Coronavirus Relief Funds Paid to Deceased Americans Must Be Returned

The federal coronavirus relief bill has sent direct emergency payments to some 150 million Americans in the wake of the pandemic. Among the recipients are possibly millions of deceased individuals, raising questions about what their survivors should do with the money. After weeks of silence, the IRS has finally confirmed that the money should be returned and explained how to do it.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law March 27, 2020, included one-time payments of up to $1,200 to millions of eligible individuals, based on their income. To determine who was eligible, the IRS looked at 2018 and 2019 tax returns, without first cross-checking with the Social Security Administration’s master file of U.S. deaths, which apparently would have taken weeks.

As a result, some individuals who passed away after filing 2018 or 2019 taxes have been receiving relief payments, causing confusion for their families. According to the Centers for Disease Control and Prevention, 2.8 million people died in 2018, which means the IRS potentially could have sent out millions of checks to deceased individuals. Although Treasury Secretary Steven Mnuchin said in an interview that the money had to be returned, the IRS was slow to explain how exactly to go about doing that. 

The IRS has now issued guidance, clarifying that the money must be returned. According to the agency, the full amount of the payment sent to a deceased individual should be returned unless there is a surviving spouse. In that case, only the deceased spouse’s portion should be returned. Checks should be voided and returned by mail to the IRS. If a family member cashed a check or the money was received via direct deposit, the recipient of the funds should send the funds back via a personal check or money order. 

Whether you have to return the money is another question. “There’s no legal interpretation,” Nina Olson, a former IRS official and current executive director of the Center for Taxpayer Rights, told The Wealth Advisor.  “I don’t know how they’re basing their decision” to request the money be returned.  Olson said it is “unlikely” the IRS would sue taxpayers for the erroneously awarded stimulus money.

For further instructions on how to return the payment, click here.  

Caring for Nursing Home Residents during Coronavirus

I have discussed before the problem of the isolation of nursing home residents in this time of coronavirus crisis. At this time, it looks like the visitation prohibition will last quite a while longer. The link below is a very nice article about caring for our elderly family and friends in nursing homes at this time.

Ohio Medicaid & CARES Act

The CARES Act enacted in response to the coronavirus crisis has a broad range of benefits and special provisions. I will only cover here the effect on Medicaid recipients continuing eligibility for Medicaid. The general rule in Ohio is that a Medicaid recipient cannot have any more than $2000 of resources. Thus, an unexpected receipt of money that puts you over that limit could potentially result in termination of Medicaid. The CARES Act provides for a one time economic impact payment of $1200 for most individuals. For more detailed information see

Fortunately, this will not cause termination of Medicaid. The $1200 payment is excluded as a countable resource for the 12 month period beginning with the month following receipt. You should keep this deposit in a separate account so that it is not commingled with other funds and continuing expenses paid out of the account. It is best to open a separate savings account for this deposit.

Coronavirus & Ohio nursing homes- part II

I have been very encouraged by all the stories I have heard about nursing home staff making extra efforts to keep their residents in touch with their family. From simple visits outside the window to Zoom and Facetime arrangements being made by staff, they are all doing an extraordinary job of taking care of their residents. I am sure they are acutely aware of the possibility of a coronavirus outbreak at their facility like the one in the Kirkland, Washington nursing home. I especially want to thank St. Leonard’s  for their efforts arranging communication for my mother-in-law with her family and Bethany Lutheran Village for their extraordinary efforts to arrange for the signing of important estate planning documents for one of my clients. It is a difficult balance to protect the elderly from infection and trying to get medical, nursing, legal and other important work done that cannot be delayed. We will all get through this if we can work together.

St. Leonard’s

Coronavirus and Nursing Home Residents in Ohio

On March 11, 2020, the President addressed the nation and declared a national emergency due to the threat of the coronavirus. He stated various precautionary measures that were to be taken concerning closing of facilities and other restrictions. I will not discuss all of those but rather focus on restrictions related to nursing homes. All of these restrictions being announced at the federal level are permitted under the National Emergencies Act and implemented through the authority of the federal agency, the Department of Health and Human Services- Center for Medicare & Medicaid Services (CMS).

All the information herein is based upon available government pronouncements as of March 18, 2020. This situation changes every day so please check the websites referenced herein for current information.

The first very relevant event is the coronavirus outbreak in January in a nursing home (Life Care Center) in Kirkland, Washington. The virus spread rapidly with at least 27 deaths of residents being linked to the coronavirus. See This event will be foremost in the minds of all nursing home administrators and staff. It is certainly known by the CDC and CMS and strongly influenced their guidelines.

Center for Disease Control

The Center for Disease Control has specific recommendations for nursing homes. Their recommendations concerning nursing homes and other long-term care facilities state that they are not mandatory requirements or standards. Their recommendations are as follows:
▸ restrict all visitation except for certain compassionate care situations, such as end-of-life situations.
▸ Restrict all volunteers and non-essential health care personnel (e.g. barbers).
▸ Cancel all group activities and communal dining.
▸ Implement active screening of residents and health care personnel for fever and respiratory symptoms.
▸ They state that ill visitors and health care personnel are the most likely sources of introduction of the coronavirus into the facility. They recommend aggressive visitor restrictions and enforcing sick leave policies for ill health care personnel even before the virus is identified in the community or facility.
▸ They also state that these recommendations could be applied in assisted living facilities.

They state that decisions about visitation during an end-of-life situation should be made on a case-by-case basis which should include careful screening of the visitor for fever or respiratory symptoms. Those with symptoms should not be permitted to enter the facility. Those visitors that are permitted must wear a face mask while in the building and restrict their visit to the resident’s room or other location designated by the facility.

Center for Medicare & Medicaid Services (CMS)

The CMS guidance states in part as follows:

▸ the nursing home should restrict visitation of all visitors and non-essential health care personnel except for certain compassionate care situations, such as end-of-life situations.
▸ They appear to allow each state to enact more restrictive provisions by stating: “If a state implements actions that exceed CMS requirements, such as a ban on all visitations through a governor’s executive order, a facility would not be out of compliance with CMS requirements.”
▸ It is further stated that residents still have a right to access the ombudsman’s program. This program provides for advocacy for a nursing home resident with any type of complaint or problem.

Prior to the issuance of this guidance, administrator, Seema Verma stated: “I’d like to pause to say a word about nursing homes, which have been top of mind for the task force from the beginning. ….. We fully appreciate that this measure represents a severe trial for residents of nursing homes and those who love them but we are doing what we must to protect our vulnerable elderly. Needless to say, the moment we believe these restrictions can be relaxed, we will do so.”

State of Ohio

The governor of Ohio has issued his own pronouncements concerning nursing homes. This is done through the Ohio Department of Health. The first order provided for restrictions similar to those stated by CMS above. However, the second order provided for a total ban on visitation to nursing home residents. This order filed on March 13 states in part:

▸ “No visitors of residents shall be admitted to any home, except for end-of-life situations.”
▸ The order also provides that a nursing home must allow residents to discharge from the nursing home at any time and, in accordance with applicable state and federal law, understanding that residents that then return to the nursing home while this order is in effect are subject to the directives concerning medical screening. In other words, nursing home residents are allowed to leave and return. However, they will be subject to healthcare screening upon return.

Nursing Home Reform Act (resident’s rights)

Nursing home residents are provided with a legal right to have visitors under the federal Nursing Home Reform Act. Ohio law also provides for a Bill of Rights for nursing home residents to receive visitors. The federal statute states that a nursing facility must permit immediate access to a resident, subject to the resident’s right to deny or withdraw consent at any time, by immediate family or other relatives of the resident. The statute does not state any exception for reasons of health or safety. However, the declaration of a national emergency invoking the National Emergencies Act, permits these rights to be restricted or waived during this emergency. Nursing facilities of course still have all their workers coming and going every day to the facility. Their support services are necessary for the residents. However, visitations by family and other loved ones are just as necessary for the emotional support of the resident.

There are very good reasons for trying to protect nursing home residents who are more vulnerable to this virus than are healthier persons. There have already been at least 27 deaths in a nursing home in Kirkland, Washington as a result of the coronavirus. Although family and friends want to visit their loved one, they certainly don’t want to be responsible for introducing the coronavirus that might start an outbreak in the nursing home. This will be difficult for many residents to be cutoff from their loved ones. Some with dementia may not understand what is happening. Hopefully, nursing homes will be flexible and creative and assist with alternative methods of contact such as phone calls, Skype or other type of face time technology or just a visit to the window. Most aged nursing home residents are not very competent with technology and will need to have the devices supplied to them with assistance. Nursing homes will have to have sufficient supplies of needed technology for Skype or face time. The window visit will not be possible for residents in upper level floors or an interior window with no outside access.

How long will this go on? How long will families patiently wait while they can’t visit their loved one? I suspect that nursing homes may make some exceptions beyond simply the end-of-life situations. The CDC and CMS recognize a broader “compassionate care” exception than the Ohio Governor who has enacted a total ban on visits except if the resident is dying. As this situation continues, I hope our Governor will realize that it is compassionate to allow limited visitation with medical screening so our loved ones are not deprived of the needed love and attention from their family and loved ones. We need to balance these reasonable restrictions to protect the residents with their need for contact with their family and loved ones. This balance will change on a day to day basis as the state of the coronavirus changes in the United States. I hope that the current national and Ohio ban will at an appropriate time be changed as circumstances become more favorable.

Protecting Your Estate from Nursing Home Costs:

Medicaid eligibility for nursing home costs, Trusts, risks of gifting to children and understanding Medicaid’s gift transfer rule. Presentation by Michael J. Millonig, Attorney At Law, Certified as an Elder Law Attorney by the National Elder Law Foundation, Ohio State Bar Association Board Certified Estate Planning, Trust and Probate Specialist. Time & Place: Miamisburg Community Center, 305 East Central Avenue, Miamisburg, OH on Wednesday, March 25, 2020 @ 10:00 AM to 11:30 PM. Please call for reservations 866-8999

Cryonics and Nature

I just saw an interesting episode of the BBC America show, Weird Wonders. Part of the show was about how the arctic ground squirrel managed to survive during the winter by having its blood frozen. It also explained that it did not form damaging ice crystals due to the blood containing no impurities. This was Weird Wonders, season one, episode three with the description: “A man gets drunk without drinking alcohol; molecular music.”

The field of Cryonics, advocated by Alcor and The Cryonics Institute, attempts to accomplish the same thing for human beings. Although this may seem like science fiction, it seems more possible when you consider this has been done by the arctic ground squirrel. For more information on the cryonics and the arctic ground squirrel see the following links:

For information on special trusts and other estate planning for cryonics patients, see /practice-areas/cryonics/

The Trump Administration Allows States to Choose Medicaid Block Grants

The Trump administration has unveiled a plan to allow states the option to cap Medicaid spending using block grants. While this change does not directly affect nursing home residents on Medicaid and is billed as a way to improve state flexibility in running Medicaid programs, it could result in significant service cuts. 

Medicaid is a joint federal-state program that functions as an open-ended entitlement program, meaning it does not include any pre-set funding limits. Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive federal money, which pays for about half the state's Medicaid costs. The state picks up the rest of the tab.

Announced on January 30, 2020, the Centers for Medicare and Medicaid Services (CMS) plan, dubbed “Healthy Adult Opportunity,” would allow states to apply for block grant funding instead of receiving unlimited matching funds. States that choose to enter such an arrangement would receive a pre-set amount of money in exchange for increased flexibility in how they administer their programs. 

The new funding option applies mainly to healthy adults under 65 who are covered under Medicaid expansion. People needing long-term care and individuals who are 65 and over would not be included in a potential state block-grant project along with children and individuals with disabilities. States also cannot block grant services that are required under the Medicaid statute, such as emergency and hospital services. 

While long-term care beneficiaries may not be directly affected by this new funding structure, there could be an increase in costs to other Medicaid beneficiaries. States that choose block grant funding can increase prescription drug costs or change which prescription drugs are covered. Medicaid traditionally covers all federal-approved drugs, but the new plan allows states to cover just one drug per class. States can also increase co-pays or cut non-emergency services. If enrollment in Medicaid dramatically increases due to a health crisis or a recession, states that received a pre-set amount of funding may not have enough money to cover everyone, resulting in additional cuts to services. 

Opponents of the block grant concept contend it is illegal because only Congress can make such program changes, and litigation against the proposal is almost certain. In addition, it is unlikely that a state could get a waiver before 2021, when there may be a new federal administration.

For more information about the new plan, click here and here.

How Secure Is Social Security?

For years people have been worried about Social Security’s future, but what is the actual outlook? According to the federal government, unless Congress acts to intervene, Social Security shortfalls are expected beginning in 2035.   

Social Security retirement benefits are financed primarily through dedicated payroll taxes paid by workers and their employers, with employees and employers splitting the tax equally. Employers pay 6.2 percent of an employee's income into the Social Security system, and the employee kicks in the same. Self-employed individuals pay the entire 12.4 percent Social Security payroll tax. This money is put into a trust fund that is used to pay retiree benefits. 

The trustees of the Social Security trust fund have reported that if Congress doesn’t take action, the fund’s balance will reach zero in 2035. This is because more people are retiring than are working, so the program is paying out more in benefits than it is taking in. Additionally, seniors are living longer, so they receive benefits for a longer period of time. 

Once the fund runs out of money, it does not mean that benefits stop altogether. Instead, retirees’ benefits would be cut. According to the trustees’ projections, the fund’s income would be sufficient to pay retirees 77 percent of their total benefit. 

Congress can act to shore up Social Security before this happens. Some ideas include eliminating the cap on benefits. Right now, workers only pay Social Security tax on the first $137,700 of income (in 2020). That amount can be increased, so that higher-earning workers pay more in taxes. The Social Security tax or the retirement age could also be increased.

Social Security is immensely popular and lawmakers are unlikely to allow steep benefit cuts to take place. The last time the program was in financial trouble and received a major overhaul was in 1983, when President Ronald Reagan and congressional Democrats struck a deal to increase taxes and gradually raise the retirement age from 65 to 67.

For more information about a the potential Social Security shortfall, click here and here

Feds Release 2020 Guidelines Used to Protect the Spouses of Medicaid Applicants

The Centers for Medicare & Medicaid Services (CMS) has released the 2020 federal guidelines for how much money the spouses of institutionalized Medicaid recipients may keep, as well as related Medicaid figures.

In 2020, the spouse of a Medicaid recipient living in a nursing home (called the “community spouse”) may keep as much as $128,640 without jeopardizing the Medicaid eligibility of the spouse who is receiving long-term care. Known as the community spouse resource allowance or CSRA, this is the most that a state may allow a community spouse to retain without a hearing or a court order. While some states set a lower maximum, the least that a state may allow a community spouse to retain in 2020 will be $25,728.

Meanwhile, the maximum monthly maintenance needs allowance (MMMNA) for 2020 will be $3,216. This is the most in monthly income that a community spouse is allowed to have if her own income is not enough to live on and she must take some or all of the institutionalized spouse’s income. The minimum monthly maintenance needs allowance for the lower 48 states remains $2,113.75 ($2,641.25 for Alaska and $2,432.50 for Hawaii) until July 1, 2020.

In determining how much income a particular community spouse is allowed to retain, states must abide by this upper and lower range. Bear in mind that these figures apply only if the community spouse needs to take income from the institutionalized spouse. According to Medicaid law, the community spouse may keep all her own income, even if it exceeds the maximum monthly maintenance needs allowance.

The new spousal impoverishment numbers (except for the minimum monthly maintenance needs allowance) take effect on January 1, 2020.

For a more complete explanation of the community spouse resource allowance and the monthly maintenance needs allowance, click here.

Home Equity Limits:

In 2020, a Medicaid applicant’s principal residence will not be counted as an asset by Medicaid if the applicant’s equity interest in the home is less than $595,000, with the states having the option of raising this limit to $893,000.

For more on Medicaid’s home equity limit, click here.