Woman caring for a elder woman

NEWS UPDATE: Important Changes to the New Community Based Long Term Care Laws

Adding new lookback requirements for those applying for community-based Medicaid home care that went into effect on October 1, 2020 have been pushed back to January 1, 2021 because of the renewal of the Federal Public Health Emergency (PHE) Declaration. The renewal is effective as of October 23 and for 90 days thereafter.

All COVID easements (including a ban on terminating or reducing Medicaid) will continue through January 2021, as will all other rules  from the legislation regarding  Coronavirus (COVID-19) – Medicaid Eligibility Processes During Emergency Period. This is because of the “Maintenance of Effort” requirement of the stimulus law conditions New York’s receipt of enhanced Federal Medicaid funding on continuing eligibility for all recipients, and on continuing the same eligibility rules through the end of the Public Health Emergency.

The takeaway for seniors and family members is an increased window of opportunity to conduct Medicaid planning for community home care. It may now be possible to make gifts, transfer assets, and other planning techniques to be used from now to January 1, 2021.

Details are still being worked out, as this change requires significant adjustment and training for the Medicaid and Department of Health personnel, and systems. It is not clear if transfers made before the PHE ends would be penalized, as that would be a prohibited restriction on eligibility. So it is possible that lookback period might even be moved to February 1, 2021, but this is still unclear.

We will continue to keep you up to date as this change to the law and Medicaid planning continues to evolve.

We encourage you to contact our office 516-307-1236 if you have questions or anticipate needing to file for community Medicaid or Medicaid home care within the next few months. This is an unusual planning opportunity, and one that should be explored.

Medicaid Word Cloud

How Do the New Rules for Community Medicaid for Home Care Work?

While October 1, 2020 may feel like it’s a long way off, it will be here before you know it. October 1 is the date when a host of new rules go into effect regarding Medicaid home care and all community based long term care services. It is essential to plan now if this is on the event horizon for you or a member of your family.

Perhaps the most significant change is the 30 month look-back for Community Medicaid. It provides care for people at home and other benefits for people living in the community. After October 1, 2020, anyone who wants to receive Community Medicaid benefits must submit financial statements for the past 30 months, or 2.5 years, when applying for benefits. Any funds transferred by the applicant or a spouse may create a period when the person will not be eligible for Medicaid benefits. That starts on October 1, 2020.

Until October 1, 2020, there is no look-back period and no penalties for transfers, so now is the time to talk with our office so we can create a plan.

Next, there are changes to the CDPAP – Consumer Directed Personal Assistance Program (CDPAP) and PCS (Personal Care Services) program. The CDPAP allows recipients to hire a non-licensed person to provide services in the home, instead of through a home healthcare agency. The person can be a family member, friend, or someone the family knows to provide caregiving, and Medicaid pays for that care.

The New York State Department of Health is creating a new assessment tool to determine how much care a person will receive through Medicaid.

And instead of your treating doctor giving you the go-ahead, after October 1, 2020, the plan of care will need to be determined by an independent physician approved by the Department of Health.

The PCS program allows Medicaid recipients to receive care services through home healthcare agencies who have contracts with the local department of social services.

Changes that also begin on October 1, 2020:

Eligibility requirements change – you must require help with three (3) ADLs (Activities of Daily Living). It is an increase from the previous requirement of needing help with two (2) ADLs, meaning people will require more care to be eligible for Community Medicaid. Those diagnosed with dementia, including Alzheimer’s, need require only help with one (1) ADL. The Activities of Daily Living include bathing, dressing, grooming, toileting, walking, turning, positioning, and feeding.

For those who believe they will need help, an application for Medicaid must be completed and submitted soon. Many people will likely wait until September, but that’s a mistake. Wait too long, and you or a loved one may not get the services needed.

If you have questions about Medicaid and these changes, please call our office at 516-307-1236. We are open and able to serve you through phone, email, and videoconferencing.

Get Your Important Documents, Including Advance Directives, Ready Now

There has never been a time in our lives when the need for an estate plan has been more critical. The sheer numbers of people who have died from COVID-19, in our community and worldwide, is something we have never witnessed. And while it may have seemed at first that the elderly were the most vulnerable, we know better now.

What should you be doing now to protect yourself and your loved ones? At the very least, you need a Will, Power of Attorney, and Advance Care Directive.

Find your most recent Will. If you cannot find it, you need a new one. Now!

Our office is open, and we are working with clients through phone, email, and videoconferences. We take all necessary precautions as recommended by the CDC for anyone who wishes to meet with us in person.

If your Will is over four years old, it probably is out-of-date. Your life may have changed, and it may not reflect new children, grandchildren, spouses, divorces, deaths, etc.

If your Will is out of date, it does not consider the changes in the law that have occurred in recent months. IRA distribution rules for heirs are among many changes that resulted from the SECURE Act (effective January 1, 2020). The CARES Act, passed in response to the economic impact of COVID-19, further modified these rules. What you had intended years ago may not come to pass because of these and other changes.

A will does not take long to create, but not having one creates unnecessary costs and stress for your loved ones.

Power of Attorney – Names a person who manages your finances and may transfer assets in certain situations. A POA allows your designated agent to pay your bills and handle health insurance problems during a medical emergency. Without one, if you are incapacitated, your assets will be inaccessible, and your family will need to undertake a costly Guardianship proceeding.

Healthcare Proxy – Names a person who may make medical decisions if you cannot do so for yourself. Without this document, family members can argue about who should decide what medical care you receive.

Living Will – Tells your health care proxy and family what your wishes are for end-of-life care. Without a Living Will, doctors can keep you alive in a vegetative state for years with no chance of recovery.

Three young women, Karen Ann Quinlan, Nancy Cruzan, and Terri Schiavo, became household names as their families battled over whether to keep them alive by artificial means. Even young adults admitted to intensive care units with COVID-19 are often struck suddenly. There’s no time for them to express their wishes.

We can create a plan tailored to your needs to protect your family. Call our office at (516) 307-1236 or email sbsilverberg@sjslawpc.com for a free consultation by phone, video, or in person.

Legislative Update: Paycheck Protection Flexibility Act

The Paycheck Protection Flexibility Act was signed into law on June 5, 2020. The new legislation modifies the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Here are the details:

Extension of loan utilization period. Originally, the PPP required borrowers to spend their full loan within eight (8) weeks after the loan originated. This was called the “Covered Period.” The new law changes the Covered Period from eight (8) weeks to either twenty-four (24) weeks after the loan origination date or December 31, 2020, whichever one is earlier.

The borrower may spend the entire loan proceeds and request forgiveness before the end of the Covered period.

The goal is to help PPP borrowers to weather the crisis by giving them more time to use the PPP loan on forgivable expenses. These include payroll costs, rent, utilities and interest on real property and personal property debt. Restrictions to what the money can be used for have not changed.

Payroll cost spending requirement. The prior PPL required borrowers to spend at least 75% of their loan proceeds on payroll costs, but the new act changes that requirement to 60%. However, all borrowers must hit this percentage if they are to qualify to have the loan forgiven. Any borrower that does not meet the 60% amount cannot have the loan forgiven and will need to pay it back.

Forgiveness reduction based on full time employees. PPL loans are subject to a reduction calculated by multiplying the forgivable loan amount by a fraction. The numerator of the fraction is the average number of full-time equivalent employees (FTEs) during the Covered Period. The borrower decides which of  two denominators works best:  the average number of FTEs between February 15, 2019 and June 30, 2019, or the average number of FTEs between January 1, 2020, and February 29, 2020.

The new law lets the borrower include any employees terminated between February 15, 2020 and April 26, 2020 who are rehired before June 2020 in the numerator to ensure maximum loan forgiveness. The PPP Flexibility Act extends the rehire provision deadline date to December 31, 2020.

If the PPP borrower meets required conditions, the forgiveness reduction test is eliminated if the borrower is:

1 – Unable to rehire a terminated employee who was an employee of the borrower by February 15, 2020,

2 – Able to demonstrate an inability to hire a similarly qualified employee to replace the terminated employee,

3 – Able to demonstrate an inability to return to the same level of business activity  commensurate with the activity level as of February 15, 2020.

Eliminating the FTE reduction test helped business owners unable to return to full operation because of the coronavirus crisis, but the borrower must still expend at least 60% of the loan on payroll cost, or risk having to pay the loan back.

Payroll tax deferral. The CARES act allows businesses to defer the employer portion of their Social Security payroll tax obligations for 2020 —  one half is due on December 31, 2021 and the second half is due by December 31, 2022. But the CARES act provided that any business receiving PPP loan forgiveness was not eligible to defer Social Security payroll tax obligations. The Treasury Department recently issued guidelines that allow PPP borrowers to defer their Social Security payroll taxes until their forgiveness status was determined.

The new Flexibility Act lets PPP borrowers defer their 2020 Social Security payroll taxes regardless of whether some, part, or all of their PPP loan is forgiven. The employer’s share of the Social Security payroll tax is not treated as a forgivable payroll expense.

Some of the new aspects of the Flexibility Act will be welcome, but the 60% payroll tax requirement remains a challenge for many. If business does not return and permit the borrower to ramp back up before the end of the Covered Period, the loan will not be forgiven, adding another burden to strained businesses.

 

We are Open to Serve You, Safely

Our office moved seamlessly to working remotely in March because the firm’s systems were designed to allow attorneys and staff to work in the office, at home, or anywhere. Investing in technology has always been a high value at the firm, and when New York State was “paused,” our clients benefited from our ability to keep working without interruption.

We have never stopped working, but now we, like many of you, are slowly returning to a more “normal” world.

The Law Office of Stephen J. Silverberg continues to provide all services for our clients, through telephone, email, and videoconferencing.

Clients who are comfortable coming to our office will be welcome – we are following all guidelines from the Centers for Disease Control and local government.

For clients who are not comfortable coming to our office, we can still serve you. Governor Cuomo, through executive order, has allowed for virtual witnessing of Wills and other estate planning as well as notarizing services. These orders are still in place and allow us to provide clients with a “contact free” estate plan. Consultations, draft reviews, and execution of documents can all be completed without the client needing to leave their house.

We have always considered ourselves a different kind of law firm. We provide Elder Law and estate planning legal services; for some clients we are using complex and highly technical tax and estate planning methods, and for others, we work with fundamental Elder Law and estate planning tools needed to protect individuals, families, and property.

Whatever your Elder Law and estate planning needs, we are here to help. Call us at 516-307-1236 or send an email to sbsilverberg@sjslawpc.com if you have any questions.

Stay well, be safe and stay in touch.

What Are The Benefits Of Naming A Corporate Fiduciary?

Many individuals who establish trusts choose to name a close friend or relative as trustee.  However, there are many situations where naming a corporate fiduciary is a far better alternative.

Acting as a trustee requires that the person have a good background in finance and tax. Failing that, the liability of making poor financial decisions may be overly burdensome for someone selected primarily because of their relationship with you. Depending on the size of the estate, performing as a trustee may require more time and energy than the person is able to devote to the required duties.

Here’s another problem, and one that we see often. It is unfair to the beneficiaries of the trust to pay a trustee for services rendered if the trustee is not qualified to perform the services, or does not have the necessary credentials to manage the trust. Even if friends or family members are professionals in finance, law or tax, they may not necessarily have the right knowledge of estate tax. They may be capable and trustworthy without being qualified. Paying them if they are not qualified may lead to bad feelings between family members and/or friends.

Along those lines, naming a friend or relative may subject the individual to highly charged and emotional disputes. If they are a friend, they may not appreciate being thrust into a family argument, and if they are a family member, they may bring their own emotional baggage that may complicate even the simplest of arrangements.

An alternative is the corporate fiduciary, which will take on a more business-like approach to the tasks and responsibilities of managing a trust without becoming emotionally involved in any disputes among the beneficiaries. Naming a corporate fiduciary also adds permanence to the choice and ensures that individuals who are skilled in money management, taxes, and conservation of trust principal will administer the trust.

Selecting a bank or independent trustee does not preclude family participation in the trust decisions. A friend or family member might be named as a co-trustee, with power to make or participate in decisions regarding discretionary distributions to beneficiaries.

The best estate plan in the world can be undermined by poor trustee selection. This is a decision to discuss with advisors, including the family estate attorney, CPA, financial advisor, and other trusted professionals.

NAELA

NAELA News Publishes Article on CARES Act by Stephen J. Silverberg, Esq.

While protecting small businesses is the CARES Act’s primary purpose, it also contains provisions that benefit Elder Law and estate planning clients and their families.  The National Academy of Elder Law Attorneys (NAELA) requested an article to  explain those benefits to my colleagues in the Elder Law and estate planning bar. The article, Waiver of Required Minimum Distributions and Other Provisions Affecting Withdrawals From Qualified Plans and IRAs Under the CARES Act appears in the April edition of NAELA News + Journal-NAELA News Online and was circulated to all NAELA members by email.

Here are some details from the article that are important to know:

The Act waives required minimum distributions (RMDs) for specific defined contribution plans and IRAs for the 2020 calendar year. The waiver not only applies to participants and account owners, it also applies to beneficiaries who inherited IRAs. The Act also waives RMDs for individuals who turned 70 1/2 in 2019 but elected to defer their initial RMD to April 1, 2020; both the 2019 and 2020 RMDs are waived. If an individual has taken their RMD, the waiver is not a deferral. Waived RMDs need not be made up.

However, the Act affects no other distribution rules, including the right to rollover the distribution within 60 days of receipt. If someone took an RMD before the effective date of the Act and 60 days have not passed since the time of the distribution, they may rollover the distribution. Usually, there is a mandatory 20 percent tax withholding requirement; however, the individual can replace the tax withheld with their personal assets.

The Act allows coronavirus-related withdrawals from 401(k), and IRA accounts up to $100,000 during 2020. Individuals under age 59½ do not incur the 10 percent penalty for early withdrawal if:

  1. An account owner is diagnosed with COVID-19, or
  2. A spouse or dependent is diagnosed with COVID-19, or
  3. An individual who experiences adverse financial consequences because of being quarantined, furloughed, laid off, having work hours reduced, being unable to work due to lack of child care due to the coronavirus, or
  4. Closing or reducing hours of a business owned or operated by the individual due to coronavirus, or
  5. Other factors, as determined by the Treasury Secretary.

To read the entire article, visit NAELA’s website using the link above.

About the Author
Stephen J. Silverberg, Esq., CELA, CAP, AEP, Fellow, Roslyn Heights, New York, is a member of the NAELA Tax Section Steering Committee, and the NAELA News Editorial Board. He is a NAELA Past President and Fellow.

Spousal Refusal Saved – But Look Back for Homecare Timeframe Shrinks

Good news for New Yorkers regarding Medicaid and Spousal Refusal – the New York State Education and Health Budget Bill is making progress through the New York State legislature. Due to the efforts of the NYS Bar Association Elder Law Section and the New York Chapter of the National Academy of Elder Law Attorneys, the state legislature has rejected proposals to eliminate Spousal Refusal and severely reduce the minimum Community Spouse Resource Allowance (CSRA).

However, it is not all good news. Beginning October 1, 2020, there will be a 30 month (2 ½ years) look back for all home care services. Any asset transfers made during or after that date will cause a penalty period determined the same way as for Skilled Nursing Level Medicaid. This change will mainly affect single people. Married couples can still use Spousal Refusal, and transfers between spouses are not subject to the look back or penalty periods.

The earliest effective date for the Home Care Look Back is October 1, 2020. If we are still in a New York State-declared state of emergency (and let’s hope we are not),  the Director of the Budget can delay the effective date for another 90 days.

Some of the other changes are not great.

To determine whether a person is eligible for care, they must need assistance performing three (3) Activities of Daily Living (ADL); previously, the requirement was the inability to perform only two (2) ADLs.  There are exceptions for individuals with a diagnosis of Alzheimer’s or other Dementia diagnoses; in those cases, they will need to show a need for assistance with only one ADL. That also starts on October 1, 2020.

Effective October 1, 2020, the individual’s personal treating physician necessarily may not be permitted to approve their treatment plan for Medicaid Personal Care Services (PCS) and Consumer Directed Personal Assistance Program (CDPAP) services. A “qualified independent physician” selected or approved by the Department of Health must determine the plan of treatment. There is no guidance as to what this means.

Finally, there is a long-range plan for Local Departments of Social Services (LDSS), Managed Long Term Care (MLTC), and Medicaid Managed Care (MMC) for the assessment and approval of the number of hours. It will require using a Task-Based Assessment Tool developed, starting on April 1, 2021, and the date for the full takeover of the Assessment and approval process by DOH is October 1, 2022.

The above are significant changes. There are still questions about implementing these changes. My colleagues and I are reviewing these provisions, and I’ll continue to keep you posted.