MassHealth may soon penalize elders for transferring assets into pooled trusts. It seems that MassHealth plans to make this change by the end of the year, and is doing so in response to a May, 2008 Regional Medicaid Bulletin clarifying Medicaid policy regarding pooled trusts.
It also appears that elders who establish and fund a pooled trust account before the date of the new regulations will not be subject to a transfer penalty, and the regulation will not be retroactive.
If you are over the age of 65 and are considering a pooled trust account as a planning option, the time to act is now.
What Are Pooled Trusts & Why Are They Important?
Pooled trusts are run by non-profit organizations for the sole benefit of disabled individuals (including disabled elders). Each disabled person funds an individual trust account. The income and principal of the account are then available for the supplemental support of the elder during his or her lifetime. All of the individual trust accounts are combined (or “pooled”) by the non-profit organization for the purpose of making investments.
These accounts are incredibly important for Massachusetts elders, because without a pooled trust account a single elder can keep only $2,000 in liquid assets and only $72.80 per month in income while receiving long-term care benefits. This may not be enough for even basic needs such as clothing and hygiene products.
After the elder’s death, a percentage of the funds left will be retained by the charitable organization. This percentage ranges from 5% to 50%. The remainder of the trust assets must be used to repay the Commonwealth for its MassHealth expenses. If there are any funds remaining, those funds will pass to family members or other beneficiaries.
Massachusetts Pooled Trust Options:
There are four pooled trust organizations in Massachusetts:
1. The Family Trust of Massachusetts http://www.familytrustofmass.org/
2. PLAN of Massachusetts http://planofma.org/
3. The CJP Disabilities Trust http://is.gd/54SSg
4. The Berkshire County ARC http://bcarc.org/
Check out this comparison chart with useful information about Massachsuetts pooled trust options: http://is.gd/54Tkn
What Should I Do?
If you or a loved one is disabled and over the age of 65, you should talk with your elder law attorney as soon as possible about long-term care planning options. If a pooled trust is an attractive or recommended planning option, then the time to act is now.
Happy Thanksgiving Weekend!
-Audrey
Saturday, November 28, 2009
Wednesday, November 18, 2009
Signing Nursing Facility and Assisted Living Admission Contracts
The process of moving is always stressful, and can be even more stressful when moving into a long-term care or assisted living facility. Often, there is a stack of paperwork ready to fill out when you arrive at the facility, and there is pressure to sign all of the paperwork immediately and quickly.
I advise, without reservation, that every new resident and his or her family read all admission contracts in full before signing. I also recommend that new residents hire an attorney to review the contract if at all possible. If there are illegal clauses in the contract, you may be able to simply cross them out before you sign. If you have already signed a contract, there may be some clauses that are not enforceable.
Below are some tips about the regulations governing long-term care facilities. For more information about the law, follow this link to the Massachusetts Regulations. http://is.gd/4Xs7A (940 CMR 4.00 )
In the Commonwealth of Massachusetts:
• A long-term care facility may not require that a third party guarantee payment for a potential resident’s care, whether or not the third party is the elder’s legal representative (such as a guardian or attorney-in-fact) or family member.
• A long-term care facility may not require that a potential resident waive the facility’s liability to the elder for loss of property or for injury as a result of the facility’s negligence.
• A long-term care facility may not require that a potential resident limit his or her choice of attending physician, nor may a facility require that a potential resident purchase medications from a specific pharmacy.
• All long-term care facility contracts must be in 12 point font or larger and in a language the elder understands.
• A long-term care facility cannot require that a potential resident waive any statutory or regulatory rights designed to protect residents of long-term care facilities. This includes arbitration clauses. A long-term care facility cannot make an elder sign an arbitration agreement as a condition of residency, but once you sign the agreement you may be bound by it.
Though these tips are an accurate description of the law, they do not always represent how things are done in real life. Sometimes, a phone call or letter from your attorney will resolve any issues that come up with nursing facility admission contracts. Other times, you may have to make a tough decision about if and when to initiate legal action to enforce your rights. My office provides after-hour reviews of admission documents, as do many elder law offices. For existing clients, I also offer emergency admission reviews.
If you or a loved one are planning a move and you are living outside the Commonwealth, are overwhelmed with the process, or are just busy, consider the following:
• Geriatric care managers can provide great advice about where to move, and can help you obtain a room at your first choice facility.
• Once you have found a great location, a move management service might be able to help with the actual move. I just learned about move management yesterday and plan to learn more over the next few months. Check out: http://www.athoughtfulmove.com/ and http://www.transitionsliquidation.com/
Thanks for reading!
-Audrey
I advise, without reservation, that every new resident and his or her family read all admission contracts in full before signing. I also recommend that new residents hire an attorney to review the contract if at all possible. If there are illegal clauses in the contract, you may be able to simply cross them out before you sign. If you have already signed a contract, there may be some clauses that are not enforceable.
Below are some tips about the regulations governing long-term care facilities. For more information about the law, follow this link to the Massachusetts Regulations. http://is.gd/4Xs7A (940 CMR 4.00 )
In the Commonwealth of Massachusetts:
• A long-term care facility may not require that a third party guarantee payment for a potential resident’s care, whether or not the third party is the elder’s legal representative (such as a guardian or attorney-in-fact) or family member.
• A long-term care facility may not require that a potential resident waive the facility’s liability to the elder for loss of property or for injury as a result of the facility’s negligence.
• A long-term care facility may not require that a potential resident limit his or her choice of attending physician, nor may a facility require that a potential resident purchase medications from a specific pharmacy.
• All long-term care facility contracts must be in 12 point font or larger and in a language the elder understands.
• A long-term care facility cannot require that a potential resident waive any statutory or regulatory rights designed to protect residents of long-term care facilities. This includes arbitration clauses. A long-term care facility cannot make an elder sign an arbitration agreement as a condition of residency, but once you sign the agreement you may be bound by it.
Though these tips are an accurate description of the law, they do not always represent how things are done in real life. Sometimes, a phone call or letter from your attorney will resolve any issues that come up with nursing facility admission contracts. Other times, you may have to make a tough decision about if and when to initiate legal action to enforce your rights. My office provides after-hour reviews of admission documents, as do many elder law offices. For existing clients, I also offer emergency admission reviews.
If you or a loved one are planning a move and you are living outside the Commonwealth, are overwhelmed with the process, or are just busy, consider the following:
• Geriatric care managers can provide great advice about where to move, and can help you obtain a room at your first choice facility.
• Once you have found a great location, a move management service might be able to help with the actual move. I just learned about move management yesterday and plan to learn more over the next few months. Check out: http://www.athoughtfulmove.com/ and http://www.transitionsliquidation.com/
Thanks for reading!
-Audrey
Monday, November 9, 2009
Conservators vs. Attorneys-in-Fact
Hello Everyone! I just read my last post and decided it was a bit on the dry side. It was no fun to write and was probably no fun to read.
So, while I will keep my promise and discuss the differences between conservators and attorneys-in-fact, this article will be much shorter and much more interesting than the last. If you want more information about the law, the trial courts have public law libraries, and the librarians in those places are fabulous. http://www.lawlib.state.ma.us/. Of course, you could also hire me to advise you.
Definitions: Some things, like definitions, are by nature boring. It’s why nobody reads the dictionary just for fun. If you already know what the terms conservator, attorney-in-fact, and fiduciary mean, please move directly to the next paragraph. For those not in the know, a conservator is a person appointed by the probate court to handle only the financial affairs of an incapacitated person. An attorney-in-fact is a person appointed by a document called a power of attorney. The attorney-in-fact is an agent responsible for making financial decisions on behalf of a person who is incapacitated. The big difference between a conservator and an attorney-in-fact is that a conservator gets appointed by the court, while an attorney-in-fact is appointed by a legal document that the incapacitated person signed before he or she lost capacity. A fiduciary is a person entrusted to control property or to act on the behalf of another.
Attorneys-in-Fact: Most folks would like a say in who will handle financial mattes on their behalf if or when they become incapacitated. Signing a power of attorney and appointing an attorney-in-fact is the easiest way to make that choice, and the powers given to your attorney-in-fact can be tailored to fit your comfort level. For example, you might wish to give your spouse full powers over your finances but limit your second choice attorney-in-fact to powers such as bill paying and mail collection. No court involvement is required to appoint an attorney-in-fact, and you can also use the document to request that a particular person be appointed as your conservator if one is required.
Conservators: You might be wondering why we need conservators at all if you can simply sign a power of attorney to name a fiduciary. The answer is that many people never bother to sign a power of attorney. When those people become ill or go missing, somebody needs to be appointed to handle their affairs. Sometimes, a conservator is necessary for people who have signed a power of attorney, either because of fiduciary misconduct (the attorney-in-fact is stealing money, for example) or because the fiduciary requires powers that were not granted by the power of attorney. Conservatorships are time consuming to obtain and, if you hire an attorney to help you, you must pay legal fees. Even uncontested conservatorships can cost a few thousand dollars in attorney’s fees. Conservatorships come with court oversight and, often, continued court involvement.
There is both a Conservator and an Attorney-in-Fact, and they disagree about what to do. Who wins? The conservator. The new Massachusetts Uniform Probate Court, M.G.L. c. 190B § 5 is quite clear that the attorney-in-fact is accountable to a conservator, and the conservator has the power to revoke or amend the power of attorney. If the conservator does not like what the attorney-in-fact is doing, he or she can simply revoke the power of attorney.
This is a very short version of guardians vs. conservators, but don't worry! I'll be addressing more complex details in future posts.
So, while I will keep my promise and discuss the differences between conservators and attorneys-in-fact, this article will be much shorter and much more interesting than the last. If you want more information about the law, the trial courts have public law libraries, and the librarians in those places are fabulous. http://www.lawlib.state.ma.us/. Of course, you could also hire me to advise you.
Definitions: Some things, like definitions, are by nature boring. It’s why nobody reads the dictionary just for fun. If you already know what the terms conservator, attorney-in-fact, and fiduciary mean, please move directly to the next paragraph. For those not in the know, a conservator is a person appointed by the probate court to handle only the financial affairs of an incapacitated person. An attorney-in-fact is a person appointed by a document called a power of attorney. The attorney-in-fact is an agent responsible for making financial decisions on behalf of a person who is incapacitated. The big difference between a conservator and an attorney-in-fact is that a conservator gets appointed by the court, while an attorney-in-fact is appointed by a legal document that the incapacitated person signed before he or she lost capacity. A fiduciary is a person entrusted to control property or to act on the behalf of another.
Attorneys-in-Fact: Most folks would like a say in who will handle financial mattes on their behalf if or when they become incapacitated. Signing a power of attorney and appointing an attorney-in-fact is the easiest way to make that choice, and the powers given to your attorney-in-fact can be tailored to fit your comfort level. For example, you might wish to give your spouse full powers over your finances but limit your second choice attorney-in-fact to powers such as bill paying and mail collection. No court involvement is required to appoint an attorney-in-fact, and you can also use the document to request that a particular person be appointed as your conservator if one is required.
Conservators: You might be wondering why we need conservators at all if you can simply sign a power of attorney to name a fiduciary. The answer is that many people never bother to sign a power of attorney. When those people become ill or go missing, somebody needs to be appointed to handle their affairs. Sometimes, a conservator is necessary for people who have signed a power of attorney, either because of fiduciary misconduct (the attorney-in-fact is stealing money, for example) or because the fiduciary requires powers that were not granted by the power of attorney. Conservatorships are time consuming to obtain and, if you hire an attorney to help you, you must pay legal fees. Even uncontested conservatorships can cost a few thousand dollars in attorney’s fees. Conservatorships come with court oversight and, often, continued court involvement.
There is both a Conservator and an Attorney-in-Fact, and they disagree about what to do. Who wins? The conservator. The new Massachusetts Uniform Probate Court, M.G.L. c. 190B § 5 is quite clear that the attorney-in-fact is accountable to a conservator, and the conservator has the power to revoke or amend the power of attorney. If the conservator does not like what the attorney-in-fact is doing, he or she can simply revoke the power of attorney.
This is a very short version of guardians vs. conservators, but don't worry! I'll be addressing more complex details in future posts.
Monday, November 2, 2009
The Difference Between Guardians and Health Care Agents
A health care proxy is a document which allows an individual to choose who will make health care decisions on his or her behalf in case of an emergency. The person who signs a health care proxy is called the principal. The person appointed by a health care proxy to make medical decisions for another person is called a health care agent.
Guardians in Massachusetts are persons appointed by the probate and family court to handle the support, care, education, health and welfare of an incapacitated person.
Health Care Agents:
It is cheaper to appoint a health care agent than a guardian. Health care proxies require less oversight from the courts and preserve more rights for the incapacitated person. On the other hand, health care proxies can only be executed while a person is still competent. Health Care Proxies in Massachusetts are governed by M.G.L. c. 201D: http://www.mass.gov/legis/laws/mgl/gl-201d-toc.htm.
- Any competent person can create a health care proxy, and the principal may revoke a health care proxy by signing a new health care proxy or by notifying his or her named agent and health care providers. A divorce automatically revokes any health care proxy naming your ex-spouse as your health care agent.
- With a health care proxy, you get to choose who you want to make health care decisions for you in the event that you are unable to make decisions for yourself.
- To activate a health care proxy, you must show that the principal cannot make or communicate health care decisions for him or herself. This determination must be made in writing by a treating physician, and it must include an explanation about the cause of incapacity and how long it is expected to last.
- The principal must be told that he or she has lost capacity.
- If the principal objects to a health care decision made by a health care agent for any reason, then the principal’s decision will prevail.
- No medical service provider is allowed to require or prohibit a patient from signing a health care proxy. If you already have a health care proxy, do not sign another one at a hospital. It will revoke your original document!
Guardianships:
Guardianships are more expensive and time consuming to obtain than health care proxies, but they include more oversight from the probate and family court and grant broader powers. Guardianships can be obtained only after a person has lost capacity. Guardianships in Massachusetts are governed by M.G.L. c. 190B, Article V. This is a new law which became effective on July 1, 2009, and is not yet available on the Mass.gov website. See http://www.lawlib.state.ma.us/2009/01/uniform-probate-code.html.
- The court will choose who to appoint as your guardian if you become incapacitated.
- Any person interested in the welfare of an alleged incapacitated person may petition the probate and family court for the appointment of a guardian. When the court considers who should be appointed as guardian, a person nominated in a power of attorney will have priority, followed by the spouse of an incapacitated person, and then the parent of an incapacitated person.
- The person seeking guardianship must file multiple forms with the court, including a petition and a medical certificate. He or she must also give notice to all interested persons (including the alleged incapacitated person), and must appear before the court for a hearing. The person seeking guardianship has the responsibility of proving that the alleged incapacitated person is both incapacitated and in need of a guardian.
- Guardians make decisions about an incapacitated person’s support, care, education, health, and welfare. This is a much broader range of powers than that granted by a health care proxy.
- A guardian must report to the court about the care of the incapacitated person. He or she must file an account with the court within 60 days of appointment, and once every year thereafter.
- An incapacitated person, or any other person interested in the incapacitated person’s welfare, can petition the court to remove a guardian or terminate a guardianship. This would be necessary if an incapacitated person regained capacity, or if a guardian is acting against the interests of the incapacitated person.
My basic estate planning package includes a health care proxy, and I make sure to send a copy of the health care proxy to my clients' treating physicians. Sometimes, however, it is too late to sign a proxy. If you have a loved one who is no longer competent, he or she will not be able to sign a health care proxy, and guardianship may be the only option to approve treatments or make certain personal decisions. Massachusetts now has the option of limited guardianships, which can be tailored towards a specific purpose, and which may create a more streamlined guardianship process. Next week I will post about the differences between powers of attorney and conservatorships.
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