Top 25 Vanarelli Law Office Blog Posts and Website Articles in 2015

Happy New Year to clients, supporters, friends and readers. To celebrate the new year, we’ve ranked our most popular blog posts and website articles from this past year. For blog posts, the original post date is included after each hyperlinked title. Check out the list to see this year’s highlights and tell us what you’d like to see next year. As always, thank you for reading our website and blog!

The Law Office of Donald D. Vanarelli Launches VanarelliLaw.com Website. Posted on March 25, 2015. Earlier this year, we proudly announced the launch of our new website, located at http://VanarelliLaw.com. Hopefully, the new website accomplishes the goal we set for ourselves: to provide the best-possible user experience for website visitors researching elder law issues; estate, trust and gift tax laws; public benefits laws; special needs planning issues; and court procedures, such as probate litigation, will contests and elder mediation.

Will Contests, Probate Litigation and Elder Abuse Actions. This article describes the various kinds of lawsuits our attorneys are involved in, ranging from probate litigation and will contests, to trust actions, guardianship disputes, claims against estate fiduciaries, claims of abuse by agents acting under powers of attorney, joint account litigation, estate accounting challenges, and elder abuse lawsuits.

Attorneys Representing An Estate May Owe A Duty Of Care To Non-Clients Who Are Beneficiaries Of The Estate. Posted on April 17, 2015. In an important case, a New Jersey appeals court ruled that estate attorneys may owe a duty of care to non-clients when the attorneys know, or should know, that the non-clients will rely on the attorneys’ representations.

Top 10 (Actually 9) Noteworthy Cases Involving New Jersey Trusts, Including Special Needs Trusts. Posted on May 30, 2013. This blog post contained a summary of the noteworthy trust cases decided by New Jersey courts in 2012 and 2013, in chronological order.

Ethics Rules Clarified for NY Lawyers Who Use LinkedIn. Posted on March 28, 2015. The New York County Lawyers Association, in Formal Opinion 748, addressed the ethical impact on lawyers of their use of the social media website “LinkedIn.”

Medicaid Eligibility And The Pickle Amendment. Posted on March 30, 2010. This blog post explained how the Pickle Amendment helps recipients who are dual-eligible for both Social Security and SSI benefits to remain eligible for Medicaid even if the dual-eligible becomes ineligible for SSI benefits based on an increase in SSA benefits resulting from a cost-of-living adjustment.

Medicaid Applications and Medicaid Appeals. This article describes how to file for Medicaid benefits, identifies the information and documents required in the application process, and indicates how to file an appeal if an application for Medicaid benefits is incorrectly denied.

Lawsuit May Proceed Against CCRC For Misleading Marketing. Posted on May 28, 2015. Here, a New Jersey appeals court, reversing a trial court order dismissing a complaint filed by the son of a deceased former resident of a Continuing Care Retirement Community (CCRC), held that marketing pamphlets distributed by the CCRC could be the basis of a lawsuit alleging consumer fraud and similar claims regarding the CCRCs’ refund policy.

New Jersey Settles Federal Lawsuit, Amending its Medicaid Program to Exclude VA Pension as Countable Income. Posted on February 11, 2015. In 2015, the State of New Jersey entered into a Consent Order agreeing to amend the rules governing its Medicaid program in order to exclude pension benefits paid by the Department of Veterans Affairs when determining an applicant’s eligibility for Medicaid benefits. Our law firm represented the Alma Galletta, the lead plaintiff in this federal class action lawsuit.

Guardianship and Fiduciary Services. This article describes the guardianship process in New Jersey and the various fiduciary services provided to clients by our law firm, such as serving as agent under a power of attorney, trustee, executor or administrator of an estate and the like.

Federal Appeals Court Rules Short-Term Annuities Are Not “Available Resources” Preventing Medicaid Eligibility. Posted on September 3, 2015. In this case, the United States Court of Appeals for the Third Circuit, reversing an earlier federal district court judgment, ruled that “short-term annuities” purchased by applicants for nursing home Medicaid cannot be treated as an “available resource” preventing Medicaid eligibility.

Social Security Disability Appeals. The Law Office of Donald D. Vanarelli provides services to clients as legal counsel in appealing denial of claims for Social Security disability and Supplemental Security Income (SSI) benefits.

Reduction in PCA Hours Reversed; Assessment Tool Imposed Artificial Cap of 25 Hours of Care. Posted on September 14, 2015. The decision by United Healthcare, a managed care organization, to reduce the Personal Care Assistant (PCA) hours awarded to a disabled Medicaid recipient from forty (40) hours per week to twenty-five (25) hours per week was reversed on appeal.

Top 10 New Jersey Elder Law and Special Needs Trust Cases Decided in 2015. Posted on October 1, 2015. In this blog post, I summarized the top elder and disability law cases decided from September 2014 through August 2015.

Lifetime Achievement Award Presented to Donald D. Vanarelli, New Jersey Elder Law and Estate Planning Attorney. Posted on April 30, 2015. In this post, I described my surprise and delight upon receiving the Marilyn Askin Lifetime Achievement Award from the New Jersey State Bar Association’s Elder and Disability Law Section. The Lifetime Achievement Award, the Elder and Disability Law Section’s highest honor, is bestowed on an attorney with an established history of distinguished service who has made significant contributions in the field of elder and disability law throughout his or her career.

Court Rejects Alleged Incapacitated Person’s Preference for Guardian When Basis for Preference Was Not Provided. Posted on August 24, 2015. The Supreme Court of the State of North Dakota ruled that a lower court properly rejected an incapacitated person’s expressed preference for the appointment of a guardian because the incapacitated person could not provide the basis for the preference.

Another Caregiver Agreement Rejected By New Jersey Medicaid. Posted on July 21, 2015. The Division of Medical Assistance and Health Services, New Jersey’s state Medicaid agency, has consistently rejected caregiver contracts between Medicaid applicants and their adult children in recent years, and this case is just another example of this trend.

Disabled Vet Ordered Into VA Nursing Home Against His Wishes So His Limited Income Can Be Used To Pay Alimony. Posted on March 20, 2015. A New Jersey appeals court required a disabled 89 year old veteran to receive end-of-life care in a VA facility against his wishes rather than at home in order to use his limited income to continue paying alimony to his ex-wives.

Medicaid Eligibility Under The “Undue Hardship” Exception. Posted on February 20, 2013. This post describes the “undue hardship” exception in the Medicaid regulations. In the event a penalty is imposed as a result of a asset transfer for less than fair market value, a Medicaid applicant may seek a waiver of the penalty based upon “undue hardship,” which exists when application of the transfer of assets rules would deprive the individual of medical care such that his/her health or life would be endangered.

Attorney Who Provided Flawed Medicaid Planning Advice by Counseling Against Life Estate Liable For Legal Malpractice. Posted on November 24, 2015. The court held that an attorney could be sued for legal malpractice for incorrectly advising an elderly client not to retain a life estate in real property transferred to an adult child.

Appeals Court Rules Against Teacher Who Blogged That Her Students Were “Rude, Disengaged, Lazy Whiners”. Posted on September 9, 2015. The U.S. Circuit Court of Appeals for the Third Circuit ruled that a school district in suburban Philadelphia was within its rights to fire an English teacher who blogged that her students were “rude, disengaged, lazy whiners.”

Adult Child Has No Legal Right To An Inheritance Since New Jersey Law Permits Parents To Disinherit Their Children. Posted on March 11, 2015. This post describes a trial court’s ruling that a parent’s promise to leave assets to an adult child does not give rise to an enforceable claim of interference with anticipated inheritance since parents are not prohibited from disinheriting their children under New Jersey law notwithstanding promises to the contrary made during the parent’s life.

NJ Supreme Court Permits Disabled Child of Retired Fireman to Designate Special Needs Trust as Beneficiary of State Pension Plan. Posted on September 14, 2014. In a case that I litigated for six years through various lower courts and administrative agencies, the New Jersey Supreme Court ruled that the disabled adult child of a retired fireman may have his survivors’ benefits paid to a special needs trust rather than directly to the child, thereby allowing the child to maintain eligibility for Medicaid and other public benefits based on financial need.

Getting a “Conformed,” but Unsigned, Copy of a Last Will and Testament Admitted to Probate in New Jersey. Posted on March 4, 2014. This case described our law firm’s success in getting an unsigned copy of a Last Will and Testament admitted to probate.

Divorce and Equitable Distribution Ordered After Spouse’s Death to Prevent Unjust Enrichment and Fraud. Posted on March 18, 2015. A New Jersey appeals court held that divorce and equitable distribution of marital assets may be ordered after the death of one spouse to prevent unjust enrichment and fraud.

Thank you for making these our top stories of 2015. We promise many new and exciting things to come in 2016! We also hope you will consider the advice that these articles and blog posts offer. Please consider attending one of our seminars. As always, if you or a loved one need long-term care and require eligibility for Medicaid or other public benefits, or need advice about estate or special needs planning, or want to file for guardianship or Social Security benefits, or if you are involved in a probate litigation, will contest, contested guardianship, or an elder abuse trial, please contact us for a consultation, either via email, at dvanarelli@VanarelliLaw.com, or via phone, at (908) 232-7400.

For additional information concerning NJ elder law and special needs planning visit: http://vanarellilaw.com/legal-services/

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Lawyer Must Pay Legal Fees in Undue Influence Case

A lawyer who was found to have exerted undue influence over his mother must reimburse her estate for legal fees and costs, along with paying prejudgment interest from the date the estate monies were wrongfully taken, an appeals court ruled. Matter of the Estate of Sogliuzzo, Docket No. A-0882-14T2 (App. Div., December 17, 2015)

Jane P. Sogliuzzo died in 2008 leaving a son, John Sogliuzzo (John), and a daughter, Jane Adkins (Jane).  Jane was appointed executor of the Estate of Jane Sogliuzzo (Estate). Jane filed a verified complaint alleging that John exercised undue influence over their mother and took money from the estate while their mother was alive. A forensic accountant retained by the estate found that John used his mother’s funds to make payments to his law practice and to pay his children’s private school tuition.

John answered the complaint, but refused to answer interrogatories or deposition questions, or produce documents. As a result, default judgment was entered against John, awarding $520,414 in damages to the Estate. Also, the court held that John exerted undue influence over his mother.

John appealed the rulings made by the trial court. On appeal, the award of damages was affirmed. The appeals court then remanded the case back to the trial judge to determine responsibility for counsel fees and expenses, and whether prejudgment interest should run from the date the complaint was filed or the date when John wrongfully took estate monies.

On remand, the trial judge ordered John to pay counsel fees, finding that such award was justified because (1) he committed the tort of undue influence, and (2) the counsel fee award was necessary to make the Estate whole.  The trial court also found that the Estate was entitled to prejudgment interest running from the date the estate monies were wrongful taken by John. John filed another appeal.

The appeals court again affirmed the trial court’s rulings.   Although recognizing that New Jersey law generally prohibits the recovery of counsel fees by a prevailing party against a losing party in a lawsuit, the appeals court held that an exception exists when an executor or trustee commits the tort of undue influence. In that event, the law permits an estate to be made whole by assessing reasonable counsel fees against the fiduciary:

[John’s] exertion of undue influence over his mother to obtain significant financial benefit for himself met the rationale for counsel fees set by the state Supreme Court…

On that basis, the appeals court awarded counsel fees to the Estate.

The appeals court also ruled that the Estate was entitled to prejudgment interest running from the date the estate monies were wrongful taken by John:

The dates of misappropriation mark the point at which John benefitted from his wrongdoing as well as the point at which the Estate was injured. Equity compels calculating prejudgment interest from the date of defalcation …

The case is annexed here – Matter of the Estate of Sogliuzzo

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

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SSA Publishes Regulations for ABLE Accounts Owned by SSI Recipients

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As explained in previous blog posts here, here and here, an Achieving a Better Life Experience (ABLE) account is a tax-advantaged account that can be used to save funds for the disability-related expenses of the account’s designated beneficiary, who must be blind or disabled by a condition that began prior to the individual’s 26th birthday. By using an ABLE  account, family members, friends, or persons with special needs may to place up to $100,000 into an ABLE account that functions much like an IRA or 529 College Savings Account. Importantly, the funds in an ABLE account are not countable in determining eligibility for public benefits based upon financial need.

Many persons with disabilities receive Supplemental Security Income (SSI) benefits from the Social Security Administration (SSA). Along with SSI benefits, disabled persons also often receive Medicaid to pay the costs of medical care. These are critical public benefits based upon financial need that many persons with disabilities rely upon for support.

SSA has recently published regulations governing the treatment of ABLE accounts owned by SSI recipients. The regulations are publicly-available via the SSA.gov website and may be accessed using this link: <https://secure.ssa.gov/apps10/poms.nsf/lnx/0501130740>

Significant regulations include the following:

Contributions: Any person can contribute to an ABLE account. However, the Internal Revenue Service (IRS) limits the total annual contributions any ABLE account can receive from all sources to the amount of the per-donee gift-tax exclusion in effect for a given calendar year. For 2016, that limit is $14,000. SSA excludes contributions to an ABLE account from the income of the SSI  beneficiary.

Income earned by ABLE account investments: SSA excludes any earnings an ABLE account receives from the income of the SSI beneficiary.

Distributions: Distributions may be made only to or for the benefit of the designated beneficiary. Further, an ABLE account may distribute to pay for Qualified disability expenses (QDEs). QEDs are expenses related to the blindness or disability of the designated beneficiary and that are for the benefit of the designated beneficiary. QDEs include the following types of expenses:

• Education;
• Housing;
• Transportation;
• Employment training and support;
• Assistive technology and related services;
• Health;
• Prevention and wellness;
• Financial management and administrative services;
• Legal fees;
• Expenses for ABLE account oversight and monitoring;
• Funeral and burial; and,
• Basic living expenses

Balances in ABLE accounts: SSA excludes up to and including $100,000 of the balance of funds in an ABLE account from the resources of the SSI beneficiary. SSA counts the amount by which an ABLE account balance exceeds $100,000 as a countable resource of the SSI beneficiary.

The Federal Register Notice regarding the information that the agency will seek from state ABLE programs was also recently published, on December 14th, at 80 FR 77404 <https://www.gpo.gov/fdsys/pkg/FR-2015-12-14/pdf/2015-31351.pdf> .

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Bank Not Liable For Improper Withdrawals from Nursing Home Resident’s Account Made By Resident’s Agent Under Power of Attorney

In 2003, Michael Yahatz opened a bank account. The following year, the bank was acquired by Bank of America (“BOA”) and the account was converted to a money market account. In 2005, Mr. Yahatz signed a BOA signature card, which included an acknowledgement that the account would be governed by BOA’s deposit agreement. The deposit agreement included the following:

We Are Not Liable If You Fail To Report Promptly: … [If] you fail to notify us in writing of suspected problems or unauthorized transactions within 60 days after we make your statement … available to you, you agree that: You may not make a claim against us relating to the unreported problems or unauthorized transactions, regardless of the care or lack of care we may have exercised in handling your action; and [y]ou may not bring any legal proceeding or action against us to recover any amount alleged to have been improperly paid out of your account.

It also provided that, with respect to powers of attorney, “We may [] accept any form that we believe was executed by you and act on instructions we received under that form without any liability to you.”

In November 2012, while a resident of a nursing and rehabilitation facility, Mr. Yahatz signed a power of attorney naming Nydia Davila, an employee of the facility, as his agent. The following month, Ms. Davila withdrew more than $80,000 from Mr. Yahatz’s BOA account. Mr. Yahatz died in January 2013. That same month, BOA sent his monthly statement to his address.

BOA did not receive notice of the withdrawals until July 2013, when Mr. Yahatz’s estate filed a complaint against Davila, the rehabilitation center, and BOA. The claims against BOA alleged negligence and liability under N.J.S.A. 3B:14-57 (“Checks Drawn By Fiduciary Upon Principal’s Account”). BOA moved for summary judgment, which was granted.

On appeal, the dismissal of the complaint against BOA was affirmed. The Appellate Division agreed that the claims were time-barred under the terms of the deposit agreement that Mr. Yahatz had signed, because notice of the claim was made more than sixty days after the January 2013 statement was sent.

The estate argued that summary judgment was inappropriate because additional discovery was needed, based on its claim that the power of attorney was “invalid on its face,” and that discovery might establish that BOA was negligent or acted in bad faith in relying on the power of attorney. The Appellate Division rejected this argument, agreeing with the trial court that the estate had failed to demonstrate that additional discovery could make a difference in the outcome. The estate claimed that the power of attorney was “invalid on its face” because of the manner in which it was signed and notarized. However, the estate conceded that Mr. Yahatz had signed the document, and N.J.S.A. 46:2B-17 states that a power of attorney for banking transactions that is otherwise valid is not rendered invalid because it fails to comply with statutory requirements regarding execution/notarization. Because the estate admitted that the signature was that of Mr. Yahatz, the Appellate Division concluded that “[t]here can be no violation of a duty of ordinary care, or a finding of bad faith, where a bank fails to take action to confirm the authenticity of a signature the customer does not dispute is his own.”

 A copy of In re Estate of Yahatz can be found here – In re Estate of Yahatz

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Donald D. Vanarelli, Esq. to Moderate the Advanced Special Needs Trust Symposium

“Use of Special Needs Trusts in Cases Involving Divorce”  to be presented by leading NJ Elder Law and Estate Planning Attorney, Donald D. Vanarelli, Esq., who will also act as Moderator of the Symposium

Westfield, NJ – December 15, 2015 — Donald D. Vanarelli, Esq. (http://VanarelliLaw.com/) will moderate and present at the Advanced Special Needs Trust Symposium given by the New Jersey Institute for Continuing Legal Education on January 20, 2016 at the New Jersey Law Center in New Brunswick, NJ.

Mr. Vanarelli will provide an overview of the use of Special Needs Trusts in cases involving divorce to protect spousal and child support awards from impacting needs-based public benefits such as Supplemental Security Income (SSI), Medicaid, services from the Division of Developmental Disabilities (DDD), Section 8 Housing and the like.

For additional information regarding this event, attorneys may contact the New Jersey Institute for Continuing Legal Education (NJICLE) at 732-214-8500 or visit their website at http://www.njicle.com/.

For additional information regarding elder law and estate planning issues, including planning for disability, special needs trusts and divorce issues, contact the Law Office of Donald D. Vanarelli at 908-232-7400, or visit them online at http://VanarelliLaw.com/.

Information about the upcoming Advanced Special Needs Trust Symposium can be found below: 

ADVANCED SPECIAL NEEDS TRUST SYMPOSIUM

JANUARY 20, 2016, 9:00-4:00

NEW JERSEY LAW CENTER

/Moderator/Speaker::

Donald D. Vanarelli, Esq. Recipient, Lifetime Achievement Award, NJ State Bar, Elder and Disability Law Section Certified Elder Law Attorney by the ABA-accredited National Elder Law Foundation Accredited Veterans Attorney Former Social Security Claims Representative Past Chair, NJSBA Elder & Disability Law Section Law Offices of Donald D. Vanarelli (Westfield)

Speakers include:

Dana Bookbinder, Esq. Certified as an Elder Law Attorney by the ABA Accredited National Elder Law Foundation

Kristen Behrens, Esq. Begley Law Group, PC (Moorestown)

Jane M. Fearn-Zimmer, Esq., LLM Rothkoff Law Group (Cherry Hill)

Lawrence A. Friedman, Esq. Certified Elder Law Attorney by ABA Accredited National Elder Law Foundation Former Chair, NJSBA Elder & Disability Law Section Awarded the Distinguished Legislative Service Award from the NJSBA FriedmanLaw (Bridgewater)

Carol Johnston, Esq. Administrative Office of the Courts (Trenton)

Gary Mazart, Esq. Past Chair, NJSBA Elder & Disability LawSection Editor/Author: New Jersey Elder Law Practice (2010 Supplement, NJICLE) Schenck Price Smith & King, LLP (Florham Park & Paramus)

Shirley Whitenack, Esq. Schenck Price Smith & King, LLP (Florham Park & Paramus)

About The Program:

A special needs trust is a trust designed to ensure that beneficiaries can use property intended for their benefit. Having a solid understanding and road-map can be the difference between success & failure. When a client comes to you asking for help planning for the financial security and wellbeing of a child with a disability, are you confident that you can handle the situation? This program will provide you with a roadmap to properly plan for the future of the special needs dependent.

Program Agenda:
9:00	Introduction – Donald Vanarelli, Esq.
9:15	First-Party v. Third-Party Special Needs Trust (SNT), “Sole Benefit Of” Trusts, other trusts – Dana Bookbinder, Esq.
9:45	Reformation; SNTs to Support Trusts; Presenting SNTs for Court Approval – Shirley Whitenack, Esq.
10:50	Break
11:00	New Legislation: ABLE Act, ACA, SNT Fairness Act, NDAA (Vet Pensions to SNTs for Disabled Child) – Jane M. Fearn-Zimmer, Esq.
11:45	Luncheon
12:45	Use of SNTs in cases involving Divorce – Donald Vanarelli, Esq.
1:15	Alternatives to SNTs and Why (Settlement Preservation Trusts, Medicare Set-Aside Trust, etc.) – Kristen Behrens, Esq.
2:00	Break
2:10	Taxation – Gary Mazart, Esq.
2:45	SNT Administration (and short segment on proposed changes to Uniform Trust Code) – Lawrence A. Friedman, Esq.
3:30	Ethics: Conflicts between Grantor, Trustee, Beneficiary – Carol Johnston, Esq.
4:00	Adjourn

CLE Credits:
NJ CLE information: This program has been approved by the Board on Continuing Legal Education of the Supreme Court of New Jersey for 6.7 hours of total CLE credit.
NJ CLE :	This program has been approved for 6.7 credits (50 minute hour)
PA CLE:	5.5 substantive credits pending ($24 fee – separate check payable to NJICLE must be submitted at the end of the program)
NY CLE (nt):	6.5 professional practice credits
CPE:	6.0 taxation credit

About Donald D. Vanarelli 

Recipient of the Marilyn Askin Lifetime Achievement Award from the New Jersey State Bar Association’s Elder and Disability Law Section, Donald D. Vanarelli is a Certified Elder Law Attorney, and a member of the Council of Advanced Practitioners of the National Academy of Elder Law Attorneys. Mr. Vanarelli is also an Accredited Veterans Attorney and an Accredited Professional Mediator. He has successfully litigated cases in New Jersey’s Supreme Court and in federal court. Mr. Vanarelli represents seniors, the disabled and their families in estate planning, financing long-term medical care, nursing home issues, qualifying for Supplemental Security Income, Medicaid and other public benefits, special needs planning, and litigation, including probate, elder abuse and guardianship lawsuits.

About The Law Office of Donald D. Vanarelli 

Located in Westfield, New Jersey, the firm provides a broad range of legal services for seniors, the disabled and their families. The law firm guides clients through complex legal areas including public benefits planning, trial advocacy and court procedures, the administrative process, as well as estate and gift tax laws.

Contact: Ginny Morrissey, The Law Office of Donald D. Vanarelli, Tel: 908-232-7400, Email: gmorrissey@VanarellilLaw.com

For additional information concerning special needs trusts and disability planning, visit: http://vanarellilaw.com/special-needs-disability-planning/

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

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Special Needs Trust Lacking Payback Provision Countable

In this case, a Medicaid application filed by the beneficiary of a special needs trust was denied by the Medicaid agency and upheld on appeal because the special needs trust, funded with the proceeds from a personal injury lawsuit but lacking a Medicaid payback provision, violated applicable law. D.W. v. Division of Medical Assistance and Health Services (N.J. Super. Ct. App. Div., No. A-2092-13T4, Dec. 2, 2015).

D.W., a twenty-nine- year-old developmentally disabled man who resided in a group home, applied for a Medicaid waiver program. The New Jersey Division of Medical Assistance and Health Services (DMAHS) denied D.W.’s Medicaid application. DMAHS found that D.W. was the beneficiary of a self-settled special needs trust (SNT) which did not contain a Medicaid payback provision. The SNT, created by a New Jersey trial court in 2008, was funded with $278,389.28 recovered in a personal injury lawsuit filed by D.W. Based upon the SNT’s missing payback provision, DMAHS denied Medicaid eligibility, finding the SNT did not “meet the Special Needs Trust Guidelines in accordance with Medicaid regulations.”

D.W. filed an administrative appeal, seeking a fair hearing. The administrative law judge (ALJ) hearing the case found that a self-funded SNT “must meet specific requirements,” chief among them the inclusion of a payback provision insuring “repayment to the State of an amount equal to the total amount of medical assistance, if any, which is paid to D.W. under the State Medicaid Plan.” Because D.W.’s SNT lacked a payback provision, the ALJ found DMAHS was correct in denying D.W.’s Medicaid application.  The Director of DMAHS adopted the ALJ’s decision.

D.W. appealed to the Superior Court of New Jersey, Appellate Division. On appeal, D.W. argued that his SNT did not require a payback provision because the SNT was irrevocable and the beneficiary did not have the right to compel distributions. As a result, according to D.W., DMAHS erred in classifying his SNT as a countable resource for Medicaid eligibility purposes. In response, DMAHS contended that, because D.W.’s SNT was funded with his own assets, it is a first-party, self-settled trust which must contain a payback provision under Medicaid law.

The appellate court affirmed the denial of D.W.’s Medicaid application. The court found that the “critical issue here for ‘Medicaid eligibility purposes is who established the trust.’”… Because there is no question but that D.W.’s own assets recovered from a personal injury lawsuit were used to fund the trust, the law is clear that his is a self-settled trust which must [contain a payback provision] to be considered an excludable resource. Because D.W.’s trust admittedly lacks the payback provision required by those enactments, the Director was correct to conclude it is an available resource rendering him ineligible for Medicaid.

To read the full text of the court’s opinion, go to: D.W. v. Division of Medical Assistance and Health Services

For additional information concerning special needs trusts and disability planning, visit: http://vanarellilaw.com/special-needs-disability-planning/

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

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Imputation of Income to a Divorcing Spouse

In many divorce cases, when a one spouse or parent is not reporting his or her true income, or is unemployed or underemployed and not earning what he or she could, the court may impute income to that spouse so the proper amount of spousal or child support is paid to the other divorcing spouse.

In a recent unpublished opinion in a case involving a support obligation imposed on one spouse by the court in a divorce action entitled Ungvarsky v. Ungvarsky, Docket No. A-1852-14T3 (App. Div., December 10, 2015), the New Jersey appellate court provided a primer on the grounds for imputing income to a divorcing spouse for the purpose of computing the support obligation to the other spouse:

A court can impute income to a party for support purposes when the party is, without just cause, intentionally and voluntarily underemployed or unemployed. Caplan v. Caplan, 182 N.J. 250, 268 (2005); Golian v. Golian, 344 N.J. Super. 337, 341 (App. Div. 2001). Stated differently, when a spouse is not earning his or her true potential income, “an imputation of income based on that potential is appropriate.” Stiffler v. Stiffler, 304 N.J. Super. 96, 101 (Ch. Div. 1999); accord Halliwell v. Halliwell, 326 N.J. Super. 442, 448 (App. Div. 1999) (potential earning capacity of party, not his or her actual income, should be considered). The imputed income figure is one the party is capable of earning. Dorfman v. Dorfman, 315 N.J. Super. 511, 516 (App. Div. 1998). Before imputing income, however, a judge must first find that the spouse was voluntarily underemployed or unemployed without just cause. Caplan, supra, 182 N.J. at 268. We review a trial court’s decision to impute income under an abuse of discretion standard. Ibrahim v. Aziz, 402 N.J. Super. 205, 210 (App. Div. 2008). The decision “to impute income of a specified amount will not be overturned unless the underlying findings are inconsistent with or unsupported by competent evidence.” Storey v. Storey, 373 N.J. Super. 464, 474-75 (App. Div. 2004). “Competent evidence includes data on prevailing wages from sources subject to judicial notice.” Id. at 475.

The Ungvarsky case can be found here – Ungvarsky v. Ungvarsky

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

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Appellate Division Rejects Surviving Spouse’s Claim To Life Insurance Proceeds

In this case, a surviving spouse’s claim to her deceased spouse’s life insurance proceeds was rejected by an appeals court in New Jersey because the deceased spouse named others as beneficiaries. Fromageot v. Fromageot, Docket No. A-1099-13T1 (App. Div.,  December 2, 2015)

The decedent, Paul Fromageot (“Paul”), had two life insurance policies. One was a $2 million policy naming his wife as the sole beneficiary. The other policy, which was the subject of the litigation, was a $452,000 Hartford Life Insurance policy obtained through payroll deductions with Paul’s employer, Alliance Capital Management (“Alliance”). Paul had named four people as beneficiaries of this policy: his wife, his two parents, and his eldest child. The Alliance life insurance enrollment card stated that, “If more than one beneficiary is named, the death benefit… will be paid in equal shares to the designated beneficiaries who survive the employee.”

Following Paul’s death, Hartford paid each of the four beneficiaries a one-fourth share of the death benefit. Paul’s widow filed a complaint against Paul’s parents, claiming that Paul had intended for her to receive the entire policy proceeds and that, “[d]ue to poor draftsmanship of the declaration form, misrepresentation of [Paul’s] intentions, or mistake of fact,” Paul’s parents improperly received one-half of the policy proceeds and had been unjustly enriched. The plaintiff/widow sought restitution of that portion of the policy proceeds, made claims of breach of fiduciary duty, and demanded an accounting.

The Chancery Court held a trial, in which the widow presented an Alliance personal benefits statement, which identified her and their eldest child as beneficiaries, as well as computer “screen shots” identifying Paul’s widow, parents, and four children as beneficiaries. She also had a Knights of Columbus field agent testify that Paul had told him he had “a $500,000 policy with his employer, and $250,000 ‘on’ plaintiff” (apparently understanding this to indicate that Paul intended the plaintiff/widow to be the sole beneficiary).

In contrast, Paul’s father (a defendant) testified as to Paul and the plaintiff’s troubled marriage and Paul’s close relationship with his parents.

The Chancery Court judge found that the insurance application had been plainly written. The judge rejected the plaintiff’s claim that Paul had intended to name the defendants as contingent beneficiaries but had misunderstood the terms of the Alliance application. Instead, the judge found that Paul’s intention to name his parents as primary beneficiaries was consistent with the circumstances that existed at the time of the application: the couple’s troubled marriage, the “ill will” between plaintiff and Paul’s parents, and Paul’s close relationship with his parents.

The Appellate Division affirmed the Chancery Division’s decision.

 A copy of Fromageot v. Fromageot can be found here –  Fromageot v. Fromageot

For additional information concerning estate planning and administration, visit: http://vanarellilaw.com/estate-planning-administration/

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

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Determining Disability Under Social Security’s Rules and Regulations

Disability benefits are available to claimants under both disability benefit programs established under the Social Security Act (the “Act”), i.e., the regular Social Security disability program under Title II of the Act, and the Supplemental Security Income program under Title XVI of the Act.

Social Security Disability (“SSD”) Benefits:

Social Security Disability benefits are available to a blind or disabled worker who:

1. applies for benefits;
2. has not reached full retirement age;
3. has sufficient Social Security earnings to be deemed insured for disability;
4. is disabled;
5. has been disabled for a 5-month waiting period within the last 17 months prior to the month of application.

Supplemental Security Income (“SSI”) Benefits:

Supplemental Security Income benefits are available to an aged (65 or older), blind or disabled individual who:

1. applies for SSD and all other benefits for which he/she may be entitled;
2. is a U.S. resident or qualified alien;
3. is not a resident of a public institution;
4. is disabled (if applicant is seeking eligibility based upon an alleged disability);
5. meets the income and resource requirements; and
6. is not fleeing to avoid prosecution for a felony or violating probation or parole.

“Disability,” Defined

Congress defined the term “disability” as follows: An inability “to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.” In other words, there must be a severe physical or mental impairment, or combination of impairments, that can be expected to last for a continuous period of at least 12 months, or result in death.

Social Security’s Five-Step Disability Evaluation Process 

Social Security regulations provide a five-step sequential evaluation process for determining whether a claimant is “disabled” under the law. The first two criteria are as follows:

(1)           The claimant is not engaged in “substantial gainful activity” (“SGA”); and,

(2)           The claimant has a “severe” impairment, which will last at least 12 months (or result in death).

If the claimant satisfies the above two inquiries, the severity of the impairment is then analyzed as follows:

(3)           The impairment meets or equals the severity of the listed impairments as defined in the medical listings.

If the answer to this question is in the affirmative, then the claimant is disabled, according to medical listings. Otherwise, the inquiry is as follows:

(4)           The claimant is unable to perform his/her “past relevant work;” and,

(5)           The claimant is unable to perform other work within his “residual functional capacity.”

If these latter questions are answered affirmatively, then the claimant is disabled according to vocational factors, even though the claimant has not satisfied the medical listing. 

A commonly used diagram of the disability determination process follows: 

Diagram of Social Security’s Disability Decision and Sequential Evaluation Process

Step 1: Substantial Gainful Activity (SGA) 

The Social Security Administration has established certain earnings levels as reasonable signs that a person can perform SGA.  As of 2016, that level is $1,130 per month for disabled persons, and $1,820 per month for a blind person.  If one can potentially earn $1,130 or more (or $1,820 or more if blind), then Social Security presumes that that person is able to engage in SGA.  The presumed SGA amount is indexed to an annual cost of living allowance and is adjusted in January of each year.  

Step 2: Determining “Severity” 

Social Security is supposed to consider the combined effects of all impairments, including multiple non-severe impairments as well as subjective symptoms that arise from medically determinable impairments, in assessing whether an impairment or group of impairments reduces a claimant’s ability to do basic work activity. Close cases must be decided in favor of finding that an impairment is severe.   

Duration Requirement 

Unless it is expected to result in death, an impairment must have lasted or be expected to last for a continuous period of 12 months before the impairment will be considered disabling. 

Step 3: Listing of Impairments 

To be found disabled at Step 3, a claimant’s disability must meet or equal one of the impairments found in the Listing of Impairments. The Listing of Impairments is a set of medical criteria for disability found at Appendix 1 of the Social Security disability regulations, officially cited as 20 C.F.R. Part 404, Subpart P, Appendix 1. The Listing of Impairments can be found on the Social Security website, here:  https://www.socialsecurity.gov/OP_Home/cfr20/404/404-app-p01.htm.

Step 4: Past Relevant Work

Usually, the success of a disability case filed with the Social Security Administration will focus on Steps 4 and 5 of the sequential analysis. At Step 4, the claimant must prove that he or she is incapable of performing any “past relevant work.” “Past relevant work” refers to all work that was performed by the claimant in the 15 year period prior to the date of the disability claim. If the claimant retains the ability to perform “past relevant work,” the claimant will not be found to be disabled under Social Security rules.

Step 5: Other Work Within “Residual Functional Capacity”

If the claimant proves that he or she cannot perform past relevant work, the claimant must show that he or she cannot make the adjustments necessary to perform any other work that exists in the national economy, considering the claimant’s “residual functional capacity” (i.e., remaining work capacity given the claimant’s disability), age, education and work experience. 

If, because of the claimant’s impairments (either physical or mental), the claimant can no longer perform the physical and mental demands of past employment, or do other work based upon the claimant’s residual functional capacity, age, education, and work experience, then the claimant is disabled. In making this determination, SSA will consider both medical and non-medical information.

Routes to Disability Finding

The five-step sequential evaluation process provides two main routes for a finding of disability. One route culminates at Step 3 by proving that the claimant’s disability meets or equals one of the impairments found in the Listing of Impairments. This is the least traveled route to success in the Social Security arena. The other route culminates at Step 5 and involves proving that the claimant can no longer perform past employment, or do other work based upon the claimant’s residual functional capacity, age, education, and experience. Most Social Security disability claims are won or lost at Step 5.

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

The Law Office of Donald D. Vanarelli website: http://VanarelliLaw.com/

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