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

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. 

Social Security Increases for 2021

The new numbers reflecting the 2021 cost-of-living increase Social Security benefits are now available!  Here are some of the more the important 2021 federal numbers:

If you would like to see your new Social Security benefit amount for 2021, it is expected to be accessible online beginning in early December, 2020.  Hard copies of the 2021 Social Security benefit award letters will be mailed beginning in December, 2020. 

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.