Communication between parent and child before a crisis is so important and can provide peace of mind and reduce stress for both.  The following are some of the questions that families should discuss, which will often begin a dialogue about the type of preplanning parents can do before a crisis occurs.

1. Children should know roughly how much and where their parents’ assets are.  Do they have enough to sustain the healthy spouse should one spouse become ill and need extended hospitalization and/or nursing home care?

2. What does the income picture look like?  If one spouse dies, how much income will the surviving spouse be left with?  Will there be a significant drop in income?  Often time’s steps can be taken before that spouse passes to help boost the surviving spouse’s income.

3. Is financial support anticipated?  People are living longer than ever.  Many people are at risk of outliving their money.   Answering this question means not simply looking at current expenses vs. income but looking at the next step in the elder care journey and the next step after that and asking “Do I have enough to pay for long term care and if so, for how long?  And if not, what is my plan then?

4. What types of insurance are there (ie., health, long term care, life)?  Is coverage adequate? If not, can coverage be increased?  You certainly want to do that before you become uninsurable.

5. Are there a power of attorney and a health care directive and where are they?  Are they up to date or stale?  If these documents are not in place then the only alternative is a costly and time-consuming process called guardianship.  The court will be involved in your family’s affairs and you may not get the result you want.

6. Is there an up to date will?  A clear, thought out estate plan can avoid family squabbles after the parent passes away. Even people with small estates should have a will.  Also, make sure the original will can be located. Probating a copy is difficult and expensive.

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

Sometimes even the best laid marital plans go astray. Usually when that happens, litigation does not ensue, but there are precedents for a cause of action for breach of a contract to marry. In one such recent case, a jilted bride-to-be recovered a substantial jury verdict from her fiancée after he called off the planned wedding. It was the second time that the same man had balked at marrying the same woman. This time, he had asked her to pull up stakes in Florida, where she then lived and worked, and move to live with him in Georgia. He also offered her a diamond ring and agreed to pay off about $40,000 in debt that she had accumulated. Only two weeks into the new arrangement, the man called off the wedding, citing his poor health and apologizing for making promises he would not be keeping.

Despite the canceled wedding, the couple stayed together for a few more months. Then the last straw came for the former bride-to-be when she found her boyfriend with another woman. He claimed that he had started his romance with the second woman only after the wedding was canceled, but this claim was belied by evidence that he had given that woman $500 just before his ill-fated marriage proposal to the plaintiff.

The plaintiff sued for breach of contract, seeking damages for financial and emotional harm. While it may seem that the most obvious injury in such cases is emotional in nature, in this case all but a small amount of the jury verdict was attributable to the value of the employment package that the plaintiff had given up to be with her fiancée. After coming to Georgia, she had struggled to find work and ultimately settled for a much less attractive job after the breakup.

No doubt it did not make a good impression on the jury that the boyfriend had broken the news that there would be no wedding by leaving his fiancée a note in the bathroom. This fact dovetailed nicely with the woman’s attorney’s closing argument, which could be summed up as “He’s a cad.”

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

As I have written previously, in speaking with families, overwhelmingly the desire is for elderly family members to remain in their own home as they age and face declining physical and mental health.   But, is that always the best thing?  For many people, the answer is yes.  But, perhaps not for everyone.

I was reading a recent post on the New York Times New Old Age blog (www.newoldage.blogs.nytimes.com) which highlighted two cases in which elderly parents were living at home in declining health.  One was a 95 year old woman living in her own home with a team of aides and other assistance, all coordinated by her overwhelmed daughter.  The other was an elderly man suffering from Alzheimer’s Disease, living in the basement of his son’s home.  The woman had visitors and activity in her home every day.  The man did not, spending most of the day alone watching television.

The two cases raise some interesting questions.  Would the elderly man be better served in an assisted living facility or at least, adult day care?  He is not getting any mental stimulation through most of the day, which, if received, could slow down the progression of his disease.  There is the safety issue as well.  He remains at home in the basement for long hours unsupervised.  What if there is an emergency?   Will help arrive in time?

The elderly woman would seem to be better cared for.  She has visitors in and out of her home throughout the day.  But, her daughter is coordinating all this care.  It sure sounds like a full time job.  And then we learn that the daughter, herself, is 74 years old.  How is this affecting her health and what happens if she needs care?  Finally, I wonder what Mom’s finances are?  All this assistance can approach and exceed the cost of care in a facility.  Will she run out of money and if so, what happens then?

As 77 million baby boomers begin turning 65 in 18 months, long term care will continue to be a major issue families will have to wrestle with.  And, I am not saying that remaining at home shouldn’t be the goal for many.  However, as with most complex problems a one size solution does not fit all.  Assisted living facilities and nursing homes will always have a place in the continuum of care and may just be the right fit for some.  Food for thought and a different perspective to consider.

For further information and advice in any estate matter, do not hesitate to contact me at 888-800-7442, or info@fnlawyerinnj.com.

If you inherit property, of course you should be grateful and count your blessings. Still, consider the possibility that the gift may come with a big string attached – a debt linked to the property, such as is particularly common with real estate or a car. In that event, the question arises as to whether the debt must be satisfied from the particular asset or from the decedent’s estate more generally. How this question is answered can cause a big swing in the respective gift amounts for beneficiaries of an estate.

Historically, the law presumed that the debt was not to be paid from the property that was connected to it. The reasoning was that a true gift should not come laden with such a burden. Over time, as taking on debt became commonplace, this thinking changed and statutes flipped the conventional assumption. Increasingly, these laws start from the premise that the property left to someone includes the debt on the property, unless the decedent in his or her will clearly indicated a different intent. That is where careful estate planning, with professional guidance, comes in.

It is best to leave no doubt for the ordinary lay reader of a will. A general directive in the will to pay all debts of the testator is too nebulous. Instead, if the intent is not to keep the asset joined to the debt, language something like this should be used in a will: “If [the specific asset] is subject to a mortgage, security interest, or other lien, I direct that my executor pay the debt from other property of my estate which is not given to a specific person or entity.”

This scenario was played out recently in a case in which a farmer left to his (favored?) son three different farms, each of which was encumbered by debt. To his other son he left the residue of the estate. When the father died, the executor used part of the estate proceeds to pay off the loans to the farms, so that the first son would receive them debt-free. Not surprisingly, the second son, whose inheritance was thereby diminished, brought the matter to court.

The second son prevailed, forcing payment of the debts for the farms to come from the farms themselves. The father’s will directed in a general way that debts were to be paid from the estate. However, under the relevant state statute, that was not a sufficiently explicit indication of intent to satisfy the debts on the farms from the residu¬ary estate. In other words, the will had not clearly shown an intent that the first son was to receive the farms debt-free. As a result, the first son got the three farms, but he, not the second son, also got the responsibility for paying off the attached encumbrances, which totaled almost a quarter of a million dollars.

For further information and advice in any estate matter, do not hesitate to contact me at 888-800-7442, or info@fnlawyerinnj.com.

Just about everyone who gets Social Security, Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), or a Railroad Retirement or Veterans Administration disability pension, will receive a one-time payment from the U.S. government of $250 as part of the American Recovery and Reinvestment Act of 2009 (a/k/a the stimulus bill). The extra payment is scheduled to arrive by the end of May the same way you receive your usual benefit.

Among those receiving the one-time stimulus payment will be long-term care facility residents on Medicaid who draw Social Security benefits. (But note that SSI beneficiaries who live in a nursing home and get a monthly SSI benefit of $30 are not eligible for the payment.)

Medicaid-eligible long-term care facility residents and their families should know that the stimulus payment is not considered income and will not be counted as a resource for 10 months (including the month of receipt) in calculating benefits under Medicaid (or any other federal program or state program with some federal financing). The $250 will also not count as gross income for tax purposes. Recipients can save the payment if they want to, but they should make sure that it will not put their savings over the asset limit for any program benefits they may receive as of February 2010.

Because the $250 payment will not be counted as income, it will not put a Medicaid-eligible resident over the state’s income limit. In addition, a Medicaid nursing facility resident should not see an increase in his or her patient pay for the month the payment is received.

“This money is yours. Your home or facility is not allowed to take it to pay your bill, even if you get help from your state paying for your care,” says the National Council on Aging (NCOA) in an informational handout directed at residents of nursing homes, assisted living facilities and board and care homes.

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

WHAT IF 33% OF ALL SENIORS IN THIS COUNTRY could receive up to $1,949 a month in additional income from the government to help cover their elder care costs? THEY CAN!

Under the right circumstances, a little-known federal program will pay additional income to cover long term care costs for at least 1/3 of all US senior households — that’s how many war veterans or their surviving spouses there are in this country. But the provisions of this program are such a well-kept secret that only 4.7% of US seniors are actually receiving the benefit. The great news about this program is the Department of Veterans Affairs will pay you to hire your family, friends or just about anyone to take care of you (Caregiving spouses can’t be paid under this program). The program is called “Veterans Pension.”

Most people who have heard about Pension know that it will cover the costs of assisted living and, in some cases, cover nursing home costs as well. But the majority of those receiving long term care in this country are in their homes. Estimates are that approximately 70% to 80% of all long term care is being provided in the home. All of the information available about Pension overlooks the fact that this benefit can also be used to pay for home care.

It also comes as a surprise to most people that the Department of Veterans Affairs will allow veterans’ households to include the annual cost of paying any person such as family members, friends or hired help for care when calculating the Pension benefit. This annual cost is deducted from household income and used to calculate a lower “countable income” which in turn enables families to receive this disability income from VA. Even though VA claims the benefit is for low income families, because of the special provision in the regulations — allowing for deduction for care costs — households earning between $3,000 to $6,000 a month or more can still qualify for Pension under the right conditions.

This extra income can be a welcome benefit for families struggling to provide eldercare for loved ones at home. Under the right circumstances, this annualized medical expense for the cost of family members, friends or any other person providing care, could create an additional household income of up to $1,056 a month for a single surviving spouse of a veteran, up to $1,644 a month for a single veteran or up to $1,949 a month for a couple.

If the disabled care recipient has been rated “housebound” or in need of “aid and attendance” by VA, all fees paid to an in-home attendant will be allowed as long as the attendant provides some medical or nursing services for the disabled person. The attendant does not have to be a licensed health professional. There is also no need to distinguish between medical and non-medical services — all are deductible.

For a disabled person who has been rated “in need of aid and attendance” or “housebound”, a family member will be considered an in-home attendant, but that family member has to be paid for services duly rendered. There is potential for fraud here where a family member may move into the home and ostensibly receive payment as a caregiver but not actually provide the level of care paid for. Documentation for this care must be provided to VA, and it is reasonable for VA to question whether the services being purchased from a family member living in the household are legitimate. Such arrangements should be extensively documented and completely arm’s-length.

The care arrangements and payment for home care must be made prior to application and there must be evidence that this care is needed on an ongoing and regular basis. We recommend a formal care contract and weekly/monthly invoice billing for services. Money must exchange hands and federal law requires employment taxes must be withheld and there must be evidence of this. All of this documentation must be provided as proof to VA when making application for the pension benefit. Costs for these services must be un-reimbursed; meaning these costs are not paid by insurance, by contributions from the family or from other sources. VA will allow, however, family caregivers being paid by their loved ones, to turn around and pay the household bills for their loved ones to help defray the cost of the care.

Due to the need for a rating, documentation for annualizing care costs and the extensive proof needed to show the caregiver is indeed an employee of the care recipient, most people should not try this on their own. An attorney in this area should be sought to help with the application in order to avoid lengthy delays in awarding a benefit or a possible denial of benefits.

For further information and advice in any elder law matter, do not hesitate to contact me at 888-800-7442, or info@fnlawyerinnj.com.  Fredrick P. Niemann and Lauren Bercik have been accredited by the U.S. Veterans Administration to counsel veterans and their families in aid and attendance and pension benefits.

One of the most pressing needs for disabled beneficiaries is medical care.

Medical Insurance
It is crucial that the disabled beneficiary obtain some form of medical insurance. Options include the following:

• Private Medical Insurance. Typically, the only source of private medical insurance at regular rates is through the parent’s coverage with the parent’s employer. Parents of such child must make every effort not to lose their jobs.
• COBRA. The Consolidated Omnibus Budget Reconciliation Act of 1996 (COBRA) allows former employees and their dependents to continue the employer’s coverage for a limited period of time, commonly 18 months. However, if the employee became disabled within two months of the qualifying event causing him to lose medical insurance coverage, COBRA coverage may be extended for 29 months. If the former employee died, divorced, or became entitled to Medicare, then the employee’s dependents are eligible for 36 months of coverage.
• State-Mandated High-Risk Pools. Many states have high-risk pools to cover persons who are uninsurable in the private market. This coverage often tends to be very expensive.
• Medicare. Medicare is only available to persons under 65 if they are disabled and have 20 quarters of coverage. If they receive SSD, then two years after the determination of disability they are entitled to Medicare. Persons receiving Medicare should obtain a Medicare supplement policy. There is usually a very limited open enrollment period to obtain this coverage after which it becomes impossible to obtain because of pre-existing conditions.
• Medicaid. Persons receiving SSI also receive Medicaid. In non-SSI states having a Medically Needy program, persons qualify for Medicaid by spending down their income if income is above a certain amount. Some states have income caps. Other ways of obtaining Medicaid are through state Medicaid waiver programs, including various Kid Care programs available in many states. Eligibility rules vary. A Katie Beckett waiver program is very desirable, because the income and assets of the parent are not deemed to the children. Some states do not call their programs Katie Beckett, which is a specific categorically eligible group of Medicaid recipients, but the effect is the same because those state identify groups of children with disabilities and provide for Medicaid eligibility so the waiver services are available. Slots tend to be extremely limited.

Non-Covered Medical Expenses
Typically, Medicaid pays for 100 percent of covered expenses. However, very often, psychological services, certain types of testing and some special therapies are not covered. It is appropriate for a trustee to pay for these non-covered services. It is also appropriate for a trustee to pay for dental care, prescriptions, and podiatrist care.

Provider Non-Acceptance
Some providers do not accept Medicaid, because of the low reimbursement rate. It is difficult to find a dentist participating in the program. Some persons with disabilities choose physicians who do not accept Medicaid. It is appropriate for a special needs trust to pay for services from those physicians.

Out-of-Pocket
If the person with a disability receives Medicare, rather than Medicaid, there may be co-payments, deductibles and payments for services that Medicare does not cover. It is appropriate to pay for those costs from a special needs trust.

If you have any questions concerning Medicaid or a trust for a disabled or handicapped child, contact Fredrick P. Niemann, Esq. at 888-800-7442, or info@fnlawyerinnj.com.  He is happy to answer your inquiries.

Whether it is a palatial estate where Rockefellers and Vanderbilts would feel at home or a rustic cabin in the woods complete with an outhouse, a family vacation home often carries sentimental value that doesn’t show up on financial ledgers. That is all the more reason why owners of such homes should plan for the orderly transfer of the home for future generations. With the help of some professional guidance, owners can choose from a variety of options tailored to particular situations and priorities.

The issues that arise most often for second and subsequent generations concern how to allocate both the benefits and the burdens of the vacation home.

• Outright sale of the property to a third party is simplest, but be prepared for substantial capital gains if the property has been in the family long enough to appreciate in value;
• A simple bequest can be used to keep the home in the family, but, by itself, it may not address issues such as use and maintenance;
• A trust, in particular a Qualified Personal Residence Trust, has some tax benefits. The grantor gifts the property but retains a right to use it for a definite term. The value of the gift is calculated as the value of the property, less the retained interest. However, if the grantor does not outlive the retained term, the property will be included in the grantor’s estate;
• A limited liability company (LLC) has the benefit of protecting assets generally. If someone is injured on the property, the owner’s liability would be confined to the ownership interest in the property;
• A partnership has the advantage of a formal structure, but each partner would have to contribute.

Additional issues that arise most often for second and subsequent generations concern how to allocate both the benefits and the burdens of the vacation home, that is, the use of the home and expenses, including maintenance, insurance, and taxes. This can be spelled out in writing in as much detail as is desired, but it is not advisable to leave these matters to chance. There is the potential for discord and bruised feelings in even the most congenial families if, for example, one sibling is left out of the prime vacation times while shouldering more than his share of costs for maintenance and repair. Parents might head off at least some of these issues by setting up an endowment to cover ongoing expenses for the home.

Looking a bit farther down the road, whatever legal forms are used should provide a means by which one or more of the family members can sell his or her interest in the home to the remaining family members. Considering that there may be honest disagreement as to the property’s value, it makes sense to look for consensus by using two separate appraisals, one arranged for by the selling family member and one by the remaining owner or owners.

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

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  info@fnlawyerinnj.com.

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 info@fnlawyerinnj.com.