NJ Medicaid raises the spousal monthly maintenance allowance

Effective July 1, the State of New Jersey Division of Medical Assistance and health Services (DMAHS) has raised the Minimum Monthly Maintenance Allowance (MMNA) for the spouse of a person who is on Medicaid. For individuals in nursing homes, the general rule is that all of the recipient’s income must be turned over to the facility as a cost-share, except for authorized deductions which include support of a spouse if the spouse’s own income is less than the Maintenance Allowance. The NJ MMMNA is now $1,991.25. The relevant regulation is N.J.A.C. 10:71-5.7, and here is the new MedCom No. 15-09, dated July 1m 2015. 15-09_2015_Community_Spousal_Maintenance_Allowance

In calculating the amount of this spousal support deduction, an excess shelter allowance is provided if shelter costs are in excess of $597.38. Also, if the spouse pays for utilities, a utility allowance of $491.00 per month is added to the base MMMNA.

Typically, these calculations are not done until after the applicant has been found to be resource-eligible (“after the spend-down”). This does not mean that all the excess assets have to be spent on the facility, and there are techniques available that preserve substantial assets for support of the spouse. Also, in some cases, the combined income of the spouses will not be enough to provide the spousal support amount. There is a special regulation for those cases, in which the community spouse can keep more assets than usual because the income is too low. You need to address these issues with your elder law attorney at the earliest possible time, well before you embark on a spend-down.

Call us for legal advice and assistance with Medicaid eligibility and asset protection, as well as applications and appeals … 732-382-6070

For some Workers’ Compensation settlements, a Special Needs trust may be needed

A Special Needs Trust is a type of first-party trust that is often used to preserve a lump sum benefit for a low income disabled person under age 65, who needs the support of Medicaid and Supplemental Security income (SSI). Often one thinks of the these trusts in connection with someone who is on SSI because they are disabled and have not worked, such as a person with developmental disabilities or psychiatric disabilities which have prevented them from being fully engaged in the workforce over time. However, some workers who did pay into the Social Security system become disabled as a result of a workplace injury, but because they were very low earners or didn’t work very long, the amount of their Social Security Disability benefit is smaller than the SSI amount and they will therefore require the additional support from SSI. Medicaid eligibility for health insurance comes along with the SSI. The lump sum settlement which they receive upon resolution of the Workers Compensation claim would constitute “excess resources” which would make them ineligible for the SSI and Medicaid. Also, the monthly payment would be treated as Unearned Income which would reduce the SSI payment dollar-for-dollar. Note that the issue I am writing about is distinct from the issue concerning Social Security Disability offsets, in which up to 80% of an SSD payment can be offset by the concurrent receipt of Workers’ Compensation benefits. See EN-05-10018

This is where a Special Needs Trust (SNT) comes in. An SNT needs to be created by a parent, grandparent or court. See 42 USC 1396p(d)4(A), N.J.A.C. 10:71-4.11(g)1. If there’s no parent or grandparent to create the trust, the Court can create it at the request of the disabled person per N.J.S.A. 3B:11-36 and -37. A motion then needs to be made to the Comp judge to direct that the payment be made into the SNT. These steps should be taken before the payment is made by the carrier. The Trust is then established and handled by the Trustee, and the funds are utilized to supplement but not supplant the means-tested benefits.

It is more common for a Special Needs trust to be established to receive a personal injury (PI) settlement or an inheritance than in the workers compensation context. This is probably because most permanently disabled workers already paid enough into the Social Security system to be insured under the Social Security Disability system (SSD), which is not a means-tested program and has no asset or income limits.

The main point is that timing is critical, as it can take several months for this process to be accomplished. Just figuring out who should be the Trustee is often a bedeviling problem. So if it looks like your case will result in income below the SSI limit, so that the worker will end up receiving SSI and SSD, as well as Medicaid, the concept of a Special Needs trust should be explored early on.

For representation and co-counsel involving establishment of special needs trusts, call 732-382-6070


We prepare Special Needs Trusts and collaborate with other attorneys to prepare and establish the trusts when their cases are settled. For advice, call … 732-382-6070

Cost basis adjusts at death so save the proofs

“Cost basis” in its simplest sense is the amount you paid for an asset whose value changes over time. A dollar is a dollar, but a share of stock might be purchased for $19 and later be worth $5 or may be worth $100. When assets are bought and sold, there may be capital gains tax on the difference (gain) between the cost basis and the sale price, subject to various exclusions that are written into the Internal Revenue Code. The burden of proof is always on the taxpayer, though.

At time of death, assets in which the deceased retained an interest are included in the gross value of the estate, even if they are passing to someone “outside the Will” because they are structured to have a joint owner, or are payable to a designated beneficiary (such as a T.O.D. transfer at death account at a brokerage), or it’s real estate that two people jointly owned and now the first owner has died.  The basis of these assets “steps up” to date-of-death value. If a married person, for instance, acquires such assets from her spouse, one half of the basis will step up at the first death. If she later goes and sells the asset, she has to calculate the capital gains tax on the differential. if the tax return is audited, she’ll want to have back-up documentation.

So it is a good idea to appraise assets and to look up and print out the values of them at the time the first spouse or joint owner dies, so that you can save this documentation for later use. It can be very difficult to calculate the basis for such assets long after the fact. Even where the estate has everything jointly owned with the spouse and there are no estate or inheritance tax returns to file, taking the time to obtain and preserve this documentation of value can provide tax savings and time savings later on.

For advice on elder care and estate planning, and for administration of trusts and estates, call … 732-382-6070

Time marches on and the Trust in your Will may no longer be needed

Estate planning can be thought of as a life-long process. A young person may not have much in the way of worldly posessions, but may have particular opinions about who should make the medical and financial decisions for them if they become incapacitated. So a power of Attorney, health Care Directive and basic Will can be signed anytime starting at age 18. Later, you get into a relationship or get married and although you may be leaving everything to your partner or spouse, you wouldn’t want them to have to deal with the hassles of an estate with no Will (including posting a cash bond), so you might make a Will that leaves it all to them and appoints them as Executor with a few backups. After you have children you need a Will that designates their legal guardians (in case your spouse also dies), and if there’s significant assets, you’ll likely want a trust to receive the children’s inheritance (in case your spouse has died).

Things change over time, though. Suppose one of your children is now in their 20s and has become Disabled. That discretionary trust for them may be the wrong trust — they might need their inheritance sheltered in a  Supplemental Needs trust now. The kids may be grown up and doing great – perhaps a trust is no longer needed. Or one of your kids may be strung out or on the verge of divorce.  If your Will doesn’t leave their share in trust, perhaps it should. And it’s also possible that you are in a high-asset situation and signed a Will with certain Trusts for your spouse that just no longer fit the situation because the estate tax laws have changed, or their health situation has changed. Or you’ve been sued for divorce. Or you want to leave charitable bequests.

Just as there’s no one plan that fits everyone, the plan that was the perfect solution when you were in your thirties may be a bad plan now that you’re in you’re 60’s. Bad plans can result in legal and tax and financial headaches that are avoidable with thoughtful planning. Seemingly complicated plans can sometimes be the simpler and perfect  solution, and a ‘simple plan” may not end up simple after all.

Call us for estate planning  at all ages … 732-382-6070


Social Security Administration halts SSI overpayment notices concerning certain same sex couples

If a disabled or elderly person receives Supplemental Security Income (SSI), there are income and resource restrictions as a condition for eligibility. When two SSI recipients are married, the monthly benefit is lower than it would be to two unmarried individuals.  Until the Defense of Marriage Act (D.O.M.A.) was overturned by the U.S. Supreme Court in U.S. v. Windsor in 2013, a same sex couple who were married under the law of their State were still treated as two unmarried persons. This meant they received higher benefits than married SSI recipients would have received.  After that ruling however, SSI began issuing overpayment notices to such couples. As the individuals receiving SSI are poor, this created tremendous hardship.  A class action was filed by Justice in Aging, a nonprofit legal services organization,(formerly called the National Senior Citizens Law Center) called Held v. Colvin, to enjoin the SSA from imposing reimbursement obligations for such alleged overpayments.

The Social Security Administration has just issued an Emergency Order prohibiting the regional SS offices from issuing overpayment notices in these cases from May 6th through October 15th, 2015. If you or anyone you know is facing this issue, contact Justice in Aging immediately at 202-289-6976 or http://justiceinaging.org/contact/.

Contact us for estate planning to protect your aged and disabled family members … 732-382-6070