Monday, January 18, 2016
Some People Don’t Need to Plan for the Cost of Long-Term Care
Some people do not need to plan for the cost of long-term care. That may sound like a shocking statement coming from an elder law attorney, but it’s true. Our firm holds seminars on many topics, one of which is “Don’t Go Broke in a Nursing Home!” (If you’d like to attend one, just call our office at 806-765-8801 for upcoming dates and to reserve a seat in Amarillo, Lubbock or Midland, Texas).
This entire session is designed to arm you with loads of information on the risks of NOT planning for the high cost of long-term care, what that could look like for you, and what solutions could work for you. And even though there is a lot of great information presented – most people are glad they spent the time with us to gain a better understanding of these topics – the question really comes down to something I can’t tell you.
That is: what do you have to lose?
Let’s look at a few scenarios to get an idea of what I mean.
Scenario #1: You have hardly any assets.
If you have next to no assets, you probably don’t need to do the type of planning that our firm focuses on. Medicaid is a state/federal program that pays for long-term care for those who meet the rules of eligibility. Having no assets to speak of makes qualifying for Medicaid easier – though not a given (there are still things like gifting penalties that can trip you up and delay eligibility for a long time!). But generally, if you have no savings, you may not need my help because 1. You’ll qualify for Medicaid fairly easily, with no need to take advantage of all the rules that could spare your savings from having to be spent, and 2. You don’t need to direct who gets your assets in the future.
One caveat before you decide this is where you are – your home and cash value life insurance are assets! If you own a home, and you or your spouse need care in a nursing home – your home can be lost to Medicaid Estate Recovery if you don’t take steps to protect it. We can help you protect the home for your heirs. If you have life insurance with cash value, that is an asset that by itself can prevent a person from being eligible for Medicaid nursing home benefits without the right advice on the rules.
Scenario #2: You don’t have major preferences for how or where you get care once you need it.
If you don’t have a goal of staying in your home as long as possible, then you may not need long-term care planning. Or, for instance, once you need a higher level of care, if you don’t really have a preference for whether you receive that care in an assisted living or in a Medicaid certified nursing home, then you may be fine not doing any long-term care planning.
Scenario #3: You have so much in savings that you can absorb a new cost of $60,000 to $100,000 a year.
This means you will be able to entirely “private pay” or self-fund your long-term care over what could be a very long period of time. There are some people in this position – they can take on a new annual expense of long-term care without breaking a sweat. When deciding if this is you, remember that these numbers are for the current cost of the highest levels of care. At current growth rates, the cost of all types of long-term care will double over the next 20 years.
But if scenario #2 fits you – you’ve got lots of assets and you can afford to spend a big chunk of them on long-term care, then congratulations, you’re probably fine in paying for your future long-term care entirely out of pocket. The bigger issue you may need my help with is making sure the pile of assets you’re relying on isn’t taken from you, or the loved ones you plan to give your stuff to, by the 4 Ds: debt, divorce, disability, and death. For more about how these can rob you of your assets and what you can do to build a “wall” around them, call my office at 806-765-8801 to get my book, “Don’t Go Broke in a Nursing Home,” register for my seminar on protecting assets, or call for a free initial consultation.
Scenario #4: You’ve built up some savings, but you’d like to know what might be available to help you pay for some of the cost of your long-term care, so your savings will last longer.
This, frankly, is where most of the people who hire me find themselves. This is what we do – help people assess what they have, where and how they’d like to get care when that day comes, and figure out how to get help paying for it so that they can protect their assets.
Where do you find yourself? The question to ask yourself is: what are my goals and what do I have to lose?
Wednesday, August 14, 2015
How Can $600 A Month in income be “too much” to the VA?
I actually got this question at a VA seminar I did in Lubbock recently. It happened at the break in the middle, as people got up to stretch their legs or grab another cup of coffee before I dove back into the main rules of eligibility for the VA Pension benefit that is so important to many of our clients in paying for care. It’s called the “Non-Service Connected Pension with Aid & Attendance.” Why the long name? Well there are two main monthly benefits that Veterans can be eligible for. One is service-connected disability compensation – which requires that the Veteran can prove that they have an illness or injury that was caused by their service. You will hear these Veterans say they’ve been assessed to have a percentage disability rating like 30% or 40% (can go as high as 100%). Their monthly benefit amount depends on that disability rating.
The other main monthly VA benefit for wartime Veterans is the VA Pension. This benefit does not depend on the Veteran proving any sort of injury or illness during their service at all. It is not a “service-connected” benefit. If you think of VA Pension as a layer cake, base pension is the layer on the bottom, but the “Aid & Attendance” layer can be added on the top to achieve the highest level of benefit.
Surviving spouses of wartime Veterans can be eligible for this benefit too!
So what is to be gained by claiming this benefit? Here are the tax free benefit levels by marital/dependent status:
Surviving Spouse of Veteran $1,149 per month
Single Veteran $1,788 per month
Veteran with Spouse/Dependent $2,120 per month
Nothing to sneeze at right! You can see why this important benefit is the missing piece of the puzzle in paying for care for so many of our clients.
So how do you become eligible? It’s not as clear cut as you would hope.
There are 4 prongs of eligibility:
#1 Service Requirement
#2 Need for Care
#3 Asset Limitations
#4 Medical Expenses vs. Income
If you’d like to take part in an in-depth discussion of the rules and really understand the ins and outs of this benefit, call my office and sign up for our Veterans Pension seminar. It’s free! Well, it will cost you two hours of your time, but it will be time well-spent for you or someone you love who could be eligible for this new income.
For purposes of today’s discussion, I won’t go into the details of all the rules. I want to focus on just the last one. Hands down, most of the people I talk to who have tried to apply for this benefit on their own have been denied because of #4 above: Medical Expenses vs. Income. And the denial letter they get won’t help them understand why they’ve been denied. It will simply say they have too much income. This is what happened with the lady I introduced you to at the beginning of this post. Let’s call her Wilma.
Wilma lives at home, but needs the help of her daughter on a regular basis to stay there safely. Her daughter attended the seminar with her. Wilma is the surviving spouse of a wartime Veteran and literally has $600 per month in social security income. She applied for VA Pension with Aid & Attendance, and was denied – for having too much income!
The real issue is that she didn’t have enough countable medical expense. Under the rules for this program, the claimant must have as much medical expense as they have income to qualify for the maximum benefit amount! This one rule is the reason we see so many people be unsuccessful applying on their own. Or if they are approved, it’s for something like $200 a month. Now, $200 a month is better than nothing. But $2,120 per month is a lot better!
As I talked with Wilma and her daughter about her situation and her need for care, I knew that we could help her get the full benefit amount, and that this would give her options for care that she would never otherwise have.
If you or a loved one would like more information about his benefit, call our office today for a free qualification assessment by phone. You have nothing to lose, and a whole lot to gain.
Tuesday, August 11, 2015
What Is Elder Law?
What is elder law? This is a question I get all the time, and for good reason. Much of what we do today in our office is informed by a reality that simply wasn’t true 30 years ago. That is: we are living longer, and are much more likely to need the care of another person before we die. Some of us will need an increasing amount of this care for a long time. And it’s expensive!
So whereas traditional estate planning is about what happens when you die – who gets your stuff, when, and who controls it – elder law is about what happens if you don’t die. What happens if you just live a really long time? How do you protect the assets you have so they will last the journey by getting help with your rising care costs?
That is the question we help families answer every day. It’s complicated, and each case is a bit of a puzzle. To do the very best for our clients, we look at their situation in a comprehensive way: we start with their existing estate planning documents if they have them, and update them when they no longer work for them. From there we look at their entire asset picture to see how much they have, in what kind of assets and how it’s held (titled). Getting this right is crucially important to the strategy we will pursue for our clients, and you wouldn’t believe how many people don’t really know what they have! But seriously, it’s understandable because for many of the families we serve, our client is Mom or Dad, but the person who is helping us get the planning in place in really their daughter. She is the one who is giving us the information on what their savings consists of, and that can be a bit of a scavenger hunt sometimes, especially when Mom or Dad has Alzheimer’s!
Whatever the case, we help our clients get an accurate picture of what they have because this is the starting point to finding resources to pay for care. Once we know the asset picture, we then look at the need for care and the cost. Is Mom going to be able to stay at home if she can find some resources to pay for in-home care, or is an independent living or assisted living community a better option for her because she needs people around her for safety and social support? Sometimes we find that the level of care that has been appropriate for some time now isn’t. A sudden decline sometimes necessitates memory care in a secure facility so Mom can’t wander, or full nursing care in a facility because the care needs are simply too great to be met anywhere else.
We call it the “care journey” and we rely on the family and the client’s doctors to help us predict what that journey might look like, because which resources would be the best to pursue to pay for it (VA Pension benefits, Medicare, Medicaid, private sector long-term care options) sometimes depends on what type of care they currently need.
On that point, I want to back up a minute. I just mentioned the care journey, and the smartest thing you can do for yourself and your loved ones is to realize that most of us will have one! According to the U.S. Department of Health’s 2010 study, 70% of people over age 65 will require at least some type of long term care services during their lifetime. And for women, the risk is greater – 79%. So you can see that the big question facing all of us at some point in time, either for someone we dearly love, ourselves, or both, will be: how do I pay for this care in a way that doesn’t drain all of my savings? How do I make sure that I’m not out of money before I’m out of breath? The earlier you start planning, the better your options.
Helping families protect their savings and pay for the care their loved one needs is the work we do every day at our firm, and we love what we do. If you would like create a plan to have peace of mind in the future on your own care journey, or you have a loved one who needs care right now, give us a call. The consultation is free.
Monday, August 10, 2015
When Your Loved One Needs a Guardianship and How to Avoid It
There is a lot of confusion about what a guardianship is in the State of Texas and when it’s needed. In fact, a lot of folks I run into think that because they can get a guardianship over a loved one if they need it is a reason NOT to do proper planning. Bad idea!
In our firm, we usually have several ongoing guardianship cases at a time. We serve our clients well, and the outcome helps solve a difficult situation, but I’m betting there’s not one of our clients who, in hind sight, wouldn’t avoid having to go down that road if they could go back and do some things differently.
What could they have done differently? They could have urged their loved one to get a good expanded durable financial power of attorney and a medical power of attorney in place while they still had capacity to do so. A person can lose capacity to make their own decisions and sign legal documents for a number of reasons. Sometimes it’s because they have a catastrophic injury like a brain injury from a car accident or stroke. But sometimes it’s a progressive disease like Alzheimer’s or some other dementia. Many people do not understand that their spouse or their kids will not be allowed to simply step in and make financial and medical decisions for them if they lose the capacity to make these decisions on their own.
In some cases, the only recourse the family has in these situations is to seek a guardianship. Guardianship is expensive because the person seeking the guardianship must hire an attorney to represent them before a judge and prove that the proposed “ward” (the person who has lost capacity and can no longer make decisions for themselves) is indeed in need of a guardian. In addition, the court must appoint an attorney to represent the proposed ward, called an ad-litem, to make sure that their rights are protected. So, the loved one seeking the guardianship to take care of Mom or Dad now has to pay for two attorneys!
The headache doesn’t stop once the guardianship is in place. Let’s say you’re the loving daughter who sees that Mom’s Alzheimer’s has progressed to the point that she is a danger to herself, wandering the neighborhood at night not knowing who she is, and she’s been falling for every scam that comes her way – giving money to the Nigerian Lottery con artist who calls her on the phone and says her winnings will arrive tomorrow . . . if she will just pay the $10,000 processing fee by credit card over the phone. Because Mom did not give you the power to act as her agent on a valid power of attorney while she still had the mental capacity to do so, the court is going to require that once you have been named guardian, you must account for how you spend every single penny of Mom’s money. It has to! You’ve forced an arrangement on Mom that has taken her rights away. The judge may have decided you are fit to make all of Mom’s medical and financial decisions, but it also has to hold you accountable. This is done by requiring that you track expenditures of Mom’s money and report annually to the court where and for what reason the money was spent.
If Mom had just signed a valid durable financial power of attorney and a medical power of attorney while she still could, naming people to act for her, all of this expense and record-keeping could have been avoided.
None of us knows when the unthinkable could happen – a car accident, stroke or other injury that could leave us without the ability to make our own decisions. And progressive degenerative diseases like dementia can cause a person whose abilities have been fairly stable at one level, to experience a sudden drop in capacity. Powers of attorney protect you by making sure the person or people you want making those decisions can step in and take care of your financial and medical needs. There are many different ways these documents can be crafted, and the financial power of attorney needs to have some very specialized language (not the ones on the internet) to allow your agent the maximum latitude to help protect your assets and pay for care, should you have a long (and expensive!) care journey due to illness or injury. But that is a topic for another day.
The best advice I can give you in this area is this: take action today to make sure you and your loved ones don’t ever need a guardianship! Plan for peace of mind with good powers of attorney.
As an Elder Law attorney, at least half of the families who come into my office are living with a loved one who has Alzheimer’s. From what I’ve seen, education is vital to help families understand the disease, and get the legal planning in place to protect the financial resources needed to ensure that loved one’s quality of life.
So I want to invite everyone to join me at the Answers For Alzheimer’s Workshop, Saturday March 2, 2013. This will be a one-day Workshop on a range of issues important to families dealing with Alzheimer’s. The event is being held at the Texas Tech University Health Sciences Center, Academic Classroom Building, Room 110. Registration begins at 9:30 a.m. Lunch is provided.
I’ll be speaking on the legal planning that helps pay for Alzheimer’s care. Other topics will include: current research, driving, managing difficult behaviors, and stages of the disease.
Come with your questions ready, and take advantage of some great resources for Alzheimer’s care assembled in one place. We’re all in this together!
By the way, hope you didn’t miss this amazing story on some cutting edge Alzheimer’s research:
There’s nothing more red, white and blue than the annual Texas Tech Red Raider Battalion ROTC ball. Miss Texas made an appearance as the date of Cadet Luke Guffey. And get this – he asked her to accompany him to the event in a video he posted on the internet! The night’s featured speaker was Maj. Gen. Walter B. Huffman (Ret.), a former Judge Advocate General, decorated Vietnam veteran and the recipient of the 1995 Texas Tech Distinguished Alumni award.
You can read more about the ROTC Ball here:
If you’re a veteran with medical expenses, you may qualify for a Special Pension for Veterans, which could provide you with up to $1,949 per month, even if your disability is not service-connected.
This little-known pension benefit, commonly known as Aid and Attendance (A&A), can provide a monthly income to offset the cost of needed medical care. It’s available to veterans and the widowed spouses of veterans who meet the eligibility and income criteria. [Read more…]
Even if you were not injured while on active duty with the military, you may still qualify for certain Veterans benefits. These little-known benefits can provide you with monthly payments to help pay for medical expenses, even if your injury or illness was not received while on active duty.
For veterans, and their surviving spouses, who have medical need that requires at home or nursing home care, whether or not the medical need arises due to an injury or illness received while on active duty, there is a Special Monthly Pension, sometimes called a “Housebound” pension or “Aid and Attendance” benefit. To be eligible for the Aid and Attendance Benefit there are specific requirements for the veteran’s time of service (must have at least one day of service during a “time of war” and 90 days of active duty service), medical need (either 65 years of age or older or able to show permanent total disability) and financial need.
The Special Monthly Pension is not just for those veterans who were injured while on active duty. Many veterans and their surviving spouses are now reaching old age, along with some of the debilitating illnesses that occur with old age. If the veteran or his or her surviving spouse can demonstrate financial need, they may qualify for up to $1,949 in monthly benefit.
This is different than Disability Compensation, which is a monthly income benefit for a veteran who was injured or who obtained a disease while on active duty (a service-connected disability). The monthly income paid through Disability Compensation is based on the extent of the injury or disease. To receive the compensation benefit, the veteran’s injury must be reviewed and determined as to its level of severity from 0% to 100% in 10% increments. A key point to note is that the Disability Compensation benefit is not reduced by the veteran’s income, either earned or unearned, or by the veteran’s net worth.
There are a number of benefits available to veterans who served our country, but finding your way through the maze of the Veterans Administration can be a challenge. As with all veterans’ benefits, it’s important to seek the guidance of someone who knows the ins and outs of the system.
Only employees of the Veterans Administration, an authorized representative of a veteran’s service organization such as VFW, or is an attorney accredited with the VA who is also licensed in your state can provide you with advice and guidance about veterans benefits. You may also benefit from the advice of an estate planning or elder law attorney and a CPA, who can help you structure your assets and income to best meet your health and financial well-being. But be aware, not all estate planning attorneys are accredited with the VA, but many attorneys accredited with the VA are also elder care or estate planning attorneys.
Finally, it’s important to note that under federal law, no one can charge to assist you with completing VA paperwork. You can search the VA web site for a VA-accredited attorney in your state at:http://www.va.gov/ogc/apps/accreditation/index.asp
If you are in the Lubbock, TX or West Texas area, give us a call and we will be happy to discuss your situation.
An estate plan is often thought of as something that only elderly people or people with a lot of money need. But a basic estate plan is important no matter what your net worth is, and especially important if you are:
- A parent of a minor child
- A homeowner
- A small business owner
- In a committed relationship but not married
- In receipt of an inheritance of property or other assets
Even a basic estate plan will ensure your wishes are adhered to after you die. [Read more…]
Today, I thought I would take some time to give you the top ten mistakes I routinely see people make in Medicaid Planning and Estate Planning. These are for your information, and as always, I encourage you to seek legal advice for your specific situation if you think you may be about to make one of these missteps.
1. Failing to seek competent legal advice and to sign legal documents prepared to fit your family’s particular needs. Generic plans can’t anticipate your family’s individual circumstances. [Read more…]
If you are a Veteran or a Widow of a Veteran, you may be able to obtain tax free income from the VA to help pay for the cost of home health care, assisted living care, and nursing home care. The benefit is referred to as “Improved Pension” or “Non-Service Connected Pension.” This simply means that the benefit is not related to a service-connected injury; rather, it is a pension benefit that may be available due to the Veteran’s service to our country.In addition to the Pension, a person who is housebound or in need of the assistance of another person with activities of daily living may receive additional pay called Housebound Benefits or Aid and Attendance Benefits, which is a supplement to the Pension. The basic eligibility requirements are detailed below:
I. Basic Eligibility Criteria for Pension, Housebound and Aid and Attendance
All of the following criteria must be met before a veteran or widow(er) of a veteran can receive Improved Pension benefits:
- The veteran must have served at least 90 days of active service with at least one day of service during one of the following VA approved Wartime periods.
WWII – December 7, 1941 thru December 31, 1946
Korean War – June 27, 1950 thru January 31, 1955
Vietnam Era – August 5, 1964 thru May 7, 1975 (if serving anywhere)
Vietnam Era – February 28, 1961 thru May 7, 1975 (if in the Country of Vietnam)
Persian Gulf – August 2, 1990 thru the present
- The veteran must have received a discharge that is anything other than dishonorable.
- If the veteran is alive, he must be over the age of 65 OR rated 100% disabled.
- For a widow(er), they must have been married to the Veteran at their time of death and not have remarried after the death.
II. Improved Base Pension Rates
The claimant must meet all the criteria above (exception: Widowed spouses are not required to be over the age of 65). There is no set limit on how much net worth or income a claimant can have, but net worth cannot be excessive. The decision as to whether a claimant’s net worth is excessive depends on the facts of each individual case. The amount of net worth/assets and income a claimant is permitted depends on a number of factors including, but not limited to: the age of the claimant and the amount of un-reimbursed medical expenses incurred by the claimant and the claimant’s spouse.
BASE Pension Income Rates for 2012 the Claimant may be eligible for:
- Veteran with no dependents – $1,021/month; $12,256/year
- Veteran with one dependent – $1,337/month; $16,051/year
- Widow(er) with no dependents – $684/month; $8,219/year
- Healthy Veteran with Ill Spouse – $1,337/month; $16,051/year
III. Housebound Benefits
Housebound Benefits are an enhanced special monthly pension benefit paid in addition to basic pension. A claimant may not receive this addition without first establishing eligibility for basic VA pension. Pension benefits with a Housebound supplement are available to a veteran or widow(er) of a veteran who is determined to be disabled and is essentially confined to the home. The two ways to prove entitlement include:
- A single permanent disability rated as 100% disabling under the VA schedule and confined to the dwelling, or
- A 100% disability with another 60% disability, regardless of whether or not the person is confined to the dwelling.
Notwithstanding in the above two methods of proof requiring some sort of disability, a disability rating is not required for people aged 65 or older.
Pension with Housebound Status Income Rates for 2012 the Claimant may be eligible for:
- Housebound veteran with no dependents – $1,248/month; $14,978/year
- Housebound veteran with one dependent – $1,564/month; $18,773/year
- Housebound widow(er) without dependents – $837/month; $10,046/year
IV. Aid & Attendance (A&A)
Aid and Attendance is an enhanced special monthly pension benefit paid in addition to basic pension. A claimant may not receive this addition without first establishing eligibility for basic VA pension. Pension benefits with an Aid & Attendance supplement are available to a veteran or widow(er) of a veteran who meets at least one of the following conditions:
- Claimant is blind; OR
- Claimant is a patient in a nursing home due to mental or physical incapacity; OR
- Claimant is unable to:
- dress/undress or keep self clean and presentable
- unable to attend to the wants of nature OR
- Claimant requires the aid of another person in order to perform his or her activities of daily living, such as bathing, feeding, dressing, attending to the wants of nature, adjusting prosthetic devices, or protecting himself/herself from the hazards of his/her daily environment; OR
- Claimant is bedridden, in that his/her disability or disabilities requires that he/she remain in bed apart from any prescribed course of convalescence or treatment.
Pension with A&A Status Income Rates for 2012 the Claimant may be eligible for:
- Veteran with no dependents – $1,703/month; $20,447/year
- Veteran with one dependent – $2,019/month; $24,239/year
- Widow(er) with no dependents – $1,094/month; $13,138/year
- Healthy Veteran with Ill Spouse – $1,337/month; $16,051/year
– veteran can get pension only when alive and spouse needs assistance
V. Accreditation by VA
As of June 23, 2008, the VA began REQUIRING that ANYONE who assists a veteran or family member with the preparation, presentation and prosecution of a claim for benefits to be accredited by and through the VA BEFORE they can legally provide assistance. Thus, to protect yourself while going through the VA process, make sure you are using an accredited agent. To check if a person is accredited, you can go to: United States Department of Veterans Affairs Accreditation Search and type in their name for confirmation. (A one-time agent – usually a family member – does not need to be accredited).
There are many estate planning attorneys, CPAs, and even elder care attorneys who can advise you on a lot of issues related to financial and estate planning. But notmany attorneys are accredited with the Veterans Administration, and without that accreditation, they cannot legally provide you with any assistance for veterans benefits.
There are many benefits available to veterans in different circumstances. Benefits are not only for those veterans who received a combat injury, or those who served overseas. All veterans have served this country, regardless of the branch of service, or whether they saw combat, or where they were stationed. And all veterans deserve the full benefits they are entitled to. [Read more…]