Unfortunately, divorce cases are extremely expensive and bitter. Probate Judges are vested with virtually unlimited authority to make a reasonable allocation of assets, an award of alimony, child custody and/or child support. Only child support can be computed with any certainty since the family court publishes and follows guidelines.

Alimony and a division of assets can  vary significantly. Sometimes judges differ in their interpretation of  the law and can result in differing results. No definitive formula can be provided. You are, however, permitted to specify any applicable division of assets, if any, and alimony, if any, in an agreement signed by future spouses before the marriage. These so called prenuptial agreements have been upheld in Massachusetts repeatedly.

In DeMatteo v. DeMatteo, the husband was worth approximately $112,000,000. The prenuptial agreement provided that the spouse to whom he was married to for seven years would receive $35,000 per year for life, health insurance, and receive the family home worth approximately $1,000,000. At the time of divorce, the wife filed suit seeking to declare the prenuptial agreement invalid. The Massachusetts Supreme Judicial Court  upheld the agreement stating that it had been negotiated freely prior to the marriage and there had been full disclosure of the parties assets as well as each parties rights. In other words the agreement was signed voluntarily and the terms could not be revisited.

Moreover, in Austin v. Austin, the Massachusetts Appeals Court ruled that alimony can be governed by the terms of the prenuptial agreement, unless the agreement would leave one spouse destitute.

Prudence dictates that when marrying one should protect oneself with proper planning. As stated above over 50% of the marriages will end up in divorce .

To review the parties to a prenuptial agreement must make full financial disclosure. The terms of a prenuptial agreement must be negotiated fully, freely and fairly.

For more information about Prenuptial Agreement Planning, please contact us at (978) 682-1141.

The purpose of this resource allowance is to allow elderly spouses to maintain a measure of financial security. It will help elderly spouses avoid the indignities of impoverishment, and to avoid the need for premature nursing home placements.

For 2010, there are no increases in the income or asset amounts allowed to the community spouse:

Income: If the nursing home resident is married to a spouse who lives at home, the healthy spouse needs income to live. The spouse who lives at home is allowed to keep some, or all of the income that is paid in the name of the spouse who is in the nursing home. This is called the Minimum Monthly Maintenance Needs Allowance (“Minimum MMNA”). On July 1, 2009 the MMNA was increased to $1,821.25, and remains at that amount until July 1, 2010.

The Minimum MMNA is the minimum amount of income needed for living expenses by the spouse who is still healthy enough to live in the community. If her/his income falls below this amount, the healthy spouse can pursue a process to keep income or assets of the institutionalized spouse.

The spouse who needs nursing home care is only allowed to keep income of $72.80 per month as a personal needs allowance

Housing expenses for the spouse at home that are more than a standard amount I request need to be made to   increase the Minimum MMNA.  Federal Medicaid Law gives you the right to a fair hearing for “any individual whose claim for medical assistance under the plan is denied or is not acted upon with reasonable promptness.” It also requires that Medicaid payment for services be continued during the time an application is waiting for a fair hearing, and the state must make corrective payments if the applicant wins the fair hearing.

The Maximum Monthly Maintenance Needs Allowance. The Maximum MMNA is $2,739.00 during 2010, unchanged since January 1, 2009 (previously as of January 1, 2008: $2,610). This is the upper limit on a nursing home resident’s income and/or assets that are allowed to his/her spouse, unless the healthy spouse shows exceptional circumstances.

The Standard Shelter Expense is the amount included in the Minimum MMNA for rent, mortgage payment, property taxes and insurance, and/or condo maintenance charges. If these housing expenses are greater than an amount set by Mass Health, the extra expenses may be credited to the community spouse’s Minimum MMNA.

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Medicare and private health insurance will not cover the costs of extended nursing home care for an older adult.

One solution is Long Term Care Insurance Policy. However, it tends to be costly and some people won’t qualify for LTC Insurance due to pre-existing medical conditions. So what is one to do? Some consider qualifying for Medicaid to cover old age disability care costs.

This brings me to the Medicaid Trust or Income Only Trust, a key tool in the elder law toolbox. The purpose of this type of trust is to protect or shield the trust principal (your assets) from the cost of long-term care, should you become ill and require nursing home care.

In a typical Medicaid trust, income earned will be available to the grantor (the person establishing the trust). However, the most important provisions of this type of trust are: 1. The grantor is denied access to principal, and 2. The trust is irrevocable (can’t be changed). Even though the trust is established for “irrevocable Medicaid eligibility purposes,” the grantor is permitted to designate the ultimate beneficiaries. In other words at some future date, the death of the grantor, the Principal of the Medicaid trust assets will be divided between the children as specified by the grantor.

Please remember that there is a five-year look-back. Assets transferred into the Medicaid trust are not fully protected until five years after the assets are transferred.

Also, in a recent court decision the Massachusetts appeals court held that even though an irrevocable, income-only trust expressly prohibited distributions of principal, other provisions in the trust could conceivably permit the trustees to invade trust assets, and thus the trust is countable for Medicaid purposes. Doherty v. Director of Medicaid. The Court concluded that a grantor cannot have his/her cake and eat it too. Make sure your Medicaid Trust is drafted to comply with Federal and State requirements by a lawyer experienced in creating these types of trusts. Non-compliance withholding in the Doherty could put your assets at risk.

Lastly there will be no probate of the assets contained in a Medicaid Trust since the trust serves as a substitute for a will.

The sooner one acts to establish an irrevocable Medicaid trust, the better. To learn more contact Elder Law Attorney Ramsey Bahrawy, a competent and experienced estate planning and elder law attorney. He will help you to become more aware of the many options that exist in estate planning and elder law. He offers a wealth of free estate planning/elder law information including a local cable access TV show called ‘Your Money, Your Life’. Attorney Ramsey Bahrawy is a Massachusetts licensed attorney and has been on good standing since 1979. He is also a member of the National Academy of Elder Law Attorneys and Merrimack Valley Estate Planning Council.

Attorney Bahrawy understands and is experienced in writing irrevocable Medicaid trusts. Contact him at (978)-682-1141 or Ramsey@BahrawyLaw.com.

The election is no doubt a big story. With the election comes speculation and uncertainty. However, given that the estate tax is not being discussed, this is clear sign that the federal estate tax law is likely not going to be addressed. In other words the federal estate tax will return with an exemption of $1 million and an estate tax rate of 55%. People with more than $1 million in assets will be affected if the estate tax cuts are not extended prior to January 2011.

Those of you who read this blog or follow me on social media know that I advocate estate planning as tool for preparing for the future to achieve one’s hope and dreams. I do not believe in responding to an election with a knee jerk reaction.

In all likelihood there will be some changes in the coming months in areas such as income taxes and dividend taxes and capital gains taxes. As regards the estate tax, failure to pass a new law may unfavorably impact the rules for passing your assets on to the next generation.

At this point in time it would be wise adjust your planning strategies by to preparing your estate plan for the return of the federal estate tax under the pre Busch tax cuts rules ($1 Million exemption and 55% tax rate).

I monitor these types of legal developments for my clients and advise them how any changes would impact them, their family and their estate plan.

For now my suggestion is to educate yourself and consider adjustments to your estate plan. Remember that your estate plan should be reviewed on a periodic basis and adjusted when appropriate.

Ramsey A. Bahrawy is an attorney licensed to practice law in Massachusetts. His practice concentrates on estate planning and administration, elder law and real estate He welcomes the opportunity to discuss the contents of this article, and any other legal matter in his practice area, with you. He can be reached at BAHRAWY LAW OFFICES, 55 Main Street, North Andover, MA 01845 (978) 682-1141. You may also view more of his biographical information, plus other helpful information, such as his blog, at his law firm website at http://www.BahrawyLaw.com

The election is no doubt a big story. With the election comes speculation and uncertainty. However, given that the estate tax is not being discussed, this is clear sign that the federal estate tax law is likely not going to be addressed. In other words the federal estate tax will return with an exemption of $1 million and an estate tax rate of 55%. People with more than $1 million in assets will be affected if the estate tax cuts are not extended prior to January 2011.

Those of you who read this blog or follow me on social media know that I advocate estate planning as tool for preparing for the future to achieve one’s hope and dreams. I do not believe in responding to an election with a knee jerk reaction.

In all likelihood there will be some changes in the coming months in areas such as income taxes and dividend taxes and capital gains taxes. As regards the estate tax, failure to pass a new law may unfavorably impact the rules for passing your assets on to the next generation.

At this point in time it would be wise adjust your planning strategies by to preparing your estate plan for the return of the federal estate tax under the pre Busch tax cuts rules ($1 Million exemption and 55% tax rate).

I monitor these types of legal developments for my clients and advise them how any changes would impact them, their family and their estate plan.

For now my suggestion is to educate yourself and consider adjustments to your estate plan. Remember that your estate plan should be reviewed on a periodic basis and adjusted when appropriate.

Ramsey A. Bahrawy is an attorney licensed to practice law in Massachusetts. His practice concentrates on estate planning and administration, elder law and real estate He welcomes the opportunity to discuss the contents of this article, and any other legal matter in his practice area, with you. He can be reached at BAHRAWY LAW OFFICES, 55 Main Street, North Andover, MA 01845 (978) 682-1141. You may also view more of his biographical information, plus other helpful information, such as his blog, at his law firm website at http://www.BahrawyLaw.com

So what is a revocable living trust (hereafter RLT) and what are its pros and cons?

A trust is a written agreement established by a donor or grantor who nominates a person (trustee) with the responsibility of managing property for the benefit of others (beneficiaries). The grantor, trustee and beneficiary can all be the same person. It’s called a “living” trust because it’s created and funded while you’re alive. It’s “revocable” because, as long as you are mentally competent, you can change or terminate the trust at any time, for any reason. NB – An RLT is only one of many types of trusts.

The advantage of an RLT is that it can be used for several excellent purposes such as estate tax planning, providing for your spouse and children, probate avoidance, and avoiding guardianship or conservatorship proceedings. This type of trust can also provide for the uninterrupted financial management of your property during and after your life. It may also reduce or eliminate delays in the distribution of your property.

However, to achieve these goals an RLT trust must be correctly drafted and administered. The negatives of the RLT: The trustee must remain actively involved in managing the trust to avoid errors that may defeat the purpose of the trust; it does not provide asset protection from creditors during your lifetime or after you die (this includes the cost of nursing home care). It does not eliminate the need for a will or for a durable power of attorney, as it may be impractical to put all assets in a trust.

As an estate planning and elder law attorney, the largest and most frequent issue I encounter with an RLT is the failure to properly fund the trust (the trustee forgets to title new assets in the trust’s name). As a result, after death, these assets become subject to a probate court process. The key is remembering to properly fund the trust (make sure assets are titled in the name of the trustee of the trust).

So how can you know if a revocable trust is right for you? The main objective is to understand exactly which goals you are trying to achieve with an RLT. Whether it’s minimizing the estate tax by doubling up on the marital exemption, avoiding the costs, delays and public nature of probate, or simply avoiding the costs and stress associated with a legal guardianship proceeding, it’s essential to carefully weigh the pros and cons of establishing an RLT before making any decisions.

Discussing these matters with your attorney is an excellent way to decipher whether a revocable living trust is right for you. Remember, the trick is to live for today while knowing that your comprehensive estate plan will prepare you and your family for whatever tomorrow may bring. In so doing you can go about the business of enjoying your life without worry.

Ramsey A Bahrawy is an attorney licensed to practice law in Massachusetts. His law practice concentrates in estate planning and administration, elder law, real estate, and business law. He is a member of the National Academy of Elder Law Attorneys. He can be reached at BAHRAWY ALW OFFICES, 55 Main Street, North Andover, MA 01845 (978) 682-1141 or though his law firm website at http://www.bahrawylaw.com

As Baby Boomers have fewer children, they cannot rely on family support systems similar to the ones that their parents enjoyed. Also due to the wonders of modern medicine, Baby Boomers will live longer than their predecessors by approximately ten years. Accordingly, Baby Boomers realize the importance of making proactive life-changing decisions for themselves so that they will live comfortably throughout their “Golden Years.”

Our society places great value on qualities such as safety, preparation, and good performance. Yet when it comes to preparing an estate plan, historically. these concepts have many times been thrown to the wind allowing the pieces to fall randomly. Will Boomers approach planning from a different perspective?
Boomers are quickly realizing that they need to structure their estates in order to achieve their hopes and dreams while minimizing the risk of depleting their assets. In order to avoid making decisions while in crisis mode, Boomers are also aware that they must be prepared for any catastrophic event(s) such as a serious accident, heart attack, or even cancer. For many Boomers it is important that their estates not only reduce the costs, delays and public nature of the probate process, but also the Federal and State Estate Tax.

Of course, Boomers are beginning to recognize that the worst plan is no plan at all!!

The essential lesson here is to not procrastinate! By putting a thoughtful and comprehensive estate plan in place, you will ensure your affairs are handled in the manner you wish while creating comfort for loved ones and peace of mind for yourself. The trick is to live for today and be prepared for tomorrow. In so doing you will experience less worry, and benefit from more personal fulfillment. Rather than worrying about tomorrow, people should form more thoughtful plans today that address the issues surrounding their estate, finances, lifestyle issues, potential future disability and anticipated future needs. This will enable them to go about the business of enjoying their lives, each and every day.

You’ve worked hard to build your assets. It only makes sense that you devote the same amount of energy into protecting them, in the event you die or become disabled.

Thanks for reading, and please share your comments below.
Ramsey A. Bahrawy, Esquire is an attorney licensed to practice law in Massachusetts. His practice concentrates on estate planning and administration, elder law, real estate, and personal injury litigation. He welcomes the opportunity to discuss the contents of this article, and any other legal matter in his practice area, with you. He can be reached at BAHRAWY LAW OFFICES, 55 Main Street, North Andover, MA 01845 (978) 682-1141. You may also view more of his biographical information, plus other helpful information, such as his blog, at his law firm website at http://www.BahrawyLaw.com.

This blog concerns itself only with the rules effective July 1, 2009.

The revised rules for Durable Powers of Attorney are effective July 1, 2009. This new act is very similar to the current Uniform Durable Power of Attorney Act, which will be repealed by the new law. Although the changes to the Uniform Durable Power of Attorney Act are, in fact, few, they are nonetheless important.

Section 43 of the enabling legislation (Chapter 521 of the Acts of 2008) provides: “Except as provided elsewhere in this act, on the effective date of this act: 1. this act shall apply to pre-existing governing instruments, except that it shall not apply to governing instruments which have became irrevocable prior to the effective date of this act…”. Assuming that a Durable Power Attorney was created prior to July 1, 2009, is a “governing instrument,” and that it is not irrevocable, then the new law applies to the powers contained in such an instrument.

Sections 2A-2H to Chapter 201 of the General Laws allowing appointment of standby and emergency proxies are repealed, effective July 1, 2009. They are replaced by G.L.c. 190B § 5-103 which permits the delegation of parental powers by a parent or guardian to a temporary agent for a period up to 60 days. In most respects this appointment is similar to the appointment of standby guardian proxy under the now repealed G.L.c. 201, § 2B. In other words it allows a parent or parents, without court approval, to appoint, in writing, one or more adults as temporary agent for a minor, similar to the “short-term emergency guardianship proxy or proxies” for a minor allowed by G.L.c. 201, § 2B.

The Uniform Probate Code (UPC) is procedurally more complex and creates new levels of expense. The definition of competency has been amended under the UPC and there are new rules regarding the medical certificate.

In conclusion, the guardianship and conservatorship provisions of the Uniform Probate Code includes significant changes to both the law and practice, incorporating many additional protections for minor, incapacitated, and disabled persons and admonishing the court to look for a least-restrictive protection approach.

Thanks for reading, and please share your comments below.

Ramsey A. Bahrawy is an attorney licensed to practice law in Massachusetts. His practice concentrates on estate planning and administration, elder law, real estate and personal injury litigation. He welcomes the opportunity to discuss the contents of this article and any other legal matter in his practice area with you. He can be reached at BAHRAWY LAW OFFICES, 55 Main Street, North Andover, MA 01845 (978) 682-1141. You may also view more of his biographical information, plus other helpful information, such as his blog, at his law firm website at http://www.BahrawyLaw.com