Month: March 2017

Who Pays the Nursing Home While Waiting for Medicaid Approval?

Can a person apply for Medicaid before assets are spent down to below $2,000?

Once assets are down to $2,000, who is responsible for paying the nursing home costs while waiting for Medicaid approval — the wife, the children – and how much must be paid to the nursing home?

Medicaid attorney in jacksonville florida for medicaid benefits to pay for nursing home costsIn Florida, an individual can apply for Medicaid benefits to pay nursing home costs before they are actually eligible.  The approval will take effect upon the date the application is approved. While the nursing home resident’s application for Medicaid benefits is pending, the nursing home resident is considered “Medicaid pending.”  When someone has the status “Medicaid pending,” generally the resident will pay all of the resident’s income to the nursing home facility.  If the nursing home resident’s income is greater than what is allowed to qualify for Medicaid benefits, then a qualified income trust wil become necessary.

In some cases, a healthy spouse of the nursing home resident is entitled to a share of the nursing home resident’s income. In other cases, the spouse of the nursing home resident is entitled to a share of the nursing home resident’s assets. In those cases, the nursing home resident can transfer savings to the spouse rather than spending down assets to less than $2,000. As elder law attorneys, we can help you determine how these different scenarios will work in your situation.

For more on Medicaid’s protections for the healthy spouse so that the healthy spouse is not rendered indigent and can remain in the home after the nursing home resident is living in the nursing home (the “community spouse”), click here.

For more on shifting income to the healthy spouse from the spouse in the nursing home, without interfering with receiving the Medicaid benefits to pay the nursing home, click here.

For more on transferring assets to the healthy spouse to bring the nursing home resident’s assets below $2,000, click here.

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Better to Play it Safe: Proactive Estate Planning and Cognitive Impairment

Elder law attorneys can help plan your estate to include cognitive impairment or Alzheimer's diseaseMost financially savvy individuals begin planning their estate when they’re in peak mental shape. The idea that this might change at some point in the distant future is an unpleasant one, and they would rather go about their estate planning as if they’ll be as sharp as a tack late into their golden years. Unfortunately, this common approach of ignoring a potential problem and hoping it simply won’t happen can leave a giant hole in your estate plan. Read on to find out that this common hole can be more easily filled than you might think.

Expect the best, but plan for the worst

The reality is that an individual’s chances of experiencing some form of cognitive impairment rise with age. While it’s never certain whether cognitive impairment will occur, smart estate planning means factoring it in as a very real possibility.

As the huge baby boomer generation transitions from the workforce and begins to make their way into retirement, cases of Alzheimer’s are expected to spike from the current 5.1 million to 13.2 million as soon as 2050. Alzheimer’s is just one of several cognitive impairment conditions along with dementia and the much more common mild cognitive impairment, or MCI, which is often a precursor to those more serious ailments.

As U.S. life expectancies increase, the chances of living with cognitive impairment increase as well — with at least 9.5 percent of Americans over 70 experiencing it in one form or another.

No matter your age or family history, cognitive impairment can affect anyone although it’s widely accepted to affect mostly older adults. As you implement or revise your estate plan, it is well worth the effort to plan for this potential. Luckily, estate planning attorneys have developed good solutions to handle this circumstance and can help guide you on the best way to protect yourself and your family.

An easily-avoidable estate planning mistake

Consider Ashley’s story. A successful real estate agent with a stellar career in her hometown of Kalamazoo, MI, Ashley begins planning her estate in her mid-thirties.

She partners with an estate planning attorney, and together they draft a revocable living trust with Ashley’s preferred beneficiaries and charities in mind, figure out guardianship for her two sons in case she and her husband pass suddenly, and settle on an appropriate beneficiary for her life insurance policy. Now that she knows where her assets will go after her death, Ashley rests easy assuming there’s nothing more that needs doing in her estate plan.

Save your family from obstacles and conundrums

But forty years down the road, Ashley’s children realize her MCI is developing into Alzheimer’s. Although she’s occasionally visited with her attorney to make adjustments to her plan,  she never added any provisions for how she wanted her children and other guardians to handle a situation like this. Here’s where things get complicated.

Ashley did not work with her estate planning attorney to put disability provisions into her trust and never worked with an insurance professional to purchase adequate income insurance or long-term care insurance. The care she requires to live her best life possible with cognitive impairment doesn’t come cheap. Those mounting care costs will likely quickly erode Ashley’s estate. As a result, her estate plan may no longer work as intended, since it no longer lines up with her actual asset portfolio.

But since Ashley does not have the ability to rework her estate plan in her current mental state, her family is left with the burden of figuring out what to do while navigating a complex and bureaucratic legal system in the guardianship or conservatorship court. No one in the family really knows what Ashley’s wishes are regarding both serious medical decisions and financial changes. All Ashley’s family wants is to see her enjoying her remaining years in peace and security, but they are now tasked with using guesswork to make difficult choices on her behalf while a guardianship or conservatorship court watches every move.

There are several alternatives to a court-supervised guardianship or conservatorship, but they involve advanced planning – either when you complete your estate plan, or later before the onset of such impairments.  After Alzheimer’s has made it impossible for you to have legal capacity to sign documents, it is unlikely you’re circumstances will ever improve so that you parents will find you old.

Give us a call today

Factoring the potential for cognitive impairment into your estate plan doesn’t have to be a headache. In fact, a little effort now by legally designating who you want to be in charge and what you want them to do can have a wonderful impact on you and your family later on. We can work together to ensure your estate plan is ready for whatever life throws your way. Give us a call today to find out how painless and cost-effective this process can be.

Avoid Living Probate: How to Keep Guardians and Conservators Out of Your Estate

While most long term care and estate planning to avoid guardianship - elder law attorney or estate planning attorneyproactive individuals know the importance of having a well-rounded estate plan, it is typically considered as something that will take effect
after they have passed away. But there are in fact many ways in which comprehensive estate planning can have a positive impact on your life while you are still around to reap the benefits.

Planning for Incapacity

Most people who reach old age come to a point at which they are no longer in a position to handle all of their affairs on their own. In many cases this incapacity is due to dementia or other cognitive impairments associated with the elderly. At that point, the decisions they’ve made with their estate planning attorney can have major repercussions on their lifestyle and the handling of their wealth.

Take Alex for example. Long before Alex retired from his long and successful career as an IT manager at a large corporation, he put a cursory estate plan in place with a will detailing who would get which of his assets upon his death. But, Alex didn’t update his plan as he aged. In his late seventies, he developed Alzheimer’s and it became unclear to his family how to proceed with his medical care and wealth management. Since Alex did not formally choose an individual to be in control of his affairs in the event of incapacity, it falls upon the court to appoint a guardian or conservator. Unfortunately, that’s where things get complicated.

What is guardianship?

Guardianship goes by a few other names, so it’s important to get familiar with various terms used to indicate similar and somewhat overlapping concepts. The other terms you may hear include “conservatorship,” “plenary guardianship,” and “living probate.”

It’s important to note that these terms are used in slightly different manners from state-to-state, with some states using “guardian” and “conservator” interchangeably. Others maintain the distinction of a guardian being a person who makes decisions about medical care and living arrangements, whereas a conservator makes decisions about property and assets. In either case, the guardian or conservator is essentially a substitute decision maker that’s authorized by the court to make decisions on behalf of the incapacitated person.

3 Reasons You Should Avoid It

In the process of living probate, the court tries to settle on solutions that will fit the incapacitated individual’s best interests. That being said, there is a much better way. Here are just a few of the reasons guardianship and conservatorship are not ideal fallbacks:

  1. Cost: To put it simply, living probate is expensive. The legal fees associated with court-appointed attorneys representing incapacitated individuals can chip away at their estates very quickly. Living probate also brings your affairs into the public sector.
  1. Privacy: Alex may not have wanted his family to have to experience the financial and emotional costs of his living probate court proceedings, but he may also have felt less than enthusiastic about his personal affairs being discussed in a public forum.
  1. Clarity: In addition to it being costly and a compromise of privacy, living probate is also full of guesswork. If Alex had assigned powers of attorney and established long-term care provisions in his estate plan, his affairs would be handled exactly as he wished in the event of his incapacity. When the court is involved, they usually apply default rules of state law, which means the legislature is essentially making some choices for you and your family.

How to Structure Your Estate Plan

So what does an individual like Alex need to do in order to avoid the chance of his family having to go through living probate? There are a few specific steps we can take to make in planning your estate to ensure your affairs never end up in a court-appointed guardian’s hands:

  • Powers of attorney: A complete estate plan includes named powers of attorney who will fulfill the roles of guardians and conservators in the event of your incapacity. The difference is that these individuals will be chosen by you rather than by the court. There are a number of different types of powers of attorney for specific purposes, such as a healthcare power of attorney or a general durable power of attorney, the latter of which controls the management of your finances.
  • Long-term care planning: Although you may never need long-term care, building a strategy for it into your estate plan will allow you to relax knowing that you’ll receive long-term care according to your wishes if that becomes necessary. This type of planning also helps protect the assets in your estate plan from being used up on medical expenses before going to your beneficiaries.

Avoiding guardianship and conservatorship through living probate is a relatively pain-free process if handled well ahead of time. Get in touch with us today to go over the parts of your estate plan that may need amending to give you and your family the best possible outcomes. We are here to help and can quickly get your estate plan in optimal shape.