Estate Planning Bits

Second parent adoptions in Massachusetts - allowing gay and lesbian couples to adopt the non-biological children of their relationship.

Second parent adoptions or “co-parent” adoptions have been allowed in the Commonwealth of Massachusetts since 1993. A second parent adoption, or often referred to as a “co-parent” adoption, allows the non-biological parent of a couple’s children to now enjoy the same legal rights and responsibilities of the biological parent. The second parent adoption gives the ability of unmarried couples to jointly petition for the adoption of children of the relationship, and is most common among gay and lesbian couples, this allows the biological and non-biological parent to be granted equal legal status, as it relates to the child or children.

In a traditional adoption, the biological parents must agree to terminate their parental rights in order for the adoption to go forward. That is not the case in a second parent adoption where the parties petition jointly for the adoption of the children.
In 1993, the Supreme Judicial Court of Massachusetts ruled that there is nothing in the Massachusetts Adoption Law that would prevent a non-biological parent from co-adopting his or her partner’s child. That the ruling was made by the highest court in the Commonwealth, and the decision is binding in all counties. Although you may notice some difference in the process from county-to-county or Judge-to-Judge, in general, couples can expect to follow the same substantive procedure.

The adoption process begins with the filing of an adoption petition and supporting paperwork. It is strongly advised that the couple use an attorney to assist them with this adoption process in these cases, as once the adoption petition and the supporting paperwork are filed, a criminal background check on all the adults in the household is required and completed. Additionally, the Court may require an in-home study, wherein the home is evaluated by a social worker to determine the suitability of your family for “the proper rearing of children.” This is conducted by the Department of Children and Families (DCF) formally known as the Department of Social Services (DSS.)

This may seem intrusive, but it is usually required to complete the process. ,Although, there are private agencies that are authorized by the Department of Children and Families to conduct the home studies and may be able to be retained by private payment to complete the home study, it still requires opening your home to inspection. It should be noted that as you may guess, there is often a substantial waiting time before DCF can get into the home.

The parties may seek a waiver of the home study, however, a waiver of the home study is not taken lightly by the Court. You and your partner can obtain information, letters of support, and affidavits attesting to the fact that you and your partner function as a family and will make good parents, but this alone may not be enough to waive the home study. It may seem counterintuitive that a biological parent who joins in the adoption process with the non-biological parent would have to go through a home study. However, the Courts normally follow the adoption process in a traditional fashion.

Your attorney can advise you as to whether or not the procedures or requirements instituted by the Court in the county where you and your family reside could be or should be waived. However, the Courts will grant the waivers within their own discretion and some may not follow the same rationale as others.

Once the petition is filed, the home study is satisfactorily completed, the CORI is returned and all background checks are also satisfactorily completed, the adoption unit in the Court will likely schedule a private hearing before the Court either in the Judge’s chambers or in a closed Court room in order to finalize the adoption.

The finalization of the adoption is generally a happy event where family and friends are invited to take pictures and celebrate the adoption of the child.

A second parent adoption is important because it grants the non-biological parent full legal rights regarding his or her child or children in a same sex relationship. It puts them at the same legal status as the biological parent. The adoption in and of itself does not change the legal relationship between the two parents, but it does give recognition and protection to both parents in the relationship to the children, especially in the event of a dissolution of the relationship, as the child would now be considered the legal child of both the biological and non-biological parent. Additionally, the child is now entitled to the benefits of the non-biological parent, such as health insurance, life insurance, and other lifetime benefits. The child, by law, may inherit upon the death of the non-biological parent as a result of the adoption, and in the absence of proper estate planning on the part of the parent, would inherit under the laws of intestate succession.

In regard to the parental rights of the parties, in the event of dissolution of the relationship, both parties would be entitled to custody and/or visitation with a minor child on its face. Each would be able to seek legal and physical custody as well as an appropriate parenting plan to allow time with the child or children.

If the child that is adopted is not biologically related to either party to the relationship, once the child is adopted by one of you, you still may petition for a second parent adoption. The process is essentially the same. Be wary, however, that many international adoptions do not allow married same-sex couples to adopt a child or for unmarried couples to jointly adopt a child abroad. If the goal is for the parties to complete an international adoption, it may be that one of you would have to adopt the child in the foreign county and then jointly adopt through a second parent adoption here in the United States.

by: Julie A. Dialessi-Lafley, Esq

Why do I need to file a gift tax return?

A federal gift tax return (Form 709) needs to be filed when you make a taxable gift. A taxable gift is one in which excess of the annual exclusion which in 2009 is $13,000 per donee per year is made. Therefore, until you gift $13,000 in total cash or other assets in any calendar year, a gift tax return is not required to be filed in most situations.

Keep in mind that if a gift of $13,000 is made to one person from another, there is no requirement to file the return. However, if in addition to this $13,000 gift, there is also a birthday present, anniversary present, or other gift, such as paying off a child’s credit card, then this is construed to be a gift, and therefore a gift tax return is required. However, until you give more than $1,000,000 in total gifts, above and beyond the annual exclusion gifts of $13,000, there is no gift tax due, although the return is required to be filed.

The IRS maintains the information in their files, and this is collated with your estate tax return when you die to determine the amount of gifts given during your lifetime, which may utilize some of your total estate tax credit, which is currently $3,500,000. A husband and wife may gift $26,000 to their child on an annual basis, and they are required to file a gift tax return, but they may split the gift as opposed to filing separate gift tax returns, thus requiring only one such form to be filed.

Again, the purpose of the requirement to file the return is to allow the IRS to have the information as to the amounts gifted during one’s lifetime, as these are offset at death. In the event that the total gift during your lifetime is a maximum of $1,000,000, and you die in 2009 with no more than $2,500,000, there will not be any federal estate tax due, as the total exemption of $3,500,000 captures your total assets.

It is also helpful to file a gift tax return in some cases, even when the threshold of $13,000 is not met. This is so that in the event that you need to file for Medicaid assistance, there is a paper trail of the amount of gifts made and the dates those gifts were made within the five year look-back period for Medicaid eligibility. Often times, the state department maintaining control over the Medicaid application process will consider a transfer from a parent to a child as a gift, but in other cases, the authorities may consider the transfer to be a trust or other similar type of technique. Therefore, if the transfer is not considered a gift, then the asset transferred will be construed to be property of the incapacitated parent, and thus, the asset will not be protected for Medicaid eligibility, regardless of the time-frame. When a gift tax return is filed, it is prima facie evidence that the transfer was made as a completed irrevocable gift, and therefore, the Medicaid authority may not reclassify the transfer as a non-gift.

Medication and the elderly - preventing dangerous mistakes

Medication errors are widespread among the elderly community. Many elders take on average of six (6) to eight (8) different prescriptions as well as over the counter medication. Oftentimes the elderly will not return to their primary doctor to have their dosage evaluated and modified when things change, opting instead to take the advice of loved ones. This is very dangerous.

The following procedures may facilitate the elderly in monitoring their medication:

• Make a list of all prescription medication and all supplements being taken.
• Provide this list to the doctor and pharmacist and have one on hand for emergencies. 
• Utilize the same Pharmacy to fill all prescriptions. Pharmacies keep a record of your prescribed drugs, and they will verify your doctor's instructions. Pharmacies will also inform you if certain foods or over the counter supplements will negatively interact with a prescription. 
• Dispense pills in a daily pill organizer box. 
• Have a family member or other adult be responsible to call or physically monitor the taking of medication

By: Todd C. Ratner, Esq.

10 common estate planning pitfalls

1. Not having a Will: Personal wishes, whether written or oral, will most likely not be followed in the absence of a will. Without a plan, your assets will pass to your heirs according to your state’s laws of intestacy.


2. Not funding your revocable living trust: A property drafted trust will prevent putting your loved ones through the expensive, lengthy and emotionally draining court probate process. 


3. Failing to understand the impact of life insurance proceeds: Many people do not realize that life insurance proceeds are normally included in the estate of the deceased, which can result in approximately 50% of the proceeds going to the IRS instead of your intended beneficiaries. Depending upon the situation, an Irrevocable Life Insurance Trust may be appropriate.


4. Failing to adequately plan for children with special needs: A child with special needs risks being disqualified from receiving SSI benefits and may have to use their inheritance to pay for their care. Depending upon the situation, a Special Needs Trust may be appropriate.


5. Not properly planning for incapacity: People are living longer, and therefore the risk of lacking capacity during your lifetime is increasing. Only with proper estate planning can you be sure that your health and financial affairs will be taken care of in the event of your inability to take care of them yourself.


6. Business planning: With a properly executed plan, you can choose who will own and control your business upon your death, which increases the likelihood of the business continuing as a viable operation.


7. Not preparing for minor children: If you have minor children, you should have a will nominating personal guardians for the children, in the event that both you and your spouse should die prior the children reaching the age of 18. Without a plan, the court will decide without your input where the kids will live and who will make important decisions about their money, education and life.


8. Improper beneficiary designations: Not updating the beneficiary designations on bank accounts, life insurance, IRAs and other assets can lead to unintended beneficiaries.


9. Not periodically updating an estate plan: Generally, people do not like to discuss dying, and therefore people often want to simply execute their estate plan documents and be done with it. However, economic, family, and health changes require revisions to your estate plan.


10. Doing it yourself: Even if a self-prepared will or trust is legally enforceable, estate planning is a complex legal process requiring knowledge in several areas of the law, including estate law, tax law and property law as starters.

by: Todd C. Ratner, Esq.

Cobra benefits update

If you work for a company that has 20 employees or more, then you have basic Federal rights that cover you if you lose your employment with them. Also, in some states, there are expansive programs that extend certain COBRA rights to workers even if the company has fewer than 20 employees.

Normally, you are covered when there is a “triggering” or qualifying event. This could be if you are voluntarily or involuntarily laid off or terminated, unless you are terminated for gross misconduct. If your hours are reduced below the plan eligibility requirements, you may also have certain rights. In the event that you should pass away, or by age or disability qualify for Medicare, you may also have rights which continue. Other situations are if your dependent is no longer eligible because of age or non-student status or if your spouse is no longer eligible because of a divorce or legal separation.

Each plan should be reviewed individually upon a separation or a triggering event to determine what rights you have, as very often an election has to be made within certain time limitations, and it could be lost if not elected timely. Even if an election is made upon termination to continue the coverage, you should review the cost of coverage, as it will usually be significantly more than when you were employed.

Similarly, benefits such as life insurance should be reviewed because they normally become quite expensive upon termination, but if life expectancy is an issue, you should  consider the cost versus potential death benefit.

The cost of COBRA “non-compliance” is quite high, and therefore, employees should be certain that they verify the rules when notified properly by their employers.

by: Hyman G. Darling, Esq.

Organ donations decrease, highlighting urgent need.

The number of deceased organ donors in the United States actually decreased in 2008. So did the number of live organ donors. According to published reports, this is the first time that donations are down since organ donor tracking began approximately twenty years ago.

Therefore, the number of transplants in the United States also decreased in 2008. At the same time, the number of people waiting for transplants increased as did the number of people on waiting lists for transplants. It was reported that the transplant waiting list reached 100,000 in 2008, and approximately 50,000 people will be expected to be added to the list in 2009.

However, there is some good news in that the reported deaths on the transplant waiting list decreased after reaching a high of almost 7,000 in 2004. The data reported 6,229 deaths in 2008.

With fewer donors, few transplants, and more people waiting for the transplants, can it really be that fewer people are dying? As it turns out, the answer is no. The statistic only measures people who were removed from the waiting list because they died. There is another important category: people who were removed from the waiting list before they died. The people were removed because while they were waiting, they became too sick to undergo transplant surgery. This number has been going up, but it appears that the numbers to be reported for all categories may be skewed since it is difficult to track this important statistic.

If you wish to become an organ donor, you should be sure to include that specific language within your Health Proxy, Living Will or Advanced Medical Directive. Most states also have passed the Uniform Anatomical Gift Act, which allows a person to have their preference of being an organ donor placed on their driver’s license.

Information courtesy of Dave Undis, LifeSharers, May, 2009

Shared by: Hyman G. Darling, Esq.

New and improved veterans benefits

The benefit of aid and attendance is often misunderstood and under-utilized. Many individuals feel that in order to obtain this benefit, they must actually have been in combat. The veterans benefit requires only that the military person served at least one day of ninety days of active duty during a period of war. There is no specific requirement that the person had to have been in direct combat.

However, a person who is in the National Guard, military reservist, or was in active duty training for active military may not qualify for this benefit.

A person who is obtaining military retirement pay may not receive compensation as well. Retirement pay is reduced by the amount of compensation that person may be receiving. A veteran or the qualifying spouse, who may be residing in a nursing facility, may not receive a full payment of the pension if the person is eligible for Medicaid.

In those situations, the benefit is reduced to ninety dollars a month. But in many states, this amount may be retained by the Medicaid recipient in addition to the allowance for a personal needs allowance for that particular state. In order to obtain this benefit, if the veteran is younger than sixty-five years old, he or she must be totally disabled, and the burden to prove disability lies with the applicant. If the person is receiving Social Security Disability, that is evidence of disability for Veterans Administration purposes. Please note that a single surviving spouse does not need to be disabled, regardless of age.

There are many issues regarding aid and attendance that need to be reviewed, including the income test, the asset test, and ratings; and in some cases, the non-veteran spouse of a healthy veteran may be entitled to benefits.

Very often, it is more appropriate to have the person at home obtain these benefits so that they may stay at home, and together with other income, such as some form of long-term care insurance, or their own assets, which may include funds received from a reverse mortgage, they will be able to stay at home rather than becoming institutionalized.

By: Hyman G. Darling, Esq.

Estate Planning is a process

Many clients do their planning at year end, which is not necessarily the best timing. Planning should carry through the entire year. Now that tax day has passed, it’s as good a time as any to review and update your estate plan. Like your annual physical, it is wise to also have a legal checkup. The following are a few areas that should be considered, although they may not all be appropriate for everybody:

Update Your Estate Plan

Are your Health Care Proxy, Power of Attorney and Will up to date? Are the individuals named within the documents still appropriate to serve as well as receive your assets? Are they healthy? Are their marriages also healthy? If not, perhaps your documents need to be reviewed to provide for preservation of assets for the beneficiaries so they don’t become their liabilities.

Plan For Retirement

Is it time for you to consider when you should collect Social Security? Have economic changes made it necessary for you to work longer but possibly still take Social Security benefits sooner? Is your health insurance in order, or do you need to purchase some other plan, such as a Medigap policy, to ensure you have the coverage you need until you’re able to obtain Medicare benefits? Naturally, if you are in your 20s through 40s, these issues seem way too remote to consider, but other issues should be considered such as saving for retirement and to attending to a child’s education expenses. In fact, if you are relatively young, perhaps you are worried about paying off your own college expenses.

Consider Long-Term Care Insurance

Most seniors are concerned about having their assets spent on long-term care expenses in the event they need institutionalized care or require 24/7 home care. A long-term care policy can help if you’re qualified to obtain the coverage and can afford it. If you can’t afford it, an elder law attorney can present alternatives, like using a reverse mortgage or having children share the cost, etc. It is an option that should not be overlooked, but it must be reviewed to determine whether it is an option for the client or not.

As with all life plans, just because documents are signed, does not mean the plan is good forever. It should be reviewed and revised as laws, finances, and family dynamics change.

by: Hyman G. Darling, Esq.

Caregiver education and health care authorization

On January 14, 2009 the Governor signed into law “An Act Relative to Caregiver Education and Health Care Authorization.” The law went into effect on April 14, 2009. This law creates a statutory mechanism for a parent or parents to authorize another adult to exercise concurrent parental rights and responsibilities relative to a minor’s education and health care. Therefore, if you are a caregiver, a parent may give you permission to make medical and educational decisions for the child. A caregiver is defined as a person who lives with a child but who is not a parent.

By executing a duly prepared Caregiver Authorization Affidavit, a parent can convey the authority to make education and health care decisions regarding a minor in the absence of the parent or on behalf of the parent. Once the Affidavit is signed by the parent, witnessed and notarized, it is effective, however, there is very specific language that is statutorily required and must be included in the documents. The form is not filed with a Court, but a copy of this form should be delivered to the child’s school, doctor, and dentist.

You are advised to keep a list of everyone who received the form, in the event you must notify someone about the changes. Naturally, the original should be maintained in a safe place with your other estate planning documents.

Parents should feel comfortable executing this Affidavit, and they can revoke it at any time and in the event that they disagree with the caregiver. The parent’s decision shall remain final. The use of the Caregiver Authorization Affidavit may provide some families with an alternative to filing for Guardianship of a Minor. The Affidavit is valid for two years and will need to be executed again at its expiration.

by: Julie A. Dialessi-Lafley

Health and medical records with the Obama stimulus plan

In 2004, President George W. Bush established the goal of creating electronic health records for most Americans within ten years. Today, funding provided in the Obama Stimulus plan could make it happen. Specifically, as much as $21 billion dollars has been earmarked in the bill.

As part of the stimulus plan, $21 billion dollars will be used to accelerate the use of electronic health records. As planned, all of our health records would be linked together for easy access by all the patient’s health care providers. The new system will likely improve the quality of care and reduce the costs of cumbersome paper records by allowing every person’s doctor to have access to the patient’s complete health care file.

However, having electronic medical records at your fingertips, which can easily be transferred to a hospital or other provider, it is not without critics. There is a major potential for abuse because critics fear that in spite of privacy laws in force to protect the public, employers might inappropriately obtain the medical records of a job applicant and determine that the applicant is too expensive to insure. Moreover, critics also provide that too many administrative burdens would impede the use of electronic records and interfere with the coordination of care.

Prior to the recent stimulus plan, complying with the 2014 goal has been looking like a significant challenge. The percentage of United States doctor offices currently adopting electronic records systems is estimated to be in the single digits. The biggest hurdle has been providing funds to help health care providers buy and implement these IT systems, which are costly and difficult to install. The money earmarked for electronic medical records in the stimulus plan should facilitate President Bush’s 2004 goal. Let’s hope that Congress can balance the above critics’ concerns for the sake of consumers of health care services.

By: Todd C. Ratner, Esq.