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Medicaid Planning Trust

What You Need to Know about a Medicaid Asset Protection Trust (MAPT)

Moving into a nursing home can be expensive, costing you $5,000 to $10,000 a month or more. This expense can quickly wipe out your life savings. Medicaid will pick up the bill for you, if your income and assets are low enough to qualify for Medicaid benefits. The problem is you typically have to be nearly destitute, before you can qualify for Medicaid.

If you put your assets into a Medicaid Asset Protection Trust, however, you might be able to qualify for Medicaid, even if your assets exceed the limit. Here is what you need to know about a Medicaid Asset Protection Trust (MAPT).

Medicaid Income and Asset Limits

Eligibility for Medicaid varies by state. In general, you must have little or no income and few countable assets. Each state also has non-economic requirements, such as age, disability and household size, depending on your circumstances.

Medicaid does not count all of your assets toward the asset limit. For example, if you or your spouse live in your primary house, Medicaid considers the home an exempt asset. The value of that property does not count toward your state’s asset limit. There are limits on the amount of equity that does not count. The limits vary from state to state.

Additional examples of assets that can be exempt, include one car, term life insurance, household furnishings, clothing, wedding and engagement rings and other personal items. Medicaid does not count prepaid funeral and burial plans or life insurance policies with little cash value toward the limit.

Medicaid does count these things toward the asset limit:

  • Cash
  • Bank accounts
  • Investments
  • Vacation homes
  • Retirement accounts not yet in payout status (only in some states)

These are the general guidelines. Your state’s treatment of assets might differ.

How a MAPT Works

When you put your assets into a Medicaid Asset Protection Trust (MAPT), Medicaid does not count those things toward the asset limit. You do not own those items – the trust does. Medicaid does not count an asset that does not belong to you. The trust can protect the assets for distribution one day to your beneficiaries.

Please note that a “Medicaid Asset Protection Trust” can also go by the name of “Medicaid Planning Trust,” “Home Protection Trust,” or “Medicaid Trust.” Make sure that the trust you select is Medicaid-compliant. Most revocable living trusts, family trusts, irrevocable funeral trusts, and qualifying income trusts (QITs, also called Miller trusts) are not Medicaid-compliant. They will not protect your assets, if you want to be eligible for Medicaid to pay for a nursing home.

Essential Aspects of MAPTs

MAPTs are sophisticated estate planning documents. Here are a few of the highlights of these documents:

  • You cannot create a MAPT and immediately apply for Medicaid. You will have to wait at least five years (2.5 years in California) before you apply for Medicaid, after setting up a MAPT. If you apply for Medicaid before the “look back” period expires, you could face harsh financial penalties.
  • You are the grantor of your trust. You state might use a different term, like the trust-maker or settlor. Your spouse cannot be the trustee of your MAPT, but your adult child or another relative can be.
  • The trust must be irrevocable. Once signed, you can never change or cancel the trust. You can never own those assets again. If you create a revocable trust, Medicaid will count all the assets in the trust toward the asset limit, because you still have control over the assets.
  • The trustee must follow the instructions of the trust. No funds of the trust can get used for your benefit.
  • A MAPT protects your assets from Medicaid estate recovery. Without a MAPT, after you die, the state could seek reimbursement from your estate for all the money they paid for your long-term care.
  • While a Miller trust will not protect your assets, it can protect some of your income, if your income exceeds the limit for Medicaid. Used with a MAPT, many people can qualify for Medicaid to help pay for the nursing home, even if their assets and income exceed the eligibility limits.
  • The rules for MAPTs vary from one state to the next.

The regulations are different in every state. You should talk to an elder law attorney in your area to see how your state varies from the general law of this article.

References:

American Council on Aging. “How Medicaid Planning Trusts Protect Assets and Homes from Estate Recovery.” (accessed December 19, 2019) https://www.medicaidplanningassistance.org/asset-protection-trusts/

American Council on Aging. “How to Spend Down Income and/or Assets to Become Medicaid Eligible.” (accessed December 19, 2019) https://www.medicaidplanningassistance.org/medicaid-spend-down/

Suggested Key Terms: Medicaid Asset Protection Trust, MAPT, protecting your assets to qualify for Medicaid

Prof. Jonathan Turley

Great Advice from Prof. Turley – Consider a Private Social Worker

-By Christopher Mays

If you have been following the impeachment proceedings recently you may recognize Professor Jonathan Turley. He testified before the House Judiciary Committee in both the impeachment for President Trump and President Clinton, giving his opinion on the legal technicalities involved in the process. He was also one of my professors in law school, so I occasionally peruse his blog. As it turns out, he has some very good advice when it comes to Elder Law and caring for family: consider hiring a private social worker for aging family members.

The case for a private social worker is made in an article on Professor Turley’s blog authored by Darren Smith (click here for a link to the article on Prof. Turley’s blog). Essentially the case is this. Hospitals, Nursing Facilities and Government Agencies all have their own social workers. While in each case the social worker’s job is to advocate for the patient – there is always the potential that a social worker’s ability to advocate for a patient can be influenced by the interests of their employer.

As an attorney who has helped clients with guardianship of older family members and served as a guardian for seniors – I cannot say enough good things about what social workers do. Much of my work has been with the Regional Older Adult Facilities Mental Health Support Team (RAFT) with Arlington County. RAFT social workers do a number of things to help improve the living situation for seniors, including:

  • Assessing the mental health, behavioral, and care needs of older adults.
  • Providing educational and therapeutic support to both families and patients.
  • Training staff at care facilities about the specialized needs of seniors with mental health issues
  • Medication monitoring and evaluation

Personally, I have had a number of cases where older adults have been: unable to find placements because of mental health or behavior issues; at risk from poorly managed behaviors (wandering, etc.); or faced with other significant problems. In every case where I have had social workers, like the ones from the RAFT team, assist clients – we have been able to quickly transition seniors from unstable and potentially dangerous situations to well managed, comfortable and compassionate living arrangements.

When faced with family members in difficult situations because of aging, probably the most common reaction is “What do I do?” Social workers excel at helping people answer that question and come up with a plan for moving forward.

 

What is Conservatorship?

What Should I Know About Conservatorships?

In Virginia a conservatorship is when a court grants a ‘conservator’ the authority to manage the finances of another. However different states may use the terms “conservatorship” and “guardianship” in slightly different ways. The conservator has legal authority over certain aspects of the ward’s life, says KAKE.com’s recent article, “What is a Conservatorship and How Does It Work?” A conservator has total authority over the relevant aspects of their ward’s life. A conservatorship is granted when the person in question no longer has the capacity to make decisions on her own behalf. These cases are almost always dealing with judgments based on mental incapacity.

The general test for a conservatorship is: (i) whether the person is capable of knowing and understanding her actions; (ii) whether she is capable of providing for her basic needs, such as food, sanitation, and shelter; and (iii) whether she could be considered a danger to herself.

Although the specifics of a conservatorship hearing vary across jurisdictions, a conservatorship must be granted by an officer or appointee of the court. Medical paperwork is typically required before a judge will grant a conservatorship. However, the potential ward must have an opportunity to be heard by the court and to present her own case, as to why a conservatorship shouldn’t be granted. In addition, a person has the right to challenge a conservatorship in court, if she disagrees with the outcome, because a conservatorship means taking many aspects of freedom from an adult. This is not taken lightly by the courts.

There are several types of conservatorships. The most common are financial, physical, full and limited. A conservatorship is built around the needs of the ward, and the judge will typically consult with medical staff and social workers. A conservatorship is based on what the court believes will best keep the ward healthy and safe.

To make certain that a conservator doesn’t use the ward’s assets for his own gain, conservators must report to the court that appointed them. They’re required to keep records of every decision they make on behalf of the ward and must periodically present this information to the court. However, depending on the state, larger or more permanent decisions may require a court order, such as the decision to place the ward in an assisted-living facility.

Conservators are entitled to receive pay. However, it’s not uncommon for those who hold conservatorships over friends or family members to decline payment.

Conservatorships are controlled by state laws. Consult with an elder law attorney about the details how it might apply to your situation.

Reference: KAKE.com (December 11, 2019) “What is a Conservatorship and How Does It Work?”

Suggested Key Terms: Elder Law Attorney, Conservatorship, Guardianship, Ward, Incapacity

Nursing Home

Nursing Home Placement – Know Your Rights

Whether you choose to reside in a nursing home, or circumstances require that you make the move, it’s a fact that you may give up a certain level of autonomy. This can lead to lapses in care. Understanding your rights as a nursing home resident is paramount to ensure that you receive the care you need and deserve. This article will walk you through those rights and provide you with resources to also ensure that you are not taken advantage of.

Nursing Home Resident’s Rights

In 1987, Congress enacted the Nursing Home Reform Law. In a nutshell, the law is designed to ensure that nursing home residents are provided whatever they need to function at the highest possible level. Specifically, the law provides the following rights:

  1. Unnecessary Physical and Chemical Restraints. Unless authorized by a physician, and only for a limited time, nursing home facilities may not restrain residents using sedatives or other chemical restraints, or seatbelts, gloves and other physical restraints.
  2. Contact with Physician. Nursing home facilities must provide residents with the contact information for their primary care physician and allow them to participate in care planning meetings.
  3. Communication Regarding Health and Treatment. If the resident’s health deteriorates, or if a physician deems a change in treatment necessary, the facility must inform the resident, the primary care physician and the resident’s legal representative or designated family member.
  4. Right to Medical Records. If a resident requests their medical records, the facility must provide them within one business day and at a cost that is reasonable within the community. In addition, the facility must explain how to access the records and/or transfer authority to another person.
  5. Notification of Rights. Nursing home facilities must provide residents with a written copy of:
    1. their legal rights
    2. state laws about advance directives, living wills and durable power of attorney for healthcare
    3. the nursing home’s policies on carrying out the directives.
  6. Notification of Services. Nursing home facilities must provide residents with a list of services (and fees) provided by the facility at the time of admission and during their stay. Any services or rates not disclosed in advance, may not be charged to the resident.
  7. Right to Privacy. Nursing home residents have the right to privacy in all matters, including:
    1. Visiting family and friends
    2. Personal needs
    3. Making phone calls
    4. Sending mail
  8. Right to Assemble. Nursing home residents must be able to share a room with their spouse, gather with other residents without staff present, and to meet with a local or state ombudsman, law enforcement, or other official representatives without staff interference or presence.
  9. Right to Leave. Nursing home residents may leave the facility for any reason and may belong to a church or other social group.
  10. Right to Manage Finances. Nursing home residents have the right to manage their own finances and must not be required to deposit funds with the nursing home.
  11. Individual Preferences. Nursing home residents have the right to choose when to get up or go to sleep, when they have snacks, what they eat, what they wear and how they spend their time. The nursing home must offer a variety of choices at main meals to accommodate different tastes. Nursing home residents also have the right to administer their own medications and go to the bathroom, whenever they want.
  12. Personal Possessions. Nursing home residents have the right to bring any personal possessions to the nursing home, such as clothing, jewelry and furnishings. Staff must assist in safeguarding these items and assist in locating them, should they become lost.
  13. Nursing home staff must treat residents with respect at all times. Residents are expected to be treated as adults.
  14. Changing Locations. Before a resident can be moved to a different room or facility, they must be notified and afforded time to appeal. The facility must show that the move is in the resident’s best interest or is necessary to the health of other residents.
  15. Freedom from Interference. All nursing home residents have the right to exercise their rights without interference, coercion or backlash for exercising their rights. Nursing home staff are expected to assist residents in raising concerns and helping to resolve concerns.

This is an overview of nursing home resident’s rights. For a full list of nursing home resident rights, check out the ombudsman’s list.

For more information on nursing home resident’s rights or to report an incident and receive help, visit the long term care ombudsman’s office.

Resources:

ElderLawAnswers. “The Rights of Nursing Home Residents” (Accessed November 29, 2019) https://www.elderlawanswers.com/the-rights-of-nursing-home-residents-12149

National Consumer Voice. “Nursing Home Resident’s Rights.” (Accessed November 29, 2019)  https://ltcombudsman.org/uploads/files/support/Module-2.pdf

National Consumer Voice.National Ombudsman Reporting System” (Accessed November 29, 2019) https://ltcombudsman.org/omb_support/nors

Suggested keywords: Nursing Home Resident’s Rights, rights as a nursing home resident

Caring for Aging Parents

Caring for Your Aging Parents – Top 5 Questions and Answers

Caring for aging parents can be stressful. It’s a new experience, and one that you’re not always prepared for. The good news is that there are plenty of resources out there to help you navigate this new chapter in your life. To help get the process started, we’ve curated the top 5 questions that people have about caring for an aging loved one and have provided answers to those burning questions.

Question #1 – How do I ensure their legal affairs are in order?

No one likes to think about, much less talk, about the end of their lives. Unfortunately, burying your head in the sand can lead to costly and frustrating situations, once your loved one has passed. Of course, coming out and asking if your parents have an estate-plan in place may not be the most tactful approach. Consider these icebreakers to get a conversation started:

  • “Bob and I just met with our estate planning attorney last week to update our will. Do you and dad have an estate plan in place?”
  • “I was so troubled to hear that Uncle Harry passed and left Aunt Hilary with such a financial mess. Do you think you and mom have your affairs, so that doesn’t happen to one of you?”
  • “We just sent Jenny off to college and our attorney recommended a HIPAA release and power of attorney, just in case something happens to her and we need to step in. Do you have a power of attorney?”

Question #2 – How can I gain access to their health information?

It’s not uncommon for parents to withhold healthcare information from their children. This is often because they don’t want to worry their adult children or grandchildren. It may also be because they don’t want to admit that they have a serious healthcare issue. Sometimes, this lack of disclosure can lead to lapses in care.

If you believe you need access to your parents’ medical records, you have a few options.

  • Go to the doctor with your parents. Ask questions.
  • Ask your parents to make you their personal representative for healthcare matters.
  • Ask your parents to request in writing that medical records be sent to you.

If your parent is incapacitated and unable to give consent, the healthcare provider may share personal healthcare information, if they believe that disclosure is in your parent’s best interest.

Question #3 – Is it time to move them to a care home?

When the family home becomes unsafe for one or both of your aging parents, it may be time to consider some sort of alternative arrangement. Nursing homes are not the only alternatives, however. You might consider an incremental approach that includes things like:

  • In-home Care
  • Senior Daycare
  • Assisted Living Communities
  • Additional Dwelling Units

Discuss these options with your parents and other family members to determine what is best for the whole family.

Question #4 – Should they be driving?

Driving is one of the most important activities to one’s independence. Losing the ability to drive is naturally one of aging people’s top fears. Therefore, of course, you want to let them drive as long as it is safe for them to do so. Once reflexes begin to slow, flexibility declines, hearing levels decrease and peripheral vision narrows, it’s time to start assessing the safety of their driving.

How do you assess their abilities? Take a drive with them. See how they do with highways, traffic, driving at night and during inclement weather. It may not be that they need to give up driving all at once. Perhaps night driving becomes a problem at first. If that’s the case, ask them to agree to let you drive at night.

Question #5 – Am I partnering—or parenting my parents?

Often, when adult children are faced with caring for their parents, the go-to position is one of “parent.” It may be one you’re naturally disposed to, because you have children of your own. It could also be that you’re simply mirroring the role your parents played with you. While natural, this may not be the best approach, because your parents may perceive this new scenario as you taking their independence from them.

Instead of dictating terms and telling them how it’s going to be, reframe your roles from parent-child to partnership. Just because they may be lower on energy or losing memory function, doesn’t mean they can’t make decisions. Talk to them like the adults they are, making sure that each of you is maintaining boundaries and autonomy. You may find them more receptive to your help, which will make things much easier in the long run.

Resources:

The Healthy. “8 Questions You Must Ask to Keep Your Aging Parents Safe and Healthy” (Accessed November 29, 2019) https://www.thehealthy.com/healthcare/caregiving/questions-to-ask-your-aging-parents/

HHS.gov. “Under HIPAA, when can a family member of an individual access the individual’s PHI from a health care provider or health plan?” (Accessed November 29, 2019) https://www.hhs.gov/hipaa/for-professionals/faq/2069/under-hipaa-when-can-a-family-member/index.html

Suggested keywords: caring for aging parents, questions for adult children of aging parents

Silver Tsunami

Careful–the Silver Tsunami is Coming!

Approximately one in three homes in the U.S. is owned by someone who is 60 and older. As these millions of boomers decide it’s time to sell their homes and move to another location or to a retirement community, that will have an impact on housing markets, says the article from Market Watch “These housing markets will feel the biggest impact from the ‘Silver Tsunami.’”

In the ten years between 2007-2017, around 730,000 homes that had been owned by seniors went on the market every year. That number is expected to grow enormously over the next few decades. A news analysis from Zillow says that as many as 920,000 homes will go on the market between 2017-2027.  In the ten years after that, the figure may go as high as 1.17 million homes per year.

In total, says Zillow, almost a third of currently owner-occupied homes, around 20 million properties, will go on sale as the direct result of a boomers dying or deciding to move to a smaller home or retirement facility.

The wave won’t hit all at once, and it won’t strike all markets equally.

The biggest impact is expected to be in the Tampa-St. Petersburg-Clearwater metropolitan area in Florida. The Tucson, Arizona area is next in line, with the Miami-Ft. Lauderdale-Port Saint Lucie and Orlando metro areas following.

At the far end of the spectrum, Salt Lake City, Utah, is expected to see the smallest impact from the Silver Tsunami. Less than 20% of homes there are expected to go up for sale, because of being owned by aging boomers.

A few other cities are expected to escape this trend with little impact. They include Austin, Houston, and Dallas, all in Texas.

In other cities, there are micro-neighborhoods that will feel the impact within cities. For instance, in greater Phoenix, all will be well. However, in the towns of El Mirage or Sun City, nearly two-thirds of all homes will be on the market, as they are mainly retirement communities.

Those who are planning to relocate for retirement may want to keep the Silver Tsunami in mind, if their retirement finances depend upon the value of their homes.

Reference: Market Watch (December 3, 2019) “These housing markets will feel the biggest impact from the ‘Silver Tsunami’”

Suggested Key Terms: Silver Tsunami, Retirement Communities, Home Values, Boomers

Stethoscope chestpiece on a calculator

The Medicaid Medically Needy “Spend-Down Program” – What You Need to Know

If you’ve been denied Medicaid benefits because you have too many assets or too high an income, don’t give up. There are available programs that may enable you to qualify for Medicaid benefits, despite this setback. Each state may offer different programs, and the Affordable Care Act (ACA) has added new ways to obtain coverage. This article addresses the “spend down program” offered in every state.

Medicaid Spend-Down Program – The Basics

To qualify for Medicaid benefits, your income and assets may not exceed a certain amount set by law. If these items do exceed the legal limits, you may still qualify after a spend-down period. The medically needy spend-down program helps individuals over the age of 65, and some younger individuals with disabilities. To be eligible for this program, you must not be receiving public financial assistance.

Exempt & Non-Exempt Assets

It is not necessary to sell off everything you own to qualify for the spend-down program. You may keep a certain amount of “exempt assets,” such as the home you live in, your car (used for transportation), household furniture, clothes, jewelry and other personal items. None of these assets affect your eligibility, regardless of their value (unless you have high equity, say $1 million in an asset, in which case you may need to spend that down).

Non-exempt assets, on the other hand, do affect your eligibility for the spend-down program. These assets include bank accounts, stocks, investments, and cash over $2,000 for an individual or $3,000 for a married couple.

Amount of Income You Can Have to Apply

It does not matter how much income you have when you apply. The more income you have, though, the more medical expenses you must incur before your coverage can start. The way you spend down this income is by spending it on medical expenses, until you reach the income requirements for Medicaid. Interestingly, you just need to incur medical costs. You don’t have to actually pay them.

In addition, you can pay down accrued debt to spend down your income. Therefore, paying down credit card bills, car payments, or mortgage debt can count towards your spend down. Another tactic you can use, is to pay excess monthly amounts on old medical bills.

Seeking Professional Assistance

Medicaid programs are different in each state, and the laws change frequently. If done wrong, you could end up incurring penalties instead of obtaining benefits. It may be a good idea to enlist the help of a Medicaid specialist or elder law attorney to walk you through the process in a way that will avoid these types of penalties.

Resources:

National Council on Aging. “Benefits Checkup” (Accessed November 28, 2019) https://www.benefitscheckup.org/fact-sheets/factsheet_medicaid_la_medicaid_spend_down/#/

U.S. News and World Report. “How a Medicaid Spend Down Works.” (Accessed 28, 2019) https://money.usnews.com/money/retirement/baby-boomers/articles/how-a-medicaid-spend-down-works

Suggested Key Terms: Medicaid spend down, medically needy spend down, Medicaid eligibility

Family for Christmas and Holidays

Holiday Gatherings Often Reveal Changes in Aging Family Members

A look in the refrigerator finds expired foods and an elderly relative is asking the same questions repeatedly. The same person who would never let you walk into the house with your shoes on now, is living in a mess. The children agree, Mom or Dad can’t live on their own anymore. It’s time to look into other options.

One of the biggest questions, according to the Cherokee Tribune & Ledger-News’ article is “How to pay for long-term care.”

The first question involves the types of facilities. There are many different options but the distinctions between them are often misunderstood. Assisted living facilities provide lodging, meals, assistance with eating, bathing, toileting, dressing, medication management and transportation. However, a skilled nursing facility adds more comprehensive health care services. There’s also the personal care home, which provides assisted-living type accommodations, but on a smaller scale.

The next question is how to pay for the residential care of an elderly family. This weighs heavily on the family. That elderly person is often the one who did the caregiving for so many years. The reversal of roles can also be emotionally difficult.

There are a few different ways people pay for care for an elderly family member.

Long-term care insurance, or LTC insurance. Few elderly people have the insurance to cover their residential facility stay, but some do. Ask if such a policy exists, or go through the piles of paperwork to see if there is such a policy. It will be worth the search.

Veteran’s benefits. If your loved one or their spouse served during certain times of war, is over 65 or is disabled and received an honorable discharge, he or she may be entitled to certain programs that pay for care through the Department of Veterans Affairs.

Private pay. If your loved one has financial accounts or other assets, they may need to pay the cost of their residential facility from these assets. If they don’t have assets, the family may wish to contribute to their care.

Another route is to apply for Medicaid. An elder law attorney in their state of residence will be able to help the individual and their family navigate the Medicaid application, explore if there are any options to preserving assets like the family home, and help with the necessary legal strategy and documents that need to be prepared.

Meet with an elder law estate planning attorney to learn what the steps are to help your elderly loved one enjoy their quality of life, as they move into this next phase of their life.

Reference: Cherokee Tribune & Ledger-News (November 30, 2019) “How to pay for longterm care.”

Suggested Key Terms: Assisted Living Facility, Skilled Nursing Home, Veterans Benefits, Medicaid, Personal Home Care

Elder Law DIY?

Can You Tackle Elder Law on Your Own?

What usually happens when people do their own estate planning or work on elder law issues, without a lawyer who has years of practice? They may not incur the costs on the front end, but the costs, in financial and emotional terms, often arrive just when the individual or their family is most vulnerable. That message comes through loud and clear in the article “Do-it-yourself elder law estate planning can be risky” from a recent article in the Times Herald-Record.

Let’s clarify the two different areas:

  • Estate planning is about leaving assets to heirs with a minimum of court costs, legal fees and avoiding will contests.
  • Elder law is concerned with protecting assets from the cost of long-term care and empowering people who will be able to make legal, financial and medical decisions on your behalf, if you become incapacitated.

Two of the most important documents in an elder law estate plan are the Powers of Attorney (POA) and health care proxies. If these forms are not prepared correctly, problems will ensue. In some states, like New York, the POA form is long and complicated. Banks and financial institutions will refuse to recognize the form, if they are not completed correctly.

There will be similar issues to a do-it-yourself health care proxy. Here’s just one example of the many things that can go wrong: an agent may not make decisions about withholding certain extreme life support measures, even if they are in possession of a valid health care proxy. There needs to be a living will from the individual that explicitly states their wishes regarding withholding heroic means and/or artificial measures. Without the proper document, the person could remain on life support for months or years, even if this was not their wish.

A do-it-yourself approach leaves much to chance. As a result, the potential for problems is enormous. A far better solution that spares spouses and loved ones, is to work with an experienced estate planning lawyer. Can you put a price on peace of mind?

Reference: Times Herald-Record (Nov. 23, 2019) “Do-it-yourself elder law estate planning can be risky”

Suggested Key Terms: Estate Planning Lawyer, Elder Law, Power of Attorney, Health Care Proxy, Living Will, Statutory Gifts Rider, Nursing Home, Life Support

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