Providence Retired Teachers Association - Estate & Medicaid Planning
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The document discusses elder law planning topics such as healthcare directives, financial planning, Medicaid eligibility, and transferring assets. It provides an overview of lifetime planning considerations for an individual named Janet, including appointing agents for healthcare and financial decisions. It also discusses Medicaid eligibility criteria around resources, income limits, and penalties for asset transfers within 5 years. Examples are given for both single individuals and married couples applying for long-term care coverage.
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Providence Retired Teachers Association - Estate & Medicaid Planning
- 1. HEFFNER & ASSOCIATES ELDER LAW Estate & Medicaid Planning Mark B. Heffner, Esq. , CELA Heffner & Associates 615 Jefferson Boulevard Warwick, Rhode Island 401-737-1600 www.hefflaw.com
- 2. HEFFNER & ASSOCIATES ELDER LAW Disclaimer •Materials are for general education and should not be substituted for consultation with a competent elder law attorney in your jurisdiction •Materials presented from the perspective of Rhode Island Medicaid regulations and practice •Rules and practice vary significantly from State to State (and occasionally within the same State) and are subject to change
- 3. HEFFNER & ASSOCIATES ELDER LAW Meet Janet
- 4. HEFFNER & ASSOCIATES ELDER LAW Lifetime Planning for Janet: Health Care Decisionmaking Advance Directive Durable Power of Attorney for Health Care Living Will Selection of Agent Selection of Successor Agent
- 5. HEFFNER & ASSOCIATES ELDER LAW Lifetime Planning for Janet: Financial Decisionmaking Joint account not recommended Durable Power of Attorney Selection of Agent (aka, “Attorney in fact”) Also successor Attorney in fact
- 6. HEFFNER & ASSOCIATES ELDER LAW Lifetime Planning for Janet: Financial Decisionmaking Revocable Trust, aka, “Living Trust” Avoids/Reduces “Push-Back” of Institutions with use of Durable Power of Attorney Selection of Trustee & successor Trustee critical Still need Durable Power of Attorney for finances
- 7. HEFFNER & ASSOCIATES ELDER LAW Post-death planning for Janet Will—requires probate Selection of Executor—same person generally as agent under financial DPOA Revocable Trust—if “funded” will avoid probate for those assets Still need Durable Power of Attorney for finances
- 8. HEFFNER & ASSOCIATES ELDER LAW What happens if Janet needs long-term care? Medicare--limited long term care (LTC) coverage 20 days full payment, up to 80 additional days with co-pay ($152/pay) Medicare LTC coverage initially applicable if individual has a three day prior hospital admission & continues to require skilled care After that….
- 10. HEFFNER & ASSOCIATES ELDER LAW Private Pay costs for nursing home care • Genworth 2013 cost of care survey (www.genworth.com/corporate/about-genworth/ industry-expertise/cost-of-care.html) •Rhode Island: $8516/month •Massachusetts: $10,493/month •Connecticut : $12,638/month
- 11. HEFFNER & ASSOCIATES ELDER LAW What is Medicaid? •It is not Medicare! •Medicare: insurance model; no asset or income qualification requirements •Medicaid: in addition to general criteria (age, blind, disabled) & needing a level of care, must also fall within financial criteria (assets, income, transfer restrictions)
- 12. HEFFNER & ASSOCIATES ELDER LAW Resources Excluded (Single Person) •Home (equity value limit: $534K) if “intent to return” •Funds otherwise available (limit: $4000) •Vehicle (limit: $4500, unless used for transportation to medical appts) •Life Insurance ($4000 face limit) •Irrevocable Burial Contract, or funds set aside for burial ($1500) •Household goods & personal effects( no value limit, unless exceptional) Available EVERYTHING ELSE
- 13. HEFFNER & ASSOCIATES ELDER LAW Income-Single Individual All gross income must be used for cost of care, minus: •$50/month personal needs allowance; and $Pro-rata monthly payment of Medicare supplement insurance (e.g. Blue Cross Plan 65)
- 14. HEFFNER & ASSOCIATES ELDER LAW Meet Pat & Bill
- 15. HEFFNER & ASSOCIATES ELDER LAW Resources Excluded (Married Couple) •Home: no equity limitation if residence of “Community Spouse” (CS) •Vehicle: if used by CS, no limitation on value •CS retains “Community Spouse Resource Allowance” (CSRA)
- 16. HEFFNER & ASSOCIATES ELDER LAW Income-Married Applicants Income of “community spouse”,--whether regular (e.g. Social Security), or periodic (e.g., inheritance) is not a factor in eligibility of institutional spouse (IS), except in following calculation Community Spouse Allocation (“spousal slide over”) may be allowed as additional deduction from IS income. Two factors: •CS gross income; and •Amount of spousal allowance, consisting of ••Basic monthly allowance to CS (currently $1,891.25); and •If there are shelter expenses, and if so whether standard shelter allowance or excess shelter allowance
- 17. HEFFNER & ASSOCIATES ELDER LAW Transfers of Assets Any transfer occurring on or after February 8, 2006 is subject to five year lookback period Q: What types of transfers fall within lookback period? A: Uncompensated (UV) transfers--i.e., those for which fair market value (FMV) not received by applicant or the applicant’s spouse Ex: Applicant’s spouse “sells” summer cottage with FMV of $100K to child for $25K. Uncompensated transfer: $75,000
- 18. HEFFNER & ASSOCIATES ELDER LAW Potential additional tool for Pat and Bill Irrevocable trust Unlike revocable trust—actual transfer of assets Subject to five year loopback period Key question: probably of both Pat and Bill making it through five year loopback period
- 19. HEFFNER & ASSOCIATES ELDER LAW National Elder Law Foundation www.nelf.org Provides interactive state map of Certified Elder Law Attorneys (CELA) in each state Mark B. Heffner, Esq. , CELA Heffner & Associates 615 Jefferson Boulevard Warwick, Rhode Island 401-737-1600 mheffner@hefflaw.com www.hefflaw.com
Editor's Notes
- Refer to OMR tool Practice pointer: don’t assume, as in past, that just because client in nh, will qualify for Medicaid LTC benefits in nh
- Agent selection can change Entire power can be revoked
- Illustrate through example of house—revocable, change trustee
- Illustrate need for probate with house, avoidance of probate with house, bank account Janet still cares about how things go—in fact, may be greater concern for dispute
- Illustrate need for probate with house, avoidance of probate with house, bank account Janet still cares about how things go—in fact, may be greater concern for dispute
- THE END—At least of insurance coverage UNLESS LTCI—the beginning..
- Discuss LTCI
- Refer to OMR tool Practice pointer: don’t assume, as in past, that just because client in nh, will qualify for Medicaid LTC benefits in nh
- Illustration of “legal ability to make resource available” and a resource not subject to “a legal impediment which precludes applicant from making resource available. Gship or conservatorship--evidence inability to make resource available. Asset unavailable to to refusal of joint tenant to sell, and hence partition suit (ask JK + law school case)
- Highlight FOM concept
- Discuss penalty period Annual exclusion gifts
- Discuss penalty period Annual exclusion gifts