Lack of Planning Could Lead to Loss of Family Home!
Author: Alyson Fudge, Esq.
A sad lesson in why taking legal advice from non-lawyer professionals can cost more than anyone might ever guess.
I received an interesting call a couple of weeks ago from a lady in the Upstate of SC. I knew this day was going to come, but I must confess no satisfaction in the fact that it eventually did. An adult daughter was calling—completely distraught. Mom was on Hospice for dementia for several months. After several months of wonderful care, Mom passed away. Dad is still alive, and Mom’s estate is in probate. But here is the kicker—while Mom was alive, she signed herself into Hospice. Even though she had been referred to Hospice for Dementia, she signed her own Hospice paperwork. She had no Health Care Power of Attorney and no Durable Power of Attorney. The social worker told the family that it was okay for Mom to sign her own paperwork. So far—there is nothing out of the ordinary with this story. Despite my assurances that this is a horrible plan, adult children watch their parents do this every day, and everyday Hospice social workers tell adult children that it is absolutely fine. But what well-meaning social workers who didn’t go to law school don’t know is that this is a very dangerous and expensive plan. Why? Well, it’s a bad plan because Mom was put on Hospice by her primary care physician for Dementia. And Hospice is paid for Medicare—the same people who supply Mom with her health insurance. The Medicare people talk to each other because they are the same people, different departments paying for same person. Medicare is running out of money and is looking for claims to deny. This one is perfect. Why is it perfect? Because Hospice is both a healthcare benefit and a financial benefit (after all—it is fully paid for by Medicare—not the patient). Medicare is starting to audit files looking for reasons to deny coverage. When someone’s mental capacity is impaired, they are not supposed to sign legal documents—at all. Repeat after me: No legal documents—none, none, none. If there are no Powers of Attorney for Health Care and/or Finances, someone is supposed to go to the nearest Probate Court and petition for legal authority to make these kinds of decisions on behalf of a spouse or parent (aka Guardianship and Conservatorship). Without the signature of someone who has not been diagnosed with Dementia and who also has the legal authority to contract with Medicare via Hospice, Medicare can and did decline coverage. And in this case, the Hospice organization who rendered services but didn’t get paid ended up filing a six-figure claim against Mom’s estate. Mom didn’t have six figures in the bank. Neither does Dad. So the home that Dad is still living in is going to have to be sold to pay the creditor’s claim. The daughter acknowledged that she went to see an Elder Law Attorney when Mom’s dementia started to get worse, but didn’t believe that her parents should have to pay for the costs of a Guardianship/Conservatorship action. The Hospice social worker told her it wasn’t necessary. So instead, Dad and Mom’s estate are paying out of pocket for Hospice—and losing the family home in the process. I don’t know if the social worker still thinks this is a good plan, but I can guarantee that the daughter does not.
Elder Law Attorneys can help with a number of items including; wills/trust, durable power of attorney, health care power of attorney/living will, guardianships/conservatorships, special needs trusts, Medicaid/VA benefits, social security, probate/estate settlements, mental capacity issues, probate avoidances, & asset protection. If you have questions regarding any of these topics please consult with an Elder Law Attorney and don’t take someone else’s non-professional advice.