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Medicaid denial

Is There an Appeal Right for Denial to Reopen a Medicaid Application?

Is There an Appeal Right for Denial to Reopen a Medicaid Application?

SEPTEMBER 16, 2021

Is There an Appeal Right for Denial to Reopen a Medicaid Application? Due process, as guaranteed by the 5th Amendment, states that the federal government must treat each person fairly and apply the same rules to everyone. Due process applies to the states via the 14th Amendment. Procedural due process dictates that there must be a procedure for processing claims and each person is entitled to the same consideration at each step of the procedure. Certain steps must be followed in each case, regardless of who the claimant is.

Medicaid applications must be processed in a certain manner and applicants are afforded specific rights. Federal law requires:

  • that the state agency grants an opportunity for fair hearing to an individual who believes the state has taken incorrect action or the individual has had an application denied (see 42 C.F.R. § 431.220(a));
  • that the state provides notice of any required hearing (see 42 C.F.R. § 431.206(b)); and
  • that “[a] clear statement of the specific reasons supporting the intended action” be given in the event of adverse action (see 42 C.F.R. § 431.206(c)(2) and 42 C.F.R. § 431.210(b)).

But when does the applicant have appeal rights? Is it every time the state issues a notice? This issue was recently litigated in Illinois.

In this case, Alberta resided in a nursing home and filed an application for Medicaid benefits. The state requested certain documentation, but Alberta never supplied it. As a consequence, Alberta’s application was denied. Five days after the denial, Alberta requested that the state reopen the case and she submitted the appropriate documentation. The state denied Alberta’s request to reopen the case; Alberta filed suit.

The fair hearing determination was that Alberta was not entitled to an appeal on the notice to not reopen the case. Alberta appealed; the trial court affirmed the state’s decision. Alberta again appealed, arguing that the denial didn’t align with the requirements under the law and denied her due process.

Alberta’s first argument was that the denial to reopen the Medicaid application case did not comply with federal requirements. Alberta argued that the denial notice did not give a “clear statement” explaining why her application was denied. Even though the appeals court ruled that Alberta forfeited the argument because it was not brought up at earlier proceedings, the court noted that her argument lacked merit. The appeals court explained that the clear statement was required so that the applicant can verify the basis of the agency’s decision and then make an informed decision regarding whether to file an appeal. In this case, even though a clear statement was not given, Alberta was otherwise adequately informed why her application was denied. Prior correspondence to her stated exactly what was needed and informed Alberta that if the required documentation was not given that her application would be denied. Indeed, Alberta did supply the information after the deadline, thus indicating she knew what was required.

Albert’s second argument was that the Medicaid denial denied her due process. Alberta argued that she should have been able to appeal the denial to reopen her case, as it was a disposition of her application. The state argued that the denial to reopen the case was not a new decision. Rather, it was “a refusal to make a new determination.” The state cited Your Home Visiting Nurse Services, Inc. v. Shalala, 525 U.S. 449 (1999) and the court found this case applicable and persuasive.

In the end, the appeals court found that a decision not to reopen a case is not a disposition of the application or a subsequent decision regarding the applicant’s eligibility. Instead, it is a determination that the applicant failed to meet the stated requirements to process the application. Thus, there are no appeal rights to the decision not to reopen a case and due process was not denied for failing to give such appeal rights. The court stated: “the relevant authority requiring ‘notice of disposition of the application’ and a hearing following a ‘subsequent decision regarding eligibility’ does not define the scope of judicial review but only the scope of review the Department is required to provide.” (See 42 C.F.R. § 431.220(a)(1)(i).)

Read more related articles at:

What to Do When Denied Medicaid: Appeals, Reversals & Re-Applying

When Medicaid or SSI Benefits are Denied or Terminated – Now What?

Also, read one of our previous Blogs at:

Medicaid “Crisis” Planning

Click here to check out our On Demand Video about Estate Planning.



Summary of the Biden Administration’s PROPOSED  Federal Tax Changes. On Monday, September 13, a tax bill was sent to the House Ways and Means Committee. Notably, there was no proposal to kill basis step up or to repeal the SALT deduction limitation.  Here is a summary of the Biden Administration’s proposed federal tax changes:

    1. The flat corporate income tax is replaced with a graduated rate structure. The rates are:
      1. 18% on the first $400,000 of income;
      2. 21% on income up to $5 million; and
      3. 5% on income thereafter.
    2. The graduated rate phases out for corporations making more than $10,000,000.
    3. Personal services corporations are not eligible for graduated rates.
    1. Increase in Top Marginal Individual Income Tax
      1. The top marginal individual income tax is increased 39.6%. This rate applies to:
        • Married individuals filing jointly with taxable income over $450,000;
        • Heads of households with taxable income over $425,000;
        • Unmarried individuals with taxable income over $400,000;
        • Married individuals filing separate returns with taxable income over $225,000; and
        • Estates and trusts with taxable income over $12,500.
      2. The amendments made by this section apply to taxable years beginning after December 31, 2021.
    2. Increase in Capital Gains Rate for Certain High-Income Individuals
      1. The capital gains rate is increased to 25%.
      2. The increase applies to taxable years ending after the date of introduction of amended statute.
        • The transition rule provides that the preexisting statutory rate of 20% continues to apply to gains and losses for the portion of the taxable year prior to the date of introduction.
        • Gains recognized later  in the same taxable year that arise from transactions entered before the date of introduction pursuant to a written binding contract are treated as occurring prior to the date of
      3. Net Investment Income Tax to Trade or Business Income of Certain High Income Individuals
        1. Expands the net investment income tax to cover net investment income derived in the ordinary course of a trade or business for taxpayers with greater than $400,000 in taxable income (single filer) or $500,000 (joint filer), as well as for trusts and
        2. The provision clarifies that this tax is not assessed on wages on which FICA is already The amendments made by this section apply to taxable years beginning after December 31, 2021.
      4. Limitation on Deduction of Qualified Business Income for Certain High Income Individuals
        1. Amends section 199A by setting the maximum allowable deduction at $500,000 in the case of a joint return, $400,000 for an individual return, $250,000 for a married individual filing a separate return, and $10,000 for a trust or estate.
        2. The amendments made by this section apply to taxable years beginning after December 31, 2021.
      5. Limitations on Excess Business Losses of Noncorporate Taxpayers
        1. Permanently disallow excess business losses (i.e., net business deductions more than business income) for non-corporate taxpayers.
        2. The provision allows taxpayers whose losses are disallowed to carry those losses forward to the next succeeding taxable year.
        3. This section applies to taxable years beginning after December 31, 2021.
      6. Surcharge on High Income Individuals, Trusts, and Estates
        1. Imposes a tax of 3% of a taxpayer’s modified adjusted gross income in excess of $5,000,000 (or in excess of $2,500,000 for a married individual filing separately).
        2. Modified adjusted gross income means adjusted gross income reduced by any deduction allowed for investment interest.
        3. Applies to taxable years beginning after December 31, 2021.
    1. Reduction of unified credit.
      1. The unified credit against estate and gift taxes are reduced to the 2010 level of $5,000,000 per individual, indexed for
      2. Effective for estates after December 31, 2022.
    2. Increase in Limit of Estate Tax Valuation Reduction for Certain Real Property Used in Farming or Other Trades or Businesses
      1. Increase the special valuation reduction available for qualified real property used in a family farm or family
      2. This reduction allows decedents who own real property used in a farm or business to value the property for estate tax purposes based on its actual use rather than fair market value.
      3. This provision increases the allowable reduction from $750,000 to $11,700,000.
    3. Tax Rules Applicable to Grantor Trusts
      1. Pulls grantor trusts into a decedent’s taxable estate when the decedent is the deemed owner of the trusts.
      2. Treats sales between grantor trusts and their deemed owner as equivalent to sales between the owner and a third
      3. Applies only to only to future trusts and future transfers.
    4. Valuation Rules for Certain Transfers of Nonbusiness Assets
      1. No valuation discounts where a taxpayer transfers non-business assets,
      2. Nonbusiness assets are passive assets that are held to produce income and not used in the active conduct of a trade or business. Exceptions are provided for assets used in hedging transactions or as working capital of a business.
      3. A look-through rule provides that when a passive asset consists of a 10-percent interest in some other entity, the rule is applied by treating the holder as holding its ratable share of the assets of that other entity directly.
      4. Applies to transfers after the date of the enactment of this Act.
    5. No provision for eliminating basis step up
    1. Limitations on High-Income Taxpayers with Large Retirement Account Balances
      1. Contribution Limits
        • No additional contributions to a Roth or traditional IRA for a taxable year if the total value of an individual’s IRA and defined contribution retirement accounts generally exceed $10 million as of the end of the prior taxable year.
        • The limit on contributions applies to:
          • single) with taxable income over $400,000.
          • married taxpayers filing jointly with taxable income over $450,000
          • heads of households with taxable income over $425,000
          • Income limit subject o cost of living adjustments
  1. New annual reporting requirement to IRS for employer defined contribution plans on aggregate account balances in excess of $2.5 million
  2. Effective for tax years beginning after December 31, 2021.
  1. Increase in Minimum Required Distributions for High-Income Taxpayers with Large Retirement Account Balances
    1. If an individual’s combined traditional IRA, Roth IRA and defined contribution retirement account balances generally exceed $10 million at the end of a taxable year, a minimum distribution would be required for the following
    2. This minimum distribution required if the taxpayer’s taxable income is over the above income amounts.
    3. The minimum distribution generally is 50% of the amount by which the individual’s prior year aggregate traditional IRA, Roth IRA and defined contribution account balance exceeds the $10 million limit.
    4. To the extent that the combined balance amount in traditional IRAs, Roth IRAs and defined contribution plans exceeds $20 million, that excess is required to be distributed from Roth IRAs and Roth designated accounts in defined contribution plans up to the lesser of (1) the amount needed to bring the total balance in all accounts down to $20 million or (2) the aggregate balance in the Roth IRAs and designated Roth accounts in defined contribution plans. Once the individual distributes the amount of any excess required under this 100% distribution rule, then the individual is allowed to determine the accounts from which to distribute to satisfy the 50%  distribution rule
    5. Effective tax years beginning after December 31, 2021
  2. Tax Treatment of Rollovers to Roth IRAs and Accounts
    1. Elimination of Roth conversions for both IRAs and employer-sponsored plans if the individual exceeds the above income limits. This kills the back door Roth IRA in the 2017 Act.
    2. Prohibits all employee after-tax contributions in qualified plans and prohibits after-tax IRA contributions from being converted to Roth regardless of income level,
    3. Applies to distributions, transfers, and contributions made in taxable years beginning after December 31, 2031.
  3. Statute of Limitations with Respect to IRA
    1. The statute of limitations for IRA noncompliance related to valuation-related misreporting and prohibited transactions is increased from 3 years to 6 years.
    2. Applies to taxes to which the current 3-year period ends after December 31,2021
  4. Prohibition of Investment of IRA Assets in Entities in Which the Owner Has a Substantial Interest
    1. An IRA owner cannot invest his or her IRA assets in a corporation, partnership, trust, or estate in which he or she has a 50 % or greater interest.
    2. An IRA owner can invest IRA assets in a business in which he or she owns they own less than 50%,
    3. The 50% threshold is adjusted to 10% for investments that are not tradable on an established securities market, regardless of whether the IRA owner has a direct or indirect The bill also prevents investing in an entity in which the IRA owner is an officer.
    4. Current law prohibited transaction rules become and IRA requirement. The IRA document must contain these provisions.
    5. Generally effective for tax years beginning after December 31, 2021, but there is a 2-year transition period for IRAs already holding these.
  5. IRA Owners Treated as Disqualified Persons for Purposes of Prohibited Transactions Rules
    1. For purposes of applying the prohibited transaction rules with respect to an IRA, the IRA owner (including an individual who inherits an IRA as beneficiary after the IRA owner’s death) are always a disqualified person.
    2. This section applies to transactions occurring after December 31, 2021.

While this is a proposal and not yet signed into law, it signals the intent of the committee and should be reviewed with respect for planning for the rest of the year.

For questions and comments, please contact Stephen J. Silverberg, Esq., CELA.

This article was provided by Stephen J. Silverberg, Attorney at Law

Read more related articles at:

Details and Analysis of President Biden’s FY 2022 Budget Proposals

The Biden Tax Proposal : Answer to Top 5 Questions

Also read one of our previous Blog’s at:

What Do I Need to Know about Gift-Giving with the Biden Administration?

Click here to check out our On Demand Video about Estate Planning.


Can a Bank Refuse a Power of Attorney?

Can a bank refuse a Power of Attorney?

Can a Bank Refuse a Power of Attorney?   Yes, they can! If you are you going to manage your parents’ finances in the future,  Power of Attorney gives you some power. however, the banks  may not trust you and you need to plan for that.

They aren’t just throwing their power around because they can. Banks have a responsibility to protect people’s finances. Most of us have heard or read stories about fraud, theft of seniors’ savings, and financial abuse (with the equally disturbing fact that family members are usually the culprit).

It is an especially tough job for banks these days. With online banking and banking machines, you and your parents may be unknown to them outside of an online account or two.

Because of this unfamiliarity, sometimes the pendulum swings too far and the bank refuses to recognize legitimate Powers of Attorney. Having a Power of Attorney created by an experienced Attorney is crucial. Sometimes a Power of Attorney can lack clarity. A seasoned Attorney who specializes in Estate Planning is sure to create a document that reads easily and clearly so the bank and other financial institutions have no cause for concern. Keeping the Power of Attorney current and up to date is also vital. Again, checking in with the Attorney who originally created your Power of Attorney is key. He or she may have to update some legal language if your Power Attorney becomes out dated over several years. Typically a bank or financial institution has their own legal department. When an issue arises, it is advantageous for you to have an attorney with the philosophy of continuing care. So many Attorney’s practice “one and done” types of transactions, or “Here is your document, goodbye” tactics. When choosing an attorney, make sure he or she has adopted a good attorney/client relationship with you, and that they are willing to consult with you and be available to you if any changes need to be made.

Why banks reject a Power of Attorney

Banks can refuse to accept a Power of Attorney because:

  • It is old
  • It lacks clarity
  • It doesn’t conform to the bank’s internal policies

If you think that the above reasons are rather vague, I couldn’t agree more. I have had clients’ POA refused because:

  • They had never met the son who had the POA
  • The POA was over 10 years old
  • The person with the account didn’t arrange to sign the bank’s own internal papers
  • The parent was not physically able to go to the bank to verify they gave their daughter a POA
  • A sibling called the bank and said this was a case of financial abuse

All of the POAs presented to the bank were legitimate.

Always  use a lawyer to create your Power of Attorney. Banks can be even more suspicious with do-it-yourself POAs. It is also advisable to have a lawyer complete your POA if there is even a hint of conflict between siblings (and this is no time to be naïve or sentimental).

This isn’t fear-mongering or a tirade against the banks (that would be too easy, wouldn’t it?). There have simply been too many experiences with sons and daughters who have had a legitimate POA denied by the bank. You can imagine the stress involved under this situation. The banks can freeze accounts, in order to investigate “suspicious activity”.  This can even make it difficult to pay bills (yes you read that right, difficult to put money into the account and pay bills).

If suspicious, the banks can ask for a capacity assessment to be completed or a letter from the family doctor confirming that your parent is capable. While inconvenient and sometimes costly, this is not always possible, as sons and daughters are involved only when their parent becomes incapable of managing their finances themselves.

What to do when a bank refuses your POA

Banks are now obligated to provide recourse to clients (your parents) or attorneys when they refuse to act on a POA or attorney’s (you as son or daughter) instructions. The Advocacy Centre for the Elderly (ACE) recommends the following steps in the face of a refusal to do so.

  1. Client or attorney should first consult more information.
  2. If unresolved, escalate to the Consumer Financial Protection Bureau
  3. Consult a lawyer.

It can be quite challenging, not to mention time consuming and exasperating to try resolve the issue of POAs not being recognized by the banks.

It doesn’t have to play out this way. You and your parents can be proactive and prevent this problem!

Take these steps to get your POA recognized by the bank

  • Do it early, when there is no question of capacity.
  • Go to the branch with your parents. Have your parents introduce you to the Bank Manager.
  • Take the POA to the bank and have it reviewed and accepted. If there are problems with it from the bank’s perspective, these can be addressed while there is no question of capacity.
  • Your parents should ask the bank if they also have their own internal documentation required, which will give someone the power to manage their finances.

Read more related articles at:

What to Do When the Bank Refuses a Financial POA Document

Common sense needs to make a comeback when it comes to powers of attorney

Also, read one of our previous Blogs here:

Can a Power of Attorney be Refused?

Click here to check out our On Demand Video about Estate Planning.18

is Life Insurance Taxable?

Is Life Insurance Taxable?

Is Life Insurance Taxable?



Updated: Apr 20, 2021, 4:27am

Compare Life Insurance Companies

Is Life Insurance Taxable? Compare Policies With 8 Leading Insurers. One of the primary upsides to life insurance is that the payout is made to your beneficiaries tax-free. Since life insurance death benefits can be in the millions of dollars, it’s a significant advantage to buying (and receiving) life insurance.

But there are other aspects to life insurance that won’t get past the tax man. Here’s a look at when to prepare for a tax bill.

You Withdraw Money from Cash Value

If you have a cash value life insurance policy, you can generally access the money through a withdrawal or loan, or by surrendering the policy and ending it.

One of the reasons to buy cash value life insurance is to have access to the money that builds up within the policy. When you pay premiums, the payments generally go to three places: cash value, the cost to insure you, and policy fees and charges. Money within the cash value account grows tax-free, based on the interest or investment gains it earns (depending on the policy). But once you withdraw the money, you could face a tax bill.

Money that’s withdrawn is generally made up of two parts:

  • Money that came from premium payments you made. This component of a withdrawal is not taxable. In the life insurance industry this part is called the “policy basis.”
  • Money that came from interest or investment gains. This portion is subject to income taxes. Your life insurance company will be able to tell you what amount in a withdrawal is “above basis” and taxable.

If your life insurance policy is a “modified endowment contract,” or MEC, different tax rules apply and it’s best to consult a financial professional to understand tax implications.

You Surrender the Policy

There can be times when a policy owner no longer wants or needs the life insurance policy. You can take the surrender value of the policy, and the insurer will terminate the coverage. The amount you receive is your cash value minus any surrender charge. You can generally expect to get a surrender charge within the first 10 or 20 years of owning the policy, and over the course of time the surrender charge phases out.

You won’t be taxed on the entire surrender value, though. You’ll be taxed on the amount you received minus the policy basis. This taxable amount reflects the investment gains that you took out.

You Took Out a Policy Loan and the Life Insurance Ends

If you have a policy with cash value and take out a loan against it, the loan isn’t taxable –as long as the policy is in-force. But if the policy terminates before you’ve paid the loan back, you could get a tax bill. For example, if you surrender the policy or it lapses, the coverage terminates.

The taxable amount is based on the amount of the loan that exceeds your policy basis. Remember, policy basis is the portion you’ve paid in as premiums. Amounts “above basis” are based on interest or investment gains on cash value.

One way to access all your cash value and avoid taxes is to withdraw the amount that’s your policy basis — this is not taxable. Then access the rest of the cash value with a loan — also not taxable.

Compare Life Insurance Companies

Compare Policies With Leading Insurers

You Sell the Life Insurance Policy

There’s a market for existing life insurance policies, especially cash value life insurance policies that insure people who are terminally ill or have short life expectancies. Transactions involving terminally ill policy owners are called “viatical settlements.” These involve an investor, such as a company specializing in buying policies, paying you money for the policy, becoming the policy owner, and then making the life insurance claim when you pass away.

Viatical settlements are typically used as a way for patients to get money for medical bills, especially when selling a life insurance policy will mean getting more money than simply surrendering it for the cash value.

Fortunately, the IRS doesn’t treat any portion of what you receive for a viatical settlement as taxable. Under IRS code 101(g)(2), an amount paid by a viatical settlement provider is treated like a payment of the death benefit — and death benefit payouts are not taxable.

life settlement is a similar transaction but involves a policy owner who is not terminally ill. In these cases the IRS does not see the proceeds as a payment of death benefit. A portion of what you receive can be taxable.

You Are Life Insurance Beneficiary Who Receives Interest on a Death Benefit

Most life insurance payouts are made in one lump sum right after the death of the insured person. But some beneficiaries choose to delay the payout, or choose to take the payout in installments over time. When these delayed payouts include interest from the life insurer, the interest can be taxable.

The Life Insurance Payout Goes Into a Taxable Estate

Most life insurance payouts are made tax-free directly to life insurance beneficiaries. But if a beneficiary was not named, or is already deceased, where does the life insurance death benefit go? It goes into the estate of the insured person and can be taxable along with the rest of the estate.

This could create a significant tax bill, especially considering both federal and state estate taxes. While federal estates taxes will not tax the first $11.7 million per individual (in 2021), state estate taxes can have significantly lower exemption levels.

Another possible unhappy scenario is that an estate is below the exemption level but a large life insurance payout into the estate pushes it above the exemption threshold into taxable territory.

This should all be avoidable by naming both primary and contingent life insurance beneficiaries, and keeping those selections up to date.

Summary: When Is Life Insurance Taxable?

Situation What part could be taxable?
You withdraw money from cash value Any amount you receive above “policy basis”
You surrender a policy for cash Any amount you receive above “policy basis”
You take a loan against the cash value None, as long as the policy remains in-force
You sell the policy through a viatical settlement None
You’re a beneficiary who receives a life insurance payout plus interest The interest amount
The life insurance payout goes into your estate Any amount of the estate that’s subject to state or federal estate taxes.
You sell your life insurance in a viatical settlement None

Read more related articles at:

How to avoid the federal estate tax when collecting life insurance proceeds

Taxes on life insurance: Here’s when proceeds are taxable

Also, Read one of our previous blogs at:

How Can Life Insurance Help My Estate Plan?

Click here to check out our On Demand Video about Estate Planning.


Eldercare and Paid Family Leave: Love and the Bottom Line

Eldercare and Paid Family Leave: Love and the Bottom Line

Article Originated from: standard.com



Growing Older — Help Wanted

Here’s a snapshot of current and future caregiving needs for the elderly:

  • The average care recipient is 69.4 years old — a member of the 80-million-member baby boom generation.
  • About 66% of older adults with disabilities get all their care and assistance from their family members.
  • Half of Americans who reach 65 will need long-term care, typically for two years, according to government projections.

These statistics and others paint a picture of a crisis that’s unfolding fast — even though many boomers are still rock ‘n’ rolling. Overall, they’re healthier than previous generations. And advances in medical treatments may help them live longer.

But as they reach their 80s, 90s and beyond, boomers are seeing more medical problems and frailty, and may require more care.

Weighing Workers Down — Career and Income Impacts

The impacts of this demographic shift are already falling heavily on mid-life adults, especially women. You may see them as co-workers, employees or neighbors — but they also serve as nurses, cooks, drivers, organizers and more for their loved ones.

These competing demands can have devastating effects on working caregivers’ careers and earnings. Studies show that 70% suffer work-related difficulties due to their dual roles.4 And about six out of 10 workers experience at least one change in their employment due to caregiving. Negative impacts include rearranging work schedules, cutting back hours, taking a leave of absence or receiving a warning about performance or attendance.

Employee Challenges and Costs

  • 40% of caregivers for elderly relatives work in inflexible environments and have been forced to reduce their work hours or quit.
  • Only 53% of employers offer flexible work hours or paid sick days.
  • Only 22% allow telecommuting regardless of employee caregiving burden.

Adding to Employer Costs — Lost Time and Talent

Paychecks or Parents?

That’s a choice millions of people have to make when an elderly parent or relative becomes dependent. Whether it’s dementia, an injury or just “old age,” parents’ needs can put their adult children’s careers and lives on hold.

What happens when someone drops out of the workforce and loses two, five or even 10 years of experience and earnings? Their own health and financial security may be at risk.

Why Aren’t More Women Working? They’re Caring for Parents, New York Times, Aug. 29, 2019, nytimes.com

Caregiver absenteeism costs the U.S. economy an estimated $25.2 billion in lost productivity, according to a 2011 report. That’s based on an average of 6.6 workdays missed per working caregiver per year, averaging $200 in lost productivity per day.

The costs of losing talent add up, too. Among workers who provide care for an elderly relative, seven in 10 have had to cut back on hours — and wages — or drop out of the workforce altogether.15 In another study, one-third reported leaving a job during their careers due to caregiving responsibilities.12 That can create a high turnover rate. And as HR managers know, hiring and training new people can be a big expense!

Eldercare is also unpredictable, even more so than child care. Parents can plan for constant child care in the early years and less as children grow more independent. With the elderly, it’s the opposite. Their needs tend to be intermittent, changing and increasing. That unpredictability can put a big strain on employees and their managers.

Looking Up — New Awareness and Resources

While news articles tend to focus on the lack of support for eldercare, a positive shift is underway. In the last decade, the share of employers providing eldercare resources and referral services increased from 29% in 2005 to 46% in 2016. What’s more, 78% of employers say that they provide paid or unpaid time off for employees to provide eldercare — without putting their jobs at risk.

There’s also growing awareness coming from the top down. More and more CEOs and organizational leaders are struggling to care for aging parents. That gives them the first-hand experience, perspective and incentive to help employees manage these challenges. Forward-thinking employers understand that the costs of losing talent and productivity can outweigh the costs of support for caregivers.

Paying It Off — Benefits of Paid Family Leave, Including Caregiving

Here’s a rare consensus: Most Americans agree that paid family leave is a good thing. When asked what the consequences would be if all Americans had access to paid leave for family or medical reasons, about 90% say it would have a very or somewhat positive impact on families, women and men. And about two-thirds (65%) think the impact on the economy would be positive as well.

What’s the track record for PFL? One study of paid leave in California found that giving workers some time off increases the likelihood that workers — particularly if they’re low-income — will stay in the labor force following personal and family health events.

In most other states, Paid Family and Medical Leave laws are relatively new, not in force yet or nonexistent, so stay tuned for future results.

Interested in more information on caregiving and the aging population? Check out this post that answers the question: Why Is Paid Family Leave So Important for All Generations?

It’s also important to us at The Standard, both as a leading insurance carrier and as a national employer with offices across the country. Helping families take care of their loved ones is at the core of what we do.

Read more related articles at:

The Importance of Paid Leave for Caregivers

Older Adults & Family Caregiver Need Paid Family and Medical Leave

Also, Read One of our previous Blogs at:


Click here to check out our On Demand Video about Estate Planning.



Must an Agent Spend all of the Principal’s Assets on Care?

Must an Agent Spend all of the Principal’s Assets on Care?

Must an Agent Spend all of the Principal’s Assets on Care? When an agent steps into the shoes of a principal, does that require the agent to ensure every cent belonging to the principal go towards the principal’s care? What if the agent instead gifts that money to family? Is that fraudulent? This issue was explored in a recent case out of the United States Bankruptcy Court, District of Massachusetts, Eastern Division.

Doris named her son, Jonathan, as agent under a financial power of attorney. Doris’ health was failing and she entered into a nursing home, Pleasant Bay. The private pay rate for Pleasant Bay was nearly $8,000 per month. Doris did not have enough income to pay for her stay at Pleasant Bay, so Jonathan sold her condominium.

With the proceeds, Jonathan paid some of the outstanding debt to Pleasant Bay but also engaged in gifting to himself and other family members. Jonathan applied for Medicaid benefits for Doris, but was denied due to the gifting. After accruing more debt with Pleasant Bay, Doris moved to another facility.

Pleasant Bay sued Jonathan for Doris’ balance owed; he agreed to a judgment against him. Jonathan proceeded to file bankruptcy, and listed the Pleasant Bay debt on his bankruptcy schedules. Pleasant Bay gave two arguments as to why the debt should not be dischargeable. The first argument was that Jonathan incurred the debt by false representations and he should have used all of his mother’s assets to pay for her care. The second argument was that Jonathan breached his fiduciary duty by spending his mother’s assets on something other than her care. As a third-party beneficiary of that fiduciary relationship, Pleasant Bay argues that they have standing and suffered a financial loss. Jonathan, in turn, argued that he did not agree to spend all of Doris’ money on her care. He said that he spent the proceeds of the home sale in accordance with what Doris’ would have wished.

Pleasant Bay’s first argument hinges on 11 U.S.C. § 523(a)(2)(A), which states that a debt cannot be discharged in bankruptcy if it was obtained by “false pretenses, a false representation, or actual fraud…”. In the opinion, the court lays out the elements to meet this standard. In order to prevail, the plaintiff must prove that the debtor “1) made a knowingly false representation or made one in reckless disregard for the truth, or made an implied misrepresentation or created a false impression by his conduct, 2) intended to deceive, 3) intended to induce the creditor’s reliance; and the creditor 4) actually relied upon the misrepresentation or false pretense, 5) relied justifiably, and 6) suffered damage as a result.”

Pleasant Bay’s second argument hinges on 11 U.S.C. § 523(a)(4), which states that a debt cannot be discharged in bankruptcy if it was “for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny”. The court notes defalcation is akin to extreme recklessness and that “not every breach of fiduciary duty amounts to defalcation.” Notably, to meet this requirement, the fiduciary must have had culpable intent or knowledge of the improper conduct.

The court here first looked to the terms of the contract that Jonathan had signed with Pleasant Bay. The terms of the agreement did not justify a reading that said that every cent of Doris’ would be given to Pleasant Bay. Instead, the court found that Jonathan had intended that Pleasant Bay would be paid by Medicaid. Jonathan did not understand prior to his gifting that Doris’ Medicaid application would be adversely affected by his actions and ultimately denied.

The court did state that after Jonathan received notice that Doris’ Medicaid application was denied, he should have then given Doris’ monthly income to Pleasant Bay. But not doing so did not rise to the level of fraud, misrepresentation, or false pretenses. However, the court said, if Jonathan’s conduct had resulted in Doris not being able to get care, then an argument might be made that Jonathan’s spending of his mother’s funds rose to the level of defalcation. But that did not happen in this case.

As for the § 523(a)(4) claim, the court quoted Follett Higher Educ. Grp., Inc. v. Berman (In re Berman), 629 F.3d 761, 767 (7th Cir. 2011), which stated “Not all persons treated as fiduciaries under state law are considered to act in a fiduciary capacity for purposes of federal bankruptcy law.” Instead, what matters is if the debtor is acting as a fiduciary under federal law, which would require an express or technical trust. This is an elevated level of duty and creates a Trustee relationship. The court here examined the power of attorney document and did not see where this elevated duty was created. As such, Pleasant Bay’s claim failed on this count.

In the end, Pleasant Bay lost their case and Jonathan was able to discharge the debt in bankruptcy. However, Jonathan could have likely prevented the whole situation and obtained a better outcome had he sought legal advice from an elder law attorney when it was clear his mother needed long-term care. An elder law attorney could have planned properly so that Doris received the needed care, Jonathan fulfilled his obligations as agent, and Doris’ assets were best preserved for her loved ones. Instead, Jonathan spent his time, energy, and money on the back-end, defending his actions in bankruptcy court. This is why the question is raised: Must an Agent Spend all of the Principal’s Assets on Care?

Read more related articles at:

A Guide to Power of Attorney for Elderly Parents

Managing someone else’s money: Help for agents under a power of attorney

Also read one of our previous Blogs at:

What Is a Fiduciary and a Fiduciary Duty?

Click here to check out our On Demand Video about Estate Planning.


conservatorship, guardianship

Conservatorship vs. Guardianship: What’s the Difference?

Conservatorship vs. Guardianship: What’s the Difference?

Conservatorship vs. Guardianship: What’s the Difference? The needs of the ward will determine which role is appropriate When an individual is in need of care to the extent that they become a ward of the court, the court will appoint a guardian or conservator to help. A guardian assumes responsibility for the basic care and daily needs of a child or of an individual who has been determined to be mentally or physically incapacitated, while a conservator is appointed when a minor or incapacitated adult is in need of an adult to manage their property and assets. The duties of guardians and conservators can overlap, and sometimes the same person is appointed to both roles, but their roles are very different.

What’s the Difference Between Conservatorship and Guardianship?

Conservatorship  Guardianship
Primary responsibilities Managing ward’s financial affairs Managing ward’s personal care and daily living needs
Additional duties May extend to more substantial holdings and assets May extend to securing medical care, education, and minor financial duties
Checks on authority Fiduciary duty, power of attorney, yearly accounting Fiduciary duty, restricted to threshold below $24,000 per year

Primary Responsibilities

Conservatorship vs. Guardianship: What’s the Difference? A guardian is responsible for an elder or minor ward’s personal care, providing them with a place to live, and with ensuring their medical needs are met. Guardians make sure that their ward has a place to live, such as the guardian’s home, with a caretaker, or in an assisted living or full-care facility.

Conservators are appointed for those who are in need of having their financial affairs handled. In cases where wards have more substantial holdings, the conservator becomes responsible for determining whether assets such as real estate and tangible personal property should be bought, held, or sold.

The conservator will maintain ongoing contact with the ward’s financial institutions to ensure that everything is being managed appropriately. The order of conservatorship provided by the court gives the conservator the legal power to make financial decisions on the ward’s behalf.1

Additional Duties

Guardians are also required to make sure minor wards are receiving the education they require in addition to the formerly listed duties, and for receiving any training that the ward might require. Minor financial responsibilities, such as paying bills and purchasing daily necessities, are also tasks for a guardian. A guardian can often make medical decisions on behalf of the ward, although some states limit this power depending on the status of the ward.The conservator uses the ward’s finances to pay the bills, including medical and personal bills. They also make sure income taxes are filed and paid as needed. If a minor ward has liquid assets (able to be converted to cash quickly), a conservator can decide where the funds could be held and who would be responsible for overseeing their investment. The conservator might do this directly or enlist the help of a professional financial adviser. Celebrities who reached popularity while young tend to have some issues once they are able to access their own finances. It is not uncommon for courts to appoint a conservator to manage the young celebrity’s affairs. In rare cases, conservatorships can last much longer than state laws mandate (generally until 18 or 21 years of age).

Checks on Authority

Conservatorship vs. Guardianship: What’s the Difference?    Generally, the guideline of income or benefits of $24,000 per year is used to establish whether a person needs a guardian or a conservator.3 Conservators are used when wards have more financial holdings. A conservator is usually responsible for preparing an accounting of actions they’ve taken on the ward’s behalf, filing it with the court each year. Some states require that a conservatorship must begin with a full accounting of all the ward’s assets and debts at the time the conservatorship is established. The annual accounting typically includes how the ward’s assets have been bought, sold, or invested, and what has been spent on behalf of the ward during the previous year. The accounting should include a plan detailing the medical treatment and personal care received by the incapacitated ward in the previous year, as well as an outline of the plan for the ward’s medical and personal care for the next year. A court-appointed guardian or conservator must also typically file a final accounting of a minor’s assets when the minor reaches adulthood. A doctor’s report might be required from time to time, detailing the ward’s current mental and physical conditions, and can state whether a guardianship or conservatorship is still required.

Which Is Right for Your Situation?

A guardianship may be appropriate if:

  • The ward is a minor with no parents or relatives who can serve as daily caretakers
  • The ward is an adult who is not mentally or physically capable of taking care of themselves and their basic needs
  • The ward has special educational or medical needs that are not currently being provided

A conservatorship may be appropriate if:

  • The ward is an adult who has been deemed legally incompetent to make their own financial decisions, and does not have anyone serving as power of attorney
  • The ward is a minor who has inherited or been entrusted with a large sum of money that would benefit from professional management

When Court Approval Is Required

Guardians and conservators have many duties and responsibilities when given a ward to look after. Depending upon the laws of the state where the ward lives, some of these duties and responsibilities will require court approval, while others may not. Florida law requires that a conservator must get court approval before selling any of the ward’s real estate or personal property.5 Nebraska requires court approval before using the ward’s debit card for withdrawing funds from an account. In Massachusetts, a guardian can’t admit the ward to a long-term care facility or administer certain drugs without a special court order. If you have been granted the privilege of caring for someone as a guardian or conservator, make sure to familiarize yourself with your state’s laws and requirements.

The Bottom Line

A guardian or conservator is considered to be a fiduciary, someone who is legally bound to put the ward’s best interests before their own. Serving as a guardian may demand attention to a wide range of your ward’s needs that cover all aspects of life, or hiring the professionals and services needed so that they receive this care—it’s essentially like being a parent. Being a conservator may be less hands-on, but you will be expected to make sound and often high-stakes financial decisions. These can be very trying responsibilities, so if you have been asked to serve as a guardian or conservator, you’ll need to be sure you have the time, resources, and patience to put into them.

BY: Julie Garber

Updated July 09, 2021


Read more related articles at:

Is a Court-Appointed Conservator Personally Liable for Actions Taken?

The Ins and Outs of Guardianship and Conservatorship

Also, read one of our previous Blogs at:

Britney Spears’ Conservatorship Battle with Father Continues

Click here to check out our On Demand Video about Estate Planning.


quitclaim deed

Should I Entertain a Quitclaim Deed?


Should I Entertain a Quitclaim Deed?

Quitclaim deeds are often viewed as quick, easy mechanisms for transferring title in real property from one party to another. However, if the parties fail to properly consider all relevant issues, a quitclaim deed transaction may have undesirable consequences.  Fortunately, many of these consequences can be avoided by hiring an experienced estate planning attorney. Especially when it comes to seniors, you may want to get all the pros and cons before entertaining a Quitclaim  deed. Find an experienced Estate Planning or Elder Law Attorney to help answer your questions and see if a Quitclaim deed is right for you.


What is a Quitclaim Deed?

By executing a quitclaim deed, the existing owner of real property conveys his interest in that property to the deed’s recipient.  Because the deed contains no covenants of title, the owner does not guarantee the property interest conveyed to the recipient is valid or free from encumbrances. Therefore, if problems with the title arise, the recipient has little recourse against the owner.

Factors Affecting Quitclaim Deed Transactions

To avoid undesirable consequences, a party contemplating a quitclaim deed transaction should consider the following issues:

1. No Property Interest

A seller who does not possess a valid interest in certain property cannot transfer an interest in that property by quitclaim deed.  In this situation, the purchaser risks paying for the property without receiving valid title to the property in return. While this situation seems easily avoidable, issues with the property’s title can be difficult to detect.

For example, in June Sand Co., the owner executed a quitclaim deed transferring his interest in certain property to a corporation. However, the corporation later discovered the State of Florida had repossessed the property because the previous owner had failed to pay property taxes.  The Florida Supreme Court held the corporation merely “stepped into the shoes” of the owner and thus, received no interest in the property.

2. Documentary Stamp Taxes

In Florida, documents that transfer an interest in real property are subject to documentary stamp taxes. Usually, the amount of the tax is based on the consideration paid for the property.  If no consideration was paid for the property, but the property was subject to a mortgage, the amount of the taxes is based on the mortgage balance.  Each party should independently determine whether the tax applies because both parties are liable for paying the tax.

3. Capital Gains Tax

When an owner sells certain property, he must pay capital gains taxes on any profits realized from the sale. Additionally, when an owner makes a gift of mortgaged property, the IRS may determine a sale occurred and require him to pay capital gains taxes.  In this situation, the amount of the tax is calculated by subtracting the owner’s adjusted basis in the property from the mortgage balance assumed by the gift’s recipient. To avoid penalties, the owner must determine whether a sale occurred and report this information to the IRS.

4. The Homestead Tax Exemption

When a homeowner’s property serves as his permanent residence, the property may qualify for Florida’s homestead exemption. This exemption can reduce the property’s assessed value by as much as $50,000.  If a quitclaim deed transaction results in a change of ownership, the exemption will be lost. However, some transactions allow the owner to transfer property without losing the exemption. For example, if only the existing owner claims the exemption before and after the transaction, the exemption will not be lost.

5. The Save Our Homes Cap

Once a home qualifies for a homestead exemption, the property appraiser will reassess the property’s value, annually, each January 1st.The Save Our Homes Cap prevents each annual reassessment from exceeding three percent of the previous year’s appraised value or the percentage change in the Consumer Price Index, whichever is lower.  Like the homestead exemption, a change of ownership will cause the home to lose its cap.

In Florida, a change in ownership is defined as any sale, foreclosure, or transfer of legal or beneficial title. Generally, if there is no change in beneficial ownership, the cap will not be lost. For example, transferring the home to the owner’s revocable trust or spouse will not cause the owner to lose the cap. In contrast, the cap will be lost when one of two unmarried joint owners dies and both have received the homestead exemption.

6. Gift Tax Consequences

An owner may use a quitclaim deed to gift property to another for less than full value. However, if the amount of the gift exceeds the annual exclusion amount, which is currently $15,000, the donor must report the gift to the IRS. If the donor retains some interest in the property, such as a life estate, the IRS will likely determine that a gift did not occur, and no taxes will be due. In this situation, the IRS may consider the donor’s retained property interest when calculating his gross estate for estate tax purposes.

7. Community Associations

Community associations often place ownership restrictions on properties they govern. For example, an association may require potential owners to pass a background check and obtain association approval prior to purchasing a property. If potential owners do not abide by these restrictions, the association may prevent the transaction from being consummated.


Quitclaim deeds can be a valuable resource for quick hitter, one-off real estate transactions. However, to hit a home run, one must properly consider the issues that may arise. If you are considering transferring property via a Quitclaim deed or challenging a wrongful transfer, contact  an experienced Estate Planning attorney to investigate these issues and ensure the transaction  results in a legally prudent outcome.

Read more related articles at:

Also, read one of our previous Blogs at:

What are My Taxes on a House I Inherited?

Click here to check out our On Demand Video about Estate Planning.

Why Estate Planning Is Crucial When Reaching End Of Life

Why Estate Planning Is Crucial When Reaching End Of Life

Why  is Estate Planning Crucial When Reaching End Of Life ? People would strive to look for high-paying jobs in order to provide a better life for their families. These people would continually invest time and effort to improve their skills and work for longer hours to ensure that their families can experience the best in life.

But earning a high salary from a stable job isn’t enough for you to achieve these goals. If you want to make sure that everything you’ve worked for actually goes to your family, include estate planning in your to-do list. Estate planning is important as this allows you to decide who will receive the things you’ve worked for the moment you die.

To paint a clearer picture of why estate planning is crucial when you’re reaching the end of life, consider the points below:

1.         Continually Provide For Your Family

No amount of exercise and diet can make you immortal. Even with a healthy and active lifestyle, you will still age and eventually die. This period can be very challenging for your family, especially if you’re the breadwinner. But estate planning can make a lot of difference.

When you work with professionals, to plan for your estate, you can have peace of mind because you know that can always provide for your family. Estate planning can ensure that your family will continue to get their benefits, and they’re getting it in the easiest way possible, even in your absence.

Since estate planning allows you to turn over all of your assets before you die, this process can save your family from experiencing any financial stress. None of your family members will have to worry about how they’re going to pay their bills or provide food on the table because you already arranged all of these things when you were still alive.

2.         Save Your Family From Making Difficult Decisions

Your family will usually make tough decisions as you’re reaching the end of your life. When you’re in a coma, should they let you die naturally or spend money on equipment to let you live? What will they do with your body when you die? These are very difficult decisions to make because a lot of emotions are involved.

If you don’t want your family members to come up with answers for these challenging questions, plan your estate. Aside from deciding who will get what, estate planning also gives you the opportunity to choose disposal arrangements for your remains.

3.         Plan Better For Incapacity

It’s common for people to suffer from incapacity due to a severe accident or sudden medical issue. And when any of these happen, you won’t have the mental capacity to properly manage your financial affairs and turnover your assets.

With estate planning, you can better prepare for incapacity as this allows you to utilize the power of attorney in order to handle your healthcare and financial decisions. This will give you peace of mind knowing that even when you’re incapacitated, all of your assets are handled properly, and your demands are met accordingly.

4.         Protect Young Children

No single parent would want to leave their children alone, but death is unpredictable. As mentioned, accidents and chronic illnesses can happen in an instant and will force you to leave your children.

If you truly want your children to get the best in life, it’s best if you plan your estate as soon as possible. Estate planning allows you to name the guardians of your minor children the moment you die. This means that you get to decide who will look after your children if they haven’t reached 18 years old.

Without estate planning, the courts will have to step in, and they will decide who will raise your children after you’re gone.

5.         Easier Transition For The Business

Running your own business isn’t easy, but when handled properly, this endeavor can significantly improve your own and your family’s quality of life. A thriving business can be your ticket to earn a steady income and even expand your business opportunities.

But all of these can go to waste without estate planning. How can your business continue to operate if you die? Who will take your position and oversee the operations? Not having any answers to these questions can eventually put your business in trouble.

Estate planning is a necessity for small business owners. With estate planning, you can give your position to another person early and ensure that there is a proper transition in the business. Taking this step can guarantee that your business continues to operate even when you die or become disabled.

Ask Help From The Professionals

Contrary to popular belief, estate planning isn’t only for the rich; it’s basically for anyone who wants to turn over their investments to the right members of the family. Estate planning is also best if you want to enhance family values and protect assets for future generations of the family.

For you to effectively and easily plan for your estate, don’t hesitate to ask for help from the professionals. You can now hire lawyers who specialize in estate planning to ensure that all of your hard work won’t go down the drain even after you die.

Read more related articles at:

Not all end-of-life decisions are covered in a will. Here’s what else you need

Why having an end-of-life plan in your 30s makes sense

Also, read one of our previous Blogs at:

How Do I Plan for End-of-Life Measures for a Loved One?

Click here to check out our On Demand Video about Estate Planning.

Feud Siblings

Family Feud After The Death Of A Parent

Family Feud After The Death Of A Parent

The death of a parent is never easy. Each individual family member is forced to contend with the loss of the relationship they had with their mother or father, and the family unit may be impacted. Too often, at a time when the family could benefit from being close, differences and misunderstandings create distance. Carefully laid plans can help prevent sibling arguments from breaking out after the loss of a parent. Knowing the common triggers of family feuds and disagreements allow you to prepare your own family for loss. Here are a few of the most common reasons for fights between siblings after a parent dies:

Division of Property

Children and grandchildren alike often find themselves embroiled in battle over their deceased loved ones’ assets. Even with wills and trusts in place, tension can run incredibly high. That is why it is so important to discuss your estate plans with your loved ones as you make them. Explaining why you left your beloved lake house to your eldest daughter or favorite car to your youngest son can help your other children accept your decision well before the property is ever handed down.

Responsibilities and Resentment

Too often, an adult child or grandchild is singled out as the decision-maker and executor of the deceased parent’s estate. They’re left to handle funeral arrangements, distribute assets to heirs, and be the emotional rock for their family. This is often too much for a single person to shoulder on their own, leading to frustration and resentment. Careful advanced planning can eliminate much of the “to do” list that so often accompanies a loss.

Left Out and Overlooked

In some cases, a sibling might be passed over in the will for reasons that are not immediately clear. Some individuals are given a smaller share of their parent’s estate than their siblings. Either way, feelings of confusion and sadness are bound to follow. A will often represents how a person appreciated their relationship with their beneficiaries. It can be incredibly painful to see how your relationship stacks up in comparison to others. Loss can upend the dynamic of even the most loving families. The best way to avoid such fights is to talk about inheritance plans while you are still here. While such conversations can be uncomfortable, your loved ones deserve your reasons rather than make assumptions once you are gone.

Written by Kimberly Hegwood, an experienced Texas Elder Law and Estate Planning Attorney and the founder of the Hegwood Law Group, PLLC in Houston, Texas.  


Read more related articles at:

When Death Brings Out the Worst: Family Fighting After a Death

How to Avoid Family Conflicts after the Death of a Parent

Also, read one of our previous Blogs at:

How Can I Avoid Family Fighting in My Estate Planning?

Click here to check out our On Demand Video about Estate Planning.


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