PAYING FOR THE NURSINGHOME WITHOUT LOSING YOUR         SHIRT!   Robert A. Mason, JD, CELA        Mason Law, PC       Asheb...
Planning Crisis• Playing The Odds –  – By 2025 50% more with Alzheimers   (Alzheimers Association)  – By 2025 100% more 65...
Planning Crisis• Playing The Odds –  – 70%          The Percentage of Those 65+ Who Will Need Some             Level of Lo...
Planning Crisis• Playing The Odds –  – 50% to 60%   Percentage of Nursing Home Costs Paid by   Medicaid  – Government WILL...
Background – Long Term Care        Two Types of Planning• CRISIS!!•   Long Range
Background – Long Term Care   Types of Long Term Care          • In Home          • Assisted           • Skilled
Background – Long Term Care      Financing Long Term Care•   Private•   Medicare•   Long Term Care Insurance•   Medicaid
NORTHCAROLINAMEDICAID BASICS
Medicaid Basics    Asset Qualification TestsCountable vs Noncountable
Medicaid Basics         Asset Qualification Tests•    Major Noncountable/Nonincludible:    – Residence (less than $536,000...
Medicaid Basics    Asset Qualification TestsMajor Noncountable/Nonincludible:         – Term Insurance
Medicaid Basics        Asset Qualification Tests        Annuities – BE CAREFUL!!•   Must be:    nontransferable/nonassigna...
Medicaid Basics    Asset Qualification TestsMajor Noncountable/Nonincludible:   Certain Types of Trusts         (More On T...
Medicaid BasicsAsset Qualification Tests •   Countable Assets:     Everything Else!
Medicaid Basics   Asset Qualification TestsMarried Couple Countable Limit:  ONE-HALF Countable UP TO:            $115,920 ...
MEDICAIDBASICS -ASSETTRANSFERS
Medicaid Basics          Transfer Penalties•    Transfers Less Than FMV Within 60           Months of Application    • Pen...
Medicaid Basics       Transfer PenaltiesResulting Penalty BEGINS On DateOtherwise Financially Eligible AND in           Sk...
Medicaid Basics   Transfer Penalties    EXCEPTIONS   • Interspousal• Disabled Adult Child • Sole Benefit Trusts
ESTATE RECOVERY
Estate Recovery    •     Mandated by Congress 1993•       Directs DMA to Recover Against        Estates of Deceased Recipi...
Estate Recovery•   Probate vs. Nonprobate
Estate RecoveryMajor Exception: Not If A Surviving Spouse • Major Exception: Not If A Surviving               Disabled Chi...
Estate Planning Issues –Working With The Rules
Rules Break! • Transfers More Than 5 Years Old:             IRRELEVANT• Go To Nursing Home During 5 Years:  Pay Remainder ...
5 Year Strategies• Give Assets Away  – Many Negatives• “Income Only” Trust  – Much Better Solution
Income Only Trust• Irrevocable – Sort Of• Income Continues• Great Tax Advantages
Income Only Trust• 5 Years To Be Fully Effective• What Happens If Need NH Within 5  Years?  – Pay Difference Until 5 Years...
Income Only Trust• How Pay For Remainder of 5 Years?  – Savings  – LTC Insurance  – VA Benefits? (Maybe as much as    $2,0...
Rules Break!Transfers By WILLS Don’t Count   Against Medicaid Eligibility
Properly Structured Will• Leaving Assets To Others Will Not  Affect Spouse & Medicaid• CAUTION: Leaving Everything To  Spo...
Rules Break!• If You Or Spouse Set Up Trust AND any  Principal Can Possibly Be Distributed  To You – WHOLE Trust Will Coun...
Properly Structured Will• Leave Everything In Trust Under Will  For Spouse• Trust MUST be Properly Drafted• Assets In Trus...
CAUTION: Living Trusts• Most Living Trusts Won’t Do• Revocable Trusts  – They may avoid probate, but they’re    countable ...
IN A NUTSHELL . . .• NEED FOR LONG TERM  CARE: HIGH• COSTS GOING UP• GOV’T PRESSURE ON BENEFITS
IN A NUTSHELL . . .• GET INSURANCE IF  YOU CAN• EVEN WITH INSURANCE  HAVE AN OVERALL PLAN
IN A NUTSHELL . . .• MORE OPTIONS FOR  COUPLES• SOME OPTIONS FOR  SINGLES (IF YOU GET  PLANNING!)• MOST EXPENSIVE: DO NOTH...
Now serving Central Carolina and Coastal Georgia      Elder Law * Wills & Trusts * Guardianships             All contents ...
How To Pay For The Nursing Home Wihtout Losing Your Shirt
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How To Pay For The Nursing Home Wihtout Losing Your Shirt

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An overview of North Carolina Medicaid nursing home rules by Bob Mason, Certified Elder Law Attorney

Published in: Economy & Finance
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How To Pay For The Nursing Home Wihtout Losing Your Shirt

  1. 1. PAYING FOR THE NURSINGHOME WITHOUT LOSING YOUR SHIRT! Robert A. Mason, JD, CELA Mason Law, PC Asheboro, North Carolina Savannah, Georgia
  2. 2. Planning Crisis• Playing The Odds – – By 2025 50% more with Alzheimers (Alzheimers Association) – By 2025 100% more 65+ with Diabetes (American Diabetes Association)
  3. 3. Planning Crisis• Playing The Odds – – 70% The Percentage of Those 65+ Who Will Need Some Level of Long Term Care Services – 30% to 40% The Percentage of Those 65+ Who Can Expect Nursing Home Level of Care
  4. 4. Planning Crisis• Playing The Odds – – 50% to 60% Percentage of Nursing Home Costs Paid by Medicaid – Government WILL Tighten Benefit Rules
  5. 5. Background – Long Term Care Two Types of Planning• CRISIS!!• Long Range
  6. 6. Background – Long Term Care Types of Long Term Care • In Home • Assisted • Skilled
  7. 7. Background – Long Term Care Financing Long Term Care• Private• Medicare• Long Term Care Insurance• Medicaid
  8. 8. NORTHCAROLINAMEDICAID BASICS
  9. 9. Medicaid Basics Asset Qualification TestsCountable vs Noncountable
  10. 10. Medicaid Basics Asset Qualification Tests• Major Noncountable/Nonincludible: – Residence (less than $536,000 equity if single applicant) – 1 Vehicle
  11. 11. Medicaid Basics Asset Qualification TestsMajor Noncountable/Nonincludible: – Term Insurance
  12. 12. Medicaid Basics Asset Qualification Tests Annuities – BE CAREFUL!!• Must be: nontransferable/nonassignable• Must be “Actuarially sound”
  13. 13. Medicaid Basics Asset Qualification TestsMajor Noncountable/Nonincludible: Certain Types of Trusts (More On These In A Minute)
  14. 14. Medicaid BasicsAsset Qualification Tests • Countable Assets: Everything Else!
  15. 15. Medicaid Basics Asset Qualification TestsMarried Couple Countable Limit: ONE-HALF Countable UP TO: $115,920 Single Limit: $2,000
  16. 16. MEDICAIDBASICS -ASSETTRANSFERS
  17. 17. Medicaid Basics Transfer Penalties• Transfers Less Than FMV Within 60 Months of Application • Penalty: 1 Month for each $6,300 Transferred
  18. 18. Medicaid Basics Transfer PenaltiesResulting Penalty BEGINS On DateOtherwise Financially Eligible AND in Skilled Facility
  19. 19. Medicaid Basics Transfer Penalties EXCEPTIONS • Interspousal• Disabled Adult Child • Sole Benefit Trusts
  20. 20. ESTATE RECOVERY
  21. 21. Estate Recovery • Mandated by Congress 1993• Directs DMA to Recover Against Estates of Deceased Recipients
  22. 22. Estate Recovery• Probate vs. Nonprobate
  23. 23. Estate RecoveryMajor Exception: Not If A Surviving Spouse • Major Exception: Not If A Surviving Disabled Child • Estates of Less Than $5,000 • Recoveries of Less Than $3,000
  24. 24. Estate Planning Issues –Working With The Rules
  25. 25. Rules Break! • Transfers More Than 5 Years Old: IRRELEVANT• Go To Nursing Home During 5 Years: Pay Remainder of 5 Years OR Undo Earlier Transfer
  26. 26. 5 Year Strategies• Give Assets Away – Many Negatives• “Income Only” Trust – Much Better Solution
  27. 27. Income Only Trust• Irrevocable – Sort Of• Income Continues• Great Tax Advantages
  28. 28. Income Only Trust• 5 Years To Be Fully Effective• What Happens If Need NH Within 5 Years? – Pay Difference Until 5 Years From Trust Set-up Has Elapsed – Remember: Difference Between Income and NH Cost
  29. 29. Income Only Trust• How Pay For Remainder of 5 Years? – Savings – LTC Insurance – VA Benefits? (Maybe as much as $2,054/mo)
  30. 30. Rules Break!Transfers By WILLS Don’t Count Against Medicaid Eligibility
  31. 31. Properly Structured Will• Leaving Assets To Others Will Not Affect Spouse & Medicaid• CAUTION: Leaving Everything To Spouse “Loads Up” Surviving Spouse
  32. 32. Rules Break!• If You Or Spouse Set Up Trust AND any Principal Can Possibly Be Distributed To You – WHOLE Trust Will Count• EXCEPT: Trusts Set Up Under A Will
  33. 33. Properly Structured Will• Leave Everything In Trust Under Will For Spouse• Trust MUST be Properly Drafted• Assets In Trust Will Not Count For Medicaid Purposes
  34. 34. CAUTION: Living Trusts• Most Living Trusts Won’t Do• Revocable Trusts – They may avoid probate, but they’re countable assets – Might Even Make a Home Countable – Usually Won’t Do What I Described
  35. 35. IN A NUTSHELL . . .• NEED FOR LONG TERM CARE: HIGH• COSTS GOING UP• GOV’T PRESSURE ON BENEFITS
  36. 36. IN A NUTSHELL . . .• GET INSURANCE IF YOU CAN• EVEN WITH INSURANCE HAVE AN OVERALL PLAN
  37. 37. IN A NUTSHELL . . .• MORE OPTIONS FOR COUPLES• SOME OPTIONS FOR SINGLES (IF YOU GET PLANNING!)• MOST EXPENSIVE: DO NOTHING
  38. 38. Now serving Central Carolina and Coastal Georgia Elder Law * Wills & Trusts * Guardianships All contents of this presentation © 2013 Mason Law, PC

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