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Legal Notes

Recent legal scams

My 89-year-old father’s e-mail was anxious. “I have been getting bombarded on the internet about big Social Security changes becoming effective May 1. The blurbs are full of unspecified warnings about losing payments.” He clicked on a video and was offered “valuable reports for only $49!”

Thankfully, my father is shrewd and cheap, so he called me for free advice. I was quick to assure him that there was nothing to worry about. I determined that the pending changes do not take away any existing benefits; they eliminate one strategy for future married applicants (in other words, everyone receiving benefits now is safe!). It reminded me of some of the other scams my clients have encountered recently:

  1. After my clients receive a new Deed from my office that I prepared as part of their estate plan and recorded at the Registry of Deeds, they often get a letter from a company offering them a copy of the Deed for $83.00. It looks official and presents like a legitimate bill. Some even impose an additional charge if you pay after the “due date.” The envelope usually says “Deed Processing Notice” and comes from a company called, “Record Transfer Services,” “Conveyance Transfer Services,” or “Secured Document Services.” Many of my clients call me, because they think they have to pay it (and some do!). Trust me, there is no need to pay $83.00 for a document you can access and print-out yourself on-line at masslandrecords.com for free!
  2. A postcard or letter arrives, saying that you have unclaimed (abandoned) property and a company will help you to retrieve it. My clients typically receive these from a company called Keane and there is just enough mystery in the correspondence to entice you to call. The small print indicates a 20-30% commission. Although you may, indeed, have abandoned property (an asset you forgot you had or a dividend check that never made it to you), you do not need a third party to get it for you – you can go on-line or call the Abandoned Property Division yourself. No fees or commissions! These notices can have an upside, however: upon receiving one once, I was able to quickly determine that a client had $90,000 in shares of stock being held with Abandoned Property. The direct contact ensured that she received the full amount.
  3. Some of my clients need to apply on-line for tax identification numbers for estates and trusts. Several have been duped by a company (irs-tax-id.com) which offers to handle the application for $247. Want it for free? Go to irs.gov and apply for the number on your own.

I am glad my father knew to question what he read on-line…

The views expressed in this column represent general information. To address your particular and specific needs consult your own attorney. If you need help with referral to an attorney, contact the Franklin County Bar Association at (413) 773-9839 or the Worcester County Bar Association at (978) 752-1311.

Call Community Legal Aid at 413-774-3747 or toll-free 1-855-CLA-LEGAL (1-855-252-5342) during their intake hours (Monday, Tuesday, Thursday, and Friday from 9:30 a.m. to 12:15 p.m. and Wednesday from 1:30 p.m. to 4:15 p.m.). Apply for help anytime online by visiting www.communitylegal.org. Franklin County Office is located at 55 Federal St, Greenfield, MA. The office is no longer open for walk-ins. Services are free to people age 60 and older.

Irrevocable Trust Update

There have been significant court cases recently relative to irrevocable trusts. A recent case from the Worcester Superior Court held that if a parent transferred their home to an irrevocable, and the irrevocable trust provided that the parent had the right to "use and occupy" the home, then, based on state and federal Medicaid regulations, the trust does not protect the home from nursing home expenses.

The family argued under Massachusetts trust law that the house was protected from nursing home expenses, but the court gave great deference to Massachusetts and federal Medicaid regulations and found that the house was not protected. This case has been appealed to a higher court with the hope that the appeals court will overturn this decision.

In another case, the Massachusetts appeals court granted a favorable decision against an argument MassHealth has been raising against irrevocable trusts for many years. With an irrevocable trust, the parent usually retains the right to the income from the trust, but has no ability to access the principal or assets held by the trust, such as the home. MassHealth had tried to use a very technical argument that the trustee had the ability to sell the home and purchase an annuity, which could change all of the assets of the trust into income and, thus, make all of the assets of the trust accessible for nursing home expenses. The appeals court rejected this argument and held that the house was protected from nursing home expenses.

In the same case, the appeals court held that, if the trustee had the ability to distribute assets from the trust to the parent's children, this was acceptable and did not make the house reachable for nursing home expenses.

These two recent court decisions illustrate the complexity of irrevocable trusts. If you or a family member are considering a legal instrument such as an irrevocable trust, consult an attorney. It will be important to understand what this tool is and if it accomplishes your intent to financially plan for the future.

The views expressed in this column represent general information. To address your particular and specific needs consult your own attorney. If you need help with referral to an attorney, contact the Franklin County Bar Association at (413) 773-9839 or the Worcester County Bar Association at (978) 752-1311.

Call Community Legal Aid at 413-774-3747 or toll-free 1-855-CLA-LEGAL (1-855-252-5342) during their intake hours (Monday, Tuesday, Thursday, and Friday from 9:30 a.m. to 12:15 p.m. and Wednesday from 1:30 p.m. to 4:15 p.m.). Apply for help anytime online by visiting www.communitylegal.org. Franklin County Office is located at 55 Federal St, Greenfield, MA. The office is no longer open for walk-ins. Services are free to people age 60 and older.

Avoiding probate

Mary came to my office very shortly after her mom died. In her will, mom left her entire estate, which consisted of her car, a small checking account, a C.D. with about $50,000 and household furnishings, to Mary. Because Mary’s name was not on the bank accounts or on the title to the car, Mary needs to probate her mother’s estate to acquire those assets. If only Mary’s mother had come to see me before her she died, we could have entirely avoided the expense and time of probating her will.

Assets owned jointly, from houses to cars, from bank accounts to stocks, pass automatically to the named beneficiary without the need of probate. In that regard, consider owning assets jointly (or have the account be payable on death) with another person. You can also designate a beneficiary on your life insurance policy, your 401K and your IRA. Just be sure to update your beneficiary designation as circumstances change. My goal in my representation is to ensure that all assets that can be jointly owned are jointly owned, and all assets to which a beneficiary can be designated is so designated, so that all that is left when a person dies are the household furnishings (it has been my experience that families are usually capable of dividing the household furnishings without too much difficulty). The only time it gets more complicated is when the intended beneficiary depends on needs-based public benefits, which may be affected by the receipt of assets. Even then advance planning with the help of an attorney can allow for a worry-free transition.

What does it mean that Mary has to probate her mother’s estate? Probating an estate in Massachusetts usually takes a year or more because creditors have a year (after the death) in which to come forward to assert their claims. Probating an estate is time-consuming and it is expensive. To file the Petition at Court, send out the required certified letters and publish in the newspaper, the estate has easily spent over $500, never mind the attorney’s fees.

Another useful tool to avoid probate is the establishment of a trust. The assets and property in the trust pass on relatively quickly, especially when compared to the probating of an estate. However, the drafting of a trust can be expensive, and owning assets jointly or having the assets be payable on death may accomplish the wishes of the maker of the trust.

I advise my clients to sign the title to the car, but not to fill out any other information (the date, the mileage, the new owner, etc.). In the scenario above, Mary could have inserted all the necessary information on the title before her mother died and the car would be hers. There is a form that should also be signed (and not filled out) called a MVU-24. This form provides an exemption from the sales tax or use tax when a car is transferred as a gift.

The views expressed in this column represent general information. To address your particular and specific needs consult your own attorney. If you need help with referral to an attorney, contact the Franklin County Bar Association at (413) 773-9839 or the Worcester County Bar Association at (978) 752-1311.

Call Community Legal Aid at 413-774-3747 or toll-free 1-855-CLA-LEGAL (1-855-252-5342) during their intake hours (Monday, Tuesday, Thursday, and Friday from 9:30 a.m. to 12:15 p.m. and Wednesday from 1:30 p.m. to 4:15 p.m.). Apply for help anytime online by visiting www.communitylegal.org. Franklin County Office is located at 55 Federal St, Greenfield, MA. The office is no longer open for walk-ins. Services are free to people age 60 and older. 

What happens to our house if my spouse has to go into a nursing home?

Pam OddyAttorney Pamela Oddy, Athol, Mass., 978-249-7511Q: My spouse and I own our home jointly (both our names are on the deed). Unfortunately, I am no longer able to care for my spouse and he/she will have to go into a nursing home. Will my house be taken away from me?

A: No. However, in order to qualify for MassHealth benefits for the purpose of paying for your spouse’s nursing home care, your spouse may have only $2,000 in total assets. Since the home is worth more than $2,000, you will have to remove your spouse’s name from the deed. He may sign his interest in the home to you; this transfer is not a disqualifying one and does not have to meet the five-year requirement that MassHealth regulations attach to transfers. The home cannot be transferred to anyone else without triggering the five-year requirement. For example, your spouse cannot transfer his interest in the home to you and to your children, nor can he transfer the home to children without creating a disqualifying transfer. Both of these examples would be considered disqualifying transfers because they were done within the five-year period of entering a nursing home.

The five-year requirement imposed by MassHealth makes it imperative that families plan as much ahead of time as possible. If the couple in this question had done some advance planning, then the home might already have been placed in an irrevocable trust or in a life estate deed more than five years ago. If that is the case, then the home is a protected asset.

The views expressed in this column represent general information. To address your particular and specific needs consult your own attorney. If you need help with referral to an attorney, contact the Franklin County Bar Association at (413) 773-9839 or the Worcester County Bar Association at (978) 752-1311.

Call Community Legal Aid at 413-774-3747 or toll-free 1-855-CLA-LEGAL (1-855-252-5342) during their intake hours (Monday, Tuesday, Thursday, and Friday from 9:30 a.m. to 12:15 p.m. and Wednesday from 1:30 p.m. to 4:15 p.m.). Apply for help anytime online by visiting www.communitylegal.org. Franklin County Office is located at 55 Federal St, Suite 120, Greenfield, MA. The office is no longer open for walk-ins. Services are free to people age 60 and older. Advocates are Attorney Jan Stiefel and Wendy Kane, Paralegal.

Attorney Seunghee ChaAttorney Seunghee ChaWhen individuals are unable to manage their own wellbeing or assets, a court may appoint a guardian or a conservator to make personal or financial decisions on their behalf. The judicial proceedings can be expensive and time-consuming, but they are often necessary to prevent harm and financial exploitation. If more than one state is involved, families can get caught in jurisdictional conflicts without uniformity of rules among the states.

On January 1, 2015, the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act (UAGPPJ) goes into effect in Massachusetts. The new law will bring clarity and uniformity to guardianship cases involving more than one state.

Guardians who must move an incapacitated person from one state to another face three major challenges:

  1. Which state has jurisdiction over the individual who needs guardianship?
  2. How does a state recognize the authority of a guardian decreed in the court of another state? 
  3. How does a guardianship case transfer from one state to another?

Under the UAGPPJ, the proper jurisdiction is the individual’s “home state,” where he or she lived for at least six consecutive months immediately before commencing a guardianship or protective proceeding. If the home state declines jurisdiction, the state with a “significant connection” to the individual (as opposed to mere physical presence) has jurisdiction. The law authorizes guardians to register the decree of another state in the new jurisdiction, which must give full faith and credit to the order even if it is not registered. If a transfer of the case is necessary, instead of repeating the guardianship procedure, the “new state” has jurisdiction when the individual physically locates there and the court transferring the case finds that the move is permanent, there is no objection—or any objection has failed—to establish that the transfer is against the individual’s interest, the plans for the individual in the new state are reasonable and sufficient, and the proceeding will be accepted by the court to which the proposed transfer is to be made. 

The statute will ease the burden on family members who must move a frail elder to another to provide better care and help them make critical decisions for their loved one without delay.

Find more information about Attorney Seunghee Cha here.

The views expressed in this blog post represent general information. To address your particular and specific needs consult your own attorney. If you need help with referral to an attorney, contact the Franklin County Bar Association at (413) 773-9839 or the Worcester County Bar Association at (978) 752-1311.

Call Community Legal Aid at 413-774-3747 or toll-free 1-855-CLA-LEGAL (1-855-252-5342) during their intake hours (Monday, Tuesday, Thursday, and Friday from 9:30 a.m. to 12:15 p.m. and Wednesday from 1:30 p.m. to 4:15 p.m.). Apply for help anytime online by visiting www.communitylegal.org. Franklin County Office is located at 55 Federal St, Suite 120, Greenfield, MA. The office is no longer open for walk-ins. Services are free to people age 60 and older. Advocates are Jan Stiefel and Wendy Kane.