Changes In The Laws Governing Financial Liability & Institutional
Liens For Persons Treated At State & County Psychiatric Facilities
by
Herbert D. Hinkle, Esq. and Valerie A. Powers Smith, Esq.
Hinkle & Fingles, Attorneys at Law
2651 Main Street
Lawrenceville, New Jersey 08648
(609) 896-4200 or (215) 860-2100
On March 24, 2005, the new lien law was signed by Acting Governor
Cody. Most importantly, the new law eliminates institutional liens
against individuals who have been treated at State and County
psychiatric hospitals for recoupment of their cost of care at the
psychiatric facility.
Therefore, all liens filed against a person treated at a psychiatric
facility prior to the effective date of this law are extinguished and
now have no legal effect. Moreover, no new liens may be filed by a
psychiatric facility on or after the effective date of this law,
against a person treated at such a facility. So, if you or a family
member had a lien assessed against you in the past, you are entitled
to have that lien discharged. It should be noted that, unfortunately,
all of the language that pertained to clients of the New Jersey
Division of Developmental Disabilities was removed from the bill
before it was signed into law. Therefore, this law does not have any
affect on DDD clients and their responsibility to contribute to the
cost of their care.
There are some caveats to be aware of with respect to the State’s
interpretation of this new law. First, although the statutory lien
against an individual will now be considered extinguished, the
Attorney General’s Office has advised the New Jersey Department of
Human Services that certain individual’s debt for the cost of their
care will still remain. What that means, essentially, is that the lien
will be removed but the obligation to repay the debt will remain. In
order to prove that the lien has been removed, you will need to obtain
a “discharge document” from the state to retain for your records.
With regard to the continuing debt, and in cases where a client comes
into money, there are a few options to resolve a debt with the State.
One such option is to propose a compromise, indicating what they would
be willing to pay the State for forgiveness of the institutional debt
and a complete release of any pre-existing lien. Often, as part of the
compromise process, the creation of a special needs trust will be
approved to deposit a portion of the assets into for the future use of
the person with the disability.
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Herbert D.
Hinkle, his partner, Ira M. Fingles, and their colleagues, S. Paul
Prior and Valerie A. Powers Smith, maintain a statewide
law practice with offices in Lawrenceville, Marlton, and Florham Park,
New Jersey, and Yardley, Pennsylvania. They lecture and write frequently
on topics of law, aging, disability and estate planning and are available
to speak to groups in New Jersey and Pennsylvania
at no charge.
Comments and suggestions
for future articles should be mailed to: Hinkle & Fingles, 2651 Main Street, Suite A, Lawrenceville, New Jersey 08648-1012.
Copyright 2005
Herbert D. Hinkle. All rights reserved.
