Elder Law

Wednesday, July 31, 2019

Medicaid Asset Protection

Medicaid is a healthcare program jointly operated by the individual states and the federal government. Medicaid is designed to help individuals with limited income and resources pay for healthcare costs including nursing home care, assisted living, or in-home care. However, qualifying for Medicaid can be difficult. While eligibility is state-dependent, there are generally four key requirements: (1) you must be 65 years of age or older, permanently disabled, or otherwise qualify depending on your specific state’s class requirements, (2) you must be a resident of the state in which you are applying, and either a U.S. citizen, permanent resident, or legal alien, (3) your income must be within your state’s income limitations, and (4) your assets must be within your state’s asset limitations.

To help individuals qualify for much-needed Medicaid coverage, multiple strategies exist to reduce one’s income and assets to the state threshold without adversely affecting the individual’s life. These include gifting assets to family and friends, transferring assets to a spouse, and investing in exempt assets (exempt assets are assets that do not count as “assets” for Medicaid purposes – most states allow certain home values to be exempt).

To avoid individuals taking advantage of these strategies at the last minute to qualify, however, the federal government implemented a “lookback period.” This is a period of time for which financial transactions involving the applicant will be reviewed. The purpose of the lookback period is to identify assets, such as money or cars, that may have been gifted or sold below market value in an effort to reduce the applicant’s assets to within the state’s Medicaid asset limitation.

For all states except California, the lookback period is 60 months (5 years). For California, the lookback period is 30 months (2.5 years). The lookback period begins on the day that the individual applies for Medicaid. Thus, when an application is filed, the government will review all financial transactions to look for transactions that violate Medicaid eligibility provisions, such as certain gifts and transfers.

If the reviewing agency identifies transactions within the lookback period that violate the eligibility rules, the applicant will be assessed a penalty. The penalty for violating a transaction during the lookback period is ineligibility for a certain period of time. To calculate the length of the penalty, the government will divide the amount of the transaction in violation by the average monthly or daily private care costs in a nursing home. For example, if an individual gifts $40,000 in a violating transaction during the lookback period and the state’s monthly private care cost for nursing home care is $4,000, then the individual will be assessed a penalty of 10 months of ineligibility. Here, the individual would be assessed a penalty of 10 months to begin from when the individual became eligible for Medicaid.

Given the harsh penalties for violating transactions during the Medicaid lookback period, having proper legal representation can help to ensure that your planning complies with all state and federal law.

 


Monday, July 22, 2019

The Effects of Gifts on Medicaid Planning

Medicaid is a healthcare program designed to help individuals with limited income and assets afford needed medical care. Importantly, Medicaid covers long-term healthcare services such as nursing home costs and costs for at-home personal healthcare. Because Medicaid is intended to benefit those with limited income and assets, there are strict eligibility requirements based on income and assets. Although Medicaid is a federal creation, it is jointly operated by the federal and state governments. As a result, the specific income and asset eligibility requirements for each state are different and you should consult with a Medicaid planning attorney in your area for specific eligibility advice.

As an example, a state may limit Medicaid eligibility for a married couple with a single spouse applying to $3,000 per month in taxable income for the couple with an additional income allowance for the non-applicant spouse. Similarly, the couple may be limited to $4,000 in non-exempt assets in the applicant’s name, and an additional exclusion of $100,000 of assets that may be owned by the non-applicant spouse. Additionally, most states provide for certain asset exclusions when determining Medicaid eligibility, such as exempting a certain value of the primary residence. Thus, when planning for Medicaid, the value of assets can be a major complication.

To reduce an individual’s assets, the first thought may be to gift: cash to your soon-to-be married niece, the family farm to your children, or an old car to your grandchild. However, gifting assets can have a serious impact on your eligibility for Medicaid. Under federal law, Medicaid has what is known as a five-year lookback period. This means that if you’re applying for Medicaid, the past five-years of your life will be investigated to look for gifts or other non-exempt asset transfers that reduced your assets.

When considering asset transfers in the prior five years, the only exempt transfers which will not affect your Medicaid eligibility are transfers to: (1) your spouse; (2) your child if he or she is permanently disabled or blind; or, (3) a trust for the sole benefit of anyone under 65 years of age and permanently disabled. Additionally, the transfer of your home in the following situation will not affect your Medicaid eligibility: (i) transferring your home to your child if he or she is under 21 years of age; (ii) transferring your home to your child if he or she has lived in the home for at least two years prior to you moving to a nursing home where your child’s stay at the home provided needed care so that you could stay at home during that time; or, (iii) transferring your home to a sibling if that sibling already has an equity interest in the home and has lived there two years to your moving to a nursing home. Thus, the exceptions for which a gift will not affect your Medicaid eligibility within five-years of application are extremely limited.


Wednesday, May 29, 2019

Caring for Parents with Dementia

Ever increasing life expectancies mean we get to spend more time with our loved ones, but it also means facing greater health problems as we age. One of the most challenging health issues for aging adults is dementia. Dementia is not a specific disease, but rather describes a group of symptoms that are associated with a decline in memory and cognitive function. In severe cases, those suffering from dementia may not remember their family members, or who they are, and may generally not be able to continue to live independently. As a result, many families take on a caregiver role for parents who suffer dementia. The following legal issues should be considered by families when caring for parents with dementia at any stage:

Ability to Make Important Decisions

Each state has differing standards of mental capacity required to make binding legal decisions, such as entering into a contract or executing a written will. If the parent retains mental capacity as defined by the state’s law, then the parent can execute legal documents such as a durable power of attorney as a precaution for losing their mental competency. A durable power of attorney allows a trusted person to make decisions on the grantor’s behalf, such as financial and medical decisions.

Some parents may already lack the mental competency necessary to enter into legal agreements. If a parent lacks mental competency and has not executed legal documents to ensure their care going forward, the courts must be petitioned to grant a legal guardianship to allow such legal, medical, and financial decisions to be made on their behalf.

Existence of a Will

If a parent is suffering from dementia, it is crucial to determine whether the parent has a validly executed will. If not, and the parent has testamentary capacity (the legal capacity to execute the will), then a will should be drafted and executed to ensure that parent’s wishes materialize. If the parent lacks testamentary capacity, then an experienced elder law attorney should be consulted to determine what legal avenues are available within the state.

Elder Abuse

Those with dementia are at a high risk for elder abuse due to their diminished mental capacity. When caring for a parent with dementia, caregivers need to keep a vigilant eye out for others (including family) taking advantage of the parent through means of fraud, scams, and intimidation. Any out of the ordinary activity, such as transferring large sums of money, should be immediately reported to an experienced elder law attorney and relevant state and national agencies.


For more information on caring for a loved one, join Ruggiero Law Offices LLC in Paoli for a caregiver support group beginning May 30 at 11:30 a.m.


Tuesday, August 28, 2018

Guardianships & Conservatorships and How to Avoid Them

Guardianships & Conservatorships and How to Avoid Them

If a person becomes mentally or physically handicapped and can no longer make rational decisions about their person or their finances, his or her loved ones may consider a guardianship or a conservatorship whereby a guardian would make decisions concerning the physical person of the disabled individual, and conservators make decisions about the finances.

Typically, a loved one who is seeking a guardianship or a conservatorship will petition the appropriate court to be appointed guardian and/or conservator. The court will most likely require a medical doctor to make an examination of the disabled individual, also referred to as the ward, and appoint an attorney to represent the ward’s interests. The court will then typically hold a hearing to determine whether a guardianship and/or conservatorship should be established. If so, the ward would no longer have the ability to make his or her own medical or financial decisions.  The guardian and/or conservator usually must file annual reports on the status of the ward and his or her finances.

Guardianships and conservatorships can be an expensive legal process, and in many cases they are not necessary or could be avoided with a little advance planning. One way is with a financial power of attorney, and advance directives for healthcare such as living wills and durable powers of attorney for healthcare. With these documents, a mentally competent adult can appoint one or more individuals to handle his or her finances and healthcare decisions in the event that he or she can no longer do so. A living trust will also allow someone to handle your financial affairs – you can create the trust while you are alive, and if you become incompetent someone else can manage your property on your behalf.

In addition to establishing durable powers of attorney and advanced healthcare directives, it is often beneficial to apply for representative payee status for government benefits. If a person gets VA benefits, Social Security or Supplemental Security Income, the Social Security Administration or the Veterans’ Administration can appoint a representative payee for the benefits without requiring a conservatorship. This can be especially helpful in situations in which the ward owns no assets and the only income is from Social Security or the VA.

When a loved one becomes mentally or physically handicapped to the point of no longer being able to take care of his or her own affairs, it can be tough for loved ones to know what to do. Fortunately, the law provides many options for people in this situation.  
 

Call Ruggiero Law Offices today at 610-889-0288 to see which alternative planning method is right for you.

Monday, May 21, 2018

Should Trusts be a Part of your Estate Plan?

 

Many individuals are aware that a will is one way to plan for the distribution of their assets after death. However, a comprehensive estate plan also considers other objectives such as planning for long-term care and asset protection. For this reason, it is essential to consider utilizing an irrevocable trust.

This estate planning tool becomes effective during a person's lifetime, but it cannot be amended or modified. The person making the trust, the grantor, transfers property into the trust permanently. In so doing, the grantor no longer owns property, and a designated trustee owns and manages the assets for the benefit of the beneficiaries.

In short, irrevocable trust provide a number of advantages. First, the property is not subject to estate taxes because the grantor no longer owns it. Moreover, unlike a will, an irrevocable trust is not probated in court. Finally, assets are protected from creditors.

Common Irrevocable Trusts

There are a variety of irrevocable trusts, including:

  • Bypass Trusts -  utilized by married couples to reduce estate taxes when the second spouse dies. In this arrangement, the property of the spouse who dies first is transferred into the trust for the benefit of the surviving spouse. Because he or she does not own it, the property does not become part of this spouse's estate when he or she dies.

  • Charitable Trusts - created to reduce income and estate taxes through a combination of gifting and charitable donations.  For example, charitable remainder trust transfers property into a trust and names a charity as the final beneficiary, but another individual receives income before,  for a certain time period.

  • Life Insurance Trusts - proceeds of life insurance are removed from the estate and ownership of the policy is transferred into the trust. While insurance passes outside of the estate, it is factored into the value of the estate for tax purposes, so this vehicle is designed to minimize estate taxes.

  • Spendthrift Trusts – designed to protect those who may not be able to manage finances on their own. A trustee is named to manage and distribute the funds to the beneficiary or directly to creditors, depending on the terms of the trust.

  • Special needs trusts - designed to protect the public benefits that many special needs individuals receive. Since an inheritance could disqualify a beneficiary from Medicaid, for example, this estate planning tool provides money for additional day to day expenses while preserving the government benefits.

The Takeaway

Irrevocable trusts are essential estate planning tools that can protect an individual's assets, minimize taxes and provide for loved ones. In the end, these objectives can be accomplished with the advice and counsel of an experienced estate planning attorney.

 


Monday, August 7, 2017

Making Decisions About End of Life Medical Treatment.

Making Decisions About End of Life Medical Treatment

While advances in medicine allow people to live longer, questions are often raised about life-sustaining treatment terminally ill patients may or may not want to receive. Those who fail to formally declare these wishes in writing to family members and medical professionals run the risk of having the courts make these decisions.

For this reason, it is essential to put in place advance medical directives to ensure that an individual's preferences for end of life medical care are respected. There are two documents designed for these purposes, a Do Not Resuscitate Order (DNR) and a Physician Order for Life Sustaining Treatment (POLST).

What is a DNR?

A Do Not Resuscitate Oder alerts doctors, nurses and emergency personnel that cardiopulmonary resuscitation (CPR) should not be used to keep a person alive in case of a medical emergency. A DNR is frequently used along with other advance medical directives by those who are critically ill and prefer not to receive life sustaining treatment.

What is a Physician Order for Life Sustaining Treatment (POLST)?

A Physician Order for Life Sustaining Treatment is similar to a DNR,  however a POLST is prepared by a patient's doctor after discussing end of life treatment options. This is not a legal document prepared by an attorney, but rather a binding doctor's order that is kept with a patient's medical records. A POLST declares a patient's preference for receiving certain life sustaining treatments, as well as treatment options the patient does not want to receive or to be continued.

Examples of these treatments include, but are not limited to, artificial nutrition and hydration, intubation and antibiotic use. These decisions should be made when there is no medical crisis that can affect an individual's decision making, after various treatment options have been discussed with his or her doctor. In short, a POLST ensures that a patient will receive appropriate treatments, but not be subjected to life sustaining measures the patient does not want.

By having these advance medical directives in place, a person can have peace of mind knowing that he or she will receive end of life treatment according to his or her wishes, and loved ones will not be forced to go to court to obtain the right make these decisions.

 


Tuesday, July 18, 2017

Navigating the Elder care Maze



Navigating the elder care maze can be challenging for caregivers.

Listen to Jim Ruggiero live on WDIY radio 88.1 FM on Wednesday July 19th at 6:00 pm for discussion on the legal needs and care options available.  Joining Jim on the show will be: Theresa M. Kuhar, RN, BSN, Managing Director of IKOR Bucks & Lehigh.
Read more . . .


Thursday, June 8, 2017

The Medicaid Asset Protection Trust

Estate Planning: The Medicaid Asset Protection Trust

The irrevocable Medicaid Asset Protection Trust has proven to be a highly effective estate planning tool for many older Americans. There are many factors to consider when deciding whether a Medicaid Asset Protection Trust is right for you and your family. This brief overview is designed to give you a starting point for discussions with your loved ones and legal counsel.

A Medicaid Asset Protection Trust enables an individual or a married couple to transfer some of their assets into a trust, to hold and manage the assets throughout their lifetime. Upon their deaths, the remainder of the assets will be transferred to the heirs in accordance with the provisions of the trust.

This process is best explained by an example. Let’s say Mr. and Mrs. Smith, both retired, own stocks and savings accounts valued at $300,000. Their current living expenses are covered by income from these investments, plus Social Security and their retirement benefits. Should either one of them ever be admitted to a skilled nursing facility, the Smiths likely will not have enough money left over to cover living and medical expenses for the rest of their lives.

Continuing the above example, the Smiths can opt to transfer all or a portion of their investments into a Medicaid Asset Protection Trust. Under the terms of the trust, all investment income will continue to be paid to the Smiths during their lifetimes. Should one of them ever need Medicaid coverage for nursing home care, the income would then be paid to the other spouse. Upon the deaths of both spouses, the trust is terminated and the remaining assets are distributed to the Smiths’ children or other heirs as designated in the trust. As long as the Smiths are alive, their assets are protected and they enjoy a continued income stream throughout their lives.

However, the Medicaid Asset Protection Trust is not without its pitfalls. Creation of such a trust can result in a period of ineligibility for benefits under the Medicaid program. The length of time varies, according to the value of the assets transferred and the date of the transfer. Following expiration of the ineligibility period, the assets held within the trust are generally protected and will not be factored in when calculating assets for purposes of qualification for Medicaid benefits. Furthermore, transferring assets into an irrevocable Medicaid Asset Protection Trust keeps them out of both spouses’ reach for the duration of their lives.

Deciding whether a Medicaid Asset Protection Trust is right for you is a complex process that must take into consideration many factors regarding your assets, income, family structure, overall health, life expectancy, and your wishes regarding how property should be handled after your death. An experienced elder law or Medicaid attorney can help guide you through the decision making process.
 


Tuesday, May 23, 2017

What is Elder Law?

What is Elder Law?

As the population grows older, many elders must face the difficult challenges of aging, such as declining health, long-term care planning, asset protection and other financial concerns. The practice of elder law is designed to assist seniors with meeting these challenges and give them peace of mind knowing that they will age with dignity.

Long-term Care Planning

The escalating costs of long-term care, including services for both medical and non-medical needs, is a daunting challenge for elders and their loved ones. In some cases, elders may need non-skilled care to assist with daily tasks of living such as dressing, feeding, shopping, and light housekeeping. Alternatively, some elders may require skilled nursing care whether provided at home, or in an assisted living facility or nursing home.

By failing to adequately plan for these needs, the cost of long-term care can easily deplete an elder's savings. A skilled elder law attorney can help explore options such as long-term care insurance, selecting the best skilled nursing facility or qualifying for public benefits such as Social Security and Medicaid.

Medicaid Planning

One option to cover the costs of long-term care is Medicaid, a federal program run by the states that provides medical assistance to low-income individuals, and those who are 65 or older. However, many elders may not qualify because their financial resources exceed the eligibility threshold. One way to protect your home and your assets is by establishing an irrevocable trust known as a Medicaid Trust.

Elder Abuse

Elder abuse, whether physical, or emotional, has been called the crime of the twenty-first century. In addition, financial abuse occurs when an individual takes an elder's property for a wrongful purposes or with intent to defraud. In these situations, an elder law attorney can serve as a dedicated advocate and protect a senior's rights.

Ultimately, an experienced and compassionate attorney can help elders plan for the challenges of aging, preserve their independence, protect their assets and enable them to enjoy their golden years .


Monday, October 24, 2016

Medicaid Planning: Not Just for the Medicaid-Eligible Spouse


 

Families of individuals who need skilled care are often confronted with a mix of challenges and emotions, including worry, anxiety, concern, and fear. These stem from concern about their loved one’s health and safety, as well as a concern that they will lose their home or everything they own to a nursing home. Some families have heard of Medicaid planning, but this term sometimes has an unwarranted stigma attached to it in the minds of many. These concerns stop some families dead in their tracks. However, we all have heard the adage: failure to plan is planning to fail.
Read more . . .


Thursday, June 30, 2016

Advance Planning Can Help Relieve the Worries of Alzheimer’s Disease

The “ostrich syndrome” is part of human nature; it’s unpleasant to observe that which frightens us.  However, pulling our heads from the sand and making preparations for frightening possibilities can provide significant emotional and psychological relief from fear.

When it comes to Alzheimer’s disease and other forms of dementia, more Americans fear being unable to care for themselves and burdening others with their care than they fear the actual loss of memory.  This data comes from an October 2012 study by Home Instead Senior Care, in which 68 percent of 1,200 survey respondents ranked fear of incapacity higher than the fear of lost memories (32 percent).

Read more . . .


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