Home for the Holidays

Many non-retail businesses experience a slow-down over the holidays, and retailers feel a January slump. In elder law, on the other hand, we invariably see an uptick in our intake calls over the holidays and especially just afterward.

What causes that?

After experiencing this trend for over 20 years, I can say with a fair amount of certainty what causes it: holidays. Well, not exactly the holidays themselves. It’s that fact that many children return home over the holidays to visit mom and dad. And when they do, they see things that concern them. I call it “Home for the Holidays Syndrome.”

Children, particularly those who have been away from day-to-day interaction with the parents, will notice quite clearly that Dad is not getting around like he used to, or that Mom is getting more and more forgetful. And they become worried.  And they decide to call an elder law attorney.

Sometimes, children who are out of the day to day caregiving routine for a parent will return home and develop concerns about how the caregiving child is handling things. Alternatively, they will realize that a parent living alone is no longer able to manage successfully without support.

In the best of situations, family members coming home for the holidays may be able to see things that a parent, or a caregiver child, immersed in a situation every day, has simply absorbed as part of the day to day progression of caregiving.

I will never forget the Thanksgiving in 2007 where I realized that the pleasant phone conversations I had with my mother were filled with fiction – she had the early stages of dementia but also had a Master’s degree in history and was extremely articulate – so she could fill a conversation with chatter and information that she simply, innocently made up when she could not remember reality. When we were all together I realized that she was spinning yarns about things that simply did not happen. I also realized that my father, in caregiving for my mother, had let his own health go to the point where he had a medical condition that was extremely serious. I didn’t live far away, but with a full life of work and childrearing, I thought my regular phone conversations  were enough to “check in” on Mom and Dad. At that point we realized help was needed, and  we began to collectively make a plan for  increasing our involvement. (Before that plan even was put into place, my dad’s condition got worse and then,  before I knew it, they were living with me, and my brothers and I began our caregiving roles for both Mom and Dad.)

In the worst of situations, family coming in for the holidays may inappropriately confront a caregiver without knowing all the facts or without awareness of the intense amount of effort that daily caregiving involves. Or, family members who have had a history of conflict may choose this situation to pull out the baggage and start the same old family fights again, only with a new excuse: the care of mom or dad. Finally, in the worst of situations a family member from the outside may discover something very wrong with the caregiving situation, such as financial or physical abuse, or neglect.

I simply want to remind anyone coming home for the holidays to visit aging parents that there are resources available. Elder law attorneys exist in every state – look at http://www.Naela.org to find an elder law attorney near you. Also, geriatric care managers can provide an invaluable objective eye on the caregiving arrangements and can help set up services and support if needed.  Click here to find a care manager near your family. Finally, the Alzheimer’s Association has a wealth of resources available to afflicted individuals, caregivers, and family members. Please spend time visiting the website at www.alz.org and return there often.

I also want to make a point about reactions: In my experience, it is simply destructive for children to fight amongst themselves in front of their parents. Whatever issues you may have had with your brother or sister, now you need to focus on what mom or dad needs. Fighting in front of your parents or parent will accomplish nothing and simply make the situation worse.

Enjoy the holiday season!holiday home


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Timing is everything…

Gold_Chaika_Pocket_Watch_made_in_the_USSRIn understanding the ins and outs of Medicaid and divestment, timing is everything.

Divestment is the concept that if you give away your assets with the intention of becoming eligible for Medicaid, the gift will cause you to be ineligible for Medicaid for a period of time. This is pretty easy to grasp, why would any government poverty program allow you to give away a million dollars today, and apply and qualify tomorrow? (Well, some government programs do allow you to give away a million dollars and qualify immediately  – such as Veterans’ Aid and Attendance Pension – and even Medicaid allows you to do that in a limited situation such as when the gift is for the benefit of a disabled child –  but that is not what we are here to talk about today. In my experience, most millionaires want to keep their money.)

Even though the Medicaid rules are intended to penalize intentional divestment, as a practical matter, if an individual has given away any substantial sum of money while his or her health has been declining, it is going to be viewed as a divestment by a Medicaid caseworker. There are cases where we have successfully argued that a particular gift was not for the purpose of becoming eligible for Medicaid, but that does not happen without a bit of a struggle.

So, the basic timing in divestment cases goes like this:

Timing issue number one: FIVE YEAR LOOKBACK. If you give something away, and at any time within five years after that gift you need to apply for Medicaid in a nursing home, or for Family Care to provide home care or assisted living benefits, you will be required to disclose the gift on your application.  That five years is called the “look back period.”

Because of the “look back period,” people who divest and apply too soon could be hit with a large penalty, and people who wait five years will have no penalty. This is why, in doing planning such as transferring assets to an irrevocable trust, it becomes irresponsible to do something like that if the person does not have enough money outside of the trust to be secure for five years. That is also why, if the plan is to wait out the lookback period, it is critically important to time the application so that it is not done too early.

A gift within the lookback period is likely to create a “penalty period,” which leads us to timing issue number two: THE PENALTY PERIOD. This is also referred to as the “period of ineligibility.” The penalty period is a calculation that uses the amount gifted, and divides it by a figure that is updated “sort of” annually  (it does not always get changed.) For example, a gift of $20,000 that is made within the lookback period will create a penalty period of 82 days.

If you are newly applying for Medicaid that penalty period is imposed beginning when you:

1) are in the nursing home, (or when you apply for Family Care in the community);

2) have spent your assets down to the level at which you qualify for Medicaid ($2000 for an individual, and usually somewhere between $50,000 – $119,240 for married couples in most cases); and

3) apply for Medicaid.

The penalty period will mean that even though you qualify for the Medicaid program, you still need to pay privately for the duration of the penalty period. For people already on Medicaid who divest money, the timing is even more complicated and I won’t go into it here.

“Well, how am I supposed to do that if I only have $2000?”  

Good question! The answer is: You can’t! Particularly if you are single. Unless…..You have planned carefully. 

Careful planning is the reason that in some cases, where a person has gifted money, it makes sense to take steps to further reduce that person’s assets immediately so that an application for benefits can be made and a penalty period served out. (Which, I realize, is exactly the opposite of waiting out the five year lookback period, and so this has to be carefully considered.) One such case would be where a person is in assisted living but anticipated to move to a nursing home setting. In that case, instead of waiting to gradually spend down all the person’s money, and apply for Medicaid in a nursing home, and then get hit with a divestment penalty, it would make sense to have that application completed while the person is in assisted living, even if the assisted living facility does not take Family Care benefits! That way, the penalty period will be over before the high cost of nursing home care sets in.

In other cases, where a person has gifted money and then finds him or herself in need of nursing home care, we advise the family that instead of gradually spending down money, and then again ending up applying for Medicaid and facing a penalty period, the family should immediately reduce assets by using a vehicle such as an annuity or loan, whose payout is carefully timed so that the income will cover the cost of the penalty period.

These techniques are not “gaming” the system. These people are “paying the penalty” for having divested money. The difference is that when clients understand how the timing works, there are steps they can take instead of simply waiting and being hit with a penalty when neither the client nor his or her family can afford it.

And I won’t beat around the bush – timing is everything in one more respect: getting in to see a qualified elder law attorney sooner rather than later. This is because people who have good advice will minimize the impact of a divestment. People who don’t will end up simply spending down all of their funds and will be hit with an unworkable penalty.

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Beware of Frivolous Probate Estate Litigation: A Recent New Jersey Case Awards Counsel $400K in Fees for Defending a Litigious Ex-Spouse

By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Probate Estate Litigation Attorney

A New Jersey appeals court awarded legal fees of $397,000 for work performed by a law firm representing the estate of a man found to have been manipulated into modifying his will by his then wife.

The fees were awarded because the pro se challenger—the deceased man’s wife from a second marriage—“contributed to, and greatly increased, the time required litigating the matter,” the court said.

In this case, the decedent, after the death of his first wife, married and later executed wills leaving certain assets to her and certain property to his adult children.

The decedent was hospitalized for related kidney cancer and afterwards was cared for fully by his wife. During that time, two codicils to his Last Will were executed, bequeathing all his personal property to his second wife.

Her daughter brought the frail and weakened stepfather to a branch of a local bank where a worker notarized a new deed—granting the new wife rights in their Cherry Hill property—while witnesses to the document watched from inside the bank.

She allegedly forbade his children and relatives from visiting and controlled his medication.

On Oct. 2, 2007, decedent died at the age of 72. His new wife then recorded the new deed, drew money from his accounts, and probated the codicils and retained counsel to represent the estate.

The attorney hired to do the probate became suspicious of the codicils and directed the executrix not to submit either one for probate.

The Superior Court Judge assigned to try the case found there had been a “confidential relationship” between the husband and wife, who was in a weakened state when the documents were executed. He ruled that the surviving spouse lacked credibility, and fraudulently executed the documents.

He directed her to reimburse about $59,000 to the estate and valued the decedent’s interest in the Cherry Hill property, at $330,000, which is returned to the estate.

The judge also awarded the estate $377,000 in legal fees and $20,000 in costs as part of the damages. He said the fees were justified because the new spouse made “sophisticated attempts to defraud the estate” and “waged a scorched earth campaign” in court.

The Appellate Division upheld the trial court and relied partly on In re Niles Trust, 176 N.J. 282 (2003), where the state Supreme Court held that fees are awardable where a trustee or executor commits undue influence or modifies estate documents.

Though not a fiduciary, “she contributed to the erosion of the estate, and there is no just reason why she, like a corrupt fiduciary, should not make the estate whole,” the court said.

The trial judge “could’ve been more punishing in that he declined to award punitive damages,” which he could have but his ruling is “a good warning to people who would conduct themselves this way.”

To discuss your NJ probate litigation matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com. Please ask us about our video conferencing consultations if you are unable to come to our office.


Think the State Will Help You? Think Again

By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Medicaid Attorney

For years, I have explained to clients while Medicaid covers long term care costs in a non-nursing home setting (ie., care at home) the Global Options program, it is very difficult to qualify and even if you can meet the requirements, more times than not these programs don’t cover everything you need.

I have written previously in this blog about New Jersey’s assisted living Medicaid program and the difficulties in qualifying but New Jersey’s home based Medicaid program isn’t any better and actually is worse. For years I have explained to families that at best, home based Medicaid will cover 20 or 35 hours a week of care. That’s it!

Apparently the State won’t even cover that much. In speaking with a number of home care agencies we are finding that the New Jersey is paying on average not more than 12 to 15 hours per week for care. Think about that. In order to qualify for Medicaid you have to spend down to $2000 in assets, have no more than $2163 per month in gross income and you must medically qualify for a nursing home level of care. If you do that, they’ll pay for 12 hours a week. Does that make any sense? How are you supposed to pay for the rest of your care? The State doesn’t have an answer for that. Move into a nursing home, I guess. Then they’ll pay for your care.

It’s just another illustration of why you cannot naively think that if you spend all your money, the State will take care of you. It won’t.   If you want to stay at home as long as possible you’ve got to put a plan in place and learn how to navigate the long term care system or work with someone, such as a knowledgeable elder care attorney – who can guide you through this maze of laws and benefits so you can stretch your dollars out. If you simply spend your money and then look for help it just won’t be there.

To discuss your NJ Medicaid matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com. Please ask us about our video conferencing consultations if you are unable to come to our office.


Announcing the Long Term Care Planning Blog

Announcing the Long Term Care Planning Blog

Counseling clients facing the prospect of $10,000 per month nursing home costs and other costs of long term care is perhaps the most challenging aspect of the practice of Elder Law. For in addition to knowing substantive law in areas ranging from public benefits to tax planning, the Elder Law practitioner must be aware of community resources such as geriatric care managers, client-centered financial advisors, and excellent providers of long term care services.

That is why I am delighted to announce the launch of a new blog devoted to long term care planning,  The Long Term Care Planning Blog is hosted on the Law Professor Blogs Network. As an adjunct law professor at Roger Williams University Law School and a certified elder law attorney (CELA) I will be serving as the blog’s editor. The best part is that nationally known practitioners and other professionals whom I am known or admired for decades have agree to serve as contributing editors, including:

Some of the topics we’ve covered since our launch include end of life discussions, preparing for the high cost of nursing home stays, the special training and skills required to properly help veterans, benefits for permanently disabled adult children, and what is Elder Law?.

We look forward to covering many more issues related to long term care planning over the coming weeks and months, and invite you to leave feedback and questions using the blog’s comment system, or directly to me or any of our authors via email, which you will find beside our pictures at the bottom of the blog homepage.

You can also sign up to receive new blog posts by email by clicking on “Subscribe” at the top of the blog homepage.


Mark Heffner

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