by Jose D. Roman | Jan 23, 2025 | Guardianship, Legal Bulletin, NJ Supreme Court
On December 11, 2024, the New Jersey Supreme Court issued its opinion for In the Matter of A.D., (A-30/31-23) (088942) addressing whether court-appointed attorneys and temporary guardians are entitled to fee awards from Adult Protective Services (APS) when an incapacitated person’s estate lacks sufficient funds. The Court held that fee awards are not available.
Case Overview
The case originated in June 2020, when the Sussex County Division of Social Services, Office of Adult Protective Services (APS), sought a plenary guardianship for “Hank,” an alleged incapacitated person. The court appointed Steven J. Kossup, Esq. to represent Hank and Brian C. Lundquist, Esq. as temporary guardian. Both attorneys took significant steps to stabilize Hank’s life, ensuring he had stable housing, financial aid, and medical care. Despite APS’s recommendation for a permanent plenary guardian, Kossup and Lundquist advocated for a limited guardianship. Their position was supported by an expert psychologist, retained at Lundquist’s expense, who opined that Hank required only a limited guardianship. The trial court ultimately agreed. Kossup and Lundquist then applied for compensation for their services, seeking to have their fees paid by APS, as Hank’s estate lacked sufficient funds. While APS did not contest the amount of the fees, it argued that paying such fees would compromise its ability to serve its clients. The trial court and the Appellate Division denied the fee applications, prompting an appeal to the New Jersey Supreme Court.
Supreme Court’s Analysis
In a unanimous opinion, the New Jersey Supreme Court affirmed the denial of the fee applications. The decision emphasized the following key points:
1. The American Rule and Limited Exceptions
New Jersey adheres to the “American Rule,” which requires litigants to bear their own legal costs unless explicitly authorized by statute or court rule. New Jersey Court Rule 4:42-9(a) provides eight exceptions to the rule, two of which were invoked in this case:
- Statutory Authorization: The Court found that neither the Adult Protective Services Act (APS Act) nor the statutes governing guardianships authorize fee awards against APS. Both statutes limit fee awards to the estate of the incapacitated person.
- Guardianship Rules: Rule 4:42-9(a)(3) and Rule 4:86-4(e) permit fees to be paid from the incapacitated person’s estate or “in such other manner as the court shall direct.” However, the Court clarified that this language does not authorize fee awards against APS.
2. Rejection of the DiNoia Precedent
The Court explicitly declined to adopt the holding in In re Guardianship of DiNoia (2019), where the Appellate Division upheld a fee award against APS. The court in DiNoia ordered APS to pay counsel fees because APS had “protracted the litigation” by failing to provide information in a timely manner, and court-appointed attorney made exceptional efforts on behalf of his client. The Supreme Court held that such reasoning does not align with the American Rule or the governing statutes and rules, and ruled that there is no basis to authorize fee awards against APS under any circumstances, even if it protracted litigation.
3. Pro Bono Service
The Court highlighted the longstanding tradition of pro bono service in guardianship matters, particularly when the incapacitated person’s estate lacks resources. It acknowledged the substantial burden this places on attorneys and urged trial courts to consider the equitable distribution of these assignments.
Practical Guidance for Future Cases
The Court offered several recommendations for handling guardianship matters:
- Clear Communication: Judges should inform attorneys and guardians at the outset if their service is expected to be pro bono.
- Court Oversight: Judges, not Surrogates, are responsible for appointing counsel, determining the need for temporary guardians, and addressing compensation.
- Expert Fees: Temporary guardians serving pro bono should consult the court before retaining experts, ensuring funds are available to cover fees.
Broader Implications
The ruling in In the Matter of A.D. establishes that APS providers cannot be held financially responsible for court-appointed attorney fees, even if APS causes delay and the need for the attorney to perform extraordinary work on the case. While this reinforces the American Rule, it raises questions about the sustainability of pro bono service in guardianship cases, especially given the increasing demand for such legal representation. The Court expressed gratitude for the exemplary work of Kossup and Lundquist but acknowledged the need for systemic changes to address the burdens of pro bono service. This may include increased funding for legal aid programs or other measures to ensure fair allocation of responsibilities. As the population continues to age and demand for guardianship services grow, the legal community and policymakers must work together to ensure equitable and sustainable solutions.
by Jose D. Roman | Jan 22, 2025 | Estate Administration, Estate Planning, Intestate Estate (No Will), Last Will and Testament, Probate
Death is not a topic many of us like to dwell on, but planning for the inevitable is essential to ensure that your hard-earned money and assets are distributed according to your wishes. One question that often arises is: what happens if you die without a Will? Specifically, does your money automatically go to the government?
The short answer is no—your money does not automatically go to the government if you die without a Will. However, the distribution of your assets Will depend on the intestacy laws of your state. If you reside in New Jersey, understanding its intestacy laws is crucial.
What Happens if You Die Without a Will in New Jersey?
In legal terms, dying without a Will is known as dying "intestate." When this happens, New Jersey’s intestacy laws come into play. These laws dictate how your estate Will be divided among your heirs, and the process generally aims to distribute your assets to your closest living relatives.
Here’s a breakdown of how New Jersey’s intestacy laws work:
1. If You Have a Surviving Spouse
The surviving spouse’s share depends on whether you have children or other close relatives:
- No children or parents: If you leave behind only a spouse and no descendants (children, grandchildren, etc.) or parents, your spouse inherits everything.
- With children from your marriage: If all your children are also the children of your surviving spouse, your spouse inherits everything.
- With children from another relationship: If you have children who are not the children of your surviving spouse, your spouse inherits the first 25% of your estate (but not less than $50,000 or more than $200,000.00), plus half of the remaining estate. The rest is divided among your children.
- With parents but no children: If you leave behind a spouse and parents but no children, your spouse inherits the first 25% of your estate (but not less than $50,000 or more than $200,000.00), plus 3/4 of the remaining estate. The rest goes to your parents.
2. If You Don’t Have a Surviving Spouse
If you are not married or your spouse has predeceased you, your assets are distributed as follows:
- To your children, in equal shares.
- If you have no children, to your parents.
- If your parents are deceased, to your siblings.
- If you have no siblings, to your nieces and nephews.
- If none of the above relatives are alive, the estate Will be distributed to more distant relatives.
3. When the Government Steps In
Only if you die without a Will and have no living relatives does your estate “escheat” to the state. In New Jersey, this is an extremely rare occurrence. The state government is considered the last resort for inheritance when absolutely no relatives can be located.
Non-Probate Assets
Not all assets go through probate or are governed by intestacy laws or your Will. Some assets, known as non-probate assets, pass directly to beneficiaries outside the probate process. These include:
- Jointly Owned Property: Assets held in joint tenancy or tenancy by the entirety automatically pass to the surviving owner.
- Beneficiary Designations: Accounts like life insurance policies, retirement accounts (e.g., 401(k) or IRAs), and payable-on-death (POD) or transfer-on-death (TOD) accounts pass directly to the named beneficiaries (assuming you have completed these forms).
- Trust Assets: Property held in a trust is distributed according to the terms of the trust and bypasses probate.
It’s important to keep beneficiary designations up to date and coordinate these with your overall estate plan. Even if you have a Will, these non-probate assets will not be subject to its terms unless the estate is named as a beneficiary.
Why You Should Have a Will
While New Jersey’s intestacy laws are designed to ensure that your estate passes to your family, this may not align with your specific wishes. For example:
- You may want to leave a larger share to a particular family member.
- You might wish to include friends, charities, or other beneficiaries who are not covered under intestacy laws.
- If you have minor children, you can appoint a guardian for them in your Will.
- You can also name an Executor to manage your estate, reducing potential conflict among family members.
Without a Will, the probate process can also be more complicated and time-consuming for your loved ones.
Final Thoughts
To ensure your assets are distributed according to your wishes and to simplify the process for your loved ones, it’s essential to create a Will. Consulting with an estate planning attorney can help you navigate the complexities of New Jersey’s intestacy laws and tailor a plan that fits your unique situation.
While your money generally Will not go to the government if you die without a Will, relying on state laws to determine the fate of your estate leaves much to chance. Taking the time to draft a Will is one of the most thoughtful and impactful gifts you can leave behind for those you care about.
by Jose D. Roman | Jan 21, 2025 | Estate Administration, Medicaid, Medicaid Estate Recovery
Medicaid provides crucial health coverage for individuals and families with limited income and resources, as well as people who require long-term nursing care. However, many recipients and their families may not realize that Medicaid is often entitled to be paid back after the recipient dies. Let's talk about Medicaid Estate Recovery in New Jersey.
What Is Medicaid Estate Recovery?
Medicaid Estate Recovery is a federal requirement that obligates states to recover the costs of certain Medicaid benefits paid on behalf of a recipient after their death. This means that New Jersey’s Medicaid program may seek reimbursement from the estate of a deceased Medicaid beneficiary for services provided.
When Does Medicaid Estate Recovery Apply?
In New Jersey, Medicaid Estate Recovery applies in the following cases:
- Age 55 and Older: Medicaid benefits provided to individuals aged 55 or older are subject to estate recovery. This typically includes expenses related to nursing home care, home and community-based services, and other long-term care costs.
What Assets Are Subject to Recovery?
The state can only recover from assets that are part of the deceased’s probate estate. In New Jersey, this includes assets owned in the individual’s name at the time of death, such as:
- Real property (e.g., a home)
- Bank accounts
- Investments
Assets held jointly, in a trust, or designated with a beneficiary (like life insurance) may not be subject to recovery or recovery may be delayed, depending on the structure of ownership.
Are There Any Exceptions?
- Hardship Waivers: Families may apply for a hardship waiver if estate recovery would create significant financial hardship for survivors.
- Surviving Spouse: Recovery is deferred until the death of the Medicaid recipient’s surviving spouse.
- Dependent Family Members: If the deceased has a surviving child under age 21, or a blind or disabled child of any age recovery is postponed.
- Home Exemptions: If an adult child lived in the home and provided care that delayed the need for Medicaid benefits, the home may be exempt from recovery.
How to Protect Assets from Medicaid Estate Recovery
There are legal strategies to safeguard assets, but they require careful planning well in advance:
- Creating Trusts: Irrevocable trusts can shield assets from probate and Medicaid recovery.
- Gifting Assets: Transferring assets to family members or others, while adhering to Medicaid’s 5-year look back period rules, can minimize exposure.
- Joint Ownership: Structuring assets as jointly owned with right of survivorship can limit probate exposure.
- Exempt Transfers: Some transfers of assets are exempt from Medicaid’s 5-year look back.
Conclusion
These rules are complicated and confusing, even for the average attorney. It is essential to consult with an attorney who specializes in elder law to explore these strategies and implementing a plan that complies with both federal and your state's Medicaid regulations.
by Jose D. Roman | Jan 16, 2025 | Consumer Advocacy
Homeopathy is a system of alternative medicine that uses extremely diluted over the counter substances to treat a wide variety of symptoms. It is based on an 18th century pseudoscientific claim that "like cures like," that is that the substances causing symptoms could, when diluted, treat sick individuals. While its proponents claim it offers a natural and effective means of healing, homeopathy lacks scientific credibility and is essentially used as a modern means of selling snake oil. Even though it is widely known that these treatments don't work, homeopathy remains legal and homeopathic products take up a massive amount of shelf space at retail drug stores, even in the State of New Jersey -- a state with some of the toughest consumer protection laws in the country. Why is this legal? Is there anything consumers can do to combat this in New Jersey?
What Is Homeopathy?
Homeopathy originated in the late 18th century with Samuel Hahnemann, a German physician who theorized that substances causing symptoms in healthy individuals could, when diluted, treat similar symptoms in sick individuals. Homeopathic remedies are typically diluted to the point where no molecules of the original substance remain, leading critics to fairly describe these products for what they actually are, sugar pills or placebos. Homeopathy is widely regarded as pseudoscience because it lacks empirical support. Key criticisms include:
- Scientific Implausibility: The principle of "like cures like" and the extreme dilutions used in homeopathy contradict basic principles of chemistry and biology. It also defies common sense. How can you dilute something out of existence and expect that the nothing you're left with will trigger a symptom fighting response in your body.
- Lack of Evidence: Systematic reviews have found no reliable evidence that homeopathy is more effective than a placebo.
- Safety Concerns: Homeopathic products are often marketed without rigorous testing for safety, consistency or contamination, unlike conventional pharmaceuticals.
Despite these issues, homeopathy persists, largely due to consumer demand and legal protections.
Why Is Homeopathy Legal in the United States?
Homeopathy is legal in the United States primarily because of historical and regulatory factors:
- The Food, Drug, and Cosmetic Act (1938): This law recognized homeopathic remedies as a category of drugs, giving them a unique status. The U.S. Food and Drug Administration (FDA) historically deferred to the Homeopathic Pharmacopeia of the United States (HPUS) for standards on homeopathic products.
- Limited Oversight: Until recently, the FDA did not rigorously regulate homeopathic products. While the agency has since updated its enforcement policies to prioritize products that pose risks to public health, many homeopathic remedies still reach consumers with minimal scrutiny.
- Consumer Protection vs. Freedom of Choice: Lawmakers have historically balanced consumer protection with individuals' rights to choose alternative treatments, even if they lack scientific support.
Legal Issues and Homeopathy in New Jersey
New Jersey does not have specific laws regulating homeopathy, but several legal issues can arise:
- Consumer Fraud Act: New Jersey’s Consumer Fraud Act (N.J.S.A. 56:8-1 et seq.) prohibits deceptive practices in the sale of goods and services. Misleading claims about the efficacy of homeopathic remedies could expose manufacturers and retailers to liability.
- Professional Licensing: Practitioners who incorporate homeopathy into their treatments must comply with state licensing laws. For example, licensed physicians and naturopaths offering homeopathic treatments must ensure that they do not misrepresent the efficacy of these remedies or engage in unprofessional conduct.
- Product Liability: If a homeopathic remedy causes harm due to contamination or improper labeling, manufacturers and distributors could face liability under New Jersey product liability laws.
- Insurance Coverage: Many insurance policies do not cover homeopathic treatments. Practitioners and patients may encounter legal disputes over reimbursement claims.
Conclusion
Homeopathy remains a legally accessible yet scientifically discredited practice in the United States, including New Jersey. While its legal status reflects historical and regulatory compromises, consumers should approach homeopathic remedies with skepticism and consult qualified healthcare professionals for evidence-based treatments.
For more information detailed information on the medical and scientific issues read Science-Based Medicine and NeuroLogica Blog.
by Jose D. Roman | Jan 15, 2025 | Medicaid, Qualified Income Trusts, Trusts
For many individuals in New Jersey, Medicaid serves as a lifeline for accessing essential healthcare services, especially under the Managed Long-Term Services and Supports (MLTSS) program. MLTSS provides coverage for home-based care, assisted living, and nursing home services. For the vast majority of individuals, qualifying for Medicaid is the only way to pay for long-term nursing care. However, since Medicaid was designed to only help people with very low income and assets, qualifying for Medicaid in New Jersey can be complex, particularly for individuals with income exceeding the program’s strict limits. One effective tool for overcoming this hurdle is a Qualified Income Trust (QIT).
What Is a Qualified Income Trust (QIT)?
A Qualified Income Trust, also referred to as a Miller Trust, is a legally established irrevocable trust that allows individuals to meet Medicaid’s income requirements. For individuals whose income exceeds Medicaid’s eligibility threshold, a QIT serves as a vehicle to redirect excess income, ensuring compliance with program limits.
Under New Jersey’s 2025 Medicaid guidelines, the monthly income limit for an individual applying for MLTSS Medicaid is $2,901. Income exceeding this threshold typically disqualifies an applicant. However, with a QIT, the applicant can deposit the source of the excess income into the trust, effectively reducing their countable income to meet the eligibility criteria.
Key Features of a QIT
- Irrevocability: A QIT must be irrevocable, meaning it cannot be changed or canceled once it is created.
- Income Source: Only income can be deposited into the trust, not assets or resources. The entire amount of whatever source is causing the excess income must be deposited into the QIT. For example, if the applicant receives both a pension and a social security check and the pension check is causing the excess income, the entire amount of the pension check must be placed into the trust each month.
- Name Medicaid as Beneficiary: The trust must name the State of New Jersey as the primary beneficiary upon the Medicaid recipient's death. This ensures that any remaining funds in the trust are used to reimburse the state for Medicaid benefits paid. The law requires Medicaid recipients over the age of 55 to reimburse the state for benefits paid.
- Limited Use of Funds: Funds deposited into the QIT can only be used for specific purposes, such as paying the Medicaid recipient's share of the cost for long-term care services, personal needs allowances, and medical expenses not covered by Medicaid. A successful Medicaid applicant will receive instructions from the state on how the income must be spent each month. The funds must be spent before the end of each month in accordance with these instructions or coverage could be terminated.
Steps to Establish a QIT:
- Drafting the Trust: Using the template provided by the state, individuals can draft the QIT document themselves. Alternatively, consulting an attorney is recommended for those who prefer personalized guidance or have complex financial situations.
- Setting Up a Bank Account: A separate bank account is opened in the name of the trust. The entire source of income exceeding Medicaid’s limit must be deposited into this account each month.
- Ongoing Administration: Proper administration of the trust is crucial. Funds must be managed according to the state's guidelines and instructions, with detailed records kept of deposits and disbursements.
To further assist individuals, the State of New Jersey has published a helpful QIT FAQ document, which addresses common questions and provides detailed guidance on setting up and administering a QIT. You can access this resource at QIT FAQs.
Benefits of Using a QIT
- Medicaid Eligibility: A QIT allows individuals with income above Medicaid’s limits to qualify for Long Term Medicaid. It prevents excess income from disqualifying applicants while ensuring compliance with program requirements.
- Access to Long-Term Care: By meeting Medicaid’s income requirements, individuals can access essential long-term care services they might otherwise be unable to afford.
Final Thoughts
While a QIT is a powerful tool, it is not without challenges. Many individuals are intimidated and confused by the process. The trust must be established and managed in strict compliance with Medicaid regulations. Any misstep in administering the trust could jeopardize Medicaid eligibility. Additionally, creating and maintaining a QIT involves administrative responsibilities, which require attention to detail.
For individuals who are confident in their ability to follow the state’s guidelines, the free QIT template offers a cost-effective solution. However, consulting an experienced elder law attorney is highly recommended for those who are seeing to preserve assets or prefer expert guidance and want to ensure that all of their Medicaid planning questions are addressed.