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Pat Bloom-McDonald on Womens Radio Network by Open Forum with Marcus Edwards
Patricia Bloom-McDonald • Oct 06, 2014

Marcus Edwards: And we are back here on Open Forum presented by the Womens Radio Network. I’m your host, Marcus Edwards, and it’s my pleasure today to introduce everybody to my next guest.  I’m now joined by attorney Patricia Bloom from Patricia Bloom-McDonald’s Attorney at Law. Mrs. Bloom, thank you for joining me today.

Attorney Bloom-McDonald: Hi, this is Attorney Bloom-McDonald.

Marcus Edwards: Let’s talk about how you got started, um, Patricia. If you would, give us some insight on the inspiration behind your work as an attorney. What was it that led you into law?

Attorney Bloom-McDonald: Well, I like helping people, especially the retired person, or older, and I find that I work well with that age group, where a lot of people don’t have patience (throat clear). I love listening to their stories, and I love being able to help them in their, uh, later years, so they can retire comfortably, and or get long term care.

Marcus Edwards: Excellent. And, now, you’re involved in several different aspects of law. When it comes to estate planning, probates, as well as residential real estate, um, talk to us about this type of law …

Attorney Bloom-McDonald: And elder law.

Marcus Edwards: … Mm-hmm (affirmative), and Elder Law as well, which, uh, which is new to me. Talk to us about Elder Law, what does entitle?

Attorney Bloom-McDonald: Elder Law is a combination of all of the other fields, because it works with the retired individual in preparing for their twilight years. So, we put together an estate plan that they, um, grow with as their health and age changes. And then, um, once they have, um, taken care of their estate, and they don’t have any money any longer, then I help them apply for Medicaid if they qualify. And, um, I also help them sell their home if they are going to relocate to an assisted living, or into a nursing home, and they need those funds to help pay for those.

Marcus Edwards: Understood, and, so, you’re able to help them put together a plan for the best sus, best set for their needs, and help them succeed, uh, in the latter part of life there, through retirement and such.

Um, I also know that in this regard, in many ways there are different options that are available to those of a certain age group, is that right?

Attorney Bloom-McDonald:  That’s right.

As we age, uh, life happens to all of us, you know, we, at one point, um, maybe in their sixties, they might name, um, their brother to be the estate planning, uh, the executor, or the personal representative. Um, and then later, as their brother ages, they may find that that’s maybe not the great, greatest idea, and, so, maybe in their seventies they might state that they want one of their children to do it, or, a younger cousin.

So, there’s always, um, changes that take place. Um, usually if there’s one, if a married couple, and one is ill, then we can do some transfer of assets from one healthy spouse, um, from the sick spouse to the healthy spouse, so that we can shelter those assets for future use.

Marcus Edwards : Understood.

For the listeners who are joining us today, um, many of them are perhaps aware, and have the, uh, understanding about what they call reverse mortgages. Does any of that have to do with the work that you’re involved in?

Attorney Bloom-McDonald : Yes, many times my clients, um, choose to do a reverse mortgage so that they don’t have to pay their forward mortgage any longer, so they can pay for their medicines instead, or, um, visit their grandchildren that, you know, may live out of state, or, um, help to even pay some of their longer term care. For instance, help the home aid worker so they can live in their home longer.

Marcus Edwards : Absolutely, and that’s exactly what it comes down to; making a way for them to be able to sustain their quality of life. Whether it has to do with down, down sizing a bit, or preparing in some sort of other way, uh, so they can continue to, um, you know, have the freedom and luxuries that they, uh, need and enjoy.

Uh, with this being the case, how important is it when it comes to preparing a head of time? We’re speaking about, obviously, once you’ve, you know, reached your senior citizen age, or age of retirement, sixty-five, or what have you, but how much of the work that you’re involved does it take place with those prior to, uh, getting to that point?

Attorney Bloom-McDonald: Well, I like to, um, work with a client as young as possible, uh, as long as their over the age of eighteen years old, but typically I get a client who’s, um, in their fifties, because their thinking about retiring, retiring.

Um, they want to know what to do with their 401K’s or the IRA’s. They want to think about maybe, possibly, um, getting long term care insurance. So that, if, you know, as they get older they have, uh, while they’re still healthy, um, they can get them insurance, and help pay for, uh, in home health aid.

There’s also a five year look back period when you’re applying for Medicaid. So there’s also, so you want to shelter those assets as soon as possible, get past that look back period. But most importantly you want to sign documents while you have the mental capacity, because once you have, um, a lower mental capacity, or you don’t understand your documents, or you don’t even know who your heirs are any longer, then you don’t have the right to make those decisions any longer, the court will appoint somebody instead.

So, it’s important that you appoint somebody while your cognisance of what’s happening in your life, so then you can appoint your children, and know who your heirs are, and know what assets you have, and who you want them to go to.

Marcus Edwards : Understood.
Well, you’re helping your folks, helping your clients rather in an outstanding way, and we want to encourage those who are in your area to definitely take advantage of all the sources that you’re providing there, at your firm. They can do so by reaching you through your, uh, website, is that right.

Attorney Bloom-McDonald: Yes, they can, yep …

Marcus Edwards : Wonderful.

Attorney Bloom-McDonald : … and that is at www.mcbloomlaw.com. It’s m-c-b-l-o-o-m-l-a-w.com. I love my work, I love my clients, and I look forward to meeting anybody who needs help.

Marcus Edwards : Wonderful.
Thank you again for coming on the show today and speaking with me, it’s been a pleasure having you on Open Forum.

Attorney Bloom-McDonald: Thank you for inviting me.

Marcus Edwards: Your welcome.

Listeners, stick around. We’ll be back here on Open Forum with another special guest right after this quick commercial break, and a quick station mention.

Everyone who’s joining us today, please do not forget that Womens Radio Network is pleased to be working the Avon Foundation, and visit avonfoundation.org to learn about the Speak Out Against Domestic Violence campaign.

I’m Marcus Edwards, stick around. You’re listening to WRNW1.com.

Using a Credit Card When You Have a Special Needs Trust

25 May, 2023
A special needs trust (SNT) allows you to meet your needs while receiving government benefits, such as Medicaid/MassHealth and Supplemental Security Income (SSI). When you have a special needs trust, you can use it to pay for goods and services government benefits do not cover, such as therapy, education,and housing. Since receiving income directly from your trust would jeopardize your eligibility for benefits, your trustee cannot give you cash from your SNT. When you use a credit card for permitted transactions, and your trustee pays off the balance with funds from your trust, these payments to a credit card company are not considered income. An SSI or Medicaid/MassHealth recipient who is capable of managing their own affairs can therefore use a credit card to make small purchases, and the trustee of the special needs trust need not micromanage every transaction. In the past, beneficiaries of SNTs sent their bills to their trustees for payment. Today, an individual with an SNT who qualifies for a personal credit card may find that using a credit card is more convenient. Credit cards have several benefits. Using a credit card to manage payments from your special needs trust allows you to maintain independence, gain access to some of the advantages of a credit card, and easily keep records while preserving your eligibility for Medicaid/MassHealth and SSI. Although credit cards can help people manage their special needs trusts, there are also several important restrictions and considerations to keep in mind. Consult with a special needs planner to ensure all transactions are acceptable under the trust's rules and comply with government regulations. The Benefits of Using Credit Cards When You Have a Special Needs Trust If you have a special needs trust, using a credit card has many benefits, including: Independence : Allowing you to maintain your independence. You can use your card to make qualifying purchases yourself. Your trustee does not have to make the transactions for you. Access to the Typical Advantages of a Credit Card : Using it responsibly can help you establish or build credit history, which may be important for your future financial needs. Record-Keeping : Credit cards provide easy record-keeping and a convenient way to monitor transactions from your special needs trust, which can also help special needs trustees fulfill their duty to maintain records. When you use your card, your trustee can observe your purchases and ensure that all expenses are allowable under the trust’s rules. Your statements can help your trustee keep track of funds leaving the trust. Benefits Eligibility : While adhering to Medicaid/MassHealth and SSI’s income and asset limits, you can access funds from your SNT. Credit cards can help prevent your trustee from accidentally providing you with cash payments that could affect your eligibility for government benefits. Considerations When Using a Credit Card for Your Special Needs Trust While you can use a credit card to access funds from your special needs trust for certain transactions , restrictions apply. If your trustee sees a charge on your card that could affect your benefits eligibility , they can flag it for review. You cannot use your credit card to pay for food and shelter, which SSI would cover. When administering your funds, your trustee must ensure that any expenditures are for your sole benefit if you have a first-party special needs trust. While using a credit card is appropriate, you should not use a debit card. Debit cards are considered cash income. Best Practices When using a credit card for a special needs trust fund, remember several best practices. Choose a card with low fees and interest rates. Set a clear budget and monitor transactions regularly. Keep thorough records and receipts of expenses. Consult with your special needs planning attorney. A special needs planning attorney can help you navigate the rules that apply to your trust and understand how to use a credit card to preserve your Medicaid/MassHealth and SSI eligibility. 

How an ILIT can help offset estate taxes

12 May, 2023
With the Federal estate tax exemption possibly about to be lowered, it may be time to think about steps you can take to keep your estate from being taxed. An irrevocable life insurance trust allows you to pass on money to your heirs while avoiding both the federal estate tax, as well as any applicable state estate tax which is currently $1 million in the Commonwealth of Massachusetts. Senate Democrats have proposed lowering the current estate tax exemption from $11.7 million for individuals and $23.4 million for couples to $3.5 million for individuals and $7 million for couples. While it is unclear if this proposal will pass, it is likely that some change to the estate tax is coming. Even if Congress does not take any action, the current rate will sunset in 2026 and essentially be cut in half, to about $6 million per individual. In the Commonwealth of Massachusetts, the current estate tax exemption is $1 million for individuals and is taxed at dollar $1.00. A proposal to raise it to $3 Million and the tax to start at $3 Million (not at $1.00) has been submitted in the legislature but has not yet been voted on or enacted. One way to make up for any estate tax your estate may have to pay is by setting up an irrevocable life insurance trust [ILIT]and funding it with a policy that has a death benefit that would pay your heirs some or all of the amount your estate will be taxed. If you purchased such a life insurance policy directly, it could end up being taxed as part of your estate. But if a trust owned the policy, it could pass outside your estate. While a life insurance trust can be highly beneficial, it is also complicated to set up and maintain properly. The following are some of the requirements: Trustee . If you are setting up the trust, you cannot also serve as a trustee. If you are the trustee, you have control of the trust, which could lead to the trust being included in your estate. You will need to name another trusted person or financial institution to act as trustee. Policy ownership . The trust must own the life insurance policy. If you transfer an existing policy to the trust and die within three years, the policy will still be considered a part of your estate. To avoid this risk, the trust can purchase a policy directly rather than receive an existing policy. Premiums . You need to transfer funds to the trust to pay the policy premiums, which creates an issue with gift taxes. A transfer to a trust is usually not subject to the $15,000 yearly gift tax exclusion. For a gift to qualify for the exclusion, the recipient must have a "present interest" in the money. Because a promise to give someone money later does not count as a present interest, most gifts to trusts aren't excluded from the gift tax. To avoid this, you can use something called a “Crummey” power which gives beneficiaries the right to withdraw the funds transferred to the trust for up to 30 days. As part of the process, the trustee needs to send them a letter, known as a Crummey letter, letting them know about the trust funding and their right to withdraw the funds. After the 30 days have passed, the trustee can use the funds to pay the annual insurance premium. You run the risk of the beneficiaries withdrawing the funds, but if they know that by allowing the money to stay in the trust they will receive more money later, it shouldn’t be a problem. Beneficiaries . The beneficiary of the life insurance policy is usually the trust. Once the funds are deposited in the trust, the trustee can distribute the assets to the beneficiaries in the way specified by the trust. For example, if your beneficiaries are minors, you can wait to have the trustee distribute the assets. Keeping the assets in the trust will also protect them from your beneficiaries’ creditors. The downside of an irrevocable life insurance trust is that you do not have the ability to change it once it is set up, although the policy would effectively be canceled if you stopped paying the premiums. If you are considering this type of trust, discuss it with your attorney.
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