Elder Law Attorneys Serving Salt Lake County, Utah

Utah Probate, Elder Law, Medicaid, Guardianship and Special Needs Blog

Monday, November 21, 2016

Interplay of Medical Opinions and Elder Law Issues

Read about six important areas where your doctor's evaluation is vital to your legal planning and safety...

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Wednesday, September 28, 2016

Utah Advance Directive Clinic-Aging Mastery Program at Riverton Senior Center

Join me tomorrow at the Riverton Senior Center for a clinic on the Utah Advance Directive as part of the Aging Mastery Program sponsored by the National Commission on Aging.  Pre-registration is required.  See you there!

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Monday, August 29, 2016

Why all Estate Planning Should Address Disability

Unfortunately, many older Americans will either be medically ineligible for long term care insurance or unable to afford the premiums. In that event, more aggressive planning should be considered as early as possible to make sure life savings are not depleted as a result of having to pay out-of-pocket for care. With the help of an elder law attorney, a plan can be created that will protect much of the assets of an individual or couple that would otherwise be at risk of being depleted. 

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Wednesday, August 24, 2016

Reasons Why Everyone Needs a Comprehensive Power of Attorney-Kathie Brown Roberts P.C.

The benefits of a highly detailed, comprehensive power of attorney are numerous. Unfortunately, many powers of attorney are more general in nature and can actually cause more problems than they solve, especially for our senior population. This entry highlights the benefits of a comprehensive, detailed power of attorney, including some of the provisions that should be included. A proper starting point is to emphasize that the proper use of a power of attorney as an estate planning and elder law document depends on the reliability and honesty of the appointed agent.

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Monday, April 6, 2015

Join me at Hyatt Place/Seminar on Protecting Assets While Qualifying for Medicaid

I will be speaking at the NBI seminar "Protecting Assets while Qualifying for Medicaid" on 5/2/2015 at Hyatt Place, Downtown Salt Lake City.  You may phone (801) 456-6300 to register.  

Thursday, March 19, 2015

Proposed Changes to VA Benefits- Kathie Brown Roberts P.C.

On January 23, 2015, the Department of Veteran Affairs (hereinafter “VA”) issued proposed changes to the regulations affecting VA Pension eligibility, a needs-based program.  In support of the proposed changes to the regulations, the VA points to the results of a 2012 Government Accountability Offices (GAO) report.  That report recommended changes in order to “maintain the integrity of VA’s needs-based benefit programs.” 

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Monday, February 23, 2015

Medicaid Planning: Converting Assets and Transfers for Fair Market Value in Utah-Kathie Brown Roberts P.C.

Converting Assets from Countable to Exempt/Transfers for Fair Market Value/Medicaid Compliant Annuities.

In order to qualify financially for Medicaid long term care in Utah,  cash assets in excess of $2000.00 (of a single prospective applicant) may be used to pay off debts such as mortgage on home, vehicle, purchase of funeral plot and services relating to funeral, purchase of life insurance policy to fund funeral arrangement, funeral trust, medical/dental services that are not covered by Medicaid, legal fees.

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Monday, February 16, 2015

The Family Home and Medicaid Eligibility in Utah-Kathie Brown Roberts P.C.

When does home become a countable asset?

In short, a home (and one lot) is normally an exempt asset for a Medicaid long term care applicant.[1]  If the home is sold and the proceeds of the home are not reinvested into another home, the proceeds become countable.  Additionally, to the extent that the single Medicaid applicant does not intend to return the home, the home becomes a countable asset.

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Friday, February 13, 2015

Transferring Title to your Home and Utah Medicaid

The Utah Department of Health policy manual section 371-4 provides that the home of a Medicaid applicant may be transferred to the following protected classes without incurring a transfer penalty or impacting the applicant’s eligibility:

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Wednesday, February 11, 2015

The Able Act...a Medicaid 529 Plan?

The ABLE Act Defined

The ABLE Act is a federal law that allows states to establish a savings program for persons with disabilities.  The program is modeled after the 529 savings accounts.  ABLE accounts may be used to accumulate savings, with certain restrictions, for use by a beneficiary with a disability.

 An ABLE account may be established by any contributor (a parent, friend, family member or the person with a disability) for the benefit of an eligible beneficiary of any age so long as that person can establish they met the criteria prior to age 26. An eligible beneficiary is an individual who meets the standard for disability prior to turning the age of 26.  A recipient of SSI or SSDI satisfies this requirement while those who do not receive such benefits must be certified under the act.

 Financial Limitations on the ABLE Act

 While the ABLE Act has made strides in bringing to light the issue of saving for those with disabilities, there are limits to the Act.  For example, the Act imposes a limit as to the amount of savings that can be held in an ABLE account. 

 The first such limitation deals with the annual contribution amount, which may not exceed the annual gift-tax exclusion amount (currently $14,000).  In addition, ABLE accounts may only accumulate aggregate contributions up to the state’s limit on qualified tuition programs (i.e. 529 accounts), which ranges between $300,000 and $400,000.  And, finally, SSI exempts only the first $100,000 of an able account.  Therefore, if an individual receives SSI, his or her ABLE account may not exceed $100,000 and he/she may have other assets up to only $2,000.  Otherwise, the individual will become ineligible to continue receiving SSI, but can remain eligible for Medicaid.

 Medicaid Payback

It is important to note that the ABLE account is a “Medicaid Payback” account.  This means that the Act requires a provision in the account that upon the death of the beneficiary of the account, Medicaid payments made on behalf of the beneficiary subsequent to the establishment of the ABLE account must be reimbursed with any remaining funds.  As a professional serving those with special needs, attention to the client’s priorities should be weighed carefully when determining the amount of savings to place in an ABLE account given this payback provision.  When a beneficiary of an ABLE account is receiving Medicaid, it is important to consider how much should be placed in the ABLE account to limit what may be recovered by Medicaid at the end of the beneficiary's life.

 Tax Benefits

 ABLE accounts have tax benefits similar to 529 accounts.  Qualified distributions from the account are not counted as taxable to either the contributor or the beneficiary.  Qualified distributions include expenses paid for the benefit of the beneficiary related to:  education, housing, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, funeral and burial expenses, and any other expenses approved by the Secretary of Treasury.

 In addition, earnings on the ABLE account are not taxable to the contributor or to the beneficiary.  Contributions, however, are made from post-tax income.

 Finally, assets in an ABLE account may be rolled over to another ABLE account for the benefit of another qualified individual who is a brother, sister, stepbrother, or stepsister of the beneficiary.

 Uses of the ABLE Act

A person receiving needs-based government benefits often has a dilemma when it comes to saving, whether for education or for unexpected events, all while maintaining public benefits such as SSI.  In order to receive SSI, a person with a disability must have assets under $2,000. The ABLE Act makes saving possible…up to a point.  Now the individual can remain on SSI and save a modest amount in an ABLE account (up to $14,000 per year). 

 Persons with disabilities who are employed may want to utilize an ABLE account to save a portion of their income while remaining qualified for SSI.  In addition, families may want to contribute to an ABLE account for their loved ones with disabilities in smaller increments.  These same families may also desire to use other tools available such as Special Needs Trusts, which may be more flexible. 

Monday, February 9, 2015

Special Needs Trusts and Pending Legislation

Understanding Special Needs Trusts

 A Special Needs Trust is a trust that is established for an individual with special needs who is or may become dependent on public benefits.  The trust is specifically identified to meet certain supplemental needs and to enhance the quality of life for the beneficiary, the special needs person.  Most importantly, the SNT is created so as to not disqualify the beneficiary for the public benefits being received.  The trust, then, is a pool of money available for the benefit of the beneficiary in order to provide him or her with goods or services that public benefits do not provide.  For example, SNT funds may be used for in-home care services that would otherwise not be affordable to the beneficiary.  Should a person with special needs receive these funds outright and outside a properly created SNT, the individual may become ineligible for the public benefits and reinstatement of the benefits can be a difficult process.

  There are two types of SNTs:  A third-party SNT and a first-party SNT.  A third-party SNT is one in which a loved one has assets that he or she would like to use to benefit the individual with special needs.  Whereas, a self-settled SNT is one in which the assets belongs to the individual with special needs. 

  A self-settled SNT is often used in the case of a litigation settlement.  One example involves an individual who was in a car accident and sued the “at fault” driver successfully.  By the time the lawsuit settlement was reached, the individual had been declared disabled.  Instead of the settlement funds being given outright to the person who is now disabled, the funds could be placed into a self-settled SNT for the benefit of that individual.  This allows the person with the disability to continue to receive benefits and have the settlement money available to him or her for supplemental purposes, increasing his or her quality of life.

 Self-settled SNTs have been recognized by federal law since 1993 under 42 USC §1396p(d)(4)(A).   A self-settled SNT contains a mandatory payback provision, meaning that upon the death of the beneficiary, the State will be paid back from the remaining trust assets up to the amount of public benefits expended on behalf of the beneficiary during his or her lifetime. 

  Within a self-settled trust an individual trustee or corporate trustee is appointed to manage the funds in the trust.   Choosing the correct trustee is an important decision as the trustee will be responsible for managing and investing trust assets, and is responsible for following the guidelines regarding proper distributions from the trust.  Failing to do so could result in a loss of benefits for the trust beneficiary. 

 Problem with the Current Law

 The law, as currently written, states that a first-party trust may only be established by the individual’s parent, grandparent or a court of competent jurisdiction.  It appears that the option for a competent individual to establish his or her own trust under 42 USC § 1396p (d)(4)(A) was a simple mistake by the writers of the law.  However, this minor mistake causes major financial losses to disabled individuals.  It requires those disabled individuals who have no parent or grandparent alive to establish the trust, to expend money on an attorney and court costs in order to ask for a court order establishing the trust.  The money to accomplish this is often such an impediment for these individuals, that they do not pursue it and end up either kicked off the public benefits or forgoing the supplemental monies they would otherwise have access to.

 Pending Legislation

Currently there are two identical bills sitting in the House of Representatives and in the Senate which would create the option for competent individual who is disabled to establish his or her own trust under 42 USC § 1396p(d)(4)(A).  In May 2013, H.R. 2123 was introduced in the House and the next day it was referred to the House subcommittee on Health, where is currently sits.  A few months later in November 2013, S. 1672 was introduced in the Senate, was read twice and referred to the Committee on Finance.  The title of the identical bills is the “Special Needs Trust Fairness Act of 2013” and is described as “a bill to amend title XIX of the Social Security Act to empower individuals with disabilities to establish their own supplemental needs trusts.” 

  As advocates for individuals with special needs, it is important that we support this bill so that our clients have more choices for themselves with regards to establishing special needs trusts.  If you feel so inclined, please contact your Congressional representative and ask for the passage of these bills.  Encouragement from us of the importance of this bill to our clients is imperative to get the bill recognized and enacted.  Otherwise, it may get lost in the shuffle and our clients’ needs may not be adequately addressed.

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