New Jersey Estate Planning & Elder Law Blog : New Jersey Estate Planning Lawyer & Attorney : Deirdre Wheatley-Liss : Fein Such Kahn & Shepard Law Firm : Elder Law, Tax Planning

The most important Elder Law decisions from around the country are summarized here.  Each case is relevant to New Jersey as elder law often involves Medicaid, which is subject to "supposedly uniform" federal regulation as jointly funded and administered by the federal and state governments. As a result, treatment of a question about Medicaid in one state may eventually become the law of the land in all states.  

Elderlawanswers.com has created this top 10 list from the popularity of the cases on its website - I have added topic heading and notes about what impact these cases might have in New Jersey.

 

1. Estate Recovery - State That Has Not Expanded Definition of Estate May Still Recover Non-Probate Asset

   A Missouri appeals court finds that the state may use an accounting statute to recover Medicaid benefits from a decedent's estate even though the only asset is a non-probate asset and Missouri has not expanded its definition of estate to include non-probate assets. In Re Estate of Jones (Mo. Ct. App., W.D., No. 69310, Jan. 13, 2009).  Note that NJ has an expanded estate recovery statute so that Medicaid can have a lien against assets passing by joint ownership or a beneficiary designation when a person dies.

2. Medicaid Annuity - Annuity Purchased to Benefit Community Spouse Is Available Resource

   A New Jersey appeals court holds that under the Deficit Reduction Act of 2005 (DRA) a state may consider the value of an annuity purchased for the sole benefit of the community spouse in determining whether the Medicaid applicant is eligible. N.M. v. Div. Medical Assistance and Health Servs. (N.J. Sup. Ct., App. Div., No. A-0828-07T1, Feb. 26, 2009). See prior posting for a full discussion of New Jersey treatment of Medicaid Annuities.

3. Promissory Note - Non-Saleable Promissory Note Is Improper Transfer

   The Ohio Court of Appeals finds that a non-saleable promissory note is a prohibited asset transfer for Medicaid eligibility purposes because the interest was deferred and it wasn't clear the note barred cancellation upon the loaner's death. Brown v. Ohio Dept. of Job & Family Servs. (Ohio Ct. App., 8th Dist., No. 92008, March 12, 2009). There is a current pending case on the question of the use of promissory notes in New Jersey.

4. Trusts as Countable Assets for Medicaid - Trust Is an Available Resource Despite Discretionary Language

   The Minnesota Court of Appeals finds that a trust's principal and income are both available resources for Medicaid purposes even though the trust's language requires only payments of income to the beneficiary and gives discretion to the trustee to distribute principal. In The Matter of the Stephanie L. Wilcox Trust (Minn. Ct. App., No. A08-1458, May 19, 2009).  The lesson here?  Trusts must clearly specify if the assets are not available to satisfy long term care needs.

5. Estate Recovery - Property Owned in Joint Tenancy Falls Under Estate Recovery Rules

   A Minnesota appeals court rules that the state may assert an estate recovery claim against property that was owned in joint tenancy at the time of a Medicaid recipient's death and that flowed into her surviving spouse's estate. In re the Estate of Grote (Minn. Ct. App., No. A08-1691, June 2, 2009).  Again, New Jersey has an expanded estate recovery statute, so Medicaid can recoup money it expended against joint assets when a person dies.

6. Trusts as Countable Assets for Medicaid - Irrevocable Trust Forbidding Distribution of Corpus Is Still Countable by Medicaid

   The Massachusetts appeals court finds that although an irrevocable, income-only trust expressly prohibits distributions of principal, other provisions in the trust could conceivably permit the trustees to invade trust assets, and thus the trust is countable for Medicaid purposes. Doherty v. Director of the Office of Medicaid (Mass. App. Ct., Essex, No. 08-P-939, June 18, 2009). Again - trusts must clearly specify if the assets are not available to satisfy long term care needs.

7. Trusts as Countable Assets for Medicaid - Property of Trust That Bars Distributions That Interfere With Medicaid Eligibility Is Available Asset

   An Illinois appeals court finds that a trust that prevented the trustee from making distributions if it would interfere with public assistance is an available asset for Medicaid eligibility purposes. Vincent v. Dept. of Human Services (Ill. Ct. App., 3rd Dist., No. 3-08-0096, June 18, 2009). Seeing a theme here? Trusts must clearly specify if the assets are not available to satisfy long term care needs.

8. Medicaid Annuity - Community Spouse's Post-DRA Annuity Purchase Is Not an Improper Transfer

   An Ohio appeals court holds that the purchase of a post-DRA annuity by a community spouse is not an improper transfer of assets. Vieth v. Ohio Dept. of Job & Family Services (Ohio Ct. App., 10th Dist., No. 08AP-635, July 30, 2009). I expanded on this case and how it might apply in New Jersey in a prior post.

9. Trusts as Countable Assets for Medicaid - 10th Circuit Reiterates: States Need Not Exempt (d)(4) Trusts From Asset Calculations

   Confirming an earlier decision, the 10th Circuit Court of Appeals rules that Congress left states free to count (d)(4)(A) and (d)(4)(C) trusts as available resources for Medicaid purposes. Hobbs v. Zenderman (10th Cir., No. 08-2099, Sept. 1, 2009). New Jersey considers so called (d)(4)(A) trust as non-countable assets so long as the State is the primary beneficiary upon death.

10. Medicaid Annuity - Annuity Purchase by Community Spouse Upheld in Federal Appeals Court Decision

    In a much-anticipated decision, the Third Circuit Court of Appeals affirms a U.S. district court ruling allowing a community spouse to purchase a DRA-compliant annuity to protect savings from the costs of her husband's nursing home care. Weatherbee v. Richman (3d Cir., No. 09-1399, Nov. 12, 2009). I blogged about this excited development in an earlier post as New Jersey is in the Third Circuit so this case applies to our clients.

      

Image: Salvatore Vuono / FreeDigitalPhotos.net

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I often have spouses or children expressing concern about a loved one driving.  This stems from a real fear that as a person gets older, suffers from dementia,  or is being treated for a medical condition, their reflexes and judgment may slow. While these conditions are difficult on their own, they can lead to tragedy if the person suffering from reduced abilities is behind the wheel of a car. They could damage property, or more importantly, injure or kill themselves or others.

What is a family to do?  In New Jersey a family member, physician, judge or police officer can request a Medical Review of the persons license and right to drive through the Medical Review Unit of the Motor Vehicle Commission (still the DMV in my mind).  

This is a serious step as it could lead to a person's loss of freedom of movement.  It cannot be done anonymously - the reported driver will be advised of who sent the letter.  However, it allows family members a means to partner with experts in determining if it is safe for a loved one to be driving.  

To request a Medical Review you must contact the Medical Review Unit in writing and provide them with the following information:

If you see these signs and want to request a medical review

• Write a letter to MVC (must come from a family member, physician, judge or police officer):
• Provide as much of the driver's information as possible: name, date of birth, address, driver license number and medical condition(s)
• Include your relationship to the driver
• Report the signs of impairment and safety concerns you have observed (see chart above)
• Anonymous reports cannot be considered. Upon request, drivers will be told who reported them
• If MVC's Medical Review Unit determines that a suspension or restriction is necessary, they will contact the driver by mail

 

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In a companion piece to "How to Talk Money with Mom and Dad" ,  in Money Magazine this month, the New York Times has an article "Taking Care of Parents Also Means Taking Care of Finances".

The article illustrates that "care" goes beyond health and safety - caregivers also have to look to where the money is coming from and how they, as caregivers, can have access to it.  I appreciate the article emphasizing caregivers to READ and UNDERSTAND their parents General Durable Power of Attorney.

As an Elder Law Attorney, I believe that a General Durable Power of Attorney is the single most important document for seniors to have and to update.  A General Durable Power of Attorney allows you to name an person to make financial decisions for you if you cannot.  

• Without any General Durable Power of Attorney should you become incapacitated, a court supervised Guardianship proceeding must take place (trust me, a circumstance to be avoided at all costs).  
• Without a complete and current General Durable Power of Attorney, a Guardianship may still be necessary because your attorney-in-fact is not clearly authorized to take some action (making gifts is a big one here in NJ).
• Without looking at State law, a General Durable Power of Attorney may be new and done, but not address all the issues of agency law in that state.  New York just substantially changed its General Durable Power of Attorney laws this month, and out of state forms (or Internet generated forms) may not be effective.

The article ends with great advice - search the National Association of Elder Law Attorneys Website for a attorney who can advise you if your General Durable Power of Attorney is working for or against you.

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Money is always a touchy subject - particularly when you are an adult child trying to see if your adult parents need help.  I was featured in an article in Money Magazine this month about this very subject: "How to Talk Money with Mom and Dad".  

The market plunge has not just effected you, but everyone around you.  For elderly parents, they likely won't make up 20% to 40% losses in their lifetimes. Their financial pie is smaller, but their potential long terms needs are only growing in cost.  Couple this with the fact that social security payments are not increasing this year, and likely not next , and mom and dad might be facing a financial bind.

One key to remember is that while your parents may be elderly, unless incompetent, they are still entitled to make their own decisions - even if that means they are making bad ones in your opinion (I suggest to adult children that  they think back to their teenage years when their parents supported their decisions - misguided or not).  Your role may be to educate your parents about risks they  may not be aware of (stairs in the house, need for a caregiver, risky investments, etc.) and suggest solutions to those risks.  To do that, you may need to educate yourself as to what are true costs of aging, and what might be hype (ie: if dad goes into a nursing home, mom will definitely lose the house).  At our office we facilitate these conversations by putting recommendations in writing to be circulated to all family members, and  having the parents and children attend at least one meeting (in person or on a conference call) to get everyone on the same page in terms of asset protection planning.

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In response to my post NJ Medicaid Key Figures - Starting July 2009 I received 2 questions if it was "better" to move to Florida for Medicaid purposes.  Not being a Florida practitioner, I cannot really compare Medicaid rules in the two states.  Note the Medicaid is federal law - so while it is implemented on a State by State level, the overarching rules are the same for everybody.  What I can do is give you the Florida Key Medicaid figures, courtesy of The Law Offices of Sean W. Scott, Esq.

 2009 Florida Medicaid Asset/Income Numbers.  

• Gross income for the applicant - Less than $2,022* per month
• Gross income for the spouse - Unlimited 

• Spousal income diversion - min. $1,750 max. $2,739
• Spousal excess shelter standard - $525 

• Assets** allowed for the applicant - $2,000
• Assets** allowed for a low income (less than $808 per mo.) $5,000
• Assets allowed for the well spouse - $109,560
• Transfer penalty divisor - 5,000

*If income is higher an income trust will be required.

**Assets must below the limit at least one day during each month the application is pending for approval.

If you need Florida specific legal counsel, search for Florida Elder Law attorneys through the Attorney Locator of the National Academy of Elder Law Attorneys.

 

 

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Did you know that as a veteran you may be eligible for additional benefits if you need a caregiver at home and you have financial need?  The Veterans Administration Aid and Attendance program provides an additional monthly benefit to Veterans and surviving spouse who need a caregiver to help them with things such as eating, bathing, dressing.  This care can take place at home or in a nursing home or assisted living facility. Per the Veteransaid.org "The A&A Pension can provide up to $1,632 per month to a veteran, $1,055 per month to a surviving spouse, or $1,949 per month to a couple."

The question of course is "How do I qualify for these benefits?".  My colleague Don Vanarelli this week posts on his blog "What Is The Resource Limit For Applicants Seeking VA Aid and Attendance Pension Benefits?"  In it, he notes that the VA Aid and Attendance Pension is a needs based benefit.  However, there is no clear formula to determine needs:

The VA considers an applicant’s income and resources (called the allowable “net worth” of the applicant), among other factors. However, there is no formula published by the VA used to determine the applicant’s allowable net worth. The factors considered in any net worth analysis include the total household assets, total household gross income, total household unreimbursed medical expenses, and the life expectancy of the applicant. Simply stated, this means that the older the applicant, the fewer total resources he or she can own.

Don points us to the The VA Claims Adjudication Manual M21-1MR for more information on evaluating net worth, with particular reference to M21-1MR, Part V, Subpart iii, chapter 1, section J.

 

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A new ruling out of New York raises questions about the efficacy of a Family Care Contract where a lump sum payment is made in return for promising a lifetime a care services.  Medicaid may find the Care Contract to really be a disguised gift and apply a penalty period.  

A Family Care Contract is an agreement whereby a parent might pay a child or other relative to provide care in lieu of hiring an outside third party to provide that same care.  While it is reasonable on its face that a daughter-in-law should be entitled to the same compensation dad would pay a caregiver (after all, you shouldn't be financially punished for being related), it is easy to see that these types of agreements could be abused. In making a Medicaid application, Medicaid will closely review these contracts to see if services were actually provided and a fair market rate was paid.  The concern is that a Family Care Contract could not be "real" and instead just a shield for gifts or transfers, which should generate a transfer penalty period.   To see what a Family Care Contract Should have, look to my prior post Caregiving Contracts Valuable Tool Between Family Members.

Some attorneys have taken the position of transferring a large sum to the caregiver child as an "advance payment" for future services.  New York in Matter of Barbato v. New York State  has recently looked at several cases where a large sum was given to a child to prepay for a lifetime of services under a Family Care Contract.  In those cases, the appeals court found that there was a transfer or gift from the parent to the child, and not a payment for services. This is a huge distinction.  A "transfer" causes a penalty period, where a person who otherwise is qualified for Medicaid cannot receive it (i.e.: in a nursing home and has no assets left).  A payment for services does not create such a penalty.

The New York court's approach is well reasoned - if the agreement does not set objective standards, it can be a windfall to the caregiver if either (1) less services needs to be provided, or (2) the person dies in a short timeframe.  And a windfall seems like a gift.  Anyone 

In the 5 Care Contracts at issue, all provided a large lump sum payment in return for a lifetime of care.  One said "15 hours a week of care" and others care "as needed".

The court found that the agreements didn't have standards to show that the "services" provided were at fair market value. Also, there was no refund provision if the person died before the dollars were reasonably spent.

For more detail, look to ElderLawAnswers.com.

 

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In an odd bit of news re elder care, a cat that offers comfort to nursing home patients in their final hours. While it is a touching story, it highlights for me how many seniors die alone, and how many have pets that are their constant companions in later life that will need continuing care and provisions when their owner passes away.

Cat plays furry grim reaper at nursing home: "PROVIDENCE, R.I. - Oscar the cat seems to have an uncanny knack for predicting when nursing home patients are going to die, by curling up next to them during their final hours." Click here for full article.

Many seniors are truly worried about what will happen to their feline and canine and other companions if they are no longer able to take care of them. A client may have adult children, grandchildren and even great-grandchildren who are settled and secure, but when they come to see me, they have stress about providing for the loved one in their life who can't provide for themselves. A couple of thoughts:

Put practicality first. Make sure people know you have a pet, and arrange for a family member or friend to agree to be responsible for "emergency care" if you fall ill. This person needs to be able to get to the pet (has keys to the house) and be aware of the pets needs.

Arrange for long term care for your pet in your Will. This can take a variety of forms, such as a direction as to who gets the pets, matched with a monetary bequest or not, or a pet trust, or making arrangements with a company that provides care for pets for the balanace of their lives when their owners have died.

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Category: Elder Law, Financial Planning

The appeal of a hybrid car is more than greater bang for your buck - it is about making an investment you feel good about. When it comes to Long Term Care insurance, the only people who seem to feel good about the investment are those who have been caregivers, and have seen the devastating costs of spending every single penny of a person's savings (or at least down to the few last pennies) and it still not being enough to cover the costs of care. However, with the US's aging population, many more families are going to find themselves in the position of caring for loved ones, and asking the question of: Where does the money come from?

Long Term Care Insurance may be a solution, but in many ways it has a bad reputation. The premiums seem very expensive, especially as the people looking at it tend to have just retired and are on a fixed income. Unscrupulous people have taken advantage of seniors with the product, tarring all long term care insurance professionals with the same suspicious brush. Another common thought is that if you never get sick, you just threw a lot of money down the drain.

A possible solution I was recently introduced to? Hybrid Long Term Care Insurance. The basic idea is that you take a lump sum of dollars and purchase Long Term Care Insurance. The dollars buy several things:

1. A total pot of greater dollars available to pay for long term care (a $100k investment might buy you $250k of long term care, depending on your age)
2. A death benefit greater then what you paid in that is "returned" to you heirs if you die and don't use the policy (A $100k investment might buy $200k in death benefity, depending on your age)
3. The ability to withdraw the lump sum you paid in at some point in the future if you need it (you get your $100k back)
4. A lump sum payment is a fixed investment - no need to pay ongoing premiums from your fixed income (you pay and "forget" it)

The cost? The loss of use of the lump sum and the growth on the lump sum unless you use the long term care benefits or the life insurance benefits.

The Street.com examined these hybrid polices in Hybrid Long-Term Care Might Be Right for You and highlighted some points to consider:

• You have significant liquid assets available. With a single premium payment ranging from $50,000 to $100,000, a hybrid policy is only for those with significant cash available that can be reallocated.
• You understand the risk to your portfolio. Once you have accepted that you may need care someday and that this care may be very expensive, the next step is to take a good look at what that will mean to your retirement portfolio.
• A stand-alone, long-term care policy is not an option. If you are not interested in paying premiums indefinitely on a policy you may never use, then the hybrid product -- with a death benefit built in -- may be an option.
• You have been planning to self-insure. If you haven't already recognized the financial risk of the cost of long-term care, you are not ready for this product.
• The ability to get something back for your premiums and retaining control of your money is important to you. You will, at minimum, get the use of your full premium either through long-term care benefits, a death benefit or by requesting a return of premium.
• Simplicity is important. While the long-term care portion of the policy contains the same framework of coverage as a stand-alone policy, there are fewer bells and whistles to add -- or to complicate the deal.

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Category: Elder Law

One of the biggest issues an Elder Law attorney faces is not how to plan for their elderly clients to reach their goals, but how to implement the plan with the dynamics of the family. Gender equalization not-withstanding, daughters (and daughters-in-law) bear most of the brunt of caregiving. Often times there are large financial differences between children, and accompanying differences in financial outlook and responsibility. And all of this occurs in the context of families - where resentments from years past have lingered or even festered.

What's an Elder Law attorney to do? Many times asset protection planning for seniors involves a transfer of assets. How can assets be transferred if children, or their spouses, do not appear trustworthy to the other siblings involved? Or, if one child feels he or she "deserves" more?

One solution that I commonly employ is for a transfer to be made to a trust, not to any one or more children outright. A group of the children, or a third party, can then act as a Trustee to safeguard the assets from waste, greed, etc. during the seniors lifetime, and then distribute them evenly at death.

Another creative solution I have been reading about is a "Sibling Contract". This came to my attention through the Louisiana Estate Planning and Elder Law Blog. In her post she cites a well done article "Caring for Pops: Put it in writing - Lawyer suggests sibling contract to avoid court case over aging parents" out of the Dallas Morning News, where Dallas lawyer Walter Hofheinz discusses how Sibling Contracts have evolved in his practice to avoid costly guardianship and probate disputes.

First came divorce agreements. Then there were prenuptial agreements. Now get ready for sibling agreements.

Dallas lawyer Walter Hofheinz knows from specializing in estate planning and probate law for 23 years that conflicts can erupt in even the most loving families when it's time to figure out how to care for an aging parent. Issues that should have been decided around the kitchen table escalate into disputes fought out in lawyers' offices and court. To manage that familial strife, Mr. Hofheinz has come up with what he calls a "memorandum of understanding" between siblings. The contract spells out each adult child's responsibilities and holds that person accountable for them.

"Ideally, an older person tells his children how he wants to be cared for, but that rarely happens," he said. Instead, the topic never gets discussed, and often something bad happens - the parent has a stroke, or his mind starts to fail. Suddenly, brothers and sisters argue over where Dad will live, how his savings will be spent and even how he will die.

"A little planning can avoid a lot of animosity and a lot of money in attorney fees on the back end," Mr. Hofheinz said.

Elder-law experts say the time is ripe for ideas like the Dallas lawyer's, because they're seeing more sibling disagreements grow into bitterly fought guardianship battles that land in probate courts and decimate families.

Read Entire Article Here

A Sibling Contract looks to be a necessary tool to get all the parties on the same page and focused on the real issue - how to best help the people who brought them into this world and raised them, instead of how to better themselves or get even for the slight that occurred 30 years ago. (guilt intended)

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A good and reasonable new law to help families of those suffering from dementia and other diseases is making its way through Trenton.

Baroni Silver Alert Legislation Approved by Committee New Jersey Senator Bill Baroni NJ District 14:

"The Senate Law and Public Safety Committee approved bill S1551/S1844, establishing a "Silver Alert System" for missing people who are believed to be suffering from dementia or other cognitive impairments."

"This emergency alert plan is based on the "Amber Alert" used by State Police to locate missing children. The alerts will include a description of the missing person and other information deemed appropriate by the State and local law enforcement agencies."

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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.

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I can't seem to stop reading about this "bailout" or No Banker Left Behind Act. It is like watching a car wreck in slow motion - you would do something if you could, but you don't have the power to stop it.

Then, I came across the below that I think offers a better way to look at a bailout. Apparently, Sweden found itself in a strikingly similar bank credit crisis back in 1992:

The country was so far in the hole in 1992 -- after years of imprudent regulation, short-sighted economic policy and the end of its property boom -- that its banking system was, for all practical purposes, insolvent.

Sound familiar?

From the NY Times' How Sweden Solved Its Bank Crisis:

But Sweden took a different course than the one now being proposed by the United States Treasury. And Swedish officials say there are lessons from their own nightmare that Washington may be missing.

Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government.

The article goes on to say that Sweden spent about the same percent of its GDP (4-5%) on is 1996 bailout of the banks, but took equity back so the out of pocket to the government (ie the taxpayers) was really only 2%.

I am thinking I am liking the Swedish plan much better than take all my money, do what you like, have no oversight, and no real change plan I see now - oh, and I really love that we have to do it NOW or life as we know it will end, when as we know it is already long past.

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Category: Elder Law, Tax Law and Planning

As many of us who work with seniors blogged about when the tax stimulus package came to pass , while great in theory, the need to file a tax return to get the stimulus payment had a big hole from an action plan standpoint. Many seniors don't need to file tax returns, and haven't done so in years. This small fact is easy to forget about because for working folks the tax stimulus payment came as a matter of course from filing the return.

The result? PressofAtlanticCity.com reports that: "About 156,800 New Jersey retirees and disabled veterans, including about 1,300 in Atlantic City alone, have not yet submitted paperwork to claim their stimulus payments, according to the IRS. The IRS is asking the public for help in reaching this population with information on how to file. While 74 percent of eligible members of the group have filed, a substantial minority have yet to be contacted. The IRS this week announced a new summer campaign to reach them."

So, for those who have seniors as neighbors, clients, congregation members, or otherwise, see if they got their tax stimulus payment. It is up t0 $600 for singles and $1200 for couples. For details see prior posting: Economic Stimulus Package Now Law.

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Category: Elder Law,

From NJ Biz.com, a report that the New Jersey Public Advocate has filed papers against Assisted Living Concepts Inc., operating eight assisted-living facilities in southern New Jersey, for "allegedly forcing out elderly residents once they have run out of savings and qualify for Medicaid."

In the Article Assisted-Living Co. Charged with Forcing Out Residents, Scott Goldstein reports that "The Public Advocate is investigating allegations that ALC is involuntarily discharging elderly residents, or threatening to discharge them once they have exhausted all of their own funds, or "spent down" their life savings, and therefore qualifies for Medicaid payments to cover the cost of their assisted-living apartment. "

The company under investigation "owns and operates eight assisted living facilities in New Jersey: Baker House in Vineland, Goldfinch House in Bridgeton and Maurice House in Millville, all in Cumberland County; Lindsay House in Pennsville, Salem County; Mey House in Egg Harbor Township, Atlantic County; Chapin House in Rio Grande, Cape May County; Granville House in Burlington, Burlington County; and Post House in Glassboro, Gloucester County."

Many nursing homes and assisted living facilities have a "key-money" requirement that essentially says that a person must spend $X of their own money before the facility will accept Medicaid for the costs of their care. So if a facility has a 12 month "key-money" requirement, and costs $5000 a month, then they will only accept a person who has at least $60,000 to pay for their care. After it is spent, if the person then qualifies for Medicaid, New Jersey will pay the cost of care, usually at a rate below the private pay rate. Here, the New Jersey Public Advocate appears to be alleging that ALC took the "key-money" and then maneuvered to have residents discharged when Medicaid took over payments.

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Category:Estate Planning

Joshua C. Tate, Esq., a professor at Southern Methodist University - Dedman School of Law; University of Pennsylvania Law School, writes a compelling new article about the need for revised thinking is testamentary planning to incorporate unequal distributions to reflect the contributions of a caregiver child.

Abstract: Almost all U.S. states allow individuals to disinherit their descendants for any reason or no reason, but most of the world's legal systems currently do not. This Article contends that broad freedom of testation is defensible because it allows elderly people to reward family members who are caregivers. The Article explores the common-law origins of freedom of testation, which developed in the shadow of the medieval rule of primogeniture, a doctrine of no contemporary relevance. The growing problem of eldercare, however, offers a justification for the twenty-first century. Increases in life expectancy have led to a sharp rise in the number of older individuals who require long-term care, and some children and grandchildren are bearing more of the caregiving burden than others. Recent econometric studies, not yet taken into account in legal scholarship, suggest a tendency among the American elderly to bequeath more property to caregiving children. A competent testator, rather than a court or legislature, is in the best position to decide how much care each person has provided and to reward caregivers accordingly. Law reform, therefore, should focus on strengthening testamentary freedom while ensuring that caregivers are adequately compensated in cases of intestacy.

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Category: Elder Law

A recent New York Times article "For the Elderly, Being Heard About Life's End" describes the benefits of of ""slow medicine," an approach that encourages less aggressive -- and less costly -- care at the end of life."

There is an institutionalized bias to give any and all medical care. However, when a person is in their late 80's or 90's this aggressive care may hinder their quality of life and control over the quality of that life.

Aggressive medical care is sometime an exercise is substituted decision making - I can, so therefore I will. What "slow medicine" seems to promote is the question of - you can, but should you?

The article advised that "slow medicine" is "Grounded in research at the Dartmouth Medical School, slow medicine encourages physicians to put on the brakes when considering care that may have high risks and limited rewards for the elderly, and it educates patients and families how to push back against emergency room trips and hospitalizations designed for those with treatable illnesses, not the inevitable erosion of advanced age."

And the irony to this. As a class of population, the treatments are the most expensive, although the results may be limited. "The costliest patients -- the elderly with chronic illnesses -- are the only group with universal health coverage under Medicare, leading to huge federal expenditures that experts agree are unsustainable as boomers age. "

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Category: Elder Law

Elder law is pressing for seniors and their families. The biggest barrier to planning is lack of information. I was happy to do my part this past Sunday in the Daily Record article "Parsippany lawyer's practice a senior matter".


Parsippany lawyer's practice a senior matter
She's one of 39 N.J. attorneys who specializes in elder law
By MARK KITCHIN • Daily Record • April 27, 2008

Deirdre Wheatley-Liss gets the same type of phone call several times a week. It's usually from a man, often a war veteran in his 60s. The house he bought 40 years ago for $4,000 is worth $400,000 now. He and his wife have spent their life raising their children and putting a little bit of money away for their retirement.

Now, one of them is sick and perhaps in need of long-term care and they are wondering, because of the skyrocketing costs of health care, if they will be able to keep their house.
"People call up thinking that their problems are so much different than everybody else," Wheatley-Liss said. "In reality, a lot of them are looking at the same problems."
And those problems are getting larger and more numerous.

Click here for the entire article.

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Category: Elder Law,

As I have blogged before in Nursing Home Admission Contracts, Be Aware, Be Very Aware, a careful review of these contracts is a must. A growing concern is that they are drafted to take advantage of a family in the direst of circumstances by using the terms of the the contract to limit their own liability. This can leave a family with no contractual recourse when their loved one does not receive the care they deserve. One example of this is a damages limitation clause to $10,000 - this is obviously inadequate to address damages from a sub-standard level of care. Another favorite is the mandatory arbitration provisions - which eliminates the family's right to go to court. Instead, any disputes are decided by a panel of industry experts. As J. Michael Young, Esq. points out in his posting Mandatory Arbitration, in his new blog Texas Probate Litigation not only can arbitration be much more expensive than litigation (you are paying the arbitrators as well as your attorney):

Apart from the cost issue, Defendants often prefer mandatory arbitration because the arbitrators are drawn from the industry and perceived to be more conservative than a jury in awarding damages. For that reason, mandatory arbitration clauses are often attacked as unfair, particularly when the parties are in positions of unequal bargaining.

These clauses are becoming increasingly favored by nursing homes trying to limit liability for substandard care. However,nothing would seem more unequal than an elderly patient "negotiating" with the management of a nursing home. The reason people are admitted to nursing homes is because of failing physical and/or mental
health. Not an ideal circumstance for well informed, arms-length negotiating.

As this article details, Congress has become concerned and a bipartisan bill in the US Senate would curtail the use of such clauses, particularly as a pre-requisite for care.
I imagine this bill has a decent chance of passage, but would likely face a veto from President Bush.

A senisble bill coming out of Congress - who would have thunk it? But note the veto forecast.

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Category: Elder Law, Miscellaneous Musings

We all complain about other drivers, particularly here in New Jersey where we probably have the most awful traffic, road conditions and convoluted traffic patterns (we can't just turn left - we have a lovely invention called jug-handles instead) in the country.

Elderly drivers tend to get much of the ire - for right or for wrong. In Japan, they are trying to entice "elderly" drivers to turn in their licences ("elderly" is in quotes as they define it as 65 - odd for the country with the one of the longest life expectancies). Yahoo News reports:

Tokyo businesses are to start offering benefits to elderly people who give up their drivers' licences, backing a police effort to cut back on the ballooning number of traffic accidents caused by drivers over 65.

Among more than 30 special offers, one small bank will give higher interest rates, while Mitsukoshi department store chain plans to provide free delivery from its Tokyo stores and a hotel will offer a 10 percent discount on meals in a program starting next month, Tokyo police said on their Web site.

"Have the courage to give up your licence," the police say on the site. "If you have lost confidence in your driving ... if your family says they are worried about you driving ... please think about handing in your licence."

What about some sort of accelerated re-licensing system instead after a certain age? And where does 65 come from (John McCain is 72 after all, and he claims to be spry enough).

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Category: Elder Law



In starting 2008, some key Medicaid figures for New Jersey:




Minimum Community Spouse Resource Allowance - $20,880.00

Maximum Community Spouse Resource Allowance - $104,400.00

Resource Allowance for an Individual - $2,000.00

Resource Allowance for a Couple (both husband and wife in a nursing home) - $3,000.00

Minimum Monthly Maintenance Needs Allowance - $1,711.25

Maximum Monthly Maintenance Needs Allowance - $$2,610.00

Monthly Personal Needs Allowance - $35.00

Shelter Standard - $514.00

Standard Utility Allowance -

$344.00 - heating
$210.00 - non-heating
$29.00 - telephone

Divestment Penalty Divisor - $6,655.00

Income Cap Amount - $1,869.00

Home Equity Limit - $750,000.00

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Category: Elder Law, Financial Planning

Just like in the mortgage market where making mortgages too cheap in years past is making them more expensive today, the Long Term Care insurance market is in the midst of an upward adjustment. While many people may think that Long Term Care insurance is expensive, having to pay out of pocket for long term care is much more so ($100k - $120k a year is not unusual in northern NJ). When insurance companies began underwriting Long Term Care Insurance policies 10-15 years ago, they didn't have a great pool of actuarial data to set the premiums. And unlike life insurance, where there is a fixed cost to the insurance company (the set death benefit), there is no known fixed cost to Long Term Care. Add to that the fact that insurance companies are in business to make money for their shareholders, it should come as no surprise that Long Term Care insurance premiums are on the rise.

What has come as a surprise to some people, however, is that even "guaranteed fixed premiums" are subject to change if the insurance company goes back to the banking and insurance commission of the state to show that all their underwriting assumptions were wrong. This can lead to either an unanticipated increase in premiums (hard to swallow on a fixed income), or a reduction in scheduled benefits.

What should you do? If you have Long Term Care insurance, call your insurance company and ask for a current benefits statement. Check that against your original policy so you can speak to the issuing agent about any discrepancies. If you don't yet have Long Term Care insurance, the price is only going to go up as you get older and the insurance companies readjust their prices.

For more, see Long-Term Care Insurance Giant Raises Premiums on Existing Customers for First Time at elderlawanswers.com.

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Category: Elder Law

Aging in place. It is no secret that most seniors want to stay in their homes. It is also no secret that long term care today has a bias towards institutional care, and not towards allowing a person the resources need to stay at home. From the New York Times is an uplifting report about communities of seniors banding together to buck the system and enjoy their golden years at home.

A Grass-Roots Effort to Grow Old at Home

On a bluff overlooking the Potomac River, George and Anne Allen, both 82, struggle to remain in their beloved three-story house and neighborhood, despite the frailty, danger and isolation of old age.

George and Anne Allen hope to continue living at their Washington home with help from a community group under development. Mr. Allen has been hobbled since he fractured his spine in a fall down the stairs, and he expects to lose his driver's license when it comes up for renewal. Mrs. Allen recently broke four ribs getting out of bed. Neither can climb a ladder to change a light bulb or crouch under the kitchen sink to fix a leak. Stores and public transportation are an uncomfortable hike.

So the Allens have banded together with their neighbors, who are equally determined to avoid being forced from their homes by dependence. Along with more than 100 communities nationwide -- a dozen of them planned here in Washington and its suburbs -- their group is part of a movement to make neighborhoods comfortable places to grow old, both for elderly men and women in need of help and for baby boomers anticipating the future.

click here for full story

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Category: Elder Law,

Admitting a loved one to a nursing home can be very stressful. In addition to dealing with a sick family member and managing all the details involved with the move, you must decide whether to sign all the papers the nursing home is giving you. Nursing home admission agreements can be complicated and confusing, so what do you do?

It is important not to rush, but rather to read. Read the agreement carefully because it could contain illegal or misleading provisions. If possible, try not to sign the agreement until after the resident has moved into the facility. Once a resident has moved in, you will have much more leverage. But even if you have to sign the agreement before the resident moves in, you should still request that the nursing home delete any illegal or unfair terms.

Two items commonly found in these agreements that you need to pay close attention to are a requirement that you be liable for the resident's expenses and a binding arbitration agreement.

Responsible party
A nursing home may try to get you to sign the agreement as the "responsible party." It is very important that you do not agree to this. Nursing homes are prohibited from requiring third parties to guarantee payment of nursing home bills, but many try to get family members to voluntarily agree to pay the bills.

If possible, the resident should sign the agreement him- or herself. If the resident is incapacitated, you may sign the agreement, but be clear you are signing as the resident's agent. Signing the agreement as a responsible party may obligate you to pay the nursing home if the nursing resident is unable to. Look over the agreement for the term "responsible party," "guarantor," "financial agent," or anything similar. Before signing, cross out any terms that indicate you will be responsible for payment and clearly indicate that you are only agreeing to use the resident's income and resources to pay.

Arbitration provision
Many nursing home admission agreements contain a provision stating that all disputes regarding the resident's care will be decided through arbitration. An arbitration provision is not illegal, but by signing it, you are giving up your right to go to court to resolve a dispute with the facility. The nursing home cannot require you to sign an arbitration provision, and you should cross out the arbitration language before signing.

Other provisions
The following are some other provisions to look out for in a nursing home admission agreement.
* Private pay requirement. It is illegal for the nursing home to require a Medicare or Medicaid recipient to pay the private rate for a period of time. The nursing home also cannot require a resident to affirm that he or she is not eligible for Medicare or Medicaid.
* Eviction procedures. It is illegal for the nursing home to authorize eviction for any reason other than the following: the nursing home cannot meet the resident's needs, the resident's heath has improved, the resident's presence is endangering other residents, the resident has not paid, or the nursing home is ceasing operations.
* Waiver of rights. Any provision that waives the nursing home's liability for lost or stolen personal items is illegal. It is also illegal for the nursing home to waive liability for the resident's health.

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Category: Elder Law, Estate Planning, Estate and Inheritance Tax, Business Law and Planning, Tax Law and Planning, Probate and Estate Administration, Financial Planning, Miscellaneous Musings

I am excited to be speaking at the Garden State Women Magazine 6th Annual Financial Conference & Networking Event on May 12 at the Park Avenue Club in Florham Park. This is an exciting day where New Jersey's top insurance, real estate, legal and financial professionals will provide women with the information and guidance needed to take charge of their financial future. Click here for more details.

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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

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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.

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