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Starting January 1, a new Medicare regulation introduced by the Obama administration which encourages end-of-life planning went into effect. Under the new policy, outlined in a Medicare regulation, the government will pay doctors who advise patients on options for end-of-life care. One of those options may include forgoing any life-sustaining treatment. While the current health care legislation signed into law by President Obama in March 2010 allows Medicare to cover annual physical examinations or wellness visits, the new rule says Medicare will cover “voluntary advance care planning” to discuss end-of-life treatment as part of the annual visit. It is important to note that the underlying federal law, entitled The Patient Protection and Affordable Care Act, was held to be unconstitutional on January 31, 2011 by the U.S. District Court in Florida. However, this does not appear to have affected the implementation of the law and this regulation.
An initial complaint about the original provision in the 2010 law concerned the language surrounding end-of-life counseling which spurred the use of the term “death panels” by opponents of the legislation. Some feared that the new openness to discuss end-of-life care options would have a negative impact on our nation’s seniors, including cuts in funding for certain types of care. To the contrary, this rule now gives patients more control over decisions that will be made about their care, in the event they become unable to make such decisions on their own. We are in favor of the new Medicare benefit, provided it encourages voluntary discussions between the doctor and the patient about advance directives. As with life-and-death issues, there needs to be compassion and vigilance.
Written by: Robert A. Pyne, Professor of Theological Studies, Dallas Theological Seminary Appears in: Understanding Christian Theology, Part VI: Humanity and Sin Charles R. Swindoll and Roy B. Zuck, General Editors
Parts of my body can cease to be a part of me. If a shark were to eat one of my feet, the digested material would become part of his body, not mine. I would grieve the loss, but I would not be less human for it, and the shark would not receive characteristics of my personality. Some dual-aspect monists (Jehovah’s Witnesses, for example) believe that the immaterial and material aspects of our nature are so inherently bound to one another that the transfer of blood or organs from one person to another also transfers attitudes, emotions, and personal idiosyncrasies. I’m not sure what they would say about sharks, but personalities are not transferred in either case.
Again, we can be separated from our bodies and remain ourselves, and our bodies can deteriorate or be digested without threatening our resurrection. That kind of dualism, which I believe is biblical, allows for the transplantation of organs from one person to another without fear that their personalities will be blended.
The transplantation of organs does present other ethical concerns, however. To keep from damaging the donated parts, doctors prefer to “harvest” them while they are still receiving oxygenated blood-that is, while the donor is still breathing and his heart is still beating. The problem, obviously, is that these are conventional signs of life. That is why organ transplantation generally relies on the principle of “brain death.” In such cases the brain stem continues to maintain many bodily functions but the cerebral cortex is almost completely inactive. Since assessments of brain death are not purely objective, on occasion the removal of organs is the cause of death.
Such thoughts make us yearn for a simpler day, when the presence of breath provided an obvious sign of life. At the same time, knowing that people can sometimes be resuscitated after they stop breathing makes us appreciate more modern determinations of death, even if they sometimes make it difficult for us to recognize life’s boundaries. I have friends whose infant daughter was described by doctors as “95 percent brain dead.” She had had multiple surgeries and was kept breathing by a ventilator, but her condition was not improving. After losing any hope of recovery apart from a miracle, the parents eventually reached the painful decision to remove the machines. With tears all around the room, she lay dressed in white on her daddy’s lap as the doctor removed the vent. Freed from the tubes, she took about half a breath and was gone. In retrospect, my friends say they are not really sure when she died. Was it that agonizing morning when they said good-bye, or was it weeks earlier, when most of her brain shut down after one of her surgeries? It is impossible to say.
Cases like that leave us all vulnerable to what has been called the “bearded-man fallacy.” How much of a beard does a man have to have before we agree that he has one? Would a couple of ten-inch hairs dangling from his chin suffice? If not, how many more hairs would h need? What about someone who has to shave twice a day? Does he have a beard by dinner time? If we linger too long on such borderline examples, we may eventually convince ourselves we do not know exactly what a beard is, and we may be unwilling to say whether a man has one. I would suggest that we can usually tell. IN the same way we will usually know when death has occurred or when a life might still be saved. In those instances when we are not sure, we should err on the side.
Another controversial issue relating to organ transplants concerns the fact that certain animal organs can be transplanted into people. Many were shocked when doctors placed a baboon’s heart into a child, but it is difficult to think of good reasons why they should not have been able to do that. Animal-rights activists protested vigorously because the baboon was killed in the procedure, but the face that a human life was saved (at least for a while) certainly justifies that action. (some would call me a “species-ist” for that comment, but isn’t that what Psalm 8 teaches?) Setting aside concerns about the life of the donor, what is wrong with humans receiving animal organs? It does not seem different from using prescription drugs derived from their bodies (insulin, for example), and it is no more dehumanizing than using mechanical substitutes (like artificial hearts). In fact, it recognizes that organs made by God work better than ones that are made by hand.
Our understanding of the body does not favor one method of disposing of human corpses over another, but it does suggest that dead bodies should be treated with respect. The resurrection will occur just as completely with cremation as with interment in sealed vaults, and the sea will give up its dead just as readily as will the dry ground (Rev. 20:13). The Romans did shift from cremation to burial about the time Christian influence was strong, but that change may have been unrelated to the spread of Christianity. Believers have practiced all kinds of burial practices over the centuries, and there seems to be no distinctively Christian method.
Medical schools have long profited from the use of human cadavers. Since the careful study of the human body young doctors develop an appreciation for its marvelous design and ultimately contributes to better care for the living, this practice seems justified. However, the bodies should always be handled with reverence for the life that was led through them.
Pyne, Robert A., (2003). Part VI: Humanity and Sin. In: Understanding Christian Theology. Swindoll, Charles R, & Zuck, Roy B. (pp. 699-701). Nashville, TN: Thomas Nelson Publishers.
Charles R. Swindoll and Roy B. Zuck, General Editors
Written by: Robert A. Pyne, Professor of Theological Studies, Dallas Theological Seminary Appears in: Understanding Christian Theology, Part VI: Humanity and Sin Charles R. Swindoll and Roy B. Zuck, General Editors
There is a difference between preserving life and prolonging the process of dying. We seek the former, and not the latter.
There is yet another difference between accepting the inevitability of death and causing death. Again we seek the former, and not the latter. We should try to make people comfortable, and sometimes those same actions may hasten the inevitable. Painkillers, for example, may also slow the respiratory rate, making it more difficult to keep fluid out of the lungs. However, such methods should always be intended to bring relief, not death.
Some people seek to find relief in death, and that presents another problem. Should physicians or family members cooperate when asked to help someone commit suicide? The recent national debate over assisted suicide has often treated it as a distinct act, neither murder nor suicide. In actual fact, it is both murder and suicide. Two people conspire to kill someone. One seeks to kill herself, and that is suicide. The other seeks to kill someone other than himself, and that is murder. As noted in our discussion of handicapped persons, suicidal people need our help- not in committing suicide, but in not committing suicide.
Pyne, Robert A., (2003). Part VI: Humanity and Sin. In: Understanding Christian Theology. Swindoll, Charles R, & Zuck, Roy B. (pp. 699-701). Nashville, TN: Thomas Nelson Publishers.
Charles R. Swindoll and Roy B. Zuck, General Editors
Executor Commissions
Executors Commissions Pursuant to §2307 of the Surrogate’s Court Procedure Act:
5.00% on the first $ 100,000.00 of Estate Assets
4.00% on next $ 200,000.00 of Estate Assets
3.00% on next $ 700,000.00 of Estate Assets
2.5% on next $ 4,000,000.00 of Estate Assets
2% on any sums over $ 5,000,000.00 of Estate Assets
Example:
Gross Probate Estate value $1,500,00.00
5.00% on the first $ 100,000.00 = $ 5,000.00
4.00% on next $ 200,000.00 = $ 8,000.00
3.00% on next $ 700,000.00 = $21,000.00
2.5% on next $ 500,000.00 = $12,500.00
Total $1,500,000.00 = $46,500.00
Note:
Executor’s commissions are payable as one-half for receiving all sums (including income and capital gains) and one-half for paying out all sums (including expenses and final distributions). Paying and Receiving Commissions together equal one full commission.
Trustee Commissions
Trustee Commissions Pursuant to §2309 of the Surrogate’s Court Procedure Act:
Annual Commission Schedule:
$10.50 per $1,000 on first $400,000 of Principal
$ 4.50 per $1,000 on next $600,000 of Principal
$ 3.00 per $1,000 on any additional sums exceeding $1,000,000 of Principal
Example:
Value of Trust Principal as of 12/31/07 $1,500,000
$10.50 per $1,000 on first $400,000 = $4,200.00
$ 4.50 per $1,000 on next $600,000 = $2,700.00
$ 3.00 per $1,000 on next $500,000 = $1,500.00
Total Annual Commissions $8,400.00
Final Commissions:
1% of all sums paid out upon final distribution of the Trust
Notes:
Annual commissions are paid one-third out of income and two-thirds out of principal.
Supplemental Needs Trusts (SNTs) provide a supplemental source of funds for people with disabilities. Because of certain legal limitations on these trusts, individuals can remain eligible for government benefits that are based on need, such as Supplemental Security Income (SSI) and Medicaid. SNTs enhance the quality of life of the person with the disability (who is referred to as the “beneficiary” because the trust is set up for his or her benefit). The trust can purchase additional support services, therapy and care that are not covered, or are not covered adequately, by the Medicaid program, but which are vital to his or her well-being. The SNT is part of a “future care plan” which includes management of property and arrangements for personal care, vocational services, housing and case management.
SNTs and Government Benefits
SSI and Medicaid provide a basic level of support for food, clothing, shelter and medical care. The SNT fills in the gaps. Based on the beneficiary’s particular needs, the trust can pay for the following, to the extent they are not covered by Medicaid:
• Additional medical treatment or insurance
• Individualized therapy
• Special medical equipment
• Case management
• Recreational activities
• Other goods, services and activities.
A supplemental needs trust is not counted as a beneficiary’s resource for SSI purposes. For purposes of SSI and Medicaid, the trust is not “actually available” to the beneficiary because he or she has no right to demand that the trust pay for any good or services.
All distributions or payments from the trust are made at the sole discretion of the trustee, and they are usually made directly to providers of goods and services to the beneficiary. Any money paid directly to the beneficiary will be counted for purposes of eligibility for SSI and Medicaid.
In-kind donations of food, clothing or shelter – that is, when someone (including a parent) gives the disabled individual food, clothes, or a place to live for free or at a reduced rate – will generally reduce SSI payments by up to one-third. Other in-kind donations goods of services do not reduce SSI benefits. Unlike SSI, Medicaid does not count any type of in-kind donation as income.
There are three basic forms of SNTs. The appropriate type of trusts for a disabled individual depends on whose money or assets will be funding the trust. The amount of money available to fund the trust and whether there is someone who can act as trustee (i.e., administer the trust) are other factors. The purpose of this Memorandum is to help clarify the appropriate use of the “Third-Party” SNT.
A “Third Party” or “Escher” SNT is a trust set up and funded by a parent, grandparent or other person who has no legal duty to support the disabled individual (parents have a duty to support their children only until they reach age 21).
These trusts are called “third party trusts” because they are created by a third party – i.e., by someone who is not the beneficiary. In the most common situation, parents will establish an SNT for their child in their wills, which will take effect upon the death of the surviving parent. Caring relatives or friends may also want to set up a trust to be assured that their money is being used to improve the disabled individual’s quality of life, and not causing problems with eligibility for government benefits. The advantage to a third party trust is that the parent can use it to provide for a disabled child during his or her lifetime and will still be able to direct how any remaining assets should be distributed after the child’s death.
As long as the SNT was established when the parent had no duty to support the child and the trust was not funded with any property of the child, the State has no right of recovery and no right to place a lien against the trust property. In other words, if none of the beneficiary’s assets were used to fund the trust, there is no requirement that the State be paid back for Medicaid expenditures upon the death of the beneficiary.
Guest Post by Robert G. Gunderson Attorney At Law
The purpose of this memorandum is to provide some guidance for the trustee’s administration of a Supplemental Needs Trust.
The Trust is specifically designed to protect the continued eligibility for public benefits, most importantly Medical Assistance (M.A.) and Supplemental Social Security Income (S.S.I.), while providing for “supplemental needs” of the beneficiary. Such needs are those items which are in addition to and which are not provided by any public benefit program. Continued eligibility for public benefits will require close supervision on the part of the trustee to ensure that applicable asset and income limits are not exceeded as a result of Trust distributions.
I. GENERAL ELIGIBILITY RULES.
Generally one who is eligible for public assistance under the Supplemental Security Income (“SSI”) program will also automatically qualify for medical cover under Medical Assistance (“MA”) when he/she receives SSI benefits.
The SSI program is a “needs-based” cash assistance program which is designed to assure a minimum level of income to people who are aged, blind or disabled and who have limited income and assets. In order to initially qualify and remain eligible to participate under the program, the recipient cannot own countable assets (called “resources”) in excess of $2,000.00 and cannot have unearned income in excess of the Federal benefit rate, which as of January 2004 is $564.00 per month. If either of these maximum levels is exceeded by distributions from the Trust, or some other cause, SSI eligibility and MA eligibility can be lost.
“Resources” for purposes of the SSI program include cash, or other liquid assets and any non-exempt property that an individual owns and which could be converted to be used for that individual’s support and maintenance (i.e., food, clothing and shelter). Resources do not include certain exempt items such as a home, an accessible vehicle or one valued at less than $4,500.00, personal property less than $2,000.00, prepaid burial or cemetery lots. Although the value of the assets held in the name of the Supplemental Needs Trust will far exceed resource limitation, applicable government regulations provide that assets of the Supplemental Needs Trust will not be deemed to be “available” as a resource for SSI and MA, if the SSI recipient has no ability to revoke the trust or control any distributions from it. The Supplemental Needs Trust has been designed so that the beneficiary has neither the ability to control or terminate the Trust nor the ability to compel or control any distributions. Consequently, the assets will not be deemed “available” and therefore will not be countable resources under the SSI and MA programs.
The amount of a person’s income is also used to determine both eligibility and SSI and MA. For SSI purposes, income is anything an individual receives during a calendar month and can be used to meet his or her needs for food, clothing or shelter. Income may be in cash or 2
“in-kind”. In-kind income is when someone receives actual items of food, clothing or shelter or something that can be used to get such items, rather than cash. The receipt of any type of income will generally reduce SSI benefits on a dollar-for-dollar basis. Thus, if the trustee were to simply give $100.00 to the beneficiary from the Trust, or alternatively, bought them $100.00 of groceries, the cash and the groceries would both be treated as income and SSI benefits would be reduced by $100.00. If total cash distributions from the trust and other sources exceeded $564.00 in any given month, the beneficiary would not receive any SSI payments and would be ineligible for MA coverage during that month.
II. TRUST DISTRIBUTIONS.
In order to appreciate the wants and needs of the beneficiary, the trustee must stay in close contact with the beneficiary and their social worker, residential staff, vocational staff and family. Accordingly, the trustee must be mindful of the eligibility rules and be diligent and consistent with respect to Trust distributions. Note the following guidelines:
1. The Trust should never distribute cash. This is true regardless of whether the beneficiary uses the cash for food, clothing and shelter, or for supplemental, non-support needs, or any item.
2. Do not use funds from the Trust to purchase food, clothing, or shelter. These items will constitute “in-kind” income and would most likely result in a 1/3 reduction of the SSI funds. Therefore, use SSI benefits for food, shelter and clothing, and use distributions from the Trust for “non-necessities”, such as the phone bill, cable bill, entertainment, vacation, medical or dental items not covered by MA.
3. Distributions from the Trust should be made directly to the supplier of the goods and services. Pay for the goods or services directly out of the Trust checking account and then list goods as a trust asset.
4. Distributions related to medical needs which are not already provided by MA will always be exempt from consideration as income under the SSI program and most other public programs. The purchase of any good or medical service not already available through MA or another public benefit program order will not cause a reduction in SSI benefit levels.
Note the following examples of the above guidelines:
A. If the beneficiary, or the Trust owns a home, the home is an exempt resource, and improvements and repairs to the home should not constitute income. Pay directly the plumber, painter or other contractor to make any necessary repairs to the house, or someone to take care of the lawn, shovel snow, etc.; 3
B. If the beneficiary is interested in attending school or other adult educational program, pay the tuition, purchase books and supplies and arrange for transportation with funds from the Trust;
C. If the beneficiary enjoys reading, movies or music, purchase the latest books/tapes/CDs, enroll in a book-of-the-month club or obtain subscriptions to favorite magazines;
D. The Trust could be used for entertainment purposes, including: trips to the movies, plays, museums and sporting events, the purchase of a new television, VCR, CD or sound system; and the installation of cable or satellite TV; hobby – supplies may be purchased related to the hobby;
E. If the beneficiary enjoys travel, Trust funds could be used for a vacation trip or to visit friends or relatives (provided that the tickets cannot be converted to cash). Trust funds can be used to send a chaperone along on the trip;
F. Trust funds could also be used to provide transportation: purchase and maintain a car, if the beneficiary has a driver’s license or requires an accessible vehicle, or cab fare or for bus passes. Payments for car repairs, gas, oil changes and upkeep may be paid by the Trust;
G. Household goods and other items of personal property could also be purchased with a portion of the Trust funds listed as a Trust asset and used by the beneficiary;
H. Bills for items such as cleaning, supplies and paper products and services, such as telephone expenses, cable TV, internet access, etc. and other items not constituting food, clothing or shelter, could also be paid with funds from the Trust;
I. Services, dental care, physical therapy, massages, a private room in the hospital, and other medical costs, to the extent not covered by MA, could be paid for with Trust funds;
J. Almost any other purpose not covered by SSI, MA or other government program, provided that funds are not used directly or indirectly for food, clothing or shelter.
III. TRUSTEE’S DUTY OF CARE.
The trustee has certain duties, sometimes called “fiduciary” duties. This mean the trustee will be held to a higher standard of conduct than the average person when dealing with matters related to the Trust. In general, the trustee must carry out their duties with reasonable care, and never put your own personal interests above the beneficiary. For example, the trustee is prohibited from borrowing funds from the Trust or from using any Trust funds for personal benefit, such as to pay their own bills, invest in a business in which the Trust is involved. The beneficiary has no control over the Trust, it is the trustee’s sole and absolute discretion which controls the Trust. However, this discretion must always be exercised in the best interest of the beneficiary.
Fiduciary duties include the following:
1. Receive funds from every source, except the beneficiary or their spouse;
2. Deposit and invest funds in accounts in the name and tax identification number of the Trust;
3. Make proper disbursements according to the limitations of the Trust;
4. Make periodic accountings if required by the Trust;
5. File State and Federal Income Tax Returns and pay any taxes due;
6. Pay any other taxes and maintenance required to maintain Trust assets;
7. Understanding the needs of the beneficiary and the status of the SSI and MA.
IV. INVESTMENTS
The trustee is required to follow the “prudent investor” standard in managing the Trust, which requires careful and accurate accounting of principal, income, disbursements, and investments based on any limitations as required by the Trust, a “reasonable person standard”, and awareness of the purpose of the Trust and the needs of the beneficiary. Trustees can be held personally liable for failure to observe the correct standards in any of the above areas. Trustees are not allowed to “self-deal” in handling of the funds. Self-dealing means that the trustee should not use the Trust funds in any way that will provide any enhancement to the trustee or other related party other than compensation for services rendered as allowed by the Trust.
Trust investments must always be reasonable. Any investment in real or personal property should be secured by some type of written and publicly recorded collateral security document. Unsecured loans, especially to a fiduciary, or close relation or business entity of a fiduciary, are almost always suspect. If property is purchased for use by the beneficiary, there must be a reasonable expectation that the property will be used by the beneficiary in the approximate percentage owned by the Trust, or that it is an investment that will yield a reasonable return in appreciation or income. If not so used, it may be reasonable and perhaps required that rent be charged and collected from other parties.
Sometimes successor beneficiaries or other interested party become concerned about the trustee’s current handling of the Trust. If the trustee, or other interested party, has a situation of which they are unsure, a petition can always be filed in the Probate Court for “instructions” or approval from the court. This will generally exonerate the trustee from any future liability relating to that issue.
V. ESTABLISHING ACCOUNTS
Banks and other financial institutions may vary in the way that they handle trusts and accounts set up in the name of the Trust. The name on the account should always use the Trust name and should always use the Trust tax identification number and signify that the trustee is holding the funds in a fiduciary capacity with reference to the Trust document. If there are co-trustees, they should decide if they wish to have any restrictions on depositing or withdrawing funds from an account such as use of multiple signatures, maximum withdrawals, wire or telephone transfers, and conditions for other transactions. The trustee should never use his or her own social security number on the account, nor the beneficiary’s social security number. The bank or investment company may ask to see an original of the Trust, but have them copy it and return the original to you.
VI. REPORTS AND DISCLOSURE.
The use of the Supplemental Needs Trust is authorized by law and the trustee should always feel free to provide whatever information required by SSI or MA or IRS.
Social Security Administration: You may need to provide the Social Security Administration with information concerning the existence and operation of the Supplemental Needs Trust. The SSI program may thereafter require periodic reports reflecting how trust distributions were ultimately made. It is important for you to keep careful records with respect to the goods, services and payments made from the Trust. Keep copies of all checks and receipts and journal to record the transactions and bank statements. It is best to maintain these records until the Trust is terminated.
MA: The above comments relative to Social Security also apply to MA (administered by the county) and will assist in any reports requested by the county to maintain MA.
Internal Revenue Service: By April 15 of each year, the trustee is required to file Form 1041 U.S. Fiduciary Income Tax Return for any calendar year in which the Trust earns income in excess of $500.00 (this figure may change per IRS Rules). A Minnesota income tax return is also required. The trustee should consult with a certified public accountant to discuss accounting procedures and income tax filing requirements for the Trust. The fees of the CPA and the tax due should be paid by the Trust.
For IRS purposes, the Supplemental Needs Trust is known as a “Complex Trust” because the income, generally, is not distributed to the beneficiary. It is generally recommended that the income of the Trust (ex. interest and dividends) be shown on the Trust’s tax return rather than the beneficiary’s. Even thought the beneficiary will likely be in a lower “tax bracket” than the 6
Trust, if the income is shown on the beneficiary’s tax return it could adversely effect their eligibility for SSI and MA.
Copyright 2004 Robert G. Gunderson Attorney at Law
Suite 411, 5200 Willson Road, Edina, MN 55424 (952)-920-8444
A Trustee is a fiduciary and is subject to the commonly recognized fiduciary duties of diligence, loyalty, obedience and prudence. All trustees are required to:
- Maintain accurate records
- Invest the funds as a reasonably prudent investor
- File all appropriate tax returns and accountings
- Comply with the terms of the trust document itself
Duties and Responsibilities Unique to SNT’s:
1. Securing or Maintaining Public Benefit
The special needs trust is a spendthrift discretionary trust and can be administered without concern for the eligibility requirements for the various public benefit programs. It is essential that Social Security benefits and trust funds be maintained separately and that they are not commingled with personal assets.
2. Paying Fees on Social Security Cases
When attorney fees have not been paid, Title II of the Social Security Act allows withholding of claimant’s past-due benefits. Anyone may pay the fee.
3. Trust Administration with Public Benefits
Once the trust is funded, the trustee should provide a copy of the trust to the Social Security Administration, and in the cover letter should explain why the trust is exempt. Distributions to third parties on behalf of the beneficiaries are exempt from being counted as income. If the trust was created by court order, notice of the hearing should have been provided to any agency providing cash benefits to the beneficiary.
4. Trust Provisions Requiring Special Attention
Annual Evaluation: The trustee or his or her agent must arrange for an annual evaluation of the beneficiary, addressing specific topics. This may be accomplished by participating in a person-centered planning meeting with a community mental health agency, or in a private meeting.
Defending the Trust: A special needs trust should include a provision requiring the trustee to defend the trust from attack by the SSA. The trustee shall exhaust all legal options to defend the trust before it is terminated because adverse determinations.
Letter of Intent: If there is a dispute about a trust, a judge will look to give effect to a letter of intent. The letter should state the grantor’s intent, usually the parent, so that the trustee may fight the system. The trustee must make his or her best efforts to give effect to the specifics in the letter.
Permissible Distributions from a Supplemental Needs Trust:
By way of example, the trustee may use any of the following for expenditures from the trust:
- Automobile/Van
- Accounting Services
- Acupuncture/Acupressure
- Appliances (kitchen, household, entertainment)
- Alterations/mending clothes and shoe repairs
- Bottled water or water service
- Bus pass/public transportation costs
- Camera, film, recorder and tapes, development of film
- Clothing
- Clubs and club dues (record clubs, book clubs, health clubs, service clubs, zoo, advocacy groups, museums)
- Computer hardware, software, programs, and Internet service
- Conferences and travel related to same
- Courses or classes (academic or recreational) including supplies
- Curtains, blinds, drapes, and the like
- Dental work not covered by Medicaid, including anesthesia
- Down payment on home or security deposit on apartment
- Dry cleaning and/or laundry services
- Elective surgery
- Fitness equipment
- Funeral expenses
- Furniture, home furnishings
- Gasoline and/or maintenance for automobile
- Haircuts/salon services
- Holiday decorations, parties, dinner dances, holiday cards
- Home alarm and/or monitoring/response system
- Home improvement
- Home purchase(to the extent not covered by benefits)
- House cleaning/maid services
- Insurance(to the extent not covered by benefits)
- Legal fees/advocacy
- Linens and towels
- Massage
- Musical instruments (including lessons and music)
- Non-food grocery items (laundry soap, bleach, fabric softener, deodorant, dish soap, hand and body soap, personal hygiene products, paper towels, napkins, Kleenex, toilet paper, any household cleaning products)
- Over-the-counter medications (including vitamins and herbs, etc.)
- Personal assistance services not covered by Medicaid
- Pet and pet’s supplies, veterinary services
- Physician specialists if not covered by Medicaid
- Private counseling if not covered by Medicaid
- Repair services (appliance, automobile, bicycle, household, fitness equipment)
- Snow removal/landscaping/lawn service
- Sporting goods/equipment/uniforms/team pictures
- Stationary, stamps, cards, etc.
- Storage units
- Taxicab
- Telephone service and equipment, including cell phone, pager, Medicaid
- Therapy (physical, occupational, speech) not covered by Medicaid
- Tickets to concerts or sporting events (for beneficiary and an accompanying companion)
- Transportation (automobile, motorcycle, bicycle, moped, gas, bus passes)
- Utility bills (direct TV, cable TV, electric, heating)
- Vacation (including paying for personal assistance to accompany the beneficiary)
Examples of Trust Distributions That Will Reduce SSI Benefit:
- Basic shelter-relaxed expenses
- Food
- Basic items of clothing
- Cash for any purpose
Examples of Impermissible Trust Distributions:
- Paying for a service already paid for by another source
- Distribution not in the best interest of the beneficiary (made primarily for the benefit of another person)
A Revocable Living Trust (RLT) is a trust which you create during your lifetime. It is also called an Inter vivos Trust which means ‘during your life’ or Living Trust. The fact that the trust is revocable means that it may be changed or terminated at your wish as long as you continue to be competent at that time.
Why should I use a Revocable Living Trust versus a Will?
One of the major benefits of having a Revocable Living Trust is allowing you to avoid probate. It will also seamlessly allow a Successor Trustee to manage your assets if you become incapacitated. Please note however that the Revocable Living Trust does not replace your Will, although it will act similar to a Will and distribute the property pursuant to your wishes. Any good estate plan including a RLT will include the use of a Pour-Over Will which will pour any assets which have not been titled into the trust into the trust upon your death.
How does my Revocable Living Trust function?
During your lifetime your RLT will pay all income generated to you. In addition, it allows you to use any of the assets within the trust that are needed or requested by you. Upon your death, the Revocable Living Trust will distribute the assets pursuant to your distribution plan in a manner similar to your Will. As previously mentioned, there are several advantages of utilizing a Revocable Living Trust over a Will.
What exactly are the benefits of a Revocable Living Trust?
The use of a RLT allows for property to be managed continuously and without interruption during incapacity. Through proper planning and funding, a RLT allows your named Successor Trustee to step in and manage all of your financial affairs should you become incapacitated. By doing this planning you can avoid the stressful, expensive and time-consuming process of having a Guardian appointed if you were to become incapacitated. Also, it is generally agreed that a Successor Trustee will be accepted more readily than an Agent under a Durable Power of Attorney. Another major benefit of the RLT is that it avoids the public Probate process which requires the intervention of the Surrogate’s Court. Please note that by implementing a Revocable Living Trust you may not avoid all costs, as you will probably want to have an experienced attorney assist your beneficiaries as they distribute the property held by the trust and then terminate the trust if necessary. However the use of the trust will allow you to avoid much of the time delays and aggravations which are often associated with the Probate process. Further, if you have property in other states than New York, having those properties transferred into your RLT will allow you to avoid probate in those states as well. Finally some people like that a Revocable Living Trust provides privacy versus the Probate process.
Are there disadvantages to a Revocable Living Trust?
One of the disadvantages of the Revocable Living Trust is that it is generally more expensive to draft and implement than a Will and therefore, the expenses are not deferred until your death, as is the case in Probate. In addition, to properly fund the trust there may be expenses incurred in re-titling your real estate. Finally, there may also be commissions payable to a Trustee similar to what an Executor would be able to receive under a Will. Please note however that these fees are generally waived and not taken as the trustee is a family member who is going to be an ultimate beneficiary of the trust. Lastly, as the RLT is revocable and you remain in control, the RLT does not provide any asset protection from creditors, nursing homes or the Medicaid Program.
What are the tax consequences of having a Revocable Living Trust?
During your lifetime and as long as you are the trustee and managing the trust all of the items which you place into the trust will be taxed using your social security number, therefore you will not see any change at all tax wise. All income will be reported on your normal income tax return as it was before you set up the RLT. Also note, the trust will not have an effect on estate or gift taxes as when you pass away any assets which are in the trust will be considered in your taxable estate for estate tax purposes. However proper planning with your Revocable Living Trust will allow you to minimize your estate taxes if you are married and take advantage of the exemptions allowed by law.
Can I change or revoke the Revocable Living Trust?
Yes, as long as you are alive. Generally, any amendment or revocation will require additional documents to be prepared by us and executed by you.
What happens to my Revocable Living Trust upon my death?
Upon your death your trust will become irrevocable and is therefore no longer able to be amended or changed. All of the assets in your trust will still be considered to be a part of your gross taxable estate and the Trustee (or Successor Trustee if you were still the Trustee at the time of your death) will then take over the duties and obligations of the RLT and distribute the assets according to your particular estate plan. Please note the Trustee may also be responsible for some miscellaneous such as insuring that a final tax return is prepared and upon distribution of the trust that a final accounting has been done. It is a good idea for your Successor Trustee to contact us to ensure that all things are properly concluded at your death.
What does “Grantor”, “Trustee” and “Beneficiary” mean?
The Grantor in this case of a RLT is you, the person who establishes up the trust. It is generally also the person who funds the trust. The Trustee is the person who is responsible for administering the trust, investing the assets and handling any of the administrative duties which need to be performed. Finally, the Beneficiary is the person who benefits from the trust. Normally, a Revocable Living Trust is set up such that you take all three of these roles. You are the person who sets up the trust, you are the trustee who administers the trust during your lifetime and you are the one who is paid the income and benefits as a beneficiary of the trust during your lifetime.
If I have a RLT do I still need other estate planning documents?
As mentioned before, the Revocable Living Trust is only a part of your estate plan. You will still need a Pour-Over Will as discussed above, an Enhanced Durable Power of Attorney, Health Care Proxy, HIPAA Personal Health Information Release and a Living Will.
How important is the titling of property with respect to my plan?
Re-titling property into the trust is a very important part of your estate plan. Without properly re-titling of your assets into your RLT you will not be able to avoid probate for those assets. In addition, if property is not titled correctly your estate plan may not function as was intended. For example, if your intention was for a certain account to be distributed through the RLT and it was still owned in joint names when you passed away, then that property will not be distributed pursuant to the trust and will instead pass directly to the joint owner of the account.
A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a “trustee,” holds legal title to property for another person, called a “beneficiary.” If you have been appointed the trustee of a trust, this is a strong vote of confidence in your judgment and probity. Unfortunately, it is also a major responsibility. Following is a brief overview of your duties:
Fiduciary Responsibility: As a trustee, you stand in a “fiduciary” role with respect to the beneficiaries of the trust, both the current beneficiaries and any “remaindermen” named to receive trust assets upon the death of those entitled to income or principal now. As a fiduciary, you will be held to a very high standard, meaning that you must pay even more attention to the trust investments and disbursements than you would for your own accounts.
The Trust’s Terms: Read the trust itself carefully, both now and when any questions arise. The trust is your road map and you must follow its directions, whether about when and how to distribute income and principal or what reports you need to make to beneficiaries.
Investment Standards: Your investments must be prudent, meaning that you cannot place money in speculative or risky investments. In addition, your investments must take into account the interests of both current and future beneficiaries. For instance, you may have a current beneficiary who is entitled to income from the trust. He or she would be best off in most cases if you invested the trust funds to generate as much income as possible. However, this may be detrimental to the interest of later beneficiaries who would be happiest if you invested for growth. In addition to balancing the interests of the various beneficiaries, you must consider their future financial needs. Does a trust beneficiary anticipate buying a house or going to school? Will she be depending on the trust income for retirement in 15 years? All of these questions need to be considered in determining an investment plan for the trust. Only then can you start considering the propriety of individual investments.
Distributions: Where you have discretion on whether or not to make distributions to a beneficiary you need to evaluate his current needs, his future needs, his other sources of income, and your responsibilities to other beneficiaries before making a decision. And all of these considerations must be made in light of the size of the trust. Often the most important role of a trustee is the ability to say “no” and set limits on the use of the trust assets. This can be difficult when the need for current assistance is readily apparent.
Accounting: One of your jobs as trustee is to keep track of all income to, distributions from, and expenditures by the trust. Generally, you must give an account of this information to the beneficiaries on an annual basis, though you need to check the terms of the trust to be sure. In strict trust accounting, you must keep track of and report on principal and income separately.
Taxes: Depending on whether the trust is revocable or irrevocable and whether it is considered a “grantor” trust for tax purposes, the trustee will have to file an annual tax return and may have to pay taxes. In many cases, the trust will act as a pass through with the income being taxed to the beneficiary. In any event, if you keep good records and turn this over to an accountant to prepare, this should not be a big problem.
Delegation: While you cannot delegate your responsibility as trustee, you can delegate all of the functions described above. You can hire financial advisors to make investments, accountants to handle taxes and bookkeeping for the trust, and lawyers to advise you on questions of interpretation. With such professional assistance, the job of trustee need not be difficult. However, you still need to communicate with those you hire and make any discretionary decisions, such as when to make distributions of principal from the trust to one or more beneficiaries.
Fees: Trustees are entitled to reasonable fees for their services. Family members often do not accept fees, though that can depend on the work involved in a particular case, the relationship of the family member, and whether the family member trustee has been chosen due to his or her professional expertise. Determining what is reasonable can be difficult. Banks, trust companies, and law firms typically charge a percentage of the funds under management. Others may charge for their time. In general, what’s reasonable depends on the work involved, the amount of funds in the trust, other expenses paid out by the trust, the professional experience of the trustee, and the overall expenses for administering the trust. For instance, if the trustee has hired an outside firm for investment purposes, that expense would argue for the trustee taking a somewhat smaller fee. In any case, it makes sense to consult with a professional experienced with trust work who can guide you on what would be normal fees considering all of the circumstances.
In short, acting as trustee gives you a wonderful opportunity to provide a great service to the trust’s beneficiaries. The work can be very gratifying. Just keep an eye on the responsibilities described above to make sure everything is in order so no one has grounds to question your actions at a later date.
When the death of a loved one occurs, legal, financial and emotional issues will arise and people cope with the loss of a loved one in many ways. For some, the experience may lead to personal growth, even though it is a difficult and trying time. There is no right way of coping with death. The way a person grieves depends on the personality of that person and the relationship with the person who has died. How a person copes with grief is affected by the person’s cultural and religious background, coping skills, mental history, support systems, and the person’s social and financial status.
The terms grief, bereavement, and mourning are often used in place of each other, but they have different meanings.
Grief is the normal process of reacting to the loss. Grief reactions may be felt in response to physical losses (for example, a death) or in response to symbolic or social losses (for example, divorce or loss of a job). Each type of loss means the person has had something taken away. Grief may be experienced as a mental, physical, social, or emotional reaction. Mental reactions can include anger, guilt, anxiety, sadness, and despair. Physical reactions can include sleeping problems, changes in appetite, physical problems, or illness. Social reactions can include feelings about taking care of others in the family, seeing family or friends, or returning to work. As with bereavement, grief processes depend on the relationship with the person who died, the situation surrounding the death, and the person’s attachment to the person who died. Grief may be described as the presence of physical problems, constant thoughts of the person who died, guilt, hostility, and a change in the way one normally acts.
Bereavement is the period after a loss during which grief is experienced and mourning occurs. The time spent in a period of bereavement depends on how attached the person was to the person who died, and how much time was spent anticipating the loss.
Mourning is the process by which people adapt to a loss. Mourning is also influenced by cultural customs, rituals, and society’s rules for coping with loss.
Finding support after a loss:
Turn to friends and family members – Now is the time to lean on the people who care about you, even if you take pride in being strong and self-sufficient. Draws loved ones closer, rather than avoiding them, and accept the assistance that’s offered. Oftentimes, people want to help but don’t know how, so tell them what you need – whether it’s a shoulder to cry on or help with funeral arrangements.
Draw comfort from your faith – If you follow a religious tradition, embrace the comfort its mourning rituals can provide. Spiritual activities that are meaningful to you – such as praying, meditating, or going to church – can offer solace. If you’re questioning your faith in the wake of the loss, talk to a clergy member or others in your religious community.
Join a support group – Grief can feel very lonely, even when you have loved ones around. Sharing your sorrow with others who have experienced similar losses can help. To find a bereavement support group in your area, contact local hospitals, hospices, funeral homes, and counseling centers.
Talk to a therapist or grief counselor – If your grief feels like too much to bear, call a mental health professional with experience in grief counseling. An experienced therapist can help you work through intense emotions and overcome obstacles to your grieving.
Dealing with the practical issues:
The time immediately following the death of a loved one can be overwhelming, with grief and bereavement complicated by a seemingly endless number of tasks. The immediate days following the death will be focused on the funeral or memorial service arrangements. Soon after, however, various financial legal and everyday issues must be addressed. Many people find it very difficult to be sure they have taken care of everything. The following is a list of tasks that are likely to need attention:
Call the funeral home you have selected. If you have not chosen a funeral home ahead of time, the New York State Funeral Directors’ Association can give you information on funeral homes in your area and can be reached at 518-452-8230, or ask a friend, family member, or clergy for a reference to a local funeral home. It is important to keep accurate records regarding funeral and other expenses. After the estate is opened, the family members may be entitled to reimbursement from the estate.
Locate the original Last Will and Testament and/or Trust and place in safe-keeping. Do not unstaple any documents. Ascertain who the nominated Executor named in the Will is.
If your loved one was a veteran, you may be able to get assistance with the funeral, burial plot, or other benefits. For information on benefits call the Veterans Administration at 800-827-1000. Also, the phone number for your local Veterans Agency is usually listed under Town Offices. You will need a copy of your loved one’s discharge papers.
Obtain 10-15 copies of the death certificate. Your funeral director should be able to provide you with these or they can be obtained at your town or city hall at a later date. Most insurance companies and asset holders require Death Certificates when liquidating or transferring assets after estate has been opened.
If your loved one was receiving Social Security benefits, notify your local Social Security office or call 800-772-1213 and provide them with the date of death, since these benefits will stop. Overpayments will result in a difficult process of repayment. If you are a surviving spouse, ask about your eligibility for increased benefits. Also, check on benefits that any minor children may be entitled to receive.
Gather financial records and statements for all accounts including banks, investments companies, life insurance and annuity companies, etc. Also determine whether there are joint owners or beneficiaries on each of the accounts. Moreover, establish whether there are any outstanding debts of the decedent that need to be resolved.
Locate any safe deposit box (es). Unless you are a joint owner of the safe deposit box, the only contents accessible are the burial instructions and the decedent’s Last Will and Testament, if any. All other contents must remain in the box until you are appointed as a personal representative. You may need an appointment to open the boxes. Contact the bank and speak with the safe deposit box attendant about the bank’s procedures. It is probable that two bank officers will accompany you while an inventory is made of the box. If there is an original Last Will and Testament/Trust Agreement in the box, the bank will automatically send it directly to the Probate Court. Please ask the bank to make a copy of the Will/Trust and forward a copy to your attorney.
Seek the advice of an attorney experienced in probate and estate/trust administration. While certain assets will pass “outside” of probate and may not require the assistance of a law firm, many assets will require court intervention. The attorney experienced in these matters will be able to guide the nominated executor. He or she should be sure to bring the original Will and death certificates, financial records and a listing of the family members, both deceased and surviving.
Seek the advice of a certified public accountant about filing the deceased’s income tax return for the year of the death. Keep monthly bank statements on all individual and joint accounts that show the account balance on the day of death, since you will need this information for the probate petition and estate tax return, if necessary.
Contact the health insurance company or employer regarding terminating coverage for the deceased while continuing coverage for others covered through the policy
Investigate if your loved one was entitled to any union death benefits
Return credit cards of the deceased with a certified copy of the death certificate, or notify the credit card company if you, as the survivor, want to retain use of the card.
Make sure that important bills, such as mortgage payments and utilities continue to be paid.
Have Post Office Hold Mail
Notify Attending Physician
Cancel or rearrange home deliveries
Arrange for care of pets, if any
Documents you may need to complete the tasks:
Death Certificates (10 – 15 certified copies)
Social Security Card
Marriage Certificate
Birth Certificate
Birth Certificate for each child, if applicable
Insurance Policies
Deed and Titles to Property
Stock Certificates
Bank Books
Honorable Discharge Papers for a Veteran and/or V.A. Claim Number
Recent Income Tax Forms and W-2 Forms
Automobile Title and Registration Papers
Loan and Installment Payment Books and/or Contracts
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