elder law

My Spouse Needs Nursing Home Care -- Do We Need to Divorce?

When I am asked about nursing home care for married people, one of the questions that almost always comes up is this: “Do we have to get divorced?” Or, in a similar vein: “Should we get divorced?”

There is a misconception about long-term care that has been around for a long time, which is that a married couple should or must get divorced when one spouse needs care. It’s like an urban legend that just won’t die. And it adds unnecessary stress in a situation that is already very stressful for families. So, let me put it to rest once a for all:

No, you don’t need to get divorced.

And, most people shouldn’t get divorced.

Here’s why: If you need to rely on Medical Assistance (also known as “Medicaid”) to help pay for long-term care in a nursing home, assisted living facility, or at home, the program requires the ill spouse to spend their assets down to just $3,000. But the program also provides for a community spouse asset allowance that is much greater than that. This year, the community spouse asset allowance is $126,420, and the figure is adjusted annually based on the rate of inflation.

In addition, there are certain benefits to staying married. For example, the well spouse can remain living in the marital home, and the home will not be counted toward either spouse’s asset limit. The well spouse may also receive an additional income allocation from the income of the ill spouse if the well spouse’s income is too low, which is helpful in situations where the ill spouse was the primary earner and may be receiving a larger amount in pension or social security income. The well spouse may also be allowed to keep additional income producing assets if their income falls below a certain minimum threshold. Moreover, the program allows married couples to annuitize assets, converting available assets to an income stream for the well spouse, and the well spouse’s income is not required to be spent on care costs. So, for all these reasons, staying married is often more advantageous than getting divorced.

So, why does the myth that people have to get divorced persist? It may be because in some unique situations, divorce is the best option. For example, in a second marriage where the couple signed a prenuptial agreement, a divorce may provide for an appropriate redistribution of assets that better protects and provides for the well spouse. But these cases are generally rare and require the advice of a knowledgeable attorney to determine if divorce is appropriate. In most cases, divorce is simply not the best option.

If you or someone you knows is in this situation and is wondering what to do, contact an experienced elder law attorney for advice.

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What Is Elder Law?

When I introduce myself as an attorney practicing elder law, the next question I usually get is, “what is that?” Recently, someone asked, “what’s the difference between ‘elder law’ and ‘estate planning?’ Isn’t it the same thing?”

Although there is certainly some overlap between the disciplines of estate planning and elder law, the two are not the same. In this post, I’ll briefly summarize the differences and why those differences are important.

Elder Law is Interdisciplinary

Instead of focusing on a field within the practice of law, elder law takes as its focus the whole person. Traditionally, elder law is a practice that crosses disciplinary boundaries. For example, an elder law attorney may have experience with estate planning, health care law, landlord/tenant law, real estate law, and personal injury. That’s because an elder client may present with a number of issues, such as a person who is injured in an assisted living facility, has issues with the facility’s housing agreement, and also has trouble paying for care. These issues cross over into personal injury law, housing law, and health care law. Not all elder law attorneys practice in all of these disciplines, and some may focus in a certain area, but often an elder law attorney has some familiarity with all of these issues and can help the individual client navigate similarly complex situations. By focusing on a client population instead of an abstract discipline, elder law attorneys gain skills and experience in the challenges that face this population and how best to assist clients who are similarly situated. With these unique skills, an elder law attorney can provide superior service to seniors and their families.

Estate Planning, Plus

In my practice, I sometimes think of elder law as “estate planning, plus” or “estate planning 2.0.” Increasingly, traditional estate plans are being complicated by the high cost and unpredictability of long term care. In part, this is due to demographic changes, like the fact that aging “baby boomers” are greatly increasing the number of people in need of long term care. And in part the change is due to the ever increasing cost of care. The average cost of nursing home care in Minnesota is over $7,000 a month, and for memory care it can be twice that. Estimates indicate that around half of all people will require long term care services, which means more and more people need to factor long term care costs into their retirement planning and estate plans.

A traditional estate planning attorney primarily deals with wills and trusts and is concerned mainly with minimizing the cost of transferring assets at death, which might include tax planning or probate avoidance. But a traditional estate planning attorney may not understand the impact that an illness requiring long term care may have on a client’s intentions to pass assets on to the next generation, and may not know how to leverage the resources available to minimize the financial impact of necessary care. That’s where an elder law attorney can make a difference. For a client who is concerned about the impact that the need for long-term care may have on their business succession plan or their wealth transfer objectives, an elder law attorney can provide invaluable guidance.

Peace of Mind

An elder law attorney can provide their clients with a sense of assurance that, if long term care is anticipated, all necessary care will be provided without totally derailing the clients’ other objectives, such as providing for a spouse or disabled child, or leaving a legacy for the next generation. When faced with a diagnosis like dementia or Parkinson’s, clients often fear that they will lose everything they own or will have to divorce their spouse. The elder law attorney can help the client in this situation to develop a plan to ensure that their quality of life will not suffer even though their cost of care increases dramatically. An elder law attorney can help clients navigate the maze of complicated healthcare programs, rules, and regulations, and provide guidance on care and housing alternatives to meet a client’s goal to age in place as long as possible. With the tools that an elder law attorney can provide, clients can feel empowered to take back control of the process and make a plan that suits them.

If you’re interested in talking with an elder law attorney to find out more, please contact me or someone at my firm, Fafinski Mark & Johnson, PA, for assistance.

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2019 By the Numbers: Key Figures in Estate Planning and Elder Law

2019 By the Numbers: Key Figures in Estate Planning and Elder Law

A summary of the key facts and figures you need to know for estate planning and long-term care planning in 2019.

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How to Talk to Family About Long Term Care Needs

The holidays are fast approaching and soon we’ll all be gathering together with our families to share meals and spend rare quality time with our loved ones. It can be a fun, exciting, and stressful time of year. For many people, the holidays are when we first notice that there may be problems in our families, especially as parents or grandparents grow older. You may notice that the home is not as clean and tidy as you remembered, or that mom or dad is having a lot more difficulty moving around the house. Maybe the laundry isn’t getting done because it’s on a different floor that is no longer accessible. Or maybe there isn’t any food in the refrigerator because driving to the store is getting too difficult. Or perhaps important appointments or medications are being forgotten or skipped.

Most people need more support as they grow older, but because we live in a culture that emphasizes independence above all else, it’s extremely difficult for people to ask for help or even to accept help when it is offered. This can make it very hard for family members to raise concerns about health, safety, or isolation with their elder relatives. But the truth is that these conversations are too important not to have, even though they are difficult. Most people when asked say that they want to remain at home as long as possible and even die at home. But most people don’t die at home. Why? Because they don’t tell their loved ones what they want when they’re able to express their wishes, and they don’t develop a plan for making their wishes a reality. As the saying goes, if you’re not making a plan, then you’re planning to fail.

So, how can family members facilitate these important conversations around the holidays?

First, it’s important to acknowledge that no two families are alike. What works for one person or family might not work for you. Consider how you have broached difficult issues in the past. What worked (or didn’t work) then? What can you learn from these past experiences that you can apply to this situation?

Second, remember that your elder relative is an independent adult, even if they now need help. There is a tendency in many families to treat their elders more like children than grown-ups simply because they may have developed some cognitive difficulties or may require assistance with activities of daily living. But with the proper support, our elders can still make appropriate decisions on their own. “Supported decision-making” is an emerging concept that seeks to balance respect for the autonomy the individual with the need to protect the individual’s health and safety. Remember, if we’re lucky we’ll all get old someday, and when it’s your turn, how will you want to be treated? Try to find a way to support your loved-one’s wishes while also ensuring their health and safety is provided for.

Third, if at first you don’t succeed, try again. It can be difficult for someone who may be struggling mightily to hide the fact that they need help to be confronted by a child or grandchild with an offer of assistance or a remark of concern. They may feel shame, sadness, or anger about their situation, which may cause them to be defensive or in denial. But by showing genuine concern and allowing the person time to process their emotions and reactions, you may make more progress than if you simply confront the person and never bring it up again.

Fourth, get help if you need it. Sometimes enlisting a trusted advisor or friend to speak with your loved one can help. Maybe your elder relative doesn’t want to talk to you about it, but they would talk with their pastor or rabbi, a close friend, their banker or lawyer, their physician, a different relative, or someone else they trust. Most people have at least one person that they trust and whose opinions they respect and admire — seek out that person to help you.

Finally, use “I” statements instead of “you” statements. Instead of saying, “you’re forgetting to take your medication and you’re driving me crazy!,” try saying, “when you forget to take your medications, I get afraid that you will become seriously ill and I’m afraid of losing you and seeing you suffer.” Using “I” statements shifts the conversation away from judgment and blame. And by depersonalizing the problem, “I” statements open up space for both sides to come up with creative solutions without anyone feeling defensive.

Once you are able to identify your loved one’s wishes for their care as they age, it’s important to take the next step and make a plan. How will you pay for care if they want to remain at home? Under what circumstances would you all agree that staying at home will no longer work? If transitioning out of the home, what housing with services options are the best for your loved one? Are there assets that need to be protected from long term care costs to provide for other family members? Engage the services of an elder law attorney to help you answer these questions and make a plan that honors your loved one’s choices and ensures that they’ll be safe and healthy.

And, may you and all your loved-ones share a safe, healthy, and happy holiday season!

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Elder Law Basics Series: Medicare vs. Medicaid

This post is the first in a series that I’m calling “Elder Law Basics.” The idea is to give a brief introduction to the essential elements of a law practice focused on serving the needs of the elders in our community, and to help readers understand what is meant by the term “elder law.” Elder law encompasses many things because the practice is focused on a population not on a distinct set of laws. But because the practice spans so many disciplines that we usually think of as separate — like estate planning and landlord-tenant and healthcare — it can be confusing to understand what an elder law attorney actually “does.” (By the way, “agriculture law” suffers from the same form of confusion. It too is interdisciplinary in scope and focuses on a population — farmers — rather than a particular legal discipline. What can I say, I like to wear a lot of different hats!)

I’d like to start out this first post by focusing on a health-law aspect of my elder law practice, and a topic that generates a lot of confusion and misinformation in the broader community. I’m talking about Medicare and Medicaid.

A lot of people confuse Medicare and Medicaid, but they are two separate healthcare insurance programs that originate with the federal government and involve some administration at the state level as well. Medicare is a health insurance program primarily for people over 65, although people who are permanently disabled or have certain diseases may also qualify for insurance coverage through Medicare. Medicare has four parts: Part A, which is known as “hospital insurance,” Part B, which is known as the “health insurance” part and covers some preventive care; Part C, which is “Medicare Advantage,” a sort of hybrid of Parts A and B; and finally, Part D, which is prescription coverage. Medicaid is also a health insurance program, but it pays for healthcare when a person can no longer afford to do so. A person may qualify for Medicaid if their income is too low, or if they’re over 65 or disabled and require long term care but cannot afford to pay for it. There are income and asset limits to qualify for Medicaid, and I’ll discuss those in a later post.

For now, I want to highlight some things about Medicare that most people aren’t aware of. First, you might not know that if you’re 65 and receiving Social Security, you’ll be automatically enrolled in Medicare Parts A & B. But what about people who are still working at 65? Do they need to enroll? The answer is that it depends. If you’re actively working and receiving health insurance through your employer (or your spouse’s employer), and if the company has more than 20 employees, you do not need to enroll in Medicare. But, if the employer has fewer than 20 employees, Medicare will still be considered the primary payer, and you should enroll to avoid a penalty. If you’re 65 and not collecting Social Security yet, it’s a good idea to talk with a professional about whether you should be enrolling or not so that you don’t lose coverage or have to pay a penalty.

In addition, Medicare Part A pays for hospital stays (up to 150 days), and skilled nursing facility stays that follow at least a 3-day inpatient hospital stay (up to 100 days). When it comes to skilled nursing care, many people are told by their healthcare provider that Medicare will stop paying for skilled nursing care if the patient does not show improvement. That is not true. According to a recent settlement agreement with the Centers for Medicare and Medicaid Services, there is no legal requirement that a patient demonstrate improvement for Medicare to continuing paying for care. Medicare must continue to pay for care so long as it is medically necessary for up to a maximum of 100 days.

Many people also need home health care due to age-related illnesses or after a hospital stay. Many people and care providers don’t realize, however, that Medicare Part A also pays for in-home care. So long as the care is ordered by a physician and the patient is “homebound,” which simply means they need assistance with moving (for example, a cane, walker, or wheelchair), Medicare will pay for up to 28 to 35 hours of in-home care per week, and there is no limit on how long the person can continue receiving care at home.

One big issue that has come up in Medicare cases over the years is something called “observational status.” In order to qualify for Part A coverage for a hospital stay or for skilled nursing care following a hospital stay, the patient must be considered in in-patient (not out-patient) care. Many hospitals are categorizing patients as out-patient by putting them on “observational status.” Hospitals may be afraid that they will lose money on Medicare patients, so they avoid this by making the patient’s hospital stay not qualify for Medicare coverage. Since most patients have no way of knowing whether they’ve been admitted as in-patient or whether they are on observational status, all patients are entitled to a “Medicare Outpatient Observation Notice” (MOON) within 36 hours of hospitalization. Patients on observational status can and should dispute their status with their care provider.

If you or a loved one have questions about Medicare or Medicaid, feel free to give me a call or contact my firm for more information.

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New Veterans Administration Pension Benefit Rules Went Into Effect October 18

The Veterans Administration just rolled out sweeping new eligibility rules for veterans and their spouses who require long-term care. The rules apply to needs-based pensions, such as Aid & Attendance, which is a program that helps veterans and their families to offset the cost of out-of-pocket medical expenses. For example, a veteran or their spouse who receives care at home or in a facility can receive additional money each month from the Aid & Attendance pension if their income falls below a certain threshold as a result of out-of-pocket medical costs.

Until this month, in order to qualify for Aid & Attendance, the government only took into account a family’s monthly income and medical expenses. Although there was a ballpark maximum asset amount a family could have, there was no hard and fast asset limit. Better yet, there was no lookback period for gift transfers and no gift penalties imposed, which made the program more attractive compared to Medical Assistance (Medicaid). Now, that is no longer the case.

The new rules establish a maximum “net worth” limit, which takes into account both assets and annual income of the veteran and their spouse. That net worth limit is pegged to the community spouse resource allowance under Medicaid, which this year is $123,600. If a veteran and their spouse (if married) have annual income (less out-of-pocket medical expenses) plus total assets in excess of this asset limit, they can no longer qualify for Aid & Attendance. They will have to either reduce assets or reduce income (keeping in mind that an increase in care costs can have the effect of reducing income), in order to qualify. The veteran or spouse’s primary residence, including 2 acres surrounding the home, is excluded from the asset limit.

In addition, the new rules impose a 36-month lookback period for transfers of assets for less than fair market value. (This is less stringent than the 60-month lookback period for Medicaid.) The penalty period is calculated by taking the sum of all gift transfers made within the lookback period and dividing it by the maximum monthly pension amount, which determines the number of months that the veteran or spouse is ineligible for VA pension benefits. A penalty period begins to run on the first of the month following the date of the last gift transfer. Only gift transfers that result in financial eligibility are penalized, however; if the veteran or spouse was already below the net worth limit, or if they were close to it, the penalty is reduced or can be zero depending on the circumstances.

The takeaway: Veterans and their families who are considering applying for Aid & Attendance benefits through the VA should consult a VA-accredited attorney like me as soon as possible to determine whether they need to wait to apply due to the new transfer penalty rules and whether they meet the new net worth limit. Please contact me if you have questions.

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Medicaid Estate Recovery in the News

Until recently, Minnesota was one of the states that recovered not just long-term care services but all Medicaid services provided to persons 55 and older.  But no one really noticed.  Why?  Because until 2014, to be eligible for recoverable Medicaid services you had to meet strict asset eligibility rules.  For instance, for a person to qualify for long-term care services, you cannot have more than $3,000 in available assets.  For these folks, estate recovery didn’t seem so bad because there wasn’t much to recover at the end of that person’s life.  But in 2014, Minnesota participated in the Medicaid expansion under the ACA (“Obamacare”).  This expansion lifted the asset limitation for folks under 65, greatly expanding the number of people who qualified for insurance paid for through Medicaid.  Suddenly, many more people were enrolled in a program for which estate recovery rules applied.

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