02May 2016

Denial of SoonerCare Nursing Home Benefits

Before a person is qualified for Medicaid they must be both financially and medically eligible.  An application is completed then the family must provide 60 months’ worth of financial records to the Oklahoma Department of Human Services.  DHS looks for gifts with the assumption that they were made to become eligible for Medicaid.

Gifts create Penalty Periods

It is not unusual for the DHS to impose a penalty period when someone applies for nursing home benefits.  The rules are so complex that the caseworker may apply the wrong standard.  Money paid for legitimate services may be treated as gifts.  This happened in the case of Ms. Clara.**  Ms. Clara and her husband were in their 90s.  They suffered from limited mobility, medical problems and dementia.  Living alone was not an option as they were both at risk of falling. Ms. Clara often put beans on the stove and forgot about them causing a fire risk.  Their doctor suggested 24 monitoring.  The family held a meeting and agreed that they, together with some close friends, would provide caregiving services and be compensated at the rate of $10 per hour.   They provided needed supervision and other services for about two years.

Out of Money and Out of Help

Ms. Clara’s husband passed away.  Shortly afterwards her daughter, who spearheaded the caregivers, also passed away.  The family was no longer able to manage the caregiving.  About this time Ms. Clara ran out of money as well and entered a nursing home.  She applied for Medicaid skilled nursing benefits.  DHS examined the bank statements and initially concluded that $60,000 was transferred to family members. Instead of viewing the payments as compensation for services, DHS treated them as gifts. Later, they revised the number to $113,000 which created a penalty period for 792 days.  Click Here To See Denial of Claim

Caseworker Used Flawed Reasoning, Ignored Facts

The caseworker used flawed analysis when she rejected the application.  She treated the $10 per hour as an being paid without return of fair market value.  In short, she treated the payments as gifts. She ignored Ms. Clara and her husband’s needs.  She also failed to consider that paying a company would have cost at least twice as much to provide the same care.

The Caseworker was 98.6% wrong. 

A brief was written to explain to the Administrative Law Judge how the caseworker erroneously applied the law and ignored relevant facts.  Negotiations with DHS’s attorney reduced the amount in controversy fro $113,000 to $106,000.  A fair hearing was needed to resolve this amount.

The Hearing:  Facts and Witnesses

The Administrative Law Judge conducted the hearing by telephone.  About a week in advance, we delivered Ms. Clara’s exhibits.  The family did a great job keeping time logs that were used to calculate the amounts paid to the caregivers.  Exhibits were created to show how the checks related to the time logs.  The grandson was an excellent witness and was able to describe the care his grandparents needed.  The Administrative Law Judge asked pointed questions to each side.  It was clear that he wanted to know the facts and come to the right decision.

The $111,000 Victory*

portrait of a cheerful senior woman gesturing victory over white background

………………..Not actual client…………….

About 2 weeks after the hearing, and just in time for Ms. Clara’s 97th birthday, the Appeals Committee issued its opinion.  Of the original $113,000 used to calculate the penalty period, the committee found only $1,983 to be a gift.  So instead of 792 days of ineligibility, only a 13 day penalty period was imposed.  Read Decision Here.  It turns out that the caseworker was 98.6% wrong.  The ineligibility or penalty period was reduced from more than 2 years to less than 1/2 of a month.

What this case means:

Medicaid rules are complicated.  Attorneys who practice in this area must seek constant training to stay up-to-date on the changes.  DHS’s overworked caseworkers and employees approach their job with a certain viewpoint. This prospective can lead them to make the wrong decision resulting in potentially devastating results for applicants.  In Ms. Clara’s case they applied the wrong law and were wrong about the facts.  Frankly, as with all humans, they make mistakes.  A fair hearing is one way to rectify a bad decision.

Planning vs. Legal Challenges

Attorney involvement occurred late in this case.  There may have been ways that the family could have protected more assets with advance  or crisis planning.  Perhaps the caregiver compensation could have been structured or explained in a manner that was more palatable to DHS.   Providing more detailed information during the application may have prevented DHS from taking a position that they stubbornly held onto.  Instead, a year long battle occurred before DHS was required to approve the benefits.  Ms. Clara, the family and the nursing facility would have benefited from more certainty.

If you receive a bad decision, have it reviewed

It is very possible that a denial or imposition of a penalty period is wrong.  An attorney knowledgeable in Medicaid rules and regulations should be consulted.  If DHS’s decision is wrong there are avenues to challenge the decision.  Ms. Clara’s family and the nursing facility worked with our firm to present her case at the fair hearing and achieved a significant result.


*The appeals, results, awards, and settlements listed on this website are an example.   These results should not be used for comparison to your case or to any other case.  These examples and are not intended to predict the outcome of any potential case. Every case is different and must be evaluated based on its own merits. This website should be not be construed as a representation or guarantee that your case will produce a similar settlement or result.

** Clara is not the client’s last name.  The attached opinion was redacted or otherwise modified to preserve the client’s identity.

No client photographs were used in this article.

20Jan 2016

Don’t Leave Your IRA to Your Kid Outright

IRA Broken ChainIRAs are wonderful investments.  Many people want to leave unused funds to their children.  They simply name their kids as a beneficiary and think that everything is set.  Many fail to understand that merely naming the children as beneficiaries may result in the loss in the value of the assets.  This occurs in two ways:

  1. An IRA inherited from is not a protected retirement asset.  This means that it may become subject to claims made by creditors, divorcing spouses and the bankruptcy court; and
  2. Many kids cash out the IRA and lose growth and tax advantages

Inherited IRA not Protected

While your IRA is generally safe from creditors and bankruptcy.  It might not be safe in the hands of your kids depending upon how it is left to them. In 2014, U.S. Supreme Court in Clark v. Ramiker 134 S.Ct. 2242 (2014) ruled that inherited IRAs are not retirement accounts for purposes of protection from bankruptcy and general creditors.

Heidi Clark inherited an IRA from her mother and began receiving the Required Minimum Distributions. Heidi and her husband ran into financial troubles and filed bankruptcy. They attempted to exempt the IRA from the bankruptcy. The Supreme Court ruled that although retirement funds are protected in the hands of the original owners, inherited IRAs are not. Since the IRA was in Heidi’s name the $300,000 became available to her creditors.

The implications go well beyond bankruptcy.  An IRA could be subject to claims by your children’s’ creditors and divorcing spouses.

A Trust Could Have Protected the IRA

Heidi’s result would have been different her mother named an asset protection trust as the beneficiary. The trust would administer the asset for Heidi’s benefit but Heidi would not be able to cash out the IRA or demand payments. Therefore, it would not be subject to bankruptcy, creditors or divorce claims.

Destroying Value by Cashing Out IRA, Stretch It Instead

Imagine being left a large sum of money and all you have to do is sign a form and you get all of it–or so you thought.  When an inherited IRA is cashed stretching moneyout any previously untaxed money that you take from the account will be treated as ordinary income.  Many people make this mistake.  Instead of taking the cash in a lump sum the person inheriting the IRA could elect to take the required minimum distributions (RMDs).  While there may be some taxes, the funds remaining in the fund can continue to grow tax-free.  This is knows as a Stretch IRA.

For example:

  • 50 year old
  • IRA worth $200,000
  • Earns 6%
  • Takes RMDs
  • Would receive total distributions of over $675,000.

Run your own numbers with this tool:  Click Here

Can I Make My Kid Take the RMDs?

If you just name them as a beneficiary the answer is no.  However, a Trust can be set up to take advantage of the stretch rules.  A trustee is named who can make the decisions.  If needed the Trustee can chose, but cannot be forced, to cash out the IRA.

Can I Use Any Trust?

Typical Revocable Trust:  A typical revocable living trust calls for distributions at the death of the person(s) who establish the trust.  These trusts offer no protection from creditors for the children once they receive the distribution and they are not designed to enforce the Stretch provisions.

No there are certain restrictions on the trusts and the beneficiaries of the trust in order to qualify for stretch requirements. This is sometimes called the “See Though Trust” rule

  • The trust must be valid under state law
  • The trust must be irrevocable or become irrevocable upon the death of the IRA owner
  • All beneficiaries must be identifiable and eligible to receive RMDs (naming a church or charity may destroy the plan).
  • A copy of “trust documentation” must be sent to the IRA custodian by October 31st of the year following the year of the IRA owner’s death.

Don’t Forget to Change the Beneficiary, Correctly

The Beneficiary Designation is critical.  A Will or a Trust might say what is supposed to happen with the money, but if the beneficiaries are not changed the document is useless.  The wrong choice may trigger the 5 year liquidation rule.

  • “My estate” – 5 year liquidation rule
  • “My children” – Oldest child’s age used to determine RMD
  • “My trust” – Oldest possible beneficiary in trust used to determine RMD
  • “My family trust” – Oldest possible beneficiary in family trust
  • “The trustee under Article 8 of the DJZ Trust f/b/o my children” – oldest child’s age
  • “1/3 to each trustee of the separate shares under Article 8…” – Each separate age for each child



Register for a Workshop Call 405.340.6554 Register for Event


07Jan 2016


FOX 25, Oklahoma City’s local FOX affiliate, has a segment about goals for the new near.  They invited Fox 25 studiome to provide a few comments.  The staff there was great and it was a pleasure meeting Meg Alexander.  I wish we had more time.  I also wish that I could appear as natural as Meg.

I don’t believe that I have been on live television since the Foreman Scotty cowboy show in the 60s.  To watch the segment Click Here.


Appearance on FOX 25's Living Oklahoma Program, Click to watch.

Appearance on FOX 25’s Living Oklahoma Program, Click to watch.

11Dec 2015

Looking after your Parents’ Legal Preparedness

As a child of aging parents you probably have experienced increased duties and a variety of new roles. As you grew up, you were one who was protected and guided but now as your parent’s age, your role has become one of adviser and watchman. It is prudent to develop specific plans and gather documents that enable you to help your parents as the family navigates this new territory.

elderly parent Fotolia_45949763_XS


Long Term Care Planning:

An estimated 70% of our aging population will require some type of long term care. It is also predicted that 40% of our population will need a Nursing Home as they age. This may be include in-home care, living arrangements in an assisted living facility, memory care, or a skilled nursing center. A common belief is that Medicare covers assisted living or residential skilled nursing care. This is not the case, Medicare does not pay for the cost of long term care of our elders. This financial burden falls on long term care policies, family savings or government programs. It is estimated that 75% of families needing long term care will exhaust their personal savings in less than one year of a loved one entering a long term care facility. Long term care policies are often insufficient to meet the rising costs of these services leaving a deficit in order to meet the need of the care recipient. Therefore, it would be helpful to know how much of the person’s assets are at risk and what can be done to protect them. It is possible to preserve family protect assets even after a loved one has entered a nursing home. To discover what can be done in your situation get a report. Click Here.

Power of Attorney:

This document enables you to make decisions and take actions on behalf of your parents. It is important magnifying glass schedule evaluationthat the Power of Attorney be drafted in such a way so that you are able to use it when needed without unforeseen roadblocks. Several mistakes can occur when drafting this document: omitting language that keeps it effective if one or both of your parents become incompetent, requiring doctors to pronounce someone incompetent which may be difficult to document, and not providing sufficient powers to act on their behalf. The Power of Attorney should not only cover finances but also medical and housing decisions. If no POA is in place and a parent becomes incompetent it may become necessary to have a court appoint a guardian. This can delay action needed and be expensive. It is equally important to have any existing POAs reviewed by an elder law attorney.  Read More.

Advance Medical Directive “Living Will”:

Without a Living Will the medical professional attending to a patient is to presume that a person’s wishes are to receive life preserving medical care such as feeding & nutrition tubes, and CPR. Many people would not want this care if they suffer from terminal condition or if they are in a vegetative condition. A healthcare proxy can also be named to make those decisions should the patient be unable to communicate his/her wishes. Family disputes may arise as to the care the parent wanted if it is not written down. If no Living Will is in place, medical providers may require a court order to discontinue treatments.  Read More.

Medical Records Release:

The Health Insurance Portability and Accountability Act, or HIPAA is a Federal law imposes liability for the unauthorized sharing of medical information. Medical providers, or their legal departments, may be reluctant to provide this information even to family members without a HIPAA release signed by your parents allowing the information to be shared with you.


Trusts can be drafted to be living documents. This means that the Trustee can have power to manage assets in the Trust without court supervision. For example, a Trustee may need to liquidate stocks or mutual funds to provide for the needs of the parents. A properly drafted Trust will provide the Trustee with these powers. Like a Will, a Trust can also direct how assets are to be distributed after death. Unlike a Will, a Trust does not require court supervision. It also may be designed to protect the assets for the benefit of the heirs.  Learn more.


Even though a Trust is the cornerstone of most Estate Plans, a Will fills a vital role that no other document can accomplish. A Will can direct to whom unknown assets will be given. For example, it is not unheard of for a person to be entitled to a mineral interest without knowing that they it even existed. Proceeds from these unexpected assets are distributed according to the Will.  More Information.

Location of Documents:

Documents are of little use if they cannot be found or are inaccessible. Therefore, the documents listed above should be kept handy. Services like DocuBank can store these items electronically so that they are available online. In addition to the items listed above, be sure that you know where the following items are kept:
• Life Insurance Policies
• Health Insurance Policies and ID cards
• Military discharge papers
• Prepaid burial arrangements
• Tax Records
• Financial Records

Key Advisers:

It is also a good idea to have the contact information for your parents’ professional advisors. These may include their accountant, financial adviser, clergy, attorney, and insurance agent.

What you should do:

By reading this post you have actually started what is necessary.  The next step should be to gather the documents and have them reviewed by an elder law attorney who is well versed in estate planning, long term care, Medicaid and Veterans Benefits.

Call 405.340.6554 to schedule a time to meet and evaluate your parents situation.


28Oct 2015

Mom is aging and needs lots of care but has limited resources.

The family is looking for a way to cut her unneeded expenses while meeting her needs. One expense that families consider cutting is a life insurance policy. After all, most of us purchase life insurance to pay for living expenses of a family, children’s college or to pay-off the house following the death

Beautiful senior couple in the park

of the insured. Often a senior has grown children and a paid off mortgage and a family with sufficient resources. Therefore, the temptation is to stop paying the life insurance premiums. What many families fail to realize is that the life insurance can be converted into a life care plan specifically designed to pay the costs of care for their loved one.

How it works:

The policy owner transfers ownership to Life Care Funding who creates a fund to pay for the care of the individual. Money is held in a FDIC insured bank. Every month the nursing home, assisted living center, home healthcare provider or others providing medically necessary services or supplies are paid as directed.

• Provide federally tax-free fund to pay for covered expenses
• Eliminates the expense of life insurance premiums
• Prevents forfeiture of life insurance investment
• Can delay need to apply for government benefits
• Provides family with flexibility to adjust the care to meet their loved one’s needs

Part of Your Long Term Care Planning:
The importance of this as a tool cannot be overstated. Some use this strategy as part of their Medicaid or Veterans Wartime Pension planning.
The Internal Revenue Code Section 7702B(b) provides special exemptions for sales of life insurance policies insuring the lives of individuals who are terminally ill or chronically ill. In the case of a terminally ill insured, the proceeds from the sale of the policy will not be subject to U.S. federal income tax regardless of how the proceeds are used. And, if the insured is chronically ill, the proceeds will not be subject to U.S. federal income tax so long as they are used solely to pay for qualified long-term care services.

Please call 405.340.6554 to find out if this is right for you. Or Complete An Application

Have More Questions:  See Life Care Funding Questions & Answers Page

Click Here for Workshop Schedule

Please note that the actual tax treatment of the proceeds from the sale of a life insurance policy will depend on many factors, including but not limited to who owns the policy, the health of the insured, the use of proceeds, the size of the estate and the state in which the policy owner lives (for purposes of state taxation).  This material does not constitute tax, legal or accounting advice, and neither Winblad Law PLLC nor any of its attorneys, agents, employees, or representatives are in the business of offering such advice.  The information above cannot be used by any taxpayer for the purpose of avoiding any IRS penalty.  Anyone interested in selling a life insurance policy in order to fund Long Term Care Benefits should seek professional advice based on his or her particular circumstances from an independent tax advisor.

21Sep 2015


Revocable Trusts are familiar to anyone who has considered estate planning. Basically, the Settlor (person creating the Trust) retains complete control over the assets in the trust, can withdraw the principal for any reason, can change the beneficiaries, and can change the successor Trustees.

The problem with a Revocable Trust is that whatever you can reach, so can your creditors. Assets within a Revocable Trust may be also counted when applying for Medicaid or VA Benefits.

An Irrevocable Trust can be designed so that it provides the Settlor with almost all of the flexibility of a Revocable Trust. In other words, Irrevocable Trusts can be changed. The Settlor can change the beneficiaries and when (or if) the beneficiaries receive property.  The Settlor can also change the successor Trustees.

While a Revocable Trust permits you to maintain full control (as Trustee) and have access to all your assets (as beneficiary), an Irrevocable Trust, once created, may prohibit your right to control the trust (as Trustee) or have access to your assets, but you get to decide to what extent.


  • Son marries gold digger?  Change the Trust to limit his access after your death?
  • Daughter getting married, liquidate assets to pay for wedding.
  • Want to retire to the mountains?  Sell property and purchase new one.

Flexible arrowIt is a common misconception that irrevocable trusts, once created, cannot be changed. While that is true of many irrevocable trusts created to avoid taxes (tax reduction or avoidance trusts), it is not true of all irrevocable trusts. An irrevocable trust is a trust you create for the benefit of yourself or others and once created, you, as Settlor, must give up your right to something. So while you cannot liquidate the principal for a vacation, you can spend the same money on a child’s tuition.

Debtor/Creditor law provides that whatever you can get, your creditors can get. You can have known creditors (i.e., bank/credit card debt) or unknown potential creditors (unforeseen lawsuits, nursing home, and divorce). A typical income-only irrevocable trust permits you to receive the income on your assets, but you must give up your right to liquidate your principal. In some irrevocable trusts, you can retain the right to change who gets your assets during your life and after your death, and maintain 100% control of your assets until your mental disability or death (asset protection trusts).

22Jun 2015


    Your savings of a lifetime does not have to wiped away by long-term nursing care.  With proper planning you can avoid putting your assets in jeopardy.

Want a Personalized Analysis of Your Risks?

Click here to receive the one-page worksheet.  Return it to me and receive your report.

The facts…

Oklahoma participates in Medicaid through SoonerCare and the ADvantage Program.  To qualify for these programs the applicant is limited to the amount of income and “countable” assets that he or she can have.

  • Assets in a revocable living trust are not protected and must be used to pay for the costs of long-term care.
  •  If you are married, your home is exempt and cannot be taken when applying for Medicaid. If you are single or widowed, your home is exempt up to $552,000. If you transfer your home to your children, not only will it result in immediate ineligibility for Medicaid, but it could also:
    • Trigger a gift tax,
    • Result in the loss of any property tax exemption, and,
    • Result in your child’s spouse (the in-laws) inheriting your home.
  •  Giving your assets away means losing control. It’s not safe even if you “trust” who you give it to. If that person divorces, goes bankrupt or is sued, all of the money you transferred is at risk. There are asset protection trusts that permit you to keep 100% control of your assets without the risk of losing them if long-term care is needed.
  • You do not have to wait 60 months to qualify for Medicaid. Eligibility is calculated on a case-by-case basis. It is possible to have over $250,000 in cash and qualify immediately. Get professional advice and learn the facts.
  • It is never too late to protect your assets even if you are already in a nursing home. In fact, you can qualify for Medicaid sooner if you are already in a nursing home, than if you aren’t.
  • A nursing home or hospital that offers to file a Medicaid application for you has no obligation (and often can’t) advise you on how to protect your assets. Only a qualified Medicaid planning attorney will be looking out for your interests.
  • Applying for Medicaid prior to qualification could result in being disqualified for a longer period of time than you otherwise would have been (it’s not limited to 36 months).
  • Make sure the attorney you hire is experienced in Medicaid planning. Would you go to your regular doctor for a heart problem?
  • Consider long-term care insurance. An annual premium for a couple is usually less expensive than one month of nursing home care and with proper planning; it may also enable you to stay home if you become ill.  However, if this is unavailable due to health or age other planning should occur.

How can you best preserve your assets?  There is no cookie cutter approach.  Call and lets see what we can do for you.

Mediqual Worksheet



Call:  405.340.6554

15Jun 2016

Caregivers face many challenges. Planning and managing the care for their loved ones is a daunting task. Often legal issues prevent the implementation of the plans. This could involve not receiving information because of HIPAA. The inability to access bank accounts, manage property or deal with insurance companies can also present problems. That is why is important to make sure that your loved ones estate plan and life care planning documents are up to date. This class is help caregivers navigate the legal barriers to providing needed support.

26May 2016

When illness strikes, many people underestimate the costs of care. Did you know Medicare does not pay for extended long term care? Without proper planning, one’s life savings can quickly be drained. Learn about ways to protect assets and maximize the ability to qualify for government benefits such as Medicaid and Wartime Veterans Pension. Presented by: Richard Winblad,

23May 2016

Young adults, married couples and those headed to college need the Estate Planning basics.  For example, medical providers are restricted from discussing medical situations of adult children with their parents.  Powers of Attorney may needed even if you are married.  A will says where your property goes and who you designate as a guardian for your children. Living Wills & Trusts also discussed.  Presented by:  Richard Winblad,

19May 2016

Creating documents for control of your assets isn’t enough to assure they are handled properly. Estate Plans allow you to make sure you are in control of your assets while you are alive and well and also lays out how to keep them managed if you cannot. This program covers Will, Trusts, Powers of Attorney and Living Wills. Presented By: Richard Winblad,

19May 2016

Creating documents for control of your assets isn’t enough to assure they are handled properly. Estate Plans allow you to make sure you are in control of your assets while you are alive and well and also lays out how to keep them managed if you cannot. This program covers Will, Trusts, Powers of Attorney and Living Wills. Presented By: Richard Winblad,

16May 2016

Without planning, your IRA is subject to several risks including loss to bankruptcy, creditor and divorce.  Many children may cash out IRAs and lose the opportunity for cash deferred growth.

Hear how Heidi lost a $300,000 inherited IRA because it wasn’t protected.

You can protect against these consequencestretching moneys. Presented by Richard W

12May 2016

This workshop will show how it is possible to provide asset protection for you and those you love.  Asset protection can prevent the loss to creditors, divorce, bankruptcy, and other predators.  Learn how assets can be protected in the event that nursing home care becomes necessary. Presented by Richard Winblad,

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