Posted by Jerrold Bartholomew on July 31, 2008
QUESTION: I have heard that you are allowed to keep some things and qualify for long-term care Medicaid. What are you allowed to keep?
ANSWER: It is true that some property may be exempt for purposes of Medicaid qualification. And indeed, converting non-exempt assets to exempt assets is one valuable method of spend down. The following items are generally exempt: Read the rest of this entry »
Posted in Detroit Elder Law, Estate Planning, FAQ, Flint Elder Law, Gladwin Elder Law, Medicaid, Medicaid Qualification, Nursing Home Crisis Planning, Roscommon Elder Law | Tagged: Elder Law Attorney, FAQ, FAQ: Elder Law, FAQ: Medicaid Qualification, Lapeer Elder Law Attorney, Macomb Elder Law Attorney, Medicaid, Medicaid Exempt Assets, Medicaid Long Term Care, Michigan Elder Law Attorney, Oakland Elder Law Attorney | No Comments »
Posted by Jerrold Bartholomew on July 30, 2008
QUESTION: I am concerned about my parents. My dad just entered the nursing home. His care costs more $6,000.00 per month and my mother is almost out of savings. Does she have to sell the house (which is worth about $250,000.00) to pay for my dad’s care? And what about estate recovery? What is that?
ANSWER: Your mother does not have to sell the house and for now, it is safe as long as you follow the proper procedures to qualify for Medicaid. But there are still several concerns here.
First, most people needing nursing home care will end up receiving Medicaid assistance at some point. Many people make the mistake of thinking that they should just pay the nursing home each month without realizing that there are often estate planning options that can prevent the need for a full spend down. Seeing an elder law attorney during a nursing home spend down is a lot like seeing an accountant at tax time: there are a lot of deductions and exclusions that you would not otherwise know about that can cut your tax bill. An elder law attorney can help you minimize your nursing home bill in the same way. Read the rest of this entry »
Posted in Ann Arbor Elder Law, Detroit Elder Law, Estate Planning, Estate Recovery, FAQ, Flint Elder Law, Gladwin Elder Law, Medicaid, Michigan Elder Law, Nursing Home Crisis Planning, Roscommon Elder Law, Saginaw Elder Law, Your Home | Tagged: Detroit Elder Law, Estate Recovery, FAQ, FAQ: Medicaid Qualification, homestead exemption, houghton lake, Lapeer Elder Law, Macomb Elder Law, Medicaid, Medicaid Long Term Care, Michigan Elder Law, Nursing Home, Oakland Elder Law, Roscommon Michigan, transition to nursing home, Wayne County Elder Law | No Comments »
Posted by Jerrold Bartholomew on May 19, 2008
The reality is that families faced with the chronic illness or disability of a loved-one often have few options but a traditional long-term care facility. Aside from the financial devastation that this usually entails, there is the fact that a traditional nursing home is a difficult place to be in. It is good therefore to see nursing home alternatives emerging, such as described in this story about a new nursing home developing near Grand Rapids, Michigan:
Differing from a traditional “hospital-style” nursing home, the so-called green house concept features smaller facilities designed to create a home-like setting with private rooms, baths and other amenities. Residents still receive the daily assistance and medical care they need, though their activities are not regimented nor predicated on their medical needs.
While the article is silent on the cost of care at this facility, it is not unreasonable to assume that it will be more expensive than traditional nursing home care. If it were otherwise, the article would be trumpeting both higher quality care and lower costs. The fact is that this sort of care remains out of reach for most seniors whose savings would be quickly depleted by the cost of this higher level of assistance. Perhaps the best chance most seniors will have at this sort of care is begin planning early in order to maximize assets.
Posted in Financing A Nursing Home Stay, Nursing Home Crisis Planning, Seniors | Tagged: Asset Protection, financial independence, Financing A Nursing Home Stay, Life Care Planning, Medicaid, Michigan, nursing home costs, Nursing Home Stay, Pre-Planning | No Comments »
Posted by Jerrold Bartholomew on April 24, 2008
Sue Schiebel has written an excellent article on Medicaid Planning. While her article concerns MassHealth, which is the Massachusetts Medicaid program, the rules and ideas explained are the same in Michigan. She writes:
A lot of middle-aged people don’t realize Medicare, the federal health insurance program, pays for a very limited amount of skilled nursing home care. As we live longer, that means more of us will have to spend our own money for long-term care or must rely on MassHealth, the state health insurance for low income people. Many people wind up doing both — first using up many of their own assets to “spend down” to Medicaid limits so they are financially eligible for state help.
Medicaid qualification is a complex area of the law. To highlight just one counter-intuitive aspect, consider that donations to a church or charity are treated as gifts under the law. One making such a gift is technically creating a period of ineligibility for Medicaid. Strictly speaking, a person making significant donations to a church could be ineligible for Medicaid for several months after all other assets have been spent down. An elder law attorney helps families cope with these bizarre rules and avoid such unfortunate results.
Posted in Asset Protection, Disability Planning, Estate Planning, Financing A Nursing Home Stay, Medicaid Qualification, Nursing Home Crisis Planning, Pre-Planning for Long Term Care, Transition to Nursing Home / Medicaid | Tagged: Asset Protection, charitable giving, Detroit Elder Law Attorney, Elder Law, Genesee Elder Law Attorney, Lapeer Elder Law Attorney, long term care, Macomb Elder Law Attorney, Medicaid Qualification, Michigan Elder Law, Michigan Nursing Home, Nursing Home, Oakland Elder Law Attorney | No Comments »
Posted by Jerrold Bartholomew on April 7, 2008
Retirement assets (401ks, IRAs, etc) are considered available assets for purposes of Medicaid qualification in Michigan. In simple terms, that means that those funds have to be spent down until the threshold for asset eligibility is met. In the case of a single person, asset eligibility is generally about $2,000.00, with some additional allowances for the homestead, modest life insurance and funeral expenses. In the case of a married person, the threshold is higher, and will be between $20,880.00 and $104,400.00, depending on the couple’s assets before entering the nursing home. For more details, see The Basics of Medicaid Qualification, below.
In order to avoid having to spend these assets on the cost of care, it is very common to annuitize the retirement assets. For a variety of reasons, I think this is something to avoid whenever possible. First of all, the return on such annuities is low. With inflation likely to increase in the present economic climate, it is difficult to recommend a long-term investment with a low return. An additional concern is that current law requires an annuity to pay out in level installments and in an actuarially sound manner. The days of the deferred annuity with a substantial amount held until after the passing of the owner are gone. Furthermore, under current law, the state of Michigan must be named as the remainder beneficiary after the community spouse or a disabled child. It is true that an annuity will provide secure retirement income for a community spouse, but it should be considered an alternative of last resort in light of these considerations.
Posted in Annuities, Asset Protection, Disability Planning, Estate Planning, Medicaid, Medicaid Qualification, Nursing Home Crisis Planning, Technical, Transition to Nursing Home / Medicaid | Tagged: annuities, Asset Protection, Estate Planning, Estate Recovery, legal, long term care, Medicaid, Michigan Estate Planning, Michigan qualification for Medicaid | 2 Comments »
Posted by Jerrold Bartholomew on March 7, 2008
An astounding thing happened during the fall of 2007. Michigan changed its Medicaid policy with respect to annuities and implemented those changes with retroactive effect.
The new policy requires annuities to have several features in order to avoid being considered a divestment. Among the requirements is a rule that the state of Michigan must be named a remainder beneficiary to the extent of Medicaid benefits received. This law applies to all annuities purchased or altered after February 8th, 2006, the day President Bush signed the Deficit Reduction Act into law.
Posted in Annuities, Medicaid, Medicaid Qualification, Nursing Home Crisis Planning, Transition to Nursing Home / Medicaid | Tagged: annuities, annuity, Elder Law, Estate Recovery, law, legal, long term care, Medicaid, medicaid penalty, Medicaid Penalty Period, Nursing Home, penalty period, policy | 1 Comment »
Posted by Jerrold Bartholomew on March 6, 2008
It is important to understand the basic rules of qualifying for Medicaid Long Term Care Assistance in order to cope with the financial realities of a relative’s long-term care. The rules below apply in Michigan and have been updated for 2008.
First, you should understand that the rules are different for single people and those who are married. To make things just a little more complicated, if both spouses of a married couple are in the nursing home, they are both subject to the rules of a single person, with each spouse qualifying separately.
Posted in Nursing Home Crisis Planning, Pre-Planning for Long Term Care | Tagged: 2008, Estate Planning, Financing A Nursing Home Stay, legal, long term care, Medicaid Qualification, Michigan Elder Law, Michigan Estate Planning, Michigan Long-Term Care, Michigan Nursing Home, Michigan qualification for Medicaid, Michigan Seniors, Nursing Home | 2 Comments »
Posted by Jerrold Bartholomew on March 6, 2008
Under previous Medicaid policy, applicants for long term care were given the benefit of a doubt most of the time. In some cases, a demonstrated intent to complete asset conversion, which is the process of converting non-exempt assets into exempt or excluded assets and is the heart of Medicaid planning, would be enough to pass scrutiny.
Posted in Financing A Nursing Home Stay, Medicaid, Medicaid Qualification, Nursing Home Crisis Planning, Transition to Nursing Home / Medicaid | Tagged: application process, asset conversion, Asset Protection, legal, life insurance, Medicaid, medicaid application process, medicaid planning, Nursing Home | No Comments »
Posted by Jerrold Bartholomew on March 5, 2008
Many Elder law attorneys advise loving couples to pursue divorce as a method of asset protection. I have never found the technique necessary and, frankly, find the approach ethically questionable. Alternatives exist for both pre-planning and crisis planning that avoid the murky waters of a consensual divorce between an otherwise happily-wed pair. It is my view that you should not have to pretend to be something that you are not in order to protect assets. I always counsel my clients to disclose everything on the Medicaid application. Failure to do so can be considered fraud and even carry federal penalties. It is my job as an estate planning to arrange my client’s estate in a manner that allows qualification. But that is not a matter of hiding assets–nor is it a manner of simply spending down. I have helped countless couples protect their estates from the cost of long-term care and there has never been a reason to resort to divorce.
Posted in Asset Protection, Financing A Nursing Home Stay, Medicaid, Medicaid Qualification, Nursing Home Crisis Planning, Pre-Planning for Long Term Care | Tagged: Asset Protection, crisis planning, divorce, Elder Law, law, legal, Michigan Seniors, Pre-Planning | No Comments »
Posted by Jerrold Bartholomew on March 4, 2008
Before the Deficit Reduction Act was signed in February of 2006, it was relatively easy for an elder law attorney or a well-informed layperson to set aside money to pay for the upkeep of a nursing home patient’s homestead. A simple contract could be created and assets transferred to a responsible relative who would pay for the utilities, taxes, insurance and maintenance of the nursing home patient’s home. It also used to be possible to gift a significant amount of money each month. Therefore one could simply give assets to another to keep up the home. These techniques were necessary because a person in a nursing home can generally have only $2,000.00 in cash or equivalent non-exempt assets and all but a small portion of income will go to the cost of care. Since such a small amount of money is dwarfed by property taxes alone, the policy allowing money to be set aside for homestead maintenance made sense for several reasons.
First of all, some people do return home, even after long stays in a nursing home. Second, there are significant tax benefits to waiting until one’s passing to transfer a homestead to a relative. But with the possibility of tax foreclosure or dissipation through neglect, a sale or significant financial hardship is difficult to avoid with the owner in a nursing home. Moreover, Medicaid policy considers the transfer of a homestead a divestment subject to penalty in most cases. Third, the sale of home in financial distress is a loss to an effected family, particularly in today’s troubled real estate market.
Posted in Asset Protection, Medicaid, Nursing Home Crisis Planning, Transition to Nursing Home / Medicaid, Your Home | Tagged: Pre-Planning, Medicaid, penalty, penalty policy, Divestment, homestead, Estate Recovery, real estate | No Comments »
