Estate Planning and Medicaid Myths Debunked
Explore the essentials of estate planning, including key documents for illness and incapacity, asset distribution, and planning for minors and disabled spouses. Uncover the truths behind common myths about Medicaid eligibility and learn effective financing strategies for long-term care. Gain insights into the maintenance of estate plans, debunking myths, and ensuring proper asset distribution. Stay informed and prepared for the future with expert guidance from Christina Lesher, an experienced elder law attorney.
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Financing long-term Care for Older Adults: The Myths, The Facts and Planning Strategies CHRISTINA LESHER- ATTORNEY PRIVATE PRACTICE WWW.LAWLESHER.COM 713-529-5900 FACEBOOK: LAW OFFICE OF CHRISTINA LESHER PC TWITTER: @LESHERELDERLAW
Todays presentation Estate planning and disability planning documents Medicaid Myths How to pay for long-term care expenses
Checklist of Documents For Illness/ Incapacity & Medical Decisions 1. Durable Power of Attorney/ financial power of attorney/ business power of attorney: Appoints an agent to handle business/ financial affairs- effective now or @ incapacity- provide a copy of POA to each financial institution 2. Medical Power of Attorney- Appoints an agent to make health care decisions- effective @ incapacity 3. Directive to Physicians- Allows you to put in writing your desires for end-of-life treatment-effective @ incapacity 4. HIPAA Release- Allows you to appoint agents who can access your medical information- effective now 5. Do Not Resuscitate- allows a person or family member to elect to not be resuscitated (CPR, advanced airway management, defibrillation, artificial ventilations and cardiac pacing.
Documents that distribute your assets at death A Will appoints an executor and distributes your assets to family/friends/ charity at death. Probate transfers title and ownership of certain types of assets at your death. A Trust appoints a Trustee to handle assets for incapacity and distribute trust assets at death. Out of state property, easier for your beneficiaries, more private Beneficiary designations trump the will and must be reviewed carefully- especially for long-term care planning Appointment of agent for designation of remains- funeral/burial Personal Items- give away now or letter of instruction Special or Supplemental Needs Trust provides for asset management and eligibility for public benefits. Planning for Minor or Disabled Children Planning for a Disabled Spouse
Estate planning maintenance If I have out of state documents I need to________________. If I spend significant time in another state I need to_________________. I need to review my estate plan every ___________ years. I need to review the following: Agent_________________ Distribution plan_____________ (including a careful review of your beneficiary designations) Life changes_______________
Medicaid Myths You have to be impoverished to qualify for Medicaid You should transfer your house to your children You should transfer money/assets to your children You should have done something 5 years ago The Miller trust will help you preserve assets
Who pays for long-term care? Limited Medicare Coverage Veteran s Benefits 1-800-827-1000 (then press 1 then press 0) Nursing homes for Veterans Aid and attendant benefits (cash benefit for Veteran and surviving spouse) Va.gov See Local Field Office- enroll in health care Long Term Care Insurance Private Pay Medicaid- usually limited to nursing home settings or at home under Star Plus Waiver
Quick Lesson on Medicare and Medicaid Medicare- at 65 or disabled for 2 years Federally Administered Entitlement 80/20 insurance Most programs not Means Tested Part A- Hospital Insurance Part B- Medical Insurance Medicaid- needs based Medicaid myths Uses State & Federal Funds State Administered 109 different Medicaid programs in Texas Means Tested- income, asset test Medical/ Disability test Spousal Protections- special rules for married couple Special rules for families with children under the age of 21 or family members with disabilities
What does Medicaid pay for? Caregivers for home care Nursing home costs Assisted Living (sometimes) Deductibles Medical and Support needs Prescriptions* (Medicare Part D) Does not cover: Bed hold charges Some miscellaneous medical supplies
Medicaid requirements Income test- depends on the program Asset test Countable Exempt Medical test Location requirement Gifts or transfers- 5 year look back period, Medicaid will reduce benefits if you give away assets, transfer assets, or pay for items for another person Penalty starts at application of benefits, and meet all qualifications except for the transfer
Exempt and Countable Assets Exempt Your house ($595,000 unless there is a community spouse or minor or disabled child at home) One car Your wedding set Retirement Accounts (usually if over 70 ) Term life insurance Pre-need funeral contract Countable Checking & Savings Accounts Annuities (unless meets certain requirements) Second Car, Second Home Cash Value of Life Insurance Policies
Resources for married couples Depends on the amount of countable resources they had as of the first month of stay in the medical institution All assets of both spouse must be disclosed Depends on the income* of the Community and Institutionalized Spouse Many couples will spend down their assets needlessly There are many techniques such as: Apply for Star Plus Waiver first- can protect more countable assets Gifting (must do with advice from attorney), Administrative appeal, Purchase of annuity, Purchase exempt assets, Special Needs Trust
Resources for single people $2,000 in countable resources Homestead is exempt up to $595,000 in equity- unless minor or disabled child (but estate recovery applies) Planning strategies exist- Gifts to disabled children Gifts to disabled individuals Gifts to kids under age 21 into educational account (TUTMA)Tx Uniform Transfer to Minors Act
Star Plus Waiver- home benefits Provides 30-50 hours a week of care at home, pays for medical costs Medicare and supplemental insurance doesn t cover Spouses get to keep more countable assets Pre- qualify medically and financially for NH Medicaid Interest List- call 211 2021 Income requirement Single $2,382 Gross monthly Couple $4,764 Gross monthly Can fix with Miller Trust Resource requirements Married couples w/ less than $4,500 (usually) of income (SS/Pension) usually get to keep all countable assets Some resources count Countable= fair market value Some resources are exempt $0 value Medical Necessity Care provided by a trained professional, nurse supervisor Not include inability to perform activities of daily living
Nursing home benefits Pre- qualify medically and financially for NH Medicaid using Star Plus Waiver Must be in a Medicaid nursing home, and in a Medicaid bed Income requirement Single $2,382.00 Gross monthly Couple $4,764.00 Gross monthly Can fix with Miller Trust Resource requirements Married couples w/ less than $4,500 of income (SS/Pension) usually get to keep all countable assets Some resources count Countable= fair market value Some resources are exempt $0 value Medical Necessity Care provided by a trained professional, nurse supervisor Not include inability to perform activities of daily living
Medicaid estate recovery Usually applies to a home- can avoid with lady bird deed Only applies if there not an exemption E.g. surviving spouse Disabled child Value of the estate is less than $10,000 Amount owed to Medicaid is less than $3,000 Cost of selling the property is more than the property is worth Unmarried adult child living in the home full time one in the Medicaid applicant s home one year before the person died. Only applies to probate assets
V A benefits for long-term care Example: amount for veteran w/o dependent VA is a cash benefit for a veteran or surviving spouse of a veteran See VA.org for information on veteran w/ dependents and surviving spouse Example: single veteran w/o wife MAPR (Max annual pension rate) $22,939 or $1,911.58 per month Basic Pension + housebound + Aid and Attendant Service Pension $13,752 annually (min.) Housebound $16,805 annually (mid.) Aid and Attendant $22,939 (annually max.)
V A requirements- for a Veteran w/o dependents MAPR (Max annual pension rate) $22,939 or $1,911.58 per month Basic Pension + housebound + Aid and Attendant Service Pension $13,752 annually (min.) Housebound $16,805 annually (mid.) Aid and Attendant $22,939 (annually max.) Requirements: 90 days one day during a period of war Discharge honorable Income to be reduced by the amount of reasonably predictable unreimbursed medical expenses exceed 5% of the MAPR Net worth assets + income (after medical expenses deducted) is less than $130,000 Asset transfer- 3 year look back period apply to covered assets - amount over the net worth assets subject to penalty period/ loss of eligibility For assets transferred after 10/18/18
V A Medical requirement Basic Pension To meet the disability requirement, a veteran must meet ONE of the following conditions: Be a minimum of 65 years old Have a permanent (there is not a chance or is very little chance the disability will improve) and total (100% disability rating) non-service connected disability Reside in a nursing home facility due to a disability and require long term care Be a recipient of disability benefits from Social Security Aid & Attendance Requirements For the A&A Pension, a veteran or his / her survivor must meet ONE of the conditions below: Need assistance with Activities of Daily Living (ADLs), such as bathing, grooming, dressing, eating, and mobility. Be bedridden (confined to one s bed) Be a resident of a nursing home facility due to the inability to function physically or mentally Have profound visual impairment (both eyes have equal or less than 5/200 visual acuity OR the visual field has concentric contraction equal to 5 degrees or less) Housebound Requirements To be eligible for the Housebound Pension, a veteran or his / her surviving spouse must be substantially confined to his / her home due to a disability that is permanent.
What is a care manager and why you need one Assists in locating appropriate long-term care placement Assess needs and situation to establish a plan of care Your own personal tour guide through the maze of healthcare Monitor care in nursing home, assisted living, adult day care, etc. Saves you time, energy and money, and provides peace of mind! www.aginglifecare.org
Resources Elder Law Attorneys www.NAELA.org Medicare Coverage www.medicare.gov Medicaid www.dads.state.tx.us Veteran s Benefits 1-800-827-1000 www.va.gov AARP - www.aarp.gov Alzheimer s Association www.alztex.com
Speaker contact information: Christina Lesher 5615 Kirby Dr. Ste 412 Houston, Texas 77005 713-529-5900 www.lawlesher.com Facebook: Law Office of Christina Lesher
