New York Estate Planning & Elder Law Blog

NURSING HOME RESIDENTS’ BILL OF RIGHTS

Published on: December 14, 2015 | by Ettinger Law Firm

THE BASICS – FEDERAL LAW

In 1965 federal law enabled the federal government to license nursing homes, under two categories; skilled nursing homes and intermediate care facilities that required less medical care and more personal care. In 1980 Congress enacted the Civil Rights of Institutionalized Persons Act which covered any state facility or institution that provides nursing, intermediate or long term care that is residential in nature or which has custody over the residents. Soon after Congress investigated larger issues involving the quality of life and services provided, or the lack thereof, provided in short, intermediate and long term care facilities. Part of that investigation included a request for a comprehensive study on the matter. By 1986 the Institute of Medicine published an exhaustive investigation of nursing homes in the United States. By 1987, Congress enacted the Nursing Home Reform Act. The animating factor of the Act was to insure that all nursing home residents receive care to help them achieve their best level of mental, emotional and physical care.

PROTECTIONS IN PLACE

INHERITING A LEASE

Published on: December 12, 2015 | by Ettinger Law Firm

VALUABLE ASSET

A residential lease in New York City or any desirable locale can provide many benefits. Some people wait years to get into a rent stabilized apartment. There is even a Seinfeld episode where Elaine quips that some people scan the obituaries to see if someone in a rent stabilized apartment has passed away. It is a common occurrence for many people to live decades and raise generations of families in their rent controlled rental unit. Many cities have their own laws dealing with how to inherit these leases. New York Real Property Actions and Proceedings §236 law deals permits an estate to inherit the lease of a deceased person and New York Estate Powers and Trusts Laws §13-1.1(a)(1) also holds that a lease is an asset of an estate. In addition, many local laws housing and regulations also mandate how and when a lease may be inherited. New York City ended its Rent Control laws in 1971, yet still has approximately 38,000 rental units listed under the old Rent Control laws, as once the lease is under the Rent Control law it remains until it is no longer. Going forward New York leases are generally covered by Rent Stabilization laws, also covered by the same laws dealing with succession of a residential lease. Rental units under the rent stabilization laws are the most common type of residential lease. These leases will remain for so time due to the right to succeed these leases by other family members or even friends. Most particularly, New York Code, Rules and Regulations §2532.5(b) allows for family members to succeed the lease. Landlords have been known to fight like the devil to regain possession of these rentals, sometimes offering cold hard cash, from $40,000 on the low end to $17,000,000 on the high end.

HOW TO INHERIT OR SUCCEED – COHABITATION

CAMERAS IN THE NURSING HOME

Published on: December 11, 2015 | by Ettinger Law Firm

MANY ISSUES TO ADDRESS – PRIVACY AND LEGAL CONSIDERATIONS

The issue of video cameras in nursing homes has exploded over the last several years. With the large scale saturation of such user friendly technologies as Skype, Facetime and similar video technologies it should not come as a surprise that these issues are cropping up in nursing homes. Video cameras can be a major liability for nursing homes, including even criminal liability. It seems almost weekly that someone is arrested or charged due to evidence gleaned from video cameras located in nursing home residents’ rooms or other areas. While management may decide to utilize video monitoring equipment in public areas, there are many problems with residents using the same or similar video technology even in their own rooms.

Certainly there are common areas that are not public in nature that are a definite problem area for video imaging. The distinction lies in the public versus private designation. You do not have an expectation of privacy in public. There is an expectation of privacy in a residential unit. With a video camera a resident may be able to, unwittingly, record another resident without his or her permission, in a private area of the nursing home. Such a broadcast, depending on the audience, could be grounds for an invasion of privacy lawsuit. In addition, it could be a violation of the Health Insurance Portability and Accountability Act, usually known as HIPAA, the federal law that requires the confidentiality of medical records. In addition, if there is an audio recording function, recording a third party’s conversations may also violate state criminal wiretapping laws. New York is in the majority of states that require the consent of at least one of the interlocutors for any interception to be deemed legal.

ANTICIPATED CHANGES IN IRS RULES REGARDING FAMILY BUSINESS VALUATIONS

Published on: December 8, 2015 | by Ettinger Law Firm

WHY IT MATTERS FOR ESTATE PLANNING

Every year the Federal Department of Treasury publishes the greenbook which outlines the then current presidential administration’s revenue proposals, tax policies, job creation issues that relate to the Department of Treasury and other related fiscal and policy issues. The greenbook is scrutinized by tax pundits, politicians and others for what it contains, but what it does not contain is also important. Within the 2013 greenbook, there was an obvious lack of discussion of 26 U.S.C. § 2704, which mandates how the law measures the value of certain family controlled entities for estate and gift tax purposes. Some observers took that to indicate that the IRS plans on amending the regulations pursuant to this statute. This suspicion was validated when an official from the Department of Treasury spoke at an American Bar Association, tax section meeting in May, 2015. She indicated that a proposed regulation may be released as early as September, 2015. As of mid-November 2015 such regulations have yet to be published. This issue is of substantial import for estate planning throughout the nation. If and when a family business is transferred via an estate or even to a trust created by an owner of the business, it is likely be a taxable event, depending on the specifics of the transaction.

PASSING A FAMILY BUSINESS ON TO NEXT GENERATION

BANKRUPTCY IN THE AGE OF RETIREMENT

Published on: December 5, 2015 | by Ettinger Law Firm

RISING RATE OF SENIOR FILERS

In 2011 a noted bankruptcy legal scholar at the University of Michigan Law School published a working paper where he documented the rise in the rate of bankruptcy filing rates for elderly Americans. While the overall rate was only seven percent of the bankruptcy filing population, the rate has increased 177 percent for the 65-74 age group and a staggering 566 percent for the 75 and older age group. In May, 2015 the New York Times noted this new reality. There are certainly many factors at play in this dynamic, including a witch’s brew of fixed income, rising medical costs and high credit card debt for a majority of the bankruptcy filers. No doubt the recession of 2008, with its hard impact on housing and retirement was an additional major factor. Bankruptcy also has a favorable treatment of social security and retirement income savings.

BANKRUPTCY OVERVIEW

INHERITANCE RIGHTS OF POSTHUMOUSLY CONCEIVED CHILDREN

Published on: December 5, 2015 | by Ettinger Law Firm

GROWING LEGAL ISSUE

The federal Department of Health and Human Services estimates that there are currently approximately 600,000 frozen embryos in the United States and the number continues to grow each year. Of these, it is estimated that approximately 60,000 could be implanted for full term pregnancy. In still other cases, a father or mother may freeze and store some sperm or eggs for future family planning purposes. In either event, a mother must have artificial insemination or in vitro fertilization or the embryo implanted. It is possible, even likely, that some of these embryos may be implanted and born after the passing of the father or mother with the use of a surrogate mother. The legal rights of these posthumously conceived children are still being fleshed out in legislatures and courtrooms throughout the country. In 2012, the United State Supreme Court dealt with rights of a posthumously conceived child to the Social Security survivor’s benefits of the deceased parent in Astrue v. Capato.

FEDERAL AND NEW YORK LAW

FINANCING LONG TERM CARE SERVICES AND SUPPORTS

Published on: December 2, 2015 | by Ettinger Law Firm

A DEPLETED INSURANCE MARKET

Many of us will likely find a need at some point with help for basic living functions due to infirmity, recovery from a catastrophic accident or simply from aging itself. Things such as bathing, cooking, taking medicine are all necessities that need to be addressed. These needs are currently being largely addressed through long term care services and support in nursing homes and community and home based programs. It is estimated that over half of all elderly Americans will need to rely on these long term care services and support. Long term care services and support is generally not considered medical care but rather assistance with everyday functional needs. Medicare does not pay for such long term care services and support although Medicaid does. Since Medicaid is a means based program, an individual must dwindle down his/her financial resources to obtain such benefits. Given the large number of aging Americans Health Affairs Journal published a detailed study of the viability of insurance to cover this medical necessity. Many individuals prefer not to think about the need for such eventualities, which only compounds the problem with financing such a service, since such needs are rarely prepared for. Not surprisingly, such a product would likely only be affordable to upper middle class individuals. The need for such an insurance product is important and growing in size.

COSTS INVOLVED

ESTATE TAX CARRYOVER FOR SURVIVING SPOUSE

Published on: December 2, 2015 | by Ettinger Law Firm

PORTABILITY

In 2011 Congress revamped the estate and gift tax laws and legislated that the federal estate and gift tax exclusion amount was $5 million. This amount is annually adjusted for inflation; the 2015 maximum is $5.43 million. Any estate values less than this amount are excluded from estate and gift tax liability. So, for example, if a husband passes away and leaves $4 million to his wife, the wife has an additional $1.43 million that she carried over to her own estate, as well as the standard $5 million that she is entitled to for her own estate if she also passed away in 2015 before any federal estate tax liability is incurred. Consequently, under the simple example provided, the wife is entitled to $6.86 million in exemptions before incurring any federal estate tax liability. If the surviving spouse remarries, he/she still retains the right to the portability of the unused estate tax. The portability is only effected if the second spouse of the surviving spouse also pre-deceases the original surviving spouse then the portability from the first spouse is extinguished. The idea and principles of estate tax portability do not apply to generation skipping transfer taxes, which is when a grandparent leaves money to his or her grandchildren.

IRS ALLOWS A DO OVER

QUALIFIED TERMINABLE INTEREST PROPERTY TRUST

Published on: November 30, 2015 | by Ettinger Law Firm

QTIP TRUSTS – WHAT IS IT?

In our society, with divorces as common as it is, many people would likely benefit from a qualified terminable interest property (QTIP) trust. The QTIP trust gives a stream of income produced from a trust to a surviving spouse. That money passes without payment of any estate tax, as the spouse enjoys the unlimited marital deduction for estate taxes. The surviving spouse does not obtain title to the income producing property or control over it. The QTIP trust documents control where it goes after the surviving spouse passes away. It allows for the interim benefit of the surviving spouse, while preserving the income producing property. After the surviving spouse passes, the property goes to the heirs as designated by the QTIP trust.

ELEMENTS OF A QTIP TRUST

ADVANCES ON PENSIONS: IS IT PREDATORY LENDING?

Published on: November 25, 2015 | by Ettinger Law Firm

GOVERNMENT ACCOUNTING OFFICE INVESTIGATION

On September 30, 2015 the Government Accounting Office (GAO) issued a report following a 15 month investigation regarding advances to pensioners, secured by monies that the pensioner would receive in their pension. The same day the Senate Committee on Aging held hearings on this exact issue to determine if indeed this practice is predatory as well as how the federal government will respond. The GAO conducted an undercover operation and received substantive offers from six different pension advance companies. The GAO report also indicated that there was a lack of disclosure on some fees, interest rates and various options, in addition to undisclosed affliations between 21 of the 38 companies that were investigated. The majority of the offers had interest rates of a stiffling 27 to 46 percent. While there is no set federal definition for usury, New York law defines usury as any loan which requires a payment of 25 percent or more; more about this below. Not surpringly the some of the companies focused their efforts on financially vulnerable pensioners with poor or bad cre dit. One of the recommendations from the GAO report was that the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) educate consumers about these practices.

WHY THE GAO INVESTIGATED