OBRA TRUSTS: MEDICAID PLANNING, OR MEDICAID FRAUD AND ABUSE?

OBRA TRUSTS: MEDICAID PLANNING, OR MEDICAID FRAUD AND ABUSE?


Probate Sharks has heard of many cases in the Corrupt Cook County Probate Courts where powers of attorney are illegally removed, and the court appoints a non-family member or inappropriate family member as guardian; cases where owners of guardianship companies have deceived the ward in an effort to be named as guardian; and cases where the court appoints a guardian on a date when it is known to the court players that a family member willing to be named guardian cannot be present for the court hearing.

You may ask yourself: Why would these deceitful actions be occuring? How lucrative can these cases be for a probate court attorney or a court-appointed guardian? Well, if the lawyers and guardians involved are unethical, it can be as lucrative as the entire value of the ward's estate.

OBRA Special Needs Pooled Trusts, as well as other types of trusts, are being utilized by unethical lawyers, nurses, and guardianship companies to enrich themselves while the elderly disabled wards are being placed into public aid nursing homes.

OBRA Special Needs Pooled Trusts were originally designed to enable people with devastating illnesses and/or injuries to be placed into public aid nursing homes while preserving their estate for their OWN special needs (special medical equipment, health insurance, etc). However, due to some legal loopholes, these accounts are being abused, and "Medicaid Planning" is on the rise.

OBRA Trusts were not designed for middle class elderly who wish to pass some inheritance to their children rather than deplete their estates paying for an extended nursing home stay. However, some families abuse these Medicaid Planning Trusts to preserve the estate for their own inheritance, while their folks spend out their last years in public aid nursing homes. More about this Medicaid abuse may be read here:

http://www.mobar.org/c4ba4482-ede3-4190-a86d-e6b2a1d2f466.aspx

Although legal, many find Medicaid Planning to be unethical, especially if the Trust is opened solely for the purpose of qualifying the ward for public aid. However, the practice is growing as more and more lawyers and clients become aware of it.

The following website lists attorneys in Illinois who specialize in Medicaid planning:

http://www.careillinois.net/list18_IL_elder_law_attorneys_lawyers_medicaid_advice.htm#assistance

In fact, one Cook County Probate Court lawyer educates her peers in ways in which very large estates may be placed into OBRA and/or other types of trusts, to allow the disabled ward to qualify for Medicaid. She also educates her peers on which types of trusts are lacking oversite, and which types of trusts allow for "administrative fees" (i.e., attorneys' and guardians' fees). Her educational video may be viewed at this website:

http://www.illinoisprobono.org/index.cfm?fuseaction=home.dsp_Content&contentID=5512

Unfortunately, some corrupt players in the Cook County Probate Court system (lawyers, nurses, judges, and guardianship companies) have discovered a legal loophole so they may enrich themselves through OBRA Special Needs Pooled Trusts. This Medicaid abuse can occur because only certain "special needs" expenses may be paid from OBRA Special Needs Pooled Trusts, such as medical bills, insurance premiums, and "administrative fees". However, housing may NOT be paid from these accounts. As a result, the ward is immediately moved to public aid housing once their estate is placed into the OBRA Special Needs Trust. The OBRA Trust is non-revokable, meaning that once the estate is placed into this trust, it cannot be transferred out. Thus, the ward is sentenced to a life in public aid housing, even though they may have enough in their estate for many years at a private pay nursing home.

These unethical guardians are placing the wards' estates, sometimes valued in the hundreds of thousands of dollars, into OBRA Special Needs Pooled Trusts to qualify the ward for public aid housing. Once the ward is in public aid housing, the bulk of the estate is utilized to pay excessive legal and guardian fees. In essence, the taxpayer is paying for the care of the ward, and the unethical court players are enriching themselves with the estate.

How, you may ask, does this occur? Well, the answer is quite simple. The judge allows it, and the Illinois Supreme Court provides no oversight.

We have had numerous victims of this Medicaid Abuse scheme come to us at ProbateSharks with their concerns.  We have even heard of cases in Cook County where the lawyers and/or guardians, with the knowledge of the judge, illegally deposited dis-allowable funds of the ward (disability benefits, newly-discovered funds, etc) into the OBRA Trust. (In the Matter of Lynch, N.Y.S. 2d 653 (Surr.Ct, Onondaga County, 1999), the court held that it would not allow SSI income to be put into a Special Needs Trust, stating that it was "troubled by the concept of funding the special needs trust with benefits received from governmental entitlements".)

We have heard of cases where the judge, no questions asked, approved the lawyers' and guardians' requests to transfer the estate into an OBRA Trust. Court transcripts support the families' claims that the judges did not even ask the guardian about the change in living conditions that would result from the transfer of the ward's estate into an OBRA Trust, thus requiring a transfer to public aid housing.

Additionally, victims' families have told us that their lawyers failed to explain the matter to them to the extent reasonably necessary to permit the family to make informed decisions so they would not object to the transfer of funds. In other words, no one explains to the victim's family that the OBRA Trust will result in a lifetime of public aid housing for the ward. The victims' families are being told that it is done to preserve the estate for the "special needs" of the ward.

However, the reality of the subsequent accountings shows that the estate is used almost exclusively for the "special needs" of the lawyers and guardians, as their excessive fees are subsequently approved by the judge until the entire estate is depleted.

Where, you ask, is the oversite for these Corrupt Cook County Probate Court cases? There is obviously no oversight at all. Billions of dollars go through the Cook County Probate Courts annually. Yet, there is no oversite. The judges allow estates to be depleted in this manner. The ARDC of the Illinois Supreme Court fails to bring to hearing the complaints of cases orginating in the Cook County Probate Courts.

What we have here in Chicago is legalized financial exploitation of the elderly disabled, as well as Medicaid Fraud and Abuse. The taxpayers of Illinois are footing the bill as our Medicaid system is being depleted, and the disabled elderly wards are being placed unnecessarily into public aid nursing homes. And the unethical court players get rich. Very rich.


As always, we invite the media, law enforcement, and FBI to investigate.

Please read our task force's article titled: ARDC Audit Results. (The link can be found in our Labels index on the right hand side of this website).


If you suspect Medicaid Fraud or Abuse on your loved one's case, please report it to:

http://www.cms.gov/FraudAbuseforConsumers/02_How_to_Report_Suspected_Fraud.asp

Editor's note: If you are interested in knowing which 4 banks in Illinois have OBRA Special Needs Pooled Trusts, you can see them on this link:


http://www.perliselderlaw.com/comparison_trusts.php


Signed,

Your ProbateSharks Medicaid Fraud Investigation Task Force


Editor's note: Alice R. Gore Estate value about 1 million dollars: Alice R. Gore, deceased, a disabled 99 year old ward of the Probate Court of Cook County, Judge Kawamoto’s courtroom was hours away from ending up in the Cook County Morgue. Alice's estate was depleted by probate court parasites and there were reportedly no funds to bury her. Her loving family paid for the burial expenses so that Alice would not have to suffer the indignity of being stacked like an Auschwitz inmate in the Cook County morgue. The judge allowed an easily manipulated mentally disabled granddaughter to be appointed as Alice’s guardian and yet no sanctions were instituted against the judge or court officers for this blatant infraction of the law.


Strangely, 16 of Alice’s annuity checks, two of which show forged endorsements, disappeared. Alice’s daughter has a copy of a check with her signature possibly forged. The daughter’s attorney has been trying to obtain copies of the 16 other annuity checks for two years without success. The Probate Court of Cook of Cook County refuses to investigate these blatant infractions of the law. Lucius Verenus, Schoolmaster, ProbateSharks.com

KawamotoDragon.com