Summary: For people who are planning for long-term care and where the preservation of assets fits into that planning, the firm’s lead form of representation is Family Asset Protection Planning (FAPP). Introducing Rose and Joe Baker as clients who may seem familiar to you, this article is a brief explanation of the firm’s services in FAPP.

Rose Baker had been married to her husband, Joe, for 59 years when she first came to me. They had lived their lives together in Massachusetts and had retired to South Florida in 1992. When I came out of my office to greet Mrs. Baker, her eyes were puffy, red and she was clutching a wrinkled tissue in one hand.

Bottom line: Joe is ill and in the nursing home and she, Rose, is depressed, feeling guilty, scared and lonely. On top of it all, she tells me, she is worried about being poor.

She expresses guilt and remorse for even talking about money because, she tells me, she should be at the nursing home taking care of what is really important — her husband, Joe. She is crying again but trying not to. She is embarrassed. I am leaning in from my desk, trying to convey assurance so I can make her feel better. Making her feel better is all I really want to do.

Rose is so obviously overwhelmed with all that is going on in her life. Her troubles shoot out like the staccato of a machine gun. She is talking at once about the doctor at the nursing home, Joe’s most recent hospitalization, her daughter who is disabled by reason of multiple sclerosis, her son who cannot do enough but lives “back home” in Massachusetts, the electric bill being higher this month because it is so hot, her three CDs which total $90,000.00, the stock which used to be worth $950,000.00 but is now worth $650,000.00. She mentions the home and her fear of losing the home. She is talking about how Joe used to be an important teacher and how good he was to her and the kids. She is crying off and on. Mrs. Baker reminds me of my grandmother. I feel bad for her but I am used to this.

I take control of the meeting by asking her some questions and filling out my intake form. I do this myself instead of having a staff member do it because I use these innocuous questions to make small talk with my clients. It helps them because they are often nervous and scared, just like Mrs. Baker. I talk with Mrs. Baker and calm her down a little bit. I write down some notes of my impressions and the answers to the questions on my form. I try to write down her own words whenever possible.

Mrs. Baker has two children; a daughter named Hillary and a son name Stephen. Hillary is a “good girl,” suffers from multiple sclerosis, and does not “deal well with sad things.” Hillary calls once each week but Mrs. Baker does not want to “burden her.” Mrs. Baker last saw Hillary eight months ago. It is hard for Hillary to travel because of her MS. Stephen is a teacher, having followed in Dad’s footsteps. Stephen is a big help to Mrs. Baker. He was just down for ten days and will be returning next month. Because there is no school in summer, Stephen has some flexibility for the time being.

Mrs. Baker is scared about the money. She just paid the nursing home $5,700.00 for last month alone. “We never spent money like this,” she says. She tells how she and her husband saved and saved their money; how they never had two cars, how Joe “taught me how to put money away for later.” She tells me how Joe does not even recognize her sometimes and she starts crying a lot now.

Even though I know I can help Mrs. Baker, I feel frustrated that I cannot do more. I want her to stop crying. I want her to be happy. I want her to feel secure again. I strong-arm my emotions aside and stay with my lawyerly, authoritative and assuring pose. I want her to know that I can help her so she will feel some relief.

I say, “Mrs. Baker, when you leave here today, I want you to leave with a weight taken off of your shoulders. I cannot fix all of the problems, but I can make the money problems less of an issue.” She exhales some years of worry and her shoulders visibly relax.

“How?” She is wobbling her head and looks incredulous. Then she adds, “The money is not important though.” Even in her excitement to maybe have found some help, she feels guilty that we are talking about “money” when her husband is suffering so much.

“Mrs. Baker,” I continue, “Money buys care. I cannot make your husband all better. Noone can. But what we can do is maximize the use of your savings so that he — and you — can get better care. We do this through a process of protecting your savings while accessing any and all benefits that will help you and your husband.”

Some people do not understand what I do as an Elder Law Attorney. Some people think that Medicaid planning means taking rich people and making their money “disappear,” putting them on the public dole. This is not true. Only a small portion of what I do as an Elder Law Attorney is about “Medicaid” and when it is, it is about people like Mrs. Baker.

Mrs. Baker is a composite of my average “Medicaid” client — middle-class to upper middle-class people who saved and saved and saved for retirement only to be beaned by a long-term care system that has spiraled out of control.

What the government wants is for Mrs. Baker to “spend down” the family savings and then, when there is little or nothing left, Medicaid will help pay for the nursing home. The problem, of course, is that Mrs. Baker then has little or nothing left to pay for those things that Medicaid will not cover. All of their efforts in saving for a lifetime mean nothing. They get no benefit from having saved. Indeed, in the room right next to Mr. Baker, a lady who never saved a penny is receiving the same care on Medicaid. The system is broken.

Our health care system in America chooses which diseases will be covered by the government and which will not be covered. Senior citizens diagnosed with cancer, for example, will receive all necessary health care through our Medicare program. If you have cancer, heart disease or other such illnesses, you are covered. If you are unlucky enough to get Alzheimer’s Disease or any other form of dementia, you are out of luck. This is because our American health care system, unlike that of other advanced nations, does not cover these diseases which predominantly affect the elderly. This selective health care system is not just.

What is more is that the care Mr. Baker receives is, in my opinion, substandard, even at the “good” facilities. To remain profitable, nursing homes pay low wages and therefore attract only those people who are willing to do hard and intensely personal work for very little money. The turn-over rate for staffing at many nursing homes is very high. Even the better-paid administrators are well known to shift from company to company. The government is not helping enough. The Medicaid reimbursement rate is too low. Nursing homes are regularly filing for bankruptcy protection. Cost-cutting measures mean a greater likelihood of abuse and injuries of nearly-helpless nursing home residents. The structure of government programs still force people into nursing homes rather than paying for assisted living or home care; a costly mistake for our government and for our society.

For all of these reasons and more, I know that maximizing the client’s own resources and getting educated is critical.

Through proper planning, I know I can show Mrs. Baker how to protect all or most of the family savings. I can show Mrs. Baker how she can qualify Mr. Baker for Medicaid while still getting the benefit of their savings. By using their own dollars and the government’s dollars, Mr. Baker (and Mrs. Baker) will be able to afford more and better care. This can make all the difference.

The New York Court of Appeals (that state’s highest court) put it well when it held that “[n]o agency of the government has any right to complain about the fact that middle class people confronted with desperate circumstances choose voluntarily to inflict poverty upon themselves when it is the government itself which has established the rule that poverty is a prerequisite to the receipt of government assistance in the defraying of the costs of ruinously expensive, but absolutely essential, medical treatment.’”

Mrs. Baker is every client who has walked into my office full of grief, guilt and fear.

Fortunately, my firm can help Joe, Rose and the kids. Over ten years ago, we created a successful and comprensive method of addressing the very needs which Joe and Rose present. We also developed a very reasonable fee structure where a fixed fee is calculated based on a set formula. The client knows exactly what the costs are up front. There are no hourly rates and no surprises down the road. Family Asset Protection Planning (FAPP) covers six different modalities the firm uses to help its clients:

(1) Asset protection in a long-term care context. Part of asset protection means the implementation of planning strategies designed to achieve eligibility for certain need–based government programs including certain Medicaid and Veteran’s benefits as appropriate and available.

(2) Estate Planning through the use of wills, trusts and different techniques of holding title, as appropriate. The goal of estate planning is to ensure that a client’s dispository wishes are honored but in such a way as to be consistent with the client’s asset protection goals. Most every client already comes with an estate plan (often as a referral from the estate planning attorney) but these plans typically need to be modified to meet the new objectives.

(3) Incapacity Planning is primarily directed to plan for what should happen if and as incapacity begins to affect a client and to deal with current incapacity issues. Regular durable power of attorneys do not suffice. Incapacity planning includes end-of-life health care decision-making, specialized powers of attorney and sometimes trusts and other devices.

(4) Protection against Estate Recovery is designed to prevent unnecessary loss of assets to the government upon the death of a Medicaid recipient.

(5) Application for Benefits: The firm will handle the application for public benefits by completing application materials and actually meeting with the government and/or communicating with the government all the way through the eligibility determination. We show the government everything that we have done by opening the books and explaining the law to the government case workers.

(6) Guidance for Quality of Life: The firm is not a health care provider and we provide no medical advice. However, we have significant knowledge, experience and contacts within the elder care system. We leverage these benefits to the advantage of our clients through a structured process of providing non-clinical caregiving guidance.

Whether FAPP is right for you depends on many factors not covered in this article. The firm must pre-qualify prospective clients during an initial consultation.

The firm has an excellent track record of proven results and has earned a national reputation for our progress (”google ” us to check out what others have to say!). One of the reasons for this success is a collaborative approach to providing comprehensive solutions to aging and incapacity. We want to work closely with our clients’ financial advisors and other professionals. It is fair to say that there is a seat open at our conference table for your financial advisor, accountant or others who may be of assistance in the process.

For Joe and Rose, it is not too late. We can help achieve goals including Medicaid eligibility in weeks or months (no 5-year waiting periods necessary here). Had they planned ahead, they would have had more and better options. For our healthier clients, there is more we can do because we have planning strategies which can be implemented over time. We can use the time we are given to our client’s great advantage.

To learn more and to see if FAPP is right for you, set an initial consultation. The charge is $250 for that meeting. When you call the office, you will be told what to expect and you will then shortly receive more information in the mail in advance of your meeting.

If you need the help, I hope we can guide you through the process just as we would for Joe and Rose. With an excellent staff and three caring and experienced attorneys, we have put together quite a system and one that makes a tremendous difference in people’s lives. How fortunate I am to be in such a rewarding job!

GOOD NEWS – AT LAST

The Impact of Arkansas v. Ahlborn on the Treatment of Medicaid Third Party Liability Liens
Rodolfo Suarez, Jr., Esquire and Daniel A. Terner, Esquire

May 8, 2006
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The unanimous decision of the Supreme Court of the United States, in Arkansas Dept. of Health and Human Services, et. al. v. Heidi Ahlborn, handed down on May 1st, 2006, will have a drastic impact on how personal injury attorneys handle Medicaid liens in their cases. Before this decision, a big concern for attorneys and their clients in whether or not to settle a personal injury case was the impact of the Medicaid liens. Generally speaking, in Florida, Medicaid has two types of liens which may affect a claim or lawsuit. The first is the Medicaid Third Party Liability Lien (TPL) and the second is the Medicaid Estate Recovery Unit Lien (ERU). The Supreme Court case, and therefore this discussion, only focuses on the TPL lien.

The Medicaid TPL lien is a lien asserted by the State against any recovery made in a claim where Medicaid paid any medical bills for care and treatment of injuries that were caused by the negligence of a third party, which gave rise to that claim. The typical third party liability lien arises when Medicaid claims they are entitled to reimbursement from the proceeds of a settlement or judgment, for any bills they paid relating to that claim. In the past, Medicaid has taken a very aggressive approach in recouping monies from settlements and/or judgments where they have paid medical bills on behalf of a Medicaid recipient, and that recipient later collected monies from the tortfeasor. In some instances, the monies recovered are far greater than the monies paid by Medicaid and therefore satisfaction of the Medicaid TPL lien is sometimes not an issue. In other cases, the monies recovered are far less than the monies paid by Medicaid. In these cases, Medicaid would apply an arcane “reduction formula” which will not be explained in detail here, but to oversimplify, it basically required a significant reduction in attorneys fees and allowable costs for the case and would then require payment of 50% of the balance in satisfaction of their TPL lien. It is in these types of cases which this new decision will have a dramatic impact.

Medicaid is required by the federal government to “ascertain the legal liability of third parties…to pay for [an individual benefits recipient’s] care and services available under the [State’s] plan; and to seek reimbursement for medical assistance to the extent of such legal liability,” As such, Medicaid took this as a directive to attempt to recuperate as much monies as it could from all aspects of a settlement or judgment, regardless of the amount of monies recovered and regardless of the allocation of the damages in the case. By way of example, under the old analysis, if Medicaid paid $50,000 in medical bills and a plaintiff recovered a total of $100,000 from the tortfeasor, Medicaid would seek recovery of their lien from the entire amount and the amount owed would be substantial. If not the full $50,000, it would be very close. Under the new case, however, there would be a dramatically different result, discussed further in this article. In your typical personal injury action, damages are sought against the at-fault party for, amongst other things, past medical expenses, loss of earnings, loss of earning capacity, future medical expenses as well as pain and suffering. In the past, Medicaid would attempt to, and was successful in recouping the monies they paid out for a Medicaid recipient from the entire amount of monies recovered. Ahlborn significantly changes this approach and has interpreted the federal anti-lien provisions as limiting Medicaid to asserting their lien only against the portion of the recovery that was related to payment of the past medical bills.

For instance, assuming in the example above, the personal injury case was resolved for $100,000 and the allocation of damages was $50,000 in pain and suffering damages, $25,000 in lost earning and lost earning capacity and $25,000 in past medical bills, Medicaid would only be allowed to assert their lien against the $25,000 in damages relating to the medical bills. In other words, where, in the past, they could collect close to their entire lien amount from the $100,000 settlement, under this scenario, they would be limited to asserting their $50,000 lien against only the $25,000 allocated for medical bills. Under this scenario, there are insufficient monies to pay for Medicaid’s lien. Clearly, if this is the case, on their very best day, Medicaid would only be entitled to recoup at most $25,000. In all likelihood, however, it would probably be significantly less once you reduce the amount collected by attorney’s fees and costs. (This example does not take into account the Medicaid reduction formula nor a reduction of the total amount owed for attorneys fees and costs. Likewise, at this point, Florida Medicaid has not yet determined how they will apply the reduction formula to arrive at a lien amount under these types of scenarios.) Needless to say, however, this will have a drastic impact on how much money is available to Medicaid in which to attach their TPL lien. Where they could previously attach their lien to the entire sum of monies collected, this case makes clear that the government is limited to only that portion of the monies collected relating to the medical bills.

What does this mean for the practicing personal injury attorney? Well, in cases where this issue exists, you will have to spend some time analyzing not only the hard damages (i.e. medical bills) but also the soft damages (i.e. pain and suffering). In working up the case, you want to try to obtain evidence as to these “soft” damages so that on the back end, when you are settling the case and dealing with the Medicaid TPL lien, you have support for your position. Once your case is ready to be resolved, the safest route would be to have a judicial determination of the allocation of damages in the case. You should provide Medicaid with “formal notice” of the hearing (by certified mail) and allow them an opportunity to object to the allocation of damages. This protects the practitioner and the client and affords Medicaid an opportunity to dispute the allocation of damages.

As a practical matter, the United States Supreme Court’s decision in Arkansas v. Ahlborn leaves more on the table for Plaintiffs, and this is good news indeed. For individuals with disabilities, in need of establishing a special needs plan to preserve their public benefit eligibility notwithstanding their receipt of settlement proceeds, the prospect of a smaller Medicaid lien (and, consequently, a greater net recovery) opens the door to the utilization of special needs planning options that might previously have been unavailable.

Solkoff Legal, P.A. represents injured parties through their trial lawyers using special needs trusts, qualified settlement funds, structured settlements, lien resolution strategies and other tools to help trial counsel resolve cases quickly and for more money. We are very pleased with the Ahlborn case and we wanted to get this information in your hands as soon as possible.

Your goal is to set to paper your health care directions in advance of needing them. You want your wishes to be honored and most want their surrogates and family to have as safe and easy a time of it as possible. Scott Solkoff has identified some easy and very important “drafting opportunities” to consider when people do Advance Health Care Directives. Advance Health Care Directives are health care decisions we make in advance of needing them and include such documents as Living Wills, Health Care Surrogate Designations and Health Care Power of Attorneys:

1. You are unique in your personhood. Examine your own wishes. Do not think you need to fit your own wishes into a form created by someone else. Some Elder Law Attorneys can help you ask yourself the important questions and then put it to paper in a manner most likely to be honored. If you must sign a “form,” know that there are many forms out there and you should examine many to find the one that best approximates your own wishes.

2. Pain medications are sometimes deemed “artificial procedures” and are therefore sometimes withheld when a document mandates that no artificial procedures be used. Most people want to die in as painless a fashion as possible. Be specific to indicate that you want pain medications to be used if they will lessen your suffering even if those pain medications may dull your consciousness or indirectly shorten your life.

3. Consider a liability shield for the doctors and facilities. Some doctors and health care facilities are afraid of being sued when dealing with living wills and health care surrogates. One reason why these advance health care directives are not honored is because of fear of a law suit. Consider including language in your documents that “indemnifies” the health care providers, facilities and your surrogates from any liability incurred as a result of their obedience to your directions. Do not underestimate the importance of this provision. People and institutions will be much more likely to honor your wishes if they believe themselves to be protected from liability for doing so.

4. Depending on your circumstances, it is usually best not to require all surrogates to sign off on directions. When health care decisions need to be made, those decisions often cannot wait to get all of the surrogates in the same place at the same time. Your document should be crystal-clear on how many signatures are necessary. Scott Solkoff usually recommends that people allow only one signature to accomplish a health care decision even if other surrogates are available to act. There are pros and cons. Discuss this issue with the Elder Law Attorney.

5. Make sure your Surrogate has all necessary credentials. The health care advance directive law is found in Chapter 765 of the Florida Statutes but there are other state and federal laws that affect your surrogate’s ability to act for you. For example, your documents should take into consideration Chapter 470 of Florida Statutes which allows for a “legally authorized person” to be designated to make funeral arrangements. Without this, your funeral arrangements might be made by a person not of your choosing. Your documents should also take into account new federal privacy laws. Many lawyers have reported that hospitals and nursing homes have refused to allow a Health Care Surrogate to access clinical records unless the documents explicitly point to HIPAA and related privacy laws.

6. Experimental medical procedures are sometimes desired and your documents should specifically authorize your surrogate to consent or withhold consent to experimental medical procedures if that be your wish.

7. If hospitals or other health care providers do not get full payment for your care, they might go after your Surrogate who authorized the care. Your documents should explicitly state that “My Surrogates shall not be liable or responsible for any costs or expenses of my medical treatment or care and a Surrogate’s signature on admissions papers shall not make that Surrogate liable for any costs and expenses incurred for my care, it being understood that the Surrogate acts for me and in my stead and I alone would be liable or responsible for such costs and expenses.” This one provision can save great grief and a considerable amount of money.

8. Make the Advance Health Care Directives “self-proving.” In Florida, all Last Wills & Testaments can be made self-proving. This means that the witnesses do not actually need to come to court to prove that the person actually signed the Will. A Last Will & Testament is made self-proving with the addition of an affidavit (a sworn statement) attached to the Will. It is not the custom to use these affidavits for advance health care directives but it is a smart idea. The inclusion of the “self-proving affidavit” makes the document look more official because the witnesses are making a statement that the rules of signing have been followed. If ever the document requires to be proved in court, this affidavit may prove helpful. There is no disadvantage other than that it takes the attorney a little more time.

9. Consider organ donations and your wishes regarding an autopsy. Including your wishes regarding organ donations and autopsy in your advance health care directives will better ensure that your wishes are made known. Most people are unaware that a Surrogate can donate your body or make organ donations even if you never consented to same during your lifetime. If you do not want this to be a possibility, you want to make that clear. If you do want to donate part or all of your body, then you also need to make your wishes known.

10. Make sure people know about your Advance Health Care Directives. Your Elder Law Attorney can create the best, most customized document in the world but if nobody knows about it, it does not help you. Immediately upon signing the documents, you should deliver one copy to each of your surrogates and one copy to your primary care doctor and whatever other specialists you are seeing. If you are not giving your Surrogate the original document, tell the Surrogate where you keep the original and make sure it is accessible. Talk to your Elder Law Attorney about other ways to keep your document available. If you update your document, make sure you send the new one to at least all of the people to whom the prior copy had been provided. Make sure you tell them that this new version replaces the older one.

Attorneys may not join ACTEC or apply on their own.  Fellows of the College are nominated by other Fellows in their geographic area and are elected by the membership at large. Scott was selected on the basis of his professional reputation and ability in the fields of trusts and estates and Elder Law, as well as having made substantial contributions to these fields through lecturing, writing, teaching and bar activities.

“This is one of my greatest honors and privileges,” said Scott Solkoff, “to be selected as a Fellow of ACTEC, what is without a doubt the most exclusive and prestigious organization in the field.”

Scott’s selection as a Fellow of ACTEC crowns years of accomplishments on the local and national stage of Elder Law.  He is among the youngest lawyers ever elected to ACTEC, an honor not lost on him or his peers.  Scott is also among only a few Florida lawyers who hold a Florida Bar board certification in Elder Law and an ACTEC fellowship.

Scott founded Solkoff Legal, P.A., a boutique Elder and Disability law practice now with four attorneys and offices in Palm Beach and Miami-Dade counties.  Scott practices in Elder and Disability law with an emphasis on planning for long-term care, incapacity planning and end-of-life decision-making.  He and his practice group have drafted hundreds of wills, trusts, specialized deeds, advance health care directives and other documents which help the elderly and disabled.  “My practice is focused on increasing and maintaining quality of life, a prospect many elderly and disabled people otherwise find very daunting,” says Scott.

Scott is well respected and admired within and outside of the Estate Planning, Probate and Elder Law community.  Lawyers from across the country call Scott and ask questions on a regular basis and he always takes their calls.  Says Scott, “Educating other lawyers and others in the elder care community is very rewarding to me and a lesson and responsibility I learned from my father.”  Scott’s father, Jerome Ira Solkoff, is one of the founders of the Elder Law field and is the author of the leading authority in Florida.

Scott has made meaningful and significant contributions in the area of estate planning, probate and elder law. For instance, he has received praise within the legal profession regarding his work with personal care contracts for the elderly.  It is Scott’s court case which set the legal precedent allowing seniors to transfer assets to children without losing Medicaid eligibility.  In 1997, Scott created, with the Honorable Thomas Pennick, a statewide coalition of judges, leading attorneys, legislators, educators and guardians to resolve guardianship education challeneges in Florida.  His work ultimately led to a statutory statewide education program.  In 1998, Scott was awarded the Charlotte Brayer Public Service Award for substantial assistance to the elderly and disabled.  Another example of Scott’s activism is his filing a court case which led to the highly publicized national class action lawsuit on behalf of elderly victims of abuses in the sweepstakes and magazine sales industry.

Scott has also dedicated thousands of hours of his time to professional and charitable organizations which assist the elderly and disabled.  He has served as Chair of The Florida Bar Elder Law Section, President of the Academy of Florida Elder Law Attorneys and as a member of the Board of Directors of the National Academy of Elder Law Attorneys and the Florida State Guardianship Association.  He is currently on the Board of Directors of the Alpert Jewish Family and Children’s Services and has just recently accepted a nomination to serve as a Director of the Florida Council on Aging.

“Scott is among the most well regarded Elder Law Attorneys in the country and his colleagues were not at all surprised to see him inducted as an ACTEC Fellow,” says Dan Terner, a partner with Solkoff Legal, P.A., “South Florida’s elderly and disabled are the better for his presence here.”

About ACTEC: The purposes of The American College of Trust and Estate Counsel are to maintain an association, international in scope, of lawyers skilled and experienced in the preparation of wills and trusts; estate planning; probate procedure and administration of trusts and estates of decedents, minors and incompetents; to improve and reform probate, trust and tax laws, procedures, and professional responsibility, to bring together qualified lawyers whose character and ability will contribute to the achievement of the purposes of the College; and to cooperate with bar associations and other organizations with similar purposes.

Who Will Mind Mom?
Check Her Contract

Seniors Turn to Written Agreements to Compensate
Relatives as Caregivers; Reducing Estate Size
By RACHEL EMMA SILVERMAN
September 7, 2006; Page D1

Trish Richert recently signed a binding employment contract. In exchange for taking care of a 77-year-old woman — arranging and taking her to doctors’ appointments, doing her bills, keeping her house tidy — Ms. Richert, of Greensboro, N.C., receives a modest stipend that covers travel expenses and other costs.

Ms. Richert’s employer: her mother. The two recently entered into a so-called caregiver contract — a formal agreement, set up by a lawyer — in which Ms. Richert, 45, receives a small payment for the long hours she spends caring for her mom.

A small but growing number of families are setting up caregiver contracts, in which adult children or other relatives are hired, for modest salaries, to take care of elderly or disabled family members. These arrangements, which are also called personal-service or personal-care agreements, can help reduce the size of a parent’s estate and thereby improve their chances of becoming eligible for long-term-care coverage under Medicaid. They can also minimize battles between siblings and other family members. For many other families, the contracts simply help reward the significant amounts of time, effort and money that family members often spend watching over and taking care of an elderly relative.

There aren’t any national statistics on how many family members are compensated for caregiving. But a huge swath of Americans already provide long hours of voluntary care for family members and friends — and these numbers are likely to grow as the population ages and more people live longer. Some 44.4 million adult caregivers — or 21% of the U.S. adult population — provide unpaid care to seniors or adults with disabilities, according to a 2004 study by the National Alliance for Caregiving in Bethesda, Md., a research and advocacy coalition, and AARP, the Washington advocacy group for seniors. On average, those caregivers provide 21 hours of care a week; the average length of time spent providing care is 4.3 years.

Many caregivers have to balance their family duties with their real jobs. Nearly 60% of caregivers either work or have worked while providing care, the study found, with many having to make adjustments to their work life, including reporting late to work or even giving up their jobs entirely.

Kathy Nalven is in the process of drawing up a caregiver contract with her mother’s 88-year-old fiancé, Edward Campbell. Ms. Nalven, a Fort Lauderdale, Fla., real-estate broker who is in her 50s, has agreed to take care of Mr. Campbell, but “the parameters have to be really clear,” she says. “If it means that I can’t work because I’m busy taking care of him, which I’m very willing to do, I need to be compensated. I’m not a saint.” Ms. Nalven and Mr. Campbell both say that the terms of the arrangement are still being worked out.

Elder-lawyers and caregiver advocates say that more people are considering compensating family members for their efforts. In recent weeks, Jennifer Cona, a Melville, N.Y., elder-law attorney, has drafted five caregiver contracts. Before that, she had drawn up only three in the preceding couple of years. “We’re seeing a real increase,” she says.

“I know in my own practice they are definitely increasing,” adds Lauchlin Waldoch, a Tallahassee, Fla., elder-lawyer. “People are more receptive to them now.”

Qualifying for Medicaid

There’s another key reason for the uptick: Legislation passed earlier this year makes it tougher to qualify for Medicaid long-term-care coverage by making outright gifts to family members. The measures were passed to prevent seniors who have the means to pay for their own care from obtaining Medicaid, which is intended for poor patients. Lawyers say that if set up properly, caregiver contracts shouldn’t be considered gifts to children because the patient is receiving a real service in return.

Medicaid isn’t likely to “disqualify you for making those payments to your children if you have an arm’s length, commercially reasonable contract, in writing, ahead of time,” says Charles Sabatino, director of the American Bar Association’s Commission on Law and Aging in Washington. Scott Solkoff, a Boynton Beach and Miami, Fla., elder-lawyer, says he has drafted more than 250 caregiver contracts in recent years; about half of the arrangements, he says, have been “Medicaid-driven.”

Still, there’s a lot of stigma to overcome when recommending the idea to families, lawyers say. The main reason: “People are still uncomfortable with the idea that you are paying your kids,” says Palo Alto, Calif., lawyer Michael Gilfix.

Indeed, when Ms. Richert first heard about the contracts from her mother’s lawyer, A. Frank Johns of Greensboro, N.C., “it felt funny,” she says. “It’s hard to put a dollar figure when you are doing something for your mom.”

Advisers and family members say the deals are also smart because a formal arrangement, done ahead of time, can minimize feuds among siblings and other relatives. Oftentimes, one child serves as a primary caregiver and a parent may reward him or her by making informal gifts or by doling out a bigger piece of the estate in the will. Unfortunately, those arrangements can lead to family fights or will contests.

A formal caregiver contract, drafted ahead of time, makes the arrangement “more iron-clad,” says New York elder-law attorney Bernard Krooks. “You have a written document showing this is what mom wants you to do and what mom wants to do for you. It helps avoid family squabbles.” But lawyers say it’s important to discuss the contract with other siblings or relatives so they are aware of the arrangement ahead of time; that can help minimize family tensions later.

Terry Huffines, of Brown Summit, N.C., set up a caregiver contract with her aunt, who is 92 years old, to help avoid any estate problems down the road with her aunt’s 15 additional nieces and nephews. The agreement, set up by Mr. Johns, the Greensboro, N.C., lawyer, outlines the services Ms. Huffines, 72, will provide for her aunt, including driving her to the doctors, the grocery store and other household chores.

In order for a caregiver contract to be respected — and to pass muster with Medicaid authorities — it has to follow certain formalities. For one, you can’t pay the caregiver an inflated rate in order to shift lots of money out of your estate. Instead, you should specify what duties the caregiver is expected to perform and then contact local home-care agencies or geriatric-care managers to establish the market value of those services in your area. Such duties can vary from preparing meals, bathing and dressing to housecleaning and chauffeuring, as well as arranging doctor’s appointments and friends’ visits and overseeing medications.

Cost Varies Widely

The cost of care varies widely, depending on location and the services being performed, and can range from about $15 an hour to more than $100 an hour. Some families choose to pay a discounted rate to family caregivers, which is also acceptable, lawyers say. It’s also much better to set up the caregiver contract when the incapacitated adult is of sound mind, as the arrangements can become far more complicated if a person acting as power of attorney signs the contract.

The contract should also specify whether the payment will be done in one upfront lump sum based on the senior’s life expectancy — a technique often used for Medicaid-planning — or in regular weekly or monthly payments. It’s also wise to create safeguards to prevent a caregiver from taking the money and running, such as depositing paychecks into an escrow account rather than to the caregiver directly.

There are also tax consequences to consider. The compensation is considered ordinary income, so the caregiver has to pay income taxes on the payment. Also, depending on how the contract is structured, Social Security and other payroll taxes may have to be withheld.

Many lawyers say they generally only set up the contracts as part of more-comprehensive estate plans, including power-of-attorney documents and wills, but that the arrangements can cost anywhere from about $500 to several thousand dollars to create.

It’s smart to check whether there are other sources of funding you can use to pay family members. Some long-term-care insurance policies, such as those that pay lump-sum “indemnity” benefits, may be used to pay family members who provide care, says Jesse Slome, executive director of the American Association for Long Term Care Insurance in Westlake Village, Calif. If you already have a policy or are considering one, see if the coverage will allow you to pay family members for their caregiving services.

In addition, some state or federal government programs provide funding to compensate family members in what is known as “consumer-directed care.” For instance, a growing number of states have a “Cash & Counseling” program for Medicaid enrollees that allows participants to pay family members for their services. Contact your local agency on aging or department of social services for more information on government funding.

Write to Rachel Emma Silverman at rachel.silverman@wsj.com

If you or your loved one is a Florida resident concerned about long-term care, contact Solkoff Legal, P.A. to learn about planning opportunities.  While the rules and laws will still allow people to avoid unnecessary impoverishment, there are planning opportunities which exist today that will not exist once the new law is implemented.  The implementation process for the new law (the Deficit Reduction Act of 2005 (DRA)) is complicated and dynamic.  As of the date of this posting, Florida is still operating under the “old” rules but proper planning requires consideration of both the old and the new rules. 

Because the new rules will so negatively impact Florida’s elderly and the government as well, Solkoff Legal, P.A. believes that the State will not be able to implement its new proposed rules without significant revision.  We are currently lending direct support to organizations and may be launching legal challenges in the near future.

For now, people who may be requiring long-term care in the next five years are well advised to not make any gifts or conduct any financial transactions without the advice of qualified counsel.

Keep checking this page for more information.

As defined by the United States Administration on Aging, “long-term care” means a variety of services designed to help people with health or personal needs and activities over a long period of time. The fact is that 60% of Americans over the age of 65 require long-term care. By the age of 80, 80% will require long-term care and 1 in 4 will require nursing home care. Long-term care does not have to mean a complete loss of independence or control over your life. The keys to owning your future and not being swept away by a broken system is to plan wisely and early, knowing your options and taking action.

Many people are afraid of aging. This is understandable in light of the way our culture portrays aging and what we sometimes see happen to people we know. Indeed, we have ourselves experienced the effects of aging. We feel more aches and pains. Our physical appearance has changed. We make more doctor visits and are taking more medicines than when we were younger. As we age more, our very freedoms can be infringed upon by our own infirmities. This is all true and it can depress us. The fact is, and this is crucially important, that all of these aspects of aging are inevitable and it does not help to meet these natural aspects of our life with fear and avoidance. In fact, it is the opposite attitude that helps people the most. People who are happier in their lives have not shut their eyes to their own aging; they have embraced both the positive and the negative aspects of aging as a natural part of their life. This does not mean that these happy people no longer feel pain when they have arthritis. What it does mean is that they accept the fact of aging and focus on the positives. A person who is too busy feeling badly and saying “Woe is me,” will not be able to better their position. It has been proven time and again that a positive attitude, one that you control, will allow for better results.

To succeed at aging and to face incapacity head-on, one must become prepared and then take wise action. It is so much more likely that a person will be able to learn and take action when they have not shied away from the reality of aging and long-term care. In practical terms, this means, for example, accepting the fact that while I want to stay in my own home, the day may come when I may need to move into a health care facility. That is not a happy thought but it is a realistic one. Though most people say they will never be entering a nursing home, there are lines to get in. It is therefore wise to take the positive and realistic attitude of “I am going to do everything I can to stay at home but if I absolutely must move, I am going to have a plan so I can get the best care possible.” Many people have no plan because they denied a nursing home could ever happen to them. While some of these people will be proven right, many will need care for which they never planned.

In long-term care, as in all important ventures, the difference between someone who has a good plan and someone who has an inadequate plan (or no plan) is vast. Results are completely different. Rather than gaining admission to the facility of choice, the person with no plan gets literally routed to whichever facility has space at that moment in time and which happened to have a marketing relationship with the patient’s health care provider. The person with no plan is caught by surprise when the first bill is received. The person without a plan does not know what to do or who to call when problems occur.

Aging is a process with which each person must make their own peace. There is help for us but this is a very personal resolution. Long-term care, on the other hand, is a system that can be and has been mastered by those who work for the keys. This website is one such key prepared by experts who have worked in the long-term care field for many years. The articles on this website and on other Internet sources are not sufficient on their own but must be supplemented with your meetings with local professionals who have mastered different parts of the process. Then, you will have the keys to long-term care.

We will always attempt to contact you to let you know if an appointment must be rescheduled.  If for some reason we cannot get in touch with you, you may listen to reports of government closings.  If the courts are closed due to the storm, any appointments set for those times will be rescheduled.  You can also check here for more information.  If you are already a client of Solkoff Legal, P.A. and you require assistance in preparing for the storm, call the office.

Solkoff Legal, P.A.

If you are fortunate enough to live in Florida, look no farther. But for those who cannot work with Solkoff Legal, P.A., here are some questions to assist you in selecting the right Elder Law Attorney. Print these out and bring them with you as you interview the attorney. They are set forth in no particular order. Remember that it is perfectly appropriate to ask these questions. If the attorney seems offended, that is your cue to leave.

1. Are you board certified as a specialist in elder law by the state Bar association? Note that some states do not have board certification. For those that do, board certification is a stamp of quality assurance. If the state does not have board certification, ask if the lawyer is certified by the National Elder Law Foundation.

2. Are all of the documents and all of the needed advice and services included in the quoted fee? What is not included in the fee? If billing is hourly, will I have to pay every time I have a question? Is every document priced separately?

3. [If planning for Medicaid or other public benefits] What if I am denied eligibility for Medicaid, etc? Will there be additional fees for appeals and if so, what are those fees? Have you handled any Medicaid appeals? How many? How many of your own clients have been denied eligibility for Medicaid?

4. Is the attorney a member of the National Academy of Elder Law Attorneys (NAELA)? Membership in NAELA is open to any lawyer so membership in and of itself does not mean that the lawyer has any special skills, experience or training but every lawyer that does is a member.

5. Does the attorney get paid from any source other than the client? Does the attorney get paid by insurance companies or take a commission as a result of a sale of different products the attorney may advise his or her clients to purchase?

6. [If applying for any programs of assistance] Does this firm have dedicated staff to handle the application process? What is my role in the application process? If staff is handling any part of my case, what is the qualification of those staff persons?

7. Have you ever been sued for malpractice?

8. Have you ever been the subject of a Bar complaint? Note that some state Bar association will give you this information just by your calling them.

9. Can the attorney assist you in planning for Veteran’s benefits as well as for Medicaid benefits?

10. Does the law firm out-source application services or other aspects of the representation to persons outside of the firm and who are therefore beyond the supervision of the firm and beyond the insurance coverage of the firm?

11. Will the attorney make house calls as necessary?

12. Is the attorney a member of the American College of Trust and Estate Counsel (ACTEC)? ACTEC membership is available by invitation only and requires a strict vetting process. ACTEC attorneys are widely considered to among the highest qualified in the country. See www.actec.org.

13. Has the attorney published work in professional journals or law books on the subject matter of import to you?

14. Has the attorney held positions of leadership in the field of Elder Law? Elder Law Attorneys know who is reliable and who is not. Find the attorneys who lead the organizations and you will almost always find a top-shelf speciman.

15. How much does the firm spend on advertising? If the firm relies heavily upon newspaper, radio or other advertising, you have less assurance than from a firm which must constantly impress its referral sources as its primary source of business.

Note that not every attorney needs to meet every criteria to be the right attorney for you. These questions are also the author’s opinion of important qualities in an Elder Law Attorney but there are other intangible qualities that matter as well. One of the most important is your sense of the attorney’s character, judgment and communication ability. You can have the best lawyer in the world but if he cannot make himself understood, it might not matter.

One more VERY important point: You are worth it and yes, your selection of attorney will matter. You must use your skills, intuition and advice of others to find the right Elder Law Attorney for you.

The “right” Elder Law Attorney for you does not mean it has to be thes “best” Elder Law Attorney but why not?! People have a tendancy to underestimate the importance of their choice of lawyer. It is far too easy to pick a lower priced lawyer and/or one who is quicker to get in to see. This decision though can have an enormous impact on outcome. Do not base your decision on thoughts like: “My case is simple. I do not need a fancy lawyer” or “I am not that rich. I do not need a lawyer like that.”

It is not always the case but if the lawyer is very busy and you must wait to get an appointment, that is a very good sign. There is a reason the attorney is in demand. If they seem to be waiting by the phone for your call, that should give you pause. Busy lawyers are busy for a reason. If they are busy, that does not necessarily mean they are hard to reach. For non-clients that may be the case but for an attorney to stay successful and busy, the attorney must earn a reputation for taking care of his or her clients.

To learn about the background and expertise of the lawyers of Solkoff Legal, P.A., click here. The Internet gives you great tools to help find the right Elder Law Attorney. Go to www.naela.org, www.actec.org to view their membership rosters and go to www.thomsonwest.com to see who other lawyers look up to as the lawyers to write the book on the subject.