Patti's Blog - Advocate for Elders, People with Disabilities and Their Families

Bad News For Seniors and Widows In Particular

Excerpt from: Mullen & Giarusso (click for full article)

 

It has been called the State Budget Busting Act, the Charity Chilling Act, the Nursing Home Bankruptcy Act, the Boon To Private Insurance Act and many more. This is because the Deficit Reduction Act (DRA) of 2005 dramatically impacts various sectors of the economy and society as a whole. Of course, seniors will suffer the most from these new changes. Your elderly clients or friends will find it much more difficult to qualify for Medicaid assistance for nursing home stays, and will be subject to harsher penalties for gifting.

Some of the most alarming changes brought about by the DRA include:

• The waiting period for asset transfers has been increased from three years to five years. If it is determined an asset was transferred (given away) for less than fair market value during the new five year look-back period, a penalty will be assessed, making the applicant ineligible for Medicaid for a number of months, even years. This means a nursing home stay will have to be paid for privately. How many of your elderly clients or friends have the ability to predict the state of their physical and mental health three years from now, let alone five?

• The penalty period for giving assets away now starts at the time the person enters a nursing home and is otherwise eligible rather than at the time of the asset transfer. Obviously, this change can dramatically increase the amount of time an applicant will be ineligible for assistance.
• A cap of $750,000 has now been imposed on the value of an exempt residence, beyond which there will be no exemption for a homestead—the average person’s most valuable and cherished asset.

How long term care insurance can help protect your assets

Excerpt from: myhartsville.com(click for full article)

 

How will you pay for long term care? The sad fact is that most people don’t know the answer to that question. But a solution is available.
As baby boomers leave their careers behind, long term care insurance will become very important in their financial strategies. The reasons to get an LTC policy after age 50 are very compelling.
Your premium payments buy you access to a large pool of money which can be used to pay for long term care costs. By paying for LTC out of that pool of money, you can preserve your retirement savings and income.
The cost of assisted living or nursing home care alone could motivate you to pay the premiums. Genworth Financial conducts a respected annual Cost of Care Survey to gauge the price of long term care in the U.S. Here is a summary of the 2013 survey’s key findings:
*In 2013, the median annual cost of a private room in a nursing home was $83,950 or $230 per day – up 3.6% from 2012. In the past five years, the cost has risen about 4.5% annually.
*A private one-bedroom unit in an assisted living facility has a median cost of $3,450 a month, or $41,400 annually. It was 4.5% cheaper last year.
*The median payment to a non-Medicare certified, state-licensed home health aide is $19 an hour in 2013, up 2.3% from 2012.1
Can you imagine spending an extra $40-85K out of your retirement savings in a year? What if you had to do it for more than one year?
The U.S. Department of Health & Human Services estimates that about 70% of Americans will need some kind of long term care during their lifetimes. Additionally, 69% of Americans older than 90 have some form of disability – often a direct cause for long term care.2
Why procrastinate? The earlier you opt for LTC coverage, the cheaper the premiums. This is why many people purchase it before they retire. Those in poor health or over the age of 80 are frequently ineligible for coverage.

Trust Funds and Financial Aid

Excerpt from: FinAid! (click for full article)

 

Most trust funds are not effective means of sheltering money from the financial aid process and often backfire on the family. Almost all trust funds are counted in the financial aid process, often as an asset of the child. This leads to a high impact on eligibility for need-based financial aid. If the trust fund document restricted the beneficiary's access to the principal, the trust fund will affect aid eligibility every year.

Protecting Your Future: Long-term care a key element in field of elder law

Excerpt from: recordonline (click for full article)

 

The basics of “estate planning” are familiar. Estate planning has been defined as “getting your assets to whom you want, when you want, and the way you want, with the least amount of taxes and legal fees possible.”

The meaning of “elder law” is a bit less clear. What does it actually mean?

Planning for disability early

In general, the field of “elder law” focuses on long-term care and substitute decision-making. Securing the proper care is critical for seniors to thrive in their golden years. But even though more than half of Americans will need long-term care at some point in their lives, the process of obtaining and funding the care is confusing and complex.

An elder law attorney's role is to create plans for disability early, so that long-term care is available in the future or, absent advance planning, to do crisis planning when the client is “on the nursing home doorstep” to protect assets while ensuring the necessary care is available.

DCF: Medicaid paying nursing home bill for wealthy

Excerpt from: The St. Augustine Record (click for full article)

 

Florida welfare officials are proposing a bill that targets Medicaid fraud among patients who hide their assets with family and friends to get the taxpayer-funded program to pay for their nursing home care.

Patients are allowed to hire a relative or friend to oversee small aspects of their care, such as hair styling or room decorating. But instead of being paid monthly or yearly, some caregivers are paid up front for years of service at a time, which can decrease some patients’ assets so they in turn qualify for Medicaid. Spouses also can sign over their patient’s financial support to the state, which allows couples with millions of dollars in assets to get Medicaid to foot the bill, Department of Children and Families spokesman Joe Follick said Friday.

Estate Planning and Administration in the Digital Age

Excerpt from: The Legal Intelligencer (click for full article)

 

The term "digital assets" refers to assets and information stored or accessed online or as a file on a computer or mobile device. Some digital assets have monetary value, while others have personal or sentimental value. The digital asset realm includes not just bank and brokerage accounts, but also email accounts, blogs, Facebook pages, Tumblr accounts, photograph, book and music libraries — the list goes on with new additions all the time.

We spend a significant amount of time using the Internet to manage and enhance our lives. We rely on computers and mobile devices to keep us organized and connected. However, many of us give little thought to what happens to our digital assets upon our incapacity or death. In this digital age, making provisions for the protection and administration of those assets is an integral part of a complete estate plan.

Top 5 Medicaid Myths

Excerpt from: Innovations for Seniors Magazine (click for full article)

 

Myth #5: I can’t qualify for Medicaid because I have too much money in my bank account.

Medicaid currently has a resource limit of $14,250 for an individual ($20,850 for a couple). If the Medicaid applicant’s assets are below this threshold, then he/she will be eligible for benefits. However, if the assets are above the resource limit, this would require the Medicaid applicant to institute an asset protection plan which he/she would either transfer the funds to an exempt person, or gift the funds to a trust which may result in a waiting period for benefits. Early planning is crucial, especially for Alzheimer’s patients, when their mental capacity begins to diminish.

Steps To Get Business Owners Started On Succession Planning

Excerpt from: Wealth Counsel Quarterly (click for full article)

 

One of the key failures for many family business owners is the avoidance of succession planning. Eighty percent of family businesses do not pass successfully to the second generation; of the 20% that do pass successfully, 80% of them never make it to the third generation.

The advisor cannot plan around the entrepreneur’s refusal to face his or her own mortality and to make difficult (and emotional) decisions. Family business owners typically adopt the Scarlet O’Hara approach to succession planning: “I will worry about that tomorrow, for tomorrow is another day.”

The key is not to overwhelm your client as an advisor. Start with low hanging fruit, such as a simple update to the client’s estate planning documents and a buy-sell agreement. Once the owner begins the process, the implementation of subsequent actions is likely to be easier.

Do You Really Want to Give Away Your Assets to Become Eligible for Medicaid Long-Term Care?

Excerpt from: Forbes (click for full article)

 

A new insurance company survey of financial advisers reports that four-in-ten have clients who ask about giving away their assets so they can become eligible for Medicaid long-term care. Oddly, though not surprisingly, the same advisers report their clients say that a key goal of their long-term care planning is “maintaining control.”

The online survey, by Nationwide Financial, questioned a small, self-selected sample of advisers, so the results may not be representative. And remember, this survey did not report that 40 percent of clients want to spend-down, only that 40 percent of advisers had clients who asked about it.

Most research suggests that few ever follow through with this strategy. Still, if control and independence are really your goals, the last thing you want to do is rely on Medicaid for your long-term supports and services.