By Sally M. Wagley, Maine elder law attorney

 The cost of paying privately for care in a nursing home rose 4.4% in 2011, nationwide, according to a survey done by MetLife.  The current cost of one year in a nursing home is, on average, $87,000.

The cost of care in a Maine nursing home is at least this much, if not more:  generally in the range of $7000 to $8000 per month.

 What might this mean for you and members of your family?  Consider the following:  

• Do you have adequate income and savings to cover years in a nursing home? 
• If you were in a nursing home and your spouse were at home, how much would your spouse need in order to remain comfortable?
• Is it important to you to pass on something to the next generation?   How would you feel if your savings were completely used up on the cost of your care, before you die?
• What if you had to sell your home or other property in order to pay for your nursing home care?
• Are you aware that Medicare covers only short stays in a nursing home –only for skilled care and rehabilitation? 
• Do you know what the Medicaid program (called “MaineCare” in Maine) covers in your state?
• What is the quality of care at nursing home and assisted living facilities in your area?
• Have you checked out long term care insurance, to see what it covers and what it would cost?
• Have you met with a elder law attorney (also referred to as an “elder lawyer” or “elder care attorney”) to find out what coverage might be available to cover some of the cost of your care, and what you can do to get that coverage? 

Be aware that each state is different with respect to nursing homes, Medicaid and other programs. While there may be books on this subject at your local book store, those books won’t tell you the specific things you should know about Maine nursing homes and Maine elder care.  Also, beware of advice given by neighbors and friends.  Each person’s situation is different, and what may have helped someone else won’t necessarily help you.   

In my blogs, I will be addressing some of these issues in the coming weeks.

by Sally M. Wagley, Maine estate planning and elder law attorney

A concern that older people often bring to estate planning and elder law attorneys is how they can make sure that, at their deaths, the right people receive treasured heirlooms and other items.  These items include jewelry, antiques, firearms, tools, musical instruments, art work, knick-knacks, and the like.  Lawyers refer to this “stuff” as “tangible personal property.”  

It is not necessary to list things in the last will and testament prepared by your estate planning lawyer.  Instead, you can list these things in a separate writing, which your will refers to.  This separate writing can be in your own handwriting or typed.  What’s important is that it be signed by you and dated.

This list can be dated before or after the will prepared by your lawyer – it doesn’t matter.  You can change it time and time again, without going back to your estate planning lawyer to get your will changed.   The best place to keep this list is together with your will.   

Some people, instead of preparing this list, go around their homes and put post-it notes on things, naming the person to receive each item.  This will work out fine as long as your family agrees about who gets what.  However, if they don’t agree, there is no way to make sure that these things will go to the right people.  This can cause problems within your family and could even require a judge of the Maine probate court to resolve the issue.   Therefore, it is best to put your wishes in writing.

by Sally M. Wagley, estate planning and elder law attorney

 Everything in life changes – especially the law on estate tax.

Since I started practicing as an estate planning lawyer in Maine almost 14 years ago, estate tax laws have changed many times.   This last year, 2011, has been particularly eventful:

•  The federal estate and gift tax exemption increased from $3.5 million to $5 million dollars (after a very brief period during which the federal estate tax was repealed altogether).  
• The Maine estate tax exemption will increase from $1 million to $2 million dollars, effective January 1, 2013.   

 If you are a Maine resident and have accumulated significant wealth, a simple will may not be enough. You may need an estate plan which aims to reduce or even eliminate estate tax, thus preserving what you’ve saved for the next generation or for charity.  Strategies  include: 

•  Trusts for the benefit of spouse, children, grandchildren or other family members;
•  Gifts to charity, including gifts to charitable trusts;
•  Bequests which skip a generation;
•  Annual gifts of up to $13,000 per person to family members;
•  Funding college savings plans for grandchildren. 

Since the laws on estate tax change so often (and will continue to change), I like to incorporate flexibility into clients’ estate plans, enabling surviving family members to make decisions at the time of your death based on the law in effect at that time, based on the size of your estate and based on th e needs of surviving family members.   An example is a will which gives your surviving spouse the ability to “disclaim” his or her inheritance from you, directing assets to one or more tax-saving trusts, if it appears at that time to be beneficial.    This is just one of a number of approaches to formulating a tax-oriented estate plan.

The information provided here is for educational purposes only, and should not be construed as legal advice or an answer to a specific legal problem. 

Sally M. Wagley practices in the areas of elder law,  estate planning and estate administration, with the firm of Levey and Wagley, P.A. in Winthrop, Maine, www.leveyandwagley.com.   

By Sally M. Wagley, elder law attorney

As an attorney focusing on elder law, I am carefully watching the Maine Governor Paul LePage’s proposed cuts to MaineCare programs serving the elderly.   My last blog post was about the proposed elimination of coverage for residential care (also known as “assisted living” or “boarding home” care).  

The Governor’s budget proposal also includes cuts to prescription drug assistance to Maine’s elderly.   According the Spectrum Generations, the proposed MaineCare cuts are as follows:

• Prescription Drug and Health Care Assistance for People over 65 and People with Disabilities: Approximately72,000 Maine elderly and people with disabilities would lose some or all assistance they currently receive to pay for Medicare and/or prescription drug costs. Of the 72,000, over 20,000 (with incomes between 135-185% FPL) will lose all assistance they currently receive through the Medicare Savings Program (MSP) to help pay for Medicare premiums, co-payments and deductibles, prescription drug costs, and coverage through the so-called “donut hole”. The remainder, approximately 52,000 people, will lose some assistance with Medicare and/or prescription drug costs.

• Prescription Drug Assistance for Certain People over 62 and People with Disabilities: Approximately 5,000-6,000 low-income older adults (over age 62) and people with disabilities who do not have Medicare will lose all assistance they currently receive to afford their prescription medications through the Drugs for the Elderly program (DEL). These are individuals with serious health conditions such as diabetes, heart disease and Lou Gehrig’s Disease.

These MaineCare cuts, of course, must have legislative approval in order to go into effect.  Hearings are being held at the State House right now.  More details will be coming.

by Sally M. Wagley

This week Maine’s governor released his proposal for cuts to the MaineCare (Medicaid) program.   A number of the proposed cuts will affect Maine’s elderly. 

An area of particular concern is the elimination of MaineCare coverage of expenses faced by elderly and disabled people who live in residential care and assisted living facilities.   As an elder law attorney, I have many clients in these facilities who cannot afford to pay the monthly cost of $4000 to $7000, who are on MaineCare or will need to apply for it soon.  I also have many clients who are stressed out caregivers who cared for an elderly relative for as long as possible, before reaching the point of exhaustion.  

Assisted living and residential care facilities are for elderly people, many of them with Alzheimer’s and other forms of dementia, who need supervision around the clock. In these settings, they are provided with security, reminded when to eat, dress and bathe, are helped with medication, and provided assistance with some activities of daily living.

 Where will these people go if they can’t get MaineCare and can’t afford to pay privately?  Most will not meet the criteria for nursing home level of care.  So they will have to return to live with exhausted spouses and other relatives, many of them also elderly and with health problems).   For those without families or homes to go to, or whose families simply cannot take them back, the outcome is not clear. 

 The governor’s proposal is at this point just that — a proposal, which will need legislative approval before it becomes a reality.  Regardless of whether you agree with the governor, it is important to be aware that this change may be coming.

by Sally M. Wagley, Esq.

For most children, age 18 is regarded as a significant milestone, another marker on the road to independence. However, when a child has a mental or emotional disability, he or she may continue to be dependent on parents for decisions about living arrangements, health care, social services and finances. Once a child in Maine turns 18, a parent no longer has legal authority to make the child’s decisions. Health care providers may deny the parent access to the child’s medical information, and financial institutions may deny the parent access to the child’s money. In my role as a “special needs” lawyer, I help families in this time of transition.

Some children with disabilities may have the capacity and understanding to delegate authority to a parent under a durable financial power of attorney or health care directive. This is a simple document which can be executed in a lawyer’s office, with a minimum of time and expense. Other children, however, may be so disabled that they are unable to understand and to sign such a document. In this situation, the parent should seek to be appointed as the child’s guardian (and perhaps conservator as well, as discussed below).

Maine’s county probate courts are the courts which handle guardianship matters. These are the steps to obtaining guardianship of an adult disabled child in Maine:

1. Petition for appointment of guardian: The parent files a petition and related forms asking the court to appoint the parent as the child’s guardian and files the papers with the court.

2. Physician’s/psychologist’s report: A professional (such as the child’s physician) fills out a court form stating that the child needs a guardian.

3. Appointment of visitor: The court appoints a visitor to meet with the child and parents and report back to the court as to whether a guardianship is appropriate.

4. Hearing: A hearing is scheduled. Important people in the child’s life receive notice of the hearing. In many of Maine’s 16 probate courts, the hearing is fairly relaxed. The judge may ask a few questions and may make sure that the guardian understands his or her responsibilities. If it is clear to the judge that the appointment of a guardian is in the child’s best interest, the judge will immediately issue an order appointing the parent as the child’s guardian.

5. Conservatorship: If the child has money or other assets in excess of $5000, the parent may also need to seek appointment as the child’s conservator in order to be able to handle the child’s funds. This request should be made to the court at the same time as guardianship is requested.

The Maine probate courts try to make it as simple as possible for parents in this situation to become their child’s guardian. However, to the uninitiated, the process may be daunting. As attorneys with expertise in helping families with disabled children, we can help you either by representing you in the guardianship matter (appearing with you in court), or we can simply assist you with the paperwork, so that you can represent yourself. If you would like our help, please contact us for an appointment, law@leveyandwagley.com.

by Michael J. Levey, Esq.

When a marriage occurs later in life, each partner has his or her own lifelong experience.  Each has a substantial personal, family and economic history.  In addition, each party has separate assets and liabilities, developed separately from the new marital partner. And quite importantly, each partner has a family constellation (children, grandchildren and others) separate from the new marital partner.

When thinking of marrying, the partners inevitably consider the impact the new marriage will have on their separately developed economic and personal lives.  The questions which arise are:

• If my new marriage ends in divorce, how can I protect my separately developed assets?
• If my new marriage ends in divorce, will I be entitled to support, or will I have to pay support?
• If I remarry, how can I ensure that upon my death, my separate assets will go to my own, original family?
• If I make an agreement with my new partner about these subjects, will that agreement “hold up in court”? 

Maine law, in the Uniform Premarital Agreement Act, provides answers to these questions.  The Act permits parties to have an agreement which is made in contemplation of the marriage.  Under the act, the agreement must be made before the marriage and then takes effect when the couple is married.  The agreement must be in writing and signed by the parties.  The agreement can be modified or terminated during the marriage if both parties agree.

If my new marriage ends in divorce, how can I protect my separate assets?  The Act permits a prenuptial agreement to contain the following kinds of provisions, giving a party the opportunity to protect that party’s separate assets:

• The agreement can state that the separate real estate, accounts or retirement assets of a party are to remain the separate property of its owner, and that additions to and increases in value to any such property remain the separate property of its owner.
• The agreement can give a party the exclusive right to manage, re-invest and otherwise completely control that party’s separate assets.
• The agreement can allow a party to keep that party’s separate assets in the event of divorce.

 If my new marriage ends in divorce, will I be entitled to support, or will I have to pay support?  A prenuptial agreement can state that upon divorce neither party will pay support to the other.  The agreement can also set forth a specific amount of spousal support. The agreement can state that spousal support will be terminated later, for example upon remarriage of the spousal support payee.

If I remarry, how can I ensure that upon my death, my separate assets will go to my own, original family? The prenuptial agreement can give a party the opportunity to pass his or her separate assets to that spouse’s original family or other loved ones upon death. A premarital agreement can prevent a surviving spouse from demanding a one-third “elective share” amount from the deceased spouse’s estate and from exercising other rights otherwise available under the law. The agreement can state that the surviving spouse is to receive a certain limited amount, and can require one or both spouses to have wills providing for this specific amount.

If I make an agreement with my new partner about these subject matters, will that agreement “hold up in court”?  The Act upholds these agreements, if they are made in the correct fashion (made in contemplation of marriage, executed before the marriage, written and signed).  However, the court will not enforce the agreement if it was not executed voluntarily by the parties.  The court will not enforce the agreement if it was an “unconscionable” agreement and the victimized party was kept in the dark about the assets of the other party.  The following suggestions help keep premarital agreements enforceable:

• Full financial disclosure:  Before signing the agreement, the parties should make an accurate and complete disclosure to each other of their separate assets, liabilities and income. 
• Separate lawyers for each spouse: Before signing the agreement, each party should have access to separate and independent legal advice.  

Does every person who is thinking of marrying later in life need a premarital agreement?  Does every person have to keep his or her assets separate from a new spouse? 

          Of course not.  The law doesn’t require premarital agreements, but only permits them.  Every person and every marriage is unique. Some couples, for very good reason, want to blend their assets during their new marriage and to permit flexibility as to what happens in the event of divorce or death.  I have clients who, after reviewing the relevant facts, have written premarital agreements, and I have had other clients who have chosen not to write them.  The important point is that people marrying later in life ought to give careful attention to the above considerations, so that they can choose the legal option which best fits their situation. 

The information provided here is for educational purposes only, and should not be construed as legal advice or an answer to a specific legal problem.

 Michael J. Levey practices family law with the firm of Levey and Wagley, P.A. in Winthrop, Maine. Go to www.leveyandwagley.com.     

Here in Maine (“Vacationland”), one of our favorite activities is going “up to camp.”  People treasure their waterfront property and hope that it will remain in the family for generations.   While it is impossible to control the future from your grave, you can increase the chances of the property staying in the family by placing the property in a trust or a limited liability company (LLC). Such an arrangement typically provides:

• Who will make decisions about the property. If you use a trust, the decision maker(s) will be called “trustees” if you use a trust.  You might appoint one of your children as trustees, or perhaps all of them, to act as a group.
• The arrangement will state how decisions are to be made about the property: Will one person make decisions unilaterally?  Or will decisions be made by a group, by majority vote?
• Who will pay property taxes, insurance, utilities and maintenance?  Will it be shared by all members of the family who get to use it?  What if one person can’t afford these expenses?
• How will a schedule be arrived at, enabling different family members to use the property?
• What if one of the beneficiaries isn’t using the property much and wants out of the arrangement?  Will other beneficiaries be required to buy him or her out? If so, how will they decide on a price?
• What happens if a beneficiary dies?  Does that beneficiary’s share go to the other beneficiaries?  Or does it go to the deceased beneficiary’s children?

Families are often tempted to develop such an arrangement informally.  However, this type of arrangement is complex, requiring the consideration of many possible scenarios as well as tax considerations.  Therefore, it is essential to consult an attorney before deciding to go in this direction.  

Sally M. Wagley assists older and disabled people and their families in the areas of elder law,  estate planning and estate administration with the firm of Levey and Wagley, P.A. in Winthrop, Maine. Go to www.leveyandwagley.com.   

“Probate” – a word that creates fear and dread in the hearts of many. (For more information on what “probate” is, see my previous blog, “What is Probate?”)  But the truth is:  While the probate process in some other states is complex, time consuming and expensive, Maine has a streamlined probate process which for most people is relatively fast and is no more expensive than alternatives to probate.

 Reasons to avoid probate.  Nevertheless, in some instances, it can make sense to make arrangements to avoid probate.  This is true if: 

• You have real estate outside of Maine; or
• You have concerns about privacy and want to keep the details of your estate plan private.

 Ways to avoid probate. A number of simple ways can be used to avoid probate, such as: 

• Putting real estate, bank accounts and investment accounts in joint names;
• Designating beneficiaries on investment accounts, retirement plans, annuities and life insurance; 
• Using “transfer on death” designations (“TOD” or “POD”) on accounts.

 Using a Revocable Living Trust to avoid probate. A “revocable living trust” may also be part of a plan to avoid probate.   This is done as follows:   A lawyer writes up a trust document.   Under this document, you name yourself as trustee. This means that during your life, and for as long as you are mentally competent, you remain in control of your assets.  You are able to add assets to or remove assets from the trust, spend money from it, change the terms of the trust, or revoke the trust altogether. You also name a “successor trustee”:  a trusted person (such as a family member or bank) to take charge of the assets when you die, or possibly sooner, if you become mentally incompetent.  When you die, the successor trustee pays bills and then distributes money and property according to the directions in the trust document, to the people you name in the document and in the amounts directed by you.  This can all be done without anyone having to file papers in the probate court. This preserves your privacy.  And if you have real estate outside of Maine, it avoids the necessity of filing for probate in another state, which can indeed be expensive.

 When considering whether to have a trust of this type prepared, be aware that the fees will be higher than if you go with a simple will.  This is because, in addition to the drafting of the trust document, deeds must be prepared, transferring your home and other real estate to the trust. Your bank and investment accounts will also need to be transferred to the trust, and beneficiaries will need to be changed on your retirement plans and life insurance.    This will all require more time on the part of your attorney, for which you should expect to be billed. 

(This blog is by attorney Sally M. Wagley, a Maine elder law attorney with the firm of Levey & Wagley, P.A., in Winthrop, Maine.  The information provided on this website is for informational and educational purposes only.   This information should not be construed as rendering legal advice or offering an answer to a specific legal problem.)

If you have a minor child or a child in the late teens or early twenties, you should consider leaving your child’s inheritance to a trust, rather than to your child outright. Why? 

• The establishment of a trust will avoid the necessity of having a court appoint a conservator for a child under age 18.  (Even the child’s surviving parent or guardian will be required to have to seek appointment as conservator before funds can be distributed from your estate and used for your child’s benefit.  This is required by law, and will take time and money)
• A trust will prevent your child’s receiving his or her inheritance at age 18.  Even responsible children in this age group can make impulsive financial decisions.  The placement of the funds under the control of a trustee will ensure that your child’s inheritance is responsibly managed until your child is ready to do this on his or her own.
• A trust will enable you to choose a reliable person to act as trustee for your child.  It is not necessary that it be a bank or trust company:  you can choose a family member or friend.
• A trust can direct what types of things your child’s inheritance can spent on, such as college or vocational training. 

A trust of this type need not be expensive or complicated.   The trust can be relatively simple and made part of your will.  It is not necessary to place funds in the trust now.  Rather, funds (or other assets) will go into the trust upon your death.  

I have prepared many hundreds of these trusts for clients with children who are minors or young adults.   Typically the trust directs the trustee to use funds for the child’s health, education and support until the child reaches age 19 or graduates from high school.  Thereafter, the trustee is directed to use the funds for college of other post-secondary education, as well as living expenses if the child is enrolled full time.    Most clients choose to have the trust end, and the child’s inheritance released to the child, at age 25.  (I had one very protective mother insist that her son should not get his full inheritance from the trustee until age 50, which I thought was a bit much.)  Other clients direct the trustee to distribute income from the trust investments automatically over a period of years, as well as installments of principal from time to time. 

However, the terms of the trust are entirely up to you, and can be tailored to fit your situation and your goals for your child.