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.

Social Security Shutters ‘Petri Dish’ Offices in Response to Coronavirus Outbreak

To protect its workers and the public during the coronavirus pandemic, the Social Security Administration (SSA) has suspended face-to-face service to at its field offices and hearings offices nationwide until further notice. Payments to the nearly 70 million Social Security beneficiaries will not be affected.

While in-person appointments will still be made for certain critical services (see below), the SSA is encouraging beneficiaries to transact as much business as possible online using the agency’s website. (If you don’t have an online account yet, click here.)

Certain services also will continue to be available via the agency’s toll-free line, (800) 772-1213 or from local offices’ General Inquiry lines. (For the local office locator, click here.)

Why the Closure?

Budget cuts to Social Security over the years have led to crowded offices and long wait times.  With the advent of the coronavirus outbreak, this went from being an inconvenience to a public health threat.  The union representing the SSA’s 61,000 workers was deeply concerned about the health of the agency’s workforce as well as the danger to the public.

“The offices are petri dishes,” Richard Couture, a spokesman for the union, told The New York Times.  “People are sitting there for a long time, magnifying and multiplying the risk of infection for everyone there, and to people on the outside.”

How to Get in Touch During the Shutdown

Examples of tasks or inquiries that can be accomplished online include:

  • Applying for retirement, disability, and Medicare benefits;
  • Checking the status of an application or appeal;
  • Requesting a replacement Social Security card (in most areas); or
  • Requesting a replacement Medicare card.

(For a complete list, click here.)

Phone services will also be available, although the SSA says it is “focusing on providing specific critical services to people in dire need.” Examples of how the SSA can help by phone include:

  • If you did not receive your monthly payment;
  • If you are currently homeless or at risk of becoming homeless; or
  • If your benefits were suspended and can now be reinstated.

Expect long wait times if calling, however.

In-Person Appointments

In-person help will still be available for a limited list of critical services, including:

  • Reinstatement of benefits in dire circumstances;
  • Assistance to people with severe disabilities, blindness or terminal illnesses; or
  • Help for those in urgent need of eligibility decisions for Supplemental Security Income or Medicaid eligibility related to work status.

If you require such services, you must call in advance; there are no walk-ins at the field offices.

What if you already had a standing appointment or disability hearing scheduled?  If this is the case, the SSA will call you to reschedule or to take care of the issue by phone. Unfortunately, this call may come from a private phone number rather than from a government phone because employees are working remotely and do not necessarily have government-issued phones. Identity theft phone scams where callers impersonate SSA workers were already on the rise, and this will likely only add to beneficiaries’ confusion. Be aware that agency employees will never inform you that your Social Security number has been suspended, demand payment, or seek credit card information.  (Scams taking advantage of the situation have already started.)

For full details on changes to SSA services brought on by the response to the coronavirus, go to the SSA’s Social Security & Coronavirus page, https://www.ssa.gov/coronavirus/

If you are enrolling in Medicare, you can get free counseling from your State Health Insurance Assistance Program (SHIP).  To find your state program, click here.

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

 

 

 

The Coronavirus Pandemic Presents Ample Reasons to Reevaluate Your Estate Plan

The coronavirus health emergency is a reminder that life is unpredictable, and it makes sense to be prepared. It may sound self-serving, but the threats to life and finances posed by the pandemic offer ample reason to reevaluate your estate plan — or create one if you haven’t already.

Experts recommend that you will need to revisit your plan after certain key life events, including changes in health, finances, or family status. Unfortunately, this global health crisis can affect all of those aspects of your life. You should make sure you have these essential documents in place to protect yourself and your family:

  • Medical Directives. A medical directive may encompass a number of different documents, including a health care proxy, a durable power of attorney for health care, a living will, and medical instructions. The exact document or documents will depend on your state’s laws and the choices you make. Both a health care proxy and a durable power of attorney for health care designate someone you choose to make health care decisions for you if you are unable to do so yourself. A living will instructs your health care provider to withdraw life support if you are terminally ill or in a vegetative state. A broader medical directive may include the terms of a living will, but will also provide instructions if you are in a less serious state of health, but are still unable to direct your health care yourself.
  • Power of Attorney. A power of attorney allows a person you appoint — your “attorney-in-fact” — to act in your place for financial purposes when and if you ever become incapacitated. In that case, the person you choose will be able to step in and take care of your financial affairs. Without a durable power of attorney, no one can represent you unless a court appoints a conservator or guardian. That court process takes time, costs money, and the judge may not choose the person you would prefer. In addition, under a guardianship or conservatorship, your representative may have to seek court permission to take planning steps that she could implement immediately under a simple durable power of attorney.
  • Will. A will is a legally-binding statement directing who will receive your property at your death. If you do not have a will, the state will determine how your property is distributed. A will also appoints a legal representative (called an executor or a personal representative) to carry out your wishes. A will is especially important if you have minor children because it allows you to name a guardian for the children. However, a will covers only probate property. Many types of property or forms of ownership pass outside of probate. Jointly-owned property, property in trust, life insurance proceeds and property with a named beneficiary, such as IRAs or 401(k) plans, all pass outside of probate and aren’t covered under a will.
  • Trust. A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a “trustee,” holds legal title to property for another person, called a “beneficiary.” Trusts have one set of beneficiaries during those beneficiaries’ lives and another set — often their children — who begin to benefit only after the first group has died. There are several different reasons for setting up a trust. The most common reason is to avoid probate. If you establish a revocable living trust that terminates when you die, any property in the trust passes immediately to the beneficiaries. This can save time and money for the beneficiaries. Provided they are well-drafted, another advantage of trusts is their continuing effectiveness even if the donor dies or becomes incapacitated.
  • Beneficiary Designations. Although not necessarily a part of your estate plan, at the same time you create an estate plan, you should make sure your retirement plan beneficiary designations are up to date. If you don’t name a beneficiary, the distribution of benefits may be controlled by state or federal law or according to your particular retirement plan. Some plans automatically distribute money to a spouse or children. Although others may leave it to the retirement plan holder’s estate, this could have negative tax consequences. The only way to control where the money goes is to name a beneficiary.

Contact your attorney to make sure your estate plan is complete. Many attorneys are set up to meet with clients remotely, and states are beginning to temporarily relax their rules regarding requirements that documents be notarized in person.

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