With the Home Care industry already struggling to maintain proper staffing, and Medicaid restructuring their payment system a few years ago, the idea of getting 24-hour coverage by paying privately or through Medicaid has become cumbersome.
As a result of a recent ruling focusing specifically on the wages that should be paid to a live-in aide, less and less families who are paying privately for this service will be able to afford 24-hour coverage.
It has long been understood that if a family or Medicaid were providing 24-hour “live-in” care, that Home Health Aide would be paid for a 13-hour day. They would be allotted 8 hours to sleep and an hour each for breakfast, lunch and dinner. In a recent decision by the New York Supreme Court, New York County, the “13-hour rule” was held to be “null, void and invalid”.
- The terms “live-in” and “sleep-in” have been redefined –
- Live-in is defined as someone whose residence is that of their employer’s and who has no other residence
- Sleep-in is defined as someone who works and sleeps in their employer’s residence but maintains a separate legal residence
- The companionship exemption, which offers the option to avoid paying for sleep time, is specifically not available to third-party employers, such as home care agencies. It is an option only available to direct-hire domestic household employers.
With this mind-set of paying an aide 24 hours for care, there is growing concern that more and more seniors will find placement in nursing homes because it will be more cost effective.
There is also concern that these same issues will plague the MLTC (managed long-term care) and CDPAP (consumer-directed personal assistance plans) programs. While we have not received any specific ruling on paying aides through these programs, it is just a matter of time.
One of the most frustrating things as a Special Needs planning attorney is to have someone in my office doing planning and they tell me that they need to disinherit a family member because they are receiving some kind of government benefits. Their mindset is that they are looking out for that loved one, but in reality, they may be unnecessarily disinheriting them.
Pat was in my office a few years ago. After doing planning to get Pat’s husband on Medicaid in a nursing home, it was time to plan for Pat. Pat has a daughter, Sarah and a son, John. John is disabled and still living with Pat. Pat explained all the wonderful things that John does to maintain some independence despite that fact that he has extreme needs and is currently on Social Security Disability and Medicaid. Pat’s daughter Sarah is married and has children.
While creating a trust for Pat’s assets, she informed me that she did not want to leave anything to John because she did not want to create problems for his Medicaid coverage. She explained that she already spoke with Sarah about it and she is going to leave everything to Sarah who promised she would take care of John. I explained to Pat that I have the following concerns:
- What if Sarah has to file bankruptcy?
- What if Sarah gets divorced?
- What if Sarah dies before John?
- What if Sarah gets sued?
I explained that in all of these scenarios, Pat is leaving John with no guarantee that he will be cared for. Pat believes that Sarah’s husband will just step in and take over, but what happens if he remarries and the new wife doesn’t want that?
Pat is better off making sure that her documents establish a supplemental needs trust for John’s share of the inheritance. This will guarantee that John’s share is always there for his needs without affecting his important government benefits like Medicaid. Pat can have Sarah act as the Trustee of that trust and then name alternates, and by making this change, Pat is protecting John from life events that may happen to Sarah and that gave Pat peace of mind.
“My mother has too much money, so I guess she has to pay privately for her home care”, Mary told me recently.
As an Elder Law Attorney for over 17 years, I can tell you that I hear this almost daily. We live in such an on-demand world these days that we look to the internet for all of our answers. Pain in your side, WebMD will give me the answer. No need to pay that co-payment for real advice, right? Wrong!
While the internet is a great source of information, it doesn’t replace the need to speak to a professional about your specific case, whether legal or medical.
In the case of Mary, who thinks that mom has too much money for Medicaid to pay for home care, without the guidance of an experienced Elder Law attorney, she will spend down tens of thousands of dollars before she sees any relief. What happens if she spends down all of mom’s money and then Medicaid doesn’t give mom the care for all of the hours that Mary thinks she needs?
Then there is Sue. Sue also did her research online and she found out that mom has “too much income”. She has also decided that Medicaid wouldn’t possibly pay for the help her mom needs because her income is over the Medicaid allowance and there is nothing that she can do. What Sue did not know is that Medicaid rules vary from state to state. What she read on the internet may not have even been related to New York laws! As a result, Sue is not only struggling to contribute her own funds to pay for mom’s care, but she is also spending all of her “down time” away from her own family so that she can help keep costs down while helping to take care of her mom.
In both scenarios, an Elder Law Attorney would have reviewed mom’s individual assets and income and needs to come up with a plan. The attorney would have told Mary about the transfers that Medicaid allows, while still providing Medicaid home care coverage for mom. The attorney would have done a cost-benefit analysis with Sue to determine if a pooled income trust was a viable option for mom’s income so that she can qualify for Medicaid home care services without a complete spend down of her monthly income.
While the internet may be a great starting point full of resources, it is ALWAYS best to speak with an experienced professional about your own personal issues to create the plan that is best for you and your family.
So you own your home and you think that it will be transferred to your family upon your passing without going to court. But is that really the case? What does all of this mean?
A house that is owned by spouses often makes such a reference (i.e. John Smith and his wife, Jane Smith) or has the designation as “tenants by the entirety”. This type of ownership means that the surviving spouse will automatically take the full ownership of the property upon the passing of the first spouse. No change to the deed is necessary.
However, this designation does not automatically transfer the property to the surviving children upon the passing of the surviving spouse. You would have to take additional steps, either through a trust or will, to make sure that your home is transferred to the beneficiary that you designate.
Let’s look at a few different types of typical deed language and what each means:
- ”Joint with right of survivorship” (“JTWROS”).
This is similar to that of tenants by the entirety, but in this case, the owners are not married and you can have more than two owners under this designation all owning equal shares. Upon the passing of an owner, the surviving “joint tenants” (or owners) automatically own the property in equal shares.
- “Tenants in common” (“TIC”).
This designation means that each owner has an equal ownership interest (the percentages do not have to be equal). If one owner passes, their interest is transferred to their estate and will pass according to their Last Will and Testament or under New York state intestacy laws if there is no Will. Their beneficiaries then own that percentage of the property. The transfer of the property through someone’s estate will require additional legal fees and court fees. Not to mention the delays by the court to process the transfer. If a deed is silent as to the type of ownership, ie, it does not state JTWROS or TIC, then it is considered a TIC ownership.
The life estate designation means that person retaining that interest has an ownership interest which changes as they age. Having a life estate means that the person can live in that property for the rest of their life or even rent the property if so desired. That life estate owner has to give his or her permission to sell the home because they have a right to live in the home for their lifetime. The life estate interest also means that they are responsible of the maintenance and upkeep of the property. Upon the life estate holder’s passing, the property then passes, in its entirety, to the Grantees (typically the owner’s children) listed on the deed. It is also possible to have a life estate on more than one property.
Please note that these designations don’t all provide protection of the property if an owner is looking to have Medicaid cover their long-term care costs.
It’s that time of year where we are celebrating with our loved ones and we are starting to make plans for what we want to do better or different in the coming year. Reassessing your estate plan should be at the top of that list.
I have found that over the years, more and more clients are buying that second home down south with the hope that they can either move to a quiet place when they retire, or at the very least, escape the brutal winters of New York. What most people don’t understand is that owning property in multiple states brings complexity to their estate planning.
Recently I had a discussion with Betty about the fact that she owns a home here in New York and she also owns a second home in Florida. In that discussion, we talked about who should ultimately get the homes when Betty passes and the process of how that would happen. The homes are owned solely by Betty (as most properties are). What Betty needed to understand was that even though her New York Will stated that her son should receive the Florida home upon her passing, if she was relying solely on her Will to accomplish this, her son would have to probate her estate in both Florida and New York. That means two sets of legal fees and court fees in order for her son to get the homes that she wants him to receive.
How can we simplify this? Betty can transfer her assets into a trust (Revocable or Irrevocable). The deed is changed for that property to reflect that the trust owns the property. Once the trust owns the property(ies), the courts will not need to be involved when Betty passes. The property(ies) can be transferred or sold by the Trustee of the trust. Betty’s son will avoid the expense of being in probate court in two different states. He will also avoid the delays involved with the court process and the added expenses associated with probate. At the end of the day, Betty’s son will receive the Florida property with a simple deed transfer.
If you own property in more than one state, you should immediately review your planning to understand if your plan sufficiently addresses these issues.