Master Your Finances Radio Show Appearance

Special thanks to Kurt Baker, host of the radio show “Master Your Finances,” for inviting me on his show to discuss how recent legal, economic and social changes, including the COVID-19 pandemic, can impact the finances of the elderly and disabled and their families, what you can do to protect your life savings. The segment aired on Sunday, September 13, 2020 at 9:00 AM on 107.7 FM TheBronc and is now available on demand on the Master Your Finances website.

Other topics we discussed during the segment on practical financial issues include:

  • How the SECURE Act really impacts your retirement plan and why it is very important to update estate planning for your tax-qualified retirement accounts (i.e., individual retirement accounts, 401(k)’s, 403(b)’s, 457(b)’s) 
  • Why life insurance and long term care policies are important investments in your family’s future
  • Estate planning strategies you might not have thought of, including a ROTH IRA conversion
  • How to ensure that your estate plan accomplishes what you intended 
  • Tips and traps for retirement income planning, including how the new individual retirement rollover rules affect your bottom line 
  • Health insurance tips and traps (and how to avoid them) in the event of a job loss
  • How to protect your home and your life savings while getting your loved one the best long-term care
  • How to navigate the changes to the long term care and Medicaid application process landscapes brought about by the COVID-19 pandemic
  • How the COVID-19 pandemic is exacerbating the mental health crisis and the important steps you can take to protect yourself and your finances if you are faced with an involuntary commitment

For more information on the “Master Your Finances” radio show, click here.

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.

The Free Britney Movement: How the Pop-Star’s Conservatorship Would Play Out in New Jersey

The Free Britney Movement: How the Pop-Star’s Conservatorship Would Play Out in New Jersey

If you follow pop-star Britney Spears on social media, you’re well aware that her posts as of late seem like less album promoting and more like a cry for help. These posts have gotten the attention of her fans near and far, who are responsible for starting the #FreeBritney movement in an effort to help end an almost two-decade long conservatorship her father has over her, which puts him in full control over everything from her money to her health and almost every aspect of her daily routine. In this post, I’m going to break down what a conservatorship is in New Jersey, what it means, how someone qualifies for one and what you need to do to get one granted.

Little background on Brit:

Britney’s original conservatorship order was entered by a California court to establish a protective arrangement for Britney, as an adult who cannot make her own decisions, similar to a guardianship under New Jersey law. Since every state is so different when it comes to this topic, among other things, I’m going to focus on New Jersey conservatorships since this is the state in which I’ve helped countless families obtain protective arrangements, like guardianship and conservatorship orders, for friends and family.

What is a conservatorship under New Jersey law and how can a conservatorship order benefit the conservatee (the person who is subject to a conservatorship order) and the caregiver of the conservaee?

In New Jersey, there are different types of protective arrangements for adults, depending on whether they are able to make their own decisions (incapacitated) or for whatever reason, even if they are able to make decisions, they are not able to manage their affairs independently.  A judgment of incapacitation awarding guardianship is a judicial order finding an adult person incapacitated (legally unable to make decisions) and can be entered against the wishes of the incapacitated person.  In contrast, a judgment of conservatorship is a voluntary arrangement under court order whereby another adult is appointed by the court to assist an adult who is competent but cannot function independently. As a court ordered arrangement, a conservatorship is more rigid and entails more supervision than a general durable power of attorney.  Because a conservatorship involves an individual with capacity (the ability to make decisions), in ordered to be entered, a conservatorship must be consented to by the proposed conservatee and close family members of the proposed conservatee must be notified.

How does a conversatorship differ from a power of attorney? A conservatorship differs from a power of attorney in that there is annual court oversight, through the filing of accountings and reports to the court regarding the well-being and the finances of the conservative.

When in New Jersey would a conservatorship be entered?

The case of In re Conservatorship of Halley, 777 Ad 68 (N.J.App.Div. 2001) is a classic example. There, a 92 year old man was hospitalized for injuries sustained in a motor vehicle accident and upon his discharge from the hospital, arranged for a local attorney who had managed his legal affairs for approximately seven years to serve as his power of attorney.  Although he had a brother and sister-in -aw in another state, he wanted to maintain control of his finances and living arrangements. The attorney managed Mr. Halley’s affairs and his finances and hired home health aides to care for him in his home, as per his wishes, and arranged for him to travel on a Disney cruise and to take a trip to Daytona Beach.

A former aide from the home health care company filed a complaint with Adult Protective Services alleging that the attorney and the home health care company were taking advantage of Mr. Halley. The APS social worker met with Mr. Halley and determined that he was competent after administering a mini mental status examination. APS filed a complaint and the court appointed an attorney to represent Mr. Halley in the proceedings. A guardianship could not be obtained over Mr. Halley, because he was intelligent, conversant, and clearly oriented to person, time and place and was able to make some decisions, but not necessarily to carry them out independently.

Mr. Halley’s nephew, upon being notified through his father of the conservatorship proceedings, attempted to intervene in the proceedings to secure his own appointment and an accounting of his uncle’s finances.  Mr. Halley expressed his concerns that his nephew was only after his money. The court-appointed attorney for Mr. Halley interviewed the attorney who was serving under the power of attorney, Mr. Halley’s physician, and others closely connected with Mr. Halley, and after reviewing medical and financial records, found that the attorney who was serving as the power of attorney should be appointed as Mr. Halley’s conservator. As a result, the attorney originally serving under the power of attorney was appointed as the conservator of Mr. Halley.

There is an old saying that sunlight is the best disinfectant. In the Halley case, the court’s scrutiny of the arrangement, which ultimately was determined to be beneficial to Mr. Halley in allowing him to maintain his independence and some control over his affairs, worked to the benefit of both Mr. Halley and the attorney who was helping him. This is a great example of how a conservatorship can protect both the conservator and the conservatee.  Mr. Halley was able to maintain his independence in the home, and manage his own affairs through the conservatorship arrangement. The attorney serving as the conservator remained subject to court oversight for the protection of Mr. Halley and no one could reasonably question her professional integrity or judgment in caring for Mr. Halley once the court became involved and essentially ratified her work for Mr. Halley

How long does it take to get a conservatorship in New Jersey?

The New Jersey judiciary is one of the best in the nation; however, due to the courts’ heavy dockets, getting a conservatorship will not be a fast process. You will have to schedule examinations with two doctors and obtain completed paperwork from those doctors and then a court filing (called a verified complaint and order for hearing) must be made.  Once the papers are filed with the court, they are reviewed by the Surrogate, sent to the judge for review and assignment of a hearing date, and there is typically a delay of anywhere from 30 days to up to two months between the date of filing and the hearing date.

Key takeaway: If you are caring for a friend or neighbor and you have a professional license, obtaining a judicial blessing of the caregiving relationship through a conservatorship can protect your license and your career from the stress and adverse consequences, which could otherwise result from an investigation and/or complaint by Adult Protective Services. Based on my example above, if Mr. Halley and his attorney had sought a conservatorship from the beginning, they likely would not have had to deal with an APS investigation initiated by a disgruntled former home care company employee.

For more information about conservatorships, guardianships and a power of attorney, please feel free to reach out.

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.

Some Practical Steps You Can Take to Protect Your Loved Ones from Elder Abuse

Every year, the United Nation marks a special day to raise awareness of elder abuse, which is very prevalent, especially among individuals over the age of 60 with dementia.

America is, at heart, a nation built by patriots, immigrants and pioneers. At our core, we are people who are willing to fight and die for freedom.  We cherish our freedoms, especially the freedom to live independently.  Most adult children want to keep their parents at home as long as possible. Out of love and respect, they may hesitate to ask personal questions about their parents’ finances, legal documents, medical conditions and care, and who is coming in and out of their parents’ home when their adult children are not present.

The ugly truth is that unless a care plan is put into place and carefully managed, with appropriate checks and balances, staying home alone can be isolating and can expose an individual, especially one living with dementia, to a heightened risk of abuse.  I am not just being alarmist.

Consider what happened in the actual case of Sally Dinoia. In the matter of the guardianship of Sally Dinoia, Docket No. A-5276-17T3 (N.J.App.Div. December 26, 2019). Sally was 85 years old, widowed with several children, and was living in her former marital home with her adult son, John.  John had cared for her for years.  Someone raised a concern about Sally’s well-being and Adult Protective Services (APS) investigated. She was noted to have poor hygiene, fungus and bug bites on her body.  Bedbugs were discovered in her home and on her person. An exterminator was called to treat her home, but John refused to let the exterminator inside. John interfered with the attempts of a physician to examine his mother and filed litigation against APS and the local police, which were both responsible for various aspects of the investigation into his mother’s welfare.

The APS failed to investigate Sally’s finances as required. Eventually, a guardian was appointed for Sally, and that guardian was faced with the colossal task of opposing John, who was extremely litigious, in court. In the process, counsel for the guardian racked up a legal bill of over $43,000, which Sally had no money to pay. APS, which did not investigate as it should have, was ordered to pay the bill, resulting in an appeal brought by APS to overturn the judge’s order requiring APS to pay Sally’s bill.

As you can see from Sally’s case, trying to clean up the elder abuse can be like trying to wade through quicksand.  A much better option is to put a plan into place at the first moment you are reasonably sure that something more than ordinary aging or an adjustment reaction to a stressful situation is responsible for your aging parent’s memory or behavioral issues.

Here are some important steps you can take to prevent elder abuse before it happens.

  • Make sure you have legal authority to act on behalf of your aging parent. Like insurance, it’s a bad idea to put off getting it until you need it. If possible, get a power of attorney in place for financial or medical purpose.  If your parent can no longer sign a power of attorney or is unwilling to do so, apply for a guardianship or conservatorship without delay.  Don’t wait until after there is a problem to get legal authority in place.
  • Review their finances. This includes their health insurance and their eligibility for public benefits, such as the Veteran’s Improved Pension and Aid and Attendance and Medicaid. Is your parent signed up for Medicare when first eligible? Does he or she have a Medicare supplemental plan or a Medicare Part D plan?
  • Work with their doctor to put a care plan and supports in place. The goal is to limit the parent’s decline.  You can’t make your parent young again, but you can help them live their best life at home as long as possible.  Enlist the services of a geriatric care manager to make sure that the home environment is safe and to make appropriate referrals to the services and supports your parent needs.
  • Get affordable care in the home through an agency. I am a fan of home health care agencies.  They screen the care providers, handle payroll, income tax reporting, and are licensed and bonded.  They can send a replacement quickly if needed.  Having multiple team members in the home can provide your aging parent with social stimulation and enough oversight.  There is also safety in numbers.  An aging parent is less likely to be a target of abuse if he or she is surrounded by several other individuals. A care team by its nature can provide a built in system of checks and balances.
  • Work with an elder law attorney. They can help you ensure that your parent has the best care and that your parent is able for that care for the rest of his or her life, using public benefits if necessary.

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.

Getting the Most out of your ABLE Account Based on the SSA’s New Guidance

ABLE Program in New Jersey

The Social Security Administration released a new update to its Procedure Operations Manual System, (POMS), effective March 13, 2020.  This is a very important development because the POMS is the manual used by employees of the Social Security Administration in processing claims.  The new provision gives additional information about the types of expenses an ABLE account’s proceeds can be spent on, for a qualified, disabled beneficiary, while still retaining that beneficiary’s eligibility for Medicaid and other means-tested public benefits, like Supplemental Security Income (SSI), Section 8 housing benefit. Heating assistance (LIHEAP), and food stamps (Supplemental Nutritional Assistance Program (SNAP)).  In particular, the new guidance clarifies that food purchased with an ABLE account’s proceeds can be a qualified disability expense.

What is an ABLE account?  It’s a special, federal income tax qualified disability savings account, the balance of which is disregarded in computing eligibility for public benefits, so long as it remains below set levels.

Who can benefit from an ABLE account? Only a qualified disabled beneficiary can benefit from an ABLE account. A qualified disabled beneficiary is an individual who is eligible for Supplemental Security Income (SSI) on the basis of blindness or a disability, where the individual’s blindness or disability was incurred prior to the age of 26.  Another route to qualified disabled beneficiary status is entitlement to disability insurance benefits, childhood disability benefits, or a disabled widow or widower’s benefit on the basis of a serious, disabling condition that began prior to age 26.

Are there other exceptions to qualify for an ABLE account? An individual may be eligible for an ABLE account on the basis of a certification that the individual has a medically determinable impairment meeting the statutory criteria for a disability determination (i.e., marked and severe functional limitations) or is blind, and the blindness or disability was incurred prior to age 26.

Distributions can be made out of the account for certain qualified disability expenses. To the extent that the balance in the ABLE account:

  • Does not exceed the $100,000 SSI limit, and
  • Distributions are made in the same calendar year as they are used to purchase qualified disability expenses for the disabled beneficiary, the income from the qualified distributions may be offset by deductions for the qualified disability expenditures paid in that same calendar year.

It is important to note that if the qualified disabled beneficiary does not receive SSI, then he or she is not subject to the $100,000 SSI threshold, but the qualified disabled beneficiary must ensure that the funds in the ABLE account remain less than the 529 contribution amount for his or her state of residence.

What are the benefits of an ABLE account? The benefits of an ABLE account come with the quid pro quo that the funds on deposit in the ABLE account after the death of the disabled beneficiary and after the payment of all outstanding qualified disabled expenses will be subject to a Medicaid payback for all expenses incurred by the state (or states’) Medicaid agency on behalf of the disabled beneficiary after the date of establishment of the ABLE account.

* Please note that during the period of uncertainty due to the COVID-19 pandemic, there may be delays in communications and services from ABLE PLAN providers, due to remote work arrangement and contingency work plans. However, basic services and information should be available through online access.

What are qualified disability expenses? These may include:

  • Education
  • Housing
  • Transportation
  • Employment training
  • Assistive technology
  • Personal support services
  • Health, prevention and wellness
  • Financial management and administrative services
  • Legal fees
  • Expenses for oversight and monitoring
  • Funeral and burial expenses
  • NEW: the purchase of food is now considered a non-house related expense

Why is the new guidance important? While much of the new guidance reiterates settled rules, the new guidance is important because it clarifies that food may be purchased with funds from an ABLE account and such purchases will be treated as a non-shelter related qualified disability expense and disregarded for purposes of determining eligibility for the SSI (and other means-tested federal benefits).  The distribution from the ABLE account, to the extent used to purchase food, will not be considered in kind support and maintenance and therefore, will not place the individual in excess of the SSI income limit.  The ABLE account beneficiary will not be disqualified for the SSI benefit and will not suffer a reduction of the SSI benefit amount due to in kind support and maintenance.

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.

Involuntary Commitment: When Is It Time To Bring In Counsel?

Restoration of Capacity

Last month, the Montana Supreme Court affirmed the district court’s involuntary commitment of a married, successful business owner in her late fifties (“Maggie”) to the Montana State Hospital because she showed evidence that she was unable to provide for her own basic needs, including refusing to take medication to treat her diagnosed bipolar disorder, showed signs of insomnia, lacked insight into her illness and her inability to protect her own health and safety.

Below is Maggie’s story. If you, or someone you know, is experiencing similar life-altering symptoms, it’s important to know that retaining counsel as early as possible in a psychiatric emergency situation is essential in preventing an unnecessary involuntary commitment.

What is an involuntary commitment? It is a legal proceeding to obtain a court order requiring a mentally ill individual to receive necessary psychiatric treatment that he needs but has not agreed to.  The process of obtaining the order is often initiated through a mental health screening and requires a determination that the person to be held is at risk of endangering himself or others. If it is determined that the individual can afford to pay for the cost of psychiatric care, they may be ordered to pay for the care from their own income and resources.

Why is it important to involve counsel early in the process? Retaining counsel can:

  • protect your rights
  • help you legally limit your financial responsibility where appropriate
  • provide valuable information regarding long-term care placement options and can review admissions agreements, and where the individual who is involuntarily committed is married, and cannot return to the home, counsel can help protect assets and income for the healthy spouse.
  • offer guidance regarding the next steps to take, whether it be a conservatorship, guardianship or a Medicaid or charity care application

Here’s Maggie’s story:

In 2018, Maggie lost twenty pounds and developed a sleep disorder. Over a period of approximately one week, she made multiple visits to the emergency room to obtain medical attention.  She was diagnosed with insomnia, prescribed a sleep regimen and sleep medicine, was otherwise healthy and had no history of self-harm or dangerous behavior. Maggie reported that she elected to stop driving due to the insomnia.

Fast forward to one week later, Maggie returned to the emergency department with her family due to continuing sleep issues and “high energy behaviors.” A licensed clinical social worker concluded that she was experiencing a manic episode and bipolar disorder and filed a report recommending her involuntary commitment.  The state filed its response the next day and Maggie was ordered to be held overnight pending the involuntary commitment hearing at a residential mental health facility.

Shortly after getting admitted, an evaluation was conducted and the examiner testified at the involuntary commitment hearing that Maggie had pressured speech, tangential thinking, poor judgment and insight, inability to consent to taking medication and that she exhibited paranoia with respect to the side effects of the medication prescribed.  The examiner testified that Maggie was advised that the appellant was a danger to herself due to her multiple emergency room visits, her refusal to take medication, and because she drank too many Pedialyte beverages in attempt to correct an imbalance in her electrolytes.  At the involuntary commitment hearing, the court found that Maggie presented a danger to herself and that her condition might decompensate without intervention and ordered her involuntarily committed to the state hospital.

On review, the supreme court admitted that this case was not as compelling as several prior cases in which an involuntary commitment was upheld.  However, the lower court’s decision was sustained, based on testimony that the woman had poor insight into her illness, lacked the ability to make decisions protective of her own health and safety, and was unwilling to take any medication that would resolve her manic symptoms.

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.