Elder Law and Estate Planning: An Interview with Chris Petillo Part 1

{3:48 minutes to read} Today, our guest is Christopher Petillo, Certified Elder Law Attorney (CELA), and Certified Public Accountant (CPA) with the law firm of Feldman, Kramer & Monaco, P.C. He is an attorney whose expertise is in the areas of elder law and estate planning.

Michael Fliegelman: Over the years we’ve been writing a lot about long-term care and its effect on retirement planning. Chris, if you could share with us some of the traps for the unwary. Some of the things that you see constantly in your practice for which people have a blind spot.

Chris Petillo:

Though we’re not in the insurance business, we are big fans of long term care insurance. We’re coming at it from the perspective of someone who does the planning and gets the phone calls from family members saying, “Mom or Dad needs care.” When Mom and Dad have long term care insurance, the meetings with those family members are much less stressful for everyone involved, as opposed to when Mom and Dad didn’t plan in advance for that possibility.

Off the Books

In terms of the traps for the unwary, a big one is privately paying for an aide for Mom/Dad off the books. “Off the books” is probably one of the scariest phrases an elder law attorney can hear.
When you apply for Medicaid assistance for someone in need of nursing home care, there’s a look back at all the bank and financial statements for 5 years prior to the need for care. This means that, if someone applied for Medicaid nursing home benefits in June of 2016, all the financial statements from June 2011 forward would be in play. If there are unexplained cash withdrawals and no corresponding deposit somewhere, the local social services office assumes that the applicant must have gifted the money to the kids.
There are a lot of people who do off the books planning, not realizing that someday, it may come back to haunt them. We had a case where, over the course of 5 years, a daughter withdrew $108,000 to pay aides off the books. The nursing home did the Medicaid application, which was was denied due to the unexplainable $108,000. This amount was treated as a “gift” to the daughter—who now owes the nursing home for the first 9 months of Mom’s stay at $17,000 per month.

She called us in tears, saying “Where am I going to get $150,000? I already paid this person off the books. They didn’t give me any receipts, and now I’m staring down the barrel of this nursing home bill.”
Not to mention the other issues lurking: worker’s compensation, homeowner’s insurance and payroll taxes.
This is why we try to warn as many people as we possibly can, to beware of the off the books aide situation.

In Part 2 of our conversation with Chris, we will take a more in-depth look at Medicaid. If anyone has questions, they can reach me at Michael@swanwealth.com. If you have any specific questions for Chris, we’ll get them to him for his response.

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