Probating a Will

It is important to create a comprehensive estate plan, and there are certain measures that one can take to avoid probate if done correctly. Probate is the legal process whereby a last will and testament is determined to be valid and authentic by a court of law. Under New Jersey State Law, the will is admitted to probate when the executor files a “Petition for Probate” with the decedent’s will attached. Additionally, if the decedent died without a will, then an administrator would apply with the Surrogate. Probate proceedings take place in the county surrogate’s court where the decedent resided at the time of their death.

At the probate proceeding, the Surrogate can deny the probate of the will if there is doubt on its face. If there are no objections, the Surrogate then issues letters of testamentary to the executor of the will. An executor of an estate has a fiduciary duty to the estate’s beneficiaries. This means that the executor is obligated to carry out the will in accordance with its terms and must act with good faith and honesty. Therefore, the executor carries out the decedent’s wishes in accordance with the decedent’s last will and testament. This includes paying all of the administrative expenses, funeral bills, and debts, as well as settling claims. The remaining funds are then paid out to the named beneficiaries. The executor must also manage and address any issues that may arise throughout the estate’s administration.

A way to avoid probate is to create a trust to hold assets during an individual’s lifetime and then ensure those assets are distributed upon death. The passing of the assets would occur in the same way as an executor would distribute the assets when probating a will. However, probating a will means that the document is a public record that anyone can view. A trust document is a private document and its terms are not public. One of the best methods to avoid the risks associated with probate is to create a revocable trust and transfer the non-retirement assets during the course of a person’s lifetime into the trust. Retirement assets such as IRAs and 403Bs are governed by their own rules and should therefore not be transferred to a revocable trust because a person could face adverse income tax consequences. Retirement funds should pass by virtue of beneficiary designation after death. This means that retirement assets are not subject to probate so long as it designates a beneficiary.

Sometimes avoiding probate may not be an option, as one size does not fit all when it comes to estate planning. By taking all factors into consideration, an individual can create a successful estate plan that fits their needs. It is important to speak with a knowledgeable New Jersey estate planning attorney to help achieve your goals and protect your assets. The estate planning attorneys of the Law Offices of Hunziker, Jones, & Sweeney, P.A. have experience assisting New Jersey residents with all aspects of trusts and estates, including wills, estate administration and estate taxation. Our estate planning lawyers are trusted by our clients to handle each legal matter with diligence and compassion. For more information or to schedule a consultation, call our New Jersey estate planning firm at (973) 256-0456.

New Jersey Credit Shelter Trust and Estate Taxes

Over the last few years, both New Jersey and federal estate tax laws have changed. Currently, a decedent’s estate only needs to pay federal estate tax if the gross value of the estate exceeds $5,490,000. In New Jersey, estates with a value in excess of $2,000,000 have to pay the state’s estate tax. As of January 1, 2018, the New Jersey estate tax will no longer be in effect.

Married couples in New Jersey may be able to avoid estate tax if they employ a credit shelter trust. A credit shelter trust allows each spouse to draft a will to devise a portion of their estate into a trust for the surviving spouse. The amount must be equal to the amount that is able to pass free of tax. This allows the living spouse to be able to use the money in the trust for health or maintenance expenses. The surviving spouse can serve as the trustee so that they can use the assets in the trust whenever, and however, they want.

In order to shelter assets, a surviving spouse must also have prepared and filed a federal estate tax return for the decedent’s estate and made an election on the return. In New Jersey, a couple can shelter up to $4,000,000 in a credit shelter trust. Credit shelter trusts double the amount of assets that are able to pass from one spouse to the next without an estate tax. However, since the estate tax will be eliminated in New Jersey as of January 1, 2018, married couples will no longer have to use a credit shelter trust to avoid New Jersey estate tax.

In terms of Federal Estate Tax, which will remain in effect, a married couple can still utilize a credit shelter trust. A married couple can shelter nearly double the gross value of the current guideline, which is $5,490,000. In terms of New Jersey estate tax, couples will no longer need to prepare for a credit shelter trust since the state tax will no longer exist. This will help alleviate some estate planning issues.

A spouse is still able to have a trust created for the surviving spouse upon their death, or they may give their spouse the option to a fund a trust upon their death through a disclaimer trust. A disclaimer trust is only funded if the surviving spouse does not want a portion of the decedent’s trust. This type of trust does not have to be funded after the death of the first spouse. However, this depends on the size of the estate at the time of the first spouse’s death.

If you currently have a credit shelter trust as part of your will, it is important to have your will examined, given the change in the law governing the New Jersey estate tax. It is important to consult a knowledgeable professional to assist you with your needs. The attorneys at the Law Offices of Hunziker, Jones, & Sweeney, P.A. have experience assisting New Jersey residents with all aspects of trusts and estates, including wills, estate administration and estate taxation. Our estate planning lawyers are trusted by our clients to handle each legal matter with diligence and compassion. For more information or to schedule a consultation, call our New Jersey estate planning firm at (973) 256-0456.

New Jersey Foreclosure Rate Highest in the U.S.

New Jersey foreclosure lawyerDespite the fact that the national foreclosure rate reached an 11-year low last year, New Jersey had the highest rate of foreclosure in the U.S. for the second consecutive year. The continued backlog of distressed properties in the foreclosure process, high property taxes, and slow economic growth is weighing heavily on the current New Jersey housing market.

In February 2017, the national average for foreclosure activity dropped to its lowest point since November 2011, marking the 17th consecutive month of annual decreases, according to ATTOM Data Solutions. Despite the national drop in foreclosure activity, New Jersey saw a 16 percent increase during this time period. Atlantic City and Trenton were listed as two of the state’s metropolitan areas with the highest rate of foreclosure. Within two of the last three months, the Garden State experienced an increase in foreclosure starts. A foreclosure start is when a homeowner does not cure the default by paying the amount specified in the breach letter and the lender or loan servicer officially begins the foreclosure process.

ATTOM Data Solutions Vice President Daren Blomquist said that the increase in foreclosure starts may be due to the backlog in legacy distress as a result of the housing crisis and the share of bubble-era loans that are in foreclosure. In New Jersey, bubble-era loans represent 61 percent of all foreclosures. New Jersey may also be facing housing market strain from its high property taxes, which may be making it difficult to liquidate distressed properties and may hinder the state’s home price recovery, according to Rob Lyszczarz, President of RE/MAX Properties Unlimited.’s “home price recovery index” found that Camden, New Jersey, was cited as one of the top 10 metro areas with home prices that have recovered the least since the Great Recession. According to, Camden’s current home price recovery index stands at 182.94 and would need a 22.82 percent increase to reach its peak value of 224.69.

Another factor hindering the New Jersey housing market is the state’s slow economic growth. According to the U.S. Census Bureau, in 2015, median household incomes rose 5.2 percent; however, New Jersey’s household incomes only increased by 0.3 percent. Between November 2016 and November 2017, home prices rose by 7.1 percent nationally (4.7 percent when weighted for owner-occupied units, as opposed to those being acquired by real estate investors), but the Garden State only saw a 1.7 percent increase during this time period, according to CoreLogic.

The New Jersey foreclosure process can be an overwhelming and emotional experience for homeowners. It is important that homeowners who are facing foreclosure consult an experienced foreclosure defense lawyer. The New Jersey foreclosure defense lawyers of Hunziker, Jones & Sweeney, P.A. will review your case, advise you of your legal rights and provide guidance on the best course of foreclosure defense. For more information or to schedule a consultation, call our New Jersey foreclosure defense law firm at (973) 256-0456.

How Can Divorce Affect Your Credit Score?

Going through a divorce can be a stressful and challenging time. One impact of divorce that is often overlooked is the impact it can have on your credit score. It is common for individuals going through a divorce to focus on figuring out the details of living their lives separately, but figuring out your now individual finances can be difficult.

Getting divorced itself will not affect your credit score (because marital status does not play a role in determining your credit score). However, there are many indirect effects of divorce that can affect your scores. First, a court will likely divide up the responsibilities for shared debts in a divorce decree. This may require one spouse to take over the payments for a joint-mortgage, and the other spouse to be responsible for an auto loan.

There are several steps you can take to help manage any effect a divorce can have on your credit score. Additionally, it is important to find out what your current credit score is. Copies of your credit reports are available by visiting It is important to continue to monitor your score while going through a divorce to make sure there are no errors or problems.

Additionally, it is often best to separate all shared accounts. Addressing who will maintain what account, or closing them completely, can often be handled as part of the separation. Most of these changes can also be taken care of by contacting your lending institution directly. Failure to do so, will keep you tied together financially with your former spouse. Therefore, if they fall behind on bills, or run up credit card balances, the so-called “black marks” will appear on your credit score as well.

While going through a separation it may also be possible to figure out payment plans of jointly owned assets. This can be done by either selling some of these marital assets to pay off the debt of others, or buying out the shares of your former spouse. These procedures may take some time to develop, so making sure that you continuously have access to the account during these times is important.

Lastly, it is important to recognize that you now need to build credit in your own name. This can be done by paying your monthly expenses with a credit card in your own name. Paying your bill in full each month is also recommended.

The family law attorneys at Hunziker, Jones & Sweeney, P.A. are experienced in handling complex family law issues, including divorce, child custody and support, equitable distribution, and alternative dispute resolution. The firm is also experienced in helping families and individuals deal with the devastating effects of financial distress and in mapping out potential strategies, including the possibility of filing for bankruptcy, to help them cope and to see the light at the end of the tunnel. Our skilled attorneys have the experience necessary to provide clients with the best possible outcome for their situation. For more information or to schedule a consultation, call (973) 256-0456 or fill out our contact form.

Debts of an Estate

When a parent passes away, oftentimes their spouse or adult children are left to settle the estate. While debt may be the last thing on the mind of someone that loses a loved one, it is an important issue that may arise upon their passing. Many people have similar questions when it comes to estate debt: Are the beneficiaries responsible for a loved one’s debt upon their death? What happens if the assets of the estate amount to less than the debt the parent owed?

In New Jersey a surviving spouse may not be held responsible for the debts left behind by either husband or wife unless it was a debt that both parties undertook together. In other words, if an individual leaves a debt behind when he or she passes away, it will not tarnish the credit score of the surviving spouse.

First to be paid are reasonable funeral expenses. Second in line to be paid are any administration expenses including legal fees, probate fees, and appraisals, among others. The third level of expenses to be paid are debts for services rendered by the Office of Public Guardian for Elderly Adults. Next is the payment of federal and State taxes, interest and penalties. Medical expenses and hospital expenses of the last illness, including payment for person’s providing care shall be paid. Judgements against the decedent are paid next. Unsecured creditors are the last to be paid by an estate if the money is available.

The executor of the will or administrator is responsible for notifying creditors of the death. Any creditor with notice must file a claim against the estate to recover any monies owed. An executor or administrator of the estate must follow the priority order established by state law when paying any claims.

If there are not enough assets in a decedent’s estate to pay all of the outstanding debts, the estate is insolvent. If there are insufficient assets to pay all of the creditors, an application must be brought to the court with a proposed distribution plan as to the payment of outstanding debts in accordance with the priority status of the claimant. A surviving spouse or children of the decedent are not personally liable for payment of any unpaid debts of the estate.

The loss of a parent can be stressful and overwhelming for their surviving loved ones. In some instances, the passing of an individual can lead to complex financial and legal issues. The attorneys of the Law Offices of Hunziker, Jones, & Sweeney, P.A. have experience assisting New Jersey residents with all aspects of trusts and estates, including wills, estate administration and estate taxation. Our estate planning lawyers are trusted by our clients to handle each legal matter with diligence and compassion. For more information or to schedule a consultation, call our New Jersey estate planning firm at (973) 256-0456.

New Jersey’s New Approach to Adoption Records for Adult Adoptees, Birth Parents

In New Jersey as many as 2,400 adoptions take place every year. Recently, after years of relentless lobbying, a law took effect that allows those adult New Jersey adoptees to obtain their original birth certificates that have information about their biological parents, their medical history and identity. Prior to this legislation, these records were sealed by the state of New Jersey and were only available through a court order. Since the legislation took effect in January 2017, more than 1,000 adult adoptees have received their birth records from the New Jersey Department of Health (NJDOH) after submitting applications.

Authorized individuals may access a copy of the adoptee’s birth certificate through an application form (REG-44). There is no deadline for an adult adoptee to request a copy of their original birth certificate. According to NJDOH, individuals who are allowed to make the requests for these birth certificates are “adult adoptees, direct descendants, siblings or spouses of adopted persons, adoptive parents, legal guardians or other legal representatives of the adopted individual, and state or federal government agencies for official purposes.” The fee is $25 for the birth record and then $2 for each additional copy.

If a birth parent wanted to maintain their privacy by having their name redacted from a child’s birth certificate, they must have completed a redaction request form and submitted it to the NJDOH by December 31, 2016. Under the law, if the adoption was made final on or after August 1, 2015 the birth parents do not have the option to redact their names. Birth parents may also complete a family history and contact form that can be altered at any time. These forms provide contact options including direct contact information, contact through an intermediary, or no contact at this time.

The legislation was signed by New Jersey Governor Chris Christie in 2014. Since then, the NJDOH publicly alerted birth parents, national adoption agencies, and health officials in states where former New Jersey residents may reside. NJ Family Care (NJCARE), New Jersey’s publicly funded health insurance program, has mailed out thousands of informational cards to libraries, adoption agencies and adoption advocacy groups across the nation to get the word out about the new legislation.

However, despite the agencies’ efforts to notify the birth parents of the 300,000 adoptees under the old law, some birth parents remain unfamiliar with the change and, as a result, some have missed the window of opportunity to submit a request to have their names redacted. Critics have argued that the legislation should have included funding to provide educational outreach to these people.

The New Jersey Right to Life and New Jersey Catholic Conference have been outspoken on their opposition to the legislation. According to Marie Tasy, Executive Director of Right to Life, the organizations fear that the lack of anonymity will leave birth mothers feeling betrayed and that it will discourage pregnant women and girls from carrying a baby to term if they fear they will be discovered. The organizations’ position is that it should be the birth mother’s decision to have a closed or open adoption, not the state. Patrick Brannigan, Executive Director of Catholic Conference, has stated that by December 28, 2016, his organization had received hundreds of calls from elderly birth parents who needed help accessing paperwork to remain anonymous.

As of February 1, 2017, 1,900 adoptee applications were received, 1,056 birth records were mailed, 558 birth parents requested redactions on the records, 351 birth parents provided family history, and 121 birth parents have stated that they want some form of contact with the child they placed up for adoption.

The family law attorneys at Hunziker, Jones & Sweeney, P.A. are experienced in handling complex family law issues, including adoption, divorce, child custody and support, equitable distribution, and alternative dispute resolution. Our skilled skilled family law attorneys have the experience necessary to provide clients with the best possible outcome for their situation. For more information or to schedule a consultation, call (973) 256-0456 or fill out our contact form.

2017 Brings New Rules to New Jersey Businesses

With 2017 already well underway, New Jersey businesses should be aware of several new regulations, including an increase in the state minimum wage, as well as the adoption of paid sick ordinances by two New Jersey municipalities that went into effect on January 1.

New Jersey Minimum Wage Increase

According to the New Jersey Department of Labor and Workforce Development (NJDOL), in 2017, the minimum wage in New Jersey increases by $0.06 from $8.38 to $8.44 per hour. Employers in New Jersey must ensure that they are paying their employees at least the minimum wage in order to remain in compliance with New Jersey employment law guidelines.

Additionally, the New Jersey legislature has been working to increase the state’s mandatory minimum wage even higher over the next few years. The New Jersey Senate passed a bill on June 23, 2016 that would gradually raise the minimum wage to $15.00 per hour. However, on August 30, 2016, New Jersey Governor Chris Christie vetoed the bill, arguing that the minimum wage increase could hurt New Jersey’s small businesses and put employees at risk of being replaced by automated kiosks. Democratic leaders in the New Jersey Senate plan to push back against Governor Christie’s decision by placing the issue on the November 2017 ballot as a referendum.

Paid Sick Leave

Two New Jersey municipalities, Morristown and Plainfield, enacted paid sick leave laws that apply to employees of businesses in those areas. Business owners in these municipalities must allow their employees to accrue paid sick leave to care for themselves or other family members. This ordinance requires employers with a minimum of 10 employees to provide 40 hours of paid sick leave during the calendar year. For employers who have less than 10 employees, they must provide at least 24 hours of paid sick leave during the calendar year.

Under the Morristown ordinance, individuals who work in the child care, home health care, and food service industries must receive 40 hours of paid sick leave during each calendar year, regardless of how many employees the employer has. Likewise under the Plainfield ordinance, employees in the food service and day care industries must receive 40 hours of paid sick leave per year, regardless of how many employees the business has.

In both municipalities, current employees begin to accrue paid sick leave upon the date the ordinance goes into effect. New hires accrue sick leave upon hire, however are not entitled to use it until after a certain number of days of employment.

Under the ordinance, an employee must accrue at least one hour of paid sick leave for every 30 hours worked. If the employee does not use their accrued paid sick leave within the calendar year, he or she may carry it over to the next calendar year. However, if the employer and the employee part ways due to termination, resignation, retirement or another form of separation from employment, the employer is not required to pay the employee for unused paid sick leave.

As the paid sick leave trend continues to grow, New Jersey employers should monitor changes in their jurisdictions. Employers in New Jersey towns that have enacted these ordinances should review their current paid sick leave allowances as well as current wage practices in order to ensure they are in compliance with the new regulations.

For business owners and employers who wish to determine if their existing leave and/or attendance policies are consistent with the ordinances, or who are seeking to update, revise, or issue new policies as appropriate, it is important to consult an New Jersey business attorney who is knowledgeable of New Jersey business laws and regulations.

If you are a business owner and are concerned about remaining in compliance with current and future regulations, contact the experienced New Jersey business attorneys at The Law Offices of Hunziker, Jones & Sweeney. To schedule a consultation or to learn more about our extensive legal services, call (973) 256-0456.

POLST and Advance Directives: You Need Both!

In December 2011, New Jersey Governor Chris Christie signed legislation that enables patients to indicate their wishes regarding life-sustaining treatment through the practitioner/physician orders for life-sustaining treatment (POLST) form. POLST is a medical order that is completed by a physician or an advance nurse practitioner (APN) and is intended for patients with life-limiting illnesses. The advance planning tool POLST should be established and utilized complementary to, not in place of, advance directives.

Under New Jersey’s basic advance directive form, there are two components: a proxy directive (a durable power of attorney for health care) and an instructive directive (a living will). As mentioned in a previous article, advance directives allow an individual to plan and communicate their end-of-life decisions in the event that he or she loses the capacity to do so. All adults should have an advance directive as it allows the appointment of a surrogate to speak on the behalf of the individual when he or she is unable to do so.

An advance directive does not provide medical orders, but rather provides an idea of treatments one wishes to have in medical emergencies in which they cannot communicate. When someone is incapacitated, the health care system will review the advance directive and communicate with the appointed surrogate to develop a treatment plan. Without an advance directive, and depending on what state one resides in, there may not be anyone who can be put in place to make medical decisions on behalf of the incapacitated individual, or it may be unclear who that individual is.

A POLST is mainly applicable to those who are very elderly or are suffering from a terminal illness. The threshold to determine if a patient qualifies to complete a POLST is if, according to the medical team, there is a likely chance that the patient would pass away within one year. Once a POLST is completed, it becomes part of a patient’s medical records, following the patient through multiple health care settings, including hospitals, nursing homes and hospice.

There are several issues that arose with the implementation of advance directive statutes, one being that advance directives are often drafted at the time when someone establishes their estate plan. These important legal documents are often secretly tucked away from public eyes, thereby negating the goal of communicating end-of-life decisions directly with an appointed surrogate. The advance directive also only comes into play if and when the individual becomes incapacitated. If the advance directive does not specify that a conversation needs to be held between the individual and their appointed surrogate upon the document’s completion, then there is a risk that the appointee will not act in accordance with the person’s true preference.

An unforeseen conflict may also arise when medical practitioners are asked to interpret the lengthy legal documents they might not be prepared or have time to review carefully. Additionally, estate planning attorneys often draft legal documents thoroughly, whereas medical professionals prefer that the instructive directive be a simple statement of one’s basic philosophy about life-sustaining interventions and the use of technological advances. Medical professionals advocate that the critical component to advance directives is the appointment of the surrogate, or spokesperson. This individual will work closely with the doctors and nurses to determine what is in the best interest of the individual.

POLST was created to address many of these issues. In the instance when death is a likely reality, not just an eventual event, POLST shifts the burden from the attorney to the medical practitioner. In end-of-life circumstances, the health care professional is in the best position to address the consideration of life-sustaining treatment, ineffective interventions, and quality-of-life assessments. POLST acts as a consolidated set of medical guidelines that are the result of a conversation between the patient, who has a life-limiting condition, and the physician or APN. It specifically addresses medical treatments, artificial fluid, airway management, and cardiopulmonary resuscitation. The form can be transported and is honored across all care facilities.

In the New Jersey POLST form, there is a surrogacy provision that calls for the appointment of a health care decision maker in the event the patient becomes incapacitated. A provision to specify anatomical gifts is included as well. The POLST must be signed by both the patient or the designated proxy and the physician or APN who has participated in the discussion. Once signed, the document is operational.

As mentioned previously, POLST is neither an advance directive nor a replacement for these legal documents. However, both POLST and advance directives are advance caring documents that are helpful in communicating a patient’s wishes when used appropriately. It is important that, when an individual considers putting together advance directives, he or she consults an experienced New Jersey estate planning attorney who can assist you with the drafting, adoption and execution of these legal documents and will help to ensure that all necessary information is included.

The New Jersey estate planning attorneys at Hunziker, Jones and Sweeney, P.A. can provide assistance in putting your legal, financial, and medical affairs in order to avoid legal complications requiring court intervention. For more information or to schedule a consultation, call (973) 256-0456 or fill out our contact form.

How an Advance Directive Can Benefit Loved Ones with Alzheimer’s Disease

More than 68 percent of New Jersey residents know someone who has or had dementia or Alzheimer’s disease, according to a survey conducted by Fairleigh Dickinson’s PublicMind. Dementia is a group of symptoms that can include impairments to one’s ability to think and communicate, as well as memory loss. Alzheimer’s disease is the most common cause of dementia. It is a progressive, degenerative disorder that impairs thinking, behavior and memory. Due to the degenerative nature of the disease, those with Alzheimer’s are encouraged to obtain an advance directive, a legal document that can direct medical and financial wishes, even after the point when individuals lose the ability to do so themselves.

What are Advance Directives?

Advance directives are written instructions that allow an individual to plan and communicate their end-of-life decisions in the event that he or she loses the capacity to do so. In the state of New Jersey, advance directives can include a proxy directive (a durable power of attorney for health care) and an instructive directive (a living will).

Durable Power of Attorney

A power of attorney allows the person with Alzheimer’s disease, “the principal,” to designate a trusted individual, “the agent,” (usually a family member, caregiver, domestic partner, friend) to make financial and other decisions when the affected individual is no longer able to do so.

With respect to individuals with Alzheimer’s disease, these documents should be written to be “durable,” meaning that they can be implemented even after the individual becomes incapacitated and can no longer make these decisions. To ensure that these documents remain valid in these instances, an experienced New Jersey estate planning attorney should be consulted when drafting these documents.

A power of attorney does not give the agent the power to override the decisions of the principal. The individual with Alzheimer’s maintains legal rights over these decisions, as long as he or she has legal capacity.

The principal may grant the agent authorization to make decisions about income and assets. The agent is responsible for maintaining all finances and assets according to the instructions, and in the best interests, of the principal.

Power of Attorney for Health Care

A power of attorney for health care allows an individual with Alzheimer’s to designate an agent to make health care decisions for them when they are no longer able to do so.

These health care decisions can include doctors and other physicians, types of treatments, and care facilities.

For someone who is in the advanced stages of Alzheimer’s disease, the health care agent may make end-of-life decisions, such as providing “do not resuscitate” (DNR) instructions to the physicians.

It is important that the principal explain his or her wishes in detail with the designated health care agent early on to make sure that the instructions are understood and will be implemented on behalf of the principal.

Living Will

Under New Jersey law, an individual can have a living will without a power of attorney for health care. A living will is a written legal document that expresses how a physically or mentally incapacitated individual wishes to be treated in certain situations regarding their health care.

Among the medical wishes that are addressed in a living will, an individual with Alzheimer’s may specify his or her wishes regarding end of life medical care. The contents of the living will is referenced and relied upon once the individual is incapacitated and is unable to communicate his or her wishes regarding medical treatment.

Circumstances in which an individual can have life-sustaining treatment withdrawn or withheld are:

  • The individual is permanently unconscious.
  • The individual is in terminal condition.
  • The life-sustaining treatment would likely only prolong an imminent death.
  • The life-sustaining treatment would be ineffective.
  • The individual has a serious irreversible condition and the life-sustaining treatment would do more harm than good to the individual.

A living will should also include an individual’s statement about their beliefs or general preferences for care and treatments for medical situations that are not specified in the living will. That way, doctors and family members can make decisions in line with the individual’s wishes.

A living will may also prevent conflicts among loved ones, doctors or other health care providers that can occur when a patient’s treatment preferences are not known.

When Should Advance Directives be Made?

Generally, advance directives should be completed as soon as possible after a diagnosis of dementia. However, each advance directive demands a different degree of legal capacity, the level of judgment and decision-making ability needed to sign official documents or to make legal or financial decisions.

The level of capacity required for an individual to sign a health care proxy is low. An individual only needs to know who the health care proxy is and that they would like them to make medical decisions for them if needed. Unless there is evidence to the contrary, the law presumes a health care proxy is valid.

For a power of attorney, the law requires a higher degree of capacity. To execute a valid power of attorney, an individual must know who the designated power of attorney is and have a thorough understanding of what he or she is signing and what the implications of that document are. Analyzing whether or not an individual has the capacity to sign an advance directive is not an easy task and must be evaluated by an experienced elder law attorney.

What If the Individual’s Alzheimer’s Disease Has Progressed Beyond Legal Capacity?

If an individual’s Alzheimer’s disease has progressed to the point where they do not have the capacity to execute an advance directive, then a guardianship may be required for that individual. An application is brought before the court asking to appoint a guardian to an incapacitated individual and their property based on incapacity certification of two independent physicians who have either examined or treated the patient within the last 30 days.

Once a petition is filed with the Court, a date will be set for the hearing. Furthermore, all parties of interest will be notified regarding the date of the hearing, and the parties may object to an appointed guardian. A court appointed attorney is appointed to represent the individual, review finances and medical records. Counsel will present evidence and provide a recommendation as to whether or not they feel a guardian is necessary. Finally, the court will determine if a guardian shall be appointed and whether the person asking to become a guardian is the right individual to act in such a capacity.

After an individual has been appointed guardian, the court continues to monitor the status of the ward. Additionally, the Guardian must maintain records and periodically submit reports to the court. While advance directives are not able to be acquired after a person is diagnosed with dementia, it is better to have them in place beforehand to avoid a potential guardianship proceeding.

The experienced attorneys at the Law Offices of Hunziker, Jones, & Sweeney help seniors and their families handle all aspects of elder law, including end-of-life planning, asset preservation, Medicaid planning, and trusts and estates. These issues can range from simple to complex, and can often be emotional. A guardianship is one tool the firm uses to help protect the elderly or disabled. The attorneys at the firm can be trusted by their clients to handle each legal matter with diligence and compassion. For more information, call the firm at (973) 256-0456.

Understanding Medicaid Terms

Medicaid is a state and federal program that provides health insurance for millions of Americans, including low-income adults, children, pregnant women, elderly adults and people with disabilities. States administer Medicaid to eligible individuals, according to federal requirements. The program is a state- and federally-funded program.

When reviewing a Medicaid enrollment or renewal application there will be several terms that will be crucial to understanding how an individual may be eligible for Medicaid services. The terms, “resources,” “income,” “’set aside’ costs,” and “spousal refusal,” are defined below and should be utilized as a resource for those seeking Medicaid eligibility and renewal.

What are resources?

Resources are an important factor in determining whether or not an individual may be eligible for Medicaid services. In terms of Medicaid eligibility, resources are all financial assets that an individual owns, or has the right, authority or power to convert to cash, and are legally available for the Medicaid applicant or beneficiary’s support and maintenance.

When determining Medicaid eligibility, there will be some assets that are countable resources and others that may be excluded. Retirement accounts are considered exempt resources so long as the applicant is receiving a monthly distribution. Retirement accounts are any qualified account (IRAs, 401(k), 403(b), Thrift Savings Plans, etc.) wherein the applicant put money away before paying income taxes. Even though Roth IRAs are funded with after tax dollars, for Medicaid purposes they are still considered retirement benefits.

When reviewing assets, consider everything from real estate, cash value in life insurance policies (not the death benefit), certificates of deposit, savings accounts, bonds, checking accounts, non-qualified annuities and business interests.

What is income?

All income is considered for Medicaid eligibility purposes, both earned and unearned.

Earned income is earnings that is received as a result of work activity including wages, salaries, tips, commissions and income received from self-employment. Unearned income is earnings which is paid because of obligation rather that for services performed including pensions, interest or dividends.

What costs can be “set aside?”

Costs that can be set aside are certain items of income that can be set aside for Medicaid eligibility purposes. This means that a Medicaid applicant or beneficiary can pay for certain items and not have those costs be considered as part of their available income. “Set aside” costs can include an individual’s costs of health insurance and medical prescriptions.

What is spousal refusal?

After shifting excess assets into the name of the community spouse, he or she would sign a document called a spousal refusal. Spousal refusal is a document filed with the Human Resource Department/ Department of Social Services (HRA/DSS) that indicates that the refusing spouse refuses to contribute their income and assets to the care of their partner as they need to utilize their income and assets for the support and maintenance of their own care and well-being.

Once the community spouse invokes their right to spousal refusal, and all requirements of the Medicaid application are met, the state Medicaid program must pay for the care of the institutionalized spouse.

After Medicaid has been granted, the DSS/HRA may institute a lawsuit to seek the recovery of the cost of care from the refusing spouse. However even in the light of this risk, there are a few reasons why spousal refusal may be the optimal option. Firstly, that the DSS/HRA may never pursue the lawsuit. Secondly, these lawsuits are often settled for significantly less than the costs of the care provided. Thirdly, the payment to the county can sometimes be deferred until the community spouse passes away. Finally, even though the individuals’ county may seek recovery, it would only be for the Medicaid reimbursement rate and not for the private payer rate. For example, if the private payer rate is $18,000 per month for home-health aide services rendered, the amount Medicaid pays is a fraction of this cost. Instead of the paying the $18,000 per month private payer rate, the Medicaid-covered cost rate may only be $11,000 to $9,000 per month. The county may only pursue the individual for the amount they actually paid, not the private payer rate amount.

The Medicaid eligibility, application and renewal terminology can be confusing. It is important to seek out the guidance of an experienced Medicaid planning attorney who can answer your questions about planning for Medicaid and will assist you along the way. The knowledgeable New Jersey Medicaid planning lawyers at the Law Offices of Hunziker, Jones, and Sweeney are experienced in helping individuals prepare for eligibility and applications of Medicaid, while taking full advantage of programs and planning options to help protect an individual’s or family’s income and assets. To schedule a consultation, call call the firm at (973) 256-0456 or fill out our contact form.

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