205 Church Street
Third Floor
New Haven, CT
06510
203-776-4400
Fax: 203-774-1060
or 776-4411
davis@sharinglaw.net
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PLANNING
FOR THE ELDERLY(see
disclaimer)
Last updated November 1, 2006
- Jump HERE to the
"consumer" links, HERE for lawyers' links, HERE
for a list of articles referred to on this page. Skip past
the following "alert" HERE.
CLICK
for slide-show on Medicaid eligibility updated to 5/18/06
- Don't forget
to check CTElderLaw.org for
useful summaries of Connecticut law affecting the elderly, including
nursing home rights.
DEFICIT REDUCTION ACT
eff 2/8/06: ANY TRANSFER
OF ANY SIZE MADE WITHIN FIVE YEARS OF APPLYING FOR
MEDICAID MAY CAUSE LOSS OF ELIGIBILITY. The new law
applies to
transfers on/after 2/8/86 as follows:
- "Look-back" period
extended to five years. (For an explanation, see my page on "What If I Give It All Away?")
- if ANY gift has been
made in five years and cannot be PROVEN to be exclusively for reasons
other than qualifying for Medicaid, the result will be a period of
ineligibility that will start AFTER THE PERSON MAKING THE GIFT NEEDS
LONG-TERM CARE and AFTER THE PERSON HAS NO OTHER ASSETS (or if married,
his/her spouse is already reduced to the minimal amount the law allows)
- NO ONE who is unmarried
can qualify for long-term care benefits (whether in a nursing home at
home) with equity in the home over $500,000 (sounds easy, but what if
you happen to live in a very expensive area?)
- Note: these
proposals are the similar to those in the so-called "Transfer of
Assets" Waiver request that
Governor Rell withdrew
last summer (2005).
SECOND: TRANSFEREE
LIABILITY IS THE LAW --
AT LEAST IN THEORY, THE STATE CAN SUE YOUR CHILD IF YOU MAKE A GIFT
WITHIN 3 YEARS* OF APPLYING FOR MEDICAID .
- In 2003, the
legislature adopted so-called "transferee
liability" rules that were tied to the approval of the Section 1115
waiver (see below). On June 8, 2005, the legislature made those
rules effective IMMEDIATELY, despite the waiver's rescission. It
is not entirely clear if the law applies to gifts since 2003, or only
to gifts after 6/8/05
- *Note that gifts made
on/after 2/8/06 would now create "transferee liability" for
applications within 5 years.
- The
statute attempts to create a "debt" owed by the
giver AND the recipient of any gift given after the date the bill is
signed by the
Governor, in the amount of the
cost of care for the person who made the gift (up to the amount of the
gift, not more).
- The State is authorized
to use any lawful means to
collect the debt.
Last But
Not Least: "Estate Recovery" from Annuities. Those
buying annuities should keep in mind that even if the annuity
"qualifies" as valid, if the annuitant who is receiving Medicaid dies
before the end of the guaranteed term, don't look for the named
beneficiary to get anything. The state will recover for any
benefits paid from the amounts paid to the beneficiary. The
proposed legislation tightens this even further.
The good news: The way
seems clear for a "well" spouse to purchase an annuity that will
enhance income provided it is actuarially sound, irrevocable,
non-assignable, and meets certain other requirements
=============================================================================
Three
questions --
(1) "How can I keep my home and support my lifestyle?"
(2) "How can I pay for what care I may need?" and
(3) "How can I leave something behind for the people and causes I care
about?"
-- confront us as we enter old age
What are the
answers?
Financial planning with reverse mortgages and home
equity loans, annuities and retirement plans, earnings in compliance
with Social Security laws, and careful projections in spending
principal, to enable an elderly person to remain at home or to choose
wisely in selecting an appropriate assisted living facility or other
living environment.
Selecting appropriate long-term care
insurance and
"Medigap" supplemental insurance, and taking advantage of many helpful
government programs including Medicare, Medicaid, the Connecticut Home
Care Program for Elders, and
ConnPACE, to ensure continued care at home as long as possible, or if
necessary, in an institutional setting.
Transfers of property, by Will or if
appropriate
during life, whether to minimize death and income taxes, or to prepare
for Title 19 (Medicaid) eligibility if necessary, but keeping your
needs
and wishes as the guiding
principle.
What kind of
planning is involved, and how can a lawyer help?
A typical
plan
might require a Will and/or living
trust agreement, durable powers of
attorney,
living will and related documents, and designations of conservator in
the
event of future incapacity. The plan might also require evaluating the
effect
on Title 19 eligibility of planned gifts to family members, rights
under
Social Security or Medicare, or might involve real estate
transfers.
If special care is needed, you may
also require
advice about eligibility for programs that provide coverage for nursing
home care or
for
significant care at home, or help determining whether or not your
resources
are sufficient to support residence in an assisted living
facility.
Families with relatives in institutional
facilities may require
advice on the best way to ensure good care for their loved ones, or
advice
on enforcing their legal rights.
When planning has not been done, families
may need assistance with techniques such as conservatorship if necessary to ensure an older
person's well-being.
And after the planning is done
(or if it wasn't done) -- families often need help with an application
for Medicaid once an individual is in a nursing home or requiring
long-term care at home.
It
is vital to consult an
attorney when a
married couple is concerned that loss of income or assets to pay for
one spouse's needs, may impact the quality of life of the spouse at
home.
It
is vital to consult an
attorney when
anyone over age 55 with less than $300,000-$500,000 intends to make
gifts of any significant amount, or when a gift has been made and an
application for Medicaid benefits is being filed.
===================Various Notes and Announcements====================
New
requirements for conservators when
placing a ward in an institutional setting. Effective
October 1, 2005, conservators must seek Probate Court approval before
placing a ward in an institutional setting; if emergency placement is
required, conservators must report to the Court after placement is
made; and placement may be made ONLY if "necessary."
TIP:
Interplay of Home Care Program and a Reverse Mortgage. The
Connecticut Home Care Program for Elders can provide much-needed home
care services for those with limited resources, unable to pay for
care. Similarly, the Cash Assistance program can even supplement
income for those with very little means of support. HOWEVER, for
those who aren't married, the State may place a lien on the home.
The idea is that the lien must be repaid when the individual leaves the
home for an eventual permanent stay in a nursing home; or when the
individual dies. The problem is that these programs may not be
enough, but the lien may deny the individual access to equity in the
house by way of a reverse mortgage. That is, the mortgage company
will require that any liens on the home be paid off out of mortgage
proceeds at the time of closing. While the state lien is not
repaid until death/institutionalization, and bears NO interest, the
mortgage company lien accrues interest immediately. SOLUTION? If
there is ANY chance that you would want to access your home's equity to
provide for care beyond what the Home Care
Program will provide,
you may wish to secure a reverse mortgage Home Equity Line of Credit
BEFORE you apply
for benefits. You do not have to use up the line, but once the
mortgage is in place the state lien won't prevent you from
getting the mortgage. On the other hand, reverse mortgage fees
can be very high and the debt begins accruing interest
immediately. Read more in this outline.
Elder
Law Answer Book. I am proud to be co-author of the Elder
Law Answer
Book (2nd edition) (with annual updates) with
nationally-recognized author Robert Fleming.
In a straightforward Q&A Format, the Elder Law Answer Book
tackles
the many different questions that confront those who advise the elderly
and
their families -- from Medicaid to Veterans Benefits to Wills and
Trusts
to Retirement Benefits. While it isn't necessarily intended for
the
general public, it should be invaluable to planners, accountants,
non-specialists,
and others who assist the elderly. You can order this book from Aspen
Publishers, Amazon.com, or other booksellers, as well as the annual
updates.
Help
Understanding Medicaid. Medicaid is a confusing
subject. This website includes a Powerpoint slide-show on "Medicaid and Long-Term Care in Connecticut"
that should get you started in learning about this difficult
topic. THIS SLIDE SHOW IS
CURRENT TO MAY 2006 -- it now includes the Deficit Reduction Act
changes. This site also includes 2 articles to
explain what assets are "exempt," and
what preparations you should make to "spend
down"
if you or a loved one (in CT) is inevitably likely to be on Medicaid in
a short period of time. You may also want to read about the
tricky subject of "transfers of assets"
subject to the ALERT above.
Please note that if you are married, (1) the law provides you with
additional protections, but (2) the State of Connecticut is restricting
these protections more every day -- you MUST consult an attorney if
you and your spouse have more than $19,020 in exempt assets or if one
person could not support him/herself on his/her own income alone.
How to Spend
Down. When Title 19 (Medicaid) is in the near future (you or
a loved
one has only enough in remaining assets
to pay for a few months of care in a skilled nursing facility or at
home), it is important to spend those remaining assets wisely.
Title 19 is a safety net and does not address all your
possible needs. See my checklist for, "Getting
Ready for Medicaid," for some ideas about wise and
practical ways to use those last dollars to protect
yourself. IF YOU
ARE MARRIED, DO NOT ACT upon
these ideas without consulting an attorney!!!
Powers of Attorney:
Many people find it useful to have in force a Durable Power of Attorney
giving one or more persons whom you trust, the power to handle
your affairs for you if
you are unable to do so. If you have a valid power of attorney,
you
may avoid the need for the appointment of a court-supervised
"conservator"
if at some point you become unable to handle your affairs. On the
other hand, the Power of Attorney is a powerful document. You are
right to be cautious about giving another person broad power over your
affairs. Be sure your attorney-in-fact is aware that he or she is
required by law to act for your benefit or otherwise as you
have
directed, and that in Connecticut, the probate court has the power to
hold
accountable the person named to act for you. Finally, your Power
of
Attorney document should reflect your wishes. Did you know
that
unless the Power of Attorney expressly authorizes gifts, even
charitable
gifts you make ever year, the attorney-in-fact has no authority to make
gifts of your funds? And that giving an unlimited power to make
gifts
to him or herself, can cause tax problems for the
attorney-in-fact? You should discuss your power of attorney with
a lawyer. For more
information on powers of attorney in Connecticut, you may want to
consult
my articles published in www.CTElderLaw.org,
a consumer-oriented website that provides legal information of interest
to elderly Connecticut residents. (To go straight to the part on
Powers of Attorney as I wrote it, click here;
Connecticut Legal Services has added references to the actual laws on
this as well as making the Q&A easier to navigate, on this page.)
529 Plans. Thinking of giving
to your grandchildren? "State-sponsored
qualified tuition plans" can offer tax-free savings with significant
control retained by the donor. However, there are pitfalls you
should worry about unless you are certain to have sufficient private
resources
to pay for all your future long-term care needs without recourse to
government
benefits. Click here for my article on "Funding
College with Section 529 Plan Gifts: Benefits and Pitfalls."
Planning to Move? You
should know that the laws of our 50 states are enormously different
when it comes to insurance coverage,
Medicaid eligibility, the validity of trusts, and even the meaning of
your will. It is vital that you consult a local attorney after,
or even before your move. Find a local attorney who is a member
of
the National Academy of Elder Law
Attorneys
For
a list of CONSUMER
LINKS formerly on this page click HERE.
List of Articles
Referred to on this Page:
Other
places to write or call: (please give me
feedback on this information so I can keep it current)
Connecticut
Programs and Information:
Elder Rights/Protective Services.
Investigates
potential cases of elder abuse, neglect, abandonment or exploitation of
persons 60 and over including monitoring and linkage with community
based services. 1-888-385-4225 or 1-860-424-5241; after
hours/weekends Infoline 800-203-1234.
Connecticut Home Care Program for
Elders. Offers
home and community based services as an alternative to institutional
placement. Program is available to Connecticut residents aged 65
and older who qualify financially and functionally.
1-800-445-5394 or 1-860-424-5181. For eligibility information,
see the "Health Care" page of the CTElderLaw.org
website, or go directly to the CT
Home Care page. The Department of
Social
Services also has information.
CHOICES, help for Connecticut
residents in
selecting appropriate "Medigap" or Medicare supplemental insurance:
1-800-994-9422, Connecticut's program for Health Insurance Assistance,
outreach, information and Referral Counseling and Eligibility
Screening" (affiliated with the Area Agencies on Aging.)
Connecticut Hospice, Inc., 61
Burban Drive,
Branford, CT 06405. Tel: (203) 481-6231, Fax: (203)
483-9539, email: cthospc@interserv.com.
Connecticut Hospice provides care for those in the terminal stages of
illness.
Information
on Reverse Mortgages:
http://www.hud.gov/rvrsmort.html
- the government's site on reverse mortgages.
AARP has a comprehensive site on reverse
mortgages at http://www.aarp.org/revmort; you can also check with the National
Center
for Home Equity Conversion (NCHEC) at http://www.reverse.org/
The following
documents may be somewhat dated, so check the updates.
"Money from Home: A Consumer's Guide to
Reverse
Mortgage Options." Write to FannieMae, 3900 Wisconsin Avenue NW,
Washington, DC 20016-2899.
"Facts for Consumers -- Reverse
Mortgages," published
by the Federal Trade Commission, Office of Consumer/Business
Education, Washington, D.C. 20580.
"Home Made Money," published by
AARP, lists key
questions to ask, offers less costly alternatives to reverse mortgages,
and includes information on obtaining reverse mortgage
counseling. The guide
can be ordered online or by calling toll free 1-800-424-3410. You
can order online by sending email to RMinfo@aarp.org.
Ask for publication stock #D12894. Include your name, full postal
address, the publication title and stock number. There is also an
online version at http://www.aarp.org/revmort,
AND you can download -- but it is 2 MB, in Adobe.
"Your New Retirement Nest Egg," by Ken
Scholen,
available from
The National Center for Home Equity Conversion, 7373 147th Street
West, Suite 115, Apple Valley, MN 55124.
Help
with Medicare and Medigap Insurance
Help with Medicare Issues: Center for Medicare Advocacy,
P.O. Box 350, Willimantic, CT 06226. 1-860-456-7790. Free
assistance for Connecticut residents in most cases. AN
INVALUABLE SOURCE OF HELP WITH THAT IMPOSSIBLE MEDICARE PART D
PRESCRIPTION BENEFIT.
Help selecting appropriate "Medigap"
or Medicare
supplemental insurance AND
the appropriate Medicare Part D Prescription Plan: CHOICES,
1-800-994-9422,
Connecticut's program for Health Insurance Assistance, outreach,
information and Referral Counseling and Eligibility Screening"
(affiliated with the Area Agencies on Aging.) You can also check
the CT Insurance
Department site for Medigap policies.
General:
American
Association of Retired Persons, Consumer
Affairs Division, 601 E Street, NW, Washington, D.C. 20049,
telephone (202) 434-2277. http://www.aarp.org
National Association on Area Agencies on
Aging, 1112
16th Street, NW, Washington, D.C. 20036, telephone (202) 296-8130
(maintains a nationwide "Eldercare Locator Number," a toll-free
number for information about public programs for older Americans.
Call 1-800-677-1116).
Brookdale Center on Aging, Hunter
College, 425 East
25th Street, New York, NY 10010. Tel: (212) 481-4426; Fax: (212)
481-5069. Many useful publications.
DISCLAIMER:
THIS INFORMATION IS NOT
PROVIDED AS LEGAL ADVICE AND
CREATES NO ATTORNEY-CLIENT RELATIONSHIP. NO ENDORSEMENT IS
INTENDED BY ANY REFERENCES HEREIN. PLEASE CONSULT YOUR OWN LEGAL
AND FINANCIAL ADVISORS BEFORE TAKING ANY ACTION.
I can only provide general information, and will
not provide advice about a particular case without a formal engagement.
Writing
to me does not create
an attorney-client relationship.

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Lisa Nachmias Davis
Attorney at Law
205 Church Street, Third Floor
New Haven,
CT 06510
Phone: 203-776-4400
Fax:
203-774-1060 or 776-4411
davis@sharinglaw.net
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