As a full-service law firm, The Law Office of Arthur P. Skarmeas, LLC considers educating clients to be an essential and empowering tool. It can be difficult to find reliable legal information, so we’ve done some of the legwork for you by providing research, documents, and bulleted summaries to give you a better understanding of our practice areas and answer common questions about how we can help you.

How Can Legal Articles and Information Help Me?

Our legal articles are intended to give you a basic understanding of our practice areas, the legal jargon involved, and information you can use to determine whether or not you should contact an attorney about a legal issue. We are a full-service law firm, giving each client personalized attention. We customize practical solutions to fit your specific needs and help you navigate sensitive legal processes. As part of our educational approach, we provide our clients with this information to give them an understanding of how we handle their concerns and to offer them additional resources.

Which Types of Information Can You Offer Me?

The Law Office of Arthur P. Skarmeas is committed to helping clients handle real estate transactions, establish businesses, manage estate planning, and address elder law concerns. In offering this information, we aim to simplify the consultation process by providing definitions, points to consider, and answers to frequently asked questions about the following topics:

  • The basics of elder law
  • Medicaid planning
  • Nursing home eligibility
  • Title insurance
  • Attorney representation
  • Probate
  • Various real estate terms
  • Choosing a business structure
  • Protecting your assets
  • Answers to common questions about estate planning, wills, powers of attorney, advanced directives, and other relevant concerns

However, you should note that while we intend for these resources to be useful, they should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. At The Law Office of Arthur P. Skarmeas, we are licensed to practice law throughout Massachusetts and New Hampshire. Give us a call at (978) 887-0093 to schedule a free consultation at our office in Topsfield, MA.

Elder Law Articles

Elder Law Additional Information

Medicaid Planning Important Points

Estate Planning Articles

Estate Planning Advice for Everyone

10 Biggest Estate Planning Mistakes

Real Estate Law Articles

Attorney Representation in a Real Estate Transaction

Title Insurance

Business Law Articles

Asset Protection

Business Structure – Choosing the Correct Business Structure

Frequently Asked Questions

 These questions and answers should not be used as a substitute for competent legal advice from a licensed professional attorney in your state

Estate Planning

  1. What is a Last Will and Testament?

Very simply, it is a document that directs how your property will be distributed after death. The Will also designates the person’s choice as Executor, and, if you have minor children, will appoint a guardian. It must be in writing and executed in the manner set forth by the statute to be effective.

  1. Why do I need a will since everything will just automatically pass to my spouse?

The idea that everything will automatically pass to a spouse is one of the most common misconceptions in the area of estate planning. If there is not a will then assets will be distributed pursuant to the Massachusetts intestacy statute, which provides for children and other family members as well as the surviving spouse. This could leave a spouse with insufficient assets, particularly as he or she becomes older and the children develop independent lives. Also, since the intestacy laws require that property be divided exactly as called for in the statute, it can result in the forced sale of assets that the deceased hoped to keep in the family (including the family home, heirlooms, or other valued personal property).

  1. What is a Durable Power of Attorney?

This document grants to a specifically-designated individual the power to act for you when you become incapacitated or are otherwise unable or unwilling to act for yourself. The power can be general or specific. The power is, in most cases, effective immediately although you can choose to have it effective only upon disability.

  1. Why is a Durable Power of Attorney important to the estate planning process?

A Durable Power of Attorney is a crucial estate planning document. It allows another, specifically designated individual, to act in your place in certain instances. Without such a document, an individual’s family could be forced to bring a costly legal petition for the appointment of a guardian to allow even the most basic transactions to be performed. Without having the document, family members may disagree as to the proper person to act as attorney or disagree on what steps to take, increasing legal costs substantially. Powers of attorney can be as expansive or limited as the individual desires. In general it always includes the right to handle banking needs and other basic financial obligations, and often is expanded to allow the making of gifts and handling real estate.

  1. What is a Health Care Proxy?

A Health Care Proxy appoints a specifically-designated person to make health care decisions for you when you are unable to make those decisions for yourself. The power granted in a Health Care Proxy is effective only when your physician certifies that you are unable to make a reasoned decision for yourself.

  1. Does a Health Care Proxy address end of life issues?

As with the Durable Power of Attorney, the Health Care Proxy is essential to insuring that a person’s wishes are carried out when they are no longer able to make decisions for themselves. The Health Care Proxy allows another person to make necessary medical decisions when the individual is no longer able. The power given to the designated proxy is usually general in nature. The designated individual is responsible for considering all possible medical alternatives and then making a decision based on the applicable medical advice. However the Health Care Proxy does not deal directly with end of life issues as this is a matter for the Advanced Directive (or Living Will). As with the Durable Power of Attorney it is again important to stress that without a valid Health Care Proxy the chance of having to engage in costly legal proceedings greatly increase.

  1. What is a Living Will or Advanced Directive?

A Living Will is a document that sets forth your instructions as to what to do in the event that you are suffering from a terminal illness and your physicians determine that there is no possibility of a meaningful recovery. The directions often state simply that one does not wish to be kept alive by artificial means (e.g. feeding tube, respirator, etc.). It is important to note that Living Wills are not recognized under Massachusetts law, and as such, are not required to be followed. However, we strongly recommend that you execute a Living Will so that your family and physicians will fully understand your wishes in such circumstances.

  1. Who Should I Appoint as my Executor, Health Care Proxy and Durable Power of Attorney Holder?

This decision is, of course, always up to you. The most important consideration is that the person or persons that you appoint be an individual(s) that you trust. Frequently our clients choose their spouse or another very close family member. Even for complicated estates we recommend that you appoint a trusted family member or close friend. Although the complexities may require that you hire a professional to assist in moving through the process, it is still best to have the trusted family member or friend be the primary representative so that you can be certain that your desires and concerns are always kept in mind.

  1. Can a Properly Drawn Estate Plan Avoid Probate?

It is possible. Certain types of property are not considered part of the probate estate. Transfers to a trust place property outside of the probate estate. In that case the Trust document itself dictates the method of distribution. Jointly held property passes to the other owner or owners automatically. This type of property includes joint bank accounts and real property (depending on how the title is held). Life Insurance benefits also can pass outside of the estate if the policy is set up with appropriate beneficiaries.

  1. How Difficult is it to Create an Estate Plan?

It is really not that difficult. You will have to collect all of the information necessary to allow for the proper formation of your estate plan, and there are often some difficult decisions that you need to make as to your property and representatives, but we have attempted to make the process as easy as possible by providing a questionnaire that you can fill out and bring with you to your consultation visit. We can then contact you to make an appointment to review your questionnaire and begin to formulate a plan.

  1. How Often Should I Review my Estate Plan?

You should review your plan every three to five years. Circumstances in life change and these changes can affect the manner in which your wishes, as expressed in your plan, are carried out. You should also review your estate plan earlier if any of the following occur:

  • You marry (upon marriage any prior Will is automatically revoked)
  • You divorce (all provisions concerning a prior spouse are automatically revoked upon divorce
  • Legal separation
  • Marriage, divorce or legal separation of a child or grandchild
  • The birth of a child or grandchild
  • The purchase or sale of a substantial asset (i.e. house)
  • The change in health of a previous appointee
  • The death of a previous appointee
  • A change in applicable laws
  • A change in assets

Nursing Home Eligibility

  1. Important Considerations In The Massachusetts Medicaid Rules For Nursing Home Eligibility

Medicaid (or MassHealth) is the primary method of paying for nursing home care in the Commonwealth of Massachusetts. Unlike Medicare, Medicaid is not an entitlement program. Eligibility for benefits occurs only when the Commonwealth considers an applicant to be impoverished. This is because payment is based on the standards that are applicable to welfare benefits. The Quandary faced by most families facing the institutionalization of a family member in a nursing home is how to preserve ones hard earned assets while still becoming eligible for Medicaid. While every situation is different – through the use of the basic Medicaid Rules there is often much that can be done to achieve our client’s goals.

  1. What Assets Can A Medicaid Applicant Possess?

The answer is no more than $2,000.00 in countable assets.

  1. What Are Countable Assets?

Maybe the best way of defining countable assets is to tell you what assets are not counted by the Division of Medical assistance in determining Medicaid Eligibility. Countable Assets include everything except:

  1. The applicant’s personal residence if located in Massachusetts (unless the value exceeds $750,000.00);
  2. One automobile or other motor vehicle (the value may not exceed $4,500.00, but the value may be any amount for a community spouse);
  3. Personal possessions (jewelry, furnishings, etc…);
  4. Inaccessible assets (assets held in irrevocable trusts, etc…).

Again, when considering what is meant by “non-countable assets,” what is important to remember is that these assets are not even considered by the DMA when determining Medicaid eligibility.

  1. The Look-Back Period and Potential Penalties

As you may be aware, with the Deficit Reduction Act of 2005 many laws changed. Now, for most asset transfers, the look-back period is five years. That means that any transfer made more than five years before the MassHealth application will not be subject to consideration or any penalties. Early planning can help in this regard. If a transfer is made for less than fair market value within the look-back period (five years or less prior to the filing of the MassHealth application), then the Masshealth applicant will lose eligibility for one month for every $7,680.00 (approximate) transferred (this is the applicable amount as of August 2006 and is based on the average monthly cost of a nursing home stay and is adjusted yearly). Before you consider a transfer for less than fair market value, carefully consider whether you believe that nursing home care is in the foreseeable future. If you have already made an asset transfer, carefully evaluate the value and timing of that transfer in conjunction with the timing of your MassHealth application.

  1. The Principal Residence

The asset that most concerns the vast majority of our clients is the principal residence. As noted, in almost all cases it is not countable as long as:

  1. The community spouse or other dependent relative continues to reside in the home; or
  2. The applicant intends to return home after his nursing home stay (it does not matter that the institutionalized spouse may never actually return to the home – it is only the intent as expressed upon applying for Medicaid).

The bottom line – since the home is usually non-countable – it does not have to be sold in order to qualify for Medicaid.

  1. Recent law changes have changed the way the principal residence is considered.

The first change occurred in July, 2003. Prior to that time the Commonwealth was entitled to recover monies it paid through the probate estate of the institutionalized spouse. Principal residences are often outside of the probate estate because it passes by law based on the manner of ownership. For example, if a husband and wife own by tenancy by the entirety, the property automatically passes to the surviving spouse. Now the law allows the Commonwealth to seek recovery against any legal interest owned by the institutionalized spouse at the time of his/her death. If you own or have any interest in the principal residence, including through life estates or trusts, it can be the subject of state recovery procedures. In 2006 the federal government passed the Deficit Reduction Act which, as part of the law’s provisions, held that equity in a home in excess of $500,000.00 could be considered countable. In some states this figure is $750,000.00. The bottom line is that, for the most part, the principal residence still remains a non-countable asset, but it can be subject to a state lien after the death of both spouses.

  1. The Community Spouse – Additional Protections

The spouse of a nursing home resident is entitled to additional protections over and above the $2,000.00 in countable assets. The specific entitlement depends upon the particular circumstances of each situation

Homestead Declaration

  1. What is a Homestead Declaration?

A Homestead Declaration is a document filed at the Registry of Deeds that will protect your home against unsecured creditors up to $500,000.00.

  1. What is not protected by a Homestead Declaration?

You are protected against most of the claims that creditors might have against you but there are certain types of claims that are exempt from the law. The most prominent of these are federal, state and local tax assessments/liens and first and second mortgages. In addition, certain judgments of courts of competent jurisdiction are exempt (such as for child support or alimony).

  1. Do Both Spouses file when the Property is Jointly Owned?

The answer is that it depends upon the age of the spouses. If both spouses are over 62, then both can and should file Declarations, because they are both entitled to place $500,000.00 protections on the home (for a total protection of $1,000,000.00). This is also the case for disabled individuals. However, the law also states that only one Declaration is allowed per family if any spouse is under the age of 62. As each spouse reaches the age of 62 a new Declaration should be filed.

  1. How and where do I File?

The Declaration is filed in the Registry of Deeds for the county in which the property is located. The document must be accompanied by a check made payable to the Commonwealth of Massachusetts in the amount of $35.00.

  1. Can I Declare a Homestead on More than One Property?

No. A Homestead Declaration is permitted only on the homeowner’s principal residence.

  1. Does the Protection Continue After I die?

Yes, until the surviving spouse remarries and until all minor children reach the age of 18.

  1. How Does the Protection Terminate?

The protection can terminate in several ways. These include the sale or transfer of the home, the death of the declarant, the remarriage of a surviving spouse, a recorded release, refinancing (in some instances), and a change in use of the property (when it no longer is the principal residence).

Real Estate Probate

  1. What assets are subject to probate?

Very simply – assets that are owned individually by the decedent at the time of his death and assets that have no specifically named beneficiary. Most commonly this includes personal property (i.e. jewelry, automobiles, and furniture), stocks, bonds, mutual funds and other investments, money, etc…

  1. What assets are not part of the probate estate?

These are assets that are held in a manner that specifically delineates who the property goes to upon death. Most commonly this includes jointly held real estate, jointly owned bank accounts, life insurance policies with beneficiaries, property held in trust, etc…

  1. What happens if there is no will?

The estate still must be probated, but the process can be more difficult, and more time consuming. In this case an interested person must seek administration of the estate through the filing of a Petition for Administration. Once this is done, the estate will then be disbursed according to the estate intestacy statutes of the state in which it is filed. The laws of the Commonwealth of Massachusetts set out a specific order in which a decedent’s beneficiaries will take, and their can be no deviation from the order set forth in the statute

Real Estate Terms

  • Adjustable Rate Mortgage (ARM).

This is a mortgage that provides for rate changes over the life of the loan. The rate can change anywhere from every six months to every five years. There are limits on the amount that a rate can change during each period, and also a maximum and minimum over the life of the loan. Often time the ARM will provide for a lower initial rate than that which you can obtain on a fixed rate. The ARM may be appropriate if you are not planning on owning your home for a lengthy period. However, the ARM can be very dangerous in times of increasing interest rates. This is the settlement or the act of sale where the property passes hands. Generally it will take place with a lawyer who will ensure that the process is completed correctly, and that all required documents are recorded with the Registry of Deeds.

  • Conventional Mortgage.

This is the most common home loan and is not insured by the Federal Housing Administration (FHA) or the Department of Veteran’s Affairs. Typically your lender will collect additional amounts for the purpose of paying your property taxes and insurance. You should discuss with your lender if you would rather pay these amounts yourself.

  • Fixed Rate Mortgage.

Unlike the ARM, the interest rate stays the same for the life of the loan, most commonly for periods of 15, 20 and 30 years (although some lenders are now offering longer terms). Your monthly payment will always remain the same. Over the long term the fixed rate mortgage is usually preferable to the ARM.

  • Home Inspection.

Every potential buyer should retain an experienced home inspector to conduct a full examination of the property before finalizing the agreement to purchase. The inspection may reveal undisclosed issues that could change your mind as to the purchase itself or the purchase price. If possible you should try to attend the inspection with the inspector.

  • Offer to Purchase.

This is usually the document that commences the sale process. It should always be in writing and address both the offered purchase price and other material details that are necessary to form a contract. If the seller agrees to the terms then a contract is formed. For this reason you should be very careful when making an offer to purchase and professional advice is recommended.

  • PITI

This refers to the owner’s typical monthly payment, which includes principal, interest, property taxes and insurance.

  • Points

Each point is one percent of the loan amount you are seeking. If your loan amount is $250,000.00, then one point is $2,500.00 and two points is $5,000.00. You can usually obtain slightly lower rates if you agree to pay points. You should carefully weigh the financial effects, both long and short term, when considering paying points.

  • Purchase and Sale.

This is the contract that defines the terms of the sale. It will generally address all of the key provisions and be the document that you will refer to when issues arise. The execution of a Purchase & Sale Agreement creates substantial obligations on the part of both parties to a sale and should always be reviewed by an attorney before you sign.