IRREVOCABLE TRUSTS...

The Facts...

A trust is a contract between the Grantor (the person who creates the trust), the Trustee (one who controls the trust) and the beneficiaries (those entitled to benefit from the trust). You, as Grantor, determine how the trust will be operated by the Trustee and who benefits, how and when.

While a Revocable Living Trust permits you to maintain full control (as Trustee) and have access to all your assets (as beneficiary), an Irrevocable Trust, once created, may prohibit your right to control the trust (as Trustee) or have access to your assets, but you get to decide to what extent.

It is a common misconception that irrevocable trusts, once created, cannot be changed. While that is true of many irrevocable trusts created to avoid taxes (tax reduction or avoidance trusts), it is not true of all irrevocable trusts. An irrevocable trust is a trust you create for the benefit of yourself or others and once created, you, as Grantor, must give up your right...

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 Private Long-Term Care Insurance?

Most Americans will not be able to self-insure for Long-Term Care.  Therefore, based upon the current condition of health care, long-term care and Medicaid, if you are insurable and long-term care insurance premiums are affordable, such a policy should be integrated into your estate plan to provide protection without the need for transferring assets. 

Long-term care (LTC) insurance has...

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 Paying Your Own Long-Term Care Expenses?

A. Self – Insuring

“Self-insuring,” or paying your own way, may be an option.  However, you can expect to pay approximately $88,000 per year for base nursing home care, and more for better facilities (in Southeast Michigan, generally closer to $100,000/year). Home care can be even more expensive, with 24/7 care costing in excess of $150,000 - $200,000 per year....

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 applies 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...

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...