Written by Robert T. Nickerson
When many people hear the term “estate plan”, they assume that the direction only flows from adult to child; as in once something happens to the parent, when the child (assuming their an adult) will be the beneficiaries to their assets. What most don’t know is that there are situations in which it can go to opposite direction as well. This is called a “reverse estate plan”.
To start, it’s usually not about ensuring that parents can inherit from adult children (though that can also be the case). What it is about is creating some wealth opportunities for the family after taxes.
As time flows and parents retire, it’s common that the adult children will end up in a higher tax bracket as their own income increases. Reverse estate planning ought to be considered especially if mom and dad don’t end up using all their lifetime estate and gift tax exemptions. The goal overall is using the estate plan to transfer assets in a more tax advantage way.
A good example would be that a irrevocable trust is set up. You have adult children that make the transfer (which would be assisted through an estate planning attorney). The parents then have a legal irrevocable trust crafted as a way to pass on those lifetime exemptions to their grandchildren or great-grandchildren. Though this would mean it couldn’t be changed once everything is officially signed, this would create very little federal tax.
What could also happen is using loans to help with assets that appreciate. So instead of taxable money being an asset for beneficiaries, the adult child would make personal loans to their parents. The parents then use that to purchase assets that can appreciate while also paying back that loan. That can be completely tax free! The parents can even make those assets lifetime gifts, by classifying them as lifetime exemptions.
These are just some examples of how these methods can be done from child to parents through estate plans as a way to reduce to tax burden. One of the reasons that I wanted to bring this up is because by 2025, this law could be changed.
The 2017 is set to expire after 2025 in which the lifetime exemptions would be cut in half. Rather then wait, I would suggest thinking about a reverse estate plan tactic to handle assets you’d rather not be taxed on. It can benefit the family, but especially the children you’d want have a beneficiaries. Excess exemptions are only good to use for a limited time.
The Nickerson Law Office can help guide you through potential estate planning that can ensure a lower or even no tax burden, depending on your assets or the kind of trust that needs to be set up. Click on the button below to contact us for more information.
Written by Jill Roamer J.D.
The Americans with Disabilities Act (ADA) is a broad-sweeping federal law meant to eliminate discrimination against those with disabilities. The ADA doesn’t specifically address polling places, but Title II requires equal voting rights for those with disabilities. As such, state and local governments must ensure that those with disabilities have physical access to polling places. In addition, reasonable modifications of voting procedures are required to meet an individual’s needs.
However, new trends in voting laws over the last couple of years are being hailed as discriminatory towards those with disabilities or mobility issues. Those with disabilities or mobility issues oftentimes use non-traditional methods to cast their votes: mail-in ballots, ballot drop-boxes, curbside voting, or inciting the help of another at the voting booth. Altering these methods is often the focus of these new laws. The Brennan Center for Justice states that “Between January 1 and December 7 , at least 19 states passed 34 laws restricting access to voting. More than 440 bills with provisions that restrict voting access have been introduced in 49 states in the 2021 legislative sessions.”
Up first is the new law in Texas, which was effective in December 2021. Voters who mail in their ballots must now provide their driver’s license number on the ballot (or the last four digits of their social security number if they do not have a driver’s license); that number must match the number provided on their voter registration. For some, their voter registration paperwork was submitted years ago, and they may not remember what number was provided. Or, the voter may not be aware of the new requirement and not provide that information on the ballot.
In addition, the new Texas law has additional requirements for assistants at the polling location. The voting assistant must now sign a form containing their information and take an oath. There are now criminal penalties if the assistant helps the voter in any way that was not authorized by law or pre-approved with voting officials beforehand. These additional requirements will likely deter folks from assisting those with disabilities when voting. Finally, the Texas law now bans 24-hour voting and drive-through voting, and adds provisions to bolster the authorities of poll watchers.
Georgia’s S.B. 202 modified the rules regarding absentee ballots. The old law allowed an absentee ballot to be requested up to 180 days before the election. Under the new law, that timeframe is decreased to 78 days and cuts off the ability to request such ballot 11 days before election day. Absentee voters must now include their driver’s license number on the ballot. Georgia’s new law also limits the number of drop boxes that can be instituted.
Finally, there is now a ban on curbside voting in Alabama; all ballots and voting machines must remain inside the polling place. While it is understandable that legislatures want to make voting more secure and fair, how does this interact with the rights of those who are disabled? Is there a way to maintain security and privacy while still affording accommodations for those who need it? For a handy list of all the recent bills and laws involving these issues, click here.
The Nickerson Law Office is committed to helping families with loved ones with special needs. Click on the button for more information about how we can help put you at ease and ensure your future is secure.
Written by Jill Roamer J.D.
A First-Party Special Needs Trust (SNT) and a Third-Party Supplemental Needs Trust (SNT) are used when a beneficiary would like access to extra funds without jeopardizing their eligibility for public benefits. Let’s review some key differences between these trusts.
The First-Party SNT is irrevocable and is used when the assets funding the trust belong to the beneficiary. This would be if an individual has money in the bank, or comes into money, such as via a settlement or inheritance. If the funds are obtained through a settlement, an MSA subtrust may be needed. (More on that in a bit.)
Public benefits programs will let that individual still have access to the money, via the terms of the trust, but a payback provision is required. The payback provision states that after the individual has passed away, any remaining funds must be paid to the state to the extent the state expended Medicaid funds on that individual. Any funds remaining after the state has been repaid can be distributed to residuary beneficiaries.
For social security benefits, in order for the corpus of the First-Party SNT to be a non-countable asset, the First-Party SNT must have been funded before the beneficiary’s 65th birthday. (See POMS SI 01120.203B.) If the beneficiary has a structured settlement and those payments extend beyond the beneficiary’s 65th birthday, the additional payments to the trust after the 65th birthday will not be a countable asset so long as the settlement was reached and the payments began before that magical birth date.
The federal statute that keeps the corpus of a First-Party SNT from being a countable asset for Medicaid-eligibility purposes is 42 U.S. Code § 1396p(d)(4)(A). As such, a First-Party SNT is oftentimes called a d4A Trust. Per that Code section, the trust must be funded before the beneficiary’s 65th birthday.
The beneficiary of a First-Party SNT must be disabled within the definition of § 1382c(a)(3). A First-Party SNT must be established by the beneficiary, a parent, a grandparent, legal guardian, or a court.
A Medicare Set-Aside (MSA) subtrust is needed when certain types of settlements are reached, such as a Worker’s Compensation claim or injury settlement. If a settlement is reached in a case where future medical payments will be made from the settlement money, Medicare wants to ensure the settlement funds designated for that purpose will be preserved. So those funds are placed in the MSA subtrust to be used for future medical expenses.
A Third-Party SNT is funded with assets that never belonged to the beneficiary. As such, a payback provision is not required and thus the terms of the trust are more favorable. This trust is used when someone wants to put their own money aside for the beneficiary’s care and benefit. There are no age restrictions on when the Third-Party SNT must be established.
The Third-Party SNT can be revocable or irrevocable. However, the revocable Third-Party SNT in ElderDocx is designed so as to become irrevocable on certain events: upon the death of the Grantor, when the trust is funded with retirement account benefits, or if someone other than the Grantor funds the trust with a specified dollar amount. While the Third-Party SNT is revocable, it is a grantor trust and the Grantor will be taxed on the income of that trust. If someone other than the Grantor funds the trust with a large dollar amount, the Grantor would likely not want to be taxed on the income from those funds.
The Grantor may choose to make the trust irrevocable from the onset if she knows that retirement account funds will be funded into the trust, if someone other than the Grantor plans on funding the trust with a substantial amount, or if she otherwise doesn’t want to be taxed on the trust income. Also, if the Grantor dies while the trust is revocable, the funds in the trust will be included in the Grantor’s estate; she may not desire that outcome and so she may design the Third-Party SNT as an irrevocable trust.
The First-Party (Self-Settled) SNT and Third-Party SNT are just two of the trusts available in ElderDocx. Other trusts you can generate using ElderDocx include a Revocable Living Trust, Medicaid Asset Protection Trust, Medicaid Family Protection Trust, Veterans Asset Protection Trust, Miller Trust, Sole Benefit Trust, Parental Protection Trust, and Secure Supplemental Needs Trust.
Written By Robert T. Nickerson
Ever since Britney Spears hit the news recently when she was declared independent, conservatorships have been getting more attention. This is nothing new. In fact, conservatorships are much more common then we think. Their not just something for celebrities to use when their not in the right mental mind to make sound decisions. Many families find themselves in a situation in which conservatorships are the best thing for a loved one. Perhaps someone is going through a mental toll of depression, bipolar disorder, dementia or the various types of conditions that prevent them from living on their own. Or perhaps their in a situation where they cannot be trusted with their own finances. Or even in the case of the Nickerson Law Office, the families with special needs loved ones who aren't sure what direction to take.
Conservatorships don’t have to be a bad thing; we just need to be sure that it’s being done when another person needs to step in for the well-being of someone else. So that’s why I found it interesting when retired actress Amanda Bynes made the rounds when it was announced that she filed to have her conservatorship terminated.
While she is not as famous as Britney Spears, Amanda Bynes certainly made an impact with children and families in the 90’s and early 2000s. Most remember her from her comedic television performances from a variety of Nickelodeon shows such as All That, Figure it Out, and her own sketch series, The Amanda Show. She’s no stranger to movies either, showcasing her talent in Big Fat Liar, Robots, Hairspray and Easy A. All of that couldn’t have been easy for a child actress to juggle. Like a lot of stories involving them as adults, because they never had the chance to experience an ordinary life and grew up within an industry that has an open dark side, she would succumb to a lot of temptations.
A mix of run ins with the law and being diagnosed with bipolar disorder only fueled the troubles she faced. She hit her worst in 2013 when she set a small fire on her parents driveway and was placed on a 72 hour mental health hold in a hospital. This set the path in place in which her mother was granted a temporary conservatorship over her daughter. This of course wouldn’t be temporary. Her mother then next year would again receive conservatorship over Amanda while the former actress had enrolled in college for fashion design. For the next nine years, as far as we know, Amanda had managed to take more control on her health and has settled well into her education to even receive a bachelors from FIDM.
It’s hard to talk about everything that happened behind closed doors, but it’s said that her estate has an estimated net worth of $3 million. We of course have no clue on what her relationship is like with her mother. She’s been active on her social media pages and has talked about her struggles with drugs and mental issues, but has been quiet about how she felt about her mom making the majority of her decisions. This has included treatment for mental health and substance abuse along with transitional living in sobor homes.
According to her attorney David A. Espuibias, the current conservatorship is set until 2023, but if they go to court and challenge that, it could be terminated earlier similar to how Britney Spears had been able to do so. A hearing is set for March 11.
So far, a capacity declaration has been filed by Espuibias. This is a legal form that’s completed by a medical professional who has had past experience with Amanda and can give an update on her current status. This form provides information for the court to determine if a conservatorship is needed. The hearing will also provide an opportunity for Amanda to prove that she can make medical, financial and legal decisions. This isn’t to say her mother can’t get involved, but rather if the retired actress can prove she is of sound mind to be fully independent.
Now whether she is of sound mind… only Amanda and her health care team knows. We’ll have to wait and see what happens, but I wanted to emphasize that no matter who you are, anyone can be in a similar situation. Conservatorships can both be a safety net for a loved one you want to help and a cage for someone who thinks their ready to get out but can’t. Plenty of estate plans can include what happens to those loved ones if their currently within a conservatorship. This is more common with elders and those with special needs but I’ve seen a variety of reasons.
The Nickerson Law Office is more then happy to help your family and talk about whether a conservatorship can be beneficial. Click on the button below to contact us for more information.
Written by Jill Roamer, J.D. & Marcheasa Minium, J.D.
Trusts are certainly not the most perspicuous of legal inventions, but they can be a critical part of any family with a loved one with special needs. Experienced professionals understand the nuances of the various types of trusts available, what language is necessary, and which trust would benefit a client in a given circumstance. But for those of us who need a little refresher, let’s get back to the basics and take a dive into some of the lingo and concepts of special needs trusts.
What are Special Needs Trusts?
A special needs trust is a type of trust specifically used for special needs planning. This trust allows a beneficiary to preserve access to public benefits while being able to benefit from trust assets on some level. As with all trusts, the Trustee manages trust assets for the benefit of the beneficiary.
What about distributions during the lifetime of the beneficiary? The trust can be designed where the Trustee can only make distributions that supplement government benefits, a supplemental distribution standard. One thing to keep in mind is that even if there is a supplemental distribution standard in the trust document, that standard really is discretionary if the beneficiary is not currently on public benefits. The trust document dictates that once the beneficiary is on public benefits, distributions may not supplant, impair, or diminish those benefits.
Or, the trust can be designed so that the Trustee can also make distributions that supplant government benefits, a supplemental and discretionary distribution standard. To supplant government benefits means to replace or decrease those benefits. So, the Trustee may distribute trust assets, knowing that the distribution could decrease the amount of government benefits received by the beneficiary, if it is in the best interest of the beneficiary. And, of course, the Trustee can also make supplemental distributions.
A first-party special needs trust, also referred to as a d4A trust (due to its location within the US Code), is a self-settled trust. This type of trust is funded with the assets of beneficiary, who is also the applicant of government benefits. The assets are used for the beneficiary’s personal benefit only. To curtail a Medicaid transfer penalty, this individual must be under the age of 65 when the trust is established and the individual establishing the trust must be either the beneficiary; a parent, grandparent, or legal guardian of the disabled beneficiary; or a court. If the individual is over age 65, a transfer penalty may be imposed when applying for certain long-term care Medicaid benefits.
The state must be the remainder beneficiary of any funds remaining in the d4A trust after the death of the beneficiary, up to the amount the state expended on benefits for them. In some states, the specific state Medicaid agency must be listed in the trust agreement. For most states, however, it is sufficient to give a generic reference to the state in the payback provision. After any government agencies are repaid for benefits received, any remaining trust assets is distributed to residuary beneficiaries.
A typical client that may benefit from a d4A trust would be one that has assets to preserve while still desiring to qualify for benefits. Maybe this client won an award or settlement and was already on public benefits and would like remain on those benefits. Maybe this client was the recipient of an inheritance and doesn’t want their new found wealth to disqualify them from benefits.
A subset of the d4A trust is one with a Medicare Set-Aside (MSA) sub-trust. This MSA is oftentimes required when there is a personal injury or worker’s compensation settlement. Medicare has an interest in preserving a certain amount of the proceeds of the settlement so they aren’t dissipated while Medicare is left paying for future medical expenses. So, a requirement of the settlement agreement may be to set aside a certain amount of the funds for future medical bills that Medicare would otherwise be forced to cover.
A third-party trust special needs trust, also known as a supplemental needs trust, is a trust funded by assets that belong to someone other than the beneficiary. This type of trust is not specifically authorized by US Code; there are no age limits for this type of trust to curtail a Medicaid transfer penalty. However, if the beneficiary has the power to revoke, terminate, or sell the trust for their own benefit, then it is a countable resource for Medicaid purposes. Otherwise, it is usually exempt. And because the assets used to fund the trust never belonged to the beneficiary, a payback provision is not required.
A common client scenario for a third-party SNT would be an individual with means who would like to set aside money for the care of a disabled friend or family member. This can be done during the lifetime of the donor or as a part of their estate plan. A typical estate plan usually contains contingent special needs trust provisions which direct the share going to a beneficiary who is on public benefits into a third-party supplemental needs trust.
A pooled trust, found in the US Code under 1396p(d)(4)(C), is also known as a d4C trust. It is established and managed by a charity or non-profit organization and is funded by the disabled person, for that individual’s sole benefit. The fundamental idea is that an individual’s trust is a subaccount within a master trust, a collection of other individual trusts. The managing entity oversees the collective individual trusts within the pool as a whole. The arrangement minimizes expenses for the individual trusts. This type of trust may need a payback provision, depending upon the particular trust’s joinder agreement and may have age limits, for pre- and post-age 65 transfers, depending upon state law. A typical client may be one with minimal assets to fund into the trust, so that a traditional d4A trust would be fiscally unreasonable.
Sole Benefit Trusts
A sole benefit trust, authorized by subsection 1396p(c) of the US Code, is a hybrid trust. This type of trust is used to preserve the assets of a Medicaid applicant. The grantor funds the trust for the benefit of a disabled person under age 65 – or for a disabled child or spouse of any age – typically without suffering from transfer penalties for those transfers. This trust is often used as a life preserver during Medicaid crisis planning.
Of course, the rules of a particular state may have restrictions or create additional requirements for a sole benefit trust. In some states, a payback provision may not be required if the trust is actuarially sound – a model explained in a previous ElderCounsel blog. Typically, the sole benefit trust must either pay out all assets within the beneficiary's life expectancy, be payable to the beneficiary's estate upon death, or include a payback provision reimbursing the state.
Nickerson Law specializes in special needs trusts and is more then happy to walk through the various types that could benefit your loved ones. Click on the button below to get into contact about how we can provide your family a bright and safe future.
Written by Robert Nickerson
It’s February, which means that for a lot of people, love is in the air. Valentines Day is more then a sweetheart’s day. It’s become something like Christmas to show how much effort we put into the people we love. This is why the holiday isn’t restricted to couples; I’ve seen plenty of gifts, flowers and cards from parents to their children and vice versa. Back before my lovely lady became my special one, I used to get cards from my mother every February fourteenth to remind me that I’m always loved (which I still like getting, I love you mom!). So I challenge you; how much do you care about your loved ones? A significant other? Your children? Your close family? Your friends? This is another reason why Galantine’s Day is also become popular for the single ladies out there. The day has become about the care for everyone. So I also ask you; have you considered putting your love into an estate plan?
This is one of the greatest gifts your could give to someone. True, it doesn’t have the same smell as a dozen roses nor does it have the sweet taste of a chocolate assortment. But what it does is ensure that your future will be secure. Your loved ones will be able to rest easily when the worst case scenario happens when your no longer around. I didn’t want to make this Valentines Day subject grim, but it’s important to highlight the dark before walking into the brightest of days.
According to a 2021 Gallup Poll, even with the Covid 19 pandemic, 46% percent of adults had no will of any kind. Though it only remains a small part of an estate plan, it still legally states how your assets (both physical and financial) will be distributed following your death. It also went into detail about how those that do have wills are mainly over the age of sixty-five. In this day and age, sixty-five may seems like nothing, but there’s still a large window beforehand in case something should happen. What’s worse is that without a will, a court will end up making the decisions in probate court. This will result in your family being forced to fritter their time, hoping that the appointed conservator will make the right choice. The same percentage number applies to adults who have a living will. I bet your thinking that they were the same thing. You’d be surprised to learn that a living will and an ordinary will are two different things.
A living will is like a healthcare directive; something that legally states what you want done to you when you cannot communicate in any fashion. The fact that this poll says few people have this is shocking. Especially when it also reveals that 25% of adults have had to made end of life decisions. This is one of the hardest things to think about when you have no clue what the other party wants.
So for this Valentines, consider taking a conservative approach to your loved ones and have them look at your current estate plan to see if it’s still that route you want to take. If you don’t have a plan in place, then it’s time to consider having a full document created. Some of the things that will come with an estate plan include:
The letter of instruction may as well be your most important love letter you compose. It may be scary, but its also essentially you communicating with your family.
All of this may seem very daunting, but the Nickerson Law Office is more then happy to explain in a simple manner on what the steps are. We can go through your current estate plan and advise how it needs to be updated or we can even help create a new one from the ground up. Click on the button before to contact us for more information. Absolutely no obligation.
Regardless, remember that your loved ones are the most important element in your life. Have a Happy Valentines Day and make it a lovely one.
Written by Robert T. Nickerson
The theater and Broadway world was saddened by the news of which acclaimed composer/lyricist Stephen Sondheim, had finally lowered the curtains to life when he passed away from cardiovascular disease on November 26th, 2021. He was 91 years old. His legacy was richly filled with his work such as A Funny Thing Happened on the Way to the Forum, A Little Night Music, Sweeny Todd and Into the Woods. He had also continued well into his old age, writing new songs and working with modern musical creators from Jonathan Larson to Lin-Manuel Miranda. He had won several Tonys, Grammys and even an Academy Award for his song “Sooner or Later” from Dick Tracy. I could go on longer with his work, but that would take too long. I wanted to talk about his estate plan, the kind of revokable trust that was set up, and why this matters to people who are considering something similar for their family.
It’s common for a lot of estate issues to be solved a couple of months after the death of a loved one. Regardless of how big or small the asset worth is, it still takes time to sort through the estate, contact with the law firm responsible for creating it and filing the probate petition. In the case of Stephen Sondheim, a will was created back in 2017. I haven’t seen it, but according to a New York Times article, a revocable trust was created and signed which lists the beneficiaries who’ll inherit his assets. Among his assets includes the rights to all of his shows in addition to anything that’s unreleased and unfinished. His net assets are estimated to be no higher then $75 million.
With his estate and assets being put into a revocable trust, this all but guarantees’ that his wishes will be fulfilled (and would have been should he have been disabled later in life). Revocable trusts are not only common with estate plans, but it’s something I also highly recommend. It’s even more handy should you have a loved one that’s disabled and needs a specific trust account for them. Sondheim had his set up so that the probate process would speed up. He named beneficiaries, some people and some organizations, that would receive his assets. Even if it’s challenged in court, because it was signed with proof that Sondheim was of sound mind, it would be very difficult to dispute.
This is one of the better examples of celebrities and estate plans. Yes, it’s more interesting when someone famous like Marilyn Monroe, Jim Morison, or Aretha Franklin is discovered to have botched their wills…if they had any. But it’s nice to hear when someone did something smart for once. It’s clear that Stephen Sondheim got the right people to tell him what he needed to do with his work when he was no longer around.
I’ll say now that your own personal estate doesn’t need to be worth $75 million in order to have your own revocable trust. You don’t need a million or even thousands of dollars worth of assets. What you simply need is an agreement with your loved ones on how you want your assets distributed and who’ll be named as beneficiaries. Click on the button below to know more how our offices can help your family.
Written by Jill Roamer, J.D.
The Deficit Reduction Act of 2005 (DRA) did many things. It implemented new whistleblower protections, changed the annuity rules, allowed states to vary premiums and cost-sharing for Medicaid benefits, and instituted the “Money Follows the Person” rule. But the heavy hitters of the DRA were the modifications of the look-back period and the penalty period rules.
The look-back period is the time in which a Medicaid agency can scrutinize asset transfers. Certain transfers during this time may incur a penalty period where the applicant isn’t eligible for benefits. The DRA lengthened the look-back period to 60 months. Importantly, it also changed the rule that stated the penalty period began in the month the assets were transferred. After the DRA, the penalty period doesn’t begin until a Medicaid application is filed and the applicant is otherwise eligible for benefits.
Forty-nine states implemented the new DRA rules, as they were required under federal law in order for states to continue receiving federal Medicaid funds. Since California’s implementing statute (Welf & Inst. Code 14005) contained two built-in protections from the DRA rules being imposed immediately, California is still operating under pre-DRA rules. The statute expressly states that its provisions are not enforceable until the Department of Health Care Services completely finalizes its procedures for adopting regulations in final form. (Draft regulations have yet to be issued for public comment.) In addition, the statute expressly limits the DRA implementing amendments to prospective application. Thus, it appears California will not feel the full brunt of DRA for some time to come.
In any event, California is the lone wolf in the union who has yet to fully implement the DRA; California operates on pre-DRA rules. And this is why Californians can take advantage of a Medicaid-planning technique called stacked gifting.
In order to understand stacked gifting, one must understand how the penalty divisor works. All states have a penalty divisor. Some states have one divisor for the whole state; others have regional or institution-dependent divisors. (The divisor amount changes over time and is usually based on the average private pay rate for nursing home care in that state.) The amount of the transfer made during the look-back period is divided by the figure for the divisor and this will determine the penalty period. For example, a $100,000 uncompensated transfer during the look-back period in a state with a $10,000 penalty divisor will result in 10 months of Medicaid ineligibility ($100,000 / $10,000 = 10).
Stacked gifting involves multiple gifts to possibly multiple recipients in the same month. The periods of ineligibility run concurrently and if the amount of the gifts is under the penalty divisor amount, the period of ineligibility is zero months since it is rounded down.
Here is an example. The California divisor is currently $10,298. On January 1, 2022, Sam gifts $10,000 each to ten different family members. On January 2, 2022, Sam does the same thing and gifts $10,000 each to his ten different family members. Each of the January 1 gifts results in a 0.97 period of ineligibility ($10,000 / $10,298 = 0.9710). Each of the January 2 gifts results in a 0.97 period of ineligibility. However, under California rules, penalty periods are rounded down. So, 0.97 is rounded down to zero and Sam has given away $200,000 and suffers no period of ineligibility for nursing home Medicaid benefits.
Contrasting our example with the other 49 states who have implemented the DRA, Sam’s penalty period wouldn’t start until he filed his Medicaid application and was otherwise eligible. If the uncompensated $200,000 was gifted during the prior 60 months, Sam would be looking at a penalty period of roughly 19.5 months ($200,000 / $10,298 = 19.42). Sam would have a long time to wait before he could receive benefits!
Yes, Californians have it easier when it comes to their gifting rules, but they also operate in a state of uncertainty. California practitioners have long been holding their breath, waiting for the state to implement the DRA. As of now, that implementation is nowhere in sight.
The Nickerson Law Office has dealt in many cases involved in this sort of thing. If you want more information, don't be afraid to reach out to us. Jeffrey, Matrona or the paralegals would love to explain how all of this can benefit your family. Click on the button below to contact us.
Written by Jill Roamer, J.D.
Dean and Patricia were married for more than 50 years. In early 2017, Dean entered a nursing home. Patricia, acting as Dean’s authorized representative, executed the residency agreement with the nursing home. About six months later, Patricia filed an application for Medicaid benefits on Dean’s behalf. It was denied and several more applications were submitted before one was eventually accepted.
Dean died about 3 months later. The nursing home filed suit against Patricia, seeking Dean’s unpaid balance and alleging breach of contract, unjust enrichment, and responsibility under Iowa Code Section 597.14. The trial court found for the nursing home under Section 597.14 and rejected all other claims from both sides. Patricia appealed and now we have the instant ruling out of the Court of Appeals of Iowa.
Iowa Code Section 597.14: “The reasonable and necessary expenses of the family and the education of the children are chargeable upon the property of both husband and wife, or either of them, and in relation thereto they may be sued jointly or separately.”
Patricia argued that nursing home expenses are not “reasonable and necessary expenses of the family.” The court here quoted a case that is more than 100 years old, McDaniels v. McClure, 120 N.W. 1031, 1032 (Iowa 1909), which stated: “The term ‘family expense’ has not been very clearly defined in our cases, and perhaps no definition should be attempted. Generally speaking, the only criterion which the statute furnishes is that the account must be for items of goods furnished for and on account of the family, and to be used therein. No limitation is put upon the expenditures, and it need not appear that they be ‘necessaries,’ as that term is generally used. It has been held that a cook stove and fixtures, wardrobes, bureaus, bedsteads, organs, watches, and other jewelry, medical services, wearing apparel, etc., are family expenses. It is essential, of course, that the expenditures be for property which was used or kept for use in the family. But a reaping machine or other agricultural implements, used by the husband in the prosecution of his business of farming, rent of a farm, medical assistance to a husband away from home, or money borrowed to pay for goods furnished the family, are not properly chargeable as family expenses.”
Subsequent case law cited by the nursing home reiterated that medical and hospital expenses are necessary family expenses and thus are recoverable. In turn, Patricia argued that part of the nursing home charges were for non-medical things, such as living quarters, cable, laundry, and maintenance. Of course, the nursing home responded that these other things were necessary to provide medical care to Dean. Patricia lost the argument and the appeals court rules that Dean’s nursing home expenses were reasonable and necessary family expenses. As such, Patricia is liable for the bill under Iowa Code Section 597.14.
As an attorney whose seen a lot of cases in California, its common that a lot of families will try and argue that medicaid expenses should be paid for my healthcare providers. These are very hard to justify and I'm not surprised by the various court rulings.
This is also why it's very important to figure out medicaid and long term health care expenses way before the time comes. Estate plans can help set everything up so that last minute decisions aren't necessary. The Nickerson Law Office can help look over old estate plans to see if they can still be used and even create a new one if needed. Click on the tab below for more information.
Written by Jill Roamer J.D.
Even in the beginning stages of the pandemic, advocates for nursing homes and other care facilities warned of staff shortages. And their trepidations have come true. Just last month, AARP reported that 30% of nursing homes they surveyed were experiencing staff shortages. Sadly, the report also showed that there were more than 4,000 deaths of residents from COVID-19 spanning the two months prior to mid-October. And there are seemingly endless news reports of staff shortages for companies who provide home health aide and in other care facilities, such as those for folks with intellectual or developmental disabilities.
What is causing the staff shortages? Some employees feared contracting the virus, and so found employment in places with less associated risk. Some facilities require employees to receive the vaccine and some employees didn’t want to comply. For many, it was a domino effect – the staff shortages caused the remaining employees to work even longer shifts and the employees got burned out. But probably the most significant contributing factor is the low wages in the industry. Salary.com reports that the average salary for a home health aide is $13/hour; payscale.com reports the average salary at only $11.84/hour. Payscale.com also reports the average pay for a Personal Care Assistant with disability support skills is only $11.91 per hour.
The staff shortages have become such an issue that the Wisconsin National Guard was called in to help staff four state facilities that provide care to people with disabilities. These particular facilities house people with behavioral health conditions. Some residents have been found not guilty of crimes based on their mental illness. While the service men and women will undergo 16 hours of Temporary Nursing Aid Training and a 59-hour CNA course, some advocates worry about the helpers keeping track of medications and participating in a seclusion and restraint processes. A seclusion and restraint tactic is invoked when a patient becomes beyond control. The aide worker locks the patient in a room and monitors their behavior. If the patient calms down, they are let out of the room. If the patient starts to harm themselves, they are restrained by their wrists and feet. This restraining process can be tricky, with potential harm to the staff or patient.
While there has been some legislation passed that aimed to prevent staff shortages and ensure vulnerable populations receive needed care, such as the American Rescue Plan Act, where is the end of the rabbit hole? With the pandemic lingering on, staff shortages may rise even further.
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