Attorney Who Provided Flawed Medicaid Planning Advice by Counseling Against Life Estate Liable For Legal Malpractice

Marie Brissette and her husband consulted attorney Edward Ryan for advice about how to protect their home from a Medicaid lien in the event that either needed long-term care. Ryan advised them to transfer the title to their property to their four adult children with reserved life estates. The Brissettes followed Ryan’s advice, transferring the property to their four children and reserving life estates for themselves. Thirteen years later, the Brissettes and two of their four children again consulted with Ryan to discuss the Brissettes’ desire to sell the home and buy another property.  Ryan told the Brissettes that they could be ineligible for Medicaid if they reserved life estates in the new property, and there could be a Medicaid lien against that property when they died. In reliance on Ryan’s advice, the Brissettes bought the new property but put title to the new property in two of their four children’s names without retaining life estates.

After her husband died, Mrs. Brissette sued Mr. Ryan for legal malpractice. She argued that, due to Ryan’s incorrect advice, she did not to obtain a life estate on the new property, leaving her with no legal interest in the property, which subjected her to the risk of being forced to move out of the house by her two children who owned the new property.

At trial, Ryan conceded that the advice he gave was wrong, both about ineligibility for Medicaid and about the possibility of a posthumous Medicaid lien being filed against the property had the Brissettes reserved life estates in the new property. Also, an expert witness testified that besides being wrong, Ryan’s advice was below the standard of care applicable to the average qualified attorney advising clients on Medicaid planning.

The jury found Ryan liable and set damages at $100,000. Ryan appealed, and the judge entered judgment in his favor notwithstanding the jury’s verdict. The judge ruled there was no proof that Mrs. Brissette suffered actual damages because her children testified that they would never “evict” their mother. Mrs. Brissette appealed.

On appeal, the Massachusetts Court of Appeals reversed, holding that:

[A]s a proximate and reasonably foreseeable result of Ryan’s negligence, [Mrs. Brissette] failed to obtain a valuable property right she otherwise would have: a life estate …. Deprivation of such a property right is actual damage….  It is no answer to [Brissette’s] claim against Ryan … to say that it does not matter because her children allow her to live in the house …. [T]he fact that because of Ryan’s negligence she has no right to alienate the property during her lifetime by, for example, renting or mortgaging it, means that she did not obtain something of value that she otherwise would have. She is damaged by that loss and should properly be compensated for it ….

As a result, the appellate court reinstated the jury’s verdict.

For the full text of this decision, go to: Brissette v. Ryan

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Administrator of Estate Lacked Standing to Appeal Medicaid Denial

A court in Connecticut ruled that the administrator of an estate lacked standing to appeal the denial of an application for Medicaid benefits because no appeal of the denial was filed before the decedent died.  Freese v. Department of Social Services (Conn. Super. Ct., No. CV14-6047417S, June 1, 2015).

Plaintiff, Kathleen Freese, claimed that the defendant, Department of Social Services (“DSS”), erred in finding her deceased mother, Noreen Mccusker, ineligible for Medicaid. Ms. Freeze was her mother’s conservator when her mother was alive. After her mother died, plaintiff was appointed administrator of her mother’s estate. Plaintiff filed a Medicaid appeal on her deceased mother’s behalf approx. one month before she was appointed administrator.

DSS challenged Ms. Freese’s standing to sue on her mother’s behalf, asserting that nothing in the law authorized a conservator to sue in a deceased person’s place, and that Ms. Freese had not been appointed administrator of her mother’s estate when she filed the appeal.  Ms. Freese countered that any defect in her standing to file the appeal could be cured by substituting her into the pending lawsuit in her capacity as administrator of her mother’s estate retroactively to the date the appeal was filed.

The Connecticut Superior Court, Judicial District of Fairfield at Bridgeport, disagreed. The court dismissed plaintiff’s complaint for lack of subject matter jurisdiction, holding that Ms. McCusker was the real party in interest and, because she died before appealing the denial of Medicaid benefits, her estate’s administrator lacked standing to sue in her place.

For the full text of this decision, click here – Freese v. Department of Social Services

For additional information concerning Medicaid applications and appeals, visit: http://vanarellilaw.com/medicaid-applications-medicaid-appeals/

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Judge Rules NJ’s Prevention of Domestic Violence Act Covers Elder Abuse

In a case of first impression, a trial judge in Ocean County ruled that victims of domestic elder abuse can use New Jersey’s Prevention of Domestic Violence Act to obtain restraining orders against their abusers. J.C. v. B.S., Docket No. FV-15-352-16 (Chan. Div., Family Part, Ocean County, September 14, 2015)

In an unpublished opinion, Superior Court Judge Lawrence Jones ruled that, under New Jersey law, there is “a clear recognition of the need for special protection and care to be afforded to senior citizens against elder abuse and domestic violence …” As a result, even though elder abuse is not specifically mentioned as a protected category under the Prevention of Domestic Violence Act, victims of elder abuse can use the Act to protect themselves from the abuser as a matter of public policy.

Plaintiff, a 73 year old senior citizen, incurred two mini-strokes, undergone two back operations and a hip replacement. She is physically frail, and has difficulty walking. Nonetheless, she still lives independently in her own home, and has allowed defendant, her adult son, to stay with her.

Plaintiff filed a domestic violence complaint against her son, seeking a restraining order removing defendant from her home on the grounds of ongoing harassment. After a hearing, the court agreed with plaintiff, finding that defendant verbally abused plaintiff on an ongoing basis through constant verbal obscenities, chronically calling her vulgar names and making other disrespectful references to her female anatomy. Further, the court found that defendant, by verbally harassing plaintiff, acted with hostility and intent to harass.

The Court recognized that not every incidence of verbal harassment constitutes domestic violence. However, verbal harassment may constitute domestic violence, and the Court ruled that it did so under the facts in this case, as follows:

[T]his is a matter where an angry adult child is emotionally abusing an elderly, physically compromised mother in her own home on a chronic and near-daily basis by repeatedly berating her with shocking obscenities and profanities in a way which, from an objective standpoint, is socially unacceptable and crosses over … into … domestic violence. The nature and frequency of same, … demonstrates defendant’s unacceptable hostility towards his mother, with purpose to cause plaintiff emotional upset, pain, and injury to her own self-esteem. No person, senior or otherwise, should be expected to tolerate this type of mistreatment and disrespect in his or her own house … .

The Court granted plaintiff’s request for a final restraining order, prohibiting defendant from re-entry into plaintiff’s home until further order of the Court.

The J.C. v. B.S. case is annexed here – J.C. v. B.S.

For additional information concerning elder abuse actions, visit: http://vanarellilaw.com/will-contests-probate-litigation-elder-abuse-actions-2/#viiieaa

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Reporting Requirements for SSI Recipients

The Social Security Administration (SSA) requires periodic reports from all recipients of Supplemental Security Income (SSI) benefits. If the SSI recipient has a representative payee, the payee is obligated to make the report. Recipients who are legally incompetent are not responsible for reporting, but their payees are. Required reports must be completed in order for eligibility for SSI benefits and Medicaid to continue.

If any of the following changes occur during the life of an SSI recipient, a report must be made to SSA:

• Moves or changes of address
• Persons moving in or out of the household
• Death of a household member
• Changes in income and resources for recipients and individuals involved in deeming cases. These individuals are:
  • ineligible spouses and ineligible children living with recipients,
  • parents living with eligible children,
  • essential persons,
  • sponsors of aliens and living-with spouses of sponsors, and
  • eligible aliens with the same sponsor.
• Changes in help with living expenses
• Entering or leaving an institution
• Marriage, separation, or divorce (Including any same-sex relationships)
• Leaving the United States for more than 30 days in a row
• Changes in school attendance (if under age 22)
• Death of the recipient or individuals involved in deeming cases
• Fugitive felons status (fleeing prosecution, unsatisfied warrants, probation and parole violation)

Reports of the above changes should include:

• The reporter’s name
• The name and social security number (SSN) of the SSI recipient
• Facts about the change
• When the change happened

Recipients and payees may report in writing, by telephone, or in person at an SSA field office. Form SSA-8150-EV (Reporting Events, SSI) may be used to report in writing, but a letter is sufficient.

Critical Pointer: All communications with SSA should be done in writing and by certified mail. SSA is notorious for losing correspondence and claiming the report was never sent by the recipient/payee and/or received by the agency.

Critical Pointer: The SSI recipient/payee should keep a copy of all reports sent to SSA.

Reports are due within ten (10) days after the end of the month in which the event took place.

If a recipient/payee fails to make a timely report of a change, the recipient may not receive correct benefits when due, be forced to pay back an over-payment, or lose SSI eligibility. Also, SSA requires penalties when SSI recipients fail to report changes on time that adversely affect SSI benefits unless they have good cause for the reporting failure. SSA deducts specific amounts for penalties from Federal SSI payments.

Source:         POMS SI 02301.005; POMS SI 02301.100

For additional information concerning social security disability benefits and SSI appeals, visit: http://vanarellilaw.com/social-security-disability-appeals/

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Appellate Division Rejects Claim That Marriage Creates a Presumptive Right to a Deceased Spouse’s Retirement Accounts

On March 9, 2015, I blogged about an Appellate Division case holding that marriage does not create a presumptive right to a deceased spouse’s life insurance benefits. That blog can be found here. In In re Estate of Matchuk, the Appellate Division extended that holding to funds in a deceased spouse’s retirement accounts.

In Matchuk, the decedent had named his sister as beneficiary of three retirement accounts during his tenure as a teacher in the 1980s. At the time, Mr. Matchuk was single.

In 1987, Mr. Matchuk got married, and remained married until his death 23 years later. In 2006, Mr. Matchuk changed the beneficiary designation of one of those three accounts to name his wife as beneficiary. In 2007, he was sent a notice from the retirement fund provider with information about how he could update beneficiary information; he took no action in response. In 2010, he died intestate. His widow filed a complaint seeking to be designated beneficiary of the two accounts that still named the sister as beneficiary.

During discovery, the widow conceded that she had not been named beneficiary on those two accounts, and that there were no documents demonstrating her husband’s probable intent to name her on the accounts. There was no evidence that Mr. Matchuk made oral statements that he intended to name his wife as beneficiary of these two accounts.

The trial court granted summary judgment dismissing the widow’s claims to the retirement accounts.

She appealed, claiming the right to those accounts by virtue of her status as Mr. Matchuk’s wife at the time of his death. She claimed that equitable principles should be applied and that the court should presume that her husband had intended to designate her as beneficiary on the accounts, based upon their long-term marriage.

The Appellate Division affirmed the trial court and rejected the widow’s claim.

It found that a designated beneficiary can only be divested by a change of beneficiary in the manner prescribed by the account policy. Evidence of an intent to make a beneficiary designation change is insufficient to effectuate the change, except in limited circumstances where substantial compliance, beyond just an oral statement of intent, has been made.

A copy of In re Estate of Matchuk can be found here – Matter of the Estate of John H. Matchuk

For additional information concerning New Jersey family law law, visit: http://vanarellilaw.com/family-law-services/#sdpnj

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Medicaid Not Required to Consider Applicant’s Trust Reformed by a Court During the Look-Back Period

An appeals court holds that the Massachusetts Medicaid is not required to recognize the reformation of an applicant’s trust after the original trust was considered an available asset. Needham v. Director of Medicaid (Mass. Ct. App., No. 14-P-182, Oct. 20, 2015).

Maurice Needham, a Massachusetts resident, created two trusts. The first, a revocable trust, held the family home valued at over $400,000, The sole beneficiary of the revocable trust was the second trust, an irrevocable trust, which held liquid assets valued at over $400,000. A provision in the irrevocable trust instructed the trustee to accumulate principal and use it for the Mr. Needham’s needs without regard to the interest of the remaindermen, Mr. Needham’s children.

Mr. Needham filed for nursing home Medicaid. The state denied Mr. Needham’s application for Medicaid benefits, finding that the irrevocable trust was an available asset because Mr. Needham retained control over the assets due to the above mentioned trust provision. Mr. Needham filed an administrative appeal. The hearing was suspended at Mr. Needham’s request to permit him to file a complaint in the probate court seeking an order reforming the trust by approving a stipulation between Mr. Needham and his children removing the above-mentioned provision of the irrevocable trust that made Mr. Needham ineligible for Medicaid. At the parties’ request, a judge of the probate court entered an order approving the trust reformation. The order stated that the reformation was effective ab initio.

The administrative hearing resumed and the court order reforming the trust was offered into evidence. The hearing officer recognized that the reformation rendered the assets of the irrevocable trust non-countable, but concluded that the reformation was itself a disqualifying transfer of assets because the reformation was sought for purpose of qualifying for Medicaid benefits, and the reformation occurred within the 5 year look-back period.

Mr. Needham appealed to court which reversed the denial of Medicaid benefits, ruling that because a court had approved the reformation of the trust ab initio, it was as if the original trust never existed. The state appealed.

The Massachusetts Court of Appeals reversed, holding that the state was not required to consider the reformed trust. The court stated as follows:

The issue is whether [Medicaid] is required to recognize a reformation as a matter of Federal law when determining whether there has been a disqualifying transfer. The answer to that question in this case is no. Were the answer different, persons of means would be permitted to enjoy otherwise countable assets held in trust throughout their lives, transfer those assets for less than fair market value by reforming the trust ab initio when their health declines, and thereby obtain Medicaid payment for long-term nursing home care without complying with the waiting period imposed by Federal law.

For the full text of this decision, Needham v. Director of Medicaid

For additional information concerning Medicaid and public benefits planning, visit: http://vanarellilaw.com/medicaid-public-benefits-planning/

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Appellate Division Rejects Estate’s Challenge to DMAHS and DDD Claims for Reimbursement of Benefits Paid to Decedent

The decedent, Tracy Solivan, had been disabled at birth as a result of medical malpractice at a Hudson County hospital. Her parents had obtained a $172,400 settlement on her behalf, which was held in the Hudson County Surrogate’s account until she turned eighteen. In 2002, after she turned 18, Tracy Solivan’s mother was appointed as her guardian (later a co-guardian was also appointed) and the funds were transferred from the Surrogate’s account to the co-guardians, who transferred the funds to an investment account.

Tracy Solivan was initially placed at a Hudson County facility, the costs of which were borne by Hudson County pursuant to the malpractice settlement agreement. In 1984, she was transferred to a different facility. From that point, her services were subsidized by the Division of Developmental Disabilities (“DDD”). In 2002 until she died, Ms. Solivan also received Medicaid benefits through the Division of Medical Assistance and Health Services (“DMAHS”). She died intestate in 2012, with an estate in excess of $600,000.

DDD filed a statutory lien against the Estate for more than $3 million for reimbursement of its subsidy, asserting that Tracy Solivan had not been qualified to receive that subsidy. DMAHS also filed a claim for more than $2 million, claiming that she had received incorrectly paid Medicaid benefits. They claimed that Tracy Solivan was ineligible for these public benefits because, once the settlement funds were released by the Surrogate in 2002, her excess resources rendered her financially ineligible for the benefits.

The Estate moved to discharge the claims. The Chancery Division judge denied that motion, as well as the Estate’s motion for reconsideration. On appeal, the chancery judge’s decision was affirmed.

The appellate court found that, once the settlement funds were released by the Surrogate to the co-guardians, they became “available” to Tracy Solivan. Because those funds exceeded the $2,000 Medicaid resource limit, she was ineligible for benefits as of that date. The court rejected the Estate’s claim that N.J.S.A. 3B:12-36 limits a guardian’s authority over the ward’s funds. Instead, the court concluded that, unless restrictions are placed on the guardianship certificates pursuant to N.J.S.A. 3B:12-37, the guardians have discretion to use the ward’s funds for the ward’s health, education, support and comfort. Therefore, once the guardians took control of the funds in 2002, those funds were “available.” The court also rejected the Estate’s argument that the DMAHS claim violated the anti-lien statute, 42 U.S.C. 1396p(a)(1), because that statute does not preclude a lien for incorrectly paid benefits.

The DMAHS claim had priority over DDD’s lien claim, pursuant to N.J.S.A. 30:4D-7.2(d). Therefore, the court found that there was no need to review the DDD’s claim, since the Estate assets were insufficient to meet both claims. However, the court noted that the 2002 release of funds to the guardians provided Tracy Solivan with the ability to pay for the costs of the DDD services, and triggered the DDD’s statutory right of recoupment pursuant to N.J.A.C. 10:46D-2.1(f).

A copy of In re Estate of Solivan can be found here – Matter of the Estate of Tracy Solivan

For additional information concerning Medicaid and public benefits planning, visit: http://vanarellilaw.com/medicaid-public-benefits-planning/

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NJ Court Rules Evidence on Cell Phones Must Be Produced in Tangible Form Before Trial

In this case, an Ocean County judge ruled that litigants in domestic violence cases who want to introduce evidence contained on their cell phones, such as texts, emails, social media messages, or audio/visual evidence, must first provide such evidence to the court and the adversary in tangible form, such as on a printout or a CD. E C v R H., Ocean County, Chancery Division, Family Part, Docket No. FV-15-194-16 (August 11, 2015).

Plaintiff and defendant were former dating partners. Plaintiff claimed that defendant harassed her by sending many unwanted text and social media messages, along with voice mails, filled with profanities and derogatory comments. She filed a complaint for a restraining order to end the harassing communications.

At the hearing for the restraining order, plaintiff sought to introduce evidence of the alleged harassing communications stored her cell phone. As a result, the Court tackled the question of how to appropriately accept evidence from plaintiff’s cell phone into the court record.

The Court first recognized that harassment, the most frequently reported predicate offense for a finding of domestic violence under New Jersey’s Prevention of Domestic Violence Act, is largely a communication-based offense. As a result, cell phone evidence such as text messages and e-mails often go to the heart of a plaintiff’s claim of harassment, and/or a defendant’s defenses to same. Thus, such evidence is also highly relevant and should be considered by a court.

The Court ruled that parties in domestic violence cases should be given advance notice that cellphone evidence will be introduced at trial.

Accordingly, all electronic cell phone evidence such as emails, text messages, social media messages and photos that a litigant wants to introduce into evidence must be printed on paper, and submitted in triplicate. Audio recordings should be reproduced on CD or cassette, and video recordings should be produced on DVD.

While recognizing that the Prevention of Domestic Violence Act calls for final hearings to be held within 10 days of the filing of a complaint, the Court ruled that an adjournment for the purpose of producing hard copies of evidence stored on a litigant’s cell phone is appropriate even if it extends the proceedings beyond 10 days.

The Court noted that hard copy forms of electronically stored evidence provide the other party with a reasonable opportunity to review the evidence before trial.

The case is annexed here – E C v R H

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