The system puts a heavy burden on applicant to prove Medicaid eligibility

In A.T. v. Division of Medical Assistance and Health Services (unpublished non-precedential decision, Appellate Division of Superior Court, 2015, WL 7421647), a Medicaid application was denied for failure to provide requested verifications of assets. The applicant’s grandson (DT) was her Agent under Power of Attorney (“POA”), and his father ST was the alternate Agent. The application was initiated by one of them. Both ST and DT received a Verification Form from the County Board of Social Services on three separate occasions that asked fort a litany of additional information. The court sustained the denial, holding that failure to provide the documentation impeded the Board’s ability to determine whether certain assets were available to A.T. or not.

An application for Medicaid requires 5 years’ of financial records, including deeds, copies of cancelled checks, and sometimes even old receipts or credit card statements. Generally, an Agent under a Durable General Power of Attorney should have the authority to request and obtain all of the needed records from third parties even if those records are considered confidential under other laws. It’s a huge job and its a real pity when a qualified applicant gets turned down because some of the papers haven’t been produced. Although it can take 6 months or more before a complete application is actually reviewed in some counties, the minute the applicant or their agent receives the letter asking for better proofs, they need to jump on it because the agency typically provides a very short window of opportunity, like 10 days.  Then what happens is that the applications get denied if this deadline passes.

What if the applicant is incapacitated and has no agent under power of attorney and no legal guardian? Sometimes the party presenting the application is the nursing home, or is the next of kin who is authorized to file a Medicaid application under Medicaid law, but lacks legal authority under other law to actually demand copies of confidential records from banks etc. Not only are the assets inaccessible, but there may be no authority to get access to the historical records for purposes of the 5-year look-back. In a situation like that, the applicant’s representative needs to remind the agency that there is nothing accessible so the person is eligible for conditional benefits because the law requires that benefits be provided. The representative can then ask an attorney to file an appropriate type of legal suit to get authority for production of necessary records.

Call us for advice on Medicaid applications, appeals, guardianship and protective arrangements … 732-382-6070

Great idea for older folks to help avoid missed insurance payments

There is a New Jersey insurance law which allows a person who is 62 years of age or older to designate an authorized third party to receive Policy Lapse Notices and Late Payment notices from the policyholder’s insurance company. This is a regulation at N.J.A.C. 11:2-19. The process is easy. Many companies will provide you with their own form upon request. For others, just send a written statement, signed and notarized, to your insurance company by certified mail, return receipt requested, designating the person (plus phone number and address) to whom you want the company to send the extra notices. The third party designee needs to also sign that letter to show their willingness to accept these notices.  This notice can be revoked by the policy holder by a written communication, and the third party can, of course, resign by sending a written resignation.

The benefit for aging folks is that if you forget to send in a payment on your insurance policy because you’ve been out of the house during a prolonged illness, or things get worse and a notice of Lapse/termination arrives at the house, you have the comfort of knowing that your third party designee will receive that mail also and can then help you solve the problem. Presumably, your Agent under Power of Attorney can then spring into action on your behalf to prevent the lapse, make the payment or initiate steps to reinstate a lapsed policy.  No matter what, the third party designee does not become personally liable merely because they agree to receive a copy of these notices.

Careful planning can prevent a crisis. Better to have another person on your elder care team who can receive a copy of such urgent mailings, than have to try to undo the damage later on when it may be too late.

Call us out elder law and elder care planning that puts your interests first … 732-382-6070

Great idea for older folks with brokerage and investment relationships

I have just learned that Morgan Stanley has instituted an optional opportunity that can be used by their aging customers. Maybe some other financial advisors or banks have a similar option.  It provides a form for account holders to designate someone who the Morgan Stanley personnel can contact and share confidential information with, because — as the form says — “situations and circumstances may arise where Morgan Stanley, in order to protect me and my investment interests, may have concerns about my whereabouts, financial affairs or health status and deem it beneficial in its reasonable discretion, to share information, orally or in writing, about my account(s) with the contact person(s) I have listed below.” The option can be withdrawn, rescinded or cancelled by the customer at any time. The authorization is not the same thing as a trading authorization or power of attorney.

I think this is forward-thinking and really great. I have often blogged about the many ways people can plan ahead for a good old age, and that careful planning can prevent a crisis. This is another example of a sensible step people can take. You build your team, provide them with the tools they will need, and then head gracefully towards the future.

Call us about planning for a good old age ………. 732-382-6070

We Respect Our Aging Parents by Helping Them Plan for Future Needs

Could this be you? You’re in your thirties or forties, with several active children and a busy social and business life. You’ve got volunteer activities and school programs to keep track of. Your parents are in their seventies or eighties, have their own home, and appear to pay all their bills when due. You have no idea what your parents’ income or assets are because they don’t want to bother you about it, and they seem to be able to manage on their own. You and they have always known that they would be able to depend upon you for loving care and support if the need arose. You and they have always known that if necessary, you will arrange to take care of them, and you will try to keep them in their home.

Then one day you start to realize that your mother is asking very confused questions, and is calling you repeatedly to ask the same thing over and over, not remembering your recent answers. You visit the house and you find that she’s letting the mail pile up, and your father seems unable to communicate clearly. A neighbor calls you out of concern that they’re not able to take care of themselves. Or you get a frantic phone call informing you that one of your parents has had a terrible stroke, is in the hospital  and will need nursing home care, which can cost $11,000 a month. You wonder whether you’ll be able to keep them at home. And you feel so disrespectful when you try to step in and manage the elder care situation.

Sound familiar? When these problems develop, they can be readily handled if the family planned ahead. Without planning, these problems are likely to become a major crisis.

The longer we live, the higher the risk of catastrophic illness and expense. What can you do to protect your parents, and prevent the chaos which so often occurs when a person becomes severely, irremediably disabled? You can encourage your parents to do what I call Disability Planning. Careful planning is like having insurance on your home – you wouldn’t dream of not keeping up that policy, even though, in your entire lifetime, you probably won’t ever put in a single claim. What follows is a discussion of the key elements of disability planning. It must start with asking questions, and helping your parents to share information with you so that you can take care of them when the time comes.

ASK THEM TO UPDATE THAT OLD WILL. If one spouse is severely ill, such as with Alzheimers’ Disease, it may not be a good idea for them to inherit their spouse’s entire estate outright. The other spouse may want to divide the estate between the ill spouse and the children, or to create a Trust to receive the inheritance. It’s probably time to select someone else as the Executor also. And be sure to plan carefully for the future care of a dependent disabled child by considering a  Supplemental Needs Trust.

ASK THEM TO SIGN A DURABLE POWER OF ATTORNEY. If your parent becomes completely incapacitated and can’t manage their affairs, but never designated an Agent by signing a Durable Power of Attorney, no one will be able to carry out transactions with the parent’s assets. The house can’t be sold; gift transfers to children or spouse can’t be made; life insurance can’t be cashed in; contracts can’t be signed; stocks can’t be sold; etc. It will be necessary for someone to file a legal action for a Guardianship, in which they seek to be appointed as the parent’s Guardian by the court. Unfortunately, sometimes there is bitter disagreement among family members. If there is any disagreement in the family as to who should be the Guardian, there may be a drawn-out, costly legal battle, during which the court will designate a third party to be the guardian until the final decision is made. Your parent will have no control over the outcome. A comprehensive Durable Power of Attorney should be signed which covers everything from banking to life insurance, 401K’s, gift transfers and real estate. It can be made to be effective as of the time it is signed, or it can “spring” into effectiveness at some specified later date or condition. Your parent can leave their Power of Attorney with their attorney, to deliver to the Agent when some specified condition occurs.

ASK THEM TO SIGN HIPAA FORMS AND A LIVING WILL OR A HEALTH CARE PROXY. Living Wills (also called “advance directives”) express a person’s wishes on whether life supports should be used if the person is in a severe, vegetative or terminal condition, or has advanced brain diseases which leaves him/her unable to interact with others in a meaningful way, and then suffers a life-threatening event like a heart attack, kidney failure, breathing failure, or inability to swallow. A Health Care Proxy document doesn’t express advance wishes, but it does appoint the designated decision-maker who would make all the health care decisions if the patient could not communicate with his/her doctors. The HIPAA form will immediately enable a health care provider to share confidential information with the trusted person who is trying to help out. HIPAA.

What happens if there’s no advance directive or proxy?

Typically, the doctor will turn to the spouse for guidance, consent and decision-making. In a case of no spouse, there is increased risk of disagreement if there’s more than one child. One will see improvement where the other sees hopelessness. One will be willing to implement the advance wishes the parent expressed verbally in conversation; the other won’t agree because he can’t let go. It is the Living Will which stands as the clearest expression of the parent’s wishes regarding resuscitation and other life supports, regardless of the personal preferences of other family members.

COMPILE AND CONSOLIDATE THE ASSETS. Your parents need to know what they have in order to plan for how they’ll pay for care in the event of disability. They should save five years’ of bank records, cancelled checks and financial statements, as well as their filed income tax returns.

DEVELOP A PLAN FOR LONG-TERM CARE. Care can be provided in the home, in an Assisted Living group residence, or in a nursing home. Unless the person is eligible for Medicaid, s/he’ll be paying privately for care. Can your parents still take care of each other? Who should be brought in? To be eligible for Medicaid, the applicant’s assets must be below specified levels and there is a complex network of laws that typically need a lawyer’s interpretation. Since Medicaid doesn’t pay for 24/7 care in the home, careful planning means looking into all the ways your parents could finance their care at home, whether that’s with a reverse mortgage or other means.

The Medicaid applicant can be asked to provide the last 5 years’ of documentation of the value of each of the assets, copies of all cancelled checks, as well as proof of what was done with each of those assets. The more disorganized your parent’s portfolio, the harder it will be for you to provide the necessary documentation. Banks are now charging high fees to retrieve bank records for customers.

DON’T JUST GIVE EVERYTHING AWAY WITHOUT A PLAN. Also, they should not make gifts of their assets without advice from an attorney familiar with the consequences of doing so. So if they do wish to transfer assets to the children, they must be sure to get advice from an elder law attorney with substantial expertise in this area.There are many different strategies which can be utilized to protect the family’s assets. Sometimes it is a good idea to transfer full or partial ownership of the house, and sometimes it isn’t. A lot depends on the other assets available to pay for care if it is needed. Also, a lot depends on the family structure and the impact on a potential Medicaid application. Once assets are given away,  the parents may not have as many choices as they need for different kinds of care which have to be paid for privately.

In conclusion, you show your love and respect for your parents by helping them to plan for their future protection. Careful planning is the key to success when it comes to your parents’ personal wishes, their financial security, their family’s peace of mind.

Call us for help in planning for a good old age ….. 732-382-6070



Taxpayers over 70-1/2 can use their IRA for tax-free charitable gifts now

At the end of the year Congress passed and the President signed  HR-637, the Permanent IRA Charitable Contribution Act of 2015, which makes a permanent amendment to the tax code to allow taxpayers older than 70-1/2 to direct a distribution from their IRA directly to a qualified charitable organization, bypassing the usual realization of income on the distribution. A taxpayer can use this method to direct up to $100,000 per calendar year to qualified charities. This needs to be a completed  gift and cannot be directed into the taxpayer’s donor-directed fund, charitable gift annuity or charitable remainder trust. The gift won’t qualify for the charitable gifts deduction, but it would be exempt from income tax. Depending on your situation, the income tax savings just might be the incentive you need.

What a fantastic idea. IRA owners who are over age 70-1/2  need to take their required minimum distributions anyway, and every dollar they take out is subject to income tax. The addition of that income to other retirement income such as Social Security, pensions, interest & dividends, etc. can result in adverse changes to taxability of the Social Security benefit, bump you into a different tax bracket, etc. Another way to think about it is that if you’d pay 25% income tax on a $1,000 IRA distribution, redirecting it to a charity means you’re making a $1000 gift that only costs you $750. So if you otherwise have all the income you need for an enjoyable post-70 lifestyle, or maybe your post-90 lifestyle, redirecting part of your IRA distribution to your favorite worthy cause can be a win-win all around. Non profit organizations fill in so many gaps in our nation’s safety net, whether through job training, emergency housing, relocation assistance, literacy programs, or social services to homebound elders or people with disabilities. The need is just never ending. And it feels so good to share what we have with those in need.

There are plenty of ways to build meaningful charitable gifts into your estate plan, sending a wonderful message to your heirs and helping to repair the world, one step at a time.

Call us about estate planning that includes charitable giving …. 732-382-6070