Archive for August, 2015

Qualifying for Medicaid with a Prepaid Funeral

Posted on: August 28th, 2015 by Mark R. Friedman

A prepaid funeral fund may seem morbid or distasteful to some. But for people who need long term care, a prepaid funeral trust may be an attractive way to put money to use that would otherwise be lost.

Long term care in a nursing home, assisted living facility or with home care aides, can cost more than $10,000 per month. Medicaid will pay for long term care, but only if applicants have less than $2,000 in resources (assets that are available to pay for food or shelter).

Money in an irrevocable account in the New Jersey prepaid funeral trust fund does not count towards Medicaid’s $2,000 resource limit. In other words, money put towards a prepaid funeral will not disqualify you from Medicaid or SSI, making it a very useful planning option.

There are a few catches. First, to qualify for Medicaid, the prepaid funeral account must be irrevocable. That means you can’t take money out after you’ve put it in. Second, any remainder left after the funeral goes to Medicaid. You use it or lose it, so it doesn’t pay to overfund the account.

Still, it’s better to put money to use in a prepaid funeral than to lose it to long term care costs.

The human mortality rate remains stubbornly fixed at 100%. Sooner or later everyone will need a funeral, and the cost can easily reach $10,000 or more. Once you go on Medicaid you can’t have more than $2,000, so if a Medicaid beneficiary dies without a prepaid funeral, it falls on family members to pay the funeral cost. That’s why prepaid funerals are important. And since there are few restrictions, prepaid funerals are a useful and versatile tool for Medicaid planning.

To learn more about creating a prepaid funeral account, you can visit the NJ Funeral Directors Association or talk with a funeral home of your choice. To learn more about Medicaid planning and long term care, call or email us at FriedmanLaw.

Creating a Special Needs Trust that Works for You

Posted on: August 21st, 2015 by Mark R. Friedman

These days there are a lot of lawyers offering to create a special needs trust.

A special needs trust is a legal instrument that allows families to set aside money for a person with disabilities, without disqualifying her from public benefits like Medicaid and SSI. If you have a child with disabilities, a special needs trust is vitally important to ensure she gets the best care she can. That’s why it’s also vitally important to ensure you create the best trust you can.

Special needs law is very precise and technical, and some lawyers go into it without understanding the nuances. Some lawyers use software to create trusts based on forms, with little tailoring to the client’s needs. In the realm of special needs law, cookie-cutter form trusts can end up doing more harm than good.

For example, many trusts use a distribution standard (i.e., when the trustees should pay out money for the beneficiary) of “health, education, maintenance and support,” or HEMS. With a HEMS trust, the trustees must pay money to provide for the beneficiary’s health, education, maintenance and support. Some lawyers think a HEMS standard should be including in special needs trusts (SNT), but that is the opposite of what should be in a SNT.

With Medicaid and SSI, funds are counted towards resource limits if they are available for support. If a trust has an obligation to support the beneficiary, the trust funds will disqualify the beneficiary from SSI and Medicaid. Your child will lose his benefits, and you will have spent legal fees for nothing.

Even when an SNT does fulfill its basic purpose, it might not fulfill your family’s goals unless it’s customized. For example, some people with light disabilities are capable of living independently. If your child has borderline autism or mild intellectual disability, perhaps you’ll want them to live in their own apartment or house some day, and you’ll want the trust to pay for it.

Many form trusts include language that prevents the trustees from spending money in any way that would reduce the beneficiary’s benefits. If the beneficiary lives in a house for which the trust pays, that would reduce his SSI payments. However, in this scenario it might be worth it to have the SSI payment reduced slightly so that your child can live independently. A poorly-drafted trust would prevent the trustee from paying for your child’s housing, which is the opposite of your goal.

A well-drafted special needs trust should include precise legal language and be tailored to your goals. Form trusts rarely are. When creating something that your child may rely on for the rest of her life, it’s worth it to work with knowledgeable counsel.

At FriedmanLaw, we’ve been practicing special needs law for more than twenty years.  Lawrence Friedman is a former chair of the New Jersey State Bar Association Elder Law and Disability section, and has written dozens of articles.  Mark Friedman is current legislative counsel of the Elder Law and Disability Section, and speaks regularly on disability law issues.  If you work with FriedmanLaw, you can be confident your special needs trust will be tailored to your needs.

Gov’t proposes new regulations for nursing homes and other care facilities

Posted on: August 12th, 2015 by Mark R. Friedman

The federal government has proposed new regulations that govern how nursing homes, assisted living facilities and other long term care facilities treat their residents.

The Centers for Medicare and Medicaid Services (CMS) published the proposed regulations in the federal register in July 2015, and is taking public comments.

Many of the new provisions pertain to quality of life for facility residents. The regulations create new minimal standards for nursing staff – to – resident ratio, for example. It also strengthens requirements that facilities prevent infections, which according to CMS cause an estimated 388,000 deaths per year among the general populace. The regulations include a provision entitled “Freedom from Abuse, Neglect and Exploitation” that among other things prohibits facilities from employing staff who have been disciplined by a state for mistreating residents.

In one interesting provision, the regulations propose that residents who receive psychotropic drugs (which includes anti-psychotics) gradually have their doses reduced, probably as an attempt to reduce the use of chemical restraints in facilities.

These new proposed regulations aren’t yet binding rules, but they probably will be in the near future. By and large, the regulations protect facility residents and should be a welcome development for residents and their families. CMS has faced criticism of its regulations, enforcement and reporting in the past, and it is good that they are issuing new regulations.

Nota bene: For specific information on nursing home violations, families who are choosing a nursing home may find it helpful to view ProPublica’s nursing home violations database, including ProPublica’s New Jersey nursing home violations chart.

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.