Category Archives: Look-Back Period

Ohio Medicaid changes “Aged Blind Disabled” Eligibility – Penalty Recovery through Annuities

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This week’s blog continues the discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled program coming in 2016-2017.  The initial installment (April 28, 2016) provided an overview of the transition from the old system (following section 209(b) of the federal Medicaid law) to the new system (that will follow section 1634 of the federal Medicaid law.)  The May 5, 2016 installment discussed the new income rules that will go into effect with the new eligibility system.  The May 12, 2016 installment discussed setting up a Qualified Income Trust (aka Miller Trust) that will be necessary for people who need ABD Medicaid to help pay for long term care.  The June 16, 2016 installment discussed the Ohio rules that describe how to use the Miller Trust each month.  The June 23, 2016installment discussed the difficulty in understanding the need for a Miller Trust.  The July 1, 2016 installment discussed the need to empty the Miller Trust account every month.  The July 7, 2016 installment discussed the need to balance the Miller Trust with the desire to have health insurance.  The July 15, 2016 installment discussed the confusing deposit rules for Miller Trusts.  The July 21, 2016 installment discussed the changes that the Ohio Department of Medicaid made to the form Miller Trust document.  The July 28, 2016 installment discussed whether income is supposed to go directly into the Miller Trust.  The August 4, 2016 installment discussed Medicaid’s insistence that the transfers (or deposits) into the Miller Trust account be automatic.  The August 11, 2016 installment discussed money that doesn’t actually reach the Medicaid-recipient that, nonetheless, counts as “income” for purposes of using a Miller Trust.  The August 18, 2016 installment discussed  the appearance that a person on long term care Medicaid has an increase in income when he/she stops paying Medicare premiums.  The August 25, 2016 installment discussed the impact of tax withholding on certain income sources and the difficulty that the tax withholding creates for the Miller Trust.  The September 2, 2016 installment discussed the limit placed on monthly costs of the Miller Trust.  The September 9, 2016 installment discussed how Ohio’s Medicaid rules appear to count income tax refunds twice.  The September 15, 2016 installment discussed the Ohio Department of Medicaid’s change in policy regarding real estate (other than the residence.)  The September 22, 2016 installment discussed keeping the house with an intent to return to home.  The September 29, 2016 installment discussed keeping the house while a dependent family member lives there.   The October 6, 2016 installment discussed the home that is co-owned by someone else (other than the spouse.)  The October 27, 2015 installment discussed real property that is “essential for self-support.”  The November 10, 2017 installment discussed the retirement funds belonging to the spouse who does not seek Medicaid’s help with long term care costs.  The November 17, 2016 installment discussed the 2016 changes in how Ohio Medicaid will allow applicants to give away some of their assets cover the resulting penalty period through a return of part of the assets.  The December 1, 2016 installment discussed Ohio Medicaid’s new prohibition on using promissory notes to recover from an applicant giving away assets.   The December 8, 2016 installment discussed the possibility of using a Special Needs Trust to recover from assets given away creating a Medicaid penalty period.  Today’s installment will discuss the use of short-term annuities to recover from a long term care Medicaid penalty period that results from giving away assets.

Note:  What I am calling “assets” Medicaid calls “resources.”  In Medicaid’s terminology, “assets” includes both “resources” and “income.”  Because most of the public thinks of “resources” as human resources or natural resources, and thinks of money in the bank as “assets,” I will use the term “assets” in this installment to refer to money in the bank and other similar things of value (like real estate, life insurance, etc.) that may be included in the applicant’s life savings.

Generally, when an applicant for Medicaid for long term care services gives away something of value (aka “assets,”) Medicaid will not pay for services for the amount of time that the given-away assets would have covered.  This “penalty” is found within the “transfer of assets” rule in Medicaid’s regulations.

Despite the penalty, some Medicaid applicants wish to give away some of their assets.  Usually, the applicants wish to give assets to their children.  The giving of these assets to the applicant’s children often gives the applicants a great deal of emotional relief because it allows some of their money (the results of their working lives) to outlive them.  Most parents want to leave something to their children and grandchildren.  Finding a way to allow these applicants to give some of their assets is what most elder law attorneys try to do.

The trick is finding a way to cover the applicant’s long term care costs during the time that Medicaid will not (i.e., during the “penalty period” aka the “Restricted Medicaid Coverage Period.”)  There used to be 4 different ways to cover such a penalty period.  During 2016, Ohio Medicaid changed the rules on covering this penalty period.  Today’s installment will discuss the use of short-term annuities to cover a penalty period in long term care Medicaid benefits.

Medicaid rules allow a person who gave away assets to use an annuity to cover his/her long term care costs during the associated penalty period.  The annuities must meet a number of criteria:
– The annuity remainder beneficiary must be the state of Ohio.  (Ohio may be named after the spouse or a dependent child.);
– The annuity must be Irrevocable and non-assignable;
– The annuity must be “actuarially sound” by paying out over a time period equal to or shorter than the annuitant’s life expectancy as determined by the Social Security Administration (usually found via a certain online calculator); and
– The annuity must pay out in equal monthly payments with no anticipated lump sum (except, potentially, to a remainder beneficiary.)
An annuity that meets these requirements is often called a Medicaid-Compliant Annuity.

Satisfying these requirements is relatively easy. They can all be set at the time of the purchase of the annuity.  The trickiest part is determining the monthly payment and the number of monthly payments from the annuity. The annuity payments should be large enough to almost cover the monthly difference between the client’s monthly income and monthly costs.  The number of months should be long enough to cover the penalty period.

Short term annuities are available (to my knowledge) from two sources, Krause Financial Services (MedicaidAnnuity.com) and Safe Harbor Annuity (SafeHarborAnnuity.com.) I have used Krause for such annuities. I became aware of Safe Harbor’s participation in this market in August 2016 and have not yet used Safe Harbor.

Until recently, Cuyahoga County’s Medicaid office had espoused the position that “actuarially sound” meant that the annuity must pay out for the ENTIRE life expectancy of the annuitant rather than for a period of time equal or less than the annuitant’s life expectancy. This position posited that any designed payout shorter than the life expectancy set forth in the Social Security tables referenced in the rule made the purchase of the annuity an improper transfer. (I do not know whether any other counties or individual caseworkers did so.)  Two appeals of this position ruled against the county’s policy.  Then, in November 2016, Cuyahoga County announced that it would accept annuities that were as long as or shorter than the person’s life expectancy.

Ohio Medicaid changes “Aged Blind Disabled” Eligibility – Penalty Recovery through a Special Needs Trust

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This week’s blog continues the discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled program coming in 2016-2017.  The initial installment (April 28, 2016) provided an overview of the transition from the old system (following section 209(b) of the federal Medicaid law) to the new system (that will follow section 1634 of the federal Medicaid law.)  The May 5, 2016 installment discussed the new income rules that will go into effect with the new eligibility system.  The May 12, 2016 installment discussed setting up a Qualified Income Trust (aka Miller Trust) that will be necessary for people who need ABD Medicaid to help pay for long term care.  The June 16, 2016 installment discussed the Ohio rules that describe how to use the Miller Trust each month.  The June 23, 2016installment discussed the difficulty in understanding the need for a Miller Trust.  The July 1, 2016 installment discussed the need to empty the Miller Trust account every month.  The July 7, 2016 installment discussed the need to balance the Miller Trust with the desire to have health insurance.  The July 15, 2016 installment discussed the confusing deposit rules for Miller Trusts.  The July 21, 2016 installment discussed the changes that the Ohio Department of Medicaid made to the form Miller Trust document.  The July 28, 2016 installment discussed whether income is supposed to go directly into the Miller Trust.  The August 4, 2016 installment discussed Medicaid’s insistence that the transfers (or deposits) into the Miller Trust account be automatic.  The August 11, 2016 installment discussed money that doesn’t actually reach the Medicaid-recipient that, nonetheless, counts as “income” for purposes of using a Miller Trust.  The August 18, 2016 installment discussed  the appearance that a person on long term care Medicaid has an increase in income when he/she stops paying Medicare premiums.  The August 25, 2016 installment discussed the impact of tax withholding on certain income sources and the difficulty that the tax withholding creates for the Miller Trust.  The September 2, 2016 installment discussed the limit placed on monthly costs of the Miller Trust.  The September 9, 2016 installment discussed how Ohio’s Medicaid rules appear to count income tax refunds twice.  The September 15, 2016 installment discussed the Ohio Department of Medicaid’s change in policy regarding real estate (other than the residence.)  The September 22, 2016 installment discussed keeping the house with an intent to return to home.  The September 29, 2016 installment discussed keeping the house while a dependent family member lives there.   The October 6, 2016 installment discussed the home that is co-owned by someone else (other than the spouse.)  The October 27, 2015 installment discussed real property that is “essential for self-support.”  The November 10, 2017 installment discussed the retirement funds belonging to the spouse who does not seek Medicaid’s help with long term care costs.  The November 17, 2016 installment discussed the 2016 changes in how Ohio Medicaid will allow applicants to give away some of their assets cover the resulting penalty period through a return of part of the assets.  The December 1, 2016 installment discussed Ohio Medicaid’s new prohibition on using promissory notes to recover from an applicant giving away assets.  Today’s installment will discuss the possibility of using a Special Needs Trust to recover from assets given away creating a Medicaid penalty period.

Note:  What I am calling “assets” Medicaid calls “resources.”  In Medicaid’s terminology, “assets” includes both “resources” and “income.”  Because most of the public thinks of “resources” as human resources or natural resources, and thinks of money in the bank as “assets,” I will use the term “assets” in this installment to refer to money in the bank and other similar things of value (like real estate, life insurance, etc.) that may be included in the applicant’s life savings.

Generally, when an applicant for Medicaid for long term care services gives away something of value (aka “assets,”) Medicaid will not pay for services for the amount of time that the given-away assets would have covered.  This “penalty” is found within the “transfer of assets” rule in Medicaid’s regulations.

Despite the penalty, some Medicaid applicants wish to give away some of their assets.  Usually, the applicants wish to give assets to their children.  The giving of these assets to the applicant’s children often gives the applicants a great deal of emotional relief because it allows some of their money (the results of their working lives) to outlive them.  Most parents want to leave something to their children and grandchildren.  Finding a way to allow these applicants to give some of their assets is what most elder law attorneys try to do.

The trick is finding a way to cover the applicant’s long term care costs during the time that Medicaid will not (i.e., during the “penalty period” aka the “Restricted Medicaid Coverage Period.”)  There used to be 4 different ways to cover such a penalty period.  During 2016, Ohio Medicaid changed the rules on covering this penalty period.  Today’s installment will discuss the use of a Special Needs Trust to cover a penalty period in long term care Medicaid benefits.

Prior installments have introduced the Special Needs Trust.  The April 2, 2015 installment discussed Special Needs Trusts as part of the series on qualifying for Supplemental Security Income (SSI) and Medicaid.  The April 9, 2015 installment introduced the Pooled Trusts, a Special Needs Trust for a number of people simultaneously, also as part of the series on qualifying for SSI and Medicaid.  Either of these kinds of trusts, a stand-alone Special Needs Trust and a Pooled Trust, are possible vehicles for helping to cover a penalty period.

Special Needs Trusts can be useful for covering a penalty period because a deposit into a Special Needs Trust is not an “improper transfer” triggering a penalty period.  Likewise, the contents of a Special Needs Trusts do not count as “resources” or “assets” for someone who is trying to qualify for long term care Medicaid.  These two rules concerning Special Needs Trusts make the trusts useful for “riding out” a penalty period during which Medicaid won’t pay for long term care.

To make an improper transfer (i.e., to shelter part of one’s assets from the costs of long term care,) someone who needs long term care would give away some of his/her assets and then place enough money into a Special Needs Trust to cover the monthly costs during the penalty period that results from the assets given away.  Then, enough money could come out of the Special Needs Trust each month to cover that month’s costs.

The bringing money back each month from the Special Needs Trust is just like getting money back each month from a family member in Partial Give-Back method described in the November 17, 2016 installment.  There is a big difference between the Partial Give-Back method and the Special Needs Trust method, though.  The money given away in the Partial Give-Back method (part of which money came back each month) is part of an “improper transfer” that creates a penalty period.  (The penalty period got reduced each month because of the partial give-back in that method (until the January 2016 rule change.))  Depositing money into a Special Needs Trust is not considered an “improper transfer,” so it does not increase the penalty period for Medicaid coverage.

If the plan to give away assets when applying for Medicaid includes leaving a large amount in the Special Needs Trust after the penalty period has ended, the applicant might wish to use a stand-alone Special Needs Trust (as discussed in the April 2, 2015 installment.)  If the plan to give away assets includes leaving nothing or leaving a small amount in the Special Needs Trust after the penalty period has ended, the applicant might wish to use a Pooled Trust (as discussed in the April 9, 2015 installment.)

HOWEVER, I would prefer that Special Needs Trust not be used in this manner.  A Special Needs Trust is a very important shelter for assets to benefit people with special needs.  As discussed in prior installments, a Special Needs Trust can give a great deal of life enjoyment to someone who might otherwise be able to have nothing because of the financial limitations of government income and health programs for people with disabilities.  That enabling of life enjoyment is what a Special Needs Trust should, in my opinion, be used for.

Unfortunately, government policy makers who do not like to spend money on people with special needs repeatedly launch attacks on the Special Needs Trust law and rules, especially focusing on Pooled Trusts.  The use of Special Needs Trusts to counterbalance an improper transfer of assets when applying for Medicaid gives such hard-hearted government officials another reason to attack Special Needs Trusts.  Because other methods are available to cover a penalty period that accompanies an improper transfer of assets, I urge you NOT to use Special Needs Trusts for that purpose.

Ohio Medicaid changes “Aged Blind Disabled” Eligibility – Penalty Recovery through a Promissory Note

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Friends, I didn’t write a blog last week.  I was celebrating Thanksgiving with my family.  I hope you too enjoyed your Thanksgiving weekend.

This week’s blog continues the discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled program coming in 2016-2017.  The initial installment (April 28, 2016) provided an overview of the transition from the old system (following section 209(b) of the federal Medicaid law) to the new system (that will follow section 1634 of the federal Medicaid law.)  The May 5, 2016 installment discussed the new income rules that will go into effect with the new eligibility system.  The May 12, 2016 installment discussed setting up a Qualified Income Trust (aka Miller Trust) that will be necessary for people who need ABD Medicaid to help pay for long term care.  The June 16, 2016 installment discussed the Ohio rules that describe how to use the Miller Trust each month.  The June 23, 2016installment discussed the difficulty in understanding the need for a Miller Trust.  The July 1, 2016 installment discussed the need to empty the Miller Trust account every month.  The July 7, 2016 installment discussed the need to balance the Miller Trust with the desire to have health insurance.  The July 15, 2016 installment discussed the confusing deposit rules for Miller Trusts.  The July 21, 2016 installment discussed the changes that the Ohio Department of Medicaid made to the form Miller Trust document.  The July 28, 2016 installment discussed whether income is supposed to go directly into the Miller Trust.  The August 4, 2016 installment discussed Medicaid’s insistence that the transfers (or deposits) into the Miller Trust account be automatic.  The August 11, 2016 installment discussed money that doesn’t actually reach the Medicaid-recipient that, nonetheless, counts as “income” for purposes of using a Miller Trust.  The August 18, 2016 installment discussed  the appearance that a person on long term care Medicaid has an increase in income when he/she stops paying Medicare premiums.  The August 25, 2016 installment discussed the impact of tax withholding on certain income sources and the difficulty that the tax withholding creates for the Miller Trust.  The September 2, 2016 installment discussed the limit placed on monthly costs of the Miller Trust.  The September 9, 2016 installment discussed how Ohio’s Medicaid rules appear to count income tax refunds twice.  The September 15, 2016 installment discussed the Ohio Department of Medicaid’s change in policy regarding real estate (other than the residence.)  The September 22, 2016 installment discussed keeping the house with an intent to return to home.  The September 29, 2016 installment discussed keeping the house while a dependent family member lives there.   The October 6, 2016 installment discussed the home that is co-owned by someone else (other than the spouse.)  The October 27, 2015 installment discussed real property that is “essential for self-support.”  The November 10, 2017 installment discussed the retirement funds belonging to the spouse who does not seek Medicaid’s help with long term care costs.  The November 17, 2016 installment discussed the 2016 changes in how Ohio Medicaid will allow applicants to give away some of their assets cover the resulting penalty period through a return of part of the assets.  Today’s installment will discuss Ohio Medicaid’s new prohibition on using promissory notes to recover from an applicant giving away assets.

Note:  What I am calling “assets” Medicaid calls “resources.”  In Medicaid’s terminology, “assets” includes both “resources” and “income.”  Because most of the public thinks of “resources” as human resources or natural resources, and thinks of money in the bank as “assets,” I will use the term “assets” in this installment to refer to money in the bank and other similar things of value (like real estate, life insurance, etc.) that may be included in the applicant’s life savings.

Generally, when an applicant for Medicaid for long term care services gives away something of value (aka “assets,”) Medicaid will not pay for services for the amount of time that the given-away assets would have covered.  This “penalty” is found within the “transfer of assets” rule in Medicaid’s regulations.

Despite the penalty, some Medicaid applicants wish to give away some of their assets.  Usually, the applicants wish to give assets to their children.  The giving of these assets to the applicant’s children often gives the applicants a great deal of emotional relief because it allows some of their money (the results of their working lives) to outlive them.  Most parents want to leave something to their children and grandchildren.  Finding a way to allow these applicants to give some of their assets is what most elder law attorneys try to do.

The trick is finding a way to cover the applicant’s long term care costs during the time that Medicaid will not (i.e., during the “penalty period” aka the “Restricted Medicaid Coverage Period.”)  There used to be 4 different ways to cover such a penalty period.  During 2016, Ohio Medicaid changed the rules on covering this penalty period.  Today’s installment will discuss the use of a promissory note between the Medicaid applicant and a family member.

First, let’s explain a promissory note.  A promissory note is a legal document that contains a promise to repay a loan.  For example, anyone who has mortgaged a home has probably signed a promissory note as an agreement  to pay back the borrowed money.

In the context of Medicaid for long term care context, the person needing care can give away some of his/her assets.  Then, to pay for care during the penalty period that results from the give-away of assets, the person who needs care must set up a flow of income to pay the monthly care costs.  (The assets given away are protected from long term care costs and from Medicaid as long as the flow of income to pay for the penalty period is calculated correctly.  It really is a big math problem.)

Monthly installments to repay a loan can be just the flow of income to appropriately cover such a penalty period.  So, the person who needs long term care can lend money to someone (usually a family member, but it can be someone else.)  Then, the family member (as the borrower) would repay the loan in installments of an appropriate size to cover the monthly care costs during the penalty period.  To document the repayment terms (and to ensure that the “loan” wasn’t actually given away, which would result in a longer penalty period,) the lender (the person needing care) and the borrower (the family member or friend who offering to make the monthly payments) would have to sign a promissory note.

Remember, there’s no need for a promissory note if it isn’t used to cover a penalty period.

Before Ohio Medicaid’s August 1, 2016 rule changes, the acceptability of promissory notes was a bit unpredictable.  Some county Medicaid offices would accept promissory notes.  Some county offices would not accept them.  And then, even within some county Medicaid offices, some caseworkers would accept promissory notes and some would not accept them.

Now, after the August 2016 rule changes, Ohio Medicaid has (supposedly) prohibited the use of promissory notes for penalty recovery.

So, if promissory notes are prohibited, why would I even write about them?  I’m not sure that Ohio’s prohibition on promissory notes in Medicaid cases is permanent.

The federal Social Security law allows promissory notes to be used as described here, and the Medicaid program (at both the federal and state level) are part of the Social Security law.  One would think, that something allowed by the Social Security law would be allowed by the Medicaid rules that exist only because of the Social Security law.  So, at some point, some elder law attorney will probably challenge Ohio’s prohibition of promissory notes as a violation of the Social Security law.

Ohio Medicaid changes “Aged Blind Disabled” Eligibility – Penalty Recovery through Partial Give-Back

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This week’s blog continues the discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled program coming in 2016-2017.  The initial installment (April 28, 2016) provided an overview of the transition from the old system (following section 209(b) of the federal Medicaid law) to the new system (that will follow section 1634 of the federal Medicaid law.)  The May 5, 2016 installment discussed the new income rules that will go into effect with the new eligibility system.  The May 12, 2016 installment discussed setting up a Qualified Income Trust (aka Miller Trust) that will be necessary for people who need ABD Medicaid to help pay for long term care.  The June 16, 2016 installment discussed the Ohio rules that describe how to use the Miller Trust each month.  The June 23, 2016installment discussed the difficulty in understanding the need for a Miller Trust.  The July 1, 2016 installment discussed the need to empty the Miller Trust account every month.  The July 7, 2016 installment discussed the need to balance the Miller Trust with the desire to have health insurance.  The July 15, 2016 installment discussed the confusing deposit rules for Miller Trusts.  The July 21, 2016 installment discussed the changes that the Ohio Department of Medicaid made to the form Miller Trust document.  The July 28, 2016 installment discussed whether income is supposed to go directly into the Miller Trust.  The August 4, 2016 installment discussed Medicaid’s insistence that the transfers (or deposits) into the Miller Trust account be automatic.  The August 11, 2016 installment discussed money that doesn’t actually reach the Medicaid-recipient that, nonetheless, counts as “income” for purposes of using a Miller Trust.  The August 18, 2016 installment discussed  the appearance that a person on long term care Medicaid has an increase in income when he/she stops paying Medicare premiums.  The August 25, 2016 installment discussed the impact of tax withholding on certain income sources and the difficulty that the tax withholding creates for the Miller Trust.  The September 2, 2016 installment discussed the limit placed on monthly costs of the Miller Trust.  The September 9, 2016 installment discussed how Ohio’s Medicaid rules appear to count income tax refunds twice.  The September 15, 2016 installment discussed the Ohio Department of Medicaid’s change in policy regarding real estate (other than the residence.)  The September 22, 2016 installment discussed keeping the house with an intent to return to home.  The September 29, 2016 installment discussed keeping the house while a dependent family member lives there.   The October 6, 2016 installment discussed the home that is co-owned by someone else (other than the spouse.)  The October 27, 2015 installment discussed real property that is “essential for self-support.”  The November 10, 2017 installment discussed the retirement funds belonging to the spouse who does not seek Medicaid’s help with long term care costs.  Today’s installment will discuss the 2016 changes in how Ohio Medicaid will allow applicants to give away some of their assets and still qualify for Medicaid.

Note:  What I am calling “assets” Medicaid calls “resources.”  In Medicaid’s terminology, “assets” includes both “resources” and “income.”  Because most of the public thinks of “resources” as human resources or natural resources, and thinks of money in the bank as “assets,” I will use the term “assets” in this installment to refer to money in the bank and other similar things of value (like real estate, life insurance, etc.) that may be included in the applicant’s life savings.

Generally, when an applicant for Medicaid for long term care services gives away something of value (aka “assets,”) Medicaid will not pay for services for the amount of time that the given-away assets would have covered.  This “penalty” is found within the “transfer of assets” rule in Medicaid’s regulations.

Despite the penalty, some Medicaid applicants wish to give away some of their assets.  Usually, the applicants wish to give assets to their children.  The giving of these assets to the applicant’s children often gives the applicants a great deal of emotional relief because it allows some of their money (the results of their working lives) to outlive them.  Most parents want to leave something to their children and grandchildren.  Finding a way to allow these applicants to give some of their assets is what most elder law attorneys try to do.

The trick is finding a way to cover the applicant’s long term care costs during the time that Medicaid will not (i.e., during the “penalty period” aka the “Restricted Medicaid Coverage Period.”)  There used to be 4 different ways to cover such a penalty period.  During 2016, Ohio Medicaid changed the rules on covering this penalty period.  Today’s installment will discuss the “partial give-back” method.

Before January 2016, the Medicaid applicant could give away substantially all of his/her assets and then receive back enough each month to pay for his/her long term care for that month.  (The conveyance back of  pieces of the gift leads to call this the “partial give-back” approach.)  The penalty period would be reduced a little bit at a time because the net amount given away went down a bit each month with the monthly return of part of the gift.  At the same time, with the passage of a month during which Medicaid didn’t have to pay for the person’s long term care, part of the money still held by the applicant’s children is forgiven  (The amount of the gift that is forgiven each month that Medicaid doesn’t have to pay for long term care is equal to the average amount that it pays to nursing homes throughout the state.  That amount is adjusted from time to time with as the care costs go up with inflation.)

In January 2016, Ohio Medicaid enacted a rule that completely ended this partial give-back strategy.

The end of partial give-backs is an inconvenience but not a tragedy in the practice of elder law.  It has, however, led to some Medicaid applicants getting caught in a penalty period without knowing it would happen.

Some Medicaid applicants have given gifts of money to family members within the five years before asking for Medicaid’s help.  If someone makes gifts to family and then fails to account for the resulting penalty period before applying for Medicaid, the Medicaid caseworker will probably find a record of the gift in the person’s bank records.  Then, the caseworker will have to impose a penalty period.  By the time the person applies for Medicaid, however, he or she will have reduced assets to $2,000 through spending or other gifts.  If the reduction of assets leading up to the application doesn’t include a way to cover the penalty from the prior gifts, the person will be left without a way to pay for care for the unexpected penalty period.

Legal Issues when someone has Dementia – Seek out an Elder Law Attorney

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This week’s blog continues the discussion of Legal Issues when someone has Dementia.  The introductory installment (April 30, 2015) put forth the issue of “Who can speak for someone with dementia?”  The May 14, 2015 installment discussed the situation where the person with dementia has Advance Directives in place.  The May 21, 2015 installment discussed the legal issues in determining whether a dementia sufferer can choose to have new Advance Directives prepared.  The May 30, 2015 installment discussed options in preparing a Health Care Power of Attorney.  The June 4, 2015 installment discussed how to decide whether to prepare a Living Will.  The June 11, 2015 installment discussed some of the basic issues in preparing a General Power of Attorney.  The June 18, 2015 installment discussed the importance of making the General Power of Attorney “durable.”  The June 25, 2015 installment discussed the importance of NOT making the General Power of Attorney “springing.”  The July 2, 2015 installment discussed revoking prior Powers of Attorney.  The July 9, 2015 installment discussed Do Not Resuscitate orders.  The July 16, 2015 installment discussed the Right of Disposition designation.  The July 23, 2015 installment discussed the Will (or Last Will and Testament.)  The July 31, 2015 installment discussed beneficiary designations on life insurance policies, IRAs, annuities, etc.  The August 6, 2015 installment discussed whether to pre-plan a funeral.  The August 14, 2015 installment discussed choosing a final resting place.  The August 28, 2015 installment discussed pre-planning the funeral ceremony.  The September 3, 2015 installment discussed when and how to pay for the pre-planned funeral.  The September 10, 2015 installment discussed medical insurance choices.  The September 17,2015 installment discussed long term care insurance.  Today’s installment will discuss obtaining the services of an elder law attorney.

Today’s installment continues the discussion of issues to manage when someone finds out that he or she has a disease that causes dementia.  These issues should be managed before the dementia gets worse, before the disease takes away the person’s ability to make decisions.  Along with the issues previously discussed, someone who has dementia (or his or her family) should seek the help of an elder law attorney.

Someone who has a disease that causes dementia is very likely to need long term care in the future.  The costs of that long term care can use up all of the person’s life savings.  If the person has a spouse, the costs of care can use up the spouse’s savings as well.  An elder law attorney may be able to shelter a portion of that savings.

In addition, an experienced elder law attorney can help identify other resources or services that can help the person with dementia and his or her family.  These services may allow the person to stay in his or her home longer, for example.  Alternatively, certain services may help family members in understanding the disease and its symptoms, making life easier for both the person with dementia and the family.

An elder law attorney can help with the important decisions that this blog has discussed over the last several weeks.  The elder law attorney can be a guide through the labyrinth of uncertainty into which the dementia has thrust the person and family.

The sooner the person with dementia and his or her family start to work with an elder law attorney, the more good can come of it.  A delay is seeking out an elder law attorney takes options and opportunities off the table.

Legal Issues when someone has Dementia – Consider Long Term Care Insurance

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This week’s blog continues the discussion of Legal Issues when someone has Dementia.  The introductory installment (April 30, 2015) put forth the issue of “Who can speak for someone with dementia?”  The May 14, 2015 installment discussed the situation where the person with dementia has Advance Directives in place.  The May 21, 2015 installment discussed the legal issues in determining whether a dementia sufferer can choose to have new Advance Directives prepared.  The May 30, 2015 installment discussed options in preparing a Health Care Power of Attorney.  The June 4, 2015 installment discussed how to decide whether to prepare a Living Will.  The June 11, 2015 installment discussed some of the basic issues in preparing a General Power of Attorney.  The June 18, 2015 installment discussed the importance of making the General Power of Attorney “durable.”  The June 25, 2015 installment discussed the importance of NOT making the General Power of Attorney “springing.”  The July 2, 2015 installment discussed revoking prior Powers of Attorney.  The July 9, 2015 installment discussed Do Not Resuscitate orders.  The July 16, 2015 installment discussed the Right of Disposition designation.  The July 23, 2015 installment discussed the Will (or Last Will and Testament.)  The July 31, 2015 installment discussed beneficiary designations on life insurance policies, IRAs, annuities, etc.  The August 6, 2015 installment discussed whether to pre-plan a funeral.  The August 14, 2015 installment discussed choosing a final resting place.  The August 28, 2015 installment discussed pre-planning the funeral ceremony.  The September 3, 2015 installment discussed when and how to pay for the pre-planned funeral.  The September 10, 2015 installment discussed medical insurance choices.  Today’s installment will discuss long term care insurance.

Today’s installment continues the discussion of issues to manage when someone finds out that he or she has a disease that causes dementia.  These issues should be managed before the dementia gets worse, before the disease takes away the person’s ability to make decisions.  Along with the issues previously discussed, someone who has dementia (or his or her family) should see whether long term care insurance might be available.

Someone who has a disease that causes dementia is very likely to need long term care in the future.  At the same time, someone who has a disease that causes dementia might have trouble getting long term care insurance.  Nonetheless, it’s worth a try.  After all, insurance quotes are free.

Essentially, the availability of long term care insurance depends on whether a doctor has diagnosed the dementia or the disease that causes it and whether, without a diagnosis, an insurance underwriter can see dementia risks.  If someone with a dementia causing illness applies for long term care insurance early enough, he or she may be able to get coverage.  (Don’t lie on an application in order to get coverage.)

Some long term care insurers issue policies more easily than others.  Some long term care insurance products are easier to get than others.  Even if a “traditional” long term care insurance policy isn’t available, a non-traditional policy might be available.  Some life insurance policies have a long term care rider or an option for lifetime benefits (which can act like long term care insurance.)  Some annuities have long term care features.

Because of the risk of long term care that comes from a dementia related disease, someone who has the early stage of such a disease would be well served at least to try to get long term care insurance in any form that he or she can get.

Comparing Strategies to Pre-Plan for Long Term Care Costs

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Today’s blog post continues the series about possible ways to plan ahead to protect against long term care costs.

My December 11, 2014 post discussed doing nothing ahead of time to protect your assets against the possibility of long term care costs in the future.

Previously, my blog discussed giving money away as a method to plan ahead for protection against long term care costs.  My post of September 19, 2014, the first installment of the discussion on gifting, described how the Medicaid “Aged, Blind and Disabled” program and the Department of Veterans Affairs “Pension” (aka VA “Aid and Attendance”) program look at assets given away.  My post of September 25, 2014 discussed transferring assets to a trust for protection against long term care costs.  My post of October 2, 2014 discussed transferring assets to a Limited Liability Company for protection against long term care costs.  My post of October 9, 2014 discussed transferring assets to your children (or other family members) for protection against long term care costs.  My post of October 16 discussed transferring assets to a charity as a way to protect against long term care costs.  My post of October 23, 2014 discussed transferring assets to your spouse as a way to protect against long term care costs.  My post of November 26, 2014 compared the various gifting strategies.

Before that, my blog discussed long term care insurance as an approach to planning ahead for long term care costs.  In the long term care portion of this discussion, my post of May 22, 2014 discussed whether to buy long term care insurance at all.  My post of May 29, 2014 suggested looking for a stable, proven insurer.  My post of June 5, 2014 described how to identify a proven, stable Long Term Care insurance company.  My post of June 12, 2014 discussed the importance of protection against inflation. My post of June 19, 2014 suggested planning to use insurance to pay for four or five years of long term care.  My post of June 22, 2014 suggested a daily rate to choose when purchasing long term care insurance.  My post of July 10, 2014 advised to look carefully at the list of Activities of Daily Living that can trigger coverage from the long term care insurance policy.  My post of July 17, 2014 described the differences between a “period of time” kind of coverage and a “pile of money” kind of coverage.  My post of July 25, 2014 advised to make sure that the long term care insurance includes coverage for cognitive impairment.  My post of July 30, 2014 described the differences between tax-qualified and non-qualified policies.  My post of August 5, 2014 discussed the value of long term care insurance policies that qualify for the Partnership program.    My post of August 14, 2014 discussed hybrid policies that combine long term care insurance with life insurance.  My post of August 21, 2014 described how a long term care insurance policy with a return of premium rider can be used to construct a “hybrid” life insurance/long term care insurance policy.  My post of August 28, 2014 described how to use a partnership policy to protect just enough of your life savings while holding down the cost of the insurance.  My post of September 5, 2014 described how to coordinate long term care insurance with potential veterans benefits.  My post of September 12, 2014 discussed how an elder law attorney can help maximize the value of long term care insurance.

The introductory post in the series on planning ahead for long term care costs appeared on May 15, 2014.

Today’s post compares the possible strategies for planning ahead for long term care costs previously discussed in this series.  We will use the criteria for comparison set out in my post of May 15, 2014.  (It’s hard to believe that this discussion goes all the way back to May.)  Those criteria are:

  • Your level of worry about long term care costs,
  • Cost to implement the strategy,
  • Risk of abnormal loss of assets,
  • Convenience to implement,
  • Control over your money, and
  • Likelihood of success.

 

Long Term Care Insurance

  • Great at relieving worry about long term care costs;
  • Relatively expensive to implement compared to the other pre-planning strategies (but still inexpensive compared to long term care costs);
  • No risk of abnormal loss of your assets (just your normal investment risks);
  • Convenient to implement (just buy a good policy);
  • You keep control over your money;
  • High likelihood of success in protecting your assets if you get an elder law attorney to help you at the time you need care.
    (If you don’t protect your assets when you first make a claim against the policy, you are putting those assets at risk, and you are failing to get full value from the policy.)

 

Giving assets away

  • Good, but not great, at relieving worry about long term care costs (You might worry whether you’ve given away too little or too much);
  • Inexpensive to implement;
  • High risk of abnormal loss of assets (you’ve put your money at the mercy of someone else);
  • Convenient to implement -just give stuff away (a gift tax return may be necessary);
  • You completely sacrifice control over your money;
  • Medium likelihood of success in protecting your assets from long term care costs
    (You have to hope that the look-back period, currently 5 years for Medicaid, passes before you need long term care.)

 

Do Nothing

  • Very little or no relief from worry about long term care costs (except for people who have the “I’ll deal with it when it happens” attitude);
  • No cost to implement;
  • No abnormal risk of loss of assets (just the normal risk of your investment choices);
  • Convenient to implement (What could be more convenient that doing nothing?);
  • You maintain control over your money;
  • BUT there is little chance of protecting the bulk of your assets from long term care costs.
    (Frequently, an elder law attorney can help save something, even at the time you need long term care, but rarely can the bulk of your assets be saved.)


There is no clear winner that fits everyone.  No two people have the same risk tolerance, and, likewise, no two people have the same level of desire to keep control of their assets.  The differences among these strategies are big enough that you might like one approach while your neighbor prefers a different approach.  It good even be your spouse that has an opinion different from yours.  (That would be a tricky plan to figure out.)  Pre-planning for long term care costs is not easy stuff.

Above all else, please remember that the strategies discussed in this series are for long term care PRE-PLANNING (i.e., when you are worried about, but don’t yet need, long term care.)  The analysis in this series is not appropriate for someone who needs care now or will probably need care within 5 years.

Note:  Don’t count on a blog post the next two weeks because of Christmas and New Years.  I might publish blogs during those times but probably not.

For more information, visit Jim’s website.

Jim Koewler’s mission is
“Protecting Seniors and People with Special Needs.”

For help with long term care or with planning for someone with special needs,
call Jim, or contact him through his website.

© 2014 The Koewler Law Firm.  All rights reserved.

Doing Nothing to Plan Ahead for Long Term Care Costs

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Today’s blog post continues the series about possible ways to plan ahead to protect against long term care costs.

Previously, my blog discussed giving money away as a method to plan ahead for protection against long term care costs.  My post of September 19, 2014, the first installment of the discussion on gifting, described how the Medicaid “Aged, Blind and Disabled” program and the Department of Veterans Affairs “Pension” (aka VA “Aid and Attendance”) program look at assets given away.  My post of September 25, 2014 discussed transferring assets to a trust for protection against long term care costs.  My post of October 2, 2014 discussed transferring assets to a Limited Liability Company for protection against long term care costs.  My post of October 9, 2014 discussed transferring assets to your children (or other family members) for protection against long term care costs.  My post of October 16 discussed transferring assets to a charity as a way to protect against long term care costs.  My post of October 23, 2014 discussed transferring assets to your spouse as a way to protect against long term care costs.  My post of November 26, 2014 compared the various gifting strategies.

Before that, my blog discussed long term care insurance as an approach to planning ahead for long term care costs.  In the long term care portion of this discussion, my post of May 22, 2014 discussed whether to buy long term care insurance at all.  My post of May 29, 2014 suggested looking for a stable, proven insurer.  My post of June 5, 2014 described how to identify a proven, stable Long Term Care insurance company.  My post of June 12, 2014 discussed the importance of protection against inflation. My post of June 19, 2014 suggested planning to use insurance to pay for four or five years of long term care.  My post of June 22, 2014 suggested a daily rate to choose when purchasing long term care insurance.  My post of July 10, 2014 advised to look carefully at the list of Activities of Daily Living that can trigger coverage from the long term care insurance policy.  My post of July 17, 2014 described the differences between a “period of time” kind of coverage and a “pile of money” kind of coverage.  My post of July 25, 2014 advised to make sure that the long term care insurance includes coverage for cognitive impairment.  My post of July 30, 2014 described the differences between tax-qualified and non-qualified policies.  My post of August 5, 2014 discussed the value of long term care insurance policies that qualify for the Partnership program.    My post of August 14, 2014 discussed hybrid policies that combine long term care insurance with life insurance.  My post of August 21, 2014 described how a long term care insurance policy with a return of premium rider can be used to construct a “hybrid” life insurance/long term care insurance policy.  My post of August 28, 2014 described how to use a partnership policy to protect just enough of your life savings while holding down the cost of the insurance.  My post of September 5, 2014 described how to coordinate long term care insurance with potential veterans benefits.  My post of September 12, 2014 discussed how an elder law attorney can help maximize the value of long term care insurance.

The introductory post in the series on planning ahead for long term care costs appeared on May 15, 2014.

Today’s post discusses doing nothing to pre-plan for long term care costs.

It’s okay to do nothing to protect your assets against the possibility of long term care costs in the future.  It’s easy.  It doesn’t cost anything.  It doesn’t give your money away while you’re still healthy.

Doing nothing does have a high degree of risk, however. To decide to do nothing you must determine whether you’re “losing sleep” about the risk of long term care in your future.  If you’re aware of the possibility of long term care needs in the future but that awareness doesn’t cause you to worry, then doing nothing is okay.  (Doing nothing through procrastination or decision-making inertia is NOT the same as determining how worried you are about long term care in your future.)

Doing nothing is especially okay if the cost of long term care insurance would bother you or the inconvenience and loss of control of your money that comes from giving away substantially all of your assets would bother you.

I can’t stress enough, however, that doing nothing is risky. (I know I’m repeating myself, but that is probably the most important thing to know about doing nothing to plan ahead.)

Even if you do nothing to plan ahead for long term care costs, there is the possibility of crisis planning at the time you need long term care that can allow you to keep some of your assets in the family (or wherever you want your assets to go.) Crisis planning won’t save nearly as much as pre-planning would have saved, but it will probably save something.

For more information, visit Jim’s website.

Jim Koewler’s mission is
“Protecting Seniors and People with Special Needs.”

For help with long term care or with planning for someone with special needs,
call Jim, or contact him through his website.

© 2014 The Koewler Law Firm.  All rights reserved.

Gifts as a way to Protect against Long Term Care Costs – Comparing Strategies

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Today’s blog post continues the series about giving money away as a method to plan ahead for protection against long term care costs.  My post of September 19, 2014, the first installment of the discussion on gifting, described how the Medicaid “Aged, Blind and Disabled” program and the Department of Veterans Affairs “Pension” (aka VA “Aid and Attendance”) program look at assets given away.  My post of September 25, 2014 discussed transferring assets to a trust for protection against long term care costs.  My post of October 2, 2014 discussed transferring assets to a Limited Liability Company for protection against long term care costs.  My post of October 9, 2014 discussed transferring assets to your children (or other family members) for protection against long term care costs.  My post of October 16 discussed transferring assets to a charity as a way to protect against long term care costs.  My post of October 23 discussed transferring assets to your spouse as a way to protect against long term care costs.

The current series on gifting is part of a more comprehensive series on possible ways to plan ahead to protect against long term care costs.  Previously, my blog discussed long term care insurance as an approach to planning ahead for long term care costs.  In the long term care portion of this discussion, my post of May 22, 2014 discussed whether to buy long term care insurance at all.  My post of May 29, 2014 suggested looking for a stable, proven insurer.  My post of June 5, 2014 described how to identify a proven, stable Long Term Care insurance company.  My post of June 12, 2014 discussed the importance of protection against inflation. My post of June 19, 2014 suggested planning to use insurance to pay for four or five years of long term care.  My post of June 22, 2014 suggested a daily rate to choose when purchasing long term care insurance.  My post of July 10, 2014 advised to look carefully at the list of Activities of Daily Living that can trigger coverage from the long term care insurance policy.  My post of July 17, 2014 described the differences between a “period of time” kind of coverage and a “pile of money” kind of coverage.  My post of July 25, 2014 advised to make sure that the long term care insurance includes coverage for cognitive impairment.  My post of July 30, 2014 described the differences between tax-qualified and non-qualified policies.  My post of August 5, 2014 discussed the value of long term care insurance policies that qualify for the Partnership program.    My post of August 14, 2014 discussed hybrid policies that combine long term care insurance with life insurance.  My post of August 21, 2014 described how a long term care insurance policy with a return of premium rider can be used to construct a “hybrid” life insurance/long term care insurance policy.  My post of August 28, 2014 described how to use a partnership policy to protect just enough of your life savings while holding down the cost of the insurance.  My post of September 5, 2014 described how to coordinate long term care insurance with potential veterans benefits.  My post of September 12, 2014 discussed how an elder law attorney can help maximize the value of long term care insurance.

The introductory post in the series on planning ahead for long term care costs appeared on May 15, 2014.

Today’s post, as part of the sub-series on to how to give assets away, summarizes and compares the different gifting strategies.

Gifts to a spouse do not have any effect on Medicaid or VA Pension eligibility.

Gifts to a trust are the most highly protected from risks because the beneficiaries (the people whom you wish to eventually receive your money) cannot get to the contents of the trust except through the discretion of the trustee.  The beneficiaries’ creditors cannot get into the trust to collect on beneficiaries’ debts.  But, the trust pays the highest tax rate, holding down its growth.  In addition, the trust will have some initial set up costs and some ongoing administration costs.

Gifts to a Limited Liability Company are well protected because the members of the LLC (the people whom you wish to eventually receive your money) cannot get to the assets of the LLC except through the managing member.  In addition, the income of the LLC is not automatically taxed at the highest tax rate.  Each member pays his or her share of the tax at his or her applicable tax rate.  Members’ creditors, however, may be able to take the members’ ownership interest in the LLC.  (Creditors can’t get at the assets inside the LLC except through the decisions of the managing member, but they can become members of the LLC in place of the original members’ because of the original members’ debts.)  In addition, the LLC will have some set up costs and some ongoing administration costs.

Giving to children (or close friends) is the easiest and least expensive gifting method.  There are no set up costs and no administration costs (like with an LLC or trust.) not protected at all from the child’s risks.  It is also the most flexible gifting method if you don’t hold back enough assets to support yourself because it is easy for a child to just give some money back when you need it.  Giving to children is, however, the riskiest gifting method.  Once the child receives the assets, the child’s creditors can pursue the assets easily.

Giving to charity is completely inflexible and should be done (if at all) with only a small part of your assets and then only in line with the charitable practices that you would follow under “normal circumstances” (i.e., Don’t let the with to pre-plan for long term care costs cause you to give much more to charity than you would otherwise give.)  The gifts to charity will be used by the charity almost immediately, so there is no way to reverse the gift if you miscalculate your future living expenses.

No matter which gifting strategy seems best for you, do not give away all of your assets.  You need to hold back enough to support yourself.  Because this discussion is about gifting before you need care, there won’t be any Medicaid or VA Pension benefit coming in the near future that you can use to pay your bills.  You must hold onto some of your assets.

Above all else, please remember that the gifting strategies discussed in this series are for long term care PRE-PLANNING (i.e., when you are worried about, but don’t yet need, long term care.)  The analysis in this series is not appropriate for someone who needs care now or will probably need care within 5 years.

For more information, visit Jim’s website.

Jim Koewler’s mission is
“Protecting Seniors and People with Special Needs.”

For help with long term care or with planning for someone with special needs,
call Jim, or contact him through his website.

© 2014 The Koewler Law Firm.  All rights reserved.

Gifts to your Spouse as a way to Protect against Long Term Care Costs

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Today’s blog post continues the series about giving money away as a method to plan ahead for protection against long term care costs.  My post of September 19, 2014, the first installment of the discussion on gifting, described how the Medicaid “Aged, Blind and Disabled” program and the Department of Veterans Affairs “Pension” (aka VA “Aid and Attendance”) program look at assets given away.  My post of September 25, 2014 discussed transferring assets to a trust for protection against long term care costs.  My post of October 2, 2014 discussed transferring assets to a Limited Liability Company for protection against long term care costs.  My post of October 9, 2014 discussed transferring assets to your children (or other family members) for protection against long term care costs.  My post of October 16 discussed transferring assets to a charity as a way to protect against long term care costs.

The current series on gifting is part of a more comprehensive series on possible ways to plan ahead to protect against long term care costs.  Previously, my blog discussed long term care insurance as an approach to planning ahead for long term care costs.  In the long term care portion of this discussion, my post of May 22, 2014 discussed whether to buy long term care insurance at all.  My post of May 29, 2014 suggested looking for a stable, proven insurer.  My post of June 5, 2014 described how to identify a proven, stable Long Term Care insurance company.  My post of June 12, 2014 discussed the importance of protection against inflation. My post of June 19, 2014 suggested planning to use insurance to pay for four or five years of long term care.  My post of June 22, 2014 suggested a daily rate to choose when purchasing long term care insurance.  My post of July 10, 2014 advised to look carefully at the list of Activities of Daily Living that can trigger coverage from the long term care insurance policy.  My post of July 17, 2014 described the differences between a “period of time” kind of coverage and a “pile of money” kind of coverage.  My post of July 25, 2014 advised to make sure that the long term care insurance includes coverage for cognitive impairment.  My post of July 30, 2014 described the differences between tax-qualified and non-qualified policies.  My post of August 5, 2014 discussed the value of long term care insurance policies that qualify for the Partnership program.    My post of August 14, 2014 discussed hybrid policies that combine long term care insurance with life insurance.  My post of August 21, 2014 described how a long term care insurance policy with a return of premium rider can be used to construct a “hybrid” life insurance/long term care insurance policy.  My post of August 28, 2014 described how to use a partnership policy to protect just enough of your life savings while holding down the cost of the insurance.  My post of September 5, 2014 described how to coordinate long term care insurance with potential veterans benefits.  My post of September 12, 2014 discussed how an elder law attorney can help maximize the value of long term care insurance.

The introductory post in the series on planning ahead for long term care costs appeared on May 15, 2014.

Today’s post, as part of the sub-series on to how to give assets away, discusses gifts to your spouse as a method to protect the gifted assets from the costs of long term care in the future.

This one has a short answer:  Don’t do it.  Don’t give assets to your spouse to protect against long term care costs.  It doesn’t work.  It doesn’t have any effect.

Why try it?

Married people worry that their long term care will impoverish their spouses.  Giving assets to a spouse to put in her or his own name seems like a logical way to protect those assets from one’s own long term care risks and, at the same time, give the spouse additional assets as a shield against going completely broke.  Unfortunately, it doesn’t work that way.

Why doesn’t it work?

Both Medicaid and the VA view a married couple as a single unit when counting assets. The spouses may just as well view their assets (for long term care purposes) as yours, mine, and ours.  Your assets are mine.  My assets are yours.  Our assets are ours.

Medicaid just lumps the couple’s assets together.  It doesn’t matter whose name is on a particular asset.  All of the assets are considered.  (It may not be necessary to spend down all assets.  That’s a question of crisis planning (i.e., not pre-planning) for long term care costs.)

VA’s result is the same, but the method is a little different.  VA considers the “household’s” assets when considering eligibility for VA Pension (aka Aid & Attendance.)  That still puts both spouses’ assets in the mix.  It’s just a different way of looking at it from Medicaid’s way.

So, as a result, giving assets to a spouse doesn’t matter.  Medicaid’s rules consider the assets of both spouses in testing financial eligibility.  VA’s rules consider the assets of the household in testing financial eligibility.  Moving an asset from one spouse to another doesn’t take the asset out of the ownership of the spouses when they are considered as a couple and doesn’t take the asset out of the household.

There are ways to protect a spouse from long term care costs, but gifting before you need care isn’t one of those ways.

For more information, visit Jim’s website.

Jim Koewler’s mission is
“Protecting Seniors and People with Special Needs.”

For help with long term care or with planning for someone with special needs,
call Jim, or contact him through his website.

© 2014 The Koewler Law Firm.  All rights reserved.