Feather the Nest With A Loving Special Supplemental Needs Trust (SSN)

January 15th, 2010

By Fredrick P. Niemann, Esq., NJ Special Needs Trust Attorney

What do you do if you’re an elderly parent still caring for a disabled child who can’t care for him or herself?  As a parent(s) of children with disabilities such as autism, cerebral palsy, hearing loss, mental retardation, vision impairment, muscular dystrophy, genetic and chromosomal disorders, Down’s syndrome, and fetal alcohol syndrome, to name just a few, some disabilities are apparent at birth, and others are caused by accidents or manifest themselves as mental illness later in life, but the end result is the same:  The child is being cared for by a loving parent who worries about who will provide care for that child once the parent is gone.

The most common advice of the attorney who does not practice in the area of special needs trust planning (or what we prefer to call Tender Loving Care (TLC) Trusts) has been for the parent to disinherit the child.  Disinherit means to make sure you leave that disabled child with absolutely no allocation of money directly.  This gives the simplistic idea that one should just leave extra money to one of the other children who will provide care for the disabled child and money management.  Even in the best of families, this is usually a disastrous idea for the following reasons:

It’s extremely difficult for an individual who receives extra money not to co-mingle that money with their own, and eventually treat it as their own.  That money would become available in the event that the healthy child becomes divorced or is otherwise subject to loss to a creditor.

In many families the dynamic is such that the healthy children have some anger or resentment toward the disabled child because that sibling got more attention.  Thus, healthy children may not want the role of caregiver and banker for their disabled sibling.

And most unfairly, leaving money to one child for disbursement to another child puts a target on the back of the healthy child, in that all complaints and concerns about money will be directed to that individual.

It is the job of the elder law and special needs attorney to assist families like this in developing proper planning so that we can help the parents to create a better way to manage both money and care after they are gone.

A Special Supplemental Needs Trust is designed to work in partnership with any public benefits such as Supplemental Security Income and Medicaid.  It is a way for parents to leave money for the needs of their child beyond what public benefits would pay.  A SSN Trust can provide supplemental care for recreation, social activities, pets, special therapies, entertainment, and even vacation opportunities for a child by the use of trust money.  A SSN Trust can also purchase professional care management, which can enhance not only the dignity, but the quality of life of a disabled child. The SSN Trust is a far more loving and caring solution to the challenge of providing for a child with special needs.

Please don’t disinherit your child with a disability; contact an elder law attorney who can assist you in designing a custom plan to meet the very special needs of your child, so that he or she can be given tender loving care after you have passed away.

For further information and advice in any special needs trust matter, do not hesitate to contact me at  toll-free at 888-800-7442, or email me at  fniemann@scarincihollenbeck.com.

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What is a LTACH? . . . and How Can it Benefit My Critically Ill or Catastrophically Injured Loved One?

January 15th, 2010

Fredrick P. Niemann, Esq., a NJ Elder Law Attorney

Medical science has made great strides in the last 30 years.  We are certainly living longer.  Illnesses and injuries that in the past resulted in death, now do not.  However, the recovery period can be a long one, especially for the elderly, whose recuperative abilities are not the same as younger patients.  As a result, patients remain hospitalized longer and bounce back and forth between nursing home and hospital, in so many cases.

That’s where the long-term acute care hospital or LTACH, comes in.  General hospitals are typically paid a standard fee for a diagnosis so they earn more for a quicker patient discharge.  At the same time, the patient may not quite be ready for a sub-acute facility in a nursing home, which focuses primarily on rehabilitation but can’t provide the medical care of a hospital.  The LTACH can bridge that gap.  Patients receive the benefit of physicians on duty around the clock as well as nurses, respiratory therapists, case managers, physical and occupational therapists, dieticians and pharmacists, all on staff.  LTACHs provide more nursing care than on a medical-surgical floor of a hospital but less than is provided in an intensive care unit.

Many LTACH patients use ventilators to breath and are recovering from multiple medical conditions such as heart failure, major surgery, etc.  They may have developed complications such as bed sores.  The specialty hospital can concentrate on weaning the patient off of the ventilator or providing wound care, for example, that can require weeks of care, that the general hospital won’t receive payment for.  For those on Medicare, LTACHs are covered under Part A.  The average stay in an LTACH is 25 days.

There are over 400 LTACHs nationwide and 8 in New Jersey.  Most are housed in general hospitals, however, some are freestanding, such as Select Specialty Hospital in Rochelle Park, New Jersey which is owned by the same company that also owns Kessler Institute, the facility that specializes in the treatment of spinal cord injuries.  The long term acute care hospital is definitely an option families should explore for their critically ill or catastrophically injured loved one.  It may very well improve the recovery process and increase the chance that a loved one can ultimately return home.

For further information and advice in any elder law matter, do not hesitate to contact me at (888) 800-7442, or fniemann@scarincihollenbeck.com.

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New Identity Theft Rules Affect Businesses

December 23rd, 2009

Fredrick P. Niemann, Esq., NJ Business Law Attorney

Faced with the reality that identity theft continues to cause billions of dollars in losses for individuals and businesses each year, the Federal Trade Commission (FTC) has issued “Red Flag Rules” that are intended to fight the problem by requiring businesses to implement procedures designed to detect and respond to identity theft.

Covered Accounts
The rules apply to financial institutions and creditors with “covered accounts.” The category of financial institutions includes entities such as banks, savings and loans, and credit unions holding “transactional accounts,” meaning a deposit or other account from which the owner makes payments or transfers.
 
Entities subject to the rules must develop a written policy to identify and detect the warning signs – the “red flags” of identity theft.

The creditor category has raised some eyebrows because it embraces some businesses that in everyday parlance may not have been considered to be creditors. Basically, a “creditor” is broadly defined as any entity that regularly extends, renews, or continues credit. For example, this means finance companies, automobile dealers, mortgage brokers, and utilities, but it also means nonprofits and governmental entities that defer payment for goods or services.

An account is a “covered account” for purposes of coverage of the new rules if it is used mostly for personal, family, or household purposes, or if it is an account for which there is a foreseeable risk of identity theft, such as small business and sole proprietorship accounts.

Entities subject to the rules must develop a written policy to identify and detect the warning signs – the “red flags” of identity theft. Detection should involve the regular review of accounts, at a minimum. The plan must describe appropriate responses to prevent or mitigate the effects of the crime. There also must be training for staff members, oversight for any service providers, and overarching management of the plan by the board of directors or senior employees of the financial institution or creditor. How extensive a plan must be will vary depending on the size of the entity and the kind of credit accounts it maintains. The new rules also mandate an annual update of the plan.

Red Flags
So just what are those red flags for possible identity theft? An exhaustive list may not be possible, but a supplement to the Red Flag Rules identifies and describes 26 separate red flags. They fall into five broader categories: (1) alerts, notifications, or warnings from a consumer reporting agency; (2) suspicious documents, including any that have signs of having been altered or forged; (3) suspicious personal identifying information, such as personal information that does not match information from external sources; (4) unusual use of, or suspicious activity relating to, a covered account, such as the use of an account that had been inactive for a long time or, more generally, any sudden and unexplained change in the patterns of activity for an account; and (5) notices from customers, victims of identity theft, law enforcement authorities, or other businesses about possible identity theft in connection with covered accounts.
 
The consequences for not complying with the Red Flag Rules are significant. The FTC itself has provided for the potential imposition of monetary sanctions and an FTC enforcement proceeding. An even more far-reaching incentive for compliance is not to be found in the fine print of the rules but is no less real. The Red Flag Rules are likely to become the prevailing standard of care for what preventive measures companies are expected to take if they hope to be able to defend themselves successfully in civil lawsuits arising out of identity theft.

If you have any questions, contact Fredrick P. Niemann, Esq. at (888)-800-7442, or fniemann@scarincihollenbeck.com.  He is happy to answer your inquiries.

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Tips for Preventing, Detecting, and Reporting Financial Abuse of the Elderly

December 23rd, 2009

Fredrick P. Niemann, Esq., NJ Elder Law Attorney

As the economy worsens, incidences of elder financial abuse are reportedly on the rise. The elderly are particularly vulnerable to scams or to financial abuse by family members in need of money.

A recent study found that up to one million older Americans may be targeted yearly. Family members and caregivers are the culprits in 55 percent of cases, although financial losses are higher with investment fraud scams.

While it is impossible to guarantee that an elderly loved one is not the victim of financial abuse, there are some steps you can take to reduce the chances. One option is to have more than one family member involved in caring for the loved one. You can also encourage the elder to get involved in community activities to ensure he or she has a wide range of support. Using direct deposit as much as possible is also helpful. And of course you should always screen caregivers carefully and verify references.

Financial abuse can be very difficult to detect. The following are some signs that a loved one may be the victim of this kind of abuse:

  • The disappearance of valuable objects
  • Withdrawals of large amounts of money, checks made out to cash, or low bank balances
  •  A new “best friend” and isolation from other friends and family
  • Large credit card transactions
  •  Signatures on checks look different
  •  A name added to a bank account or newly formed joint accounts
  •  Indications of fear of caregivers

If you suspect someone of being financially abused, there are several actions you can take:

  • Make a report by calling your local or County Adult Protective Services and/or the NJ Office of the Ombudsman for the Elderly. File a police report if you believe the facts support a crime.
  • Explore legal options with a qualified attorney.  In New Jersey, the Chancery Court is available to address alleged legal abuse. The court can intervene if someone in the family is misusing a power of attorney or their role as guardian or conservator.
  • Contact advocacy organizations. The National Center on Elder Abuse offers guidance on how to investigate and seek justice for elder abuse. State laws vary, but some have people available to deal with the situation and may be able to get restitution for breach of fiduciary duties.
  • Try to get a temporary restraining order from a court while building your case.  Again, speak to a qualified elder law attorney.

If you have any questions regarding an elder law or estate planning matter, contact Fredrick P. Niemann, Esq. at (888) 800-7442, or fniemann@scarincihollenbeck.com.  He is happy to answer your inquiries.

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How a Declining Stock Market Can Cause a Long Term Care Nightmare

December 7th, 2009

Fredrick P. Niemann, Esq., a Medicaid Attorney

As the current economic crisis deepens, it is becoming increasingly clear that we are heading into uncharted waters, in so many respects.  Specifically, however, I am talking about the long term care arena.
Dad owns a home in which he lives.  Home health aides come into the home to assist Dad but as his health deteriorates, he needs increased care.  His son, John believes that Dad will very soon need to move to a nursing facility.  Now, here is where it gets interesting.

Dad took a reverse mortgage for $300,000 and he took it in a lump sum.  John’s plan was to invest the money in the market, get a decent rate of return that would help meet Dad’s expenses.  Well, we know what has happened in the past year.  The stock market has headed south.  Dad’s investment headed south too.  He lost roughly half of his investment.  That’s bad enough.  But here is the problem.  John transferred the money to an account in his name.  Not because he intended to keep it, but because it was just easier to manage the funds that way.

When he did that, however, he caused a Medicaid transfer penalty.  In New Jersey that penalty is approximately 3 and ½ years.  So what happens when Dad sells his home and uses the sale proceeds (less the amount he pays back to the bank) for his nursing home care?  He will be ineligible for Medicaid unless John transfers back the money.  Except that he doesn’t have all of it.

I know.  You’re thinking, “Will Medicaid really deny Dad’s application if John can show that the loss in value occurred in the market, and that he didn’t take the money?”  I don’t know.  Maybe, maybe not.  You see, we are living in unusual times.  Many states are struggling with budget deficits.  Medicaid is one of the biggest, if not the biggest, program for most states.  If they don’t have the money to fund these programs I can certainly see New Jersey applying the Medicaid rules as written and impose a penalty.  If Dad is ineligible for 3 and ½ years he may never live to receive Medicaid, something the government no doubt may consider when trying to balance its budget.

And just another reason why you can’t afford to be unprepared when it comes to long term care.

For further information and advice in any Medicaid matter, do not hesitate to contact me at 888-800-7442, or email fniemann@scarincihollenbeck.com.

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Assisted Living Care – I’m Out of Money So Now What?

December 7th, 2009

Fredrick P. Niemann, Esq., an Elder Law Attorney

Dad has been living in an assisted living facility for 3 years at a cost of $4500 per month.  He likes it there, is safe and well cared for.  There is one small problem.  He is running out of money and the family is becoming desperate.
 
Fortunately, some states have Medicaid programs that cover assisted living care but the rules can vary significantly from nursing home Medicaid. In New Jersey, for example, if income exceeds the Medicaid cap ($2022 per month in 2009) the assisted living program won’t, under any circumstances, be an option.  For those needing nursing home care, on the other hand, we have two Medicaid programs, one for those who do not exceed income limits and a second for those who do. 

The application process for Medicaid can take months or longer.  If, for example, Dad becomes eligible and applies for Medicaid beginning in February, it might take until April, or longer in some cases, for him to receive approval.  In the case of nursing home Medicaid whenever Dad is approved payments will be made on his behalf retroactive to when he first applied (assuming of course that he was eligible in that month).  Not so for assisted living Medicaid.  Approval is not retroactive.

As an elder law attorney, our focus with clients is on the financial requirements of Medicaid.  I always, however, remind clients that we can’t forget about the medical requirement.  The applicant must meet the test of medical necessity for nursing home level care as determined by a Medicaid nurse who visits the applicant.  In New Jersey, this is true even in the case of assisted living.  It bears repeating.  The assisted living Medicaid applicant must be certified as needing nursing home level care.  Fail that test and the asset and income levels are irrelevant.

So, if Dad can’t get Medicaid, what then?  If he can’t pay the bill he generally won’t be able to stay in the assisted living facility unless the family pays for his care.  Not a great result but one the family could have avoided.  Before he entered the facility a plan should have been put in place to cover the possibility that he could run out of money.  In some cases that may involve planning, determining what public benefits he can or cannot receive and when, (such as VA Aid and Attendance benefits) or negotiating a contractual modification with the assisted living residence before initial entry.

The mistake that Dad and his family made is in not looking far enough down the road and failing to sit down with someone knowledgeable about the various issues and pitfalls, such as an elder law attorney.  The lesson to be learned is that you can’t wait until the money runs out to then answer the question “What do I do now?”

For further information and advice in any elder law matter, do not hesitate to contact me at 888-800-7442, or email fniemann@scarincihollenbeck.com.

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Married … Well Not Really – A Long Term Care Quagmire

December 7th, 2009

Fredrick P. Niemann, Esq., a New Jersey Medicaid Attorney

Jane calls us to relate the same problem that many Americans today are coping with, trying to care for aging parents.  She calls because Dad’s health is rapidly deteriorating and she fears he will need nursing home care.  I ask about Mom’s health.  Jane replies that she is healthy.  And here is the twist, where the story becomes more complicated.

Jane tells me that Mom and Dad have been separated for years, never divorced, just living separate lives under separate roofs, with separate assets.  “Dad was never easy to live with”, she tells me, “but Mom wasn’t the type to file for divorce.  It wasn’t acceptable.”  “So”, she asks me, “we can spend down Dad’s assets and then qualify him for Medicaid, right?”

“Well”, I tell her, “it is a bit more complicated than that”.  Under Medicaid rules, because they are still married, all their assets are combined for purposes of calculating how much to spend down.  Mom may have to spend some of her assets for Dad’s care even though they have been living single lives for years.  “Is there anything we can do,” Jane asks, as I hear the desperation in her voice.

Divorce is still an option, although it could be considerably more difficult if Dad doesn’t have the mental capacity to understand the legal process and consent to a divorce settlement.  There is also the matter of the State scrutinizing the divorce, especially if Mom has accumulated and wants to keep more than 50% of the combined assets.  You see, the State assumes the divorce was obtained for the purpose of qualifying for Medicaid.  If Mom keeps more than half of the assets Dad would probably be turned down for benefits.  There may also be other strategies that we have discussed for married couples that could be employed to preserve assets for Mom but, although they are married under the law, they are not really “together”.  So preserving Dad’s assets for Mom and vice versa is not the goal.

As Jane puts it, “Mom and Dad have lived separate lives for many years.  Mom has struggled to accumulate her own assets and become self sufficient.  How can I tell her that she will lose some of her hard earned money?”  An answer is not easy to give.  I do, however, have one for others who may one day be in that situation.  If any of Jane’s story sounds familiar to you, don’t wait till long term care is staring you in the face.  Plan ahead and solve the problem before it reaches crisis proportions or you’ll be faced with the dilemma that Jane and her family face.

For further information and advice in any Medicaid matter, do not hesitate to contact me at 888-800-7442, or email fniemann@scarincihollenbeck.com.

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The Unpredictability of Alzheimer’s Disease

July 24th, 2009

Fredrick P. Niemann, Esq., an Elder Law Attorney

So often, when working with families who are struggling to care for a loved one with dementia, the most frustrating part is the uncertainty of the condition from day to day.  A recent case in another state highlights that very clearly.

Verne Gagne was a prominent professional wrestler in his day with the American Wrestling Association, in the 1960’s and 70’s.  He eventually lost his big stars, such as Hulk Hogan and Jesse Ventura, to the World Wrestling Federation. He is now 82, and suffers from Alzheimer’s disease, residing in a nursing home.  That is where he had an altercation with a 97 year old resident and put a wrestling move on the resident, slamming his body to the ground.  The other man broke his hip and died several weeks later.  The police are investigating the incident but there is a consensus of opinion that Mr. Gagne should not be charged with a crime because he didn’t know what he was doing.  A tragic story but with similarities that are all too familiar to families who have loved ones with Alzheimer’s.  It is the uncertain, sometimes violent and erratic, behavior that can be most frustrating and frightening. 

Although no one can be sure what caused Verne Gagne to act in the way he did, we know that Alzheimer’s patients very often lose their short term memory but are able to conjure memories of events and people 40 or 50 years ago or more.  Gagne’s skill as a wrestler made him more dangerous than the average resident.  Firstly, he was more physically fit than the average resident.  Secondly, while he was losing his short term memory, he was prone to recalling events from his past, such as his days wrestling.  Perhaps it is that memory, programmed into his brain, that caused him to perform a wrestling move on his co-resident.

It is the unpredictability that often turns a family’s world upside down,.  Dad can be living comfortably in a facility one day and the next he can become extremely agitated and aggressive, causing the facility to ask the family to move him because they can’t accommodate his needs, or because of concern for the safety of other residents.

It is just another reason why families cannot wait and react to a loved one’s long term care needs.  When possible, preventative measures need to be taken.  So often, we see families plan as if Mom or Dad’s current condition, while tragic and upsetting, will remain static, unchanging.   That is usually far from the case and misjudging the situation can be worse than anyone imagined.
 
Who knows what could have been done to prevent Verne Gagne from acting out, although, there was at least one previous altercation between the two residents.  The lesson to be learned on a broader level, however, is to recognize the unpredictability of Alzheimer’s, and dementia in general.  Take action before, not after, it becomes necessary.

For further information and advice in any elder law matter, do not hesitate to contact me at 732-863-9900 Ext. 101 or 105, or fniemann@hnlawfirm.com.

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Retirement Home Can Force Resident to Move to Higher Level of Care

July 24th, 2009

Fredrick P. Niemann, Esq., NJ Elder Law Attorney

A federal court has ruled that a continuing care retirement community (CCRC) can force one of its residents to move from her private apartment to an assisted living unit.

Sally Herriot, 90, is a California resident of a CCRC which provides three levels of care — independent living, assisted living and skilled nursing. Since moving to the facility with her now-deceased husband in 1991, Ms. Herriot had lived in a spacious independent living apartment. After Ms. Herriott returned from a hospital stay, the CCRC determined that it was necessary to transfer her from her apartment to a much smaller, hospital-like assisted-living unit where she could be served by a trained nursing staff. Ms. Herriot, her family and her physician objected to the transfer, arguing that she is able to remain in her apartment with the help of round-the-clock private aides she had hired. The CCRC rejected this arrangement.

Ms. Herriot subsequently filed suit in federal court, alleging that the facility had discriminated against her based on her disabilities by refusing to accept her accommodation of hiring private aides.
 
The U.S. District Court ruled that the CCRC has a duty to provide Ms. Herriot with medical care based on her level of need, and that it cannot delegate that duty to private help hired by Ms. Herriot. The court finds that the facility would be violating its legal obligations by accepting Ms. Herriot’s plan to allow her to remain in her apartment.

For further information and advice in any elder law matter, do not hesitate to contact me at 732-863-9900 Ext. 101 or 105, or fniemann@hnlawfirm.com.

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The Story of the Pitfalls Caused by an Improperly Drafted Will

July 10th, 2009

It Really Does Matter!

Fredrick P. Niemann, Esq., a NJ Wills Attorney

A number of years ago, a woman’s husband died leaving a will and some assets, one of which was a 401k.  The marriage was a second for her husband, who had two sons from his first marriage.  While he was single he had changed the beneficiaries of his life insurance and 401k plan to his sons and had redone his will.

After his second marriage, the husband and his new wife bought a new home together.  They asked their real estate attorney, who handled the purchase for them, to draft a new will as well.  The husband listed for his attorney the assets he wanted to pass to his sons and which to his new wife.  The 401k he wanted to go to his wife.  Unfortunately, the attorney didn’t understand the difference between probate and non-probate assets.  So when he wrote a will that specifically left the 401k to the wife, he didn’t know that the will would have no effect on this asset because the beneficiary designations on file with the custodian of the 401k plan still listed the sons from the first marriage.

When the husband died, the wife received a big shock when she was told that she had no interested in the $500,000 account.  That’s because a will doesn’t automatically control the distribution of all your assets.  Contract property such as life insurance, annuities and retirement accounts pass in accordance with whom you have designated on the beneficiary forms completed and filed with the life insurance and annuity companies or retirement account custodians.  Other types of property pass by operation of law such as joint accounts with right of survivorship or real estate that is owned by husband and wife.  When one owner dies, the property automatically passes to the surviving owner.  It does not matter what the will says.

That is what happened in our story.  The 401k is contract property so it passed according to the beneficiary designation form on file, not by the will.  The wife tried unsuccessfully to get a court order directing the funds be paid to her.  She did recover about half of the account balance in a litigation settlement, less fees and costs.

The moral of the story is that although many people think drafting a will is simple and often undertake to do it themselves with a “will kit” or ask an attorney to do a “simple will”, they may miss important steps that must be taken that can save a lot of heartache and money.

To learn about these and other elder law issues, go to www.hnlawfirm.com or contact Fredrick P. Niemann, Esq. at (732) 863-9900 or by e-mail at fniemann@hnlawfirm.com

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