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Alzheimer’s & the Law: Protecting Yourself and Your Family

2011- 2012 Edition Developed in collaboration with

Introduction Richard A. White

Elder Law Attorney, JacksonWhite Attorneys at Law

Alzheimer’s patients have many unique long-term health care decisions to confront. Are my assets protected for my family? How will I pay for long-term care? Who will make medical decisions for me when I am unable to do so? Answering these questions does not have to be overwhelming; there are resources available to help answer these and other long-term care questions. JacksonWhite’s Elder Law department will be happy to answer questions about long-term care, Medicaid/ALTCS, Veteran’s benefits, special needs trusts, estate planning and advance directives. Our website,, provides guidance on such issues with daily blogs, newsletters and answers to frequently asked questions. JacksonWhite also recently launched MyALTCS (, a web-based tool that helps users understand the ALTCS application process, alerts them

about potential ALTCS eligibility issues and provides insight on how they may become eligible for the benefit. Together with the Alzheimer’s Association Desert Southwest Chapter and the Arizona Alzheimer’s Consortium, we have created this guide to answer questions about financing long-term care, senior housing options and advance directives. We are grateful to have wonderful organizations like these working the front lines of the fight against Alzheimer’s. JacksonWhite commends these organizations for the services they provide to Alzheimer’s patients and their families. We would also like to acknowledge the dedicated individuals at Banner Alzheimer’s Institute for their contribution to this guide as well. JacksonWhite hopes that this guide and these organizations and resources are helpful.

JacksonWhite Attorneys at Law

1.800.243.1160 | 480.464.1111

40 North Center Street, Suite 200 Mesa, Arizona 85201

Additional office in Peoria

© 2011- 2 012 JacksonWhite, P.C. All rights reserved. This publication is provided for informational purposes only and should not be construed as individual legal advice. Please consult a knowledgeable attorney regarding your specific legal needs.

Table of Contents I.

Our Contributors


Plan Ahead With Advance Directives


Financial Management


Estate Planning


Long-Term Care Options


Paying For Long-Term Care



VIII. Finding Professional Assistance IX.

Business Directory

1 2 7 8 10 11 19 21 23

Our Contributors Thank you to the Alzheimer’s Association Desert Southwest Chapter and the Arizona Alzheimer’s Consortium for their collaboration and support of this guide and for their work in the fight against Alzheimer’s. Arizona Alzheimer’s Consortium: Banner Alzheimer’s Institute Banner Sun Health Research Institute Arizona State University TGen Barrow Neurological Institute University of Arizona Mayo Clinic Arizona

JacksonWhite Attorneys at Law In addition to Elder Law, JacksonWhite has attorneys practicing in the following legal areas: Business/Corporate Law • Commercial/Civil Litigation • Construction Law Criminal Law • Chapter 7, 11, 13 Bankruptcy • Eminent Domain • Employee Benefits Estate Planning • Financial Institutions • Creditor/Debtor Issues • HOA Law Guardianships/Conservatorships • Family Law • Small Business Representation Mediation Services • Medicaid/ALTCS Planning • Personal Injury Law Insurance Related Disputes • Labor and Employment Law Probate Law • Real Estate Law • Tax Law For more information on these practice areas, call the JacksonWhite Elder Law department at (480) 464-1111.

Alzheimer’s & the Law: Protecting Yourself and Your Family


Plan Ahead

With Advance Directives Creating advance directives allows people to appoint an agent who can act on their behalf if they lose capacity. While everybody ought to establish these documents, it is particularly important for those diagnosed with Alzheimer’s disease. Because creating these documents may be the only way for them to have a say in their health care decisions, advance directives are among the most useful legal tools for people with Alzheimer’s disease to have in place. If at all possible, Alzheimer’s patients should establish the following advance directives: ◗ Health Care Power of Attorney (HCPOA) ◗ Mental Health Care Power of Attorney (MHPOA) ◗ Financial Power of Attorney (FPOA) ◗ Living Will ◗ Do Not Resuscitate (DNR) Alzheimer’s patients who have slipped into the later stages of the disease without establishing any advance directives might find the following options quite helpful: ◗ Guardianships ◗ Mental Health Guardianships ◗ Surrogates ◗ Conservatorships


Healthcare Power of Attorney (HCPOA) With a health care power of attorney, people can designate an agent to make their health care decisions if they lose capacity. For as long as they have sufficient capacity, principals under an HCPOA can revoke or change the HCPOA at any time. Because capacity is required to create such a document, those in the early stages of Alzheimer’s ought to create an HCPOA while they are able. An HCPOA document must: ◗ Clearly delegate power to make health care decisions to a specific person; ◗ Be signed by a principal who is of sound mind and free from duress; ◗ Be witnessed by at least one adult who is not the agent, relative, or heir to the principal, or directly involved in providing health care to the principal. When appointing an agent, people need to select somebody who is willing to make important decisions on their behalf. To make sure the appointed agent can take action if needed, people should also provide a copy of their HCPOA (and all other advance directives) to their physician.

Mental Healthcare Power of Attorney (MHPOA)

Alzheimer’s & the Law: Protecting Yourself and Your Family

When creating powers of attorney, people may appoint the same person or somebody different to make their mental health care decisions under the authority of a mental health care power of attorney (MHPOA). This document is important because without it an appointed agent cannot obtain inpatient mental health treatment for a principal without the court’s permission. An MHPOA can either be a standalone document or incorporated into a regular HCPOA so that one document covers both medical and mental health issues. Principals can revoke or change their MHPOA for as long as they have capacity. By creating an HCPOA and an MHPOA, Alzheimer’s patients allow their family to obtain suitable health care on their behalf without involving the court.

Guardianships Alzheimer’s patients who lose capacity and do not have an HCPOA may need a court appointed guardian to make certain decisions for them. Likewise, if the validity of an HCPOA is disputed, the court may also appoint a guardian. A guardian’s authority is limited to determining proper medical care and living arrangements; guardians do not make financial decisions. Specifically, a guardian’s responsibilities may include: ◗ Arranging an appropriate living situation based on the ward’s needs, abilities and financial resources.

◗ Placing the ward in an assisted living or skilled nursing facility if necessary. ◗ Making sure the ward has appropriate and sufficient clothing. ◗ Making sure the ward receives appropriate medical care. ◗ Reporting to the court on the ward’s health, welfare and status.

Appointing a Guardian Establishing a guardianship can quickly become complicated to those who are unfamiliar with the process. Just to initiate a guardianship proceeding, for instance, somebody must petition the court and provide testimony in a hearing as to why the guardianship is necessary. If the court agrees that a guardianship is needed, it will appoint a guardian within eight weeks or so. While people are not required to have legal representation in guardianship proceedings, those who do are much more prepared to effectively navigate this process. Answers to the following questions will be helpful to those determining whether an Alzheimer’s patient could benefit from a guardianship: ◗ Does he/she have difficulty doing familiar tasks? ◗ Can he/she communicate coherently? ◗ Does he/she take medications as directed?

Alzheimer’s & the Law: Protecting Yourself and Your Family


◗ Does he/she have extreme mood swings for no apparent reason? ◗ Does he/she become easily agitated, aggressive or combative? ◗ Does he/she often lose things or put things in inappropriate places? ◗ Does he/she forget where he/she is? ◗ Can he/she attend to and provide necessary food, shelter, clothing and medical care? ◗ Can he/she keep safe in stressful or emergency situations? Even those who have a power of attorney in place may eventually require a guardian if the agent under the power of attorney becomes unwilling or unable to act. Other times, principals themselves become uncooperative or antagonistic, and they prevent the agent from assuming responsibility. Alzheimer’s patients in such situations may be unable to obtain suitable care, treatment, and placement without a guardian’s help.

Mental Health Guardianships Although people with Alzheimer’s disease often require inpatient mental health treatment, guardians can only give consent for outpatient mental health care. The way to ensure suitable inpatient care is to also establish a mental health guardianship granting the guardian authority to


consent to inpatient mental health treatment. The catch here is that mental health guardianships only remain effective for a limited period of time, so timing is very important. They can be established during an initial guardianship proceeding or any time thereafter, but those seeking one should approach the issue carefully to ensure that the guardian has authority to act if and when it becomes necessary.

Surrogates It is not uncommon for Alzheimer’s patients who have neither powers of attorney nor a guardian in place to encounter a health crisis. In such a scenario, the law permits a surrogate to step in and make health care decisions on that person’s behalf. The law gives priority to the following people in the order given to act as a surrogate: ◗ ◗ ◗ ◗

The person’s spouse. The person’s child. The person’s parent. The person’s domestic partner if the person is unmarried and nobody else has accepted financial responsibility. ◗ One of the person’s siblings. ◗ A close friend of the person who knows the person’s health care wishes. ◗ The person’s attending physician if nobody else can be located. While surrogates can obtain ordinary health care for the person under their stewardship, they cannot withdraw

Alzheimer’s & the Law: Protecting Yourself and Your Family

life-sustaining treatment, nor can they consent to inpatient health care on the individual’s behalf. Alzheimer’s patients can make sure somebody is ready to help them with these issues, however, by establishing powers of attorney while they still have capacity.

Financial Power of Attorney (FPOA) With a financial power of attorney, Alzheimer’s patients can appoint an agent to handle their financial and legal obligations. Here again, while everybody ought to have such a document in place, it is particularly important for people with Alzheimer’s disease. To establish a valid FPOA, individuals must adhere to these guidelines: ◗ The principal must understand the nature and effect of signing an FPOA. ◗ The principal must sign the FPOA willingly. ◗ The principal must initial any paragraph in the FPOA which benefits the agent. ◗ A notary and witness other than the agent, the agent’s spouse, or the agent’s children must sign the FPOA. ◗ An FPOA can be revoked or changed for as long as the principal remains competent. When creating an FPOA, Alzheimer’s patients must select an agent they completely trust, as they will be in

a vulnerable state if the agent ever assumes control of their finances. To add an additional layer of protection, Arizona law requires principals to initial every FPOA provision that grants agents any benefit. Agents who take any benefit that is not specifically and expressly authorized in the power of attorney itself can then be charged with civil and criminal penalties. Only FPOAs that meet specific requirements are valid, although they do not have to be on any specific form. Free downloads of valid FPOA and other POA forms are provided on JacksonWhite’s Elder Law website, online at

Conservatorships It is not uncommon for Alzheimer’s patients to lose capacity before they have established a valid FPOA. When this happens, courts may appoint a conservator to make financial decisions on their behalf. Depending on the circumstances, courts can create a very limited or a very broad conservatorship, which may include authority to: ◗ Pay debts and expenses. ◗ Bring or defend legal actions. ◗ Make an inventory indicating the fair market value of each asset. ◗ Prudently invest. ◗ Acquire or dispose of property. ◗ Handle insurance claims. ◗ Preserve and protect estate property.

Alzheimer’s & the Law: Protecting Yourself and Your Family


◗ Pay income and property taxes. ◗ Provide the court with an annual accounting of every expense.

Appointing a Conservator Conservatorships can only be established under the court’s direction. Generally speaking, Alzheimer’s patients who have lost capacity go without a conservator unless and until a family member petitions the court to appoint one. The court may appoint a conservator if it agrees it is necessary after holding a hearing, but this process tends to take about eight weeks. When determining whether an Alzheimer’s patient needs a conservator, families should ask: ◗ Can he/she handle every day financial issues such as writing checks or balancing a checkbook? ◗ Could he/she be easily persuaded to give away money or property? ◗ Does he/she have a grasp of what and where his/her assets are? ◗ Has he/she been a victim of scams?

An Attorney Can Help Create Guardianships and Conservatorships Families of Alzheimer’s patients ought to consult with a professional if they see that a guardianship or conservatorship might offer


protections to the person they love. A knowledgeable attorney can evaluate powers of attorney, trusts and wills to determine whether a guardian or conservator is really necessary. It may well be that an existing document makes a guardianship or conservatorship redundant or unnecessary. If need be, however, an attorney can prepare the proper documents and initiate the proceedings to have the matter brought before a court.

Living Wills Alzheimer’s patients can declare their health care wishes in regard to life sustaining treatment so that their loved ones will know how to proceed if they lose the ability to communicate these wishes later on by creating a living will. Some people create a very general living will that, for instance, proscribes life-sustaining treatment. Other people are far more specific with their living will, and provide instructions on treatments such as pain relief, antibiotics, hydration, feeding, and the use of ventilators. As with other documents, it is important for Alzheimer’s patients to establish a living will while they still have capacity.

Do Not Resuscitate A do not resuscitate (DNR) form, also known as a prehospital medical care directive, is what Alzheimer’s

Alzheimer’s & the Law: Protecting Yourself and Your Family

Financial Management & Fraud Protection

patients would use to instruct emergency medical technicians and hospital emergency personnel not to resuscitate them in the event of cardiac or respiratory arrest. EMTs and emergency room personnel who know that an individual has signed a DNR should not use equipment, drugs, or devices to restart that person’s breathing. These medical personnel will, however, provide care and comfort if necessary. To establish a valid DNR, an individual must follow these guidelines:

to financial mismanagement and certain types of fraud. For instance, it is not uncommon for Alzheimer’s patients to have difficulty balancing a checkbook, and accounting errors can quickly lead to serious financial waste. Or, worse yet, Alzheimer’s patients can lose thousands of dollars to risky investments, get-rich quick schemes, or subscriptions for which they have no use. Many times, Alzheimer’s patients are taken advantage of before their family even knows they are struggling with the disease.

◗ His/her picture must be attached to the form, and if no picture is available, he/she must fill out and sign the personal information in front of a witness. ◗ He/she must have a witness sign the DNR. ◗ His/her attending physician or health care provider must sign the DNR. ◗ The DNR must be on letter or wallet sized paper on a bright orange background.

All of this raises questions as to how to protect an Alzheimer’s patient from these types of issues. The first thing that anybody can do is to establish advance directives, as discussed above. By having these documents in place, people create a safety net, of sorts, so that whomever they appoint to act on their behalf can protect them from poor decisions they might otherwise make if they begin to lose capacity. But what about those who do not seem quite as able as they once were to make financial decisions, and who do not have advance directives in place? One of the best things these people can do is get the appropriate documents in place while they still have capacity. Even those in the early stages of Alzheimer’s disease can execute advance directives if they are lucid at the moment of execution; doing so could save them and their families a considerable amount of frustration.

Financial Management & Fraud Protection Even in the very early stages of Alzheimer’s disease, many people with Alzheimer’s suffer a diminished capacity to properly manage their finances. Many times, this begins to happen even before they have been diagnosed with the disease, which makes them particularly susceptible

Alzheimer’s & the Law: Protecting Yourself and Your Family


Estate Planning

In addition to advance directives, there are some financial management strategies that might be quite helpful to those in the early stages of Alzheimer’s disease. One issue that those in the early stages of the disease struggle with is a loss of independence. On the one hand, they do not like the idea of relinquishing control to their financial accounts, but on the other, they are not fully able to manage their affairs responsibly. These individuals might find middle ground by opening a smaller checking account, for which they retain responsibility, but moving the bulk of their assets to another account under the control of a spouse or other family member. This way, there is a stop-loss in place to prevent them from inadvertently draining all of their assets. Together with other strategies specifically tailored to meet an individual’s circumstances, this type of planning could be very beneficial.

The following is a short list of some of the more basic planning tools that Alzheimer’s patients have at their disposal.

Estate Planning

With certain exceptions, individuals may use a will to transfer most any type of property. For instance, a will is not binding on assets such as transfer on death accounts, certain assets owned jointly, life insurance proceeds, retirement plan assets, and assets held in a revocable living trust. Although Arizona does recognize even rudimentary handwritten wills, wills are customarily prepared by an attorney, witnessed by two people, and notarized. Adhering to these formalities is the best way for people

A comprehensive estate plan can give Alzheimer’s patients peace of mind that their family will be provided for and their affairs will remain in order even after they are gone or incapacitated. In addition to the advance directives discussed above, a comprehensive estate plan should include a variety of other planning devices. The key to successful planning is to create an individualized plan that meets the individual’s specific needs and goals.


Wills Drafting a will is the simplest way for people to make sure their property goes to whom they want upon their death. Without a will, Alzheimer’s patients risk having the state distribute their property for them, so they definitely ought to have at least a basic will in place. Even those who have already been diagnosed with Alzheimer’s can create a will if they are competent and of sound mind. Specifically, this requires them to: ◗ Be able to identify their property. ◗ Know whom their family members and close friends are. ◗ Understand they are creating a will which gives their property to those identified in the document.

Alzheimer’s & the Law: Protecting Yourself and Your Family

to prevent errors that could give rise to will disputes.

Revocable Living Trusts Revocable living trusts allow people to give instructions on how trust funds should be used throughout their life, and then designate to whom the remainder of the funds will pass after they are gone. Within reason, people can use a revocable living trust to place any number of conditions upon transfers from the trust. And because trust assets transfer to beneficiaries without going through probate, a trust also serves as at least a partial substitute to a will. The wide range of planning options that revocable living trusts provides makes them quite helpful to those diagnosed with Alzheimer’s disease. One danger that people should be aware of is that trust assets can interfere with their eligibility for long-term health care benefits. While the ALTCS benefit may help Alzheimer’s patients finance longterm health care, having assets in a trust may compromise their eligibility for the benefit for a period of time. Alzheimer’s patients should always work with an experienced Elder Law attorney who is familiar with ALTCS rules and policies when wanting to establish a revocable living trust.

Joint Titled Bank Accounts

Alzheimer’s patients can give anybody access to their bank account by simply naming a joint owner on the account. Doing so causes the account to transfer to the surviving joint owner in full upon the death of the other without going through probate. It also gives joint owners unrestricted access to the funds, so that they can use them for Alzheimer’s patients in the event that they lose capacity. The problem with this, of course, is that many people only wish to give a joint owner access to their funds for limited purposes, and a solution here might be as simple as establishing powers of attorney or a revocable living trust, then opening a smaller joint bank account for emergencies. Most people find that although joint titled bank accounts can be one piece of a comprehensive long-term care plan, they generally need to use more than just this one strategy to adequately protect themselves.

Charitable Contributions It is possible for individuals to take tax deductions and reduce their taxable estate by donating to a charity through a will, creating a charitable trust, or investing in an annuity that leaves the remainder to a charity. Making gifts without regard to ALTCS rules, however, can jeopardize eligibility for the ALTCS benefit, so Alzheimer’s patients should speak with an Elder Law attorney to avoid incurring penalties. A qualified attorney should

Alzheimer’s & the Law: Protecting Yourself and Your Family


Long-Term Care Options

be able to explain the differences between tax law and ALTCS requirements, and protect individuals from creating difficulties if they decide to apply for the ALTCS benefit down the road. This type of planning is particularly important for those with Alzheimer’s disease, as they are so likely to require long-term health care.

providers, or even rely on a family member to act as caregiver. Even though these services are provided in the home, the ALTCS benefit covers this type of care for those who are eligible.

Long-Term Care Options

Adult day health care centers provide a daily routine and a sense of belonging that most Alzheimer’s patients find comforting. And as an added benefit, these centers also provide respite to caregivers so they can handle other responsibilities. Some of these facilities even provide activities and supervision for up to 12 hours per day. While adult day health care centers generally do not have a full medical staff on site, many of them do have trained nurses, and some of them specialize in helping Alzheimer’s patients. The ALTCS benefit covers the costs of adult day health care for those who qualify.

Alzheimer’s disease runs a fairly predictable course, and those afflicted with it generally need some type of long-term health care as the disease progresses. Before they can properly determine which type of long-term care is most appropriate, however, Alzheimer’s patients and their families need to know the range of options that is available. Gaining this understanding is the first step in making an informed decision in this regard.

In-Home Care In-home care can be a wonderful option for Alzheimer’s patients who are not yet ready to move into an inpatient or assisted living facility. A variety of in-home services are available, including home health nursing, pain management, daycare, delivered meals, homemaker services, and rehabilitation. Those who go this route can rely on one company to handle the entire spectrum of in-home care, obtain services from several


Adult Day Health Care

Group Homes Group homes provide around-theclock care for Alzheimer’s patients, but admit only a handful of residents at a time. As such, they provide a good option for people who do not like crowds. Group homes are typically located in a residential neighborhood, and residents are encouraged to participate in daily activities, although they are not required to do so. This arrangement allows residents to maintain a greater degree of autonomy

Alzheimer’s & the Law: Protecting Yourself and Your Family

Paying For

Long-Term Care than they could at higher levels of care. The ALTCS benefit covers the costs of group homes for those who qualify.

Assisted Living Communities

bathing, and using the restroom. ALTCS provides coverage for skilled nursing facilities to its members.

Life Care Communities

Assisted living communities tend to be a good fit for Alzheimer’s patients in the early to middle stages of the disease because residents are encouraged to maintain a certain level of independence. These facilities typically have many private rooms for a large number of residents, and they offer a wide range of services, including assistance with grooming, medication administration, meal reminders and cleaning services.

Life care communities provide various living environments on the same property. Residents whose needs fluctuate can move between independent living, assisted living, and a skilled nursing facility without ever leaving the community, which provides them with a valuable sense of security. Although this type of living arrangement is less common than others, ALTCS may provide coverage for life care communities to its members.

The ALTCS benefit provides members with coverage for assisted living communities.

Paying For LongTerm Care

Skilled Nursing Facilities Skilled nursing facilities seem to work well for Alzheimer’s patients in the later stages of the disease. In this setting, Alzheimer’s patients who do not require full hospitalization can nevertheless receive routine medical supervision. These facilities typically provide skilled medical care provided by a staff of registered nurses, physical therapists, occupational therapists, and on-call physicians; and custodial care including assistance with activities such as eating, walking, dressing,

Alzheimer’s patients nearly always require long-term health care, which does not come inexpensively. In-home care costs between $17 and $20 per hour, and skilled nursing facilities can cost as much as $6,500 per month. And although these expenses tend to add up quickly, there are places to turn for financial assistance. Alzheimer’s patients and their families ought to consider the following options for financing such care: 1. Long-term care insurance: Alzheimer’s patients typically do not qualify for long-term health care insurance because these policies are

Alzheimer’s & the Law: Protecting Yourself and Your Family


generally only available to those in good health. Individuals in relatively good health, however, might find that long-term health care insurance is a good option for them. Before deciding to purchase such a policy though, people should consult with a professional to make sure the coverage is worth the premiums, as this type of insurance tends to be costly. 2. Out of pocket/Self-funding: Those with financial means may decide to pay for their long-term health care out-of-pocket. But nobody should make this decision without first exploring other options, as expenses can quickly take a toll. Alzheimer’s patients may find that even some basic planning could help them put more resources aside for a spouse or even qualify for assistance paying for their care. 3. Medicare: Many Alzheimer’s patients are surprised to learn that Medicare does not provide longterm health care coverage. Rather, Medicare pays for a maximum of 100 days in a skilled nursing facility, which is rarely sufficient for Alzheimer’s patients. Because Alzheimer’s disease is progressive, patients requiring inpatient treatment tend to need it for much longer than this 100-day threshold, and are thus required to use another option to finance their care. 4. Veteran’s benefits: The Veterans Administration offers a Pension


benefit to qualifying individuals that can be used to pay for longterm health care. Veterans and the widows of veterans who served during a wartime period, and were discharged from services under anything other than dishonorable conditions, may qualify for Pension. Further, depending on their specific circumstances, veterans may also qualify for a benefit by the name of Aid & Attendance, which could substantially increase the amount of Pension they qualify for. Applying for these benefits can be quite complicated, so it is a good idea for veterans to undertake the application process with the guidance of a professional. 5. ALTCS: For those who are eligible, the ALTCS benefit is a great option for financing long-term health care. It is a needs based program, so a medical condition such as Alzheimer’s is not by itself a qualifier for the benefit. Rather, applicants also have to meet strict financial requirements to qualify. Even applicants who do not presently qualify, however, may find that planning can help them meet eligibility requirements in the future.

Services Provided by ALTCS ALTCS provides a wide range of benefits that might be helpful to people with Alzheimer’s, including: ◗ Full coverage of acute care services:

Alzheimer’s & the Law: Protecting Yourself and Your Family

This includes doctors, hospitalizations, prescriptions, lab work, x-rays, tests and specialist treatments. ◗ Skilled nursing facility care: This includes care provided in a licensed skilled nursing facility, residential care facility or intensive care facility. ◗ Home and Community Based Services: This includes home health nursing, rehabilitation, adult daycare, personal and respite care, medical transportation, mental health services, homemaker services, attendant care, home health aides, and delivered meals. ◗ Services for developmentally disabled adults and children: ALTCS has a branch specifically designed for developmentally disabled adults and children, which provides special benefits.

ALTCS Eligibility Requirements Preparing for the future is particularly important when it comes to health care, so it is best for people to prepare for ALTCS eligibility well in advance. Even those who are in immediate need of assistance, however, may still be eligible for the benefit. Of course, to qualify, applicants must meet strict medical and financial requirements. Meeting the ALTCS Medical Eligibility Requirements Everybody who applies for the ALTCS benefit must undergo a medical screening process known as

the PAS (Pre-Admission Screen). At the PAS, an assessor examines various aspects of the applicant’s health, such as continence, sensory impairments, orientation, behavior and whether the applicant requires assistance with daily activities. The assessor relies on these health indicators to determine whether the applicant qualifies medically to receive assistance. Although Alzheimer’s patients generally have no problem satisfying PAS requirements, they should describe symptoms and behaviors that occur on their worst days when meeting with the assessor. For more information on ALTCS medical requirements, please call JacksonWhite Elder Law for a complimentary phone consultation with an Elder Care Coordinator, or visit Meeting the ALTCS Financial Eligibility Requirements In addition to satisfying medical requirements, everybody who applies for ALTCS must also undergo a financial assessment. Without any experience here, this portion of the application process can be difficult to navigate. By obtaining legal counsel, however, applicants can relieve quite a bit of pressure, and perhaps avoid paying for long-term health care outof-pocket. In the end, an attorney may help Alzheimer’s patients qualify for the ALTCS benefit with as little delay possible, and possibly spare them and their families thousands of dollars.

Alzheimer’s & the Law: Protecting Yourself and Your Family


Paying For

Long-Term Care, cont’d The ALTCS financial assessment includes a review of the applicant’s (and the applicant’s spouse, if applicable) income and resources. The income and resource limit varies between married and single applicants. To qualify for the benefit, both income and resources must fall below a specified amount, which changes on an annual basis. Income Single applicants can have no more than $2,022* monthly income to qualify for the ALTCS benefit. Married applicants applying together can have no more than $4,044* monthly income. And, married applicants applying alone can have no more than $2,022* monthly income, but their spouse’s income is not considered. ALTCS denies eligibility to anybody whose monthly income exceeds these limitations. Alzheimer’s patients who would like to apply for the ALTCS benefit, but whose income is too great, might be able to establish an Income-Only Trust to help them qualify nonetheless. As with other types of trusts, however, Income-Only Trusts are only valid if they comply with strict legal formalities. As such, Alzheimer’s patients whose income is too great to qualify for the benefit ought to consult with an attorney about planning strategies that could help them satisfy eligibility requirements. * As of January 1, 2011


Resources Single applicants can have no more than $2,000 in countable resources, and married applicants applying together can have no more than $3,000 in countable resources. Because ALTCS only looks at countable resources, however, certain resources are exempt for purposes of determining eligibility. For instance, the following types of resources are exempt, and thus do not count against ALTCS applicants: ◗ One home: The home must be the applicant’s principal place of residence, and cannot have equity value greater than $500,000. Applicants residing in a nursing home will have to demonstrate an “intent to return home,” even if this never actually takes place. ◗ One vehicle: The value of the vehicle cannot exceed $4,500 for a single individual. ◗ Life insurance: The face value of the policy cannot exceed $1,500. If the face value of the policy exceeds this amount the cash value is countable. ◗ Burial plots ◗ Irrevocable prepaid funeral plans ◗ Miscellaneous assets: A variety of other assets may be exempt under the right circumstances. Alzheimer’s patients with substantial assets ought to speak with an attorney about arranging their affairs to prepare for the ALTCS application. They should meet with an attorney

Alzheimer’s & the Law: Protecting Yourself and Your Family

to make these arrangements before the financial assessment, as anything deemed countable when they apply can count against them. Countable assets include all money and property that can be valued and converted into cash. More specifically, countable assets include: ◗ Cash, checking, and savings accounts. ◗ Certificates of deposit. ◗ US savings bonds. ◗ Retirement accounts, including IRA, 401K, and TSA plans. ◗ Nursing home accounts. ◗ Revocable prepaid funeral contracts. ◗ Assets in revocable trusts. ◗ Real estate other than the applicant’s primary residence. ◗ Second car. ◗ Boats or recreational vehicles. ◗ Stocks, bonds, or mutual funds. ◗ Promissory notes. More often than not, Alzheimer’s patients who meet the income and resource requirements will qualify for the ALTCS benefit. Even applicants whose resources exceed the limit, however, might make preparations that will enable them to qualify for the benefit down the road.

Financial Relief for Spouses When married ALTCS applicants qualify for the benefit, their spouses need to keep enough resources to

remain financially independent. To make sure this happens, ALTCS allows well spouses to take what is called the Community Spouse Resource Deduction (CSRD). Were it not for the CSRD, spouses would be forced into poverty before their husband or wife could qualify for the ALTCS benefit. The CSRD allows well spouses to keep one-half of the couple’s countable resources, up to a certain amount. This means that a couple with $100,000 in countable resources could keep $50,000 for the well spouse. There is a minimum and maximum threshold, however, so that the CSRD has certain guarantees and limitations. The minimum CSRD is $21,912*, meaning that a couple with $35,000 in countable resources could keep the minimum CSRD of $21,912* for the well spouse because half of $35,000 falls below the minimum CSRD. On the other hand, regardless of how many assets a couple has, the maximum CSRD is $109,560, so well spouses cannot keep more than this amount, even if it is less than half of the couple’s total assets. * As of January 1, 2011

Spend Down Perhaps for more than any other reason, ALTCS applicants are denied eligibility for having too many resources. When Alzheimer’s patients have more resources than allowed,

Alzheimer’s & the Law: Protecting Yourself and Your Family


however, it does not mean that they will never qualify for the benefit. Instead, it means that they must spend down their countable resources before they can become eligible. Of course, this does not mean that prospective ALTCS applicants should spend frivolously just to satisfy ALTCS requirements. Neither should they start giving their resources away to family members, as gifts are penalized with a period of ineligibility. Rather, to avoid penalties, Alzheimer’s patients with excessive resources should strategize with an Elder Law attorney who can help them prepare to meet the ALTCS resource requirement with as little delay possible.

Veteran’s Benefits The Veterans Administration offers two benefits, the VA Pension and Aid & Attendance, which can be particularly helpful to veterans in need of long-term health care. In addition to being a veteran, applicants must also have limited income and resources to qualify for these benefits. What many veterans do not understand, however, is that they might reduce their countable income by taking approved medical deductions. In other words, even veterans who earn a significant income each month may qualify for these benefits if they also have substantial medical expenses. Veterans who served in any of this nation’s armed forces should speak with a veterans’ benefit planning


attorney about potential eligibility for these benefits. Veteran’s Pension Benefit Veteran’s Pension is a cash benefit that is available to veterans who meet strict eligibility requirements. Like the ALTCS benefit, Pension is needs based, so income and resources are key determinants in whether veterans qualify. Before the VA will even look at finances, however, veterans must meet the following general criteria: ◗ Veterans must have been discharged from service under other than dishonorable conditions. ◗ Veterans must have served at least 90 days of active military service, at least one day of which was during a wartime period. ◗ Veterans must be age 65 or older, or permanently and totally disabled. Resource Requirements To qualify for Pension, veterans must meet financial requirements. And although there is not a hard and fast resource requirement, veterans with “excessive” net worth are ineligible for Pension. While it is true that resource limits are not well defined, applicants are regularly denied benefits for having too many resources. Veterans considering applying for Pension should consult with a veteran’s benefit attorney to determine whether their resources may raise an issue with the VA so that they can prepare for the application if needed.

Alzheimer’s & the Law: Protecting Yourself and Your Family

Income Requirements The VA also limits the amount of income veterans may earn and still qualify for Pension. Unlike the resource limit, however, the VA clearly defines the income limit. Specifically, veterans applying for Pension must meet the applicable income requirement: ◗ Single veterans without children cannot have annual income exceeding $11,830. ◗ Veterans with one dependent cannot have annual income exceeding $15,493. ◗ Veterans who are housebound without dependents cannot have income exceeding $14,457. ◗ Veterans who are housebound with one dependent cannot have income exceeding $18,120. ◗ Veterans who are married to another veteran cannot have income exceeding $15,493. Veterans can exclude some forms of income and take certain deductions to help meet the income requirement. For instance, the VA does not count SSI and other public assistance as income. Also, veterans may deduct a portion of their unreimbursed medical expenses from their income. Veterans applying for Pension should make these preparations with a veteran’s benefit attorney in order to fully reduce their countable income. Beyond helping them obtain eligibility, taking the proper deductions can

even increase the amount of Pension veterans are eligible for. Medical Expense Deductions Veterans who apply for Pension should work with a veteran’s benefit attorney to calculate their medical expense deductions. In many instances, this type of planning qualifies veterans who would not otherwise be eligible for Pension. Even those who would already qualify for the benefit could increase their monthly Pension amount by taking the proper deduction. Because of the significant impact that medical expense deductions can have on a Pension amount, veterans should never submit an application for Pension without carefully reviewing their medical expenses. The medical expense deduction is by no means an easy calculation to make. First off, veterans may only deduct unreimbursed medical expenses, and only after those expenses exceed a certain limit. Further, veterans cannot deduct medical expenses covered by insurance, although they can deduct premiums and copays. These complexities make it quite easy to make an accounting error when calculating the deduction, which could well lead the VA to deny a veteran’s application. To protect against this, veterans should consider seeking professional guidance to help them take a proper deduction.

Alzheimer’s & the Law: Protecting Yourself and Your Family


Additional Support from the VA – The Housebound and Aid & Attendance Benefits Veterans with medical issues may qualify for assistance beyond that which Pension provides. This assistance comes in the form of two benefits, the Housebound benefit and the Aid & Attendance benefit, each of which effectively increase the amount of Pension a veteran may receive each month. To qualify for one of these benefits, veterans must show not only that they qualify for Pension, but that they also have a medical issue that gives cause for additional support. Veterans who qualify may receive either of the benefits, but cannot receive support from both simultaneously. Of the two benefits, Aid & Attendance is the greatest, and it is also the most difficult for veterans to qualify for. Qualifying for the Aid & Attendance benefit Only veterans who first qualify for Pension may qualify for Aid & Attendance. To qualify, they must meet certain medical requirements, in addition to Pension’s financial requirements. Specifically, to qualify for the Aid & Attendance benefit, veterans must: ◗ Require another person’s assistance to perform activities of daily living, such as bathing, feeding and dressing, OR ◗ Be bedridden, OR


◗ Be in a nursing home due to mental or physical incapacity, OR ◗ Suffer from blindness. Qualifying for the Housebound benefit As with the Aid & Attendance benefit, only veterans who qualify for Pension are eligible for the Housebound benefit. And in addition to meeting Pension’s financial requirements, veterans must also meet one of the following requirements to qualify for the Housebound benefit: ◗ Qualifying veterans must have a single permanent disability that is 100% disabling and confines them to their immediate premises, OR ◗ Have a single permanent disability that is 100% disabling and another disability or disabilities that is 60% disabling. Applying for the Housebound or Aid & Attendance benefit Veterans can apply for the Housebound or Aid & Attendance benefit when they first apply for Pension, or at any time thereafter if their health deteriorates. When applying for either of these benefits, veterans must supply a written report from their physician that thoroughly describes their medical condition. The report should clearly illustrate the veteran’s difficulty tending to activities of daily living, and describe any mobility issues that the veteran may have. The letter should make it adequately clear that the veteran

Alzheimer’s & the Law: Protecting Yourself and Your Family


Asked Questions suffers from the conditions required to obtain the benefit for which he or she is applying. The Approval Process The VA receives a substantial number of benefit applications each month, and veterans can thus expect to wait for quite some time before their application is fully processed. In some instances, it takes the VA even as long as a year to respond, although the VA may pay Pension benefits retroactively for up to one year upon approval. One thing that veterans should be aware of when applying for VA benefits is that they may have to begin the application process anew if they are denied, even if the eligibility issue can be resolved easily. For this reason, veterans ought to consider undertaking the application process with a veteran’s benefit attorney who can help them avoid missing benefit payments to which they are entitled. Monthly Pension Limits The primary goal of Pension is to provide veterans with enough monthly income to cover their necessary expenses. Pensions have capped rates, however, to provide assistance to veterans without being excessive. For 2011, Pensions are capped at the following amounts: • Single veteran: $985 per month. • Single veteran with Aid & Attendance: $1,644 per month. • Married veteran with Aid & Attendance: $1,949 per month.

• Widow without dependents: $661 per month. • Widow with Aid & Attendance: $1,065 per month.

Frequently Asked Questions Can the state take an ALTCS recipient’s home? Of the many issues surrounding the ALTCS benefit, estate recovery is perhaps the most commonly misunderstood. Because of this common misunderstanding, many would-be applicants forego even applying for the benefit. In essence, ALTCS has two tools at its disposal to recover benefits paid to ALTCS members, the Estate Recovery Act and the TEFRA lien. Under the Estate Recovery Act, ALTCS can assert liens on deceased members’ estates to recover benefits paid during their lives. Similarly, ALTCS can assert TEFRA liens on ALTCS members’ homes after they have spent 90 consecutive days in a skilled nursing facility. Neither of these liens can exceed the amount that ALTCS provided to the member in benefits. While these liens allow ALTCS to recover benefits in certain situations, there are several possible exemptions to this rule. Those who meet one of the following exemptions should speak with an Elder Law attorney about protecting their estate from recovery:

Alzheimer’s & the Law: Protecting Yourself and Your Family


1. Where a well spouse lives in the home, federal rules protect this spouse from impoverishment. With proper planning, ALTCS members may avoid estate recovery even if the well spouse dies first. 2. Where a disabled child lives in the family home, federal rules protect the home from recovery. With proper planning, applicants may preserve the home for a disabled child who receives social security income. 3. Proper planning may preserve the home for an adult child who cared for the applicant in the applicant’s home for two or more years prior to institutionalization. 4. Individuals who do not satisfy any of these exemptions may still request a hardship hearing under certain circumstances. Applicants should not allow the fear of losing their home to delay them from accessing the ALTCS benefit. If fear of losing their home is an issue, ALTCS applicants should speak with an Elder Law attorney about whether they qualify for one of the exemptions.

Can I give my assets away in order to qualify for ALTCS? While federal estate tax rules allow people to give up to $13,000 per year to any one person without consequence, ALTCS rules make no such allowance. While ALTCS does allow limited gifting, ALTCS


applicants can be severely penalized for making gifts that do not comply with ALTCS rules. So, even a gift that fully complies with federal tax rules could render an ALTCS applicant ineligible for the benefit. For this reason, Alzheimer’s patients should always consult with a professional who understands ALTCS rules and regulations before engaging in any gifting.

What does ALTCS planning look like for a typical married couple? The following case study illustrates how ALTCS planning can help a married couple when one spouse is diagnosed with Alzheimer’s disease: Shortly after celebrating 50 years of marriage to Judy, Frank Andrews progressed into the late stage of Alzheimer’s disease, and has been hospitalized ever since. The hospital discharge planner informed Judy that Frank now requires around-theclock care and cannot return home. Medicare will not provide Frank with long-term care assistance, and skilled nursing expenses are $6,000 per month. Judy reviewed their assets and counted $100,000, plus the family home, divided as follows: • Savings Account: $8,000 • CD: $45,000

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Alzheimer’s & the Law: Protecting Yourself and Your Family


Professional Assistance

• Money Market: $35,000 • Checking Account: $12,000 • Home (no mortgage): $110,000 Regarding income, Mr. Andrews receives $600 per month from Social Security, and $300 per month from a small pension, and Mrs. Andrews receives $300 per month from Social Security. Even the sum total of the Andrews’ income is insufficient to cover the nursing facility’s monthly fee. Mrs. Andrews consulted with her family and discovered that they cannot afford to help with the $6,000 monthly fee. If the Andrews use their savings, Mrs. Andrews would run out of money within two years.

Finding Professional Assistance Alzheimer’s Association Desert Southwest Chapter The Alzheimer’s Association Desert Southwest Chapter empowers and supports individuals, families, care partners, and communities impacted by dementia in Arizona and southern Nevada. Here is just a brief list of services that the Association provides: • Free educational programs that provide instruction and advice to caregivers.

Although the Andrews cannot resolve their dilemma at the ALTCS eligibility worker level, a trained professional can provide them with valuable guidance. An Elder Law attorney can help Mr. Andrews qualify for the ALTCS benefit to cover his care, without forcing Mrs. Andrews to forfeit her income or the family home. Further, by applying the Community Spouse Resource Deduction, Mrs. Andrews may be able to keep approximately half of the couple’s savings as well. The Andrews can only achieve this result, however, with careful planning.

• Support groups that connect Alzheimer’s patients and caregivers from around the country to share their experience and strength with one another. • A 24-hour helpline to answer questions, clarify issues, and provide emotional support to those dealing with Alzheimer’s. Visit for more information

Selecting an Attorney Almost without exception, Alzheimer’s patients require longterm health care in the final stages

Alzheimer’s & the Law: Protecting Yourself and Your Family


of the disease. And, to help pay for such care, many patients must turn to Arizona’s Medicaid program, ALTCS, for assistance. As we discussed, however, ALTCS is a needs based program, so only those who meet specific financial requirements qualify for the benefit. Nevertheless, even those who do not currently qualify for the program might consider speaking with an attorney about arranging their affairs to qualify for the benefit in as short of a delay as possible, while also preserving as many of their assets as possible. While many in the financial industry try to offer ALTCS planning services, professionals lacking extensive experience in long-term health care issues are likely to miss important legal issues. Further, financial professionals cannot represent ALTCS applicants in fair hearings in court if needed. A qualified Elder law attorney, on the other hand, should be aware of the complex legal issues, and be ready to represent ALTCS applicants in court if necessary. As such, an Elder Law attorney who fully understands long-term health care issues is best suited to help Alzheimer’s patients create effective strategies and find real solutions to their long-term health care needs. MyALTCS is an online tool designed by JacksonWhite Elder Law to


educate Arizonans, and help them comfortably navigate the ALTCS application process. This powerful program walks ALTCS applicants through the application process, and provides them with tips and feedback along the way. If MyALTCS spots a problem with an ALTCS application, it instructs applicants on how to address the issue before they apply for the benefit, which could save them both time and money in the long run. While MyALTCS does not submit ALTCS applications to the ALTCS office for applicants, it walks them through the entire process, step-bystep, and helps them know where they stand with their ALTCS eligibility. Using MyALTCS is easy. Prospective ALTCS applicants need only: 1. Sign up at and create a personal account that remains active for 30 days. 2. Follow MyALTCS step-by-step instructions on how to fill out the ALTCS application. 3. Gather the documents from the automatically-generated checklist, and provide them to an ALTCS representative upon applying. 4. Take note of any warnings or alerts that MyALTCS provides, and speak with a professional about resolving the issue. 5. Use the MyALTCS form to fill out the ALTCS application with accurate information.

Alzheimer’s & the Law: Protecting Yourself and Your Family

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Alzheimer’s & the Law: Protecting Yourself and Your Family


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Alzheimer’s & the Law: Protecting Yourself and Your Family

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For a complete listing of all JacksonWhite’s legal services, see page 1 of this guide.

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Jackson White Law Alzheimer Guide 2011  

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