Estate Planning and Legacy Law Center, PLC

The Harmonious Family that Won’t Fight?

Most families are happy families. They get together for the holidays, share laughs, and tell stories. Everyone gets along and enjoys each other’s company. Then, the matriarch or patriarch dies. Suddenly, years of pent-up resentment and hurt feelings bubble to the surface, and the once-happy family is now embroiled in litigation over the decedent’s estate.


When everyone is alive and happy, it is easy to think that nothing will break a family apart. Many people think that since everyone is getting along, estate planning is not needed because everyone will look out for one another and do what is fair. However, it is crucial that you have a properly prepared estate plan. Failing to plan not only takes all of the control out of your hands, it can also leave hurt feelings and possible confusion over what your true wishes were. This confusion will force family members to the only source able to remedy the misunderstanding: the probate court.


While a lack of planning can lead to disastrous consequences, poor planning can be just as harmful. Documents that are not up to date, vague, or improperly prepared can lead family members to challenge them. If the documents are not clear, family members may have differing opinions as to the true intention of the decedent. This is especially unfortunate for those with a trust: One of the primary reasons to have a trust prepared is to avoid court involvement.


If your documents are up to date and clearly state your intentions, but you worry that your decisions may displease your family, you do have the ability to include a no-contest clause that may prevent or limit challenges to your will or trust. A no-contest clause is a provision that states that if a person contests your will or trust—whichever document contains the clause—and is unsuccessful, they will receive nothing. However, their effectiveness can vary from state to state, so if you think your family might contest your wishes, it is incredibly important to seek the help of an experienced estate planning attorney.


One common situation where contests can arise is when someone is left out of the will or trust. If you want to intentionally disinherit a family member, consider leaving them a nominal amount at your death and using a no-contest clause. By doing this, if the contest is unsuccessful, the family member has something to lose. This may discourage them from contesting your wishes in the first place. However, as previously mentioned, you need to work with an experienced estate planning attorney to make sure that this strategy is the best one for you based on your state’s law and your family situation.


As an alternative, if you are concerned about a beneficiary receiving a sum of money outright because of creditor issues, spending habits, etc., you do not need to disinherit them. By utilizing a discretionary trust, you can set aside money for the individual that is distributed to them when and how you determine. Leaving money to a family member does not have to be an all-or-nothing decision.


Regardless of your family situation, it is incredibly important that you have a well-drafted, up-to-date estate plan in place. Will or trust contests can be very costly and can quickly drain the estate or trust, which means your loved ones will end up with less than you intended. We can assist you in creating an estate plan that will ensure that your wishes are carried out and that harmony can be maintained within your family after you are gone. Give us a call today at 407-647-PLAN (7526) to schedule an appointment.



Estate Planning Is More Than Just Death Planning

Many believe that estate planning is simply instructions on how to distribute your assets when you pass away, but the reality is that proper estate planning can do much more. While one major benefit of estate planning is to provide for your family and friends when you are gone, there are many benefits for you as well.


Additional Benefits of Estate Planning


Life can give us surprises, both good and bad. Estate planning can help you be prepared for  some unfortunate surprises in life. This is because proper estate planning includes planning for you and your care in the event you become incapacitated.


One tool used to address your care in the event of incapacity is a financial power of attorney. This legal document allows you appoint someone to manage your finances and property on your behalf. A financial power of attorney can go into effect as soon as the document is signed, allowing someone to act on your behalf immediately, even if you are not incapacitated. Alternatively, power of attorney can be “springing,” only going into effect in the event you become incapacitated (as determined by a physician). You can determine which type of financial power of attorney fits your unique situation.


Another estate planning tool that can protect you in a time of need is a medical durable power of attorney. Also referred to as a healthcare directive, this legal document lets you name a trusted person to make medical decisions on your behalf when you are unable to do so yourself. It also gives you an opportunity to lay out some of your wishes regarding your medical care.


A document called a living will can also bring peace of mind to both you and your loved ones because it provides instructions on what type of end of life medical care you want. Sometimes referred to as an advance directive, a living will is often paired with a healthcare durable power of attorney.


Finally, the use of a revocable living trust can be beneficial in the event you become incapacitated. When you are healthy and have capacity, you are typically the trustee of a revocable living trust, able to manage the assets and use them for your benefit. However, the trust instrument also allows you to name a successor trustee who will step into your shoes to manage the assets when you are no longer able to act due to incapacity or disability. Successor trustees also have a duty to continue to use the assets for your benefit.


Plan Ahead for Peace of Mind


Having a properly drafted estate plan that includes the documents described above can help protect you during your lifetime. Failure to have these documents in place may result in your loved ones going before the court to have someone appointed to make financial and medical decisions for you. This process, often called “living probate,” is lengthy, expensive, and stressful – not to mention part of the public record – during a difficult time when your loved ones are already dealing with the incapacity of someone they care about – you!


If you have questions about any of these legal documents or how to protect yourself through estate planning, give us a call at 407-647-PLAN (7526) to learn about your options under applicable law.


What to Bring to Your First Meeting with the Estate Planning Attorney

If you are thinking about putting together an estate plan, it is important to consult with an attorney who is knowledgeable and experienced in this area of law. Your initial meeting with an estate planning attorney is a good opportunity to discuss your family’s financial situation as well as your concerns and goals. If you are able to prepare ahead of time for this meeting, there are several items you should bring with you to benefit the most from the consultation.


Helpful Information to Bring With You


Before meeting with the attorney, consider writing down your goals and wishes for your estate plan – or the concerns or worries that prompted you to make the appointment. You may want to jot down specific information you want the attorney to know about your family dynamics, such as beneficiaries or family members you want to include or about or the fact you have a blended family. This information is critical to ensure the attorney understands who is a part of your family, who you want to benefit and protect through your estate plan, and which strategies are best to achieve your goals and unique circumstances.


Beyond this, below is a list of the most important documents you should try to bring to this first meeting:


Documents related to your assets: In an ideal world, you should have an inventory of all your bigger assets — for example, your vehicle(s), home(s), insurance policies, retirement accounts, and bank accounts. Knowing exactly what assets you own and where they can be found is critical to your estate plan.


Documents related to your liabilities: While this may not be fun, any significant debts you have must also be accounted for to create an estate plan providing the best protection for you and your loved ones. An estate planning attorney may want to use financial tools such as trusts to ensure your assets go to your loved ones and not to creditors to pay off debt.


Contact information of other advisors: Whether you use the services of a financial advisor, an accountant or CPA, or an insurance agent, be sure to bring in their contact information so that the estate planning attorney has a point of contact for each aspect of your estate plan. Estate planning is a collaborative effort, with each advisor holding a piece of your financial puzzle. By providing the contact information, it will be easier for all of your trusted advisors to work together to carry out your ultimate goals.


Prepare a list of questions: Having a list of questions and concerns can keep you on track with the discussion and ensure that you get the answers you need as you go through the estate planning process.


Please note, if the attorney has sent you forms to complete before your scheduled appointment, make sure to complete them. Depending upon the attorney’s process, these forms or questionnaires may need to be returned to the attorney prior to the scheduled meeting date.  Completing these documents will help the attorney better assess your estate planning needs, make best use of the appointment time, and help you begin to think more deeply about your estate plan.


Meet Even If You Are Unprepared


Sometimes the biggest hurdle is simply making the initial appointment with an estate planning attorney. While being prepared for an initial meeting is ideal, it is not absolutely necessary. In fact, all of this information can be obtained after retaining your estate planning attorney. Preparing ahead of time, however, will give you and your attorney a head start in putting together a solid estate plan as soon as possible. While it is the attorney’s job to develop the strategy for your estate plan, it is to your advantage to identify your goals and consider the  legacy you wish to leave.


If you are ready to take the next step in your estate planning journey, give us a call at 407-647-PLAN (7526). Even if you don’t have all of the answers or know the right questions to ask, we are here to guide you through the process and ensure your goals are carried out.





When is Probate Necessary?

Whether or not you have an estate plan in place, you have likely heard the term “probate”. Probate is the legal process by which a deceased individual’s assets are distributed under court supervision. This process is necessary to distribute assets that are solely in the name of the deceased person. Probate is governed by state law.

Avoiding Probate

One of the appealing aspects of putting together an estate plan is to avoid probate. One way to avoid the probate process is to ensure that no assets will be titled in the decedent’s name, or providing for an automatic transfer of title, at death. Ways to accomplish this include joint tenancy with rights of survivorship, transfer-on-death (TOD) or payable-on-death (POD) beneficiaries, or use of a trust.

Joint ownership is easy to create and transfer property; however, this solution provides its own set of concerns. TOD and POD accounts can be efficient because, upon the account owner’s death, they immediately transfer the account, outside of probate, to the named recipient. They are easy (and typically free) to set up. It is important to note; however, that in this case, the account is transferred to the beneficiary outright without any creditor protection. Another popular and efficient way to avoid probate is the use of a trust. If you place your assets in a trust, the trust, not you, owns them although you can control these assets and benefit from them as if they were yours. Accordingly, the assets do not go through probate because only property owned by the decedent goes through this process.

Note: If your estate planning consists of just a will, this document will go through the probate process. However, by using a will, you have the ability to determine who will get your assets – as opposed to letting the court decide for you.

Benefits & Downsides of Probate

While there are numerous estate planning tools that can be used to avoid probate, it is not always a bad thing. A probate court can ensure that your intentions and wishes listed in your will are carried out after your passing. Additionally, the probate process guarantees all presented debts are discharged as well as any outstanding taxes on the estate. This, in turn, results in finality to the affairs of the deceased – and surviving family members. Of note, if the deceased had outstanding debt, the probate process gives creditors only a brief window to file a claim against the estate, which could result in more debt forgiveness if there is a concern about the estate being insolvent.

That being said, there are downsides to the probate process. One such downside is the cost. Due to the filing and inventory fees imposed by the probate courts, this is an additional expense eating away at the estate. Also, the probate process can be very time consuming. The probate must be open for a minimum period of time (in many states it is four months) to permit creditors to file claims against the estate. For most uncomplicated probate estates, it will take a minimum of one year to administer. Additionally, the lack of privacy can be a concern for some families. The contents of your will, and any other documents that have to be filed with the court, will be a matter of public record. Any disgruntled family member wondering how your estate was divided up, will have the ability to get access to the documents through the probate process. Lastly, the probate process takes control away from the deceased and the family. This is because, if you do not have a will, the probate process puts the disbursement of a deceased’s assets in the hands of the court and at the mercy of local intestacy law.

Get Advice

If you have questions about the probate process and intestacy laws in your state, feel free to give us a call and schedule an appointment. No matter if you have a little or a lot, a well crafted estate plan can help you avoid probate and make sure your loved ones are taken care of when you are gone.

What to Do with the Family Heirlooms and Keepsakes

When most people think of estate planning, they think of assets that include money, real estate, and personal property. But, included in someone’s estate could be invaluable personal property, such as family heirlooms or keepsakes. This type of property should not be overlooked in your estate plan just because it may not have a high dollar value because it still has sentimental value that cannot be quantified. Part of a thorough estate plan is determining how you want these priceless family heirlooms and keepsakes distributed once you are gone.

Issues You May Face

An “heirloom” is a particular piece of personal property passed down from one generation to the next, and will continue to be passed down for generations to come. Be sure to talk about the family heirlooms and keepsakes with your family so that feelings and expectations regarding these items are out in the open. Also think about having your heirlooms and keepsakes appraised, if possible, by someone reputable so you can provide your heirs with the necessary documentation and so the items can be appropriately identified in your estate planning.

How to Distribute

When it comes to family heirlooms and keepsakes the typical division plans may not work. If the item is of low dollar value, there may not be a way to monetarily equalize the distributions. This can also be the case if the dollar value of the keepsake is incredibly high compared to the value of the remaining estate. Furthermore, if there is only one of such an item, there is no way to split one item between multiple people. Whether it’s great-grandfather’s WWI medals, the cherished family crystal, or your mother’s pearls, you will need to decide the best way to distribute these assets based on your unique family situation. Regardless of who receives these items, they are usually distributed by way of a personal property memorandum in those states that permit this practice.

The personal property memorandum allows you to express your wishes and avoid the hard feelings that could come about by leaving all of the personal property equally to your children. This document is a written statement regarding specific property; the document is then referenced in your last will and testament or living trust and identifies who should inherit what property. This document also has the added benefit of being able to be modified or revised without the need to execute a new will or amend your trust. However, please remember, items listed in a personal property memo must be personal property – not real estate, cars, or bank accounts.

Gifting During Life

Because of the sentimental nature of family heirlooms, you may want to consider gifting these items during your lifetime instead of waiting until your death. If you gift your family heirlooms and keepsakes during your lifetime, there is a personal joy in witnessing your loved one receiving the family treasure. That being said, be careful of gift tax issues that may be incurred depending on the value of the item. Another concern that you may want to address depending upon the value of the family heirloom is whether or not this lifetime gift should be considered part of the recipient’s share of your eventual estate.

Estate Planning Advice

A comprehensive estate plan that considers all assets – including family heirlooms and keepsakes – is key to making sure your wishes are followed once you are gone. Contact us to learn about your options under applicable law and to ensure that all of your assets, no matter the monetary value, are covered under your estate plan.

When is “Living Probate” Necessary?

If you become incapacitated, who is going to take care of you? You will not be able to make medical decisions for yourself and you will not be able to manage your day-today affairs. If you do not have the appropriate estate plan in place, your family may be headed to the probate court long before you are deceased.

Conservatorship or Guardianship Proceedings

In some states a living probate is referred to as a guardianship or conservatorship proceeding. When someone is unable to manage his or her own affairs – often due to illness or older age – family members may need to seek court intervention to appoint a conservator or guardian. This court-appointed individual is authorized to make financial decisions on behalf of the incapcitated person; the same person or sometimes a different individual also appointed by the court will take over control of everyday matters including medical decisions. These living probate proceedings are public, time-consuming, and expensive.

Avoiding Living Probate

While there are several ways to avoid living probate, the best way to do so is quite simple – do the planning and appoint someone to handle your estate planning matters. This includes putting together a medical power of attorney that designates an individual you would like to make medical decisions for you on your behalf when you are unable to do so. Likewise, a financial power of attorney can designate an individual to make financial decisions for you when you cannot. You can choose to appoint the same person for both roles or different individuals – it is up to you. It is important to note that some financial institutions have their own forms that must be completed to designate someone to access your account on your behalf.

Seek Estate Planning Professionals

Because time can be of the essence when dealing with medical or financial issues, it is crucial that you have the appropriate documents prepared to facilitate these transactions when you are unable to participate. An experienced estate planning attorney can help guide you through this process and draft your documents so that they follow all applicable formalities to ensure validity.

Is Your Estate Plan as Stale as Last Week’s Ham Sandwich?

Estate plans are almost magical: They allow you to maintain control of your assets, yet protect you should you become incapacitated. They take care of your family and pets. And, if carefully crafted, they reduce fees, taxes, stress, and time delays. Estate plans can even keep your family and financial affairs private. But one thing estate plans can’t do is update themselves.
Estate plans are written to reflect your situation at a specific point in time. While they have some flexibility, the bottom line is that our lives continually change and unfold in ways we might not have ever anticipated. Your plan needs to reflect those changes. If not, it will be as stale as last week’s ham sandwich and may fail miserably when needed the most.
If anything in the following 5 categories has occurred in your life since you signed your estate planning documents, call us now to schedule a meeting. We’ll get you in ASAP to make sure you and your family are still protected.

Marriage, Divorce, Death. Marriage, remarriage, divorce, and death all require substantial changes to an estate plan. Think of all the roles a spouse plays in our lives. We’ll need to evaluate beneficiaries, trustees, successor trustees, executors/personal representatives, and agents under powers of attorney.

Change in Financial Status. A substantial change in financial status – positive or negative – generally requires an estate plan update. These changes can be the result of launching, winding down, or selling a business; business and professional success; filing bankruptcy; suffering a medical crisis; retiring; receiving an inheritance; or, even winning the lottery.

Birth, Adoption, or Death of a Child / Grandchild. The birth or adoption of a child or grandchild may call for the creation of gifting trusts, 529 education plans, gifting plans, and UGMA / UTMA (Uniform Gifts to Minors Act / Uniform Transfers to Minors Act) accounts. We’ll also need to reevaluate beneficiaries, trustees, successor trustees, executors/personal representatives, and agents under powers of attorney.

Change in Circumstances. Circumstances change. It’s a fact of life – and when you’re the beneficiary or fiduciary of an estate plan, those changes may warrant revisions to the plan. Common examples include:

  • Children and grandchildren attain adulthood and are able to serve in trusted helper roles (successor trustee, executor/personal representative, and agent under powers of attorney)
  • Relationships change and different trusted helpers need to be named
  • Beneficiaries or trusted helpers develop overspending or drug / gambling habits
  • Guardians, executors, or trustees are no longer able (or no longer wish) to serve in their previously assigned roles
  • Beneficiaries become disabled and need a special needs trust to receive government benefits
  • Guardians for minor children divorce, move to a new state, or are otherwise no longer appropriate to serve

Changes in Venue. Moving from one state to another always warrants an estate plan review, as states’ laws differ. Changes may be needed to ensure that you’re taking full advantage of – and not being penalized by – your new state’s laws. This is also true when purchasing a second home outside of your state.

Estate Plans Are Created to Help, Not Hurt, You
Old estate plans get stale just like old sandwiches do. You wouldn’t rely on last week’s ham sandwich for lunch; please don’t rely on your estate plan from yesteryear. If you’ve experienced any of the changes we’ve mentioned in this article, it’s time to come in and chat. We’ll review your estate plan and make sure you and your loved ones are protected.  EPLLC offers a Legacy Protection Plan that helps keep our firm and it’s clients on the same page.

The Disability Integration Act of 2019: Saving Independence

Aging oftentimes leads to the need for assistance. Elders in our communities face the difficult decision whether it is time to seek out a long-term care (LTC) facility for maintaining health and safety. But, what if LTC facilities were not the only accessible option?

LTC facilities have been established to provide care services to those that need more than what they, or their families, can arrange. Deciding to transition into long-term care is a difficult one. Residents certainly relinquish many rights and conveniences that they have become accustomed to while living independently. LTC facilities are expensive and often families are left with few options on covering costs.

Some communities provide alternative services to afford individuals with the opportunity to remain in the community instead of entering LTC. Services such as meal preparation, housekeeping, medication management, and personal care services are some possible offerings in these areas. Not all states or counties provide these services – forcing seniors-in-need prematurely into LTC facilities. LTC is not only expensive for the residents, but for the insurance providers, like Medicaid, and the states that cover them.

The Disability Integration Act of 2019 (DIA)

Renewed interest in offering alternatives to LTC have recently developed within Congress. The Disability Integration Act of 2019 (DIA) was introduced in the Senate and House of Representatives on January 15, 2019. The bill has since been referred to the Senate’s Committee on Health, Education, Labor, and Pensions and the House’s subcommittee on the Constitution, Civil Rights, and Civil Justice. Prior similar efforts were not successful, but advocates hope to pass this law on the anniversary date of the Americans with Disabilities Act, July 26, of this year.

Purpose and Benefits of DIA

DIA will require insurance providers in all states to make in-home based services available as an alternative to institutionalization for disabled or elderly individuals. While it could be said that all residents in LTC may be disabled in some way, not all disabled individuals need long-term care. Some of these individuals may qualify for LTC because of various difficulties with Activities of Daily Living (ADL). ADLs include eating, toileting, grooming, dressing, bathing, and transferring. These limitations may restrict one’s ability to manage certain areas of their care, but it does not necessarily mean that entry into LTC is appropriate. Other factors leading towards eligibility for LTC are the need for help with Instrumental Activities of Daily Living (IADLs), including shopping, cooking, money management, and others.

An elder with diminished capacity due to a disability may be able to accomplish most of the ADLs but is unable to effectively handle IADLs on their own. The DIA may provide the assistance needed for such individuals to safely stay in the community, rather than face the often undesired entry into an LTC facility. The DIA will give elders and others with disabilities with the options for maintaining independence.

In Olmstead v. L.C.527 US 581 (1999), the United States Supreme Court found that segregating the disabled into LTC was a violation of the Americans with Disabilities Act.  The Court held that public entities must provide individuals with disabilities community-based services if those services were appropriate, the disabled person is agreeable to community-based services, and those services can be reasonably accommodated.  Furthering the inspiration behind the Olmstead case, the DIA will establish an intermediate route for individuals that will minimize limitations for these groups.

Future Impacts of DIA

It is unimaginably difficult to make the decision to enter a loved one into LTC. Even more challenging is deciding how to proceed when your loved one is functional in some areas, but deficient in others. There is also difficulty when the family and the loved one disagree on the level of care needed going forward. The DIA may provide a reprieve for families, and those in need of care, facing these challenges.

Sec. 2.(a)(5) of the bill reminds us that, “[S]tates, with a few exceptions, continue to approach decisions regarding long-term services and supports from social welfare and budgetary perspectives, but for the promise of the ADA to be fully realized, States must approach these decisions from a civil rights perspective.” While potentially costly to implement at first, states could find huge savings in the long term, due to lower costs of providing in-home versus institutionalized care. Rather than Medicaid funded LTC costs, states would have the opportunity to provide less invasive care dependent upon an individual’s needs – not a predetermined base cost per resident. In-home care employment needs would rise and offset the lesser need for care providers within formal care facilities.

In Sum

The Disability Integration Act of 2019 is a bill advocating for a universally implemented system of care services intended to keep elders and individuals with disabilities from prematurely entering LTC. States would be required to offer services to such individuals that allow them to maintain their status in the community through independent living. This is big news for those lost in the grey area between independence and LTC residency. Individuals eligible for LTC will have access to services that may prolong their independent status. The DIA has great potential to make an enormous difference in the lives of elders and disabled individuals in our communities.

Trump’s 2020 Budget Proposal


A few days ago, President Trump released his budget proposal for 2020. While the $4.75 trillion budget detailed expenses for all federal departments, agencies, and administrations, let’s take a look at how the proposed budget would impact seniors and Veterans.


Trump’s proposed budget would cut $1.5 trillion from Medicaid spending over the next 10 years.

Work Requirements

The proposed budget details that work requirements would become standard in Medicaid eligibility requirements across the United States. Able-bodied, working-age Medicaid recipients would be required to work, train for work, or volunteer in order to be eligible for Medicaid or welfare benefits, including food stamps and federal housing support.

Many states have already begun the Section 1115 waiver process for Medicaid work requirements. Seven states already have waivers approved – Arizona, Arkansas, Indiana, Kentucky, Michigan, New Hampshire, and Wisconsin. Another eight states have such waivers pending – Alabama, Mississippi, Ohio, Oklahoma, South Dakota, Tennessee, Utah, and Virginia. Arkansas was the first state to successfully implement work requirements. As of December 2018, 18,164 recipients lost Medicaid coverage due to the new rules.

Block Grants

While block grants were shot down in 2017 by Congress, Trump has once again renewed his interest in changing the federal funding of Medicaid from a pay-as-needed system to a set block amount. Block grants cap the amount of federal funding for each state. The Secretary of Health and Human Services, Mr. Azar, agreed that block grants could not guarantee that Medicaid recipients could keep their coverage. Mr. Azar has indicated that he will strongly consider Section 1115 waivers for block grants.


The proposed budget would decrease the home equity allowance for Medicaid eligibility and would require documentation for legal immigration status before the receipt of benefits. The proposal does contain any further details on these requirements, such as what the new home equity limit would be.

Social Security and Medicare

Federal expenditures for Social Security and Medicare are estimated to make up 70% of the federal budget. The proposed budget decreases funding for social security – a $25 billion cut over the next 10 years. This includes a $10 billion cut to the Social Security Disability Insurance (SSDI) program. President Trump claims that cutting down on fraud will make up this amount, while opponents are claiming that many will be cut from the program or benefits will decrease.

Under the proposed budget, funding for Medicare would decrease by about $800 billion over the next 10 years. The White House contends that Trump is not gutting Medicare, but instead is making changes to cut drug prices. This is where the proverbial savings would come in. Trump’s plan entails modernizing Medicare Part D drug benefits, reducing costs for Part B drugs, and increasing access to generic drugs through greater competition. Opponents of the budget state that Trump is making cuts to Medicare to make up for the revenue shortfalls created by the Tax Cuts and Jobs Act.


The proposed budget calls for a 7.5% increase in spending for health care for Veterans over the 2019 amount. The budget claims to fully support the VA MISSION Act of 2018 by providing Veterans a “greater choice on where they receive their healthcare – whether at VA or through a private healthcare provider.” A new urgent care benefit would be instituted, where Veterans can receive urgent care at facilities in their communities.

The budget carves out money for use to improve the online interface and access between the Veteran and the VA. This would include an overhaul to the network infrastructure, a transition by the VA to the cloud, and other IT updates. In addition, the Electronic Health Record System could continue to evolve, which is a digital record system for patient data.

Mental Health Needs

Mental illness affects folks from all walks of life, including seniors and Veterans. According to the National Alliance on Mental Illness, about 43.8 million Americans experience mental illness in any given year. That’s one in five adults. Trump’s proposed budget intends to increase access to mental health services, including funding for programs and investments that provide 24-hour crisis response services, school violence prevention, suicide prevention, and services that provide help for the seriously emotionally ill and children with serious emotional disturbances.


President Trump states in his proposed budget that the federal government is running at a net deficit of $608 billion. The net deficit averaged $759 billion from 2010-2016. How does he plan to address this? By cutting funding for Medicaid, Social Security, and Medicare, among other things. Proponents say that spending needs to be reined in; opponents don’t want changes to these programs that affect our poor and elderly.

While the proposed budget is indicative of the Trump administration’s objectives and priorities, it may have little impact on actual spending levels, which are controlled by Congress. Democratic leaders in both chambers pronounced Trump’s proposed budget dead on arrival. So, while the above changes to Medicaid and other programs are not necessarily in our future, it is important to note the intent of the administration and to be a part of the community discussion regarding such matters. We will keep an eye on upcoming developments regarding the proposed budget and any changes that may affect seniors, Veterans, and those with disabilities.

Paying for Long-term Care: Who Foots the Bill?

It is tough enough for a client to make the decision to enter a loved one into long-term care – but then throw in complicated contracts, lack of legal understanding, and a whirlwind of emotional turbulence and your client can easily be overwhelmed. What happens when the loved one doesn’t qualify for Medicaid, or cannot pay for services through other means? After the contracts are signed, and the loved one is tucked into their new abode, who might be on the hook for the proverbial financial hot-potato?

Nursing Home Contracts

Contracts can be incredibly intimidating for clients, particularly when dealing with the need for placing a loved one into another’s care. When a loved one needs long-term or nursing care, someone will have to take on the responsibility to read, understand, and sign a contract with the facility for their services. That person can be the individual, a family member, a Power of Attorney for the individual, a social worker, or any other person assuming the responsibility for the individual. Thankfully, being responsible for an individual does not necessarily require financial responsibility, too.

Nursing home contracts cover the facility’s expectations for payment, rules, and other details. These contracts educate the individual and/or their representative of what to expect from the facility as well – such as services provided, covered expenses, and other costs. Within these contracts are also provisions regarding financial responsibility that must be carefully reviewed. A responsible party could find themselves financially liable for their loved one’s bill if they improperly sign such provisions.

While nursing home contracts are no longer permitted to solicit alternative sources of payment, some such contracts still exist. Signing such a provision puts a client at odds for a lengthy and expensive court battle to show that their agreement to accept financial responsibility was invalid. The applicable rules can be found at 42 CFR  483. More specifically,  42 CFR § 483.15 covers Admission, Transfer, and Discharge Rights; § 483.15(a)(3) specifically states that long-term care facilities are prohibited from requesting or requiring that a third party take on financial responsibility for their loved one’s care.

Remember, just because a facility is not permitted to seek out a financially responsible party other than the resident, this does not mean that someone cannot willingly take on such responsibility. In other words, any competent person can sign a loved one into care and take on the burden of ultimately footing the bill – but, the last thing anyone would want to do is take it on accidentally. Be sure to advise clients to read and understand all contracts, but certainly take care with regard to contracts for costly medical care services for an individual in your care. Encourage clients to seek your counsel before signing nursing home contracts. Blindly signing a contract because it seems like the only way to get your loved one the services they need is not their only option. A facility, understandably, will seek out the satisfaction of debts from whomever they are legally entitled to pursue.

Meridian Nursing and Rehabilitation INC. v. Skwara (2019) UNPUBLISHED OPINION

A recent New Jersey appellate court decision declared that a son was not personally liable for the debt incurred by his incapacitated mother after entry into a long-term care facility. The defendant, Mr. Skwara, signed the entry paperwork on behalf of his mother, who no longer possessed the capacity to sign for herself. He proceeded to file the necessary paperwork for her possible Medicaid eligibility, but she was subsequently denied for being “over-resourced”. He filed an appeal in which the Administrative Law Judge (ALJ) determined that she was ineligible, not specifically for having too many assets, but because of two recent transfers of assets that disqualified her from eligibility. The ALJ submitted his findings to the relevant social services board to determine the penalty period.

Mr. Skwara appealed to the Department of Human Resources on behalf of his mother. The director disregarded the ALJ’s findings and determined that his mother was ineligible due to excess resources. There were some complicated factors involving business and investment properties mutually owned by mother and son, in which valuable assets had been transferred and mortgaged. While the ALJ focused on this transfer as the reason for ineligibility based on a transfer penalty, the Director of the Department of Human Services concluded that these resources, and the partly-owned business Mr. Skwara and his mother owned together, were resources to be included in Medicaid eligibility criteria.

The trial court granted partial summary judgment to the facility and opined that because Mr. Skwara signed the legally valid contract as the responsible party, he did not appeal the Director of the Department of Human Resources’ decision, nor did he submit any additional applications, he should be held responsible for the several years his mother had been institutionalized.

The appellate court found that because the director focused her efforts on defendant’s mother having too many assets, and not that Mr. Skwara’s mother transferred a possible gift, a remedy for such a breach is not up for determination. The court also found that Mr. Skwara’s responsibility in this endeavor was to follow through with providing all necessary paperwork and information needed for Medicaid eligibility – not a responsibility to pay from his own pocket.

Further, the court determined that it was also Mr. Skwara’s responsibility to liquidate his mother’s assets following the determination of her ineligibility. However, due to the complicated layering of interests in the pair’s business, it was arguably not feasible to liquidate the company. Mr. Skwara offered the facility his mother’s interest in the business as payment, but the facility rejected the offer. The court also mentioned that had the facility taken the offer, not only would it have been compensated, but the sale would also have qualified defendant’s mother for Medicaid as well. The court remanded the case to determine if the sale of the business was feasible and if any income came from the business to Mr. Skwara’s mother. Lastly, the issue of the contract’s validity was not precluded from further review.

Financial Responsibilities

Whoever ends up taking on the financial liability for long-term care costs will be responsible for securing payment from wherever possible to cover the expenses. This process typically entails lining up Medicaid assistance, selling assets, and making sacrifices along the way. Financially responsible parties will be expected to liquidate whatever assets are available to cover the bill. If the assets are not substantial enough to cover what is owed, the facility can seek repayment from the individual’s estate upon death.

Residents in long-term care also have legal rights to appropriate care. 42 CFR § 483.15(c) discusses various rights regarding transfers and discharging. Long-term care facilities cannot transfer or discharge a resident unless they meet certain criteria. Discharge or transfer is permitted when:

  • The facility cannot meet the needs of the resident,
  • The resident’s health has improved to where services are no longer needed,
  • The resident poses safety or health risks to others,
  • The resident fails to submit the necessary paperwork to qualify for Medicaid or Medicare, is denied such benefits, and refuses to self-pay, or
  • When the facility ceases to operate.

Thus, a facility must try to work with residents and their families to provide the best solution for all. Residents are entitled to the opportunity to appeal a decision to end services. If a family feels that their loved one has been unfairly denied further services, contact the state ombudsman for long-term care and consider other remedial action.

In Conclusion

Taking steps to place a loved one into care is not easy – mentally or logistically. There are many hurdles to overcome during the process. As elder law attorneys, we can help our clients understand the basics of Medicaid procedure and requirements and the sometimes-complicated nuances of the long-term care facility struggle. We can help clients who feel overwhelmed by the process or feel that they are not succeeding on their own in working with Medicaid, long-term care facilities, healthcare providers, or the like. Loved ones deserve the care they need and there are resources to help make them affordable – without a family member footing the bill himself.