Thursday, April 26, 2018

Proposed Law Gives Visitation Rights to Families of Incapacitated Persons

(This article was written by Matthew Parker Certified Elder Law Attorney* with Marshall, Parker and Weber.)
        A bill introduced in Pennsylvania’s Senate proposes to bring “Peter Falk’s Law” to Pennsylvania.  The law provides visitation rights to the families of incapacitated persons who are under the legal custody of a court appointed guardian.  The law also gives notification rights to families regarding the incapacitated person’s change in residence, admission to a hospital and death. 
        The late actor Peter Falk played Lieutenant Columbo on the television series “Columbo” from 1968-1978.  Wearing a wrinkled raincoat, disheveled and absentminded, Columbo would solve crimes with skill and insightfulness. 
        Late in life, Peter Falk developed Alzheimer’s disease.  He was allegedly isolated from his family and friends by his second wife who had been appointed his court appointed conservator (guardian).  As his guardian, his wife allegedly prevented Mr. Falk’s daughter and family friends
from visiting him, did not notify them of changes in his health and allegedly failed to notify them of his death in 2011. 
        Peter Falk’s story is not unusual.  Many families have similar experiences.  Often a second marriage has caused a rift between the second spouse and children from a first marriage.   The caregiver spouse refuses access to the children of a first marriage or refuses to notify them of changes in the health, residence or even death of the parent.
        Across the country, 12 states have enacted versions of a law often referred to as “Peter Falk’s Law”. Pennsylvania Senate Bill 113 proposes to bring that law to Pennsylvania.  The law would prohibit a court appointed guardian from restricting an incapacitated person’s right to visit with family and friends.   There may be restrictions on the visitation rights, such as to those who pose a threat to the incapacitated person. 
        If the guardian refuses access, a family may proceed to court to have a judge order the visitation and possibly replace the guardian.   The language of the law provides that you can define those who will have visitation rights in documents such as a power of attorney or advance directive. 
        The law also proposes that the guardian will have to provide notice to designated persons of the incapacitated person’s residence change, admission to a nursing home or assisted living facility, a hospital and death.   Given the growing popularity of these laws across the country, Pennsylvania may soon be one of those states granting visitation rights to the families of incapacitated persons.  

·      Matthew Parker has been Certified as an Elder Law Attorney by the National Elder Law Foundation

Sunday, April 8, 2018

Death and Taxes in Pennsylvania

Should you be worried about death taxes?
Many Pennsylvania seniors share similar financial and estate planning goals. We want to be sure that we have enough resources to provide for our needs during our lifetime. And we want to pass a little something – as much as possible really – on to our families after our deaths.
For most of us, death taxes are a nuisance, but won’t prevent us from reaching these planning goals. Death taxes don’t affect our lifetime financial security because they only come into play when we die.  And with proper planning they won’t affect the financial security of our spouse because in most cases there is no tax on what we leave to our surviving husband or wife.
For most of us death taxes hit our families only when both spouses are gone and our home and savings pass to our children or other heirs.  At that point, they usually do take a bite.
Here is my simplified overview of how death taxes apply for Pennsylvania residents. Pennsylvania families face two forms of death tax, state and federal. This information is based on the tax laws as they exist in 2018.
Federal Transfer Taxes: The federal government imposes a set of taxes (estate, gift, and generation-skipping) on the transfer of wealth. Under current law few families are affected.
Generally, there is no tax on what you leave to your spouse or charity. And there is no tax on the first approximately $11,2 million (in 2018) that passes to your other heirs. A married couple can potentially protect approximately 22,4 million from the tax. These exclusions increase each year with inflation. There is the potential that the exclusion amounts could be reduced in the future, but they will still likely be more than most people require. If you are one of the few people who do have an estate over the exclusion limits you need to plan to avoid or limit federal transfer taxes. The tax rates are high – the federal estate tax is 40% on the excess – but that tax can be greatly reduced or eliminated by good advance estate planning.
While a 40% federal death tax is severe, it doesn’t affect many people. Fewer than 1% of all estates are subject to federal estate tax. For most of us, it is not a worry.
Pennsylvania Inheritance Tax: The Pennsylvania inheritance tax does affect the things that most Pennsylvania residents leave to their children and grandchildren after their deaths.  It will impact most Pennsylvania families.
Inheritance tax is imposed as a percentage of the value of a decedent’s estate transferred to beneficiaries whether the assets pass through probate or not. There is no bottom threshold – even small estates are subject to PA inheritance tax. The tax rate varies depending on the relationship of the heir to the decedent.
With a few special exceptions the rates for Pennsylvania inheritance tax are as follows:
  • –         0 percent on transfers to a surviving spouse or to a parent from a child aged 21 or younger;
  • –         4.5 percent on transfers to direct descendants and lineal heirs (see below for definitions);
  • –       12 percent on transfers to siblings; and
  • –         15 percent on transfers to other heirs, except charitable organizations, exempt institutions and government entities exempt from tax.
Direct descendants (4.5% rate) include all natural children of parents and their descendants (whether or not they have been adopted by others), adopted descendants and their descendants and step-descendants. Lineal heirs (4.5% rate) include grandfathers, grandmothers, fathers, mothers and their children. Children include natural children (whether or not they have been adopted by others), adopted children and stepchildren.
There are some inheritance tax exemptions written into the law. The proceeds of life insurance policies on the decedent’s life are not taxed, and special rules may apply to IRAs and other retirement plans.
Certain farm land and other agricultural property may be exempt from Pennsylvania inheritance tax, provided the property is transferred to eligible recipients. For more information about these agricultural exemptions and related requirements, see my earlier post: Pennsylvania eliminates tax on inheritance of family farms if law’s conditions are met.
Inheritance tax payments are due upon the death of the decedent and become delinquent nine months after the individual’s death. If inheritance tax is paid within three months of the decedent’s death, a 5 percent discount is allowed.
While the Pennsylvania inheritance tax can take a bite out of your estate, it is rarely devastating. Let’s say that when you die, your leave your home and investments to your children and that the net value of the inheritance is $300,000.  The PA inheritance tax would be 4 ½% of that, or $13,500, and the children would receive $286,500 in value.
If the $300,000 estate were left to a brother or sister the toll would be much higher. The PA inheritance tax would be 12% of that, or $36,000.
For more information on Pennsylvania Inheritance Tax see Elizabeth White’s article Common Pennsylvania Inheritance Tax Questions.

Sunday, March 18, 2018

Mistakes Retirees Make - Failing to Plan for Beficiaries with Special Needs

[Pennsylvania retirees often make legal and estate planning mistakes because of a lack of accurate information and guidance. These mistakes can impact the retirees’ financial security and prevent them from achieving important goals.] 
The existence of a child, grandchild, or other potential beneficiary with a disability (often referred to as “special needs”) complicates the estate planning of a parent or grandparent.  Proper planning of your will, trusts, and beneficiary designations becomes even more crucial to protecting your heirs. 
 With wise advance planning, you can provide for all of your family members without jeopardizing a special needs individual’s current (or potential) eligibility for important government benefits such as Supplemental Security Income (“SSI”) and Medicaid.  These “needs based” government programs can provide substantial support for your special needs beneficiary but only if you set things up so that the beneficiary will be able to meet the programs’ financial standards.
 The rules are complicated and it’s easy to make a mistake.  Here are some of the common mistakes I see retirees making when planning for a special needs beneficiary: 
(1) Making outright distributions from a will, trust, insurance policy, annuity, or retirement plan to the special needs individual.  The receipt of this kind of outright inheritance will likely make the beneficiary ineligible for continued SSI and Medicaid benefits;
  (2) Disinheriting the special needs person – which may leave an already vulnerable beneficiary even more dependent upon the uncertain future generosity of the government. 
 (3) Leaving property to another family member with an “understanding” that they will use the funds to take care of the special needs individual – this plan is fraught with danger and complexity.  What if the other family member dies, runs into medical or financial or marital difficulty, or becomes estranged from the special needs person?  
(4) Establishing a “support trust” for a special needs beneficiary - which may force the trust’s funds to be spent down before public benefits become available. 
There are much better ways to plan. One effectibe planning tool is the “Special Needs Trust” which can be created to take effect either during your lifetime or upon your death.  A Special Needs Trust can provide for the beneficiary’s continuing eligibility for government benefits, protect the inheritance from claims for government reimbursement, and protect the inheritance from loss to third parties, including siblings, grandparents, aunts, uncles and friends who may have the best of intentions.   
 The Special Needs Trust must be carefully drafted by a lawyer who is familiar with this area of law.  A wrong word can make all the difference between creating a fund that will enhance the beneficiary’s life by supplementing public benefits, and a fund that will quickly be exhausted replacing those government benefits.

Saturday, February 17, 2018

POLST End-Of-Life Bills Deserve Support

The Pennsylvania Legislature is considering two bills intended to improve the use of doctor’s orders for end-of-life medical treatment. House Bill 1196 and Senate Bill 623 would standardize POLST orders and provide guidance and education to health care providers. 
What is a POLST order
 The acronym POLST usually stands for "Physician Order for Life-Sustaining Treatment."  But the Pennsylvania bills change the name to “Pennsylvania Orders for Life Sustaining Treatment.” A POLST orders is intended to direct treatment so that patients receive only appropriate and desired care at the end-of-life. This is achieved by creating an actionable medical order that directs care that is consistent with the patient’s goals and preferences for end-of- life treatment. A POLST order is provided in a form that can transfer with the patient as he or she moves between medical providers (such as from a nursing home to a hospital.)

POLST is a tool for translating patients’ goals of care into medical orders in a highly visible, portable way. Following the protocol, health care professionals must discuss with seriously ill patients (or their surrogates) the available treatment options in light of their current condition—and help clarify the patients’ preferences. Then clinicians must document those preferences on a standardized medical order form and ensure that it travels with the individual if he or she changes settings of care. POLST differs from an advance directive (living will or health care power of attorney) in that it is an actionable medical order dealing with the here-and-now needs of patients—it can build on an advance directive but can be created for patients without advance directives.
POLST enables patients to choose from a full range of care options, from aggressive treatment to limited interventions to comfort care. Recent academic research documents POLST’s success in improving the documentation and honoring of patient preferences, whatever they may be. Management of pain and symptoms remains comparable to that of patients without POLST. Improving Advanced Illness Care: The Evolution of State POLST Programs, AARP Public Policy Institute, April 2011 (page v).

Act 169 of 2006 required the Pennsylvania Department of Health to consider, in consultation with an advisory committee, adoption of a standardized form for a POLST which would provide for continuity of DNR and other life sustaining treatment orders from one treatment setting to another.  On November 16, 2010, the Department of Health posted a standard form (but not mandatory) for voluntary statewide use on its website. But much more has been needed.
 Education and Training are Key
 Right now, the use of POLST orders in Pennsylvania is largely unregulated. There is no provision in current law regarding training of the personnel who are advising patients. Facility staff who have received little or no training may be the ones guiding patients in understanding, determining and documenting their treatment preferences. As a result, a patient’s POLST order may be the end result of a lack of understanding by the patient and facility staff and may not reflect the patient’s actual treatment preferences. It may, in effect, constitute a medical order based on uninformed or misinformed consent.
 If enacted the current legislation will help remedy the situation. The bills require the Department of Health to develop recommendations for training of health care practitioners and others who educate patients about POLST or assist in completion of a POLST form. (See HB 1196, Section 5498.1(c). While providers may not technically be required to follow the recommendations and train their staffs, the existence of recommendations and material should help that happen.  
  The House and Senate bills are at this point virtually identical. Both call for creation of a mandatory POLST form and the development of educational materials on POLST orders. The bills create standards for a valid POLST order and provide immunity to health care providers who follow an order in good faith.
 Other Provisions
 The legislation sets forth requirements for emergency medical services personnel regarding their compliance with a POLS order. It also provides for involvement by a patient’s surrogate health care decision makers, who are defined in Section 5493 as: “A health care agent, health care representative, guardian of the person or parent of a minor who is legally authorized to make a health care decision for a patient.”
 Responsibility for implementation is given to the Department of Health which is directed to create a POLST Advisory committee to assist it. The form and educational materials will be available online.
  The bills create an alternative to the normal regulatory process. Notice and opportunity for public comment are required when the mandated POLST form is created or modified but the normal regulatory process is avoided.
 This legislation was drafted by a committee of stakeholders who had to claw their way through a number of divisive end-of-life issues. The bills move the ball forward without attempting to resolve all contentious issues. Much is delegated to the Department of Health and its advisory committee. I think this is a reasonable approach if you actually want to pass legislation in this area.
 My overall impression is that this is well considered and articulated legislation that is deserving of support. Perhaps it does not go far enough in some respects – for example, it appears that providers will be encouraged but not required to get educational training for their POLST involved staff. But it is a step in the right direction if you believe that patients end-of-life decisions should be better counseled, supported and implemented.   

Friday, January 12, 2018

New Medicare Cards are being Issued - Here is what you Need to Know

Your Medicare card is being replaced.
For many seniors their red white and blue Medicare card is one of their most important possessions. The card lists your name and related Social Security Number and shows the dates you became eligible for health overage under Medicare Parts A and B. The card is your entry ticket for services by hospitals, physicians, and other health care providers.
Beginning in April 2018 Medicare will start issuing new cards. The new cards will replace the Social Security number on the card with a new Medicare number. You should receive your new card sometime between April 1, 2018 and April 1, 2019.
Here are some things you should know about these new cards.
  • You don’t need to take any action to get your new Medicare card.
  • The new card won’t change your Medicare coverage or benefits.
  • Medicare will never ask you to give them personal or private information to get your new Medicare Number and card.
  • There's no charge for your new card.
The new cards are being issued as a result of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. That law requires Medicare to remove Social Security Numbers from all Medicare cards by April 2019. They will be replaced by a new 11-character Medicare Beneficiary Identifier (MBI) which will be used for Medicare transactions like billing, eligibility status, and claim status. 
Your new card should look something like this:

The new MBI numbers and cards are being issued in order to fight identify theft.
The cards will be mailed out on a geographic basis. There will be a transition period during which you can use either your old SSN based claims number or your new MBI. The transition period will end on December 31, 2019.
After the transition period ends on January 1, 2020, you will generally need to use your MBI on Medicare claims.
Medicare health and drug plans (e.g. Medicare Advantage plans) will also have to change your ID claim number if the existing numbers include whole or parts of the beneficiary’s Social Security Number
Watch out for scams
Be very careful if you are contacted about your new Medicare card. Medicare warns that scam artists may try to get your current Medicare Number and other personal information by contacting you about your new Medicare card. They may claim to be from Medicare and use various scams to get your Medicare Number. Medicare beneficiaries should expect that scammers will try to take advantage of confusion surrounding the issuing of new cards. For example, scammers may call you:
  • Asking you to confirm your Medicare or Social Security Number so they can send you a new card.
  • Telling you there's a charge for your new card and they need to verify your personal information.
  • Threatening to cancel your health benefits if you don’t share your Medicare Number or other personal information.
These will be fraudulent calls. Do NOT give out your Social Security Number, MBI, or other personal information to the caller. If someone calls you and asks for your Medicare Number or other personal information, HANG UP. If you want you can report the fraudulent call to Medicare at 1-800-MEDICARE (1-800-633-4227).
What you Should Do
  • Make sure your mailing address is up-to-date. If your address needs to be corrected, contact Social Security at gov/myaccount or 1-800-772-1213. TTY: 1-800-325-0778.
  • Remember Medicare will never ask you to give them personal or private information to get your new Medicare number and card.
For the most updated information on the New Medicare Card please go to

Friday, January 5, 2018

PA Medicaid Penalty Divisor Set at $330.19 for 2018

For many Pennsylvania families qualification for Medicaid long-term care benefits is critical to meeting the cost of care for a frail family member. But, an applicant for this government assistance may be made ineligible for benefits if he or she has disposed of assets for less than fair market value during a five year look-back period.
Imposition of a transfer penalty denies benefits for individuals who otherwise need and qualify for Medicaid long term care benefits. A denial can also effectively make an individual’s children liable for the costs of the needed care. See: Law Can Require Children to Pay Support for Aging Parents.
The transfer penalty applies when a transfer was made by the individual applying for Medicaid long-term care benefits, or their spouse, or someone else acting on their behalf.
Unless the transfer is for some reason exempt, if an asset was transferred for less than fair consideration within the look-back period, then a period of ineligibility is imposed based on the uncompensated value of that transfer.
New Penalty Divisor for 2018
The length of the penalty period is calculated by taking the uncompensated value of the asset transfer and dividing it by the average private patient cost of nursing facility care in Pennsylvania at the time of application for benefits. The average cost to a private patient of nursing facility care is often referred to as the “private pay rate” or the “penalty divisor.”
The penalty divisor is revised each year as nursing facility care costs increase. As of January 1, 2018, the penalty divisor is set at $330.19 per day. This means that the PA Department of Human Services has calculated that the average monthly nursing facility private pay rate in Pennsylvania is $10,043.28 a month.This is a 2.56% increase from 2017. [The penalty divisor is different in states other than Pennsylvania].
Uncompensated transfers made during the look-back period will be calculated at one day of ineligibility for every $330.19 transferred away. In Pennsylvania, a transfer penalty will be imposed when the value of transfers made in a month exceeds $500.
The rules are complicated. Seniors considering making gifts or other transfers of assets are well advised to consult with an experienced elder law attorney before completing the transaction. 

Tuesday, January 2, 2018

This New Year - Plan to Protect your Future

As the New Year begins, many people resolve to do some things they know they should do, but have put off. In various years past I have vowed to lose weight, get organized, save more, spend more time with my family, eat healthier foods, and get more exercise. In truth, these are pretty much continuing resolutions that I have to revisit every year.
A recent study from the University of Scranton’s Journal of Clinical Psychology shows that 45% of people make New Year’s resolutions. The most frequent resolution is to lose weight. (See the list of top ten resolutions below.) Unfortunately, only 8% of people keep their New Year’s resolutions. Still, it seems worthwhile to make them. If you have made any resolutions for  the New Year, I wish you success.
This year, if you are getting older like me, I suggest you make a resolution to protect yourself and your family by creating a plan for getting older.
According to data compiled by the Social Security Administration:
– A man reaching age 65 today can expect to live, on average, until age 84.3.
– A woman turning age 65 today can expect to live, on average, until age 86.6.
And those are just averages. About one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95.
You need to put a legal plan together for the problems that can arise from an extended life span. You need to plan to be old and for the reality that your aging is likely to eventually include some level of disability. A majority of people who are over age 85 have some form of disability.
At age 65 the chances we will need some care support during our remaining lives is 70%. 40% of us will need support for over 2 years, and 20% will need care assistance for 5 years or more. The financial costs and personal burdens placed on care-giving families can be substantial. But, you can create a strategy now to protect yourself and your family from these potential costs and burdens.
Part of your strategy should be to have the proper legal documents in place now, before a crisis arises and they are needed. Your power of attorney, health directives, trust and other documents need to be specifically designed to implement a good plan for your aging. These planning tools should not be standard “off the shelf” documents. They need to be tailored to your unique personal goals and family situation. One size does not fit all.
Yes, it’s complicated. To put together a good strategic plan for getting older you are going to need the help of experts in financial and estate planning and elder law. The good news is, the help you need is available – and this New Year’s resolution should be much easier to keep than one that involves losing weight.
Key Documents in Planning for Aging
Here are some of the documents that may be essential components of your planning strategy.
Financial Power of Attorney – This critical document allows a trusted agent of your choosing to step in to pay your bills and manage your financial affairs in the event you can no longer do so. You need to make sure you choose the right person. Don’t neglect to name a backup in case your first choice can’t serve.
You may want to notify your financial advisors and institutions of your choice in advance. If a financial institution has its own “in-house” power of attorney form, you may want to complete it as a supplement to your primary document. And make sure your chosen agent knows how to get access to the financial information he or she will need when they have to step in.
A financial power of attorney is a very sophisticated and complicated document. This is not something to take lightly or buy online. You need to make certain that your agent has the powers required to protect you and your family and that those powers are consistent with your personal situation and goals.
Seek expert guidance to create a document that has the provisions you need.
Health Care Directives – These documents allow you to give directions regarding the kinds of care you want to receive in the event you become incapacitated. And you can designate the persons you want to be making health and personal care decisions for you. The key planning document in this regard is the Health Care Power of Attorney.
Will – this is a document that says who gets what when you die. It also names someone to be in charge of finalizing your affairs. But, many people don’t realize that they have created other documents that can trump the provisions of their Will. These include trusts, beneficiary designations, and joint ownership. If you become incapacitated you may not be able to change the terms of your Will. So, you may want to have your Will and beneficiary designations reviewed and updated as needed as you have your aging plan prepared.
 Trust – this is a document that can be used to provide for management of some of the investments and other things that you own. Trusts can be very useful tools in planning for aging. Special forms of trust can allow you to set aside a home or savings to be protected in the event you or your spouse encounter serious health and long term care costs later in your life.
 Quality Guidance: As Important as Your Documents
The above documents are important components of your aging plan. But a good plan requires more than having the right documents. You also need to put a well thought out strategy in place.
People often don’t appreciate the complexity of planning for aging and long term care. It is imperative that you get the highest quality advice in putting together your plan. Be sure to talk with a lawyer who is a recognized expert in elder law and estate planning. If you live in Pennsylvania, you can call my law firm, Marshall, Parker and Weber and set up an initial meeting.
The bottom line is that the likelihood that your goals will be achieved both during your life and after your death depends largely on how good your plan is, and whether you keep it up to date. The quality of the advice you get in putting together your plan and creating and updating your documents is critical to protecting you and your family. Don’t be penny wise and dollar foolish when your security and your family’s future are at stake.
Further Information:
Here are the top ten New Year’s Resolutions people made in a recent year:
1.    Lose Weight
2.    Get Organized
3.    Spend Less, Save More
4.    Enjoy Life to the Fullest
5.    Stay Fit and Healthy
6.    Learn Something Exciting
7.    Quit Smoking
8.    Help Others Achieve their Dreams
9.    Fall in Love
10. Spend More Time with Family
New Years Resolution Statistics(Source: University of Scranton. Journal of Clinical Psychology.)
Want to know your life expectancy? Social Security has a simple Calculator that gives a rough estimate of how long you (or your spouse) may live.
[This article is an update of one I originally posted in January 2016]