By: Benjamin A. Schock, Attorney at Law. Macomb County, Michigan. About 200 organizations are marketing financial and estate planning services to help pension claimants with excess assets qualify for the VA’s Aid and Attendance and other pension benefits, the U.S. Government Accountability Office (GAO) concludes after a year-long investigation. Citing abuses among these firms, the agency recommends that Congress consider establishing a look-back and penalty period for pension claimants who transfer assets for less than fair market value prior to applying for pension benefits, similar to Medicaid. The GAO says the VA agrees that look-back and penalty periods for asset transfers are needed, and the New York Times reports that a bipartisan group of senators plans to introduce legislation giving the VA look-back authority. The Times also notes that a senior official at the VA says the department is drafting new regulations that would clarify the types of asset transfers that might disqualify a pension applicant. The GAO unveiled its findings in testimony at a June 6, 2012, Senate hearing, where lawmakers also heard from a VA official, veterans advocates and a woman whose father was victimized by one of the unscrupulous “pension poachers,” as Senate aging committee chair Sen. Herb Kohl (D-WI) dubbed them. “While these organizations may be legally entitled to operate,” said witness Lori Perkio of the American Legion, “it is unclear as to whether or not they are truly serving the best interests of the veterans and their families.” In Florida, for example, Perkio claimed that “American Legion service officers have run across a growing number of lawyers specializing in elder law who contact veterans directly through assisted living facilities (ALFs) with promises of how to divert income and assets to qualify for VA pension. Many of these attorneys do not provide follow up assistance with the ultimate pension claims process.” Posing as the children of an 86-year-old veteran with $300,000 in countable assets who was trying to qualify for a pension, GAO investigators contacted 19 firms and were told they could qualify as long as they put their money in trusts or annuities, for which the firms would charge fees. Two organization representatives said they helped pension claimants with substantial assets, including millionaires, obtain VA’s approval for benefits The GAO found that some organizations were providing products and services such as annuities that were potentially unsuitable for the elderly because the funds would be unavailable during their expected lifetimes without high withdrawal fees. The investigation also raised questions about whether veterans and their families are being informed of the Medicaid implications of asset transfers. “According to several attorneys we spoke with,” the report states, “some organization representatives are unaware or are indifferent to the adverse effects on Medicaid eligibility of the products and services they market to qualify for the VA pension.” In addition, the GAO heard concerns about misleading marketing strategies used by some of the companies. Again, “several attorneys” told GAO investigators that some organization representatives are leading potential pension claimants and their family members to believe they are veterans’ advocates working for a nonprofit organization, or are endorsed by VA. Investigators spoke with “an elder law attorney” who said that many attendees at assisted living facility presentations may have Alzheimer’s disease or dementia and are not in a position to make decisions about their finances. Apparently as a strategy to prevent such abuses, the GAO concludes by asking Congress “to consider establishing a look-back and penalty period for pension claimants who transfer assets at less than fair market value prior to applying for pension benefits, similar to other federally supported means-tested programs.” “If things continue as they are, and people see this program as a magnet for rip-offs and waste, I believe that in this financial climate support for the program will fall apart,” said Sen. Ron Wyden (D-Or), who the Times said plans to introduce legislation along with Sen. Richard Burr (R-N.C.). “I want to preserve this for people who need it.”
By: Patrick M. Simasko, Medicaid Attorney, Macomb County, Michigan. If you are attempting to obtain medicaid benefits for your nursing home stay, you must be aware of a recent law change. You may want to preplan your funeral by purchasing a life insurance policy. In Michigan, if the life insurance policy is not irrevocably transferred and integrated into your guaranteed funeral contract, then it can be treated as a countable asset and disqualify you from Medicaid otherwise its considered a final expense funeral policy which is not recognized in Michigan as being an exempt asset. If you loved one is going into a nursing home, call Simasko Law Offices at (586) 468-6793 for a FREE consultation regarding Medicaid benefits.
By: Benjamin A. Schock, Attorney at Law. Macomb County, Michigan. The Unites States Bankruptcy Court for the Eastern District of Kentucky found that a woman who was contractually bound through a nursing home admissions agreement to apply for Medicaid benefits on behalf of her husband’s and who failed to do so cannot discharge the debt owed to the nursing home through an individual bankruptcy. In re Plybon (U.S. Bankr. E.D. Ky., No. 11–10146, March 9, 2012). When Glenna Plybon admitted her husband to a nursing home, she signed the admissions agreement for said facility as the responsible party. (Simasko Law Offices recommends that the individual signing said agreement indicates that they are signing said agreement under a color of authority such as a power of attorney to help prevent individual liability) The admissions agreement stated that Mrs. Plybon was required to pay a co-insurance amount and apply for Medicaid benefits on Mr. Plybon’s behalf. Mrs. Plybon applied for Medicaid on behalf of her husband, but did not provide all the information required to process the application, so Mr. Plybon’s Medicaid application was denied. While the application was pending, Mrs. Plybon failed to make any payments to the nursing home and the nursing home discharged her husband. The nursing home sued Mrs. Plybon for the outstanding balance on Mr. Plybon’s bill. When Mrs. Plybon filed for bankruptcy, the nursing home argued the debt was non-dischargeable. Under bankruptcy law, a debt is non-dischargeable if it is incurred by fraud or defalcation (the willful neglect of one’s duty). The U.S. Bankruptcy Court for the Eastern District of Kentucky held in this instance that the nursing home debt is non-dischargeable. The court ruled that Mrs. Plybon was contractually bound by the admission agreement to apply for Medicaid on Mr. Plybon’s behalf and her “failure to obtain the Medicaid benefits and the subsequent failure to meet the financial obligations for Mr. Plybon’s care were a breach of her obligations under the admissions agreement as the party responsible for Mr. Plybon’s financial assets and liabilities.”
By: James M. Simasko, Attorney at Law. Mt. Clemens, MI. I was asked this very question not too long ago. My answer was not always, but you should always consult with a qualified elder law attorney who specializes in Medicaid Law, which is what the attorneys at Simasko Law Offices. A social worker at a nursing home may be available to give the resident assistance in preparing the application and applying for Medicaid. They will probably know a lot about the program, but maybe not the particular rule that applies to your situation, or the newest changes in the Medicaid Law (Medicaid Laws change frequently). Further, the social worker may not be interested in preserving your family’s wealth or assuring the residents spouse is taken care of. They may not take the time to learn the family dynamics, and you could miss out on significant planning options that could affect the family’s future.
By: Erin R. Solaiman, Attorney at Law. Macomb County, Michigan. The simple answer to this question is, “yes.” However, if you have spent any time at all helping your parents plan for the unfortunate event that they might have to enter a nursing home, you know that “simplicity” is a luxury not often afforded in this situation. In Michigan to qualify for Medicaid, a single person can have no more than $2,000 in assets. The primary residence and one car are exempt, as long as they are not owned by a trust. Therefore; on many occasions, prior estate planning may need to be changed to fit the situation. Because we are unable to use a Quit Claim Deed, in most circumstances a Ladybird Deed is used to ensure that the individual’s primary residence avoids probate. Any individual that receives Medicaid assistance is subject to Estate Recovery if their assets go through probate. Under the current law, the key is to avoid probate. Under the Estate Recovery program, the Michigan Department of Community Health (MDCH) will seek repayment of benefits received by Medicaid recipients by filing a lien on an individual’s probate estate. The liens can be placed for no more than the amount spent on the individual’s care. With the rising costs of nursing home care, a one to two year stay in a long term care facility can deplete a majority, if not all, of the value of the home! There are many complex scenarios and restrictions on the treatment of the home for Medicaid purposes, and many strategic plans that can be used to protect the parent’s home and the family’s heirs. The best way to discuss your specific scenario and develop the best overall plan is to meet with the experienced staff of Elder Law Attorneys at Simasko, Simasko & Simasko, P.C. Call today to schedule your FREE consultation. As always, remember that it is better to look ahead with preparedness than to look back with regret!
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