Frequently Asked Question #2:

 Medicaid: What is the 5 year look back and how does the penalty period get calculated?

It is not uncommon for me to canvas a group of people and find out that the majority of the group has heard of the 5 year look back when it comes to applying for Medicaid in a nursing home. I, however, regularly receive follow up questions regarding the details of how the 5 year look back and penalty period works.

 

The 5 Year Look Back

 The look-back period for all transfers made is 60 months (5 years) for New York State nursing home Medicaid applications filed. This means that when an individual applies for Medicaid coverage in a nursing home, the local Medicaid agency will review the applicant’s transfer history for both real estate and finances to see if any uncompensated, non-exempt transfers (gifts) were made within the 5 year look back. If the agency determines that there were such transfers within the 5 year look back, a penalty will be assessed and the applicant will be ineligible for Medicaid for a period a time and therefore will have to pay privately for the nursing home care provided during that period of ineligibility. This can be very costly given the cost of care in a nursing home. For example: If the nursing home costs $15,000 per month and the applicant is penalized for 5 months, this will result in the applicant having to pay $75,000 to the nursing home before the applicant’s care is covered by Medicaid.

 

The Calculation of the Penalty Period

If the local Medicaid agency determines that there was gift within the 5 year look back subject to a penalty, the agency will determine the length of time the applicant is penalized by dividing the value of the transfer by a regional rate determined by Medicaid (in essence, that average monthly cost of a nursing home in that region) for the County that the applicant is applying in. For example, if a Nassau County applicant made a gift within the 5 year look back in the amount of $130,000, Medicaid would assess the penalty period as follows:

$130,000 (value of the transfer)/$13,053 (the regional rate for Nassau County for 2018) = 9.95 months (the amount of time the applicant is ineligible for Medicaid).

In the example above, the penalty period is almost 10 months. This will result in a significant private pay bill to the nursing home.

It is very important to anticipate and plan for a situation such as this when applying for Medicaid nursing home care and to consult with an experienced elder law attorney.

 

Choosing and working with a law firm can be stressful. Often you don’t know what the process is, what it will cost, and whether the law firm will even be able to help you! To feel confident in your choice, and to know that your confidence is not misplaced, you should look for much more.
Our team of elder law attorneys, estate planning attorneys, and special needs (disability) attorneys have represented the elderly and persons with special needs/disabilities and their families since 1985. In most professional occupations there is no replacement for experience. At Russo Law Group, P.C., our caring and compassionate staff have been involved in literally thousands of cases. Our experience is your protection.
Here are just a few reasons why.

Frequently Asked Question #1:

What is the difference between a First Party Special Needs Trust and Third Party Special Needs Trust?

Several factors should be considered when determining whether a First Party Special Needs Trust or a  Third Party Special Needs Trust should be utilized when developing the appropriate plan for a beneficiary with special needs. In both circumstances, the type of government programs the individual is receiving should be considered, as well the age of the beneficiary and the needs of the beneficiary. In addition, one of the key factors in determining what kind of Trust to use is whether the assets that are going to be used to fund the Trust are those of beneficiary or those of a third party.

 

First Party Special Needs Trust

A First Party Special Needs Trust is Trust that is established for the benefit of an individual with special needs. The Trust is funded with the assets of the beneficiary. This type of Trust is exempt for Medicaid eligibility purposes and the funding will not affect the Medicaid eligibility of the beneficiary.

There is a statutory requirement that the disabled beneficiary be under the age of sixty-five (65) upon the creation of the trust. If a Special Needs Trust is created for an individual who is under the age of 65, that trust will remain exempt if the individual lives beyond the age of 65. However, any assets added to the trust after the individual reaches age 65 will be subject to the Medicaid transfer penalty rules.

The First Party Special Needs Trust must contain a “payback” provision. That is, upon the death of the beneficiary, any balance left in the trust must be paid back to the Department of Health in an amount not to exceed the Medicaid benefits paid on behalf of the individual.

A typical example of when a First Party Special Needs Trust is established is when someone who is receiving a needs-based government benefit (such as Medicaid) receives a money either as an inheritance that was lrft directly to him or her or from a lawsuit, such as a medical malpractice.

 

Third Party Supplemental Needs Trust

When established as a living trust, a  Third Party Supplemental Needs Trust is a good planning tool when the Trust is going to be funded with assets from someone other than the beneficiary of the Trust. For example, the assets of the beneficiary’s parents may be used to fund the Trust. In addition, if there are other people who may be inclined to make gifts or bequests to the individual with special needs, such gifts or bequests can be made directly to this trust, now or in the future, without effecting eligibility for programs such as Medicaid or SSI for the individual with special needs.

Unlike a First Party Special Needs Trust, a Third Party Supplemental Needs Trust does not require the payback provision to the state.

 A Testamentary Third Party Supplemental Needs Trust can also be established under an individual’s Last Will and Testament for the benefit of the beneficiary without adversely affecting the beneficiary’s eligibility for government programs such as SSI and Medicaid.  A testamentary trust does not get funded (receive any assets) until the person who created the Will dies.

It is very important, especially when planning for someone with special needs, to consult with an experienced special needs planning attorney so that your loved ones, and the benefits they need, are protected.

 

Choosing and working with a law firm can be stressful. Often you don’t know what the process is, what it will cost, and whether the law firm will even be able to help you! To feel confident in your choice, and to know that your confidence is not misplaced, you should look for much more.
Our team of elder law attorneys, estate planning attorneys, and special needs (disability) attorneys have represented the elderly and persons with special needs/disabilities and their families since 1985. In most professional occupations there is no replacement for experience. At Russo Law Group, P.C., our caring and compassionate staff have been involved in literally thousands of cases. Our experience is your protection.
Here are just a few reasons why.

 

In New York State, in order to contest a person’s Last Will and Testament, the challenger must have the right to do so. This right is known as “standing”.

A challenger has standing under the following circumstances:

  1. When he or she has been named as a beneficiary in the will or a prior will; or
  2. When the challenger would be entitled to a share of the estate had the decedent died without a Will (called “intestacy”). Under the intestacy statute, generally, those entitled to object are the closest living heirs of the decedent.

If you are concerned that your Last Will and Testament will be challenged upon your passing, you should confer with your Estate Planning attorney to determine the appropriate plan for you.

For example, an individual who is concerned that his or her will might be challenged may choose to set up a Trust. That way, upon his or her passing there, will likely be no reason to probate the decedent’s Last Will and Testament, thus making it more difficult to challenge.

In addition, the Estate Planning attorney may include a no contest provision in your Last Will and Testament. The purpose of this clause is to deter an individual from challenging the Last Will and Testament, since the provision stipulates that if that individual challenges the Last Will and Testament and later loses the challenge, he or she will forfeit any share they may have been entitled to.

If you have questions or concerns about a challenge to your estate planning or Will, please contact us.

 

Choosing and working with a law firm can be stressful. Often you don’t know what the process is, what it will cost, and whether the law firm will even be able to help you! To feel confident in your choice, and to know that your confidence is not misplaced, you should look for much more.
Our team of elder law attorneys, estate planning attorneys, and special needs (disability) attorneys have represented the elderly and persons with special needs/disabilities and their families since 1985. In most professional occupations there is no replacement for experience. At Russo Law Group, P.C., our caring and compassionate staff have been involved in literally thousands of cases. Our experience is your protection.
Here are just a few reasons why.

A homestead is defined by Medicaid as the primary residence occupied by the applicant, the applicant’s spouse, or the applicant’s minor, disabled or blind child. A homestead is exempt for purposes of Medicaid eligibility under certain circumstances. The law limits that the applicant’s net equity in the home must be valued at or below $858,000 for 2018. On its face, this means that an individual may apply for Medicaid with the title to their home still in his or her name.

Problems can arise if an exempt homestead is occupied by an individual with no spouse, minor, disabled or blind child in the household. It is possible for an exempt homestead to lose its exemption if the status of the sole occupant changes, i.e., the occupant leaves the home and is considered by the local Medicaid agency to be in a permanent absent status. By placing an individual in permanent absent status, the local Medicaid agency is presuming that the individual will not return home. A key element as to whether an individual is in permanent absent status is the intent of the individual to return home.

Additionally, if a homestead is owned solely by the Medicaid recipient, when that person passes away, the local Medicaid agency is entitled to recover (get paid back) from the estate of the recipient.

It is, therefore, good practice to meet with your estate planning attorney to determine the best strategy for protecting your home in the event you require long term health care in the future. Planning strategies may include transferring your home to a Medicaid asset protection trust or to a spouse.

Please contact us with any questions you may have regarding protecting your home or other assets from the costs of long term care.

Choosing and working with a law firm can be stressful. Often you don’t know what the process is, what it will cost, and whether the law firm will even be able to help you! To feel confident in your choice, and to know that your confidence is not misplaced, you should look for much more.
Our team of elder law attorneys, estate planning attorneys, and special needs (disability) attorneys have represented the elderly and persons with special needs/disabilities and their families since 1985. In most professional occupations there is no replacement for experience. At Russo Law Group, P.C., our caring and compassionate staff have been involved in literally thousands of cases. Our experience is your protection.
Here are just a few reasons why.

What is a Pet Trust?Most pet owners think of their pet as a member of the family.  

You love your pet and want to make sure that he will be taken care of after you pass away. After reaching that decision, most people are still unsure of what arrangements need to be made.  

What is a pet trust?

A pet trust is a legal agreement to provide for the care of one or more pets in the event that the pet owner dies or becomes unable to care for them. New York State gives statutory authority for the benefit of pets under Estates, Powers, and Trusts Law, Chapter 17-B. (more…)

An individual’s estate plan should include legal documents that authorize a person of your choosing to make the necessary financial and health care decisions for you in the event you are unable to make your own decisions.

Every adult individual should have a comprehensive Durable Power of Attorney. The Durable Power of Attorney can be executed in favor of one or more individuals of your choosing, including family members (for example: spouse, children).

This will enable the person that you have designated to make financial decisions on your behalf if and when it is necessary. A comprehensive Durable Power of Attorney may also become a critical part of your plan to protect and preserve your assets. This document should contain expanded powers, such as the authority to make gifts and to sign tax returns, as well as provide for successor agent(s). In addition, this planning tool is essential in avoiding a Guardianship proceeding which can be time-consuming, costly and restrictive.

In addition, every adult individual should have health care decision making documents, including a Health Care Proxy, Living Will and Medical Authorization. A Health Care Proxy which will allow a family member or another individual of your choosing (such as your spouse or child) to make health care decisions on your behalf if you are unable to do so. Only one agent can be appointed to act at a time. It can also state your wishes regarding organ donation.

A Living Will specifies your desires as to life-sustaining treatment in the event there is no reasonable prospect of recovery. This document provides guidance to your agent named in your Health Care Proxy as to your desires regarding extraordinary life-sustaining treatment.

Lastly, a Medical Authorization allows for the disclosure or release of your health information to the individuals that you have selected to make health care decisions for you. This allows your health care agent(s) to access your health care information to make the most informed decisions about your care.

It is critical that every adult who has the ability to sign these documents do so. If you have any questions, please contact us.

 

Choosing and working with a law firm can be stressful. Often you don’t know what the process is, what it will cost, and whether the law firm will even be able to help you! To feel confident in your choice, and to know that your confidence is not misplaced, you should look for much more.
Our team of elder law attorneys, estate planning attorneys, and special needs (disability) attorneys have represented the elderly and persons with special needs/disabilities and their families since 1985. In most professional occupations there is no replacement for experience. At Russo Law Group, P.C., our caring and compassionate staff have been involved in literally thousands of cases. Our experience is your protection.
Here are just a few reasons why.

Under current law, certain transfers of assets by a Medicaid applicant or recipient do not result in any transfer penalties. Any asset of any value or type can be transferred without penalty to a disabled child of any age. The law allows for transfers to the applicant’s child who is certified blind or disabled.

The production of the child’s disability award letter to the Medicaid agency can serve as proof of the child’s disability.

While producing the child’s disability award letter may be straightforward, what happens in a case where no disability determination was ever made?

According to a New York State Department of Health directive (NYS DOH GIS 08 MA/036), you may request a Medicaid disability review for the non-applying adult child. Thereafter, a disability review packet will be compiled and sent to the State Review Team for determination.

Although assets in any amount can be transferred to a disabled child of any age without affecting the Medicaid eligibility of the transferor, several other factors must be considered. The disabled child may be receiving government benefits and it should be determined whether the transfer will affect the disabled child’s eligibility for such benefits. For example, if the disabled child is receiving SSI benefits, a transfer to the child could mean the loss of the child’s SSI as well as Medicaid. Whenever a transfer of assets to anyone other than a spouse is contemplated, the gift tax consequences of the transfer must be explored as well.

If you have any questions regarding transfers to a disabled child, please contact us.

Choosing and working with a law firm can be stressful. Often you don’t know what the process is, what it will cost, and whether the law firm will even be able to help you! To feel confident in your choice, and to know that your confidence is not misplaced, you should look for much more.
Our team of elder law attorneys, estate planning attorneys, and special needs (disability) attorneys have represented the elderly and persons with special needs/disabilities and their families since 1985. In most professional occupations there is no replacement for experience. At Russo Law Group, P.C., our caring and compassionate staff have been involved in literally thousands of cases. Our experience is your protection.
Here are just a few reasons why.

It is safe to say that estate planning is generally not a prime consideration for most young adults in their 20s or 30s. The truth is that estate planning for people in this age group is just as important as it is for anyone else!

If you are unable to make your own health care decisions or financial decisions, it is important to ensure that someone trustworthy is authorized by law to make decisions on your behalf: Therefore, anyone age 18 or older should have the following documents:

A Durable Power of Attorney allows an individual that you select to make financial decisions for you, if necessary. Similarly, your Health Care Proxy will designate an individual of your choosing to make healthcare decisions for you if needed.

In addition, for individuals with young families, a Last Will and Testament is not only necessary to set forth who should inherit your assets, but it will also designate guardians for your minor children. Guardian appointments stipulate the person or people who will take care of the children, should you pass away prior to when your children reach the age of 18. It is incredibly important to have this designation in writing.

Consulting with an estate planning attorney at any age will ensure that your goals and wishes are carried out. Contact us today with questions or comments.

 

Assisted living facilities can often be an excellent option for a person who is interested in residing in a place where he or she can receive supervision or assistance with Activities of Daily Living, and where the resident is monitored to help assure his or her well being.

Traditionally, assisted living facilities were funded or paid for by the resident’s private money. In many of these instances, the use of a long-term care insurance policy is proven to be extremely helpful in paying for the cost of the assisted living facility. The payment from the long-term care insurance policy allows the individual the freedom to choose to live in an assisted living facility and privately pay for that stay.

Presently, there are only a few assisted living facilities that accept Community Medicaid. This allows the individual to reside in the assisted living facility and have the majority of his or her bill paid for by Medicaid. This may be an invaluable option for a client who does not have the funds to pay privately, does not have the long-term care insurance to defray the costs, but is not nursing-home ready and cannot stay at home.

Under this program, the applicant would apply for Community Medicaid to help reduce the cost of residing at the assisted living facility. Currently, there is no 5-year look back for Community Medicaid, thus allowing for a considerable amount of flexibility when planning for this option.

An individual’s well being and place of residence as they age is very important and personal. It is recommended to contact your attorney to find out the best option for you. Please do not hesitate to contact us with questions.

 

Businesswoman PaperworkBeing the trustee of a special needs trust is a very important role as it serves to protect the interests of a beneficiary with special needs.

Often, a special needs trust is established so that the beneficiary can have the use of funds that are left to them via an estate or funded during an individual’s lifetime. A special needs trust often preserves certain government benefits that are means-tested for the beneficiary. If the terms of the trust are violated, this could jeopardize the beneficiary’s benefits.

Responsibility #1: Understand the Benefits

An important responsibility of the trustee is to fully understand the benefits that the special needs beneficiary is receiving. For example, if the special needs beneficiary is receiving Supplemental Security Income (SSI) or Medicaid, there are certain restrictions on what is allowed to be received by the beneficiary.

Responsibility #2: Ensure Proper Distributions

By understanding the benefits, the trustee of the special needs trust can ensure that proper distributions are being made from the trust. The trustee would confirm that the distributions follow the terms and restrictions of the special needs trust. The trust will contain certain language that prohibits or allows the trustee to make certain distributions, so that government benefits may be maintained.

Responsibility #3: Follow Tax Reporting Requirements

In addition to making sure that distributions are made properly, another responsibility of the trustee of a special needs trust is to follow all tax reporting requirements. Trustees are required to file the trust income tax returns. Following these rules and guidelines are crucial because the beneficiary will be penalized should taxes not be filed properly and in a timely fashion.

Responsibility #4: Properly Invest Assets

Another responsibility of the trustee is to make sure assets are invested properly. It is the duty of the trustee to invest the trust assets in a manner that will result in the best use and growth of the trust assets. The trustee may seek to hire a qualified financial professional to make sure this is being accomplished. The trustee must also keep accurate records of any distributions made and any other transactions to or incoming/outgoing of the trust.

The duties listed above should not be taken lightly. The trustee of any trust is held to a fiduciary standard. Mismanagement of the trust may result in financial harm to the beneficiary of the trust.

We recommend that you seek professional guidance from an attorney that practices in the area of special needs planning, as well as an accountant, and a financial planner who is familiar with the rules and regulations of special needs planning.

Please contact us with questions or comments.

 

3 Reasons to Avoid ProbateWhen a person dies, his or her estate may need to go through probate. If the decedent leaves a will directing how his or her property should be distributed after death, the will must be submitted to the probate court so that it can be approved as a valid document. During this process, all of the parties that have the legal right to notice will be informed of this proceeding. This will give them a chance to accept or object to the approval of the will. (more…)

Life’s 5 Most Stressful Events: Are You Prepared?There are some events in life that we can’t emotionally prepare for. They can come on suddenly and unexpectedly. But an estate planning attorney can help legally prepare for some of them.

There are some life events that can be considered very stressful. (more…)

Steps to Obtain Medicaid in a New State of ResidenceA number of my clients have experienced a gap in their Medicaid coverage because they moved from one state to another to be closer to their families. It is important to remember that Medicaid is not portable. You cannot simply transfer it from one state to another. For example, if you are receiving Medicaid benefits in New York and you move to another state, the New York State Medicaid eligibility will be lost. Meanwhile, there could be a considerable delay before you are enrolled in Medicaid and start to receive benefits in your new home state. (more…)

Am I Entitled to Supplemental Security Income?The Supplemental Security Income program, known as SSI, is a federally administered program.

Unlike Medicare or Medicaid, SSI is a federal welfare program that pays monthly cash benefits to individuals who fall within 1 of 3 categories: (more…)

Planning Hospice Care: Dignity PrevailsCaring for a loved one at the end of his or her life is both a duty and a privilege.

Hospice is a type of care for individuals who have 6 months or less to live. Instead of trying to cure the illness, pain management & symptom relief become the focus of the patient’s medical team. Hospice care can be obtained in home or in a facility.
(more…)

exclamation alertHealth Alert: Coronavirus Update We want to do our part to keep our clients as healthy as we can. We have implemented office policies and procedures. Click here to read more.