Effective 1/1/09:

The maximum MMNA a community spouse will be allowed to keep is $2,739. This is up from $2,610 for 2008-2009.

The minimum CSPA or “community spouse protected amount” will be $21,912. This is up slightly from $20,880 in 2008-2009.

The maximum CSPA (or assets the community spouse is allowed to keep without a hearing) will be $109,560. This is up from $104,400 in 2008-2009.

Does this mean you will not be able to protect more than $21,912 or $109,560 in assets from Connecticut nursing home costs? Absolutely not. An experienced Connecticut Medicaid attorney can help you protect everything you are entitled to, which in many cases is more than these basic rules provide.

Related posts:

1. Connecticut Medicaid (Title 19): CSPA
2. Connecticut Medicaid (Title 19): MMNA
3. Medicaid Spousal Refusal Update

In its most recent survey, the State of Connecticut determined the average monthly cost of a Connecticut nursing home is $9,464.00. This adds up quickly as some people put off implementing life savings protection for months or even years, and others put it off until it is just too late. There is a much less expensive alternative, but before we get to that we have to take a look at what many families are experiencing out there.

Connecticut nursing home costs are among the highest in the nation. Every day I see families stuck writing checks to nursing homes in amounts of $10,000 or more – with no end in sight. These families failed to plan ahead, and they are paying a costly price now. In many cases, these families lose all or a significant portion of their life savings to Connecticut nursing home costs. I wish there was more we could do, but when it is too late it is just too late.

Some families I see try to create their own life savings protection plan. I’ve never seen it work out the way they intend or think it will when people act without an experienced attorney. I see people all the time that have transferred their parent’s money to family members or themselves and for some reason many of these individuals think these transfers will not be a problem when they go through the 5 year look-back period while applying for Connecticut Medicaid nursing home benefits.

Every single financial transaction during the 5 year look-back period is subject to audit and assessment of a penalty if the State deems it a penalizing transfer. You may have the greatest rationale in your own mind , but if you have no evidence and no support in the regulations or case law you really have nothing except a big mess that will cost more to clean up than if you got professional help in the first place.

If what I described above sounds acceptable to you, then you may want to run down to casino and bet everything on black because you are quite the gambler. If you are not the gambling type, and want a strategy you can count on to protect your life savings, keep reading.

The other families I see are looking for solid protection for their hard earned life savings. I am proud to say that I help these families on a regular basis achieve their goals of protecting assets not only for children, but also for their spouse and themselves. It can be done.

You have options to protect your family against a Medicaid required “spend-down”. These options expire, and when they are gone they are gone for good. When you are within five years of needing Connecticut Medicaid nursing home benefits you will not be able to take advantage of these proven techniques. Nobody knows when their 5 year window will start, so most people choose to act sooner rather than later.

One popular option is The Connecticut Medicaid Asset Protection Trust which helps families protect amounts from $50,000 – $1,000,000.00. There are many other techniques that may or may not available depending on your unique situation. Together we can find a solution that works for your unique circumstance.

Doing nothing in July of 2008 just cost you $9,464 in lost asset protection. August is coming to add on another $9,464. See a trend here? The clock is ticking.

Related posts:

1. Estate Planning For Title 19
2. Title 19 Medicaid Protection Workshop
3. The Connecticut Medicaid Asset Protection Trust

For July, there are only 10 Connecticut Medicaid Asset Protection Trusts available for purchase at the reduced rate through SheaLawOnline.com. I do not expect to increase that number, so once they have all been ordered they may not be available again for a while. And remember, a free $50 gas card is provided upon completion of your Connecticut Medicaid Asset Protection Trust.

Update: This special offer has expired on September 1, 2008.

Related posts:

1. Another Lost Asset Protection Opportunity
2. Medicaid Asset Protection Questions
3. Reminder – Medicaid Asset Protection Workshop

There can be a lot of anxiety when a loved one is in a nursing home and your assets are dwindling at the rate of +$9,000 every month. Unfortunately this anxiety can also lead to poorly informed decisions. Some families I meet come to me with an estate plan that disinherits a loved one that is in a nursing home or on Connecticut Title 19 Medicaid. The logic of this plan is to protect the family assets from being wiped out. This is a knee-jerk reaction that creates more problems than it solves in my opinion.

What can go wrong?

Many times I have family members contact me because a parent has disinherited the other parent (living in a nursing home or diagnosed with dementia) with the understanding that one child or all the children would actually use the funds to provide care for the surviving parent.

The first issue is that such an arrangement is almost non-existent on the scale of enforceability. At best there could be an oral trust but one side of the oral contract is deceased and if there is a conflict it is obvious that the other side of the contract (the child who received the funds) is saying there is no contract. Where is the evidence? At worst, the funds received by the child or children are treated as they look, outright bequests with no strings attached.

A second issue is liability concerns. The funds you intend to care for the surviving parent are now exposed to the liabilities of the person chosen to hold the funds. Common liability risks include divorce, bankruptcy, or even a car accident.

A family with a loved one in a nursing home or on a government benefits program has a choice. Disinheritance is not the only option. Disinheritance is not the preferred option and the government even recognizes this fact by providing specific protection to specific estate planning strategies.

A Special Needs Trust allows you to leave a legacy of care for a loved one in a nursing home without handing over everything to pay nursing home bills. It is absolutely critical that this unique planning is done by an experienced Connecticut special needs attorney because these trusts are reviewed by government benefits agencies and in Connecticut they are usually reviewed by the Attorney General’s office. One mistake in the document and the assets of the trust could be used to pay for bills you did not intend to pay.

I have seen too many families torn apart by using disinheritance as asset protection. There is no need for it. You have a choice. Put your plan on paper and leave your family with some security.

Related posts:

1. Critical Medicaid Mistake #1
2. The Special Needs Trust – How to Secure the Future for Your Disabled Child
3. Critical Connecticut Medicaid Mistake #3

Rome v. Wilson-Coker (Ct. Super. Ct., No. HHBCV064012367S, Oct. 24, 2007).

Marjorie Rome is bipolar with a history of institutionalizations. She needs help and a certain level of benefits to receive treatment for her condition. Presumably with good intentions and a desire to help Marjorie, her father created a trust for Marjorie in his will. The trust was based on the model of a discretionary trust which vested discretion in the trustee to make or refuse distributions for Marjorie’s benefit.

Unfortunately, for some reason which I fail to comprehend, the trust language directed the trustee to make distributions as necessary for Marjorie’s “interest and general welfare, even to the extent of exhausting the entire Trust estate.” This is a big blunder if you want to include asset protection in your estate plan or trust and it cost the Rome family.

So eventually Marjorie entered a nursing home and applied for Medicaid. The Department of Social Services denied her application based on their determination that her father’s trust was available to Marjorie as an asset. The Trustee thought it was a good idea to deny distributions to Marjorie for nursing home costs, mistakenly believing that he actually had real discretion to do so.

Marjorie Rome later pleads her case to the Superior Court claiming that the trust is not available because the Trustee is refusing to make distributions to her. The court recognizes that the flawed language in her father’s trust gives Marjorie a right to compel distributions from the trust even if the Trustee refuses.

Her father made a mistake in his estate plan, and Marjorie had to pay for it. If you are looking for asset protection, do everything you can to make sure it works.

Related posts:

1. The Connecticut Medicaid Asset Protection Trust
2. Medicaid Asset Protection Questions
3. Reminder – Medicaid Asset Protection Workshop

I have had families contact me after they transferred assets out of a parent’s name and then spent all of the funds within the look back period of the parent’s application for Title 19 Medicaid benefits. From a legal perspective, there is often no rhyme or reason to these situations and they often lead to disaster. So in a case like this a family has transferred and spent everything and gotten themselves into trouble with DSS. Now, that the Medicaid application was denied they recognize they need experienced legal advice. They have already spent everything, how are they going to pay to get a good attorney to help them out of this hole? Speaking for myself, it usually costs more to have me fix an ill-advised asset protection plan than to create a well designed plan.

There are countless variables to evaluate when creating an asset protection plan for Medicaid eligibility. Overlooking even one variable in the analysis can lead to exactly the wrong result. There is a lot of information here and on other sites about general Medicaid issues; however, generic information is only as good as the person applying it to your situation. Someone with asset protection experience can make a positive impact while someone with no experience or training can take you down the wrong path. If you are considering a do it yourself asset protection plan, be prepared to go it alone from start to finish. There are some mistakes that cannot be undone by even the best attorney.

Related posts:

1. Critical Medicaid Mistake #2
2. Critical Connecticut Medicaid Mistake #3
3. Doing Nothing Just Cost You $9,464 (and counting)

A Power of Attorney is one of the most important legal documents a person can have. Without a comprehensive power of attorney, many people are neither able to handle their loved ones financial matters nor make health care decisions without seeking court intervention (Conservatorship). I often have clients come into my office assume that, just because their assets are titled jointly with their spouse, parent or partner, they are able to liquidate accounts to pay bills, hire attorneys, sell their jointly titled real estate, etc. Unfortunately, that isn’t the case.

In fact, a spouse who has a jointly titled investment account with their significant other in many cases does not have authority over the entire account. This can cost a family hundreds of thousands of dollars in lost asset protection opportunities when nursing home care costs begin. In a case like that, the healthy spouse has to petition the court to become the Conservator of the institutionalized spouse and probably spend tens of thousands of dollars on her nursing home care when he could have, had she had a proper power of attorney, transferred the account into his name, alone, and done some Medicaid Title 19 asset protection planning.

What is a Power of Attorney?

A power of attorney is a legal document where one person (the principal) authorizes another (the agent) to act on their behalf. There are financial powers of attorney which allow your agent to make decisions regarding your property and healthcare powers of attorney which allow your agent to make decisions regarding your health care needs.

Your power of attorney can be broad in scope, giving your agent the ability to make any and all financial and personal decisions for you (a General Power of Attorney) or you can limit your agents authority by specifying the types of decisions you would like them to make on your behalf (a Limited Power of Attorney).

You also have a choice whether you would like your agent to have the ability to make decisions both now and if you become incompetent (a Durable Power of Attorney) or your agent can be limited to make decisions only when you become incompetent (a Springing Power of Attorney).

What is a Conservatorship?

Conservatorship of the Person is a legal relationship whereby the Probate Court gives a person (the Conservator) the power to make personal decisions for another (the ward). A family member or friend initiates the proceedings by filing a petition in the Probate Court in the district where the individual resides. A medical examination by a licensed physician is necessary to establish the condition of the individual. A Court of law then determines the individual is unable to meet the essential requirements for his or her health and safety and appoints a Conservator to make personal decisions for the individual. Unless limited by the court, the Conservator has the same rights, powers and duties over his ward as parents have over their minor children. The guardian is required to report to the court on a regular basis.

A Conservatorship of the Estate is a legal relationship whereby the Probate Court gives a person (the Conservator) the power to make financial decisions for another (the ward). The Court proceedings are very similar to those of a Conservatorship of the Person except the Court of law determines an individual lacks the capacity to manage his or her financial affairs and appoints a conservator to make financial decisions for the individual. Often the court appoints the same person to act as both Conservator of the Person and Estate for the individual. Like the Conservator of the Person, the Conservator of the Estate is required to report to the court on a regular annual basis.

The Differences

A power of attorney is a relatively low cost and private way to decide which family member or trusted friend will have the legal authority to carry out your wishes if you can no longer speak or act for yourself. If you do not have a power or attorney or if your power of attorney is not drafted properly, and something happens that results in your inability to make decisions, your family/friends may later face court proceedings and court supervised Conservatorship. A court proceeding is not only costly, but the person appointed as your Conservator may not be the person whom you would have chosen yourself. And, as stated above, not having a properly drafted power of attorney could significantly limit financial and/or Medicaid planning that could be done on behalf of the principal.

Related posts:

1. All Powers of Attorney Are Not Created Equal
2. Planning for Disability & Incompetence
3. The Special Needs Trust – How to Secure the Future for Your Disabled Child

How do they decide who gets appointed to what position in what case?

What are the standards for acceptable billing by the court appointed attorney?

In some cases there are some rules that provide guidelines, however, with a lack of oversight who knows what really happens?

Earlier this summer I read this article from Houston. The Houston Chronicle newspaper conducted an investigation of hundreds of probate court records and thousands of billing records. What they found was disturbing and I encourage you to check it out for yourself.

Here are some interesting revelations:

• One Harris County judge approved paying $1,000 in fees to a lawyer for attending her ward’s funeral and burial. Most people would agree there is almost no circumstance where an attorney is needed at a funeral.
• In Harris County those who got the most business in probate cases contributed tens of thousands of dollars for the 2006 judicial races. Could there possibly be a connection between campaign finance and receiving lucrative appointments? Tune in next time on unsolved mysteries.
• Between 2003 and 2005, one judge ordered more than $400,000 in fees paid to one of his former law students — a 12-year lawyer who became one of his top-paid appointees during her first 18 months as an attorney. I started hearing echoes of “it’s not what you know but who you know” when I saw that one; ain’t it the truth. Really now, that is one judge effectively granting one attorney a $100,000+ salary for those years, and it was a newly licensed attorney.
• During the same time, the same judge also approved more than $375,000 to a former law school classmate who had recently returned to practice in Texas and mainly specialized in real estate law.
• In Harris County, the top-paid professionals in one probate court included one of the judge’s former law students, his law school friend and a lawyer with whom he has shared office space and real estate investments.

So where do we stand after learning about all these questionable acts? Well, for one, as a citizen I am glad I am not subject to the probate courts described in the study. Does something similar go on in Connecticut? I don’t know. I hope not, but until someone does their own investigation we won’t know.

This is not an attack on Connecticut probate and I hope you don’t read it that way. I’m sure that won’t stop some of the fanatics that stop by, but I can’t do anything about them. It is a reminder about the vulnerability to corruption that accompanies a politically elected judiciary. Probate judges are important, and they may be better off if they were free of campaign finance.

Related posts:

1. CT Probate Judges Fight for Their Right to Party
2. Storm Clouds – The Next Probate Scandal in Connecticut?
3. Important Reminders from Anna Nicole Smith

What if it was your spouse on Medicaid and the state has paid over $70,000 in benefits?

Will they attempt to recover benefits upon your spouse’s death?

After a Connecticut Title 19 Medicaid benefits recipient dies, the state has the right to recover any assets remaining in order to reimburse itself for Medicaid benefits paid out. This process is called estate recovery. Certainly, it makes sense from a public policy standpoint—-if the state is going to help pay for a resident’s care while they are living, then the state should be reimbursed, as fully as possible, by any assets remaining at the resident’s death. But while this policy may make sense, families are never happy to learn that the state may put a lien on your/your parent’s home after your spouse/parent dies.

At one time, states were only pursuing certain real and personal property the Title 19 Medicaid recipient had titled in their name, alone. But now states are taking advantage of the Federal laws expanded definition of “estate” that allows the states to recover most assets in which the Medicaid recipient has an ownership interest including jointly owned property, property held in trust, life estates, and life insurance proceeds. The states also have the right to recover assets conveyed at the Medicaid recipient’s death through transfer on death deeds or beneficiary designations.

In addition, states are now placing liens on the Title 19 Medicaid recipient’s home. This is a way for the state to secure a debt against the Medicaid recipient’s property, meaning that the property can not be sold or transferred until the lien is satisfied. However, the state will only place a lien on the home if Medicaid has paid for at least six months of nursing home care. The state would then inform the Medicaid recipient or the family before a lien is imposed and the family would have the chance to appeal the action.

Fortunately, the state will not place a lien on the home if the Title 19 Medicaid recipient’s spouse, minor child, or disabled child is still living in the home. Nor will the state place a lien on the home if the Medicaid recipient’s doctor thinks he or she may be able to go home. In fact, the federal government requires states to waive recovery all together if recovery would cause undue hardship (as determined by the state).

There are still, in certain circumstances, perfectly legal ways of avoiding estate recovery. For example, if mom is the Title 19 Medicaid recipient, and she has a child with a qualifying disability, she may be able to give her home to that child penalty free and avoid estate recovery at her death. Also, if mom has a child who moved into her home with her, cared for her, and that care kept her out of a nursing home for at least two years, then mom can transfer her home to that child, penalty free, and avoid estate recovery. This is called the caretaker/child exception. There may also be other strategies to consider for avoiding estate recovery including purchase of the home by family members or, perhaps, even using a reverse mortgage.

Connecticut Title 19 Medicaid estate recovery rules are complicated and change frequently. You should consult an Elder Law Attorney who practices in the area of Medicaid before drafting your estate plan with the intent of qualifying for Medicaid with the hopes of avoiding estate recovery. Plan today to protect yourself tomorrow.

Related posts:

1. Critical Medicaid Mistake #2
2. How Good is Connecticut Medicaid?
3. The Special Needs Trust – How to Secure the Future for Your Disabled Child

The sophisticated technique of Spousal Refusal came to Connecticut in 2004 and was affirmed in federal appeals court in 2005. In 2007 we have the wrath of the CT legislature.

As a background, there is a very specific loophole in the federal Medicaid statute which allows the Community Spouse to keep a significant number of assets if the Medicaid applicant assigns his or her right of support to the State.

The legislature decided to attack this loophole by restricting the conditions under which the Medicaid applicant is allowed to assign his or her right of support. This is found in C.G.S. 17b-285 (Effective July 1, 2007).

First, an assignment of support is no longer required if the Community Spouse is unwilling or unable to provide information. Previously the assignment was required.

Second, the applicant spouse must not have resources himself in excess of eligibility standards. This is not a huge change, although it can certainly trip up the unwary.

Third, the Community Spouse must be unable to provide information required to determine eligibility. What did they change? Previously the Community Spouse could be unwilling to provide information and the family could still use an assignment to fit in the federal loophole. It seems that is no longer an option.

This is another attack on crisis Medicaid planning. Pretty soon there won’t be any options for a family once the crisis hits at the rate our legislature is churning out new restrictions. The message is clear, act today to protect yourself tomorrow. Early panning has a much better success rate than crisis planning.

Related posts:

1. Connecticut Medicaid in Court – The Spousal Assessment
2. Connecticut Medicaid 2009-2010
3. The Special Needs Trust – How to Secure the Future for Your Disabled Child