All posts by cconboy

Medicare is offering relief from penalties for certain Medicare beneficiaries who enrolled in Medicare Part A and had coverage through the individual marketplace. For a short time, these individuals will be able to enroll in Medicare Part B without paying a penalty for late enrollment.

Individuals who do not enroll in Medicare Part B when they first become eligible pay a stiff penalty. For each year that they put off enrolling, their monthly premium increases by 10 percent — permanently. Some people with marketplace plans – that is, plans purchased by individuals or families, not through employers — did not enroll in Medicare Part B when they were first eligible. Purchasing a marketplace plan with financial assistance from the Affordable Care Act (aka Obamacare) can be cheaper than enrolling in Medicare Part B. However, Medicare recipients are not eligible for marketplace financial assistance plans. And because marketplace plans are not considered equivalent coverage to Medicare Part B, signing up late for Part B will result in a late enrollment penalty.

Although the Centers for Medicare and Medicaid Services (CMS) sent notice to individuals who had both marketplace plans and Medicare, it may have been too late. Therefore, CMS is allowing individuals who enrolled in Medicare Part A and had coverage through a marketplace plan to enroll in Medicare Part B without a penalty. It is also allowing individuals who dropped marketplace coverage and are paying a late enrollment penalty for Medicare Part B to reduce their penalty. To be eligible for the relief, the individual must:

1.   Have an initial Medicare enrollment period that began April 1, 2013 or later; or

2.   Have been notified of a retroactive premium-free Medicare Part A award on October 1, 2013 or later.

This offer is available for only a short time. To be eligible for the relief, individuals must request it by September 30, 2017. Individuals who are eligible should contact Social Security at 1-800-772-1213 or visit their local Social Security office and request to take advantage of the “equitable relief.”

For more information on Medicare and Medicaid, please contact the experienced attorneys at Zacharia Brown. You may schedule an appointment by visiting our website at PittsburghElderLaw.com or by calling 724.942.6200.

In continuing with our theme of current events for the month of June, this week we will examine how a possible repeal of the estate tax under the new administration may affect your current estate plan.

With Republicans in control of Congress and the presidency, there is talk of eliminating the federal estate tax, which in 2017 affects estates over $5.49 million. This begs the question: With no estate tax, do you still need to consider utilizing a trust for estate planning purposes? While trusts can be used to shelter assets from the estate tax, trusts have many other valuable estate planning uses.

A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a “trustee,” holds legal title to property for another person, called a “beneficiary.” The following are some of the benefits of trusts.

1. Avoiding Probate: One of the biggest benefits of a trust is avoiding the probate process. Probate is the process of administering and settling an estate after someone dies. In some states, it can be a costly and time-consuming process. Even with small estates, beneficiaries may not have access to estate funds until a will is filed and an executor appointed. A trust gives beneficiaries immediate access to trust funds. If you have property in multiple jurisdictions, a trust can be especially beneficial in avoiding more than one probate proceeding. Also, probate is a public process—anyone can access court records–while assets distributed in a trust are private.

2. Protection for Disability: Another benefit of a trust is to provide protection if you become disabled. If you become incapacitated, the trustee can manage your finances without the need to go to court and get a conservatorship or guardianship.

3. Control: A trust allows you to specifically detail how you want to distribute your assets. For example, you can choose to dole out benefits in small amounts if you don’t want your beneficiaries to receive all your assets at one time. You can also direct how funds in the trust can be spent on a beneficiary. If you have property, the trust can specify who has the right to use the property, whether it can be sold, and how proceeds should be distributed.

4. Protection from Creditors: Certain types of trusts can be set up to protect beneficiaries from creditors. A properly structured trust can ensure that creditors cannot reach trust funds. This can be helpful if, for example, your intended beneficiary divorces or is the target of a lawsuit.

5. Providing for a Child with Special Needs: If you have a child with special needs, a trust is particularly important. A special needs trust allows a beneficiary with special needs to receive inheritances, gifts, lawsuit settlements, or other funds without losing his or her eligibility for government programs.

Trusts are just one possible part of an estate plan. To know if a trust is right for you, especially with the possibility of changes to the current estate tax rates, please contact the experienced attorneys at Zacharia Brown. You may schedule an appointment by visiting our website at PittsburghElderLaw.com or by calling 724.942.6200.

New Obama-era rules designed to give nursing home residents more control of their care are gradually going into effect over the next couple of years. The rules give residents more options regarding meals and visitation as well as make changes to discharge and grievance procedures.

The Centers for Medicare and Medicaid Services (CMS) finalized the rules — the first comprehensive update to nursing home regulations since 1991 — in November 2016. The first group of new rules took effect in November and the rest will be phased in over the next two years.

Here are some examples of the new rules now in effect:

Visitors: The new rules allow residents to have visitors of the resident’s choosing and at the time the resident wants, meaning the facility cannot impose visiting hours. There are also rules about who must have immediate access to a resident, including a resident’s representative.

Meals: Nursing homes must make meals and snacks available when residents want to eat, not just at designated meal times.

Roommates: Residents can choose their roommate as long as both parties agree.

Grievances: Each nursing home must designate a grievance official whose job it is to make sure grievances are properly resolved. In addition, residents must be free from the fear of discrimination for filing a grievance. The nursing home also has to put grievance decisions in writing.

Transfer and Discharge: The new rules require more documentation from a resident’s physician before the nursing home can transfer or discharge a resident based on an inability to meet the resident’s needs. The nursing home also cannot discharge a patient for nonpayment, if Medicaid is considering a payment claim.

The CMS also enacted a rule forbidding nursing homes from entering into binding arbitration agreements with residents or their representatives before a dispute arises. However, a nursing home association sued to block the new rule and a U.S. district court has granted an injunction temporarily preventing CMS from implementing it. The Trump Administration is reportedly planning to lift this ban on nursing home arbitration clauses.

In November 2017, rules regarding facility assessment, psychotropic drugs and medication review, and care plans, among others, will go into effect. The final set of regulations covering infection control and ethics programs are then scheduled to take effect in November 2019.

For more information on Nursing Home facilities and protections for Nursing Home residents, please contact the experienced attorneys at Zacharia Brown. You may schedule an appointment by visiting our website at PittsburghElderLaw.com or by calling 724.942.6200.

After initially delaying a rule intended to prevent financial advisers from steering their clients to bad retirement investments, the Department of Labor (DOL) announced that the rule will go into effect on June 9, 2017, but its future is still unclear.

Earlier this year, President Trump signed an executive order delaying the so-called fiduciary rule, the first part of which was scheduled to go into effect in April 2017, and called for a review. The DOL is presently reviewing the rule and can still make changes to it or repeal it based on the review, but the agency said there was no basis to further delay the rule’s implementation. It is possible that additional changes will be made before the rest of the rule is scheduled to go into effect on January 1, 2018.

Prompted by concern that many financial advisers have a sales incentive to recommend to their clients bad retirement investments with high fees and low returns because they get higher commissions or other incentives, the Department of Labor drew up a rule in April 2016 that compels financial advisers to act like fiduciaries.

The rule requires all financial professionals who offer advice related to retirement savings to provide recommendations that are in a client’s best interest. Currently, financial advisers only have to recommend suitable investments, which means they can push products that may benefit them more than their clients. The new rule will mean that advisers cannot accept compensation or payments that would create a conflict unless they have an enforceable contract agreeing to put the client’s interest first. Advisers also will have to disclose any conflicts and charge reasonable compensation.

The rule’s requirement that advisers work in their client’s best interest will begin on June 9, 2017. However, the requirement that advisers who accept commissions need to include a provision in customer contracts agreeing to put the client’s interests first will not take effect until January 1, 2018. The rule itself is difficult to enforce without the contract requirement, but changes to that part of the rule are possible after the DOL’s review.

The new rule does not solve every problem. It applies only to tax-advantaged retirement accounts like IRAs and 401(k)s and not other investments. And even after the fiduciary rule goes into effect, consumers should still use caution when selecting a financial adviser. One important step is to ask your financial adviser if he or she is serving as your fiduciary. If not, you should be aware that the adviser is not required to act in your best interest.

There are many reputable and experienced financial advisors who will work with you to put together a plan that places your needs and interests first. You need to make sure that you ask your financial adviser about their experience and credentials before you retain their services and also beware of phony credentials.

For more information about financial advisors, please contact the experienced attorneys at Zacharia Brown. You may schedule an appointment by visiting our website at PittsburghElderLaw.com or by calling 724.942.6200.

In honor of Memorial Day, we’d like to introduce you to some of the benefits available to Veterans’ and their spouses when one of them passes away.

Federally, the VA will provide funeral/burial and plot interment benefits to certain veterans, including those dying from a service-related disability, those receiving pension or compensation (including Aid and Attendance), or those passing away in a VA facility.  The amount provided is $749 toward burial and funeral expenses and $749 toward plot expenses.  It can be paid to a veteran’s spouse, child, parent or the executor of his or her estate, so long as proof of payment for the funeral expenses can be furnished.

In addition to the federal benefit, our counties also provide resources to pay towards the final expenses for Veterans and their spouses.  In Allegheny County, there is a $100 burial benefit available on the death of the veteran and also upon the death of the spouse.  They will pay up to $50.00 for the foundation and installation of the free federal headstone or marker if the deceased was a wartime veteran.  This benefit is also available for peacetime veterans if their remains have been uncovered.   In Washington County, the benefit is $75 for the burial expenses and $100 towards the foundation and installation of the marker, and in Westmoreland County, $75 towards the burial expenses and $25 towards the placing of the marker.

The National Cemetery of the Alleghenies is also available to provide no cost burial plots to all members of the armed forces who have met minimum active duty service requirements and were discharged under other than dishonorable conditions.  A veterans’ spouse, widow or widower, minor children and some disabled adult children are also eligible, even if they predecease the veteran.

These are not benefits that can be applied for in advance, and your local funeral director will be able to make the necessary arrangements at the time of death.

We humbly thank the men and women who have served our country on this Memorial Day. For more information about benefits available to our aging Veteran population, please contact the experienced attorneys at Zacharia Brown. You may schedule an appointment by visiting our website at PittsburghElderLaw.com or by calling 724.942.6200.

The Veterans Administration offers two disability programs for eligible veterans. The first benefit is disability compensation which is only available for veterans with service-connected disabilities. The second program provides a disability pension benefit which is available to anyone who served during wartime and has a disability. For this pension benefit, the disability does not have to be related to military service.

Disability Compensation Benefit:
If you have an injury or disease that happened while on active duty or if active duty made an existing injury or disease worse, you may be eligible for disability compensation. The amount of compensation you get depends on how disabled you are and whether you have children or other dependents. Additional funds may be available if you have severe disabilities, such as loss of limbs, or a seriously disabled spouse.

Disability Pension Benefit:
The VA pays a pension to disabled veterans who are not able to work. The pension is also available for surviving spouses and children. This pension is available whether or not your disability is service-connected, but to be eligible you must meet the following requirements:
1. You must not have been discharged under dishonorable conditions;
2. If you enlisted before September 7, 1980, you must have served 90 days or more of active duty with at least one day during a period of war. Anyone who enlisted after September 7, 1980, however, must serve at least 24 months or the full period for which that person was called to serve;
3. You must be permanently and totally disabled, or age 65 or older. You will need a letter from your doctor to prove that you are disabled; and
4. In addition, your income must be below the yearly limit set by law; called the Maximum Annual Pension Rate (MAPR).

The MAPR for 2017 is as follows:

Veteran with no dependents – $12,907
Veteran with a spouse or a child – $16,902
Housebound veteran with no dependents – $15,773
Housebound veteran with one dependent – $19,770
Additional children – $2,205 for each child

The pension you may qualify for depends on your income. The VA pays the difference between your income and the MAPR. The pension is usually paid in 12 equal payments. For example, if John is a single veteran and has a yearly income of $7,387. His pension benefit would be $5,520 (12,907 – 7,387). Therefore, he would get $460 a month. Your income does not include welfare benefits or Supplemental Security Income. It also does not include unreimbursed medical expenses actually paid by the veteran or a member of his or her family.

Aid and Attendance:
A veteran who needs the help of an attendant may qualify for additional help on top of the disability pension benefit. The veteran needs to show that he or she needs the help of an attendant on a regular basis. A veteran who lives in an assisted living facility is presumed to need aid and attendance. A veteran who meets these requirements will get the difference between his or her income and the MAPR below (in 2017 figures):
Veteran who needs aid and attendance with no dependents – $21,531
Veteran who needs aid and attendance with one dependent – $25,525

If you think that you may qualify for Veteran’s Benefits and are considering applying, please contact the experienced attorneys at Zacharia Brown. You may schedule an appointment by visiting our website at PittsburghElderLaw.com or by calling 724.942.6200.

The Veteran’s Administration (VA) offers a pension benefit to low-income veterans (or their spouses) who are in nursing homes or who need help at home with the activities of daily living, like dressing, bathing and other similar tasks.  The pension, called Aid and Attendance, is currently underused, but impending regulations will soon make it available to even fewer veterans.

The new regulations will, for the first time, specify asset limits for qualification and impose a look-back period and transfer penalties similar to Medicaid’s. The looming changes mean that those considering applying for Aid and Attendance should act quickly. Currently, to be eligible for Aid and Attendance a veteran (or the veteran’s surviving spouse) must meet certain income and asset limits. The asset limits aren’t specified, but $80,000 is the amount usually used. However, unlike with the Medicaid program, there are no penalties if an applicant divests him- or herself of assets before applying.

The proposed regulations are set to establish an asset limit mirroring the current amount that a Medicaid applicant’s spouse is allowed to retain ($120,900 in 2017). But in the case of the VA, this number will include both the applicant’s assets and income. It will be indexed to inflation in the same way that Social Security increases. An applicant’s house will not count as an asset, but there is a two-acre limit on the lot size that can be excluded.

The regulations also establish a three-year look-back provision. Applicants who transfer assets within three years of applying for benefits will be subject to a penalty period that can last as long as 10 years. To avoid the penalty, applicants will have to present clear and convincing evidence that the transfer was not made in order to qualify for Aid and Attendance benefits.

Under the proposed rules, the VA will determine a penalty period in months by dividing the amount transferred by the applicable maximum annual pension rate (MAPR). The MAPR for surviving spouses is a little more than half the MAPR for veterans, which means the penalty period for a surviving spouse would be almost twice as long as a veteran’s penalty period would be for the same transferred asset.

These proposed regulations have been looming on the horizon for awhile, with the latest reports indicating that they may go into effect as early as the second quarter of 2017, which runs through the end of June. If you think that you may qualify for Veteran’s Benefits and are considering applying for Aid and Attendance, it would be wise to start the process as soon as possible.

Please contact the experienced attorneys at Zacharia Brown. You may schedule an appointment by visiting our website at PittsburghElderLaw.com or by calling 724.942.6200.

Last month we took a closer look at Medicaid, asset protection planning and the rules concerning qualification for Medicaid benefits. As a source of payment for long term care, Medicaid will only cover skilled nursing care. If you do not require and/or meet the qualifications for this level of skilled nursing care, there may be other benefit sources available to help cover the costs of long term care.

The U.S. Department of Veterans Affairs (VA) is an organization that provides health care benefits to veterans. The plan covers a number of health care services, including preventative services, diagnostic and treatment services, and hospitalization. The VA also offers a number of long-term care options through its health plan.

All enrolled veterans are eligible for the following services:

    1. Geriatric evaluation which provides either an inpatient or outpatient evaluation of a veteran’s ability to care for him or herself;
    2. Adult day health care which is a therapeutic day care program that provides medical and rehabilitation services to veterans;
    3. Respite care which provides either inpatient or outpatient supportive care for veterans to allow caregivers to get a break;
    4. Home care which provides nursing, physical therapy, and other services provided in the veteran’s home; and
    5. Hospice/palliative care which provides services for terminally ill veterans and their families.

Some services, such as nursing home care and domiciliary care, are limited to certain veterans and are not automatically available to all veterans enrolled in the VA health plan.

In addition, the following veterans automatically qualify for unlimited nursing home care:

      1. Veterans who are seeking nursing home care for a service-related condition;
      2. Veterans with a service-connected disability rating of 70 percent or more; and
      3. Veterans who have a service-connected disability of 60 percent and are unemployable.

A service-connected disability is a disability that the VA has officially ruled was incurred or aggravated while on active duty in the military and in the line of duty. The VA must rule that your illness/condition is directly related to your active military service, and it assigns each disability a rating. The ratings are established by VA regional offices around the country.

The VA may provide nursing home care to other veterans if space permits and Veterans with service-connected disabilities receive priority.

There are also state-run veteran’s nursing homes. The VA provides funds to states to help them build the homes and pays a portion of the costs for veterans eligible for VA health care. The states, however, set eligibility criteria for admission.

Finally, a domiciliary is a VA facility that provides care on an ambulatory self-care basis for veterans disabled by age or disease who are not in need of acute hospitalization and who do not need the skilled nursing services provided in a nursing home. Domiciliary care is available to low-income veterans with a disability.

For more information on Veterans Affairs, and to see if you may be eligible for VA benefits for Long Term Care , you should contact the experienced attorneys at Zacharia Brown. You may  schedule an appointment with an attorney at Zacharia Brown by visiting our website at PittsburghElderLaw.com or by calling 724.942.6200.

The phrase “life estate” often comes up in discussions of estate and Medicaid planning, However, when we meet with individuals who ask us about this planning method, they are often unaware of how it works. Since there are both pros and cons in utilizing this type of planning, it is important to take a closer look at what life estates are all about!

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 also can play an important role 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 or 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.

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. Because the property is not included in the life tenant’s probate estate, it can avoid Medicaid estate recovery in states that have not expanded the definition of estate recovery to include non-probate assets. Even if the state does place a lien on the property to recoup Medicaid costs, the lien will be for the value of the life estate, not the full value of the property.

One drawback to using a life estate as a Medicaid Planning tool is that the life tenant cannot sell or mortgage the property without the agreement of the remaindermen. In addition, if the property is sold, the proceeds are divided up between the life tenant and the remaindermen. The shares are determined based on the life tenant’s age at the time — the older the life tenant, the smaller his or her share and the larger the share of the remaindermen. Lastly, and most important, you need to 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. Purchasing a life estate should not result in a transfer penalty if you buy a life estate in someone else’s home, pay an appropriate amount for the property and live in the house for more than a year.

The rules regarding Medicaid transfer penalties and estate recovery are extremely complex, so BEFORE you consider any planning strategies, you should contact the experienced attorneys at Zacharia Brown. To find out more about Medicaid and Asset Protection Planning, and if a life estate is the right plan for you,  schedule an appointment with an attorney at Zacharia Brown by visiting our website at PittsburghElderLaw.com or by calling 724.942.6200.

This particular question is one that we hear from our clients all of the time. The short answer is, if you have it to give, you certainly can. HOWEVER, there may be consequences should you apply for Medicaid long-term care coverage within five years after each gift.

The $14,000 figure is the amount of the current gift tax exclusion (for 2017), meaning that any person who gives away $14,000 or less to any one individual does not have to report the gift to the IRS, and you can give this amount to as many people as you like.  If you give away more than $14,000 to any one person (other than your spouse), you will have to file a gift tax return.  However, this does not necessarily mean you’ll pay a gift tax.  You’ll have to pay a tax only if your reportable gifts total more than $5.49 million (2017 figure) during your lifetime.

Many people believe that if they give away an amount equal to the current $14,000 annual gift tax exclusion, this gift will be exempted from Medicaid’s five-year look-back at transfers that could trigger a waiting period for benefits.  Nothing could be further from the truth.

The gift tax exclusion is an IRS rule, and this IRS rule has nothing to do with Medicaid’s asset transfer rules. While the $14,000 that you gave to your grandchild this year will be exempt from any gift tax, Medicaid will still count it as a transfer. Furthermore, that gift could then make you ineligible for nursing home benefits for a certain amount of time should you apply for them within the next five years.  You may be able to argue that the gift was not made to qualify you for Medicaid, but proving that is an uphill battle.

If you think there is a chance you will need Medicaid coverage of long-term care in the foreseeable future, you should consult with an experienced elder law attorney at Zacharia Brown BEFORE starting a gifting plan. For more on Medicaid Planning and asset transfer rules,  or to schedule an appointment with an attorney at Zacharia Brown, please visit our website at PittsburghElderLaw.com or call 724.942.6200.