Medicaid estate recovery liens often take people by surprise

On March 24th, PBS news hour had a segment called “The Medicaid Bill that doesn’t go away when you die.” The program described the impact of estate recovery liens which are pursued by State Medicaid Programs. Estate recovery is required by federal law in 42 USC 1396p. The New Jersey  lien statute is at N.J.S.A. 30:4D-7.2(a)(2). The lien is imposed after death against property that was owned by a Medicaid recipient at the time of his death. Congress allows States to go after not just the solely-owned “probate assets,” but any asset in which the Medicaid recipient held any legal or equitable title at time of death, such as jointly-held assets that otherwise pass to a surviving co-owner. this is called the “expanded estate.”

We just handled an estate of someone.  who died many years ago owning a property that just never got sold until 2014. Her many heirs were hopeful for some inheritance. We contacted the State Medicaid office, as the Executor had no idea whether the deceased had been on Medicaid or not.  It turned out she had received Medicaid benefits after age 55 which, in the last year alone, exceeded the total value of the property that remained in her estate. The lien  recovers for ALL Medicaid services provided after age 55.

Careful planning can avoid Medicaid liens, but failure to plan could be a recipe for the heirs’ losses later.

Call us for advice and representation concerning Medicaid issues, applications and appeals … 732-382-6070

Special Needs Trust can’t be created by beneficiary’s agent under power of attorney

Federal law allows a person who receives or is applying for Medicaid or Supplemental Security Income (SSI), which are means-tested programs, to transfer their excess resources into a Special Needs Trust that was “established for the sole benefit of the disabled individual by a parent, grandparent, legal guardian or the disabled individual or a court.” 42 U.S.C. 1396p(d)(4)(A) New Jersey’s regulation tracks the federal language. N.J.A.C. 10:71-4.11(g)1. The transfer causes no penalty, and once the assets are in the Trust, they are no longer ‘countable” so that they wouldn’t be treated as excess resources. See also the SSI POMS  01120.203, which is the Social Security Administrations’  explanatory guidance. These are first-party special needs trusts with third-party grantors.

What is contemplated here is a two-step process. In step one, someone who is not the disabled person creates the trust. In some cases, the disabled person’s parent or grandparent creates the Trust and signs it as grantor, seeding it with a minimal amount just to open the trust account. In other cases, the disabled person’s legal guardian,  or their agent under power of attorney or even the disabled person himself (see N.J.S.A. 3B:11-36 and 11-37) petitions the court to establish the trust. In that case, the Court is the “grantor” and signs an Order establishing the trust. Afterwards, in step two,  the disabled person transfers their excess assets into the trust. Now there may be an Agent under Power of Attorney or a legal Guardian acting who does this transfer transaction on behalf of the disabled person. However, the law distinguishes between these roles when it comes to step one and step two.

On March 5th, the 8th Circuit US court of Appeals sustained a decision  which held that the assets in a certain Special Needs Trust were countable because the party creating the trust had acted as Agent Under Power of Attorney for the disabled person for both step one   and step two. Draper v. Colvin, No. 13-2757 (March 3, 2015). The result was a termination of benefits. The Court held that the person who was acting as POA did not meet the law’s express criteria for who could be a third party grantor for such trusts.

The reasoning would apply to Special Needs trusts established in New Jersey as well. The lesson is that the Special Needs Trust requirements must be scrupulously followed, as the results could be catastrophic for the person who needs Medicaid or SSI.

For legal advice on establishing and administering Special Needs Trusts, and for Medicaid applications and planning, call 732-382-6070

VA Updates VA Form 10-10EZ and VA Form 10-10EZR

A few days ago, we blogged about the Veterans Health Administration (VHA) eliminating net worth in determinations of eligibility and assignment of priority group.   I commented that the VA Form 10-10EZ would need to be updated to reflect this change.

I was a day late and a dollar short, the Department of Veterans Affairs has updated both the VA Form 10-10EZ and VA 10-10EZR (Health Benefits Update Form).  The new forms can be accessed at WWW.VA.GOV or downloaded at VA Form 10-10EZ (vha-1010EZ-fill) and VA Form 10-10EZR (vha-10-10ezr-fill).

VA Mandates use of Certain Forms to File Claim, Effective March 24, 2015

Effective March 24, 2015, the Department of Veterans Affairs (VA) is mandating that certain forms be used to effectuate the filing of a claim before the Veterans Benefits Administration (VBA).  The VA’s website has been updated to reflect this at VA Claim Filing.

The five forms veterans should be aware of are: (1) VA Form 21-526EZ (Claim for Compensation); (2) VA Form 21-527EZ (Claim for Non-service-connected Pension); (3) VA Form 21-534EZ (claim for survivor’s benefits); (4) VA Form 21-0966 (intent to file to preserve effective date of award); and (5) VA Form 21-0958 (Notice of Disagreement).

There is likely to be some confusion about the filing of the VA Form 21-0526EZ as a Fully Developed Claim (FDC) or non-FDC).  If you have any questions, please don’t hesitate to contact me at (732) 382-6070 or via email at

“I am spending so much time caring for him that I can’t take care of myself.”

A few days ago, I overheard a conversation between two women who I think are in their  80’s. Evidently, the husband of one of them has been ill for about a year. It sounded like among other things, he may have diabetes mellitus that has progressively caused deterioration including retinopathy (impaired and blurry vision) (“he can barely see” and “I have to give him his insulin now”), skin deterioration and wounds that don’t heal (“I have to call the doctor anytime his skin changes color”) , and peripheral neuropathy in the feet (“he can hardly walk” and “I have to stay nearby him all the time.”). It also sounded like he had some kind of heart condition so that any kind of exertion is now fatiguing. She told her friend that she was utterly exhausted and had medical problems of her own that needed to be treated but because they would require convalescence, she just felt she had to keep putting them off.

Caregiver spouses need more support. People shouldn’t have to make such choices. There is a tremendous need for hospital discharge planners and even doctors in the community to provide information and guidance about the availability of services and the benefits to the both the family caregiver and the patient. Medical insurance plans generally will not provide in-home home health maintenance services, and this level of health care is seen as somehow different than curative health care. Patients in the community are often left to cobble together their own arrangements. There are endless choices,  and it’s emotionally complicated for the caregiver.

In-home caregiving can be an all- consuming responsibility. The caregiver may find it impossible to go out to do errands or handle their own appointments. The caregiver may have no time during the day that they aren’t on duty. They may be wakened during the night to care for the patient.

There are many ways for people to get help with this kind of complex inhome nursing care, but the process can be daunting and emotionally difficult. Some people just aren’t aware of the options. Other people have trouble getting comfortable with the idea of a stranger being in their home every day. Still other  people feel that no matter how great the personal sacrifice, no one would provide as good a level of care as they could provide to their loved one.Yet, the patient is at risk when the family caregiver’s health and mental well being are fraying.

For patients whose medical needs are moderate but who require supervision and cueing due to dementia and memory impairment, many assisted living facilities can provide periodic short stays that are called “respite care.” For patients whose medical and nursing needs are more complex, there is no reason they couldn’t receive that care in a nursing home. Of course there is a cost, but if the caregiver is on the brink of collapse, the cost could be well worth it. There is also a state funded respite care program. It can be contacted through local social services agencies and visiting nurses agencies.

Home care can be arranged  to supplement what the family member provides. ltc_guide   An aide can be hired for a predictable schedule such as certain afternoons every week from 12 to 4. Agencies will always require that there be a block of at least 3 hours per day nd that the schedule be predictable. Having a system like this will enable the caregiver to make their own appointments with doctors, dentist, shopping, and so on, knowing that their loved one is protected and not being left alone. Also in this way, the caregiver will be spared the hassle of making multiple phone calls to friends, family, church volunteers etc to see who might be available on a certain day at a certain time so that the caregiver can get out and take care of something that’s necessary. Some caregivers are reluctant to commit to a regular schedule with an agency because they feel they may be wasting money if there’s no need to go out of the house for an appointmen t or errand on that day. However, my clients who have integrated regular supplemental home care find that it gives them a cherished break, and they feel they are less stressed and less tired when they are “on duty.”

If you are a family caregiver, there are many places you can turn to for support and respite. By taking good care of yourself, you can be a better caregiver for your loved one.

 Call us for legal assistance with elder care planning and government benefits programs … 732-382-6070