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January 2016

Jan 28
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4 Reasons Why You Should Consult an Elder Law Attorney on Medicaid Issues.

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Why Should You Consult an Elder Law Attorney on Medicaid Issues?

Many people are reluctant to consult attorneys on legally-related matters due primarily to inexperience in working with attorneys. This is doubly true with respect to issues related to Medicaid coverage of nursing home care for the following reasons:

  • The cost of consulting with an attorney.
  • Medicaid eligibility is seen as a non-legal matter that should be straightforward and not require legal assistance.
  • Nursing homes often offer to prepare Medicaid applications for residents for no charge at all.
  • Discomfort with using a public benefits program.

Let’s discuss each obstacle to legal representation in turn.

Cost

There is no getting around it. Lawyers are expensive. But the bottom line-since that’s what we’re talking about here-is that they’re a lot less expensive than nursing homes. In the Rhode Island area, nursing homes generally charge $9,113 or more a month. If the consultation with the lawyer saves even a month of nursing home fees, the legal costs will be more than justified. At stake can be a lifetime of hard work and savings.

Medicaid as Law

Certainly, public benefits should be available to those who qualify without having to resort to hiring an attorney. Unfortunately, this aspiration and the reality of the Medicaid rules are far apart. The eligibility requirements are defined in a conflicting set of state and federal laws, regulations, bulletins and practices that make it impossible even for attorneys to fathom unless they specialize in the field. Your case may be simple and may not require the depth of knowledge needed to plan for a more complicated estate. However, you cannot be sure of that without first meeting with a specialist. Again, a lot is at stake and given the cost of nursing homes, it’s not difficult for a qualified attorney to save the client more than the attorney’s fee.

Free Application Services

Yes, the nursing home provides application assistance at no charge. In addition, in the majority of cases there is no risk in using these services if you’ve checked it out with an attorney ahead of time. However, there is a great risk to using the nursing home’s services without first consulting an elder law attorney. We have seen countless examples of incomplete or improper advice leading to significant lost planning opportunities for our clients, no matter how well-intentioned the advice giver may be. Rectifying the situation may cost more in legal fees than would have been the case with a proper plan. In any event, the nursing home and the resident’s family often have conflicting interests since their private-pay rates are typically $4,000 a month more than they receive in Medicaid reimbursement. In other words, every month that a resident pays privately rather than receives Medicaid coverage is additional money going to the nursing home and less preserved for the resident’s spouse and family.

In addition, to the extent that the application raises legal issues, it makes sense to have an elder law attorney prepare the application. This would be the case, for instance, if a trust were involved or if you were seeking an exception to the usual penalties for transferring assets.

Medicaid as Welfare

Medicaid serves a number of different populations, including poor recipients of Supplemental Security Income (SSI) and disabled people receiving Social Security Disability Income (SSDI). No one would argue that when Medicaid was created it was meant to be the main system of paying for long-term care for older Americans. But in the absence of any other program to fill that need, Medicaid has become the nation’s long-term care financing system by default. Medicaid planning permits nursing home residents to be covered by the program under its rules. Congress can change the rules, and often does. Consulting with an attorney permits seniors and their families to understand the rules as they are and the options available to them. It does not require them to take any particular steps. It can be vital to preserving the financial security of a healthy spouse continuing to live at home.

Ready to have the conversation about how Medicaid Planning fits into your long term plan?  Contact our office for a free consultation to learn how Medicaid Planning will work for you.

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Jan 20
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Long-Term Care Insurance: 4 Must Follow Rules

By Uncategorized

Long-Term Care Insurance – To get or not to get?

For those who can afford it, Long-Term Care Insurance is becoming increasingly popular as a means of paying for nursing home or home care. The problem is choosing a good policy and being able to afford it.

Here are a few Long-Term Care Insurance rules of thumb:

  • Only buy policies that are approved in your state. Generally, these are individual, as opposed to group, policies. A group policy may be just as good, but since it is not regulated you must be extra careful in seeking professional assistance in examining it. In addition, if you do require Medicaid assistance despite the fact that you own a Long-Term Care Insurance policy, owning an individual policy will protect you from estate recovery; owning a group policy will not.
  • Buy enough coverage. It will not do you much good to have insurance coverage if it is insufficient to meet your cost of care. Anticipate your need for the insurance to occur at least ten years off and anticipate the inflation in Long-Term Care Insurance costs to exceed the growth in your income by at least 5 percent a year. However, there is another school of thought that recommends purchasing enough coverage to pay for assisted living if you can only afford the lower premiums.
  • Buy home care coverage. If you have nursing home coverage and not home care coverage you may feel compelled to move to a nursing home in order to save money. Do not put yourself in that bind.
  • Only buy the insurance if you can afford it. The guidelines above will all increase the cost of the policy. But if you cannot afford them, then do not buy the insurance. How do you know if you can afford a certain premium? A rule of thumb is that payment of the premium should not affect your standard of living. So you can afford the premium if you are using money that you would otherwise set aside to add to your savings. An alternative would be to purchase an annuity that pays sufficient benefits to cover the long-term care insurance premiums.

Long-Term Care Insurance is not an option for you? You can still qualify for nursing care without spending your entire life savings. How? A properly drafted estate plan using Income Only Trusts can achieve the same goal.

Want to lean more? Contact our office for a free consultation.

Long-term care insurance information, form, Folders and stethoscope.

Long Term Care Insurance Policy

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Jan 13
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4 Reasons To NEVER Give Your Home To Your Children

By Uncategorized

Many people plan to continue to live in their home as long as they are able to do so. If they eventually ever have to go to a nursing home, your house and its contents would NOT have to be sold in order to qualify for Medicaid. However, it is still at risk because the state has a right to recover whatever it pays for your care from your probate estate. Your home may be protected from such estate recovery by keeping it out of your probate estate.

The simplest approach to doing so would be to deed it to your children. There are four problems with doing this:

  1. You lose control over your house. Your children now are the tile owners of the home and as such it would be subject to and vulnerable to your children’s debts or if they were sued or divorced.
  2. This would be a transfer which would make you ineligible for Medicaid for the following 60 months.
  3. Your children would lose the opportunity of getting a “step-up” in basis by receiving the property through your estate. Your children would be subject to potential capital gains taxes that could be avoided.
  4. Selling the home later can become problematic. Many clients expect at some point to need to sell their home and possibly downsize. By transferring the home to your children you have added complexity with title issues and taxation issues with any sale.

So how do you keep the house out of  your probate estate so that the state has no access to place a lien on it? How do you ensure your heirs get a stepped-up basis in the house? How should you own the house that allows for a ease of downsizing? There is one SOLUTION: using the Irrevocable Income Only Grantor Trust.

This trust allows you to keep the property out of your children’s hands, allows them to received a step-up in basis, allows you the freedom of selling the property without a hassle, avoids estate recovery and five years after the transfer is completely protected for Medicaid.

Want to lean more? Contact our office for a free consultation.elderly-couple-in-front-of-home-960x683

Jan 05
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Can Long Term Care Insurance Work For More People?

By Uncategorized

Long Term Care Insurance is a product known by few and used by fewer.

New research looks at trade offs in participation rates, cost and Medicaid savings. These factors must be reviewed when deciding on what is the best way to protect assets. But where does a person start?

The first step in the process is consulting with an estate planning attorney. During that consultation, an elder law estate planning attorney will be able to make an initial assessment of the client, their assets, prospective needs and overall goals. Clients should be advised during the consultation if long term care insurance is an option and then the elder law attorney should make a recommendation to you to meet with a long term care insurance representative to review products available. Unfortunately, because of economic or health reasons few people can consider pursing long term care policies.

Follow the below link that discusses the findings of some recently completed new research that looks at tradeoffs in long-term care insurance participation rates, cost, and Medicaid savings.

The attached article suggests that when someone turns 65 in America today, there’s about a 50-50 chance he or she will need not just medical care as they get older, but extensive help with basic activities like dressing, bathing, walking and eating. Expenses associated with caring for individuals on average are between$91,000 and $182,000, but they can range much higher, too.

People who seek out long term care insurance cite the peace of mind knowing they are prepared for whatever life brings them. The long term care insurance industry struggles to make these policies viable for more individuals and if successful, it will have broad impact on Medicaid.

http://www.nextavenue.org/how-to-get-more-people-covered-by-long-term-care-insurance/

Document of Insurance Policy, Life; Health, car, travel, for background

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