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We are pleased to announce that Howard S. Krooks has been named a 2007 Florida Super Lawyer by Super Lawyers magazine due out this month. Super Lawyers names Florida's top lawyers as chosen by their peers and through the independent research of Law & Politics. 2007 Florida Super Lawyers is based on the survey of more than 44,000 lawyers across the state. Only 5 percent of the total lawyers in the state are selected for inclusion in Super Lawyers.
The June issue of The Elder Law Update, a monthly e-newsletter full of the latest legal developments and other trends of vital interest to seniors and their advocates, abounds with compelling information.
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Declaration of Preneed Guardian Only Constitutes Rebuttable Presumption Which Courts Need Not Follow
In this case, the trial court appointed a professional guardian, Michael J. Swan, Esq., to serve as the personal needs and property management guardian of Audrey Miller, a totally incapacitated person. Constance Fanning, Audrey's sister, appealed the ruling citing Audrey's preneed Guardianship Declaration appointing Fanning. The Fourth District Court of Appeals affirmed the trial court's decision to overlook the preneed Guardianship Declaration for the following reasons:
- Audrey and her attorneys agreed to the appointment of a neutral professional guardian; and
- the trial judge determined that the rebuttable presumption that Fanning is entitled to serve as guardian had been overcome, and that it is not in Audrey's best interests for Fanning to be appointed plenary guardian.
According to Florida Statutes (2005) Section 744.3045,
"[p]roduction of the declaration in a proceeding for incapacity shall constitute a rebuttable presumption that the preneed guardian is entitled to serve as guardian." The trial judge considered the evidence presented but found the rebuttable presumption of the appointment of the designated preneed guardian had been overcome.
In conjunction with finding the rebuttable presumption had been overcome, the trial court also considered the application of Section 744.312(4), Florida Statutes (2005), which provides:
If the person designated is qualified to serve pursuant to S.744.309, the court shall appoint any standby guardian or preneed guardian, unless the court determines that appointing such person is contrary to the best interests of the ward.
Miller and Fanning, Appellants v. Goudell, Libbey and Swan, Appellees (4th DCA - Case Nos. 4D06-711 and 4D06-712) (April 12, 2007). |
Private Medicare Plans Accused of Using Shady Marketing Tactics
 Insurance companies have been using improper tactics to sign up seniors for private Medicare plans, according to government officials and advocacy groups. The tactics include going door-to-door, forging signatures, and giving false information. According to an article in the New York Times, enrollment in fee-for service Medicare plans is increasing, but seniors who sign up for these plans often don't understand what they are getting.
These plans, called Medicare Advantage, are offered by private insurers. Fee-for-service Medicare Advantage plans allow patients to visit any physicians or hospitals that will provide treatment based on the conditions set by the insurer. Other Medicare Advantage plans are run on the managed care model. The plans often look attractive because they offer the same basic coverage as original Medicare plus some additional benefits and services that original Medicare doesn't offer, such as vision and dental services. However, a new report by the Medicare Rights Center finds that Medicare Advantage plans actually offer many disadvantages compared to original Medicare. For example, care can actually be more expensive because co-payments may be higher. In addition, seniors who switch from traditional Medicare to Medicare Advantage may find that their doctor does not accept Medicare Advantage plans.
The increased enrollment in Medicare Advantage plans is actually costing the government more, as well. The government pays 19 percent more to fee-for-service Medicare Advantage plans and 12 percent more to all Medicare Advantage plans than it pays for original Medicare.
In April 2007, two insurance agents in Georgia were arrested for defrauding seniors by signing them up for Medicare Advantage plans even though they didn't agree to it, and state insurance commissioners in Kansas, Mississippi, North Carolina, Oklahoma, and Wisconsin are investigating complaints. The insurance industry, however, claims the problems stem from only a few bad actors.
For more on Medicare Advantage, click here.
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Consider Putting Gifts to Grandchildren in a Trust
 Gifting assets to your grandchildren isn't just a nice thing to do; it can reduce the size of your estate and the tax that will be due upon your death. Grandparents can give their grandchildren up to $12,000 a year (in 2007) without having to report the gifts. While you can make an outright gift, pay health care and school costs directly, or put the money in a custodial account, putting the money into a trust has some major advantages.
With the help of an attorney, you can draft a trust that reflects your express wishes about when the income and principal will be available to the grandchild, and even how the funds will be spent. Transferring funds into such a trust offers the following benefits:
- You can reduce the size of your estate by transferring up to $12,000 (in 2007) into each trust you create for each grandchild. No gift taxes will be due in connection with the transfers.
- Although the trust owns the assets, you control them as trustee and can decide what type of investments to make.
- Income earned by the trust from amounts that you've deposited will not be taxed to you; the trust pays the taxes.
- Amounts deposited in trust, and the income earned from those funds, will be used for the benefit of your grandchildren.
- You can provide that the trust terminate at any age you specify.
In order to qualify for these benefits, however, certain restrictions apply. These trusts are complex legal documents and should not be set up without the help of an experienced attorney. As a result, the chief downside of such trusts is the cost of establishing and maintaining them, which you should discuss with an attorney before going ahead with a trust.
As a final note on establishing such trusts, you must be totally comfortable with this gift planning strategy and the amount of money available to you in your estate. In short, you should only make gifts if you feel certain that the amount of funds remaining in your name and the amount of income they will produce will be adequate for your needs.
For more on gifts to grandchildren, click here. |
| Book Review: Alive and Kicking:
Legal Advice for Boomers
Kenney F. Hegland, Robert B. Fleming. Alive and Kicking: Legal Advice for Boomers. Carolina Academic Press, Durham, North Carolina. 2007. 266 pages.
$24.95 at Amazon (click on book to order).
Alive and Kicking is a lively and entertaining book full of advice to baby boomers on putting their own affairs in order as well as helping their parents with the problems they face as they age.
The authors, both elder law attorneys from Arizona, cover almost every topic imaginable in an easy-to-read and humorous style. The subjects treated range from Social Security, estate planning and tax breaks to sex, driving and euthanasia. The first part of the book is designed to be read by everyone and provides information on living wills, the aging process, and protecting one's identity and avoiding scams. The remaining sections are intended to be read only if a specific issue arises, such as retirement or a disability in the family.
The practical information is leavened with amusing quotes and references to books, music, movies, and poetry. Woody Allen, Shakespeare, Charles Dickens, and the Beatles all make cameo appearances. While Alive and Kicking does not provide in-depth information on any one topic, it is an entertaining way to get some practical advice about issues that aging boomers are increasingly facing. |
| Receiving an Inheritance While on Medicaid
 For most people, receiving an inheritance is something good, but for a nursing home resident on Medicaid, an inheritance may not be such welcome news. Medicaid has strict income and resource limits, so an inheritance can make a Medicaid recipient ineligible for Medicaid. Careful planning is necessary to make sure the inheritance doesn't have a negative impact, according to attorney Terry Cipriani in an article in Newsday.
An inheritance will be counted as income in the month it is received. Therefore, if you receive an inheritance and the amount puts you over the income limits for your state, you will not be eligible for Medicaid for at least that month. If you can properly spend down the money in the same month it is received, however, you will be eligible for Medicaid again the following month. The first thing to do is pay the nursing home for the current month (at the Medicaid rate).
If you have money left after paying the nursing home, an elder law attorney can advise you on the proper way to spend down the money. You may be able to give it to a spouse, a child with special needs, or the child's special needs trust. You may also pre-pay an irrevocable funeral contract or buy burial items for a close relative. If the inheritance is too large to spend in one month, an attorney may be able to use other techniques to protect a portion of it. |
GAO Study Finds Transfers by Elderly Are Infrequent and Small
A new Government Accountability Office (GAO) study concludes that few of the elderly are transferring assets in order to become financially eligible for Medicaid coverage of long-term care, and that of the transfers that are made, the amounts are modest. The study also finds that the impact of the Deficit Reduction Act of 2005 (DRA), which imposed harsh new asset transfer provisions, is uncertain.
"This report confirms that the Medicaid long term-care program is not rife with cheats and scam artists," House Energy and Commerce Committee Chair John Dingell (D-MI) said in a statement issued along with House Energy and Commerce Subcommittee on Health Chair Frank Pallone (D-NJ), House Oversight and Government Reform Committee Chair Henry Waxman (D-CA) and Sen. Sherrod Brown (D-OH), all of whom requested the report.
Analyzing nationwide data from 1992 through 2004, the GAO found that at the time most elderly individuals entered a nursing home, they had resources of $70,000 or less, not including their home. This is less than the average cost for a year of private-pay nursing home care. Nine out of 10 elderly nursing home residents had annual incomes of $20,000 or less, and only 9.2 percent of elderly nursing home residents on Medicaid reported transferring cash before applying.
To get a better picture of the extent to which elderly Medicaid applicants transferred assets, the GAO took a close look at 540 randomly selected Medicaid nursing home applications from three states: Maryland, Pennsylvania, and South Carolina. All the applications were covered by the pre-DRA transfer rules. The GAO found that about 90 percent of the applicants had total resources of $30,000 or less, excluding the home. Most applicants were single women. Only one-quarter owned homes and the median value of those homes was $52,954.
Only 10 percent of those who were approved for Medicaid coverage had transferred assets during the look-back period, and the GAO could find only two who had experienced a delay in their eligibility for Medicaid as a result of the transfer. The other applicants were either not assessed a penalty, because the penalty would have been for less than one month of coverage, or the penalty they were assessed had expired by the time they submitted their Medicaid application. The median amount of all assets transferred was $15,152. Most of the asset transfers involved the transferring of financial holdings, such as gifts of cash or stocks, and applicants' children or grandchildren were the most common recipients of the transfers.
The GAO says it is uncertain what the impact would have been on these applicants had the DRA's more stringent rules been in effect. Under the DRA, the penalty period for transferring assets begins when the applicant would otherwise be eligible for Medicaid coverage, not when the transfer occurred, as was the case under prior law. All the applicants in the study who had transferred assets would have experienced a delay in Medicaid eligibility under the DRA, although they may have been able to persuade the state to waive their penalty period if it would cause undue hardship.
The GAO found that the effects of other DRA provisions - for example, those affecting home equity, life estates and annuities -- "may be limited" because few applicants fall under these provisions. "For example," the GAO writes, "few applicants whose files we reviewed appeared to have home equity of sufficient value to be affected by the DRA provisions." Under the DRA, states will not cover long-term care services for an individual whose home equity exceeds $500,000, although states have the option of increasing this limit to $750,000.
To download the GAO study, Medicaid Long-Term Care: Few Transferred Assets before Applying for Nursing Home Coverage; Impact of Deficit Reduction Act on Eligibility Is Uncertain, click here. (The study is in PDF format. If you do not have the free PDF reader installed on your computer, download it here.)
The GAO study echoes the findings of many earlier assessments of the extent of asset transfers among the elderly. Below are links to ElderLawAnswers coverage of some of these studies.
For more on the Medicaid asset transfer rules, click here. |
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Elder Law Associates PA is a boutique elder law firm
that practices exclusively in Medicaid and long term
care planning; home and community-based waiver
services; Medicaid applications; nursing home
residents' rights litigation; asset preservation
planning with a special focus on planning in light of
the Deficit Reduction Act of 2005, including
promissory notes and personal care agreements;
disability planning, including special needs trusts and
guardianship; estate planning, including wills and
trusts; long term care insurance; advanced
directives; and probate, which encompasses estate
and trust administration. We assist clients in planning
for the possibility of disability, incapacity, home
health care, assisted living and/or nursing home
placement. Our firm enables clients to avoid
impoverishment caused by the escalating cost of
long term care, to maintain their right to make health
care decisions and to avoid unnecessary medical
treatment.
We hope you have enjoyed The Elder Law Update. If you have questions about something you read, elder law matters or issues concerning persons with disabilities, we would be delighted to hear from you. We serve as an elder law resource to many professionals and organizations and want to become your elder law resource as well. You can reach us at
Info@ElderLawAssociates.com.
Warm regards,
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Ellen S. Morris, Esq. & Howard S. Krooks, Esq., CELA
Elder Law Associates PA
phone: (561) 750-3850 / (800) 353-3752
fax: (561) 750-4069
This publication is intended for general information purposes only. It is not intended to constitute individual legal advice to any specific client. |
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