Suppose a Medicaid applicant inherits a home which she owns jointly with a sibling. If the sibling refuses to sell the home, the home is an inaccessible resource. However, after the applicant gets Medicaid, one half the "net" income must be used on the home. For these purposes, "net" income is defined as income from the home without paper deductions such as depreciation. I am assuming of course that the home is rental property.
Therefore, the home will not prevent Medicaid. However, upon the death of the applicant the lien will not be enforced immediately as the sister is a family member - N.J.A.C. 10:49-14.1(g). However, after the sister dies or moves out of the home, the lien is enforced to the extent of the interest of the Medicaid recipient.
This is a unique example of protection of a second home and delay of the lien.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2012, Post 197
Monday, May 21, 2012
Monday, May 14, 2012
What Comes First the Chicken or the Egg (i.e. Or Other Advisors)
It has been suggested that counsel has an affirmative obligation to advise a potential donor of the alternative of purchasing long-term care insurance before undertaking such plan (see NAELA News, Volume 7, No. 4, July 1995, "Long-Term Care Insurance - A Necessary Option to Consider", by Barreira, Brian E.). Also, the elder law attorney may be presented with a situation in which it has not been determined where a potential client will reside (i.e. home care, assisted living or nursing home). Therefore, I have often suggested that before clients see me, they should consult with a geriatric care manager.
It is the obligation of any attorney to give the best advice available. However, that advice may not be possible before the client sees other experts (i.e. see above). The ideal situation, if a determination has not been made as to where a person should reside, is the individual should meet with a geriatric care manager and the attorney so that the legal and residential requirements can be discussed together.
The answer to the "chicken or the egg" quandary, is that the chicken (long-term care expert, geriatric care manager) comes first. That is, the elder law attorney should not be overly aggressive about planning, when all information is not available.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2012, Post 196
Wednesday, May 9, 2012
Determination of the Community Spouse Resource Allowance
The statute refers to the date of determination of the community spouse resource allowance (C.S.R.A.) as the first day of the first month of institutionalization. The date of institutionalization is actually the earlier of the first day of the first month of (i) entering a nursing home, (ii) entering a hospital or (iii) receiving home care.
A thirty day break in any of the above requires a re-determination.
Recent Medicaid Communications have indicated that if during the time of the application process before receipt of Medicaid there is an increase in the C.S.R.A., the applicant gets the benefit of the increase.
Many of the blogs have indicated that often the state is more restrictive than the federal statute, and therefore, violates federal pre-emption. In this instance, where one receives an increase in the C.S.R.A., the state is more lenient and it is an opportunity that should not be missed.
Also, as indicated in many blogs, after determination of Medicaid, the C.S.R.A. is not limited. This provides many planning opportunities, which have been discussed in previous blogs.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2012, Post 195
A thirty day break in any of the above requires a re-determination.
Recent Medicaid Communications have indicated that if during the time of the application process before receipt of Medicaid there is an increase in the C.S.R.A., the applicant gets the benefit of the increase.
Many of the blogs have indicated that often the state is more restrictive than the federal statute, and therefore, violates federal pre-emption. In this instance, where one receives an increase in the C.S.R.A., the state is more lenient and it is an opportunity that should not be missed.
Also, as indicated in many blogs, after determination of Medicaid, the C.S.R.A. is not limited. This provides many planning opportunities, which have been discussed in previous blogs.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2012, Post 195
Monday, April 30, 2012
A House is Not a Home
As we are all aware, a primary residence of an individual's home is exempt if resided in by the spouse. The leading case on the issue of primary residence is In Re Dorrance's Estate 309 Pa 151, 163 A. 303 cert. denied, 288 U.S. 617 (1932).
The In Re Dorrance's Estate case (which involves the Campbell family) held that your primary residence is a place where you can form domiciliary intent and you have a presence. Since domiciliary intent is subjective, it must be determined by objective factors such as where you live, vote, own a car, spend your time, etc. This is in contrast to a residence which is at a place where you may have a home.
Relating to this are the two cases cited in Post 171 that an individual may qualify for Medicaid the moment they are in a jurisdiction. Neither residence nor domicile is required.
However, to determine an individual's primary domicile for exemption of real estate purposes, the guiding case is In Re Dorrance's Estate, cited above.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2012, Post 194
Tuesday, April 24, 2012
Attributes of an Elder Law Attorney
An elder law attorney is unique in the fact that the individual must be sympathetic and understanding to the client.
Although any educational background will be sufficient, it is my opinion that some courses in psychology would be helpful. Understanding a client or being too officious might render the meeting a nullity.
However, understanding a client and explaining the rules of Medicaid with an understanding of psychology would be helpful.
In fact, New York University has a joint program of law and clinical social work. Such a background would be invaluable and any individual with such degree would be the ideal elder law attorney.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2012, Post 193
Although any educational background will be sufficient, it is my opinion that some courses in psychology would be helpful. Understanding a client or being too officious might render the meeting a nullity.
However, understanding a client and explaining the rules of Medicaid with an understanding of psychology would be helpful.
In fact, New York University has a joint program of law and clinical social work. Such a background would be invaluable and any individual with such degree would be the ideal elder law attorney.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2012, Post 193
Monday, April 16, 2012
What is a Trust?
A trust is defined to include any legal instrument of device that is similar to a trust but includes an annuity only to such extent and in such manner as Secretary specifies - 42 U.S.C. 1396 p(d)(6). Transmittal No. 64 describes how annuities are to be treated under the trust/transfer provisions (Section 3258.9B). Statute provides no guidance as to meaning of words "similar to a trust". HCFA has indicated in Transmittal No. 64 that the essence of this definition is a fiduciary relationship and includes entities such as escrow accounts, investment accounts and pension funds.
Therefore, a trust is any fiduciary relationship. Examples are escrow accounts, investment accounts, pensions funds and partnership agreements.
Many attorneys are drafting general partnership agreements, with a general partner making distributions to the other partners. The theory of the general partnership is a partnership is not an available resource. However, under the trust rules, the general partner has a fiduciary relationship to the other partners and any distributions by the general partner to the other partners is subject to the transfer rules. Therefore, since the general partnership is a trust, the result would be that the transfer by the general partner would be deemed a transfer subject to the five year rule (for example, for such treatment, see Post 184.)
It is noted that the trust rules do not apply to trusts established on or before October 10, 1993. However, Transmittal No. 64 indicates the earliest applicable date should be October 1, 1993.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2012, Post 192
Therefore, a trust is any fiduciary relationship. Examples are escrow accounts, investment accounts, pensions funds and partnership agreements.
Many attorneys are drafting general partnership agreements, with a general partner making distributions to the other partners. The theory of the general partnership is a partnership is not an available resource. However, under the trust rules, the general partner has a fiduciary relationship to the other partners and any distributions by the general partner to the other partners is subject to the transfer rules. Therefore, since the general partnership is a trust, the result would be that the transfer by the general partner would be deemed a transfer subject to the five year rule (for example, for such treatment, see Post 184.)
It is noted that the trust rules do not apply to trusts established on or before October 10, 1993. However, Transmittal No. 64 indicates the earliest applicable date should be October 1, 1993.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2012, Post 192
Monday, April 2, 2012
History of the MMNA
The MMNA (Minimum Monthly Needs Allowance) has a long history and it is worthwhile to discuss its derivation. Approximately 20 years ago, I had a case that went to administrative hearing known as Cleary v. Waltman.
The MMNA is the shelter cost of a community spouse if a primary residence is owned by a community spouse and an applicant is on Medicaid.
The query at the time was can you shift income from the applicant to make up the MMNA or must you shift principal that generates sufficient income to make up the MMNA. Mr. Cleary decided to take the course that you can shift principal and increase the community spouse resource allowance. The Supreme Court of the United States denied cert. and the District Court held that you must shift income.
This is no longer an issue as the new law provides for the "income first" rule which requires that the applicant's income be shifted first to make up the MMNA and if more income is needed (unlikely), then assets can be shifted.
Various blogs have indicated that in addition to the MMNA, the community spouse can keep income to pay Medigap insurance and $35 a month.
Therefore, it is generally prudent not to make the nursing home the representative payee, but reimburse to the nursing home the balance of social security and pension after keeping the MMNA, Medigap insurance and $35 a month.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2012, Post 191
The MMNA is the shelter cost of a community spouse if a primary residence is owned by a community spouse and an applicant is on Medicaid.
The query at the time was can you shift income from the applicant to make up the MMNA or must you shift principal that generates sufficient income to make up the MMNA. Mr. Cleary decided to take the course that you can shift principal and increase the community spouse resource allowance. The Supreme Court of the United States denied cert. and the District Court held that you must shift income.
This is no longer an issue as the new law provides for the "income first" rule which requires that the applicant's income be shifted first to make up the MMNA and if more income is needed (unlikely), then assets can be shifted.
Various blogs have indicated that in addition to the MMNA, the community spouse can keep income to pay Medigap insurance and $35 a month.
Therefore, it is generally prudent not to make the nursing home the representative payee, but reimburse to the nursing home the balance of social security and pension after keeping the MMNA, Medigap insurance and $35 a month.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2012, Post 191
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