ABLE Savings Registry – The Gift that Keeps on Giving

ABLE Program in New JerseyABLE accounts are special, tax qualified disability savings vehicles for seriously disabled individuals, who had a qualifying disability incurred prior to age 26.  As long as the rules of the ABLE program are complied with, a seriously disabled individual can receive up to $15,000 (in 2019) in funds in an ABLE account without the funds being counted against him in determining the individual’s eligibility for public benefits, including Medicaid and Supplemental Security Income.

Favorable income tax provisions apply to protect the income earned on funds contributed to an ABLE account, as long as the contribution is not distributed out of the account, or if the contributions are distributed out of the ABLE account, any income is not subject to federal income tax to the extent that it is spent during the same calendar year for qualified disability related expenses.

Qualified disability expenses are expenses which relate to the account beneficiary’s blindness or disability and enhance his or her enjoyment of life as a result of the disability. Qualified disability expenses can encompass basic living expenses, transportation, education, assistive technology, legal expenses, medical care and education and training.

Here is a digital-age tip for parents, grandparents and gift-giving relatives of young adults who are eligible for an ABLE account and want to attend college. There is a new, web platform www.giftofcollege.com which can help make saving for college (while continuing to qualify for means-tested public benefits) easier than ever.  The new platform enables a disabled individual eligible to link their ABLE account to an online profile. Invitations to contribute funds can also be sent electronically.

For more disability savings strategies and resources, consult with an experienced special needs and disability lawyer.

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

Is Your Emotional Support Dog a Bone of Contention?

emotional support dog

Dogs can bring us companionship, a sense of purpose and enhanced health. Fortunately, courts (and landlords) are increasingly recognizing that an emotional support dog may be a reasonable accommodation of a disability under federal laws such as the Fair Housing Act. Castillo Condo Ass’n. v. U.S. Dep’t. of Hous. & Urban Dev., 821 F.3d 92, 96 (1st Cir. 2016); HUD No. 13-060 (April 30, 2013); McFadden v. Meeker Housing Auth. Civ. No. 16-cv-2304-WJM-GPG (D. Colo. February 15, 2019).

This law prohibits discrimination in the terms and conditions of housing rented to a disabled person where her disability substantially limits one or more major life activities and the landlord denies a request for a reasonable accommodation necessary to allow the disabled individual an equal opportunity to use and enjoy the dwelling. 42 U.S.C. 3604(f)(3)(B).

Major life activities are defined as basic functions such as caring for one’s self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning and working and presumably, studying in an academic environment.  Discrimination in the terms and conditions rented housing on the basis of a handicap is prohibited when there is a refusal to make a reasonable accommodation in the rules, policies or practices or serves when the accommodations may be necessary to allow the person an equal opportunity to use and enjoy the dwelling. For instance, in the case of a college student diagnosed with severe anxiety and depression, if the disability interferes with the student’s activities, for example, by interfering with sleeping patterns, which interferes with the student’s abilities to study effectively, attend early morning classes, and to socialize, and the soothing presences of an emotional support animal will greatly alleviate the anxiety, stress and depression, making it possible for the student to regularly sleep through the night, attend classes, and socialize with her peers, the presence of an emotional support animal may be a reasonable accommodation for this student.

An emotional support dog may be a reasonable accommodation for an individual whose disability. However, the disabled individual should be careful to comply with the landlord’s legitimate safety and hygiene related policies, including walking the dog in designated areas and compliance with pooper scooper requirements. Woodside Village v. Hertzmar, 8 Conn. Super. Ct. 801 (Conn Super Ct 1993).  For more information on reasonable accommodations under federal law, contact an experienced dog-loving, disability lawyer.

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

Do I Need A Physician Orders for Life- Sustaining Treatment?

POLST.jpgA POLST (physician’s orders for life sustaining treatment) is a portable medical order, signed by a doctor, which contains the treatment wishes of an individual who is either seriously ill, or medically frail. The physician’s orders help the individual exert some degree of control over their end of life care.

Some individuals nearing the end of their life do not want to receive emergency medical treatment.  If the individual is residing in a long-term care facility, the current standard of care during an emergency is that the facility must call 9-1-1 in an emergency and the emergency medical personnel must to take every reasonable means to safe a life.  In an emergency, the decisions makers under a health care power of attorney may not be able to be reached immediately, and emergency medical personnel will not have time to read a legal document.  If your loved one nearing the end of life wishes not to receive emergency medical services (such as intubation, cardiopulmonary rescuscitation, antibiotics, and other treatments), a POLST should be prepared and provided to the long-term care facility.

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

Choupette’s Legacy – Why Estate Planning Matters

Choupette royalIt is speculated that Choupette Lagerfeld, the pampered Parisian pet of the iconic late German fashion designer, Karl Lagerfeld, may have a stake in Lagerfeld’s vast fortune.

Choupette Lagerfeld moves in the circles of the rich and famous. Ironically, her most universal legacy could be to demonstrate why estate planning matters for everyone, wealthy or not.

Choupette’s situation makes clear that a clever estate plan can transform the impossible into the possible.  With an estate plan opting into German law (which, on information and belief, may allow the use of pet trusts), even a cat living in France (the law of which apparently prohibits an animal from inheriting) can become an heir.

If Karl Lagerfeld died without any estate plan, and if Choupette had not already amassed a fortune of her own through social media and advertising, she could descend rapidly into a downward spiral from riches to rags by taking nothing from her master’s estate.

An estate plan enables anyone with property (whether a fortune or a modest estate), to literally reach back from the grave, provide for loved ones (including pets) and retain some residual control over those left behind.

An estate plan can protect an unmarried, unrelated cohabitant by allowing her to remain in your home after your death, with any inheritance tax liability paid from life insurance or liquid funds in your residuary estate.

An estate plan can protect an inheritance for a special needs child without disqualifying the child from Medicaid or Supplemental Security Income.

An estate plan can ensure that the life savings you worked hard to accumulate (and your personal affairs) will be kept private by avoiding probate with a revocable trust.

An estate plan incorporating an irrevocable trust or lifetime gifting can help reduce inheritance taxes legally.

An estate plan (using a trust) can protect your life savings or your life insurance proceeds from being blown by little Johnny on a Maserati, upon reaching age 18. An estate plan can even bring hope to beleaguered parents and grandparents everywhere.  Suppose your heart’s sole desire is for little Susie or Johnny to take medication/ finish college/ remove the tattoos/get a haircut and get a real job. Having all your post-mortem dreams ultimately come true could be as simple as leaving a conditional bequest in your last will and testament or trust. However, conditional gifts are very rarely written into wills or trusts due to the heartache and hard feelings caused.

Choupette’s legacy teaches us that even if your estate is limited, the possibilities are not.  For best results, consult an experienced and knowledgeable tax and estate planning attorney, who can help you effectuate your testamentary intentions.

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

Restoration of Capacity?

Restoration of Capacity

If an individual is determined unable to make her own decisions, a judgment of incapacitation and awarding guardianship may issue.

Sometimes, the conditions which led to a judgment of incapacitation are not permanent. In this case, the subject of the guardianship order may seek an order restoring her to legal capacity, which would allow her to resume making decisions for herself.

In the Matter of the Guardianship and Conservatorship of Lois Crist, No. 118-973 (Ct. App. Kansas, February 1, 2019)(per curiam), an 82 year old widow residing in a rural home requested an order restoring her to capacity.   At the time of the original impairment order, the ward’s home was uninhabitable due to mold and clutter, and she was dirty and unkempt, and suffering from a gait dysfunction, a vitamin B-12 deficiency, and a urinary tract infection.  She was removed from her home, adjudicated impaired, hospitalized, discharged to a nursing home, and then to assisted living, where she thrived. The total value of her estate was over $1.4 million.

Nearly two years after the original hearing, the ward had a falling out with her family and filed a petition for restoration. She argued that her impairment was temporary and attributable to an altered mental state from a urinary tract infection. She was evaluated several times, with disparate results, but two tests determined that she was unable to drive or to manage her housekeeping independently.

The trial court declined to restore her legal capacity for decision-making in part because her answers to the court’s questions regarding how she would live independently in a rural setting were unrealistic.

While we will never know all the facts, it is quite possible that with effective representation and thorough preparation, the petitioner might have been better prepared to anticipate and effectively answer the court’s questions and she might have successfully obtained a restoration of capacity order.

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

Once A Caregiver Child, Always A Caregiver Child

caregiver child

In general, one cannot give away her assets and go on Medicaid within the next five years. If an individual who gives away assets (donor) applies for Medicaid within the sixty month period following the date of the last completed gift, the individual will usually be subject to a period of time during which Medicaid will not pay for their long-term care. The length of this period is related to the amount of the total gifts during the five year Medicaid look back period, and is referred to as a Medicaid penalty period.

An exception to the Medicaid penalty period and any Medicaid liens is the transfer of a home by an ill parent to a caregiver child.  If the child moves into the home of the parent, and provides such care to the parent for a continuous, two year period as will keep the parent from entering into a nursing home, then the parent may transfer the home to the child without any penalty period.  This authority for this exception comes from the federal Medicaid statute and is black letter federal law.

Since 2015, I have heard of several instances where a parent applying for Medicaid was awarded the caregiver child exemption while the parent was alive, and pursuant to the exemption, the home was transferred out of the parent’s name to the child.

After the parent’s death, the child is notified that the house is nevertheless subject to a Medicaid lien.

This should not be the case for several reasons. First, when the parent gives up any interest in the home by giving the home away to the caregiver child, the home is now beyond the parent’s future Medicaid estate and it cannot be subjected to a Medicaid lien.

In addition, any attempted claw back of the home into the deceased parent’s Medicaid estate, after the parent was previously determined eligible for Medicaid without any penalty imposed for the home transfer, denies the parent, the child and all subsequent third party bona fide purchasers of the home for value from the child, of due process without notice and an opportunity to be heard.  As a policy matter, these reports are very troubling because of the loss of evidence over the passage of years and because the new “policy,” which was not enacted with public rule-making, will seriously undermine the stability of real estate transactions statewide.

Options may include challenging the new notice in the Chancery Courts. For an assessment of your options, consult an experienced and knowledgeable elder law attorney.

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

Have Medical Bills, Game Plan Needed

Unpaid Medical BillsIt’s important to have a game plan for medical bills, and the game plan should probably not involve suing the hospital as a preemptive strike. That is precisely what occurred in Pitell v. King County Public Hospital, No. 767720-8-1 (Court of Appeals of Washington, Div., 1, August 13, 2018).

Steven Pittell had over $50,000 in his bank account but was uninsured and ineligible for Medicare and Medicaid, when he was admitted to the hospital.  He signed a consent form that stated in part:

I agree, whether I sign as a representative or as a patient, that in consideration of the service to be rendered to the patient, I agree to be personally responsible for the balance due after any applicable insurance payments. 

After Mr. Pittell was discharged, he was billed over $32,000 for the medical services provided to him. His application for charity care was denied due to his bank balances. The hospital did reduce the charge by 20% to approximately $25,800, because Pittell was uninsured. A majority of the five largest commercial insurers would have paid a higher rate on the patient’s bill.

Rather than paying the bill, Pittell sued the hospital on behalf of a class of similiarly situated patients, claiming that the consent form was unenforceable because the hospital failed to disclose its chargemaster (i.e., the hospital’s standard price list for hospital services) at the time of treatment.

The trial court rejected this argument, dismissing Pittell’s case and issuing a judgment requiring him to pay the amount of the discounted bill, plus attorney’s fees and costs.  The Court of Appeals of Washington affirmed.

Had Mr. Pittell purchased insurance on the exchange, he would have had coverage. Even if he did not, an attorney could advise him of important options, such as filing for bankruptcy, whether any federal benefits he was receiving (such as Social Security, the Veteran’s Improved pension) or a military or civil service pension or salary are protected against garnishment under federal law. The attorney could also have negotiated a reasonable payment plan.  If for some reason, the bill was already covered to some extent by Medicare, Medicaid or other health insurance, an attorney could help obtain evidence of other payments from the medical provider, review the bill, determine whether the amounts paid were accurate, and require the hospital to reduce the amount outstanding by the amount of any prior payments. If there is some insurance coverage, an attorney can also advise whether your state prohibit balance billing.

For more information about the circumstances under which federal benefits are protected, see my blog, When Are My Federal Benefits Protected?

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.