Friday, April 10, 2015

Cleveland Attorney Accused of Stealing $115,000 from Estate


An 84-year-old Cleveland attorney is accused of stealing $115,000 from the estate of a client, and using the money to pay his bills.

Gerald Cooper is charged in federal court with wire fraud for stealing from the estate of Henry Luke. He used the money to pay credit card bills, sports tickets and mortgage payments, among others, prosecutors allege.

The charges were filed Tuesday in an information, which usually means a guilty plea is forthcoming.

Cooper, a Pepper Pike resident, was admitted to practice law in Ohio in 1957. The Supreme Court of Ohio's website lists him as retired.Gordon Friedman, Cooper's attorney, told a local paper that his client is working toward paying all of the money back.

"He has had an outstanding and remarkable career as a lawyer," Friedman said. "It is unfortunate that this final moment of his practice is kind of a dark mark on his reputation." According to the information:  Cooper filed an application to administer Luke's estate in Cuyahoga County Probate Court. Between February and March 2014, he received $138,397 from three of Luke's bank accounts.

Cooper then took $115,000 from the estate between February to October 2014 by writing a series of checks. The money then went into his personal account.
You can read the entire article here.



Wednesday, April 1, 2015

Nursing Home Resident Not Entitled to Hearing on Readmission After Hospitalization

Nursing homes have almost unlimited authority to refuse to readmit a resident following a hospitalization.  This was demonstrated  recently in an Illinois appeals court case which ruled that a nursing home resident who entered a hospital while waiting for a hearing on an involuntary discharge, was not entitled to a hearing when the nursing home refused to readmit him. Gruby v. Department of Public Health (Ill. Ct. App., 2nd Dist, No. 14-MR-0354, March 26, 2015).

Marvin Gruby was a resident of Manorcare Highland Park nursing home. The nursing home issued him a discharge notice, claiming that Mr. Gruby threatened the safety of individuals in the nursing home. Mr. Gruby requested a hearing as was his right under state law. Before the hearing could take place, however, Mr. Gruby entered the hospital for a scheduled procedure. The nursing home notified Mr. Gruby that he would not be able to return to the facility after his hospitalization and it withdrew the notice of discharge.

Mr. Gruby argued that he was entitled to a hearing on the discharge. The administrative law judge determined that a hearing was no longer necessary and closed the case. Mr. Gruby appealed to court. The court ruled that the controversy became moot when the nursing home withdrew the notice of discharge. Mr. Gruby appealed, arguing that he was still a resident of the nursing home while he was in the hospital. Under federal regulations, if a nursing home resident enters a hospital for 10 days or less, the nursing home may not refuse to readmit the resident on the basis of his or her Medicaid status.

The Illinois Court of Appeals affirmed the administrative law judge's decision, holding that under federal nursing home law, Mr. Gruby is not entitled to a hearing for being denied readmission to the nursing home. According to the court, Mr. Gruby did not remain a resident of the nursing home once he was admitted to the hospital because the 10-day bed hold requirement applies only to the Medicaid provisions. The court rules that when the nursing home withdrew its notice of discharge, there was no longer a need for a hearing. The nursing home, in effect, is permitted to circumvent the resident's rights by simply refusing readmission of the the resident, so long as the refusal is not because of the resident's Medicaid status.  

For the full text of this decision, click here. 

Monday, March 30, 2015

Life Estate Renders Medicaid Applicant Ineligible

Life estates are frequently used by seniors to gift real property to family members because the seniors are assured that the retained life estate secures their use and enjoyment of the property for the remainder of  their life.  These estates, however, present complicated tax and legal issues rarely considered and resolved prior to the gift.  

Life estates often complicate Medicaid eligibility.  See, for example, my prior article, "Entire Value of Property in Which Medicaid Recipient Had Life Estate is Recoverable in Idaho."    In a more recent example, North Dakota's highest court ruled that a Medicaid applicant who had a life estate in property is entitled to the income generated from that property, even though she argued she permanently gifted the income to her son. Bleick v. North Dakota Dept. of Human Services (N.D., No. 20140103, March 24, 2015).

Shirley Bleick transferred property to her son in 1988, reserving a life estate for herself, and then she moved off the property.  In 1992, her son leased a portion of the property to another farmer for $8,200 a year. The rental income went to Ms. Bleick's son. In 2011, Ms. Bleick applied for Medicaid benefits, but the application was denied. The state determined that Ms. Bleick should be receiving a portion of the rental income, so her countable assets exceeded the maximum limit.

Ms. Bleick appealed the state's decision, arguing she gifted the right to the income to her son. The trial court affirmed the state's decision to deny Medicaid benefits, and Ms. Bleick appealed.

The North Dakota Supreme Court affirmed, holding that the income stream from the life estate exceeds the asset limits for Medicaid benefits. According to the court, if Ms. Bleick intended to gift all the income from the property to her son, she could have released the life estate and transferred title to the property. The court ruled that the rental income, if it is viewed as a gift, is an annual gift. One justice dissented, arguing that all the evidence indicates that Ms. Bleick intended to permanently gift the income to her son.

The lesson could not be more clear: consult with an elder law attorney before making gifts in order assure that the consequences of the transaction are fully understood and considered. For more information, see "Six Questions to Ask Before Making Gifts."    

For the full text of this decision, go to: 

Friday, March 27, 2015

NAELA Says the VA Could Be Sued If Proposed Transfer Regs Are Enacted

In its response to the Department of Veterans Affairs’ proposed regulations that would establish a look-back period and asset transfer penalties for pension claimants, the National Academy of Elder Law Attorneys’ (NAELA) raises the prospect that the VA could be sued if the rules take effect.  

As previously reported, proposed Section § 3.276 would establish a 36-month look-back period and a penalty period of up to 10 years for those who dispose of assets to qualify for a VA pension. Currently, there is no prohibition on transferring assets prior to applying for needs-based benefits, such as Aid and Attendance. 

“[W]e express the serious concern that the proposed rule’s 3-year look-back period and transfer of assets penalty exceed statutory authority, opening up VA to future litigation and causing additional uncertainty for Veterans and their families,” write Bradley J. Frigon, NAELA’s president, and Victoria Collier, Chair of NAELA’s VA Task Force, in March 17, 2015, comments on the proposed rules.

Frigon and Collier argue that the proposed rules do not meet the standard of either an explicit or implicit delegation by congressional statute that the U.S. Supreme Court set forth in Chevron USA, Inc. v. NRDC, Inc., 467 U.S. 837 (1984).  They point out that Congress had the opportunity from 2012 to 2014 to create Medicaid-like transfer rules but that each proposal died in session.

NAELA’s comments also maintain that the proposed transfer penalties exception is too narrow.  “Veterans and their surviving spouses will be unjustly penalized for prior transfers that had absolutely nothing to do with VA pension eligibility," Frigon and Collier write. “Gifts to children at holidays and birthdays will be penalized. Donations to places of worship will be penalized. Contributions to charities will be penalized. All because there is a presumption that the transfer was made for the purpose of qualifying for VA pension. . . . The final rule should require that transfers only made for the sole purpose of qualifying for VA pension be penalized.”

The 27-page comments highlight a number of other flaws in the proposed regulation, including that it should allow for partial cures, that the time allowed to cure transfers should be expanded, that the rule disproportionately harms surviving spouses of veterans, and that the proposed net worth limits are harsher than Medicaid’s limits.

Thursday, March 26, 2015

Alimony Obligation May Require Involuntary VA Admission


Victor Rizzolo and Barbara Jones divorced when Mr. Rizzolo was 84 years old. The court ordered Mr. Rizzolo to pay Ms. Jones alimony. Five years later, Mr. Rizzolo's health began to fail, so he moved in with son, who hired a caregiver for him.

Mr. Rizzolo asked the court to end the alimony payments, arguing that his income -- which was limited to VA disability payments and Social Security -- was needed to pay the caregiver. The trial court ruled against Mr. Rizzolo, finding that he had not done all that he could to meet his alimony obligations; if he entered a VA facility, the court found that he would be able to receive care and pay the alimony.  Because the court did not end the alimony obligation, Mr. Rizzolo appealed.  Perhaps he wishes he had not appealed, because, although the appeals court ruled in his favor, the court remanded the case describing an ominous potential outcome- his involuntary institutionalization in order to preserve his income for payment of alimony. 

The New Jersery Superior Court, Appellate Division, reversed, holding that the trial court did not hear evidence about whether entering a VA facility was really appropriate. According to the court, "although the [trial] court may on remand conclude that it is equitable to require [Mr. Rizzolo] to enter a VA facility against his wishes in order to use his limited income to continue to pay alimony, allowing [Ms. Jones] to preserve her assets until [Mr. Rizzolo's] death makes alimony no longer available, it may only do so upon consideration of competent evidence and a qualitative analysis of both parties' circumstances."

The court ruled that the trial court must first consider all the evidence before it can order an 89-year-old veteran in failing health to enter a Veteran's Administration (VA) facility against his will in order to ensure he had enough assets to pay alimony. Sometimes one can only exclaim, "wow!"  See, Rizzolo v. Jones (N.J. Super. Ct., App. Div., No. A-1800-13T2, March 2, 2015).  

Hopefully, his son will seek to introduce evidence regarding the relative quality of care available at home versus that available in an institution, and the court will consider carefully his quality of life concerns vis-a-vis his financial obligations. See, for example my articles, "One-Third of Nursing Home Residents Harmed In Treatment," Hapatitis Infection Risk in Nursing Homes Up 50%; Infection Risk Across the Board Increases, and "Most Terminal Dementia Patients in Nursing Homes Given Pointless and Potentially Dangerous Drugs"

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