Estate and Medcaid Planning: 2018 Providence Retired Teachers Association

1. HEFFNER &
ASSOCIATES
ELDER LAW
Mark B. Heffner, Esq. , CELA
Heffner & Associates
615 Jefferson Boulevard
Warwick, Rhode Island
401-737-1600
mheffner@hefflaw.com
www.hefflaw.com
Estate and Medicaid Planning

2. HEFFNER &
ASSOCIATES
ELDER LAW
Disclaimer
•Materials are for general education and should
not be substituted for consultation with a
competent estate planning attorney in your
state
•Materials presented from the perspective of
Rhode Island
•Rules and practice vary significantly from state
to state and are subject to change

3. HEFFNER &
ASSOCIATES
ELDER LAW
Lifetime Planning: Health Care
Decisionmaking
Advance Directive
Durable Power of
Attorney for Health
Care
Living Will
Selection of Agent
Selection of Successor Agent

4. HEFFNER &
ASSOCIATES
ELDER LAW
Lifetime Planning: Financial
Decisionmaking
Joint accounts: Be careful!
Durable Power of Attorney for finances
Determination of
Powers to provide
Again, selection
successor Agent
Selection of Agent
(aka, “Attorney in
fact”)
Ex: Gifting and
Estate planning

5. HEFFNER &
ASSOCIATES
ELDER LAW
Lifetime Planning: 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
Provide no protection for assets for
nursing home cost
Instead, would need Irrevocable Trust

6. HEFFNER &
ASSOCIATES
ELDER LAW
Planning for post-death
Will—requires probate
Selection of Executor—same person
generally as agent under financial DPOA
Revocable Trust—if “funded” will avoid
probate for those assets
Note: Need to check beneficiary
designations (IRAs, life insurance,
annuities), joint titling, as general “trump”
Will or Trust provisions

7. HEFFNER &
ASSOCIATES
ELDER LAW
What happens if long-term care
needed?
Medicare--limited long term care (LTC)
coverage 20 days full payment, up to 80
additional days with co-pay
($167.50/day)
Medicare LTC coverage initially
applicable if individual has a three day
prior hospital admission & continues to
require skilled care
After that….

9. HEFFNER &
ASSOCIATES
ELDER LAW
Private Pay costs for nursing home
care
What is the average monthly cost of a nursing
home in Rhode Island (according to the Rhode
Island Department of Human Services)?
$9,581/month (> $300/day)
Actual costs range from approximately
$8,000/month — $12,000/month

10. HEFFNER &
ASSOCIATES
ELDER LAW
Public benefits available for long-
term care
Medicare: (limited) skilled nursing home
& (potentially unlimited) home care
Medicaid: pays for skilled nursing home
and (limited) home & community-based
services
Veterans benefits: (limited) nursing
home and Aid and Attendance benefits

11. HEFFNER &
ASSOCIATES
ELDER LAW
What is Medicaid?
•It is not Medicare!
•Medicaid: in addition to general criteria (age,
blind, disabled) & needing a level of care, must
also fall within financial criteria (assets, income,
transfer restrictions)
•Medicare: insurance model; no asset or
income qualification requirements
•Substantial state to state variations

12. HEFFNER &
ASSOCIATES
ELDER LAW
Resources
Excluded (Single Person)
•Home (equity value limit:
$572K) if “intent to return”
•Household goods &
personal effects( no value
limit, unless exceptional)
•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)
•Funds otherwise
available (limit: $4000)
Available
EVERYTHING
ELSE

13. 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)—one-
half of total joint
resources; minimum
$24,720-maximum
$123,600

14. 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
Parent gives adult children each $10,000
Uncompensated transfer: $30,000

15. HEFFNER &
ASSOCIATES
ELDER LAW
Medicaid Planning Techniques
Highly individualized—one size definitely does not
fit all!
• Spenddowns—debts, taxes, burial contracts.
• Specialized annuities—married couples only
“Crisis planning” techniques include:
• “Reverse half a loaf” planning
• Many more opportunities exist for married couples;
however still “never too late” for single individuals

16. HEFFNER &
ASSOCIATES
ELDER LAW
Medicaid Planning Techniques
Non-crisis, or “pre-crisis” planning techniques
include:
• Make transfers, incur five year lookback period
• Transfers—must be mindful of tax implications,
creditors—grantor Irrevocable Trusts useful
device.
• Durable Powers of Attorney with estate and
Medicaid planning authority provided to agent
• Again, highly individualized as to what techniques
to use & timing of use of techniques

17. HEFFNER &
ASSOCIATES
ELDER LAW
How to get started
Arrange for consultation with competent
elder attorney
Preparation: provide elder law attorney wi
individual family, financial and health
information
Initial meeting should be at least an hour
Expect fee for initial consultation

18. HEFFNER &
ASSOCIATES
ELDER LAW
National Elder Law Foundation
www.nelf.org
Locating competent elder law attorney
Certified Elder Law Attorney
Provides interactive state map of Certified
Elder Law Attorneys (CELA) in each state

19. HEFFNER &
ASSOCIATES
ELDER LAW
Mark B. Heffner, Esq. , CELA
Heffner & Associates
615 Jefferson Boulevard
Warwick, Rhode Island
401-737-1600
mheffner@hefflaw.com
www.hefflaw.com