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Medicaid Spend Down Rules

Posted on: February 21, 2017 at 3:44 am, in

Estate Street Partners offers advanced financial advice to ensure maximum asset protection from lawsuits, divorce and Medicaid spend down

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And now I would like to talk to you about elder care. On June 30 of 2009, the government has mandated rules and regulations on restricting the transfer of assets of the elderly. There is now a five year look-back provision if you apply to Medicaid to qualify for the nursing home – the Medicaid nursing home. These restrictive laws are intended to impoverish the healthy spouse.
Before you can qualify to receive, or to enter a nursing home, you must spend down your assets, which means that, if you are of the age where the nursing home may become an issue, in order to protect your wife, or the healthy spouse (i.e. you or your wife, whoever is not sick) you must do Medicaid planning 5 years earlier than the date that you went in to the nursing home. If you are the son or daughter of elderly parents, you should become fully aware of these very restrictive rules where the government is going to ask you to spend down all of your assets before you can become qualified for Medicaid eligibility. So if all of the assets are spent on the sick spouse, the healthy spouse has no place to go, so you, the son and daughter, will have to step in and support your mom or your dad.

You can avoid all the Medicaid spend down rules with proper estate planning. You can avoid the spend down of assets to cover for the costs of the nursing home by implementing the UltraTrust® irrevocable trust at least five years before the sick spouse enters a nursing home and at least five years before the application of Medicaid eligibility. Since you never know when you will need to apply for Medicaid and when your dad or mom or sick spouse will enter a nursing home it’s best to implement the UltraTrust® irrevocable trust for surefire asset protection.
Continue to read part 10 of 11 on the Ultra Trust® benefits as one of the best irrevocable trust plans for asset protection here: What is Ultra Trust® irrevocable trust asset protection?
Rocco Beatrice, CPA, MST, MBA, Managing Director, Estate Street Partners, LLC.
Mr. Beatrice is an asset protection award winning trust and estate planning expert.
To learn more about irrevocable trusts and senior elder care visit:

Eldercare: Caregiving, Nursing Home, Medicaid, Living Wills

Posted on: February 7, 2017 at 11:42 pm, in

Eldercare strategies are discussed. Who will provide the eldercare? Does Medicaid pay for eldercare? How do legal documents such as a Will, Living Will, Financial Directive and Medical Directive affect eldercare? What is Durable Power of Attorney in eldercare estate planning?

Elderly care is an event that most children do not wish to think about. No one wants to think about his or her parent growing old. We look to our parents for guidance and support, but there comes a time when the parenting roles reverse.
It is important to discuss future events with your loved ones and develop a long-term plan for their care for when they become unable to care for themselves. Developing an Eldercare checklist is a proactive way to ensure your loved ones whether parents or grandparents receive the level of care they need and services they want, or, in the case of artificial nutrition, they may not want.
There are several key points and strategies you will want to include on your Eldercare checklist:
  1. What level of eldercare is needed, and where will this care be given?
  2. How will you pay for the eldercare? The medical costs of eldercare.
  3. What will be done with your parents’ or grandparents’ assets while they are receiving eldercare?
  4. Are all legal documents including the Will and Living Will current? Have your parents’ or grandparents’ Wills and Living Wills been reviewed recently by an Attorney? What is an Advanced Financial Directive? What is an Advanced Medical Directive in eldercare estate planning?
  5. Have your parents or grandparents designated a Durable Power of Attorney?
Making sure you have answers to these questions for your parents or grandparents eldercare early on will avoid confusion and distress later. Don’t wait until there is a tragedy to make plans that will affect how your loved one spends the rest of their life. For the purposes of this article we will assume “loved one” to mean a parent or grandparent.

1. Caregiving and Eldercare

Where will eldercare be given, and by whom?

Informal Caregiving

There are two types of caregivers: informal and formal. An informal caregiver might be a spouse or child, and these caregivers do not receive direct payment for their services. Usually payment is made through services exchanged such as food or housing at no charge while caring for your parent.

Formal Caregiving

A formal caregiver is usually employed by an agency to provide quality care in the comfort of your home. If the formal caregiver is not associated with an agency, it is important to conduct a thorough check of references to ensure you are hiring a quality professional.
It is important to inform all formal caregivers of the responsibilities associated with your parent’s needs. If your parent needs assistance in and out of a wheelchair, a hired caregiver should be able to perform this task without harm to your parent or to him/herself. To avoid injury to all persons involved, informal and formal caregivers should receive training on proper techniques for lifting and moving, proper use of bedpans, and how to maintain good hygiene for a parent confined to bed.

Location of Eldercare for Your Parents

There are many options for the location of care provided. Most people would agree that living our their remaining years in the comfort of home is more appealing than living in a state facility. If your parent wishes to receive care in their home you can make home modifications, such as a wheelchair ramp or seat in the shower, to accommodate their changing needs. You can also hire a formal caregiver to come and assist your parent with daily activities such as bathing, eating, taking medications, or regular exercise.

Considerations of Assisted Living Houses or Nursing Homes

If it is not possible for your parent to remain at home, you can choose to place them in assisted living houses or a nursing home. Before placing your loved one in a facility, you should thoroughly check both the location and the staff. Make yourself familiar with required paperwork ahead of time to prevent delays when it comes time to move in, and, if possible, make several unannounced visits to oversee daily activities.
You should check if the facility is regulated by the state, and request to see any licenses they have for providing eldercare. Find out how the staff is trained and if they are required to have certification to work there. You should consider the cost of the facility and the living accommodations your parent will be provided.
Additional considerations when choosing a facility might be types of activities offered to residents and the quality and type of food provided. While no place will be perfect, you should choose a facility that makes your parent feel as comfortable as possible away from home.

2. Medical Costs of Eldercare and Medicaid

Not many insurance companies are willing to pay for long-term care. It is important to check the details of your parent’s policy and read the fine print for restrictions. For example, Medicare will not pay for long-term care but it will pay a very short-term benefit. However, Medicaid will pay for long-term care but only if your parent receives care in a Medicaid facility.
If you plan far enough ahead, you can begin setting aside money so you can afford to provide long-term care to your parent at home. You should consult a financial advisor or estate planner to go over your parent’s bank statements and assets to determine how long their current funds will be able to provide medical care, and based on this assessment you can establish a savings plan to make up the difference needed for long-term eldercare. When figuring in additional savings you need, keep in mind that you will also need to continue paying any current bills your parent might have.

3. What to do with Your Parents’ Assets during Eldercare

Before you rush off and put your parent’s house on the market, make sure you have discussed where they want to receive their long-term care. It would be quite devastating for your parent to come home from a hospital stay to discover you had sold the house and moved their belongings into a nursing home.
You should also ask your estate planner or financial advisor which of your parent’s accounts you should withdraw money from to help offset costs. Some accounts, such as annuities, carry penalties for early withdrawal and may require you to pay taxes on income earned through these accounts. Also, once you begin withdrawing money from an annuity you cannot stop payments.

Legal Issues of Eldercare

Hopefully, your parent has written a will and made you aware of its location. A Will should be reassessed by an Attorney every few years to make sure all the people listed as beneficiaries are still alive, and that your parent still wants them to receive a portion of their estate.
Moreover, your parents should have an irrevocable trust as part of their estate planning eldercare needs which will avoid the high expenses of probate, reduce estate taxes and possibly eliminate some earned income and your parents will gain the benefits of asset protection. Speak with a qualified and good estate planner such as Estate Street Partners who can guide you through this complex process.

4. Importance of Living Will, Advanced Financial Directive and Medical Directive in Eldercare Estate Planning

You should also council your parents on drafting a Living Will in the event they are unable to speak for themselves. Learn more about Living Wills and Advanced Financial Directives and Advanced Medical Directives by going to our website. The Advanced Financial Directives and Advanced Medical Directives are extremely important in eldercare estate planning when your parents cannot speak for themselves and will protect their financial and medical wishes.

5. Durable Power of Attorney (DPOA) and Eldercare Estate Planning

You should know ahead of time where these documents are before an emergency arises to ensure that your parent’s wishes are followed. Having a DPOA allows someone your parents trust to act on their behalf and make legal and financial decisions for them, including the transfer of valuable assets, if they become incapacitated.
Read more articles on asset protection with Medicaid, how to hide your assets, Advanced Financial Directive, Advanced Medical Directive, Living Will, Medicaid Estate Planning and Nursing Home Spend Down:

How the Nursing Home Spend-Down Program Affects You and Your Family

Posted on: February 1, 2017 at 11:39 pm, in

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Your Federal Government has mandated (as of June 30, 2006) that before you qualify for nursing home care, you must spend-down all of your assets. These restrictive new rules are designed to impoverish the healthy spouse. They have mandated a 5 year look-back, that means you better have done something to protect your assets 5 years before you become sick.
Without careful attention your accumulated wealth can disappear before your very eyes, because you were unlucky in your health. If either you or your spouse get sick, before you can ask for any government assistance, you must spend all of your accumulated wealth, leaving your healthy spouse without any resources to keep on living the lifestyle you and your spouse are normally accustomed to.

Good health, although very important and a blessing, cannot be relied upon as we all know no one can predict the future. But you can do something about this now to ensure that your wealth is limited to how much the government can expect from you.
There is a method to insulate your assets from the nursing home mandated spend-down. So what is this secret, you ask? Simple. It’s called an irrevocable trust.
So what is an irrevocable trust? An irrevocable trust can reposition your assets to allow you control and limit the amount that can be demanded of the nursing home spend-down mandate to reduce your hard-earned wealth. Assets that qualify for repositioning are your primary residence, your vacation spot, your CD’s, your stocks, bonds, and other investments.
By “repositioning your assets” (transferring your assets) to an irrevocable trust you legally no longer own the assets, therefore no one can demand or sue you for those assets. Even more important, if you no longer own your assets you don’t qualify for the expensive probate process and you do not have to pay estate taxes.
Moreover, if you have a will, “your will” won’t protect your assets from the nursing home spend-down, it will not avoid probate and it will not avoid taxes on your estate. So, in essence, an irrevocable trust is ideal in many instances.
A solid, personally developed and well-planned irrevocable trust by a team of competent professionals such as accountants, lawyers and financial planners can avoid these more than mere unpleasant events. It can literally save you and your family’s fortunes and life-savings.
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Eldercare with Medicaid: Senior Transfers Assets before Nursing Home Care

Posted on: January 26, 2017 at 1:47 am, in

ULTRA TRUST® – Medicaid Benefits

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“The Deficit Reduction Act of 2005 (S.1932) [DRA]” signed by the President on Feb. 8, 2006. The Act established a June 30, 2006 deadline for the Secretary of Health and Human Services (HHS) to release regulations for states to come in compliance with the new law.
Among other provisions, … the new law places severe new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care.
The law extends Medicaid’s “lookback” period for all asset transfers from (3) three to (5) five years, and changes the start of the penalty period for transferred assets from the date of transfer to the date when the individual transferring the assets enters a nursing home and would otherwise be eligible for Medicaid coverage.
In other words, these new Medicaid rules are specifically designed to “impoverish the healthy spouse.”
This is an extreme. If you’re approaching the Medicaid Nursing Home Spend-down Provisions…you have to pay attention to these new very restrictive regulations. …The healthy spouse can find him/herself out in the street. If you have parents in this predicament, YOU better take note because you will end-up supporting your parents, specifically when they now have substantial assets.

Protect Assets from Nursing Home Costs

Posted on: January 24, 2017 at 3:59 am, in

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Protecting assets from nursing home costs is the latest challenge for seniors where government is demanding an uncapped spend down of their asset if one of them falls victim to a nursing home. Canada and some other countries offer this benefit as part of their rights, since they contributed to their Medicaid system during their working years.
The United States apparently, is going the route of demanding that seniors cover their own expenses, even if they carry private plans. What hurts the most is that there’s no cap on what has to be the spent down under the new provisions mandating that all states adopt the new federal guidelines on nursing home eligibility or lose their federal funding.

The evidence is clear, the baby boomers generation cannot expect government to cover their medical and nursing home costs. They have begun with existing seniors, who before they can even qualify for the nursing home cannot move their assets (asset protection) without the 5 year look-back, it was 3 years.
You don’t need a fortune teller to point out, that if one of you gets sick, your hard earned assets will vaporize-right before your very eyes. Even if you planned carefully for your retirement, a catastrophic medical event will leave both of you devastated, one sick and one without any resources.
Planning for your reducing your nursing home costs has to be done early and definitively 5 years before you plan to get sick. Any string attached to your planning will void your plan to protect your assets from the nursing home costs. Your plan must be irrevocable. You cannot be the Indian giver, or the kid with the basketball making-up the rules as he sees fit whereby if he doesn’t like the way the game is progressing takes back the basket ball and goes home to his mommy.
Any asset transferred from you to someone else, some legal structure has to be at the “fair market value” the price paid by a willing buyer and a willing seller neither under a compulsion to buy or sell, each acting in their best interest. If it’s a taxable gift, it has to be justified with a legitimate appraisal and taxes have to be paid on the gift by the transferor, the receiver of the gift is always tax-free. If it’s a sale, the cash has to be exchanged. There are methods by which no cash need to change hands and still be a legal exchange. It’s called the “private annuity.”
A private annuity is nothing more than a contract between the guy with the money and a custodian whereby in exchange for the cash the custodian promises to pay over the transferor’s lifetime a certain amount, thus limiting the amount that can be used to defray the cost of the nursing home.
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