Long-term care planning

Thursday, July 22, 2021

Montana Supreme Court affirms that assets held in an irrevocable trust may be exempt for Medicaid purposes

Long-Term Care Costs Continue to Rise 

As we all know, long-term care costs continue to rise. We previously discussed how long-term care insurance may be able to make long-term care more affordable. We have also discussed the benefits of using an irrevocable asset protection trust for long-term care planning. 

The use of irrevocable trusts in Montana for long-term planning came into question recently in the Estate of Marilyn Scheidecker v. Montana Department of Public Health and Human Services case when an Administrative Law Judge and District Court in Montana upheld the denial of Medicaid eligibility for a woman who along with her sister established an irrevocable trust and transferred assets into the trust.
Read more . . .

Thursday, January 31, 2019

What are your options to pay for long-term care?

There are several common approaches for dealing with future long-term care expenses:

(1) do nothing; 
(2) assume Medicare or Medicaid will pay for it; or
(3) Insurance or other benefits to offset the costs.

For risk of being the bearer of bad news, the first two options should not be your primary plan.  If you do nothing, you are only prolonging the inevitable.  About 70% of all individuals over age 70 will need some form of long-term care. 

Medicare does not cover long-term care costs unless it is considered rehabilitation for a limited time post-hospital stay.
Read more . . .

Friday, July 27, 2018

The Veterans Asset Protection Trust

The Veterans Asset Protection Trust can be an applicable and beneficial option for many of our elderly clients who are looking for long-term planning options. The Veterans Asset Protection Trust is an intentionally defective grantor trust and can be considered as an option for clients who are wartime Veterans or the surviving spouses of a wartime Veteran. This trust is designed to meet the eligibility requirements from the Veterans Administration (VA) of a complete gift or complete relinquishment. 

When it comes to assets, the most significant for a Veteran is often his or her residence. As long as a Veteran retains that home, it does not count as part of his or her net worth for VA-eligibility purposes and instead qualifies as a “non-countable resource.

Read more . . .

Friday, May 4, 2018

The benefits of using an irrevocable asset protection trust for long-term care planning

Last week we discussed the continuing rise in long-term care costs and how long-term care insurance may be able to help make long-term care more affordable.  This week we’ll focus on the estate planning strategy that employs an irrevocable asset protection trust.

An irrevocable asset protection trust can be an effective estate planning tool for long-term care. The trust can be set up in conjunction with or as an alternative to long-term care insurance, allowing individuals or married couples to transfer some assets into the trust where the assets can be held and managed by the trustee throughout their lifetime. The remaining assets can then be transferred to the heirs of the trust at the time of their death.

Read more . . .

Friday, April 27, 2018

The cost of long-term care continues to rise

Many people are shocked when they learn about the high cost of long-term care. Unfortunately, the cost will only get more expensive over time. A 2016 report by PricewaterhouseCoopers estimates that long-term care costs will more than double by 2047.

Read more . . .

Friday, August 23, 2013

Mom's generosity + no planning = bad result

Mom has been helping her kids all their lives.  She isn't wealthy by any means, but she has enjoyed being generous with them.

And one of the kids really has needed help.  Her daughter has a drinking problem and has not had a real job in years.  So, Mom has paid her rent, bought her groceries and gas.  She's kept her daughter afloat.  Ultimately, not a good way to make the daughter independent, but Mom felt she had to help.

Now, though, there is a problem.  Mom's health is failing, she can't live at home anymore, and her savings are nearly depleted.  She doesn't want to move in with her kids. They may not be able to take care of her anyway, since they have their own jobs.   She probably needs to move to a nursing home.  But Mom's monthly income is way less than the $7,000-$8,000 that a nursing home will cost.  After a short while in a nursing home she'll be broke.  What happens then?

We in the US have a system to help people like Mom.  It's Medicaid.  The problem is that Mom won't be eligible for Medicaid when she needs it because of the gifts she made to her daughter.  There will be a penalty period based on how much she gave her daughter during which she can't receive benefits.

So, what are Mom's options?

The daughter whom Mom has been helping of course has no money to help.  The other kids can perhaps pay for Mom's nursing home (although none of them is wealthy).  And how will they feel about having to pay because of the gifts to their sister?  Doesn't sound like the makings for good family relations.  Or Mom can move in with one of the kids - if they can take care of her.

What a sad situation for Mom and her family.

I think you can see where I'm going with this.

This did not need to happen.  Don't let it happen to your family!  You have options.  

Yes, if a family has not done any long-term care planning, making gifts to family members may disqualify mom and dad from getting help with long-term care expenses when they really need it.  

However, with proper planning, mom and dad can make gifts to family members and still get the help they need when they need it - without having to exhaust all their estate.  

But only if you plan ahead.

Wednesday, June 5, 2013

Estate planning is not long-term care planning.

Every lawyer says they do "estate planning."  That usually means powers of attorney and simple wills (without tax planning).  There's much more to estate planning than that.

But there is also a serious concern that many people think estate planning addresses when it doesn't.  Castastrophic long-term care expenses.  Losing everything to a nursing home.  

Long-term care planning allows a family to protect assets if mom or dad incurs horrendous medical or nursing home expenses.  People do long-term care planning so that, if dad ends up in a nursing home, mom doesn't have to eat cat food and there's at least something to pass on to the kids when mom and dad are gone.

Every family should do estate planning.  Not every family needs to do long-term care planning.  

Who is it right for?  As we lawyers love to say: "It depends."  How big is the family's estate?  How much income do mom and dad have?  What health issues do they face?  Is there a history of dementia in the family?  

Most importantly, are mom and dad worrying about long-term care expenses?  If they are, then that's enough reason to at least explore the options.  Mom and dad don't have to just sit back, stew about the problem and then spend their entire live savings on nursing home expenses. 

Because there are options.  And simple wills and powers of attorney aren't going to do the trick.

Monday, March 28, 2011

We now provide long-term care planning

-Advertising Material - We are launching a new area of practice: long-term care planning.  Because I want to tell you about it, I need to identify this note as "advertising material" according to the Ethical Rules of the State Bar. 

Here's what I want to talk about:

When families are confronted with situations where Dad needs nursing home care, they want Dad to be taken care of.  And they're more than willing to pay their fair share.  But they don't want to lose virtually everything that Mom and Dad worked so hard to accumulate.  They want Mom to be able to live comfortably, and they'd like something - at least - to be left for the kids. 

Long-term care planning can help families faced with these problems.
Up till now, when our estate planning clients have mentioned a fear of losing everything if they end up in a nursing home, we have been able to explain the rules involving long-term care and programs such as Medicaid.  But we have been frustrated at not being able to offer more solutions. 
Last summer we decided to remedy this situation by taking our learning about this area of the law to a higher level and making it an integral part of our practice.
To help us provide the best service possible, we have joined an organized dedicated to helping families faced with daunting medical and nursing bills.  It's called ElderCounsel.  Its members include approximately 300 law firms around the country who focus on long term care planning.  ElderCounsel hosts training for its members that is first-class.  Jon and I have attended two of their intensive workshops, and Laura will attend her first training in June.  ElderCounsel also allows us to pick the brains of specialists in the area.  And the organization has tremendous legal research and document resources.  So, in a relatively short period of time we've been able to launch this new area of our practice.
We are excited to be able to offer our clients this service.  We look forward to telling you more about it in the coming months.
Advertising Material

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