Elder Law | Begin the Begin

Injunction Granted Against CMS’ Rule Prohibiting Arbitration Clauses and D.C. Death with Dignity Act Passes

November 17, 2016

law-books An update regarding the Centers for Medicare and Medicaid Services (“CMS”) new rule banning the use of binding pre-dispute arbitration agreement by nursing homes that accept Medicare and Medicaid patients. As was expected, the nursing home industry has fought back and filed suit in the Northern District of Mississippi. In a 40 page Order, a Federal District Court Judge has granted the preliminary injunction requested by the American Health Care Association and several nursing homes. In the opinion, the Judge recognized the position many families find themselves in cases of abuse and neglect when dealing with the nursing home, but indicated that CMS may have overstepped its authority in issuing the rule, and therefore, enjoined CMS from enforcing the rule until the courts could resolve the issue or Congress passed legislation. Therefore, nursing homes will continue to be able to include such provisions in their contracts. Furthermore, with the election in the rear view mirror, only time will tell what will become of this rule. #elderlaw #elderabuse #nursinghome #arbitrationbanned

Also, a brief update that the Death with Dignity Act in the District of Columbia has cleared the last hurdle before going to Mayor Muriel Bowser. The vote of the D.C. Council was again 11-2 and was passed with an amendment requiring some level of annual reporting by the Department of Health. The Act is expected to become law, but Congress still has oversight and the Act may still be overturned. However, at this juncture D.C. joins Oregon, Washington, Vermont, California and Colorado in passing such legislation. As has been expressed before, the passage of this Act is a reminder to get your plan in place. #endoflife #estateplanning #advancedirective #livingwill @deathwdignity @bgnthebgn

District of Columbia Passes Death with Dignity Act

November 10, 2016

flowers-4 As had been previously discussed, the District of Columbia was considering passing its form of the Death with Dignity Act (the “Act”) that is modeled after the Oregon law. The D.C. Council, in a 11 to 2 decision, voted in favor of the bill. A final vote must be held before the end of the year. Mayor Muriel E. Bowser has the ability to veto the bill, but in recent comments she indicated that she would not veto the bill and it would become law. Given D.C.’s status of not being a state, Congress will still have the ability to review and overturn the bill should it become law.

The Act allows a terminally ill individual who has received a prognosis of less than six months to request and receive medication that would end life. The individual must make two oral requests separated by at least 15 days to his or her physician. A written request must also be made before the second oral request is made and at least 48 hours must pass before the medication is received. The written request must be witnessed by two individuals who can attest that the decision to end life is voluntary. One of the witnesses has to be entirely independent, that is, not related or subordinate in some fashion. The individual has to be able to take the medication on their own without any help from medical professionals, caretakers, home healthcare aides, family or friends. Finally, the individual must be a resident of the District of Columbia. If the bill survives the second vote by the D.C. Council and Congressional review, D.C. will join Oregon, Washington, Vermont and California in enacting a death with dignity law. #endoflife #estateplanning #advancedirective #livingwill @deathwidignity @bgnthebgn

2017 Estate and Gift Tax Exemptions

November 3, 2016

money-2 The IRS recently announced the estate and gift exemption levels for 2017 and they continue to increase as per legislation passed in January 2013. The applicable exclusion amount from Federal estate tax will increase to $5.49 million per person allowing a married couple to shelter $10.98 million from Federal estate tax, the rate for which is currently set at 40%. The lifetime exemption from gift tax remains coupled with the exemption from Federal estate tax, and therefore, this exemption will also increase to $5.49 million per person. The annual gift exclusion amount will remain at $14,000 per person. Virginia continues to not impose a state level estate tax. Maryland’s exemption from estate tax will increase to $3 million while the District of Columbia’s exemption will remain at $1 million until certain revenue surplus targets are met, which may not be until 2018, at which point the exemption will increase to $2 million. As a reminder, proposed regulations issued in August will significantly reduce the availability of valuation discounting on certain transfers of interests held in closely held or family owned businesses, and therefore, taking advantage of 2016 exemption levels is critical for some individuals, business owners and families.

For seniors and those with disabilities, a cost-of-living adjustment (COLA) for Social Security and Social Security Income (“SSI”) will increase monthly benefits by 0.3%. In addition, the cap on the amount of earnings subject to payroll tax will increase to $127,200. Finally, the tax brackets, standard deductions, Pease and PEP limitations, kiddie tax and other credit and deduction levels for 2017 were announced. #estateplanning #estatetax #gifttax #annualgift #exemptionlimits #COLA2017 @bgnthebgn

The ABLE Act and Nursing Home Arbitration Provisions – Update

October 27, 2016

A photo by Jonathan Simcoe. unsplash.com/photos/HFug8fv_1jw An earlier article discussed the ABLE Act that was signed into law in 2014, which permits disabled individuals to create savings accounts and set aside monies for their needs without disqualifying them from public benefits. Three different pieces of legislation were then proposed in the House to modify some of the provisions of the ABLE Act. Corresponding legislation was introduced in the Senate and referred to the U.S. Senate Committee on Finance. The Senate Finance Committee has approved two of the bills, but the third bill, which would raise the age of eligibility to 46 from 26, was not discussed. Many groups are upset that the ABLE Age Adjustment Act was omitted and may oppose all of the bills in an effort to have the age limitation bill revisited. The bills still need to wind their way through the procedural process, but certainly there are various negotiations occurring behind the scenes and hopefully resolution is on the horizon. In the meantime, implementation of the ABLE Act is in full force around the country. #specialneeds #ABLEact #estateplanning @bgnthebgn

In addition, as was predicted, a battle has erupted between the nursing home industry and the Centers for Medicare and Medicaid Services (“CMS”) over the final rule issued by CMS that bans the use of binding pre-dispute arbitration agreements by nursing homes that accept Medicare and Medicaid patients. The American Health Care Association along with four long-term care providers filed suit against the Health and Human Services Secretary and CMS arguing that the agencies overstepped their authority in issuing the rule. They are seeking declaratory and injunctive relief to prevent the rule from going into effect on November 28th. Many will follow this case closely as the final rule, as issued, will have quite the impact on the nursing home industry, the patients and their families if it takes effect. Thus, stay tuned for further updates as the lawsuit moves forward. #elderlaw #elderabuse #nursinghome #arbitrationbanned @bgnthebgn

District of Columbia Considers Death with Dignity Act

October 20, 2016

flowers-3 The District of Columbia is considering enacting the Death with Dignity Act (the “Act”) that would allow terminally ill individuals with six months or less to live the ability to receive a lethal dose of medication and end their life. Several procedural steps lie ahead for the Act now that the D.C. Council has voted to place the Act on the legislative agenda for an upcoming meeting. However, it is unclear whether there is sufficient support for the Act to be made into law. Arguments in favor of the Act revolve around giving an individual control over how and when they choose to die, but advocates against the Act are concerned that individuals’ lives will be prematurely terminated.

The issue once again raises the importance of planning. Planning for incapacity and planning for death. Both sides of the death with dignity argument seem to have a common thread involving control, which is exactly what planning gives you. Planning gives you control over who is in charge of your medical decisions when you are not able to make those decisions. Planning gives you control of whether you want life-prolonging procedures when doctors have certified that nothing more can be done except provide comfort care. Planning gives you control of how you want to be remembered in those final moments. Planning gives your family members peace of mind to know that they are truly abiding by your wishes, which in turn may make them feel as if they are in control of the situation. Planning gives your family time to prepare for a life without you in it and to try to control the emotional turmoil that realization creates. Ultimately, planning is a gift to yourself to know that that particular item on a lengthy checklist can be crossed off so that you can enjoy life knowing that your end of life is in the best order you can create. So, regardless of which side of the death with dignity argument you fall, think of the planning that can be done to control your death with dignity. #endoflife #estateplanning #advancedirective #livingwill @deathwdignity @NHDD @bgnthebgn

Use of Pre-Dispute Arbitration Agreements Restricted in Nursing Home Admissions Agreements

October 13, 2016

man-in-coffee-house The Centers for Medicare and Medicaid Services (“CMS”) recently issued a final rule banning the use of binding pre-dispute arbitration agreements by nursing homes that accept Medicare and Medicaid patients. Such arbitration clauses are typically found in the admissions agreements between a new resident (or their family) and the nursing home, but are very often overlooked. The result of this new rule is that families who have an issue with a nursing home regarding care, abuse, and the like, can now sue in court to have their case heard versus having to go through a binding arbitration process.

The original proposed rule only required nursing homes to explain the arbitration agreement to new residents and obtain an acknowledgement that they understood. The final rule is the result of many comments on the proposed rule that favored an outright ban on such arbitration agreements. The nursing home industry has stated that the arbitration agreements have kept costs down and the new rule will undoubtedly increase costs and force closures of some facilities. Moreover, there is an argument that CMS has overstepped its authority in issuing such a rule and we may see the nursing home industry fight the implementation of the rule currently scheduled to take effect on November 28th. The new rule will only apply to future admissions agreements and not to existing contracts, but stay tuned to see whether a battle erupts between the nursing home industry and CMS. #elderlaw #elderabuse #nursinghome #arbitrationbanned @bgnthebgn

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