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Identifying with the person who has Alzheimer’s

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January 9, 2012

- Alzheimer's Care, Blog, Elder Law Articles

It’s said the best way to understand a person’s perspective is to “walk a mile in his shoes.” It’s true that no one can truly empathize with another’s situation without being in it himself or herself. But even when people are in the same situation, we know that each individual will respond to it differently.  The best way to understand how a person diagnosed with Alzheimer’s is feeling might be to read about the experiences of others in similar situations. Numerous people have written books and educational material that reflect on their personal experiences caring for someone with Alzheimer’s or other dementia.  You can “walk” together with others who have “been there.” At times it might be heart-wrenching to hear of their devastating experiences, but they also can prove helpful and educational. Your own emotions might be stirred, but you also might realize how your loved one might be feeling.  You might want to start with either of these books:   * “A Personal Journey Maze of Alzheimer’s,” by Dianna Friel McGowin (Dell/Doubleday Dell Publishing) * “Show Me the Way To Go Home,” by Larry Rose (Elder Books)  They’re available online, at your local bookseller and at your nearest Alzheimer’s Association outlet.
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New Medicaid Law Changes Pose Challenges to Nursing Homes and Residents

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December 22, 2011

- Alzheimer's Care, Blog, Elder Law Articles, Medicaid and Paying for Nursing Home Care

The New Landscape In February of 2006, due to changes brought about by Congress through the federal Deficit Reduction Act of 2005 (DRA), there were massive changes in the federal Medicaid law as it relates to the gifts or asset transfers. Now, on January 1, 2012, Illinois will finally adopt those provisions of the DRA and, thus change Illinois Medicaid law for long-term care forever. You may recall that under the old Medicaid law (expiring on December 31, 2011), a gift or other uncompensated transfer created a period of  ineligibility starting on the date of transfer.
  • For example: Prior to January 1, 2012, a $70,000 gift made by someone in Chicago, Illinois would  create a 10 month penalty from the date the gift was made. (Assume Skilled Nursing Facility (“SNF”) cost of $7,000 a month. $70,000 divided by $7,000 = 10  months). Thus, if the gift were made 12 months prior, the penalties would have already expired.
  • Under the new Illinois DRA law for  Medicaid, for gifts made after January 1, 2012, the same 10 month penalty period will not begin until the following requirements are all met:
1. The person is in the nursing home, 2. Assets are spent down to $2,000 and  3. An application for Medicaid is filed. Only at that time will the penalty period start!  In such a case any gifted funds would then have to be used  for the cost of care to get through the penalty period. But there will be many circumstances in which the gifted funds are no longer available. If, for  example, one of the gifts were made by an Alzheimer’s patient to fund college tuition or given to an individual in the family who simply no longer has the  gifts. What will happen in that case? This is a major pitfall brought about by the new Medicaid  law and one with which nursing homes will have to deal in the days that are coming.  In other words, prior to the  passage of this new Illinois law, various asset transfers would not cause major  problems for nursing homes since the penalties associated with the prior  transfers were self-correcting, in that the penalty would have expired  by the time the applicant was spent down. But now, under the new Illinois law, every transaction will be examined. All small transfers will be accumulated and added together and they will cause penalties which won’t even begin to run until the person is  otherwise spent down, in the nursing home, and the Medicaid application is filed. Nursing Homes Need to Change Procedure In the past, it has been very common to see nursing homes  kindly helping residents with Medicaid applications. There was not a lot of risk associated with this under prior law. That has now all changed. Under the new laws, the same practice may be very risky from a legal and cash flow perspective. That is because it will be now be essential to verify exactly what assets have been spent and transferred without value received in exchange, because the new law will have no safe harbor for prior asset transfers without adequate compensation.
  • So let’s review another example:  Assume Mr. Applicant is a resident of the Gracious Nursing Facility located in Chicago, Illinois and that he has been paying  the Gracious Nursing Facility privately for some months. He will be ready to apply for Medicaid in September, 2012 because at that time he will be spent down.
  • However, in January, 2012, after the new law came into effect, Mr. Applicant made a gift to his granddaughter  for tuition at a local college.
  • Assume that the amount of tuition payment was $70,000. Under the old law, that would have meant that there would be a penalty of 10 months ($70,000 gift divided by $7,000, which is the cost  for a semi private room on a private pay basis at Gracious Nursing Facility=10  month penalty).  Under the old laws, the 10 month penalty calculation would begin on the date of the transfer. Thus, the penalty would have ended by August, 2012.
  • However, under the new laws, the penalty won’t start until September, 2011, when Mr. Applicant is spent down to $2000.  This means he may not be eligible until the same 10 month penalty period ends in June, 2013!
How is Mr Applicant going to pay from September of 2012 to June of 2013, after he has already spent down? Now if the social worker at the nursing home kindly tries to  assist the family by filling out the application and doesn’t understand how the new law will affect Mr. Applicant’s situation, then the application will be  filed with an expectation that Medicaid will be approved. However, you can imagine the disappointment of the nursing home administrator and the family when they later find out (usually some 90 to 120 days after the submission of the application) that the application was properly denied because the new rules are in effect. What will the nursing home do a case like this? What will the family of Mr. Applicant do in such a case? The proper recourse could consist of filing a request for  hardship exception. Illinois, however, has not had a great history of granting hardship exceptions. Furthermore the granting of hardship exceptions is for the  benefit of the resident. The hardship exception is not designed to make sure that the nursing home can maintain its cash flow for properly serving a resident. Thus you can see that these issues will, in the coming days, be very difficult for nursing homes and families dealing with the documentation required for the resident. Many residents will not have the ability to  reconstruct the financial history to the extent required by law (60 months).  In addition, seeking hardship waivers is a  very difficult process and will require proving up certain pleadings. For these reasons this new Illinois law is something that the commentators have called “The Nursing  Home Bankruptcy Act of 2006.”  HARSH BUT TRUE! While I’m not suggesting that the world is ending, I am sure  that this new law will cause enormous hurdles for nursing homes and their residents to overcome. What was at one time a simple Medicaid application should no longer be viewed that way. The services of an elder law attorney who thoroughly understands the new rules and  Medicaid changes as well how to deal with asset issues, property transfers and Medicaid denials will become more important now and in the days ahead.   Anthony B. Ferraro Attorney – CPA
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Closer to New Medicaid Rules

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October 8, 2011

- Blog, Elder Law Articles

It appears that the State of Illinois is getting closer to adopting new Medicaid rules for long-term care required by the federal Deficit Reduction Act of 2005. More will be learned about the fate of these new rules at the next upcoming meeting of JCAR (Joint Committee on Administrative Rules) that will take place, Tuesday October 11, 2011 at the Bilandic Building in Chicago Illinois. Once the rules adopted a  discussion about the affect of these rules on Illinois residents and long-term care facilities and providers will be posted. Stay tuned.
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When do you need an Elder Law Attorney?

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October 6, 2011

- Elder Law Articles

What is an elder law attorney? An elder law attorney is an attorney that brings together multiple disciplines in the legal field and non-legal fields to deliver senior citizen–taxpayers an array of services that are designed to help them transition from their maturing years to their senior years so that care, security and the ability to age with dignity are maximized — but the cost of care is minimized. Multiple Disciplines Let’s break down that first paragraph into a little bit more detail. The multiple disciplines that an elder law attorney relies on deal with trust and estate law; the laws dealing with guardianship and disability; federal and state taxation law; and the law relating to public benefits both at the state and federal levels. As you can see, this is not the type of law that is practiced directly out of law school. It is necessary for an elder law attorney to master multiple disciplines before he or she can deliver this continuum of services to a client. It takes years to develop the skills. 3 Phases of Life With regard to transitioning from maturing years to senior years, it must be understood that clients’ estate planning needs must deal with the three phases of life. The three phases — which can be further examined with The GAP Illustration Tool© shown on our website — are as follows: Maturing Years, Senior Years, Post-Death Years. In elder law, we are trying to seamlessly provide solutions during your maturing that will carry over into our senior years to accomplish maximum of service delivery and minimization of cost. Finally, in the post-death years, estate, trust and probate administration must be dealt with. Minimization of cost of care With regard to the maximization of services, the elder law attorney needs to understand what tools are available to help clients transition from maturing years to senior years and create strategies and tools that will allow that transitioning to take effect at the minimum possible cost. Factors minimizing cost include the procurement of long-term care insurance through qualified long-term care insurance sales representatives; reliance on self-funding to some extent; and reliance on Medicare, Medicaid, VA benefits or federal tax benefits. One who can master the handling of all of the above disciplines seamlessly can consider himself or herself an elder law attorney. When do you need of an elder law attorney? In order to answer this question, it is necessary to understand this basic fact: During our senior years, the cost of long-term care delivered in intermediate and skilled care facilities can range from $6,500 to $10,000 per month. How do I pay for the cost of care? It is necessary to understand that there are only three ways to pay for the cost of this care: long-term care insurance, out of one’s own pocket, or through the Medicaid program. It also should be noted that the cost of care in independent and assisted living facilities can range from $3,500 to $7,500 per month. Again, this lesser level of care can be paid for in only three ways: long-term care insurance, out of one’s own pocket, or through the Medicaid (and possibly VA benefit programs processes, this option being available only to qualified veterans). Medicaid and VA benefits. Are they available? Since most of our clients don’t have long-term care insurance, that leaves only out-of-pocket expenditures and Medicaid and VA benefits to rely on (with the exception of Medicare, which provides for long-term care during rehabilitation — but only for a maximum of 120 days). With this backdrop in mind, it is useful to remember that both Medicaid and VA benefits are based on need. In other words, there are health, asset and income limitations that must be satisfied before Medicare, Medicaid or VA benefits are allowable. Legal advance planning or not Therefore, before individuals can determine whether it is time for them to apply for needs-based programs such as Medicaid or VA benefits, it is necessary to determine whether these benefits should be applied for with or without legal planning. If there are minimal assets and the health requirements are met, quite often not much legal planning needs to be done to qualify for these care programs. Keep in mind, it is always useful to have advance directives and a will or trust that deals with the disposition of any assets or possessions left after death. Minimal legal planning may be involved. However, if there are any significant assets that exist while seeking to qualify for these needs-based programs, it is essential that there be legal planning before submission of an application for these benefits. Benefits of legal preplanning The type of legal planning that is done prior to application for the benefits can fall into several areas. They can include the creation of an asset protection plan; the revision of traditional estate planning documents to senior estate planning documents; the creation of powers of attorney that have built in to them the authorization for further long-term care planning for senior citizen-taxpayers in the event they are unable to continue planning for themselves; the creation of asset protection tools and strategies; and the implementation of these tools and strategies with subsequent funding of such tools and strategies. Senior estate planning Finally, senior estate planning is completed using documents and legal tools that are quite different from those used in traditional estate planning. It is only with them that applications can be submitted to qualify for any available federal or state governmental benefits. Conclusion So the question of whether you need an elder law attorney or not turns on your understanding of what an elder law attorney does, and then determining whether the attorney you are considering can fulfill all the needs described above. This, of course, is in addition to other needs that space does not permit me to describe in this Elder Law Update. If you want to know what elder law attorneys are continuing to do for their clients and why these clients need them so desperately, please continue to read our column. In future issues, we will describe some of the strategies and benefits that we can create and have created for our senior citizen-taxpayers clients.
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The New 2011 Illinois Power of Attorney Act

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July 27, 2011

- Elder Law Articles

  • How does it fit into your senior estate planning and elder law needs?
  • How does it fit into your asset protection for long-term care?
  • Comments on the new law and forms
Introduction. In 2011 the Illinois legislature created major changes to the power of attorney act and these changes took effect on July 1, 2011. There are two types of powers of attorney – healthcare and property. Both types of powers of attorney are written instructions that enable you to transfer decision-making authority from you (the principal) to a family member or friend, the agent under particular circumstances. Healthcare powers cover medical decisions both during life and an end of life, as well as decisions about housing arrangements food, etc. Property powers are about money, payment of bills, real estate, asset protection, investments and tax matters. Powers of attorney are very important because when they are drafted properly they are an alternative to adult guardianship proceedings. We have been able to utilize these documents since 1987, and they are very important because they are an alternative to guardianship proceeding. Powers of attorney can survive periods of disability; that is why they are referred to as “durable” powers. There are many new changes to the powers of attorney starting July 1, 2011. Where do powers of attorney fit in your “Senior” Estate Planning? Powers of attorney for both health care and property are probably the single most important estate plan documents you can have. Without powers of attorney there is no one who can act for you in health or property related matters without obtaining a guardianship, which requires a hearing in the probate court. Guardianship is expensive, time-consuming, and can often be avoided. Our recommendation is that the Healthcare Power be the base document for your healthcare decisions, while the Property Power should allow for the creation of further senior estate plan documents and long-term care planning strategies. How do powers of attorney help with Asset Protection Planning for Long-Term Care? Without powers of attorney for property is sometimes very difficult to accomplish repositioning and transfers of assets that qualify seniors for available governmental benefits, Medicaid, VA benefits and other related areas. While power of attorney has many components, the gifting power in a power of attorney for property is probably the single most power powerful tool that can be added to the power of attorney. However as powerful as this tool is it can be a source of abuse if not adequately described, administered, and monitored. But not make no mistake about it without the ability transfer assets, it is impossible to accomplish many asset protection measures for long-term care in our senior years. Elder law attorneys differ from estate planning attorneys in the types of powers of attorney that they draft. While both attorneys used powers of attorney for property and healthcare, is the elder law attorneys that insert additional special provisions that will allow repositioning of assets, qualification for governmental benefits, and outright gifting to accomplish Medicaid and VA qualification. If long-term care is a concern for you as you move from your maturing years to your senior years, then you and your loved ones should seek out an elder law attorney to prepare a power of attorney that not only meets the requirements of the 2011 Act, but also goes beyond the requirements and creates flexibility and power that will allow you qualification for governmental benefits and eligibility for long-term care. Comments on the new law and forms-New changes for both the property and health power In General. There are some changes in the new act that affect both the power of attorney for healthcare and the power of attorney for property. The body of the forms has been changed somewhat and penalties have increased and expanded for agents who cause harm to the principal they have been asked to protect. New forms have been created for agents to accept the authority that is been given to them by the principal. Guidance has also been provided about powers of attorney created and executed prior to the new law. There are also directions about what happens when non-statutory powers are executed, as well as powers executed outside of the state of Illinois and how under limited circumstances co-agents can make decisions in non-statutory powers of attorney. Some of the new changes affect both the healthcare and property power of attorney and there are new definitions. No Duty to Act. As under the prior Illinois power of attorney law, a nominated agent has no duty to act. However, the new power of attorney act indicates that if the agent does act, the new standard of care requires that the agent act in good faith for the benefit of the principal using due care competence and diligence. Keep records. The new law requires that an agent is required to keep a record of all receipts, disbursements and significant actions that he or she takes on behalf of the principal. The agent shall make copies of these records available to certain important persons including the principal, guardians and other fiduciaries of the principal, even after the death of the principal. In Court. The new law provides that any proceeding regarding the power of attorney should be filed in the county where a Guardian is appointed, or if there is no Guardian, then filing should be in the county where the agent or principal resides or where the principal owns real estate. The new act provides that upon the appropriate court petition, if the court makes a finding that the principal lacks either the capacity to control or the capacity to revoke the agency, then the court may construe the power of attorney, review the agent’s conduct and grant appropriate relief if necessary. There is a list in the statute of interested persons who may bring such a petition. Damages. There are new rules that allow the assessment of damages against the agent individually and the damages can include the amount necessary to restore the value of the principal’s property to where it would have been if the agent did not commit a violation. New Acceptance of Office Form. In the new 2011 power of attorney law, there also is a new form that is the agent’s certification and acceptance of authority. This is available so that third parties working with the agent can have the agent provide this form to establish the authenticity of the power of attorney and also to establish that the agent has agreed to undertake the duties set forth under the power of attorney. Agent Liability. The new law provides a provision for the agent’s liability. An agent is not liable for the bad acts of a prior agent unless he or she participates in such an act or hides it from disclosure to the principal. An agent who is aware of a breach or imminent breach must notify the principal. If the principal is incapacitated, the agent must take other action to safeguard the principal’s best interests. Co- Agents? The concept of co-agents always has been a problem under Illinois law for powers of attorney. Co-agents are again prohibited under the 2011 law. Appointment of co-agents causes the power of attorney to be deemed in the non-statutory form rather than the statutory power of attorney category. There are some rules for situations where despite the prohibition, co-agents exist. Statutory and Non–Statutory Forms. As under the prior Illinois power of attorney act, a principal does not have to create a power of attorney that is a statutory power of attorney. Rather, the principal may create a non-statutory power of attorney. It is my opinion that the statutory short form is more readily recognize and therefore more useful. However, non-statutory powers often are executed, and when they are, they must have four (4) minimum requirements: • the power of attorney must be executed by the principal, • the power must designate the agent and the agents powers, • the power must be signed by at least one witness to the principal signature, and • the power must indicate that the principal has acknowledged his or her signature before a notary. In order for the power to be a statutory power, it must contain the following: • notice to the individual signing the document, • the statutory short form itself, • the notice to the agent, and • a notarized form of acknowledgment. Other States POA’s. The new act tries to create some validity to powers of attorney that were executed before the new act or are executed outside of the state of Illinois. Generally speaking, if the power of attorney complies with the law where it was executed, or if it complies with Illinois law, or the law where the principal is domiciled, or if it complies with the law where the agent is domiciled, it is valid and Illinois. Specific provisions relating to the “Property” power of attorney. In General. Under the new power of attorney act of 2011, the explanation of powers that used to be attached to the form is no longer required to be attached. It is instead incorporated by reference to those rules. 3 Parts. The new property power has three major parts: • notice to the individual signing the document, • the body of the form, and • the instructions to the agent. There are also new requirements regarding the size of the font, making it easier for the elderly person to read. The notice to the principal must meet these requirements and there is a place for the principal to initial that he or she received the notice. If the principal does not initial the notice, however, it does not invalidate the document. There are also some requirements for bold formatting. Powers. Principals have the ability to add and restrict the agent’s powers. As in the prior law, gifts from the principal’s estate are prohibited unless the principal grants the authority for the agent to make them. Specificity should be provided with the type and amount of gift in order to make this revision more useful. Compensation. As in prior law, there is a provision for compensation for the agent for his or her time and reimbursement of outside costs. Successor Agents. There is a provision in the new law for appointment of successor agents, just as there were in prior law. Witnesses. One new provision worth noting is that the list of people who are not qualified to act as a witness on the power is now built into the witness attestation clause. Under the new law the following people cannot witness: • the attending physician or mental health service provider, or a relative of the physician or provider, • the owner or operator or relative of the owner or operator of a healthcare facility in which the principal is a resident, or, • a parent, sibling, descendant or any spouse of such parent, sibling or descendant of either the principal or any agent or successor agent under the caregiving power whether such relationship is by blood, marriage or adoption; or an agent or successor agent under the foregoing power of attorney. In the case of the healthcare power of attorney, the term “healthcare facility operator” extends to directors and executive officers of an operator that is a corporate entity but not to other employees of the operator. In the case of a power of attorney for property, only the owner or operator, or relative of the owner or operator is prohibited from witnessing. Preparer Info. The new provision requires that the preparer of the power of attorney must disclose his or her name, address and telephone number. Notice to Agent. Finally, with regard to the property agent, there is a notice to the property agent. It contains a list of directives and restrictions. The “Healthcare” power of attorney In General. The healthcare power of attorney is a set of instructions were the principal transfers decision-making authority to an agent. The healthcare power of attorney has instructions about day-to-day personal care and end-of-life medical decisions. There are also provisions that can be inserted about anatomical gifts, autopsy and disposition of remains. Definitions. There are a number of definitions in the healthcare power. New in the 2011 act are definitions created for the terms incurable or irreversible condition, permanent unconsciousness, and terminal condition. We discuss this below. 2 Parts. There are two major parts to the statutory short form of healthcare power of attorney: the notice to the individual signing the document and the body of the document. It lacks a notice to healthcare agent (that the property power of attorney has for the property agent). This is a stark departure between the two powers of attorney. Combined Powers. The new law allows that the two powers, property and healthcare, can be combined into one document. This is not recommended however, because, the document will be very voluminous and disclose certain information to certain providers that are irrelevant. Successor Agents. The new healthcare power also provides for the principal to appoint successor agents. Acceptance of Office. Certifications of acceptance of authority documents are included in the healthcare power as well. Body Part Gifts. Anatomical gifts are authorized but if the principal does not select one of the three choices, the presumption is that no anatomical gifts are authorized. HIPPA Weighs In. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is incorporated specifically into the new healthcare power of attorney of 2011. The agent under the healthcare power of attorney is deemed to be the personal representative for HIPAA purposes to allow immediate access to medical records after the power of attorney for healthcare is executed. This applies even if the agent’s powers are springing, meaning they begin at a date later than the execution date. End of Life Decisions. Under the 2011 act end of life directives are addressed as in the prior law. The first directive is unchanged and retains the benefits versus burdens analysis. That provision indicates that the agent will not prolong the life of the principal if the benefits of the treatment are outweighed by the burdens of the treatment. This gives the agent broadest authority. The second directive provides evaluations for the agent to take under consideration prior to making the decision to disconnect. These evaluations include permanent unconsciousness, incurable or irreversible condition and terminal condition. These are defined terms in the act. The third directive is to prolong the principal’s life, in accordance with “reasonable medical standards”. End and Begin. Under the 2011 act the healthcare agent’s powers end at the death of the principal. Unless otherwise provided, the agent’s powers begin on execution. Execution. With regard to execution, one witness is required for the healthcare power of attorney.  the law provides a list of people who cannot act as witness, as discussed earlier. Preparer. The name and address of the person that has prepared the healthcare power of attorney is optional. Statutory and Non- Statutory Forms. As with the power of attorney for property, individuals do not have to use the statutory form.  You can use the non-statutory healthcare form.  Requirements for the non-statutory form as as follows:
  • It must be executed by the principal,
  • It must designate the agent and the agent’s powers, and
  • It requires the signature of witness.
Keep Records. Like the property power, the agent under a health power should maintain records of doctor’s appointments, dates, diagnoses, and related issues. Conclusion Changes to the power of attorney act were in response to what was perceived by some as financial exploitation of the elderly in an attempt to close loopholes. Improvements have been made. However, the circumstances are not perfect. For instance, nominated agents are still not required to act. If an agent chooses to act, he or she must do so in a way in that is competent and capable. We hope that the result of this act will be that more people understand and obtain powers of attorney.
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Update on Medicaid (DRA) rule changes in Illinois

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April 9, 2011

- Blog, Elder Law Articles

This update is regarding the development of the changes in the Illinois Medicaid rules so that the state of Illinois may come into compliance with the federal Deficit Reduction Act of 2005 (DRA). The latest word is that the next Joint Committee on Administrative Rules (JCAR) meeting is scheduled for Tuesday, April 12 at 8:00 AM in Springfield. At that meeting it is possible that members of JCAR may accept, object in whole or in part or prohibit the adoption of the new rulemaking. There are other variations on these choices as well. It is unknown what action JCAR will take at this meeting so we will have to wait and see what happens on Tuesday. Once the meeting is over we will provide you with an update. These revisions to the Medicaid rules as it applies to long-term care and estate and healthcare planning for our seniors and our disabled population will have sweeping impact. The rules will be very complex, but we will strive to make them understandable for our clients and readers. The elder law attorneys in our Rosemont-Ohare Area office, are advising our clients in Chicago and the surrounding metropolitan areas as to the best way to deal with the forthcoming massive rule changes. We have the peace of mind of our clients in our mind at all times. We know that the greatest threat to the financial security of most middle class Americans is the devastating financial cost of long term care. Our clients know that we as elder law attorneys will be prepared to provide them with safe advice, guidance and the implementation of many estate, disability and long term care planning tools and methods. The attorneys and paralegals of The Law Offices of Anthony B. Ferraro, LLC, are educated, trained and dedicated about the use of the best legal and Illinois Medicaid regulation-compliant options and legal strategies available for the safe and reliable Medicaid eligibility of our medically needy senior, aging and ill clients. Aging seniors rely on the fact that we continually refine and improve our legal relief measures and solutions. We have long term vision for the legal protection of their hard earned assets and income and that we improve and sometimes even solve the “cost of care dilemmas” that our needy clients face in their senior years, and also those of their ill spouses or disabled loved ones who need to become eligible for healthcare assistance and long term care assistance. Anthony B. Ferraro Attorney-CPA
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Update on Elder Law issues

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March 19, 2011

- Blog, Elder Law Articles

The first issue that I would like to discuss is is the fact that on July 1 of 2011 Illinois will have a new Illinois statutory short form power of attorney for property and also a new Illinois statutory short form power of attorney for healthcare. These changes brought about by changes to the Illinois power of attorney act in 2010 are welcome and will help provide clarity for our clients. Second , as we have discussed in prior announcements, Illinois is about to undergo changes to its Medicaid laws related to the payment of long-term care. These changes are being made by the state of Illinois in order to come into compliance with the federal Deficit Reduction Act of 2005 (DRA). Thus far the state has provided proposed rules in August of 2010 and has issued a second notice revising the originally proposed rules during February of 2011. State officials have met and conferred with interested groups and the legislative committee authorized to review rules for the state of Illinois (known in Illinois as “JCAR”). However as of this writing there has been no adoption of the final version of the rules. Once those final rules are known we will make entries describing the impact of these rules on our clients, colleagues and readership. Stay tuned.
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Illinois Medicaid Rules for Nursing Home Coverage

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December 9, 2010

- Blog, Elder Law Articles

New Medicaid rules are coming soon to a state near you. By February 9, 2011, the State of Illinois is expected to adopt the Deficit Reduction Act of 2005, as amended by federal changes in 2006. Implementation is anticipated by next year. The time frame, however, is not set in stone. Discussions between the Elder Law Bar and state officials are ongoing, and I have had the privilege of participating in them. Representatives of the state have graciously solicited feedback from elder care experts like myself, in order to analyze various aspects of the new rules and their consequences, but we have yet to determine exactly how they will be implemented. Issues we are still discussing pertain to retroactivity, hardship waivers, and partial returns. When more concrete information becomes available about how the new rules will be implemented, we will certainly update you. In the meantime, here are a few thoughts about elder law and long-term care planning: First, if you are physically and financially able, we recommend you obtain long-term care insurance. Long-term care insurance is the first line of defense for protecting assets, especially for the middle class in our country. Second, please be aware that traditional estate planning is not the same as long-term care planning. Estate planning deals with what happens upon your death, or in certain cases, disability. By contrast, long-term care planning prepares you to manage the costs of chronic illness and the sophisticated care for many years it often requires. The tools and objectives of long-term care planning are different than in traditional estate planning. Don’t confuse the two! Finally, do not underestimate the value of proactive planning. While you still have plenty of time, take advantage of it! When we are faced with an urgent trigger, like sudden illness, we are compelled to engage in crisis planning. While crisis planning can potentially save substantial amounts of your assets, proactive planning is ideal. Proactive long-term care planning can turn your desirable objectives for your hard-earned assets into a reality. Don’t wait to get started! During our fast-paced lives, the holidays provide a unique opportunity to share time with family. Investing some of that family time in a conversation about long-term care planning will reap the best rewards you could ask for: preservation of your wealth and your peace of mind. Happy Holidays!
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Elder Law Update At Large Edition Aug 2010 Vol II

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August 17, 2010

- Elder Law Articles, Uncategorized

  A NEW MINEFIELD FOR SENIORS Illinois’ Proposed New Medicaid Rules for Long Term Care             On August 3rd, we were informed that Illinois Department of Human Services Director Julia Hamos had signed proposed rule changes for Medicaid eligibility in the State of Illinois.              The rules were published in the Illinois Register on August 13th.             The proposed rules will have a tremendous impact on senior citizens and disabled persons seeking Medicaid coverage for long term care.             If any individuals or organizations wish to submit written comments or testify at the September 13th public hearings described below, they should contact our offices at 847-292-1220.  Any effort to inform state officials about the public’s opinion of these new rules will possibly result in the rules being finalized in a way that is fair for our citizens.             Public hearing requests must be received by the Illinois Department of Human Services within 14 days of publication.  There will be a 45 day public comment period and public hearings are scheduled to commence on September 13, 2010 at 9:00am at the Michael Bilandic Building, 160 N. Clark St., Chicago, Illinois, Room 500.             As I have explained in prior newsletters, we have expected the proposed rules to be forthcoming for a substantial period of time.  On February 8, 2006, President Bush signed the federal Deficit Reduction Act (DRA).  The proposed Illinois rules that were published on August 13th are being proposed by Illinois to implement, in part, the Federal DRA.             In summary, here is a timeline for upcoming DRA matters in Illinois:
  • August 2, 2010              Signing Date
  • August 13, 2010            Publication Date
  • August 27, 2010            Deadline for public hearing requests for groups of 100, or 25 individuals
  • September 13, 2010      Public Hearing
  • September 27, 2010      Deadline for written comments
            The rule changes are numerous and complex.  Below are just a few of the changes.  I hope this will help you understand the impact of these changes: 1)     Medicaid applicants will be subject to a five year lookback period.  Previously, the look back was three years (36 months).  Under the proposed rules, all applicants for Medicaid coverage for long term care under either the community care and the in-home service programs, the supportive living program, or a skilled nursing program, will be required to produce accounting and documentation for all financial transactions during the five years prior to the date of the application.  This is, in effect, an onerous 5 year audit. 2)     Start date of penalized transfers made harsher.  Up until now in Illinois, the penalty period began at the time the transfer was made. Under the new rule the penalty period for non-allowable transfers will commence only when the applicant is eligible for Medicaid benefits (but for the penalty period in question).   This means commencing the penalty period only when the person is institutionalized and has applied for Medicaid.  This will have a disastrous consequence and negatively impact senior citizens in nursing facilities or SLF’s and those waiting to be admitted if they have made any transfers of assets during the past 5 years.  For example, a senior with dementia who makes withdrawals totaling $50,000 from her savings account 14 months prior to the Medicaid application will be ineligible for Medicaid long term care benefits for 10 or more months following the month in which she applies for Medicaid.  Where will that money come from to cover her through that ten month penalty at such a late date in her life? 3)     Partial returns of prior unallowable transfers are not permitted.  This means that if a senior citizen grandmother gave away $50,000 to a grandchild so that the grandchild could go to college, such gift could result in a ten month penalty.  If the child was able to give back $49,000, the penalty period would not be reduced because the proposed law requires that the entire $50,000 be returned.  What if only $49,000 can be returned? What happens to the generous and helpful grandmother if there is no commensurate penalty reduction? 4)     $500,000 limit on home equity that is exempt.  Prior to the proposed rules, there was no limit on the equity of property used as a principal residence.  Thus, a Medicaid applicant’s principal residence was an exempt resource regardless of value.  The proposed rules impose a $500,000 limit on the exempt value of a principal residence when the owner is institutionalized or residing in a nursing home.  States are given an option of increasing the level of exemption to $750,000 under federal law. Final note: There are other changes, such as changes to annuities, spousal refusal to disclose assets, accumulation of gift penalties etc. that will be onerous for many of our senior and disabled citizens. In our forthcoming Elder Law Updates, we will provide you with more information about the rules and what can be done to deal with these new rules. If additional information is desired, please don’t hesitate to contact our offices at 847-292-1220. Elder Law & Long Term Care Planning Attorneys The “3 Phase” Lawyers Legal Counsel Assisting You in the 3 Phases of Your Life: –           Maturing Years – Will, Trust, Taxes, and Asset Protection  –           Senior Years – Long Term Care: Pre-Planning and Crisis Planning –           Post Death Years – Estate, Probate, and Trust Administration “Educate to Motivate” This communication is advertising material.  This is not intended to be, and cannot be, used as legal advice. Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764 Rosemont, IL 60018 PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com  Email:  abferraro@abferrarolaw.com NOTE: The information contained in this message is confidential and may be protected by the attorney-client privilege and/or the work product doctrine.  If you have received this electronic message in error, please reply to the sender and destroy this message. Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service. The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material.  If the context requires, please consider this letter and the enclosed literature to be Advertising Materials. To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice.  You should never attempt Medicaid planning, Estate Planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.
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Elder Law Update At Large Edition Aug 2010 Vol I

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August 12, 2010

- Elder Law Articles, Uncategorized

A New Illinois Bill To Protect Seniors From Financial Elder Abuse Please note that Governor Quinn signed a bill that was designed to protect seniors from financial elder abuse.  The bill will be handled with the involvement of the Illinois Department of Aging and Illinois Department of Financial Professional Regulation which will establish standards and trainings for employees at financial institutions to keep on the lookout for financial exploitation of the elderly.  The new law is requiring financial institutions across the state to become more vigilant and on the lookout for matters pertaining to financial elder abuse of our senior citizens.  The bill requires reporting when abuse is suspected.  This is a step in the right direction.  Let’s hope that the implementation will allow this to be a useful tool in protecting the elderly.  Continuing Care Retirement Communities (CCRC) The Senate recently held hearings on matters pertaining to Continuing Care Retirement Communities (CCRCs).  The investigation dealt with matters pertaining to the current market conditions and some of the financial risk associated with residents in CCRCs.  Recently there have been some failures in CCRCs.  This places the financial investment and also the continuity of care for the resident seniors at risk.  The CCRCs are a good concept, but be sure you review the contract for your care thoroughly and do your due diligence early on. NEW FREE E-COURSES We invite you to sign up for one of our three FREE e-courses: Estate Plan Essentials Guide, Veteran’s Benefit Report, and Medicaid Nursing Home Guide.  After signing up for an e-course, a series of letters will be emailed to you which discuss our areas of practices and services we provide clients.  http://www.estateplanessentialsguide.com/ http://www.veteransbenefitreport.com/ http://www.medicaidnursinghomeguide.com/ Long Term Care Planning Attorneys The “3 Phase” Lawyers Legal Counsel Assisting You in the 3 Phases of Your Life: –           Maturing Years – Will, Trust, Taxes, and Asset Protection  –           Senior Years – Long Term Care: Pre-Planning and Crisis Planning –           Post Death Years – Estate, Probate, and Trust Administration “Educate to Motivate” This communication is advertising material.  This is not intended to be, and cannot be, used as legal advice. Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764 Rosemont, IL 60018 PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com  Email:  abferraro@abferrarolaw.com.   NOTE: The information contained in this message is confidential and may be protected by the attorney-client privilege and/or the work product doctrine.  If you have received this electronic message in error, please reply to the sender and destroy this message. Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service. The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material.  If the context requires, please consider this letter and the enclosed literature to be Advertising Materials. To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice.  You should never attempt Medicaid planning, Estate Planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.
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