There are a variety of uses for Special Needs Trusts and they have various names that correspond with them. It is essential that all clients are asked about relatives with special needs, particularly if they are receiving Public Benefits, such as Medicaid, Supplemental Security Income from Social Security or HUD Section 8 Housing benefits. If the special needs relative suddenly receives an unplanned inheritance, by will or through probate, they may lose their Public Benefits and have to hire an attorney to help them get these benefits restored. All of my wills and trusts have provisions for Special Needs Trusts embedded in them, in order to plan for a possible disability at a later date, when an heir may need their Public Benefits sheltered from an inheritance.(more…) Read More...
My wife, Amy, and I became enamored with the wonderful pie at Lulu’s Café in Milwaukee after riding our bicycles around the lovely Wisconsin farm country all day. Every chance we get to try a new pie place, we seize it. We now include our pie loving son, Gabriel who enjoys ordering his own slice and doesn’t mind trading a bite here and there. We first encountered the First Slice Pie Café while driving up Ravenswood and stopped into their café tucked into an art gallery for a slice of their signature sour cherry pie. It was outstanding and we couldn’t help but notice people lining up for their weekly subscriptions to First Pie’s meals to go. It turns out, First Slice Pie Café is a non-profit organization founded by woman named, Mary Ellen Diaz, a first rate chef, trained at l’Ecole des Arts Culinaires in Lyon, France. Ms. Diaz has built her organization as a job training program after she volunteered in a soup kitchen and stunned the people there with her delicious soups. She has a program she calls “The Shareholders Program” with over 100 families subscribing and receiving home-cooked meals on a weekly basis. First Slice Pie Café recently placed in the top 10 of all apple pies in the country in Food and Wine Magazine. It is heavenly to a pie fancier.Read More...
Elder Law is a broad area of practice that is focused holistically on older individuals and their families. This practice area came about to address an aging population that is increasing in the United States. My concentration on Elder Law as an attorney in Evanston is devoted to long-term care planning, particularly as it intersects with Estate Law and the need to establish a trust to protect an elder’s assets for their heirs.
Most people would like to remain in their homes as they age in place and my practice helps clients find legal options and benefits to fulfill this goal. One key item for assisting these elders is to provide them with Powers of Attorney for Property and Health Care. The POA for Property that I use has expanded powers to enable the agent to accomplish asset protection and a wide array of actions to make Guardianship unnecessary. Guardianship can become necessary where the elder becomes psychotic and revokes all of their agents on their POA’s and can no longer execute new documents. An Irrevocable Trust, sometimes known as a Five Year Trust or Legacy Trust is also essential for avoiding huge financial losses at the end of life from unscrupulous care facilities or exploiters. This Irrevocable Trust makes it possible to put your assets in a “lock box”, including your home in an Occupancy Agreement with that trust, so it can be guarded by a trusted Trustee that you choose while you have capacity to do so. Nothing else can fight undue influence from outside predators or family members better than one of these trusts. The elder that has dementia and is determined to gift thousands of dollars to a Nigerian Prince will not be able to reach his assets held in this kind of trust, if he has chosen his Trustee well.
Most often, the elder has an older Will and POA’s with a large amount of assets and a home that is paid off. If this elder needs help transitioning to a skilled nursing facility, I counsel them or their POA Agent to use a Third Party Health Care Advocate to narrow the search and produce the diligence to afford the family advance information of the culture and safety of that facility. If the POA Agent is motivated, I can help them save assets; structure the method for saving the assets and coordinate that with the elder’s admission to the facility. The net effect is that the elder has a “problem.” They need to pay a large amount of money to a facility in exchange for being admitted and allowed to file a Medicaid application upon admission. If I have helped them to save half of their assets, it is often a great deal of money that they now need to give the facility in the form of an immediate annuity and the facility will appreciate the fact that the family has done its homework and has money to bring to the table that will be approved by Medicaid. If all goes well, the elder has gifted half of their estate away from themselves and is now applying for Medicaid and paying the facility the other half of their estate in the form of a Medicaid Compliant Annuity. By doing this planning, his/her estate can re-gift their assets back in the way of services and goods to that elder that will not count against their ability to collect Medicaid benefits. Once that elder dies, the remainder of the gifted portion of their estate will pass to their heirs and this is all possible following Medicaid rules with legal advocacy shepherding it through the lengthy application and review process which is more like an audit than an application.
Another key defense to employ during this application process for Medicaid is to also have a legal review of the skilled nursing facility contract that is often a one-sided, over reaching contract that seeks to protect the facility at all costs and to deprive rights and defenses of the residents in the process. Here I review the contract, excising the language that seeks to have the elder waive their rights under law or to strip them of their rights under law. I prepare a memorandum/addendum for that contract that sates why the contract provisions were stricken out and gives the facility the Administrative Code citations to see why. The elder and their POA Agent are far less likely to be drawn into court on a contract breach allegation if that offending contract language has been removed.(more…) Read More...
Anyone planning their estate will begin with the basic estate package: Last Will and Testament, Durable Power of Attorney for Health Care, Durable Power of Attorney for Property, an Illinois Living Will, and a HIPPA Medical Information Release. Adding a Transfer On Death Instrument and keeping your beneficiaries up to date on your investments may be enough to help your estate avoid the necessity of Probate. A Living Trust can add another protective layer against the necessity of Probate, if your assets are properly moved into your trust’s name, or funded.
If you own out of state real estate properties and at least $100,000 in investments, in addition to owning a home, a Living Trust added to your estate plan will allow you these benefits, among others:
Even if you have carefully saved for long-term care, the actual cost of live-in home health aides, nursing homes and assisted living facilities is considerable, averaging at $10,000.00 per month. While many people disdain Medicaid facilities, what they may not know is that most skilled nursing facilities do accept Medicaid because most people do not have the large amount of assets they would need to provide for their long term care, indefinitely. Medicaid is our safety net after we have spent our assets down to $2,000.00. Medicaid Planning is a type of asset protection where an attorney analyzes the person or the couple’s assets and applies the analysis to the law to protect their rights to transfer assets following the law. The U.S. Congress and the Illinois Legislature wrote laws to protect spouses and dependents from impoverishment in a situation where one spouse must go into long term care. Married couples have a great deal of strategies available to protect their assets from counting against them and an Elder Law attorney can help counsel to save assets using these anti-impoverishment protections to protect marital assets.
When facing helping an elder enter a skilled nursing facility, it is vital to also seek help from a Health Care Advocate in order to avoid the skilled nursing facility attempting to strip all assets from a married couple of single person. The Health Care Advocate has done the diligence or investigation into the quality of service and safety at a facility, as well as assessing the culture of the Administration Department of that facility that is planning to take all the assets it can before “allowing” the resident to file a Medicaid application. This behavior is in defiance of federal law and it is quite common, so it is important to be informed and to do asset protection with an attorney before going to the facility, if possible. Even if you do not, you still have rights to assert and I would not let the facility intimidate you with contract breach allegations.
Reviewing the skilled nursing facility contract is also very important for avoiding court at a later time for alleged contract violations. The facility may argue that you have waived your rights by signing their contract that has illegal provisions in it. This can be defeated with arguments that the facility forced you to sign it under duress and that illegal provisions should never be in a contract period, but you are still paying court fees to work this out. For that reason, having a legal review performed before signing the contract and after the elder is admitted to the facility that accepts Medicaid, is one way of crossing out the offending provisions to render it safe to sign. This is a service I perform that also lets the facility to the fact that you are represented by legal counsel.
When you have done the Medicaid Planning, you can approach the Admissions Department with an offer, such as: “My mother needs to pay a skilled nursing facility $200,000.00 in private pay, that we want to pay you with a Medicaid Compliant Annuity.” The Administration will know that you have saved $200,000.00 in the process of coming up with that annuity, but they will be happy to take it and admit the elder, “allowing” her to file a Medicaid application upon admission. In this way, you have done your homework and you are coming to them from a much stronger bargaining position. If the Administrator balks, trying to take all $400,000.00, you can tell him/her that you will need to keep looking for a facility and chances are he/she will relent and accept your offer.
Another tactic the nursing home may employ is to have the intake social worker assure you that they will file the Medicaid application for free, once your parent has spent their assets down to $2,000.00. They will usually add that they are doing wonderful things for the community with the money and that their mission is most noble, etc. Any offer like that should be reduced to a writing, lest the elder later face an involuntary discharge for failure to pay, once they have been shaken down to the $2,000.00 level.
Another consideration is the quality of life for that elder, particularly if they have to endure a great deal of pain and daily humiliation that makes their lives more of a delaying of their death. It is personal, but it would be helpful to the POA Agent to know at what point to consider stopping treatment, if that is desired.
Long term care costs have risen to the point where the spouse not living in the facility, trying to cover the entire nursing home bill, risks complete destitution. Adult children may need to spend their own savings to care for their elder parents living in a facility. Healthcare costs are the greatest contributor to people needing to file bankruptcy. Medicaid is the present safety net for elders who cannot afford such steep long-term facility costs. In order to safeguard your assets for heirs and plan for costs that Medicaid will not cover it is important to consider a range of options, including a well drafted Irrevocable Trust. There are also a number of options for housing and levels of care to consider. In filing the Medicaid application, it is advisable to retain an attorney to help prepare it. Nursing facilities have a conflict of interest in filling out applications because they receive more money when the families pay privately than when Medicaid pays. There are Medicaid recipient’s rights that must be safeguarded throughout the application process and after the elder is admitted to a facility. These rights must be protected before signing the application, lest the family be possibly tied up in unnecessary litigation or the quality of life of the elder be diminished, needlessly.(more…) Read More...
If an elder has not planned for incapacity by obtaining a Durable Power of Attorney for Health care and a Durable Power of Attorney for Property prior to becoming incapacitated, Guardianship is necessary to protect the elder’s finances and to make sure his or her personal and medical needs are met. There are also occasions where the elder has POA’s but also has advanced dementia and is determined to give large amounts of assets to strangers, or to just take out many credit cards and incur large debts to pay to predators. If the POA Agent or Trustee attempts to intervene, the elder with dementia either revokes the POA Agent’s authority or just goes on spending large amounts of money. There are cases where an elder becomes psychotic and has to be hospitalized, due to dementia. This is a difficult area of the law to navigate, but Guardianship can be the best solution for advocating for the elder, especially against a bullying facility that is determined to take all of the elder’s remaining assets, as a condition for being admitted. The court can serve as a counterbalance, enabling the elder’s attorney to save assets in a pooled trust and pay off the equivalent penalty for that pooled trust transfer via a Medicaid Complaint Annuity to be used for his/her care in the facility.
There are some alternatives to guardianship and a few different types of guardianship that may be better suited for an elder who has partial incapacity. A physician’s report will ultimately be the determining factor guiding the court‘s decision in determining the type of Guardianship and whether Guardianship is necessary for the alleged ward. The Guardian for the Person is usually a family member and the Guardianship for the Estate of the alleged ward is often a family member, trusted friend or financial institution. The process for petitioning for Guardianship involves giving the alleged ward proper notice along with a declaration of their rights, including the right to contest the Guardianship in a legal proceeding with legal counsel. Some cases involve litigation with the alleged ward and possibly family members contesting the Guardianship.(more…) Read More...
When a person dies and has no Will or has a Will, but has no named beneficiaries for his/her assets, including such designations as, “To my Estate” then the Executor will need to determine whether there is over $100,000.00 of these assets or any real estate that is not owned protected by Transfer On Death Instrument, jointly owned or previously deeded to the deceased person’s Living Trust. The Probate process is where the state law is needed to appoint an Administrator/Executor and to verify that the proper statutory procedures are followed to pay the creditors and distribute the proper shares of the estate to the heirs at law and people or charities named in the Will, known as legatees.
When a person dies with a Will, the bond is often waived and the Executor is effectively nominated. The Court will examine the original Will and appoint the Executor as the Independent Administrator to probate the estate, issuing Letters of Office that serve to give that person authority to handle the estate’s financial matters. This is a Testate matter.
When a person dies without a Will, there will need to be a bond paid that protects the estate from theft or mismanagement on the part of the court appointed Administrator. The division of the estate will be determined by state law, only, such as 50% of the estate going to the surviving spouse and 50% of the estate going to the surviving children of the decedent. Having a Will in place permits the testator to give the amounts to the spouse that he/she desires, after the state minimum is satisfied. Clearly, the state must decide if the deceased person has not previously done that in a Will.
There are many complications that can arise through the process of probating the estate, but the benefits are: the Administrator is protected from personal liability if they have acted in good faith; the creditors and litigants may be cut off after six months, if proper notice is given; if the estate is insolvent, the priority of payment is followed and the lowest level creditors must take a smaller share of what remains, if anything; and it is an orderly process to settle the estate with all concerned able to contest improper actions on the part of the Administrator, if necessary.
Sometimes it is strategically desirable to probate a small portion of the estate, even when the majority of the estate is held in a Living Trust. This is because the estate can cut off creditors in six months, as opposed to the two year statute of limitations for trusts, and if relatives are threatening litigation, they must mount the suit within six months or be cut off. Generally speaking the Living Trust is a much easier and cheaper process, but it does require some investment and foresight on the part of the testator.(more…) Read More...
There are a number of pitfalls and traps embedded in the contracts that Skilled Nursing Facilities and Assisted Living Facilities give to residents or their representatives to sign. These facilities rightfully want to protect the resident and the facility from financial exploitation, which is epidemic. The contract is often one-sided, however, demanding that the resident give up their rights under law and surrender all assets to the facility. The drafters of these contracts may use the Nursing Home Care Act to try to abbreviate the statutory rights, such as limiting the defenses for an Involuntary Discharge, so it is important for the representative/ POA for Property and Health care to obtain legal counsel to cross out these provisions and provide an addendum that states why the provisions do not follow the law and cannot be agreed to. This is intensive work on the part of the attorney, who must use federal and state administrative code and public policy to advocate for the resident, so that their rights are not waived in the application process and that their assets are not stripped by assignment to the facility. The representative is often ordered to sign a Guarantor provision taking on personal liability for debt not paid to the facility, as it determines. This is contrary to state law and needs to be removed. The language often goes to great lengths to state that the representative is not personally liable, so long as that representative pays out all of the resident’s assets to the facility for any bills the facility decides it is owed. This has to be stricken because the facility may very well decide it wants to be paid in full during the time the Medicaid application is pending, running counter to the rights under the law. The facility may also make mistakes in it billing or commit deliberate fraud. The Security Deposit is another land mine in the contract that needs to be handled properly.
Assisted Living Facilities typically do not take Medicaid, unless they are Supportive Living Facilities. Whenever Medicaid payment is not accepted, the elder’s rights are diminished under law and the law governing Assisted Living Facilities is much weaker than the Skilled Nursing Facilities. After reviewing a contract and removing illegal provisions, an Assisted Living facility will often tell the applicant to “take it or leave it, as is.” Nevertheless, the resident and their representative will be signing the contract with eyes wide open, knowing the unfair provisions in the contract, but it is a cold comfort. With the Supportive Living Facilities, the Medicaid rules under the Administrative Code do protect the resident and representative, if they are asserted in the contract review and not waived by signing the contract, as is.
The object of obtaining the contract review is to protect the resident and their representative from illegal provisions in the contract, but also to keep the matter out of court. Unless these provisions are excised, there is the possibility of a contract breach accusation being leveled against the resident.(more…) Read More...