There are now more than 40 million Americans over the age of 65, and that number is increasing at a steady pace. With greater longevity, the availability — and complexity — of federal programs created to assist the aging population is also growing. That’s where an elder law attorney can help.
An elder law attorney, sometimes referred to as an elder care attorney, can help older adults and their families navigate the complicated financial and legal decisions they face.
With that being said, I asked Gina Salamone, Director at the firm HuckBouma, who concentrates her practice on elder law, estate planning and special needs planning.
Here are Gina’s “The Top 6 Things You and Your Family Need To Know About Elder Law”.
Elder Law is a small practice area that has been growing over the last decade as people continue to live longer lives and require more long-term care. As an elder law attorney, I counsel people on the legal, and sometimes practical, aspects of getting older. As comparison to a traditional estate planning attorney who is planning for what happens when a client passes away, I focus on what happens when a client is alive but no longer healthy. This means planning for how to pay for long-term care if it is needed and also examining government programs such as Medicaid and the Veterans Aid and Attendance program to determine if the client may qualify in the future.
There is a lot of information as well as misinformation out there regarding Elder Law which I would like to clear up. Therefore, I have put together what I would consider the top six things that you and your family need to know about Elder Law.
- Medicare only cares about you when you are getting better. Most people are used to their health insurance covering all of their health care costs (excluding co-pays and deductibles). New retirees are often impressed by the great coverage that Medicare provides. In reality, Medicare is a short-term acute benefit meant for people who are getting over an illness or injury. Should you develop a long-term care issue, meaning that your condition is being maintained rather than improved, Medicare’s coverage will end. For instance, if you break a leg and need to go to a rehab facility after being in the hospital, Medicare will pay 100% of your bill for the first 20 days in rehab. For days 21-100, Medicare will pay a portion of the bill and you will have a co-pay of $170.50 per day. This co-pay may be covered in full by a supplemental insurance plan such as Blue Cross or partially by a Medicare Advantage Plan. If you continue to require care in a nursing home or in your own home after the 100 days has passed, Medicare and supplemental insurance will cease to pay and everything will be out-of-pocket. This can easily be as much as $7-$12,000 per month. For those lucky enough to have one, this is when a long-term care insurance policy would be activated. For other people, this is when we look at government benefits.
- The Medicaid Program. Medicaid is the most comprehensive program for paying for long-term care. Medicaid can pay for care in a nursing home or in an assisted living facility (if it is licensed specifically as a “supportive living facility”). Medicaid pays for all or most of the cost of care including room and board, nurses, doctors, prescriptions, etc. Medicaid also pays for care through the Department of Aging, commonly known as the Community Care Program, which can provide up to 120 hours of in-home care per month. Medicaid is a needs-based program. A couple, provided one spouse remains at home, can retain a house a car and $111,560. A single person can retain only $2,000. Applying for Medicaid requires that the applicant disclose five years of financial records so that Medicaid may determine if any assets were given away–which may result in a penalty.
- The Veterans Aid and Attendance Benefit is more complicated than it once was. This once underutilized program has become more well known in the last few years. The benefit can provide a monthly cash stipend to wartime veterans or their surviving spouses who require care. It is the perfect benefit to look to when paying for in-home care or assisted living. The maximum benefit can be over $25,000 per year and can allow some people to pay for care without dipping into their savings. In October 2018 the VA made dramatic changes to the rules. The VA added a three-year look back period, penalty periods and a defined asset limit (currently $127,061.00 plus a house). This means that those who did not qualify before may qualify now but that others may need to consult with an attorney to pre-plan for the benefit.
- It’s never too late to plan. Yes, Medicaid has a five-year look back period, but that does not mean you need to wait five years in order to qualify for Medicaid benefits. If you or a loved one needs care in a nursing home, you should consult with an Elder Law attorney regarding options. Rather than spend down all of your assets to the allowable limit before qualifying for benefits, we can implement planning to protect assets and leave you in a better position financially. While I do work with people who have more substantial assets, I also work with people who are down to their last $60,000 and want to make sure there are funds remaining in order to pay for additional comforts that Medicaid does not cover.
- It’s also never too early to preplan. It is important to make sure that you have all the tools in place in the event a long-term care need arises. Your estate plan should be designed to give trusted individuals the ability to make decisions for you, take action to protect assets, and to apply for benefits on your behalf. It is important to have a Power of Attorney for Property, Power of Attorney for Healthcare, HIPAA Authorization and a Will or Will/Trust. Additionally, you may wish to add a Medicaid or Veteran’s Asset Protection Trust to your planning. This type of trust allows you to set aside important assets, such as your home, so that they are protected for VA purposes after three years and Medicaid purposes after five years.
- Not all retirement communities require a buy-in. In recent years, I have seen a rising trend in clients moving into retirement communities which required a buy-in. In exchange for a lump sum buy-in, clients move into an apartment, condo or townhome in a community that also offers all levels of care. These buy-ins can range from $150-750,000 in addition to a significant monthly service fee. Despite what seniors are led to believe, these communities offer no guarantees regarding future access to care or the security of your large buy-in. Alternatively, you can find similar amenities elsewhere with no buy-in and the same or even lower monthly service fee. Plus, should the community not meet your expectations, you can feel free to move out at any time without losing a large chunk of your nest egg.
Now that is some great advice from an experienced attorney. If you or someone you know have questions about elder care law please contact Gina Salamone.
Thank you for reading and sharing.
Until Next Time….
Scott Krase, Wealth Manager, Blogger, info@commonfinancialsense.com
Gina Salamone, Director at HuckBouma, gsalamone@huckbouma.com
For the last ten years, Gina has been focusing on assisting families who are facing current or future long term care issues and developing a plan to access care and protect assets. Additionally, Gina works with all types of individuals to discuss and develop detailed and customized estate plans, including Special Needs Trusts for disabled children and adults.
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