“Do not fear mistakes - there are none.” : 2015

Thursday, December 31, 2015

Wednesday, December 23, 2015

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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Tuesday, December 22, 2015

SSA Publishes Regulations for ABLE Accounts Owned by SSI Recipients

Download (PDF, 259KB)

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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Monday, December 21, 2015

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

The post Bank Not Liable For Improper Withdrawals from Nursing Home Resident’s Account Made By Resident’s Agent Under Power of Attorney appeared first on Elder Law Attorney NJ | The Law Office of Donald D. Vanarelli.

Tuesday, December 15, 2015

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

The post Donald D. Vanarelli, Esq. to Moderate the Advanced Special Needs Trust Symposium appeared first on Elder Law Attorney NJ | The Law Office of Donald D. Vanarelli.

Monday, December 14, 2015

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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Friday, December 11, 2015

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

The post Imputation of Income to a Divorcing Spouse appeared first on Elder Law Attorney NJ | The Law Office of Donald D. Vanarelli.

Monday, December 7, 2015

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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Tuesday, December 1, 2015

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:

applies for benefits;
has not reached full retirement age;
has sufficient Social Security earnings to be deemed insured for disability;
is disabled;
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:

applies for SSD and all other benefits for which he/she may be entitled;
is a U.S. resident or qualified alien;
is not a resident of a public institution;
is disabled (if applicant is seeking eligibility based upon an alleged disability);
meets the income and resource requirements; and
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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Tuesday, November 24, 2015

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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Wednesday, November 18, 2015

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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Tuesday, November 17, 2015

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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Monday, November 9, 2015

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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Wednesday, November 4, 2015

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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Monday, November 2, 2015

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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Sunday, November 1, 2015

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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Monday, October 26, 2015

Attorney Who Prepares Mortgage Is Not Liable For Misrepresentations Contained In Mortgage

After plaintiffs lost the money they had invested in what turned out to be a Ponzi scheme, they sued the attorney who represented the Ponzi scheme operator. The Ponzi scheme operator, Antoinette Hodgson, had claimed to own a real estate investment business. During the time period in which the plaintiffs invested with Hodgson, the defendant attorney, John J. Merlino, Jr., performed legal services for Hodgson.

The attorney prepared mortgage notes securing some of the loans made by plaintiff to Hodgson. One of the mortgages drafted by Hodgson’s attorney contained a representation that Hodgson “warrants that … the premises are free from all liens…,” when in fact the property was already encumbered by a mortgage. The attorney did not conduct a title search before preparing the mortgage, and did not include a disclaimer in the mortgage to that effect.

Plaintiffs’ liability expert opined that attorney Merlino owed plaintiffs a “third-party duty” and that he was obligated to perform a title search on the property that was the subject of the above-referenced mortgage.

At the trial court level, the defendant attorney moved for summary judgment. The trial judge had granted the motion dismissing the case, finding that there was no evidence that the attorney knew the representation in the mortgage was false, or that the attorney had a duty to perform a title search prior to drafting the mortgage.

On appeal, the Appellate Division affirmed the trial court’s dismissal of the claim regarding the mortgage, finding no evidence that the attorney “knew or should have known” that the mortgage representation was false. The Appellate Division quoted that Supreme Court’s holding in Petrillo v. Bachenburg that,

whether an attorney owes a duty to a non-client third party depends on balancing the attorney’s duty to represent clients vigorously, [RPC 1.3], with the duty not to provide misleading information on which third parties foreseeably will rely, [RPC 4.1]… Attorneys may owe a duty of care to non-clients when the attorneys know, or should know, that non-clients will rely on the attorneys’ representations and the non-clients are not too remote from the attorneys to be entitled to protection.

The appellate court noted that it was Hodgson, not attorney Merlino, who made the representation that the property was free of liens, and there was no evidence that Merlino knew at the time that the representation was false. “The attorney drafted the document containing the representation, but did not make the representation.” As the court explained,

We do not interpret our Supreme Court’s pronouncements as extending attorneys’ malpractice liability to non-client third parties when the attorneys have done nothing more than draft documents containing representations or warranties, without reason to believe the representations are false.

However, the plaintiffs had also claimed that they had relied upon affirmative misrepresentations by attorney Merlino. Although the trial court had dismissed those claims, that part of the trial court’s dismissal was reversed by the Appellate Division. Plaintiffs had one telephone communication with attorney Merlino, in which plaintiffs claim that the attorney stated that Hodgson “absolutely” had enough net worth to pay plaintiffs what they had loaned her. The defendant attorney also sent plaintiffs a letter advising that he was representing Hodgson on the refinancing of six properties from which plaintiffs would be repaid, which turned out to be untrue. The Appellate Division found “some merit” to the plaintiffs’ claims. Because it concluded that a jury “could reasonably infer plaintiffs’ reliance on defendant’s assertions about Hodgson’s ability to repay the loans was reasonable,” it reversed that portion of the summary judgment dismissal, and remanded the case for further proceedings.

A copy of Goodman v. Merlino can be found here – Goodman v Merlino\

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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Thursday, October 22, 2015

Introduction to Medicare

Medicare is the federal government’s principal health care insurance program for people 65 years of age and over. In addition, the program covers people of any age who are permanently disabled or who have end-stage renal disease (people with kidney ailments that require dialysis or a kidney transplant). The Medicare program insures 49 million Americans and spends $551 billion a year on their care. Eligibility for Medicare is based upon an applicant’s work history, not financial need.

In addition to paying a monthly premium, Medicare recipients are often required to pay a portion of the cost of the services they receive in the form of a deductible or co-insurance amounts. Deductibles, co-insurance amounts and premiums increase each January. In addition, there are many services and items that Medicare does not cover, such as long-term unskilled nursing home and in-home care.

Medicare consists of three major programs: Part A, which covers hospital stays; Part B, which covers physician fees; and Part D, which covers prescription medications. In addition, Medicare beneficiaries often purchase private insurance policies called “Medigap” policies to help pay for services and items that Medicare does not cover.

Medicare Part A: Hospital Coverage

Medicare Part A covers institutional care in hospitals and skilled nursing facilities, as well as certain care given by home health agencies and care provided in hospices.

Any person who has reached age 65 and who is entitled to Social Security benefits is eligible for Medicare Part A without charge. That is, there are no premiums for this part of the Medicare program.

Medicare pays for 90 days of hospital care per “spell of illness,” plus an additional lifetime reserve of 60 days. A single “spell of illness” begins when the patient is admitted to a hospital or other covered facility, and ends when the patient has gone 60 days without being readmitted to a hospital or other facility. There is no limit on the number of spells of illness. However, the patient must satisfy a deductible before Medicare begins paying for treatment. This deductible, which changes annually, is $1,260 in 2015.

After the deductible is satisfied, Medicare will pay for virtually all hospital charges during the first 60 days of a recipient’s hospital stay, other than telephone and television expenses. If the hospital stay extends beyond 60 days, the Medicare beneficiary begins shouldering more of the cost of his or her care. From day 61 through day 90, the patient pays a coinsurance of $315 a day in 2015. Beyond the 90th day, the patient begins to tap into his or her 60-day lifetime reserve. During hospital stays covered by these reserve days, beneficiaries must pay a coinsurance of $630 per day in 2015. This reserve is not reset after each “spell of illness.” Once it has been exhausted, the beneficiary will receive coverage for only 90 days when the next spell of illness occurs. However, studies show that the average length of a hospital stay covered by Medicare is eight days.

Medicare Part A also pays for stays in psychiatric hospitals, but payment is limited to a total of 190 days of inpatient psychiatric hospital services during a beneficiary’s lifetime.

Medicare Part B: Coverage for Doctor’s Bills

Medicare Part B basically covers “outpatient” care: office visits to medical specialists, ambulance transportation, diagnostic tests performed in a doctor’s office or in a hospital on an outpatient basis, physician visits while the patient is in the hospital, and various outpatient therapies that are prescribed by a physician. Part B also covers a number of preventive services. In addition, Part B covers home health services if the beneficiary is not enrolled in Medicare Part A. The specifics of what is covered and what is not covered under Part B are complex and change periodically in response to efforts to contain health care costs.

Medicare recipients who are eligible for Part A are automatically enrolled in Part B unless they opt out. Part B enrollees pay a monthly premium that is adjusted annually. This premium, which is $104.90 a month in 2015, pays for about one-quarter of Part B’s actual costs; the federal government pays for the other 75 percent through general tax revenues. This cost-sharing makes Part B something of a bargain, and many Medicare recipients buy it unless their present or former employer provides comparable coverage.

Higher income beneficiaries pay higher Part B premiums. Following are the higher premium rates:

Individuals with annual incomes between $85,000 and $107,000 and married couples with annual incomes between $170,000 and $214,000 in 2015 will pay a monthly premium of $146.90.
Individuals with annual incomes between $107,000 and $160,000 and married couples with annual incomes between $214,000 and $320,000 in 2015 will pay a monthly premium of $209.80.
Individuals with annual incomes between $160,000 and $214,000 and married couples with annual incomes between $320,000 and $428,000 in 2015 will pay a monthly premium of $272.70.
Individuals with annual incomes of $214,000 or more and married couples with annual incomes of $428,000 or more in 2015 will pay a monthly premium of $335.70.

Moreover, there is a financial incentive not to delay enrollment; those who wait to enroll in Part B after they become eligible for Medicare will pay a penalty. For each year that an individual puts off enrolling, his or her monthly premium increases by 10 percent — permanently. Thus, a person who waits five years to enroll in Part B will pay premiums 50 percent higher than she otherwise would.

Medicare Part B recipients must satisfy an annual deductible of $147 (in 2015). Once the deductible has been met, Medicare pays 80 percent of what Medicare considers a “reasonable charge” for the item or service. The beneficiary is responsible for the other 20 percent.

However, in most cases what Medicare calls a “reasonable charge” is less than what a doctor or other medical provider normally charges for a service. Whether a Medicare beneficiary must pay part of the difference between the Medicare-approved charge and the provider’s normal charge depends on whether or not the provider has agreed to participate in the Medicare program.

If the provider participates in Medicare, he or she “accepts assignment,” which means that the provider agrees that the total charge for the covered service will be the amount approved by Medicare. Medicare then pays the provider 80 percent of its approved amount, after subtracting any part of the beneficiary’s annual deductible that has not already been met. The provider then charges the beneficiary the remaining 20 percent of the approved “reasonable” charge, plus any part of the deductible that has not been satisfied.

Medicare Part D: Prescription Drug Coverage

Medicare offers a federally subsidized drug program for seniors, in which private health insurers offer limited insurance coverage of prescription drugs to elderly and disabled Medicare recipients. The drug benefit is available only through insurers that contract with Medicare to market drug plans.

Medicare recipients who elect to be covered by the drug benefit will pay premiums averaging $33.13 a month in 2015. This is an average; some plans will charge more, some less.

After meeting a $320 (in 2015) deductible, you will pay 25 percent of drug costs up to $2,960 (in 2015) in a year, with Medicare footing the bill for the other 75 percent. The plan will pay $2,220 and you will pay $760. Previously coverage stopped completely at this point until total out-of-pocket spending reached a certain amount. (This coverage gap is sometimes called the “doughnut hole”.) However, the Affordable Care Act is slowly eliminating the doughnut hole. In 2015, until your total out-of-pocket spending reaches $4,700, you’ll pay 45 percent for brand-name drugs and 65 percent for generic drugs. Although you will be paying a discounted rate for drugs, the total cost of the drug will count toward your out-of-pocket costs. Once total spending for your covered drugs exceeds $6,680, Medicare will pay about 95 percent of costs above $6,680 (called “catastrophic coverage”). These discounts and Medicare coverage gradually increase until 2020 when the doughnut hole is fully closed.

Bear in mind that only payments for drugs that are covered by your plan (see below) count towards the out-of-pocket threshold. Drugs purchased abroad (such as from Canada) will not be covered by the Medicare benefit and will not count toward the out-of-pocket limit.

All Part D enrollees should have at least two Medicare private drug plans to choose from. The insurers choose the medicines — both brand-name and generic — that they will include in a plan’s “formulary,” the roster of drugs the plan covers and will pay for. However, each plan formulary must include at least two drugs in each drug class, and must cover a majority of the drugs in certain classes, such as antidepressants and anti-cancer agents.

Since each drug plan offers a different formulary, and the same drug may vary in price from plan to plan, the most important job for a Medicare beneficiary signing up for Part D is to determine whether the prescription drugs they need or anticipate needing — are covered under a particular plan and how much they cost.

Plans differ in the monthly premiums they charge, deductibles, the drugs they cover, the cost of those drugs, limitations on drug purchases, and the convenience of the plan’s pharmacy network, among other factors. A comparison tool is available on Medicare’s Web site that allows you to search for Medicare private drug plans in your region and compare their costs, covered drugs and pharmacy networks.

But it’s possible that all your diligent research could come to nothing because after you have enrolled in what seems to be the best plan, the plan may discontinue coverage or increase the cost of any particular drug. Even if that happens, however, beneficiaries will be locked into their choice for a full year unless a beneficiary is eligible for both Medicare and Medicaid may switch plans whenever they want.

Anyone who has either Medicare Part A or Medicare Part B (or both) can get Medicare Part D, Medicare’s prescription drug coverage. Bear in mind, however, that Medicare Part D will not pay for drugs that could have been paid for under Medicare Part A or Medicare Part B. These drugs will not be covered even if the beneficiary does not have either Part A or Part B.

To avoid a penalty, you need to enroll during your Initial Enrollment Period (IEP). Your IEP for Part D is the same as for Part B. It is a seven-month period that includes the three months before the month you become eligible, the month you are eligible and three months after the month you become eligible. Medicare beneficiaries may be subject to significant financial penalties for late enrollment. For every month you delay enrollment past the Initial Enrollment Period, the Medicare Part D premium will increase at least 1 percent.

Medigap Insurance: Coverage to Plug the Holes in Medicare

With all the deductibles, copayments and coverage exclusions, Medicare pays for only about half of the medical costs of America’s senior citizens. Much of the balance not covered by Medicare can be covered by purchasing a “Medigap” insurance policy.

Insurance companies may sell only Medigap policies that fall into one of 10 standard benefit packages, ranging from basic coverage to the most comprehensive coverage. The 10 available Medigap policy packages are identified by the letters A, B, C, D, F, G, K, L, M, and N. Plans E, H, I, and J are no longer sold, but, if you already have one, you can keep it. Each plan package offers a different combination of benefits, allowing purchasers to choose the combination that is right for them. All Medigap policies must provide at least the following core benefits:

The coinsurance for days 61 to 90 of a hospital stay
The coinsurance for days 91-150 of a hospital stay (lifetime reserve days)
All hospital-approved costs from day 151 through 365

In addition, plans A, B, C, D, F, and G also cover the following:

The cost of the first three pints of blood not covered by Medicare
The 20 percent coinsurance for Part B medical charges

Plan K offers the following benefits:

50 percent of the coinsurance for Part B medical services and 100 percent of preventative services
50 percent of the first three pints of blood
50 percent of hospice care cost sharing

Plan L offers the following benefits:

75 percent of the coinsurance for Part B medical services and 100 percent of preventative services
75 percent of the first three pints of blood
75 percent of hospice care cost sharing

The plans provide a combination of eight other areas of coverage on top of the basic set. These areas of coverage include the coinsurance for days 21 to 100 in a skilled nursing facility, the Part A and Part B deductibles, foreign travel emergencies, and prescription drug coverage.

Medigap policies do not fill all the gaps in Medicare coverage. The biggest gap they fail to bridge is for custodial care in a nursing facility or for skilled care in a nursing home beyond the first 100 days. For coverage of this type of care, you must either purchase long-term care insurance or qualify for Medicaid coverage.

Medigap also does not cover vision care, eyeglasses, hearing aids or dental care unless such treatment or equipment is needed as the result of an injury. In addition, Medigap plans do not cover prescription drugs.

It pays to shop around for a policy as premiums vary widely not only from state to state, but within states as well. To help you find and compare Medigap programs available in your area, the Medicare program offers a Web site called Medigap Policy Search. This interactive tool gives contact information for insurance companies in your state that sell Medigap policies, and offers basic information about the policies of some of these insurers, including which plans they offer; how they price their plans based on what rating method they use; and if you need to be a member of a certain organization to buy one of their plans.

For more on the basics of Medicare, Medicare.gov has a booklet designed for friends and family of Medicare members. To download the booklet, click here.

To learn more about the qualifications of the Law Office of Donald D. Vanarelli, visit: http://vanarellilaw.com/law-firm-profile/

(This article was adapted from several articles on Medicaid on the ElderLaw Answers website.)

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