Affordable Care Act Portal Can Help You Find Health Insurance

Governor Murphy’s Administration announced that the Affordable Care Act’s open enrollment period runs through Dec. 15, and provides a portal for New Jersey residents seeking health insurance coverage. The site addresses plan options, financial assistance and contact information for New Jersey residents seeking health insurance.  The New Jersey Department of Human Services also announced that it is working with the following five community organizations to support enrollment efforts:

  • The Center for Family Services (1-877-922-2377)
  • The Family Resource Network (1-800-355-0271)
  • The Oranges ACA Navigator Project (1-973-500-6031)
  • Fulfill Monmouth & Ocean (1-732-918-2600 or 1-732-731-1400)
  • Urban League of Hudson County (1-201-451-8888, ext. 217)

New Jersey residents can also call 877-96w-8448 to talk about health insurance options and get help enrolling.

While FriedmanLaw does not endorse any particular plan, we encourage readers in need of health insurance to take advantage of all the Affordable Care Act offers both through the new New Jersey portal, and local resources.  In addition lots of information about Medicaid, Medicare, and Social Security is available throughout

Medicare Open Enrollment, Original Medicare Parts A and B, Medicare Part C Advantage Plans, Medicare Part D Prescription Drug Plan Donut Hole Partially Plugged

The following article was written by guest author Lindsay Engle, editor of Medicare FAQ, and Lindsay is solely  responsible for its content.  As with all our blog posts, please remember that this website provides general information that isn’t tailored to your particular situation and may not take into account updates, rules and exceptions that affect you.

There are many Medicare beneficiaries who have enrolled into a Medicare Advantage plan and realized in January that their doctor wasn’t in network, or didn’t even realize they had a network they needed to stay in.
1. Return of the Open Enrollment Period
The Medicare Open Enrollment will replace the Medicare Advantage Disenrollment Period (MADP) that was from January 1 until February 14 of every year.
This was an opportunity to disenroll from a Medicare Advantage plan and return to Original Medicare. The option to enroll in another plan wasn’t available during this time.
Now that is about to change. The new Medicare changes of 2019 will make changing from the unsuitable Medicare Advantage plan to a more suitable plan, possible.
Medicare is reinstating the Open Enrollment Period for all beneficiaries in New Jersey. During this time Medicare beneficiaries can disenroll from their Medicare Advantage plan and enroll in a new plan or switch back to Original Medicare.
If you are Medicare eligible and you’re enrolled in a stand-alone Part D prescription drug plan, you need to make changes to your Part D Prescription Drug plan during AEP (October 15 through December 7 of every year). Part D beneficiaries won’t qualify for plan changes during OEP.
Other Coverage Changes in Medicare 2019
1. Starting in April of 2018, Medicare recipients will start to receive new Medicare ID cards that no longer have a Social Security number displayed on them. This change was announced in September 2017, the biggest reason for the change was to help prevent seniors from being victims of identity theft and fraud.
a. As required by the Medicare Access and CHIP Reauthorization Act-MACRA all beneficiaries will have a new Medicare ID cards by April 2019. The new cards will display a random ID number instead of Social Security numbers.
2. In 2019, a new premium bracket for the highest-income Part B and Part D enrollees with go into effect. Under the BBA 2018 enrollees with an income of $500,000 or more ($750,000 for married couples) will pay a higher premium for Part B and Part D coverage.
3. The coverage gap will be eliminated in 2019 for brand-name drugs, which is a year sooner than predicted. The Bipartisan Budget Act of 2018 (BBA 2018) will close the donut hole one for brand name drugs. This means that beneficiaries will only pay 25% of the cost of brand name drugs. The cost of closing the donut hole for brand name prescriptions is being shifted to the drug manufactures instead of insurance companies or beneficiaries.
4. Medicare Advantage and Part D prescription drug plans change every year. 33 percent of Medicare recipients enrolled into a Medicare Advantage plan in 2017. These plans are popular, but they change every year, it’s important to stay informed on yearly plan changes.
5. For those on Social Security, you might notice an almost 3% increase on your social security checks. This could be up to an additional $500 per year.
Each year by September 30th, Medicare Advantage recipients receive an Annual Notice of Change (ANOC) and Evidence of Coverage (EOC) from their existing insurance carrier for their Medicare Advantage and Medicare Prescription drug plan providers.
Medicare Supplements don’t change year to year. You can expect consistent benefits from one year to the next year.
The Center for Medicare and Medicaid services posts plan changes for the following year sometime in October, several months before the new year begins. is a valuable resource that
Medicare beneficiaries can use to compare plans, look up information and learn more about Medicare.
The changes for 2019 will be beneficial to many Medicare recipients; freedom to change plans, more social security income, new Medicare ID cards and so much more.

Using Qualified Income Trusts to Qualify for Medicaid to Fund Long Term Care

To qualify for Medicaid to fund long term care in New Jersey, your monthly Medicaid countable income must not exceed Medicaid income caps– $2,250 per month for an unmarried applicant in 2018. However, not all receipts are Medicaid countable income, and even if your Medicaid countable income exceeds long term care Medicaid income caps, you still may be able to qualify for Medicaid to fund long term care in New Jersey by placing excess. Medicaid countable income into a qualified income trust

A qualified income trust (sometimes called a QIT or Miller trust) may help you get Medicaid even if your Medicaid countable income exceeds Medicaid limits. However, not everyone is a candidate for a qualified income trust / QIT and not every QIT / Miller trust will lead to Medicaid approval. To succeed, a qualified income trust / Miller trust must be drafted, funded, administered, and spent correctly.

A QIT / Miller trust must be drafted in accordance with both Medicaid guidelines and New Jersey’s Uniform Trust Code or it will not lead to Medicaid eligibility. To be administered and spent properly, the trust must pay solely for expenditures allowable under Medicaid rules. These include certain care costs, medical expenses facility charges, and some other kinds of purchases. You may lose Medicaid if your qualified income trust pays for items not allowed by Medicaid authorities.

To properly fund a QIT / Miller trust, all of each income item that would cause Medicaid countable income to exceed Medicaid limits should be deposited into the qualified income trust. However, while you are not required to place every receipt into the qualified income trust, if you deposit any of a particular income item into the QIT, you must put that entire item into the Miller trust. Partial deposits are not allowed. For instance, you may choose to deposit into the QIT both your pension and Social Security or only one of your pension and Social Security, but you can’t place only part of the pension or part of the Social Security into the qualified income trust.

In many cases it will be advantageous to deposit all of your monthly income into the Miller trust/ QIT. However, if income would be left in the QIT after paying out all amounts authorized by Medicaid authorities, savings could prove greater if you don’t deposit all income items into the QIT. This is due to the interplay of QIT and Medicaid gift penalty rules, which is far too complex to discuss further in brief blog post.

Like so much of Medicaid planning, Medicaid qualified income trust rules contain many traps for the unwary. Therefore, it is risky to do it yourself without professional guidance. FriedmanLaw welcomes your inquiries on Medicaid planning and QITs / Miller trusts.

For further information on qualified income trusts / Miller trusts see Mark Friedman’s May 10, 2018 post on this blog titled NJ Medicaid and Qualified Income Trusts.”

Special Needs Trusts and Retirement Accounts

A special needs trust is important if you have a child or grandchild, or another person in your life, with disabilities who you want to leave property to when you pass away.

A lot of people with disabilities receive disability benefits, which are often valuable and important. Some of these disability benefits programs are means-tested, which means that you must have limited assets and income (means) in order to be eligible for these programs.

SSI and a number of Medicaid programs have asset limits of $2,000. That means a person with disabilities must maintain assets under that figure to remain eligible for these benefits.

So if you leave property to your child with disabilities, you may be disqualifying her from disability benefits on which she relies.

Instead, those assets can be left to a special needs trust, a legal instrument in which the money is held and managed by someone other than your child (the trustee). The trustee controls the money, but can only spend it for the benefit of your child (the beneficiary). If the trust is created and administered correctly, the property can be used to benefit your child while your child remains eligible for disability benefits.

That said, a special needs trust only works if the property you want to leave to your child goes to the trust instead. For much of your property, this can be accomplished with your will. But as we wrote last week, some of your property may pass outside your will by law – life insurance with a designated beneficiary, houses owned by joint tenants with a right of survivorship, bank accounts with a payable on death beneficiary.

One type of property that often passes by law is retirement accounts. If you designate a joint beneficiary, the account will typically pass outside your will to that beneficiary. And because of favorable tax treatment, there is usually good reason to designate a beneficiary on your retirement accounts.

That designated beneficiary can be the trustees of your child’s special needs trust.

The beneficiary designations have to be completed in a particular way in order to achieve this. FriedmanLaw can work with the custodian of your retirement account (Vanguard, Fidelity, etc.) to set up beneficiary designations leaving the account to the special needs trust.

If you’re interested in learning more, please call or email FriedmanLaw today.

Tax Reform– Medical Expense Deduction Lives

What a difference a few months can make!  On November 21, 2017, Mark Friedman, Esq. wrote a blog entry explaining that the then tax reform bill would eliminate the deduction for medical expenses creating major issues for many people.  As Mark noted,

“That’s a big deal for people in nursing homes, especially people in nursing homes on Medicaid with relatively high incomes.  That is because once you go on Medicaid, your income must be spent according to Medicaid rules. When you apply for Medicaid, the agency gives you a breakdown at the end that shows how you have to spend your income each month. For people without a spouse, usually all of your income must go to pay the nursing home or assisted living facility, with perhaps a small amount allowed to pay for health insurance.  There is no allowance to pay for taxes.”

Thus the tax reform bill would have created particular issues for families that liquidate IRAs and 401(k) accounts to fund long term care.

Mark ended his blog post by writing, “I hope that lawmakers will take this into account as tax reform progresses.”  Fortunately, Congress heard the uproar from elder law attorneys and other groups and eliminated that feature of tax reform.  In fact, the recent tax legislation temporarily expands the medical expense deduction.

To learn how this may affect you, make an appointment with Mark or me.  In the meantime,  a hearty toast to democracy in action.


Understanding Medicare

Medicare is a health insurance program sponsored by the federal government. Medicare is available to most people at age 65, but younger people may qualify for Medicare when collecting Social Security Disability Insurance (SSDI) or due to contracting end stage renal disease or Lou Gehrig’s Disease (ALS).

If you become eligible for Medicare at age 65, you can enroll in Medicare during your initial Medicare enrollment period of 3 months before to 3 months after the month in which you reach age 65. After receiving Social Security Disability Insurance (SSDI) for 24 months you should automatically receive Medicare. If you have group health insurance through your current employment or your spouse’s current employment, you may be eligible for a Medicare Special Enrollment Period.

As discussed in greater detail in the  Medicare section of, you also can enroll in Medicare late. However, delaying Medicare can lead to Medicare late enrollment penalties and may leave you without sufficient health insurance (especially if Medicare would provide primary health insurance coverage).

While you may be tempted to save on premiums by deferring Medicare, over a long lifetime, Medicare late enrollment penalties can dwarf Medicare premium savings from deferring Medicare. Your Medicare Part B premium may go up 10% for each full 12-month period that you could have had Part B, but didn’t sign up for it. In addition, you may have to wait until the Medicare General Enrollment Period (from January 1 to March 31) to enroll in Medicare Part B, but Medicare coverage won’t start until July 1 of that year.

You also may face a Medicare prescription late enrollment penalty if, for any continuous period of 63 days or more after your initial enrollment period is over, you go without Medicare prescription insurance or other creditable drug coverage. Large employer drug plans typically are creditable but check with your employer to make sure.

A Medicare late enrollment penalty should not apply if you are covered by an employer or union group health plan based on your own or a spouse’s current employment. Because COBRA and retiree health plans are based on former employment, Medicare late enrollment penalties apply if you delay enrolling in Medicare Part B because you have COBRA or retiree health coverage but not current active employment coverage.

Finally, delaying Medicare enrollment can leave you uninsured. Medicare may be primary or secondary depending on various factors. If Medicare is primary, Medicare rather than other health insurance (such as COBRA or retiree coverage) pays first. Where Medicare normally would be primary but you don’t sign up for full Medicare coverage, other health insurance typically won’t pay costs Medicare normally covers. When through no fault of the secondary insurer, you fail to obtain Medicare that would be primary insurance, the secondary coverage may pay little or nothing on your claim leaving you liable for costs Medicare normally would cover!

Medicare usually is primary to small employer health plans, retiree health plans, COBRA, Medigap insurance, and some other coverages. For instance, if you are eligible for Medicare but don’t take Medicare because you are covered by your spouse’s retiree health insurance, your spouse’s plan may not cover you for most costs.

For further information on Medicare, see the elder law section of However, Medicare rules are extremely complex and errors can prove catastrophic. Since, this site provides only general information on Medicare, it is important to obtain individual legal counsel on your own issues

Five Reasons why Estate Planning is Important

This is another in a series of guest articles we’ll be posting from attorney colleagues across the country on issues relevant to our readers.  Enjoy!

Because we never know what the future holds, it’s important to plan your estate now rather than put it off until later when it might actually be too late. Let’s take a quick look at the specific reasons why being proactive when it comes to your estate is important:

1. Preparation in case disaster happens
– Estate planning provides you with the opportunity to appoint one or more people to make medical decisions on your behalf if you lose the ability to do that on your own.
– You can specify what, if any, extraordinary measures healthcare providers should take in the event you are incapacitated.
– Designate who will pay your bills during the time you are recovering from a medical issue or emergency.

2. Complete picture of finances
– As part of estate planning, you will inventory your debts and assets.
– You will designate who will inherit your assets and how you want them distributed. This is also true for sentimental items that have little financial value.
– As your review your important documents and other paperwork, you may find that updating some of them is necessary and would have otherwise been overlooked. This includes designating beneficiaries.

3. Reduce the stress of your family members in advance of your passing.
– When estate planning is not done in advance, it’s left to the surviving family members who will already be grieving your loss. Handling the deceased’s finances, distribution of assets, and other matters can add substantial stress to what they will already be experiencing.

4. Provision for your loved ones
– Specify guardians for your minor children.
– Set up a trust for your special needs children or other relatives to distribute funds to them after your passing. An estate planning attorney Scottsdale AZ can assist with this in a manner that the payments don’t interfere with the recipient’s government benefits.
– Designate which of your children from previous relationships and your current relationship should receive various of your assets. This can have the added benefit of protecting those assets from former spouses and creditors. Speak to an estate planning attorney for more details.

5. Establishes a plan in case of your incapacitation.
Estate planning makes it possible to provide information and answers to family members when they will most need to know but are unable to ask you. It is also likely to reduce tensions and conflict among your surviving family members. You can designate any or all of the below:
– The executor of your estate.
– End of life medical care that you wish to have.
– The disbursement of your retirement account funds.
– The disbursement of your sentimental items.
– The handling of your social media accounts.

Too many people delay or avoid planning their estate for any number of reasons. Taking a proactive approach to how you want your estate handled can be beneficial for your entire family. Talk to an estate planning attorney today to discuss your legal options.

Thanks to our colleagues and contributors from Hildebrand Law for their insight into estate planning practice.

Medicaid to Pay for Long Term Care in Nursing Home, Assisted Living, or Home

Medicaid can pay for long term in a nursing home, assisted living facility, or at home with aides, but with long term care costing thousands of dollars each month, long term care could easily wipe out your life savings unless you plan effectively.  In  “What-should-you do-now-to-protect-against-nursing-home-costs?” [April 26, 2017] Mark Friedman discusses Medicaid and other long term care planning tools  This article focuses on how to get New Jersey Medicaid or New York Medicaid to pay nursing home, assisted living, or in home aide long term care costs– particularly in crisis situations.


So what should you do if a spouse or parent has a stroke or contracts dementia?  The first thing to consider is engaging an elder law attorney.  Do it yourself Medicaid planning is hard because Medicaid is governed by complex rules that often defy common sense.  A mistake that delays Medicaid eligibility for as little as one month can cost you over $10,000!


Clearly trying to qualify for Medicaid without consulting an elder law attorney is risky.  What about the friendly Medicaid planning firm recommended by dad’s nursing home?  Well, the longer dad stays off Medicaid, the more the nursing home earns because Medicaid pays only a fraction of private pay long term care costs.  Therefore, a firm chosen by the nursing home may not be eager to qualify dad for Medicaid while he still has assets left.


So what are some Medicaid planning options?  To qualify for Medicaid, you must have limited  finances and pass a Medicaid care screening (which NJ Medicaid calls a PAS).  Depending on where you receive care, you may have t0 take steps to obtain the PAS.  At FriedmanLaw, elder law attorneys employ various techniques such as gifts, purchases, and home improvements to qualify clients for Medicaid to fund long term care– often protecting substantial savings.


While Medicaid may impose penalties for some gifts made during the five year lookback period, it hardly ever is too late to benefit from Medicaid planning.  Some gifts are exempt and even non-exempt gifts can yield savings (sometimes very large savings) in the right situations. We also may suggest coupling gifts with annuities to save large amounts.  However, planning must take account of complicated Medicaid laws and regulations.  Gifting too much or too little or applying for Medicaid too soon can be very costly.


While most gifts (whether or not taxable) during the lookback period trigger a penalty period that delays Medicaid eligibility, some gifts for a spouse or disabled person and some gifts of a home are exempt– provided the gift meets various technicalities.  For instance, a caregiver child gift can protect mom’s home but only if it meets stringent Medicaid requirements.  Starting the  Medicaid gift penalty period at the right time can save a lot.  For instance,  $150,000 gift to grandchildren in January 2017 would trigger a roughly 15 month penalty period but the 15  months won’t even start until much later unless the gift is designed to accelerate the penalty start date.


Sometimes we help clients protect assets by funding long term care in a nursing home, assisted living facility, or at home without incurring a Medicaid penalty period.  This may involve gifts to or in trust for a disabled child, spousal annuities, prepaid funeral accounts or other techniques.  Yet savings won’t occur unless these techniques follow Medicaid law, which can be tricky.  Finally, unless wills and powers of attorney are coordinated with Medicaid planning, savings may never arise.  Therefore, like other elder law attorneys, FriedmanLaw strongly advises against do it yourself Medicaid planning especially since technicalities and exceptions apply to all the planning techniques discussed in this post.




Don’t Lose Supplemental Security Income (SSI), Social Security Disability (SSD), or Medicaid If You Marry

Supplemental Security Income (SSI) and Social Security Disability (SSD) are monthly payments to an individual who is disabled per Social Security definition.  Medicaid can cover health care for people who meet the Social Security definition of disabled and in some cases developmental disabilities housing as well.


Although the actual test is very technical, for the most part an individual is Social Security Disabled if he/she can’t work and earn significant income due to a disabling medical condition expected to last at least a year or result in death.  Significant income is at least $1,170 ($1,950 if blind for Social Security purposes) per month in 2017.


Eligibility and benefits depend on income and assets for SSI and Medicaid but work history for SSD.  To read more on qualifying as Social Security disabled and Social Security disability benefits, click this link


Because SSI and Medicaid base eligibility and benefits on income and assets of both spouses, marriage can lead to loss or reduction of benefits.  This is particularly likely if the new spouse has more than very modest income and savings.  The exact impact would depend on the type and amount of income and savings and the make up of the household.


Social Security Disability (SSD) eligibility and benefits don’t depend on finances.  Instead, to qualify for SSD, you must have sufficient Social Security covered work experience or qualify for child insurance Social Security Disability benefit SSD per 42 U.S.C. 402(d).


Child insurance Social Security Disability benefit SSD is paid to people who become disabled before age 22 if a parent either receives Social Security retirement or disability benefits or died after working sufficient quarters of Social Security covered work to qualify for Social Security retirement or Social Security Disability benefits.


Marrying an individual who doesn’t receive Social Security Administration benefits will disqualify you for child insurance Social Security Disability SSD (i.e. SSD on your parent’s work record).  However, marriage won’t cause you to lose Social Security Disability SSD benefits based on your own work history.  Unfortunately, it is difficult for an individual with developmental disabilities or other early onset serious disabilities to accumulate sufficient quarters of Social Security covered work to qualify for Social Security Disability benefits.


Although an obvious way to avoid losing benefits is simply not to marry, that may be unfair and extreme. A more acceptable option could be to live together without a formal marriage.  But even that may be overkill because not all marriages lead to loss of benefits.  Depending on your situation, FriedmanLaw may be able to guide you with individually tailored planning to let you marry and keep SSD, SSI, and Medicaid.


Lawrence Friedman Receives Distinguished Legislative Service Award

The New Jersey State Bar Association has awarded attorney Lawrence A. Friedman its 2016 Distinguished Legislative Service Award for helping to enact the Uniform Trust Code (“UTC”) in New Jersey.  The Distinguished Legislative Service Award is the Bar Association’s highest honor for noteworthy legislative service while the UTC codifies over 100 years of trust law into one comprehensive statute that is largely uniform over many states.

In bestowing the award, Bar Association President, Thomas Prol, noted,
This significant piece of legislation not only impacts the practice of trusts and estates law, but impacts young lawyers who may now find the practice of trusts and estates law more accessible.  Your efforts on drafting this legislation and ensuring its passage is exemplary of the kind of work the Association proudly encourages and supports and we are grateful for your service.

Larry drafted statutory provisions to protect special needs trusts and worked with Bar Association colleagues to resolve concerns of the Legislature and Governor and facilitate New Jersey’s enactment of the UTC in 2016.  Regarding Friedman and his colleagues, Bar Association President Prol also said,
“Their knowledge in this area of the law is unparalleled, and they continue to dedicate their efforts to teaching the UTC to their colleagues as evidence of their continued commitment to their profession.  In addition, their work has not gone unnoticed. They are called upon by legislative staff when questions arise in the area of trust and estate law. Their contributions to the association’s legislative program have proven invaluable.”

The Bar Association also awarded its  Distinguished Legislative Service Award to Lawrence A. Friedman in 2000 for his work in drafting earlier legislation to help New Jersey residents use special needs trusts.  Special needs trusts are an important tool that lawyers use to help people with disabilities enjoy a better quality of life.

Medicaid Gifts and the Simplified Application

Last week, New Jersey Medicaid announced a simplified process for applying for Medicaid for people with income below the federal poverty level who haven’t made gifts.  We wrote about that in a blog post last week.

This simplified process for some applicants is a welcome development.  Unfortunately, however, as is often the case with Medicaid, it’s not as simple as it appears.

The process involves applicants being able to use an affidavit to attest that no gifts were made, instead of having to submit five years of financial records for the Medicaid agency to review.  However, it’s not always clear what’s a gift, and transfers that wouldn’t be gifts in other contexts are gifts for Medicaid.

Under Medicaid rules, a gift is a transfer of assets for less than fair market value.  A gift can be any amount and to any recipient.  Unlike with tax, there is no $14,000 exemption, and charitable donations can be counted as gifts.

For example, if Jane gives a $10,000 wedding present to her son, it’s a gift.  If she transfers $50,000 in stocks to her daughter, it’s a gift.  If she makes a donation of $5,000 to her church, it’s a gift.  If she sells her car to her sister for $4,000, when the car is worth $10,000, it’s a $6,000 gift.

Gifts incur a Medicaid penalty – in the long term care context, for every $10,000 you give away, you lose roughly one month, during which Medicaid will not pay for your care.  However, some gifts are exempted from incurring a penalty, including certain gifts to your spouse, a child with disabilities, and others in certain specific situations, as well as gifts outside the Look Back Period.  (Since exempt gifts are very technical, you should consult with a lawyer on specific questions.)

It’s not clear whether someone who has made an exempt gift can use the affidavit.  It’s a technical question, and hopefully the answer will become clear as this simplified process sees more use.  However, you certainly don’t want to be in the position of unintentionally lying to the government in an affidavit, so if you have any questions about whether you’ve made gifts, you should speak with elder law attorneys like FriedmanLaw about your specific situation.

Medicaid simplifies Application Process for Some Applicants

Today, New Jersey Medicaid issued a MedComm (Medicaid Communication) saying that applicants with incomes under the federal poverty level (currently $983 / month) can use an affidavit in lieu of the lookback review.

When applying for long term care Medicaid benefits, the Medicaid agency usually requires you to submit five years’ worth of statements for all financial accounts.  A Medicaid worker reviews these statements to determine whether you’ve made any gifts in the past five years.  Gifts incur a penalty, a period of time during which you lose Medicaid benefits.

This review of financial records is very burdensome for all involved.  It’s onerous for applicants, who must gather five years of records and explain their entire financial life to a stranger.  And it’s arduous for the Medicaid worker, who has to review all the statements and verify each significant deposit and withdrawal.

According to the new MedComm, applicants with income under the federal poverty level who haven’t made any gifts in the past sixty months will now be able to submit an affidavit attesting so.  In doing that, the applicant will avoid having to submit financial records for the past sixty months.  This will make the Medicaid application process worlds easier for applicants with modest income who haven’t made gifts.  This is especially true where a third party is trying to assemble the records, for example, a child-caretaker trying to piece together their parent’s financial records.

The affidavit can only be completed by the individual, or his or her spouse, guardian or agent under a power of attorney.  So for a widow who lacks capacity to sign the affidavit herself and never created a power of attorney, her children (or others) would have to apply for guardianship in order to use the affidavit.  This drives home the need to have a well-drafted power of attorney, especially if you may need long term care.

We have yet to see how this shakes out, but if things go as stated in this MedComm, then we at FriedmanLaw are excited to be able to offer some of our clients a simpler way to apply for Medicaid.

For specific information on Medicaid or long term care, please call or email us today.

Protect Your Loved One with Special Needs

Over the 30+ years I’ve represented families of people with serious disabilities, many clients have asked how how to make gifts or leave an estate for a child/grandchild/other loved one with special needs without disqualifying the child for Supplemental Security Income, Medicaid, and other means tested government programs.  If an individual with Medicaid or other means tested aid receives more than nominal amounts directly, she probably will be disqualified.  While we often can help restore benefits eventually, there could be a substantial cost such as eventual Medicaid payback or loss of benefits for several months or more.


Obviously, therefore, outright gifts/inheritances are not an attractive option to benefit a loved one with special needs.  A far better choice is to provide in will, payable on death designations, IRA/401 plan beneficiary forms, and other gift and estate plans that amounts to benefit a child with special needs shall be paid into a special needs trust (also called supplemental needs trust or SNT).  Extensive discussions of SNTs appear under the Special Needs drop down menu tab above and throughout  To summarize, a properly drafted SNT can supplement many kinds of means tested benefits without risking disqualificatiion.


Sometimes parents won’t do SNT planning because they think they can reach the same result at lower cost by giving a child who isn’t disabled a gift or inheritance intended to benefit a special needs child.  The Wisconsin Court of Appeals’ Sept. 3, 2015 decision in Robins v. Foseid and Walters illustrates the risk.  A parent’s estate plan left a double share to not disabled child A and no share to disabled child B.  While the parent’s intent likely was that A would spend the second share for B, the court ruled that A had no such obligation and could spend the share as A chooses.


Even if you are convinced that your child would always look out for a disabled sibling, it still is risky to leave a disabled child’s share to a sibling rather than an SNT.  The not disabled child could surprise you and keep the money and creditor issues, divorce, college funding and other circumstances could prevent the money from benefiting your disabled child.  In short, a special needs trust usually is the best way to provide for a loved one with a serious disability


Hearing Loss Affects Longevity for Seniors

On Oct.1, 2015, Reuters reported that a recent study involving researchers at Johns Hopkins University School of Medicine in Baltimore, Maryland shows that older people with significant hearing loss are at risk to die sooner than people with normal hearing.  While researchers haven’t determined the cause of the connection, the study points to hearing impairment as at least a warning sign and maybe even a contributor to lowered survival odds.

“In the simplest terms, the worse the patient’s hearing loss, the greater the risk of death,” lead author Kevin Contrera said of the study’s findings. While prior research has linked hearing problems to negative health effects, few studies have addressed mortality risk, Contrera and his colleagues write in JAMA Otolaryngology-Head and Neck Surgery.

Reuters notes that a hearing loss researcher who teaches at the University of Manchester in the U.K. and had no connection to the study wasn’t surprised by the results because seniors with hearing loss tend to have more difficulty with communication, are more socially isolated, and are less able to care for their own long-term health conditions. However, it isn’t clear whether increased mortality risk arises from hearing loss itself or these related conditions.  Since most older people have some hearing impairment, hearing loss could just be a marker of being older and sicker in general.

The study involved data on 1,666 adults from a nationally representative survey conducted in 2005-2006 and 2009-2010, as well as death records through the end of 2011. The study group were all over age 70 and had undergone hearing testing. Using World Health Organization definitions of hearing impairment in light of age, the researchers found that people with moderate or severe hearing impairment had a 54 percent greater risk of dying than those with normal hearing. In contrast, participants with mild hearing impairment had a 27 percent greater risk of mortality. Meanwhile, even after injecting other potential mortality indicators into the mix, people with moderately or severely impaired hearing had a 39 percent higher risk of death than those without hearing problems, and those with mild hearing impairment had a 21 percent greater risk.

Since two thirds of adults over 70 experience some hearing impairment, every hearing impairment alone doesn’t automatically indicate a major health issue. Still, in light of the links shown in the study, seniors with noticeable hearing loss would do well to discuss the study with their health providers.

While this study is outside the typical topics we discuss on this blog, at FriedmanLaw, we think it’s important to take a broad approach to solving legal issues. Thus, we hope you have found this post useful.


Appellate Division Makes Do It Yourself Medicaid Gift Planning Even Riskier

The Appellate Division of the Superior Court of New Jersey laid to rest two vexing Medicaid planning issues in C.W. v. Div. of Medical Assistance and Health Servs. (Aug. 31, 2015 #22-2-7790) Since nursing homes average over $10,000 per month in New Jersey and Medicaid is the only government program that funds long term care, these rulings should be of more than passing interest to anyone with a loved one in failing health.

C.W. v. Div. of Medical Assistance and Health Servs. dealt a death blow to two areas of contention. First is whether the Medicaid disqualification penalty period due to gifts is recalculated as the average cost of nursing home care changes from year to year. The second question is whether a penalty period is reduced when some (but not all) gifts within the lookback period are returned.

To understand these issues, we first must consider how one qualifies for Medicaid. Medicaid eligibility is discussed in detail under the elder law drop down menu, but we’ll summarize two key bones of contention in C.W. v. Div. of Medical Assistance and Health Servs.

An individual must satisfy both financial and care requirements to obtain Medicaid to fund long term care. Thus, resources and income of a Medicaid applicant (and spouse in most cases) must fall within Medicaid caps. However, where the applicant asks Medicaid to fund long term care, gifts by either spouse during a lookback period are taken into account. The lookback period is roughly the 60 months prior to application in addition to the application date forward.

Non-exempt gifts during the lookback period disqualify the applicant for roughly a month of Medicaid funded long term care for each $10,000 gifted by either spouse. The $10,000 divisor represents average nursing home costs in New Jersey so it varies from year to year.

The divisor can increase quite a lot if the gift is early in the lookback period and nursing home costs rise substantially during the lookback period. For instance, if gifts total $120,000 and the gift divisor is $10,000 per month, the long term care Medicaid disqualification penalty period would be 12 months. However, $120,000 in gifts would trigger only a 10 month penalty period if average monthly nursing home costs rose to $12,000.

As the examples show, the higher the divisor, the shorter the penalty period. Since average nursing home costs tend to increase over time (often much more than general inflation), applicants generally could qualify for Medicaid sooner if gift penalties were based on current divisors rather than staying static from the start of the penalty period.

Rather than start when gifts are made, the Medicaid gift penalty period is deferred until the individual both has applied for Medicaid and would receive Medicaid to fund long term care but for the gifts that trigger the penalty period. Thus, the penalty period wouldn’t start until June 2016 if the applicant’s spouse gifted $250,000 in August 2015 but excess resources weren’t spent down and a Medicaid application filed until the end of May 2016. Since the penalty period would cover multiple years this raises the question whether the penalty period is based on the average nursing home cost in 2016 or is recalculated each year with the new annual divisor.

In C.W. v. Div. of Medical Assistance and Health Servs., the Appellate Division held that once the penalty period starts, it continues to run and isn’t shortened even if the gift penalty divisor rises in the interim. Even a new Medicaid application doesn’t allow for the penalty period to be recalculated.

The Appellate Division’s second holding may prove even more vexing. The court ruled that a penalty period need not be reduced when some but not all gifts within a lookback period are returned. Thus C.W. argued that the Medicaid penalty period should be reduced pro rata when gifts are returned. For instance, if mom gave her son $180,000 in May 2015 and the son either returned $80,000 to mom in December 2015 or spent $80,000 on mom, C.W. would say the penalty period should be based on $100,000 rather than $180,000.

The Appellate Division rejected partial penalty abatement and held that the penalty period is unchanged where only some gifts within the lookback period are returned. In addition, the court held that a gift penalty still applies where a gift recipient deposits the gift in the recipient’s name but spends it on the donor.

So, what should we learn from C.W. v. Div. of Medical Assistance and Health Servs.? The most important lesson is a principle we have stressed throughout our website– do it yourself long term care or Medicaid planning is incredibly risky. Errors that might seem inconsequential to a lay person can prove catastrophic. Spouses should seek Medicaid counsel before making significant gifts whenever there is reason to fear that either spouse may need long term care in the next 60 months or so.

Key Considerations in Settling an Estate

Administering an estate can be a daunting task.  Where the decedent leaves a will, the person(s) named as executor(s) must probate the will and fulfill the duties of the estate personal representative.   Where there is no will, the Surrogate’s Court appoints an administrator to fulfill these obligations.  Either way, the executor/administrator must settle the decedent’s debts and obligations, safeguard income and assets, file required tax returns, address guardianships/trusts for minors and beneficiaries with special needs, and distribute the estate according to law.  It can be a lot of work– even more so if trusts are involved.

Although New Jersey has some of the country’s most user friendly will and estate laws, the process is anything but intuitive.  For instance, an executor/administrator can have personal liability if he distributes before the creditor claim limitation period runs and even, thereafter, if distributions aren’t wholly correct.

New Jersey law requires an executor/administrator to obtain and file a refunding bond before distributing.  The executor/administrator also must obtain a qualifying child support judgment search and resolve any child support judgments that turn up.  An executor/administrator who ignores these obligations risks substantial personal liability.  In addition, to foreclose claims down the road, the executor/administrator should obtain releases from beneficiaries or settle an account in court.

Depending on estate beneficiaries, assets, income, deductions, and tax deposits, the executor/administrator of an estate may be liable to pay tax and file estate tax returns and/or inheritance tax returns as well as final income tax returns for year in which decedent died and fiduciary income tax return thereafter.  As estate attorneys, we normally prepare our clients’ estate tax returns and inheritance tax returns and determine tax. Where appropriate, we can suggest strategies [such as disclaimers] that can reduce tax.

Federal tax laws require IRAs and many other retirement plans [401(k), pension, profit sharing, SEP. government plans, and other benefit arrangements] to distribute required minimum distributions (RMD) once an individual reaches age 70.5 and thereafter. Thus, unless a decedent has taken the full RMD, an estate may have to take RMDs for the year in which a decedent dies. Beneficiaries may face RMDs thereafter. When RMDs aren’t made, expensive tax penalties can arise.

While I could go on and on about tasks that must be performed to administer an estate properly, the point of this article is to show that what may first appear to be a simple task carries with it many less obvious obligations.  At FriedmanLaw, we apply our years of experience in trust and estate law to guide executors/administrators through the steps needed to settle an estate.  We also take obligations (such tax compliance) off our clients’ hands.

In short, if you may become an executor/administrator, we would look forward to working with you to settle the estate correctly and limit your workload.

As this website provides general information and isn’t tailored to your particular situation, it doesn’t constitute legal advice and may not take into account rules and exceptions that affect you. Although updated from time to time, this website may not take account of recent legal developments or differences in laws from state to state. For safety sake, obtain individual legal advice before you act! You assume all risk of acting on information contained in this website. This website doesn’t constitute legal advice, and no attorney-client relationship exists unless FriedmanLaw and you execute a written engagement agreement. Please contact us at 908-704-1900 to discuss engaging FriedmanLaw to help resolve your legal concerns.
Homepage photo: Cows grazing at Meadowbrook Farm, Bernardsville, NJ by Siddharth Mallya. October 23, 2012.
Interior photo: Somerset hills pastoral scene by Lawrence Friedman.