Planning To Establish A Trust… What Should I Do? Revocable vs. Irrevocable Trusts

Estate planning often involves setting up trusts. A trust is a legal agreement where property is held. It is therefore important to know and understand the types available: revocable versus irrevocable trusts.

An irrevocable trust is slightly easier to understand because it is quite straightforward. It is the type of trust that cannot be amended, modified, changed, or revoked after the agreement has been signed. After you place property into an irrevocable trust, you cannot retrieve it.

On the other hand, a revocable trust is much more flexible and can be changed at any time. However, a revocable trust does not offer creditor protection. What this means is that assets funded into a revocable trust will still be considered personal assets for creditor and estate tax – all trust assets will be considered yours for Medicaid Planning purposes, and will be subject to both state estate taxes and federal estate taxes and state inheritance taxes.

These two different kinds of trusts can accomplish a variety of estate planning goals, each with its own good and bad sides to it. Here are a few things to note about these two types if you are looking into establishing a trust:

For Irrevocable Trusts:

• Once property is placed into the trust, that property now belongs to the trust, not to you! Plan carefully!
• There is an estate tax reduction. Irrevocable trusts can remove the value of a property from one’s estate so that there will not be a property tax when the person dies.
• An Irrevocable Trust can be used to provide asset protection – by placing assets into an Irrevocable Trust, these assets cannot be reached by a creditor.

For Revocable Trusts:

1.      Revocable Trusts allow you to modify the terms at any time.

2.      Assets held in a Revocable Trust can avoid probate and be passed directly to the beneficiaries named at the time of the person’s death.

3.      Assets held in a Revocable Trust at the time a person becomes mentally incapacitated can be managed by a Disability Trustee; this allows individuals to plan for any issues that they think might come along in the future.

Trusts can be extremely tricky and there are many factors to take into account if you are looking into establishing one. If you are seeking guidance with establishing a trust, contact top Estate Planning Attorney Inna Fershteyn for assistance.

Law Offices of Inna Fershteyn and Associates, P.C.

(718) 333-2394

www.BrooklynTrustAndWill.com

1517 Voorhies Avenue, Suite 4

Brooklyn, NY 11235

Receiving A Medicaid Fraud Letter… What Should I Do?

Medicaid is a federal and state health coverage program that provides health care to people who are unable to pay for it themselves. It is offered free of charge to those who meet the strict eligibility requirements. Usually, Medicaid Fraud investigations occur when the investigator suspects that you have been lying or failed to disclose important information, whether you are a recipient (individual or families) of Medicaid or a provider (doctors, dentists, pharmacies, clinics, hospitals, etc).

Medicaid Fraud Investigations often begin with a letter from a Medicaid Investigator. The Investigator may involve one or more of the following government agencies, depending on the nature of the case: NYC Human Resources Administration, Office of Medicaid Provider Fraud and Abuse Investigation, Bureau of Fraud Investigation, New York State Attorney General’s Office, Medicaid Fraud Control Unit, or the Federal Bureau of Investigation. 

The letter may ask for some proofs or certain documentation and to meet with the Investigator for an interview. What happens next is extremely important. You will need a proper course of action to protect yourself from any harsh consequences. Do not, however, ignore this letter of Investigation or the interview.

By the time you have received the letter of investigation, the investigator has likely gathered evidence against you. Anything you say may be used against you and could result in criminal charges being filed or other forms of harsh consequences.

Consult with an experienced attorney to understand your options and prepare your defense. Do not try to attend the interview by yourself or settle the Investigation case on your own. If you self-incriminate yourself, you may face potentially very serious civil and criminal consequences. Your attorney can represent you in an effort to avoid or reduce the possible charges and can also negotiate a settlement that will save you time, money, and consequences. If you are being investigated for Medicaid Fraud in New York, contact NY Top Medicaid Fraud Attorney Inna Fershteyn today.

Law Offices of Inna Fershteyn and Associates, P.C.

(718) 333-2394

www.BrooklynTrustAndWill.com

1517 Voorhies Avenue, Suite 4

Brooklyn, NY 11235

What is Social Security Income (SSI)? How is SSI in New York? How Can A Personal Injury Settlement Affect My Eligibility?

Supplemental Security Income, also known as SSI, is a federal benefit program that seeks to provide assistance for individuals who are financially in need. This includes blind or disabled adults and children, individuals who have limited income, and non-disabled seniors who meet the financial limits to qualify for SSI. The program is intended to provide cash for individuals in need to meet their basic needs for food, clothing, and shelter.

In order to qualify for SSI, you must have little or no income and very few resources. This means the value of the things that you own must be less than $2,000 if you are single and less than $3,000 if you are married. If found eligible, Social Security Income provides individuals monthly cash payments. Furthermore, if you receive SSI, you can automatically get Medicaid (medical assistance). In order to receive SSI, you also must apply for any other cash benefits you may be able to get.

Under these rules of the Social Security Administration, a person is only eligible for the monthly payments if he or she has little to no income or assets. But, any earned income, gifts, gambling proceeds, and even money from a personal injury award or settlement will be considered cash assets. If this were to exceed the specified eligibility requirements ($2,000 if single, $3,000 if married), the individual would no longer be eligible for the benefits. Depending on the value an individual receives for their Personal Injury Settlement, the acquired money awarded could possibly result in the suspension of his or her SSI benefits.

If you find that you are in this situation and are seeking to keep your settlement earnings and still receive SSI benefits, seek an experienced attorney. The rules of the Social Security Administration may be very complicated and it is important that you are able to continue receiving benefits if you are financially in need.

If you are seeking assistance with your Social Security Income eligibility and/or Personal Injury Settlement, contact Attorney Inna Fershteyn today.

Law Office of Inna Fershteyn and Associates, P.C.

(718) 333-2394

www.BrooklynTrustAndWill.com

1517 Voorhies Avenue, Suite 4

Brooklyn, NY 11235

Wife accuses bar-code inventor of cheating her out of assets: suit

The wife of a Long Island genius who invented supermarket self-checkout lanes has accused him of giving away $80 million of their money — including $6 million to his mistresses — to keep it out of her hands.

But Jerome Swartz, 75, says that while he may be a tech whiz, he’s bad with money — and lost it all in the 2008 stock-market crash.

His wife, Starnette, 67, says in a lawsuit that her hubby of 28 years committed “massive fraud” by spending “millions of my assets to support a lavish lifestyle, including gifts and tuition payments for his mistresses and their children.”

Jerome, of Lloyd Harbor, spent $6 million on his paramours in 2011 alone, says the suit, filed in Suffolk County Supreme Court.

Starnette also accuses Jerome — who devised the technology behind the bar-code scanner — of forgiving $5 million in loans to his children from a previous marriage, hiding the profits from the sale of their $12 million East Setauket home and squandering millions of dollars more in an attempt to buy a stake in Miramax.

She gets $20,000 a month in support from her soon-to-be ex, court papers say.

The couple also owns an apartment at the Trump Tower on Central Park, a Jaguar XK8, a Cadillac limo and two Picasso paintings.

They have no children.

The spending violates court orders in a pending divorce action that bar Jerome from moving marital funds, the court papers say.

Starnette’s suit says the money transfers were all done secretly.

Starnette filed for divorce in April 2009, citing “irreconcilable differences,” and when she found Jerome’s assets were much lower than expected, she sued him again in civil court.

In May, Justice Thomas Whelan ruled Starnette must wait until her divorce is concluded before going after Jerome for the money.

Her lawyer, Michael Leon, said he’d appeal the ruling.

Jerome was a head of Symbol Technologies and was awarded the National Medal of Technology in 1999.

His lawyer did not return calls for comment, but Jerome has said he lost the money in the market crash

Additional reporting by Jennifer Bain and Gabrielle Fonrouge

Source: NYPost

SUNY resolves Medicaid fraud allegations

Schneiderman

New York Attorney General Eric Schneiderman announced a memorandum of understanding on Friday with the State University of New York (SUNY) to resolve allegations of Medicaid fraud.

Schneiderman’s Medicaid Fraud Control Unit (MFCU) alleged that the Daniel Squire Oral Diagnostic & Treatment Center, which is located on SUNY’s Main Street campus in Buffalo, performed dental services over two separate visits without noting the reason for each visit. Medicaid billing rules require that dental clinics perform a cleaning, dental exam and x-rays during a single reimbursable visit with a patient, unless there is a specific reason noted why the services must be performed over multiple visits. 

The dental clinic’s practices allegedly resulted in double reimbursement from Medicaid for dental services performed between Jan. 1, 2005, and Aug. 31, 2009. The clinic also allegedly failed to maintain sufficient documentation to substantiate the services it claimed to have rendered to patients, in violation of Medicaid billing laws.

“If services are billed in violation of the rules for Medicaid reimbursements, New Yorkers are owed and deserve that money,” Schneiderman said. “This settlement demonstrates our commitment to recovering taxpayer dollars misspent through violations of the Medicaid program.”

Under the terms of the settlement, SUNY must pay $115,094 to the state to resolve the allegations.

Source: Washington Examiner

Casey Kasem’s end-of-life drama: a lesson for the rest of us

The dysfunction and drama of the final months of Casey Kasem, a radio personality who died Sunday from complications of dementia, captured the interest of generations who listened over the years as he counted down the nation’s top pop.

But what Kasem did for four decades on the radio, says end-of-life planning expert Nancy Berlinger, is what he failed to do with his own family before dementia rendered him unable: communicate.

Kasem’s advance directive, stating he did “not desire any form of life-sustaining procedures, including nutrition and hydration,” assigned his daughter as surrogate healthcare decision-maker.

His daughter’s authority, however, was contested by her stepmother, Kasem’s wife. Allegations of kidnapping and starvation played out in courtrooms. Kasem’s wife performed a dramatic interpretation of a Biblical scene for news cameras, throwing raw meat in the street in exchange for her husband “to the wild rabid dogs”- her stepchildren.

Kasem’s situation was “a doozy of a case,” added Berlinger, lead author of The Hastings Center Guidelines, a framework for end-of-life decisions.

Kasem did take “two steps most people don’t,” Berlinger told Reuters Health. “He authorized a proxy decision-maker, and he gave specific information about treatment preferences.”

But, she pointed out, broadly-stated medical options in advance directives often require further considerations about real-life issues. “There may have been the assumption the document would have magically taken care of everything,” Berlinger said.

Kasem’s directive stated his wish for no life-sustaining treatment if it would “result in a mere biological existence, devoid of cognitive function.”

Berlinger said preferences should prompt patients and families to discuss points at which life loses individual meaning; examples include an inability to communicate or address hygiene. Those changes in condition can signal times when life-sustaining measures may be suspended. Without conversation, preferences may be unclear. “What does it mean to have ‘no cognitive function’?” Berlinger asks.

The way to answer that is to ask the patient directly, said Daniel Johnson, a Kaiser Permanente Care Management Institute palliative care specialist. “It’s not uncommon for people making decisions to do it alone,” Johnson told Reuters Health. “The problem is the best-laid plans depend not only on medical infrastructure, but infrastructure of the family.”

Johnson gathers key loved ones involved in patient care, so designated surrogates and those not selected understand reasons and values behind preferences. “When people take time to have discussions with family to ask the right questions with all important parties, you almost never see this,” he said.

Such dialogues are particularly vital in families like Kasem’s - involving second marriages and stepchildren, says elder law and estate planning attorney Michael Amoruso. “It’s not just blending family that is important, but ensuring relationships maintain themselves during stressful times,” he says. “If you don’t discuss, you are deferring the problem to a later day.”

That later day came for the Kasem clan, and it arrives even for the most “functional” of families, said Robert Fleming, an attorney and author of The Elder Law Answer Book. “I can drudge up one similarly emotionally fraught case for every year in 38 years of practice,” he told Reuters Health.

Conflict often arises between adult daughters- common choices, he says, for surrogate decision-makers. “The oldest blows into town and says ‘I can’t believe Mom ever meant that, and if I had talked to her she wouldn’t have done that,’” Fleming offers as a common scenario. “She thinks Mom assigned the youngest daughter because she stuck a form in front of her when she was over having coffee.”

These conversations should be initiated periodically by every responsible adult, Fleming said. He suggests a time-frame of every five years, as well as a dialogue to accompany every life change- whether it be in health status or a new spouse.

“There are some levels of family dysfunction that cannot be taken care of, but it certainly would have helped if Kasem had clearly expressed his preferences in a document shared in advance,” Fleming said.

Source: Reuters

How to Marry Your Finances When You Tie the Knot

Newlyweds must decide whether they're going to share a bank account and how they'll approach expenses like pet care and clothing.

If you're getting married soon or recently tied the knot, know that you and your significant other aren't the only ones marrying. Your Andrew Jacksons and your spouse's Benjamin Franklins are also going to cohabit.

With that in mind, it’s time to get out the calculator and your bank statements and start discussing the following questions.

Joint or separate accounts? There's no correct answer to this question. As Elle Kaplan, CEO and founding partner of Lexion Capital Management in New York City, says, "Different systems work for different people."

But many experts suggest having a joint account and separate accounts. "I believe a hybrid approach is the most successful," says Kelley Long, a Chicago-based money coach and member of the National CPA Financial Literacy Commission.

The joint account, Long says, is for household expenses, and the separate accounts are for each spouse to use for daily living and “fun” money. "Gas for your car, lunch with your girlfriends – those little daily activities we all have that have nothing to do with running the household," Long says.

But she advises that each spouse be able to see the other's separate account. It's easy to see her reasoning. You shouldn't keep secrets from each other – now or later. If you think what you spend your money on isn't your spouse's business, your spouse has every reason to wonder what you're trying to hide.

And whatever you do, don't get or keep your own account and not tell your partner. "I've witnessed on several occasions a spouse finding out about an account down the road, and all trust is broken," says Bijan Golkar, a certified financial planner at FPC Investment Advisory, Inc. in Petaluma, California.

How will we fund the joint account? Unless you both work for the same company and have similar positions, you probably don’t earn the same amount. Long recommends that the partner who earns more contributes more money in the joint account. You want to structure it so that you both have virtually equal amounts of money to spend in your individual accounts, Long says.

Obviously, once you start that approach, if one spouse wants to spend willy-nilly from the individual account and the other saves money from month to month, that's each person's prerogative. In fact, that's part of the reasoning behind individual accounts – you don't clash in your spending habits.

It seems to be a popular strategy for couples. According to research released in March by TD Bank, which surveyed more than 1,000 Americans married or living with a significant other, 42 percent of those in relationships who have joint bank accounts also have individual accounts.

Should we share a credit card? You may want a joint credit card, and if you're both financially responsible, "it makes a lot of sense to have one credit card account to accumulate rewards points," Long says.

But she says it only makes sense if you each have similar credit scores and histories. "If one of you has a poor credit history, you'll ding the other person's account," she warns. If that's the case, Long says you may want to consider making the spouse with the poor credit history an authorized user.

Golkar echoes the same advice: "It's good practice to run credit reports on both spouses to see any weak spots before attaching the other person’s name to that credit card or account," he says.

After all, you're both going to want the highest credit score possible when it comes time for landing a loan for a house, car or whatever else comes down the financial pike.

Are we updating our paperwork? Do you have a life insurance policy through work? And maybe your brother or parent is listed as the beneficiary? Time to knock them off and put your spouse in their place, Long says, adding, "Same thing with a 401(k) account. Make sure everything is updated."

If you don't have life insurance, and especially if your spouse is going to be dependent on your income, this is a good time to get some.

And while you may want to wait on writing a will until you have kids, Long says, you should probably at least get a living will. "If you have a head injury and your spouse is in charge, it's probably a good idea to know how you feel about being a vegetable," she says

Do we agree that we're going to talk about money? Agreement to communicate about finances is so vital that one could argue you shouldn't get married if you can't discuss finances openly and honestly. As a 2012 study in Family Relations journal showed, drawing data from more than 4,500 couples as part of the National Survey of Families and Households, arguing about money is a top sign you're going to divorce.

"Couples should be as open and intimate financially as they are physically. And even if one partner takes the lead, both of you must be actively aware of and involved with the general picture," Kaplan says. "It's important that each of you takes the time to understand where the other is coming from, because money management taps into a lot of very personal areas of emotion, upbringing and family history.”

Conversation starters. If you don't have much experience talking about finances with your partner, try discussing what Long calls the "gray areas."

It's easy to agree that the rent or mortgage payment is the most important bill, and that utilities must be paid. That's black and white. But if you want to uncover areas where you don't see eye to eye, Long suggests having a dialogue about the following:

•  Gifts. "One spouse might go crazy on Mother's Day while the other spouse might send a card to their mom. And that may be fine if you're both aware of your different styles, and one spouse won't be resentful," Long says. "But it's nice to know early on if you're on the same side."

• Pet care. "That's a big gray area," Long says. Some spouses may feel that it's worth expensive surgeries to keep their aging dog alive; others may feel that it isn't.

• Clothing. The amount your spouse spends on clothes may surprise you. "I won't stereotype here. There are a lot of guys who love their high-end clothing," Long says.

• Dining out. "What you consider an extravagant meal, your partner might not," she says.

• Entertainment. "What's reasonable to spend for a concert, traveling to see a friend or to go to a wedding?" Long says.

"For at least the first 12 months of marriage, you should sit and have an open dialogue every month on what you are both feeling," Golkar advises, citing the examples of whether you think your spouse is spending too much or if you feel your spending habits are being monitored too closely by your partner.

And if you have different ideas of what constitutes an expensive or unnecessary purchase, "set a trigger point price," Kaplan suggests. "Depending on your financial situation, it could be $20 or $200."

It's a wise strategy, particularly if you don't have your own individual accounts – or you feel the spending is out of control in your joint account or on your shared credit card.

"The point [of the trigger point]," Kaplan says, "is that you each have some individual liberty and discretion for the smaller expenses while staying in close communication on the bigger things. Your financial future depends on working as a team."

Source: USNews

New Jersey Chiropractor Admits To Destroying Evidence During Billing Fraud Probe

A northwestern New Jersey chiropractor admitted Wednesday to destroying patient appointment records sought by federal agents investigating potential billing fraud at her medical office, federal prosecutors said.

Mary Jean Negri, 57, of Lafayette, New Jersey, pleaded guilty Wednesday to obstructing an investigation of a health care offense. She faces five years in prison at a sentencing hearing set for Sept. 29.

Prosecutors said Negri, a licensed chiropractor and registered nurse in New Jersey, has owned the Lafayette Hilltop Chiropractic Center for 24 years. In May 2012, she discovered the FBI and the U.S. Attorney’s Office were investigating the business for potentially fraudulent billing practices.

Negri suspected investigators were interested in obtaining the center’s patient appointment books as evidence of potential fraud. In an effort to obstruct the government’s investigation, she discarded those books.

Source: CBSLocal.com

NY nursing home workers face charges stemming from resident death

Nine employees of a troubled New York nursing home, including the top administrator, were indicted on Thursday on charges stemming from the death of a resident whose distress alarms went unheeded for hours.

The company running the Medford Multicare Center for Living was indicted as well for an alleged attempt to cover up the circumstances surrounding the October 2012 death, according to a statement by New York Attorney General Eric Schneiderman.

The victim, a 72-year-old woman, was staying at the facility in Medford, about 40 miles (64 km) east of New York City on suburban Long Island, for what was meant to be temporary rehabilitation.

A respiratory therapist who failed to connect the woman to a ventilator at night was charged with criminally negligent homicide, the Attorney General's statement said.

The therapist ignored alarms and messages to her pager for more than two hours when the woman stopped breathing, and video surveillance showed the therapist walking past the resident's room while the alarms were sounding, it said.

"Today's indictment sends a clear message: We will arrest those who put our most vulnerable citizens in harm's way, and in particular those who neglect or deny life-saving medical treatment to patients," Schneiderman said. "We must and will do everything in our power to protect our nursing home residents from abuse."

Also indicted on criminal charges were six nurses and aides also accused of ignoring the alarms. One nurse told investigators the resident was alive and "looked up at me" when she had likely been dead for some time, Schneiderman said.

The Center for Living at Medford Inc., the facility administrator and the director of respiratory therapy were accused of concealing computer records, which documented the alarms, from state health investigators, it said.

All nine pleaded not guilty at arraignments on Thursday before Suffolk County Supreme Court Justice John Collins.

The Attorney General filed a civil lawsuit earlier this year charging the home's owners with looting and fraud.

The lawsuit said since 2008 that 17 employees had been convicted of neglect and falsification of records in an effort to cover up abuse and neglect.

It accused Medford's owners of paying themselves at least $60 million, representing nearly a quarter of the Medicaid funding they received, the statement said.

Source: Business Insider

Rockaway couple charged with health care fraud

A Rockaway couple who owned a mobile diagnostic testing company in Parsippany were arrested on Monday, June 9, and charged with conspiring to commit health care fraud, allegedly by copy and pasting a physician’s signature onto many of their diagnostic reports instead of having the reports read by a specialist.

The couple, Nita K. and Kirtish N. Patel, both 51, owners and operators of Biosound Medical Services Inc. and Heart Solutions of Parsippany, were charged with one count of conspiracy to commit health care fraud, U.S. Attorney Paul J. Fishman announced on Monday.

They made their initial court appearance on Monday before U.S. Magistrate Judge James B. Clark III in Newark federal court and were each released on $100,000 unsecured bond.

According to the complaint and statements made in court:

From June 2012 through June 2014 Nita and Kirtish Patel owned and operated Biosound Medical Services and Heart Solutions, known collectively as “Biosound,” which were mobile diagnostic companies and approved Medicare providers.

The companies provided mobile diagnostic testing, including ultrasounds, echocardiograms, and nerve conduction studies.

Biosound technicians would travel to the office of a primary care physician in the New York and New Jersey area to conduct diagnostic testing. Biosound was responsible for sending the tests to a “reading physician” – an appropriate specialist who would interpret the results.

After the reading physician prepared a report, Biosound was responsible for providing it to the referring physician. Biosound would bill Medicare and other payors for the diagnostic testing, the reading physician’s interpretation of the results and the report.

According to the complaint, about half of the diagnostic reports generated by Biosound in the past two years had a photocopied signature from a reading physician when no physician had actually seen, reviewed or interpreted the results. Rather than pay compensation to a reading physician, Kirtish N. Patel allegedly would interpret the diagnostic results himself, and Nita K. Patel would, allegedly, either photocopy or electronically cut and paste a physician’s signature onto a diagnostic report that was drafted by an employee of Biosound and forwarded to the referring physician who ordered the testing.

The charge of conspiracy to commit health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine.

In addition to the bond, the Patels’ travel was restricted to New Jersey unless given prior approval by pretrial services, and they must surrender their United States and India passports.

U.S. Attorney Fishman credited special agents of the FBI under the direction of Special Agent in Charge Aaron T. Ford; and the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Tom O’Donnell, with the investigation leading to the charges.

Source: The Citizen

What To Do Before You Say 'I Do'

Love is in the air in June, a popular month for weddings and engagements.  But before you or a loved one says “I do,” there are a few things you should know about their money habits.

Thanks to an excellent new book by Terry Savage, Gemma Allen and Michele Lowrance, the bottom line is that you need to know some specifics about the financial behavior of your future spouse or partner before you tie the knot or set up house. Here are four key questions from The New Love Deal:

* Are You or Your Partner a Spender or Saver? “It’s time to figure out just who you are when it comes to money decisions and who your partner is. Are you a saver or spender? Extreme or moderate?

Do you pay bills the day they arrive, once a month or when you get to it? Do you track balances or assume all is OK? Do you pay your credit card in full each month or carry a balance? Do you review investments at least once a year? Do you rely on experts or are you a do-it-yourself type?

Are you comfortable carrying debt, or do you insist on being debt-free? What did you learn about money from your parents and how does this impact your feelings about money and marriage?”

* How Much Risk Do You Both Want to Take? “Talk with your partner about where you are now. Do you think you are a risk taker when it comes to money? career? love?

What is the most difficult type of risk for you to take – financial or emotional? What role do you think your parents played in your ability to tolerate risk? What role have your previous life experiences played? Do you think a discussion of risk and a respectful, persuasive argument for risk made by your partner could allay some of your fears in making a specific decision?”

* Dig Deep on Money Issues: Check Your Credit History, Review Your Assets and Talk about Estate Planning. “Share your past financial life. Remember your partner’s credit history will easily become part of your own report as you start a life together. Be prepared.

Each partner should make a list of all assets. Discuss retirement accounts, revocable living trusts, property owned prior to marriage etc. Make a plan. You don’t have to be wealthy to have an “estate.” Even young couples should have a plan. Know state and federal laws and put in writing how joint assets should be handled upon a sudden death of either or both partners.”

Being open and honest about money issues will go a long way in preserving and nurturing your union. I discuss all of our investing, tax, estate planning and bill-paying issues with my wife. We take our time with everything, Our estate plan took the better part of a year.

Through frequent and serious discussions on money issues you’ll avoid the subject that 70% of couples fight about. It’s best to untie a bundle of money concerns before they tie you up into knots.

Source: Forbes.com

Estate planning for the young, rich and childless

For many single or childless individuals, the question of how to distribute their worldly wealth after they die is wide-open and complicated. A charity? Alma mater? Distant nieces and nephews? A cat?

And who will take care of making sure dying wishes are fulfilled?

This dilemma faces not just the 17 million unmarried Americans over 65 who are retired or putting their ducks in a row for retirement. Charitable foundations and financial advisers report that an increasing number of young people are facing these decisions before they are married or have children. That is especially true for tech entrepreneurs who, for example, come into a large amount of money from stock options or the sale of a start-up business.

"There are definitely more young people coming in than 10 years ago," says Mari Ellen Loijens, chief business, development and brand officer for the Silicon Valley Community Foundation, which granted $367 million in 2013 and is handling the disbursement of a $1.1 billion donation of Facebook stock from Mark Zuckerberg. "There's been a real shift in the dynamic."

Case in point is Jeff Kolesky. The 37-year-old software engineer for San Francisco-based OPower Inc says he values the examples that people such as Zuckerberg and Bill Gates have set with their giving.
"For me, I'm not going to be giving away that kind of wealth, but I take value from donating to charity now and not when I'm dead," Kolesky says.

WHEN TO PLAN

When it comes to charitable planning, financial advisers say it is not about how old you are but how rich. If you have $100,000 or more, you do not want to die without a will or estate plan and leave it to a court-appointed executor to decide what happens to the assets you leave behind, says John Pettee, a trust, tax and estate specialist with Charles Schwab's private client division.
"We say to people: 'If you do nothing, your money will go to the state. Is that what you want?' That's enough to make them want to consider something else," says Andrew Russell, a certified financial planner in San Diego.

You also have to consider your healthcare directives and who should manage your affairs should you become incapacitated in an accident or because of illness. A person needs a line-up of contingency names to put on legal forms, and all of those people need to be aware of your desires for medical intervention.

STAY FLEXIBLE

What generally keeps people - with children or without - from estate planning is that they do not want to face their mortality.

"People don’t like to talk about death. If you add on top of that they do not have a child who would be a natural heir, they really don't want to deal with it," says Kevin Ruth, head of private wealth planning at Fidelity.

One route to make the process easier is a donor-advised fund, offered by brokerage firms such as Fidelity, Vanguard and Schwab and charitable foundations. These act like mutual funds designated for charitable giving and allow an individual to make a one-time or ongoing contribution through the institution, alleviating many fees and paperwork requirements.

Donors can designate the funds to be distributed right away or can direct grants later. Amy Danforth, president at Fidelity Charitable, says most donors grant their money within 10 years
.
Kolesky chose that option late last year shortly before OPower went public. After watching friends deal with tons of paperwork to create their own charitable giving structure after an IPO, Kolesky opened up a donor-advised fund through the San Francisco Jewish Community Federation.

His rationale? It was a well-known entity, the set-up was easy and he has a lot of flexibility to make grants once he is ready. Plus, he gets a tax benefit, because he can claim his donations when he makes them, not when the money is granted to charities.

"It gives me an opportunity to put money away without thinking immediately about where it will go," Kolesky said. "It will create a nest egg of philanthropic, and, in the future, I can give a more impactful amount of money."

People now give just about anything they can assign a monetary value, from unsecured stock options to art and even bitcoins. That helps young tech workers because they can give away some of what they have today, keeping with the principles of the Giving Pledge made by some of the world's wealthiest people, including Gates and Warren Buffett.

"They don't want to delay until 20 or 50 years down the road," says Schwab's Pettee.

And that goes even if kids come later. "Earlier, it didn’t matter how rich you were, you were still worried about family legacy," says Loijens. "Now, megarich or not, your obsession with legacy is not the same."

Source: Reuters

 

Insurance Company Cheated Medicare Out of $1 Billion, Says Lawsuit

Josh Valdez took an executive level job in April 2010 expecting to improve medical services at two Puerto Rican Medicare Advantage health plans owned by a subsidiary of New Jersey company: Aveta Inc. 

But a few months after coming on board, the former government health official claims, he discovered that the plans -- MMM Healthcare and PMC Medicare Choice -- had been cheating Medicare out of hundreds of millions of dollars for years, according to a whistleblower lawsuit he filed in federal court. 

Valdez accuses the health plans of "rampant fraud," alleging they overcharged Medicare $300 million to $350 million a year from 2007 through 2010. He claims that Aveta Chief Executive Officer Richard Shinto fired him "in retaliation for his outspoken opposition to these illegal practices." Valdez filed the lawsuit in Santa Ana, California, in April 2011, but it remained under court seal until February of this year. The case is pending. 

In a May 23 statement to the Center for Public Integrity, the health plans called Valdez a "former disgruntled employee" and added that the company "categorically denies the allegations in the former employee's lawsuit and is highly confident that it will prevail in the case."

Valdez is a veteran health care executive and consultant who headed the California regional office of the U.S. Department of Health and Human Services from 2001 through 2003 under President George W. Bush. He also was a health policy adviser to Republican Mitt Romney during the 2012 presidential race. 

Valdez said in court papers that he served as president of MSO of Puerto Rico, also owned by a subsidiary of Aveta, for eight months until his dismissal in December 2010. MSO worked with local doctors to coordinate coverage for some 230,000 elderly and disabled people then enrolled in those two Aveta-related Medicare Advantage health plans. In a press release touting his hire, Aveta said Valdez would enhance medical care while "effectively managing healthcare costs." 

Aveta's Puerto Rico health plans and MSO are now operated by InnovaCare Health Solutions, according to the firm's website. InnovoCare has the same Fort Lee, New Jersey office and phone number as Aveta. Several members of the Aveta board, including founding principal investor Daniel E. Straus, have been affiliated with both companies. Innovacare general counsel Christopher J. Joyce declined to discuss the corporate structure. 

Straus, a prominent investor in several health-care businesses, also has worked with hedge funds and as a New York City real estate developer. Joyce said Straus would have no comment.

The whistleblower suit is significant not only for the magnitude of overbilling it alleges. It also raises questions about federal oversight of billing practices by health plans that contract with the government to cover nearly 16 million Americans, at a cost expected to top $150 billion this year.

The federal government paid the two Puerto Rico plans a total of between $1 billion and $1.8 billion annually from January 2007 through December 2010, according to the suit. Up to $350 million a year was for bills that were "improperly inflated," according to Valdez. 

Valdez argues that the health plans sought out chronically ill patients, who command the highest Medicare payment rates, but overcharged for them by manipulating a billing formula known as a "risk score." Medicare sets risk scores for all patients based on medical data submitted by the health plans that indicates how sick patients are. Sicker patients mean higher rates. 

These scores "were false or fraudulent because they were based on diagnosis codes that were not substantiated by the medical records or by the medical conditions of the Medicare beneficiaries served by the plans," the suit states. 

Valdez said he was told by top executive Shinto in May 2010 that an internal audit of medical records had confirmed that two-thirds of patient risk scores could not be supported. 

According to Valdez, the audit results were discussed at several executive-level meetings, including some at which top brass talked about setting up a reserve fund in case federal officials should conduct their own review and demand refunds. 

At a July 2010 meeting, Penelope Kokkinides, Aveta's chief operating officer, allegedly said the company would be "screwed" if it was audited by the federal Centers for Medicare and Medicaid Services (CMS), especially if the review reached back to 2007. She said overcharges had been "particularly egregious" that year, as the suit paraphrased her alleged remarks. 

Kokkinides estimated the liability to the government was as high as 20 percent of its total Medicare payment, or about $350 million a year, Valdez alleges. Kokkinides declined to comment on the suit.

During his tenure there, Valdez said, company officials gave no indication they would "notify CMS of the problem or return the improperly obtained funds to the government," according to the suit. CMS regulations not only require Medicare Advantage plans to attest that risk data they present for payment are accurate but also obligate them to return any overpayments they discover. 

Still, CMS largely trusts the nation's 700 Medicare Advantage plans to report risk scores accurately and honestly -- and conducts only a smattering of yearly audits. There's no indication that CMS officials reviewed the risk scores for the two Puerto Rican plans. In its 2012 annual financial report to insurance officials in Puerto Rico, MMM Healthcare stated that it had not been subject to a CMS payment audit. 

However, in late March of 2011, Valdez said he took his allegations to the U.S. Attorney's Office for the Central District of California, which has since launched an investigation. That investigation "has not been completed," government lawyers wrote in a January 2014 court filing. 

Valdez blamed the faulty risk scores on errors in "medical status visit" forms filled out by the plans' doctors. The visits were done to help identify "high risk" members and maximize payments for them. Doctors participated in a profit sharing arrangement that paid them 50 percent to 60 percent of surplus money that came in from Medicare as a result of the annual visits, according to the suit.

The lawsuit alleges that company officials failed to take "corrective measures to delete or filter out" inaccurate codes, although they knew the doctors had an incentive to inflate them. 

In July 2010, executives decided to hold onto millions of dollars in these payments to the doctors in case CMS auditors required the company to repay money, according to the suit. 

That concern didn't dissuade company officials from borrowing $100 million, which was used to pay a dividend to investors, "the largest of whom was founder and Chairman Daniel E. Straus," according to the suit. Valdez said he objected to paying the dividend while the potential liability to the government "remained unaddressed."

Source: CNBC