Bringing Calm to Chaos
By Ruth Ratzlaff, Esq.
Ruben M. Garcia, Esq., and Valerie B. Geiger, Esq., presented some tools that are useful when an incapacitated person is reluctant to accept the assistance he or she needs.
When the case is first opened, it is important to file a change of address with the U.S. Postal Service so the care manager, guardian, or concerned child can get a good picture of the situation. It may also be necessary to freeze credit with the credit reporting agencies and add the individual to the National Do Not Call Registry.
If there is real estate, is there insurance? Do the locks need to be changed? If the property is going to be sold, are there funds to make the property more appealing to buyers?
Does the individual hold assets in joint tenancy with a child or other third party? Does the individual own guns?
The most common situation that requires additional assistance is a discharge home after hospitalization or rehabilitation. This is a new reality. There were multiple suggestions to make this work.
One suggestion was to have the helper be a grandchild or other person known to the incapacitated individual who needs to put in hours providing assistance to get some sort of certification or license. Another creative suggestion was to have the helper be an employer who was working with the incapacitated person to make crafts or other creative items to be sold to make an income for the incapacitated person or to donate to a charity raffle or craft fair.
If the incapacitated individual likes dogs, a dog trainer may be enlisted to walk a dog (with the incapacitated individual involved in some way).
The theme was that gradual introduction of non-threatening assistance can increase eventual acceptance of more levels of care.
There was a suggestion that taking the incapacitated individual to visit an assisted living facility might make accepting in-home assistance more palatable. The caveat is that sometimes gentlemen who are shown this possibility opt for placement at the ALF due to the high number of female residents.
Planning for Disability/Incapacity with Effective Drafting
By Ruth Ratzlaff, Esq.
Stephen W. Dale, Esq., gave a Saturday morning presentation on special needs trusts. He related that typical parents with a special needs child frequently don’t come in for estate planning until the child is almost an adult and eligible for SSI.
Steve cautioned that the trust might be in effect and under administration for 70 years. His recommendation is that the drafting be as broad as possible. There is no way of knowing what benefits will be available in the future or what the eligibility criteria will be. There is also no way of knowing what agencies or departments will be in existence or who the best ultimate trustee will be.
There is also a need to plan for the possible disability or incapacity of the parent/grantor.
Steve also recommends that the parents prepare a “Journal of Intent” rather than a statement or letter of intent. The stress of preparing a statement or letter that will advise care managers years in the future might intimidate the parent from actually getting it written. If they write down in their journal that on a certain date, certain changes were made in medication or behavioral management, obtaining a certain result (success or failure), the document will give the eventual care manager better direction.
Drafting to Avoid Challenges Down the "Medicaid and SSI Roads"
By Eric Einhart, Esq.
Samantha L. Shepherd, CELA, and Mark D. Munson, CELA, led a highly-attended breakout session on the topic of drafting to avoid challenges with Medicaid and Supplemental Security Income (SSI).
Armed with a stated goal of providing participants with a better understanding on how to effectively draft documents to avoid Medicaid and SSI challenges, the presenters focused on providing the attendees with drafting tips for supplemental needs trusts, promissory notes, and personal care contracts. Shepherd and Munson engaged the standing-room-only crowd of attendees by asking them what they would like to learn from the session, and listing the items on a giant Post-It note as a part of the presentation.
Shepherd, who disclosed at the beginning of the presentation that she married Munson after meeting him at a NAELA conference, brought warmth and levity to the collaborative-style presentation with back and forth questions and answers with each other and the attendees.
The presenters explained the difference between first-party and third-party supplemental needs trusts and gave examples of provisions that may be appropriate to include in those trusts depending on the circumstances, such as early termination provisions, travel provisions, and discretionary distributions.
The presenters also provided some do’s and don’ts for drafting promissory notes and personal care contracts. The presentation often highlighted the need for the elder law and special needs planning attorney to see the bigger picture for the benefit of the client when drafting, rather than merely focusing solely on the need to preserve government benefits.
The interactive presentation also included a handout with samples of provisions of a SNT, promissory note, and personal care contract that contained intentional errors for the attendees to discover. Shepherd and Munson went through the sample provisions included in the handout and explained the errors contained therein and cautioned the crowd from making the same mistakes.
In addition to the handouts and do’s and don’ts, the presenters fostered a dialogue about the differences in local practices and recommended that the attendees establish a good rapport with the local Social Security Administration Office and the SSA Regional Office State and Local Coverage Specialists.
The In Marriage QDRO:® How to Save a Pension
By Ruth Ratzlaff, Esq.
Marcus T. Foote, Esq., of In Marriage QDRO,® LLC, sponsored a presentation on his company’s services. Dividing an IRA between spouses requires a divorce. Dividing a pension plan governed by ERISA rules does not require a divorce. It does require a Qualified Domestic Relations Order (QDRO) and his company can prepare them.
As a refresher, ERISA plans include 401(k), 401(a), and 403(b) plans, corporate pension plans, some employee stock ownership plans, profit sharing plans, and state deferred compensation (457) plans.
There are multiple reasons a couple might be interested. The nonemployee spouse can place the funds in an IRA, which continues the tax-deferred nature of the funds, but a financial advisor can manage the funds in a more diverse way than may be available in traditional ERISA plans.
In an elder law context, the result can protect the community spouse if the institutionalized spouse has a sizable ERISA pension plan.
It can also be used to avoid or delay taking Required Minimum Distributions (which are taxable income) if the spouse without the pension plan is significantly younger.
The target audience of clients who would do this planning is people prior to retirement age so they haven’t yet rolled over their ERISA plan to an IRA. The speaker suggested that financial planners might be able to identify potential clients who would benefit from this service once we have educated them to know this option is available.
The attorney prepares a spousal property agreement to divide the ERISA funds, and presents an order incorporating the agreement to the appropriate court to have it become the required domestic relations order. The order is submitted to the plan, which determines that the order is “qualified” because it contains the language required by that particular plan. The transfer to the non-employee spouse can then be made.