, for example, and they may even make the decision of whether to “pull the plug” as well. It is critical that you let this person know your expectations regarding how you want your healthcare to move forward in these situations.

Someone who creates a power of attorney must be competent at the time to do so. That means that planning ahead is vital to creating a valid, legal power of attorney document.  

 


Wednesday, July 31, 2019

Medicaid Asset Protection

Medicaid is a healthcare program jointly operated by the individual states and the federal government. Medicaid is designed to help individuals with limited income and resources pay for healthcare costs including nursing home care, assisted living, or in-home care. However, qualifying for Medicaid can be difficult. While eligibility is state-dependent, there are generally four key requirements: (1) you must be 65 years of age or older, permanently disabled, or otherwise qualify depending on your specific state’s class requirements, (2) you must be a resident of the state in which you are applying, and either a U.S. citizen, permanent resident, or legal alien, (3) your income must be within your state’s income limitations, and (4) your assets must be within your state’s asset limitations.

To help individuals qualify for much-needed Medicaid coverage, multiple strategies exist to reduce one’s income and assets to the state threshold without adversely affecting the individual’s life. These include gifting assets to family and friends, transferring assets to a spouse, and investing in exempt assets (exempt assets are assets that do not count as “assets” for Medicaid purposes – most states allow certain home values to be exempt).

To avoid individuals taking advantage of these strategies at the last minute to qualify, however, the federal government implemented a “lookback period.” This is a period of time for which financial transactions involving the applicant will be reviewed. The purpose of the lookback period is to identify assets, such as money or cars, that may have been gifted or sold below market value in an effort to reduce the applicant’s assets to within the state’s Medicaid asset limitation.

For all states except California, the lookback period is 60 months (5 years). For California, the lookback period is 30 months (2.5 years). The lookback period begins on the day that the individual applies for Medicaid. Thus, when an application is filed, the government will review all financial transactions to look for transactions that violate Medicaid eligibility provisions, such as certain gifts and transfers.

If the reviewing agency identifies transactions within the lookback period that violate the eligibility rules, the applicant will be assessed a penalty. The penalty for violating a transaction during the lookback period is ineligibility for a certain period of time. To calculate the length of the penalty, the government will divide the amount of the transaction in violation by the average monthly or daily private care costs in a nursing home. For example, if an individual gifts $40,000 in a violating transaction during the lookback period and the state’s monthly private care cost for nursing home care is $4,000, then the individual will be assessed a penalty of 10 months of ineligibility. Here, the individual would be assessed a penalty of 10 months to begin from when the individual became eligible for Medicaid.

Given the harsh penalties for violating transactions during the Medicaid lookback period, having proper legal representation can help to ensure that your planning complies with all state and federal law.

 


Monday, July 22, 2019

The Effects of Gifts on Medicaid Planning

Medicaid is a healthcare program designed to help individuals with limited income and assets afford needed medical care. Importantly, Medicaid covers long-term healthcare services such as nursing home costs and costs for at-home personal healthcare. Because Medicaid is intended to benefit those with limited income and assets, there are strict eligibility requirements based on income and assets. Although Medicaid is a federal creation, it is jointly operated by the federal and state governments. As a result, the specific income and asset eligibility requirements for each state are different and you should consult with a Medicaid planning attorney in your area for specific eligibility advice.

As an example, a state may limit Medicaid eligibility for a married couple with a single spouse applying to $3,000 per month in taxable income for the couple with an additional income allowance for the non-applicant spouse. Similarly, the couple may be limited to $4,000 in non-exempt assets in the applicant’s name, and an additional exclusion of $100,000 of assets that may be owned by the non-applicant spouse. Additionally, most states provide for certain asset exclusions when determining Medicaid eligibility, such as exempting a certain value of the primary residence. Thus, when planning for Medicaid, the value of assets can be a major complication.

To reduce an individual’s assets, the first thought may be to gift: cash to your soon-to-be married niece, the family farm to your children, or an old car to your grandchild. However, gifting assets can have a serious impact on your eligibility for Medicaid. Under federal law, Medicaid has what is known as a five-year lookback period. This means that if you’re applying for Medicaid, the past five-years of your life will be investigated to look for gifts or other non-exempt asset transfers that reduced your assets.

When considering asset transfers in the prior five years, the only exempt transfers which will not affect your Medicaid eligibility are transfers to: (1) your spouse; (2) your child if he or she is permanently disabled or blind; or, (3) a trust for the sole benefit of anyone under 65 years of age and permanently disabled. Additionally, the transfer of your home in the following situation will not affect your Medicaid eligibility: (i) transferring your home to your child if he or she is under 21 years of age; (ii) transferring your home to your child if he or she has lived in the home for at least two years prior to you moving to a nursing home where your child’s stay at the home provided needed care so that you could stay at home during that time; or, (iii) transferring your home to a sibling if that sibling already has an equity interest in the home and has lived there two years to your moving to a nursing home. Thus, the exceptions for which a gift will not affect your Medicaid eligibility within five-years of application are extremely limited.


Wednesday, May 29, 2019

Caring for Parents with Dementia

Ever increasing life expectancies mean we get to spend more time with our loved ones, but it also means facing greater health problems as we age. One of the most challenging health issues for aging adults is dementia. Dementia is not a specific disease, but rather describes a group of symptoms that are associated with a decline in memory and cognitive function. In severe cases, those suffering from dementia may not remember their family members, or who they are, and may generally not be able to continue to live independently. As a result, many families take on a caregiver role for parents who suffer dementia. The following legal issues should be considered by families when caring for parents with dementia at any stage:

Ability to Make Important Decisions

Each state has differing standards of mental capacity required to make binding legal decisions, such as entering into a contract or executing a written will. If the parent retains mental capacity as defined by the state’s law, then the parent can execute legal documents such as a durable power of attorney as a precaution for losing their mental competency. A durable power of attorney allows a trusted person to make decisions on the grantor’s behalf, such as financial and medical decisions.

Some parents may already lack the mental competency necessary to enter into legal agreements. If a parent lacks mental competency and has not executed legal documents to ensure their care going forward, the courts must be petitioned to grant a legal guardianship to allow such legal, medical, and financial decisions to be made on their behalf.

Existence of a Will

If a parent is suffering from dementia, it is crucial to determine whether the parent has a validly executed will. If not, and the parent has testamentary capacity (the legal capacity to execute the will), then a will should be drafted and executed to ensure that parent’s wishes materialize. If the parent lacks testamentary capacity, then an experienced elder law attorney should be consulted to determine what legal avenues are available within the state.

Elder Abuse

Those with dementia are at a high risk for elder abuse due to their diminished mental capacity. When caring for a parent with dementia, caregivers need to keep a vigilant eye out for others (including family) taking advantage of the parent through means of fraud, scams, and intimidation. Any out of the ordinary activity, such as transferring large sums of money, should be immediately reported to an experienced elder law attorney and relevant state and national agencies.


For more information on caring for a loved one, join Ruggiero Law Offices LLC in Paoli for a caregiver support group beginning May 30 at 11:30 a.m.


Tuesday, April 16, 2019

Estate Planning - Save on your taxes

Many people are under the misconception that estate plans are only necessary for those with substantial wealth. In fact, estate plans are important for everyone who wants to plan for the future. For those unfamiliar with the concept, an estate plan coordinates the distribution of your assets upon your death. Without an estate plan, your estate (assets) will go through the probate system, regardless of how much or how little you have. There are many reasons that everyone needs an estate plan, but the top reasons are:

1. Protecting You and Your Family

Most people associate an estate plan with death, but an estate plan also comes into play if you become incapacitated. Through a proper estate plan, you can designate who will be responsible for making your financial and medical decisions, the authority they will have, and restrictions you would like placed on their power.

2. Distributing Your Assets as You See Fit

Without an estate plan, your estate will go to the probate courts, and your assets will be distributed according to the state’s intestacy laws, which generally prioritize spouses, children and parents. In addition, not having a will or trust in place lends itself to the potential of disputes between surviving family members. The best way to ensure that your beneficiaries receive the inheritance you intend for them is by having a well-conceived estate plan.

3. Reducing Taxes

Whether married or single, having an estate plan can significantly reduce taxes owed upon the transfer of your assets to your heirs.. Without proper planning, any transfers from you to a beneficiary may be subjected to federal and state taxation. Trusts, one of the most well-known, but least understood, estate planning tools, present  excellent opportunities for reducing taxes associated with inheritance.

Through a system of trusts and transfers, you can reduce the overall tax burden associated with the inheritance. For those with substantial assets, more advanced tax planning strategies will be necessary. Regardless of your current wealth, you will likely be able to reduce the taxation of your estate’s assets with the help of an experienced estate planning attorney.

4. Providing for Your Family as You Believe Best

By combining the ability to distribute assets with other estate planning tools such as trusts, you can include conditions for each recipient. This ensures that the money you want to give your nephew for college will actually be used for college, even if that is still 10 or 15 years away.

As noted, estate planning is for everyone – not just the super-wealthy. Whether it’s avoiding a future family dispute, helping a loved one later in life, or reaching any other goals or objectives, having an estate plan is the best way to protect your interests.


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