Archive for April, 2009

No Parental Immunity for Father Who Failed to Rescue Son from Fatal Fire

Wednesday, April 29th, 2009

Christopher J. Hanlon, Esq., a Personal Injury Attorney

A father’s failure to remove his child from a car before it burst into flames falls outside the exercise of child-rearing philosophy which the parental-immunity doctrine is intended to protect, a state New Jersey appeals could held.

The three-judge Appellate Division panel reinstated a dismissed wrongful death suit by the boy’s mother and ordered a new trial on whether the father’s actions were negligent.

“This case simply involves a father exposing his son to the risk of injury by not removing him from the car before the fire erupted,” Judge Marie Simonelli wrote for the court.

According to the opinion, Jasford Wiggin was driving his BMW on Route 78 in Springfield on June 17, 2004, when he smelled smoke, pulled onto the shoulder and got out to inspect his car, leaving his 4-year old son, Joseph, strapped in his car seat.  The car burst into flames a moment later.

Wiggan moved to dismiss the suit by the mother.

Superior Court Judge Marianne Espinosa granted the motion, saying the decision to leave the child in the car “falls within the area of circumstances where there should e no judicial intrusion upon his decision.”  On appeal, counsel argued that the decision by the boy’s father had nothing to do with providing for Joseph’s emotional or physical needs or fostering his well-being.

The Appellate Division agreed, citing that parental immunity is “abrogated to customary child care” but not where failure to supervise rises to the level of “willful or wanton misconduct.”

“This was not a matter of customary child care, discipline or supervision.  It had no connection whatsoever to any unique philosophy of child-rearing, nor was it designed to promote Joseph’s physical, moral, emotional and intellectual growth.”  For more information, please contact Christopher J. Hanlon, Esq. or Lauren Bercik, Esq. at 732-863-9900.

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The Home – To Transfer or Not to Transfer – Part 2

Wednesday, April 22nd, 2009

Fredrick P. Niemann, Esq., a Medicaid Planning Attorney

As we discussed last week, Joe wants to transfer his home to Jim, who lives there with his wife and children.  But let’s change the facts a bit.  Joe is not healthy but has the early stages of dementia and needs some in home assistance.  It is possible that within 5 years he will need nursing home care, so we are concerned about the 5 year Medicaid lookback.  What options do Joe and Jim have?

One possibility is for Jim to buy the home at a price that he can afford but that may be below fair market value.  If, for example, he purchases the home for $200,000 and it is worth $450,000, then $250,000 is considered a gift subject to the Medicaid transfer penalty.  Jim can spend down the $200,000 for his care but if he runs out of money then Jim may need to cover the cost of care until the 5 year time frame expires.

Now that Joe lives in Jim’s home, they could enter into an agreement for Joe to pay rent.  If Jim or his wife is providing care that Joe otherwise would need to hire an aide to do, then Joe could pay Jim to do it.  This is what is called a personal services contract.  Food, utilities, and other goods and services that Jim may be providing, can and should be paid for by Joe.  Perhaps the home needs to be modified to allow Joe to live there.  Jim could spend money to make those improvements when they become necessary, borrowing against the home. 

Some or all of these strategies may be ways for Jim to, in essence, pay Joe for some of the remaining uncompensated value of Joe’s home, over time, in a way that may be more affordable for Jim.  However, each of these financial arrangements must be in writing.  There are details that must be followed.  That’s because Medicaid presumes that any transfers of money or services is a gift, subject to a transfer penalty, unless it is in writing and at fair value.

A word of caution.  The Medicaid rules are complicated.  What will work in one state may not work in another.  What may suitable for one family may be entirely the wrong solution for another.  If you try to do it yourself and get it wrong, you may find yourself with a lengthy period of Medicaid ineligibility and no money to pay for care.  You need a knowledgeable and trusted elder law advisor to guide you through the maze of laws and regulations that leave hidden traps for the unwary.

For further information and advice in a New Jersey Medicaid or an estate planning matter, do not hesitate to contact me at 732-863-9900 Ext. 101 or 105, or fniemann@hnlawfirm.com.

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A Two Generation Family’s Long Term Care Crisis – Part 2

Wednesday, April 22nd, 2009

Fredrick P. Niemann, Esq., a Medicaid Attorney

So, in last week’s blog I presented a common scenario, Mom and Dad both needing long term care and nothing but a house left in their names.  The children are paying for their care.  We get Dad on Medicaid first. 

Now we work on getting Mom into a nursing home and then apply for Medicaid for her.  The home will have to be sold (unless there is a family member living there but we’ll address that exception in another issue)  but it won’t hold up Mom’s Medicaid, which is important, since it not so easy these days to sell in a what is a down market.  Once the home is sold Mom will lose her eligibility for Medicaid and will need to private pay from the proceeds of the sale.  She also could keep her Medicaid eligibility and pay the proceeds to the State to reimburse it for benefits paid up till that point.  Which option is better depends on how much is realized from the sale and how much is owed to the State.  But, keep in mind that the State pays the nursing home at a lower rate than you or I would pay (approximately 50% less).

And, what about the money that the children paid out of their own pocket for Mom and Dad’s care?  They can be reimbursed from the proceeds once they sell the house.  However, everything must be documented because Medicaid presumes that transfers between family members are gifts, not loans.  If it is a loan then there must be a written agreement.  The best practice is for there to be a recorded mortgage.  At the closing the mortgage is paid off and a discharge is recorded by the Buyer’s attorney.  The children are reimbursed directly and there is a record as far as Medicaid is concerned.

In the end, the parents are paying for their care from their own assets, the children are paid back (money which they will need for their own retirement and long term care needs) and depending on how much long term care is needed and what the home sells for, there may even be some amount left to transfer to the next generation in the form of an inheritance, after the State is reimbursed for benefits they paid out on Mom and Dad’s behalf.

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

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The Law Has Changed: Read About This “Medicaid Near Miss”

Friday, April 17th, 2009

Fredrick P. Niemann, Esq., NJ Medicaid Attorney

Here’s a story I was told by a colleague.  Mary was 85 years old and had been cared for by her granddaughter, Jane for several years.  As Mary’s health deteriorated mentally and physically, Jane devoted more of her time to caring for Mary, putting her own life on hold in some respects.  Mary’s family agreed that Jane would look after Mary.  Eventually, however, Jane could no longer care for Mary.  Mary was admitted to a hospital and then a nursing facility.  Because she had no assets, Jane needed to make application for Medicaid benefits and that’s when the problems began.

When Jane met with a Medicaid caseworker, she was asked about Mary’s finances.  Jane explained that in 2004, Mary sold her house for $125,000.  Jane moved Mary to an over 55 community where Jane lived nearby.  Jane quit her job to look after Mary and had power of attorney for Mary.  Their finances were commingled, however, and Jane, not understanding the Medicaid rules, did not keep records of how money was spent.  Recognizing that caring for Mary was a full time job, Mary’s assets and income supported both Mary and Jane.  Mary also gave Jane gifts of several thousand dollars on a few different occasions as a symbol of her love and appreciation of Jane.

The Medicaid caseworker incorrectly told Jane that Mary was not eligible for Medicaid, that all the money from the sale of the house would be treated as a gift subject to a Medicaid penalty.  She also suggested that Jane might be held responsible for “taking” Mary’s money.  Jane was panic stricken.  She didn’t know enough to assert her rights and give Medicaid the proper information.  As bad as things were, Mary and Jane had one thing going for them, timing.  Because the home sale and spend down of the proceeds all occurred before February 8, 2006, the transfer of Mary’s assets were subject to penalties that began to run when the transfers were made.  In their case, those penalties had already expired by the time the client applied for Medicaid.  Had those transfers occurred under the new law, no Medicaid would have been available to Mary for 12 months or more, leaving Jane with no way to pay for her care and the nursing home with a resident unable to pay their bill.

The next case that comes to us with these set of facts will likely fall under the new rules and would not end as favorably.  So what can you do?  Consult with an elder law attorney and understand the rules well before Medicaid is even a possibility on the horizon.  Once properly educated, you can take the steps to avoid the mess Mary and Jane faced or fix the mistakes.  If you wait until it’s time to file for Medicaid, it could very well be too late.

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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National Report Says States Have Ability to Curb Power of Attorney (POA) Abuse

Friday, April 17th, 2009

Fredrick P. Niemann, Esq., a Power of Attorney Lawyer

The misuse of powers of attorney to exploit the elderly appears to be on the rise, but a new AARP report says that states can improve protections for older people by adopting a model law that addresses this type of abuse.

For most people, the power of attorney is the most important estate planning instrument — even more useful than a will. A power of attorney (POA) allows an individual to name a trusted person — their agent — to make financial decisions for them if they ever become incapacitated.

But while a POA avoids the costly and time-consuming process of having a court appoint a guardian or conservator, it also confers a great deal of authority on the agent. This is why advocates for the elderly often call the POA a “license to steal.” Increasingly, it seems, dishonest agents have been taking advantage of this license. AARP says that adult protective services and criminal justice professionals are reporting “an explosion” of financial exploitation cases of this type against the elderly.

Powers of attorney are regulated by state law and most states lack adequate safeguards, AARP contends; not New Jersey however. “New Jersey has strong fiduciary laws that are readily enforceable by the courts” says Fredrick P. Niemann, an elder law attorney in Freehold, Monmouth County, New Jersey.  New Jersey has laws on Powers of Attorney to offer help to protect people who execute POAs and discourage POA abuse. “There are stringent requirements for agents to exercise certain powers, as well as provisions making malfeasant agents liable for damages, attorney’s fees and costs”, says Niemann.

The AARP report, “Power of Attorney Abuse: What States Can Do About It,” compiled by the American Bar Association Commission on Law and Aging under contract to AARP.

For further information and advice on Powers of Attorney, do not hesitate to contact Fredrick P. Niemann at 732-863-9900 Ext. 101 or 105, or fniemann@hnlawfirm.com.

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The Home – To Transfer or Not to Transfer – Part 1

Tuesday, April 14th, 2009

Fredrick P. Niemann, Esq., an Estate Planning Attorney

Home ownership has long been a large part of the American dream.  Through the course of the 20th century, the percentage of Americans owning their homes rose considerably.   In many of these homes three generations lived under one roof.  Today, there still are many 3 generations homes.  The reasons for it are the same.  The grandparents often help care for their grandchildren while the parents are working.  Sometimes the grandparents need assistance and can’t live alone any longer. 

There is, however, a big difference between the households of the 20th century and those of the 21st century, which generation owns the home.  The parent homeowner of the 20th century now is the grandparent homeowner of the 21st century. 
 
So now that homeowner, we’ll call him Joe, is in his 70’s.  His son Jim and Jim’s wife and kids live with Joe.  They are concerned that as Joe ages and needs long term care they may lose the house.  Jim wants to buy a house but can’t afford it, even in today’s depressed real estate market.  So they come upon a solution.  Joe will transfer his house to Jim or perhaps sell to Jim at a reduced price, maybe enough to pay off Joe’s mortgage.  Jim will have a home of his own to raise his family and Joe will have the support of family should he need it.  A win – win scenario for everyone.  Right?

Well, not so fast.  If Jim doesn’t pay fair market value for the home then the uncompensated amount is treated as a transfer for less than fair value should Joe need Medicaid benefits in the next five years to pay for long term care. 
 
What to do?  Joe and Jim must understand that if Joe needs care there must be a plan in place to cover the cost of that care.  That plan could involve VA benefits if Joe is a veteran.  It could also include using Joe’s funds to pay for his care and long term care insurance benefits.  But, if these sources of payment still leave a gap then Jim will need to borrow against the home to pay for Joe’s care, which may mean putting off tapping into the equity to pay for renovations or other expenses. 

Provided these contingencies are covered, however, the home transfer can work well.  What happens, however, if Joe is not healthy when contemplating a transfer, but instead has dementia and already needs some care.  In that case, the home transfer is a little more complicated but I’ll address that in the next week’s post.

For further information and advice in a New Jersey Medicaid or an estate planning matter, do not hesitate to contact me at 732-863-9900 Ext. 101 or 105, or fniemann@hnlawfirm.com.

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A Two Generation Family’s Long Term Care Crisis – Part 1

Tuesday, April 14th, 2009

Fredrick P. Niemann, Esq., a Medicaid Attorney

Mom and Dad are still living in their home which they own.  They both need round the clock nursing home level care and have home health aides living with them.  This has been going on for a number of years and they have spent down much of their assets on care and maintaining the home.  Now the children are spending their own money with no end in sight.  They want to sell the home but in today’s economy and real estate market that isn’t as easy as it once was.  Their current predicament is taxing on the family, both financially and emotionally.  Last week I talked about a reverse mortgage as a possible solution.  Is there any other way out?

Actually, there is.  There is a way to move both parents into a nursing home, get them on Medicaid and reimburse the children for monies they paid for their parents’ care.  Medicaid rules are very complex and the timing of each step in the process is critical but it can be done.  Here’s how it works.

The first step is to get one of the parents into a nursing home.  Let’s say it is Dad.  If he is in the hospital already (often the case when we get the call) then he should be transferred from there to the nursing home.  We then apply for Medicaid.  The house is an exempt asset (ie., not a countable asset for Medicaid eligibility purposes) since Mom is still living there.  Once we get Dad approved for Medicaid there is what is called a “division of assets”.  Whatever is Mom’s is now hers, to be spent on her care but not on Dad’s.  This is the key.  In next week’s blog I’ll discuss the next step, getting Mom on Medicaid.

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

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