Using a Special Needs Trust to Ensure Your Settlement Does Not Affect Public Benefits

Using a Special Needs Trust to Ensure Your Settlement Does Not Affect Public Benefits

In Wisconsin, Medicaid (sometimes also called Medical Assistance) covers 1 in 9 adults and 1 in 3 children; in fact, 16% of the Wisconsin population gets its health care coverage through Medicaid.  Unlike the similar sounding Medicare, Medicaid is a means tested, needs-based health care coverage program, which means there are various income and asset limits that determine a person’s, or his/her family’s, eligibility.

By virtue of being a means tested program, Medicaid eligibility can be affected by receipt of funds, such as a personal injury settlement, if proper steps are not taken.  For example, to qualify for Medicaid, a single person can have no more than $2,000 in total countable assets.  If that Medicaid recipient receives a personal injury settlement of $25,000, he or she is going to be above the asset limit and at risk to lose Medicaid coverage.  Considering the exorbitant cost of medical procedures and medications, the loss of Medicaid coverage, or any needs-based benefits, can be devastating.

No injury victim should face the choice of being fully and fairly compensated for his or her injuries versus keeping his or her health care coverage.  Such a harsh outcome can be avoided by transferring the settlement funds to a properly drafted “special needs trust.”  Under normal rules, if a Medicaid recipient gives away or transfers assets to someone else, or to a trust, this results in disqualification from Medicaid (a penalty period).  A special needs trust is a type of trust that is specifically allowed under the Medicaid rules as an exception to the asset transfer rule.  A Medicaid recipient can transfer assets to a special needs trust without disqualification, and the recipient will no longer be over the asset limit.  Although the injury victim no longer has access to the funds, the trustee of the special needs trust can make distributions for his or her benefit, and there will be no loss of public benefits.

For example, our hypothetical accident victim, Courtney, receives a $25,000 settlement but is on Medicaid and Social Security Income (SSI), which are public benefits with asset limits.  Courtney wants to save this money for a car (a non-countable asset) or other items but is not sure what she would like to purchase.  If she is going to stay on public benefits, she only has ten days to report that she has received the money, and then will receive a notice that her benefits will be terminated.  Instead, Courtney’s attorney creates a special needs trust for Courtney, naming her mother as the trustee.  Courtney transfers the $25,000 to the trust without any disqualification for public benefits.  Later, Courtney decides she wants to buy a car with the settlement proceeds.  The car is bought and paid for by the special needs trust; the funds to buy the car come directly from the special needs trust, not Courtney.  Courtney gets her car and continues to receive Medicaid and SSI.

It is important to remember that Medicaid and SSI are just a couple examples of means tested/needs-based public benefits that could be affected by receipt of personal injury settlement funds.  This all serves to highlight the risk of going it alone following an accident or injury, as well as the need to hire a skilled attorney.  To be sure, when the insurance adjuster is pressuring you to settle your claim, the insurance company is not going to care whether the settlement will cause you to lose your public benefits.

 

What Do I Do Now That I Have Been in a Motor Vehicle Accident?

What Do I Do Now That I Have Been in a Motor Vehicle Accident?

When you head out on the road, a motor vehicle accident is the last thing you want to happen. However, if you fall victim to a motor vehicle accident on account of another driver’s negligence, you do not want to do anything to jeopardize receiving full compensation for your injuries and damages.

The first thing you want to do is address the immediate medical needs of yourself and others. If you, a friend or family member are able, get the names and contact information from potential witnesses and take photographs of the scene and vehicle damage. Responding officers will likely want statements. Following the incident, be sure to contact the responding agency and request copies of all reports, 911 calls, dash cam video, body cam video, photographs, statements and any other evidence that may have been gathered from the scene of the accident. Depending on the location, street camera surveillance may be available as well. Some of this evidence, especially body cam video, may be discarded shortly after the accident. Therefore, it is critical you request this information promptly. In reviewing the reports and your statement, if you believe there are errors or omissions, bring this to the attention of the responsible agency as soon as possible.

Contacting your insurance company promptly is important as well. Immediately review your most recent insurance declarations. If you have what is referred to as underinsured or uninsured motor vehicle coverage (UIM/UM), your insurance company may provide coverage for injuries and damages you sustained as part of the accident if the negligent party has insufficient insurance coverage or no coverage at all. Your insurance company will also need to be notified to address the property damage to your motor vehicle.

You will also most likely be contacted soon after the collision by the other driver’s insurer. His or her company will likely want to abruptly resolve matters with you for an amount that may be far less than the true value of your loss. If your accident occurred in the State of Wisconsin, you have 3 years from the date of the accident to bring a lawsuit. Therefore, there is no immediate need to settle your claim within days or weeks of the accident. What may seem like an expected ache or pain that you feel will go away in days or weeks, could be a far more serious (even permanent) soft tissue injury. Waiting to more fully assess the extent of your injuries and damages is vital to being fully compensated.

The other driver’s insurance company will also likely want you to give a statement that is recorded. This insurance company does not represent you and does not have your best interests in mind. This statement could be used against you later. You have no obligation to give a statement to the other driver’s insurer. If you do give a statement, you are entitled to a copy of the statement and we recommend securing one as soon as possible.

If you are involved in a motor vehicle collision, the attorneys at Anderson O’Brien are here to help. We have decades of experience representing those injured in motor vehicle accidents to ensure that they are protected. We are only a call away.

 

How to Address Family Conflicts Concerning Caregiving for Aging Parents

How to Address Family Conflicts Concerning Caregiving for Aging Parents

Having adult children provide care and support to an aging or ill parent can be very helpful, but in some cases, can be a cause of stress and family conflict.  Caregiving can bring families closer as they provide mutual support, but in some situations, the stress and pressure of caregiving leads to strained relationships.  This strain may be caused by old patterns of family dynamics involving unresolved past wounds or childhood rivalry or, in some cases, because one or more children are unable to accept the reality of the parent’s illness and eventual death.

Often, conflict is caused by an unequal division of caregiving duties. A parent will typically name one child as agent to make health care and financial decisions in the event of incapacity by completing health care and financial powers of attorney.  The parent will usually choose the person they believe to be the most responsible, the most available or the closest in proximity.  Regardless of the reason, choosing one sibling over another sometimes leads to the caregiving child feeling overburdened with shouldering all of the caregiving duties while the other siblings feel resentful, left out and sometimes suspicious of the caregiving child’s actions.  These feelings often lead to individuals seeking the advice of an elder law attorney regarding the designation of one of the children as agent in a power of attorney. The advice that is most typically sought includes: the validity of the Power of Attorney, agent decision making, financial feuds and the mistreatment of the parent(s).

Questioning the Validity of the Power of Attorney.

Since a person must be competent in order to appoint an agent under a power of attorney, accusations are often made that the parent did not understand the documents or was unduly influenced to sign a power of attorney.  If the parent truly was not competent, Adult Protective Services can step in or the power of attorney can be invalidated.   However, if the accusations are more related to the dissention between family members, the result can often entail an investigation into the agent’s actions that ultimately only results in more family tension and unnecessary legal costs on both sides.

Agent Decision Making.

If siblings do not trust the child who is named as agent, it can cause ongoing questioning of every detail related to the agent’s decisions.  Sometimes, siblings challenge legitimate decisions made by the agent child because they are not as informed or do not understand, which results in continuing resentment and exhaustion on the part of the caregiver.  If an agent is actually making questionable decisions, Wis. Stat. s. 244.16 provides for the actions of a financial agent to be reviewed by the court and Wis. Stat. s. 155.60(4) provides for the actions of the health care agent to be reviewed by the court.

Financial Feuds. 

Finances are a huge source of dissention between family members.  Using a parent’s funds to provide for long-term care will likely reduce potential inheritance, leading to discord between siblings who are not supportive of the type of care being provided.  Also, a caregiving child will sometimes request compensation for caregiving services.  Although such payments are allowed by law, the caregiver’s siblings might object to such payments.   Potential heirs can bring a legal action to review the financial conduct of an agent who has acted illegally or unethically, or petition the court for guardianship to allow for court oversight of the actions of the person in charge.

Abuse, Neglect and Financial Exploitation.

In some cases, the caregiver may be accused of elder abuse, neglect or exploiting the finances of the parent.  These concerns can be reported to Adult Protective Services.  If necessary, a concerned family member can obtain an injunction under Wis. Stat. s. 813.123, to restrain the caregiver from further abuse or financial exploitation.

While an elder law attorney can help with legal remedies for agents who are abusive or exploitative, in most cases the emotional issues are better addressed by opening the lines of communication on both sides.  The following are potential actions that the caregiver and siblings can respectively take to open the lines of communication.

For the caregiver

  • Communicate with family members. Even if you do not all get along, let everyone know what is happening with their parent, both personally and financially.
  • Initiate family meetings, even if everyone will not participate. Discuss the current health and financial status and the next steps.
  • Make a list and prioritize the types of services and support that the parent needs now and may need in the future.
  • Identify what support can be provided by the caregiver, other family members or outside services.
  • Ask for help, and delegate appropriate responsibility to willing family members.
  • Remember that as caregiver, you may end up carrying a heavier load than your siblings and some may not help at all. Having more responsibility may not feel “fair,” but the more important issue is to make sure your parent is receiving appropriate care.

For the siblings of the caregiver

  • Accept that the caregiver child has likely been chosen by the parent because of the trust your parent had in him or her, and not because your parent did not want you to act.
  • Attend family meetings and ask questions about status, next steps and services needed.
  • Be clear about what help, if any, you are willing and able to provide so that the caregiver’s expectations of you are appropriate. Caregiving can be exhausting and emotionally draining.  If you cannot take on specific responsibilities, offer to be a sounding board or a listening ear when the caregiver needs to vent.
  • Consider using outside sources to work through family issues such as mediators, counselors or social workers. A third party can be valuable in providing perspective without taking sides.

Since everyone’s situation is different, there is no solution that will work for every family in terms of dealing with caregiving and family conflict.  Open and honest communication, focused on the needs of the parent, however, can eliminate some of the tension and hard feelings, resulting in better help for the parent and better help for each other.

 

Best Practices for Using Volunteers in Your Wisconsin Non-Profit.

Best Practices for Using Volunteers in Your Wisconsin Non-Profit.

The great majority of work performed by non-profits comes from unpaid volunteers. While volunteers can be vital to helping a non-profit reach its goals, their presence raises certain risks that leaders of non-profit organizations should be aware of to craft effective policies for their recruitment, management and retention.

The typical non-profit organization in Wisconsin is simultaneously subject to two sets of laws. The entity is organized under state law, specifically Chapter 181 of the Wisconsin Statutes, titled “Nonstock Corporations.” However, an organization’s tax-free status is controlled by federal law, specifically Section 501(c)(3) of the U.S. Internal Revenue Code, which generally requires the organization be operated for the sole purpose of pursuing one of several listed causes recognized as deserving tax-free treatment. The many requirements of these laws are beyond the scope of this article, but they affect certain aspects of volunteer management practices.

Recruitment:

Before you can manage your volunteers, you must recruit them. Consider how potential volunteers are screened and appropriate policies are put in place. A bad fit can be more trouble than they are worth, and someone with bad intent or ulterior motives can be disastrous both to the organization and to the cause it is trying to help. Outside of the damage an ill-intended individual can cause directly, bad press from being associated with that person can do lasting damage to an organization’s reputation.

The screening process can be as simple as an application form and/or interview asking relevant questions. A more thorough screening may also include background checks. The extent of the screening process should be commensurate to the level of trust that will be placed in that person. Volunteers entrusted with responsibility over expensive goods which can be stolen or vulnerable people who can be abused should be screened with extra caution. These concerns must be balanced with making volunteering as simple and easy as possible, so volunteers do not lose interest when faced with a daunting application process.

During recruitment, take steps to ensure no improper biases or discrimination are applied to volunteer selection. Discrimination against protected classes is generally illegal, even for non-profits. Among the classes protected by anti-discrimination laws are: age, sex, religion, national origin, race, disability or genetic status. Many of these laws are written with the employment context in mind, but there is legal precedent for their application to unpaid volunteers in certain circumstances. Although the law is unclear in many cases, the safest route is to assume anti-discrimination laws will apply. Some types of organizations have limited exceptions to these rules. For example, religious organizations have a narrow window allowing discrimination on the basis of religion. Discrimination laws are complex and you should consult with an attorney if you believe a decision or practice could potentially expose the non-profit to legal action. Even if a form of discrimination is technically allowed under current law, an organization known to discriminate against certain groups may lose moral credibility, which can translate to reduced donations. Additionally, the non-profit risks losing out on federal funding or contracts.

Another concern with incoming volunteers is their classification within the organization itself. Non-profits in Wisconsin can either have members or not have members. If you are unsure whether a non-profit has members, the Articles of Incorporation filed with the State of Wisconsin will indicate the classification. If an organization has members, they may have voting and other rights to control the organization. If the non-profit is a member organization, be careful to be clear who is a member with these rights, and who is a volunteer.

Training and Supervision:

Once a non-profit has recruited volunteers, they must be trained and supervised to perform their duties. A volunteer orientation process promotes consistent training among volunteers and can ensure vital information is passed to everyone working on behalf of the organization. Key policies and procedures, as well as a mechanism for volunteers to get answers to any questions that may arise during the course of their duties, should be implemented and addressed. While certain training procedures should be uniform across all volunteers, job specific training should also be given based on the task the volunteer will be performing. Job duties may change over time, so updates and refresher training will likely be necessary, even for frequent volunteers.

In addition to initial training, a volunteer handbook can serve as a reference for important procedures and rules for volunteers. Detailed handbooks can also help protect the organization from liability should a volunteer do something against the organization’s policy. Some things a volunteer handbook should include are: non-discrimination and non-harassment policies, confidentiality rules, policies and permission statements for information and images of volunteers in promotional materials, policies for working with certain vulnerable groups, attendance, scheduling, conduct expectations and emergency procedures. This list is non-exhaustive and most non-profits will have unique policies to address their specific functions and organizational structure. It is important the handbook reflect current practices for the non-profit. Thus, it should be reviewed and updated regularly. Changes should be identified to existing volunteers so they are aware of the new expectations and they should be provided with the new handbook.

As discussed in the above “Recruitment” section, a non-profit should exercise care to avoid discrimination against or by volunteers. Monitor both supervisors and other volunteers for signs of discrimination or harassment. Harassment can include continuous jokes or jeers directed at a volunteer’s expense, or otherwise creating a hostile environment for them to perform their volunteer duties. Outside of legal concerns, not allowing such behavior can help keep volunteers eager to return and be productive in their duties.

Liability Protection:

When a volunteer makes a mistake, becomes injured, or otherwise takes action which gives rise to a legal claim, there are two major sources of protection for the organization and the volunteers themselves: state law and insurance.

In Wisconsin, a volunteer who provides services to a non-profit has limited liability under state statutes for damages arising from their acts as a volunteer, subject to certain exceptions including, but not limited to, violations of criminal law, willful misconduct if they are also an employee of the non-profit, or if the act was in their capacity as an officer or director of the organization.

Given the long list of exceptions, it is safest to procure insurance. Insurance also can help pay for the expenses of a volunteer who is injured while performing their volunteer duties. Many organizations purchase volunteer liability coverage to protect themselves and their volunteers from the costs of personal injury or property damages stemming from their volunteer duties. Auto insurance should also be considered if the volunteers will either be driving or riding in a vehicle as part of their volunteer duties. Wisconsin has minimum insurance requirements for all drivers, but these amounts are not nearly enough to cover expenses incurred in all but minor accidents.

Incentives:

By definition, volunteers should not expect payment in return for their services. Regardless, many non-profits desire to reward their loyal volunteers with some token of appreciation for their hard work. This can create issues with accidently classifying the volunteers as “employees,” or with the tax-exemption of the organization under federal law.

The tax-free status of an organization can be revoked if the organization is providing a “private” rather an “public” benefit. This can happen if monetary or other valuable rewards are given to volunteers. Likewise, the classification of a volunteer versus an employee is in part based on whether they receive anything in exchange for their work. Non-cash benefits to volunteers are allowed to a point, but beyond this hard to define threshold, problems can quickly accumulate. One thing is clear, avoid giving cash or gift cards to volunteers if the non-profit is looking for ways to reward its volunteers.

The laws regarding volunteering and Wisconsin non-profits can be complex and you should consult with an attorney if have questions about recruitment, training and supervision, liability protection and incentives for your non-profit.

 

Flood Damage – Is Your Home or Business Covered?

Flood Damage – Is Your Home or Business Covered?

Flooding is the nation’s most common natural disaster, which causes billions of dollars in damage each year. Just one inch of water can cause $25,000 in damages to your home. Flooding can result from natural disasters such as hurricanes, excessive rain, or events such as excessive snow melt and rising water levels in rivers and lakes due to ice dams or snow melt. Wisconsin was hit hard by flooding as a result of excessive snow melt in early Spring 2019, and many residents contacted our firm to address potential recovery under their insurance policies.

Unfortunately, the fact is, regardless of whether the flooding at your home or business is a result of a natural occurrence, most homeowner’s and business insurance policies do NOT provide coverage for flooding. Additionally, sewer backup or sump pump overflow is not covered by a standard homeowner’s insurance policy or by flood insurance. This type of coverage must be purchased with a special endorsement on your homeowner’s policy.

Those who live in areas that are at high risk for flooding, based upon government flood zone maps, may be required to obtain flood insurance as a condition of receiving a mortgage from a federally regulated or insured lender. Even if federal law does not require it, a lender may still require that you possess flood insurance. If you live in a high risk area, you may be able to purchase a policy through the National Flood Insurance Program (NFIP) through the Federal Emergency Management Agency (FEMA).

If you live in a low risk flood zone or in areas that typically have a low risk for flooding, flood insurance is not federally required. However, flood insurance may still be worth considering, because over 20% of flood insurance claims come from outside the high risk areas. You will need to check with your insurance agent whether it is possible to purchase flood insurance through a private insurance company or if your community participates in the National Flood Insurance Program where flood insurance policies should be available for purchase. Based upon the web site www.fema.gov, both Stevens Point and the Village of Plover, the area in Wisconsin our firm is located, are communities which participate in the National Flood Insurance Program.

How much flood insurance coverage is typically available through a flood insurance policy? In a one to four family residence, there is typically $250,000 in coverage for the structure itself and $100,000 for the contents. For a business, there is typically $500,000 for the structure and $500,000 for the contents.

There is typically a 30-day waiting period from the date you purchase the flood insurance policy before your policy goes into effect. Therefore, you cannot afford to wait until an imminent threat of flooding before you purchase flood insurance to protect yourself. Additionally, if you have flood insurance, make sure that you do not let your policy lapse, as that will cause you to lose coverage and you may not be in compliance with the terms of your Mortgage Agreement if your lender requires flood insurance.

For more information on which private companies sell flood insurance and to learn additional information on other questions you may have about the National Flood Insurance Program, please check out the following website: www.floodsmart.gov. Another resource you may wish to consult is the Wisconsin Office of the Commissioner of Insurance: www.oci.wi.gov. These are valuable resources that can lead you into the right direction as you consider protecting your home or business from flooding in the future.

 

In Spite of the Law

In Spite of the Law

The law, to borrow a quote from Winston Churchill, “is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key.” That “key” is often found in the Wisconsin Statutes which is affectionally referred to as the book of surprises.  Hence, when faced with the proverbial question of whether “fences make good neighbors” it made sense to scour the Wisconsin Statutes for an answer. Behold!  Such a timely question has an answer and it is: not necessarily. Wisconsin law prohibits the construction of spite fences. In the words of the legislature:

“Any fence, hedge or other structure in the nature of a fence unnecessarily exceeding 6 feet in height, maliciously erected or maintained for the purpose of annoying the owners or occupants of adjoining property, shall be deemed a private nuisance. However, nothing herein contained shall limit the right of a municipality to forbid the erection of a fence less than 6 feet in height.”

Spite fences were not always held in such low esteem in this great State. Circa 1900, from the quaint village of Glenbeulah, Wisconsin comes the case of Metzger v. Hochrein. The Court described Metzger’s property as “surrounded by made lawns and yards, making an attractive and valuable home.” Standing accused of erecting a spite fence, Hochrein set “rough” tamarack posts, from eight to sixteen feet high along the border between the properties. Making things worse, the Court described that between these posts was a “tight board fence of rough, old, unsightly, and partly decayed lumber from an old ice house.” Ignoring the adage to love thy neighbor, the Wisconsin Supreme Court dismissed the case. In language that seems whimsical today, the Court endorsed the right to annoy one’s neighbor:

“This is one of the many cases that may arise where the doctrine of personal liberty and personal dominion of one over his own property enables him to do things to the annoyance of others, not causing actual, material physical discomfort to them, for which there is no punishment, except loss of that respect which every right-thinking man desires from his neighbors, and the possession of which is a source of daily enjoyment. If one is so constituted as not to be susceptible to those feelings which a reasonably well-balanced man is supposed to possess, and is so constituted as to obtain more pleasure out of needlessly annoying others than by securing and retaining their respect as a manly member of society, his sovereign right in his own property, to use it as he may so far as that use does not physically extend outside his boundaries to the detriment of others, may be so exercised as to violate the moral obligations which every member of society owes to his neighbors, without any penalty being visited upon him for his misconduct, of which he can be made conscious.”

However, the unbridled ability to irritate neighbors did not last long. In 1903, an early version of the spite fence statute was passed in reaction to the Supreme Court’s decision in Metzger v. Hochrein. Now, some modern examples help us understand the mash-up of words contained in the spite fence statute. For an example from Utah, would a “Redneck Stonehenge” consisting of three old cars upright in the ground, erected after a neighborly dispute constitute a spite fence? The answer in a word – yes!  Closer to home, a Wisconsin appeals court in the case of Apple Hills Farms v. Price found that an “exposed thirty-two feet long, twelve feet high bare concrete wall” near a property was a spite fence. The facts of the Apple Hills Farms’ case provide a textbook definition of spite. Price, the erector of the wall, told the contractor building the wall that he wanted the wall “ugly” to devalue his neighbor’s property. Surely, it did not help his case that he sprayed grass killer on his neighbor’s lawn to spell “A-hole.” Price’s spite bit him back in the end when the court ordered that he pay his neighbor $150,000.

Upon reflection, the law may not be able to answer the question of whether fences make good neighbors, but it shows that at times, fences certainly make spiteful neighbors. To close, Robert Frost’s poem “Mending Wall” fittingly contains the following contemplative prose: “Before I built a wall I’d ask to know what I was walling in or walling out, and to whom I was like to give offense.”

 

Pin It on Pinterest