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Commonly Used Terms in Elder Law


            In our legal practice, we often see clients who are elderly or have been diagnosed with a disease, such as Alzheimer's Disease.  More often, we see the close relatives of these people.  They are seeking advice on estate and financial planning and, in particular, are concerned about how they will be paying for the long-term medical care, such as nursing homes, that they know looms in the future.              Thereafter, our meeting leads to a discussion of Medicare, Medicaid, Durable Powers of Attorney, Wills, Health Care Proxies, Living Wills and Do Not Resuscitate Orders.  When discussing their assets, a client mentions that they have joint bank accounts, but they are not sure what that means to them in relationship to Medicaid Planning.             To better educate our clients before they come in to our office for the first time, we have prepared the following list of definitions and explanations of some of these important terms.  Legal action should not be taken based upon this presentation, but only after good legal advice is obtained.             Do Not Resuscitate Order (DNR):              An order not to attempt cardiopulmonary resuscitation in the event the patient suffers cardiac or respiratory arrest.  Such order may cover all cardiopulmonary resuscitation measures or may be limited to specific procedures or equipment, depending upon the scope of the consent.  Under New York Law, all adult patients can request a Do Not Resuscitate Order.             Durable Power of Attorney:  A legal instrument authorizing another to act as one's agent.  The agent's power to act is revoked on the death of the principal and may be revoked by the principal during his lifetime.  The power is durable if the instrument states that the power survives the incapacity of the principal.
            Fair Hearing:  A legal procedure or hearing in which the Medicaid applicant or recipient challenges an action or lack of action of the Medicaid Program.  The Fair Hearing System is managed by the New York State Department of Social Services.              Gift Tax:  When a transfer of an asset has been made to another for less than fair market value, this transfer is considered a gift and a gift tax may have to be paid, depending upon the value of the gift.              Guardian:  A person appointed by the court to manage the property/assets of another and to make personal and health care decisions for another who is unable to do so for himself.              Health Care Proxy:  A document wherein the principal authorizes another to act as one's agent to make health care decisions.             Homestead:  The home and land occupied by a Medicaid applicant/recipient and his/her family including integral parts such as buildings and garages.  This can include a cooperative apartment, condominium, home trailers, mobile homes or a two or three-family house.  It may include up to three apartments or up to two apartments with a store or office.  18 NYCRR Section 360.23(b).  The home is exempt only if it is "essential and appropriate to the needs of the household".  18 NYCRR Section 360.5(a)(1)(i).  Property ceases to be a homestead if the Medicaid recipient is in a medical facility in a permanent absence status "and there is no spouse, minor child or other dependent relative "living in the property".  18 NYCRR Section 360.6(b)(2).              Income:  Any recurring payment that is counted in the month in which it is received.  Income includes earned income, Social Security payments, interest and dividends.             Jointly Owned Resources:  Under New York Law, joint bank accounts are presumed to be owned equally by each person whose name is on the account.  This presumption is rebuttable.             Lien:  A charge or security or encumbrance upon property.  The State may place a lien against the estate of a Medicaid recipient if the homestead is no longer exempt upon the death of the Medicaid recipient and there is no surviving spouse.  If there is a surviving spouse, then no lien can be placed until the death of the surviving spouse at which time a lien can be placed against the surviving spouse's estate.  A lien terminates if the Medicaid recipient, while still alive, is discharged home from an institution. 
              Living Will:  A document wherein the declarant may, in advance, refuse measures that can only futilely prolong the process of dying.  New York does not have a statute regarding Living Wills.             Medicaid:  A joint Federal-State program administered by local governments.  Its purpose is to provide payment for a comprehensive range of medical services for persons with low income and resources.  Applicants for Medicaid must show financial need.              Medicare:  Medicare was enacted into law in l965 as a part of the Social Security Act.  It was intended to increase access to health care services and to reduce the financial burden of the high cost of medical care for the elderly.  Medicare, unlike Medicaid, is not a means-tested program, that is, income and assets do not determine eligibility.  A major drawback to Medicare coverage for nursing home patients is that Medicare does not cover custodial care.              Medicare Catastrophic Coverage Act:  Enacted in l988 as the first major revision of the Medicare Program since its inception in l965.  Most of the act was repealed in l989, however, the Medicaid Transfer of Assets Provisions remained intact.  The section relevant to transfer of assets provided for numerous exceptions wherein assets could be transferred without triggering a "waiting period" before the person who made the transfer would be Medicaid eligible.  Aside from these exceptions, the general rule is that when a transfer of an asset has been made, this triggers a "waiting period.”  The waiting period depends upon the size of the asset transferred.  The waiting period is determined by using a formula.  This is a complicated area that should always be discussed with an experienced attorney.             Resource:  Any assets of a Medicaid applicant.  This would include savings accounts, checking accounts, stocks, bonds, certificates of deposit and real property.             Will:  An instrument by which a person makes a disposition of his property, to take effect after his death.  A Will is revocable during the persons’ lifetime.              We are hopeful that the above definitions give you an overview and some general understanding about some of the terms that will be discussed when meeting with an Elder Law Attorney for the purpose of planning.  The Elder Law Attorney will be knowledgeable in the areas of Estate Planning, Medicaid and tax implications of transferring assets.