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Long Term Care Planning

Monday, August 24, 2015

Long-Term Care Planning for Veterans

I am a veteran of the United States military. What do I need to know about planning for an eventual stay in a nursing home?

With proper advanced care planning, a U.S. veterans can enjoy peace of mind that they will be able to access necessary nursing services when the need arises – without relinquishing all of their hard-earned assets and savings in the process.

As a practitioner in elder law, Andrew Byers has a keen understanding of the unique dynamics affecting veterans as they reach a more advanced age, including the need for benefits available to surviving spouses. One such benefit, which is, all too often, underutilized by eligible beneficiaries, is known as the Aid and Attendance Improved Pension benefit which works to supplement the income of a veteran or spouse in need of long-term care.

In general, the veteran or spouse must have limited "countable” assets, a designation which does not include the applicant’s primary dwelling or vehicle. Also, the Aid and Attendance Pension is often available to veterans whose income renders them ineligible for the traditional VA pension benefits. This is why it is so important to meet with an elder law attorney as soon as possible to determine eligibility.

In addition to the income eligibility requirements, the VA requires that any Aid and Attendance recipient must have served at least 90 days in the U.S. military, with at least one of those days during wartime. There are, however, no service-related disability requirements to meet, so eligibility is only dependent on financial-and employment-related factors. In sum, a U.S. veteran may be able to receive this sizable supplement if, in addition to the aforementioned factors, he or she requires the aid of another person to complete everyday tasks, defined by the VA to include “bathing, feeding, dressing, or going to the bathroom.”

If you are a United States veteran considering long-term care options, there are a number of ways Andrew Byers can help. Let us get started on a suitable long-term care plan. Serving clients in the areas in and around Auburn Hills, Michigan, we can be reached at 248.301.1511.


Thursday, July 23, 2015

Understanding the Unique Taxation Standards Applicable to IRA Distributions

I have most of my every-day checking and savings accounts titled in the name of my revocable trust. Should I take the same steps with my 401(k) and retirement investments? 


For clients with a single or joint revocable trust, retitling assets into the name of the trust not only accomplishes the goal of its creation, but ensures the seamless and effortless transition of personal and real property to beneficiaries when the time comes. However, trust creators (known as grantors) are highly cautioned to speak to an elder law attorney prior to retitling retirement accounts or transferring those assets into trust, as a hefty and unexpected tax bill may follow. 

Tax implications of retitling a retirement account

401(k) accounts and IRA’s can reap significant tax savings if withdrawn correctly and at the right time. By contrast, account holders can expect a massive tax penalty for withdrawing too early – or even inadvertently. 

Under current IRS rules, retitling a 401(k), 403(b), or Individual Retirement Account will be treated as an outright withdrawal of funds, even if the actual funds in the account are never actually spent. Therefore, the retitle will trigger a tax penalty congruent to the amount in the account for the transfer tax year, which can be especially significant for accountholder with high account balances. 

Safe ways to ensure the proper transfer of IRA assets

When it comes to leaving retirement account assets to a beneficiary, the easiest, simplest, and safest way to accomplish this task is to change the beneficiary designation on the account. This is accomplished by simply contacting the bank or investment firm and filling out a Change of Beneficiary form. Many accountholders choose an alternative beneficiary in the event the primary beneficiary predeceases the accountholder, but this is not always necessary. Then, when it comes time to distribute the assets upon the death of the accountholder, the funds will not only pass outside of probate, but will transfer directly to the beneficiary tax-free. 

If you have questions about proper estate planning or beneficiary designations, please do not hesitate to contact Andrew Byers, serving Auburn Hills, Rochester Hills and Troy, Michigan, by calling (248)301-1511. 

Thursday, July 16, 2015

Funeral Planning for Medicaid Eligibility

Are there any other less common ways to protect assets during the Medicaid planning process?

When it comes to planning for long-term care, many couples and individuals opt to pre-plan to eventually qualify for Medicaid coverage. While the thought of applying for need-based Medicaid coverage may seem unlikely for many middle-class individuals, the rising costs of long-term care – particularly for couples needing care together – is enough to deplete a sizable nest egg in just a few short years. 

The keystone of Medicaid planning is reducing one’s assets to the allowable threshold in order to reach the financial-need eligibility criteria. However, planners must be careful when transferring assets as Medicaid will impose a penalty period to address any transfers made during the five years immediately prior to the application for benefits. Fortunately, there are several other financial options to accomplish the “spend down” of assets other than outright transfers, sales or gifts, such as pre-planning for a memorial service, funeral, and/or burial plot. 

Earmarking assets for funeral costs

Pre-planning one’s funeral is hardly the most pleasant way to spend an afternoon. However, this important – and relatively simple – step can help avoid the hassle and inconvenience of “crisis planning,” or quickly planning for Medicaid eligibility at the last minute. 

Under the applicable rules, money spent on prepaid funeral arrangements and an irrevocable burial contract is not “counted” as either part of an applicant’s assets or as a penalty-inducing transfer. Taking this step can also help alleviate the financial burden for surviving family members who will be left to foot the final bill after all assets have been depleted by nursing home costs. 

When funeral planning, be sure to find a reputable entity to complete the task – and purchase a spectrum of services necessary to cover the service and burial – including the headstone and engraving costs. Be sure to pay the entire bill in full, as payment plans or credit arrangements will not allow for the maximum possible exemption for Medicaid applicants. Lastly, be sure to work with a reputable Michigan elder law attorney before making any purchases, as the timing of the prepaid funeral plan purchase is important, particularly for couples. 

If you are considering long-term care planning and would like to discuss your options with a reputable Auburn Hills, Rochester Hills and Troy, Michigan elder law attorney, please contact Andrew Byers today: (248)301-1511.


Wednesday, June 03, 2015

Recent Holding by Michigan Court of Appeals Upholds Medicaid Eligibility Penalty for Home Health Aides

How do payments to home health aides impact Medicaid eligibility in Michigan? 


In Michigan, as is the case elsewhere, eligibility for Medicaid enrollment is entirely needs-based, meaning an applicant must be financially unable to pay the costs and fees associated with his or her medical care. Currently, Medicaid is the only government-funded healthcare program that covers the costs of long-term care, as Medicare only covers a nursing facility stay up to 120 days. 

In order to qualify for Medicaid, an applicant must show a lack of personal assets and a total inability to pay for medical bills individually. Accordingly, state and federal authorities will closely scrutinize an applicant’s financial situation, primarily focusing on any transfers or divestments made over the past five years. If an asset transfer or divestment has occurred, and the applicant could have used those funds toward his or her stay in the long-term care facility, a penalty will apply congruent with the amount of time those funds could have covered daily nursing home costs. 

Home Health Aides and Medicaid 

A home health aide is someone who regularly visits an individual’s home for purposes of providing routine medical care and/or assists with the administration of medication or other treatments. Home health aides are generally not expected to provide round-the-clock care, and are usually only appropriate for those individuals who are still able to manage several daily care tasks on their own. 

In one recent case, an elderly Michigan woman with dementia paid over $19,000 for home health services prior to her admittance to a nursing home. Once her funds were depleted, her family applied for Medicaid to cover the costs of her stay. However, agents concluded that the money she spent for the home health aide did not meet the stringent test set forth by Medicaid regulations, and she was penalized for 7 months before her benefits would be accessible. In the interim, she passed away leaving her family with an enormous debt to cover from an already-depleted estate. 

Thereafter, the family’s elder law attorney appealed the decision to the local Circuit Court, which held that the burdensome five-part test for home health aide divestment eligibility only applied when the caretaker is a family member related by blood or marriage, as the risk is higher in these situations for fraud to occur. 

Unfortunately, the Court of Appeals was given an opportunity to review the case as well, and agreed with the original opinion by the administrative law judge tasked with deciding the applicability of the home health aide eligibility penalty. 

If you are concerned about Medicaid eligibility and would like to speak with a qualified and experienced elder law attorney that serves the Auburn Hills area, please contact Andrew Byers by calling (248)301-1511 today. 


Tuesday, June 02, 2015

Using the Michigan ‘Lady Bird’ Deed as a Medicaid Planning Tool

What is a ‘lady bird’ deed? And how can it help me with Medicaid eligibility? 


Under Michigan law, a ‘lady bird’ deed is an elegant-sounding designation for a relatively common type of real property interest formalized in a document.  This interest is that of an enhanced life estate interest. 

A life estate is a type of real property interest that may be granted to a person for the duration of a person’s life. For example, a parent might transfer a piece of lakefront property to his or her son that includes a life estate, allowing the parent to use the property exclusively until his or her natural death, at which point, the ownership would transfer directly to the son. However, a traditional life estate is incredibly limiting for the grantor, and essentially prohibits him from encumbering the property with a mortgage or allowing it to fall into disrepair without the threat of liability. Moreover, transferring a real property interest subject to a regular life estate to a loved one during the five-year Medicaid “look-back” period could trigger a temporary penalty congruent to the value of the property. 

By contrast, an enhanced life estate – known as a “lady bird deed” in states like Michigan, Florida or Texas – is far less restrictive. For instance, the party grating the life estate may encumber the property, sell the property, or otherwise maintain complete control over the asset for the duration of his natural life. Perhaps a confusing type of property interest transfer, the Lady Bird deed allows for a number of benefits, particularly with regard to Medicaid eligibility. 

Using the Lady Bird Deed as an Estate Planning Strategy


Under Medicaid guidelines, an applicant is only eligible upon a showing of true financial need. In other words, the applicant has no personal assets to sell in order to pay for medical benefits, and has essentially met the “needs-based” guidelines set forth by state and federal authorities. 

While financial need is the hallmark of eligibility, applicants are not expected to be without shelter in order to qualify. Accordingly, an applicant’s primary personal residence is generally not “counted” against him or her for purposes of receiving benefits. However, any other residence (i.e., second home or investment property) must be disposed of for market value prior to the five-year look-back period in order to avoid penalties. If an applicant transferred property to a friend or loved one and retained a traditional life estate, this transfer will likely result in penalties when the party with the life estate applies for Medicaid benefits. However, if the life estate is under the terms of a lady bird deed, Medicaid views the property as under the control of the applicant, and will consider the property as a primary residence.  


If you are considering Medicaid eligibility, or would like to discuss long-term care options with an experienced Auburn Hills elder law attorney, please contact Andrew Byers by calling (248)301-1511. 

Sunday, August 24, 2014

What is Estate Recovery?

What is Estate Recovery?

Medicaid is a federal health program for individuals with low income and financial resources that is administered by each state. Each state may call this program by a different name. In California, for example, it is referred to as Medi-Cal. This program is intended to help individuals and couples pay for the cost of health care and nursing home care.

Most people are surprised to learn that Medicare (the health insurance available to all people over the age of 65) does not cover nursing home care. The average cost of nursing home care, also called "skilled nursing" or "convalescent care," can be $8,000 to $10,000 per month. Most people do not have the resources to cover these steep costs over an extended period of time without some form of assistance.

Qualifying for Medicaid can be complicated; each state has its own rules and guidelines for eligibility. Once qualified for a Medicaid subsidy, Medicaid will assign you a co-pay (your Share of Cost) for the nursing home care, based on your monthly income and ability to pay.

At the end of the Medicaid recipient's life (and the spouse's life, if applicable), Medicaid will begin "estate recovery" for the total cost spent during the recipient's lifetime. Medicaid will issue a bill to the estate, and, in some states, may place a lien on the recipient's home in order to satisfy the debt. Many estate beneficiaries discover this debt only upon the death of a parent or loved one. In many cases, the Medicaid debt can consume most, if not all, estate assets.

There are estate planning strategies available that can help you accelerate qualification for a Medicaid subsidy, and also eliminate the possibility of a Medicaid lien at death. However, each state's laws are very specific, and this process is very complicated. It is very important to consult with an experienced elder law attorney in your jurisdiction.


Sunday, August 24, 2014

What is Estate Recovery?

What is Estate Recovery?

Medicaid is a federal health program for individuals with low income and financial resources that is administered by each state. Each state may call this program by a different name. In California, for example, it is referred to as Medi-Cal. This program is intended to help individuals and couples pay for the cost of health care and nursing home care.

Most people are surprised to learn that Medicare (the health insurance available to all people over the age of 65) does not cover nursing home care. The average cost of nursing home care, also called "skilled nursing" or "convalescent care," can be $8,000 to $10,000 per month. Most people do not have the resources to cover these steep costs over an extended period of time without some form of assistance.

Qualifying for Medicaid can be complicated; each state has its own rules and guidelines for eligibility. Once qualified for a Medicaid subsidy, Medicaid will assign you a co-pay (your Share of Cost) for the nursing home care, based on your monthly income and ability to pay.

At the end of the Medicaid recipient's life (and the spouse's life, if applicable), Medicaid will begin "estate recovery" for the total cost spent during the recipient's lifetime. Medicaid will issue a bill to the estate, and, in some states, may place a lien on the recipient's home in order to satisfy the debt. Many estate beneficiaries discover this debt only upon the death of a parent or loved one. In many cases, the Medicaid debt can consume most, if not all, estate assets.

There are estate planning strategies available that can help you accelerate qualification for a Medicaid subsidy, and also eliminate the possibility of a Medicaid lien at death. However, each state's laws are very specific, and this process is very complicated. It is very important to consult with an experienced elder law attorney in your jurisdiction.


Friday, January 03, 2014

Veterans Non-Service Connected Pension Benefits

Veterans’ Non-Service Connected Pension Benefits

The Veterans’ Administration’s non-service connected pension program can help supplement the income of elderly or disabled veterans. The VA deems any veteran age 65 or older to be permanently and totally disabled. This “disabled” classification entitles senior citizens who are veterans, or their widows, to tax-free pension payments regardless of their actual physical condition, provided they meet the needs-based criteria.

One significant advantage of this program is that, unlike a traditional service-connected pension, there is no requirement that your injury or disability be tied to your time in service. On the other hand, this is a needs-based assistance program, so many veterans may not qualify for benefits.

To qualify for benefits under the program, you must have served on active duty for at least 90 days, and at least one of those days must have been during a time of war. Additionally, you must not have had a dishonorable discharge from the military.

Periods of war time are determined by the U.S. Congress as follows:

  • Mexican Border Period: May 9, 1916 through April 5, 1917, only if you served in Mexico, on its borders or in adjacent waters
  • World War I: April 6th, 1917 through November 11, 1918, or through April 1, 1920 if you served in Russia
  • World War II: December 7, 1941 through December 31, 1946    
  • Korean Conflict: June 27, 1950 through January 31, 1955
  • Vietnam Era: August 5, 1964 through May 7, 1965, or beginning February 28, 1961 you served in Vietnam
  • Persian Gulf War: August 2, 1990 through the present

Once qualifying military service is established, you must also pass the income and asset tests. The VA must determine that your net worth is not enough to adequately support you during your lifetime. Your vehicle and primary residence are not counted when determining your net worth.  The VA generally caps net worth, exclusive of your car and primary residence, at $80,000 for a married veteran, or $40,000 for a single person.

Additionally, your countable income must be lower than the available pension amount. Fortunately, countable income is offset by your unreimbursed, recurring health care costs, including prescriptions, insurance premiums or assisted living expenses.
 


Wednesday, November 13, 2013

8 Things to Consider When Selecting a Caregiver for Your Senior Parent

As a child of a senior citizen, you are faced with many choices in helping to care for your parent. You want the very best care for your mother or father, but you also have to take into consideration your personal needs, family obligations and finances.


Read more . . .


Monday, October 14, 2013

The Medicaid Asset Protection Trust

The irrevocable Medicaid Asset Protection Trust has proven to be a highly effective estate planning tool for many older Americans. There are many factors to consider when deciding whether a Medicaid Asset Protection Trust is right for you and your family.


Read more . . .


Sunday, September 29, 2013

Veteran’s Aid & Attendance Benefit: Avoid Scams and Get Trustworthy Advice

Many veterans are unaware of the Aid and Attendance benefit, a component of the Veteran’s Administration Improved Pension that was designed to provide much-needed financial help to elderly veterans and their spouses.


Read more . . .


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Elder Law attorney Andrew Byers assists clients in Auburn Hills, MI and throughout Oakland County, MI including Rochester Hills, Rochester, Troy, Bloomfield Township, Lake Orion, Oxford, Waterford, Clarkston, Independence Township, and Pontiac, as well as throughout the metropolitan Detroit area, including Macomb County and Wayne County, Michigan.



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