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HEFFNER & ASSOCIATES ELDER LAW
Mark B. Heffner, Esq. , CELAHeffner & Associates
615 Jefferson BoulevardWarwick, Rhode Island
www.hefflaw.com
Estate & Medicaid Planning for Individuals with Alzheimer’s
Disease
HEFFNER & ASSOCIATES ELDER LAW
Disclaimer
•Materials are for general education and should not be substituted for consultation with a competent estate planning attorney in your state
•Materials presented from the perspective of Rhode Island
•Rules and practice vary significantly from state to state and are subject to change
HEFFNER & ASSOCIATES ELDER LAW
Lifetime Planning: Health Care Decisionmaking
Advance Directive
Durable Power of Attorney for Health Care
Living Will
Selection of Agent
Selection of Successor Agent
HEFFNER & ASSOCIATES ELDER LAW
Lifetime Planning: Financial Decisionmaking
Joint accounts: Be careful!
Durable Power of Attorney for finances
Determination of Powers to provide
Again, selection successor Agent
Selection of Agent (aka, “Attorney in fact”)
Ex: Gifting and Estate planning?
HEFFNER & ASSOCIATES ELDER LAW
Lifetime Planning: Financial Decisionmaking
Revocable Trust, aka, “Living Trust”
Avoids/Reduces “Push-Back” of Institutions with use of Durable Power of Attorney
Selection of Trustee & successor Trustee critical
Provide no protection for assets for nursing home cost
Instead, would need Irrevocable Trust
HEFFNER & ASSOCIATES ELDER LAW
Planning for post-death
Will—requires probate
Selection of Executor—same person generally as agent under financial DPOA
Revocable Trust—if “funded” will avoid probate for those assets
Note: Need to check beneficiary designations (IRAs, life insurance, annuities), joint titling, as general “trump” Will or Trust
provisions
HEFFNER & ASSOCIATES ELDER LAW
What happens if long-term care needed?
Medicare--limited long term care (LTC) coverage 20 days full payment, up to 80 additional days with co-pay ($157/day)
Medicare LTC coverage initially applicable if individual has a three day prior hospital
admission & continues to require skilled care
After that….
HEFFNER & ASSOCIATES ELDER LAW
Private Pay costs for nursing home care
What is the average monthly cost of a nursing home in Rhode Island (according to the Rhode Island Department of Human Services)?
$9,113/month (approx $290/day)
Actual costs range from approximately $7,500/month ($240/day) — $10,800/month ($360/day)
HEFFNER & ASSOCIATES ELDER LAW
Public benefits available for long-term care
Medicare: (limited) skilled nursing home & (potentially unlimited) home care
Medicaid: pays for skilled nursing home and (limited) home & community-based services
Veterans benefits: (limited) nursing home and Aid and Attendance benefits
HEFFNER & ASSOCIATES ELDER LAW
What is Medicaid?•It is not Medicare!
•Medicaid: in addition to general criteria (age, blind, disabled) & needing a level of care, must also fall within financial criteria (assets, income, transfer restrictions)
•Medicare: insurance model; no asset or income qualification requirements
•Substantial state to state variations
HEFFNER & ASSOCIATES ELDER LAW
Resources
Excluded (Single Person)•Home (equity value limit: $552K) if “intent to return”
•Household goods & personal effects( no value limit, unless exceptional)
•Vehicle (limit: $4500, unless used for transportation to medical appts)
•Life Insurance ($4000 face limit)
•Irrevocable Burial Contract, or funds set aside for burial ($1500)
•Funds otherwise available (limit: $4000)
Available
EVERYTHING ELSE
HEFFNER & ASSOCIATES ELDER LAW
Resources
Excluded (Married Couple)
•Home: no equity limitation if residence of “Community Spouse” (CS)
•Vehicle: if used by CS, no limitation on value
•CS retains “Community Spouse Resource Allowance” (CSRA)
HEFFNER & ASSOCIATES ELDER LAW
Transfers of Assets
Any transfer occurring on or after February 8, 2006 is subject to five year lookback period
Q: What types of transfers fall within lookback period?
A: Uncompensated (UV) transfers--i.e., those for which fair market value (FMV) not received by applicant or the applicant’s spouse Parent gives adult children each $10,000
Uncompensated transfer: $30,000
HEFFNER & ASSOCIATES ELDER LAW
Medicaid Planning Techniques
Highly individualized—one size definitely does not fit all!
• Spenddowns—debts, taxes, burial contracts.
• Specialized annuities—married couples only
“Crisis planning” techniques include:
• “Reverse half a loaf” planning
• Many more opportunities exist for married couples; however still “never too late” for single individuals
HEFFNER & ASSOCIATES ELDER LAW
Medicaid Planning Techniques
Non-crisis, or “pre-crisis” planning techniques include:
• Make transfers, incur five year lookback period
• Transfers—must be mindful of tax implications, creditors—grantor Irrevocable Trusts useful device.
• Durable Powers of Attorney with estate and Medicaid planning authority provided to agent
• Again, highly individualized as to what techniques to use & timing of use of techniques
HEFFNER & ASSOCIATES ELDER LAW
How to get started
Arrange for consultation with competent elder attorney
Preparation: provide elder law attorney with individual family, financial and health information
Initial meeting should be at least an hour
Expect fee for initial consultation
HEFFNER & ASSOCIATES ELDER LAW
National Elder Law Foundationwww.nelf.org
Locating competent elder law attorney
Certified Elder Law Attorney
Provides interactive state map of Certified Elder Law Attorneys (CELA) in each state
HEFFNER & ASSOCIATES ELDER LAW
Mark B. Heffner, Esq. , CELAHeffner & Associates
615 Jefferson BoulevardWarwick, Rhode Island
www.hefflaw.com