Category : Covid-19 Related

Introducing: QuickPlan for Expedited Estate Planning

QuickPlan is here.

We are offering expedited estate planning services for a limited number of clients each month. Our QuickPlan service will move you through the estate planning process quickly so you can remove “will” or “trust” from your to-do list.

This service is primarily intended for health care providers, first responders (police/fire) and others workers who are facing challenges due to COVID-19 but realize the importance of having a plan in place right now.

We remain committed to providing comprehensive estate planning services, such as wills, trusts, powers of attorney and other critical estate planning vehicles. We are meeting with our clients by phone, video conference and, when critical, in person. We continue to take all necessary precautions to safeguard the health of our clients and our team. See our COVID-19 information page here.

Call us today at 401.272.6300 so we can design your plan.  

Pandemic Relief: Retirement Account Owners Do Not Have to Take Required Distributions in 2020

Retirement account owners, many of whose retirement balances have been pummeled by a stock market drop due to the coronavirus pandemic, do not have to take mandatory withdrawals this year.

Federal law requires individuals who were age 70 1/2 before the end of 2019 to begin taking required minimum distributions (RMDs) from their retirement plan in April of the year after they turned 70. (Note that those who were younger than 70 ½ at the end of 2019 can wait until they turn 72 to take RMDs) The amount of the distribution is based on the value of the account at the end of the previous year, but the funds you withdraw are treated as taxable income in the year you take the distribution.

The coronavirus pandemic caused the stock market to tumble, depleting many retirement accounts. RMDs for this year would be based on the value of the account at the end of 2019, when the account likely had more money in it because the stock market was at a high point. Although the market has rallied somewhat, it still isn’t back to where it was at the end of 2019.

Recognizing this, the coronavirus relief bill known as the CARES Act waives the requirement that individuals take RMDs from their non-Roth IRAs and 401(k)s in 2020. This includes any 2019 distributions that would otherwise have to be taken in 2020.  Waiving RMDs will allow retirees to retain more of their savings. The waiver applies to individuals taking RMDs from their own retirement accounts as well as people who have inherited retirement accounts.

Generally, it is considered a good idea to not take a withdrawal if you do not need to because leaving the money in the account allows it to continue growing tax-deferred. Taking a withdrawal can also increase your 2020 tax burden. However, there are circumstances where it may make financial sense to take an RMD, for example if you need the money to live on. In addition, if you know you are going to be in a much lower tax bracket in 2020, but expect your tax bracket to increase next year, it might make sense to withdraw the money now so you can pay taxes on the withdrawal at a lower rate.

If you already took an RMD, you may have the option to return it to the account it came from or another retirement account. Usually RMDs cannot be rolled over into another account, but because the CARES Act waived RMDs, they are considered voluntary distributions. This means they can be redeposited or rolled over into a new retirement account (including a Roth account) as long as you do it within 60 days. The IRS has provided guidance, waiving the 60-day rule if you took an RMD between February 1 and May 15 as long as you roll over the RMD by July 15, 2020. This type of rollover can only occur once per year, so if you rolled over a distribution within the previous 365 days, you cannot do it again.

For questions and answers about the RMD waiver, click here and here. To learn more, contact Amy Stratton or Kristen Prull Moonan.

Seniors Affected by the Coronavirus Pandemic Have More Time to Apply for Medicare or Change Plans

The closure of Social Security offices has caused problems and worries for recently unemployed seniors who need to apply for Medicare after losing their employer coverage. In response, the federal government has announced that seniors affected by the crisis have additional time to enroll in Medicare or change plans.

With millions of people out of work and losing their employer health insurance due to the coronavirus pandemic, the need for Medicare coverage is critical. While it is possible for some seniors to apply for Medicare online, others need to provide more information, including individuals who did not sign up for Medicare Part B initially because they had health insurance through an employer. Seniors who are applying for Medicare Part B after losing their job need to provide proof of their employer policy along with their Medicare application to ensure they aren’t subject to substantial penalties. With Social Security offices closed, Medicare applicants may have difficulty figuring out how to submit the necessary information or getting answers to their questions about their application.

The Centers for Medicare and Medicaid Services (CMS) has announced changes to Medicare enrollment periods to help seniors affected by the coronavirus pandemic. Those who missed their opportunity to enroll in Medicare will have additional time to apply. CMS is providing “equitable relief” to seniors who:

  • were in their Initial Enrollment Period (IEP), General Enrollment Period (GEP), or Special Enrollment Period (SEP) between March 17, 2020, and June 17, 2020; and
  • did not submit an enrollment request to the Social Security Administration (SSA).

Seniors have until June 17, 2020, to submit an application. Applications can be submitted via fax to 1-833-914-2016 or mailed to the local SSA field office. Although SSA offices are closed for in-person service, offices are still processing applications received by mail. For the SSA’s Social Security Office Locator, go here: https://secure.ssa.gov/ICON/main.jsp.

For questions and answers on how to submit a Medicare application and what information is needed, click here.

In addition, CMS has announced an SEP for people to make changes to their Medicare Advantage and prescription drug plans if they missed the open enrollment period or a special enrollment period due to the coronavirus pandemic. The SEP is available until July 13, 2020.

For more information from CMS, click here.  Or, to learn more, contact Amy Stratton or Kristen Prull Moonan.

States May Not Terminate Medicaid Benefits During the Coronavirus Pandemic

Access to affordable medical care is especially important during a global health crisis. You should be aware that federal law prevents states that have accepted increased Medicaid funding from terminating Medicaid benefits while the coronavirus health emergency continues.

The Secretary of Health and Human Services has declared a nationwide public health emergency for COVID-19. In light of the public health emergency, the Families First Coronavirus Response Act provides that if you were enrolled in Medicaid as of March 18, 2020, the state (provided it accepted expanded Medicaid funds during the crisis) cannot terminate your benefits even if there is a change in your circumstances that would normally cause your benefits to be stopped. The law states that your Medicaid coverage must continue through the end of the month in which the Secretary declares that the public emergency has ended. The only exceptions to this non-termination rule are if you choose to terminate your benefits yourself or you move to another state.

States that already terminated a Medicaid recipient’s benefits should be contacting recipients and encouraging them to reenroll. If the state determined that you were “presumptively eligible” for benefits before March 18, 2020, this rule does not apply to you, and the state may terminate your benefits if it eventually concludes you are not eligible for benefits. However, if you have coverage because you are appealing a decision of ineligibility that was made before March 18, 2020, the state cannot terminate your benefits during the health emergency.

For an FAQ about the Medicaid requirements under the law, click here. To learn more, contact Amy Stratton or Kristen Prull Moonan.

Three Changes You May Want to Make to Your Estate Plan Now Due to the Pandemic

You may need to reevaluate some elements of your estate plan in light of the coronavirus pandemic. There are unique aspects of this crisis that your current estate planning documents may not be suited to handle.

The language in some estate planning documents that is fine under normal conditions may cause additional problems for you and your loved ones if you fall ill during the pandemic. Look over the following documents to see if they may need updating in order to fulfill your wishes:

  • Living will. A living will is a document that you can use to give instructions regarding treatment if you become terminally ill or are in a persistent vegetative state and unable to communicate your instructions. The living will states under what conditions life-sustaining treatment should be terminated. Many living wills contain a prohibition on intubation, which can be used to prolong life, even in a vegetative state. However, in the case of Covid-19, intubation and placement on a ventilator can actually save a patient’s life (although many patients who are intubated still die). If your living will contains a blanket prohibition on intubation, you may want to rethink that.
  • Durable Power of Attorney. A power of attorney (POA) allows you to appoint an agent to act in your place with regard to financial matters. A POA can be either current or springing. A current POA takes effect immediately, usually with the understanding that it will not be used until and unless you become incapacitated. A “springing” POA only takes affect when you become incapacitated. The problem is that springing powers of attorney create a hurdle for the agent to get over to use the document. When presented with a springing power of attorney, a financial institution will require proof that the incapacity has occurred, often in the form of a letter from a doctor. In the current chaotic environment of the coronavirus pandemic, getting a letter from a doctor will be difficult, if not impossible. Requiring your agent under a power of attorney to seek out a doctor to get a certification of incapacity will only add to their tasks and delay their ability to act on your behalf.  Consider changing the POA so that it can take effect immediately if needed.
  • Health Care Proxy. A health care proxy allows you to appoint someone else to act as your agent for medical decisions. It will ensure that your medical treatment instructions are carried out. Without a health care proxy, your doctor may be required to provide you with medical treatment that you would have refused if you were able to do so. Usually, the person who is appointed to act as your agent would confer with the doctors in person. That will likely be impossible during the coronavirus pandemic because family members often are not allowed in the hospital with sick patients. You need to make sure your health care proxy contains a provision that expressly authorizes electronic communication with your agent.

Consult with your attorney to make sure these documents and your other estate planning documents express your wishes during this time.  To learn more, contact Amy Stratton or Kristen Prull Moonan.

How Your Stimulus Check Affects Medicaid Eligibility

The coronavirus relief bill includes a direct payment to most Americans, but this has Medicaid recipients wondering how the payment will affect them. Because the payment is not income, it should not count against a Medicaid recipient’s eligibility.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides a one-time direct payment of $1,200 to individuals earning less than $75,000 per year ($150,000 for couples who file jointly), including Social Security beneficiaries. Individuals earning up to $99,000 ($198,000 for joint filers) will receive smaller stimulus checks. Payments are based on either 2018 or 2019 tax returns.

The basic Medicaid rule for nursing home residents is that they must pay all of their income, minus certain deductions, to the nursing home. If the stimulus payment were considered income, it would likely have to go straight to the nursing home. Since in most states Medicaid recipients cannot have more than $2,000 in assets, there was also concern that the stimulus payments could put many recipients over the asset limit.

In a blog post, the commissioner of the Social Security Administration (SSA) has clarified that the SSA will not consider stimulus payments as income for Supplemental Security Insurance (SSI) recipients, and the payments will be excluded from resources for 12 months. Because state Medicaid programs cannot impose eligibility requirements that are stricter than SSI requirements, the payments should not affect Medicaid eligibility.

To learn more, contact Amy Stratton or Kristen Prull Moonan.

 

Is It a Good Idea to Bring Your Parent Home from the Nursing Home During the Coronavirus Pandemic?

With the coronavirus pandemic hitting nursing homes and assisted living facilities especially hard, families are wondering whether they should bring their parents or other loved ones home. It is a tough decision with no easy answers.

The number of coronavirus cases in nursing homes and assisted living facilities across the country continues to grow. A Washington state nursing home was one of the first clusters of coronavirus reported in the United States, with at least 37 deaths associated with the facility.  NBC news reported on April 16 that coronavirus deaths in long-term care facilities across 29 states had soared to 5,670.  “In New Jersey,” NBC added, “the virus has spread to more than 95 percent of the state’s 375 long-term care facilities, according to state health officials.”

In an effort to contain the virus’s spread, most long-term care facilities are limiting or excluding outside visitors, making it hard to check on loved ones. Social activities within the facility may also be cancelled, leading to social isolation for residents. In addition, long-term care facilities face staffing shortages even in the best of times. With the virus affecting staff as well as residents, facilities are having trouble providing needed care. Assisted living facilities, which are not heavily regulated, may have greater trouble containing the virus than nursing homes because their staff is not necessarily medically trained.

With this in mind, many families are considering bringing their loved ones home. A Harvard epidemiologist is warning that nursing homes are not the best place to house the vulnerable elderly at this time. And a local judge in Dallas has recommended that families remove their loved ones from infected facilities. Before taking this extreme step, however, you need to consider the following questions:

  • Is your family able to provide the care that your loved one needs? Some patients require help with eating, dressing, medication, and going to the bathroom. You need to consider whether you can adequately provide that care at home. In addition to your loved one’s practical needs, you need to think about your physical and emotional stamina. Also, is your house set up to safely accommodate your family member? Are there a lot of stairs? Does the bathroom have rails? If your loved one has dementia, there may be other considerations to take into account.
  • How well can you prevent infection? Will you be better able to prevent infection than a nursing home? If your entire household is homebound, you may be in a good position to prevent bringing home the virus. However, if one or more members of your household is working outside of the home, you will have to take extra precautions to make sure you don’t bring the virus to your loved one. Are you taking the necessary precautions to keep your house and yourself disinfected?
  • Will the resident be allowed to return to the facility when the threat of the virus has abated? If you take your family member out of the nursing home or assisted living facility, the facility may not let your family member back in right away. You should check with the facility to determine if your loved one will be able to return.

Bringing a family member home is a hard decision and it depends on the individual circumstances of each family. For more on the considerations involved, click here and here.

To learn more, contact Amy Stratton or Kristen Prull Moonan.

 

From PBN: “Pandemic has added much more complexity to Stratton’s role”.

Amy Stratton of the Providence law firm Moonan, Stratton & Waldman LLP guides clients through wills, probate and estate planning. With founding partner Irving Waldman practicing part time, the small firm is run by Stratton and Kristen Prull Moonan, offering clients legal services that are – by design – personal and meant to cover all bases.

“We are not only attorneys, we’ve become trusted advisers,” Stratton said recently. “We know their families, businesses, everything about them. We know much more than the traditional attorney. I can’t think of a better way to practice law. I’m very lucky.”

Now the COVID-19 pandemic has added much more complexity to Stratton’s role.

With the coronavirus risk, the focus of Stratton’s practice – which involves estate planning and business succession – is even more pressing.

See the full article from PBN here.

Medicare and Medicaid Will Cover Coronavirus Testing

With coronavirus dominating news coverage and creating alarm, it is important to know that Medicare and Medicaid will cover tests for the virus.

The department of Health and Human Services has designated the test for the new strain of coronavirus (officially called COVID-19) an essential health benefit. This designation means that Medicare and Medicaid will cover testing of beneficiaries who are suspected of having the virus. In order to be covered, a doctor or other health care provider must order the test. All tests on or after February 4, 2020 are covered, although your provider will need to wait until after April 1, 2020, to be able to submit a claim to Medicare for the test.

Congress has also passed an $8.3 billion emergency funding bill to help federal agencies respond to the outbreak. The funding will provide federal agencies with money to develop tests and treatment options as well as help local governments deal with outbreaks.

As always, to prevent the spread of this illness or other illnesses, including the flu, take the following precautions:
•    Wash your hands often with soap and water
•    Cover your mouth and nose when you cough or sneeze
•    Stay home when you’re sick
•    See your doctor if you think you’re ill

For Medicare’s notice about coverage for the coronavirus, click here.

To learn more, contact Amy Stratton or Kristen Prull Moonan.

How to Assist Aging Parents During the Pandemic

If your parents are getting on in years, you may be helping them with their finances and other matters, such as medical visits and shopping. You may live close by and be able to visit weekly or more often. Or you may live far away and were visiting every few months before the coronavirus struck. Either way, due to COVID-19 you may not be able to visit right now, whether because flights are no longer available, you’re working more than full-time home-schooling your children, your parents’ residence has barred visitors, or you yourself are not safe because you have to continue to go out in the world. The last may especially be the case if you are a medical professional.

So, how can you continue to assist your parents from a distance? The answers depend on the types of help you have been providing, but here are a few options:

Finances

If you have been helping your parents pay bills and manage their finances and can no longer drop by to help them write out checks, your parents may be able to give you online access to their accounts. While, technically, the bank or financial institution may not permit anyone other than the account holder to have online access, if your parent provides you with their username and password, who’s the wiser? Extraordinary times can require out-of-the-ordinary solutions.

If your parent doesn’t already have online access to their accounts, you should be able to set this up through a conference call with your parent and the financial institution. With newer two-factor verification, the institution may send a text or email every time you log on to the account. If you’re setting up the online access with your parent, you should be able to use your cell phone for these texts. If not, you’ll have to coordinate with your parent or see if you can change the dual-verification contact information.

It might also make sense to have your parents’ mail forwarded to you for the time being, or work on having regular bills, such as for utilities, either sent to your address or turned into e-bills to make it easier for you to pay them on-line.

For the future, make sure you already have online access to your parents’ accounts, preferably doing so under the financial institution’s rules, whether being named as a joint owner, under a durable power of attorney, or as co-trustee of a revocable trust. We recommend this even in the absence of a pandemic and if your parents can still take care of their finances themselves right now. It allows you to step in seamlessly if and when necessary and it gives you the ability to see what’s going on with your parents’ accounts. While your parents may not want to be monitored, older Americans are prime targets of scams. Having this oversight ability can help you identify any unusual disbursal from your parents’ accounts and intervene as appropriate, while permitting your parents to continue to handle their own finances.

When things get back to normal, even though you have online access, you and your parent still may want to go back to your assisting them with writing checks. Not only will this give them back a sense of control and normalcy, it will give you a chance to visit with them and make sure they’re doing well.

Health Care

Virtual assistance with health care is more difficult than with finances. Doctors, their offices, and pharmacies may be barred by HIPAA restrictions from communicating with you. They are probably not set up to video conference with you when your parent visits for a check-up or medical or dental procedure. The one silver lining in this regard, is that in all likelihood all of your parents’ non-emergency medical visits have been cancelled for the duration of the pandemic.

Many medical providers now are expanding their ability to offer telehealth visits so they can meet with patients by video conference. It’s an open question whether these systems are equipped to offer small group meetings. While such sessions must be HIPAA compliant, your parents’ authorization to include you should do the trick.

In general, you will be able to communicate more easily with your parents’ medical providers if you have both a health care proxy and a HIPAA release. While the health care proxy is more comprehensive and gives you the power to make health care decisions for your parent, technically it’s only effective when a doctor has found your parent to be incapable of making their own medical decisions. It may be of little or no help in the current situation.

A HIPAA release can be effective any time, giving medical personnel the ability to communicate with you and giving you the power to access the medical records of homebound parents. In addition, while your parent can name only one agent at a time on a health care proxy, they can name any number of agents on a HIPAA release.

While it’s good to have both documents in place ahead of time and they are normally included in any estate planning package prepared by a law firm, downloadable forms are available and do not have to be notarized, though the health care proxy requires two witnesses.

You can take these steps now in this emergency and when it’s over, make sure you and your parents have everything in place for the next one (while still hoping there isn’t a next one).

To learn more, contact Amy Stratton or Kristen Prull Moonan.