Elder Law Q&A

01. How do you approach elder law?

As people age, their legal issues evolve and new concerns can come to the forefront. Elder law issues typically involve several areas of the law such as wills, trusts, estates, retirement plans, health insurance, IRAs, housing, long term care, capacity, tax, government programs, and finances. Because a narrow focus can miss important factors, FriedmanLaw takes a multi-discipline approach drawing on Lawrence Friedman’s broad background in tax and estate planning, (LL.M. from N.Y.U. School of Law Graduate Tax Program), elder law (Certified as an Elder Law Attorney by National Elder Law Foundation, an organization approved by the American Bar Association, former chair New Jersey State Bar Association Elder and Disabilities Law Section, founder and moderator of New Jersey Institute for Continuing Legal Education’s annual Sophisticated Elder Law program), special needs (New Jersey State Bar Association’s Distinguished Legislative Service Awards in 2000 and again in 2016 for drafting legislation to further special needs trusts) and Mark Friedman’s similar expertise, experience teaching and publishing on elder law, and leadership positions in the elder law bar.

02. What should I do if my loved one may need long term care?

Forgetfulness, frailty, confusion, and changes in behavior can be warning signs that shouldn’t be ignored. Early medical and legal advice may help limit decline and preserve care and financial options. Waiting to seek counsel may forfeit opportunities to execute important legal documents and avoid an expensive and intrusive guardianship.

03. How can you help me fund long term care without going broke?

We analyze your circumstances and various asset preservation techniques to develop plans that can fund quality care and preserve some savings and the marital home. Although early planning maximizes options, significant savings often can be realized even after a loved one is in a nursing home or assisted living facility (despite Medicaid’s look back rules). We help clients navigate the complexities of Medicaid, Medicare, and insurance and avoid traps for the unwary that can derail gifts and Medicaid applications undertaken without legal counsel.

04. Why do I need a lawyer to seek Medicaid?

Medicaid rules are complicated and often defy common sense. A well designed Medicaid plan could may protect thousands that otherwise might be lost due to missed opportunities or improper timing of gifts and Medicaid applications. For instance, an individual who applies for Medicaid too soon after making gifts may have to wait many, many years to get Medicaid whereas knowledgeable planning could qualify him for Medicaid in five years or less.

05. Why should I consult a lawyer before applying or contracting for nursing home, assisted living, continuing care retirement community, or long term care insurance?

Even an application can contain terms and representations that limit your rights down the road while most contracts are complex legal documents. For instance, we often modify facility contracts to avoid obligating a family member as guarantor and remove impediments to Medicaid planning. Continuing care retirement community contracts can be difficult to understand and vary dramatically from marketing presentations. Marketers may stress that stiff entry deposits are refundable on exit but rarely explain that refunds will be delayed or foregone if the community develops financial difficulties or your unit isn’t relet. Similarly, promoted amenities probably won’t be built if the developer has financial issues. Long term care insurance policies are very complex and have various options that are crucial in some circumstances while inappropriate for others. Partnership policies can save substantial sums, but not all long term care insurance qualifies.

06. Why are form powers of attorney a problem?

To maximize savings if mental capacity declines, a power of attorney must explicitly authorize long term care planning. Generic powers of attorney often lack these crucial terms. Because it is too late to sign new documents once faculties decline, a custom power of attorney should be drawn while you are ok. In fact, even young people can benefit from carefully designed powers of attorney.

07. Why not rely on the simple living will forms hospitals provide for free?

An advance directive for health care allows you to appoint a health care surrogate and direct or limit life prolonging care in case of terminal condition, irreversible coma, or certain progressive diseases like Lou Gehrig’s Disease. If you lose capacity but aren’t in an end of life situation (such as if dementia strikes) an advance directive also allows your surrogate to authorize pain killers and direct treatments to ensure you receive the kind of care you prefer. Simple living will forms may not even address common situations. Without a comprehensive advance directive, your wishes may never see the light of day. Everyone should have an up to date health care directive. Like powers of attorney, health care advance directives must be updated from time to time to be honored and to address changes in the law and your own wishes.

08. Why are quality wills, deeds, and beneficiary designations crucial?

Changes in tax and other laws or family circumstances can cause wills and beneficiary designations to vary from your current wishes. In addition, inheritances and other receipts can disqualify an individual for Medicaid to fund long term care and lead to claims against an estate. Therefore, wills, deeds, accounts, and IRA and insurance beneficiary designations generally should be changed when a loved one may need long term care and reviewed periodically in any event.

09. Do I need guardianship if my parent or spouse develops dementia?

An individual who no longer can make important decisions needs either a guardian or an agent to manage medical care, residence, finances, etc. Unless your loved one with dementia has a comprehensive advance directive for health care and either a broad power of attorney or financial management trust, guardianship likely will be required. Friedman Law often helps families apply to court to obtain guardianship. However, guardianships can prove expensive and intrusive and entail court supervision and loss of dignity and independence. Therefore, we recommend considering advance directive for health care, power of attorney, and financial management trust before you no longer can execute legal instruments due to dementia or other cognitive impairment. However, even individuals with some dementia may retain sufficient capacity to appoint agents or employ other alternatives to guardianship. Therefore, it is important to seek counsel as soon as you notice your loved one’s capacity declining.

10. How can I protect the value of my home in case I someday need long term care?

Simply deeding your home to children may jeopardize tax breaks and risk losing your home should a child become disabled, divorce, die, incur financial difficulties, or just choose to evict you. In contrast, a life estate deed can protect your right to live in your home as well as tax benefits while sheltering the house against long term care costs. However, like all legal documents, life estate deeds require legal advice to ensure they are right for your circumstances.

11. How can a Special Needs Trust protect government aid for a disabled person?

Anyone who can’t support himself due to disabilities may qualify for government aid like Medicaid, SSI, housing subsidies, and free group homes, but most gifts and inheritances (whether outright or in an ordinary trust) will jeopardize eligibility. By establishing a Special Needs Trust [sometimes called Supplemental Needs Trust] now, you can make gifts during your lifetime or by Will to provide for a disabled person without disqualifying him/her for government benefits. You need a Special Needs Trust whenever you wish to provide for a descendant, sibling, spouse, or other loved one who is or may be too disabled to work. Without a Special Needs Trust, your gift substitutes for government funds instead of supplementing government aid.