Annual National Healthcare Decisions Day Builds on Growing Awareness of Advance Care Planning.
The National Healthcare Decisions Day, is to ensure that all people regardless of age or current health are reminded of the importance of making their healthcare wishes known to loved ones and their care providers.
This year, The Law Office of David Wingate PC will be increasing awareness of advance care planning and educating their communities about the importance of making healthcare decisions by hosting an event to mark the annual National Healthcare Decisions Day.
This effort is to promote advance care planning and healthcare decision making. All Americans are encouraged to voice their wishes and take steps to ensure that their choices are known and protected. The process does not take long and it is free.
“I am so proud to raise awareness of healthcare planning,” said David Wingate, an Elder Care Attorney, in Frederick Maryland. “I have embraced this call to action to help Americans understand the importance of making and documenting healthcare decisions.”
An advance directive is a legal document that tells healthcare providers who it is that you wish to make medical decisions for you and what treatments you would want or not want, if you are ever not able to tell care providers what you would want in a medical emergency or life-limiting illness.
“The number of people who have actively sought out information about making their wishes known and then have taken the steps to request an advance directive form has been remarkable,” said Terri Mason of Senior Life Care Planning. “Just as important as putting this information into peoples’ hands is making sure they complete the directives and take time to talk about their wishes with their loved ones and healthcare provides.”
National Healthcare Decisions Day is an initiative to encourage patients to express their wishes regarding healthcare through conversations and the completion of advance directives. David Wingate is working with providers and facilities to ensure that individual wishes are respected, whatever they may be.
Individuals and organizations interested in learning more about the annual National Healthcare Decisions Day and advance care planning are encouraged to call the Law Office of David Wingate at 301 663 9230. Information is also available via email at terri@davidwingate.com
Friday, April 9, 2010
Monday, July 13, 2009
Reverse Mortgages: Money From Home
Under our “system” of paying for long-term care, you may be able to qualify for Medicaid to pay for nursing home care, but in most states there’s little public assistance for home care. Most people want to stay at home as long as possible, but few can afford the high cost of home care for very long. One solution, which is growing in popularity, is to tap into the equity built up in your home. If you own a home and are at least 62 years old, you may be able to quickly get money to pay for home care (or for anything else) by taking out a reverse mortgage. Reverse mortgages, financial arrangements designed specifically for older homeowners, are a way of borrowing that transforms the equity in a home into liquid cash without having to either move or make regular loan repayments. They permit house-rich but cash-poor elders to use their housing equity to, for example, pay for home care while they remain in the home, or for nursing home care later on. The loans do not have to be repaid until the last surviving borrower dies, sells the home or permanently moves out.
In a reverse mortgage, the homeowner receives a sum of money from the lender, usually a bank, based largely on the value of the house, the age of the borrower, and current interest rates. For example, a 70-year-old borrower with a $200,000 house in County X, State Y, could receive a loan of $115,000. The lower the interest rate and the older the borrower, the more that can be borrowed. Homeowners can receive the money in one of three ways (or in any combination of the three): in a lump sum, as a line of credit that can be drawn on at the borrower’s option, or in a series of regular payments. The most popular choice is the line of credit because it allows a borrower to decide when he or she needs the money and how much. Moreover, no interest is charged on the untapped balance of the loan.
Although it is often assumed that an elderly person would want to use the funds from a reverse mortgage loan for health care, there are no restrictions--the funds can be used in any way. All borrowers must be at least 62 years of age to qualify for most reverse mortgages. In addition, a reverse mortgage cannot be taken out if there is prior debt against the home. Thus, either the old mortgage must be paid off before taking out a reverse mortgage or some of the proceeds from the reverse mortgage used to retire the old debt
Call us now for assistance (240) 453-0070. We can help you!
At Senior Life Care Planning, LLC we are dedicated to giving our clients the power to be informed individuals and to give peace of mind. We provide honest ways to protect your home, loved ones and independence in times of great need. We understand the emotional burden, confusion, anger, hopelessness, sense of injustice, fear and loneliness that come with long-term disability and end-of-life issues.
Every day we help and support families and individuals who are in crisis. We work with our clients to provide peace of mind and quality of life.
Senior Life Care Planning, LLC
One Research Court, Suite 450
Rockville MD 20850
240.453.0070
www.seniorlcp.com
In a reverse mortgage, the homeowner receives a sum of money from the lender, usually a bank, based largely on the value of the house, the age of the borrower, and current interest rates. For example, a 70-year-old borrower with a $200,000 house in County X, State Y, could receive a loan of $115,000. The lower the interest rate and the older the borrower, the more that can be borrowed. Homeowners can receive the money in one of three ways (or in any combination of the three): in a lump sum, as a line of credit that can be drawn on at the borrower’s option, or in a series of regular payments. The most popular choice is the line of credit because it allows a borrower to decide when he or she needs the money and how much. Moreover, no interest is charged on the untapped balance of the loan.
Although it is often assumed that an elderly person would want to use the funds from a reverse mortgage loan for health care, there are no restrictions--the funds can be used in any way. All borrowers must be at least 62 years of age to qualify for most reverse mortgages. In addition, a reverse mortgage cannot be taken out if there is prior debt against the home. Thus, either the old mortgage must be paid off before taking out a reverse mortgage or some of the proceeds from the reverse mortgage used to retire the old debt
Call us now for assistance (240) 453-0070. We can help you!
At Senior Life Care Planning, LLC we are dedicated to giving our clients the power to be informed individuals and to give peace of mind. We provide honest ways to protect your home, loved ones and independence in times of great need. We understand the emotional burden, confusion, anger, hopelessness, sense of injustice, fear and loneliness that come with long-term disability and end-of-life issues.
Every day we help and support families and individuals who are in crisis. We work with our clients to provide peace of mind and quality of life.
Senior Life Care Planning, LLC
One Research Court, Suite 450
Rockville MD 20850
240.453.0070
www.seniorlcp.com
Wednesday, July 8, 2009
Assisted Living Facility
The idea of Assisted Living is tremendously appealing – an older individual receiving necessary care and services in a home-like environment, while retaining choice and autonomy.
Assisted Living, is the fastest growing form of residential housing for older Americans and has filled the space between nursing homes and the residential home. With the assisted facility, many people enter their Assisted Living homes with the expectation that this will be their home for the rest of their lives. Also, they develop friendships and relationships with other residents. Therefore, the facility becomes their primary community.
Most Assisted Living facilities are licensed to care for residents only up to a particular need of care. A generic multi-level system might designate three levels: low, moderate and high (excludes skilled nursing care - nursing home level). When a resident has low care needs, the resident may reside at any type of Assisted Living facility. When the resident's care needs reach the moderate level, the resident is allowed to reside only at a facility licensed for moderate or high care needs. When the care needs increase to the high level, the resident is allowed only to reside in a facility licensed for high care needs. Quality of care standards are set for each level to assure that residents receive care that is adequate to meet their needs.
However, momentum toward Assisted Living, should not lead one to assume that Assisted Living is always the right choice, or that any and all health care conditions can be accommodated within Assisted Living. Some Assisted Living facilities have been known to increase their acceptance and retention of residents with significant health care needs that for which the facility is not equipped. Therefore, there must be a balance between two compelling and sometimes competing goals – allowing residents to "age in place" and assuring that residents receive an adequate and appropriate quality of care.
"Assisted Living" is not defined in any meaningful way by federal law. Currently, the Federal Government plays no significant role in setting Assisted Living facilities standards, guidelines or rules. However, "Assisted Living" has been defined by the State of Maryland as “a residential or facility- based program that provides housing and supportive services, supervision, personalized assistance, health related services, or a combination thereof that meets the needs of the individuals who are unable to perform or who need assistance in performing activities of daily living in a way that promotes optimum dignity and independence for the individuals.” But what does this mean?
The definition does little to specify exactly what level of service is required. The specifics are limited. What does optimum dignity mean? Does the definition mean that staffs are awake around the clock? What staffs are awake? What health related services are provided? Does this mean only assistance with the self-administered medication? The definition intimates that extensive health care is available. But, in fact, nothing in the definition guarantees any health care beyond self-administration of medication. Therefore, the definition fails to state clearly what services are made available to residents. Generally, the Assisted Living provider has full freedom to provide extensive, individualized services, but that same freedom allows less conscientious providers to cut corners and force out residents who are considered undesirable for one reason or another.
Additionally, the Assisted Living definition is written in an idealized, attractive term, which is vague and practically unenforceable. Rather than establishing standards directly, the State anticipates, to a great extent, that standards will be established through negotiations between a facility and an entering resident. However, there is little protection for the residents because, as a practical matter, admission agreements often are not negotiated but presented to incoming residents on a take-it-or-leave-it basis. Additionally, a 1997 Report form the General Accounting Office ("GAO") noted "[assisted living] contracts had no standard format, varied in detail and usefulness, and in some cases were vague and confusing." The GAO subsequently examined agreements in four states, and found one-third of the reviewed agreements contained language that the GAO considered unclear or potentially misleading.
Also, discharge from a Maryland Assisted Living facility is authorized for violation of the admission agreement. Therefore, the Assisted Living facility sets discharge justifications in an admission agreement. The facility may limit discharge to legitimate situations such as endangerment of other residents and nonpayment. Or, on the other hand, the facility may write an admission agreement with unfair discharge justifications; i.e., use of a wheelchair in the dining rooms. Consequently, the facility has extensive discretion to discharge a resident. With the State granting such discretion, we have two potential discharge problems: that a resident will be discharged too soon, or too late. In a too soon discharge, a facility may discharge a resident because their needs have become too expensive or inconvenient, even though the facility, if it wanted, could provide adequate care. The too late discharge, is often the result of a facility retaining a resident for whom the facility is incapable of providing care.
All assisted facilities are not the same, and can vary within the State. Therefore, proper evaluation of the facility and their contracts must be performed, because the obligations and rights pertaining to the Assisted Living facility may not protect your rights, but the facilities. Consequently, unenforceable contract language can be devastating to a resident if the provider is less interested in a resident's health and satisfaction, and thus takes advantage of the vagueness of the contract to provide the bare minimum services.
If you would like further information, please call our office at 301 663 9230.
Assisted Living, is the fastest growing form of residential housing for older Americans and has filled the space between nursing homes and the residential home. With the assisted facility, many people enter their Assisted Living homes with the expectation that this will be their home for the rest of their lives. Also, they develop friendships and relationships with other residents. Therefore, the facility becomes their primary community.
Most Assisted Living facilities are licensed to care for residents only up to a particular need of care. A generic multi-level system might designate three levels: low, moderate and high (excludes skilled nursing care - nursing home level). When a resident has low care needs, the resident may reside at any type of Assisted Living facility. When the resident's care needs reach the moderate level, the resident is allowed to reside only at a facility licensed for moderate or high care needs. When the care needs increase to the high level, the resident is allowed only to reside in a facility licensed for high care needs. Quality of care standards are set for each level to assure that residents receive care that is adequate to meet their needs.
However, momentum toward Assisted Living, should not lead one to assume that Assisted Living is always the right choice, or that any and all health care conditions can be accommodated within Assisted Living. Some Assisted Living facilities have been known to increase their acceptance and retention of residents with significant health care needs that for which the facility is not equipped. Therefore, there must be a balance between two compelling and sometimes competing goals – allowing residents to "age in place" and assuring that residents receive an adequate and appropriate quality of care.
"Assisted Living" is not defined in any meaningful way by federal law. Currently, the Federal Government plays no significant role in setting Assisted Living facilities standards, guidelines or rules. However, "Assisted Living" has been defined by the State of Maryland as “a residential or facility- based program that provides housing and supportive services, supervision, personalized assistance, health related services, or a combination thereof that meets the needs of the individuals who are unable to perform or who need assistance in performing activities of daily living in a way that promotes optimum dignity and independence for the individuals.” But what does this mean?
The definition does little to specify exactly what level of service is required. The specifics are limited. What does optimum dignity mean? Does the definition mean that staffs are awake around the clock? What staffs are awake? What health related services are provided? Does this mean only assistance with the self-administered medication? The definition intimates that extensive health care is available. But, in fact, nothing in the definition guarantees any health care beyond self-administration of medication. Therefore, the definition fails to state clearly what services are made available to residents. Generally, the Assisted Living provider has full freedom to provide extensive, individualized services, but that same freedom allows less conscientious providers to cut corners and force out residents who are considered undesirable for one reason or another.
Additionally, the Assisted Living definition is written in an idealized, attractive term, which is vague and practically unenforceable. Rather than establishing standards directly, the State anticipates, to a great extent, that standards will be established through negotiations between a facility and an entering resident. However, there is little protection for the residents because, as a practical matter, admission agreements often are not negotiated but presented to incoming residents on a take-it-or-leave-it basis. Additionally, a 1997 Report form the General Accounting Office ("GAO") noted "[assisted living] contracts had no standard format, varied in detail and usefulness, and in some cases were vague and confusing." The GAO subsequently examined agreements in four states, and found one-third of the reviewed agreements contained language that the GAO considered unclear or potentially misleading.
Also, discharge from a Maryland Assisted Living facility is authorized for violation of the admission agreement. Therefore, the Assisted Living facility sets discharge justifications in an admission agreement. The facility may limit discharge to legitimate situations such as endangerment of other residents and nonpayment. Or, on the other hand, the facility may write an admission agreement with unfair discharge justifications; i.e., use of a wheelchair in the dining rooms. Consequently, the facility has extensive discretion to discharge a resident. With the State granting such discretion, we have two potential discharge problems: that a resident will be discharged too soon, or too late. In a too soon discharge, a facility may discharge a resident because their needs have become too expensive or inconvenient, even though the facility, if it wanted, could provide adequate care. The too late discharge, is often the result of a facility retaining a resident for whom the facility is incapable of providing care.
All assisted facilities are not the same, and can vary within the State. Therefore, proper evaluation of the facility and their contracts must be performed, because the obligations and rights pertaining to the Assisted Living facility may not protect your rights, but the facilities. Consequently, unenforceable contract language can be devastating to a resident if the provider is less interested in a resident's health and satisfaction, and thus takes advantage of the vagueness of the contract to provide the bare minimum services.
If you would like further information, please call our office at 301 663 9230.
SOME COMMON NURSING HOME PROBLEMS
Do these problems sound familiar?
1. “Medicaid does not pay for the service that you want.”
2. “The nursing staff will determine the care that you receive.”
3. “We don’t have enough staff to accommodate individual schedules. You will be woken up every morning at six am.”
4. “We don’t have enough staff. You should hire your own private-duty aide.”
5. “If we don’t tie your father into his chair he may fall or wander away from the nursing home. There’s just no way we can always be watching him.”
6. “Your mother needs medication in order to make her more manageable.”
7. “We must insert a feeding tube into your father because he is taking too long to eat,”
8. “Your children can visit you only during visiting hours.”
9. “We can’t admit your mother unless you sign the admission agreement as a “Guarantor” or “Responsible Party.”
10. “Please sign this arbitration agreement. It’s no big deal. Arbitrations allow disputes to be resolved quickly.”
11. “Medicare can’t pay for your nursing home care because we have determined that you need custodial care only.”
12. “We can’t give you therapy services because your Medicare reimbursement has expired, and Medicaid doesn’t pay for therapy.”
13. “Even though you’re now financially eligible for Medicaid payment, we don’t have an available Medicaid bed for you.”
14. “We don’t have to readmit you from the hospital because your hold-hold period has expired.”
15. “You must pay any amount set by the nursing home for extra charges.”
16. “We have no available space in which residents or family member could meet.”
17. “You must leave the nursing home because you are a difficult resident.”
18. “You must leave the nursing home because you are refusing medical treatment.”
Call us now for assistance (301) 663-9230
We can help you!
At Senior Life Care Planning, LLC we are dedicated to giving our clients the power to be informed individuals and to give peace of mind. We provide honest ways to protect your home, loved ones and independence in times of great need. We understand the emotional burden, confusion, anger, hopelessness, sense of injustice, fear and loneliness that come with long-term disability and end-of-life issues.
Every day we help and support families and individuals who are in crisis. We work with our clients to provide peace of mind and quality of life.
Senior Life Care Planning, LLC
1560 Oppossumtown Pike, Suite A-12
Frederick, MD 21702
301.663.9230
www.seniorlcp.com
1. “Medicaid does not pay for the service that you want.”
2. “The nursing staff will determine the care that you receive.”
3. “We don’t have enough staff to accommodate individual schedules. You will be woken up every morning at six am.”
4. “We don’t have enough staff. You should hire your own private-duty aide.”
5. “If we don’t tie your father into his chair he may fall or wander away from the nursing home. There’s just no way we can always be watching him.”
6. “Your mother needs medication in order to make her more manageable.”
7. “We must insert a feeding tube into your father because he is taking too long to eat,”
8. “Your children can visit you only during visiting hours.”
9. “We can’t admit your mother unless you sign the admission agreement as a “Guarantor” or “Responsible Party.”
10. “Please sign this arbitration agreement. It’s no big deal. Arbitrations allow disputes to be resolved quickly.”
11. “Medicare can’t pay for your nursing home care because we have determined that you need custodial care only.”
12. “We can’t give you therapy services because your Medicare reimbursement has expired, and Medicaid doesn’t pay for therapy.”
13. “Even though you’re now financially eligible for Medicaid payment, we don’t have an available Medicaid bed for you.”
14. “We don’t have to readmit you from the hospital because your hold-hold period has expired.”
15. “You must pay any amount set by the nursing home for extra charges.”
16. “We have no available space in which residents or family member could meet.”
17. “You must leave the nursing home because you are a difficult resident.”
18. “You must leave the nursing home because you are refusing medical treatment.”
Call us now for assistance (301) 663-9230
We can help you!
At Senior Life Care Planning, LLC we are dedicated to giving our clients the power to be informed individuals and to give peace of mind. We provide honest ways to protect your home, loved ones and independence in times of great need. We understand the emotional burden, confusion, anger, hopelessness, sense of injustice, fear and loneliness that come with long-term disability and end-of-life issues.
Every day we help and support families and individuals who are in crisis. We work with our clients to provide peace of mind and quality of life.
Senior Life Care Planning, LLC
1560 Oppossumtown Pike, Suite A-12
Frederick, MD 21702
301.663.9230
www.seniorlcp.com
IS YOUR LOVED ONE A 'SECOND-CLASS CITIZEN'?
Family members face some tough and traumatic issues when a loved one reaches the point of needing long-term nursing care. Of course, there is the worry about the welfare and comfort of the patient. Often, there is also concern about finances--and with good reason, with nursing care costs averaging $8,000 to $12,000 per month.
For families whose loved ones have qualified for Medicaid assistance–or even for those thinking about applying for such assistance–there may be additional worries. Family members will often fear that as a Medicaid patient, their loved one will be a "second class citizen" and receive inferior care from the nursing facility compared with someone who is paying privately or through insurance. In my professional and personal experience, this fear is completely groundless. Moreover, as I always remind family members, it is against federal law for a nursing facility to discriminate among patients based on their source of payment. Any such discrimination carries a stiff penalty for the institution involved.
Secondly, a family that has preserved assets can tap into those funds to make the loved one more comfortable and content, to enhance his or her lifestyle in meaningful ways. Remember, Medicaid law permits the nursing home resident to keep only $68 of any income for his or her personal use; the rest goes to the nursing facility. With extra assets in your family’s pockets, your loved one can be given some extra "TLC." For example, a private-duty aide can be provided some of the time. Perhaps a grandchild dearly wants to fly down to visit with her incapacitated grandfather but lacks funds to pay for airfare. Conserved assets can underwrite this, too.
If all assets are depleted, dissension can sometimes arise among family members over who should pay for what. Who will pay for dental care? Who will pay for the cab that will take an aging father to a grandchild’s birthday party across town? The child’s parent or all the patient’s adult children? Do all the adult children agree Mom should be treated to a weekly hairset, and do they all pitch in equally? When the patient has assets preserved, they can be used to provide these extras to enhance their quality of life and alleviate family tension.
Call us now for assistance (301) 663-9230
We can help you!
At Senior Life Care Planning, LLC we are dedicated to giving our clients the power to be informed individuals and to give peace of mind. We provide honest ways to protect your home, loved ones and independence in times of great need. We understand the emotional burden, confusion, anger, hopelessness, sense of injustice, fear and loneliness that come with long-term disability and end-of-life issues.
Every day we help and support families and individuals who are in crisis. We work with our clients to provide peace of mind and quality of life.
Senior Life Care Planning, LLC
1560 Opossumtown Pike, Suite A-12
Frederick, MD 21702
301.663.9230
www.seniorlcp.com
For families whose loved ones have qualified for Medicaid assistance–or even for those thinking about applying for such assistance–there may be additional worries. Family members will often fear that as a Medicaid patient, their loved one will be a "second class citizen" and receive inferior care from the nursing facility compared with someone who is paying privately or through insurance. In my professional and personal experience, this fear is completely groundless. Moreover, as I always remind family members, it is against federal law for a nursing facility to discriminate among patients based on their source of payment. Any such discrimination carries a stiff penalty for the institution involved.
Secondly, a family that has preserved assets can tap into those funds to make the loved one more comfortable and content, to enhance his or her lifestyle in meaningful ways. Remember, Medicaid law permits the nursing home resident to keep only $68 of any income for his or her personal use; the rest goes to the nursing facility. With extra assets in your family’s pockets, your loved one can be given some extra "TLC." For example, a private-duty aide can be provided some of the time. Perhaps a grandchild dearly wants to fly down to visit with her incapacitated grandfather but lacks funds to pay for airfare. Conserved assets can underwrite this, too.
If all assets are depleted, dissension can sometimes arise among family members over who should pay for what. Who will pay for dental care? Who will pay for the cab that will take an aging father to a grandchild’s birthday party across town? The child’s parent or all the patient’s adult children? Do all the adult children agree Mom should be treated to a weekly hairset, and do they all pitch in equally? When the patient has assets preserved, they can be used to provide these extras to enhance their quality of life and alleviate family tension.
Call us now for assistance (301) 663-9230
We can help you!
At Senior Life Care Planning, LLC we are dedicated to giving our clients the power to be informed individuals and to give peace of mind. We provide honest ways to protect your home, loved ones and independence in times of great need. We understand the emotional burden, confusion, anger, hopelessness, sense of injustice, fear and loneliness that come with long-term disability and end-of-life issues.
Every day we help and support families and individuals who are in crisis. We work with our clients to provide peace of mind and quality of life.
Senior Life Care Planning, LLC
1560 Opossumtown Pike, Suite A-12
Frederick, MD 21702
301.663.9230
www.seniorlcp.com
Tuesday, June 30, 2009
Use of Trusts in Medicaid Planning
If an individual is age 65 or older, the individual cannot create and fund a Special Needs Trust or a Pooled Trust account without incurring a transfer penalty. This does not necessarily mean that making transfers to fund a trust under these circumstances is always a bad idea. However, since the creation and funding of any trust to preserve the individual's assets would involve a transfer without fair consideration in any case, the individual may wish to use his or her assets to fund a trust that is not required to repay the State of Maryland for Medicaid benefits the individual may receive during his or her lifetime.
The regulations on self-settled trusts are such that a trust created by the individual and funded with the individual's own assets (other than one of the trusts exempt under OBRA '93) will prevent the individual from qualifying for Medicaid in the future, unless none of the assets or income in the trust can possibly be distributed to the individual or for the individual's benefit.
However, the individual may be able to create an irrevocable trust for the benefit of his or her children or grandchildren and fund that trust directly with his or her own assets, if the trust provides that:
The childrens' or grandchildren's trust shares will be funded with all trust income and principal. None of the trust income or principal may be distributed to the individual or for the individual's benefit during his or her lifetime.
Since none of the principal or income in that trust could be paid to or for the benefit of the individual, that principal and income would not be available to the individual for Medicaid eligibility purposes. Further, the trust can provide for distribution of the assets accumulated in the trust share after the grantor's death according to the grantor's instructions. The funding of such a trust would result in a transfer penalty, but no more so than if the assets used to fund the trust were transferred outright as part of a gifting plan.
Many individuals planning for future Medicaid eligibility may not wish to deprive themselves completely of the benefit of excess resources, as would be the case if these resources were transferred outright as gifts to others. Using excess resources to fund a self-settled, non-exempt trust for the individual's own benefit is not a good option if the individual ever wishes to qualify for Medicaid. However, any trust that is funded by a third party, with the individual as the sole beneficiary, would be exempt from the rules regarding self-settled trusts, so long as the trust is not created or funded at the individual's direction or request.
The assets in such a trust would not be deemed available to the individual by Medicaid, so long as the individual cannot force distributions from such a trust; the individual does not have authority to exercise discretion as a trustee; and the individual never transfers his or her own assets directly into the trust. Thus, the trust would not delay the start of the penalty period for transfers of assets, once the individual is in a nursing home or receiving long term care services at home.
As a result, an individual can provide for himself or herself indirectly by making gifts of remaining excess resources to his or her children, who, in turn, could voluntarily use those assets to fund a third party special needs trust for the individual's sole benefit. That trust would allow the individual to qualify for Medicaid, once the transfer penalty or look-back period has expired; the assets in the trust could be used to pay for the individual's long term care expenses during the penalty period or look-back period, and for the individual's supplemental needs after the individual begins receiving Medicaid benefits; and assets remaining in the trust after the individual's death would not be subject to Medicaid liens, estate recovery, or the type of state pay-back requirements applicable to Medicaid exempt special needs trusts or pooled trusts.
It would be very important to be able to demonstrate that the trust was not created at the individual's direction or request. Therefore, it is advisable for practitioners to prepare a statement for the individual to sign at the time the individual makes his or her gift transfers. This statement should provide that any gifts the individual makes are given freely and with the understanding that the individual will no longer need the property transferred to provide for his or her support or other needs; that the recipient of the gifts is under no obligation to ever use the property transferred for the individual's benefit or to return any of that property to the individual; and that the recipient is under no obligation to set the gifts aside in any trust or other arrangement for the individual's benefit.
Of course, this strategy does carry some risk. The person to whom the individual makes gift transfers could change his or her mind and decide not to create or fund the trust. Therefore, this strategy should only be used when the family relationships and other dynamics indicate that the recipient of the gifts will actually go through with creation and funding of the trust.
Call us now for assistance (240) 453-0070.
We can help you!
At Senior Life Care Planning, LLC we are dedicated to giving our clients the power to be informed individuals and to give peace of mind. We provide honest ways to protect your home, loved ones and independence in times of great need. We understand the emotional burden, confusion, anger, hopelessness, sense of injustice, fear and loneliness that come with long-term disability and end-of-life issues.
Every day we help and support families and individuals who are in crisis. We work with our clients to provide peace of mind and quality of life.
Senior Life Care Planning, LLC
One Research Court, Suite 450
Rockville MD 20850
240.453.0070
www.seniorlcp.com
The regulations on self-settled trusts are such that a trust created by the individual and funded with the individual's own assets (other than one of the trusts exempt under OBRA '93) will prevent the individual from qualifying for Medicaid in the future, unless none of the assets or income in the trust can possibly be distributed to the individual or for the individual's benefit.
However, the individual may be able to create an irrevocable trust for the benefit of his or her children or grandchildren and fund that trust directly with his or her own assets, if the trust provides that:
The childrens' or grandchildren's trust shares will be funded with all trust income and principal. None of the trust income or principal may be distributed to the individual or for the individual's benefit during his or her lifetime.
Since none of the principal or income in that trust could be paid to or for the benefit of the individual, that principal and income would not be available to the individual for Medicaid eligibility purposes. Further, the trust can provide for distribution of the assets accumulated in the trust share after the grantor's death according to the grantor's instructions. The funding of such a trust would result in a transfer penalty, but no more so than if the assets used to fund the trust were transferred outright as part of a gifting plan.
Many individuals planning for future Medicaid eligibility may not wish to deprive themselves completely of the benefit of excess resources, as would be the case if these resources were transferred outright as gifts to others. Using excess resources to fund a self-settled, non-exempt trust for the individual's own benefit is not a good option if the individual ever wishes to qualify for Medicaid. However, any trust that is funded by a third party, with the individual as the sole beneficiary, would be exempt from the rules regarding self-settled trusts, so long as the trust is not created or funded at the individual's direction or request.
The assets in such a trust would not be deemed available to the individual by Medicaid, so long as the individual cannot force distributions from such a trust; the individual does not have authority to exercise discretion as a trustee; and the individual never transfers his or her own assets directly into the trust. Thus, the trust would not delay the start of the penalty period for transfers of assets, once the individual is in a nursing home or receiving long term care services at home.
As a result, an individual can provide for himself or herself indirectly by making gifts of remaining excess resources to his or her children, who, in turn, could voluntarily use those assets to fund a third party special needs trust for the individual's sole benefit. That trust would allow the individual to qualify for Medicaid, once the transfer penalty or look-back period has expired; the assets in the trust could be used to pay for the individual's long term care expenses during the penalty period or look-back period, and for the individual's supplemental needs after the individual begins receiving Medicaid benefits; and assets remaining in the trust after the individual's death would not be subject to Medicaid liens, estate recovery, or the type of state pay-back requirements applicable to Medicaid exempt special needs trusts or pooled trusts.
It would be very important to be able to demonstrate that the trust was not created at the individual's direction or request. Therefore, it is advisable for practitioners to prepare a statement for the individual to sign at the time the individual makes his or her gift transfers. This statement should provide that any gifts the individual makes are given freely and with the understanding that the individual will no longer need the property transferred to provide for his or her support or other needs; that the recipient of the gifts is under no obligation to ever use the property transferred for the individual's benefit or to return any of that property to the individual; and that the recipient is under no obligation to set the gifts aside in any trust or other arrangement for the individual's benefit.
Of course, this strategy does carry some risk. The person to whom the individual makes gift transfers could change his or her mind and decide not to create or fund the trust. Therefore, this strategy should only be used when the family relationships and other dynamics indicate that the recipient of the gifts will actually go through with creation and funding of the trust.
Call us now for assistance (240) 453-0070.
We can help you!
At Senior Life Care Planning, LLC we are dedicated to giving our clients the power to be informed individuals and to give peace of mind. We provide honest ways to protect your home, loved ones and independence in times of great need. We understand the emotional burden, confusion, anger, hopelessness, sense of injustice, fear and loneliness that come with long-term disability and end-of-life issues.
Every day we help and support families and individuals who are in crisis. We work with our clients to provide peace of mind and quality of life.
Senior Life Care Planning, LLC
One Research Court, Suite 450
Rockville MD 20850
240.453.0070
www.seniorlcp.com
Monday, June 15, 2009
Elderly Who Transfer Assets at Risk
What do the following people have in common? {a} a woman who helps her granddaughter by paying $40,000 of her college tuition {b} a man who sells his home and donates 10% of the proceeds to his local church {c} a caring sister who gives $20,000 of her savings to help her needy sister stay in her home and {d} a widower who sends money to his daughter, a single mother, with two underage children, who is out of work due to an automobile accident. Answer: Each of them are at risk of being denied Medicaid eligibility if he or she is admitted to a nursing home within five years of making the gift.
On February 8, 2006 President Bush signed the Budget Reconciliation Act of 2005. The legislation changes several of the Medicaid rules.
The most significant change has to do with the manner in which the State will calculate the ineligibility period when the applicant has transferred assets for less than value. Gifts made prior to February 8 will result in a penalty period that will begin on the first day of the month in which the gift is made. So, if a single parent gifted $100,000 to her child on February 7, 2006 it would result in a 15 month penalty ranging from February 1, 2006 to April 30, 2007. If that parent had made the same gift on February 8, 2006, the penalty period would not begin until the parent entered a nursing home and was otherwise eligible for Medicaid benefits but for the penalty, which in Maryland means that she had spent all of her assets except for $2500. The Act also increased the look back period from three to five years for all transfers. Therefore, if the parent who gifted on February 8 goes in a nursing home prior to January 31, 2011, she will not receive assistance from the State under the Medicaid program until 15 months after her admission. The logical question is if the applicant is indigent and is faced with a penalty that renders her ineligible for government subsidization of nursing home care, who will pay?
The Statute does provide for hardship waivers where eviction of the nursing home resident would jeopardize health or life. But no one really knows how these waivers will work, particularly if the indigence resulted from gifting assets. Some critics of the Legislation have dubbed it the “Nursing Home Bankruptcy Act”, speculating that the nursing homes will take a financial hit. It is more likely that the nursing homes will screen applications for admission much more carefully, refusing to admit anyone who has no funds and who is ineligible for Medicaid due to gifting. So, it is vitally important that gifting be done only after diligent consideration of the risks associated with making such transfers.
It is, of course, best to make transfers at a younger age simply because the chance of making it through the five year look back period is better. If you are healthy, document it by seeing your physician at or around the time in which the transfer is made. Only transfers made for the purpose of gaining Medicaid eligibility will disqualify the donor. For example, if a gift is being made in conjunction with tax planning to reduce estate or capital gains taxes, ask the consultant to provide written instructions so that you may argue that the transfers were being made pursuant to the advice of your tax consultant. Remember, that the burden will be on you to prove that the gift was not made to receive Medicaid.
Even if a gift were made for Medicaid purposes, there are certain exceptions to the rule that such a gift results in a penalty. For example, there is no penalty when one spouse gifts to the other spouse. Neither is there a penalty when a parent gifts the home to a child who has lived with the parent for at least two years prior to the nursing home admission and who has provided a level of care which has kept the parent out of a nursing home during the two year period. No penalty is imposed where a parent gifts the home to a disabled child. In a case where two siblings hold title to their home together, there is no penalty if the sibling entering the nursing home transfers her interest to the other.
If you can afford and qualify for long term care insurance, consider purchasing a policy. According to one study, for every 1000 people in the United States, 7 will actually incur damage to their home which would be covered under their homeowner’s policy, 40 will be involved in an automobile accident and nearly 500 will require long term care. Do not rely solely on the advise of the insurance person selling you the policy. Seek advise from your attorney or accountant who has no financial interest in whether you purchase the policy under consideration. Ask the salesperson to provide you with a history of premium rate increases imposed by the particular company underwriting the policy. Make sure that the policy covers not only nursing home care, but assisted living facilities and in home health care personnel.
The federal government is clearly attempting to shift the paradigm from government subsidies for nursing home care to private financing. Toward that end, the government has encouraged people to purchase long term care insurance by providing certain tax advantages. Of course, long term care insurance is not the panacea the industry represents it to be. Many people do not qualify and/or cannot afford it. For those people, Medicaid eligibility can only be achieved by spending down their own funds. The chilling effect the new rules will have on gifting is intended to facilitate the conversion from public funding to private funding. The Legislation casts a wide net replete with traps for the unwary.
Call us now for assistance (240) 453-0070.
We can help you!
At Senior Life Care Planning, LLC we are dedicated to giving our clients the power to be informed individuals and to give peace of mind. We provide honest ways to protect your home, loved ones and independence in times of great need. We understand the emotional burden, confusion, anger, hopelessness, sense of injustice, fear and loneliness that come with long-term disability and end-of-life issues.
Every day we help and support families and individuals who are in crisis. We work with our clients to provide peace of mind and quality of life.
Senior Life Care Planning, LLC
One Research Court, Suite 450
Rockville MD 20850
240.453.0070
www.seniorlcp.com
On February 8, 2006 President Bush signed the Budget Reconciliation Act of 2005. The legislation changes several of the Medicaid rules.
The most significant change has to do with the manner in which the State will calculate the ineligibility period when the applicant has transferred assets for less than value. Gifts made prior to February 8 will result in a penalty period that will begin on the first day of the month in which the gift is made. So, if a single parent gifted $100,000 to her child on February 7, 2006 it would result in a 15 month penalty ranging from February 1, 2006 to April 30, 2007. If that parent had made the same gift on February 8, 2006, the penalty period would not begin until the parent entered a nursing home and was otherwise eligible for Medicaid benefits but for the penalty, which in Maryland means that she had spent all of her assets except for $2500. The Act also increased the look back period from three to five years for all transfers. Therefore, if the parent who gifted on February 8 goes in a nursing home prior to January 31, 2011, she will not receive assistance from the State under the Medicaid program until 15 months after her admission. The logical question is if the applicant is indigent and is faced with a penalty that renders her ineligible for government subsidization of nursing home care, who will pay?
The Statute does provide for hardship waivers where eviction of the nursing home resident would jeopardize health or life. But no one really knows how these waivers will work, particularly if the indigence resulted from gifting assets. Some critics of the Legislation have dubbed it the “Nursing Home Bankruptcy Act”, speculating that the nursing homes will take a financial hit. It is more likely that the nursing homes will screen applications for admission much more carefully, refusing to admit anyone who has no funds and who is ineligible for Medicaid due to gifting. So, it is vitally important that gifting be done only after diligent consideration of the risks associated with making such transfers.
It is, of course, best to make transfers at a younger age simply because the chance of making it through the five year look back period is better. If you are healthy, document it by seeing your physician at or around the time in which the transfer is made. Only transfers made for the purpose of gaining Medicaid eligibility will disqualify the donor. For example, if a gift is being made in conjunction with tax planning to reduce estate or capital gains taxes, ask the consultant to provide written instructions so that you may argue that the transfers were being made pursuant to the advice of your tax consultant. Remember, that the burden will be on you to prove that the gift was not made to receive Medicaid.
Even if a gift were made for Medicaid purposes, there are certain exceptions to the rule that such a gift results in a penalty. For example, there is no penalty when one spouse gifts to the other spouse. Neither is there a penalty when a parent gifts the home to a child who has lived with the parent for at least two years prior to the nursing home admission and who has provided a level of care which has kept the parent out of a nursing home during the two year period. No penalty is imposed where a parent gifts the home to a disabled child. In a case where two siblings hold title to their home together, there is no penalty if the sibling entering the nursing home transfers her interest to the other.
If you can afford and qualify for long term care insurance, consider purchasing a policy. According to one study, for every 1000 people in the United States, 7 will actually incur damage to their home which would be covered under their homeowner’s policy, 40 will be involved in an automobile accident and nearly 500 will require long term care. Do not rely solely on the advise of the insurance person selling you the policy. Seek advise from your attorney or accountant who has no financial interest in whether you purchase the policy under consideration. Ask the salesperson to provide you with a history of premium rate increases imposed by the particular company underwriting the policy. Make sure that the policy covers not only nursing home care, but assisted living facilities and in home health care personnel.
The federal government is clearly attempting to shift the paradigm from government subsidies for nursing home care to private financing. Toward that end, the government has encouraged people to purchase long term care insurance by providing certain tax advantages. Of course, long term care insurance is not the panacea the industry represents it to be. Many people do not qualify and/or cannot afford it. For those people, Medicaid eligibility can only be achieved by spending down their own funds. The chilling effect the new rules will have on gifting is intended to facilitate the conversion from public funding to private funding. The Legislation casts a wide net replete with traps for the unwary.
Call us now for assistance (240) 453-0070.
We can help you!
At Senior Life Care Planning, LLC we are dedicated to giving our clients the power to be informed individuals and to give peace of mind. We provide honest ways to protect your home, loved ones and independence in times of great need. We understand the emotional burden, confusion, anger, hopelessness, sense of injustice, fear and loneliness that come with long-term disability and end-of-life issues.
Every day we help and support families and individuals who are in crisis. We work with our clients to provide peace of mind and quality of life.
Senior Life Care Planning, LLC
One Research Court, Suite 450
Rockville MD 20850
240.453.0070
www.seniorlcp.com
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About Me
- Senior Life Care Planning
- Maryland, United States
- My life changed in the early to late 1990' My grandfather was living in Chevy Chase, Maryland. One night I received a call. I answered the phone, to hear that my grandfather, had fallen. Subsequently, 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's a good nursing home, would he get good care; how are we going to pay for it? I tried to find answers to these questions. 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 researched this area and I started putting together what later turned out to be the beginning phases of my new life care planning practice and my calling.
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