SmartTranscript of House Human Services - 2025-05-01 - 9:05 AM

[Chair Theresa Wood]: Alright. Good morning, everyone. This morning, we are gonna get some background information from ledge council, around, some of the questions that we've had around, essentially long term care planning, and this is related to h one twenty. And I should let folks know that I have asked representative Noyes to meet with representative Iacoboni to sort of maybe restructure the bill a little bit more to look at as a report back to the committee as opposed to just establishing things. So to be looking at, you know, how this might be implemented in Vermont, what might the ramifications be, how it you know, options for potentially, how it would be funded, how people would contribute to it. And then this morning, we're gonna hear about, some of the the rules surrounding, long term care, and Medicaid because, you know, part of why this could be beneficial is to reduce the reliance on Vermont Medicaid into the future. So, by increasing people's ability to plan for their future and future care. So good morning, Eric. Happy to [Witness Eric Maguire]: have you here. Good morning. Thank you very much. [Chair Theresa Wood]: I think this is your first time this session here. [Witness Eric Maguire]: It is. [Chair Theresa Wood]: Yeah. So we'll just do a quick run around the room so you know who we all are. Teresa Wood from Waterbury and also through Global Appeals Floor in Huntington. [Vice Chair Golrang "Rey" Garofano]: Hi. I'm Ray. I'm Garifano. I represent Essex and Essex Junction. Hey. Julie McGaff from Goodport, and I also represent Middlebury, New York. [Member Zon Eastes]: I'm Zahn Eastis. I live in Guilford, and I also represent Vernon. [Member Todd Nielsen]: Good morning, Todd Neals, and I represent Brandon Firesdale. [Member Zon Eastes]: Doug Bishop representing Colchester's Chittenden twenty district. [Member Todd Nielsen]: Hi. Good morning. Eric McGuire representing Rutland City. Good morning. Dan Noyes represent Wolcott, Hyde Park, Johnson, and Belvidere. [Ranking Member Anne B. Donahue]: And Donahue, Northfield in Berlin. [Vice Chair Golrang "Rey" Garofano]: Gloria, of course, please. [Chair Theresa Wood]: And master wizard. Especially if today's Well, [Witness Eric Maguire]: good morning. Nice to see everybody and nice to be in as the chair said, first time this the session in this committee. So then, I spend most of my time in the judiciary committees, as you may or may not know. I'm one of part of our judiciary team. So sometimes I will get up here depending on whether we have some crossover of of issues. One session, it may be more often than another session, but this is my first time. So thank you. And the reason I'm here is because of one of these crossover issues actually, and I'm certainly not an expert in Medicare or long term care, generally speaking, but I do cover probate issues for the judiciary committee. That means wills, trust, estates, that kind of thing, that are in the probate division of the superior court. And there is some crossover, some important crossover between, a person's estate, which is the property they have when they die, and the ability of Medicaid to recover from a person's estate after they died any expenses that Medicaid paid for long term care on behalf of the person while the person was still alive. So sometimes that will happen. And in fact, under federal law, under federal Medicaid law, every state has to have what's called a Medicaid Estate Recovery Plan. It's referred to as a MERP, m e r p. Some people call it just m e r, but it's Medicaid Estate Recovery. And so it's even the name of it, if you think about the word estate, shows you why there's a crossover with judiciary issues. It's estate recovery. And and, the estate refers to, as I was mentioning, the property that a person has, upon their moment of death when they pass away. So there's this overlap between the two things. And I know a little bit about that, which is I think why I'm here with this committee to explain some of that, which because that certainly would be very relevant to the committee thinking about what it wants to do for long term care generally. What is the state of the law now? So, with that said, before, as the chair mentioned also, in addition to having this Medicaid estate recovery plan, which Vermont has, there are also rules in place. The Vermont health access Department of Vermont health access has this Medicaid plan and rules that are specifically about how this recovery from a person to state works. But and I sent them to Laurie. So you have them on your website. You can look at them when you wanna take a look at the text. But before we do look at the the language, which I think is important to do for a minute, just a a couple of minutes of background to kinda ground people on, well, why you know, how did that before looking at the language, I think it might be helpful to understand what it's this underlying thing that we're talking about with respect to states and the probate courts and all that. So, generally speaking, as I said, the the Medicaid and the state Medicaid folks in in Vermont, it's department VA Department of Vermont Health Access as well as they have actually few attorneys at the attorney general's office who work with them to participate in this process of asset recovery. And they they, have plenty of other things to do. So I'm not saying that's the only thing they do, but there are some folks who work on that issue. And that's what makes it important to think about, well, what can they recover? What assets can are available to, the folks at the AG's office and DBHA when they're looking at the estate of someone who passed away? So when someone dies, generally speaking, the probate division of the superior court used to be called the probate court before the, Judith Unification took place. Now it's called the probate division. They open an estate for a person. And the estate, generally includes all the property that the person, owned at their time [Member Todd Nielsen]: of death. And [Witness Eric Maguire]: so the probate division has jurisdiction to supervise the, distribution of this property. So usually, perhaps if the person had a will, they would have named an executor who will help distribute their property. If they didn't have a will, which means, they died intestate is the word. It's interesting to think. It's in the state. If you die intestate, that means you didn't have a person named or you didn't have a will. Sorry. And I always, you know, as an aside, suggest you get a will. Because otherwise, you're leaving it up to the state to decide who it is you're gonna distribute your assets, and who's gonna get them? You know, you can decide yourself or state law, they've called the intestacy statutes. They specifically lay out if a person doesn't without a will, here's how their property gets distributed. If you wanna have your own say in how that happens, it's good to have a will. Go ahead. Back up for my my plug for the legal community. [Member Zon Eastes]: Sorry. Sorry to jump in so so quickly. Please, sir. But people can arrange their assets such that there's no need to go to probate court. So does I guess, maybe you'll get to this, but I'm curious how that played into what the state program can and cannot do if someone has left beneficiaries or Yes. Yes. Themselves jointly, that sort of thing. [Witness Eric Maguire]: Yes. They're very apropos questions. Exactly something I'm gonna move right into because it's also very important. Because as I was saying, the probate estate is all the property that a person owns upon their death. Again, so what's implicitly not included? What they don't know. But you might have a property interest in something. But if you're not the owner of it, there are certain, legal mechanisms that a person can use to avoid probate. So think about, well, first of all, why would a person even wanna do it? Well, probate can be both time consuming and expensive. So you might have to hire an attorney. The executor or the administrator is entitled to fees. The particularly with respect to not always the case, but it's not unusual for a person who passes away to have their primary residence as really their main asset. That's not unusual that their primary asset is their home. And if you think about, well, if let's say that person has more than one beneficiary, they got a couple of kids or a couple of brothers and sisters or who have family members, whoever they may be to, if they, if they, that home has to go through the probate court process, that can be a complicated and time consuming endeavor to probate court. The executor or the administrator as the case may be would have to value that home, sell it, divvy up the profits, or the sorry. The whatever might be left over. If there was a mortgage on the home, whatever excess value there might be among the whoever it is that would be the beneficiary of it, time consuming and expensive process. So, some people as an estate planning tool, this gets into the probate estate idea. Because as I say, all the property that's in the estate, where the person dies, goes into the probate court. They have jurisdiction over it. The the they it is valued. So first thing you have to determine what's the value of all the property. Then you have to pay all the debts. Person might have had debts when they passed away, or they might have funeral expenses and whatever debts might might be, owed or paid first. And then whatever's left over gets distributed among the beneficiaries. And this is all on a, as I say, can be a lengthy and detailed process that has to, be gone through. So particularly with respect to a home, say someone of moderate means, and their home is their only asset. They're only, they might reasonably think. And again, this is our estate planning approach. This is what we talked about in in judiciary with very with a lot of estate planning attorneys when we're crafting the probate code. People might reasonably think, hey, if I have to go through all that with my one asset, my home, by the time all that's finished, there's not gonna be anything left for the the children or siblings or whoever it is that they wanted to get some of their they'll be able to pass on, some of their home to. So, there are estate planning tools, and this is segueing into exactly what you're talking about. There are estate planning tools in order to keep, for example, the home in particular, out of the probate process. And one of these is called, which you may recall if you've been here a couple years, and I represent Don here because I think we were chatting about it yesterday a little bit, what's known as a life estate. And then and now we have almost known as an enhanced life estate as of a couple years ago. Life estate is a is a means of owning property jointly. More than one person own an interest in the property. So the way it works is, you say, for example, are a person who's thinking about planning your estate and you have your home and you're thinking, I'd like to be able to transfer it to whatever, a couple of children, whoever it may be. But I don't wanna go through that long expensive probate process so I can change the ownership status of the home. And this, by the way, life of state only applies to real estate. Doesn't apply to any other, you know, whatever you may have, furniture, your car, whatever. It's real estate only. And the way it works is that the, the owner of the home retained while they are alive, retains the right to possess them, to live in it, and to in fact, under the new enhanced life estate law, they can also take out a mortgage if they want. They have more property rights than they used to have prior to the passage of that. But the main point is is there they they have what's known as a life estate. So for the life of that person, they are able to live in the home. Upon the person's death now the so whoever their beneficiaries are, let's just say for the sake of the example that it's two children. Let's say that person names these two children as the beneficiary. So upon the person's as it happens, my mother has a life estate and my brother and I are the two beneficiaries. So that's kinda what I know about that particular example. So when the property owner dies, upon operation of law, upon the immediately upon their death, the property transfers to the beneficiaries, to the children, to the siblings, to whoever the person named as their beneficiaries immediately. So think about it. That means on the moment of their death, who owns the property? [Ranking Member Anne B. Donahue]: Yes. [Witness Eric Maguire]: The kids. So does the property go to the probate estate? [Ranking Member Anne B. Donahue]: No. No. Is not. [Witness Eric Maguire]: Exactly. There's no property owned by the person who died at that point. No. [Chair Theresa Wood]: He says just Is this [Member Todd Nielsen]: the same as a trust? [Witness Eric Maguire]: No. Okay. Stay right. Okay. Go in the next one. But interestingly, people do often mix them up because at least in this context, it's it's a tool that's used for can be used for a similar thing. Trust has a lot more different it can be used for many different things other than this. The legacy really has this one use, really. Gotcha. So, yeah, so that's the way it works. And and then the the beneficiaries, whoever they may be, own the as I say, it's real estate only. So I'm gonna use the home as example, own the home free and clear. Doesn't have to go through probate. Doesn't have to, be looked at by the probate judge or distributed by the executor, or it's all up to the whoever the beneficiaries are to decide what to do. Now we'll get to this too, but remember remember this can't forget in the background of this explanation is to think, remember, Medicaid when it's trying to, remember that the idea is Medicaid is that if a person during their life, had long term care that was paid for by Medicaid, And then after they pass away, there's money in their estate for that can be used to pay back Medicaid for the long term care expenses that ran up while the person was alive. That's what that MERC is for. Medicaid estate recovery plan. That's the whole idea of that or of their, purpose there is to look at what's in the estate and, try and recover. And in fact, one [Member Zon Eastes]: of the from what what I looked at, [Witness Eric Maguire]: and as I realized, there's so much that most often, that's the primary residence. Most often, what they go after is the person's home because that is, for many people, the main asset that they had. So if they use a life estate, can Medicaid recover that? No. Never in the in the estate. So that's two, two purposes that what person might use a life estate for. Number one, you avoid probate, avoid all that time and expense. Number two, it's not recoverable by Medicaid. [Chair Theresa Wood]: It's not in the estate. Yeah. [Member Zon Eastes]: Not in [Witness Eric Maguire]: the estate. [Ranking Member Anne B. Donahue]: So when it's your primary residence, that's something that while you're in long term care, is not considered an asset that would be counted against you being eligible for Medicaid. Right? Because it's protected. It's the only thing that's anything l any other asset is counted in terms of eligibility for Medicaid for long term care to primary residence. So I suspect that I mean, that's why a lot of these where Merck would apply is going after primary residence because they were able to keep it while they were on Medicaid. But as they can't pay any longer once they've died, obviously. [Witness Eric Maguire]: Right. And last time, we'll look at the rules too. I think unless there's some rules about when when Merck can go after it. Like, for example, if the spouse is still getting in it, they can't do it yet and and that sort of thing. But generally speaking, yes. You have to let's say and I think it's it's a I don't know for sure, but I guess is it's this number has been around for a long time, but two thousand dollars is the cutoff in assets that for eligibility for Medicaid. So exact so in order for you to qualify for Medicaid long term care, you cannot have any more than two thousand dollars worth of assets. I suspect that number has been around for a while just because it seems so low, these days, but I don't know for sure the exact date. I do know, interestingly, just I don't know, that the that the fact that states have to have this MERP, this state, recovery plan, that was only ninety nineteen ninety two. Before that, it was discretionary. States didn't happen. But that's a I think it was ninety two is when that got up. But anyway, the point that Donahue was making is that, is that when the when Medicaid is counting your assets to determine whether or not you're below that two thousand dollars threshold, they don't count your primary residence at that moment in time. So I think there are, again, some rules about as long as either you were living in it or your spouse or family member, there's some associated rules with it. But generally speaking, they don't count the primary residence at that point in time. If they do count it after you passed away and they're looking at, well, what time are you recovering at? So then, it becomes, an asset that, Medicaid can look to recover from for purposes of, recovering the expenses that that they paid on that person's behalf for long term care while they were alive. [Ranking Member Anne B. Donahue]: Because in theory, there would be nothing else that would be recoupable because that would have all been taken before you become eligible for Medicaid. So the only thing that you would still have as a as a significant asset potentially after death would be your primary residence. [Witness Eric Maguire]: Yeah. Or spend down. That's another thing that that the You have to spend. Right. Spend out. So let's say you had just pick a number that's above two thousand. Ten thousand dollars. Sorry. Or you had that amount in property that would count. And you're not be able you're not able to get Medicaid long term care because you have more than two thousand. Right? They have then you have to do what's known as a spend down. You have to spend that money somehow to come below the two thousand dollar threshold so that you qualify for long term care. So you're right. It's [Ranking Member Anne B. Donahue]: So there's nothing left? [Witness Eric Maguire]: Nothing left other than your other than your house. [Member Zon Eastes]: Are there personal property I'm sorry. Are are there personal property exemptions? I've got my grandmother's brooch that Mhmm. Has some value, you know, things things like that that are are not an IRA. They're not a four zero one k. They're not my savings account, CDs, etcetera. I'm you know, there's it goes [Witness Eric Maguire]: It's a good collection. But Yeah. Yeah. I'm not familiar enough to know, though, that granular detail. But Yeah. [Chair Theresa Wood]: The long term care Medicaid application is very detailed. Yeah. And And it's worth five thousand dollars? It it'll be part [Member Zon Eastes]: of that. There's no [Chair Theresa Wood]: They ask about vehicles. They ask about there are some exclusions. So if you have a surviving spouse, even if you're even if you're, don't have haven't put your your home in a trust or haven't done a life estate deed, they can't claim that. They can't they can't sell it and take the proceeds if there's a surviving spouse. So there are some exclusions to that. But, you know, if if you are sort of a a person who hasn't sought legal advice about how to protect some of your assets, which is kind of what Anne is talking about, then you essentially spend all the way down to that two thousand dollar level, and you essentially become impoverished. And so you would qualify. And and at that point in time, you you would qualify not only for long term care Medicaid, but there's many different sort of, like, doors to Medicaid. So So at that point in time, you would probably qualify as a person of low income as well. So but and it makes a difference on which door you walk through. The med it makes difference which Medicaid door you walk through and to use of what you have access to in terms of insurance. [Witness Eric Maguire]: One point I forgot to make, which is interesting, is that in Vermont, it's true that the crucial point in time to measure or not whether your property in these, is recoverable by Medicaid for purposes of their estate recovery plan is whether or not it was in the probate estate. That's in Vermont. That's not the case in every state. Vermont is what's known as an estate only recovery state. So it has to have been in the estate. There are other states that use an expanded definition of a state, and they allow Medicaid to go after some property that wasn't necessarily in the estate. And that's that they're known as expanded estate states and said it is actually go estate states. So I chose, I found all to say five times fast. But so there's twenty eight states that are probate only like Vermont, twenty two that have this expanded. So it's a matter of rule, you know, as to which one you state decides to be. [Ranking Member Anne B. Donahue]: So just to clarify on the enhanced life estate, my understanding when we put that in statute, which is only within the last ten years, you can actually still sell your property when you have that much control over it as a life estate. And so, generally, under the normal rules, that would mean it's an asset to you still if you can sell it. But under Vermont law, in fact, it's still protected as if it weren't yours, and so it's still protected as an asset even though you could sell it. [Witness Eric Maguire]: Yeah. I think that's correct. [Ranking Member Anne B. Donahue]: To the general rule that, you know, if you still have control over it, it's not really a life estate normally. But as an enhanced one, it kind of becomes another [Witness Eric Maguire]: right? Another. Yeah. I think you're the well I I I believe the step up. I'm sorry. Go ahead. Yeah. That's why [Ranking Member Anne B. Donahue]: I wanted to [Witness Eric Maguire]: Yeah. [Ranking Member Anne B. Donahue]: Bring that up. [Witness Eric Maguire]: But no. That's correct. That that you have more authority to to dispose of the property now in a right state than you used to have before the passage of that log. I think it was only three or four years ago, something like that. So that the question of trust came up as well. So that's another tool that can be used. Because again, think about it's gonna kinda goes to the probate issue again. Remember, your your your probate estate is composed of all the property that you owned when you died. Right? So a trust, when you put property into a trust, speaking generally for a second about trust, you you have three parties in a trust. You have what's known as the settler. That's the person who puts the property into the trust. You have the person known as the trustee. The trustee manages the property in the trust and makes distributions if there are any, and you have the beneficiary or beneficiary. And that's the person who receives the benefits that are distributed by the trustee. Technically, under trust law, the legal owner of the property is the trustee, not the seller, not the person, like, for example, using the house example that you had. Someone has their house and they're like, well, I wanna have, I'd like my for my house not to be subject to the probate process because I don't want my kids to have to pay for all this expense and time. So some people will use a trust, some people will use a life estate. Say you decide to use a trust. The, we already saw with a life estate, the reason that doesn't go through the probate process is because when the person dies, it immediately transfers to the to the key whoever the beneficiaries were. Right? Never goes through probate. The trust, slightly different. The reason that doesn't go through the probate process isn't because it transfers. It's because, technically, the legal owner is the trustee, not the person the homeowner who said, hey. Let's dispose of my property through this trust. So never goes into the probate process. It's never, therefore, subject to the probate court trying to divvy it up. It's never subject to Medicaid going after the the value of the house for purposes of paying back expenses that the person may have accrued when they were alive. [Chair Theresa Wood]: So yeah. Go ahead. Go ahead, Todd first, Tim, and ask everything. [Witness Eric Maguire]: I had a question. What if you have a trust already and rules change? Will your trust change? Is that written in stone? Generally, it's, it's governed by the rules that were in existence at the time you created the trust. So, rules change would generally apply to trust going forward from with the date of whenever the rules were changed. Now we can make laws apply retroactively in Vermont, and it it is sometimes done. It's a very specific way you have to do it. So let's say, hypothetically, the rules change on the basis of a statute that specifically said it was applying retroactively. It's theoretically possible that it could look back, but generally, it doesn't. Generally, it's what was the law at the time of the creation of the trust. Thank you. Yeah. [Chair Theresa Wood]: I had to [Member Zon Eastes]: is it accurate that with respect to trust in Medicaid, there's a look back period? Yes. So if I get a terminal diagnosis and I know that in the next year, I'm gonna be going into gonna need care. I can't suddenly move everything into a trust as two or five or however many year look back period. Correct. It's five years. [Witness Eric Maguire]: Five years? Sixty months. Used to be two. Yeah. Oh, it used to be two? I didn't know that. Right? [Chair Theresa Wood]: Yeah. It used to be two. It changed to five quite a while ago. [Member Zon Eastes]: Right. Yeah. [Witness Eric Maguire]: Yes. So it's exactly right. And they will they will look into that. [Member Zon Eastes]: Yeah. [Witness Eric Maguire]: That's part of their part of their, jurisdiction as well to see if, you know, you have to if something was transferred, you can't sort of like say, I'm gonna give away all the money in my savings account six months before I go into long term care. Yeah. That's exactly what they're gonna but interestingly, if if, for example, there there's there's two types of trust, generally speaking, revocable and irrevocable. Revocable trust and the difference is just what it sounds like. If it's revocable, you have access to the property and the trust. Yes. The trustee is still technically the legal owner, but you have access to it. You can say, well, I want this distribution. I want that distribution. In fact, I wanna end the trust, or I wanna move this this property in or this property out. Revocable trust, you can't do that. Once it's in there, the property's in there. It's up to the trustee. You do have this you do have authority. It's always interesting to ask for a new trustee. So if you're really unhappy with the way the trustees are doing the property, you can try that route, but you can't do anything with the property. It's out of your control. It's irrevocable. So, they're they're because it's irrevocable, Medicaid looks at that as, not covered by the five year look back because you can't you can't access it. You really can't do anything with it. So they have what's known as many states have a, a Medicaid an MAPT, a Medicaid asset protection trust. It's a specific irrevocable trust that people use to put something into it to, not have it be, recoverable by Medicaid. But it has to be very specifically done. It's not something that that should be done casually. It has to be comply with some very strict legal requirements, and you can't access it. It has [Member Zon Eastes]: to be irrevocable. With no look back. Correct. [Witness Eric Maguire]: I think that's the idea. [Vice Chair Golrang "Rey" Garofano]: Go ahead, Brenda. Well, a lot of lawyers offer free workshops on trust, so, of course, I went to [Witness Eric Maguire]: them. Right. [Vice Chair Golrang "Rey" Garofano]: Knowing me. Trust is the way to go, but let's not go there. What my mother did and a lot of people did well, I learned young because my dad was really into this stuff. Mhmm. Put your your like, a child's name on your accounts as you like, I was on my mother's account. [Witness Eric Maguire]: Yep. [Vice Chair Golrang "Rey" Garofano]: And then when my brother wasn't paying his transport, he was on an account, and they tried to go after my mother. But, of course, I wrote letters and stuff on my mother's behalf. So if you put somebody's name on your account when you open them, it's automatically the other person's account. So if people wanna really think ahead, I'm, like, I'm already gonna put people my kids on my account. [Witness Eric Maguire]: Yes. That's another way to [Vice Chair Golrang "Rey" Garofano]: put it. Think ahead because the other person is automatically the account holder. Right. And a lot of my accounts, I put death benefit on, but you have to know that from working at a bank. But [Witness Eric Maguire]: Right. But that's true. [Vice Chair Golrang "Rey" Garofano]: Know that. Yeah. [Witness Eric Maguire]: Yeah. But I think you're right that more people are learning And then Learning. You know, Put your children in [Vice Chair Golrang "Rey" Garofano]: their accounts as you open them. Right. [Witness Eric Maguire]: So that way, when you die, you don't have to go through the process of trying to have the proper the money in that account transferred to the child because it's already yours. [Chair Theresa Wood]: So it I mean, it it did it's it's, interesting discussion because, you know, this country is obviously different than some other countries, and even state to state, you know, have some different rules. But I think that there's the, sort of, this, I don't know, social question, if you if you will, about sort of the the transfer of generational property, you know, to your children or your siblings or, you know, wherever it goes. And then, then the question of, well then, should the public tax dollar be picking up your long term care because you have, you know, you've done the things that we've just been talking about? You know? And I and, you know, there's lots of people who can argue in in both directions. And in in other countries, they have, you know, guaranteed long term care, so it's not it's not an issue. In in our country, it becomes a, you know, a financial issue of the government. In other countries, like, you know, they pay for family leave and childcare and long term care for older individuals if needed. So I I think, like, you know, when when Anne was talking about it, about it and when we're talking about this long term care trust fund, trying to, encourage people to plan ahead so that we reduce the reliance on Medicaid, I think, is kind of like one of the goals. But it's also about being able to, you know, take some control over what happens, with your assets. And so, you know, I I don't know. It's just a it's an interesting dialogue that, you know, Frank, I can argue both sides of, which is you know, it's it speaks more to the culture in this country, I think, than, than individual values per se. [Vice Chair Golrang "Rey" Garofano]: Yeah. Just gonna comment. And thank you, madam chair, for raising that. I think the system kind of when we're talking kind of high level and system wide, it that also perpetuates inequities because people who are in the know, such as representative study, can take advantage of a lot of those things, whereas people who are in poverty or immigrants, you know, people who are less advantaged don't have opportunities to learn about these things. [Chair Theresa Wood]: But it's fair enough. [Member Zon Eastes]: And then [Witness Eric Maguire]: they have [Chair Theresa Wood]: less did it too. I mean, they they transferred their life as you know, they did a life estate deed, so their property didn't I mean, luckily, they neither one of them had to go into long term care, but, you know, they transferred their property to their four kids and, you know, there wasn't any probate. There wasn't any estate. And Which puts the burden on Yeah. I mean, there is there is disadvantages for people who don't as you said, Brenda, people who don't know how to access those. [Vice Chair Golrang "Rey" Garofano]: No. She said that. They do have access. All these workshops are very advertised, the free workshops, banks offer them. Just because you're poverty or an immigrant doesn't mean you're not a smart person. I stick up for everybody. They can read the paper. They can see the posts. These workshops are all free and offered to anybody no matter their background, anything. Yeah. [Chair Theresa Wood]: I I think I was referring to the comment you said that not all people know about putting other people's names on your bank accounts and things like that. I only knew that from working at the bank. Well, that's my I I guess it's the [Vice Chair Golrang "Rey" Garofano]: one That's the point. There are people with the workshops and Yeah. There's there's resources. It's educational workshops, and these are some of the things that should be out there from all these programs that help the immigrants, help the poverty. They should be helped. That's what they're getting paid for, and it's not happening, unfortunately. [Member Zon Eastes]: But So there's the the inequity that they're [Vice Chair Golrang "Rey" Garofano]: There's the inequity of all the taxpayer dollars being spent on all these programs, and they're not working with the people to give them these advantages. Yeah. [Chair Theresa Wood]: So when it comes to thinking about a long term care trust fund that people would contribute to in some way, and the sort of intersection with, you know, trust law and estate planning law. What do you do you have any advice for things that we would need to think about? [Witness Eric Maguire]: I suppose the the without maybe it hasn't reached the stage yet, but I suppose it's still in the the brainstorming stage, [Chair Theresa Wood]: I guess. [Witness Eric Maguire]: Right? Then you would wanna the the the any long term care trust fund, you would want to think about, how does it any assets or contributions that a person makes to it, how does that impact their probated state, for example, or is our our contribute you would have to say, I would think, in the in the enabling language. Let's say you've got to the point where you were creating such a program. You would have to say something specific about whether or not funds that a person had contributed to that were either considered as part of their probate estate when they died or subject to recovery by by Medicaid. Right. And, because if you don't say something, then who knows exactly Right. How it would be treated. Right. And I'm not even a hundred percent sure. I think that is a matter of state law, but that would be an interesting question for the folks at Medicaid and then and over at, Vermont Health Access would be because, you know, ordinarily, they I know they, by rule, develop their process for this estate recovery program. So is that something they would do by rule in the first instance, through the federal Medicaid law, or is that something that Vermont could do by saying, hey. We're gonna create this long term care fund, and we're gonna set out these provisions. [Chair Theresa Wood]: That's an interesting concept about whether they could do that by rule. [Witness Eric Maguire]: Yeah. I don't know. Possibly. [Member Zon Eastes]: Would it be any different than contributions one makes to Social Security, which is not I mean, there can be a beneficiary special beneficiary. But if I'm, you know, twenty seven and I die and I've contributed to and I'm single and I've contributed Social Security for ten years before I die, that's not part of [Witness Eric Maguire]: the state. Right. Yeah. So we treated that same way. [Member Zon Eastes]: Yeah. So I would I guess I envision a long term trust long term care trust fund or fund that envisioned by this legislation, this bill, as being more akin to a Social Security and not necessarily the asset [Chair Theresa Wood]: of the individual. Yeah. I mean, that's how the bill is structured. Yeah. Wow. And but I think there's, you know, there's probably multiple ways to envision it depending upon what the appetite is or whether it's based upon individual's ability to contribute or it's based upon a uniform contribution requirement from Sure. Tax. Yeah. Anybody. Yeah. That's my other way of saying that. Uniform. The [Member Zon Eastes]: t [Witness Eric Maguire]: word. You see the person. [Chair Theresa Wood]: Alright. And Eric provided the documents that the in both the state plan, amendment, which I that that was actually pretty helpful. It's a pretty, easy not easy read. It's got a little complicated thing, but just a bifurator. And then what the rules are that EVA uses to implement that state plan. So, those would be things to familiarize yourself with just as general interest, but, if we decide to do something with this bill, at a later date. So, I mean [Witness Eric Maguire]: just to a couple of pieces of language in that plan just because it's interesting to puts a little more detail on how this process works. So in the state plan, just the for example, the Medicaid state plan that's online, if you looked at the the, very last page, which is so the [Chair Theresa Wood]: State plan, not the rules? [Witness Eric Maguire]: Correct. Okay. State plan. And State cuts. Yep. The very last page. And you'll see a, b, c, d and a, b, c, and d there in the last page. So look at a and b. It describes this process. First sense, all applicants for long term care Medicaid are advised in writing about the department's state recovery policy at the time of the application. So anybody applying immediately is told, hey. You just so you know, your assets could be recovered by Medicaid later on, and, they might be subject to this state recovery plan that Medicaid has, and it's on a specific federal form there that has to be or sorry. State form that has to be there. [Chair Theresa Wood]: Oh, and then the probate court Yes. [Witness Eric Maguire]: That's what I was gonna [Chair Theresa Wood]: say next. Everything to the department. [Witness Eric Maguire]: Right. Subdivision b there. Probate courts report all estate openings to the department. So, again, that and then what happens then, That's when we would move over for well, it says right there as well. Claim is then filed against the estate of any deceased individual who was a Medicaid recipient meeting the criteria for a state recovery. So a claim is filed. Right? Then notice is given to the administrator and the probate court and includes a copy of the department's regulations on a state recovery. So speaking of that, I'm just gonna go for a second to the, DIVA rules because they are a little more specific. That's the other document. And that is in rule it's on page two, seventy one zero eight point three. Pause the moment in case anyone wants to look at it. [Vice Chair Golrang "Rey" Garofano]: Yeah. Hundred percent. [Witness Eric Maguire]: It's on the page two. Yeah. The other document. [Vice Chair Golrang "Rey" Garofano]: Get found this one. K. Got it. [Witness Eric Maguire]: Alright. So go down to page two. Estate recoveries underlined seventy one zero eight point three. [Member Zon Eastes]: K. [Witness Eric Maguire]: Department shall not made. Department shall seek adjustment or recovery from the estates of individuals who died on or after January first ninety fourth. So they shall receive recovery from the estates. There's the language. Could keep keep them up in that phrase. Provided that the individuals are fifty five years of age or older when they receive long term care services paid for by the Medicaid program for it could be any one of these things, nursing facility services, home and community based waiver services, hospital and prescription drug services. So a person, has those services paid for by Medicaid while they were alive. After they die, department shall seek recovery from their state. Right? And then go on to the next paragraph. The department will file a claim with the probate court as a creditor of the estate to recover its expenditures for long term care services. So there you go. That's what they do. Remember from the other rule, they get noticed from the probate division two that this estate even exists, but they only do it as some sort of limitations on when they do it. Only after the death of the individual surviving spouse, if any, and when the individual has no surviving surviving child who is under twenty one, blind, permanently, and totally disabled. So there are some, conditions there, exemptions, but that's generally how the process works. Key point there, though, shall seek recovery from the estates. Right? So if you, turn to page for the second to last page [Vice Chair Golrang "Rey" Garofano]: On that? [Witness Eric Maguire]: Same yep. In the same same document. [Vice Chair Golrang "Rey" Garofano]: K. So [Witness Eric Maguire]: just go to seventy at the very bottom of a page, you'll see seventy one zero eight point three three, adjusting claims against homesteads. Everybody see that? Yes. Just look at the percent. And the state includes all real and personal property and other assets listed on an inventory filed in the probate court. That goes back to my first point. Vermont is an estate only state. So if you had some property that wasn't listed, for example, it was in a trust. You know, you still have a property interest in a trust, but you don't have to list that because that was not owned by you. It technically owned by the trustee. Or you might have an interest in property jointly with some other person that that doesn't qualify. It's not on your inventory filed in the probate court, then it's not subject to recovery by Medicaid and that's subject to this process that we were just looking at. Same thing is actually in the in the, I don't think can I write down the document? Put it in that state plan on the first page. The definition of estate is there too. An estate shall include all real and personal property and other assets which are included in the estate when it is filed and approached. That answers Doug's first question about if they have, personal property, like coins and things like that. You know? Yeah. All real and personal property. Yeah. [Member Zon Eastes]: So Brenda [Chair Theresa Wood]: and then Dan. [Vice Chair Golrang "Rey" Garofano]: And then get back to rep rep here if I'm a people of poverty or immigrants, I worked at DCF, they get all the benefits. They get an interpreter that they do not understand, or they bring in their children that but they are offered an interpreter, and then maybe somebody of poverty that might not have known what they're doing. They have the advantage of saying I don't understand and they can get help. So they are offered these advantages because I work then, so I would care. [Member Todd Nielsen]: Dan? So in that, it talks about assets listed on inventory. Right? Who who creates the inventory? [Witness Eric Maguire]: That's the usually, the executor of the estate and the administrator of the or the administrator of the estate, and then it's overseen by the probate division, the probate court. [Chair Theresa Wood]: It's a pain in the butt. [Witness Eric Maguire]: It is. It can be charge. Yeah. So if you're an executor, if anyone ever asks you, hey. When I pass away, will you be the executor of my estate? It seems easy enough. [Member Zon Eastes]: Yeah. Get it out of pocket. [Member Todd Nielsen]: So in that situation, they go into the person's home and they go through all our stuff and make a a list of everything that has any real value. [Witness Eric Maguire]: Yes. I I I should ideally, it's on my butt about but in some instances, just I'm happy to be an executive of a couple people, so I know this. Best case scenario, you've talked with the person before while they're still alive and they're saying, hey. Will you be the executor of my estate? And you're like, okay. What kind of property have you got? Hopefully, you'll go through and they will say to you, this is exactly everything I have. Here's where it is, and here's how I want you to distribute it. And it's gonna be in my will. Got these three kids. This person gets this. This purse and this is where that is. That person gets that. That is where that is. This person gets that, and here's where you find that. Doesn't always work out so easily, but that's the best case scenario. So that, yes, the executor does have to do that, compile that inventory. But if if there's if there, has been the person whose property it was has thought forward enough, then you have [Member Todd Nielsen]: all that written down before you. And if the person has created a trust, right, would they or can they move stuff into a trust, like cars or jewelry or art? Yeah. Sure. That could all be listed as part of the trust. Mhmm. Yes. So, therefore, it wouldn't be subject subjected to this. It wouldn't be part [Witness Eric Maguire]: of the probate estate. It wouldn't be part [Member Todd Nielsen]: of the probate estate. It wouldn't be part of the trust. Right? [Chair Theresa Wood]: And so, I mean, you can see you can see kind of what the loophole is. So, you know, our the estate recovery rules specifically reference the estate. The estate is defined as what goes through probate, not as, your ownership or, you know, partial interest or whatever in a in a trust. So, yes, people move their assets to trust Intellect. So they are not counted in an estate, [Vice Chair Golrang "Rey" Garofano]: and, yeah. They won't be recoverable. Right. Subject to [Member Zon Eastes]: a five year look back period unless it's just unique Right. Whatever it was long term. [Witness Eric Maguire]: You're right. So you can't do that generally for regular the typical trust unless it was more than five years ago because otherwise, they're gonna look back and say, hey. You just put that into a trust because you didn't want Medicaid to [Chair Theresa Wood]: get Right. So it is the plan it is the plan ahead version. Yeah. I mean, you do there yeah. [Member Todd Nielsen]: So if you have created a trust that's over five years old Correct. And let's say eight years later, you [Chair Theresa Wood]: Put something in. [Member Todd Nielsen]: Win the lottery. Right? You move money or real real items into that trust. Mhmm. Do they automatically become part of that trust and not and not subject to the look back? [Witness Eric Maguire]: No. That was subject to the look back. [Member Todd Nielsen]: So it's only what was in that trust within five years. Correct? That's to have been in there for that. [Witness Eric Maguire]: You make any transfer. Any transfer during that five year period is recoverable. K. And also one other oh, sorry to interrupt. I was just gonna add that that there's an interesting question that that I haven't yet been able to get an answer to. Hopefully, I will, which is what as I was saying, there's two types of trusts, revocable and irrevocable. If it's revocable, that means any property that you put in the trust, you can essentially move it around however you want, and you can access it. Generally speaking, in most states, if it's revocable like that, if you still have access to all the property, then it doesn't count as a Medicaid exclusion. Medicaid can still be covered because it's not like you don't you know, it it you still have access to it just like [Member Todd Nielsen]: you have any other property. Right? Regardless of how many years. [Witness Eric Maguire]: Regardless of how many years. Exactly. And this is kinda perfect time to represent Donahue because I was just mentioning the question, which I don't know the answer to yet. Oh. But, as most other states will then say in this in this revocable trust, the Medicaid could still go after that because still like you you're not really doing any you still have any access to it just like you have access to any other property. Right. In Vermont, I'm not sure of the answer because, you know, he reps up down. He had some experience seven or eight years ago where in Vermont, this revocable trust was treated sorry. I should back up. On the other hand, there's this irrevocable trust where you don't have access to the property. Generally agreed that if it's irrevocable and if you put property into that, as long as you've done it more than actually, I think it might even not be subject to the five year one. That's what I was saying. But if you put property into the into the irrevocable trust, then it is. It's not part of your probate estate, and then Medicaid can't get it. And it does [Ranking Member Anne B. Donahue]: it does have the the look back. Just like if you give it away to your grandchild, doesn't work unless you gave it away, you know, x years beforehand. I I thought that trust was a [Witness Eric Maguire]: You might be right. But there there is an exemption to the look back. [Ranking Member Anne B. Donahue]: Even met with the trust determinant time and all that. [Witness Eric Maguire]: And it's [Ranking Member Anne B. Donahue]: like Right. When my dad set up, he did a do it yourself thing. But when he set up his trust, they knew they thought they knew. They they knew that making it revocable revocable meant that it did not protect assets from Medicaid, and they were okay with that. The purpose of them doing it was not to, you know, prevent Medicaid from requiring it to be part of the buy down or spend down. [Witness Eric Maguire]: Spend down. [Ranking Member Anne B. Donahue]: Their purpose was to avoid probate for getting things straight to the kids and all that. So they were okay with with that. And and when they when we went with my mom to talk about more imminent planning, in later years, it it was clear. I mean, the attorney was saying, well, of course, if you change this now to it not being revocable, it's too it's too late. [Member Zon Eastes]: Right. [Ranking Member Anne B. Donahue]: It doesn't count because there's that look back period. We say, yeah. We knew that. [Witness Eric Maguire]: So let me correct something I said earlier in response to your your question. So I was there was something that's not subject to look back, but I was wrong. It's not the Medicaid asset protection trust. It's actually the enhanced life estate deed. So, the traditional life estate deed did violate the look back rule because the, the beneficiary immediately had ownership rights. But an enhanced life estate deed, which is what you have in Vermont, does not violate the look back row because Medicaid the Medicaid recipient maintains ownership of the home during their life and the beneficiary does not have ownership. So in other words, it's not a gift. Right. It's not so it it's not a gift that would violate the five year period that you made during that period. Like, hey. You were just giving assets away. But you're not really giving it away because you still have the authority, as you said, to sell it, mortgage it, do whatever you want. So that is a way that within the five year period let's say you you wanted to, even if it's only two years from now that you pass away or that you sorry, that you apply for Medicaid long term care benefits, you want to put your house into an enhanced life estate deed, that you could do, and it would not be a violation of the five year look vector because you still it's not a gift under Medicaid's rules because you still have access to it. [Vice Chair Golrang "Rey" Garofano]: All All this is Makes sense. [Chair Theresa Wood]: To say that this is earlier. [Member Zon Eastes]: Okay. Okay. [Witness Eric Maguire]: Really complicated. It is complicated. It's complicated. Yeah. [Chair Theresa Wood]: And so treading lightly and understanding what we're doing is something that's gonna require a lot more testimony and understanding of the rules. And, you know, I'm thinking that we probably gonna need some advice from people who are experts in this It'll be a judiciary It'll be a crossover judiciary for sure. Yeah. So I just wanna, especially at this time of year, thank Eric for making time in his schedule to enlighten us about the nature of long term care rules as it relates to estates and wills and trusts and all of that. It's pointed out that we have All new topics. I see. Points out we have a lot to learn. Let's just put it that way. So I'm like, good. I'll just [Witness Eric Maguire]: I'll just because I wanted to check before I left, because I remember I mentioned this morning, it's unopened it's unresolved question of whether or not an a revocable trust, whether that the assets in a revocable trust count toward, toward determining whether a person is eligible for Medicaid or not. I had sent an email to this person at DVHA who I was working with. And I'm like, oh, I wonder if she got back to me while I was here testifying. Yeah. She did. Well, good morning. Treatment of trust can get tricky as you already know. No [Member Zon Eastes]: problem. When [Witness Eric Maguire]: it comes to LTC, Medicaid eligibility for someone who has an interest in a trust, even irrevocable ones might be countable to the individual depending on the terms of the agreement as it applies to that applies to them. If not the principle of the trust as a resource, then at least the interest dividend to trust earns as income. But to answer your question, yes. The assets in a revocable trust owned by an individual applying for Medicaid are fully accountable as resources of that individual. [Ranking Member Anne B. Donahue]: So there must have been a change. [Witness Eric Maguire]: Maybe it was a change [Ranking Member Anne B. Donahue]: in the last seven years because it was Yeah. [Witness Eric Maguire]: Mhmm. Yeah. [Member Todd Nielsen]: And I just wonder about the ability of the state to to actually what's the capacity to go and look? [Ranking Member Anne B. Donahue]: Yeah. They may not know because it doesn't show up in probate. Right. There's no way to [Witness Eric Maguire]: Good point. How would you [Vice Chair Golrang "Rey" Garofano]: a question for Deepa? [Ranking Member Anne B. Donahue]: That would be in the application. Yeah. [Chair Theresa Wood]: Is it? Yeah. Yeah. [Vice Chair Golrang "Rey" Garofano]: I I [Chair Theresa Wood]: I suggest that you take a look at the application if you're interested in this just in your own time. Having been through that with a family member, it's an extensive application for long term care Medicaid. Mhmm. You know, under the pains and penalties of perjury and all that kind of stuff, you have to you have to list all of your assets, including trusts. So Makes sense. Yeah. Okay. So so they know about it from your application. [Witness Eric Maguire]: Sure. [Chair Theresa Wood]: They know whether you've deceased or not, and they, I'm sure, check back on those app again, whether you had received any kind of substantial long term care Medicaid benefit. And, yeah. So it's it's a extensive process and they take, you know, some period of time to process it. So it became an issue in choices for care for people who trying to access long term care services, who clearly didn't have much in the way of assets at all. And just because of it, they do they contact banks. They contact attorneys. They you know, you're giving them authorization to do that when you're applying for long term care Medicaid. So it's a yeah. It's it's complicated and, you know, I think one of the reasons that representative Iacoboni, you know, in his he's got a lot of experience in this field from his previous work and both on the community side as a nursing home administrator, and he, worked in the central office of the agency of human services. So he's got sort of experience on both sides of the issue, and, looking at at ways to try to support ways for people to try to support themselves. So thank you very much, Eric. We really appreciate it. Yeah. Definitely. This time of year when things get your lunch council schedules get pulled in many directions. So thank you very much. We really appreciate it. [Witness Eric Maguire]: You're welcome. Glad to help. Very interesting topic. And as you continue to work on it, if you have any more questions or if I can help out, just let me know. I think [Vice Chair Golrang "Rey" Garofano]: I took business long. I've had to self teach. Okay. [Chair Theresa Wood]: Thank you so much. Hi. Hi, Matthew. Good morning. Okay. So we are now going to turn our attention to h thirty, an act relating to exclusion and restraint. You would need a couple minutes I [Witness Eric Maguire]: do need I do need just a [Vice Chair Golrang "Rey" Garofano]: couple minutes. [Chair Theresa Wood]: Will take a couple minutes to take

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