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Understanding Social Security Survivor Benefits

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An earlier issue of The ElderCounselor addressed social security benefits generally and when to apply. In this issue, we will address the critical yet often-misunderstood topic of Social Security survivor benefits. This e-newsletter is based in part upon an article by Frank Rainaldi and William Rainaldi, first published in Trusts & Estates magazine and available on

 Survivors Benefits

According to the Social Security Administration, a surviving spouse may be eligible to receive the deceased spouse’s full retirement benefits at full retirement age (“FRA”).  For survivor benefits only, FRA is 66 for anyone born before 1957, and it increases two months every year until it reaches 67 for those persons born in 1962 or later. (For a regular retirement or spousal benefit, FRA is 66 for anyone born before 1955 and it increases two months every year until it reaches 67 in 1960.)  (E.g., see

Simply stated, survivors benefits are determined by looking first at the age of the deceased spouse, and then at the age of the surviving spouse.  In other words, we look at the amount of the benefit available to or being paid to the deceased spouse.  Then, we use the age of the surviving spouse to determine if benefits are paid early or at FRA; if the surviving spouse’s benefits are paid before 65, we must apply an actuarial reduction to the deceased spouse’s benefits.

It is important to note a key difference between survivor benefits and spousal benefits.  Spousal retirement benefits provide a maximum 50% of the other spouse’s primary insurance amount (PIA). Alternatively, survivors’ benefits are a maximum 100% of the deceased spouse’s retirement benefit.

Also, note the difference between the PIA and retirement benefit, which is critical when considering deferred retirement credits (DRCs).  DRCs can increase benefits by 8% per year when the worker elects to start collecting after FRA, up to a maximum increase of 32% for deferral to age 70. Note, however, that DRCs apply only for survivor benefits; DRCs do not increase the PIA and thus they aren’t applicable to spousal benefits. Therefore, if one spouse has the higher personal benefit and waits until age 70 to begin collecting, the full benefit with DRCs would be payable to the surviving spouse.

 The Most Common Scenario – Both Spouses Reach FRA

The most common scenario is when death occurs after both spouses have reached their respective FRA.  In this case, the survivor benefit is simply the higher of the two benefits.  If one spouse is collecting $2,500 and the other is collecting $2,000, the surviving spouse’s benefit would be $2,500.  It actually does not matter which spouse dies, the survivor benefit is still $2,500.

For example, assume Mr. A has a personal benefit of $2,000, the amount he would receive at age 66.  If he elects to defer until age 69 he would get a 24% increase in his personal benefit to $2,480.

Now let’s say Mrs. A. never worked outside the home.  When Mr. A. is age 66, the spousal benefit would be 50 percent, or $1,000. Note, however, that the spousal benefit would still be $1,000 (not $1,240) when he is age 70 because the 24% increase does not apply to spousal benefits.  But DRCs do apply to survivor benefits.  So, when Mr. A. dies, Mrs. A. would get the full $2,480 as a survivor benefit.

What if the first spouse dies prior to age 62?  The benefit will be the deceased worker’s recalculated PIA, which is based on a different set of assumptions.  It uses the worker’s earnings for a “substitute year” and a different set of required Social Security credits for the applicable age.  This special PIA calculation can only help; it can’t hurt.  It only applies if it provides a higher PIA then the regular PIA calculation.

What if death occurs after age 62 but prior to FRA after taking early retirement benefits?  The benefit will be the deceased worker’s reduced retirement benefit.  This is one good reason not to retire early.  Note that there is a minimum benefit of 82.5% of the deceased worker’s PIA, not including any actuarial reduction in benefits.

 Surviving Spouse Collects Early

If the surviving spouse elects to collect before her own FRA, as with other Social Security retirement benefits there is an actuarial reduction.  For a personal, spousal or divorced spouse’s benefit, one can start as early as age 62.  However, a surviving spouse can start collecting as early as age 60.  If the survivor benefit is at FRA or later, there is no actuarial reduction.

It’s important to note that the surviving spouse has additional options.  Suppose the surviving spouse is age 60 and not collecting any benefits. When the other spouse dies, she has the option of receiving her actuarially reduced personal benefit, then later switching to a full-unreduced survivor benefit at FRA.  This could limit the downside of collecting early.

To determine the monthly reduction amount, simply take 28.5% divided by the number of months between age 60 and the survivor FRA determined above.   The “Widow Limit” caps the survivor’s benefit at the larger of the benefit the deceased would have received if he or she were still alive, or 82.5% of the deceased PIA. This Widow Limit only comes into play if the deceased claimed benefits prior to his or her FRA. The following, from, graphically explains these options.


Suppose the surviving spouse started collecting a reduced personal benefit at 62, and her spouse dies when she is 64.  At that point, she has the option of continuing to collect her personal benefit for two more years and then switching to a full, unreduced survivor benefit at age 66.

Of course, the survivor cannot collect both benefits at the same time; the survivor must choose one or the other.  Only one switch is allowed.  If the surviving spouse is already collecting a personal benefit, she could not go from a personal benefit to a survivor benefit and then back to the personal benefit.

Understanding survivor benefits is especially important when there is a significant age difference between the two spouses.  When one spouse may outlive the other by a considerable margin, survivor benefits are a much more important than “file and suspend” or “spousal only.”  In that case, it is often a good idea to make sure that the spouse with the higher personal benefit defer until age 70, if possible.


A former spouse who is age 60 or older (50-59 if disabled) can get benefits if the marriage lasted at least 10 years.  However, there is no age or length of marriage requirement if the former spouse is caring for her or his natural or adopted child who is younger than 16 or who is disabled and entitled to benefits based upon your work.  Benefits paid to a former spouse who meets age or disability requirement does not affect the benefits for other survivors based upon the worker’s record. However, the benefits paid to a former spouse who is caring for a minor or disabled child do affect other survivor benefits.


Generally, the survivor cannot get survivor’s benefits if he or she remarries before age 60. But remarriage after age 60 (or age 50 with a disability) will not prevent the survivor from getting benefit payments based on the former spouse’s benefits. And at age 62 or older, the survivor may get benefits based on the new spouse’s work, if those benefits would be higher.


Social Security survivor benefits offer a surviving spouse the opportunity to significantly increase her or his benefits based upon the benefits payable to the deceased spouse. Therefore, it’s important that seniors and their loved ones understand how to maximize those benefits. Accessing survivor benefits and understanding what is available is an important piece in helping seniors with their overall planning goals.  Please contact our office if you have any questions or if we can be of assistance to someone you know.



Five Things that Elder Law Attorneys are Thankful For

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ThankfulThis is the time of year we like to pause and reflect on that for which we are thankful.  In our personal lives, we often share these thoughts around the table at Thanksgiving.  In our professional life, the words “thank you” are not said often enough.  We would like to dedicate this issue of The ElderCounselor to say “thank you” for the people and things that make our lives more fulfilling. Here are five things we Elder Law attorneys are thankful for.

The Ability to Help Clients Plan Before a Crisis Happens

            Elder Law attorneys care greatly for their senior clients and like to see things go smoothly for them, especially as difficult issues arise, such as finding and paying for long-term care.  Clients who understand the need to plan early are more likely to find a smooth path into these transitions.

            While typical estate planning includes planning for incapacity during one’s lifetime as well as distribution of one’s assets upon their passing, Elder Law attorneys have an added focus of planning with long-term care in mind.  Often a traditional estate plan will have the same documents that an Elder Law attorney puts in place, like a Revocable Living Trust; a Pour-Over Will; a Durable Power of Attorney; a Health Care Power of Attorney; and a HIPAA Authorization.  However, the provisions within the documents vary significantly depending on the focus of the attorney drafting them.  Because one focus of the Elder Law attorney is to help  clients plan for the possibility of needing long-term care while protecting the home and other assets, our planning documents often include an irrevocable trust designed specifically for this purpose.  Other documents, like the Durable Power of Attorney, will include enhanced powers that allow the agent to engage in Medicaid and/or Veterans Administration (“VA”) pension planning. 

            Adding enhanced provisions to existing planning documents enables those trusted persons to pursue additional planning strategies if and when the time comes for the senior to utilize long-term care.  When the time comes for Medicaid planning or VA pension planning, it is imperative for the trustee and/or the agent to have the authority to take specific actions on behalf of the elderly person, like the authority to establish and fund an irrevocable trust, file a Medicaid application or prepare a VA pension application.  The grant of authority must be clearly stated within the documents yet these powers are not normally found in general estate-planning documents. 

            Having clients in our office long before they are in need of long-term care allows Elder Law attorneys to successfully and efficiently assist clients when they need it.  We are all thankful when we have such a client.

Other Professionals

            An Elder Law attorney’s office is much more than a place where legal analysis is conducted or where legal documents are prepared.  It is also a place where seniors are heard, encouraged to express all of the issues they are facing, and where connections are made.

            We are thankful to have ongoing relationships with other professionals that are compassionate about the elderly.  Our clients are much better off because of these other professionals.  For example, many times a Placement Specialist is needed to help a client find the best facility to meet their long-term care needs.  Sometimes a family needs a Care Manager for a variety of reasons including to act as an advocate or to oversee care provided to a loved one.  Professional Fiduciaries can be an amazing resource for families as they can alleviate stress from family members allowing family to just “be there” for the senior.  CPAs, Financial Advisors, other Estate Planning attorneys, Real Estate agents, Insurance agents and a plethora of other senior-centric professionals are invaluable to the Elder Law attorney devoted to their clients.

            These relationships are not only personally fulfilling, but also allow us to comprehensively serve our clients. 

Non-Profit Organizations

            There are many non-profit organizations that are dedicated to making life better for the elderly and who support Elder Law attorneys and for that we are thankful. These organizations keep us up to date on the issues facing the elderly, give us a heads up on changes in the laws across the country and continue to provide new ideas on how to best serve our clientele.  The National Association of Elder Law Attorneys, the Alzheimer’s Association and the National Council on Aging are a few of the organizations that Elder Law attorneys can connect with to better serve our clients.   We are all in this together and working toward a common goal to serve seniors and their loved ones the best way possible.

Trustworthy and Committed Family Members

Although we occasionally serve an elderly client who has no family members or close friends, we are thankful when trustworthy and committed family members are available to the client.

            Many of the strategies we have available to us only work when a client has trusted people to assist in the strategy.  Many thanks go to adult children who are committed to their parents.  Spouses who are still devoted to your ill spouse after “how-many-ever” years of marriage are also greatly appreciated by Elder Law attorneys!  Without you our work would be much more difficult.  Without you, the strategies we employ would fail to work the way they are meant to work.  You are vital to the health and welfare of your elderly loved one.

            It is often the family member who finds the Elder Law Attorney for the elderly client.  As technology changes, the older client sometimes has a difficult time finding the necessary resources.  We are very grateful to those family members who seek out an Elder Law attorney and bring us together.

Our Own Support System

            Advocating for a senior can be stressful for a variety of reasons.  While it is one of the most fulfilling jobs we can think of, it brings with it concerns for our clients that can creep up at all hours of the night.  As with any professional whose heart is a big part of their service, our support systems are essential to our well-being.

            Our support systems include our family members, professional colleagues, neighbors and our friends.  Without our supporters, we would be unable to continue doing what we love. 

Happy Thanksgiving to all of you!  Enjoy your family and friends this holiday season.  If you have any clients or know of anyone who would benefit from the assistance of an Elder Law Attorney, please do not hesitate to contact us.  We are always happy to hear from you and your clients.  Happy holidays!



Choose Wisely Grasshopper! Choosing an Attorney – Why Education is Important…

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The topic of this blog post is choosing wisely, grasshopper. We’re going to talk about how the education of your attorney is so important.

Why is it important? I was recently at a elder law immersion bootcamp in Tampa, Florida, learning advanced planning and strategy with attorneys from across the country. Simply getting the education down there is a great value in itself.

But if I’m just showing up, just taking in the information that’s put out, that’s one thing. That’s really a minor part of what we were doing.

We’re staying up on changes on federal and state laws. This complicated area of law changes all the time. For example, federal regulations and state medicaid laws are constantly updated. As well as tax laws, trust rules, and other things of that nature.

So keeping up to date on those changes, learning cutting edge tools and strategies, the new developments, and new types of trusts, revocable and irrevocable.

Then communicating with other leading attorneys from across the nation who really know their stuff. Getting out of my box in Shelby and the Charlotte area of North Carolina and seeing what other people from around the country are doing. It’s so important to educate yourself in any profession, but it’s definitely something to look at if you’re searching for an attorney.

You want somebody who’s getting out of their comfort zone, who’s not just confining themselves – not dabbling.

Do not dabble in any area of law, especially not elder law. I think any good attorney will tell you this.

In any area you’re thinking about hiring an attorney, one of the greatest benefits is doing what I’m doing right now: talking to other attorneys. And conferring with them outside of the classroom setting, kind of a mastermind group.

Discussing different ideas, kicking things around – how to solve problems for a specific client or different scenarios that we can go through to be a better lawyer or run a better practice.

These things are extremely beneficial, as well as keeping those relationships up. So I can go to that well again and have a bevy of excellent leaders in their field around the country who can solve any problem that comes my way, crush any problem that comes our way.

Whether I know it or have seen it before or not, I’m going to have a deep bench. Some of you have heard me say that before, a really deep bench that I can go to, the groups that I’m involved in. And that’s the benefit of these types of conferences and being involved in national groups in a specific area of law.


Home Health Care: What Services are Provided?

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Is it the same as if you’re in a nursing home and being cared for by a nursing home attendant? Is it more? What about running errands or if I need to go get groceries or cat food?

Types of Care

There are a number of people that may have arthritis. Arthritis is worse in the morning. Once they get their muscles warmed up and get moving, then they’re solid for the rest of the day – but they need that help.

They could be in an institutional setting, or they could stay at home with just this one thing to help them going. Others need help getting ready for bed at night. But during the daytime, they can do their own tasks.

Still others have a home health aid there 24 hours a day, preparing meals, running the errands, and taking them to the beauty shop. There are live-in programs as well. Someone is there to just live with the client and might be there 7 days a week.

These people need someone there overnight. If they wake up and need to go to the bathroom in the middle of the night, there’s someone to assist them.

Or just that companionship. They want a companion that can sit down with them, read the paper, discuss the news of the day. Watch Jeopardy and Wheel of Fortune together, talk about it and interact.

There’s skilled nursing, taking care of people who might be on a ventilator.  These ventilators are only the size of a laptop, but the person can’t breathe without it. Taking care of it, suctioning the trachea – that’s when you really need somebody.

Home Care Technology

Taking care of someone with a ventilator at home was unheard of years ago. There are so many options in home care with the technology today. Personal emergency response systems or a “Help, I’ve fallen and can’t get up” button – it used to be that if you fall down, you press the button. What if I fall down unconscious?

They’ve reverse engineered that now to detect if a person fell. If I don’t push the button, it’s going to respond.

There are medication-dispensing units. I put a medication cup in this box, and at 8 o’clock in the morning, the medicine cup will come down and say, “It’s time to take your 8 o’clock medications.” After 3 times, if I don’t do it, it rings into an operator.

The operator then calls my house and says, “Hey you forgot to take your medicine.” If I don’t answer, then they call my loved one to come and check on me.

The technology in home care is absolutely phenomenal. Military is probably the leader in telehealth. There are programs right now where the University of Washington does cataract surgery on patients in Alaska from Washington via robotic surgery with lasers.

There was a physician in Paris who actually did an appendectomy on a patient in New York. A doctor was standing by as they were demonstrating it. But as we develop that technology more and more, the ability to take care of people in the home is just going to explode.

Everyone wants to stay at home. With these kinds of advances, more and more are going to be able to do that.

That’s the wave of the future – getting away from a centralized hospitals and nursing homes, at least in the cases where it makes sense. There’s obviously still going to be a need for those places, but home care is on the low end of the affordability scale and people want to stay at home.

From a Medicare/Medicaid perspective, there are less resources coming out of the system as well. This is just a burgeoning, exploding industry with a lot of potential in the future.

Advantages of Home Care

Probably the number one reason is “my home is my castle”. It’s where people feel comfortable. If I want to walk around in my underwear, I can walk around in my underwear. 

People recuperate better at home. Less infections. Just having that continuity, someone who’s familiar with your health problems, mannerisms, and habits. They can pick up on subtle changes quickly, refer them out to the doctor, get them taken care of – whatever they need to have done.

Who Pays For Home Health Care?

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Let’s discuss who pays for home health care. Other than having money buried in the backyard or digging into your retirement fund, what are the different options? How can you pay for it?

Private Funds

One of the first choices is private funds. The individual has the money to pay for it, and so they pay for it. That’s obviously going to drain your resources, but that is one way that home care gets paid for.

Veterans’ Benefits

Another way is through the VA administration if the person is a veteran. It’s called a Home Attendant Program. Those benefits are available in an assisted living facility and/or home care. The way to get the ball rolling with that is you get your veteran to the local VA and talk to your primary care physician there.

Typically, that gives relief for 6 to 9 hours a week; 2 to 3 days a week of 3 hours of service. For those individuals, it may be just what they need to keep them at home. Unfortunately, the hours aren’t any longer than that.

The VA program is a great benefit for the veterans who qualify. One of the qualifying factors is you have to have served one day in a wartime period. But you didn’t have to be there.

So Korean War, Vietnam War, and Gulf War – if you served one day of service during a wartime period, you qualify with this program.

Long Term Care Insurance

Another avenue is through long term care insurance policies. Those policies range all over the board. Some of the policies are great. Some are not so good, but there is more standardization with the policies now than there were when they first came out a number of years ago.

With the long term care insurance policy, you’re going to need a physician’s order and at least two activities of daily living that are being performed each day to qualify. Another thing that’s important with the long term care insurance policy is the elimination period. That’s like your deductible.

It’s usually the number of days. You’re going to have a 30-day or 100-day elimination period. But they don’t talk about how much money you have to spend per day.

That means you can strategically get what you need in a shorter period of time, and then when your elimination period is exhausted, you can bump up to the number of hours you qualify for under the long-term care insurance policy. Again, preserving assets – it’s a great way to do that.

If you’re looking at a long-term care insurance policy, you want to look at an inflation rider. If you don’t have that and you have your policy for 30 years, you’re going to get $50 a day. In 30 years, $50 a day is not a whole lot.

So, look for an inflation rider; what are the daily limits.

Private Insurance

We’ve talked in another blog about Medicare and Medicaid. The other one is private insurance. Private insurance, depending on the policy, does not cover custodial care most of the time, which a lot of home care falls under. Private insurance policies typically don’t pay for the assistive care or personal care type services.

There may be a skilled nursing benefit, but if it says, “we don’t cover custodial care,” that’s probably going to be the personal care services that someone will receive at home.

Know Your Options

So those are some of the major players that help pay for the services. Just recapping – private funds, long term care insurance policies, private insurance policies, Medicare, and Medicaid.

One reason I do these podcasts, blogs, and seminars is to try to educate people. There are other options where you don’t have to leave the home, and you can protect as many assets as possible.

I call this a really cutting-edge area of law. Things are constantly changing. New tools are being developed everyday to help people.

Medicare vs. Medicaid: Understanding the Benefits and Differences

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How are you going to pay for home health care when you or your spouse find yourselves in a situation where one of you might be draining all the assets because of a catastrophic health care incident? Or where someone’s in a situation where they don’t want to come out of their home?

Benefits of Home Care

Being cared for in the home is certainly less dramatic. It also allows you to keep your dignity, staying in the home you’ve worked hard for your entire life. That’s what we’re about: trying to help people preserve their hard earned money and property – and keep their dignity in the process.

There are direct health benefits of staying at home. Less confusion, because it’s in an environment that you’re familiar with. Less infections, because there’s only one or two people in the home. Statistics demonstrate that people recuperate at home better than they do in an institutional setting.

Even just the peace of mind. All of us, if we have a choice, would rather be at home. Most of the time you don’t find people saying, “Please take me out of my home and put me in an institution somewhere.”

There are financial benefits as well. But health care in general costs money. Unless you have really planned for this with long term care insurance – which is not the norm – then you can quickly exhaust your other liquid assets paying for health care, especially as you age.

That’s where Medicare and Medicaid come in, whether separately or working in combination.

The Difference Between Medicare and Medicaid

How do those differ?

They are totally separate programs, Medicare and Medicaid: when they apply, how long Medicare lasts, and when it runs out and Medicaid can come in and take over.

Medicare is basically a health benefit for people who are typically over 65 years of age. If you’re younger than 65 and you have a disability that lasts longer than 2 years, you can qualify for Medicare prior to age 65. Also, with end-stage renal disease, you can get Medicare benefits very quickly and very early on.

Medicaid is really a program designed for the indigent, for those who don’t have the financial means to care for themselves. Carved out of that is a health care program, and typically they fall under Medicaid waivers.

How Medicaid Can Help You

In North Carolina, we have two Medicaid waiver programs for personal care services. That’s going to be assistance in your activities for daily living – bathing, dressing, ambulating, eating, mobility, transferring, and things of that nature.

One is called Personal Care Services or PCS, which you need a doctor’s order for. Typically, in that service, you can get up to 80 hours of services per month, which works out to be about 18 hours a week. Just this year, North Carolina legislator passed a law that allows an additional 40 hours for those with dementia, for a total of 120.

The second program is the CAPDA program. With your activities in daily living, you’re typically going to get  upwards of about 36 hours a week, which is more than PCS.

With both of those programs, you’ll have to qualify for Medicaid, whether you’ve already gone through the process or still need to apply. The PCS program can take a couple of months to get on. A couple of years ago, each county was capped out of the number of slots that they had for the CAPDA program.

Then, we have one other Medicaid waiver program, which is private duty nursing and is for RNs and LPNs to take care of people in the home who have catastrophic needs. They need either a tracheostomy and/or a ventilator – pretty high-tech nursing needs.

How Medicare Can Help You

The Medicare side of it is really a totally different program. If you’ve had a qualifying hospital stay, you’ve got to be getting better. But the real advantage to a Medicare program – when you have home health – is that you’re going to get up to a 60 day spell of illness.

It’s called an “intermittent spell of illness”, and that’s going to be paid 100% under your Part A Medicare. You might get nursing services, a physical therapist or occupational therapist, speech language pathologist, or a home health aid that comes and assists with bathing. And that’s going to last for 60 days.

Now, there are times when they can be recertified for an additional 60 days, but it usually caps out at that 60-day period.

When You Need Both

There are programs where Medicare and Medicaid can overlap at the same time. Then there are people that have finished their Medicare service and still need additional services after that. That could be through Medicaid, private pay, or long term care insurance.

And obviously there aren’t the stringent qualification requirements for Medicare like there are for Medicaid. One of the beauties of the Medicare benefit for home health is that it’s paid at 100%. For those individuals who qualify for that, it’s a great program for them.

The Importance of Planning Ahead

One of the most heartbreaking calls that I get is from the people that fall in that gap. They’re over-resourced for Medicaid, and they’re under-resourced to pay for it privately. Perhaps their income level doesn’t allow them to roll over and let Medicaid pay for it. It’s a hard place.

That’s why it’s important to plan ahead and make sure you’re prepared, whether it’s an emergency situation or simply old age.

Special Needs Trusts: The Current Law and Pending Legislation

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Individuals with special needs often face “quality of life” challenges compared to those without special needs.  Many times individuals with special needs require added expenses to meet those needs.  The added financial burden often leads individuals with special needs to depend on public benefits to help them meet those costs.   Unfortunately, public benefits often fail to meet all of the needs of a disabled individual.  However, the supplemental needs of those individuals (meaning needs not covered by public benefits) can be met by using funds held in a Special Needs Trust (SNT).


Understanding Special Needs Trusts

A Special Needs Trust is a trust that is established for an individual with special needs who is or may become dependent on public benefits.  The trust is specifically identified to meet certain supplemental needs and to enhance the quality of life for the beneficiary, the special needs person.  Most importantly, the SNT is created so as to not disqualify the beneficiary for the public benefits being received.  The trust, then, is a pool of money available for the benefit of the beneficiary in order to provide him or her with goods or services that public benefits do not provide.  For example, SNT funds may be used for in-home care services that would otherwise not be affordable to the beneficiary.  Should a person with special needs receive these funds outright and outside a properly created SNT, the individual may become ineligible for the public benefits and reinstatement of the benefits can be a difficult process.

There are two types of SNTs:  A third-party SNT and a first-party SNT.  A third-party SNT is one in which a loved one has assets that he or she would like to use to benefit the individual with special needs.  Whereas, a self-settled SNT is one in which the assets belongs to the individual with special needs. 

A self-settled SNT is often used in the case of a litigation settlement.  One example involves an individual who was in a car accident and sued the “at fault” driver successfully.  By the time the lawsuit settlement was reached, the individual had been declared disabled.  Instead of the settlement funds being given outright to the person who is now disabled, the funds could be placed into a self-settled SNT for the benefit of that individual.  This allows the person with the disability to continue to receive benefits and have the settlement money available to him or her for supplemental purposes, increasing his or her quality of life.

Self-settled SNTs have been recognized by federal law since 1993 under 42 USC §1396p(d)(4)(A).   A self-settled SNT contains a mandatory payback provision, meaning that upon the death of the beneficiary, the State will be paid back from the remaining trust assets up to the amount of public benefits expended on behalf of the beneficiary during his or her lifetime. 

Within a self-settled trust an individual trustee or corporate trustee is appointed to manage the funds in the trust.   Choosing the correct trustee is an important decision as the trustee will be responsible for managing and investing trust assets, and is responsible for following the guidelines regarding proper distributions from the trust.  Failing to do so could result in a loss of benefits for the trust beneficiary. 


Problem with the Current Law

The law, as currently written, states that a first-party trust may only be established by the individual’s parent, grandparent or a court of competent jurisdiction.  It appears that the option for a competent individual to establish his or her own trust under 42 USC § 1396p (d)(4)(A) was a simple mistake by the writers of the law.  However, this minor mistake causes major financial losses to disabled individuals.  It requires those disabled individuals who have no parent or grandparent alive to establish the trust, to expend money on an attorney and court costs in order to ask for a court order establishing the trust.  The money to accomplish this is often such an impediment for these individuals, that they do not pursue it and end up either kicked off the public benefits or forgoing the supplemental monies they would otherwise have access to.


Pending Legislation

Currently there are two identical bills sitting in the House of Representatives and in the Senate which would create the option for competent individual who is disabled to establish his or her own trust under 42 USC § 1396p(d)(4)(A).  In May 2013, H.R. 2123 was introduced in the House and the next day it was referred to the House subcommittee on Health, where is currently sits.  A few months later in November 2013, S. 1672 was introduced in the Senate, was read twice and referred to the Committee on Finance.  The title of the identical bills is the “Special Needs Trust Fairness Act of 2013” and is described as “a bill to amend title XIX of the Social Security Act to empower individuals with disabilities to establish their own supplemental needs trusts.” 

As advocates for individuals with special needs, it is important that we support this bill so that our clients have more choices for themselves with regards to establishing special needs trusts.  If you feel so inclined, please contact your Congressional representative and ask for the passage of these bills.  Encouragement from us of the importance of this bill to our clients is imperative to get the bill recognized and enacted.  Otherwise, it may get lost in the shuffle and our clients’ needs may not be adequately addressed.



A Special Needs Planning attorney is an essential advocate when preparing SNTs for individuals with special needs.  The attorney will be able to identify the type of SNT that would be helpful in the particular situation and will know how to properly construct it so as to prevent the person with special needs from being kicked off his or her benefits.  There are many roadblocks that can arise in the planning process and it is imperative that you have an attorney familiar with the many federal and state laws and regulations concerning public benefits and SNTs.

If you have a client with special needs who would benefit from the establishment of an SNT, please contact us.  We are committed to and passionate about assisting those with special needs and look forward to helping in any way we can.

Helping Families Deal With the Financial and Emotional Costs of Dementia

in Articles, Newsletters by Greg McIntyre Leave a comment

As Elder Law attorneys we are specially situated to help find solutions to many of the problems this condition brings with it.  While we can’t stop dementia, we can help protect those in its clutches while the medical world continues to seek prevention, treatment and reversal of the condition.


Losing Brain FunctionDementia Defined

The Alzheimer’s Association defines dementia as, “a general term for a decline in mental ability severe enough to interfere with daily life. Memory loss is an example. Alzheimer’s is the most common type of dementia.”

Dementia is not actually a specified disease.  It describes, instead, a general decline in memory or other thinking skills and is identified through a variety of symptoms.  Alzheimer’s disease accounts for 60 to 80 percent of dementia cases.  In order to be characterized as dementia, at least two of the following mental functions must be significantly impaired:  visual perception; reasoning and judgment; memory; communication and language; or ability to focus and pay attention.  Dementia is not a normal part of aging as the terms “senility” or “senile dementia” infer.  If a loved one is having trouble with any two or more of these mental functions, it’s a good idea to get it checked by a doctor.  Dementia is progressive and typically takes over the mental functions over time.  In this way, it provides the individual and the family with time to plan for its disastrous affects.[1]


Cost to the Individual

The cost to the individual with dementia is difficult to quantify.  Because dementia is a progressive condition and one where aging is the greatest risk factor, it is logical that at the beginning and younger stages of dementia, the cost to the individual is minimal.  As dementia progresses, so does the need for assistance with daily activities.  This assistance often comes in the form of meal preparation, help with grooming and hygiene, transportation assistance, as well as help with many other daily activities.  Dementia patients can become so mentally challenged that they may place themselves in dangerous situations, such as roaming neighborhoods and getting lost.  While the individual affected by dementia may need only a few hours of help per week at the beginning of symptoms showing, soon they may need around the clock supervision, not only for assistance with daily activities, but to protect them from themselves.  The individual’s costs will include medical expenses as well as paying a caretaker.

Caretaking for one with dementia varies depending on the quantity of care required.  An in-home caretaker may charge up to $21 per hour or higher.  Adult day care can run as high as $18,200 per year or more.  When an individual can no longer live alone but is not quite ready for a nursing home, Assisted Living facilities are available but may cost as much as $42,600 per year or more.  When around the clock care is needed, a nursing home can cost an individual up to $90,520 per year, or higher.  To view costs in other states and national average costs of long term care, see the MetLife Survey of Long Term Care Costs,


Cost to the FamilyFamily

Where the individual with dementia is fortunate enough to have family nearby, the family will often step up to assist the ill loved one with their daily activities.  Again, the process can be gradual and before the helpful family member realizes it, they may find themselves missing work and, finally, quitting their job altogether in order to give proper care to the dementia patient.  Obviously, the cost to the family includes the loss of income from this family member’s job.

The less recognizable cost to the family, however, is the emotional strain that is placed on the family member caretaker.  In order to save the family money, many family members will work nearly twenty-four hours, seven days per week.  The ramifications are physical, mental and emotional health problems to the caretaker.  The medical costs and possible future psychological costs to the caretaker, then, must be considered.

It is important that family members take a step back from the situation and assess this cost.  Providing a caretaker with time off every day, week and year is a must to ensure the caretaker’s health.  The caretaker must have appropriate support in order to keep caring for the loved one.


Cost to the Nation

As a nation we have begun to recognize the devastation that dementia has caused and will continue to cause.  Organizations such as the Alzheimer’s Association have been effective in lobbying for monies to be put towards the research of dementia treatment, prevention and reversal.  The cost of dementia to our nation has been a great motivator for politicians to fund such research.

A study conducted by RAND Corporation in 2013, estimated the national cost of dementia to be between $159 billion to $215 billion (including an estimate for the monetary value of informal care provided).[2]  The majority of the costs associated with dementia are for institutional and home-based long-term care and not medical services.

Medicare and Medicaid pay for some of this cost, which amounts to a taxpayer burden.  According to the Alzheimer’s Association March 2013 Fact Sheet, in 2013 it is estimated that Medicare and Medicaid paid approximately $142 billion in caring for those with Alzheimer’s or other type of dementia.[3]

It is clearly in the best interest of the nation’s economy to continue research on prevention, treatment and reversal of dementia.



The costs of dementia can be devastating to the affected individual, their family and the nation.  While scientists continue to search for solutions to the debilitating condition, the families affected with it must face its challenges.  It is recommended that those families seek emotional support by way of a therapist or support group.  In addition, seeking out an Elder Law attorney can benefit the affected individual and family members in several ways.  Elder law attorneys can guide families to important resources available for the financial and other challenges they will face.  Elder law attorneys can also ensure that the family’s assets are being used in the most efficient manner considering other available resources and the family’s individual goals.

Getting an Elder Law attorney involved in planning for the challenges ahead is one of the MOST important steps a family facing the impact of dementia will take.  If you or someone you know is affected by dementia, we can help and we welcome the opportunity to do so.



Practical Tips for Special Needs Planning from The Elder Law Guy

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Practical Tips for Special Needs Planning

Understanding the pitfalls associated with special needs planning is a must for all who assist families with children, grandchildren or other loved ones (such as parents) with special needs.

Tip #1: Special needs beneficiaries require special planning.  As a society, we have come a long way since 1987 regarding stereotyping people with special needs and these individuals’ planning requirements, but there remain numerous misconceptions that often result in costly mistakes when planning for special needs beneficiaries. These misperceptions may become even more costly in the future as fiscal pressures cause state and federal governments to cut back funding for people with disabilities. Thus, it is critically important that loved ones proactively and properly plan for these individuals.

The fiscal pressures of the federal and state governments make proactive planning for special needs beneficiaries increasingly more important.  It is important not to make the mistakes below that could cause special needs beneficiaries to rely exclusively on shrinking government funds, or that place them in unduly restrictive or ineffective structures.


Tip #2: Don’t disinherit the special needs beneficiary.  Many disabled persons receive Supplemental Security Income (“SSI”), Medicaid or other government benefits that provide basic food, shelter and/or medical care. The loved ones of the special needs beneficiaries may have been advised to disinherit them – beneficiaries who need their help most – to protect the public benefits. But these benefits rarely provide more than basic needs. And this solution (which normally involves leaving the inheritance to another sibling) does not allow loved ones to help their special needs beneficiaries after they themselves become incapacitated or die.  The best solution is for loved ones to create a special needs trust to hold the inheritance of a special needs beneficiary.  A properly drafted special needs trust will protect public benefits a disabled beneficiary may be receiving, and it will provide for proper care of that individual throughout their lifetime.


Tip #3: Don’t rely on siblings to use their money for the benefit of a special needs beneficiary.  Many family members rely on their other children to provide, from their own inheritances, for a child with special needs. This can be a very temporary solution, such as during a brief incapacity, if the other children are financially secure and have money to spare. However, it is not a solution that will protect a child with special needs after the death of the parents or when siblings have their own expenses and financial priorities.

For example, what if an inheriting sibling divorces or loses a lawsuit? His or her spouse (or a judgment creditor) may be entitled to half of it and will likely not care for the child with special needs. What if the sibling dies or becomes incapacitated while the child with special needs is still living? Will his or her heirs care for the child with special needs as thoughtfully and completely as the sibling did?

Siblings of a child with special needs often feel a great responsibility for that child and have felt so all of their lives. When parents provide clear instructions and a helpful structure, they lessen the burden on all their children and support a loving and involved relationship among them.

Tip #4: Procrastination can be especially costly for special needs beneficiaries.  None of us know when we may die or become incapacitated.  It is important for loved ones with a special needs beneficiary to plan early, just as they should for other dependents such as minor children. However, unlike most other beneficiaries, special needs beneficiaries may never be able to compensate for a failure to plan. Minor beneficiaries without special needs can obtain more resources as they reach adulthood and can work to meet essential needs, but special needs beneficiaries may never have that ability.

Tip #5: Don’t ignore a special needs beneficiary when planning.  Planning that is not designed with the beneficiary’s special needs in mind will probably render the beneficiary ineligible for essential government benefits. A properly designed special needs trust promotes the comfort and happiness of the special needs beneficiary without sacrificing eligibility.

Special needs can include medical and dental expenses, annual independent check-ups, necessary or desirable equipment (for example, a specially equipped van), training and education, insurance, transportation and essential dietary needs. If the trust is sufficiently funded, the disabled person also can receive funds to be used for quality-of-life-enhancing expenses: the types of benefits families currently provide to their child or other special needs beneficiary.  However, the rules often change on the types of expenses that can be paid for by a special needs trust. Therefore it is important to continually seek advice when drafting or administering a special needs trust.

Tip #6: A special needs trust does not have to be inflexible.  Some special needs trusts are unnecessarily inflexible and generic. Although an attorney with some knowledge of the area can protect almost any trust from invalidating the beneficiary’s public benefits, many trusts are not customized to the particular beneficiary’s needs. Thus the beneficiary fails to receive the benefits that the parents or others provide while they were alive.

Another frequent mistake occurs when the special needs trust includes a pay-back provision rather than allowing the remainder of the trust to go to others upon the death of the special needs beneficiary. While these pay-back provisions are necessary in certain types of special needs trusts, an attorney who understands this area and knows the difference can save family members and loved ones hundreds of thousands of dollars, or more.


Tip #7: Exercise great caution in selecting a trustee.  Loved ones or family members can manage the special needs trust while alive and well if they are willing to serve and have proper training and guidance. Once the family member or loved one is no longer able to serve as trustee, they can choose who will serve according to the instructions provided in the trust. Families or loved ones who create a special needs trust may choose a team of advisors and/or a professional trustee to serve. Whoever they choose, it is crucial that the trustee is financially savvy, well-organized and of course, ethical.


Tip #8: Invite others to contribute to the special needs trust.  A key benefit of creating a special needs trust now is that the beneficiary’s extended family and friends can make gifts to the trust or remember the trust as they plan their own estates. For example, these family members and friends can name the special needs trust as the beneficiary of their own assets in their revocable trust or will, and they can also name the special needs trust as a beneficiary of life insurance or retirement benefits.  Unfortunately, many extended family members may not be aware that a trust exists, or that they could contribute money to the special needs trust now or as an inheritance later.


Tip #9:  This is an ever-changing area of the law.  The rules applicable to special needs trusts and planning are constantly changing.  For example, the Affordable Care Act now makes private health insurance an option for people with special needs. However, private insurance will still not cover the costs of long-term care and other services or equipment necessary for a loved one with special needs.  Thus, even if the family chooses private insurance, the special needs beneficiary may still require Medicaid eligibility, necessitating a special needs trust. Please contact us if you have questions about these options.



Planning for a special needs beneficiary requires particular care and knowledge on the part of the planning team.  A properly drafted and funded special needs trust can ensure that a special needs beneficiary has sufficient assets to care for him or her, in a manner intended by loved ones, throughout the beneficiary’s lifetime.  Please contact us if you have any questions regarding planning for special needs beneficiaries.
To comply with the U.S. Treasury regulations, we must inform you that (i) any U.S. federal tax advice contained in this newsletter was not intended or written to be used, and cannot be used, by any person for the purpose of avoiding U.S. federal tax penalties that may be imposed on such person and (ii) each taxpayer should seek advice from their tax advisor based on the taxpayer’s particular circumstances.

Beat the Odds: Long-Term Care

in Articles by Greg McIntyre Leave a comment


Recent studies estimate that of people turning 65 by the year 2005, 69% will need some form of long-term medical care. What does this mean to you? Statistically, the odds are you’re going to need some type of prolonged treatment and that’s going to be a huge financial drain on your resources.

Even estates of a half-million to two million dollars could be drawn down to zero with the enormous costs of prolonged healthcare, especially if that care involves some type of specialized treatment in addition to a long-term care or nursing home facility. How can you prepare for or plan around this? You find somebody that can help you, someone that can plan around it. That’s what we’re here for.

Give me a call at (704) 259-7040 to discuss your options.

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