September, 2016 | Begin the Begin

Special Needs Trust Fairness and Medicaid Improvement Act Passes House

September 29, 2016

On September 20, 2016, the Special Needs Trust Fairness and Medicaid Improvement Act (H.R. 670) (the “Act”) passed the House of Representatives. This bill corrects an omission in Section 1917(d)(4)(A) of the Social Security Act created in 1993 when first-party or self-settled special needs trusts were first recognized by Congress. Under 42 U.S.C. 1396p(d)(4)(A), an individual under age 65 who is disabled, may have assets, which are deemed to be theirs (such as assets received from an inheritance or as a result of a personal injury settlement), set aside for their benefit in a trust that is created by a parent, grandparent, legal guardian or the court. Noticeably absent from that list was the disabled individual being permitted to set up the trust themselves. Over time what has been realized is that a disabled individual does not always lack capacity to create a trust, so the Act amends 42 U.S.C. 1396(d)(4)(A) by inserting the words “the individual” into the list of people who can establish this type of trust.

Last year, the Senate passed the Special Needs Trust Fairness Act of 2015 (S. 349), which made the same change. Unfortunately, since these new provisions were part of separate pieces of legislation, the provisions cannot yet be signed into law. Various supporters of the new provisions are now working with the Senate to ensure the provisions ultimately do become law. But what is promising for many is that the provisions of the Act, once signed into law, will do away with the need for court involvement every time a disabled adult wants to create a special needs trust and will instead allow the disabled adult to have some control in his or her public benefits planning. #specialneedstrusts #selfsettledtrusts #estateplanning @bgnthebgn

Proposed Legislation Addresses Thorsen Case

September 22, 2016

books An earlier article talked about the Virginia Supreme Court case of Thorsen, et al. vs. Richmond Society for the Prevention of Cruelty to Animals (RSPCA) that was decided in June of this year. Thorsen involved an error in the drafting of a Last Will and Testament that resulted in the intended beneficiaries receiving a fraction of what they would have otherwise received. Those intended beneficiaries sued for legal malpractice. The Virginia Supreme Court found that a third-party beneficiary who is ‘clearly and definitely’ the intended beneficiary of a contract (even one where no written agreement exists) may sue to enforce its rights derived from the contract even though the third-party beneficiary may not know it is a beneficiary for many years (as is the case in most estate planning documents). The impact of Thorsen on individual clients and estate planning attorneys was wide spread, although clients may not have directly been aware that they were being impacted.

Now, as was suggested would be the case, proposed legislation will be presented to the Virginia General Assembly in the 2017 Session that will look to address the concerns raised as of a result of the Thorsen case. In particular, a proposed amendment to Section 64.2-520 of the Virginia Code would clarify that an action for damages based on legal malpractice involving an estate plan “shall accrue upon completion of the representation in which the malpractice occurred.” Furthermore, only the individual client, his or her legal representative (in the case of incapacity) or the personal representative or trustee (in the case of death) can bring the action. The action for damages must be brought “within five years after the cause of action accrues”. The proposed legislation, if passed, would not take effect until July 1, 2017.

Furthermore, a new statute (Section 64.2-404.1) is being proposed that would allow for the court to reform a Last Will and Testament to reflect the individual client’s intentions, provided clear and convincing evidence of intent are presented and the terms were impacted by a mistake of fact or law. This new statute would also permit reformation of a Last Will and Testament to achieve an individual client’s tax objectives. The reformation action must be filed within one year of date of death and notice must be provided to all interested parties. The proposed legislation, if passed, would take effect on July 1, 2017.

Ultimately, the proposed legislation is meant to apply similar rules to wills that are currently applied to trusts under the Uniform Trust Code. The expectation is that by passing these statutes, the overall chilling impact the Thorsen case had on the estate planning process is overcome, and attorneys and clients can return to having an attorney-client relationship without having to watch out for disgruntled beneficiaries. The estate planning process can be difficult enough for individuals to begin without having both the attorney and the client leery of unintended consequences. However, at this juncture, only time will tell whether the General Assembly passes the legislation. #estateplanning #estateadministration #Thorsen @bgnthebgn

Changes to Maryland Laws Impacting Estate Planning and Elder Law

September 15, 2016

courthouse On October 1st (unless otherwise noted) a number of new laws will take effect in Maryland that may have an impact on you or those with whom you work. Below is a summary of a few key pieces of legislation of which you should be aware.

HB 507 – Maryland Fiduciary Access to Digital Assets Act: This Act authorizes a person with digital assets to direct the disclosure of information relating to those assets in certain circumstances. A previous Article provides the details.

HB 541 – Upon divorce or annulment, certain provisions of a revocable trust that relate to the spouse will be revoked. This new statute is comparable to what has been established for wills under Section 4-105(4) of the Estates and Trust Article of the Annotated Code of Maryland.

HB 887 – Section 14.5-303 of the Estates and Trusts Article of the Annotated Code of Maryland is amended to add a new subsection (7) allowing for virtual representation of a minor, incapacitated, unborn or unknown individual, by a grandparent or more remote ancestor, provided there is no conflict of interest. In addition, Section 14.5-304 is added to the Estates and Trusts Article permitting anyone to represent a minor, incapacitated, unborn or unknown individual, provided there is a ‘substantially identical interest’ and no conflict of interest exists. The purpose is to avoid having to appoint a guardian ad litem in a court proceeding involving trusts.

HB 888 – The new statute will allow trustees and beneficiaries to enter into a binding settlement agreement relating to the administration of a trust without having to involve the court. The actions that can be agreed upon within a non-judicial settlement agreement by the trustees and beneficiaries must be those that a court could have approved. For example, a non-judicial settlement agreement could address interpretation or construction of terms of the trust, approval of an accounting or trustee succession.

HB 431 – Requires the establishment of the Maryland ABLE Program to allow for savings accounts similar to 529 Plan accounts to be created for a person under a disability. This was effective as of July 1, 2016. Two previous articles discussed the ABLE Program.

HB 718 – Asset Recovery for Exploited Seniors Act: Allows for a civil action to be brought for damages against a person who knowingly and willfully takes from another, who is at least 68 years old, his or her assets. A criminal conviction is not necessary before bringing the civil action.

HB 1385 – If an individual does not have a health care directive, ‘any authentic expression’ made by such person, who is deemed to be competent, regarding his or her wishes and desires about their health care ‘shall be considered.’

#elderlaw #estateplanning #healthcare #Marylandlaw #incapacityplanning #specialneeds #digitalassets @bgnthebgn

National Grandparents Day

September 8, 2016

generations-hands Since 1978 the United States has celebrated grandparents on National Grandparents Day. The day falls on the first Sunday after Labor Day. This year, National Grandparents Day will be celebrated on September 11th, a day when many will pause to reflect on the terrible and tragic events that occurred 15 years ago in New York, Pennsylvania and outside Washington, D.C. A day when grandparents may have been taken from their families or when grandparents became the solid foundation for those who lost parents. Thus, this year in particular National Grandparents Day allows us to remember the impact grandparents may have had in our lives, but also reminds us the time marches on, and that the memories and stories that our elders have will be lost unless captured by the next generation. Those memories and stories may help plan or shape our journey. So in recognizing grandparents on National Grandparents Day, it is a chance to bring the generations together to build a legacy. What is it that you want your legacy to include? #GrandparentsDay #Buildalegacy #estateplanning #September11th #NeverForget @bgnthebgn

Facing a Tough Diagnosis – Four Lessons of Gene Wilder

September 1, 2016

flowers-2 With Gene Wilder’s death, the family released a statement that revealed to the world that Gene Wilder had died due to complications from Alzheimer’s disease. The family also stated that Wilder had not wanted to reveal his diagnosis earlier and risk “one less smile in the world.” In releasing the statement as they did, the family has provided us with a few valuable lessons about planning.

What should ‘the public’ know? From the statement, it seems clear that in receiving an irreversible diagnosis, Wilder’s family talked about how to handle the news both publicly and privately. Families that have received terrible news of a terminal or debilitating illness are aware of the difficulties surrounding such information. Questions about who should be notified are common as well as discussion regarding how much information should be disclosed. In addition, the ‘public’ for each person is different. This means for some only immediate family members while friends, neighbors and colleagues have a less detailed picture. Immediate family may include certain close friends and may very specifically exclude others. What about professional advisors? How much information should they have? Each of us has various circles and those circles have to be evaluated to determine who should know and what should be known, which is important to clarify to avoid confusion in the dissemination of information.
What is the care plan? Certainly from a medical perspective there is a prognosis and then treatment plans that are outlined with various degrees of outcomes and complications. But what about the plan to care for minor children, if necessary? Or a caregiver spouse or partner? Who are or will be the caregivers? Has respite care been discussed for those caregivers? Are there modifications to a residence that are needed? What about access to financial information? Should such access be limited or restricted? Has there been discussion about involving a care manager? These are just a few of the questions to consider to determining the plan of action.
Your final moments. Are friends and family present? Is music played? Is a spiritual leader, such as a priest, rabbi or pastor present? Will the final moments be at home, wherever that may be at the time? The final moments are not only for the person dying, but the family and friends who are part of that passing. Discussions such as these are key in determining end of life care.
How to be remembered? An earlier article outlined six questions to ask surrounding the details of how you want to be remembered. Providing some information about wishes and desires regarding a funeral or service is a relief for family members because decision-making at this difficult is clouded by emotions and shouldn’t be overshadowed with the thought of “Is this really what was wanted?”

Thus, as many of us remember Gene Wilder and the various roles he played in the movies, we can also pause to reflect on how we would face such tough diagnosis with our family, and when the time comes, be prepared to have the important conversations. #GeneWilder #incapacityplanning #estateplanning #advancemedicaldirective #livingwill @bgnthebgn