A STEP AHEADFIRST QUARTER 2015 • VOLUME 12 • ISSUE 1

Berwitz & DiTata LLP

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Berwitz & DiTata LLP

Lawrence N. Berwitz, Esq. andMaureen Rothschild DiTata, Esq.

IN THIS ISSUE:

Understanding Home Care

Protecting Retirement Accountsfrom Creditors

How To Help SomeoneYou Love When They Grieve

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Individual retirement accountswere always believed to beprotected from creditors. On June12, 2014, the Supreme Courtdecided otherwise.

Here are the facts: Ruth Heffrondied owning an IRA. Ruth had notdesignated a spouse as beneficiaryof her IRA. She would have beenallowed to “roll” the account intoher own IRA. Instead, Ruthdesignated her daughter, Heidi, asthe beneficiary. Heidi, and anynon-spouse beneficiary of aretirement account, receives it asan “inherited IRA.” Thereafter,Heidi filed for bankruptcy. Sheidentified the inherited IRA she hadreceived from her mother as an“exempt” resource, not subject toher creditors’ claims. The trustee inbankruptcy and the unsecuredcreditors objected, arguing that thefunds in the inherited IRA were notprotected “retirement funds” withinthe meaning of the bankruptcystatute.

ProtectingRetirementAccountsfrom Creditors

UnderstandingHome CareOur clients are frequently

confused by the various typesof services that fall under thegeneral term “home care.”Generally, home care helpsdisabled adults and chronically illor cognitively challenged seniorslive independently for as long aspossible, given the limits of theirmedical condition. It covers a widerange of services and is designed todelay the need for long-termnursing home care. To understandhome care, it is important to firstunderstand what is meant by theterm Activities of Daily Living(ADLs). This term is used byhealthcare professionals to refer toroutine activities that people canordinarily do themselves, suchas bathing, grooming, dressing,eating, ambulating (walking),toileting and transferring, i.e.moving from bed to chair. Aperson’s ability to perform ADLs iskey in determining the typeof carethat may be required.

Next, it is helpful to understandthe difference between HomeHealth Care and Home CareServices. They sound the same,and Home Health Care mayinclude some Home Care Services,but Home Health Care is moremedically oriented and usuallyinvolves helping a patient recoverfrom an illness or injury. For thisreason, the people who provideHome Health Care are oftenlicensed or certified and most work

for home health agencies, hospitalsor public health departmentslicensed by the state.

So let’s distinguish the titles!Registered Nurses (RNs) arelicensed by the New York StateEducation Department. While theycan assist with ADLs, more oftenthey perform skilled nursing care:monitoring vital signs, cleaning,dressing and caring for wounds,changing bandages, administering

Berwitz & DiTata LLP

FIRST QUARTER 20152

Protecting RetirementAccounts from CreditorsCONTINUED FROM PAGE 1

The matter ultimately reachedthe Supreme Court whichconcluded that funds in aninherited IRA are not “retirementfunds” as that term is defined bystatute and are therefore notinsulated from creditors’ claims. Insupport of its conclusion, the Courtidentified three distinguishingcharacteristics of inherited IRAs.First, the original IRA owner canmake contributions to the accountwhile the beneficiary of aninherited IRA may not investadditional funds into that account.Secondly, owners of an IRA arenot required to take distributionsuntil they attain the age of 701/2years while beneficiaries of aninherited IRA must take requiredminimum distributions annually,commencing with the year after theoriginal account holder’s death,regardless of the beneficiary’s age.Lastly, holders of an inherited IRAmay withdraw the entire balance atany time without penalty. Incontrast, the original IRA owner ispenalized for taking distributionsbefore attaining the age of 591/2years.

There is a way to safeguardassets in an IRA so that, when theyare inherited, they are not exposedto creditors of the non-spousebeneficiary. First, a trust isestablished by the original accountowner, naming the non-spouse asbeneficiary. Then, the trust isnamed as the beneficiary of the IRAupon the original account owner’sdeath. In this way, the age of thenon-spouse beneficiary will

determine the required annualminimum distribution and thefunds in the inherited IRA will beprotected from the non-spousebeneficiary’s creditors. This type oftrust can also be implemented or beneficiaries who are under theage of majority, immature orincapable of managing their affairs.It allows beneficiaries who receivegovernmental benefits, such asMedicaid or Supplemental SecurityIncome, to insulate the inheritedIRA from consideration indetermining his or her eligibility forbenefits, allowing the distributionsto supplement, rather than replace,the governmental benefits andto enhance the beneficiary’s qualityof life.

This strategy must beimplemented during the lifetime ofthe original account owner. If you

Have You Relocated?

Do You Want to KeepReceiving This Newsletter?If you have moved to a new

home, either permanently ortemporarily, please contactour office with your up-to-date address, telephone num-bers, and e-mail addresses.We want to be sure that youwill continue to receive commu-nication from us.

are the owner of an IRA and havenamed or wish to name a non-spouse as the primary orcontingent beneficiary, contact ouroffice for a consultation to discusswhether a retirement trust is anappropriate mechanism for theprotection of these assets.

We Practice Preventative Law!™

3VOLUME 12 • ISSUE 1

injections, administering tubefeeding and dispensing medication.Licensed Practical Nurses (LPNs)are also licensed by the EducationDepartment. They assist with ADLsand can accommodate someskilled nursing needs. CertifiedHome Health Aides are trainedand certified by a training programapproved by the State Departmentof Health to assist with ADLs.There are also Home Health Aideswho have not been certified. Theymay also be referred to as PersonalCare Attendants (PCAs). Theservices provided by PCAs varybased on the specific needs of theirclients or care recipients. Theyregularly assist with ADLs and mayalso perform minor housekeeping(laundry and ironing, dusting andvacuuming), food shopping andmeal preparation, or they mayempty bedpans, change soiledbed linens and care for a bed-ridden or disoriented client. Inaddition to these designations,seniors and others also benefitfrom the services of Companions.Companions are usually untrainedand offer conversation and socialinteraction, help with hobbies, runerrands, provide transportationto and from appointments, per-form house-keeping and mealpreparation and care for pets andplants.

Home Health Care is medicaland/or skilled nursing care in thehome for homebound patients. It isa benefit of Medicare, Medicaid andmost health insurance policies,provided the patient meets very

specific criteria. More specifically,Home Health Care may includephysical, occupational and speechtherapy, skilled nursing andhelping the care recipient withADLs. It may even includeassistance with meal preparationand housekeeping but usuallyfor a very limited time period.Home Health Care is typicallyinitiated upon hospital dischargeand is provided on a short-term,temporary basis. It must beordered by a physician to becovered by insurance. Occasionally,a patient who has not beenhospitalized can qualify, but only ifthere has been a significant changein health status, such as an acuteillness or injury. For example, apatient who has extreme difficultybreathing as a symptom ofcongestive heart failure, or one whois physically debilitated due to anillness or injury and needs therapyto regain strength and balance,could qualify. The patient must behomebound, meaning they onlyleave the home for medicalappointments.

Home Care Services is a non-medical designation. The servicesare provided by private caregivers,Home Health Aides, PersonalCare Attendants andCompanions. They are consideredcustodial in nature and do notrequire a physician’s order.Services are designed to help thecare recipient remain at home.The scope of services isdetermined by the care recipientand/or family. Home CareServices are not covered by healthinsurance. Most services are paidfor out of pocket, by long-termcare insurance or by Medicaid.

UnderstandingHome CareCONTINUED FROM PAGE 1

A discussion of home care wouldnot be complete without referenceto Hospice Care. Hospice is carefor the dying. It can be provided inthe home, a dedicated hospicefacility, a long-term care facility ora hospital. Medicare, Medicaid andmost private health insurancecovers Hospice Care. One musthave a physician’s order to qualifybut the patient is not required to behomebound. Hospice is initiatedbased on a terminal diagnosis. It isno longer necessary that thepatient have less than 6 months tolive although it is understood thatdeath is impending from a terminaldiagnosis.

Hospice Care includes theservices of nurses, home healthaides, social workers, spiritual careproviders, volunteers and even abereavement counselor. Carerecipients and their immediatefamily members may use all orsome of the services based on theirneeds and preferences. Visits areshort, typically between 45 and 90minutes, although longer visits aretypical if the patient is in need ofpain control or other palliative care.Some Home Health Care agenciesoffer Hospice Care as well, andoften have a transitional program.Care recipients may start out withHome Health Care and, as theydecline, transition to Hospiceservices.

The focus of Home Health Careand Hospice are very different.Home Health Care concentrates onimprovement while Hospiceconcentrates its efforts on theprocess of dying, painmanagement, comfort, supportand quality of life for the remainderof the care recipient’s life.

FIRST QUARTER 2015 • VOLUME 12 • ISSUE 14

Berwitz & DiTata LLP

This newsletter does not constitute the provision of legal or tax advice.It is to provide general information only and should not be acted upon without legal and/or professional assistance.

Copyright © 2015 Berwitz & DiTata LLP. All Rights Reserved.

310 Old Country Road, Suite 101Garden City, New York 11530

TELEPHONE: (516) 747-3200FACSIMILE: (516) 747-3727WEBSITE: www.berwitz-ditata.com

RETURN SERVICE REQUESTED

We are pleased to be sponsoring anunusually powerful, educationalevening. We hope that many of ourclients and friends, and perhaps theirfriends and family, will join us.

With exceptional grace, good-natured humor, and rock-solidscience, Amy Florian teaches peoplehow to support their friends andfamily in times of grief, loss, andtransition. Regardless of cause -death, divorce, dementia, terminalillness, job loss or other major lifecrisis - in the midst of grief it can seemthat hope and happiness haveevaporated. Those times are when weneed each other the most. Yet our

words get lost in the torrent of “metoo” platitudes and our actions fail tocomfort.Would you like to know what to do

and say to genuinely help yourself andthose you love navigate the toughesttimes of life? Learn about grief – whatthe experience is like and what isnormal. Learn practical strategies forcomforting, what to do when you don’tknow what to do, and how to helpyourself or your loved ones becomewhole again.Amy Florian is not just an expert in

grief and bereavement; she has beenthere. Her husband’s sudden death ina car accident prompted Amy’s lifelong

How To Help Someone You LoveWhen They GrieveMay 13, 2015 – RESERVE YOUR SPOT TODAY

mission to help people heal fromdevastating grief. Amy has workedwith more than 2,000 grieving peopleover the past 25 years. She teaches atLoyola University of Chicago and haspublished over 90 articles. She holdsboth a Master’s Degree and a Fellowin Thanatology. She is a nationallyrecognized speaker and teacherknown for her dynamic and engagingpresentations.We will meet at the Milleridge Inn

on May 13 from 6 to 9 p.m. Pleasebring someone with you, a friendand/or family member who youbelieve will benefit from ourdiscussion. There is no cost to attendbut, because seating is limited, wesuggest that you reserve your spot(s)as soon as possible by calling ouroffice at (516) 747-3200. We willremind those who have reserved seatsas the date approaches! The eveningpromises to be a moving one.