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 info@fnlawyerinnj.com.

Many times the children of elderly clients ask whether they can be held responsible for Mom or Dad’s long term care costs.  My answer always was that there wasn’t anything to worry about unless you take your parents money.  That no longer appears to be the case.

A recent case in Connecticut highlights how the new Medicaid laws passed as part of the Deficit Reduction Act of 2005 are really hurting residents and nursing homes alike and now potentially also affecting other family members.  In that court case, the nursing home resident’s son signed the admission agreement on behalf of his mother.  As in most nursing home agreements Son was asked to sign as responsible party, which he did not do.  Nevertheless, Nursing Home advised him verbally that he was the responsible party.

Son then applied for Medicaid benefits on behalf of Mom.  Son did not, however, follow through on the application process in a timely manner.  He failed to provide all the information and documentation that the State needed and he did not spend down Mom’s assets quickly enough, delaying the application’s approval.  As a result, months of benefits were lost, never to be regained, benefits that Nursing Home would have received.

Nursing Home sued Son on a breach of contract claim.  It claimed that Son undertook an obligation on Mom’s behalf, when he signed the admission agreement, to promptly pursue Medicaid benefits.  Son, in response, argued that he never signed the agreement so there was no contractual obligation on his part.  The court sided with Nursing Home, finding that an oral contract was created between the two parties and that Son violated it by not conscientiously following through.

A good result for the nursing home, right?  Well, not really, when you account for the time and money it took Nursing Home to get the judgment.  It then has to collect on that judgment, assuming Son doesn’t appeal the decision, which will cause the matter to drag on even further.  And it certainly wasn’t a good result for son, who lost and now is responsible for paying Mom’s bill.  

So how could this have turned out better? If Nursing Home had encouraged Son to retain an elder law attorney to represent Mom in the Medicaid application process, it would have received a regular income stream with a timely and correctly filed application.  Sure, there is an expense involved in hiring someone.  But in the end Nursing Home would have received Medicaid benefits when it should have and Son would not be responsible for paying nursing home.  A winning result for all.

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.

“According to some sources, 60% of us will need long term care sometime during our lives. It is important for all of us to prepare for that day when we will need to help loved ones with elder care or we will need elder care for ourselves.”

“It is simply a fact of life to prepare financially for unexpected disasters by covering our homes, automobiles and health with insurance policies and to provide funding for our retirement. But no other life event can be as devastating to our lifestyle, finances and security as needing long term care. It drastically alters or completely eliminates the three principal retirement dreams of elderly Americans, which are:

1. Remaining independent in the home without intervention from others
2. Maintaining good health and receiving adequate health care
3. Having enough money for everyday needs and not outliving assets and income

Yet, it is our experience that the majority of the American public does not plan for the devastating crisis of needing elder care. This lack of planning also has an adverse effect on the older person’s family, with sacrifices made in time, money, family lifestyles and even affecting the family’s or caregiver’s medical and emotional health.

Because of changing demographics and potential changes in government funding, the current generation — more-than-ever — needs to plan for long term care.

If you have spent time helping a parent or loved one cope with a disability resulting from aging, you know the frustration of balancing what you feel they need to do and what they want to do. Communication is strained at times, because after all, you are the child and they the parent, yet physically and mentally the rolls have changed.

When you make directives, assignments and arrangements in advance of needing elder care, then everyone involved can follow the prearranged care plan.

As an example, Jefferson Simpson wrote in his care plan that if dementia or Alzheimer’s inhibited his mental abilities to communicate or recognize his surroundings, he wished to be in a respectable facility and only asked that he be visited and brought chocolates. To his children this request seemed silly at the time, but when his mental capacities did diminish, the instructions were there. No one had to wonder if they should try to take care of Father Jefferson at home and how they would do it. Without quilt or question they placed him in a respectable facility that took care of his needs. All they had to do was make loving visits, and of course they brought chocolates.

In order for Jefferson’s simple request to happen, he had made financial, legal and personal long term care plans years before.

What do you want your children or friends to do on your behalf?

When it comes time for them to help, what if you can’t say what you want because of a physical or mental disability? This is where a written long term care plan comes into effect.
 
Do you have a financial plan or long term care insurance? Retirement savings can disappear quickly when used for care services.
 
Where is your paperwork; insurance policies, living will, medical directives, Armed Services discharge or disability papers? Is there someone designated to know the location?
 
What are the legal documents that are needed for power of attorney, estate planning and disbursement of assets? When do they have to be completed?
 
What types of care services and facilities are available and what are the costs?
 
What will government programs pay for and how do you qualify?
 
There is a lot you can do now to put together a plan for your own long term care. You may have limited resources in the future or health problems that will inhibit your ability to take care of things you could do now. For example.
 
James and Cindy want to be able to stay in their home as they age. In order to do this, when they were in their 40’s they took out a long term care insurance policy that will pay for home care if it is needed. The policy will also pay for nursing home costs as a care option. With taking the policy at a younger age and in good health the monthly payments are low. Extra funds can now be put away for retirement without worries of having to deplete savings for care costs.
 
Or consider Sarah’s following experience:
 
After taking care of her own parents for many years, Sarah realized the importance of making, in advance, a plan and preparations for herself. She saw all of her parents’ assets dissipated in order for her father to qualify for Medicaid nursing home coverage. She didn’t want the same thing to happen to her. She took the time to create her own plan on paper– expressing her wishes for her own care. A trip to her attorney provided all the legal documents and estate planning she wanted to be in place to insure care for her and an inheritance for her children.
 
There is much to learn about long term care and there are a lot of new services and programs available to draw from.
 
The National Care Planning Council has gathered together an overall review of government and private long term care services both on the Council website, www.longtermcarelink.net and in their book The 4 Steps of Long Term Care Planning.

The 4 Steps of Long Term Care Planning provides comprehensive information about long term care planning. The design also allows you to record personal information, family agreements and directions on 20 planning sheets at the back of the book. Using this book as a single-source repository for information and directions makes it much easier for you or your care coordinator to carry out your wishes when the need for care occurs.

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.

When money is running out and the family is faced with the need to apply for Medicaid to pay for long term care the question becomes “should we do this ourselves or should we hire an elder law attorney to help?”  Sometimes the hospital or the nursing home tells the family they will qualify without too much difficulty.  Many places strongly encourage families to hire an experienced Medicaid attorney.  So they try to do it themselves.

The pitfalls of going it alone are many and varied, especially since the latest round of Medicaid changes effective February, 2006 made the laws and regulations in this area much more complicated.  Timing is critical.  By that, I mean to say, that when you spend down assets and what assets you have at a certain point in time will have an impact on qualifying for benefits.  Let me illustrate by way of example.

John and Mary were in their 80’s and living in their home, which they owned.  They had other countable assets of approximately $50,000.  John and Mary had done no planning for their long term care needs.  John became ill in October, was admitted to the hospital and then to a nursing home for rehabilitative services.  His condition was such, that he could not go home and needed to remain in the nursing home on a long term basis, at a private pay cost of $10,000 per month.

Mary was told by various personnel at the hospital and the nursing home that based on their level of assets “John would qualify for Medicaid” in January and they arranged for her to meet with a Medicaid caseworker to make an application for benefits.  Being stressed out by the reality that John would not go home and uncomfortable with the complicated process she did not understand that for John to qualify she would have to spend down a portion of their assets to get below a certain dollar amount.  In her case that number was $27,000.  The caseworker explained this to her at the interview but, quite frankly, she was receiving so much information that she really didn’t fully understand how important that was.

She waited for medical and nursing home bills to come in.  She figured she owed the money so it was as good as spent.  In other words, in her mind she didn’t have $50,000.  They owed $28,000 so she had $22,000 left.  Not true under Medicaid rules.  Until she wrote those checks, John and Mary were “over-resourced”, Medicaid’s term for having too much money to qualify for benefits.  If you are over-resourced by even $1.00 you won’t get Medicaid for that month.  You will never get Medicaid for that month.

Had she paid those bills right away John would have qualified for benefits in January.  Instead, she didn’t write those checks until June, meaning John didn’t qualify for Medicaid until July.  Great, so Medicaid picked up the nursing home bill in July.  There was one small problem.  Who was going to pay the nursing home bill for January through June?  The answer was John and Mary, and at the private pay rate of $10,000 per month that was $60,000.  The shame is that this didn’t need to happen.

This example illustrates the pitfalls of going it alone.  The rules are quite complicated and timing is critical.  You don’t want to be left with a huge nursing home bill which you can’t pay.  The nursing home doesn’t really want to be in the position of suing their residents.  Having a knowledgeable elder law attorney representing you can save huge dollars and huge amounts of stress.

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.

“When my grandmother developed dementia, my parents would try to get answers to questions about things like Medicare, benefits, insurance, Medicaid,” he said.  “We would get little snippets of information, a few answers, but no one seemed to be able to put it all together.  I thought there was a crying need for someone to do it right.”

This experience moved Niemann years later to become more involved in elder law and life care planning for the elderly.  Today, his law firm, Hanlon Niemann in Freehold, New Jersey focuses on issues affecting seniors such as elder law, Medicaid, Medicare, guardianship, asset and income protection planning, estate planning,  and how to find a long-term residence including assisted living, nursing home or independent care.

The firm has especially focused in on a growing need – people 80 and older who make up the fastest-growing segment of the U.S. population.

“The special needs of these clients are significant and highly complex,” said Niemann.  “If you’re going to help service these special and vulnerable people you counsel, you must have a substantive grasp of the law, including rules related to Medicare/Medicaid and other government benefits.  It also takes a sensitivity of how to deal with people on an emotional level.” With many of his elderly clients confused by the intricacies of Medicare and Medicaid, their grown children also may feel frustrated.

Niemann said his firm employs a compassionate and inclusive approach.  For example, he said his elder clients might be under tremendous stress.  To put them at ease, he will spend 30 or 40 minutes discussing family and related topics before getting down to legal issues.  “How to find a long-term care residence, especially a nursing home is a huge issue for them and their families,” he said.

“How to get good care at home or elsewhere is another issue – and how to pay for it without going broke.”  People are afraid of becoming destitute.  They remember the effects of the Great Depression.

Another example of Niemann’s unique approach to help the elderly is having a registered nurse, licensed nursing home administrator and social worker on staff.  Their duties can, when appropriate, include participating in care-planning sessions, evaluating existing care plans and assessing how the nursing home resident is progressing under that plan.  In addition, elderly clients are apt to listen to the advice of Niemann’s firm because of the presence of a registered nurse and licensed nursing home administrator and social worker.

“Our staff is very knowledgeable and each adds a lot to the discussion about an aging client’s best interests.  “We like the idea of having clinical issues, legal issues and financial issues on the table all at the same time,” Niemann said.
 
If you have any questions about the contents of this article, please call Fredrick P. Niemann personally at 732-863-9900 or e-mail him at fniemann@hnlawfirm.com.

A reverse mortgage allows a homeowner who is at least 62 years old to use the equity in his or her home to obtain a loan that does not have to be repaid until the homeowner moves, sells, or dies. The new law, which goes into affect October 1, 2008, increases the borrowing level on reverse mortgages. The national limit on the amount a homeowner can borrow will be $417,000. The limit can be increased to $625,000 in areas with high housing costs. The amount a homeowner can actually borrow depends on the home’s value, location, interest rates, and the age of the borrower. Currently, the range in loan limits is between $200,160 and $362,790.

The new law also offers some protections for seniors. High fees and aggressive marketing have been cited as problems with reverse mortgages. Under the new law, fees will be capped at 2 percent of the first $200,000 borrowed and 1 percent on the balance, with a maximum of $6,000 in fees. In addition, the law prevents lenders from requiring borrowers to purchase insurance, annuities, or other products as a condition for getting a reverse mortgage. Lenders are also prohibited from working with other professionals who are trying to sell seniors financial products as part of the lending process.

For a U.S. News and World Report article on the reverse mortgage provisions in the new housing law, click here.

• Take an inventory. The first thing you and your partner should do is each take an inventory of your assets and debts and share it with the other person. Don’t forget to include life insurance policies and retirement plans in your inventories. It is important to be open and honest about money if you want to prevent bad feelings in the future.

• Decide how you want to handle finances. Once you know what you are dealing with, then you need to decide if you want to combine (or not combine) assets when you are married. For example, if one partner is selling a house and moving in with the other partner, will he or she contribute to the cost of the house? If one partner has significant debt, you may not want to combine finances or make any joint purchases. These decisions need to be made upfront so everyone is clear on what to expect.

• Decide what you want to happen when you die. You and your future spouse need to figure out where each of you wants your assets to go when you die. If you have children from a previous marriage, this can be a complicated discussion. There is no guarantee that if you leave your assets to your new spouse, he or she will provide for your children after you are gone. There are a number of options to ensure your children are provided for, including creating a trust for your children, making your children beneficiaries of life insurance policies, or giving your children joint ownership of property. Even if you don’t have children, there may be family heirlooms or mementos that you want to keep in your family. Again, open discussions can prevent problems in the future.

• Consult an elder law or estate planning attorney. Even if you don’t have a lot of assets, you should consult an attorney, especially if you have children. You will definitely need to update your will. You may also need to update or create other estate planning documents such as a durable power of attorney and a health care proxy. If you have significant assets, a prenuptial agreement may be appropriate. In addition, the attorney can help you decide if a trust is necessary to protect your children’s interests.

• Change your beneficiaries. You may want to change the beneficiaries on your life insurance policy, annuity, and/or retirement plan. If you are divorced, however, you may not be able to change some of the beneficiaries. Bring your divorce decree with you to the attorney so he or she can make sure you do not violate the decree. If you can’t change your beneficiaries, you may want to buy additional life insurance or retirement plans that will include your new spouse.

The most important thing to remember is to be open and honest with your future spouse and your family members about your wishes.

Some of the highlights of the 2007 NAELA Advanced Elder Law Institute, “It’s Now or Never!” included:

• Changing issues in Veteran’s benefits facing our aging veterans.
• Guardianship and elder abuse issues and ways the “system” can be improved to help our elders retain their dignity and remain safe.
• Cases involving patients who have suffered traumatic brain injury.

About NAELA

Established in 1987, the National Academy of Elder Law Attorneys (NAELA) is a non-profit association that assists lawyers, bar organizations and others. Members of NAELA are attorneys who are experienced and trained in working with the legal problems of aging Americans and individuals of all ages and disabilities. The mission of the National Academy of Elder Law Attorneys is to establish NAELA members as the premier providers of legal advocacy, guidance and services to enhance the lives of people with special needs and people as they age.

Mr. Niemann was extensively quoted, along with a client of the firm, on the reasons that cause people to prepare wills, trusts and estate planning documents.

Mr. Niemann, a 30 year practicing attorney with extensive experience in elder law, asset protection, estate tax reduction and counseling of individuals and family businesses, was recommended to the Asbury Park Press as an attorney with significant experience in preparing estate plans, trusts and life care planning documents, particularly for individuals with sudden health setbacks like Alzheimer’s, dememtia, stroke, Parkinson’s, etc.

The firm is conveniently located in the central New Jersey County of Monmouth County on U.S. Highway 9, Freehold Township, and has a statewide practice.