Caregiving at Home Series Understanding the Basics of Elder Law - - PowerPoint PPT Presentation

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Attorney Tom McCarthy The Elder & Disability Advocacy Firm of Christine A. Alsop, LLC

Caregiving at Home Series

Understanding the Basics of Elder Law

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What is elder law?

Elder law is not so much about the type of law that it is, but is more about the types of clients that it serves. Elder law attorneys help people who are elderly and people who are disabled with their legal needs and the various issues that arise within the continuum of care. This ofuen includes working with a client’s financial planner to ensure that money is available to pay for the quality of care that the client desires.

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THE FOUR WAYS THAT OWNERSHIP OF PROPERTY IS TRANSFERRED AT DEATH

PROBATE: Probate assets are the only assets transferred pursuant to the decedent’s Will. BY WILL NON-PROBATE: Probate assets: titled in

• nly ONE individual’s name

(Note: A Trust set out in a Will is referred to as a Testamentary Trust and it does not avoid probate administration. Typical Examples: Husband/Wife Parent/Child Grandparent/Grandchild Among Siblings A legal entity that is similiar to a family corporation. Benefjciary Designations: Life Insurance Policies IRA Accounts Annuities Brokerage Accounts: TOD Real Estate: Benefjciary Deeds US Savings Bonds: POD Motor Vehicles (DOR): TOD Bank Accounts: POD) Personal Property: Deed of Gifu BY JOINT OWNERSHIP BY CONTRACT BY TRUST KEY: DOR = Department of Revenue; TOD = Transfer on Death; POD = Paid on Death Through the probate process, assets pass to the Benefjciaries named in the Will (can be individual/s

• r Trust/s)

Assets pass to surviving, titled owners (can be individual/s or Trust/s) Assets pass to Benefjciaries, pursuant to Benefjciary, TOD

• r POD provisions (can be

individual/s or Trust/s) Assets pass to the benefjciaries named in the Trust (children, grandchildren, etc.) Pour-Over Will Deed of Gifu: Household items and similar personal property

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Estate Planning vs. Elder Law

Estate Planning Elder Law

Traditional estate planning focuses on the movement of wealth from one generation to the next. Elder law focuses on life planning, not just transfers that could occur at death. Generally, elder law emphasizes on the issues that arise from today’s longer life spans, rather than death- related transfers

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Elder law can touch upon a multitude of issues:

• Help with traditional estate planning

m Probate avoidance m Trust and probate administration

• Eligibility requirements of various

government benefits, such as Medicaid, VA benefits, Medicare and

• thers
• Planning for incapacity with legal

documents

• Guardianships and conservatorships
• Fiduciary litigation
• Special needs trusts for the benefit of

individuals who are disabled

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Capacity Issues

When the person no longer has capacity, the following

• ccurs...

If planned earlier:

• Powers of attorney are in place
• Healthcare and advance directives are in place
• Other estate planning documents are in place
• The person has communicated his or her wishes

If failure to plan:

• Guardianships and conservatorships may be needed
• The family may face immediate crisis

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Powers of Attorney

Durable Power of Attorney

• The power of the attorney-in-fact to act on the principal’s

behalf continues despite the principal’s incapacity, whether or not a court decrees the principal to be incapacitated. Power of Attorney (without “Durable” language)

• The power of attorney is revoked and the power of the

attorney-in-fact to act for the principal automatically stops if the principal becomes incapacitated.

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Powers of Attorney

• Principal: the person who creates and signs the Durable Power of

Attorney

• Attorney-in-Fact: the person who the principal appoints to act on

his or her behalf and in his or her best interest

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Powers of Attorney

You CAN engage in the following, under a power of attorney, if the document provides:

(1) To execute, amend or revoke any trust; (2) To fund with the principal’s assets any trust not created by the principal; (3) To make or revoke a gifu of the principal’s property; (4) To disclaim a gifu or devise of property to or for the benefit of the principal; (5) To create or change survivorship interests in the principal’s property or in property in which the principal may have an interest; provided, however, that the inclusion of the authority set out in this subdivision shall not be necessary in order to grant to an attorney in fact acting under a power of attorney granting general powers with respect to all lawful subjects and purposes the authority to withdraw funds or other property from any account, contract or other similar arrangement held in the names of the principal and one or more other persons with any financial institution, brokerage company or other depository to the same extent that the principal would be authorized to do if the principal were present, not disabled or incapacitated, and seeking to act in the principal’s own behalf;

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Powers of Attorney

You CAN engage in the following, under a power of attorney, if the document provides:

(6) To designate or change the designation of beneficiaries to receive any property, benefit or contract right on the principal’s death; (7) To give or withhold consent to an autopsy or postmortem examination; (8) To make an anatomical gifu of, or prohibit an anatomical gifu of, all or part of the principal’s body under the Revised Uniform Anatomical Gifu Act or to exercise the right of sepulcher over the principal’s body under section 194.119; (9) To nominate a guardian or conservator for the principal; and if so stated in the power of attorney, the attorney in fact may nominate himself as such; (10) To give consent to or prohibit any type of health care, medical care, treatment or procedure to the extent authorized by sections 404.800 to 404.865; (11) To designate one or more substitute or successor or additional attorneys in fact; or (12) To exercise, to revoke or amend the release of, or to contract to exercise or not to exercise, any power of appointment granted to the principal to the extent authorized under sections 456.970 to 456.1135.

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Powers of Attorney

No power of attorney, whether durable or not durable, and whether or not it delegates general powers, may delegate or grant power or authority to an attorney in fact to do or carry

• ut any of the following actions for the principal:

(1) To make, publish, declare, amend or revoke a will for the principal; (2) To make, execute, modify or revoke a living will declaration for the principal; (3) To require the principal, against his or her will, to take any action or to refrain from taking any action; or (4) To carry out any actions specifically forbidden by the principal while not under any disability or incapacity.

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Durable Powers of Attorney – Financial

The attorney-in-fact (AIF) has a duty to:

• Act in the interest of the principal
• Maintain contact with the principal
• Communicate with the principal
• Follow his or her wishes
• Avoid self-dealing
• Use a high degree of care

Once the Durable Power of Attorney is signed, the attorney-in-fact has a fiduciary relationship and obligation to the principal.

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Durable Powers of Attorney – Financial (cont’d)

Powers include:

• Manage property and business afgairs
• Apply for government benefits
• Manage all bank accounts
• Hire an attorney
• Enter into a contract

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Durable Powers of Attorney – Financial (cont’d)

• Survives the incapacity of the principal
• Efgective as soon as the principal signs
• Not valid where it is later determined that the person lacked

the mental capacity to execute

• Survives death only with right of sepulcher provision
• Efgective tool used to prevent guardianship

m Attorney-in-fact can make financial decisions m Prevents state/court involvement

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Types of Financial Powers of Attorney

Springing Power of Attorney: This type of power of attorney is efgective only when the principal is incapacitated or when some other stipulated event or condition

• ccurs, thus “springing” the power of attorney into action. These

documents require 1-2 physician certifications. Non-Springing Power of Attorney: This type of power of attorney is efgective immediately upon execution of the document and remains efgective in the event of the principal’s disability or incapacity.

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Legal Standard of Capacity

• Attorney must determine that the principal has the capacity

necessary to execute the power of attorney.

• The law does not specify the “requisite capacity” needed.
• Generally, the principal must understand the nature of the act

and its legal consequences.

• Legal determination is not the same as a medical determination.

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Healthcare Powers of Attorney

• Principal: the person who creates and signs the Healthcare Power
• f Attorney
• Healthcare Agent: the person who the principal appoints to act
• n his or her behalf and in his/her best interests
• Successor Agents
• Co-Agents: not recommended
• Clause efgective only when certified as “incapacitated”

m Must be followed with how that incapacity is certified m Written document or entry in the medical record m 1 or 2 physicians

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Healthcare Powers of Attorney (cont’d)

The healthcare agent has a duty to:

• Act in the interest of the principal
• Maintain contact with the principal
• Communicate with the principal
• Follow his or her wishes
• Avoid self-dealing

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Healthcare Powers of Attorney (cont’d)

Powers include:

• Request and review medical records
• Consult with medical stafg
• Make medical decisions
• Consent to procedures
• Right of sepulcher

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The Law

The healthcare agent:

• Cannot require or withdraw artificially-supplied nutrition and

hydration with an intent to cause death

• Cannot require artificially-supplied nutrition and hydration if

the principal can ingest through natural means

• Must consider appropriate measures within current medical

practice standards to provide comfort to the patient

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Those Who Cannot Serve

• Attending physician
• Employee of an attending physician
• Owner or operator of a health care facility where the patient is a

resident, unless:

m Related m Members of the same religious community m Governing law §404.815

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Types of Healthcare Directives

• Pre-printed forms

m Available in the hospital and healthcare facilities

• Statutory Living Will
• Advance Directive drafued by an Attorney

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Living Will

• Declaration/statement that a person makes regarding:

m Whether or not they want certain medical treatments to be

withheld or withdrawn under certain circumstances

• Given efgect only if the person is terminal and not able to make

treatment decisions §459.025

• Can be general or specific
• Statute suggests a basic form

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Advanced Directives

• Personalized to meet a client’s wishes
• Anticipate and purposefully make the document dynamic

m Substituted judgment m Best interest

• Provide for anticipated decisions

m Autopsy consent m Anatomical gifus m Right of sepulcher

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Guardianship

A process where a person who has been appointed by a court to have the care and custody of a minor or an adult person who has been legally determined to be incapacitated

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Conservatorship

A process where a person is appointed by a court to manage the property of a minor or of an adult person who has been legally determined to be disabled

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Important Terms

Disabled

• person who is unable by reason of any physical or mental

condition to receive and evaluate information; or

• to communicate decisions to such an extent that the person

lacks the ability to manage his financial resources.

• Layman terms:

m has a mental and/or physical condition m cannot manage their financial resources m likely that serious injury or harm will occur

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Important Terms (cont’d)

Incapacitated

• a person who is unable by reason of any physical or mental

condition to receive and evaluate information or

• to communicate decisions to such an extent that the person

lacks the capacity to meet essential requirements for food, shelter, safety or other care such that serious physical injury or harm is likely to occur

• Layman Terms
• has a mental and/or physical condition
• cannot meet their basic need for food, shelter, safety

and other care

• likely that serious injury or harm will occur

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Important Terms (cont’d)

Least Restrictive Environment

• Only impose on the person such restraint that is necessary

to prevent the person from injuring himself or others

• Provide the person with the care and treatment

appropriate for him or her, considering his or her physical and mental condition and financial means

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Important Terms (cont’d)

Terms for an alleged incapacitated person

• Respondent - person who a petition is being filed against in

court

• Protectee - person who has a conservator (finances)
• Ward - person who has a guardian (health, well-being)

Types of attorneys for alleged incapacitated people

• Court-appointed attorney
• Guardian ad litem
• Ad litem-for the purposes of the lawsuit

Private counsel

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Helping clients beyond drafuing

There are many factors that should be taken into consideration when deciding whether or not to pursue the assistance of an elder law attorney.

What is the health situation? Is there sufgicient time for an attorney to find a solution? Are there any potential ethical issues for the attorney? What resources are available?

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Helping clients beyond drafuing

Elder law attorneys work with many specialized professionals to help provide comprehensive services to their clients. Having professionals in your corner and understanding the various options that are available to you while undergoing the planning process is crucial. Social workers, geriatric care managers, physicians and

• ther specialists assist in life care

planning and assessments. Financial advisors and banks are relied upon to notify and/or report suspicious activities or behaviors.

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The Role of the Clinical Social Worker in Assisting Those with Dementia

Clinical social workers can assist patients and their families by:

• Providing a comprehensive biopsychosocial evaluation to

determine the client’s level of functioning and care needs

• Providing education about the disease process, resources,

what options are available and long term care planning

• Providing assistance in obtaining services, as well as

coordinate care with other professionals/agencies

• Providing emotional support and counseling to both the

client and his or her family to help them cope with the disease to enhance their quality of life

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Care Management

Care management by the social worker can range from providing information and referrals to complete management of all the demented client’s care. Case management services usually include, but are not limited, to:

• Respite care (in-home care, adult day care, short-term

residential)

• Financial assistance (Medicare, Medicaid, VA, SSDI, SSI,

LIHEAP, food stamps, prescription medication, utilities)

• Housing (senior apartments, subsidized, residential care,

assisted living, skilled nursing and rehabilitation)

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Emotional Support and Counseling

Advocacy

• Accompany patient to doctor’s appointments
• Coordinate with all health and mental health providers
• Identify, access and navigate any resources to enhance the

quality of life of the client and the caregiver

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Long-Term Care Considerations

• Is there a long-term care insurance policy in place?
• If so, does the long-term care insurance policy provide good coverage?
• Is long-term care insurance still possible?
• What is the use of immediate care annuities?
• How can a financial planner help?

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Long-Term Care

The three most common care options are: 1) home health care 2) assisted living 3) nursing home care There are three ways to pay for long-term care (sources): 1) self-pay 2) long-term care insurance 3) government benefits

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The Costs of Long-Term Care

Research shows that at least 70% of people over 65 years of age will need long term care services and support at some point in their lifetime. See, 2014 Medicare & You, National Medicare Handbook, Centers for Medicare & Medicaid Services, September 2013.

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The Costs of Long-Term Care (cont’d)

• In St. Louis, a good nursing home charges between $6000 to

$7500 a month for skilled nursing care.

• Rural area nursing homes cost less.
• Care concerns do not evaporate just because nursing home

charges more.

• Not all St. Louis nursing homes accept Medicaid and most

require a waiting period.

• Facilities that are 100% Medicaid ready are usually not on the

same level as those that ofger both private and Medicaid beds.

• Use of social worker or geriatric case manager can assist in

sorting out the needs of client

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2017 MO HealthNet Numbers

• Single Individual -- $999.99
• Married Couple -- $2,000
• Community spouse may keep -- $120,900
• Minimum Monthly Maintenance Needs

Allowance (MMMNA) -- $2,003

• There are penalties for asset transfers

that occur less than 5 years prior to submitting the application for Medicaid benefits.

• Penalty Divisor -- $4,889/month
• The quality of care provided at the

types of facilities available to Medicaid beneficiaries ofuen does not match the quality of care that is ofgered through private pay.

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Medicaid Income

Income and resources are two separate issues. Do not get them confused!

• For Vendor Medicaid (or Nursing Home Medicaid or

MO HealthNet) an applicant’s income cannot exceed the actual cost of the monthly nursing home bill; otherwise there is nothing for Medicaid to contribute.

• The income considered by Medicaid is Social Security and

any pension received.

• Dividends and interest are not income.
• Rent can be income.
• Surplus income is paid to the nursing home with Medicaid

making up the difgerence.

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Medicaid Income (cont’d)

• Community spouses are entitled to a Minimum Monthly

Maintenance Needs Allowance (MMMNA) = $2,003 in 2017

m The Maximum Monthly Maintenance Needs Allowance

is $3,023 in 2017.

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Non-Countable Resources

Exempt resources include:

• House
• Vehicle
• Personal property (non-collections)
• Life insurance with a $1,500 or less cash value
• Pre-need, irrevocable burial contract

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Transfer Penalties

• Penalty divisor is $4,889 in 2017
• Transactions for the five years proceeding application are

subject to “look back” and imposition of penalties

• Penalty will be imposed for transfers made for less than fair

market value

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Medicaid Myths

Myth: “I have to give away everything I own to get Medicaid.” The Truth: A person is permitted to own some property and still be eligible for Medicaid. Some things, like the home you live in or a pre-paid burial plan, do not count against Medicaid eligibility. For a married couple, when one spouse is entering a nursing home, the

• ther spouse will be able to keep some of the marital assets.

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Medicaid Myths (cont’d)

Myth: “If I put my property into my spouse’s name, I will be eligible for Medicaid.” The Truth: Assets are counted, regardless of which spouse’s name is on the title. It may be possible, however, for an asset to be re-titled into the name of the healthy spouse afuer Medicaid benefits have been approved for the spouse needing nursing home care.

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Medicaid Myths (cont’d)

Myth: “Medicare will cover my nursing home bill.” The Truth: Medicare only covers a small amount of the nursing home care provided in the US. This is a surprise to many people. In general, Medicare will pay for 20 days of nursing home care if the person was in the hospital for at least 3 days prior to entering the nursing home and the person required skilled care (such as physical therapy). Medicare will pay for part of the costs for an additional 80 days, but only if the resident continues to need skilled care.

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Medicaid Myths (cont’d)

Myth: “If I enter a nursing home as a private pay resident, I must use up all my assets before I can get Medicaid.” The Truth: Some nursing homes may tell you that your only option is to spend all of your assets to privately pay for nursing home costs, but this is because they get paid less under the Medicaid program. Seeking the advice of an attorney who understands the Medicaid rules in crucial in understanding what other options you may have.

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Medicaid Myths (cont’d)

Myth: “My income may have to be used to pay my spouse’s nursing home bill.” The Truth: The healthy spouse gets to keep his or her own income. In fact, the healthy spouse is guaranteed a minimum monthly income and, if necessary, some of the nursing home resident spouse’s income will be attributed to the healthy spouse.

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Medicaid Myths (cont’d)

Myth: “I can only give away $10,000 a year under Medicaid rules.” The Truth: The $10,000 per year rule is a federal gifu tax rule (and the amount has been increased and applies only to people with a very large estate.) Under the Medicaid rules, a gifu that creates ineligibility causes the person to be ineligible for a number of months determined by the value of the gifu divided by the Medicaid divisor.

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Medicaid Myths (cont’d)

Myth: “I can hide my assets and get Medicaid.” The Truth: Intentional misrepresentation in a Medicaid application is a crime with significant penalties.

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Medicaid Myths (cont’d)

Myth: “I can depend on the Medicaid rules not changing for many years.” The Truth: Medicaid rules change, so do not depend on what a friend or neighbor has told you. It is best to consult with an attorney who understands Medicaid law and knows what the current rules are.

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Veterans Benefits

• Aid & Attendance; Non-Service Connected Veteran
• Resource and Income Limitations
• Military Service
• Pending in Congress is a bill that mandates a 3-year penalty
• n transfers
• The penalty may be assessed when application occurs.

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Benefits Ofgered Through the Veteran’s Administration

Non-Service Connected Benefit

• Needs-based benefit
• Based on service, medical and financial criteria

Service Connected Benefit

• Non-needs based benefit
• Eligibility based on service connected-injury for which the

Veteran is rated

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Compensation: Service-Connected

Compensation is a benefit paid to veterans with a disability caused by, or exacerbated by, military service. Once a veteran can show that they were disabled due to their military service, the Veterans Administration rates their level of disability (for example, 20% disabled) and awards an amount of compensation based on that rating.

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Compensation: Service-Connected (cont’d)

This is available regardless of the veteran’s level of income and is not subject to Federal or State income tax. Entitlement is established from the date of separation if the claim is filed within one year from separation. www.vba.va.gov/VBA/benefits/factsheets/serviceconnected/ compensation.doc

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Disability Pension: Non-Service Connected

• A pension is available to veterans who have low incomes and

who are permanently and totally disabled and the disability is not due to military service.

• This can also be referred to as a “special Monthly Pension”
• r an “Improved Pension”.
• Surviving spouses and children are also eligible.

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Veterans Pension Eligibility

All of the following criteria must be met:

• The Veteran discharged from service under other than

dishonorable conditions

• The Veteran served 90 days or more of active duty with at

least 1 day during a period of war time

• The Veteran is permanently and totally disabled, or are age

65 or older,

• The Veteran’s countable family income is below a yearly

limit set by law

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Permanent and Total Disability

A veteran will be considered permanently and totally disabled if they are:

• A patient in a nursing home for long-term care due to the

disability

• Receiving Social Security disability benefits
• Determined to be totally disabled by the Department of

Veterans Afgairs

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Pension Calculation

• The VA calculates pension by totaling all countable income and

subtracting any deductions.

• Countable income includes income received by the veteran and

may include income from any dependents.

• Income from earnings, disability and retirement payments,

interest and dividends, and net income from farming or business are included.

• Supplemental Security Income is not counted as income.

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Pension Calculation (cont’d)

• Deductions are also part of the calculation. These include

unreimbursed medical expenses and education expenses for the veteran or a dependent.

• The resulting amount is subtracted from the appropriate annual

pension limit. The remaining number is the pension amount that is divided by 12 and paid monthly to the veteran.

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Aid and Attendance or Housebound Veterans

Aid and Attendance (A&A) is a benefit paid in addition this benefit may not be paid without eligibility to pension. A veteran may be eligible for A&A when the veteran:

• Requires the aid of another person in order to perform personal

functions required in everyday living, such as bathing, feeding, dressing, attending to the wants of nature, adjusting prosthetic devices, or protecting himself/herself from the hazards of his/her daily environment, OR:

• Is bedridden, in that his/her disability or disabilities requires that he/she remain

in bed apart from any prescribed course of convalescence or treatment, OR:

• Is a patient in a nursing home due to mental or physical incapacity, OR:
• The veteran is blind, or so nearly blind as to have corrected visual acuity of 5/200
• r less, in both eyes, or concentric contraction of the visual field to 5 degrees or

less.

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Aid and Attendance or Housebound Veterans (cont’d)

Housebound is paid in addition to monthly pension. Like Aid & Attendance, Housebound benefits may not be paid without eligibility to pension. A veteran may be eligible for Housebound benefits when the veteran who:

• Has a single permanent disability evaluated as 100-percent

disabling AND, due to such disability, he/she is permanently and substantially confined to his/her immediate premises, OR:

• Has a single permanent disability evaluated as 100-percent

disabling AND, another disability, or disabilities, evaluated as 60 percent

• r more disabling.

A veteran cannot receive both Aid and Attendance and Housebound benefits at the same time.

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VA Transfer Rules

• No penalties for transfer for less than fair market value

are currently imposed

• Bill was introduced (ultimately defeated) that provided a

three (3) year transfer penalty

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VA Institutional Long-Term Care

The VA provides institutional long-term care to eligible veterans through: VA Nursing Homes Veterans with sufgicient functional impairments receive long-term care at a facility that supports their various medical needs.

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VA Institutional Long-Term Care (cont’d)

State Veterans Homes Owned and operated by a State which may provide nursing home care, domiciliary care, and/or adult day health care. VA assures quality of care and verification of standards through an annual inspection, audit, and reconciliation of records conducted by a VA medical center.

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2017 Wartime Veterans Pension Benefit Rates

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2017 Surviving Spouse Death Pension Benefit Rates

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Strategies

Elder law attorneys who have Medicaid and VA planning as part of their practice try to preserve some or all of the assets for the client or the client’s family. Goal: The combined benefits can permit a client to remain in his

• r her home with home care and, if skilled care is required, have

Medicaid eligibility in place when needed.

• Clients try techniques on their own that can lead to

catastrophic results.

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Strategies to Plan for a Continuum of Care

• Medicaid or VA Asset Protection Trusts
• Irrevocable Trust
• For VA planning purposes, the settlor must not retain any

possibility of receiving income or principal

• For Medicaid, the settlor must not retain any possibility of

receiving principal, but income is permissible.

• Five year look back for Medicaid

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Strategies to Plan for a Continuum of Care (cont’d)

• No penalty for VA
• Preserves step-up basis and the 121 Exclusion on the sale of

the family home

• A retained limited power of appointment is utilized to cause

estate inclusion and the resulting step-up of basis and an to reallocate who will get what shares of the trust assets upon the settlor’s death.

• Income can be sprinkled among multiple beneficiaries in
• rder to obtain the best result both for income tax

minimization and asset protection (by not distributing to an income beneficiary with creditor problems).

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Clients with Disabilities

• Special needs trusts
• Third-party trusts
• Sole benefit (d)(4)(A) trusts
• Protecting the assets of a non-

disabled spouse

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Immediate Strategies

• Use of a Special Needs Trust for disabled children
• Use of caretaker exception to transfer penalty rules
• Half-a-loaf planning
• Medicaid annuities

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Planning Frustrations

• Improperly drafued Financial Durable Power of Attorney or

Revocable Trust;

• Gifuing provisions and limitations
• Older documents
• Documents that do not permit amendments to existing trusts
• Greedy or short-sighted children;
• Tax concerns;
• Health of the senior and sophistication of the children.

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Conclusions

• Clients do not fit one model or solution
• Must consider the client’s age, financial and social situation
• Medicaid is not always the best option
• Long-term care insurance
• The role of the financial advisor
• Immediate care annuities
• Must consider impact on client’s remaining life
• Must be a legal resource for client throughout their life

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Questions?

THE ELDER & DISABILITY ADVOCACY FIRM OF CHRISTINE A. ALSOP, LLC 6654 Chippewa Street, St. Louis, MO 63109 (314) 644-3200 | www.AlsopElderLaw.com

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