Marshall Parker & Associates - PA Elder Law, Estate Planning, Long Term Care Resource Center

Annuity Purchase by Community Spouse Upheld in Federal Appeals Court Decision

Pre-Need Funeral Arrangement Regulation Disapproved

No Increase in VA Pension Rate for 2010

IRS Issues Long-Term Care Insurance Premium Deductibility Limits for 2010

Annuity Purchase by Community Spouse Upheld in Federal Appeals Court Decision

Written By: Attorney Jeffrey A. Marshall, CELA*

In a much anticipated decision, the Federal 3rd Circuit Court of Appeals has affirmed the lower court ruling in Weatherbee v. Richman. The lower court had allowed a community spouse to purchase a DRA annuity[1] to protect savings from the costs of her husband’s nursing home care.

When her husband entered a nursing home, Adeline A. Weatherbee purchased a DRA compliant annuity for approximately $400,000. It paid her $4,423 per month in income. Her husband then applied for Medical Assistance to help pay the costs of his care.

The Department of Public Welfare (DPW) denied the requested benefits. DPW took the position that under the Deficit Reduction Act (DRA) and Pennsylvania ’s Act 42, the $4,423 in monthly payments Adeline received was an available resource that she could sell. Thus, DPW argued, Mrs. Weatherbee had too much in the way of resources for Mr. Weatherbee to qualify for Medicaid with his nursing home costs.

The lower court in Weatherbee rejected DPW’s arguments and precluded it from denying the requested benefits. The Court found that DPW’s interpretation of the DRA was unreasonable. It said that the provision of the DRA upon which DPW was relying to deny eligibility “is unambiguous and does not support DPW’s reading of it.”

In addition, the lower court found that “the Pennsylvania statute upon which the DPW relies [62 PA.STAT.ANN § 441.6(b)] in treating the income from an otherwise compliant annuity as an available resource is inconsistent with the treatment of annuities under the Medicaid Act.” Thus, section 441.6(b), which attempts to void anti-assignment provisions in annuities, is preempted by the Medicaid Act.

DPW refused to accept the Federal District Court ’s decision as the final word and appealed the case to the 3^rd Circuit Court of Appeals. On November 12^th, the Appeals Court issued its opinion. The Appeals Court opinion fully supports the decision made by the lower court.

In affirming the lower court, the 3rd Circuit Court of Appeals found that:

(1) The Deficit Reduction Act did not change the longstanding rule that a community spouse’s income is not available to an institutionalized spouse (42 U.S.C. §1396r-5). The provision of the DRA [42 U.S.C. §1396p(e)(4)] upon which DPW has been relying provides no basis by which DPW may deny eligibility for benefits where the annuity otherwise complies with the law.

(2) As the 3^rd Circuit previously decided in James v. Richman, there is no merit to DPW’s assertion that the annuity was a resource because it could be sold on a secondary market. (Lead counsel on the James v. Richman case was Matthew Parker, CELA* of Marshall, Parker & Associates).

(3) The state law relied upon by DPW (62 P.S.§441.6(b)) is preempted by federal law.

Conclusion:

Since 1994 federal law has allowed a community spouse to purchase a properly structured immediate annuity in order to accelerate her husband’s qualification for Medicaid and protect assets from the cost of long term care.^{^[2]} Although states are supposed to follow federal law, officials at the Pennsylvania Department of Public Welfare (DPW) have nevertheless long attempted to prevent or discourage this type of “Medicaid Planning.” These attempts have failed. Six separate federal and state courts have now considered the legality of the various procedures used by DPW to limit community spouse annuity purchases.^{^[3]} Every one of these courts has found that the DPW limitations violate federal law.

As a result of effective advocacy by elder law attorneys in these cases,[4] a Pennsylvania community spouse can now purchase a DRA compliant annuity to convert excess resources into protected income. When a married person needs to qualify for Medicaid financial help with long term care costs, it is critical that the family consult an elder law attorney who understands how to use these specialized annuities to protect the family’s financial security.

Attorney Marshall can be contacted at webmail@paelderlaw.com or at 1-800-401-4552. More information about Attorney Marshall is available on our website at www.paelderlaw.com/staff.html

Pre-Need Funeral Arrangement Regulation Disapproved

Written By: Attorney Jeffrey A. Marshall, CELA*

The Pennsylvania Independent Regulatory Commission (IRRC) has Disapproved the State Board of Funeral Directors’ new regulation governing pre-need funeral arrangements. Among other concerns, the IRRC questions whether the regulation is consistent with the statute on which it is based. The statute (63 P. S. § 479.13(c)) provides that funds may be withdrawn or disbursed from a pre-need account only for the purposes for which the money was accepted. Nothing in the regulation mandates that these restraints be included on subsequent contracts.

The IRRC comments are available here.

Disapproval will not permanently bar a regulation, but it can delay the process for implementation because the agency must respond to the disapproval Order and determine how it will proceed next. More information on the impact of IRRC disapproval is available on the IRRC website here. (See “Agency Options After IRRC Disapproval” in Section II.B.6.)

No Increase in VA Pension Rate for 2010

By Karen L. Griswold, Planning Specialist

VA compensation and pension benefits cost of living allowance (COLA) is paid based on the Social Security Administration (SSA) COLA. Compensation COLA by statue may not be more than the SSA COLA and pension COLA is equal to the SSA COLA. This year SSA did not increase COLA. Thus the levels of VA benefits will not increase. VA will be providing letters to beneficiaries informing them that there will be no COLA for 2010.

VA compensation and pension rate tables are available online at http://www.vba.va.gov/bln/21/rates/index.htm.

Marshall, Parker and Associates provides many links to VA information on our website resources page http://www.paelderlaw.com/resources.html

Karen can be contacted at webmail@paelderlaw.com or at 1-800-401-4552. More information about Karen is available on our website at www.paelderlaw.com/staff.html

Caregiver Burnout

Written By: Shelly Heikes, Planning Specialist

The holidays are approaching; it’s a time for many of us to celebrate. There will be shopping and holiday parties to attend. Have you ever stopped to think about those less fortunate? I’m not talking about the poor, or the underprivileged, although they need our attention too. I am talking about our friends and family members, who are full time caregivers.

With the increase of degenerative diseases such as Alzheimer’s, stroke and heart disease, the number of caregivers in the United States is increasing every day. Being a caregiver is often a thankless job, many days spent feeling lost and alone. The world continues to move outside your window, yet you are frozen in time, day after day caring for an aging parent, or ill loved one.

“Many family caregivers presently care for a parent or spouse who is suffering from some form of dementia. According to the Alzheimer's Association, 4.5 million Americans are presently living with Alzheimer's disease. Caring for someone with dementia often requires a great deal of time and patience, and it can cause great stress to the caregiver, particularly as memory loss progresses.” - Source: Home Instead Senior Care Advisory Board

I challenge you to take a moment to realize what the holiday season might be like for someone who is a full time care giver. They don’t have the luxury of attending all of the festive parties, driving around looking at Holiday light displays….even finding the time and strength to shop for gifts can be a difficult task. There are things you could do today, to lift the spirit of an “unsung hero”….the Caregiver.

The following is a list of “priceless gifts” you could give a caregiver this Holiday season:

· Schedule some time where you sit in for the caregiver, this could be “non-critical” times of the day, such as after the person being cared for has gotten dress, and has eaten. This will give the caregiver some free time for themselves, without worrying about their loved ones’ well being.

· Offer to bring lunch to the caregiver. All too often, caregivers neglect their own health for the sake of others; by skipping meals, or poor food choices, they need a proper diet to keep their strength up.

· Give the caregiver a call at the end of the day, just to say “I am thinking about you, is there anything I can help with” and be willing to listen when they need to talk.

· Compliment how well they are doing. Caring for a loved one doesn’t come with hand book, and many caregivers fear they are ill-equipped for the job. Let them know you appreciate that they are trying their best.

· Invite the caregiver out for a walk; exercise can help relieve some of the stress and tension they are feeling.

Care givers are only human. Many fear that asking for help is a sign of weakness. Show them you care by making an effort to pitch in, even if that means just lending them a shoulder to lean on.

There are many valuable resources available on line, and in books about care giving. I have taken the liberty of including a few with this article.

Online:

www.care-givers.com (this is an excellent source of inspiration)

www.caregiverstress.com

www.webmd.com/video/caregiving-stress

http://www.thefamilycaregiver.org/

Books:

The caregivers' roller coaster. Billie Jackson, (1993). Chicago , IL : Loyola University Press.

Taking time for me: How caregivers can effectively deal with stress. Katherine L. Karr, (1992). Buffalo , NY : Prometheus Books.

Family caregivers and dependent elderly: Minimizing stress and maximizing independence. Dianne Springer and Timothy H Brubaker. (1984). Beverly Hills , CA : Sage Publications, Inc.

Shelly can be contacted at webmail@paelderlaw.com or at 1-800-401-4552. More information about Shelly is available on our website at www.paelderlaw.com/staff.html

IRS Issues Long-Term Care Insurance Premium Deductibility Limits for 2010

Adapted from an Elder Law Answers[5] article

The Internal Revenue Service has announced the 2010 limitations on the deductibility of long-term care insurance premiums from taxes. For the first time, the maximum deductible limit for an individual exceeds $4,000.

Premiums for "qualified" plans are tax deductible provided that they, along with other unreimbursed medical expenses, exceed 7.5 percent of the insured's adjusted gross income. These premiums -- what the policyholder pays the insurance company to keep the policy in force -- are deductible for the taxpayer, his or her spouse and other dependents. (If you are self-employed, the tax-deductibility rules are a little different: You can take the amount of the premium as a deduction as long as you made a net profit; your medical expenses do not have to exceed 7.5 percent of your income.)

However, there is a limit on how large a premium can be deducted, depending on the age of the taxpayer at the end of the year. Following are the deductibility limits for 2010. Any premium amounts for the year above these limits are not considered to be a medical expense.

Attained age before the close of the taxable year

Maximum deduction for year

40 or less

$330

More than 40 but not more than 50

$620

More than 50 but not more than 60

$1,230

More than 60 but not more than 70

$3,290

More than 70

$4,110

The Georgetown University Long-Term Care Financing Project has a two-page fact sheet, "Tax Code Treatment of Long-Term Care and Long-Term Care Insurance." To download it in PDF format, go to: http://ltc.georgetown.edu/pdfs/taxcode.pdf

Marshall , Parker & Associates is Growing!

Written By: Melissa Bottorf, Director of Marketing & Business Development

Marshall , Parker & Associates is pleased to announce the addition of two new staff members to our team.

Dale A. Tice has joined our firm as an Associate Attorney. He is a graduate of Penn State Dickinson School of Law and has experience in elder law, estate planning and representing gas lease landowners. Dale currently resides in Danville and has two children, Dean & Sierra. In his spare time, he enjoys reading, hiking & amateur astronomy. Dale can be contacted at 570-321-9008 ext. 214. His email address is dtice@paelderlaw.com.

Seth Heasley has also joined our staff as an Information Technology Specialist. Seth is a graduate of the Pennsylvania College of Technology with a degree in Mass Media Communications. He has worked for WVIA TV and ESPN Sports. Seth lives in Montgomery with his wife and two children. Seth can be contacted at 570-321-9008 ext. 215. His email address is sheasley@paelderlaw.com .

“We’re excited about the growth we have experienced over the last two years,” commented Managing Attorney Jeff Marshall. “At a time when many other law firms are cutting staff, our growth is a sign that Marshall, Parker has excelled at meeting our client’s needs. The addition of Dale and Seth will allow us to maintain our current high levels of expertise and client service.”

Follow Jeff Marshall on Twitter

As an additional way to help you stay on top of the ever-changing world of elder and special needs law, our managing attorney is now “tweeting” on Twitter. You can follow Jeff Marshall at http://twitter.com/ElderLawGuy. Just click on that link or on the Twitter link below in this newsletter.

Jeff is giving his “followers” links to online articles he is reading on issues of importance to seniors and to people who may need long term supports and services. Here are some examples:

-Future of the Federal Estate Tax - http://mhs.typepad.com/thre...

-Having "The" Conversation with Your Parent - http://tinyurl.com/y8fy3yv

-Eight Steps To Protect Your Family - Basic Estate Planning Moves - http://tinyurl.com/yglnu4t

-Bankruptcies Hit Retirement Communities - elderly residents’ homes at risk - http://www.newsweek.com/id/...

-Stimulus funds starting to make their way into Alzheimer's-specific research - Over 100 new grants awarded - http://tinyurl.com/ybdqvoz

-You can buy a DRA annuity to protect your finances after your spouse enters a nursing home http://www.paannuity.com/ne...

For those of you who aren’t familiar with Twitter, it’s basically “micro-blogging.” Writers are forced to communicate in 140 characters or less (which is exceedingly tough for lawyers to do). You can get lots of information very quickly. It’s free to sign up. Plus, it’s fun. Sign up to be able to access all of Jeff’s “tweets.”

Follow Marshall, Parker & Associates’ Managing Attorney

Jeff Marshall on twitter at:

www.twitter.com/ElderLawGuy

Free Consumer Workshops Set to Learn How to Protect Your Assets in Bellefonte and Scranton

-Protect Your Home & Assets from Long Term Care Costs scheduled for Saturday, November 21, 2009 from 10:00 AM until 12:00 PM at Bonfatto’s, Park Place in Bellefonte

- Protect Your Home & Assets from Long Term Care Costs Saturday, December 5, 2009 from 10:00 AM until 12:00 PM at The Hilton, 100 Adams Avenue, Scranton

Follow Marshall, Parker & Associates’ Managing Attorney

Jeff Marshall on twitter at:

www.twitter.com/ElderLawGuy

Contacting Marshall, Parker & Associates for Assistance

Marshall, Parker & Associates is a nationally recognized law firm which provides long-term care planning, estate planning & estate administration services to Pennsylvania clients from our offices in Jersey Shore, Williamsport, Wilkes-Barre and Scranton.

Marshall, Parker & Associates is the ONLY law firm in the United States with more than two Certified Elder Law Attorneys (CELAs) on it's staff. Each of our five attorneys is a CELA. CELA status, which has been attained by only 37 attorneys in Pennsylvania, is authorized by the Pennsylvania Supreme Court. In approving the CELA professional designation, the Supreme Court found that it provides a measure of assurance to the public that the attorney has an in-depth working knowledge of the legal issues impacting the elderly,

If you or someone you know needs assistance with estate planning or with qualification for Medicaid benefits for nursing home or home care you can trust the specialists at Marshall, Parker & Associates. Please call us toll free at 1-800-401-4552 or email our Scheduling Coordinator, Lynn Wesley at webmail@paelderlaw.com.

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*Attorneys Marshall, Parker, Grebas, Weber & Colbert are certified as Elder Law Attorneys by the National Elder Law Foundation under authorization from the Pennsylvania Supreme Court.

**In addition to her law degree and CELA status, Attorney Colbert holds an advanced legal degree (LLM) in Estate Planning from the University of Miami School of Law.

Return to 2009 Newsletters

1-800-401-4552

www.paelderlaw.com

http://www.paspecialneedslaw.com

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