Posts By: Gene Osofsky

Q.  I hear that qualifying for a reverse mortgage will soon become more difficult. Do you know anything about this?

A. Yes, beginning March 2, 2015, all persons applying for a reverse mortgage under the Home Equity Conversion Mortgage (HECM) program will need to pass a Financial Assessment. This is new!  No longer will reverse mortgages be based primarily on the borrower’s age, the value of the home and prevailing interest rates. Now, for the very first time, qualifying will also depend upon the borrower’s income and credit history. This is a major development which will place reverse mortgages out of reach for some borrowers.

As you may know, reverse mortgage loans under the HECM program are insured by the U.S. Department of Housing and Urban Development (“HUD”). When the loans go sour, such as when the borrower fails to make real property tax payments and/or homeowner’s insurance premiums, HUD covers the default. This scenario has created significant expense to HUD, and has resulted in some homeowners losing their homes in foreclosure, causing much concern in Washington.  Hence the new rule.

In the past, some borrowers have either been unwilling or unable to make property tax and insurance payments, placing the underlying security in jeopardy and triggering a default of the loan and sale of the home. In an effort to address this problem, the new HUD rule will require applicants to demonstrate — by income and credit history — their “willingness and capacity” to timely meet their financial obligations and to comply with the mortgage requirements.

For borrowers who cannot demonstrate a satisfactory “willingness and ability” to meet these obligations throughout the life of the loan, the following are the likely new outcomes:

1) A full Life-Expectancy Set Aside will be required out of the HECM loan proceeds, to cover all of these payments for the life expectancy of the youngest borrower; or

2) The loan will be denied.

For some borrowers, the new lifetime set-aside may be so large as to make the reverse mortgage impractical. This could occur, for example, where there is not enough equity in the home after the set-aside to generate meaningful proceeds for the borrower. This would be especially true for those borrowers who are obliged to pay off an existing mortgage as part of the reverse mortgage transaction.

While it could be argued that the new rule will make the loans “safer” for the homeowners by either imposing mandatory set-aside requirements or denying them the loans entirely, nevertheless the new rule may deprive some homeowners of the means to supplement their living expenses in retirement.

If you have been sitting on the fence about a reverse mortgage, you might consider  applying immediately so that your application is on file before the March 2 deadline.

Thanks to Tim Pedersen, a Licensed Reverse Mortgage Adviser with Retirement Funding Solutions, for alerting us to the changes.

Alert:  On February 26, 2015, HUD announced that it would delay the new requirement to April 27, 2015, to allow for further training of personnel and development of systems to implement the new rule.

For further reading, see HUD’s Mortgagee Letter 2014-2 issued 11/10/2014.

Posts By: Gene Osofsky

Q. I hear that President Obama signed a new law that will make life easier for persons with a disability. Do you know anything about this? We would like to set up something for our grandchild who has a disability and is on SSI and Medi-Cal.  

A. Yes. It is called “Achieving a Better Life Experience Act”, or the “ABLE Act” of 2014.  It was passed by Congress by an overwhelming majority and signed into law by the president on December 19, 2014.  Once fully implemented, the ABLE Act will allow eligible persons with a disability to open tax-free savings accounts,  and permit the individuals or their families to contribute up to $14,000 per year into the accounts and still keep government benefits, such as SSI and Medi-Cal.

The Act’s purpose is to encourage the creation of an additional financial resource to help individuals with a disability meet supplemental needs beyond those very basic needs provided by government programs. The accounts will be structured much like 529 Education Savings Plans.

For perhaps the first time, the ABLE Act recognizes the extra costs incurred by persons living with a disability, who otherwise depend upon public benefits for assistance with healthcare, food, housing and the like. Under existing law, to be eligible for public benefits an eligible individual generally must meet certain resource limitations, such as having no more than $2,000 in savings. This resource limitation has long left very little assets available for those essential needs not fully covered by governmental programs, and even less to cover emergencies.

When the law is fully implemented, an ABLE Account may be established by the eligible individual or his family. However, there are some limitations: (1) it can only be established for a beneficiary whose disability began before turning age 26;  (2) the annual contributions are limited to the annual gift tax exclusion amount, currently $14,000 per year; (3) the total contributions to the account may not exceed $100,000 in order to maintain eligibility for SSI, nor more than $371,000 (in California) to maintain  eligibility for Medi-Cal; and (4) amounts remaining in the account at the death of the beneficiary are reimbursed to Medi-Cal to the extent of Medi-Cal benefits received by the beneficiary after creation of the account.

While the annual contributions are not tax-exempt, the interest income generated by the savings will be tax-exempt so long as distributions from the account are used only for qualifying expenses as defined by the legislation.

Until now, the family of a beneficiary with a disability had limited options to provide for the financial security of their loved one:   (1) “spending down” a gift or inheritance in the month of receipt,   (2) creating or joining a Special Needs Trust (“SNT”) managed by an independent trustee and/or (3) relying upon the informal generosity of family members. Now, the beneficiary with a disability and his family have a new estate planning tool to enable planning for the future: an ABLE Act Savings Account.

Note: the federal statute will not be fully effective until implementing regulations are adopted, and not until the beneficiary’s home state adopts state legislation in conformity with the ABLE Act.  Advocates for persons with a disability expect that these requirements will be in place for California citizens sometime during the year 2015. Until then, eligible persons and their families should watch state developments closely, so that they can act as soon as the legislation is fully operational.

Planning Idea for Housing Expense:  In some situations, an ABLE Account can be used very effectively to maximize public benefits, and avoid an ISM reduction in the beneficiary’s SSI. If housing expenses were paid by a third party, such as a family member or even by the SNT, there would normally be a partial reduction in the beneficiary’s SSI for that month. This is called an ISM Reduction, where ISM stands for “In Kind Support and Maintenance”.  However, if that payment were, instead, paid from the beneficiary’s ABLE account, there would be no ISM Reduction, as the payment would not be treated as ISM.  The ABLE Account could then be replenished each month by the SNT or the family benefactor (so long as the contributions did not exceed $14,000 per year in total, or that year’s  Annual Exclusion Amount, (which is adjusted each year by the federal government based upon the inflation index), so that the monthly housing payments continued to be made from the ABLE Account on an ongoing basis. This approach could save a beneficiary on SSI up to $3,180 per year in year 2018 (at $265/month) in SSI benefits thus preserved; an SSI Couple could save up to $4,652 per year (at $387.66/month), in SSI benefits preserved, using this approach.

2017 Update:  As of 04/18/2017, 19 states have implemented the Able Act: All but Florida allow residents of other states to join their state’s plan.  California has passed enabling legislation, but the Able Account is not yet operational here. We hope it will be operational in California sometime during the Summer, 2017.  For Proposed Regulations in California, see this link on the State Treasurer’s Website.   For more information on the status of Able Accounts around the country, visit the Able National Resource Center; Treatment of ABLE Account by Social Security for those receiving SSI:  POMS SI-01330.410; ACWDL 17-02 (1/13/2017) with ISM values for 2017. On October 4, 2017, Governor Jerry Brown signed into law SB 218, which seeks to prevent automatic recovery from the remainder in an ABLE Account following the death of the beneficiary.  This law needs approval from the federal Center for Medicare and Medicaid (“CMS”), but approval is anticipated.  However, even with approval, in order to avoid recovery, the beneficiary may still need to be survived by a spouse, minor child or child with a disability.  Approval by CMS is anticipated in view of the CMS Medicaid Director Letter, SMD # 17-002, issued by the Director of CMS, seemingly encouraging state legislation to limit recovery. Also, word has it that the ABLE Account Program is slated to begin in California in early 2018.  Stay tuned.

2018 Update.  ABLE account owners who have employment may be eligible to contribute above the $15,000 annual contribution limit [for 2018] (possibly up to an additional $12,060 depending on the gross income of the account owner). The basic contributions up to $15,000 for the year could be made by the account owner OR anyone else, but the additional contributions up to $12,060 for the year can only be made by the ABLE account owner into his/her own ABLE account. See the ABLE National Resource Center (ANRC) (www.ablenrc.org). Note: Questions remain about aspects of the provision relating to these increased contributions and may require guidance from the U.S. Department of the Treasury. See, also, Disability Benefits 101 at https://ca.db101.org/ca/situations/workandbenefits/assets/program.able.htm

2022 Update: As part of the Secure 2.0 Act, Congress passed and the President signed the ABLE Age Adjustment Act. This will increase the age at which the ABLE account owner’s disability must have started from age 26 to age 46, but not until January, 2026.  See this article for more.

 

 

 

 

Posts By: Gene Osofsky

Q.  My husband has become quite frail and needs care on a daily basis. To enable us to continue to live in our home together, our daughter has been assisting with his care on a daily basis and has switched to part-time at her own job in order to help. Our other children live out of state and are unable to assist. We would like to do something special for our daughter.  Any suggestions?

A. A caregiver contract might be the perfect solution.  According to a recent study by MetLife, nearly 10,000,000 Americans age 50 and over care for an aging parent. The cost impact upon the child rendering care — in terms of lost wages, pension and Social Security benefits —  averages approximately $300,000.  To help soften this loss of income and employment related benefits for your daughter, you might actually hire her to help care for your husband.

Such an agreement comes with a number of benefits: it helps replace your daughter’s lost income from her own job; it recognizes her contribution in a meaningful way; and, it may actually help your out-of-state children feel less ‘guilty” about their inability to render daily assistance. Since it is linked to the hours of service she actually renders, the care contract might be a better alternative to increasing her share of any inheritance, an approach which could otherwise create sibling resentment down the road.

This arrangement may also help your husband qualify for government benefits:  If he is a veteran, these ongoing care expenses may enable him to qualify for a monthly veteran’s pension, even where his disability is unrelated his military service, provided that he meets the other pension requirements.  Further, monies paid pursuant to a properly drawn care written agreement would usually not be considered prohibited “gift” transfers, an important factor should you or your husband later need care in a nursing home and choose to apply for a Medi-Cal subsidy.

The caregiver agreement must be in writing.  It should include a description of the duties to be performed, the estimated number of hours per week or month that performing those duties will require, and the rate or manner of compensation, which must be reasonable. Compensation can even be made via an “up-front” lump sum payment to cover future services to be rendered over your husband’s lifetime, calculated using life expectancy tables.

Since your daughter will be receiving income, she should report that income on her own tax returns, and you should arrange for an endorsement on your homeowner’s insurance policy to comply with workers compensation laws.  You should also make payroll deductions when you pay your daughter, so she can continue to build Social Security credits toward her own retirement. A bookkeeper or tax preparer can easily show you how to do this or can do it for you periodically if you prefer.  Also, be sure to discuss the agreement with all of your children so that everyone feels good about the arrangement.

If handled properly, this can be an excellent solution to your concerns and be a “win-win” for the entire family.

 

Posts By: Gene Osofsky

Q.  My wife and I are considering making large gifts to our two children and four grandchildren, and we would like to do so in a way that is “tax wise”.  Do you have any advice for us?  

A. Yes. Many people mistakenly believe that you cannot gift more than $14,000 per year without incurring a gift tax. Not so.  In fact an individual can actually gift more than $5 million during lifetime without incurring a gift tax. Here is the way gift taxes work:

1) Annual Exclusion Gifts: No Gift Tax Return Required:

a) $14,000 Per Year:  Each of you can gift up to $14,000 per year per recipient without the need to file a Gift Tax Return. Such gifts are called Annual Exclusion Gifts and you can make such gifts to as many persons as you wish each year.

b) “Doubling Up”:  If you and your wife are in a position to do so, together you can actually double that amount for each gift recipient. So, together, you could gift a total of $28,000 to each recipient for a total of $168,000 to your loved ones : $14,000 X 2 donors X 6 recipients.

c) Year End Straddle: On or after January 1, 2015, you and your wife could do the same thing once again, as you would then be in a different tax year.  So, over the course of a period as short as a calendar week – provided that the week straddles both the last days of this year and the early days of next year — the two of you could gift a total of $336,000 ($168,000 X 2 Tax Years) to your loved ones without the need to file a Gift Tax Return or use any of your lifetime exemptions. I call this strategy the Year-End Gift Straddle. 

2) Gifts Above the Annual Exclusion:  Gift Tax Return Required

a) Lifetime Exemption: If you choose to make gifts above the Annual Exclusion amount, then you can make them gift tax free by using a portion of your Lifetime Exemption (sometimes called the “Unified Credit” or Lifetime Exclusion). That Lifetime Exemption is currently $5,340,000 per person for U.S. citizens, and increases to $5,430,000 next year. Annual Exclusion Gifts do not count against that exemption; they can be made in addition to Lifetime Exemption gifts.  Also, a surviving spouse can, by making a timely election, opt to preserve the deceased spouse’s unused exemption for the survivor’s own use, thereby effectively doubling it. This is called “portability”.

b) Gift Tax Return:  To the extent that your gifts exceed the Annual Exclusion amounts, you must file a Gift Tax Return even though no actual gift tax would be due. Reason: the IRS wants to track your use of your lifetime exemption, so that it knows how much you have left to use upon death. Example: if you used $1 million of your lifetime exemption to make excess gifts during life, then your remaining exemption to apply against estate taxes upon death would be $1 million less.

Cautions:  Before making large gifts, be sure that you can afford to do so. Lastly, if there is a possibility that either of you may need to apply for a Medi-Cal subsidy for nursing home care in the near future, you should consult a professional with special knowledge about the Medi-Cal program before making those gifts: Gift transfers may adversely affect your ability to qualify for a Medi-Cal subsidy unless those gifts are handled in a very special manner.

Posts By: Gene Osofsky

Q.  When Dad became unable to care for himself, I moved in with him and cared for him for as long as I could.  When his care needs increased, we had to place him in a nursing home.  He lived there about a year, on a Medi-Cal subsidy, before he passed.   Recently, I received a reimbursement claim from Medi-Cal for about $90,000.  Help! Is there anything I can do about this?  We would like to fix up and sell his home, as Dad intended.

A.  Perhaps, depending upon the facts. Background:  Medi-Cal will subsidize the cost of a nursing home stay for individuals who are financially eligible. However, when that person dies, Medi-Cal will generally seek reimbursement for the amount of benefits paid out. This is called  Estate Recovery and Medi-Cal will usually file a claim which prevents sale of the home until the claim is paid.   However, there are exceptions to Estate Recovery, including the following: (1) Medi-Cal will waive its claim if the beneficiary is survived by a minor, blind or disabled child;  (2) Medi-Cal will defer its claim if the beneficiary is survived by a spouse, but only until the death of the surviving spouse; and (3) Medi-Cal will waive a portion of its claim, based on hardship, if the beneficiary is survived by a child who qualifies as a “caregiver child”.

To qualify as a “caregiver child” you must have  (a) moved in with your father, (b) rendered care to him for at least two years while residing in his home, and, (c) later prove to Medi-Cal, via letters from healthcare providers,  that your in-home care actually delayed your father’s entry into a nursing home. Also, you must continue to reside in your parent’s home through the time of Medi-Cal’s determination on your application for waiver. This exception seemingly recognizes that, by caring for your father and delaying his entry into a nursing home, you have saved the state money and are deserving of a benefit in that he will now have a larger net estate to pass on to you.

Unfortunately, qualification for this exemption is difficult for most child-caregivers, partly because of the requirement that the child providing care must actually reside in the parent’s home during the entire time that care is rendered.  If the child also maintains his or her own separate residence, Medi-Cal may deny the claim, forcing the matter to an administrative or judicial hearing with an uncertain outcome.

Also, if a waiver is granted, it would be only as to your proportionate share of your parent’s estate.  For example, if you are one of three children designated to receive your parent’s estate, the waiver will be – at best – only as to one-third of the Medi-Cal claim. If the waiver is denied, remember that the claim is against your father’s estate, and you would not have personal responsibility to pay from your own assets.  Also, there may be other options, such as a voluntary lien with a payment plan.

Had your father been able to take proactive planning steps during his lifetime, lawful strategies could have been implemented to protect the home from a Medi-Cal recovery claim entirely, avoiding the need to apply for waiver. Unfortunately, many people are not aware that preplanning is often the key to avoiding a Medi-Cal recovery claim. For those parents who wish to pass on as much as possible to their children without burdening their estate with a Medi-Cal recovery claim, know that lawful steps can be taken during lifetime to do just that.

Posts By: Gene Osofsky

Q.  I have a Living Trust.  I am the original trustee and my children are the successor trustees.  Do you have any thoughts about easing the transition of trustee duties from me to my children when the management of my finances has become too much for me?

A. Yes. It is important for that transition to be as seamless as possible, so that your assets can be managed and bills paid without delay.  Here are some suggestions:

1) Simplify Succession “Trigger”: Take a look at your trust to determine what triggers the change of trustees from you to your children. Typically, it may be the written determination by one, or perhaps two, physicians, reciting your inability to handle your financial affairs.  If your trust requires a letter from two physicians, I suggest changing that requirement to only one. Reason:  If you are then residing in a nursing home, where patient care is typically monitored by one physician, it may be difficult to arrange an evaluation for this purpose by a second physician. Reducing the requirement to only one doctor may save your children much grief with medical logistics.

(2) HIPAA Release.  Make sure that your trust, or related document, provides a HIPAA privacy release authorizing your doctor to disclose information about your ability to manage your affairs.  Absent a privacy release, some physicians may be reluctant to write a letter regarding your capacity.

(3) Add Co-Trustee. At some point, consider adding one of your children as a co-trustee and recite in your trust, or in an amendment to your trust, that any single trustee has the power to write checks or take other action on behalf of the trust. This would then authorize your child to gradually take over more responsibility for managing trust assets without a formal certification of your incapacity. Doing so sooner than later also allows you the opportunity to watch your child perform his or her duty, and afford you the opportunity to provide pointers to him based upon your years of accumulated wisdom.

(4) Consider Resignation.  Alternatively, when you feel that managing your trust has become too much for you, you might consider the proactive approach of resigning. A formal resignation triggers the succession of trustee duties to your child without a formal finding of incapacity. It, too, can accomplish a smooth transition without the need for doctors’ letters.

(5) Minimize Successor Liability.  To encourage a successor trustee to step into the shoes of the predecessor, recite in your trust that the successor is not responsible for any acts or omissions of his predecessor.  You might also recite that whoever is serving as trustee is not liable for any action taken in good faith. These two protective clauses would help induce your designated nominee to assume his duties when appropriate, whether that successor is one of your children or the trust department of your favorite bank.

(6) Inform Your Bank: Make sure that your financial custodians have your list of successors on file, so that when they step forward to assume their duties their identity is known to the bank. You might even introduce your nominees to your bank officers, and suggest that they take a sample signature and make note of the child’s address and driver’s license.

By taking some or all of the above steps, you will have taken proactive steps toward a seamless transition of trustees when the time comes.

 

Posts By: Gene Osofsky

Q. Regretfully, our son has been a ne’er-do-well for some time. He has been only sporadically employed and would likely squander any inheritance on drugs. My wife and I are thinking of taking him out of our will and leaving everything to our other two children. Any thoughts about how we should go about doing this?

A. I am sure that this decision must hurt both of you deeply.  However, since you asked: Yes, I do have some advice which I call the “Do’s and Don’ts” when disinheriting a child:

1) Do Consider a “Skip Bequest” to His Children: If your son has children, you might leave his share directly to his own children, perhaps in a trust or guardianship arrangement managed by one of your other children.  That might be more palatable to both you and your wife, and might very well discourage a will contest by him.

2) Do Consider an Incentive Trust: You might leave your son’s share to an Incentive Trust.  This is a trust designed to encourage behavioral changes as a condition to receiving trust benefits. For example, if your goal is to encourage him to be drug-free, you might specify that he must test free of drugs for a period of 24 months before he receives any benefit from the trust. You could also require that he maintain steady employment and provide proof of same to the trustee.

3) Do Document Your Decision: If you feel there is any possibility that your son might challenge your will on the ground that you lacked capacity, take steps now to help your other children defend against a challenge later.  You might suggest to your attorney that, at the time of signing your will, he or she record an audio or videotape interview with you and your wife, wherein you discuss your reasons for disinheriting your son. Additionally, it might be wise to secure from each of your physicians a letter affirming your capacity to make estate planning decisions.

4) Don’t Overlook Naming Him In Your Will or Trust. If you stay with your decision to disinherit your son, it might be tempting to not even identify him in your estate plan.  That would be a mistake.  Were you to omit his name entirely, the law would presume that you just had a memory lapse, and a judge would likely insert him back into your will to take his proportionate share as a pretermitted heir.  To protect against this, you should specifically identify him in your plan documents, and only then recite that he is left nothing.

5) Don’t Rely Exclusively on the “No Contest Clause”: While designed to discourage will contests, the common No Contest Clause (“NCC”) often included in wills, standing alone, would likely not work. The NCC merely says that anyone who unsuccessfully challenges a will receives nothing. It is designed to discourage a beneficiary from trying to get a larger share of one’s estate.  However, in your case, you propose to leave nothing to your son at the outset.  Thus, he would have nothing to lose — and potentially a lot to gain — by challenging your will.   For this reason, it would be better to leave him something, say, just enough to discourage a will contest. He would then have something at risk, and the NCC would have a greater chance of achieving its purpose.

Posts By: Gene Osofsky

Q.  In previous articles you have written about the option of seeking a Medi-Cal subsidy to help pay for the cost of nursing home care if that need arises. I have a Living Trust.  Are there provisions that I should include, or some that I should avoid, in order to facilitate Medi-Cal qualification down the road? 

A.  Great question. While I cannot provide an exhaustive list in the space of this article, I can comment on one that is critically important: a Living Trust-based estate plan should permit amendment or revocation by a trusted agent if the trustor, himself, later becomes incapacitated.

Background:  When many people set up trusts, they provide that only they, themselves, are empowered to make amendments or withdrawals from the trust.  For persons in robust good health, that restriction makes perfect sense: they understandably do not want others tampering with their trust.

However, when those same individuals age, become infirm and face the need for nursing care, this restriction can become a financial obstacle.  Reason:  In order to invoke strategies to accelerate eligibility for a Medi-Cal nursing home subsidy, it is often necessary to first remove assets from the trust. The same is true when the goal is to protect the home or other assets from a Medi-Cal “payback”, or recovery claim, after death.

The problem arises where the infirm trustor does not then have sufficient mental capacity to sign documents to amend or remove assets from his trust. In that case, his family may be unable to invoke planning strategies to deal with excess resources and qualify him for Medi-Cal.  Without help from Medi-Cal, the cost of care could potentially drain the trust estate, to the financial detriment of the trustor and his family.

Check to see if your trust provides that the right of amendment or withdrawal is “personal” to you, as the trustor. If so, you may have a problem.  Such a provision might read something like the following:

“The power to revoke or amend this trust is personal to the settlor and shall not be exercisable on the settlor’s behalf by a conservator, an agent under a power of attorney, or any other person or entity.”

If your trust contains a provision like the above, it could be the  “poison pill” which later exposes your trust assets to rapid spend down in the event you need nursing care and/or to a substantial Medi-Cal recovery claim after death.

Perhaps a better plan would be to change your trust now to authorize your trusted agent under a Durable Power Of Attorney (“DPOA”) to amend or revoke your trust in certain circumstances, such as if the need for nursing care arises. If you are concerned that such power might be abused, you might build restrictions into its exercise, such as by requiring the written certification of a physician that you need nursing home care, the approval of an attorney who practices in the field of Medi-Cal planning and/or the approval of a judge.

If you do opt to so modify your trust, be sure to include coordinating provisions in your DPOA, a legal requirement that is often overlooked.

Lastly, for those who no longer have capacity to change their trust, know that application can sometimes still be made to the superior court for permission to amend or revoke the trust when need requires, a process which is expensive and the outcome uncertain.

 

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Posts By: Gene Osofsky

Q. My brother-in-law just died, and I expected the entire family to be invited to a formal reading of his will. So far, nothing has been set up. Does that sound right?

A. Actually, yes it does. You have probably seen a number of old movies where, after a person’s death, his next of kin gather in the attorney’s office for a formal ‘reading of the will’.  In the movies, the attorney somberly reads the will aloud while the family listens with anxious anticipation to learn how the decedent provided for them. Typically, the camera captures audience reaction as the decedent’s wishes are finally made known.  In real life, however, that scenario does not occur.

Instead, the heirs and beneficiaries typically receive a copy of the will in connection with the commencement of a formal probate proceeding: Within 30 days of death, the original of the decedent’s Last Will must be lodged with the Superior Court clerk in the county of the decedent’s residence.  If there is to be a probate of the will, the decedent’s attorney will then prepare a formal Notice of Petition To Administer the Estate and mail it to all heirs and beneficiaries.  This formal Notice is usually accompanied by a true copy of the decedent’s will.  If not, a copy of the will is available for viewing and copying at the clerk’s office as a public record.

However, even if there is no probate (for example, if the decedent held all assets in a trust), the original will is still kept in a secure file by the court clerk and there remains a semi-public record, available for viewing or copying upon showing the clerk the decedent’s death certificate or by obtaining a court order.

Essentially, each interested person receives, or can secure, a copy of the will to read for himself. That is typically how the ‘reading of the will’ actually occurs in today’s world.

Some have suggested that the former ceremony of reading the will has its roots in earlier times when literacy was not as common as it is today, and that the ceremonial reading aloud was therefore necessary to inform beneficiaries of the will’s contents. However, it is my guess that a more accurate explanation may have more to do with technology, i.e. the advent of copy machines. Certainly, in the days of Abraham Lincoln and even into the last century, copying a legal document for distribution to others would have been a labor-intensive process, usually performed by hand and therefore prone to error.  In that context, reliance upon a single original made sense.  By contrast, today we can quickly and accurately reproduce the decedent’s Last Will and easily distribute a true copy to as many persons who have a legitimate interest.

Hence, in today’s world there is no need for a solemn gathering to hear the reading aloud of the original Last Will, and the law does not require that an attorney do so. In fact, in all my years of practice, I have only been asked on one single occasion to read a will aloud to assembled family members, a request that I was happy to oblige out of respect for the family.

Posts By: Gene Osofsky

Q. I hear that Medicare will now cover mental health services, much like it covers care for medical and surgical conditions. Do you know anything about this?

A. Yes. Beginning January 1, 2014, Medicare began reimbursing the cost of outpatient mental health treatment services on a par with other Part B medical services.

Previously, Medicare beneficiaries who received mental health services faced a higher co-pay and were initially required to pay up to 50% of the approved amount for health services, whereas they only paid 20 % for most other outpatient medical services. Congress and many advocacy organizations found this practice to be discriminatory.

To address this disparity, in July, 2008, Congress enacted the “Medicare Improvements For Patients and Providers Act” (“Act”). Under the Act, Congress charged the Centers for Medicare and Medicaid Services (CMS) with the task of implementing a phase-out of this disparity over a five-year period from 2010 to 2014. That phase out has now fully matured. As a result, effective January 1, 2014, Medicare will pay the same 80% of the Medicare approved rate for all covered mental health services, just like it does for medical and surgical services. By the way, if you have a Medicare supplemental policy, it may cover the additional 20% just as it does for the more traditional medical services.

The following are some of the mental health services that Medicare will now cover at 80% of the Medicare approved rate:

Visits to a psychologist or other professional counselor;

Family therapy, so long as the focus of therapy is on the Medicare recipient;

Substance abuse treatment;

Occupational therapy that is part of mental health treatment;

Prescription medicine that cannot be self administered;

Art, dance and music therapy if deemed necessary to prevent hospitalization.

Medicare will pay for services only if they are provided by a mental health professional who accepts Medicare assignment, so be sure to check with your health professional before you receive services.

Medicare also covers inpatient care in a general or psychiatric hospital. However, unlike with non-mental health services, Medicare puts a cap on coverage for inpatient psychiatric care and will only pay for up to 190 days of inpatient psychiatric hospital services in a lifetime.

Note: If you have a Medicare Advantage Plan, coverage rules may be different so check with your plan before receiving services. Also, if you need help paying the 20% co-pay for these and other Medicare covered services, there are Medicare programs that may help.

For more information on covered mental health services, visit www.Medicare.gov and download Medicare’s new guide entitled “Medicare And Your Mental Health Benefits“, or call 1-800-633-4227 and ask for a copy. For help with paying the Medicare co-pays, visit www.Medicare.gov and select “Get Help Paying Costs” under “Your Medicare Costs”, or call the 800 number just given.