• Scam Alert!

    We have had calls from a dozen or so clients who have received letters from “Recording Transfer Services” after they have executed deeds.  The return address reads Record Transfer Services, 1000 N. West Street, Suite 1200, Wilmington, DE 19801.  The letter requests that $83 be sent to a “Deed Processing Center” at P.O. Box 66009, Thousand Oaks, CA 91359-9978.   Please do not send in the $83 or anything at all.  It is a scam. 

    In Rhode Island, a property transfer is complete once the deed has been put on record in the Land Evidence Records of the town where the property is located.  When you hire us to help you and your family transfer property, we make sure that this process is complete and that the deed is properly recorded.  There will NEVER be a case that anything further needs to be done to effectuate the transfer of a properly drafted and executed deed.

    On February 1, 2013, the Department of Elderly Affairs addressed this scam in its Rhode Island Senior Beat publication.  You can access that article, “Recent Scams Make the Rounds,” here.  In addition, one client informed us that this scam was highlighted on a local TV news piece. 

     Hot off the press from the Rhode Island Attorney General, information on a new scam making the rounds in Rhode Island.  “Attorney General Peter F. Kilmartin is warning Rhode Islanders of an aggressive new scam hitting the area, where people are being threatened with imminent arrest for failure to appear for jury duty, however they are offered the opportunity to ‘post bail’ by paying a certain amount with a credit card.  The scam artist claims to be from a local county sheriff’s office, has personal information about the individual, such as name and address, and appears to be calling from a phone number with a local area code.

     “Those who have been contacted tell the Office of Attorney General that the caller gets aggressive and threatening when questioned about the claims, often indicating they will be arriving at the home shortly to make the arrest.

     “Residents should be aware of several red flags associated with this scam:  The Jury Commissioner’s Office for the Rhode Island Superior Court does not issue arrest warrants for individuals who fail to appear for jury duty. If someone fails to appear for jury duty, the Courts will contact the individual to inquire why they failed to appear and will reschedule or excuse the individual based on the circumstances.  If an arrest warrant is issued for an individual, law enforcement will not contact the person to let them know it exists. No law enforcement agency in Rhode Island will allow an individual to post bail by credit card over the telephone to avoid being arrested.  Sheriffs in Rhode Island are a division of the Rhode Island Department of Public Safety and primarily work with the Courts. Unlike most other states, Rhode Island does not have sheriff departments based in counties.  Each city and town has its own local police department.

     “Attorney General Kilmartin is urging anyone who receives a similar phone call or threat to contact their local police to report the incident.  ‘While it is more likely than not this scam is being operated outside Rhode Island, the quickest way to stop it from spreading is to be aware of their tactics and inform law enforcement. If you are contacted by this outfit, get the name and the phone number of the person calling, make note of who they allegedly work for, and then hang up and contact your local police,’ said Attorney General Kilmartin.  ‘Scam artists often use information that is readily available on the Internet, like your name, address and phone number, to give the perception they are legitimate and to heighten the fear of their victims that an arrest is imminent. It is despicable and it is illegal.’  Attorney General Kilmartin has notified the Rhode Island Judiciary and the Rhode Island Sheriffs, a division of the Rhode Island Department of Public Safety of the scam.”

  • The Federal “Death Tax” Dealt a Fatal Blow

    Much of the planning we do is for people who would probably describe themselves as middle class, but we do work with higher net worth individuals and families, and, as far as estate planning goes, 2013 brought good news for them.  There has been a lot of uncertainty in the area of federal estate taxation, and last year saw clients frantically racing though plans and gifts that ordinarily might have been handled, well…less hysterically.

    It all started back in 2001with the Economic Growth and Tax Relief Reconciliation Act, commonly known as the “Bush tax cuts.”  The estate tax unified credit exclusion was $675,000 in 2001.  This meant that anyone who died with an estate over $675,000 paid a tax, and that tax was hefty—up to 55 percent.  Many New England families, because of the high cost of real estate in the region, found themselves writing some big checks to Uncle Sam.  The Bush tax cuts mandated increases in the exclusion and a decrease in the tax rate in 2002, 2004, 2006, and 2009.  In 2010 there was a repeal of the estate tax, but a backdoor tax increased the income tax on capital gains realized by some estates and heirs.

    But,  hold it:  the Bush tax cuts had a “sunset provision” that reset the law back to 2001 levels if another permanent law wasn’t passed by the end of 2010.  Which it wasn’t.  So what did they do?  Pass another temporary law, of course, which was scheduled to sunset after 2012. That law set the rate at 35 percent with an exclusion amount of $5 million.  Whew.  That’s the Cliffs Notes version.

    Let’s move on to the 2013 law which is called the American Tax Payer Relief Act.  There is no sunset provision, so at least Congress hasn’t set itself another booby-trap.  The amount an individual can exclude from estate taxes (including gifts given during his or her lifetime) is $5.25 million per person (adjusted annually for inflation) for 2013, and that includes a “portability” provision whereby a married couple could exclude $10.5 million from estate or gift taxes.  According to estimates from the Tax Policy Center, just 3,800 estates are expected to be big enough to owe any federal estate tax at all in 2013.  However, estates aren’t off the hook completely as Rhode Island taxes estates whose values exceed $ 910,725 (adjusted annually for inflation).  In Massachusetts, state estate taxes are levied on estates whose values exceed $1 million.  The tax rate starts at 10 percent and maxes out at 16 percent in both Rhode Island and Massachusetts.  On the bright side, that’s a whole lot better than the new federal rate of 40 percent.

    Another change is the annual gifting rules allow you to give up to $14,000 per person in 2014(up from $13,000 in 2012) tax-free—to every person in the world if you had enough money—and these gifts don’t count toward the lifetime $5.25 million exclusion.

    The Act also reinstates the IRA charitable rollover provision, which expired in 2011, for a limited time until December 31, 2013.   What this means is that over the next year, an individual who is 70½ or older, may transfer up to $100,000 annually from an IRA directly to a charity without incurring any taxable income.  This becomes beneficial because at age 70½, the age an individual is required to begin taking required minimum distributions (RMD’s) from his or her traditional IRA.  Some individuals may find it advantageous to take advantage of this charitable rollover provision and allocate this mandatory distribution—up to $100,000 annually—directly to a charity in order to lessen their taxable incomes.





  • The Cost of Caring for an Elderly Family Member

    Over the summer, American Public Media’s Marketplace aired an interview on “the costs of taking care of an elderly relative.” After hearing the piece on the radio, I was struck by how little information it actually provided.  Just like any other news piece, there is something of an ominous introduction followed by vague “facts.”  Aside from stating that it costs “half a million dollars” to care for an elderly relative and glossing over a few government programs, no information was provided on where the figure came from or who may be eligible for the programs mentioned.  Instead of empowering individuals to plan for the future, I worry that news pieces like this one leave people feeling helpless and overwhelmed. In this letter, I will take a moment to delve a little deeper into the cost of elder care and how seniors may be able to afford the cost.

    The Cost

    First, let us tackle the question of cost: Does it really cost $500,000 to care for an elderly relative?  In 2011, the Providence Business News found that the cost of both assisted-living care and nursing home care was higher in Rhode Island than nationally. In fact, a 2012 study by Genworth listed Rhode Island as the seventh most expensive state for nursing home care. According to Rhode Island’s Office of Health and Human Services, the average monthly cost for private payment in a nursing facility is $8,492 per month—totaling a whopping $101,904 annually. After additional costs are factored in —such as the cost of medications—$500,000 would cover nursing home costs for a little more than four and a half years. So yes, elderly care is expensive. However, there are resources available to help lessen the out-of-pocket costs.


    Medical Assistance

    In Rhode Island, Medical Assistance is the Medicaid program that pays for the cost of a nursing home facility for qualified individuals.  Statewide, the majority of nursing home residents receive Medical Assistance.  If you qualify, Medical Assistance may pay for long-term care in a nursing home, some in-home care, or assisted living in a limited number of circumstances.  Although most nursing home residents receive Medical Assistance, most start out as “private pay” residents.  The half million dollar question is this:  Just when should the resident apply?  The answer is:  When the resident is eligible—and not before or after.  This is the essence of what an Elder Law attorney should be able to do.  No one—ever—can advise a resident when to apply without going through a detailed review of the resident (and spouse’s) assets.  Generally, there will be a “spend down,” but the money spent doesn’t necessarily have to be spent on the nursing home—especially if the resident is married.  I advise people to never try to apply without professional help, because the resident could be locked into a “penalty period” of ineligibility.  It is important to recognize that applicants for Medical Assistance are penalized for gifts given in the five-year period before their applications are filed. Here, we are talking about giving money or property as gifts, not the American Girl doll you gave to your granddaughter this past Christmas.  The penalty is harsh and unforgiving.

    Long-Term Care Insurance

    If you find yourself in a position where your resources will likely disqualify you from Medical Assistance, but the cost of nursing home care still sounds unaffordable, long-term care insurance may be an option to consider. People who purchase long-term care insurance pay monthly premiums in exchange for help paying for long-term care when they are no longer able to care for themselves. The advantage of long-term care insurance is that it doesn’t only have to be used for nursing home care.  Elizabeth O’Brien from the Wall Street Journal’s “MarketWatch” reported that 50% of industry-wide claims under long-term care insurance policies went to pay for home care in 2011, 19% paid for assisted living fees, and 31% for nursing home care. As with any insurance, it is important to research the product and carefully review the terms before purchasing the coverage. Purchasers should look for “inflation protection,” be conscious of the pay-out term, and go with a company with a proven track record of holding rates steady.

    Veterans’ Pensions

    For war-time veterans, pension plans are available through the Veterans Benefits Administration.  Due to backlogs, the timeframe for having an application approved may be lengthy, but it is a resource that should not be overlooked. Under the VA’s Improved Pension, three pension levels exist: the Aid & Attendance Pension, the Homebound Pension, and the Basic Pension. Although the eligibility requirements differ for three pension levels, each includes financial and medical thresholds. War-time veterans over the age of 65 are classified as “permanently and totally disabled” regardless of their physical state and must meet only a financial threshold to qualify for the Basic Pension.


    One Size Does Not Fit All

    Seniors do not have to go it alone—there is help out there.  Each individual has a different set of circumstances and needs, and, remember, one size does not fit all.

  • New RI Laws Will Impact Estates and Persons Receiving Medical Assistance

    The Rhode Island legislature recently amended its General Laws; seniors, elder law practitioners, and others working with seniors should take note.   Although the laws have already taken effect, the Executive Office of Health and Human Services (EOHHS) hasn’t finalized the regulations and the DHS Policy Manual doesn’t yet reflect the changes—and naturally there is some confusion, even among the probate court judges.  We will focus on the three changes most likely to affect the elder law community:  liens against property includable in Medical Assistance recipients’ estates, whether or not a probate or administration is commenced; the new notice requirements in estates of all persons aged fifty-five or older; and the new notice requirements for persons receiving Medical Assistance who transfer property.

    As you may know, the EOHHS places a lien on the probate estates of recipients of Medical Assistance, the RI program that pays for long-term nursing home care.  In the past, this has generally meant that when the deceased recipient’s home is sold from his or her estate, the amount of money the state paid on behalf of the recipient is recovered.  The new law modifies this to include all property of a recipient that is included or includable in a decedent’s estate, regardless of whether a probate proceeding is commenced. The lien shall also apply against the previously allowed $4,000 which is the medically needy standard.  Apparently, the purpose of this change will allow the EOHHS more latitude to actually commence a probate and recover against the estates of deceased recipients whose heirs may be reluctant to petition for probate themselves.

    The second important change affects all probate estates and administrations, including small estate petitions (currently valued at less than $15,000) of decedents who are fifty-five or older at the time of death.  As of July 1, 2012 the following procedure must be followed: when a person who is fifty-five or older dies, a copy of the petition for admission to probate or the petition for administration of the estate must be sent to EOHHS along with a copy of the death certificate. If EOHHS requests additional information, the executor or administrator of the estate must comply within thirty days of the request. Furthermore, the change requires that the Affidavit of Notice to Creditors include EOHHS/Medicaid.  This new change has some real teeth in it:  if EOHHS does not receive the required notice and information, and the deceased person received Medical Assistance for which EOHHS is authorized to recover, the estate cannot be disbursed and administration fees cannot be paid. Moreover, if an unauthorized distribution is made, the person who receives a distribution is liable to EOHHS.  Sending the notice earlier rather than later is probably the best practice, preferably in conjunction with notice that is sent to the decedent’s heirs at law. An elder law attorney who is abreast of changes in the law will help ensure that you are in compliance with the law and that distribution of the estate is not delayed unnecessarily.

    The third change we will talk about only affects persons who are current recipients of Medical Assistance.  As of July 1, 2012, when a person receiving Medical Assistance transfers an interest in real estate or personal property, the EOHHS must be notified within ten days. If you have made such a transfer, the law requires that you notify both your local office and the legal office of EOHHS with detailed information about the transfer. If notice is not properly given, any person or entity that knew or should have known that EOHHS was not notified and received any distribution of value in the transfer is liable to EOHHS to the extent of the value received in the transfer.

    For a copy of a draft of the new regulations, please call or email us at moc.walredle104null@ofni.

  • Hurricane Sandy Highlights the Need for Seniors to Plan Ahead

    As Hurricane Sandy barreled toward the East Coast I found myself rushing into an overcrowded Stop-and-Shop to stock-up on bottled water, batteries, and non-perishable food items so that I would be prepared for a long-lasting power outage such as I experienced after Hurricane Irene. This time I was spared. Hurricane Sandy made landfall to the south, and I did not use any of the items.  However, the beauty of these items is that they do not go bad and so the bottled water, batteries and crackers are now packed away and will be there for the next nor’easter, flood, or hurricane to hit Rhode Island. The same is true for the more complicated parts of disaster planning; the planning you do now will be there for the next time.  Planning does not go bad.

    So consider, were you adequately prepared to face the Sandy that thrashed the New Jersey Coast and paralyzed the New York City transportation infrastructure? If you were lucky enough to escape this natural disaster, now is the best time to confirm that your home and personal belongings are adequately insured. It is the time to develop a multi-tiered evacuation plan with your family and prepare a “grab-and-go” kit. If you are an elderly person living alone, decide now if there is someone you could stay with in the event of an emergency. It may also be the time to make decisions as to whether you have the support you need to continue living independently in your home, or whether it is time to consider other living arrangements. Proietta Law is dedicated to working with you to assess the affordability of long-term or nursing home care and developing a plan so that you can make this transition as easy as possible. Even if you decide that you are not ready to make the transition into a nursing home today, planning ahead is always the best course of action, and it can help you maximize your resources over the coming years.

    Natural disasters such as Hurricane Sandy accentuate our vulnerabilities. Research shows that elderly citizens are at a heightened risk when natural disasters occur. A recent article posted on Science Daily notes that “older adults left in the wake of Hurricane Sandy will likely suffer disproportionately in the days ahead, based on data from other recent natural disasters” such as Hurricane Katrina which ravaged New Orleans in 2005 and the Wenchuan earthquake that shook China in 2008. Although Rhode Island escaped the full brunt of Hurricane Sandy, many properties along the South Coast were flooded or destroyed and many people found themselves without power. Just last year, up to half of Rhode Islanders were left without power following Hurricane Irene, and in March 2010 the Great Rhode Island Flood left many properties damaged. Three consecutive years of severe weather events in our small state highlight the need for our elderly community to develop plans to ensure their safety when the next natural disaster occurs.

    Tips for planning ahead:

    If severe weather is forecast for your area, prepare a “grab-and-go” kit that you can take with you if you need to evacuate your home. You should include items such as:

    (1)   contact information for family members and doctors

    (2)   a list of medications you take and their required dosages and administration times

    (3)   a week’s supply of both prescription and over-the-counter medications

    (4)   an extra pair of glasses

    (5)   a change of clothes

    (6)   some bottled water and nonperishable snacks

    Remember, it is important to keep your cell phone charged leading up to a storm so that you have a better chance at contacting family members or emergency personnel if telephone lines are damaged. If you are on insulin or another medication that requires refrigeration or depend on oxygen, plan on how you can keep medication cold and make sure you can continue to use your oxygen even if the power goes out.