Elder Law

Protect A Life of Saving from Long Term Care Costs

Every month, Lawrence Cappiello writes a check to a nursing home for $12,000 to pay for his wife’s nursing home and long term care costs. Two years ago, his net worth was $500,000. In less than two years, the Cappiello’s savings will be gone. This unsettling story is explained in the article “How to Keep LTC Costs From Devouring Your Client’s Life Savings” from Insurance News Net. He is suffering from nursing home sticker shock and says he should have known better.

With proper planning, long term care costs won’t take your life’s savings

Cappiello was a professor at the University of Buffalo for 25 years. During that time, he taught an introductory course on health care and human services that touched on the costs to consumers. He said it was clear even then, that the cost of long term care was going to escalate out of control.

To qualify for Medicaid payments of nursing home care in New York State, residents are permitted to own no more than $15,450 in nonexempt assets. However, elder law attorneys, whose practices focus on these exact issues, say that the way to protect the family’s assets, is to take steps years before nursing home or long term care is needed. Some general recommendations:

  • Signing over the deed of the home to children or any others who would otherwise inherit it from you in a will. The transaction would need to stipulate that you have life use of the home.
  • Establishing an irrevocable trust, that upon death, transfers the house to the beneficiaries. There must be language that ensures that you have life use of the house.
  • Giving away savings and other financial assets.

Transfers of any assets must take place more than five years before applying for Medicaid nursing home and long term care coverage. If they have been given away or transferred within the five year “look-back” period, then there is a chance that they may still qualify, or they may have to wait five years.

That is why planning with an experienced estate planning attorney is so critical for families, especially when one of the spouses is facing a known illness that will get worse with time. There are steps that can be taken, but they must be done in a timely manner.

Many older people are not exactly jumping with joy at the idea of handing over their assets, even when relationships with adult children are good. The idea of giving up assets and the family home is a marker of the passage of time and the inevitability of one’s own passing. These are not things that we enjoy considering. However, taking steps in advance, can make a huge difference in the quality of the well spouse’s life.

It should be noted that a sick spouse can move assets to a healthy spouse, to make the sick spouse lawfully poor and eligible for Medicaid. There is no look back period or penalty relating to long term care for interspousal transfers. This may sound like a very simple solution. However, these are complex matters that need the help of an experienced attorney. If it were so easy, countless spouses would not be facing their own impoverishment because of an ill spouse’s long term care needs.

Reference: Insurance News Net (Feb. 4, 2019) “How to Keep LTC Costs From Devouring Your Client’s Life Savings”

Be Careful Granting Power of Attorney

Power of Attorney abuse has emerged as a serious problem for elderly people who are vulnerable to people they trust more than they should, reports the Sandusky Register in the article “Consumer beware: Understanding the powers of a Power of Attorney” The same is true for a Durable Power of Attorney for Health Care document, which should be of great concern for seniors and their family members.

Care should be taken when choosing an agent to act in your behalf

This illustrates the importance of a Power of Attorney document: the person, also known as the “principal,” is giving the authority to act on their behalf in all financial and personal affairs to another person, known as their “agent.” That means the agent is empowered to do anything and everything the person themselves would do, from making withdrawals from a bank account, to selling a home or a car or more mundane acts, such as paying bills and filing taxes.

The problem is that there is nothing to stop someone, once they have Power of Attorney, from taking advantage of the situation. No one is watching out for the person’s best interests, to make sure bank accounts aren’t drained or assets sold. The agent can abuse that financial power to the detriment of the senior and to benefit the agent themselves. It is a crime when it happens. However, this is what often occurs: seniors are so embarrassed that they gave this power to someone they thought they could trust, that they are reluctant to report the crime.

Similarly, an unchecked Health Care Power of Attorney can lead to abuse, if the wrong person is named.

The following is a real example of how this can go wrong. An adult child arranged for their trusting parent to be diagnosed as suffering from dementia by an unscrupulous psychiatrist, when the parent did not have dementia.

The adult child then had the parent admitted into a nursing home, misrepresenting the admission as a temporary stay for rehabilitation. They then kept the parent in the nursing home, using the dementia diagnosis as a reason for her to remain in the nursing home.

The parent had to hire an attorney and prove to the court that she was competent and able to live independently, to be able to return to her home.

Meet with an experienced estate planning attorney to discuss your situation and figure out who might become named as Power of Attorney and Health Care Power of attorney on your behalf. The attorney will be able to help you make sure that your estate plan, including your will, is properly prepared and discuss with you the best options for these important decisions.

Reference: Sandusky Register (Feb. 5, 2019) “Consumer beware: Understanding the powers of a Power of Attorney”

Suggested Key Terms: Power of Attorney, Health Care, Principal, Agent, Elder Abuse, Estate Planning Attorney,

Choose Power of Attorney Agents Wisely

For nearly four years, John Jerome O’Hara took charge of his mother’s care at a Kentucky nursing home. She suffered from Alzheimer’s disease.

O’Hara gained power of attorney over her affairs in June 2014. He was expected to manage thousands of dollars in income a month. In addition, O’Hara was supposed to use that income for his mom’s living expenses at Wesley Manor in Louisville.

However, reports The Washington Post in the article “He had power of attorney over his Alzheimer’s-afflicted mother—and stole $332,000, grand jury says,” for nearly four years, O’Hara robbed his mother instead. The charges contained 18 counts—ten of bank fraud, four of wire fraud and four of “access device fraud.”

The charges carry a maximum of several lifetimes in prison, the indictment said.

Each bank fraud count carries a maximum of 30 years in prison. In addition, there’s the potential for hefty fines and restitution.

O’Hara took the funds, in part, by writing checks to himself, according to the indictment.

He also wrote checks out to cash or signed “POA” for power of attorney. He withdrew money from her bank accounts to use for his expenses, prosecutors allege.

O’Hara’s alleged theft left a trail of financial distress, which was clear to investigators. Most significantly, he failed to pay his mother’s living expenses, the indictment said. This forced other family members to pay more than $100,000 to keep her cared for at the nursing home.

In addition, O’Hara left other obligations unpaid. He missed mortgage payments at his mother’s home in Lexington, the indictment said, and the home was foreclosed in March, as a result.

Reference: The Washington Post (December 9, 2018) “He had power of attorney over his Alzheimer’s-afflicted mother—and stole $332,000, grand jury says”

How Seniors Can Improve Their Health in the New Year

After the holidays, you might be looking for ways to focus on your health and well-being. It is fine to enjoy the holidays, but if we continue to indulge ourselves throughout the year, we can be setting ourselves up for fatigue, low energy and a weakened immune system. Let’s make a plan to feel better in 2019.

Here are some tips on how seniors can improve their health in the new year.

Get Back to Good Nutrition

You gave yourself permission to nibble on the tasty morsels that accompany the holidays. As the years go by, you might find that some of your favorite treats leave you feeling less than jolly. You are not alone. As we age, some of the things that change include:

  • The metabolism gets less efficient, so it is harder to keep off excess weight.
  • The digestive tract becomes less tolerant of things like spicy or rich foods.
  • You might experience dehydration.
  • The immune system can weaken.

Not to worry, you can take control of all of these facets of aging. Work with a nutritionist to set up some guidelines and meal plans tailored for your situation, including any medical conditions you have and all supplements or prescription drugs you take.

If you prefer to approach this issue DIY, the “old school” advice still works. Eat more fresh vegetables and fruit, whole grains and lean protein. Drink plenty of water, and reserve processed and junk food for special occasions.

Stay Physically and Socially Active

Few things are better for your health, than getting off of the sofa and out of the house. Although it is tempting to become sedentary if your arthritis hurts, your diabetes makes you feel low energy and you have ongoing aches and pains, getting regular activity can improve how you feel. Talk with your doctor about your options for “gentle” exercise, like walking and swimming.

Call your local park system, fitness facility, or community or senior center for information about their programs for seniors. Make sure you ask about their 55+ discounts.

Many people become socially isolated after retiring, particularly if most of their friends were people from work. If you find yourself in this situation, you have two options: keep in touch with your old friends from work or make new friends. Some experts suggest that staying engaged socially can help to stave off Alzheimer’s disease and other forms of dementia.

Go to the Dentist

Your tooth enamel gets thinner as you age, so your risk for cavities increases as you get older. Dentists also advise that your likelihood of having a stroke, heart disease and diabetes has a connection to infections in the mouth. Catching and treating oral problems can protect your overall health.

Do Something New and Different

One of the best ways to maintain your ability to process information, think clearly and perform cognitive functions is to challenge the “little gray cells” with new activities on a regular and ongoing basis. Read books that you have never read before. Shake up your daytime, evening and weekend routine every now and then. Listen to a different genre of music for a few days. Take up a new hobby. All of these activities can help you to stay sharp and independent.

Your state’s regulations might differ from the general law of this article, so you should talk with an elder law attorney in your area.

References:

A Place for Mom. “10 Healthy Habits for Seniors to Keep.” (accessed November 15, 2018) https://www.aplaceformom.com/blog/11-5-14-healthy-habits-for-seniors/

300,000 Americans to Gain Medicaid Benefits

Most of those who will be eligible in 2019 are over age 50 and would otherwise have no healthcare.

Ballot measures in three states—Idaho, Nebraska, and Utah—will extend the federal- and state-funded healthcare program to allow access to approximately three hundred thousand low-income Americans.

MP900398819AARP’s recent article, “Medicaid to Expand in 3 States,” reports that with the passage of ballot measures in those three states, 37 states, including DC, have now expanded the Medicaid program, since the Affordable Care Act (ACA) created the opportunity to offer more people coverage.

The success of the three ballot measures “is a recognition that Medicaid plays an important role in our society for those who are in need and that it’s an issue that has changed a great deal over the past five or six years from a political standpoint,” says John Hishta, AARP senior vice president for campaigns. “I think the voters have led the way in some of these states.”

Montana voters rejected a measure that would have increased tobacco taxes on cigarettes and taxed other tobacco products to pay for the state’s share of Medicaid expansion, veterans’ mental health, and home- and community-based services. Nearly 130,000 low-income residents in that state may now lose their Medicaid eligibility in 2019, if the state Legislature doesn’t act.

The mid-term election results in three other states could have implications for their Medicaid programs as well. Maine’s Democratic Governor-elect Janet Mills supports expanding Medicaid. The state’s voters decided in 2017 to expand the program, but the current governor, Republican Paul LePage, refused to implement the expansion.

Kansas’ Democrat Governor-elect Laura Kelly stated in the campaign that she’d push for legislation to expand Medicaid during her first year in office. In 2017 the Republican-controlled Kansas House of Representatives and Senate passed legislation to extend Medicaid, but the current Governor Sam Brownback vetoed it. The Legislature couldn’t override his veto.

Wisconsin’s Governor-elect Tony Evers says he wants to expand Medicaid, which would provide coverage to at least an additional 80,000 people in that state.

Most of the people who apply for Medicaid work but do not earn enough to cannot afford health insurance. The program allows people between 50—64 years of age to get health care coverage.

Reference: AARP (November 8, 2018) “Medicaid to Expand in 3 States”

Family Members Charged with Felony Theft for Allegedly Stealing from Father

This is a sad reminder that much elder financial abuse takes place at the hands of family members. In this case, a son and daughter-in-law have been charged with taking more than $150,000 from the 86-year-old father.

Dauphin County Commissioner George Hartwick says that the fourth largest financial case since 2004 is now underway, reports Fox 43 in“Son charged for stealing $153,168 from 86-year-old father, officials talk elder abuse warning signs.” Chester Robert Garman III and his wife Kathy Alice Garman have been charged with felony theft and access device fraud for allegedly stealing from the man’s father over the course of four years.

MP900202201Dauphin County officials are using this elder financial abuse case as a reminder for the public to monitor those 60 and older for signs of abuse, neglect or financial exploitation.

Reports of elder abuse in the Pennsylvania county continue to rise every year. Thus far in 2018, county officials have received more than 1,600 reports of elder abuse.

"In Dauphin County we want to make it clear that if there are suspected abuses occurring, we will take actions," said Hartwick. "We are communicating, and we will do everything to make sure we are protecting out seniors and bring those individuals who perpetrate those crimes to justice."

It’s not uncommon in elder abuse cases—such as the Garman's—for a person familiar to the victim to be the bad actor, someone they know and trust. The Dauphin County Area Agency on Aging says there are many signs of abuse. If a person sees anything they think is questionable, they should call the authorities.

Elder abuse can come in many types:

  • Physical elder abuse: the non-accidental use of force against an elderly person that results in physical pain, injury or impairment;
  • Emotional elder abuse: causing the senior emotional or psychological pain or distress, like intimidation through yelling or threats and isolation;
  • Sexual elder abuse: contact with an elderly person without their consent;
  • Elder neglect or failing to fulfill a caretaking obligation;
  • Financial exploitation: unauthorized use of an individual’s personal funds or property; and
  • Healthcare fraud and abuse by unethical doctors, nurses, and other professional care providers.

The County’s District Attorney advises families to have a power of attorney put in place, especially if there is a caregiver who has access to the senior’s financial assets. The power of attorney provides a clear delineation of what the obligations are of the caregiver to the person receiving the care.

Reference: Fox 43 (October 22, 2018) “Son charged for stealing $153,168 from 86-year-old father, officials talk elder abuse warning signs”

Countdown to Retirement with Three Simple Questions

To help plan for retirement, it helps to move from asking global questions, like “Can I afford to retire?” to more specific questions, like “What’s my monthly cost of living right now?”

Sometimes retirement planning is so overwhelming that people just shrug their shoulders and hope that things work out. That’s a terrible way to plan for the last two or even three decades of your life. Plus, says Motley Fool in a recent article titled “Don't Even Think About Retiring Until You Can Answer These 3 Questions,” if you can’t answer three basic questions, maybe you’re not ready to start thinking about retirement.

MP900384841Can you believe that just 38% of Americans say they have a long-term financial plan, according to a recent survey? Let’s look at three important planning questions.

When to claim Social Security. Many people think that retirement and claiming Social Security benefits occur at the same time. However, they don't have to. You could elect to retire at age 60 but wait to claim your benefits until you reach 65. Remember that the amount of money you get in benefits is linked to the age at which you start claiming them. Age 62 is the earliest you can claim Social Security. However, if you do, your benefits will be reduced by up to 30% of what they could be. For every month you wait, you'll receive slightly more with each check up to age 70. Your full retirement age (FRA) is the age when you’ll get 100% of the benefits to which you’re entitled. Waiting can have its advantages, but there's no single right answer for when you should start claiming. It all depends on your personal circumstances.

Will your retirement savings last? Take a look at how far your savings will last during retirement. To determine how far your money will go, calculate the amount you'll need each year to get by during retirement. With a number in mind, you'll be able to better determine how long your current savings will last. You might realize that you need more than you anticipated, especially if you're going to be spending several decades in retirement.

Paying for healthcare costs. Healthcare costs are one of the largest expenses in retirement. Know that the average retiree spends about $4,300 per year on out-of-pocket healthcare expenses. A total of two-thirds of that is spent on premiums. It’s important to understand that Medicare will help cover many healthcare expenses you'll face, but it doesn't cover everything.

Circumstances often dictate when people retire; they lose a job in their mid to late 60s or illness prevents them from working. However, even when that is the case, understanding where you are from a financial perspective can help make your retirement work in your favor.

Reference: Motley Fool (October 9, 2018) “Don't Even Think About Retiring Until You Can Answer These 3 Questions”

Ohio Expands Mandatory Reporters of Elder Abuse

It makes sense that the people who come in contact with the elderly about their health and property be required to report any kind of elder abuse. After all, they are on the front lines where abuse often occurs.

Ohio has expanded the number of professionals who are now required to report elder abuse, adding bank employees, financial planners and notary publics, who you might expect to be on the list, as well as pharmacists, dialysis technicians, firefighters, first responders, building inspectors, CPAs and real estate agents.

MP900383004Their ability to spot issues from many different perspectives, increases the chances that more cases of elder abuse will be reported and addressed.

The Dayton Daily News’recent article, “This new law means many more Ohio officials are watching out for elder abuse. Here’s why it was passed,”explains that elder abuse can include exploiting another person’s resources; physical, emotional, or sexual abuse; or neglecting to meet a person’s basic needs. There were more than 16,000 reports of abuse, neglect, and exploitation of Ohio adults aged 60 and older in 2017. However, only one in 14 cases is reported, according to National Institutes of Health estimates.

“This expansion of mandatory reporters will help us in our goal of protecting our vulnerable family members, friends and neighbors from harm,” said Cynthia Dungey, director of the Ohio Department of Job and Family Services, which supervises Ohio’s Adult Protective Services program.

Financial institutions are one of the main places where exploitation can be recognized. Officials are educating tellers to identify the signs, such as an older customer appearing confused or distant or withdrawing unusual amounts of money.

Other signals of elder abuse can include seniors living in isolation, missing appointments, appearing frightened or avoiding specific people.

Whenever there is a dramatic change in behavior patterns, including a withdrawal from their usual activities, a change in mood or temperament or flinching at any kind of physical contact, elder abuse may be occurring.

Elder abuse risks increase when poverty, declining health, dementia, domestic violence or other traumatic events are present. The elderly person with no family, support system or access to community services is more likely to become a victim.

Reference: Dayton Daily News (September 29, 2018) “This new law means many more Ohio officials are watching out for elder abuse. Here’s why it was passed.”

Preparing for the Realities of Aging

A healthy life where you retain all your faculties and enjoy yourself, is definitely preferred to decades of dementia. We don’t get to choose, but we can plan.

As Baby Boomers continue to change the face of aging, and so many embrace the idea of genetic testing, many are confronted with a harsh picture of what their future may bring. If that includes dementia, there are facts you need to know and myths that need to be uncovered.

MP900439289The (Bryan TX) Eagle’s recent article, “Alzheimer’s disease: Five common myths, busted,”reports that, according to the Alzheimer’s Association, one in three seniors dies with Alzheimer’s or another type of dementia. There are up to 5.7 million individuals who live and die with the disease, which makes it the sixth leading cause of death in the United States. The article provides five common myths about Alzheimer’s disease.

Myth # 1: Memory loss is a normal part of growing older. A slip of the memory may well be a normal part of growing older. While these forgetful moments may cause a bit of frustration and embarrassment, they don’t affect our ability to live an independent life. However, if a loved one has trouble remembering commonly used words or loses the ability to communicate, it could be a potential symptom rather than a natural senior side-effect.

Myth # 2: Alzheimer’s can be reversed if it’s diagnosed early.No. Unfortunately, there's no treatment that will reverse the progress of Alzheimer’s disease. However, although there are therapies and drugs that can slow down the neurodegeneration associated with Alzheimer’s, there is no known cure. Even so, early diagnosis has its benefits, like better symptom management, a safer patient environment and the ability to plan for the future.

Myth # 3: Alzheimer’s just affects older people. Some Alzheimer’s patients can get diagnosed in their 40’s or 50’s. The early onset Alzheimer’s is uncommon (just 5% of patients are diagnosed before age 65); an accurate diagnosis is important to help the family cope with the realities of the disease.

Myth # 4: A diagnosis of Alzheimer’s means your life is over. Many people live years or even decades, before the disease claims their lives. Alzheimer’s effects each patient differently. The disease is commonly divided into three stages. The first or “mild” stage is where the patient is able to live a mostly normal life. The middle or “moderate” stage requires more extensive care. And in the late or “severe” stage, the patient needs 24/7 supervision and medical assistance. Life many never be the same with an Alzheimer’s diagnosis, but it’s far from over.

Myth # 5: There’s little you can do to protect yourself financially, if you are diagnosed with the disease. A serious diagnosis of any type can drastically impact a family, but it’s important to understand that there are things you can and should do to help your loved ones manage what comes next, emotionally as well as financially. Look at these ways you can help:

  • Create a list of all financial accounts;
  • Review the titles and names on each account;
  • Look at your options for paying for medical care, such as existing insurance policies, Medicare coverage, or other sources of funding;
  • Consider designating a Durable Power of Attorney for Healthcare, so that a trusted person can make decisions for the patient if there’s an accident or incapacitation;
  • Communicating preferences for living arrangements, medical assistance, and end-of-life care; and
  • Be sure your will is up to date.

Speak with an elder law attorney, who will be able to help you and your family navigate this process. He or she will also be able to recommend local resources that will help make this journey as good as it can be.

Reference: The (Bryan TX) Eagle (October 4, 2018) “Alzheimer’s disease: Five common myths, busted”

How Does Medicaid Treat College Savings Funds?

Saving for college but needing to receive Medicaid is a complicated equation.

The answer “It depends” is not much of a comfort when considering how college savings accounts will be treated for Medicaid purposes.  However, it is, unfortunately, the most accurate answer. There are several factors that must be considered:

  • What type of account you used to set aside the college money;
  • How and when you funded the account; and
  • Whether you still have access to the money.

A recentnj.com article asks, “Will my college savings be counted for Medicaid?” If you can liquidate an account and access the money that you deposited, Medicaid will typically expect you to do so to fund your own care for as long as possible. Another challenge is that Medicaid will always penalize gifts. Odds are good that the funds you added to these college accounts are gifts.

MedicaidHowever, there may be an exception: if the account was funded prior to the 60-month lookback period, the applicant can’t be penalized for making a gift.

Let’s examine why the type of account is also important.

If the money was put into a 529 plan, the funds aren’t part of the donor's taxable estate, and the assets aren’t includible. However, if the funds are invested in an account “ITF” (“in trust for”) a grandchild, then the funds would be includible. It its calculations, Medicaid examines all assets in the name of the applicant. Assets held in 529 plans—although the donor's name may be shown as the participant—are deemed to be a gift, when the assets are transferred and, therefore, are no longer the donor's asset.

To be safe, grandparents who set up 529 plans for their grandkids should change the participant to the grandchild's parent or guardian. This entirely disconnects the donor's name with the account.

If the grandparent just added a grandchild's name on one of his savings accounts, then that would be includable. This is true even if it were completed more than 60 months earlier, because it wouldn’t be deemed to be a completed gift.

When it comes to the intersection of college savings and Medicaid, you may need to speak with an elder law attorney who will be able to review how the college savings assets are owned, and whether or not they’ll impact your Medicaid eligibility.

Reference: nj.com (September 19, 2018) “Will my college savings be counted for Medicaid?”

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