April, 2012, Friedman Law

Archive for April, 2012

Should You Become Guardian for Your Special Needs Child?

Posted on: April 27th, 2012 by Lawrence A. Friedman

[While this article focuses on guardianship for special needs children, similar considerations arise when a spouse, parent, or other loved one’s ability to make important decisions is impaired by dementia, traumatic brain injury, or other condition. We address such guardianships throughout SpecialNeedsNJ.com, particularly in the elder law articles and practice area pages. We also plan a future blog post on that topic.]

Why should you consider putting time and money into applying for guardianship over your son or daughter with disabilities? After all, you are the parent; isn’t that enough? In a word, no.

Parents have the right to make major decisions for the child and obtain confidential information regarding a child’s health, finances, education, etc. while the child is a minor (typically under age 18). However, once your son or daughter becomes an adult (18 and over in most states), you no longer are entitled to most information subject to privacy laws, and health care providers may require your child’s consent to provide non-emergency medical treatments. While this dichotomy is understandable as children without disabilities become adults, how can you protect your child if he/she can’t make significant decisions or give informed consent to medical care or release of records? That’s where guardianship comes in.

A guardian controls health care, residence, and other major concerns of a person for whom he is guardian (“ward”) in similar manner to a parent’s authority over a minor child. However, to become guardian, a parent must prove the child can’t make important decisions. In New Jersey and New York (as well as most other states) a parent who seeks guardianship must apply to the courts and support his/her guardianship claim with doctor/psychologist evaluations. While the child has an opportunity to contest the application, opposition is uncommon and the court typically appoints the applicant as guardian. As court appointed guardian, you can make important decisions to further the safety and welfare of your child with serious disabilities.

Nevertheless, guardianship isn’t for everyone. If your child has only physical disabilities or otherwise can make major decisions guardianship would not be appropriate. If you are unsure whether your child with disabilities needs a guardian, we can guide you through this crucial concern. FriedmanLaw has helped countless families obtain guardianship over a loved one with diminished capacities.

New Case Supports Medicaid Annuity Planning

Posted on: April 26th, 2012 by Lawrence A. Friedman

To qualify husband or wife for Medicaid, a couple must reduce [“spend down” in Medicaid parlance] money and most other valuables (not counting principal residence, a vehicle, and certain jewelry) owned by either spouse to the smaller of about $110,000 or half the total countable assets of husband and wife. However, rather than spend down all excess resources for long term care, families often can protect excess resources through various Medicaid planning techniques discussed in greater detail in the articles and practice area tabs of SpecialNeedsNJ.com. [CAUTION- because Medicaid planning is complex and often counter-intuitive, do it yourself Medicaid planning can waste opportunities to save assets and delay the start of Medicaid.]

Medicaid qualified annuities are sometimes used to preserve excess resources by providing additional income to a spouse who doesn’t need long term care. However, annuity planning is not the best approach for all situations and isn’t favored by some Medicaid administrators. Nevertheless, a recent ruling from North Dakota lends support to Medicaid annuity planning.

In Geston v. Olson (U.S. Dist. Ct. N.D., No. 1:11-cv-044, April 24, 2012), the United States District Court for the District of North Dakota, Southwestern Division precludes the state from limiting the size of permissible annuities. In discussing Medicaid annuity planning, the Court says, “If there is a ‘loophole’ under federal law as to the treatment of irrevocable and nonassignable annuities under the Medicaid program, “the closing of that ‘loophole’ is best left for Congress to address.”

While a United States District Court ruling from North Dakota isn’t binding in New Jersey or New York, the Court’s logic accords with various similar rulings in other states. Thus, it may prove persuasive toward supporting Medicaid annuity planning outside North Dakota, which bodes well for families that employ Medicaid planning annuities in our area.

Lawrence Friedman to Moderate New Jersey State Bar Foundation’s Senior Citizens Law Day Conference

Posted on: April 19th, 2012 by Lawrence A. Friedman

For the sixteenth consecutive year, attorney Lawrence Friedman will moderate the New Jersey State Bar Foundation’s Senior Citizens Law Day conference. He also will speak on will, trust, and long term care planning. With nursing homes charging around $10,000 per month for a decidedly institutional setting, care may suffer and families face impoverishment unless they explore all options when long term care is needed, particularly in light of recent changes to Medicaid. The conference will be held 10:00 a.m. on May 10, 2012 at the New Jersey Law Center in New Brunswick. Register for free at www.njsbf.org or call 1-800-FREE-LAW

Delaying Medicare Enrollment Can Prove Costly

Posted on: April 16th, 2012 by Lawrence A. Friedman

Originally, Medicare had two parts: Part A covered hospitalizations and related services while Part B covered phsysician and other services. Later on, Part C Medicare Advantage was added to permit private all in one plans as an alternative to Parts A and B. Finally, a few years ago, Congress added Part D to Medicare to cover some prescription costs, although some Medicare Advantage plans are bundled with prescription coverage.

Medicare Part A is provided without a premium beyond the Medicare payroll tax but persons who enroll in Medicare Parts B, C, and D, must pay additional premiums. For this reason, some folks are tempted to save some premium dollars and wait until they are older and sicker to sign up for Medicare Parts B and D or a Part C Medicare Advantage plan. However, this strategy can backfire severely.

In the first place if you get sick, you could be hit with major medical and drug bills, and nobody can be certain that an unexpected illness or accident won’t strike.

To prevent people from unduly shifting health care costs to Medicare, Medicare charges an additional premium or penalty when an individual enrolls in Part B, C, or D after first becoming eligible unless an exception applies. The Part B penalty is 10% for each year Part B enrollment is delayed. The Part D penalty is based on the base Part D premium in effect each year increases for each month a Medicare participant goes without drug coverage. For instance, a Medicare participant who delays enrolling in Part D for three and a half years might have a roughly $14.00 penalty added to each month’s Part D premium when she finally does enroll. Part C penalties depend on the particular Medicare Advantage plan.

Exceptions to the penalties apply when an individual has alternate coverage recognized by Medicare. This can arise as a result of certain employer or union medical and prescription plans. However, not all plans will avoid Medicare penalties and the rules may vary depending on whether the Medicare participant or spouse is employed.

In addition to premium penalties, persons who are eligible for Medicare but don’t enroll may find employer coverage limited as a result. For instance, an employer plan may refuse to cover costs that Medicare would fund if the employee or employee’s spouse had elected full Medicare coverage.

In short, Medicare rules are quite complicated and errors and misunderstandings can prove costly. Therefore, before deciding to forego any Medicare Part, it is important to understand the penalties that may arise. FriedmanLaw helps clients navigate the maze of government benefit programs and make sense of their options.