Elder Law & Special Needs
Guardianship & Conservatorship
Our office encourages every client to proactively plan for the day when they are not able to care for themselves or manage their own property, such as by drafting advance directives or establishing a revocable living trust. In some cases where a person has not planned for this eventuality, the court must step in and appoint someone to act on that person’s behalf. A guardianship is an action filed with the propbate court to gain decision-making authority over someone (referred to as a “ward”) who lacks the capacity to make or communicate significant decisions regarding their health or safety. A conservatorship is a related action to gain decision-making authority over a ward’s property when they cannot make or communicate those decisions themselves.
A probate court will review petitions for guardianship and conservatorship to determine if there is probable cause to believe that the action is necessary. If so, the proposed ward will be served with a copy of their petition, notice of their right to court-appointed counsel, and instructions about appearing for an evaluation by a physician, psychologist, or licensed clinical social worker. Once the probate court has reviewed this evaluation, it will determine whether there is sufficient cause to proceed with a full hearing on the petition.
Both the guardianship and conservatorship are supposed to be construed narrowly by the court. Ingrained in the law is a respect for people’s independence and autonomy to make decisions for themselves, and both the guardianship and conservatorship can only be entered if there are not less restrictive means of caring for the proposed ward. These actions can also bring out strong feelings on both sides, as some friends and family members might think that court intervention is necessary to care for someone while others are strongly opposed. If either a guardianship or conservatorship action is dismissed or denied, the probate court will not consider another such action filed for the same proposed ward for two years.
Statistics tell us that approximately 75% of people above the age of 65 today will require some sort of long-term care in the future (which could include a nursing home stay). What many people do not realize is how high the cost of nursing home care is and how limited the options are for covering these costs if they cannot pay out-of-pocket.
According to a recent study, the median cost for nursing home care throughout Georgia is almost $70,000 per year. For many people on a fixed income, that cost is unattainable. What people must know is that Medicare does not provide coverage for long-term care in any real sense. If a number of technical requirements are satisfied, then Medicare will provide 100 days of long-term care coverage at the most, and only with a significant copayment. Many private insurance companies provide coverage for long-term care, but the premiums for that coverage are equally unrealistic for most people.
For many people, the only coverage option for long-term care is through Medicaid. Medicaid is a joint federal and state funded health insurance program with both income and resource limitations (as well as level-of-care requirements that are outside the scope of this article). In Georgia, the monthly income limit for Medicaid to provide long-term care coverage is $2205. Unfortunately, many people have too much income to qualify for Medicaid but not enough income to pay for their nursing home care out-of-pocket. Thankfully, most applicants for Medicaid can get under the income limit through the use of a qualified income (or “Miller”) trust.
The resource limits for nursing home Medicaid are a little more difficult to address than the income limits. All applicants have a $2000 general resource exemption, a $10,000 exemption for insurance and burial policies, and can have a homeplace worth up to $560,000 (so long as they intend to return to the home, a relative continues to live there, or selling the home would cause a hardship). If a Medicaid applicant’s resources exceed the limits, they need to take some additional steps to qualify. This usually involves spending down resources or converting those resources into something that is exempt from Medicaid eligibility considerations (for example, purchasing certain types of annuities). This process must be done carefully, however, because transferring assets for less than fair market value at any time during the five years leading up to a Medicaid application can result in a penalty period during which the applicant will be ineligible for coverage.
Special Needs Trusts
Special needs trusts (or SNTs) are established for disabled individuals so that they can qualify for needs-based public assistance, such as Supplemental Security Income (SSI) and Medicaid coverage, despite having resources that exceed the eligibility limits. There are two basic types of SNTs: self-settled and third party (which are sometimes referred to as supplemental needs trusts). In a self-settled SNT, a disabled individual will fund a trust with their own money for their own benefit. For example, If a person is involved in a disabling car accident and receives a large settlement, which would otherwise place them over applicable resource limits for public assistance, they can potentially qualify for SSI and Medicaid coverage by funding an SNT with their settlement. In a third-party SNT, someone other than the disabled individual will fund a trust with their money for the benefit of the disabled individual. For example, the parents of a disabled child may establish an SNT to receive any gifts and inheritance going to that child which could otherwise make that child ineligible for public assistance.
The main practical distinction between self-settled and third party SNTs is the “payback” requirement. With a self-settled SNT, the trust must include a provision stating that upon the death of the beneficiary (or termination of the trust) any remaining proceeds of the trust must be used to reimburse the state for its costs in providing Medicaid coverage. By contrast, the third-party SNT is not required to have a payback provision.
Our office is certified by the U.S. Department of Veterans Affairs to represent veterans in claims for benefits. Wartime veterans who are over the age of 65 or disabled, and who meet certain income and resource limits, are potentially eligible for a pension to supplement their income. The income limit and benefit amount for this pension go up significantly when veterans start to require the aid of another person to perform personal functions, become housebound, or enter a nursing home. This enhanced pension benefit is referred to as “aid and attendance.”
Aid and attendance benefits can be essential for veterans who choose to live at home or enter a personal care facilility for which Medicaid coverage is not available. It can also be helpful for veterans in a nursing home who need to spend down resources before they can become eligible for Medcaid. Aid and attendance benefits are not considered as income to a veteran for Medicaid eligibility purposes and, therefore, cannot prevent a veteran from being approved for Medicaid. However, once a veteran in a nursing home is approved for Medicaid, their aid and attendance benefit will be reduced to $90 per month.