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Elder Law

Babette B. Bach, Esq. to Speak on Medicare Changes for 2013 Post-Election

By Firm News, Medicare

 Babette Bach will be the keynote speaker for a seminar on November 14, 2012 at Kobernick House in Sarasota, Florida regarding potential Medicare changes in 2013.  Topics will include potential Medicare changes now that the election is over, what is already in place despite the election and what could change after the election based on the outcome of the election.

Ms. Bach is looking forward to speaking to the community on such an important topic.

If you need legal advice for estate planning, Medicare, Medicaid planning, or VA planning, please contact our office at (941) 906-1231 for an initial consultation.

November 12, 2012
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Landmark Decision for Medicare Recipients Increasing Medicare Coverage for Home Care and Skilled Nursing Rehabilitation

By Elder Law, Government Benefits, Long-Term Care, Medicare

Historically well informed Elder Law advocates have challenged the denial of Medicare coverage for a full 100 days in skilled care after a three night hospital stay under the premise that this common practice is not consistent with federal law.  Finally this denial of coverage may end thanks to a landmark class action settlement.

            Those receiving rehabilitation in skilled care or Medicare home care have historically been told that coverage will end when the patient is no longer showing signs of improvement.  However, neither Medicare law nor any Medicare regulations require the patient show a likelihood of improvement.  But this became “the” accepted practice due to provisions of the Medicare manual and guidelines use by Medicare contractors which suggested that coverage should be denied or terminated when a patient reaches a plateau or is not improving or is stable.

            This settlement should result in increased Medicare coverage for rehabilitation in skilled care and home care if the services are needed to “maintain the patient’s current condition or prevent or slow further deterioration.”

            Under a proposed settlement expected to be approved by a Federal Judge this week,  Federal officials will rewrite the Medicare manual to make it clear that Medicare coverage of nursing and therapy services does not turn on the presence or absence of an individual’s potential for improvement but is based on the patient’s need for care.

            While this may increase the Medicare budget it is an honest reflection of what the law is currently.  Is it an honest correction of a misapplication of regulations interpreting the law.

Many beneficiaries may now be able to continue Medicare home care and thereby avoid skilled care.  In these cases, Medicare costs may actually be reduced by keeping the patient at home.  Many more patients should be able to receive the full 100 days of skilled nursing services, so long as the care is required to maintain the patient’s current condition.

If you need legal advice for estate planning, Medicaid planning & Medicare, or VA planning, please contact our office at (941) 906-1231 for an initial consultation.

October 26, 2012
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Reverse Mortgage-Consumer Financial Protection Bureau seeks Stronger Disclosures

By Elder Law, Estate Planning, Real Estate

The Consumer Financial Protection Bureau is planning stronger disclosure requirements for reverse mortgages as more evidence emerges that senior citizens are using the product without fully understanding its main features and risks.

As part of a Dodd-Frank Act requirement, the agency was set to release a study showing  that signs reverse mortgages are not being used as intended, with increasingly younger borrowers taking out larger pots of money rather than gradual income streams to help finance their later years.

The bureau, which is required to study the reverse mortgage sector and identify potential consumer protection concerns, found that 73% of borrowers last year accessed nearly all or almost all of their home equity available in the reverse mortgage — an increase of 30 percentage points since 2008 — leaving few funds available later in life.

Nearly half of borrowers were younger than 70, and taking out a loan at the earliest eligibility (typically age 62) has become more common. The study found the biggest players in selling reverse mortgages currently are nonbanks, and the sector is “increasingly dominated by small originators.” The two largest providers, Wells Fargo and Bank of America, left the market last year and MetLife left it in April.

“It can be hard to tell a reverse mortgage is better than downsizing, refinancing or using a traditional home equity loan,” CFPB Director Richard Cordray said. “Even when a homeowner makes a careful decision to take out a reverse mortgage, it can be a challenge to select the right product and determine the appropriate amount to borrow initially.”

Consumers need to better understand reverse mortgage loans.  Additionally, consumers need to understand that this is an expensive product which is only recommended as a last resort.

If you need legal advice for reviewing a reverse mortgage, Medicaid planning, VA planning, tax planning, estate planning or trust and probate administration please contact our office for an initial consultation at (941) 906-1231.

September 27, 2012
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People with Medicare Beware- COBRA is Not Coverage as a “Current” Employee

By Medicare

There is an increase in the number of Medicare beneficiaries who are delaying beyond age 65 to enroll in Medicare Part B.   They are thinking that because they pay for and receive health coverage under COBRA that they do not need to enroll in Medicare Part B.  This is incorrect and comes with heavy penalties.

The beneficiary who does not enroll during the initial enrollment period at their 65th birthday must wait to enroll in the next general enrollment period (January-March) and the coverage does not begin until July 1st of that year.  Further, there is a 10% late penalty assessed to the standard monthly premium for every 12 months of delayed enrollment in Part B.  This penalty has no durational limit, so it continues for the lifetime of the Medicaid beneficiary.

Beneficiaries may, however, qualify for a Special Enrollment Period to enroll in Plan D if the drug coverage they had under COBRA is considered creditable coverage.  The individual will have to pay a penalty if there is a continuous period of 63 days or longer after the individual’s initial enrollment period.

If you need legal advice for probate and trust administration, tax advice, estate planning, Medicaid planning, or VA planning, please contact our office for an initial consultation at (941) 906-1231.

September 13, 2012
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Long-Term Care Expenses Can Be Tax Deductible

By Long-Term Care, Tax Law

Long-term care expenses quickly add up, but it is good to know that many long-term care expenses can be deducted from your taxes. Under the tax code, expenses for medical care may be claimed as an itemized deduction if they exceed 10 percent of adjusted gross income. The definition of medical expenses includes the cost of long-term care if a doctor has determined you are chronically ill. “Chronically ill” means you need help with activities like eating, going to the bathroom, bathing, and dressing, or you require substantial supervision due to a severe cognitive impairment.

For more information on your tax return, visit www.irs.gov.  Please contact our office for an initial consultation if you need legal advice at (941) 906-1231.

September 12, 2012
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Who can Draft a Qualified Income Trust?

By Elder Law, Estate Planning, Medicaid Planning

Only an attorney is licensed to draft a Qualified Income Trust.Medicaid planning companies are not licensed to draft Qualified Income Trusts, unless they have a Florida licensed attorney on staff who is directly and actively representing the trust Grantor.

If you need legal advice for estate planning, Medicaid planning, or VA planning, please contact our office for an initial consultation at (941) 906-1231.

September 6, 2012
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When Should You Update Your Estate Plan?

By Estate Planning

An outdated estate plan is an ineffective estate plan, so you need to make sure you keep your plan up-to-date. There are certain key life moments when you need to revisit your plan.

  • When you get married — either a first marriage or a remarriage.
  • When you have children or grandchildren, you can use your estate plan to name a guardian for your children and to create a trust for your minor heirs.
  • If your spouse dies or you get divorced, you should make sure your estate plan reflects this.
  • If your estate increases in value or decreases in value, you may need to evaluate your estate plan to determine if it properly minimizes estate taxes.

Other reasons to have your estate plan updated could include:

  • You move to another state
  • Federal or state estate tax laws have changed
  • A guardian, executor, or trustee is no longer able to serve
  • You wish to change your beneficiaries
  • It has been more than 5 years since the plan has been reviewed by an attorney
  • If you or your spouse become ill, especially if the illness may result in long term care expenses such as Alzheimer’s or Parkinson’s
  • If you wish to consider tax planning
  • If you have a disabled spouse, child or grandchild a special needs trust may save thousands of dollars in care costs

Contact our office to schedule an initial consultation for any Probate or trust administration, tax advice, Estate Planning, Medicaid Planning, or Veterans Benefits needs at (941) 906-1231.

August 31, 2012
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What is a Qualified Income Trust?

By Estate Planning, Medicaid Planning

If your income exceeds the amount to qualify for Medicaid long term care services, ($2,094.00 per month for 2012) a Qualified Income Trust allows you to become eligible by depositing income into an irrevocable income trust each month that you qualify for Medicaid.The QIT involves a written trust agreement and a separate bank account for making deposits.  The income you deposit into the QIT account is used to pay for the Medicaid recipient’s patient responsibility payments and medical expenses.

If you need legal advice for estate planning, Medicaid planning, or VA planning, please contact our office for an initial consultation at (941) 906-1231.

August 31, 2012
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How to Avoid Problems as a Trustee

By Elder Law, Estate Planning

Being a trustee requires significant legal knowledge and if one does not perform their duties properly, a trustee may be personally liable. That’s why it’s important to have legal guidance.

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, ethics and skill sets.

A trustee’s duties include locating and protecting trust assets, investing assets prudently, distributing assets to beneficiaries, keeping track of income and expenditures, and filing taxes.  As a trustee, you have a fiduciary duty to the beneficiaries of the trust, meaning that you have an obligation to act in the best interest of the beneficiaries at all times.

A trustee is usually entitled to hire an attorney (and other professionals like an accountant) to assist in trust administration. The attorney’s fees will be paid from the trust funds. While hiring an attorney will cost money, not having an attorney at all could cost a trustee much more if errors are made.

A trust can be administered without court involvement, but that doesn’t mean that the administration is simple. There are many areas where problems can arise — for example, if assets aren’t invested properly, taxes are late, or if proper records aren’t kept. If something goes wrong during the administration of the trust, the trustee can be removed and held personally liable for any costs incurred or losses suffered. Even if a spouse is the trustee, he or she should still consult with an attorney.

If you need legal advice for trust administration, probate, tax advice, estate planning, Medicaid planning, or VA planning, please contact our office for an initial consultation at (941) 906-1231.

August 24, 2012
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Business or Hobby? Answer Has Implications for Deductions

By Tax Law

The Internal Revenue Service reminds taxpayers to follow appropriate guidelines when determining whether an activity is a business or a hobby, an activity not engaged in for profit.

In order to educate taxpayers regarding their filing obligations, this fact sheet explains the rules for determining if an activity qualifies as a business and what limitations apply if the activity is not a business. Incorrect deduction of hobby expenses account for a portion of the overstated adjustments, deductions, exemptions and credits that add up to $30 billion per year in unpaid taxes, according to IRS estimates.

In general, taxpayers may deduct ordinary and necessary expenses for conducting a trade or business. An ordinary expense is an expense that is common and accepted in the taxpayer’s trade or business. A necessary expense is one that is appropriate for the business. Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.

In order to make this determination, taxpayers should consider the following factors:

  • Does the time and effort put into the activity indicate an intention to make a profit?
  • Does the taxpayer depend on income from the activity?
  • If there are losses, are they due to circumstances beyond the taxpayer’s control or did they occur in the start-up phase of the business?
  • Has the taxpayer changed methods of operation to improve profitability?
  • Does the taxpayer or his/her advisors have the knowledge needed to carry on the activity as a successful business?
  • Has the taxpayer made a profit in similar activities in the past?
  • Does the activity make a profit in some years?
  • Can the taxpayer expect to make a profit in the future from the appreciation of assets used in the activity?

For your tax advice needs, please contact our office for an initial consultation at (941) 906-1231.

August 23, 2012
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