by Thomas D. Begley, Jr., CELA

Historically, a member of the military could arrange for a pension and provide a survivor’s benefit to a spouse or child. A problem arose where the child had a disability and was receiving means-tested public benefits such as Supplemental Security Income (“SSI”) or Medicaid.   If the child with disabilities receiving those benefits or other means-tested public benefits received the pension, they would lose the benefits. This is because any income received from any source reduces the SSI income dollar-for-dollar, and if the pension exceeded the amount of SSI income, SSI would be completely lost. Medicaid is frequently linked to SSI, so that if SSI is lost, the Medicaid would be also be lost. What follows is a story of the Power of One.

An Elder and Disability Law attorney in Virginia, named Kelly Thompson, took up the cause of these beneficiaries with disabilities. Kelly enlisted help from the Special Needs Alliance, which is a national organization of lawyers practicing in the disability field and also the National Academy of Elder Law Attorneys. After several years of hard work, in late 2014 Congress enacted the Disabled Military Child Protection Act in the 2015 National Defense Authorization Act. This legislation allows military retirees and service members to designate their survivor benefit to a Special Needs Trust for the benefit of their disabled child or children.

By having the survivor pension benefits irrevocably paid into a Special Needs Trust, those funds are not counted in determining the financial eligibility of the disabled child. The net result is that the military member’s or retiree’s children with disabilities are able to benefit from the pension as well as maintain their vital public benefits.

Part of the requirements under the Disabled Military Child Protection Act is that an attorney certify that the child has previously applied for, or may in the future apply for, SSI or other benefits, and that the Special Needs Trust is compliant with all applicable state and federal laws. A template is provided for completion and signature

We at Gilfix & La Poll Associates believe that estate planning includes planning with regard to what will happen to us – not just to our property and other assets – when we’re at the end of our lives. We make it part of our service to you to enter into a discussion about what you want and don’t want to happen when the end of life is near. This is only the first conversation; we encourage you to share your feelings, values and wishes with your loved ones and medical practitioners. We practice what we preach. If we don’t engage in this planning, we’re vulnerable to what can transpire by default – spending our last few days in an ICU, even if that’s at odds with our needs and preferences.

“Dying well” is quite personal. Your conversation(s) with the people you’re closest to lets them know how you want to die and how they, surviving friends and family members, can help carry out your wishes without uncertainty and guilt. People who’d prefer to die at home can do so, and benefit from pain management and comfort over costly and “heroic” measures. Having this conversation before a crisis – or being open to such conversations – gives everyone time to digest, reflect and integrate the information.

We want you to be clear about end of life treatment so that family members and medical providers have the guidance they need to respect your preferences. Loved ones need to talk to one another when circumstances aren’t so charged. Better that these conversations occur around a dining table than around a hospital bed.

Most of you have already signed an Advance Health Care Directive. That is a huge benefit to you and to your loved ones. But be sure to keep the conversations going. The person you appointed to make decisions on your behalf when you are unable to speak for yourself needs to feel comfortable with your wishes and to understand your values. Having the rest of your family “on board” is also important.

Wednesday, April 16, is Health Care Decisions Day. Let this be a reminder to communicate with those you care about so that your life can reflect your values and wishes – even at its end. Then go out and celebrate life!

Myra Gerson Gilfix was the founding Chair of Healthcare Decision-making Special Interest Group (SIG) for the National Academy of Elder Law Attorneys. This SIG dealt with multiple issues regarding health care, including health care advance directives, durable powers of attorney, DNR orders, biomedical ethics, issues relating to pain relief, dying at home, palliative care, and informed consent.

Pending Benefits Legislation analyzed by the National Academy of Elder Law Attorneys.

The National Academy of Elder Law Attorneys (NAELA) have provided valued input to the Government Accountability Office (GAO) and Consumer Financial Protection Bureau (CFPB) regarding their efforts to combat fraud, misinformation, and the use of inappropriate services and products for veterans.

NAELA has analyzed S. 748, the Veterans Pension Protection Act, and believe the bill currently fails to address areas of concern raised during the GAO report. In addition, they have doubts of the Department of Veterans’ Affairs ability to administer a look-back period without further delaying the already lengthy wait time and complex VA application process.

There testimony consists of three primary areas:

1. Concerns with S. 748 and Proposed Changes

2. Accreditation for Representation of Veterans and Proposed Solutions

3. How Gray Areas in Existing Pension Rules Attract “Scammers” and Proposed Solutions

Concerns with S. 748 and Proposed Changes

In April of 2013 a bill was introduced to establish a three-year lookback period for the VA Aid & Attendance pension program and to create penalty period for assets transferred in this span.

Congress should not introduce unnecessary obstacles and delays at the cost of veterans and their families by preventing them from seeking the type of planning needed to ensure the future security of themselves and their family.

It is NAELA’s belief that if a lookback period of any time frame is implemented then a number of problems will arise. To address these problems, NAELA has drafted changes to the current legislation to better protect veterans and their families.

Implementation

A lookback period of any length will increase the severity of the backlog problem and unfairly punish veteran while preventing them and their families from accessing their rightful pensions.

NAELA’s proposed modification to the bill includes protections for veterans if a lookback period is implemented. They call for a “Timely Determination of Eligibility” section where a claim for improved pension must be decided within 90 days (and 180 days for all other claims). Additionally, NAELA would add a section to the bill explaining that the veteran has a duty to disclose fully and adequately relevant information.

Penalty Period Calculation

The legislation would create inequity with the application of the penalty period, when the veteran would not be eligible to receive benefits. NAELA’s proposed amendment to the bill recognizes “partial returns.” If an individual transfers assets for less than fair market value and a portion of those assets are returned to the individual, the individual’s penalty period should be reduced by the proportion of the assets returned. A partial return should be a “cure” of a penalty, and no new penalty should be recalculated.

For example, if a veteran transfers $10,000 to a child as a gift and the child spent $5,000, only $5,000 can be returned to the veteran in an attempt to avoid a penalty period. It is unfair to impose a full penalty of $10,000 on the veteran if the child returns $5,000 of the gift. An all or nothing rule on returns actually discourages partial restitution of funds.

It seems that the legislation creates a disparity in the application of the penalty period between single veterans and married veterans,as well as between veterans and surviving spouses and dependent children of veterans. The maximum pension rate for each type of claimant (i.e. single, married, veteran, or surviving spouse) is different, thus, creating a longer penalty period for certain claimants versus others, even though the amount of the transfer was the same.

For example, if a veteran gives his son a gift of $10,000 and then applies for pension benefits, he would be assessed a penalty period of ten months ($10,000 divided by $1,038). If the veteran’s surviving spouse gave her son a gift of $10,000 and then applied for pension benefits, her penalty period would be fourteen months ($10,000 divided by $696).

The legislation provides that if the veteran’s spouse makes any gifts during the veteran’s lifetime, the penalty is to be assigned to both the veteran and his spouse and such penalty survives the death of the veteran.

NAELA would change the method of calculating the penalty period to better reflect the cost of long-term care for veterans and their families. NAELA suggests that the value of all covered resources disposed of by the veteran should be divided by the greater of either twice the amount of improved pension or the national average cost of care. This would decrease the devastating financial impact of a penalty period and reflects the reality that veterans will have to pay for the cost of care during the penalty period.

They believe this change will decrease the impact on veterans and their families because the cost of long-term care is a major element of eligibility for the VA pension benefit. This benefit helps elderly and chronically ill veterans and their families pay for much-needed long-term care.

In order to be eligible for the full pension benefit of $1,038 per month, a veteran needs to have a monthly income of $0 or less. The VA regulations provide that unreimbursed medical costs (such as the cost of long-term care) can be subtracted from the gross income for “income for VA purposes.” By tying the penalty period to the cost of care, rather than the amount of the monthly benefit, which other benefits programs such as Medicaid already do, the penalty period reflects the basic reality that the vast majority of those eligible are only eligible because they have significant care costs. This change will protect veterans because the national average cost of care is much higher than the pension benefit.

Lack of Clarity and Guidance

It is their contention that the current draft of S.748 lacks adequate clarity and guidance on the treatment of trusts and annuities when determining the veteran’s net worth.

In order to protect veterans and their loved ones, NAELA identifies certain transfers that should be exempt from penalty. Transfers made for fair market value or for other valuable consideration are exempt. Also exempt are transfers made exclusively for a purpose other than 6 to qualify for benefits.

Their proposal includes a non-exhaustive list of transfers that are presumptively transfers for a purpose other than to qualify for benefits, such as:

• To help a family member pay for education expenses, medical expenses, for a financial crisis;

• To contribute to a religious organization or charity;

• Transfers resulting from alleged financial fraud or abuse against the claimant;

• Transfers made by individuals with dementia who are unable to provide documentation or explanations of the transfers;

• Transfers made to a third party solely to benefit the veteran’s spouse.

NAELA’s approach allows for the recognition of special needs trusts to help protect the veteran’s family members who have a disability. For example, a disabled child in the veteran’s household can receive Medicaid and have a special needs trust to improve the quality of the child’s life, but currently, the assets in the special needs trust would count against the veteran’s ability to obtain needed assistance from the VA.

The suggested changes also help protect veterans and their families by exempting Medicaid Compliant annuities as an asset. A Medicaid-compliant annuity has no cash value, but is a source of income the veteran can use to pay for the cost of long-term care and delay the need for Medicaid. This change will help delay or even avoid the need for veterans and their spouses to receive Medicaid covered nursing home care — ultimately saving significant costs for the Federal government as a whole.

As it stands, the draft of the bill fails to include important definitions that would help veterans and their families adequately plan for their long-term care needs. NAELA’s suggests adding a definition section to the bill that would include definitions for fair market value, resources, disabled, trust, annuity, and transfer.

Veterans and their families deserve protections from unjustifiably harsh eligibility restrictions.

NAELA’s suggestions to the bill work to correct the current problems in the legislation and are necessary if a look-back period of any length is instituted.

Visit the National Academy of Elder Law Attorneys here

Christopher J. Berry is an elder law lawyer in Michigan Dedicated to helping seniors, veterans and their families navigate the long-term care maze. To learn more visit http://www.michiganelderlawattorney.com/ or call 248.481.4000

Michigan Certified Elder Law Attorney, Christopher J. Berry, JD, VA Accredited, will host The Elder Care Chat where he will cover the Six Ways to Pay for Long-Term Care Costs.

The call can be access as follows:

Title: The Elder Care Chat 6.24.13
Time: Monday, June 24th at 2:00pm Eastern
Listening method: Phone + Web Simulcast
Phone number: (206) 402-0100
PIN Code: 670087#

To attend via the web, visit:
http://InstantTeleseminar.com/?eventID=42786354

The Elder Care Chat, is a weekly teleseminar that occurs Monday at 2pm where Christopher J. Berry, CELA, one of the premier Elder Law Attorneys in the nation, chats about various topics in Elder Care for the benefit of those in need of elder care services, such as caregivers and their loved ones needing care, and those who provide elder care services, such as home care providers, social workers, elder care communities and other senior service professionals.

In addition to VA Accredited, Certified Elder Law Attorney, Adjunct Professor, Author, Christopher J. Berry, J.D., there will occasionally be other experts featured in elder care for the benefit of those who are caregivers, concerned about elder care for themselves or provide services to those who are in need of elder care services.

The Format of the chat is that Certified Elder Law Attorney, Christopher J. Berry will speak on a topic for 10-20 minutes relevant to The Elder Care Journey and elder law. After that, he will then open it up to questions. Keep in mind, the chat is recoded every week, so do not ask any personal questions you do not want to be heard and replayed.

The chat will be less than 30 minutes, and will be every Monday at 2pm Eastern. This will be the cheapest time you’ll ever spend with an attorney!

A durable power of attorney protects you in the event that your health declines quickly and you are unable to make health care decisions on your own.

Medical and financial Durable Powers of Attorney can’t prevent accidents or keep you young, but they can certainly make life easier for you and your family if times get tough.

While it may not be common knowledge, it is Older Americans Month and Elder Law Month, and there is no better time to talk about Elder Law and Durable Power of Attorney.

(Related: Proposed Changes to the VA Pension Program)

Elder Law is a specialized area of law that involves representing, counseling and assisting seniors, people with disabilities and their families with a number of legal issues, from estate planning to long-term care issues. Its emphasis, according to The National Academy of Elder Law Attorneys, is to promote the highest quality of life for individuals.

(Related: Rural Areas Could Suffer In States That Opt Against Medicaid Expansion)

Durable Power of Attorney for health care is perhaps the most difficult and important Elder Law issue that needs to be addressed as we age. A health care Power of Attorney, or health care proxy, is a legal document that defines the person who is authorized to make health care and medical decisions for another person. This is imperative in the case of older people, who often descend rapidly into poor health, rendering them unable to make health care decisions for themselves.

(Related: DOMA Increases Medicare Costs For Same-Sex Married Couples)

While there a number of subtleties involved in creating a Durable Power of Attorney, three that stand out are:

• It must be executed. This means it must be signed while a person is still mentally competent to do so.
• It must appoint a person, or people, who will be able to make decisions on the other person’s behalf if required.
• It must define a triggering event, or the action that will put the proxy in effect. This is usually defined as when a person becomes incapacitated.

You can learn more about the details of developing a health care POA here.

Read more: http://homehealthcareconnection.org/2013/05/elder-law-understanding-the-issues-and-the-importance-of-durable-power-of-attorney/?utm_source=feedly

Christopher J. Berry is an elder law lawyer in Michigan Dedicated to helping seniors, veterans and their families navigate the long-term care maze. To learn more visit http://www.michiganelderlawattorney.com/ or call 248.481.4000