Estate Planning & Elder Law Blog

Housing Authority Cannot Count Distributions from Special Needs Trust as Income

Reversing a lower court, the U.S. Court of Appeals for the First Circuit rules that a state housing authority cannot count distributions from a special needs trust funded by a settlement as income because the payments would not be considered income had the settlement been taken as a lump sum. DeCambre v. Brookline Housing Authority (1st Cir., Nos. 15-1458, 15-1515, June 14, 2016).

Caretaker Exception Denied Because Child Did Not Provide Continuous Care

A New Jersey appeals court determines that the caretaker child exception does not apply to a Medicaid applicant who transferred her house to her daughter because the daughter did not provide continuous care for the two years before the Medicaid applicant entered a nursing home. M.K. v. Division of Medical Assistance and Health Services (N.J. Super. Ct., App. Div., No. A-0790-14T3, May 13, 2016).

NJ High Court Rules Medicaid Planning by Non-Lawyers Is the Unauthorized Practice of Law

Joining the states of Florida, Ohio, and Tennessee, the Supreme Court of New Jersey has found that non-lawyers who apply the law to a Medicaid applicant’s specific circumstances are engaging in the unauthorized practice of law.

The state Supreme Court had received complaints that non-lawyers retained by families or nursing homes to assist with the Medicaid application process were providing erroneous or incomplete law-related advice, and a state attorney ethics hotline had received reports that non-lawyers have charged “clients” large sums of money for faulty Medicaid-planning legal assistance, causing the elderly victims significant financial loss.

2016 Medicare and Medicaid Numbers

The following are the 2016 Medicare and Medicaid numbers as released by the Centers for Medicare & Medicaid Services, as well as the 2016 federal and New Jersey estate and gift tax numbers:

Third Circuit Upholds Use of Short-Term Medicaid Annuities

By Jason Marx

A recent decision by the U.S. Court of Appeals for the Third Circuit has held that the use of short-term Medicaid qualified annuities is a permissible Medicaid planning strategy. In so doing, the court in Zahner v. Secretary, Pa. Dept. Of Human Services concluded that a Medicaid planning motive does not preclude the use of very short-term annuities, provided that the annuities meet the statutory safe harbor requirements. For more details about this decision, please see the National Academy of Elder Law Attorneys’ website.

Senate Passes Special Needs Trust Fairness Act Legislation

By Jason Marx

The United States Senate recently unanimously approved the Special Needs Trust Fairness Act in an effort to provide those with disabilities the right to create their own special needs trust. 

Special needs trusts are used to enable individuals with disabilities to qualify for government benefits, such as Medicaid and other necessary care/services that enhance quality of life.


By Jason Marx

Legislation that will require hospitals to notify patients of their status as outpatients has passed Congress and should be signed into law by the President. Outpatient status limits the patient’s ability to receive Medicare coverage for care in a skilled nursing facility after discharge from the hospital.

H.R. 876 Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act passed the U.S. Senate on July 27, 2015. Since the Senate passed the same version of the bill as previously passed by the House, the legislation will now go directly to President Obama for signature.


The following are the 2015 Medicare and Medicaid numbers as released by CMS:

New Relief for Late “Portability” Elections

On January 27, 2014, the Internal Revenue Service issued Rev. Proc. 2014-18 which provides a simplified method for certain taxpayers to obtain relief for an extension of time under Section 301.9100-3 of the Procedure and Administration Regulations to make a “portability” election under Section 2010(c)(5)(A) of the Internal Revenue Code.  Relief is available for estates of decedent’s who died in 2011, 2012, and 2013, provided certain eligibility and procedural requirements are satisfied.