Planning For Medicaid Long Term Care. The Role of Competency, Guardianship and a Power of Attorney

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

A family member of a dear client asked me to provide legal assistance. Here is their situation: Both mom and her step-father are in need of assisted care, and up until now mom has been afraid to give a power of attorney or let anyone manage her finances. Her husband has dementia and cancer, and her doctor is willing to sign off on his incapacity. Her husband needs to be admitted to a care facility and the family member is afraid that her mother’s resources will be quickly depleted by the cost involved for his care and soon, her own.

They are living in a condo in Margate (Cape May County), which the mom owned before marrying her present spouse. As far as I know, mom owns the condo, received some insurance money from her first husband’s estate, and receives a social security pension. Mom has already broken some bones in falls, is in her 80’s (I believe) and is developing dementia to the point where her daughter has had to hire in-home assisted care for her out of her own pocket. The care provider has advised the daughter that both mom and stepdad need to be placed in an assisted care facility.

The daughter wants to understand a QIT (Qualified Income Trust) and how to set one up in order to protect her mom’s assets and qualifying her for Medicaid to get them the care they need.

My response is straight forward. The family’s priorities are out of order. A QIT probably isn’t even a concern (see my page on QITs found on NJMedicaidAttorney.com: CLICK HERE). Guardianship may need to be established first or at a minimum a Power of Attorney (POA) must be executed by both mom and/or stepdad in order for the daughter to have any legal authority to do anything, no less Medicaid Eligibility planning. If she files for guardianship and wants to move her parents out of state, she will have to file a petition in NJ and in the state of relocation to allow her to move them and that will create more headaches. To learn about interstate guardianships visit NewJerseyGuardianshipAttorney.com (CLICK HERE)

Things are never easy when helping out aging family members.

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.

Medicaid Planning and Transferring Property Through Gifts – How You Can End Up in Hot Water If Not Done Properly

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

Nursing homes are expensive.  If you pay for them on your own, they can cost your family hundreds of thousands of dollars.  Many people simply cannot afford a nursing home, and turn to Medicaid and their county boards of social services for help.  Unfortunately, many are denied eligibility because they simply have too many countable resources.  To obtain Medicaid for the cost of a nursing home, the value of the applicant’s resources may not exceed $2,000.  This is a very low number $$$.  A natural reaction for a family is to get assets out of the elder’s name to make them eligible for Medicaid.  The thought process of many families is to transfer the assets from Grandpa’s name to Grandma’s name, or give the property to the kids and grandkids so they can qualify.  You are allowed to do this, but if you make transfers at less than “fair market value” within 60 months (5 years) of your Medicaid application, Medicaid will deny eligibility.  This is often times the case with many Medicaid applicants.

So what does “less than fair market value” mean?  The common way of transferring something in this fashion is by giving it away as a gift.  So if Grandpa’s interest in his house is transferred to Grandma, and Grandma pays nothing for it, the interest is considered a transfer for less than fair market value.  If Grandpa’s interest in the house is worth $250,000, and he gives it to his son for $100, that is a transfer for less than fair market value.  It is not just limited to houses.  Transfers of pension funds, IRAs, savings account, even valuable antiques that are given away or are sold at ridiculously low prices can be seen by the board of social services as transfers for less than fair market value.  If the local board does make this determination, the applicant is subject to a period of Medicaid ineligibility before the applicant is eligible for Medicaid benefits.

Now with everything, there are exceptions.  In a future blog, I will discuss a commonly used exception called- the caregiver child exception.  Stay tuned for that blog.  For further questions and discussions on how you can begin planning to avoid the 5 year lookback, and whether there are exceptions you can use to get your Medicaid benefits right away, give me a call.  You don’t want to receive a denial of benefits because you gave away all your assets just to make you qualify for Medicaid.

To discuss your NJ Medicaid Eligibility 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.

Is It Possible to Be Declared Disabled By Social Security or The State of New Jersey, Yet Be Denied Medicaid Because He or She Are Not Medically Disabled?

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

Recently a client aged 55 with Parkinson’s was deemed permanently disabled by Social Security and ineligible to collect SSDI. An application for Medicaid was filed and the state nurse performed a Pre-Admission Screening (PAS). She determined that the person is not medically eligible for a Medicaid assisted living level of care. Doesn’t the Social Security Disability ruling trump the State’s (OCCO’s) medical assessment?

The answer is not necessarily. The fact that someone is eligible to receive SSDI does not mean the person meets the level of care needed for Assisted Living Medicaid. These are two different standards. There are lots of people who cannot engage in meaningful employment – SSDI disabled – who do not require an institutional Medicaid level of care.

The issue, from the state’s perspective, is whether the individual needs hands on assistance in 3 or more activities of daily living (dressing, bathing, transfer, eating, toileting, bed-mobility, and ambulation) or, if cognitively impaired, needs supervision or cueing in 3 or more a combo of supervision/cueing and hands on.

In this case the applicant did not need that much help and so the state was correct.

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.

How Do You Appeal a Lien Imposed By Medicaid Under the New Jersey Estate Recovery Act

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

New Jersey is aggressively filing liens against the estates of deceased beneficiaries. They are doing this to recover funds spent for Nursing Home and other Medicaid healthcare benefit costs paid out during the lifetime of the eligible recipient. What do you do if you receive a notice of lien OR receive a bill for benefits paid and a claim is being made against the Estate of a community spouse OR non-related beneficiary?

The answer is…you appeal.

There are two methods to appeal a lien filed against a decedent’s property by the Department of Human Services, Division of Medical Assistance and Health Services. The first method is through the Department itself, with the appeal then being assigned to a judge in the Office of Administrative Law (OAL) through a fair hearing. Under this procedure, as outlined in N.J.A.C. § 10:49-14.1 (h)(3), the estate has 20 days from the “date of receipt of the notice to file a request for a waiver or compromise of the Division’s claim based upon undue hardship.” Upon receipt of the request, the Division then has 45 days to render a decision in writing. If the estate wishes to contest the decision, a written request to OAL must be made within 20 days for a fair hearing. Once an ALJ renders a decision, the estate may appeal a final decision to the Appellate Division of the Superior Court. The Notice of Appeal must be filed within forty-five days of the date of the final decision.

The second method to appeal a lien is by filing a case in Superior Court naming the Department as a defendant under N.J.S.A. § 30:4D-7.8. Unlike the administrative procedure, the Superior Court method only requires that the estate claim that it wishes to “examine the validity [of the lien] thereof or the facts and circumstances surrounding the entry [of the lien] thereof.” The court will proceed in a summary manner and enter appropriate judgment. And unlike the strict 20 day limit of the Division, the statute does not give a strict time limit to file the action. Since it is a lien, outside sources consider it to be a judgement, and under §2A:1405, the statute of limitations is 20 years to file for a claim.

To discuss your NJ Medicaid estate recovery appeal 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.

Medical Eligibility for Medicaid and the Importance of ADL’s – Activities of Daily Living

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

Medicaid eligibility for Medicaid often centers on the existence of ADL’s.  ADL’s are known as “the Activities of Daily Living”.  They are the most crucial link between the individual and Medicaid evaluation of that individual for eligibility.  Regardless of the medical diagnosis of any condition (Alzheimer’s, Dementia, Parkinson’s, ALS, etc.), the effect of that condition requires that the individual either (1) need assistance with at least three (3) ADL’s every day of the calendar week and/or (2) be a safety risk to himself or herself because of the impact of the condition on his/her ability to perform their Activities of Daily Living independently and without constant cueing by another person present.

The word “assistance” seems straightforward but in actuality it is not because New Jersey Medicaid requires an applicant for institutional and home based caregiver to “need hands-on assistance” with such things as clothing, bathing, toileting, ambulatory, transferring, eating.  Hands on assistance means that another individual must be present to physically put his or her hands on the individual in order to accomplish those tasks.

The process Medicaid has selected to validate the need with assistance of daily needs is a pre-admission screening (commonly known as a PAS).  The state will send out a nurse or other medical professional to perform this assessment usually at the place of the residence or current facility placement of the applicant.  Often your physician completes a PA-4 form which is essentially a preliminary screening tool signed attesting to the fact that the applicant requires a nursing facility or assisted living residence within the immediate future.  If the PAS is denied, then notwithstanding financial eligibility, the application will be denied.  Note, a denial triggers an immediate right to a Fair Hearing Appeal, as discussed elsewhere on this site.

The take away from this discussion is to alert you to make an objective assessment of your loved one’s ability to independently perform his or her ADL’s.  It’s the first test in a series of tests to qualify for Medicaid.

To discuss your NJ Medicaid, Medicare and Elder Care 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.

The Need to Establish Medical Eligibility for Medicaid Long Term Care in New Jersey 

  

 

Finding Out What MLTSS Programs and Benefits Exist For your Long Term Care

By Fredrick P. Niemann, Esq. of Hanlon Niemann Wright, a Freehold, NJ Special Needs Trust Attorney

The NJ Department of Human Services characterizes the Medicaid eligibility process as complex. It notes that each program must be “evaluated according to an applicant’s individual circumstances.”  I can tell you from experience Medicaid Eligibility is more than complex. When you try and go through the various government resources intended to provide general information to the public about Medicaid programs, it is clear that the government deliberately chooses not to specify what conditions or other factors make one eligible or ineligible. One program with vague and impressive operating standard is MLTSS aka (Medicaid Long Term Support Services).

 

The MLTSS program supports the following: Benefits and Services, Case Personal Care; Respite; Personal Emergency Response System (PERS), Home and Vehicle Modifications; Home Delivered Meals; Assisted Living; Behavioral Health Services; Community Residential Services; and Nursing Home Care

 

Since July 1, 2014, special needs individuals eligible for MLTSS who wish to receive MLTSS benefits must disenroll from their Dual Eligible Special Needs Plan. Then these are the options:

  1. Return to original Medicare and a Medicare Part D Drug Plan, with NJ

Family Care services handled by the same MCO that offered their D-SNP

coverage

  1. Return to original Medicare and a Par D Drug Plan, with NJ FamilyCare

services handled by another MCO.

  1. Enroll in a Medicare Advantage plan with drug coverage, with NJ

FamilyCare services handled by the same MCO that offered their D-SNP

coverage.

  1. Enroll in a Medicare Advantage plan with drug coverage, with NJ

Family Care services handled by another MCO

  1. Enrollment in a PACE program.

 

For NJ FamilyCare MLTSS eligibility, you must continuously meet the following three criteria:

  1. Categorical
  2. Aged – 65 or older
  3. Blind or Disabled – Under 65 years of age determined blind or

disabled by the Social Security Administration or the State of  NJ.

  1. Clinical
  2. Must meet clinical eligibility criteria established by state of NJ – this

is a case-by-case basis – a state worker will determine what one can do

and  not do after an assessment.

  1. Financial
  2. For one person income must be less than or equal to 2,163 per month
  3. Income for a couple can be equal or less than 4,326 per month
  4. All income is based on the gross amount

 

In order to enter the MLTSS system, a potential new enrollee must do the following:

  1. Contact the local Aging and Disability Resource Connection (ADRC) for

information, assistance and screening.

  1. Contact County Welfare Agency to apply for Medicaid

 

MLTSS Choices:

If you have NJ FamilyCare only:

  1. NJ FamilyCare Organization (MCO)
  2. Program of All-Inclusive Care for the Elderly (PACE)

 

If you have NJ FamilyCare and Medicare:

  1. MCO plus Medicare plan(s)
  2. PACE

 

If one chooses MCO, one must enroll in one of the NJ FamilyCare  Organizations:

  1. Amerigroup New Jersey INC.
  2. Horizon NJ Health
  3. UnitedHealthcare Community Plan
  4. WellCare Health Plans of New Jersey

 

If one chooses PACE there are few things to know:

àIt provides all services including nursing facility care, if needed

àYou must be 55 or older, able to live safely in the community at the time of enrollment and have care needs at a nursing home level.

àMust live in the county of the PACE organization

  1. Life at Lourdes – Camden County
  2. Lutheran Senior LIFE – parts of Hudson County
  3. LIFE St. Francis – Mercer County and northern Burlington County
  4. Inspira LIFE – Serving Cumberland and parts of Gloucester and Salem

counties

  1. PACE – parts of Monmouth County and Ocean County

 

To discuss your NJ special needs trust or Medicaid eligibility 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.

Is a Qualified Income Trust (QIT), Trustee Entitled to A Commission?

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

In several counties trustee commission involving a QUIT have been permitted in Bergen County for once (CBOSS) , the County Board of Social Services advised the Trustee of a QIT that he was entitled to a 6% commissions. The patient later went to an assisted living residence in Ocean County. After a few months of accepting Trustee commissions, the Ocean County CBOSS advised the Trustee that he should not have accepted the commissions as Trustee despite the fact that he was advised by the Bergen County CBOSS to accept the commissions. CBOSS further advised the Trustee that it was ordering him to cease accepting commissions going forward and to reimburse the assisted living facility for all commissions previously earned. So what’s the law on Q.I.T. trustee commissions?

While under New Jersey trust law, a trustee is entitled to a 6% commission/fee, that doesn’t mean a Q.I.T. can pay it without disqualifying the beneficiary for Medicaid. The trustee commission fee’s priority is lower than the Medicaid cost share payment to beneficiaries so typically, there won’t be anything left in the trust to pay the trustee fee although occasionally where the income is high enough there may be enough $ to pay the commission. If the trustee takes the 6% anyway, he or she may disqualify the Q.I.T. beneficiary from Medicaid even though he/she would be in compliance with Title 3B of the New Jersey Trust Laws. The big issue here is the trustee’s conflict of interest between wanting to get paid and his duties to the Q.I.T. as trustee.

But please note that I have been recently advised that their case has been selected to be a test case for a fair hearing in Ocean County (transferred from Bergen County) to remove Trustee Commissions from a Trustee under a Qualified Income Trust. Ocean County has requested that the trustee file a fair hearing request. The County has also advised him that this will be a test case. The hearing is scheduled in Ocean County. I’ll advise our readers of the outcome.

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.

Do You Need to Fund A Trust With Money Before the Trust is Legal in New Jersey?

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

So you have just created a trust, signed some papers, and you are ready to go with it.  Now what? Must you fund this trust?  What does funding a trust mean?

To fund a trust means to change the ownership of your property to the trustee of the trust, or to change the beneficiary of investments, retirement plans or life insurance to the name of trust owner.  Subject to the type of trust you created, the means and method of funding the trust depends upon why you set up the trust and what you wanted to accomplish.

A revocable living trust is one where you decide who benefits from your assets when you are alive or become disabled, or die.  It eliminates the hassle of probate because your family knows what they are getting pre-death.  The assets of the trust must be retitled into the trust in order for your trust property to be administered according to your wishes, particularly if you are disabled.  Note though that assets in a revocable trust are still available to creditors, and are still counted as resources for purposes of Medicaid and death taxes.

Another common trust people tend to execute is an irrevocable trust.  This type of trust protects assets from creditors.  It is critical that the assets of the trust that you wish to keep safe from creditors and don’t want counted for Medicaid purposes are placed in to this type of trust.  The timing of when the assets are transferred is critical with Medicaid.  If you are an avid reader of this site or watch my videos, you know Medicaid looks back 60 months, or 5 years, to review all of the transfers you have made, invalidating those transfers made within that time period when determining eligibility.  Therefore, with each transfer to a trust you start another 5 year waiting period before Medicaid does not count the transfer.

There are other available options to transfer your estate when you die. You can transfer your remaining property via your last will to a trust if you so choose.  But you may not incur the benefits of asset protection or give your executor the opportunity to control the assets.  This is huge if you want a partial say on how your money is distributed after you die. Moreover, if the money is going to a spouse looking to get on Medicaid, you just jeopardized their eligibility (assuming the IRA is not annuitized).

These are just some of the considerations you must evaluate when creating an estate plan.  Always be aware of how you own your property. The consequences do matter.

To discuss your NJ Medicaid and Estate Planning 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.

Medicaid Eligibility – Can a Parent Pay for Improvements to Child’s Home

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

Can a parent make improvements to a child’s home when they are moving in with their child as opposed to a nursing home, and at what point do these payments become a gift causing ineligibility for Medicaid benefits.

You’re likely to get vague answers on most legal blogs that state, in short, yes a parent can pay for improvements to a child’s home, but talk to a lawyer to structure the payments so that your state Medicaid agency doesn’t treat the payments as gifts – which is not very helpful.

In a recent conversation with a representative at the New Jersey Medicaid eligibility office, the County Board of Social Services evaluates applications at the time they are received. She did say it would be important to save all the receipts for the improvements in this hypothetical. I asked her whether there were specific guidelines they followed in distinguishing a gift from an exempt payment for improvements. She said they follow state and federal rules, and the best she could offer me is that they look at what improvements were made and they see whether they were really for the purpose of making the home adequate for the parent. She also said they take into consideration how elaborate the improvements are (i.e. granite counter tops as opposed to Formica).

This representative did not have an answer for what would happen in the case of the value of improvements exceeding the value of the life estate a parent can buy in the child’s home after living in the home for one year. N.J.S.A. 10:71-4.10(b)(6)(iii). Her response is that it would all have to be evaluated on a case by case basis at the time the application was received. My suggestion! Come in and discuss your thinking and plan. Some improvements will be definite yes and others no. But let’s strategize together.

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.

Will a Prenuptial Agreement Be Recognized Under New Jersey Medicaid Eligibility Law

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

A prenuptial agreement is “an agreement (contract) between prospective spouses [fiancées] made in contemplation of marriage and to be effective upon marriage that fixes the respective financial obligations and consequences of married couples upon death and/or divorce.” Jonathan E. Fields, Prohibited Subject Matter in Prenuptial Agreements, § 1.01 2006 Family Law Update (Ronald L. Brown Laura W. Morgan, eds., Aspen Publishers, 2006). Parties to a premarital agreement may contract with respect to mutual property rights and obligations; rights to acquire, manage, and dispose of property; disposition of property on separation, dissolution, or death; modification or elimination of spousal support; wills and trusts; and death benefits from life insurance policies. Uniform Premarital Agreement Act § 3(a), Uniform Laws Annotated p. 373. Since prenuptial agreements provide for the distribution of assets upon death or divorce, they can serve an important role in estate planning. They also allow couples to specify which assets should be considered marital property and which assets should be treated as personal property upon the dissolution of the marriage. Many couples use prenuptials as a guide that structures their finances according to a mutually predetermined plan. In addition, Prenuptial agreements allow an individual to protect a family business or specific piece of property from potential claims by a former spouse. Allison A. Marstona, Planning For Love: The Politics of Prenuptial Agreements, 49 Stan. L. Rev. 887 (1997).

Prenuptial agreements were once widely viewed as contemplating divorce and contrary to public policy, but in recent times have gained wide acceptance in many jurisdictions either by judicial declaration, through adoption of the Uniform Premarital Agreement Act (“UPAA”), or by other statutes expressly providing for their acceptability. New Jersey adopted the UPAA on November 3, 1988. N.J.S.A. §§ 37:2-31 to -41. Prior to the enactment of the UPAA, the validity of prenuptial agreements in New Jersey was governed by the holding in Marschall v. Marschall, 195 N.J Super. 16 (Ch. Div. 1984). Susan Reach Winters, Marriage Agreements – Prenuptial Agreements, 16 N.J. Prac., Legal Forms § 47:1 (4th ed.)(2014).

Although prenuptial agreements are now generally afforded acceptance they still remain a cause for concern for the court due to a potential of unequal bargaining power and because the parties do not stand at arm’s length to each other, rather there is a relationship of the greatest trust and confidence. Courts strictly scrutinize prenuptial agreements accordingly and are often unwilling to treat them like other contracts. An additional consideration with regard to prenuptials is that federal law may preempt spouse’s contractual terms. For example, if a spouse attempts to give waiver of rights to an Employee Retirement Income Security Act (“ERISA”) qualified pension plan in a prenuptial agreement courts have held this waiver to be invalid because federal law requires that an actual “spouse,” not merely a fiancée who signs a prenuptial agreement, of a plan participant waive such right.

In 2013 New Jersey Governor Chris Christie signed a bill that amended both N.J.S.A § 37:2-38 and N.J.S.A § 37:2-32. The new law restricts judicial interpretations of prenuptial agreements by mandating that judges evaluate the agreements as of the date of their signing, not the date of enforcement. Prior to the new law courts looked to the procedural and substantive fairness of prenuptial agreements prior to enforcing them. Generally, a contract would be found unconscionable if its enforcement would leave one spouse without means of reasonable financial support, however the new law has strengthened the enforceability of premarital agreements. In addition, a prenuptial agreement may be deemed unconscionable now only if one party did not receive full disclosure of assets, was without counsel or was otherwise uninformed or disadvantaged.

This new law has effectively removed judicial consideration of changed circumstances. For this reason it is important that both parties consult with independent legal counsel when signing a prenuptial agreement. Doing so potentially fosters important communication about important issues and ensures fairness and full understanding by both parties.

To discuss your NJ Medicaid eligibility 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.