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Wednesday, August 29, 2012
Tuesday, August 21, 2012
Review of Inaccessible Resources
In various posts, I have discussed the concept of inaccessible resources pursuant to N.J.A.C. 10:71-4.4(b)(6). Inaccessible resources are treated as excludable resources for Medicaid eligibility purposes.
The theory is that a countable resource is only such that can be converted to monies to pay nursing home costs.
Some examples of inaccessible resources are as follows:
1. Real estate owned by the applicant with someone else who refuses to sell. The same applies to property in probate, that is, if the community spouse becomes a beneficiary of an estate, the mere fact that the estate is in probate does not cause the inheritance to be a countable resource. It is only a resource if it is distributed.
2. Real estate which doesn't meet the zoning requirements may not be convertible into cash.
3. Monies owed to the community spouse if the payer is bankrupt should not be counted as an accessible resource.
However, resources that can be received only if a penalty is incurred, such as an IRA, are countable resources.
An arcane inaccessible resource arguably would be stocks subject to a buy sell agreement, which I discussed in post 172. The theory is that such resource is not convertible to cash since it is subject to a buy sell agreement. This argument once worked in an administrative hearing in Hunterdon county. I believe the argument is incorrect since the co-holder may not want to buy the stock if someone leaves during their lifetime. If they do not want to buy the stock, the stock may be offered to a third party and therefore may be countable as cash.
There are a myriad of examples of inaccessible resources. The purpose of this article is to provide a summary of the concepts.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© August 2012, Post 209
The theory is that a countable resource is only such that can be converted to monies to pay nursing home costs.
Some examples of inaccessible resources are as follows:
1. Real estate owned by the applicant with someone else who refuses to sell. The same applies to property in probate, that is, if the community spouse becomes a beneficiary of an estate, the mere fact that the estate is in probate does not cause the inheritance to be a countable resource. It is only a resource if it is distributed.
2. Real estate which doesn't meet the zoning requirements may not be convertible into cash.
3. Monies owed to the community spouse if the payer is bankrupt should not be counted as an accessible resource.
However, resources that can be received only if a penalty is incurred, such as an IRA, are countable resources.
An arcane inaccessible resource arguably would be stocks subject to a buy sell agreement, which I discussed in post 172. The theory is that such resource is not convertible to cash since it is subject to a buy sell agreement. This argument once worked in an administrative hearing in Hunterdon county. I believe the argument is incorrect since the co-holder may not want to buy the stock if someone leaves during their lifetime. If they do not want to buy the stock, the stock may be offered to a third party and therefore may be countable as cash.
There are a myriad of examples of inaccessible resources. The purpose of this article is to provide a summary of the concepts.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© August 2012, Post 209
Tuesday, August 7, 2012
Approach to Advice by an Elder Law Attorney
As my posts have indicated, the law is uncertain in many areas. Failure of New Jersey to follow federal law has been discussed many times in areas such as spousal refusal, waiver of elective share as a transfer and IRA of community spouse as a resource.
The attorney must be very careful about giving concrete advice. My thinking is that the elder law attorney must point out the federal law, the state law, any conflicts and if there is a conflict, whether the conflict can be waived or should be waived.
That is, an elder law attorney should not be dictatorial, but should point out the options, possibly make recommendations, and advise the client, in writing, of any ambiguities. The attorney should state that he or she has rendered advice and informed the client of any conflicts, but not has mandated what steps the client should take.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© August 2012, Post 208
The attorney must be very careful about giving concrete advice. My thinking is that the elder law attorney must point out the federal law, the state law, any conflicts and if there is a conflict, whether the conflict can be waived or should be waived.
That is, an elder law attorney should not be dictatorial, but should point out the options, possibly make recommendations, and advise the client, in writing, of any ambiguities. The attorney should state that he or she has rendered advice and informed the client of any conflicts, but not has mandated what steps the client should take.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© August 2012, Post 208
Monday, July 30, 2012
Effect of Change in Penalty Rate
Planning may have been undertaken last year with the anticipation of a penalty rate of $7,282. Counsel should be cognizant of the effect of a change in the penalty rate on the date of eligibility.
(A) The period of ineligibility is determined with respect to the average nursing home cost as at the time of application: 42 U.S.C. 1396(c) (1) (E).
(B) An increase in the penalty rate shortens the penalty period. Therefore, such increase between the date of transfer and the anticipated date of eligibility results in an earlier date of eligibility.
Med. Com. 12-10 changes the penalty rate from $7,282 to $7,757 as of May 29, 2012, retroactive to November 1, 2011. An increase between the date of transfer and the anticipated date of eligibility results in an earlier date of eligibility.
Example: An individual transfers $60,000 on December 1, 2011. The anticipated penalty period would be $60,000 divided by $7,282 which equals 8.23 months. However, Med. Com. 12-10 changed the penalty rate to $7,757. Therefore, the period of ineligibility is $60,000 divided by $7,757 which equals 7.7 months and results in an earlier date of eligibility.
Planning point: Counsel should review all transfers during the look-back period. The increased penalty rate may warrant an earlier date of eligibility.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© July 2012, Post 207
(A) The period of ineligibility is determined with respect to the average nursing home cost as at the time of application: 42 U.S.C. 1396(c) (1) (E).
(B) An increase in the penalty rate shortens the penalty period. Therefore, such increase between the date of transfer and the anticipated date of eligibility results in an earlier date of eligibility.
Med. Com. 12-10 changes the penalty rate from $7,282 to $7,757 as of May 29, 2012, retroactive to November 1, 2011. An increase between the date of transfer and the anticipated date of eligibility results in an earlier date of eligibility.
Example: An individual transfers $60,000 on December 1, 2011. The anticipated penalty period would be $60,000 divided by $7,282 which equals 8.23 months. However, Med. Com. 12-10 changed the penalty rate to $7,757. Therefore, the period of ineligibility is $60,000 divided by $7,757 which equals 7.7 months and results in an earlier date of eligibility.
Planning point: Counsel should review all transfers during the look-back period. The increased penalty rate may warrant an earlier date of eligibility.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© July 2012, Post 207
Wednesday, July 25, 2012
Review of Inaccessible Resources
Inaccessible resources are treated as excludable resources for Medicaid eligibility purposes (N.J.A.C. 10:71-4.4(b)6).
The theory is that a countable resource is only such that can be converted to monies to pay nursing home costs.
Post 35 discusses in detail that a co-owner of real estate renders the real estate inaccessible if the co-owner (not the applicant) refuses to liquidate. For example, real estate owned with a sibling is an inaccessible resource if the sibling refuses to sell the property. It is not as wonderful as it seems, since one half the net income of the property (not considering paper deductions such as depreciation) is income and must be used to defray Medicaid's costs.
Therefore, although the property is excludable, Medicaid recipient does not inure to the benefit of the income.
Moreover, if the property is a joint tenancy, it will not be subject to the lien until the sibling dies and moves out. However, if the property is a tenancy in common, on the death of the Medicaid recipient, one half of the property allocable to the Medicaid recipient passes to a family member who resided in the home with the Medicaid recipient, according to the will. In such case, the lien will apply when the family member moves out or dies. The difference between a tenancy in common and a joint tenancy is that if the property does not pass to a family member, it will be subject to the lien upon the Medicaid recipient's death.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© July 2012, Post 206
Tuesday, July 17, 2012
Matters to Consider When Putting an Ill Spouse in a Nursing Home
Families are often conflicted as to when to put an ill spouse in a nursing home when the person is in the care of the community spouse.
Although it is important that an individual live in the "least restrictive" environment, there is a point in time when nursing home admission is required.
If the individual becomes a burden to the community spouse, consideration of nursing home placement should be made. Otherwise, if the ill spouse becomes injured when nursing home placement was appropriate, there could be liability of the community spouse or the child who holds the power of attorney.
In one of my prior blogs, I pointed out that on occasion a lawyer must think as a psychologist, not to determine whether the individual should remain at home, but as least be sensitive to the fact that a geriatric care manager should be retained and make an assessment so that the ill person is in the environment most appropriate.
We are all faced with a community spouse who refuses to send the spouse into a nursing home out of guilt. At that point I think it is the attorney's obligation to recommend a geriatric care manager to make an assessment.
Also, the attorney should point out the function of Adult Protection Services. This organization and the public guardian have the obligation to make sure that an individual is not in an improper environment or abused.
So I think the main consideration as to whether an individual goes into a nursing home, does not depend as much on the individual as it does on the effect on the community spouse.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© July 2012, Post 205
Monday, July 9, 2012
Major Differences Between New York and New Jersey Medicaid
On August 9th, 2012, I and three other attorneys will be presenting a program to ICLE entitled: "A Comparison of New York and New Jersey Topics in Medicaid Planning & Interstate Guardianship".
It was surprising to me how different the Medicaid rules are in New York than they are in New Jersey. The program will be presenting approximately 20 areas of difference but the key areas that are dissimilar are as follows:
1. New York computes the community spouse resource in a different manner. In New Jersey, in order to receive the maximum CSRA, you must have twice that amount, or $227,280. In New York, the CSRA is applied to the first assets so that if you have between two spouses $113,640 plus two, the CSRA is $113,640 and the applicant has the appropriate amount with Medicaid being granted initially.
2. In New Jersey, Medicaid only covers home care under waiver programs, which limit the time that home care is available. In New York, home care is actually part of Medicaid coverage so that a person can remain home forever and not go into a nursing home.
3. Finally, although there are many other points, the exemptions for "transfers exclusively for another purpose" are treated differently. For example, in New Jersey, I once had a client who made a pattern of transfers for twenty years starting at age 70. The Medicaid authority said that since it was an elder person, they didn't care that there was a pattern and transfers for the five years prior to application were penalized. In New York, the word "exclusively" is treated differently. That is, if you can show a pattern of gifts, they will treat them exclusively for another purpose and Medicaid would be granted. The New York approach is very similar to the old Internal Revenue Service Rule regarding "transfers in contemplation of death." In that area of law, the federal government looks to the primary or dominant motive and a pattern of gifts was the key to exclusion.
In New Jersey, in order to show that a transfer was "exclusively for another purpose," you have to show an example such as the following: a thirty-five year old person gives $100,000 to his brother, has a stroke at age 36 and goes into a nursing home. It takes a unique example like this for a transfer to be treated "exclusively for another purpose". Therefore, it is important to realize that there are differences between jurisdictions regarding basic Medicaid rules.
At the program, we will be discussing other topics such as spousal refusal, payment of debts and expenses, disinheritance of the Medicaid applicant and the effect of inter vivos trusts. Although many other topics will be discussed, these are some of the other key examples of the difference between New Jersey and New York Medicaid.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© July 2012, Post 204
Monday, July 2, 2012
An Elder Lawyer Must Have a Sense of Humor
We are often presented with situations that are humorous. The attorney must decide whether humor is appropriate for the particular client.
I once had a client with whom I was discussing contingent beneficiaries. The client asked me what if you, the attorney, died before the last beneficiary. I answered that it doesn't matter since I am not a beneficiary under the will. The client seemed surprised and acknowledged the fact and then asked the following question: "What if you die before the last beneficiary?" I answered my executor or my secretary as co-holder on the box that held the wills, had a right to enter the box and get the will for them.
The client then asked, "What if you and your secretary died together?" I answered that if my secretary and I died together, my wife would kill me.
Although this story seems silly, it lightened up the conference and the meeting went much better than if I had remained serious.
The point of this story is that you must evaluate the client and determine what is appropriate and not appropriate for the particular situation.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© July 2012, Post 203
I once had a client with whom I was discussing contingent beneficiaries. The client asked me what if you, the attorney, died before the last beneficiary. I answered that it doesn't matter since I am not a beneficiary under the will. The client seemed surprised and acknowledged the fact and then asked the following question: "What if you die before the last beneficiary?" I answered my executor or my secretary as co-holder on the box that held the wills, had a right to enter the box and get the will for them.
The client then asked, "What if you and your secretary died together?" I answered that if my secretary and I died together, my wife would kill me.
Although this story seems silly, it lightened up the conference and the meeting went much better than if I had remained serious.
The point of this story is that you must evaluate the client and determine what is appropriate and not appropriate for the particular situation.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© July 2012, Post 203
Tuesday, June 26, 2012
The Problem of Second Marriages
On occasion, you will have clients who have been married twice, each of whom have children from an earlier marriage. The first issue is should you represent both of them. I think you can obtain a waiver and represent both of them, but that is not the question. Although the conflict can be waived, the question is should you waive the conflict.
Assuming you represent both of them, their wills will probably be different, since they each have different children. If the contingent beneficiaries are children of both marriages, I don’t think you have a problem, and once you have decided you can waive the conflict, it is necessary to prepare a contract to devise pursuant to N.J.S.A. 3B1-4. The contract should obligate you not to change your wills. However, this is illusory since you can make gifts during your lifetime and defeat the purposes of the contract to devise. Therefore, you must also have language in the contract to devise that you will not make gifts to defeat the purpose of your wills. This is not illusory, but I would refer to it as amorphous since you could spend money on your own children that would be difficult and hard to trace.
Therefore, second marriages are fraught with issues without absolute solutions and the conflicts should be seriously considered. That is, assuming there is a conflict, should you waive the conflict and how you preserve the rights of each.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© June 2012, Post 202
Monday, June 18, 2012
Timing of Transfer of a House to a Protected Transferee
In Post 6, I pointed out that the transfer of the home to certain individuals does not give rise to a penalty. One of these individuals is a child who provided care for a parent so that the parent need not go into a nursing home.
I pointed out also that the time of transfer is not defined by the statute.
The key point of this article and a point I feel necessary to repeat, is that the transfer should be made at the time of application for Medicaid. A prior transfer, could be challenged by Medicaid as not being a transfer to a protected transferee.
However, if the transfer is made pursuant to the Medicaid application, evidence can be adduced to show the services rendered by the child, and then Medicaid can approve the transfer of the house to the protected transferee without any penalty.
Of course the problem is if the child is only one of the beneficiaries under the will and receives the house, there may not be enough assets for the other children. You, as the attorney for the mother, should not be concerned about this issue for the obligation is to your client (the mother). However, I think you have a further obligation to explain to the transferee that the transfer could be challenged by the other children.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© June 2012, Post 201
Friday, June 15, 2012
In Personam Jurisdiction
Although not directly related to elder law, the question often arises as to whether the state has personal (in personam) jurisdiction over an individual. The leading case is International Shoe Co. v. State of Washington, Office of Unemployment Compensation and Placement et al. No. 107. 66 S. Ct. 154. International Shoe Co. held that there must be "sufficient contacts or ties with the state of the forum to make it reasonable and just according to our traditional conception of fair play and substantial justice to permit the state to enforce the obligations which have incurred there." The relevance of this case is that if a judgment is rendered in one state and an individual moves to another state, the judgment can be enforced under the full faith in credit clause. The only exception to this rule is if it is abhorrent to the second state to enforce the judgment of the first state. In today's environment, such a decision is unlikely.
However, if the judgment in the initial state has been appealed and is not a final judgment, the full faith in credit clause does not apply.
Suppose you are an attorney in the second jurisdiction and the judgment in the first jurisdiction is under appeal. My recommendation would be to file an interpleader action and have the proceeds turned over to the judge in your jurisdiction, and let the judge hold the proceeds until the decision in the first jurisdiction becomes final since at that time, the full faith and credit clause would apply.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© June 2012, Post 200
Tuesday, June 5, 2012
Election of the Trustee for a Trust
Very often an attorney will name the surviving parent as trustee of a trust for children if the other parent dies. This approach has negative tax consequences. Firstly, since the surviving parent would have an obligation to support the child, under the grantor trust rules, the income is taxable to the surviving parent as trustee and not to the child. If we have a large estate, and the surviving parent is the trustee, the corpus will be included in that person's estate.
Such a problem can be alleviated even if the surviving parent is trustee if we limit the individual's power to an ascertainable standard. "Ascertainable standard" is defined by the regulations under Section 2041 as health, support, maintenance or education. Notwithstanding, I would be reluctant to name the surviving parent as trustee, because in all likelihood the remaindermen are the children, which could lead to litigation.
Therefore, an ideal trustee would be an aunt or an uncle or the beneficiary, who had no obligation and there would no tax or estate tax consequences for the trustee.
Another solution to the trust situation would be a trust having co-trustees whose interest is adverse to the other. That is, if they were both remaindermen, the distributions need not be limited to an ascertainable standard. However, having two trustee-remaindermen, gives rise to the problem of a disagreement. That is, if the co-trustees disagree, this might require a court proceeding which would be very costly.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© June 2012, Post 199
Such a problem can be alleviated even if the surviving parent is trustee if we limit the individual's power to an ascertainable standard. "Ascertainable standard" is defined by the regulations under Section 2041 as health, support, maintenance or education. Notwithstanding, I would be reluctant to name the surviving parent as trustee, because in all likelihood the remaindermen are the children, which could lead to litigation.
Therefore, an ideal trustee would be an aunt or an uncle or the beneficiary, who had no obligation and there would no tax or estate tax consequences for the trustee.
Another solution to the trust situation would be a trust having co-trustees whose interest is adverse to the other. That is, if they were both remaindermen, the distributions need not be limited to an ascertainable standard. However, having two trustee-remaindermen, gives rise to the problem of a disagreement. That is, if the co-trustees disagree, this might require a court proceeding which would be very costly.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© June 2012, Post 199
Tuesday, May 29, 2012
Elder Law and the First Amendment
Many years ago, the federal government held that a lawyer committed a crime if he advised a client how to protect assets. Although the decision was ridiculous, it was the law for a period of time.
Eventually, the government came to its senses and realized that the issue was not the right of the lawyer to advise, but the right of the public to know. Therefore, the government reversed itself and held it certainly is not a crime for a lawyer to advise a client to protect assets. Clearly, as in all areas of law (particularly constitutional law), the public's right to know is paramount.
A similar situation is in Post 174 , in which the Supreme Court of New Jersey held that you may call yourself a Super Lawyer if the language has the proper restrictions. Again, it is not the First Amendment right of the lawyer to advise, but rather the First Amendment right of the public to know.
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 198
Eventually, the government came to its senses and realized that the issue was not the right of the lawyer to advise, but the right of the public to know. Therefore, the government reversed itself and held it certainly is not a crime for a lawyer to advise a client to protect assets. Clearly, as in all areas of law (particularly constitutional law), the public's right to know is paramount.
A similar situation is in Post 174 , in which the Supreme Court of New Jersey held that you may call yourself a Super Lawyer if the language has the proper restrictions. Again, it is not the First Amendment right of the lawyer to advise, but rather the First Amendment right of the public to know.
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 198
Monday, May 21, 2012
The Pros and Cons of Owning a Home with a Sibling
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
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 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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