10:71-3.7 Eligibility of beneficiaries who leave New Jersey
(a) Whenever a beneficiary wishes to leave New Jersey either to establish a permanent
residence or for a temporary visit, he or she shall be advised of the effect of this plan on his
or her eligibility for continued medical assistance. Particular care should be taken to advise
the beneficiary how to present his or her New Jersey Medicaid validation stub and instruct
the provider where to send the bill, should the beneficiary need medical care or
hospitalization while out of the State on an approved temporary visit.
(b) It shall be the policy of this State that if a beneficiary leaves New Jersey with intent to
establish a permanent residence elsewhere, or for an indefinite period for purposes other
than a temporary visit, or if he or she decides to remain indefinitely in the place outside New
Jersey to which he or she had gone for a temporary visit, he or she ceases to be eligible to
receive Medicaid.
(c) Visits by a beneficiary for a period of not more than 30 days will be permitted without
affecting the beneficiary's eligibility. Absence for longer periods of time must be approved by
the Division of Medical Assistance and Health Services.

10:71-3.6 Change of county residence
(a) Responsibility for case management shall be transferred from one county to the other
when a beneficiary moves to another county.
(b) A temporary visit by the beneficiary shall not be considered to be a change of county
residence until that visit has continued for more than a three month period.
1. Whenever it is determined that a beneficiary whose application has not been validated
has changed or is planning to change his or her residence from one county to another the
CBOSS of origin shall continue medical assistance while completing validation, subject to
the time limits set forth in the application process, then transfer the case without delay to the
receiving county in accordance with (b)2 below. If the CBOSS of origin is in the process of
obtaining medical records, it shall complete the process and forward the medical records to
the receiving county.
2. Whenever it is determined that a beneficiary whose application has been validated is
planning to change his or her residence from one county to another, it shall be the
responsibility of the CBOSS directors of the two counties concerned to effect the transfer
without interruption of medical assistance.
3. The county of origin shall initiate and the receiving county shall, on request, immediately
cooperate in accomplishing a full investigation of the circumstances surrounding the move.
4. If the move is permanent and the case warrants continued medical assistance, transfer
of the case shall be accomplished expeditiously by discontinuance of medical assistance in
the county of origin and award of medical assistance in the receiving county, to occur
simultaneously in the first month for which the CBOSS directors mutually so arranged.
5. The welfare of the client shall not be adversely affected and his or her right to
uninterrupted medical assistance if in need shall not be prejudiced by disagreement or other
administrative difficulty between the counties. Any adverse change in grant resulting from
transfer requires timely notice.
i. Since the Medicaid Only client retains the same Medicaid number when he or she
moves from one county to another, the county of origin shall not terminate the client from
the Medicaid status file, but only from its own register.
(c) The county of origin shall initiate and the receiving county shall, on request, immediately
undertake an investigation of the circumstances surrounding the move. If the move is
permanent, each county shall execute its respective responsibilities in accordance with (d)
and (e) below.
(d) Applicants: Applicants are those individuals applying for Medicaid in the county of origin
who move to the receiving county before the eligibility determination has been completed.
1. County of origin: The county of origin has the responsibility to:
i. Complete the eligibility determination process;
ii. Accrete the individual to the Medicaid Status File (MSF) with the correct effective date
of Medicaid eligibility and the new address (in the receiving county); and
iii. Within five working days of the eligibility determination, transfer the case record
material to the receiving county in accordance with (e)1i through iv below.
2. Receiving county: The receiving county has the responsibility to:
i. Communicate promptly with the client and/or the client's authorized representative upon
receipt of the case material to advise of the continued receipt of medical assistance; and
ii. Notify immediately in writing the county of origin of the date the case material was
received.
(e) Beneficiaries: Beneficiaries include all individuals determined eligible for Medicaid Only.
1. County of origin: The county of origin has the responsibility to:
i. Transfer, within five working days from the date it is notified of the actual move, a copy
of pertinent case material to the receiving county. Such material shall include, at a minimum,
a copy of the first application and most recent PA-1G form (including all verification), Social
Security numbers, the beneficiary's new address in the receiving county, and form PR-1
(formerly PA-3L), completed with the individual's circumstances current as of the month of
the transfer.
ii. Send with the above case material a cover letter specifying that the case is being
transferred and requesting written acknowledgment of receipt;
iii. Forward promptly to the receiving county copies of any other material mutually
identified as necessary for case administration; and
iv. Notify the receiving county if there will be a delay in providing any case material
described in (e)1i or iii above.
2. Receiving county: The receiving county has the responsibility to:
i. Communicate promptly with the client and/or the client's authorized representative when
case material is received. Such communication shall arrange for the client and/or the
client's authorized representative to make application within 10 working days of the contact
to ensure uninterrupted receipt of medical assistance;
ii. Notify immediately in writing the county of origin of the date the initial case material was
received;
iii. Determine eligibility for the individual. Identify and resolve questions of the eligibility
determination made by the county of origin and receiving county. Advise the county of
origin of any discrepancies in the eligibility determinations between the two counties;
iv. Certify eligibility for medical assistance (provided application to transfer has been
made) effective for the next month if the initial case material has been received before the
10th of the month;
v. Certify eligibility for medical assistance (provided application to transfer has been made)
for the second month after the month of receipt of initial case material when such material is
received on or after the 10th of the month;
vi. Update the Medicaid Status File (MSF), if necessary. If the individual is determined
eligible for Medicaid Only in the receiving county, there shall be no interruption of Medicaid
eligibility and no change to the MSF is necessary. If the individual is determined ineligible
for Medicaid Only in the receiving county, Medicaid eligibility shall be terminated, subject to
timely and adequate notice, and the individual deleted from the MSF; and
vii. Notify the county of origin of the date eligibility for medical assistance will begin or will
be terminated in the receiving county.
(f) Any case for which transfer procedures in (c) through (e) above are not begun within 30
days of the date of original referral, shall be promptly reported by the county of origin to the
Division of Medical Assistance and Health Services by letter, setting forth the pertinent
available facts. This does not mean that the actual transfer must be completed within 30
days, but rather that the procedures shall be commenced within that time.

10:71-3.5 Resident defined
(a) The term "resident" shall be interpreted to mean a person who is living in the State
voluntarily and not for a temporary purpose, that is, with no intention of presently removing
therefrom.
(b) County residence is not an eligibility requirement and relates only to identification of the
CBOSS charged by law with responsibility for the official receipts, registration, and
processing of applications. The CBOSS is responsible for institutionalized (including nursing
homes, intermediate care facilities, and sheltered boarding homes) applicants and
recipients within its county regardless of previous county of residence.

10:71-3.4 Residence requirement
An applicant for or beneficiary of Medicaid Only shall be a resident of the State of New
Jersey.

10:71-3.3 Citizenship; alien status-documentation requirements
(a) A person born in the United States is, by definition, a United States citizen. The United
States is defined as the Continental United States, Alaska, Hawaii, Puerto Rico, Guam, and
the Virgin Islands of the United States. Native-born persons of American Samoa and
Swain's Island are also regarded as citizens of the United States.
(b) Naturalized citizens are those persons upon whom United States citizenship is
conferred after birth. This may be accomplished through individual or collective
naturalization or, under certain conditions, citizenship may be derived from a naturalized
parent. Thus, a child(ren) of a naturalized parent(s) is automatically considered a
naturalized citizen(s). Women who themselves could be lawfully naturalized and, prior to
September 22, 1922, were married to citizens, or were married to aliens who became
citizens before that date, automatically became citizens. On and after that date, standard
immigration and naturalization service conditions have to be met before any person can
become a naturalized citizen.
1. A naturalized citizen, unless automatically naturalized as outlined above, should have
his/her naturalization certificate as proof of citizenship. If the applicant does not have this document, the county welfare board should contact the nearest Immigration and
Naturalization Service district office to verify that the applicant meets the requirements of a
naturalized citizen.
(c) The following aliens, if present in the United States prior to August 22, 1996, and if
otherwise meeting the eligibility criteria, are entitled to full Medicaid benefits:
1. An alien lawfully admitted for permanent residence;
2. A refugee admitted pursuant to section 207 of the Immigration and Nationality Act;
3. An asylee admitted pursuant to section 208 of the Immigration and Nationality Act;
4. An alien whose deportation has been withheld pursuant to section 243(h) of the
Immigration and Nationality Act;
5. An alien who has been granted parole for at least one year by the Immigration and
Naturalization Service pursuant to section 212(d)(5) of the Immigration and Nationality Act;
6. An alien who has been granted conditional entry pursuant to section 203(a)(7) of the
immigration law in effect prior to April 1, 1980;
7. An alien who is granted status as a Cuban or Haitian entrant pursuant to section 501(e)
of the Refugee Education Assistance Act of 1980;
8. An American Indian born in Canada to whom the provisions of section 289 of the
Immigration and Nationality Act apply;
9. A member of an Indian tribe as defined in section 4(e) of the Indian Self-Determination
and Education Assistance Act;
10. An alien who is admitted to the United States as an Amerasian immigrant pursuant to
section 584 of the Foreign Operations, Export Financing, and Related Programs
Appropriations Act of 1988;
11. An alien who is honorably discharged or who is on active duty in the United States
Armed Forces and his or her spouse and the unmarried dependent children of the alien or
spouse; and
12. Certain legal aliens who are victims of domestic violence and when there is a
substantial connection between the battery or cruelty suffered by an alien and his or her
need for Medicaid benefits, subject to certain conditions described below:
i. The alien has been battered or subjected to extreme cruelty in the United States by a
spouse or a parent;
ii. The alien has been battered or subjected to extreme cruelty in the United States by a
member of the spouse's or parent's family residing in the same household of the alien and
the spouse or parent acquiesced to such battery or cruelty;
iii. The alien's child has been battered or subjected to extreme cruelty in the United States
by the spouse or the parent of the alien (without the active participation of the alien in the
battery or cruelty);
iv. The alien's child has been battered or subjected to extreme cruelty in the United
States by a member of the spouse's or parent's family residing in the same household as
the alien and the spouse or parent acquiesced to and the alien did not actively take part in
such battery or cruelty;
v. In addition to the conditions described in (c)12i through iv above, if the individual
responsible for the battery or cruelty continues to reside in the same household as the
individual who was subjected to such battery or cruelty, then the alien shall be ineligible for full Medicaid benefits under this chapter;
vi. The county board of social services shall apply the definitions "battery" and "extreme
cruelty" and the standards for determining whether a substantial connection exists between
the battery or cruelty and the need for Medicaid as issued by the Attorney General of the
United States under his or her sole and unreviewable discretion, in accordance with 8
U.S.C. § 1641.
(d) The following aliens entering the United States on or after August 22, 1996, and if
otherwise meeting the eligibility criteria, are entitled to Medicaid benefits:
1. An alien lawfully admitted for permanent residence, but only after having been present
in the United States for five years;
2. A refugee admitted pursuant to section 207 of the Immigration and Nationality Act;
3. An asylee admitted pursuant to section 208 of the Immigration and Nationality Act;
4. An alien whose deportation has been withheld pursuant to section 243(h) of the
Immigration and Nationality Act;
5. An alien who has been granted parole for at least one year by the Immigration and
Naturalization Service pursuant to section 212(d)5 of the Immigration and Nationality Act,
but only after the alien has been present in the United States for five years;
6. An alien who has been granted conditional entry pursuant to section 203(a)(7) of the
immigration law in effect prior to April 1, 1980, but only after the alien has been present in
the United States for five years;
7. An alien who is granted status as a Cuban or Haitian entrant pursuant to section 501(e)
of the Refugee Education Assistance Act of 1980;
8. An American Indian born in Canada to whom the provisions of section 289 of the
Immigration and Nationality Act apply;
9. A member of an Indian tribe as defined in section 4(e) of the Indian Self-Determination
and Education Assistance Act;
10. An alien who is admitted to the United States as an Amerasian immigrant pursuant to
section 584 of the Foreign Operations, Export Financing, and Related Programs
Appropriations Act of 1988;
11. An alien who is honorably discharged or who is on active duty with the United States
Armed Forces and his or her spouse and the unmarried dependent children of the alien or
spouse; and
12. Certain aliens who are victims of domestic violence as specified in (c)12 above, but
only after the alien has been present in the United States for five years.
(e) Any alien who is not an eligible alien as specified in (c) and (d) above is ineligible for full
Medicaid benefits. Any such alien, if a resident of New Jersey and if he or she meets all
other Medicaid eligibility requirements, is entitled to Medicaid coverage for the treatment of
an emergency medical condition only.
1. An emergency medical condition is one of sudden onset that manifests itself by acute
symptoms of sufficient severity (including severe pain) such that the absence of immediate
medical attention could reasonably be expected to result in:
i. Placing the patient's health in serious jeopardy;
ii. Serious impairment to bodily functions; or
iii. Serious dysfunction of any bodily organ or part.
2. An emergency medical condition includes all labor and delivery for a pregnant woman.
It does not include routine prenatal or post-partum care.
3. Services related to an organ transplant procedure are not covered under services
available for treatment of an emergency medical condition.
(f) Persons claiming to be citizens and eligible aliens shall provide the county board of
social services with documentation of citizenship or alien status.
(g) As a condition of eligibility, all applicants for Medicaid (except for those applying solely
for services related to the treatment of an emergency medical condition) shall sign a
declaration under penalty of perjury that they are a citizen of the United States or an alien in
a satisfactory immigration status. In the case of a child or incompetent applicant, another
individual on the applicant's behalf shall complete the same written declaration under
penalty of perjury.
1. The following are acceptable documentation of United States citizenship:
i. A birth certificate;
ii. A religious record of birth recorded in the United States or its territories within three
months of birth. The document must show either the date of birth or the individual's age at
the time the record was created;
iii. A United States passport (not including limited passports which are issued for periods
of less than five years);
iv. A Report of Birth Abroad of a Citizen of the U.S. (Form FS-240);
v. A U.S. Citizen I.D. Card (INS Form-197, Nationality Certificate (INS Form N-550 or N-
570);
vi. A Certificate of Citizenship (INS Form N-560 or N-561);
vii. A Northern Mariana Identification Card (issued by the INS to a collectively naturalized
citizen of the United States who was born in the United States before November 3, 1986);
viii. An American Indian Card with a classification code "KIC" (issued by the INS to
identify U.S. citizen members of the Texas Band of Kickapoos); or
ix. A contemporaneous hospital record of birth in one of the 50 states, the District of
Columbia, Puerto Rico (on or after January 13, 1941), Guam (on or after April 10, 1899), the
U.S. Virgin Islands (on or after January 17, 1917), American Samoa, Swain's Island, or the
Northern Mariana Islands (unless the person was born to foreign diplomats residing in any
of these jurisdictions).
2. If an applicant presents an expired INS document or is unable to present any document
demonstrating his or her immigration status, the county board of social services shall refer
the applicant to the local INS district office to obtain evidence of status. If, however, the
applicant provides an alien registration number, but no documentation, the county board of
social services shall file INS Form G-845 along with the alien registration number with the
local INS district office to verify status.
3. The following sets forth acceptable documentation for eligible aliens:
i. Lawful Permanent Resident--INS Form I-551, or for recent arrivals, a temporary I-551
stamp in a foreign passport or on Form I-94.
ii. Refugee--INS Form I-94 annotated with stamp showing entry as refugee under section
207 of the Immigration and Nationality Act and date of entry into the United States; INS
Form I-688B annotated "274a. 12(a)(3)," I-766 annotated "A3," or I-571. Refugees usually
adjust to Lawful Permanent Resident status after 12 months in the United States, but for
purposes of determining Medicaid eligibility they are considered refugees. Refugees whose
status has been adjusted will have INS Form I-551 annotated "RE-6," "RE-7," "RE-8," or
"RE-9."
iii. Asylees--INS Form I-94 annotated with a stamp showing grant of asylum under section
208 of the Immigration and Nationality Act, a grant letter from the Asylum Office of the
Immigration and Naturalization Service, Forms 688B annotated "274a. 12(a)(5)," or I-766
annotated "A5."
iv. Deportation Withheld--Order of an Immigration Judge showing deportation withheld
under section 243(h) of the Immigration and Nationality Act and the date of the grant, or INS
Form I-688B annotated "274a. 12(a)(10)" or I-766 annotated "A10."
v. Parole for at Least a Year--INS Form I-94 annotated with stamp showing grant of
parole under section 212(d)(5) of the Immigration and Nationality Act and a date showing
granting of parole for at least a year.
vi. Conditional Entry under Law in Effect before April 1, 1980--INS Form I- 94 with stamp
showing admission under section 203(a)(7) of the Immigration and Nationality Act, refugeeconditional
entry, or INS Forms I-688B annotated "274a. 12(a)(3)" or I-766 annotated "A3."
vii. Cuban Haitian Entrant--INS Form I-94 stamped "Cuban/Haitian Entrant under section
212(d)(5) of the INA."
viii. An American Indian born in Canada--INS Form I-551 with code S13 or an unexpired
temporary I-551 stamp (with code S13) in a Canadian passport or on Form I-94.
ix. A member of certain Federally recognized Indian tribes--Membership card or other
tribal document showing membership in tribe is acceptable documentation.
x. Amerasian Immigrant--INS Form I-551 with the code AM1, AM2, or AM3 or passport
stamped with an unexpired temporary I-551 showing a code AN6, AM7, or AM8.
4. For aliens subject to the five-year waiting period before eligibility for Medicaid can be
established, the date of entry into the United States shall be determined as follows:
i. On INS Form I-94, the date of admission should be found on the refugee stamp. If
missing, the county board of social services should contact the INS local district office by
filing Form G-845, attaching a copy of the document;
ii. If the alien presents INS Form I-688B (Employment Authorization Document), I-766, or
I-571 (Refugee Travel Document), the county board of social services shall ask the alien to
present Form I-94. If that form is not available, the county board of social services shall
contact the INS via the submission of Form G-845, attaching a copy of the documentation
presented;
iii. If the alien presents a grant letter or court order, the date of entry shall be derived from
the date of the letter or court order. If missing, the county board of social services shall
contact the INS by submitting a Form G- 845, attaching a copy of the document presented.
5. For aliens who present themselves as on active duty or honorably discharged from the
United States Armed Forces, the following serve as documentation:
i. For discharge status, an original or notarized copy of the veteran's discharge papers
issued by the branch of service in which the applicant was a member;
ii. For active duty military status, an original or notarized copy, of the applicant's current orders showing the individual is on full-time duty with the U.S. Army, Navy, Air Force,
Marine Corps, or Coast Guard (full-time National Guard duty does not qualify), or a military
identification card (DD Form 2 (active));
iii. A self-declaration under penalty of perjury may be accepted pending receipt of
acceptable documentation.

10:71-3.2 Citizenship; requirements
(a) The applicant must be a resident of the United States who is either a citizen or an alien
who can be classified as an eligible alien in accordance with this subchapter.
1. An individual who cannot be classified as an eligible alien in accordance with this
subchapter due to changes mandated by the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 (Public Law 104-193) but who was residing in a Medicaidcertified
nursing facility prior to January 29, 1997, will continue to be eligible for medical
assistance until the individual is no longer eligible for long-term care services.

10:71-3.1 General provisions
(a) Eligibility must be established in relation to each legal requirement to provide a valid
basis for granting or denying medical assistance.
(b) The applicant's statements regarding his/her eligibility, as set forth in the application
form, are evidence. The statements must be consistent and meet prudent tests of
credibility. Incomplete or questionable statements shall be supplemented and substantiated
by corroborative evidence from other pertinent sources, either documentary or
nondocumentary:
1. Documentary sources of evidence present factual information recorded at some
previous date by a disinterested party and filed as part of a record. Examples: certificates,
legal papers, insurance policies, licenses, bills, receipts, notices of RSDI benefits, and so
forth.
2. Nondocumentary sources of evidence are factual oral statements which appear to be
reliable by individuals, based on the observation and personal knowledge of applicant's
circumstances.

10:71-2.16 Retroactive eligibility for Medicaid
(a) All applicants for Medicaid Only shall be queried as to whether or not they have
outstanding unpaid medical bills incurred within the three month period prior to the month of
application for Medicaid Only. Those indicating the existence of such bills are to be supplied
with an "Application for payment of unpaid medical bills," form FD-74, for completion. The
intake worker will be responsible for assisting the applicant, where necessary, in the
interpretation and completion of the application form (regardless of whether the individual is
eventually determined to be eligible for Medicaid). The intake worker will not be responsible
for making a financial determination of eligibility for the three-month period in question.
(b) The applicant shall attach all outstanding unpaid medical bills to the FD- 74 form and
forward it to the:
Division of Medical Assistance and Health Services
Retroactive Eligibility Unit
PO Box 712 Mail Code 10
Trenton, NJ 08625-0712
(c) For individuals who are incapable of acting on their own behalf, an authorized agent can
make application for retroactive Medicaid eligibility when there are outstanding medical bills.
Such persons, at the time of application, should be provided with a form FD-74 for
completion and submission to the retroactive eligibility unit with the unpaid medical bills
attached.
(d) In the case of an individual who is deceased, an authorized agent, as defined above,
may make application for retroactive Medicaid eligibility by obtaining an application form FD-
74 from either the county welfare board or the Medicaid District Office.

10:71-2.15 Notice of agency decision
Designation of personnel responsible for preparation of decision notices shall be at the
discretion of the agency.

10:71-2.14 Disposition of application
(a) It is the intent of State law and policy that the normal method for disposing of
applications recommended for approval shall be by the authority vested in the director of
welfare to make decisions on eligibility for Medicaid Only. The director of welfare has the
same authority to make case decisions other than approvals.
(b) The director may delegate such authority to any staff member or members as he/she
may determine. He/she shall exercise this right of delegation in such a way as to assure the
available at all times of some staff member possessing the requisite authority to make
decisions and to authorize payment by the Division of Medical Assistance and Health
Services.
(c) Applications which may be held for the welfare board are:
1. Those where immediate medical need is not indicated; or
2. Those where the director believes that there is valid cause to question the available
evidence on any point of eligibility, or where the case presents a special problem;
3. If so held, the application shall be identified in the narrative portion of the minutes, and
in each instance shall include a brief statement of the question or special problem involved
and the decision of the board.

10:71-2.13 Supervisory review and approval
(a) In most cases an eligibility worker will complete the investigation and processing of the
application.
(b) All records shall be reviewed by a supervisory staff member prior to final disposition.
(c) Any difference of opinion between worker and supervisor shall be resolved by a
conference, and, if necessary, the issue shall be referred to a higher administrative level for
disposition.
(d) All records of application shall be approved in writing by the supervisor following review,
either by signature or initialed transcript signature.

10:71-2.12 Recommendation for agency decision
The eligibility worker is initially responsible for the recommendation for approval or denial.
The eligibility worker will complete the work sheet and authorization for medical assistance
PR-1 and a copy will be sent to the Medicaid unit for preparation of the MAP-1. The
statement of income available for nursing home payment PR-1 (formerly PA-3L) will be
completed in appropriate cases.

10:71-2.11 Case recording
All pertinent information relating to the eligible applicant shall be recorded.

10:71-2.10 Collateral investigation
(a) "Collateral investigation" shall refer to contacts with individuals other than members of
applicant's immediate household, made with the knowledge and consent of the applicant(s).
(b) The primary purpose of collateral contacts is to verify, supplement or clarify essential
information.
(c) The applicants will usually be able to help select the most likely sources of information
about themselves. If they are unwilling to have the necessary inquiries made and are unwilling to secure the required information from such sources themselves, then it shall be
explained that the CBOSS will be unable to certify entitlement to Medicaid Only.

10:71-2.9 Process of establishing eligibility
The process of establishing eligibility involves a review of the application for completeness,
consistency, and reasonableness. A personal face to face interview with the applicant or
his/her authorized agent is required.

10:71-2.8 Assignment of pending application for completion of eligibility
determination
Each CBOSS shall provide a method to assure assignment of pending application to a
worker within three working days and establish a follow-up tickler system.

10:71-2.7 Reports to the Commission for the Blind and Visually Impaired under
specified circumstances
By law, the CBOSS is required to report to the Commission for the Blind and Visually
Impaired, every individual coming to its attention who is known to be, or who is believed
likely to become, permanently blind. The permanent information shall be registered with the
Commission in the prescribed form.

10:71-2.6 Registration procedures and record of inquiries
(a) Official registration of an application consists of the following steps:
1. Entry in application register under appropriate classification as new, reapplication,
reopened application or transfer;
2. Assignment of case control number (registration number) to a new application, or
reassignment of previous number to a reapplication or reopened application;
3. Preparation of appropriate form PA-9, registration card.
(b) So far as possible, registration shall be completed on the same day that application for
assistance is made. If the application is made outside the CBOSS office, registration shall
be completed within three working days.
(c) An inquiry is any request for information about assistance programs which is not a
request for an application. A record is necessary only when the inquiry requires follow-up
action.
(d) The Institutional Services Section makes Medicaid Only referrals for adults
contemplating discharge from specific state and county institutions. These cases are to be
registered within two working days.

10:71-2.5 Application policy and procedure
(a) Application for Medicaid Only may be taken by the CBOSS where the applicant resides
or is institutionalized at the time of making application.
(b) A legally appointed guardian shall always be recognized as an authorized agent to
initiate an application to establish eligibility for Medicaid Only.
(c) In Medicaid Only, an individual who wishes to apply may be confined at home or at an
institution, or may be subject to a critical illness or injury which impedes action on his or her
own behalf. Consequently, the CBOSS shall accept any one of the following, in order of
priority as listed, as an authorized agent for the purpose of initiating an application:
1. A relative by blood or marriage;
2. A staff member of a public or private welfare agency of which the person is a client, who
has been designated by the agency to so act;
3. A physician or attorney of whom the person is respectively a patient or client;
4. A staff member of an institution or facility in which a person is receiving care, who has
been designated by the institutional facility to so act

10:71-2.4 Intake policy and procedure
(a) "Intake" is a term applied to the CBOSS's activities in relation to requests for information
pertaining to or requests for Medicaid Only.
(b) When a client or a representative of a client inquires, for Medicaid Only, an appointment
for an interview with the client shall be arranged promptly. Such inquiries shall be recorded
as inquiries unless and until there is an interview which results in a decision to make
application for assistance.
(c) When the inquiry is by letter or telephone, an appointment, if requested, shall be
arranged promptly. An application for Medicaid Only is not to be taken if applicant plans to
or has applied for SSI.
(d) All inquiries and referrals shall be cleared with the State Data Exchange (SDX) and any
previous information on file shall be made available to the worker for the initial interview.

10:71-2.3 Policy and procedure on prompt disposition
(a) The maximum period of time normally essential to process an application for the aged is
30 days; for the disabled or blind, 60 days.
(b) "Date of effective disposition" based upon either administrative or board action means:
1. In the case of an approved application, the effective date of the application. (Either the
date of application, or the date of form PA-1C, whichever is earlier);
2. In the case of a denied application, the date on which written notification informing the
applicant of his or her lack of eligibility and the reason therefor is sent to him or her;
3. In the case of a withdrawn application, the date on which written notification confirming
to the client that the agency has taken cognizance of his or her voluntary withdrawal is sent
to him or her; or
4. In the case of a dismissed application, the date on which written notification informing
the applicant of the dismissal and the reasons therefor is sent to him or her.
(c) It is recognized that there will be exceptional cases where the proper processing of an
application cannot be completed within the 30/60 day period. Where substantially reliable
evidence of eligibility is still lacking at the end of the designated period, the application may
be continued in pending status. In each such case, the CBOSS shall be prepared to
demonstrate that the delay resulted from one of the following:
1. Circumstances wholly within the applicant's control; or
2. A determination to afford the applicant, whose proof of eligibility has been inconclusive,
a further opportunity to develop additional evidence of eligibility before final action on his or
her application; or
3. An administrative or other emergency that could not reasonably have been avoided; or
4. Circumstances wholly outside the control of both the applicant and CBOSS.
(d) When the complete processing of an application is delayed beyond 30 days for the
aged or 60 days for the blind or disabled, written notification shall be sent to the applicant on
or before the expiration of such period, setting forth the specific reasons for delay.
(e) Each county director of welfare shall arrange operational procedures and establish appropriate operational controls within his or her staff organization to expedite the
processing of applications and assure the maximum possible compliance with these
standards.
(f) Control records on the exceptional cases shall disclose at any time the identity of all
applications which have been in pending status beyond normal limits for processing and the
reason therefore. Such record shall be adequate to make possible the preparation of a
report of such information at any time it might be requested by the CBOSS or the Division of
Medical Assistance and Health Services.

10:71-2.2 Responsibilities in the application process
(a) The Division of Medical Assistance and Health Services is the administrative unit of the
Department of Human Services responsible for coordinating the administration of Medicaid
Only with the Supplemental Security Income program. This Division provides for payment of
claims for, and evaluation of health services rendered under, Medicaid Only; maintains
administrative liaison with other departmental divisions; and provides professional, medical
and paramedical staff which is advisory to this Division in all matters of health care relevant
to the administration of Medicaid Only. This Division contracts with CBOSSs for
reimbursement of costs of administering the Medicaid Only program.
(b) The Division of Medical Assistance and Health Services and the Commissioner of the
Department of Human Services shall establish policy and procedures for the application
process and supervise the operation of and compliance with the policy and procedures so
established.
(c) The CBOSS exercises direct responsibility in the application process to:
1. Inform the applicants about the purpose and eligibility requirements for Medicaid Only,
inform them of their rights and responsibilities under its provisions and inform applicants of
their right to a fair hearing;
2. Receive applications;
3. Assist the applicants in exploring their eligibility for assistance;
4. Make known to the applicants the appropriate resources and services both within the agency and the community, and, if necessary, assist in their use;
5. Assure the prompt and accurate submission of eligibility data to the Medicaid status files
for eligible persons and prompt notification to ineligible persons of the reason(s) for their
ineligibility;
6. The CBOSSs shall also provide supportive social services which will enhance cure and
rehabilitation of beneficiaries of Medicaid Only.
(d) As a participant in the application process, an applicant shall:
1. Complete, with assistance from the CBOSS if needed, any forms required by the
CBOSS as a part of the application process;
2. Assist the CBOSS in securing evidence that corroborates his/her statements;
3. Report promptly any change affecting his or her circumstances

10:71-2.1 Definitions
The following words and terms, when used in this chapter, shall have the following
meanings unless the context clearly indicates otherwise:
"Application process" means all activity performed by the Income Maintenance Section
relating to a request for medical assistance payments. The application process is primarily
geared toward the determination of basic eligibility. However, since intake by its very nature
involves a combination of services and income maintenance functions, a service worker
shall be available as required during such process.
"Applicant," in Medicaid Only, means the aged, disabled or blind individual or his/her
authorized agent who executes the formal written application (PA- 1G).
"Approved" means that the applicant has been determined to be eligible for Medicaid Only.
"CBOSS" means county board of social services.
"Disposition of the application" means the official determination of the CBOSS that one of
the following actions is appropriate: approval or rejection as defined in the section.
"MRT" means Medical Review Team.
"New application" means a written request for assistance from an individual or his/her
agent who has never previously requested assistance in any county in the State under the
Medicaid Only program.
"Pending application" means the general term for application, reapplication, reopened
application or transfer application prior to official disposition.
"Poverty guidelines" means, with respect to a household, the income poverty line as
prescribed and revised at least annually pursuant to 42 U.S.C. § 9902(2). The poverty
guidelines are a simplified version of the Federal Government's statistical poverty thresholds
used by the Census Bureau to prepare its statistical estimates of the number of persons and
families in poverty. The poverty guidelines issued by the Department of Health and Human
Services pursuant to 42 U.S.C. § 9902(2) are used for administrative purposes, for example,
for determining whether a person or family is financially eligible for assistance or services
under a particular Federal program.
"Reapplication" means a written request for assistance by the individual whose previous
application was rejected in any county in the State and who requests reconsideration of
his/her current eligibility for Medicaid Only.
"Registration" means the action of the CBOSS in assigning a control number to an
application.
"Rejected" is an inclusive term (for statistical purposes) for the following actions:
1. Denied means that the applicant has been determined to be ineligible for assistance for
a specific reason.
2. Dismissed means official recognition that eligibility need not be considered further
because:
i. The applicant died (however, if there were unpaid medical bills incurred subsequent to
inquiry or application, whichever occurred first, the application process is to be completed);
or
ii. The applicant cannot be located; or
iii. The application was registered in error; or
iv. The applicant moved to another county in New Jersey during the application process.
3. Withdrawn means that the applicant decided not to pursue the application further.
"Reopened application" means a written request by a former beneficiary in any county in
the State for reconsideration of his or her current eligibility for the program.
"Transfer application" means a written request for assistance by the individual who at the
time of registration is still receiving assistance through the CBOSS of another county from
which he or she moved.

10:71-1.11 Availability of chapter
(a) A current up-to-date copy of the chapter or any part of it is available from the Division of
Medical Assistance and Health Services at the cost of printing and mailing to anyone who
requests it in writing.
(b) All public and university libraries which have agreed to keep the chapter up-to-date will
have a copy available under their regulations.
(c) Each legal services office will be furnished with a copy of this chapter free of charge.
(d) Welfare, social service and other non-profit organizations will be furnished with a copy
of the chapter at no cost by an official written request to the Division of Medical Assistance
and Health Services.
(e) All supplementary State policy directives will routinely be sent to those who have been
supplied with the chapter. A mailing list will be maintained by the Division.

10:71-1.10 Revisions of the chapter
The Division of Medical Assistance and Health Services shall issue revisions and changes
to this chapter as necessary. It is the responsibility of each holder of the chapter to maintain
its accuracy by inserting new material and removing obsolete pages promptly.

10:71-1.9 Providing chapter material in adverse action situations
Specific chapter material necessary for an applicant or beneficiary or his or her
representative to determine whether a hearing should be requested or to prepare for a
hearing shall be provided to such persons without charge.

10:71-1.8 County board of social services responsibility; chapter
The director of the CBOSS shall assign copies of this chapter to staff members as
appropriate and shall ensure that such persons are thoroughly familiar with its contents,
apply the required policy and procedures correctly, and keep up- to-date on all policy changes.

10:71-1.6 Basic principles of administration
(a) The following principles of administration shall apply to the Medicaid Only program.
1. Any aged, blind or disabled person who believes he/she is eligible shall be assured an
opportunity to make application (including reapplication) for Medicaid Only by completing
the appropriate application form.
2. The applicants or beneficiaries are the primary source of information. However, it is the
responsibility of the agency to make the determination of eligibility and to use secondary
sources when necessary, with the applicant's knowledge and consent.
3. No duplication of assistance: No beneficiary of Medicaid Only shall receive, during the
same period, any other medical assistance from the State or any political subdivision thereof
with respect to any maintenance requirements or other need for which allowance is made in
the Medicaid Only program (see N.J.A.C. 10:71-3.14 regarding inmates of correctional
institutions). The food stamp program is not considered a duplication of public assistance.
4. There shall be strict adherence to law and complete conformity with administrative
policies. Requirements other than those established by law or regulations shall not be
imposed on any person as a condition of receiving medical assistance.
5. The applicants or beneficiaries shall have the right to request appeal on the action or
inaction of the agency whenever they believe that they have not been given full
consideration under the law. A fair hearing shall be conducted by an impartial official of the
Department of Human Services in accordance with prescribed procedure when:
i. An application for Medicaid Only is denied;
ii. An application for Medicaid Only is not acted upon by the county welfare board within
30 days for the aged and 60 for the disabled or blind; or
iii. Medicaid Only is terminated.
6. Information about applicants and beneficiaries and their circumstances shall not be
disclosed except as required for the proper and efficient administration of the program and
only to those agencies involved in the lawful administration or operation of public welfare
functions or services.
7. There shall be no discrimination on grounds of race, color, religion, sex, national origin
or marital, parental or birth status by state or local agencies in the administration of any
public assistance program.
10:71-1.7 Examination or review of chapter
This chapter is a public document. Copies are available in the State office of the Division of
Medical Assistance and Health Services and in each CBOSS office for examination or
review during regular office hours on regular work days.

10:71-1.5 Administrative organization
The Medicaid Only program is administered by the county boards of social services
(CBOSS) of the State of New Jersey through the Division of Medical Assistance and Health
Services in the Department of Human Services. The CBOSSs contract with the Division of
Medical Assistance and Health Services for the purpose of providing Medicaid Only benefits
to eligible persons.

10:71-1.4 Information on the chapter
This chapter sets forth the policies and procedures necessary for the orderly and equitable
administration of the Medicaid Only program as it relates to the aged, blind and disabled. It
is a statement of policy and procedures separate from all other assistance programs, and is
applicable to "Medicaid Only." The criteria for determination of eligibility are based on SSI
policy and procedure which do not necessarily coincide with standards for other public
assistance programs and therefore require separate instructions.

10:71-1.3 Living arrangements
(a) Aged, blind and disabled persons who are living in the community and meet the
requirements of the SSI program may receive Medicaid Only.
(b) Aged, blind and disabled persons who are receiving care in an eligible medical
institution and, because of income or resources, do not qualify for SSI may be eligible for
Medicaid Only.

10:71-1.2 Choice of program by applicant
(a) An aged, blind or disabled person who desires Medicaid and does not wish to receive a
money payment may apply for the Medicaid Only program. To qualify for this program,
he/she must have financial eligibility as determined by the regulations and procedures set
forth in this chapter.

(b) Persons who are neither aged, blind nor disabled qualify for Medicaid benefits when
they are determined by the county board of social services to be eligible for AFDC-related
Medicaid program. Persons whose eligibility is thus established may choose to receive
Medicaid Only benefits without accepting money payments. Regulations governing these
programs are set forth in the AFDC- related Medicaid chapter (N.J.A.C. 10:69).

10:71-1.1 General introduction
On January 1, 1974, Title XVI of the Social Security Act replaced previous Titles I (Old Age
Assistance), X (Aid to the Blind) and XIV (Aid to the Disabled), which were repealed. The
Social Security Administration administers Title XVI, Supplemental Security Income (SSI),
which provides cash payments to the aged, blind and disabled. Individuals who desire
medical care only apply through the county board of social services for the Medicaid Only
program under Title XIX.

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Kenneth Vercammen named Super Lawyer for 2009
ABOUT SUPER LAWYERS
Super Lawyers is a listing of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement.
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SUPER LAWYERS SELECTION PROCESS
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Will drafted after person deem incapacitated are invalid

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3743-06T23743-06T2

IN THE MATTER OF HARRY

SABLE, AN INCAPACITATED

PERSON,

MICHAEL SABLE,

Plaintiff-Respondent,

v.

BARRY SABLE,

Defendant-Appellant.



Submitted May 19, 2008 - Decided

Before Judges Stern, A. A. Rodr�guez and

Collester.

On appeal from Superior Court of New Jersey,

Chancery Division, Camden County, CP-03-05.

Fox Rothschild, attorneys for appellant

(Jeffrey M. Pollock, of counsel; Mr. Pollock

and Mukti N. Patel, on the brief).

Flaster Greenberg, attorneys for respondent

(Kenneth S. Goodkind and Vincent J. Nolan, III,

on the brief).

PER CURIAM

This appeal pits brother against brother over control of the personal estate and estate plan of their incapacitated octogenarian father.

Harry and Jean Sable were married for many years and resided at their condominium in Cherry Hill. They were the parents of three adult sons, plaintiff Michael Sable, defendant Barry Sable and Don, the middle son. Harry and two partners owned the LeGar building in Philadelphia where Harry conducted his jewelry business, advertising himself as the "King of Wedding Bands."

Harry and Jean had wills prepared by John Lolio, Esq., their personal attorney, to provide for each other and their three sons. Lolio prepared wills for Harry in 1994 and in 1998, with similar provisions. Harry left his entire estate to Jean if she survived him. If she did not survive him, Michael was to inherit the condominium and Harry's interest in the LeGar building; Barry was to receive property at 735 Sansom Street in Philadelphia, held in his name and Harry's name; and Don was to inherit the inventory of Harry Sable, Inc. Stocks and bonds were to be divided equally among the three brothers.

In addition to the wills, Lolio prepared in 1999 a financial power of attorney (POA) for Harry which named Barry as successor to Jean. In December 1999, Lolio prepared a health care POA for Harry which named Michael as successor to Jean. Jean also had a health care POA and, in 1999, she substituted Michael for Harry because of Harry's diminished capacity.

In 1999, the family started to notice Harry exhibiting symptoms of dementia. Although he still worked until late 1999, he became more confused and forgetful. In 2000, Harry was diagnosed with Alzheimer's by Dr. Cook at Pennsylvania Hospital and placed on medication. On February 26, 2001, Dr. Raphael, Harry's primary care doctor, said that Harry was not fully coherent and unable to care for himself or run his business. In July 2001, Dr. Barry Rovner examined Harry for memory problems and hallucinations, and he scored eighteen on the mini-mental exam, a widely used screening tool for assessing cognitive impairment. Harry was examined by Rovner again in July 2002 and scored fourteen on the mini-mental.
After Harry's dementia became apparent, Jean handled the family finances until she suffered a severe stroke in June 2002. At this time, Barry lived in Marlton, Don in Elkins Park, Pennsylvania, and Michael in Los Angeles, California. The following month, the three brothers met with Earl Morgenstern, their parents' accountant, and Lolio, the attorney, to determine how to pay for their parents' care. In the course of that meeting Morgenstern, the co-executor of the parents' estates, discussed estate plans with the brothers. In August 2002, Lolio sent the brothers a letter enclosing copies of the parents' wills and stating:

At the request of Harry Sable, Don Sable and Michael Sable, (the children of Harry Sable) and after receiving the medical evaluations of each parent, I am faxing a copy of your father's and mother's respective Wills dated February 4, 1998. It is my understanding that Earl Morganstern, CPA, who is the substitute Executor of each Will has already discussed the provisions and terms of the Will with each of you at a separate meeting held shortly after our initial meeting. Based on the medical evaluation of each parent, it is apparent that no changes can be made to their wills due to their mental impairments.

Barry and Don met with caregivers, as well as other attorneys and accountants regarding their parents' care, estate and financial planning. Don said neither Jean nor Harry were consulted because the brothers knew their parents "were unquestionably mentally incompetent, my father due to his Alzheimer's and to the degree to which it had progressed and my mother due to the dementia caused by her stroke."

On November 19, 2002, Harry was examined by a neurologist, Dr. Brad J. Tinkelman, who found him disoriented and suffering from dementia, which he suspected was due to Alzheimer's. In March 2003 Harry was again examined by Dr. Rovner. This time he scored a nine on the mini-mental.

Things came to a head in August 2003, when Harry and Jean were at the New Jersey shore with two caretakers and Harry attacked Jean and a caregiver. The police were called and Harry was briefly jailed and involuntarily committed to the Carrier Clinic. Dr. Franco, the treating psychiatrist, said Harry was at times incoherent and dependent on others for basic needs. On September 3, 2003, he was examined by Dr. Ehab Tuppo at the Center for Aging of UMDNJ and was diagnosed with severe dementia. Dr. Tuppo reported Harry scored three on the mini-mental, but he was capable of eating and walking independently.

Meanwhile, also in September 2003, Jean was admitted to Cooper Hospital. Upon her discharge, Michael arranged for her placement at the Jewish Geriatric Home, a nursing home in Cherry Hill, where she remained until her death on January 21, 2005. Both Harry and Barry were upset at Jean's placement at the nursing home. Barry was angry he was not consulted, and Harry wanted Jean to come home. On two occasions Barry attempted to take Jean out of the nursing home, and the police were called.

A geriatric psychiatrist examined Harry on October 1, 2003, found him disoriented as to time and place and lacking understanding as to why Jean was in the nursing home.

Both Harry and Barry continued to press for Jean's discharge from the nursing home despite Michael's claim that she wished to remain. Finally, in October 2003 suit was filed by Michael Kouvatas, Esq., on behalf of Barry and Harry as co-plaintiffs against Michael and the nursing home to compel Jean's release and for appointment of Harry as Jean's guardian. The lawsuit was subsequently dismissed after Jean's death.

Also in October 2003, Barry took his father to Lolio's office for the purpose of changing Harry's will. After meeting with Harry alone, Lolio said Harry was not competent, and he refused to change the will. Lolio later testified that:

[Harry] was not competent to understand what I was saying, he didn't know where he was, didn't know the day of the week, didn't know the month, didn't know who the President was, just didn't have a general understanding of anything at that point in time. So I basically refused to continue

. . . preparing any new documents for Harry because I felt and believed that he wasn't competent enough to understand what he was doing.

Five days later on October 8, 2003, Harry was examined at his home by Dr. Murray H. Moliken, a doctor of geriatric medicine. The examination was videotaped, and the transcript indicates that Harry had difficulty answering, without assistance, many of Moliken's questions. Dr. Moliken did not review Harry's prior medical records, stating that he did not want other opinions to influence him. He was also not aware that Harry had been involuntarily admitted to Carrier Clinic in August 2003, or that Harry had been diagnosed with Alzheimer's.

Dr. Moliken said his questions to Harry were based on information obtained from Barry, Harry's caregiver, and attorney Kouvatas. He said he did not believe that Harry was capable of providing the necessary information for the examination. Dr. Moliken believed it was rational for Harry to be upset that Jean was in the nursing home. He concluded that Harry was mentally impaired to some extent but that he understood what he wanted for his wife and how his assets should be distributed. Dr. Moliken later testified to his opinion that Harry had testamentary capacity when he examined him in October 2003.

After Dr. Moliken's examination, Barry called Kouvatas and told him that Harry wanted to draft estate planning documents. On October 24, 2003, Harry revoked his health care POA naming Michael, and signed a new health care POA naming Barry with no alternate. Kouvatas also prepared a new will for Harry which made no disposition for Jean, although she was still living at that time, and left the entire estate to Barry. After Harry expressed some concern over the dispositions, Kouvatas prepared another will in November 2003 which provided that Harry's entire estate should go to Jean in trust if she survived him, and the remainder to Barry. The will also provided that if Jean predeceased Harry, the estate was to be divided with Barry receiving seventy-five percent and Don the remaining twenty-five percent. There was no disposition for Michael. Harry signed the will, witnessed by two attorneys, and executed another financial POA in favor of Barry granting him even broader powers over Harry's finances than the prior POA.

In January 2005, Michael filed a complaint, later amended, to have Harry declared incapacitated, to remove Barry as Harry's guardian, to appoint a new guardian, to void POAs and any will executed by Harry after October 1, 2003, due to Harry's incapacity and Barry's undue influence, and for costs and attorney fees. Barry filed an answer and counterclaim to be named guardian of Harry's person and property. On March 21, 2005, Judge Vogelson held a pretrial hearing following which he determined that Harry was incapacitated, and appointed a temporary guardian for his person. Subsequently, on March 20, 2006, the court granted Michael's motion and appointed a permanent care manager for Harry after removing Barry as guardian over Harry's property on grounds he had mismanaged the accounts and used Harry's assets for personal gain. Martin Abo, CPA, was appointed as a temporary guardian over Harry's property, and he directed Barry to provide him with financial records to review transactions of Harry's assets after October 1, 2003.

The trial began in May 2006 and continued over several trial days. Since there was no dispute that Harry was incapacitated, the central issue was whether he was incapacitated and lacked testamentary capacity when he executed the will and other documents in October and November 2003.

Michael presented the testimony of Dr. Jeffrey M. Kargman, who was qualified as an expert in geriatric psychiatry. Dr. Kargman reviewed reports of various physicians who had examined Harry dating back to 2001, all of which stated Harry suffered from dementia. He conducted a clinical interview of Harry, reviewed the discovery and discussed the matter with doctors at Carrier Clinic as well as Dr. Moliken. He concluded that Harry suffered from dementia, Alzheimer's type, since at least 2001 and opined that, as of October 1, 2003, Harry did not have the capacity to execute a will and related documents. He found that Harry did not understand his own financial status at that time and did not have the capacity to understand concepts necessary to knowingly execute a will such as a trust. Moreover, he found that Harry was very susceptible to Barry's influence.

Don Sable testified that Barry restricted Harry's access to his other sons and instructed his caregiver not to permit Harry to meet with them alone. Other witnesses testified to examples of Barry bullying Harry and pressuring him to speak in accordance with Barry's instructions.

Evidence was also presented of Barry's misapplication and misappropriation of Harry's assets. Barry was also unable to document how he had spent significant amounts of his father's money. He conceded that he had borrowed $78,000 without any documentation showing that it was paid back as he claimed. He moved all the inventory from his father's store to his own business, claming it was for reasons of security. He also removed jewelry and cash worth about $30,000 from a safe deposit box, most of which he never returned. In August 2004, he used his POA to deed 735 Sansom Street, which had been held in his name and Harry's, to himself alone, claiming Harry's name was only on the deed because Harry had originally lent him the down payment, which he repaid. He said he paid $254,176 in legal bills on behalf of his father but could only document about $60,000. Moreover, he lost a check for $35,000, and that created a cash flow problem that he solved by withdrawing $30,000 of Harry's IRA assets, resulting in an unnecessary tax liability.

On December 14, 2006 after testimony had concluded, Judge Vogelson issued a lengthy oral opinion setting forth his findings and legal conclusions. He found the testimony of Michael's witnesses to be credible. He accepted Dr. Kargman's opinion that Harry suffered from dementia Alzheimer's type dating back to at least 2000, that his cognitive dysfunction worsened over succeeding years so that he did not have the mental capacity in 2003 to execute a last will and testament or power of attorney, and that could be easily controlled or manipulated by Barry. He found that attorney Lolio and CPA Morgenstern were credible in their judgments that both Jean and Harry were so mentally incapacitated that they could not modify their wills or execute other estate planning documents. He further found credible Lolio's recollection of the incident when Barry brought Harry to his office for the purpose of changing his will and Lolio's refusal to do so after meeting alone with Harry and determining that Harry lacked the mental and legal capacity to do so. Judge Vogelman noted that Barry denied ever taking Harry to Lolio's office to change his will and found that to be "incredible" and unworthy of belief.

In contrast, Judge Vogelson found that Barry and his witnesses lacked credibility. With respect to Dr. Moliken's testimony and similar testimony from his associate Dr. Monzo that Harry was competent to execute the new will and accompanying documents prepared by attorney Kouvatas, Judge Vogelson faulted the testimony since neither doctor considered Harry's medical history and the reports of the numerous physicians who noted Harry's dementia. Moreover, after reviewing the videotaped interview between Dr. Moliken and Harry, the judge stated that Dr. Moliken's opinion totally lacked merit, at one point describing it as "just fantastic testimony."

The judge further rejected the testimony of attorney Kouvatas, noting that he represented both Barry and Harry and later acknowledged that "Barry is running the show," confirming that Harry did not have independent counsel when he signed the will and other documents. The judge described the circumstances surrounding the preparation and execution of the wills and documents prepared by Kouvatas as "unusual and suspicious." Finally, he found Barry's testimony lacked credibility as to all major issues.

Judge Vogelson found that a confidential relationship existed between Harry and Barry and that Barry exercised undue influence on his father, controlling and manipulating him at a time when he did not have the strength of mind to resist. He accepted the testimony of Don Sable and other witnesses that Barry kept his father away from the other brothers in order to exercise greater power over his father and rejected Barry's denials as not credible. The judge added:

There is no question in the Court's mind and I so find that Harry was — had enfeeble [sic] mind caused by the Alzheimer's to such an extent that it was easily subject to the undue influence of Barry Sable and those associated with him. . . . Harry, the Court finds, would not in any circumstances have disinherited his wife or his son, Michael absent undue influence. He wouldn't have partially disinherited his son, Don, and that he relied totally on Barry and trusted Barry, that Barry was at all times acting in a fiduciary capacity in relationship with his father under various durable financial powers of attorney, and I find further that at all relevant times, Barry was in a confidential relationship with Harry as his son and as the person primarily responsible for taking care and as agent under his power of attorney.

On December 19, 2006, Judge Vogelson set forth his factual findings and legal conclusions in a written summary as follows:

The Court finds as fact that Harry Sable lacked the mental capacity as of October 1, 2003, and continually thereafter to the present date, to execute a will or any other document, to act as a plaintiff in this lawsuit, to act as a guardian for any other person, and to govern himself and manage his own affairs; that all three of his sons were aware of his level of incapacity and acted in accordance therewith in excluding Harry Sable from all decision making as to health care and finances regarding not only himself, but his wife also. Further, the Court finds Harry Sable's long time estate planning attorney, John Lolio, Esquire, who was fully familiar with Jean and Harry Sable, recognized in 2002, in part from medical records supplied to him by the three sons, that both Harry Sable and Jean Sable were so incapacitated that their wills could not be altered and that the three sons obtained copies of their parents wills and powers of attorney only after convincing John Lolio, Esquire and Earl Morganstern, C.P.A. that Jean and Harry Sable were so mentally incapacitated as to be forever unable to modify their wills and other estate planning documents. The Court further finds that John Lolio, Esquire, met with Barry Sable and Harry Sable on October 3, 2003 and again determined that Harry Sable was so incapacitated that he could not validly execute a new will and therefore refused the demands of Barry Sable he prepare a new will for Harry Sable. The Court also determines that the opinions of Dr. Moliken, Dr. Monzo, Michael Kouvatas, Esquire, Philip Fuoco, Esquire and Joseph Osefchen, Esquire, were not credible, in light of their failure to obtain and consider abundant medical information to the contrary that was readily available and that the opinions of Dr. Kargman, Michael's expert and the numerous treating physicians upon whom Dr. Kargman had relied and who had seen and treated Harry Sable from 1999 through 2003, who commented on Harry Sable's level of incapacity, are credible, accurate and persuasive.

The Court therefore concludes that any and all documents executed by Harry Sable on or after October 1, 2003, are null and void and of no legal force or effect whatsoever as a result of Harry Sable's mental incapacity at that time. Further, the Court concludes that Michael Sable has proven by clear and convincing evidence that Harry Sable lacked the mental capacity to execute a will or any other legal documents on or after October 1, 2003, so that his request for relief seeking to void all such documents is granted, together with counsel fees and costs.

It is the further opinion of the Court that while I have determined Harry Sable lacked testamentary capacity, even if he had had such capacity, at all relevant times in this matter a confidential relationship existed between Barry and Harry and Barry was primarily responsible for taking care of his father and his finances. As a result, there has been established a rebuttable presumption of undue influence against Barry, causing the burden of proof to shift to Barry, requiring him to prove by clear and convincing evidence that undue influence did not exist. He has failed to provide such proofs. Accordingly, Barry unduly influenced his father, to the extent, if at all, that Harry had capacity to execute any documents on or after October 1, 2003 to the present substituting his will for his father's, thereby rendering null and void any and all documents executed by Harry Sable on or after October 1, 2003.

The application by Barry to be reinstated by this Court as his father's healthcare and financial agent is denied as not being in Harry's best interest and is dismissed. The Court takes notice of Michael Sable's arguments in his successful motion and proceedings for removal of Barry as healthcare and financial agent of his father and the Order entered on March 20, 2006, in addition to considering the evidence adduced at the trial in this matter.

As a result of the foregoing, the Court determines that Barry Sable is liable of counsel fees and costs in this litigation and the Jean Sable litigation and counsel may submit affidavits of services and costs in support of such request, serving copies on Harry Chandless, Esq.

On January 11, 2007, Judge Vogelson heard oral argument on the amount of damages incurred as a result of Barry's

breach of his fiduciary duty. He entered final judgment on January 31, 2007 removing defendant as Harry's guardian, invalidating all documents executed by Harry after October 1, 2003, and ordering defendant to pay Harry's estate $254,176 unnecessarily expended on litigation involving Jean, as well as surcharges for money unaccounted for by defendant in the amount of $162,222.93. Attorney fees and costs were also awarded in the amount of $298,641.

On appeal, Barry argues Judge Vogelson erred as follows: (1) by admitting and accepting the expert opinion of Dr. Kargman; (2) by improperly finding undue influence through application of an incorrect burden of proof to rebut the presumption; (3) by improperly invalidating Harry's 2003 will when he was still alive; (4) by improperly assessed counsel fees and costs; and (5) by incorrectly finding that Barry breached a fiduciary duty.

Barry asserts the opinion of Dr. Kargman that Harry was incompetent as of October 1, 2003 was inadmissible as a net opinion and was improperly relied on by Judge Vogelson in reaching his conclusion. We disagree. Under our rules of evidence an expert's opinion may be based upon facts or data of the type reasonably relied on by experts in that field. While an expert medical opinion must conform to general medical standards and not standards personal to the witness, Fernandez v. Baruch, 52 N.J. 127, 130-31 (1968), personal observation is a fact that can form the basis for an opinion. Buckelew v. Grossbard, 87 N.J. 512, 530 (1981); Savoia v. F. W. Woolworth Co., 88 N.J. Super. 153, 163 (App. Div. 1965). However, bare conclusions, unsupported by factual evidence, are inadmissible as a net opinion. State v. Townsend, 186 N.J. 473, 493 (2006). "In essence, the net opinion rule requires an expert witness to give the why and wherefore of his expert opinion, not just a mere conclusion." Vitrano by Vitrano v. Schiffman, 305 N.J. Super. 572, 575 (App. Div. 1997).

Barry argues that Dr. Kargman relied upon the mini-mental exam scores or medical reports that contradicted his own findings as well as reports from doctors not qualified to render an opinion as to Harry's capacity and that therefore his opinion was a net opinion "based on unfounded speculation or mere possibilities." Kaplan v. Skoloff & Wolfe, P.C., 339 N.J. Super. 97, 103 (App. Div. 2001); Constantou v. Ventriglia, 324 N.J. Super. 437, 451 (App. Div. 1999), certif. denied, 163 N.J. 10 (2000). Specifically, Barry argues Dr. Kargman relied on mini-mental examination results that he ultimately agreed were inaccurate because the numerical scores of 14 in July, 2002, 9 in March 2003, 3 in September 2003, and 9 in January 2003 were inconsistent since Alzheimer's is a progressive disease. Barry's contention that when an expert bases his or her opinion on a particular fact being true and the fact later turns out to be untrue, the court cannot rely on that expert's opinion. See Todd v. Sheridan, 268 N.J. Super. 387 (App. Div. 1993). However, in Todd the factual assumption of the expert was a make-or-break factual issue on which the opinion was grounded. Such is not the case at bar. Barry argues to the contrary that Dr. Kargman relied almost entirely on the mini-mental exam scores but later admitted that the scores did not comport with the usual progression of Alzheimer's. Barry argues that the mini-mental exam scores contradict Dr. Kargman's findings and that, therefore, the whole foundation of Dr. Kargman's testimony was faulty and inadmissible.

We do not agree with Barry's characterization of Dr. Kargman's testimony. Dr. Kargman acknowledged that the scores were irregular and the September 2003 score might have been inaccurate, but he did not discount the validity of mini-mental exams. Rather, Dr. Kargman stated that the test itself is a screening test, and that many other factors are taken into account in determining mental incapacity including cognitive function, behavior, and the impression of others who have contact with the patient. In fact, in preparation for his report, Dr. Kargman reviewed Harry's medical files and the reports of many other physicians including the physicians who treated Harry at the Carrier Clinic and even Dr. Moliken. He stated that Harry's behavior as observed by others in September 2003 indicated that, while the score of three that Harry received at that time might not have been accurate, the assessment that Harry was incompetent at that time was supported by other facts. While Dr. Kargman did not invalidate the mini-mental exams, he did not rely on them to the exclusion of the other data.

Barry further argues that Dr. Kargman improperly relied on reports by doctors who were not experts in psychiatry and did not render opinion as to Harry's capacity, including a gastroenterologist, a urologist, and an oncologist. There is no merit to the arguments because although the physicians were not experts in psychiatry, their observations of Harry's behavior were relevant. Moreover, those impressions from other physicians were only part of the data that Dr. Kargman relied upon in forming his expert opinion. Dr. Kargman's opinion included his own examination of Harry, his interviews with other doctors including Dr. Moliken, his review of Harry's medical records, and his own experience in the field. Based on all of this data, Dr. Kargman formed an expert opinion that was not a net opinion and properly considered by Judge Vogelson.

Barry next poses the legal argument that the trial court improperly determined the validity of a will when the testator was still living. This legal argument was not made before Judge Vogelson, and an issue not properly raised below may not be raised on appeal unless it concerns jurisdiction or a matter of "great public interest." Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973). Similarly, an error which is not brought to the attention of the trial court is not ground for reversal by the appellate court unless there is a showing of plain error, i.e., error "clearly capable of producing an unjust result." R. 2:10-2. Nonetheless, we offer the following comments.

Ordinarily, a will is "ambulatory and speaks only as of the death of the testator." Matter of Will of Reilly, 201 N.J. Super. 306, 311 (App. Div. 1985). Barry argues that because Harry is still living, the court had no power to invalidate his October 2003 estate planning documents or his November 2003 will because they could not be challenged until after Harry's death.

In response, Michael cites In re Niles, 176 N.J. 282, 289-90 (2003), to support the claim that the court was within its power to nullify the will while Harry was still living.

In Niles, Laura Niles, an elderly woman with substantial assets, was influenced to change her testamentary plan to benefit her new sister-in-law's family. While Laura was still living, her former trustee filed a complaint to appoint a guardian on the ground that Laura had been unduly influenced to change her will and trust agreements. A trial was conducted and Laura was adjudicated to have been mentally incompetent to have executed a will or any other document. The new will was declared null and void because it was the result of undue influence. The trial court re-instated the original will and trust agreements and awarded attorney fees.

At no point in Niles was it indicated that it was impermissible to determine whether the will was the result of undue influence because the testator was still living. On the contrary, by implication Niles stands as authority for the proposition that when a live testator is adjudicated incompetent as of a particular date, any documents executed subsequent to that date may be invalidated.

Similarly, in In re Cohen, 335 N.J. Super. 13, 32-33 (App. Div. 2000), certif. denied, 167 N.J. 632 (2001), the issue was whether a testamentary plan could be changed for tax purposes if it was in conformity with the wishes of the mentally incompetent testator who was still living. The court ultimately determined that the proposed change to the testator's will was not in accordance with her testamentary plan while she was still competent. Again, by implication Cohen is authority for the proposition that a will may be invalidated during the lifetime of a testator. In fact, the court cited N.J.S.A. 3B:12-49, -50, and -62, which allow the court to transfer assets, make gifts, and change beneficiaries under life insurance policies on behalf of the incapacitated testator so long as such changes are in keeping with the original estate plan. In re Cohen, supra, 335 N.J. Super. at 29-32.

Barry points to the last sentence of Cohen which states, "[w]e agree with the Chancery Division judge's ruling that it would be premature for any party to contest Henrietta's will and trust while she is alive." Id. at 33. Barry contends this language establishes that Harry's will can not be contested while he is still alive. However, in Cohen the action was brought to challenge the will while here the action was instituted to adjudicate Harry incompetent and to invalidate all the documents that he signed in October and November 2003. The same proofs were necessary to show incapacity to execute the POAs as would have been required to invalidate the will. There is no need for an additional trial to invalidate the will since the same result would be reached given the court's determination that Harry was mentally incapacitated as of October 1, 2003.

Barry cites N.J.S.A. 3B:12-27 for the proposition that a person who has previously been adjudicated incompetent may return to competency, at which point a court could adjudicate him or her competent to write a new will. After a court has adjudicated a person mentally incompetent according to N.J.S.A. 3B:12-25, the person may bring an action to determine that he or she has returned to competency. N.J.S.A. 3B:12-28. If so, the court may adjudicate the person fully or partially competent and restore his or her rights as of the time of the return to competency. N.J.S.A. 3B:12-28. Given that the court determined Harry to be incompetent as of October 1, 2003, if Harry did return to competency and the court so adjudicated him, he would be entitled to execute a new will. N.J.S.A. 3B:12-28. But there is no suggestion that Harry has returned to competency and more to the point, this would not affect the validity of the November 2003 will which the court determined was executed by Harry while mentally incapacitated. In this regard, Barry relies on the testimony of Dr. Moliken, who when asked whether Harry was oriented to time and place, said he was about "50/50" and added that a person with dementia could "have a good day" and "have a bad day." However, even accepting this testimony, there is no proof that the November 2003 will was executed during a "good day" or during a moment of lucidity, and Judge Vogelson found to the contrary.

We conclude therefore that after Harry was adjudicated incompetent as of October 1, 2003, all documents after that date, including the will, were properly invalidated.

Addressing Judge Vogelson's determination of undue influence, Barry contends it was error to require him to rebut the presumption of undue influence by clear and convincing proof as opposed to a preponderance of the evidence.

In Haynes v. First National Bank of New Jersey, 87 N.J. 163, 175-76 (1981), our Supreme Court set forth the standard for determining the correct burden of proof for rebutting a presumption of undue influence. There, the testatrix, Ms. Dutrow, had two children, Dorcas and Betty, and her will divided the estate evenly between them. After Betty's death, Ms. Dutrow moved into Dorcas' home and became dependent on Dorcas for care and companionship. Dorcas substituted her attorney for Ms. Dutrow's long-time attorney, and he drew up a new will signed by Ms. Dutrow that substantially disinherited Betty's children. The Court pointed out the two necessary factors for proof of undue influence: the first is a confidential relationship which can be proved by the testator's dependence and reliance on the proponent of the will for companionship, care and support. Id. at 175-76. The second element is "suspicious circumstances," which do not need to be substantial. When these two elements exist, a presumption of undue influence arises, and the proponent of the will must overcome the presumption by a preponderance of the evidence. Id. at 177-78. However, in some cases, such as when an attorney who drafts the will also benefits from it, a higher standard of proof is required to rebut the presumption. In Haynes the Court held that because the attorney who prepared the will represented both testator and proponent of the new will and because there was no proof the attorney disclosed the conflict of interest to the testator, "clear and convincing" proof was necessary to overcome the presumption of undue influence. Id. at 184-85.

Here, the facts are remarkably similar in that Kouvatas represented both Barry and Harry in the Jean lawsuit and Barry conceded that he told Kouvatas what changes needed to be made to Harry's estate plan. Moreover, Kouvatas' billing reflects numerous conversations with Barry and almost none with Harry in October and November 2003. And nothing in the record indicates that Kouvatas ever disclosed to Harry that there was a conflict of interest in his representing both Harry and Barry. Accordingly, Judge Vogelson held that there was a rebuttable presumption of undue influence and Barry had the burden to prove by clear and convincing evidence that undue influence did not exist.

Barry contends that if the correct standard of proof of "preponderance of the evidence" had been applied, there was sufficient evidence to rebut the presumption of undue influence because Dr. Moliken, Kouvatas, and the two attorney witnesses to the execution of the will testified that Harry wanted to change his will and understood what he was doing. However, Judge Vogelson specifically found that the opinions of Dr. Moliken, Kouvatas and the other witnesses that Harry had testamentary capacity were not credible, "especially in light of their failure to obtain and consider abundant medical information" available to them. There is abundant credible evidence in the record to sustain this finding by the judge.

We agree with Judge Vogelson that there was a conflict of interest resulting from Kouvatas representing both Harry and Barry so that the higher standard of clear and convincing evidence was required to rebut the presumption of undue influence. Moreover, in light of Judge Vogelson's credibility findings Barry did not satisfy the burden under the preponderance of evidence standard so that he failed to rebut the presumption of undue influence under either standard of proof.

Barry next asserts that Judge Vogelson erred in finding he breached his fiduciary duty because Harry suffered no provable damages. Judge Vogelson concluded that Barry breached his fiduciary duty under the POA given by Harry and caused damage to the estate. He directed Barry to repay $254,176 in unnecessary litigation costs, as well as a surcharge of $162,223 for losses incurred as a result of mismanagement of Harry's assets.

There is sufficient credible proof in the record to uphold Judge Vogelson's findings that Barry breached his fiduciary duty to properly manage Harry's finances. Barry lost a check so that he withdrew Harry's IRA assets prematurely. He took loans that were never documented and he never accounted for money he took from a safe deposit box. For this mismanagement, the court awarded the surcharge of $162,222 which included Abo's fee in the amount of $90,000. Furthermore, the judge found Barry expended estate funds to litigate both the Jean lawsuit and this matter, actions which the court determined were not in Harry's but in Barry's interest and resulted in unnecessary attorney fees of $254,176 on behalf of the estate. Barry was thus held liable to the estate for these litigation expenses, under N.J.S.A. 3B:14-35, which provides: "If the exercise of power concerning the estate is improper, the fiduciary is liable to interested persons for damage or loss resulting from breach of his fiduciary duty...."

Barry argues he cannot be required to pay sums that were already paid, but there is an inadequate specification of which he claims were already paid. Abo, the accountant, described the difficulty of getting Barry or his accountant to substantiate the expenses made on behalf of Harry. Therefore, we find that Judge Vogelson correctly held that Barry breached his fiduciary duty, that Harry's estate suffered a loss because of that breach, and that Barry is liable to the estate for damages.

Lastly Barry argues that the court improperly assessed costs and attorney fees against him. Judge Vogelson awarded costs and attorney fees in the amount of $298,641, stating that the amounts expended by Michael were fair, reasonable and necessary and that if not for the litigation pursued by Michael, the misuse of Harry's property and defalcations by Barry would never have been discovered.

In a proper case the award of counsel fees is discretionary with the court and will not be reversed "absent a demonstration of manifest abuse of discretion." In re Probate of Alleged Will of Landsman, 319 N.J. Super. 252, 271 (App. Div.), certif. denied, 161 N.J. 335 (1999). New Jersey abides by the American Rule that parties are responsible for their own attorney fees. But Rule 4:42-9 specifies actions in which an award of attorney fees is allowable. The rule provides for fees in certain types of probate and guardianship proceedings, R. 4:42-9 (a)(3); it does not provide for fees when a fiduciary duty is breached. However, the court rule does not preclude a counsel fee allowance "if the incurring thereof is a traditional element of damages in a particular cause of action." Pressler, Current N.J. Court Rules, comment 2.9 on Rule 4:42-9 at 1602-03 (2009); Gerhardt v. Continental Ins. Co., 48 N.J. 291 (1966); see also Restatement (second) of Torts, section 914 (1979).

In Niles, supra, 176 N.J. at 298, the Supreme Court allowed as an exception to the American rule all reasonable counsel fees against a fiduciary who profited from the "pernitious tort of undue influence" on a testator or trust settlor. The Court stated the exception applied to cases "in which an executor's or a trustee's undue influence results in the development or modification of estate documents that create or expand the fiduciary's beneficial interest in the estate." Id. at 299. The Court explained that there was a special status in cases where undue influence is proved for "undue influence represents such an egregious intentional tort that it establishes a basis for punitive damages in a common law cause of action." Id. at 300.

The Niles court balanced the adherence to the American Rule with the need to make the victims of perfidious behavior whole, stating that in situations "when important public policy concerns are involved," the Court may carve out additional exceptions to the rule. Id. at 299. The Court compared the case to one involving attorney malpractice where attorney fees are awarded because the responsibility of the court is to make the victim whole. Because the fiduciary relationship and the attorney-client relationship are both premised on "utmost trust," and because an attorney and a trustee both act as officers of the court when acting on behalf of clients and beneficiaries, the Court extended the existing exception to the American Rule in attorney malpractice cases to include actions to establish a fiduciary's liability, holding that when an executor or trustee commits the pernicious tort of undue influence it should result in an award of all reasonable counsel fees and costs. Id. at 298-99.

Barry argues that there is no authority for the award of counsel fees against him because this case does not fit the exceptions enumerated in Rule 4:42-9, and he was not an executor of the estate or a trustee as was the defendant in Niles. We disagree. Even though defendant was not an executor or a trustee as was the case in Niles, he controlled Harry's estate under the POA, and based on the findings of Judge Vogelson, he influenced Harry to change the estate plan to benefit himself. The rationale for the award of attorney fees in Niles was that the estate should be made whole when "undue influence results in the development or modification of estate documents that create or expand the fiduciary's beneficial interest in the estate." Id. at 299. This is exactly what occurred in the instant case. Under principles of law and public policy set forth in Niles, Judge Vogelman properly awarded counsel fees and other related costs.


Affirmed.

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A-3743-06T2

February 11, 2009