 Elder Law Update
North Carolina Edition
Happy Easter!
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Vol 2 Issue Ten
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April 2009
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Upcoming Speaking Engagements
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Savannah Chapter
National Association of Insurance and Financial Advisors
April 22, 2009
Savannah Estate Planning Council
May 7, 2009
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HBO Special
on
Alzheimer's Disease
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Don't miss . . .
In May,
HBO will use all of its channels to support a multi-part campaign focusing on
Alzheimer's disease: its causes, symptoms, treatment and possible cures.
Collectively titled The Alzheimer's
Project, the initiative includes four HBO documentaries premiering from May
10-12; 17 short supplemental films; a companion book; a robust hbo.com website;
and a nationwide community-based outreach campaign.Click HERE for complete info. |
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PLEASE VISIT MASON LAW
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I WANT TO KNOW
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| If you have an idea or comment that will help me make this a better newsletter please send it to me. Just click! |
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Greetings!
Sorry we're late this month. We have had a lot going on, and because we do draft all of our articles . . . well . . . things got put off.
The North Carolina State Bar Board of Legal Specialization is implementing a new designation: Board Certified Specialist in Elder Law, which will be very similar to the "Certified Elder Law Attorney" designation sponsored by the National Elder Law Foundation. I have been happy to help out as Vice Chair of the Elder Law Specialty Sub-Committee, but that has kept us busy.
Kristi Cerbone, who is working with me in Savannah, has been active in Alzheimer's Association work for years. Currently she is on the Coastal Georgia Board of Directors. She has some rather startling financial information regarding the cost of Alzheimer's Disease, and has a pointer on where to go to get more information.
On a topic "near and dear" to me, I am offering a primer on special needs trusts below. I have had a number of questions concerning those the last few months, so I thought I'd better run something.
Dr. Shevlin has some interesting thoughts, from a physician's perspective, on what you might consider doing if you notice a senior friend or family member who might not be doing too well.
Finally, Warren "Social Security Guy" Coble answers a question he (and I) often hear: I'm disabled, so why can't I get Social Security Disability Income? Warren answers.
Have a great Easter/Passover. Enjoy the Spring.
Bob Mason
Certified Elder Law Attorney
PS: Our friend and paralegal (whose personal email address begins "uncfan@") reports she was up until 2:30AM last night. Seems they were hootin' and hollerin' down in Ol' Seagrove En See last night. I personally do not wish to offend those who do not follow the hoops or share in Stacey's passion . . . so if you are easily offended, please move on to the next article! In the meantime, I am attempting merely to be sensitive to personnel issues.
OK. Here goes . . .
 Thank you for your understanding.
Certified by the
National Elder Law Foundation, recognized by the American Bar Association as
the certifying entity for specialization in Elder Law.
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Alzheimer's Disease: A Huge Expense
- Kristin Cerbone
 Healthcare
costs are more than three times higher for people with Alzheimer's and other
dementias than for other people age 65 and older, according to the Alzheimer's
Association's 2009 Alzheimer's Disease Facts and Figures.
People with Alzheimer's are high consumers of hospital,
nursing home and other health and long-term care services, which, of course, translates
into high costs for Medicare, Medicaid and millions of families. As families
struggle to survive in a deepening recession and as states grapple with budget
shortfalls, Alzheimer's disease threatens to overwhelm them both.
Most people with Alzheimer's also have one or more
additional serious medical conditions, such as diabetes or coronary heart
disease. Their Alzheimer's greatly complicates the medical management for these
other conditions and drives up costs significantly. According to the Facts and
Figures report, in 2006: "Medicare beneficiaries with diabetes plus Alzheimer's
or another dementia had 64 percent more hospital stays than those with diabetes
and no Alzheimer's, and their average per person Medicare costs were $20,655
compared to $12,979 for beneficiaries with diabetes but no Alzheimer's or
dementia." Medicare beneficiaries with coronary heart disease and Alzheimer's
disease or another dementia had 42 percent more hospital stays than those with
coronary heart disease and no Alzheimer's or dementia, and their average per
person Medicare costs were $20,780 compared to $14,640 for beneficiaries with
coronary heart disease but no Alzheimer's or dementia.
With
family members providing care at home for about 70 percent of people with
Alzheimer's disease, the ripple effects of the disease can be felt throughout
the entire family. According to Facts and Figures, in 2008, nearly 10 million
Alzheimer caregivers in the U.S.
provided 8.5 billion hours of unpaid care valued at $94 billion. In addition to
the unpaid care families contribute, the report also reveals that Alzheimer's
creates high out-of-pocket health and long-term care expenses for families.
Look at the full Facts and Figures report by clicking HERE.
Savannah elder law attorney Kristin Cerbone is an affiliate of Mason Law, PC and currently serves on the Coastal Georgia Chapter of the Alzheimer's Association. You may email her by clicking HERE.
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Special Needs Trusts An Important Tool
- Bob Mason
 You may have heard over the last year or two about drastic restrictions
on long term care assistance under Medicaid. Don't lose hope. Plenty of options
remain for married couples, and many remain for disabled individuals and their
families.
The parents of a disabled child must ensure that the child will receive
adequate financial protection, probably for the child's entire lifetime, while
at the same time providing equitably for other family members. Maybe a parent
is worrying about her own nursing home care but wants to insure her assets can
be used for her disabled child.
In many cases access
to government entitlement benefits -- whether Supplemental Security Income,
state supplemental assistance programs, or Medicaid - is critical. How does one
remain eligible for these valuable resources without first becoming
impoverished?
An inheritance left
directly to a disabled child will soon be gone. If a disabled individual comes
into a "windfall", such as a personal injury settlement, those assets, too, will
quickly disappear.
Sadly, many parents (with inadequate or no advice) simply leave everything to
the "non-disabled" children with the hope those children will "look after"
their disabled sibling. Unfortunately, greed, divorce, lawsuits or carelessness
can throw this plan awry.
A "special needs
trust" might be a great alternative. Because someone other than the
beneficiary provides the trust assets, and the trust holds the assets for
"supplemental needs" only, the trust should not affect the disabled individual's
eligibility for entitlement benefits or be accessible to the individual's
creditors, including the government.
A "special needs trust" will supplement, not reduce or
replace, entitlement benefits that may be available to the disabled individual.
If no benefits are available, the trust assets stand ready to help. If the
available benefits do not provide adequately for the beneficiary's needs, the
trust assets will fill in that gap. Even if the available benefits adequately
cover material needs, the trust assets may be used to enrich the beneficiary's
quality of life without jeopardizing the much-needed benefits. Finally, to the
extent that the assets are not used during the beneficiary's lifetime, they may
pass to other family members.
What happens, however,
if the disabled individual has assets, but these are inadequate to meet his or
her needs? What if a will or a trust names the individual without providing for
a trust in the event of disability? And what if the individual is about to
receive a settlement or award in a personal injury lawsuit?
By placing his or her property in another kind of special needs trust, a
so-called "OBRA '93 Trust" or "payback" trust, the
individual will remain eligible for many important benefits, including
Medicaid. The catch is that upon the beneficiary's death, the Medicaid benefits
must be repaid, with only the balance passing to other family members. During
the individual's lifetime, however, the difference between an OBRA '93 Trust
and no trust can be the difference between having training and
educational opportunities, a computer, music, regular outings and a vacation,
and living a life of poverty or dependency.
The requirements of an OBRA '93 Trust are simple. It must be established
for the lifetime benefit of someone under age 65 who is disabled or blind. It
must also provide for pay-back of Medicaid benefits paid by the state.
In addition, only parents, grandparents, courts, or "guardians", not
the disabled individual directly, may establish a pay-back trust.
When deciding to establish
an OBRA '93 trust, the disabled beneficiary's specific needs and the effect of
the trust on the individual's benefits must be taken into account. Also, in the
context of a personal injury settlement, many common settlement options (such
as annuities) may render an OBRA '93 trust impossible. Because of this, early
planning is a must when damages for a personal injury are involved.
For the trusts I've just described, administration can be difficult.
Also, for people over 65, or for people with no parents, grandparents, or
guardians available to establish a trust, these trusts may be
unavailable. In that case, a community or pooled trust may be the answer.
They work very much like pay-back trusts, but are administered by non-profit
community-based trustees and are "pooled" with the trusts of other disabled
beneficiaries. When the beneficiary dies, the assets either "pay-back" Medicaid
or can be retained in the trust to provide for other beneficiaries in the
community.
This is an exceedingly complex area of the law. I've tried to simplify it.
Whatever you do, get good advice!
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Tax-Deferred Savings For Disabled?
A Newly Proposed Bill May Help
- Bob Mason
Family members,
friends, or a person with special needs may be able to deposit up to $500,000 in a
tax-favored account much like an IRA if legislation just introduced in Congress
gains any traction. The bill authorizes "ABLE"
(Achieving a Better Life Experience) accounts that function much like an IRA or
529 College Savings Account, with the income generated by the account
accumulating without taxation.
Unfortunately,
as things now stand, the accounts will be available only to individuals who
qualify for Supplemental Security Income (SSI) benefits. That might change.
 The accounts
would be titled in the name of the SSI beneficiary, but funds up to $500,000
placed in such accounts would not qualify as available resources and would not
prevent a beneficiary from continuing to receive benefits. Furthermore,
distributions from the accounts, so long as they are made for the benefit of
the person with disabilities, would not count as a part of their income for
purposes of SSI. That could be a huge benefit for SSI recipients because SSI
places strict limits on income that a recipient may receive without
jeopardizing benefits.
Another
benefit: Anyone will be able to transfer money into an ABLE account and
rollovers from other accounts will be possible. Like an IRA, the funds in an
ABLE account will accumulate tax-free during the beneficiary's lifetime. Also, an individual becoming disabled later in life could roll over a previously
existing IRA or 529 account into an ABLE account in order to qualify for
benefits.
The bill
accomplishes this by adding a new paragraph D to the federal statute that
already controls special needs trusts, pooled trusts and so-called Miller
Trusts (common in Georgia,
not used in North Carolina).
We'll track it
and Elder Law Update will keep you . . . updated.
Lawyers and
other Codeheads: To read the text of the Senate bill, click HERE and to read the text of the House bill click HERE.
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Calling The Doc About Your Neighbor
What To Do When You Are Concerned
Patricia Shevlin, MD
What can you do if your elderly neighbor
doesn't seem to be taking care of herself as  well as she once did? Or your
grandmother seems to be more short of breath when she walks? Sharing your
concerns with the person involved is a good place to start, especially if you
stress that you are asking because you care. If that strategy doesn't seem well
received or if the situation is worsening, the next step would be to contact a
family member or other trusted friend to see if they have noticed the same
thing. If there is a significant health concern, you can consult the person's
physician.
For privacy reasons, you won't be able to
discuss the situation with the staff or the physician but you can state what
your concerns are. If you are not comfortable calling the office, you can
address a note to the physician. All of this assumes that you know who the
physician is for that patient. If you call the office and ask "Is Mrs. Jones a
patient there?" we are not allowed to tell you. Check with family or friends if
you are not sure.
So what happens next? As the physician, I
now have to find out what the patient thinks. I don't tell the patient that
someone else is concerned for several reasons. I need to find out if the concern
is legitimate. Occasionally there are other explanations for what appears to be
bizarre behavior. I also don't want to fuel a relationship issue between the
two parties. This is especially true when family is involved. Usually I have to
find a neutral way to bring up the subject. "Other people on medication X have
noted some memory problems. Have you noticed any problems?" If the patient says
"no" to this type of question, unless I can find another opening, I may have to
table the discussion to another visit. The same is true if the concern is
shortness of breath. If in my general questioning they deny any symptoms, I can
continue by asking if their activities have changed and if so, why?
As in any medical
encounter, the patient can choose to tell me or not tell me anything they
choose. Even if the patient admits to having a symptom, he can choose not to
pursue an evaluation of it. At the end of my visit, I may not have been able to
address the concern of the friends or family. I know that it appears to others
that nothing was done during the visit. The process has started, however, and
the patient will have more opportunities to talk about symptoms at other
visits.
Patricia Shevlin, MD, is a principal
in Asheboro Family Physicians, with
offices in Asheboro, North Carolina.
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WHY CAN'T
I DRAW DISABILITY?
-Warren Coble
I hear it
constantly:
"I have
applied numerous times for Social Security disability. My doctor repeatedly
tells me I should be drawing disability benefits and that I am far worse off
medically than many others who are already receiving benefits. Why won't Social
Security approve my case?"
Eligibility
for Social Security disability benefits requires that an individual must have
worked and paid FICA taxes into the system to be eligible. In disability cases,
the individual worker (known as the "wage earner") must be the disabled person.
Two exceptions to this rule are a disabled widow age 50 or older, and an adult
child of the worker disabled before age 22.
 "Paying
in" consists of working at a job covered by Social Security, or by operating a
trade or business (self-employment) and reporting a net profit from that trade
or business. The actual payments of the FICA and Medicare taxes are paid to the
Internal Revenue Service. Credit is given in quarters of coverage. Credit for
one quarter of coverage is granted for each $1090 earned (2009 rate). Up to
four quarters of coverage can be earned in any given calendar year.
Disability
requires at least 40 coverage credits (10 years work) while disability benefits
require not only the 40 coverage credits, but 20 of the credits must have been
earned within the last 10 years prior to becoming disabled. Fewer credits are
required for younger workers. The formula is pro-rated based on the age at
which the individual becomes disabled.
Many individuals,
for whatever reason, may not have worked in several years before becoming
disabled. Others may have worked only part time, or intermittently and not have
the 20 credits in the proper time frame. No
matter how severe the disabling condition, Social Security cannot approve an
application in which the worker does not have the required number of credits.
Another
situation frequently encountered is where an individual did have the required
credits, but at a much earlier period of time. Most often these individuals
have applied for disability a number of times and been denied. An unfavorable
decision by Social Security after the work credits have
expired becomes a final, binding decision.
Example: Individual
has some health problems, leaves work after 15 years in June 2003. After
repeated applications and denials, individual applies again in December 2008,
alleging onset date of December 2007. Although the individual is beyond the
expiration of the disability credits (June 2008, 5 years after last work),
Social Security will process an application since the alleged onset date was
prior to the expiration of the credits. However, this application and subsequent
appeals will be the only opportunity to obtain an approval from Social
Security.
Subsequent
applications will be denied, regardless of the medical severity, or the onset
date of the disability. Following the example above: Individual is denied and
does not appeal. In 2010, individual applies again using onset date of December
2007. Since the individual has had a previous medical decision from Social
Security since the date the insurance credits expired, the
current application will be denied without medical consideration.
Another
example: Individual leaves work after 20 years in June 2000. In December 2001,
the individual applies for disability after a heart attack. The application is
denied. No appeal is filed. In July 2007, the individual is diagnosed with
terminal cancer and applies again for disability with an onset date of July 15,
2007. Because the alleged onset date
(July 15, 2007) is after the expiration of the insured status credits (June 30,
2005, five years after last working), the application will be denied for lack
of sufficient work credits.
Note: The mere "existence" of a diagnosis prior to
the expiration of credits is not the pre-requisite . . . Social Security must
consider the condition to be disabling.
Social
Security expert Warren Coble welcomes your
questions regarding Medicare, Social
Security and Senior Life in general! Email
Warren by clicking
HERE.
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The Usual Disclaimer: This newsletter is for general information only. Please do not rely on anything you read in this email as definitive legal advice applicable to you. All situations are different, including yours. Nothing you read in this newsletter is a suitable substitute for professional advice you may receive from your attorney, your accountant, or your tax advisor.
All contents copyrighted 2009 by Mason Law, PC. Contents may be republished with written permission of Mason Law, PC (which permission will usually be given!). |
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