Autism Patients Share Common Pattern Of Brain Inflammation

From Sarah Klein, Senior Editor, Health and Fitness, for the Huffington Post;

While science has yet to pinpoint the exact cause of autism, a new study reveals that the brains of people with the disorder share a common pattern of inflammation from an overactive immune response. 

Johns Hopkins and University of Alabama at Birmingham researchers analyzed data from autopsied brains of 72 people, 32 of whom had autism. In the brains of people with autism, they found genes for inflammation permanently activated in certain cells. The study, published in the online journal Nature Communications on Dec. 10, is the largest so far of gene expression in autism. 

"There are many different ways of getting autism, but we found that they all have the same downstream effect," Dan Arking, Ph.D., an associate professor in the McKusick-Nathans Institute for Genetic Medicine at the Johns Hopkins University School of Medicine said in a statement. "What we don't know is whether this immune response is making things better in the short term and worse in the long term." 

Inflammation is not likely a root cause of autism, but a consequence of a gene mutation, Arking stressed. To better understand inflammation's effects, researchers will want to find out whether treating it makes autism symptoms any better, he said.

Go here to read the rest of the article.  

Nursing Home Worker Faces Homicide Charges in Violent Death of Resident

An alleged physical altercation between a New York nursing home aide and a resident has reportedly resulted in the resident's death.  Cherrylee Young, 41, now faces negligent homicide charges and is scheduled to appear before a grand jury.  According to authorities the physical altercation caused the resident to fall and fatally impale himself on part of a table. 

According to the New York Times, the fight broke at the 46-bed University Nursing Home in the Bronx on December 8th, allegedly after 77-year-old Frank Mercado repeatedly set off his bed alarm.  Workers reportedly found Young and Mercado on the floor, with Young repeatedly punching the resident.

The Medical Examiner determined that a table was knocked over during the altercation, and a rod attached to the table  tore the resident's rectum, causing fatal internal bleeding. According to the Daily News, Police claimed that it took hours for nursing home staff to notice Mercado's deteriorating health and send him to the hospital.

Young, arrested Dec. 9, appeared Monday in Bronx Criminal Court, claiming that Mercado attacked her and that she acted in self-defense. She agreed to testify before a grand jury, but said she will plead not guilty if indicted for negligent homicide. The charges could change depending on the grand jury's findings, according to Bronx Assistant District Attorney Nancy Borko.

University Nursing Home released a statement expressing “profound regret” over the incident, and offering condolences to the family of Mercado, a four-year resident.  "The University Nursing Home, which has a five-star rating from Medicare.gov and an exemplary healthcare history, is assisting the NYPD and the medical examiner in their investigation of this matter," the statement read. 

Advocates Seek Better Notification for Those Nearing Medicare Eligibility

Forty-four organizations, including the Medicare Rights Center, urged the Department of Health and Human Services, the Department of Labor and the Social Security Administration to implement a system for notifying individuals approaching Medicare eligibility to inform them of their rights and obligation as they near enrollment.

The organizations asked that the agencies to ensure that all individuals nearing Medicare eligibility receive timely and complete notice about Medicare enrollment. According to the letter, such a system will ensure that fewer people new to the Medicare program are saddled with higher health care costs or go without needed health care services due to gaps in coverage and late enrollment penalties resulting from missing enrollment windows.

In particular, the letter suggests the following:

• Provide notice about nearing Medicare eligibility to all individuals turning age 65;

• Ensure that notices include key messages about coordination of benefits and delaying enrollment;

• Carefully engage other messengers, including health plans, employers and states;

• Strengthen notice for those who are auto-enrolled into Medicare; and

• Develop notices and educational materials in additional languages and alternate formats.

The Medicare Rights Center is a national, nonprofit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities through counseling and advocacy, educational programs and public policy initiatives.  Click here to read the letter.

A Holiday Gift from an ABLE Congress!

Sara Wolff (center) calling on Congress to allow disabled
 Americans to save and still receive benefits like
 Social Security Disability Insurance payments and Medicaid

The following is a reprint from the blog of Michael Morris, the Executive Director of the National Disability Institute (NDI) in Washington:

Last night, the U.S. Senate overwhelmingly passed (76-16) the Achieving Better Life Experience (ABLE) Act. The bill now goes to President Obama for signing into law. Not since the passage of the Americans with Disabilities Act (ADA) in 1990 has Congress moved forward with a change in public policy as important and unprecedented as ABLE. The ABLE Act represents the first time there is clear recognition and sensitivity to the extra costs of living with a disability for children and adults with significant disabilities and their families. Every day, all across America, parents raising a child with a disability are confronted with costs not covered by insurance and various public assistance or benefits. The costs are as varied as modifying a home to be more accessible to using adaptive equipment and assistive technology that enhances learning, mobility, hearing and the ability to use a computer, all which improve quality of life experience. 

For adults with significant disabilities, extra costs can also include additional hours of personal assistance support to get out of bed, help with cooking and other daily living needs, as well as accessible transportation, housing and employment supports. 

The ABLE Act responds to these significant daily and weekly out-of-pocket expenses by creating, for the first time, a tax-advantaged savings account (an ABLE account). This account would cover the extra costs of living with a significant disability without adversely affecting continued eligibility for government benefits such as Supplemental Security Income (SSI) and Medicaid (health care). 

No piece of legislation before this Congress had more cosponsors – 380 House Members and 74 Senators – or received more bipartisan support across both the Democratic and Republican parties. ABLE is, above all, about fairness. Families raising children with significant disabilities do not want a handout and public assistance that comes with a life sentence in poverty. The disability community wants a hand up so they can be included in the economic mainstream as productive and valued members of inclusive workplaces and communities. ABLE offers, for some individuals and families (eligibility is limited to age of onset of disability by 26 years of age), an opportunity to plan for the future by setting aside up to $100,000 for expenses that may accrue over a lifetime, without the interest being taxed when the funds are removed. For some five million plus individuals and families who are likely to establish an ABLE account in the future, it is truly an early holiday present.

Thank you to Congress for passing the ABLE Act and improving the financial security of millions of Americans with significant disabilities and their families.

The National Disability Institute is a national not for profit corporation that is dedicated to "changing thinking and behavior that advance the financial stability and economic strength of persons with disabilities across the country.  Leveraging public and private resources, NDI is uniquely and singularly focused on promoting REAL ECONOMIC IMPACT for persons across the full spectrum of disabilities."  NDI's Real Economic Impact Blog is just one part of that mission.

Let us all join in the growing chorus of voices thanking Congress for this holiday gift.  You can read more about the ABLE Act here.  This blog will later carry a final description of the law as signed by the President.

Hasbro Creates Online Program for Children With Disabilities

Hasbro, Inc.,  creator of Mr. Potato Head, Play-Doh, Monopoly, and Connect 4, is releasing a series of online videos and other tools to help children with disabilities effectively engage with both toys  and other children.

The project, “ToyBox Tools”, “is designed to help kids learn what each toy is all about, how to put the item together and presents children with alternative ways to engage independently or with peers,” according to an article on DisabilityScoop.com. According to the Hasbro website:

"Hasbro’s fundamental mission is to bring joy and play to children and their families around the world. But for some children play can be challenging. For children with a developmental disability, play isn’t always accessible out of the box, relegating countless toys to the back of the closet or the donation bin. More importantly, the joy and benefits that play can bring, the connection between peers, siblings and other generations may be lost.” 

The initiative, “emerged from employees at Hasbro concerned that kids with developmental disabilities were losing out on valuable opportunities to connect with others through play, the company said.” “Believing that we could do more, a passionate group of Hasbro employees from across the Company, came together to team up with Autism Project – a long term philanthropic partner of the Hasbro Children’s Fund, to figure out a way to help,” said Hasbro’s site. The team, Hasbro said, “learned that many classic Hasbro toys were being widely used by teachers and occupational therapists working in the field and that they were creating their own supportive play tools which provided structure that is critical to the way certain children manipulate concepts to help them understand play.” The program is available online for free, and “Hasbro officials described the effort as a pilot program and said they will continue to refine the tools.” 

See more here. 

Nearly Forty Percent of Elderly Suffer At Least One Disability

Download Percentage of  County Population Age 65
 and Over with a Disability: 2008-2012

Nearly 40 percent of people age 65 and older had at least one disability, according to a U.S. Census Bureau report that covered the period 2008 to 2012. Of those 15.7 million people, two-thirds of them say they had difficulty in walking or climbing.

Difficulty with independent living, such as visiting a doctor’s office or shopping, was the second-most cited disability, followed by serious difficulty in hearing, cognitive difficulty, difficulty bathing or dressing, and serious difficulty seeing.

While populous states such as California, Florida, New York and Texas had the largest number of older people with a disability, high disability rates were seen in Southern counties, especially in central Appalachia and the Mississippi Delta.

Older Americans With a Disability: 2008-2012, a report based on data collected during the American Community Survey, examines disability status by age, sex and selected socio-economic characteristics, such as marital status, living arrangement, educational attainment and poverty status.

“The statistics provided in this report can help anticipate future disability prevalence in the older population,” said Wan He, a demographer from the Census Bureau’s Population Division. “The figures can be used to help the older population with a disability, their families, and society at-large plan strategies and prepare for daily life tasks and old-age care.”

The following are some of the statistical highlights gleaned from the report:

• More than half (54.4 percent) of the older population who had not graduated from high school had a disability, twice the rate of those with a bachelor’s degree or higher (26.0 percent). This inverse relationship between educational attainment and likelihood of having a disability was found across age, sex, race and Hispanic origin.

• More than one-third of those 85 and older with a disability lived alone, compared with one-fourth of those age 65 to 74.

• About 13 percent of the older household population with a disability lived in poverty; in contrast, 7 percent of those without a disability were in poverty.

• The older population with a disability was disproportionately concentrated among those 85 and older. This group represented 13.6 percent of the total older population but accounted for 25.4 percent of the older population with a disability.

• Women 65 and older were more likely than men 65 and older to have five of the six types of disability included in the American Community Survey, especially ambulatory difficulty. Older women’s higher rates for disability are, in part, because women live longer.

• Older men’s higher likelihood for having a hearing disability may reflect the lifelong occupational differentials between men and women, where men may be more likely to have worked in industries that cause noise-induced hearing loss.

• Disability rates were lower for married older people than for those widowed or in other categories of marital status.

Most long term care insurance policies and benefits require that the insured be unable to perform without assistance two Activities of Daily Living (ADL's), such as transferring, toileting, bathing, continence, dressing and eating. If you have such a policy you should retain a copy of the actual policy in order to see for yourself how the benefit "triggers" and what ADL limitation is described.  A single disability may or may not impair more than one ADL.

The Division of Behavioral and Social Research at the National Institute on Aging of the National Institutes of Health commissioned this report and also supports other Census Bureau reports on aging research.

Long Term Care Facilities Must Recognize and Respect Same Sex Marriages Under Proposed Rule

Long-term care facilities are required to recognize certain same-sex marriages in order to participate in Medicare and Medicaid under a recently proposed rule.

The rule would also apply to hospices and other types of providers and suppliers. The 26-page rule and policy statement was drafted in response to the 2013 United States v. Windsor Supreme Court ruling, which struck down portions of the Defense of Marriage Act and paved the way for gay married couples to be recognized under federal law.

Among the conditions of participation related to long-term care is a section on resident rights, including rights to communicate with and have access to people “inside and outside a facility.” A proposed addition to this section would specify that a same-sex spouse has the same rights as opposite-gender spouses, if the same-sex marriage was valid in the jurisdiction where it took place.

A proposed revision for hospices would ensure that a same-sex spouse can make the decision to terminate care for an incapacitated person.

“Our goal is to provide equal treatment to spouses, regardless of their sex, whenever the marriage was valid in the jurisdiction in which it was entered into, without regard to whether the marriage is also recognized in the state of residence or the jurisdiction in which the healthcare provider or supplier is located,” the Centers for Medicare & Medicaid Services writes in the proposed rule.

The proposed rule is available here. It is scheduled for publication in the Federal Register. Comments can be submitted through Feb. 10.

Questions to Ask Before Serving as Trustee

Being asked to serve as the trustee of the trust of a family member is a great honor. It means that the family member trusts your judgment and is willing to put the welfare of the beneficiary or beneficiaries in your hands. 

But being a trustee is also a great responsibility. You need to accept your responsibility fully informed and with your eyes wide open. Here are six questions to ask before saying "yes":

• May I read the trust? The trust document is your instruction manual. It tells you what you should do with the funds or other property you will be entrusted to manage. Make sure you read it and understand it. Ask the drafting attorney any questions you may have.

• What are the goals of the grantor (the person creating the trust)? Unfortunately, many trusts say little or nothing about their purpose. They give the trustee considerable discretion about how to spend trust funds with little or no guidance. Often the trusts say that the trustee may distribute principal for the benefit of the surviving spouse or children for their "health, education, maintenance and support." Is this a limitation, meaning you can't pay for a yacht (despite arguments from the son that he needs it for his mental health)? Or is it a mandate that you pay to support the surviving spouse even if he could work and it means depleting the funds before they pass to the next generation? How are you to balance the needs of current and future beneficiaries? It is important that you ask the grantor while you can. It may even be useful if the trust’s creator can put her intentions in writing in the form of a letter or memorandum addressed to you.

• How much help will I receive? As trustee, will you be on your own or working with a co-trustee? If working with one or more co-trustees, how will you divide up the duties? If the co-trustee is a professional or an institution, such as a bank or trust company, will it take responsibility for investments, accounting and tax issues, and simply consult with you on questions about distributions? If you do not have a professional co-trustee, can you hire attorneys, accountants and investment advisors as needed to make sure you operate the trust properly?

• How long will my responsibilities last? Are you being asked to take this duty on until the youngest minor child reaches age 25, in other words for a clearly limited amount of time, or for an indefinite period that could last the rest of your life? In either case, under what terms can you resign? Do you name your successor, does the trust  or does someone else?

• What is my liability? Generally trustees are relieved of liability in the trust document unless they are grossly negligent or intentionally violate their responsibilities. In addition, professional trustees are generally held to a higher standard than family members or friends. What this means is that you won't be held liable if for instance you get professional help with the trust investments and the investments happen to drop in value. However, if you use your neighbor who is a financial planner as your adviser without checking to see if he has run afoul of the applicable licensing agencies, and he pockets the trust funds, you may be held liable. A well-respected Massachusetts attorney who served as trustee on many trusts used a friend as an investment adviser who put the trust funds in risky investments just before the 2008-2009 stock market crash. The attorney was held personally liable and suspended from the practice of law. So, be careful and read what the trust says in terms of relieving you of personal liability.

• Will I be compensated? Often family members and friends choose to serve as trustees without compensation. If the duties are especially demanding, however, it is appropriate for trustees to be paid for service. The question, then, is how much. Professionals generally charge an annual fee of 1 to 2 percent of assets in the trust. So, the annual fee for a trust holding $1 million would be $10,000. Institutions and professionals generally charge a higher percentage for  smaller trusts and a lower percentage for larger trusts. If you are performing all of the work for a trust, including investments, distributions and accounting, it would be inappropriate to charge a similar fee. If, however, you are paying others to perform these functions or are acting as co-trustee with a professional trustee, charging this much may be seen as inappropriate. A typical fee in such a case is a quarter of what the professional trustee charges, or .25 percent (often referred to by financial professionals as 25 basis points). In any case, it's important for you to read what the trust says about trustee compensation and discuss the issue with the grantor.

If after getting answers to all these questions you feel comfortable serving as trustee, you should accept the role. It is an honor to be asked and you will provide a great service to the grantor and beneficiaries.

For a list of things to do after being appointed a trustee, click here.

For more on the different kinds of trusts, click here.

COPD Patients Discharged to a Skilled Nursing Have Two Times the Risk of Death Within Year Compared to Those Who Go Home

According to a study recently reported in McNight's, patients who go to a skilled nursing facility after being hospitalized for chronic obstructive pulmonary disease (COPD) are about twice as likely to die within a year: 

"The probability of death within 180 days was nearly 34% for COPD patients discharged to a SNF, versus roughly 16% for those who were sent home, the investigators determined. These numbers were 46.5% and 24%, respectively, at a year after hospital discharge. These statistics are for patients hospitalized with a diagnosis-related group (DRG) code of 190, but DRGs of 191 and 192 had similarly high rates."

Patients who go to a SNF likely have more severe COPD, multiple chronic conditions and poorer overall physical functioning, the study authors acknowledged. Still, the authors suggest, based upon the findings, that more robust interventions might improve the mortality of this group. Further research could determine which patients are likely to benefit from more intensive management and which might be candidates for hospice and palliative care.

The investigators analyzed Centers for Medicare & Medicaid Services data for about 500,000 patients in Ohio during 2008 and 2009. They are affiliated with not-for-profit hospital group OhioHealth, and presented their findings last week.

You can read more about the study here. 

Man Can't Challenge Discharge of Brother's Debt for Mom's Care under Filial Responsibility Law

A bankruptcy court has ruled that a man does not have standing to prevent the discharge of his brother's debt owed to their mother's assisted living facility under the state's filial responsibility law. In re: Skinner (Bankr. E. D. Pa., No. 13-13318-MDC, Oct. 8, 2014).

Dorothy Skinner lived in an assisted living facility until she was evicted for non-payment. The facility sued Ms. Skinner's sons, Thomas and William, under Pennsylvania's filial responsibility law. The court entered a default judgment against Thomas for $32,224.56. Thomas filed for bankruptcy and sought to discharge the debt.

William filed a claim in the bankruptcy court, arguing that Thomas's debt is non-dischargeable because it resulted from fraud and embezzlement. William argued that Thomas used their mother's assets for his personal expenses, so if William is liable to the assisted living facility, he is entitled to be reimbursed by Thomas.

The U.S. Bankruptcy Court, Eastern District of Pennsylvania, dismissed the claim, holding that William does not have standing because he is not a creditor of the debtor. According to the court, even if Thomas's actions injured Mrs. Skinner, that conduct was directed at Mrs. Skinner and her property, not at William. The court rules that William "may not invoke a cause of action that belongs to his [m]other to remedy the [Thomas's] liability for the Support Claim."  

Of course, underlying this case of one sibling fighting another is the liability created by filial responsibility; the siblings are jointly and severally liable.  Joint and several liability means that the creditor, in this case the assisted living facility, can enforce and collect the debt from the siblings jointly, or any one or more of the siblings severally.  If one sibling is unable to pay, the full debt falls to the other(s).  The assisted living facility can collect the full debt from any one of the siblings who is most likely to pay quickly.  Hence, one sibling seeks to stop a bankruptcy court from exonerating the other, leaving the sibling that does not file for bankruptcy solely responsible for the debt.  

Filial responsibility will only create more instances of familial discord and conflict as circumstances cast these obligations to fall inequitably among family members. Moreover, the court suggested that the Pennsylvania law does not allow for an action for contribution or reimbursement; if one family member is held responsible and another is not, the responsible family member may not be able to do anything about it.  Bottom line: parents' efforts to treat children equally or equitably will likely be sacrificed on the altar of Medicaid resource recovery in a filial responsible world. 

To read more about filial responsibility, click here, here, here, here, and here.  

Hapatitis Infection Risk in Nursing Homes Up 50%; Infection Risk Across the Board Increases

The rate of nursing home infections increased during a recent five-year period, with especially dramatic surges in multi-drug resistant organisms and viral hepatitis, according to recently published findings from Columbia University School of Nursing and the RAND Corporation, and reported in McNight's.

The prevalence of viral hepatitis in nursing homes increased 48% between 2006 and 2010, the investigators determined.  Outbreaks of Hepatitis C are common, including a recent outbreak in North Dakota involving ManorCare.  MDRO (multi-drug resistant organisms) prevalence increased by 18% and pneumonia by 11% during the same period. The rates of urinary tract infections, septicemia and wound infections also rose.

“Infections are a leading cause of deaths and complications for nursing home residents, and with the exception of tuberculosis we found a significant increase in infection rates across the board,” said lead study author Carolyn Herzig, MS, project director of the Prevention of Nosocomial Infections & Cost Effectiveness in Nursing Homes study at Columbia School of Nursing in New York City.

According to the authors, further research is needed to determine the cause of this troubling trend. They emphasized that potential residents and their families should look for facilities with strong infection control practices, including protocols to limit catheterization, easy access to hand sanitizers and isolation rooms for infected residents.

The results came from an analysis of data that nursing homes self-reported to the Centers for Medicare & Medicaid Services, and the study was supported by the National Institute of Nursing Research. 

Infection control has emerged as a top priority both for providers and the government. The White House recently launched a nationwide effort to reign in MDROs related to antibiotic prescribing practices.

Good News for Trusts that Manage Real Estate

In the recent Frank Aragona Trust case, 142 T.C. No. 9 (2014), the US Tax Court reached a taxpayer favorable decision, one that benefits trusts that materially participate in real estate business activities.  For years, the IRS has steadfastly refused to allow trusts to deduct net operating losses related to real estate activities against other ordinary income unrelated to the real estate; based on the so-called “passive activity loss” limitations.  Now, it may be possible for such trusts to deduct the losses associated with the real estate against other profitable activities to reduce income taxes.

Frank Aragona formed a trust In 1979, naming himself as the grantor and trustee and with his five children as beneficiaries. Frank Aragona passed away in 1981 and he was succeeded as trustee by six trustees. One of the trustees was an independent trustee and Frank Aragona's children comprised the other five trustees. Two of the five children had very little involvement with the trust or the business of the trust. Three of the five children worked full time for a limited liability company (LLC) that was wholly owned by the trust. This LLC managed most of the trust's rental real estate properties. It employed several people in addition to Frank Aragona's children including a controller, leasing agents, maintenance workers, and accounting clerks. In addition to receiving a trustee fee, the three children who were employed by the wholly-owned limited liability also received wages from the limited liability company.

During 2005 and 2006, the Frank Aragona Trust incurred substantial losses from its rental real estate properties. The trust also reported gains from its other (non-rental) real estate activities. In the Tax Court, the IRS argued that the trust's rental real estate activities were passive because a trust is incapable of materially participating in rental real estate activities. Alternatively, the IRS argued that even if a trust could materially participate in rental real estate activities, in the Aragona case, the court should disregard the activities of the three trustees who also work for trust's wholly-owned LLC because these trustees performed their activities as employees of the LLC and not in their duties as trustees. The trust contended that it could materially participate in its rental real estate activities, and that the activities of the three trustees who were also employed by the wholly-owned limited liability company should not be disregarded.

The material participation exception applies when more than one-half of the personal services performed in trades or businesses by the taxpayer are performed in real-property trades or businesses where the taxpayer materially participates and performs more than 750 hours of services during the year in real-property trades or businesses in which the taxpayer materially participates.

More than ten years ago, in Mattie K. Carter Trust v. United States, 256 F. Supp.2d 536 (N.D. Tex. 2003), a Texas district court held that the material participation of a trust in ranch operations should be determined by reference to the persons and agents who conducted the ranch's business on the trust's behalf, including the trustee.  According to the court, in determining whether the trust materially participated in the real estate activities, the trust's non-trustee's fiduciaries, employees, and agents should be considered.

In the years since the Mattie K. Carter Trust case, the IRS has issued a series of rulings in which it disagreed with the holding of the case and stated that only a trustee could be considered in making the determination.  Further, according to the IRS, if the trustee is also an employee of the underlying business, a taxpayer could only consider the time spent by the trustee in his duties as a trustee, and not in his duties as an employee.

Prior to 2012, the issue did not garner much attention because it only affected those trusts involved in rental real estate activities whose operations incurred losses.  However, with the recent enactment of the 3.8% Net Investment Income Tax, this issue has become a hot-button issue among tax practitioners.  Material participation is important in the context of the 3.8% Medicare tax because under §1411, "net investment income" includes income from a "passive activity (within the meaning of section 469) with respect to the taxpayer." Therefore, all rental real estate activities conducted through a trust or estate will not have to be concerned with the material participation rules.

    

The Tax Court held that, “[a] trust is capable of performing personal services [because …] services performed by individual trustees on behalf of the trust may be considered personal services performed by the trust.”  The Tax Court rejected the IRS’s argument that a trust is incapable of providing personal services, reasoning that, “[I]f the trustees are individuals, and they work on a trade or business as part of their trustee duties, their work can be considered ‘work performed by an individual in connection with a trade or business.’”

    

Also, the Tax Court rejected the IRS’s argument the work of certain trustees as employees of an LLC that managed most of the Trust’s rental real estate properties – which was wholly owned by the Trust – should not count because such work was performed as employees and not as trustees.  The Tax Court counted the work of the trustees which they performed as employees of the Trust’s wholly owned LLC because, “trustees are not relieved of their duties of loyalty to beneficiaries by conducting activities through a corporation wholly owned by the trust.”

The Tax Court did not, however, “decide whether the activities of the trust’s nontrustee employees should be disregarded.”

Given that the IRS expressly disregards the work of non trustee employees towards the material participation test, what is certain is that trusts can count the work of their trustees (even if performed as employees of a corporation wholly owned by the same trust).  Work performed by trustees as employees of a corporation that is unrelated to the trust might not count.

The Frank Aragona Trust decision is good news for those ongoing trusts that actively manage real properties as a business and have income tax losses in such activities. It may now be possible for such losses to be deducted against other activities.  

While the case resolves some uncertainties it does not resolve all uncertainties, most importantly whether to include the activities of trust employees who are not themselves trustees towards satisfaction of the material participation requirement.

Sources: Estate Planning: Good news for trusts that manage real estate

               Tax Court Gives Taxpayer a Victory in Frank Aragona Trust Case -- But Doesn't Go All the Way

Tom Clancy Estate In Family Fight Due To Poor Estate Planning

The following is an excerpt from an article entitled, " Tom Clancy Estate In Family Fight Due To Poor Estate Planning," published at the Probate Lawyer Blog:

The Tom Clancy Estate has been valued, based on probate court filings, at $82 million. It includes a $65 million ownership stake in the Baltimore Orioles, a rare, working World War II tank, a $7 million mansion overlooking the Chesapeake Bay, and more than $10 million in business interests based on his works.

Clancy left his mansion and another property to Alexandra, along with a Ritz-Carlton condo owned jointly by the married couple -- plus any other joint bank or investment accounts (which do not pass through probate and would not be public record).

The famed author wanted the rest of his estate divided between a series of trusts he created. His will specifies that one-third go to a trust for his wife, another one-third to a family trust (benefiting his wife and all of his children), and a final set of trusts for the four adult children from his first marriage, as well as grandchildren.

He also left a portion of the residue of his estate (it's unclear how much) to the Hopkins's Wilmer Eye Institute, which was founded based on a $2 million donation Clancy made in 2005, and where Clancy was treated for an eye disease.

Seems like he had his estate well planned, right? Unfortunately, his estate planning was not as thorough or well-thought-out as his meticulously-detailed novels.

Click here to read the rest of this interesting article.

Elderly Couple May Be Responsible for Adult Son's Unpaid Medical Bills

An elderly Pennsylvania husband and wife are being asked to pay their deceased adult son's medical bills under a law making family members responsible for a loved one's unpaid bills. The case is a reminder that such “filial responsibility” laws may go both ways – requiring parents to pay the debts of adult children as well as the children to pay for their parents'.  

For those involved in estate and retirement planning, the case underscores just how clueless policymakers are to the challenges of proper planning.  The financial risk of filial responsibility debt adds yet another layer of uncertainty, and non-quantifiable risk to planning considerations.  For the well-informed senior, asset protection planning is the order of the day, since only asset protection planning will mute the blow of unexpected financial filial responsibility.  But, the vast majority of ill-informed seniors will continue to accept too much risk for too long in their retirement plans in order to reach an ever receding horizon represented by the amount of money necessary to live comfortably safe from risk.  This species of planning has brought current financial and retirement planning to the crisis point at which most seniors find themselves today.  

Alternately, seniors and their children, recognizing the seemingly insurmountable hurdles of these risks will simply eschew savings and financial planning- living month-to-month, year-to-year as best they can, relying upon the harsh and dangerous hand of government benefits as their safety net.  Many will find the benefits they imagined to be illusory.  Others will find that the benefits come at a cost- sacrifice of independence, quality of care, quality of life, and control.  Never before in history have so many risked so much for so little.     

Peg and Bob Mohn's son died at age 47, leaving unpaid medical bills. Now according to an article in The Morning Call, debt collectors are trying to dun the Mohns using an archaic state law that was not enforced until recently. Pennsylvania is one of at least twenty-eight (28) states that currently have filial responsibility laws. These laws usually make adult children responsible for their parents’ care if their parents can't afford to take care of themselves, but some of the laws also make parents responsible for their childrens' care. Filial responsibility is the law in the State of Ohio, although like Pennsylvania a few years ago, the law was rarely enforced.

Filial responsibility laws, which originated before the advent of the modern public support system, have been rarely enforced since these public support systems were enacted. States and health care providers have been clamoring for states to begin enforcing the laws in order to recover medical expenses, including Medicaid payments. In May 2012, a Pennsylvania court found an adult son liable for his mother's $93,000 nursing home bill under the state's filial responsibility law.

According to attorney Stanley Vasiliadis who is quoted in the Morning Call article, these laws provide additional incentive for people to plan their estates. Without proper planning, children could be on the hook for their parents' nursing home bills, and vice versa.

States with filial responsibility laws include: Alaska, Arkansas, California, Connecticut, Delaware, Georgia, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Mississippi, Montana, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, and West Virginia. Two states, Idaho and New Hampshire, recently repealed their filial responsibility laws, but elder law attorneys in Pennsylvania haven’t made much headway in convincing their legislators to repeal.

These laws differ from state to state.  If you live in a state that still has such a law on the books, check with your attorney to find out how you can protect yourself from a child or parent’s debts. 

For more information on filial responsibility laws, go here. 

Annual Exclusion Gifts Are Counted When Determining Medicaid Eligibility

Many people believe that if they give away an amount equal to the annual gift tax exclusion – currently $14,000 to any one individual – this gift will be exempted from Medicaid’s five-year look-back at transfers that could trigger a waiting period for benefits.  Nothing could be further from the truth.

The gift tax exclusion is an IRS rule.  Any person who gives away $14,000 (in 2014) or less to any one individual does not have to report the gift or gifts to the IRS.  If you give away more than $14,000 to any one person (other than your spouse), you will have to file a gift tax return.  However, this does not necessarily mean you’ll pay a gift tax.  You’ll only have to pay a tax if your reportable gifts total more than $5.34 million (2014 figure) during your lifetime. 

This IRS rule has nothing to do with Medicaid’s asset transfer rules. While the $14,000 that you gave to your grandchild this year will be exempt from any gift tax, Medicaid will still count it as a transfer that could make you ineligible for nursing home benefits for a certain amount of time should you apply for them within the next five years.  You may be able to argue that the gift was not made to qualify you for Medicaid, but proving that is an uphill battle.   

If there is a chance you will need Medicaid coverage of long-term care in the foreseeable future, see your elder law attorney before starting a gifting plan. 

Marriage of Couple in Their Mid-90s Is Challenged by Wife's Co-Guardian

Many people are aware that, in many states, a guardian can file for dissolution of a marriage of a ward from the spouse's ward.  See, e.g., Illinois Permits Guardian Authority to Petition for Termination of a Ward's Marriage.  It seems that the guardian's authority includes contesting a marriage each persona voluntarily entered into.  Edith Hill and Eddie Harrison married after being companions for 10 years, but the marriage is being questioned because Hill had been declared incompetent several years ago. 

Hill, who is 96, and Harrison, who is 95, met in line for lottery tickets more than 10 years ago and married earlier this year, according to the Associated Press. The marriage has been challenged, however, because Hill is under guardianship. Hill's daughter, Rebecca Wright, serves as Hill's co-guardian along with another daughter, Patricia Barber. Wright supports the marriage and supposedly allowed it to take place without Barber's knowledge.

After ruling that the marriage may not be legally binding, a Virginia judge ordered an investigation. The judge removed Wright and Barber as guardians and appointed an independent lawyer to determine whether the marriage is in Hill's best interest. Barber is concerned that the marriage may affect the distribution of Hill's estate, which totals $475,000. One possible solution being discussed is a postnuptial agreement preventing Harrison from inheriting Hill's estate.

For more information about the couple’s possibly invalid marriage, click here. 

Achieving a Better Life Experience (ABLE) Act Would Create Tax-free Accounts for the Disabled

Sara Wolff (center) is calling on Congress to allow disabled
 Americans to save and still receive benefits like
 Social Security Disability Insurance payments and Medicaid.

Many families struggle with planning for the future of a child with severe disabilities. While they are able to save for the educational needs of their other children through “529” college tuition plans, these plans do not fit well the needs of a child with severe disabilities.  The disabled child may, now, or in adulthood, need the long term services and supports of the Medicaid program and/or the income assistance of the Supplemental Security Income (SSI) program.  Since the child may live for many decades beyond the ability of the parents to supplement the services they receive through Medicaid, most parents recognize the need for saving and securing funds for the child.  Others want to ensure the financial security of a disabled child who has a level of disability required for Medicaid eligibility, but for now, is managing to function without the use of those benefits. Still others want to ensure that their family member can exercise control over the funds in the account without endangering the Medicaid and SSI benefits on which they may rely.

Although Supplemental Needs Trusts and/or Wholly Discretionary Trusts for Special Needs offer a savings solution, many families have found it too expensive to establish a trust which meets the requirements of the Medicaid and SSI programs.  While many attorneys will prepare these for reduced fees for those in need, it is not uncommon to pay five to ten thousand dollars for these solutions.  The ABLE Act (S.313 / H.R.647) would give individuals with disabilities and their families access to accounts that would allow individual choice and control while protecting eligibility for Medicaid, SSI, and other important federal benefits for people with disabilities.

The Senate Finance subcommittee on taxation and IRS oversight may have never heard testimony from someone quite like Sara Wolff.  Ms. Wolff, 31, was born with Down syndrome, but that hasn’t stopped her from becoming involved in politics. She testified before the subcommittee on the Achieving a Better Life Experience (ABLE) Act, which would create tax-free savings accounts for those with disabilities. Earlier this year, she wrote a change.org petition calling on Congress to pass the ABLE Act. The petition garnered more than 250,000 online signatures.

“Just because I have Down syndrome, that shouldn’t hold me back from achieving my full potential in life,” Ms. Wolff of Moscow, Pa., said in a statement. “I can work a full-time job, be a productive member of society, and pay taxes – but because of outdated laws placed on individuals with disabilities, we hold people like me back in life.”

Ms Wolf is also a board member of the National Down Syndrome Society (NDSS), which is championing the bipartisan legislation. The Senate bill is sponsored by Sen. Robert Casey, Pennsylvania Democrat, and Sen. Richard Burr, North Carolina Republican.  Support for the House bill is being led by Rep. Ander Crenshaw, Florida Republican; Rep. Cathy McMorris Rodgers, Washington Republican; Rep. Pete Sessions, Texas Republican; and Rep. Chris Van Hollen, Maryland Democrat.

“The bill aims to ease financial strains faced by individuals with disabilities by making tax-free savings accounts available to cover qualified expenses such as education, housing and transportation,” said an NDSS statement.

Ms. McMorris Rodgers, whose seven-year-old son Cole has Down syndrome, called on Congress to “advance this crucial legislation.”  “As the mom of a son with Down syndrome, I see firsthand how federal policies limit—not expand— opportunities for those with disabilities.  And the ABLE Act will change that,” said Ms. McMorris Rodgers in a statement. “It will make sure that Cole — and the millions like him who have special needs — will be able to save for their futures and reach their full potential.”

The ABLE Act  has 74 Senate co-sponsors, including Senate Majority Leader Harry Reid and GOP Minority Leader Mitch McConnell.  “Passing this landmark legislation will go a long way to help people with Down syndrome and other disabilities realize and achieve their own hopes, dreams and aspirations,” NDSS Vice President of Advocacy and Affiliate Relations Sara Hart Weir said in a statement.

Members of the U.S. Senate said Friday, September 26th, that they have an agreement that will allow the Achieving a Better Life Experience, or ABLE, Act to proceed to the full Congress.  The bill’s chief sponsors and leaders of the Senate’s Committee on Finance said in a joint statement that they expect the legislation to be considered when Congress returns to Washington in November.

Under the measure, people with disabilities would be able to create special accounts at any financial institution where they could deposit up to $14,000 annually. The ABLE accounts could accrue up to $100,000 in savings without risking an individual’s eligibility for government benefits like Social Security. What’s more, Medicaid coverage could be retained no matter how much money is deposited in the proposed accounts.

Modeled after the popular 529 college savings plans, funds deposited in ABLE accounts could be used to pay for education, health care, transportation, housing and other expenses. Interest earned on savings within the accounts would be tax-free.

The ABLE Act has been under consideration in Congress since 2006.  It is time that this proposal was enacted into law.

If you want to follow this legislation, Autism Speaks will do that for you by clicking here.  

The National Disability Institute has useful information here.

You can sign Sara's petition here.

Read more: http://www.washingtontimes.com/news/2014/jul/22/act-would-create-tax-free-savings-accounts-disable/#ixzz38RqDdzBf

and http://www.disabilityscoop.com/2014/09/19/deal-savings-accounts/19689/