The Medicaid Medically Needy “Spend-Down Program” – What You Need to Know
The Medicaid Medically Needy "Spend-Down Program" - What You Need to Know

The Medicaid Medically Needy “Spend-Down Program” – What You Need to Know

The Medicaid Medically Needy “Spend-Down Program” – What You Need to Know.

If you’ve been denied Medicaid benefits because you have too many assets or too high an income, don’t give up. There are available programs that may enable you to qualify for Medicaid benefits, despite this setback. Each state may offer different programs, and the Affordable Care Act (ACA) has added new ways to obtain coverage. This article addresses the “spend down program” offered in every state.

Medicaid Spend-Down Program – The Basics

To qualify for Medicaid benefits, your income and assets may not exceed a certain amount set by law. If these items do exceed the legal limits, you may still qualify after a spend-down period. The medically needy spend-down program helps individuals over the age of 65, and some younger individuals with disabilities. To be eligible for this program, you must not be receiving public financial assistance.

Exempt & Non-Exempt Assets

It is not necessary to sell off everything you own to qualify for the spend-down program. You may keep a certain amount of “exempt assets,” such as the home you live in, your car (used for transportation), household furniture, clothes, jewelry and other personal items. None of these assets affect your eligibility, regardless of their value (unless you have high equity, say $1 million in an asset, in which case you may need to spend that down).

Non-exempt assets, on the other hand, do affect your eligibility for the spend-down program. These assets include bank accounts, stocks, investments, and cash over $2,000 for an individual or a higher amount for a married couple.

Amount of Income You Can Have to Apply

It does not matter how much income you have when you apply. The more income you have, though, the more medical expenses you must incur before your coverage can start. The way you spend down this income is by spending it on medical expenses, until you reach the income requirements for Medicaid. Interestingly, you just need to incur medical costs. You don’t have to actually pay them.

In addition, you can pay down accrued debt to spend down your income. Therefore, paying down credit card bills, car payments, or mortgage debt can count towards your spend down. Another tactic you can use, is to pay excess monthly amounts on old medical bills.

Seeking Professional Assistance

Medicaid programs are different in each state, and the laws change frequently. If done wrong, you could end up incurring penalties instead of obtaining benefits. It may be a good idea to enlist the help of a Medicaid lawyer or elder law attorney to walk you through the process in a way that will avoid these types of penalties.

Resources:

National Council on Aging. “Benefits Checkup” (Accessed November 28, 2019) https://www.benefitscheckup.org/fact-sheets/factsheet_medicaid_la_medicaid_spend_down/#/

U.S. News and World Report. “How a Medicaid Spend Down Works.” (Accessed 28, 2019) https://money.usnews.com/money/retirement/baby-boomers/articles/how-a-medicaid-spend-down-works

 

What Should I Know About Finances for My New Blended Family?
What Should I Know About Finances for My New Blended Family?

What Should I Know About Finances for My New Blended Family?

What Should I Know About Finances for My New Blended Family?

The blended family is a family dynamic that is increasingly common, which can make addressing financial issues much more of a challenge. In a blended family, a one or both spouses have at least one child from a previous marriage or relationship, and together they create what’s known as a new combined family.

CNBC’s recent article, “4 ways to help blended families navigate finances,” reports that a staggering 63% of women who remarry come into blended families, with 50% of those involving stepchildren who live with the new couple, according to the National Center for Family & Marriage Research.

The issues in a blended family can be demanding, so couples often delay having the “money talk.” This is an important piece of the family financial puzzle. Let’s look at some of the ways you can work on that puzzle:

  1. Get expert advice. Talk to an estate planning attorney about the specifics of your blended situation.
  2. Create a plan for merging relationship and money. Understanding the role money plays in combining two families is critical to the success of a healthy blended household. A basic step may be to draft a detailed plan of how the couple is going to care for one another in their marriage and in their family, in addition to how they will care for one another’s children. Try to determine the ways in which money plays a role in coming together. The more you can communicate and the more that you can exhibit a united front, even from a financial perspective, the stronger a couple will be.
  3. Collect documentation and monitor your money. It’s good to understand the work involved with the preparation and paperwork after divorce and remarriage. You’ll have a divorce decree or a domestic partner agreement, as well as instructions on child support and alimony. You also need to keep track of all the different financial accounts.
  4. Discuss your financial issues regularly. First, ask about the financial obligations to the ex-spouses. Make sure both spouses understand if there’s child support and/or alimony, as well as responsibility for paying for housing or their utility bills.

Reference: CNBC (November 23, 2019) “4 ways to help blended families navigate finances”

What Should I Know About Finances for My New Blended Family? Have the money talk; get expert advice about your specifics; create a plan for merging relationship and money; collect documentation and monitor your money and discuss financial issues regularly.

Are You Forgetting this Estate Planning Document?
Are You Forgetting this Estate Planning Document? Health Care Proxy

Are You Forgetting this Estate Planning Document?

Forbes’ recent article, “Two-Thirds Of All Americans Are Missing This Estate Planning Document,” explains that a health care directive is a legal document in which an individual writes down his decisions for caregivers in the event of illness or dementia and makes instructions about end of life decisions. It can also provide guidance on how caregivers should handle the body after death.

Health care directives are also called living wills, durable health care powers of attorney, or medical directives, but they all serve the same function, which is to provide guidance and direction on how a person’s medical and death decisions should be made.

Despite the importance of a health care directive, a 2017 study found that only 33% of all Americans have one.

A critical decision in a health care directive is selecting an agent. This is a proxy who acts on your behalf to make decisions that are consistent with your wishes. It’s important to pick an individual whose values are aligned with yours. This is your advocate on decisions, like if you want to have treatment continued or just be kept comfortable in palliative care.

Once you choose an agent, review your directive with her. This will give her guidance if and when the need for her to step in arises.

The agent’s role in the health care directive doesn’t end at death but continues to ensure that your post-mortem wishes are carried out. When the person dies, the agent takes control of the body. Prior to funeral plans, the agent must make certain that any organ donation wishes are carried out. This decision is usually shown on a person’s driver’s license, but it’s also re-stated in the health care directive.

After the donation wishes are carried out, the agent helps to make sure funeral wishes are handled properly. These instructions can be detailed in the health care directive.

Are You Forgetting this Estate Planning Document? With a health care directive put in place, you make things easier for your family and loved ones.

Reference: Forbes (December 13, 2019) “Two-Thirds Of All Americans Are Missing This Estate Planning Document”

 

I’m Rich! What Should I Do Now?
I’m Rich! What Should I Do Now?

I’m Rich! What Should I Do Now?

I’m Rich! What Should I Do Now? WMUR.com’s recent article, “Handling unexpected wealth,” says the first thing to do is to really step back and review your finances.

Did you win the lottery or a game of high stakes poker? What about an inheritance? Depending on how much you have received, you could be in a very different place financially. You should take a look at your net worth and cash flow.

What these items show you and how much access you have to your new funds will affect the extent to which your finances might change. Years ago, I represented a client that won a million dollars. The pay out was $50,000.00 per year for twenty years. A wonderful win but just shy of life changing money.

You might have received your assets through a trust, and the trust provisions will dictate how you get those assets. Depending on these instructions, you might not have control over the funds. It’s the trustee who will decide this based on the trust document.

Get a copy of the trust and review the terms with an estate planning attorney. This will give you some idea of the income the trust will provide you.

It’s a different set of issues when inheriting or receiving stock as a gift. Look at your investment strategy to see if the stock has a place in it.

This will help you decide whether to keep the stock or sell it. Instead of stock, you might have inherited real estate. The decision here is the same as to whether to sell the property or keep it.

Your inheritance may also be plain old cash. Think about your future needs and how long your money must last.

Take the time to come up with a well-thought-out plan for both your current needs and your future goals.

Finally, any newly acquired money can also affect your estate plans. Go through your plan and strategies with an estate planning attorney.

Reference: WMUR.com (December 12, 2019) “Handling unexpected wealth”

 

How Can I Protect My Real Estate Investments?
How Can I Protect My Real Estate Investments?

How Can I Protect My Real Estate Investments?

How Can I Protect My Real Estate Investments?

How can a person protect a real estate asset to ensure its value? That’s what Wealth Advisor’s recent article, “8 Reliable Ways to Protect a Real Estate Asset,” asks. The article suggests that you look at this guide for several ways to keep your investments valuable.

  1. Insurance. This is one of the most popular asset protection strategies in real estate. The protection you select for your property depends on the real estate type. You can protect your home with a homeowner’s policy and your commercial property with a business policy. Insurance will protect you against many catastrophic events.
  2. Limited Liability. An LLC for rental property can protect your personal assets from potential lawsuits. With limited liability, your home is shielded from litigation concerning your business. One strategy is to buy a house with an LLC and rent it to yourself to minimize financial risks. This will limit the odds of personal real estate asset seizure. However, consult with an attorney to avoid charges on fraudulent practices. You should also place your commercial real estate properties in different LLCs, so if one asset faces a risk, the remainder of your property will be protected.
  3. Anonymous Land Trust. You can create an anonymous land trust to avoid legal implications on your real estate property. With a trustee, you don’t need to have your name on records, so putting your house in a trust will protect your investment. This may discourage anyone from attempting to pursue a lawsuit against you.
  4. The Titling of Assets. This can also be a great protection strategy. If your spouse is an equal tenant, it provides you with an indivisible interest, so if your spouse is involved in litigation, creditors can’t claim your house because you have an interest. Ask your estate planning attorney about how this works in your state.
  5. Protection Through Debt. Debt is an affordable way to protect your real estate property because the available equity is insignificant. The low income may also discourage creditors from going after your property.
  6. Eliminating Assets. You can get rid of your real estate asset, if creditors are on your tail. A lawsuit against you can’t affect the property that’s not under your name. Ask your attorney about transferring ownership of the property to irrevocable trusts.
  7. Homestead Exemptions. In some states, the homestead laws provide full or partial protection of home equity. If the exemption is high, think about increasing your mortgage payment to promote fund protection.
  8. Avoid Risky Situations. As a real estate investor, do your due diligence. Be certain that your review contracts carefully and work with an attorney.

How Can I Protect My Real Estate Investments? Consider these property protection strategies to ensure that your real estate assets remain secure.

Reference: Wealth Advisor (November 19, 2019) “8 Reliable Ways to Protect a Real Estate Asset”

 

Caring for Your Aging Parents – Top 5 Questions and Answers
Caring for Your Aging Parents - Top 5 Questions and Answers

Caring for Your Aging Parents – Top 5 Questions and Answers

Caring for Your Aging Parents – Top 5 Questions and Answers.

Caring for aging parents can be stressful. It’s a new experience, and one that you’re not always prepared for. The good news is that there are plenty of resources out there to help you navigate this new chapter in your life. To help get the process started, we’ve curated the top 5 questions that people have about caring for an aging loved one and have provided answers to those burning questions.

Question #1 – How do I ensure their legal affairs are in order?

No one likes to think about, much less talk, about the end of their lives. Unfortunately, burying your head in the sand can lead to costly and frustrating situations, once your loved one has passed. Of course, coming out and asking if your parents have an estate-plan in place may not be the most tactful approach. Consider these icebreakers to get a conversation started:

  • “Bob and I just met with our estate planning attorney last week to update our will. Do you and dad have an estate plan in place?”
  • “I was so troubled to hear that Uncle Harry passed and left Aunt Hilary with such a financial mess. Do you think you and mom have your affairs, so that doesn’t happen to one of you?”
  • “We just sent Jenny off to college and our attorney recommended a HIPAA release and power of attorney, just in case something happens to her and we need to step in. Do you have a power of attorney?”

Question #2 – How can I gain access to their health information?

It’s not uncommon for parents to withhold healthcare information from their children. This is often because they don’t want to worry their adult children or grandchildren. It may also be because they don’t want to admit that they have a serious healthcare issue. Sometimes, this lack of disclosure can lead to lapses in care.

If you believe you need access to your parents’ medical records, you have a few options.

  • Go to the doctor with your parents. Ask questions.
  • Ask your parents to make you their personal representative for healthcare matters.
  • Ask your parents to request in writing that medical records be sent to you.

If your parent is incapacitated and unable to give consent, the healthcare provider may share personal healthcare information, if they believe that disclosure is in your parent’s best interest.

Question #3 – Is it time to move them to a care home?

When the family home becomes unsafe for one or both of your aging parents, it may be time to consider some sort of alternative arrangement. Nursing homes are not the only alternatives, however. You might consider an incremental approach that includes things like:

  • In-home Care
  • Senior Daycare
  • Assisted Living Communities
  • Additional Dwelling Units

Discuss these options with your parents and other family members to determine what is best for the whole family.

Question #4 – Should they be driving?

Driving is one of the most important activities to one’s independence. Losing the ability to drive is naturally one of aging people’s top fears. Therefore, of course, you want to let them drive as long as it is safe for them to do so. Once reflexes begin to slow, flexibility declines, hearing levels decrease and peripheral vision narrows, it’s time to start assessing the safety of their driving.

How do you assess their abilities? Take a drive with them. See how they do with highways, traffic, driving at night and during inclement weather. It may not be that they need to give up driving all at once. Perhaps night driving becomes a problem at first. If that’s the case, ask them to agree to let you drive at night.

Question #5 – Am I partnering—or parenting my parents?

Often, when adult children are faced with caring for their parents, the go-to position is one of “parent.” It may be one you’re naturally disposed to, because you have children of your own. It could also be that you’re simply mirroring the role your parents played with you. While natural, this may not be the best approach, because your parents may perceive this new scenario as you taking their independence from them.

Instead of dictating terms and telling them how it’s going to be, reframe your roles from parent-child to partnership. Just because they may be lower on energy or losing memory function, doesn’t mean they can’t make decisions. Talk to them like the adults they are, making sure that each of you is maintaining boundaries and autonomy. You may find them more receptive to your help, which will make things much easier in the long run.

Caring for Your Aging Parents – Top 5 Questions and Answers

Resources:

The Healthy. “8 Questions You Must Ask to Keep Your Aging Parents Safe and Healthy” (Accessed November 29, 2019) https://www.thehealthy.com/healthcare/caregiving/questions-to-ask-your-aging-parents/

HHS.gov. “Under HIPAA, when can a family member of an individual access the individual’s PHI from a health care provider or health plan?” (Accessed November 29, 2019) https://www.hhs.gov/hipaa/for-professionals/faq/2069/under-hipaa-when-can-a-family-member/index.html

 

Top 6 Questions (and Answers) about Conservatorships and Guardianships
Top 6 Questions (and Answers) about Conservatorships and Guardianships

Top 6 Questions (and Answers) about Conservatorships and Guardianships

Top 6 Questions (and Answers) about Conservatorships and Guardianships.

What is a guardian?

When someone becomes incapacitated due to illness, injury or disability, the court appoints a guardian to handle healthcare and certain non-financial decisions for that person. A guardian can be anyone over the age of 18, but must also be able to show that they are qualified to make these decisions for their loved one.  A guardian is not necessarily the person who is the caregiver over the incapacitated individual.

What is a conservator?

A conservator is appointed by the court to make financial decisions for an incapacitated person. In some states, those who are appointed “conservator of the estate” are those who make financial decisions. Those who are appointed “conservator of the person” handle the same issues as a “guardian.” Conservators can be expensive, as is the process to obtain one. There is also the potential that the incapacitated individual may be taken advantage of. To avoid a conservatorship, designate a power of attorney for your financial and medical care.

New York uses the frame of guardian for person or for the property and one person can be both.

Does my elderly loved one need a guardian?

If your family member is unable to make healthcare or financial decisions on her own, due to an injury following an accident, an illness, or disability, and she has not designated a healthcare power of attorney, she will need a guardian.

When is a conservator more appropriate than a guardian?

In some cases, someone may be perfectly capable of making her own healthcare decisions, but are unable to manage her finances. In this case, a conservator would be more appropriate. If an individual cannot make financial or healthcare decisions, both may be appropriate.

Who does the court appoint as guardian or conservator?

A court will appoint the person it deems most competent to fill the role of conservator or guardian. In general, the person must be over the age of 18. The court’s first choice is a spouse, or other close family member. If none of those is available or is unwilling to serve, then they may consider extended family or friends. If those are unwilling or unavailable, then the court will appoint a neutral third party, such as an attorney, to act as conservator or guardian. In New York, the Court maintains a list of qualified persons for that role.

How do I relinquish guardianship over my wife?

To relinquish guardianship over any loved one, you must go to court and petition to do so. It is best if you have someone else in mind to take over when you submit your petition, to ensure your loved one’s needs are met.

Resources:

ElderLawAnswers. (Accessed November 29, 2019) https://www.elderlawanswers.com/questions-and-answers/Guardianship/Conservatorship

LawHelp.org. (Accessed November 29, 2019) https://www.lawhelp.org/dc/resource/guardianship-and-conservatorship-frequently-a

These were the Top 6 Questions (and Answers) about Conservatorships and Guardianships. If you have additional questions, please let us know.

Q & A – Medicaid for Nursing Home Care
Medicaid for Nursing Home Care

Q & A – Medicaid for Nursing Home Care

Q & A – Medicaid for Nursing Home Care.

As we approach our third act, new terminology comes into our daily lives that we may have heard before, but maybe never gave much thought to. Terms like Medicare, Medicaid, Social Security, Long-Term Care, and so on, can become sources of anxiety, if we don’t truly understand them. Therefore, today we’re answering some of the fundamental questions about Medicaid for nursing home care, in the hopes that we can alleviate at least one source of anxiety for you.

Question #1 – What is Medicaid?

Medicaid is a state and federal government-funded program that provides medical services to financially eligible individuals. Unlike Medicare, you do not have to be elderly to qualify for Medicaid, and many elderly individuals receive Medicaid benefits, including nursing home care. Every state administers its own version of Medicaid. For more information on Medicaid programs in your state, visit the Medicaid website, and select your state.

Question #2 – What are Medicaid’s basic financial eligibility requirements for nursing home care?

To determine your eligibility for nursing home benefits under Medicaid, the government will look at your income and resources in a given month to ensure you are within the legal limits for Medicaid benefits. To qualify for Medicaid, your monthly income must be less than the Medicaid rate for nursing home care, plus your typical monthly healthcare expenses. If you are eligible, you are allowed to keep $70 of your income for personal use. The rest is taken to pay for your care.

Question #3 – What is the Medically Needy Program under Medicaid?

For individuals that may exceed the financial limits to receive Medicaid, they may still qualify to receive Medicaid benefits under the medically needy program. This program allows individuals with medical needs to “spend down” their income to acceptable rates, by paying for medical care for which they have no insurance. For individuals over the age of 65, states are required to allow you to spend down your income regardless of medical necessity.

Question #4 – What resources can we have if my spouse is applying for Medicaid?

When a married couple applies for Medicaid, both spouses’ income and resources are included in the qualifying calculations. You may have all of the “exempt” resources, like an automobile and a house, along with one non-exempt item that does not exceed a set value, such as cash or investments. Once your spouse qualifies for Medicaid, after one year, all excess income and resources must be transferred to the non-Medicaid-benefitted individual. That spouse may also accrue income and resources over and above the limits that Medicaid imposes on the benefitted spouse.

More information can be found on the Medicaid website, including requirements and benefits information for the state in which you reside.

If you have any questions about your situation, please contact the office to speak with me.

References:

Medicaid.gov. (Accessed November 28, 2019) https://www.medicaid.gov/medicaid/index.html

 

How Estate Planning Keeps the Peace for Blended Families
How Estate Planning Keeps the Peace for Blended Families

How Estate Planning Keeps the Peace for Blended Families

How Estate Planning Keeps the Peace for Blended Families.

With the IRS’s announcement that the first $11.58 million (in 2020) of a taxable estate is free from estate taxes, most people won’t have to worry about paying estate taxes. Therefore, what’s the biggest reason to have an estate plan?

Earlier this year, a survey was conducted at the 53rd annual Heckerling Institute of Estate Planning, a prestigious legal and financial conference that attracts leaders in the field of estate planning. For the second year in a row, family conflict was identified as the biggest threat to estate planning, reports Investment News in the article Reducing potential family conflicts.”

Statistics show that there are more blended families in the U.S. than ever before.

The increase in blended families has led to an increase in family conflicts. While open and honest communication is the key to any kind of conflict resolution, it’s particularly sticky when it comes to blended families. For most families, it’s a good idea to talk openly about estate plans, rather than waiting until one of the spouses has passed and explaining to the biological and stepchildren how the assets are being distributed. Discussing the estate plan before anyone dies, at the very least gives everyone a chance to voice their opinions, even if no changes to the spouse’s plans are made.

How do you minimize conflicts within blended families? One way is with a prenuptial agreement, which is executed before marriage and clarifies the financial rights of each spouse, in the event of divorce or death. This is especially useful, when there is a disparity in wealth or age between the couple.

However, not everyone is willing to have a prenup. And even if they do, family conflicts can still crop up. Let’s say Glenn and Maggie are married, each with children from a previous marriage. Glenn wants to give his entire estate to Maggie when he dies. If Glenn dies first, there’s no legal reason for Maggie to give any of Glenn’s assets to his biological children.

There are any number of solutions. If Glenn really wants to cut his children out of his will, he can talk with them and explain his thinking. He can also have an estate planning attorney include a “no contest” clause in his will. If any named beneficiary challenges the will, they will lose any inheritance and are treated legally, as if they have predeceased the decedent. Glenn could also use a revocable living trust, which would avoid the estate being probated and deny the children an opportunity to challenge his will.

A better solution would be to craft an estate plan that benefits both Glenn and Maggie’s children. Glenn’s children could receive a partial outright distribution when Glenn dies, with the remaining estate passing to Maggie. A trust could be created for Maggie’s benefit, but the remaining trust assets could go to Glenn’s children when Maggie dies.

There are many different ways to resolve this issue with an eye to minimizing conflict among children in blended families. If the parents are truly invested in keeping their children together as a family, it is worth the effort to create an estate plan that cares for the spouses and all of the children. An estate planning attorney can create a plan to accomplish your goals for the entire blended family.

Reference: Investment News (December 9, 2019) Reducing potential family conflicts