Planning Ahead for Medicaid

medicaid planning ahead

The enormous cost of long term care is one of the greatest threats to the financial security of most older adults. Medicare covers very little long term care in a nursing home and its coverage of in-home care is limited. Also, most Medicare supplement insurance policies offer little or no long term coverage. In fact, less than 3% of nursing home costs in the United States are paid by either Medicare or private insurance. Often times, families will pay for nursing home costs out-of-pocket until they reach poverty level and then turn to Medicaid for assistance. Planning ahead can help alleviate some of these harsh results.

The first step to planning ahead is to assess what coverage you have. If you already have long term or health coverage, find out what it will cover. It is also good to consider what steps you would need to take to qualify for Medicaid. Our attorneys can help assess your situation to get you qualified for Medicaid. Since Medicaid has rules to help protect a community spouse, Medicaid may be a viable option where one spouse enters a nursing home and one spouse remains at home.

Another step to planning ahead is to assess what you wish to accomplish. If it is important to you to preserve assets to pass along to your heirs, then you may want to protect your assets from the costs of long term care. Even if you have long term care insurance, you can speak with our attorneys about how to further protect your assets.

Source: Indiana Laws of Aging by Indiana State Bar Association

Case Study: Power of Attorney – When an Accounting is Requested

accounting

Indiana statute requires that the attorney-in-fact must keep complete records of all transactions entered into by the attorney-in-fact on behalf of the principal for six years or until the records are delivered to the successor attorney-in-fact. The attorney-in-fact must present an accounting to the Court if it is ordered. He/she must also render an accounting to the following persons if they request it: the principal, guardian of the principal, child of the principal, personal representative of the principal’s estate (if the principal has died), or an heir or legatee of the principal. A recent Court case has clarified this statute when it comes to a child requesting an accounting.

In the case, Natalie had four sons. Her son, William, was serving as attorney-in-fact for Natalie since 2011. In November 2012, Natalie was diagnosed with early Alzheimer’s type dementia. One of her sons, Jeffrey, requested an accounting of Natalie’s finances from William. William refused to deliver a copy of the accounting to Jeffery. Therefore, Jeffery filed a Mandamus Action to compel the attorney-in-fact to render the accounting. The trial court denied Jeffrey’s Mandamus action. It found that although Jeffrey was the child of the principal and requested an accounting, he did not qualify to receive an accounting because the Power of Attorney was created prior to July 1, 2012. The Court of Appeals reversed and remanded. The Court found that the statute allows a child of the principal to receive an accounting if he/she requests it. It also found that the effective date of the Power of Attorney is not relevant to who may receive an accounting.

In all future situations then, the attorney-in-fact must provide an accounting to the person who requests it (if the person is from the list mentioned in the statute). The date of the Power of Attorney does not affect a person’s request for an accounting. If you are serving as attorney-in-fact for someone, you must keep complete and accurate records of all transactions you take on behalf of the principal.

When Simple Wills are Not Enough

special needs trust.png

A Will is one of the most important features of your estate plan. Without it, the State will decide who gets your property and who will be guardian of your children.  A simple Will can do the following for you: leave your property to the people and organizations you choose, name a guardian for your minor children, name someone to manage the property for your minor children, and name your executor. If you’re in pretty good health and don’t expect to owe estate tax at your death, then a simple Will may be enough. However, you may need something more complex if any of the following situations exist: you expect to owe estate taxes, you have a child or spouse with a special need, you have children from a prior marriage, or you think someone might contest your Will. In any of those cases, you should consult with an attorney to construct your Will.

If your spouse or child has a special need, you may need a special needs trust within your Will. Leaving money to your disabled spouse or child could jeopardize his/her government-assisted benefits (such as Supplement Security income (SSI) or Medicaid). However, a special needs trust can help prevent that from happening. Instead of leaving property directly to your disabled spouse or child, the funds go into a trust for his/her benefit. You appoint someone to serve as trustee. The trustee has complete discretion over the trust property and is in charge of spending money on your loved one’s behalf. Because your loved one has no control over the money, government programs like SSI or Medicaid will disregard the trust property for eligibility purposes. The trust usually ends when your loved one dies or all the trust funds have been spent. If you think you and your loved ones could benefit from having a special needs trust, contact our office to set up an appointment.

Great Reputation of Allen County Public Library Genealogy Center

Genealogy.jpg

The Allen County Public Library (ACPL) has one of the largest research collections available in its Genealogy Center. It is a unique and valuable resource for the Northeastern Indiana community and the entire genealogical community at large. The Genealogy Center incorporates records from around the world, and its staff specializes in genealogy. It is active in several initiatives to make significant public domain portions of its collection available online. The Center has 350,000 printed volumes and more than 513,000 items of microfilm and microfiche.

The Genealogy Center has two new exciting additions. The first is the Life Stories Center, which aims to collect oral histories. The staff and volunteers, including former school teachers and TV personalities, will mentor people on how to conduct oral history interviews. Recording equipment also will be available for checkout. The goal is to catalog and archive the recordings so that they can be used for history classes or other groups studying a particular time period or event. The second addition is the Discovery Center. It can seat up to 240 people theater-style and has tables and chairs to accommodate small groups or larger groups. It is also equipped with the latest technology, including computer projectors. The Genealogy Center plans to use the Discovery Center to offer pop-up programs for groups visiting the center and for special programs.

If you want to get started in researching your family history, these are the basic steps you should take:

  1. Do your “home” work. Gather information that you already know about your family and talk to relatives to find more information. Look through resources in your home to find information about previous generations that you may not know.
  2. Organize your facts on a standard genealogy chart. Pedigree and family group charts are the most common types of worksheets used by genealogists. You can download these charts on this website.
  3. Continue your research. Create a research plan with specific ideas about information you would like to find during your visit. Visiting a library’s website can be helpful before making a physical visit. Library websites often have a collection description so that you can determine whether the records you seek are likely to be there.

Robocalls – Crimes Against the Elderly

Robocalls

Robocalls are on the rise, and scammers are targeting the elderly more often than not. What are robocalls? Robocalls are basically recorded sales calls. Federal law allows charities, political campaigns, and groups like schools to use robocalls, while telemarketers are barred from using recorded sales calls without the consumer’s written consent. The scammers are heavily targeting the elderly, posing as cash-strapped grandchildren, tax collectors, or providers of technical support. Fully robotic robocalls schemes leave automated messages directing the person to call back at certain numbers. When the person calls back, he/she encounters a person and a pitch. In another scheme, the scammers will speak directly with the person when he/she picks up. A doctored caller ID helps add to the guise of their credibility. The lawbreakers are often in oversea call centers, hoping to avoid detection and punishment.

Robocalls hit a record 1.7 million in the first four months of 2016, up 41% from the year-earlier period, and complaints about automated robocalls have tripled since 2009. Why have robocalls increased in recent times? While the automated calls are not new, the technology granting scammers easy access is new. The dramatic rise in Internet access globally means almost anyone anywhere can run a phone scam. Mass-dialing technology is widely available along with inexpensive long-distance rates and cheap overseas labor. All of these factors mean that scammers can place robocalls for less than one cent per minute whereas before the cost to set up phone lines to mask the outgoing number could be $20,000.

Indiana Attorney General Greg Zoeller says that the scams are primarily directed at seniors. Many scammers will mine the Internet for family information and then call the senior, pretending to be his/her grandchild, pleading for money. Callers have also manipulated the caller ID to imitate the IRS. They falsely claim the person owes back taxes and face imminent legal trouble. In another common fraud, the caller pretends to be a lottery official. He/she tells the senior that he/she has won but must first pay taxes and fees. Seniors have lost hundreds of thousands of dollars to some of these scams. Sometimes, callers will pose as tech support for software companies, inducing people to install malware on their computers. The “malware,” then, disables the computer’s protection and gives the caller access to a person’s private information. Those who have fallen victim to these scams are more likely to be targeted again. Victims tend to be approached repeatedly because their names end up on lists passed around by scammers.

Phone carriers are working toward offering their customers technology that aims to detect robocalls and stop them before they get through. State Senators have also filed a bill to increase penalties and help federal authorities pursue overseas lawbreakers. In the meantime, families should diligently should look out for their elderly relatives to keep them safe from scamming robocalls.

Acting as Trustee of a Miller Trust

miller trust trustee

You have agreed to serve as the Trustee of a Qualified Income Trust, or Miller Trust. This post will help guide you through the administration process and your duties as Trustee. A Trustee is a person or entity who takes delivery of and manages money or other property for the benefit of another person or entity in accordance with the administrative and dispositive provisions detailed in the Trust Agreement.  The Trust Agreement is the written document that details and describes the trust arrangement, designates the name of the trust, and provides the Trustee with instructions that must be followed during the administration of the trust.  A Trustee acts in a fiduciary capacity on behalf of the beneficiaries. A fiduciary has a special duty to protect the trust assets and income for the beneficiaries of the trust.  That duty is a strict duty, similar to the duty of a conservator or guardian. A beneficiary is the person who is entitled to receive benefits from a trust. In a Miller Trust, the grantor (or person who creates the Trust) is the beneficiary. The State of Indiana is the secondary beneficiary.

Indiana uses an “income cap” for certain Medicaid programs. The income cap limits the availability of Medicaid assistance to adults with monthly incomes below a Special Income Level (SIL). The SIL standard is 300% of the maximum monthly benefit payable under the Supplemental Security Income program. The SIL standard generally increases each year in January. The SIL standard for 2016 is $2,199/month. An individual who receives monthly income above the SIL will generally not qualify for Medicaid to pay for long term care health services because the income is too high. However, Indiana law currently permits income above the SIL to be transferred to a Miller Trust and not interfere with Medicaid. A Miller Trust bank account must be opened when the Miller Trust is established.

The Miller Trust terminates when one of the following things happen:

  1. The Medicaid recipient dies
  2. The Settlor no longer requires Medicaid assistance
  3. Family and Social Services Adminsitration (FSSA) provides express written authorization and approval to terminate the Trust

Managing the Miller Trust Bank Account

Bank account.jpg

A Miller Trust bank account must be established when the Miller Trust agreement has been prepared and properly signed. You as the Trustee must then take the original Trust Agreement to the bank to open the Miller Trust checking account. The bank can make a copy of the Trust but you should not relinquish possession of the original Trust. The bank account must receive only the income of the Settlor. The Settlor is the person who needs Medicaid. Savings or other assets may not be placed or held in the Miller Trust bank account. Income for another person, even a spouse, may not be placed or held in the Miller Trust account. The bank account should be titled as a trust account. For example, “John Smith, Trustee of The Qualified Income Trust of Jane Doe.” A Miller Trust is a “grantor trust,” which means that, for tax reporting purposes, the trust’s finances are the same as the Settlor’s finances. Therefore, the bank must use the Social Security Number of the Settlor.

You must be the only person authorized to sign checks or withdraw funds from the Miller Trust account. No other person may write checks or withdraw money from the account, not even the Settlor. Checks should have the following account title: “John Smith, Trustee of The Qualified Income Trust of Jane Doe.” You should receive the monthly statements for the Miller Trust account. You must keep these statements, along with an itemized account of how the Settlor’s money is spent for review and consideration by Family and Social Services Administration (FSSA) and any other state agencies which may be providing benefits for the Settlor. FSSA is a department of the State of Indiana.  FSSA processes and oversees Medicaid applications and determines if an applicant is eligible for Medicaid. It is not recommended that you obtain a bank cash card, debit card, or credit card for the Miller Trust account. The rules relating to authorized expenditures for a Miller Trust account are varied, complex, and subject to revision or amendment at any time. Therefore, to reduce the risk that an unauthorized expenditures might be made, you must only withdraw funds by means of a check drawn on the account. You must retain and maintain all records relating to the Miller Trust arrangement and transfer the records to any successor Trustee. These records include, but are not limited to, the account agreement, bank statements, copies of cancelled checks, receipts, invoices or bills, billing and/or service logs or time records, and any and all items that relate to the Miller Trust arrangement. These records will likely be used to prepare accountings and to respond to inquiries from FSSA.

The Settlor must keep his/her regular checking account in addition to the Miller Trust account. The Settlor’s income must first be deposited into the regular checking account. The amount over the SIL standard must then be transferred from the regular account to the Miller Trust account each month.  A check for this same amount must then be written from the Miller Trust account to the nursing home before the last day of each month. Every time the Settlor’s income increases, the amount you must transfer to the Miller Trust account (and pay to the nursing home) must increase by the same amount. Because the Miller Trust account will typically have less than 100% of the funds needed to pay the monthly nursing home bill (the patient liability), you will most likely be writing two checks to the nursing home – one from the regular checking account and one from the Miller Trust account.

After the funds are deposited to the Miller Trust bank account, you may write checks for authorized payments from the account. Miller Trust funds may be used only for approved expenditures allowed by Medicaid rules. These expenditures include:

  • Nursing home bill (patient liability)
  • Monthly health insurance premium. Premiums for indemnity policies that provide income replacement rather than coverage for incurred medical costs are not allowed
  • Spousal allowance
  • Dependent or family member allowance
  • Prescription co-payments
  • Over the counter medications not covered by Medicaid coverage

You must never put any money or property, other than the Settlor’s monthly income which exceeds the SIL, into the Miller Trust account. Co-mingling is prohibited.

Any money remaining in the Miller Trust bank account upon termination of the Trust is paid to the State of Indiana up to the total amount of Medicaid benefits paid on behalf of the Settlor for medical care. Any remaining funds after payment to the State of Indiana are paid to the remainder beneficiaries as specified in the Miller Trust. Funds may not be paid to the remainder beneficiaries until the State of Indiana provides a written statement that the payment amount it received satisfies the debt owed to the state. When the time arises to terminate the Miller Trust, you should take the following actions:

  1. Stop depositing funds into the Miller Trust bank account
  2. Notify FSSA that a “change in eligibility” has occurred within ten (10) days after the Trust should terminate
  3. Confirm that all expected and paid expenses have cleared the Miller Trust account before proceeding to close the account.