Trustee Authority to Sell Trust Property to Pay for Settlor’s Long-Term Care Costs

Reversing a lower court, Wyoming’s highest court has ruled that a trustee has authority to sell property in the trust to pay for the settlor’s long-term care even though the trust provided that the property was to be placed in trust for the settlor’s daughter when the settlor died. Jackson v. Montoya (Wyo., No. 2020 WY 116, Sept. 4, 2020).

David Jackson’s parents created a trust and transferred their property to the trust. The trust provided that the trustee had authority to pay the surviving settlor from the trust property, including selling trust property, as necessary to provide for his or her comfort. The trust also provided that on the death of both parents, the property in the trust should be conveyed to a trust for the benefit of Mr. Jackson’s sister, Candyce Montoya, who was authorized to live on the property rent free. Mr. Jackson became the successor trustee of the trust and wanted to sell the property to pay for his father’s long-term care, so he served an eviction notice on Ms. Montoya. Ms. Montoya refused to vacate the property. 

Mr. Jackson sued, seeking a declaratory judgment that the trust was entitled to the property. The trial court interpreted the trust to grant Ms. Montoya a life estate in the property, which prevented Mr. Jackson from selling the property. Mr. Jackson appealed. 

This is an all-too common cause for dispute; does a surviving spouse have the authority to sell property held in a marital trust (or sometimes even a separate trust) that benefits the surviving spouse, where the property is ultimately retained in trust for the benefit of a child?  Typically, the trust is clear and ambiguous, by, for example, reciting an order of intent and authority (for example, "it is my/our intention to provide for each other, and then for the surviving spouse, and then upon the death of both of us to provide for our surviving children, and then for our grandchildren if there is a death of one our children...").  Sometimes, though, a trust is not so clearly crafted, and in this case, ambiguity arose, at least in part, from a specific amendment which the daughter claimed provided a specific and different intention as to specific property for her benefit. 

The Wyoming Supreme Court reversed, holding that Mr. Jackson had authority to sell the property to pay for his father’s long-term care. According to the court, the trust makes clear that the trustee has the right to “sell or deal with any Trust property, in his or her sole discretion, without interference, for the benefit of the surviving settlor’s care, comfort, support, welfare or maintenance, as may be necessary.” The court ruled that when the trust provisions are read as a whole, “it is clear” that Ms. Montoya’s interest “will not vest until the death of the remaining Settlor.” 

Source of original article: "Trustee Has Authority to Sell Property in Trust to Pay for Settlor’s Long-Term Care Costs," Elderlaw Answers (9/21/2120).

Seniors Dying from Isolation Amid Pandemic- One Analysis Suggests Tens of Thousands

Prohibiting visitors to nursing homes has arguably helped limit the spread of COVID-19. But what are the impacts of isolation?  For some the impact has been profound. 

According to a recent Washington Post article, pandemic-related segregation and isolation has killed thousands of Alzheimer’s patients while families watch from afar. According to the Post's research: 

Beyond the staggering U.S. deaths caused directly by the novel coronavirus, more than 134,200 people have died from Alzheimer’s and other forms of dementia since March. That is 13,200 more U.S. deaths caused by dementia than expected, compared with previous years, according to an analysis of federal data....

The consequences are not limited to just deaths from dementia.  Data also shows increased deaths from causes such as hypertension or sepsis, which "are occurring at much higher levels than in the past, experts say, in part because of the pandemic’s indirect effects."  A recent study also demonstrates that the separation and isolation extends beyond just familial separation; all contact with nursing home residents fell by half amid the pandemic.   

Overlooked in America’s war against the coronavirus is a stark reality: isolation and limits on human contact have profound direct and indirect mental and physical health consequences.  For at least one population for which careful government data exists, the consequence is palpable and demonstrative; seniors with dementia are dying not just from the virus but from the very strategy of isolation that is supposed to protect them. 

The effect of social isolation and division are important consideration as states begin to allow visits to nursing home residents.  The article highlights a number of individuals' stories and compares reopening of SNFs in other countries to that of the US.  According to the article:

"countries like the Netherlands have safely reopened their nursing homes without any increase in coronavirus cases by providing ample protective equipment, testing and rigorous protocols."  

Aging in place might provide a more flexible arrangement, but requires serious appreciation and consideration of risks.  

Heartbreaking Study Finds that Contact with Nursing Home Residents Fell by More than Half

Nursing home operators took limiting in-person contact with residents very seriously after the onset of the coronavirus pandemic. Visits of all kinds fell by 53% between March and April, new findings by SeniorLiving.org research revealed.

According to McKnight's Long-term Care News,The Centers for Medicare & Medicaid Services (CMS) issued guidance in mid-March restricting access for all visitor and non-essential healthcare personnel from facilities in an effort to combat and limit the spread of COVID-19.

The findings also showed that between April and June visits rebounded but were still down overall 33% when compared to March. The analysis used de-identified visitor data to nursing homes from 26 states. Researchers noted that because the data is de-identified, total traffic to nursing homes is inclusive of staff, vendors and visitors. 

“While this data does show the significant drop in visitors, it does not quite fully convey that there was almost a 100% decrease in [non-essential] visits that bring great joy to our residents — visits from their family and friends,” Erin Shvetzoff Hennessey, CEO of Health Dimensions Group, told McKnight’s Long-Term Care News. Hennessey explained that non-essential visitors that many facilities stopped included visits from family, beauticians, clergy, entertainment and all non-essential health visits. She noted that “most providers took the guidance very seriously and had even put in place restrictions prior to CMS requirements.”  

“The isolation our residents have felt is heartbreaking, but necessary to keep them safe from a virus that has been so unkind to our residents,” she added. 

Christopher Laxton, executive director of AMDA — The Society of Post-Acute and Long-Term Care Medicine, explained to McKnight's that better visitor insight might have been provided if the data was stratified by type of visitor.  But based on the findings, Laxton said, 

“It appears that the decline in visits in March and April validate nursing homes’ understanding that their patient and resident populations are at extreme and disproportional risk of illness and death from COVID-19 and need to be protected.  The subsequent increase in visits through June is likely multifactorial, including the need to mitigate the devastating effects of long-term social isolation on the nursing home population, among other reasons.” 

McKnight's headline called the findings "Heartbreaking."

Medicaid Applicant Who Did Not Verify Mortgage Balance Is Not Entitled to Benefits

It is vitally important that a Medicaid application be completed properly, and that all required information be provided.  An Ohio appeals court recently held that a Medicaid applicant who did not provide verification of her mortgage balance is not entitled to benefits even though the original mortgage value was higher than the home’s current value. Poindexter v. Ohio Dept. of Job and Family Servs.  (Ohio Ct. App., 5th Dist., No. 2020 CA 00005, August 11, 2020).  In other words, it doesn't matter whether the applicant considers or cam even later establish that the information "might" be considered irrelevant,  burdensome, or non-dispositive, providing complete information is necessary. 

Lucille Poindexter bought a home with a mortgage of $48,023. She entered a nursing home and applied for Medicaid. The value of her home at that time was $36,900. The state requested that Ms. Poindexter verify her current mortgage balance. The request form stated that if Ms. Poindexter was having trouble, she should contact the Medicaid agency for help. The agency contacted her a second time, but Ms. Poindexter did not submit the verification or request assistance. 

The state denied her application for benefits. Ms. Poindexter appealed to court, and the trial court affirmed. Ms. Poindexter appealed, arguing that the evidence showed that she had a mortgage of $48,023, while the house’s value was only $36,900, so her home should not be a countable resource. She also argued that the court improperly placed the burden on her to provide evidence of the mortgage, rather than placing the burden on the Medicaid agency. 

The Ohio Court of Appeals, Fifth District, affirmed, holding that the state properly denied benefits. According to the court, Ms. Poindexter presented no evidence “demonstrating what the balance of the mortgage was as of the time of the application, and thus the agency could not determine the value of the property as of the time of her request for Medicaid assistance.” The court also noted that Ms. Poindexter had the ability to request assistance in obtaining the information, but she did not do that. 

Source: Elderlaw Answers (8/27/20)

As COVID-19 Continues to Ravage Nursing Homes, the California Supreme Court Limits Damages for Care Violations

As COVID-19 continues to ravage nursing homes, the California Supreme Court recently ruled that a state law allowing residents to sue facilities for rights violations limits compensation to $500 regardless of the number of times and the resident's rights are violated, or the manner or nature of the violation. 

The 1982 statute, the Long-Term Care, Health, Safety, and Security Act, was aimed at allowing nursing home residents to sue on the grounds that their rights had been violated. The decision limiting compensation was 5-2 with the two dissenting justices arguing that  the law actually intended to set a $500 cap for each violation of a patient’s rights, not for the all violations identified in the entire suit.

The decision stemmed from a lawsuit filed by John Jarman, who was 91 in 2008 when he slipped and fractured his hip. After surgery, he was transferred to ManorCare of Hemet, CA, a skilled nursing facility of HCR ManorCare Inc. While there, he developed bed sores that took a year to heal after his release, the suit said.  ManorCare staff allegedly often left him in soiled diapers and ignored nurse call lights. He died before the trial, and his daughter continued to pursue his suit.

The majority defended their reading of the statute:

“We do not find that limiting an award to $500 per lawsuit would render the statute ‘toothless,’”

wrote Justice Ming W. Chin, author of the majority decision.  He noted that lawyers for nursing home residents were still entitled to collect their legal fees from the defendants and injunctions could be issued to prevent future abuse. Residents can also sue under different laws, including the Elder Abuse Act, which provides substantially more compensation, according to Chin.

But Justice Mariano-Florentino Cuéllar, joined by Justice Goodwin Liu, wrote the $500 cap was

 “plainly insufficient to fulfill the statute’s purpose to deter and remedy violations of nursing home patients’ rights.  It makes little difference that the majority leaves a few teeth awkwardly hanging in the mouth after pulling most of them out. " 

Justice Cuéllar cited the pandemic in the first paragraph of his 26-page dissent, which was notably longer that the majority ruling, writing that

“Nowhere has the pain of the COVID-19 virus been more acutely felt than in our state’s nursing homes.” 

In a Walnut Creek facility owned by ManorCare, he wrote, 130 people were infected, and 12 have died. The majority’s decision “deprives nursing home residents of an important tool to deter and vindicate violations of their rights,” he charged.

Cuéllar noted that the Elder Abuse Act allows victims compensation only if they can prove “by clear and convincing evidence” that a nursing home was liable for physical abuse, neglect or abandonment and also guilty of “recklessness, oppression, fraud or malice in the commission of this abuse.” “This is not an insubstantial burden,” he wrote.

In Jarman’s case, a jury in 2011 awarded the daughter $100,000 in punitive damages under a different law that was not at issue in Monday’s decision. Under the 1982 law, the jury found the nursing home liable for $95,000 for various violations, an amount that will now likely be reduced to $500.

The trial court eventually struck down the punitive damages, but a court of appeal reinstated them.

Anthony M. Chicotel, staff attorney for California Advocates for Nursing Home Reform, called the decision extremely disappointing and said his group would urge the Legislature to rewrite the law. The pandemic has prevented ombudsmen for nursing home patients from entering the facilities, he said, and residents now are in need of more protection than ever.

“For residents rights, this is a significant blow,” said Chicotel, who filed a friend-of-the-court brief on behalf of Jarman. He likened their predicament to being on a floating, melting iceberg that gets smaller and smaller.

Barry S. Landsberg, who represented ManorCare in the case, told the LA Times that the company was “pleased that the Supreme Court correctly interpreted the resident rights statute” to limit damages to no more than $500 in a civil action.  “That is what the statute says and what the Legislature intended, both when it enacted the law in 1982 and when it amended the law years later,” Landsberg said.

One wonders if this means that a complainant must file separate lawsuits for each violation, and if that will satisfy the court's reading of the Act.  

This article is heavily reliant upon reporting from the LA Times. 

CMS Implementing New Training Protocols Protecting Resident Health and Safety Amid COVID-19

According to an announcement made by the Centers for Medicare & Medicaid Services (CMS):

"Today, under the leadership of President Trump, the Centers for Medicare & Medicaid Services (CMS) is implementing an unprecedented national nursing home training program for frontline nursing home staff and nursing home management. The training is designed to equip both frontline caregivers and their management with the knowledge they need to stop the spread of coronavirus disease 2019 (COVID-19) in their nursing homes. The training announced today will be available immediately to staff of America’s 15,400 Medicare and Medicaid certified nursing homes and focuses on critical topics like infection control and prevention, appropriate screening of visitors, effective cohorting of residents, safe admission and transfer of residents, and the proper use of personal protective equipment (PPE) – all critical elements of stopping the spread of COVID-19.  President Trump first announced the training in late July as part of the Trump Administration’s unwavering commitment to the safety of American seniors living in nursing homes. The training is only the latest in a long list of decisive actions the Trump Administration has taken to safeguard America’s nursing homes."

CMS Administrator Seema Verma wrote in the announcement, the following:

“President Trump has directed us to deploy every resource available to ensure nursing homes are prepared, educated, and ready to keep all our seniors safe from this highly contagious, dangerous disease. CMS is taking unprecedented action to ensure that nursing homes are doubling down on efforts to prevent the spread of the virus. This national training program is just the latest example of our coordinated and aggressive response to this unprecedented situation.” 

Purportedly, the "first-of-its kind" scenario-based training is called the “CMS Targeted COVID-19 Training for Frontline Nursing Home Staff and Management” and it has been designed specifically with COVID-19 in mind. The program features a tailored course that incorporates the most recent lessons learned from nursing homes and teaches frontline staff best practices they can implement to address issues related to COVID-19. The training builds upon results of CMS nursing home inspections and the findings of epidemiological experts from the Centers for Disease Control and Prevention (CDC) who work with nursing homes. The design was also influenced by the findings of federal nursing home task force strike teams, through which experts from CMS and CDC were deployed to nursing homes actively battling COVID-19 outbreaks in hot spot areas over the summer. The strike teams learned that while current regulations were designed to protect the health and safety of residents, the pandemic created an urgent need to directly assist frontline workers with more focused training and guidance than has been used in the past.

The CMS Targeted COVID-19 Training for Frontline Nursing Home Staff & Management is immediately available, with five (5) specific modules designed for frontline clinical staff and ten (10)  designed for nursing home management. The training is available on the CMS Quality, Safety & Education Portal.

The training for frontline staff, called “CMS Targeted COVID-19 Training for Frontline Nursing Home Staff” covers five topics separated into five modules. These modules address some of the most common concerns found by surveyors and strike teams, basic infection control and prevention. The modules are focused on the most urgent needs of frontline nursing home staff and they include:

• Module 1: Hand Hygiene and PPE;
• Module 2: Screening and Surveillance;
• Module 3: Cleaning the Nursing Home;
• Module 4: Cohorting;
• Module 5: Caring for Residents with Dementia in a Pandemic.

The training for management, called “CMS Targeted COVID-19 Training for Nursing Home Management” covers 10 topics separated into 10 modules. These modules are comprehensive, focusing on infection control and cleanliness but also larger institution-wide issues like implementation of telehealth, emergency preparedness, and vaccine delivery. They include:

• Module 1: Hand Hygiene and PPE;
• Module 2: Screening and Surveillance;
• Module 3: Cleaning the Nursing Home;
• Module 4: Cohorting;
• Module 5: Caring for Residents with Dementia in a Pandemic'
• Module 6: Basic Infection Control;
• Module 7: Emergency Preparedness and Surge Capacity;
• Module 8: Addressing Emotional Health of Residents and Staff;
• Module 9: Telehealth for Nursing Homes;
• Module 10: Getting Your Vaccine Delivery System Ready.

To ensure nursing home staff are aware of the training and availing themselves of it, CMS is directing Quality Improvement Organizations (QIOs) – CMS’ nationwide quality improvement contractors – to include the training in the action plans that QIOs develop in collaboration with each nursing home they assist. This will help ensure that nursing homes are building the training into their existing quality improvement efforts.

Finally, while the training announced today is comprehensive, CMS and CDC will also have subject matter experts available on bi-weekly webinars from August 27, 2020, through January 7, 2021, from 4:00 – 5:00 p.m. ET, to answer questions. Registration is required for these Question and Answer sessions. Participants can register on the Zoom webinar registration page.

If a nursing home’s staff is unsure which training module best meets their needs, CMS is offering an online self-assessment tool at www.qioprogram.org to help them identify their needs and suggest the appropriate training modules that best reflect those needs. A certificate of completion is offered for each completed training course.

While the training is targeted to address, and motivated by, the pandemic, the attention to training regarding control of infection is necessary and welcome. 

COVID-19 Pandemic Borrowing from Family at Ultra-low Rates Creates Estate Planning and Tax Challenges

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"Desperate small business owners seeking cash to keep their businesses alive during the coronavirus pandemic are turning to their families for loans," according to an article recently published in Forbes:

“People are risking their own money for their brother, sister, kids, grandkids,” says Rebecca MacGregor, an estate planning lawyer with Bowditch & Dewey in Boston, Massachusetts. She’s recently set up intra-family loans in the case of clients trying to hold onto a gas station, a third-generation Italian restaurant and a fifth-generation insurance agency. “No one is singing the praises of the family and friends who are saving these small businesses,” she says. “They’re unsung heroes.”

Familial loans with ultra-low interest rates are a lifeline.

It is hard to know how common familial generosity is, but an overwhelming 71% of retirees said they would offer financial support to their family needed due to Covid-19 even if it could jeopardize their own financial future, a recent retirement study by Edward Jones and AgeWave found.

The Internal Revenue Service announces special interest rates (applicable federal rates or AFRs) monthly, and for August, per IRS Revenue Ruling 2020-15, here’s how low they are:

• Short-term — Three years or less: 0.17%
• Mid-term — More than three years and less than nine years: 0.41%
• Long-term — More than nine years: 1.12%

Obviously, no borrow is going to find these rates at a bank.  They are incredibly low, but it is, in part, a reflection of the fact that the risk is incredibly high. That is, unfortunately, an important consideration in extending loans to family. 

According to the Forbes article, while many business owners received CARES Act paycheck protection program loans, they are now turning to family members. Families are lending money to keep businesses afloat in the hopes that once Covid-19 passes, customers will return, and the loans can be repaid.

If you are considering becoming a familial lender, it is vitally important to consider how much you are comfortable and able to lend.  You should, in fact, assume the worst, that your loan will become a gift, and hope for the best. You should consider carefully how much you have saved for your lifetime, and how comfortably you are living within your income.

An intra-family loan is a private loan, instead of a loan through a known bank lender, but if the amount of the loan exceeds $10,000, you should have the same type of documents as for a bank loan. These should be documented as real loans intended for repayment, and if there is available security,. such as inventory or real estate, the lender should be protected and secured.  Neither borrower nor lender will be happy if, in the worst case, assets are liquidated to pay creditors other than family because commercial lenders were protected, while the family lender was not. 

 You can make the loan payment an "interest only," or make it a traditional payment of interest and principle. You can structure the loan so the lender gifts part of the principle over time. So long as the gift stays under $15,000 per individual/$30,000 per married couple, there is no requirement to file a gift tax return. Regardless, if the gift exceeds that amount, there is typically no gift tax assessed; the lifetime gift tax exclusion is $11.58 million per person, so there is no gift tax due. If the gift is more than $15,000/$30,000, you are technically required to file a gift tax return and report use of a portion of your lifetime gift tax exclusion. 

Be careful of no-interest or too-low interest loans; they risk imputed interest income, and resulting penalties and interest from non-reporting. Imputed interest is the interest that a lender is presumed to have received and must report as income on their taxes regardless of whether they received it. It applies to family loans and other personal and business loans extended at no interest or an interest rate the IRS considers to be too low. For more information, go here and here. 

Finally, if you are considering any familial financial arrangement, it is important to discuss your desires with your estate planner.  Many trusts and some Wills have provisions that claw-back advancements, such as unrepaid loans or gifts made for a period prior to death, from shares of the estate directed to heirs.  In other words, these arrangements may merit or require changes to your estate plan.

Who Has The Right in Ohio to Bury or Cremate a Deceased?

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Authority to make decisions regarding disposition of bodily remains, funeral, cremation, and related goods and services is conferred to a person by one of two means.  The first is appointment by the deceased prior to death, and the second is by statute.  

Appointment of Representative 

Ohio law allows an individual during his or her lifetime to appoint a representative who will have the top priority when it comes to making funeral and disposition arrangements. If an individual appoints a representative in a document that meets the requirements of Ohio Revised Code § 2108.72, that representative has full authority, even over the contrary wishes of a spouse, or eldest child, to make funeral, cremation, and disposition arrangements.

If a declarant or deceased adult has made an anatomical gift under sections 2108.01 to 2108.29 of the Ohio Revised Code, any person given the right of disposition is bound by the anatomical gift and must follow the instructions associated with the gift before making any decisions or taking any other actions associated with the right.  See, Ohio Revised Code § 2108.78.

An appointment is valid only if made in a written document that meets the requirements of Ohio Revised Code 2108.72. Owners and employees of funeral homes, cemeteries and crematories may not be appointed as a representative unless they are related by blood or marriage to the individual making the appointment. 

Appointment of Representative forms are available free of charge at most funeral homes and crematories, and are available online here courtesy of the Franklin County Probate Court, and here, courtesy of the Funeral Consumers Alliance (FCA), a nonprofit organization that protects consumers' rights to choose meaningful, dignified, affordable funerals.  We encourage use of the forms available courtesy of Franklin County Probate Court, because they are "form fillable;"  you can type your personal information into the form and print it out for signature, before witnesses and/or a notary public.
   

Statutory Authority of a Representative

Section 2108.81 of the Revised Code, establishes the following order of priority of a representative to make disposition decisions:

(1)The representative appointed by the decedent to have the right of disposition.

(2)The decedent's surviving spouse.

(3)The decedent's surviving child or children.

(4)The decedent's surviving parent or parents.

(5)The decedent's surviving sibling or siblings.

(6)The decedent's surviving grandparent or grandparents.

(7)The lineal descendants of the decedent's grandparents as spelled out in Section 2105.06 of the Revised Code.

(8)The decedent's personal guardian at the time of death.

(9)Any person willing to assume the right of disposition, including the personal representative of the estate or the licensed funeral director with custody of the body, after attesting in writing and good faith that they could not locate any of the persons in the above priority list.

In the event that several individuals of the same class cannot agree on funeral or disposition arrangements, the law permits the majority to control. Additionally, if an individual cannot be located, the majority of those who are available will control. For example, if a widow dies with five adult children, two of whom want cremation, one of whom wants burial and two of whom cannot be located, the children who opted for cremation would prevail.

If there is not a majority present to resolve a dispute, any party, including the funeral director, may petition the probate court to decide the issue. The probate court is given five factors in the statute to consider when rendering a decision as to who will control the disposition.

Liability for the Cost of Disposition

Although a deceased's estate is liable for the cost of the funeral, cremation, burial, or other disposition goods and services, the person with authority, whether designated in writing or acting pursuant to the Ohio statute is also personally liable.  Section 2108.89 of the Ohio Revised Code provides that:  

The following persons shall be liable for the reasonable costs of any goods or services purchased in connection with the exercise of the right of disposition for a declarant or deceased person:

(A) A representative or successor who assumes liability for the cost of such goods and services by signing a written declaration that states that such an assumption is made;

(B) A person to whom the right of disposition is assigned pursuant to section 2108.81 of the Revised Code and who has purchased goods or services associated with an exercise of the right.

While the agent or representative of the deceased can make a preferred claim against the estate for reimbursement, and be paid before other creditors of the estate, the agent is, nonetheless, personally responsible. 
  

Loss of Right of Disposition 

In order to exercise the right of disposition, an individual must be 18 years or older and mentally competent. Persons who have been appointed as a representative or who hold the right of disposition because of their relationship with the decedent will lose that right in the following situations:

• The person dies or is declared mentally incompetent by the probate court;
• The person resigns or declines to exercise the right of disposition;
• The person refuses to exercise the right within two days after notification of the decedent's death;
• The person cannot be located with reasonable effort;
• The person is charged with the murder, aggravated murder or voluntary manslaughter of the decedent;
• The person is charged with an act of domestic violence and it is alleged that the violence resulted or contributed to the decedent's death;
• The person is the spouse of the decedent and a petition for divorce has been filed and has not been dismissed at the time of death, or;
• The person is the spouse of the decedent and the probate court determines that the decedent and the spouse were "estranged" at the time of death;
• The person is unwilling to accept responsibility for paying the funeral costs.

The last provision is not listed overtly in in the Ohio Revised Code Sections describing the conditions which cause a person forfeit the authority to make disposition decisions, but arises as a consequence of Ohio law making the agent personally responsible for costs and expenses.   A person who holds the right of disposition, but is unwilling or unable to pay the costs of the funeral and disposition, loses that right; funeral homes are not  required to take directions from relatives unless they are willing and able to pay for the funeral, burial, or cremation.  

Funeral Home Protection

Ohio law provides an extensive array of protections for funeral homes, cemeteries and crematories against lawsuits and claims by disgruntled family members. As long as employees of funeral homes, cemeteries or crematories are acting in good faith, they may rely upon statements made to them by persons claiming to have the right of disposition. Moreover, the statute provides immunity against lawsuits in the event that reliance was misplaced. For example, if a person misrepresents that they have the right of disposition, the funeral home will not be responsible for relying upon that misrepresentation unless it can be shown that the funeral director had reason to know that the misrepresentation was false.

Most funeral homes,  crematoriums, and cemeteries will require the person arranging the funeral to sign a "Claim of Authority to Carry Out Disposition" form which  tracks the wording of the Ohio statute.  This form constitutes a certification that the person is authorized to make decisions, and helps to demonstrate that the funeral home acted in good faith in relying upon claims made by family members.

The law also provides that a funeral director who is aware of a dispute regarding the right of disposition may refuse to accept the remains or to complete the funeral or disposition until the funeral director receives a court order or a written authorization from the person or persons who have the right of disposition. During a dispute, the statute authorizes the funeral director to embalm or refrigerate the remains in order to preserve them and to add those costs to the funeral bill. Moreover, if the funeral home must seek the intervention of the probate court, the funeral home may add its legal fees and court costs to the funeral bill.

For this reason and many others, every person adopting an estate plan should complete a form identifying the persons, in order of succession they desire to exercise disposition authority.  Failure to do so is an invitation to disputes, and the costs can be extreme for disputes and disagreements, in part because the estate will be responsible for the legal fees incurred by the funeral home, crematorium, or cemetary. 

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Who Can Sign A Tax Return for a Deceased Person?

As tax time approaches and passes, my clients often wonder why my office is so stressed, given that we prepare no tax returns on behalf of clients.  The answer is found in the myriad of questions that clients pose, sometimes at the request of a tax preparer, which arise because of a trust or other entity created as part of an estate plan.  These questions often arise from simple misunderstandings regarding the tax return, or serious inability to determine a proper course of action.  

Beginning this year, and for however many years that I am able, I am turning these confounding queries and quandaries into articles for future reference.  Every year seems to have one or two that dominate the time and effort we expend, usually without charge, in service to our clients' goals.  As you consider the following question and discussion, remember than most of our clients employ some form of trust in their estate plan, and settlement of the vast majority of these involve no probate, no involvement with the probate court, and of course, no purpose in seeking or obtaining appointment of an executor.  The general information that we provide indicates that the successor trustee should file the deceased's final tax return, and by implication, that s/he can sign the return.

Every season we are besieged by hysterical calls usually within weeks, days or hours of the filing deadline; "I was just advised that a trustee cannot sign the final tax return, and only and executor or administrator appointed by a probate court can file the return,  Help!"  Often, this is the first my office learns of the death of a client, which only adds to the "drama." Often, too, clients' successor trustees have already consulted with another lawyer, who has asked for an extravagant retainer to prosecute a hastily prepared probate to seek and obtain appointment of a fiduciary. Fortunately, there is no reason for hysteria or concern, and the answer is quite simple and satisfying.

So, who can sign a return for a deceased person? Such a common and simple question, which apparently elicits different responses from different people, some wrong or partially wrong, and more often than not, missing a more important question soon discovered. 

To begin, the answer to the direct question is rather simple; a surviving spouse, trustee, executor, guardian, custodian, administrator, or conservator can sign a return on behalf of a deceased person. An agent or attorney-in-fact under a power of attorney cannot technically sign the return; the powers are void on the death of the Principal. What if, however, the agent/attorney-in-fact has property or assets of the deceased? Then the agent is a custodian and can sign as a custodian.

The answer to that question begs another: who can negotiate a refund check?  The answer should be determined before a fiduciary actually has a check in hand.  Regardless, determination and resolution should not impede filing the return.  In other words, there is time to make a determination if there is a problem, and implement a solution if necessary.    

The material question isn't even whether there is a refund, but whether there will be a substantial refund. If there is any refund, technically, a probate has  to be opened to appoint a fiduciary (executor or administrator) empowered to negotiate the check, which will be made out to the deceased or the estate of the deceased.  Clients often ask, "Can I just deposit the check into the trust account?"  Legally, no.  Practically, maybe.  

Because I can't assure a client that a bank will negotiate a check made out to a deceased person or the estate of a deceased person, suggesting they may do so would be poor "practical" advice.  Legally, though, there is no real option.  The trust estate and probate estate are different estates, and they may have different beneficiaries, and fiduciaries. Legally treating one as another is dangerous and unwise.  Despite that banks do and have  permitted negotiation of such checks, an executor or administrator should be appointed to negotiate the check and distribute, legally, the proceeds. 

IRS uncertainty makes the matter even more difficult; if the return is signed on behalf of the deceased by someone other than the deceased, and the date of death is not disclosed or is overlooked by the Service, there is the possibility that the refund check will be drawn payable to the deceased, and not to the estate of the deceased.  This occurs, too, when a tax preparer (layperson or professional) is unsure whether or how to advise the Service that the return is a final return on behalf of a deceased.  A check drawn payable to the deceased is significantly more likely to be accepted by a bank on deposit into the deceased's irrevocable trust, than would a check made out to the "estate of" the deceased. I advise clients that a probate fiduciary should be appointed to negotiate the check.  

There is no answer to the question, what constitutes a "substantial refund." If the refund is too small, less than fifty dollars, for example, it may not make sense to appoint an executor/administrator given the cost. The court filing fee for a Summary Administration without a Will typically exceeds $80.00.  Obviously, the circumstances and the amount of the refund will dictate or inform the proper course of action.  

"But I only did the return to get the refund," is a common lament.  "Yes," I reply, that may be true, but you also prepared the final return because it is your duty to do so, and there is no way other than filing the return to know that you have accounted for all income, and paid all taxes that are due.  These are your legal responsibility.  In other words, had you called and asked, 'I am confident that the deceased doesn't owe any taxes, so I don't have to file a final return?' my reply would have been along the lines that the only real way to know, and more importantly, the only way to start a statute of limitations running if you are wrong, is to file the return."     

Bottom line? A successor trustee can and should sign the return.

The following is from the IRS in response to the question "who can file a decedent's return?"

The personal representative of an estate is an executor, administrator, or anyone else in charge of the decedent's property. The personal representative is responsible for filing any final individual income tax return(s) and the estate tax return of the decedent when due. You may need to file Form 56, Notice Concerning Fiduciary Relationship to notify the IRS of the existence of a fiduciary relationship. A fiduciary (trustee, executor, administrator, receiver or guardian) stands in the position of a taxpayer and acts as the taxpayer.

So when an advisor says a trustee cannot sign a return, they are probably saying that the trustee "shouldn't," sign the return under the circumstances, or advising that they may not be able to negotiate the check. Clearly, a fiduciary or other representative can sign a return on behalf of a deceased.

Trump Administration Initiative Helps States with More and Faster COVID-19 Testing in Nursing Homes

Nursing homes with three or more COVID-19 cases will be the first to receive on-site diagnostic test equipment from federal health agencies, starting in regions where infections are spiking.

The news was announced Wednesday by the Centers for Medicare & Medicaid Services (CMS), a day after Administrator Seema Verma revealed a new federal plan to deploy rapid point-of-care COVID-19 testing capabilities to eldercare facilities nationwide.

In this week’s rollout, federal agencies will prioritize about 2,000 facilities in hard-hit locations such as Florida, Arizona and Texas. Each approved facility will receive one diagnostic testing instrument and associated tests. Once equipment is distributed, operators can procure additional tests directly from the manufacturers, health officials told nursing homes in a conference call last week, according to McKnight's Long-term Care News.

According to a statement released by Verma, 

The goal is to support on-site infection control and prevention through universal testing. It gives nursing homes the ability to swiftly identify residents that need to be isolated and mitigate the spread of the virus. As one more tool in the toolbox, it represents an important step toward the long-awaited reunion of residents with their loved ones.

To take part, nursing homes must have the capability to test residents and staff on a weekly basis or in accordance with state and local health department guidance, according to the Department of Health and Human Services (DHS), which is helping to distribute the equipment. Visitor testing is also possible “if appropriate for that facility,” the agency added.

The equipment, including the Quidel Sofia and Sofia 2 instruments and BD Veritor Plus Systems, uses antigen tests that can quickly detect fragments of viral proteins in nasal cavity swab samples, providing results in minutes. 

While point-of-care tests may be “slightly more likely” to have a false negative result than laboratory tests, “these are the best, most cost-effective tests we have on the market right now,” said Adm. Brett Giroir, Assistant Secretary of the DHS during the Wednesday call.

“We think this is going to be a turning point in this fight against the coronavirus and keeping our residents safe,” CMS’s Verma concluded.

The new federal initiative was announced after months of lobbying for better testing access by the eldercare industry. Now some advocates have questions. Katie Smith Sloan, president and CEO of LeadingAge, has called for more information about staff training, access to ongoing test supplies, and test reliability for operators’ planning purposes. 

According to CMS, there are more than 200,000 confirmed or suspected cases of COVID-19 and more than 35,000 COVID-19 deaths among nursing home residents as of July 9, 2020. Additionally, the Centers for Disease Control and Prevention (CDC)  recommends that nursing homes perform baseline testing of all residents and staff, followed by regular screening and surveillance through routine testing to detect potential outbreak situations early and reduce morbidity and mortality.