CEA Elder Law & Guardianship 4 — Questions and Answers
Question 1: A Medicaid Qualifying Annuity used in elder law planning must meet which requirement to avoid being counted as a transfer for less than fair market value?
- It must be irrevocable, non-assignable, actuarially sound, and name the state as remainder beneficiary (Correct answer)
- It must be purchased at least 60 months before application
- It must pay income only to the institutionalized spouse
- It must be managed by a bank trust department
Correct answer: It must be irrevocable, non-assignable, actuarially sound, and name the state as remainder beneficiary
Under the Deficit Reduction Act of 2005, Medicaid-compliant annuities must be irrevocable, non-assignable, actuarially sound, and name the state Medicaid program as the primary remainder beneficiary.
Question 2: Under the Elder Justice Act, which federal agency has primary authority to coordinate elder abuse prevention efforts?
- Centers for Medicare & Medicaid Services (CMS)
- Department of Justice (DOJ)
- Department of Health and Human Services (HHS) (Correct answer)
- Social Security Administration (SSA)
Correct answer: Department of Health and Human Services (HHS)
The Elder Justice Act, enacted as part of the ACA in 2010, designated HHS as the lead agency for coordinating federal elder abuse prevention, detection, and prosecution efforts.
Question 3: Which of the following best describes a 'Miller Trust' (Qualified Income Trust) in Medicaid planning?
- A trust that holds exempt assets to protect them from estate recovery
- A trust that receives excess income to allow Medicaid eligibility in income cap states (Correct answer)
- A revocable trust used to avoid probate for nursing home residents
- A trust funded with life insurance proceeds for a surviving spouse
Correct answer: A trust that receives excess income to allow Medicaid eligibility in income cap states
A Miller Trust (QIT) is used in income-cap states to deposit excess income above the Medicaid limit, allowing the individual to qualify for Medicaid long-term care benefits.
Question 4: Which legal document specifically authorizes a named agent to make financial transactions on behalf of an elder without court involvement?
- Advance healthcare directive
- Durable Power of Attorney for Property (Correct answer)
- Revocable Living Trust
- Guardianship Order
Correct answer: Durable Power of Attorney for Property
A Durable Power of Attorney for Property (finances) allows a named agent to manage banking, investments, real estate, and other financial matters without court supervision.
Question 5: An elder law attorney advises a client about estate recovery. Which asset is typically NOT subject to Medicaid estate recovery in most states?
- A home solely in the deceased recipient's name
- Jointly owned property that passes by right of survivorship (Correct answer)
- A bank account that was in the recipient's sole name
- Probate assets passing through the deceased's estate
Correct answer: Jointly owned property that passes by right of survivorship
Property passing by right of survivorship (such as jointly held real estate with a surviving co-owner) avoids probate and is not subject to Medicaid estate recovery under many states' limited estate recovery definitions.
Question 6: In a guardianship proceeding, what evidentiary standard must typically be met to appoint a full plenary guardian?
- Beyond a reasonable doubt
- Preponderance of the evidence
- Clear and convincing evidence (Correct answer)
- Substantial evidence
Correct answer: Clear and convincing evidence
Most states require clear and convincing evidence of incapacity before a court may strip an individual of their legal rights through full guardianship.
Question 7: What is the primary purpose of a 'Special Needs Trust' (SNT) in elder and disability law?
- To shelter assets from creditors during bankruptcy
- To preserve government benefit eligibility while providing supplemental funds (Correct answer)
- To transfer wealth to heirs at the lowest possible tax cost
- To fund long-term care insurance premiums
Correct answer: To preserve government benefit eligibility while providing supplemental funds
An SNT holds assets for a beneficiary with disabilities without disqualifying them from means-tested programs like Medicaid and SSI by supplementing rather than replacing those benefits.
CEA Elder Law & Guardianship 4
A Medicaid Qualifying Annuity used in elder law planning must meet which requirement to avoid being counted as a transfer for less than fair market value?