providence retired teachers association - estate & medicaid planning
DESCRIPTION
Presentation on Estate and Medicaid Planning to the Providence Retired Teachers Association.TRANSCRIPT
HEFFNER &ASSOCIATES
ELDER LAW
Mark B. Heffner, Esq. , CELA
Heffner & Associates
615 Jefferson Boulevard
Warwick, Rhode Island
401-737-1600
www.hefflaw.com
Estate & Medicaid Planning
HEFFNER &ASSOCIATES
ELDER LAW
Disclaimer
•Materials are for general education and should
not be substituted for consultation with a
competent elder law attorney in your jurisdiction
•Materials presented from the perspective of
Rhode Island Medicaid regulations and practice
•Rules and practice vary significantly from
State to State (and occasionally within the
same State) and are subject to change
HEFFNER &ASSOCIATES
ELDER LAW
Meet Janet
HEFFNER &ASSOCIATES
ELDER LAW
Lifetime Planning for Janet: Health
Care Decisionmaking
Advance Directive
Durable Power of
Attorney for Health
Care
Living Will
Selection of Agent
Selection of Successor Agent
HEFFNER &ASSOCIATES
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Lifetime Planning for Janet:
Financial Decisionmaking
Joint account not recommended
Durable Power of Attorney
Selection of Agent (aka, “Attorney in
fact”)
Also successor Attorney in fact
HEFFNER &ASSOCIATES
ELDER LAW
Lifetime Planning for Janet:
Financial Decisionmaking
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
HEFFNER &ASSOCIATES
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Post-death planning for Janet
Will—requires probate
Selection of Executor—same person
generally as agent under financial DPOA
Revocable Trust—if “funded” will avoid
probate for those assets
Still need Durable Power of Attorney for
finances
HEFFNER &ASSOCIATES
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What happens if Janet needs long-
term care?
Medicare--limited long term care (LTC)
coverage 20 days full payment, up to 80
additional days with co-pay ($152/pay)
Medicare LTC coverage initially
applicable if individual has a three day
prior hospital admission & continues to
require skilled care
After that….
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Private Pay costs for nursing home
care
•Rhode Island: $8516/month
• Genworth 2013 cost of care survey
(www.genworth.com/corporate/about-
genworth/industry-expertise/cost-of-care.html)
•Massachusetts: $10,493/month
•Connecticut : $12,638/month
HEFFNER &ASSOCIATES
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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
HEFFNER &ASSOCIATES
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Resources
Excluded (Single Person)•Home (equity value limit:
$534K) 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
HEFFNER &ASSOCIATES
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Income-Single Individual
All gross income must be used for cost of care,
minus:
•Gross Social Security
$50/month personal needs allowance; and
$Pro-rata monthly payment of Medicare
supplement insurance (e.g. Blue Cross Plan 65)
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Meet Pat & Bill
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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)
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Income-Married Applicants
Community Spouse Allocation (“spousal slide over”)
may be allowed as additional deduction from IS
income. Two factors:
•CS gross income; and
•Amount of spousal allowance, consisting of
Income of “community spouse”,--whether regular
(e.g. Social Security), or periodic (e.g., inheritance)
is not a factor in eligibility of institutional spouse
(IS), except in following calculation
•Gross Social Security
•Basic monthly allowance to CS (currently $1,891.25);
and
•If there are shelter expenses, and if so whether
standard shelter allowance or excess shelter allowance
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Transfers of AssetsAny transfer occurring on or after February 8, 2006
is subject to five year lookback periodQ: 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
Ex: Applicant’s spouse “sells” summer cottage with
FMV of $100K to child for $25K.
Uncompensated transfer: $75,000
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Potential additional tool for Pat and Bill
Irrevocable trust
Unlike revocable trust—actual transfer of assets
Subject to five year loopback period
Key question: probably of both Pat and Bill making
it through five year loopback period
HEFFNER &ASSOCIATES
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Mark B. Heffner, Esq. , CELA
Heffner & Associates
615 Jefferson Boulevard
Warwick, Rhode Island
401-737-1600
www.hefflaw.com
National Elder Law Foundation
www.nelf.org
Provides interactive state map of Certified
Elder Law Attorneys (CELA) in each state