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A Review of Oregon Medicaid Eligibility Rules

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					                                                  A Review of Oregon's
                                                 Medicaid Eligibility Rules
                                      his article discusses some of the       person has a spouse with whom the

                              T       current requirements for
                                      establishing eligibility of an
                              aged person for Medicaid. The article
                                                                              person is living or do not exceed
                                                                              $2,000 if the person has no spouse
                                                                               with whom the person is living. 42
                              focuses on financial resources which             USCA §§ 1382(a)(1), 1382f(c).
                              the state may deem available to an               A person who has an SSI-eligible
                              applicant for purposes of establishing      spouse is eligible for SSI if the person's
                              eligibility.                                nonexcluded income, together with the
                                   There are two general categories       income of the spouse, is no more than
                              under which a person may be eligible to     $249 per month, and if the person's
                              receive Medicaid: Categorically Needy       nonexcluded resources, together with
                              and Medically Needy.                        the resources of the spouse, are no more
                                                                          than $3,000. 42 USCA §§ 1382(a)(2),
                                   1. Categorically Needy. A
                                                                          1382f(c).
                              person who receives Supplemental
                              Security Income (SSI) benefits under             Excluded Income. In determining
                              Title XVI of the Social Security Act is     the income of a person and the person's
                              categorically needy and automatically       eligible spouse the following are among
                              eligible for Medicaid in Oregon.            the items of income that may be
                              OAR 461-160-610(1); Stilger v. AFSD,        excluded:
                              89 Or App 503, 749 P2d 1204 (1988).              (1) The first $240 per year of
                              To be eligible for SSI, a person must be         income other than income paid on
                               aged, blind or disabled and meet                the basis of need.
                              prescribed income and resource
                               standards.                                     (2) Payments made by a state to
                                                                              persons who become eligible for the
                                    A person who does not have an             payments upon reaching the age of
                               SSI-eligible spouse is eligible for SSI:       65 and satisfying residency
                                   (1) if the person's income, other          requirements.
                                   than income excluded as noted              (3) Unearned income not to
                                   below, is no more than $166 per            exceed $20 per month, and earned
                                   month; and                                 income not to exceed $10 per
                                   (2) if the person's resources, other       month, if such income is received
                                   than resources excluded as noted           too infrequently or irregularly to be
                                   below, do not exceed $3,000 if the         included.



                                                                In this issue
Oregon Estate Planning
   and Administration              1 Oregon Medicaid Eligibility Rules
    Section Newsletter
                                   4 Feeling Drained

                                   5 Uniform TOD
        Volume IX, No. 1
            January 1992           6 What's New

                                   6 Executive Committee Report

          Published by the
                                   7 Seminar Notice
           Estate Planning
        and Administration          7 Questions To The Editor
             Section of the
          Oregon State Bar          8 Calendar
       (4) Under certain conditions, the      $1,221 or less is considered to be         prescription drugs and will not cover the
      first $780 per year of earned           medically needy by the state and would     cost of the nursing home or other
      income.                                 be eligible for full Medicaid services,    medical expenses. Consequently,
       (5) Refunds of taxes paid on real      including physician services, nursing      state-subsidized nursing home care for
      property or food.                       home care and prescription drugs.          individuals with monthly income of
      (6) State public assistance.                  The treatment for nursing home       over $1,221 is no longer available to
                                              residents whose monthly income is          Oregon residents, even if they "spend
      42 USCA § 1382a(b).                                                                down" to the $1,221 level.
                                              greater than $1,221 has changed
      Excluded Resources. In                  drastically as a result of amendments to        Resources. Medicaid applicants
 determining the resources of a person        the Oregon Medicaid plan, which were       may retain cash or cashable assets of up
 and the person's eligible spouse, if any,    implemented after the 1991 legislative     to $2,000 for one person and $3,000 for
 the following are among the resources        session and which create a prioritized     two persons. Other resources that may
 that may be excluded:                        list of state-provided services.           be retained include:
      (1) The home.                           According to the Senior and Disabled
                                                                                              (1) The home.
      (2) The reasonable value of             Services Division of the Department of
                                              Human Resources, prior to the                   (2) $6,000 equity in
      household goods, personal effects
                                              amendments, if a person had monthly             income-producing property if
      and automobile.                                                                         yearly income from such property
                                              income of over $1,221, the person could
      (3) The value of burial space.          "spend down" to the Medicaid                    equals at least six percent of such
      (4) Other property essential to         qualifying level by incurring medical           equity.
      self-support.                           and other qualifying expenses that              (3) A vehicle worth up to $4,500.
      (5) The cash surrender value of         would reduce the income to $1,221 or
                                                                                              (4) Household goods and personal
      life insurance policies totalling       below, and would then be eligible to
                                                                                              effects worth no more than $2,000.
      $1,500 or less.                         receive a full range of state-provided
                                              medical services, including nursing             (5) Cash surrender value of life
      (6) An amount not to exceed                                                             insurance of up to $1,500.
                                              home care, physician services and
      $1,500, set aside for burial
                                             prescription drugs. However, under               (6) Term life insurance.
      expenses, reduced by the cash
                                              Oregon's current Medicaid program, if
      surrender value of life insurance                                                      (7) Prepaid burial arrangements,
                                              a person has monthly income of $1,221
     policies under (5) above and
      amounts in an irrevocable trust or
     arrangement that are available to
     meet burial expenses.
                                             or more, the person may still spend
                                             down to the $1,221 level but will
                                             qualify only for a medical card entitling
                                             the person to payment for prescription
                                                                                             burial plot and $1,500 burial fund.
                                                                                             (8) Resources needed for
                                                                                             self-support by a blind or disabled
                                                                                             recipient.
                                                                                                                                       •
     42 USCA § 1382b(a), (d).                drugs. Essentially, Medicaid services            Transfer of Resources. If an
     2. Medically Needy. A person            for the elderly who need nursing home       applicant for Medicaid attempts to avoid
who is aged, blind or disabled and who       care, but whose income is greater than      having assets counted in determining
would meet categorically needy               $1,221, have been eliminated.               eligibility by disposing of resources in
standards except for income may still              Under the "spend down" provision,     excess of the Medicaid-qualifying level,
qualify for Medicaid under a state           a person in a nursing home may retain a     the person may lose eligibility if the
Medicaid assistance plan in the              $30 per month personal allowance and,       transfers are for less than fair market
"medically needy" category. 42 USCA          if the person has a spouse or family        value and occur within 30 months
§ 1396a(a). Applicants qualifying as         living at home, an allowance to provide     before the person applies for Medicaid.
medically needy may have a higher            for those family members. The               OAR 461-140-210, -220. The person
income and may retain more resources         remainder of the person's income must       would lose eligibility for the lesser of
than persons qualifying as categorically     be applied to the cost of nursing home      (a) 30 months; or (b) the number of
needy.                                       care. If the person's income is $1,221 or   months equal to the uncompensated
     Income. Oregon law provides that        below, the state will provide the balance   value divided by $1,970 for individuals
the Department of Human Resources            of the cost of care. If the person's        in long-term care, or $1,000 for
shall establish a medically needy            income is above the Medicaid                individuals in the community.
program to provide services to persons       qualifying limit, the excess income, less   OAR 461-140-290.
who meet categorical eligibility             a $30 personal allowance and any                 Availability of Resources. The
requirements but whose income is too         family maintenance deductions, must be      Oregon Administrative Rules provide
high to meet the requirements of those       used to reduce the cost of the nursing      that "[a] resource is available if the
programs. Maximum income may be no           home care, Le, the nursing home             client has a legal interest in the resource
more than 133-1/3 percent of the
payment standard for aid to dependent
children eligibility. ORS 414.039;
                                             resident must "spend down" to become
                                             eligible for Medicaid. However, under
                                             the new program, the state will pay only
                                                                                         and has the legal ability to sell or use
                                                                                         the resource." OAR 461-140-020(1).
                                                                                         resource is not available if *** [t]he
                                                                                                                                 "A•
OAR 461-155-110. A person in a               for the nursing home patient's              resource is an irrevocable or restricted
nursing home whose monthly income is                                                     trust and cannot be used to meet the

                                                              Page 2
    basic monthly needs ***." OAR                     of discretion by the trustee or         of the assets in the trusts should be
    461-140-020(3)(e). The Rules also                 trustees for the distribution of the    deemed resources available to the
    provide that, "to be eligible for benefits,       maximum amount to the grantor.          Medicaid applicants.
    a person must actively pursue any asset           ***
                                                                                                    Finding that the trusts were created
    for which they have a legal right or              42 USCA § 1396a(k)(1).                  by the Colorado probate courts, not by
    claim," OAR 461-120-330(1), and                                                           the patients themselves, the court held
    "[p]ursue legal remedies to obtain assets          All amounts from a                     that the trusts were not
    from any other source if they can secure      Medicaid-qualifying trust that the          Medicaid-qualifying trusts as defined in
    legal counsel on a contingency fee            trustee could make available to the         the statute. Alternatively, the court held
    basis." OAR 461-120-330(2)(b).                grantor are considered available            that, even if the trusts were
                                                  resources. Even if a trustee does not       Medicaid-qualifying trusts, by their
         In certain circumstances, the            exercise its discretion to make
    income and principal of a trust will be                                                   terms the trustees could distribute no
                                                  distributions, any amounts which it         more than an amount $20 less than the
    considered as an available resource for       could distribute from the trust will be
    the purpose of determining Medicaid                                                       Medicaid income eligibility level and
                                                  deemed available resources to the           the trusts would not make the patients
    eligibility. The State of Oregon counts a     grantor for purposes of qualifying for
    trust fund as a resource if the fund is                                                   ineligible for Medicaid.
                                                  Medicaid. 42 USCA § 1396a(k)(3).
    legally avilable for use. If the fund is      Consequently, if a trust is deemed to be          In dicta, the court noted that "[t]he
    not legally available, the State              a "Medicaid-qualifying" trust, the effect   Congressional purpose for prohibiting
    Administrative Rules require the                                                          Medicaid qualifying trusts is the same
                                                  may be to disqualify the grantor from
    applicant to attempt to remove the legal                                                  as that behind banning transfers without
                                                  Medicaid eligibility by deeming trust
    restrictions on the trust unless such         assets or income as available resources.    fair consideration. Congress sought to
    action would create an expense for the                                                    prevent wealthy individuals, otherwise
    applicant. OAR § 461-145-540.                      Case law suggests that courts will     ineligible for Medicaid benefits, from
                                                  construe the language of the                making themselves eligible by creating
         Medicaid-Qualifying Trust. In            Medicaid-qualifying trust statute           irrevocable trusts in order to preserve
    addition, federal law has addressed the       narrowly. Miller v. Ibarra, 746 F Supp      assets for their heirs. *** [T]his clearly
    issue of when trust funds are to be           19 (D Colo 1990), involved four trusts      was not the motive for creating the
    deemed available to a Medicaid                that had been established by Colorado       instant trusts." Miller, supra, 746 F
    applicant. A "Medicaid-qualifying             probate courts for the benefit of four      Supp at 34.
    trust" is defined as                          mentally incompetent nursing home                 Notwithstanding the dicta in Miller,
•       a trust, or similar legal device,         patients. The patients all received         its holdings are consistent with the clear
        established (other than by will) by       monthly incomes which were too high         language of the Medicaid statute; assets
        an individual (or an individual's         to enable them to qualify for Medicaid      of a Medicaid-qualifying trust are
        spouse) under which the individual        but too low to cover the costs of their     deemed available to a Medicaid
        may be the beneficiary of all or part     nursing home care. Under the Colorado        applicant only to the extent the trustee
        of the payments from the trust and        Medicaid rules, the patients were not       has the discretion to disburse them.
        the distribution of such payments is      permitted to "spend down" their
                                                  incomes to the qualifying level but               Consequently, if a trust is
        determined by one or more trustees
                                                  instead were totally disqualified for any    established by a person for the benefit
        who are permitted to exercise any
                                                  Medicaid assistance, a predicament           of the person or the person's spouse,
        discretion with respect to the
                                                  known as the "Utah Gap." At the time         and the trust instrument grants the
        distribution to the individual.
                                                  of this decision, Colorado was one of        trustee full discretion to distribute
         42 USCA § 1396a(k)(2).                   only 15 states that had not elected to       income and invade principal, the entire
                                                  participate in a federal "spend down"        value of the trust probably would be
         The Social Security Act, as
                                                  program that would bridge the Utah           considered an available resource to the
    amended by the Consolidated Omnibus
                                                  Gap. [The recent changes to the Oregon       trust beneficiary, rendering that
    Budget Reconciliation Act of 1985,
                                                  Medicaid program that limit benefits         beneficiary ineligible for Medicaid until
    provides for the treatment of potential
                                                   after spend down appear to create an        the trust has been exhausted. On the
    payments from Medicaid-qualifying
                                                   effect similar to that of the Utah Gap.]    other hand, if the trust instrument limits
    trusts:
                                                                                               the trustee's discretion to make
         In the case of a medicaid qualifying          To alleviate the hardship caused by     distributions (e.g., places a limit on the
         trust ***, the amounts from the          the Utah Gap, the Colorado probate           amount of income distributions per
         trust deemed available to a grantor      courts established the trusts, providing     month or prohibits invasion of the
         [defined as the individual who           that the trustees could disburse funds up    principal without obtaining the consent
         established the trust, or that           to a level $20 below the applicable          of a third party), only the amounts the

•        individual's spouse] *** is the
         maximum amount of payments that
         may be permitted under the terms
         of the trust to be distributed to the
                                                  Medicaid maximum income eligibility
                                                  level. The Colorado Department of
                                                  Social Services denied Medicaid
                                                  benefits, claiming that the trusts were
                                                                                                trustee can distribute, in the trustee's
                                                                                                sole discretion, should be considered
                                                                                                resources available to the beneficiary

         grantor, assuming the full exercise      Medicaid-qualifying trusts and that all

                                                                     Page 3
for purposes of determining Medicaid          "counter-transference" is prevalent                 Excessive client dependency can be
eligibility.                                  within service-oriented professions.           fostered by an attorney striving to meet
                        Karen E. Bendler                                                     all the client's personal needs. This may
                                                  Know When You're Hooked                    be damaging to both the attorney and
                                                    Planning for death, and helping          the client. Every professional who is in •
                                               clients and their families through            the business of giving advice has had
                                               transitions is an area where it is easy to    clients with whom they have become
                                               blur personal boundaries and become          more than just an advisor. It is a good
                                               emotionally involved and stressed. In        idea to watch for your own inclination
                                               order to prevent excessive responsibility    to foster that kind of attorney-client
  Feeling Drained By Your                      and "overcare" of the client and             relationship. You may observe this
          Clients?:                            resulting burn-out, it is necessary to       tendency in your partners or associates
   Professional Distance,                      develop the self-awareness to know           and bring it to their attention in a
                                               when you are becoming "hooked" by a          non-judgmental way.
    Role Definition and                        client. This self-knowledge is critical in
                                                                                                  The attorney may be giving a client
  Getting Out From Under                       any service-oriented profession, not to
                                                                                            advice with good intentions in areas
                                               mention in our own family situations.
      the Needy Client                         Rescuing yourself from
                                                                                            outside the attorney's expertise, i.e.,
                                                                                            medical and psychological advice. Poor
                                               over-involvement and establishing some
                                                                                            advice, outside the realm of a

T        here is simply not enough time        distance from the client and his or her
                                                                                            professional's area of expertise, may
         in the day to get through the         situation increases your control over the
                                                                                            contribute towards client
         cases on my desk. Mrs. Smith is       situation, allows you to focus on the
                                                                                            misunderstanding and misdirection.
so demanding, and she's getting older,         task at hand, and increases your ability
                                                                                            Attorney malpractice may also result.
she seems a bit forgetful...maybe she          to perform work for that particular
                                                                                            The safest way to give advice outside of
has Alzheimer's. She asks me more             client, and others.
                                                                                            one's expertise is to refer the client
frequently to read her mail and                     Is it possible to remain more           elsewhere for specific services.
sometimes needs me to review her bills.       emotionally detached yet still seem
I feel like I have another mother to take
care of. I can't bill her for all the extra
time I put in. It doesn't feel right. But I
feel that I should be doing these things
for her. No one else seems to be able to
help her. I feel like I'm her support
                                              involved and caring? Absolutely. Part of
                                              the reason advisors get more involved
                                              than we want to with clients is because
                                              the word "no" disappears from our
                                              vocabularies, and we lose focus and get
                                              confused about our roles. A "cleaner"
                                                                                                  Utilizing the services of a private
                                                                                            geriatric care manager is a responsible
                                                                                            solution to the problem of linking up an
                                                                                            elderly or disabled client to necessary
                                                                                            services. Such services can include
                                                                                            in-home care, placement, assessment,
                                                                                            medical claims filing, care monitoring
                                                                                                                                       •
system, her family. I do feel good about      attorney-client relationship results from
what I do for her...but I have other                                                        and other personal services. The care
                                              a clear definition of where your role
responsibilities and I think she's                                                          manager can assist the attorney by
                                              begins and ends. Attorneys who have
becoming dependent on me. I didn't go                                                       coordinating the entire process of
                                              rudimentary knowledge of where clients
to law school to review Medicare              can seek additional assistance for the        referral or only certain aspects as
claims!                                                                                     requested. This coordination and
                                              advice and activities they do not care to
                                                                                            monitoring can occur locally or across
     If the preceding paragraph even          provide can reasonably and in a caring
                                              way re-define their roles.                    the country depending upon the
remotely rings a bell, it is because                                                        requirements of a particular client.
attorneys belong to the "helpful"                  Attorneys and other advisors cannot
caregiver, gatekeeper, advocate, and          be all things to all people. Naturally,       Unhook Yourself: Know and Use
advisor group of professionals along          there are many reasons attorneys decide           Community Resources
with C.P.A's, physicians, psychologists,      to practice law. The least healthy
                                                                                                 The stress experienced by attorneys
social workers and nurses.                    reasons are those that relate to filling      who become over-involved with clients
     Those attorneys especially               personal deficits (i.e., the need to be       may be harmful to their practices and
vulnerable to over-involvement with           needed and ever-helpful). Excessive           their family lives, not to mention their
clients and their families are those who      client dependency is often created in         health. By recognizing the types of
have close client contact, foster warm        those cases. There is a fine line between     clients who are most likely to hook us,
personal relationships with clients, and      establishing a level of client dependency     e.g., clients who are most like our
must relate on a personal level about         that will bring the client in to see you,     parents or children, we can be aware of
very personal issues. Estate planning         and establishing a level of client
                                                                                            our likely responses and tendencies.
and probate work demands involvement          dependency that causes you to lose both       Self-awareness is the key to avoiding
in human issues. Legal counseling in
estate planning requires that a
practitioner have a degree of empathy,
foresight, timing and intuition. The
                                              yourself and billable time. After all, if
                                              there is no dependency, there won't be
                                              any attorney-client relationship at all.
                                                                                            the high stress resulting from doing too
                                                                                            much for clients and their families.
                                                                                            Once you have the self-awareness, let
                                                                                            the clients know that you can indeed
                                                                                                                                       •
problem of over-identification or                                                           help them by providing references to

                                                                Page 4
      experts who truly can help them with         geriatric assessment, chemical                right of survivorship to designate a
      the difficulty they are experiencing.        dependency, in-home services and              beneficiary for the security. Upon the
      Private for-profit resources and             out-of home placement, and care               death of the sole owner or surviving
      non-profit resources abound in Oregon.       management. Such assistance can be            joint owner of the security, the
•     There are services, programs and             located in the blue "Community Service        ownership of the security passes to the
      residential options existing in this state   Numbers" section of the telephone             named beneficiary as a matter of
      that make Oregon unique in many ways.        directory, or by calling the Aging            contract and is not a testamentary
      Utilization of these services can relieve    Services Division, Senior and Disabled        transfer. If no beneficiary survives the
      you from a tremendous burden of              Services Division or Agency on Aging          owner, the security becomes an asset of
      responsibility for emotionally and           in your county. Other services can be         the deceased owner's estate. The
      physically needy clients.                    located by checking under "Social             beneficiary may be an individual, a
                                                   Service Organizations", "Senior               corporation, an organization or other
           Because many of the issues that tug                                                    legal entity.
                                                   Citizens' Services" or "Alcohol
      on our time and on our heart strings, as
                                                   Information and Treatment" in the                    The designation of a beneficiary
      well as our telephone lines, concern
                                                   yellow pages. Referrals can be obtained        does not affect the ownership of the
      aging and disabled clients, a fairly new
                                                   by calling the National Association of         security until the owner's death. Prior to
      tool, called "PASARR", the acronym
                                                   Private Geriatric Care Managers at             that time, the beneficiary has no interest
      for Pre-Admission Screening Annual
                                                   (602) 881-8008, by calling United Way          in or right to the security and the owner
      Resident Review, is helpful for
                                                   at 222-5555, by obtaining a Services for       may cancel the beneficiary form
      attorneys and other professionals who
                                                   Seniors Directory from Providence              registration or change the beneficiary
      have concerns about an aging client.
                                                   Senior Services at 230-6048, or by             designation at any time without the
           Mandated by the Oregon State            calling the Good Samaritan Medical             beneficiary's consent.
      Legislature in 1989, PASARR is               Center's Education and Family Support
      provided to non-Medicaid individuals         Services at 229-7348. For personal                   Under the act, "security" is defined
      who are considering admission to a           assistance with the tendencies discussed       as a share, participation or other interest
      nursing facility. The screening can          in this article, you may call the              in property, in a business, or in an
      assist attorneys with clients who are a      Professional Liability Fund, which             obligation of an enterprise or other
      risk at home and who may require             offers a variety of programs to assist         issuer, and includes a security account.
      placement unless services are brought         attorneys.                                    A security need not be certificated.
      into the home. The screening provides                Susan Goldsmith, L.C.S.W., B.C.D.            A security may be registered in
ill   an assessment of the client's condition,
      services currently being used and those
                                                                           Health Access, Inc.    beneficiary form if that form of
                                                                                                  ownership is authorized by a statute of
      needed, and options available in the                                                        the state of: organization of the issuer or
      community for that client.                                                                  the registering entity; the location of the
           Because the cost of PASARR is                                                          registering entity's principal office; the
                                                                                                  location of the office of the
      provided by the state and federal
      government, you can reassure yourself                                                       organization's transfer agent or the
                                                      The Uniform "TOD"                            organization's office making the
      that professionals are objectively
      evaluating your clients in their own          Security Registration Act                     registration; or, the owner's address at
                                                                                                   the time of registration. The registering
      homes without putting a financial strain
      on them. At the same time you are                                                            entity is a person who originates or
                                                           he 1991 Oregon Leigslative
      removed from the problem for the
      moment. PASARR'S objective is to
      assist seniors with mental illness,
                                                   T       Assembly enacted the Uniform
                                                           "TOD" Security Registration
                                                   Act as Chapter 306 of the Oregon Laws
                                                                                                   transfers a security title by registration.
                                                                                                   It includes a broker maintaining security
                                                                                                   accounts and transfer agents or other
                                                                                                   persons acting for or as an issuer of
      dementias such as Alzheimer's Disease,       of 1991. The act, which applies to the
      or developmental disabilities from                                                           securities.
                                                   transfer of securities at an owner's
      unnecessary nursing home placements.         death, became effective on September                 The act does not require the
      PASARR is available by simply                29, 1991 and applies to all decedents           registering entity to register securities in
      telephoning a certified screening            dying on or after that date. The purpose        beneficiary form. If the registering
      program and requesting a screening of        of this article is to discuss the general       entity permits such a registration, it may
      your client. A list of certified screening   provisions of the act. In developing            establish the terms and conditions under
      programs is available from the Oregon        estate plans for clients with securities        which requests for registration of a
      Senior and Disabled Services Division.       subject to the act, and should consider         security in beneficiary form will be
           Another pragmatic way to avoid          the possibility of registering those            received and for the implementation of
      becoming entangled in a client's web is      securities in beneficiary form.                  such registrations, including the
      to know where to call for assistance              The act provides that a security may       cancellation of previous registrations
•
      with client issues such as Alzheimer's       be registered in beneficiary form. This          and the change of beneficiaries.
      disease and other dementias, mental          type of registration permits a sole                   Upon proof of death of all owners
      illness, Medicare claims assistance,         security owner or joint owners with the          of the security and compliance with any

                                                                     Page 5
applicable requirements established by        in an Oregon corporation, there are                    position of dominance over the grantor
the registering entity, the security may      other property interests which consittute              and 3) that suspicious circumstances
be re-registered in the name of the           securities. Any security which meets the               exist. 108 Or App at 505. The court did
surviving beneficiary. The registering
entity will be discharged from all claims
by the owner's estate, the owner's
creditors, or the owner's heirs and
                                              requirements of the act may be
                                              registered in beneficiary form. Although
                                              the registration of a security in
                                              beneficiary form will not be apropriate
                                                                                                     not find suspicious circumstances in this
                                                                                                     case because the decedent had not
                                                                                                     changed the recipients of her gifts, only
                                                                                                     the timing, from a testamentary transfer
                                                                                                                                               •
devisees if the re-registration is made       in every case, it will always be                       to a lifetime transfer.
prior to its receipt of written notice from   appropriate to discuss the possibility of                                            Helen Rives
a person claiming an interest in the          such registration with the security
security who objects to implementation        owner and to evaluate the effectiveness                          Bigej v. Boyer
of the registration.                          of this type of registration in the                          108 Or App 663 (1991)
                                              owner's estate plan.

                                                                                                     p
    The act does not limit the rights,                                                                       laintiff successfully contested
under Oregon law, of creditors of a                                           Daniel C. Re                   decedent's will, alleging that the
security owner against that owner's                                                                          decedent lacked testamentary
beneficiaries and other transferees.                                                                 capacity and was laboring under undue
Consequently, the creditor of a deceased                                                             influence. The court discounted the
security owner would have a minimum                                                                  testimony of the attorney who both
of one year and a maximum of two                                                                     prepared the will and was one of the
years after the owner's death to initiate                    What's New                              subscribing witnesses to the will,
legal action to recover the debt from the                                                            because he had had minimal contact
owner's beneficiary or other transferees.                                                            with the decedent, and was unaware of
                                                         O'Brien v. Belsma                           decedent's medical condition and
     The right to register a security in               108 Or App 500 (1991)                         mental problems at the time the will was
beneficiary form depends upon whether
such registration is permitted by the
registering entity. In situations where a
security owner does not control the
registering entity (a New York transfer
                                              T        he special administrator of the
                                                       decedent's estate brought an
                                                       action to rescind and cancel
                                              deeds and to require the return of funds
                                                                                                     executed. The court found the testimony
                                                                                                     of the physician and the attending
                                                                                                     nurses more persuasive, since they were
                                                                                                     familiar with the decedent's medical
                                              that the decedent had given to the                     and mental condition for several months
agent for example), there is no               defendant, decedent's daughter, when                   prior to the execution of the new will.	
guarantee that this type of registration      the decedent was allegedly incompetent.                Based on the medical testimony, the        •
will be allowed. However, if the              Plaintiff alleged that decedent was not                court concluded that decedent would not
security owner controls the registering       competent at the time she transferred the              have been capable of having a "lucid
entity, the owner would have the right to     property because she was suffering from                interval" even though she had good
permit this type of registration.             Alzheimer's discase, and that defendant                days and bad days surrounding the time
     Such a situation would exist in the      unduly influenced the decedent to                      that she executed the will.
case of a closely held corporation            transfer the property. The court noted:                                                Helen Rives
organized under Oregon law. The               "The test for competence to convey
corporation itself is the registering         property is whether at the time of the
entity. If the corporation's shareholders     conveyance, the grantor had the 'ability
wish to register their securities in          to understand the nature and effect of
beneficiary form, they would direct the       the act in which [she] is engaged and the
board of directors to develop a written       business which [she] is transacting. —
policy under which the corporation                                                    108OrApat53.      Executive Committee
would receive requests for registration            The court reviewed the testimony of
of securities in beneficiary form and for     five medical experts and 36 lay
                                                                                                               Report
implementation of such registrations.         witnesses and discussed the nature of
The policy should include procedures

                                                                                                     A
                                              the three stages of Alzheimer's disease                         t the Annual Meeting of the
for designating and changing                  before it concluded that decedent was                           Section held during the Oregon
beneficiaries, including determining          competent at the time of the transfer.                          State Bar Annual Convention on
what rights a deceased beneficiary's                                                                 October 3, 1991 in Seaside, Oregon,
                                                   Plaintiff further argued that the
issue would have in the security,                                                                    new members were elected to the
                                              burden of proving undue influence
cancelling previous beneficiary form                                                                 Executive Committee. The current
                                              should be on Defendant if a confidential
registrations, determining how the death                                                             Executive Committee Members are:
                                              relationship existed. The court held that
of the security owner will be
                                              the burden does not shift until the party                  Jill Golden, Chair
established, and determining how the
                                              asserting undue influence has                              Daniel Re, Past Chair
corporation will treat fractional shares.     established: 1) that a confidential                        Stephen Kantor, Chair-Elect
    While the obvious example of a            relationship exists between a grantor                      Helen Rives, Secretary
security to which the act applies is stock    and a grantee, 2) that the grantee has a                   Gretchen Morris, Treasurer .




                                                                    Page 6
     Members-at-Large (1 year term):                                                           (2) There will be no conflict of
     Allyn Brown                               Questions To The Editor                         interest unless the accounts are
     Rita Batz Cobb                                                                            tainted by undue influence, lack of
     Robert Dayton                                                                             capacity, mistake, or some other
     Sarah (Sally) Landauer                   The following question was                       fact which would invalidate the
                                                  submitted to the editor.                     "pay on death" designation;
     Members-at-Large (2 year term):
     Christine Brown                          Facts: 	                                         (3) There will be no breach of
     Donald Denman                                                                             fiduciary duty, for the same reason
                                                  Decedent's Will devises her estate           mentioned in (2) above;
     Donna Muehleck
     Robert Saalfeld                          to her three children equally and names
                                              one son as personal representative.              (4) Disclosure would be required
     The Section will have four                                                                if the elements were present to raise
subcommittees this year, the legislation          Subsequent to his appointment, the           a challenge to the accounts passing
committee, the continuing legal               personal representative discovers                outside of the probate. This
education committee, the newsletter           several bank accounts on which the               situation would create a conflict of
                                              decedent had established as "pay on              interest which would disqualify the
committee and the public affairs
committee. All of the committees are          death" account for his benefit.                  personal representative from
looking for volunteers to work on their           The personal representative had no           serving. This issue should be
projects. For the legislative committee       knowledge of these accounts prior to             analyzed on a case by case basis,
call Steve Kantor at 226-2966, for the        decedent's death and had contributed no          taking into account whether the
continuing legal education committee          funds to the accounts.                           Will provides payment of taxes out
call Gretchen Morris at 754-1411, for             The decedent was competent at the            of the residue, whether disclaimer
the newsletter committee call Dan Re at       time the accounts were created and               issues are present, and whether the
382-4331 and for the public affairs           when the Will was executed. The bank             family enjoys a harmonious
committee call Rita Batz Cobb at              accounts predate the Will.                       relationship. See Estate of Leda
648-8879.                                                                                      Mae Grove v. Selken, 109 Or App
     The Section is sponsoring a CLE on       Questions: 	                                     668 (1991), decided November 13,
trusts which is slated for February 20,            1. Are these assets included in the         1991, for a case involving similar
1992.                                         decedent's estate?                               facts where disclosure was not
                     Helen Rives, Secretary                                                    made until the personal
                                                  2. Does the acceptance of                    representative's fmal account was
                                              ownership of the accounts create a               filed.
                                              conflict of interest for the personal
                                              representative?
                                                  3. Is acceptance of ownership a
                                              breach of the personal representative's
                                                                                           R     eaders are encouraged to submit
                                                                                                ,questions at the following address:
                                                                                                Attn: Editor
                                              fiduciary duty?
              Seminar                                                                           Oregon Estate Planning and
                                                  4. Upon acceptance of the                     Administration Section Newsletter
                                              accounts, what disclosure is required?            P.O. Box 1151

0
           n February 20, 1992, the Estate
                                                                                                Bend, OR 97709-1151
           Planning and Administration        Discussion: 	
           Section of the Oregon State Bar                                                      The name of the person submitting
                                                   At the time decedent had her Will •     the question will not be published.
is presenting a program entitled "Using
                                              prepared, the drafting attorney should
Trusts in Estate Planning" at the Red                                                           All questions received at least 60
                                              have investigated the extent of the
Lion-Lloyd Center. The program will                                                        days before a Newsletter publication
                                              decedent's assets and the form of title to
discuss revocable trusts, special needs                                                    date will be considered for publication
                                              each. When attorney learned of the
trusts, and tax-motivated trusts, (such as                                                 and response in the next issue of the
                                              accounts, attorney should have advised
life insurance trusts, trusts for minors                                                   Newsletter. The Newsletter reserves the
                                              decedent that the effect of the form of
and qualified Subchapter S trusts,)                                                        right to respond only to those questions
                                              ownership would be to pass those assets
along with taxation of trusts, trust                                                       approved by a majority of the editorial
                                              outside of probate and create an unequal
administration, drafting for trusts,                                                       board and to edit letters to conform to
                                              distribution to her children.
modification, revocation, termination                                                      its form and length requirements. The
and ethical considerations involved.               If that is the case, then this is the   response will not necessarily represent
      If you have a question about trusts,    decedent's intended estate plan. The         the position of the Section or its
let us know and we'll try to answer your      personal representative may claim the        Executive Committee, nor is it intended
question at the Seminar. All questions        accounts outside of the probate. The         to constitute the giving of legal advice.
should be directed to Keir Karson, ao         answers to the questions above are -
the Oregon State Bar office.                       (1) The assets are part of the
               Carolyn Wilson Miller, Chair        decedent's taxable estate, but not
                             CLE Committee         part of the probate estate;

                                                                Page 7
                                                                                                                                XIS




                                         Calendar of Seminars and Events
• January 6-10, 1992 (Sponsored by                 • January 22-24, 1992 (Sponosred by          • January 31, 1992 (Sponsored by
  University of Miami, Law Center) The               ALI/ABA) Basic Estate and Gift               Northwestern School of Law and The
   26th Annual Institute of Estate                   Taxation and Planning, New Orleans,          Oregon Estate Planning Counsil) The
   Planning, Fontainebleau Hilton Resort &           Louisiana, Telephone: 1-800-CLE-NEWS         21st Annual Estate Planning
   Spa, Miami Beach, Florida, Telephone:                                                          Conference, Red Lion Inn at Lloyd
   (305) 284-4762                                  • January 26-28, 1992 (Sponsored by            Center, Portland, Oregon, Telephone:
                                                     Trusts and Estates) The 3rd Annual           768-6642
• January 10, 1992 )Sponsored by the                  Conference on Estate Planning and
  Oregon Society of CPAs) State and                   Administration, The Mark Hopkins, San     • February 20, 1992 (Sponsored by Oregon
  Local Tax Conference, Oregon                       Francisco, California, Telephone: Stacey     State Bar) Using Trusts in Estate
  Convention Center, Portland, Oregon,               Leigh Strickland (404) 256-9800              Planning, Red Lion Inn at Lloyd Center,
  Telephone: 641-7200 (in Oregon                                                                  Portland, Oregon, Telephone 620-0222
  1-800-255-1470                                   • January 27-30, 1992 (Sponsored by            ext. 326 (in Oregon 1-800-452-8260)
                                                     University of Southern California) The
• January 17, 1992 (Sponsored by Prentice
                                                     44th Annual Institute on Federal           • February 28, 1992 (Sponsored by
  Hall Law and Business) Estate Freezes              Taxation, Beverly Hilton, Beverly Hills,     Professional Education Systems, Inc)
                                                      California, Telephone: (213) 740-2582       Conference on Medicaid Law, (hotel to
  and Valuation Under Chapter 14, Parc
  Fifty Five, San Francisco, California,                                                          be announced) Portland, Oregon,
  Telephone: 1-800-223-0231                                                                       Telephone: 1-800-621-5336

• January 20-22, 1992 (Sponsored by                                                             • March 5-7, 1992 (Sponsored by
  ALI/ABA) Advanced Estate Planning                                                               ALI/ABA) Tax and Business Planning,
  Technics, Maui, Hawaii, Telephone:                                                              Scottsville, Arizona, Telephone:
  1-800-CLE-NEWS                                                                                  1-800-CLE-NEWS




                                                                                                                          BULK RATE
                                                                                                                          U.S. Postage
                                                                                                                              PAID
                        Oregon State Bar                                                                                Portland, Oregon
                        Estate Planning and Administration Section                                                       Permit No. 341
                        P.O. Box 1689
                        Lake Oswego, OR 97035-0889


Oregon Estate Planning and
Administration Section Newsletter

Daniel C. Re
Editor-in-Chief

Editorial Board
Laurie Caldwell-Lee
Richard W. Miller
Donna M. Mueleck
Helen Rives-Hendricks
Timothy R. Strader




                                                     Warren C. Deras
                                                     1400 SW Montgomery Street
                                                     Portland, OR 97201

				
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