New York Elder Law Attorney Blog

Making the decision to place a loved one in a nursing home is no routine matter. Emotions run deep during this time, when families struggle to balance the senior's need for close care and safety with their concerns about the quality of life available in these assisted-living facilities. Our New York elder law estate planning attorneys have helped many families with this process. We appreciate that there are usually two big questions that come up: (1) What is the best facility for our loved one? and (2) How are we going to pay for it?

In answering the latter question, New York elder law attorneys will explain that the costs can either be paid out of pocket, via use of private long-term care insurance, or through the New York Medicaid system. The former question is a bit more challenging, because so much subjectivity is involved. The answer for each family is different. The exact type of care needed, proximity to loved ones, and similar details need to be considered when choosing which nursing home is best. Of course, as a general matter, every family will want to ensure that the nursing home they chose is one free of chronic neglect, mistreatment, and abuse. Many elder care advocates have explained that when it comes to safety measures, study after study has found that nonprofit nursing homes outperform for-profit facilities. One long-term care doctor explained, "Most studies show that nonprofits do a better job of caring for patients, but we're not sure why that happens." This is an important consideration for families deciding where to send their loved one.

A post this week in the New Old Age blog from the New York Times recently discussed another interesting comparison between for-profit and nonprofit homes: the employees are happiest at nonprofit nursing homes. This may be part of the reason why care at these facilities is superior. At the end of the day, the quality of life for those in these facilities is dependent on the work performed by the hands-on caregivers. Therefore, how those caregivers perceive their job is likely to play a key role in their day-to-day actions. The nonprofit employees were happier overall for a variety of reasons: their ability to help set policy, more supportive managers, and availability of adequate resources.

One corollary is that staff turnover at nonprofit homes is much lower than at for-profit facilities. It is not hard to see how consistency in the workforce helps breed experience and better overall care. Long serving nurses and nurse's assistants can gain familiarity with each resident and are better able to understand their quirks, notice problems, and respond quickly to their needs.

See Our Related Blog Posts:

Tips for Choosing the Best Elder Care for Loved Ones

Nonprofit Innovators Try to Shift Senior Care Away from Nursing Homes

Demand for retirement communities, assisted-living facilities, and nursing homes is likely to balloon in the next two decades. During that time the number of Americans over the age of 65 is expected to double. Current projections predict that there will be more than 71 million seniors nationwide by 2030. Through work with local community members our New York elder law attorneys know that every day thousands and thousands more seniors are taking steps to plan for their long-term future. A key consideration in that elder care planning includes figuring out where one might want to live down the road.

However, many might be surprised to learn that New York currently has the fewest number of housing units geared toward seniors relative to our total number of households. The National Investment Center for the Seniors Housing and Care Industry reports that when compared to all other metro markets in the country New York continues to struggle the most in providing senior housing to keep pace with the aging demographics.

On Tuesday the New York Times reported on a few area development teams that are now trying to fill that void. When the housing market collapsed, the construction of new projects geared toward seniors ground to a halt. The largest companies in the industry were hardest hit by the recession leading one industry analyst to explain that things were "pretty much at an all-time low. There's not much coming in the pipeline at all." However, the smaller regional operations that have survived have a bit brighter outlook with one developer noting, "it's a great time to develop senior housing...it's an opportunity and there isn't a lot of competition."

Fortunately, lenders are slowly loosening up their restrictions and allowing developers to get back to work on assisted-living properties. For example, a $35 million Long Island property just opened in March to overwhelming demand. A $150 million 404-unit retirement community in East Meadow has already sold virtually all its units even though it will not open for months.

While the new construction is encouraging, the uptick is happening slowly. There will be no stopping the tidal wave of seniors in the coming years who will want these housing options, and it is unlikely that the current building will be enough to meet that demand. That disconnect will likely increase the importance for area seniors to create a New York elder care plan ahead of time. Our local elder law estate planning lawyers encourage residents to practice prudence in these uncertain times and ensure that housing options will be available to them if they need it.

See Our Related Blog Posts:

Tips for Choosing the Best Elder Care for Loved Ones

Nonprofit Innovators Try to Shift Senior Care Away from Nursing Homes

Virtually all aging residents strive to create arrangements that will allow them to live at home and participate in their usual activities for as long as possible no matter what their specific healthcare needs. The ability to achieve this goal often hinges on the amount of planning that the individual has done beforehand to have the assets available to pay for the care. As we have frequently mentioned, long-term care insurance is one of the best ways of procuring this reality.

In addition, many area seniors are able to stay at home because they receive the assistance of family members. Tasks like house cleaning, grocery shopping, laundry, driving to doctor's appointments, and similar aid is commonly provided by children and other relatives. This aid is frequently given ad hoc, without any formal arrangement between the senior and their loved one. Yet, for many local families it may be beneficial to create a specific New York caregiver agreement to provide legal protections to the relationship.

Reuters published a story this week on the increasing popularity and usefulness of these formal legal relationships between parents and family caretakers. The arrangement is mutually beneficial. For the younger caregiver, the contract allows them to provide assistance to their loved one in situations where they otherwise might not be able to afford it. Additionally, the senior may use the personal service contract to protect their assets. For example, if at-home care is initially provided without payment then the senior may ultimately lose assets to pay for eventual nursing home care. But if the senior pays their loved one a reasonable sum for caretaking duties, then the assets would not complicate the senior's ability to qualify for Medicaid if a nursing home stay is eventually needed down the road.

Of course it is important for families to use the agreements properly. The care-giving relative must ensure that the taxes are paid on the money received, that the charges are reasonable for the services provided, and that documentation is proper.

Continue reading "Hire Your Children For Caretaking Duties" »

Unfortunately current economic hardships may exist more acutely for the LGBT elder community because of a lifetime of federal law discrimination that has affected their financial security and health care options. Of all the so-called financial safety nets, including Social Security and retiree health insurance benefits, the harshest effects on aging LGBT Boomers is Medicaid. To be eligible in New York for state nursing home assistance, certain asset and income level requirements exist whereby qualified applicants must be deemed impoverished.

New York State Medicaid allows the spouse of a person receiving Medicaid - "the community spouse" - to keep certain assets including the family home to protect against total impoverishment. Because marriage rights are not granted to same sex couples in New York, they cannot take advantage of this provision.

On the other side of the coin, the inability of same sex couples to marry in New York offers a distinct Medicaid planning advantage in later years. If you are in a same sex partnership and wish to plan ahead five years to protect your jointly owned home and life savings from nursing home costs, and cannot obtain long-term care insurance for any reason, you may both establish a Medicaid Asset Protection Trust for one other. Legally married couples may not name each other as the trustee in a MAPT. Same sex partners, however, are able to name one another as each other's trustee and therefore do not have to go outside of the relationship to put someone else in charge in order to protect assets. A New York elder law attorney who has familiarity with the underserved legal needs of the LGBT community can best advise whether or not a MAPT is a viable financial solution in a given situation.

by A.K. Lehmann, ABA Paralegal
Lehmann & Lehmann Legal Communications

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.

Medicaid Supervisor for Ettinger Law Firm, Elizabeth Schalk, has been reviewing Medicaid applications for over fifteen years. Having worked in this capacity for a nursing home and an elder law estate planning law firm, Schalk has gained valuable insight and experience from counseling New York State residents in various counties about receiving Medicaid assistance.

"The most frequent thing I see is when someone's mom or dad is sick and s/he knows it will be a short time before his/her parent will have to go into a nursing home. All of a sudden, money gets transferred out of the sick parent's resources. The thinking behind this is that that this will make his or her parent eligible for Medicaid to pay for nursing home costs. Nothing can be further from the truth. In fact, these kinds of "gifts" can cause a delay in Medicaid benefits."

When a person transfers assets and then receives or applies for Medicaid-covered nursing home services, the local New York Department of Social Services ''looks back'' at financial transactions made within 60 months or five years from the first date on which the person was subsequently institutionalized and applied for Medicaid coverage.

A person in a nursing home or receiving equivalent services in a hospital is made ineligible for Medicaid coverage for a period of time after a gift or transfer of resources by the person or his or her spouse.

The person is ineligible for a period equal to the value of the resource divided by the average cost of nursing facility services to a private patient in the community.

The penalty period is based on the total amount of transfers and/or gifts divided by the New York State Regional rate set for each county by the NYS Department of Health in January of each year. The length of the ineligibility period is calculated by dividing the total, cumulative, uncompensated value of the transferred assets by the average monthly cost to a private pay patient of nursing home care in the applicant's geographic area as of the date of the application for Medicaid.

In New York City the average cost for nursing facility services for 2011 is presumed to be $10,579.00 per month. In Dutchess, Orange, Putnam, Rockland and Westchester counties it is $10,105.00. In Albany and surrounding counties it is $8,323.00.

If gifts are made into a special needs trust, an applicant may be exempt from the five year look back period penalty. Or, if gifts are a normal gifting pattern such as the same gifts each year for Christmas and written verification can be provided prior to the look-back period, these kinds of gifts often cannot be counted as a transfer for Medicaid purposes.

Before gifting or transferring money out of an estate, and especially if a nursing home is imminent, consulting an experienced New York elder law attorney with an on-staff Medicaid supervisor may assist in avoiding unnecessary delays in receiving state assistance.

written by A.K. Lehmann, ABA Paralegal

Each county in New York State demands a unique set of paperwork when applying for Medicaid assistance to pay for nursing home care. While this is subject to change in April when the New York State Department of Health will institute statewide uniformity application rules, right now the rigid documentation requirements by individual county can often slow down the process - even when a family member may need immediate transfer into a residential health care facility. In order to prevent any delay, it is absolutely necessary to gather all relevant documentation before the application is actually submitted. (See below document list.)

No matter what New York State county you or your family member lives in, Medicaid requires documentation from five years ago. Be prepared to gather, research and request paperwork dating back to 2006. There are absolutely no exceptions. An application will be denied without all of the requested paperwork. Often applicants request that a Medicaid application be incompletely submitted, hoping that the documents that they provided will be enough.

"There is no 'let's make a deal' with a county's Department of Social Services. Even if clients have submitted two or three years' worth of paperwork, but omit one year, I still have to explain them that without all of the necessary documentation, their Medicaid application will be denied," says Elizabeth Schalk, Ettinger Law Firm's experienced Medicaid supervisor.

As New York elder law attorneys with offices in over eleven counties, Ettinger Law Firm is familiar with many application requirements of statewide Department of Social Services offices. Schalk is well-apprised of how county application processes differ and what is required in order to improve the likelihood of a speedy process of individual Medicaid applications.

Please see this general list of documentation that may be required for your New York State County's Department of Social Services when applying for Medicaid for nursing home care:

1.Original birth certificate, passport or Social Security confirmation.
2.A copy of naturalization papers if applicant was not born a U.S. Citizen.
3.A Social Security Card.
4.A copy of Medicare and secondary health insurance cards.
5.Verification of all life insurance policies and their face and cash values.
6.If a spouse is deceased, a copy of his/her death certificate.
7.If the applicant is married, a copy of the marriage license.
8.If the applicant is divorced, a copy of the divorce decree.
9.A copy of all burial plans and prepaid funeral arrangements.
10.Verification of Social Security benefits received
11.If the applicant still owns a home, a copy of the deed.
12.If the home has been sold on or after January 1, 2006, verification that the home
as sold at fair market value, with a statement from a real estate agent.
13.Financial statements for all investment accounts in the applicant's name from January 2006 until the present, including all those closed or transferred.
14.All pages from bank statements from January 2006 until the present, along with a verification of Origin of Deposit (where the money came from) for any transaction of $1,000 or more and any withdrawals for any transaction of $1,000 or more. Verification of the gross amount of a pension received (such as a current award notice or check or statement from the source or a payor)
15.Federal income tax returns for the year 2006 through the present, including copies of all schedules and attachments. If a return hasn't been filed for any of those years, a NO FILE letter must be provided from the IRS.

When applying for Medicaid benefits, the help of an experienced New York elder law attorney is invaluable.

This post was written by A.K. Lehmann of Lehmann & Lehmann Legal Communications

Alzheimer's Disease International (ADI), a federation of 73 national Alzheimer's organizations, recently released a report on the economic impact of the disease. In the U.S., there are as many as 5.3 million Americans living with Alzheimer's and every 70 seconds someone in America develops the incurable illness. In 2010, there will be a half million new cases of Alzheimer's. Unfortunately, it looks like the disease is growing exponentially. In 2050, ADI predicts nearly a million new cases every year.

In 2006, Alzheimer's was the seventh leading cause of death in the country. While death rates are thankfully decreasing for heart disease, prostate and breast cancer, Alzheimer's deaths rose 46.1 percent from 2000-2006.

This disease is reaching epidemic proportions and has become a national crisis. Like all terrible illnesses, it discriminates against no one. Long term health costs continue to escalate. Caring for those affected with Alzheimer's and other dementias cost U.S. society a total of $172 billion, including $122 billion in costs to Medicare and Medicaid.

This tremendous strain on the already overburdened state and federal health care costs will only get worse if the U.S. government does not start to invest in substantial research for its cure. Certain evidence-based prevention strategies should be further developed immediately.

Alzheimer's Association is currently working to enact legislation, the "National Alzheimer's Project Office" (S. 3036/H.R. 4689), that will outline a national plan to overcome the Alzheimer's crisis. It will include strategic planning and coordination for the fight against the disease including initiatives for research, care and support.

"We need all Americans concerned about Alzheimer's disease to tell their representatives in Congress and the President to pass the Act [...]," said Robert Egge, Vice President of Public Policy for the Alzheimer's Association.

Families and friends are encouraged to contact their state senators and representatives to show their support for the "National Alzheimer's Project Office" bill (S. 3036/H.R. 4689).
A consultation with a New York elder law attorney is essential to know your rights and to avoid impoverishment if you or a loved one must care for someone suffering from Alzheimer's disease.

The information for this blog post was provided by the Alzheimer's Association. For further information, please visit The World Alzheimer Report 2010.

by Bonnie Kraham, Esq.

Most of us don't want to end our days in a nursing home, and would rather "age in place," so it's important to become familiar with available home health care services.

There are three major ways to pay for home health care: self-pay, long-term care insurance, or Medicaid, which is government provided health insurance for those whose assets have been depleted. Medicare, which is government provided health insurance for the elderly, only has limited community home health care. A New York elder law attorney can help to decide which one is the best option.

In general, "community" Medicaid programs, for home care, do not have a "look-back period," that is, Medicaid does not "look back" to see if any transfers (gifts) were made which would make the person ineligible for a certain period of time. Therefore, assets can usually be transferred before applying for community Medicaid without penalty, unlike the rules for "nursing home" Medicaid.

If you meet the asset and income rules, following is a list of some of the home health care services covered by Medicaid:

Personal Care Aide Program. Agencies, paid by Medicaid, employ aides who give custodial level services based on the Activities of Daily Living (ADL's) - feeding, toileting, grooming, bathing, ambulating and transferring. A patient must need help with at least two ADL's.

Consumer-Directed Program. The services are the same as above but the patient, or adult family member, selects the aides, rather than going through an agency. The home attendant cannot be an immediate family member.

Certified Home Health Aide Services. This program usually covers the cost for 45 days after hospitalization. The aide performs health care under the supervision of a registered nurse or licensed therapist. The covered activities include the ADL's and possibly skilled services such as special meals, and tube feedings if the patient is self-directing.

Lombardi Program. Also referred to as the "nursing home without walls," this is the long-term home health care program, the equivalent of a nursing home level of care. The cost for the care cannot exceed 75% of nursing home costs. Availability is limited. The Lombardi program and other similar programs have a five-year look-back period for any asset transfers which would create a "penalty period," or period of ineligibility for Medicaid.

To find other home health care services, contact your county's Office for the Aging for a list of local providers. Orange County (845-615-3700) or Sullivan County (845-807-0241) and Ulster County (845-340-3456)

by Bonnie Kraham, Esq.

Family members overwhelmingly provide the care for elderly and disabled loved ones at home. Although a labor of love, taking care of ailing loved ones also has a market value, meaning that caretakers can be paid as a way to protect assets.

Through the use of a Caregivers Agreement, also known as a Personal Services Contract, the disabled or elderly person can transfer money to family members as compensation rather than as a gift. Gifts to family members made in the last five years before applying for Medicaid to pay for nursing home costs disqualify the applicant from receiving Medicaid for a certain period of time, known as a "penalty period."

For example, Mom depends on daughter Janice for her care. If Mom gifts $100,000 to Janice, then goes into a nursing home in the next five years, and applies for Medicaid, the gift to Janice will result in about a nine month penalty period. Janice will have to give the $100,000 back to Mom to pay nursing home costs during the penalty period, or Mom will have to use other resources to pay.

Instead, using a Caregivers Agreement, Mom pays Janice $2,500 per month for caregiving services. If Mom moves to the nursing home in the next five years, the payments to Janice are compensation, not gifts.

Caregivers Agreements must follow strict rules, so should be drafted by an experienced New York elder law attorney.

The Caregivers Agreement must detail the services to be performed and the obligations of the parties. The payment is based on the going rate of caretaking in that county. Compensation is clearly delineated with hourly and yearly calculations for 24-hour personal care.

Janice must actually give the care and document her caretaking duties. Mom must actually need the care, which should be documented with a doctor's note.

To protect family relationships, it's recommended that all family members agree with the arrangement even if they are not parties to the agreement.

Janice has tax consequences. She reports the payments as ordinary income on her income tax return and pays income taxes on the compensation. In some cases, Mom may be able to deduct the payments as a medical expense.

A proper Caregivers Agreement arrangement can be a valuable elder law planning tool in the right circumstances.

by Michael Ettinger, Esq.

Long-term care insurance (LTCI) and the Medicaid Asset Protection Trust (MAPT) are often thought of an alternatives to each other. They are not. While LTCI is both a shield and a sword, the MAPT is a shield only.

LTCI protects your assets and income from the costs of care. But it has a positive effect (the sword) in that it actually pays for someone to come into your home and care for you there. The MAPT protects assets, like your home and your life savings, but it does not protect your income (pensions, social security, interest, dividends, etc.). The MAPT has no positive effect in terms of providing care. It is solely a defensive tactic. That being said, in the event LTCI is unavailable to the client for medical or financial reasons, the MAPT is a wonderful tool. And there is truth in the saying that a good defense is the best offense. With the MAPT in place five years ahead of time, the client's assets are protected and Medicaid will pay for the cost of care, over and above what your income provides. If you have a spouse at home, they may keep about $3,000 per month of the couple's combined income and sometimes more.

Our stated preference for clients is LTCI, if available. Most clients would prefer to "age in place" or, in other words, stay in their own home and receive home care if needed. Here, the LTCI stretches your dollars, to allow you to remain in the home for years more than you might have been able to afford otherwise. If your spouse is unable to care for themselves, it allows you to call in extra help so that you do not wear yourself out acting as a caregiver in your later years.

Some clients have adopted a hybrid approach when it comes to LTCI and the MAPT. They purposely underfund the LTCI, say taking a $200/day benefit ($6,000/month) instead of a $400/day benefit ($12,000/month). They also establish the MAPT and transfer their assets to the trust. The thinking is that the $200/day will pay for the home care that they may need and want, at half the cost of the full policy. On the other hand, if they end up in a nursing home, they won't lose their assets due to the $6,000/month they may be short, and Medicaid will pick up the difference.

There are no right and wrong answers in deciding which is the best avenue to take when considering protecting your assets from the high costs of long-term care. We have found, however, that an open discussion between the client and the experienced elder law attorney, with all of the facts and circumstances on the table, often yields the most satisfactory result.

by Michael Ettinger, Esq.

Medicaid annuities have been a viable planning option for New York spouses since The Deficit Reduction Act of 2005.

Say you have a spouse who needs nursing home care (the "institutionalized spouse") but you have more assets than the Medicaid law allows you, the spouse at home (the "community spouse") to keep. Currently, the community spouse may keep about $125,000 in resources (not including the house, which is exempt if a spouse is living there). But what if the couple has $400,000 in assets? That's $275,000 in excess resources.

Many well meaning advisers, including lawyers, will tell you that it is too late and you have to first spend down that $275,000 before Medicaid will pay. Not correct.

Elder law attorneys have a number of good planning options here. One, spousal refusal was the subject of an earlier blog post.

Another planning option, the Medicaid annuity, may in some cases turn out to be the best planning option.

The community spouse purchases a Medicaid annuity worth the excess $275,00 which must make repayments of the full amount of the annuity plus interest with the community spouse's actuarial life expectancy. Now, the $275,000 has disappeared and the institutionalized spouse is immediately eligible for Medicaid, saving nursing home costs of $12,000 or more per month. Spouse at home receives an increased income which is also almost all sheltered from Medicaid.
What if the spouse at home dies first, or before all the payments are made? The children may be named the beneficiary and receive the balance of the payments.

by Michael Ettinger, Attorney at Law
The Medicaid Asset Protection Trust (MAPT) is a technique commonly used by elder law attorneys. It consists of an irrevocable trust, usually set up by a parent of parents sixty-five and older. One or more of the adult children are named as "trustees" to manage the trust for the benefit of the "beneficiaries" who remain the parents during their lifetimes. For example, the parents retain the right to the exclusive use and enjoyment of the home and the income from all of the trust assets. The establishment and "funding" of the trust, i.e. retitling the home and the investments in the name of the trust, starts the five year look-back period running. After five years, those assets become exempt and are protected from the costs of long-term care.

Once the MAPT is established, there are certain things the parties can and cannot do. Below are a list of the "Do's and Don'ts" concerning the MAPT.

Do make all transfers to your trust, as advised by the law firm, in a timely manner.
Do use trust assets for repairs or improvements to the home or other property in the trust.
Do use trust assets for payment of real estate taxes and homeowners insurance.
Do take dividends and income on trust assets on at least a quarterly basis.
Do call the law firm when you wish to make a gift from the trust to any of your beneficiaries.
Do call the law firm when a Grantor needs Medicaid benefits or dies.
Do call the law firm when personal or financial circumstances change significantly.
Do call the law firm if you wish to change trustees or break the trust.
Do provide your homeowner's insurance company with the "letter of instruction" and a copy of the trust for real property transferred to the trust.
Do provide your CPA or tax preparer with the "letter of instruction" regarding the trust tax return
and the "letter of instruction" tax deductibility of legal fees.
Do choose your trustee carefully to avoid the expense (and unpleasantness) of changing
the trustee.
Do call the law firm if you want to take out a reverse mortgage on the property in the trust.

Don't use trust assets to pay telephone or utility bills.
Don't use trust assets to pay personal expenses.
Don't use trust assets to purchase an automobile.
Don't take principal or capital gains from trust assets.
Don't transfer IRA's or 401(k)'s to the trust.
Don't allow beneficiaries to return to the trust or the Grantor any gifts made from trust assets.
Don't make additional transfers to the trust without advising the law firm.