* PLANNING AHEAD - LONG TERM CARE STRATEGIES
* REVISING WILLS AND TRUSTS
* CHANGING PROPERTY TITLES
* DURABLE POWER OF ATTORNEY FOR FINANCIAL AFFAIRS
* DURABLE POWER OF ATTORNEY FOR HEALTH CARE DECISIONS
* STRATEGIES FOR FINANCIAL OR OTHER GIFTS
* MEDI-CAL PLANNING
* RESOURCE EXEMPTIONS
* SPOUSAL IMPOVERISHMENT LAWS
* SAFE DRIVING AND CALIFORNIA DRIVERS
Alzheimer’s disease leads to a number of life adjustments, including the need to make a wide range of decisions that pose possible legal consequences. This guide explains some of the major legal issues you may face over time and suggests ways to deal with them. Beginning with the first legal steps you should take, this guide gives information about long range financial planning, safe driving, government benefits, and the process of Medi-Cal planning and spending down of assets. As you examine the contents of this guide, please keep in mind that each situation is unique and each situation will apply to the laws and regulations differently. No single plan fits everyone. This guide is not intended as a substitute for a legal advisor. State and Federal laws and regulations change continually. In fact, new Medi-Cal eligibility rules, which are not out yet, have been promised by the California State Department of Health Services for August, 2005.
PLANNING AHEAD - LONG TERM CARE STRATEGIES
When the diagnosis is Alzheimer’s disease, you should first find out as much as you can about the disease from your physician. There are also a number of internet resources which provide a great deal of information on the disease. Then plan for the future. While the disease is in its early stages, you may be able to complete important documents which will give you peace of mind and help preserve your resources for yourself and your family. It is critical that you authorize another person (e.g. a spouse, adult child or close friend) to make decisions for you.
You should take this step now, while you are still able, so that you, and not the court, can select the person best-suited to carry out your wishes. Now is the time to consider what changes in living arrangements you might need over time. Those arrangements can include independent living, assisted living, an assisted living/nursing home combination for you and your spouse, or nursing home placement in a skilled nursing facility. Check provisions of any long term care insurance you have in effect. (If you don’t already have this kind of coverage, you probably won’t be able to qualify for it once you’ve been diagnosed with Alzheimer’s disease. Still, it may be an option for your spouse.) You’ll want to review these and other possible strategies with your legal advisor.
REVISING WILLS AND TRUSTS
Whenever a major life event occurs, attorneys recommend that you review your wills and trusts. Your current legal documents may no longer be appropriate. You may want to make changes that reflect your new circumstances. A diagnosis of Alzheimer’s disease is a major life event worthy of this kind of legal review.
CHANGING PROPERTY TITLES
The way real estate and other property is titled is important. In some cases, how your property is held means that selling it could require court intervention. Reviewing property titles is also an important part of planning to ensure that you and your family members are protected if you ever need long term care in a nursing home.
DURABLE POWER OF ATTORNEY FOR FINANCIAL AFFAIRS
This document grants legal rights and powers to another. Choose someone you implicitly trust, such as your spouse or adult child to act as your agent (sometimes called your attorney in fact.) If you become incapacitated, a durable power of attorney lets your agent act for you in financial and business matters.
DURABLE POWER OF ATTORNEY FOR HEALTH CARE DECISIONS
With this document, if you can’t make health care decisions for yourself, another person of your choice can make a broad range of decisions for you. These decisions cover virtually everything to do with medical matters, such as selecting doctors, hospitals, treatments, procedures or medications. In addition, this document concerns whether or not life support should be withdrawn in the case of a patient who is terminally ill.
Without these two powers of attorney, you may need a court-appointed conservator to handle financial and health care matters for you. In that event, a court would control your personal and financial life. A judge would have to approve your decisions and expenses. This situation can easily be avoided by acting ahead of time to put proper powers of attorney in place.
STRATEGIES FOR FINANCIAL OR OTHER GIFTS
Consulting a knowledgeable attorney is especially important before you transfer any property or make gifts. The attorney can help you review your financial situation to determine whether a gifting program or other financial strategy is appropriate for your situation. Making gifts can protect your family and help save your estate. But, acting improperly can have severe legal implications, and can even make you ineligible for government benefits.
Medi-Cal is a combined federal and State of California program, administered by California, to pay for health care for eligible patients entering skilled nursing facilities. Many people think they won’t need Medi-Cal or won’t qualify for it. But, Alzheimer’s disease is the third most expensive illness in the United States, after heart disease and cancer. The average lifetime cost per patient is $174,000. Many people simply can’t manage these costs on their own. Others are afraid to deplete their resources and impoverish their families. Medi-Cal planning addresses these issues. Proper planning lets you retain as much of your resources for your family as possible, while ensuring that you obtain the benefits you’re entitled to. Pre-planning and crisis planning for Medi-Cal are two ways to accomplish these goals. Pre-planning involves things you can do over time. If you’re an Alzheimer’s patient in the early stages, you’ll be able to participate in this type of planning. But even in the later stages, crisis planning can allow your family to protect you and them from financial disaster. An attorney experienced in this aspect of elder law can help you comply with the law, while taking full advantage of the options open to you.
You may share the frequently expressed fear among potential Medi-Cal applicants that, “I’m afraid I’m going to lose everything.” However, with legal assistance and proper Medi-Cal planning, you can typically save much of and sometimes all of your assets. Medi-Cal planning uses legal strategies to maximize the amount of money your family can keep for their care while qualifying you for government benefits. Consult an elder law attorney to help you with this planning process. It is like asking a certified public accountant (CPA) to prepare your income tax forms to be sure that you are taking all of the deductions the tax code makes available. Do not apply for benefits before making sure you’ve taken all the steps possible to protect yourself and your family. Spending Down/Gifting Assets
Applying for Medi-Cal is a complicated process. You may need legal assistance to determine how you may be able to qualify, and to be sure you complete forms accurately and completely. Incomplete forms and other errors can delay or jeopardize benefit payments. An individual whose personal property is above the Medi-Cal resource limit may spend down to $2,000. However, the spending must be done carefully and pursuant to the laws and regulations. Gifting in this manner may render a person ineligible for a period of time running from the date of the transfer. A Medi-Cal applicant can give away assets and still be eligible for Medi-Cal depending on when the asset was transferred, the value of the transfer and when the person enters a nursing home. The rules come into effect when the person enters a nursing home, and will look back 30 months from that date. However, the regulations only apply to non-exempt or countable assets. A formula is applied which takes the value of the transferred assets, divided by the average monthly private pay rate at the time of the application, which for 2005 is $4,812. This will give you the number of months of ineligibility. However, there are regulations which allow for gifting in such a way as to substantially reduce the 30 month look back period. Your elder law attorney will advise you regarding these regulations. Please do not attempt to do this on your own. Also, assets in any amount can be transferred at any time to a blind or disabled child of any age.
You or your spouse can spend down, for instance, to pay nursing home bills, pay off outstanding debt, prepay mortgages, property taxes and make home repairs. Your spend down plan must be mapped out in advance and coordinated with the Medi-Cal application before moving into a skilled nursing facility. Again, the laws and regulations change continually in this regard.
Exempt property is not counted when eligibility is determined. Non-exempt property is counted.
Examples of exempt or non-counted items, subject to various rules, are as follows:
1. The home - an intent to return must be documented
2. Household goods and personal effects
4. Whole Life Insurance with a total face value of $1,500 or less
5. One car
6. Term Life Insurance
7. Burial Plots
8. Prepaid irrevocable burial plan of any amount and $1,500 in designated burial funds
9. IRAs in the applicant’s name provided the applicant is receiving periodic payments of interest and principal
10. Certain annuities
11. $2,000 in liquid assets
12. Community Spouse Resource Allowance (CSRA) - The community or at home spouse can retain up to $95,000 not including the home.
Please keep in mind that the home, although exempt, can be the subject of a possible state lien after the passing of the recipient, unless certain actions are taken under the regulations to protect the home. The home can be transferred to the non-patient spouse or other family members, but certain specific documentation must be completed. The laws and regulations regarding reassessment of real properties, capital gains issues, etc., must be taken into account.
Spousal Impoverishment Laws:
The community spouse, that is the spouse who stays at home, can retain certain non-exempt assets of up to $95,000. This is called the community spouse resource allowance (CSRA). The stay at home spouse may retain what is called a monthly maintenance needs allowance (MMNA) of $2,378. If the community spouse’s monthly income is less than the $2,378, that person may receive an allocation from the institutionalized spouse’s income. This may involve a fair hearing or a court order to obtain the additional income.
For additional information regarding Medi-Cal regulations, and for information regarding nursing homes which are Medi-Cal licensed, you may visit the California Advocates for Nursing
Home Reform at www.canhr.org.
Safe Driving & California Drivers:
If you have Alzheimer’s disease, you may some day be faced with a recommendation that you restrict your driving privileges. Your doctor may write a prescription that says, “Do not drive.” Or, family members may begin to notice effects the disease has on your memory, judgment and attention - effects you may be unaware of.
Those mental abilities are critical for driving. If you have recently been diagnosed with Alzehimer’s disease, you might not have a problem with driving for awhile. At some point, however, you may begin to notice that you lose your way, misjudge the speed of oncoming traffic or fail to notice stop signs or other signals You may be driving legally - that is you may have a valid California driver’s license - but you might not be driving responsibly. The last thing you’d want is to cause an accident. Liability could cause legal problems and financials burdens for you and your family.
The independence that driving affords isn’t easy to give up. Some people even feel lowered self esteem when they can no longer drive. We have all grown up in a culture where driving is very important to us. And, no one wants to be a burden on others for transportation. So, it is common for Alzheimers’s patients to not admit they are having difficulty behind the wheel. However, people with Alzheimer’s disease and their families and doctors have a responsibility to balance patients’ convenience and safety along with the safety of other drivers and their passengers. Studies have found that, particularly in later stages of Alzheimer’s disease, you are twice as likely to cause or be involved in motor vehicle accidents as drivers of the same age without the condition.
Recently published American Psychiatric Association (APA) guidelines for restricting driving privileges of patients with Alzheimer’s disease say that all severely impaired Alzheimer’s patients pose unacceptable risks on the road. In early stages of the disease, some people can drive safely for as long as two or three years after diagnosis. Others however, cannot drive even short distances without endangering themselves or others. Discuss this issue openly with your family members and doctor. Trust them to tell you when to turn over your car keys. There are numerous available alternative forms of transportation including family members, friends, BART, buses and taxis. You will not be stranded.
Anyone, including relatives, friends, neighbors, or someone who has witnessed what they believe is errant or potentially dangerous driving may report their observations in writing to Driver Safety of the Department of Motor Vehicles. The Driver Safety department will review any information it receives and decide whether it has reason to reexamine the person’s driving ability.
Any written information sent to Driver Safety must be signed, but at the request of the writer, will be held in confidence. The DMV states in this regard that, “Remember, though, intervention will take time; you should do whatever you can now instead of waiting for a resolution from DMV.”
This information is for general informational purposes only and does not constitute legal advice. For specific questions, you should consult a qualified attorney. We hope that this guide will be of some assistance to you. Please feel free to contact our office at any time.
The Alzheimers Legal Survival Kit is presented by:
MICHAEL J. YOUNG
ATTORNEY AT LAW
1931 SAN MIGUEL DR., STE. 220
WALNUT CREEK, CA 94596
Elder Law - Estate Planning - Probate - Long Term Care Planning
Member National Academy of Elder Law Attorneys