Sunday, November 11, 2018

New Pennsylvania laws may impact older adults

The ending of the 2017-2018 Pennsylvania Legislative session has resulted in  the enactment of a flurry of new laws. Some may be of particular interest to seniors and their elder law attorneys. The new laws enacted in October include (click on the bill number to be taken to the underlying legislation):
HB 270        - Act 87 PACENET Income Limit Increase.
HB 1539 - Act 88 establishes temporary guardianship for kin caregivers such as grandparents.
HB 2133 - Act 89 Kinship Caregiver Navigator Program Act - establishes a kinship caregiver program in Pennsylvania to provide information about services and supports available to grandparents and other kin caring for children.
SB 180 - Act 90 Anatomical gifts. Updates Pennsylvania law on organ and tissue donation.
HB 1233 - Act 106 Mental Health Procedures Act – Revises standards for involuntary mental health commitment. Adds community-based outpatient health treatment as part of the involuntary treatment spectrum.
HB 1884 - Act 112 Patient Test Result Information Act provides for notification of patient test results to be sent directly to a patient or the patient's designee
HB 1885 - Act 113 Amends Probate, Estates and Fiduciaries Code to provide for increase in the amount of bond required by registers of wills.
HB 1886 - Act 114 Amends Probate, Estates and Fiduciaries Code to provide for court review of guardian reports.

Sunday, October 14, 2018

Transfer Penalty with 3 Year Lookback Imposed on VA Aid and Attendance

 By Attorney Tammy A. Weber, CELA*

In a final rule issued on September 18, 2018, the Department of Veterans Affairs (“VA”) amended its regulations governing VA pension benefits effective October 18, 2018.  This rule has been over three years in the making as the VA first proposed these changes in January 2015.  There is now a three-year lookback period with penalties for asset transfers, and there are new requirements for calculating net worth and deductible medical expenses.
Wartime veterans and their spouses can qualify for financial help in paying for the cost of care in their home, a personal care home or a nursing facility.  The benefit is an Improved Pension that is commonly called “Aid & Attendance.” 
Aid & Attendance
Aid & Attendance is an additional monthly cash payment of up to $2,169.00 (2018 amount) available to a veteran or the spouse of a deceased veteran, if it is shown that the claimant meets one of the following conditions:  1) requires the aid of another person to perform certain activities of daily living (ADLs) like bathing, feeding, dressing and toileting; 2) is bedridden because of a disability; 3) is a patient in a nursing home due to a mental or physical incapacity or 4) has eyesight limited to a corrected 5/200 visual acuity or less in both eyes or concentric contraction of the visual field to 5 degrees or less.  For more detail, go to the Veterans Affairs website.  The ADL of “ambulating within the home or living area” has been added and confirmation that assistance with two ADLs is required. 
Service During a Wartime Period
The Veteran must have served at least one day during a wartime period.  The dates that meet this wartime period are found on the Veterans Affairs website:  World War II (December 7, 1941 - December 31, 1946); Korean conflict (June 27, 1950 – January 31, 1955); Vietnam era (February 28, 1961 - May 7, 1975 for Veterans who served in the Republic of Vietnam during that period; otherwise August 5, 1964 - May 7, 1975) and Gulf War (August 2, 1990 - through a future date to be set by law or Presidential Proclamation).
The veteran must have been discharged from the military other than dishonorably and served at least 90 days, with one day during active wartime.  There is no requirement that the veteran was on the battlefield; he or she could have been doing paperwork at a desk.  The veteran will need his or her discharge papers, the DD-214, to prove dates of service and type of discharge. 
Net worth limitation
Prior to October 18, 2018, there was a vague $80,000.00 countable asset limitation.  Under the new law, the veteran has a $123,600.00 net worth limit; said sum including annual household income that is in excess of projected unreimbursed medical expenses when the medical expenses are reasonably predictable.  Assets that are not counted include a residence and the lot on which it sits that is similar in size to the other residential lots in the vicinity up to two acres (unless the additional acreage is not marketable), “personal effects suitable to and consistent with a reasonable mode of life, such as appliances and family transportation vehicles.” 
The new net worth limit is tied to the Medical Assistance (“Medicaid”) Community Spouse Resource Allowance (“CSRA”) and will increase with future Medicaid increases.  Although Medicaid is a different program than the VA pension, Congress adopted that number to prevent impoverishment of the non-institutionalized spouse of an individual receiving Medicaid.  VA drew a parallel that they did not wish any net worth limitation that would subject wartime veterans and their survivors to impoverishment.
Net worth or countable asset determinations will no longer take into account life expectancy, rate of depletion of assets and other factors.  The reasoning behind this change is that those factors have resulted in inconsistent, and sometimes unfair, decisions. 
The Aid & Attendance benefit is reduced by the countable income received by the veteran and his or her household. But the veteran’s income is calculated after deducting unreimbursed medical expenses. This means a veteran with high unreimbursed medical expenses may qualify for the maximum Aid & Attendance benefit. In addition, some types of payments (some compensation or reimbursement payments) are not counted.    
Deductible medical expenses
VA defines medical expenses as those that are “medically necessary; that improve a disabled individual’s functioning; or that prevent, slow, or ease an individual’s functional decline.”  Included are health care provider payments, medications, adaptive equipment, health insurance premiums, transportation expenses and institutional forms of care and in-home care.  Medical expenses do not include meals, general health maintenance, cosmetic procedures, lodging or assistance with IADLs (instrumental activities of daily living).
Lookback period, penalty and cure
The new rules impose a 36 month (three-year) lookback for gifts and transfers for less than fair market value.  Any transfers after October 18, 2018 will be subject to a penalty period not to exceed 5 years.  The penalty begins on the first day of the month that follows the last asset transfer.  The divisor is the “MAPR [Maximum Annual Pension Rate] in effect on the date of the pension claim at the aid and attendance level for a veteran with one dependent” which is currently $2,169.00.  It appears that if the claimant made a $100,000.00 gift or uncompensated transfer within the three years prior to the claim for the pension, the penalty would be calculated by dividing $50,000.00 by $2,169.00 resulting in a period of ineligibility of approximately 23 months.
Some transfers to trusts and purchases of annuities that would not be in the claimant’s best interest were it not for the attempt to qualify for the Aid & Attendance benefit are treated as gifts subject to a period of ineligibility.  There is a presumption that an asset transfer within the lookback period was for the purpose to decrease net worth to entitle the claimant to the pension. Claimant has the burden of proof to rebut this presumption by clear and convincing evidence, a high standard.
There are some exceptions.  If, for example, upon retirement a claimant was mandated to make a transfer to an immediate annuity, the amount transferred to the annuity will not count as a covered asset; however the annuity distributions will count as income.
If a penalty period decision notice is issued, the claimant has 60 days following the decision notice to cure or partially cure a transfer and has 90 days following the decision notice to notify VA of the cure.
There are many nuances and questions from this new rule that will need to be figured out.  At the time of the writing of this article, local county Veteran’s Affairs Coordinators have not received implementation guidelines, so it remains to be seen how certain things will be interpreted.   
*Tammy A. Weber is a Certified Elder Law Attorney and the Managing Principal of the law firm of Marshall, Parker & Weber, LLC with offices in Williamsport, Wilkes-Barre, Jersey Shore and Scranton. For more information visit or call 1-800-401-4552.

Monday, October 8, 2018

Who to Choose as your Financial Pinch-Hitter – a Family Member or a Trust Company?

One of the most crucial estate planning questions is this: Who should you designate to step-in and manage your financial affairs if the day comes when you no longer want to, or are no longer able to, continue to do it yourself?
In my experience, most people don’t give much thought to this question, even though they will be trusting this person with their life savings and financial security.  People typically choose a family member, perhaps the oldest child or the one with whom they feel closest. This person may or may not be the best choice. They may not have the time and ability to effectively deal with the burdens of managing another person’s financial life.
Another option for many people is to hire a professional company to manage their finances if and when the appropriate time arrives. There are trust companies in most communities that specialize in this kind of work.
Many people who could benefit from the services of a trust company never even consider this option. They may think, incorrectly, that you need to be a millionaire to set up a professionally managed trust. But this is not the case.
In this article I want to try to clear up some misunderstandings about trust company services. I want to try to help you answer the question: who should I choose as my financial surrogate – a family member or a trust company. It is written from the perspective of an elder law attorney who is not an employee of a trust company. However, while I have no financial interests in any trust company, my wife and I have set up a revocable trust with a   trust company. This means I have both professional and personal experience with using trust companies.  
What is a Trust Company?
When I use the term “trust company” in this article I mean a corporation that is authorized to handle assets for the benefit of others. Although trust companies are often associated with banks they have different functions. A trust company serves as custodian of and provides investment and financial management services for funds that remain owned by the person setting up the trust or agency or by the trust beneficiaries.  This means that customer’s trust funds are not subject to the creditors of the trust company or any associated bank. It also means that trust companies do not have commercial banking powers and are not insured by the FDIC.
Some trust companies operate in only one state while others are national. Trust companies vary greatly in terms of the size of accounts they require and the fees they charge. So, it is important for the consumer to shop carefully to find a trust company that makes a good fit with the consumer’s particular circumstances and needs.
Powers of Attorney and Trusts
Two primary methods of authorizing another person to manage your financial matters are the power of attorney and the trust.
In my experience, most people who choose to name a family member as their financial surrogate use the power of attorney approach. With a power of attorney one person (the “principal”) gives another person (the “agent”) the authority to make decisions for and manage the financial and other assets of the principal to the extent authorized in the document. With a power of attorney, the legal title to assets remains with the principal.
The typical way to authorize a trust company to act as your financial surrogate is through creation of a revocable trust.  The person setting up the trust (the “settlor”) signs a trust agreement which gives the settlor’s directions for the trust. With the assistance of the trust company any assets the settlor wants managed are then re-titled in the name of the trust.  The trustee then manages the trust assets in accordance with the directions of the settlor. Everything is revocable, which means the trust can be modified and even cancelled by the settlor in the future.
These are the typical arrangements. However, there is nothing that prevents a family member from serving as a trustee or a trust company from serving as an agent. Trustees and agents may be an individual, more than one individual, or other entities if the entity is authorized to act as a fiduciary.
For more information on powers of attorney and trusts see my article, Financial Power of Attorney and Trust – Understanding the Differences.  
Agents and Trustees as Fiduciaries
Agents and trustees are normally going to be consider to be “fiduciaries” which means they owe a high duty of loyalty, responsibility, and prudence towards the other parties to the relationship. These fiduciary duties are typically not stated in the trust or power of attorney document but are specified by laws and court decisions. Trustees and agents may be required to account for their actions and can be held financially liable for any violations of their fiduciary duties.  
For more information on the duty of agents to account for their actions see my article Accounting for your Actions as Power of Attorney.
Family Member or Trust Company - Weighing the Advantages
At some point you may need some help in managing your financial life. Should you hand this responsibility over to a family member? Or should you choose a trust company to serve this role? Give this question some serious thought. The choice you make may be crucial to your future financial security and to the well-being of your family.  
There are some advantages of choosing a family member as your financial surrogate and some of using a trust company. I’m going to discuss some of the perceived advantages of each approach in the hopes of helping the reader make the best decision.
First, I want to discuss some of the perceived advantages of choosing a family member.:
Discussion of Possible Advantages of Choosing a Family Member as your Financial Surrogate
1.    No Financial Threshold.  A family member will serve even if you have very limited assets. Even if you are living month to month with no savings, a family member can step in to manage your checking account and pay your bills, taxes, and insurance premiums, and sign contracts for services you need.   
If you have no savings a trust company will be unlikely to accept you as a client. Trustees typically charge for their services based on a percentage of the funds being managed, with a minimum annual fee. If you have no funds to manage you will still have to pay the minimum fee.
Percentage rates and minimum fees vary widely among trust companies. You need to shop around.
 Smaller trust companies are likely to have the lowest minimum fees and percentage rates. There are small trust companies who charge a minimum annual fee of $1,500 or less. I am aware of one whose current minimum fee is only $500. This makes a small trust company a viable financial management option for individuals and couples with as little as $50,000 to manage.
But for individuals who truly have no savings a family member may be the only option.   
2.    Initial Simplicity. Although some trust companies are willing to serve as agents under power of attorney, most prefer that their clients create and fund a trust. Family members are generally more willing to serve as agents which requires no re-titling of assets. (Re-titling means changing the legal title on assets from you individually to your trust).  Because re-titling is not involved with a plan based on a power of attorney, it may be simpler to implement, at least initially.  However, third parties (e.g. stock brokers, banks) are less likely to readily accept the authority of a family member acting under power of attorney than of a trust company especially where a trust has been funded. So, the simplicity advantage of the family member-power of attorney approach may be short-lived.
3.    Family Members may Decline to Charge for their Services. Although generally entitled to a fee, a family member who serves as your agent or trustee may decide not to charge for their services. A trust company will charge.  But, see the further discussion of fees below under the topic “Experience.”
4.    Desire to have Family Members involved in certain Financial Decisions. The Principal may want to have a family member in charge of some types of financially-related decisions. For example, the principal/settlor may want a family member to review and sign contracts for services (e.g. home health aides), or to make decisions regarding gifts to children and grandchildren. However, the family member can be given this authority as part of a trust company-based plan. A trust company can handle the investments and pay the bills while the family member makes the more personal financial decisions. The family member and trust company can even be named as co-trustees.  So, this perceived advantage may not really exist at all
Discussion of Possible Advantages of Choosing a Trust Company as your Financial Surrogate
1.  Experience. If you need heart surgery you are probably better off seeing a doctor who has performed your surgery hundreds of times before rather than never. It is similar with managing financial matters like investing. Experience helps. A lot. It increases the likelihood that you will get higher investment returns with more safety. This experience factor offsets the perceived advantage of choosing a family member who doesn’t charge for services. For example, you are going to be better off with a trust company that earns you a 4% return and charges a 1% fee (3% net return) than with an inexperienced family member who earns only 1% and does not charge a fee (1% net return).
2. Prudence. Consistent with your goals and directions, a trust company is more likely to try to provide you with a diversified, safe investment portfolio. An inexperienced family member is more likely to choose investments that are either too conservative or too speculative. A trust company’s emphasis on prudence may help protect you from the poor investment returns or even losses that may be incurred by a well-meaning but inexperienced family member.
3. Oversight. In addition to having fiduciary responsibilities, trust companies are subject to government regulatory oversight and audit similar to that imposed on banks. This provides you with an extra measure of protection against improper actions.  
4. Stability. Your family member may get sick or die. A trust company will survive the illness or death of any individual.
5. Conflict Avoidance. A family member who is serving as your agent is often also a potential beneficiary of gifts and other financial rewards from you during lifetime or at your death. This can create a potential conflict of interest for your family member-agent. Even if the agent tries hard to be fair and impartial, other family members may perceive differently. This can create suspicion and emotional strain in your family. These concerns are avoided with a trust company. 
6. Systems. A trust company is going to have systems already in place to ensure that taxes and other bills get paid and other actions are taken in a timely manner. A family member may have to create such systems from scratch and is more likely to make mistakes, like failing to make timely payment of a bill.
7. Reporting. A trust company will provide you with a regular written accounting of all of the actions it takes on your behalf including all investments and payments. Such reporting is unlikely if a family member is administering your finances.
8. Burden Avoidance. Acting as someone’s financial manager is difficult and time consuming. A trust company can relieve family members from these burdens.
9. Impartiality. A trust company can serve as a financially and emotionally neutral third party. It can help limit and resolve family disputes and avoid discord.
10. Confidentiality. A trust company will provide confidentiality for your financial information. Maintaining confidentiality is much more difficult when a family member is handling your finances.  
11. Avoiding Legal Jeopardy for your Family Member. There is a constant flow of cases in the courts involving family members being sued civilly and even criminally for their actions as dad or mom’s agent under powers of attorney. Cases are brought by other family members and by governmental entities. A family member who has failed to keep detailed records of all actions, or made mistakes out of ignorance can be in very real legal jeopardy.  
12. Better Acceptance. Family members who are serving as agents often run into problems having a power of attorney accepted by a bank, brokerage, or other third party. Acceptance of your financial surrogate’s authority is typically improved if the surrogate is a trust company. This allows your transactions to take place more quickly and smoothly.   
Who should you Choose as your Financial Pinch-Hitter: A Family Member or a Trust Company?
As you can see, there are numerous advantages to having a trust company serve as your financial surrogate. Or perhaps a trust company and a family member should be named to serve together. If you have a modest amount of savings and investments (e.g. $50,000 or more) a funded and professionally managed trust may be a good planning solution for you. If you live in Pennsylvania you can talk about it with an elder law attorney at Marshall, Parker and Weber.

Tuesday, October 2, 2018

Who Decides for me if I don't have an advance directive?

Recently I made a late-night visit to a hospital Emergency Room. Fortunately, it wasn’t anything too serious. Upon discharge I was given a lot of paperwork to take home with me. Included was a booklet titled “Advance Directives and Planning.”

I appreciate that my local Emergency Department is giving out information on advance directives, which the booklet defined as “a way for you to tell your health care providers about the care you want to receive – or not receive – should you ever become incompetent.” The booklet then went on to describe different forms of advance directive, including the “living will and the health care power of attorney. 

The booklet contained good information. But as I read it I thought one important question was not discussed: What happens if I don’t have an advance directive or it cannot be found? I’m writing this article to answer that question.

If you are not competent to make medical decisions but do not have an advance directive, or it is unavailable when needed, decisions will nevertheless have to be made. In that event, who will be authorized to make decisions for you and what decisions can they make? Pennsylvania has a law that answers those important questions.

Pennsylvania’s Act 169

In Pennsylvania our law creates a hierarchy of substitute medical decision makers for you.  Act 169 (2006) provides for the passing of decision-making authority to your a “health care representative.” Your representative is authorized to make medical decisions for you if you lack decision making ability and have not appointed a surrogate yourself. This authority arises without court appointment or involvement.

Act 169 conforms with long prevailing medical practice.  If a patient cannot make decisions and has created no advance directive, health care providers traditionally have turned to family members for treatment decisions. A close family member is allowed to exercise “substituted judgment” on behalf of the patient. 

Family members are considered to be in the best position to know what treatment decisions the patient himself would make if competent.  And resort to family decision making for incapacitated patients usually does provide decision makers who are concerned and available.

However, default decision making by family members is not without some problems and risks. Conflicts among family members are possible.  The most knowledgeable surrogate decision maker may not even be a member of the family. And family members may make decisions based upon ignorance, a desire to end family distress, or downright bad faith and ill motive.

Act 169 gives your representative very broad decision-making process authority. He or she (or they) can make virtually any health care decision that you could make yourself if you were competent.  However, a representative may not decline health-care necessary to preserve life unless the patient is in an end-stage medical condition or is permanently unconscious.

Here is the substitute decision-making hierarchy established by Act 169.

(1) Designation by the Principal. An individual of sound mind may, by a signed writing or by personally informing the attending physician or the health care provider, designate one or more individuals to act as health care representative.
(2) Designation by Default. 
 If a higher priority decision maker is not reasonably available, the Act specifies that any member of the following classes, in descending order of priority, who is reasonably available, may act as health care representative:
            (i) The spouse, unless an action for divorce is pending, and the adult children of the principal who are not the children of the spouse.
            (ii) An adult child.
            (iii) A parent.
            (iv) An adult brother or sister.
            (v) An adult grandchild.
            (vi) An adult who has knowledge of the principal’s preferences and values, including, but not 

limited to, religious and moral beliefs, to assess how the principal would make health care decisions
The provisions of Act 169 are, in effect, a default advance directive for those persons who have not created their own. So, in most cases, there should be someone who will have the authority to make medical decisions for you even if you never signed an advance directive, or if the person you named is unavailable. But your Act 169 representative may not be the person you would want. And they may have no idea what kinds of decisions to make for you.

Conversations are Key

It is much better for everyone, patients, providers, and families, if advance directives are in place.  That way you get to choose your substitute decision maker. But even signing a legal advance directive document is not enough. Your treatment is much more likely to be consistent with your wishes if you have talked with your substitute decision maker about your choices for care.  
When you can no longer speak for yourself, the care you will receive will be to a large degree dependent upon the conversations you have had with your family and the people who will be caring for you. Conversations are the key to getting the medical care you want and limiting burdensome and unwanted treatments. You need to have those conversations whether or not you have an advance directive. Do this for your family and not just yourself. Let them know what you want them to do if the time comes that they must speak for you.

Wednesday, September 12, 2018

Financial Power of Attorney and Trust – Understanding the Differences

Someday you may want or need to have someone help you manage your assets and financial life. Two common methods of authorizing someone to step in are the financial power of attorney and the trust. While both of these tools are used to authorize someone to handle financial matters for you they have some significant differences.
The Power of Attorney 
In my experience the financial power of attorney is the method clients use most frequently to appoint a surrogate for financial matters. With a financial power of attorney one person (the “principal”) gives another person (the “agent”) the authority to make decisions for and manage the assets of the principal to the extent authorized in the document. The powers granted can be very broad or very limited. The power can take effect immediately or only in the event of your incapacity.
With a power of attorney legal title to the managed assets remains with the principal.  A power of attorney ceases to operate when you revoke it or when you die. This is a powerful (and potentially dangerous) document that should be carefully drafted by your lawyer to fit your specific circumstances, needs and wishes.
The Trust
With a trust you (the “settlor”) transfer legal title to specific assets to a “trustee” to be managed by the trustee for the benefit of specified persons (the “beneficiaries”). You can name yourself or a family member or a trust company as trustee or co-trustee. You can also name yourself as primary beneficiary and designate other “contingent” beneficiaries in the event of your death.  
There are dozens of different types of trust. Trusts are used to protect assets from nursing home and other care costs, provide for a spendthrift child or one with special needs, save taxes, protect assets from divorce or creditors, obtain professional financial management and so on.
In order to plan for the possible reduced capabilities that can come with aging, many people create a revocable trust which is funded with some or most of their assets. The trustee then manages the trust assets as directed by the settlor. (If the settlor names himself or herself as initial trustee, an alternate trustee can be named to step in when that becomes appropriate.) This type of revocable trust, which becomes effective during the settlor’s lifetime, is sometimes called a “living trust.”
 The revocable trust is commonly used by individuals who want to get professional management of their investments and other assets. The settlor hires a trust company, like a bank trust department, to serve as trustee. Professional management can offer a number of advantages for settlors and their families although that discussion is beyond the scope of this article.  Since the trust is revocable it can be modified by the settlor to change the trustee or the beneficiaries and can even be cancelled entirely.
The power of attorney and the revocable trust are both tools people use to authorize someone else to manage their finances when that becomes desirable. But the trust and power if attorney approaches have a number of important differences that you should discuss with your lawyer.  For example, a trustee can only manage assets that have been legally transferred to the trust. Powers of attorney can cover a broader set of financial issues such as signing personal tax filings and dealing with assets that are not held in trust. So, it may be wise to have a power of attorney even if you are setting up a trust. On the other hand, unlike the power of attorney, a trust can continue to operate after your death. This means that a trust can serve, to some extent, as a will substitute.   
Power of attorney or trust. Which is the best planning option for you and your family? Or should you have both? The answer will depend on your particular individual and family circumstances and goals. One size does not fit all.  Discuss your situation with an experienced elder law attorney to determine the approach that is best for you.

Thursday, July 12, 2018

Accounting for your Actions as Power of Attorney

Serving as Financial Power of Attorney for a parent or friend is serious business. You may see it as just helping mom pay her bills. But the law imposes many significant legal duties on someone who acts as power of attorney for another.   

When you act as someone’s power of attorney the law refers to you as the “agent” and the person for whom you are acting as “the principal.”

In Pennsylvania your duties as agent are specified in the Probate, Estates and Fiduciaries Code. Section 5601.3 of the law (20 Pa. C.S.A. §5601.3) lays out your duties when you are acting as someone’s agent under a power of attorney/ It says the agent must:

(a)  General rule.--Notwithstanding any provision in the power of attorney, an agent that has accepted appointment shall:
(1)  Act in accordance with the principal's reasonable expectations to the extent actually known by the agent and, otherwise, in the principal's best interest.
(2)  Act in good faith.
(3)  Act only within the scope of authority granted in the power of attorney.
(b)  Other duties.--Except as otherwise provided in the power of attorney, an agent that has accepted appointment shall:
(1)  Act loyally for the principal's benefit.
(1.1)  Keep the agent's funds separate from the principal's funds unless:
(i)  the funds were not kept separate as of the date of the execution of the power of attorney; or
(ii)  the principal commingles the funds after the date of the execution of the power of attorney and the agent is the principal's spouse.
(2)  Act so as not to create a conflict of interest that impairs the agent's ability to act impartially in the principal's best interest.
(3)  Act with the care, competence and diligence ordinarily exercised by agents in similar circumstances.
(4)  Keep a record of all receipts, disbursements and transactions made on behalf of the principal.
(5)  Cooperate with a person who has authority to make health care decisions for the principal to carry out the principal's reasonable expectations to the extent actually known by the agent and, otherwise, act in the principal's best interest.
(6)  Attempt to preserve the principal's estate plan, to the extent actually known by the agent, if preserving the plan is consistent with the principal's best interest based on all relevant factors, including:
(i)  The value and nature of the principal's property.
(ii)  The principal's foreseeable obligations and need for maintenance.
(iii)  Minimization of taxes, including income, estate, inheritance, generation-skipping transfer and gift taxes.
(iv)  Eligibility for a benefit, program or assistance under a statute or regulation.

This is an imposing list of responsibilities. Note that one of the requirements is that you must: “Keep a record of all receipts, disbursements and transactions made on behalf of the principal.” This means you should have records that allow you to account for every dollar of income and assets you receive and disbursements you make.” 
Pennsylvania law provides that you can be called to account for your actions. You may have financial liability if  you are unable to adequately demonstrate the propriety of your actions.
So you should maintain careful and complete records of all steps you take on behalf of the principal. It is important that you retain receipts and maintain good records of all checks written, other disbursements made, all liabilities of the principal with which you have involvement or knowledge, all income and other assets you receive, and all actions you take on behalf of the principal. The maintenance of such records minimizes the possibility that you will be exposed to liability. It may make sense to hire an accountant to help you set up the books.
Before you start to act as someone’s power of attorney you should review your duties as set out in Section 5601.3. And be sure you read the power of attorney document and understand your duties and responsibilities before you start to act on behalf of your principal. If there is anything you don’t understand, get legal advice up-front not after the fact.
If ever you are acting as an agent and are not sure you are doing the right thing, seek out professional advice not only to protect the principal, but to protect yourself.

Further Information:

Tuesday, July 3, 2018

Act 53 Expands Pennsylvania Law on Neglect and Abuse of Care Dependent Persons

[The following article was written by Tammy A Weber, Managing Attorney of Marshall, Parker and Weber. Ms. Weber is currently the chair of the  Pennsylvania Bar Association’s Elder Law Section].

Neglect and abuse of care-dependent persons by caretakers is an unfortunate and sad reality.  Act 53 of 2018 expands the scope of the criminal offense of certain neglect or abuse of a care-dependent person by a caretaker as well as the definition of caretaker.  The legislation was introduced May 5, 2017 as HB 1124, was unanimously passed by the House last session, amended by the Senate on June 18, signed in the Senate and in the House after unanimous votes, presented to the Governor on June 22, and signed by him on June 28, 2018.  Act 53 takes effect in 60 days. 

Under the current section 2713 of the Crimes Code, a caretaker commits the offense of neglect of a care-dependent person if the caretaker intentionally, knowingly or recklessly causes bodily injury by failing to provide treatment, care, goods or services necessary to the health, safety or welfare of the care-dependent person or intentionally or knowingly uses physical restraint, chemical restraint or isolates a care-dependent person contrary to law or regulations such that bodily injury results.

According to the legislation, “[t]he General Assembly finds and declares that it is the legislative intent in enacting this act that a distinction should be recognized between intentional acts and negligent acts, particularly when this act is enforced against family members of a care-dependent person who are not trained to provide care.”

Act 53 adds an additional offense definition under 2713(a)(3) in which a caretaker would commit the offense of neglect.  That is, if the caretaker “intentionally, knowingly or recklessly endangers the welfare of a care-dependent person for whom he is responsible by failing to provide treatment, care, goods or services necessary to preserve the health, safety or welfare of the care-dependent person.”  A violation of this would be a second degree misdemeanor, punishable by up to two (2) years’ imprisonment and/or a fine of $5,000.00.  If there is a determination of a course of conduct of this offense, the penalty increases to a third degree felony, punishable by up to seven (7) years’ imprisonment and/or a fine of up to $15,000.00.

The caretaker definition is expanded and now includes “an adult who resides with a care-dependent person and who has a legal duty to provide care or who has voluntarily assumed an obligation to provide care because of a familial relationship, contract or court order” and “an adult who does not reside with a care-dependent person but who has a legal duty to provide care or who has affirmatively assumed a responsibility for care, or who has responsibility by contract or court order.”

The new offense under 2713.1 is triggered by a caretaker who acts with the intention to harass, annoy or alarm a care-dependent person and who:

(i)      strikes, shoves, kicks or otherwise subjects or attempts to subject a care-dependent person to or threatens a care-dependent person with physical contact;
(ii)     engages in a course of conduct or repeatedly commits acts that serve no legitimate purpose;
(iii)     communicates to a care-dependent person any lewd, lascivious, threatening or obscene words, language, drawings or caricatures; or
(iv)    communicates repeatedly with the care-dependent person at extremely inconvenient hours.

If the person is convicted under this new subsection, it would be a first degree misdemeanor, punishable by up to five (5) years’ imprisonment and/or a fine of up to $10,000.00.  Act 53 establishes a third degree felony for a caretaker who commits the offense of stalking against a care-dependent person.

If during an investigation, the Departments of Aging, Health or Human Services have reasonable cause to believe a caretaker has violated this section, a report shall be made immediately to local law enforcement or to the Office of the Attorney General. 

According to 2016 sentencing data from the Pennsylvania Commission on Sentencing, there were 11 convictions under Section 2713, 10 were misdemeanors of the first degree and one was a felony of the first degree.  Nine of those convicted received probation; one received county intermediate punishment and one received a county jail prison sentence.

We are hopeful that more caretakers who commit the above-described acts will be held accountable.

Tammy A. Weber is a Certified Elder Law Attorney and the Managing Attorney of the law firm of Marshall, Parker & Weber, LLC with offices in Williamsport, Wilkes-Barre, Jersey Shore and Scranton. For more information visit or call 1-800-401-4552.

Tuesday, June 26, 2018

My mother has Medicare. Won't that take care of the nursing home bills?

Medicare is the federal health insurance program for people who are 65 or older and certain younger people with disabilities or specific diseases. Payments by Medicare for nursing home care, if any, are only provided on a limited basis, and not for long-term needs.
There are many limitations. For example, Medicare requires a qualifying in-patient hospital stay within 30 days of your nursing home admission. In addition, Medicare requires that the patient is receiving daily skilled care in the nursing home.  Otherwise, you get no payment from Medicare.
 Most people residing in nursing homes are not receiving what Medicare considers to be skilled care. ("skilled care" is care which involves skilled nursing or rehabilitative personnel such as registered nurses, LPNs, or physical therapists).  Because of these restrictions, most people who enter a nursing home don't get any Medicare coverage at all.
And even if you do qualify for Medicare, it will only pay for a limited period.  As long as you meet the prior hospitalization and skilled care requirements, Medicare will pay in full for the first twenty days.  After that, if you continue to meet the skilled care requirement, you must pay the first $167.50 a day [in 2018] and Medicare will pay the rest of the daily bill.  (Many people have Medicare Supplement or Managed Care coverage that will pay the initial $167.50 for them).
It turns out that Medicaid (not Medicare) is the program that covers most (62%) of nursing home residents. Consult with an experienced elder law attorney to learn how you can qualify for Medicaid payment of nursing home or home care costs.
Click here for information from on the limitations of Medicare coverage of nursing home costs.

Saturday, May 19, 2018

Is a Personal Care Home the Same as a Nursing Home?

[This article was written by Elizabeth A. White, CELA* an attorney with Marshall, Parker and Weber].
           Is a personal care home the same as a nursing home? This is a common question for families looking into care options for themselves or their loved ones. The answer is, no, although sometimes the two get confused.
           Personal care homes are residences that provide seniors support with instrumental activities of daily living and/or activities of daily living. Assistance with instrumental activities of daily living can include help with housekeeping and laundry, medication management, shopping and meal preparation, using the telephone, and making appointments. Examples of activities of daily living that personal care homes may provide assistance with include eating, toileting, personal hygiene, and bathing. Each personal care home can provide a description of what services they provide to their senior residents. Usually there are more and more varied activities available to seniors in personal care homes than to those in nursing homes, because personal care residents are better able to participate than those living in a nursing home setting.
           Although nursing homes also provide assistance with many of the activities listed above, seniors needs in a personal care home do not meet the higher level of services provided in a nursing home. While seniors in personal care home environments need some help with care, this help can successfully be provided in a more community like setting.
           Personal care homes are licensed by the Department of Human Services to protect the health, safety, and well being of the residents. There is staff available at personal care homes at all times in case of emergency, but not necessarily medical staff. Personal care homes are not reimbursed by Medicaid, and therefore you cannot apply for Medicaid benefits to pay for living in a personal care home. Options for payment include private pay and Veterans benefits. Generally, personal care home level of care is less expensive than nursing home level of care.
           Nursing homes provide a higher level of care than personal care homes. Like personal care homes, nursing homes are also licensed and inspected, but under a different set of standards. Skilled nursing and certain medical treatments are provided in nursing homes and medical supervision is available 24/7. Nursing homes do accept third party reimbursement though benefit programs such as Medicare and Medicaid.
           It is difficult decision for a senior to move from their home. Well intentioned children or family members often think that their parent or loved one needs to move from living independently to a nursing home. A personal care home may be a good in-between to provide the required services to the senior, but allow the senior more autonomy than they may have in a nursing home setting.  Detailed assessments of a senior’s assistance needs can help to determine the best place for a senior to thrive.
           ____                                                                                      __________________                                                                                                                                                 *Certified Elder Law Attorney by the National Elder Law Foundation under authorization of the Pennsylvania Supreme Court

Sunday, May 6, 2018

The Big Financial Danger Facing Older Adults

Recently I wrote about how death taxes impact Pennsylvania residents and their heirs. The conclusion was that for most of us, federal death taxes are not an issue. And Pennsylvania’s inheritance tax can take a modest bite from our accumulated wealth. [See my recent article Death Taxes For Pennsylvania Residents]
For many Pennsylvania seniors a much bigger risk to their goals of lifetime financial and personal security and passing along an inheritance is the possibility that their life savings will be used up paying for their care before death. Most seniors require care during an extended period of time prior to their deaths. The cost of that care, whether it is received at home, in assisted living, or in a nursing home, can quickly deplete a modest estate. The Pennsylvania Department of Human Services recently announced that the average cost of a private room in a Pennsylvania nursing home is $330 a day. That’s over $120,000 a year!
Before my father passed away some years ago he spent 2 ½ years in a nursing home. At the current rates his 2 ½ year stay in a nursing home would have cost over a quarter of a million dollars. That is enough to wipe out the savings of most Pennsylvania seniors. 
So, for most seniors, it’s the potential cost of long term care rather than death taxes that should be the focus of their estate planning. Expert long-term care planning with the help of an elder law expert can help ensure that seniors will be able to:
    * remain financially independent,
    * maintain control,
    * maintaining privacy,
    * involve family members without burdening them,
    * maximize available government programs, and
    * leave an inheritance.
It is possible to put together a plan that will reduce the risk of long-term care costs.
 While last minute planning is possible the most effective planning is accomplished by those who plan well in advance of their need for long-term care. Seniors in their 60s and 70s should be planning now to protect themselves and their families from financial devastation in their 80s and 90s.
 As President John Kennedy said: “The time to repair the roof is when the sun is shining.” John F. Kennedy, Annual Message to the Congress on the State of the Union. January 11, 1962
Pennsylvania seniors and their families can get expert planning guidance at any one of the four offices (Williamsport, Wilkes-Barre, Scranton and Jersey Shore) of my law firm, Marshall, Parker and Weber. Visit our website or call us toll free at 800-401-4552 for more information.

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