Plaintiffs in a class-action lawsuit against the Social Security Administration (SSA) might describe it as an open-and-shut case. When the SSA closed its field offices at the onset of the COVID-19 pandemic, it remained open for the purposes of denying benefits. But, plaintiffs say, the agency was effectively shut for low-income elderly adults and people with disabilities who needed to validate claims, or who sought to challenge the agency’s denial of their claims. The result: thousands of beneficiaries whose benefits were wrongfully reduced or discontinued, according to the suit.

Supplemental Security Income (SSI) is the basic federal safety net program for the elderly, blind and disabled, providing them with a minimum guaranteed income. As of September 2021, some 2.3 million people aged 65 or older were receiving SSI payments.

SSI recipients are required to demonstrate that they meet income and resource limits each month in order to qualify for assistance, and they must promptly report any changes in their financial circumstances that might affect their status. Failure to perform this routine, which traditionally many have done in person at local field offices, can result in the denial of benefits and a demand for repayment of benefits already sent.

While the SSA made provisions for people to report their information by phone, fax or mail after closing its offices in March 2020, this was easier said than done for the elderly and people with disabilities, according to the lawsuit, filed in U.S. District Court, Eastern District of New York, by the advocacy group Justice in Aging and others on behalf of a group of SSI recipients whose benefits were unlawfully reduced or terminated.

“These recipients—who are disabled, elderly, or both—are at high risk for serious consequences from COVID-19, which limits their ability to venture into their communities to secure needed documentation, go to the post office or to send faxes to SSA,” the lawsuit reads. Furthermore, even when recipients did file their information on time, often the SSA failed to process it for months, only to rule later that the beneficiaries had been overpaid and would have their future benefits docked.

Even a no-fault waiver of overpayment debts that the SSA issued in August 2020 did not mitigate the issue, because it was too limited, the lawsuit argues. For instance, to qualify for the waiver, the overpayment had to have occurred before September 30, 2020, and must have been brought to the SSA’s notice by the end of that year. Many people weren’t informed about the waiver, the lawsuit claims, and therefore could not apply for it.

Nearly 300,000 people have stopped receiving SSI since the closure of the offices, during a pandemic that has hit the elderly and those with disabilities particularly hard, the lawsuit notes. “Adults 65 and older have been the most at risk of death from COVID-19 and have constituted almost 80 percent of COVID-19 deaths. In addition, the risk of death from COVID-19 for persons with disabilities has been three times that of the general population.”

The plaintiffs, who are also represented by New York Legal Assistance Group and law firm Arnold & Porter Kaye Scholer LLP, have demanded a jury trial.

For Justice in Aging’s press release on the litigation, click here.

To learn more, reach out to the MSW team: contact Amy Stratton or Kristen Prull Moonan.

With the fate of the estate tax exemption uncertain, you may want to use the current large exemption to transfer assets to a trust to benefit your spouse. A spousal lifetime access trust (SLAT) can help transfer assets outside of your estate.

The current federal estate tax exemption is $11.7 million for individuals and $23.4 million for couples (in 2021). That means that as long as your estate is valued at under the exemption amount, it will not pay any federal estate taxes. The lifetime gift tax exclusion – the amount you can give away without incurring a tax – is also $11.7 million. However, if no action is taken in the meantime, in 2026 the exemption is set to drop back to the previous exemption amount of $5.49 million (adjusted for inflation).

Now may be a good time to take advantage of the large exemption by moving money from your estate into a trust. A SLAT is an irrevocable trust where one spouse (the donor) makes a gift to a trust for the benefit of the other spouse (the beneficiary). There can also be additional beneficiaries, such as children or grandchildren. While a gift to a trust would normally be taxed, the donor spouse can use the federal gift and estate tax exemption to transfer the funds to the trust tax-free. Once the funds are transferred to the trust, they are no longer in the donor spouse’s taxable estate, and the SLAT is also excluded from the beneficiary spouse’s taxable estate as well.

One of the benefits of a SLAT is that the funds in the trust can appreciate over time without the appreciation being included in your estate. While a SLAT is designed to let assets appreciate, the beneficiary spouse can take distributions from the trust as necessary, allowing some indirect access to the funds. Because a SLAT is irrevocable, it also protects the funds from your creditors, and, depending on how the SLAT is set up, it may protect the funds from your spouse’s creditors as well.

The downside of a SLAT is that once the funds are transferred, they are out of your control. If your spouse dies or you get divorced, you will no longer have any access to the funds. The funds will also not receive a “step-up” in basis when the donor spouse dies. In addition, a SLAT is a grantor trust, which means the donor spouse must pay income tax on any appreciation of the funds in the trust.

In order to take advantage of the benefits of a SLAT, it must be set up properly. Care must be taken when choosing a trustee—the donor spouse cannot be the trustee, and the beneficiary spouse can only serve as trustee if his or her power to make distributions is limited. If both spouses want SLATs, the trusts have to be structured to avoid being reciprocal trusts, which would add them to the spouses’ taxable estates.

Talk to your attorney to determine if a SLAT is a smart estate planning tool for your family. Reach out to the MSW team: contact Amy Stratton or Kristen Prull Moonan.

Is your family of the “Leave It to Beaver” variety — opposite-gender parents, the first marriage for each, one or more kids, all healthy and thriving? If so, your estate plan will probably be pretty straightforward. But if not, it’s not as simple and you have a lot of company.

The percentage of married households in the United States fell from 75 percent in 1960 to 49 percent in 2020. About 40 percent of all marriages end in divorce. Nearly 80 percent of people who divorce remarry — accounting for a pretty large proportion of the 49 percent of American households that are married.

About 1.5 million babies a year are born to unmarried women, more than a third of all births. This can complicate matters, especially when the father is not identified or, in the case of donated sperm, does not exist. It also can mean a greater need for planning when there is no obvious back-up parent if something happens to the mother.

If you are in a relationship, but not married, been married more than once, have children by more than one partner, or have beneficiaries who cannot manage funds for one reason or another, then it’s more important that you do estate planning and your planning cannot be plain vanilla. Here are a few tips to consider:

1. Give Your Partner Rights. There are laws in place empowering spouses and governing the distribution of property in the event of death. The so-called “rules of intestacy” provide that property will pass to spouses and children, or to parents if someone dies without a spouse or children. But no laws protect unmarried partners or unadopted children. There have been many cases of parents pushing aside the same-sex partners of their children upon death or incapacity. We can all use wills, trusts, durable powers of attorney and health care proxies to choose who should step in for us when needed and who should receive our property.
2. But Don’t Give the New Spouse Too Many Rights. All too often, despite the best of intentions and good will, when parents remarry the new family doesn’t bond. The children from prior marriages or relationships don’t become friends with one another or with the new spouse of their father or mother. Frequently, the death of one spouse means that all of the assets of both families end up with the surviving spouse and ultimately pass to his or her children and grandchildren. Frank discussions about what the new couple wants and planning to make sure it plays out as planned can prevent a lot of misunderstanding and resentment. Again, wills, trusts, durable powers of attorney and health care proxies can permit the new couple to choose the outcome they prefer, rather than just let life (and death) happen and the chips fall where they may
3. Don’t Be Afraid to Talk Pre-Nup. While most people entering a first marriage have no children and few assets, this is not the case with a second or third marriage. Before getting married again, the couple needs to talk about what they have in mind in terms of mutual financial support of one another and of their children from prior marriages and relationships. Then they need to put their understanding in writing so that down the road there are no misunderstandings or different memories of what they agreed. If memorialized in a prenuptial agreement, it will also be legally enforceable. If circumstances change, the couple can always modify their agreement.
4. Use Trusts. Wills are generally straight forward and blunt instruments. When you pass away, your property passes to the people you name. Wills do not easily permit more flexible planning. For instance, you may want to permit your new spouse to live in your home for as long as he wants, but for it to ultimately pass to your children and grandchildren. A trust permits you to plan for this scenario, giving your spouse rights, but someone else — the trustee — the power to manage the property and protect it for the next generation. Or a couple could pool all of their resources in a single joint trust for their benefit during their lives, with the funds remaining after they have both passed away to be distributed equally to the children they each bring to the new relationship or marriage.
5. Goals First, Planning Second.  No planning can take place in a vacuum or based on assumptions without asking questions. Anyone considering planning for themselves and for loved ones, whether in a traditional or non-traditional relationship, needs to start by listing their goals. Is their primary concern providing for themselves? Leaving an inheritance to children? Protecting a spouse or partner? Or a pet? Making sure children are independent, but have a safety net if necessary? Of course, most of us don’t have just one goal, but we should start by writing them all down. Then we can see if it’s possible to achieve all of them, or if we need to prioritize. Ultimately, the estate plan should reflect these goals and priorities. While this is true of anyone doing estate planning, it is more important the more family and non-family bonds one has because the plan will have to balance and prioritize more interests.

The bottom line is that our laws for distribution of property and rights in the event of incapacity are based on a vision of a marriage between one woman and one man with one or more children. However standard this ever was in reality, it is much less the norm today, almost certainly applying to fewer than half of American adults. For those who don’t fit the one nuclear family mold, planning is both more important and more interesting. Don’t put it off.

Contact your attorney to create your estate plan. Reach out to the MSW team: contact Amy Stratton or Kristen Prull Moonan.

Being able to make health care decisions for ourselves is so important to us, but what happens if you become incapacitated and are unable to voice your opinion?  If you don’t have a health care proxy or guardian in place, state law chooses who can make those decisions.

In an emergency, medical providers can take measures to keep us alive, but once the emergency has passed, the medical providers will look for someone to make the important medical decisions. If you are unable to make your own health care decisions, either temporarily or permanently, and you have nothing in place to allow someone else to make those decisions for you, then most state laws dictate who has the right to act on your behalf.

The list of surrogates who can make medical decisions for you usually goes in order of priority, starting with your spouse and adult children. Parents, siblings, grandchildren, and close friends may also be surrogates. These may not be the people you want making decisions for you, and not having your wishes spelled out can cause dissension among your family and confusion for medical professionals.

A few states (Massachusetts, Missouri, Nebraska, and New Jersey) do not have laws dictating who can act in an incapacitated person’s place. In those states, your family may have to go to court to get a guardian appointed. Even in states with surrogate laws, family members on the surrogate list may disagree over treatment and end up in court, asking the court to appoint a guardian. Guardianship is a legal relationship between a competent adult (the “guardian”) and a person who because of incapacity is no longer able to take care of his or her own affairs (the “ward”). The guardian can be authorized to make legal, financial, and health care decisions for the ward. The guardianship process is expensive, time consuming and very restrictive, so it is almost always a last resort.

The best way to avoid the state choosing who acts for you or the difficulty of guardianship is to have a health care proxy (or health care power of attorney) in place. A health care proxy is a document that allows you to appoint someone you trust to act as your agent for medical decisions. By executing a health care proxy, you are authorizing your agent to carry out your wishes. Doctors and other medical professionals will defer to the person named in the document to act on your behalf.

Contact your attorney to draw up a health care proxy. Reach out to the MSW team: contact Amy Stratton or Kristen Prull Moonan.

When applying for Medicaid’s long-term care coverage, in addition to the strict income and asset limits, you must demonstrate that you need a level care typically provided in a nursing home.

Whether you are applying for nursing home coverage or through a Medicaid waiver program for coverage at home, you must meet the level-of-care requirement set by the state. Each state has its own criteria for determining if you meet the mandated level of care, and the criteria is not always clear.

The state looks at an applicant’s functional, medical, and cognitive abilities to determine if care in a nursing home is called for. In general, you must be unable to care for yourself or pose a danger to yourself without outside help. The following are the factors usually considered when making a level-of-care determination:

• You need help with two or more “activities of daily living” (such as bathing, dressing, eating, moving, and going to the bathroom).
• You need frequent medical care, such as assistance with medication, injections, IVs, or other medical treatment.
• Your cognitive ability is impaired by Alzheimer’s disease or another form of dementia, you have trouble making decisions on your own, or you are unable to process information.
• You have behavior problems, such as wandering away from home or aggressiveness.

When assessing a Medicaid applicant, the state will conduct the evaluation. The state may require a doctor’s diagnosis, but it will also likely require the applicant to answer a series of questions about his or her ability to perform activities of daily living as well the applicant’s mental abilities and behavior problems and the applicant’s family’s ability to provide support.

To apply for Medicaid, contact your local Medicaid office. Your elder law attorney can help you navigate the Medicaid application process, which is not easy.  Reach out to the MSW team: contact Amy Stratton or Kristen Prull Moonan.

Pets are often regarded as a part of the family and increasingly their needs are accounted for in planning decisions. There is health insurance for pets, and most states allow for “pet trusts” to ensure that a cherished animal will be cared for after the owner’s demise. But can you and your pet spend eternity with each other as well? The answer depends on what state you are in and on the meaning of “with.”

Most states either have laws specifically prohibiting pets and humans to be buried together or are silent on the issue. But a growing number of states are adopting laws allowing some form of combined burial.

In 2016, New York enacted a law allowing the cremated remains of pets to be buried with their owners, although religious cemeteries are exempt and other cemeteries may opt out. New Jersey allows cremated human remains to be buried with a pet, but only in a pet cemetery.

In a law that has been on the books since about 2006, Pennsylvania allows cemeteries to have three sections – one for humans, one for pets and an area for both. Virginia, passed a law in 2014 permitting cemeteries to have clearly marked sections where pets and humans may be buried alongside one another. However, the pet must have been a companion animal under Virginia law and must have its own casket.

Another trend is “whole-family cemeteries,” which allow full-body burials of a pet’s remains in the family cemetery plot.  For the Green Pet-Burial Society’s list of whole-family cemeteries around the U.S., click here. For NPR’s coverage of this trend, click here.

These laws and practices are responding to growing interest. The majority of U.S. households own pets, and although the laws of most states prohibit burying pets in human cemeteries, funeral directors exercise discretion when it comes to placing personal objects – such as the cremated remains of a much-loved pet — in people’s coffins.

“They will tell you ‘not a day goes by when I don’t put an urn of an animal into the casket of a human being secretly for a family,’ ” Coleen Ellis, co-chair of the Pet Loss Professionals Alliance (PLPA), told the Philadelphia Inquirer in 2013. “So, while it’s been going on for a very long time, the trend is becoming more recognized where people are getting permission to do it.”

To learn the rules in your state,  reach out to the MSW team: contact Amy Stratton or Kristen Prull Moonan.