Tuesday, February 20, 2007

NBC Nightly News Series - Trading Places

Category: Elder Law

NBC Nightly News has an ongoing series about caring for your parents. In the series, they focus on how some well known NBC personalties are taking on this responsibiliy. Links to informative clips are below:

Click to share your stories
Video: Dealing with dementia
Video: Practical advice to care for parents
Video: Vermont funds home nursing care
A generation caught between two others
Tom Brokaw: Having is easier than not
Ann Curry: At 77, Dad embraces life
Dr. Nancy Snyderman: A new chapter
Tim Russert: It takes a team
Brian Williams: A little help from angels

Monday, February 05, 2007

A Technological Alternative to Moving a Senior From Their Home

Category: Elder Law

This article In Elder Care, Signing on Becomes a Way to Drop By from the New York Times describes a technology based alternative to home health care, assisted living, or nursing home care for seniors - instead of moving a senior to a safer location, why not make their home safer for them to live in alone?

CONNIE ARAPS, 57, of Delray Beach, Fla., thought that her father, Tom Araps, 87, was managing just fine on his own. But when he came to stay with her for a few months in 2005, she found that he was skipping meals, sleeping all morning and not taking daily walks.

To satisfy her father’s desire to live alone, but to ease her mind about his safety, Ms. Araps found an apartment for him less than a mile from her home and had it equipped with QuietCare, a home health alarm system provided by ADT Security Services.

She drops by his apartment often, and logs into a Web site several times a day to check on him. Motion sensors track how often Mr. Araps opens the refrigerator, when he gets out of bed and how long he stays in the bathroom. If his normal patterns vary, the alarm company alerts her. One day, the company called her to say that no one had entered or left the apartment all day. It turned out that a home health aide had failed to show up, and her father had not received his diabetes medication. Ms. Araps rushed over and made sure that her father took his pills.

The article does recognize that this technology is no a cure-all - who will monitor it? can they respond effectively if a change is shown? what about privacy concerns? But for some families, this can be an effective and economical solution to satisfy both the parents and the children's concerns.

Monday, January 15, 2007

Caregiving Contracts Valuable Tool Between Family Members

Category: Elder Law

From Elderlawanswers.com - Put Caregiving Arrangements in Writing, Lawyers Advise. The article emphasizes some valuable points about the need for a Caregiving Contract.

"A formal caregiver contract can outline the responsibilities of a caregiver, and specify the payment he will receive for services rendered and expenses, the article states. A contract ensures that the cost of care is paid at the time it is received and is not left for family members to wrangle over as part of a later division of assets."

Importantly, in the New Jersey, without a Caregiving Contract in place, payments to the family member caregiver from the senior family member can be deemed a transfer/gift from the senior family member to the family member caregiver, and disqualify the senior family member from Medicaid.

Tuesday, January 02, 2007

For Medicaid Recipient, Either Spouse's Annuity must Name State as Beneficiary

Category: Elder Law,

Courtesy of Elderlawanswers.com, the DRA has been "corrected" to clarify that an annuity owned by a Medicaid recipient or his or her spouse must name the state as the primary remainder beneficiary for Medicaid benefits paid to either spouse, not just benefits paid on behalf of the owner of the annuity.

Tax Bill Makes Change in DRA Annuity Provision - Elder Law Answers Articles: "The recently enacted Tax Relief and Health Care Act of 2006, H.R. 6111, includes several “technical corrections” to the Medicaid provisions of the Deficit Reduction Act of 2005 (DRA). One was made to the annuity rules in the Deficit Reduction Act of 2005 (DRA) transfer-of-asset provisions.

The DRA requires that Medicaid long-term care applicants name the state as the remainder beneficiary of annuities in which they have an interest, in an amount equal to what the enrollees receive in coverage from the state, 42 U.S.C. §1396p(c)(1)(F)(i). The DRA provided that state remainder rights were equal to the amount paid on behalf of an “annuitant”; the Tax Relief bill replaced this with “institutionalized individual.”

Thus, if the wife of a nursing home resident purchases an annuity, under current law she must name the state as the remainderman for her own potential benefits. Under the change, she may have to name the state as the remainderman for her husband’s care instead. The change is retroactive to the bill's enactment."

Tuesday, August 15, 2006

Caregiving Tools - For Those Caregiving and Those Advising

Category: Elder Law

From the Family Caregivers Alliance, some excellent tools for Caregivers and professionals who work with Caregivers.

Those who are caring for an elderly or disabled family member have unique needs and concerns.
"Approximately 44 million American families and friends provide unpaid care to another adult, sometimes around the clock. Wives, daughters, sons, partners, fathers, nieces, brothers: —they provide approximately 80 percent of the long-term care in the United States."
For Caregivers, Caregiving Info & Advice has a wealth of resources on topics ranging from hands on skills to Caregiver depression (an all too common result ofCaregivingg).

For professionals who work with Caregivers, there is a Caregivers Count Toolkit, described as:

"It's a step-by-step resource filled with practical information and resources. It'’s designed for program administrators and practitioners to:

1. Sharpen your awareness of famiCaregiversers as an at-risk population in need of assessments to determine their own physical, emotional and financial problems.

2. Give you new knowledge and skills so you can create and put to useCaregiverver assessment that works in your particular practice setting."

Tuesday, August 08, 2006

What is the Medicaid Look-Back Period under the DRA

Category: Elder Law

What is the appropriate Medicaid Look-Back period under the DRA?

This is an important question for anyone making a Medicaid application in that the local office will request financial records for the time period of the Look-Back. I find it can be very difficult to gather 3 years of records for a senior who now requires Medicaid to pay for his or her long term care - 5 years is an even greater burden.

So what is the Look-Back Period? I had been going with 60 months, as until recently all the States that had created the DRA enacting legislation had used that timeframe.

However, in Most States Fudging DRA Look-Back Change from Elderlawanswers.com, there is an excellent analysis that the states may have the changes to the Look-Back Period wrong.

In New York's enacting legislation, they have taken note of the fact that that DRA did NOT in fact changes the Look-Back Period from 36 months to 60 months. Instead, it said that IF there had been a transfer in the 60 months after enactment, THEN there was a 60 month Look-Back for the transfers.

New York then has taken a staggered approach to the Look-Back Period, since 60 months obviously have not expired since the DRA was enacted. For the first 36 months, the Look-Back Period remains 36 months (since any transfers would be before the DRA was enacted). The Look-Back Period then extends to 37 months in the 37th month after the DRA to capture any transfer in that month, until it finally reaches 60 months.

This approach appears to resolve the issue of the 60 month Look-Back for transfers after 2.8.06 with the 36 month Look-Back period in the Code not being changed by the DRA.

One would hope that in creating its enacting legislation to the DRA that New Jersey would take such a measured approach as well.

Most States Fudging DRA Look-Back Change - Elder Law Answers Articles:

"Since 1993, the look-back date on a Medicaid application for long-term care coverage has been 36 months, 42 U.S.C. S. 1396p(c)(1)(B), and this figure was not erased by Congress in the amendments to the statute it made through the DRA. Instead, the 36-month figure was preserved and a 60-month look-back date was added to the statute but made applicable only to transfers that occurred after the DRA effective date.

The last time Congress made any modification to the look-back date was in the Omnibus Budget Reconciliation Act of 1993, P.L 103-66 (OBRA-93), when it simply deleted '30' from the statute and replaced it with '36,' and thereby left little doubt that it intended to increase the look-back period on all prospective applications to 36 months. But Congress chose not to make the change in the same manner in its DRA amendments. In keeping the 36-month figure in the statute, Congress was clearly indicating that a 36-month look-back date is still applicable in some fashion. By attaching the 60-month look-back date to transfers made after the DRA enactment date, as opposed to applications filed after that date (a la OBRA-93), the design was obviously to at least phase in the extended look-back date over time. Based on the language Congress used in the DRA, the look-back period cannot be greater than 36 months until at least February 2009, because that will be the first point at which an
individual will have possibly made a transfer that occurred more than 36 months after the DRA enactment.

Agreeing with this reading of the DRA statute, New York keeps the look-back period at 36 months (60 months for trusts) until February 1, 2009. Beginning on that date, Medicaid offices will require resource documentation for the past 37 months (60 months for trusts). "

Tuesday, August 01, 2006

CMS Issues Guidance on DRA to State Medicaid Offices

Category: Elder Law,

Courtesy of Elderlawanswers.com, at long last, the Centers for Medicare and Medicaid Services (CMS) has finally given guidance to the State Medicaid directors on the provisions of the Deficit Reduction Act (DRA).

Some of the guidelines provided:

The lookback period is 60 months for any transfer of assets made on or after the date of enactment of the DRA (February 8, 2006).

  • The period of ineligibility will begin with the later of the first day of a month during or the month after which assets have been transferred for less than fair market value, or the date on which the individual is eligible for medical assistance under the state plan and is receiving institutional level of care services that, were it not for the imposition of the penalty period, would be covered by Medicaid.

  • Once a penalty period is imposed, it is not tolled but instead will continue to run if an individual subsequently stops receiving long-term care.

  • The state must be named as a remainder beneficiary on an annuity purchased on or after February 8, 2006. CMS states that the provisions of 1917(c)(1)(G), which set forth required criteria if an annuity purchased by or on behalf of an annuitant who has applied for medical assistance is not to be treated as a transfer of assets, are "in addition to those specified in 1917(c)(1)(F) pertaining to the State's position as remainder beneficiary." [boldface in original]

  • If the state is not named as a remainder beneficiary, the purchase of the annuity will be considered a transfer for less than fair market value. CMS interprets the statute to mean that the full purchase value of the annuity will be considered the amount transferred.

  • Any transaction that changes the course of payments to be made by the annuity or the treatment of the income or principal of the annuity (including additions of principal, elective withdrawals, requests to change the distribution of the annuity, elections to annuitize the contract and similar actions) taken on or after February 8, 2006, will cause all transfer provisions of the DRA to apply to the annuity.

The guidelines also cover the following topics:

  • The application of the income first rule under spousal impoverishment.

  • Disqualification for long-term care coverage for individuals with more than $500,000 in equity in their house.

  • The treatment of continuing care retirement community entrance fees.

  • The expansion of state long-term care insurance partnerships.

The full text of the documents is available from the National Senior Citizens Law Center:

Read the CMS Documents:

Thursday, June 15, 2006

Medicare Rejects your Claim? Appeal, and Chances are You Win!

Category: Elder Law, Financial Planning

What do you do when Medicare rejects your claim for benefits? Why appeal of course.

According to the Medicare Rights Center, a national nonprofit organization "Appealing is easy and most people win so it is worth your while to challenge a Medicare denial,". The denial of coverage may be due, for example, to a simple coding error in your doctor's office.

People have a strong chance of winning their Medicare appeal. According to Center, 80 percent of Medicare Part A appeals and 92 percent of Part B appeals turn out in favor of the person appealing.

The Medicare Rights Center offers the following tips to maximize your success when appealing your denial:
  • Write "Please Review" on the bottom of your Medicare Summary Notice (MSN), sign the back and send the original to the address listed on your MSN by certified mail or with delivery confirmation.
  • Include a letter explaining why the claim should be covered.
  • When possible, get a letter of support from your doctor or other health care provider explaining why the service was "medically necessary."
  • Save photocopies and records of all communications, whether written or oral, with Medicare concerning your denial.
  • Keep in mind that you only have up to 60 to 120 days from the date on the MSN (depending if you are in a private Medicare plan, like an HMO or a PPO) to submit an appeal.
Click here for more information from the official Medicare website, including appeals forms.

Monday, May 15, 2006

NJ EASE - A Clearinghouse for Info on Services available to NJ Seniors

Category: Elder Law

As I was considering the Medicare Part D Prescription Drug Plan debacle, characterized lack of real communication, poor information, or no information, I was wondering what is a GOOD place for seniors to get information about services available to them.

One such excellent source in NJ EASE, self-described as:

What is NJ EASE?
NJ EASE (New Jersey Easy Access, Single Entry) is the easy
way for seniors and their families to get information about and access senior
NJ EASE is one toll-free telephone number to put you in touch with
someone to help you learn about and apply for important programs and benefits.
NJ EASE promotes independence, dignity and choice for New Jersey’s older
When you call NJ EASE a person (yes, a real, live, human) from an agency in your county dealing with seniors will answer the phone and direct you to services available to seniors. They do not give recommendations for certain companies; instead, they act as a clearinghouse to find local companies to assist seniors with things such as:

Healthcare * Insurance * Home Care Services * Long Term Care Options * Transportation * Social Activities * Nutrition * Volunteer Opportunities

Although NJ EASE does have a website, it is a telephone based service, so those seeking more information should call 1-877-222-3737.

Friday, May 05, 2006

Implications of a Life Estate -- A Medicaid Planning Option

Category: Elder Law

From Newsday.com, an excellent outline, not in legalese, of a possible Medicaid Planning technique under the current law where a parent is moving into a child's home.

Implications of a life estate:
"The problem: My 80-year-old mother's health is declining, and she's moving into our home. After selling her house, she'll have about $300,000. Can she purchase a life estate in our home in order to preserve her money if she someday has to enter a nursing home?

The expert: Robert J. Kurre, certified elder law attorney, Robert J. Kurre & Associates, P.C., Great Neck.

The rules: Under the Deficit Reduction Act of 2005, a person who purchases a life estate interest in another's home for fair market value - and then lives there for at least a year - does not face an ineligibility period for Medicaid nursing home benefits. There is pending litigation challenging the constitutionality of the overall federal act, and it has not been implemented in New York. However, it's likely that the law will eventually be enacted, retroactive to Feb. 8, 2006.

The strategy: If she's expected to live in your home for at least a year, your mother could purchase a life estate interest in your home, which gives individuals not considered owners of a property certain rights to that property, including the right to live there. Consult with a qualified elder law attorney to determine whether this is the best strategy for her. The attorney also can help you determine the amount for which the life estate should be purchased, based on your mother's age and your equity interest in the home.

How it works: A life estate has no value for purposes of determining an individual's eligibility for Medicaid. The holder of the life estate (the 'life tenant') has the legal right to live on the property for life without paying rent. Upon the life tenant's death, the life estate is extinguished.

The results: Your mother's purchase of a life estate in your home could protect the proceeds from the sale of her house. But if she purchases the life estate, and you decide to sell your home during her lifetime, your mother would have to sign the new deed and a portion of the sale proceeds would be payable to her as the life tenant. Those proceeds would count as her resources for Medicaid purposes and, depending on the situation, could cause her to incur adverse tax consequences."

Wednesday, May 03, 2006

US Supreme Court - Medicaid May Only Lein against a Settlement to the Exent of Medical Expenses Awarded

Category: Elder and Disability Law

A very important unanimous ruling from the US Supreme Court for disabled persons - in the case of a personal injury settlment or award, a State may only recover payments it has made on a disabled persons behalf (ie: meidical care provided under Medicaid) from that portion of the personal injury settlment or award that was allocated to medical expenses in the award. In other words, if there is a $300,000 personal injury award, and it is allocated $150,000 to medical expenses, and $150,000 to pain and suffering, and the State has expended $200,000 in medical care, then the State may only recover up to $150,000 of costs, the amount of the personal injury settlment or award allocated to medical expenses.

An excellent summary of the new key ruling from Elderlawanswers.com - High Court Rules States May Place Lien Only on Medical Portion of Settlement:

The U.S. Supreme Court has unanimously ruled that an Arkansas statute requiring Medicaid applicants to assign to the state the entirety of any settlement violates the federal Medicaid law's "anti-lien statute," and that the state may recover only from those portions of third-party awards allocated for medical expenses. Arkansas Department of Health and Human Services, et al. v. Ahlborn, 547 U.S. ____

Heidi Ahlborn was rendered permanently disabled as the result of a car crash. While being treated for her injuries, Ms. Ahlborn applied for and began receiving Medicaid benefits. In applying for benefits, she assigned to the Arkansas Department of Human Services Arkansas (ADHS) her right to the entirety of any third-party payment — not just that portion made for medical care – as required by Arkansas law. Ms. Ahlborn subsequently received $550,000 in a lump-sum settlement from the tortfeasor. The Director of ADHS asserted a lien against Ahlborn's settlement for the amount of benefits ADHS provided, $215,645.30.

Ms. Ahlborn sued, arguing that ADHS can recover only that portion of her settlement representing payment for past medical expenses, estimated to be $35,581.47. She contended that the Arkansas recovery scheme conflicts with the federal "anti-lien" statute," 42 U.S.C. § 1396p(a)(1). Arkansas countered that the settlement remains property of the tortfeasor until the state is fully reimbursed for all funds expended on Ms. Ahlborn's medical care. Among other cases, the state cited Houghton v. Dep't of Health, 57 P.3d 1067, 1069 (Utah 2002).

The district court ruled that the state may recover from Ms. Ahlborn's settlement the total amount of benefits provided under the Medicaid program, regardless of whether the settlement funds represent payments for the cost of medical services. Ms. Ahlborn appealed.

The U.S. Court of Appeals for the Eighth Circuit reversed, ruling that Ms. Ahlborn's right to a settlement was her "property" and that the state could not "circumvent the restrictions of the federal anti-lien statute simply by requiring an applicant for Medicaid benefits to assign property rights to the State before the applicant liquidates the property to a sum certain." Ahlborn v. Arkansas Dept. of Human Services (8th Cir., No. 03-3377, Feb. 9, 2005).

Arkansas appealed. In a unanimous opinion written by Justice Stevens, the United States Supreme Court affirms, ruling that federal Medicaid law does not authorize the state to assert a lien on Ms. Ahlborn's settlement in an amount greater than the amount allocated for medical expenses, and that "Arkansas' statute finds no support in the federal third-party liability provisions, and in fact squarely conflicts with the anti-lien provision of the federal Medicaid laws." The Court also rejects the argument of the state (and its amici, including the United States) that under its ruling parties to a tort suit will simply "allocate away the State's interest," in the Court's words.

For the full text of this decision, go to: http://www.supremecourtus.gov/opinions/05pdf/04-1506.pdf.

For an analysis of the Ahlborn case's implications written prior to the Supreme Court's ruling by ElderLawAnswers member John J. Campbell, click here.

Monday, April 24, 2006

Cultural Differences - In China, Ignore your Parents at Your Peril

Category: Elder Law

Most people are uncomfortable with the plight of seniors separated from their families and alone in their final years - but is there another way? In China, society and government are taking action to mandated filial loyalty and support. At the present time, there is no legal duty in the US for children to support their parents. I found this very interesting article, Charlotte Observer - Ignore parents? At your own peril that shows another road to caring for our older family members. Notably, "Only 1 percent of Chinese older than 80 are in elder care facilities, compared with 20 percent in the U.S., according to the Washington-based Center for Strategic and International Studies."

"In Shanghai, the Nanjing East Road Neighborhood Committee recently took to
public shaming to ensure that people attend to their aging parents. Anyone who
doesn't visit at least once every three months faces having his or her name posted on a community signboard.

Members of a nearby senior community announced a different approach: They
would fine offspring $5 if they didn't invite their parents home for Chinese New

And then there's the Chinese government itself: Shirkers face five years in prison for failing to support or take care of their parents.

In the battle to safeguard the tradition of filial piety, China's social watchdogs are employing many weapons: shame, fines, bribery, guilt and flattery."

The article goes on to consider how the changes of the 21st century have been acting to undermine strong traditional Chinese family values. It leads to thoughts about how we can perhaps internalize some of the elder care debate in this country - if of course there was a way to pay for it since most long term care funding options favor institutionalized care - but that is a post for another time.

Thursday, April 20, 2006

The Cost of Gifting Your Home

Category: Elder Law, Estate Planning, Tax Law and Planning

This brief article from mortgage101.com outlines why there may be a large cost of making a gift of your home to your children now, instead of continuing to live in it an bequeathing it to your children at your death.

"First and foremost, your child or friend's basis in the house will be what you paid for the property, plus major improvements. Because this cost you paid years ago is probably much lower than today's soaring home value, there's a chance tax will be owed on a subsequent sale.

For example, if you purchased your home in 1970 for $60,000 and it is now worth $450,000, your child's basis would be $60,000 if you chose to transfer the home to the child as a gift. If the married child sells the home 10 years down the road for $760,000, their tax liability would be on $200,000 ($760,000 minus the $60,000 basis, minus the $500,000 exclusion for married couples). Taxpayers in the 15 percent tax bracket would thus owe the Internal Revenue Service approximately $30,000 in capital gains tax."


If the child did not live in the house, there would not be a "$500,000 exclusion for married couples" as outlined above. That only applies if the child and his or her spouse lived in the house for 2 years or more before sale. If you gifted the house to a child and you continued to live there, upon sale the child's basis would only be $60,000, leaving $700,000 subject to capital gain.

Also, while the federal capital gain tax rate is generally 15%, the state may have an additional capital gain rate. For example, in New Jersey, the capital gain rate is 7 1/2%, bringing the total combined capital gains tax rate to 22 1/2%, which on a $700,000 sale would be $157,500 - not chump change.


First, for Medicaid planning it may be worth the potential capital gains tax cost to remove the asset from your "available assets" so that the house does not have to be sold to provide for your long term care.

Second, it is possible to gift part of the house now, and keep enough of it to get a "step-up in basis" at your death. For example, if you give away the house, but retain the right to live there during your lifetime (a "life estate"), then the house will be part of your taxable estate. This means that your children's basis in the house upon your death would be the date of death value, $760,000 in the above example. Thus, if the children sold the house for $760,000, there would be no capital gain. But beware of the trap that keeping the asset in your taxable estate may cause an estate tax issue (New Jersey's estate tax exemption is only $675,000) just to avoid a capital gains tax issue. (A last point that here the NJ estate tax rates, which range up to 16% on amounts over $675,000 would be far less then the combined federal and state capital gains rates of 22.5% on $700,000 of gain.)

Wednesday, April 12, 2006

Medicare Drug Prescription Scam in Northern NJ?

Category: Elder Law

This disturbing story was sent to me through my membership in the Essex County Coalition for the Protection of Vulnerable Adults:

"Hi Louise,

I just had an unfortunate event that I would like to share with you, and perhaps you could alert the Coalition members.

My grandparents are lifelong residents of Essex County, and I recently enrolled them in a Medicare Prescription Drug Plan at the www.medicare.gov website. A week later, an agent who works for Diversified Senior Financial Solutions in Bloomfield showed up on their doorstep in their early evening. They, of course, cannot hear well; were confused and did not expect an evening visitor. They asked the agent if I sent him and he said yes. So they let him in, trusting that I arranged this. He misled them; took their Medicare #’s; had them sign documents; and left. Ultimately, he enrolled them in a Medicare Advantage Plan that includes health coverage, dental, hearing and supplemental Rx as well. All to be deducted from their monthly social security which is not enough to live on as it is. Luckily, I was able to rectify the situation after threatening to call the police and Better Business Bureau, but I am fearful for other unsuspecting elderly residents of Essex County.

I have reported them to Medicare Rx fraud line 877-772-3379. Their website states that there is a scam in New Jersey.

I do have more detailed information if you should need it. Have a lovely holiday and I will see you at the next meeting.

Thank you,


Monday, April 10, 2006

Applying for Medicaid in NJ? Is NJ Giving the Right Info Re: Transfer Penalties?

Category: Elder Law

Is New Jersey mis-stating the new Medicaid Law for new applicants? Rumors are that Medicaid applicants are being unfairly denied access to Medicaid by the local offices applying the new Medicaid transfer laws to transfers that took place BEFORE the new Medicaid law was passed.

The Deficit Reduction Act of 2005 was signed into law by President Bush on February 8, 2006. I have previously summarized and debated and debated the provisions of the DRA. One item that should NOT be at issue is the effective date of February 8, 2006. The law specifically says that its is effective for all transfers AFTER that date. However, it seems that the State of New Jersey seems to be ignoring that little fact.

The law governing transfers made BEFORE February 8, 2006 was that (1) any transfer created a penalty, (2) any transfer within 36 months from the date of the Medicaid application needed to be disclosed, and (3) the penalty was reduced by (approximately) $6050 for each month that passed from the month of transfer. Thus, a $20,000 gift made in January, 2006 should create a penalty period of 3 months, which would expire at the end of March, 2006, so that you would be eligible for Medicaid starting April, 2006 (assuming you otherwise qualified).

The law governing transfers made AFTER February 8, 2006 is that (1) any transfer created a penalty, (2) any transfer within 60 months from the date of the Medicaid application needed to be disclosed, and (3) the penalty is reduced by (approximately) $6525 for each month that passes starting from the date that (a) you are institutionalized, and (b) you have no other funds to pay. Thus, a $20,000 gift made in March, 2006 should create a penalty period of 3 months and 2 days. This penalty would start when (a) you are in a nursing home, and (b) your total countable assets are $2000 or less (how your care is paid for during the penalty period is a separate question).

It appears that some New Jersey counties are telling people making applications currently that there is a 60 month lookback. This 60 months transfer penalty should only apply to transfers made after 2.8.06.

Monday, April 03, 2006

Annuity Ownership OK for Medicaid Qualification - PA Court Ruling

Category: Elder Law,

My blogging has been sporadic of late, but I am now back in the blog business.

A great ruling for seniors holding annuities. Usually, an annuity is a contract to pay a certain amount a month for a period of time (ie: $100 a month for life"). Many Medicaid agencies, including those in New Jersey, took the approach that the income right (the "$100 a month") could be sold (similar to the way a personal injury settlement could be sold), so therefore the annuity was treated as an accessible resource, even though (1) under the contract, the person only had the right to a monthly income, not to liquidate the asset and take it back, and (2) the annuity had not in fact been sold on the theorectical open market. The result, a person who in fact had no access to additional assets (just the income from those assets) was denied access to Medicaid because of the theoretical value of those assets. The result is even more troubling because seniors are the target market for annuities, which means that these same seniors end up being punished for making this type of investment, and would have not way of righting the situation.

The Federal Court in Pennsylvania noticed in the inequity in this law, and ruled that such an annuity could not be counted as an asset. The summary below is from elderlawanswers.com.

"A U.S. District Court finds that an actuarially sound annuity is not an
available resource under federal Medicaid law even if it is marketable, and that
Pennsylvania's provisions to the contrary contradict federal law. James v.
Richman (U.S. Dist. Ct., M.D. of Penn., No. 3:05-2647, March 20, 2006).
Robert James entered a nursing home and applied for Medicaid benefits. Mr.
James's wife, Josephine, purchased an actuarially sound annuity in order to
reduce the couple's assets to the required level. The state denied Mr. James's
application, claiming that the annuity was an available resource. Under state
law, immediate annuities were presumed to be marketable and therefore available

Mr. James asked the court for a restraining order preventing the
state from denying him Medicaid benefits. In support of its position that the
annuity was marketable, the state submitted an affidavit from a potential
purchaser of the annuity.

The U.S. District Court for the Middle District of
Pennsylvania grants the restraining order, holding that the state law
contradicts federal law, which excludes irrevocable, actuarially sound annuities
from resource determinations. Because the annuity is permitted under federal
law, it is not an available resource and Mr. James cannot be denied benefits.

Mr. James was represented by ElderLawAnswers member attorney Matthew J.
Parker of the Elder Law Firm of Marshall and Associates. "

Monday, March 13, 2006

Are you Factoring Medical Costs into your Retirement Needs Goals?

Category: Elder Law, Financial Planning

From Elderlawanswers.com, "Retired Couples Will Need $200,000 for Basic Medical Costs"

Couples retiring at age 65 who lack employer-sponsored health coverage will need
an average of $200,000 to cover basic medical costs during retirement, according
to a new annual estimate by Fidelity Investments.

Fidelity has found that most people don't take health care into account when planning for retirement, even though it represents the largest single expense for most people in retirement. The 2006 estimates are a 5.3 percent increase from $190,000 in 2005, according to Fidelity. The brokerage's estimate for health-care costs for retired couples has jumped by $40,000 since it began tracking such expenses in 2002.

The estimate assumes that a couple 65 or older relies heavily on Medicare. The estimate includes expenses associated with Medicare Part B and D premiums $64,000), Medicare co-payments, coinsurance, deductibles and excluded
benefits ($72,000), and prescription drug out-of-pocket costs ($64,000).
Fidelity's estimate does not include other health expenses, such as
over-the-counter medications, most dental services and long-term care.

Meanwhile, Fidelity predicts that the number of companies offering
health benefits to retirees will fall sharply in coming years.

care costs have the potential to significantly erode an individual's retirement
savings," said Brad Kilmer, a vice president at Fidelity who oversaw the study.
"This is the part of retirement people frequently forget."

For a
MarketWatch article on the study that offers tips on how to reduce the cost of
health care in retirement, click here.

For a Los Angeles Times article
on the Fidelity study, click here.

Wednesday, March 08, 2006

Real Medicaid Reform for NJ Seniors - Expanding Home Based Care

Category: Elder Law

A new proposed law may give New Jersey seniors who require assistance with their care more reasonable choices. At present, the Medicaid system is skewed towards nursing home care - the availability of Medicaid as a financing source for assisted living or home based care is extremely limited. As a result, seniors who do not require a nursing home level of care are being forced to a nursing home to get the care they do need. This is a huge waste of state and federal resources, as the cost of the care being provided eclipses the cost of the care needed - typically bureaucracy. However, as this article from the CourierPostOnline points out, there may now be hope to be able to match care with needs at less cost.

Courtesy of: CourierPostOnline - South Jersey's Web Site:

"As soon as 2008, elderly and disabled New Jerseyans in every county may
get a choice in the type of long-term care they receive through Medicaid, under
a bill introduced in the state Legislature Monday.

The legislation seeks to reallocate Medicaid funds in order to balance the amount of money put toward home- and community-based programs with that spent for institutional care.

Currently, about 82 percent of funding goes toward institutional care, while
about 17 percent goes toward those living at home, said Terrence Duffy, adjunct
professor at Rutgers University's Graduate School of Social Work and member of
the Elder Rights Coalition of New Jersey.

Backers of the bill say at-home care and community-based care are cheaper than institutional care. They also say people healthy enough to live at home if home health aides, day programs and other alternative care options were available are sometimes forced into nursing homes.

That's 'because of where money is allocated,' Sy Larson, president of the New Jersey chapter of AARP, said at a State House news conference announcing the bill.

"It's a wrenching thing for a lot of people who for medical reasons and sometimes mental reasons need care, but they certainly do not require being put into an institution," said Martin Cramer, co-chairman of the Elder Rights Coalition.

The proposed law would set up a pilot program in Atlantic and Warren counties by next January. If successful, it would be extended to all 21 counties by 2008.

New Jersey's "aging population will be booming over the next decade," said bill sponsor Sen. Loretta Weinberg, D-Teaneck. She said the number of New Jerseyans 60 and older is now about 1.6 million but is forecast to double in the next 25 years.

Compared with $70,000 per year for a nursing home, it costs about $20,000 per year for a senior or disabled adult to be enrolled five days a week in the Atlantic County day program called CARING Inc., said bill sponsor Assemblyman Jim Whelan, D-Atlantic City. "We can reach that many more patients by the money we save," Whelan said.

About 14 other states have similar laws, Duffy said.

Tuesday, February 07, 2006

Sounds too Good to be True? Financial Scams Targeting Seniors on the Rise

Category: Elder Law, Estate Planning, Financial Planning

An article on an unfortunate trend from USATODAY.com - Financial scams expected to boom as boomers age addressing the issue of aggressive marketing of estate and financial planning seminar to seniors, where the products offered through the seminars don't meet, or are inappropriate for the senior's needs.

"While people 60 and older make up 15% of the U.S. population, they account for about 30% of fraud victims, estimates Consumer Action, a consumer-advocacy group.

As this gargantuan generation of boomers starts to retire, 'You're going to see more of these seminars and more of these sales pitches,' says James Nelson, assistant secretary of state in Mississippi. 'Wherever retirees are congregated, you're going to have these people preying on them.'"

There is real money controlled by baby-boomers, which unfortunately can make them targets for unscrupulous marketers of products. The article states that "[b]oomers have more than $8.5 trillion in investable assets. Over the next 40 years, they stand to inherit at least $7 trillion from their parents, research firm Cerulli Associates estimates."

This does not mean that all seminars geared to estate planning and financial planning are scams - just the opposite is more likely true. Seminars are a wonderful opportunity for attorneys and financial planners to educate the public about complex areas of the law that may effect them, as well as investment opportunities to reduce those risks. But, you should exercise some caution and common sense in following up from these seminars. Some things to keep in mind.

  • Only a licensed attorney in your state can prepare a Will, or should prepare any estate planning document, including a trust. You can contact your state or local bar association to see if the attorney is in good standing and if any complaints have been successfully filed against him or her.
  • You and your goals and needs should be an attorneys first concern - not the goals of your children, the financial planner, or the attorney. If you don't feel that your goals and needs are the first priority, see some-one else.
  • There are no magical solutions to estate and tax planning - there are tried and true techniques that an experienced estate planner can apply to your situation. If someone claims to have the secrets of a good estate plan, you need to know that there are no secrets.
  • There is no one magic financial product that solves all woes - as with estate planning, the right product for you must be tailored to your specific asset mix, income, needs and goals. An experienced financial planner will not recommend a product until he or she has analyzed your needs. And be sure to ask for (1) the charges for the product, (2) the agent's commission, and (3) any penalties that might exist in liquidating the product.

If you do think you have been a victim of fraud, there is a sidebar in the article talking about your options.

Thursday, February 02, 2006

New Medicaid Law Passed by Congress

Category: Elder Law

From Elderlawanswers.com

Congress Passes Bill Containing Punitive New Medicaid Transfer Rules: "By a vote of 216-214, the U.S. House of Representatives has passed budget legislation that will impose punitive new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care. The Deficit Reduction Act of 2005 now goes to President Bush for his promised signature. "

A more detailed excerpt from the article:

The Impact on the Elderly

The legislation will extend Medicaid's "lookback" period for all asset transfers from three to five years and change the start of the penalty period for transferred assets from the date of transfer to the date when the individual transferring the assets enters a nursing home and would otherwise be eligible for Medicaid coverage. In other words, the penalty period does not begin until the nursing home resident is out of funds, meaning she cannot afford to pay the nursing home.

Because the change in the penalty period start date will likely leave nursing homes on the hook for the care of residents waiting out extended penalty periods, ElderLawAnswers has dubbed the bill “The Nursing Home Bankruptcy Act of 2005.” Nursing homes will likely be flooded with residents who need care but have no way to pay for it. In states that have so-called "filial responsibility laws," the nursing homes may seek reimbursement from the residents’ children.
The bill also will make any individual with home equity above $500,000 ineligible for Medicaid nursing home care, although states may raise this threshold as high as $750,000.

The legislation also:

  • Establishes new rules for the treatment of annuities, including a requirement that the state be named as the remainder beneficiary.
  • Allows Continuing Care Retirement Communities (CCRCs) to require residents to spend down their declared resources before applying for medical assistance.
  • Sets forth rules under which an individual's CCRC entrance fee is considered an available resource.
  • Requires all states to apply the so-called “income-first” rule to community spouses who appeal for an increased resource allowance based on their need for more funds invested to meet their minimum income requirements.
  • Extends long-term care partnership programs to any state.

In addition, the legislation incorporates provisions in the original budget bill passed by the Senate closing certain asset transfer "loopholes," among them:

  • The purchase of a life estate will be included in the definition of "assets" unless the purchaser resides in the home for at least one year after the date of purchase.
  • Funds to purchase a promissory note, loan or mortgage will be included among assets unless the repayment terms are actuarially sound, provide for equal payments and prohibit the cancellation of the balance upon the death of the lender.
  • States will be barred from "rounding down" fractional periods of ineligibility when determining ineligibility periods resulting from asset transfers.
  • States will be permitted to treat multiple transfers of assets as a single transfer and begin any penalty period on the earliest date that would apply to such transfers.
While the federal law applies to all transfers made on or after February 1, it also gives the states time to come into compliance. This gives families in most states a little time to plan. The deadline for states to enact their own laws varies from state to state, but generally is the first day of the first calendar quarter beginning after the end of the next full legislative session.

The bottom line is if you have been hesitating about seeing an attorney about long-term care planning, hesitate no longer. If you have considered protecting some assets for your loved ones in case you later require long-term care, you should contact a qualified elder law attorney now.

For the full text of the Deficit Reduction Act of 2005 in PDF format, click on: http://www.rules.house.gov/109/text/s1932cr/109s1932_text.pdf The section on the transfer provisions begins on page 222.

For the full text in HTML, go to http://thomas.loc.gov/ and type "S 1932" in the Search Bill Text box. Then click on the fourth version of the bill (S. 1932 EAS).

For an Associated Press article on the vote, click here.

Related ElderLawAnswers articles:
New Medicaid Law Means Adult Children Could Be on Hook for Parents' Nursing Home Bills
Many Poor Will Lose Medicaid Under Budget Bill, Report Predicts

Friday, January 20, 2006

Sketch of New Medicaid Rules - Don't like them? Call your Congressman!

Category: Elder Law

Given Florida's senior population, the proposed changes to the Medicaid laws is a topic that is receiving great coverage. From the South Florida Sun-Sentinel - a layman's thumbnail sketch of the new rules.

The House of Representatives will vote to finalize the new Medicaid Transfer Penalty Rule this on February 1. Contact your congressman to express your concerns about transfer penalties that will leave vulnerable seniors in need of nursing home care no where to go as no funds will exist to pay for their care.

"Currently, making a significant financial gift to friends or family within the past three years would disqualify you from receiving Medicaid coverage for nursing home care. The new law, pending before Congress, extends this so-called 'lookback' period to five years.

If you do make a gift, there is a 'penalty period' before you can reapply for Medicaid, calculated on a formula based on average nursing home cost and the size of the gift. Currently, the penalty period begins when the gift was made. But under the new law, it would begin when the Medicaid application was made, meaning you could wait for many months before you were eligible to reapply.

Anyone with $500,000 or more equity in their home would be disqualified from applying for Medicaid, which might hurt those with modest incomes living in South Florida's inflated housing market. [Similar to New Jersey's highly inflated housing market]

The government would become the prime beneficiary, before children or relatives, on some annuities if the holder applies for Medicaid. Mortgages and promissory notes would be counted as assets.

Nursing home residents, or the homes themselves on behalf of their residents, could ask Medicaid to pay for care by showing a hardship exists. Each state would establish its own hardship process."

Thursday, January 19, 2006

NY Budget Proposal - Eliminate Estate Tax; State Takeover Medicaid Costs

Category: Elder Law, Estate and Inheritance Tax

From Newsday.com - Pataki proposes $110.7 billion budget: "Gov. George Pataki proposed a $110.7 billion state budget plan Tuesday that would reduce property, income and business taxes by $3.2 billion even while pumping up spending on education and energy independence." This article outlines the basic budget package proposal.

Key agenda items are (1) elimination of the New York Estate Tax, and (2) a state takeover the Medicaid program, which is currently administered on the county level, and funded through through the joint efforts of the county, the state and the federal government.

One response to the proposed elimination of the New York Estate Tax from Newsday.com - Elimination of estate tax will cost state millions:

"In the budget unveiled Tuesday, Pataki proposed doubling the amount free from the state's estate tax to $2 million starting in 2007, bringing the exemption in line with federal rules. The exemption would rise to $3.5 million in 2009, and the tax would be eliminated in 2010. While federal law calls for the federal estate tax to be restored in 2011 with a $1 million exemption, New York's tax would disappear permanently.

It could be difficult, however, to get the plan through the state Legislature, where Democrats are looking at it with a critical eye. The state estate tax is expected to bring in $868 million during the fiscal year ending March 31."

One response to the Medicaid issue from ABC affiliate weny.com : 'At the county level, Pataki proposed a $1.1 billion state takeover of Medicaid costs.
"Counties will no longer have spiraling Medicaid costs that push county property tax higher," said Pataki.
"It's good news," said Chemung County Executive Tom Santulli. "But we've got a lot of work to do."
Santulli says the county will still have to foot a $120 million Medicaid bill despite Pataki's proposal.
"That's in growth, not in existing program," Santulli explained. "The program is no smaller than it was before."'

Wednesday, January 18, 2006

US Supreme Court - Oregon's Assisted Suicide Law Legal

Category: Elder Law, Estate Planning, Miscellaneous Musings

From Wills, Trusts & Estates Prof Blog - the United States Supreme Court Upholds Oregon's Assisted Suicide Law:

"The United States Supreme Court has upheld Oregon's assisted suicide law in a 6-3 opinion released today (January 17, 2006).

In 2001, United States Attorney General John Ashcroft determined that assisted suicide was not a legitimate medical practice and thus doctors who prescribe the deadly drugs would be in violation of the Controlled Substances Act (CSA)...

In today's opinion, authored by Justice Anthony Kennedy, the court recognized that the federal government has the authority to punish drug dealers and pass rules for health and safety but that in the case of Oregon's"

See also: Supreme Court Upholds Oregon Suicide Law, AP, Jan. 17, 2006.

"The Supreme Court upheld Oregon's law on physician-assisted suicide yesterday, ruling that the Justice Department may not punish doctors who help terminally ill patients end their lives.

By a vote of 6 to 3, the court ruled that Attorney General John D. Ashcroft exceeded his legal authority in 2001 when he threatened to prohibit doctors from prescribing federally controlled drugs if they authorized lethal doses of the medications under the Oregon Death With Dignity Act....

A Pew Research Center for the People and the Press poll released Jan. 5 found that 46 percent of Americans support a right to assisted suicide while 45 percent oppose it. Assisting suicide is a crime in 44 states, including Maryland, as well as the District. It is a civil offense in Virginia. In three states -- North Carolina, Utah and Wyoming -- the law neither prohibits nor permits assisted suicide. Ohio's Supreme Court has decriminalized assisted suicide, but state regulations do not condone it.

State referendums supporting assisted suicide have failed in California, Maine, Michigan and Washington. A bill failed in Maryland in 1995 and 1996."

Friday, January 13, 2006

Medicare Drug Program Creates Health Care Crisis - Seniors denied Rx drug benefits

Category: Elder Law

From USA Today: Seniors denied Rx drug benefits: "Medicare's new prescription-drug program is causing thousands of low-income seniors and disabled Americans to lose their drug benefits, prompting at least 14 states to pay for their prescriptions.

The problem affects thousands of the 6.2 million people whose drug coverage was automatically transferred from Medicaid to Medicare this month. At drugstores nationwide, pharmacists are telling beneficiaries that they're not enrolled, or their drugs aren't covered, or they must pay deductibles and larger co-payments than they can afford, interviews with federal, state and local officials show. (Related story: Benefit costly for some poor)"

Tuesday, January 10, 2006

Mummy of Woman Who Died in '03 Found in Front of TV

Category: Elder Law, Miscellaneous Musings

This story definitely falls into the category of strange but true:

Woman Who Died in '03 Left in Front of TV - Yahoo! News: "The mummified body of a woman who didn't want to be buried was found in a chair in front of her television set 2 1/2 years after her death, authorities said. "

The story goes on the say that the elderly woman instructed her caregiver to allow her body to stay at home, and the caregiver was merely acquiescing to the request, so this isn't necessarily shades of the movie Psycho.

The tale does make you think about the plight of the homebound elderly, as this could easily have been a news item about neglect instead of adhering to a person's wishes (unusual though they may be).

Wednesday, December 28, 2005

Tis the Time For New Year's Resolutions

Category: Elder Law, Estate Planning, Business Law and Planning, Tax Law and Planning, Financial Planning

Ah, the presents have been opened, you have been eating cookies and leftovers for days, and the commute is remarkably smooth this week - it must be the week before New Years. With each New Year comes New Year's Resolutions - those things you are absolutely and positively going to do in 2006 (or meant to do in 2005 or 2004 - lets be honest). Some thoughts to consider for 2006's list:

  • Don't have a Will, Power of Attorney or Living Will? Get one. Search through prior posts here for some consequences of failing to plan. See the article Make a will: Your #1 family New Year's resolution for more reasons to plan.
  • Have a Will? Haven't looked at it in 5 years or more? Get it out, dust it off, and read it. Does it say what want? Do you understand it? If not, call an attorney and have it reviewed.
  • Own a business? Get a business succession plan in place. Without a business succession plan, your family is likely to receive pennies on the dollar for the value of your business at your death.
  • Got insurance? Review your insurance - health, disability, life, long-term care, property. Are you really covered for your needs? Do you understand your coverage? Have you had your insurance reviewed by a professional in the past 3 years or so? Insurance can be a large annual outlay - you should be sure you are getting the best return for your investment. Most professional insurance agents will give you a free review.
  • Planning to retire? How are you financing your plan? A meeting with a financial planner may give you ideas as to how good of a job you are doing getting to where you want to be. Again, the meeting is likely to be free.
  • Kids going to college? Do you have a plan beyond hoping that there will be enough equity in your house in interest rates stay low? Look into a 529 Plan (try savingforcollege.com for more information) . See what a financial planner has to say.
  • Have an accountant? Can him or her and make a meeting to discuss your tax profile and ideas to reduce taxes - note that dropping a bag off at the office on April 8 is not a meeting. Your accountant is an expert,particularly with income taxes, those most likely to effect you. Why not take the time to reduce the governments share of your earnings? Call TODAY for last minute year end planning items (see Happy new year! Now, call your accountant )
  • Don't have an accountant? Consider whether a tax professional could help you pay less. You still have time before December 31 to change your tax profile for 2005. (See 5 Year-End Tax Tips and Year-End Tax Tips from ABC News)
  • Have seniors in your family? Consider how they are doing and ways you can help. Would Medicare D save them any money? Go the AARP website for tools to find out the answers. Could they use help with driving, cooking, housekeeping? Consider a service (and speak to your accountant about the tax deductions). Are they safe and secure in their homes? If not, consider alternates within the family and in the community.

None of these thoughts are sexy or exciting, but they do fall under the heading of things a responsible adult should be doing, and items high on this years New Years Resolutions (otherwise known as The Great To Do List).

Wednesday, December 21, 2005

Senate passes Medicaid Spending Cuts

Category: Elder Law

Cheney Breaks Senate Tie on Spending Cuts - Yahoo! News: "The Republican-controlled Senate passed legislation to cut federal deficits by $39.7 billion on Wednesday by the narrowest of margins, 51-50, with Vice President Dick Cheney casting the deciding vote. "

This will make the Mediciad reductions detailed in this post law. The only question is timing of the enactment.

Monday, December 19, 2005

House Approves Compromise Budget Bill That Limits on Asset Transfers

Category: Elder Law,

From ElderLawAnswers.com:

House Approves Compromise Budget Bill That Retains Major New Limits on Asset Transfers

Last Updated: 12/19/2005
Topic: Medicaid

At the close of a rare overnight session, House of Representatives voted 212-206 early this morning to cut $39.7 billion from federal spending. The bill places major new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care. The bill, a compromise between House and Senate budget bills hammered out by Republican leaders, now must be approved by the Senate, an action that could come quickly as lawmakers rush to leave town for the holidays.

The bill retains changes in the transfer rules that were part of the earlier House bill. It would extend Medicaid's "lookback" period for all asset transfers from three to five years and change the start of the penalty period for transferred assets from the date of transfer to "the date on which the individual is eligible for medical assistance under the State plan and is receiving services . . . but for the application of the penalty period, whichever is later. . . ". The bill also would make any individual with home equity above $750,000 ineligible for Medicaid nursing home care.

The House bill would also:

  • Establish new rules for the treatment of annuities, including a requirement that the state be named as the remainder beneficiary.
  • Require Medicaid applicants to provide "full information . . . concerning any transaction involving the transfer or disposal of assets during the previous period of 60 months, if the transaction exceeded $100,000, without regard to whether the transfer or disposal was for fair market value."
  • Allow Continuing Care Retirement Communities (CCRCs) to require residents to spend down their declared resources before applying for medical assistance.
  • Set forth rules under which an individual's CCRC entrance fee is considered an available resource.
  • Extend long-term care partnership programs to any state.

Kirsten Sloan, chief health lobbyist for AARP, said, "AARP strongly opposes the current conference agreement. This is irresponsible policy and will harm millions of low-income Medicaid beneficiaries, millions of older persons who need long-term care and unfairly increases Part B premiums for all Medicare beneficiaries."

For the full text of the Deficit Reduction Act of 2005, click on: http://thomas.loc.gov/cgi-bin/query/z?c109:S.1932: Click on the third version of the bill listed, then scroll down to Title III, Chapter 2, for the asset transfer rule changes.

For a Reuters article on House passage of the budget bill, click here.

Monday, December 12, 2005

Crisis in elder care foreseen - USA Today

Category: Elder Law,

As 2006 marks the first baby boomers turning 60, a timely article from USA Today, Crisis in elder care foreseen : "As 1,200 national delegates, policymakers and advocates for the elderly converge on Washington D.C., this week for the fifth White House Conference on Aging, many come with mixed feelings of hope and frustration that, though they've been sounding the alarm for years about a looming crisis in caregiving resources, Washington still doesn't seem to be listening.

The list of concerns includes an increase in Alzheimer's disease, expected to strike up to 16 million Americans by 2025; major shortages of family and professional caregivers; lack of proper housing and transportation for seniors; and shortages of geriatric physicians. Add to that questions about how major entitlement programs such as Social Security and Medicare will be paid for."

Tuesday, December 06, 2005

GOP Senators Reportedly Ready to Hold Firm Against Medicaid Cuts

Category: Elder Law

From ElderLawAnswers.com, GOP Senators Reportedly Ready to Hold Firm Against Medicaid Cuts - Elder Law Answers Articles:

"Sen. Gordon Smith (R-Ore.) said in a news conference that he would vote against any budget bill that includes cuts to Medicaid and food stamps, and that he believes that six other Republican senators would join him. Whether the changes to the asset transfer rules passed by the House are among the Medicaid provisions the GOP senators would oppose at all costs remains unclear.

Smith, who was instrumental in drafting the Senate bill that makes only relatively mild cuts to Medicaid, was emphatic in his opposition to the Medicaid and food stamp provisions in the House bill. "

See the complete article for more details.

Wednesday, November 30, 2005

10 Guidelines for Selecting an Elder-Care Attorney

Category: Elder Law

Out of Montgomery, Alabama, but applicable anywhere - some sound advise and 10 guidelines for selecting an elder-care attorney.

"Establishing a relationship with an elder care attorney before you are forced to confront the health issues of aging is proactive and can help you identify a compassionate and experienced professional whom you can trust to guide you legally; this will help ensure that you are not taken advantage of in an effort to meet your needs."

Many times seeking out the right Elder Law attorney is a family affair - the attorney needs to be close to where seniors are, but also able to communicate with the children if their clients so desire. When seeking an Elder Law attorney, it is also important to bear in mind that most times the parents will be the attorney's client - not the children or the family overall. The attorney should be seeking to meet the parents or senior generations goals.

The steps for finding an Elder Law attorney summarized (see the article for more details):

1. Identify prospective attorneys
2. Schedule screening interviews
3. Determine if the attorney is qualified in elder-care issues
4. Understand the network of professionals.
5. Discuss elder-care attorney fees
6. Contact the references
7. Prepare for the second interview
8. Drill down on specifics
9. Select your elder-care attorney
10. Put it in writing

"None of us knows what our future holds, but we can be prepared. By working with an elder-care attorney, you are expanding the team of advisers you work with to help secure a lifestyle you desire when seeking to meet your future needs and protect your legacy."

Tuesday, November 15, 2005

Worksheet Helps Beneficiaries Compare Medicare Drug Plans - Elder Law Answers Articles

Category: Elder Law

To help consumers in the selection process, ElderLawAnswers has created a Drug Plan Comparison Worksheet that allows beneficiaries to note important information about each plan, compare the plans side by side, and identify the one that best meets their needs. The Worksheet is available by clicking here. Print it out, fill it in and see how the plans stack up.

Wednesday, November 02, 2005

Use and Abuse of Annuities for Elderly Clients

Category: Elder Law, Financial Planning

From msfinancialsavvy.com, a thoughtful article on possible abuses of the sale of annuities to uninformed elderly clients. While and annuity can be an excellent investment option, like all investment options, there are pros and cons to be considered. Some of the inherent limitations in liquidating an annuity make them a bad investment for seniors. Alternatively, these same limitations can make annuities a central part of Medicaid planning, as an annuity may under certain circumstances be deemed an "unavailable asset".

An excerpt:

"The advantages of an annuity are supposed to be that

1. You will get payments for life so you don't outlive your money,
2. Your beneficiaries will get at least the principle invested when you pass on,
3. That they are tax-deferred, meaning taxes are paid only on the money you withdraw.

The problem with annuities and selling them to elderly, are that they are a long-term
investments when it comes to profits, and the charges can be outrageous. If an elderly person decides he or she needs the money they invested in an annuity they can face many complicated charges. Those charges are calculated using different types of rules and include,

1. Surrender charges,
2. 10% federal tax penalty (if the person is not 59 1/2),
3. Underlying mutual fund expenses (of the funds in the annuity),
4. Mortality and expense risk charges, and
5. Fees and charges for other features."

Tuesday, November 01, 2005

House Panel Approves Changes to Medicaid Transfer Rules

Category: Elder Law

From ElderLawAnswers.com

House Panel Approves Changes to Medicaid Transfer Rules - Elder Law Answers Articles: "The House Energy and Commerce Committee approved a fiscal year 2006 budget reconciliation package that includes restrictions on asset transfer rules, setting up a fight with the Senate. The House panel voted along party lines on Thursday to approve a proposal that would cut Medicaid spending by $9.5 billion over five years.

The House bill proposes a severe tightening of penalties for the elderly who transfer assets and then apply for Medicaid coverage of nursing home care. It would extend the 'lookback' period for all transfers from three to five years and change the start of the penalty period for transferred assets from the date of transfer to the date of Medicaid application.

The transfer-of-asset proposals, which many elder law attorneys view as harmful to their clients, were among the recommendations of the Medicaid Commission, established to advise Congress on how to cut $10 billion from Medicaid, as called for in the 2006 budget reconciliation bill approved earlier this year.

Other changes in the House bill include making anyone with $500,000 worth of equity in a home ineligible for Medicaid and allowing states to raise Medicaid co-payments from $3 to $5 over three years.

The House bill differs significantly from a bill approved by the Senate Finance Committee earlier in the week. The Senate bill did not include changes to asset transfer rules or co-payments. The full House and Senate still need to vote on both bills.

For more on asset transfers, click here. "

Friday, October 21, 2005

Free Medicare Prescription Drug Coverage Booklet - From AARP

Category: Elder Law

The New Medicare Prescription Drug Coverage--What You Need to Know. AARP. 28 Pages.

This free booklet from the AARP provides a thorough overview of the new Medicare prescription drug benefit that will go into effect on January 1, 2006. The booklet explains, in simple language, how the benefit works, the cost, what types of drug plans will be available, how to choose a plan, how to join, and what extra help is available for low-income individuals. Helpful charts and tables illustrate how the benefit works. The booklet also provides examples to help you understand this new benefit and decide whether you should sign up for it at all.

Wednesday, October 05, 2005

Supreme Court to Revisit Assisted Suicide

Category: Elder Law

Supreme Court to Revisit Assisted Suicide - Yahoo! News: "The Supreme Court will revisit the emotionally charged issue of physician-assisted suicide in a test of the federal government's power to block doctors from helping terminally ill patients end their lives.

Oregon is the only state that lets dying patients obtain lethal doses of medication from their doctors, although other states may pass laws of their own if the high court rules against the federal government. Voters in Oregon have twice endorsed doctor-assisted suicide, but the Bush administration has aggressively challenged the state law."

Monday, October 03, 2005

Average Cost Nursing Home Room - $74,000 a Year!

Category: Elder Law

According to the 2005 MetLife Market Survey of Nursing Home and Home Care Costs the average daily cost of a private room in a nursing home in the United States is $74,095 a year, or $203 a day, and the the average cost of a semi-private room, is $64,240 a year, or $176 a day. This breaks down to $6,174 or $5,353 per month respectively - the State of New Jersey finds the average costs of a nursing home to be $6050.

The study also found that the cost of a home health care aide averaged $19 per hour nationally,and homemaker/companion care averaged $17 per hour.

Tuesday, September 13, 2005

Medicare - A Primer and Resource Guide

Category: Elder Law,

Medicare is the government's primary insurance program for people over age 65. Unfortunately, the benefits that Medicare provides, as opposed to other federal benefit programs, and the limits of those benefits are not well understood. Medicare is a health insurance program that Americans pay into by working during their lifetimes. Like all health insurance programs, it is not all-encompassing, and may be combined with other health insurance programs to provide optimal coverage. A key misunderstood point is that Medicare does not cover long-term care needs (ie: assisted living or nursing home). You will need private funds, long-term care insurance, or Medicaid to meet those needs.

From ElderLawAnswers.com is an excellent in-depth article on the breadth and limits of Medicare coverage, as well as Medigap insurance, appealing Medicare Decisions, and new Prescription Drug Coverage, located at Medicare - ElderLaw Articles.

If you have the background on Medicare and have specific questions, the single best resource for detailed information is www.medicare.gov "The Official U.S. Government Site for People with Medicare "

Friday, August 26, 2005

Savings Bonds (Part 1) - Learning More about those Bonds

Category: Elder Law, Estate Planning, Tax Law and Planning, Probate and Estate Administration, Financial Planning

Many people have invested in saving bonds at one time or another, or another has done so for them. For the most part, they sit in a safe deposit box until cash is needed (or you remember that you have them). However, there may be a need to find out more about the bonds or liquidate them as part of estate planning, estate administration, or elder law, or just sound financial planning for yourself.

Savings bonds are investment in the US government. There are various types of bonds, that earn interest in different fashions, and have unique tax consequences. Luckily, there are some wonderful resources on the web to cut through all of this information.

The US Government provides a very informative website at www.savingbonds.gov that goes through the purchase and redemption of various government investments (T-Bills, T-Notes, T-Bonds, I Bonds, EE Bonds, HH Bonds) and explains the differences between the various investments.

There is a very useful toolbox a the website for determining the current and future value of your investment:

Have Your Treasury Securities Stopped Earning Interest?

Savings Bond Wizard

Savings Bond Calculator

Growth Calculator

Savings Planner

Tax Advantages Calculator

Another excellent site is www.savingsbonds.com. This is a commercial site oriented to financial planning. It does have excellent step-by-step guides on bond redemption, including the practicalities of redemption and guidelines to the tax consequences.

Tuesday, August 23, 2005

The Value of an Inheritance? Preserve the Family History

Category: Elder Law, Estate Planning

This story from San Francisco reminds us that the memory of a loved one is not about the size of the bank account inherited, but the family history

HoustonChronicle.com - Baby boomers value family history over inheritance: "[B]aby boomers say their parents' personal keepsakes, family stories and final instructions are more important than the oft-publicized trillions of dollars they're expected to inherit."

Those memories, stories, values and wishes can be easily lost. Why not take some steps today to preserve them?

  • Get those old family stories on tape. When I was a child, I had to "interview" my grandmother for a class project. On those tapes is her history, from her memories of when Queen Victoria died (1901), how she came over to Ellis Island, being an immigrant in America, and traveling home to Ireland to see the changes of her home country over nearly a century. Maybe this could be a project for the kids during the next family gathering - put that digital camcorders to use.

  • Identify who is in old family pictures. You may have inherited the dusty box of family photos. Many times the older generation can identify who is in them - knowledge that can be later lost. You can even copy them all to the computer and upload them to a family website to get everyone's comments as to who is who, and allow others to download copies.

  • Have a frank conversation about burial options. In the event of an unexpected death, the last thing you want to be doing is find out what a person "would have wanted". Discuss burial, cremation and what to do with the ashes. What kind of remembrance would the person want? One client wanted everyone to wear purple to the funeral as it was her favorite color.

  • Create a list of who gets what personal property. Many times one to the most contentious issues in an estate administration is who gets the jewelry, artwork, etc., and what happens to any personal items nobody wants. You may decide to let your kids duke it out among themselves. Or, you may want to create a list identifying items of special significance to go to friends and family members.

  • Appreciate what is being given to you. Many times children don't have an expectation of inheritance and downplay it ("I don't need or want your money", they say to their parents, "I just want you.") However, I have found in my practice that the older generation, who survived depression and are proud to still be independent and debt free, are equally proud to have something to give. So be gracious in your acceptance of gifts, and remember how much harder it was for them to create what it is they have given you then for you to create it yourself.

Monday, August 22, 2005

Best Places to Die?

Category: Elder Law, Estate Planning

It is quite a tongue-in-cheek question, but is there a best place to die? Being that I practice in New Jersey and New York, which both have a state estate tax and state income tax, significant numbers of clients move to other jurisdictions (e.g. Florida) as they get older to avoid those taxes. However, I don't know of any that have really thought about quality of end-of-life issues as another point of consideration in where they settle down to spend their golden years.

Forbes.com has prepared a list of "Best Places to Die", looking at health care and long term care quality. Looked at by reverse rankings, it is also a list of "Worst Places to Die" list.

Of the "Best Places to Die", Utah ranks number 1. New Jersey ranks 46 (ouch!) and New York ranks 30. Note that Florida only ranks 21, scoring high marks for legal protections granted to the elderly, and low marks for quality of health care.

The States are further sub-ranked by Quality of Health Care (New Hampshire scores number 1 here, New Jersey 43 and New York 24); Legal Protection (Delaware tops the list, with New Jersey getting a grade of "B" and New York a grade of "B+"); and Most Likely to Die in a Nursing Home (here Rhode Island gets the dubious honor of top grade with 45% of its residents with cancer likely to die in an institutional setting. New Jersey and New York both come in at 20%)

The premise of Best Places To Die - Forbes.com is: "In America, the way we die is largely determined by where we live. Geography dictates what kind of care is provided to the dying and whether death following a long illness occurs at home, in a hospital or in a nursing home. But don't move just yet. Patients can gain control over how they die by talking about end-of-life care with their families and physicians. If patients speak up, sheer numbers will force the health care system to take better care of the dying. Over the next 30 years, the number of people older than 85 will more than double to 9 million."

Thursday, August 11, 2005

Need a Nursing Home? Where to Start your Search

Category: Elder Law

A common question when exploring whether or not a nursing home is necessary for a loved one is "Where do I begin?". One starting place in the Nursing Home Report Card produced by the New Jersey Department of Health and Senior Services.

From here you can search function to quickly find the performance report results for a particular facility. The performance report is compiled by the NJDHSS as a result of its full, on-site licensure and Medicare/Medicaid certification inspections. The search can be performed for a city or county, which then return comparable ratings of facilities. The top rating is 100, as you can quickly see which facilities are close to that top rating.

You will need to visit various facilities yourselves, preferably several times, to decide what is the best location for your family based on everyone's needs and means. This Report Card won't tell you what is the "best" nursing home for your loved one, but it will give you that elusive starting place.

Tuesday, August 09, 2005

Practical Thoughts for an Agent under a Power of Attorney

Category: Elder Law, Estate Planning

The simple General Durable Power of Attorney ("POA") is arguably the most important document in a person's estate plan. A properly drafted POA will let another person make financial decisions for you when you are not able - such as if you are incapacitated, or on even on an extended trip out of the country. As you age, a POA could also assist you in avoiding a costly and burdensome Guardianship provision - if you have not named someone to act on your behalf, the court will have to.

While many articles have described questions regarding the formation of a Power of Attorney (an excellent FAQ from the Office of New York State Attorney General Eliot Spitzer can be found here), one items that is discussed less often is what does it mean to be named an agent under a POA? If you are acting as agent to your spouse, or in a limited capacity (ie: a real estate closing) then the responsibilities of being an agent under a POA are not that burdensome. However, if being named agent under a POA involves suddenly managing another persons finances, with which you have no familiarity, the task can seem enormous.

Below are some practical tips that focus on what it means to act as a Power of Attorney, emphasizing the need to be organized and to understand your role as another person's agent. Note that the person executing the POA is the "principal" and the person empowered by and acting under the POA is the "agent":

  • An Attorney to Advise You: If you find yourself suddenly acting as an agent under a POA, one of the first things you should do is speak to an attorney to clarify your role and advise you of some do's and don'ts. Not all POA are drafted the same: some have broad sweeping powers, others very limited powers that only apply in a small set of circumstances; some allow gifting or modifying beneficiary designations, others do not; some give the agent total discretion, others give the agent limited direction. You cannot act as the agent unless empowered under (i) the Power of Attorney document itself, and (ii) state law. Sometime state law will fill in powers not stated in the POA itself; other times state law might limit or forbid an action stated in the POA.

  • Understand that you are a Fiduciary: When you are acting as an agent under a POA, you are acting in that person's best interest, not your own. Being named a fiduciary is being in a position of trust. This is manifest in clear concepts, like don't take another person's money for yourself (such as making accounts joint so they go to you on death, not through the Will). However, this tenent also colors all your actions as agent: how you invest, who you invest with, how you budget, who you pay and when, how you deal with third parties, how and if you take compensation. A general rule is that you owe the principal a higher duty of care then you would pay to yourself, as most people take shortcuts here and there that are not permissible for a fiduciary.

    Furthermore, as a Fiduciary, you are not only responsible to the principal, but to other interested parties that might question you on the principal's behalf, such as other family members, a third party who you are dealing with, or a court. If a court were to find that you did not act in a prudent manner as a Fiduciary, or that you are self-dealing (ie: taking advantage of being an agent to forward your own interests) then you can be found personally liable for any waste of the assets.

  • Get a good Accountant: If the principal had an accountant, a top item should be to set up a meeting with him or her. At the meeting, you can learn about a person's customary income and expenses, as well as find out all the account information by looking at copies of the 1099s and other supporting income tax documents in the accountants files. Armed with this information, you will be in a position to take two more important steps (i) consolidate and control assets, and (ii) budget for income and expenses.

  • Consolidate Assets and Income: When you are examining someone else assets, you will find it is amazing how many large and small accounts people can have (remember when you got a free toaster if you opened a new account?) When the multiple accounts are yours, they tend to be an annoyance, generally to be dealt with on another day. When the accounts are another persons, and you aren't familiar with them, nor the underlying investment, multiple accounts present a huge headache. First, you need to have all account statements directed to you. Next, as a Fiduciary you need to have a reasonable investment scheme. This is all much easier to accomplish with one or two accounts then ten. So, you may want to direct assets to be consolidated. Beware, however, of the tax consequences of large scale liquidation. You may want to speak to a financial planner with a tax background before you act.

    Also, you should try to get all income direct deposited to a single account from which you can write checks. This can be arranged with most employers, pension plans and investment houses.

  • Prepare a Budget: Once you know the assets, anticipated income stream and expenses, prepare a budget to forecast where you will be if things don't change in 6, 12, 18 months. Then factor in the cost of anticipated changes (ie: might a move from assisted living to a nursing home be required?). Do you have enough money? If not, what other sources of financing the costs of living are available (Medicaid, Long Term Care insurance, Reverse Mortgage, etc.) From the budget you will be able to work with the Financial Planner to prepare an investment scheme to meet the principal's needs.

  • Communication is Key: Do yourself a favor, tell your the principal's family what is going on. Get Quicken and email a report on a quarterly basis. Keeping everyone in the loop avoids problem, like your sister claiming she is going to sue you because you stole mom's money. The information in the report would be available if a claim were made anyway, so let everyone know what is going on so the family can deal with issues together.

  • You are not Alone: As a follow up to the point above, another benefit of communication is that other people can help you. Just because you are the named agent, you don't have to do everything. You can delegate tasks to other people. Not only are other family member's there to support you, but there are knowledgeable professionals you can rely on. The principal likely didn't name you as the agent for your financial expertise - the principal probably named you because he or she thought you would make the best decisions. To assist you in making those decisions, professional advisors such attorneys, accountants, financial planners and social workers can inform you of your options, and in some cases reduce your burden by carrying out your wishes.

  • You are not Personally Financially responsible: Unless you did something bad (or are married to the principal), when you are an agent, you are charged with spending the principal's assets on the principal's behalf. You are not obligated to use your own money, and there are laws in New Jersey and other states making it illegal to condition acceptance of a facially valid Power of Attorney on a personal guarantee of the agent named in the documents. Having said this, I have seen many examples of poor drafting in legal agreements, particularly with assisted living facilities and nursing homes, that appear to make the agent liable on the principal's behalf. This might manifest in language that the "agent guarantees the principal's obligations". While you can agree to use the principal's assets to meet his or her obligations, you cannot be forced to put your own assets at risk when the principals run out - you are the agent, not the bank. So rest assured that you can do a good thing for someone you care about without putting yourself at risk.