Aging Options Blog : Washington Estate Planning Lawyer & Attorney : Rajiv Nagaich : Aging Options Law Firm : WA Elder Law, Wills & Trusts

I write to you with grave concerns about DSHS's request to shirk its responsibility by having HB 3049/SB 6717 being considered by the legislature for adoption. HB 3049/SB 6717 effectively ask the legislature to pass retroactive laws to disallow DSHS clients, who were illegally denied benefits in the first place, the opportunity to collect those past benefits.

I have some such clients whom I serve as an elder law attorney. These clients are old and/or disabled and do not have much of a voice, other than yours. DSHS first denied these clients benefits and when caught is asking the legislature to retroactively limit the payout to no more than 90 days.

The only reason DSHS got caught is because I and other attorneys took their case pro bono and won at the Supreme Court level. (See Jenkins v. DSHS, 160 Wn.2d 466, May 3, 2007). I have no financial motive to advocate for this position other than seeing to it that the clients who won a victory in court should not be let down by the legislature because the client has still not been paid back the benefits owed.

I understand the budgetary constraints, but it is a shame that DSHS would resort to have their problems covered on the backs of those who are broken and beat down to begin with. Let them get rid of the significant management fluff they have and support amongst their ranks to manage costs instead of wasting time on such efforts.

I will also share with you my utter disgust by the presentation made by DSHS representatives to the House committee suggesting that the bill is only a technical correction and nothing more. Not only do I differ in that position, but think it is outright fraud on part of DSHS not to disclose that the real purpose behind the bill is to shirk on its duty to pay benefits that it wrongfully denied in the first place.

The old and disabled are counting on you to prevent this injustice.

Best regards, 

Rajiv Nagaich
 

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My mother is 79, and she just recently moved up here, the problem is, she cannot walk, and she needs 24-hour care. Does she have to spend all her money before Medicaid will help her out?

 The short answer is No. If you were to go down to DSHS and say, “I have my mom, she is unable to take care of her own needs, and she needs some assistance.” They will provide help, but only if she has no more than $2000 to her name. That is the general rule.

But just like estate taxes, there are ways to do planning around the whole thing. In order to get to that $2000 level, she does not necessarily have to spend the rest of her money on nursing homes, medication, etc. The first questions that need to be asked of yourself are: What are the issues she is dealing with? & What is the least restrictive setting in which her needs may be met?

You need to discuss these options with a Care Manager as well as possibly set up a planning opportunity that allows her to protect some of her wealth, 30%-50%, and become eligible for Medicaid.

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Right now, I have Part A and Part B plus AARP Medigap, will the Advantage Plan supplement what I already have? Also, is it difficult to change over to the Advantage Plan and is it expensive?

 The Advantage Plan is a different plan altogether, it has to do with hospital and doctor bills, Part A and Part B, the Advantage Plan replaces Part A and Part B and says that you have no reason to go ahead and buy these separate parts, Part A and Part B, you can just come to us and we will go ahead and cover both doctors and hospitals. 

Talk to your doctor, and see which plan your doctor will accept. If you are happy with your doctor, and he will continue to stay with Part B throughout the next year, I would suggest you stay with Part B at this stage. But if your doctor is not so sure, then you may have a reason to look at the Advantage Plan.

 The Advantage Plan is not very expensive, but the enrollment period starts now, in January, but you can pre-enroll earlier.  If you start in January, your benefits will start as early as July.

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What is the difference between a safe harbor trust and other trusts?

That is one of the basic fundamental things we discuss. A typical trust is a revocable living trust. One of the ways to plan your affairs is to use a revocable living trust. What this trust does is, it allows you to put away the assets you own from your name into the name of the trust, for the purposes of avoiding probate.

The second type of a trust is called a tax trust, or a credit shelter trust. This says that in any community property state, like Washington, between a married couple, the husband and wife will generally own 50% of the assets each.  This type of trust basically says, that when the first spouse dies, instead of leaving the money down for the surviving spouse, their one half, or a portion of it, will go into the credit shelter trust, allowing avoidance of estate sales taxes. This is also a type of a safe harbor trust.

The safe harbor trust that I talk about is much like the credit shelter trust, but it has a different code, title 19. This basically follows the same husband and wife scheme. This money will no longer will be visible for programs such as Medicaid, VA, housing, and food.

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My sister-in-law has power of attorney over her mom, who has advanced Alzheimer’s disease.  She wants to move some stocks out of a mutual fund into a different one because it is doing poorly, and the investment company does not recognize power of attorney.  How can this be?

It cannot be.  This is also not the first time I have heard about it.  If the power of attorney was written over three or four years ago, they do not know if it has been changed or revised, and they consider it a big risk for them.  But the fact of the matter is, even if a person creates a power of attorney in 1901, it would still be valid today.  The way to overcome that is two things. First, whoever is trying to use the power of attorney, can prepare something called an affidavit in support of power of attorney, whereby, under penalty of perjury, you swear that this is the power of attorney that was created and no other power of attorney to your knowledge has been created since, and I am in good faith using my power of attorney to further the benefits of the person who gave me this power. If you can present that document to the financial company and they still refuse to honor it, you will have to go to court and get an order from a judge requiring the institution to accept the power of attorney, and the penalty is they may have to pay all the fees and costs associated with obtaining this order. 

So generally, what we do is to write the letter to the institution telling them that this is the valid power of attorney, based on the specific rules and requirements, and attached they will find a copy of the affidavit in support of power of attorney.  If they still choose not to honor it, we will take them to court. 

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What is the difference between the Medicare Advantage Plan, which is open enrollment right now, and the Medicare Traditional Plan, in terms of the current Health Care Bill?

The traditional plan is Medicare Part A and Part B, which has been the original plan. It has been around since 1965.

Medicare Part C, which is an HMO-type plan, much like group health. It is all under a managed care program. So they extended that to foster some competition. It went directly to the providers and stated that if they accept this advantage plan, they will receive a higher amount of reimbursement than with the traditional plan. This caused some practitioners to only accept the advantage plans.

However, under the new bill, starting 2011, the payments will be made the same. I believe this will be a change for the better. It will allow people to honestly judge which is the better system for them.
 

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How often can banks inspect your property to check the condition and could this be a problem for seniors? Especially considering the maintenance of the grounds?

Generally this is not a problem.  The contract does state that you have to maintain your house. They will usually send somebody on an annual or bi-annual basis to do a drive-by or come by and take a look at your house.  This frequency is established when you take the loan and depending on how the old house is.  When the loan is taken, they will do an initial inspection where someone will come and inspect the house rather thoroughly.  Many times I will see loans subject to conditions that the person who is making the loan made these improvements. At that point they may schedule someone to do follow up and a walk-in. The downside is that they are in the drivers seat as to how frequently to schedule inspections or what repairs must be made.  But it has not been a problem. I have yet to come across a case of absurd requirements.  

In terms of the grounds, it usually does need to be kept in good order, and many times this involves mowing the lawns and people frequently hire others to mow the lawn and do repairs of the grounds.

I do think reverse mortgages are generally a good idea. However, the caution I tend to give people is that they make sure they want and have the means to age in place.  It is not something you should be doing if you are considering moving within the next 3-5 years.

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Is there much of a difference between AARP Medigap and the new Advantage Plan?

Medigap through AARP is backing a traditional Medicare Part A and Part B. Both A and B have deductibles and co-payments, and what Medigap does is picks up the co-payments for you.
 

The Advantage Plan may have different requirements or enforcements based on your situation. I would not look at the costs in determining what policy to get, you should look at the benefits you receive from the policy.
 

Does your physician accept the plan that you have, and do you like your physician? If you do, then you may want to stick with Parts A and B with Medigap.  AARP Medigap and the new Advantage plan are two very different things.

 

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I heard the inheritance tax rates are going to increase taxes by as much as 45%, is this true and when will this happen?

The rates are going down to 45%. Under the old regime, tax rates used to be up to 55% at the federal level. The state and estate taxes reach between 10% and 19% in addition to the federal taxes.  For estate tax purposes, the exemption for 2009 is 3.5 million. In 2010, if congress does not take any action, estate taxes will be no more, but then in 2011, if congress again does not take any action, estate taxes will be back down to 1 million dollars. For the state of Washington, there is a 2 million dollar exemption regardless of what the federal exemption is.  But I do think something will happen before Dec. 31^st, but I’m just not sure what. 

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