Defending Our Elders: Unmasking Nursing Home Exploitation and Ensuring a Secure Future

Nursing homes, in their ideal form, are meant to be sanctuaries of care, compassion, and respect for our loved ones. These facilities are entrusted with the responsibility of providing a safe and nurturing environment for elderly individuals who may require assistance with daily activities, medical care, and emotional support. However, reality often falls short of this noble ideal. Unfortunately, we often hear horror stories about what can occur behind closed doors, where only the vulnerable elderly bear witness. Every so often, stories of physical neglect, emotional isolation, abuse, medication mismanagement, financial exploitation, and more creep into mainstream media. Most recently, following an investigation by the Office of the Attorney General’s Medicaid Fraud control unit, a lawsuit was filed in the State Supreme Court of Manhattan against the owners of four nursing homes throughout New York State.

What happened?

Kenneth Rozenberg and Daryl Hagler have been accused of defrauding taxpayers of $83 million dollars, according to the lawsuit. The two men illegally used taxpayer money for personal benefit, even purchasing an airline, while neglecting their duties as nursing home managers. Due to severe underfunding and understaffing, the homes deteriorated and became health hazards. Without necessary funding, patients could not get their medication. Without necessary oversight, cases of elder abuse skyrocketed within these facilities. According to testimonies by family members, they were unable to reach their parents who resided in the facilities. In addition, they were not notified of severe injuries they had faced, such as brain bleeding. Another woman said that her father had been so severely neglected that he passed away from sepsis before she was able to pull him out of the home.

According to the Attorney General’s office, Rozenberg and Hagler created LLCs that they used to receive payments from the government and then spent these funds at their personal discretion. Investigations revealed that throughout the COVID-19 pandemic, Rozenberg and Hagler understaffed their facilities to earn more profit. They have also been accused of paying themselves exorbitant salaries for nonexistent work, charging steep amounts for rent which they did not report, and paying their family members $10 million dollar salaries while underpaying their actual staff. It is tragically common to see our most vulnerable population being exploited. There have been many stories throughout the years regarding the nursing home industry being a for-profit scheme that does not have regard for those who rely on the homes. Seeing stories like this one is shocking and it instills in us fear for our aging loved ones. While justice is being pursued in this case, it is important to be informed of steps that you can take to protect not only your loved ones but their assets as well if they end up in a nursing home.

The Benefits of Long-Term Planning

While not much could have been done to prevent these incidents from the perspective of the victims, there are still helpful conversations that you can have with your aging loved ones, or as you yourself age. Nursing homes are known to exhaust all residents’ individually owned assets before turning to government aid. This strategy, while legal, can leave families grappling with financial burdens and undermine one’s ability to pass down valuable assets to future generations.

One effective way to safeguard your valuable assets is by creating an irrevocable trust. An irrevocable trust allows you to continue the use of your assets during your lifetime while ensuring that they will be passed down to the beneficiary of your choosing. This type of trust establishes a distinct barrier between the ownership and control of assets. Since you are no longer the legal owner of property held in the irrevocable trust, nursing homes cannot target those assets, whether it be residences, liquid assets, or other valuable holdings. These trusts also have tax benefits because the assets held in the trust are often excused from estate taxes. It is important to note that Medicaid has a “look back” period to determine eligibility based on assets, typically spanning five years, so it is necessary to transfer assets well before you anticipate requiring long-term care. Creating an irrevocable trust to become eligible for Medicaid later in life is referred to as “Medicaid planning” and is a very common method of avoiding exorbitant nursing home costs.

Designating your healthcare power of attorney is another critical step in setting up your estate plan. This document empowers someone that you trust to make your medical decisions for you in the event that you are incapacitated or unable to make those decisions due to medical conditions. Within the realm of medical care, decisions ranging from treatment options to end-of-life choices can be intricate, sensitive, and emotionally charged. Entrusting someone with your healthcare power of attorney is akin to selecting a guardian for your health-related interests, someone who comprehends your values, beliefs, and healthcare preferences. This chosen individual, known as your agent or proxy, is armed with the legal authority to consult with medical professionals, review medical records, and ultimately make decisions aligned with your wishes when you are unable to articulate them yourself.

In addition to safeguarding assets through irrevocable trusts and appointing healthcare proxies, comprehensive long-term planning encompasses a spectrum of critical measures. Advance healthcare directives, financial power of attorney, and guardianship arrangements ensure holistic protection in times of incapacity. Estate tax planning and probate avoidance strategies optimize the legacy you leave behind, while asset protection methods and special needs planning address unique financial considerations. Beyond the financial aspects, the peace of mind derived from knowing that your loved ones are cared for and your values are upheld is an invaluable benefit of robust estate planning. This comprehensive approach not only safeguards assets but also reflects the commitment to providing a secure and dignified future.

As you craft your estate plan, it is necessary to have an experienced, knowledgeable attorney by your side. If you have any further questions concerning nursing home fraud, Medicaid fraud, or estate planning, please call the Trust and Estate Planning Law Office at (718) 333-2395 to take your next steps.

Looking Ahead: Estate Planning for Early Onset Alzheimer’s and Dementia

Alzheimer’s and dementia are two of the most common fears that come with age, especially if you have a genetic predisposition to these diseases. The tragedy of these conditions is that there is truly nothing you can do to stop yourself from losing your memory. However, as you face this stark reality, it is important to be aware that there are steps that you can take, from a legal perspective, to set up your descendants for success before it is too late. When creating an estate plan, you must legally be of sound mind. If the attorney has any doubt that you have the capacity to make your own decisions, they are obligated by law to consult with a doctor. If you are at risk for developing early-onset Alzheimers, it is important to avoid delaying your estate planning journey.

Appointing a Power of Attorney

One of the most integral steps to take if you are at risk of developing Alzheimer’s or dementia is appointing a power of attorney. This allows you to communicate your healthcare preferences through legal documents. This also ensures that your medical and personal care decisions are aligned with your values and preferences, even when you are no longer able to make decisions due to cognitive decline.

A power of attorney should be bestowed on the person that you trust most to make medical decisions on your behalf when you are no longer able to do so. Your healthcare proxy will be the person advocating for you and reflecting your wishes. A durable power of attorney is equally as important. The person that you chose for this role will handle your financial affairs, pay bills, manage investments, and make any decisions regarding property or the law on your behalf.

The Living Will

The fear with Alzheimers is that you will one day no longer be able to take care of yourself, and that you must rely on others to make decisions on your behalf. Perhaps the single most essential document in estate planning for early-onset Alzheimer’s and dementia is your living will. This document is crafted while you are in a sound state of mind, able to think critically about your future. A living will can contain any and all of your wishes for how you hope to live out the rest of your life. It gives you power over your future and gives advance directives to the people responsible for taking care of you. Your living will should include preferences for medical treatment and end-of-life care as well as your desires for life-sustaining treatment, organ donation, and other critical decisions.

Other Estate Planning Considerations

Just as you would with an ordinary estate plan, it is important to think about all of your assets and what you want their journey to be. There are various types of trusts that can be used to pass down different types of assets in a wide range of formats. While you can still make decisions, it is up to you to secure both your own financial future and the future of those you care about. You will need to designate guardianship for minors if you have children you will not be able to care for in the event of an early-onset of the disease. You should also consider your long-term care options and how they will affect your assets.

If you plan to go to a long-term care facility or receive government-subsidized at-home care, there are important considerations. Nursing homes and other long-term care facilities will drain all of your assets, even liquidating properties, before turning to state-subsidies. In order to protect the financial futures of your beneficiaries, it is important that you set up an irrevocable trust. An irrevocable trust separates the ownership and control of the assets it holds. This means that you can continue living in your house, but since the asset is no longer legally owned by you, it cannot be targeted by nursing homes or other creditors. After you pass away, the house will safely go to your beneficiary.

Navigating this process is extremely difficult, and likely impossible, without an experienced attorney by your side. A good attorney will set you up for success to the best of their ability in your personal, financial, and medical future. If you have any further questions about when it is the ideal time to begin your estate planning journey, please call the Trust and Estate Planning Law Office at (718) 333-2395 to take your next steps.

Steps to Creating An Asset Protection Plan To Safeguard Against Creditors

An asset protection trust is a legal arrangement in which an individual transfers ownership of assets to a trust, with the intention of protecting those assets from future creditors or legal action. The trust is managed by a trustee, who is responsible for managing the assets in accordance with the trust's provisions.

As mentioned previously, the primary purpose of an asset protection trust is to shield assets from potential creditors or legal action. By transferring ownership of assets to the trust, the individual can protect those assets from future claims. However, it's important to note that asset protection trusts are not foolproof, and there are limits to their effectiveness.

Creating an asset protection plan can be a complex process, and it's recommended that you consult with a legal and financial professional who specializes in this area. However, here are some general steps you can take to begin creating an asset protection plan:

Identify your assets: Make a list of all your assets, including real estate, investments, and personal property.
Assess your risks: Consider the potential risks that could threaten your assets, such as lawsuits, bankruptcy, or divorce.
Review your insurance coverage: Make sure your insurance coverage is sufficient to protect your assets in case of any risks.
Separate personal and business assets: Keep your personal assets separate from your business assets to avoid liability issues.
Consider forming a legal entity: Consider forming a legal entity, such as a limited liability company (LLC) or a trust, to protect your assets from lawsuits and other legal actions.
Transfer ownership of assets: Transfer ownership of your assets to the legal entity you created. This can provide an additional layer of protection.
Create a succession plan: Create a succession plan for your assets in case of unforeseen events such as disability, death, or divorce.
Keep your plan updated: Regularly review and update your asset protection plan to ensure it continues to meet your needs and to stay up-to-date with changing laws and regulations.

Don’t Wait to Create A Plan:

One of the biggest mistakes an individual can make is to wait until a lawsuit has been filed or is about to be filed to begin protecting their assets. If you wait until this happens, your asset protection strategies may be exposed to creditors and used against you by a judge or a jury. Unfortunately, many people wait until something bad happens to begin asset protection planning, but for your plan to be effective, you need to create it before creditors come for your assets. Creating an asset protection plan is not something that should be done quickly and or serve as a temporary fix.

If you or a loved one are looking to draft a comprehensive asset protection plan that is unique to your circumstances, contact the Law Office of Inna Fershteyn at (718) 333-2395

Should I Create a Life Estate or an Irrevocable Trust?

As you are getting older, Asset protection and Elder Law planning becomes relevant. As you are researching an optimal estate plan to preserve assets from nursing home bills, a life estate deed transfer may initially sound appealing. After all, a life estate deed is a legal means for transferring home ownership rights. However, there are downsides you must fully understand before making this commitment. Prior to making the decision of adopting a life estate, it is crucial to fully understand the risks.

Life estates are characterized by two or more people having ownership over a property for non-overlapping periods of time. These parties are the life tenant and the remainderman. The life tenant owns the life estate and has full control during their life. The remainderman has ownership interest upon the death of the life tenant.

In many circumstances, executing a life estate makes the most sense. It is useful for those looking to simplify estate planning and avoiding the probate process. The transfer of the property to the remainderman is automatic, providing convenience without the need for a will. For example, parents can easily pass homeownership to their children while possessing their property for their entire lives. This provides transparency to the beneficiaries and affirms the life tenant exactly what will happen to their property when they pass away.

Additionally, a life estate deed protects the property from a Medicaid lien and increases the tax basis. If eligible for Medicaid, the government may try to recover the costs of care from their estate once they pass away. A life estate protects the home from being included in the Medicaid recovery process.

Although a life estate may seem appealing, some caveats come with them. There are three main unfavorable aspects. If you consider these reasons as dealbreakers, a life estate will not work for your personal estate goals.

Real Estate Related Challenges

Upon establishing a life estate, obstacles will arise if you plan to sell or mortgage property. The remainderman must agree if you decide to borrow or sell against the property. Nevertheless, this can be solved with a Testamentary Power of Appointment in the Deed. This allows life tenants to change who receives their property by directing its disposition in their will. While it won’t sell the property, it gives the life tenant more leverage in negotiation over the remainderman. An alternative to this is the Nominee Realty Trust, where one or more children act as Trustees for all so that decisions must be followed on a majority vote.

Another obstacle is that if the property is sold, the remainderman is entitled to a portion of the profits equal to what their interest is determined to be at that time. It is also difficult to remove or change a name once it is on a real estate deed.

Legal Responsibility of Remainderman

The problems of the remainderman become your problem as well. If this individual is in any legal predicament, such as being sued, getting a divorce, owing taxes, or filing for bankruptcy, the interest in the home is not protected. However, while claims can be made against the property, nobody can kick you out for the duration of your lifespan.

Medicaid and State Assistance Disqualification

Giving away an interest in the property could result in disqualification from Medicaid assistance, should you need long-term care within five years of the transfer. To add on, that state could file a claim against the income portion of the payments it has made on your behalf. In this case, at least the portion of the proceeds allocated to your child would be protected.

Irrevocable Trust

Irrevocable trust is a much better alternative to protect your property from creditors including Medicaid liens and nursing home costs. For more information on irrevocable trust, please contact the Law Office of Inna Fershteyn at (718) 333-2395.

3 Reasons to Create a NY Irrevocable Trust

Elder planning is an important and necessary step to take in order to make sure that your wishes for the future are carried out in the way you intended. In this process, a decision you will make is what type of trust is best for you. A trust allows a trustee to hold assets on behalf of beneficiaries.

One type of trust is an irrevocable trust, which cannot be changed or revoked after signing. Giving up control over your assets is a big commitment that must be carefully considered. Individuals who would benefit from an irrevocable trust typically fall into one of three categories.

3 Reasons to Create NY Irrevocable Trust

Minimize Estate Taxes

The primary benefit of an irrevocable trust is minimizing estate taxes. An irrevocable trust removes all incidents of ownership, meaning your assets are removed from your name. Assets in an irrevocable trust are no longer a part of your estate, which allows for tax efficiency.

Government Programs

Unfortunately, Medicare does not cover all costs that a senior citizen needs. Medicaid would pick up the tab for long-term care, but the program has strict need-based limitations. To qualify for the Medicaid income threshold, you could transfer your assets into an irrevocable trust. As long as you fund the trust at least five years before submitting your Medicaid application, the assets will not count in your qualification. After executing your irrevocable trust, a tax ID number is created which allows individuals qualifying for Medicaid to move their assets out of their name.

Protect Assets

To protect your assets from creditors, it usually requires your trust to be irrevocable. The Trustee and Beneficiary must be unrelated parties. For people who face lawsuits frequently, having “asset protection trusts” is important. An asset protection trust allows your hard earned money, property, etc. to be safe from creditors.

Living In a Property Transferred in an Irrevocable Trust

If you are living in a property transferred in an irrevocable trust, the creator of the trust will still play a role. For example, they are responsible for all household expenses but reserve the right to live in the house. This is known as a “life estate.” Your house becomes safe from creditors and estate taxes. However, if you change your mind about having an irrevocable trust, the grantor cannot make any changes without the permission of the beneficiary(ies). Moreover, having an irrevocable trust is a significant commitment that should not be taken lightly.

For more information on how to decide if an irrevocable trust is right for you, please contact the Law Office of Inna Fershteyn at (718) 333-2395.