Kathleen M. Martin, Esq., CELA, is a 2002 graduate of Widener University School of Law. She is a Registered Nurse, most recently working as the Nursing Supervisor of the Visiting Nurse Association of Pottstown and Vicinity before going to law school. As an elder law attorney, she approaches the client’s needs holistically, incorporating the social, financial, medical, and interpersonal needs of the client and family in helping the elder live his or her life with dignity as they age.
Ms. Martin is an associate attorney at O’Donnell, Weiss & Mattei, P.C. Her areas of practice include elder law, estate planning and estate administration. She is a Certified Elder Law Attorney (CELA) by the National Elder Law Foundation as authorized by the Pennsylvania Supreme Court and accredited before the U.S. Veterans Administration.
The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship.
Elder Law, What is it and How Does it Impact Me?
Elder Law is a relatively new separate practice area, although the components have been part of the general practice of law for quite some time. Our firm has a Certified Elder Law Attorney (CELA) who is considered a specialist in the area of Elder Law. We also have two attorneys who have earned their LLM designation, which is essentially a Master’s Degree in Tax.
Typically, Elder Law has many areas that can be included in the practice category. Estate and tax planning, Medicaid planning, Medicare and other insurance advice, dealing with incapacity, long term care, veterans benefits, and housing questions are a few of the topics that may be discussed at a typical encounter with an elder law attorney. An elder law attorney will first determine if a basic estate plan is in place, and if not, will discuss the feasibility of doing so. A basic estate plan includes a Healthcare Power of Attorney with Living Will, a financial Power of Attorney and a Last Will and Testament.
A Healthcare Power of Attorney and a financial Power of Attorney are “lifetime” documents. If someone is unable to make financial or healthcare decisions for whatever reason, these documents would have appointed a trusted person to step in and make healthcare decisions based upon that person’s stated wishes, and/or take care of financial decisions and paying the bills. Both are very important for anyone who is 18 years of age or older, but their importance becomes more apparent with elders who are more likely to become incapacitated. A living will ensures that an individual’s end of life decisions are known and someone is appointed to make sure that those wishes are honored. A Will allows one to direct how and when the person’s estate is distributed so that the right thing goes to the right person at the right time, without the undue influence of “in-laws, outlaws, creditors and predators.”
Among the most common questions fielded by elder law attorneys has to do with the senior’s home. Parents often ask whether it would be good long term care planning, and good inheritance tax planning to “sell” their house to their child or children for $1.00. As part of our April, 2012 PCTV show, James Kovaleski, Esquire, discussed the tax ramifications of a decision to transfer title of a house during lifetime. A parent transfers title of a house during his or her lifetime to an adult child, which results in a gift. That child does not live in the home, but the parent may be trying to minimize inheritance tax or “save the house from the nursing home.” If the parent survives one year after the transfer, it does eliminate inheritance tax on the value of the home. However, the child takes on the parent’s basis in the house, or basically what the parent paid for the house when he or she bought it many years ago. Upon eventual sale, the capital gains exclusion is lost, and a large capital gains tax bill may result. Inheritance tax for direct descendants is 4.5 percent, lower than the current capital gains tax rate. The parent may incur gift tax also, although the current exemption amount is $5 million. If the parent gives the adult child his home in his Will, there is a step up in basis, often completely eliminating the capital gains tax issue.
Some other disadvantages to the parent transferring the title of the house to the children is that it could create an extensive period of ineligibility for Medicaid should the original owner, the parent, require long term nursing home care within the next five years. Furthermore, this removes a large asset from the parent’s estate, one that they could have used for a reverse mortgage or to fund other care. Additionally, the adult child could force the parent to leave, intentionally or unintentionally by having creditors or finding themselves in divorce situation. In summary, the decision to transfer the house to children should be discussed with an elder law attorney.
David A. Megay, Esq., speaking at SCORE business planning seminars on 4/23/12, 9/10/12, and 11/5/12 (contact SCORE at 610-327-2673).
Kathleen M. Martin, Esq., speaking at Healthy Lifestyles Expo at Montgomery County Community College on 4/20/12 at 12 noon (call 610-323-9563 for more info).
Kathleen M. Martin, Esq., co-presenting at Montgomery Bar Elder Law Committee on 4/24/12 at Lunch and Learn from 12-1:30 p.m. (contact Montgomery County Bar Association at 610-279-9660).
OWM Law hosting Business Card Exchange with Phoenixville Regional Chamber of Commerce at our Phoenixville office on 4/19/12, 5-7 pm.
OWM Law sponsoring First Friday celebration in Phoenixville on 5/4/12, 6/1/12, 7/6/12, 8/3/12, 9/7/12 and 10/5/12 - please visit our table.
Read Legal Ease every other Sunday in the Pottstown Mercury.
Watch Legal Talk, brought to you by OWM, on PCTV, Tuesdays at 8:30 on Channel 28, and Thursdays at 9:30 p.m. on Channel 98, or on our website at www.owmlaw.com/legal_talk/legal_talk.php.