5 Reasons to Hire an Attorney for Medicaid Planning

Many seniors and their families don’t use a lawyer to plan for long-term care or Medicaid, often because they’re afraid of the cost. But a qualified lawyer can help you save money in the long run as well as make sure you are getting the best care for your loved one.

Instead of taking steps based on what you’ve heard from others, doing nothing, or enlisting a non-lawyer referred by a nursing home, you can hire an elder law attorney. Here are a few reasons why you should at least consider this option:

#1 No conflict of interest

When nursing homes refer the families of residents to non-lawyers to assist in preparing the Medicaid application, the preparer has dual loyalties, both to the facility that provides the referrals and to the client applying for benefits. To the extent everyone wants the Medicaid application to be successful, there’s no conflict of interest. But it’s in the nursing home’s interest that the resident pay privately for as long as possible before going on Medicaid, while it’s in the nursing home resident’s interest to protect assets for the resident’s care or for the resident’s spouse or family. A lawyer hired to assist with Medicaid planning and the application has a duty of loyalty only to the client and will do her best to achieve the client’s goals.

#2 Saving money

Nursing homes can cost as much as $15,000 a month in some areas, so it is unusual for legal fees to equal the cost of even one month in the facility. It is not difficult to save this much in long-term care and probate costs. And most attorneys will consult with new clients at little or no cost to determine what might be achieved before the client pays a larger fee.

#3 Deep knowledge and experience

Professionals who work in any field on a daily basis over many years develop both the depth and breadth of experience and expertise to advise clients on how they might achieve their goals, whether those are maintaining independence and dignity, preserving funds for children and grandchildren, or staying home rather than moving to assisted living or a nursing home. Less experienced advisers, however well intentioned, can’t know what they don’t know.

#4 Malpractice insurance

While we should expect that every professional we work with will provide outstanding service and representation, sometimes things don’t work out. Fortunately there is a remedy if an attorney makes a mistake because almost all attorneys carry malpractice insurance. This is probably not the case with other advisers in the Medicaid arena.

#5 Peace of mind

While it’s possible that when you consult with an elder law attorney, the attorney will advise you that in your situation there is not much you can do to preserve assets or achieve Medicaid eligibility more quickly, the consultation will provide peace of mind that you have not missed an important opportunity. In addition, if obstacles arise during the process, the attorney will be there to work with you to find the optimal solution.

Medicaid rules provide multiple opportunities for nursing home residents to preserve assets for themselves, their spouses and children and grandchildren, especially those with special needs. There are more opportunities for those who plan ahead, but even at the last minute there are almost always still steps available to preserve some assets. It’s always worth checking out whether these are steps you would like to take.

 

Medicare’s Treatment of the Two Main Hospital Stay Options

Hospital patients who need additional care after being discharged from the hospital are usually sent to either an inpatient rehabilitation facility (IRF) or a skilled nursing facility (SNF). Although these facilities may look similar from the outside, Medicare offers very different coverage for each. While you may not have complete say in where you go after a hospital stay, understanding the difference between the two facilities can help you advocate for what you need and know what to expect with regard to Medicare coverage.

Inpatient Rehabilitation Facility vs. Skilled Nursing Facility

An IRF can be either part of a hospital or a stand-alone facility that offers intensive physical and occupational therapy under the supervision of a doctor and nurses. IRFs offer a minimum of three hours a day of rehabilitation therapy. But a SNF provides full-time nursing care. Patients also receive physical and occupational therapy, but the care is generally less intensive and specialized than in an IRF.

IRFs and Medicare

Medicare Part A covers a stay in an IRF in the same way it covers hospital stays. Medicare pays for 90 days of hospital care per “spell of illness,” plus an additional lifetime reserve of 60 days. A single “spell of illness” begins when the patient is admitted to a hospital or other covered facility, and ends when the patient has gone 60 days without being readmitted to a hospital or other facility. There is no limit on the number of spells of illness. However, the patient must satisfy a deductible before Medicare begins paying for treatment. This deductible, which changes annually, is $1,364 in 2019.

After the deductible is satisfied, Medicare will pay for virtually all hospital charges during the first 60 days of a recipient’s hospital stay. If the hospital stay extends beyond 60 days, the Medicare beneficiary begins shouldering more of the cost of his or her care. From day 61 through day 90, the patient pays a coinsurance of $341 a day in 2019. Beyond the 90th day, the patient begins to tap into his or her 60-day lifetime reserve. During hospital stays covered by these reserve days, beneficiaries must pay a coinsurance of $682 per day in 2019.

To qualify for care in an IRF, you must need 24-hour access to a doctor and a nurse with experience in rehabilitation. You must also be able to handle three hours of therapy a day (although there can be exceptions).

SNFs and Medicare

Medicare’s coverage of skilled nursing care is more limited. Medicare Part A covers up to 100 days of “skilled nursing” care per spell of illness. Beginning on day 21 of the nursing home stay, there is a copayment equal to one-eighth of the initial hospital deductible ($170.50 a day in 2019).

But the conditions for obtaining Medicare coverage of a nursing home stay are quite stringent. Here are the main requirements:

  • The Medicare recipient must enter the nursing home no more than 30 days after a hospital stay (meaning admission as an inpatient; “observation status” does not count) that itself lasted for at least three days (not counting the day of discharge).
  • The care provided in the nursing home must be for the same condition that caused the hospitalization (or a condition medically related to it).
  • The patient must receive a “skilled” level of care in the nursing facility that cannot be provided at home or on an outpatient basis. In order to be considered “skilled,” nursing care must be ordered by a physician and delivered by, or under the supervision of, a professional such as a physical therapist, registered nurse or licensed practical nurse. Moreover, such care must be delivered on a daily basis. (Few nursing home residents receive this level of care.)A new spell of illness can begin if the patient has not received skilled care, either in an SNF or in a hospital, for a period of 60 consecutive days. The patient can remain in the SNF and still qualify as long as he or she does not receive a skilled level of care during that 60 days.

Keep in mind that some or all of Medicare’s deductibles and co-payments for both IRF and SNF care may be covered by Medicare supplemental insurance, also called Medigap coverage.

 

Use Estate Planning to Enrich Your Family With More Than Just Material Wealth

In the weeks before her death from ovarian cancer, author Amy Krouse Rosenthal gave her husband one of the most treasured gifts a person could receive.

She penned the touching essay “You May Want to Marry My Husband” in the New York Times as a final love letter to him. The essay took the form of a heart-wrenching yet-humorous dating profile that encouraged him to begin dating again once she was gone. In her opening description of Jason, she writes:

“He is an easy man to fall in love with. I did it in one day.”

What followed was an intimate list of attributes and anecdotes, highlighting what she loved most about Jason. It reads like a love story, encompassing 26 years of marriage, three grown children, and a bond that will last forever. She finished the essay on Valentine’s Day, concluding with:

“The most genuine, non-vase-oriented gift I can hope for is that the right person reads this, finds Jason, and another love story begins.” Just 10 days after the essay was published in March 2017, Amy died at age 51.

Finding meaning again

Amy’s essay immediately went viral, and Jason received countless letters from women across the globe. Although he has yet to begin a new relationship, Jason said the outpouring of letters gave him “solace and even laughter” in the darkest days following his wife’s death.

Just over a year later, Jason wrote his own essay for the Times, “My Wife Said You May Want to Marry Me,” in which he expressed how grateful he was for Amy’s words and recounted the lessons he’d learned about loss and grief since her passing. He said his wife’s parting gift “continues to open doors for me, to affect my choices, to send me off into the world to make the most of it.” Jason has since given a TED Talk on his grieving process in hopes of helping others deal with loss, something he said he never would’ve done without Amy’s motivation.

Toward the end of his essay, Jason gave readers a bit of advice for how they can provide their loved ones with a similar gift:

“Talk with your mate, your children, and other loved ones about what you want for them when you are gone,” he wrote. “By doing this, you give them liberty to live a full life and eventually find meaning again.”

Preserving your intangible assets

This moving story highlights what could be the most  valuable, yet often-overlooked aspect of estate planning. Planning isn’t just about preserving and passing on your financial wealth and property in the event of your death or incapacity. When done right, it equates to sharing your family’s stories, values, life lessons, and experiences, so your legacy carries on long after you (and your money) are gone.

Indeed, as the Rosenthals demonstrate, these intangible assets can be among the most profound gifts you can give. Of course, not everyone has the talent or time to write a similarly moving essay or have it published in the New York Times, nor is that necessary.

We recognize the enormous value these assets represent, along with the inherent challenge of documenting our life experiences. Given this, in our estate plans, we’ve built in a process, known as Family Wealth Legacy Passages, for preserving and passing on your unique treasures and gifts.

Family Wealth Legacy Passages

Our Family Wealth Legacy Passages (included in all of our estate plans) guide you to create a customized recording in which you share your most insightful memories and life lessons with those you leave behind. We’ve developed a series of helpful questions and prompts to make the process of sharing your life experiences not only easy, but enjoyable. And this isn’t something you have to do on your own—which you know you wouldn’t get around to—as we do it with you as an integral part of your planning services.

In the end, your family’s most precious wealth is not money, but the memories you make, the values you instill, and the lessons you hand down. And left to chance, these assets are likely to be lost forever.

If you want to pass down a truly meaningful legacy, one that can provide the kind of inspiration Amy’s letter did for Jason, contact our firm. Our customized estate planning services will preserve and pass on not only your financial wealth, but your most treasured family values as well. Start by scheduling a Planning Session, where we’ll discuss what kind of assets you have, what matters most to you and what you want to leave behind.

Robin Williams’ Family Fight Over Personal Property is NOT So Funny

In 2014, the famous actor and comedian Robin Williams died. In 2015, his wife of 3 years, Susan Williams, ended up in a bitter court battle with his children from prior marriages over personal items that belonged to him. Williams’ wife claimed that his children had taken personal items from the couples’ Tiburon, CA home without her permission.

According to the children, these items were part of the inventory of personal property conveyed by certain trusts that their father had established for their benefit. Williams’ trust granted his children his memorabilia and awards from the entertainment industry, along with other items.

Ambiguity? Or Theft?

His widow, Susan Williams, claimed that since they lived together in their own house in Tiburon, and there was a separate residence in Napa, it stands to reason he wanted the children to receive items from the Napa residence and she was to receive the property from the Tiburon home.

Attorneys for the two sides appeared to offer conflicting characterizations of the court case. Susan Williams’ attorney said she was just seeking a clarification from the court. But the attorney for the children said she had accused them of stealing items that belonged to her.

The Robin Williams’ estate underscores the need to specify exactly which personal items you are giving to family members by trust or will so there is no ambiguity once you pass.  It’s this ambiguity that causes family in-fighting and costs excessive amounts of time, money and energy, even (and maybe even especially) when the estate is of small value.

Blended Families Need to be Clear

Especially in a blended family situation, like with Robin Williams’ family, it’s important to be extremely clear about whether children from a prior marriage should receive any money or other assets at the time of your death or if they should wait for all inheritance until the death of your spouse.

This is one of the situations that is most likely to result in strife and complication after death, and it’s so straightforward and easy to deal with ahead of time.

The best way to learn about protecting your family is to talk with us about a Planning Session, where we can identify the best strategies for you to provide for and protect the financial security of your loved ones. Contact us at (813) 514-2946 to learn more about how you can get this valuable session for free.

Know the Difference: Wills vs. Trusts

Do you know the differences between “will” and “trust”? Both are useful estate planning devices that serve different purposes, and both can work together to create a complete estate plan.

Will characteristics:

  • A will goes into effect only after you die
  • A will only covers property that is in your name at your death
  • A will passes through a court process called Probate. In Probate, the court oversees the will’s administration and ensures the will is valid and the property gets distributed the way the deceased wanted.
  • Because a will passes through Probate, it’s a public record.
  • A will allows you to name a guardian for children (Note: Our firm recommends that in addition to this, you use a stand alone guardian nomination.)

Trust characteristics:

  • A trust can be used to begin distributing property before death, at death or afterwards.
  • A trust covers only property that has been transferred to the trust. In order for property to be included in a trust, it must be put in the name of the trust.
  • A trust passes property outside of probate, so a court does not need to oversee the process, which can save time and money.
  • A trust remains private Unlike a will, which becomes part of the public record, a trust can remain private.

Consult with a qualified attorney to advise you on how best to use a will and a trust in your estate plan.

This article is a service of the Law Firm of Myrna Serrano Setty, P.A. We don’t just draft documents, we guide our clients to help make things as easy as possible for themselves and their families in case of death or disability.

Important Changes in Veterans’ Long-Term Care Benefits

It’s now harder than ever for veterans to qualify for long-term care benefits.

Recently, the Department of Veterans Affairs (VA) finalized new rules that make it more difficult to qualify for long-term care benefits. The rules establish an asset limit, a look-back period, and asset transfer penalties for claimants applying for VA pension benefits that require a showing of financial need. The main benefit for those needing long-term care is Aid and Attendance.

The VA offers Aid and Attendance to low-income veterans (or their spouses) who are in nursing homes or who need help at home with everyday tasks like dressing or bathing. Aid and Attendance provides money to those who need assistance.

Currently, to be eligible for Aid and Attendance a veteran (or the veteran’s surviving spouse) must meet certain income and asset limits. The asset limits aren’t specified, but $80,000 is the amount usually used. However, unlike with the Medicaid program, there historically have been no penalties if an applicant divests him- or herself of assets before applying. That is, before now you could transfer assets over the VA’s limit before applying for benefits and the transfers would not affect eligibility.

New Regulations in Effect October 18, 2018

Not so anymore. The new regulations set a net worth limit of $123,600, which is the current maximum amount of assets (in 2018) that a Medicaid applicant’s spouse is allowed to retain. But in the case of the VA, this number will include both the applicant’s assets and income. It will be indexed to inflation in the same way that Social Security increases. An applicant’s house (up to a two-acre lot) will not count as an asset even if the applicant is currently living in a nursing home. Applicants will also be able to deduct medical expenses — now including payments to assisted living facilities, as a result of the new rules — from their income.

Three-Year Look-Back Provisions

The regulations also establish a three-year look-back provision. Applicants will have to disclose all financial transactions they were involved in for three years before the application. Applicants who transferred assets to put themselves below the net worth limit within three years of applying for benefits will be subject to a penalty period that can last as long as five years. This penalty is a period of time during which the person who transferred assets is not eligible for VA benefits. There are exceptions to the penalty period for fraudulent transfers and for transfers to a trust for a child who is unable to “self-support.”

Under the new rules, the VA will determine a penalty period in months by dividing the amount transferred that would have put the applicant over the net worth limit by the maximum annual pension rate (MAPR) for a veteran with one dependent in need of aid and attendance. For example, assume the net worth limit is $123,600 and an applicant has a net worth of $115,000. The applicant transferred $30,000 to a friend during the look-back period. If the applicant had not transferred the $30,000, his net worth would have been $145,000, which exceeds the net worth limit by $21,400. The penalty period will be calculated based on $21,400, the amount the applicant transferred that put his assets over the net worth limit (145,000-123,600).

The new rules went into effect on October 18, 2018. The VA will disregard asset transfers made before that date. Applicants may still have time to get through the process before the rules are in place.

Veterans or their spouses who think they may be affected by the new rules should contact their attorney immediately.

This article is a service of the Law Firm of Myrna Serrano Setty, P.A. We don’t just draft documents, we guide our clients to make the best choices for themselves and their loved ones.

5 Planning Pointers for Parents with Children with Special Needs

1. Buy enough life insurance.

A parent is irreplaceable, but someone will have to fill in if the worst happens. It may be siblings or other relatives. In all likelihood, that family will have to pay for at least some services the parent or parents had provided when able. If the estate is not large enough for this purpose, life insurance proceeds can help. Premiums for second-to-die insurance (which pays off only when the second of two parents passes away) can be surprisingly low.

2. Set up a trust.

Any funds left for a child with special needs, whether from an estate or the proceeds of a life insurance policy, should be held in trust for his or her benefit. Leaving money for anyone with a special need jeopardizes public benefits. Many people with special needs cannot manage funds — especially large amounts. Some families disinherit children with special needs, relying on their siblings to care for them. This approach is fraught with potential problems. Siblings can be sued, get divorced, disagree on their responsibilities, or run off with the funds. It can also cause tax problems for the siblings. The best approach is a trust fund set aside for the child with special needs.

3. Legally Document Your Guardianship Choices  

While a will and the appointment of a guardian is important for anyone with minor children, it is doubly so if the child has special needs. Finding the right guardian can be difficult. In some cases, the care needs of the child may be so demanding that he or she will need a different guardian from his or her siblings. The parents need to make these determinations while they can. The will is the vehicle for the appointment of a guardian.

An adult child may also require a guardian when the parent can no longer serve in this role (whether officially appointed or not). It will probably not be legally possible to officially appoint a successor guardian once the parent is out of the picture. So, it may make sense to begin making the transition to a new guardian while the parent is able to assist in the process. This can be in the form of a co-guardianship, or passing the baton to a successor guardian.

4. Write down the care plan.

All parents caring for children with special needs are advised to write down what any successor caregiver would need to know about the child and what the parent’s wishes are for his or her care. Should the child be in a group home, live with a parent, be on his or her own? Usually, the parent knows best, but needs to pass on the information. The memo or letter can be kept in the attorney’s files with the parent’s estate plan.

5. Coordinate with other family members.

Even a carefully developed plan can be sabotaged by a well-meaning relative who leaves money directly to the child with a special need. If a trust is created for the benefit of the child, grandparents and other family members should be told about it so that they can direct any bequest they may like to leave to that child through the trust.

 

This article is a service of the Law Firm of Myrna Serrano Setty, P.A. We don’t just draft documents, we empower families to make the best choices for the sake of the people they love. Call our office today to schedule a consultation.

 

3 Reasons Why Giving Your House to Your Children Isn’t the Best Way to Protect it From Medicaid

You may be afraid of losing your home if you have to enter a nursing home and apply for Medicaid. This is a well-founded fear. That’s because after you die, the state must try to recoup from your estate through a process called “estate recovery” and your family could lose your home.

So you might be tempted to give your home to your children now in order to protect it from estate recovery later. But that’s not a good idea.

Three Reasons Not to Give Your House To Your Children:

1. Medicaid ineligibility

Transferring your house to your children (or someone else) may make you ineligible for Medicaid for a period of time. The state Medicaid agency looks at any transfers made within five years of the Medicaid application. If you made a transfer for less than market value within that time period, the state will impose a penalty period during which you will not be eligible for benefits. Depending on the house’s value, the period of Medicaid ineligibility could stretch on for years, and it would not start until the Medicaid applicant is almost completely out of money.

There are circumstances under which you can transfer a home without penalty. So consult a qualified elder law attorney before making any transfers. You may freely transfer your home to the following individuals without incurring a transfer penalty:

• Your spouse

• A child who is under age 21 or who is blind or disabled

• Into a trust for the sole benefit of a disabled individual under age 65 (even if the trust is for the benefit of the Medicaid applicant, under certain circumstances)

• A sibling who has lived in the home during the year preceding the applicant’s institutionalization and who already holds an equity interest in the home

• A “caretaker child,” who is defined as a child of the applicant who lived in the house for at least two years prior to the applicant’s institutionalization and who during that period provided care that allowed the applicant to avoid a nursing home stay.

2. Loss of control

By transferring your house to your children, you will no longer own the house, which means you will not have control of it. Your children can do what they want with it. In addition, if your children are sued or get divorced, the house may be vulnerable to their creditors.

3. Adverse tax consequences

Inherited property receives a “step up” in basis when you die, which means the basis is the current value of the property. However, when you give property to a child, the tax basis for the property is the same price that you purchased the property for. If your child sells the house after you die, he or she would have to pay capital gains taxes on the difference between the tax basis and the selling price. The only way to avoid some or all of the tax is for the child to live in the house for at least two years before selling it. In that case, the child can exclude up to $250,000 ($500,000 for a couple) of capital gains from taxes.

There are other ways to protect a house from Medicaid estate recovery, including putting the home in a trust. To find out the best option in your circumstances, consult with our office.

This article is a service of the Law Firm of Myrna Serrano Setty, P.A. We don’t just draft documents, we help you make the best decisions for the sake of the people that you love.