Over the years, numerous clients have asked Morrissey & Morrissey certain standard questions to gain a better grasp of legal issues. We have compiled a list of some of the most frequently asked questions, along with our answers:

• What is Medicaid?
• How do I designate someone to make medical decisions for me?
• What is a power of attorney?
• Why should I do a will?
• What does an executor do?
• Does the executor get paid for their work?
• What if the executor is unable to act or dies?
• How long does it take to administer an estate?
• Can distributions from retirement plans affect Medicaid eligibilty?
• Should I confirm beneficiaries on retirement accounts & insurance policies or is it OK not to name a beneficiary on a retirement account & insurance policies?
• What are unclaimed funds?
• Collyer’s Syndrome
• What is a living trust?
• I made my Will in Arizona but I now live in New York. Will I have to write a new Will?
• What documents should I keep handy in case of an Emergency?
• Should I keep a journal for my home?
• What is a Letter of Last Instructions?

What is Medicaid?

Medicaid is a government-sponsored medical and health program. Medicaid will pay for long term care whether within your own home or in a nursing home, if you have problems with daily living activities. There are strict eligibility requirements, and the benefits are only available to those with extremely limited financial resources. In 2009, the resource limit (which includes assets of all kinds including checking, savings accounts, C.D’s and IRA’s) for individuals is $13,800 and $20,100 for couples. The monthly income level allowed is $767 for individuals and $1,117 for couples. However, those who plan properly may be able to receive Medicaid and still preserve their assets. Even those who own their own home are not necessarily disqualified from receiving benefits, with proper planning.

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How do I designate someone to make medical decisions for me?

This is done by way of a healthcare proxy. In this document, you name an individual, your proxy, to act in the event you become incapacitated and cannot make your own health care decisions. You may also name a successor proxy, in the event your first choice of proxy is unavailable or unwilling to act. In New York, the document must be signed by you in the presence of two witnesses, neither of whom may be named as proxy or successor proxy in the document.

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What is a power of attorney?

A power of attorney is a document in which you designate another person or persons to act on your behalf. The Power of Attorney may be limited to only one or two matters or may cover all possible decisions that you would otherwise make for yourself, except for those relating to health care.

The agent should be someone you trust. If the power of attorney is durable, it has immediate effect and lasts until you terminate it. If it is “springing,” it only takes effect at some later date or upon some occurrence specified in the document, such as incapacity.

A power of attorney is a very important document. Without it, your family or friends cannot, for example, communicate with Social Security or your bank on your behalf. Without a power of attorney, in some circumstances, a guardianship proceeding is required so that a representative may act on behalf of an incapacitated person.

In New York, a power of attorney must be signed by the maker before a notary public.

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Why should I do a will?

A will lets you direct how you want your probate assets to be distributed at your death. Probate assets are property in your name alone, such as a house, car or bank account without a beneficiary. (IRA’s, pension plans and insurance policies with named beneficiaries pass “by operation of law” to the beneficiary and are not probate assets.) In your will, you also name the person responsible for administering your estate, or “the executor.” If you have children, a very important part of your will is to name a guardian of your children, in case of the death of both you and your spouse. Without a will, your probate assets pass according to state statute, and the court will determine who is to act as executor of the will and guardian of minor children.

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What does an executor do?

The executor has many responsibilities. He or she files the decedent’s will for probate, collects all of the assets in the estate, liquidates non-liquid assets as appropriate, files tax returns, pays debts and taxes, and distributes assets as set forth in the will. The executor must also prepare an informal or formal accounting of the administration of the estate. The beneficiaries will then be asked to release the executor from any further fiduciary responsibilities.

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Does the executor get paid for their work?

Unless the will provides otherwise, the executor is entitled to be paid a fee, called a commission. The fee is fixed by statute and depends on the gross amount of the estate being probated.

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What if the executor is unable to act or dies?

If the will does not name a successor executor, the last remaining executor may nominate a successor executor. In case that does not happen, someone else, usually a beneficiary, may petition the Surrogate’s Court to be appointed as the personal representative of the estate.

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How long does it take to administer an estate?

There are many factors that determine this. Estate administration may be straightforward or very complex. In a small estate with a simple will and few assets and beneficiaries, the probate process (receiving approval of the will by the Surrogate) may take only a few weeks. Thereafter, is it usually a fairly simple process to liquidate assets and pay beneficiaries. Sometimes, however, questions are raised about the validity of the will. In these cases, there may be complaints by beneficiaries or those not named in the will, and if objections are filed in court, the probate process may be delayed as a result. Administration of the estate, collecting assets and distributing them, for example, may be delayed by any number of issues. As one issue, New York State gives creditors (people to whom the deceased owed money) seven months from the time the executor is appointed to file any claims against the estate. Also, where an estate has many complicated assets and beneficiaries, it may take months, even years, to sell the assets and make distributions.

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Can distributions from retirement plans affect Medicaid eligibility?

When you get ready to take a Minimum Required Distribution (MRD) or other distribution from your retirement account, you should first speak with an elder law attorney. Distributions from retirement plans are scrutinized by Social Services in determining Medicaid eligibility.

As one example, a retirement account is considered a “countable resource” to the Medicaid applicant; however, if you elect to receive “periodic payments” from the account, the account is not considered a countable resource. The size of the periodic payment and its connection to your life expectancy are also significant factors to consider.

Recent amendments to the Medicaid Resource Codicil indicate that a non-uniform or inconsistent basis is considered a conversion of the retirement account, making the account a countable resource.

It is important to structure retirement account distributions with an eye toward qualifying for Medicaid in the future.

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Should I confirm beneficiaries on retirement accounts & insurance policies or is it OK not to name a beneficiary on a retirement account & insurance policies?

If you have not done so in recent memory, you should confirm the beneficiaries on your retirement accounts and insurance policies. This is not only because you may want to change them.

For purposes of Medicaid, New York State limits post-death recovery to probate assets. Retirement accounts and insurance policies with named beneficiaries (other than your estate) are non-probate assets. If you do not have a named beneficiary, these assets will pass to your estate and must be probated to be distributed under a will or by statute in the absence of a will. It is a very good idea to name a secondary beneficiary in the event the primary beneficiary predeceases you.

Also, without a designated beneficiary (an individual or a “pass through” trust – naming an individual as a beneficiary), if the account owner dies before the required beginning date of distributions, the entire balance of the retirement account must be paid out within 5 years of the end of the calendar year in which the owner died or April 1st of calendar year after the owner reaches age 70 ½ whichever is sooner.

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What are unclaimed funds?

Unclaimed funds are any financial asset for which an owner has not generated activity for an extended period of time or those for which the holder of the funds can’t locate the owner. These may include:

• Savings, Checking, Certificate of deposit accounts;
• Safe deposit box contents;
• Payroll (wages, bonuses, commissions);
• Stocks, Mutual funds, Bonds & Dividends;
• Insurance polices, CD’s, Trust funds;
• Credit balances;
• Customer deposits;
• Traveler’s checks;
• Utility deposits, escrow accounts;
• Money orders and other intangible interests or benefits.

The inactivity time frame varies depending on the property but in most cases, it is 2 to 5 years.

One exception is payroll checks, which are only held for one year.

The funds are then turned over to the State (Division of Unclaimed Funds), which are custodians of the funds until they are returned to the rightful owner.

All states have Unclaimed Property Laws and dormancy periods vary from State to State.

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Collyer’s Syndrome

Collyer’s Syndrome (Compulsive Hoarding Syndrome, Disposophobia) is a condition that affects individuals causing them to hoard rubbish and collect items that have no value to others. These items are seen as priceless and irreplaceable treasures. The common compulsive hoarder’s justification is, “I’ll need them later”. The individual sees nothing wrong with his or her behavior and will exhibit a very strong reaction to anyone suggesting that the items be thrown away.

It is much more than mere messiness. It is clutter that affects health and safety. In the opinion of Judge Anthony J. Cutrona in The Matter of Murray F. and Marilyn F, evidence was presented to the New York court that Murray F. suffered from Collyer’s Syndrome, in other words, he is a hoarder. The Judge noted in his opinion, “Their apartment was stacked floor-to-ceiling with magazines, newspapers, garbage, old mail, etc. There was severe insect infestation. Moreover, there were two dogs living in the apartment that were matted, covered in feces and appear to be in ill health. The dogs were allowed to defecate and urinate in the house. In sum, the apartment was an unsanitary, unhealthy, disgusting mess.”

In other cases there results an inability to move about in the apartment due to the dangerous clutter of furnishings, boxes and debris. Overpowering odors, insect and vermin infestation and animals in semi-starvation condition are all characteristics of the living environment of someone with Collyer’s Syndrome.

Signs and symptoms of Collyers may include:

• Inability to discard items
• Acquiring unneeded or seemingly useless items
• Keeping stacks of newspapers, magazines or junk mail
• Saving trash or used food containers
• Cluttered living spaces
• Trouble making decisions
• Perfectionism
• Difficulty organizing items
• Forming attachments to possessions rather than people
• Restricting others from touching or borrowing possessions.

Hoarding can affect anyone, regardless of age, sex or economic status.

• Age. Hoarding often starts in early adolescence, around age 11 or 12, and it tends to get worse with age.
• History. People are more likely to hoard if they have close family members who also compulsively.
• Stress. Some people develop hoarding after experiencing a stressful life event that they had difficulty coping with, such as the death of a loved one, marriage breakup, eviction or losing possessions in a fire.
• Isolation. People who hoard are typically socially withdrawn and isolated. In many cases, the hoarding leads to social isolation. But some people may turn to the comfort of hoarding because they’re lonely.
• Perfectionism. People with compulsive hoarding are often perfectionists. They worry about making the right decision about what to do with each possession — should they keep it or discard it? Trying to decide causes distress, so they avoid making a decision and simply keep everything.
• Attachment. People who hoard often form emotional bonds to their possessions. That makes it hard to get rid of unneeded items.

There is no clear cause of what triggers hoarding compulsions and desires. Collyers is currently considered a subtype of Obsessive-Compulsive Disorder (OCD), and it’s sometimes called Obsessive Compulsive Hoarding (OCH). Like OCD, it may be related, at least in part, to genetics and upbringing.

A final caveat to those who have not had direct contact with the problem; hoarding behavior may seem to be somewhat acceptable, romantic, or no more serious than an eccentric, amusingly odd habit. However, when the safety and welfare of others is considered, particularly those living in close proximity, the scrutiny changes because the behavior can have a profound negative impact as a question of public health, animal cruelty or fire hazard.

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What is a living trust?

A Living Trust or Revocable Trust is a legal document that can be used in place of a Will. Once created assets are transferred into the Trust (home, bank account, stocks and bonds, for example), which are then administered for your benefit during your lifetime, and then transferred to your beneficiaries on your death.

Many people initially name themselves as the trustee in charge of managing their trust’s assets. That way, even though your assets are put in a trust, you remain in control of your assets during your lifetime. A living trust is revocable; that way it can be amended or revoked by the person who created it.

You can also name a co-trustee to act with you or a successor trustee, someone who will manage the trust should you no longer wish or become unable to do so.

Points to Consider when deciding between a Will and a Living Trust:

• A Will is subject to probate (Court Supervision) proceedings – a Living Trust is not.
• Since a Will is subject to probate, court supervision is available for handling beneficiary challenges and creditor disputes. With a Trust there is no automatic court supervision to deal with any such disputes.
• A Trust avoids the cost of a second state probate proceeding where there is out-of-state property. A will requires probate proceedings in that state as well.
• When you die, your Will becomes public record. With a Trust, the details remain private.
• It may cost more to prepare, fund and manage a Trust than a Will, though the cost to probate a Will can be substantial.
• Same Tax saving provisions are available for either a Will or a Living Trust. Administering a Living Trust is usually easier and more informal upon death than the probate of a Will.

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I made my Will in Arizona but I now live in New York. Will I have to write a new Will?

If your will is signed by you and is legally valid in the state of Arizona (or any other state) and you now intend to reside in New York then your will is also valid in the State of New York.

A will disposing of personal property, wherever situated, or real-property situated in this state, made within or without this state by a resident or non-resident of this state, is formally valid and admissible to the judicial certification of the validity of the will in this state, if it is a legally valid will and signed by you, and otherwise executed and certified in writing in accordance with the local law of: this state; the jurisdiction in which the will was executed, at the time of execution; or  the jurisdiction in which the person who made the legally valid will (you) was residing, either at the time of execution or of death.

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What documents should I keep handy in case of an Emergency?

In case of emergency, natural or otherwise there are a number of documents you should have stored in a secure location in a durable case that you can quickly ‘Grab-and-Go’ when the worst happens. Preparing for the worse makes dealing with the aftermath that bit less stressful.

What you need to take with you:

• Copies of Will or Trust Documents
• Power of Attorney
• Insurance Policies
• Recent Tax Returns
• Birth/Marriage Certificates
• Social Security Cards
• Passports/Driver’s License/ Government ID
• Cash
• Safe deposit Keys / Combination
• Checking/Saving account numbers
• Your email and cell phone contacts.

It is important to have a safe deposit box (located at financial institutions) to protect your important documents. It is recommended that these original documents should be housed in your safe deposit box:

• Inventory and proof of home contents (photos)
• Copies of Powers of Attorney
• List of Insurance policies
• List of financial account numbers
• Family, birth, marriage, divorce, death certificates
• Adoption papers
• Military Service records
• Loan agreements
• Certificates of deposits
• Real estate deeds
• Vehicle titles
• Mortgage paperwork
• Stocks and Bonds Certificates
• Jewelry/Precious metals
• Employment contracts/Business agreements.

Make sure that a trusted family member or friend has a duplicate key to your safe deposit box and is authorized by the bank to access the box.

We do not recommend putting your will and/or trust documents in the safe deposit box, as it may be too difficult or time-consuming to access the box after your death.

Scanning and storing copies of your valuable documents to your email account is also a good idea. These documents can then be accessed by you anywhere you have a Mobile or Internet connection. You should always retain your original copies, files and documents, as an electronic document does not always meet legal requirements (unlike signed originals), especially in the case of wills, deeds, trusts, stock certificates, passports, and powers of attorney.

It is recommended that a Trusted Neighbor/ Out of State/ Friend/Relative/Advisor should have the following details about you:

Your emergency contact information (including email and cell phone)

Contact list for heirs and advisors should something happen to you.

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Should I keep a journal for my home?

Maintaining a detailed journal to include names of reliable contractors, repair dates, service contracts and warranties along with useful neighborhood contacts and information really helps the hand-over of the home from the seller to the buyer.

Real Estate Agents often encourage sellers to give buyers relevant house information at the time of the sale.

Many buyers want to get a sense and feel of the house. Having a plat that shows the placement of what’s on the lot, orientation of the house, photos showing shrubs and trees in bloom. Pictures showing the house thru the season and at different times of the day all help to make the buyer feel more at one with the house than the odd prospective visit allows.

What’s more, agents believe that the ‘house journal’ give the seller the edge because potential buyer’s questions can be answered with supporting documentation.

What are examples of the type of documentation to be included in the journal?

• Names and phone numbers of repair workers, landscapers, painters and insurance contacts.
• Color names and makers of your paints and wallpapers.
• Appliance and product model numbers, sales and servicing information with warranties.
• Measurements of rooms, counters and windows, plus a plat.
• Remodeling-project details.
• A drawing of the location and names of bulbs and perennials in the yard.
• Convenience telephone numbers, such as for lawn service and pizza delivery.
• For your personal use, keep track of all repairs made to the house, including paid bills. These will increase your basis to the house, thus reducing your capital gains tax upon sale.

Good documentation can contribute toward a lower homeowner insurance bill and it can help an insurer assess reconstruction costs when disaster strikes. Point to note, such photos, plans etc. should be stored away from the home, on-line for example or in a safe deposit box.

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What is a Letter of Last Instructions?

A Letter of Last Instructions is not a will. It is an informal document listing important information and requests to be carried out after your death, the purpose of which is to relieve a survivor of any needless worry in order to handle your personal matters after your death.

The letter to be opened at the time of your death should include the following:

1. Names, addresses and telephone numbers of those to be notified on your death. (Be sure to keep the list up-to-date).
2. Specific instructions for the disposal of your remains, funeral, burial or cremation, if any pre-arrangements have been made give details.
3. Put together information the funeral director will need such as:
   • Your full name
   • Address
   • Marital status
   • Spouse’s name
   • Date of birth
   • Birthplace
   • Father’s & mother’s names and birthplaces and dates of death.
   • Names of any predeceased siblings or children, their dates of birth and death.
   • Names of next of kin other than spouse
   • Length of residence in state and in United States
   • Military records/history
   • Social security number
   • Occupation
4. List the number of death certificates that will be needed, counting one for each financial institution, two for taxes and one for the court.
5. Location of your Will or Trust document.
6. Location of your safe deposit box, its key/combination and a list of its contents. Also location and number of any postal boxes.
7. Location of your essential personal papers, including:
   • Birth or baptismal certificates,
   • Marriage certificate, Divorce records
   • Papers for adopted children,
   • Naturalization or Citizenship papers
   • Social Security card and records (for possible benefits.)
   • Military Service Records (for possible benefits.)
8. Location of life, health and property insurance policies.
9. Location of burial insurance and notation if prepaid.
10. Location of cemetery plot and ownership papers.
11. Location of papers for pensions or retirement plans and individual annuities.
12. Location of membership certificates in unions, lodges or fraternal organizations, which provide death or cemetery, benefits.
13. List of personal and real property you own with the location of deeds, mortgages, abstracts, etc.
14. List of your personal effects and who is to receive each. Include details such as name and address and your relationship to them. Consult with your attorney about this list.
15. Location of income tax returns and supporting records.
16. List of all bank accounts, checking & savings, their location and account numbers. Include location of statements and cancelled checks.
17. Location of all credit cards and a list of the account numbers, addresses and phone numbers of the companies.
18. Location of any trust funds, those you have set up or in which you are named, and the names of trustees and copy of trust agreement.
19. Location and list of all stocks, bonds and other securities by certificate number, issuers and cost.
20. Location of copies of income tax returns for the previous 5 years.
21. List of debtors and names of creditors with contacts, terms and collateral.
22. List of any gifts made and any information for estate taxes.
23. Names and addresses of advisors such as your attorney, you broker, your accountant.
24. Locations of receipts, warranties or any other miscellaneous papers.
25. Statement of reasons for actions taken in your will such as a disinheritance or forgiveness of a debt.

Once you have completed the letter, sign and date it, make several copies of it, give on to your personal representative, one to your attorney. Each time you update the letter, repeat this process.

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