Articles Posted in Medicaid Trusts

Financial scammers have long targeted the elderly both for their mental/physical vulnerabilities and the fact that they are more likely to have a large nest egg used for retirement. However, in some ways the problems has worsened in recent years. That is because advances in electronic finances have raised much confusion among the elderly, making them even more likely to fall prey to those willing to take advantage of that vulnerability for their own financial gain.

A blog post at Forbes last week issued another clarion call for all local community members to be on the look-out for elder financial exploitation. The author discussed one pair of theives that tried to bilk a New York woman out of a multi-million dollar property she had owned for decades. In another local case a home care worker stole $350,000 from her client–the senior’s entire life savings.

It is important to remind all local residents that it is not just the obvious targets–seniors with dementia or Alzheimer’s–who are at risk. Literally anyone can be caught, even those who have all their wits about them. As the author noted, ” My mother in law, Alice, is 90 and still very sharp. She would be hard to fool, but I know the right thief could probably do some harm if we weren’t watching closely all that goes on financially.”

Nearly 1 in 5 Americans participate in the Medicaid program. New York state has a higher participation rate than the national average and the largest total expenditures on the program in the country. It is simply undeniable that millions upon millions of Americans–from children to the elderly–depend upon this program.

That is why many are paying close attention to what the current Presidential candidates are saying about what they’d like to do with Medicaid in the future. Unfortunately, in the jumble of political slants and spin, it is difficult to get honest answers about what each candidate (and party) truly believes is the best step forward.

The Proposals

It is perhaps every senior’s worst nightmare: a dispute over their finances influences the care they receive in their later years. It seems self-evident that nothing should get in the way of making medical and caregiving decisions based on maximizing a senior’s quality of life–not maximizing an inheritance for others once a senior passes on. Unfortunately, case after case demonstrates that some elderly community members suffer in their later years unnecessarily for financial reasons–not because they cannot afford proper care but because other want their money.

This confluence of elder law and estate planning was perhaps most vividly illustrated by a case discussed this week in SF Gate.

According to the story, a 63-year old woman was staying at a local care center because she was not able to care for herself at home. The details of her family situation are not known, however, she had been dating a 67-year old man for the past three years. Unfortunately, the boyfriend appears to have been motivated in the relationship mostly by the way that it could benefit him financially.

Not long ago a few residents received some disturbing news–the New York Medicaid support that they counted on to survive was being cut back. Many of these community members had severe disabilities, needing help with every aspect of their life, from dressing and bathing to eating and traveling. Many seniors and those with disabilities receive help from at-home care workers around the clock so that they are able function in the least invasive setting possible despite their challenges.

Yet, in an apparent effort to recoup funds given back to federal officials following an overbilling case that settled in November, the New York City Human Resources Administration decided to alter the way some personal care was provided to residents. In particular “split-shift” at home care was curtailed. This care is provided to those who need help 24 hours a day, with two different care workers each taking a 12 hours shift. In it’s place, the city wanted to provide just a single care worker who lived with the Medicaid recipient.

New York City Medicaid Lawsuit

Lower Hudson Valley News reported last week on the current financial picture of the New York Medicaid program. Many local residents depend on the program to meet their various needs, including long-term care costs. Yet, time and again doomsday projections are offered which rightly confuse those who count on their participation to get by each day. According to this latest story, the current financial state of the program can best be summarized as expensive but under control.

As our New York Medicaid attorneys know, our state’s Medicaid program is one of the costliest in the nation–topping $54 billion a year. The Medicaid program accounts for 36% of the entire state budget–the largest single piece of the state’s yearly obligations. To limit the growth of the program the state created a self-imposed cap which sought to limit Medicaid spending. As of last Wednesday that goal had been met, and the cap was not breached. This was made even more impressive considering that in the same time period the use of the program actually grew, adding 104,000 enrollees in the last half of 2011 to top nearly 5 million total participants.

This is good news for local elder residents, millions of whom conduct New York Medicaid planning to ensure that they have the long-term care they need to survive in their golden years. So how has the state been able to stay below the budget cap even while the program grew in size? Experts explain that reduced hospital admission rates have helped. This allows residents to receive far cheap primary care as opposed to expensive hospital stays. Other cost-cutting measures have also helped rein in spending without slashing services.

Our New York elder law estate planning lawyers understand that handling long-term planning issues can be particularly delicate when there are second marriages involved. However, it is in these situations, with blended families, when this sort of planning is absolutely critical. Many adult children have natural concern when their parent remarries. Obviously there are inheritance planning issues, and it is vital that seniors who remarry make their wishes very clear about who they’d like to receive what. Failure to do so opens the door to strong disagreement and infighting between those involved. The family glue can come undone even among blood relatives, and there are often even less ties keeping fights in check when blended families are involved.

Beyond inheritance issues, local families should also take note of the New York elder law concerns which are implicated by second marriages and blended families. Decisions about naming a Health Care Proxy and Power of Attorney in the event of disability can present some disagreement when seniors remarry.

An article this weekend in the Laurel Leader-Call referred to another issue regarding the long-term care planning problem in the context of second marriages. The story discussed two seniors who met at an assisted living facility, fell in love, and married. Eventually one of the partners began a physical and mental decline and needed to be moved to a nursing home. The couple did not realize that Medicaid could have been applied for to help support those nursing home costs. If the partner whose health deteriorated passes away, their life savings may be entirely exhausted in providing for the long-term care. As a result, the surviving spouse is often left in dire straits when his or her own health deteriorates and they have a need for skilled nursing care. What often happens is that adult children are forced to scramble in crisis mode to figure out how to pay for the care the elder needs. A range of issues are present when those adult children are step-children who may not have as close a connection with the senior.

The single most important reason to visit a New York elder law attorney is to learn about various Medicaid Strategies to protect assets from nursing home costs. No matter what one’s situation in life–whether in excellent health with long-term care decades away, on the nursing home doorstep, or even already in a home–there are planning options available to assist families. In each case the assistance of professional help is essential. Mistakes could lead to Medicaid penalties that put families in difficult financial situations and eliminate any chance of leaving an inheritance.

For example, yesterday Elder Law Answers discussed a New York appellate decision that upheld a Medicaid penalty where a written agreement was missing in an asset transfer between mother and daughter. In that case, a woman was entering a nursing home. She transferred money from a revocable trust and gave it to her daughter for less than fair market value and without a written agreement providing for repayment. Medicaid investigators learned of the transfer and determined that it triggered a penalty period whereby the woman would not be eligible for benefits for nearly fifteen months. Her family will now have to come up with the resources to provide the necessary care during the penalty period.

When properly executed a “gift and loan” strategy can be used to save some of a senior’s assets from being consumed by long-term care costs–even when on the nursing home doorstep. This technique involves gifting one half of assets to a loved one and then loaning the other half. The loan would take the form of a promissory note where the family member agrees to repay the loan at a certain monthly amount with modest interest. Medicaid is then applied for following the gift and the loan. The gift will trigger a penalty period based on the size of the gift amount, but the loan is ignored because it must be repaid. The loan repayment can then be used to pay for nursing homes costs during this penalty period. In this way, half of an estate may be saved as an inheritance even when little planning has been conducted prior to entering a long-term care facility.
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Helping residents ensure that they receive the long-term care that they need without depleting their assets is at the core of all New York elder law services. Some reports indicate that about two-thirds of Americans who reach the age of sixty five will need long-term care at some point. Most often this constitutes specialized aid in a nursing home or related assisted-living facility. The cost of this care is high. Without forethought and planning the financial toll of these services may cause area residents to lose property and assets that they built over a lifetime.

Fortunately, a professional in this area can share information on New York Medicaid strategies to protect one’s estate. Usually the best options involve use of long-term care insurance or creation of a Medicaid Asset Protection Trust (MAPT). The insurance option is generally the most preferable, because it pays the cost of having caretakers come into a senior’s home to provide necessary assistance. This allows residents to “age in place” without the need to leave their own dwelling.

Earlier this month the Daily Star reported on the immense benefit that comes with long-term care insurance for those who are capable of buying coverage. Not surprisingly, timing matters when it comes to this insurance. The younger one is when they begin the policy, the more affordable the premiums. A Wall Street Journal article recently explained how an average policy for a 45-year-old would be around one-third the yearly cost that a 65-year-old would pay for the same coverage.

As with all types of insurance, a variety of forms can be purchased depending on the needs and desires of the beneficiary. One must choose between ‘indemnity” and “reimbursement” policies, the amount of coverage to take out, whether there will be an “elimination” period, and similar details. Many families may also chose to pair the insurance with the creation of a MAPT.

Unfortunately, depending on one’s age and medical condition, some find it difficult to purchase this insurance in any form. In those cases, other options exist, like the MAPT or the “Gift and Loan” strategy for seniors on the nursing home doorstep.
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Many New Yorkers will one day be called to help care for their elderly parents. The majority of those caregivers report that the complexities and challenges of the process cannot be fully grasped until one experiences them firsthand. There is often no easy way to handle the emotional and financial toll incurred while helping an elderly loved one when they need it most. Our New York elder law lawyers know well the challenges so that many local families face as they work through this experience.

A new book released last week by New York Times reporter Jane Gross offers a first-hand look at how her own New York family struggled through the process of helping their elderly mother. In “A Bittersweet Season” the writer shares the tumultuous way in which she tried to navigate the eldercare system. She reports on her family’s confusion with Medicare and Medicaid programs and other problematic parts of the American health-care system as it relates to the elderly. The book also shares the impact that the time had on her mother’s finances. An itemized ledger is revealed which imparts the true monetary cost incurred by her loved one throughout this time in her life.

In the new volume the author explains how her family was unprepared for the experience. In some aspects the main take-away from book is summarized by Ms. Gross when she writes that “being clueless–utterly clueless–is the central and unavoidable part of this experience.” As difficult as the process is on many families, there are resources available to ease that uncertainty. In fact, a main lesson from the book is the need for families to do what they can to prepare for the process ahead of time.
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by Michael Ettinger, Esq.

I am unsure how many of you have run into this scam. I have seen it off and on for the last few years and think all should know about it. These companies that flog Medicaid annuities have a deal going with assisted living facilities that essentially says this. We will advertise and promote VA benefits to seniors. When they call us we will refer them to your facility provided you recommend our services, for people who come to you, in assisting them in the VA application (free of charge) and for financial planning. The company is actually in the business of selling Medicaid annuities and they give out Medicaid advice consistent only with the one product they have to sell.

Here is what happened in an actual case in my office recently. Client was told by the assisted living facility to contact the VA assistance company to help “expedite” the process. Company told the client it would take three months to get benefits. It is now nine months and nothing has been received by the family. Client was also told that they did not have to do anything now to protect assets because they could purchase a Medicaid annuity if and when she had to go into a nursing home. Turns out that client has rallied nicely and will be staying in assisted living for the foreseeable future. Family is now setting up a Medicaid Asset Protection Trust (MAPT) but nine months later than they should have but for the poor advice received by the annuity floggers. But also consider this: had the client needed nursing home care, it turned out that the HCFA life expectancy was only 5.5 years which the client, in this case, might have well outlived. The client was never told about the requirement that the annuity be actuarially sound (i.e. all the money had to be paid back to her within the 5.5 years) and what that meant or what the alternatives were. Client, in this latter case, would have been better off with a gift and loan strategy.

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