June, 2015, Friedman Law

Archive for June, 2015

How to Qualify for Disability Benefits, Part 2

Posted on: June 23rd, 2015 by Mark R. Friedman

I wrote earlier on this blog about one key component of qualifying for disability benefits – proving that you meet the Social Security Administration’s definition of “disabled.”

In addition, you also must meet the eligibility requirements of each program.

There are two main financial benefits: Social Security Disability insurance (SSD / SSDI), and Supplemental Security Income (SSI). Both are monthly cash payments, similar to the Social Security retirement benefits most people get starting in their 60’s. If you qualify for SSI in New Jersey, you also get Medicaid. If you qualify for SSD, then after two years you get Medicare.

SSD usually pays more than SSI, so it’s better to qualify for SSD if you can. SSD is available to people who have worked regularly in jobs that pay FICA (Social Security / Medicare) taxes. Most jobs pay FICA tax, but some public sector jobs do not.

Your eligibility for SSD is based on how many “work credits” you have. You earn one work credit for every quarter of the year (i.e., three months) that you work in which you earn at least $1,220 (as of 2015). You must have worked five years out of the past ten, and have earned a certain number of work credits based on your age. For example, a 46-year-old person must have at least 24 credits, or 6 years of work. Some people can also qualify for SSD based on the work history of a deceased parent, spouse or child.

If you cannot qualify for SSD, you may be eligible for SSI. SSI eligibility is means-tested and is based on your finances. It is generally available only to people with very limited means. To qualify for SSI, you must have less than $2,000 in Resources (assets that are available for your support). You must also have limited income – approximately $750 or less, although this figure can vary. In general the more income you receive, the lower your SSI benefit. Likewise, living in a house that someone else pays for (such as your parents) reduces your SSI benefit.

It’s very important to watch out for the $2,000 SSI Resource limit. If you’re on SSI and at any time you have more than $2,000 in assets (with certain exceptions), you lose your SSI until the excess assets are spent down. It can be quite difficult to get by with assets limited to $2,000, especially when the maximum SSI benefit is $764 per month. Fortunately, there is a way to put money aside for a person on SSI.

If someone on SSI would be getting money, such as from a lawsuit, inheritance from family, gift, divorce or another source, that money should be held in a special needs trust. A special needs trust is a legal instrument that allows money to be set aside to benefit a person with disabilities, without disqualifying them from SSI, Medicaid and other important benefits.

For more information on qualifying for and keeping government benefits, call or email FriedmanLaw today.

Nursing Home Debts are subject to Fair Debt Collection Practices Act, according to 2d Cir.

Posted on: June 17th, 2015 by Mark R. Friedman

A nursing home debt is subject to the Fair Debt Collection Practices Act (FDCPA), according to the Second Circuit federal appeals court in New York.

In Eades v. Kennedy, PC, a Pennsylvania nursing home resident died with an unpaid bill owed to the nursing home. The nursing home hired a debt collection law firm, which contacted the resident’s daughter in New York and put pressure on her to pay her mother’s debt, claiming that her wages could be garnished and a lien could be put on her father’s home.

As a sidenote, the nursing home’s claim rested on Pennsylvania’s “filial responsibility” laws, and on the fact that the resident’s husband signed an admission agreement as responsible party. We’ve written about attempts to hold children liable previously, and it bears repeating that you should approach admission agreements with great caution. It’s worth having your own attorney review the admission agreement before you sign.

The Second Circuit held that law firm’s attempt to collect the nursing home debt was subject to the federal FDCPA law. This is significant because the FDCPA provides important protections to consumers. The FDCPA forbids debts collectors from making misrepresentations, making unrealistic threats of legal action, making harassing phonecalls, calling outside reasonable hours, using profanity, etc. It creates a procedure that debt collectors are required to follow.

While the Second Circuit decision isn’t controlling in New Jersey (since New Jersey is within the Third Circuit), this decision is a strong indication that the FDCPA does apply to efforts to collect nursing home debts. That is good news for anyone with a close relative in a long term care facility. These days, it seems that attempts to collect unpaid facility fees against family members are becoming more common. The FDCPA grants consumers valuable protections in collection attempts.

Key Considerations in Settling an Estate

Posted on: June 15th, 2015 by Lawrence A. Friedman

Administering an estate can be a daunting task. Where the decedent leaves a will, the person(s) named as executor(s) must probate the will and fulfill the duties of the estate personal representative. Where there is no will, the Surrogate’s Court appoints an administrator to fulfill these obligations. Either way, the executor/administrator must settle the decedent’s debts and obligations, safeguard income and assets, file required tax returns, address guardianships/trusts for minors and beneficiaries with special needs, and distribute the estate according to law. It can be a lot of work– even more so if trusts are involved.

Although New Jersey has some of the country’s most user friendly will and estate laws, the process is anything but intuitive. For instance, an executor/administrator can have personal liability if he distributes before the creditor claim limitation period runs and even, thereafter, if distributions aren’t wholly correct.

New Jersey law requires an executor/administrator to obtain and file a refunding bond before distributing. The executor/administrator also must obtain a qualifying child support judgment search and resolve any child support judgments that turn up. An executor/administrator who ignores these obligations risks substantial personal liability. In addition, to foreclose claims down the road, the executor/administrator should obtain releases from beneficiaries or settle an account in court.

Depending on estate beneficiaries, assets, income, deductions, and tax deposits, the executor/administrator of an estate may be liable to pay tax and file estate tax returns and/or inheritance tax returns as well as final income tax returns for year in which decedent died and fiduciary income tax return thereafter. As estate attorneys, we normally prepare our clients’ estate tax returns and inheritance tax returns and determine tax. Where appropriate, we can suggest strategies [such as disclaimers] that can reduce tax.

Federal tax laws require IRAs and many other retirement plans [401(k), pension, profit sharing, SEP. government plans, and other benefit arrangements] to distribute required minimum distributions (RMD) once an individual reaches age 70.5 and thereafter. Thus, unless a decedent has taken the full RMD, an estate may have to take RMDs for the year in which a decedent dies. Beneficiaries may face RMDs thereafter. When RMDs aren’t made, expensive tax penalties can arise.

While I could go on and on about tasks that must be performed to administer an estate properly, the point of this article is to show that what may first appear to be a simple task carries with it many less obvious obligations. At FriedmanLaw, we apply our years of experience in trust and estate law to guide executors/administrators through the steps needed to settle an estate. We also take obligations (such tax compliance) off our clients’ hands.

In short, if you may become an executor/administrator, we would look forward to working with you to settle the estate correctly and limit your workload.

How to Qualify for Disability Benefits

Posted on: June 8th, 2015 by Mark R. Friedman

A lot of folks wonder whether they might qualify for disability benefits.

To qualify for the most important federal benefits – Social Security Disability, Medicare, Medicaid and SSI – you must be over age 65, blind, or disabled. The first two categories are pretty obvious (you’re either over age 65 or you’re not!), but the last category is much more fluid. How can you tell whether someone is disabled?

More importantly, how can the Social Security Administration tell whether you’re disabled?

To qualify for the main federal disability benefits, you have to meet the Social Security Administration (SSA) definition of “disabled,” which is: You are unable to engage in substantial gainful activity because of a medical condition expected to last longer than a year or result in death.

What does that mean in plain language? Basically, it means you’re unable to work and support yourself because of a medical condition that’s usually long term or fatal.

The question isn’t whether you’re actually working now. It’s whether you can work; whether you’re capable of working in light of the limitations imposed by your medical condition.

SSA has a listing of medical conditions that it considers disabling, and the list is very broad – everything from anemia to zoster, from cancer to depression to autism. However, just having a medical condition is not enough. You must prove that you have symptoms that are debilitating enough that they prevent you from working.

In evaluating whether you can work, SSA looks first to your medical records. When you apply for disability benefits, SSA may ask you to submit medical records. If SSA requires additional information, they may ask that you be examined by their doctors. A lot of people think they can establish disability by submitting evidence from family members, teachers, former supervisors, etc. But really, first and foremost it’s about what your treating physicians say.

At FriedmanLaw, we have familiarity with the laws and regulations around disability benefits. We may be able to help you understand what SSA is looking for and tailor your application to that standard. If you’re interested in learning more about qualifying for disability benefits, we’d be happy to speak with you. Call or email us.