What Is Elder Law?
Elder law is an area of law that deals primarily with issues concerning the elderly. However, elder law attorneys help many younger clients prepare for old age as well. Elder law attorneys have the skills and knowledge to help their clients plan for long-term care and legal incapacity. They can also help clients create wills, living trusts, durable powers of attorney, and other estate planning documents.
In addition, elder law attorneys can help clients with issues revolving around public benefits programs, such as Medicaid (or Medi-Cal), Medicare, and Social Security.
Elder law attorneys also know about the applicable tax consequences of transferring assets and some attorneys specialize in elder abuse. Attorneys practicing elder law can also help refer you to other resources and services available to the elderly.
Selecting an Elder Law Attorney
Selecting a competent elder law attorney is important because the rules surrounding this area of law are obscure, confusing and irrational. To make matters worse, the rules are neither well known nor well published. In order for an attorney to give his/her client accurate and complete advice and information, he/she must receive training in this area of law. Unfortunately, many attorneys do not take the time to receive this training and therefore, their advice may not be the best. Contact the Kisner Law Firm today and start planning for tomorrow.
What Is Medi-Cal Planning?
Medi-Cal Planning is basically asset preservation. Many middle income families have lost their homes and life savings to the high cost of nursing home care. But, with Medi-Cal planning, those families could have preserved their major assets and had their nursing home bills paid for by Medi-Cal.
Medi-Cal is California's Medicaid health care payment program. It is funded by the state and federal governments. The program is designed to pay for the medical care of those California residents who have very limited income or resources. However, with some planning, middle-income persons can qualify as well. Medi-Cal planning is complicated. There are many rules governing which assets a person can keep, which ones can be transferred and to whom, and how much can be transferred at one time. If done incorrectly, it could lead to a period of ineligibility or disqualification. That is why you should consult an elder law attorney if you or a family member will be applying for, or is considering applying for, Medi-Cal.
An elder law attorney can help you through the application process and design a plan for you that will preserve the maximum amount of your assets and income. Some accountants and financial planners try to provide the same services for their clients. However, they may not know the intricacies of this area of law and are not authorized to give legal advice. Also, the spouse of a Medi-Cal beneficiary is limited as to the amount of income and assets that he/she is allowed to keep. These limits are referred to as the Community Spouse's Resource Allowance (CSRA) and Minimum Monthly Maintenance Needs Allowance (MMMNA). The only way a person can increase these limits is by obtaining an order from the superior court or administrative law judge. Unlike other financial advisors, an attorney can represent you in the hearing held in the superior court or before an administrative law judge.Learn more about the realities and financial implications of long-term care.
The Realities of Long-Term Care
Paying For Long Term Care. Contact the Kisner Law Firm today and start planning for tomorrow.
The Realities of Long-Term Care
Long-term care refers to the supervision and assistance that someone with a chronic illness or disability may need for an extended period of time. A person in need of long-term care usually requires assistance with activities of daily living such as eating, bathing, dressing, taking medication, and toileting. They may also require skilled nursing care, therapy, or rehabilitation services.
Likelihood of Needing Long-Term Care
The number of people who need long-term care rises every year. This is because we are living longer and because our population of persons age 65 and older is increasing. As we age, we are more likely to suffer from a chronic illness or disability that impairs our ability to perform activities of daily living. Currently, 60 percent of all Americans over the age of 65 need long-term care - that's every 6 in 10 people. The percentage of women needing long-term care is even higher because they tend to live longer than men. 74 percent of nursing home residents age 65 and older are women.
The Cost of Long-Term Care
Long-term care is expensive. Many people have sold their homes and have spent their life savings in order to pay for long-term care. Here are some statistics on the cost of long-term care*:
- In California, the average cost of home care is more than $20,000/year.
- Nationwide, the average cost of care at a nursing home is $3,891/month or $46,692/year.
- In California, the average cost of care at a nursing home is over $50,000/year.
- The average length of stay in a nursing home ranges from 272 days to 781 days, depending on the type of nursing home one stays in. This means that you can expect to pay anywhere between $37,260 and $106,986 for your stay in a nursing home located in California.
Types of Long-Term Care Facilities
There are many types of facilities that provide long-term care. The amount or type of care that a patient receives depends on the kind of facility that he/she is staying. For example, a skilled nursing facility provides both custodial care and skilled nursing care. But, a residential care facility for the elderly provides only custodial care. Custodial care (or personal care) refers to assistance with activities of daily living such as bathing, dressing, toileting and eating. Skilled nursing care refers to care that must be given or supervised by registered nurses and rehabilitative staff such as injections, tube feeding and physical therapy.
The three main types of licensed facilities are skilled nursing facilities, intermediate care facilities and residential care facilities for the elderly. However, there are other services and/or programs to choose from, including:
- Adult Day Care
- Continuing Care Retirement Communities (CCRCs)
- Home Health Care
- Hospice Care Facilities
- Intermediate Care Facilities (ICF)
- Nursing Facilities (NF)
- Residential Care Facilities for the Elderly (RCFE)
- Respite Care Services
- Retirement Residences
- Skilled Nursing Facilities (SNF)
- Specialized Long-Term Care Facilities
New Nursing Home Admission Agreement Requirements
Effective January 2, 2006, all California nursing homes must use the new standard admission agreement established by the California Department of Health Services as a replacement for their own admission contracts. The standard admission agreement will help protect residents from the deceptive and illegal provisions contained in many nursing home admission contracts. The act establishing the standard admission agreement says it applies to all residents admitted on or after January 1, 2000. The standard admission agreement and background information about it are available on the California Advocates for Nursing Home Reform (CANHR) website at Canhr.org (external link to http://canhr.org/).
According to the CANHR website, the standard admission agreement and the new regulations will benefit residents and their representatives by:
Clearly stating that a resident's representative assumes no personal financial liability when signing the agreement on behalf of a resident.
Fairly describing the resident's and nursing home's rights and obligations;
Prohibiting nursing homes from: (1) presenting an arbitration agreement as part of the standard admission agreement; or (2) requiring residents or their representatives to sign an arbitration agreement or any other document as a condition of admission or continued stay. The top of any arbitration agreement must contain a prominent, bold-faced advisory alerting residents that they "shall not be required to sign this arbitration agreement as a condition of admission..."
All California nursing homes must use the standard agreement, including skilled nursing facilities (SNFs), intermediate care facilities (ICFs) and distinct part SNFs and ICFs.
Contact the Kisner Law Firm today and start planning for tomorrow.
*Data sources include the CDC and Calpers.
Paying for Long Term Care
Will a Bad Decision Regarding Long-Term Care Wipe Out Your Family's Estate?
Every day families are making bad decisions regarding how to pay for long-term care because they do not know about Medi-Cal. Medi-Cal is a federally funded program administered by the state of California that will pay for the long-term care of loved ones. Whether due to lack of professional representation or because they made faulty assumptions or were given wrong information, some families are losing the family home or wiping out their life savings to pay for long-term care that would have otherwise been paid by Medi-Cal.
Often, decisions about long-term care for a loved one must be made quickly. This can be a very stressful time for the family. By getting professional advice, you will avoid stress, have peace of mind and stop the discord among family members. An elder law attorney can help you make the right decisions about the care needed by your loved one and preserving the family estate at the same time.
Paying for Long-Term Care
Some people are able to pay for long-term care out of their own funds. Others are able to get long-term care insurance before they became ill. Unfortunately, the majority of people needing long-term care have already become ill and cannot obtain long-term care insurance. They also cannot afford to pay for the cost of long-term care themselves without depleting all of their life savings and other assets. A person under these circumstances is forced to look to public benefits programs, such as Medicare and Medicaid, for help.
What Is Medicare?
Medicare is a federal health insurance program primarily for Social Security recipients who are 65 years of age or older. Many people assume that Medicare will cover the cost of long-term care. However, the reality is that it will only cover the cost of some nursing home care. For example, the program will pay for skilled nursing care, but will not pay for custodial care – the kind of help that someone in need of long-term care usually requires. Also, Medicare will pay the full cost of the first 20 days you spend in a nursing home as long the only services you receive are Medicare "covered" services. After that, the Medicare recipient will need to make a co-payment of $144.50 a day. Altogether, Medicare will not pay for more than 100 days of skilled care in a nursing facility. That copayment may be covered by a patient's supplemental healthcare insurance.
What is Medi-Cal (aka Medicaid)?
Medi-Cal is a "need-based" health care payment program funded by the state and federal governments. The program is designed to pay for the medical care of those California residents who have very limited income or resources. Medi-Cal pays for the bills of most nursing home residents in California. If you have very limited resources and are over the age of 65, blind, or disabled, you may qualify for this program. However, with the help of an elder law attorney, a middle-income person may also qualify for Medi-Cal.
Who Is Eligible?
A single person is eligible for Medi-Cal if he or she has less than $2,000 in counted assets. Certain assets are exempt, such as: clothes, furniture, and one car. Most importantly, however, the person's home is exempt as long as he/she indicates on the Medi-Cal application that he/she intends to return home. Such intention can be purely subjective and will be honored even if returning home is not likely or even if it is impossible.
A married person is eligible for Medi-Cal as long as one spouse lives at home and, together, the couple has no more than $117,920 in counted assets (in 2013). The person's home is exempt and its value is not counted if he/she intends to return home or the person's spouse, minor, blind or disabled child lives in the home. The at-home spouse is referred to as the "community spouse" and he/she is allowed to have $115,920 (in 2013) in countable assets. This allowance is called the Community Spouse's Resource Allowance, or CSRA. The $117,920 figure is comprised of the $2,000 in counted assets that a single person is allowed to have, plus the additional CSRA of $115,920 that the non-institutionalized spouse is allowed to have. Sometimes the couple's circumstances require a larger CSRA and an elder law attorney can help obtain a court ordered increase in the CSRA for his/her client.
What Is "Share of Costs?"
If a Medi-Cal recipient has monthly income, he must help pay for the cost of his care. The amount contributed by the Medi-Cal recipient is called the "share of cost." How much a recipient will have to contribute depends on his/her income and marital status.
An unmarried person is allowed to keep a personal allowance of $35 from his monthly income. The person will also be able to deduct the amount of health insurance premiums paid monthly. The remainder of the person's income will be paid to the nursing facility and is referred to as the "share of cost."
A married Medi-Cal recipient is able to keep a personal allowance of $35 from the couple's combined income plus the amount of health insurance premiums that will be paid monthly. The at-home spouse of the Medi-Cal recipient, who is referred to as the "community spouse," is also allowed to keep up to $2,898 (for 2013) of his/her individual monthly income. This is called the Minimum Monthly Maintenance Needs Allowance (MMMNA). If the community spouse does not have income on his/her own that is at least equals the MMMNA, the community spouse may take all or a portion institutionalized spouse's income to make up the shortfall between the community spouse's monthly income and the MMMNA. Any remaining income must be paid to the nursing facility as the "share of cost." Like the CSRA, the couple's circumstances may require a larger MMMNA and an elder law attorney can help obtain a court ordered increase in the MMMNA for his client.
About Estate Recovery Claims
The state of California tries to recover Medi-Cal benefits paid by making claims against the estates of its Medi-Cal recipients. Therefore, if you are a Medi-Cal recipient and have assets left in your estate when you die, the state will make a claim against those assets in order to recover the benefits that you received. The only time the state cannot make a claim against your assets when you die is when you are survived by a minor, blind, or disabled child. If you are survived by a spouse, the estate recovery claim against your estate is deferred until the death of your spouse and then the claim is only against what your spouse inherits from you.
You Can Avoid Estate Recovery Claims
Estate recovery claims can be avoided by making sure that you do not have any assets left in your estate when you die. However, transferring your assets can be complicated and requires some planning. If done incorrectly, certain transfers can disqualify you or make you ineligible to receive Medi-Cal benefits and can results in tax consequences. You should consult an elder law attorney to be sure that your transfers are done properly.
About Legal Capacity
The issue of legal capacity often arises in elder law. Legal capacity is the term used to define someone who is able to understand and appreciate the consequences of his/her actions. A person who lacks legal capacity cannot, for example, enter into a contract, give a power of attorney, make a will, consent to medical treatment, or transfer property. The older we become the more likely we are to develop a mental disease or disability such as Alzheimer's disease or dementia. Because legal incapacity is always a possibility, it is never too early to prepare for it by creating a document such as a durable power of attorney with gifting authority. However, if you are the spouse or child of an already incapacitated person, you may still be able to transfer your loved one's assets by obtaining a conservatorship. A spouse also has the alternative option of filing a petition for a proceeding to authorize a transaction involving an incompetent spouse (Probate Code §3101 petition). You should consult an elder law attorney to help you with these documents and procedures in order to assure that they are done correctly.
Durable Power of Attorneys
A durable power of attorney is a written document in which a person (called the principle) appoints someone else (called the agent or attorney-in-fact) to act on his/her behalf. A non-durable power of attorney terminates when the person who created it becomes legally incapacitated. A durable power of attorney, on the other hand, continues to be valid even after the principal becomes incapacitated. If you want to prepare a power of attorney but do not want the attorney-in-fact's powers to vest until you become legally incapacitated, you can create a "springing power of attorney." A springing power of attorney becomes effective only upon the happening of an event that you have designated. No matter what type of power of attorney you create, it will terminate automatically when you die.
The best time to create a power of attorney is when you are legally competent and in good health. But if you are suffering from some health problems or starting to see the early signs of dementia or Alzheimer's disease, you should create one immediately. By creating a durable power of attorney for finances, with gifting authority, you can appoint someone else to handle your personal finances, including the authority to transfer your assets (the power to make gifts), even after you become incapacitated. This is important because if you become a Medi-Cal recipient and lose legal capacity, the person you appointed in your power of attorney would still be able to implement plans to save your home and other valuable assets for you.
A conservatorship comes into play when you or a loved one is already legally incapacitated. There is an immediate need for a conservatorship when the Medi-Cal recipient/applicant is legally incompetent, and has not created a good durable power of attorney. If you become legally incapacitated, you or a loved one can ask the probate court to appoint a conservator for your estate. A conservatorship is a legal arrangement whereby a person (called the conservator) is appointed to manage the personal or financial affairs of someone else who is incapacitated (the conservatee). As conservator of the incapacitated person's estate, you can file a substituted judgment petition asking the court to authorize you to transfer the conservatee's assets out of his/her own name for Medi-Cal planning purposes. Therefore, if you or a loved, one becomes incapacitated it is still not too late to transfer assets out of your/their name before death.
A conservatorship can be costly and the procedure can take a long time. Consult a Medi-Cal planning/estate planning attorney if you or a loved one is in need of a conservatorship.
If you are the spouse of an incapacitated Medi-Cal recipient/applicant, you may be able to file a California Probate Code § 3101 petition for a proceeding to authorize a transaction involving an incompetent spouse with the probate court and avoid a conservatorship altogether. A PC3101 petition is a means of asking the probate court to authorize the Medi-Cal recipient's/applicant's spouse to initiate a transfer, or series of transfers, of the incapacitated spouse's assets. The assets involved can be community property or the separate property of the incapacitated spouse. The petitioning spouse will have to prove that his/her spouse lacks legal capacity.
Deficit Reduction Act of 2005
How the Deficit Reduction Act of 2005 will affect you.
The following was updated on February 26, 2013. Federal legislation will have a significant effect on Medi-Cal (i.e., Medicaid) planning as described in this website, when the legislation is made effective in California.
Status of New Legislation
The United States Congress passed the Deficit Reduction Act of 2005 (S. 1932) (hereinafter the "ACT" or the "DRA") that was signed into law by President Bush on February 8, 2006.
As of September 29, 2008, the State of California passed statutes (see SB483) but not yet the necessary regulations to put any substantial part of the DRA into effect in California. Therefore, California is still following the laws and regulations that were in effect before the DRA was signed into law by President Bush and SB483 was signed by Governor Schwarzenegger. The California Department of Health Care Services has published proposed regulations for the implementation of the DRA, it is not likely that such regulations and most of the DRA will be effective in California before late 2012.
See the following article DRA is On the Way on the CANHR website for more information.
The provisions of SB 483 will not be effective until the regulations are filed with the Secretary of State of California, which may still take a while. Although proposed regulations have been published they are not yet adopted as final regulations. Such provisions will not be retroactive.
The following is a summary of the salient provisions of the DRA. Please note that any transactions made before the date of enactment would be treated under existing Medicaid law (except for Section 6014 of the ACT regarding home equity).
1. Lengthening Look-Back Period (Sec. 6011 (A))
Section 6011 (a) would make the look-back period 60 months for all transfers (outright transfers as well as transfers to and from certain Trusts).
2. Change in Beginning Date for Period of Ineligibility (Sec. 6011(B))
Section 6011(b)(2) adds a new clause in the case of a transfer of assets made on or after the date of enactment of the ACT, providing that the beginning date for the period of ineligibility is the first day of a month during or after which assets have been transferred for less than fair market value, or the date on which the individual is eligible for medical assistance under the state plan and would otherwise be receiving institutional level care based on an approved application for such care but for the application of the penalty period, whichever is later, and which does not occur during any other period of ineligibility.
Section 6011(b)(1) retains current law in the case of a transfer of assets made before the date of enactment of the ACT, such that the beginning date for the period of ineligibility is the first day of the first month during or after which assets have been transferred for less than fair market value and which does not occur in any other periods of ineligibility.
3. Disclosure and Treatment of Annuities (Sec. 6012)
Disclosure and Notice (Section 6012(a)). Section 1917 of the Social Security Act (42 U.S.C. § 1396p) is amended by re-designating subsection (e) as subsection (f) and adding a new subsection (e). For purposes of being eligible for long term care services under Medicaid, the applicant or his or her spouse must disclose any interest in an annuity (or similar financial instrument that may be specified by the secretary).
Such application or recertification form shall include a statement that the State becomes a remainder beneficiary under such annuity or similar financial instrument. Also, the state shall notify the issuer of the annuity of the right of the state to be a preferred remainder beneficiary in the annuity.
The change in the annuity rules shall apply to transactions (including the purchase of an annuity) occurring on or after the date of the enactment of the ACT (Sec. 6012(d)).
Please refer to SB483 for the new laws regarding annuities.
4. Disqualification for Long-Term Care Assistance for Individuals with Substantial Home Equity (Sec. 6014)
Section 6014 provides for a denial of benefits for an individual who has equity in a home that exceeds $500,000. It allows states to increase the $500,000 limit to an amount not greater than $750,000, which California SB483 does do. Starting December 31, 2011, such limit will be increased by changes in the consumer price index.
The change in the Medicaid eligibility rules as to Substantial Home Equity shall apply to individuals whose eligibility is based upon a Medicaid application filed on or after January 1, 2006 (Sec. 6014(b)).
Under SB483, "equity interest" means the lesser of the following:
(1) The assessed value of the principal residence determined under the most recent tax assessment, less any encumbrances of record.
(2) The appraised value of the principal residence determined by a qualified real estate appraiser who has been retained by the applicant or beneficiary, less any encumbrances of record.
Under SB483 this equity limit does not apply to an individual if any of the following circumstances exist:
(1) The spouse of the individual or the individual's child, who is under 21 years of age, or who is blind or who is disabled, as defined by federal law, is lawfully residing in the individual' s home.
(2) The individual was determined eligible for medical assistance for home and facility care based on an application filed before January 1, 2006.
(3) The Department of Health Care Services determines that ineligibility for medical assistance for home and facility care would result in demonstrated hardship on the individual. Demonstrated hardship shall include, but need not be limited to, any of the following circumstances:
(A) The individual was receiving home and facility care prior to January 1, 2006.
(B) The individual has been determined to be eligible for medical assistance for home and facility care based on an application filed on or after January 1, 2006, and before the date that regulations adopted pursuant to this section are certified with the Secretary of State.
(C) The individual purchased and received benefits under a long-term care insurance policy certified by the Department of Health Care Services' California Partnership for Long-Term Care Program.
(D) The individual's equity interest in the principal residence exceeds the equity interest limit, but would not exceed the equity interest limit if it had been increased by using the quarterly House Price Index (HPI) for California, published by the Office of Federal Housing Enterprise Oversight (OFHEO).
(E) The applicant or beneficiary has been denied a home equity loan by at least three lending institutions, or is ineligible for any one Federal Housing Administration (FHA) approved loan or reverse mortgage.
(F) The applicant or beneficiary, with good cause, is unable to provide verification of the equity value.
(G) The applicant or beneficiary meets the undue hardship criteria set by law.
5. Impose Partial Months of Ineligibility (Sec. 6016 (A))
Section 6016(a) provides that states are no longer allowed to round down the penalty period to the lowest whole number. Rather, the penalty will, in essence, be a per diem penalty. For example, if a transfer is made creating a transfer penalty period of 4.25 months, the applicant will be ineligible for 4 months and 8 days.
6. Multiple Transfers Into One Penalty Period (Sec. 6016(B))
Section 6016(b) adds a new paragraph (H) to 42 U.S.C. § 1396p(c)(1). It applies to "multiple fractional transfers of assets in more than 1 month for less than fair market value" by the community spouse or institutionalized spouse after the enactment date. The term "multiple fractional transfers" is ambiguous but presumably it applies to transfers made in successive months. For purposes of determining the period of ineligibility, Paragraph (H) gives states discretion to treat as one transfer, the total cumulative uncompensated value of all assets transferred by the individual or spouse during all months on or after the look-back date in 42 U.S.C. § 1396p(c)(1)(B). The period of ineligibility begins on the earliest date which would apply under 42 U.S.C. § 1396p(c)(1)(D).