Coronavirus (COVID-19) Q&A’s from LIHBA

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Q. What happens to the Stimulus check of my loved one if they pass away prior to the check being received?

If you are married?
If the check was for your parent?
If the check was for your child?

A. The stimulus payment was issued based on an individual’s 2018 or 2019 Income Tax Returns. This has resulted in payment to individuals who passed away after the return(s) were filed. It was initially thought that the government planned to allow heirs and spouses to keep the check. There have been no specific guidelines issued and the CARES Act, (Coronavirus Aid, Relief, and Economic Stimulus), does not have a “clawback ” provision, which would give the IRS the power to take back the money. Therefore, for now it is unknown how this will be handled, we are awaiting guidance from the government. Although, the Treasury Secretary of State, Steven Mnuchin, has made statements indicating that he would want the relatives and estate to return the money.

It should be noted that, the Cares Act specifically excludes Estates and Trusts from the stimulus payments.

Q. My dad passed away due to COVID 19, my mom needs to access money from his account to pay for the burial but she is not a signer on his bank account. Is there a special law to address this due to COVID 19, if, not, what can she do?

A. Unfortunately, there is not a special COVID 19 law, and the bank will not release the money to her unless she is the beneficiary of the account or it is in trust for her. She will have to commence an Estate Proceeding in the Surrogates’ Court of the county where he resided.

Q. What is a Heath Care Proxy and do I need one?

A. This form allows the person you choose to make all health care decisions for you including the decision to remove or provide life-sustaining treatment unless you say otherwise in this form. “Health care” means any treatment, service, or procedure to diagnose or treat your physical or mental condition. The person you appoint must be 18 years old or older and can be a family member or a friend. This individual will make medical decisions for you when you are unable to make any decisions.

If you have not executed a Health Care Proxy then the New York’s Family Health Care Decisions Act (FHCDA)(Chapter 8 of the Laws of 2010, adding Public Health Law Ch. 29-CC and 29-CCC) comes into effect and it allows a patient’s family member or close friend to make health care decisions for a patient who is in a hospital or nursing home This is important you can only make the decisions if the individual is in a hospital or nursing home.

Under the Act, the individual has to be determined to lack capacity to make health care decisions, under procedures specified in the statute, then a “surrogate” is chosen to make all health care decisions, in the following order of priority: Legal guardian appointed under Article 81 of the Mental Hygiene Law; Spouse or domestic partner as defined in the Act; Adult child; Parent; Brother or sister; Close friend, age 18 or over, or a relative other than those listed above as defined in the Act. If no one in the above is available to do so, then the Act has a specific procedure to follow.

Everyone should have a Health Care Proxy so you have control who will make all medical decisions for you if you are unable to.

Q. What is a Power of Attorney and should I have one?

A. A Health Care Proxy deals with your medical needs. A Power of Attorney deals with your financial needs. By executing a Power of Attorney (POA), you (Principle) appoint an Agent who will have the power to handle your finances. You will be able to specifically state what powers you wish to grant to the Agent. For example, the power over bank accounts, stocks, bonds, and/or real estate.

It should be noted that a POA limits gifting ability by the agent. A principle can execute a Statutory Gifts Rider, which grants your Agent the power to make gifts of your property. These gifts are supposed to be in the principle’s best interest. A power of attorney is an extremely powerful document that should very well be thought out and discussed with your attorney.

Q. What is a MOLST?

A. It is a Medical Order for Life-Sustaining Treatment. This form will document an individual’s preference concerning life-sustaining treatment.

MOLST is for patients with serious health conditions who: Want to avoid or receive any or all life-sustaining treatment; Reside in a long-term care facility or require long-term care services; and/or Might die within the next year.

Q. Do I need a Last Will and Testament?

A. Absolutely! By executing a Last Will and Testament you designate the person or persons you want to inherit your assets, bank accounts, real property, etc. You also designate the person you want to be in charge of, the executor.

If you do not have a Last Will and Testament, then your assets will be divided in accordance with the Estates Powers and Trusts Law. For example, if a decedent is survived by a spouse and issue (children), then the spouse receives the first fifty thousand dollars and one-half of the residue to the spouse, and the balance thereof to the children, by representation. This is in stark contrast to many of the Last Will and Testaments we draft based on our client’s desires.

Q. What if I have a disabled child and I do not want to leave that child his/her inheritance so that he does not lose his Medicaid or Supplemental Security Income. Should I leave them or of my estate plan and anticipate their siblings will take care of them?

A. This is a question we get a lot and the answer is generally, no. Through various estate planning mechanisms, we carefully craft an estate plan that will provide for a disabled child and not impair their ability to obtain government benefits.

Q. Do I qualify for the Economic Impact Payment of $1,200.00 if I receive Veterans benefits, Supplemental Security Income or Social Security Retirement, Disability or Survivors Benefits?

A. YES. If you did not file an Income Tax Return for the years 2018 and 2019 you will still receive the sum of $1,200.00. If you have a child under 17 years old, you may have to provide information to the IRS in order to receive the sum of $500.00. You still have to meet the financial requirements of the Act.

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Clients first entrusted us to help them with their estate planning and elder law issues over 30 years ago. Since then, we have expanded our practice to include real estate, but our focus continues to be on assisting clients with some of the biggest issues they will face in their lives.

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