Welcome to My Blog

Attorney Michael MillonigHi,

I’m Michael Millonig, and you’ve managed to find your way to my blog.

As an attorney who specializes in elder law, I know that there are a lot of elder care issues facing adults with elderly parents that don’t necessarily either require, or get covered by, a lawyer. There are also many changes in elder law, especially Ohio’s Medicaid program, that happen quickly which make it difficult for me to keep you up to date with my email newsletter or seminars. That’s why I’ve started this blog.

Over time, I have no doubt that the topics will evolve, and that we’ll meander a little bit. Occasionally, I’m sure there will be some difficult discussions; but I hope that equally there will be some light-hearted ones. And regardless of the nature or tone of the topics, I’m looking for input from you, my dear readers. So, if there’s something you have a question about, something you’d like to know more about, or simply something you’d like to share, please don’t hesitate to reach out and let me know.

In the meantime, I’m going to get rolling and start writing about things like caring for aging parents, role reversal, supporting siblings with elderly parents, Ohio’s Medicaid program, revocable living trusts, powers of attorney, retirement communities, home-care, elder care and any other topic I can think of that might be useful to you.

Hopefully you enjoy what you find here, learn some things, and join the conversation.

Once again, welcome to my blog.

Michael  J.  Millonig
Certified as an Elder Law Attorney
by the National Elder Law Foundation since 1998
OSBA Board Certified Estate Planning
Trust and Probate Specialist
937-438-3977

Any legal information communicated in this blog is a general statement of the law.  It is not intended as legal advice and should not be relied upon to answer any specific questions concerning your own circumstances or for purposes of legal planning. These communications are not intended to create an attorney-client relationship. Please contact my office for an appointment if you have any legal questions.

Graham-Cassidy bill and Ohio Medicaid

The most recent version of the Republican bill to repeal Obamacare again proposes a block grant model for the State Medicaid programs. The federal funds given to the State Medicaid programs would be based on a per capita amount (i.e. per person). This would be an absolute limit that could not be exceeded. The method for determining this amount is somewhat complicated and I will not attempt to go over that here. However, as I have stated before, the effect on the Ohio Medicaid program would generally be to limit eligibility. An absolute funding ceiling puts pressure on the Ohio Department of Medicaid to find some way to restrict eligibility. Based on my experience, I am sure they will find a way.

One positive change in the Graham-Cassidy bill is that new exceptions are added for the new prohibition of not allowing three months prior retroactivity for Medicaid applications. Presently, an applicant may qualify for eligibility for the three months prior to the month of filing of the application. However, the applicant must have met all eligibility criteria for those prior three months. So they are not getting additional eligibility or anything that they are not entitled to. This just gives applicants some extra time to get the forms filled out and filed. Now they will have to rush to get the application filed or miss out on a month or more of eligibility even though they would have met the eligibility criteria. The new exceptions allow the three month retroactivity for: a) applicants age 65 or older; b) applicants who are blind or disabled. All others will need to rush to get their applications filed by the end of the month.

Elder Care Choices

The October issue of Consumer Reports has its cover story entitled “Who Will Care for You?” The article focuses on elder care decisions at the assisted-living level. See https://www.consumerreports.org/cro/index.htm

It is generally an instructive and helpful article. I am going to add my own comments and information to go along with this article.

The first obvious answer to the question posed by the article is missed by Consumer Reports. Many people would answer this question by saying that a family member will take care of them. That is not necessarily the best option but is often the plan for many people. More importantly, it is an important issue to be addressed in this context. It is very difficult to care for a family member 24/7 year after year. This may work out for some period of time if the person’s needs are not that demanding. However, at some point in time it simply becomes too much and a person does need to move to a nursing facility. I never discourage any of my clients to at least not try to care for a family member at home but the practical realities and the difficulty of doing so need to be addressed.

The article very accurately points out that the dividing line between an assisted living facility and a skilled nursing facility is not clear. This is true as a matter of the legal definitions and in practice. The first step in determining what type of care a person needs is to obtain a level of care assessment. This is usually done by a social worker, nurse or other personnel from a nursing facility. Is not usually done by doctor although it certainly could be.

As the article points out, some persons are in an assisted living facility longer than they should be. Conversely, some persons are told to leave and go to a skilled nursing facility when they really are not ready for that level of care yet. In these situations is very important for the resident to have a family member or other person monitoring their care and making sure they are not involuntarily transferred out of the assisted-living facility.

The article refers to use of an aging life care expert. This is the new terminology for what used to be referred to as a geriatric care manager. This person is usually a social worker or nurse by training. They can provide invaluable advice and advocacy for families and residents of nursing facilities. Our office had a geriatric care manager for over eight years. Our experience was that not too many clients saw the need for this service. Many people naively assume that the nursing home will take care of their loved one and that you should not need any additional help. In an ideal world this would be true. However, nursing facilities just do not have sufficient staff to be on top of every possible need or request of every resident. A geriatric care manager can make up for this shortfall and also provide valuable advice and training for the family members in dealing with the nursing facility. Our clients we helped with their loved ones greatly appreciated our assistance and expertise. However, most people just didn’t seem to see the need for this service which is why I no longer offer it. You can find an aging life care expert in your area at https://www.aginglifecare.org/ I also refer my clients to a local aging care life expert. http://www.1specialcare.com/

The article also wisely points out the empty promise made by many marketing representatives that “We will take care of your mother for the rest of her life.” “We will never kick her out.” This is pure sales talk and is probably not supported by any of the legal clauses in the resident’s contract. The resident will be kicked out if they run out of money and don’t pay their bill. The resident will also be kicked out if their medical condition worsens such that the facility is not capable of taking care of them. The marketing person perhaps doesn’t fully understand this or chooses to ignore that reality. Promises are also often made that there is some type of fund that can be used for residents who run out of money. Do not believe this. What this really means is that if the person runs out of money they will be able to apply for Medicaid which will pay the nursing home bill.

The article also gives good advice by saying you should never agree to a mandatory arbitration clause. However, simply crossing off a clause on the standard form may not be sufficient. Most nursing facilities will not allow you to do so but is worth a try.

I think the underlying theme and general point of the article is that you should get professional advice and as much reliable information as possible before making these elder care choices.

 

Avoiding Probate without using a Trust; Joint, POD & TOD Accounts

An estate plan can be set up to avoid probate without use of a Revocable Living Trust. For persons with a small estate consisting of only a few assets, a trust is often not economical.

You can plan your estate by using joint and survivorship (JTWRS), POD (pay on death) and TOD (transfer on death) accounts which pass to the named survivor or beneficiary outside of probate. However, there are some drawbacks to this type of estate plan. The more accounts and assets you have, the more difficult it is to plan your whole estate in this way. If you change your intentions, you will have to rearrange all your accounts. This may involve trips to the bank, filling-out forms, correspondence with financial institutions and much other paperwork. Unequal changes in value can leave some heirs getting more than others, contrary to your intentions. For example, if you give Microsoft stock to one child and Ford stock to another, the stock values may change dramatically before you pass away leaving one child with a larger inheritance. Also, there have been many cases where a son or daughter has withdrawn funds in a joint account while their parent was still living. If the other person on the JTWRS account owes money to someone or is sued for a debt, this creditor can attach your funds in the joint account. These joint and POD accounts only avoid probate and do not avoid estate tax. If an estate plan utilizing joint and survivorship accounts is the chosen plan, then this planning should be done with the advice and assistance of legal counsel to assure that all accounts are properly set up to avoid Probate. My experience has been that very few people who try to set up their estate to avoid probate in this manner do so successfully. They almost always forget to set up some accounts correctly and, after they pass away, the family needs to open probate for just one or two accounts.

A Revocable Living Trust plan offers the following advantages over use of JTWRS and POD accounts: a) all assets are held under one “umbrella” which simplifies management of the assets; b) if a change in the estate distribution is desired, the grantor only needs to amend the Trust instead of re-arranging some or all of the asset beneficiary designations; c) no risk of changes in account values or balances altering the desired equal (or other proportionate) distribution to the intended heirs; d) the Trust can include a “spendthrift clause” which will protect the estate share of any beneficiary who is sued, gets divorced, files bankruptcy or has any creditor claims against their share of the Trust. A Revocable Living Trust is usually the better estate planning technique for avoiding probate for most people.

Revocable Living Trusts to Avoid Probate

Setting up a revocable living trust for the purpose of avoiding probate has become a popular estate plan in recent decades. The consumer movement to avoid probate began in the 1960’s with a book by Norman Dacey and has not abated since that time. Many clients prefer to set up a revocable living trust to make estate settlement easier for their beneficiaries.

Unfortunately, there are many misunderstandings and half-truths about avoiding probate. There are some advantages but some asserted advantages are misleading or not correct. There are also some disadvantages to avoiding probate. Any estate lawyer will tell you that there is much more litigation with estates now due to the lack of oversight with trusts and other property that is not subject to the probate court’s supervision. You will hear differing opinions on use of a living trust to avoid probate. Some persons advocate for them stating everyone should have one. Others believe there is no need to avoid probate. In reality, the truth is somewhere in the middle. The explanation below sets forth the advantages and disadvantages of using a living trust to avoid probate.

I. ADVANTAGES

1) Attorneys fees for setting up a trust will generally be lower than fees for probate.

2) The privacy of your estate will be preserved by using a living trust. The probate inventory is a public record open to inspection by anyone.

3) Avoiding the delay of probate and immediate distribution of the estate are commonly expressed advantages. However, the trustee cannot distribute the whole estate to the heirs until estate taxes and all other debts are paid. If the trustee does so, he/she will be personally liable to pay these debts out of their own funds. However, the lack of time constraints and probate requirements will certainly be avoided and the trustee in most cases will be able to complete the administration much sooner and with less work.

4) The cost of an executor’s fee may be avoided if an executor would have been appointed who would have charged a fee. In most situations, an heir or family member can be appointed executor on the condition that he/she serves without compensation.

5) A guardianship proceeding in Probate Court may also be avoided. However, an inexpensive power of attorney may also accomplish this same objective.

6) Avoidance of estate taxes is often implied as an advantage of a living trust. Although a living trust can be part of an estate plan that eliminates estate tax, this can also be accomplished with a will. Therefore, estate tax savings is clearly not an advantage of a living trust.

II. DISADVANTAGES

1) There will be present costs to create the trust and transfer costs for putting the assets into the trust.

2) There may be additional complications and requirements associated with everyday transactions once you have transferred title to all your assets into the trust. Banks, stock brokerage companies etc… may require various forms to be filled out, a copy of the trust and other assurances that the trustee is authorized to take certain actions. However, living trusts have become more commonplace in recent years and most companies can now handle trusts without too much complication.

3) Upon death, the transfer to the heirs is not automatic. Various legal documents will be needed to fulfill legal requirements. Appraisals are needed for income tax purposes for certain assets. Although the administrative burden is less than probate, it is certainly not absent.

4) The trustee is not accountable to a court and the supervision of the Probate Court is not available. Some of the functions of probate are for the executor to report to the court all receipts and disbursements, an accurate appraisal of assets, payments of bills and distribution to the heirs. If the executor misapplied some money or did not distribute according to the will, the court would probably be aware of this and take action against the executor. A trustee of a living trust is typically not accountable in this fashion and the heirs may have no way of knowing if estate funds were misappropriated. Of course the trust beneficiaries have a right to sue, but this will be more costly and involved as opposed to filing an appropriate motion in Probate Court.

Each person must weigh the above factors, consider your circumstances and desires, and make an informed decision.

Using a Prepaid Funeral Contract to Spend Down Assets for Medicaid

No one wants to think about his or her death, but a little preparation in the form of a prepaid funeral contract can be useful. In addition to helping your family after your death, a prepaid funeral contract can be a good way to spend down assets in order to qualify for Medicaid.

A prepaid or pre-need funeral contract allows you to purchase funeral goods and services before you die. The contract can be entered into with a funeral home or cemetery. Prepaid funeral contracts can include payments for: embalming and restoration, room for the funeral service, casket, vault or grave liner, cremation, transportation, permits, headstones, death certificates, and obituaries, among other things.

One benefit of a prepaid funeral contract is that you are paying now for a service that may increase in price—possibly saving your family money. You are also saving your family from having to make arrangements after you die, which can be difficult and time-consuming. And, if you are planning on applying for Medicaid, a prepaid funeral contract can be a way to spend down your assets.

Medicaid applicants must spend down their available assets until they reach the qualifying level ($2,000 in Ohio). By purchasing a prepaid funeral contract, you can turn available assets into an exempt asset that won’t affect your eligibility. In order for a prepaid funeral contract to be exempt from Medicaid asset rules, the contract must be irrevocable. That means you can’t change it or cancel it once it is signed.

Before purchasing a contract, you should shop around and compare prices to make sure it is the right contract for you. Buyers need to be careful that they are buying from a reputable company and need to ask for a price list to make sure they are not overpaying.

For information on planning a funeral, see my checklist on my website http://www.michaelmillonig.com/practice-areas/funerals-burial/

SEMINAR: MEDICAID ELIGIBILITY FOR NURSING HOME RESIDENTS: UPDATE ON 2016 CONVERSION & MILLER TRUSTS

Last August 1, 2016, The Ohio Medicaid program had major changes to all eligibility rules. We have had one year of experience with these changes. This presentation will review all the new rules, problems that have arisen and experience our office has had with their interpretation and implementation. There will also be a complete review of all topics listed below as well as other new developments this last year.

Wednesday, August 30, 2017 @ 8:45 AM – 12:00 PM

This seminar will focus on Medicaid eligibility from the point of view of the nursing facility. It will not focus on planning techniques to preserve assets and achieve Medicaid eligibility. The objective is to provide information, tips and relate the experience of Michael J. Millonig to assist nursing homes in avoiding problems with Medicaid applications.

Medicaid Eligibility For Nursing Home Residents

▸ Review of all new changes resulting from Ohio’s conversion to an SSI/1634 State
▸ Review all new resource eligibility rules
▸ Miller Trusts (aka Qualified Income Trusts)
▸ Retroactivity problems related to Miller Trusts
▸ Possible loss of eligibility for Medicaid recipients in Medicaid spend down group
▸ Miller Trusts for AL Waiver residents
▸ Changes to rules with Revocable Living Trusts
▸ Review of basic Medicaid Eligibility rules for nursing home vendor payments
▸ Common Problems causing ineligibility & how to avoid them
▸ Medicaid Transfer rule
▸ Explaining the Transfer rule to residents to avoid creating problems
▸ Undue hardship rule & provision for nursing homes to apply for resident
▸ Rule governing nursing home contract entrance fees
▸ Other important Medicaid rules: annuities, home equity, life estates
▸ Community Spouse Resource Allowance provisions and spend down rules
▸ Assisted Living rules for Medicaid
▸ Problems with income eligibility for AL Waiver residents; and solutions
▸ Retroactive eligibility
▸ Practical tips on processing applications and dealing with caseworkers
▸ Avoiding problems in the spend down process

This seminar has been approved for CE credit by:
1) the State of Ohio Counselor and Social Worker Board.
2) the Ohio Board of Nursing also recognizes Social Worker CEU’s if relevant to area of practice

Reservations must be made in advance with payment. Please contact Julie for more information: jacmmlaw@swohio.twcbc.com

Medicaid & Life Estates under Ohio Medicaid

The phrase “life estate” often comes up in discussions of estate and Medicaid planning, but what exactly does it mean? A life estate is a form of joint ownership that allows one person to remain in a house until his or her death, when it passes to the other owner. Life estates can be used to avoid probate and to give a house to children without giving up the ability to live in it. They are sometimes suggested for use in Medicaid planning.

In a life estate, two or more people each have an ownership interest in a property, but for different periods of time. The person holding the life estate — the life tenant — possesses the property during his or her life. The other owner — the remainderman — has a current ownership interest but cannot take possession until the death of the life estate holder. The life tenant has full control of the property during his/her lifetime and has the legal responsibility to maintain the property as well as the right to use it, rent it out, and make improvements to it.

The life tenant cannot sell or mortgage the property without the agreement of the remaindermen. If the property is sold, the proceeds are divided up between the life tenant and the remaindermen. The percentage shares are determined based on the life tenant’s age at the time using life expectancy tables that assign a percentage to the life estate depending on the age.

Be aware that transferring your property and retaining a life estate can trigger a Medicaid ineligibility period if you apply for Medicaid within five years of the transfer. The remainder portion is considered to have been transferred to the remainder persons on the deed. Many years ago, it was argued that the life estate had no market value and, thus, it was not countable as a resource. This argument has failed in Ohio. Thus, creating a life estate actually presents a problem when the person has applied for Medicaid thinking they are eligible because they have spent down to less than $2000. The life estate will have a value that is probably more than $2000. In short, use of a life estate deed is not a good planning option in Ohio for purposes of Medicaid eligibility.

When the life tenant dies, the house will not go through probate, since at the life tenant’s death the ownership will pass automatically to the holders of the remainder interest. However, in Ohio a life estate is included in the definition of the estate which is subject to Medicaid estate recovery. There have been a few cases in Ohio ruling on this issue of a life estate and estate recovery. One case held a life estate was subject to estate recovery and the other that it was not. However, the portion of the property that is subject to estate recovery is only the life estate portion. Thus, the full value of the property is not exposed to recovery.

In summary, life estate deeds are not good planning tools in Ohio for purposes of Medicaid eligibility or estate recovery.

Ohio Governor Kasich Veto of Ohio Medicaid Expansion Freeze

The Ohio General Assembly inserted into the state budget bill a provision that would stop new enrollment for the Medicaid expansion group beginning July 1, 2018. Governor Kasich vetoed this provision on June 30. Presently, the General Assembly is attempting to get together enough votes to override this veto. There has been some confusion and concern among my clients whether, if this does pass overriding the veto, it would affect their existing or expected eligibility for Medicaid payments of nursing home costs. It would not. The Medicaid expansion group is a totally different eligibility group. This group of eligible persons was added as part of Obamacare and grants eligibility for persons meeting certain qualifications and who do not qualify under any other group. If the applicant is under age 65 and not on Medicare, he/she may be eligible for this expansion group which is also known as MAGI group eligibility. A single individual is eligible if their income is less than 138% of the Federal Poverty Level (FPL). Again, even if this Medicaid expansion group is eliminated or restricted, this will have no effect on Medicaid eligibility for persons in nursing homes who are or may be eligible for Medicaid payment of their nursing home bill.

How Medicare and Employer Coverage Coordinate

Medicare benefits start at age 65, but many people continue working past that age, either by choice or need. It is important to understand how Medicare and employer coverage work together.

Depending on your circumstances, Medicare is either the primary or secondary insurer. The primary insurer pays any medical bills first up to the limits of its coverage. The secondary payer covers costs the primary insurer doesn’t cover (although it may not cover all costs). Knowing whether Medicare is primary or secondary to your current coverage is crucial because it determines whether you need to sign up for Medicare Part B when you first become eligible. If Medicare is the primary insurer and you fail to sign up for Part B, your eventual Medicare Part B premium could start going up 10 percent for each 12-month period that you could have had Medicare Part B, but did not take it.

Here are the rules governing whether Medicare coverage will be primary or secondary:

▸ If your employer or your spouse’s employer has 20 or more employees, your employer’s insurance will be the primary insurer and Medicare is the secondary payer. If your employer or your spouse’s employer has fewer than 20 employees, Medicare will be the primary insurer and your employer’s insurance will be the secondary insurer.
▸ If you are retired and still covered by your employer’s group health insurance plan, Medicare pays first and your former employer’s plan pays second.
▸ If you receive both Social Security Disability Insurance and Medicare and your employer has 100 or more employees, your employer’s insurance pays first. Some employers are part of a multi-employer plan and if at least one employer in that plan has 20 employees or more, the employer’s insurance pays first. If your employer has fewer than 100 employees, Medicare will pay first.
▸ If you have end stage renal disease (ESRD) and are in the first 30 months of Medicare coverage of ESRD, your employer’s plan pays first. After the first 30 months, Medicare becomes the primary insurer. It does not matter how many employees your employer has.
▸ If you are self-employed and have a group health plan that covers yourself and at least one other person, Medicare pays first. Note that if you are self-employed, you may be able to deduct Medicare premiums from your income taxes by including the premiums in the self-employed health insurance deduction.

If your employer’s insurance is the primary insurer, the employer must offer you and your spouse the same coverage that it offers to younger employees. It also cannot deny you coverage, cancel your coverage once you become eligible for Medicare, or charge you more for premiums, deductibles, and copays.

Ohio Medicaid Residence Exemption for Single Persons

The Ohio Medicaid rule governing the exemption of a residence for a single person changed as of last August 2016. A single person who enters a nursing home must spend down to less than $2000 in order to be eligible for Medicaid payment of the nursing home costs. Their residence remains an exempt resource as long as they have an “intent to return home.”  In our office we have successfully retained this exemption by submitting an Intent to Return Home Affidavit.

Although this may seem very favorable by retaining the residence as an exempt resource, is really not that advantageous. If a person remains on Medicaid and passes away the home will be subject to estate recovery. Thus, the value of the home will be lost to pay back Medicaid. However, this exemption is important for persons who can spend down quickly before the home can be sold. It allows them to obtain Medicaid approval quickly without having the sale of the home delay eligibility. Once the home is sold they will need to spend down again before regaining Medicaid eligibility. As a practical matter, it is best just to sell the home as soon as possible and take advantage of spend down and other planning strategies to save some of the estate from nursing home costs.