New protections for nursing home residents

Obama-era rules designed to give nursing home residents more control of their care are gradually New-protections-for-nursing-home-residentsgoing into effect. The rules give residents more options regarding meals and visitation as well as making changes to discharge and grievance procedures.

The federal Centers for Medicare and Medicaid finalized the rules, which are the first comprehensive update to nursing home regulations since 1991, in November 2016. The first group of new rules took effect in November. The rest will be phased in over the next two years.

Here are some of the rules newly in effect:

  • No more “visiting hours.” The new rules allow residents to have visitors of the resident’s choosing at the time the resident wants, meaning that the facility cannot impose visiting hours. There are also rules about who must have immediate access to a resident, including a resident’s representative.
  • Freedom to snack. Nursing homes must make meals and snacks available when residents want to eat, not just at designated meal times.
  • Choice of roommate. Residents can choose their roommate as long as both parties agree.
  • Complain without fear. Each nursing home must designate a grievance official whose job it is to make sure grievances are properly resolved. In addition, residents must be free from the fear of discrimination for filing a grievance. The nursing home also has to put grievance decisions in writing.
  • More transfer and discharge protections. The new rules require more documentation from a resident’s physician before the nursing home can transfer or discharge a resident based on an inability to meet the resident’s needs. The nursing home also cannot discharge a patient for nonpayment if Medicaid is considering a payment claim.

CMS also enacted a rule forbidding nursing homes from entering into binding arbitration agreements with residents or their representatives before a dispute arises. However, a nursing home association sued to block the rule and a U.S. District Court granted an injunction temporarily preventing CMS from implementing it.  The Trump administration is reportedly planning to lift this ban on nursing home arbitration clauses.

In November 2017, rules regarding facility assessment, psychotropic drugs, medication review and care plans, among others, will go into effect. The final set of regulations covering infection control and ethics programs will take effect in November 2019.

If you have questions concerning nursing homes or any other matter contact one of our seasoned attorneys.

Short-term care insurance: An alternative to the long-term care variety

A little-known insurance option can be an answer for some people who might need care but are unable to buy long-term care insurance. Short-term care insurance provides coverage for nursing home or home care for one year or less.Short-term-care-insurance

As long-term care premiums rise, short-term care insurance is gaining in popularity. This type of insurance is generally cheaper than its long-term care counterpart because it covers less time. Purchasers can choose the length of coverage they want, up to one year. According to the American Association for Long-Term Care Insurance, a typical premium for a 65-year-old is $105 a month.

People who can’t qualify for long-term care insurance because of health reasons may be able to qualify for short-term care coverage. This kind of insurance doesn’t usually require a medical exam and sometimes only has a few medical questions on the application. Another benefit of short-term care insurance is that there usually is not a deductible. The policies begin paying immediately, without the waiting period usually found in long-term care policies.

Short-term care policies are not the answer for everyone, however. They may not cover all the levels of care that a long-term care policy would cover. As with any insurance product, buyers need to make sure that they understand what coverage they are purchasing. These policies are also not regulated to the same extent that long-term care insurance policies are, so there are fewer consumer protections.

Short-term care policies may be beneficial for individuals who waited too long to purchase long-term care insurance (short-term care can typically be purchased up to age 89). They can also help fill gaps in Medicare coverage or cover the deductible period before long-term care insurance begins paying. The policies may also be appealing to single women because there is no price difference for women and men, as there is for long-term care insurance.

Contact one of our seasoned attorneys to discuss your insurance or estate planning needs.

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Long-term care benefits for veterans and surviving spouses

Long-term care costs can add up quickly. But for veterans and the surviving spouses of veterans who need in-home care or are in a nursing home, help may be available. The Veterans Administration (VA) has an underused pension benefit called Aid and Attendance that provides money to those who need assistance performing everyday tasks. Even veterans whose income is above the legal limit for a VA pension may qualify for the Aid and Attendance benefit if they have large medical expenses for which they do not receive reimbursement.Long-term-care-benefits-for-veterans-and-surviving-spouses

Aid and Attendance is a pension benefit, which means it is available to veterans who served at least 90 days, with at least one day during wartime. The veteran does not have to have service-related disabilities to qualify. Veterans or surviving spouses are eligible if they require the aid of another person to perform an everyday activity, such as bathing, feeding, dressing or going to the bathroom. This includes individuals who are bedridden, blind or residing in a nursing home.

To qualify the veteran or spouse must have less than $80,000 in assets, excluding a home and vehicle. In addition, the veteran’s income must be less than the Maximum Annual Pension Rate (MAPR). Following are the MAPRs for 2017:

  • Single veteran: $21,531
  • Veteran with one dependent: $25,525
  • Single surviving spouse: $13,836
  • Surviving spouse with one dependent: $16,506

Income does not include welfare benefits or Supplemental Security Income. Moreover, income may be reduced by subtracting unreimbursed medical expenses actually paid by the veteran or a member of his or her family. This can include Medicare, Medigap, and long-term care insurance premiums; over-the-counter medications taken at a doctor’s recommendation; expenses such as nursing home fees; the cost of an in-home attendant who provides some medical or nursing services; and the cost of an assisted living facility. These expenses must be unreimbursed (in other words, insurance must not pay the expenses). They should also be recurring, meaning that they should recur every month.

How it works. The amount of Aid and Attendance benefit a person receives depends on his or her income. The VA pays the difference between the veteran’s income and the MAPR. For example, assume that John, a single veteran, has income from Social Security of $16,500 a year and a pension of $12,000 a year, so his total income is $28,500 a year. He pays $20,000 a year for home health care, $1,122 a year for Medicare, and $1,788 a year for supplemental insurance, so his total medical expenses are $22,910. If you subtract his medical expenses from his income ($28,500 – $22,910), John’s countable income is $5,590. That means he could qualify for $15,941 ($21,531 – $5,590) in Aid and Attendance benefits.

To apply, contact a VA office near you.

Hospitals now must provide notice about observation status

Hospitals-now-must-provide-notice-about-observation-statusAll hospitals must now give Medicare recipients notice when they are in the hospital under “observation.” The notice requirement is part of a law enacted in 2015 that just took effect.

Signed by President Barack Obama in August 2015, the law was intended to prevent surprises after a Medicare beneficiary spends days in a hospital under “observation” and is then admitted to a nursing home. This is important because Medicare covers nursing home stays entirely for the first 20 days, but only if the patient was first admitted to a hospital as an inpatient for at least three days.

Many beneficiaries are being transferred to nursing homes only to find that because they were only under observation and were therefore hospital outpatients all along, they must pick up the tab for the subsequent nursing home stay — Medicare will pay none of it.

The law, the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act, does not eliminate the practice of placing patients under observation for extended periods, but it does require hospitals to notify patients under observation for more than 24 hours of their outpatient status within 36 hours, or upon discharge if that occurs sooner. The Act required hospitals to begin giving patients this notice as of March 8, 2017. Some states, including California and New York, already require such notice.

To avoid violating the law, hospitals that accept Medicare patients will now have to explain to patients under observation that because they are receiving outpatient, not inpatient, care, their hospital stay will not count toward the three-day inpatient stay requirement and that they will be subject to Medicare’s outpatient (Part B) cost-sharing requirements for hospital stays.

The law does not make hospital observation stays count towards Medicare’s three-day requirement, as some in Congress have called for doing.

Contact one of our seasoned attorneys to discuss your estate planning needs.

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Estate planning options for blended families

Estate-planning-options-for-blended-familiesThe dynamics of a blended family, defined as one where at least one spouse has at least one child from a prior marriage or relationship, can complicate financial and estate planning because no off-the-shelf plans apply.

It’s important to contact your estate-planning lawyer to ensure complete review of all personal and economic aspects of your family and a resulting plan that works for everyone involved.

From designating account beneficiaries to updating wills and trusts, it takes attention to detail to ensure specific wishes are carried out properly. Effective, collaborative planning can address the family’s needs and goals while building trust and helping everyone move forward together.

A good place to start is with reviewing and updating beneficiary designations for life-insurance policies and retirement accounts. That’s a simple way to ensure that the proper beneficiaries are noted on all accounts and the proceeds from those accounts end up going to the correct individuals.

While any estate planning must be done on a case-by-case basis, the following are options to consider for blended families:

Reciprocal wills

Some blended families use reciprocal wills, where the assets pass outright to the surviving spouse, as their primary estate plan. They do this for the sake of simplicity and to keep their estate planning costs at a minimum. But this type of plan comes with some serious disadvantages. One issue is that it does not provide a great deal of comfort when there are children from a prior marriage, because the first spouse to die has no guarantee that the surviving spouse will provide for his or her children when the surviving spouse ultimately dies.

There are several ways the surviving spouse can defeat the intent of the deceased spouse even without changing his or her will, including making gifts of assets during his or her lifetime, changing beneficiary designations, and re-titling assets as joint with a right of survivor-ship with his or her own children or even a new spouse, potentially leaving nothing to pass under his or her reciprocal will.

Another major disadvantage of a reciprocal will is that it is revocable. That means the surviving spouse can change it to favor his or her own children, charities or a new spouse. The surviving spouse also could deplete the estate by overspending and incurring debt, leaving nothing for the children of the deceased spouse.

Non-reciprocal wills

An option that does not require reliance on and trust in the surviving spouse is to have each spouse create a non-reciprocal will, or wills that are not exactly the same and don’t leave the estate outright to the surviving spouse. Under this approach, each spouse could leave a percentage or dollar amount to the surviving spouse and a percentage or dollar amount to be divided equally between his or her own children, but not the children of the other spouse.

It can be difficult to determine at the time the will is made the amount needed to provide for the spouse and an appropriate amount to go to the children, so this type of estate plan likely requires monitoring and updating over time.

Life insurance

A third alternative is to purchase life insurance to provide for the surviving spouse or the children of the first spouse to die. The advantage with using life insurance is that it guarantees, as long as the policy is active, that the children will receive something upon the death of their parent. Life insurance policies tend to become increasingly expensive as you grow older, however.

Life insurance provided by an employer can be used, but there are limits to the amount an employer provides. Also, coverage usually terminates when employment ends and may become unavailable if an employer files for bankruptcy. Therefore, relying solely upon employer-provided life insurance may not be the best alternative.

Testamentary trusts

Creating a testamentary trust that becomes irrevocable upon the death of the first spouse meets the dual goals of providing for the surviving spouse during his or her remaining lifetime and then, upon the death of the surviving spouse, passing the remaining assets to the children of the first spouse to die.

Under this approach, a trustee will have to be appointed. Common options include the surviving spouse, a child of the first spouse to die, a third party or a trust company. Appointing the surviving spouse or a child of the deceased spouse has a greater risk of creating family friction, and therefore a third party or a trust company might be more appropriate.

Whichever option you chose, any estate plan should remain dynamic and adapt to change when necessary, particularly given the added complexities of a blended family. Contact one of our seasoned attorneys to discuss your estate planning needs.

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How to change an irrevocable trust

When dealing with irrevocable trusts the ability to effect change can be difficult to understand, How-to-change-an-irrevocable-trustpresenting more questions than answers. The correct answers often depend on a variety of factors, but a good starting point is state law and the trust document itself.  When modification or termination of an irrevocable trust is sought, a possible mechanism is for the trustee or beneficiary to seek a court order.

When it comes to interpreting language in an irrevocable trust, appointing a trustee or providing directives to a trustee, a non-judicial settlement agreement may be an alternative to filing a court proceeding. In some states, trustees, heirs, spouses and beneficiaries are among those permitted to enter into a binding non-judicial settlement agreement, so long as the terms do not violate a material purpose of the trust, the terms and conditions could otherwise be properly approved by the court, and any modifications sought are not already provided for in the trust.

Even if the trust is irrevocable, it may still be possible to carry out a change in who receives estate assets upon the death of the trust creator through exercising a power of appointment. A power of appointment is created when one person grants another the authority to dispose of property by designating a recipient of that property.

It is not unusual for the creator of a trust to have assigned the surviving spouse or trustee a power of appointment. If this power was granted, and the requested modifications of the trust involve disposing of property or changing a designated beneficiary, exercising a power of appointment could be a means to that end.

Some states also allow trust “decanting” as another means for modifying irrevocable trusts.  A trust decanting involves a trustee’s exercise of discretion to distribute trust assets to another trust with dissimilar terms.  The ability to decant irrevocable trusts depends on state law and varies from state to state.

For help with concerns involving irrevocable trusts, you should meet with an estate planning attorney to assist you with analyzing your trust instrument and to discuss the modifications being contemplated, the applicable law and the best course of action.

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Issues to consider before gifting your home to your child

Gifting your house to your children before your death offers several advantages, however there are issue to avoid.Issues-to-consider-before-giftin-your-home-to-your-child

Shall your children inherit the property through your estate, the cost basis on the property will be the value of the home on the day of your death. However, if you gift the children the property while you are still alive, they will inherit your cost basis, including potentially large capital gains if they decide to sell the home at a later date.

You should still consider removing the property from your estate to help you better qualify for assistance with long-term-care costs. However, be aware that you are subject to a five-year look-back on assets. That means that when you apply for Medicaid, gifts or transfers of assets you make within five years of the date of the application for assistance may be subject to inclusion in your estate.

If you want to keep living on the property but hand ownership over to your children for estate-planning purposes, consider that your child will technically be your landlord. We advise our clients to make it clear up front who will be responsible for utilities, maintenance and any associated costs, and any desired renovations or updates along the way. It’s best practice for you to put these intentions in writing from the start.

Parents who want to stay in their house but no longer include any appreciated value on the home in their estate might want to consider a qualified personal residence trust, or QPRT. This instrument allows the gifting process to begin while you retain control of the house and still live in it. In most cases you would retain the right to live in the house rent-free for a specified period of years (10 is common), after which point the remainder beneficiaries of the trust become fully vested in their interest in the primary residence.

Be aware that an existing mortgage on the property can be problematic. Some mortgage lenders will call in their loans when the property are transferred to others, meaning your child could have to take out a mortgage with an interest rate and other costs that are higher than what you’ve been paying. If your child is allowed to assume your mortgage, he or she needs to be clear on all terms and future costs.

Contact one of our seasoned attorneys to discuss your estate planning needs.

 

The Hazards of DIY Estate Planning

Across the Internet, there are legal websites that seem to offer handy, DIY-style forms and guides at rock-bottom prices. However, like the Internet itself, things aren’t always what they seem. Sometimes, people find they get exactly what they pay for, or much less. The-Hazards-of-DIY-Estate-Planning

Take, for instance, the poor man who downloaded an online will and ended up leaving $200,000 to a person called “Insert Name Here.” Or even the lawyer who completed a will he’d downloaded from the web. He was so pleased with the result that he posted it on a website, then asked estate planning attorneys to review his fine work. It turned out that the will was fundamentally flawed. Just a few of the errors: First, he was remarried, with a child from both his first and second marriages, but the will left everything outright to his second wife—so she could disinherit the child of his first marriage. Next, if he had any additional children, they wouldn’t be covered. And procedurally, it didn’t have a “self-proving affidavit.” That meant that, after his death, the will’s witnesses would have to be found and testify in court as to its validity.

It’s not just the outright errors that are a source of concern over the DIY approach. Regular fluctuation in the laws affect estate planning. One small change can have enormous consequences. (For example, as U.S. News & World Report explained, for one year, and one year only, estates in excess of $3.5 million were exempt from estate tax.) Estate planning professionals spend their careers making sure that clients’ estate plans track with current law. DYI websites are unlikely to keep up with the changes.

Perhaps motivated by concerns such as these, in June, New Jersey’s Supreme Court in cracked down on legal advice websites in June. The Court ruled that these sites would have to change their business practices and register with the state bar. Whatever the outcome of that decision, it’s only created further uncertainty for the DIY legal market.

Estate planning may seem complicated, but—with the right counsel at your side—it doesn’t have to be. And, as these examples show, an experienced attorney can save you far more in the long run, then a cut-rate will from a website.

For questions about how to best secure your legacy, contact our seasoned attorneys today.

Possible pitfalls in naming a minor as your beneficiary

A minor generally doesn’t have the right to manage his or her assets, including any inheritance.

Possible-pitfalls-of-naming-a-minor-as-your-beneficiary

But sometimes a minor child becomes the beneficiary of a sizable family inheritance. That can occur because a parent dies without a will or trust, leading to an unavoidable direct inheritance by the child.

If a minor is chosen as a beneficiary of a retirement account or life insurance policy, many challenging issues can arise.

First of all, a minor is not legally allowed to take control of inherited assets left directly to him or her. Instead, an adult or financial institution has to be appointed to manage the estate until the minor turns 18.

In essence, that means the estate must be overseen by the probate court, a time-intensive and costly endeavor, which also requires an attorney to file annual accountings for the guardian or conservator.  The court then evaluates all expenses and investments to be sure the assets are managed properly.

Most spending from the minor’s assets must be authorized by the court. It’s challenging to get such approval, too, because the court typically aims to protect the minor’s assets until he or she reaches age 18.

Meanwhile, any fees to administer the estate also reduce the value of the minor’s inheritance over time, as that is the source from which the fees are typically paid.

Finally, at age 18 all estate assets will be distributed directly to the minor, a result that many families may not like. Contact one of our seasoned attorneys to discuss your estate planning needs.

 

What a TV Dad’s Estate Teaches Us About Careful Planning

A-TV-Dad-Lesson-in-Estate-PlanningThere’s a simmering legal battle over the estate of TV dad Alan Thicke, and there are some lessons in the story–even if you’re immune to Hollywood gossip.

Two of Thicke’s sons, Brennan and (pop star) Robin, are trustees of Thicke’s estate, and they have asked the court for help in managing the estate. They allege that Thicke’s third wife, Tanya Callau, is trying to get more of Thicke’s estate than she’s entitled to.

What’s unusual is that Thicke apparently took steps to make sure this kind of thing wouldn’t happen. The actor periodically updated his trust, most recently in February 2016, just a few months before his death.

According to The Hollywood Reporter:

In the trust, Thicke left each of his three children equal shares of a Carpinteria ranch, 75 percent of his personal effects and 60 percent of his remaining estate, according to the petition. He left Callau the ranch’s furnishings, 25 percent of his personal effects, a $500,000 life insurance policy, all of his death benefits from pensions and union memberships and 40 percent of his remaining estate. He also provided that she could live at the ranch, as long as she paid for its expenses and maintained the property.

However, Callau is now challenging the trust documents and a related pre-nuptial agreement.

At issue before the court: What specific property and assets were Thicke’s, prior to their marriage, thus are “separate property”–Thicke’s alone? And which are “community property” that Callau would automatically share ownership in?

As complicated as the litigation may be, Thicke’s existing documents and specific instructions likely means that it will be Callau’s burden to prove why Thicke’s wishes should not be followed. Without those updated documents, Thicke’s sons would bear more of the burden.

The Thicke family dispute is a reminder for all of us, that, as Americans are living longer, we’re more likely to have divorces, other relationships and, with them, children from more than one partner. The very notion of family is getting more complicated. That means estate planning is more complicated, too. And increasingly important.

Clear and concise directions for distributing your estate are essential, to protect your heirs from protracted messy litigation. Contact one of our seasoned attorneys to discuss your estate planning needs.