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THE ONLY THING CONSTANT IS
CHANGE ITSELF: VETERANS
BENEFITS, ESTATE RECOVERY AND
UPDATES TO THE MEDICAID RULES
P. Haans Mu...
Background
• Haans is a partner and has a Masters in
Tax, CFP®, and specializes in estates/elder
law and business planning...
Overview
• Cover the VA’s Aid & Attendance benefit
and its eligibility rules
• Discuss the Estate Recovery program
• Finis...
Veteran’s A&A Benefit
• Single veterans are eligible for up to
$1,732 per month
• Veteran with a spouse is eligible for up...
Veteran’s A&A Benefit
• The benefit will cover in-home as well as
care in an assisted living facility
• Obtaining the bene...
Veteran’s A&A Benefit
• The veteran must have served 90
consecutive days of active duty and at
least one day during a war-...
Veteran’s A&A Benefit
• Program has an income and asset test
• Can either have low monthly income or
medical expenses that...
• The veteran can establish an irrevocable
trust and gift “excess” assets to it
• There is no “look-back” period
• The vet...
• If the veteran needs the gifted funds, the
trustee can take a distribution from the
trust (because he or she is the trus...
Medicaid and Estate Recovery
• 40% of people 65 years and older will
stay in a nursing home
• Average cost to stay in a lo...
What is Medicaid?
• State and federal program that pays
for medical treatment (including
nursing home care)
• Oftentimes c...
When does Medicaid apply?
• Applies principally to care in a nursing
home
• Applies to people who are blind or
disabled
• ...
Who does Medicaid apply to?
• Under income test, you cannot have
enough income to pay the monthly
cost of staying in a nur...
Who does Medicaid apply to?
• Under assets test, a single person can
only have $2,000 in countable assets
• Can keep your ...
Who does Medicaid apply to?
• Asset test allows a married couple to
keep their home (again, if it’s not in a
trust), a veh...
Estate Recovery
• It applies to assets that have to be
probated (has the potential to include
all assets)
• The only asset...
How do you protect against
estate recovery?
• The most effective way to protect the
house is with a “ladybird deed”
• A tr...
How do you protect against
estate recovery?
• The house remains an exempt asset
during the Medicaid recipient’s life
• The...
Some other things to be
aware of
• When a single person is on
Medicaid, he or she can keep the
house
• However, he or she ...
Some other things to be
aware of
• This typically means that a child or
beneficiary must pay these expenses
• Children sho...
Some other things to be
aware of
• This gives a child’s reimbursement
claim higher priority than the State of
Michigan’s e...
Some other things to be
aware of
• You should make sure the Medicaid
recipient has signed a financial power
of attorney
• ...
New Developments-House
• If the house is in your trust, it becomes
a countable asset
• If it’s in your individual name, it...
New Developments-House
• Don’t have enough cash to pay the
costs of maintaining the house
• House can be rented to pay the...
New Developments-Short
Deadlines to Respond
• Have spoken in prior years about long
delays
• Now the issue is that the Sta...
New Developments-Short
Deadlines to Respond
• It’s a significant problem because you
may not have enough time to respond
•...
Questions……
Serving the Holland area since 1900
Thank You
P. Haans Mulder, JD, MST, CFP®
Cunningham Dalman, P.C.
321 Settlers Road
Holland, MI 49423
(616) 392-1821
phmuld...
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Veterand Benefits Estate Recovery and Updates to Medicaid Rules

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Transcript of "Veterand Benefits Estate Recovery and Updates to Medicaid Rules"

  1. 1. THE ONLY THING CONSTANT IS CHANGE ITSELF: VETERANS BENEFITS, ESTATE RECOVERY AND UPDATES TO THE MEDICAID RULES P. Haans Mulder, JD, MST, CFP® Cunningham Dalman, P.C. 321 Settlers Road Holland, MI 49423 (616) 392-1821 phmulder@holland-law.com
  2. 2. Background • Haans is a partner and has a Masters in Tax, CFP®, and specializes in estates/elder law and business planning • Cunningham Dalman, P.C. has been serving the greater Holland/Zeeland area since 1900 Serving the Holland area since 1900
  3. 3. Overview • Cover the VA’s Aid & Attendance benefit and its eligibility rules • Discuss the Estate Recovery program • Finish with new developments under the Medicaid rules Serving the Holland area since 1900
  4. 4. Veteran’s A&A Benefit • Single veterans are eligible for up to $1,732 per month • Veteran with a spouse is eligible for up to $2,054 per month • Surviving spouse is eligible for up to $1,113 per month Serving the Holland area since 1900
  5. 5. Veteran’s A&A Benefit • The benefit will cover in-home as well as care in an assisted living facility • Obtaining the benefit in someone’s home can be difficult unless there are significant medical expenses Serving the Holland area since 1900
  6. 6. Veteran’s A&A Benefit • The veteran must have served 90 consecutive days of active duty and at least one day during a war-time period • The veteran must have also received discharge other than dishonorable Serving the Holland area since 1900
  7. 7. Veteran’s A&A Benefit • Program has an income and asset test • Can either have low monthly income or medical expenses that exceed income • Must have not more than $80,000 of countable assets (single or married) • Is often much less Serving the Holland area since 1900
  8. 8. • The veteran can establish an irrevocable trust and gift “excess” assets to it • There is no “look-back” period • The veteran’s child is often the trustee and all of the children are the beneficiaries of the trust Serving the Holland area since 1900 Veteran’s A&A Benefit
  9. 9. • If the veteran needs the gifted funds, the trustee can take a distribution from the trust (because he or she is the trustee and a beneficiary) • The trustee can then gift it back to the veteran Serving the Holland area since 1900 Veteran’s A&A Benefit
  10. 10. Medicaid and Estate Recovery • 40% of people 65 years and older will stay in a nursing home • Average cost to stay in a local nursing home is $7,500-$10,000/month Serving the Holland area since 1900
  11. 11. What is Medicaid? • State and federal program that pays for medical treatment (including nursing home care) • Oftentimes confused with Medicare Serving the Holland area since 1900
  12. 12. When does Medicaid apply? • Applies principally to care in a nursing home • Applies to people who are blind or disabled • Must pass the income and asset tests Serving the Holland area since 1900
  13. 13. Who does Medicaid apply to? • Under income test, you cannot have enough income to pay the monthly cost of staying in a nursing home ($7,500-$10,000 in this area) Serving the Holland area since 1900
  14. 14. Who does Medicaid apply to? • Under assets test, a single person can only have $2,000 in countable assets • Can keep your home (if it’s not in your trust) and a vehicle • All other assets are countable Serving the Holland area since 1900
  15. 15. Who does Medicaid apply to? • Asset test allows a married couple to keep their home (again, if it’s not in a trust), a vehicle, and one-half of their other assets Serving the Holland area since 1900
  16. 16. Estate Recovery • It applies to assets that have to be probated (has the potential to include all assets) • The only assets that are typically left are: bank account, personal property (including vehicle), and the house Serving the Holland area since 1900
  17. 17. How do you protect against estate recovery? • The most effective way to protect the house is with a “ladybird deed” • A trust or individual’s are named beneficiaries on the deed Serving the Holland area since 1900
  18. 18. How do you protect against estate recovery? • The house remains an exempt asset during the Medicaid recipient’s life • The costs and hassle of probate are avoided • The State can’t recover against it Serving the Holland area since 1900
  19. 19. Some other things to be aware of • When a single person is on Medicaid, he or she can keep the house • However, he or she will not be able to use Social Security and other income to pay the house expenses Serving the Holland area since 1900
  20. 20. Some other things to be aware of • This typically means that a child or beneficiary must pay these expenses • Children should protect their right to be reimbursed by executing and recording a mortgage against the house Serving the Holland area since 1900
  21. 21. Some other things to be aware of • This gives a child’s reimbursement claim higher priority than the State of Michigan’s estate recovery right • A child will get paid when the house sells Serving the Holland area since 1900
  22. 22. Some other things to be aware of • You should make sure the Medicaid recipient has signed a financial power of attorney • That way, the agent can execute the mortgage Serving the Holland area since 1900
  23. 23. New Developments-House • If the house is in your trust, it becomes a countable asset • If it’s in your individual name, it will go through probate • Don’t just leave it in an individual’s name if you are single Serving the Holland area since 1900
  24. 24. New Developments-House • Don’t have enough cash to pay the costs of maintaining the house • House can be rented to pay these costs • Best option is rent to a family member and then “sublease” it Serving the Holland area since 1900
  25. 25. New Developments-Short Deadlines to Respond • Have spoken in prior years about long delays • Now the issue is that the State of Michigan is pressuring case workers to respond quickly Serving the Holland area since 1900
  26. 26. New Developments-Short Deadlines to Respond • It’s a significant problem because you may not have enough time to respond • If the application is denied, you likely don’t have a basis to appeal Serving the Holland area since 1900
  27. 27. Questions…… Serving the Holland area since 1900
  28. 28. Thank You P. Haans Mulder, JD, MST, CFP® Cunningham Dalman, P.C. 321 Settlers Road Holland, MI 49423 (616) 392-1821 phmulder@holland-law.com www.holland-law.com Serving the Holland area since 1900
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