Seminar Review: Personal Care Contracts
By Ruth Ratzlaff, Esq.
Michael A. Weeks, CELA, led a breakout session on the topic of Personal Care Contracts. These are written agreements between a care recipient and a care provider, setting forth the duties of the care provider and the compensation and any other terms.
There are multiple reasons such an agreement may be useful. First, it formalizes the expectations of the parties. Second, it provides a record for third parties, such as the child who is not providing care and is not receiving compensation. Third, it can be useful to document that funds were transferred for a valid reason and were not a gift.
Weeks cautioned against using lump-sum payments rather than using traditional employment pay check intervals, whether weekly, bi-weekly, or monthly. Pigs get fat but hogs get slaughtered. Some states are more amenable to lump-sum payments, however proceed cautiously and check with local practitioners. Lump-sum payments are taxable to the care provider when received, so the tax liability may be unexpected.
The speaker went over the topic of employee versus independent contractor and agreed that in certain limited circumstances it could be an independent contractor relationship. But the default conclusion is that the care provider is an employee, where payroll withholding and payment of the employer’s share of taxes is necessary. The modest cost of using a payroll service is worth it.
If the expectation is that the care recipient will ultimately need to qualify for Medicaid for either community-based services at home or for inpatient skilled nursing care, Weeks suggested that a geriatric care manager or similar professional be retained when the contract is being drafted to provide a written record of exactly what services the care recipient will need and what the care recipient’s level of functioning is at the time the contract is executed.
This will establish a baseline for increased compensation if the care needs increase. It will also document for eligibility workers at a point that may be months or years later that the money the care recipient spent was for necessary services and not an allowance for an otherwise-unemployed relative.
The speaker also warned that eligibility workers might be inclined to ask what other jobs the care provider held during the period care services were being provided. If they are otherwise employed full time, there may be requests for proof that the services that were paid for were actually provided.
Seminar Review: Fiduciaries and Medicaid Planning: The Power, Authority, and Planning Opportunities
By Eric Einhart, Esq.
Vincent J. Russo, CELA, CAP, and Eric J. Einhart, Esq., led a breakout session at the 2018 NAELA Annual Conference on the topic of Fiduciaries and Medicaid Planning. The session focused on the authorities that are necessary for an agent under a durable power of attorney and a guardian/conservator to undertake Medicaid Planning, as well as common tips and traps associated with fiduciaries and Medicaid planning.
Russo is licensed to practice law in New York, Florida, and Massachusetts, and Einhart is licensed to practice law in New York and New Jersey. Both presenters informed the attendees that the information provided was based on their experience practicing in New York and that the fiduciary authorities as well as Medicaid planning strategies discussed were subject to local laws and regulations.
The session was a collaborative-style presentation between Russo and Einhart. Einhart discussed key provisions related to Medicaid planning that should be included in a durable power of attorney and explained the process for a guardian/conservator to seek court approval of a Medicaid plan. Russo, a Past President of NAELA, highlighted Medicaid planning strategies often implemented by fiduciaries as well as common issues related to fiduciaries and Medicaid planning, such as conflicts of interest and self-dealing.
Some of the key provisions Einhart suggested should be included in a durable power of attorney were provisions related to government benefits, gifting assets of the principal, retention of professionals (including attorneys), and establishment and funding of trusts and ABLE accounts. The presenters also stressed the importance of providing the guardianship/conservatorship court with a “Medicaid Memorandum” which provides the court with an explanation why Medicaid planning is in the best interest of the incapacitated person as well as a legal analysis of the statutes and case law that supports the Medicaid plan.
Russo and Einhart provided case studies that illustrated common scenarios and covered a broad range of issues fiduciaries face when undertaking Medicaid planning for purposes of Medicaid Home Care and/or Medicaid Long-Term Care.
In addition to case studies, the presenters fostered a dialogue about the differences in local laws and practices related to fiduciary appointments and Medicaid planning throughout the country by inviting and fielding questions and comments from the attendees throughout the session.
Seminar Review: Planning for the Well Spouse
By Leonard E. Mondschein, CELA, CAP
Although “Planning for the Well Spouse,” presented by Howard S. Krooks, CELA, CAP, and William J. Browning, CELA, CAP, was presented on the last day of the program and, coincidentally, was the last session that I attended, I enjoyed it the most.
The stated goal of the session was the protection of the community spouse from impoverishment when the other spouse is in need of nursing home care. Krooks practices in New York and Florida, and Browning practices in Ohio. Both presenters are Past NAELA Presidents. From the beginning of the session, both presenters made it clear that planning for the community spouse is state specific. However, throughout the presentation, the presenters allowed the members of the audience to comment on how their states deal with particular issues.
The hypotheticals used were both engaging and illustrative of practical scenarios faced by elder law attorneys in all states. The presenters started with an economic analysis of the family’s finances. They also considered the relative ages of the institutionalized spouse and the community spouse, as well as whether there are any children with disabilities. Next, exempt assets were considered along with spend down. The community spouse’s future lifestyle was taken into account as well.
In addition to the above, annuities, promissory notes, and spousal support orders were discussed, while eliciting information from the audience to take into account all states represented in the room. For example, spousal refusal, which is used predominantly in Florida and New York, was discussed as to the legal underpinnings in those states including recent activity in Connecticut. Another example of state specific treatment was IRAs. In some states, IRAs paying out minimum distribution are counted as income, whereas in other states IRAs are counted as assets, unless the IRA is converted to an immediate annuity.
The materials contributed by the speakers were well researched and allowed the participants to take something back to their offices to be reviewed in the future, when needed. Citations of key cases were included in the materials.
Browning stated that planning for the community spouse is one of the most rewarding aspects of the practice of elder law. Both Krooks and Browning did an excellent presentation by discussing strategies that can be applied in several states in an effort to expand the possibilities for the attendees in their own states.