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Does the high-profile U.S. Supreme Court opinion in Windsor v. US related to the Defense of Marriage Act (DOMA) affect elder law issues?
It might.
As discussed in a new release from a long-term care insurance think tank, the Supreme Court’s ruling will have an effect on same sex couples and Medicaid benefits. As noted in detail elsewhere, because of the DOMA decision, same sex couples lawfully married in their own state (like New York) are now treated as married by the federal government.
When someone passes away, the basic principles of settling the estate seem straightforward: collect assets, pay off debts, and distribute what is remaining per the deceased’s wishes. While that cursory sketch appears easy enough, in practice, dealing with these matters can take years, have a significant cost, and result in prolonged disagreement, destroyed relationships, and even legal battles.
As always, a high-profile celebrity example offers a helpful look at how it plays out in the real world.
The Las Vegas Sun recently reported on the latest in the prolonged battle related to famed pop star Michael Jackson’s estate. The singer died over four year ago, but from most reports the matter is nowhere near being resolved. For one there, there is still pending litigation related to the billion-dollar tour production Jackson was set to complete just before his passing.
If you read a bit about estate planning you may come across the term “Per Stirpes.” It is an awkward phrase to say, and there is little reason to use it outside the context of inheritance planning. It comes up when one lays out their inheritance designations, perhaps with a phrase like, “Fifty percent of the estate to Bob and Tom per stirpes.” Similarly, it may be written as “by representation.” This usually refers to the same thing.
So what is it? The short answer: Per Stirpes is Latin for “by the roots.” But that translation doesn’t help much. What it means in estate planning terms is that if the beneficiary dies then their descendants will get their share of the estate.
For example, say that the estate is worth $100,000. Per the terms of the will 50% of the estate should be split between Bob and Tom, with each getting $25,000. But what if Tom is not alive when he is set to receive that inheritance? Does Bob get his share instead? If the will stated that Bob and Tom were to receive their share on a per stirpes basis then the answer is No. Bob would not get the extra share. Instead, that share would go to Tom’s descendants–his own children. If Tom had one child, that child would get $25,000. If he had two children, then those children would split the $25,000.
Elder financial exploitation is often one of those problems that community members believe only happens to “other people.” When reading stories about seniors falling for scams or being exploited by caregivers it is easy to view them as one-of-a-kind examples. But the truth is the exact opposite: elder financial exploitation is referred to by observers as an epidemic. It is prudent for all New York families to take preventative steps to minimize the chance of a loved one falling victim.
Misplaced Trust
One story that made headlines last week is a reminder of how scammers eager to take advantage of seniors can cause harm from anywhere. According to a report from NBC, the scam artist began by knocking on the senior’s door in a panic. The man pretended to be distraught, and was in tears while falsely claiming that his own parents were just killed in an automobile accident.
Whether one is married or single is obviously a vital factor that impacts elder law and estate planning. Of course, that placed married New York same-sex couple in a strange position, as they were married under New York law, but single under federal law. As mentioned yesterday,with the U.S. Supreme Court decision in Windsor v. U.S., the federal law which deemed those couples unmarried is now gone. This will hopefully lead to a far more straightforward picture for those couples.
Marriage Rights & Obligations
Yesterday, The Globe published a story that delved a little more deeply into the specific rights which will now be afforded to married same-sex couples. The article is worth a look to get a better idea of some of the practical effects of yesterday’s ruling–beyond the obvious cultural and social effect of finally eliminating the stigma.
You’ve built a nest egg after years of consistent work, prudent planning, strategic risk, a lot of focus, and a bit of luck. You want to retire peacefully and provide a legacy that will hopefully secure some degree of wealth for you family for generations to come.
But what are the odds of wealth making it decades (or even centuries) after you are gone? If history is any indication, most inheritances won’t make it long at all. Wealth surviving into the third generation only happens in one out of ten cases. As a recent Senior Independent story on the subject reminded, this principles takes the form of an often-used refrain: “Shirtsleeves to shirtsleeves in three generations.”
The story points out that over the course of their lifetimes about two-thirds of Baby Boomers in the United States will inherit about $7.6 trillion. Yet, those same individuals will lose about 70% of that wealth before passing any of it on to their own children or other relatives.
In an effort to more efficiently use state funds, over the past few years the New York Medicaid program has been closely analyzed by state groups looking to root out fraud. Those investigations have returned hundreds of millions of dollars back into the programs following problematic practices at New York nursing homes, senior day care facilities, and many other settings.
While rooting out excess and fraud is a net positive, one must not forget the real lives that are affected any time that changes are demanded by program officials. Many New York seniors are in delicate situations, and any time that a nursing home, at-home provider, or other entity is no longer able to operate as a result of bad practices, many seniors struggle to deal with caregiving changes.
Finding Good Elderly Home Care in New York
One of the most common questions that local families ask related to estate planning and assets protection involve gifts: Whether to give them, when to give, how much, and in what form.
Of course, no two situations are identical, and so it is impossible to list a set of rules regarding when and how large-scale gifting should be done in every case. However, a Forbes article this week on the topic provides a good starting point for New York families to familiarize themselves with the basic concept and major issues to consider.
Helping Children Now
Long-term care is big business. For many years now, companies that work in these fields have grown in size, scope, and influence, emerging as powerful entities making significant profits. There is nothing inherently good or bad about the changing nature of the industry so long quality, affordable options exist for seniors and their families.
Yet, in recent years observers have noticed that the increase in need for senior care services creates a natural business opportunity which are leading to some questionable practices. Take, for example, the growth of “pop up” senior centers in New York. The Brooklyn Eagle recently reported on these facilities and the scrutiny that is being directed their way.
City Council Questioning
The New York Medicaid program has been making many headlines in recent months. Implementation of the Affordable Care Act and efforts to control state spending all have significant implications for the program. Interestingly, these developments have opposing outcomes. As the Affordable Care Act provisions are unrolled the program will be expanded, offering services to more New Yorkers. Conversely, the state’s push to control costs and root out fraud limits services in a few ways, sometimes impacting local seniors and their families.
Fraud Repayment From Estate
On the fraud issue, the NY Daily News reported last week on a settlement reached between the Attorney General and the estate of a former nursing home owner.
New York Estate Planning & Elder Law Blog