In one incident, an employee ordered duplicate ATM cards when an 86-year-old customer reported his card lost. The employee had friends use the duplicates to withdraw $8,000 from the customer’s account. The customer was unaware of the theft until he was notified that his account was overdrawn, which had never happened to him before.

In another, an employee befriended a customer and was writing checks out for her to sign, some of which were for legitimate bills and others of which were payable to the employee.

Larson said an employee at this Bank of America branch in Lafayette befriended her mother [77-year-old Frances Saimons]. “He was more than very nice. He was charming,” Saimons said.

Saimons said he helped her manage her finances. “Always, he always wrote my checks out,” she said. “He would say sign there, and I would sign it.”

The customer did not realize that $28,000 in checks had been made out to the employee until a bank investigator visited her daughter. The employee claimed that the checks were loans, although the victim denied this and the bank has a policy forbidding such a practice.

Family members are often reluctant to interfere in the personal business of an elder, which is understandable. But polite inquiry about their opinion of the bank, whether they find the bank employees helpful and how, might be acceptable. Sometimes the elder will permit a family member review bank statements. The sooner problems are spotted, the more quickly damage can be limited and, hopefully, remedies sought.

Financial elder abuse can be a crime, and banks are mandatory reporters to Adult Protective Services (APS) when they become aware of such behavior. Notify the bank and APS immediately if you suspect abuse. To obtain more information or to report adult or elder abuse call APS at (510) 577-3500 or toll free at (866) 225-5277, 24 hours a day and all referrals are confidential.

Concept One: Medicare or Medi-Cal

Medicare and Medi-Cal, although they sound alike, are very different, and it’s important to understand what each does in the nursing home context. Medicare is what comes with Social Security and is not “means-tested” (explained below). It does not pay for nursing home care unless the condition is one from which a person might recover, and s/he is making progress toward recovery. Very few residents of nursing homes are covered by Medicare, and even then only for brief periods while rehabilitating from conditions such as broken hips and strokes.

Medi-Cal, on the other hand, works very differently. It is known in states other than California as Medicaid. Medi-Cal does pay for long term nursing home care in a Skilled Nursing Facility, and is “means-tested.” Medi-Cal also tries to recover what it spends on a patient, after the patient dies. So let’s talk about “eligibility” and “recovery”.

Concept Two: “Means-Testing”

Medi-Cal does not take anything at the eligibility stage. There is tremendous misunderstanding about this. It simply denies benefits until the applicant is qualified by the means-testing criteria. The notion is widespread that the State of California goes around seizing assets before granting benefits. In order to qualify, the applicant must have no more than the allowed non-exempt assets, i.e., assets which are counted to determine eligibility (basically, cash and cash equivalents). Certain assets, such as the home, are exempt and do not count under most circumstances. Medi-Cal waits until an application is filed, then determines if the applicant meets the eligibility criteria/“means test.” There is one set of criteria for married people and another for single people.

Concept Three: Misunderstandings Abound

You may have encounters with many people who do not understand the Medi-Cal rules, but think they do and give poor advice. This may include medical personnel, financial and tax advisers, nursing home and hospital staff, neighbors and friends, barbers, and golf buddies. Because the rules are so complex and are not easy to research, you may have conflicting information. And the rules change over time, so that what was true when a friend’s mother went to a nursing home in 1985 probably no longer applies. So probably some of what you believe to be true is incorrect.

Concept Four: Qualifying

There are various penalties for giving assets away in order to qualify for Medi-Cal, and the “look-back” period is not the same as the penalty period. Furthermore, the “look-back” period in the federal statute is not the one being applied in California. If a transfer (giving something away without receiving something of value in return) occurs within the “look-back” period, then the period of ineligibility/penalty period is calculated. So, obviously, all of this must be considered very carefully.

Concept Five: Separate Recovery Issues From Eligibility

Once someone qualifies and starts receiving Medi-Cal benefits by way of payments made to the nursing home, Medi-Cal starts keeping track of what it spends. When the recipient dies, Medi-Cal seeks opportunities for reimbursement, by filing a creditor’s claim in a probate, for example. The strategies for avoiding recovery are not the same as the strategies for qualifying in the first place. The two issues must be analyzed separately.

Concept Six: The Problem with Trusts

Having assets in a standard revocable living trust does not “protect” them for the purposes of eligibility or recovery. Special Needs Trusts are recent inventions still not frequently seen, and are seldom applicable with elderly people. What a revocable trust often does do is make management of the assets, for purposes of Medi-Cal analysis, more cumbersome. Most trusts are established in order to avoid probate, and many do not deal adequately with incapacity planning. The parent with Alzheimer’s Disease symptoms rendering him unable to manage the assets, who is the initial trustee, may be quite unwilling to step aside in favor of the successor. Once in office, the successor may have a conflict between the obligations of a trustee, expressed in mandatory terms in the trust, and what seems best under the circumstances. So if there is a trust, or might be, find that document and all amendments and other related documents, and try to determine what has been transferred to the trust before meeting with an attorney.

Concept Seven: Gather Information and Seek Professional Advice

Some incapacitated people are secretive, either due to lifelong habits or disease processes which tend toward paranoia. It can be very difficult to get objective information about the financial situation under these circumstances, and respect must be paid to the wish for privacy. Nevertheless, gather as much information as you can before seeking professional advice.

Unconscious sedation involves the use of I.V. sedation or general anesthesia, which produces complete sleep during which you will be free of pain and will have no memory of the procedure.

Phone: (800) 395-1152
Link: Blende Dental Group
Updated: Nov 2009

Phone: (510) 251-2400
Link: Phillips Bonding Company
Updated: 1 Sep 2009

Phone: (510) 302-2222
Link: Alameda County Bar Association (ACBA)
Updated: 1 Sep 2009

Link: Contra Costa County Superior Court
Updated: 1 Sep 2009

Phone: (520) 881-4005
Link: National Academy of Elder Law Attorneys, Inc. (NAELA)
Updated: 1 Sep 2009

Phone: (408) 882-2700
Link: Santa Clara County Probate Court Help for Adults/Elders
Updated: 1 Sep 2009

Phone: (510) 832-3040
Link: Legal Assistance for Seniors
Updated: 1 Sep 2009