How to Prepare When Elderly Parents Move In With Adult Children

More and more parents are moving in with their adult children, and the trend probably won’t reverse anytime soon. As nursing home costs continue to rise, children and their parents are finding that living together is a better arrangement, both financially and emotionally. But having a parent move in is a big adjustment for everyone, and it is important to be prepared. Preparations can range from making physical adjustments to the house to figuring out finances. The following are some things to think about.

• Work out the financial details first. If the adult children have siblings, the question of whether the siblings are going to contribute to the parents’ room and board can be sensitive. Even if there are no siblings, there is still the question of how much the parents can or should contribute to the household. An extra mouth to feed can be expensive. It can get even more costly if you need to do major renovations or hire a home health care worker.

There are many considerations that can have tax or other consequences. Should the parents have a contract in which they pay the children for caring for them? If the parents contribute to remodeling the house, do they gift their portion of the house to the children, retain an interest, or put it in a trust? These and other decisions can affect the parents’ eligibility for Medicaid if it becomes necessary for the parents to enter a nursing home at some point.

To avoid fostering resentment and guilt among family members, you should try to work out as many of these issues as you can before the big move. An elder law attorney can help your family create a plan that takes all the various contingencies into account, so that everyone is on the same page and knows what to expect.

• Make the home senior friendly. Whether adding an addition or just fixing up a spare bedroom, adjustments will probably have to be made to accommodate the parent or parents. Some basic adjustments include replacing doorknobs with levers, checking railings to make sure they are sturdy, installing grab bars in the bathroom, and putting non-slip backings on rugs. More significant changes could be converting a room on the first floor into a bedroom, widening doors to allow a wheelchair or walker to pass through, and installing ramps.

In addition to these accommodations, the space should be personalized for the parents. Consider the parents’ likes and dislikes and what would make them feel at home when renovating. It is important that even if the parents have only a bedroom of their own, they feel like it is their space.

• Look into a tax deduction. When considering the financial details of this new arrangement, keep in mind that the children may be able to claim the parents as a dependent and get a tax deduction if they provide more than half of the parents’ support during the year.

• Know where to go for help. If family members are serving as caregivers, they don’t need to feel like they are doing this all alone. There a number of services that are designed to help caregivers. From home health care workers to meals programs and transportation services to adult day care centers and respite services, there are a number of different ways to get help. Contact an Area Agencies on Aging program in your state to find out the services in your area. In addition a number of resources are available to provide caregivers with information and support.

The following are some books that may help caregivers understand what to expect:

How to Care for Aging Parents

How to Care for Your Parents’ Money While Caring for Your Parents

They’re Your Parents, Too!

The Complete Idiot’s Guide to Caring for Aging Parents.

To discuss elder law issues with an attorney, please call the Elder Law Center at 630-844-0065 or contact us via email. The Elder Law Center is located in Aurora, IL, Kane County, in the Chicago Western Suburbs.

Governor Quinn Signs SMART Act

On June 14, 2012, Governor Quinn, signed Senate Bill 2840, the SMART Act (Saving Medicaid Access and Resources Together Act).  As previously reported, the SMART Act makes significant and harsh changes to the Medicaid eligibility rules for individuals applying for Medicaid assistance for long-term care.  Most of the changes included in the SMART Act are effective immediately.  Pursuant to the SMART Act:

— The Community Spouse Resource Allowance is now set at $109,560.00, and the monthly income allowance is set at $2,739.00.  The language in the SMART Act does NOT include a provision for the annual adjustment of these amounts, which are both lower than the current maximum Federal allowances;

— Individuals over the age of 65 will no longer be able to participate in OBRA pooled trusts, unless they are a ward of the State or County Public Guardian; and

— Homestead property held in a trust (even a revocable living trust) will no longer be considered exempt homestead property.

In addition to the above highlights, the SMART Act makes other substantial changes that will negatively impact senior citizens, and other individuals, in need of Medicaid assistance for long-term care.   Accordingly, our office will continue to advocate for trailer legislation to minimize the negative impact of the SMART Act upon the senior citizens of Illinois.  Should you share our concerns, we encourage you to contact your legislators to also express your concerns.  You can search for your representatives here:

www.elections.il.gov/districtlocator/districtofficialsearchbyaddress.aspx

To learn more about how the SMART Act will impact you or your loved one, we encourage you to seek specific legal advice.  To speak with one of the attorneys at our office regarding the SMART Act, or other elder law and/or estate planning issues, please call the Elder Law Center at 630-844-0065 or contact us via email. The Elder Law Center is located in Aurora, IL, Kane County, in the Chicago Western Suburbs.

Quite Simply: Estate Planning by Default

“My estate isn’t big enough for me to have to worry about estate planning;” “My children know my wishes;” “I will take care of it when I am a little older.”  The excuses for not preparing an estate plan are many.  The reality, however, is that when one decides, for whatever reason, that an estate plan is not necessary that person has, in fact, created an estate plan by default.

 In all likelihood, the state that you reside in has statutes in place that will determine what will happen to your assets, if you die without an estate plan in place.  For example, in Illinois, the law of descent and distribution states that the assets of persons who die without an estate plan, who have both a spouse and children that survive, will be divided as follows:  one-half to the surviving spouse and the other half to be divided in shares of equal value amongst the surviving children.  In addition to the laws of descent and distribution, many people own assets in ways that will result in the assets passing automatically at the time of death to another person, or in other words, assets that will pass by operation of law.  Some examples of assets that pass by operation of law are assets owned in joint tenancy with right of survivorship, assets that are payable on death (POD) to another person, and assets with designated beneficiaries.  This means if you decide, for whatever reason, not to make an estate plan, you have, in fact, decided to let the laws of your state determine what will happen to your assets at your death.  For many, the interplay between the laws of descent and distribution and the impact of assets passing by “operation of law,” will result in an estate plan that is contrary to, or different, than the plan that one would have put in place had he/she realized the impact of choosing not to create an estate plan. 

Quite simply, the bottom line is that choosing not to make an estate plan is choosing an estate plan by default.  It is choosing to let the laws of your state decide for you.  One way to avoid unintended consequences is to consult with an estate planning attorney in your state, who will be able to educate you as to the laws of your state, and to assist you with creating an estate plan that is consistent with your wishes. 

©Copyright 2012 by Constance Burnett Renzi.  All rights reserved.

To discuss estate planning and/or elder law issues with an attorney, please call the Elder Law Center at 630-844-0065 or contact us via email. The Elder Law Center is located in Aurora, IL, Kane County, in the Chicago Western Suburbs.

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Son Liable for Mom’s $93,000 Nursing Home Bill Under ‘Filial Responsibility’ Law

Some 29 states currently have laws making adult children responsible for their parents if their parents can’t afford to take care of themselves.  These “filial responsibility” laws have rarely been enforced, but six years ago when federal rules made it more difficult to qualify for Medicaid long-term care coverage, some elder law attorneys predicted that nursing homes would start using the laws as a way to get care paid for.

It looks like this is starting to happen.  This week, a Pennsylvania appeals court found a son liable for his mother’s $93,000 nursing home bill under the state’s filial responsibility law. Health Care & Retirement Corporation of America v. Pittas (Pa. Super. Ct., No. 536 EDA 2011, May 7, 2012).

Facts of the Case

John Pittas’ mother entered a nursing home for rehabilitation following a car crash. She later left the nursing home and moved to Greece, and a large portion of her bill at the nursing home went unpaid. Mr. Pittas’ mother applied to Medicaid to cover her care, but that application is still pending.

Meanwhile, the nursing home sued Mr. Pittas for nearly $93,000 under the state’s filial responsibility law, which requires a child to provide support for an indigent parent. The trial court ruled in favor of the nursing home, and Mr. Pittas appealed. Mr. Pittas argued in part that the court should have considered alternate forms of payment, such as Medicaid or going after his mother’s husband and her two other adult children.

The Pennsylvania Superior Court, an appeals court, agreed with the trial court that Mr. Pittas is liable for his mother’s nursing home debt.  The court held that the law does not require it to consider other sources of income or to wait until Mrs. Pittas’s Medicaid claim is resolved.  It also said that the nursing home had every right to choose which family members to pursue for the money owed.

First of a ‘Wave of Lawsuits’?

The Deficit Reduction Act of 2005 made it much more difficult for the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care. With enactment of the law, advocates for the elderly said that nursing homes would likely be flooded with residents who need care but have no way to pay for it, and that in states that have filial responsibility laws, the nursing homes might seek reimbursement from the residents’ children.

After Pennsylvania re-enacted its filial support law in the mid-2000s, Williamsport ElderLawAnswers member attorney Jeffrey A. Marshall forecast that the new Medicaid law would trigger a wave of lawsuits involving adult children.

“Litigation between nursing homes and children is likely to flourish,” Marshall wrote in the January 20, 2006, issue of his firm’s Elder Care Law Alert.  (To read Marshall’s recent blog post on the Pittas ruling, click here.)

In 2005, the National Center for Policy Analysis, a conservative policy group, released an issue brief proposing that states begin enforcing filial responsibility laws in order to reduce long-term care costs.

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For the full text of the Pennsylvania court’s decision in the Pittas case, go to: http://www.pacourts.us/OpPosting/Superior/out/A36025_11.pdf

For more on filial responsibility laws. click here.

For more on the changes to Medicaid’s transfer laws, click here.

To discuss elder law issues with an attorney, please call the Elder Law Center at 630-844-0065 or contact us via email. The Elder Law Center is located in Aurora, IL, Kane County, in the Chicago Western Suburbs.