adapting: financial planning for a life with ms

HEFFNER & ASSOCIATES ELDER LAW

Mark B. Heffner, Esq. , CELAHeffner & Associates

615 Jefferson BoulevardWarwick, Rhode Island

[email protected]

www.hefflaw.com

Estate Planning & Public Benefits for Individuals with MS

http://www.hefflaw.com


Disclaimer

•Materials are for general education and should not be substituted for consultation with a competent estate planning attorney in your state

•Materials presented from the perspective of Rhode Island

•Rules and practice vary significantly from state to state and are subject to change


Lifetime Planning: Health Care Decisionmaking

Advance Directive

Durable Power of Attorney for Health Care

Living Will

Selection of Agent

Selection of Successor Agent


Lifetime Planning: Financial Decisionmaking

Joint accounts: Be careful!

Durable Power of Attorney for finances

Determination of Powers to provide

Again, selection successor Agent

Selection of Agent (aka, “Attorney in fact”)

Ex: Gifting and Estate planning?



Revocable Trust, aka, “Living Trust”

Avoids/Reduces “Push-Back” of Institutions with use of Durable Power of Attorney

Selection of Trustee & successor Trustee critical

Still need Durable Power of Attorney for finances

No utility for asset protection planning. Instead, need…….



Irrevocable Trust

Properly structured, assets titled to Irrevocable Trust protected from spend

down for Medicaid eligibility

Assets transferred subject to 5 year lookback period

Loss of direct control over assets transferred


Planning for post-death

Will—requires probate

Selection of Executor—same person generally as agent under financial DPOA

Revocable & Irrevocable Trusts—if “funded” will avoid probate for those assets

Note: Need to check beneficiary designations (IRAs, life insurance, annuities),

joint titling, as generally “trump” Will or Trust provisions


Public benefits available for long-term care: Medicare

Myth: Individuals with MS & other chronic illnesses requiring LTC not covered by

Medicare

Fact: Individuals eligible for Medicare are entitled to an individualized assessment of

their need for services vs. generalized assumptions based on diagnosis

Examples of services which could benefit individuals with MS include PT, OT, Speech

therapies.



Myth: PT, OT, Speech therapies unavailable to MS patients because condition is chronic

and not likely to improve

Fact: Therapies are available if services are skilled and medically necessary to maintain

individual’s condition and prevent deterioration

“Improvement” or “restoration of prior functioning” not the test—rather that skilled

services are required to maintain current level of functioning & prevent deterioration



Nursing home benefit under Part A--limited long term care (LTC) coverage 20 days full payment, up to 80 additional days with co-

pay ($160/pay)

Medicare nursing home benefit requires a three day prior hospital admission

In contrast to…..



Coverage for long-term home care benefits are available provided:

Physician signs plan of carePatient is homeboundPatient requires PT or speech therapy, or intermittent skilled nursing home care Home care provider is Medicare-certified

Potentially unlimited in duration


What is Medicaid?•It is not Medicare!

•Medicaid: in addition to general criteria (age, blind, disabled) & needing a level of care, must also fall within financial criteria (assets, income, transfer restrictions)

•Medicare: insurance model; no asset or income qualification requirements

•Substantial state to state variations


Resources

Excluded (Single Person)•Home (equity value limit: $543K) if “intent to return”

•Household goods & personal effects( no value limit, unless exceptional)

•Vehicle (limit: $4500, unless used for transportation to medical appts)

•Life Insurance ($4000 face limit)

•Irrevocable Burial Contract, or funds set aside for burial ($1500)

•Funds otherwise available (limit: $4000)

Available

EVERYTHING ELSE


Resources

Excluded (Married Couple)

•Home: no equity limitation if residence of “Community Spouse” (CS)

•Vehicle: if used by CS, no limitation on value

•CS retains “Community Spouse Resource Allowance” (CSRA)


Transfers of Assets

Any transfer occurring on or after February 8, 2006 is subject to five year lookback period

Q: What types of transfers fall within lookback period?

A: Uncompensated (UV) transfers--i.e., those for which fair market value (FMV) not received by applicant or the applicant’s spouse Parent gives adult children each $10,000

Uncompensated transfer: $30,000


Medicaid Planning Techniques

Highly individualized—one size definitely does not fit all!

• Spenddowns—debts, taxes, burial contracts.

Non-crisis, or “pre-crisis” planning techniques include:

• Make transfers, incur five year lookback period

• Specialized annuities—married couples only

“Crisis planning” techniques include:

• “Reverse half a loaf” planning

• Many more opportunities exist for married couples; however still “never too late” for single individuals

• Transfers—must be mindful of tax implications, creditors—grantor Irrevocable Trusts useful device.


How to get started

Arrange for consultation with competent elder law attorney

Preparation: provide elder law attorney with individual family, financial and health information

Initial meeting should be hour-hour & a half

Expect fee for initial consultation


National Elder Law Foundationwww.nelf.org

Locating competent elder law attorney

Certified Elder Law Attorney

Provides interactive state map of Certified Elder Law Attorneys (CELA) in each state

http://www.nelf.org


Mark B. Heffner, Esq. , CELAHeffner & Associates

615 Jefferson BoulevardWarwick, Rhode Island

[email protected]

www.hefflaw.com

http://www.hefflaw.com

adapting: financial planning for a life with ms

Health & Medicine