• the hospital will follow the directions of the agent listed on your Health Care Proxy to make your medical decisions should you have one;
• financial institutions will allow access to your accounts by the agent listed on your Durable Power of Attorney should you have one; 
• if you do not have a Health Care Proxy and/or a Durable Power of Attorney, your family (yes, even your spouse) will be required to petition the courts in order to become Guardian and/or Conservator in order to make decisions for you;
• petitioning the court for Guardianship and Conservatorship is confusing, costly, and may take several months, during normal times.  Chances are, as the virus spreads, that courts will become overwhelmed adding to wait time; and
• once Guardianship and Conservatorship is established, the Guardian and Conservator will be required to report to the court all health information as well as every financial transaction.

Please have a DURABLE POWER OF ATTORNEY and HEALTH CARE PROXY executed BEFORE YOU GET SICK.   Your family attorney can easily draft and help you execute these common documents.

Please keep in mind that this article is for educational purposes only.  Nothing contained in this article should be construed as legal advice.  If you wish to engage in drafting these documents, I recommend that you seek professional counsel.  

Please direct any questions to:  John J. Costanzo, Esq. – Telephone:  781-643-1070, Email:  jcostanzo@johncostanzolaw.com

Why are Revocable Trusts of particular interest to families of minor children? When leaving assets to minor children solely by a Will, assets must be managed by a conservator appointed by the court and will most likely be given to the minor children outright upon turning age 18. Some families are wary of an 18 year old getting “the keys to the estate” which may include real estate, life insurance, savings and investments.

Alternately, a Revocable Trust can hold assets after the death of a parent, paying for things like education, health, starting a business, and housing and not paying for things like sports cars and round-the-world trips to “find themselves.” The Trust can specify at what age or ages a child is given the remainder of the trust balance. Furthermore, assets in a Trust generally avoid “probate” in the court system which can be costly and time consuming.

Individuals who qualify for SSI automatically receive Medicaid. Medicaid pays for a wide array of services for people with disabilities and provides government-funded health insurance for children and adults with disabilities who have limited financial resources. Medicaid also provides government funding for long-term services and supports, including institutional care in nursing facilities and, in some cases, in non-specialized placements for people with disabilities.

Social Security Disability Insurance (SSDI) pays benefits to covered workers who are unable to work because of a disability. After two years, the worker qualifies for Medicare. SSDI is typically given to workers who sustain injuries; however, sometimes, people with lifelong disabilities or mental illness qualify because of work history and experience a subsequent problem with continued employment.

Social Security benefits are available to disabled dependents of a parent who collects Social Security benefits or who dies. Individuals who receive Social Security also receive Medicare. Social Security benefits count as income for SSI purposes and, in some cases, can reduce or eliminate SSI benefits.

In 2015, every person may leave or give away up to $5.43 million without owing any estate tax. As a practical matter, that means that under the new rules about 99.5% of all estates will NOT owe any federal gift/estate tax. The exemption amount is indexed for inflation each year. Unlike legislation enacted in the last several years, there is no sunset provision for these amounts; indexed for inflation, they will stay in force until Congress changes them again.

‘Portability’ for Spouses.

One popular feature of the current estate tax law is that spouses can combine their estate tax exemptions, effectively letting married couples give away or leave almost $11 million without owing tax. The new law makes this feature, called “portability” by tax experts, permanent.

Here’s how it works: If the first spouse to die doesn’t use up his or her individual gift/estate tax exemption, the surviving spouse can use what’s left. That gives the couple a total exemption of twice the individual exemption amount. They can share that total exemption amount in the way that provides the greatest tax benefit. For example, if each member of a couple has $4 million in assets, and the first one to die leaves everything to the other, no estate tax is owed because property left to a spouse is tax-free. When the survivor dies and leaves $8 million ($4 million plus the $4 million inherited from the other spouse) to their children, no estate tax will be due, even though the estate is over the exemption amount, because the estate can use some of the first spouse’s unused exemption.

To take advantage of the portability rule, an estate tax return must be filed when the first spouse dies–even if no tax will be due. As commentators have pointed out, this means the IRS must process returns that don’t provide any tax revenue, and taxpayers must pay experts to prepare these very complicated tax returns.

Gift and Estate Tax Rates
On very large estates subject to the tax, the gift/estate rate is now 40%, lower than the rates in almost every year since the 1930s.
This rate also applies to the generation-skipping transfer tax. That is a federal tax that is imposed on large transfers that skip a generation (for example, a gift from a grandparent to a grandchild) in an attempt to avoid estate tax.