Elder Law

Delivering Peace of Mind

We take great pride in the leadership role that our firm has assumed in providing our senior citizen and disabled clients with a full range of services backed by years of experience and our constant commitment to remain current with all aspects of this area of law. You will notice in our biographies that we are members of and take an active role in the Elder Law Section of the NYS Bar Association and the National Academy of Elder Law Attorneys. Our commitment to you is to recommend and provide what is in your very best interest, given your individual situation, and to do so with the highest degree of professionalism and integrity.

There are 4 aspects to this section of the website:

  1. Elder Law
  2. Detailed Explanation of an Irrevocable Trust
  3. Medicaid Eligibility
  4. Asset Preservation and Intake Form

 

FREQUENTLY ASKED QUESTIONS (FAQs)
Let us take a moment to answer some of your frequently asked questions which should help you understand this area of our practice.

 

  1. ELDER LAW
    1. What is Elder Law?

      Elder Law is an area of law that emerged in the early 1990s in response to the ever-increasing needs of an aging and disabled population. It brings together several disciplines in the practice of law to address the concerns and problems facing our senior citizens. Those concerns revolve primarily, but not exclusively, around the challenges of asset preservation and the smooth transfer of assets from the older generation to loved ones, either within the same or younger generations.

      These challenges are made all the more difficult by reason of the ruinous expense caused by the sudden onset of a long term health care crisis, which in most cases drains the middle class senior of his/her modest wealth and interferes with the passing of that limited wealth to the natural objects of their bounty.

      It is also important to realize that this area of law is just as importantly focused on protecting the rights of our disabled population of any age. Many of the same laws affecting the rights of seniors are also those that impact the disabled, regardless of age and the source of that disability.

    2. What areas of practice are involved?

      To conduct a successful practice on behalf of our seniors and the disabled, it is necessary for the Elder Law attorney to be well experienced in the following areas of practice:
      • Estate Planning - particularly in the use of wills, trusts, powers of attorney and health care proxies;
      • Trusts - which are established to remove assets from the requirement of having to be spent on long-term care needs, reduce estate taxes, enhance the lifestyles of the disabled without reducing benefits, pass assets to loved ones without probate, and also to protect loved ones from the ravages of “predators and creditors;”
      • Real Estate - including the effective use of deeds, mortgages, life estates, leases, and the assignment of all property rights;
      • Litigation - while hearings and lawsuits are only a small part of the practice of Elder Law, it may become necessary to appeal a local decision to an administrative hearing and, infrequently, to bring a matter into the arena of the court room. It is important to be prepared to advocate for a client’s rights at every level;
      • Contracts - including knowledge of annuities, life insurance, health and long term care insurance and the use of contracts for personal services and providers of institutional services for clients;
      • Taxes - implementing any one of these particular approaches may have particular tax consequences relating to estate, gift and/or income tax;
      • Estate Administration and Probate - the ultimate objective is to eventually pass the assets of the senior on to the objects of his/her bounty. That, in most cases, necessitates the administration of estate assets, or the positioning of assets to avoid the need for a formal administration proceeding; and last, but not least
      • Public Benefits - including Social Security, Medicare, and Medicaid, all of which have voluminous regulations, extensive judicial opinions, and local interpretations.

    3. How long has your office been practicing Elder Law?

      Attorneys in our firm have been practicing in this area of law since 1984, at least six (6) years before Elder Law became a recognized practice area. It was at this time that our firm recognized that our seniors and the disabled needed legal assistance in preserving their assets in the event of a health care crisis and obtaining access to the safety net of public benefits. Each year thereafter, the practice of Elder Law has been an ever-increasing component of our law firm’s mission.

    4. What is the best means to protect a home?

      This is probably the most frequently asked question. The “Gold Standard” for protecting a house, as with most other assets, is to create an irrevocable, income only trust and transfer the title of the real estate into the name of the trust. (A full explanation of this trust follows these FAQs.) We realize that this is contrary to the vast numbers of transfers of homes by parents to children as reported frequently in newspapers. However, a transfer of the home to children with a retained life estate can be a time bomb with a very long fuse.

      There are three (3) broad categories of problems resulting from a transfer to children:
      1. Lottery of Life” issues. This category is based on the fact that difficulties arise in the lives of all families - difficulties, such as financial set-backs, disability, death, and divorce, just to name a few ways in which an adverse event for a child may frustrate the plan.

        Each of these setbacks can have a devastating impact on the interest of the parent who continues to live in the home and on the interest of the child-owner. 

      2. Sale of Property During Lifetime. Experience tells us that very few couples remain living in the family home right up until their death. There is almost always a transition from family home to smaller home or apartment, or to a child’s home, or to an adult home, or an assisted living facility, and/or a nursing home. This transition usually results in the sale of home during the life of the parent(s). The sale of a house placed in the name of the children with a reserved life estate creates a loss of value that is completely unexpected and can be considerable.

        Such a sale causes the value of the life use of the parent to be paid to the parent based on the tables allowed by Medicaid (as an example, up to 40% at age 80). Further, the balance is subject to capital gains tax for the children’s portion, usually over 20%. In the final result a substantial portion of the value of the house is unexpectedly placed at risk.

  2. IRREVOCABLE TRUSTS

    1. How is a trust different and better?

      When an irrevocable trust is utilized, and assuming that the trust is a “grantor trust” under the Internal Revenue Code, all the foregoing difficulties disappear. “Lottery of Life” incidents arising in the lives of children have no adverse effect on the property. Further, the property may be sold at any time and still qualify for the homestead exemption and there are no capital gains tax consequences. The bottom line is that the full value of the property is protected after the expiration of five (5) years, the current Medicaid look-back period. An additional benefit is that, in the properly drawn trust, the property still qualifies for all real property tax exemptions, such as Veteran’s, STAR and Enhanced STAR.

    2. Should I feel uncomfortable planning to qualify for Medicaid?

      The short answer is absolutely not. The long answer is a bit more complicated and involves the following considerations:
      1. The New York Court of Appeals, the highest court in the state, said it best when it ruled in the 2000 landmark Shah case:

        “No agency of the Government has any right to complain about the fact that middle class people, confronted with desperate circumstances, choose to (try to qualify for Medicaid) when it is the government which makes poverty a prerequisite to the receipt of assistance to defray ruinously expensive, but absolutely essential, medical care.”

      2. Our medical, governmental, and health insurance system has created a somewhat discriminatory system for covering medical care.  Certain diseases are “fortunate” and therefore covered; while others are “unfortunate” and receive limited or no coverage.  If someone has heart problems or cancer, their care is mostly covered; however, if that same person suffered a stroke or degenerative disease, like Alzheimer’s or Multiple Sclerosis, the coverage for that care is very limited, and the remaining “ruinous expense” must be paid out of pocket.  

      3. As a country, our current approach to health care for the elderly is wiping out the middle class. The wealthy can pay for their care without serious financial consequences to their loved ones, and the poor are eligible for governmental assistance. The middle class is the only group at risk for losing their limited accumulated wealth to the ravages of long term health care.   Middle class families cannot long sustain the downward spiral of paying for nursing home care at the current rate of over $100,000.00 per year.

  3. MEDICAID ELIGIBILITY
    Download Medicaid Application Checklist (pdf)

    1. What is required to qualify for Medicaid Eligibility?

      Eligibility standards for Medicaid differ depending on whether you are applying for nursing home based care or community based care.

      1. Nursing Home Care
        1. Look- back period. As of February, 2006, the effective date of the Federal Deficit Reduction Act of 2005, Medicaid requires a five year look-back on all transfers and may deny eligibility within 5 years of an uncompensated transfer (gift).

        2. Resource Level. The applicant may have resources not in excess of $14,850.00, as a personal resource allowance, available to purchase items to make life more comfortable.

        3. Income. All the applicant’s income (Social Security, pension, and retirement plan distributions, like IRAs) must be applied to monthly care with the exception of a $50.00 income allowance, held in a separate account at the nursing home.

        4. What about a spouse. The applicant’s spouse may retain as a Community Spouse Resource Allowance (CSRA) the couple’s residence, a motor vehicle, and other assets amounting to between $74,820 and $119,220 (2015), depending on the value of assets at the time the institutional spouse is admitted to a skilled nursing facility. In addition, the community spouse is entitled to a monthly income allowance of $2,980.50 (2015) from the family income.

        5. Prepaid funeral account. Applicant may also have a prepaid funeral account so long as it is in the form of an irrevocable trust account established by a funeral director. The spouse and certain other family members may have space items paid for.

      2. Community Based Medicaid.

        All the above rules apply, except that there is no 5 year look-back period for transfers and there is no CSRA, unless Medicaid is being provided under certain “waivered” services, in which case it is the same as above.

  4. ASSET PRESERVATION AND PROTECTIONS FOR THE DISABLED
    Download Intake Form (pdf)

    1. When is it too late to protect assets from a long-term health care crisis?

      Keep in mind that it is never too late to protect some assets; however, because of the 5 year look-back period, the later a plan is implemented, the less that can be protected. Eleventh hour crisis planning has its limitations.

    2. How does asset protection planning relate to long term care insurance?

      We believe in the value of long term care insurance (LTCI). This type of insurance is the only way in which you can establish a pool of money to be available for your long term care needs. Our services can stop or prevent the hemorrhaging of money for long term care, but only LTCI can provide a source of funds to use for your care.

      The problem is that most often people don’t think about obtaining LTCI until they are advanced in age or have sustained a health care setback. At that time, the individual finds they are either uninsurable or the cost of the insurance is prohibitive.

    3. What services do you provide to the disabled?

      Primarily our services are directed toward assisting the families of the disabled in getting the support and protection needed to preserve the quality of life of the disabled individual at any age. This may involve guardianship proceedings, planning for parents to establish trusts in order to provide for the disabled child with funds to enhance their life without diminishing governmental benefits, and the obtaining of governmental benefits to provide income and/or governmental health care benefits. We are frequently called upon to assist in obtaining Medicaid, Social Security Disability (SSDI), and Supplemental Security Income (SSI) for clients and children of clients. New York State has provided an excellent “Guide for Families and Friends of People with Developmental Disabilities.” Use the link for Planning for the Future (6th Edition).

    4. What type of trusts protect funds for the disabled?

      There are three (3) basic types of trust that can be used to provide for and protect the disabled:
      1. A Third Party Supplemental Needs Trust (SNT) established by someone other than the disabled individual and not obligated to support the disabled person. This SNT can provide goods and services in-kind to the disabled, but cannot provide cash without diminishing the governmental support. Further, if the disabled individual is receiving Supplemental Security Income (SSI) the payment of food and shelter expense will also reduce the governmental benefit.

        The SNT can provide for goods and services which supplement basic needs and enhance the lifestyle of the disabled person, such as a stereo, television, clothing, medical care and equipment not otherwise covered, entertainment events and travel.

      2. A Self-Settled Payback SNT established by a person authorized by statute or by court order to receive funds entitled to be used for the benefit of the disabled person. This type of trust allows the disabled individual under 65 to benefit from the use of the money in the manner set forth above, but does not diminish governmental services. The difference with this trust is that, upon the death of the disabled person, the balance remaining in the trust is utilized to pay back the government for care received before it can benefit the heirs of the disabled.

        This payback trust is a great tool when the disabled person is about to receive an inheritance which has not been protected within the terms of a will.  It is also a valuable approach to protect the money a severely disabled person is about to receive as a result of a lawsuit.

      3. A Pooled SNT which may be used to protect assets and that portion of the disabled person’s income above the allowed amount to qualify for Medicaid. These trusts are usually set up with not-for-profit agencies, like NYSARC. This may be used by the disabled of any age and may be spent for the benefit of the disabled individual in the same manner as set forth above. However, upon death, the balance remaining must be paid to reimburse the state or be paid over to the agency for its benefit.

 

The above is not meant to serve as legal advice, but we hope that it was helpful in your understanding. Of course, each situation is different, requiring its own special approach by an experienced, competent Elder Law attorney.  The information provided above is not intended to and does not create an attorney client relationship.