We are back in the conference room after a year of meeting clients in the lobby for more space and ventilation. What a wonderful thing to return to some of the normal practices around the office. I love this room because it reminds me of so many wonderful people I have met and worked with at this table.
Medicaid can be very complicated and confusing, but it is a critical benefit for persons in need of long-term care. I prepared this presentation for a recent educational seminar for professionals and caregivers. Feel free to download or read online to learn more about applying for institutional Medicaid.
All long-term care costs rose sharply in 2020, but assisted living facility costs increased the most, according to Genworth’s latest annual Cost of Care Survey. The across-the-board rises were due in part to increased costs brought on by the coronavirus pandemic.
In the past year, assisted living facility rates grew 6.15 percent for a median cost of $51,600 per year or $4,300 per month. Genworth also reports that the median annual cost of home health aides rose 4.35 percent to $54,912, while the median cost of a private nursing home room rose 3.57 percent to $105,850 and the median cost of a semi-private room in a nursing home is now $93,075, up 3.24 percent from 2019. The national median annual rate for the services of a homemaker also climbed 4.44 percent to $53,768.
In response to this year’s price increases, Genworth conducted a follow-up study to understand how COVID-19 is impacting the cost of care. Genworth found that labor shortages, personal protective equipment costs, regulatory changes, employee recruitment and retention, wage pressure, and supply and demand were contributing to rate rises.
The only care setting where costs did not increase was adult day care, which provides support services in a protective setting during part of the day. Costs for adult day care actually fell from $75 to $74 a day, a 1.33 percent decrease, perhaps because many adult day care sites have been forced to close due to the pandemic.
Monthly care costs for Alabama in 2020 were:
Homemaker services, $3432; homemaker health aide, $3432; adult day health care, $655; assisted living private one bedroom, $3150; nursing home semi-private room, $6540; and nursing home private room, $6911.
Alaska continues to be the costliest state for nursing home care by far, with the median annual cost of a private nursing home room totaling $436,540 per year (yes, that is not a typo – it really is that expensive). Missouri was the most affordable state, with a median annual cost of a private room of $68,985 per year.
The 2020 survey, conducted by CareScout for the seventeenth straight year, was based on responses from 14,326 nursing homes, assisted living facilities, adult day health facilities and home care providers. Survey respondents were contacted by phone during July and August 2020.
As the survey indicates, long-term care is growing ever more expensive making planning for long-term care essential.
Title to real property defines legal ownership of the property, and that ownership is usually identified by language in the deed showing who owns the property and how it is owned. Rights associated with property is also a matter of state law and can be altered by marital status.
There may be multiple times when you will need to decide how to title property – such as when you purchase property or when you give property to others during your lifetime or through your estate when you die. It is important to understand the different ways property can be owned before you make decisions on how to title it or whether a will may need to be probated.
The most common ways to hold title are:
- Sole Ownership
- Joint Tenancy with or without Right of Survivorship
- Tenants by the Entirety
- Tenants in Common
- Life Estate Tenant
- Community Property
Sole ownership is ownership by one individual or entity. The most common sole ownership is one held by a single person or a married person who wants to hold property apart from his or her spouse. Sole ownership might also be ownership by a business or trust.
It is important to realize that even if you are a sole owner, if you are married and the property is your homestead in Alabama, you will not be able to transfer the property without your spouse’s signature on the deed. It is also important to have your will in place to transfer the property at death since there is no right of survivorship with sole ownership. If you own property alone and die without a will your next of kin will inherit the property through the laws of intestacy (laws defining how property passes without a will).
Joint Tenancy with or without Right of Survivorship
Joint tenancy means that two or more people hold title to real estate jointly, and each has the right to occupy the full property during his or her lifetime.
If one of the owners die, his or her rights of ownership pass to the heirs unless the deed specifically states that the owners are joint tenants with right of survivorship, means that the property will automatically pass to the surviving owner. This is how many married couples own property in Alabama.
The primary advantage to joint tenancy with right of survivorship is that the death of the first of the joint owners does not require probate of his or her will. The property passes outside probate (outside the will) to the survivor. Expenses of upkeep, taxes, insurance, etc., are shared between the joint tenants.
You do not often see it, but property owned by joint tenants with right of survivorship can be severed (an owner’s share sold) resulting in the property thereafter being held as tenants in common.
A creditor who obtains a legal judgment against one of the owners can come after the property, requiring it to be divided, to have the debt satisfied.
Tenants by the Entirety
This method of ownership can only be used when owners are legally married. This type of ownership is generally not seen in Alabama, but it is mentioned in the code indicating at Code of Alabama § 43-7-4. There it states that:
Where there is no sufficient evidence that two joint tenants or tenants by the entirety have died otherwise than simultaneously, the property so held shall be distributed one half as if one had survived and one half as if the other had survived. If there are more than two joint tenants and all of them have so died, the property thus distributed shall be in the proportion that one bears to the whole number of joint tenants.
Property owned as tenants by the entirety cannot be severed, or one spouse cannot sell his or her share.
You will not own Alabama property in this manner, but you may see it in other jurisdictions such as Arkansas, Delaware, Florida, Hawaii, Maryland, Massachusetts, Mississippi, Missouri, New Jersey, Oklahoma, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia, and Wyoming.
Tenants In Common
With tenancy in common two or more persons hold title to real estate jointly. They may own it equally or in unequal percentages. For example one may own 30 percent of the property while the other owns 70 percent, but despite those ultimate ownership shares, each owner has the right to occupy and use all of the property while the ownership percentages define the financial ownership of the real estate. If the property is sold, each will get his or her ownership percentage. Either owner may sell or give away his or her share of the property, and at death his or her share will pass to those named in a will or next of kin through inheritance. Each owner is responsible for all debts against the property (for instance both or all parties are responsible for all taxes due on the property).
Life Estate Tenant
You may have the right to occupy property during your lifetime through a life estate, and when you die people called the remaindermen instantly become the owners. Often in second marriages a spouse will leave a life estate to the widow and the remainder interest to his or her children. Another situation where life estate interests are seen is when a parent gives the property to children and retains a life estate in the deed.
While title is usually determined by the deed, that is not always true. In the case of heir property you may be living on property that was last deeded to your grandparents whose estates were never legally settled, and there is no deed in your name. In that event determining how your grandparent’s property passed by operation of law is necessary. Often this requires tracing family relationships and deaths over the course of several generations to land on who actually owns the property today.
There are nine community property states in the U.S.: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Alaska is an opt-in community property state that gives both parties the option to make their property community property. Alabama is not a community property state.
Community property is a form of ownership by a married couple during marriage that they intend to own together. Each spouse owns the property equally, and owes any debt against the property equally regardless to who earned the money to purchase the property or incurred debt for which the creditor seeks to satisfy from the property value. In the event of divorce each spouse will gets an equal division of the property. In the event of death there is no survivorship unless the couple lives in a state that permits survivorship (Arizona, California, Nevada, Texas, Wisconsin). Outside those community property survivorship states the couple must have a Community Property Survivorship Agreement. Without living in a community property survivorship state or having a Community Property Agreement each partner’s share will pass through his or her estate.
The take away:
How you own property is just as important as the fact that you own it. What you can do with property – your rights and obligations – and how you can leave property to your heirs can only be determined by knowing how the title is currently held. If you are planning on any property acquisitions, transfers or estate distributions, it is critical that you understand how you already own or want to own or have your heirs own property.
While Medicare would cover a coronavirus vaccine approved through normal channels, there was concern that because the Food and Drug Administration approves the vaccine through an emergency use authorization (EUA), Medicare might not cover it. Governmental action was needed to assure that Medicare beneficiaries could receive the vaccine without charge.
Fortunately, The Centers for Medicare and Medicaid Services released an interim final rule Oct. 28 saying that Medicare would cover vaccines that receive U.S. Food and Drug Administration authorization — including those available through emergency use authorization — at no cost to beneficiaries. This will remove any concern or barriers to Medicare beneficiaries receiving the COVID-19 vaccine.
CMS will pay about $28 to administer single-dose vaccines. For vaccines that require two or more doses, it will pay around $17 for the first dose or the first few doses and $28 for the final dose in the series. According to CMS, the cost to vaccinate the roughly 67 million seniors enrolled in Medicare will be about $2.6 billion.
This is a short presentation on The Alabama Small Estate Summary Distribution available for estates that include no real property and assets not exceeding $30,245 (in 2020).
It is estimated that 20 percent of Americans over 65 are in the work force. AARP calls the hottest demographic in the labor market to be those men and women working not only past traditional retirement age but into their 70s, 80s and sometimes beyond. So among the unemployed are seniors who found irreplaceable meaning in work and/or counted on their jobs to supplement inadequate retirement.
The COVID-19 pandemic has sent unemployment to its highest levels since the Great Depression, and older workers have been particularly hard hit. Many of those who continued to work beyond retirement age also draw Social Security benefits, and some are now being forced to take their benefits early after losing their jobs when doing so will permanently reduce the amount of benefits they can draw.
If you are already receiving Social Security, are you also eligible for full unemployment benefits? Until recently, the answer was not necessarily. Many states reduced unemployment benefits of those receiving Social Security retirement benefits by up to 50 percent, something called the “Social Security offset.” But after AARP and the National Unemployment Law Project pushed to have these laws overturned, this is no longer the case. In 2015 Illinois became the last state to repeal the Social Security offset.
“These two benefits are not duplicate payments,” the Law Project said at the time. “Older workers who must work or choose to work should not have their unemployment benefits cut or eliminated simply because they have reached the age to qualify for Social Security.”
So do not assume that you cannot draw Unemployment Compensation because you are at or above the traditional retirement age and draw, or could draw, Social Security. If you have lost your job you need to apply for Unemployment Compensation. Similar to Social Security, certain other “unearned” income you may receive, like annuities and investment income, do not count against receiving unemployment insurance. Only earned income affects unemployment benefits.
The Center for Medicare and Medicaid Services (CMS) has issued its Interim Final Rule Updating Requirements for Notification of Confirmed and Suspected COVID-19 Cases Among Residents and Staff in Nursing Homes. This is good news for people who are concerned about their relatives living in long-term care.
CMS will require nursing homes to report COVID-19 facility data to the Centers for Disease Control and Prevention (CDC) and to report to residents, their representatives, and families of residents in facilities. Failure to report in accordance with 42 CFR §483.80(g) can result in an enforcement action.
There have been some problems for Alabama residents trying to obtain information about infection rates in individual facilities despite the fact that it is reported that residents and staff members of long-term care facilities now account for about 13 percent of the cases in Alabama, and 100 deaths in long-term cre facilities account for more than a third of the state’s total deaths as of May 1. Since relatives have been unable to visit since March, a great deal of anxiety about the care of residents has increased.
In Alabama up until now staff are required to tell families if someone living or working at the facility has tested positive for coronavirus, but those facilities do not have to say how many cases have been reported. Greater transparency will benefit family members seeking to protect their institutionalized loved ones.
Late yesterday, after much congressional protest, the administration reversed course and announced that tax filing will not be required for Social Security recipients to receive their stimulus payments.
It is not clear if this course reversal applies to those on Veteran’s Benefits and SSI, but it would be surprising if it did not. We will keep you posted.
Pursuant to the CARES ACT (Coronavirus Aid, Relief, and Economic Security Act), individuals with income up to $75,000 for a single person or $150,000 for married and filing jointly are eligible to receive $1,200 for a single person or $2,400 for a married couple filing jointly. An additional $500 per qualifying dependent child under the age of 17 will also be provided to families.
For individuals who filed federal income tax returns in 2018 or 2019, you do not need to take any further action at this point. You will either receive the stimulus via direct deposit based on the information the IRS has on file or you will receive a physical check in the weeks to come.
More than 20 million taxpayers over the age of 65 do not file a federal income tax return each year – likely because their only source of income is Social Security benefits. For persons who may not have filed a 2018 or 2019 tax return, there does not appear to be clear directions at this time on how to ensure that they receive the stimulus. According to the CARES Act the filing of a tax return should not be necessary, and the payment could be direct deposited along with monthly benefit payments. However the IRS has issued a notice that appears contrary to the actual CARES Act indicating that seniors on Social Security will need to file a simple tax return (which has not been made available at the end of March). There is also discussion of a web based portal at the Treasury Department through which people could enter their information (this has yet to be designed or implemented).
Regardless of the mechanism which will be used for “non-filers” the IRS will have to have the Social Security numbers of all parties to include any dependent children in order to generate the stimulus payment as well as information on bank accounts for direct deposit.
At this point, if you did not file in 2018 or 2019 you may want to file a return either by hard copy or e-file. If you do not want to file the tax return for 2018 or 2019 you have the option to wait and see what action will be required of you. The stimulus payment is available through 2020, and tax payments for 2019 have been delayed until July, so you do not have to rush to file a tax return.
Be advised that the receipt of the stimulus payment will not be treated as a resource for one year and will not affect eligibility for federal means tested programs such as Medicaid, SSI or SNAP.
We will stay on top of this issue and continue to provide information as it develops in an effort to assure that all eligible seniors obtain their stimulus payments.