Several weeks ago, on Sunday, November 20th, I was a guest on The Caring Generation, a radio show airing on 630 KHOW-AM, a Talk Radio Station broadcasting from Denver, Colorado, and on the internet. The show is hosted by Pamela D. Wilson, who identified herself as the “Care Navigator.” The Caring Generation is about “the joys, fears and frustrations of being a caregiver.“ In describing herself, Ms. Wilson says she is an expert in “educating and supporting individuals facing caregiving issues and navigating lifestyle changes related to aging.”
I participated in a live telephone interview. The theme of my segment was “financial exploitation of the elderly.” The show’s producer, Hope Carwile, who is originally from New Jersey, told me that I was asked to speak on the show after she read my paper entitled “Financial Exploitation of the Elderly: Impact on Medicaid Eligibility”, which is posted on my blog.
The show was presented in a question – answer format. I’ve summarized the questions I was asked and the answers I gave below. A podcast of my segment of the show is also posted.
1. How often do you see financial exploitation of the elderly that leads to problems when they need to apply for a public benefit like Medicaid and can you give an example?
Personally, I’ve seen it in my legal practice too often.
It common for an elderly or disabled person to entrust his or her finances to a third party. For example, an elder who is becoming overwhelmed by handling day-to-day finances might execute a power of attorney to a relative or friend, or might simply “hand over the checkbook” to a relative or friend.
But what happens when that trusted friend or relative misuses that authority?
As our elder population continues to increase dramatically, the financial exploitation of the elderly is an increasingly serious problem.
2. Give an example of what might be considered as normal spending or gifting that is not appropriate if someone applies for Medicaid?
Keep in mind that any “gifting” by the elder, even if authorized by the elder, may render the elder ineligible for Medicaid. Medicaid subjects transfers that are made for less than fair market value (in other words, gifts) to a penalty period.
3. What happens to an older adult who need Medicaid and is unable to qualify because of exploitation or a family member who spent money unwisely?
Well, that’s a complicated question that involves the complex body of Medicaid law, complicated even further by competency issues, issues of family trust, proving whether transfers were “authorized,” and litigation costs. I’ve written a paper on this subject, which you can find on my website.
4. You worked for the social security administration, what were some of the more common issues you saw with individuals applying for benefits and being denied.
There were usually no problems with people who applied for Social Security retirement benefits. The applicant was either insured for benefits (i.e., had sufficient work history) or not. Occasionally applicants questioned the amount of the benefit, or with self-employed applicants the issue of issue of questionable retirement arose. Similarly, applicants for Social Security disability benefits had to prove that they were insured for benefits and met the agency’s standard for determining disability. There were many more issues with applicants for Supplemental Security Income (SSI) benefits. SSI applicants had to prove that they met the program’s financial requirements concerning limited income and resources, living arrangements were explored and age or disability had to be proven.
5. There are issues with exploitation and unwise spending. What about attorneys who legally help families shift assets to avoid money and property being sold to pay for care? Is this okay because it’s legal?
I think many elders who have the choice of preserving their money for their loved ones (by having Medicaid pay for their nursing care) choose to do so. That’s what Medicaid planning is, and it’s legally permitted under state and federal law. Here in New Jersey, I represented an elder’s children all the way to our Supreme Court in a case involving Medicaid planning. The case was In re Keri, 181 N.J. 50, 69 (2004). There, our Supreme Court confirmed that Medicaid planning is permitted under the law. The court compared Medicaid planning to estate tax planning, where taxpayers maximize their deductions under tax laws to preserve income for their families, even though estate tax planning also reduces the amount of money available to the government.
6. Why isn’t there more education available to the public about applying for benefits, what’s allowed and not allowed so that individuals can avoid issues when applications are made?
More and more information is out there, thanks to the internet. My website offers a lot of information for New Jersey residents on this issue. But this is a really complicated area of law, and that’s why I believe it’s so important to consult with an elder law attorney in your area.
The podcast of my interview on The Caring Generation, is attached here – Podcast – The Caring Generation. The entire show, which aired on November 20th, is 2 hours long and included a number of other guests, can be found on the website of The Caring Generation.
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