Michigan Estate Planning Blog

Of Family Gifts And Medicaid Lookback Rules Mid-Michigan

Medicaid has some very well-intentioned rules to stop people from taking advantage of the system. Many people set out intending to “beat the system.” It is called fraud. Unfortunately, sometimes the rules intended to stop outright fraud can get in the way of everyday families who want to play by the rules. The most common problem families run into is the so-called “lookback” period. You can easily run afoul of the 20/20 hindsight of Medicaid and thereby threaten the care your elderly loved one needs. This common conundrum of the lookback period was recently updated in a Q&A and supporting guide produced by ElderLawAnswers. In fact, the common question that sparked the post is the same as the title: “Should I Return Money My Mom Gave Me So She Isn't Penalized by Medicaid?” The lookback period, as some know all-too-well, is the period that Medicaid looks back through the finances and tax records of an applicant to ensure that they did not give away their assets to pass muster with the means-testing of the program. Of course, there are plenty of legitimate scenarios in which an individual would want to give away money or assets only to need Medicaid a few years thereafter. So, what happens when the tripwire is tripped and your loved one is Medicaid ineligible due to a previous gift made during the lookback period? This may vary from situation to situation (and state to state), but there are ways of undoing the gift and becoming Medicaid eligible. However, there are some potentially strange tax consequences. Then again, the heir who received the gift can always pay for the care until the loved one is eligible for benefits again. Right? In either event, the best solution would be to not create the problem in the first place. For information on the lookback and other eligibility problems to Medicaid, consult the master post on the subject (see “Medicaid's Asset Transfer Rules”). As always this is yet another example of situations that require the expertise of competent counsel before making a financial or legal move now (the gift) that can have serious financial or legal consequences later.

Reference: ElderLawAnswers (mod. January 3, 2014) “Should I Return Money My Mom Gave Me So She Isn't Penalized by Medicaid?”

ElderLawAnswers (mod. September 13, 2013) “Medicaid's Asset Transfer Rules”

For more information, www.jerryreiflawyer.com

When is Charitable Giving Elder Abuse?

Have you read about the matter of the late Huguette Clark, her massive inheritance, and the hospital that may or may not have exerted undue influence on her aging mind and bank accounts? Ms. Clark was fantastically wealthy. During the last twenty years of her life, the reclusive copper heiress spent an absolutely inordinate amount of time in the hospital. She had few afflictions other than loneliness. After her passing, it did not take long for questions to arise regarding how the hospital pushed to care for a not-so-infirm woman for so long and just so happened to be receiving sizable donations from her all the while. What may be worse is that the allegations may be true and there are some interesting, perhaps damning, tidbits. This scenario and the questions it raises were reported recently in The New York Times in an article titled “Hospital Caring for an Heiress Pressed Her to Give Lavishly.” The article chronicles the last lonely years on Ms. Clark’s life. Remember, she was only all-too-human. If manipulation was afoot, what should be done about it and, closer to home, how can such manipulation be prevented in our own estates or those of our already senior loved ones? But then there is the reverse side of the coin: what if it was not manipulation at all? Then Ms. Clark’s wishes and last charitable actions are being drawn through the mud for not having been fully articulated.

Reference: The New York Times (May 29, 2013) “Hospital Caring for an Heiress Pressed Her to Give

Lavishly”

For more information, see www.jerryreiflawyer.com

Elderly Senior’s Extravagant Gifts Spark Litigation

Are you planning your estate or perhaps caring for an elderly loved one who is planning his or her own? If yes, then you can learn some important lessons from Huguette Clark’s case, as recently reported in the San Francisco Chronicle. In the article, titled “Copper heiress' huge gifts spotlighted in NY court,” Ms. Clark was cast as either an oddball or a thoughtful “eccentric.” Such was the description of one side to the litigation over her estate. The other side, however, painted her as a “poor, manipulated old woman.” In case you haven’t followed the case, Ms. Clark was a wealthy heiress to a copper fortune, and she died recently at the age of 109 after two decades of hospitalization. Before dying, however, Ms. Clark gave extravagant gifts to her staff: Her nurse was showered with almost $28 million in gifts, including three Manhattan apartments, two homes elsewhere and a $1.2 million Stradivarius violin. Her doctors' families received more than $3 million in presents. A night nurse received a salary plus money to cover her children's school tuition and to help buy two apartments. Now, after her death, a court-appointed official has begun to demand the return of these gifts, valued at $37 million, to her $400 million estate. The basis for the demanded return is that the recipients received the gifts through manipulation. The case is ongoing. When it comes to estate planning, however, old age and wealth are a dangerous combination. Some wealthy seniors are generous by nature, but others kept the first nickel they earned. Regardless, expect extra scrutiny of any gift or inheritance from a wealthy senior when the object of such bounty is not someone with a family tie or a long relational history.

Reference: The San Francisco Chronicle (June 17, 2012) “Copper heiress' huge gifts spotlighted in NY court”

ELDER LAW

On the topic of disclosures, a reader inquired about what to do about her family of eight siblings and one elderly father. Long ago the siblings got together and put two of the sisters in charge of their father, largely because his will and other directives advised as much. As a result, they were granted power-of-attorney and access to his accounts. Now, the reader has discovered that they aren’t forthcoming with information about their father, his care, and his finances. The reader is worried that she won’t hear anything until there’s a demand for money to care for their elderly father, and, perhaps, that the original funds weren’t adequately used. The response of Craig Reaves is tailored to the reader’s unique situation, but his advice is applicable for many in this same or similar position. As a preliminary caveat, there are specific state laws (i.e., like those regarding “powers of attorney”) that govern the authority, responsibility and liability of agents and fiduciaries. Read Craig Reaves’ enlightening response in his original post.

Reference: The New York Times – The New Old Age Blog ( January 18, 2012) “Ask the Elder Law Attorney: Disclosures and Loans”

ELDER LAW / ELDER ABUSE

Elder financial abuse continues to the “Crime of the 21st Century,” according to a recently published MetLife study on the financial abuse of the elderly, “The MetLife Study of Elder Financial Abuse: Crimes of Occasion, Desperation, and Predation Against America’s Elders.” The study shows that elder financial abuse falls into three types of crimes: occasion, desperation and predation. Additionally the vulnerabilities of aging increase the risk of elder financial abuse, and there is a continued lack of focus (and prosecution) on the perpetrator. Elder Americans are now estimated to lose $2.9 billion every year, with significant patterns in the nature of these abuses. Most cases of abuse, 51 percent, are perpetrated by strangers, with close family and friends accounting for 34 percent. Crimes classified as “scams” committed by strangers accounted for 28 percent of all financial abuses, business-related exploits made up 12 percent, and Medicare and Medicaid fraud amounted to the most loss per case but only accounted for 4 percent of total cases. The most common perpetrator was likely to be a man between ages 30 and 59. When family or friends were involved, the study found that most cases involved forged checks, stolen credit cards, drained bank accounts, and transferred assets. The most common victims are women, who are twice as likely to be financially abused as men, especially in their 80’s. Most cases found that it was when the victim’s disabilities were outwardly apparent due to the use of a cane, handicap tags, or simple confusion, but those living alone and in need of health care or home maintenance also are at risk. The Elder Justice Act became law on March 23, 2010, and has significantly raised the national focus on elder financial abuse. Provisions of the Act are outlined in the study, which you can download here. Two of the provisions include required immediate reporting to law enforcement of crimes in a long-term care facility and civil monetary penalties for failure to report and a provision for penalties for long-term care facilities that retaliate against an employee for filing a complaint against or reporting a long-term care facility that violates reporting requirements.

Reference: Metlife.com (June, 2011) “The MetLife Study of Elder Financial Abuse: Crimes of Occasion, Desperation, and Predation Against America’s Elders” (study publication)

 

ELDER LAW / ELDER ABUSE

Elder financial abuse continues to the “Crime of the 21st Century,” according to a recently published MetLife study on the financial abuse of the elderly, “The MetLife Study of Elder Financial Abuse: Crimes of Occasion, Desperation, and Predation Against America’s Elders.” The study shows that elder financial abuse falls into three types of crimes: occasion, desperation and predation. Additionally the vulnerabilities of aging increase the risk of elder financial abuse, and there is a continued lack of focus (and prosecution) on the perpetrator. Elder Americans are now estimated to lose $2.9 billion every year, with significant patterns in the nature of these abuses. Most cases of abuse, 51 percent, are perpetrated by strangers, with close family and friends accounting for 34 percent. Crimes classified as “scams” committed by strangers accounted for 28 percent of all financial abuses, business-related exploits made up 12 percent, and Medicare and Medicaid fraud amounted to the most loss per case but only accounted for 4 percent of total cases. The most common perpetrator was likely to be a man between ages 30 and 59. When family or friends were involved, the study found that most cases involved forged checks, stolen credit cards, drained bank accounts, and transferred assets. The most common victims are women, who are twice as likely to be financially abused as men, especially in their 80’s. Most cases found that it was when the victim’s disabilities were outwardly apparent due to the use of a cane, handicap tags, or simple confusion, but those living alone and in need of health care or home maintenance also are at risk. The Elder Justice Act became law on March 23, 2010, and has significantly raised the national focus on elder financial abuse. Provisions of the Act are outlined in the study, which you can download here. Two of the provisions include required immediate reporting to law enforcement of crimes in a long-term care facility and civil monetary penalties for failure to report and a provision for penalties for long-term care facilities that retaliate against an employee for filing a complaint against or reporting a long-term care facility that violates reporting requirements.

Reference: Metlife.com (June, 2011) “The MetLife Study of Elder Financial Abuse: Crimes of Occasion, Desperation, and Predation Against America’s Elders” (study publication)