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Legal Notes

MassHealth rules and proposed legislation – income, assets, and care

Members of the Massachusetts State House and Congress have introduced legislation that will impact elders in our community.

The three bills below under consideration by Massachusetts legislators provide protections for the uninformed individual who engages in financial transactions unaware that they have created a serious problem for themselves when they need long-term care MassHealth benefits. Please contact your state legislator if you want them to support these bills.

Current MassHealth regulations penalize applicants who transferred assets within 60 months of the application for benefits, regardless of the reason. HD2927/SD1387 (An Act Relative to Transfer of Assets by MassHealth Members) establishes criteria to be used by MassHealth to determine whether a transfer should result in a period of disqualification for eligibility and clarifies that a period of ineligibility will not apply if the transfer was for an intent other than to qualify for MassHealth. For example, many applicants may be able to show that the transferred assets were part of a regular pattern of small gifts, or that they were for a child’s unexpected illness or financial crisis.

HD3066/SD981 (An Act to Protect MassHealth Applicants Facing Undue Hardship) protects individuals who made innocent transfers, waiving the ineligibility period if certain criteria are met. MassHealth could not impose a penalty where 1) it would create a risk of serious harm to the individual, 2) the transferred assets are irretrievable from the recipient, and 3) there is no affordable alternate care available to the individual.

HD1478/SD419 (An Act to Support Equal Access to Community Care for Elders and the Disabled) helps seniors who are clinically eligible for nursing home care, but wish to remain home. Currently, if an applicant for in-home benefits has gross income less than $2,205/month, the applicant will receive MassHealth services at no cost. However, if an applicant’s income exceeds $2,205/month, even by $1, the applicant may retain only $542/month and must contribute the balance to the cost of care. No one can live on $542/month! This bill would allow applicants to keep all income up to $2,205/month, with only any excess contributed to the cost of care.

Congress has a bill pending (H.R. 180) which will eliminate retroactive coverage under the Medicaid program (called MassHealth in Massachusetts). Currently, MassHealth applicants 65 years of age and over or in a nursing home may be approved for up to four months of retroactive benefits. This bill would limit the benefit start date to the month in which the application is filed. This will particularly impact individuals who do not have family or others to quickly file an application for healthcare benefits on their behalf, leaving them financially liable for the higher private rates they currently have. Please contact your federal legislators to ask them to vote against this bill if you are concerned about this national change.

Finally, MassHealth has issued sweeping changes in regulations related to community (in-home) benefits which will severely restrict eligibility. Most significantly, spousal income and assets, which were previously ignored, will now be considered when determining whether a married applicant is financially eligible for MassHealth benefits. Many couples will be required to contribute more toward the cost of care than they can afford, forcing individuals who wish to remain home into nursing homes (with the additional expense borne by taxpayers).

Contact information for legislators may be found here.

The views expressed in this column represent general information. To address your particular and specific needs consult your own attorney. If you need help with referral to an attorney, contact the Franklin County Bar Association at (413) 773-9839 or the Worcester County Bar Association at (978) 752-1311. Elder law resources may be found through the National Academy of Elder Law Attorneys, Massachusetts Chapter, at massnaela.com or 617-566-5640.

Community Legal Aid (CLA) provides legal services free to people age 60 and older for civil legal matters with an emphasis on access to health care coverage (MassHealth and Medicare) and public benefits as well as tenants’ rights. A request for legal assistance can be made by phone at 413-774-3747 or toll-free 1-855-252-5342 during their intake hours (Monday, Tuesday, Thursday, and Friday from 9:30 a.m. to 12:15 p.m. and Wednesday from 1:30 p.m. to 4:15 p.m.) or any time online by visiting www.communitylegal.org.

MassHealth is again considering not allowing over-65 Pooled Trusts

by Attorney Peggy Torello, South Deerfield, 413-772-5900

Pooled Trusts are supplemental needs trusts administered by a nonprofit for the benefit of disabled individuals on Supplemental Security Income (SSI), a (d)(A) trust, and those over age 65, a (d)(4)(C) trust. Federal Medicaid and MassHealth regulations permit a deposit of any excess funds that exceed the $2,000.00 asset limit into a pooled trust, without loss of eligibility of benefits. The funds in a pooled trust can only be used to supplement the needs and comfort of the disabled or elderly person such as entertainment, dental care, a paid companion or extra health care worker, and other extra quality of life expenditures. As a requirement, MassHealth must be named first beneficiary and it is reimbursed from any remaining funds in the pooled trust at death of the beneficiary.

Massachusetts, nineteen other states, and the District of Columbia allow pooled trusts for MassHealth beneficiaries over age 65. Eight years ago MassHealth proposed changing its rules regarding the (d)(4)(C) pooled trusts for those over age 65 (not the trusts for those disabled individuals under age 65). That proposed rule change was to comply with a 2008 Medicaid bulletin that stated pooled trusts for those over 65 are subject to transfer penalties. Thankfully, MassHealth was thwarted on changing its rules in 2008.

In the January 3, 2017, edition of the Boston Globe, staff writer Deirdre Fernandes published an article about a MassHealth public hearing held in December. MassHealth is again considering changing its rules by disallowing pooled trusts for those over age 65 because of that 2008 MassHealth guideline and also to help ease the financial burden on the state budget. Ms. Fernandes’ article included a story about an 81-year-old gentleman from Newburyport. His 82-year-old brother is in a nursing home in Chicopee and has a pooled trust. The funds in his brother’s pooled trust paid for much-needed dental expenses and pay for a companion to visit weekly to take him out for meals and other entertainment. Because of this gentleman’s age, he cannot travel to Chicopee often, and he is grateful the funds in the pooled trust pay for someone to be there to check on his brother and bring joy to his life.

A call or letter to your state legislator, even though this is not a legislative matter but an agency matter, would let them know how their constituents feel. Advocacy to your legislators will inform them about the need to have MassHealth continue to allow over-65 pooled trusts. They are of little cost to the state, yet enhance a nursing home resident’s quality of life.

The views expressed in this column represent general information. To address your particular and specific needs consult your own attorney. If you need help with referral to an attorney, contact the Franklin County Bar Association at (413) 773-9839 or the Worcester County Bar Association at (978) 752-1311. Elder law resources may be found through the National Academy of Elder Law Attorneys, Massachusetts Chapter, at massnaela.com or 617-566-5640.

Community Legal Aid (CLA) provides legal services free to people age 60 and older for civil legal matters with an emphasis on access to health care coverage (MassHealth and Medicare) and public benefits as well as tenants’ rights. A request for legal assistance can be made by phone at 413-774-3747 or toll-free 1-855-252-5342 during their intake hours (Monday, Tuesday, Thursday, and Friday from 9:30 a.m. to 12:15 p.m. and Wednesday from 1:30 p.m. to 4:15 p.m.) or any time online by visiting www.communitylegal.org.

Is your Will relevant?

Pam OddyAttorney Pamela Oddy, Athol, Mass., 978-249-7511When I give speeches to local senior groups, I always ask the question: “Does everyone in this room have a Will?” My next question is usually: “When was the last time you read your Will?” On the surface, these questions seem simple enough and I am finding that, today, more and more people have Wills. However, I am also discovering that people are not reviewing their Wills with any frequency. Perhaps we think that if we have a Will then we are all set. Nothing could be further from the truth. It is not enough to have a Will, though it is hugely important; you should read your Will every three to five years to be sure it is exactly the way you want it to be. Often, life has a habit of changing us and the paths we are taking, and we need to be sure that our Wills accurately reflect what our last wishes are. In other words, we need to be certain that our Wills are relevant.

Below is a list of sample reasons to re-examine and potentially re-draft your Will:

  1. Has anyone died that you have mentioned in your Will?
  2. Do you have a specific item, such as your house or a camp, that you want a specific person to have?
  3. Do you have a child that you may want to remove from your Will? Or do you have a child that you had eliminated from your Will that you now want brought back in?
  4. Do you now have grandchildren that you would like to leave something to?
  5. Are you now raising your grandchildren so that you need to offer them some degree of economic protection in the event of your death?
  6. Do you want someone else to be your Personal Representative (formerly known as Executor)?

Although the above questions are merely sample reasons to re-examine your Will, the point holds true: you should read your Will every three to five years to be sure it is exactly the way you want it to be. In other words, make sure your Will is relevant.

The views expressed in this column represent general information. To address your particular and specific needs consult your own attorney. If you need help with referral to an attorney, contact the Franklin County Bar Association at (413) 773-9839 or the Worcester County Bar Association at (978) 752-1311. Elder law resources may be found through the National Academy of Elder Law Attorneys, Massachusetts Chapter, at massnaela.com or 617-566-5640.

Community Legal Aid (CLA) provides legal services free to people age 60 and older for civil legal matters with an emphasis on access to health care coverage (MassHealth and Medicare) and public benefits as well as tenants’ rights. A request for legal assistance can be made by phone at 413-774-3747 or toll-free 1-855-252-5342 during their intake hours (Monday, Tuesday, Thursday, and Friday from 9:30 a.m. to 12:15 p.m. and Wednesday from 1:30 p.m. to 4:15 p.m.) or any time online by visiting www.communitylegal.org.

Recent legal scams

My 89-year-old father’s e-mail was anxious. “I have been getting bombarded on the internet about big Social Security changes becoming effective May 1. The blurbs are full of unspecified warnings about losing payments.” He clicked on a video and was offered “valuable reports for only $49!”

Thankfully, my father is shrewd and cheap, so he called me for free advice. I was quick to assure him that there was nothing to worry about. I determined that the pending changes do not take away any existing benefits; they eliminate one strategy for future married applicants (in other words, everyone receiving benefits now is safe!). It reminded me of some of the other scams my clients have encountered recently:

  1. After my clients receive a new Deed from my office that I prepared as part of their estate plan and recorded at the Registry of Deeds, they often get a letter from a company offering them a copy of the Deed for $83.00. It looks official and presents like a legitimate bill. Some even impose an additional charge if you pay after the “due date.” The envelope usually says “Deed Processing Notice” and comes from a company called, “Record Transfer Services,” “Conveyance Transfer Services,” or “Secured Document Services.” Many of my clients call me, because they think they have to pay it (and some do!). Trust me, there is no need to pay $83.00 for a document you can access and print-out yourself on-line at masslandrecords.com for free!
  2. A postcard or letter arrives, saying that you have unclaimed (abandoned) property and a company will help you to retrieve it. My clients typically receive these from a company called Keane and there is just enough mystery in the correspondence to entice you to call. The small print indicates a 20-30% commission. Although you may, indeed, have abandoned property (an asset you forgot you had or a dividend check that never made it to you), you do not need a third party to get it for you – you can go on-line or call the Abandoned Property Division yourself. No fees or commissions! These notices can have an upside, however: upon receiving one once, I was able to quickly determine that a client had $90,000 in shares of stock being held with Abandoned Property. The direct contact ensured that she received the full amount.
  3. Some of my clients need to apply on-line for tax identification numbers for estates and trusts. Several have been duped by a company (irs-tax-id.com) which offers to handle the application for $247. Want it for free? Go to irs.gov and apply for the number on your own.

I am glad my father knew to question what he read on-line…

The views expressed in this column represent general information. To address your particular and specific needs consult your own attorney. If you need help with referral to an attorney, contact the Franklin County Bar Association at (413) 773-9839 or the Worcester County Bar Association at (978) 752-1311.

Call Community Legal Aid at 413-774-3747 or toll-free 1-855-CLA-LEGAL (1-855-252-5342) during their intake hours (Monday, Tuesday, Thursday, and Friday from 9:30 a.m. to 12:15 p.m. and Wednesday from 1:30 p.m. to 4:15 p.m.). Apply for help anytime online by visiting www.communitylegal.org. Franklin County Office is located at 55 Federal St, Greenfield, MA. The office is no longer open for walk-ins. Services are free to people age 60 and older.

Irrevocable Trust Update

There have been significant court cases recently relative to irrevocable trusts. A recent case from the Worcester Superior Court held that if a parent transferred their home to an irrevocable, and the irrevocable trust provided that the parent had the right to "use and occupy" the home, then, based on state and federal Medicaid regulations, the trust does not protect the home from nursing home expenses.

The family argued under Massachusetts trust law that the house was protected from nursing home expenses, but the court gave great deference to Massachusetts and federal Medicaid regulations and found that the house was not protected. This case has been appealed to a higher court with the hope that the appeals court will overturn this decision.

In another case, the Massachusetts appeals court granted a favorable decision against an argument MassHealth has been raising against irrevocable trusts for many years. With an irrevocable trust, the parent usually retains the right to the income from the trust, but has no ability to access the principal or assets held by the trust, such as the home. MassHealth had tried to use a very technical argument that the trustee had the ability to sell the home and purchase an annuity, which could change all of the assets of the trust into income and, thus, make all of the assets of the trust accessible for nursing home expenses. The appeals court rejected this argument and held that the house was protected from nursing home expenses.

In the same case, the appeals court held that, if the trustee had the ability to distribute assets from the trust to the parent's children, this was acceptable and did not make the house reachable for nursing home expenses.

These two recent court decisions illustrate the complexity of irrevocable trusts. If you or a family member are considering a legal instrument such as an irrevocable trust, consult an attorney. It will be important to understand what this tool is and if it accomplishes your intent to financially plan for the future.

The views expressed in this column represent general information. To address your particular and specific needs consult your own attorney. If you need help with referral to an attorney, contact the Franklin County Bar Association at (413) 773-9839 or the Worcester County Bar Association at (978) 752-1311.

Call Community Legal Aid at 413-774-3747 or toll-free 1-855-CLA-LEGAL (1-855-252-5342) during their intake hours (Monday, Tuesday, Thursday, and Friday from 9:30 a.m. to 12:15 p.m. and Wednesday from 1:30 p.m. to 4:15 p.m.). Apply for help anytime online by visiting www.communitylegal.org. Franklin County Office is located at 55 Federal St, Greenfield, MA. The office is no longer open for walk-ins. Services are free to people age 60 and older.