Monthly Archives: July 2010

What a Reverse Mortgage Can Do For You

While public assistance, such as Medicaid, will pay for nursing home care for the elderly, in most states these programs fail to assist those who aren’t ready to sell their homes and wish to seek in-home care.  Due to the high costs and lack of public assistance associated with in-home care, many elderly individuals and their families only afford in-home care for a short while, and may think moving their elderly loved-ones into nursing home is the only affordable option.

One relatively unknown solution to this problem is to take out a ‘reverse mortgage’, which allows homeowners over the age of 62 to borrow money from their own equity.

In this financial arrangement, the homeowner receives a sum of money from a lender without having to make regular repayments.   The amount of money is based on the applicant’s age as well as the value of the home, and is only available to homeowners with zero debt against the house.  Although many use the money to pay for home care assistance, the money can be spent in other ways as well, such as funding retirement or avoiding foreclosure.

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Though helpful to those who wish to have permanency in their homes, there are some downsides.  For example, closing costs are twice as high as they would be for regular mortgages.  These costs can be paid for with the borrowed money, but paying in this manner will significantly decrease the amount of money available to the homeowner.

Additionally, a reverse mortgage could possibly affect one’s eligibility for federal benefits such as Medicaid.  If the funds from the mortgage aren’t spent quickly, the government could view them as income, which would impede on the ability to collect on various benefits.

A reverse mortgage might not be a good idea for those who are hoping to secure a hefty inheritance for loved ones.   The borrower’s estate must pay the lender the total amount borrowed plus interest.  As a result, when the homeowner passes away and the home is ready to be sold, the lender will collect most of the sales proceeds as opposed to any living heirs.

Due to these downsides, reverse mortgages are not commonly utilized, however they are slowly gaining more attention due to longer life expectancies of people and the desire of retirees to stay in their homes instead of moving to a nursing home.  As a result, many financial institutions are beginning to integrate reverse mortgage plans into their elder care programs.

A reverse mortgage is a complex arrangement that can be facilitated by a practiced elder law attorney. Adam Tobin is an expert in Massachusetts Medicaid laws.  Contact him today to see how he can help you.

You’re Appointed a Trustee- Now What?

Being appointed the trustee of a trust can be overwhelming at first and can often leave one with more questions than answers: What exactly is a trust? What are my responsibilities? What are my limitations?

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A trust is an arrangement in which an individual, the trustee, is appointed to manage the property of another individual, also known as a beneficiary. Being appointed the trustee is flattering but also a huge responsibility. Here are some basic rules to follow to successfully carry out the responsibilities associated with being a trustee.

  • Read the trust in its entirety. It will set clear guidelines and contain information regarding different issues, such as beneficiaries and distribution.
  • Create a trust checking account. This will help you keep track of income and expenses.
  • Always consider the interests of the beneficiaries. A trustee’s fiduciary role requires that you pay attention to how trust investments and payouts will affect the beneficiaries.
  • Keep your personal finances out of it. You should never borrow nor lend money from the trust in the chance that you may not be able to put back whatever amount you took out.
  • Provide beneficiaries with an account of trust activity. Such documentation can be a simple checking statement or a formal trust account prepared by an attorney. These should be provided annually.
  • Invest the funds carefully. It’s not enough to leave the funds sitting in a savings account. On the reverse side, you cannot invest all the money in one area. There are a set of investment standards that must be followed which require that the investments be diversified and non-risk oriented. They also must consider the future financial needs of the beneficiaries.
  • Keep in contact with the beneficiaries. This is crucial to make sure you understand their needs and any possible future needs.
  • Be aware of outside factors. Make sure you know of any other benefits the beneficiaries are receiving to ensure you do not compromise their eligibility.
  • File annual trust income tax returns. The trustee may have to pay taxes. If you keep thorough records then this should be easy!

The last piece of advice is a “don’t”- don’t do it alone! Get professional advice to make sure you are correctly fulfilling your role. Adam Tobin is an experienced living trust attorney and can help you carry out these responsibilities. Contact him today for a free consultation.

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Nursing Home Chain to Pay $619 Million in Lawsuit Damages

An elder lawyer assures that the rights of patients living in nursing homes are protected, and requires that they are provided with an adequate amount of care. For one major nursing home operator, failure to comply with legal staffing levels has cost them millions. Just last week, a California jury rendered a verdict that will force Skilled Healthcare, a California-based nursing home operator, to pay nearly $619 million in damages for health and safety code violations.  This amount is not including possible punitive damages that the chain may have to pay.

One of the largest nursing home gavelchains in the country, Skilled Healthcare currently operates in seven different states, with 22 facilities in California. The violations occurred from 2003-2009, when the facilities were failing to provide each nursing home patient with the California state minimum of 3.2 hours of care per day. Over 30,000 patients were represented in the lawsuit. They will additionally have to pay $58 million in restitution, bringing the total amount up to more than $670 million.

State minimum staffing requirements vary in different states. It is important to educate yourself if you have a loved one who is currently living in a nursing home facility. A nursing home lawyer can help you understand your rights. Adam Tobin is an experienced Massachusetts nursing home attorney.  Contact him to request information about elder law and Massachusetts nursing home rights.

You can view the full article here.

10 Incentives to Write Your Estate Plan Today

Though many people don’t feel as though estate plans are for them, they may not realize how beneficial having an estate plan is. Elderlawanswers.com makes a compelling case for why creating an estate plan is important. Take a look at the following list to understand the value of estate planning, and get started on one with an estate planning lawyer today!

1. Loss of capacity. There is a chance that you could one day become too incompetent to handle your own affairs. An estate plan can designate who exactly you want to take over control via power of attorney.

2. Minors. If you happen to pass while you still have children who are minors, do you know who will raise them? Again, an estate plan can determine your own guardian, and you can avoid a potential court decision.


3. No Will.
How will your loved ones know what assets will be inherited and to whom? Each state has laws of intestacy, which decides the distribution of assets passing on to your heirs in the absence of a will. Creating an estate plan with a Massachusetts estate planning attorney will designate your assets to whom you want and how you want them.
4. Blended families. Multiple-marriage families can have children that may not be treated as you would like if you pass. Estate plans can select what goes to your current husband or wife, and to the children of prior marriage(s).

5. Special living_trust_and_estate_planNeeds Children. If you have a child with special needs, not having an estate plan could risk their disqualification from Medicaid or SSI benefits in the event of your passing. In this instance, they would have to use their inheritance to pay for the care they receive. Estate plans, with MA elder attorney supervision,  allow for a Supplemental Needs Trust, which will allow special needs children to continue to remain eligible for government benefits, while simultaneously using your trust assets to pay for other expenses that are not covered.

6. Keeping assets within the family. Without an estate plan, the spouse of your child may end up with your money in the event your child passes away. Additionally, if your child gets a divorce, half of your own assets after your passing could be given to the ex-spouse. Elder lawyers specialize in creating estate plans where you can prevent both scenarios in your plan, and assure that your assets remain within the family, and potentially pass on to your grandchildren.

7. Financial security. In the event that you pass on, will your surviving children or spouse be able to financially survive? The current standard by which your family lives may be unable to be maintained without a plan specifying income replacement through life insurance. This can be prevented by an estate plan!

8. Retirement accounts. Your IRA or other retirement account beneficiary in the event of your death may not reflect your wishes, and large tax consequences for your heirs can result. Make a plan with a Massachusetts estate planning attorney and select your ideal retirement account beneficiary.

9. Business ownership.
If you are a business owner and decline to name a successor with an estate plan, you can risk your family loosing control of your business. You can name who will resume control of the business after you pass with your plan.

10. Avoiding probate. An estate plan eliminates the delays, excess fees, and publicized asset records. You can structure your estate plan with the assistance of an estate planning attorney to avoid probate entirely.

Convinced yet? Contact Adam Tobin and get started on creating an estate plan today.

Source article here.