Sylva Rotary 10/10/2013


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Planning for Long Term Care Expenses

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Sylva Rotary 10/10/2013

  1. 1. Preparing for Long Term Care Expenses Presented by: Larry S. Hartley Board Certified Specialist in Elder Law by the North Carolina State Bar Certified Elder Law Attorney By the National Elder Law Foundation Strauss & Associates, P.A. 77 Central Avenue Suite F Asheville, NC 28801 (828) 258-0994 Founder: Andrew A. Strauss, Board Certified Specialist in Estate Planning and Probate Law by the NC State Bar
  2. 2. Larry S. Hartley • Associated with the law firm of Strauss & Associates, P.A., with offices in Asheville, NC and Hendersonville NC. • Member of NAELA, the National Academy of Elder Law Attorneys • Certified Elder Law Attorney by the National Elder Law Foundation and Board Certified Specialist in Elder Law by the NC State Bar • Admitted of the NC State Bar in 1996
  3. 3. There Is Money Available For: • Wartime veterans • Surviving spouses of wartime veterans The key is to qualify!
  4. 4. Extra Money for Veterans and Spouses Wartime veterans with spouses may be eligible for up to $2,054/month A surviving spouse may be eligible for up to $1,113/month.
  5. 5. Service Requirements • Served at least 90 days (if before 1980) of actual duty • Served at least 2 years 1980 and after • Served at least one day during a war period during active duty • Other than dishonorable discharge
  6. 6. U. S. WAR PERIODS • World War I - April 6, 1917November 11, 1918 • World War II – Dec. 7, 1941 – Dec. 31, 1946 • Korean War – June 27, 1950 – Jan. 31, 1955 • Vietnam Conflict – Aug. 5, 1964 – May 7, 1975 (Feb. 28, 1961 – May 7, 1975 if in the country of Vietnam) • Gulf War – Aug. 2, 1990 – date to be set by law by Presidential Proclamation
  7. 7. Additional Benefits FREE VA medical (no co-pay) and FREE prescription through VA pharmacies for formulary drugs
  8. 8. Limits On Net Worth •Approximately $80,000 for a couple •Approximately $50,000 for a single Veteran or surviving spouse •This is where the greatest need for planning exists.
  9. 9. Assets VA Does Not Count • Residence • Burial Policies/plans • Small life insurance policies • Personal property
  10. 10. Say Yes to Medicaid Eligibility • Yes Medicaid can pay the catastrophic cost of a long term stay in a nursing home. • No, you do not have to spend your family’s whole inheritance on the nursing home first. • It is a myth that you must spend all of your own money on the cost of a long term nursing home stay before you can qualify for Medicaid benefits.
  11. 11. How can these costs be paid? • Medicare: Only pays up to 100 days, and must first be hospitalized for at least 3 days. Also upon entry to nursing home they must be improving (or the rehab must at least prevent the patient from getting worse). Note: There has been recent litigation that may end the need for improvements • Private Pay: Use your own funds • Long Term Care Insurance: This is an underused method, but some people can’t get it. • Medicaid: Many people end up on Medicaid, like it or not.
  12. 12. Exempt Assets (a partial list) • The homesite (the principal residence): If the patient has an intent to return home, or if there is a community spouse or dependent relative in the home. • For a single person this is limited to equity of up to $536,000 as of January 1, 2013 • Life estates in the primary residence • Tenancy-in-common ownership in real property (actually just non-available)
  13. 13. More Exempt Assets • One licensed motor vehicle. (no limit on value) • Personal effects and household goods including jewelry, furniture, appliances, artwork and other decorative items.
  14. 14. More Exempt Assets • Life insurance cash values if the total face amount of all policies is $10,000 or less. This is a NC rule; most other states are limited to $1,500 face value of all policies. • Prepaid funeral contract if it is irrevocable. • Or up to $1,500 burial funds if no irrevocable funeral contract.
  15. 15. What is Estate Recovery? • Estate Recovery is the next big concern for the family of a person receiving Medicaid benefits for long term care expenses. • Estate recovery is the government efforts to recover its payments for long term care from your assets after your death.
  16. 16. • Medicaid Qualified Annuities Must be immediate annuities • Must be irrevocable • Must be non-assignable and non-sellable • Must be actuarially sound • Must be substantially equal payments (no balloon payments) • Annuitant must not be terminally ill • The state should be named as a contingent beneficiary to avoid penalties
  17. 17. Irrevocable Trusts: The Secret Weapon of Medicaid Planning • These work best with time to spare. • Irrevocable means grantor can not change it. • Grantor can retain income rights. • Grantor must relinquish rights to principal. • Can be structured to avoid or at least delay gift taxes.
  18. 18. THANK YOU