Michigan Estate Planning Blog

How to Protect Your Spouse when Diagnosis Is Dementia

 

Few illnesses are as terrifying as dementia, for which there is no cure. If estate planning is in place, it may need to be adjusted to address new, more imminent issues. Reviewing the family situation from a legal and financial aspect is critical, and there is no time for delay, explains a recent article from Morningstar, “’I don’t want my wife to lose everything’: I’ve been diagnosed with dementia –I suddenly could not spell or write legibly.”

There are a number of steps to be taken to smooth the path ahead. First is to update your will and create a financial power of attorney. Don’t try to do this without the help of an experienced estate planning attorney.

This may also be the time to reassess your investment portfolio based on your new financial plan and risk tolerance.

An Advanced Healthcare Directive will inform doctors what actions you want them to take when you cannot make those decisions for yourself. You may want to list your wife as your healthcare proxy to carry out these decisions, but be mindful of the pressures put on a marriage when serious healthcare issues occur. Your spouse will need emotional support as well, and you’ll want to have a successor to your spouse for both the healthcare and POA documents.

Share your situation with trusted family and friends to create a team–a community of people who can provide support, part of which will be updating beneficiaries. Now would also be the time to record instructions for access to devices, documents, and even daily habits.

Long-term care insurance will help with expenses and should serve as an example for anyone reading this article. Policies should be purchased early in life when they are relatively affordable to help alleviate the financial burden of nursing home costs.

An estate planning attorney and financial advisor will help you take an accounting for assets, expenses, and projected long-term care costs. You’ll want a team approach to provide as much guidance as possible.

When to put your long-term care policies into payout status is a difficult decision. You’ll need to time this with a Medicaid plan, which your elder law estate planning attorney will be able to help with.

Now may also be the time to create a trust and divest assets to make it through the five-year Medicaid look-back, using your long-term care policy in the next five years.

There are exceptions to the five-year look-back rule for Medicaid eligibility. They include paying off debts, buying medical devices, or making home improvements to improve accessibility. However, eligibility depends upon income and other assets.

Some states, including Florida and New York, have rules exempting homes from assets calculated by Medicaid under certain circumstances. California eliminated an asset limit this year, making a person’s home automatically safe from Medicaid while they are living, but this does not mean it’s exempt from the Medicaid Estate Recovery Program.

Working with a team of professionals, including an estate planning attorney, and having the support of family and trusted friends will be important as time goes by and the disease progresses.

Reference: Morningstar (Feb. 25, 2024) “’I don’t want my wife to lose everything’: I’ve been diagnosed with dementia –I suddenly could not spell or write legibly”

Do You Need a Revocable or an Irrevocable Trust?

 

It’s not always obvious which type of trust is the best for an individual, says a recent article titled “Which is Best for Me: A Revocable or Irrevocable Trust?” from Westchester & Fairfield County Business Journals.

In a revocable living trust (RLT), the creator of the trust, known as the “grantor,” benefits from the trust and can be the sole Trustee. While living, the grantor/trustee has full control of the real estate property, bank accounts or investments placed in the trust. The grantor can also amend, modify and revoke the trust.

The goal of a revocable trust is mainly to avoid probate at death. Probate is the process of admitting your last will and testament in the court in the county where you lived to have your last will deemed legally valid. This is also when the court appoints the executor named in your last will. The executor then has access to the estate’s assets to pay bills and distribute funds to beneficiaries as named in the last will.

Probate can take six months to several years to complete, depending upon the complexity of the estate and the jurisdiction. Once the estate is probated, your estate is part of the public record.

A revocable living trust and the transfer of assets into the trust can accomplish everything a last will can. However, distribution of assets at the time of death remains private and the court is not involved. Distribution of assets takes place according to the instructions in the trust.

By comparison, irrevocable trusts are not easily revoked or changed. Most irrevocable trusts are used as a planning tool to transfer assets for the benefit of another person without making an outright gift, or for purposes of Medicaid or estate tax planning. An Irrevocable Medicaid Asset Protection Trust is used to allow an individual to protect their life savings and home from the cost of long-term care, while allowing the trust’s creator to continue to live in their home and benefit from income generated by assets transferred into the irrevocable trust.

The transfer of assets to a Medicaid Asset Protection trust starts a five-year penalty period for Nursing Home Medicaid and a two-and-a-half-year penalty period for Home Care Medicaid for applications filed after March 1, 2024. After the penalty (or “look back”) periods expire, the funds held by the trust are protected and are not considered countable assets for Medicaid.

An irrevocable trust can also be used to transfer assets for the benefit of a loved one, friend, child, or grandchild. Assets are not controlled by the beneficiaries but can be used by the trustee for the beneficiary’s health, education, maintenance and support.

Trusts are used to reduce the size of the taxable estate, to plan for the well-being of loved ones, and to protect the individual and couple if long-term care is needed. Speak with an estate planning attorney about which trust is best for your unique situation.

Reference: Westchester & Fairfield County Business Journals (Jan. 26, 2023) “Which is Best for Me: A Revocable or Irrevocable Trust?”

Medicaid Dilemma – Sell Or Keep Your Home? Mid- Michigan

The move to a nursing home is a big step. It is a major life transition for all family members. Your loved one will no longer be living in their own comfortable and familiar home. In addition, there is the issue regarding whether to retain or keep the home given the unpleasant knowledge that the home may ultimately pay for nursing home care either way.

This dilemma was the focus of a recent Q&A in ElderLawAnswers via the question, “Is It Better to Sell a Medicaid Recipient's Home Now or Wait Until Her Death?”

Essentially, by receiving Medicaid you make certain agreements as to costs and, in the case of nursing home care, the deal often hinges on that most valuable of all assets an elderly person is likely to own: their home. True, it is possible to liquidate and sell the house just to pay for the nursing home care. Although this often reduces or eliminates the costs for maintaining and insuring an empty house, this also means giving up Medicaid benefits until the sale proceeds have been expended for care.

On the other hand, Medicaid will remember your choice whether you sell the home and private pay until spend down or if you to continue receiving benefits in lieu of such sale. If a family member attempts to sell the house after the Medicaid recipient loved one passes, then Medicaid has a lien on the sale proceeds (limited to the amount Medicaid paid for the care of the Medicaid recipient). Either way, the home is subject to pay for nursing home care or to reimburse Medicaid for the cost of care.

The answer to the question posed to ElderLawAnswers hinges on more than a few factors. That said, in most cases Medicaid payments will be less than private pay, sometimes a great deal less. Consequently, the resulting lien may be less of a burden than selling the house outright!

Is there something else at work, however? Notably, is the family home worth keeping in the family? These are situations that require some delicacy.

Reference: ElderLawAnswers (updated October 17, 2013) “Is It Better to Sell a Medicaid Recipient's Home Now or Wait Until Her Death?”

For more information, see www.jerryreiflawyer.com

 

Medicaid Dilemma – Sell Or Keep Your Home? Saginaw, MI

The move to a nursing home is a big step. It is a major life transition for all family members. Your loved one will no longer be living in their own comfortable and familiar home. In addition, there is the issue regarding whether to retain or keep the home given the unpleasant knowledge that the home may ultimately pay for nursing home care either way. This dilemma was the focus of a recent Q&A in ElderLawAnswers via the question, “Is It Better to Sell a Medicaid Recipient's Home Now or Wait Until Her Death?” Essentially, by receiving Medicaid you make certain agreements as to costs and, in the case of nursing home care, the deal often hinges on that most valuable of all assets an elderly person is likely to own: their home. True, it is possible to liquidate and sell the house just to pay for the nursing home care. Although this often reduces or eliminates the costs for maintaining and insuring an empty house, this also means giving up Medicaid benefits until the sale proceeds have been expended for care. On the other hand, Medicaid will remember your choice whether you sell the home and private pay until spend down or if you to continue receiving benefits in lieu of such sale. If a family member attempts to sell the house after the Medicaid recipient loved one passes, then Medicaid has a lien on the sale proceeds (limited to the amount Medicaid paid for the care of the Medicaid recipient). Either way, the home is subject to pay for nursing home care or to reimburse Medicaid for the cost of care. The answer to the question posed to ElderLawAnswers hinges on more than a few factors. That said, in most cases Medicaid payments will be less than private pay, sometimes a great deal less. Consequently, the resulting lien may be less of a burden than selling the house outright! Is there something else at work, however? Notably, is the family home worth keeping in the family? These are situations that require some delicacy.

Reference: ElderLawAnswers (updated October 17, 2013) “Is It Better to Sell a Medicaid Recipient's Home Now or Wait Until Her Death?”

For more information, see www.jerryreiflawyer.com

 

When It Is Time To Return Home From The Nursing Home Mid-Michigan

When an elderly loved one falls, or is otherwise injured, it can spark a few rough transitions: car from home to hospital for care, and from hospital to nursing home to recover. However, one of the most difficult transitions can be returning home from the nursing home, even after your elderly loved one no longer needs to be there. Every state is different, but most states sponsor a special Medicaid program paid for by federal dollars that allows a senior to transition all the way back home to receive their care there. The program is called Money Follows the Person. For a firsthand account, read a recent Kaiser Health News article titled “Moving People Home After Nursing Home Stay Is Complicated.” It is the story of Dorothy Holmes who was able to return to her home with the help of Massachusetts Medicaid. Although the Holmes story and the details of the program highlighted are specific to Massachusetts, some 45 states have adopted similar such programs. The common key is that the programs identify Medicaid patients who are and have been in nursing homes for at least 90 days, but simply no longer need to be there. Consequently, these programs help them transition home and continue the Medicaid payments for their care. Not only is there a strong legal reason and ethical motive behind helping people return home, but it makes good sense in terms of dollars and cents, too. It is less expensive to provide home care than it is institutional care. Therefore, the program is a win-win for all involved. If you have a loved one in this position, then it is worth exploring your options. Transitioning home from a nursing home can be tricky, especially since you do not want to lose the nursing home benefits just because you do not need to be in a nursing home setting. This program, if available, may find your loved one on its own or it might be something to proactively contact directly. For that matter, too, it is worth noting that there may be other options for many patients. In many instances it is merely a matter of finding and figuring them out.

Reference: The Kaiser Health News (August 16, 2013) “Moving People Home After Nursing Home Stay Is Complicated”

For more information, see www.jerryreiflawyer.com

 

 

 

When It Is Time To Return Home From The Nursing Home

When an elderly loved one falls, or is otherwise injured, it can spark a few rough transitions: car from home to hospital for care, and from hospital to nursing home to recover. However, one of the most difficult transitions can be returning home from the nursing home, even after your elderly loved one no longer needs to be there. Every state is different, but most states sponsor a special Medicaid program paid for by federal dollars that allows a senior to transition all the way back home to receive their care there. The program is called Money Follows the Person. For a firsthand account, read a recent Kaiser Health News article titled “Moving People Home After Nursing Home Stay Is Complicated.” It is the story of Dorothy Holmes who was able to return to her home with the help of Massachusetts Medicaid. Although the Holmes story and the details of the program highlighted are specific to Massachusetts, some 45 states have adopted similar such programs. The common key is that the programs identify Medicaid patients who are and have been in nursing homes for at least 90 days, but simply no longer need to be there. Consequently, these programs help them transition home and continue the Medicaid payments for their care. Not only is there a strong legal reason and ethical motive behind helping people return home, but it makes good sense in terms of dollars and cents, too. It is less expensive to provide home care than it is institutional care. Therefore, the program is a win-win for all involved. If you have a loved one in this position, then it is worth exploring your options. Transitioning home from a nursing home can be tricky, especially since you do not want to lose the nursing home benefits just because you do not need to be in a nursing home setting. This program, if available, may find your loved one on its own or it might be something to proactively contact directly. For that matter, too, it is worth noting that there may be other options for many patients. In many instances it is merely a matter of finding and figuring them out.

Reference: The Kaiser Health News (August 16, 2013) “Moving People Home After Nursing Home Stay Is Complicated”

For more information, see www.jerryreiflawyer.com

 

 

When It Is Time To Return Home From The Nursing Home Saginaw, MI

When an elderly loved one falls, or is otherwise injured, it can spark a few rough transitions: car from home to hospital for care, and from hospital to nursing home to recover. However, one of the most difficult transitions can be returning home from the nursing home, even after your elderly loved one no longer needs to be there. Every state is different, but most states sponsor a special Medicaid program paid for by federal dollars that allows a senior to transition all the way back home to receive their care there. The program is called Money Follows the Person. For a firsthand account, read a recent Kaiser Health News article titled “Moving People Home After Nursing Home Stay Is Complicated.” It is the story of Dorothy Holmes who was able to return to her home with the help of Massachusetts Medicaid. Although the Holmes story and the details of the program highlighted are specific to Massachusetts, some 45 states have adopted similar such programs. The common key is that the programs identify Medicaid patients who are and have been in nursing homes for at least 90 days, but simply no longer need to be there. Consequently, these programs help them transition home and continue the Medicaid payments for their care. Not only is there a strong legal reason and ethical motive behind helping people return home, but it makes good sense in terms of dollars and cents, too. It is less expensive to provide home care than it is institutional care. Therefore, the program is a win-win for all involved. If you have a loved one in this position, then it is worth exploring your options. Transitioning home from a nursing home can be tricky, especially since you do not want to lose the nursing home benefits just because you do not need to be in a nursing home setting. This program, if available, may find your loved one on its own or it might be something to proactively contact directly. For that matter, too, it is worth noting that there may be other options for many patients. In many instances it is merely a matter of finding and figuring them out.

Reference: The Kaiser Health News (August 16, 2013) “Moving People Home After Nursing Home Stay Is Complicated”

For more information, see www.jerryreiflawyer.com

 

 

Right to Appeal Medicare Decisions for Hospice Patients

It is always disappointing when Medicare fails patients due to bureaucratic impasses. What’s worse is when the patient is already in hospice care and doesn’t know their rights. Much can be learned through the unfortunate case of Howard and Emily Back. Emily, now deceased, was a California hospice patient covered by Medicare. Howard appealed his wife’s lack of treatment through the court process. However, the court was quick to point out that there is an administrative appeals process through Medicare regarding its hospice care decisions. The entire case is detailed in a recent post in The New Old Age a blog through the New York Times, titled “Court: You Can Appeal Medicare Decisions About Hospice Services.” As this blog post notes, Emily was denied coverage for a pain medication while in hospice and in the last stages of life. Consequently, Howard paid for them out of pocket and later (after Emily’s passing) appealed to Medicare to cover the expenses for doctor-ordered medication. While initially told there was no such Medicare appeals process and was turned away, Howard learned otherwise. As Howard sought to set a precedent so future couples would not face the same roadblocks, the court has finally found and verified that a Medicare appeals process exists. In fact, one can appeal a Medicare decision regarding hospice services with a form labeled “CMS-1490S,” if the beneficiary believes they have been inappropriately denied services. Many Medicare beneficiaries may have experienced this same short fall when entering hospice care, but hopefully this case can shed light on the solutions that are available to patients and their families.

Reference: The New Old Age
blog of The New York Times
(September 7, 2012) “Court: You Can Appeal Medicare Decisions
About Hospice Services”

Will, or are, Adult Children Financially Responsible for Indigent Parents?

There has been a recent stir in Pennsylvania regarding one man being forced to financially care for his ailing mother. As a recent Pennsylvania appeals court case dramatizes, many of us with elderly loved ones receiving expensive care may just end up footing the bill. The case is Health Care & Retirement Corporation of America v. Pittas (Pa. Super. Ct., No. 536 EDA 2011, May 7, 2012), and the law at issue is a type of “filial responsibility law” on the books in as many as 30 states. Both the case and the law were addressed in a recent blog post titled “Son Liable for Mom's $93,000 Nursing Home Bill Under 'Filial Responsibility' Law.” If you haven’t yet heard of “filial responsibility,” it is the cornerstone of Confucius’ Analects, the Bible, and much of modern estate law. That noted, in this Pennsylvania case and the laws of numerous states, filial responsibility is a way to ensure someone comes up with the payment. In this Pennsylvania case, John Pittas’ mother entered a nursing home after a car crash and later left both the nursing home and the country once she recouped. She recovered well before Medicaid was able to process her application and assume payment for the nursing home. As a result, the nursing home saw $93,000 appear in its accounts receivable column. Rather than wait for Medicaid to consider payment, the nursing home filed a lawsuit against Mr. Pittas for his mother’s bill under the state’s filial responsibility law. Note: the nursing home didn’t care that there were a number of family members – other children and a spouse – and neither did the court. Why? Because under the doctrine of filial responsibility, the nursing home could simply pick its target to receive payment, and they chose John Pittas. While this horror story is specific to Pennsylvania law and its court system, the basic concepts of this law and its application are shared by many states. It is important to note, also, that this case only existed because Medicaid (or Medicare) hadn’t reviewed and approved the bill. If Medicaid (or Medicare) had paid the tab, then the no claim would have been established against John Pittas.

Reference: ElderLawAnswers.com (May 11, 2012) “Son Liable for Mom's $93,000 Nursing Home Bill Under 'Filial Responsibility' Law”

Medicaid Misunderstandings Costly

When an elderly person is ready for the nursing home, some families are entirely understanding, in agreement, and financially able. As a result, the transition happens smoothly. Unfortunately, for a far larger number of families and elderly persons, some trip to the hospital will happen in between and may even immediately precipitate the transition to nursing home care. If that’s the case, then there are important hospital and Medicare policies of which you should be forewarned. Enter “observation care” which can make for a big bill upfront and even far bigger ones down the line. According to a recent article in the Wall Street Journal, and their sources at the Medicare Rights Foundation, the number of “observation hours” has been steadily growing for years. Tragically, such observation hours count as “outpatient services,” even if the service lasts for several days (as it sometimes does with the elderly) and Medicare pays for inpatient and outpatients services in entirely different ways. As you likely know, Medicare Part A pays for inpatient bills, so those are usually taken care of, but Medicare part B is what takes care of outpatient services. And those services can add up to a far greater cost. It’s often vital to know the distinction between the two types of services from the hospital, and yet it’s also fairly difficult. Medicare advises to simply ask, but then there are certain documents such as the “Important Message from Medicare” which accompanies inpatient care, but not outpatient. Still, the hospital can switch with little to no notice. It’s actually even more important than the size of the immediate bill. Medicare will only pay for nursing home expenses if the person was admitted inpatient at a hospital for at least three days, excluding the discharge day. For so many families that’s the sole reason why it takes a hospital visit to arrange for the transition to nursing home care in the first place, but if you are put under observation or other so-called “outpatient” care, and without your notice, it can literally mean thousands of dollars out-of-pocket down the line. Bottom line: It all hinges on hospital practice and Medicare definitions.

Reference: The Wall Street Journal (February 5, 2012) “Check Hospital Tab”

Medicaid Misunderstandings Costly

When an elderly person is ready for the nursing home, some families are entirely understanding, in agreement, and financially able. As a result, the transition happens smoothly. Unfortunately, for a far larger number of families and elderly persons, some trip to the hospital will happen in between and may even immediately precipitate the transition to nursing home care. If that’s the case, then there are important hospital and Medicare policies of which you should be forewarned. Enter “observation care” which can make for a big bill upfront and even far bigger ones down the line. According to a recent article in the Wall Street Journal, and their sources at the Medicare Rights Foundation, the number of “observation hours” has been steadily growing for years. Tragically, such observation hours count as “outpatient services,” even if the service lasts for several days (as it sometimes does with the elderly) and Medicare pays for inpatient and outpatients services in entirely different ways. As you likely know, Medicare Part A pays for inpatient bills, so those are usually taken care of, but Medicare part B is what takes care of outpatient services. And those services can add up to a far greater cost. It’s often vital to know the distinction between the two types of services from the hospital, and yet it’s also fairly difficult. Medicare advises to simply ask, but then there are certain documents such as the “Important Message from Medicare” which accompanies inpatient care, but not outpatient. Still, the hospital can switch with little to no notice. It’s actually even more important than the size of the immediate bill. Medicare will only pay for nursing home expenses if the person was admitted inpatient at a hospital for at least three days, excluding the discharge day. For so many families that’s the sole reason why it takes a hospital visit to arrange for the transition to nursing home care in the first place, but if you are put under observation or other so-called “outpatient” care, and without your notice, it can literally mean thousands of dollars out-of-pocket down the line. Bottom line: It all hinges on hospital practice and Medicare definitions.

Reference: The Wall Street Journal (February 5, 2012) “Check Hospital Tab”

Simple Math Makes it Even More Difficult to Find a Nursing Home for Dad

Finding a nursing home for an ailing loved one, and a good nursing home that is affordable, is already a fairly difficult task. Unfortunately, it’s only likely to grow in difficulty as the number of elderly in need of care begins to peak. Unfortunately, too, there are some factors that you just might not think of. Like this: it is disproportionately difficult to find a nursing home for a male patient. This fact was recently pointed out over at the New Old Age Blog and I thought it was worth sharing. What is working against our male elderly loved ones is not much more than simple math, with a bit of Medicare policy work at play. As you are likely aware, women have a longer life span on average and therefore there are more women in nursing homes to begin with; that’s already a bottleneck based on population statistics. Then you throw in the fact that, under Medicare rules, most rooms in nursing homes are no more than “semi-private”, a delicate euphemism, and co-ed rooms aren’t allowed either. Thus, with more women already in such rooms the more that only women can be admitted into a facility. The math is fairly easy to figure out, but it’s a strange and unintended consequence nonetheless.

Reference: The New York Times The New Old Age Blog (January 30, 2011) “Fewer Beds For Men Entering Nursing Homes”

Hospice: Medicare and Medicaid Profit Center?

Healthcare lawsuits involving the various ways that the elderly can be taken advantage of turn up in the news on a daily basis these days. Why? Well, partly for political reasons and partly for the sheer number of egregious situations that have been created. As an informed citizen/taxpayer, it’s important to think about and understand the big picture. However, as a family member, it’s vitally important to remember them for the sake of your elderly loved ones. A new legal battle has begun to churn, as recently reported at Kaiser Health News. Yet another healthcare company is being accused of taking advantage of the elderly and their families to draw the greatest yield from Medicare and Medicaid coffers. Here a large company, operating across several states, is accused of actively recruiting and cycling patients through nursing home and hospice services. Such companies are compensated by Medicare based on the length of time patients receive care. Medicare picks up the entire nursing home tab for the first 20 days (after that the patient has to contribute), and conversely, if a patient spends too much time in hospice care, Medicare demands their money back since the patient was clearly admitted to end-of-life care under false pretenses. Here’s the rub: If you cycle between nursing home regimens and then jump into hospice care as early as possible (but not too early), Medicare will pick up the entire tab and for the maximum amounts, and that’s the issue. The legal battles, as well as the politics and economics aside, stories like these also demand a certain amount of attention since they could directly impact your family. If you have a loved one in need of nursing home and/or hospice care, it’s important that they find and receive that care… and that they not be abused by an uncaring system.

Reference: Kaiser Health News (January 4, 2012) “Lawsuit Accuses Company of Fraudulently Cycling Patients through Nursing Homes, Hospice Care.”

Revised Government Website Makes Nursing Home Comparisons Easier

If you and your family are screening nursing homes for a loved one, then you already know what a daunting process it can be. It may just be a little easier now with the federal government’s newly-revised Nursing Home Compare web service. As Forbes recently pointed out, the comparison tool offered through Medicare.gov has been simplified and expanded. Under advisement from the Centers for Medicare and Medicaid Services, the old criteria of 17 points has been replaced with a new set of 21 points based on specific issues like infections, falls, general well-being, and pressure ulcers – the very issues that residents and families may deal with directly once admitted to the facility. The idea is to make it easier for families to research their area and get an accurate understanding of quality and performance in possible nursing homes for their loved ones. Hopefully it can help you and your family as well.

Reference: Forbes (August 1, 2011) “Feds Update Website to Help Families Choose Nursing Home”

ELDER LAW

After four years or so the housing market is still idling at terribly low levels, but even if we’re all feeling it, it’s our nation’s seniors that seem to be uniquely hurt. The problem has been growing over those years, and I’ve written about it here, but the Kaiser Health News recently put out an article taking stock of the situation and new reactions from assisted-living and nursing home facilities. With housing prices and market demand so low, seniors simply can’t get up and enter into a facility, even if they need it. For many seniors, the plan had always been to use the equity in their home as the investment to keep them afloat in retirement but the value in those homes simply dropped in 2008. Even if you can forget how much the house was worth in 2007, before the crash, it’s simply not easy to sell a house these days and they tend to just sit on the market for years, or fetch too little money to make the sale possible. It’s causing seniors to wait that much longer before they can enter into a facility, and that’s time on top of however long it took them to finally make the decision to give up the home in the first place. It isn’t good for finances, and it is especially bad for health. The facilities themselves aren’t happy with the trend and some are working to help ease the transition. In certain facilities across the parts of the country that were hit hardest by the housing bubble the occupancy rate has dropped as much as 10%, with nursing homes and continuing care facilities hit the hardest and assisted-living only slightly better. In response, some of those facilities have begun incentive programs from simple real estate education classes to more fluid contracts that allow the entrance costs of the facility (usually something like the cost of a home itself) to be paid whenever the house is sold. One management company, Brookdale Senior Living, has even begun offering to buy seniors’ houses at pre-determined prices if they do not sell within a set amount of time on the market. For you or a loved one it means that there are a number of possibilities to plan for. Those that can’t quite get out of their homes might consider bringing the care to them through in-home care services or perhaps living with loved ones. Still, if a facility is necessary then there may be options out there, depending on the facility and your part of the country, and it might be possible to work with the administration; chances are you’re not the only one with the problem and they may offer a solution.

Reference:  Kaiser Health News (August 21, 2011) “Housing Bust Derails Some Seniors’ Assisted-Living Care”

Elder Law – Promissory Notes May Not Be So Promising

As some of you may know, the guidelines surrounding eligibility for Medicare or Medicaid can be fairly rigid. They exist to ensure people aren’t gaming the program, but sometimes even who aren’t gaming the program (and have legitimate need) can unintentionally run afoul of the rules. For another example of what not to do, ElderLawAnswers recently analyzed the case of Jackson v. Director of Office of Medicaid (Mass. App. Ct., No. 10P706, July 19, 2011). When Raymond Duclos was entering a nursing home, his wife was making transfers to their children: $176,000 to their daughter, Susan; $11,787.83 to their son, Raymond, Jr.; and $3,000 to their other son, Michael. No good story about Medicare/Medicaid eligibility begins with the word, “transfer.” Why? Because of the look-back period for determining eligibility. In the case of the Duclos family, as opposed to these direct transfers being made without any value exchanged in return, each transfer was made in exchange for promissory notes. In fact, the largest note was an immediate annuity. Nevertheless, in the end this was considered a distinction without a difference. The state (Massachusetts) denied the claim and the appeals court upheld the state’s decision. The court’s basis: Those promissory notes weren’t “actuarially sound.” For one thing, there was no proof of Mrs. Duclos life expectancy at the time she transferred the assets and the smaller promissory notes from the sons did not prohibit cancellation at the death of the lender. This “cancellation” made the transaction appear as if there was little intention of actually fulfilling the notes. Furthermore, the larger note from the daughter was turned into an annuity, but it did not name the state as a “remainder” beneficiary. Each transfer, then, was a disqualifying one.

Reference: ElderLawAnswers.com (August 1, 2011) “Transfers to Children of Medicaid Applicant in Exchange for Promissory Notes Not Actuarially Sound”

ELDER LAW / LONG TERM CARE

There are some things you just don’t haggle about but, perhaps contrary to what you would guess, it turns out that long-term care isn’t one of those things. Long-term care is expensive, to say the least, but as explained in a recent article in SmartMoney, there are some expenses that may be negotiable. Nursing homes usually will not negotiate fees, but you may be able to negotiate with assisted-living facilities and home health care agencies. Start by arming yourself with information. You can look up local costs at Genworth.com/costofcare on a map prepared by Genworth Financial, one of the country’s largest long-term care insurers. This can help you compare costs for various types of care in your area. MetLife offers another source of area-specific information at MatureMarketInstitute.com (click on “Research” then “2010 Market Survey of Long-Term Care Costs.”) Other resources include “Medicare and Home Health Care” which describes the home health benefits that Medicare covers (available at Medicare.gov) and the United Hospital fund’s “Next Step in Care” website for family caregivers. Other bargaining strategies to keep in mind: • As if there is a waiting list at the facility. If not, you may have more room to negotiate. • While nursing homes generally do not discount rates, you may be able to negotiate for extra amenities. • If a home-care agency has rates at the higher end of your local market, you may be able to get a lower rate if you let them know you are interviewing several agencies and taking cost into consideration. • If you hire a home-care agency for a significant number of weekday hours, that agency may be willing to discount any extra fees they charge for weekend work. You can learn more long-term care options on the Long-Term Care Practice Center at our website. While you’re there, be sure to subscribe to our free monthly e-newsletter.

From SmartMoney (May 28, 2011) “Driving a Bargain for Long-Term Care”

 

Uncovering Dementia/Alzheimer’s Cover-ups

Dementia and Alzheimer’s are becoming increasingly common, but even if we are beginning to become more and more aware of how to spot them, it doesn’t make it any easier. Many a reader will be familiar with the terrible uncertainty and concern over their elderly parent’s thinking. Fortunately, Carolyn Rosenblatt of Forbes has more advice to give in her recent article. Among the many dangers to keep in mind when an elderly loved one starts “slipping” it that they may begin “hiding” it. For one thing, it is not something with which any senior looks forward to acknowledging, even if they are aware of some telltale symptoms. It is human nature. We all compensate or distract when there is something to hide, both from ourselves and from others. But when something like Alzheimer’s is at stake, it can be all the more difficult to get past and harmful to hide. Indeed, since there is no actual test for dementia or Alzheimer’s, it is possible that a doctor will be unable to diagnose those conditions. It is important, therefore, to observe how your loved one functions. Keep a keen eye on them and know what you are seeing, for their own sake. The original article has more advice and anecdotes to offer, but Ms. Rosenblatt sums up the steps in four points. As soon as you begin to worry you must, first, persuade your loved one to visit a doctor, and a specialist if possible, to detect it early. Second, you must secure their estate planning documents while they have legal capacity to know and understand what they are doing. Third, you must secure proper care for them. Fourth and last, you have to discuss the circumstances openly with all family members, so all may be aware of the circumstances and can work together to protect your loved one.

Reference: Forbes (August 11, 2011) “The Danger of Your Aging Parent Covering Up Dementia”

Government Cuts Affect Nursing Homes

The last few months have been a wild ride on multiple levels, to include concerns over Medicare and the “debt crisis.” While many more challenges lie ahead in terms of budget cuts, some cuts already have been made under the radar screen. Several you should know about actually go into effect this fall, as reported in a recent SmartMoney article. According to SmartMoney, nursing home residents could face higher costs or reduced care once these cuts kick in. Background On July 29, The Centers for Medicare and Medicaid Services (CMS) decided and announced that they would be compensating for last year’s $4 billion shortfall by cutting reimbursement rates to nursing homes by 11.1%. In real terms, the shortfall is going to reduce government reimbursements to nursing homes. In 2010, nursing homes increased charges on residents by an average of 5%. Bad news: These reduced government reimbursements likely will trigger even higher nursing home costs for residents beginning this fall. Alternatively, it might trigger a reduction in services to nursing home residents. Either way, the forecast is not pleasant. Perhaps I am wrong. Perhaps nursing home residents won’t see increases in costs or decreases in services. After all, the CMS actually justifies the 11.1% cut by pointing out that it is simply a more accurate reimbursement amount based on a government report indicating that Medicare has been overpaying. In fact, a spokesperson for the CMS maintains, “We do not believe that nursing homes will respond to the payment changes by decreasing the quality of care furnished to patients. However, we intend to carefully monitor changes in utilization and staffing patterns to ensure that patients continue to receive high quality care.” Still, the nursing home industry appears to be monitoring the situation with caution. Bottom line: If you have a loved one in a nursing home, then you, too, should take notice.

Reference: SmartMoney (August 18, 2011) “Medicare Cuts Could Up Nursing Home Costs”

Be Sure Your Life Insurance Is “Life Insurance”

Not all life insurance is the same, and that’s not just an old sales trick to up-sell a client. In the eyes of Medicare and Medicaid, not all life insurance actually is “life insurance” – and that can be a reason to deny benefits. Consider the case of Lind v. Maxwell-Jolly (Cal. Ct. App., No. C061912, July 28, 2012) (unpublished), as discussed here on ElderLawAnswers.com, where an endowment life insurance contract became an impediment to Medicaid benefits. Mary Lind, a nursing home resident, applied for Medicaid benefits and then purchased a "Single Premium Pure Endowment Life Insurance Contract" for $92,000. Here’s how the contract works: If she were still alive at the contract maturity date five years hence, then Ms. Lind would be repaid her premiums plus dividends. Of course, the state and two appeals courts weren’t buying it. Since the contract specifies that it will repay Ms. Lind in her lifetime, it is not life insurance. Further, the contact didn’t even specify the amounts to be paid out to beneficiaries upon her death. Accordingly, the court held that the contract is more akin to a legal trust and, therefore, the funds invested in it are available funds precluding her from Medicaid. Clearly, then, not all “life insurance” is life insurance. As in all things financial, and legal, look before you leap.

Reference: ElderLawAnswers.com (August 1, 2011) “Endowment Life Insurance Contract Is Available Asset for Medicaid Availability Purposes”

Revised Government Website Makes Nursing Home Comparisons Easier

If you and your family are screening nursing homes for a loved one, then you already know what a daunting process it can be. It may just be a little easier now with the federal government’s newly-revised Nursing Home Compare web service. As Forbes recently pointed out, the comparison tool offered through Medicare.gov has been simplified and expanded. Under advisement from the Centers for Medicare and Medicaid Services, the old criteria of 17 points has been replaced with a new set of 21 points based on specific issues like infections, falls, general well-being, and pressure ulcers – the very issues that residents and families may deal with directly once admitted to the facility. The idea is to make it easier for families to research their area and get an accurate understanding of quality and performance in possible nursing homes for their loved ones. Hopefully it can help you and your family as well.

Reference: Forbes (August 1, 2011) “Feds Update Website to Help Families Choose Nursing Home”

ELDER LAW / ELDER CARE / ESTATE PLANNING

Sometimes the biggest mistakes are also the most mundane, and those can make for an awful headache for even the best of us. The maxim proves itself once again in the case of Anthony Olivo, and Forbes’s recent re-telling of that story, where even a tax lawyer neglected proper record keeping of his services to his loved ones – both care-giving and estate-planning services – and the IRS had little sympathy. Anthony had been a tax lawyer for nearly two decades, even opening his own practice, until the needs of his aging parents grew too great. Anthony turned to become a full-time, live-in caregiver for his parents from 1994-2003, receiving negligible income from his practice and working long, hard hours just trying to support everything. He even become the estate-planning attorney for his parents’ estates and in this capacity brought the matter of deductions before the tax court in what became Estate of Olivo v. Commisioner. Anthony was hoping to deduct his services from his mother’s estate in three payments: $55,000 in accountant and attorney fees Anthony claimed, $44,200 in administrators commissions fees paid to him, and finally a whopping $1.24 million for care services over the 9 year period. The deductions were denied. The tax court didn’t doubt that services had been rendered, and admirable ones at that, as far as care was concerned. After all, without his care it would have taken round-the-clock care from nurses to support his parents. Nevertheless, the court found that there simply weren’t enough records. The family had never formally established that Anthony’s care services were intended to be paid for as there was no agreement and no paperwork. There wasn’t even an estimate of the value of his services in the first place since he is not a professional care-giver. Of course, he is a professional tax lawyer but even those services were contested by the court. He didn’t keep records, invoices, or provide solid values there either aside from sparing notes and estimated hours. In fact, there was even some question as to whether Anthony could bill the estate at all for legal services, much less deduct them from the estate. It simply wasn’t enough on all counts. The bottom line is that the minutia of documentation and burden formal arrangements are absolutely necessary. They are in business and they are even within the family, so far as the IRS is concerned.

Reference: Forbes (July 18, 2011) “Tax Lawyer Son’s Help, Priceless?”

ELDER LAW / MEDICAID & LONG-TERM CARE

It’s no secret that state (and federal) budgets are severely stressed. While lawmakers look for revenue and cost-cutting measures, Medicaid services are coming under scrutiny. Managed care plans are becoming increasingly popular as one way to cut Medicaid costs. Currently six states require the elderly and disabled who need long-term care to enroll in a managed care plan. At least 10 other states are reportedly considering the same, according to a recent article from The Kaiser Health News. Traditionally, states pay Medicaid providers directly for individual services. Under managed care, states pay health insurers a fixed monthly fee for each Medicaid patient. The lump sum is used for all the patient’s costs, including physician and nursing home care. Managed care companies say they can help states save money by keeping Medicaid patients who need long-term care at home whenever possible. Tennessee pays its Medicaid health plans an average of $4,400 per member per month. AARP and some other advocates caution that managed care plans could make it harder for patients to get the services they need. The nursing home industry, which currently gets about two-thirds of its revenues from Medicaid, is complaining as well. But state officials around the country say they have little choice but to make more aggressive use of managed care, especially for long-term care patients who account for more than two-thirds of all Medicaid spending.

ELDER LAW / ELDER CARE

When the time comes, as does for most of us, that we need assistance in our daily living, the unfortunate fact is that too many of us end up in nursing homes – not because we need constant nursing care, but because there no other good options. A provision of the new Patient Protection and Affordable Care Act may help change that. According to a recent article in the LA times, the most ambitious part of the Act, as it relates to long-term care is the Community Living Assistance Services and Supports Act, or CLASS – a voluntary, consumer-financed insurance plan to cover long-term care expenses. CLASS, scheduled to go into effect in January of 2014, is an insurance plan, similar to those currently available in the private market, with a few notable distinctions. First, the program will be administered by the government. Second, any working adult age 18 or older will be able to enroll, regardless of any pre-existing medical condition, and the benefits will be good for as long as someone needs long-term care. Perhaps even more importantly, the government plan will offer benefits that could be used for a wide variety of expenses, including hiring a home care provider and doing home modifications. Take note that Senators June Thune and Lindsey Graham on April 14 of this year introduced the Repeal the CLASS Entitlement Act. Nonetheless, the CLASS Act highlights a widespread move in the country to shift resources from nursing home-based care to home-based care as a viable and far less expensive option. The cost of nursing home care ranges from about $40,000 to $85,000 a year, according to a recent report by John Hancock Financial Services Inc. The average cost of a home health aide, on the other hand, is about $37,000 a year. The most precious detail, of course, is that the patient can remain at home. You can learn more about long term care options in the Long Term Care Practice Center on our website, or read the May issue of our monthly e-newsletter, Elder Law Elements. Reference: The Los Angeles Times (June 19, 2011) “Helping Seniors Live at Home Longer”

ELDER LAW / ELDER CARE

As we and our loved ones age, we put a lot of effort (and resources) into making sure a hospital bed is available when needed. New research shows that while that hospital bed may sometimes be necessary, getting up and out of it as quickly as possible is key to recovery. As it turns out, the hospital bed is a huge contributor to old-age infirmity, as studies prove that bed-rest and immobility slow healing and stunt recuperation. A recent New York Times column, “The New Old Age” covered the results of a study conducted by University of Texas physician, Dr. Steve Fisher. Using a step activity monitor (a fancy pedometer), the Texas team found that just an extra 600 steps a day, or about 12 total minutes of slow walking, could significantly shorten hospital stays. Although Dr. Fisher calls for further study, he still offered his optimism, “It’s encouraging to think that small changes can be of broad benefit.” Though physicians may have advised nursing staff to help the patient ambulate, nurses and aides frequently have little time for these tasks and the patient may not get up and walk enough. Dr. Fisher recommends that family members take the initiative and ask about getting a physical therapist involved early on and about whether the family is permitted to help the patient walk. One obstacle to an aggressive mobility plan is the risk of falls. Not only are they a valid concern for you and your loved one, but also for the hospital. Since 2008, a fall is grounds for Medicare to refuse to reimburse a hospital for a patient’s care. So, it’s understandable that the hospital might be overly cautious about families helping elderly patients walk. Nonetheless, Dr. Fisher still encourages families to look for safe ways to help elderly patients get up and walk. While falls can indeed be dangerous, the consequences of prolonged immobility may be worse. Reference: The New York Times (June 8, 2011): Escaping from the Hospital Bed

ELDER LAW / ELDER CARE

Caring for an aging loved one can be emotionally and financially difficult. Unfortunately, the ordeal is frequently exacerbated by healthcare problems ranging from issues with the physician to end-of-life or funeral decisions. Having recently dealt with the loss of her father, writer Jennifer Openshaw of The Wall Street Journal offers five tips on caring for elderly loved ones • Fire Your Doctor. Well, you may not have to fire your doctor, but realize that you can – and maybe you should. Many people don’t realize they can just fire a doctor who is not providing the care and attention their loved one needs. • Likewise you can fire your home-care provider. Doctors often recommend a home-care provider, and even if you respect the doctor that doesn’t mean that you have to follow their advice or stick with a provider that isn’t working out for you. • Make End-of-Life Plans Now. It’s very important – for the sake of those around you – to discuss the many details that you’d typically never think about, from life support to feeding tubes. For help thinking through these important decisions now, Florida-based Aging with Dignity has a document titled “Five Wishes” that covers related concerns, issues and questions. • Shop Funeral Costs. Yes, this is a difficult thing to do, but companies know there are profits to be made amid your grief, and prices (for very similar services) can vary widely from one provider to another. All the more reason to talk these matters through in advance, when your judgment is not clouded by grief. • Review Long-Term Care Insurance. Review your policy’s stipulations for waiting periods, maximum benefit amounts, etc. A 90-day waiting period is fairly standard, but can be quite traumatic when you’re struggling through it. Knowing in advance what will and will not be covered can make these transitions less traumatic on the family. To learn more about long-term care, visit the Long Term Care Practice Center on our website. While you’re there, be sure to sign up for our free monthly e-newsletter to stay informed on important topics like these. Link: http://www.marketwatch.com/story/five-tips-on-caring-for-elderly-loved-ones-2011-05-12?pagenumber=1 From MarketWatch (May 12, 2011) “Five tips on caring for elderly loved ones”

ELDER LAW / NURSING HOME CARE

Choosing the right nursing home for a loved one is never an easy task. It can be both emotionally draining and logistically daunting. Still, this legwork is vital, especially in light of recent research reported in The New England Journal of Medicine (NEJM) and here in the New York Times Blogs – about the ineffectiveness of nursing home litigation and legal standards. As the NY Times points out, “We tend to think of a lawsuit as a kind of slingshot allowing the little guy to take on a daunting Goliath – a large nursing home chain, say. If you can’t persuade a facility to provide proper care, if your elderly relative has suffered unnecessarily as a result, then you can sue.” We also hope that the risk of such lawsuits serve a preventive purpose, ensuring that nursing home provide the type of attentive care for our loved ones that they should. If this were true, researchers suggest that we ought to see lawsuits piling up against the worst institutions, and that the better ones would see significantly fewer lawsuits. Unfortunately, the finding of the NEJM indicates that there is not a significant relationship between the quality of the nursing home (as determined by Medicare and Medicaid surveys) and the risk that one or more lawsuits will be claimed against that nursing home (as determined statistically from records.) “Good” nursing homes stand a 40 percent chance of being sued, while the worst institutions only stood only a slightly greater chance at 47 percent. “It seems a fairly modest difference between the very best and the very worst facilities,” concluded Dr. David Stevenson, a health policy analyst at Harvard Medical School and an author of the analysis. The NEJM goes on to conclude that “The results of this study raise questions about the capacity of tort litigation to provide incentives for improving the quality and safety of nursing home care. It is far from clear that superior performance will be rewarded with substantially lower risks of being sued.” If this is indeed true, there are broad implications for the nursing home industry and the agencies charged with overseeing it. But what does it mean to you? It means that in-depth research is key! It might not be enough that there are laws in place to enforce high standards, or that the threat of a lawsuit will force institutions to improve their performance. No, you must do your homework when selecting a nursing home for a loved one. And, as one writer commented on the NY Times blog, if you have a loved one in a nursing home, you are well-advised to be polite but pushy, persistent and present. You can learn more about options for nursing home care in the Long-Term Care Practice Center on our website.

Link: http://newoldage.blogs.nytimes.com/2011/04/25/lawsuits-dont-lead-to-better-nursing-home-care/

 From The New York Times Online (April 25, 2011) “Lawsuits Don’t Lead to Better Nursing Home Care”