OHIO ELDER LAW BLAWG

Annuities and Medicaid: Recent Decision Renews Old Technique

Back in the 1990's when a married client would come it to see me about medicaid when their spouse was in the nursing home, one of the first techniques we would look at is whether we could convert a portion of the couple's assets to an income stream for the spouse living at home by using an annuity.

This technique would immediately create Medicaid eligibility, and would often be something that would create a much greater income for the community spouse.

The technique was sometimes not appropriate when the community spouse had little income, or in some other circumstances, but in the right situation it was a very successful planning technique.

The State of Ohio developed regulations that quashed this technique, but after the deficit reduction act of 2005, the annuity laws were changed on the federal level, and Ohio went back to the drawing board to try to come into compliance with the federal law, and still prevent people from buying annuities to qualify for Medicaid.

Ohio tried in regulation to prevent the transfer of assets from one spouse to the other in order to purchase an annuity by calling it an improper transfer of resources and by indicating any such purchase of an annuity would be invalid if not permitted by a hearing decision.

The Court of Appeals in Ohio (10th district, which is in Franklin County, Ohio) held in a recent case that the transfer of funds to the community spouse to purchase an annuity is not an improper transfer, and that the regulation requiring a hearing decision does not apply.  This may re-open an avenue of Medicaid Planning that had been closed or limited for several years.

The purchase of an annuity to qualify for Medicaid is still an area fraught with risks if not properly done.  If you are thinking about trying to qualify for Medicaid by use of an annuity, please contact our office so we can guide you through the process.

Ordinary Expenses ruled Exceptional, Meaning More Money for the Community Spouse

A New York court of appeals has ruled that a spouse in the community is entitled to an increased minimum monthly maintenance needs allowance (MMMNA) because her ordinary monthly expenses were about double her income and she therefore her situation qualified as "exceptional circumstances" necessitating access to more of her husband's income in a case entitled the Matter of Balzarini v. Suffolk County Dept. of Social Servs. (N.Y. App. Div., 2008 Slip Op 06704, Sept. 2, 2008). This is a New York decision, not an Ohio decision, but this office will certainly be using the decision to argue for greater funds for community spouses in appropriate future Ohio cases.

Mr. John Balzarini was admitted ta a nursing home in March 2005, and applied for Medicaid shortly thereafter. As part of his application, Mr. Balzarini requested that his wife receive an increased MMMNA because her expenses were greater than her income. The Suffolk County Department of Social Services (DSS) approved his application but did not increase the MMMNA, determining that Mrs. Balzarini's expenses were "ordinary" and not "exceptional circumstances" entitling her to an increased MMMNA. Mr. Balzarini appealed.

On appeal, Medicaid did not argue that Mrs. Balzarini's expenses of $4,814 were inaccurate. Instead, DSS argued that ordinary household expenses, while legitimate, do not give rise to the exceptional circumstances which would necessitate an increase in the MMMNA as indicated in the rules. Mr. Balzarini argued on the other hand that the express purpose of the Medicaid law’s protections contained in the Medicare Catastrophic Coverage Act were to prevent a community spouse's expenses from impoverishing them when their spouse is institutionalized.

The Supreme Court of New York, Appellate Division, agreed with Mrs. Balzarini and her husband and overturned the DSS's decision.  The court found that "reasonable, ordinary expenses can be a sufficient basis upon which additional income of the institutionalized spouse may be made available to the community spouse, and that in the circumstances presented here, the DOH should have granted the petitioner's request in part." Furthermore, the court stated that "the statute and regulations did not intend that where housing costs exhaust the minimum monthly maintenance needs allowance, the community spouse should not be entitled to some funds with which to pay for food and other necessities of life."

Ohio Supreme Court to Decide Medicaid Question

The Ohio Supreme Court has certified the following question for deliberation:

Whether the Medicaid Eligibility Rules are those in effect at the time of creation of an inter vivos trust or those in effect at the time of Medicaid eligibility review?

The issue was certified for review in Pack v. Osborne and will answer a question of great importance to those who have set up revocable trusts for disabled children prior to law changes which essentially gutted special needs trusts in Ohio.  The case may have other ramifications for the use of trusts.  If you have questions, please contact Todd Bartimole.

___________________

Announcement in full:

2006-1343. Pack v. Osborn.
Licking App. No. 05 CA 83, 2006-Ohio-2253. On review of order certifying a conflict. The court determines that a conflict exists. The parties are to brief the issue stated at page 3 of the court of appeals’ Judgment Entry filed June 16, 2006:

“Whether the Medicaid eligibility rules are those in effect at the time of the creation of an inter vivos trust or those in effect on the date of eligibility review?”

Moyer, C.J., dissents.
The conflict cases are Metz v. Ohio Dept. of Job & Family Servs. (2001), 145 Ohio App.3d 304, Martin v. Ohio Dept. of Job & Family Servs. (1998), 130 Ohio App.3d 512, Prior v. Ohio Dept. of Job & Family Servs. (1997), 123 Ohio App.3d 381, and Miller v. Ohio Dept. of Job & Family Servs. (1995), 105 Ohio App.3d 539.

Sua sponte, cause consolidated with 2006-1207, Pack v. Osborn, Licking App. No. 05 CA 83, 2006-Ohio-2253.

Update on Granparent visitation rights from Toledo Blade

Article published Tuesday, June 21, 2005

Grandparents in the middle

IN A perfect world it would be unthinkable for grandparents to have to file a lawsuit just to visit their grandchildren. But family matters are never perfect, especially when divorce or heated custody disputes are added to the sometimes volatile mix, and the result is often broken hearts for grandmas and grandpas.

Complicating family harmony in Ohio are custody laws which are not clear on grandparent visitation rights over parental objections. Hopefully, the Ohio Supreme Court will clarify once and for all the law regarding competing adult demands and what constitutes a child's best interest.

Many states like Ohio have been grappling with where the law should come down in cases where custodial parents and grandparents clash over conditions of visitation. Courts are often the last resort when extended family is banned from contact with young children after dramatic events like divorce, death, and remarriage.

The U.S. Supreme Court narrowed the visitation rights of grandparents in a 2000 Washington state decision but other states still struggle with whether their laws can permit contact with grandchildren even when a parent objects. In Ohio two appellate courts had two different takes on the issue.

In 2002, the 7th District Court of Appeals in Youngstown ruled against grandparents seeking visitation rights with their grandson after his father died.

Last October in Akron, the 9th Ohio District Court of Appeals went the other way, overruling a lower court decision that supported a father's decision to keep his 7-year-old daughter away from her maternal grandparents.

It is Brian Collier's appeal of that ruling which the Ohio Supreme Court will consider in weighing the opposing wishes of parents and grandparents. The grandparents in the Collier case, Gary and Carol Harrold of Wooster, raised their granddaughter until she was 5 years old after her mother, Renee, died of cancer.

The mother and father never married. Mr. Collier's attorney argues his client's position is in keeping with the Supreme Court decision that parents, not judges or grandparents, should decide with whom children spend time. The father claims it is in the best interest of his daughter not to see her grandparents "because of the hostility they have toward me."

The grandparents' attorney counters that "the parent's wishes may not always be in the best interest of the child …"

The complexity of family relations in custody fights almost requires Solomon-like wisdom to determine what will ultimately benefit a child's welfare. In many, maybe most cases, grandparents enrich the lives of their grandchildren and divorce or death shouldn't change that unique relationship.

But in other cases, the best interest of a child is less straightforward, says veteran Lucas County Domestic Relations Court Judge David Lewandowski. Sometimes grandparents take sides in legal proceedings and try to turn the youngsters against a mother or father.

Different state supreme courts have adopted varying stances on grandparents' visitation. Ohio needs to settle on one and end the confusion.

Shiavo Autopsy: No treatment would have improved her condition

The results of an extensive autopsy of Terri Schiavo showed that Terri Schiavo's brain not only had withered to half its normal since 1990 when she collapsed, but that no treatment could have remotely improved her condition, as her parents and many federal legislators and right to life advocates had alleged.

Allegations made by Terri Schiavo's family that she was abused by her husband were also disproved.  One of the findings I thought was interesting was that Ms. Schiavo was blind, which essentially rebutted her parent's arguments that Ms. Schiavo responded to their movements and tracked movement with her eyes.  The parents' attorney stated on their behalf that they still believed Terri had responded to their movement and doubted that their daughter was blind.

Ms. Schiavo died of dehydration, not starvation, according to the autopsy.

Ms. Schiavo's condition was the subject of intense debate earlier this year, mostly regarding the question of removal and withdrawal of life sustaining treatment, including food and hydration, when a person has not left written instructions as to what they want to happen if they find themselves in a persistent vegetative state.

President Bush made a middle of the night flight to sign legislation allowing Federal court review of the Florida courts' decisions to allow the removal of Schiavo's feeding tube.  Republicans decided to act contary to their usual support of state's rights over federal powers by interveining. 

The New York Times reported Representative Barney Frank, Democrat of Massachusetts, who was among the most vocal critics of the Schiavo bill, stated "I think it will be seen at some point as a turning point in America about what's going on with the Republican Party - namely that you have this fanatical party willing to impose its own views on people, and frankly, powerful enough to do it. This is particularly a problem for Dr. Frist. This is a direct refutation of his TV diagnosis."

Frist, the Republican Majority Leader in the Senate essentially used his credentials as a physician to state that the diagnosis of permanent unconcious state was questionable.   During the floor debates, Frist stated "[t]o be able to make a diagnosis of persistent vegetative state - which is not brain dead; it is not coma; it is a specific diagnosis and typically takes multiple examinations over a period of time because you are looking for responsiveness - I have looked at the video footage," Dr. Frist said. "Based on the footage provided to me, which was part of the facts of the case, she does respond."

Tom Delay, who is not a doctor, but plays one on the floor of Congress, stated on March 20 that "Terri Schiavo is not brain dead; she talks and she laughs, and she expresses happiness and discomfort."

Despite being given the power to review the Florida courts by the federal legislation,  Federal courts consistently upheld the Florida courts' decisions.

Ohio's laws relating to living wills and health care powers of attorney are more specific than Florida's apparently are, allowing a court hearing after a person has been in a permanent unconscious state for one year to remove life sustaining treatment.

If you do not have a living will or health care power of attorney, please see an attorney to have one drafted.  They are simple documents which will reflect your wishes under Ohio law.  Ohio does not allow removal of food and hydration except in circumstances wherein a person is in a terminal condition or a permanent unconscious state.

Article Links:

New York Times 

Parent reactions

Graphical Autopsy Results

Schiavo Timeline

Republicans Scramble, Rethink Involvement

Autopsy Report

Ohio Supreme Court to decide grandparents' visitation rights

By JEREMY LEMER
BLADE STAFF WRITER

Delphine Fuller was pleased to learn yesterday that the Ohio Supreme Court has agreed to clarify the law regarding grandparents' visitation rights in custody disputes by reviewing an appeal case on the issue.

As founder of the Toledo Grandparents Rights Support Group and a grandmother six times over, she has fought for nearly a decade to allow grandparents access to their grandchildren.

But Mrs. Fuller, whose organization offers education and counseling to grandparents involved in custody battles, emphasized that she is not ready to celebrate quite yet."We have had so much hope for the last 10 years but so far absolutely nothing has changed," she said.

The state's highest court yesterday began to hear arguments in Brian Collier's appeal of a lower court's decision requiring him to grant visitation rights to the maternal grandparents of his 7-year old daughter. Mr. Collier and his daughter's grandparents have been disputing custody and visitation rights since the death of his girlfriend in 1999.

Carol and Gary Horrid of Wooster, Ohio, were granted visitation rights by the Ohio 9th District Court of Appeals, overturning a lower court's ruling in favor of Mr. Collier, who was never married to the Harrolds' daughter, Renee.

Currently Ohio custody law allows grandparents and other relatives to petition the courts for "reasonable" visitation rights over the objections of parents. But a 2000 U.S. Supreme Court decision brought the law into question by striking down a similar statute in Washington state.

That confusion reflects the difficulty in determining where the law should come down when parents and grandparents are at odds over access to children after divorces, deaths, adoption cases, and remarriages. All parties concur that the best interests of the child should be the litmus test of a custody decision, but legislators and judges disagree over whether parental decisions always reflect those best interests.

"These are terribly complex issues," said Judge Norman Lewandowski, a veteran of 12 years with the Lucas County Domestic Relations Court, who sees one or more cases involving grandparents visitation rights every year.

"If you sat people down and asked them if children should be allowed to see their grandparents, most people would say, `Yes, of course,' " Judge Lewandowski said. But when grandparents takes sides in emotional divorce proceedings and turn children against parents, he said, the question is less straightforward.

The Ohio Supreme Court's decision to take the case occurs at a time when visitation disputes are increasing across the board. Between 2003 and 2004 the number of visitation disputes heard by juvenile courts statewide increased by 10 percent, according to the Ohio Supreme Courts annual summary.

Whatever the court decides, Judge Lewandowski is hoping that for the sakes of parents, grandparents, and judges, the law will become less murky. "Vagueness encourages people to prolong litigation," he said.

--As reported in the Toledo Blade