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Financing Long-Term Care in New Jersey 2017

Posted by: Begley Law Group

Statistics show that approximately 70% of the population age 65 or over will require some form of long-term care. Some will be there for relatively short periods of time. These are usually stroke or accident victims or surgery patients who are doing rehabilitation. A significant percentage will remain in a nursing home for an extended period of time. These are usually Alzheimer’s, Parkinson’s or other Dementia patients. A statistic widely quoted is that the average stay in a nursing home is 2.9 years. This statistic is somewhat misleading, because the persons receiving rehabilitation are often discharged in one month or […]

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ESTATE PLANNING FOR DIGITAL ASSETS

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA The Uniform Law Commission has proposed an Act titled “Revised Uniform Fiduciary Access as to Digital Assets Act” (Revised 2015). The Act has been adopted in 20 states.[1] The Act was introduced in 2016 in 12 additional states.[2] Under the Act, a fiduciary is defined as a person appointed to manage the property of another person, subject to strict duties to act in the other person’s best interest. Common types of fiduciaries include executors of a decedent’s estate, trustees, conservators, and agents under a power of attorney. The purpose of the Act is to […]

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NON-TAX REASONS FOR ESTATE PLANNING

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA In calendar year 2000, the exemption from federal estate tax was $675,000. Clients who owned a home, had a retirement plan, and even modest other assets, had to consider this tax. Beginning in 2002, the exemption gradually increased from $1,000,000 to the current level of $5,490,000. Only two-tenths of one percent of decedents dying in 2016 had to file a federal estate tax return. New Jersey decoupled from the Federal Estate Tax at the $675,000 level. Many individuals still had to plan to avoid or minimize this tax. Beginning January 1, 2017, the New […]

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DIVORCE AND PUBLIC BENEFITS

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA Many divorces involve families in which a spouse or child has disabilities. Family law attorneys should always ask if this is the situation. In many instances, the individuals with disabilities are receiving public benefits and many other that may be eligible for benefits but are not aware of their eligibility and have not applied. For many means-tested public benefits, such as Supplemental Security Income (SSI) and Medicaid, there is an asset test of $2,000 in addition to an income test. Assets transferred from a healthy spouse to a spouse with disabilities, through equitable distribution, […]

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Filed under Estate Planning, Medicaid Planning, Special Needs Planning, Special Needs Trusts, Uncategorized.
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QUALIFIED SETTLEMENT FUNDS

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA What Is A Qualified Settlement Fund? Section 468B of the Internal Revenue Code[1] authorizes the establishment of Designated Settlement Funds or Qualified Settlement Funds. These funds are usually collectively referred to as Qualified Settlement Funds (QSFs). These funds are also sometimes called “468B Trusts.” The purpose of these funds is to permit a defendant in certain types of litigation to deposit funds into a trust and to receive a full and complete release of liability. The defendant is entitled to a current income tax deduction for the amount paid into the fund at the […]

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CORPORATE TRUSTEES HATE THIS! ONE SIMPLE TRICK TO SAFEGUARD YOUR TRUST

Posted by: Begley Law Group

by Kevin M. Buttery, Esquire When planning your estate, it is often advisable to utilize a trust to effect one or more of your goals. The trustee of such a trust can, and in certain circumstances should, be a corporate entity, also known as a corporate fiduciary. However, you may not want to relinquish control of your assets to somebody outside of the family. To overcome this uncomfortable proposition, your attorney may suggest that you appoint a “Trust Protector” for your trust. While a Trust Protector may sound like a super hero wielding unending power, the role is really meant […]

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10 REASONS TO SELECT A CORPORATE TRUSTEE

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA Attorneys prepare many types of trusts. The trusts are for multiple purposes. They include special needs trusts, standard support trusts, discretionary support trusts, disclaimer trusts, bloodline trusts, incentive-based trusts, retirement plan trusts, and trusts for Medicaid planning purposes. Occasionally, it is appropriate to have a family member serve as trustee. However, in most cases it is better to retain the services of a professional trustee. Ten reasons to employ professional trustees include the following: Target on Individual Trustee’s Back. If something goes wrong, such as the trust (1) makes improper distributions, (2) pays unnecessary […]

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The Future of the Practice of Law

Posted by: Begley Law Group

By Thomas D. Begley, Jr., CELA A Virginia State Bar Association appointed a study committee on the future of the practice of law. Perhaps New Jersey should do the same. A draft copy of the final report is interesting reading. The committee identified a number of external forces affecting the practice of law: Advances in technology; Increasing competition from non-lawyers; Generational pressures as Baby Boomers begin to transition to Millennials; Client dissatisfaction with the billable hour; Increased in-sourcing of legal services by corporate clients; and Accelerated globalization of legal services. Technology Serious efforts are now underway to develop artificial intelligence […]

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What Blended Families Should Know About Estate Planning

Posted by: Begley Law Group

By Thomas D. Begley, Jr. Esquire, CELA CASE STUDY 1: SIMPLE WILLS INADEQUATE TO PROTECT CHILDREN FROM PREVIOUS MARRIAGES Andy (age 77) and Maureen (age 75) are in a long-term second marriage. Andy has two children from a previous marriage, Alexis (age 50) and Kit (age 48). Maureen also has two children from a previous marriage, Lauren (age 45) and Misty (age 44). Andy and Maureen have simple wills that give their entire estate to the surviving spouse with contingent gifts for the four children. After Andy dies, Maureen moves closer to her children and becomes estranged from Alexis and […]

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Estate Planning for Parents of Children With Disabilities

Posted by: Begley Law Group

Case Study: Special needs child – public benefits retained   The Situation Harry and Sally have a 21-year-old son, Bill, who has autism and lives at home with them. The couple is concerned about protecting Bill’s welfare after they die. They had always expected Bill to go live with his sister, Joan, who is married and has three children. But recently, they learned that Joan’s husband does not want to take on this responsibility. Harry and Sally now need to make alternate arrangements for their son’s future. Harry and Sally own a home, and they have retirement plans, life insurance, […]

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ADVANTAGES AND DISADVANTAGES OF ABLE ACCOUNTS

Posted by: Begley Law Group

by Thomas D. Begley, Jr., Esquire, CELA Congress enacted and the President has signed legislation known as the Achieving a Better Life Experience (ABLE) Act of 2014.387 The Act is modeled on 529 Plans and will provide tax-favored accounts for individuals with disabilities to pay for qualified expenses. Before these accounts can be implemented, two things must happen: (1) the federal government must adopt regulations governing the accounts, and (2) state must either create their own ABLE accounts or contract with other states to do so. It is likely that these accounts will operate in a manner similar to existing […]

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Filed under Blog, Blog Special Needs Planning, Estate Planning, Estate Planning, Long Term Care, Medicaid Applications, Medicaid Planning, Special Needs Planning.
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ABLE ACCOUNT, THIRD PARTY SPECIAL NEEDS TRUST AND POOLED TRUST: COMPARE

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA Below is a chart comparing an ABLE Account with a Third-Party Special Needs Trust.     ABLE ACCOUNT THIRD PARTY SPECIAL NEEDS TRUST OR POOLED TRUST Onset of Disability Qualifying disability exists prior  to age 26   No requirement Age of Beneficiary   No requirement No requirement Who May Establish   Beneficiary, parent, guardian, agent Anyone except beneficiary Number of Accounts   One per beneficiary Unlimited Fees   Financial institution fees Attorney and trustee fees Contribution Limits $14,000 per year (federal gift tax limit); total capped at state limit for 529 college savings accounts; SSI payments suspended when assets total $100K   Unlimited Investment Options Investment strategies may be changed […]

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ABLE ACCOUNTS ARE COMING TO NEW JERSEY

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA New Jersey has passed the Achieving a Better Life Experience ACT (“ABLE”). While the Act has passed, it will take some time to implement. Many commentators believe that by the end of the year accounts will be authorized. Under the ABLE Act, people with disabilities and their families may set up special savings accounts similar to 529 Plans to be used for disability-related expenses. Earnings on these accounts are non-taxable. Generally, if the fund does not exceed $100,000, it will not be counted for Supplemental Security Income (“SSI”) purposes. If the fund exceeds $100,000 […]

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USING SELF-SETTLED SPECIAL NEEDS TRUSTS TO PROTECT PUBLIC BENEFITS

Posted by: Begley Law Group

Many public benefits available to persons with disabilities, such as Supplemental Security Income (SSI) and Medicaid, place limits on income and certain types of assets. Exceeding such limits can lead individuals to lose some or all of their benefits. Individuals receiving SSI are limited to $2,000 of assets. For many individuals, their Medicaid is linked to their SSI. Today there are many Medicaid Waiver Programs. In many states the asset limit for these waiver programs is also $2,000, but this varies from program-to-program and from state-to-state. Assets held in ABLE accounts do not affect SSI until the ABLE account reaches […]

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Filed under Blog Special Needs Planning, Estate Planning, Special Needs Planning, Special Needs Trusts.
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WHAT DOES “SOLE BENEFIT OF” MEAN WITH RESPECT TO A DISABILITY ANNUITY TRUST

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA The key issue concerning trusts “for the sole benefit of” is availability. In a private letter, HCFA, now CMS, has taken the position that a trust established for the sole benefit of a community spouse under HCFA Transmittal 64 is an available resource.[1] HCFA maintained that there is a material difference between a standard annuity and an “annuitized” trust. HCFA states: a standard annuity can protect the funds used to purchase the annuity from being counted as resources in determining eligibility for Medicaid. However, there is a fundamental difference between a standard annuity and […]

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CHILDREN’S TRUSTS

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA A common Medicaid Planning strategy is to transfer assets to third parties, wait for the five-year lookback to expire and apply for Medicaid. If assets are transferred to children, there are certain risks to be considered. If the child is sued by a creditor, the assets transferred by the parent to the child are subject to the claims of the creditors. If the child is subsequently divorced, the son or daughter-in-law may be able to claim additional funds by virtue of the assets that were transferred by the parent to the child. Basic divorce […]

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SPECIAL NEEDS TRUST, POOLED TRUST OR ABLE ACCOUNT: WHAT IS MY BEST CHOICE?

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA New Jersey has now enacted the Achieving a Better Life Experience Act (“ABLE”). It is understood that by Fall this Act will be ready for implementation. The question will then remain: “What is the best option? Should the parent intending to set aside money for a child with disabilities establish an ABLE account or a Third Party Special Needs Trust?” Generally speaking, if the individual would be the beneficiary became disabled prior to attaining age 26, then an ABLE account might be considered, if the account will be small. There is very little point […]

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MILITARY PENSIONS AND DISABLED CHILDREN

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA Historically, a member of the military could arrange for a pension and provide a survivor’s benefit to a spouse or child. A problem arose where the child had a disability and was receiving means-tested public benefits such as Supplemental Security Income (“SSI”) or Medicaid.   If the child with disabilities receiving those benefits or other means-tested public benefits received the pension, they would lose the benefits. This is because any income received from any source reduces the SSI income dollar-for-dollar, and if the pension exceeded the amount of SSI income, SSI would be completely lost. […]

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IRA Trusts

Posted by: Begley Law Group

INTRODUCTION The United States Supreme Court in a 9-0 unanimous ruling held that an inherited IRA is not protected in bankruptcy under federal law.[1] Heidi Heffron-Clark inherited an IRA from her mother in 2001 and filed for bankruptcy nine years later. The court held that the IRA was not shielded from her creditors, because the funds were not earmarked exclusively for retirement. The Supreme Court indicated that creditor protection does not apply to inherited IRAs for a number of reasons: Beneficiaries cannot add money to an inherited IRA like IRA owners can to their accounts; Beneficiaries of inherited IRAs must […]

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FAMILIES WITH A MEMBER WITH DISABILITIES MOVING TO A NEW STATE

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA It is always difficult to move from one state to another, but when a family member has disabilities there are a number of considerations that should be addressed as early as possible. Health Care. Establish a “safety net” well in advance. Research the doctors, therapists and other service providers available in the new location and reach out to local advocacy organizations for referrals. Be sure your medical insurance serves the area to which you are moving. Otherwise, it may be necessary to obtain other medical insurance. Most medical insurance policies have geographic limitations. Special […]

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WHY A LIVING TRUST?

Posted by: Begley Law Group

by Thomas D. Begley, Jr., Esquire, CELA A revocable Living Trust is designed to avoid probate on the death of the individual. If the individual owns real estate in more than one state, the real estate can be transferred to a Living Trust to avoid probate in multiple states. Some states have very difficult and expensive probate procedures, and a Living Trust can be used to avoid the process entirely. In these cases, the Will simply leaves everything to the Trust, and the Trust spells out to whom the assets are to be distributed. The Trust can be funded during […]

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WHY A FINANCIAL POWER OF ATTORNEY?

Posted by: Begley Law Group

by Thomas D. Begley, Jr., Esquire, CELA The Financial Power of Attorney is also known as a General Durable Power of Attorney. The principal designates an individual to serve as an Agent to transact financial decisions on the individual’s behalf. The document should be state specific, because laws in different states vary. It should also be detailed as to exactly what powers are included. Some states have statutory forms of powers of attorney, but these are generally not as effective as individually-customized documents. If a Power of Attorney is not in place, a guardianship may be required in order to […]

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RESOLVING HOSPITAL, CHILD SUPPORT AND DIVISION OF DEVELOPMENTAL DISABILITIES LIENS IN PERSONAL INJURY CASES

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA   Hospital Liens Generally, every hospital, nursing home, licensed physician, or dentist may assert a lien for services rendered by way of treatment, care, or maintenance to any person who has sustained personal injuries in an accident as a result of negligence or alleged negligence of any other person.[1] The lien attaches to the proceeds of any settlement, award, or judgment an injured person may obtain from a third party as a result of the injuries for which services were provided.[2] Hospital liens may be difficult to negotiate; however, such liens are subject to […]

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Understanding Estate Planning

Posted by: Begley Law Group

By Thomas D. Begley, Jr. WHAT IS ESTATE PLANNING? Estate planning is the process by which an individual defines his or her goals for passing assets to beneficiaries and chooses appropriate tools and strategies for achieving those goals. The process begins with a careful analysis of one’s situation, objectives, and potential tax liability. Only after all of those factors have been considered is it possible to select the tools and strategies that will allow assets to pass in the most effective manner. It is important to coordinate estate planning decisions with broader financial plans. Absent adequate financial planning, even the […]

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MEDICARE SET-ASIDE ARRANGEMENTS IN THIRD PARTY LIABILITY CASES

Posted by: Begley Admin

by Thomas D. Begley, Jr., CELA Medicare Secondary Payer Act. While there is still some controversy as to whether a Medicare Set-Aside Arrangement is appropriate in a Third Party Liability (TPL) case, there is significant authority with a proposition that Medicare’s interest must be considered in a TPL case in the same manner that it must be considered in a Worker’s Compensation (WC) case. The question is really not whether the law applies, but rather will it be enforced. How much risk is the Personal Injury attorney willing to assume on behalf of his client and on his own behalf […]

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THE FUTURE OF THE LEGAL PROFESSION

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA ABA Commission The American Bar Association has appointed a Commission on the future legal services. Legal services are expensive and are beyond the reach of many poor and even middle class individuals. Technology is becoming a game-changer and non-legal entities are engaged in providing legal services. The ABA Commission is holding a series of grassroots meetings to gather information and propose new approaches for the delivery of legal services. The Commission will look at data regarding what percentage of a lawyer’s time is actually spent practicing law as opposed to administrative, marketing, fundraising, etc. […]

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YOU HAVE JUST BEEN DIAGNOSED WITH EARLY ALZHEIMER’S: NOW WHAT?

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA Background on Alzheimer’s According to the American Alzheimer’s Association, Alzheimer’s disease is a progressive brain disorder that damages and eventually destroys brain cells, leading to memory loss and changes in thinking and other brain functions. It usually develops slowly and gradually gets worse as brain function declines and brain cells eventually wither and die. Ultimately, Alzheimer’s is fatal and currently, there is no cure. An estimated 5.3 million Americans of all ages have Alzheimer’s disease in 2015. Thirty-six percent are age 85 or older, 43% are between 75 and 84, 16% are between 65 […]

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INCOME TAX CONSIDERATIONS INVOLVING LONG-TERM CARE

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA Medical Deduction – Client The IRS permits an income tax deduction for medical expenses. Medical expenses include qualified long-term care services. A taxpayer can claim an itemized deduction for unreimbursed medical expenses to the extent such expenses exceed 10% of adjusted gross income. For individual age 65 and older, the threshold is 7.5% until December 31, 2016. If an individual is institutionalized, an issue may arise as to whether room and board is deductible for medical expenses. The question frequently arises if an individual has resided in an assisted living facility. The answer is […]

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Estate Planning: 5 Things You Should Consider

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA Grandchildren Many grandparents would like to leave something to their grandchildren. Frequently, the grandparents have not thought of this idea, but are enthusiastic when it is presented to them. One way to remember the grandchildren in a Will is to leave a flat sum of money, i.e., $10,000 per grandchild, another is to leave the grandchildren a separate share. For example, grandparents with three children may want to divide their estate into four shares, one for each of the children and one to be divided equally among the grandchildren. Some grandparents want to establish […]

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PROTECTING THE HOME FROM THE COST OF LONG-TERM CARE

Posted by: Begley Law Group

By: Thomas D. Begley, Jr., CELA INTRODUCTION The most important asset for most Americans is their home. They have worked hard, paid off a mortgage, and enjoyed many happy times in their home. They do not want to lose it. Seventy percent of Americans will require some form of long-term care be it nursing home, assisted living or home care. The cost of this care can range from $20 per hour or more for home care to $10,000 – $12,000 per month for nursing home care. Before becoming eligible for Medicaid in a nursing home or assisted living facility, an […]

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