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O’Connell & Aronowitz Attorneys at Law
Trusts, Estates, and Elder Law Update Third Quarter 2012
Pictured above are the attorneys of our Trusts, Estates, and Elder Law Department, left to right: Matthew J. Dorsey, Esq. William A. Favreau, Esq. Heidi Dennis, Esq. Fred B. Wander, Esq. Gilbert L. Carey, Esq., CPA Jami Durante Rogowski, Esq. Not pictured: Brittnay M. McMahon, Esq.
In This Issue: • Is A Guardianship Proceeding Right For You? • What To Do If A Loved One Needs to Go Into a Nursing Home Right Away • Five Fast Facts on Guardianship Proceedings • Meet William Favreau, Esq. • Our New Associate, Michael Kogut, Esq. • Ask the Lawyer: Do I Need A Living Will? • O&A Events • General Information about O’Connell & Aronowitz
No Power of Attorney or Health Care Proxy in Place? A Guardianship Proceeding May be the Answer
If you have a loved one who has not signed a Power of Attorney or Health Care Proxy and can no longer do so because they lack the necessary mental capacity, then you may have to bring a petition to be appointed as their guardian. Under Article 81 of the New York State Mental Hygiene Law, a guardianship petition may be brought if a person can no longer manage their personal or property affairs and they don’t understand their limitations. The person’s limitations must also present a danger to their welfare. In a typical case, an incapacitated parent may not understand they can no longer cook safely because they can’t remember to shut off their gas stove, or they might be at a risk of home foreclosure because they can no longer keep track of their mortgage payments.
The attorney for the AIP will similarly investigate the case, but it is their job to advocate solely on behalf of the AIP. Guardianship proceedings can become contested in the event the AIP doesn’t think they need a guardian or if some third party objects to the appointment of the guardianship petitioner. Whether the proceeding is contested or not, the court must hold a hearing to determine if a guardianship is necessary and who may be the best choice for the position.
In the simplest guardianship proceedings, a loving son or daughter seeks to be appointed as guardian for their mom or dad, the parent consents, and the court makes the appointment. On the other side of the spectrum, guardianship proceedings may involve accusations of mismanagement by prior In these cases, a guardianship petition powers of attorney and contests between may be brought seeking the appointment family members as to who is best suited of a guardian of the person and/or to act as a guardian. property of the allegedly incapacitated At O’Connell and Aronowitz, we have person (AIP). experience handling the full range of Once the petition is before the court, a judge will appoint a Court Evaluator and potentially an attorney to represent the AIP. The Court Evaluator is usually an attorney who acts as a neutral party investigating the facts and reporting back to the court. The Court Evaluator will report whether they think the AIP needs a guardian, and if so, who may be best equipped to take on that responsibility. Saratoga Office: 1 Court Street Saratoga Springs, NY 12866 518.584.5205 Fax: 518.584.5441
guardianship cases and can assist you in evaluating your family’s special circumstances. Please contact us at the office nearest to you for a free consultation on whether a guardianship proceeding is the right choice for you. See Page 2 of this Newsletter for Five Fast Facts on Guardianships. Follow us on:
Albany Office: 54 State Street Albany, NY 12207 518.462.5601 Fax: 518.462.2670
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Plattsburgh Office: 206 West Bay Plaza Plattsburgh, NY 12901 518.562.0600 Fax: 518.562.0657
New Developments in Trusts, Estates, and Elder Law What To Do If A Loved One Needs to Go Into a Nursing Home Right Away The note and gift strategy can help preserve key assets
The best way to preserve assets in Medicaid Planning is to plan ahead. Under current law, any assets transferred to an irrevocable trust or another party more than five years before a Medicaid application is filed are not counted as resources in the context of Medicaid eligibility. As a result, if you transfer your home to a Medicaid Irrevocable Trust in 2012 and need nursing home care six years later in 2018, you can apply for Medicaid to pay for your nursing home costs and your home (transferred to your Trust more than five years before) is not counted by the Department of Social Services (DSS) in evaluating whether you qualify financially for Medicaid. Too often though, advance planning is not done before a loved one is in need of nursing home care. The question then becomes: what do we do now?
At such a time, the note and gift strategy could be employed with the assistance of an experienced elder law attorney. The note and gift strategy is a two step process. First, a gift of approximately half the person’s assets is given to a beneficiary. Second, a loan of the other half of the person’s assets is made to the beneficiary. The first step results in a penalty period being imposed by DSS. This penalty period is a length of time during which the Medicaid Applicant (MA) cannot receive Medicaid to pay for nursing home care. The larger the amount of the gift, the longer the penalty period becomes. Since the MA cannot receive Medicaid during the penalty period, they must have another source of income to pay privately for their care. That second step of loaning funds to the beneficiary sets up an income
stream back to the MA, giving them the funds to private pay for their nursing home care during the DSS imposed penalty period. After the penalty period is over, the MA can then receive Medicaid. As a result, approximately one half of the MA’s assets are preserved (via the gift), rather than having potentially all their assets spent down to pay for nursing home care. In order to take advantage of this strategy, the MA must be competent or must have signed a Statutory Gift Rider (SGR) as part of their Power of Attorney. The SGR allows the agent to make the gift on behalf of the MA. If asset preservation is one of your goals, Medicaid planning strategies should be discussed with an experienced Elder Law attorney. Please contact O’Connell and Aronowitz at the office nearest you to schedule an appointment.
Five Fast Facts on Guardianship Proceedings Key things to know about guardianships
Who Can Bring a Guardianship Petition? A guardianship petition may be brought by: a) an heir; b) an executor of an estate of which the allegedly incapacitated person (AIP) is a beneficiary; c) a trustee of a trust of which the AIP is a beneficiary; d) a person who resides with the AIP; e) a party “otherwise concerned” with the welfare of the AIP, such as the Department of Social Services; f) the administrator of a facility where the AIP resides; or g) the AIP themselves. Is a Guardianship Proceeding Necessary if there is a Power of Attorney and Health Care Proxy? If power of attorney (POA) and health care proxy (HCP) are in place and functioning in the best interests of the principal, a guardianship proceeding is probably not necessary. If the POA or HCP is being misused or the AIP is otherwise at risk of harm, the additional authority of a guardianship may be needed. Who Pays for a Guardianship Proceeding?
will usually direct that the cost of the proceeding be paid from the AIP’s funds. What Happens After a Guardian Is Appointed? After the guardian is appointed by the court, they will receive a commission from the County Clerk, which acts as their proof of authority. Within 90 days of their commission, the guardian must file an initial report with the Examiner of Guardianship Reports. Every year thereafter, by May 31st, the guardian must file an annual report of their activities during the prior year. What Happens if the Guardian Dies or Resigns? If a standby guardian was appointed by the court in its original guardianship order, then the standby guardian serves in an interim basis until the court confirms their appointment as the new guardian. If no standby guardian was originally appointed, the court may appoint an interim guardian until someone new petitions to be appointed as the guardian
If a petitioner is successful and the AIP has funds, the court
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Meet William Favreau, Esq. Bill Favreau is a partner in the Plattsburgh office of O’Connell and Aronowitz. Bill graduated as Valedictorian from Franklin Pierce College and received his law degree from Albany law School, where he graduated in the top 25% of his class. Bill directs the operation of the Trusts, Estates, and Elder Law Department in our Plattsburgh office. In addition to the estate administration, estate planning, and Medicaid planning, Bill practices in the areas of commercial transactions and litigation, real estate, corporate matters, commercial leasing and bankruptcy. He represents borrowers in diverse commercial purchase, sale and financing transactions and is experienced in complex financing arrangements and IDA financing. Bill represents a number of municipalities and has handled all aspects of municipal law, and he also counsels numerous creditors in bankruptcy matters under Chapters 7, 11 and 13 of the Bankruptcy Code. He is presently approved as closing attorney for HSBC Bank (USA), Key Bank National Association, Bridgeview Bank Mortgage, Wells Fargo Bank, Berkshire Bank, Homecomings Financial and Accredited Home Lenders. Bill serves as County Attorney for Clinton County and Attorney for the Towns of Chazy, Champlain, and Peru, NY. He is an active attorney for the Clinton County Board of Realtors, as well as the Vice President of West Bay Condo Association and a member of the Meadowbrook Nursing Home Board of Ethics. Bill has a longstanding involvement within the community. He was Chairman of the Clinton County Republican Committee, an executive committee member with the Adirondack Boy Scout Council, an officer and director of the North Country Girl Scout Council, a lector with St. Mary’s of the Lake Church and a member of the Knights of Columbus. He has been a member of the North Country Chamber of Commerce since 1983. Bill has also served on the Beekmantown Central School Board. Bill resides in Plattsburgh with his wife Connie and two children, Mallory and Nicolas. In his spare time he enjoys spending time with his family and friends boating, golfing and skiing.
O&A Events September 9, 2012: Join us! Team O&A is getting ready to lace up our sneakers for the Pancreatic Cancer Research Walk to benefit the Lustgarten Foundation. The event will be held Sunday, September 9th at Elm Avenue Town Park in Delmar. Registration begins at 8:30 am, walk begins at 10:30 am. Thank you to Brittnay M. McMahon for organizing our firm team for this important event. October 6, 2012: Komen Race for the Cure at The Empire State Plaza in Albany. O’Connell & Aronowitz is proud to sponsor this event. Come see us at the event expo, we have some great giveaways! Kudos to our own Nancy Sciocchetti, Board of Directors Chair, Komen Northeastern New York, the local affiliate of Susan G. Komen for the Cure. November 6 & 7, 2012: Nancy Sciocchetti is presenting at the 33rd Annual Conference for the Association of Community Living Agencies in Mental Health (ACLAIMH) on Tuesday November 6 and Wednesday November 7 at the Sagamore, on the topic: “Board Functions and Best Practices – Right from the Start”. Party In Pink Success! “Party in Pink”, a fundraiser benefitting Komen Northeastern New York, co-chaired by Nancy Sciocchetti, was held on August 16th. Not only was it a successful event, but a fun-filled night with a lot of laughter! O&A’s Michael Kogut (l)and Matt Dorsey (r), pictured with Matt Jones (c) were three of the gracious volunteers taking part in the “Bachelor Auction”. Thank you to all who supported this event. For the latest information regarding our upcoming events, please visit our website, www.oalaw.com, or our Facebook page,www.facebook.com/ oalaw
Congratulations...
O’Connell and Aronowitz would like to announce the addition of associate Michael Kogut to our firm. Mr. Kogut is a graduate of Albany Law School. He was previously an associate at a prominent New York City law firm. His experience also includes clerkships with the Justices of the Superior Court of Massachusetts, the Honorable Kimberly O’Connor of the New York State Supreme Court, and the Schenectady County Public Defender’s Office. He is admitted to practice law in the State of New York and the Commonwealth of Massachusetts. Mr. Kogut will be practicing in our Health Law Department.
O’Connell & Aronowitz has been providing a broad range of legal services since 1925, with offices now in Albany, Saratoga Springs, and Plattsburgh. This newsletter is intended to provide general information about our firm and its services in the area of trusts, estates, and elder law. This newsletter is not legal advice and does not create an attorney client relationship with the reader or any other person. Legal advice may be rendered by the attorneys of O’Connell & Aronowitz after consultation and the retaining of our firm. Prior results do not guarantee a similar outcome.
Trusts, Estates, and Elder Law Update
Inside This Issue: • Is a guardian proceeding right for you? • What to do if a loved one needs to go into a nursing home right away.
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Albany Office: 54 State Street Albany, NY 12207 518.462.5601 Fax: 518.462.2670
Ask the Lawyer: Do I Need A Living Will? A living will is a legal document in which a person directs the types and duration of treatment, such as artificial nutrition, they would want to receive if ill and unable to communicate their wishes at the time of treatment. Do I need a living will? If you do not have a living will, the decisions made regarding types and length of treatment given to you may become a dispute between family members and doctors, and could result in the need for judicial proceedings to determine your wishes. There is no way to be sure these decisions will be consistent with your wishes. Having a living will ensures that you have control over the decisions made regarding your medical care. Do I need a living will if I already have a health care proxy? A living will is different from a health care proxy. It does not appoint an agent to make your decisions. It serves as a way to express in greater detail the types of decisions you would want the Agent designated in your health care proxy to make. The health care proxy is a document specific to New York State and therefore may not be honored in another state. However, most states have living will statutes, and so a living will may be honored in another state. In addition, a living will can serve as “clear and
convincing evidence” of your wishes, making it unnecessary for a hospital to involve a judge in order to determine your wishes. How does a living will become valid? There are no formal requirements for executing a living will. It is suggested that to be sure the living will constitutes “clear and convincing evidence” of your wishes, you should put your desires in writing, and sign and date the document in the presence of two witnesses and a notary. Should I keep my living will in a safe? An original living will need not be kept in a safe. But, it should be kept in a safe and accessible location. Duplicate originals or copies of your living will should be given to your health care proxy agent, the successor agent, and your physician. Can I change my living will? Yes. A living will can be revoked, altered, or amended at any time. What if I need a living will prepared? Your nearest O’Connell and Aronowitz office would be happy to offer you a thirty minute consultation at no charge to discuss your living will.