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September 2017

Recently, in a case that was litigated before the New York Court of Appeals, that Court ruled that terminally ill patients do not have the right to seek life-ending drugs from doctors.  The case was initiated by three people with terminal illnesses who argued that New York’s ban on physician-assisted dying should not apply to people who are seeking a merciful end to an incurable disease.  The Court held that while the law allows terminally ill patients to decline life-sustaining help, it does not permit anyone – whether it be a physician or anyone else – to help those same patients end their lives.

Currently, there are six states that permit physician-assisted dying.  They are Colorado, Vermont, Washington, California, Oregon and Montana.  The District of Columbia also allows it.  Oregon is the state where physician-assisted dying has been in place the longest.  In 1994, that state enacted the "Death with Dignity Act" and it has been in place ever since then.

The medical community is torn on this issue.  One the one hand, some doctors feel that physician-assisted dying should be optional for people with terminal illnesses.  They argue that people in this situation want to have control over their own bodies and their own lives and they are generally concerned about the future physical, emotional and mental distress associated with the progression of their disease.  On the other hand, some doctors argue that pursuant to the Hippocratic Oath, doctors should only heal and not do any harm to their patients.  These doctors argue that if they were compelled to take part in physician-assisted dying, then they would be relegated to simply following the will of the patient or perhaps third parties (like insurance companies) or the law.  Further, they argue that they would not be practicing medicine … instead, doctors would merely be providing a medical service that goes against the oath they took to heal their patients.

Where does Connecticut stand on this issue?  In 2014, a bill entitled "An Act Concerning Compassionate Aid in Dying for the Terminally Ill" failed to pass in the Connecticut Legislature.  In April of 2015 it was brought before the Connecticut Legislature for the second time and again, it failed to pass.  The bill was vigorously opposed by pro-life groups on the theory that the sanctity of life is a principle that should continue to be protected by the law.  On January 19, 2017, a bill entitled "An Act Concerning Aid in Dying for Terminally Ill Patients" was introduced to the Connecticut Legislature for the third time.  Right after its introduction, it was referred to the Joint Committee on Public Health.  Currently, there has been no further movement on that bill … it is still pending with the Joint Committee on Public Health.

It’s anyone’s guess as to when or whether Connecticut will enact this legislation.  Undoubtedly, this issue is not going away any time soon.  If you would like to know more about physician-assisted dying in Connecticut, please don’t hesitate to contact the estate planning attorneys at Cipparone & Zaccaro.  We’d be happy to provide you with a draft of the pending legislation and answer any questions you may have about this sensitive topic.  

 

Over the years, I’ve experienced a couple of instances where a non-family  member brings a client to me for estate planning who was estranged from his family.  The client wants to leave a major part of his or her estate to the non-family member. Let’s consider a hypothetical example.  

An elderly man is brought to an attorney’s office by the man’s financial advisor.  After meeting with both the elder and his advisor, the attorney determines that this man has a son who lives in another part of the country who is rarely involved in the elder’s life.  For his part, the financial advisor checks in on him, helps him to pay his bills, takes him to his doctor’s appointments, takes him shopping, helps him to take care of his home and does all the things that a caregiver would normally do.  The elder – acknowledging what the financial advisor has done for him – wants the attorney to create an estate plan where he leaves everything to his advisor.

The first thing to keep in mind is that from an ethical standpoint, the attorney is required to seek the lawful objectives of his client once he has been retained.  At the outset, therefore, the attorney must arrange to meet with the elder alone at a place where the elder can speak freely without the financial advisor being present.  The attorney must advise his client that this formality is a necessary part of the engagement because he has to make certain that the elder’s son cannot thwart the elder’s decision to leave everything to the financial advisor.

Further still, the attorney should consider recommending under these unique circumstances that a psychiatrist examine the client and submit a written opinion as to the elder’s capacity and willingness to leave his estate to his financial advisor.  While this step may seem like an extraordinary thing to do, it provides an objective, professional opinion to support the client’s unusual wishes.  

Finally, the attorney should advise the client that he would like to learn more about the relationship between his client and the financial advisor so the attorney can better determine whether his client’s decision to leave everything to his financial advisor is based on undue influence.  That means the attorney might have to garner information from other people who could potentially testify, not only to the estranged relationship between father and son but also the close relationship between the client and his financial advisor.  Last, because the financial advisor has a fiduciary relationship with the elder, the attorney should do a search to determine whether the financial advisor has any history of any disciplinary or ethical violations and any lawsuits or regulatory complaints brought against the advisor concerning a breach of his fiduciary duties to a past client.

Ultimately, if the elder has the capacity to make estate planning decisions and there is no evidence of exploitation, an attorney can help his client leave their estate to someone outside their family. The elder and his or her attorney must  proceed with caution, however, to show that the elder had the requisite capacity to understand who were the natural objects of his bounty, the property that he or she holds and the consequences of naming a professional advisor as the beneficiary of the estate.  Further, the attorney has a duty to satisfy himself that facts supporting a claim of exploitation do not exist.  If you have the unique situation described above, please don’t hesitate to call the estate planning attorneys at Cipparone & Zaccaro.  We’d be happy to discuss your scenario to determine what steps are needed to accomplish your unique estate planning goals.

 

A “Special Needs Trust” is designed to supplement a disabled person’s quality of life without affecting that person’s eligibility for means tested programs. There are two main types of Special Needs Trusts.  A First-Party Special Needs Trust and a Third Party Supplemental Needs Trust.  This article will focus on First-Party Special Needs Trusts.  For information on the other type, see my prior blog on a Third-Party Supplemental Needs Trust.      

Programs like Supplemental Security Income (SSI) and Medicaid (also known as Title XIX or Title 19) are referred to as “means tested” programs, because eligibility is based upon the disabled person’s low income and low asset level.  Sadly, a disabled person can be ineligible for means-tested programs like Medicaid and SSI if they are even one dollar over the asset or monthly income limits.  One solution is a First-Party Special Needs Trust. 

A disabled beneficiary funds a First-Party Special Needs Trust with his or her own funds. Hence, the term “First-Party.”  A First-Party Special Needs Trust is also known as a self-settled trust.  As a general rule, self-settled trusts are deemed to be either countable assets or penalizing transfers for Medicaid and SSI purposes.  Thankfully, federal law (OBRA ’93) creates an exemption for certain types of self-settled trusts.  

There are two subcategories of a First-Party Special Needs Trust that are exempt.  The first is commonly referred to as a “Special Needs Trust” and sometimes referred to as a “d4A Trust”.  The second is commonly referred to as a “Pooled Trust” and sometimes referred to as a “d4C Trust.”  The terms d4A and d4C come from the federal statutory authority for these trusts found in 42 U.S.C. 1396p(d)(4)(A) and in 42 U.S.C. 1396p(d)(4)(C).  

There are some characteristics common to both Special Needs Trusts and Pooled Trusts.  The disabled person establishes both a Special Needs Trust and a Pooled Trust with his or her own funds.  If the disabled person is not capable of establishing the trust, the parent, grandparent, or guardian of the disabled person or a court can create the trust.    Both types are intended to hold the amount of assets or excess monthly income necessary to bring the disabled person within eligibility limits for programs such as Medicaid, SSI or Qualified Medicare Beneficiary (“QMB”).  Each trust can have only one current beneficiary and the Trust funds can only be expended for the disabled person’s sole benefit during his or her lifetime.  As a compromise for allowing eligibility for government benefits, these Trusts must contain a payback provision.  A payback provision requires that, upon the disabled beneficiary’s death, the balance of the trust repays the state for all amounts of benefits expended on behalf of the disabled person.  Both types of trusts are irrevocable; they cannot be changed after signing.  

There are also distinct differences between a Special Needs Trusts and a Pooled Trust. A Special Needs Trust can only be established and funded by a disabled person while that person is under the age of 65.  In contrast, a Pooled Trust can be established by a person of any age, including those 65 and over. If the disabled person is over 65, however, the income transferred to the trust in a month cannot exceed than average cost of one day in a nursing home (currently $414 in Connecticut) unless the Connecticut Dept. of Social Services approves a spending plan showing the beneficiary will expend all of the income in either 6 months or over the beneficiary’s life expectancy.      

Another major difference between a Special Needs Trust and a Pooled Trust is the management and choice of Trustee.  The disabled person can name any independent, competent adult to serve as Trustee of a Special Needs Trust.  In comparison, only a government-approved, non-profit association can serve as the Trustee of a Pooled Trust.  Moreover, the Trustee of a Pooled Trust does not separately manage the disabled person’s funds. Instead, the Trustee pools the investments of all of its beneficiaries and only separately accounts for the disabled person’s portion of those pooled investments.  Connecticut has only one approved non-profit association -- PLAN of Connecticut, Inc. of New Britain, CT. Only attorneys who are members of PLAN of Connecticut can set up a Pooled Trust for a disabled beneficiary.   

Perhaps the most significant difference between a Special Needs Trust and a Pooled Trust arises when the disabled person dies.  With a Special Needs Trust, if any balance remains after the payback to the government, it can go to the remainder beneficiary named by the disabled person (such as a sibling or parent).  For a Pooled Trust, the beneficiary can designate that all of the remainder goes either to the pooled trust charitable fund (used for other needy plan beneficiaries) or all to the state of Connecticut.   No funds in a Pooled Trust can return to the family of the disabled person. 

If you think a First-Party Special Needs Trust could be appropriate for you or a loved one, contact the estate planning attorneys at Cipparone & Zaccaro, PC to discuss this option. Call (860) 442-0150 today.