Beware of the Binding Arbitration Agreement in the Nursing Home Admission Packet
February 18, 2014
Imagine that you’re being admitted into a nursing home. You are having trouble making decisions and managing your affairs at this point. Luckily, you planned ahead and have a Health Care Proxy in place. Your agent fills out the reams of paper that seem necessary for your admission, including a binding Agreement to Arbitrate. That means that if you ever have a dispute with the nursing home, you are agreeing in advance to use binding arbitration, and not a jury trial, to settle that dispute. Your agent signs it, figuring you can’t be admitted without it. All is well until a dispute arises and – boom – you’re stuck heading to arbitration.
While it may sound attractive, arbitration tends to favor the “big guys” – in this case, the nursing home and health care providers. For you as the patient, or “little guy,” jury trials are far more consumer-friendly.
Good news, though – in January, the Massachusetts Supreme Judicial Court (our highest court) decided the Johnson case, which says that the decision to sign an arbitration agreement isn’t a health care decision. And because the agent named in your Health Care Proxy can only make health care decisions on your behalf, if he or she signs an arbitration agreement, a court will find that agreement void.
But what if you have both a Health Care Proxy and Power of Attorney in place? This difference is key because the agent named in your Power of Attorney CAN agree to binding arbitration on your behalf. A Power of Attorney gives more business-related decision-making powers than a Health Care Proxy, so the agent named in your Power of Attorney can make financial and legal decisions on your behalf. Agreeing to arbitration is not a medical decision but it is a legal one, so it’s one the agent named in your Power of Attorney CAN make.
As I mentioned, arbitration tends to favor the nursing home if a dispute arises. But how can you protect yourself? First, most nursing homes do NOT condition admittance on whether or not you (or your agent) agree in advance to arbitration. Simply refuse to sign the arbitration agreement within the admission packet, or if it is part of a larger document, cross out those paragraphs.
Also, your Power of Attorney document should make it clear that your agent cannot agree to binding arbitration before a dispute arises. When a dispute happens, arbitration may be your best option – but you don’t want to make that decision before you know the facts.
And if you don’t have a Health Care Proxy or Power of Attorney yet? Put them in place now. It won’t take much time at all.
Heard at the Office: “I Don’t Need a Power of Attorney, My Spouse Can Manage My Finances for Me.”
February 6, 2014
That would be the simplest approach, but unfortunately, this is not the case. For any accounts that are joint with your spouse (usually bank accounts, like savings, checking, and CD’s), then yes, even if you are in the hospital or develop dementia, your spouse can manage those accounts.
But what about accounts that are in your name alone? Like your IRA and 401(k), for starters? And that Christmas account that you opened a few years ago, the one your spouse doesn’t even know about? If you are the only owner of an account, then you are the only one who can access those funds. Your spouse cannot help you with your accounts – unless you name him as an Agent under your Durable Power of Attorney (POA).
Only after you (1) name your spouse as an Agent in your Durable Power of Attorney and (2) contact your bank or financial institution to have him listed as a POA on the account, can your spouse then help you manage your accounts in the event you become hospitalized or otherwise unable to manage your finances.
If you develop dementia and have accounts in your name alone, and if your family needs to access those accounts for your care, then your family will be forced to go to court to establish a “Conservatorship” over you. That costs a lot of money (your money, by the way), and takes a lot of time and emotional energy.
Moral of the story? Put a Power of Attorney in place now. It doesn’t take much time at all.
Questions Answered on Reverse Mortgages
August 26, 2013
The National Council on Aging, a leading nonprofit, has a good page on their website with important questions about reverse mortgages. These questions include “What’s the difference between a reverse mortgage and a regular home equity loan?” and “Aren’t reverse mortgages just scams that give money to big banks?” (no).
They also have written the official reverse mortgage guide for the US Department of Housing & Urban Development, called “Use Your Home to Stay at Home.”
Check out both if you are thinking about a reverse mortgage.
Shred Day in Stoughton Saturday 6/15 @ South Shore Bank
June 12, 2013
I Want to Give My Children More Than $13,000 Per Year but Then Something-or-Other Happens with My Taxes.
November 14, 2012
Yes and no. As with many areas where money and law intersect, it all depends on your goal. Let’s clear up a few things.
1. What is the $13,000 rule anyway? You can give up to $13,000 per person, anyone, not just your family, per year, without paying any gift taxes and without this affecting your estate taxes when you die. In other words, you can give up to $13,000 per person with no gift tax or estate tax implications. You can also give away more than $13,000, but just be sure to talk to your CPA about whether that would be a good idea for you. P.S. That figure is set to rise to $14,000 in 2013.
2. But are you really in a position to give money away? It costs a lot of money to get old in this country. As you age, if you want to stay at home or maybe move to assisted living but stay out of a nursing home, then you will need to use your own savings for your care. I can help you explore veterans’ benefits and MassHealth benefits for non-nursing home care, but even with these you will need to rely on your own savings. I am not a big fan of parents gifting money to kids. Keep your money. You will need it to stay out of a nursing home.
3. Doesn’t Medicaid let me give $13,000 to each of my kids and then get nursing home care? No. The $13,000 gift rule and the Medicaid nursing home rules have absolutely nothing to do with each other and were written for entirely different populations. If you gift money to your family and then within the next five years ask Medicaid (MassHealth) to pay your nursing home bill, they won’t. Even if you have a history of giving money to your children, as you age you need to reconsider this. Perhaps this is the year to tell your kids that the gifts will stop coming. If you feel a bit guilty about this, keep in mind that by keeping your savings intact, then down the road you will be in a position to hire help, making things a little bit easier for your kids.
Take Care of that IRA Rollover – Quick!
February 28, 2012
Financial institutions mess up the details all the time (no, I’m not talking about when they invest in derivatives, destroy the company, ask the rest of us to bail them out, and then pay their CEOs record salaries). I’m talking about the simple stuff. When you decide to move your retirement funds to a new institution, you have sixty days to “roll over” the money to a new IRA.
Start the rollover process right away! The IRS gives you sixty days, regardless of any blunders by the financial institution. By starting the process immediately, you give yourself some wiggle room to fix any problems and complete the rollover before the sixty days are up.