MEDICAID PLANNING: HOW TO MANAGE THE $6-7,000/MONTH COST OF STAYING IN A NURSING HOME  <br />P. Haans Mulder, JD, MST, CFP...
Background<br />Attorney and Partner at Cunningham Dalman, P.C.<br />Have a Masters in Tax (MST), CFP® and specialize in e...
Background<br />Cunningham Dalman, P.C. has been serving the greater Holland area since 1900.<br />We have 15 attorneys sp...
Overview<br />Discuss the Medicaid rules and the program.<br />Give you some ideas to plan for managing the cost of stayin...
Did you know?<br />40% of people 65 years and older will stay in a nursing home.<br />Average cost to stay in a local nurs...
What is Medicaid?<br />It is a state and federal program that pays for medical treatment (including long term care).<br />...
When does Medicaid apply?<br />Historically, it only paid for nursing home care. <br />In certain counties (that have the ...
Who does Medicaid apply to?<br />Applies to people who are 65 years or older, blind, or disabled.<br />Must satisfy the me...
Who does Medicaid apply to?<br />Your monthly income cannot exceed the monthly cost of your stay in a nursing home ($6-7,0...
Who does Medicaid apply to?<br />The asset test requires that a single person cannot have more than $2,000 in countable as...
Who does Medicaid apply to?<br />Asset test allows a married couple to keep their home (again, if it’s not in a trust), a ...
Planning Example #1<br />Clients are a husband and wife who are in their 70’s.<br />They have a house and $250,000 in inve...
Planning Example #1<br />They previously planned to avoid probate by having an estate plan (which included a living trust,...
Planning Example #1<br />They are now worried about the cost of long term care.<br />They are also concerned about one of ...
Planning Example #1<br />To plan for these risks, they convert their joint living trust into a single living trust.<br />I...
Planning Example #1<br />If the surviving spouse needs nursing home care in the future, she will likely qualify immediatel...
Planning Example #1<br />If one spouse was already on Medicaid, that spouse will remain in the program. <br />It also crea...
Planning Example #2<br />Client is single. <br />She has an estate plan (living trust, pourover will, and powers of attorn...
Planning Example #2<br />She has a house, vehicle, and $250,000 in investments.<br />He receives monthly income of $1,100 ...
Planning Example #2<br />She has monthly expenses of$2,200 so there is a shortfall in her income of $500 per month. <br />...
Planning Example #2<br />She is concerned about going to a nursing home and not having any resources to take care of her h...
Planning Example #2<br />She creates an irrevocable trust in which she receives the income (interest and dividends).  <br ...
Planning Example #2<br />She makes a gift of $220,000 to the trust.  <br />She will receive approximately $916/month in in...
Planning Example #2<br />If she does need other resources, her son can take a distribution from the trust (because he is t...
Planning Example #2<br />There is a five year “look back” period for Medicaid.<br />She will need to remain healthy five y...
Questions……<br />Serving the Holland area since 1900<br />
Thank You<br />P. Haans Mulder, JD, MST, CFP®<br />Cunningham Dalman, P.C.<br />321 Settlers Road<br />Holland, MI 49423<b...
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Presentation on Managing the Cost of Nursing Home Care

  1. 1. MEDICAID PLANNING: HOW TO MANAGE THE $6-7,000/MONTH COST OF STAYING IN A NURSING HOME <br />P. Haans Mulder, JD, MST, CFP®<br />Cunningham Dalman, P.C.<br />321 Settlers Road<br />Holland, MI 49423<br />(616) 392-1821<br />phmulder@holland-law.com<br />
  2. 2. Background<br />Attorney and Partner at Cunningham Dalman, P.C.<br />Have a Masters in Tax (MST), CFP® and specialize in estates/elder law and business planning.<br />Serving the Holland area since 1900<br />
  3. 3. Background<br />Cunningham Dalman, P.C. has been serving the greater Holland area since 1900.<br />We have 15 attorneys specializing in all areas of the law.<br />Serving the Holland area since 1900<br />
  4. 4. Overview<br />Discuss the Medicaid rules and the program.<br />Give you some ideas to plan for managing the cost of staying in a nursing home.<br />Serving the Holland area since 1900<br />
  5. 5. Did you know?<br />40% of people 65 years and older will stay in a nursing home.<br />Average cost to stay in a local nursing home is $6-7,000/month ($72-$84,000/year).<br /> <br />Serving the Holland area since 1900<br />
  6. 6. What is Medicaid?<br />It is a state and federal program that pays for medical treatment (including long term care).<br />Oftentimes confused with Medicare.<br /> <br />Serving the Holland area since 1900<br />
  7. 7. When does Medicaid apply?<br />Historically, it only paid for nursing home care. <br />In certain counties (that have the MI Choice Waiver program), it will pay for care in someone’s home or an assisted living facility.<br />Serving the Holland area since 1900<br />
  8. 8. Who does Medicaid apply to?<br />Applies to people who are 65 years or older, blind, or disabled.<br />Must satisfy the medical requirements (level of care assessment).<br />Need to meet the income and asset tests.<br />Serving the Holland area since 1900<br />
  9. 9. Who does Medicaid apply to?<br />Your monthly income cannot exceed the monthly cost of your stay in a nursing home ($6-7,000 in this area).<br />For the Waiver program, your income (not your spouse) must be less than $2,022/month.<br />Serving the Holland area since 1900<br />
  10. 10. Who does Medicaid apply to?<br />The asset test requires that a single person cannot have more than $2,000 in countable assets.<br />You can keep your home (if it’s not in a trust) as well as a vehicle.<br />Serving the Holland area since 1900<br />
  11. 11. Who does Medicaid apply to?<br />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 (up to a maximum of $109,560).<br />Serving the Holland area since 1900<br />
  12. 12. Planning Example #1<br />Clients are a husband and wife who are in their 70’s.<br />They have a house and $250,000 in investments.<br />Serving the Holland area since 1900<br />
  13. 13. Planning Example #1<br />They previously planned to avoid probate by having an estate plan (which included a living trust, pourover will, and powers of attorney) and titling their assets in their trust.<br />Serving the Holland area since 1900<br />
  14. 14. Planning Example #1<br />They are now worried about the cost of long term care.<br />They are also concerned about one of them passing and what “safety net” will be available for the survivor.<br />Serving the Holland area since 1900<br />
  15. 15. Planning Example #1<br />To plan for these risks, they convert their joint living trust into a single living trust.<br />If one spouse passes away, the single living trust becomes a “survivor’s trust.”<br />Serving the Holland area since 1900<br />
  16. 16. Planning Example #1<br />If the surviving spouse needs nursing home care in the future, she will likely qualify immediately for Medicaid. <br />The “survivor’s trust” creates a “safety net” to pay for expenses not covered by Medicaid (so the children do not have to).<br />Serving the Holland area since 1900<br />
  17. 17. Planning Example #1<br />If one spouse was already on Medicaid, that spouse will remain in the program. <br />It also creates a “safety net” to pay for expenses not covered by Medicaid (so the children do not have to).<br />Serving the Holland area since 1900<br />
  18. 18. Planning Example #2<br />Client is single. <br />She has an estate plan (living trust, pourover will, and powers of attorney).<br />She is healthy and does not anticipate needing long term care in five years.<br />Serving the Holland area since 1900<br />
  19. 19. Planning Example #2<br />She has a house, vehicle, and $250,000 in investments.<br />He receives monthly income of $1,100 in Social Security and $600 from a pension. <br />Serving the Holland area since 1900<br />
  20. 20. Planning Example #2<br />She has monthly expenses of$2,200 so there is a shortfall in her income of $500 per month. <br />Since her husband passed, she has a son who has started to help her in various ways.<br />Serving the Holland area since 1900<br />
  21. 21. Planning Example #2<br />She is concerned about going to a nursing home and not having any resources to take care of her house.<br />She is also worried about Medicaid not covering all of her needs (other medical care, clothes, etc.).<br />Serving the Holland area since 1900<br />
  22. 22. Planning Example #2<br />She creates an irrevocable trust in which she receives the income (interest and dividends). <br />Her son is the trustee and her children are the beneficiaries of the trust principal. <br />Serving the Holland area since 1900<br />
  23. 23. Planning Example #2<br />She makes a gift of $220,000 to the trust. <br />She will receive approximately $916/month in income from the trust.<br />She will not likely need any other resources. <br />Serving the Holland area since 1900<br />
  24. 24. Planning Example #2<br />If she does need other resources, her son can take a distribution from the trust (because he is the trustee and beneficiary).<br />He can then gift it back to her. <br />Serving the Holland area since 1900<br />
  25. 25. Planning Example #2<br />There is a five year “look back” period for Medicaid.<br />She will need to remain healthy five years from the time of the gift for this planning technique to be effective. <br />Serving the Holland area since 1900<br />
  26. 26. Questions……<br />Serving the Holland area since 1900<br />
  27. 27. Thank You<br />P. Haans Mulder, JD, MST, CFP®<br />Cunningham Dalman, P.C.<br />321 Settlers Road<br />Holland, MI 49423<br />(616) 392-1821<br />phmulder@holland-law.com<br />www.holland-law.com<br />Serving the Holland area since 1900<br />

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