Help Your Parents Avoid These New Financial Scams – Part 2

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In part one of this series, we explored two popular scams that are targeting older adults this year: the grandparent scam, and cryptocurrency pickpocketing. In this week’s blog, I’m sharing two more scams that you and your parents need to be aware of, plus tips for staying protected.

Let’s dive in.

03 | PERSONALIZED PHISHING EMAILS

Imagine opening your inbox to an urgent email from a seemingly legitimate source – perhaps your bank, a popular online retailer, or even a social media platform. The message claims there has been suspicious activity on your account and urges you to click a link or provide sensitive information to verify your identity. This is the classic phishing email – a crafty attempt to deceive you into revealing your personal data.

Phishing has been around since email became mainstream, but what has changed is the depth to which scammers feign legitimacy. Even if you or your parents are familiar with phishing email schemes, new approaches and advances in technology are making it harder than ever to detect a phishing email.

Same Scammers, New Tricks

Phishers often pose as trusted entities such as banks, governments, or department stores. But in recent years, phishers have been sending their victims more personalized emails to trick them into thinking the message is from someone the victim personally knows or is personally connected with. The email will address the victim by name and may appear to come from a friend, co-worker, or supervisor. It may even contain a legitimate-looking email domain, signature, or logo.

The email will usually claim that there is a time-sensitive matter that needs to be addressed, such as a gift that needs to be purchased for a co-worker’s birthday or important client, and asks the victim to purchase the gift via online gift cards, PayPal, or crypto.

For example, you may see an email that reads:

“Hi Jim, this is Mr. Boss. I’m going to be in meetings all day today but I need to send a gift to our new client right away. Please purchase a $200 gift card on Amazon and send it to this email address. I will then forward it to our client.”

Some phishers will pose as banks, lending agencies, or debt relief programs and claim that you have been approved for special credit or financial assistance. In the aftermath of the COVID-19 pandemic, student loan pause, and hurricane season, you may have seen an email like this:

“Hi Aaron, it’s Gav with Hardship Relief Program. We tried reaching you at your home and did not hear back… I’m not sure if you’ve spoken to an assigned agent yet, but I do see that you’re pre-approved for our Hardship Program. So, what I’m going to do is keep this in a pending status. Please give me a call between the hours of 8 AM and 10 AM EST to go over the details. My number is 555-886-3424.”

Identifying Scams: It’s All in The Details

Before you respond to any kind of email requesting a phone call, consider whether the sender’s request seems legitimate. Did you actually open an account or fill out an application? Is it normal for your boss to email you about important requests?

Always scrutinize the sender’s email address, even if it looks legitimate, by hovering your cursor over the email address to reveal its true origin. Avoid clicking on suspicious links, and never share personal information via email, no matter how professional the sender’s email appears.

Check the email and “from address” for typos, and verify the information provided by the sender, such as the company name and phone number, by searching for it online. When in doubt, contact the company directly through official channels to confirm the authenticity of the message.

04 | THE ONLINE OVERPAYMENT SCAM

In the world of online buying and selling sites like Etsy, Facebook Marketplace, Poshmark, and Craigslist, scammers are increasing their attacks and their success by preying on the good conscience of other people.

In the overpayment scam, the fraudster contacts the victim pretending to be interested in purchasing an item the victim has listed for sale online. The scammer offers to purchase your item, usually at an inflated price and appears to make a payment that’s higher than the agreed-upon amount.

The scammer then requests that you refund the excess amount they “accidentally” sent, and will usually act panicked, upset, and harried. The scammer may even threaten to report the victim to the police for “stealing” the scammer’s money.

But here’s where the twist comes in: the overpayment sent by the scammer was actually fake – a fraudulent check or a forged payment confirmation email that made it seem like you received funds when in fact the scammer didn’t send anything at all. When you refund the overpaid amount, you’re essentially giving away your legitimate money, and by the time the scam is realized, the scammer has disappeared into the digital abyss.

To protect yourself and your parents from this sinister scam:

  • Always require online buyers to pay through traceable means, such as PayPal, Cash App, or Venmo.
  • Avoid sending and receiving money from strangers through non-refundable money transfer services like Zelle.
  • Never accept more money than the purchase price.
  • If the buyer wants a refund, verify that you actually received the funds by logging into your payment servicer account and checking your balance there. Do not rely on a confirmation email which can be easily faked, especially if your payment account does not show any payment received.

Preserving Your Assets and Protecting Your Loved Ones

Staying on top of constantly changing financial scams can feel overwhelming, but with the right knowledge and tools, you can help keep yourself and your aging parents safe from the financial and emotional harm scams cause.

As your Personal Family Lawyer™ firm, we’re available to help guide a discussion with you and your parents about your financial well-being as part of your estate plan, including how to catalog their assets and how to make it as easy as possible for you to help each other in the case of an emergency or scam attempt.

If you want to know more about how working with a Personal Family Lawyer® firm can help you and your family, schedule a free 15-minute discovery call today. It would be my honor to look after your family’s plans now and for years to come.

AARP and The Red Cross Celebrate Make-A-Will Month, But Here’s What They Didn’t Tell You

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August is National Make-A-Will Month and you may have received an advertisement in your inbox or mailbox from AARP or the American Red Cross reminding you to get your Will taken care of this month. Both AARP and the Red Cross promoted their partnerships with FreeWill.com, a website that claims to help you create a legally valid Will in just 20 minutes.

A Will is usually the first thing that comes to mind when you think of getting your affairs in order, so the advice presented by AARP, the Red Cross, and National Make-A-Will Month itself sounds really good. But in reality, the message of AARP and the Red Cross for Make-A-Will Month could leave your family with a stressful mess when you die or if you become incapacitated first.

To understand why, it’s important to know what a Will does and where its limits lie.

A Will Does Not Cover All of Your Assets

Advertisements and public campaigns about making a Will can make it seem like a Will can take care of all of your needs and all of your assets after you’ve died. In reality, a Will only covers certain items of your property, including any property owned solely in your name and any property that doesn’t have a beneficiary designation.

That means a Will does not control property co-owned by you with others listed as joint tenants or owned as marital property with a spouse, meaning you can only give away your share of any property you own with others, not the entire property.

Assets such as retirement accounts and life insurance policies that have beneficiary designations are not controlled by your Will at all but will instead be paid out directly to the person listed as your beneficiary on each account. Because of this, it’s especially important to make sure your account beneficiaries are up to date. And, that you have backup designations in case your chosen beneficiary isn’t living at the time of your death.

Even if your Will states that you want your wishes to apply to all of your assets, the wishes in your Will are always trumped by beneficiary designations and co-ownership laws.

A Will Does Nothing For You If You Become Incapacitated

Since your Will doesn’t have any authority until after you’ve died, you can’t use it to give someone you trust the power to make decisions for you if you’re incapacitated due to illness or injury. An incapacity can occur as a result of a car accident, an injury sustained while playing with your softball league, or due to an illness, and may be temporary or permanent.

Tasks like paying your bills, managing your money, and maintaining your home may all require help if you become incapacitated. Likewise, you’ll need someone who can make medical decisions for you if you’re unconscious or unable to communicate your medical choices effectively, such as if you’re in an induced coma in the hospital or have memory problems due to an injury or degenerative condition.

Unfortunately, the people named in your Will have no authority to make decisions for you or act on your behalf while you’re alive unless you’ve given them that power through a separate Power of Attorney. Without it, your loved ones may need to go through a court guardianship process to gain the authority to take care of you and your home.

A Will Must Be Filed in Court to Be Used

One of the biggest estate planning myths I hear from clients is the belief that by having a Will, their loved ones won’t need to go to court after they die.

Sadly, this is the opposite of the truth.

A Will only has the authority to control your assets and represent your decisions when it is filed under a probate case in court after your death. If you named someone in your Will to manage your estate or watch over your children, that person will have no authority to do so while you’re alive.

Your chosen representatives can only begin the process of managing your assets and following the wishes you’ve left in your Will only after a judge or court commissioner has formally given them the power. While court oversight can be helpful if there is any confusion or disagreement about your estate, the probate process can be long and expensive. Often, the process can take 18 – 24 months or sometimes even longer.

Due to the length and complexity of the process, going through probate can easily cost your family tens of thousands of dollars.

In addition, because probate is a public court proceeding, your Will becomes part of the public record upon your death, allowing everyone to see the contents of your estate, who your beneficiaries are, and what they’ll receive. Unfortunately, it’s not uncommon for scammers to use this information to try to take advantage of young or vulnerable beneficiaries who just inherited money from you.

A Will is Not an Estate Plan

Organizations often promote a message of the importance of creating a Will because a Will is a tool that most people have heard of and are familiar with, which makes it an easy launching point to talk about the importance of planning for your assets and your loved ones. But the thing is, a Will isn’t the one-and-done solution that most people are led to believe.

The terms “Will” and “estate plan” are often used interchangeably to mean a tool for dispersing your assets and protecting your wishes, but these two terms are not the same. In reality, a Will is just one piece of your overall estate plan, not the entire plan itself. An estate plan isn’t just one or two documents – it’s a range of strategic decisions about the allocation and title of your assets, and it’s a set of tools and counseling-oriented planning that make sure everything and everyone you love is taken care of both while you’re alive and after you’re gone.

Your complete estate plan may include a Will, a Trust, Powers of Attorney, and other tools that are tailored to your specific situation, local laws, and your vision for the future.

And even more important than both a Will and a Trust, is an inventory of your assets so your family knows what you have, where it is, and how to find it when you become incapacitated or die. Without an inventory of your assets, your family will be lost when something happens to you. A comprehensive inventory updated throughout your lifetime is a critical, and often overlooked, piece of an estate plan that is just a Will.

Trusted Guidance and Counseling

An online program may be able to give you a legally valid Will or other legal documents, but just because something is legally valid doesn’t mean it will be effective. And any document created through a 20-minute online tool is almost guaranteed not to work for you and your loved ones when they need it.

If you’re ready to see how having an estate plan created for your family with heart-forward professional guidance is different than just creating a Will online, schedule your Family Wealth Planning Session™ today. During the session, we’ll review an inventory of everything you have and everyone you love, and together look at what would happen to your possessions and loved ones when something does happen. Then, I’ll help you develop a plan that works exactly as you want it – at your budget and with your vision – to make sure your loved ones are taken care of when you can’t be there.

Most importantly, any document created using an online tool will lack the knowledge, guidance, and personal counseling of a trusted expert who knows your situation and cares about your plan’s effectiveness.

That’s why I don’t just create documents – I guide you and your family through every step of the process, now and at the time of your passing. I even help all of my clients pass on something more valuable than their money – their values, stories, and wisdom – through a Family Legacy Interview.

To get clarity on what you and the people you love truly need schedule a free 15-minute discovery call at this link to learn more.

Help Your Parents Avoid These New Financial Scams – Part 1

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Fraudsters and scam artists are nothing new, but changing tools and technology are making it easier than ever for scammers to target their victims, especially seniors. To protect your aging parents (or yourself) from these con artists, it’s crucial to equip yourself with the knowledge of how these scams work and what your loved ones need to know to keep their assets and emotions safe.

In this two-part series, we’ll explore four of the most recent and insidious financial scams that have surfaced, shedding light on their tactics and providing you with practical steps to shield your parents from potential harm.

01 | THE GRANDPARENT SCAM

One of the toughest parts about being the victim of a scam is the emotional and mental stress it usually causes. Scammers intentionally use urgency, alarm, or guilt to trick victims into making hurried decisions to send money to someone who needs “help.”

In the new “Grandparent Scam,” fraudsters will call or text senior adults pretending to be their grandchild. The scammer will claim that they’re in trouble and that they need the grandparent to send them money right away to bail them out of jail, buy a ticket home from a dangerous location, or pay for damages caused by a car accident.

In these scenarios, the scammer will usually ask the grandparent, “Grandma, do you know who this is?” to trick the grandparent to reveal the name of their grandchild so the scammer can use that name for the rest of the phone call. The scammer will then ask the grandparent to wire money to “help” the grandchild and ask that the grandparent don’t tell the grandchild’s parents for fear of them getting upset.

Some scammers are even using AI to disguise their voices while on the phone with the grandparent to sound more convincing. This scam preys on the love and concern our parents have for their children and grandchildren, and can easily cause young or tech-savvy parents to fall victim as well.

To protect your parents from being victimized by this scam, talk to them about the importance of never disclosing personal or financial information or the names of their loved ones in a text, phone call, or email. Instead, instruct them to ask who the caller is and to wait for the sender or caller to respond. If in doubt, the senior should ask the sender personal questions that only their real grandchild would know, but a scammer wouldn’t. Most importantly, encourage your parents to contact you before wiring or transferring money to anyone for any purpose, no matter what.

One strategy we particularly love is to have a family code word or phrase. For example, your code phrase may be “Cosmo is a spotted dog” and that code phrase would be known by everyone in the family so that if anyone is contacted in an emergency situation, the person could ask what’s our family code phrase, and the person calling, texting or emailing either knows it or doesn’t. And, if they don’t, it’s a no-go for help.

02 | PICK-POCKETING YOUR CRYPTO WALLET

The world of cryptocurrency brings new investment opportunities for those willing to try it out, but with this new financial arena comes new risks and safety measures.

In order to store cryptocurrency, you will need a digital wallet, as that’s the safest way to hold your cryptocurrency. Your cryptocurrency wallet doesn’t actually “store” money like a traditional wallet; rather, it stores passcodes, known as keys, that allow you to send and receive digital currency to and from the wallet.

Wallets come in two forms: hot and cold. A “hot” wallet stores your cryptocurrency in a location that’s connected to the internet—exchange-based wallets, desktop wallets, and mobile wallets. Because they’re connected to the internet, hot wallets are the most convenient, but also the most vulnerable to hacking.

A “cold” wallet, conversely, stores your cryptocurrency in a location that’s completely offline. Ironically, the most secure type of wallet for storing digital currency is a cold “paper” wallet. Paper wallets involve printing out your keys and storing them in a secure location. While paper wallets are the most secure option, if you lose the codes, it’s the same as losing paper currency—meaning there is no way to recover your investment.

But no matter what kind of wallet your loved one keeps their crypto in, anyone with the “key” to that wallet can access and steal the funds – no hacking required.

How the Scam Works

To gain access to your wallet, scammers will lure you to give them your wallet’s key by pretending to be representatives of a cryptocurrency company like Bitcoin or Coinbase, or by portraying themselves as a crypto broker. Once the scammer has your keys, your cryptocurrency is completely vulnerable, even if it’s kept in a “cold” offline wallet.

With the keys, the scammer can move your crypto out of your wallet and disappear with it forever, and since the cryptocurrency market is not attached to the banking system, there is no way to recover cryptocurrency once it’s stolen.

To help protect your parents from these scams, talk to them about the importance of never, ever sharing their wallet keys with anyone besides you and any other trusted family members. This is essential to keep your parents’ crypto investments safe.

In all cases, whether your loved ones have crypto in a hot wallet, paper wallet, or directly in a crypto exchange, make sure they’ve given you the details of where their crypto is stored and how to access it in the event they’re incapacitated or die. Otherwise, it’s completely lost.

If you don’t know how to find and access your parent’s cryptocurrency in an emergency or don’t know how best to plan for your own crypto, please talk with us so we can guide you on how to include your crypto information in your estate plan.

Helping You Protect the Ones You Love

Your parents’ financial security is a priority that demands proactive measures, especially in the face of emerging scams that exploit their vulnerability. By remaining vigilant and arming yourself with knowledge of these scams, you can effectively shield your family from falling prey to these fraudsters.

But remember, communication is key. Talk openly with your parents about these potential risks, and encourage them to reach out to you or a trusted professional before making any financial decisions.

As your Personal Family Lawyer firm, we’re here to guide you through the intricacies of safeguarding your family’s financial future and can make it even easier to protect your parents by helping them establish estate planning tools to record and pass on digital assets like crypto, Powers of Attorney to help manage their assets, and Trusts to protect everything they love for years to come.

To learn how we can help you protect your parents from these scams, schedule a free 15-minute discovery call at this link to learn more.

What the National Debt Ceiling Extension Means for Your Family

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You’ve probably heard about the national debt ceiling and its recent extension, but you might wonder what it has to do with your everyday life as a family. While it may seem like a distant matter, the national debt ceiling extension can have a significant impact on your family’s financial well-being and future planning.

So what exactly is the national debt ceiling extension?

The national debt ceiling is a legal limit set on the amount of money the government can borrow to finance its operations and meet its financial obligations domestically and around the globe. When the government reaches this limit, it cannot borrow more money unless Congress raises or extends the country’s debt ceiling. If the ceiling isn’t raised and the United States can’t pay back its debts, the country’s global creditworthiness is affected as well as financial security abroad and at home.

Congress raised the national debt ceiling on June 3, 2023, which means the United States will not default on its loans. This is good news, and yet the extension of the debt ceiling can still affect the economy and your family.

Here’s how the national debt ceiling extension can affect the economy, and your family, and what you can do to mitigate the impacts

Access to Credit and Loans

You likely rely on credit and loans for various purposes, such as buying a home, financing education, or handling unexpected expenses. When the national debt ceiling is extended, it can create uncertainty in the financial markets, leading to higher interest rates and tighter lending conditions. This means that securing affordable credit and loans for major life milestones or managing financial emergencies may become more challenging.

One of the ways you can mitigate this impact could be to consider starting a business or a side hustle, so you can create multiple revenue streams instead of just being reliant on one, and leverage access to business credit, which can be more accessible and less expensive than using personal credit, even in tight lending markets.

Consumer Confidence and Spending Habits

Your family’s financial health may be closely tied to the state of the external economy. When there is uncertainty surrounding the national debt ceiling, coupled with high inflation, it can affect consumer confidence and spending habits. As people become concerned about the government’s ability to manage its debt, they may tighten their spending, leading to decreased demand for certain goods and services. This can have a direct impact on your job stability, income growth, and even your ability to save and invest for the future.

One way to mitigate this risk is to begin to separate the well-being of your family from the greater economy by creating your own local economy, wherever possible. If that feels far afield, consider ways that you can begin to generate income locally by making a product that friends and neighbors would want and need, or providing a side service within your local community.

Government Programs and Support

Government programs and support play a crucial role in many families’ lives, especially during challenging times. However, when the national debt ceiling is extended, it can put pressure on government budgets, leading to potential cuts or delays in funding for essential programs and services. This may directly affect your access to healthcare, education, housing assistance, and other forms of support that your family relies on.

If you have a child or family member with special needs or an elderly family member you are supporting this may affect you even more. Now is the time to get into closer relationship with your nuclear and extended family, marshall all the family resources, and get into conversation around how you can use all the family resources to support all of the children and elders in the best way possible. If you need help speaking to your parents, or considering how best to ensure a lifetime of support for a child with special needs, give us a call and let’s strategize together.

Tax and Fiscal Policies

Changes in tax and fiscal policies, often influenced by the national debt, can have a significant impact on your family’s finances. As the government seeks ways to manage the national debt, it may consider adjustments to tax rates, deductions, or credits. These changes can directly affect your take-home income, savings, and overall financial planning. Understanding and adapting to these shifts is crucial for effectively managing your family’s budget and long-term wealth and legacy.

You can be fairly certain tax rates will go up to support the debt extension. And, the middle class, especially those who do not know how to mitigate tax impacts with legal entity structuring, are likely to bear the burden.

Ongoing Guidance for Your Family

We understand that managing your family’s financial and legal well-being can feel overwhelming, especially when it’s hard to know how changes in the law and the financial landscape will affect you. But remember, you don’t have to face these challenges alone. As your Personal Family Lawyer® firm, our mission is to provide you with the support and guidance you need as you navigate changes in the law so you can build a life you love while protecting and preserving your wealth and legacy for the next generation.

While we aren’t financial advisors, we can connect you with a trusted network of professionals and work alongside your financial and tax advisors to make sure your estate plan coordinates with your overall financial plan and protects your family’s wishes and wealth no matter what the future brings.

Ready to protect your family’s wealth and preserve your assets and your story for generations to come? Schedule a free 15-minute discovery call at this link to learn more.

Contact us with questions about this topic.
Contact us with questions about this topic.

Are Hybrid Insurance Policies a Better Option than Long-term Care Insurance Policies for Meeting Nursing Home Costs?

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Many people are aware of the high cost of nursing home care. Unfortunately, nursing home costs in Massachusetts rank as some of the highest in the nation and can exceed $12,000 a month. Some insure against these potential costs by purchasing long-term care insurance (LTCI). However, LTCI polices are not without their drawbacks. LTCI premiums can be high and there is generally no residual death benefit if the insurance is not used. Insuring against a risk that may never come to pass without any return on the investment does not sit well with some.

One alternative to purchasing a LTCI policy is to purchase a hybrid life insurance policy that provides long-term care benefits. While hybrid premiums can be five to fifteen percent higher than LTCI premiums, these policies provide a residual death benefit that regular LTCI policies do not. While the downside is if the hybrid policy holder does indeed require long-term care, the value of the death benefit is diminished by the payments made by the insurer toward nursing home care, for many the chance of providing a death benefit for surviving loved-ones is worth the price of the increased premiums. Hybrid policies also function as low-yield investments, which is another benefit they have over regular LTCI.

Of course, those that cannot afford long-term or hybrid policies or are too unhealthy to pass underwriting have other options and can employ trust and gifting strategies that render hard-earned assets uncountable by MassHealth. Contact the Law Office of Brandon L. Campbell for a complimentary telephone consultation to see if any of these strategies may be right for you.

Elderly Woman Exiting Car
Elderly Woman Exiting Car

Is Assisted Living or Senior Living the Better Choice for My Elderly Loved One?

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If you have an elderly parent or other loved one that is in need of care, you might be wondering where to start researching your options. Though the senior citizen population grows every year, the amount of senior housing options has not kept up with that growth and therefore limits the choices that your loved one might have. The terms assisted living and senior living or housing are thrown around a lot, but are you aware of the differences between these two?

What Is an Assisted Living Community?

An assisted living community is for senior citizens that are usually 85 years old or older. There is a large range of different assisted living communities that offer different services; some are targeted for especially frail seniors that cannot take care of themselves at all, and others are for seniors who need basic care. Some assisted living communities will offer on-site nursing care, while others will have both on-site and off-site care. The main descriptive factor of this type of elderly living is that there is some sort of assisted care offered. This can include help with bathing, dressing, grooming, or eating if necessary. They don’t, however, offer extensive medical care, which is what differentiates this choice from a nursing home.

What Is a Senior Living Community?

This type of elderly living community is for retirement age-seniors and older. There is no in-home nursing care offered at these facilities, and residents have easy access to clubs, social groups, and sports activities. This living community is intended for relatively healthy elderly adults that are 60 or older. They will sometimes be equipped health and fitness centers, pools, movie theaters, bowling alleys, and spas. This is a great choice if your elderly loved one is able to live independently, and he or she would like to find a community with other seniors.

If you are still unsure what the best choice is for your senior family member, you should consider hiring an elder law attorney. The law office of Brandon L. Campbell can assist you and your loved one with deciding the best option for long-term care, based on his or her physical and mental needs. Contact us today for a free consultation to get started.

What to Do If Your Loved One Refuses Long Term Care

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One of the most common and difficult caregiving challenges that an adult can face is dealing with an elder loved one who refuses necessary assistance. Whether he or she is resisting in-home aides, driving under ill or weakened physical conditions, or just generally denying help from any family members, it can be hard to decide how to handle the situation. Especially if he or she is experiencing early levels of cognitive impairment, there will be clear signs of confusion or fear of what’s happening to them. As their adult child or close family member, there are a few things you can do to make this process run a little smoother.

What Are Some Strategies to Help Me Overcome My Loved One’s Objections?

  • Start the conversation early: Don’t wait to have the conversation of implementing care for your loved one when there is a health crisis. Start a casual discussion early on and introduce the idea as a plausible outcome in the near future.
  • Be patient: Make sure to ask open-ended questions and give your loved one plenty of time to answer. These are hard things for anyone to think about, so let them have the time to give you an honest and helpful answer. Don’t be surprised if the conversations veer off-topic; realize this might take several talks before you get a beneficial response.
  • Deeply explore: Really try to determine why your elder loved one is refusing care. Ask questions that actually foster a solution- is it about privacy, financial concerns, loss of independence, or a combination of the three? Patiently figure out the root of the problem.
  • Offer options: Include your loved one in interviews, meetings, or schedule setting in order to discuss the various options that he or she can take. There are levels of aid that a helper would give, and they can be around for only certain days of the week or certain times of the day.
  • Accept your limitations: Realize that in the end you should let your loved one make their own choices, as long as they are not endangering themselves or others. Bad things might happen and you can’t always be at your loved one’s side. Accept the limits of care that you can provide and don’t feel guilty.

If you would like more assistance in helping your elderly loved one accept the care that they need, contact our Massachusetts elder law attorney today.

Marriage and the Nursing Home

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A touching article in the New York Times is circulating on social media sites describing the marriage of two people well into their nineties in Middletown, New York. Putting romantic issues aside, from the stand point of protecting assets from the nursing home, marriage can be beneficial or risky depending on the assets each spouse brings to the table. In general, an unmarried individual is allowed to have only $2,000 in assets to qualify for MassHealth nursing home benefits. For a married couple, the institutionalized spouse is again limited to $2,000, but the non-institutionalized spouse is allowed to have at present $120,900, called the Community Spouse Resource Allowance, with no “look back” period applicable to transfers between spouses.

It follows that couples with relatively small estates may be able to shelter more assets by getting married, whereas couples with larger estates may be putting more assets at risk.

NAELA President Hy Darling: Medicaid Cuts Proposed by Senate Will Hurt Seniors and Disabled

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A letter from the President of the National Academy of Elder Law Attorneys, Hy Darling, to members outlines the damage that will be caused to seniors and the disabled if the recently released Senate healthcare bill is enacted:

Dear NAELA members,

Yesterday, the Senate released its initial version of the American Health Care Act, called the Better Care Reconciliation Act.

I appreciate that the Senate heard NAELA’s concerns regarding the provision in the House passed American Health Care Act that would have imposed new restrictions on how much home equity states could exclude when an individual applied for Medicaid. This provision would have been particularly harmful to individuals with disabilities in high-cost areas who wished to remain at home.

Unfortunately, the Senate version of the American Health Care Act makes even worse the House’s radical changes to Medicaid by capping the federal government’s commitment to individuals with disabilities and low-income seniors, putting their health and well-being at risk. Then, starting in 2024, it limits federal payments to the states based on the growth of the Medicaid inflation, which, over time, could be insufficient to keep up with the cost of care. This could not come at a worse time, as the population of Americans over the age of 85 grows rapidly.

As members of the National Academy of Elder Law Attorneys (NAELA), we represent individuals faced with significant long-term care needs. These are some of our nation’s most vulnerable people. Many require assistance to perform the most basic life functions. Their families are emotionally, physically, and financially exhausted from the process. They have had their dignity stripped and lost their life savings as a result of illness and disability.

Many of us cannot imagine ourselves in such a situation, but disability and disease can happen to anyone. For many people, including most middle-class and working-class Americans, it’s Medicaid, not Medicare, that provides them with care in these situations.

Changing Medicaid’s financial structure for the worse without addressing many of the underlying issues in the program only exacerbates these problems. Take just one example: Providing services at home is optional while more costly institutional care is mandatory. States under new budget constraints from the per-capita cap may keep the mandatory and jettison the optional. So the change in financial incentives puts Americans, such as those with dementia, a spinal cord injury, or children with developmental disabilities, at risk of being institutionalized when they could otherwise receive care in a less restrictive, less costly, more comforting setting.

The Senate also continues with the House’s repeal of Medicaid’s three-month retroactive coverage. Without retroactive coverage, the families of seniors discharged to a nursing home after a traumatic accident could be liable for tens of thousands of dollars of nursing home costs, which facilities may then deny them entry because they lack sufficient funds.

Medicaid can be improved upon so that individuals with disabilities and older Americans can receive the long-term care they need, without having to become destitute to do so, without having to put unneeded stress on their families. The Better Care Reconciliation Act, as proposed by the Senate, does not do that. It simply makes an already bad situation worse.

I urge all members to call their senators and ask them to vote against this legislation . . ..

Sincerely,

Hy Darling, CELA, CAP
NAELA President

supreme court
supreme court

New Guidance from SJC on MassHealth Planning

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The Supreme Judicial Court rendered its long-awaited decisions in Daley v. HHS (SJC-12200) and Nadeu v. Medicaid (SJC-12205) today. The Court held that “neither the grant in an irrevocable trust of a right of use and occupancy in a primary residence to a [MassHealth] applicant nor the retention by an applicant of a life estate in his or her primary residence makes the equity in the home owned by the trust a countable asset for the purpose of determining Medicaid eligibility for long-term care benefits.”

The decisions make clear that transferring a primary residence into an irrevocable trust, properly done, will not make the residence countable for purposes of determining MassHealth nursing home benefit eligibility after the MassHealth five-year lookback period has run, so long as the applicant does not have access to principal under “any circumstances.” The value of a life estate retained by the grantor remains countable as well as any income to which the grantor of the trust is entitled.

The decisions describe some traps for the unwary. Such trusts should circumscribe trustee discretion to appoint trust assets to a non-profit organization. Provisions such as this are sometimes included to qualify for favorable tax treatment, or “grantor trust” status. Many skilled nursing facilities in Massachusetts are run by non-profits, and if the nursing facility meets the definition of a non-profit set forth in the trust, this may make the trust assets countable. Also, trust language that provides for the use of trust principal to pay for taxes creates countability. Lastly, the opinions suggest that the value of a grantor’s use of the premises, i.e. the fair market rental value, under a use and occupancy agreement is a countable asset.