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Long-Term Care Lapse Logistics / York, PA

In the meantime, cases like this demonstrate anew how vigilant families need to be. If your older relative has a long-term care policy, photocopy the page listing the company, policy number and claims contact information. Keep the insurance company updated on new addresses, yours (if you are the third-party designee) and your relative’s. It wouldn’t hurt, if the policyholder is becoming forgetful, to check bank statements or call the company to be sure premiums are paid.

Do your elderly loved ones have a long-term care insurance policy or something similar? If yes, then they likely are relying on it to cover the potentially catastrophic financial risk that is long-term care. If yes, then what happens if they forget to pay the premiums?

Do I have your attention now? If yes, then you will want to read a recent horror story in The New York Times – The New Old Age Blog titled “The Policy Lapsed, but No One Knew.

Generally speaking, any form of “insurance” exists to help minimize various financial risk exposures to the insured. In essence, you pay a premium you can afford (and the insurance company will accept) to cover a risk you cannot afford. Once insured, you really only need to think about the much easier task of remaining insured, which usually means making timely premium payments.

Unfortunately for some families, remaining insured can sometimes present a few challenges uniquely associated with old age itself. What happens when the loved one begins to develop dementia and simply stops making the premium payments on the policy? Dementia is rather subtle before it becomes fairly dramatic. Accordingly, you may need to implement some financial safety precautions.

The terrible lesson coming out of the original article is how the caregiver/son was diligent, but a mistake by his father at the bank snowballed into missed payments and a lapsed policy. The worst part of the horror story is that the cancellation notice from the insurer was never received – and the family was unaware of the policy lapse until they went to claim its benefits.

MP900439295Ultimately, the burden of proof was not on the insurer regarding whether the premium notice had been sent and received.

Will there be a legislative reaction to stories like these? It seems this case will not go anywhere soon, but there may be more like it across the country.

For more information about Long Term Care Lapse Logistics, please visit my estate planning website.

Reference: The New York Times – The New Old Age (January 31, 2014) “The Policy Lapsed, but No One Knew

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Medicare Rehab Requirements Relaxed? York, PA

MP900407553What does this mean? Imagine you have a severe stroke. Before Jimmo, most people thought Medicare would pay for physical therapy only as long as that PT was helping you get better. For instance, Medicare would pay if therapy helped increase the number of steps you could walk without assistance. Now, Medicare will pay for PT even if it only helps you maintain your current ability to walk.

Whenever the rules for receiving Medicare benefits change it has a real impact on real beneficiaries and patients. Sometimes legal changes occur literally overnight, while at other times the changes are more subtle. After a landmark lawsuit a year ago, there may be some tangible effects to the system – for the better. This is especially the case when an elderly loved one requires skilled nursing or physical therapy.

The landmark case was Jimmo v. Sebelius. Recently, Forbes explored the legal evolution Jimmo sparked in an article titled “When Medicare Will Pay for Skilled Nursing or Physical Therapy.

The salient change concerns one of the guiding principles of Medicare, or at least what has been the common wisdom for years. This principle is the so-called “improvement standard.” The idea was that Medicare would pay for skilled nursing care or physical therapy only when the patient’s health had the potential to improve. Accordingly, the payments would cease when there was no more improvement to be had.

Problem: skilled nursing and physical therapy are not necessarily just for curing a problem, but for managing it, especially among the elderly. Jimmo, however, provides that payment for these services will be made if they are “reasonable and necessary to prevent or slow further deterioration” and that benefits “cannot be denied based on the absence of potential for improvement or restoration.”

Real changes have been slow as providers test the waters, and all the other rules regarding skilled care are in place. Nonetheless, an apparent misunderstanding has been put to rest and an entire class of real beneficiaries and patients can now be assured of receiving benefits. Those previously denied benefits may even have the option of having their coverage re-reviewed.

For more information about Skilled Nursing & Medicare, please visit my estate planning website.

Reference: Forbes (January 31, 2014) “When Medicare Will Pay for Skilled Nursing or Physical Therapy

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Estate Planning With A Life Estate / York, PA

Probate court is no one's idea of fun, so it's something you may want to spare your heirs when they inherit your home. One simple tool for doing that: a "life estate."

Do you want to avoid probate when it comes to the transfer of your assets at death, especially when it comes to your home? Perhaps you would prefer that home to pass directly into the hands of your adult heirs. If yes, then consider using a “life estate” approach.

If the concept of a life estate is new to you, then a recent article in The Wall Street Journal ought to be on your reading list. As the article titled “An Easy Way for Heirs to Inherit Your Home” explains, a life estate for real estate operates like a “payable-on-death account” for a bank account.

Here is how a life estate works. First, you draw up a deed to your house naming your heirs as beneficiaries. Second, you live in the house for the rest of your life. Third and lastly, after you pass, your named heirs need only to present your death certificate to assume title to the family home. This can save time and money often associated with probate. Simple?

A life estate may be too simple, depending on the circumstances. As with most things legal, things can get complicated quickly. For example, you will not be free to sell your home during your lifetime without beneficiary consent and there are tax issues to consider.

Depending upon the home and your objectives, there may be better ways to transfer the family home. Regardless, a life estate is a proven transfer tool just right for the right circumstances.

For more information about Estate Planning with a Life Estate, please visit my estate planning website.

Reference: The Wall Street Journal (February 9, 2014) “An Easy Way for Heirs to Inherit Your Home

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When Children Are Responsible For The Nursing Home Bill / York, PA

Bigstock-Elder-Couple-With-Bills-3557267If your parents live in one of 29 states or Puerto Rico that has filial responsibility laws on the books, you could potentially be held legally responsible for their care under certain circumstances, such as when your parents are ailing and without sufficient financial resources to take care of themselves. Until recently, these statutes have been largely ignored. However, several recent court decisions indicate that there might be renewed interest in enforcing them.

Filial support is not just a moral virtue. In many parts of the country and branches of the legal system filial support is a legal imperative. Filial support laws exist in 29 states as well as Puerto Rico, and have quietly existed on the books for some time. Now, however, these laws are a very real and present concern for the adult children of elderly loved ones.

Fortunately, Forbes has provided a crash course regarding filial laws and their potential challenges in an article titled “Who Will Pay For Mom's Or Dad's Nursing Home Bill? Filial Support Laws And Long-Term Care.

Essentially, filial support is the legally-imposed financial responsibility whereby children are responsible for their aging parents. The origins of filial support are found in some pretty old laws and lines of legal reasoning. History aside, consider filial support the flip-side of the legally-imposed financial responsibility parents owe to young children.

Nevertheless, in a modern context with the massive escalation of healthcare costs, some see a dangerous pattern emerging. This is most dramatically evident when it comes to the costs of long-term care. So are you at risk?

These are state laws. However, you might be liable if an elderly loved one resides in one of these states and you do not. Does this have your attention?

Be sure to read the original article and, perhaps, do a little online research yourself. If nothing else, find out which states have filial support laws. Better yet, consult with an experienced elder law attorney.

For more information about Children and their responsibility for Nursing Home bills, please visit my estate planning website.

Reference: Forbes (February 3, 2014) “Who Will Pay For Mom's Or Dad's Nursing Home Bill? Filial Support Laws And Long-Term Care

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A Medicaid Primer 101 / York, PA

MP900289434If you have elderly parents, don’t wait to learn about Medicaid — sometimes referred to by a litany of other state names, like Medi-Cal and MassHealth.

What is your Medicaid IQ? Most Americans have heard of Medicaid, since it has been part of the national political debate for some time. A political discussion is one thing, but what does Medicaid mean to your elderly loved ones?

If you have elderly parents, it is high time to learn about Medicaid and how it works.

Fortunately, a recent Forbes article is a good place to start. The article is aptly titled “Medicaid And Your Parents: The Basics.” Essentially, Medicaid is a program run jointly by the federal government and each respective state government. Think of it as government insurance for, among other things, late-in-life medical care like home care or nursing home care when the one needing care has too limited financial resources.

Medicaid is “means-tested.” Consequently, having too great an income or too much in assets will disqualify a Medicaid applicant and create a legal hurdle to receiving benefits. In addition, having “assets” is not the same as having the money to pay for care.

For those with assets exceeding the Medicaid limits, “giving” assets away will only disqualify them from Medicaid assistance if the transfers violate the “look back” period designed to keep them from gaming the system. Of course, an elderly individual might have had innocent intentions when they made a disqualifying gift a few years ago and the need for Medicaid was unforeseen. Regardless, such transfers are a red flag when it comes to Medicaid qualification.

Each state is subtly different in its approach, but these are very real rules and they require careful thought and timing. Otherwise, it is easy to run afoul of the rules now and be disqualified from care later. You owe it to your elderly loved ones to start planning for a worst case scenario without delay.

For more information about Medicaid, please visit my estate planning website.

Reference: Forbes (February 11, 2014) “Medicaid And Your Parents: The Basics

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