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Coastal Senior is a monthly periodical covering the South Carolina and Georgia low country.  Bob Mason is its legal columnist.

“Will the nursing home take my home?” is the question elder law attorneys constantly field.

The answer: “Maybe, maybe not, but probably not right away.”

What these people are worried about is something called “estate recovery”. In Georgia it is taking on some life and promises litigation. The current Big Question is whether the state can recover on a Medicaid lien on a life estate or other “nonprobate” property.

Estate recovery is a procedure Congress ordered in which Medicaid attempts to recover all or a portion of the benefits paid with respect to an individual from that individual’s assets upon his or her death.

Congress Offered Some Choices

Congress allowed states the option of recovering against probate assets only or against all assets. Probate assets are those assets that pass through a person’s estate and under the terms of a will (if there is one). Nonprobate assets are assets that pass pursuant to terms independent of an estate (for example, life insurance policies that name beneficiaries other than estate, joint tenancy with rights of survivorship bank accounts, or life estates in real property).

What The General Assembly Chose

The General Assembly enacted a statute to allow the Department of Community Health (DCH) to “make claim against the estate of a Medicaid recipient”.

Most elder law attorneys believe the General Assembly opted to confine estate recovery to the probate estate. First, from the clear words of the statute, it chose not to expand the definition of “estate” beyond the traditional probate estate. The way one “makes a claim against an estate” is before a probate court, and a probate court will only have jurisdiction against a probate estate.

Second, the General Assembly did nothing to address the technical manner in which non-probate assets could become part of a probate estate. For example, to make what is left of a life estate after the life estate holder has died a probate asset would require a number of amendments to ancient Georgia real property law. Under Georgia law, once a life estate holder has died, the property is free of the deceased life estate holder’s creditor claims. It is gone.

What DCH Chose

DCH elected to use the harsher method and to attempt estate recovery against all assets – ignoring (many believe) the wishes of the General Assembly.

However, Congress gave the states a choice. The General Assembly spoke. The law is well settled in Georgia that administrative agencies (like DCH) must remain within the boundaries set by their master (the General Assembly).

The law also provides exceptions to estate recovery when hardship can be proven. For example, if the deceased is survived by a spouse or a minor or disabled child.

Advance planning is wise if nursing home financing is of any concern. Avoiding or mitigating the effects of estate recovery makes advance planning particularly critical.

Finally, you should always seek assistance from qualified counsel if facing estate recovery. Estate recovery is tricky business. Make sure your attorney understands it or associates someone who does.

Filed Under: Coastal Senior, Medicaid Tagged With: , ,

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Coastal Senior is a monthly periodical covering the South Carolina and Georgia low country.  Bob Mason is its legal columnist.


Many people make big mistakes titling bank and investment accounts. Often advisors and bankers are the source of the advice to “put your child’s name on the account”. However, the results of jointly holding an account with another can be surprising and unpleasant.

The advice has likely been given with the best of intentions – which does not make it correct. The reason is usually convenience. An older person may feel better knowing that a trusted son or daughter has immediate access to an account “in case something happens”.

A better way to provide emergency access to financial holdings for a trusted person exists. Read on. First, here is why a “joint account” may not be the proper approach:

  • Mom has likely made daughter a co-owner of the account. Daughter now owns the account as much as Mom. Could be bad. What if daughter is sued? What if daughter gets into a messy divorce? Or the IRS takes a keen interest in her affairs?
  • If Mom dies Sis’s two brothers may be out of luck. Happens all the time. Mom wanted the kids to share equally, but Sis suddenly recalls Mom wanted her to have the accounts since she “was the one who always helped Mom”. Since Sis was a co-owner and likely had “survivorship” rights, she owns the account now – and there is nothing an attorney can do about it.
  • Yech.

What is the best approach? A properly drafted power of attorney.

A “power of attorney” has nothing to do with appointing lawyers. The word “attorney” has its roots in an old French Norman word for “legal substitute”. A “power of attorney” is simply a document signed by someone called the “principal” (that is, YOU) appointing an “attorney-in-fact” or “agent” to manage some or all of the principal’s financial and business affairs.

The terms of the power of attorney control what the agent may, or may not, do. If the document covers a broad spectrum of duties, then it is a “general” power of attorney. An Agent can be given very broad powers, and if that makes the Principal nervous the instrument can require the Agent to secure some other person’s permission.

It used to be that a power of attorney would lapse when the Principal became incapacitated. That did not do any good if what was intended was to cover the situations when the principal did become incapacitated. The law stepped in and provided that a power of attorney could be “durable” (or be valid after the incapacity of the principal). Most powers of attorney now are “durable”.

Here’s the point: Don’t put the kids on the accounts as a joint owner. Instead, execute a power of attorney that grants the sorts of powers to the kids you are comfortable with to take over business affairs when, and if, they need to. In the meantime, keep the accounts in your name.

Downside: Some fees to a lawyer. Upside: Avoid a train wreck.

Filed Under: Coastal Senior, Miscellaneous Tagged With: , ,

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Coastal Senior is a monthly periodical covering the South Carolina and Georgia low country.  Bob Mason is its legal columnist.

[Note:  The Georgia annuity rules described below are very similar to the North Carolina annuity rules – see discussion of annuities at Basic North Carolina Medicaid Nursing Home Rules]

The Georgia Department of Community Health recently changed Medicaid annuity rules to allow the use of some (not all!) annuities by someone entering a nursing home.

The Basic weight loss med Concept

First, understand the basic concept of an annuity. Someone pays money to a company. The company promises to pay the money back either in a lump sum in the future, or over time in regular installments. The payments could begin immediately (an “immediate annuity”) or start in the future (a “deferred annuity”).

The payments from the company will include a return of what was paid, plus some interest. Meanwhile, the company is taking the money and (it hopes) making more with it than it will have to pay back to the buyer.

There are many and complex reasons that such an arrangement might make sense with respect to a realistic portion of one’s nest egg (remember the old adage “don’t put all your eggs in one basket”).

The New Rules

If an annuity fits the new requirements, it will not count as an asset for Medicaid purposes (although the income will count). To be “noncountable” the annuity must be nonassignable, irrevocable, and have a steady stream of payments that will not extend beyond the life expectancy of the annuitant (the person receiving the payments).

Further, the annuity must name the State of Georgia as the remainder beneficiary to the extent the state has paid out Medicaid benefits. A spouse and a disabled child may take first place ahead of the state.

So?

Many seniors have a modest nest egg meant to sustain retirement. The problem is the egg may be too big for Medicaid. Most people entering their senior years understandably panic when a spouse goes into a nursing home to the tune of $5,500 or so a month.

A “new” annuity can take “excess” cash (which was an excess asset for Medicaid purposes) and put it into an annuity (the shorter time frame the better) to immediately begin paying the stay-at-home spouse income.

Voila! The excess asset (cash) is converted into income that is not counted for Medicaid purposes (the state would count the income of the spouse in the nursing home only).

On The Other Hand . . .

Any person who thinks he or she (or his or her spouse) might end up in a nursing home within several years and have a tough time paying for it better be very careful before buying an annuity.

Buy an annuity that is not designed correctly and Mom and Dad could have an expensive mess. If the annuity has substantial surrender charges the unfortunate buyer has a choice: Hang on to the annuity and never qualify for Medicaid or dump the annuity and take a bath.

Buy an annuity that is designed correctly and it could be part of a well-conceived plan.

There are plenty of great financial advisors out there who either know these rules or at least understand that this is an issue and will seek additional help.

Filed Under: Coastal Senior, Medicaid Tagged With: , , ,

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Coastal Senior is a monthly periodical covering the South Carolina and Georgia low country.  Bob Mason is its legal columnist.

An old rule says “Never say never”. Let’s break that rule. The parents of a disabled child should never disinherit that child simply because she is disabled. Never.

There is a better way.

Parents of a disabled child want to ensure that the child will receive adequate financial protection while at the same time providing equitably for other family members. Maybe a parent is worrying about her own nursing home care but wants to insure her assets can be used for her disabled child.

An inheritance left directly to a disabled child will soon be gone.

Sadly, many parents (with inadequate or no advice) simply leave everything to the “non-disabled” children with the hope those children will “look after” their disabled sibling. Not good. Unfortunately, greed, divorce, lawsuits or carelessness can throw this plan awry.

A “special needs trust” might be a great alternative. The trust holds the assets for “supplemental needs” only, and should not affect the disabled individual’s eligibility for entitlement benefits or be accessible to the individual’s creditors, including the government.

The idea is to supplement, not reduce or replace, entitlement benefits that may be available to the disabled individual. If no benefits are available, the trust assets stand ready to help. If the available benefits do not provide adequately for the beneficiary’s needs, the trust assets will fill in that gap.

Even if the available benefits adequately cover material needs, the trust assets may be used to enrich the beneficiary’s quality of life without jeopardizing the much-needed benefits. Finally, to the extent that the assets are not used during the beneficiary’s lifetime, they may pass to other family members.

If the disabled child is receiving benefits such as Supplemental Security Income or Medicaid, the trust will need to be submitted for approval to ensure that the trust meets the many rules that apply. After all, the goal is to maintain benefit eligibility without having the trust assets “count”.

A parent may set up such a trust one of two ways. First, a trust may be established at anytime while the parent is alive. The drawback, of course, is that the parent may be tying up assets that he may want to keep available for his own support acomplia online in case he needs them. Also, the parent may not want to contend with submitting the trust for approval and may not want to deal with people like me (lawyers). For a parent about to go into a nursing home and on to Medicaid himself, however, such a trust can be a great planning technique.

Second, a parent can insert such a trust into the terms of his last will and testament. He can avoid the hassles listed above and let the executor, named trustee and his child’s guardian worry about the details later. These trusts can be tricky. Make sure you get expert help.

Drop in next month to read about a similar type of trust a disabled person can set up directly with her own funds.

Filed Under: Coastal Senior, Special Needs Planning Tagged With:

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Coastal Senior is a monthly periodical covering the South Carolina and Georgia low country.  Bob Mason is its legal columnist.

Here is yet another use for duct tape: Keeping an older resident from becoming such a bother. That is actually what an area nursing home did several years ago to keep a demented and unruly resident from getting underfoot. There was more we won’t get into here.

At the time, the only recourse was a misdemeanor charge. The investigation was not handled well by un-trained investigators. The only solid witness died. All the bad guys “walked”.

Chatham County senior advocates sprang to action. Adult Protective Services, the Long Term Care Ombudsman, Senior Citizens, Inc. (and perhaps others) went to then-District Attorney Spencer Lawton. He was appalled.

Soon the Chatham County Commission got on board and funded a dedicated position at the Chatham County DA’s office to investigate and prosecute elder abuse cases. Lawton assigned Assistant District Attorney Meg Heap to the position. After a period of re-tooling at the National College of District Attorneys, she went into action.

I have had an opportunity to work with Heap, and I am impressed with the operation. I practice in another state and have had to beg prosecutors busy with “Big Crimes” to glance at elder abuse cases.

I was surprised when the Savannah-Chatham police began investigating the caregiver of a client of mine who . . . well . . . began to care a bit too deeply about my client’s finances. My surprise gave way to utter amazement when I received a telephone call from Meg Heap looking for additional information. “What! A prosecutor!?”

Soon a senior trial lawyer in the office was involved. Impressive experts were summoned. I couldn’t believe it.

I used to say that one of the few examples of good government was the United States Marine Corps. I’ll add the Elder Abuse Prosecutions Office of the acomplia buy Chatham County District Attorney. Chatham County voters should make sure that both District Attorney Larry Chisholm and the Chatham County Commission know how valuable this program is. As things stand now, my hat is off to them all.

Government budgets are tight. But as finances tighten up for everyone, the less savory in our lot will be tempted to “go for the easy pickin’s”. The concentration of wealth in the hands of seniors is staggering. A clever caregiver who provides companionship to a lonely or ignored senior can easily strip the finances away. Most police, used to dealing with “real bad guys”, do not have the training an expertise to deal with financial abuse. Training is needed and government can do more. We’re talking citizen protection (not to mention a few additional police officers stimulating the economy). There is law enforcement money in the Great Stimulus Bill of 2009 . . . I hope some of it filters down to the coast.

In the meantime, families, stay involved. Be alert. Use common sense. If you suspect elder abuse (physical or financial) call the police, Adult Protective Services (912- 651-2216) or Meg Heap at the Chatham County DA’s Office (912-652-7308).

Filed Under: Coastal Senior, Miscellaneous Tagged With: ,