< Elder Law – Page 2 – McGinty & Belcher Salem Oregon

How could the changes in the Medicaid system effect my mother’s eligibility?

Answer:
I have heard that there may be changes in the Medicaid law. My mother, who is in poor health, has been making gifts to her grandchildren during the past couple of years. If she goes into long-term care, such as in a nursing home, are these gifts going to be a problem with eligibility for medical assistance to help pay for the cost of care?
Answer:
You are right about the changes. President Bush signed into law the Deficit Reduction Act of 2005. (“the Act”) which makes some significant changes to the Medicaid system. Following are a few of those changes:
1. The Act increases the “look-back” period. This is the period in which gifts that have been made by a person applying for long term care assistance are scrutinized. Under the old rules, a person who transferred or gave away assets for less than fair market value within 3 years prior to the Medicaid application could be assessed a penalty. The Act increases this “look-back” period to 5 years.
2. The Act also makes a fundamental change to how the penalty for making a gift is applied. Under the old rules, the Medicaid program imposed a penalty on persons making gifts during the “look-back” period. The penalty created a period of ineligibility for benefits and started when the gift was made. The Act changes that process so that the penalty starts from the date of application for medical assistance rather than from the date the gift was made. This change could have adverse consequences for many persons applying for long term care assistance who unwittingly made gifts during the last 5 years.

What should I do if my son’s name is on my checking account and he is being sued?

Question:
I have my son on my checking account so that he has access to my money and can pay bills. Recently, he has had a bit of a problem paying his own bills and is being sued by a credit card company. All the money in the account is mine and I can’t afford to lose it. Is there any problem for me by having his name on my account?
Answer:
Yes. You should take your son’s name off of your account as soon as possible.
If your son’s creditor gets a judgment against your son for the amount he owes, the creditor will then try to find ways of satisfying the judgment. One of the first things the creditor will look for is any bank accounts in your son’s name. The creditor can use the judgment to “garnish” any bank accounts in your son’s name. This “freezes” the account and you will not have access to your money to pay bills. Any checks that you may have outstanding may bounce and you may have to pay charges for “insufficient funds” even though you have money in the account. The bank may also charge you an administrative fee for having to go through the paperwork of the garnishment.
Even though the money in the account is yours, the creditor may argue that your son’s name on the account indicates that he is an owner of those funds and that he is entitled to some of the money in the account. The creditor may force you to go to court to prove that the funds in the account are totally yours and not subject to garnishment for your son’s judgment.
I often see older people placing a child’s name on their bank accounts as a way of planning for incapacity. However, as with all legal transactions, there are advantages and disadvantages which should be carefully discussed with an attorney prior to taking action. As in this case, placing someone on your bank account is not always the best or safest approach and can have unexpected and undesirable consequences.

Should I consider guardianship or conservatorship for my loved one?

Question:
My grandfather is becoming increasingly forgetful and is having difficulty paying his bills and taking care of himself. Should I be considering a guardianship or conservatorship for him?
Answer:
Not necessarily. Guardianship or conservatorship is not needed in every case where a loved one requires financial management or personal care help. Oregon has strict standards that must be met in order to establish a guardianship or conservatorship. To determine if a guardianship or conservatorship is appropriate you should always contact an attorney. The attorney will review with you the standards that must be met to establish a guardianship or conservatorship and help you identify reasonable alternatives to a guardianship or conservatorship. You may discover that there are less restrictive alternatives for meeting your grandfather’s needs short of a legal guardianship or conservatorship.

Is Power of Attorney enough to make medical decisions for someone?

Question:
My grandfather has been diagnosed with Alzheimer’s Disease. I am trying to help him with his affairs. I have a Power of Attorney for him but someone told me that I may need something else to make medical decisions for him. Is that right?
Answer:
A Power of Attorney will allow you to take care of necessary financial, banking, tax, legal, and other matters if your grandfather is unable to do so. In addition to the Power of Attorney your grandfather should also have an Advance Directive for Health Care. The Advance Directive allows a person to give health care instructions to his physician and to name a person (called a health care representative) to speak for him about medical treatment if he cannot speak for himself. To give a power of attorney or to appoint a health care representative, the person making the appointment must understand what he or she is doing. Once a person loses capacity, it is too late for that person to give someone a power of attorney or to appoint a health care representative. At that point, a conservator or a guardian can be appointed by the court if there is a need. You should speak with an Elder Law attorney to help you understand the options available to you and your grandfather and determine which of those options fits your situation.

My husband has recently been diagnosed with Alzheimer’s disease…

Question:
My husband has recently been diagnosed with Alzheimer’s disease. He has become quite forgetful, but is still in the early stages. We both agree that we should put our affairs in order. The problem is that we don’t know where to start. Do you have any ideas for us?
Answer:
You and your husband face a very difficult situation. The best advice I can give is that you plan sooner rather than later. There are a number of things that you and your husband should be thinking about. I will address a couple of the most important.
First, your husband should execute a Durable Power of Attorney while he is sufficiently competent to do so. A Durable Power of Attorney appoints someone to act as his agent or attorney-in-fact, to take care of necessary financial, banking, tax, legal, and other matters if he is unable to do so. Executing a Power of Attorney now may save the need of going to court for a conservatorship in the future.
Second, your husband should complete an Advance Directive for Health Care. This is a legal document in which a person names a health care representative and can also state the type of health care treatment he wishes to receive if he can no longer make decisions himself. This again may save the need of going to court for a guardianship in the future.
You also need to consult an Elder Law attorney concerning your estate plans and long term care options. This would include advice regarding Medical Assistance Rules and payment for long term care costs should your husband require care in the future. You need a plan in place that provides for your husband’s care should you predecease him. At the same time, should you die before your husband, you would avoid having your joint estate pass to your husband directly if he is incapacitated.

How are Income Caps used?

An Income Cap Trust is a technique that is used to make a person “income” eligible for Medicaid by assigning that person’s income to the Trust. The Income Cap Trust does not require any advance planning, it is not a long range planning tool, and is typically used in a crisis situation when the person applying for Medicaid requires care.

Who can create an Income Cap Trust?

If the person applying for Medicaid benefits is too ill or disabled to sign a trust, his or her agent under a Durable Power of Attorney can create the trust. If the person is too disabled to understand that he or she is creating a trust, and has not appointed an agent to act as power of attorney, it

How do I establish the Income Cap Trust Account?
Once the trust is established, the next step is to create a bank account in the name of the trust. Only the income of the person receiving Medicaid (known as the trust “Beneficiary”) can be placed in the account. It may not contain any other resources.

How are the funds in the Income Cap Trust spent?
Complex federal and state rules govern how the income in the trust is to be spent. In Oregon, during the life of the Beneficiary, the income in the trust is used each month to pay the following expenses, in the following order of priority:

A. Personal Needs Allowance/ Maintenance Standard: A fixed amount to the Beneficiary for the Beneficiary’s personal needs plus, for people receiving in-home care or assisted living or foster home care, an amount for room and board, which may be payable to the care facility.

B. Administrative Costs: $50 per month to cover the administrative costs associated with the maintenance of the trust. These costs may include any bank service charges,
trustee fees, preparation of yearly tax returns, copy charges, postage, or tax preparer fees, and any income tax attributable to income placed into or generated by the trust.

C. Spouse and Family: A monthly support allowance for the spouse and family.

D. Health Insurance: The health insurance premium for the beneficiary and the beneficiary’s spouse.

E. Other Reserves: Other incurred medical care costs that are not reimbursed by a third party.

F. Patient Liability: Any remaining funds are paid to the facility. This is the amount of Beneficiary’s income to be paid toward his or her care.

When the beneficiary dies, any remaining funds in the Trust must be paid to the State.

What is the cost to create an Income Cap Trust?
Like most things, the amount of time and effort involved in setting up the Income Cap Trust will effect the cost. The cost can vary, especially if court time is involved to establish the trust or to have a conservator appointed. Also adding to the cost is the time the attorney spends drafting the trust and creating a distribution schedule that complies with the above mandatory distribution standards. Establishing an Income Cap Trust is not an inexpensive proposition. However, using a “cost versus benefit analysis,” even though the process involves an up-front cost, making the person eligible for benefits will repay the costs of establishing the trust in a very short period of time.
Where can I get more information or help with an Income Cap Trust?
An Elder Law Attorney or an attorney experienced in Medicaid can answer any questions you have and determine if this type of a trust is an option for you