Senior Citizens Law Project – Legal Aid Service of Northeastern MN (LASNEM)

If you are 60 years old or older, the Senior Citizens’ Law Project may be able to help you! We focus our efforts to those with the most social and economic need, but otherwise we have no income or asset eligibility guidelines. This means that almost everyone will at least get a conversation with us about their situation.

The Senior Citizens’ Law Project is part of Legal Aid Service of Northeastern Minnesota, a non-profit law firm. We do not charge anything for our service, but we do accept voluntary donations. Clients must bear any costs which may arise from litigation, such as court filing fees, service fees, and recording fees. The fees may be waived by the court if the client can’t afford them.

We have a large service area, serving older Minnesotans in Aitkin, Carlton, Cook, Itasca, Koochiching, Lake, and St. Louis counties. While most issues can be handled by telephone, we can meet clients at our offices, at our remote office hours in the 7 counties, and/or in their homes if needed.

We help by advising clients and representing clients in court and in administrative hearings. We can negotiate on your behalf. We cover a wide range of civil law issues. (We do not cover criminal law). For example, we can help you understand long-term care and plan for incapacity. We can help protect your income and benefits, your housing, and your safety and security. We can help stop harassing creditor phone calls and garnishments.

Besides direct client services, we also reach out to the community by speaking to groups about topics of interest to older people, such as Medical Assistance, Healthcare Directives, Powers of Attorney, housing, and any other legal topic of interest to the group. Further, we write a monthly advice column, “Senior Legal Line”, which appears in various local newspapers and on-line.

If you have questions about the Senior Citizens’ Law Project, please contact Kristin Parendo, Senior Citizens’ Law Project, Legal Aid Service of Northeastern Minnesota, 424 W. Superior Street, Suite 302, Duluth MN, 55802. If you’d like to be a client, please call (800) 933-1112 to complete an intake.

A Legal Question & Answer Column for Senior Citizens

August 2015 - how do I change my birth certificate to show my name?

Dear Senior Legal Lines,

When I was born in 1946, my parents didn’t decide on my name until the week after I was born. Over the years, I seemed to have lost my birth certificate. Recently, I went to the courthouse to get a copy of my birth certificate and I discovered that my birth certificate lists my name as “Baby Girl.” I have a Social Security card and driver’s license, but how do I change my birth certificate to show my name?

Sincerely,

Gayle

Dear Gayle,

Birth records are kept and organized by the Minnesota Department of Health (MDH) Office of Vital Records. They have birth certificate dating back to 1900. In the past, birth certificates were filed in the county of birth, but over time, management of birth records transferred from the counties to the state. Since 2001, birth records have been electronically registered.

There are ways to change your birth certificate. If the change to the birth certificate occurred in the first year, a correction can be made at no cost. After the first year, for cases like yours, an amendment to the birth certificate needs to be made. To file for an amendment, you pay a fee (right now that fee is $40) and provide MDH with some documentation. This process is completed by mail. Note: amending a birth record is not the same as adding a parent to the record or replacing a birth record after an adoption.

The data on a Minnesota birth record is called certification items. These items can be amended. They include:

First, middle, and last name
Date of birth
Time of birth
Plurality (single birth, twin, etc)
Sex
Place of birth
Parent’s name
Mother’s maiden name
Parent’s date of birth

When a person’s name or date of birth is amended, the birth certificate will indicate that the item was changed. Notes about the amendment will be printed on a certificate. The notes will say what was changed, the documents used to justify the amendment, and the date the amendment was made.

To file an amendment, you complete the amendment form, which can be found on the MDH website, http://www.health.state.mn.us/divs/chs/osr/bamendia.pdf

Along with the completed form, you need to send in documentation that reflects the correct information about you. The documentation you provide must show the information exactly as you want it to appear on your amended birth certificate. For an adult over age 7, these documents will have to be 7 years old or older. Some acceptable forms of documentation are:

Authenticated school record or official transcript
Authenticated hospital or clinic record
Valid passport
Original or certified copy of a US military discharge (DD214)
Certified copy of a marriage certificate
Certified copy of a birth certificate of a child
Baptism certificate or other church record with a phone number for the church to the record may be verified.
Original or certified copy of a naturalization certificate
Official tribal enrollment record
Certified copy of a court order

Each document must be legible and in English or submitted with a notarized English translation. Each document also must not show any sign of alteration, erasure, or change of pertinent information. Documents like a driver’s license, Social Security card, tax returns, pay stubs, etc are NOT acceptable forms of documentation.

Once you have gathered the documentation and completed the amendment form, you send the information and payment to:

Minnesota Department of Health

Central Cashiering Vital Records

P.O. Box 64499

St. Paul, MN 55164-0499

You can also contact the MDH at health.amend@state.mn.us or call 651-201-5990.

This column is written by the Senior Citizens’ Law Project. It is not meant to give complete answers to individual questions. If you are 60 years of age or older and live within the Minnesota Arrowhead Region, you may contact us with questions for legal help by writing to: Senior Citizens’ Law Project, Legal Aid Service of Northeastern Minnesota, 302 Ordean Bldg., Duluth, MN 55802. Please include a phone number and return address. To view previous articles, go to: www.lasnem.org. Reprints by permission only.

July 2015 - my son and his wife disagreed with me over an unrelated issue and now won’t let me see my grandchildren.

Dear Senior Legal Lines,

My son and his wife have two lovely children and I enjoy spending time with them. Unfortunately, my son and his wife disagreed with me over an unrelated issue and now won’t let me see my grandchildren. I think my son and his wife are being very immature and inappropriate. Do I have any legal rights to see my grandchildren?

Lynn

Dear Lynn,

I’m sorry to hear that your relationship has broken down between you and your son and his wife. It’s unfortunate that they are withholding your grandchildren from you. Under Minnesota law, grandparents do not have automatic rights to see minor grandchildren (less than 18 years of age). In some circumstances, a grandparent can establish those rights by court order. Without such a court order, the parents decide who the minor children associate with.

I strongly suggest that you make an honest and diligent effort to patch things up between you and the parents before resorting to court-ordered remedies. If you resolve whatever differences you have with your son and his wife, they may allow you to see the grandchildren again. If you don’t, and you drag your son and wife into court, you will create bad feelings that will perhaps never fade. That said, Minnesota Statutes Section 257C.08 allows a person, including a grandparent, to bring an action for court-ordered visitation of a minor child if one of the following four facts is present:

1) A parent is deceased. If so, the other parent and grandparents of the deceased parent may seek visitation.

2) Family court is already involved with the family. For example, the parents have had or started a divorce, custody, or parentage proceeding.

3) The grandchild lived with grandparents or great-grandparents for a period of 12 months or more, and was then removed from the home by the minor’s parents.

4) If a minor has resided in a household with a person, other than a foster parent, for two years or more, no longer resides with the person, and emotional ties created a parent and child relationship between them.

Please note: There are different rules within this law dealing with children that had been adopted.

If one of the four facts is present, the court will consider the grandparent’s petition for visitation. The court will then look at whether the grandparent visitation would be in the best interests of the child, whether it would interfere with the parent-child relationship, and how much personal contact the petitioner has had with the child prior to the petition for visitation. In addition, the court also has to consider jurisdictional requirements, including how much time the child and the parties have lived in Minnesota.

I am not aware of any forms you can use to start your own petition for court-ordered visitation. That means you’ll probably have to seek advice and representation of an attorney. Generally, the Senior Citizens’ Law Project does not have resources to represent people in such matters unless the health or safety of the minor child is in immediate jeopardy. If you observe abuse or neglect, you can call the county and request Children In Need of Protection or Services (CHIPS) involvement. Many private family law attorneys are available to discuss these matters and may represent you in a visitation case. Before resorting to court, I again suggest that you first try to resolve your disagreement with your son and wife.

June 2015 - My wife lives in the nursing home and is unable to come home because of her severe dementia.

DEAR SENIOR LEGAL LINE:

My wife lives in the nursing home and is unable to come home because of her severe dementia. My wife and I currently pay for her care with our income and some of our savings because we have too many assets to be eligible for Medical Assistance. We were told that we can reduce our assets by buying things for ourselves. The roof shingles on our house need to be replaced. I’d like to spend down our assets by fixing the roof, getting new carpet, and buying a better car. Can we use our money to do these things without messing up our future eligibility for Medical Assistance? I should mention that we set up our house into a life estate, with our daughter as remainder person, in 2000.

Signed,

Alvin

Dear Alvin,

Medical Assistance (MA) also known as Medicaid, is the cooperative health care program that helps pay for long term care. It’s a complicated area of law because it is governed by both federal and state laws. For this reason, I encourage everyone to seek individual advice on their own situations. Do not rely on this article as legal advice.

For those who may not know, Medicare does not pay for long term care, such as the care Alvin’s wife is getting in the nursing home. Until Alvin and his wife spend down their assets to their eligibility limit, they have to use their own money to pay for her care. Most folks can’t afford to do this indefinitely, so about one month or two before reaching the asset eligibility limit (about half the countable assets plus $3000), they will apply for MA.

Spending down excess assets can be dangerous – if the county views the expenditures as gifts (also known as “uncompensated transfers”), the gifts will cause ineligibility for MA for a period of time based on the value of the gifts. However, Alvin, if you and your wife spend down by getting fair value for your money, it won’t be viewed as a gift and you will successfully spend the excess assets down so that your wife can get on MA faster and enable you to fix your house and get a better, more reliable car.

One car is not counted, so you can trade in your old car for a new one. The car should be in your name, Alvin, and will be used by you, so you will get fair value for the money you spend on it. The car is not a gift to anyone.

The shingle and carpet replacement can be a little trickier to analyze. It’s great that you and your wife set up the house in a life estate in 2000 because the remainder interest you transferred to your daughter is well outside the 61 month look-back period and will not cause any gift problems for your MA eligibility. Further, it was done before August 1, 2003, so no MA lien can be enforced on it after you and your wife pass away. However, with life estates, anything that is done to the home may be viewed as an improvement. The tricky part is whether the county will view the shingle and carpet replacement as repairs or as improvements. With life estates, the county views improvements to homes as gifts to remainder people, since they will reap the benefits of the increased home value. Repairs are not gifts because you are restoring the home to a prior condition.

Perhaps you can argue that the roof needed new shingles to keep the rain out of the house. Similarly, if the carpet is getting worn out, it becomes a tripping hazard. The life tenants (you and you wife) are getting fair value for the repairs. Repairs needed to be done. You and your wife, as the life tenants, have a duty to maintain the home in good condition for the remainder person. However, it can be hard to prove fair value and anything that could look like an improvement will generally get more attention from the county. Since your wife will need MA within 61 months, it would be safer to use similar shingles and similar carpeting as you had before. You could run your plan by the county to see if they would consider new shingles and new carpet to be repairs or improvements. If you do the repairs and later are denied MA because the county views them as improvements, you can appeal the denial. To prove your case, keep receipts of everything purchased for the home, contracts with contractors, statements about condition of the old shingles and carpet, and anything else to show how rotten the shingles and carpet were. Take pictures before the shingles and carpet are removed. You may even wish to save a sample or two of the old shingles and carpet. I wish you and your wife all the best.

May 2015 - My car needs repairs, but I’m feeling overwhelmed.

DEAR SENIOR LEGAL LINE:

My car needs repairs, but I’m feeling overwhelmed. How do I choose a good mechanic? The price of car repairs is so high. How do I know if I am getting a fair deal? My friend had a problem with a bad mechanic and I don’t want to end up in the same situation.

What can I do to be informed and protect myself?

Sincerely,

Adeline

Dear Adeline,

Getting your car repaired is a stressful, but with a little knowledge and homework on your part, you can minimize your stress and potential problems.

The first thing to do is to find out if your car is covered by any warranties or a dealer service contract. If so, these documents may dictate where you bring your car for repairs in order for your repair costs to be covered by the warranty or service contract. If you go to a different mechanic without permission under the warranty or service contract, then you may be liable for the full cost of the repairs.

If you do not have a warranty or service contract, you are free to choose a mechanic on your own. Of course, you also have to pay for the cost of repairs, so it’s important to choose wisely. Keep in mind, it is important to find out how much the repairs will cost up front so you can tell if you can afford to get the car repaired. If you do not pay for repairs, the repair shop may have a right to keep the car until the costs are paid or the problem is otherwise resolved. However, don’t use price as the only consideration. Consider the talents, professionalism, and reputation of the mechanic and repair shop.

When choosing a mechanic, get recommendations from family, friends, co-workers, and others. Websites exist that review and comment on repair shops and mechanics in your area. As with anything on the Internet, be skeptical of claims on websites and use unbiased sources as much as possible. Go talk with multiple repair shops to get a better understanding of their turnaround times, pricing, and customer service.

Some shops have different specialties, such as certain make or model of vehicles that they work on, while some shops may specialize in body work instead of engine work. Make sure the shop you choose can perform the repair you need. Mechanics come with different specialties and credentials as well. You can ask the shop and/or mechanic if the mechanic has been certified by any programs, such as the National Institute for Automotive Service Excellence (ASE), which should boost your confidence that they can perform the repairs.

Ask if the mechanics work on commission. When on commission, a mechanic may have an incentive to do more than the needed repairs. If a repair shop recommends a repair you are uncertain about, you can take it to a shop that specializes in diagnosing cars, not repairing them. Since these specialized shops don’t make repairs, they don’t have an incentive to recommend unneeded repairs.

In Minnesota, the Truth in Repairs Act says that you have the right to get a written estimate from a repair shop before any work is actually done on your car. Get several estimates from different repair shops to compare costs.

A repair shop cannot make any unauthorized repairs. Tell them not to make any repairs unless the repair was included in your estimate. The Truth in Repairs Act says that a repair shop generally cannot charge more than 10% above the estimated cost. During the repair, the shop may discover that additional work needs to be done, but the shop cannot perform those repairs or increase the price on the estimate without speaking to you first, getting your permission to do the new work, and then providing an updated estimate.

After the work is completed, repair shops are required to give you a receipt or invoice. You can ask the shop for an itemized list of the parts that were replaced, their cost, and the labor charges. Make sure you document all the communication between you and the shop. Get and keep the paperwork, such as the estimate(s) and invoices. Get the names of the people at the shop you talk to, log your contact with the repair shop and what was said at each contact and who said it. If a dispute arises, knowing this information will be helpful to you.

If you wind up having a problem with a repair shop, speak to the manager or owner of the shop. They may have procedures in place to deal with customer disputes. If you can’t resolve the dispute, you can file a complaint with the Minnesota Attorney General’s office. The Attorney General’s office may be able to help. You can also get a copy of the Minnesota’s Car Laws booklet for free from the Attorney General’s office. If those attempts don’t work, you may file a claim against the repair shop in conciliation court or district court. However, doing your homework on finding a reputable mechanic and repair shop will greatly reduce the chances that you will have a dispute.

April 2015 - I have lived in my apartment for 12 years.

DEAR SENIOR LEGAL LINE:

I have lived in my apartment for 12 years. I understand that I cannot smoke in any halls or common areas of the apartment building. A couple years ago the landlord changed the rules and now I cannot smoke inside my apartment. I have tried to comply but as I get older it’s getting more difficult for me to get outside every time I want to smoke a cigarette, especially in the winter time.

I was written up last winter for smoking in my apartment. I did not deny that allegation and since then I do not smoke in my apartment at all. Recently somebody made a complaint that I was smoking in my apartment.

I am worried that I might be in trouble with the landlord because of false complaints of

Sincerely,

Gladys

Dear Gladys,

You are correct that smoking is prohibited in indoor

common areas in Minnesota since the passage of

the Freedom to Breathe (FTB) law in 2007. Indoor

common areas are spaces that can be used by any

tenant and include hallways, offices, entrances, laundry

rooms, party rooms, exercise rooms, public restrooms,

common garages and any other common area.

The FTB does not prohibit outdoor smoking.

Building owners or landlords can enforce a more restrictive

policy such as prohibiting smoking anywhere in the building,

including inside apartments and areas outside of entryways.

No-smoking policies and rules have evolved because of the

fire dangers and the negative effects of secondhand smoke.

This is especially true in buildings where older adults live with

breathing issues. People have no right, constitutional or

otherwise, to smoke inside their apartment or rented home.

A landlord does not have to bend the rules for a smoker

because having a smoking habit is not classified as a

disability and does not, on its own, lend itself to

“reasonable accommodation” in the lease terms and rules.

The no-smoking policy should be posted or stated in the lease

and in the resident’s handbook, if any.

If you are falsely accused and/or “written-up” by the landlord for

smoking, you have options. If you are aware that allegation,

you can contact the landlord and to object to the false

allegation. You should file a written objection, dated and

signed, and have it put in your tenant file. You could offer

your apartment for inspection, showing that there is no

smoking and no evidence of smoking going in your apartment.

If the landlord tries to evict you for smoking, take advantage

of any internal appeals process available to you.

For example, if you live in HUD-subsidized housing, you

should have an opportunity to resolve the matter in an informal

conference and perhaps a formal hearing, depending on the

housing program. Act quickly to object and appeal a false allegation

that you smoked in the building. You can contact your legal aid office

or other attorney for more specific advice.

In your case, you have one true instance of smoking in the

building. The problem is that even one incident of smoking

in the building will alert your neighbors that you are a smoker.

In the future your neighbors will presume that any smoke smell

in the hallway is coming from your apartment and other complaints

might be brought against you. Violating the no-smoking policy

is serious and can be used to evict you. You stated that you

had a difficult time going outside to smoke in the winter, so

you did smoke one time in your apartment. Keep in mind,

you can be evicted in the winter, and any time of the year,

for violating your lease.

A good practice is to abide by the no-smoking policy, either

by only smoking outside in designated areas or not at all.

Do not allow your visitors to smoke in your building.

That way you don’t set yourself up for more false allegations

against you. If such false allegations are made against you,

you must object in writing and then if you face eviction because

of the false allegation, you must appeal. It is difficult to prove

that you do not smoke in your apartment because it is difficult

to prove a negative. Be prepared to offer your apartment to

inspections for indications of smoking in your apartment.

Perhaps you could resolve it with an agreement with the landlord

that you will allow inspections during a “probation period”.

If you did smoke in the apartment or other parts of the building

and can link the smoking to a physical disability or mental illness

that is corroborated by a health professional, you can try to get a

“reasonable accommodation” in the rules as long as you have a

plan in place to avoid violating the no-smoking policy in the future.

A plan could be to quit smoking under the direction of

your doctor, including smoking cessation methods

and/or prescriptions, coupled with a probation period

with inspections.

The best practice is to quit smoking altogether.

Cigarettes are increasingly expensive and will drain

your money. They also drain your health. The

American Lung Association reports on their website

that quitting for older adults has beneficial effects,

even at a late age: “When an older person quits smoking,

circulation improves immediately, and the lungs begin to

repair damage. In one year, the added risk of heart disease

is cut almost in half, and risk of stroke, lung disease, and

cancer diminish. Among smokers who quit at age 65, men

gained 1.4 to 2.0 years of life and women gained 2.7 to 3.4 years.”

There are many resources to help you quit including those

from individual health care insurance. Minnesota has a

free resource to help people quit smoking called

QUITPLAN (1-888-354-PLAN or 1-888-354-7526).

March 2015 - My grandson came to my house yesterday and asked if I could be a co-signer on his new car loan.

DEAR SENIOR LEGAL LINE:

My grandson came to my house yesterday and asked if I could be a co-signer on his new car loan. He doesn’t have good credit and I still work a good-paying, full-time job. My grandson promises to make the monthly payments, but I am nervous because he has a lot of credit card debt. What should I do?

Signed, Harlan

DEAR HARLAN:

Stop and carefully consider whether your grandson and you can afford the loan. It is hard to resist helping a family member in need, but when it comes to money matters, you have to think of yourself. Your grandson’s history with debt may predict that he will again fail to make payments, leaving you liable for the loan. Perhaps it is wise to listen to your nerves and not co-sign the loan.

Can you afford to pay the loan? When you co-sign a loan, you are putting yourself on the hook for repayment of that loan when the primary debtor fails to pay. Your grandson may not be able to afford the loan, much less all the other costs associated with owning a car, such as insurance. Can your grandson show you that his income is steady and that the loan fits his budget? Why hasn’t he asked closer family members, such as his parents? Could it be that he has already defaulted on loans with family members?

Does your grandson need that particular car? Perhaps your grandson could afford a less expensive or used car without a co-signer.

Both of you should know what will happen if the loan isn’t paid. The car may be repossessed. Once repossessed, the lender will auction it off at a price that will most likely not pay off the loan. The difference between the loan and the sale proceeds is called the “deficiency” amount, and you and your grandson are liable for it.

The lender then may try to sue you for the deficiency amount, in order to convert the amount into a judgment. A judgment lasts for at least 10 years and will automatically become a lien on any real estate you own in the county in which you are sued. A lien on your home will not be foreclosed while you live there. However, the lender has other ways to collect on the judgment. The lender might try to garnish your wages or bank account, looking for unprotected money. Some forms of income are protected from collection, but some are not. Any wages over $290 net per week are not protected and can be taken in a garnishment. Your wages are probably high enough to be garnished. However, if you get “government benefits based on need”, the government benefits will protect any income, at least for awhile. Government benefits can include Food Support (food stamps), Energy Assistance, Medical Assistance, MFIP, among others.

Also, it may be unwise to co-sign the loan if you think you may need help paying for long term care within the next 5 years. if you do not get the benefit of the car (e.g. free use of it), your loan payments on behalf of your grandson might be considered gifts from you to your grandson under the Medical Assistance rules (the program that pays for long term care), which may cause you to be ineligible for Medical Assistance should you apply for the program within 61 months of the gifts.

You want to help your grandson, but think carefully before you put your income and assets at risk by co-signing the loan. You should not feel pressured into co-signing the loan. You should only do it after you and your grandson carefully consider the affordability of the loan, determine that both of you can afford to pay the entire loan on your own if needed, and that the loan won’t cause any adverse collateral consequences.

February 2015 - I am confused about if and how I should file my taxes..

DEAR SENIOR LEGAL LINE:

I am 69 years old. I retired from my job in 2013 and started collecting my Social Security benefits. Now that it is my first year with only Social Security benefits as my income, I am confused about if and how I should file my taxes.

Signed, Nettie

DEAR NETTIE:

Seniors like you, age 65 and older, often have questions about their income tax obligations. Because your income has changed, you have questions and concerns about what will be taxed, how it needs to be reported, and what credits you may qualify for. This article will focus on Minnesota taxes. This and other information can be found in “Seniors’ Tax Issues, Fact Sheet 6” from the Minnesota Department of Revenue.

Social Security income is taxed by the State of

Minnesota the same way it is taxed on your federal

return. If your only income is Social Security,

you do not have to file an income tax return. If you

have questions about whether your Social Security

income is taxable, go to the Internal Revenue

Service’s website at www.irs.gov or call

1-800-829-1040. You can also find answers from

a tax professional and/or a local tax advice clinic. To

find a tax advice clinic in your area, call 211.

During February 15 – April 15, you can call the

Minnesota Department of Revenue at 651-297-3724

or 1-800-657-3989 or visit their website at

www.revenue.state.mn.us to get a list of locations of

tax clinics within your zip code area.

If you are a Minnesota resident and you are required to file a federal income tax return, you must also file Minnesota Form M1, the Individual Income Tax Return. When you file your Form M1, you use the same filing status that you use to file your federal tax return.

If you are not required to file a federal return, then you do not have to file a Minnesota return. However, if Minnesota taxes were withheld from your income or you paid an estimated tax, in order to request a refund, you must file Form M1.

Now that you are retired and have a different filing status, you may want to speak to a tax professional to see if you qualify for any new refunds or credits.

There are credits for homeowners, renters, charitable contributions over $500, long term care insurance premiums, etc.

There is also a credit called the Minnesota Dependent Care credit. This is not only for those with minor children, but it is also available to those with a disabled spouse or disabled dependent that has lived with you for more than half the calendar year.

Let’s switch gears to property taxes. If you can’t afford to pay your property taxes now that your income has changed, there is help. As a senior, 65 or older, you might qualify for the Senior Citizens Property Tax Deferral Program. If you meet the eligibility requirements of this program, your portion of your property tax payment will be no more than 3 percent of your household income each year. The state will loan you the remaining amount—the deferred tax—and the state pays it directly to the county you live in. If you move or pass away, you or your estate then must pay the deferred tax, plus interest, back to the state. Also, any property tax refunds or other refunds will be applied to the deferred property tax amount. If you participate in the deferral program, a tax lien will be placed on your property. You, or your heirs, will need to repay the deferred amount before you can transfer title of the property.

January 2015 - I am 68 years old. My income is Social Security retirement benefits.

DEAR SENIOR LEGAL LINE:

I am 68 years old. My income is Social Security retirement benefits. I have a daughter, who is now an adult. When my daughter was born, I was ordered to pay child support, but I fell behind in the payments years ago. Child Support takes the monthly payments directly out of my Social Security check. I have now paid off all of the child support, but money is still coming out of my Social Security check. How can I stop this?

Signed, Roberto

DEAR ROBERTO:

When you fall behind in your child support payments, you owe an “arrears” amount.

Because you were not making your child support payments, the child support office sent the court order to the Social Security Administration (SSA), telling them to garnish your Social Security benefits for the arrears. Normally, Social Security is a protected income from debt collectors, but child support is a special kind of debt. The legislatures have decided that it is important for children to be supported by their parents, so they wrote laws allowing garnishment of normally protected income. Thus, as you know, Social Security is not protected from garnishment for child support. Child support arrears stay with you until you pay the arrears or you pass away.

Because you calculate that you have paid off the arrears, the first thing you should do is contact the child support office that handles your child support case. You need to speak with them and confirm that your child support obligation is actually done because you have paid all of the arrears.

When you speak to child support and they confirm you are done paying, you will need to ask them to send a Stop Order to the SSA. Because the SSA started taking the money out of your checks with a court order, they need to receive another order for them to stop the garnishment of your checks.

The child support office can send SSA a stop order, letting them know that you have fulfilled your child support obligation and to stop taking the monthly payments out of your checks. Once the stop order is received by SSA, the garnishment will stop.

Because SSA doesn’t stop automatically when the child support order has been fulfilled, there may have been payments garnished that are over and above the amount you owed. If that happens, any overages that the county received from SSA, should be refunded to you.

December 2014 - The other day, my neighbor Jacob came over and cut down one of my spruce trees to use as his Christmas tree

DEAR SENIOR LEGAL LINE:

I am 71 years old. I live on a wooded property that I have owned for 40 years. The other day, my neighbor Jacob came over and cut down one of my spruce trees to use as his Christmas tree. Jacob and I have had issues in the past and I have told him he is not welcome on my land. I put no trespassing signs up last year. What can I do?

Signed, Ebenezer

DEAR Ebenezer:

It’s hard to keep the holiday spirit going when someone damages your property.

The first thing to remember is to not do anything rash. I know this is frustrating to you. You do have some options but you also have some things to think about.

First, you may want to think about talking to Jacob about this problem. You could maybe use this as an opening to mend your neighborly relationship. Perhaps Jacob was unsure if the tree was on your property or his. Or maybe you could ask Jacob to pay you for the tree that he cut down. You could even tell Jacob that even though you wish he would have asked you first, you consider the tree to be a gift to him, in order to forge a bond between you both. If you are not comfortable talking to Jacob on your own, you could hire an attorney to talk for you or ask that he come to a mediation session to resolve the situation.

If talking to Jacob or mediation aren’t options you wish to try, you may also sue Jacob in conciliation court for value of tree and any other damages you incurred. Conciliation court can handle cases that consider damages of $15,000 or less. Of course, you could sue in district court, but the filing fee and your time and other expenses will be greater. No matter which court you want to sue in, you need to consider some things. You need to have proof that Jacob took the tree. If you do not have proof and you lose, the court will probably award Jacob his costs to defend himself, including his attorneys fees. Did Jacob tell you that he took the tree? You also need to figure out what your damages are. Did Jacob damage your land when he removed the tree? What is the tree worth? Minnesota Statutes Section 548.05 says that you can sue someone for the theft of wood, timber, lumber, hay, etcetera, after someone trespasses on your land. The statute allows you to ask for “treble damages”, meaning you can multiply the value of the tree (and any other damages) by three. While the prospect of tripling your possible recovery may be tempting, bear in mind that there are costs associated with a lawsuit. Your strained relationship will become more strained. After all, you will both probably continue to be neighbors, so perhaps you would rather try to resolve the problem in a way that repairs your relationship (e.g. mediation). Also, as with any lawsuit, Jacob, as the defendant, may try to bring up old ghosts of troubles between you in some form of counterclaim. Further, even if you win, perhaps Jacob will not have anything you can collect from him to pay off the judgment.

You may also try to sue him for civil trespass if he came onto your land without permission, but consider the same types of things I discussed above.

Another option is to report this to the police to see if Jacob would be charged with a crime, perhaps theft and/or criminal trespass. It will be up to the prosecutor to decide if there is enough evidence to bring any criminal charges against Jacob. Again, consider what proof you have that Jacob trespassed and took the tree and consider ways to resolve the damages and heal your relationship.

November 2014 - I am 92 years old. My daughter Julie is my Power of Attorney

DEAR SENIOR LEGAL LINE:

I am 92 years old. My daughter Julie is my Power of Attorney and has been for many years. Julie and I are not getting along and I don’t want her to be my Power of Attorney anymore. I would like to name my son instead. What can I do?

Signed, Clara

DEAR CLARA:

As the principal of your Power of Attorney document, you are in control. You get to decide who your agent is. Your agent is supposed to follow your wishes. If you don’t want Julie to be your agent anymore, there are things you can do to change that. But do not act in haste. It may be wise for you and Julie to talk about what is bothering you before you make a decision about your Power of Attorney document. Perhaps Julie doesn’t know that you are unhappy with her performance as your agent. Perhaps she will change her ways after learning of your unhappiness.

If you don’t think it is necessary to talk to Julie or if you have and it didn’t work out, you can revoke the Power of Attorney that named Julie as your agent. To revoke a Power of Attorney, you need to fill out a Revocation form and sign it in front of a notary public. Be careful – the revocation is not complete until Julie has actual notice of the revocation. “Actual notice” means that Julie actually gets the revocation. You can prove that she got the Revocation by sending it to her via registered mail or giving it to her when you are among witnesses. Always keep a copy for yourself. Once Julie gets the revocation, the revocation is complete. To be safe, you should also give a copy of the revocation to any place you think might have a copy or knowledge of the Power of Attorney that named Julie as your agent. For example, give your bank a copy of the revocation for their files, in case Julie continues to try to gain access to your accounts. With the copy of the revocation, your bank will know that Julie has no authority in your financial matters and the bank should block her access to your accounts and keep your account information private.

In the alternative, instead of revoking the Julie Power of Attorney, you can have a co-existing Power of Attorney naming your son, but this is probably not wise. You would be setting your children up to argue with one another. Such dueling Powers of Attorney will confuse your bank and other places that get both Power of Attorney documents. Under the law, they have to honor a Power of Attorney that is valid on its face, so things would get very confusing if Julie and your son contradict one another. In my view, it’s probably better to have one Power of Attorney and revoke the other one.

There are ways you can put both of your children on your new Power of Attorney document, such as having them be joint agents (making decisions together) or having one be a successor agent when the primary agent cannot act.

Note: If Julie is also your health care agent in your Health Care Directive, you should consider creating a new Health Care Directive naming a different agent.

You can see Clara, that there are many ways to deal with your dissatisfaction with Julie. No matter what you decide, it would be wise to talk to an attorney about your options in more detail before you act.

October 2014 - I am 75 years old and have the opportunity to travel to Finland this spring.

Dear Senior Legal Line:

I am 75 years old and have the opportunity to travel to Finland this spring. I want to take about two months to visit my Finnish relatives, but I am wondering how this travel will affect my Medicare and Social Security Retirement benefits, if at all. I am a US citizen.

Signed,

Olga

Dear Olga:

Retirement is the perfect time for foreign travel, but you are wise to consider your benefit programs before you go. You will continue to receive your Social Security Retirement benefits while you are gone, but Medicare will not pay for any healthcare costs you may incur while you travel in Finland. If you have a supplemental health insurance policy (also known as a “Medigap” policy or a Medicare C through J supplemental insurance policy), you should check to see if it covers health care costs in foreign countries. If the supplemental policy does not cover health care costs in foreign countries, you can purchase a policy that does.

I will list a few of the common benefit programs and how foreign travel affects a person’s eligibility and/or receipt of benefits. A wise person will inform every agency that handles their benefits that they intend to be temporarily absent from the country.

Medicare: Generally, Medicare will not pay for health care outside of the United States. The United States includes all 50 states, District of Columbia, Puerto Rico, US Virgin Islands, Guam, Northern Mariana Islands, and American Samoa. However, in rare circumstances Medicare will pay for healthcare outside of the United States: (1) emergencies you have while in the United States but where a Canadian or Mexican hospital is closer than the nearest United States hospital; (2) for healthcare as you travel from a direct route through Canada from Alaska to a US state and a Canadian hospital is the nearest one that can treat you; or (3) a doctor treats you on a ship that is within 6 hours from the United States. As you can see, these exceptions won’t help cover health care expenses during a trip to Finland. As stated above, most people cover themselves with one of the Medigap insurance plans sold by private companies.

Medical Assistance (also known as Medicaid or “MA”): Olga, you did not mention that you are enrolled in Medical Assistance or other Minnesota health care program, but many people are and you may be in the future. Minnesota allows MA recipients to be outside of Minnesota without losing eligibility, as long as the absence is temporary. After the reason for the temporary absence is ended, you have to return to Minnesota. A vacation can be a temporary absence that does not affect eligibility, but you have to tell the county about the vacation before you go. They need to know the dates you intend to leave and return and the reason for the absence.

MA will not pay for healthcare expenses outside of the United States, but it might pay for some health care expenses while travelling in other US states (e.g. medical emergencies or when your health would be endangered to wait to get back to Minnesota for healthcare). Olga, if you are a MA recipient, contact your county financial worker. Because you intend to return home to Minnesota after your trip to Finland, you are gone temporarily, so you should not be kicked off of MA, but MA will not pay for healthcare for you while you are in Finland.

Social Security Retirement and Social Security Disability: As discussed above, these benefits will continue while a United States citizen travels outside the United States. However, the federal government cannot send benefit checks to certain countries. This obviously only affects you if you plan to go to one of those countries and stop your direct deposit of your benefit check to your local Minnesota bank account. The federal government considers you to be outside the United States once you have been outside the country for 30 days. The Social Security Administration will continue to send out benefit checks to US citizens in foreign countries for as long as the US citizen remains eligible for the benefits. However, the SSA can’t send the checks to you in Cuba, North Korea, and generally will not send checks to Cambodia, Vietnam, parts of the former Soviet Union (other than Armenia, Estonia, Latvia, Lithuania, and Russia). Of course, the checks can continue to be directly deposited in your US bank account. The SSA will send your benefit check to you in Finland, and the US embassies in Finland have people that are trained in Social Security services, but perhaps it is better to keep your benefit check directly deposited to your local bank. Even though your trip to Finland will not affect your Social Security Retirement benefits, it is wise to contact the Social Security Administration to inform them that you will be out of the country for more than 30 days.

Supplemental Security Income (SSI): The Social Security Administration also handles SSI benefits. In contrast to Social Security Retirement and Social Security Disability benefits, SSI benefits are not based on your work record. SSI is a needs-based program, meaning you have to have low income and low assets to get SSI. If you get SSI and leave the United States for more than 30 days, your SSI benefits will stop and will not start up again until you are back in the United States for at least 30 days. If you need continuous benefits in order to pay for your living expenses (e.g. housing costs), you should limit your vacation to less than 30 days.

It is very important that you tell the Social Security Administration about your vacation if you plan to be outside the United States for more than 30 days. If they don’t know and your SSI benefits continue to be paid to you while you are outside the country for more than 30 days, you will get an “overpayment”. An overpayment will cause the SSA to reduce or stop your benefits altogether until the overpayment is paid back.

If you are on any program based on need (like SSI or MA), you also should not pay for anyone else’s travel expenses. (If you need a nurse to travel with you, their expenses may be okay to pay, but do not do so without speaking to your financial worker and/or an elder law attorney). Do not pay for anybody’s tickets, hotel, dinners, etc. You should only pay for your own expenses. If you pay for other people’s expenses, these payments will be viewed as gifts (also known as “uncompensated transfers”) and will probably cause ineligibility for your needs-based programs.

Finally, if you live in subsidized housing, be sure to inform your landlord that you will be temporarily absent, to see if the length of your planned absence complies with the housing policy governing your housing. In general, it is good to tell any kind of landlord that you will be gone and how they can reach you. Also, continue to pay your rent and/or mortgage while you are travelling.

Have a good time on your travels!

This column is written by the Senior Citizens’ Law Project. It is not meant to give complete answers to individual questions. If you are 60 years of age or older and live within the Minnesota Arrowhead Region, you may contact us with questions for legal help by calling: 218-623-8100 and complete the intake process. Senior Citizens’ Law Project, Legal Aid Service of Northeastern Minnesota, 302 Ordean Bldg., Duluth, MN 55802. To view previous articles, go to: www.lasnem.org. Reprints by permission only.

September 2014 - My wife and I are approaching retirement age and thinking of moving out of state.

Dear Senior Legal Line,

My wife and I are approaching retirement age and thinking of moving out of state. Some people I know and some articles I’ve read say that other states have better tax advantages. If this is true, are there other things that Minnesota does better than other states? Are services for older adults equivalent from state to state? How well does Minnesota rate?

Sincerely,

Edgar

Dear Edgar,

A 2014 report called “Raising Expectations”, done by AARP, The Commonwealth Fund, and the SCAN Foundation found that where you live really does matter in terms of services for older adults. Long-term services and supports (LTSS) refers to the types of assistance provided to people with functional or cognitive limitations to help them perform routine daily activities. LTSS promotes independence among older adults and people with disabilities, and provides support for the family members who help them. The report found very large differences across the states in how well they do this job. Minnesota ranked first amongst the 50 states in providing the best services and supports.
The report measured state systems of Long-Term Services and Supports (LTSS) performance in five areas: (1) affordability and access, (2) choice of setting and provider, (3) quality of life and quality of care, (4) support for family caregivers, and (5) effective transitions.

Howard Gleckman, contributor to Forbes Magazine commented on the report, “Two main trends jumped out at me: The first was the consistency within the best and worst states. Those eight top-ranked states did well across the board. And the bottom six were consistently below average across all of AARP’s indicators. The other was the tremendous variation among states. The best states were far better than the worst. The gap was, in fact, enormous.”

One measurement was affordability and access to services. The report found “when costs are high for people who pay privately and do not have long-term care insurance, they will more quickly deplete their life savings and turn to the public safety net. If that safety net is inadequate, people may rely so heavily on family caregivers that those caregivers damage their own health and well-being.” These services are not cheap, but Minnesota ranked very well in affordability and access to services.

People want to stay in their home. The higher-rated states in the report put more resources to care in homes and other community based settings (HCBS). “The range of state variation is enormous. The top five states allocated an average of 62.5 percent of LTSS dollars for older people and adults with physical disabilities for HCBS, nearly four times the proportion in the bottom five states, which allocated an average of just 16.7 percent.” That means you’ll be able to stay in your home, and get services, far longer in some states.

“States that are committed to serving people in their own homes (or a homelike option) develop policies and procedures to make that possible. When that infrastructure is not in place, people have no choice but to enter an institution because they cannot wait weeks or months for services to be approved and delivered.” In the top five states, 77.6 percent of people needing the services were served in home and community-based services (HCBS) settings. That is very different than the bottom five states, in which only 25.6 percent of new LTSS users were served in HCBS. That means some states have less options and people end up in a nursing home.

The report scorecard shows that states that rely heavily on nursing homes were not as able to move people out the nursing homes as successfully. This inability to move people out of nursing homes successfully resulted in inappropriate and costly hospitalizations and inadequate support in moving from a nursing home back into the community.

There were also big differences of nursing home residents that ended up in the hospital. “In the top five states, 10.3 percent of nursing home residents were hospitalized, almost a third the level in the bottom five states, which averaged 27.9 percent.” Any time a person has to move from their current care setting to a hospital it is called “burdensome transitions” because of likely negative effects on the moved person. The report showed this example, “In the top five states, an average of 9.3 percent of nursing home residents with moderate to severe dementia experienced a potentially burdensome transition at end of life, while the bottom five states averaged 34.8 percent, almost four times as high.” This means that in the lower ranked states you’re more likely to be moved around when you’re least able to handle it.

In some states you are more likely to stay in a nursing home longer and less likely to return home. The report found that people who enter nursing homes and remain for 100 or more days are far less likely to return home than are those who have shorter stays. “In the top five states, 12.9 percent of nursing home residents remained for 100 or more days, less than half the average (27.9 percent) in the bottom five states.”

The Report Scorecard also found dramatic differences in the availability of the Medicaid (aka Medical Assistance) safety net to people with moderate and low incomes and disabilities. This rate of access is very important, and is a strong indicator of overall performance within a state. “The average rate of coverage in the top five states (68 per 100 adults) was more than three times the average in the bottom five states (22 per 100 adults).” The ability of different states to accommodate people of moderate or lower incomes varies widely.

The top ranked states (1^st quartile) in this study were:

1 Minnesota, 2 Washington, 3 Oregon, 4 Colorado, 5 Alaska, 6 Hawaii, 6 Vermont, 8 Wisconsin, 9 California, 10 Maine, 11 District of Columbia, 12 Connecticut.

The lowest ranked states (4^th quartile) in this study were:

39 Utah, 40 Arkansas, 41 Nevada, 42 Pennsylvania, 43 Florida, 44 Ohio, 45 Oklahoma, 46 West Virginia, 47 Indiana, 48 Tennessee, 49 Mississippi, 50 Alabama, 51 Kentucky.

The Congressional Budget Office and June 2013 Report stated, “One study estimates that more than two-thirds of 65-year-olds will need assistance to deal with a loss in functioning at some point during their remaining years of life.” Those two-thirds of the population will need Long-Term Services and Supports (LTSS). Edgar, this means that you likely will need such services and support sometime in your life. When you consider moving out of state be aware that the services may not be as good as in Minnesota. I hope this information helps you make an informed decision.

The entire study and report is available at: http://www.longtermscorecard.org/2014-scorecard#.VAd2KfldXms.

This column is written by the Senior Citizens’ Law Project. It is not meant to give complete answers to individual questions. If you are 60 years of age or older and live within the Minnesota Arrowhead Region, you may contact us with questions for legal help by calling: 218-623-8100 and complete the intake process. Senior Citizens’ Law Project, Legal Aid Service of Northeastern Minnesota, 302 Ordean Bldg., Duluth, MN 55802. To view previous articles, go to: www.lasnem.org. Reprints by permission only.

August 2014 - I live in a home that I own and I also own another house that I am selling.

Dear Senior Legal Line,

I live in a home that I own and I also own another house that I am selling to my sister Ruth on a Contract for Deed. Ruth has been making faithful payments under the contract for years, but the final payoff is still years off. I’m starting to think about long term care needs and I am wondering if the Contract for Deed will affect my ability to get Medical Assistance. Ruth doesn’t want to go a get a traditional mortgage. What can I do?

Signed,

Aletha

Dear Aletha,

Contracts for deeds and Medical Assistance make for a complicated situation.

A contract for deed is a sales contract where, in this instance, Ruth is the buyer and you are the seller of your other house. At the end of the payments, you as the seller, will provide a deed to Ruth. At that point, Ruth will be the owner. A contract for deed is similar to a mortgage, but a private person (you), rather than a bank, owns the contract for deed. Also, the seller under a contract for deed can often sell the contract for deed to a third person or business. People feel like a contract for deed is less formal, but actually, Minnesota law has strict rules about their formation, enforcement, and termination.

While a contract for deed can be a convenient way to sell real estate, it can become complicated when the seller is facing long term care costs and wishes to get Medical Assistance. The County, who administers Medical Assistance, will treat a contract for deed in two ways:

The County treats the principal balance owed to the seller as a liquid asset. In other words, the County will count the balance as an available asset to you and count it against your asset limit unless you provide proof of making reasonable efforts to sell the contract for deed, or provide proof that there is no market value for a sale of the contract interest. In other words, you will have to do at least three things:

You will have to shop the contract around to at least two businesses that buy and sell contracts for deeds.
You will have to advertise the contract for deed for sale in the newspaper (the official county newspaper, the newspaper with the largest circulation in the county, or the local shopper newspaper).
Finally, you have to find out from a knowledgeable source (e.g. bank, real estate brokers) if the contract for deed could sell at more than 2/3 of its value. If the source says it will not sell for more than that, you can accept an offer of 2/3 the value.

As long as you making reasonable efforts to sell the contract for deed, it will not count against your asset limit.

The payments from Ruth to you will also cause problems. The interest part of the Contract for Deed is treated as income in the month of receipt and must be spent on care or medical expenses. The principal payment is treated as a conversion of assets and won’t be treated as income, but could put you above asset limits to qualify for MA benefits if it builds up your available assets. Unless your income and assets are very low and you spend the payments so that they do not build up, the payments could cause you problems.

You had talked to Ruth about getting a traditional mortgage, but she didn’t want to do that. Why would she? You and Ruth entered into a contract between one another and she is holding up her end of the bargain. You cannot do anything to force Ruth to pay early or to get a traditional mortgage. If Ruth misses a payment or otherwise defaults on the contract for deed’s requirements, then you have to follow Minnesota’s strict guidelines about terminating the contract. For example, you have to provide proper notice and give Ruth a chance to cure the default. If you wanted to be done with the contract for deed on your end, the only control you have is to sell the contract for deed to someone or a business that buys them, following the Medical Assistance rules. I do not know if it will sell. You can talk to the financial worker at the County for their opinion about you selling the contract for deed or keeping it.

This column is written by the Senior Citizens’ Law Project. It is not meant to give complete answers to individual questions. If you are 60 years of age or older and live within the Minnesota Arrowhead Region, you may contact us with questions for legal help by calling: 218-623-8100 and complete the intake process. Senior Citizens’ Law Project, Legal Aid Service of Northeastern Minnesota, 302 Ordean Bldg., Duluth, MN 55802. To view previous articles, go to: www.lasnem.org. Reprints by permission only.

July 2014 - I’m a senior living on Social Security and a small pension.

Dear Senior Legal Line,

I’m a senior living on Social Security and a small pension. I live in a subsidized senior apartment so my housing costs are affordable. However, I am having trouble making ends meet financially. I have medical costs and am paying credit card bills. Often times I do not have money left over towards the end of the month for adequate groceries. I am tried of being hungry! Can you help me?

Sincerely,

Gordy

Dear Gordy,

It may come as a surprise that of people 50 years or older in the United States, one person out of 12 does not have adequate food because they cannot afford to buy food. They are “food insecure” and they number 4.8 million people in the United States, according to the Universities of Illinois and Kentucky, using data from the National Health and Nutrition Examination Survey (NHANES). The researchers looked at data which indicated that food insecurity translates into poor health such as higher incidence of diabetes, high cholesterol, high blood pressure, heart attack, gum disease, and a host of other health problems.

This study also found that food insecurity rates were almost 3 times as high if grandchildren were present in the home. The assumption is that the grandparents are foregoing healthy diets in order to make sure that the grandchildren have enough to eat.

You may be able to get help to afford food. The Supplemental Nutrition Assistance Program (SNAP) is a federal program, administered by the counties, which provides low-income individuals with nutrition assistance. You may know the program by its old names, Food Support or Food Stamps. I encourage you to call your local SNAP office or 1-888-711-1151 to see if you qualify. Older adults (60 or older) fall under special eligibility rules, so if you didn’t qualify when you were younger, you may be pleasantly surprised now that you are older.

For some older adults it is not a matter of lack of money but instead how the money is spent. You indicated that you have medical expenses. Perhaps Medicare, Medical Assistance, and supplemental insurance policies would cover some of those medical expenses. To find out more about your options for health care coverage you should contact the Senior Linkage Line at 1-800-333-2433.

You said that you are paying credit card and medical bills rather than buying food. Credit cards and medical bills are unsecured debts. Unsecured debts have no collateral tied to them – if the debts are not paid, the creditor’s remedy is to sue the debtor and get a money judgment against the debtor. While most people want to pay all their bills, sometimes it’s just not possible. Most people know that they have an option of filing bankruptcy, but that costs money too. If you have protected income and assets, you have another option: stop paying the unsecured debts and stop using credit. If you stop paying your unsecured debt, you will have money that will help you to buy the food you need. Of course, once you decide to stop paying a credit card, you cannot use credit, as this may be a form of fraud. Be prepared to be sued because the creditor/collection agency wants a judgment in case you come into unprotected money. A judgment is good for ten years and may be renewed for another ten. However, federal and state law protects certain income and assets from collection. People that only have the protected income and/or assets are sometimes referred to as being “judgment proof”. Protected income includes Social Security benefits, Veterans benefits, and pensions, among others. Protected assets include one vehicle (with up to $4600 in equity value) and homestead property. If you decide to exercise this option, I would be happy to discuss this with you.

Gordy, you may have several options to decrease your medical or credit card costs and be better able to afford food. Another option may be to seek SNAP benefits. As the study showed, being able to afford proper nutrition increases your health and decreases healthcare expenditures. That’s a benefit to everyone! Please feel free to contact our office if you have more questions.

This column is written by the Senior Citizens’ Law Project. It is not meant to give complete answers to individual questions. If you are 60 years of age or older and live within the Minnesota Arrowhead Region, you may contact us with questions for legal help by calling: 218-623-8100 and complete the intake process. Senior Citizens’ Law Project, Legal Aid Service of Northeastern Minnesota, 302 Ordean Bldg., Duluth, MN 55802. To view previous articles, go to: www.lasnem.org. Reprints by permission only.

June 2014 - I went to Florida on vacation with my wife

Dear Senior Legal Line,

I went to Florida on vacation with my wife. While there, we were enticed to sit through a presentation about a timeshare. Well, the short of it is that we signed up for the timeshare. It seemed like a good idea at the time, but now I think we were just caught up in the moment – and the salesman was so smooth! Now, we realize that we will not be able to use the timeshare (one week per year), so we want to get out of it. Can we, and what happens if we don’t?

Signed,

Bob

Dear Bob,

While some people really like timeshares, most people spend their time trying to get rid of them. If you realize that you do not want the timeshare right away, most timeshare contracts have a window of time to cancel the contract. Usually, this window of time is only a few days long. Unfortunately, after the short “cooling off” period, timeshares are notoriously hard to get rid of. I assume that you are beyond the cooling off period and now appear to be stuck with the timeshare.

If this was a Minnesota timeshare, instead of a Florida one, the cooling off period does not start to run until you get a copy of the contract, and a copy of the public offering statement of the timeshare (if the project consists of more than 100 potential sales). See Minnesota Statutes Section 83.28. A public offering statement tells you more information about the timeshare company. To cancel it, in Minnesota, you have to send a written cancellation notice to the seller to the address in the contract. The cancellation does not have to be in a particular format and it is effective on the date of mailing. I do not know if Florida law is similar. Perhaps your cooling off period has not started if Florida has a similar law and you have not received everything in writing. I encourage you to contact the Florida attorney general’s office.

The first thing you have to do is to know what you bought. I presume you own a fixed week, because there was no deed to you. There are other kinds of timeshares like deeded property, life property, floating time, and points. If you do not know what you own, call the main office at the time share resort in Florida and ask for this information in writing.

Typically, a person pays over $10,000 for the timeshare and then has a contract to pay another sum per year for fees. Sometimes, if you are current on the fees, you may be able to convince the resort to take the timeshare back. Sometimes, the contract actually gives the resort a right to buy it back first, typically at a percentage of what you paid. For example, they might pay you 20% of what you bought it for in order for you to get rid of it.

What if the timeshare resort does not buy it back? Timeshares are a depreciating asset. There are always more sellers than buyers for timeshares. It is likely that you will lose money on the timeshare in order to get rid of it, but if you get rid of it, you will save yourself all those fees. It is also likely that the fees will increase over time as the condo gets older. If there is a fire or other damage to the condo that the insurance does not cover, there may even be risk that you will have to help pay for repairs. In other words, even if you take a big hit in getting rid of the timeshare, you probably will save money in the long run.

So, what happens if the resort refuses to buy it back from you? Unfortunately, you cannot force them to take it back. They know how hard it is to sell timeshares, so perhaps they’d rather get your maintenance fees. Perhaps you could send a complaint to the Florida attorney general’s office, in order to help stir some movement from the resort.

You can try to sell the timeshare on Craigslist, Ebay, in the classifieds (either in the paper or on-line in a reputable timeshare site). Craigslist is free. Ebay will have a small charge. Do not pay anything upfront other than a small fee (e.g. $10 or less) to any on-line sites. The on-line sites should be those exclusively for selling timeshares. Keep in mind that you should think like a realtor and describe the timeshare so that others will be interested in it. I do not know what week you have in Florida, but hopefully it is during the winter, which would probably have more interest to buyers. If you do not get any takers, then perhaps you could find out who has the timeshare weeks immediately before or after your week at your condo – they may want your timeshare to extend their vacation time.

You could hire a real estate agent to sell the timeshare for you, but don’t pay anything up front since timeshares are hard to sell, your money will be wasted. Get a real estate agent who works on commission.

You may be able to give your timeshare away. Freecycle is a website that is free. Some charities like to get them in order to use in fund raising promotions. You must be paid off and current in your fees. You may be able to deduct the fair market value of the timeshare on your federal taxes, but you should contact your tax advisor for more details. Keep in mind that if you give something away without getting fair value in return, and need the county to help pay for your long term care within five years (Medical Assistance aka Medicaid), the gift will make you ineligible for a period of time from the date of application forward based on the value of the gift. The timeshare will suck money out of your assets at a high rate, so that this loss of money is probably of higher importance to you than a potential Medical Assistance issue. Also, since timeshares are so difficult to get rid of, you could probably argue that it had little to no value – to prove this, document your efforts to sell the timeshare.

I suppose you could also just walk away, but you risk getting sued for the fees etc. If you get sued in Florida and the resort wins a judgment, they can try to have it docketed as a foreign judgment in Minnesota and if successful it becomes a lien on your Minnesota real estate. If they sue you in Minnesota and win, it will automatically become a lien on your real estate you own in the county in which you were sued. If the real estate is your homestead, the lien cannot be foreclosed. If you sell you homestead while the lien is attached, Minnesota law also protects the sales proceeds from having to be paid to the lien, but only protects them for one year after the sale. Minnesota Statutes Section 510.07.

Further, if they try to collect a judgment by going after your income they will not be successful if your income is from Social Security benefits, Veterans benefits, a pension, is a low wage, or if you receive government benefits based on need. These types of income are protected from garnishment by federal and state law. Pensions are protected by state law up to an amount needed for living expenses. One car is exempt up to an equity value of $4600. If you have more than one car, they could try to take it but most judgment-creditors want cash. Also, if you walk away from the timeshare, your credit report will reflect the unpaid debt and your credit score will get worse. If you need credit in the near future, it may not be a good idea to walk away.

If you have the type of timeshare where you have a deed, if you do not pay the fees, the timeshare may be foreclosed.

I know how frustrating this must be for you. Hopefully, others can learn from your experience. Do not buy anything under pressure – walk away. Do not sign anything when you feel rushed or that you do not understand.

This column is written by the Senior Citizens’ Law Project. It is not meant to give complete answers to individual questions. If you are 60 years of age or older and live within the Minnesota Arrowhead Region, you may contact us with questions for legal help by calling: 218-623-8100 and complete the intake process. Senior Citizens’ Law Project, Legal Aid Service of Northeastern Minnesota, 302 Ordean Bldg., Duluth, MN 55802. To view previous articles, go to: www.lasnem.org. Reprints by permission only.

May 2014 - Recently, I hired a construction company to do work on my deck

Dear Senior Legal Line,

Recently, I hired a construction company to do work on my deck. They were supposed to build new railings and stairs. I paid them $5,000 and the work was shoddy. When I talked to them, they said they wouldn’t fix it. Everything is falling apart. What can I do

about this? I am frustrated!

From: June

Dear June,

That is frustrating.

The first thing you would need to check is if you had a written contract with the construction company. Read it carefully. If you did, perhaps there is a warranty in the contract.

At any rate, if you had a written contract, you will want to have it as evidence if you want to sue the company.

If the construction company does not fix the work or does not pay you your money back, your recourse is to sue them. Generally, people sue others in conciliation court. Conciliation court is designed for non-attorneys. There is typically a fee to file a claim in conciliation court, but if you meet the eligibility requirements, you can file for a fee waiver called an In Forma Pauperis (IFP). If approved, the IFP waives the filing fee.

In conciliation court, you can sue for up to $10,000. If your damages are more than $10,000, you can sue in district court.

If you win a judgment against the construction company, that judgment is good for 10 years.

After the initial 10 years are up, you can renew the judgment for another 10 years. Collecting on a judgment is often the hardest part. Two main methods to collect are to personally garnish the construction company’s income or assets, or file a claim with the Minnesota Department of Labor’s “Contractors Recovery Fund”, assuming they were licensed by the department. The Department has papers that you have to file with the judgment before they will pay you money from the Fund.

Beware that the statute of limitations for suing a contractor that did work to improve real estate (e.g. your home) is only two years after the work was done or the problem was noticed.

In other words, once you discovered the problem with your deck, the clock starts ticking – you have two years to sue.

As with any dispute, it helps to talk to the contractor to see if they are willing to remedy the situation. Even though they initially told you they were not going to fix the problem, they may change their mind if it avoids a complaint against them to the Department of Labor, a lawsuit, and a claim against them from the Department’s Fund. But do not wait around to sue if the statutes of limitations are going to expire quickly.

If you miss the statute of limitations, you will likely lose your lawsuit and may have to pay the opposing party’s attorney’s fees and court costs.

218-623-8100 and complete the intake process. Senior Citizens’ Law Project, Legal Aid Service of Northeastern Minnesota, 302 Ordean Bldg., Duluth, MN 55802 To view previous articles, go to: www.lasnem.org. Reprints by permission only.

April 2014 - I want to have all my “ducks in a row”, so to speak. What kinds of legal documents should I have

DEAR SENIOR LEGAL LINE:

I want to have all my “ducks in a row”, so to speak. What kinds of legal documents should I have to cover most things that may come up in the future? I am a senior, I own my home by myself, have a checking and savings account, and own one car. I am a widow and have not re-married, although I do have a significant other of many years that I live with.

Signed, Agnes

DEAR AGNES:

It is great that you are thinking about these things! It is possible to avoid many problems with a little bit of planning. Of course, this article can’t cover all possibilities, but it will cover the common things that come up and the legal documents that often can help.

I like to think about legal documents as tools. Some tools you use while you are alive, such as Powers of Attorney and Health Care Directives. I would tackle these ones first, since most people want to control their lives, while alive, as much as possible. Other tools you set up for your survivors to use after you have died, such as a Will. You can set your assets up to go automatically to beneficiaries, so perhaps a Will would not be necessary, but it can be a good back-up document in case you forgot an asset or want to head off any conflicts within family.

As discussed above, there are three main legal documents that everyone should consider for themselves: a Power of Attorney for financial and property matters, a Health Care Directive, and a Will. Other documents may be useful, depending on your situation, such as a POLST, or Providers Order for Life-Sustaining Treatment (useful when you have a serious health condition and want emergency personnel to follow your wishes on the scene of an emergency call), a Transfer on Death Deed, and other payable on death beneficiary designations.

Powers of Attorney and Health Care Directives

The most important thing to consider when creating these documents is choosing the right people to be your agents. Your agents should be willing to act for you, in the ways that you want them to act. Your agents should be trustworthy and not tempted to do bad things by having access to your money and personal information. By choosing your agents wisely, you avoid the need to revoke the documents in the future.

Your Power of Attorney covers your financial and property matters. Your Health Care Directive covers your health care decisions when your doctor decides that you no longer can communicate or understand your healthcare and treatment options. For planning purposes, both documents allow you to have one or more people to stand up for you when cannot act for yourself. (Of course, in the Health Care Directive, you do not have to have an agent. You could just have health care instructions, but if you have a trusted person willing to act for you, it makes sense to have an agent to give a voice to those instructions). Having these two documents also helps avoid the need for a conservatorship or guardianship being pursued for you in the future.

Since you are in a long-term relationship and not married, your partner would not automatically get asked about your wishes if you cannot act or communicate for yourself. Certainly, your partner does not have legal authority to act for you in your financial or health care matters, just by virtue of being your boyfriend or girlfriend. If you wish for your partner to have legal authority, especially if there are family members who would fight about your wishes, I encourage you to have both of these documents, naming your partner as your agent. You can even ensure that your partner is able to visit you in a health care facility (e.g. hospital or nursing home) by saying so in your Health Care Directive. I have seen some sad cases where a parent’s adult children try to bar the parent’s long-term girlfriend or boyfriend from visiting the parent when he or she is unable to communicate. Even if you do not name your partner as your agent, you should think about stating instructions in your Health Care Directive about your wish for your partner to visit you wherever you reside.

Wills

After death, not everyone will need a Will, but I encourage you to think about having a Will. Even if you arrange your assets so that they will pass automatically to someone, it is good to have a Will in case you forget a probate asset. Also, even though a Will is typically used in probate court, it can also give legal authority to the person named as your Personal Representative (also known as Executor) to wrap up your affairs when probate is not necessary. This can be especially useful if family members will try to grab assets before it is too early to distribute assets or try to fight over what to do with assets. The Personal Representative’s duty is safeguard the estate, make sure the estate’s bills are paid in the correct order and amount, and then make any distributions.

Since you own your own home, upon your death, your home will have to be probated in order to pass title to someone. Minnesota’s intestate succession law has a list of which relatives would get your home. Since you are not married to your partner, your partner is not on the list to get the home. Unless you have a Will saying that you want your partner to get the home, or you have named your partner as the beneficiary of the home, your partner is at risk of eviction from the family members that inherit your home. You can do things while you are alive to avoid this. To avoid probate, you can such as add people, such as your partner, to the title of the home. (Please note: Whenever you add people to the title of an asset without getting paid, you are giving a gift to those people. Gifts have consequences, both with tax reporting, but probably more significantly, with eligibility for long term care under the Medical Assistance program. If you can out last the five year look back period, the gift will not cause you ineligibility. I encourage you to contact us or another elder law attorney if you have questions about Medical Assistance.) You can also avoid probate on your home by naming one or more beneficiaries on the home via a Transfer on Death Deed, or TODD. You file the TODD with the county recorder’s office before your death. After you die, your beneficiary takes your death certificate to the county recorder’s office. The title automatically transfers to the beneficiary.

Similarly, you can name beneficiaries on your titled personal property as well, such as your bank accounts. This is called a Payable on Death or POD beneficiary and your bank has a form you can fill out. Beneficiaries have no access to your account while you are alive and you can change the beneficiaries anytime before you die.

I normally do not recommend that you add people onto the title of your car, since doing so will make them potentially liable for any damages if you are sued over a car accident with the car. If you have set your estate up to go automatically and the total value of titled personal property (not going automatically) is $50,000 or less, your heirs can go to the local driver’s license office and fill out an affidavit to get the title into their name, so there is no need for probate. Of course, this may mean that a family member will be able to get the title into their name instead of your partner. If you do not want this to happen and you wish your partner to get the car without fighting over it, while you are alive, you could name your partner as a joint owner of the car.

Thus, everyone should probably have a Power of Attorney and a Health Care Directive. A Will can be very useful and a back-up plan in case things go wrong. Other documents to consider are: a POLST if you have a serious health care decision; a Quit Claim Deed to add people to your home or a TODD to add a beneficiary to your home or other real estate; and POD beneficiary designations on any bank accounts. Of course, there are many more details this article could cover, but this article’s goal is to tell you which documents you may wish to have and encourage you to look into them further.

March 2014 - One grandchild is asking me to cosign on a car loan

DEAR SENIOR LEGAL LINE:

I have grandchildren. One grandchild is asking me to cosign on a car loan. Another grandchild is asking me to cosign on a student loan. I want to help my grandchildren but I’ve heard stories about parents and grandparents having to pay on loans the kids were not wiling or able to pay. What can I do to protect myself?

Signed, Gary

DEAR GARY:

I understand that you want to help your grandchildren. Grandchildren may need a cosigner on a loan for many reasons. The grandchild might not have an established credit history. The grandchild might not have income to pay the monthly payments. Whatever the reason, it shows that a lender believes that the grandchild cannot qualify on his or her own for the loan. Because a cosigner is liable (responsible) for the entire balance of the loan, the lender is more likely to approve the loan. This may be okay if your grandchild will pay the loan payments or you have enough assets or income to pay off the loan if the grandchild stops paying. However, it often results in heartache and debt for both the grandparent and grandchild when neither can pay. When the grandchild quits paying, the lender will go after the cosigner for payment of the loan. With a car loan, the cosigner will probably be responsible for the entire loan and for insurance on the car, under the terms of the financing agreement. Even if the car is repossessed, you and the grandchild will probably still owe money. Newer cars depreciate fast. When the car is repossessed and sold by the lender at a public auction, the sale is often for less than the loan amount. You and the grandchild are responsible for this “deficiency amount”, the amount of the loan not paid off by the sale of the car.

Most grandchildren are not going to use a car to commit a crime, but if a grandchild uses the new car in a commission of a crime, law enforcement officials may confiscate the car (called forfeiture) and sell it if it is involved in certain crimes. The grandchild and the grandparent are still responsible to pay the loan. For example, a grandparent cosigned for a loan on a new car with his granddaughter. The granddaughter used the car in a commission of a crime and was caught by the police. The police took the car and sold it. The grandparent, as the cosigner, was stuck paying off a ten thousand dollar loan on a car that neither himself nor his granddaughter had possession of.

If you won’t or cannot pay the loan, the lender may sue you for the balance of the loan, even after the car has been repossessed and sold. If they win the lawsuit, and they most likely will since you signed the loan and agreed to be responsible for the loan, the lender will have a judgment against you. This judgment is good for ten years and can be renewed for another ten years. The lender will use the judgment to try to get the paid back for the loan, plus interest. While your Social Security benefits are exempt from collections, some large pension incomes may be susceptible to collection. Also, if you have any ownership interest in real estate, a judgment against you could result in a lien against your real estate. Your homestead is protected and cannot be foreclosed on for this type of lien and if you sell your home, the proceeds remain protected for one year after the sale. However, if the lien is attached to non-homestead real estate, the lender may try to foreclose on the real estate in order to get the lien paid off. In Minnesota, one car is protected from collection (up to an equity value of $4600), so if you have more than one vehicle, the lender may try to get paid by taking your other cars (with the help of the sheriff, of course). No matter what, having an unpaid loan will have a negative impact on your credit rating.

Cosigning a student loan carries similar problems as a car loan, and possibly more problems unique to student loans. Tuitions are increasing and outstripping wage gains for the graduate. Increasingly, graduates cannot keep up with payments. Then the liability falls to cosigners. Making monthly payments could put you in a situation where you have to decide whether to pay the student loan payment or buy your own food, medicine, and monthly housing expenses. In addition, if the student loans are from the US Department of Education, guaranteed by the federal government, the federal government can collect by garnishing your Social Security benefits. (Federal law gives the federal government the authority to collect from this otherwise protected benefit). The garnishment withholding can run up to 15% of the Social Security benefit. For a retired or disabled worker receiving an average payment of $1234 of Social Security retirement or disability benefit, that could mean a reduction of nearly $190 each month. They will not withhold money that would put your Social Security check below $750. Please note: Supplemental Security Income (SSI) will not be garnished to pay federal student loans.

Are there any ways to get out of student loan debt? Unfortunately, student loans are extremely difficult to be discharged through bankruptcy. Different loans have different cancellation criteria. There is sometimes an option to cancel a student loan debt if the student/borrower can show total and permanent disability (TPD). The disability would have to come about after the student/borrower took the student loans, or the disability was significantly increased, after the loans were taken out. The student/borrower may be eligible for a TPD discharge on federal student loans if they are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that:

Can be expected to result in death,
Has lasted for a continuous period of not less than 60 months,
Can be expected to last for a continuous period of not less than 60 months; or
Has been determined by the Secretary of Veterans Affairs to make you unemployable due to a service-connected disability.

If you want to learn more about this procedure you can visit: http://studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/disability-discharge

After a disability cancellation of the loan the student/borrower cannot earn more than 100% of federal poverty guidelines or you risk a revocation of the cancellation. Some federal loans will be canceled for cosigners, but for a federally subsidized “PLUS” loan both the student/borrower and the cosigning individual would have to be eligible for the disability discharge.

I understand the motivation to help your grandchildren with these loans. As you can see, the consequences can be dire for somebody on a fixed income. Perhaps it is time to talk with the grandchild about a used car that the grandchild can buy with cash. With the student/borrower, discuss possibilities of loans that do not need cosigners. The grandchild can speak to their school’s financial aid office for more ideas about ways to pay for school. Beware, if you cosign a loan, be prepared to pay the loan. If this prospect concerns you, then do not cosign the loan.

February 2014 - I received a 1099-C form from the IRS (Internal Revenue Service)

A legal question and answer line for Seniors. DEAR SENIOR LEGAL LINE:

I am so upset. In the mail, I received a 1099-C form from the IRS (Internal Revenue Service). It says that a creditor discharged a credit card debt I had and now I have to include this as income on my income tax return. How can I pay taxes on income that I never received? This was an old credit card that the creditor just wrote off. I do not have any income other than my Social Security Retirement benefits and I do not have any substantial savings. What do I do about this?

Signed, William

DEAR WILLIAM:

You are not alone. Every year, more and more debtors are receiving 1099-C forms. In 2012, an estimated 5.5 million of these forms were mailed out. Hopefully, I can shed some light on the form and perhaps ease your mind.

First, it is helpful to know what this form is – it reports Cancellation of Debt Income. Under federal law, a creditor or lender has to file a 1099-C whenever they “cancel” or forgive more than $600 or more in debt. Common reasons for filing the form can be: you settled a debt for less that the amount you owed and the rest was forgiven by the creditor; your home went into foreclosure and the sheriff’s sale did not cover the whole mortgage, leaving a ‘deficiency’ amount, which was forgiven; you sold your home on a ‘short sale’; or, in your case, William, you did not pay anything on a debt for three years and the creditor did not do any substantial activity for the past 12 months.

The IRS expects you to list the forgiven debt as income on your income tax return. However, you might qualify for an exclusion or exemption and not have to pay taxes on this “income”. In your situation, you might fall into the “insolvency exclusion”, one of the most common ways to avoid paying taxes on the forgiven debt. To find out if you are insolvent, you have to calculate if your liabilities (debts) exceed your assets. If your total debt exceeds your assets when the debt is cancelled, some or maybe all of the cancelled debt may not be taxable. The IRS has Form 982 with instructions and a worksheet to help you figure this out.

Please note: Not every debt should trigger a 1099-C filing. Debts discharged in a bankruptcy should not trigger a 1099-C. If the debt on the 1099-C is a mortgage, the Mortgage Debt Relief Act of 2007 may allow you to exclude the debt as income. Further, there is some question about whether a really old cancelled debt should trigger a 1099-C filing by a creditor or lender, so if your debt was cancelled many years ago, or you have other reasons to believe the debt is incorrect, you should talk with a tax professional or tax attorney.

In order to comply with IRS requirements, any tax advice contained in this article is not intended for anyone to use, and cannot be used, to avoid federal tax penalties or to promote or market any particular entity, investment plan, or arrangement. Indeed, we are not tax professionals here at Legal Aid Service of Northeastern Minnesota. Now that that disclaimer is out of the way, William, I suggest that you go to a tax professional to get help talking about the various exclusions and exemptions, and to get help filling out the form when filing your taxes.

January 2014 - I understand that Medicare may pay for a limited stay in a nursing home

A legal question and answer line for Seniors. DEAR SENIOR LEGAL LINE:

I understand that Medicare may pay for a limited stay in a nursing home when recovering from an illness or an accident. One of my friend’s hospital and subsequent nursing home costs were paid by Medicare after spending a week in the hospital. However, one of my other friend’s costs at the nursing home were not paid, even though he was at the hospital before going to the nursing home too. Why were my friends treated differently under Medicare, when they are both enrolled in Medicare?

Signed, Lilith

DEAR LILITH:

Your question brings up an issue with Medicare coverage for nursing home or rehabilitative services. In Medicare language they refer to these services as “skilled nursing facility” (SNF) services. Medicare pays 100% of the first 20 days of a covered SNF stay. A copayment of $152 per day (in 2014) is required for days 21-100 if Medicare approves your SNF stay. However, the Medicare recipient must have a qualifying stay a hospital as an inpatient. This inpatient stay must be for at least three days in a row counting the day that you were admitted as an inpatient but not counting the day of your discharge. The problem arises when people stay in a hospital under “observational services” or observational status. A person that stays in the hospital for observation it is considered an outpatient no matter how many days and nights they are in the hospital.

A person staying in a hospital for observation will not qualify for the nursing home or SNF coverage and may have more co-payments for other treatment. This means that Medicare will not pay for the subsequent nursing home costs, leaving the individual with the bill for the SNF services. Those services can be very expensive. Often, most people cannot afford the SNF if they do not have Medicare coverage. If they do not get the skilled nursing services, they will often not get better – in fact, they probably will get worse as additional problems can occur such as dehydration, falls, and many other avoidable complications.

The determination as to whether or not a person is admitted to the hospital as an inpatient, as opposed to an outpatient observational status, is theoretically determined by the admitting doctor. However, hospitals and doctors have been pressured by Medicare to classify more and more people as outpatients. A report from AARP shows that observational status used by hospitals more than doubled between 2001 and 2009. The biggest increase in the use of observational status occurred with hospital stays of 48 hours or longer. Often, skilled nursing services are required for recovery from joint replacement surgery, stroke, other brain injuries, or long stays in the hospital for any medical reason. Skilled nursing services help the patient recover their ability to move around on their own and tend to their daily living activities. This rehabilitation is made possible by skilled nursing services. These services are especially important when a patient does not have adequate help at home.

People have tried to address this problem. For example, there was a class action lawsuit to try to correct this problem but it was dismissed by the federal court in September 2013. Congress is now talking about outpatient status in their current legislation (H.R. 1179 and S. 569). Meanwhile, what should a person do if they think they might need to rehabilitate in a nursing home after their hospital stay? Ask your doctor if you are an inpatient. If you cannot ask because your medical condition has incapacitated you, your health care agent under your Healthcare Directive can communicate for you. If you do not have a health care agent, your next of kin can communicate for you. If you find out that you are an outpatient and/or under observational status, you should complain about it to the hospital while you are still in the hospital. Ask to be reclassified as an inpatient. If this is refused, ask to speak to your doctor and anyone else who will listen – talk about your probable need for skilled nursing services in order to rehabilitate at the nursing home. If necessary, you may want to ask your regular doctor to speak with your treating doctor in the hospital about why you should be an inpatient based on your medical condition and risk factors. It is much easier to change your status while you are in the hospital than to go through the Medicare appeals process later. If that does not work, a letter or a call from an attorney, describing the patient’s medical needs, may be effective.

In some cases the difference between a qualifying stay as an inpatient can save the person thousands of dollars in nursing home fees. If you or somebody you know wants to appeal a decision look at the self help packets available on line at http://www.medicareadvocacy.org/. Go to the drop down menu “Take Action” and click on “Self Help Packet for Medicare (Observation Status) February 12, 2013”. And you may also call the Senior Law Project for assistance. Lilith, I hope this article answers your questions.

December 2013 - In my later years, I took out a federal student loan and got my college degree

A legal question and answer line for Seniors. DEAR SENIOR LEGAL LINE:

In my later years, I took out a federal student loan and got my college degree. Unfortunately, after getting my degree, I was permanently disabled after a car accident and I cannot work. I qualified for Social Security disability benefits, but try as I might, I just cannot afford to pay back the rest of my student loan with those benefits. I have tried to get the loan discharged by the federal government by having my doctor certify my disability on my discharge application, but there seems to always be a frustrating, nitpicky detail that gets the application sent back to my doctor to re-do her certification. My doctor is getting frustrated. Is there any other way that I can get my student loan discharged?

Signed, Leonard

DEAR LEONARD:

Yes, there are three ways for you to show that you are totally and permanently disabled in order to get your federal student loan discharged:

1. Submitting a doctor’s certification stating that you are totally and permanently disabled (meaning that you are unable to engage in any substantial gainful activity because of a physical or mental impairment that is expected to result in death, has continued for at least six months, or can be expected to continue for six months or more). The doctor has to be a doctor of medicine (M.D.) or osteopathy (D.O), licensed to practice in the United States. Chiropractors, physician assistants (PAs), registered nurses (RNs) cannot certify disability for this purpose; or
2. Submitting documentation from the U.S. Department of Veteran’s Affairs (VA) stating that you are unemployable due to a service-connected disability; or
3. Submitting a Social Security Administration (SSA) notice of award for SSDI or SSI benefits, stating that your next scheduled disability review will be within five to seven years from the date of your last disability determination.
The traditional way was to have your doctor fill out the certification and submit it, but oftentimes, it was sent back for further documentation or for the doctor to resubmit it because the time to submit it had been exceeded. It can be very frustrating, as you personally know. Now, however, because you have already qualified for SSDI, all you have to do is submit documentation from the SSA that you get SSDI benefits as described above. This makes sense because in order to qualify for SSDI (or SSI), you have to be disabled. In a sense, the Department of Education trusts the disability determinations of the Social Security Administration, so the Department of Education will rely on the SSA documentation. Because you get SSDI, you do not have to have your doctor sign a certification anymore. You can use your SSA documentation.

Note: SSDI and SSI are different programs but under both programs the SSA determines that the recipient is disabled. SSDI stands for Social Security Disability Insurance and SSI stands for Supplemental Security Income. SSDI is like a federal insurance program for workers who became disabled and cannot work for a year or more. The SSDI cash benefits are paid to disabled workers who earned enough work credits over their lifetime and worked recently enough to qualify for SSDI. SSDI is not a need-based program like SSI. People who do not have enough work credits or have not worked recently enough to qualify for SSDI can apply for SSI. SSI is awarded if someone is disabled and falls within the income and asset limits.

Leonard, because you are having bad luck with the doctor certification method of qualifying for discharge of your federal student loan, and because you have already qualified for SSDI, you may want to resubmit your application with the SSA notice of award. The notice of award must state that your next scheduled disability review will be within 5 to 7 years of your last SSA disability determination. If your award does not state this, you can contact your local SSA office and ask for a Benefits Planning Query – this will often say when your next disability review will occur.

Good luck with your next application Leonard. I think you will be pleasantly surprised. If you would like more information about total and permanent disability discharges of student loans, you can go to www.disabilitydischarge.com or call 1-888-303-7818.

November 2013 - I had a credit card that I could not pay

A legal question and answer line for Seniors. DEAR SENIOR LEGAL LINE:

I had a credit card that I could not pay, which the credit card company wrote off and cancelled. I heard that I may be taxed for this cancelled debt. I cannot afford to pay any income taxes because I am barely making ends meet as it is. Do I have to pay taxes on the cancelled debt? I thought I was done with the credit card problem.

Signed, Carla

DEAR CARLA:

You might have to pay taxes on the cancelled debt, unless you fall in an exception or exclusion to the tax rule. When a person receives a 1099-C in the mail, it means that some of that person’s debt has been cancelled, forgiven, or discharged by the creditor. The 1099-C form is a form from the Internal Revenue Service giving you notice of a debt that was cancelled. A creditor is required to tell the IRS that they have forgiven a debt when they agree to accept at least $600 less than the original debt from a debtor. For example, if a debtor owes $5000 for a credit card debt, but the credit card company settles for $2000, the debtor is going to be considered by the IRS to have $3000 in income. The IRS considers cancelled debt as income to the debtor, and it is up to the debtor to report it on their tax return and show that they fall into an exception or exclusion to the rule. Most people have no idea that this is the case, especially when they often are on a fixed income or have a low income. The general rule is that you include the cancelled debt as gross income to you on your tax return, unless you fall into an exception or exclusion to this rule.

Many people do not know that the 1099-C notices are important and will ignore them. This puts people at risk of a tax audit, penalties, and fines. Do not ignore the notices. Take them to a tax preparer or tax advisor to help you determine if your debt is an exception or an exclusion to the rule. Perhaps the cancelled debt will not be taxable income. You can even go back and re-file for the prior few years of returns if you have to amend your return.

Exceptions to the rule are types of cancelled debt that have been classified as an exception by the legislature so that no further proof is necessary to show that it should not be included in the gross income of a debtor. There are five main exceptions to the rule include such things as gifts, bequests, some types of student loan cancellations, as well as two other more unusual situations. Exceptions are nicer to have rather than exclusions, because exceptions normally do not require more from a debtor. In your case, Carla, your situation seems to be an exclusion to the rule, requiring you to fill out more information for the IRS.

Exclusions are things that won’t be counted as income, but only if you prove it by taking extra steps (like showing you are insolvent). There are five exclusions to the rule: debt cancelled in a Chapter 11 bankruptcy; debt cancelled while you are insolvent; cancellation of qualified farm debt; cancellation of qualified real property business debt; and cancellation of qualified principal residence debt. The principal residence debt is an exclusion created to help homeowners hurt by the mortgage foreclosure crisis. Carla, you sound like you may fit into the insolvency exclusion. If so, you and your tax advisor can fill out the IRS Form 982 to see if you can reduce the taxable income. Insolvency means that your debts exceed your assets. Because you tell me that you cannot afford to pay your normal bills, it appears that you may be insolvent. When the debt was cancelled, if your total debt exceeded your assets, then some or all of the cancelled debt may be excluded. Go to a tax advisor for your specific situation.

Please note: Make sure the debt listed on the 1099-C is actually cancelled and is the correct amount. The creditor has to have actually forgiven the debt in order to trigger the 1099-C requirement. Sometimes creditors have sold the debt to another creditor, or are using a collection agency to still try to collect. Sometimes they list an incorrect amount for the cancelled debt. If this is the case, you should dispute the 1099-C notice with the creditor or debt collector right away and ask for a corrected 1099-C notice.

Do not rely solely on this article for tax advice. Tax law is complicated. I encourage you to seek individualized advice from a tax preparer or tax advisor to ensure that you get the correct information for your situation.

October 2013 - I want to have a Will

A legal question and answer line for Seniors. DEAR SENIOR LEGAL LINE:

I want to have a Will. Can I handwrite one or does it have to be typed? Who has to witness it?

Signed, Loren

DEAR LOREN:

In Minnesota, there are not very many requirements to make a valid Will. The law does not require that a Will be typed. A handwritten Will can be a valid Will, as long as it meets the requirements of the law. Even so, it is probably better to type the Will so that anyone can easily read it. I know that my handwriting is not very legible, so I would have a Will typed rather than handwrite it. As for witnesses, you need two.

Anyone who is 18 years or older and has a sound mind may make a Will. Under Minnesota Statutes Section 524.2-502, the requirements of Will are that it be in writing, that you (the testator) sign it in front of two witnesses, who also sign it. If you cannot physically sign the Will, you can tell another person to sign it for you, as long as they do so in your conscious presence. The signatures do not have to be notarized, but notarization is a way to show that the no one forged a signature (the notary public confirms identification of the signor at the time of the signing).

You can see that it does not take much to create a valid Will. However, there are things that you can do to make a stronger Will, which could better withstand potential attacks against it. To do the things to make it stronger, you would do well to go to a private attorney who practices in estate law. This attorney will know the wording to use to make the Will strong, and may also have other suggestions about how to get your wishes accomplished and make things easier for you and your family. For example, if your Will is written so that it references a list of tangible personal property, you can change this list anytime in the future without having to re-do the entire Will or create an attachment to the Will, called a codicil. The list is a nice feature because you do not have to sign it in front of witnesses. Other wording can be used to make the Will survive challenges. The people who may face challenges to their Wills are those in second marriages; have stepchildren; have disinherited heirs; and who leave things unequally, to name a few. In these situations, I believe it is wise to go to a private attorney to create a strong Will.

Most people believe having a Will avoids probate for their families. A Will does not avoid probate. If a probate proceeding is opened, then the probate court will look to your Will to determine your intentions regarding your probate estate. If a probate proceeding is opened and you do not have a Will, then the court will use the intestate succession statute to determine how to distribute the estate. A probate is commonly opened if the testator owned real estate in their name only, if there is titled personal property totaling more than $50,000 (that did not go automatically to a beneficiary), and/or a creditor believes they have a claim against the estate that should be paid.

Even if probate is not needed, it is still wise to have a Will. The Will gives authority to your personal representative to wrap up your affairs after your death. This is especially useful if you suspect that someone will cause trouble for the person wrapping up the estate. Further, the Will shows your intentions about how you want your estate distributed, even if a probate is not needed. A Will can help take the guesswork out of things for your family. Loren, I encourage you to get a Will.

September 2013 - I received a phone call from a man saying that I can sign up for a discount health insurance

A legal question and answer line for Seniors. DEAR SENIOR LEGAL LINE:

I received a phone call from a man saying that I can sign up for a discount health insurance plan and get a new Medicare and Affordable Care Act card. He also said that if I did not sign up with him and give him my personal information, I be fined for not having insurance. I already have Medicare and a supplemental insurance policy, so I hung up the phone without giving any personal information. Did I do the correct thing? Will I be fined?

Signed, Louise

DEAR LOUISE:

Yes, you did the correct thing in hanging up without giving any personal information. No, you will not be fined because you already have health insurance coverage (Medicare). The man who called you was running a scam. He was hoping that seniors are confused about the new Affordable Care Act (also known as “Obamacare”) so that they can be tricked into giving out their personal information. If you had fallen for his scam, your personal information would have been used for the scammer’s own nefarious purposes, such as opening credit in your name and/or stealing your personal identity.

A little background information about the Affordable Care Act may be helpful. The Affordable Care Act created a Health Insurance Marketplace, also referred to as the Health Insurance Exchange. Some of the highlights of the Affordable Care Act include: no exclusions for pre-existing conditions, no denial of coverage because of medical history, and no annual or lifetime benefit limits. In Minnesota, the Health Insurance Exchange is called MNsure. MNSure is where you can compare health insurance coverage. In addition, Medical Assistance and MinnesotaCare will be available through MNSure. MNSure will have trained people, called navigators, who can help folks compare and choose coverage, starting in October 2013. The open enrollment period lasts from October 1, 2013 to March 31, 2014. The goal is that uninsured people will be able to find health coverage that is of good quality and is affordable. Starting January 1, 2014, all US citizens and legal residents will be required to obtain health insurance coverage. Many people already have coverage through their employer’s plan or buy it on their own. Seniors over 65 already have coverage through Medicare, so they do not have to do anything with MNSure.

Let me state that again: If you already have Medicare, you do not need to worry about any of this because you already have health insurance coverage. MNSure is not for elderly folks because typically everyone over 65 has Medicare.

Scams involving the Affordable Care Act are bound to increase in the coming days and months since people can shop the insurance exchanges and enroll in health insurance starting October 1, 2013. Besides telephone calls and bogus offers of Medicare and/or Affordable Care Act cards, you may see envelopes and email that seem to be from government agencies, saying much the same as the phone scammers. Other scams may try to set up false websites purporting to be the Minnesota exchange website. What can you do to protect yourself from scams?

1. Only use trusted sources, such as the federal government website for information about the Affordable Care Act, https://www.healthcare.gov. For Minnesota, go to the state’s website at https://www.MNSure.org or call toll-free at 1-855-366-7873. If you go to fake sites, those sites may be “phishing” for your personal information or trying to load malware onto your computer.

2. Anyone who cold calls you on the telephone about changing or keeping existing health care coverage, the Affordable Care Act, or “Obamacare”, is a scam artist. The federal and/or state government is not going to call you on the telephone. If you did not initiate the telephone call, do not give out your personal information.

3. Do not believe anyone who says threatens you with a fine for not having health insurance. When the penalty for not having health insurance goes into effect in 2014, government officials will not telephone or even bill people who are uninsured. The fine will be assessed on federal income tax returns, if at all.

4. The government is not issuing any new cards. There are no Affordable Care Act or “Obamacare” cards. There are no new Medicare cards.

5. If you do somehow disclose personal information to a scammer, contact your banks, credit card providers, and the three credit bureaus right away, to avoid losing your money and/or credit being opened in your name by the scammer.

August 2013 - I filed a lawsuit against my neighbor because of her harassing behavior

A legal question and answer line for Seniors. DEAR SENIOR LEGAL LINE:

I filed a lawsuit against my neighbor because of her harassing behavior to me. Unfortunately, I lost. I was surprised to learn that because I lost my court case, I owe $522 to my neighbor, to cover her court costs and filing fees. I did not have to pay to file my lawsuit because my income is low – why should I have to pay this?

Signed, Theodore

DEAR THEODORE:

You have just learned a hard lesson about lawsuits – the losing party usually has to pay the prevailing party’s court costs, filing fees, and other costs. You are not paying for your own filing fees. Indeed, the Court waived your filing fees. You are paying your neighbor for her costs she had to pay to defend herself from your lawsuit. Of course, nothing is guaranteed in court and even good cases are sometimes dismissed. You should only bring a lawsuit when you believe you have enough evidence to meet your burden of proof.

It works like this: when a person files a lawsuit, the person uses the Court’s power to summon the opposing party to respond to that person’s allegations. If the opposing party wants to defend themselves, they have to file an Answer with the Court. To do that, they have to pay a filing fee, unless they meet the requirements to have the fee waived. You can see, then, that the filing fee you are paying is your neighbor’s fee to file an Answer. Minnesota law says that whoever prevails in district court, has the right to ask for and be awarded the “reasonable disbursements paid or incurred, including fees and mileage paid for service of process by the sheriff or a private person.” Minnesota Statutes Section 549.04. Minnesota law also says that whoever prevails in district court shall be allowed $200 as a statutory right to help cover their costs. Minnesota Statutes Section 549.02.

When you lost your case, your neighbor had the right to ask for $200 for the costs, and other monies for the filing fees and other fees. To do this, your neighbor would file a list of these costs and fees, called a Bill of Costs and Disbursements and Notice of Taxation, along with a statement (called an Affidavit of Service) that they served the same to you by mail. You have the right to object to the bill, but because your neighbor was not requesting anything but the statutory amount of the filing fee ($322) and the statutory costs awarded to prevailing parties ($200), for a total of $522, the Court would have likely rejected your objection. The prevailing party could have asked the Court to award them their attorney’s fees, which could have brought the bill up even higher. When the Court decides to award the costs and fees, it will incorporate it into the judgment. When the judgment is entered and docketed, the monetary award is now a debt that you owe to the opposing party. The opposing party can now try to collect the debt from you.

The judgment automatically becomes a judgment lien on any real estate that you own in the county in which the lawsuit occurred. If the real estate it attached to is your homestead, the judgment lien is not foreclosable and just sits on the title. Even if you sell your homestead, the sales proceeds of the homestead are exempt from collection of the debt for up to one year after the sale of the homestead. The opposing party may also try to collect it from you by the usual means of garnishment or levy. Some assets and forms of income are also protected from collection. One car up to an equity value of $4400 is protected and exempt from collection for this debt. Wages up to 40 percent of the federal minimum wage (or $290 net/week) are protected by state law. Social Security retirement and/or disability payments, as well as Supplemental Security Income (SSI), are protected by federal and state law from collection from this type of debt. If you get certain forms of government assistance based on need, this assistance provides a blanket protection of your wages, even if you make more than $290/week.

Even if your income and assets are protected from collection, you may want to pay it or offer a settlement to your neighbor, since you have to live next to her. It may be wise to mend fences, so to speak. Perhaps your neighbor would be satisfied if you paid for her filing fees and she would forgive the rest of the costs. Alternatively, perhaps she will accept a payment plan. If she agrees to a settlement, or if you pay it in full, you should be sure to get your neighbor to write a Satisfaction of the debt and file it with the Court, so that interest will stop accruing on the judgment and the record shows that you do not owe her anything. If you need help negotiating with your neighbor, perhaps a mediator or other third party could help communicate between you and your neighbor, to work out a satisfactory agreement about the debt and about other issues.

Finally, if your neighbor is still doing things that harass you, you should document the incidences of unwanted behavior, so that should you have to file for a harassment restraining order in the future, you will have the evidence to meet your burden of proof. If you do so, you will avoid having to pay the neighbor’s fees and costs, and you can ask the Court to award them to you because you won your case.

July 2013 - I am retired and I want to increase my income

A legal question and answer line for Seniors. DEAR SENIOR LEGAL LINE:

I am retired and I want to increase my income, so I am thinking about getting a reverse mortgage on my home. A friend also suggested that I could afford home improvements too if I got a reverse mortgage. Do you think a reverse mortgage is a good idea? I have heard of some people having bad experiences.

Signed, Carla

DEAR CARLA:

It is important to understand what a reverse mortgage is – it is a special type of home loan for older homeowners that require no monthly mortgage payments. A reverse mortgage is a loan where the lender loans you money based on the equity that you have built up in your home. The equity in your home is converted into cash. The cash can be paid to you in installments, as an available line of credit, or a lump sum, or a combination. Because you do not pay any monthly mortgage payments on the loan, interest is added to the loan balance each month. You still own your home and are still responsible for property taxes and homeowner’s insurance, as well as to keep the home in good repair. The reverse mortgage becomes a lien on your home for the amount of the loan balance and accumulated interest. The loan is required to be repaid when you die, sell (or otherwise transfer title), or move out of the home permanently or somewhere else for 12 months. The loan is often repaid through the sale of the home.

Today, almost all reverse mortgages are insured by the Federal Housing Administration (FHA) through its Home Equity Conversion Mortgage (HECM) program. This insurance protects borrowers by guaranteeing that the money will be there for the borrower, under the terms of the loan contract, even if the loan balance exceeds the value of the home or if the mortgage company experiences financial difficulty. This insurance protects the mortgage companies because they are guaranteed payment in full when the home is sold, regardless of the loan balance or home value at repayment. Borrowers or their estates are not liable for loan balances that exceed the value of the home at repayment because the FHA insurance covers this risk.

In order to qualify for a reverse mortgage, at least one homeowner must be 62 or older. Because the reverse mortgage loan is based on the equity of the home, there is often no income or credit qualifications, making reverse mortgage loans available to many people. A reverse mortgage can be a valuable option to increase your income. However, you must carefully understand and contemplate it so that you do not fall victim to unforeseen outcomes. The law requires that before you get a reverse mortgage, you must go through reverse mortgage counseling, so that you understand these risks.

Defaults of reverse mortgages are rising and recently have reached 9.8% of all reverse mortgages. How can you be in default with a reverse mortgage? One way default can happen is if you fail to pay property taxes, homeowners insurance or other “property charges” in the reverse mortgage contract. If you get the reverse mortgage loan as income each month, this may not be a problem because you will have continuing access to money to pay these required items. It is when people get their reverse mortgage loan as a lump sum, that this is more of a problem. People might use all or most of the lump sum asset to pay off other debts (like credit cards), pay for home improvements, or buy into investments like annuities or gold. Investments using reverse mortgage loan money are particularly worrisome since the investments sometimes cannot be cashed out at the amount put into the investment or the value of the investment decreases over time. Further, since credit card debt is unsecured debt, it often does not make sense to use reverse mortgage loan money to pay credit card debt since most seniors are protected from collection for unsecured debt. Whatever you use the reverse mortgage loan money for, you need to remember to keep enough of the reverse mortgage loan available to you to cover the necessary expenses and fees under the reverse mortgage contract.

People also default on their reverse mortgage loan when they permanently move out of the home. This can happen when someone goes into the nursing home and their doctor says that they no longer can return home, and there is not another borrower (e.g. spouse) living in the home.

If a default happens, the borrower/homeowner needs to pay back the reverse mortgage. Most people would not be able to do this and are subject to foreclosure and possible homelessness.

People are caught by surprise by other problems too. One problem can occur when some owners are under 62 years of age. Oftentimes, this is the case with married couples. One spouse qualifies for a reverse mortgage because they are 62 years of age or older. The other spouse is younger than 62. In order to qualify, the younger spouse must be taken off the title to the property. Sometimes they are told that it will be easy to get the younger spouse back of the title once that spouse reaches 62 years of age. However, that is not always the case. The real problem arises if the older spouse permanently goes in a nursing home, passes away, or some other triggering event causes the mortgage company to foreclose or liquidate property. The remaining spouse may not have the resources to pay off the reverse mortgage loan to stay in the home, and therefore finds him or herself without a home. This problem is even worse if the reverse mortgage was not insured by the HECM program via the FHA, because if the value of home is lower than the value it was at the time the reverse mortgage was obtained, liquidation of the home will not pay off the loan. Remember, at the same time the reverse mortgage money is paid out to you, the reverse mortgage accumulates interest just like a regular mortgage. This may result in a situation where in order to retain the home the surviving spouse would have to come up with more money to pay off the reverse mortgage debt than the house is actually worth. I have described a scenario between spouses, but the same thing can apply to any joint ownership whether or not the parties are married.

Another unforeseen problem occurs when the borrower receives monthly mortgage payments from the reverse mortgage and happens to be sued by another party. If the borrower loses the lawsuit, he or she will have a judgment against them. Such judgments become liens on their homestead, but the liens cannot be enforced because state law protects the homestead of the judgment-debtor. However, judgments may be enforced or collected through garnishment of the monthly income payments from the reverse mortgage. This leaves the homeowner with less protection against judgments since they have income that can be garnished. No one thinks that they will be sued. However, an accident in the home or in the car, for example, could result in an injury that surpasses insurance policy limits. In such situations, the reverse mortgage monthly payments could be vulnerable.

These are examples of the pitfalls of the reverse mortgage process. The Minnesota attorney general’s office offers the following tips for your consideration before you commit to a reverse mortgage:

1. Consider your other options. Maybe taking out a traditional home equity loan or line of credit would be a better option.
2. Consider the high upfront costs. Reverse mortgages are not cheap, just like a “normal” mortgage, there are closing and other costs.
3. Understand the product. The amount owed continues to accumulate interest. This may mean there will be little or no equity in the home if you later decide to sell your home, or little to no equity to leave to your heirs or to pay future expenses when you die.
4. Beware of sales gimmicks. Be wary of anybody selling something and suggesting you fund it by a reverse mortgage. It could be home improvements, investments, insurance, or other products and services.
5. Beware of fear tactics. Unscrupulous agents push their reverse mortgage products. Beware of “educational seminars” run by people that will profit from a reverse mortgage.
6. Beware of people who charge you to find a mortgage. You can find that all this information out for free.
7. Get legitimate help. The law requires you to undergo counseling before anybody sells you a reverse mortgage. Make sure any advice that you get is meaningful and addresses what you intend to do with the proceeds of the reverse mortgage. Beware of agents that say that the education counseling is “just a formality”. Get your counseling from a trusted and well-known resource, not simply the company that the reverse mortgage agent suggests.
8. Slow down. If it sounds too good to be true, it probably is.

If you would like a copy of Real Deal on Reverse Mortgages pamphlet, please contact the Office of the Minnesota Attorney General at 1-800-657-3787. You may also contact the federal Consumer Financial Protection Bureau for further information at 855-411-2372 or at www.consumerfinance.gov.

Carla, a reverse mortgage may be a good option for you. However, it is generally not a good idea to fund home improvements or other investments with reverse mortgage loan money. There may be other ways that you can secure funds for your home improvements, such as traditional home equity loans or forgivable home rehabilitation loans from reputable nonprofit organizations or governmental agencies. You must seek advice from a qualified reverse mortgage counselor. Counselors suggested by reverse mortgage agents may have motives other than giving you the best and most complete advice. I suggest seeking out reverse mortgage counseling from a source that does not profit from reverse mortgages. One source for counseling is Lutheran Social Services Reverse Mortgage Counseling at 1-888-577-2227.

The most important thing is that you understand the risks and consequences of a reverse mortgage before you sign such documents. Feel free to contact the Senior Law program or a private attorney with other questions.

June 2013 - My roof needs repair and it probably needs to be re-roofed

A legal question and answer line for Seniors. DEAR SENIOR LEGAL LINE:

My roof needs repair and it probably needs to be re-roofed. I would also like to do some improvements to my home to increase its energy efficiency. That includes upgrading my insulation. I have some other things that I would like to improve or repair at in my house. My close friend has a nephew that does that type of stuff. How would I go about hiring somebody to do these home improvements? I have heard bad luck stories about some home improvement projects and I do not want to be stuck with inferior work, or materials, on my home improvement project.

Signed, Floyd

DEAR FLOYD:

It is exciting to invest in improvements to your home. You know what you want and are trying to figure out who can properly do the work to get what you want. Many times, homeowners do not put in enough time and research in finding an appropriate tradesperson or contractor to complete the job to their satisfaction. It is much easier to avoid problems from the start by doing as much as you can to select the right person for the job. After the work is done, it is much harder to get the contractor to remedy the situation.

The Minnesota Department of Labor and Industry and the Minnesota Attorney General’s Office have several resources available to homeowners seeking to improve their homes. These agencies give good advice about how to proceed in home building, improvement or remodeling projects. I will give you phone numbers and Web addresses for those resources below.

If a homeowner wants to lower their heating and energy bills, and improve the comfort of their home, the place to start is to get a qualified energy assessment. Many utility companies have rebates for energy assessments and energy saving improvements. Your utility company may have a list of recommended energy assessors and home improvement contractors. The Minnesota Dept. of Commerce has consumer guides on saving energy at: http://mn.gov/commerce/energy/topics/resources/Consumer-Guides/index.jsp or you can call them at 800-657-3710 and request copies of their “Consumer Energy Guide” series. Further, other community resources such as Arrowhead Weatherization (AEOA at 1-218-749-2912 or 1-800-662-5711), provide energy assessments and energy improvements on a fee for service basis, information on rebates and tax credits, and sometimes administers programs for homeowners of less means.

Before you hire a contractor, do your research. Compare several contractors. Ask for references and call those references. Are they licensed? It is a highly recommended that you then find out whether or not your contractor is licensed in the State of Minnesota for the type of work you are hiring them for. The Minnesota Department of Labor and Industry has a convenient website to look up licenses: https://secure.doli.state.mn.us/lookup/licensing.aspx or you can call them at 1-800-342-5354. A licensed contractor has met certain requirements including passing appropriate examinations and continuing education. Licensed contractors must retain liability and property damage insurance. Hiring a licensed contractor also provides you with access to the Contractor Recovery Fund. That fund reimburses consumers who suffered financial losses resulting from a licensed contractor’s misconduct.

Once you identified licensed contractors in the area, you should speak with them about their familiarity with your chosen product project, and of course get estimates from them. Ask friends or neighbors who have undertaken similar projects about their contractors, and contact the Better Business Bureau (1-800-646-6222) to see if it has rated and/ or received complaints about a particular contractor. You may want check out or subscribe to an online rating service. Ask contractors for a list, with phone numbers, of former customers to call to see if they were satisfied. Also inquire as to how long the contractors been in business, ask for a local phone number and office where you can reach the contractor.

While choosing a contractor, you may observe some of these red flags, which may indicate that you should be careful about hiring the contractor, or perhaps hire someone else:

• The contractor arrives in an unmarked van or truck;
• The contractor gives you a unusually low price;
• The contractor requires full or substantial payment before work begins and/or or refuses to provide a written estimate or contract;
• The contractor refuses to provide his or her license number from the Minnesota Department of Labor and Industry;
• the contractor refuses to provide references, shows up unsolicited, uses high-pressure sales tactics;
• The contractor asks the homeowner to obtain permits for the job. (If the contractor obtains the permits, they are responsible for meeting all building codes. If the consumer obtains the permits, the consumer is responsible for code compliance.)
• The contractor does not give the buyer an address and phone number where they can be reached.

Before signing anything with a contractor, make sure you have ample time to review the written proposal and contract. Does it state who is going to get the permit? Are there start and completion dates? Is there a change order clause? Is there a schedule of payments? Is there a hold back clause, allowing the homeowner to inspect the job before making a significant final payment? Is cleanup included in the contract? Does the contract talk about lien waivers from subcontractors? (You probably want lien waivers from subcontractors to avoid the possibility of multiple liens). The price of the bid is only one of many considerations.

Contracts or sales occurring in the home may fall under the Minnesota “Home Solicitation Sale” laws (Minnesota Statutes 325G.06-11). These laws, in some circumstances, allow the buyer to cancel the sale until midnight of the third business day after the day of the sale. The cancellation must be in writing, either personally delivered, or by mail if deposited in a mailbox, address to the seller with proper postage.

Do not sign anything that you do not understand. Do not make a payment until you understand and have a signed contact. If you need help you should contact an attorney or somebody that is familiar with such contracts. This is a long-term investment in your home and you should not feel rushed to sign.

If you follow these recommendations and others listed in the consumer guides from the Minnesota Department of Labor and Industry, the Minnesota Attorney General’s Office, and/or the Minnesota Dept. of Commerce, you have gone a long way to ensure that the contracts will lead you to your desired outcome:

• Minnesota Department of Labor and Industry, A consumer’s guide to hiring a residential building contractor, http://www.doli.state.mn.us/CCLD/PDF/rbc_consumer_contractor.pdf or call and request a copy at 1-800-Dial-DLI (1-800-342-5354)
• Minnesota Attorney General’s Office, Citizens Guide to Home Building and Remodeling, https://www.ag.state.mn.us/Brochures/pubCitizensGuidetoHomeBuilding.pdf or call and request a copy at 1-800-657-3787.
• The Minnesota Dept. of Commerce has consumer guides on saving energy at: http://mn.gov/commerce/energy/topics/resources/Consumer-Guides/ or you can call them at 1-800-657-3710 and request copies of their “Consumer Energy Guide” series.

Despite your careful planning, sometimes conflicts with the contractor may arise. If you have a licensed contractor, the Department Of Labor and Industry may be of assistance. They may be able to make suggestions on ways to resolve the matter. If those efforts are unsuccessful, they offer a written complaint form so that they can collect data relevant information and initiate an investigation. Complaints should be in writing.
If that is unsuccessful, you may sue the contractor. If you win, the contractor may be unable or unwilling to pay the judgment to you. If the contractor is licensed by the state of Minnesota, you have the possibility to be paid out of the Contractor Recovery Fund. The Contractor Recovery Fund is a fund paid into by all licensed contractors, specifically for the purpose of satisfying judgments against licensed contractors. This is not available if you hire an unlicensed contractor.

If you have a contractor work for you, make sure that you can afford to pay the contractor. If a contractor is not paid, and that contractor thinks that that is payment unjustly denied, that contractor could go forward with a mechanic’s lien against your house. In order for a contractor to file a mechanic’s lien, they must be licensed by the state of Minnesota. The contractor must give notice to you of their intent to file a lien if the contractor is not paid. It is a good idea to ask the contractor for a list of all the subcontractors and suppliers for the project. Minnesota law provides property owners with ways to reduce the risk that a subcontractor will file a mechanic’s lien against your property first. If you receive a notice of a mechanic’s lien from the contractor, you have the right to deduct the price of the subcontractor’s goods or services from the amount you owe to the general contractor. You can then pay that amount correctly to the subcontractor. Secondly, for 120 days after all work is completed you can hold withhold enough money to pay the subcontractors, unless the contractor has given you lien waivers by the subcontractors. If you receive a mechanic’s lien notice you should contact an attorney.

Mechanic’s liens must be filed within 120 after the last materials or labor is furnished on the job. If the lien holder wants to enforce the lien by foreclosure, they must start the process one year after providing the last item on the lien statement. You can read more about consumer protections and the law concerning mechanics liens in the Minnesota Attorney General’s pamphlet, Citizen’s Guide to Home Building and Remodeling cited above.

Back to your original question, Floyd, if you want to hire your close friend’s nephew, you should compare him with other possible contractors, asking the same questions about licensing, training etc. Understand that if you have a problem with your close friend’s nephew it may be uncomfortable pursuing your rights and remedies and it may cause problems with your friendship. This is a big investment and you should go about it in a logical process to ensure the best outcome for yourself and your home.

I wish you luck in your home improvements and the resources mentioned in this letter should help prevent problems from happening.

May 2013 - What is a Social Security overpayment?

DEAR SENIOR LEGAL LINE:

What is a Social Security overpayment? I have known acquaintances that have lost their benefits for a while because they got an overpayment from the Social Security Administration. I just started receiving my own Social Security benefits – should I be worried that I will get an overpayment?

Signed, Lucille

DEAR LUCILLE:

An overpayment happens when a person receives a larger benefit check than they were supposed to receive – the overpayment is the amount above what the benefit should have been. Sometimes this happens for months, or even years, because no one realized that the wrong benefit amount was issued, so at times the overpayment amount can be big. The Social Security Administration (SSA) periodically reviews the benefit amounts, but because they are administering so many benefits, it is impossible for them to review all of them all the time. When the SSA discovers overpayments, they will take steps to get the overpaid benefits back.

How do overpayments happen? At times, the SSA makes mistakes calculating benefits even though a person supplied accurate information. More often however, the SSA calculated the benefits based on wrong information about the person. For example, sometimes a person’s income actually was higher than estimated, a person’s marital or living situation changed, a person no longer is disabled, a change was not reported, and/or a person’s countable assets (SSA calls these “resources”) were too high for the program (e.g. SSI). To help avoid overpayments from happening, people should take care that the SSA has accurate information about them. Tell the SSA right away about any change in things like income, disability, assets, marital status, household composition, address, name – basically, any major change or event in your life. The SSA can give you a brochure about all the changes a person needs to report. If you are in the trial work period for Social Security Disability, keep track of the deadlines and your earnings so you will know if you will qualify for disability or not after the trial work period. When SSA contacts you to recertify your information (as they do for many programs), tell them accurate information. If you do not understand a question, ask for an explanation so that you understand before you answer. After the SSA talks to you, you will get a letter that has the questions they asked you and your answers. Review it for any mistakes. If you find mistakes or you want to clarify something, contact your local SSA office right away so that they use the correct information in calculating your benefits. Doing these things help keep overpayments from getting so large.

Typically, if a person is overpaid, the SSA will send out a notice of the overpayment to the person. It will tell the person how much the overpayment is, why they think the overpayment happened, what they are planning to do to recover the overpaid money, and what the person’s rights are in responding to the overpayment. This notice is very important, because it starts the clock on the person’s appeal rights. If the person waits too long to appeal, the person cannot appeal unless he or she has very compelling reasons for missing the deadline to appeal. Do not ignore SSA letters. Open and read SSA letters right away.

If you agree with the overpayment, you may ask the SSA to enter into a payment plan. In many cases, the SSA can do a payment plan as low as ten percent of a person’s benefit amount.

If you disagree with an overpayment or cannot afford a payment plan, you have two basic options: appeal and/or ask for a waiver of the overpayment recovery. As discussed above, your time in appealing is limited. The SSA assumes that you received the overpayment notice five days after the date on the notice letter. From this date, you have 60 days to appeal in writing. The notice has instructions on where to send the appeal. The SSA has the form to use to appeal and you can get it at your local SSA office or online at www.ssa.gov. Depending on what program you get benefits under, there are other deadlines to be aware of as well. For example, if you get benefits under the Supplemental Security Income (SSI) program, if you appeal in writing within ten days of receiving the overpayment notice, the benefits should continue until the SSA makes a decision on your appeal. Someone other than the person who made the initial decision is to rule on your appeal (and waiver). You have the choice to let the SSA reconsider their decision based on papers in your file and those that you send in, an in-person conference, or a hearing. If the SSA does not change its mind after your first appeal, you have the right to appeal “up the ladder”, in a series of appeal levels (Administrative Law Judge hearing, Appeals Council Review, and Federal Court – each with a 60-day appeal deadline). You do not have the right to receive benefits during the rest of these appeals.

You can request a waiver of the overpayment recovery at any time – there is no deadline. Of course, in my opinion, it is generally best to do so earlier than later. You can do both an appeal and a waiver at the same time. To meet the standard of a waiver, you have to show that the overpayment was not your fault and that paying it back would be an undue hardship on you. An undue hardship generally means that you need all of your income to survive – to pay for your ordinary living expenses. Sometimes a person is not at fault because a SSA employee told them the wrong information (usually on the 800 number, due to the inherent difficulties in communicating over the phone), so it is always wise to document any conversations with SSA with the date, the time, who you spoke to, and what was said. More commonly, however, a person is not at fault because they did not understand the rules for whatever reason (e.g. education level, language barriers, disability), or they reported changes that were not acted upon.

If you run into problems with your Social Security benefits, in my experience, it is better to contact the local SSA office rather than calling the 800 number. The local office typically has staff available to talk to you, and can often fix a problem before it gets out of hand. Even if you have a large overpayment, go to the local office. The local office has access to the SSA files since most of the files are now on their computers. The local office has the ability to request any paper files from the archive, if necessary. Finally, if you need help, you can turn to private attorneys and/or nonprofit organizations to advocate for you.

April 2013 - I am taking care of my mother by living at home with her. She would like to add my name to her house.

DEAR SENIOR LEGAL LINE:

I am taking care of my mother by living at home with her. She would like to add my name to her house. Can my mother do this without having a gift penalty under the Medical Assistance rules, should she need Medical Assistance in the future?

Signed, Emily

DEAR EMILY:

The short answer is that it depends. There is a possibility that the care you provide to your mother can be a basis for your mother to fit into the “two-year” exception to the gift penalty rule, but a lot depends on the details.

Medical Assistance (also known as Medicaid) is the healthcare program that pays for healthcare coverage for eligible people who are aged, blind, or disabled. Federal and state law governs Medical Assistance and the counties administer the program. This program pays for care when Medicare stops paying and the person cannot afford to privately pay for their care. Medical Assistance has rules that determine if your mother would be eligible for the program. One of the rules is that the county is to look to see if she made any “uncompensated transfers” or gifts during the 60 months (five years) prior to the month of her application for Medical Assistance. Generally, if your mother added your name to her home, and you did not pay her fair value for this interest, this is a gift and it will make your mother ineligible for a while. To calculate the ineligibility period you divide the value of the gift by the average cost of a month of nursing home care (currently $5371 per month). The county would not provide healthcare coverage during the ineligibility period. Because she would have spent down her countable assets, the ineligibility period would be a great hardship to her. If the county believes that her health is in danger without Medical Assistance, they can provide it to her but will then come to you to ask that you return the gift to your mother (so she can put the home up for sale). If you do not do so, the county may even try to bring you to court to force you to give the house interest back to your mother. Further, if the home’s value has decreased since your mother added you to the title, the county will claim that not only do you have to sign your interest back to your mother, but you also have to pay her the difference between the value of the interest when she gave it to you minus the value of the current interest. Thus, if your mother can fit into an exception to the “uncompensated transfer” or gifting rule, she and you can avoid many problems.

As long as your mother lives in her home, it is an excluded asset under the Medical Assistance rules and is not counted as an asset in determining her eligibility for Medical Assistance to pay for her care. However, if she can no longer safely live in her home and must move into a nursing home, the home loses its excluded status after six months of long-term care. Once this happens, if she needs Medical Assistance, the county will ask your mother to put the home up for sale. When it sells, your mother then will be required to use the proceeds to pay for her cost of care until she spends her assets down to the eligibility limit again. Your mother seems to be thinking ahead to the possibility that she cannot live in her home and she wishes for you to have the home. She wants to avoid the forced sale under Medical Assistance.

One way to do this besides the adding your name to the title and hoping that she will not need Medical Assistance for five years, is to fit into an exception the uncompensated transfer rule. The exception you are talking about is the “two-year rule”. The two-year rule says that a transfer will not cause ineligibility if the person’s child (or grandchild) resided in the person’s home for a period of at least two years immediately before becoming institutionalized, and who provided care to the person that, as certified by the person’s attending doctor, permitted the person to reside at home rather than receive care in an institution or facility. See Minnesota Statutes Section 256B.0595 subdivision 3. This exclusion continues as long as the child or grandchild resides in the home as their primary residence. Minnesota Statutes Section 256B.056 subdivision 2. Therefore, the transfer will have to be made after your mother has moved out of her home and into an institution or facility.

Because the county will look very carefully at this exclusion, your mother needs to be careful. Definitions are important in these statutes. A long-term care facility or institution is a nursing home (“skilled nursing facility”), a hospital, or an intermediate care facility for the developmentally disabled. An assisted living facility and group residential housing are not “institutions” under the statutes. See Minnesota Statutes Section 256B.059 subdivision 1, paragraph h. Therefore, if your mother wants to use this exception, she cannot move from her home into an assisted living facility or similar setting. She has to move from home into a nursing home.

Furthermore, your mother’s doctor has to verify in a written statement that you provided care that kept her out of a nursing home for the two years prior to her entering into the nursing home. The written statement needs to have details about what sorts of care you provided. The statement should describe the sort of care that nursing home residents get: assistance with activities of daily living, things residents need in order to safe, that show they cannot live alone. To help your mother’s doctor write a good statement, you should keep daily logs about the care provided, similar to nursing home logs. Your logs can be submitted to the county along with the doctor’s statement.

In conclusion, if you can live in your mother’s home, provide the verifiable care that keeps her out of a nursing home for two years, and if your mother moves directly from her home into a nursing home, then your mother can probably transfer her home to you without becoming ineligible for Medical Assistance. This is a stressful option since no one can predict the future. Perhaps if your mother’s health is relatively good and there is no prediction of the need for Medical Assistance within five years plus one month, the better risk is for your mother to transfer an interest in her home to you now and wait. If she winds up not being able to wait five years plus one month, you can give the home back and your mother can try to convince the county that the two-year rule exception applies allowing her to transfer the home to you.

March 2013 - I understand that National Healthcare Decisions Day occurs on April 16th

A legal question and answer line for Seniors. DEAR SENIOR LEGAL LINE:

I understand that National Healthcare Decisions Day occurs on April 16. I am in good health. Do I need to do anything about this healthcare decision question?

Signed, Spencer

DEAR SPENCER:

The purpose of the National Healthcare Decisions Day is to educate and empower the public about the importance of advanced care planning. The day’s goal is to encourage people to express their wishes regarding healthcare. It is great that you are in good health. However, it is Important for every adult to make plans for the unexpected or unfortunate situations we might face. We are all one car wreck, accident or illness away from needing a Healthcare Directive.

The National Healthcare Decisions Day’s website, developed by the American Bar Association, http://www.nhdd.org, has all sorts of information. The website refers to studies that show we still have a long way to go to get the word out about the benefits of having a Healthcare Directive. Even though studies show strong public support for people deciding whether they want life-sustaining treatment, nationally, only about a third of people nationally have “Healthcare Directives”. (In Minnesota, this term replaces the old terms “Living Wills” or “Durable Powers of Attorney for Healthcare”). One study indicates that many healthcare providers are not even aware of the existence of their patient’s Healthcare Directives. Furthermore, only about half of the severely or terminally ill have an advanced directive in their medical record. The National Healthcare Decisions Day is about getting the word out about the importance of communicating your healthcare wishes, and if possible, to encourage you to put your wishes in writing, in a healthcare directive.

The website has a toolkit that the public can use to work through their healthcare planning, as well as their financial planning. The toolkit, “The American Bar Association Advanced Care Planning Toolkit” is available on the National Healthcare Decisions Day’s website, under “Public Resources”. The Toolkit also discusses how to decide whom to choose to act for you in your healthcare decisions (via a Healthcare Directive) as well as in your financial and property matters (via a Power of Attorney). Of course, the people you choose should be trustworthy and willing to act for you. They should be willing to stand up for your healthcare wishes in the face of opposition from other family members or healthcare providers. The best way to find out if your prospective agents will be able and willing to act for you is to talk to them. If nothing else, this conversation will give them a heads up about your wishes, even if you do not follow through with completing a directive.

You do not give up your own authority by having a Healthcare Directive or Power of Attorney. You are sharing powers with others. If your agent does not follow your wishes, you have the right to revoke these legal documents (as long as you have the capacity to understand the revocation – if not, someone may have to get a guardianship or conservatorship over you to trump the agent’s power). Your agent has a duty to act for you and not use these documents for their interests.

When you can talk or communicate your healthcare wishes, and can understand your healthcare treatment options, your doctors and other healthcare providers will just ask you what treatment you want. However, when you no longer can communicate or understand your treatment options, then your doctors will look to see if you have a Healthcare Directive. If you do, your doctors will read it and follow your instructions to the best of their ability (if they refuse, the doctor should transfer you to a healthcare facility that will); if you have also named an agent, your doctors will ask your agent about your wishes and follow the agent’s instructions in conjunction with any written instructions. If you do not have a trusted person to name as an agent, you can still have a Healthcare Directive. In fact, it is probably even more important that you have a Healthcare Directive so that your doctors know your wishes from your written instructions, rather than guessing (if you are alone) or risking the chance that the doctors ask the untrustworthy person about your wishes.

Some other reasons for having a Healthcare Directive are:

▪ If you have minor children, you can leave written instructions about whom you appoint to be the minor children’s guardian, should you (and the other parent) happen to pass away. It is probably better to do this in a Last Will and Testament, but this little-known benefit of a Healthcare Directive could at least get your intentions written down and the probate court will look to it for guidance.

▪ You most likely avoid having a guardian
appointed by the court to make your healthcare decisions, should you become incapacitated. Further, if you name an agent in a Healthcare Directive, and someone you do not like tries to get a guardianship over you, if the court decides you need a guardian, the court will presume that you would have nominated your Healthcare agent to be your guardian, effectively shutting out the unlikable person.

▪ You can have written instructions about who you wish (or do not wish) to visit you in the hospital, nursing home, or other location. We have had clients in the past whose adult children object to the client’s spouse or significant other, and try to ban the spouse or significant other from visiting the client in the hospital or nursing home. This will help the hospital and nursing home know your wishes about who gets to see you when you are incapacitated.

▪ You can have instructions about what you wish to happen to your body when you pass away, including your wishes about organ donation and funeral arrangements. Your Healthcare Directive agent retains this power after your death in order to make sure your wishes are completed.

A Healthcare Directive and a Power of Attorney are documents used mainly while you are alive, so they are not technically estate planning tools. A complete estate plan should make sure you have considered these documents, however. They are some of the best ways to ensure that you retain as much control over your life as possible, which can bring you immense peace of mind.

You can gather information from the National Healthcare Decisions Day’s website, http://www.nhdd.org. If you cannot access these resources, you can always call the Senior Law Project at 218-749-3270 in Virginia or 218- 623-8100 in Duluth.

February 2013 - I am now housebound after my stroke

A legal question and answer line for Seniors. DEAR SENIOR LEGAL LINE:

I am now housebound after my stroke. My family lives nearby and is so helpful, driving me to my doctor appointments, cleaning the house, making meals, and just generally being there for me. I am not yet on Medical Assistance since I have “excess” assets. I want to pay my family for their help. Can I do this, and if so, how can I do it so that I do not become ineligible for Medical Assistance to pay for my care in the future?

Signed, Walter

DEAR WALTER:

When the payments are made, document what the payments are for – what specific services were performed and the basis for the payment amount.

For on-going payments, because your payments will be made in return for performance of personal services, the payments are subject to income tax and perhaps self-employment tax. If the services will be performed in your home, the payments may also be considered wages, which require the proper withholdings for Social Security, Medicare, federal, and state income taxes. Because of this, you would be wise to consult with an accountant or tax attorney. You can hire local companies to do the payroll withholdings for you (you pay the gross amount to the company, the company would do the payroll after deducting the proper taxes, and would provide a W-2 for your family caregiver).

Your family caregivers should talk with an accountant to see if the payments will affect their tax bracket.

Run your plan or contract by your local County financial worker for prior approval. Document their approval as insulation against any future allegations of gifting.

If you want to do the personal services contract method, you would be wise to have an elder law attorney draft the contract for you, since the elder law attorney will know the requirements of Medical Assistance.

The types of services you can pay for include, but is not limited to, transportation, toileting, meal preparation, grocery shopping, housekeeping, laundry, maintenance of your home, financial services, companion services, assistance with activities of daily living (bathing, walking, transferring, toileting etc), medication preparation and supervision, attendance at meetings.

Thus, with some forethought, family caregiver can be paid for taking care of your personal needs without jeopardizing your future eligibility for Medical Assistance.

Yes, you can pay family caregivers for their services and still be eligible for Medical Assistance when you spend down your excess assets. Do it wrong, however, and you risk being hit with the Medical Assistance gift or “uncompensated transfer” penalty. If this happens, Medical Assistance will not pay for your cost of care for a length of time based on the value of the gifts. The penalty period starts from the date of your Medical Assistance application, just at the time you have spent down your assets and can no longer pay for your own care. The County, which administers the Medical Assistance rules, may decide that your life depends on getting the services that Medical Assistance provides, and can put you on Medical Assistance despite the gift penalty. However, the County will claim that they can go after your family members who received the gifts and request that they pay the gifts back to you or they will face a lawsuit against them by the County. If you do it right, however, and you can spend down your assets by paying your family caregivers for the services you need.

You have two methods to pay family caregivers for the services they provide to you. Minnesota law allows you to either pay your family caregiver for the services within 60 days after the services were provided, or have a written personal services contract, signed and notarized by you and your caregivers before the services were provided, describing the services to be provided to you and the payment amounts for the specific services. See Minnesota Statutes Section 256B.0595 subdivision 1(d).

With either method, you would be wise to do the following:

Find out what local agencies or companies charge for the same services so that the County does not think you are padding the bill. If they think that, you will face a gift penalty. The goal is to be able to prove to that County that the amounts you paid for each service are reasonable in your area. Document what the local agencies or companies charge for the same services, such as having a price list and/or having an agency or company employee sign an affidavit that the payments you plan on paying are reasonable.

January 2013 - I want to make things simple for my children when I die

A legal question and answer line for Seniors. DEAR SENIOR LEGAL LINE:

I want to make things simple for my children when I die and I do not want them to have to go through probate or fight over my estate. My main possession is my bank account. Some of my friends have simply put their children’s names on their bank accounts for convenience so that those children can pay bills and keep track of balances. An added advantage, it seems to me, is that when my friends pass away, their children will have access to the bank account without having to go to court or fight over who gets the account. This seems like a simple solution. What do you think?

Signed, Greta

DEAR GRETA:

It is common for elders to put one or more adult children on their bank accounts for convenience purposes. For example, the child joint owner can write checks, make deposits, and keep track of balances for their elderly parent. Joint bank accounts can also pass the account to the surviving joint owners upon the death of parent, with no need for probate. This can be helpful to the parent and their family, but I suggest there may be better ways to have the convenience of a child’s help and to pass the joint account to others.

Confusion may occur if the elder also had a Will besides the joint bank account. When the Will does not specifically mention how that joint account is to be distributed, confusion about the elder’s intention for the bank account may occur. For example, if a person’s Will does not specifically address the purpose of the joint bank account, the bank account and Will may work against one another. The two main purposes of naming a child as a joint owner on a joint bank account are for convenience and for distribution. Convenience means that the other joint owners may manage the account. Distribution means that the surviving joint owners get to own the account after the parent’s death, with no need for probate. The Will may say something to the effect of “all my assets are to be distributed equally amongst my children”. However, Minnesota Statutes Section 524.6–204 states that the joint nature of the account will trump such vague and general wording in a Will. To overcome this, the Will must have specific references to the joint account, presumably including the account numbers, and explicit direction on who is to get the bank account upon the parent’s death. If you changed your joint account by adding/removing owners, or changing banks, you would have to modify your Will to refer to the correct bank accounts. As you can imagine, changing your Will every time you changed accounts would be inconvenient and perhaps expensive.

Liability may be another problem with naming a child as a joint owner on the bank account. For example, let us suppose the child/joint owner forgot to pay their car insurance, had a car accident, was sued resulting in a court judgment against the child. The winner of that lawsuit may try to enforce the judgment against any asset that is in the child’s name. Since the child is a joint owner on the parent’s account, this could put the parent’s account at risk. Granted, the law says that the money belongs to the person who put it there, so the parent should eventually be able to stop this collection, but it will be a hassle to the parent. Similarly, if the child has debt of their own or gets divorced, creditors or the child’s spouse could make a claim for the bank account. Ultimately, they should not get it, but it will take time and effort to clear up.

There are better ways to allow your child to help manage your finances – ways that will not confuse your intent or incur the liability risks. Instead of naming a child as a convenience joint owner, you could name them as your “attorney-in-fact” or agent in a Power of Attorney for financial and property matters. The Power of Attorney can allow your child to manage your bank accounts if you choose to share that power with them. Your bank account will not be a target for any of your child’s liabilities, and no creditor can claim that the child owns the bank account since the child does not own any interest in the account. There are two types of Power of Attorney for financial matters, and you can have both at the same time. The most common is the Statutory Short Form Power of Attorney. You can also have an attorney draft a Common Law Power of Attorney designed to suit your individual needs, especially if you have a lot of assets, complicated assets, businesses or other considerations. The Power of Attorney is effective until your death, or until you decide to revoke the Power of Attorney. You do not give up any of your own power or authority to act in your own property or financial matters by having a Power of Attorney – it signifies your decision to share power over your financial matters. If the person that you select to share that power with under the Power of Attorney, chooses to act for you, that person has a duty to act according to your wishes. If not your wishes are not known, your agent has to exercise the powers in the same manner as a prudent person would do in their own matters and shall have your interests in mind. Your agent cannot use your assets and finances for their own purposes. Please note: because a Power of Attorney gives the agent access to all your finances and property, you should only name people that you trust as your agents. It is easy for an unscrupulous agent to use the Power of Attorney to steal. Avoid this be selecting trustworthy people to be your agent(s).

Because the Power of Attorney is only effective during your life, your child cannot use it to distribute your assets, such as your bank account, after your death. You can have a Will describing how to distribute the assets. However, you could also name one or beneficiaries on the bank account (“Payable on Death” or “Transfer on Death” beneficiaries, depending on the type of asset). During your lifetime, your beneficiaries have no access or right to the account, and you can change the designations at any time. These POD and TOD beneficiary designations will allow your beneficiaries to own the account after your death with no need for probate. Your bank will have a form to add or change beneficiaries. A similar option exists to distribute real estate, called a Transfer on Death Deed. Traditional options to avoid probate for real estate include Life Estates and Joint Tenancy. We strongly suggest that you discuss these options with an attorney familiar with probate, Medical Assistance, and estate planning before you make a decision about re-titling or adding beneficiaries to your assets, especially real estate assets.

Many people are worried that their estates will have to go through probate. Probate is a court proceeding that determines how to distribute your estate. Probate is not always a bad thing. Probate can be helpful if you want to direct what happens to your home after you die, you want to give some of your estate to charity, or you think the family is going to fight over your estate. Your Will can be very instructive in these cases and the probate court can make sure your wishes are followed. Probate sometimes is necessary. For example, if at the time of your death, you own real estate in your name only; or if your titled personal property (cars, accounts, etc) have no surviving owners or beneficiaries and totals more than $50,000, your estate will need probate to clear title to those assets. The probate court will use your Will to decide how to distribute your estate, and if you did not have a Will, they will use the Minnesota intestate statutes to decide. Typically, the intestate statutes say that if you have no surviving spouse, your estate goes to your children in equal shares. If a child dies before you, that child’s children (your grandchildren), take the deceased child’s share. If you have no children, and no grandchildren, your estate goes to your parents. If your parents have died before you, then your estate goes to your siblings in equal shares. The statute goes on like this until some family member is found. If you do not want your third cousin twice removed to get your estate, then you can have a Will directing who should get your estate and/or you can name beneficiaries on your assets. If you have a small estate (no real estate in your name only and your titled personal property is less than $50,000), your family can use a simple piece of paper called an Affidavit for Collection of Personal Property to get the title of the personal property (e.g. bank account) into their name, after waiting thirty days after your death.

It is reasonable to try to avoid probate and family conflict by making beneficiary designations and other planning steps. However, probate is not a major threat to passing significant value on to your heirs. Probate’s main disadvantage is the time it takes to get the estate distributed. What many people do not realize is that long-term care costs probably have a greater impact on the size of their estate that will be passed to their heirs. Many people in their older years will need assistance with living or medical needs, such as in-home care, assisted living, or nursing home care. At some point, most people cannot continue to pay for this care and will need Medical Assistance to pay for it. Certain time limits, including a five-year (plus one month) “look back period” can affect a person’s ability to give away, or otherwise protect, assets. If you are concerned about these types of ramifications, you should talk with an experienced elder law attorney as soon as possible.

I hope this information has clarified some of the benefits and drawbacks of using joint ownerships of bank accounts. There are many ways to deal with these considerations and some are very inexpensive. If you have further questions, contact us at the Senior Citizens’ Law Project or contact a private attorney to discuss your options further. The sooner you make decisions, the more options you will have. Many of the documents mentioned in this article are available at our office or at any attorney’s office.

More information can be found at www.LawHelpMN.org

The Senior Citizens Law Project Assists with Problems Involving:

Medical Assistance
Medicare
Medigap Insurance
HMO Problems
Health Care Directives
Supplemental Security Income – SSI
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Government Rehabilitation Loans
Age Discrimination
Nursing Home Problems
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Creditor Harassment
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