Lawyer Disbarred for Living Trust Scams

The Pennsylvania Supreme Court has disbarred a lawyer for his conduct in selling living trusts to senior citizens.

The term “living trust” is a marketing name given to a revocable trust you create during lifetime often with a purpose of avoiding probate at your death. I’ve written before about living trusts, their proper uses, and the problems surrounding their improper marketing. See my article Avoiding Living Trust Scams (July1, 2013).

On Monday (July 28, 2014) the Pennsylvania Supreme Court issued an order disbarring attorney Brett Weinstein due to his involvement with the misleading sales of living trusts and the related “legal advice” given by non-lawyer salespeople. The scams also typically involved the sales of high commission annuities to seniors.

Mr. Weinstein’s disbarment was based on the Report and Recommendations of the Pennsylvania Lawyer’s Disciplinary Board. You can read the Report and learn about how the scams operated here.  

The Report describes numerous instances of inappropriate sales of living trusts and annuities to vulnerable consumers. Here is the Report’s description of the normal approach:

[T]he client, usually a senior citizen, was identified through advertisements, seminars or cold calls; the nonlawyer sales agent went to the client's home and sold the living trust through an "avoid probate" sales pitch, using Respondent's [Weinstein’s] brochure and misleading charts;  the agent had the client sign various documents and a Weinstein  fee  agreement,  collected  the  fee  and  obtained  personal  and  financial information.

This information was given to Respondent's law office, where a living trust was drafted, despite the fact that Respondent had scant or no contact with the client and had not gone through the proper steps to provide competent representation in estate planning, such as reviewing existing estate planning documents, discussing dispositive intentions, analyzing tax situations, and determining the competency of the client. The living trust was taken back to the client's home for signature by a nonlawyer delivery agent, at which point the agent attempted the sale of annuities. The only explanation of the living trust given to the client came from the nonlawyer agent.

This type of living trust flimflam has been prevalent in Pennsylvania for decades. As described by the Pennsylvania Attorney General’s Office, the living trust scams use “high-pressure sales pitches which prey on the fear that assets will be tied up indefinitely or that estates are prone to heavy taxes and fees if a living trust is not in place. Con artists often rely on unfamiliar terms such as "probate" and "executor" to convince consumers that a living trust is right for them even though many of the complex rules and fees that can complicate estate distributions do not exist in Pennsylvania.” (See, Pennsylvania Attorney General’s brochure:  Beware of Living Trust Scams.)

Seniors should be very wary of solicitations they receive regarding probate avoidance and living trusts via direct mail, telephone calls, free dinner seminars and/or in-home visits. Be especially careful if the “advisor” or company is from outside of your local geographical area. For most consumers it makes sense to stick with local advisors who have been serving your community for a while and who are likely to be there for you in the future.  

For some tips on how to find a good local elder law attorney to help with estate and elder law concerns see my recent article How to Find a Good Lawyer for Older Adult Issues.

Pennsylvania legislators looking to curb elder abuse in our Commonwealth may want to consider tightening the laws that apply to the deceptive sales of living trusts and annuities to seniors.  

Related Reading:

Beware of Living Trust Scams (Pennsylvania Attorney General)
The Truth about Probate and Living Trusts (Allegheny County Bar Association) 

Pennsylvania Income Tax Deduction for 529 Plan Contributions Explained

A 529 Plan is a tax advantaged way to save for the college costs facing your children or grandchildren. It’s named after a section of the Internal Revenue Code. Withdrawals made from 529 plans for qualified education expenses are free of federal income taxes. And there can be state tax advantages as well.  

With the cost of college soaring, it’s little wonder that 529 plans have become very popular. The College Savings Plans Network reports that more than $227 billion is invested in 529 plans across the country.   

More and more grandparents are using 529 plans to set aside some of their wealth to help finance college for their grandchildren. According to a 2013 survey 14% of 529 plan investors are grandparents. 

Pennsylvania offers particularly strong tax support for grandparents who want to save for their grandchildren educations by contributing to 529 plan accounts. But the deduction rules can be tricky, especially for married couples.

Recently, the Pennsylvania Department of Revenue updated its online clarification of the deductibility rules for contributions to 529 college plans. Here is the Department’s 06/18/2014 update:

Could you please clarify the new deductibility rules for contributions to 529 college plans? Specifically, what is the limit per beneficiary per year? And for a married couple, does that mean each spouse may deduct up to the maximum contribution amount per beneficiary per year, or is it only the maximum contribution amount per couple per beneficiary per year? If it's a total of the maximum contribution amount per couple per beneficiary per year, does it matter if, say, one spouse contributes a larger portion of the maximum contribution amount and the other spouse contributes the other smaller portion? (I'm referring to state tax rules, of course, not the federal.)

For tax years 2006, 2007 and 2008, the maximum contribution limitation was $12,000 per beneficiary, per taxpayer, per year, up to the amount of taxable income (if less than the $12,000 per beneficiary, per taxpayer limit).

For tax years 2009, 2010, 2011 and 2012, the maximum contribution limitation was $13,000 per beneficiary, per taxpayer, per year, up to the amount of taxable income (if less than the $13,000 per beneficiary, per taxpayer limit).

For tax years beginning on or after Jan. 1, 2013, the maximum contribution limitation has increased to $14,000 per beneficiary, per taxpayer, per year, up to the amount of taxable income. A married couple, who could previously contribute $12,000 or $13,000 each per beneficiary, per year as long as there was sufficient taxable income for each spouse may now contribute $14,000 for each beneficiary. Where the married couple with one beneficiary could contribute up to a total of $24,000 or $26,000, a married couple with one beneficiary may now contribute a total of $28,000. Each may contribute up to $14,000 (limited by the amount of taxable income) per beneficiary.

For example, if one spouse had taxable income of $19,000 and the other only $9,000, the contribution deduction for a one beneficiary contribution scenario on a joint return would be limited to $23,000 (a $14,000 deduction for the spouse with $19,000 of income and a $9,000 deduction for the spouse with $9,000 of income). If each spouse had taxable income in excess of $14,000 and one spouse contributed $19,000 and the other spouse contributed $9,000, the maximum deduction the couple could take on a joint return is limited to $23,000 (a $14,000 deduction for the spouse who made the $19,000 contribution and $9,000 contribution for the spouse who made the $9,000 contribution) for a one beneficiary contribution scenario.

Note that a grandparent can make a contribution on behalf of a beneficiary and take the deduction even if the beneficiary’s parents make maximum contributions of $14,000 each. The contribution limit is determined on a taxpayer by taxpayer basis. Not a beneficiary by beneficiary basis. See: http://tinyurl.com/pc96b47.

Many states and the District of Columbia offer a deduction or state tax income tax credit for contributions to an in-state plan. Pennsylvania goes a step further and gives you the income tax deduction even if you use an out-of-state 529 plan. (For considerations on whether to use and in-state or out of state plan see The 529 question: In-state or out-of-state?, but note that the article is relatively old – from 2008).  

Potential inheritance tax bonus:  Accounts held in Pennsylvania Treasury 529 accounts (including those owned by grandparents) are NOT subject to Pennsylvania Inheritance tax. See, http://tinyurl.com/nrhhsvr.  

The Pennsylvania Treasury operates two 529 plan options: A Guaranteed Savings Plan; and an Investment Plan. See www.pa529.com for more information. The statutory provisions governing Pennsylvania's two 529 plan programs are found at 24 P.S. Section 6901.301 et seq. 

How to Find a Good Lawyer for Older Adult Issues

Older adults face many legal issues. Some of the most complicated relate to planning for continued life (life care planning), rather than for death (estate planning).  

Planning for aging, possible incapacity, and the potential need for expensive long term care can be particularly complex and requires expert legal help.  But it is difficult for the consumer to be able to identify lawyers who have the training and experience required to provide the expert guidance needed.   

Planning for senior issues like incapacity and long term care is an important aspect of the services provided by what have become known as “elder law attorneys.”   Unfortunately, in most states any lawyer can say he or she practices elder law or hold themselves out as being an “elder law attorney” even if the lawyer has little or no experience with the issues that are especially important to older adults. This means seniors must be particularly cautious in choosing a lawyer and carefully investigate the lawyer before hiring.  

This article contains some tips you can use to find a lawyer who can provide older adults with high quality specialized legal services.  

Certification 

A Certified Elder Law Attorney (CELA) is a lawyer who has met the rigorous standards for certification in the field of elder law set by the National Elder Law Foundation (NELF).  In Pennsylvania, where I practice, the Supreme Court has approved the NELF certification process and permits lawyer who have been certified by the Foundation to state that they are certified elder law attorneys.  

Lawyers who have not met these rigorous standards are not permitted to refer to themselves as CELAs. This means that the CELA professional designation provides a measure of assurance that the lawyer has an in-depth working knowledge of the legal issues that impact the elderly, including long term care.  It is somewhat akin to Board Certification for Physicians. 

There are CELAs located in most areas of the country. A listing of those attorneys can be found on the NELF website at www.nelf.org.  But some geographic areas are unrepresented. There are presently only 45 CELAs in Pennsylvania.

Other Resources

What can you do to find qualified elder law help if there no CELAs in your community? How can you find lawyers who have the knowledge and experience required?

You may want to start by seeking recommendations from friends who have received professional help with senior planning issues.  Who did they use?  Were they satisfied with the services they received?  Hospital social workers, Alzheimer and other support groups, accountants and other financial professionals can also be good sources of recommendations. 

Questions to Ask

To have an issue addressed properly, the senior planning client needs a lawyer who devotes a substantial part of his or her practice to your issue of concern.  Experience is a critical platform for quality services in most professional areas, especially law.

For example, if your family member needs long term care planning, you shouldn’t hesitate to ask the lawyer what percentage of his practice involves long term care planning.  Or, you could ask how many new long term care planning cases the law office handles each month.  There is no correct answer.  But there is a good chance that a law office that assists with two nursing home placements a week is likely to be more up to date and knowledgeable than an office that helps with two placements a year. 

Ask whether the lawyer is a member of any Elder Law planning organizations.  Is the lawyer involved with committees of state bar organizations that have to do with senior issues?  If so, has the lawyer held a position of leadership or authority on the committee?   Does the lawyer lecture on your issue of concern?  If so, to whom?  (For example, if the lawyer is asked to teach other lawyers about elder law and long term care planning, that is a pretty good sign that the lawyer is considered to be an expert in those areas by people who should know.)  

If the lawyer lectures to the public, you or a family member might try to attend one of the presentations. This should help you decide if this is the lawyer for you.

NAELA and State Bar Associations

The leading national organization of elder law attorneys is the National Academy of Elder Law Attorneys (NAELA): check www.naela.org for a listing of its members.   

NAELA has thousands of members and there is a good chance that there will be one or more members of NAELA in your geographic region.  While mere membership in the Academy is open to any lawyer and provides no assurance that the attorney is an experienced elder law practitioner, membership does at least show that the lawyer has some interest in the field.  

In addition, NAELA (and many state bar associations) run educational sessions to help lawyers stay current on the latest aspects of elder law and issues like long term care planning.  Attending these sessions takes time and commitment on the part of the lawyer and is a good sign that the lawyer is attempting to stay up to date on nursing home issues. You may want to look for an attorney who is a member of NAELA and/or of your state bar Elder Law Committee or Section and has recently attended one or more of its educational sessions.  

If the lawyer has been a speaker at one of the NAELA or State Bar elder law educational programs, that is an even better sign of recognized competency in the field. 

Life Care Planning

Some elder law firms offer “life care planning services” to provide continuing ongoing support and guidance to older adults and their families. These firms take a holistic approach and supplement their legal services with care coordination and advocacy support to help families respond most effectively to the changing challenges of aging, chronic illness and disability. Many of these firms are members of the Life Care Planning Law Firms Association. 

Life care planning can help relieve the physical, emotional and financial stress for families struggling to deal with the demands of caregiving. The Life Care Planning law firm helps the family locate available resources and employ the right caregivers and preserve the family’s physical, financial and emotional resources. It helps the family keep the older adult at home for as long as possible, and make the best residential transition if that ever becomes necessary.

The goal of life care planning is to promote and maintain the health, safety, well-being and quality of life of the elder client, whether the client is at home or in a residential facility. More information about life care planning and a list of law firms who are members of the Life Care Planning Law Firms Association is available at https://lcplfa.org.  

Lawyer Ratings

Finally, the internet has become an incredible resource for finding just about anything you need.  This includes an elder law attorney. By now most lawyers have websites.  Do a search on “elder law” and your city and you are likely to find quite a few lawyers show up in the listing. You can then check out the lawyer’s website.  Many lawyer websites are just glossy advertisements written by marketing firms, but some have content actually written by the lawyer. At the very least, you can read the lawyer bio page to get some useful information. 

There are quite a few lawyer rating sites available on the internet.  These include AVVO, Super Lawyers, and Best Lawyers in America.  The internet is filled with ratings, of course. Google assigns a PageRank score to every Web site it indexes, Yelp rates restaurants, Standard & Poor's rates stocks and bonds, etc. But rating lawyers is tricky and subjective, and information can be stale. I once represented the family of a lawyer who had suffered for many years from Alzheimer’s. 7 years after he retired from practice he still was being given the top rating possible by one of the best known rating companies.  I checked his ratings again, 3 years after his death – he still had an “A” rating from that company.   

So, while lawyer ratings services can provide some useful information (for example, AVVO tells you whether a lawyer has ever been disciplined for misconduct), they should be viewed with a measure of caution.

Consumer Beware

Bottom line: When you need legal help with a senior issue, it is critically important that you find a qualified law firm that is experienced in dealing with your particular issue of concern. Be smart and don’t fall into the trap of thinking that all lawyers are equally knowledgeable about your issue.  They are not. Do some homework before choosing your attorney.

Lawyers love Latin terms and there is one that you should remember as you search for an elder law attorney - “Caveat Emptor” – which means “Buyer Beware.”

Aging in Place with LIFE (PACE)

Numerous studies reflect that a large majority of older adults want to continue to live at home for as long as possible.

But “aging in place” can become difficult if we begin to suffer functional and cognitive losses and are no longer able to live fully independently. The burdens placed on our family caregivers can become overwhelming.

In recent years, the expansion of community-based and home care support services has allowed many seniors who would have otherwise been required to move to a nursing home to remain at home. This article is intended to alert readers to the existing of one such program that has benefited a number of my clients and their families. It is a program that I think is underappreciated.  

The LIFE program provides health-care and supportive services for older persons who are certified to need a nursing home level of care but are able to live safely at home with the program’s support. If you have limited financial resources and your income is within 300 percent of the Federal Benefit Rate ($2,163 in 2014) your participation in the LIFE program may be fully covered by a combination of Medicaid and Medicare. (And private payment may be an option for those who do not qualify for those programs).  

On a national level, this wonderful but underutilized program is referred to as PACE (Program of All-inclusive Care for the Elderly). The name was changed in Pennsylvania to avoid confusion with our state pharmaceutical assistance program. The Pennsylvania program is generally referred to as LIFE (Living Independently For Elders).

The LIFE program brings together all the medical and social services needed to provide community-based care for seniors who are frail enough to meet the Medicaid standards for nursing-home care. The program is designed to meet all of its participants health related needs. You are generally provided with transportation to and from your home to an adult day health center where you can participate in activities and medical appointments. However, services may also be given in your home, a hospital, or a long term care facility where necessary.

Because the LIFE interdisciplinary health care team authorizes and coordinates all your health care services, the program becomes a one-stop alternative that simplifies your access to health care. And increased coordination of your care can result in improved quality of that care.

The Balanced Budget Act of 1997 established the PACE model as a permanent provider type under both the Medicare and Medicaid programs. Most LIFE participants are eligible to receive services under both Medicare and Medicaid. The joint funding sources may be sufficient to provide total care for dually eligible beneficiaries.

Like another home care alternative - the Aging Waiver Program, LIFE serves individuals who are 60 years of age or older, who would otherwise qualify clinically to be in a nursing facility, but who choose instead to remain in their homes with the support of LIFE program services. (The age threshold for LIFE can be reduced to age 55 depending on the program). Clinical eligibility for participation in LIFE programs is determined through an assessment done by the local Area Agency on Aging, in cooperation with the individual’s personal physician.

To qualify for Medicaid payment for LIFE services, the individual’s available income and available resources must be at or below 300% of the federal benefit rate. The available resource ceiling is $8,000. Limited “spend down” is available since the LIFE program rules do allow individuals with income in excess of the ceiling to qualify for partial Medicaid funding by paying a monthly share of the cost of LIFE services, with Medicaid paying the monthly remainder. If an individual wishes to pay privately for participation in the LIFE program, his/her monthly premium is equal to that amount that would otherwise be paid by Medicaid.

Enrollment is voluntary. Once enrolled, PACE becomes the sole source of all Medicare and Medicaid covered services, as well as other medical, social, or rehabilitation services required by the enrollee. If an enrollee requires placement in a nursing home, the LIFE provider is responsible for the cost of care. An enrollee’s needs are determined by PACE’s team of care providers, which includes primary care physicians, nurses, therapists, social workers, personal care attendants, dieticans, and drivers.

With capitation plans like PACE, providers receive a flat monthly fee in return for covering the entire spectrum of care for enrollees from acute to long-term. The payment does not vary no matter how many services are provided. This provides a strong incentive for the LIFE program to keep its participants healthy.

Pennsylvania has one the most vigorous PACE programs in the country. People can thrive under the program. But many seniors are unaware of or don't understand the value of the LIFE alternative. And, depending on where you live, it may not be an option for you. As of July 2014, LIFE is available in many but not all geographic areas of Pennsylvania. A list of areas and providers is available on the PA Department of Public Welfare website: http://tinyurl.com/mgs33q8.  For your ease of reference I’ve reproduced the list below.

National information about PACE and a list of programs in each state is available on the Pace4You website at http://tinyurl.com/nlxxlgp.   

Here is a list of the 23 LIFE programs currently operating in Pennsylvania:

Albright LIFE Williamsport
901 Memorial Avenue
Williamsport, PA 17701
Ph: 570-322-5433
URL: click here to visit website 

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NewCourtland LIFE
5457 Wayne Avenue
Philadelphia, PA 19144
Ph: 267-335-1500
URL: click here to visit website 

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LIFE Lutheran Services, Inc.
840 Fifth Avenue
Chambersburg, PA 17201
Ph: 717-264-5433
E-mail: info@lifelutheranservices.org
URL: click here to visit website 

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LIFE Butler County
231 West Diamond Street
Butler, PA 16001
Ph: 724-287-5433
URL: click here to visit website 

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LIFE St. Mary
Attention: Erin Williams
2500 Northgate Road
Trevose, PA 19053
Ph: 267-991-7600
E-mail: ewilliams@stmaryhealthcare.org
URL: click here to visit website 

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LIFE Geisinger - IHM Center
Attention: Maria Maletta Hastie
2300 Adams Avenue
Scranton, PA 18509
Ph: (800) 395-8759
Fax: (570) 558-6161
E-mail: mchastie@geisinger.edu
URL: click here to visit website 

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Senior LIFE Johnstown
401 Broad Street
Johnstown, PA 15906
Ph: 877-998-LIFE
E-mail: info@seniorLIFEpa.com
URL: click here to visit website 

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LIFE Lawrence County
PA 16101
Ph: 724-657-8800
URL: click here to visit website 

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Senior LIFE Uniontown
89 W. Fayette Street
Uniontown, PA 15401
Ph: 877-998-LIFE
E-mail: info@seniorlifepa.com
URL: click here to visit website 

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Senior LIFE Washington
2114 N. Franklin Drive
Washington, PA 15301
Ph: 877-998-LIFE
E-mail: info@seniorlifepa.com
URL: click here to visit website 

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Albright LIFE Lancaster
417 W. Frederick Street
Lancaster, PA 17603
Ph: 717-381-4320
URL: click here to visit website 

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LIFE - Pittsburgh
One - Parkway Center - 875 Greentree Road
Suite 200
Pittsburgh, PA 15220-
Ph: (412) 388-8042
URL: click here to visit website 

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SeniorLIFE Lehigh Valley
2045 Westgate Drive, Suite 100
Bethlehem, PA 18017
Ph: 484-895-4302

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Community LIFE
2400 Ardmore Boulevard
Suite 700
Pittsburgh, PA 15221-
Ph: (412) 436-1320
URL: click here to visit website 

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Mercy LIFE
1900 South Broad Street
Philadelphia, PA 19145
Ph: (215) 339-4747
URL: click here to visit website 

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LIFE - University of Pennsylvania School of Nursing
4508 Chestnut Street
Philadelphia, PA 19139
Ph: (215) 573-7200
URL: click here to visit website 

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LIFE Beaver County
131 Pleasant Drive, Suite 1
Aliquippa, PA 15001
Ph: (724) 378-5400
URL: click here to visit website 

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LIFE - NWPA
149 West 22nd St.
Erie, PA 16502
URL: click here to visit website 

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SeniorLIFE Greensburg
123 Triangle Drive
Greensburg, PA 15601
Ph: 724-838-8300
E-mail: info@seniorlifepa.com
URL: click here to visit website 

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LIFE Geisinger - Roosevelt Court Center
Attention: Marc Varano
1100 Spruce St., Suite 100
Kulpmont, PA 17834
Ph: 866-230-6465
Fax: 570-373-2101
E-mail: mavarano@geisinger.edu
URL: click here to visit website 

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Senior LIFE York
1500 Memory Lane Ext.
York, PA 17402
Ph: 877-998-LIFE
E-mail: info@seniorlifepa.com
URL: click here to visit website 

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Albright LIFE Lebanon
113 South 9th Street
Lebanon, PA 17042
Ph: 717-376-1133
URL: click here to visit website 

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Senior LIFE Ebensburg
429 Manor Drive
Edensburg, PA 15931
Ph: 877-998-LIFE
E-mail: info@seniorlifepa.com
URL: click here to visit website