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NOTES
and Updates - Spring 2004
"The
most common way people give up their
power is by thinking they don't have
any."
You can't turn on the news these days without hearing the latest on gay marriages. Even if these "marriages" are rescinded, California has passed a Domestic Partners law, effective January 2005. Issues involved may spark legislation or constitutional amendments and will likely play a role in the upcoming elections. We will focus here solely on the recently enacted Domestic Partner legislation and hope this information is not out of date before the printing of this newsletter. The California Domestic Partner Rights and Responsibilities Act of 2003 creates broad rights. While not authorizing marriage per se, it essentially grants spousal status in most matters to those registered as domestic partners. Under California law, this Act will give rights and obligations which are currently only available to spouses, such as: community property rights/obligations, the spousal privilege rights (not to testify against the other), housing rights, authority for making arrangements when a partner dies rights, and state-provided benefits rights (such as worker's compensation). The Act also gives jurisdiction over dissolutions of domestic partner relations to the courts, creating divorce and custody proceedings similar to marriage. Under the Act, as it is State law, domestic partners will neither be able to file joint income tax returns nor assert spousal rights under the ERISA statutes. Starting June 30th of this year, the Secretary of State will be required to notify currently registered domestic partners of the change in the law, providing an opportunity for them to "de-register" if desired. Effective July 1, 2003, the intestate inheritance rights of a domestic partner will be the same as those of a spouse. The statute will not apply, however, unless the domestic partners were registered as such at the date of death. Registration must be made with the California Secretary of State, and the requirements for registration include that neither partner be married, that they have a common residence, and that they be the same sex, unless one partner is 62 or over. This legislation offers some protection to registered domestic partners, but it is not an adequate alternative to a good estate plan A new section has been added to the California probate code to prohibit trustees from requiring a beneficiary to release the trustee from liability as a condition for making a trust distribution. However, the code section does not prohibit the trustee's right to keep a reserve of trust funds, seek a voluntary release of trustee liability from the beneficiary, seek indemnification from third party claims, withhold funds which are in dispute, or seek court approval of the accounting. In view of the liability trustees face and the requirements under the probate code, many trustees opt to obtain court approval for all actions. While avoidance of court action is often a motivating factor in executing a trust for the settlor, trust abuses foster an environment where trustees seek protection through court orders. Ultimately, this may result in many trusts being administered through the courts, despite the settlor's desire to avoid court involvement. A new law was enacted to force conforming admission requirements in nursing homes. Code changes now require prospective patients to be provided with written schedules of fees, billing and payment information, and a summary of patient rights. These regulations were backed by CANHR (California Advocates for Nursing Home Reform) to make California admission agreements more uniform. However, CANHR reports that abuses still exist and is seeking persons who have had trouble dealing with a nursing home due to poorly written/confusing admission documents. If this describes you, please call CANHR at (800) 474-1116. New legislation has been passed to protect seniors from life insurance industry abuses. Any purchaser of life insurance who is 65 or over will be given a 30-day examination period to review the policy and can void the contract within that time period. Also, penalties for violating provisions relating to marketing and sales of insurance to seniors have increased. Providers of annuities and insurance to elders must complete special training by 2005 and are charged with ensuring that policies truly benefit the seniors purchasing them. Selling products to seniors at home is also subject to new restrictions. Federal Law Changes HIPAA Anyone who has paid a visit to the doctor in the past year has heard about the Health Insurance Portability and Accountability Act of 1996 (HIPAA), effective in April, 2003. HIPAA requires medical facilities to restrict the release of "protected health information." The new HIPAA regulations, together with California privacy rules, afford great protections for a patient's privacy. In general, the protected health information cannot be disclosed absent a patient's consent or the consent of a person who has authority to act for that patient. Unfortunately, although HIPAA was not created with estate planning and elder law issues in mind, it significantly impacts these areas of the law. In the elder law arena, HIPAA will make obtaining a Conservatorship more problematic. The required physician declaration concerning the capacity of a proposed Conservatee to make health and/or financial decisions may be considered "protected health information." Likewise, many estate planning documents require one or two doctors to declare a person as incapacitated before allowing the person's designated agent or trustee to step in and handle the financial affairs or make health decisions for the incapacitated person. This presents a "chicken or the egg" dilemma. How can the designated agent/trustee authorize the physician to release this information, when it is this information that is required to authorize the agent to get the information? See the problem?! Therefore, we recommend that each of your estate planning documents (Trust, Durable Power of Attorney, and Advance Health Care Directive) all include an authorization for your agent/trustee to obtain your protected health information in order to document your incapacity. As an alternative, we suggest you at least execute an additional separate document authorizing your designated agents and trustees to access your protected health information. Please contact us to discuss this further, make changes to your documents, or execute our new "Authorization for Use and Disclosure of Protected Information" form. new Laws/Client Alerts California Nursing Homes Fail Inspections Sacramento, CA - January 30, 2004 - Surprise inspections of 150 California nursing homes revealed that many facilities did not meet minimum state health and safety standards. Problems included run-down living areas, fire safety violations, loose hand rails, pest infestations, improper food handling, and bad odors from urine and feces. 132 of the nursing homes had patient care violations such as over-medication, unreported elder abuse cases, preventable injuries, and failure to help disabled residents with personal hygiene. Over two-thirds of the nursing homes failed to provide each resident with the required 3.2 hours of care a day. Studies cite inadequate staffing as a major cause of nursing home abuse. For example, residents of nursing homes falling below minimal staffing standards are much more likely to develop serious bed sores and excess weight loss than those in other nursing homes. Operation Guardians, a task force led by the California Attorney General's office, conducted these inspections over a two-year period to address concerns about California nursing home care. One source of motivation was a 2000 report by the United States Congress Committee on Government Reform showing that only 18 of 288 San Francisco Bay Area nursing homes were in substantial compliance with federal care standards. How can you be certain the nursing home you and your loved ones utilize is adequate? Medicare's nursing home database (www.medicare.gov/NHCompare/Home.asp) offers details about each facility, including the number of beds, health condition of the residents, use of physical restraints, staff size and working hours, and violations found during inspections. A personal visit should also be conducted, where you can see for yourself whether residents are treated with dignity and respect, as well as provided with pleasant activities, good meals, and a caring staff. If you have a question about the legal rights of your elderly relative in a nursing home, please feel free to contact our offices. back to top Elder Alerts Prescription Drug Card Discount cards with the Medicare-approved mark will be available by June 2004 for immediate prescription drug savings. Medicare will contract with private companies to offer new, voluntary discount cards which will offer a discount off the full retail price of prescriptions. Projected savings are 10-25% or more on many drugs. Those with incomes less than $12,124 a year or married couples with incomes less than $16,363 may qualify for an additional $600 to help pay for prescription drug costs. These optional cards are being offered temporarily with enrollment beginning as early as May 2004 and continuing through December 31, 2005. (People whose drugs are covered by Medicaid are not eligible.) If all goes as planned, the Prescription Drug Benefit will be added to Medicare in 2006. All Medicare recipients will be able to enroll in plans that cover prescription drugs. Qualified people will pay a premium estimated to be $35 a month, with a $250 deductible. Medicare will pay 75% of drug costs between the deductible and $2,250. Beneficiaries will pay for drug costs between $2,250 and $5,100, and Medicare will pay 95% of the drug costs above $5,100. The Prescription Drug Benefit plan includes extra assistance for those with low income and limited assets. People who qualify for Medicare and Medicaid, with incomes below 100% of the federal poverty level (and with no separate asset test) will receive full premium subsidy, full subsidy of the deductible, and minimal co-pays. Other beneficiaries with low income and limited assets will receive premium and deductible assistance and limited cost-sharing. If you are interested in obtaining a Medicare-Approved Drug Discount Card, visit the official Government web site for people on Medicare, www.medicare.gov/maddc/home.asp,use their new tool, and see if you qualify. back to top |
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