New York Elder Law Attorney Blog

by Michael Ettinger, Esq.

I am unsure how many of you have run into this scam. I have seen it off and on for the last few years and think all should know about it. These companies that flog Medicaid annuities have a deal going with assisted living facilities that essentially says this. We will advertise and promote VA benefits to seniors. When they call us we will refer them to your facility provided you recommend our services, for people who come to you, in assisting them in the VA application (free of charge) and for financial planning. The company is actually in the business of selling Medicaid annuities and they give out Medicaid advice consistent only with the one product they have to sell.

Here is what happened in an actual case in my office recently. Client was told by the assisted living facility to contact the VA assistance company to help "expedite" the process. Company told the client it would take three months to get benefits. It is now nine months and nothing has been received by the family. Client was also told that they did not have to do anything now to protect assets because they could purchase a Medicaid annuity if and when she had to go into a nursing home. Turns out that client has rallied nicely and will be staying in assisted living for the foreseeable future. Family is now setting up a Medicaid Asset Protection Trust (MAPT) but nine months later than they should have but for the poor advice received by the annuity floggers. But also consider this: had the client needed nursing home care, it turned out that the HCFA life expectancy was only 5.5 years which the client, in this case, might have well outlived. The client was never told about the requirement that the annuity be actuarially sound (i.e. all the money had to be paid back to her within the 5.5 years) and what that meant or what the alternatives were. Client, in this latter case, would have been better off with a gift and loan strategy.

The client will be meeting with the assisted living facility next week and sharing this information with them but the lesson for all should be that a New York Elder Law attorney should be consulted when disability occurs or is threatened in order to get all of the options on the table.

By Michael Ettinger, Esq.

A power of attorney will assist you in the event of possible physical incapacitation.
This means someone else can handle your legal and financial affairs that might require your physical presence, such as a real estate closing or refinancing. Later in life, it is imperative that you have your own plan for disability because

You get to choose the people you want to make decisions for you, be it family or friends, and

Your own power of attorney legal document affords them many more options than a legal guardian would have under the law to protect assets. For example, they can move much more in assets more quickly which, in a "move it or lose it" environment is crucial. Nursing homes in New York cost an average of $10,000 a month so the sooner you act, the more of your assets you are able to keep.

A legal guardian has to get a Judge's permission to move or protect assets which can take many months, not only possibly costing tens of thousands in nursing home costs, but potentially the same amount in legal fees to prosecute the matter. Worse yet, after all the time, expense and effort, a Judge may not act in your best interest because sometimes the Judge has a different view of the matter politically or considers the State's interests ahead of those of your family. If you have a power of attorney in the event of disability, the people you have chosen will do what's best for you.

In New York, a Judge has the authority to cancel a power attorney and substitute someone else of the Judge's choosing as your legal guardian. By creating a trust, however, you can completely protect against this. If you have a trust set up, where you name a back-up trustee or trustees, this defeats a guardianship proceeding for the trust assets. The Judge has no authority over the trust, so you are guaranteed to get the persons you choose. If you are unable at present to decide upon specific persons to act as your "power of attorney," you may ask your elder law attorney to perform trustee duties.

Get the person(s) you choose to make difficult financial and legal decisions for you in the event of disability. This often makes the difference between keeping your home and life savings and losing them. A New York elder law attorney can assist in the proper drafting and execution of a power of attorney.