Save your Selfies for the Medicaid 5-Year LookBack

Readers of this blog know that when he time comes to apply for New Jersey’s Medicaid/MLTSS program for either home care, assisted living care of nursing home care, a daunting array of proofs is required. The burden to prove eligibility is placed on the applicant.  Every single expenditure made by the applicant and their spouse during the previous 5 years is open for scrutiny, to see if it was really an expenditure or if it was actually a gift to somebody else. Every check written, every auto-debit, every wire transaction, every cash withdrawal is questioned. Many kinds of transactions are presumed to be gifts unless the applicant can prove otherwise. People who share their residence with other family members may find this process particularly hard to unravel because of the intertwined sharing of expenses. People who never managed the applicant’s affairs but are now stepping in may find it impossible to answer the hundreds of questions that are posed to them by the agency.

So save your selfies, save your receipts, save your letters and invoices and proofs that you took trips and excursions. Take pictures of your big purchases, and pictures of your caregivers. Keep detailed records of everything, as well as copies of all financial records and cancelled checks. Find your insurance policies, deeds, mortgage payment receipts,  and keep them with these records. Make sure your “trusted someone”  knows where they can find all these proofs when necessary. Banks are charging exorbitant fees to produce copies of statements and checks, so elect to receive statements & cancelled checks or make sure you receive them electronically. It seems you can never have too much proof. Collect and save the medical records. Save all of this for at least a five year period on an ongoing basis.

Forewarned is forearmed. The grueling MLTSS application process can be just a bit easier if you retain your records.

Call us for help with Medicaid applications for long term care ……. 732-382-6070

New Jersey COVID-19 MedComm Contains Big Announcements on Medicaid Terminations and Eligibility

An important new Medicaid Communication (MedComm) was recently issued by the New Jersey Division of Medical Assistance and Health Services (DMAHS). As we had previously discussed, due to the COVID-19 emergency, Medicaid has loosened certain eligibility and post-eligibility rules. The MedComm explains and reconfirms our understanding of the changes in these areas:

Terminations: If you were approved for or receiving Medicaid in March 2020, you cannot be terminated for the length of the emergency unless you wish to do so voluntarily.  Terminations occur for a variety of reasons, including changes in resources (like selling a house and getting cash), changes in income (like getting a new pension from a deceased spouse), change in insurance coverage (like getting Medicare for turning 65) or failure to provide information to a Medicaid agency (information is usually requested on an annual basis).  If you had been on Medicaid in March and have been terminated for any reason without your consent, you should be reinstated. Call us if you are experiencing problems with this.

Applications: Medicaid is allowing “self-attestation” of income and resources in certain situations where they may have previously insisted on bank statements or other proofs that cannot be gotten during the COVID emergency. “Self-attestation” is a sworn statement signed by an applicant or representative to declare what their income or resources are as of an application date. Because it is sworn, attestation is a process to be taken seriously in conjunction with legal advice.

Clinical Eligibility: MLTSS Medicaid eligibility will be processed in the emergency without completion of the usual face-to-face clinical assessments that were typically required, as long as the facilities or individuals follow the procedures outlined in this separate guidance from Division on Aging Services Call us with your questions about this change in process.

Stimulus Payments: No stimulus payment will be counted toward resource eligibility for Medicaid. No enhanced unemployment payment ($600) will count toward income eligibility for Medicaid. This reconfirms what we had discussed earlier this month.

Everyone’s individual situation right now is a little different, so this new policy guidance will affect each person differently when applied to the individual’s case. Contact us at 732-382-6070 to discuss how this will affect you or your family members.

Life insurance — a useful tool for estate planning and management

An illiquid estate can be very difficult to administer. If the estate assets include real estate or a business to be sold,  there can be a need for substantial cash to maintain these pending sale. If the beneficiaries of the Estate are Class C (siblings) or Class D (all others), New Jersey Transfer Inheritance Tax will need to be paid. Many Wills direct that these taxes be paid from the estate itself, rather than paid by the beneficiary who receives the inheritance. The Executor may need to pay for the funeral bill.  401Ks or IRAs generally have designated beneficiaries, and therefore are not used to pay estate expenses. There may be  substantial debts to clear up as well, or unfiled income taxes. So there’s often a need for cash in the estate so that the Executor can reasonably take care of the Estate’s obligations.  Life insurance that is payable “to my Estate” can be used to create the liquidity that’s needed.

If the estate plan needs to balance the amounts being left to different people, and certain people are receiving, let’s say, the tax-deferred accounts, the beneficiary designations on the life insurance can take care of the others.

Perhaps there is a Trust within the Will to protect the inheritance for certain heirs, or a supplemental needs trust for a disabled heir, or an unfunded standby trust for another person’s benefit. Life insurance can be made payable  to the Trustee of the Trust, to ensure that there will be an inflow of dollars to fund the trust. This is a particularly useful technique when the Trust includes a house that the beneficiary will live in.

Life insurance is one of many tools in the toolbox for an effective estate plan. Call us for advice to design the plan that meets your needs ….. 732-382-6070

 

Estate planning pointers for unmarried couples

Are you in a long-term relationship, or even engaged to be married? Is that wedding postponed indefinitely due to the current pandemic? Do you have children who would need a guardian if you pass away? Do you have children from a previous relationship? Do you want to make sure that your partner is the one who will inherit your estate, or will be the one who’s allowed to handle your financial affairs and your medical decisions if you become critically ill?

The “laws of intestacy” specify that the estate of an unmarried person who has no Will would pass in equal shares to the children equally and if a child was deceased, then his/her share would pass to his/her descendants if any. If the deceased has no children, the estate passes to his/her surviving parent or parents, and if none, then to the descendants of the parents (i.e., the deceased’s siblings or nieces and nephews). If a single individual dies and has no surviving parents, children, siblings or nieces/nephews, the estate will pass to further remote relatives such as cousins. Ultimately, the estate can escheat to the State of New Jersey when there are no kin who can be located.

The only way to be sure that your estate will pass to your partner is to structure things properly in writing. There will be NJ inheritance tax due if it passes to your partner who isn’t your spouse, so that needs to be factored into the planning. The passage of the estate can be managed through a Last Will and Testament or a Living Trust, (or both) as well as certain beneficiary designations, depending on your specific situation.  Each case needs individual attention.

With a Will or Trust  you can make specific arrangements to protect the well-being of your own children, whether that’s by designating a Guardian (for minors) or structuring the way their inheritance would be managed.

As for decisions to be made during your lifetime if you become incapacitated, there is a preference in the statutes for next of kin as decision-makers. If you want your partner to be the primary Agent on your behalf, you would need to sign legal documents to that effect — power of attorney, health care power of attorney. You can also sign an Appointment of Funeral Agent. All of this documentation goes a long way to prevent disputes over who has authority, who inherits, and who should make decisions for you.

You may be wondering if you can just wait until after the wedding. Of course you can. Should you? That’s a different issue. Careful planning can prevent a crisis.

Call us to prepare or update your estate plan …….. 732-382-6070

NJ Medicaid confirms that CARES payments won’t interrupt benefits

Previously we reported on concerns about whether the $1200 per person payments or the $600 unemployment enhancements that would be arriving via the CARES ACT would be counted as income or a resource which would affect the means-tested benefits being received under New Jersey’s Medicaid (NJ FamilyCare) programs. We’re happy to report that the Director of DMAHS has released a Medicaid Communication (Med-Com) concerning the COVID-19 crisis  that makes it clear that this will not happen.  MedCom 20-04_COVID-19_Guidance

The receipt of the payments will be treated as ‘excluded unearned income” in the month of receipt. This means that it will not change a person’s eligibility category if s/he is in a program that sets a ceiling or “income cap” for eligibility. This also means that if the person is receiving MLTSS benefits for skilled nursing home services, the payments do not have to be handled the way other income is handled, and they are not counted toward the resident’s monthly cost share to the facility.

The receipt of the payments also will not be counted as a “resource” (asset)  for up to 12 months after the month of receipt. This means that it will not change a person’s resources if s/he is in a program that has a resource limit (frequently this limit is $2,000 but certain programs have a higher limit). The “spend down” can be done gradually over the year, and might have to be reported at the time of the annual redetermination.

Call us with questions about NJ Medicaid eligibility, applications and appeals …. 732-382-6070