Archive for December, 2015

Happy new year!

Posted on: December 31st, 2015 by Mark R. Friedman

Happy New Year!  Welcome to 2016.  It’s the season for new year resolutions, and in addition to losing weight and quitting smoking, we have a suggestion: getting your legal affairs in order.

That could mean creating an estate plan for the first time.  Having a quality will, power of attorney and healthcare directive is important, and makes things much easier for your family if something happens to you in the coming year.  It might also mean updating an old estate plan.  We suggest that clients update their estate plan once every ten years or so.  It may also be wise to update documents when circumstances change – for example a marriage, birth or death in the family, or if a loved one becomes disabled or contracts a serious illness.

It could also mean considering long term care planning.  A lot of people try to delay unpleasant matters until after the holidays.  Perhaps while your family was gathered, it became clear that an elderly parent might soon be unable to care for herself independently.  If that’s the case, now would be a good time to consider options for long term care, such as home care aides, an assisted living facility or a nursing home.

If long term care may be on the horizon, then it’s also a good time to think about how to pay for it.  With nursing home costs in New Jersey around $10,000 per month, long term care is exceedingly expensive.  But with Medicaid and long term care planning, we can often help people pay for long term care without impoverishing family members.

Perhaps you have a child with disabilities who is growing up.  At age 18, every child becomes an adult and has the legal authority to make decisions for himself, regardless of whether he’s disabled or lives with his parents.  Banks, hospitals, schools, government agencies and other institutions have to listen to your child’s instructions instead of yours.  If you want to continue caring for your child after age 18, it’s important to apply for guardianship.

Now is the perfect time to get your legal affairs in order, and FriedmanLaw is here to help.  If you’re interested in knowing more about any of the above or other legal matters, call or email us.

Special Needs Trusts and Child Support

Posted on: December 11th, 2015 by Mark R. Friedman

Can a special needs trust hold child support? Yes, but only if it’s the correct kind of trust.

There are two categories of special needs trusts (SNT) – a first-party trust and a third-party trust.

A first-party trust holds money that belongs to the beneficiary. For example if Susan is disabled and wins a lawsuit, and the defendant has to pay him $100,000, that money belongs to Susan. If Susan wants the money to go into a SNT so thats he won’t lose disability benefits, it will have to be a first-party SNT, because it’s Susan’s money going in.

A third-party SNT holds money that belongs to someone other than the beneficiary. For example, if Susan’s parents want to leave her an inheritance of $100,000 in their will, they can leave that money into a third-party SNT for Susan, because the money belongs to a third-party, Susan’s parents.

It’s better for the beneficiary to have a third-party SNT than a first-party SNT. That is because a first-party SNT has to comply with special requirements under federal and state law. A first-party SNT must be irrevocable, must provide for any trust remainder to repay Medicaid when the beneficiary dies, and, in New Jersey, must report expenditures over $5,000 to the State, among other requirements.

Under Social Security Administration regulations, child support payments are considered income to the child. Therefore, for families that wish to use an SNT for child support, the payments must be made into a first-party SNT. A third-party SNT, such as the kind designed as part of an estate plan, will usually not be sufficient to hold child support payments.

There may be other options as well for parents to avoid disqualifying a child with disabilities from benefits. For example, parents could agree that payments will be made in lieu of child support, which would not count as income to the child. However, the parents probably would be under no obligation to use such payments to support the child, so in many cases this option would not be attractive.

FriedmanLaw is available to help with special needs trusts and disability benefit issues, and we encourage you to call or email us today.

NJ Medicaid may soon Pay for Advance Care Planning

Posted on: December 4th, 2015 by Mark R. Friedman

Following the federal government’s lead, New Jersey may soon allow Medicaid to cover advance care planning.

Medicare recently announced that it would pay for beneficiaries to have conversations with their doctors regarding their wishes for end of life care (called advance care planning in medical / legal parlance).   Following suit, the New New Jersey Senate passed a bill that provides for Medicaid to cover advance care planning (see the underlined language on page 4 of the linked PDF).  The bill still must be passed by the assembly and signed by the governor, but I’m optimistic that will happen.

To clarify, Medicare and Medicaid are both government programs that cover healthcare, but have different requirements for to qualify.  Medicare is a federal program that requires beneficiaries to have worked a certain number of years and paid into Social Security; Medicaid is a state-federal program that requires beneficiaries to have modest assets and income.

Allowing New Jerseyans on Medicaid to access advance care planning is a big step in the right direction, one which I applaud.  I’ve written about this before, and it bears repeating.

We all have to die eventually, and most Americans say they want to do so at home, in their bed, surrounded by family and friends.  Yet in reality, many Americans die in a hospital bed surrounded by doctors and nurses, often being poked and prodded or hooked up to machines.

One of the most intimate decisions in life is how it should end, yet far too many people never get the chance to make it.  The law offers all of us the opportunity to express our wishes regarding end-of-life care, with an advance directive for health care, as well as physician orders for life sustaining treatment (POLST).  Everyone should have a healthcare directive, and providing New Jerseyans on Medicaid with access to advance care planning will help make that so.

If you want to create a healthcare directive for yourself, or a will or power of attorney, or other elements of an estate plan, contact FriedmanLaw to discuss your goals and options.

As this website provides general information and isn’t tailored to your particular situation, it doesn’t constitute legal advice and may not take into account rules and exceptions that affect you. Although updated from time to time, this website may not take account of recent legal developments or differences in laws from state to state. For safety sake, obtain individual legal advice before you act! You assume all risk of acting on information contained in this website. This website doesn’t constitute legal advice, and no attorney-client relationship exists unless FriedmanLaw and you execute a written engagement agreement. Please contact us at 908-704-1900 to discuss engaging FriedmanLaw to help resolve your legal concerns.
Homepage photo: Cows grazing at Meadowbrook Farm, Bernardsville, NJ by Siddharth Mallya. October 23, 2012.
Interior photo: Somerset hills pastoral scene by Lawrence Friedman.