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.

National Caregivers Day, February 21, 2020: An Expression of Appreciation

national caregiver Day 2020

These days, it seems that everywhere I turn, I find caregivers working with unselfish devotion to the people they serve. Caregiving can be formal (i.e., health care professionals working in the hospital, long-term care and hospice industries) or informal (i.e., family members providing care in the home) but it is always an act of service. In honor of National Caregivers day and all the hard working caregivers serving seniors and the disabled, here is a special blog to express my appreciation and thankfulness for all you do!

Working with individuals with dementia can be very physically and emotionally demanding.  That is why self-care is so important.  While paid caregivers may have access to training and co-workers to support them, unpaid caregivers seldom have these resources. Fortunately, for those seeking guidance on how to identify and redefine their needs and responsibilities as unpaid caregivers in the home, there is a helpful book filled with practical tips on the subject. Your Caregiver Relationship Contract (2019), by Debra Hallisey, is available through Amazon.  Her book offers a peaceful framework for caregivers to change an established relationship with a parent who still regards the child caring for them as their little one, not an adult with needs and obligations of her own.  Topics covered include how to deal with guilt and anger, setting boundaries, building a support network and strategies for difficult conversations. Here are some of the tips Ms. Hallisey shares:

  • Start important conversations in the car or while sharing an intimate experience with the person you are caring for, such as baking together or combing hair.
  • Bring up a topic up multiple times in varied settings and eventually your loved one’s no may become a yes.
  • Use “I” words (I need help) and don’t blame.
  • When setting a boundary, be honest and direct. Start the conversation with an expression of caring.
  • Use words that validate your loved one’s choices. Words and tone of voice matter.
  • Compassion fatigue is real. Combat it through self-care.

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.

Increase in the SSI Federal Benefit Rate for 2020

Jane Fearn Zimmer Elder Law Attorney

The federal government recently released its 2020 Supplemental Security Income (SSI) and Spousal Impoverishment guidelines.  The guidelines, which took effect on January 1, 2020, set the SSI Federal benefit rate at $783.00 for an individual and $1,175 for a couple.

SSI is a monthly cash benefit to blind, disabled or elderly individuals with low income and resources.  Subject to the exclusion of certain sources of income, the SSI monthly income cap is set at $2,349 for an individual.  In order to qualify for the SSI benefit, the applicant must have a disability or diseases severe enough such that the applicant cannot engage in substantial gainful activity.  An applicant who is earning more than a set monthly amount of income is considered to be engaging in substantial gainful activity.  In 2020, the substantial gainful activity monthly limit for an elderly or disabled individual who is not blind, is $1,260 in earned income.

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.

 

Changes to Social Security in 2020

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The year 2020 will bring important changes to the Social Security program, including a 1.6 percent Social Security benefit increase and an increased annual earnings cap for the Old Age, Survivors and Disability Insurance (OASDI) tax, which is a component of the Federal Insurance Contributions Act (FICA) tax.  Beginning in 2020, the maximum annual amount of earnings subject to the OASDI will increase to $137,700 from the current limit of $132,900 applicable in 2019.

Also beginning in 2020, the maximum retirement earnings test exempt amounts will be $18,240 annually (or approximately $1,520 monthly) for individuals under full retirement age.  That means that for every two dollars earned in excess of that limit, one dollar in Social Security benefits will be withheld.

In addition, starting in 2020, the SSI federal payment standard will increase to $783 monthly for an individual and to $1,175 per couple. Here is a helpful fact sheet summarizing these and other important 2020 Social Security numbers.

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.

Top Tips For A Successful Medicaid Spend Down

Finding the best long-term care, and a way to pay for that care with public benefits, is of critical importance to the elderly, the disabled and their families.  The national median cost of long term care in a private room in a skilled nursing facility is over $9,000 per month, with the average statewide median cost ranging from over $10,000 to well more than $12,000 in other states, including New Jersey, New York, and as high as $24,000 monthly for a private room in Alaska.

Many seniors do not realize that Medicare will cover limited skilled care for a short period of time, and will not be an option to pay for the care they may need for the rest of their lives.  Fortunately, Medicaid and the Veteran’s Administration Improved Pension (or the Dependency Indemnity Compensation benefit for a surviving spouse), combined with the applicant’s income, are means-tested public benefits programs that can often pay for a lifetime of long term care facility and other medical care costs.

Benefit through these programs are limited to applicants with low assets and low income.  The rules for Medicaid eligibility are quite complex and vary somewhat from state to state based on the provisions of each state’s Medicaid plan.  For instance, in my home state of New Jersey, in order for a single individual to qualify for Medicaid, that individual’s countable assets must not be even one penny over the sum of $2,000.  In general, one cannot give away one’s money and receive institutional or waiver service Medicaid benefits within five years of the date of the gift without incurring a Medicaid penalty period.  (A Medicaid penalty period is the period of time during which Medicaid benefits will not be available to pay for custodial care. The length of the penalty period corresponds to the value of the total uncompensated gifts made during the five year Medicaid look back period. The Medicaid penalty period will not begin to run until the last of the following events to occur: there is a filed Medicaid application for the applicant, the applicant is clinically eligible for Medicaid, and the application is either already in a long-term care facility or other care setting permitted under any Medicaid waiver program in his or her state, such as the home or an adult medical day care facility.)

Elder lawyers refer to the process of legally reducing assets to a level below the Medicaid threshold as “spend down and conversion.”  Where one member of a married couple will apply for Medicaid, the spend down and conversion process must be carefully timed and for best results, should be started only after the prospective Medicaid applicant has entered into a nursing home or has a filed application for a Medicaid waiver program and has already been determined clinically eligible for Medicaid.  In order to avoid a Medicaid penalty period as a result of the spend down process, all payments should be for fair market value for the Medicaid applicant or his spouse.  A typical Medicaid spend down may include the repayment of debt for the Medicaid applicant or his or her spouse (but not for another adult, which would be an uncompensated transfer), the payment of legal fees for crisis Medicaid planning and a Medicaid application, payments for other services to the Medicaid applicant and his spouse, the payment of real estate taxes and other costs of home ownership, the purchase of irrevocable prepaid burial arrangements for the Medicaid applicant and his spouse, the payment of “key money” to facilitate the admission of the Medicaid applicant to the best long-term care facility available. (This can frequently require private payment for several months of long term care).  Where the applicant owns a home, he may consider repairs and deferred maintenance to the home, especially where there is a healthy spouse who will remain at home or if the home needs repairs and maintenance to facilitate its sale.  Many seniors may also consider buying a new car, or new household furnishing or personal goods.

The purchase of a life estate in a child’s home may be a suitable spend down strategy for an elderly parent who is presently independent but may need Medicaid in the next few years, the parent wishes to reside in the child’s home and the child is amenable.  A life estate is an undivided ownership interest in the real property and gives the holder the right to reside in the home during his lifetime as well as favorable capital gains income tax consequences and responsibilities for the home’s financial upkeep.  If the parent reside in the child’s home for a period of at least one year and the value of the life estate is properly computed and both parent and child execute a deed memorializing the life estate purchase, the parent’s payment to the child for the life estate will not result in a Medicaid penalty period.

One of the most powerful spend down strategies is the purchase of a Medicaid compliant annuity. This is an annuity which meets strict criteria in the federal Medicaid statute.  The annuity can be funded with either non-qualified or qualified retirement funds. If the annuity is non-qualified, the annuity contract must provide for equal monthly payments (with no balloon payments), be irrevocable, non-assignable and the annuity term must be for a period longer than the actuarial life expectancy of the annuitant, as calculated according to actuarial life expectancy tables promulgated by the Social Security Administration or the state of residence of the Medicaid applicant. The annuity contract must name the state from which Medicaid benefits are sought as either the first remainder beneficiary to the extent of any Medicaid lien, or the state is named in the second position after the community spouse. If these requirements are satisfied, and assuming that the Medicaid applicant is otherwise eligible for Medicaid, the annuity contract cannot be treated as a countable asset and the annuity purchase cannot result in the imposition of any Medicaid penalty period.  See 42 U.S.C. 1396p(c)(1)(G); Carlini v. Velez, 947 F.Supp.2d 842 (D.N.J. 2013).

Similar rules apply for a qualified Medicaid-compliant annuity contract.

Here is an illustration of why the Medicaid compliant annuity purchase can be a powerful strategy to retitle a couple’s assets and preserve funds for the healthy spouse to remain for years in the family home.

Example.  Mary and James are ages 80 and 85, respectively. James needs nursing home care and Mary needs assisted living care. Mary’s only income is an estimated $600 monthly from her Social Security benefit. James’ income is comprised of $1,200 from Social Security, and he is not a veteran.  After their home is sold, the couple has $438,000 in liquid assets and James is ineligible for Medicaid due to the couple’s excess funds.  Without Medicaid planning, due to their home states’ maximum community spouse reserve allowance, Mary would have to spend down approximately $310,000, in order for James to become eligible for Medicaid.  Fortunately, she can spend the sum of $310,000 on a Medicaid annuity, which will enable James to become eligible for Medicaid in the following month and will provide her with sufficient monthly income to pay for her assisted living.  If the term of the annuity is for three years and for 36 equal monthly payments to Mary in the sum of over $8,600.  Mary is now able to pay for at least four years of assisted living care and can remain comfortably in the community. After the annuity term expires, Mary will likely be financially eligible for Medicaid herself.

Spend down is also important for United States military veterans and their spouses who are seeking the Veteran’s improved pension or the Dependency Indemnity Compensation for a surviving spouse or child.  In computing the applicant’s net worth for this means-tested benefit, federal law allows a deduction for unreimbursed medical expenses.

Medical expenses can include costs paid for services from health care providers, custodial care and must constitute a payment for an item or service that is medically necessary; improves the disabled individual’s functioning; or prevents, slows, or eases an individual’s functional decline.

Medical expenses may include care by a health care provider, i.e., someone who can only be an individual appropriately licensed by the state or country in which the service is provided to provide health care in that state or country.  In-home care providers are not always subject to licensure.

The definition of “health care provider” in the final rule incorporates a licensure requirement and the term may include, but is not limited to, a doctor, physician’s assistant, psychologist, chiropractor, registered nurse, licensed vocational nurse, and a physical or occupational therapist. Other categories of deductible medical expenses (to the extent not reimbursed) include medications, medical supplies, medical equipment and medical food, vitamins, and supplements if prescribed or directed by a health care provider authorized to write prescriptions, adaptive equipment, or service animals, including the cost of any veterinary care, used to assist a person with an ongoing disability; the cost of transportation for medical purposes, i.e., to and from a health care provider’s office, health insurance premiums, smoking cessation products; and institutional forms of care and in home care, including hospitals, nursing homes, medical foster homes, and inpatient treatment centers.

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.