What Should I Do to Plan For Long-Term Care? - See Part 1

A properly drafted “income-only” trust that gives a Trustee no discretion to distribute principal to the Grantor-Beneficiary, or to his or her spouse, is still a viable long-term care planning tool.

Therefore, a senior doing estate planning may keep the income from an irrevocable, “income only” trust for himself or herself, with the remainder distributable to specific beneficiaries, and qualify for Medicaid (once the applicable “penalty period” has expired) without the assets in the trust being considered by the Department of Human Services as available to pay for the cost of long-term care.

If the home is the only asset to protect, a deed which transfers the property upon death to your trust or your children, will protect the property and the right to Medicaid.  Consideration must also be given to the fact that if the property is sold and the grantor is in the...

What can be done to plan for long-term care, ensure that a health crisis or chronic illness will not erode an individual's security and dignity, and provide for family and loved ones?

As you may have already gathered, the answer is not simple. A careful analysis of each individual's personal and financial situation must be done to formulate the proper plan. Factors such as income from social security, pensions and investments; the nature and value of assets; age and health; family situation; and other considerations must be evaluated in order to make the right choices.

If long-term care insurance is not an option, and personal income and resources are not sufficient, one planning technique is to transfer assets into an “Asset Protection” Trust, retaining the income for the “Grantor” and preserving the principal of the assets (the assets held by the Trustee) for spouses, children or other beneficiaries. When properly drafted, the trust will provide ...

MEDICARE AND MEDICAID...

The Facts...

Eligibility

Medicare is a health-care benefit provided by the federal government to individuals over age 65, or under age 65 and disabled. Medicare covers doctor visits, tests and care provided in a hospital   and limited benefits in a nursing home (see below). 

Medicaid is a health-care benefit provided by the federal government for people under certain asset and income limits.  With nursing home care costs between $70,000 - $100,000/year, even people that consider themselves relatively comfortable financially may eventually need this important benefit. If your income or assets exceed the qualifying limits, you will not be eligible, but with proper planning, you can be. There is no age restriction to qualify.

Qualification

To qualify for Medicare, you must be over 65, and eligible for Social Security benefits. You may also qualify if you are under age 65 and disabled...

During life, we often need people to act on our behalf. This may be because we are unavailable due to other commitments, or it may be because we become unable to act on our own behalf for health reasons or due to a mental disability.

Prefer to listen? Attorney, Nicole Wipp, discusses these essential documents - Click Here.

When this happens, a durable power of attorney (DPOA) is a very useful, and in fact necessary, legal document. Not having one can result in a loss of control by you and/or your family regarding health and financial decisions. Not having a DPOA can also result in a lot of lost time, expense, heartache and can make a tremendous burden for your loved ones.

DPOA's are slightly different than a general POA, because they specifically are drafted to continue even if the person granting the power is mentally and/or physically disabled.

DPOA's are an alternative to judicial guardianships or conservatorships. From a practical standpoint, what this means to you is that, if...

Many people consider using beneficiary designations on assets such as IRAs, 401ks, investments, life insurance, annuities, mutual funds and other investments, etc. to be estate planning. However, as an elder law attorney, I consider the use of beneficiary designations, for the most part, just plain foolish.

Why?

Before I answer that question, I want to make sure you understand what I mean when I say beneficiary designations.  This can be anything from the beneficiaries you name on forms from your financial company or employer, to accounts that have been designated “transfer on death,” “payable on death” and the like. It can also mean making someone a joint owner on an account, which has its own problems, not within the scope of this article.

Also, it is imperative that you understand one of the most common estate planning misconceptions:  

...

Medicaid is a joint federal and state program, which pays medical costs and long term care costs. Medicaid is administered by the states and Michigan operates on a daily basis, accepting applications and making determinations of eligibility.

To Apply for Medicaid You Will Have to:

1. Complete an application
2. Provide documentation to verify general and financial requirements

Once the state finds you eligible, you will have to go through a functional eligibility assessment if you want to receive long-term care services.

You may apply for Medicaid coverage yourself, or you may designate another person, such as a family member, a friend, or a Medicaid attorney from Family & Aging Law Center, to apply for you. If someone else apples for you, that person should be familiar with your situation, able to answer all eligibility questions and have access to your financial records. The state may also require a face-to-face interview.

If you own a...

Today we'll be taking a brief look at some aspects of long-term care. For more detailed information, it’s best to consult with a qualified legal advisor. So think of this as an introduction.

There are many complexities to long-term care planning, it’s important to understand that there are options, and programs intended to help families like yours. Long-term care planning is the best way to ensure you protect as much of your hard-earned assets as the law allows, and to receive the care you need.

Let’s Get Started…

What About Medicare?

A. Hospital and Post-Hospital Skilled Care

• Contrary to the belief of many seniors, one cannot rely on Medicare for payment of long-term care costs. Although Medicare is available to most individuals age 65 or older, coverage is limited to:  qualified medical expenses (80% of an approved amount for doctors, surgical services, etc.); hospitalization with a deductible of $1,260.00 (total) for the first 60 days...

The Facts...

Estate planning isn’t about how much money you have, it's about protecting what you have for you, during your life and for those you love, after you’re gone. It ensures what you have gets to the people you love, the way you want, when you want – and it ensures that you will be properly provided for when you can no longer do it for yourself.

If you were to die – or become disabled - today, are you comfortable everything will be taken care of the way you wanted?  Will your family know how to make the hard decisions that must be made? Estate planning is legally ensuring things will be handled the way you want by providing sufficient instructions, and it is reducing the burden on those that must take care of things when you are no longer able to.

Estate Planning really is for everyone. It doesn’t matter if you have $40,000, $400,000, or 4 million. You still have to plan for the future. Whether it’s to name a guardian for your minor...

Q: Every time I go to the doctor, they ask me if I have a health care power of attorney. I understand why that’s important, but now I’m hearing that I also need a financial power of attorney (financial POA). My family member is joint on everything, so why do I need one?

A: The short answer is, you need a financial POA in the event that you become unable to manage your own finances. Even though you may think you have everything “taken care of” through joint ownership, it isn’t that simple. For example, you cannot own most tax-deferred assets, such as IRAs, jointly. A beneficiary designation doesn’t give power to your beneficiary during your life. A financial POA, when done properly, also enables a person you trust to apply for important health care benefits (if you need them) and it enables them to preserve your money in times of crisis.  Without proper planning, your loved ones will need to go to court in a process called...