Medicaid and Gifts

Medicaid will not pay for long term or home and community based care during a Medicaid penalty period. A penalty period will generally be imposed where uncompensated gifts have been made during the five years immediately preceding the filing of the Medicaid application. This period is known as the Medicaid lookback.  The length of the penalty period is computed based on the total amount of gifts during the look back period. Under the current Medicaid divisor, approximately one month of ineligibility is imposed for every $10,000 given away during the lookback period.

Many applicants are unaware that there is a rule, which applies to Medicaid applications filed in New Jersey after May 26, 2010, as well as to Medicaid applications filed in other states, including Ohio, preventing recalculation of the penalty period where some, but not all of the gifts made during the lookback period, were returned. The rule, as stated in New Jersey, is found in Medicaid Communication 10-06 and requires that the penalty period cannot be decreased for the returned gifts unless all of the assets given away have been returned.  This rule can have very harsh consequences, which are illustrated in a recent case from Ohio.

In Paczko v. Ohio Dept. of Job & Family Servs., (2017 OH 9024 (Oh. Ct. App., 8th Dist., Cuyahoga County, No. 105783, Dec. 14, 2017), an elderly woman transferred the sum of $146,122 to a trust, which would benefit her children. She later applied for Medicaid during the five year lookback period. The sum of $89,227.38 was returned from the trust to the elderly woman to pay for her care. She sought to reduce the original Medicaid penalty period computed on the total transfers during the preceding five years, by the sum of the returned gifts.  At the Board level, the Ohio Medicaid agency gave her limited for her returns, and denied her request for additional credit for all of the gifts returned. Her appeal was denied at both the Staff Hearing Officer and Court of Common Pleas levels.

While the Paczko case is not binding on the New Jersey courts, the case is a good illustration of what can happen when there is a partial return of gifts without further planning and a Medicaid application is filed within the five year lookback period. The take away from Paczko is that, in New Jersey, as in Ohio, applicants for Medicaid re well-advised to be mindful of the “no credit for partial returns” rule and to consult an attorney before filing any Medicaid application, or proceeding to a Medicaid Fair Hearing, to determine what solutions may be available.

Questions? Let Jane know.

 

Jane Fearn-Zimmer is a shareholder in the Elder and Disability Law, Taxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

 

Involuntary Commitment Proceedings –Who Pays for That?

An involuntary commitment, or civil commitment, proceeding, is a summary legal action filed in order to obtain a court order to require a mentally ill individual to receive necessary psychiatric treatment against his or her wishes, pursuant to N.J. Rule of Court §4:74-7 and N.J.S.A. §30:4-27.2.  Typically, the involuntary commitment process is initiated through a mental health screening, but the process can also be filed by a prosecutor or the Attorney General. Only individuals who are shown by clear and convincing evidence to present a danger to themselves may be involuntarily committed.

An order for involuntary commitment must be issued within 72 hours, and the hearing itself must be held in no more than 20 days.  The individual who is the subject of an involuntary commitment hearing has the right to an attorney to represent her in the commitment proceedings. The existence of involuntary commitment proceedings does not mean that an individual has been adjudicated incapacitated, nor does it mean that her rights, such as the right to bear arms, the right to drive, the right to have visitors, to receive medical treatment, and to fresh air and exercise, are removed or restricted.  The only mechanism to restrict these rights is to obtain a guardianship order from the Superior Court, which is an entirely different proceeding governed by different rules.

By law, the State of New Jersey is required to bear ninety percent of the cost of an involuntary commitment, leaving the remaining ten percent to be borne by the involuntarily committed individual. The financial evaluation process is undertaken by the county adjuster’s office. If it is determined that the individual can afford to pay for the cost of their psychiatric care, the county adjuster seeks a court order requiring the individual to pay for the cost of psychiatric care, which can impose a heavy financial burden on the former patient.

It is important to know that hospitals and the county adjuster’s office are required to follow strict regulations in collection matters arising from emergency hospital admissions and psychiatric emergency screening services.  Charity care regulations apply where a financially eligible patient becomes involuntarily committed as the result of a hospital emergency room admission. Newton Medical Center v. D.B., No. A-5101-15T4 (N.J. Super. App.Div., January 17, 2018.  The case involved an uninsured patient who was admitted to a hospital emergency room during a psychotic episode, and was involuntarily committed. After the patient’s release, the medical center billed the patient the sum of $65,000 bill for the eleven days of care, reduced the bill due to the patient’s lack of insurance, and attempted to collect on the reduced bill. At the trial level, the Court entered summary judgment in favor of the hospital.  The Appellate Division reversed the trial judge’s decision, ruling that the hospital could not recover from the former patient, because it did not contact the patient as required by the charity care regulations.

Questions? Let Jane know.

 

Jane Fearn-Zimmer is a shareholder in the Elder and Disability Law, Taxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

Selling the Home Through Guardianship

What happens when residential real property must be sold, but the owner of the property can no longer make their own decisions? If there is no one authorized to sell the property under an existing power of attorney, the real property can be sold by a guardian. Selling real property through a guardianship requires two real estate appraisals and court approval. The touchstone is whether the proposed sale will be in the best interests of the incapacitated person. Factors for consideration include whether the incapacitated person can return to live in the home, the fair market and tax assessed values of the property, the marketability of the property, the outcome of any prior attempts to sell the property, the expenses of continued ownership, and whether a sale or liquidation agreement must be entered into as a condition of Medicaid eligibility. In limited cases where the safety of the alleged incapacitated person is endangered, the guardianship process can be expedited in New Jersey (and other states) through a temporary emergency guardianship order.

Questions? Let Jane know.

 

Jane Fearn-Zimmer is a shareholder in the Elder and Disability Law, Taxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

 

Estate Planning Check Up and the New Tax Laws

The Tax Cuts and Jobs Act of 2017 enacted the most sweeping changes to the federal tax code since 1986. Many people assume that due to the increase in the basic exclusion amount (BEA) to $11,180,000 per individual, only the wealthiest need now estate planning. That is just not true!

Certainly, many fewer federal estate tax returns will be required to be filed. However, it is still important to periodically review your documents and your estate plan.  Most clients should review their existing wills and trusts. Particularly where a formula bequest was incorporated, the estate plan must be reviewed to ensure consistency with the client’s legacy goals.  This is due to the increase of the BEA.  The BEA functions like a sponge to limit or prevent a decedent from any federal estate tax liability at death. The BEA soaks up the decedent’s aggregated lifetime gifts and the assets remaining in the decedent’s estate at the moment of death, allowing the donor’s wealth up to the BEA limit to be transferred free of federal estate and gift taxes. Beyond the BEA, the estate will incur federal estate transfer tax liability. When the BEA was significantly lower, it was very common for estate planners to draft formula bequests, which allocated all of the decedent’s assets up to the decedent’s basic exclusion amount, to a “credit shelter trust” for the benefit of the surviving spouse and/or the descendants of the decedent. The remaining assets would pass outright to or in trust for the surviving spouse. With the doubling of the BEA and with credit shelter trusts which do not name the surviving spouse as a trust beneficiary, those estate plans will now disinherit the surviving spouse, and the surviving spouse will then be entitled to a one-third elective share of the decedent’s augmented estate in New Jersey.  The solution is to update the estate planning now, possibly with a disclaimer formula.  The new law sunsets on December 31, 2025.

At least until the new law sunsets, under the current regime, family limited partnerships remain a viable planning strategy, with the possibility of discounts for lack of marketability and lack of control. Trusts will continue to be useful for non-tax reasons, including privacy by avoiding the probate process, creditor protection, curbing spendthrift children, centralizing asset management, fostering family harmony through controlled asset disposition, and preserving a fund for a special needs beneficiary while protecting the beneficiary’s Medicaid and SSI eligibility.

Questions? Let Jane know.

 

Jane Fearn-Zimmer is a shareholder in the Elder and Disability Law, Taxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

It’s Her Party, But Can Miley Cyrus Write What She Wants? Miley Cyrus Sued for Copyright Infringement Over 2013 Hit We Can’t Stop

Miley Cyrus topped the 2013 charts with hit song ‘We Can’t Stop,” which begins with the lines “It’s our party we can do what we want, It’s our party we can say what we want, It’s our party we can love who we want” but a new lawsuit, filed on March 14, 2018 in the United States District Court for the Southern District of New York, suggests that while it may be her party, the song may not contain her lyrics.  Jamaican artist Michael May, who performs under the stage name Flourgon, has asserted that Ms. Cyrus, and her co-writers, producers and distributors infringed on a line from his 1988 song “We Run Things.” In particular, May’s song contains the lyric “We run things. Things no run we.”  May claims that Cyrus’ lyric “We run things. Things don’t run we.” infringes on May’s earlier lyric.

May asserts in his lawsuit that Cyrus’ song owes its “chart-topping popularity and its highly-lucrative success” to May’s lyrics and that “the entire theme of ‘We Can’t Stop’ would be hollow in sound and impact.”  May further also cited a 2015 interview by co-writer Theron Thomas, where he indicated that his music is influence of Caribbean culture as proof that the lyrics were copied.  May is seeking to enjoin Cyrus from selling, distributing and performing “We Can’t Stop,” as well as monetary damages.  While the complaint does not specify the exact amount sought, his attorney told CNNMoney that $300 million would be “reasonable compensation.”   What a mench.

What is Copyright Infringement?

For those of you unfamiliar, a copyright arises from the creation of an original work that is fixed in a tangible medium of expression, described as “when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.”  While the mere creation of the composition is enough to establish a copyright, registration affords the author/publisher additional protections. The courts often look to whether the composition contains a minimal spark of creativity. The spark can be in the chord progression, rhythm, melody or lyrics. In order to establish the infringement, a comparison of the songs must be done, often by an expert, and a judge or jury must then determine if such an infringement, or unauthorized borrowing or use of the same chord progression, rhythm, melody or lyrics, has occurred. Since such proof is often subjective to the fact finder, most cases are resolved prior to a final determination in Court.

Prior Precedent 

Copyright disputes between musicians, writers and publishers have been part of the music landscape for decades. In 1971, former Beatle George Harrison had a number 1 single on his hands with ‘My Sweet Lord.’ Yet, while that single was still in heavy rotation, Harrison was hit with a lawsuit by publisher Bright Tunes Music, which held the rights to the Chiffons’ 1963 hit ‘He’s So Fine,’ written by Ronnie Mack. Harrison tried unsuccessfully to settle the matter and, ultimately, lost at trial, having to pay Bright Tunes damages in the amount of $1,599,987! As only a former Beatle could, Harrison did, however, turn the experience of tortuous litigation into another hit called ‘This Song.’

More recently, Robin Thicke, Pharrell Williams and Clifford Harris, Jr. were found to have infringed on the work of Marvin Gaye, in particular the song ‘Got To Give It Up.’ Thicke, Williams and Harris pre-emptively filed suit against the Gaye family and Bridgeport Music, in an attempt to have the court determine Thicke and company had not infringed on Gaye’s work. The suit backfired, with the Court finding that Thicke and company infringed on Gaye’s work and awarding $5.3 million in damages.  Thicke and company have appealed to the United States Court of Appeals for the 9th Circuit where they argued that there can be no infringement for a “groove,” which it sought to differentiate from a lyric, rhythm, etc.  No decision has been reached by the 9th Circuit as of yet, but Thicke, Williams and Harris have a tough road ahead to overturn the lower court’s verdict.  On the other hand, Taylor Swift prevailed in a California copyright dispute earlier this year with facts similar to those in the Cyrus action.  The plaintiffs in that action alleged that Swift’s lyrics in the hit “Shake it Off” infringed on the lyrics to their song  “Playas Gon’ Play.”  Swift’s lyrics included the phrase “[T]he players gonna play, play, play, play, play and the haters gonna hate, hate, hate, hate, hate.” which plaintiff compared to its earlier lyrics  “Playas, they gonna play / And haters, they gonna hate.”   The presiding judge summarily dismissed the complaint against Swift stating “The allegedly infringed lyrics are short phrases that lack the modicum of originality and creativity required for copyright protection.”

As recently as this past January, Lana Del Rey tweeted that Radiohead was bringing a lawsuit against her claiming that her song, “Get Free” infringed on Radiohead’s hit 90s song, “Creep.” To date, no such lawsuit has actually been filed, although Radiohead’s lawyers have admitted to being in discussions with Del Rey’s representatives where they requested that the band be credited on Del Rey’s song.

Does May Have a Case?

After reviewing the lyrics and listening to both songs, May has a significant uphill battle in his copyright dispute, if the New York court follows the precedent of the California Court.  As with the Swift case, this dispute involves only a seven-word line in a more substantial composition.  While the lyrics are very similar, with six out of the seven words being identical, the Court will likely find the allegedly infringing lyrics in Cyrus’ song are merely short phrases that lack the modicum of originality and creativity required for copyright protection.”

While the outcome will likely favor Cyrus, if the Court were to rule in May’s favor, a $300 million award is very unlikely.  Copyright infringement damages fall into three main categories…actual damages, profits and punitive damages. Damages are governed by 17 U.S.C. § 504(b), which provides that “The copyright owner is entitled to recover the actual damages suffered by him or her as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages. In establishing the infringer’s profits, the copyright owner is required to present proof only of the infringer’s gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.”  In addition, the Court may impose punitive damages, in an amount in excess of the actual damages and profits.  Without proof that Cyrus’ song caused him to lose money and opportunity, May, if victorious, would likely only receive Cyrus’ profits, which would likely be exponentially less than the $300 million suggested by May’s counsel.

Questions? Let Jeff know.

Jeff Cohen is a member of Flaster Greenberg’s Litigation, Intellectual Property, Corporate and Real Estate Practice Groups. He has been a trial attorney for more than 23 years, counseling and representing a diverse range of clients in matters related to commercial contracts, shareholder and partnership agreements, trademarks, copyrights, patents, including Hatch-Waxman, insurance coverage, franchise disputes and commercial construction.

Lana Del Rey May Have Creeped too Close to Radiohead’s Melody, Copyright Infringement Suit Nears

A tweet sent by Lana Del Rey earlier this week (likely to the chagrin of her attorneys) informed her 8.3 million followers that Radiohead is claiming that the song ‘Get Free’, off her recent album ‘Lust for Life’, infringed on Radiohead’s 1993 hit song ‘Creep.’ The 90’s band is seeking 100% of the profits related to the publishing of the song, which Del Rey is credited with co-writing along with songwriters and record producers, Kieran Menzies and Rick Nowels.

Fast forward to a few hours after the tweet was sent when Del Rey then repeated this sentiment at a subsequent concert in Denver, CO, where she referred to the song as her “personal manifesto.”  As an aside, it was a questionable move for Del Rey to go so public with this dispute, let alone state terms of settlement offers, as settlement negotiations are often confidential…unless where published in the manners Del Rey has done, and could taint the available jury pool. Check out a clip of Del Rey addressing the crowd here.

Does Radiohead have a case?

I’ve never been much of a gambler, but after listening to both songs I would say that Radiohead has a strong case in this copyright dispute. For those of you unfamiliar, a copyright arises from the creation of an original work that is fixed in a tangible medium of expression, described as “when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.”  While the mere creation of the composition is enough to establish a copyright, registration affords the author/publisher additional protections. The courts often look to whether the composition contains a minimal spark of creativity. The spark can be in the chord progression, rhythm, melody or lyrics. In order to establish the infringement, a comparison of the songs must be done, often by an expert, and a judge or jury must then determine if such an infringement, or unauthorized borrowing or use of the same chord progression, rhythm, melody or lyrics, has occurred. Since such proof is often subjective to the fact finder, most cases are resolved prior to a final determination in Court.

In fact, the very song Radiohead is now claiming Del Rey has infringed upon, was itself the subject of a claim of infringement by Albert Hammond and Mike Hazlewood, regarding the 1972 song ‘The Air That I Breathe,’ sung by The Hollies. As a result of that claim, Hammond and Hazlewood received co-writing credits and a percentage of the royalties of Radiohead’s ‘Creep.’ While one might ask whether Hammond and Hazlewood should really be making the claim against Del Rey, it is too soon to tell whether it is the very same chord progression, rhythm, melody or lyrics involved in the Del Rey-Radiohead dispute as the Radiohead-Hollies dispute, as every song is made up of many different such elements. Time will tell whether Radiohead’s lawsuit will go anywhere, although my money would be on Radiohead winning, if it went to trial. However, odds are that there will be a similar result to the Radiohead-Hollies out of court settlement, with Radiohead sharing writing credits and royalties.

You Be The Judge: Take a listen to both songs here:

Prior Precedent 

Copyright disputes between musicians, writers and publishers have been part of the music landscape for decades. In 1971, former Beatle George Harrison had a number 1 single on his hands with ‘My Sweet Lord.’ Yet, while that single was still in heavy rotation, Harrison was hit with a lawsuit by publisher Bright Tunes Music, which held the rights to the Chiffons’ 1963 hit ‘He’s So Fine,’ written by Ronnie Mack. Harrison tried unsuccessfully to settle the matter and, ultimately, lost at trial, having to pay Bright Tunes damages in the amount of $1,599,987! As only a former Beatle could, Harrison did, however, turn the experience of tortuous litigation into another hit called ‘This Song.’

More recently, Robin Thicke, Pharrell Williams and Clifford Harris, Jr. were found to have infringed on the work of Marvin Gaye, in particular the song ‘Got To Give It Up.’ Interestingly, it was Thicke, Williams and Harris who pre-emptively filed suit against the Gaye family and Bridgeport Music, in an attempt to have the court determine Thicke and company had not infringed on Gaye’s work. The suit backfired, with a finding that Thicke and company had infringed on Gaye’s work and awarded $5.3 million in damages.  Thicke and company have appealed to the United States Court of Appeals for the 9th Circuit.  At oral argument, Thicke and company argued that there can be no infringement for a “groove,” which it sought to differentiate from a lyric, rhythm, etc.  No decision has been reached by the 9th Circuit as of yet, but Thicke, Williams and Harris have a tough road ahead to overturn the lower court’s verdict.

Questions? Let Jeff know.

 

Jeff Cohen is a member of Flaster Greenberg’s Litigation, Intellectual Property, Corporate and Real Estate Practice Groups. He has been a trial attorney for more than 23 years, counseling and representing a diverse range of clients in matters related to commercial contracts, shareholder and partnership agreements, trademarks, copyrights, patents, including Hatch-Waxman, insurance coverage, franchise disputes and commercial construction.

 

New Jersey Toughens Laws for Divorced Parents Wanting to Relocate their Children Out of State

Moving boxes with family.jpgA major New Jersey Supreme Court decision has made it more difficult for custodial parents to move their children out of state. The ruling calls for stricter legal standards to be applied by the New Jersey Judiciary in order to establish “cause” in all cases when a divorced or separated parent seeks to relocate from New Jersey with the minor children of the marriage without the consent of the other parent.

Prior to this decision, there were two standards that were applied:

  1. A lesser, more flexible standard when one parent is the parent of primary residence and the other is the parent of alternate residence, and
  2. One when the parties equally share legal and residential custody.

In the former, the lesser requirement was that the parent only had to demonstrate “good cause” for the move and that the move was not “inimical to the interests of the child”, and the burden to oppose the move then shifted to the objecting parent. In the latter, the parent had to demonstrate that the move was in the best interests of the child.

In the recent Bisbing v. Bisbing decision, the Court repealed the separate standards. The Court mandated that in all cases where a parent seeks to relocate from New Jersey with the minor child(ren) of the marriage without the consent of the other parent, the courts must conduct a best interests analysis to determine “cause” to determine whether the relocation is in the best interests of the child(ren). The Court is to apply the statutory factors set forth in N.J.S.A. 9:2-4 and other relevant considerations to determine whether the relocation is in the best interests of the child(ren) involved. This analysis must be performed whether custody is equal or whether one parent is primary.

The Court noted in its decision that adopting this singular standard may avoid disputes as to who should be the primary parent when it is clear that one parent is in a better position to serve that primary role. It would further avoid accusations that the designation was sought to facilitate the ability to move the child(ren) out of state.  The decision to move must now be proven to be in the best interests of the child(ren), rather than the parent.

The impact of this decision will have far-reaching effects, and will likely raise questions among divorced parents considering and/or opposing a proposed out-of-state move. For more information on this decision, or if you have questions on how your family may be impacted, we invite you to contact Steven B. Sacharow, or any member of our Family Law Group.

Flaster Greenberg’s Family Law Practice draws on decades of experience in the ever-changing legal landscape that affects the family dynamic. Our family law attorneys serve as advocates for our clients, providing guidance on virtually all family law-related issues including divorce, custody and parenting time, child support, spousal support (alimony), equitable distribution of property, same sex relationships, prenuptial agreements, adoption and family formation, and mediation and arbitration. 

Steve Sacharow, Flaster GreenbergSteven B. Sacharow has substantial and extensive experience in family law and is nationally recognized for his work. His representation of clients includes matters involving child custody, parenting time, child support, alimony and equitable distribution of assets. It also consists of legal aspects of relationship formation including cohabitation and prenuptial agreements. His family law practice further includes representation of individuals involved in same sex relationships, including cohabitation agreements and dissolution of relationships, involving both civil unions and non-formalized relationships, as well as mediation (as a mediator and representing clients in mediation) and collaborative divorce.  Additionally, his adoption practice is comprised of domestic and interstate adoptions, agency or private, and he has extensive experience in the litigation of contested adoption matters. He can be reached at 856.661.2272 or via email.
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