Medi-Cal Planning: Special Needs Trusts

In last month’s blog entry we gave an overview of Medi-Cal planning and the factors one should consider when planning for Medi-Cal benefits. In this month’s blog entry we’ll cover Special Needs Trusts and how they can benefit a Medi-Cal recipient.

If the intended beneficiary of a trust is receiving Medi-Cal, SSI, or other governmental benefits, great care must be taken to structure the gift to the beneficiary in such a way that it does not disqualify the beneficiary from receiving continued assistance. Special Needs Trusts, which are sometimes called a “supplemental needs trust”, are trusts that are drafted carefully to ensure that a disabled beneficiary continues to be eligible for government benefits. In a Special Needs Trust, distributions from the trust are designed only to supplement, not supplant or replace, the benefits being received under the trust.

Special Needs Trusts require careful drafting. Distributions must be purely discretionary, with no obligation on the trustee to make mandatory payments to the beneficiary. Special Needs Trusts are often used to protect beneficiaries with permanent disabilities, such as Down’s syndrome, severe autism, or cerebral palsy. These trusts may also be used to shield funds recovered from personal injury litigation or workers’ compensation injuries from disqualifying the beneficiary from receiving Medi-Cal benefits.

The laws concerning Medi-Cal benefits are constantly changing, and it is important to seek the advice of an experienced elder law and estate planning attorney who is readily familiar with any developments in this area of law.

Thanks for reading our blog. If you have questions regarding Special Needs Trusts or would like to learn more about the advantages offered by this type of trust, contact the Casiano Law Firm.

Medi-Cal Planning-An Overview

In past blog entries we have discussed how estate planning documents such as trusts, durable financial powers of attorney and advance health care directives provide a plan in the event of future incapacity. At the Casiano Law Firm, we also focus on planning involving Medicare, Medi-Cal, Social Security, and supplemental and long-term care insurance policy issues as part of our comprehensive elder law representation. This month’s blog will focus on an overview of Medi-Cal planning.

What is Medi-Cal?

Medi-Cal is California’s version of the federal Medicaid program that provides additional health insurance for qualified individuals who are at least 65 years of age, blind, or disabled. Medi-Cal is often used to assist residents in skilled nursing facilities who have exhausted their Medicare skilled nursing home coverage. Medicare covers the first 20 days of skilled nursing home coverage, then requires a co-payment of $137.50 per day for days 21 through 100, conditioned on the patient showing improvement in his or her condition. After 100 days, the patient is converted to “private pay” status where the patient must pay the monthly expense, which averages about $6,300 per month. In contrast, Medi-Cal will continue to pay for skilled nursing home expenses indefinitely, regardless of whether or not the patient shows improvement.

Important Factors to Consider in Medi-Cal Planning

Medi-Cal planning requires a careful and thorough review of your assets, income, and estate planning documents to develop a plan tailored to your unique situation. A comprehensive Medi-Cal plan should consider three important factors:

• Eligibility planning for Medi-Cal benefits;
• Income planning to reduce or eliminate the monthly “share of cost” to be paid by the Medi-Cal beneficiary; and
• Estate recovery planning to reduce or eliminate the recovery of the amount of benefits paid out from the beneficiary’s estate.

Don’t Transfer or Give Away Assets

We are frequently asked by clients if they should simply give away their assets. Do not give away any assets or transfer title to your real property without first consulting with an experienced elder law attorney. Medi-Cal considers certain assets to be exempt for the purpose of determining eligibility, and a special petition or administrative hearing may be used to increase the standard eligibility limit, reduce or eliminate the co-payment, or eliminate Medi-Cal’s ability to recover for benefits paid out under some circumstances. Certain property transfers can have significant tax consequences, and improper transfers can result in the disqualification of a Medi-Cal beneficiary and a significant period of ineligibility for Medi-Cal benefits.

Consult an Experienced San Diego Elder Law Attorney

Medi-Cal regulations are frequently changing and this area of planning requires the assistance of experienced counsel familiar with both elder law and estate planning matters. If you have questions regarding Medi-Cal planning, contact the Casiano Law Firm for a free telephone consultation with an experienced San Diego elder law and estate planning attorney.

Financial Powers of Attorney

A financial power of attorney is a document that authorizes someone (referred to as your “agent”) to act on your behalf. A financial power of attorney may be limited to a specific term or give your agent the authority to take only a certain specified action on your behalf (such as the power to complete a real estate transaction while you are away on vacation), or it may convey broad authority to your agent to act on your behalf. A financial power of attorney may be “durable” in nature, meaning it is not affected by your subsequent incapacity. It may also be “springing”, meaning it does not take affect until the occurrence of a specified event, such as a determination that you are no longer capable of managing your own financial affairs, or it may be immediately effective upon the signing of the document.

Do you need a financial power of attorney?

Many clients ask why they need a financial power of attorney. They assume that their spouse automatically has the authority to act on their behalf in the event they become incapacitated. However, this simply isn’t the case-your spouse will need to have the authority conveyed under a power of attorney, or be appointed as your conservator, in order to take certain actions on your behalf if you are incapacitated. Other clients assume that if they have a trust, they don’t need a financial power of attorney, since if they become incapacitated, their successor trustee will manage the assets held in the trust. While this is true, there are many actions that the successor trustee is not authorized to take on your behalf if you are incapacitated, such as signing your tax return, dealing with Social Security, Medicare, insurance, etc., and handling assets which are not held in the trust. For this reason, a financial power of attorney is advisable even if you hold all of your assets in your trust.

Who should you name as agent?

Careful consideration should be given to your choice of agent. Financial powers of attorney are important legal documents that can convey important powers to the named agent. You will want to name someone who is capable of managing money, who will make sound financial decisions, and who you trust will have your best interests in mind. Typically, if you have a trust, you will name the successor trustee of your trust as your agent on your financial power of attorney. Consult your estate planning attorney for further guidance on selecting an agent for your financial power of attorney.

Thanks for reading our blog. If you have questions, or need assistance with estate planning, contact the Casiano Law Firm for a complimentary telephone consultation with an experienced San Diego estate planning attorney.

Estate Planning for the Possibility of Future IncapacityEstate Planning for the Possibility of Future Incapacity

In the last two blog entries we discussed the importance of planning for the possibility of future incapacity. While some people may think this is a topic that impacts only the elderly, incapacity can strike anyone at any time, due to an accident, injury, or illness. In this month’s blog entry we will discuss how the use of a living trust and a durable financial power of attorney provide protection and a plan in the event of incapacity.

Revocable Living Trusts
A living trust is a document which you create during your lifetime which allows you to specify who will manage the assets of the trust (the “successor trustee”) and who will receive the assets of the trust (the “beneficiaries”) after your death. During your lifetime, you are typically both the trustee and the beneficiary of the trust, ensuring that you still have complete use and control over your assets. As the name implies, you can revoke the trust or make changes to the provisions of the trust during your lifetime. In the event you become incapacitated, your successor trustee will manage the trust assets on your behalf, often avoiding the necessity for a conservatorship proceeding, which we discussed in our July blog entry.

Durable Powers of Attorney for Financial Matters
A durable power of attorney for financial matters is a document in which you specify who will make financial decisions on your behalf in the event you become incapacitated (your “agent”). This document may be immediately effective upon execution, or it may be springing, meaning it becomes effective only upon your incapacity. The document is “durable” in nature in that it is not affected by your subsequent incapacity-the powers given to your agent will continue despite your loss of capacity. Even if all of your assets are held in your living trust, and are therefore under the management of your successor trustee if you become incapacitated, you will need a durable power of attorney for financial matters to give your agent the authority to sign your tax returns, deal with your insurance company, and handle other financial matters on your behalf.

Estate Planning Issues Require Experienced Legal Representation
Comprehensive estate planning includes careful consideration of various contingencies, such as the possibility of future incapacity. If you need assistance with estate planning, contact the Casiano Law Firm for a complimentary telephone consultation with an experienced San Diego elder law and estate planning attorney.

Advance Health Care Directives

An Advance Health Care Directive (AHCD) is a document that allows you to specify your health care preferences and appoint someone to carry out your wishes for you in the event you are incapacitated or otherwise unable to communicate. An AHCD allows you to inform your doctor, family and friends of your preferences regarding your medical care and treatment, including end-of-life decisions. By specifying your wishes in advance, you ensure the quality of life that is important to you and spare your loved ones from having to guess what your preferences would be, or force them to make difficult decisions at a time when they are emotionally distraught. If at some point you become incapacitated, a valid AHCD can eliminate the need for a conservator to be appointed to make decisions regarding your care and medical treatment.

California law requires certain provisions to be included in your AHCD and certain formalities to be followed in the execution of an AHCD, but there is no one single form required for a valid AHCD. An AHCD should designate a person to carry out your wishes (this person is referred to as your "agent") and may include provisions:

• Regarding life support or other life-prolonging measures
  
• Authorizing an autopsy
  
• Directing disposition of remains
  
• Nominating a conservator
  
• Naming a primary physician
  
• Specifying your wishes regarding organ donation
  

AHCD Replaces Earlier Forms of Health Care Directives
Effective July 1, 2000, California consolidated various earlier forms used to designate health care preferences into the AHCD; earlier forms of health care directives included the Durable Power of Attorney for Health Care, Natural Death Act Declaration, and the Directive to Physicians. The AHCD is sometimes referred to as a "Living Will" in other states.

If you have a valid Durable Power of Attorney for Health Care or other valid health care directive executed prior to July 1, 2000, the document can remain in effect. However, you may want to update your health care directive to specifically refer to the Health Insurance Portability and Accountability Act (HIPAA), which regulates the use and disclosure of certain protected health information by doctors, hospitals, and other health care providers. Some medical providers have misinterpreted the privacy rules of HIPAA and have withheld the release of patient information from the patient's family. Although the California Probate Code does not require the AHCD to specifically refer to HIPAA, many estate planning practitioners include a provision releasing the medical provider from liability under HIPAA for disclosure of protected information to the patient's health care agent and/or family.

Estate Planning Issues Require Experienced Legal Representation
If you need assistance with estate planning, contact the Casiano Law Firm for a complimentary telephone consultation with an experienced San Diego elder law and estate planning attorney.

Planning for Potential Incapacity

When most people think of estate planning, they think about who will manage their estate and how their assets will be distributed and divided upon their death. However, a comprehensive estate plan does more than just provide a plan in case of death; it also provides a plan in case you become incapacitated or disabled, whether as a result of an illness, injury or other event. Over the course of the next few blog entries, we will cover some of the estate planning documents that can be used to provide a plan for possible incapacity, including the use of advance health care directives, general durable powers of attorney, and trusts. In this month’s blog we will discuss conservatorships and how the necessity for a conservatorship proceeding can be avoided through advance estate planning.

Why Plan for Incapacity?

Statistics show that people are living longer, but at some point many people lose the ability to make financial and/or medical decisions on their own behalf. Our office is frequently contacted by family members or friends who are concerned about the well-being of a loved one. Sometimes the person has become incapacitated as a result of a stroke or an illness, such as Alzheimer’s or another form of dementia. In other instances a young person has been incapacitated as a result of an accident, head injury, or even an assault. Incapacity can strike at any time and at any age.

What Happens If You Don’t Plan Ahead?

Unfortunately, with many of the inquiries we receive, the incapacitated person has not executed an advance health care directive (or its predecessor, the durable power of attorney for health care), nor have they executed a general durable power of attorney for financial matters. Since the person is now incapacitated, they lack the legal capacity necessary to properly execute these estate planning documents. The only option at this point is to petition the court for conservatorship of the person and/or conservatorship of the estate.

What is a Conservatorship?

A conservatorship a court proceeding where a judge appoints a person or entity (referred to as the “conservator”) to handle the care and/or finances of a person who is determined by the judge to be unable to care for themselves or their finances (this person is referred to as the “conservatee”). There are two types of conservatorship proceedings in California: 1) conservatorship of the person; and 2) conservatorship of the estate.

A conservator of the person arranges for the conservatee’s care and makes decisions regarding the conservatee’s housing, health care, food, clothing, housekeeping, transportation and recreation. A conservator of the estate is in charge of handling the conservatee’s finances. The conservator of the estate makes an inventory of all of the conservatee’s assets, ensures that the conservatee’s taxes are filed and bills are paid, makes a plan to make certain the conservatee’s financial needs are met, invests assets, and maintains financial records. It is permissible and often common for the conservator of the estate to be the same individual or entity as the conservator of the person.

The imposition of a conservatorship removes a person’s right to make certain decisions for himself or herself; it is viewed as an option of last resort and is only granted by the court when there are not any less restrictive alternatives available. Conservatorships are often criticized as being expensive, time-consuming, inflexible and cumbersome.

Seek Experienced Legal Representation

If you need assistance with estate planning or a conservatorship proceeding, contact the Casiano Law Firm for a complimentary telephone consultation with an experienced San Diego elder law and estate planning attorney.

California’s Expanding Financial Elder Abuse Laws

Over the past five years, California’s lawmakers have been increasing protections for elders, defined as California residents age 65 or over, including protections to address the growing problem of financial institution involvement in financial elder abuse.

Lawmakers enacted amendments to California’s elder abuse laws in the Financial Elder Abuse Reporting Act of 2005, which went into effect nearly three years ago. As of January 1, 2007, financial institutions, including banks and credit unions, as well as their employees, are required to report suspected incidents of financial elder abuse. The amendments also added civil fines ranging from $1,000 to $5,000 which may be levied against financial institutions if their employees fail to report abuse as required under the Act.

In 2008, lawmakers expanded elders’ rights again with the enactment of a California Senate Bill that expanded the definition of financial elder abuse to include situations where “undue influence” is used to misappropriate an elder’s property. The bill also expanded elders’ rights by making it easier for elders to prove that the misconduct meets the law's requirements that the taking be for a “wrongful use.”

California’s Current Definition of “Financial Elder Abuse”

As it is now defined, financial elder abuse in California occurs when: “a person takes, secretes, appropriates or retains real or personal property of an elder or dependent adult to a wrongful use or with intent to defraud, or both” or does so by the use of “undue influence,” including through the use of “an agreement, donative transfer, or testamentary bequest.” Assisting a person in committing prohibited conduct is also a violation of the law. (California Welfare & Institutions Code § 15610.30(a)-(c).)

If You Suspect Financial Abuse, We Can Help You

Financial elder abuse can take many forms, including overpaying for services such as home repairs, outright gifts of cash, telemarketing scams, or convincing an elder to invest in inappropriate or highly risky investments, such as annuities which yield little return to the elder, but pay high commission to the sales agent. If you suspect that you or a loved one has been a victim of financial elder abuse, contact The Casiano Law Firm for a confidential consultation.

Nursing Home Fined $80,000 in Patient’s Death

Homewood Care Center in San Jose was fined $80,000 and given a “AA citation”, the most severe penalty under California law, after a state investigation determined that a nurse’s failure to administer the Heimlich maneuver on a choking patient resulted in the patient’s death. According to a report by the Department of Health and Human Services, the patient was admitted to the care facility with a diagnosis of Alzheimer’s disease and dysphagia, or difficulty swallowing. The man was assessed as a high risk for aspiration (the entry of secretions into the trachea and lungs) due to difficulty of swallowing. The report also indicated that the man had a no-CPR order, meaning he did not want any cardiopulmonary resuscitation, however investigators concluded that a no-CPR order does not preclude abdominal thrusts, such as those performed during the Heimlich maneuver.

Patient Choked While Being Fed Dinner
On August 24, 2009, at 5:30 p.m., a certified nurse assistant was feeding the man a dinner of pureed food when he suddenly began coughing violently. Although staff members thought the man was choking on food, they did not attempt to perform abdominal thrusts to clear his airway. Investigators found the facility did not promptly call 911. Although staff members claimed they called 911 at 5:30 p.m., records indicated the call was placed at 5:49 p.m., a delay of 19 minutes. A police report indicated the man was dead when paramedics arrived.

Aftermath of this Tragedy
Following the death of the patient, a registered nurse who failed to implement emergency procedures was fired, and the director of nursing at the time of the incident was relieved of his duties.

When the state health department issues a citation or finds a deficiency, the care center must submit a plan of correction. After the plan is accepted and the health department completes a surprise inspection, the agency issues a fine or citation. Homewood submitted a plan of correction, which was accepted on March 11, 2010.

Nursing Home Owner’s Troubled History
Until January of this year, Homewood was owned by Jack Easterday, who is currently in prison for withholding $9.6 million in payroll taxes from employees’ checks and willfully failing to pay employment taxes. Easterday was the sole shareholder of Westline Medical Management, which owns Homewood and seven other nursing homes in California. Easterday resigned as a corporate officer of Westline in January and transferred his shares to an administrator. Easterday and Westline have a history of providing poor nursing home care. In 2007, two other facilities owned by Westline were each fined $100,000, the highest fine possible, for their role in the death of two patients.

If you or someone you know has been the victim of nursing home abuse or negligence, contact the Casiano Law Firm for a confidential consultation to discuss your case.

Murder and Financial Elder Abuse in Northern California Nursing Homes

Unfortunately, sometimes the very people who are responsible for the care of elders are the very same people who abuse them. Two alarming cases of elder abuse by caregivers made national headlines this past week. Both cases involved caregivers working in nursing homes in the San Francisco Bay Area; one case involved the deliberate murder of a patient, and the other involved financial elder abuse.

Daly City Nursing Home Assistant Murders Patient

A 37 year-old certified nursing home assistant, Maximo Hong Fajardo Jr., intentionally smothered 87 year-old Barbara McIver with a pillow in front of other patients and staff members. Fajardo had been a certified nursing home assistant for over ten years, but had been employed at the Convalescent Center Mission Street in Daly City, just south of San Francisco, for two weeks. After smothering McIver, Fajardo fled the nursing home and carjacked a car in an attempt to escape. He is currently being held on $10 million bail

Former Nursing Home Administrator Accused of Financial Abuse of Residents

In Berkeley, California, former assistant administrator of the Elmwood Nursing and Rehabilitation Center, Concepcion "Connie" Pinco Giron told her supervisor that Carnell Williams, a patient at the home, was being transferred to another facility. Giron then proceeded to move Williams into her own home, and began cashing Williams’ pension and social security checks. Giron is also accused of establishing bank accounts for five other patients and transferring funds from those accounts into her own bank account. Giron used the patients’ ATM cards and wrote checks to herself from their accounts.

Giron is currently being held in lieu of $365,000 bail and has been charged with multiple counts of elder abuse and theft from elder or dependent adults by a caretaker, kidnapping to commit another crime, and false imprisonment.

Unfortunately these are not isolated incidents. According to the San Francisco Examiner, one out of 20 elders in California will be the victim of neglect, psychological, physical or financial abuse this year. If you or someone you know has been the victim of nursing home abuse or negligence, contact the Casiano Law Firm for a confidential consultation to discuss your case.

Financial Elder Abuse Is a Growing Concern for California’s Growing Elderly Population

As the “boomer” generation ages, experts predict that the problem of financial elder abuse will boom as well. Incidents of elder abuse in California and across the nation are already becoming an issue of serious concern among lawmakers.

The California Department of Aging reports that by 2050, there will be 14.6 million Californians over the age of 60 and that between 2010 and 2020, there will be a 128% increase in the number of Californians in that age group. The report also states that San Diego County can expect a 96% increase in the number of residents over the age of 60 between 2010 and 2030.

Recent Headlines Highlight Financial Elder Abuse Problem

California news headlines are replete with recent incidents of financial elder abuse committed by financial institutions. Here are just a couple of examples of the egregious behavior that has been in the news recently. On February 4, the San Francisco Chronicle reported that a Bank of America customer service representative has been charged with stealing $61,000 from a 96-year-old woman after convincing her to allow him access to her accounts as her personal banker. On January 10, 2010, Investment News reported that a Financial Industry Regulatory Authority (FINRA) arbitration panel awarded a 95-year-old man $1.6 million after finding a Beverly Hills investment firm and two of its brokers guilty of self-dealing. The brokers convinced the man to leverage his equity in his home to make overly risky investments. (FINRA is an independent regulatory agency, empowered by the federal government to oversee securities and brokerage firms and protect investors.)

$2.6 in Annual Losses

According to a study released last year by the MetLife Mature Market Institute, the National Committee for the Prevention of Elder Abuse, and the Center for Gerontology at Virginia Polytechnic Institute and State University, financial elder abuse results in an annual loss of $2.6 billion. The study also found that that the people who commit the abuse are usually people in a position of trust, including family members and business professionals. Common types of financial elder abuse committed by business professionals included: false sales of and misrepresentations concerning stocks and other investments; and fraudulent banking practices including “account draining or siphoning.”

We Help Victims of Financial Elder Abuse

If you suspect that you or a loved one has been a victim of financial elder abuse, we can help you. Contact The Casiano Law Firm for a confidential consultation.