Trust & Estate | Fraser Blog

Alzheimer’s Legal and Financial Planning Tips

If you or someone you love has Alzheimer’s disease or another dementia, it is important to put legal and financial plans in place as soon as possible.

Fraser Trebilcock Elder Law attorney Melisa Mysliwiec says that proper planning helps to ensure that the person with the diagnosis is able to contribute to important decisions about health care and long-term care, finances and property, and deciding who will make decisions on his or her behalf if he or she becomes unable to do so.

“If plans are not made early,” she says, “it may leave the family of the Alzheimer’s patient to guess as to what their loved one would have wanted or worse, it may ultimately be up to the courts to decide.”

Melisa spoke recently to a group of Alzheimer’s and dementia caregivers during a presentation at MSU Federal Credit Union. As an attorney who also volunteers with the Alzheimer’s Association, Melisa emphasized that early planning is key.

Some of the areas where our elder law attorneys can help you include:

Preparing Durable Power of Attorney for financial matters.
Exploring ways to defray long term care costs.
Assistance with Medicaid Planning and the Medicaid Application process for long term care benefits.
Protecting against elder abuse, neglect, and financial exploitation.
Handling various nursing home issues (payment, admissions, transfers, discharge, resident’s rights, and quality care).
Preparing Designations of Patient Advocate for health care matters.
Preserving assets to avoid spousal impoverishment when one spouse must enter a nursing home.
Guardianships, Conservatorships, and Protective Orders.
Exploring options for housing and living arrangements.
Estate planning through use of wills, trusts and other documents.

When it comes to Alzheimer’s disease or other dementias, these decisions must be made early in the progression of the disease because, in later stages, the person with dementia may lack the legal capacity to make decisions. An elder care attorney can best assist you through the process.

Additional Resources:

If you would like to talk with an attorney about putting legal plans in place, contact attorney Melisa M. W. Mysliwiec. Melisa focuses her work in the areas of Elder Law and Medicaid planning, estate planning, and trust and estate administration. She can be reached at mmysliwiec@fraserlawfirm.com or 616-301-0800.

Why Your Caretaker Agreement Should Be Medicaid-Compliant, Even If You’re Not on Medicaid

Under current Medicaid policy, what you don’t know about care contracts might actually hurt you. The definition of what is considered a care contract under Medicaid policy is broad. Currently, any arrangement under which an individual is paying for health care monitoring, medical treatment, securing hospitalization, visitation, entertainment, shopping, home help or other assistance with activities of daily living is considered a personal care contract. Further, any arrangement which pays for expenses such as home/cottage/car repairs, property maintenance, property taxes, homeowner’s insurance, heat and utilities for the homestead or other real property of the client’s is considered a home care contract. These are the types of things that allow individuals to age in place and remain in their homes as long as possible, as opposed to entering a nursing home.

The reason Medicaid’s care contract policy will harm those who don’t know about it is all payments made to caregivers for any of these types of services within 5 years of applying for Medicaid benefits will be considered a divestment for purposes of Medicaid eligibility unless a Medicaid-compliant caregiver contract was in place. Divestments are defined as transfers for less than fair market value. Divestments result in a penalty period during which Medicaid will not pay for an individual’s costs for long-term care services, home and community-based services, home help, and home health.

Most people do not anticipate entering a nursing home or needing long-term care Medicaid benefits. Even so, they are expected to know when and if this will occur, and they need to know at least 5 years in advance so that they can take the necessary precautions with respect to personal care and home care contracts, or face penalty. No one has a crystal ball that views 5 years out; therefore, the best practice is to establish Medicaid-compliant caretaker contracts for all personal care and home care contracts to ensure no penalty is assessed in the event that long-term care Medicaid is needed in the future.

Additionally, this policy applies equally to arrangements with both relatives (anyone related by blood, marriage or adoption) and non-relatives (including third-party commercial providers).

For a personal or home care agreement to be considered Medicaid-compliant (i.e. not be considered a transfer for less than fair market value [i.e. divestment] for purposes of Medicaid), each of the following must be met:

The services must only be performed after a written legal contract/agreement has been executed between the client and provider.
The contract/agreement must be dated, notarized, and signed by the provider and the client, either individually or by the client’s agent under a power of attorney, guardian, or conservator, provided that the person signing for the client is not the provider or the beneficiary of services.
No services may be paid for until the services have been provided (there cannot be prospective payment for future expenses or services).
At the time that services are received, the client cannot be residing in a nursing facility, adult foster care home (license or unlicensed), institution for mental diseases, inpatient hospital, or intermediate care facility for individuals with intellectual disabilities.
At the time that services are received, the client cannot be eligible for home and community based wavier, home health, or home help.
The contract/agreement must show the type, frequency and duration of such services being provided to the client and the amount of compensation being paid to the provider.
Payment for companionship services is prohibited.
At the time services are received, the services must have been recommended in writing and signed by the client’s physician as necessary to prevent the transfer of the client to a residential care or nursing facility.

Note, also, that there is a presumption that relatives who provide home and personal care services do so for love and affection only. Payment for home and personal care services to relatives creates a rebuttable presumption that the payment was a transfer for less than fair market value (i.e. a divestment). Therefore, even if a Medicaid-compliant caregiver contract is in place for services provided by a relative, if and when Medicaid is applied for, the Department of Health and Human Services will determine fair market value for such services by comparing the contract price to other area businesses which provide such services. If the relative’s rate was greater, it will very likely be considered a divestment. For this reason, it would be wise to compare a relative caretaker’s cost of services to other providers in the area in advance to be sure the rate is similar. Additionally, it is recommended that the documentation gathered is retained in case fair market value is contested in the future.

Questions? Contact us to learn more.

Fraser Trebilcock provides counsel on all matters relating to the legal planning for care and support of those needing Medicare and Medicaid. Attorney Melisa M. W. Mysliwiec focuses her work in the areas of Elder Law and Medicaid planning, estate planning, and trust and estate administration. She can be reached at mmysliwiec@fraserlawfirm.com or 616-301-0800. You can also click here to learn more about our Trusts & Estates practice.

How Are Michigan Trusts & Estates Laws Impacted by Obergefell v. Hodges?

The Supreme Court’s ruling in Obergefell v. Hodges will have wide-ranging implications across the country. The impact on estate planning and the administration of trusts and estates in Michigan is staggering. The Obergefell ruling dictates that same-sex couples may exercise the fundamental right to marry. This is a constitutionally protected right from which other rights of same-sex married couples flow. To assert these fundamental rights, individuals need not await legislative action; however, it is expected that all States, including Michigan, will update their statutes to comport with the Obergefell ruling. Once non-conforming laws are updated, exercising these rights will be easier. A summary of rights impacting trusts and estates, that flow from a same-sex couple’s fundamental right to marry, are outlined below.

Estate Planning and Tax Issues

Before Obergefell, with proper planning, same-sex couples could provide for each other and designate each other as a fiduciary, just as heterosexual married couples. Even so, married same-sex couples, even those living in non-recognition states such as Michigan, did not have equal federal estate and gift tax advantages as heterosexual married couples until after the United States v. Windsor case in 2013. After Obergefell, married same-sex couples, living in any state, will be given equal tax treatment in their state of residence. For example, same-sex married couples will no longer have to file separate state and federal tax returns but will need to prepare only one federal tax return on which to base their income tax filings. Same-sex married couples should discuss with their tax preparer if it would be worthwhile seeking refunds for prior years. In states other than Michigan, that have inheritance and state estate taxes, same-sex married couples will now be able to inherit from each other without having to pay these taxes.

Probate

Same-sex married couples will now have priority in the probate court to serve as personal representative, conservator, guardian, and, under Michigan Court Rules, will be identified as an interested person (heir or spouse) and have the right to receive notice of a variety of probate proceedings. In addition, all surviving spouses have the right to inherit under the intestacy laws, to elect against their spouse’s will, receive statutory spousal allowances, and petition for proceeds from wrongful death actions.

Medical Issues

Michigan has next-of-kin laws that allow spouses, in certain circumstances, to make medical decisions, anatomical gifts, and determine funeral and burial rights of their spouse. Before Obergefell, same-sex married couples did not qualify as their spouse’s next-of-kin because Michigan did not recognize the marriage of the couple. These rights will now be recognized for all married couples in Michigan.

Family Law

Same-sex couples may now marry in Michigan and same-sex marriages solemnized in other states must now be recognized by Michigan. All married couples in Michigan will be able to get a divorce and adopt their spouse’s child or adopt children together. Visitation, child support and custody decisions will also be impacted by Obergefell. Family law issues were specifically addressed by the Obergefell Court; having children and raising a family is a protected constitutional right of same-sex couples.

Governmental Benefits and Creditor Issues

Governmental benefits, such as Social Security, Veterans benefits, and Workers’ Compensation, in many cases depend on state law and, until now, such benefits were not available to spouses of married same-sex couples. Spousal rights, in life and as a surviving spouse, are aspects of one’s marital status that are constitutionally protected.

Creditor protection will be greater for married same-sex couples as they will be able to benefit from owning real property as tenants by the entireties and will be able to own certain other financial assets as tenants by the entireties, including membership interests in an LLC. Insurance on the life of a spouse, that names a spouse as a beneficiary, enjoys certain creditor protection that should be available to all married couples.

Real Property

There are numerous real property issues that will be affected by Obergefell; however, only a few are discussed here. Obergefell may well be the end of the archaic law of dower in Michigan. Tenancy by the entireties protection was previously enjoyed by only a “husband and wife.” Going forward, such protection will be enjoyed by any married couple. The uncapping of real property taxes will also be impacted as conveyances to spouses are generally exempt from uncapping laws.

General laws

There are numerous Michigan laws that will have to be updated given the Obergefell v. Hodges case. A cursory check on the uses of both “husband” and “wife” in all of Michigan’s Compiled Laws reveals over 300 statutes that use these terms. Perhaps each instance of “husband” or “wife” will be changed to “spouse” but, in any event, it will be a long process as all such laws will have to be carefully reviewed, bills drafted, and legislation enacted.

It may be difficult for a same-sex couple to assert the rights discussed above prior to the updating of Michigan law. This is simply because many of the laws specifically use the words “husband” and “wife” instead of “spouse.” A key passage in Obergefell addresses this issue and provides a path of action until our laws are changed [Slip Op., at 24]:

The dynamic of our constitutional system is that individuals need not await legislative action before asserting a fundamental right. The Nation’s courts are open to injured individuals who come to them to vindicate their own direct, personal stake in our basic charter. An individual can invoke a right to constitutional protection when he or she is harmed, even if the broader public disagrees and even if the legislature refuses to act.

It will be many years before Michigan’s statutes fully comport with the recent Supreme Court ruling in Obergefell. This process is already underway by the Michigan Law Revision Commission. Click HERE to see more information on this project.

This blog serves as a general summary of the Obergefell decision and does not constitute legal advice. Our lawyers at Fraser Trebilcock will continue to monitor changes in order to assist with your trust & estate planning needs. If you have questions or would like more information, contact attorney Marlaine C. Teahan. Marlaine chairs the Trusts and Estates practice at Fraser Trebilcock and handles a wide variety of matters including: drafting wills, trusts and durable powers of attorney; trust and estate administration; guardianship and conservatorship matters; and probate litigation. To learn more about how to put together your own estate plan, contact Marlaine at 517.377.0869 or mteahan@fraserlawfirm.com.