CRISIS MEDICAL & NURSING HOME PLANNING
Louisiana Elder Law Attorney & Medicaid Planning
No One Knows What The Future Will Bring
Quality of Life. Quality of Care. Asset Protection.
Is it time for you, or a loved one, to go into a nursing home?
Most people answer, “No”, because who wants to think about such things! The reality is seventy percent (70%) of Americans over the age of sixty-five (65) will need long-term care. When you get right down to it, that’s 7 out of every 10 people who will need the support of a retirement community or nursing home.
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Planning Ahead Can Make A Considerable Difference In Quality of Life for You and Your Spouse.
Know The Rules. Know Your Options.
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How much will long-term care cost?
The average cost of nursing home care is $97,000 per year (Genworth Cost of Care Survey, June 2017). If the cost rises at 3% per year, in 20 years the average cost will be $176,000 per year! It’s essential to do the math before getting too comfortable with being able to afford long-term care costs.
Very high income or high net-worth people can plan to self-fund long-term care costs. For the rest of us, planning is crucial to avoid nursing home poverty!
How will you pay for long-term care?
Here are five (5) ways to pay for long-term care.
- Pay yourself (if you can afford it)
- Someone else pays (your children or long-term care insurance)
- Medicare (pays nothing after 100 days)
- Aid and Attendance Benefits (only for Veterans)
Improper planning can lead to financial ruin. Over 6 out of 10 nursing home residents receive Medicaid, which covers over fifty percent (50%) of ALL nursing home costs in America (Morning Star survey, 2018). Long-term care planning, including Medicaid planning, may be necessary to ensure a surviving spouse is not left behind in poverty.
No matter what your age, it is best to be prepared for an unexpected health crisis or illness. The first step in any crisis medical plan is education. The more you know, the better you will be able to protect your family.
Knowledge is power! Educate yourself by attending a FREE informational Workshop, or download our FREE brochure to help you begin the planning process:
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You Do Not Need to Wait 60 Months to Qualify for Medicaid!
Many people are under the mistaken belief that it takes 60 months to qualify for Medicaid. This 60 month period is often referred to as the “five year rule” or the “five year look-back period.” What this means is that Medicaid will review financial transactions that occurred within 60 months prior to filing a Medicaid application (the “snapshot date”) and impose a penalty (a delay in eligibility to receive benefits) for any transactions for less than fair value (i.e, gifts) that don’t meet an exception to the rules. Transactions which occurred more than 60 months prior to the “snapshot date” are not reviewed and escape scrutiny, so a transaction occurring 61 months before the snapshot date is safely off the radar.
When an unexpected health crisis occurs, we can still help! The art of proper planning is to know the rules and to leverage exceptions to those rules. One cannot predict when a health crisis will occur, so it is very common for long-term care needs to arise without warning or time to prepare. Not all transactions within the look-back period trigger a penalty (a delay in receiving benefits), so it is very possible to qualify for Medicaid without any penalty well within the look-back period, but only with the guidance of an experienced and qualified Medicaid attorney!
Be careful! A nursing home or hospital that offers to file a Medicaid application cannot provide legal advice on how to protect your assets and is under no obligation to do so. Filing an application for Medicaid before qualification could result in being ineligible to receive benefits for much longer than 60 months. In fact, the potential penalty is unlimited even though the look-back period is only 60 months! Consult a qualified Medicaid planning attorney before filing an application. Medicaid law is very complex, so not every attorney will have the experience necessary to render competent advice. You would not consult a general family doctor about a heart problem, so don’t make the same mistake with your lawyer.
Care, compassion and understanding are at the heart of the Elder Law practice at Theus Law Offices. Working hand-in-hand with individuals and families, our attorneys address the legal issues and financial implications surrounding long-term care. The experienced, competent and insightful team addresses key areas, including:
- Long-Term Care Planning, including Medicaid
- Asset Protection
- Veteran’s Benefits
- Healthcare and Financial Powers of Attorney
- HIPAA Releases
- Advance Healthcare Directives
Our attorneys will review your existing estate planning documents, suggest strategies to help preserve assets and assist in the Medicaid application process.
While pre-planning for long-term care expenses well enough in advance is always advised, if your loved ones already needs long-term care, we can still help. Though options may be more limited with a crisis plan when you need help quickly, our attorneys will find solutions to pay for long-term care costs in a crisis situation.
Knowing the devastating financial impact of the failure to plan in advance is not enough. You must act and there is no better time than the present. Ask us how we can help create a long-term care plan, special needs trust, or other legal structures to help preserve assets from nursing home poverty and ensure worry-free golden years.
Book your FREE 30-minute initial consultation where you get your questions answered and you decide the next steps. No pressure. No gimmicks. No legal jargon. Just friendly conversation.
FREQUENTLY ASK QUESTIONS
Medicare is an entitlement determined regardless of income or net-worth. Specifically, it is a health-care benefit for all individuals over age 65, or under age 65 and disabled, Medicare covers doctor visits and hospital care, but only very limited long-term care benefits (not to exceed 100 days and then only for skilled nursing)
Medicaid is a joint federal-state program that pays for long-term care costs. Medicaid covers approximately 49% of all long-term care costs in the United States. Originally, Medicaid was a health-benefit for the elderly. However, the program has been eroded and now eligibility is determined by a means-based test, meaning only people under a certain asset and income limit will qualify for benefits. Unlike Medicare, there is no age restriction to qualify for Medicaid, so with proper planning anyone who needs long-term care can qualify.
The “lookback period is the period of time Medicaid will look at all financial recofrds of a Medicaid Applicant. The look-back period begins to run on the date of filing a Medicaid application. The look-back period is sixty (60) months.
An outright gift to child results in loss of control and also puts your assets at risk. A “parked” outright gift by a parent to a child could be seized, sold, or involuntarily transferred upon the divorce, bankruptcy or death of a child. A gift to a properly designed trust would allow the parent to retain control and access without jeoparding eligibility for long-term care benefits.
Further, significant adverse tax consequences result from an outright gift. For example, if a parent donates assets (e.g., stock originally purchased for $10,000) outright to a child, the child will unnecessarily recognize taxable income if the assets are later sold (e.g., $100,000 – $10,000 = $90,000 of taxable income). Conversely, if the assets were donated to the child in a properly designed trust (includible in the estate of the parent for tax-purposes, but excluded for purposes of Medicaid qualification), the assets would receive a step-up in tax basis on the death of the parent resulting in little or no taxable gain on the subsequent sale by the child.
Crisis Planning is simply planning to qualify for Medicaid within the five year look-back period. If you currently need nursing home care, then a crisis plan will be necesary to qualify for Medicaid if you are not already financially qualified. Though options may be more limited compared to a pre-plan, if you need help quickly, substantial savings can still be achieved with a properly designed crisis plan.
Pre-Planning is simply planning for long-term care expenses while you are still healthy. Virtually all assets can be protected with a proper pre-plan without any loss of control while also preserving tax benefits of the step-up in tax basis at death.
While pre-planning for long-term care expenses well enough in advance is always advised, if your loved ones already needs long-term care, we can still help! Though options may be more limited with a crisis plan when you need help quickly, our attorneys will find solutions to pay for long-term care costs in a crisis situation. Significant assets can still be protected even in a crisis planning situation regardless of the five-year look-back period!
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