Special Needs Law

ABLE Accounts for People with Special Needs

Posted on February 9, 2017 by Jim Koewler — No Comments ↓

ABLE Accounts seem to be here to stay.

ABLE stands for Achieving a Better Life Experience. ABLE Accounts are financial accounts through which someone with special needs can spend money for many things that will enhance the person’s quality of life.

In Ohio, where I practice, they are called STABLE accounts. The ST stands for State Treasurer. (A politician can’t help but put his/her name on something.) Oddly, Ohio is one of the leaders in the U.S. in making ABLE accounts available. Ohio is the first state to make them available

These accounts are “special” accounts for people who have disabilities. They receive favorable tax treatment and will not (in most instances) impact the person’s government income (SSI) and health (Medicaid) benefits. In exchange for the tax treatment and lack of impact on government benefits, these accounts will have a number of limitations, so the politicians’ words “enhance the quality of life” and the “better life experience” are bits of puffery.

To be sure, ABLE Accounts will be useful. In fact, there is one particular use of these accounts that is quite a big step forward. Still, despite the highfalutin words of Congress, an ABLE account is not a panacea.

I’ve discussed ABLE accounts before. The February 2, 2015 installment described the federal legislation that created the ABLE account. The April 17, 2015 installment discussed how an ABLE account can be used to help qualify for SSI (Supplemental Security Income) and for Medicaid.

THE BASICS

The person who owns the ABLE account must be disabled or have been disabled before age 26. There is talk of raising the age, but nothing has happened yet.

The person can have only one ABLE account. Not one per state per person – only one per person, nationwide.

Anyone can contribute to an ABLE account. The total of ALL contributions cannot exceed $14,000 per year. This number is pegged to the amount of a gift that does not trigger the requirement to file a gift tax return. As the gift tax exclusion goes up with inflation, so will the ABLE account maximum contribution amount. Unlike the gift tax exclusion, however, the ABLE account deposit isn’t on a per person basis. The maximum is per account per year, not per donor to the account. For example, if Dad deposits $14,000 into child’s ABLE account in January 2017, no one can give anything more to the account until 2018. Deposits are NOT tax deductible, though.

If an ABLE account holds more than $100,000, SSI will be shut off until the value falls back below $100,000. Medicaid will not be shut off, though. With a maximum contribution of $14,000 (unless interest rates really jump or the stock market takes off,) it will be seven years before any ABLE account gets to that amount.

Whatever is left in the ABLE account when the person dies will go to pay Medicaid first (up to the amount that Medicaid spent on the person.) If the person relies on Medicaid for health costs, he/she should not allow the ABLE account to accumulate.

Money in a ABLE account can grow tax-free. (It’s sort of like a Roth IRA that way. The initial deposit isn’t pre-tax money, but the growth of the money in the account is tax-favored.) In fact, if the contents of the ABLE account are spent on disability-related expenses, the growth isn’t taxed. If, though, ABLE funds are used to pay some expense that is NOT disability-related, there’s a 10% penalty on that expenditure. It’s important to take great care when spending ABLE funds.

Ohio’s STABLE account can be invested in mutual funds or in a checking account. There are different mutual fund choices to allow for aggressive investors or cautious investors. (Remember that the ABLE account is a Medicaid-payback account, so these mutual fund options are attractive only to someone who is sure that he/she will NOT rely on Medicaid for care. I suspect that only a few people who are eligible to open ABLE accounts can fairly expect not to use Medicaid.) Because of the likelihood that many or even most people may come to depend on Medicaid during their lifetimes (becuase of the likelihood of people needing long term care,) I cannot stress how bad an idea it seems to allow an ABLE account to accumulate above one’s near-term needs. (Use, if possible, a Wholly Discretionary Trust if trying to allow accumulation of the money.

An ABLE Account is going to be almost as easy to use as a checking account. It can have a debit card as well. Because expenditures from the ABLE account lose their protection if not made for “disability related expenses,” avoid the debit card. The debit card is a mistake waiting to happen.

THE MOST IMPORTANT USE OF AN ABLE ACCOUNT

An ABLE account can be used to pay for housing.

That may not seem important, but it is.

Supplemental Security Income (SSI) is the source of income for a great number of people who are disabled before age 26 (the age by which someone must be disabled to qualified for an ABLE account.) An SSI recipient over age 18 can have his/her payments be reduced if the recipient receives help paying for housing. That reduction can be up to a third of the SSI payment that the person could otherwise receive.

People who are disabled as children tend to live with Mom and Dad for most or all of their lives. Mom and Dad may be well to do, living in an expensive house. The fair market rent to live in an expensive house can easily exceed one third of the maximum SSI payment, $245. (The maximum SSI payment for 2017 is $735.) For that matter, the fair market rent to live in an expensive house can easily exceed the entire SSI maximum of $735. The SSI recipient doesn’t have enough SSI income to pay fair market rent, so the SSI payment gets reduced.

Mom and Dad (or anyone else, for that matter) can place enough money into an ABLE account (as long as the total deposits during the year don’t exceed $14,000) to allow the child to pay his/her fair share of the monthly cost of the house. Then, the child/ABLE account beneficiary pays money out of the ABLE account to pay Mom and Dad for housing.

(Having the disabled person pay fair share of housing avoids tax issues while payment of “rent” runs into those tax issues. Receiving reimbursement for the fair share of housing doesn’t create income. Receiving rent creates income. That rental income can be offset by the cost of keeping up the house, but it still creates a great deal of tax recordkeeping. Collecting only the fair share of costs doesn’t create an income tax issue as long as documentation of the total cost is checked occasionally and the fair share gets adjusted when someone moves out of the house, such as a sibling moving out for college. Despite the ease of the fair share method, when calculating an SSI reduction, the Social Security Administration uses the fair market value approach.)

There are plenty of other disability-related expense that are eligible to be paid by a Wholly Discretionary. An ABLE account’s ability to pay for housing and remove the possible loss of SSI income is, in my mind, the single best use of an ABLE account.

Special Needs Trust Fairness Act

Posted on January 26, 2017 by Jim Koewler — No Comments ↓

People with special needs have a new ability to help themselves.

On December 13, 2016, President Obama signed the Special Needs Trust Fairness Act (buried within a larger law titled the 21st Century Cures Act.) The Special Needs Trust Fairness Act allows someone with special needs to create his/her own Special Needs Trust. (For background on Special Needs Trust, read the April 2, 2015 installment of this blog.)

Before adoption of the SNT Fairness Act, only a parent or grandparent of the special needs person or a court could create a SNT. As awful as it sounds, the Congress that first memorialized the concept of a Special Needs Trust must have assumed that all people with special needs lacked the ability to handle their own affairs. Of course, that was a terribly incorrect assumption. Unfortunately, the law that allows Special Needs Trusts wasn’t updated for years. Finally, that oversight is fixed.

So, what does this mean? If a person needs to create a Special Needs Trust, he/she can do it. A parent, grandparent, or court isn’t necessary. The person with special needs now has control that wasn’t available before.

Here’s an example. Some people with special needs have injury claims against someone. (Perhaps the person is the victim of medical malpractice or an industrial accident. Perhaps the injury is even the cause of the person’s disability.) The injury claim can take a long time to pursue through the court system. During the interim, the person may have started to receive Supplemental Security Income for food and housing and Medicaid for medical care. When the court award or settlement payment arrives, it can cause a break in Medicaid coverage (because the new money is “income” during the month it arrives) and long term suspension of SSI payments (because the person will have more “savings” that SSI allows.)

To avoid the loss of these benefits, the person with special needs often places the judgment/settlement award into a Special Needs Trust. Rarely was there a Special Needs Trust waiting for use. The person usually needs a Special Needs Trust set up about the time that the award is going to arrive. Before the SNT Fairness Act, the person needed a parent, grandparent, or court order to create the SNT. Now, he/she can set up the SNT directly.

Medicare Annual Enrollment is here. Choose your insurance plan wisely.

Posted on October 20, 2016 by Jim Koewler — No Comments ↓

This week’s blog continues the break from the ongoing discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled (ABD) program. That series will resume soon.

Medicare’s “Open Enrollment” period has arrived for next year’s coverage. To have an insurance plan for the upcoming year to help cover the 20% of medical costs that Medicare will not cover, a Medicare-eligible person must enroll in the plan of his or her choice by December 7. (Open Enrollment is October 15 to December 7 each year.) The new policy will take effect on January 1.

People who have Medicare available to them have three basic options for medical insurance. So called “straight Medicare” provides the insured person with Medicare coverage for 80% of medical costs. The insured person is responsible for the other 20% as a co-pay. People who do not wish to pay the 20% co-pay can purchase either Advantage Plans or Medicare Supplements.An Advantage Plan is an insurance policy that pays most or all of the 20% of medical costs that Medicare does not cover. The amount of the insured’s new co-pay depends on the Advantage Plan that the insured chooses. Generally, the higher the premium, the lower the co-pay. There are plenty of other options that change the price and co-pay as well. (An Advantage Plan actually steps into the shoes of Medicare and pays the 80% in addition to whatever costs exceed the insured’s co-pay. The Advantage Plan insurance company receives both the premium of the individual insured person and a payment from the Medicare program in lieu of Medicare’s usual 80% payment towards the insured’s costs. The Advantage Program’s coverage of Medicare’s portion of costs is generally not noticed by the insured.) Because an Advantage Plan is a “replacement” for Medicare, it can have some limitations in covered services or in approved service providers as compared to “straight Medicare.” In addition, there are many different Advantage Plans, each offering slightly different coverage, from which to choose.

When an insured person has a Medicare Supplement (sometimes called a Medi-Gap policy,) the Medicare program pays its usual 80% pays the insured’s medical costs, and the Supplement pays the 20% not covered by the Medicare office. Medicare Supplements, because they supplement Medicare rather than replace Medicare, do not generally have any differences from Medicare in covered services or approved service providers. There are many different Supplements. The differences among Supplements generally is small, but worth examining.

Please be aware, it isn’t necessary to have Medicare additional insurance. Someone can choose “straight” Medicare in which he or she must cover the 20% Medicare co-pay by himself or herself. It costs nothing in a year during which that person has no medical issues. It can, though, without warning, cost lots of money if that person has an accident or needs an operation, for example. Each person on “straight” Medicare could pay 20% of $0 or 20% of $200,000, or 20% of any amount depending on what happens during that year. Before choosing traditional Medicare, you must decide whether you wish to assume the risk of a big surprise in health costs during the coming year.

The monthly premium for an Advantage Plan is generally much lower than the premium for a Medicare Supplements. (Some Advantage Plans have a $0 premium, in fact.) An Advantage Plan’s limitations on services and providers is the trade-off for a lower premium. The most glaring difference, though, between Advantage Plans on the one hand and both straight Medicare and Medicare Supplements on the other hand is the coverage of post-hospitalization rehabilitation services.

With straight Medicare and Medicare Supplements, an insured person who has been admitted to the hospital for three days and then needs post-hospitalization rehab can have 100 days of rehab coverage. Someone on an Advantage Plan may have rehab coverage end before 100 days have elapsed. An Advantage Plan (because it has rules slightly different than straight Medicare) can determine that rehab is not helping the insured person and can end coverage. Sometimes the rehab coverage is stopped as early as day 20. (Advantage Plans used to base their decisions on ending rehab payments on on day-to-day progress reports. Now, Advantage Plans must now look at week-to-week comparisons or even bi-weekly comparisons.) Still, rehab can be very expensive, so Advantage Plans have a strong incentive to end rehab coverage as early as possible.

(“Admission” to the hospital rather than “under observation” in the hospital is a very important distinction in the availability of any insurance coverage for rehab. That issue is not handled differently by Medicare, Advantage Plans, or Medicare Supplements, though. Consequently, the “admission” versus “observation status” issue is not important to today’s discussion. I mention it here as a side note because it is an important issue for all people insured through Medicare.)

Even though we are in an “open” enrollment period, someone covered by any form of Medicare cannot simply switch plans on demand. Medicare, unlike the Affordable Care Act, allows the insurance company to make underwriting decisions on individual plans. Trying to move to a plan that provides more coverage may require a medical examination and will certainly require answering medical questions. Generally, I urge people to move to a Medicare Supplement, if they can (as long as the premium isn’t prohibitive.)

If a Medicare Supplement is not available, an alternative is an Advantage Plan or even straight Medicare with a separate Hospital Indemnity policy. (The cost of an Advantage Plan plus Hospital Indemnity policy is usually less than a Medicare Supplement.) A Hospital Indemnity policy is subject to underwriting, though. Someone who exhibits symptoms that are a concern for the Hospital Indemnity insurance company may not be able to get such a policy.

Without considering the cost of premiums, my preferences for medical insurance is a Medicare Supplement. My second choice is an Advantage Plan with a Hospital Indemnity policy. My third choice is straight Medicare. Finally, my fourth choice is an Advantage Plan. (Because I provide legal services to people who need long term care or that have special needs, my clients have health concerns. That possibly causes my preference for the broad coverage that supplements provide.)

No matter your preference, seek out a Medicare insurance agent that represents more than one insurer. Don’t just assume that the person at the table in your local grocery, pharmacy, or department store can give you all the options. If the person at that table sells insurance for just one company, please consider whether you want to find more options before deciding.

But, don’t go it alone. Get help from an insurance broker. These insurance plans are complicated, and there are many different choices among Advantage Plans and among supplements. Let someone help you figure out your best options. Their help doesn’t cost you anything. They’re paid by the insurer you choose.

Choose your plan wisely.

Acknowledgement: Thanks to Michael Whitaker of Premier Solutions Group in Brookpark, Ohio for helping me understand Hospital Indemnity insurance.

Ohio Medicaid changes “Aged Blind Disabled” Eligibility

Posted on April 28, 2016 by Jim Koewler — No Comments ↓

Ohio Medicaid will change its rules on who can participate in the Medicaid Aged, Blind, and Disabled (“ABD”) program. The change will take effect in July 2016 for new applicants and will take effect with the annual renewals for existing Medicaid enrollees starting in January 2017. (The dates are subject to federal approval.) Ohio’s aim is to spend less on Medicaid. (It is a HUGE part of the state budget.)

Under federal Medicaid law, states can choose from two different ABD eligibility systems (meaning that the states can choose from two different SPENDING systems for their ABD programs.) The Ohio Department of Medicaid and the Ohio Department of Health Transformation, with a supporting change in the law by the state legislature, will change Ohio’s ABD Medicaid program from following section 209(b) of the federal Medicaid law to following section 1634 of the federal Medicaid law. Under the 209(b) system (the one that Ohio is leaving,) the states can make certain of their own choices on who is eligible for ABD coverage. Under the 1634 system (the one into which Ohio is moving,) the states must follow federal guidelines on eligibility.

The biggest differences between most states’ (including Ohio’s) 209(b) eligibility rules and the federal rules were in financial eligibility. States that followed 209(b) could have limits on income and assets that were tighter than the federal standards. That gave the appearance of keeping more people off of Medicaid ABD coverage than federal rules would have allowed.

Ohio’s rules under its 209(b) sy(tem (the old system) allowed people who had medical expenses to reduce their countable income by the amount of those medical expenses. This is called a “monthly spend down.” That spend down measurement allowed some people who had too much income “back” into Medicaid coverage. (A future installment will discuss the spend down in more detail.) The new system (under section 1634) will not allow spend downs to reduce countable income.

People with too much income won’t be left without coverage. People who have too much income to qualify for Ohio’s ABD Medicaid will be eligible for private insurance under the Affordable Care Act. Most anyone who would have qualified for ABD coverage through a spend down under Ohio’s old system will probably qualify for a highly subsidized, cost-controlled insurance policy through HealthCare.gov.

Many states followed 209(b) before the Affordable Care Act and its subsidy and cost control requirements made commercial policies affordable to more people. Many of those states have made the switch to 1634 since the Affordable Care Act has been implemented. Ohio is now following that trend.

In the installments ahead, we will discuss some of the details of this switch.

Legal Issues when someone has Dementia – The Spouse’s Advance Directives

Posted on January 28, 2016 by Jim Koewler — No Comments ↓

This week’s blog continues the discussion of Legal Issues when someone has Dementia. The introductory installment (April 30, 2015) put forth the issue of “Who can speak for someone with dementia?” The May 14, 2015 installment discussed the situation where the person with dementia has Advance Directives in place. The May 21, 2015 installment discussed the legal issues in determining whether a dementia sufferer can choose to have new Advance Directives prepared. The May 30, 2015 installment discussed options in preparing a Health Care Power of Attorney. The June 4, 2015 installment discussed how to decide whether to prepare a Living Will. The June 11, 2015 installment discussed some of the basic issues in preparing a General Power of Attorney. The June 18, 2015 installment discussed the importance of making the General Power of Attorney “durable.” The June 25, 2015 installment discussed the importance of NOT making the General Power of Attorney “springing.” The July 2, 2015 installment discussed revoking prior Powers of Attorney. The July 9, 2015 installment discussed Do Not Resuscitate orders. The July 16, 2015 installment discussed the Right of Disposition designation. The July 23, 2015 installment discussed the Will (or Last Will and Testament.) The July 31, 2015 installment discussed beneficiary designations on life insurance policies, IRAs, annuities, etc. The August 6, 2015 installment discussed whether to pre-plan a funeral. The August 14, 2015 installment discussed choosing a final resting place. The August 28, 2015 installment discussed pre-planning the funeral ceremony. The September 3, 2015 installment discussed when and how to pay for the pre-planned funeral. The September 10, 2015 installment discussed medical insurance choices. The September 17, 2015 installment discussed long term care insurance. The September 24, 2015 installment discussed how an elder law attorney can help. The October 1, 2015 installment introduced the concept of guardianship. The October 8, 2015 installment discussed the application process for guardianship. The October 22, 2015 installment discussed the family disputes that can arise during a Guardianship proceeding. The November 12, 2015 installment discussed the Probate Court’s examination of the alleged incompetence of the proposed ward in a guardianship proceeding. The November 19, 2015 installment discussed the Probate Court’s examination of “less restrictive alternatives” to guardianship. The December 4, 2015 installment discussed the Probate Court’s examination of who should be the guardian. The December 10, 2015 installment discussed the difficulties that a family member might face if appointed guardian. The December 17, 2014 installment discussed the difficulties that a family might face if a professional guardian is appointed for a loved one. The January 14, 2016 installment discussed the termination of a guardianship. The January 21, 2016 installment discussed alternatives to guardianship. Today’s installment will discuss the need to revisit the spouse’s Advance Directives and other planning issues.

Someone who has a disease that causes dementia often is married. The dementia of the one spouse might leave the other spouse without someone to make decisions in an emergency or in the event of his or her own cognitive decline.

Most married couples, if they have prepared Powers of Attorney, have named each other the Agents in those Power of Attorney documents. The spouse that now suffers from dementia is no longer the appropriate person to have as the Agent for the “well spouse.” That “well spouse” should have new Power of Attorney documents prepared, if possible.

The “well spouse” may have successor Agents named in his or her Power of Attorney. If so, that makes new Powers of Attorney less urgent but no less important. If something were to happen to the “well spouse” that made it necessary for an Agent to start making decisions, there could be a delay in accepting the successor Agent while awaiting confirmation (from a doctor, perhaps) that the primary Agent (the spouse with dementia) cannot act as Agent. That delay can’t be good for the second spouse. So, when someone suffers from dementia, the spouse of that someone should redo his or her Powers of Attorney and name someone other than the “ill spouse” as Agent and the successor Agents. With the new Powers of Attorney, the spouse who does not have dementia should also prepare a HIPAA release and a living will (if wanted.)

If the “well spouse” has new Advance Directives set up, he or she should also at least consider the other preparations that have been discussed in this series:
– Long Term Care plan,
– Do Not Resuscitate Order (if appropriate,)
– Right of Disposition designation (naming who is in charge of funeral implementation),
– Last Will and Testament,
– Updating beneficiary and “transfer on death” designations on assets and financial accounts,
– Pre-planning a funeral and final resting place,
– Medical Insurance,
– Consider Long Term Care insurance,
– Designate someone whom the “well spouse” would prefer to be guardian, if one should be necessary (sometimes included in a General Power of Attorney document,) and
– Talk with an Elder Law Attorney about what planning for the future.

These new Advance Directives and other preparations aren’t necessary the next day after learning that one’s spouse has dementia, but the sooner the better. Certainly, a month should be long enough to have the new Advance Directives prepared.

(Ed. Note: This is the end, for now, of the series on Legal Issues when someone has Dementia.)

Legal Issues when someone has Dementia – Alternatives to Guardianship

Posted on January 21, 2016 by Jim Koewler — No Comments ↓

This week’s blog continues the discussion of Legal Issues when someone has Dementia. The introductory installment (April 30, 2015) put forth the issue of “Who can speak for someone with dementia?” The May 14, 2015 installment discussed the situation where the person with dementia has Advance Directives in place. The May 21, 2015 installment discussed the legal issues in determining whether a dementia sufferer can choose to have new Advance Directives prepared. The May 30, 2015 installment discussed options in preparing a Health Care Power of Attorney. The June 4, 2015 installment discussed how to decide whether to prepare a Living Will. The June 11, 2015 installment discussed some of the basic issues in preparing a General Power of Attorney. The June 18, 2015 installment discussed the importance of making the General Power of Attorney “durable.” The June 25, 2015 installment discussed the importance of NOT making the General Power of Attorney “springing.” The July 2, 2015 installment discussed revoking prior Powers of Attorney. The July 9, 2015 installment discussed Do Not Resuscitate orders. The July 16, 2015 installment discussed the Right of Disposition designation. The July 23, 2015 installment discussed the Will (or Last Will and Testament.) The July 31, 2015 installment discussed beneficiary designations on life insurance policies, IRAs, annuities, etc. The August 6, 2015 installment discussed whether to pre-plan a funeral. The August 14, 2015 installment discussed choosing a final resting place. The August 28, 2015 installment discussed pre-planning the funeral ceremony. The September 3, 2015 installment discussed when and how to pay for the pre-planned funeral. The September 10, 2015 installment discussed medical insurance choices. The September 17, 2015 installment discussed long term care insurance. The September 24, 2015 installment discussed how an elder law attorney can help. The October 1, 2015 installment introduced the concept of guardianship. The October 8, 2015 installment discussed the application process for guardianship. The October 22, 2015 installment discussed the family disputes that can arise during a Guardianship proceeding. The November 12, 2015 installment discussed the Probate Court’s examination of the alleged incompetence of the proposed ward in a guardianship proceeding. The November 19, 2015 installment discussed the Probate Court’s examination of “less restrictive alternatives” to guardianship. The December 4, 2015 installment discussed the Probate Court’s examination of who should be the guardian. The December 10, 2015 installment discussed the difficulties that a family member might face if appointed guardian. The December 17, 2014 installment discussed the difficulties that a family might face if a professional guardian is appointed for a loved one. The January 14, 2016 installment discussed the termination of a guardianship. Today’s installment will discuss alternatives to guardianship.

When someone has dementia and he or she seems to no longer have the ability to make decisions necessary to prepare powers of attorney and, for whatever reason, a guardianship is not appropriate or not wanted, options for having one person specific person able to make decisions have become limited.

Now, even though the person seems to longer have the ability to prepare powers of attorney, he or she might have some lucid moments in which to make such decisions. The family can seek the help of an estate planning attorney. If the attorney is satisfied that the person can decide to sign powers of attorney, the attorney can prepare them. These new powers of attorney designate who can make decisions when the person’s lucid moments have gone.

In the absence of the person’s own ability to make decisions and the absence of someone appointed to make decisions (ether through a power of attorney or a guardianship,) the caregivers for someone with dementia have to rely on guidance from the next of kin (which can be very tricky if the family disagrees.)

If even input from the next of kin isn’t available, the caregivers are left to their consciences. They must do what is necessary for the person with dementia and do what they know in their hearts to be the right thing to do.

With the difficulties, inconveniences, and sometimes strife that can come from a guardianship proceeding, some families in which someone suffers from dementia might choose to forego guardianship and, instead, muddle through as best they can. I can’t fault families that make this choice.

Unfortunately, some people with a disease that causes dementia will not have a designated decision-maker. In such cases, caregivers are forced to do their best with only their own caring hearts and their experience to guide them.

Legal Issues when someone has Dementia – Terminating a Guardianship

Posted on January 14, 2016 by Jim Koewler — No Comments ↓

This week’s blog continues the discussion of Legal Issues when someone has Dementia. The introductory installment (April 30, 2015) put forth the issue of “Who can speak for someone with dementia?” The May 14, 2015 installment discussed the situation where the person with dementia has Advance Directives in place. The May 21, 2015 installment discussed the legal issues in determining whether a dementia sufferer can choose to have new Advance Directives prepared. The May 30, 2015 installment discussed options in preparing a Health Care Power of Attorney. The June 4, 2015 installment discussed how to decide whether to prepare a Living Will. The June 11, 2015 installment discussed some of the basic issues in preparing a General Power of Attorney. The June 18, 2015 installment discussed the importance of making the General Power of Attorney “durable.” The June 25, 2015 installment discussed the importance of NOT making the General Power of Attorney “springing.” The July 2, 2015 installment discussed revoking prior Powers of Attorney. The July 9, 2015 installment discussed Do Not Resuscitate orders. The July 16, 2015 installment discussed the Right of Disposition designation. The July 23, 2015 installment discussed the Will (or Last Will and Testament.) The July 31, 2015 installment discussed beneficiary designations on life insurance policies, IRAs, annuities, etc. The August 6, 2015 installment discussed whether to pre-plan a funeral. The August 14, 2015 installment discussed choosing a final resting place. The August 28, 2015 installment discussed pre-planning the funeral ceremony. The September 3, 2015 installment discussed when and how to pay for the pre-planned funeral. The September 10, 2015 installment discussed medical insurance choices. The September 17, 2015 installment discussed long term care insurance. The September 24, 2015 installment discussed how an elder law attorney can help. The October 1, 2015 installment introduced the concept of guardianship. The October 8, 2015 installment discussed the application process for guardianship. The October 22, 2015 installment discussed the family disputes that can arise during a Guardianship proceeding. The November 12, 2015 installment discussed the Probate Court’s examination of the alleged incompetence of the proposed ward in a guardianship proceeding. The November 19, 2015 installment discussed the Probate Court’s examination of “less restrictive alternatives” to guardianship. The December 4, 2015 installment discussed the Probate Court’s examination of who should be the guardian. The December 10, 2015 installment discussed the difficulties that a family member might face if appointed guardian. The December 17, 2014 installment discussed the difficulties that a family might face if a professional guardian is appointed for a loved one. Today’s installment will discuss the termination of a guardianship.

When the person’s disease has taken away the decision-making ability and the person has not prepared advance directives appointing someone else to make decisions, the next legal alternative is guardianship. The guardianship can be terminated if the ward has few enough assets that a guardianship of the estate seems no longer necessary or advisable.

When considering the termination of a guardianship, the probate court must find that the termination of a guardianship is in the best interest of the ward before terminating. I must admit that I feel this “best interest of the ward” seems, to me, an impediment to the termination of almost all guardianships except where the ward has gotten “better” and is no longer incompetent or has passed away. For a ward that remains incompetent, the termination of a guardianship takes away the person who can make health care decisions for the ward. That seems, to me, an overriding reason not to allow a guardianship to terminate.

If the ward passes away, the guardianship ends automatically. The guardian will need to prepare a final accounting of the now-deceased ward’s business affairs, but the ward’s demise ends the need for a guardian.

Also, if the ward no longer needs a guardian, the probate court can end the guardianship once the court is comfortable of the ward’s renewed ability to handle his or her own affairs.

A guardianship can, theoretically, be terminated upon a demonstration that less restrictive alternatives have been put in place since the commencement of the guardianship. (This one is unusual because the probate court has every reason to wonder why these alternatives were not in place before the guardianship application.)

A guardianship that became necessary because the ward repeatedly tried to elope from a care community can be terminated if the ward’s health deteriorates, taking away the mobility necessary to elope. (A termination for this reason is unusual because the deterioration of the ward’s health that took away the ward’s mobility also makes the life expectancy short, making a change in the guardianship status seem not worth pursuing.)

A guardianship can also be terminated if the ward’s assets fall to a low level (in Ohio, that amount is $25,000.) At that level, a ward has very little with which to pay the guardian for services. This possibility of terminating a guardianship because of poverty disturbs me. The guardianship of the person is at least as important as the guardianship of the estate, but the ward’s need to have someone look out for his or her health and bodily welfare does not end because of poverty. I can’t see how terminating a guardianship because of poverty is in the ward’s best interest, but it does happen.

Legal Issues when someone has Dementia – Difficulties with a Professional Guardian

Posted on December 17, 2015 by Jim Koewler — No Comments ↓

This week’s blog continues the discussion of Legal Issues when someone has Dementia. The introductory installment (April 30, 2015) put forth the issue of “Who can speak for someone with dementia?” The May 14, 2015 installment discussed the situation where the person with dementia has Advance Directives in place. The May 21, 2015 installment discussed the legal issues in determining whether a dementia sufferer can choose to have new Advance Directives prepared. The May 30, 2015 installment discussed options in preparing a Health Care Power of Attorney. The June 4, 2015 installment discussed how to decide whether to prepare a Living Will. The June 11, 2015 installment discussed some of the basic issues in preparing a General Power of Attorney. The June 18, 2015 installment discussed the importance of making the General Power of Attorney “durable.” The June 25, 2015 installment discussed the importance of NOT making the General Power of Attorney “springing.” The July 2, 2015 installment discussed revoking prior Powers of Attorney. The July 9, 2015 installment discussed Do Not Resuscitate orders. The July 16, 2015 installment discussed the Right of Disposition designation. The July 23, 2015 installment discussed the Will (or Last Will and Testament.) The July 31, 2015 installment discussed beneficiary designations on life insurance policies, IRAs, annuities, etc. The August 6, 2015 installment discussed whether to pre-plan a funeral. The August 14, 2015 installment discussed choosing a final resting place. The August 28, 2015 installment discussed pre-planning the funeral ceremony. The September 3, 2015 installment discussed when and how to pay for the pre-planned funeral. The September 10, 2015 installment discussed medical insurance choices. The September 17, 2015 installment discussed long term care insurance. The September 24, 2015 installment discussed how an elder law attorney can help. The October 1, 2015 installment introduced the concept of guardianship. The October 8, 2015 installment discussed the application process for guardianship. The October 22, 2015 installment discussed the family disputes that can arise during a Guardianship proceeding. The November 12, 2015 installment discussed the Probate Court’s examination of the alleged incompetence of the proposed ward in a guardianship proceeding. The November 19, 2015 installment discussed the Probate Court’s examination of “less restrictive alternatives” to guardianship. The December 4, 2015 installment discussed the Probate Court’s examination of who should be the guardian. The December 10, 2015 installment discussed the difficulties that a family member might face if appointed guardian. Today’s installment will discuss the difficulties that a family might face if a professional guardian is appointed for a loved one.

When the person’s disease has taken away the decision-making ability and the person has not prepared advance directives appointing someone else to make decisions, the next legal alternative is guardianship. To establish a guardianship, a Probate Court must determine that the proposed ward (the person with the dementia-related disease) is, in fact, incompetent (i.e., unable to handle his or her own affairs because of a mental impairment) as discussed two weeks ago. If the court determines incompetence, the court must then determine if there is a less restrictive alternative available, as discussed last week. If the court determines that the proposed ward is incompetent and that no less restrictive alternatives are available or will work with this proposed ward, the Probate Court must then determine who is the best available guardian. While, after the discussion in last week’s installment, a family member or friend may not wish to act as guardian, there can also be difficulties for a family if an outsider is guardian.

An outside-the-family guardian is sort of like a new family member. Everyone has to work at the relationship. It can’t be one-sided and be successful. The family members (the real ones) must get used to the idea that a relative stranger will be making decisions for a loved one, OR the family members must make an effort (perhaps a great effort) to help the guardian be less of a stranger. The guardian won’t automatically know the relationship that the family has had with the ward in the past. Neither will the guardian automatically know the relationship that the family wishes to have with the ward going forward. (Obviously, something has happened to the ward that has triggered the need for a guardian, and that same something that has happened to the ward will probably also affect relationships with family and friends.)

Unfortunately, to a professional guardian, the ward is part of the job. The guardian may have several wards at the same time. No one ward is enough to support a professional guardian. (If a professional guardian makes enough money to support himself or herself from just one or two wards, a close examination of the guardian’s handling of the wards’ money is in order.) Because the guardian will have several wards, a close relationship with the wards’ different families is difficult. (That being said, many if not most wards of professional guardians have no family remaining involved in their lives. The guardian is the closest thing that these wards have to family.)

The family may not agree with how the guardian handles the ward’s money. In fact, the family may be uncomfortable or even outraged that some of the ward’s money is being used to pay the guardian for services. Well, that’s just tough! No family member was both willing and able to serve as guardian. A professional guardian should not be forced to serve as guardian for free if the ward has money that must be managed. Handling the money is time-consuming. (If the ward has no money, a professional guardian may not be involved, but a volunteer guardian might.) Now, if the family has real concerns that the guardian is mishandling the ward’s money, the family may monitor the guardian’s work through the periodic account reports that the guardian must file with the Probate Court. If those account reports show excessive fees for the guardian or other money mismanagement, the family may challenge the reports in a Court hearing.

Finally, the most difficult situation might be when the ward is married. The spouse might not be able to be the guardian. (Perhaps the spouse has his or her own health issues.) The guardian’s duty to look out for the ward can be really tough on the spouse. A decision that the ward (before needing a guardian) might have made for the good of the marriage may not be the same decision that the guardian makes because the guardian isn’t in a position to make sacrifices for the good of the marriage. The guardian might choose a care community that is not close to the spouse’s home, making it harder for the spouse to visit. The guardian might have to take control of half of the couple’s finances to make sure that the ward’s needs can be paid for. It could be almost impossible to maintain the same relationship that the couple had before a guardianship became necessary.

While there are reasons that a family member may not wish to be guardian to a loved one, there are also reasons that the family member may not wish to have a non-family-member guardian for a loved one. That dilemma often leads to what amounts to almost a game of stare-down among family members. The guardian is the family member who “blinks” first.

Note: With Christmas and New Year’s Day coming, I do not expect to post a blog installment for the next two weeks. Happy Holidays!

Legal Issues when someone has Dementia – Difficulties for a Family Member as Guardian

Posted on December 10, 2015 by Jim Koewler — No Comments ↓

This week’s blog continues the discussion of Legal Issues when someone has Dementia. The introductory installment (April 30, 2015) put forth the issue of “Who can speak for someone with dementia?” The May 14, 2015 installment discussed the situation where the person with dementia has Advance Directives in place. The May 21, 2015 installment discussed the legal issues in determining whether a dementia sufferer can choose to have new Advance Directives prepared. The May 30, 2015 installment discussed options in preparing a Health Care Power of Attorney. The June 4, 2015 installment discussed how to decide whether to prepare a Living Will. The June 11, 2015 installment discussed some of the basic issues in preparing a General Power of Attorney. The June 18, 2015 installment discussed the importance of making the General Power of Attorney “durable.” The June 25, 2015 installment discussed the importance of NOT making the General Power of Attorney “springing.” The July 2, 2015 installment discussed revoking prior Powers of Attorney. The July 9, 2015 installment discussed Do Not Resuscitate orders. The July 16, 2015 installment discussed the Right of Disposition designation. The July 23, 2015 installment discussed the Will (or Last Will and Testament.) The July 31, 2015 installment discussed beneficiary designations on life insurance policies, IRAs, annuities, etc. The August 6, 2015 installment discussed whether to pre-plan a funeral. The August 14, 2015 installment discussed choosing a final resting place. The August 28, 2015 installment discussed pre-planning the funeral ceremony. The September 3, 2015 installment discussed when and how to pay for the pre-planned funeral. The September 10, 2015 installment discussed medical insurance choices. The September 17, 2015 installment discussed long term care insurance. The September 24, 2015 installment discussed how an elder law attorney can help. The October 1, 2015 installment introduced the concept of guardianship. The October 8, 2015 installment discussed the application process for guardianship. The October 22, 2015 installment discussed the family disputes that can arise during a Guardianship proceeding. The November 12, 2015 installment discussed the Probate Court’s examination of the alleged incompetence of the proposed ward in a guardianship proceeding. The November 19, 2015 installment discussed the Probate Court’s examination of “less restrictive alternatives” to guardianship. The December 4, 2015 installment discussed the Probate Court’s examination of who should be the guardian. Today’s installment will discuss the difficulties that might arise for a family member acting as guardian.

When the person’s disease has taken away the decision-making ability and the person has not prepared advance directives appointing someone else to make decisions, the next legal alternative is guardianship. To establish a guardianship, a Probate Court must determine that the proposed ward (the person with the dementia-related disease) is, in fact, incompetent (i.e., unable to handle his or her own affairs because of a mental impairment) as discussed two weeks ago. If the court determines incompetence, the court must then determine if there is a less restrictive alternative available, as discussed last week. If the court determines that the proposed ward is incompetent and that no less restrictive alternatives are available or will work with this proposed ward, the Probate Court must then determine who is the best available guardian, often looking to family members. A family member offering to act as guardian should be aware of the expectations of a guardian and what challenges might be ahead.

In Ohio, a guardian needs training The introductory guardianship course is 6 hours of training in a day-long course. The training requirements became tighter, especially for attorneys, in 2015 as a result of a scandal in Columbus when certain professional guardians were found to have responsibility for more than 300 wards. After a series of newspapers articles on the county’s guardianship program, questions arose regarding the level of involvement that a guardian could have with so many wards. (Because the training is so new and is supposed to apply to guardians already in service as well as to new guardians, the training requirements are only slowly being implemented. As a result, family members and friends volunteering to be guardians may not be required to undergo training immediately, especially in populous counties.)

In addition to spending time in training, the family member willing to be guardian has to undergo the examination of the court regarding his or her fitness to serve as guardian. That will include a background check tied to the would-be guardian’s social security number.

If the guardianship is contested or there is a family fight over who should serve as guardian, the examination will go far beyond the background check. The prospective ward and the other family members who oppose the guardianship or the would-be guardian might pull out all the stops. There might be very demanding information requests during the “discovery” process. (Remember, this is court litigation.) There might also be very harsh testimony in the court’s hearings. (Despite the oath to tell the truth, the whole truth, and nothing but the truth, do not be surprised if the testimony includes accusations, feelings, gossip, and exaggeration. A contested guardianship is very much like an ugly divorce trial. It’s not just “the facts and nothing but the facts.” There’s lots of anger.)

If the family member becomes guardian, the guardian becomes responsible for all of the affairs of the ward. Unless the guardian is for the person only, the guardian is responsible for the ward’s business affairs. Imagine balancing someone’s checkbook and then having someone double-check your work. That’s not far off from the court’s oversight of a guardian’s handling of the ward’s money.

But the business affairs can go beyond just the checkbook. One friend of mine serving as a guardian had to determine whether to have a tree in the yard cut down. Guardianship is a real hands-on job.

In a particularly painful case that I’ve experienced, a daughter reluctantly agreed to be her mother’s guardian. Her mother was in a nursing home. The guardian dutifully paid for the nursing home every month until Mom’s money had all been spent. (The guardian had not talked with an elder law attorney about the possibility of sheltering any of Mom’s life savings from the costs of long term care. Even if she had brought in an elder law attorney, the sheltering of assets within a guardianship is tricky because of the obligation to use the ward’s assets only for the good of the ward.) When the money was gone, the daughter put Mom’s real estate up for sale. (Unfortunately, this was during the recent real estate market meltdown, so no offers came.) At the same time, the daughter/guardian applied for Medicaid. The Medicaid caseworker, however, denied the application incorrectly. The guardian, not knowing what else to do and finding no one (including the nursing home’s social worker) who would help, all but collapsed emotionally under the pressure. After more than two years of non-payment for Mom’s care, the nursing home sued the guardian personally, alleging that she was negligent in managing her Mom/ward’s affairs.

As if managing the ward’s business affairs weren’t difficult enough, the guardian (unless a guardian of the estate only) is responsible for the ward’s personal affairs. That means that the guardian has to make choices on where the ward will live, who can visit the ward, whether a reluctant ward will be required to shower, and many other similar choices. Some of these can be pretty tough to handle emotionally. For example, the guardian might have to decide whether to maintain life support for a gravely ill ward. Even more often, a guardian must decide whether to keep up an active fight to maintain an aging ward’s health or to adopt a symptom and pain management approach such as palliative care or hospice care. In other words, some of these decisions are life-and-death decisions.

It can be very hard to be the guardian for a loved one.

Legal Issues when someone has Dementia – Picking the Best Guardian

Posted on December 4, 2015 by Jim Koewler — No Comments ↓

Note: There was no blog last week (Thanksgiving.)

This week’s blog continues the discussion of Legal Issues when someone has Dementia. The introductory installment (April 30, 2015) put forth the issue of “Who can speak for someone with dementia?” The May 14, 2015 installment discussed the situation where the person with dementia has Advance Directives in place. The May 21, 2015 installment discussed the legal issues in determining whether a dementia sufferer can choose to have new Advance Directives prepared. The May 30, 2015 installment discussed options in preparing a Health Care Power of Attorney. The June 4, 2015 installment discussed how to decide whether to prepare a Living Will. The June 11, 2015 installment discussed some of the basic issues in preparing a General Power of Attorney. The June 18, 2015 installment discussed the importance of making the General Power of Attorney “durable.” The June 25, 2015 installment discussed the importance of NOT making the General Power of Attorney “springing.” The July 2, 2015 installment discussed revoking prior Powers of Attorney. The July 9, 2015 installment discussed Do Not Resuscitate orders. The July 16, 2015 installment discussed the Right of Disposition designation. The July 23, 2015 installment discussed the Will (or Last Will and Testament.) The July 31, 2015 installment discussed beneficiary designations on life insurance policies, IRAs, annuities, etc. The August 6, 2015 installment discussed whether to pre-plan a funeral. The August 14, 2015 installment discussed choosing a final resting place. The August 28, 2015 installment discussed pre-planning the funeral ceremony. The September 3, 2015 installment discussed when and how to pay for the pre-planned funeral. The September 10, 2015 installment discussed medical insurance choices. The September 17, 2015 installment discussed long term care insurance. The September 24, 2015 installment discussed how an elder law attorney can help. The October 1, 2015 installment introduced the concept of guardianship. The October 8, 2015 installment discussed the application process for guardianship. The October 22, 2015 installment discussed the family disputes that can arise during a Guardianship proceeding. The November 12, 2015 installment discussed the Probate Court’s examination of the alleged incompetence of the proposed ward in a guardianship proceeding. The November 19, 2015 installment discussed the Probate Court’s examination of “less restrictive alternatives” to guardianship. Today’s installment will discuss the Probate Court’s examination of who should be the guardian.

When the person’s disease has taken away the decision-making ability and the person has not prepared advance directives appointing someone else to make decisions, the next legal alternative is guardianship. To establish a guardianship, a Probate Court must determine that the proposed ward (the person with the dementia-related disease) is, in fact, incompetent (i.e., unable to handle his or her own affairs because of a mental impairment) as discussed two weeks ago. If the court determines incompetence, the court must then determine if there is a less restrictive alternative available, as discussed last week. If the court determines that the proposed ward is incompetent and that no less restrictive alternatives are available or will work with this proposed ward, the Probate Court must then determine who is the best available guardian.

When a proposed ward is determined to be incompetent and to have no viable “less restrictive alternative,” the probate court must decide whether the applicant is the appropriate guardian. If the proposed ward’s family has some sort of internal strife, the choice of guardian is another point that is easy to contend. If the applicant cannot convince the probate court that he or she is the right person to be guardian, the court might consider another family member or another interested person. If no one with a prior connection to the proposed ward is both acceptable to the court and willing to serve as guardian, the probate court will turn to one of its local people (usually an attorney) to act as guardian. (If someone other than the original applicant is to be named guardian, that person may need to complete an application. The medical statement isn’t necessary on this substitute application, so the new application is less time consuming than the original application.)

Acting as a guardian is no small undertaking. It requires a certain amount of training and time dedicated to visit the ward periodically. It also requires time to manage the ward’s finances and property (if the guardian has responsibility for the estate) and to report to the probate court. Because of a series of articles in the “Columbus Dispatch” describing some of the practices of professional guardians and of the probate court in Franklin County, Ohio (the county that includes Columbus,) the state of Ohio has instituted rules requiring more training for guardians and mandating more visits with wards. Guardianship is not a responsibility to be taken lightly.

When a guardian is named, the guardian is put in charge of the ward’s estate and the ward’s person. The guardian being in charge of the ward’s person means that the guardian is in charge of the ward’s health and body. The guardian makes all health care decisions, and the guardian decides where the ward will live. If necessary, the guardian will decide what the ward will where. (That is not an issue except in special circumstances, for example, when a ward wants to dress in summer clothes in the winter when an adverse health consequence might occur.) The guardian even decides who can visit the ward. (This is not usually an issue except when someone is trying to take advantage of the ward or when the guardian is the child of the ward and has some deeply entrenched rivalry with a sibling.) This guardianship of the person power is what allows a guardian to order that a ward must stay in a nursing home when the ward, left to his or her own choice, would leave the nursing home.

The guardian is also put in charge of the ward’s estate. The ward’s estate is all of his or her possessions, money, and other assets. The guardian is now in charge of the ward’s bank account, the ward’s house, the ward’s clothes, the ward’s furniture, and everything else that the ward owns. The guardian must see that the ward’s bills are paid and that the ward’s income actually comes in. (As an example of how detailed the “estate” obligation can be, a friend of mine who acts as a guardian had to approve the removal of a dead tree from the ward’s property.) The guardian must report periodically to the probate court to show proper management of the ward’s assets. The guardian for acting as guardian from the ward’s assets and income. If the guardian also acts as the ward’s attorney (which sometimes happens with professional guardians,) the attorney fees are paid in addition to the guardianship fees. When the ward is married and the guardian is not the spouse (which happens sometimes,) the guardianship over the estate can become very tricky or even contentious because the spouse must share money management with the guardian, an outsider to the marriage.

In some circumstances, a guardian of the estate can be a different guardian than the guardian of the person. That is unusual and can cause disagreements between the guardians. For example, if a guardian of the person wants the ward to live in a particular community and the guardian of the estate does not like that community, the guardian of the estate has the power to withhold payment. As a result, split guardianships are rare.

If a ward is on Medicaid for long term care (which means that the ward has very few assets,) a guardian of the person can be appointed to make non-financial decisions. (Because of the few assets, the need for care, and the Medicaid system, the financial decisions pretty much sort themselves out.) Because of the ward’s limited funds, such guardians-of-the-person only are volunteers. (In fact, I am a volunteer guardian for a gentleman on Medicaid.) A volunteer guardian may be necessary when the ward has no family or when the ward’s family feels incapable of making difficult decisions.