Estate
Planning For People With Disabilities
Estate
Planning (Generally)
Guardianship
Health
Care
Special
Education
Adult
Services For People With Disabilities
Elder
Law
Other
Estate
Planning For People With Disabilities
How do I know if the trust I established for
my disabled child is adequate?
There is no easy answer. Several thoughts come to
mind. First, if the trust is written as part of the
will, I would change it. Second, simply because the
document is called a "special needs trust,"
it does not mean that it is adequate. Consider who
drafted the document. Does the lawyer have experience
with litigation concerning special education and adult
services. Does the law office have an attorney available
with a law degree in taxation or a certificate in
estate planning? Mr. Hinkle's estate planning views
are rooted in long experience, and have been widely
reported, including by the The Wall Street Journal,
in its feature "Home Alone."
Why
should I establish a trust for my child with a disability
when I can give my estate to my other children?
You can do this, but what will happen to these assets
if the non-disabled children die first? Also, if there
are several children, will they all come up with money
when needed, or will they bicker among themselves?
Will spouses interfere? Establishing a trust helps
eliminate these problems.
If
I set up a trust for my child with a disability, must
I fund it now?
No. Usually the trust is funded at death unless tax
or health reasons dictate otherwise.
How
often should I review my estate plan?
At a minimum, an estate plan should include a will,
a power of attorney, a living will and a trust for
the child with a disability (assuming there is a child
with a disability). For estates in excess of $675,000
(in the year 2000), the estate plan should include
one or more tax-related trusts. We recommend that
you review your estate plan yourself at least every
5 years, and with an attorney no less than every 10
years, and whenever a significant event occurs, or
as the estate grows.
I
receive social security benefits for someone as a
representative payee. What are my duties?
Your responsibility is to spend the money to reflect
the "best interests" of the person and keep
records.
Estate
Planning (Generally)
How
do federal gift and estate taxes work?
The federal government taxes transfers during life
(gift tax) and at death (estate tax). The tax rates
in 2000 are 37.5% to 55% for aggregate transfers in
excess of $675,000. Thus, a person who transfers $250,000
during life and $500,000 at death will pay a tax.
How
can I determine the value of my estate?
This can be counter-intuitive. The taxable estate
includes everything of value that you own, and in
some cases, control. It includes life insurance, IRAs,
regular savings and real estate minus debts.
What
is excluded from federal gift and estate tax?
Normally, transfers between spouses are excluded regardless
of the amount. A person can give away up to $10,000
to as many people as he or she wishes each year, and
can pay for medical and education expenses. Transfers
to charity are also excluded.
Guardianship
Is
a durable power of attorney a substitute for guardianship?
Generally not, because if the person with a disability
lacks the legal capacity to give informed consent
to a power of attorney, the document is invalid. Also,
the person with a disability can repudiate a power
of attorney making it invalid. A power of attorney
is helpful when the person's disability does not make
him/her incapacitated, or for other family members
to execute for themselves in case of their own future
disabilities.
If
I become my sister's guardian, does that mean I have
to pay her bills or that she has to live with me?
No. As your sister's guardian, you would only be a
decision-maker. You would not be legally responsible
for her debts. Even if your sister does not have the
money to pay all of her bills, her creditors will
not make you pay them with your own assets. Likewise,
it is not necessary that your sister live with you.
Your sister can continue to live wherever she currently
lives or anywhere else that is appropriate for her.
Why
would I use a private attorney for a guardianship
if DDD will do it for free?
In some counties, DDD will only seek a guardianship
of the person rather than guardianship of the person
and property. In addition, DDD has a backlog of guardianship
cases. It usually takes several years to complete
the matter.
Health
Care
What
is Medicaid EPSDT?
The Medicaid EPSDT program is a fee-for-service system
that provides a full array of health care services
to children 21 and under. Medicaid is required to
provide services that a physician has declared “medically
necessary” to correct or ameliorate the child's
condition. Medicaid/DMAHS (Division of Medical Assistance
& Health Services) often denies eligibility and
reduces the amount of hours or days of a service)
or terminates services, determinations that may lead
to an appeal to OAL for the beneficiary. Attorneys
at Hinkle, Fingles & Prior have successfully litigated
these cases, securing such services as personal care
assistance, home health aides, and therapy services
appeals.
What
is the Medicaid Managed Care HMO system?
In an effort to control costs, the state decided to
make mandatory the enrollment of individuals into
HMOs with whom the state contracted to provide the
state's Medicaid services to some clients. This process
has now stalled and only a few counties have begun
using the program. Beneficiaries are entitled to the
same services under the managed care system that they
had been under the Medicaid fee-for service system.
Attorneys at the firm have extensive experience litigating
these issues, including exemption appeals for denial
of coverage or termination of services, and the maintenance
of health services during transition to the HMO system.
Who
administers Medicaid Waiver services?
There are several state agencies that administer Medicaid-funded
waiver services. DDD administers the CCW (community
care waiver); DOHSS administers the CCPED (community
care program for the elderly and disabled); DDS administers
the CRPD (community resources for people with disabilities)
and the TBI (traumatic brain injury) programs, among
others.
Attorneys
at Hinkle, Fingles & Prior have assisted clients
in getting eligibility for these waiver programs,
appealing reduction or termination of waiver services,
appealing due process rights violations, appealing
termination or change in services without notice,
failing to continue services pending the appeal, or
failing to restore services that have been wrongfully
terminated following an appeal.
What
about private insurance issues?
With private insurance, most appeals involve denial
of coverage and termination or reduction of services.
Depending on the type of plan (managed care, fee-for-service,
self-funded/self-insured, or individual health benefit
plans), the appeals rights and process are slightly
different. Attorneys at the firm have assisted many
clients in private insurance matters.
What
if I need help with Medicare?
Similar denial of coverage and appeal issues may obtain
with Medicare. Appeals to Medicare may involve coverage
issues, reimbursement/billing, and coordination of
coverage with other payers.
Special
Education
If
I anticipate a problem with my school district or
some other agency providing services, should I see
a lawyer before or after the problem materializes?
If the client thinks the risk of a problem is significant
and the problem will be serious, it's a good idea
to meet with an attorney first. We find it helpful
to review the case early and advise the client about
the law and possibly develop a strategy. This is preferable
to having to change a position taken which was not
legally advisable.
My
school district told me that it does not have to provide
any services if I do not sign the IEP. Is this true?
It depends. Parental consent is required only for
the initial IEP. Even then the district cannot refuse
to provide services indefinitely. The district must
seek administrative approval of the IEP. After the
first IEP, the school district must continue to provide
services whether or not the IEP is signed. If you
do not sign the IEP, the school district must wait
fifteen days before providing the services described
in the IEP. If the fifteen days go by and you have
not requested mediation or a due process hearing,
the school district can begin providing the services
described in the new IEP.
Are
school districts responsible for providing social
skills training?
Yes, if the student requires this due to a disability.
Many disabilities, such as Asperger's Syndrome and
Attention Deficit Disorder, impair students' abilities
to act appropriately in social situations. For these
students, the school district might have to provide
more intensive services to teach social skills. For
example, the school may have to provide a social skills
group or counseling with a psychologist or social
worker.
Is
it appropriate for the school district to come to
an IEP meeting with the IEP already written?
Generally, no. All decisions regarding a student with
a disability, such as what services the student requires
and what placement the student will attend, must be
made by the IEP team including the parents at an IEP
meeting. It may be permissible for the District to
prepare a "draft" IEP prior to the meeting
to facilitate discussion, but only if all of the decisions
regarding the final IEP are actually made by the full
IEP team, including the parents, at the IEP meeting.
My
school district told me that it does not have to pay
for anything except the "educational" costs
of a residential placement for my son and that DDD
or another agency would have to pay for the residential
costs. Is this true?
Not necessarily. If your son needs a residential placement
in order to make satisfactory educational progress,
the school district must pay the full cost of the
placement including the residential costs. It is permissible
for the school district to seek funding from other
government agencies for the residential costs of the
placement, but the school district cannot delay the
placement while it does so. Also, be careful because
if an agency other than the school district provides
services - - parents may be legally responsible to
reimburse the agency for the cost of services.
My
school district is trying to expel my son. Can I prevent
this if I agree to have him classified for special
education?
It depends. All students, whether or not they are
classified for special education, have rights against
being disciplined unfairly. However, students with
disabilities have far more protection against unfair
discipline than non-disabled students. Consenting
to classification may give you a better chance of
preventing expulsion. Keep in mind that as a general
rule, the fact that a student has been classified
for special education is confidential information
that the school district cannot disclose to other
students or colleges.
Adult
Services For People With Disabilities
Is
it necessary to be diagnosed with a specific disability
to receive services?
No. The agencies serving people with developmental
disabilities in both Pennsylvania (the county Mental
Health/Mental Retardation agency) and New Jersey (the
Division of Developmental Disabilities or "DDD")
use a functional approach in determining eligibility.
What is important is what a person can or cannot do,
not the disability label or medical diagnosis he or
she has been given.
Do
I have to wait until my child graduates from his special
education program to apply for or begin receiving
services?
No. Even if you do not need services right now, waiting
to apply is a bad idea. The eligibility process can
take several months to complete. Moreover, waiting
lists exist for some services such as residential
placement or day programs. Applying early can help
ensure that there is no interruption in services upon
graduation. In addition, some services, such as respite
care or family support stipends, can be useful even
while your child is still in school.
I
have heard that long waiting lists exist for group
homes. Is this true?
Yes, but that does not mean that immediate help is
not available. Even if you are placed on a waiting
list, you must be provided with appropriate alternative
or interim services. In addition, it may be possible
to be placed immediately if your situation is exceptional
or qualifies as an emergency.
How
much will it cost the parents if their son is placed
into a group home in New Jersey?
Assuming your son is over eighteen years old, you
will not have to pay anything. However, DDD will seek
to charge your son for the costs of his placement
using a formula in which the agency deducts a $40
personal needs allowance from the individual's net
monthly income, and then automatically seeks 50% of
the remaining unearned income plus any additional
amount that cannot be budgeted into these categories:
clothing, recreation, travel, medical/dental and funeral.
The amount that the agency will seek is determined
each year as part of the IHP process, and you can
appeal if you disagree with the agency's assessment.
We have filed a number of appeals based in part on
a case law holding that a state agency such as DDD
cannot require contributions from federal Social Security
benefits.
Elder
Law
How
can I obtain authority to make decisions for an elderly
parent?
There are at least 6 ways: (1) guardianship; (2) durable
power of attorney; (3) living will; (4) living (inter
vivos) trust; (5) joint account; and (6) representative
payee status.
What
is the difference between guardianship and a durable
power of attorney?
Guardianship is the result of a court proceeding.
A durable power of attorney is a document signed by
one person granting decision-making authority to another.
Generally, guardianship is necessary only when the
elder has failed to sign a durable power of attorney
and now lacks the capacity to understand what he or
she is signing or is unwilling to sign.
What
services are available to pay for long-term care ("LTC")
in a nursing home?
Individuals can provide payment for LTC themselves
or have it paid for under a special insurance policy
called "long-term care insurance." Generally,
Medicare and private health insurance plans will not
pay for placement in a nursing home, except for a
brief stay following illness. When skilled nursing
home care is required, Medicaid is the only government
program that will pay for LTC.
How
does Medicaid work?
The rules vary slightly from state to state. Generally
speaking, an applicant can have no more than $2,000
in "countable resources" and income must
be close to zero after substantial medical costs.
Can
I give away assets in order to qualify for Medicaid?
Yes, but the rules are tricky. Medicaid has a 36 or,
in some cases, a 60 month look-back period.
Suppose
X transfers her entire life savings of $40,000 to
her daughter. Suppose also that the average monthly
cost of nursing home care, as calculated by the local
agency which administers Medicaid, is $4,000. X would
be eligible for Medicaid for 10 months from the transfer.
Suppose X has $400,000 instead. She then must wait
36 months before applying, otherwise she will be ineligible
for 100 months ($400,000, at $4,000 per month).
I
am considering long-term care insurance. Should I
pay extra to obtain a rider for home care?
I have very mixed feelings about these riders. The
notion of staying home instead of going to a nursing
home is very attractive. But, most policies say that
the insurance company can elect to pay for nursing
home care if it is cheaper than in-home care. Considering
how expensive it is to provide in-home one-to-one
care, there might be few instances in which the applicant
qualifies for services, but only needs a small amount
of home care.
How
do I pay for a nursing home?
Chances are that you or your spouse will spend a year
or longer in a nursing home. There are four ways to
pay for it: (1) use your own money; (2) use someone
elseâs money; (3) use insurance or (4) let the
government pay for it.
Here
are some thoughts on each from a legal perspective:
1. Pay for it yourself. Care in a quality nursing
facility can exceed $75,000 annually. This sounds
enormous, but it is well within the means of some
to meet this cost. Plus, in the case of an unmarried
or widowed person with no dependents, there are virtually
no other expenditures to consider. Private pay arrangements
mean that the very best facility will be available
when you need it.
However,
it is important that you have a mechanism in place
to ensure that funds will be available to spend as
you wish, if you are not able to handle your affairs
at the time. A power of attorney, or even better,
a trust can accomplish this. Your agent or trustee
must be someone (or an organization) who will follow
your wishes. There is a risk that family might wish
to transfer your assets for other purposes.
To
digress for a moment, a durable power of attorney
is a document that allows someone to act on your behalf,
especially if you are incapacitated. A trust is an
instrument to hold assets that are managed by a trustee.
Sometimes trusts are used for tax purposes or to avoid
probate. But, trusts can also serve to control your
assets in the event of incapacity. Such trusts are
called "stand-by trusts," and might remain
unfunded until incapacity.
2.
Have someone else pay for it. This is not as silly
as this might seem. You could transfer assets to a
trusted family member who will later pay for your
care and obtain a medical deduction for income tax
purposes. This approach can significantly reduce the
actual cost of care, especially if the family member
is in a higher tax bracket.
3.
Long-term care insurance. In the 15-plus years that
I have been involved with elder law, such insurance
has become not only more popular but more necessary
for many. Medicaid rules concerning the transfer of
assets have become much tighter. The private cost
of care in a nursing facility is beyond the reach
of many, especially if a spouse or other dependent
remains at home, and even if not, private insurance
may make sense economically. Also, it will give you
the freedom of choosing the facility you want. Some
facilities do not accept Medicaid; others have long
waiting lists for Medicaid beds.
4.
Medicaid. Do not confuse Medicaid with Medicare. Medicare
will pay for only very limited amounts of care in
a nursing facility. Medicaid provides unlimited coverage,
but an applicant must meet income and resource tests
and there is a 36-month "look-back" period
regarding the transfer of assets.
Here
is how the transfer rule works: suppose Larry, a widower,
has $350,000 in resources: a home, a life insurance
policy with a cash value, savings and an IRA. On January
1, 1997, Larry transfers all of his assets to his
daughter, Elaine. Larry enters a facility on February
1, 2000. Larry is Medicaid eligible because his resources
are no more than $2,000 and more than 36 months has
passed since he transferred his assets.
Suppose,
instead, Larry transferred his assets to Elaine on
January 1, 1998, and applies for Medicaid on February
1, 2000. This leads to 100 months of ineligibility
from the date of transfer because the transfer occurred
within 36 months. The number of months of ineligibility
is computed by dividing the assets transferred by
the average cost of nursing care as determined by
Medicaid (approximately $3,500). Therefore, Larry
should wait another year before applying so that he
is outside the 36-month "look-back" period.
The
downside for the transfer is that Larry must enter
a facility that will accept Medicaid. Moreover, the
transfer of the IRA and home will have negative income
tax consequences. On the other hand, he has preserved
Elaine's inheritance.
Larry
will also have to meet an income test, but the cost
of care in a nursing facility can be deducted from
his income; therefore, the income test should not
be a problem.
A
word of caution: if you contemplate a transfer of
assets, be careful not to confuse Medicaid law with
federal gift-tax law. You can transfer $10,000 annually
to as many people as you wish. Such transfers are
excluded from federal gift tax, but have nothing to
do with Medicaid. Frequently, I see clients who mistakenly
think there is a $10,000 annual limit on transfers.
Like
everything else in life, it is not always clear what
to do, and worse, when to do it. Much depends on family
dynamics and weighing the comparable costs of action
versus inaction.
One
couple might have complete confidence in their children
so that a transfer poses little risk in their view.
Another couple might not have confidence in their
children, or they might wish to ensure them personal
independence. Also, any move might have significant
tax consequences and these must be weighed carefully.
OTHER
I
would like to have one of the attorneys speak to my
group. How do I arrange this?
It's simple. Just call the office (609-896-4200) and
set up a date.
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