Elder
Law Update
North Carolina Edition
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Issue Seven
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December 2007 |
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PLEASE VISIT MASON LAW
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I WANT TO KNOW
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If you have an idea or comment that will help me
make this a better newsletter
please
send it to me. Just
click! |
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Dear Stacey,
This month we're running a special contest with a
prize . . . a one year subscription to this free
newsletter to the first person who can spot at least
two Christmas decorations.
What a year 2007 has been. This newsletter has taken
off beyond anything I thought that it could do when
we started off last Spring.
 The
Mason Law Savannah office is up, running, and busy.
I finished off one year as Legislative Chair of the
Elder Law Section, and came on this year as Vice
Chair. My friend Dennis Toman, the current Chair,
asked me also to stay on as Legislative Chair
another year. Next July I'll move up to Chair, and
you can bet I will not invite myself to do another
year as Legislative Chair.
I've also been able to practice law! I'm grateful to
my clients for giving me that opportunity.
Last issue we focused on Medicare shopping (Drug
plans and Advantage plans). The shopping season is
in full swing through this month. As a reminder, we
have Medicare information on the site. You can
access that by clicking
HERE. I've also posted some very useful plan
comparison sites under This Month's Favorite Links
on the left side of the newsletter.
A final note on Drug Plans: Anyone needing some
financial assistance with prescription drugs needs
to visit the
Partnership for Prescription Assistance. I've
also put a link to the left. This is a great site
that catalogues drug company assistance plans,
discount drug plans, and state plans. Better yet,
you can enter eligibility information for a list of
available options.
After repeated requests to do so, I am beginning a
multi-issue series on North Carolina Medicaid rules
and the changes that have been made by the Deficit
Reduction Act and the Division of Medical
Assistance. This month's installment begins a
discussion of asset rules, particularly real
property.
Dr. Beth Hodges is back this month with advice on
vaccinations (have you gotten yours yet?).
Social Security Guy Warren
Coble also continues his series on Social Security
Disability below.
Finally, if you ever wondered what a private banker
is . . . read Rose Devries column, also below.
Have a wonderful Christmas.
Bob Mason
Certified Elder Law Attorney
Certified by the
National Elder Law Foundation,
recognized by the American Bar Association as the
certifying entity for specialization in Elder Law. |
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A NEW SERIES:
MEDICAID BASICS AFTER DEFICIT REDUCTION ACT
Bob Mason
To those of you who
have downloaded and read my North Carolina Medicaid
Explanation, the first paragraph or two may seem
familiar. Keep reading. The following series will
dig a bit deeper into the various asset rules and
transfer rules than the basic summary you may have
seen.
This is the first in a multipart series that will
delve into the whacky world of Medicaid nursing home
benefits after the Deficit Reduction Act. I don't
know how many installments we will have . . . enough
to get the job done.
Part I
For all practical purposes, in the United States the
only "insurance"
 plan
for long-term institutional care is Medicaid.
Medicare only pays for approximately 7 percent of
skilled nursing care in the United States. Private
insurance pays for even less. The result is that
most people pay out of their own pockets for long
term care until they become eligible for Medicaid.
While Medicare is an entitlement program, Medicaid
is a form of welfare - or at least that's how it
began. So to be eligible, you must become
"impoverished" under the program's guidelines.
Despite the costs, there are advantages to paying
privately for nursing home care. The foremost is
that by paying privately an individual is more
likely to gain entrance to a better quality
facility. The obvious disadvantage is the expense;
in North Carolina, nursing home fees average $5,500
or so a month. Without proper planning nursing home
residents can lose the bulk of their savings.
For most individuals, the object of long-term care
planning is to protect savings (by avoiding paying
them to a nursing home) while simultaneously
qualifying for nursing home Medicaid benefits. This
can be done within the following rules of Medicaid
eligibility.
In North Carolina, Medicaid is administered by the
Division of Medical Assistance of the Department of
Health and Human Services (the "DMA"). Across the
state, the county Departments of Social Services
("DSS") assist the DMA in Raleigh with local program
management. However, in order to qualify for federal
reimbursement, the state program must comply with
applicable federal statutes and regulations. So the
following explanation includes both North Carolina
and federal law as applicable.
THE ASSET RULES
The basic rule of nursing home Medicaid eligibility
is that an applicant, whether single or married, may
have no more than $2,000 in "countable" assets in
his or her name. If the applicant is
married, the spouse is called the Community Spouse,
and there are rules concerning how many countable
assets the Community Spouse may keep. Those rules
will be discussed in a later installment.
"Countable" assets generally include all belongings
except for (1) personal possessions, such as
clothing, furniture, and jewelry, (2) one motor
vehicle, (3) the applicant's principal residence,
and (4) assets that are considered inaccessible for
one reason or another. The asset rules are quite
complex.
Keep in mind, the rules discussed in this part
relate to qualifying for Medicaid and have nothing
to do with transferring those assets or whether
those assets might be subject to estate recovery
upon the death of the applicant. Those rules will be
discussed in a later installment.
Real Property: The Home
A home with equity of less than $500,000 (until
November 1, 2007, there was no limit) will not be
considered a countable asset and, therefore, will
not be counted against the asset limits for Medicaid
eligibility purposes as long as the nursing home
resident intends to return home or his or her spouse
or other dependent relatives live there. It does not
matter if it does not appear likely that the nursing
home resident will ever be able to return home; the
intent to return home by itself preserves the
property's character as the person's principal place
of residence and thus as a noncountable resource.
The "Home" also includes an unlimited amount of real
property (as long as the equity does not exceed
$500,000). As a result, for all practical purposes
nursing home residents do not have to sell their
homes in order to qualify for Medicaid. Do keep in
mind, that while the Home does not count for
Medicaid qualification purposes, it may
likely be subject to estate recovery later after the
death of the Medicaid applicant and his or her
spouse. Estate Recovery will be discussed in a leter
installment.
Real Property: Tenancies-in-Common
A tenancy-in-common is a method of holding title to
real property jointly with others. The percentages
need not be equal. Each "tenant in common" has an
equal right to use the real property. Upon sale of
the real property, the proceeds are divided
according to the percentage ownership interests.
Each tenancy-in-common interest can be separately
sold, transferred as a gift, and passed on under a
Will.
Tenancy-in-common property is NOT countable property
for purposes of Medicaid qualification. However, it
is available for estate recovery and may raise
transfer issues if later transferred.
Real Property: Life Estates
These are often referred to as "life time rights" or
"life rights". In this type of ownership, one owner
is referred to as the Life Tenant,
 the
other as the Remainder Interest. The Life Tenant has
a current ownership interest that brings with it the
exclusive right to occupy and use the premises for
the rest of her life. Life Tenants are legally
obligated to maintain the premises, pay the taxes
and keep it insured. The Remainder Interest holder
has a current ownership interest, too, in as much as
he may transfer that interest at anytime. The
Remainder Interest holder does not have the right to
use or occupy the premises, however, until the Life
Tenant has died. Once the life tenant has died, the
property passes automatically to the Remainder
Interests and free of liens the Life Tenant may have
added to the property after the life tenancy
was created.
Life Estates are not countable. They also have the
added feature of not being available for estate
recovery upon the death of the Life Tenant. For this
reason, life estates have been a popular, sometimes
abused, method of holding title to real property.
The Deficit Reduction Act and new DMA rules
complicate transferring and buying life estates.
Those rules will be discussed in a later installment
pertaining to Transfers of Assets.
Real Property: Joint Tenancies
Join tenancies in real property are somewhat similar
to tenancies-in-common. As long as the joint tenancy
exists, if a joint tenant dies, the surviving joint
tenant or tenants take the deceased tenant's
interests automatically (in this way, a joint
tenancy is similar to a life estate). Because of
that feature, joint tenancy property will escape
estate recovery.
There is currently much confusion with respect to
North Carolina law as to whether the joint tenancy
interests must be equal. The "safe" assumption is
that they must be equal, the "correct" (at least in
my opinion) assumption is that they need not be
equal (you might be in for a fight to prove I am
correct). There may be an effort to address the
confusion legislatively.
In the next installment, we will discuss the rules
applicable to other types of assets.
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VACCINATIONS AND THE ELDERLY
-Beth Hodges, MD
All of us who are parents spend a
considerable amount of time updating our
children's vaccinations, but do we think about
our elderly in that context? There are several
very necessary immunizations our older relatives
need, and this time of year is a great time to
make sure they are caught up.
The most obvious of these vaccinations
is the annual flu shot. Though the optimal time
of administration is late October and November,
if missed, it can still be given in December,
January, or even February. Flu season typically
hits hardest in the cold winter months, but can
run through spring, and sporadic cases can be
seen all year long. Every year, 36,000 people in
this country (mostly elderly and small children)
die of influenza, and another 55,000 heart
attacks can be linked to stress on the body from
cases of the flu. Everyone over 50 (unless they
have a history of egg allergy or Guillain Barre
syndrome) should receive the flu vaccine.
Contrary to popular lore, the flu shot is now
made from a dead virus and cannot cause symptoms
of the flu in any way, shape, or form. Not
getting it could be deadly.
Another important vaccination is the
pneumonia vaccine, traditionally given at age
65. We used to give a booster in 5 years, but
Medicare decided recently that they would no
longer pay for that. The vaccine does not
prevent every type of pneumonia, but protects
against 23 strains that have high mortality
rates in the elderly.
A frequently overlooked vaccination in
the elderly is a tetanus booster. Tetanus is an
organism that lives in the soil, hence its
reputation for attacking people through "dirty
wounds" ( i.e. stepping on a rusty nail.)
Elderly folks often forget to keep up with
tetanus vaccines every ten years, making them
more susceptible to the infection. Tetanus is
often fatal, but if survived, usually leaves
devastating permanent neurological damage in its
wake.
A recently developed vaccination has
garnered much media attention: the shingles
vaccine. The CDC has recommended the vaccine to
those in their 60's. I hesitate to contradict
the CDC, but will offer a few "clarifying points
of edification." The vaccine does not prevent
shingles. It lessens the severity/occurrence of
post herpetic neuralgia (Latin for pain that
lingers after the shingles go away.) Medicare,
last I checked, does not pay for this vaccine,
which is over $100. SOME Part D (prescription
plans) for Medicare will reimburse a patient for
SOME of the cost AFTER the patient pays the
doctor and submits a receipt to the Part D
provider.
This article has hit only the
highlights of four important vaccinations. Your
loved one's physician can go into more detail as
needed and can make recommendations based on the
patient's vaccine and medical history. I hope
only to have given you food for thought about
another way to keep your relatives safe over the
busy holiday season.
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MORE ON SOCIAL SECURITY DISABILITY BENEFITS
-Warren
Coble
Information abounds about how Social Security
Disability Benefits work. Much of it is very
confusing. I hope a brief series of articles will
help with, as Detective Friday used to say, the
"facts Ma'am, just the facts."
My last Social Security Disability article (October
2007 issue of Elder Law Update) dealt with basic
filing requirements and eligibility issues. This
month let's look at two important Social Security
disability issues: onset date and waiting period.
Onset date in Social Security Disability is not the
same as the diagnosis date in a medical case. The
onset date is the point at which two different
factors are met at the same time: 1. The individual
has a severe condition that prohibits most work
related activities and, 2. The individual is not
engaging in Substantial Gainful Activity.
Substantial Gainful Activity is Social Security's
wording for work activity. Certain earnings criteria
have been established as reasonable indications of
SGA. For an employee, the SGA test is a monetary
test, $900.00 per month or less (2007 rates). For
self-employed individuals, there is a 3 level test
used to determine SGA: 1. Significant Services and
Substantial Income, 2. Comparability of Work
Activity, and 3. Worth of Work Activity.
Many individuals with severe medical problems
continue to work long after the diagnosis, and are
ineligible for Social Security disability so long as
they work at SGA levels. At the point they drop
below SGA, Social Security can establish an "onset
date."
After the onset date, an individual must serve a
mandatory 5 month waiting period that begins with
the first full month after onset. There are no
exceptions to the waiting period.
Many folks mistakenly believe that benefits are paid
retroactively to the onset date after the waiting
period. Again, this is not correct. Everyone serves
the waiting period. We've been discussing Social
Security Disability cases; there is no waiting
period in Supplemental Security Income (SSI) cases.
An example will help to clarify all the information:
An individual is diagnosed on March 15, 2007, with a
severe illness but continues to work fulltime
earning over $1,500 per month (SGA level) until July
10, 2007. The onset date would be July 10, 2007. The
five month waiting period would then be August,
September, October, November, and December.
Entitlement would occur in January, 2008, and the
first payment would be due in February, 2008.
We'll share more information in the months ahead.
Social Security expert Warren Coble welcomes your
questions regarding Medicare, Social Security and
Senior Life in general! Email Warren by clicking
HERE. |
WHAT
IS PRIVATE BANKING?
-Rose deVries,
Darby Bank & Trust Co.
In the early days of banking, a private
banker was an individual or organization
that engaged in the business of
banking without first
obtaining a permit to do so from
governmental authorities. Therefore, the
private banker was often free to practice
the banking trade with little or no
governmental regulation. This was one of
their principal advantages. But as you can
imagine, it also became the leading reason
for the eventual disappearance of private
bankers from the economic scene.
Fast forward several banking centuries.
Thankfully, private banking conveys
something completely different in today's
world. Private banking is a hands-on niche
aimed at providing clients the utmost in
personal and individualized service. It
affords clients the luxury of never having
to sit on hold with customer service or even
step foot into a branch. Essentially,
clients make one call to their private
banker and he or she makes it happen!
Private bankers are truly a
jack-of-all-trades with a knack for handling
financial issues of high-value customers.
They serve as the financial equivalent to
the concierge at a five-star hotel. Their
motto: just ask and it's done.
As a general rule, banks reserve private
banking services for its clients who meet a
certain financial threshold. That threshold
varies from bank to bank.
The ultimate goal of the private banking is
to become a one-stop shop for meeting a
customer's financial needs. Whether it's a
mortgage, line of credit, boat loan,
insurance product, estate planning or wealth
management, the private banker's aim is to
find the right solution or bring in someone
else who can.
When searching for a private banker, you
want to look for someone who works when
you do - albeit odd hours and weekends -
to meet your banking needs.
Additionally, you will want to find
someone who can remain objective.
Specifically, I recommend that you
search for a private banker that does
not sell proprietary investment
products. Rather, the private banker
should have a number of strong
relationships with wealth management
providers, insurance providers and
estate and financial planners to refer
you to the person that best fits your
needs.
Rose
de Vries, JD, is Vice President of Private
Banking Services for Darby Bank & Trust Co.
(offices in Vidalia, Lyons, Pooler and Savannah,
Georgia). Rose is based in Darby's main Savannah
office. You may email comments and questions to
Rose by clicking
HERE
or by giving her a call at 912-944-2612.
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The Usual Disclaimer: This newsletter is for
general information only. Please do not rely on
anything you read in this email as definitive legal
advice applicable to you. All situations are
different, including yours. Nothing you read in this
newsletter is a suitable substitute for professional
advice you may receive from your attorney, your
accountant, or your tax advisor.
All contents copyrighted 2007 by Mason Law, PC.
Contents may be republished with written permission
of Mason Law, PC (which permission will usually be
given!). |
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