The author Vance Parker (blue helmet) with vaccinated whitewater kayaking friends at the Cheoah River, North Carolina May 30, 2021.
The safety-conscious whitewater paddling community has done a great job encouraging each other to get vaccinated for COVID-19. Being vaccinated both increases our own safety when “shuttling” in vehicles carrying paddlers and gear to river “put in” and “take out” locations, and protects the family businesspeople in the rural and small town communities all over the Southeast, where we visit to paddle.
Tourists of all types enjoy visiting the beautiful far Southwestern Graham County area of North Carolina. My friends and I traveled there this last Sunday, May 30 to whitewater kayak its Class IV-V rated Cheoah whitewater river on one of its “dam release” weekends. The exciting upper Cheoah feels like riding floodwaters through a wooded creek bed … the last two miles open up, which allowed me to get video from shore of friends paddling Class V Bear Creek Falls and other classic Cheoah rapids. See Vance’s Cheoah River Whitewater Kayaking Video here.
Tourists to this beautiful area can hike in nearby Joyce Kilmer Memorial Forest (one of the last uncut stands of timber in the Southeast), paddle themselves on lakes, flatwater, or whitewater rivers, or on guided whitewater trips in the pretty Nantahala or Tuckaseegee rivers close by. Motorcyclists and sports car drivers (as well as slower driving tourists in automobiles) travel from all over the country to ride the famous scenic twisting Cherohala Skyway or “Tail of the Dragon” routes. The beautifully restored Tapaco Lodge (built in the 1930s to house the workers who constructed the impressive Cheoah Dam and hydropower facility) looks right over the clear whitewater Cheoah River. On Cheoah whitewater release weekends, guests can relax and eat lunch while watching whitewater boaters paddle Class IV Topoco Lodge rapid right in front of them.
Tourists make sure to take a “selfie” at Cheoah Dam. This is where Harrison Ford’s character Dr. Richard Kimble jumped into a raging river far below, as part of an exciting chase scene in the 1993 movie “The Fugitive.”
At my legal practice Vance Parker Law, we lost some friends and clients to COVID-19 in a very difficult pandemic year, like so many others around the world. As everyone moves forward now, we hope that all of you will take advantage of the effective vaccines widely available in the U.S., and encourage any unvaccinated friends and family members to get vaccinated. And please celebrate life in your own ways this summer, while supporting all of those small business families who have been bravely holding on out there, just waiting for your visit.
Outdoor diners at the historic Tapoco Lodge watching whitewater boaters paddling the last part of the Cheoah River’s Class IV Topoco Lodge Rapid.
The historic Tapoco Lodge, from its motorcycle parking lot.
Cheoah Dam and hydropower generating station. Harrison Ford’s character Dr. Richard Kimble jumped off of this dam during an escape scene in the 1993 movie “The Fugitive.”
Vance taking a “selfie” with whitewater paddling friends after paddling whitewater Section 9 of Western North Carolina’s French Broad river, the day before the Cheoah run. All of these whitewater friends were previously vaccinated for COVID-19 as well.
On a bright North Carolina Saturday, Molly sits on her front porch while the goldfinches take turns pecking out thistle seeds from the feeder. But she is not watching her favorite birds at breakfast like usual, as Molly sits deep in thought, worrying. Her mother’s dementia is getting worse, and her father is having a lot of trouble helping her mother out of bed, and up from the family room chair. Plus the nurse who visits has been telling her that mom’s diabetes and its complications are getting hard to manage at home, predicting that her mother will need skilled nursing facility care within a few months.
Molly has heard though that skilled nursing home care may cost $10,000 / month. Her father remains pretty healthy, but she worries that her parents’ IRA money saved up will not take care of her father with his modest social security check for very long, if they have to pay a nursing home $10,000 / month plus pay mom’s other unreimbursed medical costs at the same time. But Molly’s best friend Carol has explained to her that before her mom and dad can get Medicaid to cover long term care expenses, they will have to spend down most of their assets, then the government will get their house when they pass away. Molly also knows that her parents have always been proud of paying their own way, and may be reluctant to get government help.
Fortunately, Molly has gotten bad advice from her friend Carol — an elder lawyer may be able to use Medicaid planning techniques to protect many of her parents’ assets, and allow their home to be passed down to Carol and her brother Richard when they both pass away, as Mom and Dad have already planned for in their wills. But is it ethical to protect assets from the government and a nursing home in this way? How will Carol convince her father to visit an elder law attorney?
Asset protection in North Carolina actually has a long history, going back over 2,000 years. Over time, kings and rulers in Europe (where much of U.S. and North Carolina law developed) allowed their subject families to keep more wealth and pass it down to their families, as they learned that people who were treated better would fight harder for their king, and had more wealth that could be taxed to support the king’s military campaigns. As time went by, evolving legal concepts better protecting individual rights, liberties, and individual property against creditors were transferred by European settlers to the Americas, and were written into United States law, and into the laws of the individual states that comprised the United States.
Older through more modern asset protection concepts including asset protection trusts (Thomas Jefferson used an asset protection trust to protect his daughter Martha’s inheritance against his son-in-law’s creditors), corporate protections shielding investors from business risks, bankruptcy protections, certain real property protections against creditors, creditor protected qualified retirement accounts, and creditor protected life insurance transfers have become standard protections available to all North Carolinians today.
Although they are more hidden, both federal law and state law creditor protections (available to North Carolina families) have been interwoven into (or allowed to exist with) Medicaid law. Elder law attorneys utilize these available protections when helping families shield assets through Medicaid planning.
Two often cited court rulings from other states provide examples of judges upholding Medicaid planning techniques as appropriate and ethical.
In the elder law case In the Matter of Kashmira Shah, 2000 NY Int. 69, the New York Court of Appeals reaffirmed that a spouse who served as guardian for her mentally incompetent husband, was able to use Medicaid planning to “spend down” her husband’s assets by transferring all of her husband’s assets to herself, to be used to support herself while her husband received Medicaid long term care benefits.
In justifying its decision, Judge Bellacosa agreed with a lower court’s moral reasoning:
[N]o agency of the government has any right to complain about about the fact that middle class people confronted with desperate circumstances choose voluntarily to inflict poverty on themselves [by using Medicaid planning to get the ill spouse financially qualified for Medicaid while saving assets for the well at-home spouse] when it is the government itself which has established the rule that poverty is a prerequisite to the receipt of government assistance in the defraying of the costs of ruinously expensive, but absolutely essential, medical treatment.
In the elder law case In the Matter of Mildred Keri, 181 N.J. 50; 853 A.2d (2004), the unanimous Supreme Court of New Jersey held that that where a skilled nursing facility constituted appropriate care for an ill mentally incapacitated mother with severe dementia, it was legal and ethical for her guardian son to use Medicaid planning techniques to benefit himself and his brother (the two brothers were also the sole primary beneficiaries in their mother’s will) in order to get the mother qualified for Medicaid long term care benefits. In explaining its ruling, the Supreme Court of New Jersey stated:
When a Medicaid spend-down plan does not interrupt or diminish an incompetent person’s care, involves transfers to the natural objects of the person’s bounty, and does not contravene an expressed prior intent or interest, the plan clearly provides for the best interests of the incompetent person and satisfies the law’s goal to effectuate decisions an incompetent would make if he or she were able to act.
Because Medicaid law is complicated, it is important to consult an elder law attorney to help determine if Medicaid planning is right for you, or for someone you care about.
A special needs trust (SNT) allows families to save significant assets for a special needs, disabled, or elderly person who receives Medicaid, Social Security Income (SSI), or other “means tested” (has strict beneficiary asset or income limits) government benefits. Federal law makes SNT assets “noncountable” (counted as zero dollars) with respect to the beneficiary’s monthly asset limit (typically set at $2,000 for a single Medicaid or SSI beneficiary.) SNT funds may pay for a variety of goods or services that supplement government payments, while allowing the special needs or disabled beneficiary to keep their government benefits.
An SNT may pay for:
Medical, psychological, or dental treatment;
Private rehabilitation;
Educational training;
Pharmaceuticals/drugs;
Home care;
Personal care and living expenses;
Medical equipment;
Food supplements;
Automobile or van expenses; adaptive modification expenses;
Adaptive equipment;
Enrichment items and activities;
Electronic devices, radios, televisions, audio, video, and computer equipment;
Recreational opportunities, trips, family visits, visits to friends;
Health insurance premiums and deductibles;
Life insurance premiums;
Purchase and maintenance of a primary residence for the elderly, special needs, or disabled individual
ABLE Accounts
Enacted in 2014, the federal Stephen Beck, Jr., Achieving a Better Life Experience Act (ABLE Act), allowed states to set up programs to create tax free savings accounts owned by special needs or disabled individuals, that do not disrupt their government benefits. Learn more about the North Carolina ABLE account program here. A special needs or disabled person may manage their own account, or the account may be managed by a parent, legal guardian, or power of attorney agent. Although an ABLE account may be established at any time, the account owner and beneficiary must have become blind or disabled by a condition that began before the individual’s 26th birthday.
Housing (includes mortgage and required property insurance expenses, real property taxes, rent, heating fuel, gas, electricity, water, sewer, and garbage removal)
Transportation
Employment training and support
Assistive technology and related services
Personal support services
Health
Prevention and wellness
Financial management and administrative services
Legal fees
Expenses for ABLE account oversight and monitoring
Funeral and burial
Basic living expenses (includes food)
Special Needs Trusts and ABLE Accounts: Differences, Advantages, and Limitations
Even though SNT and ABLE account assets may be used for a number of overlapping purposes, SNTs and ABLE accounts were originally authorized under different federal laws. Depending on the need, either an SNT or an ABLE account may provide a better solution. In many cases, an SNT and an ABLE account can be set up to work together, so that an SNT trustee may be authorized to direct SNT funds into the SNT beneficiary’s ABLE account.
A first party SNT (such as a “d4A” SNT) may be set up to make a beneficiary’s assets noncountable when those assets are owned by, or titled to, the beneficiary. First party SNTs are frequently set up to make a Medicaid or SSI beneficiary’s inheritance (if that inheritance is not held within a 3rd party SNT set up by the giver), or asset award noncountable, so that the beneficiary’s Medicaid or SSI benefits are not disrupted.
Because a first party SNT must adhere to a strict federal “sole benefit” rule, the trustee of a first party SNT should not fund an ABLE account with first party SNT assets. 3rd party SNTs, which do not have to comply with the sole benefit rule, provide the trustee with more spending options. A third party SNT may thus fund an ABLE account, and keep the ABLE account funded. The rest of this article will thus refer only to 3rd party SNTs.
3rd Party Special Needs Trust Advantages
No age limits – may be set up for a special needs or disabled individual of any age
No total funding limit – may hold any amount of assets
No annual funding limit – assets may be placed in the trust at any time, in any amount, without a yearly maximum limit
May hold a wide variety of asset types, including real property such as a home, and motor vehicles
No government payback requirement – if the beneficiary passes away, remaining SNT assets may be directed to other family members
3rd Party Special Needs Trust Limitations
The SNT beneficiary may not serve as trustee or manage SNT funds
Spending SNT funds on In Kind Support and Maintenance (ISM) expenses for SSI beneficiaries, such as for food expenses, or housing support expenses, may lead to lower monthly SSI benefits
The trust grantor will need to pay legal fees in order for SNT documents to be drafted properly
ABLE Account Advantages
A special needs or disabled person who is mentally competent may create an ABLE account, and manage his or her own assets
An ABLE account may pay for food or housing expenses
Very inexpensive to set up; may be appropriate for small amounts of assets
May be used to shield extra assets such as gifts, personal receipts, or work salary when the beneficiary’s personal checking account nears its $2,000 countable asset limit
A parent, legal guardian, or power of attorney agent may be authorized to manage an ABLE account when needed
ABLE Account Limitations
The account applicant’s onset of disability must have occurred prior to age 26, with the applicant having significant functional limitations resulting from the disabling condition
Annual contributions are limited to the individual annual gift tax exclusion amount ($15,000 in 2021)
A maximum of $450,000 may be held in the account
Account funds are subject to Medicaid or other government payback if the account owner/beneficiary passes away with account funds remaining
Using a 3rd Party SNT with an ABLE Account
A special needs or disabled person may remain more independent and happy when that individual can save money, and manage his or her own assets (when mentally able to manage assets.) In contrast, federal law requires that a trustee who is not the beneficiary serve as the manager of SNT funds.
But a 3rd party SNT may be drafted to allow the SNT trustee to fund, and keep funded, a separate ABLE account owned and managed by the special needs or disabled beneficiary. This can provide the beneficiary with funds for food, housing, or other important expenses, that the beneficiary can manage and spend independently.
An Integrated Approach (1)
When a 3rd party SNT is set up to fund an ABLE account, three sources of funds will now be available to pay a Medicaid or SSI benefits recipient’s expenses: 1) the beneficiary’s primary personal checking account; 2) the beneficiary’s ABLE account; 3) the SNT account.
All three accounts may be used together in the following manner:
Personal checking ($2,000 Medicaid or SSI asset limit – less if other countable assets are available): Receives SSI payments and work earnings
Used for paying rent, mortgage, meals, groceries, utilities, and for cash needs
ABLE account ($15,000 yearly contribution maximum): Receives funds from the SNT trustee, receives funds from personal checking when the personal checking account nears its $2,000 limit, receives gifts or other personal payments
May be used for any qualified disability expense (see above), such as for transportation, assistive technology, employment support, housing expenses, or food
3rd Party SNT: Receives larger gifts and inheritances
May purchase a home residence or automobile for beneficiary; pays for larger expenses including unreimbursed health-related expenses, vacations, insurance, and other large expenses
In North Carolina, when a state resident passes away leaving behind assets, the estate administration process may begin.
A person interested in properly winding up the deceased resident’s estate may apply with the Clerk of Superior Court serving the deceased resident’s county of residence to become the estate’s personal representative. The personal representative may serve either for a county resident who died intestate (without a will), or for a county resident who died with a will (testate.) This begins the estate administration process (also called probate.) Where a North Carolina resident (the will testator or testatrix) dies with a will, that will normally names a person (or persons) executor, with the Clerk of Superior Court normally qualifying the will’s stated active executor as the deceased resident’s personal representative.
The deceased resident’s assets which legally must pass through the probate process are known as the resident’s probate estate. Where a deceased resident’s trust owns assets at the resident’s death, those trust assets form the deceased resident’s trust estate. Trust assets are managed by the active trustee stated in the trust document. Trust assets normally bypass the county probate process (although North Carolina law provides that revocable trust assets may be pulled back to pay valid creditor claims in probate, where there are not enough probate assets to pay valid estate debts left behind at the trust grantor’s death.) The process of managing the trust’s affairs following the trust grantor’s death is called trust administration.
A trust grantor (the person who sets up and funds a trust; that person may also be called the trust settlor or trustor) often creates a will too (this will may be called a pour-over will where it is paired with a revocable living trust document.) Such a pour-over will is designed to address any probate assets that were not placed into the trust prior to the trust grantor’s death. Where such probate assets exist following a trust grantor’s death, the will’s executor may have probate duties involved in closing the deceased trust grantor’s probate estate. The will executor and trust trustee may be one and the same person, as named in the deceased resident’s estate planning documents (the executor and trustee may also be different individuals.)
As the trust grantor moves assets out of the grantor’s probate estate and into the grantor’s trust during the grantor’s lifetime (a process called funding the trust), the grantor simplifies the probate process required after the grantor’s death. Carefully funding a trust leaves less work for the grantor’s will executor to do in probate. North Carolina law provides for a shortened summary administration of a person’s probate estate where a surviving spouse is the sole current heir of a deceased North Carolina resident’s estate, and a simplified procedure for small [probate] estates (less than $20,000 in personal property remains in the deceased person’s probate estate, or less than $30,000 if a surviving spouse is the sole current heir.) See the North Carolina Estate Procedures for Executors, Administrators, Collectors by Affidavit, and Summary Administration manual, pages 11-13.)
In addition to trust assets, certain other types of assets avoid probate in different ways. For example, life insurance may pass at the policy owner’s death directly to named policy beneficiaries. Qualified retirement account (such as IRA and 401K) assets transfer directly at the account holder’s death to beneficiaries or entities (such as trusts) named in the retirement account provider’s records. Regular (non-retirement account) bank, brokerage, or securities account assets may pass directly to beneficiaries named as payable on death (POD) or transfer on death (TOD) account beneficiaries. Bank or securities account assets owned jointly may be fully owned by the survivor at a joint owner’s death (note, however, that North Carolina probate law provides that creditors may call POD, TOD, or a decedent’s joint account assets back into probate to pay valid creditor claims, where there are not enough probate assets left in a deceased resident’s estate to pay valid estate debts.)
Real estate jointly owned by a married couple in a tenancy by the entirety, real estate owned by joint tenants with rights of survivorship, or vehicles specifically titled joint tenants with rights of survivorship (JTWROS or JROS) by the North Carolina Division of Motor Vehicles (or comparable out-of-state agency) may pass to surviving owners at an owner’s death by operation of law, outside of the probate process.
Preliminary advice
A trust trustee is a type of fiduciary (acts on behalf of another person, with a legal and ethical duty to put that person’s interests ahead of his or her own interests) named in the trust document to manage trust assets. The trustee’s duty to act in the best interests of the trust and trust beneficiaries is legally enforceable, with the trustee having the legal duty to follow the instructions provided in the trust documents. Although an unaffiliated trustee who manages assets properly is not personally liable for estate or trust debts, a trustee who violates his or her fiduciary duties may be held personally accountable.
During trust administration, and at all times while administering the trust, the trustee must be careful to follow trust instructions and the law, act in good faith, keep good and transparent financial records, and act in the interest of all beneficiaries. A trustee who is also a trust beneficiary must remain neutral in all trust transactions, and cannot distribute assets to himself or herself in a way that jeopardizes distributions to other trust beneficiaries (as provided by the instructions written into the trust document.) Likewise, North Carolina law provides that all current trust beneficiaries have a right to receive a copy of the trust document, and a right to financial accountings and trust management records at “reasonable intervals.” It is a good idea for a trustee to be proactive, and responsive, in providing these items to current trust beneficiaries.
A trustee may keep trust accounting records on a computer program (such as Quickbooks or Quicken), with more specialized trust accounting software available for professionals. Particularly where a trustee manages funds that benefit others (or are otherwise subject to inspection or audit), a trustee should consider consulting a Certified Public Accountant (CPA), law practice that provides trust administration services, or other highly qualified accounting professional to help set up, oversee, or provide trust accounting and trust administration assistance.
A trustee who is a close family member of a deceased grantor, or a beneficiary of the trust, frequently chooses to provide trustee services without charge. But, a trustee may choose to pay himself or herself a management fee according to the language of the trust document (which often states that a trustee may receive “reasonable” compensation from trust assets.) Where the language of the trust does not provide for trustee compensation, North Carolina law provides that a trustee is entitled to compensation that is “reasonable under the circumstances,” a term that is further defined in a list of 11 different considerations.
The trustee should be upfront with beneficiaries early on in the trust administration process about an intent to compensate himself or herself from trust assets, and be conservative and reasonable when disbursing such payments to himself or herself. Such fees and expenses should be clearly stated and communicated within the periodic accounting statements provided to trust beneficiaries.
NORTH CAROLINA TRUST ADMINISTRATION CHECKLIST
Attend to the needs of any minor child, disabled, ill, or in-facility adult, pets, or livestock left unattended by the trust grantor’s death.
Secure any home, other structures, vehicles, or personal property left unattended following the trust grantor’s death. Do not let surviving or current beneficiaries or others take personal property prior to the executor’s or trustee’s formal distribution of that property. Store vehicles in a closed garage if possible. Consider changing or re-keying locks. Take photos of jewelry or other small valuables; consider storing such valuables in a safe deposit box or safe, at least temporarily. Notify the insurance carrier if a home or other important structure is now vacant. If not properly notified, an insurance carrier may not cover thefts, damages, or other losses.
Ensure that the funeral director has submitted a notification of death to the proper local registrar in the county where the death occurred. Obtain at least 12 copies of the death certificate (normally provided by the funeral director.)
Locate original estate planning documents. Will and trust documents are very important. Power of attorney documents become invalid at the principal’s (or document signer’s) death. Do not ask the financial or general durable power of attorney agent to make financial transactions, or sign legal documents, via a power of attorney document following the principal’s death.
Notify the Social Security Administration about the death at the SSA’s customer service number 1-800-772-1213. Claim the deceased resident’s death benefit ($255 in 2021), and claim any applicable benefits for a surviving spouse or dependent children. Warren Coble & Associates, Inc. may be consulted in Asheboro, North Carolina to help determine survivors’ Social Security benefits.
If the deceased resident was a military veteran, contact the Department of Military and Veterans Affairs (Veteran’s Administration or VA) to determine if the deceased resident is eligible for funeral or burial costs, or to see if a surviving spouse or dependent children are eligible for continuing benefits. Consider contacting the deceased person’s county Veterans Service Center for their help in determining potential benefits. This link provides more information on VA memorial benefits.
Review will and trust documents. Seek legal assistance when needed to understand specialized terms and provisions (for example, what is per stirpes or per capita distribution?)
Obtain a new Certification of Trust document (summarizes the long trust document and communicates its validity to 3rd parties) from a trust attorney if needed. Have the active trustee sign and properly execute the new Certification of Trust document.
Open (if needed) and/or maintain the primary trust checking account, or checking accounts for any discrete subtrusts which become active.
Evaluate and attend to the ongoing operations of any business entity held by the trust, where the trust grantor’s or beneficiary’s death left a vacancy. Obtain professional assistance if needed.
Identify current trust beneficiaries. Notify current trust beneficiaries of their beneficiary status, and provide them with a copy of the trust and will documents.
If the grantor’s death initiated a conversion of the grantor’s revocable trust to an irrevocable trust, or created a new irrevocable or separately taxable trust(s), obtain a new federal taxpayer identification number (Employer Identification Number, or EIN) from the IRS for the irrevocable trust(s). A new EIN may be obtained quickly online at the IRS’s Online EIN webpage.
Find and organize the deceased trust grantor or beneficiary’s important financial documents.
If the grantor’s death leaves a home vacant, cancel non-critical utilities such as cable television and internet service, telephone service, and magazines, newspapers, or other subscriptions. Keep electricity connected, and any HVAC system running, to guard against accumulating mold and mildew in the warmer months, or freezing pipes in cool months.
Inventory trust assets, and get trust assets appraised where needed.
Inventory probate estate assets, and get probate estate assets appraised where needed.
Review trust investments; take over management of trust assets and probate estate assets, and connect with or involve professionals (such as a financial advisor) when needed.
Where appropriate, seek, update, and/or maintain insurance on assets that will remain in trust.
Make claims on any bank or brokerage accounts, individual stocks or securities, life insurance policies, annuities, retirement accounts, or any other assets where the trust is named as the beneficiary.
If named as the Executor in the deceased trust grantor’s will document, make an appointment, then apply as the Personal Representative of the probate estate with the Clerk of Superior Court, in the deceased grantor’s / will testator’s (or testatrix’s) county of residence. Bring the original will document to the appointment, along with a copy of the the deceased individual’s death certificate, an initial inventory of the will testator’s or testatrix’s probate assets, and any other documentation requested by the county Clerk’s estates representative. Begin any required small estates, summary administration, or other probate process with respect to the deceased testator’s or testatrix’s probate estate assets. Involve an estate administration or probate attorney, if needed. Complete any required probate estate tasks, following the legal and accounting requirements. If another person or entity is serving as the will executor, coordinate with that executor to make sure that any needed probate tasks are completed.
Create or take over the record keeping system / accounting system for trust assets. Consider using accounting software to organize and track assets, and to create initial and periodic accounting reports. Involve a CPA or other appropriate professional when needed.
Monitor the deceased resident’s incoming mail, and pay valid probate estate debts and trust estate debts as they come up. Pay any other known, valid debts.
Collect any funds owed to the probate estate, or owed to the trust(s).
Prepare and provide an initial accounting of trust assets to current trust beneficiaries.
Return the entire Social Security payment made to the deceased person for their month of death, no matter what day of that month the death occurred (this is required.) Note that a Social Security’s monthly payment for a given month is normally made in the first week of the next month. If Social Security payments were deposited directly into the deceased grantor’s bank account, keep that account open, as it can take several months for Social Security to recall payments made after death.
File a final federal Form 1040 and an associated North Carolina state tax return for the final year of the deceased grantor’s life. File a federal Form 1041 for the trust if trust taxable income, after subtracting its withholding and credits, is more than $600 (tax year 2020 requirement.) Issue a federal Schedule K-1 (Form 1041) to each beneficiary receiving trust distributions.
Provide periodic accountings and statements to trust beneficiaries.
Sell trust assets, where such assets will not be distributed directly “in kind” to beneficiaries, instead of remaining in trust.
Obtain, from an attorney, real estate deeds and other documents required to distribute real estate to beneficiaries (as provided by the distribution language written into the trust), and properly execute and file these documents.
Prepare proper documentation to retitle motor vehicles, where they will be distributed directly “in kind” to beneficiaries, according to the language of the trust.
Distribute personal property, trust income, and principal to trust beneficiaries, according to the terms of the trust.
Document any final trust distributions to beneficiaries in a formal letter, accompanied by a final distribution statement.
Continue to manage assets to be held in ongoing trust(s) for beneficiaries.
The United States has not strategically planned aging well. Because aging-associated long term care costs are so high, and good alternatives for ill aging people may no longer be available, Medicaid for the “Aged Blind and Disabled” in North Carolina is now accessed by not only lower-income applicants, but also many middle class applicants as well. If skilled nursing care is needed, the Medicaid program now finances approximately 51% of that care, with Medicaid paying 62% of U.S. nursing home care expenses.
The public does not normally walk around thinking about complex Medicaid gifting rules, and those whom have heard about Medicaid gift rules often follow bad advice. Gift-giving mistakes routinely cause caseworkers to deny Medicaid applications. Seniors now ill enough to need long-term care but who have gifted within 5 years of the Medicaid application, in a way that cannot be reversed, may find themselves “between a rock and a hard place”–unable to obtain Medicaid support for essential long term care services, and without enough funds to private pay for that care.
HOW MEDICAID’S 5 YEAR LOOK-BACK GIFTING RULES ARE APPLIED IN NORTH CAROLINA
Designed to prevent an individual from becoming “poor” enough to receive Medicaid support (“countable” assets valued at $2,000 or less), by gifting away assets to children or others prior to filing a Medicaid long term care application, Medicaid’s 5 year look-back rules are strictly enforced by the Medicaid caseworkers that review and evaluate those applications. If a Medicaid applicant (or his or her spouse) has gifted out of the applicant’s estate within 5 years prior to the Medicaid application, Medicaid may issue a potentially costly “gift sanction” to that applicant. Such a gift sanction disqualifies the Medicaid applicant (during the “Medicaid penalty period”) from receiving Medicaid long term care benefits for a certain number of months.
North Carolina uses a penalty divisor [$6,818 in 2020] to determine the number of months a Medicaid gift sanction recipient must private pay a skilled care facility or provider, before Medicaid will pay. For example, a North Carolina Medicaid applicant receiving nursing home care, who has gifted $100,000 to a child three years before applying for Medicaid long term care benefits, must private pay that nursing home for $100,000 / $6810 = 14.68 months before being eligible for Medicaid benefits.1
EIGHT COMMON SENIOR GIFTING MISCONCEPTIONS
“A senior who gets too old or becomes ill should then gift away assets early to get ready for Medicaid.” Although it is important for a senior to plan for their potential long term care needs (and it may be impossible to tell what care may be needed in advance), the majority of seniors end up never using Medicaid to pay for long term care, and most age in their own residences. Even when Medicaid is needed to pay for long term care expenses, higher quality facilities either require private pay, or require some period (one year for example) of private pay before allowing a senior to convert to Medicaid reimbursement. Most seniors should thus keep their own money for themselves and their spouses (and not gift it away) to continue to support retirement, or to help self-finance future care (if needed.) If a senior already has enough assets to fund the rest of his or her retirement and medical care plus enough to transfer to children or others, or wants to better asset-protect real property for later transfer to heirs, then an elder law attorney may employ advance Medicaid planning or an asset protection trust (APT) to help preserve family assets. If a crisis requires a senior to quickly become Medicaid-qualified, an elder law attorney may be able to utilize Medicaid rules to transfer assets to a spouse or make them noncountable without gifting, in order to help the Medicaid applicant become qualified while preserving family assets at the same time.
“If a senior gives family members gifts of no more than $15,000 each, that is OK.”Because it has to do with “gifts”, many people think that the IRS annual gift tax exclusion limit ($15,000 per individual recipient or donee in 2020) creates a universal gift-giving rule for government programs. This IRS rule, which provides a “safe harbor” for making individual gifts before a federal gift tax return must be filed, has nothing to do with Medicaid (which is run at the federal level not through the U.S. Department of the Treasury/IRS, but through the U.S. Department of Health & Human Services.) Medicaid may instead penalize gifts of any amount, made out of a senior’s estate.
“A gift to charity is always OK.” This is incorrect. When reviewing an application, Medicaid assumes that any gift, including a gift to charity, is given with the intent to “spend down” assets to meet the Medicaid long term care applicant’s countable asset limit. Although in some cases Medicaid will exempt gifts if a Medicaid applicant has a long-term history of giving to a charity on a regular basis (and those gifts do not appear to have been intentionally made in order to qualify for Medicaid), a large one-time donation will likely not be exempted. It may thus be better for a senior to plan large charitable gifts through their will or trust, to take place after the senior has passed away.
“It’s OK to manage a senior’s assets as a joint account owner on a senior’s bank account.” Although this common practice may be legal, it can create real problems for a Medicaid applicant. A Medicaid caseworker may view a non-spouse joint account owner on a senior’s account as having received a 50% gift of the senior’s account assets. Caseworkers are taught to look for gifts, and may search with even greater scrutiny for gifts made to a non-spouse joint bank account owner (whom the caseworker may unfortunately suspect, based on the caseworker’s real world experience, to be improperly converting the senior’s assets to the joint account owner’s own use.) It’s much better instead to manage senior assets using a financial or general/durable power of attorney, or through a trust.
“It’s OK to give my caregiver cash, so my caregiver can make purchases for me.” A Medicaid caseworker will most likely first view a senior’s cash transfers to non-spouse others as gifts. It may be difficult for the senior to then later prove otherwise, particularly without good documentation. It’s much better for the senior or the senior’s legally authorized financial agent or trustee to instead pay for goods or services benefitting the senior directly with the senior’s bank account check or credit card, then carefully file and save all receipts.
“It’s OKto pay a family member to care for me.” A Medicaid caseworker will likely first view this arrangement as a subtle way to make gifts to the designated family caregiver. Establishing a caregiver agreement to formally document the family care relationship first, and properly keeping a time log documenting the family member’s daily caregiving services, provides more acceptable Medicaid documentation.
“It’s OK to sell the senior’s car to the senior’s grandchild for $500.” If the market value, or the “book value” of the car is actually higher than $500, this strategy will not work. When later evaluating such an undervalued sale from the Medicaid applicant’s estate, Medicaid may then subtract $500 from the actual market value or book value of the car, and count the difference as a gift to the grandchild. Similar undervalued transfers of any senior asset, to anyone other than a spouse, may create a later Medicaid gift penalty placed on the senior Medicaid applicant.
“I should gift the family farm to my children to prevent Medicaid from getting it.”If it is unlikely that Medicaid will be needed to support long term care within the next five years, placing the farm in a properly structured asset protection trust (APT) or similar Medicaid Asset Protection Trust (MAPT) may lower future family capital gains taxes, and can asset-protect the family farm for children and grandchildren (advantages which are not available through gifting.) To make real property noncountable in many North Carolina counties, or to protect against Medicaid estate recovery less than five years before Medicaid will be needed, properly reclassifying (consult an elder law attorney for assistance) the real property as “joint with rights of survivorship” (JTWROS) real property, and creating proper Medicaid documentation, may both make the real property noncountable, and protect it against Medicaid estate recovery, without creating a later Medicaid gift sanction.
Notes:
Note that the number of days is determined here by multiplying .68 x 31 days = 21.08 = 21 days, i.e. the Medicaid applicant must private pay the nursing home for 14 months and 21 days before he or she would qualify for Medicaid benefits.
You are getting a little older and wiser, and are thinking about what is really important. The family album you have tucked within your mind (and review there often before drifting off to sleep) has grown a lot, and now there are grandkids birthdays with giggles and smiles bundled in there too… The memories are wonderful, but you are hoping to leave even more for your family…
A Medicaid Asset Protection Trust (MAPT) may represent the best way in North Carolina to protect those assets that you want to share with your children and grandchildren. Even if you have significant assets and don’t think you will ever need Medicaid to assist with long term care if you need it, a MAPT-style irrevocable trust can more securely lock what’s important away now for them, and guard against high health costs of all types. A MAPT may better protect essential family assets against those financial risks that can “just happen” in an uncertain world.
BACKGROUND
In the Piedmont Triad region of North Carolina, skilled professional nursing care, whether in a facility (“nursing home”) or at home, may cost between $7,000 to $10,000+ per month. Senior government “Medicare” health insurance only pays up to 100 days of such care at a decreasing reimbursement rate, but regulations frequently allow Medicare insurance providers to get “off the hook” and stop paying much earlier than the 100 day limit. As lifespans increase, and adult children frequently outlive their own parents (often by many years), those best laid plans may not be enough, savings may get short, and a care recipient without good long term care insurance (which most do not have) may need the government Medicaid program to take over long term care expenses.
The Medicaid program originally arose out of the public welfare system, with extensive anti-poverty origins. Passed on July 30, 1965 along with Medicare, by President Lyndon B. Johnson as part of his “Great Society” initiatives, the Medical Assistance Program (Medicaid) was designed to allow the states to receive federal funding for healthcare services provided to different categories of needy people.
Because the United States has not strategically planned aging well, aging-associated medical costs are so high, and good alternatives for ill aging people may no longer be available, Medicaid for the “Aged Blind and Disabled” in North Carolina is now accessed by many middle class, and even upper middle class families. If skilled nursing care is needed, the Medicaid program now finances approximately 51% of that care, with Medicaid paying 62% of U.S. nursing home care expenses.
The poor frequently do not have the lobbying power that wealthier sectors of society enjoy. Public insurance programs like Medicare allow users to keep their family assets that are not paid into premiums. Medicare’s earlier use by a more advantaged sector of society on average, has enabled this program to be better defended over time, with more reasonable results. Medicaid, originally designed for the poor, retains harsher trade-offs.
Medicaid Estate Recovery, required by federal law in all 50 states, requires state governments to count the dollars spent on Medicaid recipients. In general, if significant value (a senior’s home for example) is left in the Medicaid recipient’s estate after the senior passes away (or if the senior is married, after the senior’s spouse passes away), federal law requires the state to attach the Medicaid bill to the estate during probate proceedings. A home may need to be sold to pay all or part of the Medicaid bill, with the adult children or other intended heirs then unable to receive what then goes to the state. Attempts to limit such harsh results by creating affordable federal government-sponsored long term care (LTC) insurance have historically failed.
THE MEDICAID ASSET PROTECTION TRUST
A MAPT is a legal tool designed to more reliably assure that a senior’s assets will reach the senior’s intended heirs or beneficiaries, such as the senior’s children or grandchildren, and will not be potentially lost to future aging costs or later financial problems. Donating properly to a MAPT is designed to remove that donation out of the donor’s estate for creditor liability purposes (future creditors will likely not be able to reach those assets), while keeping those assets protected against creditors that children, grandchildren, or other beneficiaries may encounter, either at the time of donation, or in the future.
Federal Medicaid law treats contributions to an irrevocable MAPT like it treats gifts out of a Medicaid applicant’s estate; both are subject to Medicaid’s 5 year look-back rules. If a Medicaid applicant (or his or her spouse) has gifted out of the applicant’s estate within 5 years prior to the Medicaid application, Medicaid issues a potentially costly “gift sanction” to that applicant, where that applicant will be disqualified during the “Medicaid penalty period” from receiving Medicaid long term care benefits for a certain number of months. North Carolina uses a penalty divisor [$6,818 in 2020] to determine the number of months a Medicaid gift sanction recipient must private pay a skilled care facility or provider, before Medicaid will pay.
For example, a North Carolina Medicaid applicant receiving nursing home care, who has either gifted $100,000 to a child, or donated $100,000 to an irrevocable trust benefiting that child, three years before applying for Medicaid long term care benefits, must private pay that nursing home for $100,000 / $6810 = 14.68 months before being eligible for Medicaid benefits.1
WHEN SHOULD I CONSIDER A MAPT?
You do not have any significant creditor obligations, or a liability event has not occurred against you that would create a reasonably foreseeable creditor obligation;
Your family is stable, your beneficiaries care about you, and are mature decision makers;
You have enough assets to provide for your own current and future retirement and care needs, so that you would otherwise consider making a gift(s) of your assets to children, grandchildren, or other beneficiaries;
You like to plan early, and you (and your spouse) are still relatively healthy;
You have been diagnosed with a progressive disorder that may eventually require skilled nursing care, but you have enough assets for you (and your spouse) so that you do not believe that either of you will need Medicaid (remember that a MAPT can protect a family against most types of future financial creditors, not just Medicaid);
You have been diagnosed with a progressive disorder that may lead to, or has required, skilled nursing care, but you have enough assets or long term care insurance to pay for care for up to 5 years. 2
You own real estate (a family farm or ranch, beloved vacation home or rural recreational property) not just financially valuable, but emotionally valuable also, that you want to protect for the family long term;
You want to make sure that the children or grandchildren will have enough for their future education;
You want to make sure to provide for a special needs child or grandchild (a MAPT may include special needs trust provisions for a special needs or disabled beneficiary.)
WHY DONATING THROUGH A MAPT MAY BE SMARTER THAN GIFTING
Unlike with gifting, a MAPT may be structured so that a senior or senior couple may have the enforceable legal right to occupy and use real estate donated to the MAPT as long as they live, while that real estate remains asset protected;
Unlike with gifting, a properly-structured MAPT can greatly lower future capital gains taxes on appreciated assets donated to the MAPT, or on assets which appreciate during the senior’s remaining lifetime after being donated to the MAPT, if children or grandchildren later sell those assets (step-up in basis);
Unlike with gifting, the written terms of the MAPT, created by the senior donor(s), dictate how a donation to the MAPT must be used by children and grandchildren. Family or professional trustee(s) chosen by the senior asset donors, will be left in charge to make sure that donated assets are used wisely over time as the donors intended;
Unlike with gifting, assets which remain in the MAPT continue to be protected against future creditor problems that beneficiary children or grandchildren could encounter. In this way, a beloved family farm or favorite mountain or lake home may be protected well into the future for children and grandchildren.
IF I ALREADY HAVE SOME HEALTH PROBLEMS, OR AM ALREADY AGE 65, 70, OR ABOVE, CAN A MAPT POTENTIALLY STILL BE HELPFUL?
A large percentage of seniors never use Medicaid or other government long term care programs. Even though approximately 52% of people turning age 65 will need some type of long term care services in their lifetime, that figure implies that 48% do not. Of those who need long term care, approximately 48% need such care for one year or less. Even though 37% of people will need some type of nursing facility or assisted living care, the majority of us will remain home as we age. And when we do remain home, where 65% of us will need some type of care, the majority of home care we receive, 59%, will be unpaid care (very frequently by family members) not covered by Medicaid. 3
In addition, because private pay residents are typically much more profitable for skilled nursing facility owners and investors (or provide more operating and infrastructure revenue to non-profits), the more upscale facilities may not accept Medicaid-financed residents (with much lower reimbursement rates) at all. Many other better quality facilities maintain a required private pay period (one year for example) before they will allow a private pay resident to convert to Medicaid financing. Available “Medicaid beds” are in very short supply, with facilities accepting more Medicaid residents often associated with lower-quality care, frequently because they are not able to afford as many nurses and CNAs (certified nursing assistants) or other nursing aids.
Thus seniors and their families desiring higher-quality skilled nursing care can expect to finance some significant portion of that care themselves. If set up properly (an elder law attorney should assist), Medicaid may credit such time spent private paying a skilled nursing facility as paying off its gift sanction.
Once any discrete donation an individual or couple has transferred to a MAPT (without Medicaid being used for long term care expenses) has “aged” within the MAPT for five years, that donation is then “safe” from becoming a Medicaid gift sanction issue again. For example, a couple in their late 60s, Matt and Jane, established a MAPT benefitting their two adult daughters on January 1, 2020. They donate $50,000.00 to the MAPT on March 15, 2020, $15,000 on December 28, 2021, then $15,000.00 on December 29, 2022. If Jane unexpectedly developed cancer and needed Medicaid to start paying for skilled nursing facility care on April 7, 2027, the $50,000 year 2020 donation, and the $15,000 2021 donation, or $65,000 total, would be “safe” from causing a Medicaid 5 year look-back problem, and can likely continue to be safely stored in the MAPT for the benefit of Matt and Jane’s two children. 4
The more a MAPT is front loaded, or funded early, the safer those early donations will be against creating a later Medicaid gift sanction. Although each family situation is different, A MAPT may prove useful in many cases. An experienced elder law attorney can review details and provide valuable advice specific to you and your family.
WHAT IF I MISCALCULATE AND NEED MONEY BACK FROM THE MAPT TO PAY FOR FUTURE CARE?
Medicaid allows others such as the Medicaid applicant’s children, to voluntarily “cure” a gift sanction by gifting back assets;
A MAPT may be designed so that the trustee and family beneficiaries can later voluntarily decide to “unwind” the MAPT, and then gift back needed assets to the senior donors, as long as those assets have remained in the MAPT;
Even if the MAPT is not unwound, assets that a lifetime beneficiary receives from the MAPT may free up enough of that beneficiary’s own assets to allow the beneficiary to gift back assets to the senior donor, in order to cure a Medicaid gift sanction.
Notes:
Note that the number of days is determined here by multiplying .68 x 31 days = 21.08 = 21 days, i.e. the Medicaid applicant must private pay the nursing home for 14 months and 21 days before he or she would qualify for Medicaid benefits.
In North Carolina, a Medicaid program called “Special Assistance” may also pay for lower level “assisted living” care. Although income must go to the facility, a Medicaid for skilled nursing care applicant in NC does not have a similar monthly income cap. Medicaid’s Special Assistance program for lower level assisted living care challenges applicants with monthly income restrictions low enough that many people with enough assets to contemplate establishing a MAPT have correspondingly high monthly income also, and will not qualify for Special Assistance.
A patchwork of Medicaid-financed home care skilled nursing assistance may be available in North Carolina, through the PACE or CAP programs. What’s available depends on the senior’s county of residence. In Forsyth County (the author’s county of residence) for example, CAP-DA home care is technically available, but a current applicant may wait one year or more to receive such services, with the skilled nursing staffing needed to run this program effectively in short supply. CAP services may be much more available in adjoining (and more rural) Yadkin County.
This conclusion assumes that the family will be able to private pay less than three months of facility care, in order to pay off any Medicaid gift sanction created because of the $15,000 MAPT donation made less than 5 years before Jane entered the skilled nursing facility on April 7, 2017.
If you are a special needs parent, you are likely already thinking about how to best protect your special needs child throughout life. Fortunately, it is not difficult to put estate planning protections in place which can give your special needs child, and the rest of your family, a more secure financial future.
Special Needs Trusts (SNTs) are designed to hold assets to benefit a special needs child or adult, without disrupting government benefits (such as Medicaid or SSI) which the child may either receive now, or may need later. But one SNT is not just like another SNT — in my legal practice, I draft 5 different types of SNTs designed to comply with different federal and state laws. Each type of SNT has different strengths and weaknesses, and may be appropriate for some situations but not others.
A TESTAMENTARY SNT, OR A 3RD PARTY SNT, KEEPS THE PARENT’S ASSETS WITHIN THE FAMILY
A parent who is a better advance planner can choose between the two SNT types which provide the most flexibility to parent and child, and help insure that the parent”s hard-earned assets stay within the family.
When I do estate planning for families with minor children (including where the children do not have known special needs), I typically recommend to parent(s) that we add a “testamentary” family trust benefitting the children to to a parent’s will or trust documents. If the parent(s) passes away, the parent’s chosen caretaker (trustee) then steps in to manage the money the parent left behind in “trust” for the children, following the instructions in the parent’s will (or revocable trust) that the parent left for the financial caretaker.
If the parent has passed away after previously purchasing life insurance benefitting the family trust, the life insurance payout is added to the trust, which can help insure that enough funds are left behind to take care of the children’s education and other needs, into adulthood (and beyond if needed.) These testamentary family trust funds are asset protected, which means that any future creditors cannot get to assets left for the children, making these trusts much safer than leaving benefits behind “in cash.”
“Testamentary” means that the trust starts at the parent’s death. When one or more of the children have special needs, I can set up specific “testamentary SNT” language within the parent’s will or revocable trust document, which means that any trust money that later flows to the special needs child complies with federal and state laws, so that the money can be used to pay for the special needs child’s “supplemental needs” (expenses that Medicaid, SSI, or other government programs do not pay for.)
Even if the government program’s rules provide that the child’s assets must remain under a strict “asset cap” ($2,000 or less for example), the testamentary SNT makes the $10,000, $75,000, $500,000 (or more) that the parent leaves for the special needs child “noncountable.” In other words, the SNT assets are counted by the government as “zero dollars,” and do not count against government benefit program asset limits.
Funds which flow into a child’s asset protected testamentary SNT remain noncountable no matter how old the child is when the parent passes away. And, when the special needs child passes away himself or herself in time, any funds left behind in the child’s SNT may be directed to other family members, such as the SNT child’s own children, or the special needs child’s brothers and sisters, so that the parent’s funds remain in the family.
A parent or other relative who wants to start setting aside funds for a special needs child during the giver’s lifetime (which can start benefitting that child right away)may set up a 3rd party SNT. The 3rd party SNT can make the parent’s or other relatives assets donated to the SNT asset protected immediately. These SNT funds will also remain asset protected even if the special needs child later has legal or financial problems. A 3rd party SNT may protect assets for a special needs beneficiary of any age. The 3rd party SNT does not have a mandatory government payback provision, so that if the SNT beneficiary passes away unexpectedly, any funds remaining in the special needs child’s SNT may then be used to benefit other family members. And, I can set up the parent or donating relative’s estate documents so that any additional funds left for the special needs child at the giver’s death will be directed into that child’s existing 3rd party SNT.
IF A PARENT DOES NOT PLAN, THE “SELF SETTLED” OR “D4A” SNT PROVIDES MORE LIMITED BENEFITS
As a special needs attorney, it is not uncommon for me to receive an urgent call from a special needs person, or their advocate, letting me know that the special needs person has inherited, or is about to inherit, a parent or relative’s assets, but is now at risk of being kicked off Medicaid or SSI for having too many assets. In these cases, the parent or relative may have wanted to benefit the special needs person, but did not plan well, thus I now have to make up for lost opportunities. If the special needs individual, or their advocate, is not aware that emergency options exist for making inherited assets noncountable, an unfortunate special needs person may lose access to needed government benefits, or needlessly private pay down the inheritance to become asset qualified again for government benefits programs.
In North Carolina, an “NC ABLE” account may now be used to make inherited assets noncountable, as long as the inherited assets (along with any other assets placed into the ABLE account within a year’s time) do not rise above the NC ABLE program’s $15,000 annual contribution limit.
If the inheritance is larger than $15,000, using an NC ABLE account (to make inherited assets noncountable against a government benefits program’s asset cap) may no longer be a good option. The “self settled” d4A SNT (named for the federal rules which authorize it), may be available in these cases, but the d4A SNT provides more limited benefits than a testamentary SNT or 3rd party SNT would have provided.
Unlike the testamentary or 3rd party SNTs discussed above, under North Carolina trust law, the “self settled” (meaning a person sets up a trust with the person’s own money that later benefits that same person) d4A SNT is not asset protected. Thus, for example, if the d4A special needs beneficiary is a licensed automobile driver but has a car accident causing harm to others that is not fully insured, their SNT assets may potentially be tapped to help pay an accident award to an opposing attorney and their clients.
The d4A SNT is also age-limited–it cannot make a special needs beneficiary’s assets noncountable once the special needs beneficiary reaches age 65.
Federal and state law also requires the d4A to be drafted with a government payback provision. This means that if a special needs beneficiary passes away, any funds left in their SNT must first be used to pay back the government for the money the government expended on the special needs beneficiary, before any other family members or other “successor beneficiaries” may use these funds. Realistically, the government’s care bill may insure that no remaining funds reach other potentially needy family members.
THE D4C POOLED SNT IS NOT AGE LIMITED, BUT IT ALSO CONTAINS A MANDATORY POOLED TRUST FUND PAYBACK PROVISION AND GOVERNMENT PAYBACK PROVISION
If a special needs beneficiary who inherits funds is age 65 or older, as the attorney, I may be able to make those funds noncountable against a government benefits program’s asset cap (as long as the beneficiary was disabled before reaching age 65) by using a “d4C” pooled SNT.
The pooled d4C SNT “pools” the funds benefitting a special needs beneficiary with the funds benefitting other special needs beneficiaries (but separate accounting is provided for each individual beneficiary.) In North Carolina, mandatory payback provisions must be included within these trusts which provide that if a special needs beneficiary passes away, up to 50% of their remaining SNT assets may be directed back to benefit other pooled fund special needs beneficiaries, with the state agency that benefitted the deceased special needs individual potentially receiving funds as well to reimburse for that individual’s state-supplied care.
CONCLUSION
Parents (and other relatives of special needs persons) who plan in advance do not leave their special needs child’s future to chance. Parents who plan may choose from testamentary or 3rd party SNT options that help insure that the funds that they leave for their special needs child will remain asset protected regardless of that child’s age, and will remain in the family to benefit other loved ones (instead of being directed back to the government or others) if their special needs child unexpectedly passes away.
A new statute added to North Carolina’s omnibus COVID-19 pandemic legislation includes new provisions that temporarily allow remote notarization of legal documents until August 1, 2020.
Before the new temporary law took effect, the NC notary statutes required notaries to be in the physical presence of someone signing a legal document. With the COVID-19 social distancing restrictions and other precautions, elder law attorneys and other professionals were having a great deal of trouble getting legal signatures from clients in “locked” facilities such as assisted living facilities and nursing homes.
We have added a remote video notarization service to our telephone and video appointment services, to make sure that all of our elder and special needs, and estate planning clients can be fully served while COVID-19 precautions are recommended. If video is not available at a client’s residence, and that cannot be corrected, we have other “safer signing” procedures available which could then be used to take care of that client’s needs.
Already thinking about going back again, I have been playing my own video of a recent trip a friend (Boater X) and I made to the Whitewater Chattooga Wild and Scenic National River in northern Georgia, where much of the 1972 Burt Reynolds whitewater disaster thriller “Deliverance” was filmed. It helps me to keep positive during Coronavirus 2020 to look through old travel photos and videos, and plan future trips in my mind to be taken after Bad Boy Coronavirus has hopefully been tamed.
If you are still physically able to get out there, where would you like to go next? I am sharing my “Return to Deliverance River” video below, in case you too are interested in seeing this unique and beautiful area. f you are not already a whitewater boater, local Chattooga rafting companies near Clayton, Georgia offer guided trips to visitors on the whitewater Chattooga National Wild and Scenic River.
Whitewater Kayaking the Chattooga Wild and Scenic National River, Georgia, United States (video with audio)
American Whitewater rated Class III-IV+ ; IV-IV+ Five Falls Section. Level 2.0 feet on the paddler gauge.
Gesturing with finz instead of handz, dolphin-dude Boater X guides me, after a 22 year absence, through this classic Southeastern whitewater run, where many of the whitewater scenes for the Burt Reynolds movie “Deliverance” were filmed.
Watch for Boater X’s Jedi line through Corkscrew!
Rapids include Bull Sluice (single drop line), Woodall Shoals (right sneak), Seven Foot Falls (right sneak), Five Falls Entrance, Corkscrew, Crack-In-The-Rock, Jawbone (mandatory portage) and Sock ‘Em Dog! (Puppy Chute Sneak.) Plus, we climb up a beautiful incoming waterfall.
The Chattooga National Wild and Scenic River shares with us awesome power and delicate beauty, all interwoven within the same miles.
Viruses, as a group, are 1.5 billion years old, predating humans (200,000 years old) by approximately 1,499,800,000 years. Humans live intertwined with viruses in a complex web of life. As one looks at tinier and tinier pieces, the building blocks that make up unbelievably small viruses (RNA, DNA, proteins) are the same building blocks that make up humans.
This relationship, historically, has not always been bad for humans. James Shapiro, a University of Chicago microbiologist notes that “we wouldn’t be here without them.”[i] Researchers speculate that as a part of the evolution of mammals more than 100 million years ago, a viral infection in a primitive mammal uploaded a gene for the protein syncytin that helped the mammalian placenta to evolve.[ii]
Viruses use the protein syncytin to fuse cells together, so that viruses may move from one host cell to the next. In mammals, that very same protein is the actual substance that fuses the placental cells (connected to the fetus through the umbilical cord) with the mother’s uterine cells, allowing vital nutrients to be transmitted through those tissues, and the human fetus to develop and grow.[iii] Without that long ago viral infection in a mammalian ancestor, no human child may have ever blinked their eyes open on a warm summer morning, to greet a bright new day.
Modern humans like to believe that we are in control of most things, but the COVID-19 pandemic has abruptly reminded us that we are still subject to the laws of nature. Although the illness, deaths, and disruption created by COVID-19 may seem unprecedented to modern humans right now, in biological time, periodic waves of both viral and bacterial infections have ebbed and flowed, much like the tides, for as long as humans have existed here on this earth.
But humans have made great progress in preventing, treating, or curing disease, and should continue to do so. When my grandmother Marie Oliver Vance Zipp was born in Texas in 1911, her life expectancy was then 53 years. Her later husband, my grandfather Dr. Raymond Zipp, treated childhood and adult diseases like polio, pertussis (whooping cough), and tuberculosis in the small South Texas town of Edna, Texas, where my mother Valerie grew up, and where I later graduated from high school. These diseases had no effective preventative vaccine, or treatment back then.
A female child now born in 2017 (latest figures available) expects to live for 81 years, 28 years longer than in my grandmother’s time. And the diseases above that my grandfather battled at close range, are now under control in this country. Scientific research has brought us so many more years of life in a relatively short time.
In the early 1980s, my first biology professor at the University of Texas at Austin died of the human retrovirus AIDS while in his 40s, when I was still an undergraduate biology student. Not unlike our 1960s space program that eventually brought us to the moon, the focused time, attention, and money brought to bear against that AIDS crisis eventually yielded great benefits. If my first biology professor had contracted AIDS now, the antiretroviral therapies gleaned from that global research response could have allowed him to live a significantly longer productive life.
With the focused financial and scientific attention now being directed towards COVID-19, we can better respond to this new crisis also, hopefully reducing transmission rates while COVID-19 eventually runs its course. Research advances are already coming. Just this week, my old molecular biology professor at the University of Texas, Dr. Matthew Winkler, announced that one of the biotech companies he founded, Asuragen, has developed molecular diagnostics technology which can now be used to develop more sensitive and accurate COVID-19 molecular diagnostic tests.[iv]
Humans have big brains, with much more capacity than we need for just survival. We have plenty of room to hold worry, and stress, within our extra cognitive spaces, but that can be counterproductive to our health — worry and stress actually depress our immune systems,[v] making us more vulnerable to infections like COVID-19.
The more normal we can make life while it is not normal, the more we can remember things that make us laugh, and the more we can go back to our own personal ways to exercise and reduce stress, the healthier we will be. And when we can feel a little better, the more we will realize that this too shall pass.
WTOB FM/AM Radio in Winston-Salem, NC interviews elder and special needs law, and estate planning attorney Vance Parker as he explains how an asset protection trust should be set up early in North Carolina, to better create a family “nest egg” of assets free from future medical creditors, Medicaid estate recovery, or other future financial problems.
For more information on creating a North Carolina asset protection trust, please see attorney Vance Parker’s article:
Vance talks with WTOB Radio in Winston-Salem, NC every Tuesday at 4:38 pm, educating the public about elder and special needs law, and estate planning topics.
Elder Abuse: VANCE PARKER, JD, MBA with Sgt. C.P. Sayers, Community Educator, Forsyth County Sheriff’s Department
July 14, 2016 – 10:30 am, Bermuda Village
August 3, 2016 – 7:00 am, Rotary Club of Clemmons
August 19, 2016 – 2:00 pm, The Shepherd’s Center
Author Biography
Vance R. Parker practices elder and special needs law, and estate planning law at Vance Parker Law, PLLC in Winston-Salem, North Carolina. He is a member of the National Academy of Elder Law Attorneys (NAELA), ElderCounsel, The North Carolina Bar Association Elder and Special Needs Law Section, the North Carolina Bar Association Estate Planning and Fiduciary Law Section, The North Carolina Bar Association Real Property Section, the Financial Planning Association (FPA), and is accredited to practice before the Department of Veterans Affairs (VA.)
Vance holds Doctor of Jurisprudence (JD), Master of Business Administration (MBA), and Bachelor of Arts (BA) in Biology with Honors degrees from the University of Texas at Austin, and holds a Master of Arts in Teaching (MAT) degree from Salem College, Winston Salem, North Carolina.
Vance has a particular passion for elder and special needs law. As an honors biology graduate at the University of Texas at Austin, and a former biomedical company executive, he understands the medical conditions that seniors and special needs individuals face. “I practice elder and special needs law to honor my parents and grandparents, whose quiet integrity and wisdom still guide my life, and whose love never fades,” he says.
Vance gained inspiration for his special needs focus within his legal practice from the special needs students he assisted while teaching Honors Chemistry, Biology, and Scientific Visualization in the Forsyth County and Guilford County, North Carolina public school systems.
The readers of Triad City Beat magazine voted Vance Parker Winston-Salem, North Carolina’s “Best Family Law Attorney” and Vance Parker Law, PLLC “Best Law Firm–Runner Up” in its 2020 “Best of the Beat” reader poll. The Better Business Bureau of Northwest North Carolina rates Vance Parker Law, PLLC “A+.”
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