Do I Have To Pay For My Parent’s Care?

Adult children often ask, do I have to pay for my parent’s care?  That depends. If you have taken control of your parent’s assets and income, absent a provision in a durable power of attorney allowing you to gift your parent’s funds to yourself, you are generally required to use your parent’s money to pay for their care.  But what if your parent’s funds are already spent down and beyond your reach? A recent published New York case considered this question and took an interesting and pro-child approach to the subject. 

In Wedgewood Care Center, Inc., Etc. v. Kravitz, 2021 N.Y. Slip Op. 04731 (N.Y. App.Div., 2nd Dept., August 18, 2021), the New York Supreme Court Appellate Division overturned an award for a for profit nursing home, which sued the son of its former resident. The nursing home wanted to hold the son liable for his mother’s unpaid nursing home bill for the sum of approximately $49,000.  An irrevocable burial trust was funded with some of the mother’s funds.  The nursing home argued (among other points) that the resident’s son, who was named as her agent under her durable power of attorney, violated his mother’s nursing home admissions agreement by failing to use all of his mother’s money to pay for her care and by not getting his mother approved for Medicaid benefits quickly enough. 

In the trial court, the resident’s son argued that he could not be held liable for the cost of his mother’s care, as this would violate the federal Nursing Home Reform Act.  The nursing home focused on the admissions agreement, which required the son pay his mother’s nursing home bills from the assets and income of his mother within his control if he could do so without incurring any personal financial liability. The trial judge ruled for the nursing home. 

On appeal, the appellate court concluded that the funds in the irrevocable burial trust were not available to the son to pay for his mother’s care because the son was unable to withdraw this money and apply the funds to pay for his mother’s care.  With respect to the timeliness of the Medicaid award for the mother, the appeals court noted that the nursing home failed to identify any specific document that the son should have provided to the Medicaid office but failed to do so. The matter was remanded for further proceedings and should not be interpreted as a “get out of jail free” card for adult children who do not cooperate fully in the parent’s Medicaid application process.  

The bottom line is that a seasoned elder law attorney can help you understand and carry out your duties to assist in your parent’s Medicaid spend down and application and that your obligations may be more complicated than they seem at first blush. When in doubt, it is a good idea to consult an elder law attorney to explain the rights, duties and obligations incumbent upon you and your parent under a long-term care admissions agreement, the federal Nursing Home Reform Act and state law. 

Back to School: Medicaid & 529 Plans

Most people assume that they will not ever need skilled nursing care, but statistics show that that is not the case.  Medicare may be available to pay for a limited period of care under limited circumstances, but if an individual does not have long-term care insurance, care in a skilled nursing facility care can cost more than $12,000 per month in New Jersey. That is an awful lot of money to pay out-of-pocket, so more often than not, the client or his or her responsible caregiver turn to the Managed Long Term Services and Supports (MLTSS) Medicaid program as a source of funding, combined with the elderly resident’s income, for long-term care. 

MLTSS Medicaid is a joint federal/state means-tested welfare program. In New Jersey, for single individuals, the countable asset limit is $2,000. Countable assets are available resources, i.e., resources that are available to pay for your car.  In other words, if you have an asset that can be liquidated within 30 days, you can’t simply chose to do nothing to take the cash out of the assets and simply go on Medicaid, expecting Medicaid to pay for your care.  In New Jersey, this general rule applies to an individual’s (or a spouse’s) accessible retirement accounts as well as any educational savings accounts, including IRC 529 accounts, that can be converted to cash within a relatively short period of time. 

It can be a shock to family members to learn that the funds on deposit in a IRC 529 educational savings plan account may have to be returned to the contributor and spend down for the contributor’s long-term care or may be subject to a Medicaid penalty period, which is a period of time during which payment for long –term care is unavailable due to assets given away for less than fair market value during the Medicaid five year lookback period.  A seasoned elder lawyer can provide solutions. Depending on the circumstances, this might include purchasing a Medicaid friendly annuity to offset any Medicaid penalty period from the transfer of assets into a 529 plan or planning years in advance with an educational trust.

QuestionsLet Jane know

Don’t File For Medicaid Too Soon!

Most people assume that they will age in place at home and never need long-term care, but statistics show that that is not the case.  Medicare may be available to pay for a limited period of care under limited circumstances, but if an individual does not have long-term care insurance, nursing home care can cost more than $12,000 per month in New Jersey.  And that is only the average monthly cost of care; many facilities charge a higher rate.  That translates to at least $144,000, which is an awful lot of money to pay out-of-pocket.  That is why many seniors who can no longer remain at home turn to Medicaid, which is a joint federal and state public benefits program, to help fund their care in a nursing home or an assisted living facility.

As part of the process of transitioning from hospital care to long-term care, you will probably be asked whether you have filed a Medicaid application. This is a routine part of the long-term care admissions process.  It is very important to avoid filing for Medicaid before it is needed, for at least two reasons. 

You cannot give away your assets and go directly on Medicaid.  Generally, any gifts made during the lookback period and not fully repaid, will be penalized. while there are a few exceptions, most uncompensated gifts made during the five year Medicaid lookback period will likely result in a Medicaid penalty period, which is the denial of payment through Medicaid for care in a nursing home or an assisted living facility for a period of time corresponding to the total of all the gifts made during the five year Medicaid lookback period.  However, Medicaid generally cannot take into account gifts made before the lookback period began. So if there is going to be gifting in large amounts, it is best for the gifts to be made before the beginning of the Medicaid lookback period. 

How do you know when the five year Medicaid lookback period is?  Actually, the term “five year” Medicaid lookback can be misleading.  Filing the first Medicaid application triggers the Medicaid lookback, which is a period of time running retroactively from the date of filing of the first Medicaid application.  For example, if Eric Early files a Medicaid application on June 1, 2021, and this is his first Medicaid application, then the lookback period will be from June 1, 2016 to June 1, 2021 (five years) and potentially continuing into the future. 

However, there are circumstances when the Medicaid lookback period can extend beyond five years.  In Eric’s case, if he withdraws his first Medicaid application and does not file another Medicaid application until January 1, 2022, the lookback period for his second Medicaid application will still run from June 1, 2016 through to June 1, 2021, but will continue thereafter until the date of filing of the second Medicaid application on January 1, 2022.  So if Eric (or his wife, if he is married) made large gifts in 2016, those gifts will be considered on his 2022 Medicaid application and will probably result in a gifting penalty which Eric could have avoided had he simply waited to file the Medicaid application.

If Eric is married, the first Medicaid application sets the “snapshot.” Medicaid looks at the assets of the husband, the wife and the assets in their joint names, totals the assets and that total is the snapshot.  The amount of the snapshot limits the amount the healthy spouse can keep.  You only get one Medicaid snapshot, so it is very important to get the highest snapshot possible.  Here is an example showing what can happen if you don’t do proper planning before filing a Medicaid application.  

For instance, if Jim was hospitalized in 2017, and the hospital social worker filed a Medicaid application for Jim thinking Jim might have to go into a nursing home, but it turns out that Jim was actually able to return to the home after all.  Jim’s Medicaid snapshot is permanently set in 2017.  His snapshot is set in stone and it is never going to change.  Suppose in 2017, Jim and his wife own a home and a joint checking account with $100,000 in 2017, the home is exempt, but the checking account is not. Jim’s snapshot is $100,000 based on the checking account balance. Jim can keep no more than $2,000 and his wife can keep $50,000 without additional planning or legal advocacy and representation. 

Suppose Jim never completed his Medicaid application in 2017 and his wife cares for him at home for another year and in 2018, re-files for Medicaid for Jim.  In 2018, she also sells the house which was jointly owned with Jim, for the sum of $150,000. If the deed to the house was left in Jim’s name, in 2018, Jim will be disqualified for Medicaid due to being over the $2,000 Medicaid resource limit, because he is entitled to half the house sale proceeds. Now Jim has to spend down an additional $75,000 that could have been saved, had the 2017 Medicaid application not been filed and had Jim and his wife consulted with an elder care attorney.  If you have questions about a Medicaid application, please feel free to contact me to discuss your unique situation.  

Questions? Let Jane know.

Do You Know How To Protect Yourself From Catfishing and Financial Abuse?

A version of this article ran in the April 2021 edition of The Elder Law Report, Including Special Needs Planning

Senior citizens and members of the disabled community have always been a major target for catfishing schemes, but since the pandemic hit last year it’s at an all-time high.  According to the Elder Justice Center, fraud increased to over $3.3 billion in 2020, well above the 2019 report. This blog post is intended to warn of catfishing schemes, which are no joke, especially when the most vulnerable members of our community could be victimized. That is why it is so important to remain on high-alert in the event you encounter financial and other forms of abuse. 

Internet friendly seniors need to be vigilant for cat fishers.  Catfishing involves schemes in which the perpetrator creates and holds out to the victim an offer which is too good to be true, to entice the victim into giving up personal information, money, or something of value for fraudulent purposes.  Catfishing comes in various degrees of sophistication and can involve the creation of a false identity which is held out to the public.  In one local catfishing scheme, the perpetrator held himself out as a lonely man working on an isolated oil rig looking for long distance love online.  The isolation of an oil rig is a convenient excuse for providing limited photos and for declining to meet in person or talk on the telephone. Communication tends to be via instant message or in online hang outs and chatrooms or via text messages.  Red flags for a catfishing scheme can include:  poor English, lack of communication by video, FaceTime, or any method which allows you to see who are talking with, a rapid paced romance, requests for you to use a particular type of software or program, requests for you to download a computer program (which may contain malware or ransomware), and requests for your social security number, Medicare number, bank account or credit card number or for you to purchase gift cards and to send them the gift card numbers.  Often the perpetrators of catfishing schemes are overseas. 

Another financial abuse scheme is unemployment fraud.  In these schemes, the perpetrator files an unemployment claim based on the victim’s work record and then opens up a new bank account into which the victim’s fraudulently claimed unemployment benefits are deposited.  Earmarks of unemployment fraud include receiving a letter from the unemployment office confirming the filing of a claim based on the victim’s work record.   Sometimes, the victim may be unaware of the scheme until he or she receives income tax forms in January of the following year, reporting unemployment income which the victim did not receive. File a complaint with the local police department and report the matter to your local unemployment office, which typically will have a fraud hotline.  

Then there are COVID-19 financial abuse schemes, which include: 

  • An offer for COVID-19 treatment, a vaccine or a booster shot from anyone other than a medical professional or a government health department
  • Being offered the chance to “jump the line” for the COVID-19 vaccine by paying a fee
  • Being offered quicker utility service restoration by paying a fee, particularly using a gift card, or a payment app such as Venmo, PayPal or Zelle 

Here are some general precautions you can take to minimize the risk of elder financial abuse:

  • Review your mail and bank statements regularly and contact your credit card company or the merchant regarding any unfamiliar transactions 
  • Do not let others access your money. Put your bank and financial statements away in a locked cabinet or drawer out of sight. Do not leave them in your car or in plain view in your house.  Refrain from carrying a lot of cash. 
  • Keep in regular contact with friends and family who can help you. 
  • Order a copy of your credit report and review it. 
  • Do not keep passwords or ATM or telephone passwords in writing in your wallet, purse, glove compartment or anywhere easily accessible in your home. 
  • Don’t ever give a power of attorney to someone you don’t know very well and trust.  Your power of attorney should be trustworthy, available, and respectful and should put your interests before their own. 

If you still have questions, there is a helpful senior financial safety risk assessment tool offered free to the public by the Center for Elder Law and Justice, a New York organization, in collaboration with the Pro Bono Net.  The online tool can be used to assess whether there are red flags for elder financial abuse and what you can do in response.  The tool is available online at https://elderjusticeny.org/.

Additional support and resources may be available through your local Adult Protective Services office, the county Office on Aging, local law enforcement and the county prosecutors offices. Resources at the state level include the Office of the Public Guardian, and the Office of the Ombudsman for the Institutionalized Elderly. 

Questions? Let Jane know. 

Elder & Disability Law Attorney Reunites Family After Early End to Involuntary Commitment Order

Flaster Greenberg elder and disability law attorney Jane Fearn-Zimmer recently assisted a New Jersey family with legal advice/advocacy and secured the early release of their loved one, after a series of unfortunate events culminated in an involuntary commitment order, apparently due to a medical misdiagnoses.

In this case, a family member expressed concern to the relative’s new physician, who did not know the patient well, and had spent minimal time with the patient. The patient was going through a very difficult marital separation and was understandably upset. The middle-aged patient had known no pre-existing diagnosis of chronic mental illness and had cared for other family members for many years while also maintaining employment.  

The family member was escorted to the hospital by the police from the medical office.  The patient was promptly made the subject of an involuntary commitment order and was transferred to a behavioral health facility.  Jane was retained by the family to help get the relative released. 

Getting in touch with a medical facility’s administrator can be challenging even before the pandemic, but since Jane knows the ins-and-outs of the behavioral health system, it was seamless for her to communicate quickly and efficiently with the right people. She was able to get the facility’s executive and its medical doctor to clear the patient for release prior to the scheduled involuntary commitment hearing date after she learned that the patient was not receiving appropriate care for a medical issue and group therapy sessions could not be held because the patients were confined to their rooms. Both patient and family were thrilled to be reunited.

“Jane helped me during my darkest time. She gave me hope as she acted in the most professional and attentive manner throughout the process of gaining our discovery.  She was very attentive to all my needs, answering my concerns as they came up daily,” said the client “This type of reassurance was a Godsend to me and enabled me to keep my composure knowing that I had a loyal, intelligent human on the outside representing my best interests and protecting my human rights. I feel forever indebted to her for her kindness and dedication to working so hard on my behalf, presenting a factual case, which enabled her to gain me an early emergency, after a lengthy and difficult stay. I am forever grateful for her.”

Questions? Let Jane know.