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By Swogger Bruce & Millar, Sep 19 2018 06:41PM

The reprieve is over. In 2015, the Department of Veterans Affairs proposed rules that would revamp its pension program which is commonly referred to as aid and attendance. The proposed rules would deny the pension benefits to veterans who transferred assets for less than fair market value like gifting, purchasing an annuity, or establishing an irrevocable trust. However, the proposed rules were never published in the Federal Register or implemented. Yesterday, September 18, 2018, the rules were published and will be applied starting October 18, 2018.


The new rules will impose a three-year look-back period that is similar to Medicaid’s five-year look-back period. Any transfer for less than fair market value made within the three-year period will penalize a veteran by preventing him from receiving pension benefits for up to ten years. The VA will take any assets transferred to meet pension eligibility requirements and divide that amount by the veteran’s maximum pension rate; the result will be the penalty period. While they share some similarities, the VA rules are significantly different than Medicaid’s penalty rules.


It does not appear that the changes are grandfathered, so, current applications that were submitted under the old rules could begin to be denied. You should also note that the ability to correct transfers for less than fair market value is much more limited than under the Medicaid rules. One of the changes that will affect my clients is that a veteran’s excluded homestead is only allowed two acres of land. Most of my clients, especially farmers, will have much more acerage than the limit. The excess land will cause planning complications.


It will take some time for the new rules to filter down to the VA manuals that determine application processing, but, there are a few things that are relatively clear: (1) annuities will no longer work for VA pension planning, and (2) gifting will not work for emergency planning, and (3) irrevocable trusts will not work for emergency planning. The VA rules provide incentive to plan as early as possible.


Please contact us if you are interested in a full discussion about the rule changes.



By Swogger Bruce & Millar, Sep 14 2018 02:57PM

Michigan will soon require that non-disabled Medicaid recipients work 80-hours per month or lose their health insurance. The nonpartisan House Fiscal Agency estimates that up to 54,000 Michiganders would lose health coverage and others would certainly face difficulties.


The CEO of the Michigan League for Public Policy has harsh words for outgoing Governor Snyder, Gilda Jacobs stated that Governor Snyder “betrayed the Healthy Michigan Plan and also betrayed the people it serves.” Governor Snyder stated that he is “committed to ensuring the program stays in place and that Michiganders continue to live healthier lives because of it.”

By Swogger Bruce & Millar, Aug 28 2018 08:11PM


Aretha Franklin.


Just saying her name makes you smile. She played a huge role in shaping our American experience with her gospel-rooted singing and diva-bluesy delivery. Her voice, her music, and the memories we have from listening to her, are precious treasures. We lost the Queen of Soul on August 16, 2018. Unfortunately, she died without a will, trust, or other estate plan. As a result, her estate likely will be distributed other than she had intended, and that process will likely lead to bitter and costly disputes over inheritances that will inevitably reduce the size of her estate due to attorney fees, court costs, and the long and arduous process of intestacy.



In one of her greatest hits (“Think”), Aretha warned that “you better think (think). Think about what you’re trying to do to me.” And in another, she noted that “chain, chain, chain, Chain of Fools. Every chain has got a weak link.” Had she spent the time and effort to “think” about the consequences of intestacy, she could have strengthened her chain and secured an orderly and efficient distribution of her estate with a carefully prepared estate plan.



Dying without a will or a valid and funded trust is known as dying “intestate”. This happens when a person dies without a valid will, or dies with a will that fails to effectively dispose of all of the person’s assets. When a Michigan resident dies intestate, his or her estate will be distributed according to Michigan law, and the assets are likely to be disturbed other than the deceased intended. Do you really want to leave it to politicians to determine how your assets are distributed?



If you die without a valid will or trust, then your estate will be distributed according to Michigan’s intestacy rules. These are default rules which determine to whom the estate is distributed (whether you like it or not). Intestacy proceedings are often complicated, costly, and vary depending on the value of the estate, and the type and number of family members you leave behind (often times, family members you didn’t even know you had: yes, they tend to come out of the woodwork?). Lawyers can make a lot of money battling it out in probate court over an intestate estate.

If you do not have a valid will or trust, or you have a plan than is old and needs to be reviewed and possibly updated, take this advice from a lawyer who benefits from the long, costly, and arduous process of intestacy: give yourself a little R-E-S-P-E-C-T and see an estate planning lawyer so you can avoid dying intestate.



Michael J. Swogger is an attorney with the Swogger, Bruce & Millar Law Firm, 10691 East Carter Road, Suite 103, Traverse City, MI 49684. Telephone 231-947-6800. mswogger@swoggerandbruce.com. He is a certified Probate and Estate Planning attorney through the Probate and Estate Planning Section of the State Bar of Michigan.



By Swogger Bruce & Millar, Jul 2 2018 04:46PM

On May 22, 2018, the Michigan Court of Appeals ruled on a common Medicaid planning technique. The case was In re Estate of Joseph Vansach, Jr. v. Department of Health and Human Services. The ruling was helpful in part, but mostly put limits on planning.



The Michigan Department of Health and Human Services argued that a probate court could not enter a support order directing some of a Medicaid recipient's income to his spouse. MDHHS asserted that it had exclusive jurisdiction to decide income diversion for a community spouse, or Medicaid laws preempted Michigan probate laws. The court of appeal shot down both of these arguments and confirmed that a probate court order may be used to change the Medicaid formula for a community spouse income allowance. This was the good part of the ruling.



The court of appeals ruled:



[A] community spouse is not entitled to have the probate court simply disregard Medicaid . . . in order that the community spouse may maintain his or her standard of living . . . [s]uch a procedure is not contemplated by EPIC, and it is a gross misapplication of the probate court’s authority to enter an order when money is “needed” for “those entitled to the [incapacitated] individual’s support.” See MCL 700.5401(3)(b) (emphasis added). Instead, the actual Medicaid-related realities facing the couple—with all of Medicaid’s pros and cons—become part of the couple’s facts and circumstances that should be considered by the probate court when considering whether to enter a support order a community spouse under MCL700.5401(3)(b). Ultimately, when a community spouse’s institutionalized spouse is receiving Medicaid benefits and has a patient-pay amount, a community spouse seeking a support order under EPIC must show, by clear and convincing evidence, that he or she needs money and is entitled to the institutionalized spouse’s support despite the CSMIA provided under Medicaid and the institutionalized individual’s patient-pay amount under Medicaid.



This was the bad part of the ruling because it placed an extremely high bar to clear to obtain relief from the probate court. We believe that the overall effect of this ruling will be to reduce support orders for community spouses.


By Swogger Bruce & Millar, Feb 19 2018 10:47PM

Michigan is exploring the radical idea of letter private HMO's administer its $2.8 billion long-term care program. The initial review of the idea is expected in July. Part of Michigan's justification is valid; Medicaid is fragmented into different programs administered by different entities. The main programs are nursing home long-term care, MI Choice Waiver for in-home care and assisted living, and PACE which strives to keep seniors in their home.

A consolidation of all the programs would be a good idea, letting private insurance companies control the care and funds is not a good recipe for improving the care of vulnerable Michigan seniors. The Michigan Association of Health Plans is lobbying hard to grab these funds. It is unlikely the health plans will prioritize care over profit.

The Area Agency on Aging Association of Michigan has issued strong statements against the plan. Area Agencies on Aging currently administer the MI Choice Waiver and PACE programs. The Health Care Association of Michigan, which represents state nursing homes, has issued statements indicating it is skeptical of the proposal; it feels Michigan does a good job of administration and profit-driven entities will not improve the administration or services.

The proposal has not garnered much attention, unlike the previous plan to privatize Michigan's mental health system. That proposal met with heavy resistance, but Michigan has managed to authorize a few pilot programs.

Any switch of Medicaid funds to private insurance should be scrutinized closely, and improving care should always be the focus, not profit.

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