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Upstate Estate Law, P.C. Blog

Medicaid Update: Special Needs Trusts

December 14, 2016

Medicaid Special Needs Trusts have received much needed legislative attention from the United States Congress and President of the United States. HR 34 was signed into law by President Obama on December 13, 2016. Title 5, Section 5007 of HR 34 is entitled “Fairness In Medicaid Supplemental Needs Trusts” and contains exactly two sentences designed to correct a 23 year old omission made in the Social Security Act.

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Filed under: Legal Posts, Medicaid, Trusts

Posted By: Christopher Miller

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The ABLE ACT – Achieving a Better Life Experience

October 14, 2016

The Stephen Beck, Jr. ABLE Act (Achieving a Better Life Experience) was conceived and championed by Stephen Beck, Jr., a Virginia father of a daughter with Down’s Syndrome, who thought up a new way to allow disabled people to save money without impacting their qualification for Medicaid and SSI benefits. The Act was signed into law by President Obama on December 19, 2014. This Act’s purpose is to provide a new account type specifically for special needs individuals which enables them to save money without losing their needs-based public benefits like Medicaid and SSI.

Under the ABLE Act, the individual states set up the savings program for people with disabilities. This savings program is similar to how 529 college savings accounts work. With certain restrictions, an account can be established for use by a beneficiary with special needs. On April 1, 2016, South Carolina Governor Nikki Haley signed SC’s ABLE Act-enacting legislation into law.

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Filed under: Legal Posts, Medicaid

Posted By: Christopher Miller

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IRS Issues Private Letter Ruling Re: Retirement Account Beneficiaries

April 1, 2016

A part of estate planning that is sometimes overlooked is the naming of beneficiaries for retirement accounts. What may seem like a trivial exercise can have damaging impact if neglected. Be sure to name beneficiaries of your retirement accounts. And be sure to name contingent beneficiaries in case your primary beneficiary dies before you.

In Private Letter Ruling 201612001 (released March 18, 2016), the IRS was asked to provide an opinion on the following situation: Husband died owning an IRA account. His spouse survived him. The primary named beneficiary (not the spouse) died before Husband. There was no contingent beneficiary named. As a result the Husband’s estate became the beneficiary of the retirement account. The Surviving Spouse then requested the IRS’s opinion on whether she could treat the IRA account as her own, thus potentially delaying the payment of income taxes on the account. In this case, the IRS stated that because the Surviving Spouse was both the executor and the sole heir of the estate, she could treat the IRA account as her own.

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Filed under: Legal Posts, Retirement Planning

Posted By: Christopher Miller

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Oregon and Wyoming enact model digital assets law

March 24, 2016

While a number of states (South Carolina included) have introduced legislation to adopt the Uniform Fiduciary Access to Digital Assets Act, only three have actually adopted it thus far. The first was Delaware, which adopted it on August 12, 2015, effective January 1, 2015. Second was Oregon, adopted on March 2, 2016, effective January 1, 2017. Now Wyoming makes the third, which adopted the uniform law on March 7, 2016.

The Uniform Fiduciary Access to Digital Assets Act allows personal representatives, executors, guardians/conservators, and persons acting under a power of attorney to have access to digital accounts of a decedent or incapacitated person. The law is intended to make it easier to gather the digital assets and get access to them to administer a decedent’s or incapacitated person’s estate. Nowadays, an important part of estate planning will be focused on generating a list of digital assets and providing the ability for our designated agents to obtain access to the digital assets when necessary. Other bills are pending around the country, so it is expected that this uniform law will be adopted somewhat rapidly.

South Carolina has a bill currently pending in the state legislature. You can find it here. It will be interesting to see if this bill can move forward, particularly when lots of attention seems to be on the highway bill and gas tax proposal. I am unsure however how effective this bill will be. The various terms of services agreements users accept when using online services can potentially take the effectiveness out of this law. This will be a fascinating area of estate planning and probate to watch in the coming years.

Check out this prior post for some examples of why this bill can be so important.

Filed under: Legal Posts

Posted By: Christopher Miller

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SSA Directs Local Offices to Give Specifics When Rejecting Trusts

March 14, 2016

The Social Security Administration recently issued an Emergency Message to all personnel requiring workers to specifically inform SSI applicants or beneficiaries of the reasons a special needs trust has been rejected by the agency. And elder law attorneys everywhere say thank you!

In the past, when the SSA determined that assets in an SSI beneficiary’s or applicant’s trust were countable, the agency would frequently send a notice of ineligibility to the beneficiary or applicant because his/her assets exceeded the resource limit. However, this notice almost never explained the reasoning behind the SSA’s rejection of the trust.

The new Emergency Message, which went out to all field level SSA personnel, requires caseworkers to spell out exactly what portion of the Program Operations Manual System (POMS) applies to the trust being rejected. Unfortunately, the Emergency Message does not tell field workers that they have to explain their reasoning in plain English — merely citing the appropriate section of the POMS appears to be enough. While this will make it relatively easy for professionals to determine what went wrong with a trust and whether an appeal is in order, it will likely give the layperson little if any guidance about his or her trust.

To read the Emergency Message, go here.

Filed under: Legal Posts, Medicaid, Trusts

Posted By: Christopher Miller

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