Q&A- Special Needs Estate Planning

Q.- What is a Special (also called Supplemental) Needs Trust (“SNT”) and when do I need it?

A.- Various government benefits like Medicaid, SSI cash payments, housing subsidies, mental health care, and Department of Social Services (DSS) group home or other housing are provided free, or at minimal cost, to disabled people, who have little or no money. Whether paid directly to a disabled person, or into an ordinary trust, most gifts and inheritances and accident, workers compensation, divorce, and other litigation recoveries jeopardize government aid and even may have to repay prior benefits. However, these amounts won’t disqualify a disabled person for government aid, if they are paid into an SNT, for the disabled person, instead of being paid directly, or an ordinary trust. Thus, an SNT should be part of the estate plan of every parent and grandparent of anyone who may be too disabled to work. A SNT should be created, even if your loved one doesn’t yet receive benefits, because government aid may be needed later, especially, if disabilities worsen with age. Also, many children can’t qualify for disability aid until age eighteen.

Q.- Why do I Need a Special Needs Trust to Protect Divorce and Personal Injury Recoveries?

A.- A divorce settlement may jeopardize SSI, Medicaid and other benefits unless alimony and child support are paid into a Special Needs Trust. A disabled person who has a personal injury claim, divorce award, or worker compensation recovery should ask his lawyer to arrange for an SNT before the claim is resolved. Don’t rely on your attorney to provide for an SNT, as many general attorneys aren’t familiar with this area of the law.

Q.- How Can a Special Needs Trust Minimize DSS & Mental Health Fees & Liens?

A.- Government agencies may recoup the cost of some public benefits (e.g. group home and other residential placements and certain mental health care) from a gift, inheritance, or other amount payable to a disabled person or an ordinary trust for a disabled person. In contrast, gifts and inheritances payable to a well designed Special Needs Trust need not repay public benefits. Consequently, dying without a will or leaving amounts to a disabled son or daughter outright or through an ordinary trust, may be equivalent to leaving your estate to the Government.

Q.- Why do I Need a Special Needs Trust Even If My Disabled Child Lives at Home?

A.- Even though your disabled child lives with you now, he or she eventually may be placed in a DSS or mental health placement or otherwise require long term care. Consequently, your estate may be forced to fund group home, medical, and other costs that would be covered by government programs if your estate plan included a Special Needs Trust.

Q.- When and How do I Set Up a Special Needs Trust?

A.- To create a Special Needs Trust, you typically sign a written trust instrument when you sign your will. Although you don't have to fund your SNT until you pass away, you must sign the trust instrument during your life time. If you don't, your child will face substantial costs, which wouldn't arise if an SNT were in place when you die. Because an SNT must comply with complex and arcane government benefit rules, an SNT should only be drafted by a lawyer familiar with SSI, Medicaid, DSS and other government program rules.

Q.- How Can Special Needs Trusts Reduce Costs If I Need Nursing Home Care?

A.- Medicaid generally pays nursing home costs for people with minimal resources except that a temporary Medicaid disqualification period usually applies to a person who makes gifts to reduce resources to Medicaid limits. However, an individual may qualify for Medicaid immediately by making gifts to a “sole benefit” SNT. Gifts to a “sole benefit” SNT are exempt from gift disqualification penalties and also avoid jeopardizing the SNT beneficiary’s government aid. A “sole benefit” SNT must satisfy special rules not applicable to ordinary SNTs.

About Senior Life Care Planning, LLC

Senior Life Care Planning, LLC ("SLCP) is limited exclusively aging options and issues, finding the best places to live, the care you neeed and to protect your assets to ensure you quality of life. David Wingate, President of SLCP, is a recognized leader in the community in this important and demanding area of elder issues. He is Vice President of the national organization of Life Care Planning Law Firms Association, a member of the National Academy of Elder Law Attorneys, the State of Maryland Bar Association – Elder Law section, Elder Provider Council, Elder Task Force, and numerous other senior organizations.

Under a holistic approach, not only do we in counsel clients about planning, but we also assist our clients in Life Care Planning for possible long-term care needs. Locating the appropriate type of care, coordinating private and public resources to finance the cost of care, and working to ensure our client’s quality of life is what we do at Office.

Identity Theft: Tips on Combating a Growing Crime

What is identity theft? Identity theft occurs when someone uses your personally identifying information, like your name, Social Security number, or credit card number, without your permission, to commit fraud or other crimes. The FTC estimates that as many as 9 million Americans have their identities stolen each year.
In fact, you or someone you know may have experienced some form of identity theft. The crime takes many forms. Identity thieves may rent an apartment, obtain a credit card, or establish a telephone account in your name. You may not find out about the theft until you review your credit report or a credit card statement and notice charges you didn’t make—or until you’re contacted by a debt collector.
Identity theft is serious. While some identity theft victims can resolve their problems quickly, others spend hundreds of dollars and many days repairing damage to their good name and credit record. Some consumers victimized by identity theft may lose out on job opportunities, or be denied loans for education, housing or cars because of negative information on their credit reports. In rare cases, they may even be arrested for crimes they did not commit.
How do thieves steal an identity? Identity theft starts with the misuse of your personally identifying information such as your name and Social Security number, credit card numbers, or other financial account information. For identity thieves, this information is as good as gold.
Skilled identity thieves may use a variety of methods to get hold of your information, including:
Dumpster Diving. They rummage through trash looking for bills or other paper with your personal information on it.
Skimming. They steal credit/debit card numbers by using a special storage device when processing your card.
Phishing. They pretend to be financial institutions or companies and send spam or pop-up messages to get you to reveal your personal information. Changing Your Address. They divert your billing statements to another location by completing a change of address form. Old-Fashioned Stealing. They steal wallets and purses; mail, including bank and credit card statements; pre-approved credit offers; and new checks or tax information. They steal personnel records, or bribe employees who have access.
Pretexting. Pretexting is the practice of getting your personal information under false pretenses. Pretexters sell your information to people who may use it to get credit in your name, to steal your assets, or to investigate or sue you. Pretexting is against the law. Pretexters use a variety of tactics to get your personal information. For example, a pretexter may call, claim he's from a research firm, and ask you for your name, address, birth date, and social security number. When the pretexter has the information he wants, he uses it to call your financial institution. He pretends to be you or someone with authorized access to your account. He might claim that he's forgotten his checkbook and needs information about his account. In this way, the pretexter may be able to obtain other personal information about you such as your bank and credit card account numbers, information in your credit report, and the existence and size of your savings and investment portfolios.

What do thieves do with a stolen identity? Once they have your personal information, identity thieves use it in a variety of ways:
Credit card fraud: They may open new credit card accounts in your name. When they use the cards and don't pay the bills, the delinquent accounts appear on your credit report. They may change the billing address on your credit card so that you no longer receive bills, and then run up charges on your account. Because your bills are now sent to a different address, it may be some time before you realize there's a problem.
Phone or utilities fraud: They may open a new phone or wireless account in your name, or run up charges on your existing account. They may use your name to get utility services like electricity, heating, or cable TV.
Bank/finance fraud: They may create counterfeit checks using your name or account number. They may open a bank account in your name and write bad checks. They may clone your ATM or debit card and make electronic withdrawals your name, draining your accounts. They may take out a loan in your name.
Government documents fraud: They may get a driver's license or official ID card issued in your name but with their picture. They may use your name and Social Security number to get government benefits. They may file a fraudulent tax return using your information.
Other fraud: They may get a job using your Social Security number. They may rent a house or get medical services using your name. They may give your personal information to police during an arrest. If they don't show up for their court date, a warrant for arrest is issued in your name.

How can you find out if your identity was stolen? The best way to find out is to monitor your accounts and bank statements each month, and check your credit report on a regular basis. If you check your credit report regularly, you may be able to limit the damage caused by identity theft.
Unfortunately, many consumers learn that their identity has been stolen after some damage has been done. You may find out when bill collection agencies contact you for overdue debts you never incurred. You may find out when you apply for a mortgage or car loan and learn that problems with your credit history are holding up the loan. You may find out when you get something in the mail about an apartment you never rented, a house you never bought, or a job you never held.
What are the steps I should take if I'm a victim of identity theft? If you are a victim of identity theft, take the following four steps as soon as possible, and keep a record with the details of your conversations and copies of all correspondence.
1. Place a fraud alert on your credit reports, and review your credit reports. Fraud alerts can help prevent an identity thief from opening any more accounts in your name. Contact the toll-free fraud number of any of the three consumer reporting companies below to place a fraud alert on your credit report. You only need to contact one of the three companies to place an alert. The company you call is required to contact the other two, which will place an alert on their versions of your report, too. If you do not receive a confirmation from a company, you should contact that company directly to place a fraud alert.
Equifax: 1-800-525-6285; www.equifax.com; P.O. Box 740241, Atlanta, GA 30374-0241 Experian: 1-888-EXPERIAN (397-3742); www.experian.com; P.O. Box 9532, Allen, TX 75013 TransUnion: 1-800-680-7289; www.transunion.com; Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92834-6790

Once you place the fraud alert in your file, you're entitled to order one free copy of your credit report from each of the three consumer reporting companies, and, if you ask, only the last four digits of your Social Security number will appear on your credit reports. Once you get your credit reports, review them carefully.
Look for inquiries from companies you haven't contacted, accounts you didn't open, and debts on your accounts that you can't explain. Check that information, like your Social Security number, address(es), name or initials, and employers are correct. If you find fraudulent or inaccurate information, get it removed. When you correct your credit report, use a cover letter explaining your request, to get the fastest and most complete results. Continue to check your credit reports periodically, especially for the first year after you discover the identity theft, to make sure no new fraudulent activity has occurred.

2. Close the accounts that you know, or believe, have been tampered with or opened fraudulently. Call and speak with someone in the security or fraud department of each company. Follow up in writing, and include copies (NOT originals) of supporting documents. It's important to notify credit card companies and banks in writing. Send your letters by certified mail, return receipt requested, so you can document what the company received and when. Keep a file of your correspondence and enclosures. When you open new accounts, use new Personal Identification Numbers (PINs) and passwords. Avoid using easily available information like your mother's maiden name, your birth date, the last four digits of your Social Security number or your phone number, or a series of consecutive numbers.
If the identity thief has made charges or debits on your accounts, or has fraudulently opened accounts, ask the company for the forms to dispute those transactions: For charges and debits on existing accounts, ask the representative to send you the company's fraud dispute forms. If the company doesn't have special forms, use the sample letter to dispute the fraudulent charges or debits. In either case, write to the company at the address given for "billing inquiries," NOT the address for sending your payments.
For new unauthorized accounts, you can either file a dispute directly with the company or file a report with the police and provide a copy, called an “Identity Theft Report,” to the company. If you want to file a dispute directly with the company, and do not want to file a report with the police, ask if the company accepts the FTC’s ID Theft Affidavit. If it does not, ask the representative to send you the company's fraud dispute forms. However, filing a report with the police and then providing the company with an Identity Theft Report will give you greater protection. For example, if the company has already reported these unauthorized accounts or debts on your credit report, an Identity Theft Report will require them to stop reporting that fraudulent information. Use the sample letter to explain to the company the rights you have by using the Identity Theft Report. Once you have resolved your identity theft dispute with the company, ask for a letter stating that the company has closed the disputed accounts and has discharged the fraudulent debts. This letter is your best proof if errors relating to this account reappear on your credit report or you are contacted again about the fraudulent debt.

3. File a complaint with the Federal Trade Commission. You can file a complaint with the FTC using the online complaint form; or call the FTC's Identity Theft Hotline, toll-free: 1-877-ID-THEFT (438-4338); TTY: 1-866-653-4261; or write Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580. Be sure to call the Hotline to update your complaint if you have any additional information or problems. By sharing your identity theft complaint with the FTC, you will provide important information that can help law enforcement officials across the nation track down identity thieves and stop them. The FTC can refer victims' complaints to other government agencies and companies for further action, as well as investigate companies for violations of laws the agency enforces. Additionally, you can provide a printed copy of your online Complaint form to the police to incorporate into their police report. The printed FTC ID Theft Complaint, in conjunction with the police report, can constitute an Identity Theft Report and entitle you to certain protections.

This Identity Theft Report can be used to (1) permanently block fraudulent information from appearing on your credit report; (2) ensure that debts do not reappear on your credit report; (3) prevent a company from continuing to collect debts that result from identity theft; and (4) place an extended fraud alert on your credit report.

4. File a report with your local police or the police in the community where the identity theft took place. Call your local police department and tell them that you want to file a report about your identity theft. Ask them if you can file the report in person. If you cannot, ask if you can file a report over the Internet or telephone. See below for information about Automated Reports.
If the police are reluctant to take your report, ask to file a "Miscellaneous Incident" report, or try another jurisdiction, like your state police. You also can check with your state Attorney General's office to find out if state law requires the police to take reports for identity theft. When you go to your local police department to file your report, bring a printed copy of your FTC ID Theft Complaint form, your cover letter, and your supporting documentation. The cover letter explains why a police report and an ID Theft Complaint are so important to victims. Ask the officer to attach or incorporate the ID Theft Complaint into their police report. Tell them that you need a copy of the Identity Theft Report (the police report with your ID Theft Complaint attached or incorporated) to dispute the fraudulent accounts and debts created by the identity thief. (In some jurisdictions the officer will not be able to give you a copy of the official police report, but should be able to sign your Complaint and write the police report number in the “Law Enforcement Report” section.)

How long can the effects of identity theft last? It's difficult to predict how long the effects of identity theft may linger. That's because it depends on many factors including the type of theft, whether the thief sold or passed your information on to other thieves, whether the thief is caught, and problems related to correcting your credit report. Victims of identity theft should monitor financial records for several months after they discover the crime. Victims should review their credit reports once every three months in the first year of the theft, and once a year thereafter. Stay alert for other signs of identity theft. Don't delay in correcting your records and contacting all companies that opened fraudulent accounts. Make the initial contact by phone, even though you will normally need to follow up in writing. The longer the inaccurate information goes uncorrected, the longer it will take to resolve the problem.

What can you do to help fight identity theft? A great deal. Awareness is an effective weapon against many forms identity theft. Be aware of how information is stolen and what you can do to protect yours, monitor your personal information to uncover any problems quickly, and know what to do when you suspect your identity has been stolen. Armed with the knowledge of how to protect yourself and take action, you can make identity thieves' jobs much more difficult. You can also help fight identity theft by educating your friends, family, and members of your community.
The FTC has prepared a collection of easy-to-use materials to enable anyone regardless of existing knowledge about identity theft to inform others about this serious crime.

SAMPLE DISPUTE LETTER FOR EXISTING ACCOUNTS
Date] [Your Name] [Your Address] [Your City, State, Zip Code] [Your Account Number] [Name of Creditor] Billing Inquiries [Address] [City, State, Zip Code]

Dear Sir or Madam: I am writing to dispute a fraudulent [charge/debit] on my account in the amount of $___. I am a victim of identity theft, and I did not make this [charge/debit]. I am requesting that the [charge be removed/the debit reinstated], that any finance and other charges related to the fraudulent amount be credited, as well, and that I receive an accurate statement. Enclosed is a copy of my Identity Theft Report supporting my position. In addition, I am enclosing a copy of sections 605B, 615(f) and 623(a)(6) of the Fair Credit Reporting Act (FCRA), which detail your responsibilities as an information furnisher to consumer reporting agencies in response to the Identity Theft Report I am providing. These enclosures also detail your responsibilities that apply in the event you receive from a consumer reporting agency notice under section 605B of the FCRA that information you provided to is the result of identity theft. Please investigate this matter and correct the fraudulent [charge/debit] as soon as possible.

Sincerely, [Your Name]
Enclosures: Identity Theft Report FCRA Sections 605B, 615(f), 623(a)(6)

Crime Prevention Tips for Seniors

Crime and the fear of crime create special problems for the elderly. Crime prevention is everyone's responsibility, not just a job for law enforcement. Seniors can learn how to protect themselves from crime by following these simple, commonsense suggestions. Share these tips with your neighbors and friends, to make it tough for criminals to work in your neighborhood.

AT HOME . . .
1. Never open your door automatically. Install and use a peephole.
2. Lock your doors and windows. (Three quarters of the burglaries involving older persons involved unlocked doors and windows; and, less than one half of these robberies are reported.) Keep your garage doors locked.
3. Vary your daily routine.
4. Use "Neighbor Watch" to keep an eye on your neighborhood. A concerned neighbor is often the best protection against crime because suspicious persons and activities are noticed and reported to police promptly.
5. Don't leave notes on the door when going out.
6. Leave lights on when going out at night; use a timer to turn lights on and off when you are away for an extended period.
7. Notify neighbors and the police when going away on a trip. Cancel deliveries such as newspapers and arrange for someone - a neighbor's child, perhaps - to mow the lawn if need be. Arrange for your mail to be held by the Post Office, or ask a neighbor to collect it for you.
8. Be wary of unsolicited offers to make repairs to your home. Deal only with reputable businesses.
9. Keep an inventory with serial numbers and photographs of resaleable appliances, antiques and furniture. Leave copies in a safe place.
10. Don't hesitate to report crime or suspicious activities.
11. Install deadbolt locks on all your doors.
12. Keep your home well lit at night, inside and out; keep curtains closed.
13. Ask for proper identification from delivery persons or strangers. Don't be afraid of asking . . . if they are legitimate they won't mind.
14. If a stranger asks to use your telephone, offer to place the call for him or her yourself.
15. Never let a stranger into your home. Do not leave notes on your door when you are gone, and do not hide your keys under the mat or in other conspicuous places.
16. Never give out information over the phone indicating you are alone or that you won't be home at a certain time.
17. When you are gone for more than a day, make sure your home looks and sounds occupied . . . use an automatic timer to turn on lights, radio or TV.
18. If you arrive at home and suspect a stranger may be inside, DON'T GO IN. Leave quietly and call 911 to report the crime.

WALKING
1. If you are attacked on the street, make as much noise as possible by calling for help or blowing a whistle. Do not pursue your attacker. Call 911 and report the crime as soon as possible.
2. Avoid walking alone at night. Try to have a friend accompany you in high risk areas . . . even during the daytime.
3. Avoid carrying weapons . . . they may be used against you.
4. Always plan your route and stay alert to your surroundings. Walk confidently.
5. Have a companion accompany you.
6. Stay away from buildings and doorways; walk in well-lighted areas.
7. Have your key ready when approaching your front door.
8. Don't dangle your purse away from your body. (Twelve percent of all crimes against the elderly are purse snatchings and street robberies.)
9. Don't carry large, bulky shoulder bags; carry only what you need. Better yet, sew a small pocket inside your jacket or coat. If you don't have a purse, no one will try to snatch it.

WHILE SHOPPING . . .
1. Carry your purse very close to you . . . don't dangle it from your arm. Never leave your purse in a shopping cart. Never leave your purse unattended.
2. Don't carry any more cash than is necessary. Many grocery stores now accept checks and automatic teller cards instead of cash.
3. Don't display large sums of cash.
4. Use checks where possible.

IN YOUR CAR . . .
1. Always keep your car doors locked, whether you are in or out of your car. Keep your gas tank full and your engine properly maintained to avoid breakdowns.
2. If your car breaks down, pull over to the right as far as possible, raise the hood, and wait INSIDE the car for help. Avoid getting out of the car and making yourself a target before police arrive.
3. At stop signs and traffic lights, keep the car in gear.
4. Travel well-lit and busy streets. Plan your route.
5. Don't leave your purse on the seat beside you; put it on the floor, where it is more difficult for someone to grab it.
6. Lock bundles or bags in the trunk. If interesting packages are out of sight, a thief will be less tempted to break in to steal them.
7. When returning to your car, check the front and back seat before entering.
8. Never pick up hitchhikers.

BANKING . . .
1. Many criminals know exactly when government checks arrive each month, and may pick that day to attack. Avoid this by using Direct Deposit, which sends your money directly from the government to the bank of your choice. And, at many banks, free checking accounts are available to senior citizens. Your bank has all the information.
2. Never withdraw money from your bank accounts for anyone except YOURSELF. Be wary of con artists and get-rich schemes that probably are too-good-to-be- true.
3. You should store valuables in a Safe Deposit Box.
4. Never give your money to someone who calls on you, identifying himself as a bank official. A bank will never ask you to remove your money. Banks need the use of your money, and they don't want one of their customers to invite crime by having large amounts of cash around.
5. When someone approaches you with a get-rich-quick-scheme involving some or all of YOUR savings, it is HIS get-rich-quick-scheme. If it is a legitimate investment, the opportunity to contribute your funds will still be there tomorrow-after you have had time to consider it.
6. If you have been swindled or conned, report the crime to your local police or Prosecuting Attorney's office. Con-artists count on their victim's reluctance to admit they've been duped, but if you delay you help them get away. Remember, if you never report the crime, they are free to cheat others again and again and you have no chance of ever getting your money back.

My Story

DAVE'S STORY

My life changed in the early to late 1990's, although I didn't recognize it at this time. That is, when my wife's grandfather was living independently in Chevy Chase, Maryland.

One night I received a call from my mother-in-law. It was late at night. It was unusual for the phone to ring that late, so I answered the phone, with a feeling of foreboding, only to hear my mother-in-law's voice say that her father, my wife's grandfather, had fallen. Shortly after that, he was taken to the hospital. After medical treatment at the hospital, he was taken to a nursing home.

I was the attorney in the family, so everything was left to me. During this time, I had lots of questions: what options were available; what if granddad had to stay in the nursing home, would we be able to find a good one and would he get good care there; and if so, how were we going to pay for it? I tried to find answers to these questions, that I now answer for others. But I could only catch glimpses of the big picture. That research was my first act into the practice of elder law and life care planning.

After granddad was in the nursing home, I read about a meeting of the National Academy of Elder Law Attorneys. I attended the conference and at the end of the first day, I knew I had found my new profession – the practice of elder law. When I returned home, I threw myself into learning about elder law. I researched the area using law books and materials from the conference and I started putting together what later turned out to be the beginning phases of my new life care planning practice and my calling.

Should we use computer software to draft a will?

People often wonder whether they would be taking a risk by using a computer software program to create their estate planning (wills, power of attorneys and living wills) documents, rather than consulting with a qualified attorney. A recent case shows how relying on comport software can produce unforeseen legal complications.

Ms. X had a life insurance policy that named her half-sister, as the beneficiary. Therefore, at her death the half sister should obtain the proceeds of the life insurance monies. However, using a legal software program she had obtained, she prepared three documents: (1) will; (2) an attachment; and (3) a living trust. She was not trained in the legal field. The attachment provided that the proceeds of the life insurance policy should be used to pay funeral costs and other debts normally paid by an estate.

Following Ms. X’s death, the court removed the half sister as personal representative (executor) and appointed a new personal representative for the estate. This new personal representative asked the court to interpret the estate planning documents that Ms. X had prepared and signed. The question was whether the attachment was a part of the will and, if so, whether it created a trust that held the insurance proceeds. If so, the insurance proceeds would be under the control of Ms. X's estate to pay its debts. If the attachment was determined not to be incorporated into the will, then Ms. X would receive all the life insurance proceeds.

The Court ruled that the attachment was part of the will and that it did create a trust to hold the insurance proceeds. This may not have been the wish of Ms. X but the problem was, the attachment clearly indicates that Ms. X intended the attachment to be part of her will. As the court states "[T]he inartful drafting of the will and [the attachment] certainly led to confusion and dissention between the parties."

Therefore, if you use computer software, there is the potential that your wishes may not enacted.

MEDICAID MYTHS - A Collection of Plausible, but False Propositions.

Many people want to know how to have Medicaid cover nursing home costs that can run over $72,000 a year. Few can pay the cost out of their regular income. It doesn’t take long to lose all one’s savings. Long-term care insurance is not available if the person is already sick. It is too expensive for many older people.

So, folks will ask friends and neighbors how to get Medicaid to pay and hold on to precious dollars for the rest of the family. But, does the question presume the nursing home is the only choice? My goal in dispelling the Medicaid Myths is to help elders and their families arrive at the best long term care plan.

Informed families can budget and allocate their resources to alternatives to nursing home care such as, caregiver aid, professional in-home care and residential assisted living. When they must so place they will get the best care for their loved one. Medicaid is a complicated area of the law.

1. Myth: “Medicare will cover my nursing home bill."
The Truth: Medicare only covers a small amount of the nursing home care provided in this country. Many older people are surprised to learn this. Medicare provides 20 days of full coverage if you spent at least three days in the hospital and need skilled care (not intermediate level care). Then, if you still need skilled care, you can get up to 80 days of partial coverage from Medicare, the co-pay will usually be picked up by your supplemental insurance. After that, you will either pay by your savings, your long-term care insurance or get Medicaid.

2. Myth: “Only substandard nursing homes participate in Medicaid.”
The Truth: Only a few Maryland nursing homes do not have Medicaid certified beds. The vast majority do.

3. Myth: “I will get better care if I private pay.”
The Truth: It is illegal to treat Medicaid patients less well than private pay patients and it is illegal to discriminate against Medicaid patients. There may be no “Medicaid wing” and no public identification of a “Medicaid bed.” Typically, the staff does not know which patient is a Medicaid recipient.

4. Myth: “If I enter a nursing home as a private pay resident, I must use up my assets before I can get Medicaid.”
The Truth: You are not required to “spend down” your assets to pay for the nursing home care. However, some nursing homes might try to make you believe that you do. You do have legal options. Informed people seek advice from an elder law attorney to decide if they wish to have Medicaid pay the bill before having spent a significant part of their assets.

5. Myth: “I can only ‘spend-down’ my assets on medical or nursing home bills.”
The Truth: See # 4 above. Nursing homes may tell you that you have to spend your savings on the nursing home bill before applying for Medicaid, but this is not true. In fact, it’s against the law for them to tell you this!

6. Myth: “I can find out all I need to know about Medicaid from the nursing home or the Medicaid agency
The Truth: The Medicaid law is very complex and counter-intuitive. It was written by Congress, after all! The nursing homes and Medicaid agencies do not have lawyers to interpret the law in your favor.

7. Myth: “I have to lose my home and everything I own to get Medicaid assistance.”
The Truth: A person is permitted to own “exempt property” and be eligible for Medicaid. This includes a home, even if return is unlikely, and a car, even if the patient will not drive. In addition the “community spouse” is entitled to keep a share of the assets. Further, some other assets are simply not counted by Medicaid. The trick comes in knowing what is “countable” under the Medicaid rules. The bottom line is, you don’t need to lose everything to be Medicaid eligible.

8. Myth: “I can keep all of my separate property when my spouse gets Medicaid.”
The Truth: When a married person applies for Medicaid, assets in either or both spouse’s name are considered by the Medicaid agency.

9. Myth: “If I put my property into my spouse’s name, I will be eligible for Medicaid.”
The Truth: All assets are counted, regardless of which spouse’s name they are in. If either spouse’s name is on the property, it is included. This includes IRAs, inheritances, property jointly owned with children and insurance policies for example.

10. Myth: “I must spend half of our assets before I can get Medicaid for my spouse.”
The Truth: A community spouse can keep half, up to approximately, $100,000, in countable assets. Any more than that will either spent or converted into non-countable assets. This is the “spend down” process.

11. Myth: “I can hide my assets and get eligible for Medicaid.”
The Truth: Intentional misrepresentation in a Medicaid application is a crime and can be costly. The IRS shares any information concerning income or assets you have with the Medicaid agency. These reports include interest income and the sale of stocks or bonds. You or whoever applied may have to pay Medicaid back to avoid prosecution.

12. Myth: “I can give away $10,000 per year under Medicaid rules.”
The Truth: This is a rule under federal gift tax law, not under Medicaid law. (Actually, the amount has changed to $12,000.) In 2008 a person may give $12,000 per year without liability for gift tax. However, since taxpayers have a $1 million lifetime exemption for the gift tax most do not need to be concerned paying the tax. And, millionaires should not worry about getting Medicaid.

13. Myth: “I can’t give anything away and get Medicaid.”
The Truth: The Medicaid rules provide that a person can be disqualified for giving away property. It depends on what is given away, to whom, and when. So, again, it’s complicated. Some asset transfers are not penalized under the Medicaid rules. Consult with a lawyer who knows the law.

14. Myth: “I have to wait 5 years after giving anything away, to get Medicaid.”
The Truth: The disqualification isn’t always 5 years long and sometimes there is no disqualification at all. True, there is now a 5-year “lookback” for some asset transfers under the Medicaid rules. This means that the Medicaid agency will look back at all transfers of property, including sales for less than market value.

How do I qualify, financially, for Medicaid?

If you have no assets or money, then Medicaid (“Medical Assistance”) will usually pay for your care. In the nursing home setting, Medical Assistance covers room and board, pharmacy and incidentals. Basically, Medical Assistance provides for your basic care, but does not cover certain expenses like haircuts, beauty shop charges and clothing. However, if you qualify for Medical Assistance, you can retain sixty-two ($62) dollars per month from your income / social security to meet any of these needs.

Medical Assistance planning is to offset the concerns of seniors regarding the high cost of long term nursing care. Generally, the purpose behind Medical Assistance planning is to make the individual eligible for Medical Assistance, while preserving as much of the individuals resources for the benefit of his or her loved ones. Medical Assistance planning occurs in a pre-planned stage or in a crisis stage. The pre-planning stage occurs when you are expected to enter a nursing home at sometime in the future. Generally, pre-planning techniques include: long term care insurance, gifting, and utilizing trusts. Medical Assistance crisis planning occurs when you enter a nursing home without any planning, and you are not expected to return home or to the community and you are paying the nursing home out of your own pocket. Medical Assistance crisis planning is more common because the majority of seniors are of the opinion that a nursing home stay will never happen to them. When the nursing home stay becomes a reality, you or your family, realizing the cost of nursing home care, will have to address the situation.

To qualify for Medical Assistance, you must be over sixty-five, or blind/disabled and have limited income and assets. If you are a single person, the only assets that you can maintain (non-countable assets) are basically, twenty-five hundred ($2500) dollars, some life insurance and your burial plot. Every other asset is considered available to pay for the nursing home costs (countable assets). Non-countable assets for a married couple are some savings, your home, household goods, a motor vehicle, some life insurance and burial plots. Savings accounts, checking accounts, 401K, pensions and CD's, life insurance policies, in excess of the non countable allowances, second homes, and other motor vehicles are all considered countable assets. Therefore, if you have assets in excess of the resource limitation, you will not qualify for medical assistance. Consequently, you must “spend-down” the excess amounts.

In lieu of giving all your money to the nursing home, you can “spend-down” your assets, with some proper planning techniques such as: purchasing prepaid funeral arrangements, paying off some debts, purchasing a new car and making home improvements. Additionally, the remaining “spend-down” amount can be eliminated through the purchase of a Medicaid Annuity. The Medicaid Annuity is designed to convert the “spend-down” amount into a stream of income. With the “spend-down” amount now eliminated, you become eligible for Medical Assistance benefits.

Put Caregiving Arrangements in Writing

When one family member becomes a caregiver for another, it's important to put in writing the terms of the arrangement. AARP estimates that more than 20 million Americans currently care for ill parents, other relatives or friends. Problems can arise if the caregiving arrangement is not clear to all involved. For example, a caregiver may be providing care without compensation, counting on an inheritance that never materializes.

A formal caregiver contract can outline the responsibilities of a caregiver, and specify the payment he will receive for services rendered and expenses, the article states. A contract ensures that the cost of care is paid at the time it is received and is not left for family members to wrangle over as part of a later division of assets.

Such a contract can also help the person receiving the care transfer assets as a way of qualifying for Medicaid. Payments for contracted services are not viewed as gifts to the care-giving relative, but reimbursement checks without a contract to support them may be.

A good caregiver contract also should:

Delineate the rights and obligations of both care-receiver and caregiver.

Be written as soon as possible, when the care-receiver is unquestionably of sound mind.

Specify what services are to be provided and at what cost. If the care-receiver is in the caregiver''s home, expenses might well include a share of those utilities, laundry, food and housing costs.

Fix the caregiver''s compensation at a reasonable rate, comparable to what an outside party would receive for the same services, and specify reimbursement for the caregiver''s out-of-pocket expenses.

How to Make Retirement Savings Last

You have saved all your life for retirement. Once you have finally reached retirement, you want

to get the most out of your savings. There are many different retirement plan options to keep

track of and manage: IRAs, 401(k)s, investment accounts, and Social Security.

To maximize savings, keep the following things in mind:
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Avoid penalties by taking the required distributions from your IRA or 401(k). You have until

April 1 after you turn 70 ½ to begin taking the minimum distribution or face a penalty. If you

take distributions after that date, you will pay 50 percent on the amount that should have been

distributed, but wasn't. To calculate your minimum distribution, take the total of account

balances divided by the distribution period calculated by the IRS.

Decide when to take your Social Security. You can begin taking it any time after age 62. The

longer you wait —- up until age 70 -- the more money you will get in each check. Whether to

wait or not depends on your individual circumstances. You may want to consider your life

expectancy. If you have a long life expectancy and you can afford to, you may want to wait until

age 70 to begin getting benefits.

Look at your IRA and make sure you have the best account for your needs. If you have a

traditional IRA, you may want to convert it into a Roth IRA. You will pay taxes on the

income earned to date, but then it will be able to grow tax-free.

Make the most of your investments. Many financial advisors advise that investments be

60 percent in stocks and 40 percent in bonds or other fixed-income vehicles, but the right

mix for you depends on your circumstances and risk tolerance. In addition, the general rule

of thumb is to spend about 4.5 percent of retirement investments each year.

Consider consulting a financial planner. If you have a lot of investments, a professional

financial planner could help you determine the best way to manage the accounts.

Caregiving Affects Work and Life But Not Finances, Study Finds

A new study of caregivers in the United States finds that although caregiving has a big impact on work and life, most caregivers don't feel financially burdened. Almost one-quarter of households in the United States contain a caregiver, and most of those households provide care for someone who is age 50 or older, according to the new study by The National Alliance for Caregiving and the AARP, which looked at caregivers aged 18 and older who provided unpaid care for another adult aged 18 or older.

According to the study, only 12 percent of caregivers said they felt financially burdened by their caregiving duties. Caregivers with more caregiving responsibilities and those who did not feel they had a choice in becoming a caregiver reported greater financial hardship.

While it generally doesn't create a financial burden, caregiving has a big impact on work and life, the study found. Caregivers provide care an average of 21 hours per week. A majority of caregivers said they were working, either full or part-time, or had worked at some point while caregiving. More than 60 percent of the working caregivers reported having to make adjustments to their work schedule, such as leaving early, arriving late, or taking time off. Not surprisingly, the jobs of caregivers with the most caregiving responsibilities were the most affected; one-third of caregivers who had to provide constant care had quit their job to perform their caregiving duties and 12 percent had retired.

Caregivers also reported they had less time for family or friends, had given up vacations or hobbies, and had less time to exercise. Caregivers said they needed more help finding time for themselves, balancing work and family responsibilities, and managing stress.

What is Life Care Planning?

The Life Care Plan is a roadmap for planning your long-term care, designed with your individual and family needs in mind. The Life Care Plan includes a strategy for managing
your life utilizing all the necessary services and resources available in the local community.

Based on a thorough understanding of your long-term health care goals and needs, the
Life Care Plan provides recommendations for care regarding residency, personal lifestyle
and more, consistent with these goals and needs. Like traditional Estate Plans, the Life
Care Plan includes the legal protections and provisions you need to safeguard your assets,
honor your wishes, and care for loved ones. However, a Life Care Plan provides a more comprehensive and caring approach because it incorporates both your legal protections
and provisions and your health care goals and needs.

The Life Care Manager

A family crisis represents a difficult and frightening period in a family’s life.
Therefore, you need someone who is not only knowledgeable and experienced with
dealing with such crisis situations, but is also compassionate and empathetic to your
emotional needs.

A Life Care Manager is employed to be your support line, your advocate, your
confidant, and your friend. In conjunction with an attorney, the Life Care Plan is
developed by a Life Care Manager. Your Life Care Manager is knowledgeable about
the many services and resources available to the elder community and will assist
with the selection of home care services based on your needs, intervene when special
care situations arise, offer assisted living and nursing home options, act as a liaison,
and more.

The Ultimate Goal

The ultimate goal of the Life Care Plan is to ensure the best quality of life for you today and throughout the rest of your life. Your Life Care Plan should continue to evolve throughout your life to accommodate changes in your care situation.

15 TOPICS TO DISCUSS WITH YOUR HEALTH CARE AGENT

A health care agent is a person you appoint to make medical decisions on your behalf if you are incapacitated or unable to make any decisions.

A Living Will (Advanced Directive) expresses your wishes about your health care including, but not limited to, resuscitation, life sustaining treatments (respirator, feeding tube, etc.) and withholding / withdrawing of life sustaining treatments. The Living Will is only effective when you are terminally ill or unconscious and unable to communicate your wishes.

When it comes to making decisions regarding end of life issues, do you know your wishes or have you communicated those wishes to your health care agent?

Do you want to be resuscitated should your heart stop? Do you want to be hooked up to a life support system, feeding tube or respirator? What are your feelings about certain medical treatments?

There are no right or wrong or “preferable” answers to these questions. However, you should be able to communicate these answers, based on your own beliefs, wishes and desires, to your health care agent.

1. You’re seriously ill, and doctors are recommending chemotherapy; would you be willing to endure very severe side effects, such as severe pain, nausea, vomiting or weakness that could last for months, if the chance that you would regain your current health was very low?

2. What do you need for comfort and support as you journey near death?

3. If you had Alzheimer’s disease, and it progressed to the point where you could no longer recognize or converse with your loved ones; when spoon-feeding was no longer possible, would you want to be fed by a tube, into your stomach?

4. If you were terminally ill with a condition that caused much pain, would you want to be sedated, even to the point of unconsciousness, if it were necessary to control your pain?

5. Imagine that you were physically frail and needed help with most routine daily activities such as dressing, bathing, eating and going to the toilet. You were living in a nursing home although still mentally capable most of the time and became sick with pneumonia for the third time this winter causing hospitalization and pain, would you want aggressive antibiotic treatment again or just comfort care until death?

6. Would you want the following medical treatments?

a. Kidney Dialysis (if kidneys not working)

b. CPR (used if heart stops working)

c. Respirator (unable to breathe)

d. Artificial nutrition (unable to eat food)

e. Artificial hydration (unable to drink fluids)

7. Imagine that you are in a permanent coma and dependent on a feeding tube. Would your medical decisions be guided by any particular religious beliefs or spiritual values?

8. Are some conditions worse than death? If you are housebound, in severe discomfort or pain most of the time, would you want medical treatments to keep you alive?

9. Discuss your current health status and, if any medical problems, how do they affect your ability to function?

10. Do you think that your own doctor should make the final decision about any medical treatments you may require?

11. Would you want to have a hospice team or other palliative care (i.e., comfort care) available to you?

12. Do you have any fears regarding health care and/or death?

13. Do you want to donate parts of your body for transplantation or medical research?

14. What are your thoughts about a memorial or religious service? Where would you like your remains placed? Do you want to be buried or cremated?

15. What else do you feel is important for your agent to know?