Presenting a live 90-minute webinar with interactive Q&A Medicaid Crisis Planning: Advanced Techniques for Preserving Assets After Nursing Home Admission Leveraging DRA Promissory Notes, Community Spouse Resource Allowance and Medicaid Qualified Annuities WEDNES DAY, OCTOBER 22, 2014 1pm East ern | 12pm Cent ral | 11am Mount ain | 10am Pacific Today’s faculty features: Marty Burbank, J.D., LL.M., Attorney, Law Office of Marty Burbank , Fullerton, Calif. Joley L. Eason, ThompsonMcMullan , Richmond, Va. David Goldfarb, Managing Partner, Goldfarb Abrandt Salzman & Kutzin , New Y ork The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
Tips for Optimal Quality FOR LIVE EVENT ONLY S ound Qualit y If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. If the sound quality is not satisfactory, you may listen via the phone: dial 1-866-961-9091 and enter your PIN when prompted. Otherwise, please send us a chat or e-mail sound@ straffordpub.com immediately so we can address the problem. If you dialed in and have any difficulties during the call, press *0 for assistance. Viewing Qualit y To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again.
Continuing Education Credits FOR LIVE EVENT ONLY For CLE purposes, please let us know how many people are listening at your location by completing each of the following steps: • In the chat box, type (1) your company name and (2) the number of attendees at your location • Click the S END button beside the box If you have purchased S trafford CLE processing services, you must confirm your participation by completing and submitting an Official Record of Attendance (CLE Form). Y ou may obtain your CLE form by going to the program page and selecting the appropriate form in the PROGRAM MATERIALS box at the top right corner. If you'd like to purchase CLE credit processing, it is available for a fee. For additional information about CLE credit processing, go to our website or call us at 1-800-926-7926 ext. 35.
Program Materials FOR LIVE EVENT ONLY If you have not printed the conference materials for this program, please complete the following steps: • Click on the ^ symbol next to “ Conference Materials” in the middle of the left - hand column on your screen. • Click on the tab labeled “ Handouts” that appears, and there you will see a PDF of the slides for today's program. • Double click on the PDF and a separate page will open. • Print the slides by clicking on the printer icon.
Medicaid Spend “UP” Marty Burbank, JD, LLM Law Office of Marty Burbank Fullerton, CA 92832 www.OCElderLaw.com marty@ocelderlaw.com
Spend Down vs. Spend Up • Traditional Information from Discharge Planners and Skilled Nursing Social Workers is: Your parents will have to spend down there assets on care before they are eligible for Medicaid. After paying for care for several months or more than a year, when all of their wealth has been depleted then they will qualify for Medicaid. 6
Problem with Spend Down Preserves no assets for the unforeseen needs of the senior institutionalized client, or the well spouse of an institutionalized client. 7
Converting Countable Assets to Non-Countable Assets Spending Up • Countable Assets can Be converted into non countable or non available assets and a person can be immediately qualified for Medicaid without penalty. 8
Countable or Available Assets • Cash • Marketable Securities • Real Estate Other than a Home • More than one car • Jewelry • Savings Bonds • Life Insurance 9
Non-Countable Assets Non-Countable Home of Any Value (depending on state) Car of Any Value Musical Instruments Household Furnishings Funeral Arrangements Medicaid Qualified Annuity 10
Spend UP -- Strategies • If there is debt, Pay down mortgage • Buy a home or even party of a child’s home • Deferred maintenance on home • Update: Kitchen, Roof, Bathrooms, etc. • Buy a new or newer car • Set aside funds for funeral • Buy Long Term Care Insurance 11
Benefits of Spending Up • Accelerated Eligibility • Preserved Assets for Well Spouse • Created a Better Quality of Life for Well Spouse. • If pre need planning then both spouses can benefit from updated house and car • Funeral arrangements are taken care of 12
Wealth Preservation • Advanced Strategies are now available to avoid Medicaid Recovery and transfer wealth to the children or other beneficiaries. 13
Outright Gifting • There is no penalty period for gifts of exempt assets. • Transfers to Adult Responsible Children • Transfers to Irrevocable Trust • Eligibility for Medicaid and VA Benefits 14
Irrevocable Trusts for Medicaid Planning Marty Burbank, JD, LLM Law Office of Marty Burbank Fullerton, CA 92832 www.OCElderLaw.com marty@ocelderlaw.com
VA and Medicaid • Veterans Asset Protection(VAP) Trusts • Medicaid Asset Protection(MAP) Trusts 16
Veterans Pension Aid and Attendance • Aid & Attendance Benefits are available to war era veterans and their surviving spouses who require the regular attendance of another person to assist in at least two activities of daily living such as eating, bathing, dressing and undressing, transferring and the needs of nature • Can be at Home, Assisted Living, or SNF 17
Veterans Pension Aid and Attendance • Benefits: – Single Veteran $1,758 – Married Veteran $2,085 – Surviving Spouse of Veteran $1,130 – Both Spouses are Vets $2,788 18
Medicaid Long Term Care • Generally provides only for care in a Skilled Nursing Facility (SNF) although some states have programs that provide funding fro assisted living. • Patient pays a share of cost and state guarantees balance to give the SNF the total equal to the Average Private Pay Rate 19
VA Service Qualifications • War Time Veteran – One Day during time of war • WWI • WWII • Korea • Vietnam • War on Terror • 90 days consecutive service • Honorable discharge 20
Asset Qualifications Generally Less Than $80,000 – Countable • Cash • Marketable Securities • Real Property other than Home • IRA, 401(k), 403(b) – Not Countable • Home • Care • Furnishings • Funeral Arrangements 21
VA Income Qualification • Income must be less than: – Single Veteran $1,733/mo – Married Veteran $2,054/mo – Surviving Spouse $1,114/mo 22
Income for VA Purposes (IVAP) • All Countable Income less Out of Pocket Medical Expenses = IVAP 23
Example 1 Sammy Seal • Served 2 years in the Navy in Coronado California. He started his service in December 8 th 1939 and was discharged December 9 th , 1941. • He has income from his teachers pension of $4000 per month. His expenses for assisted living total $5500 per month his IVAP is 0 24
Example 1 cont. • Income $4000 • Out of Pocket Exp. -$5,500 • IVAP $0 25
Example 2 Freddie Frogman • Served from December 8 1942 to Jan 1, 1955. • Eniwetok, Saipan, Guam, Tinian, Angaur, Ulithi, Pelilui, Leyte, Lingayen Gulf, Zambales, Iwo Jima, Okinawa, Labuan, Brunei Bay, and Borneo, Inchon, Wonsan Harbor, Hungnam. • Lives in assisted living and rents out his home. He as a pension from the carpenter’s union. 26
Example 2 Freddie Frogman Cont. Rental Income $2000 Pension Income $4000 Social Security $1200 Total $7200 Out of Pocket Medical Exp. -$5500 Income for IVAP $1700 27
VA - Asset Protection Trust • Qualify for VA Pension with Aid and Attendance • Protect from the Creditors of the Beneficiary • Protect from Capital Gains Taxes • Protect from Spendthrift Beneficiaries • Protect Special Needs Beneficiaries 28
Medicaid Issues • Qualification • Share of Cost • Medical Recovery 29
Medicaid Qualification • Single – Countable Assets less than $2000 • Married with community spouse – Community Spouse Resource Allowance $117,240 30
Share of Cost • Minimum Monthly Maintenance needs Allowance – $2,931 31
Medicaid Penalty • In most states there is a 60 month look back penalty that will assign a penalty for any gifts made in the previous 60 months. (not California) • Penalty is calculated by dividing the amount of the gift by the average private pay rate of a nursing home. (about $7500) • The quotient, rounded down, is the number of months of ineligibility. 32
Virginia Puller • Gifts $80,000 to grandson in January of 2014. • 7500/80,000 = 10.6666 • Round down to give us Virginia a penalty of 10 months. • Applies for benefits January of 2015. • In most states she will have to wait until 10 months (November 2015) after her application for Medicaid before she will be eligible for benefits. 33
Some Tax Issues • Capital Gains Tax Step Up IRC 1014 • Capital Gains Home Exclusions IRC 121 $250,000/$500,000 34
Recommend
More recommend
