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Health Care Directive FAQ

What does a Health Care Proxy allow you to do?

A Health Care Proxy allows you to appoint someone, over the age of 18 that you trust to make health care decisions for you, should you lose the ability to make them yourself.


When does a Health Care Proxy take effect?

A Health Care Proxy takes effect after two doctors decide you are not able to make your own decisions.

Can I name two people as agents on my Health Care Proxy?

Two people may be listed on your Health Care Proxy and should be listed on the Health Care Proxy however, only one may act at a time.  The other would be a successor agent should your primary agent be unable to act.

Can I change my agent on my Health Care Proxy?

Yes, you are able to cancel the authority given to your agent and replace them at any time so long as you have the requisite mental capacity.

What happens if I name my spouse as my agent on my Health Care Proxy and we get a divorce?

If you name your spouse as your agent and you get a divorce, your Health Care Proxy is automatically cancelled upon your divorce.  Should you want them to remain your Health Care Proxy, you will have to rename them on the document.

It is always a good idea to change your health care proxy to reflect changes in your interpersonal relationships.

Can my agent named on my Health Care Directive make end of life decisions for me?

Yes, your agent can make any and all decisions related to your health once you are deemed incapacitated.

What is a Living Will?

A Living Will is a document that spells out your end of life care wishes pertaining to medical treatments you would want or would not want to keep you alive, as well as other decisions such as pain management and organ donation.  A Living Will can also provide instruction to your Health Care Proxy as to these wishes regarding end of life care and medical treatment.

Do I need both, a Health Care Proxy and Living Will?

Although it is not necessary to have both a Health Care Proxy and Living Will, it is a good idea to implement both so that you can leave specific medical instructions in writing and appoint a health care agent to carry them out.  Also, many times someone appoints a Health Care Proxy thinking that they would know their wishes yet never actually discusses what they want/does not want with this person. Having both will ensure your wishes are being carried out the way you want.

What happens if I become incapacitated and I do not have health care directives?

If you can no longer make financial and personal decisions for yourself and no individual has been legally selected to make these decisions, you will need a court-appointed guardian.

Social Security FAQ

At what age can I apply for social security retirement benefits?

You can apply for Social Security retirement benefits when you are 61 and nine
months. However, you will not be entitled to receive reduced retirement benefits until you reach full retirement age. The full retirement age is 66 for people born in 1943-1954 and will gradually increase to 67 for people born in 1960 or later. If your full retirement age is 67 and you start receiving retirement benefits at age 62, your monthly benefit amount will be reduced by approximately 30%.

When are my benefits paid?

Social Security benefits are paid monthly, in the month following the month for which they are due. For example, you would receive your February benefit in March. The day of the month in which you receive your benefit payment typically depends on the birth date of the person on whose earnings record you receive benefits. If you receive both Social Security and SSI benefits, you will receive your Social Security payment on the third day of the month and your SSI payment will arrive on the first day of the month.

How are my benefits paid?

You can receive your benefits by mail or have them directly deposited into your
bank account via electronic payments.

Do I have to pay taxes on my Social Security Benefits?

You may have to pay taxes on your benefits if you file a federal tax return as an
“individual,” and your total income is more than $25,000. If you file a joint return, you may have to pay taxes if you and your spouse have a total combined income that is more than $32,000.

What happens when a beneficiary dies?

Benefits are not payable for the month of death. For example, if the person died any time in February the check received in March (which is payment for February) must be returned. It is important to inform the Social Security Administration if a person receiving Social Security benefits dies.

Can I work and still collect Social Security benefits?

You can continue to work and still get Social Security retirement benefits. Your
earnings in, and after, the month you reach your full retirement age will not affect your Social Security benefits. However, if your earnings exceed certain limits for the months before you reach full retirement age, then your benefits will be reduced.

What benefits can my spouse qualify for if he/she has limited work history?

Even if you have never worked under Social Security, you may be able to get
spouse’s retirement benefits if you are at least 62 years of age and your spouse
or ex-spouse is receiving or eligible for retirement or disability benefit. If you are
under full retirement age and qualify on your own record, Social Security will pay
you that amount first. However, if you also qualify for a higher amount as a spouse, you may get a combination of benefits that equals that higher amount.

At what age does a child stop getting social security benefits?

A child’s benefits stop with the month before the child reaches age 18, unless
the child is either disabled or is a full-time elementary or secondary school
student. About five months before the child’s 18th birthday, the Social Security
Administration will send the person receiving the child’s benefits information
explaining how benefits can continue.

What is the difference between Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)?

SSDI is a federal insurance program designed to provide income supplements
to people who are physically restricted in their ability to be employed. It can be
supplied either on a temporary or permanent basis, depending on whether the
disability is temporary or permanent. SSDI does not depend on the income of the disabled individual receiving it.

SSI is a government program that provides stipends to low income people who are either aged, blind or disabled. In order to be eligible an individual must be 65 years old or older, blind, or disabled, must be considered a legal U.S. resident, and must have income and resources with certain limitations.

What do I do if I disagree with a decision the Social Security Administration makes?

If you disagree with a decision, you have the right to ask the SSA for it to be
reconsidered. You must file a written request with any Social Security office within 60 days of the date you receive the decision you are questioning. There are four levels of appeal. If you are not satisfied with the decision at one level, you may appeal to the next.

The levels are:

• Reconsideration;
• Hearing;
• Appeals Council review; and
• Federal court

How do I qualify for benefits as a divorced spouse?

You can receive benefits as a divorced spouse on a former spouse’s Social Security record if you:

• Were married to your former spouse for at least 10 years;
• Are at least age 62 years old;
• Are unmarried; and
• Are not entitled to a higher Social Security benefit on his or her own record.

Your former spouse must be entitled to receive his/her own retirement or disability benefit. If your former spouse is eligible for a benefit, but has not yet applied for it, you can still receive a benefit if you meet the above eligibility and have been divorced from your former spouse for at least two years.

What if I want to retire but my spouse does not?

If you have been married to your spouse at least 10 years then you are entitled to Social Security benefits on your husband or wife’s work record. If you want to stop working and you are at full retirement age or are caring for a child who is under 16 years old, you are entitled to an amount equal to one-half of your spouse’s full retirement benefit.

In order to receive the spousal benefit, your spouse must file for Social Security
retirement benefits. Your spouse can continue to work as long as he or she files for benefits and then immediately suspends them. Once your spouse suspends his or her benefits, you can receive spousal benefits while your spouse continues to work.

Spousal Rights FAQ

What is the Spousal Transfer Exception?

When applying for Medicaid Nursing Home Care, there is no transfer penalty for any asset transfers between spouses.

The Medicaid Applicant Spouse will not be denied Medicaid benefits as a result of any asset transfers to his/her spouse/Community Spouse.

However, if the Community Spouse then transfers the assets to a third- party during the look- back period, the transfer will be considered a non- exempt transfer by the Medicaid Applicant Spouse for Medicaid Nursing Home Care eligibility.

What are Spousal Allowances?

When applying for Medicaid in New York State, the Community Spouse is
allowed to retain a certain level of resources (assets) and monthly income.
As of January 1, 2013, the Community Spouse Resource Allowance (CSRA) is a
minimum of $74,820 and a maximum of $115,920 (excluding the residence),
depending on the combined value of the assets of both spouses.

As of January 1, 2013, the Community Spouse’s monthly income allowance known as the Maximum Monthly Maintenance Needs Allowance (MMMNA) is $2,898. If the Community Spouse has less than $2,898 in monthly income, then the Community Spouse is entitled to a contribution from the monthly income of the Medicaid Applicant Spouse in order to reach the maximum monthly income allowance.

What is Spousal Refusal?

The law allows a Community Spouse to refuse to contribute excess resources
(assets) and/or income to the Medicaid Applicant Spouse. This is known as Spousal Refusal.

The resources (assets) and income of the Community Spouse in excess of the
Spousal Allowances will be deemed available to the Medicaid Applicant Spouse. If the Community Spouse has greater resources (assets) and excess monthly income, the Community Spouse must file a Spousal Refusal in order to prevent a Medicaid denial.

Upon the filing of a Spousal Refusal, the excess resources (assets) and/or income will not be deemed available to the Medicaid Applicant Spouse. However, a Spousal Refusal may subject the Community Spouse to being sued by the Department of Social Services for spousal support.

What is the Spousal Right of Election?

The surviving spouse of a New York decedent dying on or after September 1, 1992, has a personal Right of Election to the greater of $50,000, or one-third of the decedent’s net estate, calculated as of the decedent’s date of death. This is known as the Elective Share.

The surviving spouse has the Right of Election unless the right is waived, is not
timely asserted or the surviving spouse engaged in disqualifying conduct.

What is the timeframe for asserting the Spousal Right of Election?

The surviving spouse must assert the Right of Election within six months of the
issuance of Letters Testamentary or Letters of Administration appointing an
Executor or Administrator.

How is the Elective Share calculated?

The decedent’s Net Estate is calculated by including all probate assets (passing
under a Will) and certain non- probate assets (passing by operation of law), less
debts, administration expenses and funeral expenses. Estate taxes are not
deducted. These non-probate assets are known as Testamentary Substitutes.

What are Testamentary Substitutes?

Gifts in contemplation of death, Totten Trust (‘in trust for’ bank accounts), jointly
owned property, certain pension, retirement plans, lifetime trusts and contracts are examples of Testamentary Substitutes. Life insurance, however, is not a Testamentary Substitute.

What is a Qualified Disclaimer?

A Qualified Disclaimer, also known as a Qualified Renunciation, in New York, allows a Surviving Spouse (or other beneficiary) to disclaim property that he/she does not wish to inherit.

The effect of the disclaimer is to treat the disclaiming beneficiary as having
predeceased the decedent and therefore, the transfer does not occur and passes to the next beneficiary.

To qualify, the disclaiming beneficiary must not “taint” the asset, by accepting the transfer, and the property must pass without any direction of the disclaiming beneficiary.

What is the timeframe for executing a Qualified Disclaimer?

The disclaiming beneficiary must file the Qualified Disclaimer documents with the court of proper jurisdiction within nine months from the decedent’s date of death.

What are the creditor protection and estate tax benefits of executing a Qualified Disclaimer?

A Qualified Disclaimer is retroactive to the decedent’s date of death. Therefore,
the disclaiming beneficiary will receive protection from creditors. However,
disclaimed assets are deemed available resources for purposes of the disclaiming beneficiary’s Medicaid eligibility.

A Qualified Disclaimer can be used for post- mortem estate tax planning by
allowing a Surviving Spouse to disclaim assets from the estate of the deceased
spouse in order to utilize the unified credit of the deceased spouse.

IRA Rules and the SECURE Act FAQ

What is the SECURE ACT?

The SECURE ACT is the “Setting Every Community Up for Retirement Enhancement” Act passed as part of the Federal Government spending package titled the “Further Consolidated Appropriations Act, 2020, does more than just fund the government.

When Must I take out my Required Minimum Distributions (RMDs)?

Generally, RMDs must be taken by April 1 following the calendar year in which the participant reaches age 72 (or 70 ½ if the participant turned age 70 ½ prior to January 1, 2020). For 401(k) plans, the date can be when the participant retires, if later.

Example – Age 70 ½: If you are retired and have reached age 70½ by 12/30/19, Your first RMD (for 2019) must be paid by April 1, 2020, and your Second RMD (for 2020) must be paid by December 31, 2020.

Example – Age 72: If you are retired and reach 70 ½ after 2019, Then, NO RMDs until the year you turn 72 and the RMD must be paid by April 1st of the following year.

Can I contribute to an IRA after 70 ½?

The SECURE ACT eliminated the age 70 ½ limit for making traditional IRA contributions, so that anyone can contribute to an IRA as long as they are working. This now matches the existing rules for 401(k) plans and Roth IRAs.

Example: Jack is 75 and working. Since he is working, he can contribute to his IRA.  Jack will also have to take out his required minimum distribution since he is past age 72.

Can I withdraw from my IRA account for birth related expenses and be exempt from 10% Early Withdrawal Penalty?

There is now an exemption from the 10% tax penalty on early retirement account withdrawals of up to $5,000 to pay for expenses related to the birth of a child or adoption within one year of the birth of a child or adoptions becoming final. Each parent can qualify for this exemption. Notwithstanding, the funds withdrawn from a Traditional IRA account will still be subject to income taxation.

As a Part Time Employee, can I Contribute to a Qualified Retirement Plan?

Yes, you may be able to contribute to a Qualified Retirement Plan if you have worked at least: 1,000 hours in one year (about 20 hours per week) or three consecutive years of at least 500 hours. This rule applies to plan years after December 31, 2020; however, for purposes of the meeting the hours worked requirement, years worked beginning before January 1, 2021 are not taken into account.

For Inherited IRAs, when must the IRA be distributed to the beneficiary?

If a designated beneficiary, the general rule is 10 years and for non- designated beneficiaries, the rule is 5 years.

Who can qualify as an Eligible Designated Beneficiary?

The following individuals can qualify as a “Eligible Designated Beneficiary (EDB)”:

Surviving Spouse

Minor Child of the Participant but only during the period the beneficiary is a minor

Disabled Beneficiary

Chronically Ill Beneficiary

Beneficiaries who are not more than 10 years younger than the original account owner

What is a Stretch IRA?

Under prior law, a Stretch IRA is an Inherited IRA which allows certain beneficiaries the opportunity to stretch the payout of an Inherited IRA over his or her lifetime. This is an exception to the five-year rule and the pay-out is based on life expectancy of the beneficiary at the time of the inheritance.

Under the SECURE Act, a Stretch IRA is only available to Eligible Designated Beneficiaries, otherwise the 10-year rule would apply to a Designated Beneficiary.

How does the 10 Year Rule harm my beneficiaries?

Beneficiaries of Inherited IRAs will have to pay income tax:

over a shorter period of time,

often at a higher tax rate, and

without the benefit of additional growth earned during a longer period of deferral

How are Trusts treated for purposes of the RMD Rules?

Depending upon the trust, the required distribution may be within 5 or 10 years. If all the beneficiaries are individuals, the 10- year rule would apply.

An exception to the 10- year rule applies to a Trust for the benefit of a Disabled or Chronically Ill beneficiary (as long as certain requirements are met). In such event, the payout can be over the life expectancy of the Disabled or Chronically Ill beneficiary.

What are the benefits of using a Trust for a Designated Beneficiary?

Trusts may be used to provide Asset Protection for the beneficiary who:

is a Spendthrift,

has Creditor Claims, or

is on or is applying for Government benefits.

What are the Benefits of using a Trust for a Disabled or Chronically Ill Beneficiary?

An Accumulation Trust for a Disabled or Chronically Ill Beneficiary will protect the IRA distributions to the Trust while allowing the beneficiary to maintain or qualify for government benefits such as Medicaid or SSI.

What is an Accumulation Trust?

An Accumulation Trust is a Trust that can “accumulate” retirement plan distributions for a possible later distribution to another beneficiary. The Trust would receive the minimum required distributions from an Inherited IRA and then distribute the funds to or for the benefit of the beneficiary, as and when determined by the Trustee, in the Trustee’s discretion.

This trust can be used to protect the funds from creditor claims against the beneficiary. In addition, the funds in the Trust may not be counted against the beneficiary when qualifying for Medicaid or SSI.

Will a Conduit Trust still work for the Lifetime Stretch?

Under the SECURE Act, a Conduit Trust will still allow for Eligible Designated Beneficiaries such as a spouse to receive the lifetime Stretch on an Inherited IRA account. For a Minor Child, the lifetime expectancy payout does not last for the child’s entire life but only until he/she reaches age of majority.

Designated Beneficiaries who are not Eligible Designated Beneficiaries of a Conduit Trust will be subject to the new 1O-year payout rule.

What is a Conduit Trust?

A Conduit Trust is a Trust that requires the Trustee to distribute the annual minimum required distribution received from the Inherited IRA to a trust beneficiary, who must be an individual.

Does the SECURE ACT apply to 401K plans?

Yes, the SECURE ACT applies to 401(k) plans as well as 401(a), 403(b) and government 457(b) retirement plans.

When is the SECURE ACT effective?

The SECURE ACT applies to distributions with respect to IRA account owners who die after December 31, 2019. For pre-2020 deaths, the SECURE ACT also applies if the designated beneficiary dies prior to his/her life expectancy.

Veterans Benefits FAQ

I am a veteran and I need assistance at home. Is there any benefit from the VA to help me?

Yes. It is a special pension that may be payable to the veteran (or surviving spouse of the veteran) if they need care.  The Veteran’s Administration (“VA”) pays a monthly amount to help an eligible veteran (or the surviving spouse) pay for unreimbursed medical expenses such as an aide.  It may also be beneficial to help pay for assisted living.  The benefit amount varies depending on if the veteran is married or single or if you are the surviving spouse of the veteran.

My deceased spouse was a veteran. Am I entitled to any VA benefit if I need assistance at home?

You may be. The widow or widower of a veteran may qualify for the monthly benefit to help pay for care if he or she qualifies financially.

Are there financial restrictions when applying for Aid and Attendance?

Yes.  The VA has both asset and income restrictions for the veteran (and the spouse).  There is no set asset allowance, but the rule of thumb is generally to have less the $80,000 if a married couple and $50,000 for a single person.  The VA will also look at the household income and then reduce that by any unreimbursed medical expenses (such as an aide) to determine if the veteran is entitled to a monthly payment to help pay for the care.

Is there a way to protect my house that will allow me to apply for veteran benefits on the future?

Yes.  The house can be placed into a Veteran’s Asset Protection Trust, which is a type of irrevocable trust that would allow the veteran (or surviving spouse) to protect the home, or the sale proceeds if the home is sold.  You will also be able to keep your veteran’s real estate tax reductions.

Is there a “look back” when applying for Aid and Attendance?

No (at least not currently). There is currently no “look back” period for Aid and Attendance and there is no penalty for transferring assets prior to applying.

Is there any assistance available from the VA if I (or my spouse) needs to go into a nursing home?

The special monthly pension (typically Aid and Attendance) benefit is reduced to $90/month if the veteran enters a nursing home.  In addition, the veteran is entitled, subject to bed availability, to be admitted to a state veteran’s nursing home.  However, unless the veteran is admitted to the home as a result of their service, the veteran must privately pay or apply for Medicaid (unless there is insurance coverage).  The special pension (Aid and Attendance) does not cover nursing home care.

If I transfer my home to my children (or a trust), will I lose my VA real estate tax reduction?

Not if the transfer is done properly.  If the veteran retains the right to live in the house (often referred to as a “life estate”), then the real estate tax exemptions (such as VA and STAR) remain available since the veteran remains responsible for the taxes on the house.

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