1. MEDICAID PLANNING: HOW TO MANAGE THE $6-7,000/MONTH COST OF STAYING IN A NURSING HOME P. Haans Mulder, JD, MST, CFP® Cunningham Dalman, P.C. 321 Settlers Road Holland, MI 49423 (616) 392-1821 phmulder@holland-law.com

2. Background Grew up in Holland. Attorney and Partner at Cunningham Dalman, P.C. Have a Masters in Tax (MST), CFP® and specialize in estates/elder law and business planning. Serving the Holland area since 1900

3. Background Cunningham Dalman, P.C. is located in Holland and has been serving the greater Holland area since 1900. We have 15 attorneys specializing in all areas of the law. Serving the Holland area since 1900

4. Overview Discuss the Medicaid rules and process. Cover the what, who, when, where, and how’s…. Give you some ideas to plan for managing the cost of staying in a nursing home ($6-7,000/month). Serving the Holland area since 1900

5. What is Medicaid? It is a state and federal program that pays for medical treatment (including long term care). Oftentimes confused with Medicare. Serving the Holland area since 1900

6. When does Medicaid apply? Historically, it only paid for nursing home care. In certain counties (that have the MI Choice Waiver program), it will pay for care in someone’s home or an assisted living facility. Serving the Holland area since 1900

7. Who does Medicaid apply to? Applies to people who are 65 years or older, blind, or disabled. Must satisfy the medical requirements (level of care assessment). Need to meet the income and asset tests. Serving the Holland area since 1900

8. Who does Medicaid apply to? Your monthly income cannot exceed the monthly cost of your stay in a nursing home ($6-7,000 in this area). For the Waiver program, your income (not your spouse) must be less than $2,022/month. Serving the Holland area since 1900

9. Who does Medicaid apply to? The asset test requires that a single person cannot have more than $2,000 in countable assets. You can keep your home (if it’s owned properly) as well as a vehicle. Serving the Holland area since 1900

10. Who does Medicaid apply to? Asset test allows a married couple to keep their home (again, if it’s owned properly), a vehicle, and one-half of their other assets (up to a maximum of $109,560). Serving the Holland area since 1900

11. Where do you apply? Apply for Medicaid at the Department of Human Services (DHS). DHS offices are located in each county. Apply at the county office that the nursing home is located. Serving the Holland area since 1900

12. Planning Example #1 Clients are husband and wife. They have an estate plan (including a joint living trust to avoid probate). A couple years later, the husband’s health begins to decline. Serving the Holland area since 1900

13. Planning Example #1 They are worried about him needing nursing home care in the future. They are also concerned about him passing and what “safety net” would be available for his wife. Serving the Holland area since 1900

14. Planning Example #1 To plan for these risks, they convert their joint living trust to a single living trust. If one spouse passes away, the single living trust becomes a “survivor’s trust.” Serving the Holland area since 1900

15. Planning Example #1 Upon the first spouse’s death (regardless of which one), it protects virtually all of their assets for Medicaid purposes. Serving the Holland area since 1900

16. Planning Example #1 It allows the husband to likely qualify immediately for Medicaid (i.e. no spend-down). It creates a “safety net” so that expenses not covered by Medicaid can be paid for (as opposed to children paying them). Serving the Holland area since 1900

17. Planning Example #1 If the wife needs nursing home care in the future, she will likely qualify immediately for Medicaid. It also creates a “safety net” so that expenses not covered by Medicaid can be paid for (as opposed to children paying them). Serving the Holland area since 1900

18. Planning Example #1 The husband must still be competent. There must be a trustworthy child (to act as trustee for the “survivor’s trust”). The assets will have to be probated and it may result in paying taxes earlier than planned. Serving the Holland area since 1900

19. Planning Example #2 Clients are husband and wife. They have an estate plan. A couple years later, the wife’s health declines significantly and has to go to a nursing home. Serving the Holland area since 1900

20. Planning Example #2 They have a house, vehicle, and $250,000 of investments. She didn’t have a three day stay in the hospital so Medicare didn’t cover any of the stay at the nursing home (immediate $6-7,000/ month cost). Serving the Holland area since 1900

21. Planning Example #2 They could keep the house (because it was properly owned) and their vehicle. Without any Medicaid planning, they would have to spend down one-half of their investments. Serving the Holland area since 1900

22. Planning Example #2 A Medicaid trust (different from their living trust) is drafted that allows them to protect all of their investments. She immediately qualifies for Medicaid and it protects their $250,000 of investments. Serving the Holland area since 1900

23. Planning Example #2 If the wife passes first and the husband needs nursing home care, he will qualify immediately for Medicaid. It also creates a “safety net” as the “survivor’s trust” did (so their children do not have to pay these costs). Serving the Holland area since 1900

24. Questions…… Serving the Holland area since 1900

25. 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