Recent Legal Trends

Some of the most notable legal developments in recent years have been in the area known as Elder Law, a term which usually refers to legal considerations in a variety of practice areas as they pertain to individuals moving into their senior years.

Changes in Medicaid

One major development in this area was a substantial change in the rules concerning the eligibility for Medicaid, a program which often pays nursing home costs for elderly Americans needing skilled nursing care.  These changes went into effect on February 8, 2006 as part of legislation known as the Deficit Reduction Act of 2005 (DRA). The law was designed to force individuals and families to use much more of their personal resources to pay for nursing home care. The law was sardonically referred to as the “Nursing Home Bankruptcy Act” because it was believed that individuals could not possibly pay privately for all of the care necessary before they would be eligible for Medicaid.

Under the DRA, two significant changes occurred in the way eligibility for Medicaid to pay for nursing home care nursing was determined.  The “look-back” period for gifts and transfers was extended from three to five years, and the formula for calculating the penalty period for gifts and transfers was changed. The interplay between the longer look-back period and the new penalty formula made Medicaid eligibility much more restrictive.

We have a game plan

Fortunately, we have been able to develop lawful, effective and readily available planning strategies for individuals who anticipate a Medicaid application in the near future.  Although the term of the “look-back “period was extended, a transfer during that period does not necessarily lead to Medicaid ineligibility, if coupled with other planning mechanisms. In many cases, through the use of a combination of planning mechanisms, Medicaid eligibility might be available at approximately the same time as it would have been under prior law.

Joseph A. Ables, Jr.

Attorney Joseph A. Ables, Jr. of our Firm, was among the first in the State to utilize some of the highly effective and completely lawful planning techniques now used by attorneys who concentrate in this area of law.   These strategies help qualify individuals for Medicaid at the earliest date possible when the medical need arises.

Changes in the law regarding the Power of Attorney form

Most people are familiar with a document known as a Power of Attorney.  Although this form derives its name from the concept at the core of our profession, it most commonly enables non-lawyers to become the representative of another individual for the purpose of handling a wide variety of routine affairs including real estate, banking, insurance, business transactions, and numerous other personal affairs.

Mark your calendar

Beginning September 1, 2009, the New York Power of Attorney Law will be substantially changed.  The power of attorney document will now require the signature both of the principal and the proposed Agent, and the Agent’s power to conduct certain transactions is expanded in certain areas, but more limited in others.  Power of Attorney forms executed prior to the date of the new law are not automatically invalidated, but institutions may refuse to honor such documents if they have reasonable cause to require a new form.

Greater specificity required

The new statute requires greater specificity on the actual Power of Attorney document and an additional document known as a “Major Gifts Rider” must be attached to the document in order to authorize the Agent to make gifts in an aggregate amount of $500 or more.

The legislative history of the new Power of Attorney legislation, sponsored by local state Senator Dale Volker, suggests that the changes arose from concerns over the use of Powers of Attorney in making gifts, in setting forth the exact Fiduciary responsibility of the Agent, and to resolve uncertainty and conflict between Power of Attorney Statute and other provisions of the General Obligations Law.  The Law Revision Commission reviewed various surveys and studies, including one that showed that over 70% of individuals responding believed that the authority of the Agent needed further regulation.

More changes to come

We continue to expect changes over the next several years in both the Medicare and Medicaid programs, as well as further Federal intervention in health care and insurance law. This would be an excellent time to establish a good working relationship with an attorney who could become familiar with your individual situation and guide you through future changes in the law involving health care, financial affairs and the management of your family’s assets.

Please schedule your free initial consultation concerning any matter at all.
Call us…we can help. 716/681-3355