Ethan R. Okura
Hawai‘i Herald Columnist
Nearly six months have passed since Hawai‘i’s leadership imposed the original work-at-home/stay-at-home order back in March to slow the spread of the novel coronavirus. The effort to make ends meet has been difficult and scary for many who have lost their jobs, or otherwise rely on tourism. I would venture to say that most of us who work here or own a local business have struggled, if not directly on account of the reduction of incoming tourist dollars, then because of the lockdowns.
Despite the challenges, I’m so grateful to see that most people I encounter here have managed to preserve our aloha spirit. They are considerate of their neighbors and others, they are following the new rules, and they don’t seem to be engaging in the level of violence that we witness on television from other parts of the country. I believe it is critical to maintain our spirit of aloha, as we hunker down for what is potentially a multi-year economic recession or depression ahead.
We’ve been fortunate to have relatively low infection and death rates in Hawai‘i compared to most of the country. In Yuma County, Arizona, one out of every 17 residents has contracted the virus; and in New York City, one out of every 360 residents has died from it. Nursing homes, in particular, have been hit hard. New Jersey has the worst statistics with 362 positive cases per every 1,000 residents. In addition, more than 40% of all U.S. coronavirus deaths are linked to nursing homes.
The problem with coronavirus in nursing homes is that so many people live in close proximity to each other and are dependent on others for their care. If one person gets the virus, it’s likely to spread to others very quickly. Nursing homes in Hawai’i are facing their own challenges with the spread of COVID-19 within their facilities; but thankfully, these problems have not been as severe as they are in some areas of the U.S. mainland. However, if you do have a loved one in a nursing home, and if at some point, you decide (on his or her behalf) that home care would be preferable to staying in that institution, here are estate-planning considerations.
First, if your loved one is or was in a nursing home, and is or was qualified for Medicaid to pay for long-term care services, then the state has a right to recover all amounts that it has spent on your loved one’s nursing home care. Typically, if the nursing-home resident who is a Medicaid recipient owns his or her home or part of a home, the state will place a lien against that real property to secure the state’s right to recover the money it has spent once the nursing-home resident passes away.
However, there is a rule that requires the state to dissolve (or remove) a lien placed on a Medicaid recipient’s home once the recipient is discharged from the medical institution and returns home. (See Hawai‘i Administrative Rules 17-1705-57(e)). So for those who have been receiving Long-Term Care Medicaid benefits, and who have a Medicaid lien placed against their real property by the state, an estate planner or attorney can help get the lien removed once the recipient returns from the nursing home to his or her own house.
Another time this rule comes into play, is when we have clients who are in hospice or otherwise nearing the end of their lives, and they want to pass away at home rather than in the nursing facility. Sometimes they will arrange to come home for their final days. This is another opportunity to have the lien removed.
Please keep in mind that we’re not advocating for people to leave the safety of the nursing facility and return to their own homes just to remove the Medicaid lien, as depending on their medical condition, that action might pose a risk to their health or well-being. Nevertheless, if this situation does apply to you or your loved one, whether on account of an outbreak of coronavirus in a nursing facility, or just a personal desire to return home, please know that there might be a beneficial estate-planning opportunity in some situations to protect the value of the equity in that home which might otherwise be lost.
In the meantime, stay safe, be kind and plan ahead for whatever might come!
© OKURA & ASSOCIATES, 2020
Honolulu Office (808) 593-8885
Hilo Office (808) 935-3344
Ethan R. Okura received his JD from Columbia University in 2002. He specializes in Estate Planning to protect assets from nursing-home costs, probate, estate taxes and creditors.
This column is for general information only and is not tax or legal advice. The facts of your case may change the advice given. Do not rely on the information in this column without consulting an estate-planning specialist.