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The September issue of The Elder Law Update, a monthly e-newsletter full of the latest legal developments and other trends of vital interest to seniors and their advocates. Read on to learn about the duties required of a Personal Representative, the role annuities can play in your long term care planning, important steps a Medicare beneficiary can take to dispute a hospital discharge and more.
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Courts v. Agency for Health Care Administration
Courts, a 59 year old quadriplegic, enrolled in the State's waiver program in 2001. His plan of care called for 50 hours per week of companion care, plus 236 hours of companion care on an as needed basis. The as-needed care was used when Court's wife was away caring for her terminally ill father. This continued for almost 3 years until the state informed Courts that his care would be reduced to 42 hours per week and that the as needed care would be eliminated, also denying him an extra two weeks of as needed companion care. Courts appealed. On appeal, he argued the agency erred by refusing to provide the care without an adequate explanation for its policy change. At fair hearing, the hearing officer apparently ignored Court's medical evidence regarding necessity and ignored testimony that the care had been previously approved and provided; instead, the ALJ affirmed the denial finding that Court's 24-hour care was being used to allow Court's wife to attend to family matters not approved under the waiver. The record showed that Court's use of companion care services was essential to ensure his health and to prevent regression and/or a more costly placement. It also found that the agency's provision of this care from 2002 to 2005 was an application of agency policy and that the agency attempted to change its policy without explanation. The court found there were no changes in Medicaid law or regulations regarding the definition of companion care, so its denial of previously provided services was simply a change in policy. Prior precedent, interpreting Florida administrative law, held that a change in policy must be supported by expert testimony, documentary opinions or other appropriate evidence, or must be implemented through formal rule making. Since neither occurred and because the agency provided no explanation of the rule change even through the hearing stage, the case was reversed with instructions to reinstate the care plan providing 50 hours per week of companion care and 236 hours on an as-needed basis.
Courts v. Agency for Health Care Administration, Case No. 1D06-0012, 2007 Fla. App. LEXIS 11673 (Fla. Ct. App. 1st Dist. July 31, 2007).
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What is Required of a Personal Representative?
 Being the personal representative, also known in some states as the executor, of an estate is not a task to take lightly. A personal representative is the person responsible for managing the administration of a deceased individual's estate. Although the time and effort involved will vary with the size of the estate, even if you are the personal representative of a small estate you will have important duties that must be performed correctly or you may be liable to the estate or the beneficiaries.
The personal representative is either named in the will or if there is no will, appointed by the court. You do not have to accept the position of personal representative even if you are named in the will.
The average estate administration takes one year, though you won't need to work full time on it. Following are some of the duties you may have to perform as personal representative:
- Locate documents. If there is a will, but you don't already know where the will is or the will hasn't already been brought to court, you may need to find it among the deceased's belongings. If all you have is a copy of the will, you may need to get the original from the lawyer who drafted it. You will also need to get a copy of the death certificate.
- Hire an attorney. You are not required to hire an attorney, but mistakes can cost you money. You may be personally liable if something goes wrong with the estate or the payment of taxes. An attorney can help you make sure all the proper steps are taken and deadlines met.
- Apply for probate. If there is a will, the court will grant you letters testamentary. If there is no will, you will receive letters of administration. This will officially begin your work as the executor.
- Notify interested parties. Notify the beneficiaries of the will, if there is a will, as well as any potential heirs (such as children, siblings, or parents who may or may not be named in a will). In addition, you will have to place an advertisement for potential creditors in a newspaper near where the deceased lived.
- Manage the deceased's property. You will need to prepare a list of the deceased's assets and liabilities, and you may need to collect any property in the hands of other people. One of the executor's jobs is to protect the property from loss, so you will need to assure the property is kept safe. You will also need to hire an appraiser to find out how much any property is worth. In addition, if the estate includes a business, you may have to make sure the business continues to run.
- Pay valid claims by creditors. Once the creditors are determined, you will need to pay the deceased's debts from the estate's funds. The executor is not personally liable for deceased's debts. The estate usually pays any reasonable funeral expenses first. Other debts include probate and administration fees and taxes as well as any valid claims filed by creditors.
- File tax returns. You need to make sure the tax forms are filed within the time frame set under the law. Taxes will include estate taxes and income taxes.
- Distribute the assets to the beneficiaries. Once the creditors' claims are clear, the executor is responsible for making sure the beneficiaries get what they are entitled to under the will or under the law, if there is no will. You may be required to sell property in order to fulfill legacies in a will. In addition, you may have to set up any trusts required by the will.
- Keep accurate records. It is very important to keep accurate records of everything you do. You will need to create a final accounting, which the beneficiaries must review before the distribution of the estate can be finalized. The accounting should include any distributions and expenses as well as any income earned by the estate since the deceased died.
- File the final accounting with the court. Once the final accounting is approved by the beneficiaries and the court, the court will close the estate. File a final report with the court and close the estate.
All this can be a lot of work, but remember that the personal representative is entitled to compensation, subject to approval by the court. Keep in mind that the compensation is counted as income, so you will need to declare it on your income taxes.
For more information about estate administration, click here.
For a book on how to administer an estate, click here.
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 Among all the changes you must make when you move to a new state such as updating your driver's license and voter registration, don't forget to update your will. While your will should still be valid in the new state, there may be differences in the new state's laws that may make certain provisions of the will invalid. In addition, moving is a good excuse to consult an attorney to make sure your estate plan in general is up to date.
Property laws can vary from state to state. It is especially important to have your estate plan reviewed if you move from a common law state to a community property state (Arizona, California, Idaho, New Mexico, Louisiana, Washington, Nevada, Texas, Wisconsin, and Alaska) or vice versa. In a common law state each spouse's property is owned individually, while in a community property state, property acquired during the marriage is considered community property. In addition, states may have different rules about when co-owned property may pass to the surviving owner and when it may pass under the will.
Other things to consider are whether there is any language you can add to the will to make it easier to probate in the new state and whether your choice of executor still makes sense based on your new location. Other pieces of your estate plan may need updating as well. For example, the state may have different rules for powers of attorney or health care directives.
For more information on estate planning, click here. |
| BOOK REVIEW: The Driving Dilemma: The Complete Resource Guide for Older Drivers and Their Families
 Elizabeth Dugan, Ph.D. The Driving Dilemma: The Complete Resource Guide for Older Drivers and Their Families. New York, NY: Collins, 2006. 283 pages.
$11.66 from Amazon.com (click on book to order)
For the past 80 years or so, most U.S. communities have been built around the assumption that adults will drive to obtain the essentials of life, including the proverbial quart of milk. But as people age, driving can become more difficult and more dangerous. Given the essential role driving plays in our culture, questioning a loved one's ability to operate a car can be a hot-button issue.
In this book, Elizabeth Dugan, a researcher on geriatric issues, offers a comprehensive resource on improving the safety of an older driver or persuading one to relinquish the wheel, if need be.
As Dugan notes, driving requires healthy functioning in three key areas: vision, thinking and movement. A large section of the book is devoted to how to discuss the issue of driving with a loved one who may be showing deficits in one or more of these areas -- and how to discuss it without triggering an emotional crack-up that can be as devastating to a family as an actual accident. Dugan walks readers through the "motivational interviewing" approach, which has been used successfully to help many people change behavior. Useful sample dialogue scripts accompany the discussion.
Elsewhere, Dugan explains how to assess driving fitness, the medical conditions and prescription drugs that can affect driving, and how to report an unsafe driver (including a sample letter).
The book's second half is devoted to resources for further help. For example, you'll find each state's driving regulations, including the state's age-based renewal procedures, information on state driver rehabilitation and assessment programs, and national transportation resources.
Soon one in four drivers will be over age 65, and studies suggest that we'll outlive our ability to drive by nearly 10 years. This looming crisis would be far less acute and this book far less necessary -- if more communities offered realistic alternatives to driving. As things stand now, taking away a driver's license usually imposes a sentence of immobility or dependency on others. While this book will be helpful in the interim, the underlying solution to the "driving dilemma" is to fund alternatives to the automobile and to locate the off-ramp from our car-centered culture.
For more on aging drivers and the law, click here.
For more on confronting an aging and unsafe driver, click here.
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| Using Annuities for Long-Term Care Planning
 Insurance agents and financial institutions often advertise annuities as the perfect way to generate retirement income. While annuities can be a valuable retirement tool, if you are buying an annuity as part of a Medicaid planning strategy, you need to fully understand what you are getting. And whether an annuity makes sense as part of Medicaid planning may depend on whether you are married or single.
Historically, "immediate" annuities have been used as a Medicaid planning tool. In its simplest terms, an immediate annuity is a contract with an insurance company (or a private individual) under which the consumer pays the company a certain amount of money and the company sends the consumer a monthly check for the rest of his or her life. Purchasing an immediate annuity is a way for people with assets in excess of Medicaid's limits to turn the assets into an income stream while avoiding a penalty for transferring the assets. The Deficit Reduction Act of 2005 (DRA) changed the requirements for annuities, making it a little harder to do this. Under the DRA, an annuity must meet the following requirements in order to avoid a transfer penalty (for more information about transfer penalties, click here):
- The annuity must be irrevocable (meaning you can't cancel it)
- The annuity must be actuarially sound (which means the annuity cannot cover a term longer than the purchaser's life expectancy and the payments expected during the annuitant's life expectancy must at least equal the cost of the annuity)
- The payments must begin immediately (you cannot have deferred payments or a balloon payment)
- Unless there is a spouse or a minor or disabled child, the state must be named as the remainder beneficiary (the person or entity that gets any leftover money) up to the amount of Medicaid provided
Perhaps the best use of an annuity for Medicaid planning is for married couples, one of whom needs Medicaid-covered long-term care. An immediate annuity allows the couple to turn their excess assets into income for the Medicaid recipient's spouse. If a spouse purchases an annuity that meets the requirements under the DRA, he or she will receive the income from that annuity without having to contribute it to the Medicaid recipient's long-term care. But, as a result of a 2006 amendment to the DRA, the spouse will have to name the state as the remainder beneficiary for costs incurred by the Medicaid recipient as well as herself if she ever receives Medicaid. However, such repayment would only occur if she were to die before the guaranteed payments under the annuity had expired.
Annuities generally have been less useful as Medicaid planning devices for single individuals. For example, if a single individual purchases an annuity, the interest income from the annuity counts as income and will have to be paid to the nursing home. Then, once the purchaser dies, any remaining money in the annuity will first go to the state to pay any unpaid nursing home bills. If there is any left over, it will go to beneficiaries named by the purchaser.
However, in some states immediate annuities may have a place for single individuals who are considering transferring assets. Income from an annuity can be used to help pay for long-term care during the Medicaid penalty period that results from the transfer. In such cases, the annuity is usually short-term, just long enough to cover the penalty period.
While immediate annuities can still be a powerful tool in the right circumstances, they must be distinguished from deferred annuities, which have no Medicaid planning purpose. Also keep in mind that even following the DRA, acceptance of immediate annuities for Medicaid planning varies from state to state.
For more on the DRA's impact on Medicaid planning, click here. |
| How Medicare Beneficiaries Can Fight a Hospital Discharge
 One of the major benefits of Medicare is its coverage of hospitalization. Medicare covers 90 days of hospitalization per illness (plus a 60-day "lifetime reserve"). However, if you are admitted to a hospital as a Medicare patient, the hospital may try to discharge you before you are ready. While the hospital can't force you to leave, it can begin charging you for services. Therefore, it is important to know your rights and how to appeal. Even if you don't win your appeal, appealing can buy you crucial extra days of Medicare coverage.
Starting July 1, 2007, new notice requirements for Medicare patients being discharged from the hospital went into effect. The notices give Medicare patients information about their discharge and appeal rights. Previously hospitals were required to give patients a written notice before discharge called "Hospital-Issued Notice of Non-Coverage" (HINN). Hospitals may still give HINNs in certain circumstances, but the new rules require hospitals to give two notices to patients of their rights - one right after admission and one before discharge.
Within two days of admission to a hospital, the hospital must give you a notice called "An Important Message from Medicare about Your Rights" (IM) explaining your discharge and appeal rights. You must read the notice, sign it, and date it. Two days before discharge, the hospital must give you another copy of the IM. If you are in the hospital for three days or less, the hospital only needs to give you one notice.
Once you receive a discharge decision and you are not ready to leave, you should immediately contact your local Medicare Quality Improvement Organization (QIO). A QIO is a group of doctors and other professionals who monitor the quality of care delivered to Medicare beneficiaries. They are paid by the federal government and not affiliated with a hospital or HMO. The phone number should be on the IM. You can also click here for a list of QIOs.
It is very important to contact the QIO right away. You must contact the QIO by noon on the first business day after you receive the discharge notice. If you do this, you will not have to pay for your care while you wait for your discharge to be reviewed. If you don't contact the QIO by noon, the hospital can begin charging you on the third day after you receive the discharge notice.
Once you request a QIO review, the hospital is required to give you a "Detailed Notice of Discharge." You should receive the notice no later than noon the day after you request a QIO review. The detailed notice explains the medical reason behind the discharge.
The QIO will conduct a review of the discharge. The QIO doctors will review the medical necessity, appropriateness, and the quality of hospital treatment furnished to you. The hospital cannot discharge you while the QIO is reviewing the discharge decision, and you will not have to pay for the additional days in the hospital. If you don't agree with the QIO's decision, you can ask it to reconsider. It must issue a decision within three days.
If, after the reconsideration, the QIO still agrees with the hospital's decision, you can appeal to an administrative law judge (ALJ). You will probably need legal counsel to help you through this process. You can appeal the ALJ's decision to the Department of Health and Human Services, Departmental Appeals Board (DAB). Finally, if you don't agree with the DAB decision, you can appeal to federal court as long as at least $1,000 is at stake.
States may have their own discharge protections. You can find the law in your state from the QIO in your state. Click here for a list of QIOs by state.
For more about hospital coverage under Medicare, click here. |
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Elder Law Associates PA is a boutique elder law firm that practices exclusively in Medicaid and long term care planning, including Medicaid applications, home and community-based waiver services, diversion program benefits, nursing home benefits, spousal refusal applications, and Medicaid fair hearings and appeals; nursing home and assisted living facility residents' rights litigation; asset preservation planning with a special focus on planning in light of the Deficit Reduction Act of 2005, including personal service agreements, income producing real estate for Medicaid eligibility, irrevocable trusts, and spenddown planning; disability planning, including special needs trusts and guardianship; estate planning, including wills and trusts; advance directives; and probate, encompassing estate and trust administration and specialized litigation.
We assist clients in planning for the possibility of disability, incapacity, home health care, assisted living and/or nursing home placement. Our firm enables clients to avoid impoverishment caused by the escalating cost of long term care, to maintain their right to make health care decisions and to avoid unnecessary medical treatment.
We hope you have enjoyed The Elder Law Update. If you have questions about something you read, elder law matters or issues concerning persons with disabilities, we would be delighted to hear from you. We serve as an elder law resource to many professionals and organizations and want to become your elder law resource as well. You can reach us at Info@ElderLawAssociates.com.
Warm regards,
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Ellen S. Morris, Esq. & Howard S. Krooks, Esq., CELA
Elder Law Associates PA
phone: (561) 750-3850 / (800) 353-3752
fax: (561) 750-4069
This publication is intended for general information purposes only. It is not intended to constitute individual legal advice to any specific client. |
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